ANNUAL REPORT

2007

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CapMan Plc

CapMan Capital Management Ltd CapMan Real Estate Ltd CapMan RE II GP Oy CapMan Hotels RE GP Oy Realprojekti Oy Korkeavuorenkatu 32 00130 Helsinki Finland

CapMan AB

CapMan Invest A/S

Tel +45 35 26 02 12 Fax +45 35 26 02 14

Esplanaden 7 1263 Copenhagen K Denmark

Grev Turegatan 30 P.O.Box 5745

114 87 Stockholm · Sweden Tel +46 8 545 854 70 Fax +46 8 545 854 89

CapMan Norway AS Haakon VII's gate 1 P.O.Box 1235 Vika 0110 Oslo · Norway Tel +47 23 23 75 75 Fax +47 23 23 75 79

CapMan (Guernsey) Ltd CapMan Mezzanine (Guernsey) Ltd CapMan (Guernsey) Buyout VIII GP Ltd CapMan (Guernsey) Technology 2007 GP Ltd CapMan (Guernsey) Life Science IV GP Ltd

Tel +44 1481 726 521 Fax +44 1481 710 376

Hambro House, St. Julian's Avenue P.O.Box 86 · St. Peter Port Guernsey, GY1 3AE · Channel Islands www.capman.com

Tel +358 207 207 500 Fax +358 207 207 510

Take a step forward with us.

CapMan

CapMan is one of the leading alternative asset managers in the Nordic countries and manages Nordic funds with approximately €3.9 billion in total capital. CapMan has four investment areas (CapMan Buyout, CapMan Technology, CapMan Life Science and CapMan Real Estate), and each of them has a dedicated team and funds. Altogether CapMan employs 110 people in Helsinki, Stockholm, Copenhagen and Oslo. CapMan was established in 1989 and its B shares are listed on the Helsinki Stock Exchange since 2001.

The Annual Report is divided into three sections. The fi rst section presents CapMan Plc as an investment and the funds managed by CapMan. The second section describes the investment activities of the funds. The third section comprises the Group's corporate governance and the Report of the Board of Directors and Financial Statements for 2007.

The illustrations used in the Annual Report are based on images selected from photo albums of CapMan's personnel. The images tell of employees' relationship to life and free time. The ambition, energy and know-how of our people are the motor, which drives CapMan's business and the success of our investment targets.

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Photos on pages 42, 47, 52 and 60: Portfolio company image archives. Other photos: Heikki Tuuli, Studio Heikki Tuuli.

CapMan as an Investment

We are committed to reach our objectives. We are innovative and aim to be the trendsetter for the industry. Employees are our most important resource.

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CAPMAN AS AN INVESTMENT

CEO's review 2 Mission, vision and values 4 Strategy and objectives 6 Organisation 8 CapMan as an investment 9 Shares and shareholders 14 Investor services 18 Fund investors – Our clients 22 CapMan funds 23 Returns to investors from funds 26 Investment activities 28 Access Capital Partners 30 Corporate social responsibility 31 Personnel 32

CEO's review

"My third year as CEO of CapMan Plc has come to a close. The key goals that I targeted for the Group have been steady profit development, expansion of the business portfolio and building of a strong organisation that is independent of individual people. We have achieved significant progress in all of these objectives; however we have yet to exploit our full potential."

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CONTINUED GROWTH OF THE ALTERNATIVE ASSET CLASS

The outlook for our industry provides a solid foundation to further growth. The alternative asset class has continued to attract more investor attention in 2007 and, in addition to larger institutions, also smaller investors have discovered the asset class. The growth has been particularly strong as far as private equity funds are concerned. Private equity funds delivered market-beating returns to investors in comparison to the stock markets also in 2007.

The increasing allocations by investors in different alternative asset products creates growth opportunities for CapMan as well. CapMan's investor base has broadened from the Nordic countries throughout Europe and to the US during the last few years. I believe that we will be able to further capitalise on CapMan's capabilities as an alternative assets manager also with international investors in the years ahead.

STRONG RESULT IN 2007 HIGHLIGHTS THE SIGNIFICANCE OF REAL ESTATE INVESTMENT

I am pleased to report that the Group's earnings per share climbed to a new level in 2007 with year-onyear improvement over 50 per cent, an achievement of which I am proud. The Group has solid resources for growth also in coming years. Shareholders should

"CapMan has delivered an exceptional result in 2007 and the Group has strong prerequisites for growth in the years ahead."

anyway bear in mind that, due to our earnings model, the Group's result should be examined over a longer time frame than quarterly.

The majority of the Group's result for 2007 has arisen from the realisation of CapMan Real Estate I fund's property portfolio. Indeed our real estate investment business has grown, both in terms of assets under management and profi t impact, to the level of the traditional private equity investment. The growth of the entire real estate business is founded on a signifi cant change in real estate investing as pension funds transfer their investments from balance sheet to fund investments. Our most recent example of real estate investment opportunities was the establishment of CapMan's €835 million hotel fund in January 2008.

A STEP FORWARD

As we actively review new investment areas by geography and asset class, the highest priorities on our list are international expansion to address the signifi cant opportunity within the growing Russian market and the introduction of CapMan's value creation concepts in publicly quoted markets. True institutional private equity is still in the early stages in Russia. Many investors are interested in growing their investments in Russia, if an established player such as CapMan is available. Russia offers attractive growth potential for portfolio companies because a large number of sectors are growing at greater than ten per cent annually.

Today our funds invest in unquoted companies. However, the publicly quoted markets offer lots of promising targets in which the private equity investor's skill base, network and resources would be welcome in building real value from the perspective of all owners. Therefore we are studying the possibility to establish our own team to make investments in quoted companies in the Nordic countries.

To better develop the Group's business for the longer term, we restructured our organisation in 2007 and established three service teams – Investor Services, Internal Services and Human Resources. The service teams support our partnership style investment teams and provide fi rst-rate reporting, performance monitoring and administrative services for our stakeholders.

VALUATIONS HAVE RETURNED TO NORMAL LEVELS

The latter half of 2007 was labelled by widening instability in fi nancial markets. The market turbulence, however, has not had substantial impact on the availability of loan fi nancing in CapMan's market segment of middle market buyout transactions and real estate investments made with moderate debt

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structures. There was nevertheless a moderation of enterprise and property valuation levels towards the end of the year. According to our understanding the market has returned to normal levels in terms of pricing and debt ratios following a couple of highly aggressive and active years, which is favourable for new investments. We expect that exit markets will remain good regardless of the nervousness, albeit that a widening of fi nancial instability may be refl ected in realisations by the funds by postponing them.

SUSTAINABLE VALUE CREATION FOR THE LONG-TERM

Active ownership is the cornerstone in each of our existing and new business areas. At the end of 2007 our portfolio comprised 55 investee companies with an aggregate turnover of €3.4 billion and aggregate personnel of over 20,000 as well as 16 real estate assets with a gross lettable area of 108,600 m2 . We strive to engage a good and growth-orientated spirit in the investments we back. The management teams of our portfolio companies have responsibility for the implementation of operative solutions at the business level, and sustainable value creation is underpinned together with a dedicated personnel. In our real estate assets we employ the best real estate development practices and tailor services to the needs of users for the long-term.

I would like to thank our fund investors for their confi dence in CapMan as an asset manager, the management teams and employees of our portfolio companies, who have enabled the strong development of our investments, and our shareholders and personnel for their commitment to our shared objectives.

Heikki Westerlund CEO, Senior Partner

CapMan as an Investment

Mission, vision and values

Janne Martola, Investment Director

Paula Lehtilä, Project Manager

Our mission is to create

fi nancial returns through active ownership.

We act as a high quality service provider by investing capital in companies, properties or other targets within private equity and other alternative asset classes. The lasting value of these investments is created by growth, change and professional governance.

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Mats Gullbrandsson, Partner

Jussi

Our vision is to be the preferred private equity and alternative assets partner

– for investors globally and entrepreneurs locally.

Jussi Paronen, Performance Monitoring Offi cer Dedication.

High Ethics.

Anne

Anne Christina Kyhn, Offi ce Assistant

Kaisa Arovaara, CFO, Head of Internal Services

Teemu Telsavaara, Offi ce Coordinator Michael Ekström, Leasing Manager

Olli Liitola, Senior Partner, Deputy CEO, CapMan Plc

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Mari Huuhka, Investment Manager

Active Ownership.

CapMan as an Investment

Strategy and objectives

The cornerstones of CapMan's growth strategy are a wide range of fund products that meet fund investors' growing demand for the alternative asset class, Nordic approach and effective use of balance sheet to grow shareholder value.

GROWTH IS BASED ON A WIDE PRODUCT RANGE AND NORDIC APPROACH

CapMan's business has expanded strongly throughout the entire history of the Company. Growth has been founded both on introduction of new products and on expansion of operations from Finland to other Nordic countries in the 2000s. Today CapMan's product portfolio encompasses buyout, mezzanine, technology, life science and real estate funds. Of the investment teams CapMan Buyout, CapMan Technology and CapMan Life Science are responsible for funds making investments in portfolio companies in the Nordic countries and together they form their own business area CapMan Private Equity. The other business area, CapMan Real Estate, is responsible for the management of private equity funds making real estate investments.

CapMan expanded its operations into Denmark and Sweden via acquisitions in 2001 and 2002 and established an offi ce in Oslo in 2004. A wide range of fund products, strong local presence in all Nordic countries and well-known brand clearly distinguish CapMan from other private equity investors in the market, and bring synergies at the fund investor interface in fundraising and reporting functions as well as in investment activities.

The third cornerstone of CapMan's growth strategy is effective use of the balance sheet. CapMan is a substantial investor in the funds managed by the Group, investing 5 to 10 per cent of the total capital in new equity funds investing in portfolio companies. About half of own fund investments are fi nanced with debt to improve capital effi ciency of the balance sheet and return on equity.

STRATEGY FOUNDED ON ACTIVE OWNERSHIP

CapMan's strategy is to exploit growth opportunities in the alternative asset class. In addition to private equity and real estate funds the alternative asset class includes, among others, infrastructure funds, forestry funds and active public market funds. In 2007

A wide range of fund products and local presence in all Nordic countries distinguish CapMan from other players in the industry.

CapMan began to explore opportunities to expand into some of these areas and geographically into Russia in particular. The areas under investigation share the potential to utilise CapMan's existing management and investment expertise and to create value in the investment targets through active ownership.

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FUTURE SUCCESS FACTORS

The Group's success in future will continue to be founded on growth, high quality service, dedicated and professional staff and a leading position as an alternative asset manager in the Nordic countries. CapMan strives to offer a comprehensive product range and fi rst-class service for its fund investors, and to sustain the excellent track record of the investment teams.

NEW ORGANISATION SUPPORTS GROWTH

In October 2007 CapMan restructured its organisation and established teams specialising in investor services and internal services alongside investment teams to meet the Group's growth strategy. At the same time, the Group's human resources management was separated into its own team.

The new service teams complement the existing partnership model of the investment teams. Specialised processes related to fundraising, reporting, portfolio company performance monitoring and the Group's internal operations guarantee high quality service for fund investors and other stakeholders, and enable investment professionals to fully concentrate their efforts on investment activities and value creation in the portfolio.

CORNERSTONES OF CAPMAN'S STRATEGY

Wide range of fund products

enables growth of capital under management
levels out risks
utilises common value creation concepts
based on growing investor demand within the alternative asset class

Nordic approach

ensures adequate deal fl ow and enables comparison of investment targets and high selectivity in choosing investment targets
creates good value creation prerequisites

Objectives

To grow the value and liquidity of CapMan's share.
To develop CapMan as a public company while preserving the partnership model in investment activities.
To increase the Group's profi tability through successful investment activities, growing the amount of capital under management and developing new fund products for institutional investors.
To internationalise and diversify the fund investor base.
To enhance the wellbeing of staff and CapMan's reputation as an employer for continuing personnel motivation, expertise and dedication.
To ensure proprietary deal fl ow in all Nordic countries through Nordic investment teams and strong local presence.
To create prerequisites for value creation in portfolio companies and real estate assets on a Nordic level and in Nordic structural reorganisations.
To achieve market leadership in selected investment areas.

CapMan's fi nancial objectives are presented on page 12.

Effective use of the balance sheet

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fund investments from own balance sheet further align CapMan's interests with investors
the investments have signifi cant return potential

Organisation

CapMan's organisation comprises four investment teams that operate under a partnership model. Investment teams and other stakeholders are served by three service teams, which look after the Group's fundraising, fund administration, Group and portfolio company performance monitoring, investor relations, reporting, communications, fi nancial administration, HR management and IT and offi ce services.

Each investment area has dedicated funds and fund-specifi c Investment Committees comprising Senior Partners, Partners and the CEO. Investment Committees make investment

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proposals and presentations on new investments, follow-on investments and realisations of investments to the funds' Advisory Boards.

* CapMan Real Estate reports to Deputy CEO Olli Liitola.

CapMan as an investment

CapMan Plc's B share is listed on the OMX Nordic Exchange Helsinki since April 2001, and CapMan is one of the few listed alternative asset managers in Europe.

PREREQUISITES FOR BUSINESS

A prerequisite for CapMan's business is successful fundraising. The precondition for fundraising is that returns on capital invested fulfi l the fund investors' return targets. Continuity of operations in the longterm depends on successful investment activities, which are related to strong deal fl ow, careful selection of investment targets, successful value creation in the investment targets and realisation of value increase through exit.

The success of fundraising and investment activities depends largely on the expertise of employees responsible for these areas as well as the high quality of reporting, control and administrative processes. Successful investments and exits build fund investors' confi dence in CapMan, which facilitates fundraising for new funds. A loyal investor base is one of CapMan's strengths. Fundraising and fund investors are described in more detail on pages 18, 22 and 23.

LONG-TERM BUSINESS

CapMan funds typically have a 10-year life cycle and most investment targets are held for 4 to 6 years. The risk in funds is mitigated by a diversifi ed investment portfolio, and individual investments are typically less than 15 per cent of a fund's total size. CapMan's objective is to invest steadily across economic cycles. The Group aims at exploiting possible pricing differences between the Nordic countries through its wide deal fl ow, and to make investments at moderate pricing levels.

The long-term nature of funds and investment activities also impacts on CapMan Plc's fi nancial development. More carried interest is likely to be generated during good than poor exit years. Different sources of income and funds in different stages of their life cycles even out fl uctuations in CapMan's income.

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MAIN SOURCES OF INCOME

CapMan Plc's income derives principally from management fees from the funds, carried interest from funds generating carried interest and returns on direct fund investments made from CapMan Plc's own balance sheet. In addition, CapMan receives income from real estate consulting operations and a share of the result of associated companies, among other income.

HOW TO ANALYSE CAPMAN

Of CapMan's income components, management fees can be forecast in the short-term with relative accuracy, while the timing of carried interest and returns on fund investments is more sporadic. When examining carried interest income the overall development of fund portfolios should be monitored instead of individual portfolio companies. Each fund typically contains 10 to 15 investments and therefore a fund's success is not dependent on the success or failure of an individual investment. When examining the funds' portfolios, attention should be paid especially to the ratio of paid-in capital and distributed cash fl ow to investors as well as the current portfolio at fair value. This information is reported quarterly in CapMan Plc's fi nancial reporting.

Changes in fair value of fund investments from CapMan's own balance sheet should also be monitored at the fund level. As the number of investments made from CapMan's balance sheet grows, valuation changes of an individual investment will have more rapid impact on CapMan's result, especially if CapMan Plc is a substantial investor in the fund in question. Investments in portfolio companies are valued in accordance with EVCA guidelines each quarter in connection with CapMan Plc's quarterly reporting.

Why to invest in CapMan's share?

An opportunity to participate in the value creation of unlisted Nordic companies and properties through CapMan's share.
CapMan has an attractive earnings model – multiple sources of income
- the objective is that management fees and income from real estate consulting cover operating expenses
- profi tability results from development of the funds' entire portfolios and is not sensitive to the success or failure of individual investments
signifi cant earnings potential in the funds yet to generate carry and the fund investments made from CapMan's own balance sheet.
Targeted dividend payout ratio is over 50 per cent.
CapMan is one of the few listed private equity fund management companies.
CapMan is a growth company in a growing industry.

When should individual investments be examined?

When a fund has begun to generate carry, it is possible to evaluate the fair value of the fund's portfolio by assessing individual targets and in this way to forecast
When CapMan is a substantial investor in a fund, a change in the fair value of an investment will be refl ected in CapMan Plc Group's result as a change in the fair value of own investments.

the carried interest potential of individual investments.

MAIN SOURCES OF INCOME

Management fees Carried interest Returns on direct fund investments

Management fees paid by the funds are typically determined during the investment period by the original fund size and thereafter on the basis of the remaining portfolio at acquisition cost. Annual management fees are typically 1.5–2.5 per cent p.a. of the funds' total capital for equity funds and 1.25–1.5 per cent p.a for mezzanine funds. Real estate funds typically have lower management fees than equity and mezzanine funds. CapMan's objective is that management fees and income from real estate consulting cover the Group's operating expenses.

As a fund management company, CapMan receives carried interest after the fund has returned a preferential return (usually 7–8 per cent p.a.) to investors. CapMan's share of carried interest (a fund's cash fl ow through exits from its investee targets) is typically 20–25 per cent for funds established before 2004. A share of carried interest received from funds established in 2004 and thereafter is distributed to the members of the investment team responsible for the fund's investment activities, and consequently CapMan's share of carried interest is typically 10–15 per cent for these funds.

There may be volatile fl uctuations in carried interest income in different years according to whether exits are made by funds generating carry. At the end of 2007 the funds generating carry were Finnventure II, III and V, Finnmezzanine II B, CapMan Real Estate I and the Fenno Program.

CapMan Plc has been a substantial investor in the funds managed by the Group since 2002.

The Group's objective is to invest 5–10 per cent of total capital in equity funds investing directly in portfolio companies. Investments from own balance sheet improve the Company's return on equity and even out income fl uctuations. The profi t impact of these investments was already substantial in 2007 and is expected to grow further in future when the amount of invested capital increases.

Substantial commitments have been made in CapMan Buyout VIII, CapMan Technology 2007, CapMan Equity VII, CapMan Mezzanine IV, CapMan Life Science IV, Swedestart Tech and Access Capital Fund II funds to date.

Direct fund investments at fair value as at 31 December 2007

Management fees have increased as a result of growth in capital under management

Carried interest income may fl uctuate in different years

Increasing fund investments and commitments from CapMan's balance sheet...

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…are refl ected in total income from own investments

* For 2007 minority interest of €7.6 million is included in the fi gures.

A THEORETICAL EXAMPLE OF PRIVATE EQUITY FUND CASH FLOWS

Basic assumptions about the example fund

According to the assumptions

The fund size is €100 million.
The fund makes 10 investments, each of size €10 million. Investments are made at 6-month intervals and the fi rst investment is made 6 months after the fund's establishment.
The value of each investment grows 2.5x over a 4-year holding period. The last investment is realised 9 years after the fund's establishment.
The fund's management fee is 2 per cent p.a., based on the fund's size (€100 million) during the investment period (4.5 years) and thereafter on the remaining portfolio at acquisition cost.
The fund's hurdle rate is 8 per cent and the management company's share of carried interest is 20 per cent, which is wholly distributed to the management company in the worked example.
The fund's gross IRR is 2.5.
Net return to investors is 2.2.
Net IRR to investors is 20 per cent p.a.
The fund transfers to carry in its seventh year.
Carried interest received by the management company totals €21.6 million.
Management fees received by the management company total €13.2 million.

Cumulative cash fl ows during a fund's life cycle, M€

Net cash fl ow to investors

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Management fees to management company

Carried interest to management company

FINANCIAL OBJECTIVES

Growth	Profitability	Capital structure	Dividend policy
• Average capital growth of funds under management at least 15 per cent per annum.	• Return on equity over 25 per cent. • Equity fund performance above 15 per cent net IRR.	• Finance approximately 50 per cent of CapMan Plc's own fund investments with debt fi nancing. • Equity ratio at least 50 per cent.	• Payout ratio at least 50 per cent of the net profi t.
Realised 2007 • Growth in capital under management 18 per cent.	• Return on equity 38.9 per cent. • Historic returns to investors from operational equity funds and funds that have terminated operations are presented on pages 26–27.	• Gearing ratio 36 per cent. • Equity ratio 57.6 per cent.	• Proposal of the Board of Directors for 2007 dividend €0.16 which equals to 67 per cent of net profi t.

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* Proposal of the Board of Directors to the Annual General Meeting for year 2007.

Key ratios for CapMan Group 2003–2007

M€	FAS 2003	IFRS 2004	IFRS 2005	IFRS 2006	IFRS 2007
Turnover	18.7	27.7	28.7	38.0	51.6
Management fees	17.8	17.8	20.3	24.9	24.6
Carried interest	0.2	9.1	6.6	9.4	23.6
Income from fund investments	-	0.2	0.5	0.9	0.5
Income from real estate consulting	-	-	0.9*	2.0	2.1
Other income	0.4	0.6	0.5	0.8	0.8
Share of associated companies' result	0.3	-	-	-	-
Other operating income	0.0	0.1	0.1	0.7**	0.2
Fair value gains/losses of investments	-	-0.4	1.6	3.5	5.7
Operating profi t	1.8	7.4	8.4	15.6	29.8
Financial income and expenses	0.4	0.5	0.8	0.4	1.1
Share of associated companies' result	-	0.4	0.3	1.3	1.9
Profi t for the fi nancial year	1.1	4.9	7.0	12.4	24.2
Return on equity (ROE), %	2.3	11.1	14.8	23.4	38.9
Return on investment (ROI), %	4.9	18.9	20.2	29.9	44.2
Equity ratio, %	93.6	88.8	85.8	71.6	57.6
Dividend paid	3.7	4.5	5.3	9.3	12.8***
Personnel (at year-end)	71	74	87	98	110

* For the period July–December 2005.

** Capital gain from the sale of Access Capital Partners shares (12.5% of shares) amounts to €0.6 million.

*** Proposal of the Board of Directors to the Annual General Meeting for year 2007.

Turnover and operating profi t Components of income and operating costs in 2007

Carried interest
Other operating income
Income from fund investments, realised
Operating expenses Financial income and expenses

CapMan_1osa_fglENG.indd 13 20.2.2008 11:48:09

Share of associated companies result

Shareholders' equity per share

Shares and shareholders

CapMan had 4,489 shareholders at year-end. The holdings of personnel and nominee registered owners totalled nearly 70 per cent of the shares.

SHARE CAPITAL

The share capital of CapMan Plc was €771,568.98 for the period 1 January – 31 December 2007. The Annual General Meeting of CapMan Plc in 2007 removed the provisions regarding minimum and maximum share capital and nominal value of the shares, and decided that the share subscription prices to be accrued from share subscriptions pertaining to the Company's stock option programs shall be recorded in the Company's invested unrestricted shareholders' equity.

SHARE SERIES AND NUMBER OF SHARES

CapMan Plc has two series of shares, A series (10 votes) and B series (1 vote). Both classes of shares have equal dividend rights.

The Company had 6,000,000 unlisted A shares and 73,968,819 listed B shares as at 31 December 2007. A shares entitle to 44.8 per cent of all votes and B shares entitle to 55.2 per cent of all votes. A shares are owned by current Senior Partners of CapMan Plc directly or via corporations under control or authority. The Company's shares belong to the book-entry system.

The number of A shares fell from 8,000,000 to 6,000,000 shares during the year, when former Senior Partners of the Company executed a conversion of A shares into B shares. In addition to the share conversion, there was a rise in the number of B shares by 2,810,121 shares in the subscription of B shares with 2000A/B and 2003A stock options.

Key ratios per share

FAS	IFRS	IFRS	IFRS	IFRS
2003	2004	2005	2006	2007
0.02	0.06	0.09	0.15	0.24
0.02	0.06	0.09	0.15	0.24
0.61	0.60	0.64	0.74	0.86
0.05	0.06	0.07	0.12	0.16
327.0	94.4	78.0	80.0	67.0
74 681 630	74 709 330	75 041 938	76 212 849	78 142 867

74 681 630	74 709 330	75 923 348	77 158 698	79 968 819
74 681 630	74 709 330	75 923 348	77 158 698	79 968 819

* Proposal of the Board of Directors to the Annual General Meeting for year 2007.

REDEMPTION OBLIGATION CLAUSE

A shareholder whose share of the entire share capital or the voting rights of the Company reaches or exceeds 33.3 per cent or 50 per cent has, at the request of other shareholders, the obligation to redeem his or her shares and related securities in accordance with the Articles of Association of CapMan Plc.

In addition there is a redemption clause pertaining to the transfer of CapMan Plc A shares. If an A share is transferred to a new shareholder who does not already own A shares in the Company, the other shareholders of A shares have the right to redeem the shares under transfer in accordance with the conditions outlined in the Company's Articles of Association.

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SHARE LISTING AND TRADING CODE

CapMan Plc's B share is quoted on the OMX Nordic Exchange Helsinki as of 2 April 2001 under the Mid Cap category and the GICS Finance sector. CapMan's company code is CPM and the trading code of CapMan B shares is CPMBV.

MARKET VALUE DEVELOPMENT

At year-end the market value of B shares was €240.4 million (€208.9 million). The Company's total market capitalisation, including all A and B shares, was €259.9 million (€233.0 million).

Market value development

Trading and price of shares and stock options

		Trading price, €						Trading turnover
		Volyme weighted
		Highest		Lowest	average		Closing price 31.12		Trading, million shares		Trading, M€
	2007	2006	2007	2006	2007	2006	2007	2006	2007	2006	2007	2006
B shares	4.07	3.15	2.86	2.33	3.49	2.74	3.25	3.02	30.9	21.2	107.0	58.3
2003A options	2.55	1.53	1.40	1.19	1.85	1.40	2.20	1.49	0.5	0.9	0.8	0.1
2003B options*	2.25	-	2.09	-	2.15	-	2.10	-	0.1	-	0.3	-

* Listing of 2003B stock options was commenced on 1 October 2007.

03 04 05 06 07

Relative OMX Helsinki CAP Relative Finance

CapMan B share trading and average price 1.1.2003 – 31.12.2007 Relative development of CapMan's B share and OMX indices 1.1.2003 – 31.12.2007

-25

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Relative CapMan Relative OMX Helsinki

STOCK OPTION PROGRAM 2003

CapMan Plc had one stock option scheme in force at the end of 2007 as part of the Group's employee incentive and commitment scheme. The stock option program 2003 covers employees and members of the Board. The program in its entirety and information on share subscriptions with stock options can be found on CapMan's website at www.capman.com.

The AGM of CapMan Plc annually resolves on the number of stock options to be distributed to the members of the Board of Directors. The maximum number of year 2003 stock options that can be distributed to Board members is 125,000 options. The Board of Directors decides on the distribution of stock options to all others, who are not members of the Board.

As at 31 December 2007, 1.5 per cent of shares and 0.9 per cent of voting rights in the Company may

Stock option program 2003

Number of shares subscribed with

Trading code of options on

be subscribed with unexercised year 2003 stock options.

STOCK OPTION PROGRAM 2000

Stock option program 2000 expired on 31 October 2007. The scheme originally included 5,270,000 stock options with entitlement to subscribe an equivalent number of CapMan Plc B shares. A total of 2,760,693 B shares in CapMan Plc were subscribed with the stock options in 2007, and all in all 5,055,943 B shares were subscribed for with year 2000 stock options.

CHANGES IN OWNERSHIP

The owners of the Company's A shares sold a total of 3,000,000 CapMan Plc A shares and 2,000,000 CapMan Plc B shares to the established company CapMan Partners B.V. in the share transactions that were announced on 4 May 2007 and executed on 16 May 2007. CapMan Partners B.V. is owned by corporations under control of the Senior Partners of CapMan with equal shares.

In connection with the same transaction, the Board of Directors of CapMan Plc approved an application for the conversion of a total of 2,000,000 unlisted CapMan Plc A shares entitling to voting rights into listed CapMan Plc B shares. Due to these share transactions and conversions, CapMan Partners B.V. became the second largest shareholder and the largest holder of voting rights in CapMan Plc. A total of seven statutory notices of changes in ownership were issued in May with respect to these share transactions. Additionally there was one fl agging announcement in November, when the holding of US-based investment fi rm Legg Mason Inc. had reached 5.4 per cent of the Company's shares.

CapMan Plc had 4,489 (5,178) shareholders at year-end.

BOARD AND MANAGEMENT HOLDINGS

As of 31 December 2007 the members of the Board of Directors, the CEO and Deputy CEO of CapMan Plc own a total of 15,563,501 A and B shares, which represent 19.5 per cent of shares and 26.9 per cent of votes, both directly and through corporations under control. In addition CapMan Partners B.V., a corporation under authority of the CEO and Deputy CEO and the other Senior Partners, owns 3,000,000 A shares and 2,000,000 B shares in CapMan Plc.

OWN SHARES

CapMan Plc or its subsidiaries did not hold any of the Company's own shares at the end of the year.

2003A options 2003B options Stock options, number 625 000 625 000 Entitlement to subscribe for B shares, number 625 000 625 000 Share subscription price on 31 Dec 2007 Volume weighted average price of the B share on the Helsinki Exchanges 1.12.–31.12.2003 (€1.72) less dividends from 2003 onwards (€1.42 as of 31.12.2007) Volume weighted average price of the B share on the Helsinki Exchanges 1.6.–30.6.2004 (€1.60) less dividends from 2004 onwards (€1.35 as of 31.12.2007) Share subscription period began 1.10.2006 1.10.2007 Share subscription period ends 31.10.2008 31.10.2009

stock options as at 31 Dec 2007 49 428 -

the Helsinki Exchanges CPMBVEW103 CPMBVEW203

SHAREHOLDERS BY SECTOR AS AT 31 DECEMBER 2007

CapMan_1osa_fglENG.indd 16 20.2.2008 11:48:10

* Shareholders among the 100 largest shareholders of the Company (directly or via corporations under control or authority). Distribution of A and B shareholdings by number of shares and sector are presented in the Notes of Financial Statements on page 95.

DIVIDEND POLICY

CapMan's policy is to use at least 50 per cent of the net profi t for dividend payments. Both classes of shares give an equal right to receive dividend. The Board of Directors proposes to the Annual General Meeting that a dividend of €0.16 per share will be distributed to shareholders for the year 2007.

AUTHORISATIONS OF THE BOARD

The authorisations granted to the Board of Directors by the Annual General Meeting of CapMan Plc held on 29 March 2007 are outlined in the Report of the Board of Directors on page 84.

INSIDERS

Control of CapMan's insider issues is outlined under Corporate Governance on page 75.

NOMINEE REGISTERED SHARES

The proportion of holdings by foreign and nominee registered owners in CapMan Plc increased from 30.8 per cent to 35.9 per cent in 2007. According to information received by CapMan Plc directly from shareholders, nominee registered owners at the end of 2007 included funds managed by the following international investors: Dunedin Enterprise Investment Trust Plc, Explora Capital Management ASA, Legg Mason Inc., Partners Group, Seventh AP Fund, Royce & Associates and Troy Asset Management. In addition to the aforementioned, Barwon Investment Partners, C Brooke Investment Partners Ltd. and Hermes Investment Management managed CapMan shares on behalf of discretionary clients at year-end. The aggregate holding of these entities was slightly above 20 per cent of shares in CapMan Plc according to information received by the Company.

		Number of A shares	Number of B shares	Total number of shares	Proportion of shares, %	Number of votes	Proportion of votes, %
1	Aristo Invest Oy + Ari Tolppanen*	1 220 200	7 418 720	8 638 920	10.80%	19 620 720	14.02%
2	CapMan Partners B.V.**	3 000 000	2 000 000	5 000 000	6.25%	32 000 000	22.86%
3	Winsome Oy + Tuomo Raasio*	680 663	3 080 873	3 761 536	4.70%	9 887 503	7.06%
4	Vesasco Oy		3 275 158	3 275 158	4.10%	3 275 158	2.34%
5	Heiwes Oy + Heikki Westerlund*	258 020	2 718 260	2 976 280	3.72%	5 298 460	3.79%
6	Geldegal Oy + Olli Liitola*	796 564	1 982 520	2 779 084	3.48%	9 948 160	7.11%
7	The State Pension Fund		2 500 000	2 500 000	3.13%	2 500 000	1.79%
8	Varma Mutual Pension Insurance Company		1 660 924	1 660 924	2.08%	1 660 924	1.19%
9	Novestra Ab		1 526 891	1 526 891	1.91%	1 526 891	1.09%
	10 OP-Finland Small Firms Fund		1 241 800	1 241 800	1.55%	1 241 800	0.89%
	11 Degato International SARL (Lennart Jacobsson***)		1 129 217	1 129 217	1.41%	1 129 217	0.81%
	12 Guarneri Oy + Petri Saavalainen*	44 553	882 663	927 216	1.16%	1 328 193	0.95%
	13 Svenska litteratursällskapet i Finland r.f.		912 000	912 000	1.14%	912 000	0.65%
	14 Mateus International SARL (Jan Lundahl***)		839 218	839 218	1.05%	839 218	0.60%
	15 Åbo Akademi University Foundation		800 000	800 000	1.00%	800 000	0.57%
	16 Torpet International SARL (Lars Hagdahl***)		753 936	753 936	0.94%	753 936	0.54%
	17 Leif Jensen		699 469	699 469	0.87%	699 469	0.50%
	18 Joensuun Kauppa ja Kone Oy		554 622	554 622	0.69%	554 622	0.40%
	19 Nordea Life Assurance Finland Ltd.		550 638	550 638	0.69%	550 638	0.39%
	20 Ilmarinen Mutual Pension Insurance Company		548 500	548 500	0.69%	548 500	0.39%
	Total	6 000 000	35 075 409	41 075 409	51.36%	95 075 409	67.93%
	Nominee registered		25 269 769	25 269 769	31.60%	25 269 769	18.05%

Shareholdings of management and employees**** 6 000 000 22 495 769 28 495 769 35.63% 82 495 769 58.94%

* Employed by CapMan.

** The shareholding of CapMan Partners B.V. is equally divided among corporations under control by Senior Partners of CapMan.

*** CapMan employee who exercises controlling power in the aforementioned company but who does not own CapMan shares directly.

CapMan_1osa_fglENG.indd 17 20.2.2008 11:48:10

**** Shareholdings among the 100 largest shareholders of the Company.

CapMan's largest shareholders as at 31 December 2007

Investor services

Investor services acts as an interface between clients and investment teams with responsibility for fundraising, product development, fund administration, Group and portfolio company performance monitoring, investor relations and communications.

CUSTOMER DEMAND AND GROWTH POTENTIAL DRIVE NEW PRODUCTS

Successful fundraising is fundamental for the continuation of CapMan's business. CapMan's dedicated fundraising and development team works in close cooperation with Group management and investment teams. The demand by institutional investors and related market and growth potential play a key role in studies for new products. Developing of fund structures is also a component of product development, examples of which include partly securitised mezzanine and private equity real estate funds introduced by CapMan in 2004 and 2005.

