Good Corporate Governance Practice
Corporate Governance Report
The Corporate Governance (CG) is a set of guidelines and recommended rules prepared by Estonian Financial Supervision
and Resolution Authority, which is intended to be observed mainly by publicly traded companies. TKM Group follows largely
the Corporate Governance Code despite their indicative nature. Below is a description of the management principles of TKM
Group and general meetings held in 2025, and justification is given in the events when some clauses of the Code are not
followed.
General meeting
Exercise of shareholders’ rights
The general meeting of shareholders is the highest governing body of TKM Group. The annual general meeting is held once
a year and extraordinary general meetings may be convened by the Management Board in the events prescribed by law. The
general meeting is competent to change the articles of association and share capital, elect members of the Supervisory
Board and decide on their remuneration, appoint an auditor, approve the annual report and allocate profit, as well as decide
on other matters stipulated by the articles of association and laws.
As far as the Group is aware, no agreements have been concluded between shareholders regarding the coordinated exercise
of shareholder rights.
Convening the general meeting and disclosures
TKM Group published a notice convening the general meeting through information system of the Nasdaq Tallinn Stock
Exchange as well as on its website on 20st of February 2025 and through a daily newspaper Eesti Päevaleht on 21st of
February 2025. The Group enabled its shareholders to ask questions on the topics specified in the agenda by using the email address and phone specified in the notice, and to get acquainted with the annual report, the sworn auditor’s report, the
profit distribution proposal, the report of the Supervisory Board, draft amendment to the Articles of Association, the introduction of the Supervisory Board member candidates, and the drafts of resolutions on its website and in its office at Kaubamaja 1, Tallinn, starting from 21st of February 2025.
The general meeting of shareholders of TKM Group was held in the Viking Motors dealership at Tammsaare tee 51, Tallinn,
on 17th of March 2025 beginning at 12pm. The resolutions made at the general meeting are published in the information
system of NASDAQ Tallinn Stock Exchange and on the website of TKM Group.
Holding of the general meeting
A general meeting can adopt resolutions if over one-half of the votes represented by shares are present. A resolution of
general meeting is adopted if over one-half of the votes represented at the meeting are in favour unless a larger majority is
required by law.
The general meeting of TKM Group must take part in person or on the basis of authorization and, in accordance with the
articles of association, the general meeting may adopt resolutions if the general meeting is attended by shareholders who
hold more than half of the votes represented by shares. At the general meeting held on 17th of March 2025, shareholders
were able, in order to exercise their shareholder’s rights, to forward their vote to the public limited company before the
general meeting, at least in a format which could be reproduced in writing or with a digitally signed ballot delivered by email.
In 2025, the language of the annual general meeting was Estonian, and the meeting was chaired by TKM Grupp AS’s Legal
Director, Helen Tulve. The meeting could also be followed via webinar. The meeting was attended by Jüri Käo, Chairman of
the Supervisory Board of TKM Grupp AS, Supervisory Board members Enn Kunila, Gunnar Kraft and Kristo Anton, Management Board member Raul Puusepp and Chief Financial Officer Marit Vooremäe. The meeting was also attended by members
of the management boards of TKM Grupp AS subsidiaries: Erkki Laugus (Kaubamaja AS), Anne-Liis Ostov (TKM Beauty OÜ,
TKM Beauty Eesti OÜ), Jüri Kuusk (TKM Auto OÜ), Raimo Koppel (AS Viking Motors), Kristi Simonsen (Selver AS), Andres
Heinver (Kulinaaria OÜ), Tannar Tiitsar (Viking Security AS), Sander Sasi (AS Walde), as well as Merje Kips, Chief Executive
Officer of the subsidiary Kulinaaria OÜ. The auditor Eva Jansen-Diener also attended the meeting. TKM Grupp AS’s auditor Annemar Rimmel participated in the meeting via webinar. Shareholders representing 70.50% of the votes attached to shares
were represented at the general meeting. The appropriation of profit was discussed as a separate agenda item at the general
meeting and a separate resolution was adopted on this matter. In addition to approving the annual report and the appropriation of profit, AS PricewaterhouseCoopers was appointed as the auditor to conduct the statutory audit of TKM Grupp AS
for the financial years 2025–2027, and it was resolved that the amount of the auditor’s fee would be determined by the
Management Board of the public limited company.
