Year-end Report 2010

Net asset value per share on 31 December 2010 amounted to EUR 12.33 (EUR 9.61). The total net asset value amounted to EUR 430m (EUR 341m), corresponding to an increase of 8.0% (5.1%) during the fourth quarter (q-on-q) and an increase of 25.9% (28.8%) since 31 December 2009
For the full year, the net profit amounted to EUR 115m (EUR 99m), including EUR 86m (EUR 109m) unrealized value gain on investments. Earnings per share amounted to EUR 2.55 (EUR 2.26). During the fourth quarter, the net profit was EUR 38m (EUR 19m), including EUR 35m (EUR 19m) unrealized value gain on investments. Earnings per share amounted to EUR 0.85 (EUR 0.46)
Cash, cash equivalents and other short-term investments on 31 December 2010 amounted to EUR 44m (EUR 88m), corresponding to EUR 1.27 (EUR 2.47) per share
In December 2010, East Capital Explorer made a direct investment of EUR 6.8m in Wimm-Bill-Dann Foods, a leading dairy and juice company in Russia. The company is in the process of being acquired by PepsiCo and East Capital Explorer expects to realize a premium of approximately 12% from the average price paid for the shares upon completion of the buyout during the second quarter of 2011
The total net asset value on 31 January 2011 amounted to EUR 438m, corresponding to EUR 12.55 (SEK 111) per share. Cash, cash equivalents and other short-term investments per the same date amounted to EUR 44m (SEK 385m) corresponding to EUR 1.25 (SEK 11) per share. EUR 28m (SEK 250m) of those were available for future investments
As East Capital Explorer is now fully invested, the Board of Directors has decided to change the dividend policy to start paying dividends, and to propose to the Annual General Meeting a dividend of SEK 0.80 per share for the fiscal year 2010
East Capital Explorer has decided to invest an additional EUR 5m in East Capital Bering Balkan Fund. East Capital Explorer will invest in newly issued shares that will be received in the beginning of March 2011

						Value	Value
PORTFOLIO ON 31 DECEMBER 2010	Fair Value 31	NAV/		Fair Value 30	Fair Value 31	increase	increase
	Dec 2010,	Share,	% of	Sep 2010,	Dec 2009,	Jan-Dec	Oct-Dec
	tEUR	EUR	NAV	tEUR	tEUR	2010, %1)	2010, %1)
Fund Investments
East Capital Bering Russia	42,802	1.23	10	37,712	33,130	29.2	13.5
East Capital Bering Ukraine Class A	7,881	0.23	2	7,389	1,745	16.8	6.7
East Capital Bering Ukraine Class R	6,360	0.18	1	5,592	5,308	19.8	13.7
East Capital Bering Balkan	42,007	1.21	10	42,926	35,262	4.3	-2.1
East Capital Bering Central Asia	25,361	0.73	6	21,230	20,989	20.8	19.5
East Capital Bering New Europe	19,066	0.55	4	18,394	16,767	13.7	3.7
East Capital Power Utilities Fund	93,417	2.68	22	85,291	73,394	54.9	9.5
East Capital Special Opportunities Fund	58,581	1.68	14	52,478	39,293	49.1	11.6
East Capital Special Opportunities Fund II	37,065	1.06	9	0	0	5.9	5.9
East Capital (Lux) Eastern European Fund	15,391	0.44	4	13,698	11,467	34.2	12.4
Total Fund Investments	347,932	9.98	81	284,711	237,355	30.4	8.8
Direct Investments
Melon Fashion Group	13,800	0.40	3	10,402	10,402	32.7	32.7
TEO LT	15,177	0.44	4	11,388	8,860	34.3	9.2
East European Debt Finance	320	0.01	0	320	0	-7.6	0.2
Populi	3,604	0.10	1	3,667	0	-1.9	-1.7
Wimm-Bill-Dann	7,137	0.20	2	0	0	4.4	4.4
Total Direct Investments	40,038	1.15	9	25,776	19,262	23.2	14.0
Short-term Investments
Short-term Investments	26,494	0.76	6	41,523	38,397
Cash and cash equivalents	17,833	0.51	4	47,325	50,314
Total Short-term Investments	44,327	1.27	10	88,848	88,711
Total Portfolio	432,297	12.40	101	399,336	345,328
Other assets and liabilities net	-2,444	-0.07	-1	-1,413	-3,958
Net Asset Value (NAV)	429,853	12.33	100	397,923	341,369	25.9	8.0

1) The value increase calculation is adjusted for investments and distributions during the period, i.e. it is the percentage change between the starting fair value plus any added investment during the period and the ending fair value plus any proceeds from divestments or dividends received during the period. It includes additional investments of EUR 5m into East Capital Bering Ukraine A and East Capital Bering Balkan, an investment of EUR 0.3m into East European Debt Finance, as well as the receipt of EUR 0.7m after tax as dividend from TEO LT, and the receipt of EUR 20.3m as dividend from East Capital Power Utilities Fund during the first six months; and additional investments into TEO of EUR 3.0m and the new investments of EUR 35m into East Capital Special Opportunity Fund II, EUR 3.7m into Populi and EUR 6.8m into Wimm-Bill-Dann.

Comparable figures for the corresponding period 2009 are stated in parentheses. Note that certain numerical information may not sum due to rounding.

CEO COMMENTS ON THE FOURTH QUARTER

Our NAV has continued its steady upward climb, increasing another 8% in fourth quarter and 26% during 2010. In fact, since our NAV reached the lowest point two years ago (EUR 7.13 per share in February 2009), it has increased during all but two months and is up by 76%.

"Our NAV has continued its steady upward climb"

2010 was a good year for emerging markets, including our markets in Eastern Europe. Our countries have recovered better than expected and are growing again. Eastern Europe has adjusted well and growth should now be on a much more stable footing. Risks still exist, as always, but recent events in Eurozone periphery and Middle East have once again reminded us that risks exist in both developed and emerging markets. Most of the countries in Eastern Europe actually stand out in a positive light in terms of political and financial stability.

Now that the company is fully invested, the Board of Directors has decided to propose to the Annual General Meeting in April that a dividend of SEK 0.80 per share be paid to shareholders. We are happy to have reached this important milestone in the company"s development and consider that this should further increase the attractiveness of the investment case of East Capital Explorer.

During the quarter, our focus was on completing the already announced investments and working with existing investments in the portfolio. As a new investment, we bought shares in Wimm-Bill-Dann as we saw an attractive arbitrage opportunity for deploying part of our cash for a few months.

"The Board of Directors proposes that a dividend of SEK 0.80 per share be paid to shareholders"

Our single largest holding, Fondul Proprietatea, was successfully listed in January on the Bucharest Stock Exchange, and its share price was up 27% on the first day of trading and has remained strong since then. Also, a substantial dividend was paid by Fondul Proprietatea during the fourth quarter. These, along with Franklin Templeton taking over the management of the company, were three very positive developments. After the listing, the fund manager decided to sell part of the position to lock in the gains.

Our fund investments have continued to perform well. During the fourth quarter, the East Capital Bering Central Asia Fund had the best performance, growing 19%. For the whole year, the Power Utilities Fund was the best performer with 55% and the Special Opportunities Fund in second place with 49%. We are pleased that these two best performing funds are also the two largest funds in our portfolio.

We have also decided to add EUR 5m to the East Capital Bering Balkan Fund. The Balkan markets are still significantly below the pre-crisis levels and have only recently started to perform, so the investment manager considers it a good timing to increase our exposure to this region again.

TEO, our largest direct investment, has continued to perform well. Although year-on-year revenues were marginally lower, net profit was up by 8.5%, as the company"s management has been very good at cost control. We expect TEO to pay a sizeable dividend in May. We added EUR 2.5m worth of shares during the quarter.