CapMan's objective is to develop new types of fund products that meet investors' needs. Institutional investors continued to show an increasing interest towards different alternative asset products in 2007. During the past year CapMan has studied the opportunities to establish, among others, a forestry fund, infrastructure fund, public markets fund or a fund operating in Russia. The Group already expanded its operations within the alternative asset class in 2005 with the establishment of its fi rst private equity real estate fund.

CapMan's fundraising team aims also at internationalising the existing fund investor base. The team continued to actively meet new potential international investors in 2007, thus laying a solid foundation for the raising of future funds.

INVESTORS' ALLOCATIONS CONTINUE TO GROW

CapMan_1osa_fglENG.indd 18 20.2.2008 11:48:10

Private equity has consolidated its position as a part of institutional investors' investment strategy in recent years. On a global level the major institutions allocate some seven per cent of their investment assets in private equity and in the Nordic countries the corresponding fi gure is around only two per cent. Future growth in allocations by European and Nordic institutions is forecasted and more investors are expected to join the alternative asset class.

Industry growth forecasts are based on the increasing degree of investor interest shown towards the alternative asset class, as institutions seek higherperforming investments to complement their traditional share and loan portfolios. The growing interest towards private equity has been evident worldwide as strong growth in commitments into new

private equity funds. In 2006 a record €112 billion was raised into new private equity funds in Europe, of which a considerable amount was committed by pension funds and banks. Public administrations, funds of funds and insurance companies are also substantial investors in private equity funds.

The preliminary statistics for 2007 support a continuation of the buoyant growth trend in private equity. Institutions continue to make the largest allocations to buyout funds in particular and most investors have predicted that they will increase their European buyout allocations. Meanwhile, investor interest in European venture products is expected to remain limited also in future.

As for other products within the alternative asset class, real estate investments continue to grow favourably. Growth in real estate investment allocations is expected via funds making indirect real estate investments in particular.

A SUCCESSFUL FUNDRAISING YEAR

In 2007 CapMan established the new CapMan Technology 2007 fund and concluded fundraising for the CapMan Life Science IV and CapMan RE II funds

established in 2006. In spite of the challenging market situation for technology funds in general, fundraising for CapMan Technology 2007 fund was a success and the fund held a fi nal close at €142.3 million in January 2008. CapMan RE II reached an investment capacity of €600 million and CapMan Life Science IV was closed at €54 million.

Fundraising for CapMan Private Access IV fund was also started at the end of 2007. All in all capital under management increased approx. 18 per cent in 2007.

FIRST-CLASS SERVICE AS A STARTING POINT

Investor Services' Fund Administration team serves in particular CapMan's fund investors, with services including compliance monitoring of fund contracts, handling of investment-related daily monetary transactions and preparation of fund reports for the investor base. Each fund has nominated a fund professional to guarantee high quality, effi cient customer service.

CapMan's Legal Counsel and Compliance team is a part of Fund Administration and works in partnership with the Fundraising and Development team in the planning and preparation of new funds and fund agreements. In addition to legal matters related to fund administration and investment activities, the team has responsibility for CapMan Plc's legal affairs and corporate governance.

EFFECTIVE MONITORING SERVES ALL TEAMS

The Performance Monitoring team has responsibility for monitoring the fi nancial performance of portfolio companies and supports the heads of investment teams in portfolio company valuation based on EVCA guidelines. Portfolio valuation also refl ects on CapMan Plc's result through fair value changes of CapMan's own fund investments. In addition to monitoring portfolio company development, the Performance Monitoring team analyses the funds' cash fl ows and carried interest potential from the perspective of CapMan Plc's shareholders.

Investor Services in figures

CapMan_1osa_fglENG.indd 19 20.2.2008 11:48:10

Investor contacts (individuals) ca. 1,150
Investor meetings (fund investors) in 2007 ca. 240
Funds (legal entities) 47
Portfolio companies at 31 December 2007 55
Fund reports in 2007 ca. 700
Fund cash transactions in 2007 ca. 5,000
Fund Advisory Board and Investment Committee meetings 110
Shareholders at 31 December 2007 4,489
Investor meetings (shareholder meetings) in 2007 5 road shows and
	20 other meetings
Stock exchange and press releases in 2007 76

Client events in 2007 ................................................................... 8

CapMan's Investor Services team was established in autumn 2007 and is responsible for fund product development, business development, fundraising, fund administration and business communications. The team also serves stakeholders in CapMan Plc's share by taking care of the Group's fi nancial reporting and investor relations. In addition, the team monitors portfolio performance and is responsible for legal matters on behalf of the funds and Group.

Petri Saavalainen Development Director, Senior Partner

Yrjö E. K. Wichmann, Fundraising Director

Jerome Bouix Senior Partner, Head of Investor Services

Maija Nykänen Fundraising Manager

Mari Reponen Communications Director

Sanna Loikkanen, Team Assistant

CapMan_1osa_fglENG.indd 20 20.2.2008 11:48:10

Johanna Lindroos, Investment Director

Mari Maunula Fundraising and IR Analyst

Reetta Peltonen, Communications Offi cer

Investor Services

Anna Ojansivu Event Coordinator, Executive Assistant

Minna Lyijynen, Communications Offi cer

Eija Mäkinen, Fund Administrator

Tiina Oikarainen, Compliance Assistant

Eija Peltola, Fund Assistant

Heidi Ahlgren Compliance Offi cer, Legal Counsel

Annica Hillman Fund Administration Manager

Jussi Paronen Performance Monitoring Offi cer

Anneli Lautanen Compliance Administrator

Andrei Novitsky Compliance Manager, Legal Counsel

Sari Ahonen, Fund Administrator

Martti Timgren Head of Fund Administration, Senior Legal Counsel

Helena Nikkola Fund Administration Manager

CapMan_1osa_fglENG.indd 21 20.2.2008 11:48:19

Fund investors – Our clients

CapMan's clientele comprises the institutions investing in the Group's funds. The number of fund investors has grown and internationalised with new funds, and at the end of 2007 there were more than 110 investors in CapMan funds in all. A loyal fund investor base is one of CapMan's strengths.

MORE INTERNATIONAL INVESTOR BASE

CapMan's fund investor base has internationalised signifi cantly in recent years and, in addition to Nordic institutions, many European and US investors have invested in the funds. The largest investors in the funds are pension institutions, life assurance and non-life insurance companies as is typical in the private equity industry. The majority of investors have invested in several CapMan funds and a large number have invested in both equity and mezzanine funds.

With the growth in fund size also the amount of individual commitments has risen over the years. At the end of 2007, the sum of capital invested by the fi ve largest investors was approximately €720 million.

CAPMAN AS A FUND INVESTOR

Since 2002, CapMan has been a substantial investor in the private equity funds investing directly in portfolio companies. As at 31 December 2007 the fair value of CapMan's own investments totalled €44.2 million and remaining commitments totalled €56.0 million.

PRIVATE AND MANEQ FUNDS

At the end of 2007 CapMan managed fi ve Private funds for investments by private persons and small institutions. Private funds in turn are investors in the funds managed by CapMan. CapMan employees have the opportunity to invest in portfolio companies alongside the funds via Maneq funds. The capital in Private and Maneq funds totalled approx. €70.0 million and approx. €33 million respectively at yearend.

Commitments in CapMan funds established in 2004 and thereafter

Includes capital committed by investors in CapMan Mezzanine IV, CapMan Buyout VIII, CapMan Life Science IV, CapMan Technology 2007, CapMan Real Estate I and CapMan RE II funds. The funds orginal investment capacity was €1,974.4 million as at 31 December 2007.

CapMan_1osa_fglENG.indd 22 20.2.2008 11:48:34

CapMan as an Investment

CapMan funds

Capital under management by CapMan increased to €3.0 billion in 2007 and further to approx. €3.9 billion on 18 January 2008 as a result of the establishment of CapMan Hotels RE fund.

CAPITAL UNDER MANAGEMENT

CapMan managed 17 private equity funds at the end of 2007. Capital under management in these funds totalled €3,016.1 million as at 31 December 2007 (2006: €2,549.6 million), of which €1,916.1 million (€1,773.6 million) was in funds investing in portfolio companies and €1,100 million (€776 million) was in private equity real estate funds.

Of the capital in funds making direct investments in portfolio companies, €1,452.3 million (€1,309.8 million) was in equity funds and € 463.8 million (€463.8 million) was in mezzanine funds. Capital under management in these funds increased during the year as a result of fundraising for CapMan Technology 2007 and CapMan Life Science IV funds.

The total investment capacity of the real estate funds increased by €324 million in 2007 with fundraising for CapMan RE II fund and was €1,100 million (€776 million) at the end of the year. There was a rise in investment capacity of the real estate funds to €1,935.0 as a result of the establishment of CapMan Hotels RE fund in January 2008.

OPERATION MODEL OF CAPMAN FUNDS

A private equity fund has a limited and predetermined life cycle, usually 10 years. The funds make investments in selected unquoted portfolio companies or properties mainly during the fund's fi rst 3 to 4 years of operation. One fund may comprise several parallel funds, which have different investment focus or portfolios. A dedicated team is responsible for the investment activities in each of CapMan's investment areas.

CapMan_1osa_fglENG.indd 23 20.2.2008 11:48:34

CapMan has an active role in the development of investment targets. The aim is to create prerequisites for signifi cant value creation of the portfolio companies and real estate assets. The ownership period is on average 4 to 6 years, after which CapMan exits from the target for example through an initial public offering or trade sale. Following an exit, the invested capital and yield are returned to the private equity fund to be distributed to the fund's limited partners and general partner according to the agreed profi t distribution policy. The funds' limited partnership structure enables investors to receive interest, dividends and capital gains throughout the fi nancial year as the fund exits from its portfolio companies and properties.

The fund's management company or general partner receives an annual management fee for the fund's entire period of operations that is based on the amount of capital under management. In addition, the management company receives carried interest after the limited partners have regained their investment in addition to a preferential annual return, usually 7 to 8 per cent. CapMan's share of carried interest is typically 20 to 25 per cent for funds established prior to 2004 and 10 to 15 per cent for funds established in 2004 and thereafter. More information on CapMan's share of the funds' carried interest is presented on page 24.

CapMan assures the continuity of business by establishing new funds as the previous funds become fully invested.

Funds in the active investment phase as at 31 December 2007

CapMan Buyout

CapMan Buyout VIII: Established 2005, size €440 million.
CapMan Mezzanine IV: Established 2004, size €240 million.

CapMan Technology

CapMan Technology 2007: Established 2007, size €142 million.

CapMan Life Science

CapMan Life Science IV: Established 2006, size €54 million.

CapMan Real Estate

CapMan RE II: Established 2006, size €600 million.
CapMan Real Estate I: Established 2005, size €500 million.

Additionally, CapMan Equity VII, Swedestart Tech, Swedestart Life Science and Finnventure V funds have the opportunity to make add-on investments in the funds' current portfolio companies.

Funds generating carried interest as at 31 December 2007

The funds generating carried interest at the end of 2007 were Finnventure Fund II, Finnventure Fund III, Finnventure Fund V, Fenno Program, Finnmezzanine Fund II's subfund II B and CapMan Real Estate I.
The sum of carried interest income received from these funds in 2007 was €23.6 million, of which minority interest was €7.6 million.
The average time taken to transfer to carry has been 6.6 years for current funds in carry and funds that have already been closed down.
Since inception CapMan has received aggregate carried interest totalling €85.1 million from the funds currently generating carried interest and from funds that have already terminated operations, taking minority interests into consideration.

CapMan Plc Group funds as per 31 December 2007, M€

			Fund's current portfolio			Distributed cash fl ow			Share of carried interest
	Established/ generating carried interest	Fund size *	Paid-in capital **	Remaining commitment ****	at cost	fair value ****	Net cash assets *	to investors	to management company (carried interest) **	Hurdle rate, IRR % p.a.	to management company	to CapMan
	since
Funds generating carried interest
Finnventure Fund II1),	1994/1997									-	35%	100%
Finnventure Fund III1) and	1996/2000									-	25%	100%
Finnmezzanine Fund II B in total	1998/2006	58.6	57.4	1.2	3.1	2.8	0.4	179.6	44.1	-	20%	100%
Finnventure Fund V	1999/2007	169.9	161.8	8.1	59.5	54.5	4.2	218.1	1.3	-	20%	100%
Fenno Program/Skandia I2) ,	1997/2005
Fenno Program/Skandia II2) and	1997/2004
Fenno Program/Fenno Fund2) in total	1997/2005	59.0	59.0	0.0	10.8	11.7	0.2	122.9	8.6	-	20%	50–60%
CapMan Real Estate I5)	2005/2007	500.0	355.9	144.1	93.1	92.5	-56.4	183.0	28.5	-	40%	64%
		787.5	634.1	153.4	166.5	161.5	-51.6	703.6	82.5
Funds estimated to start generating carried interest in 2008–2009
Finnventure Fund IV	1998	59.5	59.5	0.0	10.3	14.2	0.8	65.7		5%	20%	100%
CapMan Equity VII A	2002	156.7	128.3	28.4	84.6	148.4	3.6	77.2		8%	20%	100%
CapMan Equity VII B	2002	56.5	51.0	5.5	33.4	70.0	1.9	35.1		8%	20%	100%
CapMan Equity Sweden	2002	67.0	54.4	12.6	36.2	63.6	2.0	33.1		8%	20%	100%
Finnmezzanine Fund III A	2000	101.4	98.1	3.3	33.0	42.9	2.1	97.6		7%	20%	100%
Finnmezzanine Fund III B	2000	20.2	19.8	0.4	8.7	11.9	0.3	17.2		7%	20%	100%
		461.3	411.1	50.2	206.2	351.0	10.7	325.9
Other funds not yet in carry
CapMan Equity VII C	2002	23.1	15.2	7.9	10.2	9.3	0.1	5.9		8%	20%	100%
CapMan Buyout VIII Fund A	2005	360.0	134.7	225.3	118.2	126.0	-0.5	-		8%	20%	70%
CapMan Buyout VIII Fund B	2005	80.0	30.0	50.0	26.2	28.0	-0.2	-		8%	20%	70%
CapMan Technology 20071)	2007	140.3	23.4	116.9	19.7	19.7	1.3	-		8%	20%	50%
CapMan Life Science IV Fund	2006	54.1	17.0	37.1	14.0	11.9	-0.2	-		8%	20%	50%
Finnmezzanine Fund III C	2000	13.9	13.9	0.0	4.0	4.8	2.0	11.8		7%	20%	100%
CapMan Mezzanine IV4)	2004	240.0	108.0	132.0	85.4	95.5	4.2	21.0		7%	20%	75%
CapMan RE II6)	2006	600.0	73.6	526.4	67.0	68.0	-44.4	-		10%	20%	60%
		1,511.4	415.8	1,095.6	344.7	363.2	-37.7	38.7
Funds with limited carried interest potential to CapMan
Nordic Private Equity Partners II3)	1995
Finnventure Fund V ET	1999
Swedestart Life Science3)	2000
Swedestart Tech1),3)	2000
Finnmezzanine Fund II A, C and D1) in total	1998
		255.9	231.7	24.2	83.2	77.0	5.1	119.8
Funds in total		3,016.1	1,692.7	1,323.4	800.6	952.7	-73.5	1,188.0	82.5

CapMan_1osa_fglENG.indd 24 20.2.2008 11:48:34

Footnotes to the table

Capital under management in equity, mezzanine and real estate funds, M€

Substantial capital remaining for new investments, M€

CapMan_1osa_fglENG.indd 25 20.2.2008 11:48:34

* Total capital committed by investors. In CapMan's statistics the terms 'capital under management' and 'fund size' refer to the gross capital commitment in the fund.
** Total capital paid into the fund by investors.
*** Remaining commitment into the fund by investors. **** The funds' investments in portfolio companies are valued to fair value in accordance with the guidelines of the European Private Equity & Venture Capital Association (EVCA) and investments in real estate assets are valued in accordance with the value appraisements of external experts. The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's length transaction. Due to the nature of private equity investment activities, the funds' portfolios contain investment targets with fair value greater than acquisition cost as well as investment targets with fair value less than acquisition cost. Portfolio companies are valued at acquisition cost from the time of investment for a 12-month period, after which they are valued at fair value. According to the EVCA's conservative policies, technology and life science targets are typically valued at acquisition cost or less up to exit.
***** When calculating the investors' share, the fund's net cash assets have to be taken into account in addition to the portfolio at fair value. Net cash assets are typically negative in the real estate funds, due to the use of senior debt.
****** When the return of a fund has exceeded a required cumulative return target, the fund begins to generate carried interest and the management company is entitled to a share of the cash fl ow from the funds. Cash fl ow includes both the distribution of profi ts and distribution of capital.
1) The fund is comprised of two or more legal entities (parallel funds are presented separately only if their investment focuses or portfolios differ signifi cantly).
2) The Fenno, Skandia I and Skandia II funds together comprise the Fenno Program, which is managed jointly with Fenno Management Oy.
3) Currency items are valued at the average exchange rates quoted at 31 December 2007.
4) CapMan Mezzanine IV: The paid-in commitment includes a €96 million bond issued by Leverator Plc. The fund's liquid assets include a loan facility, with which investments are fi nanced up to the next bond issue. Distributed cash fl ow includes payments to both bond subscribers and equity investors.
5) CapMan Real Estate I: The paid-in commitment includes a €100 million bond issued by Real Estate Leverator Plc and a €206.1 million senior loan. Distributed cash fl ow includes repayment of the bonds and cash fl ow to the fund's equity investors. The combined investors' and management company's share of the fund's assets is calculated by deducting net cash assets from the fair value.
6) CapMan Real Estate II: 25% of the fund's size or €150 million is shareholders' equity and the 75% remainder is debt. The investors' share of the fund's assets is calculated by deducting net cash assets from the fair value.
Equity, mezzanine and real estate funds have different return potential.
The funds vary in terms of management fees and carried interest percentages as well as value creation potential of the investment targets.
The greatest potential is related to equity funds.
Remaining investment capacity represents almost half of total capital under management, resulting in very good prerequisites for investment operations.
The share of capital that has already been exited represents approximately one-third of capital under management.

Funds' portfolios at acquisition cost, €800.6 million as at 31 December 2007

The funds' portfolios at acquisition cost are divided among four investment areas.
Diversifi cation evens out the risks associated with investments.
The portfolio includes companies and properties at different stages of development.

Equity funds

Mezzanine funds
Real Estate funds

* Includes realised and estimated costs for those funds in which part of the total fund size is reserved for expenses.

Returns to investors from funds

Funds that have terminated operations

Operational equity funds
--------------------------	--	--

Funds that have been established between 1990–2005 (mature funds that have operated for more than two years).

Fund	Operations started *	Operations ended	Fund size, M€	Net return to investors (IRR% p.a.) **	Return multiple (net) to investors ***
Finnventure Fund I	1990	2005	11.1	15.4%	3.0
Nordic Private Equity Partners I	1991	2004	13.5	10.3%	2.1
Alliance ScanEast Fund	1994	2006	21.5	9.0%	1.8
Finnmezzanine Fund I	1995	2006	31.4	17.5%	1.7
Swedestart II	1997	2006	26.2	168.5%	6.5
Fenno Program / Other	2001	2004	6.0	73.7%	6.4

			Net return to	Return multiple (net)
	Operations		investors by	to investors by
	started	Fund size,	31 Dec 2007	31 Dec 2007
Fund	*	M€	(IRR %p.a.)	***
Funds over 5 years old:
Finnventure Fund II	1994	11.9	55.8%	3.5
Nordic Private Equity Partners II	1995	20.6	-	0.9
Finnventure Fund III	1996	29.7	63.4%	4.0
Fenno Program / Fenno Fund	1997	42.5	15.7%	2.1
Fenno Program / Skandia I	1997	8.4	20.1%	1.7
Finnventure Fund IV	1998	59.5	5.4%	1.3
Finnventure Fund V	1999	169.9	11.3%	1.6
Finnventure Fund V ET	2000	34.0	-	0.5
Swedestart Tech	2001	81.3	-	0.9
Swedestart Life Science	2001	48.7	-	0.7
Fenno Program / Skandia II	2001	8.1	44.7%	3.3
Funds 2–5 years old:
CapMan Equity VII A	2002	156.7	18.5%	1.7
CapMan Equity VII B	2002	56.5	21.2%	1.9
CapMan Equity VII C	2002	23.1	0.3%	1.0
CapMan Equity VII KB	2002	67.0	17.9%	1.7
CapMan Buyout VIII A	2005	360.0	-	0.9
CapMan Buyout VIII B	2005	80.0	-	0.9
CapMan Real Estate I****	2005	200.0	27.6%	1.4

* The year when operations were started differs with the fund's establishment year for the following funds: Finnventure Fund V ET (established in 1999), Swedestart Tech and Swedestart Life Science (established in 2000) and Fenno Program/Skandia II and Other (established in 1997).

** Net return to investors = internal rate of return (IRR) p.a. to investors; cumulative cash fl ow between investors and fund + portfolio.

*** Return multiple (net) to investors = (cash fl ow to investors + value of the current portfolio)/paid-in capital 31 December 2007. The investors' shares of the funds' portfolios include investments and possible liquid assets. Portfolios are valued according to EVCA guidelines.

**** In exception to other tables, the senior loan has not been taken into account in the fund's size, which totals €500 million. The fund size and paid-in commitment includes a €100 million bond issued by Real Estate Leverator Plc. The investors' share includes the repayment of the bonds and cash fl ow to the General Partner.

CapMan_1osa_fglENG.indd 26 20.2.2008 11:48:34

The table is presented in a more comprehensive format on CapMan's website at www.capman.com.

Majority of CapMan's equity funds belong to the top quartile of European private equity funds measured by returns to investors. The returns of currently operational equity funds are affected, in addition to the development of the fund's portfolio, by the fund vintage and focus which infl uences the valuation principles.

FUNDS THAT STARTED OPERATIONS IN 1990–1997

Of the older funds managed by CapMan, Finnventure and Finnmezzanine funds have typically invested in both buyout and technology targets, Nordic Private Equity Partners funds have had pure buyout focus and Swedestart II fund has had pure venture focus.

of Finnmezzanine Fund I via co-investments.

are still active and they await exit from fi ve investee companies in all. The associated return potential of these funds is quite small due to the low number of remaining investments, and forthcoming exits will have minor impact on the funds' return fi gures.

In exception to the other funds managed by CapMan, the Alliance ScanEast Fund established in 1994 has had investment focus on Eastern Europe. The fund has achieved good returns when compared with other Eastern European funds of the same vintage.

FUNDS THAT STARTED OPERATIONS IN 1998–2001

Of the funds that started operations between 1998 and 2001, the Fenno Program's Other subfund has already terminated operations. 80 per cent of the investments made by Finnventure IV and V funds have

been in buyout transactions and 20 per cent in technology targets. The funds' buyout investments have been made at reasonable prices and for the most part their value has developed in line with expectations. The acquisition value of the funds' technology investments was raised by the technology boom in the late 1990s and early 2000. Technology investments of the time were made at high valuation levels, which is particularly evident in the IRRs and money multiples of technology fund Finnventure V ET.

The Swedestart Tech and Swedestart Life Science funds that started operations in 2001 have focus on technology or life science investments respectively. The portfolio companies have typically been valued to at cost or below that in accordance with EVCA guidelines and as is typical for venture funds. As a result of this and early stage operating costs and management fees, the funds' IRRs and money multiples are at quite a low level. However the funds' portfolios are in good condition.

The Fenno Program's Skandia II subfund started operations in 2001 and has had investment focus on buyout transactions. As with other Fenno Program funds, the exit from Eltel Networks in 2004 is visible in the fund's IRR measures. There are two remaining investee companies in Skandia II's portfolio.

CAPMAN EQUITY VII AND CAPMAN BUYOUT VIII FUNDS

CapMan_1osa_fglENG.indd 27 20.2.2008 11:48:34

The CapMan Equity VII and CapMan Buyout VIII funds established in 2002 and 2005 respectively have made investments at moderate valuation levels. The portfolios of both funds developed favourably in 2007, which was refl ected also in CapMan's result via the Company's own fund investments. CapMan Buyout VIII fund has pure buyout focus and the newness of the fund and its portfolio is still evident

in its return fi gures whereas CapMan Equity VII fund has already executed several realisations, which can be seen in the IRR measures of its subfunds A, B and Sweden in particular. Of CapMan Equity VII's subfunds, B has pure buyout focus, C has pure technology focus, and A and Sweden invest in buyout and technology targets at a ratio of 65/35 per cent.

FUNDS OUTSIDE THE COMPARATIVE EXAMINATION

The CapMan Life Science IV fund (established in 2006) and CapMan Technology 2007 fund (established in 2007) make new life science and technology investments. Due to their short operational histories these funds are not comparable with more mature funds, as expenses accrued early in the lifecycle impact on net returns from new funds. The funds will be included in the comparative examination once they have operated for more than two years.

In addition the Finnmezzanine II, Finnmezzanine III and CapMan Mezzanine IV funds established in 1998, 2000 and 2004 are excluded from the examination, because the nature of their investment activities is not directly comparable with the equity funds. CapMan RE II real estate fund established in 2006 utilise debt gearing and is also external to the examination. A closer examination of the returns from mezzanine and real estate funds will be made once they have terminated operations.

CapMan has succeeded well in utilising prevailing market conditions for the funds that started operations between 1990 and 1997. As a pioneer in the private equity investment industry, CapMan made many investments from Finnventure I, II and III funds in the mid 1990s in which the growth potential was realised by the end of the decade. At the same time the buoyant market for IPOs was also exploited by Swedestart II fund's exits. The success of Finnventure II and III funds was refl ected also on the performance

Five of the funds established in years 1990–1997

Investment activities

The funds managed by CapMan invest principally in unquoted Nordic companies or real estate.

The investment activities of the funds investing directly in portfolio companies target the Nordic countries in three investment areas, which are middle market buyouts (CapMan Buyout), expansion and later stage technology investments (CapMan Technology) and investments in medical technology (CapMan Life Science). The investment focus of real estate funds is on real estate targets in Finland and Sweden.

As at the end of 2007 the funds making investments in portfolio companies had invested in over 160 companies and exited from over 100 companies. CapMan Real Estate had invested in 38 real estate assets and exited from 22 assets. Further information on CapMan's current and previous investment targets as well as the strategies and investment focus of the investment teams is presented on pages 40–72 and on CapMan's website at www.capman.com.

CapMan Buyout	CapMan Technology	CapMan Life Science	CapMan Real Estate
• Almost all industries • Equity investments approximately €10–60 million per company • Mezzanine fi nancing is used alongside equity fi nance	• Expansion and later stage technology companies • Equity investments approximately €3–15 million per company	• Medical technology companies and healthcare service companies • Equity investments approximately €2–7 million per company	• Real estate assets in Finland • Investments typically €5–50 million per asset
New investments in 2007:	New investments in 2007:	New investments in 2007:	New investments in 2007:
• Curato AS • Komas Oy • Nacka Närsjukhus Proxima AB • Skandia Autologistics Oy • Walki Group Oy	• Global Intelligence Alliance Group Oy • IT2 Treasury Solutions • KMW Energi AB • Mawell Oy • Movial Applications Oy • Mirasys Ltd	• Curato AS • Mawell Oy • Nacka Närsjukhus Proxima AB	• 16 investments in commercial properties and real estate development targets

CapMan_1osa_fglENG.indd 28 20.2.2008 11:48:34

* Includes regressive fi gures for investments and exits by NPEP and Swedestart funds for years prior to acquisitions. Exits include partial exits.

The fi gures include transactions fi nalised as at 31 December 2007. As at 31 December 2007 the real estate funds had in addition committed a

Foreign currency items are translated for the entire period at the exchange rate on the last day of trading in 2007.

total of €302.1 million to fi nance real estate acquisitions and projcets.

**Investments and exits at cost 1997–2007, M€* Funds' cumulative portfolio at cost 1997–2007, M€**

CapMan Technology CapMan Life Science CapMan Real Estate

CapMan_1osa_fglENG.indd 29 20.2.2008 11:48:35

Access Capital Partners

CapMan Plc's associated company Access Capital Partners is a leading independent European manager and advisor of funds of funds. The funds managed by Access invest predominantly in Western European buyout and technology funds. Access continued its growth in 2007 and the company managed assets totalling €2.3 billion at year-end.

SUBSTANTIAL GROWTH IN CAPITAL UNDER MANAGEMENT

Total assets under management by Access grew 42 per cent in 2007, especially with the establishment of a fourth generation buyout fund and with a signifi cant private equity mandate that was received from the French government. Commitments totalling €240 million had been raised into Access Capital Fund IV Growth Buy-out Europe (ACF IV) by year-end and its fundraising continues in 2008. All together Access managed €1,164.5 million in funds of funds and €1,162 million private equity mandates at the end of the year.

SPREAD OF INVESTMENTS ACROSS EUROPEAN GROWTH SECTORS

Access offers its investors the opportunity to diversify their investment portfolio across Europe in various high growth sectors via small to mid-market buyout funds, sector focused funds and technology funds. Access is also active in secondary investments in both markets.

The investors in Access funds are pension funds, insurance companies and other institutional investors as well as family businesses and private individuals.

HIGHLY SELECTIVE INVESTMENT PORTFOLIO

Access Capital Partners constitutes carefully balanced portfolios comprising high-performance European private equity funds of various different managers. The funds target companies at diverse stages of the value creation stream: high-potential technology ventures, late stage growth companies and buyout transactions.

When making investments, Access is looking for investment teams that have been working together successfully for several years and have a proven track record for superior returns. They must also demonstrate a strong pricing discipline together with a high level of value added to investee companies. The buyout funds vary in size between €100 million and €1 billion.

The technology funds managed by Access invest in funds with portfolio companies that operate in leading European technology clusters such as the UK, Germany, the Nordic countries and France. To achieve an optimal risk-return ratio, a substantial proportion of the Access portfolio is constituted of funds including later stage technology companies and buyouts in their investment focus.

AN EXPERIENCED TEAM WITH LONG TRACK RECORD

The Access team comprises 28 multinational professionals based in Paris, Brussels and Munich. The team is headed by the three managing partners Dominique Peninon, Agnès Nahum and Philippe Poggioli, who have a combined experience of 58 years investing both in funds and directly within the European private equity industry.

CapMan has a 35 per cent stake in the management company Access Capital Partners and the balance is held by the managing partners.

For more information about Access, please visit www.access-capital-partners.com.

Capital under management 1999–2007, M€

Capital under management as at 31 December 2007, M€

		CapMan's share of
Established	Fund size	carried interest, %
1999	250.3	47.5
2001	153.4	45
2001	123.5	45
2005	307.4	25
2005	88.9	25
2007	241.0	25
2003	1,162.0	25
	2,326.5

* The fund comprises two or more legal entities.

CapMan_1osa_fglENG.indd 30 20.2.2008 11:48:35

Corporate social responsibility

Private equity has a prominent role in society both as an asset manager for fund investors and a facilitator of portfolio company development. CapMan aims to be a responsible and ethical corporate citizen in all of its stakeholder relations.

CAPMAN AS AN ASSET MANAGER

CapMan has an important role in society as the manager of capital invested by institutional investors in its funds. A considerable amount of the capital is invested by Nordic pension funds, whose commitments represent about 47 per cent of the total capital in CapMan funds. The success of investment operations has a direct effect on the earnings of fund investors and their stakeholders, such as pensioners.

CapMan reports on the development of its funds' portfolio in compliance with EVCA guidelines and the applicable laws, fi nancial reporting standards and other regulations. Investment principles are agreed by the funds and fund investors together. In making investment decisions, CapMan requires that investee companies comply with prevailing laws and guidelines and act responsibly on environmental, ethical and social issues. Value creation in the portfolio companies is also subject to the same principles. CapMan applies highly careful investment criteria, and an investment decision is made in less than two per cent of the several hundreds of new potential investments analysed by CapMan's investment teams each year. Investment-related risks and risk management are outlined on page 75.

STEADY GROWTH OF PRIVATE EQUITY BACKED COMPANIES

The societal impact of private equity is typically described in terms of change in turnover and number of staff in portfolio companies. The companies themselves generally appreciate the sparring and strategic skills contributed by the private equity investor.

Two studies on the economic impact of private equity published in 2007 have shown that economic growth and employment are created more rapidly by the private equity backed companies than by other

CapMan_1osa_fglENG.indd 31 20.2.2008 11:48:35

private companies. The studies, conducted by BVCA in the UK for 2006 and by SVCA in Sweden for years 2000–2005, compared the annual growth in turnover and number of personnel of private equity backed companies with a control groups, which were the FTSE 100 companies in the UK and the companies quoted on the Stockholm Stock Exchange in Sweden. The results showed that for the period under study the turnover of portfolio companies grew by 9 per cent in the UK and by 23 per cent in Sweden, compared to 7 and 9 per cent respectively for the control groups. The number of personnel grew by 9 per cent in UK portfolio companies and by 10 per cent in Swedish portfolio companies, compared to 1 and 0 per cent growth in the control groups1) 2).

The FVCA conducted a study on the economic impact of private equity in Finland for years 2002–2004. The results showed that the average growth in turnover achieved by portfolio companies over the three-year period was more than threefold in the buyout sector, twofold in the venture sector and almost fi vefold in the ser vice sector3).

DEVELOPMENT OF CAPMAN'S PORTFOLIO COMPANIES

In 2007 CapMan's portfolio companies employed over 20,000 people, and their estimated aggregate turnover is some €3.4 billion. CapMan holds a total investment capacity of some €690 million, which enables the development of companies and transfer of capital to support portfolio company growth, competitiveness and innovations*. Adding together the investments and exits made annually by CapMan, our decisions impact the future of a group of Nordic companies with a net worth of some €1.1 billion**.

During 2007 CapMan participated in a study of private equity impacts in Finland headed by Tekes, the Finnish Funding Agency for Technology and Innovation. An impact study on the development of CapMan's portfolio companies for investments made in years 1990–2003 was completed as a part of the study. The results showed that CapMan's investments impacted positively on both the turnover and number of personnel of its portfolio companies in comparison to a control group4).

COMMUNITY AND INDUSTRY INVOLVEMENT

CapMan's wide range of fund products enables investments to be diversifi ed across different sectors. For example investments in healthcare technology, private healthcare service providers and cleantech companies in the energy sector strengthen the national Nordic economies. At the same time private equity investments support the emergence of new innovations and facilitate the search for new alternative solutions to challenges such as healthcare reform, the service society, globalisation or environmental change.

CapMan employees are active in FVCA and EVCA promoting the development of the private equity industry and international cooperation. CapMan also has a partnership with the Family Business Association of Finland. Additionally, CapMan has supported education of the private equity industry and was one of the donors for a fi ve-year private equity professorship to the Department of Industrial Engineering and Management at Helsinki University of Technology.