Considering the aforementioned descriptions of general meetings held in 2025, the Group has complied with the Corporate
Governance Code in informing the shareholders, convening and holding the general meeting.
Management Board
The Management Board is the governing body of TKM Group, responsible for representing and managing the Group’s daily
operations. According to the Articles of Association, the Management Board may consist of one to six members. In accordance with the Commercial Code, the members of TKM Group’s Management Board are elected by the Supervisory Board.
The selection process is gender-neutral and based on the actual competence of the candidates. A candidate must provide
their consent to be appointed as a member of the Management Board. Under the Articles of Association, a Management
Board member is elected for a fixed term of up to three years. The extension of a member’s term cannot be decided earlier
than one year before the planned expiration of the current term, nor for a period exceeding the maximum term specified by
law or the Articles of Association. Currently, TKM Group has a single-member Management Board.
The Management Board member of TKM Group is Raul Puusepp, whose term of office was extended on 13th of February 2026, and his mandate will expire on 5th of March 2029. Raul Puusepp graduated from the University of Tartu in 1993 with a degree in applied mathematics. In 2000-2002, Raul Puusepp was the Chairman of the Management Board of AS Tartu Kaubamaja. He has
previously worked as the head of the Southern Region of AS Leks Kindlustus and as the project manager of AS Eesti Post. Raul Puusepp participates in the work of all Estonian subsidiaries of TKM Group AS and the supervisory boards of Verte Auto SIA, SIA FORUM AUTO, Motus auto UAB, UAB KIA Auto, SIA TKM Latvija and UAB TKM Lietuva, including Selver AS, Viking Security AS, TKM Finants AS, AS Walde, OÜ TKM Beauty and OÜ TKM Beauty Eesti as the Chairman of the Supervisory Board. In 2026, Raul Puusepp was awarded the Order of the White Star, 4th Class, of the Republic of Estonia.
The duties and remuneration of the Chairman of the Management Board are specified in the board member contract concluded with the Chairman, in which the Group was represented by the Chairman of the Supervisory Board. In accordance
with the contract and in accordance with the remuneration principles of the Board Members approved at the General Meeting, the Chairman of the Management Board is paid a membership fee and he may receive performance pay once in a year
accordance with the specific, comparable and predefined objectives of the Group’s economic results for the previous year.
The Management Board member of the Group has no additional bonuses or benefits. In 2025, the total remuneration of the
Chairman of the Board (gross fee, on accrual basis) amounted to 241.8 thousand euros (in 2024 279.5 thousand euros),
including calculated performance fees (gross fee, on accrual basis) of 97.8 thousand euros (in 2024 135.5 thousand euros).
The issuer’s costs include, in addition to accrual-based charges, the social tax costs according to the rate established by
law. A more detailed overview of the remuneration paid in accordance with the remuneration principles of the issuer’s manager is available in the remuneration report.
Unlike the recommendation in point 2.2.1. of the Corporate Governance Code, TKM Group has a single-member Management Board. This structure follows a long-standing tradition. In addition to the Management Board member, the Group’s
leadership team includes the Chief Financial Officer, Legal Director, IT Director, and Marketing Director. All key decisions are
made jointly by TKM Group’s Management Board and leadership team in cooperation with the Supervisory Board. The Group
also works closely with the management of its subsidiaries and the heads of relevant business areas. The Group believes
that this governance structure best protects shareholder interests and ensures the company’s long-term sustainability.
Significant transactions with the Group that are concluded with a member of the Management Board, or a person close to
or related to him or her are decided and determined by the Group’s Supervisory Board. No such transactions occurred in
2025 or 2024. There were also no conflicts of interest during these periods.
As of 31.12.2025, Raul Puusepp owns 19,000 TKM Grupp AS shares (0,0466%)
Supervisory Board
The Supervisory Board plans the activities of Group, organises its management and supervises the activities of the Management Board in the period between the meetings of shareholders. The Supervisory Board notifies the general meeting of
the result of such supervision. The Supervisory Board decides on the development strategy and investment policy of the
Group, conclusion of real estate transactions, adoption of the investment budget and annual budget prepared by the Management Board. The meetings of the Supervisory Board are regularly held once a month and additionally extraordinary if
necessary.