Melon Fashion Group, our second largest direct investment, ended the year on a very strong note. First of all, it now has over 500 shops, nearly double what it had a year ago. Sales during the quarter were EUR 39.5m, up 117% compared to the same period of 2009. For the full year, sales were EUR 117m, 65% higher than in 2009. Sales in comparable shops during the fourth quarter were up 47%, 14% for the full year. We are very pleased that Melon Fashion Group"s management has successfully renewed its focus on efficiency and profitability improvements. An independent valuation of MFG completed in December resulted in revaluation of the holding by 33%.

"Our single largest holding, Fondul Proprietatea, was successfully listed in January"

Sales in Populi, the Georgian food retailer in which we made a direct investment last October, have developed in a satisfactory manner. Revenues were up by 28% during the quarter, and 11% for the full year, taking the total for 2010 to EUR 34m. Populi also finished work on its new production and distribution center, which is the most modern one not just in Georgia but the entire Caucasus region.

The Board of Populi learned in December that the former CEO had incurred a liability of approximately USD 2m without consultation with the Board. Fortunately this does not have a material impact on East Capital Explorer"s NAV. The Board of Populi asked the CEO to resign and is taking action to protect the company"s interests. It is likely that the company will require more capital in the near future.

Our direct investment into Komercijalna Banka Skopje was not closed last year as had been expected. The bank has continued to develop in a positive way. We have now subscribed for shares in the ongoing share issue and anticipate that the transaction will close within this quarter.

We expect the remainder of our cash to be invested shortly. Now that we are fully invested, the focus continues to be on working actively with the existing investments in our portfolio in order to further increase value for our shareholders.

Gert Tiivas, CEO

Top 10 in East Capital Explorer on a see-through basis1)
		Value in portfolio			Market Cap2) 31
Company	% of NAV	31 Dec, EURm	Country	Sector	Dec 2010, EURm	East Capital Explorer's Investment Vehicles
Fondul Proprietatea	5.7	24.5	Romania	Financials	1,641	East Capital Bering Balkan, East Capital Special Opportunities Fund
TEO LT	4.8	20.8	Lithuania	Telecommunication Services	557	East Capital Special Opportunities Fund, East Capital (Lux) Eastern Europe, Direct investment
Melon Fashion Group	3.2	13.8	Russia	Consumer Discretionary	86	Direct investment
Wimm-Bill-Dann	2.6	11.3	Russia	Consumer Staples	4,116	East Capital Special Opportunities Fund II, East Capital (Lux) Eastern Europe, East Capital Bering Russia, Direct Investment
Sibirskiy Cement	2.5	10.9	Russia	Materials	530	East Capital Special Opportunities Fund
MRSK Holding	2.2	9.3	Russia	Utilities	5,391	East Capital Power Utilities Fund, East Capital (Lux) Eastern Europe
Sollers	1.9	8.3	Russia	Consumer Discretionary	542	East Capital Power Utilities Fund, East Capital (Lux) Eastern Europe
OGK-6	1.7	7.4	Russia	Utilities	1,139	East Capital Power Utilities Fund
OGK-4	1.7	7.2	Russia	Utilities	4,551	East Capital Power Utilities Fund
MRSK Centre Volga	1.6	7.0	Russia	Utilities	837	East Capital Power Utilities Fund, East Capital (Lux) Eastern Europe
Total Top 10	28.0	120.5

1) As if East Capital Explorer AB had owned its pro-rata share of all the underlying securities in the different funds it had invested in.

2) Listed company values based on prices from Bloomberg. Fondul Proprietatea value is based on OTC market quotes. Melon Fashion Group market cap is implied by the value of East Capital Explorer´s share of the company.

* Includes cash, cash equivalents and other short-term investments of EUR 44m in addition to any cash in the underlying funds per 31 December 2010

NET ASSET VALUE

The net asset value on 31 December 2010 amounted to EUR 430m (EUR 341m), corresponding to EUR 12.33 (EUR 9.61) per share. This corresponds to an increase of 25.9% compared to the net asset value on 31 December 2009 and an increase of 8.0% compared to the net asset value on 30 September 2010.

On 31 December 2010, cash, cash equivalents and other shortterm investments amounted to EUR 44m (EUR 88m), corresponding to EUR 1.27 (EUR 2.47) per share, which was 10% (26%) of the total net asset value per share. The closing price per share on 31 December 2010 was SEK 84.75 (corresponding to EUR 9.43).

Net asset value, share price and index development

	1 Jan – 31 Dec	1 Jan – 31 Dec
(% change in EUR)	2010	2009	Jan 2011
Net asset value per share	28.3	31.5	1.7
East Capital Explorer share1)	44.9	78.1	6.5
SAX2)	40.4	56.5	0.8
RTS Index3)	31.1	123.0	3.3
RTS 2 Index4)	82.1	85.4	5.4
MSCI EM Europe5)	22.5	76.6	-0.3

1) East Capital Explorer AB share price change in SEK was +26.5% for 2010, +66.7% for 2009 and +4.7 % for January 2011.

2) SAX Index includes all equities listed on NASDAQ OMX Stockholm.

3) RTS Index includes the 50 largest companies traded on the Russian Trading System.

4) RTS 2 Index includes 78 companies on the RTS that have limited trading volumes.

5) MSCI EM Europe Index includes Russian, Polish, Hungarian, Czech and Turkish equities.

Portfolio overview

Per 31 December 2010, East Capital Explorer held fund and direct investments totaling EUR 388m compared to EUR 257m on 31 December 2009.

EAST CAPITAL BERING RUSSIA FUND

The aim of the fund is to achieve long term capital appreciation from investments in Russian equities, both listed and unlisted.

At the end of the reporting period East Capital Explorer´s share of the fund was 34%.

Fund Performance
	Oct-Dec 2010	Jan-Dec 2010	Since Dec 2007
East Capital Bering Russia Fund, EUR1)	14%	35%	-40%
RTS-2 Index, EUR2)	17%	68%	2%

Source: Bloomberg

1) Data representing the fund's master series.

2) The Russian Trading System Second-tier Stock Index is the Russian mid-cap stock market index composed of 78 companies on the RTS that have limited trading volumes.

Sector weighting			Country weighting
Sector	% of fund	Country	% of fund
Industrials	24.2	Russia	85.3
Energy	19.3	Kazakhstan	6.1
Materials	15.8	Ukraine	6.1
Consumer Discretionary	13.1	Baltics	1.7
Financials	12.4	United Kingdom	0.7
Health Care	4.8	Other	0.1
Consumer Staples	4.3
Other	6.1

10 largest holdings

	Weight % of fund
	Q4	Q3	%
Company	2010	2010	Perf.1	Country	Sector
FESCO	11.5	10.1	27.3	Russia	Industrials
Rosinter	7.4	5.6	33.1	Russia	Cons. Discr.
Kuzbass Razrezugol	7.4	7.3	12.4	Russia	Energy
Bank Tsentrkredit	5.9	6.1	9.1	Kazakhstan	Financials
Korshunovsky GOK	5.5	5.1	21.2	Russia	Materials
Verofarm	4.4	3.7	33.2	Russia	Health Care
Neftekamsky Avto	4.2	4.1	13.2	Russia	Industrials
Nova Liniya	4.0	4.1	9.8	Ukraine	Cons. Discr.
Ufimsky NPZ	3.4	3.8	0.3	Russia	Energy
Wimm-Bill-Dann	3.2	-	148.3	Russia	Cons. Staples

10 largest holdings (% of portfolio)	Unlisted holdings (% of portfolio)				Total number of holdings
56.9			8.6		105

1) Share price development in USD during the fourth quarter 2010.

Portfolio comment fourth quarter

Jacob Grapengiesser, Partner and member of the Portfolio Management team, East Capital

FESCO Holding, a leading Russian transportation and logistics company, shares were up 27% during the fourth quarter of 2010 and it was once again a top performer. The reasons for the strong performance were the successful sale of its subsidiary, National Container Company (NCC), for USD 900m (at 15 times Ebitda) and rumors that FESCO might cooperate closer with Transcontainer going forward. FESCO used part of the proceeds from the sale of NCC to buy a 12% stake in Transcontainer during its IPO, and has announced an interest in acquiring a controlling stake over time. Synergies are estimated to be sizable, but have not yet been quantified.