3) FVCA: Vaikuttavuus- ja merkittävyystutkimus 2007
4) Helsinki University of Technology, Department of Industrial Engineering and Management Institute of Strategy and International Business, Tomi Lähdemäki: Assessing the Economic and Societal Impact of Private Equity Investments
* Based on the remaining investment capacity of funds managed by CapMan Plc as at 31 December 2007.
** The value of transactions in which CapMan funds participated as buyers or sellers in 2007.

¹⁾ BVCA: The Economic Impact of Private Equity in the UK 2006 2) SVCA: Portföljbolagsstudie 2006 Utvecklingen för riskkapitalbolagens portföljbolag 2000–2005

Personnel

CapMan has a personnel of 110 people in Helsinki, Stockholm, Copenhagen and Oslo. The success of CapMan's business depends on the Group's ability to recruit, develop, motivate and retain the top private equity professionals in all of its teams.

PLENTY OF NEW RECRUITMENTS

At the end of 2007 CapMan had 110 (2006: 98) employees, of whom 109 persons were in permanent positions. In addition there were fi ve Senior Advisors acting as consultants for CapMan. The average age of the staff is 39.7 years.

During the year a total of 26 (23) new employees commenced work for CapMan. The staff turnover represents 28 per cent of the number of employees at the end of 2006. Some of the new employees were recruited to replace the 12 (12) persons who left the Company, but the growth in personnel was especially due to a growth in business volume and related resource needs.

As a course of the recruitment process we have noticed that CapMan has a good and steady reputation as an employer, both amongst seasoned professionals and new talent. CapMan's reputation as an employer is especially strong in Finland and to an increasing degree also in other Nordic countries. The qualities that distinguish CapMan from other employers include, among others, the Group's well-rounded business activities, business environment and corporate values.

COMPLEMENTARY INVESTMENT TEAMS AND THREE SERVICE TEAMS

CapMan's personnel is divided into four complementary investment teams – CapMan Buyout, CapMan Technology, CapMan Life Science and CapMan Real Estate – as well as three Group level teams serving internal and external stakeholders – Investor Services, Internal Services and Human Resources. Of CapMan's staff, 67 people work in investment teams and 43 people in service teams. The current ratio of investment staff to service

staff meets the needs of CapMan's operations and enables fi rst-rate fundraising, reporting and portfolio performance monitoring as well as internal processes and expansion into new business lines.

DEDICATED PEOPLE WITH CONFIDENCE IN SUCCESS

CapMan strives to ensure employee satisfaction and longstanding commitment. The Group conducts a comprehensive employee survey each year to gauge its performance as an employer. The response rate to the CapPeople survey in 2007 was high, at 85 per cent. The themes of the survey included leadership and management, job content, work environment, colleagues, CapMan as a company, CapMan as an employer and CapMan's values.

The results of the survey showed that CapMan employees are strongly engaged in the Group and

CapMan_1osa_fglENG.indd 32 20.2.2008 11:48:35

believe in CapMan's success also in the future. 80 per cent of respondents stated that they are guided in their daily decision-making by CapMan's values. The data was also analysed on a team level with respect to the confi dentiality of individual responses. Clear themes were evident in the results at the Group level, but the unique strengths and developmental areas of each team were also apparent. CapPeople 2007 confi rmed that CapMan operates as one fi rm with a strong Nordic corporate culture, as there were no cross-border differences in the results.

PERSONNEL TRAINING AND INCENTIVE SCHEMES

To encourage employees' involvement and reward their commitment in the Group, CapMan has a performance related bonus scheme that is incomebased and covers the entire personnel. The individual

Educational background*

* There are nine CapMan employees who have academic qualifi cations in two fi elds.

work performance of all CapMan employees is evaluated at developmental discussions held twice yearly. In addition to feedback, new objectives as well as individual developmental and training needs are agreed. CapMan's total expenditure on personnel training and Group development days in 2007 was €300,000 (€340,000), or an average of €2,752 per employee.

CapMan had one stock option scheme in force at the end of 2007. The stock option program covers CapMan's personnel and members of the Board. Detailed information about the stock option program and employee shareholdings can be found on page 16.

In line with market practice in the private equity industry, CapMan's investment professionals are eligible to receive a share of the carried interest generated by CapMan funds through carried interest schemes. Personnel may also participate in portfolio company co-investment plans alongside CapMan funds, via the Maneq funds.

Satu Kannelvirta, Financial Controller

Niina Jokinen, Offi ce Assistant

Hilkka-Maija Katajisto, HR Director

CapMan_1osa_fglENG.indd 33 20.2.2008 11:48:36

Paula Lehtilä, Project Manager

Maria Ljungeld, HR Coordinator

Pia Kankaanpää Executive Assistant CapMan's Internal Services team was established in autumn 2007 and is responsible for the Group's fi nances and administration, IT and offi ce functions. A separate Human Resources team is responsible for the Group's HR management and development. Some members of the Investor Services team and two members of the Human Resources team are presented on the previous page.

Anne Christina Kyhn, Offi ce Assistant Teemu Telsavaara, Offi ce Coordinator

Internal Services

Stina Roitto, Accountant

Tuija Morottaja, Accountant Kaisa Arovaara, CFO, Head of Internal Services

Tuija Souri, Financial Manager

Mika Moisander Business Intelligence Coordinator

Anne Immonen Accounting Assistant

Tommi Oksanen IT Support Advisor

Antti Kiviluoto IT Manager

Kira

Kira Mannerblom, Accountant

Eija Ovaskainen Offi ce Administrator

CapMan_1osa_fglENG.indd 34 20.2.2008 11:48:40

We are an active industrial player with strong fi nancial know-how. We create lasting value through growth, change and professional governance.

CapMan_2osa_fglENG.indd 35 20.2.2008 11:50:23

CAPMAN AS AN INVESTMENT 1

INVESTMENT ACTIVITIES

Value creation in CapMan's investments 36 CapMan Buyout 40 CapMan Technology 50 CapMan Life Science 58 CapMan Real Estate 64

Investment Activities

Value creation in CapMan's investments

The principal aim of CapMan's investment activities is value creation in the investment targets. The objective is to create permanent and long-term added value through growth, change and professional governance. Development has been strong as far as both current portfolio companies and exited investments are concerned.

ALL INVESTMENT TEAMS HAVE EXTENSIVE MARKET COVERAGE

CapMan's teams investing in portfolio companies go through hundreds of potential new investments each year. In connection with their investment procedures they review almost all Nordic investment opportunities that fi t CapMan funds' investment focus.

Following preliminary appraisal of all potential new investments that came to the teams' knowledge in 2007, in-depth analysis was undertaken for 39 opportunities or 10 per cent of all potential investments. In the end CapMan completed 11 new portfolio company investments in all.

In 2007 CapMan's Buyout team performed 24 detailed analyses and made an investment decision in fi ve companies, and the Technology team performed 12 detailed analyses and made an investment decision in six companies. Of the investments completed during the year, two were syndicated by CapMan Buyout and CapMan Life Science and one by CapMan Technology and CapMan Life Science. CapMan's Real Estate team analysed over 110 potential new investments and made an investment decision in 16 targets.

VALUE CREATION IS FOUNDED ON ACTIVE OWNERSHIP

CapMan is an active owner in its portfolio companies. The objective is to create lasting added value through growth, change and professional governance. CapMan's investment professionals work actively with the portfolio companies' strategy development, international expansion and mergers and acquisitions. The most important tools in development work are

Board representation by CapMan investment professionals and partnership with the management teams.

During the investment CapMan's investment professionals bring valuable perspectives and recommendations on operational, strategic and fi nancial decision-making processes to the portfolio companies. They have deep and broad expertise from business management, industry or fi nance.

CapMan's investment teams have an extensive contact network comprising representatives, entrepreneurs and other business partners across different industry sectors, which forms an important talent pool for the portfolio companies' operative management and Boards.

CapMan is the only private equity investor with investment teams and offi ces in Helsinki, Stockholm, Copenhagen and Oslo. CapMan's strong presence in local markets and local contact network is a competitive advantage that enables almost all new opportunities to come to the teams' knowledge, and facilitates the evaluation of value creation potential of promising investments on a Nordic level already prior to the investment decision.

CapMan's value creation plan for real estate assets is based on a well-structured portfolio and in particular on the active development of individual targets by means of real estate management, construction contracting, new service concepts and active leasing operations.

CapMan_2osa_fglENG.indd 36 20.2.2008 11:50:23

CapMan's role in portfolio companies

Ownership

Active ownership through professional Board work.
Respects the management's operational leadership.
Always represented on the Board of Directors (typically appoints the Board and Chairman, who is often a CapMan investment professional).
Adjusts the Board composition in line with the development stage.
Holds the majority ownership or a controlling minority interest.

Development

Focus on long-term development and carefully defi ned value creation drivers.
Develops the company's strategic goals (e.g. buy-and-build strategy) via Board work.
Actively involved in recruitment, internationalisation, consolidation, M&A and exit processes.

Networks

Assists in arranging external fi nancing.
- Designs and implements management incentive schemes.
- Opens up a wide international business network to the portfolio company.
- Provides a well-known partner and brand to enhance value creation in portfolio companies.

VALUE CREATION DRIVERS AT DIFFERENT STAGES OF THE INVESTMENT LIFECYCLE

Investment stage Development stage Exit stage

• Wide, quality deal fl ow

market savvy investment teams
effi cient and proactive analysis of industries and investment opportunities
professional code of conduct
ability to source attractive investment opportunities also outside of auction processes
• Reasonable valuation level at time of investment

• Investment structure

know-how in investment and ownership structures
established processes

Portfolio companies

Growth in turnover and improved profi tability
Corporate mergers and acquisitions
Improvement of operational effi ciency
Strategy work, strategic position
Restructuring the management and organisation
Internationalisation

Portfolio companies and properties

Tools for strategic planning, budgeting, reporting, corporate governance and real estate development
Extensive resources and contact networks
Sector expertise in industry, fi nance, real estate investment and management and private equity investment

Properties

• Commercial and functional planning • Construction contracting and project management services • Leasing operations

The aim is to develop and increase the value of investment

Evaluation Continuous assessment of investment targets

Defi ning targets Determination of value creation drivers and creation of strategy

Average experience of investment professionals

CapMan_2osa_fglENG.indd 37 20.2.2008 11:50:24

Value creation drivers in buyout exits*

*) Indexed, based on 37 exits from equity funds.

Timing of exit
Exit structure
A buyer with aspirations to develop the company further
Active role in negotiations
Comprehensive advisor network

DEVELOPMENT OF CAPMAN'S PORTFOLIO IN 2007

CAPMAN BUYOUT	CAPMAN TECHNOLOGY	CAPMAN LIFE SCIENCE	CAPMAN REAL ESTATE
23	24	13	16
648.1	104.5	39.6	160.5
3 166.9	426.5	34.4	-
18%	37%	34%	-
ca. 18,500	ca. 4,000	ca. 300	-
14%	38%	22%	-
33	-	-	-
-	-	-	126,142 m2
-	-	-	148
-	-	-	6.8%

* The fi gures for portfolio company turnover and personnel in 2007 are based on forecasts. Portfolio company growth in turnover and growth in personnel in 2007 are based on 2006 fi gures and forecasts for 2007. The fi gures include the companies that have been in the portfolio for the period 1 January – 31 December 2007.

INVESTMENT AREAS' TRACK RECORD

		CAPMAN BUYOUT		CAPMAN TECHNOLOGY		CAPMAN LIFE SCIENCE		CAPMAN REAL ESTATE
Number of exits (equity funds)		38		37		8		22
IRR % p.a.		40.8%		127.5%		129.9%		26.1%**
Average holding period		5.4 years		4.2 years		4.2 years		1.7 years
Money-back multiple***
		400		400		400		200
		300 331		300 334		300		150
		200		200		200 253		100 134
		100		100		100	100	50
	100	0	100	0	100	0		0
	Time of initial investment	Time of exit	Time of initial investment	Time of exit	Time of initial investment	Time of exit	Time of initial investment	Time of exit

CapMan_2osa_fglENG.indd 38 20.2.2008 11:50:26

** The fi gures are calculated for the fund's equity share.

*** Indexed (time of investment = 100). Exits comprise dividends, interest earnings and sales revenues.

BOARD WORK IN PORTFOLIO COMPANIES

The cornerstone of CapMan's portfolio company development is work on the companies' Boards of Directors.

The Composition of the Board and focus of Board work in portfolio companies are dependent on a company's development stage and needs. In buyout targets and later stage technology companies, CapMan's investment professionals focus in particular on developing the company's strategy to grow from mid-sized or local companies into bigger and more international players through organic growth and mergers and acquisitions. When the initial investment is executed CapMan prepares a 100-day plan for the company, which contains a framework of actions and decisions for the implementation of the agreed strategy. At this stage both the company management and Board of Directors are often strengthened with new executives and industry experts.

The emphasis of Board work in earlier stage technology and life science companies is closer to operative management, although the responsibility for operational issues remains with the company management. In life science companies this typically means investments in wider commercialisation of the company's products or services.

When required the case professionals have infl uence on the company's product range, product placement, management, marketing, sales, distribution and intellectual property rights. Especially in life science investments, product testing and market regulations have a substantial impact on the company's success.

CapMan places emphasis on the composition, way of working and compensation of the Board; good cooperation with the company's operative management; and active monitoring of the company's fi nancial situation, risk management and business environment as well as response to changes. We adopt a long-term approach to the development of Board work, for example through surveys of Board work, thus enabling experience and best practice to be shared between portfolio companies.

In spite of CapMan's resources and expertise, the most critical driver behind value creation is the ability of the active management to outperform its competitors on the markets.

NORDIC ADVISOR NETWORK

CapMan has a Nordic Advisor Network to complement the expertise of its investment professionals. Advisors are business leaders with long careers, and they bring new connections and in-depth sector knowledge to CapMan's investment operations.

Senior Advisors work full-time for CapMan and its portfolio companies from CapMan's offi ces. They have played a key role in CapMan's investments in Flander, IT2 Treasury Solutions, Komas, Maintpartner, Mawell and Moventas among others. Industrial Advisors work part-time for CapMan, for example through their representation on the Boards of portfolio companies.

The main responsibilities of advisors are to facilitate origination of promising investments across different industries and countries; to assist in the analysis of changing, growing or consolidating industries; and to support the value creation of portfolio companies, for example through professional Board work. In addition they help in the identifi cation of suitable acquisitions, business partners and market opportunities for the portfolio companies, as well as suitable owners in the exit stage.

CapMan adopted the advisor concept in the late 1990s when the fi rst Senior Advisors were appointed. The concept was expanded in 2004 and Industrial Advisors were invited to the network. At year-end CapMan's Nordic Advisor Network comprised six Senior Advisors and 15 Industrial Advisors in all.

Peter Augustsson, Industrial Advisor
Joachim Berner, Industrial Advisor
Conny Karlsson, Industrial Advisor
Björn Norrbom, Industrial Advisor
Jon Risfelt, Industrial Advisor

CapMan_2osa_fglENG.indd 39 20.2.2008 11:50:26

Erik Prydz Mathisen, Industrial Advisor
Stein Revelsby, Industrial Advisor
Terje Thon, Industrial Advisor
Rune Thoralfsson, Industrial Advisor

Jesper Jarlbæk, Industrial Advisor
Peter Langkjær, Senior Advisor

CapMan Buyout

In 2007 CapMan Buyout was again one of the most active players in the Nordic market, as evidenced by fi ve new investments. Cooperation with the management of our portfolio companies worked extremely well, and the companies developed favourably.

INVESTMENTS IN CHANGING INDUSTRIES

Our team's investment focus is on mid-sized Nordic companies in various industries. The portfolio companies usually have net sales in the range of €50 million to €500 million and clear growth potential both organically and via mergers and acquisitions. The companies typically operate in industries that are consolidating or otherwise changing.

We actively analyse different industries to originate good investment targets. For example the change pressures in healthcare and forestry sectors may offer us interesting opportunities. The privatisation of public services, outsourcing of industrial services and successions in family businesses are also evident as a growth in investment opportunities.

A WELL-BALANCED PORTFOLIO

CapMan_2osa_fglENG.indd 40 20.2.2008 11:50:26

In 2007 CapMan's Buyout portfolio grew with fi ve new investments, of which the first were in supplier of mechanical subassembly systems Komas Oy and vehicle logistics company Skandia Autologistics Oy. We also executed our fi rst investment in the paper industry in spring when the funds acquired Walki Group, a producer of industrial wrappings and composite materials, from UPM-Kymmene Corporation.

Additionally we made two interesting investments in syndicate with CapMan Life Science in the Nordic healthcare sector. Swedish Nacka Närsjukhus Proxima AB provides specialty hospital and emergency services in the greater Stockholm area and Curato AS, which was born in the merger of four companies, is Norway's leading provider of medical imaging services. Both companies target strong growth in the next few years through mergers and acquisitions.

"Our portfolio companies executed a total of 33 mergers and acquisitions in 2007."

Besides new investments our team made several follow-on investments to fi nance acquisitions or investments by existing portfolio companies. As at the end of 2007 the CapMan Buyout VIII fund established in 2005 has made eight investments, and in 2008 we will already commence fundraising preparations for our next fund.

ACTIVE OWNERSHIP DELIVERS RETURNS

We strive to be an active value adding owner for our portfolio companies. The main targets that we set for companies in the investment phase are growth, improved profi tability and creation of a good strategic position.

Mergers and acquisitions are a key component of our portfolio company development. Our portfolio

What do we look for?

Where do we invest?

control investments

a competitive and sustainable market position

almost all industries in the Nordic countries middle market cash fl ow positive companies net sales typically between €50–500 million and enterprise values between €50–250 million investment size typically €10–60 million equity and/or €10–30 million mezzanine per transaction

unique franchises, distinctive products and services
signifi cant growth potential both organically and through add-on acquisitions
industries that are consolidating or changing
an experienced, entrepreneurial management team

EXCELLENT MARKET COVERAGE, TENSE COMPETITION

companies executed a total of 33 mergers and acquisitions in 2007, of which the most signifi cant were the acquisition of Hand-Prod in Poland by Finnish OneMed Group and the fusion between Norwegian InfoCare ASA and Swedish Powermill. Amongst our other portfolio companies, Komas Oy, Maintpartner Oy and Pretax Oy also made several

The turnover of our portfolio companies developed strongly as a whole in 2007. The companies' aggregate turnover is estimated to have grown 18 per cent and operating profi t (EBITA) by some 37 per cent. A further indicator of strong development is the advance repayment of mezzanine and equity loans by several

On the exit front, 2007 was clearly quieter for our team compared to the previous two years. Our partial exit from Moventas Oy in January delivered a more than fourfold return on invested capital to investors (see the case study on page 47). Integrated facility management services provider Synerco AB was sold to a larger trade buyer in spring, and helicopter fl ight and maintenance operator Copterline Oy to a Finnish investor consortium in autumn. In late 2007 we also announced an exit from mezzanine target Savcor Group and sold our entire shares in Affecto Plc. In these exits we are pleased to have found new owners who will continue to develop the companies.

acquisitions.

FOUR EXITS

companies during the year.

On a yearly level, around 50 middle market buyout transactions that fi t our investment focus are made in the Nordic countries. CapMan has excellent Nordic market coverage, as in recent years our team has analysed more than 70 per cent of the deals made in the market. Measured in terms of the volume of completed deals, CapMan has been one of the most active players in Nordic middle market buyouts.

Enterprise values were high in the fi rst half of 2007. According to our observations, we succeeded to make investments at somewhat lower than average prices and lower debt coeffi cients. Our moderate approach to pricing has also meant that valuations in some auction processes rose to too high level for us.

The emergence of fi nancial markets turbulence at the end of summer was refl ected to some extent also in the Nordic countries, and the market clearly quietened down towards the end of the year. The supply of loan fi nancing has become more diffi cult especially in big buyouts, and as a result players specialising in these may turn their sights also on middle market transactions. Lower entry levels may also lead to increased interest from industrial buyers. We therefore believe that the competition for middle market buyout targets will remain tense also in 2008.

PREREQUISITES FOR SUCCESS

Our strengths continue to be our team's local presence and pan-Nordic business approach. Our value proposition is based on deep knowledge of buyout transactions, proven tools and processes and the scale of our team's contact network – all underpinning our capabilities to meet the challenges of the future. We will continue our close cooperation with the management of our portfolio companies. Company executives are always also involved in the companies as owners, and they have the key role in achieving success.

Tuomo Raasio Head of CapMan Buyout

CapMan_2osa_fglENG.indd 41 20.2.2008 11:50:28

OneMed has grown into the leading supplier of healthcare products and equipment in the Baltic region.

CapMan_2osa_fglENG.indd 42 20.2.2008 11:50:28

GROWTH DURING CAPMAN'S INVESTMENT PERIOD: SALES +138% STAFF+122% 5 M&A

In just over a year, OneMed has grown into the leading supplier of healthcare products and equipment in the Baltic region. The Group was established in June 2006, when CapMan acquired the Tamro MedLab business unit from Finnish Tamro Corporation. The initial investment has been followed by substantial acquisitions in Sweden, Poland and Finland.

What makes OneMed's sector into an attractive growth market?

Jorma Turunen: Our sector offers exciting growth opportunities with the ageing of the population, growing prevalence of chronic diseases, development of technological solutions in healthcare and increased research and product development. In addition the funding available for healthcare is on the rise.
Ari Tolppanen: From our viewpoint as a private equity investor the appeal of the sector lies, in addition to demographical factors, in its relative stability, the uncyclical nature of business and good prospects for consolidation. There are still lots of growth opportunities in the Baltic region, and the competitors are for now mainly local players.

Why are M&A the cornerstone of OneMed's growth strategy?

AT: The prerequisite for OneMed's success is an adequately large size, so we are building a strategic position for OneMed through mergers and acquisitions. The economies of scale and local presence achieved through acquisitions enable OneMed to respond to core trends in the market.
JT: The standardised procurement processes and joint procurement programs of our customers as well as global consolidation of healthcare supplies and equipment manufacturers means that also we as a supplier must have suffi ciently large size and negotiating power to succeed.

What are the synergies in practice?

JT: Our portfolio of products has grown substantially. We have a groupwide distribution network for all Group companies as well as common research, product development and marketing operations. Our own private label products in particular have signifi cant cross-selling potential.

AT: In addition to economies of scale, the Group's synergies are related also to strategically important governance and management systems and their effi ciency, as well as the reorganisation of business units. Synergy benefi ts between the acquired businesses and an effective operational organisation are the foundation for organic growth of the entire Group.

Why did you choose to make the largest acquisitions in Sweden and Poland?

AT: The merger of SelefaTrade and Förbandsmaterial in 2006 signifi cantly strengthened OneMed's previously modest position in Sweden and achieved Nordic market leadership for the Group. Annual growth in the Nordic healthcare supplies and equipment market is forecast at some fi ve per cent. The rate of growth in Poland is faster and the growth potential is therefore substantial.
JT: CapMan's Nordic business environment and expertise in the healthcare sector have been fundamental in fi nding the right acquisition targets.

CapMan_2osa_fglENG.indd 43 20.2.2008 11:50:30

What are OneMed's goals in the future?

JT: Our goal is to keep growing, to strengthen the position of our own private labels, cost-effi ciency and customer satisfaction. The latter of these is related not only to our product range, level of customer service and pricing but also our capabilities to serve multinational customers.
AT: OneMed's net sales have doubled in just over a year. CapMan's and the management's shared target is to record further signifi cant growth in sales revenues. We want to build OneMed into the market leader in selected geographical areas and to produce benefi ts for Group companies, healthcare customers in the Nordic and Baltic region and investors. The short-term objective is to bring the post acquisition integration processes to a conclusion.

Key information on investment

CapMan's initial investment

June 2006

CapMan funds' shareholding

72%

Other owners

Ilmarinen, management and employees, Plena AB
Board seats
2 (Ari Tolppanen (Chairman), Kai Jordahl)

Responsible investment professionals

Ari Tolppanen, Kai Jordahl, Mari Huuhka, Markus Sjöholm

Investment Activities

CapMan's role in OneMed

Planning and execution of add-on acquisitions.
Changing the organisation structure for better customer-orientation.
Recruiting executives and operative management.
Creating an incentive scheme covering the entire Group.

Buyout investments

As at the end of 2007, the Buyout team had made a total of 65 investments. The current portfolio comprised 23 companies at year-end with an aggregate turnover of €3.1 billion and total personnel of more than 18,500.

10 8 6 4 2 0 Age of portfolio per number of investee companies 5 6 4 8

0–1 years 2–3 years 4–5 years over 5 years

Investments by sector per number of investee companies and EVCA sector classifi cation

4% Industrial automation 4% Agriculture 4% Transportation 13% Other manufacturing
- 13% Medical/health related
- 17% Other services
- 22% Industrial products and services
- 23% Consumer related

Distribution of €483.7 million portfolio at cost by country

8% Denmark

8% Norway

30% Sweden

54% Finland

Retail and services

Komas Oy

Curato AS (formerly Telemark Røntgen Group) Medical imaging services

Skandia Autologistics Oy (formerly John Nurminen Vehicle Logistics Unit) Logistics services for vehicle manufacturers, importers and dealers

Infl ight Service AB Merchandise, services and solutions for the travel industry

Other portfolio companies

CapMan_2osa_fglENG.indd 44 20.2.2008 11:50:30

New investments in 2007

MQ Sweden AB Specialty fashion retail

SMEF Group A/S Machinery and equipment supplier to woodworking industry

InfoCare AS IT and home electronics services

System supplier of mechanical subassemblies

OneMed Group Oy Healthcare and laboratory products and equipment

StaffPoint Oy Staffi ng services

Maintpartner Oy Industrial maintenance and operation services

Pretax Oy Accounting services

Tokmanni Oy Non-food discount stores

Nacka Närsjukhus Proxima AB Specialty hospital and emergency services

Industry

Walki Group Oy (formerly Walki Wisa) Industrial wrappings and composite materials

Anhydro A/S Evaporation and drying technologies

Lumene Oy Cosmetics and institutional cleaning products

Cardinal Foods AS Production, marketing and distribution of poultry products

Metallfabriken Ljunghäll AB Aluminium die-cast products

Finlayson & Co Oy

Moventas Oy* Mechanical power transmission

Bedlinen, home textiles, foam products and mattresses

RTO Holding Oy** (formerly Reima-Tutta Oy) Adult's and children's outdoor clothing

Turo Tailor Oy Ab Men's suits and jackets

Å&R Carton AB Consumer carton packaging

CapMan_2osa_fglENG.indd 45 20.2.2008 11:50:32

Having grown through numerous acquisitions and openings of new stores, Tokmanni Group continues a large-scale integration phase in which the biggest single project is the logistics centre and Group headquarters scheduled for completion in Mäntsälä in summer 2008. By concentrating our operations in one location we will reap synergies in many different areas.

Tokmanni Group

In 2007 we continued to show healthy growth and profi tability throughout all business areas in the Infl ight Service Group. Our focus on developing existing and securing new contracts was successful. During the past two years we have further reinforced our position as one of the leading travel retail companies in our geographical markets.

Infl ight Service AB

In 2007 we made four acquisitions in all, and we again signed a new acquisition agreement in January 2008. The acquisitions strengthen our position according to our growth strategy in Sweden and especially in Finland, where we are amongst the top three providers of industrial maintenance services.

Maintpartner Oy

* The funds sold the majority of their holding in Moventas Oy in January 2007. The funds have a 16 per cent stake in the company. ** Investment by Nordic Private Equity Partners, which is not included in the total number of investments made.

For more detailed information on current portfolio companies and the funds' shareholdings, please visit www.capman.com.

Buyout exits

As at the end of 2007, the Buyout team had exited from 40 Nordic companies. The average holding period in buyout portfolio companies was 5.4 years.

Exit methods per total number of exits

7% Other

9% Sale to another private equity investor

14% Public listing

19% Purchase by other owners/company

Exits in 2007

Affecto Plc Copterline Oy Moventas Oy (partial exit) Savcor Group Ltd Oy* Synerco AB

Previous exits

Matkatoimisto Oy Matka-Vekka

EuroProcessing International ASA*

Kuusamon Tropiikki Oy** Normet Corporation Tamore Oy Vogue Group Oy

* Pure mezzanine investment.

2006 Kultajousi Oy

2005 Aurajoki Oy

Finndomo Oy Holiday Club Finland Oy

Junttan Oy

CapMan_2osa_fglENG.indd 46 20.2.2008 11:50:33

Mehiläinen Oyj Nordkalk Corporation PPTH-Norden Ltd Woodheat Finland Oy RGS 90 A/S Tiimari Plc

2004 Eltel Networks Corporation Karelia Corporation Kotipizza Oyj Lohja Caravans Oy Ab Sweco AB

2002

Arcorus Plc Euracon Oy Royal Ravintolat Oy Teknikum Group Ltd

2001 Oy Marli Group AB

2000

Elcoteq Network Corporation* Vital Petfood Group Oy

** The exit is not included in the total number of exits because the exit method was a merger with another CapMan portfolio company. More detailed information on exited portfolio companies and the funds' shareholdings can be found at www.capman.com.

1999 Aldata Solution Oyj Mercuri International Oy

1998

Chymos Juomat Oy** Ramirent Plc

1997

Nordic Aluminium Plc PKC Group Oyj Rocla Oyj

1995

Schat Watercraft Oy

1994

Lappset Group Oy

Investment value at exit*

51% Trade sale

Moventas shifts into top gear

Moventas is one of the world's leading suppliers of mechanical power transmission equipment and maintenance services for the energy and process industries. CapMan decided to enlarge Moventas' ownership base in winter 2007 in response to strong market growth and the company's forceful development.

STRONG VALUE CREATION POTENTIAL

Funds managed by CapMan acquired Moventas (formerly Metso Drives) from Metso Corporation. Moventas' value creation plan was specifi ed during the investment process based on growth in the market for wind gears, growth in sales to the former parent company and its competitors, global growth in maintenance services, improvement in profi tability and effective capital structure management. The solid technical expertise and customer relationships built under Metso created a platform for rapid growth and improved profi tability.

NEW GROWTH STRATEGY

Value creation work was started immediately post investment. The most visible actions of the strategy were the recruitment of a new CEO and the defi nition of growth areas and a new organisation.

A new strategy was specifi ed for Moventas as a result of the strategy process, which targeted a doubling of volumes, threefold growth in profi tability and delivery of added value for all interest groups. The strategy was based on organic growth and a new organisation model that included two business units – Wind Gears and Industrial Gears – with strong growth objectives.

CapMan's role in Moventas was to craft an aggressive growth strategy and to support management in the strategy implementation.

CapMan_2osa_fglENG.indd 47 20.2.2008 11:50:34

GROWTH TARGETS WERE RAPIDLY REACHED

Moventas established a strategic position as an independent company within a short time and hence generated signifi cant interest. The company required substantial follow-on investments to capitalise on growth in the wind gears market; therefore we wanted to fi nd an owner with capability to meet growth requirements and commitment to the company's further development.

CapMan funds made a partial exit from Moventas in January 2007, retaining a minority stake of 16 per cent in the company and continuing proactive participation in the company's development. During an eighteen-month period with CapMan as majority owner, Moventas posted signifi cant growth in turnover and number of employees and close to doubled its operating profi t. CapMan funds meanwhile delivered a fourfold return on invested capital to fund investors.

Key information on investment

CapMan's initial investment
April 2005

CapMan funds' shareholding prior to partial exit

CapMan funds ca. 77%, Varma ca. 17%, management ca. 6%

CapMan funds' shareholding after partial exit

Industri Kapital 58%, management 22%, CapMan funds 16%, Varma 4%

Board seats

1 (Orvo Siimestö)

Responsible investment professionals

Orvo Siimestö, Anders Björkell, Jan Mattlin

The team's pan-Nordic approach and local presence enable best practices to be shared between portfolio companies.

Anders Björkell, Partner

CapMan's Buyout team comprises 29 people in Helsinki, Stockholm, Copenhagen and Oslo. The investment professionals are involved in the development work of 2–4 portfolio companies on average. The team's know-how is reinforced by the Nordic Advisor Network, which includes four Senior Advisors working full-time for the Buyout team and nine Industrial Advisors.

Tuomo Raasio Senior Partner, Head of CapMan Buyout

Tuula Kamppari, Executive Assistant

Heikki Westerlund, Senior Partner, CEO of CapMan Plc

CapMan_2osa_fglENG.indd 48 20.2.2008 11:50:35

Jukka Härmälä, Senior Advisor

Henrik Tholander Investment Manager

Hans G. Tindlund, Partner

Olli Liitola Senior Partner, Deputy CEO of CapMan Plc

Jerome Bouix, Senior Partner, Head of Investor Services

Gitte Reitz, Investment Manager

Kai Jordahl, Senior Partner, Deputy Head of CapMan Buyout

Riikka

Riikka Wärn Executive Assistant

Jukka Järvelä, Partner

Orvo Siimestö, Senior Advisor

Peter

Göran Barsby, Partner

Peter Langkjær, Senior Advisor

Santeri Lähdesmäki Investment Analyst

CapMan_2osa_fglENG.indd 49 20.2.2008 11:50:44

Investment Analyst

Sebastian

Espen Stenumgård Investment Director

Espen

Torben von Lowzow, Partner

Lars Hagelstam, Partner

Lasse

Ari Tolppanen, Senior Partner, Chairman of the Board of CapMan Plc

Kari Österlund, Senior Advisor

Malin Säfweräng, Investment Manager

Investment Activities

Mari

Mats Gullbrandsson Partner

Mats

Sebastian Schauman

Buyout team

Jan Mattlin Investment Director

CapMan Technology

Year 2007 proved the suitability of our current investment focus for Nordic technology markets, and we acquired six new portfolio companies. In addition, we exited from seven companies.

THE YEAR OPENED WITH A NEW FUND

The fi rst signifi cant event for CapMan Technology in 2007 was the establishment of CapMan Technology 2007 fund. The investment focus of the fund is on expansion and later stage technology companies, and due to its technology focus we can utilise the existence of Nordic technology clusters in our investment operations.

Our portfolio companies are primarily companies that deliver industrial and business-to-business technology products, solutions or technology-based services, and have a proof of concept with existing customers. In addition to value creation potential, the qualities that we look for in the expansion stage companies include a solid business plan, an attractive growth scenario, a strong management team and some revenue from existing customers. In later stage companies we expect solid technology or products, a good customer base or a few larger customers, a well-functioning revenue model and a strong ambition to accelerate the company's growth. In addition the companies' products or services must have extensive demand internationally.