In 2025, 12 scheduled meetings and 1 extraordinary meeting of the Supervisory Board were held and in 2024, 12 scheduled meetings and 1 extraordinary meeting was held. In 2025, all members of the Supervisory Board attended all meetings of the
Supervisory Board, except for Kristo Anton, who was absent from one of the council meetings in October 2025.
The Supervisory Board has three to six members according to the resolution of the general meeting and the member is elected for up to three years. The work of the Supervisory Board is organised by the Chairman of the Supervisory Board. By the resolution of the general meeting held on 18th of March 2025, Jüri Käo, Enn Kunila, Kristo Anton, Meelis Milder (an independent Supervisory Board Member) and Gunnar Kraft (an independent Supervisory Board Member) were elected as the members of the Supervisory Board. The mandates of the Supervisory Board will expire on 20th of May 2027.
The Chairman of the Supervisory Board is Jüri Käo, who has been a member of the Supervisory Board of TKM Grupp AS since 1997 and has served as Chairman of the Supervisory Board continuously since 2009. He has also been a Chairman of the Supervisory Board in 2000-2001. Jüri Käo works as the Chairman of the Management Board of OÜ NG Investeeringud and participates in the work of all Estonian subsidiaries of TKM Grupp AS and the supervisory boards of UAB TKM Lietuva and SIA TKM Latvija. He is the Chairman of the Supervisory Board of Kaubamaja AS and a member of the Audit Committee of TKM Grupp AS. He is also the Chairman of the Supervisory Board of Kitman Thulema AS, a member of the NG Investeeringud group of companies, and a Member of the Supervisory Board of AS Liviko, AS Balbiino, OÜ Roseni Kinnisvara, Roseni Majad
OÜ, OÜ Kitman Coldtech, OÜ NG Logistics and Kuulsaal OÜ.
Jüri Käo has been elected to the governing body of the Estonian Employers’ Confederation since 1996 and has been the Deputy Chairman of the Council of the Union since 2016. From 1995 to 2015, Jüri Käo was the Deputy Chairman of the Board of the Estonian Chamber of Commerce and Industry. In 2015, the Estonian Chamber of Commerce and Industry recognized him for his services with the 1st class award in the long-term promotion of the Estonian economy and business environment, and in increasing business motivation. Jüri Käo has been awarded the Order of the White Star of the 2nd and 4th Class of the Republic of Estonia.
As of 31.12.2025, Jüri Käo represents 4,775,508 shares (11,73%) of TKM Grupp AS through the Group’s parent company NG Investeeringud OÜ.
Enn Kunila has been elected by the shareholders as a member of the Supervisory Board of TKM Grupp AS since 2000. Enn Kunila works as a member of the Management Board of OÜ NG Investeeringud and participates in the supervisory boards of all Estonian subsidiaries of TKM Grupp AS, UAB TKM Lietuva and SIA TKM Latvija, including being the Chairman of the Supervisory Board of TKM Kinnisvara AS, TKM Kinnisvara Tartu OÜ, SIA TKM Latvija and UAB TKM Lietuva. He is the Chairman of the Supervisory Board of members of the NG Investeeringud group of companies AS Liviko, AS Balbiino, OÜ Roseni Kinnisvara, Roseni Majad OÜ, Kuulsaal OÜ and a member of the Supervisory Board of Kitman Thulema AS, OÜ Kitman Coldtech, OÜ NG Logistics.
Enn Kunila has been the Chairman of the Council of the Estonian Food Industry Association and a Member of the Council of the Estonian Cultural Endowment for many years, as well as a member of the management bodies of several public organizations related to entrepreneurship. Enn Kunila has been the Chairman of the Board of the Estonian Friends of the Art Association since its establishment in 2007. In addition, he is the founder of the group of Society of Friends of Art – patrons providing significant financial support to the Estonian Museum of Art. He has also been a member of the council of the Estonian Art Museum since its establishment in 2016. The Estonian Chamber of Commerce and Industry has recognized Enn Kunila for his contribution to shaping the Estonian business environment and the Ernst & Young Estonian Entrepreneur’s Lifetime Achievement Award. Enn Kunila’s work in introducing Estonian classical painting has been recognized with the title of Friend of Culture of the Year, the Order of Tallinn, the Order of Merit of the Ministry of Foreign Affairs of Estonia, and the Order of Merit of the Italian Republic. In 2006, Enn Kunila was awarded the 4th Class Order of the White Star of the Republic of Estonia.