However, the increasing size should also be positive and the combined company would have a market cap of more than USD 3bn. After this good run, the shares are trading close to those of its best peer Globaltrans, i.e. at around 7 times Ebitda, which is historically cheap for the sector. East Capital"s board representative is taking an active role in shaping the new strategy of the company.

Another strong performer was Rosinter, the leading casual dining chain operator in Russia and the CIS, which has been publishing numbers depicting a strong recovery in traffic in restaurants for several consecutive months, with sales growing at 18% year-on-year. The share price gained 33% over the quarter. Rosinter is in a growth stage and plans to grow by 15%-20% per year in the next 3 years. The management intends to discuss a dividend policy shortly, and possible acquisitions in the beer and grill segment. It is trading at 9 times 2011 Ebitda, which is almost in line with emerging market peers. It means, however, a 50% discount on recent transaction multiples in the Russian retail and consumer universe, where, for instance, Pepsi recently acquired Wimm-Bill-Dann at 18 times 2011 Ebitda.

The worst contributors to the fund"s performance were again the construction companies Bamtonnelstroy and Transsignalstroy. They continued to perform poorly in the fourth quarter after a disappointing share price development in the third quarter. Bamtonnelstroy lost 58% and Transsignalstroy fell by 43%.

Bamtonnelstroy"s revenues in the first nine months of 2010 contracted by 61% (year-on-year). As reported last quarter, the major shareholder decided to transfer its construction business to affiliated companies and to lease equipment away. We believe deals were approved in violation of corporate law, and together with a pool of other minority shareholders we are taking measures to address this corporate governance case. The best exit would be to swap shares for the top holding company, SK Most.

The Transsignalstroy"s management told us that in 2011, railroad capital expenditures should return to normal levels at Russian Railroads, and that the company"s revenues from that segment should recover. Transsignalstroy is still trading 75% below peak levels in 2008.

EAST CAPITAL BERING UKRAINE FUND CLASS A

The aim of the fund is to achieve long term capital appreciation from investments in Ukrainian equities. Since 1 January 2010, the East Capital Bering Ukraine fund is split into two classes: East Capital Bering Ukraine Fund Class A, comprising listed holdings; and East Capital Bering Ukraine Fund Class R that comprises the illiquid private equity assets.

At the end of the reporting period East Capital Explorer´s share of the fund was 29%.

Fund Performance
	Oct
	Dec	Jan-Dec	Since
	2010	2010	Jan 2008
East Capital Bering Ukraine Fund Class A, EUR1)	7%	83%	-46%
PFTS Index, EUR2)	28%	87%	-42%

Source: Bloomberg

1) Data representing the fund's master series.

2) The PFTS Index is the Ukraine stock market index composed of the twenty largest shares on the stock exchange in Kiev.

Sector weighting		Country weighting
Sector	% of fund	Country	% of fund
Consumer Staples	39.8	Ukraine	96.6
Utilities	17.6	Russia	3.1
Consumer Discretionary	16.2	Germany	0.2
Materials	9.9	Other	0.1
Financials	7.2
Energy	6.5
Health Care	1.3
Telecom. Services	1.1
Industrials	0.3
Other	0.1

10 largest holdings
	fund	Weight % of
Company	Q4 2010	Q3 2010	% 1 Perf.	Country	Sector
Galnaftogaz	14.3	19.4	-5.4	Ukraine	Cons. Discr.
Centrenergo	12.6	10.1	18.3	Ukraine	Utilities
Kreativ Gruppa	9.2	7.1	2.6	Ukraine	Cons. Staples
Retail Group	8.5	4.5	32.1	Ukraine	Cons. Staples
Slavutich	8.1	4.9	18.0	Ukraine	Cons. Staples
Avangard	5.4	5.2	-2.7	Ukraine	Cons. Staples
Ukrnafta	5.2	2.3	113.2	Ukraine	Energy
Bank Forum	4.4	4.6	-10.2	Ukraine	Financials
Poltavsky GOK	3.8	3.5	2.7	Ukraine	Materials
Russkoe Zerno	2.9	2.9	-5.6	Russia	Cons. Staples
10 largest holdings (% of portfolio)	Unlisted holdings (% of portfolio)				Total number of holdings
74.4			0.5		34

1) Share price development in USD during the fourth quarter 2010

Portfolio comment fourth quarter

Aivaras Abromavicius, Partner and member of the Portfolio Management team, East Capital

2010 was a very good year for Ukrnafta in general, while the fourth quarter of 2010 was particularly strong. Investors paid particular attention to Ukrnafta, the largest oil and gas company in the country, largely for two reasons. First, the company"s operational outlook improved considerably during the year. Second, rumors of a change in shareholders reached the market. The government has brought Ukrnafta"s selling oil price to virtually market levels, and the domestic energy market regulator hiked gas prices for households from previously

economically unjustifiable levels by 50% in August 2010. Not unimportantly, Ukrnafta is expected to resume the sale of gas directly to industrials without any intermediaries thanks to a beneficial court ruling. All these actions removed regulations that had previously depressed Ukrnafta"s revenues. The rally in the fourth quarter was spurred by rumors that Private Group, one of the two main shareholders, was about to sell its 42% stake in the company. The Group is known for its questionable corporate governance practices, and therefore its exit would be welcomed. All in all, Ukrnafta skyrocketed by 113.2% during the quarter. The recent rally, however, inflated the valuation: with an enterprise value of 5.8 times estimated 2011 Ebitda and a price-earnings ratio of 9.8, Ukrnafta trades at a 56% premium on Eastern European peers.

Electricity generating companies occupied much of the attention at the end of the quarter. Centrenergo, the most liquid of the four Ukrainian listed generation companies, gained 18.3% during the quarter. However, the attention was mainly on old stories that had not yet been realized, which investors chose to dust off again. First, the market was anticipating a long awaited electricity tariff increase for households that the government had been postponing during the autumn in its effort to curb inflation. Noticeably, Ukraine"s residential tariff of UHA 0.05 per kilowatt hour is the lowest in Europe (at the time of writing, starting from February, the government has agreed to increase the tariffs by 30% in the first hike, which is less than the market had anticipated). Second, the government is expected to resume privatization of the sector in 2011.

The fourth quarter saw more activity in selected less liquid names. Retailers Anthousa (operates under the name Furshet) and Retail Group (Velykaya Keshenya) were strong contributors to the performance. Both were positively affected by encouraging growth figures in retail sales, consumer confidence and increasing purchasing power. The brewery Slavutich meanwhile gained 18.0% during 2010 and was overall a rather successful year for the company. In a market that showed no growth last year, Slavutich continued to expand its market share and managed to boost the output by an estimated 5%. In addition, the holding company, Carlsberg Group, is in the process of completing a, for Slavutich value-creating, merger with the other Ukrainian subsidiary – Lviv Brewery. The oils and fats producer Kreativ Gruppa had another strong quarter, returning 12.1% after having announced that by the end of 2011 it will launch a new complex that will focus on pork production. Due to a strong operational outlook coupled with undemanding valuations at enterprise value of 4 times estimated 2011 Ebitda, we increased our positions in both Kreativ Gruppa and Slavutich during the quarter.

After some exceptional growth during the first three quarters of 2010, Galnaftogaz fell 5.4% in the fourth quarter. Some turbulence was also caused by the government"s approval of a 40% increase in excise taxes for oil products starting from 2011, yet the market anticipates that the companies will pass this on to the end consumers.

EAST CAPITAL BERING UKRAINE FUND CLASS R

At the end of the reporting period East Capital Explorer´s share of the fund was 12%.

Fund Performance
	Oct-Dec 2010	Jan-Dec 2010	Since Dec 2009
East Capital Bering Ukraine Fund Class R, EUR1)	14%	20%	20%
PFTS Index, EUR2)	28%	87%	87%

Source: Bloomberg

1) Data representing the fund's master series.