NEW PORTFOLIO COMPANIES HAVE INTERNATIONAL AMBITIONS

CapMan_2osa_fglENG.indd 50 20.2.2008 11:51:03

Technology companies continue to offer a variety of investment opportunities in our Nordic business environment, and the past year has further strengthened our belief in the competitiveness of our investment focus and business model in Nordic technology markets. In 2007 we acquired six new companies to our portfolio, all sharing a common goal of strong growth and internationalisation. In March we announced investments in video surveillance software provider Mirasys Ltd. and market intelligence solutions specialist Global Intelligence Alliance Group Oy, and in early summer we acquired treasury management

"We made our fi rst investments in the cleantech and healthcare sectors."

solutions provider IT2 Treasury Solutions and IP communications house Movial Applications Oy.

Particularly interesting additions to our portfolio in 2007 were KMW Energi AB and Mawell Oy, which were the fi rst investments by our team in the rapidly growing cleantech and healthcare sectors. KMW Energi is the leading supplier of bio fuel combustion plants and combined heat and power plants in Sweden. The plants deploy innovative technology solutions that enable the versatile use of bio fuels. Mawell, on the other hand, provides ICT healthcare solutions for private and public healthcare

Investment Activities

What do we look for?

signifi cant domestic or international growth potential, organically or via add-on acquisitions
ready and approved products/services
strong local customer base, prominent market position
an experienced, entrepreneurial executive team

our remaining shares in SysOpenDigia Plc and Affecto Plc.

GROWTH IS A MAJOR DRIVER OF VALUE CREATION

Value creation in the portfolio companies is based fi rst and foremost on growth in sales, improved operational effi ciency and the building of a strategic position. In 2007 the aggregate sales of our portfolio companies increased by an estimated 37 per cent and the aggregate number of personnel by an estimated 38 per cent. The companies' average profi tability also improved. CapMan Technology's investment portfolio comprised 24 companies in all at year-end.

Our investment professionals contribute to the value creation process mainly via Board work, supporting the company management in strategy work, M&A, recruitment of senior management and issues of internationalisation among others. It is the key personnel of portfolio companies who play the central role in the implementation of changes and successful creation of value.

MARKET OUTLOOK

Institutional commitment in European venture capital investment has been at a historically low level in recent years, which has refl ected on fundraising of technology funds. Fundraising for CapMan Technology 2007 fund succeeded well in spite of the market situation and the fund held a fi nal close at €142.3 million in January 2008. Behind the successful fundraising was CapMan Technology's investment focus according to which we have worked for already 10 years' time.

The past year was a time of active investments and exits for our team, even though the Nordic technology market was clearly shrinking as measured by the volume of technology investments made. There was a drop in terms of the amount of invested capital in Finland, while in terms of the volume of deals the biggest fall was seen in Sweden. CapMan Technology's market coverage remained good in 2007 thanks to our Nordic approach, and in connection with our investment processes we saw more than 70 per cent of all opportunities fi tting our investment focus. We believe that our team and resources place us in a good position to continue as a proactive player in the market also in 2008.

Petri Niemi Head of CapMan Technology

CapMan_2osa_fglENG.indd 51 20.2.2008 11:51:04

Where do we invest?

expansion and later stage technology companies in the Nordic countries
wide technology focus that utilises Nordic technology clusters
companies that deliver industrial (OEM) and B-to-B infrastructure, applications or services to customers

portfolio company sales in the range of €2 million or more depending on the company's development stage

investment size typically €3–15 million equity

AN ACTIVE YEAR FOR EXITS

value creation work.

year.

Our portfolio companies Secgo Software Oy, Hantro Products Oy, Avitec AB and Solid Information Technology Oy were all acquired by larger industrial players in 2007. The sale of portfolio companies to market leaders is an indication that we have succeeded, together with company management, to create attractive market share or strategic position for the companies. During the year we also exited from Medianorth Group Corporation and sold all of

organisations and the pharmaceutical industry. We invested in Mawell in syndicate with CapMan Life Science, which also participates in the company's

"Expansion and later stage technology companies continue to offer a variety of investment opportunities in our Nordic business environment."

In addition we made numerous add-on investments in our other portfolio companies during the year. In all Nordic countries, the deal fl ow remained at a high level also in the last quarter of the

IT services company Flander targets growth in Nordic countries and Asia.

CapMan_2osa_fglENG.indd 52 20.2.2008 11:51:04

Vesa Walldén, Senior Partner, CapMan Technology

GROWTH DURING CAPMAN'S INVESTMENT PERIOD:

Markus Suomi CEO, Flander Oy

STAFF +100%

Investment Activities

In its ten years of operation, Finnish Flander has grown and developed into a pioneer in software testing for wireless environments. The company's customers include the world's leading mobile device manufacturers, independent software vendors, mobile operators and service providers. Flander has invested strongly in international growth during the past two years.

What makes software testing a global growth sector?

Markus Suomi: Mobile devices are evolving very rapidly today. The demand for independent software testers like Flander is supported by the continuous growth and increasing complexity of devices and software applications. The number of component providers is also growing strongly.
Vesa Walldén: The global nature of the market calls for several different versions of the same manufacturer's software or services, which in turn builds up testing markets all over the world. In addition the big players in the market, such as mobile phone manufacturers, are increasingly relocating their production and product development abroad.

Why did Flander pursue active expansion in the past two years?

MS: We have achieved substantial growth throughout the entire history of the company, accelerated by the increased level of outsourcing in software development and testing. Almost all ICT companies utilising outsourced testing services are global players, who prefer partnerships with service providers offering a comprehensive service portfolio and local presence in different markets. We sought support for our internationalisation with the fi nancing round in 2005.

Why was Flander a good fit to CapMan's investment focus?

VW: Prior to our investment in 2005 we followed Flander for a few years, during which time the company proved its service concept and won major customers. Flander has all the prerequisites for success and we are pleased to back the company not only in terms of fi nancial support, but also with know-how in M&A, internationalisation, executive recruitment and restructuring of management and governance systems.

Why did you establish the first international units in Peking and Stockholm?

VW: Peking offers a good business environment. Compared to many other Asian countries China's infrastructure is more advanced and the country has a ready supply of highly educated labour force. China is also a large and strategically important market in itself. Sweden, on the other hand, is a very important market in addition to Finland for many ICT companies. In the service sector the capability to provide services close to product development is critical.
MS: The Peking unit produces cost benefi ts in testing services and execution of major project components for our customers in the Asia region. The unit serves both foreign companies in China and our Nordic customers, thus evening out ordering peaks. At the same time the subsidiary founded in Sweden in 2007 serves our major Nordic customers.

CapMan_2osa_fglENG.indd 53 20.2.2008 11:51:07

What is required from a technology company to internationalise?

MS: It demands a strong and unique concept, extensive networking, an understanding of the customer's business and processes, as well as top partners in fi nance and consulting.
VW: An experienced management and Board of Directors with a shared vision play a key role. We reinforced Flander with solid expertise in global business and technology markets by recruiting Markus Suomi as the new CEO and strengthening the Board of Directors.

What are Flander's next goals?

MS: We aim to provide innovative and reliable solutions that enable the success of our global customers. We will keep a sharp eye on the markets and stay close to our customers, while we develop our service capabilities in China also for our Nordic customers.
VW: Our objective during the next few years is to grow Flander organically and through M&A and to consolidate the company's strategic position in the global testing market all in all. For the moment, our efforts are focused on internationalising the company and creating profi table organic growth.

Key information on investment

CapMan's initial investment October 2005

CapMan funds' shareholding

31%

Other major owners

company management and employees
Board seats
2 (Vesa Walldén, Timo Tiihonen)

Responsible investment professionals

Vesa Walldén, Janne Martola, Timo Tiihonen

Examples of Flander's customers

Elisa
- Google
- Huawei
Motorola
Nokia
SonyEricsson
TeliaSonera

CapMan's role in Flander

Reinforcing the Board of Directors with experts in IT and finance.
Participating in strategy work.
Recruiting management and employees.
Consulting in executed and unsettled M&A.

Technology investments

As at the end of 2007 the Technology team had made 65 investments mostly in Nordic technology companies. The current portfolio comprised 24 companies at year-end with an aggregate turnover of €430 million and total personnel of some 4,000.

6% Others 11% Norway 12% Denmark 35% Finland 36% Sweden Distribution of €114.7 million portfolio at cost by country Other portfolio companies In 2007 our volume of orders was up and we enlarged our customer base in the Nordic countries. We achieved substantial year-on-year growth in sales and maintained our very strong market position in Sweden. Our goal in 2008 is to expand our customer base outside the Nordic region. EM4 Inc. Optoelectronic devices Fastrax Oy GPS technology Silex Microsystems AB Micro-Electro-Mechanical-System (MEMS) components 42Networks AB (part of PacketFront Sweden AB) Product and system solutions

KMW Energi AB

CapMan_2osa_fglENG.indd 54 20.2.2008 11:51:08

Infrastructure

KMW Energi AB Bioenergy

New investments in 2007

Age of portfolio per number of investee companies

Applications Services

Mawell Oy

Other portfolio companies

New investments in 2007

Healthcare ICT solutions

Movial Applications Oy IP communications software

Mirasys Oy Video surveillance solutions

Global Intelligence Alliance Group Oy (formerly Novintel Oy) Market Intelligence solutions

Treasury management systems

Animex AB Automation and IT applications for plastics industry

Locus AS Emergency and fl eet management systems

Tritech Technology AB Wireless industrial hardware and software solutions

Ascade Holding AB

Solutions and consulting for teleoperators

ScanJour A/S Electronic document management systems

Spintop Netsolution AB Software development and services

Gammadata Holding AB

Applied nuclear, atomic and surface physics R&D and application

Exidio Oy Treasury operation systems

InfoCare AS IT and home electronics services

CapMan_2osa_fglENG.indd 55 20.2.2008 11:51:09

XLENT AB Management consulting and business solutions

Flander Oy Software testing and development of wireless applications

Siennax International BV Application service provider (ASP)

Tieturi Oy IT training

Foreca Oy Weather services

In 2007 we recruited a new CEO and reinforced our sales and marketing operations. During the year we conducted also major agreements for the delivery of video surveillance solutions to different petrol station chains in the Nordic countries, Spain, Baltic region and Poland.

Mirasys Oy

IT2 Holding ApS

Technology exits

As at the end of 2007 the Technology team had exited from 41 companies in total. The average holding period in technology portfolio companies was 4.2 years.

Exit methods per total number of exits

5% Sale to another private equity investor
14% Public listing
16% Purchase by other owners/company
19% Other

Exits in 2007

Affecto Plc Avitec AB Distocraft Oy Hantro Products Oy* Medianorth Group Corporation Secgo Software Oy* Solid Information Technology Oy*

Previous exits

AtBusiness Communications Corporation

2006

Eco-Dan A/S

2003

2001 AltOptronic AB

Equa AB LGP Telecom AB MatchOn Sports Oy Read Soft AB

Multichannel Instruments AB Republica Jyväskylä Oy Tieturi Vision Oy (formerly Tieturi Online Oy/ Talent Code Oy) Tritech Teknik AB Utfors AB*** XFG Holding Oy (formerly LPG Innovations Oy)

DB2B, Digital-Business-to-Business Oy

AdraSoft AB Altitun AB Autograf International AB Netwise AB Satama Interactive Plc Universal Access AB

1999

2000

Aldata Solution Oyj Flexim Security Oy** Nexor System Service Oy

1997

CECAP AB

* The exit was announced in 2007.

** The exit is not included in the total number of exits because the exit method was a merger with another CapMan portfolio company. *** Pure mezzanine investment.

More detailed information on exited portfolio companies and the funds' shareholdings can be found at www.capman.com.

Investment value at exit*

* Indexed (time of investment = 100), based on 37 exits. Exits comprise dividends, interest earnings and sales revenues.

46% Trade sale

Modultek Oy Quartal Oy 2005 Netseal Oy Northlight Optronics AB Runaware AB

2004 Digiscope AB** Handwise Ltd

Takamaki Oy

CapMan_2osa_fglENG.indd 56 20.2.2008 11:51:12

Setec Oy Cetevo AB (part of Displayit AB)

QlikTech International AB

CapMan's Technology team has comprehensive experience as a partner to Nordic growth companies and entrepreneurs.

Lennart Jacobsson Senior Partner

Lars Hagdahl, Senior Partner, Deputy Head of CapMan Technology

Vesa Walldén, Senior Partner

CapMan's Technology team comprises 12 members with solid expertise in Nordic technology clusters as well as in banking and fi nance. The members of the team are involved in the development work of 2–4 portfolio companies on average. The team's know-how is reinforced by the Nordic Advisor Network, which includes two full-time Senior Advisors and fi ve Industrial Advisors.

Timo Anders Holmén, Investment Manager Anders

Jarkko Virtanen, Senior Advisor

Technology team

Caroline Strand, Investment Manager

Julia Lundquist Investment Director

Caroline

Timo Tiihonen Senior Advisor

CapMan_2osa_fglENG.indd 57 20.2.2008 11:51:12

Tommy Valther Hansen, Partner Tommy

Pete

Petri Niemi, Senior Partner, Head of CapMan Technology

Janne Martola, Investment Director

Satu Pihlajamaa Executive Assistant

CapMan Life Science

Our investments in 2007 were centred on healthcare services providers that complement our portfolio of medtech companies. Healtcare trends open up new investment opportunities for our team also in 2008.

HEALTHCARE REFORM BRINGS OPPORTUNITIES

It is expected that the increased need for healthcare services will generate strong growth in demand for medical technology products in the future. Rising healthcare expenditure, the ageing population and lifestyle changes all accelerate the adoption of new products and devices. Coincidingly, preventive treatment grows in importance.

The European ideal – to preserve a universal public healthcare system for the entire population – requires substantial improvements in effectiveness. New innovative products and operational models also make this possible. The proportion of public healthcare services outsourced to the private sector has risen in the Nordic countries, and the privatisation trend is expected to continue. There is also increasing demand for specialty care and, consequently, a growing demand for providers of specialised healthcare services or products.

INVESTMENTS TARGET PRODUCTS OR SERVICES

CapMan Life Science invests principally in Nordic medtech companies or healthcare services companies. The products or services of our portfolio companies satisfy direct and long-term customer demands, and typically enable better treatment outcome at a lower cost.

Our team is specialised in companies that market and sell medical products and equipment used for

CapMan_2osa_fglENG.indd 58 20.2.2008 11:51:24

the diagnosis and treatment of diseases. The products of our portfolio companies are typically devices and/ or consumables developed using innovative technologies with limited or no remaining development risks. Medtech technology markets have, however, become tougher. Clinical product trials have become more extensive, FDA approvals have grown more stringent and the time to market for products has slowed. At the same time increasing healthcare costs have led to the situation where the reimbursement of products from public or private funds is increasingly uncertain. Indeed, risks related to medtech companies have grown and investment holding periods have clearly stretched beyond the desired timeframe of 4 to 6 years. As a result we have moved our focus to more mature investments and healthcare services companies with clear cash generating capability.

NEW INVESTMENTS COMPLEMENT THE PORTFOLIO

CapMan Life Science has outstanding market penetration and we see almost all investment opportunities that meet our investment focus in the Nordic countries. In 2007 we made three new investments, of which our investments in Swedish Nacka Närsjukhus Proxima AB and Norwegian Curato AS were in syndicate with CapMan Buyout and our investment in Finnish Mawell Oy in syndicate with CapMan Technology. Syndication of investments enables us to exploit investment teams' crosscompetency in M&A, technology solutions and

"In the end it is the deep knowledge of the portfolio companies' executives and key personnel in medical treatments, technologies and markets that play a leading role in driving

value creation."

medicine, among other areas. With a slowdown of the medtech market in 2007, CapMan's extensive deal fl ow has facilitated origination of attractive later stage investment opportunities.

Of our new portfolio companies, Nacka Närsjukhus Proxima provides specialised hospital and emergency services in the greater Stockholm area and Curato is Norway's leading provider of medical imaging services. Both companies have a mission to grow strongly through mergers and acquisitions in the next few years, with business expansion enhanced by exploitation of their expert know-how, equipment and staff. Mawell, on the other hand, provides private and public healthcare organisations and pharmaceutical companies with ICT solutions such as medical imaging and multimedia, self-care, eServices, business intelligence and healthcare development. The company's web-based technology enables electronic handling of patient records and

real-time integration of different healthcare information management systems, signifi cantly increasing the effectiveness of treatment. All three investments complement our existing portfolio.

PROVEN EXPERTISE DRIVES SUCCESS

The medical environment sets standards for the value creation strategies of our portfolio companies. We take an active part in value creation above all through proactive Board work, to which we especially bring wide industry knowledge and know-how in strategic issues and commercialisation of medtech products. A key focus area for our team is to ensure that portfolio companies develop a good level of sales and profi tability.

Finding the right management is important from the value creation point of view, as in the end it is the deep knowledge of executives and key personnel in medical treatment methods, technologies and markets that play a leading role in driving value creation. Correspondingly, an experienced owner with a strong commitment to business development provides the best possible setting in which to succeed.

In 2007 the companies in our portfolio achieved aggregate growth in sales of around 34 per cent. There was one listing from our portfolio during the year, when Swedish Aerocrine AB executed an IPO on the Stockholm Stock Exchange. The NIOX monitoring devices developed by Aerocrine measure the nitrogen oxide content of the patient's exhaled

breath for the improved management and care of asthma. We retained our Aerocrine shares in the IPO. Important milestones were also reached by Silex Microsystems, which continued its strong growth and improved its profi tability, and by Neoventa Medical, which took a great leap forward with the launch of its product on US markets (see the case story on pages 60–61).

MARKET OUTLOOK

Global trends in the healthcare sector will bring new investment opportunities to investors like CapMan Life Science also in future. A characteristic of our team is that we network extensively with companies at different developmental stages as well as researchers and other players in the Nordic life science sector. The majority of investment opportunities come to our knowledge through personal contact by entrepreneurs or other players in the industry. Our Nordic way to do business and our prospects to syndicate investments with CapMan's other investment teams or other players give us an upper hand in Nordic consolidation of the healthcare sector also in future.

Jan Lundahl Head of Life Science

CapMan_2osa_fglENG.indd 59 20.2.2008 11:51:25

Where do we invest?

medtech, particularly products for diagnosis and treatment of diseases
healthcare services companies
primarily Nordic companies and selectively the rest of Europe
enterprise values in the range of €2–20 million
investment size typically €2–7 million equity from the life science funds

Neoventa's core product STAN® was introduced to the US market in 2007.

CapMan_2osa_fglENG.indd 60 20.2.2008 11:51:25

Jan Stålemark CEO, Neoventa AB

GROWTH DURING CAPMAN'S INVESTMENT PERIOD:

Johan Bennarsten, Partner, Deputy Head of Life Science

SALES

ESTABLISHMENT OF THE FIRST STAN® CENTRE IN USA

Swedish Neoventa Medical develops equipment for monitoring and management of fetal oxygen supply during childbirth. The company's unique methodology is used annually in more than 100,000 deliveries in over 20 countries. The sales of Neoventa's main product STAN® have gained good speed in the Nordics and in other parts of Europe over the past few years and now the company's focus is on establishing operations in the US market.

What was the purpose of the 2006 fi nancing round and why was Neoventa a good fi t to CapMan's investment strategy?

Jan Stålemark: Neoventa's core product STAN® gained US Food and Drug Administration (FDA) approval just prior to the fi nancing round, thus opening up the largest single market to us. By extending Neoventa's ownership base we injected both fi nancial power and medtech expertise into the company in order to respond to the opportunities in the US market and to enable further commercialisation of our method on the markets currently covered.
Johan Bennarsten: The investment decision was based on the clear clinical need for Neoventa's methodology and the health economics value. At the time of investment the fetal monitoring market was – and still is – relatively untapped and dominated by notably larger players. Neoventa had developed a methodology that was remarkably ahead of the competitors, was backed by extensive clinical data and in use by several customers. The signifi cant sales potential in the US market was also a lucrative opportunity.

What significance did the opening of the fi rst STAN® fetal monitoring centre have in the US?

JS: The introduction of STAN® to the Community Regional Medical Center in California in autumn 2007 was a major milestone. The centre, which operates one of the largest labour and delivery units in California with almost 7,000 births per year, is dedicated to research and education as well as striving for the best possible maternity care. Another important milestone for us in 2007 was the approval by the US National Institutes of Health for a large multi-centre trial.

JB: The very wide scale of the centre's obstetrics care and its cooperation with UCSF Fresno makes it a great fi t to Neoventa's expansion strategy.

What are Neoventa's experiences of the approval processes the company has gone through in the US?

JS: The approval process for the US market has been long and somewhat slower than expected especially in terms of approval of product changes, even though the clinical trials had proven the methodology.
JB: Obtaining and maintaining FDA approval is an expensive process requiring exhaustive resources. Neoventa's team has, however, succeeded in this process cost-effectively.

What is required from a medtech company to internationalise?

JS: CapMan and our other private equity investors have had a central role in defi ning Neoventa's growth strategy, and have brought multinational expertise for our use. Neoventa's methodology in fetal monitoring is unique on a global scale and as there are only a handful of competitors, our business is inherently international.
JB: Companies need to shift their focus from research and development to a sales and marketing plan, in addition to clinical trials,

CapMan_2osa_fglENG.indd 61 20.2.2008 11:51:29

quality assurance and regulatory issues. Our role in Neoventa has been to support the company to establish its marketing and sales operations and to enable further business model and product development.

How has the focus been shifted to sales and marketing?

JS: In addition to the shift in mindset, we have reinforced our sales and marketing team with new personnel and also allocated more resources to support our current distributor network.
JB: We recruited Jan Stålemark largely because of his long sales and marketing experience in the US. We have also strengthened the Neoventa Board in the fi elds of business management, strategic marketing and medical technology.

What are Neoventa's growth targets in the future?

JS: Our aim is to make Neoventa's method the standard of obstetrics care in all our selected markets.
JB: The major growth markets will be the US and Europe and we will continue to target strong annual sales growth and profi tability of operations in both of these markets during the next 3 to 4 years.

Key information on investment

CapMan's initial investment June 2006

CapMan fund's shareholding

30.1%

Other major owners

Investor Growth Capital and SEB Företagsinvest with equal holdings of 30.1%

Board seats

1 (Johan Bennarsten)

Responsible investment professional

Johan Bennarsten

More information on Neoventa and STAN®

www.neoventa.se

CapMan's role in Neoventa

Recruiting a CEO with sales and marketing expertise.
Reinforcing the Board of Directors with strategic marketing skills.
Preparing and implementing a marketing and sales plan for the US and Europe.
Building up the US organisation.
Changing the business model from product sales to procedure-based billing.

Life Science investments

As at the end of 2007, the Life Science team had made 21 investments and there were 13 companies in the current portfolio.

Investments

Curato AS (formerly Telemark Røntgen Group) Medical imaging services

Mawell Oy

Healthcare ICT solutions

Nacka Närsjukhus Proxima AB Specialty hospital and emergency services

Aerocrine AB*

Other portfolio companies

New investments in 2007

Products based on measurement of nitric monoxide (NO) as an infl ammation marker for diagnosis and monitoring of asthma

Millicore AB Products for use in thoracic surgery

SciBase AB

Instrumentation for diagnosis and monitoring of skin cancer and other tissue alterations

Index Diagnostics AB Diagnostics and treatment of intestinal bowel diseases

Neoventa Medical AB

Monitoring and management tools for improved perinatal care

Silex Microsystems AB Micro-Electro-Mechanical-System (MEMS) components

ProstaLund AB

Biomaterial-based surgical implants

Equipment for treatment of benign prostatic hyperplasia

Inion Oy

Jolife AB Automated heart compression systems for treatment of sudden cardiac arrest

QuickCool AB Brain cooling technologies to prevent brain damage e.g. in cardiac arrest or stroke

* Aerocrine AB made an IPO on the Stockholm Stock Exchange in June 2007. CapMan Life Science IV fund owns 6% of the company's share capital after the listing.

Life Science exits

The Life Science team has exited from eight companies in total as at the end of 2007.

Exits

2006 ProstaLund AB*

2005

CapMan_2osa_fglENG.indd 62 20.2.2008 11:51:30

Entifi c Medical Systems AB Eutech Medical AB Otre AB

2003 Hemapure AB

Vicore Pharma AB

1997 Biora AB NeoPharma Production AB

* Swedestart II KB fund exited from the company in 2006. For more detailed information on current and exited portfolio companies and the funds' shareholdings, please visit www.capman.com.

Age of portfolio per number of investee companies

Life Science team

Head of CapMan Life Science

The Life Science team has complementary expertise in medicine and fi nance.

CapMan's Life Science team of fi ve members is one of the most experienced investment teams making medtech investments in Europe. The team's investment professionals have accumulated more than 80 years' experience within life sciences and comprehensive contact networks throughout Europe, particularly in the Nordic countries.

Björn Nordenvall, Partner

Johan Bennarsten Partner, Deputy Head of CapMan Life Science

Investment value at exit*

* Indexed (time of investment = 100), based on eight exits.

Pernilla Zirath, Offi ce Coordinator

Yrjö E. K. Wichmann, Investment Director

CapMan_2osa_fglENG.indd 63 20.2.2008 11:51:32

Real Estate

We opened 2007 with the sale of our fi rst fund's portfolio and continued active operations throughout the year, making 16 new investments in all. CapMan

A PEAK YEAR FOR EXITS AND INVESTMENTS

2007 has been a superb year for CapMan Real Estate. In April we held the fi nal close of our CapMan RE II fund investing in property development targets at an investment capacity of €600 million. The fund has started investment operations actively, and its investment focus has proven to be a good fi t to the market. We have acquired several property development targets to our portfolio, in which we will utilise the all-round expertise of our organisation for value creation. As a counterbalance to property development investments we also succeeded to fi nd core and value added properties with more steady returns and lower risk for the portfolios of both funds. During the year we made 16 new investments in all, evenly divided between our fi rst and second funds.

The sale of CapMan Real Estate I fund's portfolio to an international investor consortium was fi nalised at the beginning of the year. The portfolio comprising 22 properties was sold for €377.5 million, generating exceptional returns for both the fund's investors and for CapMan. The fund continues active investment operations and we have succeeded to replace the divested portfolio with new assets.

CapMan Real Estate's business volume of investments, commitments and exits was almost €800 million in 2007. We believe that the availability of individual properties that suit our funds' investment focuses and objectives will remain at a good level also in future, as evidenced by several negotiations on new investments currently underway.

CapMan_2osa_fglENG.indd 64 20.2.2008 11:51:34

THE NEW HOTEL FUND EXPANDED OUR OPERATIONS IN EARLY 2008

In early 2008 we expanded our investment focus with the establishment of the CapMan Hotels RE fund investing in hotel properties primarily in Finland and Sweden, thus further consolidating our position as one of Finland's leading real estate investors. The investment capacity of the hotel fund had reached €835 million at the fi rst closing held in January 2008. Fundraising continues in 2008, and the fund's maximum investment capacity is €1.1 billion. In connection with its establishment the fund announced the acquisition of a hotel portfolio of 39 properties in Finland and Sweden from Northern European Properties Ltd, concluding the third largest real estate transaction ever made in terms of value in Finland.

VALUE CREATION THROUGH ACTIVE REAL ESTATE DEVELOPMENT

We want to act as a reliable partner in real estate development projects and, in addition to the investment, bring in our contribution and expertise to the projects. With active development work, we aim to secure long-term and sustainable value increase in the real estate projects and properties of CapMan's funds and Realprojekti's other customers. In this way the value creation is not only dependent on short-term changes in the business environment. Through our skill base we can also answer to the general price competition and create value through other than fi nancial measures which are though important, clearly more limited at present.

HIGH LEVEL OF DEMAND FOR REAL ESTATE CONSULTING

The buoyant business environment was also visible as an increase in the demand for consulting operations and the launch of many new partnership projects. The growth in the economy and retail volumes was evident in the high numbers of commercial projects especially in the fi rst half of 2007. Of the projects currently under construction by the funds, the Skanssi shopping centre project in Turku and the Entresse shopping centre in Espoo require our project

"Our business volume of investments, commitments and exits was almost €800 million in 2007."

management and construction contracting resources. In addition we provide numerous other real estate development and zoning services for the projects of our other customers. Consulting operations are the responsibility of the real estate professionals in Realprojekti, a subsidiary of CapMan.

COMPETITION FOR GOOD PROPERTIES REMAINS FIERCE

There was a slight weakening of real estate market liquidity towards the end of 2007, and overall sales volumes are expected to fall to some extent from the level of the previous year. Rising interest rates and credit constriction by the banks in fi nancial markets will impact on competition and prices paid for properties. The use of equity in real estate investments will increase and there will be a fall in transactions made with heavy debt fi nancing. High prices will still be paid for good core properties in the markets, whereas in more opportunistic targets a rise in yield requirements is expected. Demand in commercial leasing markets is expected to remain strong also in 2008 and there are many new projects under construction.

PREREQUISITES FOR SUCCESS IN 2008

CapMan's fi rst and second generation real estate funds have adequate personnel resources, a competitive structure and remaining investing capacity totalling €340 million for seeking good investment targets and developing the current portfolio. Our investment capacity has been substantially raised by the establishment of the new hotel fund. We recruited six new skilled members for our investment and consulting teams in 2007, and an additional eight new people will transfer to our teams with the establishment of the hotel fund. In growing our team we have further enhanced our capabilities to develop the funds' operations, deal fl ow expertise and activity, real estate management and leasing activities – thus enabling us to grow the volume of real estate development work and strengthen resources in CapMan's own and externally contracted commercial projects. These resources secure our prerequisites for success and build even better service and added value for the real estate projects entrusted to us by investors and our customers.

Markku Hietala Head of CapMan Real Estate

Where do we invest?

CapMan_2osa_fglENG.indd 65 20.2.2008 11:51:35

fi nished real estate and property development targets in Finland
investment size typically €5–50 million, bigger investments are also possible
diversifi cation by size, geographical focus and the tenants' line of business

CapMan Plc's 80 per cent owned subsidiary Realprojekti Oy acts as advisor for the private equity real estate funds managed by CapMan and practices real estate consulting.

Realprojekti specialises in real estate investments, development services, marketing services, project management, construction contracting services and property asset management. Realprojekti's customers include large property owners, property developers, municipalities and state institutions. The company has particularly strong experience in shopping centre projects and commercial leasing.

Realprojekti's leading market position, professional team and comprehensive contact network provide an important competitive advantage for CapMan's real estate operations. Its expertise is strongly utilised in the activities of all of CapMan's real estate funds.

Property development customised to the leaseholders' needs in Kalevankatu 20.

CHANGES DURING CAPMAN'S INVESTMENT PERIOD: 58 VIEWINGS DURING THE YEAR 6 NEW LEASE AGREEMENTS

CapMan_2osa_fglENG.indd 66 20.2.2008 11:51:36

CapMan invested in the property located at Kalevankatu 20 in Helsinki center in January 2007, and the property underwent an extensive renovation during the year. The large-scale project has been concluded by CapMan's Real Estate team and the property has been fully occupied with new tenants. Samuli Koskela, Partner at Lexia Law Offi ces Oy and Kalle Myllymäki, Manager at CapMan Real Estate are pleased with the transformation at Kalevankatu.

Why was Kalevankatu 20 acquired to CapMan's real estate portfolio?

Kalle Myllmäki: Kalevankatu 20 was an excellent fi t to CapMan Real Estate I fund's investment focus. The property was vacant at the time of investment, in a fair condition and featured a prime location. Previously occupied by a single tenant, the property did not meet the standards of offi ce premises today. In other words, it was an excellent property development target in which we could utilise the skill base of our entire Real Estate team.

How did you implement the value creation plan?

KM: Our most important goal was to bring the lobby and other common areas up to a good condition as soon as possible. We designed the premises to be leased by several enterprises. Our leasing team organised viewings with potential tenants and agreed on the customised renovation work that they required for their premises. The renovation work itself was headed by Project Manager Juhani Erke, who has solid expertise in demanding reconstruction and overhaul projects.

Why did Lexia choose Kalevankatu 20 as its business address?

Samuli Koskela: Our former premises had become too small and impractical, so we searched the Helsinki central district for new offi ces through the spring of 2007. The qualities that really set Kalevankatu 20 apart were the central location and the suitability of the fi fth fl oor offi ces for our purposes. Our entire staff is located on the same fl oor and there is room for the company to grow in future.

What changes were made to Lexia's premises?

SK: All of the interior surfaces were completely renovated. The premises were originally in poor condition, but we saw that as an opportunity to make radical improvements instead of being an obstacle. Our offi ces are a part of the Lexia brand, so we used our own designers to ensure that we found the right solutions.
KM: The entire building underwent a massive transformation. Lexia's offi ces are a good example of how outdated offi ces can be upgraded to meet the corporate needs of today. In making the renovations we tried to keep the premises as fl exible as possible, so that future large-scale changes would not be necessary for example with an increase in the company's personnel.

How did the renovation work proceed and what is your opinion of the end result?

SK: The renovations proceeded exceptionally well, even though the schedule was extremely tight. In just three months after signing the lease we had already moved into our new offi ces on Kalevankatu. Without CapMan's expert project management the renovations would certainly have been drawn-out much longer than the original plan. As a bonus, the location has proven to be even better than we fi rst thought. All in all we have been very pleased with our new offi ce solution.
KM: On behalf of the Real Estate team I am also pleased to say that the project went very smoothly, as the tenants had thought out their needs very well in advance and both parties were ready to be fl exible. We successfully adhered to the schedule and the end result is a highly modern offi ce in functional premises customised for Lexia.

The property was vacant at the time of investment. What is its vacancy rate now?

CapMan_2osa_fglENG.indd 67 20.2.2008 11:51:39

KM: We had a lot of interest in the premises following their complete renovation. All of the offi ce premises are now fully let to long-term tenants, and we are adding the fi nishing touches to the property at present.

Key information on investment

CapMan's initial investment

January 2007

Lettable area 3,318 m2

CapMan Real Estate I's ownership

100%

Real Estate executives

Kalle Myllymäki (investment)
Juhani Erke (renovation)
Norma Holmberg (leasing)

Investment Activities

CapMan's role in Kalevankatu 20
Custom renovation of premises to meet the needs of tenants.
Active leasing operations.

Real Estate investments

As at the end of 2007, the Real Estate team had made a total of 38 investments in properties or property development targets all over Finland. The current portfolio comprised 16 investments at year-end, of which one is an opportunistic property with a high risk/return profi le and the remainder are value added properties with a medium-level risk/return profi le. The properties had a vacancy rate of 6.8 per cent in 2007 and the average lease term was 10.4 years.