As of 31.12.2025, Enn Kunila represents 4,699,138 shares (11,54%) of TKM Grupp AS through the Group’s parent company
NG Investeeringud OÜ.
Kristo Anton holds a master’s degree (MBA) from Concordia International University Estonia since 2001 and a master’s degree (MScEng) from Tallinn University of Technology since 2022. Kristo Anton has been working as the Investment Manager of NG Investeeringud OÜ since 2006. Kristo Anton is also a member of the sustainable development working group of TKM Grupp AS and a member of the Audit Committee. As of 1st of January 2024, Kristo Anton participates in the work of the Supervisory Boards of Estonian subsidiaries of TKM Grupp AS, SIA Verte Auto, SIA TKM Latvija, UAB TKM Lietuva. Outside the Group, Kristo Anton belongs to the Management Board of Mansum OÜ.
Kristo Anton does not own shares of TKM Grupp AS. Kristo Anton holds a 0.11% stake in NG Investeeringud OÜ, which is a shareholder of the Group. However, this is not considered an indirect holding under stock exchange rules or IFRS, as it does not constitute a controlling interest.
Meelis Milder has been elected by the shareholders as a Member of the Supervisory Board of TKM Grupp AS since 1997 and participates in the work of the Supervisory Board of Kaubamaja AS. Meelis Milder graduated from the Faculty of Economics of the University of Tartu, worked as a management consultant in Mainor and was a long-term Chairman of the Board of AS Baltika.
In the years 2021-2023, Meelis Milder managed the AS Wendre.
Meelis Milder is also a founding member of the Estonian Association of Merchants, the Estonian Association of Clothing Manufacturers and the Estonian Association of Large Enterprises, and is a visiting lecturer at the University of Tartu as well as an honorary member of the Estonian Academy of Arts. Meelis Milder has been awarded the Order of the White Star, 4th Class, as well as decorations from the Ministry of Foreign Affairs, the Estonian Olympic Committee and the University of Tartu.
Meelis Milder does not own shares of TKM Grupp AS.
Gunnar Kraft has been elected by shareholders as a member of the Supervisory Board of TKM Grupp AS since 2004 and
participates in the work of the Supervisory Boards of Kaubamaja AS and TKM Finants AS, as well as the Audit Committee
of TKM Grupp AS. Gunnar Kraft graduated from Tallinn Polytechnic Institute as an industrial economist and obtained a
Master’s degree in International Business Administration from the University of Helsinki. From 1992 to 2002, he worked as
Vice President of AS Eesti Investeerimispank, Chairman of the Supervisory Board of AS Optiva Pank and Director of Baltic
Banking at Sampo Pank PLC. From 2002 to 2014, Kraft was Chairman of the Management Board of AS Sangar and from
2015 to 2022 Chairman of the Supervisory Board. He is also Chairman of the Supervisory Board of AS Mivar-Viva. Since
2003, Gunnar Kraft has served as a member of the board of the Estonian Chamber of Commerce and Industry, and from
2005 to 2013 he was a member of the council of the Estonian Employers’ Confederation. Since 1995, Gunnar Kraft has been
President of the NGO Sport for All Association, and since 2002 he has served as Honorary Consul of Costa Rica in Estonia.
Gunnar Kraft has been awarded the Order of the White Star, 4th Class.
As of 31.12.2025, Gunnar Kraft owns 15,654 TKM Grupp AS shares (0,038%) and represents 31,644 shares (0,078%) of TKM
Grupp AS through the company OÜ Viromeena.