2) The PFTS Index is the Ukraine stock market index composed of the twenty largest shares on the stock exchange in Kiev.

Sector weighting		Country weighting
Sector	% of fund	Country	% of fund
Financials	43.4	Ukraine	94.3
Consumer Discretionary	34.6	Baltics	5.7
Consumer Staples	16.3	Other	0.0
Information Technology	4.0
Industrials	1.7
Other	0.0

Holdings
	fund	Weight % of
	Q4	Q3	%
Company	2010	2010	Perf.¹	Country	Sector
Nova Liniya	33.9	35.0	9.8	Ukraine	Cons. Discr.
Kantik	21.5	19.4	25.3	Ukraine	Financials
Henryland	19.9	18.3	23.4	Ukraine	Financials
Chumak	16.0	18.1	-8.2	Ukraine	Cons. Staples
ELKO	3.9	3.2	37.0	Baltics	IT
Trev-2 Grupp	1.7	1.8	-1.5	Baltics	Industrials
Sablink	1.1	0.9	38.3	Ukraine	Financials
Holdings (% of portfolio)	Unlisted holdings (% of portfolio)			Total number of holdings
100			100		7

1) Share price development in USD during the fourth quarter 2010

Portfolio comment fourth quarter

Aivaras Abromavicius, Partner and member of the Portfolio Management team, East Capital

Real Estate continues to be the largest sector in the Bering Ukraine R Fund, with a share of 41% invested in two holdings, Kantik and Henryland. The two real estate holdings were also the best performers of the fund during the quarter. At the end of 2010, the property portfolio of Kantik was revalued up by 11.6% or USD 5.7m by an independent appraiser on the back of slight yield compression and also an escalation of rent rates. At the same time, the company"s strong generation of operating cash flow and a decrease in net debt, helped increase Kantik"s NAV by 25.3% over the period.

On the operational side, the commercial concept of Bucha remains a success story. Retailers are actively taking up small remainders of space in the property. Tenants that pay turnoverlinked rent posted strong sales, which resulted in higher than expected rent collections. In order to fully capitalize on the success of the Modulj SC concept of Bucha, the management has started re-branding the Simferopol concept to Modulj as well. Due to the ongoing recovery on the real estate market and with potential tenants now becoming more and more active, the management also started considering options to accommodate this demand by increasing gross leasable area in both Simferopil and Borispil.

The property portfolio of Henryland was revalued up by USD 5.3m. In addition to the triggers for revaluation mentioned above, the settlement of some of the outstanding construction cost payables for the Odessa property was an important factor. The NAV of Henryland thus increased by 23.4% in during the quarter. Management is actively exploring options to roll out new developments, in particular Bila Tserkva, as retailers are becoming more active due to the country"s improving economy.

The end of 2010 saw a very welcome recovery for Chumak"s sales growth, one of the largest food producers in the Ukraine, with November and December revenue up 25% and 19% yearon-year, respectively - the highest monthly growth numbers since 2008. The bulk of the growth came from the core ketchup segment, supported by an advertising campaign during November. Chumak"s profitability during the quarter was, however, lower than anticipated, due to increased input prices for mayonnaise and lower-than-planned prices for pasta. The Chumak holding underwent an external valuation performed by Ernst & Young, which resulted in a decision to write down the value of Chumak by 10% on 31 January 2011. The formal valuation followed a preliminary finding by the valuer, which resulted in writing down the value of Chumak by 8% at the end of the reporting period.

Nova Liniya"s performance in 2010 was not spectacular, marked with single-digit revenue growth and poor profitability. Part of the reason is to be found in the weak market however, where do-it-yourself sales are normally a latecomer in the business cycle. There is room for considerable operational improvement going forward. The cost-saving plan has been adopted, and further changes are to be implemented during 2011. An external valuation of Nova Liniya was completed by Ernst & Young during December 2010, resulting in a 9.8% quarter-on-quarter increase in the value, mainly due to the decrease in the weighted average cost of capital by 3 percentage points.

EAST CAPITAL BERING BALKAN FUND

The aim of the fund is to achieve long term capital appreciation from investments in Balkan equities, both listed and unlisted.

At the end of the reporting period East Capital Explorer´s share of the fund was 52%.

Fund Performance
	Oct-Dec 2010	Jan-Dec 2010	Since Dec 2007
East Capital Bering Balkan Fund, EUR1)	-2%	11%	-48%

Source: Bloomberg

1) Data representing the fund's master series.

Sector weighting		Country weighting
Sector	% of fund	Country	% of fund
Financials	64.9	Romania	41.3
Consumer Staples	13.6	Serbia	18.7
Consumer Discretionary	9.9	Turkey	14.2
Telecom. Services	5.1	Slovenia	9.8
Industrials	2.5	Bosnia	6.4
Materials	2.1	Macedonia	5.2
Energy	1.3	Montenegro	3.4
Utilities	0.4	Croatia	0.9
Health Care	0.2	Other	0.0
Other	0.0

10 largest holdings
	Weight % of fund
	Q4	Q3	%
Company	2010	2010	1 Perf.	Country	Sector
Fondul
Proprietatea	23.5	21.1	2.1	Romania	Financials
Pinar Et Ve Un	7.3	6.0	4.9	Turkey	Cons.Staples
Abanka	6.0	4.8	13.8	Slovenia	Financials
B92	5.2	5.5	-76.4	Serbia	Cons. Discr.
Komercijalna
Banka Skopje	4.5	3.1	5.0	Macedonia	Financials
Aik Banka	2.9	2.1	24.9	Serbia	Financials
Pinar Sut	2.7	1.6	39.9	Turkey	Cons.Staples
Montenegro					Telecom.
Telekom	2.6	1.1	2.7	Montenegro	Services
Impact	2,5	2.1	6.9	Romania	Financials
Agrobanka	2.4	2.2	1.2	Serbia	Financials

10 largest holdings	Unlisted holdings
(% of portfolio)	(% of portfolio)			Total number of holdings

59.6			31.1		67

1) Share price development in USD during the fourth quarter 2010

Portfolio comment fourth quarter

Jacob Grapengiesser, Partner and member of the Portfolio Management team, East Capital

The largest holding in the fund, Romanian restitution fund Fondul Proprietatea, gained 2.1% during the fourth quarter. During the quarter, Fondul Proprietatea paid dividends yielding 30.8% after tax, based on the average acquisition price of the shares in the fund. See the portfolio comment regarding East Capital Special Opportunities Fund below for details regarding recent performance and events in the portfolio company including its initial public offering.

The performance of the fund was negatively impacted by B92, the Serbian media company. We have been actively trying to get the management to accept that a strategic owner should buy a majority stake of the company. This has not been an easy task, as the management owned close to a majority, and together with a management-friendly shareholder, a majority. The reason for allowing a strategic owner to get a majority stake is threefold: 1) to better control costs, which management

has not done very well so far; 2) to work to increase viewer ratings; 3) to achieve a potential trade sale, which could entail a very good return on the investment. During the summer, we found our preferred partner in terms of a strategic owner that could achieve the above three goals. Together with this strategic partner, we entered into a deal whereby the strategic owner and East Capital were the only buyers of newly-issued shares, at a very low price, and two other shareholders were bought out. The transaction involved many complications, many of them due to the very good price. But after 15 trips to Belgrade, we managed to close the transaction. However, the existing shares have been significantly revalued downwards as the company is now valued at the average price for the transaction, which we believe is very low. This explains the drop in the valuation of the holding. At the current price and taking into account the financial expectations after restructuring, B92 is valued at an enterprise value of 3.3 times Ebitda for 2012, a 60-70% discount on peer valuations. With the new ownership structure and management in place, B92 seeks to capitalize on its new strategy in the mid-term.

Among the best performers in the fund during the quarter was Abanka, Slovenia"s third-largest bank by assets. The stock gained 13.8% during the fourth quarter, as Sava (which controls 23.8% of Abanka), together with other investors, made public their agreement to sell a majority stake in the bank.