CapMan Real Estate I's investment focus

commercial properties in the Helsinki metropolitan area
medium risk/return profi le, focus on value added properties
investments in selected core and opportunistic properties are also possible

CapMan RE II's investment focus

property development targets in Finland
focus on commercial properties and logistics projects in particular
also offi ce premises, industrial properties, hotels, residential projects and public administrative premises
selectively investments in fi nished properties

Distribution of €462.1 million committed capital in 2007

23% Logistics

50% Turku

13% Mäntsälä

11% Espoo 10% Helsinki 10% Vantaa 3% Hämeenlinna 2% Jyväskylä 1% Tampere

New real estate investments in 2007

CapMan Real Estate I fund

Property: Kiinteistö Oy Kalevankatu 20 Address: Kalevankatu 20, Helsinki Built: 1967

Property: Mastolan keskusvarasto Address: Kanervatie 6, Vantaa Built: 1987, some parts subsequent

Property: Kiinteistö Oy Elimäenkatu 9A and 9B Address: Elimäenkatu 9A and 9B, Helsinki Built: 1926 and 1974

CapMan_2osa_fglENG.indd 68 20.2.2008 11:51:39

Property: Kauppakeskus Entresse Address: Espoo centre Built: under construction

Property: Kiinteistö Oy Ludviginkatu 3–5 Address: Ludviginkatu 3–5, Helsinki Built: 1891

Built: 1987

Kiinteistö Oy Malminkaari 9 Address: Malminkaari 9, Helsinki

Kiinteistö Oy Lönnrotinkatu 20 Address: Lönnrotinkatu 20,

Property:

Helsinki Built: 1972

Property: Kiinteistö Oy Parolantie 104 Address: Parolantie 104, Hämeenlinna Built: 1979

Built: 1965

Property: Kiinteistö Oy Viinikankatu 49 Address: Viinikankatu 49, Tampere Built: 1968

Property: Kauppakeskus Skanssi Oy Address: Turku Built: under construction

Property: Tokmannin logistiikkakeskus Address: Isolammintie, Mäntsälä Built: under construction

CapMan_2osa_fglENG.indd 69 20.2.2008 11:52:04

Property: Kiinteistö Oy Ylistönmäentie 33 Address: Ylistönmäentie 33, Jyväskylä Built: 1991

Property: Kiinteistö Oy Kristiinankatu 8 Address: Kristiinankatu 8, Turku Built: 1969

Property: Kiinteistö Oy Yliopistonkatu 22 Address: Yliopistonkatu 22, Turku Built: 1977

Construction of Skanssi shopping centre is progressing according to schedule and the centre will be completed in April 2009. The premises are already more than half leased to retailers including Citymarket, Aleksi 13, Top-Sport, Tiimari and Lindex.

Skanssi Shopping Centre

CapMan RE II fund's fi rst investment targets Parolantie 104 and Kasarminkatu 4 in Hämeenlinna extended CapMan's real estate portfolio outside the greater Helsinki area. The fund has focus on property development targets in Finland and made investments, among others, in Jyväskylä, Mäntsälä and Tampere in 2007.

Parolantie 104 and Kasarminkatu 4

Real Estate exits

CapMan's Real Estate I fund sold a portfolio of 22 properties to an international investor consortium at the end of 2006. The transaction was fi nalised in January 2007.

Exits by risk/return profi le €304.4 million at acquisition cost

Exits in 2007

Value added

Core

23% Core

17% Opportunistic

60% Value added

Property: Luonteisrinne 4 Investment year: 2005 Opportunistic

Property: Pakkalanrinne Kiinteistö Oy Investment year: 2005

Property: Henry Fordinkatu 6 Investment year: 2006

Property: Niittykumpu 4 Kiinteistö Oy Investment year: 2005

Property: Vantaan Sampotalo Kiinteistö Oy Investment year: 2005

Investment value at exit*

200 150 100 50 0 100 134 Time of initial investment Time of exit

Key figures on Real Estate exits 31 January 2007

CapMan_2osa_fglENG.indd 70 20.2.2008 11:52:19

22 properties in the Helsinki metropolitan area, average holding period 1.7 years
Gross lettable area 154,309 m2
Vacancy rate 3.2 per cent, change of about –1.8 per cent during CapMan's investment period
Average lease term 4.5 years
Number of leases 262, about 60 new leases were signed during CapMan's investment period

CapMan Real Estate is an active owner in its real estate assets.

Norma Holmberg Marketing Manager

Kalle Myllymäki, Manager, Real Estate Investments

Lea Jokinen, Director, Real Estates

Fund Director, Deputy Managing Director of Realprojekti Oy

Lea

Tuija Fräntilä, Manager, Real Estates

CapMan_2osa_fglENG.indd 71 20.2.2008 11:52:19

Ann-Lis Lubitz Administrative Assistant

Hanna-Mari Raitanen Marketing Assistant

Mervi Roiha-Muilu Analyst

Mervi

Hanna-Mari

Jukka Iivari, Chairman of CapMan Real Estate Ltd, Industrial Advisor

Markku Hietala, Senior Partner, Head of CapMan Real Estate, Managing Director of Realprojekti Oy

Mika Matikainen, Manager, Real Estate Investments

Michael Ekström Leasing Manager

Heidi Lepäntalo CFO, CapMan Real Estate

The Real Estate Consulting team has responsibility for various real estate projects from land use planning and commercial survey to the implementation of construction contracting, leasing and property maintenance. The team is divided into three subteams, which are Real Estate Development Services team, Commercial team and Construction Contracting team.

Petri Rignell, Advisor

Jorma

Pertti Myllymäki Senior Consultant

Pertti

Petri

Marjo Kankaanranta Shopping Centre Manager

Heikki Liukkonen Project Manager

Noora Viranko, Project Engineer

Tuire Nyberg, Shopping Centre Manager

Johanna Harjunmaa Shopping Centre Assistant

Jorma Konsti Chief of Project Management

Jukka Mertanen, Project Manager

Juhani Erke Project Manager

Matti Karlsson, Shopping Centre Director

Liisa Nikkanen Shopping Centre Consultant

Mika Heiska, Project Manager

Tommi Seppänen Consultant

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Kirsi Keskitalo Shopping Centre Consultant

Markku Hietala, Senior Partner, Head of CapMan Real Estate, Managing Director of Realprojekti Oy

Jorma Kajander, Project Manager

We believe in integrity and transparency. We are a reliable partner and we respect our stakeholders. We want to be an example of high ethics.

CAPMAN AS AN INVESTMENT 1

INVESTMENT ACTIVITIES 35

CORPORATE GOVERNANCE AND FINANCIAL STATEMENTS

Corporate Governance 74 Board of Directors 76 Management Group 78 Report of the Board of Directors 81 Consolidated Balance Sheet (IFRS) and Income Statement (IFRS) 86 Consolidated Statement of Changes in Equity (IFRS) and Cash Flow Statement (IFRS) 87 Notes to the Consolidated Financial Statements 88 Parent Company Income Statement (FAS) and Company Balance Sheet (FAS) 99 Parent Company Cash Flow Statement (FAS) and Notes to the Parent Company Financial Statements (FAS) 100 Signatures to the Report of the Board of Directors and Financial Statements and Auditor's report 104 Calculation of Key Figures and Glossary 105 Summary of CapMan's Releases in 2007 107 Information for Shareholders 108

CapMan_2osa_fglENG.indd 73 20.2.2008 11:52:41

Corporate Governance

CapMan Plc complies with the recommendation for Corporate Governance of Listed Companies issued by Helsinki Exchanges, the Finnish Central Chamber of Commerce and the Confederation of Industry and Employers on 2 December 2003. The Board of Directors of CapMan Plc is responsible for verifi cation of the Group's principles on corporate governance. CapMan's corporate governance principles are described in full in the Company's website www.capman.com.

GROUP STRUCTURE

The CapMan Group is comprised of CapMan Plc and its subsidiaries and associated companies. The most significant subsidiaries are CapMan Capital Management Ltd, CapMan Real Estate Ltd, CapMan AB, CapMan Invest A/S, CapMan Norway AS, CapMan (Guernsey) Ltd, CapMan Mezzanine (Guernsey) Ltd, CapMan (Guernsey) Buyout VIII GP Ltd, CapMan (Guernsey) Life Science IV GP Ltd, CapMan (Guernsey) Technology 2007 Limited and Realprojekti Oy, which act as fund management and/or advisory companies for Group funds making direct investments in portfolio companies or in real estate assets. The voting power in all subsidiaries is 100 per cent owned by CapMan Plc with the exception of CapMan Real Estate Ltd and Realprojekti Oy, of which CapMan Plc owns 80 per cent. The most signifi cant associated company is Access Capital Partners S.A., which is 35 per cent owned by CapMan Plc.

OPERATIVE ORGANISATION

CapMan provides management and advisory services in two main business areas: CapMan Private Equity (funds making investments in portfolio companies) and CapMan Real Estate (private equity real estate funds making investments in real estate assets and real estate consulting). Investments by CapMan funds investing in portfolio companies focus mainly on the Nordic countries in three investment areas, which are middle market buyouts (CapMan Buyout), technology investments (CapMan Technology) and life science investments (CapMan Life Science). The investment focus of CapMan's real estate funds is on real estate targets in Finland.

The Group has nominated teams for each investment area. The teams are responsible for identifying new investment targets, making investments, supporting value creation of portfolio companies or real estate assets and carrying out exit projects. The Group has three service teams (Investor Services, Internal Services and Human Resources) responsible for the Group's and funds' fi nances and administration, fundraising, fund product development, performance monitoring, investor relations (fund investors and CapMan Plc's shareholders), communications, legal matters, corporate governance, business development and HR management.

ANNUAL GENERAL MEETING

The highest power of decision is the Annual General Meeting (AGM) of CapMan Plc, where the shareholders can exercise their rights to speak and vote. The Board of Directors convenes the AGM annually, no later than the end of May. The AGM decides on the tasks specifi ed by the law and CapMan's Articles of Association, which are presented on the Company's website at www.capman.com.

Invitation to the AGM is published in at least one national newspaper determined by the Board of Directors no earlier than three months and no later than 17 days prior to the AGM. The proposals of the Board of Directors to the AGM are presented in the invitation.

The candidates for the Board of Directors who have been notifi ed to the Board are disclosed prior to the AGM, provided that the candidates have given their written consent to the election and are supported by at least 10 per cent of the total votes attached to the shares of the Company. In addition, the proposal of the Board concerning the Company's auditor is published prior to the Meeting.

In the absence of exceptional reasons for nonattendance, it is the Company's objective that all of the members of the Board, candidates for election to

CapMan_2osa_fglENG.indd 74 20.2.2008 11:52:41

the Board and the CEO shall be present at the AGM.

BOARD OF DIRECTORS Duties and responsibilities

The duties and responsibilities of the Board of Directors are determined for the main part by the Finnish Companies Act. The Board is responsible for the administration and proper organisation of the Company's operations and decides upon exceptional or far-reaching matters, taking into account the extent and quality of the Company's operations. Examples of such matters include the adoption of Group business strategy and approval of large investments of CapMan Plc. The Board has general authority to render decisions on all of those company matters which, on the basis of the law or the Articles of Association, are not stipulated to be decided or carried out by another executive body. In addition to the tasks set forth by the law the Board has confi rmed a charter for Board work. It includes:

1. An annual review program ensuring
that the Group has
proper strategic goals
identifi ed the major risks and has a program for their management
suffi cient compliance control of important areas identifi ed by the Board, and
proper corporate values.
1. An annual self-evaluation of Board performance.

The Chairman of the Board is responsible for overseeing that the Board fulfi ls the tasks specifi ed by the law and the Articles of Association.

The composition and term, members of the Board and their independence of the Company and remuneration are described on page 76 and in more detail on the Company's website www.capman.com.

The CEO and Deputy CEO of CapMan Plc, their duties and responsibilities as well as remuneration is described on page 78 and in detail on the Company's website at www.capman.com.

OTHER MANAGEMENT

Management Group

The Management Group of CapMan Plc is responsible for the preparation of proposals on matters relating to CapMan Group's business to the CEO and Board of Directors. The composition of the Management Group, and the responsibilities, background information and remuneration of its members are presented on page 78 and in more detail on the Company's website at www.capman.com.

Investment Committees

CapMan also has Investment Committees, which are comprised of the CEO, Senior Partners and Partners of the Company, for its funds. The Investment Committees make investment presentations and proposals on new investments and exits from portfolio companies to the funds' Advisory Boards, and are not involved in managing the operational activities of the Company. The CEO or persons appointed by the CEO act as chair of the funds' Investment Committees. The Chairmen are CEO Heikki Westerlund (CapMan Equity VII and CapMan Buyout VIII funds), Lennart Jacobsson (CapMan Technology 2007 fund), Jan Lundahl (CapMan Life Science IV fund) and Jukka Iivari (CapMan Real Estate I and CapMan RE II funds).

Insider issues

CapMan Plc complies with the guidelines for insiders

issued by the Helsinki Stock Exchange that entered into force on 1 January 2006. CapMan has supplemented the general guidelines with its own set of internal insider guidelines, which are in part stricter than the general guidelines. The public insider registers are regularly distributed to permanent insiders for inspection. The Group's Senior Legal Counsel is responsible for insider issues.

The public insiders of CapMan Plc are the members of the Board of Directors, the CEO, Deputy CEO, members of Management Group and auditors including the auditor in charge, in accordance with the Securities Market Act. In addition, the company specifi c insider register includes the CEO's Executive Assistant, CFO, Chief Accountant, Financial Controller, Performance Monitoring Offi cers, Communications Director and Legal Counsels. The insider register for CapMan Plc is held by the Finnish Central Securities Depository Ltd. A list of CapMan Plc's insiders and their holdings of shares and stock options is updated monthly on the Company's website at www.capman. com.

Employees of CapMan Group are not permitted to trade Company shares or stock options without the permission of the CFO. Trading is completely forbidden in the fourteen-day period prior to publication of the Company's fi nancial results.

Auditor

CapMan shall have one auditor (a public accountant company or auditor) approved by the Central Chamber of Commerce, in accordance with the Company's Articles of Association. The auditor is elected by the AGM for a one-year term, which terminates at the closing of the following AGM. CapMan Plc's auditors PricewaterhouseCoopers Oy and auditor in charge Mr Jan Holmberg, Authorised Public Accountant, are

CapMan_2osa_fglENG.indd 75 20.2.2008 11:52:42

responsible for guiding and coordinating the auditing work of the entire Group.

In accordance with the decision by the AGM, the auditor shall be remunerated as per the amount invoiced. The auditor's remuneration for the 2007 fi nancial year amounted to €128,000.

Risk management and internal control and audit

Clear fi nancial and other operational objectives are specifi ed for all of CapMan's teams. CapMan has an internal code of practice and risk management program for the achievement of set objectives and minimisation of associated risks. Major risks are published, provided that the information does not contain confidential information pertaining to CapMan's business.

The CFO acting as the Head of Internal Services is responsible for drafting and updating an internal control program, which also covers the statutory control of the funds and their activities. The aim of the internal control program is to ensure that:

authorisations for effecting payments in the Group and funds are clearly defi ned
authorisations for entering into undertakings on behalf of the Group are clearly defi ned
the Group and funds comply with their related obligations.

The major risks associated with CapMan's business are the failure of fundraising and the resignation of key personnel from the Company. Successful fundraising depends in the long-term on successful investment and exit activities, which in turn largely depend on the professional expertise of the personnel. CapMan strives to minimise the risks and maximise the returns associated with investments by means of deliberate investment strategies and criteria, a phased investment decision-making process and a welldiversified portfolio of investee companies. Additionally, CapMan participates actively in the business development of its portfolio companies to manage risks and grow returns, for example through work on the companies' Boards of Directors.

Investor Relations and Communications

CapMan's IR and Communications teams serve the Company's various stakeholder groups by giving information about CapMan's strategy, operations, objectives and business environment in a way that will give the correct picture of CapMan as an investment and partner.

The Company's releases, Annual Reports and share-related information can be viewed on the Company's website at www.capman.com.

Board of Directors

The members of the Board of Directors are elected by the Annual General Meeting for a one-year term, which commences at the closing of the Meeting and continues until the closing of the following AGM. The Board elects the Chairman and the Vice Chairman among themselves.

According to the Articles of Association the Board of Directors comprises between three and nine members, who do not have deputy members. The members of the Board are Ari Tolppanen (Chairman), Teuvo Salminen (Vice Chairman), Sari Baldauf, Tapio Hintikka, Lennart Jacobsson and Urban Jansson. Personal and background information on Board members is presented on CapMan's website at www. capman.com.

In 2007 the AGM resolved to pay monthly compensation of €3,500 to the Chairman and €3,000 to the Vice Chairman and other members of the Board. Compensation is not paid to those Board members who are employed by CapMan Group. The total remuneration paid to the members of the Board in 2007 was €136,500. Members of the Board may also be remunerated for Board work with stock options in accordance with the decision of the AGM.

The Board met eight times in 2007 and the average participation rate of its members was 100 per cent.

With respect to the size of the Company and its Board of Directors, the Board of CapMan Plc has decided not to establish any committees. However, the Board has decided to pay special attention in its own work to risk management, external auditing and internal control.

The majority of members of the Board (Sari Baldauf, Tapio Hintikka, Urban Jansson and Teuvo Salminen) are independent of CapMan Plc. Lennart Jacobsson and Ari Tolppanen are not independent of the Company, as they are employed by CapMan Group as well as major shareholders in the Company.

The duties and responsibilities of the Board of Directors are outlined under Corporate governance on page 74.

The share and stock option ownership fi gures are as at 31 December 2007. CapMan Partners B.V., which is owned by the Senior Partners of CapMan, owned 3,000,000 A shares and 2,000,000 B shares. The Senior Partners of CapMan own the majority of their shares through corporations under control.

Ari Tolppanen, (b. 1953) M.Sc. (Eng.)

Chairman of the Board since 31 March 2005. Member of the Board since 1993, CapMan Senior Partner, CEO of CapMan Plc between 1989– 31 March 2005. Joined CapMan in 1989.

Key positions of trust:

Access Capital Partners S.A. (Chairman of the Supervisory Board), OneMed Group Oy (Chairman), Å&R Carton AB.

CapMan Plc shares and options:

1,220,200 A shares 7,418,720 B shares

CapMan_2osa_fglENG.indd 76 20.2.2008 11:52:42

Teuvo Salminen, (b. 1954)

M.Sc. (Econ.), Authorised Public Accountant Vice Chairman of the Board since 31 March 2005. Member of the Board since 2001, Deputy CEO of Jaakko Pöyry Group Oyj.

Key positions of trust: YIT Corporation.

CapMan Plc shares and options: 20,000 B shares

Sari Baldauf, (b. 1955) M.Sc. (Bus. Adm.), D.Sc. (Tech.) h.c., D.Sc. (Econ. and Bus. Adm.) h.c. Member of the Board since 2007.

Key positions of trust:

F-Secure Corporation, Hewlett-Packard Company, SanomaWSOY (Vice Chairman), YIT Corporation, International Youth Foundation, Savonlinna Opera Festival Ltd (Chairman), The Finnish Cultural Foundation (member of the Board of Trustees), Daimler AG (member of the Supervisory Board).

CapMan Plc shares and options:

Tapio Hintikka, (b. 1942) M.Sc. (Eng.) Member of the Board since 2004.

Key positions of trust: Aina Group Oyj (Chairman), Evli Bank Plc, Teleste Corporation (Chairman).

CapMan Plc shares and options:

Lennart Jacobsson, (b. 1955) BBA Member of the Board since 2002. CapMan Senior Partner. Joined CapMan in 1995.

Key positions of trust: Gammadata Holding AB, Xlent AB, Ascade AB.

CapMan Plc shares and options: 1,129,217 B shares

CapMan_2osa_fglENG.indd 77 20.2.2008 11:52:43

Urban Jansson, (b. 1945) Higher bank degree Member of the Board since 2006.

Key positions of trust: Siemens AB (Chairman), Tylö® (Chairman), Ahlström Corporation, Plantasjen A/S, SEB AB.

CapMan Plc shares and options: 20,000 B shares

Management Group

The Management Group of CapMan Plc is responsible for the preparation of proposals on matters relating to CapMan Group's business to the CEO and Board of Directors.

The Board of Directors elects the CEO and Deputy CEO of CapMan Plc. The CEO leads and oversees the Company's operations in accordance with the instructions and orders set forth by the Companies Act and the Board of Directors. As a rule, the CEO is independently responsible for deciding and implementing matters concerning the Company's operational activities and ordinary business. In 2007, the CEO of CapMan Plc was Heikki Westerlund and the Deputy CEO was Olli Liitola.

In 2007, CEO Heikki Westerlund received salary and other remuneration totalling €349,461 and Deputy CEO Olli Liitola received €183,976. The salaries and remuneration paid to the Management Group in 2007 totalled €2,050,615.

Personal and background information on the CEO and Deputy CEO as well as on the members of the Management Group is presented on CapMan's website at www.capman.com.

Heikki Westerlund, (b. 1966) M.Sc. (Econ.) CEO of CapMan Plc, Senior Partner. Joined CapMan in 1994.

Key positions of trust: LUMENE Group.

CapMan Plc shares and options:

CapMan_2osa_fglENG.indd 78 20.2.2008 11:52:46

258,020 A shares 2,718,260 B shares Kaisa Arovaara, (b. 1970) M.Sc. (Econ.) CFO of CapMan Plc, Head of Internal Services. Joined CapMan in 2006.

Key positions of trust:

–

CapMan Plc shares and options:

6,000 B shares 80,000 2003B options

Jerome Bouix, (b. 1971) M.Sc. (Econ.) Head of Investor Services, Senior Partner. Joined CapMan in 2000.

Key positions of trust: European Private Equity and Venture Capital Association (EVCA).

CapMan Plc shares and options: 50,000 2003B options

Markku Hietala, (b. 1957) LL.M. Head of CapMan Real Estate, Managing Director of Realprojekti Oy, Senior Partner. Joined CapMan in 2005.

Key positions of trust:

–

CapMan Plc shares and options: 181,818 B shares

Kai Jordahl, (b. 1960) M.Sc. (Econ.) Deputy Head of CapMan Buyout, Senior Partner. Joined CapMan in 2004.

Key positions of trust: Cardinal Foods AS (Chairman), Curato AS (Chairman), OneMed Group Oy.

CapMan Plc shares and options: 50,000 2003B options

Hilkka-Maija Katajisto, (b. 1967) M.Sc. (Econ.) HR Director Joined CapMan in 2007.

Key positions of trust:

–

CapMan Plc shares and options:

CapMan_2osa_fglENG.indd 79 20.2.2008 11:52:50

Olli Liitola, (b. 1957) M.Sc. (Eng.)

Key positions of trust:

796,564 A shares 1,982,520 B shares

Pretax Oy.

Deputy CEO of CapMan Plc,

CapMan Plc shares and options:

Senior Partner. Joined CapMan in 1991.

Torben von Lowzow, (b. 1962) M.Sc. (Eng.) Partner Joined CapMan in 2007.

Key positions of trust:

Gudme Raaschou Bank A/S, Danish Securities Dealers Association, Copenhagen Stock Exchange (member of the Advisory Board), Kredsen Mars og Merkur Danmark, British Import Union.

CapMan Plc shares and options:

Jan Lundahl, (b. 1954) B.Sc. (Econ.) Head of CapMan Life Science, Senior Partner. Joined CapMan in 1997.

Key positions of trust: ProstaLund AB.

CapMan Plc shares and options: 839,217 B shares

Petri Niemi, (b. 1961) M.Sc. (Eng.) Head of CapMan Technology, Senior Partner. Joined CapMan in 1999.

Key positions of trust: Mawell Oy.

CapMan Plc shares and options: 267,920 B shares 15,748 2003B options

Tuomo Raasio, (b.1958) LL.M. Head of CapMan Buyout, Senior Partner. Joined CapMan in 1988.

Key positions of trust: Finnish Broadcast Company, StaffPoint Oy.

CapMan Plc shares and options: 680,663 A shares 3,080,873 B shares

CapMan_2osa_fglENG.indd 80 20.2.2008 11:52:55

Petri Saavalainen, (b. 1965) M.Sc. (Eng.) Development Director, Senior Partner. Joined CapMan in 1995.

Key positions of trust: Foreca Oy, Tieturi Oy.

CapMan Plc shares and options:

44,553 A shares 882,663 B shares

Martti Timgren, (b. 1955) LL.M. Head of Fund Administration, Senior Legal Counsel. Joined CapMan in 2003.

Key positions of trust:

–

CapMan Plc shares and options: 25,000 2003B options

Report of the Board of Directors

BUSINESS

CapMan is an alternative asset manager and its core business is private equity fund management and advisory services. The funds under management invest mainly in unlisted Nordic companies or real estate assets. CapMan Plc's income derives from management fees from the funds, carried interest from funds generating carried interest, returns on direct fund investments made from CapMan Plc's own balance sheet, and returns on real estate consulting.

CAPMAN PLC'S BUSINESS AREAS

CapMan has two business areas: CapMan Private Equity (management of private equity funds making investments in portfolio companies) and CapMan Real Estate (management of private equity funds making real estate investments and providing real estate consulting). The funds investing in portfolio companies focus mainly on the Nordic countries in three investment areas: middle market buyouts (CapMan Buyout); technology investments (CapMan Technology); and life science investments (CapMan Life Science). The private equity real estate funds focus on real estate targets mainly in Finland and Sweden.

Information about each business area is reported in its own segment in interim reports. The associated company Access Capital Partners has been included in the Group's fi gures under CapMan Private Equity. As far as funds are concerned, Access Capital Partner's fi gures are presented separately.

TURNOVER AND FINANCIAL PERFORMANCE IN 2007

CapMan's turnover in 2007 increased to €51.6 million (2006: €38.0 million), mainly as a result of the growth in carried interest income.

The amount of management fees paid by the funds, €24.6 million (€24.9 million), remained at the level of the previous year. CapMan started receiving management fees from CapMan Technology 2007 and CapMan RE II funds during the review period, whereas the amount of fees received from older funds decreased due to exits implemented during the year.

Carried interest income received by CapMan totalled €23.6 million (€9.4 million). The sale of CapMan Real Estate I fund's portfolio accrued carried interest totalling €21.0 million, of which the share belonging to the parent company shareholders was €13.4 million. The remaining €2.6 million was accrued from carried interest received from other funds generating carry.

The impact of fund investments made from CapMan's own balance sheet totalled €6.2 million (€4.4 million). Realised returns on the investments were €0.5 million (€0.9 million), and fair value gains/losses relating to fund investments were €5.7 million (€3.5 million). Fair value losses were recorded in the last quarter due to valuation changes of certain individual investments and expenses incurred by new funds. As a whole the fair value of fund investments has developed favourably in 2007 and their return exceeds CapMan Plc's targeted annual return level of 15%. The aggregate fair value of all fund investments made from CapMan's own balance sheet was €44.2 million at 31 December 2007.

Returns on real estate consulting operations totalled €2.1 million (€2.0 million) and other operating income within turnover was €0.8 million (€0.8 million). Operating expenses were €27.7 million (€26.6 million). The slight increase in expenses refl ects the organisation's growth in 2007. The cost level in 2008 is expected to increase somewhat from the cost level in the last quarter of 2007 as a result of the establishment of CapMan Hotels RE fund.

The Group's operating profi t was up to €29.8 million (€15.6 million). The share from the associated companies' result increased to €1.9 million (€1.3 million) mainly with value creation in the portfolios of the Maneq funds, which are included in CapMan's associated companies. Profi t before taxes was €32.7 million (€17.3 million) and profi t after taxes €24.2 million (€12.4 million). Profi t attributable to the parent company shareholders was €18.6 million (€11.5 million), representing earnings per share of €0.24 (€0.15). The

CapMan_3osa_fglENG.indd 81 19.2.2008 17:59:36

preliminary fi gures for earnings per share announced on 16 January 2008 were more closely defi ned with exact fi gures from associated company Access Capital Partners.

Carried interest income and fair values of fund investments may fl uctuate strongly between quarters and therefore CapMan's fi nancial performance should be examined over a longer time span than quarterly.

BALANCE SHEET AND FINANCIAL POSITION AT 31 DECEMBER 2007

The amount of non-current assets in the balance sheet increased to €74.9 million during the fi nancial year (€57.1 million at 31 December 2006). Fund investments from CapMan's own balance sheet increased and their fair value at year-end was €44.2 million (€33.1 million). Long-term receivables amounted to €16.2 million (€13.8 million). Of the receivables, €11.6 million (€10.1 million) was loan receivables from the Maneq funds. Maneq funds are co-investors in portfolio companies with the funds managed by CapMan, and their investors are CapMan and CapMan's personnel. Goodwill was €4.8 million (€4.8 million) and it was mainly allocated to the acquisition of Swedestart Management AB in 2002. The Company's net cash assets including current investments were €34.6 million (€16.9 million). The Company had interest-bearing liabilities worth €16.0 million (€11.9 million).

CapMan's equity ratio at the end of the fi scal year was 57.6% (71.6%). Return on equity for the period was 38.9% (23.4%) and return on investment 44.2% (29.9%). The Company has target levels of at least 50% for the equity ratio and over 25% for return on equity.

Key fi gures

	31.12.2007	31.12.2006
Earnings/share, €	0.24	0.15
Earnings/share, diluted, €	0.24	0.15
Shareholders' equity/
share, €	0.86	0.74
Share issue adjusted
number of shares	78 142 867	76 212 849
Number of shares
at year-end	79 968 819	77 158 698
Number of shares
outstanding	79 968 819	77 158 698
Return on equity, %	38.9	23.4
Return on investment, %	44.2	29.9
Equity ratio, %	57.6	71.6

PROPOSAL OF THE BOARD OF DIRECTORS FOR PROFIT DISTRIBUTION

CapMan Plc's objective is to distribute at least half of the net profi t in dividends. The Board of Directors proposes to the Annual General Meeting that a dividend of €0.16 per share (€0.12), which equals to 67% (80%) of the net profi t, will be distributed to shareholders for the year 2007.

FUNDRAISING

Funds investing in portfolio companies

On 9 February 2007 CapMan established a new technology fund CapMan Technology 2007, which has investment focus on expansion and later stage technology companies in the Nordic countries. Commitments totalling €140.3 million had been raised to the fund as at the end of 2007 and the fund held a fi nal close in January 2008 at €142.3 million. CapMan's own commitment to the fund is €15 million, and division of any carried interest generated by the fund will be 50% for CapMan and 50% for the Technology team.

CapMan Life Science IV fund held a fi nal close in May at €54 million. The fund invests in medical technology companies mainly in the Nordic countries. CapMan's own commitment to the fund is €10 million and the division of any carried interest generated by the fund will be 50% for CapMan and 50% for the Life Science team.

Real estate funds

The CapMan RE II fund reached its maximum investment capacity of €600 million on 31 March 2007. The aim is to fi nance an average 75% of the fund's investments with debt, in which case the €600 million investment capacity comprises €150 million of shareholders' equity with the remainder being debt fi nancing. The investment focus of CapMan RE II is on property development targets in Finland. The fund's management company CapMan RE II GP Oy has an investment commitment of €2 million to the fund. CapMan Plc's share of any carried interest from CapMan RE II is 60% and the combined share of the Real Estate investment team and Corintium Oy, the management company's other owner, is 40%.

Capital under management

As at 31 December 2007, CapMan managed a total of €3,016.1 million in capital (€2,549.6 million at 31 December 2006). The capital under management in funds making direct portfolio investments in companies increased during the year as a result of fundraising for CapMan Technology 2007 and CapMan Life Science IV funds and amounted to €1,916.1 million (€1,773.6 million) at year-end. The capital under management in real estate funds increased during the year as a result of fundraising for CapMan RE II, and amounted to €1,100 million at 31 December 2007 (€776 million at 31 December 2006).

Capital under management by associated company Access Capital Partners

The capital under management by CapMan Plc's associated company Access Capital Partners increased substantially in 2007 and totalled €2,326.5 million at year-end (€1,637.5 million at 31 December 2006). Of this, €1,164.5 million (€918.1 million) was in the funds of funds and €1,162.0 million (€719.4 million) in private equity investment mandates. The assets were increased especially during the second half when Access received a €300 million private equity investment mandate from the French government's pension fund and established a fourth-generation buyout fund of funds ACF IV Growth Buy-out Europe. The size of the fund was €241.0 million as at 31 December 2007 and fundraising continues.

CapMan Plc owns 35% of the share capital in Access Capital Partners. The shares are valuated in the balance sheet at acquisition cost.

INVESTMENTS AND EXITS BY FUNDS IN 2007 Funds investing in portfolio companies

In 2007 the funds made 11 new investments and addon investments worth €164.7 million in total. New investment targets include Curato AS, Global Intelligence Alliance Group Ltd, IT2 Treasury Solutions, KMW Energi AB, Komas Oy, Mawell Oy, Mirasys Ltd, Movial Applications Oy, Nacka Närsjukhus Proxima AB, Skandia Autologistics Oy and Walki Group Oy. In addition, a substantial add-on investments in OneMed Group Oy and Metallfabriken Ljunghäll AB were announced during the year.

The funds exited from a total of seven companies in 2007, including Avitec AB, Copterline Oy, Distocraft Oy, LindPlast A/S, Medianorth Group Corporation, Savcor Group and Synerco AB, and sold their shares in Affecto Plc and SysOpenDigia Plc. In addition, the funds made a partial exit from Moventas Corporation and Infl ight Service AB repaid its mezzanine and equity loans. The acquisition costs of exits executed during the year (including mezzanine loan instalments and partial exits) totalled €93.2 million. The funds also announced exits from Secgo Software Oy, Hantro Products Ltd and Solid Information Technology Oy in 2007.

Real estate funds

The Real Estate funds announced 16 new investments or investment decisions in 2007. Of these, 13 were in completed properties and three in properties under construction. Six of the completed properties are located in Helsinki, two in Hämeenlinna, two in Turku, one in Jyväskylä, one in Tampere and one in Vantaa, and they are all mostly offi ce properties. The properties under construction are Entresse shopping centre in Espoo, Tokmanni's logistics centre in Mäntsälä and Skanssi shopping centre in Turku. Investments totalling €160.0 million were made during the fi scal year and the funds have additionally committed a total of €302.1 million to fi nance the aforementioned real estate acquisitions and projects in the next few years.

CapMan Real Estate I fund exited from a total of 22 properties when the sale of the fund's real estate portfolio to Samson Properties Ltd, The Royal Bank of Scotland (RBS) and Ajanta Oy was fi nalised on 31 January 2007. The acquisition price of the portfolio was €304.4 million and the sale price €377.5 million.

Investments and exits at acquisition cost, M€

		1–12/2007	1–12/2006
New and follow-on investments
Funds investing
in portfolio companies	164.7		158.8
Buyout		126.7		127.8
Technology		28.6		16.8
Life Science		9.4		14.2
Real estate funds	160.0		78.7
Total	324.7		237.5

Exits*
Funds investing
in portfolio companies	93.2		173.8
Buyout		74.1		144.7
Technology		19.1		24.7
Life Science		-		4.4
Real estate funds	304.4		-
Total	397.6		173.8

* Includes partial exits and mezzanine loan instalments.