Members of the Group’s Supervisory Board Jüri Käo and Enn Kunila are members of the Management Board of the shareholder OÜ NG Investeeringud, which holds a significant stake in the Group. The independent members of the Supervisory Board are Meelis Milder and Gunnar Kraft, who do not have any commercial, family or other links with the Group, the company controlled by it, the controlling shareholder of the Group, the company belonging to its Group or the members of the management bodies of those companies which could influence their decisions due to a conflict of interest. Meelis Milder is a member of the Group’s Supervisory Board since 1997 and Gunnar Kraft since 2004, so these persons do not fully meet the independence characteristics set out in the Estonian Financial Supervision and Resolution Authority’s guide, but the Group highly values the contribution and knowledge of both Supervisory Board members. According to the Group, the long-term participation of the members of the Supervisory Board as a member of the Supervisory Board does not affect their independence but, on the contrary, their competence is enhanced.
According to the decision of the annual general meeting held on 18th of March 2024, the monthly remuneration of the Supervisory Board member of TKM Grupp AS is 3,500 euros; the Chairman of the Supervisory Board receives 4,200 euros monthly. In 2025, the remuneration of the members of the Supervisory Board of TKM Group in the total amount of 218 thousand euros has been calculated, including 50 thousand euros for the Chairman of the Supervisory Board (183 thousand euros in 2024, including 42 thousand euros for the Chairman of the Supervisory Board). The issuer’s costs include, in addition to accrual-based charges, the social tax costs according to the rate established by law.
Cooperation between the Management Board and Supervisory Board
The Management Board and Supervisory Board closely collaborate to achieve the purpose of better protection of the interests of TKM Group. The Management Board, the management team and the Supervisory Board jointly participate in development of the strategy of the Group. In making management decisions, the Management Board and the management team are guided by the strategic instructions supplied by the Supervisory Board.
The Management Board regularly notifies the Supervisory Board of any important circumstances concerning the planning
and business activities of the Group’s activities and separately draws attention to any important changes in the business
activities of TKM Group. The Management Board submits the information, including financial statements to the Supervisory
Board, in advance before the holding of a meeting of the Supervisory Board. Management of the Group shall be based on
the legislation, articles of association, resolutions of meetings of shareholders and Supervisory Board, and the set objectives.
Changes in Articles of Association
Amendments to the articles of association shall be made in accordance with the Commercial Code, under which a resolution
on amending the articles of association is adopted if at least 2/3 of the votes represented at a general meeting of shareholders are in favour, unless a larger majority is required by articles of association. The articles of association of TKM Grupp AS do not provide for a larger majority requirement. A resolution on amending the articles of association shall enter into force as of the making of a respective entry in the commercial register.
Shareholders with a significant shareholding
As of 31.12.20As of 31.12.2025 the share capital of TKM Group in amount of 16,291,680 euros consists of 40,729,200 registered shares, each with the nominal value of 0.40 euros. All issued shares have been paid.
The shareholder with a significant shareholding is OÜ NG Investeeringud owning 67.1% of the Group’s shares.
Shares granting special rights to their owners and would lead to unequal treatment of shareholders in voting, have not been issued.
Disclosure of information
Group treats all shareholders equally and notifies all shareholders of important circumstances equally, by using its own
website as well as the information system of the Nasdaq Baltic Stock Exchange.
Group’s website www.tkmgrupp.ee contains contact information of the Group and key employees, press releases and reports. The annual and interim reports include information on the strategy and financial results of the Group as well as the Corporate Governance Report. Along with the annual report, the Supervisory Board’s written report on the annual report referred to in § 333 (1) of the Commercial Code shall be made available to shareholders on the Group’s website. In the subsection of Market News, information is disclosed with regard to the membership of the Supervisory Board and auditor, resolutions of the general meeting, and other important information.
Financial reporting and auditing
It is the duty of the Executive Board of TKM Group to organise the internal control and risk management of the Group in a manner that ensures the accuracy of the published financial reports. Each year, the Group publishes the consolidated audited annual reports and quarterly interim reports consolidated during the financial year, which have been disclosed through the NASDAQ Baltic Stock Exchange information system and are publicly available on the Group’s website. In addition to the disclosed financial reports, management information is gathered in symbiosis with high-quality and accurate financial indicators, and management reports are prepared to ensure adequate governance of the Group’s companies.