In Turkey, we increased our exposure in the two consumer goods companies, Pinar Sut (milk producer) and Pinar Et (meat processor). At the end of 2010, 10% of the fund was invested in the two companies. According to the management, the margin pressure is over in both segments. Pinar Sut trades at around 8.5 times 2010 price-earnings ratio and is expected to pay dividends yielding around 8%, while Pinar Et trades at around 7.4 times 2010 price-earnings ratio and the dividend yield is expected to be close to 10%.

EAST CAPITAL BERING CENTRAL ASIA FUND

The aim of the fund is to achieve long term capital appreciation from investments in Central Asian equities, both listed and unlisted.

At the end of the reporting period East Capital Explorer´s share of the fund was 41%.

Fund Performance
	Oct-Dec 2010	Jan-Dec 2010	Since Jan 2008
East Capital Bering Central Asia Fund, EUR1)	21%	26%	-42%
KASE Index, EUR2)	15%	5%	-42%

Source: Bloomberg

1) Data representing the fund's master series.

2) The Kazakhstan Stock Exchange index is composed of the seven most traded

companies on the exchange. Sector weighting Country weighting Sector % of fund Country % of fund

Financials	50.4	Georgia	42.8
Energy	32.0	Kazakhstan	41.9
Consumer Staples	11.6	Turkmenistan	10.1
Materials	4.7	Ukraine	3.4
Utilities	1.0	Armenia	1.3
Telecommunication Services	0.2	Russia	0.4
Other	0.1	Uzbekistan	0.1
		Other	0.0

10 largest holdings
	Weight % of fund
	Q4	Q3
Company	2010	2010	1 % Perf.	Country	Sector
Bank of Georgia	28.3	26.7	43.9	Georgia	Financials
Kazmunai Gas EP	12.8	8.9	11.9	Kazakhstan	Energy
Dragon Oil	9.5	9.6	20.3	Turkmenistan	Energy
Bank Tsentrkredit	7.5	7.9	9.1	Kazakhstan	Financials
Caucasus Agro Development	6.0	7.1	-4.9	Georgia	Cons. Staples
Chagala Group	5.3	5.6	6.1	Kazakhstan	Energy
Halyk Bank	4.6	4.4	18.3	Kazakhstan	Financials
Populi	3.7	4.2	-1.5	Georgia	Cons. Staples
Henryland	3.3	3.0	23.4	Ukraine	Financials
Steppe Cement	2.0	1.3	13.9	Kazakhstan	Materials
10 largest holdings (% of portfolio)	Unlisted holdings (% of portfolio)				Total number of holdings
83.0			13.9		109

1) Share price development in USD during the fourth quarter 2010

Portfolio comment fourth quarter

Aivaras Abromavicius, Partner and member of the Portfolio Management team, East Capital

Similarly to the third quarter, the largest holdings in the portfolio, namely banks and oil companies, showed impressive gains, offsetting the losses suffered in the first half of 2010. Bank of Georgia, the largest holding, surged by 43.9%, accounting for more than half of the positive performance of the fund. The bank is well-capitalized, has a liquid balance sheet and loan book of decent quality, with 4.7% non-performing loans at the end of the first nine months of 2010, compared to 30% for the Kazakh banking sector as a whole. The stock is currently trading at 1.5 times book value, which is above the Kazakh average of 1 times book value yet still 20% below its Russian peers.

After a prolonged period of stagnant performance, gains finally came from the Kazakh banking sector. Halyk Bank"s appreciated by 18.3%, while Bank Tsentrkredit gained 9.1% during the quarter. While the asset quality and very limited lending growth remain major concerns, 2011 should be a better year. First, some improvements are expected following the introduction of a new regulation that would make it possible to write off bad loans without adverse tax effects. This would allow the banks to clear the loan books and create more transparency around the quality of their balance sheets. Second, on the lending side, the outlook for 2011 is moderate (in single digits), but still positive, with most activity likely coming from consumer lending (up 8% in the first 11 months of 2010). Halyk Bank, which is listed on the London Stock Exchange, and locallytraded Bank Tsentrkredit are now trading at approximately 10% and 50% discounts on Russian peers valued at 1.6 times and 0.8 times book value respectively.

After a falling share price in the first nine months of the year, Kazmunai Gas EP (KMG EP), a Kazakh oil producer, gained 11.9% in the last quarter, hopefully marking a new trend. The stock has been hit by negative news flows throughout the year. Having declined over 26% on a twelve month basis, KMG EP underperformed all Russian oil and gas peers, and the company is trading at 6 times 2011 price-to-earnings ratio and a 20% discount to Russian peers. During the quarter the fund increased its exposure to KMG EP. Another out-performer in this sector was Dragon Oil, an oil company with assets in Turkmenistan, up 20.3% on good drilling results and the completion of the infrastructure upgrade supporting management"s 10-15% production growth guidance for this year. During our last meeting at Dragon Oil head-quarters in Dubai, the company highlighted its strategic focus on potential mergers and acquisitions in the region, which can further enhance its production growth.

The laggards were among the private equity and minor holdings. Caucasus Agro Development, a Georgian agro company, was written down by somewhat to reflect a more conservative valuation. On the operating side, the company is on track to completing the upgrade of its farm facilities.

The fund sold its stake in ENRC, a Kazakh ferrochrome producer, on concerns over its mergers and acquisitions and litigation related issues, and increased its exposure to Steppe Cement, a Kazakh cement producer, through participation in its capital increase.

EAST CAPITAL BERING NEW EUROPE FUND

The aim of the fund is to achieve long term capital appreciation from investments in Central European and Baltic equities, both listed and unlisted.

At the end of the reporting period East Capital Explorer´s share of the fund was 86%.

Fund Performance
	Oct Dec 2010	Jan-Dec 2010	Since May 2008
East Capital Bering New Europe Fund, EUR1)	4%	16%	21%

Source: Bloomberg

1) Data representing the fund's master series.

Sector weighting		Country weighting
Sector	% of fund	Country	% of fund
Industrials	18.3	Poland	62.9
Materials	17.5	Hungary	18.3
Consumer Staples	16.9	Slovakia	6.2
Consumer Discretionary	13.9	Baltics	5.1
Utilities	13.1	Estonia	2.9
Information Technology	9.3	Czech Rep.	1.9
Financials	7.0	Other	2.7
Energy	3.7
Health Care	0.3
Other	0.0

10 largest holdings
	Weight % of fund
	Q4	Q3	%
Company	2010	2010	Perf.¹	Country	Sector
Morpol	13.2	13.8	15.6	Poland	Cons. Staples
RFV Nyrt	10.3	12.5	-14.7	Hungary	Utilities
Mennica Polska	8.0	8.7	-6.2	Poland	Materials
Pannenergy	5.8	6.7	-11.4	Hungary	Materials
ELKO	4.9	3.6	37.0	Baltics	IT
Budimex	4.8	4.6	6.8	Poland	Industrials
Warimpex Finanz	4,3	3.9	13.5	Poland	Cons. Discr.
Asseco Slovakia	4.0	4.1	0.3	Slovakia	IT
Bank BPH	3.7	3.1	22.6	Poland	Financials
Bogdanka	3.3	2.6	27.5	Poland	Energy
10 largest holdings (% of portfolio)	Unlisted holdings (% of portfolio)			Total number of holdings
62,3			7.1		60

1) Share price development in USD during the fourth quarter 2010

Portfolio comment fourth quarter

Andras Szalkai, Member of the Portfolio Management team, East Capital

Valuations of mid-caps in Poland are particularly demanding, at close to 15 times current year earnings. As we said in the last quarter, we are looking for opportunities in the Czech and Slovak market, and lately, possibilities have arisen in Hungary, as the local pension funds in some small and mid-cap positions must be liquidated. We also see some opportunities in commodities, and especially in agriculture.