STATUS OF CAPMAN FUNDS AS AT 31 DECEMBER 2007

CapMan_3osa_fglENG.indd 82 19.2.2008 17:59:36

Funds investing in portfolio companies

Investments in portfolio companies at acquisition price totalled €640.6 million at the end of the year. The fair value of the investments was €792.2 million. The fund's portfolios are valued at fair value in compliance with EVCA's guidelines.

Excluding actual and estimated expenses, CapMan funds had an investment capacity of some €690 million for new and follow-on investments in portfolio companies. Of this, some €470 million is reserved for buyout investments (including mezzanine investments), some €175 million for technology investments, and about €45 million for life science investments.

Real estate funds

At the end of 2007 the funds' investments in real estate assets at acquisition price totalled €160.0 million and the fair value of investments was €160.5 million. The portfolio is wholly comprised of assets acquired during 2007. The vacancy rate of the portfolio's completed properties was 8.2% at year-end. As at 31 December 2007 the funds had also committed a total of €302.1 million to fi nance real estate acquisitions and projects over the next few years. The funds have an investment capacity of some €340 million for new real estate investments.

Funds' gross portfolio as at 31 December 2007, M€*

			Share
	Portfolio at	of the portfolio
	acquisition Portfolio at
	cost	fair value	(fair value)
	M€	M€	%
Funds investing
in portfolio companies	640.6	792.2	83.2
Real estate funds	160.0	160.5	16.8
Total	800.6	952.7	100.0

Funds investing in portfolio companies

Total	640.6	792.2	100.0
Life Science	42.2	39.6	5.0
Technology	114.7	104.5	13.2
Buyout	483.7	648.1	81.8

* Gross portfolio of all portfolio companies and real estate assets managed by CapMan funds.

As a result of the real estate portfolio sale that was realised in January 2007 and the short holding period of the current real estate portfolio, the proportional share of real estate targets in the gross portfolio of all funds managed by CapMan is at a low level.

FUNDS GENERATING CARRIED INTEREST AS AT 31 DECEMBER 2007

A private equity fund begins to generate carried interest after the investors have regained their investment and generate a preferred annual return, usually 7–8%. During the year CapMan Real Estate I and Finnventure V funds began to generate carried interest, and of these funds CapMan Real Estate I is still in the active investment phase. At the end of 2007 the following funds were in carry:

		Portfolio
	CapMan's	at fairvalue
	share of	31.12.2007
	cash fl ows*	M€
Finnventure II and III
and Finnmezzanine II B
funds in total:	20–35%	2.8
Finnventure Fund V:	20%	54.5
Fenno Program (Fenno Fund,
Skandia I and II) in total:	10–12%	11.7
CapMan Real Estate I:	25%	92.5**

* Net share of cash fl ows, taking into consideration Fenno Management Oy's share as far as Fenno Program is concerned and Corintium Oy's and the investment team's shares as far as CapMan Real Estate I is concerned.

** The fund still continues active investment operations. Of the portfolio at fair value, €56.1 million is fi nanced with debt.

The current portfolios of funds generating carried interest amounted to €161.5 million at fair value, which is 17.0% of the total fair value of all portfolio funds at 31 December 2007 (€952.7 million). Information about each fund's investment targets is presented on CapMan's website at www.capman.com/En/InvestorRelations/ Funds.

CapMan's share of carried interest received from funds generating carry is generally 20–25% of a fund's cash fl ow in respect of funds that were established before 2004, and 10–15% with respect to newer funds. The lower carried interest percentage for newer funds results from a share of the carried interest being distributed to the members of the investment team who have been responsible for the funds' investment activities during the funds' life cycle (generally 10 years), in accordance with common practice in the private equity investment industry.

CAPMAN'S OWN INVESTMENTS IN THE FUNDS

Since 2002 CapMan Plc has been a substantial investor in the funds managed by the Group. The Company invests from its own balance sheet about 5–10% of the total capital in equity funds that invest in portfolio companies. The aim of investing in own funds is to improve the Company's return on equity and to even out fluctuations in income with returns from these investments. The investments made have been valued at fair value in accordance with EVCA guidelines. There may be quarterly variations in fair value gains/losses due to changes in the value of investment targets as well as to realised exits and the expenses incurred by funds.

CapMan, like other investors, gives commitments to the funds when they are established. As at 31 December 2007 the total sum of current investments at fair value and remaining commitments was €100.2 million (€83.6 million at 31 December 2006), of which remaining commitments totalled €56.0 million (€50.5 million). Of these, €23.2 million is allocated to the CapMan Buyout VIII fund, €12.4 million to the CapMan Technology 2007 fund and the remainder mainly to the CapMan Life Science IV, CapMan Mezzanine IV, CapMan Equity VII and Access Capital Fund II funds. The commitments will be drawn down gradually within the next 3–5 years as new investments are made. Fund investments for the year totalled €15.4 million (€13.2 million). The majority of investments were made in CapMan Buyout VIII fund. The fair value of cumulative fund investments made from CapMan's own balance sheet was €44.2 million (€33.1 million) at year-end.

CapMan's investments and commitments in the funds as at 31 December 2007, M€

	Investments	Remaining
	at fair value	commitments Total
Funds investing in
portfolio companies
Equity funds	33.7	47.1	80.8
Mezzanine funds	2.3	4.5	6.8
Funds of funds*	7.7	2.2	9.9
	43.7	53.8	97.5

Real estate funds	0.5	2.2	2.7
Total	44.2		56.0 100.2

* Managed by CapMan's associated company Access Capital Partners.

CapMan's own investments in the funds, M€

	1–12/2007	1–12/2006
Funds investing in portfolio companies
Equity funds	13.0	9.8
Mezzanine funds	1.5	0.7
Funds of funds*	0.3	2.6
Total	14.8	13.1

Real estate funds	0.6	0.1
Total	15.4	13.2

* Managed by CapMan's associated company Access Capital Partners.

PERSONNEL

CapMan_3osa_fglENG.indd 83 19.2.2008 17:59:36

As at 31 December 2007 CapMan had 110 (98) employees, of whom 86 (72) were located in Finland and the remainder in the other Nordic countries.

31.12.2007	31.12.2006
37	38
30	24
25	21
18	15
110	98

Six Senior Advisors also acted as consultants for CapMan. Five of the Senior Advisors were located in Finland and one in Denmark. In addition to the Senior Advisors, CapMan's Nordic Advisor Network comprises 15 Industrial Advisors.

CHANGES IN GROUP MANAGEMENT

CapMan Plc announced changes in the Group's management and organisation on 20 September 2007. Kaisa Arovaara was appointed as CFO of CapMan Plc and member of the Management Group responsible for the new Internal Services team, which comprises the Group's fi nances and administration as well as IT and offi ce functions. Senior Partner Olli Liitola continues as Deputy CEO, to whom CapMan Real Estate reports. Jerome Bouix was nominated as a Senior Partner and he transferred to head the new Investor Services team, which is responsible for the Group's fundraising, fund administration, investor relations, communications and product development. Torben von Lowzow was nominated as a Partner and member of the Management Group. Senior Partner Kai Jordahl, Group HR Director Hilkka-Maija Katajisto and Senior Legal Counsel Martti Timgren were also appointed as members of the Management Group. All of the changes came into effect on 1 October 2007.

CHANGES IN GROUP OWNER SHIP

The owners of the Company's A series shares sold a total of 3,000,000 CapMan Plc A shares and 2,000,000 CapMan Plc B shares to the newly established company CapMan Partners B.V. in the share transactions that were announced on 4 May 2007 and executed on 16 May 2007. CapMan Partners B.V. is owned by corporations under control of the Senior Partners of CapMan with equal shares. In connection with the same transaction, the Board of Directors of CapMan Plc approved an application for the conversion of a total of 2,000,000 unlisted CapMan Plc A shares entitling to voting rights into listed CapMan Plc B shares. Due to these share transactions and conversions, CapMan Partners B.V. became the second largest shareholder and the largest holder of voting rights in CapMan Plc. A total of seven statutory notices of changes were issued in May with respect to these share transactions.

CapMan Plc issued a fl agging announcement in late November, when the holding of US-based Legg Mason Inc. had surpassed one-twentieth (5%) of the Company's share capital as a result of a share transaction concluded on 20 November 2007.

CapMan Plc had 4,489 shareholders (5,103 shareholders) at the end of 2007. The number of shareholders has declined from the previous year while the proportion of foreign and nominee registered shareholders (excluding the 6.3% holding of CapMan Partners B.V.) has increased from 30.8% to 35.9%.

BOARD AND MANAGEMENT HOLDINGS

As of 31 December 2007 the members of the Board of Directors, the CEO and Deputy CEO of CapMan Plc own a total of 15,563,501 A and B shares, which represent 19.5% of shares and 26.9% of votes, both directly and through corporations under control. In addition CapMan Partners B.V., a corporation under authority of the CEO and Deputy CEO, owns 3,000,000 A shares and 2,000,000 B shares in CapMan Plc.

SHARE CAPITAL AND SHARES

CapMan Plc's share capital totalled €771,586.98 at the end of the fi nancial year. The Company had 73,968,819 listed B shares and 6,000,000 unlisted A shares. B shares have one (1) vote each and A shares ten (10) votes each. There was a fall in the number of A shares from 8,000,000 to 6,000,000 shares during the year, when former Senior Partners of the Company executed a conversion of A shares into B shares. In addition to the share conversion, there was a rise in the number of B shares by 2,810,121 shares in the subscription of B shares with 2000A/B and 2003A stock options.

REDEMPTION OBLIGATION CLAUSE

A shareholder whose share of the entire share capital of the Company or votes produced by the shares reaches or exceeds 33.3% or 50% has, at the request of other shareholders, the obligation to redeem his or her shares and related securities in accordance with the Articles of Association of CapMan Plc.

SHARE TRADING AND MARKET CAPITALISATION

The trading volume of B shares increased by nearly 50% compared to the previous year and the value of shares traded almost doubled. Trading volume totalled 30,873,119 shares (21,162,823 shares in 2006) and trading value €107.0 million (€58.3 million). The highest trading price during the year was €4.07 (€3.15), the lowest €2.86 (€2.33) and volume weighted average price was €3.49 (€2.74). The closing price was €3.25 at year-end (€3.02).

The Company had a market capitalisation of €240.4 million (€208.9 million) on 31 December 2007 and the Company's total market value, including CapMan A shares, was €259.9 million (€233.0 million).

STOCK OPTIONS PROGRAMS

2003A stock options:

A total of 454,188 2003A stock options, listed in October 2006, were traded during 2007. The number of 2003A stock options issued is 625,000 pieces and the share subscription period ends on 31 October 2008. A total of 49,428 B shares in CapMan Plc had been subscribed for with the stock options 2003A in 2007. The share subscription price, €70,187.76, has been recorded in the Company's invested unrestricted shareholders' equity.

2003B stock options:

2003B stock options were listed on OMX Nordic Exchange Helsinki on 1 October 2007. The number of 2003B stock options issued is 625,000 pieces each with entitlement to subscribe to one CapMan Plc B share. The share subscription price will be recorded in the Company's invested unrestricted shareholders' equity. No shares in CapMan Plc had been subscribed for with the stock options 2003B in 2007.

2000A/B stock options:

Stock option program 2000 expired on 31 October 2007. The scheme originally included 5,270,000 stock options with entitlement to subscribe an equivalent number of CapMan Plc B shares. A total of 2,760,693 B shares in CapMan Plc were subscribed with the stock options 2000A/B in 2007 and the share subscription price, €1,656,415.80, was recorded in the Company's invested unrestricted shareholders' equity. All in all, 5,055,943 B shares in CapMan Plc were subscribed for with the stock options 2000A/B.

GROUP MANAGEMENT AND AUTHORISATIONS OF THE BOARD OF DIRECTORS

The members of the Board of Directors of CapMan Plc are elected by the AGM for a one-year term, which continues until the closing of the following AGM. In 2007, the AGM elected the following persons to the Board: Sari Baldauf, Tapio Hintikka, Lennart Jacobsson, Urban Jansson, Teuvo Salminen and Ari Tolppanen.

The Board of Directors elects the CEO and Deputy CEO of CapMan Plc. The retirement age and retirement benefi ts for the CEO and Deputy CEO are specifi ed according to the statute on employee pensions. The term of notice for the CEO, Deputy CEO and the Company is 12 months, during which time the normal monthly salary is paid. In 2006, Heikki Westerlund acted as CEO and Olli Liitola as his deputy.

The AGM held on 29 March 2007 authorised the Board of Directors to decide on issuing a maximum of 20,000,000 new CapMan Plc B shares or to issue stock options and other entitlements. In addition, the AGM authorised the Board of Directors to decide on repurchasing a maximum 8,000,000 CapMan Plc B shares by using the Company's unrestricted shareholders' equity. Both authorisations shall expire on 30 June 2008, and they and not been exercised as of 31 December 2007.

CapMan_3osa_fglENG.indd 84 19.2.2008 17:59:36

OTHER EVENTS IN 2007

In the last quarter of 2007 CapMan Plc sold its 20% holding in Baltcap Management Oy to company management. The sale does not impact on CapMan Plc's result for 2007 or on the effective carried interest agreements of Baltcap's Baltic Investment Fund III and Baltic SME Fund. CapMan continues to co-manage the aforementioned funds with Baltcap Management Oy and Evli Bank Plc after the transaction.

EVENTS AFTER THE REVIEW PERIOD

On 18 January 2008 CapMan Plc established CapMan Hotels RE Ky, a private equity real estate fund investing in hotel real estate. The fund reached €835 million at fi rst closing and the maximum fund size is €1,100 million. In connection with its establishment, the fund acquired a portfolio of 39 hotels with a transaction value of €805 million from Northern European Properties Ltd (NEPR).

17 Finnish institutions have committed €292 million of equity into the fund to date, with the balance comprising senior debt. The fund is open to new investors for twelve months and the maximum amount of equity capital will be €400 million.

CapMan Hotels RE Oy, which is 80% owned by CapMan Plc and 20% owned by Corintium Oy, acts as CapMan Hotels RE Ky's management company. The management company's own commitment into the fund is €5 million. The establishment of the fund is estimated to have a slightly positive impact on CapMan's result for 2008.

FUTURE OUTLOOK

Market and investment activities

Private equity investment in Europe is expected to show growth in the mid-term and long-term, as institutional investors and other substantial investor groups have added private equity investment to their investment allocations. In addition private equity investment has consolidated its position in fi nancing M&A and growth, and its growth in the Nordic countries is further accelerated by consolidation in various sectors, family successions, privatisation of public services and functions, the strong contribution of R&D in the technology and life science sectors and increasing entrepreneurial activity. Real estate market growth is speeded up by accelerated structural change, in which particularly pension companies transfer real estate investments from their balance sheets into funds.

CapMan will continue to implement its Nordic investment strategy as far as the funds investing in portfolio companies are concerned. The turmoil in fi nancial markets which labelled the second half of 2007 has not been directly visible in CapMan private equity's investment activities so far. Banks have continued to fi nance M&A in CapMan's market segment of middle market buyout transactions. Based on our experience the markets have returned to so-called normal levels as far as enterprise values and debt ratios are concerned, following a couple of highly aggressive and active years. The number of new potential investee companies has remained at a good level and there are attractive opportunities for syndicated investments in technology and life science sectors. Turbulence in fi nancial markets has also not been visible in exit markets thus far, but a deepening of instability may refl ect on the funds' exits by postponing realisations.

The local presence of CapMan's Buyout, Technology and Life Science teams across the Nordic countries enables the active searching for investee companies throughout the Nordic region, and the teams have comprehensive resources for value creation in portfolio companies via active work on the companies' Boards of Directors. CapMan is in a good position to continue as a proactive player in the private equity market, as its funds making investments in portfolio companies have approximately €690 million in capital for new and followon investments.

The instability in fi nancial markets has been visible in real estate markets towards the end of the year as a slightly weaker liquidity, and in Finland overall sales volumes for 2007 are expected to fall to some extent from the previous year. Rising interest rates and banks' increasing reluctance to grant loans will impact on competition and property values in the industry, and we see that the use of equity in real estate transactions will increase. High prices will still be paid for good core targets in future, whereas a rise in yield requirements is expected in more opportunistic targets. Leasing activity and demand for offi ce and retail properties have been strong. There are many new projects under construction, which will have an effect on the supply of premises especially in the offi ce segment.

CapMan's private equity real estate funds have adequate personnel resources, a competitive structure and aggregate investment capacity of some €340 million for seeking good investment targets and developing the current portfolio. The resources, combined with the team's reliability and fl exibility, have provided the funds with lots of investment opportunities. We anticipate that the establishment of our new hotel real estate fund in January 2008 will further strengthen our market position, and we believe that individual properties that suit our funds' investment focuses will also be available in the future and will enable our funds to achieve their targets.

CapMan Plc Group

CapMan's strategy is to exploit growth opportunities within the alternative asset class. In addition to CapMan's existing business lines (Private Equity and Real Estate) the alternative asset class includes, among others, infrastructure investment, forestry investment and active public market funds. CapMan is at present exploring opportunities to expand geographically into Russia and to establish a fund investing in public markets based on CapMan's value creation expertise. We aim to concretise the projects during 2008.

Management fees and returns on real estate consulting operations cover CapMan's fi xed expenses. The Group's result for 2008 will depend on how many new exits are made by funds already generating carried interest; on whether new funds transfer to carry; and on

CapMan_3osa_fglENG.indd 85 19.2.2008 17:59:36

how the value of investments develops in those funds in which CapMan is a substantial investor. According to our understanding CapMan Equity VII A, B and Sweden funds, Finnventure Fund IV and Finnmezzanine III A and B funds will begin to generate carry during 2008 and 2009. The funds have several exit processes underway.

We expect that our portfolio companies and real estate assets will develop favourably in 2008. However the prevailing unstable situation in fi nancial markets may refl ect, as a result of the changes in listed peers' valuations, on the fair value of the funds' investment targets and hence also refl ect on the fair value of the Group's fund investments in 2008.

Consolidated Balance Sheet (IFRS)

€ ('000)	Note	31.12.2007	31.12.2006
ASSETS
Non-current assets
Tangible assets	10	819	672
Goodwill	11	4 845	4 845
Other intangible assets	12	1 001	710
Investments in associated companies	13	3 407	2 860
Investments at fair value through profi t and loss	14
Investments in funds		44 230	33 122
Other fi nancial assets		878	848
Receivables	15	16 191	13 835
Deferred tax assets	16	3 547	231
		74 918	57 123
Current assets
Trade and other receivables	17	7 837	5 521
Other fi nancial assets at fair value	18	14 857	2 779
Cash and bank		19 741	14 137
		42 435	22 437
Total assets		117 353	79 560
EQUITY AND LIABILITIES
Capital attributable to the equity holders of the Company	19
Share capital		772	772
Share premium account		38 968	38 968
Other reserves		2 961	1 218
Translation difference		133	316
Retained earnings		24 676	15 074
		67 510	56 348
Minority interest		34	599
Total equity		67 544	56 947
Non-current liabilities
Deferred tax liabilities	16	3 734	2 234
Interest-bearing loans and borrowings	20	16 000	10 000
Other liabilities	21	701	430
		20 435	12 664
Current liabilities
Trade and other payables	22	21 356	7 409
Interest-bearing loans and borrowings	23	0	1 944
Current income tax liabilities		8 018	596
		29 374	9 949
Total liabilities		49 809	22 613
Total equity and liabilities		117 353	79 560

CapMan_3osa_fglENG.indd 86 19.2.2008 17:59:36

Consolidated Income Statement (IFRS)

€ ('000)	Note	1.1.–31.12.2007	1.1.–31.12.2006
Turnover	2	51 572	38 032
Other operating income	3	236	687
Personnel expenses	4	-15 381	-13 958
Depreciation and amortisation	5	-581	-726
Other operating expenses	6	-11 783	-11 958
Fair value gains/losses of investments		5 696	3 549
Operating profi t		29 759	15 626
Financial income and expenses	7	1 070	420
Share of associated companies' result		1 915	1 279
Profi t before taxes		32 744	17 325
Income taxes	8	-8 509	-4 893
Profi t for the fi nancial year		24 235	12 432
Attributable to:
Equity holders of the Company		18 620	11 455
Minority interest		5 615	977
Earnings per share for profi t attributable to the equity holders of the Company:
Earnings per share, €	9	0.24	0.15
Earnings per share, diluted, €	9	0.24	0.15
Operating profi t, %		57.7	41.1

Consolidated Statement of Changes in Equity (IFRS)

Attributable to the equity holders of the Company

€ ('000)	capital Share	premium account Share	reserves Other	Translation difference	Retained earnings	Total	Minority interest	equity Total
Equity at 31 December 2005	759	38 157	948	-148	9 156	48 872	220	49 092
Share subscriptions with options Translation difference Options Profi t for the fi nancial year Dividends paid	13	811	270	464	-222 11 455 -5 315		9 977 -607
Equity at 31 December 2006		772 38 968	1 218		316 15 074 56 348			599 56 947
Equity at 31 December 2006	772	38 968	1 218	316	15 074	56 348	599	56 947
Share subscriptions with options Translation difference Options Profi t for the fi nancial year Dividends paid			1 726 17	-183	223 18 620 -9 259		5 615 -6 222
Other changes Equity at 31 December 2007		772 38 968	2 961		18 133 24 676 67 510		42	34 67 544

Consolidated Cash Flow Statement (IFRS)

€ ('000)	1.1.–31.12.2007	1.1.–31.12.2006
Cash fl ow from operations
Profi t for the fi nancial year	24 235	12 432
Adjustments	239	-625
Change in working capital	5 662	889
Interest paid	-704	-127
Interest received	918	901
Dividends received	812	57
Taxes paid	-2 137	-2 379
Cash fl ow from operations	29 025	11 148
Cash fl ow from investments
Investments in tangible and intangible assets	-1 018	-337
Investments in funds and other placements	-5 896	-9 184
Proceeds from sale of tangible assets	91	55
Cash fl ow from investments	-6 823	-9 466
Cash fl ow from fi nancing activities
Share issue	1 726	889
Long-term loan receivables granted	-9 111	-7 185
Repayment of long-term loans	6 552	5 201
Proceeds from borrowings	16 000	11 944
Repayment of loans from fi nancial institutions	-10 000	0
Dividends paid	-9 687	-5 923
Other fi nancial assets at fair value	-12 078	683
Cash fl ow from fi nancing activities	-16 598	5 609
Change in cash and cash equivalents	5 604	7 291
Cash and cash equivalents at start of year	14 137	6 846
Cash and cash equivalents at end of year	19 741	14 137
Change in working capital:
Change in current non-interest-bearing receivables	-1 923	159
Change in current trade payables and other non-interest-bearing liabilities	7 585	730
	5 662	889

CapMan_3osa_fglENG.indd 87 19.2.2008 17:59:37

Notes to the Consolidated Financial Statements

1. ACCOUNTING PRINCIPLES

CapMan Plc ("CapMan") is a public limited company incorporated and domiciled in Helsinki, Finland. CapMan's core business is private equity fund management and advisory services. The funds under management invest mainly in unquoted Nordic companies or real estate assets.

The Group's fi nancial statements for 2007 have been prepared in accordance with International Financial Reporting Standards (IFRS) in conformity with the IAS and IFRS standards and SIC and IFRIC interpretations in force at 31 December 2007. The information in these fi nancial statements is presented in thousands of euros.

Basis of preparation

The Consolidated Financial Statements include the accounts of all Group companies and associated companies excluding inoperative subsidiaries. Subsidiaries are enterprises in which the Group has the control (the Group acquires or has the power over more than one half of the voting rights or it has the power to govern the operating and fi nancial policies of the other enterprise as a result of a statute). Subsidiaries are consolidated from the date on which control of the net assets and operations of the enterprise is effectively transferred to CapMan for acquired subsidiaries, and to the date when CapMan's control has expired for divested subsidiaries. Subsidiaries have been consolidated to the Group Financial Statements in accordance with the purchase method of accounting. For subsidiaries acquired on or subsequent to 1 January 2004, the excess acquisition cost over the Group's interest in the fair value of the net assets acquired at the acquisition date is recognised as goodwill. All intercompany transactions, intercompany receivables and liabilities as well as intra-Group dividends have been eliminated.

Minority interests are presented separately in the income statement and within equity in the consolidated balance sheet. A share of accumulated loss is separated only to the extent the defi cit is covered by minority shareholdings.

Associated companies

The associated companies have been consolidated in accordance with the equity method. An associated company is an entity in which the Group has signifi cant influence (more than 20% of the voting rights), but does not have the control. Under the equity method, the investment in the associate is carried in the balance sheet at cost plus post-acquisition changes in the Group's share of the company's net assets less any impairment in value. The Group's share (based on its holding) of the associated companies' net profi t for the fi nancial period has been reported under fi nancial items.

Translation difference

The result and fi nancial position of each of the Group's business units are measured in the currency of the primary economic environment for that unit ("functional currency"). The Consolidated Financial Statements are presented in euros, which is the functional and presentation currency of the Group's parent company.

Transactions in foreign currencies have been recorded in the functional currency at the rates of exchange prevailing at the date of the transactions; in practice a reasonable approximation of the actual rate of exchange on the date of the transaction is often used. Foreign exchange differences for operating business items are recorded in the appropriate income statement account before operating profi t and for fi nancial items are recorded in fi nancial income and expenses. The Group's foreign currency items have not been hedged.

The fi nancial statements of foreign subsidiaries have been translated into euros at the average year-end exchange rate. The same exchange rate has been used in translating the income statement and the balance sheet, as the change caused by exchange rate fl uctuations has been assumed to be minimal. Translation differences caused by changes in exchange rates for the cumulative shareholders' equity of foreign subsidiaries have been recognised in shareholders' equity.

When a subsidiary is wholly or partially divested, the cumulative amount of the translation differences is recognised in the income statement under profi t or loss. Translation differences arising prior to 1 January 2004 have been recorded under the translation differences fund, and the exemption allowed by the IFRS 1 standard has not been used.

As of 1 January 2004, the goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition of that foreign operation have been treated as part of the assets and liabilities of the foreign operation and translated into euros at the year-end exchange rate. For acquisitions before 1 January 2004 the goodwill and fair value adjustments have been recorded in euros.

Tangible non-current assets

Tangible non-current assets have been reported in the balance sheet at their acquisition value less depreciation according to plan. Assets are amortised on a straight-line basis over their estimated useful lives. The estimated useful lives are:

Machinery and equipment	4–5 years
Other long-term expenditure	5 years

The residual values and useful lives of assets are reviewed at each balance sheet date and adjusted to refl ect changes in the expected economic benefi ts as necessary.

Goodwill

CapMan_3osa_fglENG.indd 88 19.2.2008 17:59:37

Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the acquired enterprise (subsidiary or associated company) over the Group's interest in the net fair value of the identifi able assets, liabilities and contingent liabilities at the date of acquisition. Goodwill arising from acquisitions prior to 1 January 2004 is recognised as the carrying value at cost in accordance with accounting principles applicable at the date of acquisition.

Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. Intangible assets are recognised in the balance sheet only if the cost of the asset can be measured reliably and it is probable that the future economic benefi ts that are attributable to the asset will fl ow to the Group. Intangible assets acquired in business combinations that are classifi ed as acquisitions are recognised in the balance sheet separate to goodwill, provided that they meet the defi nition of intangible assets and the cost of the assets can be measured reliably. Intangible assets are expensed in the income statement by the straight-line method over their useful lives (maximum ten years). The carrying amount is assessed for impairment whenever there is an indication that the intangible asset may be impaired.

Impairment of assets

The Group reviews all assets for indications that the value of an asset may be impaired at each balance sheet date. If such indications exist, the recoverable amount of the asset in question is estimated. The recoverable amount is also measured annually independent of indications of impairment for the following assets: goodwill, intangible assets with indefi nite useful lives and intangible assets not yet available for use.

The need for impairment is assessed on the level of cash-generating units, in other words at the smallest identifi able group of assets that is largely independent of other units and cash infl ows from other assets. The recoverable amount is the fair value of an asset less costs to sell or value in use. The value in use refers to the expected future net cash fl ow projections, which are discounted to the present value, received from the asset in question or the cash-generating unit. The discount rate used in measuring value in use is the rate that refl ects current market assessments of the time value of money and the risks specifi c to the asset. Impairment is recorded directly in the income statement as an expense. The recoverable amount for fi nancial assets is either the fair value or the present value of expected future cash fl ows discounted by the initial effective interest rate.

An impairment loss is recognised whenever the recoverable amount of the asset is below the carrying amount, and it is recognised in the income statement immediately. An impairment loss of a cash-generating unit is fi rst allocated to reduce the carrying amount of any goodwill allocated to the cash-generating unit and then to reduce the carrying amounts of the other assets of the unit pro rata. An impairment loss is reversed if there is an indication that an impairment loss may have decreased and the carrying amount of the asset has changed from the recognition date of the impairment loss.

The increased carrying amount due to reversal is not more than what the depreciated historical cost would have been if the impairment had not been recognised. Reversal of an impairment loss for goodwill is prohibited. An impairment loss of an equity investment that has been classifi ed as an available-for-sale fi nancial asset is also not reversed through profi t and loss. In accordance with IAS 39 the receivables carried at amortised cost accrue interest income at the discount rate used to measure impairment after impairment has been recognised.

The carrying amount of goodwill is reviewed for impairment annually or more frequently if there is an indication that goodwill may be impaired, due to events and circumstances that may increase the probability of impairment.

Financial instruments

The Group's fi nancial instruments have been classifi ed according to the IAS 39 standard (amended in 2004) Financial Instruments: Recognition and Measurement into the following categories:

1) fi nancial assets at fair value through profi t and loss,
2) held-to-maturity investments,
3) loans and other receivables, and
4) available-for-sale fi nancial assets.

Classifi cation is made on the basis of the purpose of the acquisition of financial instruments at the time of initial recognition. Transaction costs have been reported in the initial cost of fi nancial assets, excluding items valued at fair value through profi t and loss. All purchases and sales of fi nancial instruments are recognised on the trade date. An asset is eligible for derecognition and removed from the balance sheet when the Group has transferred the contractual rights to receive the cash fl ows or when it has substantially transferred all of the risks and rewards of ownership of the asset outside of the Group.

The fi nancial assets at fair value through profi t and loss group has been divided into two subcategories:

1) held for trading, and
2) upon initial recognition designated as at fair value through profi t and loss.

Financial assets are classifi ed as held for trading if they are acquired principally for the purpose of generating a profi t from short-term fl uctuations in price and fi nancial assets with a maturity less than 12 months are included in current assets. The fair value of investments that are actively traded in organised financial markets is determined by reference to quoted market bid prices at the close of business on the balance sheet date. Both unrealised and realised gains and losses caused by changes in fair value are reported in the income statement for the fi nancial period in which they arise.

Available-for-sale fi nancial assets

Available-for-sale financial assets are measured at fair value using market values at the balance sheet date. In case there is no market price available at the balance sheet date, the fair value is determined using recent arm's length transactions, reference to the current market value of another instrument that is substantially the same, or discounted cash fl ow analysis. Most of the available-for-sale fi nancial assets are fund investments, for which fair value is calculated by using the guidelines of the European Private Equity & Venture Capital Association (EVCA) valuation principles and, taking into account the valuation principles in IAS 39 for the fair value of investments that are not quoted in an active market, using multiples based on the current performance level of the portfolio companies. Investments for which fair value cannot be reliably estimated are valued at cost less any permanent impairment losses.

Loans and other receivables

Loans and other receivables include the Group's fi nancial assets arising from the transfer of cash or services to a debtor. Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not quoted in an active market. Loans and receivables are reported in current and non-current fi nancial assets (the latter if their maturity exceeds 12 months) and are measured at amortised cost using the effective interest method in case of signifi cant deviation from the nominal rate. Gains and losses are recognised as income when the investments are derecognised or impaired. Impairment is recognised if there is objective evidence that the value of the item in question has been impaired at the balance sheet date.

Trade and other receivables

CapMan_3osa_fglENG.indd 89 19.2.2008 17:59:37

Trade receivables are carried at original invoice amount less an allowance for any uncollectible amounts. Provision is made when there is objective evidence that the Group will not be able to collect the debts under the original terms and conditions. The Placement Agent Fee relating to fundraising has been amortised over fi ve years.

Cash and cash equivalents

Cash and short-term deposits in the balance sheet comprise cash in banks and in hand and liquid shortterm deposits. Short-term investments to third party funds have been categorised as financial assets at fair value through profi t and loss and are presented in that category.

Financial liabilities are initially recognised at fair value on the basis of the consideration. Transaction costs are reported in the initial book value of the fi nancial liability. After initial recognition all financial liabilities are subsequently measured at amortised cost using the effective interest method. Financial liabilities are reported in non-current and current liabilities and they may be interest bearing or non-interest bearing.

Provisions

Provisions are recognised in case the Group has a present obligation (legal or constructive) as a result of a past event, and it is probable that an outfl ow will be required to settle the obligation and a reliable estimate can be made.

Pensions

The Group has defi ned contribution pension plans in accordance with the local regulations and practices of its business domiciles. Payments to defi ned contribution pension plans are charged to the income statement in the fi nancial period to which they relate. The pensions have been arranged through insurance policies of external pension institutions.

Employee benefi ts

The Group has applied IFRS 2 Share-based Payment standards to all stock option programs in which options have been granted after 7 November 2002, and to which rights have not been vested before 1 January 2005. Expenses on prior stock option programs have not been reported in the income statement. The fair value of stock options is assessed at the grant date and expensed in even instalments in the income statement over the vesting period of the rights. The fair value is determined using the Black & Scholes pricing model.

The Group offers a sabbatical program for key personnel based on the number of years of full-time work for the Company. The liability of the sabbatical has been estimated and recorded on the basis of probability.

Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefi ts will fl ow to the Group and the amount of revenue can be reliably measured. The following specifi c recognition criteria must also be met before revenue is recognised:

1. Management fees paid by the funds are accounted for on a straight-line basis over the agreement terms on an ongoing basis.
1. Carried interest received from the funds is accounted for when the portfolio company has been exited and the whole fund has entered into the carried interest phase. An exit has been closed when the approval has been received from the Competition Authority and when all signifi cant risks and benefi ts related to the portfolio company have been transferred to the buyer. Potential repayment risk to the funds (clawback) will be considered when assessing if the revenue recognition criteria have been fulfi lled, for example in the event that express or implied representations and warranties have been given by the vendor in the purchase and sale agreement, and if the whole fund is towards the end of its lifecycle or if a reversion under the attained hurdle rate is probable.
1. Realised returns on fund investments are recognised in the income statement within turnover either as returns on fund investments or alternatively they are included in fair value gains/losses of investments. Realised cash fl ows in those funds in which CapMan is a substantial investor are recognised in the balance sheet under investments, until the total capital is returned. The cash fl ow generated after the capital

has been returned is recognised in the income statement under returns on fund investments.