The purpose of the internal control and risk management systems connected with the financial reporting process is to ensure harmonised and trustworthy reporting of the Group’s financial performance in conformity with the applicable laws, regulations, adopted accounting policies and the reporting principles approved by the Group. The principles of risk management have been defined in the Group’s risk management framework, which describes the more important activities for risk management relating to identification, assessment, prioritisation and mitigation of risks and the definitions, roles and areas of responsibility related to the field. In addition, the risk management and internal control activities are organised with the work organisation rules of the Group and its subsidiaries, which describe the functioning of various processes.
The Group’s financial area together with accounting and management reporting is the area of responsibility of the Group’s
chief financial officer (CFO) being responsible for the identification and assessment of risks in financial reporting, arranging the principles in relation to financial reporting, organises the tools that are required for accounting and reporting and prepares the officially published financial reports of the Group. The financial reporting processes and systems are developed on a continuous basis. Risk analysis is conducted annually. This risk analysis serves as a basis for the further development of supervision and control measures and checkpoints in reporting to prevent the realisation of risks. The Group’s internal audit supervises the operation of the internal control system, including, among other things, financial reporting processes. The Group’s accounting, funding, IT administration and insuring have been centralised.
On 18 June 2019, the European Commission Delegated Regulation (EU) 2018/8151 entered into force, in accordance with
which issuers whose securities are admitted to trading on a regulated market in a Member State of the European Union,
shall publish consolidated financial statements in the European Single Electronic Format (ESEF) as from 1 January 2021.
The Group’s financial processes and reports are subject to an annual financial audit, conducted generally by an auditor selected by the Supervisory Board as a result of a competition and approved by the general meeting. Auditors are appointed to perform a single audit or for a specific term. The procedure for remuneration of auditors shall be determined by the Management Board. Along with the resolution of the general meeting from 2025, the financial auditor of the financial year 2025 was AS PricewaterhouseCoopers (PwC). The agreement entered into with the auditor complies with the requirements of the CGR. In 2025, the Group’s contractual auditor, AS PricewaterhouseCoopers, did not provide any other services in addition to auditing the consolidated annual report and the audit of the subsidiary companies’ annual reports. The total amount of fees paid or payable for audit services provided by the Group’s contractual auditor in 2025 is 272 thousand euros. Of this amount, 192 thousand euros represented fees for the audit of the consolidated annual report, 77 thousand euros for other assurance services, and 1 thousand euros for other non-audit services.
In 2025, the auditor participated in the ordinary general meeting of shareholders, where the 2024 consolidated annual report was approved.
In our opinion, the financial audit conducted in 2025 has been in conformity with regulatory provisions, international standards and the set expectations. In 2025, there have been no circumstances of which the auditor would have informed the Supervisory Board, which, in the auditor’s opinion, could affect the work of the council or the management of the Group. In addition, the auditor has not reported a threat to the auditor’s independence or the professionalism of his work.
The results of the 2025 audit were presented by the auditor in the course of the interim audit and, in respect of the final audit, prior to the issuance of the audit opinion. The independent auditor’s report is presented on pages 134-142.
Audit Committee
The Audit Committee of TKM Grupp AS is a body established by the Supervisory Board, whose task is to advise the Supervisory Board in matters related to the exercise of supervision, including accounting, auditing, risk management, internal control and audit, supervision, the budget preparation process, and the legality of activities.
To fulfil this task, the Audit Committee monitors and analyses the processing of financial information and the auditing process of the annual report and the consolidated report, supervises risk management, and evaluates the effectiveness of the internal control system. The Audit Committee makes proposals for the appointment and removal of the audit firm and assesses its independence and compliance with requirements.
In performing its tasks, the Audit Committee cooperates with the Supervisory Board, the Management Board, internal and external auditors, and, if necessary, external experts.
During the reporting year, the Audit Committee consisted of four members: Kristo Anton, Gunnar Kraft, Jüri Käo, and Kaia
Salumets. The Audit Committee is chaired by Kaia Salumets.
The Audit Committee prepares an annual summary report for the Supervisory Board on the fulfilment of the objectives set
out in its statutes, providing an overview of its activities.
Based on its duties, the Audit Committee provides ongoing evaluations and makes proposals to the Supervisory Board, the Management Board, internal audit, and/or the external audit provider.
During the reporting period, the Audit Committee held 10 regularly scheduled meetings.