Morpol, a Norwegian listed Polish salmon processor, was a strong performer and gained 15.6% in the fourth quarter. The company trades at a forward price-to-earnings ratio of 7.4; considerably lower than any Polish mid caps. The company is on a growth path. In the last quarter it acquired several salmon farms in Scotland and Norway and now has 38% own production of salmon. The company is the largest processing company in Europe, and is using its cheap labor force at the production site in Poland to extend market share in the coming years. We visited the plant in Ustka in Poland in September, and it is very modern and the largest in Europe. There are synergy possibilities between farming and processing on site, and this is expected to boost profitability going forward.

Another very positive performer was Bogdanka, the Polish thermal coal miner. The share price gained 27.5% in the quarter as the company is a target for takeover, and at the same time the management is continuously increasing its profit guidance. This company received an award in 2009 by East Capital for the best IPO of the year. Other commodity-related stocks also had positive results, and the two uranium-related stocks in the fund rallied. The Hungary-based Australian Wild Horse Energy gained 75% and Tournigan Energy, with 100% of assets in Slovakia, gained 77%.

The Baltic exposure accounted for 8% of the fund at the end of the year, as the position in the non-listed Eesti Krediidipank was disposed of in December. We decided not to participate in the bank"s capital increase, and the majority owner bought our stake. Elko, a non-listed Latvian IT distributor, was revalued at the end of the year and gained 37%. The company"s profitability is now improving.

The negative performers in fourth quarter were mainly Hungarian holdings. As the Hungarian government decided to terminate the three pillar pension system, the Hungarian market came under pressure, especially mid caps, where local pension funds hold bigger stakes. This was the case with RFV, an energy services company and the second largest holding in the fund, which dropped 14.7% despite announcing a positive profit warning for 2011 during the quarter. Also, Pannenergy, a geothermal energy company and the fund's fourth largest holding, lost 11.4%.

EAST CAPITAL POWER UTILITIES FUND

The aim of the fund is to target the many investment opportunities arising from the ongoing power sector reform in Russia. The fund invests in both listed and unlisted companies across sub-sectors of the industry including electricity generation, distribution and services.

At the end of the reporting period East Capital Explorer´s share of the fund was 73%.

Fund Performance
	Oct-Dec 2010	Jan-Dec 2010	Since Dec 2007
East Capital Power Utilities Fund, EUR	1%	45%	32%
RTS Electric Utilities Index1)	7%	43%	-33%

Source: Bloomberg

1) The RTS Electric Utilities index is a sector index comprising 15 utility equities listed on RTS.

Sector weighting		Country weighting
Sector	% of fund	Country	% of fund
Utilities	98.6	Russia	98.2
Industrials	1.0	Ukraine	1.0
Energy	0.4	Georgia	0.8
Other	0.0	Other	0.0

10 largest holdings

	Weight % of fund
	Q4	Q3
Company	2010	2010	% Perf.¹	Country	Sector
MRSK Holding	9.6	9.2	14.8	Russia	Utilities
OGK-6	7.9	7.9	9.9	Russia	Utilities
OGK-4	7.6	7.6	9.8	Russia	Utilities
MRSK Centre-Volga	7.4	6.8	19.3	Russia	Utilities
MRSK Centre	6.7	7.0	5.4	Russia	Utilities
TGK-5	5.8	5.5	10.9	Russia	Utilities
Rus Hydro	5.6	1.9	6.8	Russia	Utilities
OGK-2	5.0	5.4	1.9	Russia	Utilities
MRSK Volga	3.1	2.2	54.8	Russia	Utilities
TGK-13	3.1	2.9	17.0	Russia	Utilities

10 largest holdings (% of portfolio)	Unlisted holdings (% of portfolio)				Total number of holdings
61.8			0.8		51

1) Share price development in USD during the fourth quarter 2010

Portfolio comment fourth quarter

Aivaras Abromavicius, Partner and member of the Portfolio Management team, East Capital

The fourth quarter was favorable for power utilities stocks, as the Russian Federal Tariff Service accelerated the approval of regulatory asset bases and tariffs for the next five years for most electricity distribution companies. The Russian System Operator has published the results of capacity auctions for 2011, and as the companies expected, capacity prices in most regions were determined at the level of price-caps imposed by the regulator. The news was positive, as price-caps are far higher than last year"s tariffs for most companies. The approval of a 32.8% year-on-year tariff hike for the Russian Federal Grid Company by the Russian Federal Tariff Service in late December came as a complete surprise to the market, however. The market expected the tariff increase to be in the range of 15.0% to 20.0%, as the Ministry of Economy had sent signals indicating unwillingness to allow too significant electricity tariff hikes in a pre-election year. The abovementioned factors were positive for stocks in the sector at the end of 2010. Distribution companies were among the best

performers, with MRSK Volga up 54.8%, Tomskaya Distribution Company up 33.6%, MRSK Center-Volga up 19.3% and MRSK Holding up 14.8%.

After the announcement of the intention to consolidate OGK-2, OGK-6, TGK-1 and Mosenergo last quarter, Gazprom EnergoHolding has held a meeting with investors regarding the coming merger of OGK-2 and OGK-6 during 2011. Swap coefficients for the merger are to be announced during the first quarter of 2011. The share price of OGK-6 gained 9.9% during the quarter, while OGK-2 was up only 1.9% over the same period.

Eurosibenergo decided to postpone its initial public offering directly after pre-marketing started, as the cornerstone investor, China Yangtze Power Co., needed to get approval from the Chinese government. The real reason may, however, be a lack of interest from investors at the proposed valuation. We had already exited the entire position in its daughter company Krasnoyarskaya HPP, when the share price of the latter started to correct on the news. It was a good investment for the fund in 2010, as the stock jumped 270.0% over the year, significantly contributing to the fund"s performance.

Other significant changes in the fund during the quarter included the exit from Bashkirenergo at about a 15% premium on the market price, as the shares were sold to a strategic buyer, and the exposure to Federal Grid Company was increased on the expectations of better treatment from regulators during a tariff campaign, which also materialized.

The revaluation of Russian Maintenance Corporation resulted in a negative performance, as the company"s business remains weak due to increased competition. And another weak performer was Moskovskaya OEK, which was severely beaten down as it risks losing part of its heat business in Moscow after Mayor Luzhkov"s dismissal. However, the company represents less than 0.2% of the fund.

EAST CAPITAL SPECIAL OPPORTUNITIES FUND

The fund targets investments in companies with a solid business model and outlook which for market or owner specific reasons can be acquired at low valuation levels. The fund targets investments with both a clear trigger for revaluation and an exit opportunity within four years. The strategy implies that the fund manager will, when appropriate, take a more active role in the company through board representation or other means.

Investment focus is listed, or otherwise traded, equity securities, but other financial instruments can also be utilized. Distributions to investors can be made throughout the lifetime of the fund. All proceeds on divestments after three years will be distributed to the investors.

At the end of the reporting period East Capital Explorer´s share of the fund was 82%.