Consulting fees are recognised when the service has been rendered.

Income taxes

Tax expenses in the consolidated income statement comprise taxes on taxable income and changes in deferred taxes for the fi nancial period, Taxes on taxable income for the fi nancial period are calculated on the basis of the tax rate in force for the country in question. Taxes are adjusted on the basis of deferred income tax assets and liabilities from previous fi nancial periods, if applicable. The Group's taxes have been recognised during the fi nancial year using the average expected tax rate.

Deferred taxes are calculated on all temporary differences between the carrying amount and the tax base. Deferred taxes have only been recognised to the extent that it is probable that taxable profi t will be available against which the deductible temporary differences can be utilised. The largest temporary differences arise from the valuation of investments at fair value. Deferred taxes are not recognised for non-tax deductible amortisation of goodwill. Deferred taxes have been measured at the statutory tax rates that have been enacted by the balance sheet date.

Application of new and amended IFRS standards and IFRIC interpretations

The IASB has published the following standards and interpretations whose application will be mandatory in 2008 or later. The Group has not early adopted these standards, but will adopt them in later periods.

The following standards and interpretations will be adopted by the Group in 2008:

– IFRIC 11, 'IFRS 2 – Group and Treasury Share Transactions' provides guidance on whether sharebased transactions involving treasury shares or involving group entities should be accounted for as equity settled or cash-settled share-based payment transactions in the stand-alone accounts of the parent and group companies. This interpretation does not have any impact on the Group's fi nancial statements.

The following new standards and interpretations effective in 2008 are not relevant to the Group's operations:

IFRIC 12, 'Service Concession Arrangements' applies to contractual arrangements whereby a private sector operator participates in the development, fi nancing, operation and maintenance of infrastructure for public sector services.*
IFRIC 14, 'IAS 19 The Limit on a Defi ned Benefi t Asset, Minimum Funding Requirements and their Interaction' is applied to post-employment defi ned benefi t plans and other long-term defi ned benefit plans under IAS 19, if the plan includes minimum funding requirements. The interpretation also clarifi es the criteria for recognition of an asset on future refunds or reductions in future contributions.*

In 2009 the Group will adopt the following standards published by IASB:

IAS 1, 'Presentation of Financial Statements' (Revised) is aimed at improving users' ability to analyse and compare the information given in fi nancial statements by separating changes in equity of an entity arising from transactions with owners from other changes in equity. Management is assessing the impact of this revision on the fi nancial statements of the Group.*
Amendment to IAS 23, 'Borrowing Costs' requires an entity to capitalise borrowing costs directly attributable to the acquisition, construction or

CapMan_3osa_fglENG.indd 90 19.2.2008 17:59:37

production of qualifying asset as part of the cost of that asset. The option of immediately expensing those borrowing costs will be removed. Management is assessing the impact of this amendment on the fi nancial statements of the Group.*

IFRS 8, 'Operating Segments' replaces IAS 14, The new standard requires a 'management approach', under which segment information is presented on the same basis as that used for internal reporting purposes. The expected impact is still being assessed in detail by the management.
IFRIC 13, 'Customer Loyalty Programmes'. IFRIC 13 clarifi es that where goods or services are sold together with a customer loyalty incentive, the arrangement is a multiple-element arrangement and the consideration receivable from the customer is allocated between the components of the arrangement using fair values. IFRIC 13 is not relevant to the Group's operations because none of the Group's companies operate any loyalty programmes.*

In 2010 the Group will adopt the following standards published by IASB:

– IFRS 3, 'Business Combinations' (Revised). The revised standard continues to apply the acquisition method to business combinations, with some signifi cant changes. For example, all payments to purchase a business are to be recorded at fair value at the acquisition date, with some contingent payments subsequently remeasured at fair value through income. Goodwill may be calculated based on the parent's share of net assets or it may include goodwill related to the minority interest. All transaction costs will be expensed. Management is assessing the impact of this revision on the fi nancial statements of the Group.*

– IAS 27, 'Consolidated and Separate Financial Statements' (Revised). The revised standard requires the effects of all transactions with non-controlling interests to be recorded in equity if there is no change in control. They will no longer result in goodwill or gains and losses. The standard also specifi es the accounting when control is lost. Any remaining interest in the entity is remeasured to fair value and a gain or loss is recognised in profi t or loss. Management is assessing the impact of this revision on the fi nancial statements of the Group.*

* The revision, amendment or interpretation to published standards is still subject to endorsement by the European Union.

Standards, amendments and interpretations effective in 2007

The following standards, amendments and interpretations to published standards are mandatory in 2007:

IFRS 7, 'Financial Instruments: Disclosures' and the complementary amendment IAS 1, 'Presentation of Financial Statements – Capital Disclosures', introduces new disclosures relating to fi nancial instruments. It requires the disclosure of qualitative and quantitative information about exposure to risks arising from fi nancial instruments, including specifi ed minimum disclosures about credit risk, liquidity risk and market risk, including sensitivity analysis to market risk. The amendment to IAS 1 introduces disclosures about the level of an entity's capital and how it manages capital.
IFRIC 8, 'Scope of IFRS 2' requires consideration of transactions involving the issuance of equity instruments, where the identifi able consideration received is less than the fair value of the equity instruments issued in order to establish whether or not they fall within the scope of IFRS 2. This interpretation does not have any impact on the Group's fi nancial statements.

– IFRIC 10, 'Interim Financial Reporting and Impairment' prohibits the impairment losses recognised in an interim period on goodwill and investments in equity instruments and in fi nancial assets carried at cost to be reversed at a subsequent balance sheet date. This interpretation does not have any impact on the Group's fi nancial statements.

Standards, amendment and interpretations effective in 2007 but not relevant

The following standards, amendments and interpretations to published standards are mandatory in 2007 but they are not relevant to the Group's operations:

IFRIC 7, 'Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinfl ationary Economies';
IFRIC 9, 'Re-assessment of Embedded Derivatives'.

Use of estimates

The preparation of the fi nancial statements in conformity with IFRS standards requires the management of the Group to make estimates and assumptions in applying the accounting principles. These estimates and assumptions have an impact on the reported amount of assets and liabilities and disclosure of contingent liabilities in the balance sheet of the fi nancial statements and on the reported amounts of income and expenses during the reporting period. Estimates have substantial impact on the Group's operating result. Estimates and assumptions have been used in impairment of goodwill, intangible and tangible assets, in determining the useful economic lives and in reporting of deferred taxes, among others.

Leases

All of the Group's leasing arrangements are classifi ed as operating leases, as the risks and benefi ts of ownership remain with the lessor. Operating lease payments are recognised as an expense in the income statement on a straight-line basis.

2. SEGMENT INFORMATION

CapMan provides management and advisory services in two main business areas: funds making investments in portfolio companies (CapMan Private Equity) and private equity real estate funds making investments in real estate assets (CapMan Real Estate). Information on each business area is reported in its own segment below. CapMan has no secondary reporting segments.

Business areas

€ ('000)	CapMan Private	CapMan Real	Group
2007	Equity	Estate	total
Turnover	25 840	25 732	51 572
Operating profi t	9 484	20 275	29 759
Share of associated companies' result	1 915	0	1 915
Profi t for the fi nancial year	9 385	14 850	24 235
Assets	94 938	22 415	117 353
Investments in associated companies	3 407	0	3 407
Liabilities	27 989	21 820	49 809
Investments	811	207	1 018
Depreciation	560	21	581
2006
Turnover	33 116	4 916	38 032
Operating profi t	15 404	222	15 626
Share of associated companies' result	1 279	0	1 279
Profi t for the fi nancial year	12 242	190	12 432
Assets	78 584	976	79 560
Investments in associated companies	2 860	0	2 860
Liabilities	20 979	1 634	22 613
Investments	319	18	337
Depreciation	711	15	726

3. OTHER OPERATING INCOME

CapMan_3osa_fglENG.indd 91 19.2.2008 17:59:37

	2007	2006
Gains from sales of tangible assets	55	18
Gain from sale of Access Capital Partners' shares	0	604
Gain from sale of Baltcap Management Oy's shares	114	0
Other items	67	65
Total	236	687

4. PERSONNEL

	2007	2006
Wages and salaries	11 827	10 558
Pension expenses - defi ned contribution plans	2 276	2 046
Granted options	238	238
Other personnel expenses	1 040	1 116
Total	15 381	13 958

Personnel	2007	2006
CapMan Private Equity	37	38
CapMan Real Estate	30	24
Investor Services	25	21
Internal Services	18	15
Total	110	98

Personnel incentive schemes

The terms of the 2003 stock option program are presented in Table 28. Share-based payments.

5. DEPRECIATION AND IMPAIRMENT

	2007	2006
Depreciation by asset type
Intangible assets
Other intangible assets	303	305
Total	303	305

Tangible assets
Machinery and equipment	278	421
Total	278	421

Total depreciation and impairment	581	726

6. OTHER OPERATING EXPENSES

	2007	2006
Included in other operating expenses:
Other personnel expenses	1 238	890
Offi ce expenses	2 293	2 303
Travelling and entertainment	1 031	961
External services	2 709	3 026
Other operating expenses	4 512	4 778
Total	11 783	11 958

7. FINANCIAL INCOME AND EXPENSES

	2007	2006
Interest income, loan receivables	785	493
Interest income, deposits	760	72
Interest and fi nancial income, other	455	172
Exchange gains	0	8
Interest expenses/loans	-560	-105
Other interest and fi nancial expenses	-363	-193
Exchange losses	-7	-27
Total	1 070	420

8. INCOME TAXES

	2007	2006
Current income tax	-10 023	-2 913
Taxes for previous years	-204	8
Deferred taxes	1 718	-1 988
Total	-8 509	-4 893

The difference between income taxes at the statutory tax rate in Finland (26%) and income taxes recognised in the consolidated income statement is reconciled as follows:

Income taxes

	2007	2006
Profi t before taxes	32 744	17 325
Income taxes at Finnish tax rate on consolidated profi t before tax	8 513	4 505
Taxes for previous years	204	8
Effect of different tax rates outside Finland	104	245
Tax exempt income	-248	-49
Non-deductible expenses	31	414
Effect of consolidation	-95	-230
Income taxes in the consolidated income statement	8 509	4 893

9. EARNINGS PER SHARE

CapMan_3osa_fglENG.indd 92 19.2.2008 17:59:37

Earnings per share is calculated by dividing the distributable retained profi t for the fi nancial year by the average share issue adjusted number of shares, excluding shares that have been purchased by the Company and are presented as the Company's own shares.

	2007	2006
Attributable to the equity holders of the Company, € ('000)	18 620	11 455
Weighted average number of shares ('000)	78 143	76 213
Effect of options ('000)	776	4 085
Weighted average number of shares adjusted for the effect of dilution ('000)	78 919	80 280
Earnings per share, €	0.24	0.15
Earnings per share, diluted, €	0.24	0.15

Dividends paid and proposal for profi t distribution

A dividend of €0.12 per share, or a total of €9.3 million, was paid for the year 2006. The Board of Directors proposes to the Annual General Meeting to be held on 27 March 2008 that a dividend of €0.16 per share, corresponding to total profi t distribution of €12.8 million, be paid to shareholders for the year 2007.

10. TANGIBLE ASSETS

	2007	2006
Machinery and equipment
Acquisition cost at 1 January	2 127	2 122
Additions	464	201
Disposals	-227	-196
Acquisition cost at 31 December	2 364	2 127
Accumulated depreciation at 1 January	-1 572	-1 263
Accumulated depreciation in changes	185	112
Depreciation for the fi nancial year	-278	-421
Accumulated depreciation at 31 December	-1 665	-1 572
Book value on 31 December	699	555
Other tangible assets
Acquisition cost at 1 January	117	121
Additions/disposals	3	-4
Book value on 31 December	120	117
Tangible assets total	819	672

11. GOODWILL

	2007	2006
Acquisition cost at 1 January	7 271	7 271
Acquisition cost at 31 December	7 271	7 271
Accumulated impairment at 1 January	-2 426	-2 426
Accumulated impairment at 31 December	-2 426	-2 426
Book value on 31 December	4 845	4 845

Impairment testing of goodwill

The majority of goodwill is targeted to CapMan's 2002 acquisition Swedestart Management AB whose remaining goodwill was €4.5 million as at 31 December 2007. In the transaction CapMan acquired operations related to the management of certain funds as well as a skilled technology and life science investment team. The management of these Swedish funds and the advisory service provided by the technology and life science teams to the rest of the management companies forms a cash-generating unit. Potential impairment has been tested by using estimated future discounted cash fl ows. Cash fl ow projections have been prepared for fi ve years, and periods beyond management's review period have been extrapolated taking into consideration the average business cycle. The management fees of the current funds are based on long-term agreements and the income is discounted using an 9.20% (2006: 8.75%) discount rate. Potential carried interest income has not been taken into account. Based on the impairment test there was no need to write down the goodwill. However, the carrying amount of goodwill is sensitive to the success of fundraising. The goodwill may be impaired in future in the event that the funds' size is less than estimated or in case of delays in the fundraising process.

12. OTHER INTANGIBLE ASSETS

	2007	2006
Acquisition cost at 1 January	1 909	1 661
Additions	594	248
Acquisition cost at 31 December	2 503	1 909
Accumulated depreciation at 1 January	-1 199	-894
Depreciation for the fi nancial year	-303	-305
Accumulated depreciation at 31 December	-1 502	-1 199
Book value on 31 December	1 001	710

Other intangible assets include software €0.6 million, trademark rights €0.1 million and competition restriction €0.1 million.

13. SHARES IN ASSOCIATED COMPANIES

	2007	2006
Acquisition cost at 1 January	2 860	1 099
Additions/disposals	41	1 064
Fair value gains/losses on investments	506	697
Acquisition cost at 31 December	3 407	2 860

2007

CapMan_3osa_fglENG.indd 93 19.2.2008 17:59:37

Associated companies:
€ ('000)	Assets	Liabilities	Turnover	Profi t/loss	Ownership, %
Access Capital Partners Group S.A.,
Belgium	n/a	n/a	n/a	1 600	35.0%
BIF Management Ltd. Jersey	68	4	449	0	33.3%
Baltic SME Management B.V.,
The Netherlands	34	7	158	-1	33.3%
Maneq 2002 AB, Sweden	543	528	812	-30	35.0%
Maneq 2004 AB, Sweden	1 272	1	1 033	1 006	41.9%
Maneq 2005 AB, Sweden	4 699	4 068	51	-20	35.0%
Maneq 2006 AB, Sweden	6 782	5 803	0	-52	40.0%
Maneq 2007 AB, Sweden	6 978	6 067	0	-28	40.0%
Yewtree Holding AB, Sweden	1 375	1 294	0	-223	35.0%

2006

Associated companies:

	€ ('000)
--	----------	--

Access Capital Partners S.A., France	3 864	1 713	7 948	1 008	35.0%
Access Capital Partners (Guernsey)
Limited, Guernsey	1 241	154	4 943	1 035	35.0%
Baltcap Management Oy, Finland	1 313	116	646	-345	20.0%
BIF Management Ltd, Jersey	70	7	623	4	33.3%
Baltic SME Management B.V.,
The Netherlands	34	5	210	3	33.3%
Maneq 2002 AB, Sweden	1 024	933	83	73	35.0%
Maneq 2004 AB, Sweden	1 229	643	19	53	41.9%
Maneq 2005 AB, Sweden	4 647	3 977	70	7	35.0%
Maneq 2006 AB, Sweden	5 279	4 887	0	-1	40.0%

Team members of CapMan investment teams and certain key employees have the option to invest in portfolio companies alongside CapMan via Maneq funds. CapMan participates in these funds as one of the investors and as fi nance provider with market based conditions.

Access Capital Partners manages four funds of funds and private equity investment mandates. The funds invest mainly in European based funds.

14. INVESTMENTS AT FAIR VALUE THROUGH PROFIT AND LOSS

	2007	2006
Investments in funds
Investments in funds at 1 January	33 122	20 288
Additions	15 384	13 233
Disposals	-9 972	-4 117
Fair value gains in investments	5 696	3 718
Investments in funds at 31 December	44 230	33 122
The cumulative fair value gains in investments in funds is €9.0 million.	2007	2006
Other fi nancial assets
Other investments at 1 January	848	1 037
Disposals	30	-20
Fair value gains/losses on investments	0	-169
Other investments at 31 December	878	848

Investments at fair value through profi t and loss include mainly CapMan's own investments in the funds. The valuation principles are presented in Note 1. Accounting principles.

15. RECEIVABLES – NON-CURRENT

	2007	2006
Loan receivables from associated companies 1)	12 497	7 940
Other loan receivables 2)	1 500	3 256
Other receivables 3)	2 194	2 639
Total	16 191	13 835

Receivables include mainly fi xed-interest loan receivables from the funds. Loan receivables from associated companies are presented in Table 26. Related party disclosures. Other loan receivables include receivables from Maneq 2002 Ky €0.8 million and Leverator Plc €0.6 million. Non-current receivables have a fair value equal to their book value.

1) Loan receivables from associated companies

5 006
6 060
1 431
12 497

800
600
100
1 500

Senior loans, mezzanine loans and other loan receivables are interest-bearing.

3) Other long-term receivables are non-interest-bearing.

16. DEFERRED TAX ASSETS AND LIABILITIES

2007	2006

3 547	231
3 547	231


1 689	1 638
2 188	708
-143	-112
3 734	2 234

17. TRADE AND OTHER RECEIVABLES

CapMan_3osa_fglENG.indd 94 19.2.2008 17:59:37

	2007	2006
Trade receivables	701	365
Receivables from associated companies	878	127
Loan receivables	126	0
Accrued income	3 960	2 596
Other receivables	2 172	2 433
Total	7 837	5 521

The Group has had no bad debts. Accrued income includes mainly credit items and tax receivables.

18. OTHER FINANCIAL ASSETS AT FAIR VALUE

	2007	2006
Other fi nancial assets at fair value	14 857	2 779
Total	14 857	2 779

Other fi nancial assets at fair value includes shares in external investment fund companies.

19. SHARES

	Number of A shares	Number of B shares	Total
	('000)	('000)	('000)
Share capital at 31 December 2006	8 000	69 159	77 159
Shares subscribed with options		2 810
Other change	-2 000	2 000
Share capital at 31 December 2007	6 000	73 969	79 969

CapMan Plc has two series of shares, A (10 votes) and B (1 vote). The shares have no nominal value.

Distribution of A and B shareholdings by number of shares and sector as at 31 December 2007

Shareholding	Number of		Number of		Number of
	holdings	%	shares	%	votes	%
1–100	927	20.65%	41 589	0.05%	41 589	0.03%
101–1 000	2 198	48.96%	1 151 250	1.44%	1 151 250	0.86%
1 001–10 000	1 182	26.33%	3 641 100	4.55%	3 641 100	2.72%
10 001–100 000	130	2.90%	3 211 070	4.02%	3 211 070	2.40%
100 001– highest	52		1.16% 71 904 944		89.92% 125 904 944	93.98%
Total	4 489		100.00% 79 949 953		99.98% 133 949 953	99.99%
Nominee registered	8		25 292 313	31.63%
On the book-entry register joint account			18 866	0.02%	18 866	0.01%
Total shares outstanding			79 968 819		100.00% 133 968 819	100.00%

Sector	Number of		Number of		Number of
	holdings	%	shares	%	votes	%
Corporations	245		5.46% 24 967 916		31.22% 51 967 916	38.80%
Financial and insurance
corporations	14		0.31% 27 543 986		34.44% 27 543 986	20.56%
Public sector institutions	6	0.13%	5 146 802	6.44%	5 146 802	3.84%
Households	4 170		92.89% 11 162 840		13.96% 11 162 840	8.33%
Non-profi t organisations	31	0.69%	2 651 435	3.32%	2 651 435	1.98%
Foreign shareholders	23	0.51%	8 476 974		10.60% 35 476 974	26.49%
Total	4 489		100.00% 79 949 953		99.98% 133 949 953	99.99%
Nominee registered			25 292 313	31.63%
On the book-entry register joint account			18 866	0.02%	18 866	0.01%
Total shares outstanding			79 968 819		100.00% 133 968 819	100.00%

Source: Finnish Central Securities Depository Ltd, as at 31 December 2007. Figures are based on the total number of shares 79,968,819 and total number of shareholders 4,489. There are 6,000,000 A shares, which are owned by companies under control or authority of CapMan Plc's Senior Partners.

20. INTEREST-BEARING LOANS AND BORROWINGS – NON-CURRENT

	2007	2006
Bank loans	16 000	10 000
Total	16 000	10 000

The loan maturity is fi ve years. Repayment is tied up with the sum of receivables from fund investments paid back. The interest is paid half-yearly.

21. OTHER LIABILITIES – NON-CURRENT

2007	2006
701	430
701	430

Other liabilities include the liability of the sabbatical €0.6 million.

22. TRADE AND OTHER PAYABLES – CURRENT

2007	2006
975	587
63	0
12 077	4 900
8 241	1 922
21 356	7 409

The maturity of trade payables is normal terms of trade. Trade payables do not include debts due. Accrued expenses include accrued salaries and social benefi t expenses. Other liabilities include the liability of the dividend distribution to minority interests.

23. INTEREST-BEARING LOANS AND BORROWINGS – CURRENT

	2007	2006
Bank overdraft account	0	1 944
Total	0	1 944

Non-current and current interest-bearing loans and borrowings have a fair value equal to their book value.

24. DERIVATIVE INSTRUMENTS AT FAIR VALUE

CapMan_3osa_fglENG.indd 95 19.2.2008 17:59:38

	2007	2007	2007
	Positive fair value	Negative fair value
Fair values	(balance sheet value)	(balance sheet value)	Net value
Unhedged items	261	-151	110

The interest rate level of the Group's interest-bearing debts is hedged by interest rate options. They are recognised in the balance sheet at fair value on the closing date. The Group does not use derivative instruments for hedging purposes. Currency receivables and payables, their net position or subsidiaries' equity are not hedged.

25. CLASSIFICATION OF FINANCIAL ASSETS AND LIABILITIES BY VALUATION CATEGORY

	Available-for	Loans	Fair value
	sale fi nancial	and other	through	Financial	Balance
	assets	recivables	profi t/loss	liabilities	sheet value	Fair value
		Amortised	Fair	Amortised
Valuation principles	Fair value	cost	value	cost
Non-current assets
Other investments
Investments available-for-sale	878		44 230		45 108	45 108
Receivables
Interestbearing loan receivables
from associated companies		12 497			12 497	12 497
Interestbearing other loan
receivables		1 500			1 500	1 500
Trade and other receivables		2 194			2 194	2 194
Current assets
Trade and other receivables		7 837			7 837	7 837
Cash and bank		19 741	14 857		34 598	34 598
Total	878	43 769	59 087	0	103 734	103 734
Interest-bearing loans, non-current
Interest-bearing loans				16 000	16 000	16 000
Other liabilities				701	701	701
Current liabilities
Trade and other liabilities				13 338	13 338	13 338
Tax liabilities				8 018	8 018	8 018
Total	0	0	0	38 057	38 057	38 057

26. TRADE AND OTHER RECEIVABLES AND TRADE AND OTHER LIABILITIES BY CURRENCY AT END OF YEAR

Trade and other receivables	amount in foreign currency	amount in euros	proportion
EUR		5 524	70%
NOK	1 353	170	3%
SEK	18 704	1 981	25%
DKK	1208	162	2%
Trade and other liabilities
EUR		18 442	86%
NOK	4 600	578	3%
SEK	19 525	2 068	10%
DKK	1 999	268	1%

27. COMMITMENTS AND CONTINGENT LIABILITIES

	2007	2006
Operating lease commitments
Within one year	249	172
After one but not more than fi ve years	191	132
Total	440	304
Other hire purchase commitments
Within one year	1 244	1 355
After one but not more than fi ve years	3 854	3 934
More than fi ve years	4 175	5 139
Total	9 273	10 428

The Group has leased the offi ces. The rental agreements are for 1-15 years. Index, renewal and other terms of the agreements differ from each other.

Commitments and contingent liabilities total	67 791	63 981
Remaining commitments to funds	55 994	50 529
	2 174	2 773
CapMan RE II Ky	1 672	1 998
CapMan Real Estate I Ky	502	775
Real estate funds
	2 243	2 520
Other	27	50
Access Capital LP II	2 216	2 470
Fund of funds
	4 525	6 015
Other	62	72
CapMan Mezzanine IV Classic Ky	1 744	2 463
Mezzanine funds CapMan Mezzanine IV L.P.	2 719	3 480
	47 052	39 221
Other	670	332
Swedestart Tech KB	967	1 114
CapMan Technology Fund 2007	12 444	0
CapMan Life Science IV	6 892	3 364
CapMan Buyout VIII	23 152	30 784
Equity funds CapMan Equity VII	2 927	3 627
Remaining commitments to funds
Other contingent liabilities	2 075	2 657
Pledged deposit for own commitment	9	63
Other contingent liabilities

CapMan, like other investors in the funds, gives commitments to the funds when they are established. The main part of the commitments become due during the fi rst fi ve years of each fund's life time.

CapMan_3osa_fglENG.indd 96 19.2.2008 17:59:38

28. SHARE-BASED PAYMENTS

The stock option program 2003 covers all employees and members of the Board. Stock options granted after 7 November 2002 and not vesting before 1 January 2005 are entered in the fi nancial statements in accordance with IFRS 2 Share-based payments. The fair value of stock options has been assessed at the grant date and expensed straight-line in the income statement over the vesting period. Fair value of options at the grant date is determined in accordance with the Black-Scholes model.

Key information on the stock option program is presented in the table below.

	Stock option program 2003
	Stock option 2003A	Stock option 2003B
Stock options, number	625 000	625 000
Entitlement to subscribe for B shares, number	625 000	625 000
Share subscription period begins	1.10.2006	1.10.2007
Share subscription period ends	31.10.2008	31.10.2009
Share subscription price	Trade volume weighted	Trade volume weighted
	average price of the B share	average price of the B share
	on the Helsinki Exchanges	on the Helsinki Exchanges
	1.12.–31.12.2003 €1.72 less	1.6.–30.6.2004 €1.60 less
	dividends from 2004 onwards	dividends from 2005 onwards
	(€1.42 as of 31.12.2007)	(€1.35 as of 31.12.2007)
	Stock option program 2003
Information applied in the Black-Scholes model	Stock option 2003A	Stock option 2003B
Expected volatility	20.00%	20.00%
Risk-free interest	2.75%	2.75%

Stock option program 2000 ended on 31 October 2007. The program originally included 5,270,000 stock options with entitlement to subscribe an equivalent number of CapMan Plc B shares. A total of 2,760,693 B shares were subscribed for with year 2000 stock options in 2007. According to the AGM, subscription prices were recorded in the Company's invested unrestricted shareholders' equity.

The lowest trading price of 2003A stock options was €1.40 and the highest was €2.55, with an average price of trades of €1.85. The closing price on 31 December 2007 was €2.20.

The lowest trading price of 2003B stock options was €2.09 and the highest was €2.25, with an average price of trades of €2.15. The closing price on 31 December 2007 was €2.10.

29. RELATED PARTY DISCLOSURES

	Parent company
	Group ownership	ownership of
Subsidiaries	of shares, %	shares, %	Share capital
CapMan Capital Management Ltd, Finland	100%	100%
Finnmezzanine Oy, Finland	100%
EastMan Advisors Oy, Finland	100%
ScanEast Managing Partner Ltd., Guernsey	70%
CapMan Invest A/S, Denmark	100%	100%
NPE General Partner II Limited, Jersey	100%	100%
CapMan Sweden AB, Sweden	100%	100%
CapMan Holding AB, Sweden	100%	100%
CapMan AB, Sweden	100%
CapMan Norway AS, Norway	100%	100%
CapMan (Guernsey) Limited, Guernsey	100%	100%
CapMan Mezzanine (Guernsey) Limited, Guernsey	100%	100%
CapMan (Guernsey) Buyout VIII GP Limited, Guernsey	100%	100%
CapMan (Sweden) Buyout VIII GP AB, Sweden	100%	100%
CapMan Classic GP Oy, Finland	100%	100%
CapMan Real Estate Ltd, Finland	80%	80%
Realprojekti Kiinteistökehitys Oy, Finland	80%	80%
Realprojekti Oy, Finland	80%	80%
CapMan RE II GP Oy, Finland	80%	80%
CapMan (Guernsey) Life Science IV GP Limited, Guernsey	100%	100%
CapMan (Guernsey) Technology 2007 GP Limited	100%	100%
CapMan (Sweden) Technology Fund 2007 GP AB	100%	100%
CapMan (Guernsey) Investment Limited, Guernsey 1)	100%	100%	EUR 100
Dissimilium Enumeratio Invest AB, Sweden 1)	100%	100%	SEK 100 000
Praeveniens Praesumitur Invest AB, Sweden 1)	100%	100%	SEK 100 000
CapMan Germany GmbH, Germany 1)	100%	100%	EUR 25 000

1) Not consolidated, included in the total of other investments.

CapMan_3osa_fglENG.indd 97 19.2.2008 17:59:38

	Parent company
	Group ownership	ownership
Associated companies	of shares, %	of shares, %
Access Capital Partners Group S.A., Belgium	35.00%	35.00%
BIF Management Ltd, Jersey	33.33%	33.33%
Baltic SME Management B.V., The Netherlands	33.33%	33.33%
Maneq 2002 AB, Sweden	35.00%	35.00%
Maneq 2004 AB, Sweden	41.90%	41.90%
Maneq 2005 AB, Sweden	35.00%	35.00%
Maneq 2006 AB, Sweden	40.00%	40.00%
Maneq 2007 AB, Sweden	40.00%	40.00%
Yewtree Holding AB, Sweden	35.00%	35.00%

Services sold to related parties in 2007

The Group received a return of €0.4 million from the sale of services to Access Capital Partners (Guernsey) Ltd.

	Non-current loan	Non-current loan
Loan receivables from related parties as at 31 December 2007, M€	receivable 2007	receivable 2006
Access Capital Partners Group S.A.	0.4	0.0
Maneq 2002 AB	0.5	0.9
Maneq 2004 AB	0.0	0.6
Maneq 2005 AB	2.2	1.9
Maneq 2006 AB	3.9	4.5
Maneq 2007 AB	4.2	0.0
Yewtree Holding AB	1.3	0.0

CEO's and Deputy CEO's remuneration

In 2007, CEO Heikki Westerlund received salary and other remuneration totalling €349 641 and Deputy CEO Olli Liitola received salary and other remuneration totalling €183,976. The total remuneration paid to the members of the Board in 2007 was €190,700.

The retirement age and retirement benefi ts for the CEO and Deputy CEO are specifi ed according to the statute on employee pensions. The term of notice for the CEO, Deputy CEO and the Company is 12 months, during which time the normal monthly salary is paid.

Board members' holding of share-based payments

As of 31 December 2007 the members of the Board of Directors held no stock options (no stock options at 31 December 2006). The stock options granted to the members of the Board are subject to the same terms as for stock options granted to employees.

30. RISK MANAGEMENT

Risk management principles

Clear fi nancial and other operational objectives are specifi ed for all CapMan teams. CapMan has an internal code of practice and risk management program for the achievement of set objectives and minimisation of associated risks.

a) Business risks

Risks related to fundraising and funds' investment activities

A major risk associated with CapMan's business is the failure of fundraising. Successful fundraising depends in the long-term on successful investment and exit activities, which in turn largely depend on the professional expertise of the personnel. CapMan strives to minimise the risks and maximise the returns associated with investments by means of deliberate investment strategies and criteria, a phased investment decision-making process and a well-diversifi ed portfolio of investee companies. Additionally, CapMan participates actively in the business development of its portfolio companies to manage risks and grow returns, for example through work on the companies' Boards of Directors.

Risks related to human resources

HR development and retention of key personnel in CapMan's organisation are critical factors from the point of business development. CapMan strives to control risks related to competencies and training and to minimise the risk of losing key personnel from the organisation with the assistance of HR development programs.

b) Financial risks

Market risks are due to changes in the rates or prices of currencies, interest, commodities, energy and securities. These changes may have substantial impact on the Group's result, cash fl ow and balance sheet. The major risk associated with investments is related to fund investments, which are valued at fair value in accordance with European Private Equity & Venture Capital Association (EVCA) guidelines. The fair value is therefore signifi cantly affected by the cash fl ow generation capacity of portfolio companies and changes in market interest rates. Additionally, changes in the overall market environment of the portfolio companies may be refl ected in the discount rate used in fair value calculation or in cash fl ows.

Foreign currency risk

The Group's revenues are predominantly in euros. Most expenses are denominated in euros, but also in Swedish, Danish and Norwegian crowns. The funds under management invest in portfolio companies in Finland, Sweden, Norway and Denmark. According to the management, foreign currency risk has not been considered as material and therefore it has not been hedged.

Credit risk and counter-party risk

The main part of the Group's business is based on agreements made with the funds, whereby the Group is entitled to receive management fees, advisory fees and carried interest income. The credit risk is signifi cantly affected by the funds' ability to generate positive cash fl ow.

Liquidity risk

CapMan_3osa_fglENG.indd 98 19.2.2008 17:59:38

CapMan maintains suffi cient liquidity by means of effective cash management. Given the unpredictable business environment, CapMan maintains fi nancial fl exibility by means of long-term credit limit agreements. Additional to the drawn loan, the Group's credit limits totalled €6 million at the end of 2007.

31. EVENTS AFTER THE CLOSING DATE

On 18 January 2008 CapMan Plc established CapMan Hotels RE Ky, a private equity real estate fund investing in hotel real estate. The fund reached €835 million at fi rst closing and the maximum fund size is €1.1 billion. In connection with its establishment, the fund acquired a portfolio of 39 hotels with a transaction value of €805 million from Northern European Properties Ltd (NEPR).