Fund Performance
	Oct Dec 2010	Jan-Dec 2010	Since May 2009
East Capital Special Opportunities Fund, EUR	12%	49%	58%

Source: Bloomberg

Sector weighting		Country weighting
Sector	% of fund	Country	% of fund
Financials	23.9	Russia	50.8
Materials	21.3	Romania	27.7
Energy	16.9	Ukraine	10.7
Consumer Discretionary	12.9	Lithuania	8.7
Telecom. Services	8.8	Croatia	0.6
Health Care	7.4	Serbia	1.4
Consumer Staples	5.1	Other	0.0
Information Technology	3.1
Industrials	0.5
Other	0.1

10 largest holdings
	Weight % of fund
	Q4	Q3
Company	2010	2010	% Perf.¹	Country	Sector
Fondul Proprietatea	22.5	24.6	2.1	Romania	Financials
Sollers	12.7	10.7	34.7	Russia	Cons. Discr.
Sibirskiy Cement	11.3	11.6	15.4	Russia	Materials
Integra Group	10.7	9.1	31.1	Russia	Energy
TEO LT	8.7	9.0	7.9	Lithuania	Telecom. Services
Verofarm	5.7	4.8	33.2	Russia	Health Care
Korshunovsky GOK	5.4	5.0	21.2	Russia	Materials
Sintal	4.3	4.4	9.4	Ukraine	Consumer Staples
Mashstroy	3.8	4.2	0.0	Russia	Energy
Stirol	3.4	4.4	-12.2	Ukraine	Materials
10 largest holdings (% of portfolio)	Unlisted holdings (% of portfolio)				Total number of holdings
88.5			22.2		18

1) Share price development in USD during the fourth quarter 2010

Portfolio comment fourth quarter

Jacob Grapengiesser, Partner and member of the Portfolio Management team, East Capital

The largest holding in the fund, Romanian restitution fund Fondul Proprietatea, gained 2.1% during the fourth quarter. The company started trading on the Bucharest Stock Exchange on 25 January, and closed up 27.3% in its first trading day compared to the price at which the company was valued at the end of the period (i.e., the price of the last trade in the over-thecounter market in December 2010). The two key triggers we

had been waiting for - the appointment of Franklin Templeton as manager and the listing on the Bucharest Stock Exchange have both taken place. During the fourth quarter, Fondul Proprietatea paid dividends yielding 30% after tax, based on the average acquisition price of the shares in the fund. The NAV per share by the end of December 2010 was RON 1.1124, implying a 41.6% discount to NAV. After the initial public offering, we have disposed of one third of the position after a total gain in excess of 200%.

The second largest holding in the fund, Sollers, a modern Russian automotive company, gained 34.7% during the quarter. The company has not been passive during the crisis, but actually opened new production facilities in the far east of Russia. In January, it produced the first crossover vehicle, the SsangYong Actyon, in a new factory. The company has also launched leasing operations together with a Russian bank; with interest rates rapidly declining, leasing is becoming an affordable option for many in the car market.

Integra gained 31.1% during the quarter. As we have described in previous reports, the company is trading at very low multiples and would be a key beneficiary from increased capital expenditures at Russian oil companies. One of its peers, Eurasia Drilling, announced that it expects drilling volumes to increase by 17% in 2011, compared to 9% 2010. This is good news as the market will most likely grow more than expected in 2011. There has also been some news about the unification of export duties, which could improve the bottom line for oil companies by 10-15%. This is a positive as oil companies would have more money available for investments.

Korshunovsky GOK gained 21.2% during the quarter. The company is part of the Mechel group, and more specifically is an iron ore mine under the umbrella of Mechel Mining (one of the divisions within the company). It is expected that Mechel Mining will have an IPO during the second half of 2011. We are now working actively to get Mechel Mining to consolidate the stakes it has in daughter companies ahead of the IPO.

The worst-performing holding during the quarter was also the smallest, Transsignalstroy,a construction company which lost 43%. The company has great potential, but has failed to deliver a good message to the market.

EAST CAPITAL SPECIAL OPPORTUNITIES FUND II

The fund aims to invest in companies with a positive outlook but which, due to market or owner-specific reasons, can be acquired at valuations much lower than those suggested by the companies' fundamentals. The target is to achieve a 30% IRR from a concentrated portfolio of our top picks selected on return potential. Proceeds will be distributed as investments are realized but no later than within four years.

At the end of the reporting period East Capital Explorer´s share of the fund was 95%.

Fund Performance
	Oct Dec 2010	Jan-Dec 2010	Since Oct 2010
East Capital Special Opportunities Fund II, EUR	5.9%	5.9%	5.9%
Source: Bloomberg

Sector weighting Country weighting Sector % of fund Country % of fund Energy 29.8 Russia 63.9 Financials 27.8 Slovenia 15.2 Consumer Staples 19.7 Serbia 14.4 Materials 17.0 Ukraine 6.3 Industrials 5.8 Other 0.2 Other 0.0

Portfolio comment fourth quarter

Jacob Grapengiesser, Partner and member of the Portfolio Management team, East Capital

The East Capital Special Opportunities Fund II gained 5.9% in EUR since inception (October 1, 2010). During the fourth quarter of 2010 and the fund"s first quarter, more than 60% of the assets have been invested. The East Capital Special Opportunities Fund II is by the time of writing still in its investment phase, and therefore we have not included a list of the fund"s ten largest holdings. The aim is to undertake investments in low-valued sound assets, with an expected trigger for re-rating. Among the strategies that are most commonly used in the investment process are: investing into neglected markets and/or companies, sourcing of shares from distressed sellers, as well as buying into companies through share capital increases. By the end of 2010 there were 9 investments in the fund. In terms of geography, Russia, Ukraine and the Balkan region are the main targets for investments.

One of the investments undertaken by the fund during the fourth quarter was the acquisition of shares in the Russian automotive company Neftekamsky Avto. Around 3.6% of the fund"s assets by the end of 2010 were invested into the company. Neftekamsky Avto is a producer of commercial and transportation busses, trolley buses, motor vehicle chassis, dumper trucks, truck tractors, as well as other products in the automotive sector. The shares in the company were acquired in the over-the-counter market, at a substantial discount to the by then prevailing market price. The acquisition price implied a very attractive valuation at an enterprise value of 0.3 times estimated 2011 sales and 5 times estimated 2011 Ebitda. During the fourth quarter, the stock gained 48%. The revenues of Neftekamsky Avto are still below pre-crisis levels, however public orders for busses and a strong recovery in general in the

automotive sector in Russia are expected to continue enhancing the sales and profitability of the company.

EAST CAPITAL (LUX) EASTERN EUROPEAN FUND

The East Capital (Lux) Eastern European Fund is a daily traded UCITS fund that invests in shares of companies in the whole of Eastern Europe. More information can be found at the East Capital website (www.eastcapital.com).

At the end of the reporting period East Capital Explorer´s share of the fund was 20%.

Fund Performance

	Oct-Dec 2010	Jan-Dec 2010	Since Dec 2007
East Capital (Lux) Eastern European Fund, EUR	12%	34%	-16%
MSCI Emerging Europe Index, EUR	10%	23%	-26%
Source: Bloomberg

1) MSCI EM Europe Index includes Russian, Polish, Hungarian, Czech and Turkish equities.

Sector weighting		Country weighting
Sector	% of fund	Country	% of fund
Financials	34.2	Russia	63.1
Energy	29.7	Eastern Europe	9.9
Materials	9.0	Turkey	8.7
Consumer Staples	6.1	Poland	5.3
Telecom. Services	5.5	Romania	3.0
Consumer Discretionary	5.2	Czech Republic	1.3
Industrials	4.9	Hungary	1.1
Utilities	4.3	Slovenia	1.1
Health Care	0.9	Lithuania	1.0
Other	0.2	Other	5.5

10 largest holdings
	Weight % of fund
Company	Q4 2010	Q3 2010	% Perf.1	Country	Sector
Sberbank	7.0	6.3	21.8	Russia	Financials
Gazprom	6.2	3.8	22.0	Russia	Energy
Lukoil	5.3	4.8	0.0	Russia	Energy
Raiffeisen International	3.4	1.0	15.0	East. Europe	Financials
GMK Norilsky Nikel	2.6	2.1	42.6	Russia	Materials
Transneft	2.6	3.9	14.3	Russia	Energy
Surgut Ng	2.3	2.4	7.8	Russia	Energy
Erste Bank	2.2	1.8	16.3	East. Europe	Financials
MRSK Holding	2.1	1.9	14.7	Russia	Utilities
X5 Retail Group	2.1	2.1	16.0	Russia	Cons. Staples
10 largest holdings (% of portfolio)		Unlisted holdings (% of portfolio)			Total number of holdings
35.8			0		164

1) Share price development in USD during the fourth quarter 2010

Direct Investments

Gert Tiivas, CEO of East Capital Explorer, comments on the development of the groups direct investments during the fourth quarter.