<-- PDF CHUNK SEPARATOR -->

Parent Company Income Statement (FAS) Parent Company Balance Sheet (FAS)

€ ('000)	Note	1.1.–31.12.2007	1.1.-31.12.2006
Turnover Other operating income Personnel expenses Depreciation and amortisation Other operating expenses	1 2 3 4	686 164 -4 032 -88 -3 559	732 654 -2 756 -1 480 -2 505
Operating loss		-6 829	-5 355
Financial income and expenses	5	15 490	2 857
Profi t/loss before extraordinary items		8 661	-2 498
Extraordinary items	6	6 100	9 500
Profi t before taxes		14 761	7 002
Income taxes	7	-375	-1 759
Profi t for the fi nancial year		14 386	5 243

€ ('000)	Note	31.12.2007	31.12.2006
ASSETS
Non-current assets
Intangible assets	8	393	156
Tangible assets	9	44	61
Investments	10
Shares in subsidiaries		11 102	11 069
Investments in associated companies		341	864
Other investments		33 160	28 118
Investments total		44 603	40 051
		45 040	40 268
Current assets
Long-term receivables	11	18 907	12 446
Deferred tax receivables	12	1 574	195
Short-term receivables	13	21 910	4 243
Marketable securities		3 082	0
Cash and bank		2 802	9 993
		48 275	26 877
Total assets		93 315	67 145
SHAREHOLDERS' EQUITY AND LIABILITIES
Shareholders' equity	14
Share capital		772	772
Share premium account		38 968	38 968
Other reserves
Invested unrestricted shareholders' equity		1 727	0
Retained earnings		2 922	6 921
Profi t for the fi nancial year		14 386	5 243

		58 775	51 904
Liabilities
Non-current liabilities	15	16 382	11 766
Current liabilities	16	18 158	3 475

		34 540	15 241
Total shareholders' equity and liabilities		93 315	67 145

CapMan_3osa_fglENG.indd 99 19.2.2008 17:59:38

Parent Company Cash Flow Statement (FAS) Notes to the Parent Company Financial

€ ('000) 1.1.–31.12.2007 1.1.–31.12.2006 Cash fl ow from operations Profi t/loss before extraordinary items 8 661 -2 498 Financial income and expenses -15 491 -2 857 Adjustments to operating loss -25 1 480 Change in net working capital -1 315 3 718 Interest paid -729 -100 Interest received 518 985 Dividends received 15 341 2 449 Taxes paid -1 372 -1 423 Cash fl ow from operations 5 588 1 754 Cash fl ow from investments Investments in tangible and intangible assets -308 -134 Investments in other placements -4 552 -9 460 Cash fl ow from investments -4 860 -9 594 Cash fl ow from fi nancing activities Share issue 1 727 890 Short-term loan receivables granted -150 0 Long-term loan receivables granted -12 328 -8 718 Repayment of long-term loans 6 552 5 201 Proceeds from borrowings 16 000 13 710 Repayment of loans from fi nancial institutions -13 478 0 Dividends paid -9 259 -5 315 Other fi nancial assets at fair value -3 082 0 Group contributions received 6 100 9 500 Cash fl ow from fi nancing activities -7 918 15 268 Change in cash and cash equivalents -7 190 7 428 Cash and cash equivalents at start of year 9 992 2 564 Cash and cash equivalents at end of year 2 802 9 992 Change in working capital: Change in current non-interest-bearing receivables -7 055 3 146 Change in current trade payables and other non-interest-bearing liabilities 5 740 572 -1 315 3 718

Statements (FAS)

1. Turnover by area
€ ('000)	2007	2006

Finland	303	371
Foreign	383	361
Total	686	732

2. Other operating income	2007	2006
Capital gain	12	0
Gain from sale of the shares in the associated company	114	654
Other	38	0
Total	164	654


3. Personnel	2007	2006
Wages and salaries	3 250	2 273
Pension expenses	449	362
Other personnel expenses	333	121
Total	4 032	2 756

Salary and other remuneration of the CEO and
Board members	540	486
Average number of employees	29	26

4. Depreciations	2007	2006
Depreciation by asset type
Intangible rights	7	4
Other long-term expenditure	63	56
Machinery and equipment	18	15
Total	88	75
Amortisation/non-current assets	0	1 405
Total	88	1 480

5. Financial income and expenses	2007	2006
Dividend income
Group companies	14 529	2 392
Others	812	57
Total	15 341	2 449

Other interest and fi nancial income
Group companies	201	62
Others	1 272	617

Total	1 473	679

Interest and other fi nancial expenses
Group companies	-465	-48
Others	-859	-223
Total	-1 324	-271

Financial income and expenses total	15 490	2 857

CapMan_3osa_fglENG.indd 100 19.2.2008 17:59:38

6. Extraordinary items	2007	2006
Extraordinary income
Group contributions received	6 100	9 500

7. Income taxes	2007	2006
Income taxes	-1 754	-1 760
Deferred taxes	1 379	1
Total	-375	-1 759

8. Intangible assets	2007	2006
Intangible rights

Acquisition cost at 1 January	43	19
Additions	254	24
Acquisition cost at 31 December	297	43
Accumulated depreciation at 1 January	-13	-9
Depreciation for fi nancial year	-7	-4
Accumulated depreciation at 31 December	-20	-13
Book value on 31 December		30
	277
Other long-term expenditure

Acquisition cost at 1 January	375	307
Additions	53	68
Acquisition cost at 31 December	428	375

Accumulated depreciation at 1 January	-248	-193
Depreciation for fi nancial year	-64	-56
Accumulated depreciation at 31 December	-312	-249
Book value on 31 December	116	126

Intangible rights total	393	156

9. Tangible assets	2007	2006
Machinery and equipment

Acquisition cost at 1 January	129	87
Additions	1	42
Disposals	-28	0
Acquisition cost at 31 December	102	129

Accumulated depreciation at 1 January	-73	-59
Accumulated depreciation in changes	28	0
Depreciation for fi nancial year	-18	-14
Accumulated depreciation at 31 December	-63	-73
Book value at 31 December	39	56

Other tangible assets

Acquisition cost at 1 January	5	5
Book value at 31 December	5	5

Tangible assets total	44	61

10. Investments	2007	2006
Shares in subsidiaries
Acquisition cost at 1 January	11 069	12 448
Additions	34	26
Disposals	-1	-1 405
Acquisition cost at 31 December	11 102	11 069
Shares in associated companies
Acquisition cost at 1 January	864	274
Additions	53	638
Disposals	-576	-48
Acquisition cost at 31 December	341	864
Shares, other
Acquisition cost at 1 January	28 118	18 678
Additions	13 839	12 258
Disposals	-8 797	-2 818
Acquisition cost at 31 December	33 160	28 118
Investments total	44 603	40 051

The subsidiaries and the associated companies are presented in the Notes to the Consolidated Financial Statements, Table 29. Related party disclosures.

11. Long-term receivables	2007	2006
Receivables from Group companies
Loan receivables	4 648	1 250
Receivables from associated companies
Loan receivables	12 498	7 940
Other loan receivables	1 500	3 256
Other receivables	261	0
Long-term receivables total	18 907	12 446
12. Deferred tax assets	2007	2006
Accrued differences	1 574	195
Deferred tax assets total	1 574	195

CapMan_3osa_fglENG.indd 101 19.2.2008 17:59:38

13. Short-term receivables	2007	2006
Accounts receivable	90	6

Receivable from Group companies
Accounts receivable	123	86
Loan receivables	516	367
Other receivables	18 817	1 780
Total	19 456	2 233

Receivables from associated companies
Accounts receivable	194	1
Loan receivables	0	126
Accrued income	685	118
Total	879	245

Loan receivables	126	0
Other receivables	931	962
Accrued income	428	797

Short-term receivables total	21 910	4 243

14. Shareholders' equity	2007	2006
Share capital at 1 January	772	759
Share issue	0	13
Share capital at 31 December	772	772
Share premium account at 1 January	38 968	38 091
Issue premium	0	877
Share premium account at 31 December	38 968	38 968
Invested unrestricted shareholders' equity 1 January	0	0
Share subscriptions with options	1 727	0
Invested unrestricted shareholders' equity 31 Decmber	1 727	0
Retained earnings at 1 January	12 164	12 236
Dividend payment	-9 259	-5 315
Other change	17	0
Retained earnings at 31 December	2 922	6 921
Profi t for the fi nancial year	14 386	5 243
Shareholders' equity, total	58 775	51 904
Calculation of distributable assets
Retained earnings	2 922	6 921
Profi t for the fi nancial year	14 386	5 243
Invested unrestricted shareholders' equity	1 727	0
Total	19 035	12 164

CapMan_3osa_fglENG.indd 102 19.2.2008 17:59:39

	2007	2006
	Number of	Number of
	shares	shares
Series A share (10 votes/share)	6 000	8 000
Series B share ( 1 vote/share)	73 969	69 159

15. Non-current liabilities	2007	2006
Liabilities to Group companies
Other liabilities	231	1 766

Bank loans	16 000	10 000

Other liabilities	151	0

Non-current liabilities total	16 382	11 766

16. Current liabilities	2007	2006
Accounts payable	359	156
Bank overdraft account	0	1 944
Liabilities to Group companies
Accounts payable	4 631	0
Other liabilities	10 421	167
Accrued expenses	851	0
Total	15 903	167

Other liabilities	101	212
Accrued expenses	1 795	996

Current liabilities total	18 158	3 475

17. Contingent liabilities	2007	2006
Other commitments	2 075	0
Remaining commitments to funds
Equity funds
CapMan Equity VII	2 927	3 396
CapMan Buyout VIII	23 152	27 182
CapMan Life Science IV	6 892	3 364
CapMan Technology Fund 2007	12 444	0
Swedestart Tech KB	967	1 114
Other	590	231
	46 972	35 287
Mezzanine funds
CapMan Mezzanine IV L.P.	2 719	3 480
CapMan Mezzanine IV Classic Ky	1 744	2 462
	4 463	5 942
Fund of funds
Access Capital LP II	2 216	2 471
Other	26	50
	2 242	2 521
Remaining commitments to funds total	53 677	43 750
Remaining commitments total	55 752	43 750

CapMan_3osa_fglENG.indd 103 19.2.2008 17:59:39

Signatures to the Report of the Board of Directors and Financial Statements

Helsinki 31 January 2008

Ari Tolppanen Chairman	Sari Baldauf
Tapio Hintikka	Lennart Jacobsson
Urban Jansson	Teuvo Salminen

Heikki Westerlund CEO

Auditor's report

TO THE SHAREHOLDERS OF CAPMAN PLC

We have audited the accounting records, the fi nancial statements, the report of the Board of Directors and the administration of CapMan Plc for the period 1 January –31 December 2007. The Board of Directors and the CEO have prepared the consolidated financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the EU, as well as the report of the Board of Directors and the parent company's fi nancial statements, prepared in accordance with prevailing regulations in Finland, containing the parent company's balance sheet, income statement, cash fl ow statement and the notes to the fi nancial statements. Based on our audit, we express an opinion on the consolidated fi nancial statements, as well as on the report of the Board of Directors, the parent company's financial statements and the administration.

We conducted our audit in accordance with Finnish Standards on Auditing. Those standards require that we perform the audit to obtain reasonable assurance about whether the report of the Board of Directors and the fi nancial statements are free of material misstatement. An audit includes examining on a test basis evidence supporting the amounts and disclosures in the report of the Board of Directors and in the fi nancial statements, assessing the accounting principles used and signifi cant estimates made by the management, as well as evaluating the overall fi nancial statement presentation. The purpose of our audit of the administration is to examine that the members of the Board of Directors and the CEO of the parent company have complied with the rules of the Companies Act.

CONSOLIDATED FINANCIAL STATEMENTS

CapMan_3osa_fglENG.indd 104 19.2.2008 17:59:39

In our opinion the consolidated fi nancial statements, prepared in accordance with International Financial Reporting Standards as adopted by the EU, give a true and fair view, as defi ned in those standards and in the Finnish Accounting Act, of the consolidated results of operations as well as of the fi nancial position.

PARENT COMPANY'S FINANCIAL STATEMENTS, THE REPORT OF THE BOARD OF DIRECTORS AND ADMINISTRATION

In our opinion the parent company's fi nancial statements have been prepared in accordance with the Finnish Accounting Act and other applicable Finnish rules and regulations. The parent company's fi nancial statements give a true and fair view of the parent company's result of operations of the fi nancial position.

In our opinion the report of the Board of Directors has been prepared in accordance with the Finnish Accounting Act and other applicable Finnish rules and regulations. The report of the Board of Directors is consistent with the consolidated statements and the parent company's fi nancial statements and gives a true and fair view, as defi ned in the Finnish Accounting Act, of the result of operations and of the fi nancial position.

The consolidated fi nancial statements and the parent company's fi nancial statements can be adopted and the members of the Board of Directors and the President and CEO of the parent company can be discharged from liability for the period audited by us. The proposal by the Board of Directors regarding the distributable funds is in compliance with the Companies Act.

Helsinki, 5 March 2008

PricewaterhouseCoopers Oy Authorised Public Accountants

Jan Holmberg

Authorised Public Accountant

Calculation of Key Figures

Return on equity % (ROE) =	Profi t before taxes – taxes Shareholders' equity + minority interest (average)	x 100
Return on investment % (ROI) =	Profi t before taxes + interest expenses and other fi nancial expenses Balance sheet total – non-interest bearing liabilities (average)	x 100
Equity ratio (%) =	Shareholders' equity + minority interest Balance sheet total – advances received	x 100
Earnings per share (EPS) =	Profi t for the fi nancial year Share issue adjusted number of shares (average)
Shareholders' equity per share =	Shareholders' equity Share issue adjusted number of shares at the end of the fi nancial year
Dividend per share =	Dividend paid in the fi nancial year Share issue adjusted number of shares at the end of the fi nancial year
Dividend per earnings (%) =	Dividend / share Earnings / share	x 100

Glossary

Alternative asset class

In addition to private equity and real estate the alternative asset class includes investments covering, amongst others, infrastructure, forestry and active public markets. Institutional investors typically allocate a certain percentage of their investments to the alternative asset class.

Buy-and-build strategy

Active growth of portfolio companies through add-on acquisitions.

Buyout

A transaction in which a business, business unit or company is acquired from the current shareholders by company management or with an external group. CapMan Buyout's activities focus on buyout transactions in the Nordic countries. See Management buyout (MBO).

Capital call

When investors commit themselves to back a private equity fund, all the funding may not be needed at once. Some is used as draw down later when the General Partner calls capital from investors in its funds. Usually a fund investor (limited partner) commits to provide a certain amount of capital to a private equity fund, and the General Partner draws down commitments in several stages when the funds makes new investments.

Capital under management

This is the total amount of capital committed in the funds, i.e. the remaining capital available for future investments, the capital already invested (at cost) and not yet divested, and the capital already invested and divested.

Capital weighted average IRR

The average IRR weighted by gross fund size, with all funds contributing to the average in proportion to their size.

Carried interest (or carry)

CapMan_3osa_fglENG.indd 105 19.2.2008 17:59:39

A bonus entitlement accruing to an investment fund's management company. The management company begins to receive carried interest after the investors (limited partners) have regained their investment in addition to a preferred annual return (hurdle rate).

Commitment

A limited partner's obligation to provide a certain amount of capital to a private equity fund.

Core

A term that describes the risk/return profi le of real estate investment activities. Core properties have a low occupancy rate risk and long-term leases, they are technically modern and their value creation potential is steady. Core properties have a relatively low return and a low risk. Net rental income from core properties is lower than for value added and opportunistic properties.

Deal fl ow

The number of investment opportunities available to a private equity house.

Early stage

Seed and start-up stages of a business.

Equity fund

A private equity fund making investments.

EVCA

(European Private Equity and Venture Capital Association)

A non-profi t trade association of entities and companies acting in the European private equity and venture capital markets.

Exit (or realisation)

Liquidation of holdings by a private equity fund. Typical exit methods are sale to an industrial buyer, sale to another private equity investor or sale by public offering (including IPO).

Expansion stage

A fund investment strategy involving fi nancing for the growth and expansion of an existing company.

Fair value

The market value for which an investment could be exchanged in an arm's length transaction. CapMan funds' investments in portfolio companies are valued to fair value in accordance with the guidelines of EVCA. Investments in real estate assets are valued in accordance with the value appraisements of external experts.

Follow-on investment (or add-on investment)

An additional investment in a portfolio company which has already received funding from a private equity investor.

Fund focus

The strategy of specialisation by stage of investment, sector of investment and geographical concentration.

Fund of funds

A fund that makes equity investments in other funds.

Fundraising

The process in which private equity houses raise money mainly from institutional investors to create a private equity fund. Commitments to the fund are further invested by the General Partner in accordance with the fund's investment focus.

Fund size

The total amount of capital committed by the limited and general partners of a fund.

FVCA (Finnish Venture Capital Association)

A cooperative association of communities or private individuals acting in the Finnish private equity and venture capital markets.

General Partner

A partner in a private equity management company who has unlimited personal liability for the debts and obligations of the limited partnership.

Hurdle rate

The annual IRR that private equity fund managers must return to their investors before they can receive carried interest.

Institutional investor

An investor, such as a pension fund, endowment fund, insurance company or bank, which generally has substantial assets and experience in investments and invests capital on behalf of corporations or private individuals.

Internal rate of return (IRR)

In a private equity fund, the net return earned by investors from the fund's activity from inception to a stated date. The

IRR is calculated as an annualised effective compounded rate or return, using monthly cash flows and annual valuations.

Later stage

A fund investment strategy involving fi nancing for the expansion of a mature company.

Life science

Includes pharmaceuticals, medical technology and biotechnology. CapMan Life Science invests primarily in later stage medtech companies and healthcare services companies.

Liquidity

The convertibility of a share to cash.

Management buyout (MBO)

A buyout in which the target's management team acquires an existing product line or business from the vendor with the support of private equity investors.

Management fee

Compensation for the management of a private equity fund's activities. This annual management charge is equal to a certain percentage of investors' initial commitments to the fund. CapMan's management fees are usually 1.5–2.5% of the fund's commitments/remaining portfolio for equity funds and 1.25–1.5% for mezzanine funds. Management fees for real estate funds are typically lower than for equity and mezzanine funds.

Medical technology (or medtech)

A sector of life science that includes product development and distribution, as well as related services, for medical equipment and diagnostic devices.

Mezzanine fi nance

A fi nancing instrument involving subordinated debt (the risk and return are between equity and secured debt).

Mezzanine fund

A fund focusing on mezzanine fi nancing. See Mezzanine fi nance.

Opportunistic

A term that describes the risk/return profi le of real estate investment activities. Opportunistic properties have a relatively high risk. They are located in unestablished areas and may require further investments. The purpose of use of opportunistic properties may be specialised, for example warehouses or outlet stores, and they may have a high vacancy rate. Opportunistic properties are associated with development needs or development potential. Net rental income is higher than for core and value added properties.

Portfolio

A group of investee companies or assets.

Portfolio company (or investee company)

The company or entity into which a private equity fund invests directly.

Private equity

General term for private equity and venture capital investment activities, including buyouts as well as investments in technology and life science companies (venture capital investments). In the US, private equity refers mainly to buyout transactions.

Real estate development (or property development)

Active strategies to create value in an individual property or a specifi c area and its properties.

Real estate investment

Commitment of capital into a real estate asset (or part thereof) with the expectation of near-term increases in cash fl ow and value. Real estate investments may be held directly or indirectly, for example through shares and managed real estate funds.

Real estate management (or real estate maintenance)

Activities that aim to preserve the condition, value and features of a property. Real estate management can be subdivided into property management services and facilities maintenance services.

Secondary investment

CapMan_3osa_fglENG.indd 106 19.2.2008 17:59:39

An investment where a fund buys either a portfolio of direct investments of an existing private equity fund or limited partner's positions in these funds.

Seed stage

An investment strategy involving portfolio companies which have not yet fully established commercial operations, and may also involve continued research and product development.

Syndication

A group of private equity investors jointly investing in an investee company.

Technology

CapMan Technology's investment focus is on expansion and later stage technology companies in the Nordic countries.

Track record

A private equity management house's investments, experience, history and past performance.

Vacancy rate

One of the most important key fi gures in real estate investment. The vacancy rate describes the total amount of available space compared to the total inventory of space as a percentage for a specifi c part of the market. To calculate the vacancy rate, the utilised space (occupancy rate) is subtracted from the total inventory of space.

Value added

A term that describes the risk/return profi le of real estate investment activities. Value added properties are located in established offi ce and industrial estates with opportunities to enhance value creation through active leasing and development operations. Value added properties typically have shorter leases than core properties, and they may have vacancy. Net rental income is between that of core and opportunistic properties.

Venture capital

Venture capital is, strictly speaking, a subset of private equity and refers to equity investments made to fund the launch, early development or expansion of an unquoted and usually quite young company. Offsetting the high risk the investor takes is the expectation of higher than average return on the investment. See Private equity.

Summary of CapMan's Releases in 2007

January

2 Jan 2007	CapMan's real estate fund acquires Kalevankatu 20
10 Jan 2007	Clause withdrawn on proceedings by Competition Authorities in CapMan Real Estate I's real estate sale
29 Jan 2007	CapMan sells majority in Moventas to Industri Kapital
29 Jan 2007	Invitation to CapMan Plc's Press Conference
31 Jan 2007	The sale of CapMan Real Estate I fund's portfolio closed

February

1 Feb 2007	CapMan invests in vehicle logistics
1 Feb 2007	CapMan RE II reaches investment capacity of approximately EUR 550 million at second closing
2 Feb 2007	CapMan Plc Group Financial Statements Bulletin 1 January – 31 December 2006
2 Feb 2007	CapMan Plc Board of Directors convenes Annual General Meeting 2007, Sari Baldauf proposed to be elected as new member of the Board of Directors
2 Feb 2007	Summary of CapMan Plc's releases in 2006
9 Feb 2007	CapMan Technology 2007 fund raises EUR 110 million at fi rst closing
15 Feb 2007	CapMan acquires two commercial properties in Hämeenlinna and invests in logistics centre project in Mäntsälä
15 Feb 2007	Nominations in CapMan Group
26 Feb 2007	CapMan acquires Walki Wisa from UPM

March

2 Mar 2007	Disclosure of changes in shareholding
	in accordance with chapter 2, section
	9 of the Securities Market Act
9 Mar 2007	CapMan's Annual Report 2006
	published
13 Mar 2007	CapMan invests in Mirasys
19 Mar 2007	CapMan acquires a new property
	in Tampere for its real estate portfolio
26 Mar 2007	CapMan invests in Market Intelligence
	company Novintel
27 Mar 2007	Finnventure Fund V transferred to carry

29 Mar 2007	Decisions adopted by CapMan Plc's Annual General Meeting
April
2 Apr 2007	New commitments to CapMan Technology 2007 fund
3 Apr 2007	CapMan RE II fund reaches investment capacity of EUR 600 million
19 Apr 2007	CapMan exits Synerco
26 Apr 2007	Invitation to CapMan Plc's Press Conference
30 Apr 2007	CapMan exits from Secgo Software
May
3 May 2007	CapMan Plc Group Interim Report 1 January – 31 March 2007
4 May 2007	CapMan's A share ownership enlarges to all Senior Partners; at the same time 2,000,000 A shares will be converted into B shares
4 May 2007	Disclosure under chapter 2 section 10 of the Securities Market Act
9 May 2007	Logistics centre in Mäntsälä progresses at full speed – The foundation stone of CapMan RE II fund's fi rst real estate project was laid today
11 May 2007	B shares subscribed with stock options 2000A /B in CapMan Plc
11 May 2007	Disclosure of changes in shareholding in accordance with chapter 2, section 9 of the Securities Market Act
15 May 2007	CapMan acquires a commercial property in Malmi, Helsinki
16 May 2007	Jukka Härmälä appointed as CapMan Senior Advisor
18 May 2007	CapMan Plc share conversion registered
18 May 2007	Disclosure under chapter 2, section 10 of the Securities Market Act
22 May 2007	CapMan exits Hantro
24 May 2007	CapMan Life Science IV fund closes at EUR 54 million
28 May 2007	CapMan invests in IP Communications company Movial Applications
29 May 2007	CapMan acquires IT2 Treasury Solutions from SimCorp A/S
31 May 2007	CapMan acquires land in Kivistö, Vantaa

June
4 Jun 2007	CapMan strengthens its Real Estate team – Jorma Lehtonen appointed as CapMan Real Estate's Fund Director
7 Jun 2007	Peter Augustsson joins CapMan's Nordic Advisor Network
15 Jun 2007	CapMan's portfolio company Aerocrine AB listed on the Stockholm Stock Exchange
15 Jun 2007	CapMan, SEB Venture Capital and Aloe Private Equity acquire Swedish KMW Energi AB
26 Jun 2007	CapMan exits from Medianorth
26 Jun 2007	CapMan invests in healthcare provider Nacka Närsjukhus Proxima
28 Jun 2007	CapMan buys Entresse Shopping Centre in Espoo
29 Jun 2007	CapMan acquires Mastola logistics centre in Vantaa and Lönnrotinkatu 20 in Helsinki to its real estate portfolio
July
3 Jul 2007	CapMan buys shopping centre Skanssi in Turku
4 Jul 2007	CapMan invests in Norwegian healthcare service group
17 Jul 2007	CapMan exits Avitec AB
August
6 Aug 2007	Invitation to CapMan Plc's Press Conference
10 Aug 2007	CapMan Plc Group Interim Report

1 January – 30 June 2007 20 Aug 2007 B shares subscribed with stock options 2000A /B in CapMan Plc 29 Aug 2007 CapMan acquires two commercial

properties in Helsinki

September

CapMan_3osa_fglENG.indd 107 19.2.2008 17:59:39

5 Sep 2007	CapMan exits from Copterline
11 Sep 2007	CapMan invests in Mawell
12 Sep 2007	OneMed healthcare group grows
	– signifi cant acquisition in Poland
18 Sep 2007	CapMan acquires commercial
	property in Konala, Helsinki

19 Sep 2007	CapMan RE II to develop a shopping centre in Hyvinkää
20 Sep 2007	Changes in CapMan Plc's management group and organisation
24 Sep 2007	CapMan applies for listing of the stock options 2003B on OMX Nordic Exchange Helsinki Oy
25 Sep 2007	Nominations in CapMan Group

October

2 Oct 2007	CapMan sells its shares in Affecto Plc
2 Oct 2007	CapMan acquires offi ce property in Jyväskylä
12 Oct 2007	B shares subscribed with stock options 2000A /B in CapMan Plc
25 Oct 2007	Invitation to CapMan Plc's Press Conference
31 Oct 2007	CapMan Plc Group Interim Report 1 January – 30 September 2007
31 Oct 2007	CapMan Plc's fi nancial reporting in 2008

November

1 Nov 2007 Mari Reponen appointed as CapMan's Communications Director

23 Nov 2007	B shares subscribed with stock options
	2000A/B and stock options 2003A
	in CapMan Plc
28 Nov 2007	Disclosure under chapter 2, section
	10 of the Securities Market Act

December

18 Dec 2007	CapMan exits Savcor
19 Dec 2007	CapMan acquires two retail properties
	in Turku
21 Dec 2007	CapMan sold Solid to IBM

Press release

Stock exchange release

The releases in their entirety are available on CapMan's Internet pages at www.capman.com.

Information for shareholders

ANNUAL GENERAL MEETING

The Annual General Meeting of CapMan Plc for 2008 will be held on Thursday, 27 March 2008 at 10:00 a.m. in the Diana Auditorium, Erottajankatu 5, Helsinki, Finland.

Attendance at the Annual General Meeting is open to shareholders who, by Monday, 17 March 2008, have been entered in the Company's Shareholder Register held by the Finnish Central Securities Depository Ltd.

The deadline for registration to attend the Meeting is Thursday, 20 March 2008 at 12:00 p.m. Finnish time. Shareholders can register either by written notice to CapMan Plc, Korkeavuorenkatu 32, 00130 Helsinki, Finland, on the Internet at www.capman.com/En/ InvestorRelations/AnnualGeneralMeetings, by telephone to Tiina Oikarainen to the number +358 207 207 519 or to Sanna Loikkanen to the number +358 207 207 536, by e-mail to [email protected], or by fax to +358 207 207 530. Registrations shall be received at CapMan prior to the expiration of the registration period. Any proxy by which the shareholder wishes to exercise his or her voting right shall be delivered to CapMan at the aforementioned postal address prior to the expiration of the registration period.

DIVIDEND

The Board of Directors proposes to the Annual General Meeting that a dividend of €0.16 per share will be paid for the year 2007. The dividend shall be paid to shareholders who are entered in the Shareholder Register held by Finnish Central Securities Depository Ltd on 1 April 2008, which is the record date for the dividend payment. The payment date will be 8 April 2008 in Finland.

CAPMAN PLC'S FINANCIAL REPORTING IN 2008

In 2008, CapMan Plc will publish its interim reports on the following dates:

Interim Report for 1 January – 31 March 2008 on Wednesday, 7 May 2008

Interim Report for 1 January – 30 June 2008 on Friday, 8 August 2008

Interim Report for 1 January – 30 September 2008 on Thursday, 30 October 2008

CapMan's fi nancial reports are published in Finnish and English. CapMan's Annual Report, interim reports, stock exchange releases and press releases can be viewed on CapMan's Internet pages at www.capman.com. CapMan's website also contains other information for investors. In addition, it is possible to subscribe to the Company's press releases electronically and order print copies of CapMan's Annual Report online.

Print copies of the Annual Report and interim report bulletins can also be ordered from CapMan Plc/ Communications, Korkeavuorenkatu 32, 00130 Helsinki, Finland, by telephone to Reetta Peltonen to the number +358 207 207 585, or by e-mail to [email protected].

CHANGES OF ADDRESS

The Finnish Central Securities Depository Ltd maintains registers of CapMan Plc's shares, shareholders and stock options. Shareholders are requested to make notifi cations of changes in their personal particulars and address directly to the Finnish Central Securities Depository or to their own account manager. Further information is available from the free customer helpline of the Finnish Central Securities Depository in Finland, tel. 0800 180 500 (Monday to Friday 9 a.m.–4 p.m., only in Finnish and Swedish). We regret that CapMan is unable to update changes of address.

ANALYSTS FOLLOWING CAPMAN PLC

Carnegie, Finland

Jussi Karhunen, tel. +358 9 6187 1233 [email protected]

Cazenove, London Christopher Brown, tel. +44 20 7155 8145 [email protected]

Glitnir, Finland

Kim Gorschelnik, tel. +358 9 6134 6234 [email protected]

Nordea, Finland Martti Larjo, tel. +358 9 3694 9429 [email protected]

OKO Bank, Finland

CapMan_3osa_fglENG.indd 108 19.2.2008 17:59:39

Mikael Nummela, tel. +358 10 252 4414 [email protected]

CapMan Plc CapMan Capital Management Ltd CapMan Real Estate Ltd CapMan RE II GP Oy CapMan Hotels RE GP Oy Realprojekti Oy

Korkeavuorenkatu 32 00130 Helsinki Finland Tel +358 207 207 500 Fax +358 207 207 510

CapMan Invest A/S

Esplanaden 7 1263 Copenhagen K Denmark Tel +45 35 26 02 12 Fax +45 35 26 02 14

CapMan AB

Grev Turegatan 30 P.O.Box 5745 114 87 Stockholm · Sweden Tel +46 8 545 854 70 Fax +46 8 545 854 89

CapMan Norway AS

Haakon VII's gate 1 P.O.Box 1235 Vika 0110 Oslo · Norway Tel +47 23 23 75 75 Fax +47 23 23 75 79

CapMan (Guernsey) Ltd CapMan Mezzanine (Guernsey) Ltd CapMan (Guernsey) Buyout VIII GP Ltd CapMan (Guernsey) Technology 2007 GP Ltd CapMan (Guernsey) Life Science IV GP Ltd

Hambro House, St. Julian's Avenue P.O.Box 86 · St. Peter Port Guernsey, GY1 3AE · Channel Islands Tel +44 1481 726 521 Fax +44 1481 710 376

www.capman.com

ANNUAL REPORT

2007

kannet_ENG.indd 1 15.2.2008 11:06:50

2007

Take a step forward with us.

AI Terminal

CapMan Oyj

3259_10-k_2008-03-10_efcde0e7-b5c3-405a-9db1-6291f5af76d6.pdf

CapMan

CAPMAN AS AN INVESTMENT

CEO's review

CONTINUED GROWTH OF THE ALTERNATIVE ASSET CLASS

STRONG RESULT IN 2007 HIGHLIGHTS THE SIGNIFICANCE OF REAL ESTATE INVESTMENT

"CapMan has delivered an exceptional result in 2007 and the Group has strong prerequisites for growth in the years ahead."

A STEP FORWARD

VALUATIONS HAVE RETURNED TO NORMAL LEVELS

SUSTAINABLE VALUE CREATION FOR THE LONG-TERM

Mission, vision and values

Our mission is to create

fi nancial returns through active ownership.

Jussi

Our vision is to be the preferred private equity and alternative assets partner

Jussi Paronen, Performance Monitoring Offi cer Dedication.

High Ethics.

Strategy and objectives

GROWTH IS BASED ON A WIDE PRODUCT RANGE AND NORDIC APPROACH

STRATEGY FOUNDED ON ACTIVE OWNERSHIP

FUTURE SUCCESS FACTORS

NEW ORGANISATION SUPPORTS GROWTH

CORNERSTONES OF CAPMAN'S STRATEGY

Wide range of fund products

Nordic approach

Objectives

Effective use of the balance sheet

Organisation

CapMan as an investment

PREREQUISITES FOR BUSINESS

LONG-TERM BUSINESS

MAIN SOURCES OF INCOME

HOW TO ANALYSE CAPMAN

Why to invest in CapMan's share?

When should individual investments be examined?

MAIN SOURCES OF INCOME

Management fees Carried interest Returns on direct fund investments

Direct fund investments at fair value as at 31 December 2007

Management fees have increased as a result of growth in capital under management

Carried interest income may fl uctuate in different years

…are refl ected in total income from own investments

A THEORETICAL EXAMPLE OF PRIVATE EQUITY FUND CASH FLOWS

Basic assumptions about the example fund

According to the assumptions

Cumulative cash fl ows during a fund's life cycle, M€

FINANCIAL OBJECTIVES

Key ratios for CapMan Group 2003–2007

* For the period July–December 2005.

Turnover and operating profi t Components of income and operating costs in 2007

Shareholders' equity per share

Shares and shareholders

SHARE CAPITAL

SHARE SERIES AND NUMBER OF SHARES

Key ratios per share

REDEMPTION OBLIGATION CLAUSE

SHARE LISTING AND TRADING CODE

MARKET VALUE DEVELOPMENT

Market value development

Trading and price of shares and stock options

CapMan B share trading and average price 1.1.2003 – 31.12.2007 Relative development of CapMan's B share and OMX indices 1.1.2003 – 31.12.2007

STOCK OPTION PROGRAM 2003

STOCK OPTION PROGRAM 2000

CHANGES IN OWNERSHIP

BOARD AND MANAGEMENT HOLDINGS

OWN SHARES

SHAREHOLDERS BY SECTOR AS AT 31 DECEMBER 2007

DIVIDEND POLICY

AUTHORISATIONS OF THE BOARD

INSIDERS

NOMINEE REGISTERED SHARES

Investor services

CUSTOMER DEMAND AND GROWTH POTENTIAL DRIVE NEW PRODUCTS

INVESTORS' ALLOCATIONS CONTINUE TO GROW

A SUCCESSFUL FUNDRAISING YEAR

FIRST-CLASS SERVICE AS A STARTING POINT

EFFECTIVE MONITORING SERVES ALL TEAMS

Investor Services in figures

Investor Services

**Investments and exits at cost 1997–2007, M€* Funds' cumulative portfolio at cost 1997–2007, M€**