MELON FASHION GROUP

Melon Fashion Group"s (MFG) turnover during the fourth quarter of 2010 amounted to RUB 1,650m (EUR 39.5m), an increase by 108% over the same period of 2009 (117% increase in EUR). For the full year 2010, MFG's turnover was RUB 4,736m (EUR 117.5m), an increase by 55% from last year (65% in EUR). One reason for the high growth is that MFG acquired the franchising rights to three new concepts in 2010 (Springfield, Women"s Secret and Co&Beauty).

At the end of 2010, Ernst & Young performed an external valuation of MFG. As a result, the total value of East Capital Explorer"s investment in MFG was increased by 33%, to EUR 13.8m. A significant factor in the revaluation came as a result of the lower weighted average cost of capital.

MFG's sales in comparable shops increased by 41% in the fourth quarter compared to the same period 2009 in RUB terms (increase by 47% in EUR terms). For the full year 2010, the comparable shops' sales increased by 7% in RUB terms (increased by 14% in EUR terms).

By December 31 2010, MFG operated 501 shops, an increase by 65 shops since October 1 and an increase by 228 shops since the beginning of the year. Out of these new shops, 87 were acquired while 141 were opened.

Although a positive underlying market contributed to the company"s strong fourth quarter performance, the main drivers are company-specific. The acquisition and the rapid expansion during 2010 put a lot of pressure on the company"s organization, with several operational problems following, mainly within supplies and logistics. During the second half of 2010, MFG has successfully managed to solve most of these main operational problems, which is the main contributing factor behind the strong like-for-like-growth during the fourth quarter.

TEO LT

TEO LT is a leading telecommunications operator in the Baltic region, providing fixed line, internet and TV services in Lithuania. East Capital Explorer has been investing into the company since the end of the third quarter of 2009, and as of 31 December 2010 East Capital Explorer held 2.7% of TEO shares, corresponding to a total value of EUR 15.2m after having purchased additional shares for EUR 2.5m during the fourth quarter 2010. Our holding of TEO shares increased in value by 34.3% during 2010, and by 9.2% during the fourth quarter. In total, East Capital"s (including East Capital Explorer) holding in TEO amounted to 6.8% of the company.

TEO"s fourth quarter 2010 revenue came in at EUR 56m, almost at the same level as in the previous quarter of the year, and 2.7% less than a year ago. On the positive side overall

decline of TEO revenue has been as a significantly slower rate than the overall Lithuanian telecommunications market.

Fixed line services still account for more than a half of TEO"s revenue and 9% contraction of the segment had a critical impact on the overall result in the third quarter. The number of fixed lines dropped by 1% over the quarter and overall rate of decline has started to slow down during the last year.

Internet and data communication services, comprising over 33% of TEO"s revenues, suffered a slower 4.8% contraction compared to the fourth quarter of 2009, despite an 11% yearon-year increase in the number of customers.

To keep its share in the internet market, TEO continued investing into expansion of its core network and development of the next generation fiber optic technologies (FTTB, FTTH) meant to replace copper line (DSL) connections. At the end of 2010, about two thirds of TEO internet customers were DSL users, 6.5% decrease year-on-year, while the number of fiber optic users increased 65.3% during the period.

The most positive trends can be observed in TV and IT services segments, which increased by 32% and 51% respectively and mitigated the overall decline. Further growth of the segment is expected, especially after a recent acquisition of UAB Hostex, one of the leading webhosting and data center services providers in Lithuania.

Despite of a decline in revenues from TEO"s core services, overall expectations towards the group are positive due to strong orientation into more advanced services. Capital expenditures are expected to continue into 2011, however on a lesser extent than in 2010.

TEO continued to show exceptional cost control resulting in 8.5% increase in net profit despite decreasing revenue. The main contributors to the margin expansion were further reduction in operating expenses by 12.6% year-on-year and declining depreciation and amortization expense down 3.7%. Hence, TEO has been able to reach 19.6% net margin compared to 17.6% last year. Ebitda margin for the same period went up from 29.7% to 36.8%.

To sum up, TEO fourth quarter results again confirmed its intact investment case as a cost efficient cash generator yielding an attractive expected dividend of up to 8%, having a healthy balance sheet and interesting growth opportunities in new internet technologies, IT and TV services.

EAST EUROPEAN DEBT FINANCE

EEDF AG, a joint venture between East Capital Explorer, East Capital Financials Fund and Intrum Justitia was established in early 2010, for the purpose of acquiring NPL portfolios in Russia. In October 2010, a cooperation agreement was signed between EEDF AG and the EBRD, culminating on 22 December 2010 with the founding of a new investment company, owned by EBRD and EEDF AG. The new joint venture is aiming at expanding the financial capabilities of EEDF AG and making acquisitions of bigger NPL portfolios possible.

The overall commitments from East Capital Explorer, East Capital Financial Fund and Intrum Justitia remain unchanged. The investment capacity of this joint venture for the coming three years, however, could be increased. The current commitment of East Capital Explorer amounts to EUR 5m, of which EUR 0.3m had been drawn down at the end of 2010, while the remaining funds were held in short-term investments.

The decrease in the value of East Capital Explorer"s holding in EEDF of 7.6% occurred due to currency exchange rate fluctuations relating to the value of underlying assets held by the company.

POPULI

The Georgian food retailer Populi, in which East Capital Explorer owns 22%, recorded a turnover of Georgian lari (GEL) 23.1m (EUR 9.6m) for the fourth quarter 2010, an increase of 24.8% (28.4% increase in EUR) compared to the same period 2009. For the full year 2010, Populi"s revenue was GEL 79.8m (EUR 33.8m), an increase by 12.3% (10.9% in EUR terms) compared to 2009. Sales per square meter increased by 34% in the fourth quarter 2010 compared to the same period in 2009, and increased 22% for the full year 2010 compared to 2009.

Margins for the fourth quarter were lower than expected as an effect of rapidly increasing food inflation: in Georgia"s low income environment, the company has not been able to fully pass on increasing input prices to the end customer.

During 2010, Populi inaugurated its new-built production center for fresh products and ready-made food. In November, the final two departments were inaugurated, and the company now has 10 production departments, including meat, fish, fruit & vegetables, bakery, confectionary and others. The production center is the largest and most modern of its kind in the Caucasus region, and will allow Populi to strengthen its position within fresh products. An increasing share of own products will also have a positive impact on margins in the long run.

In December, it came to the knowledge of the Board of Directors and the shareholders that the company"s CEO had incurred a financial liability of approximately USD 2m without prior consultation with the board. As a consequence, the board asked the CEO to resign and appointed the deputy CEO, Mr. Archil Melikadze, as interim CEO. A final settlement with the former CEO is under discussion and should this prove impossible, the company will likely have to pursue legal measures to defend its interests. The current situation has also impacted the cash flow position of the company negatively.

East Capital Explorer"s direct investment in Populi is valued at acquisition price. However, a slight decrease in value of 1.7% occurred due to fluctuations in currency exchange rates.

Populi is also held by East Capital Explorer indirectly through the East Capital Bering Central Asia Fund, which holds 20% of the company. East Capital Explorer has an option that can be exercised in October 2011, which upon exercise would increase its share in the company to 29%. Furthermore, the Populi and its shareholders have the right to buy back the shares and the

option in one year at a guaranteed return for East Capital Explorer.

WIMM-BILL-DANN

During the fourth quarter of 2010, East Capital Explorer made a direct investment of EUR 6.8m into Wimm-Bill-Dann Foods, a leading dairy and juice company in Russia listed in Moscow and New York.

On 2 December 2010, PepsiCo announced it had agreed to acquire 66% of Wimm-Bill-Dann for USD 3.8 billion at a price of USD 132 per common share. In accordance with Russian Law, PepsiCo is required to purchase the remaining 34% of the company within 35 days after the close of the transaction at buyout price not below the deal price. PepsiCo has a successful track record of completing similar M&A transactions on the Russian market and implementing strong corporate governance standards.

On 27 January 2011, PepsiCo announced it has obtained all necessary regulatory approvals required to close the acquisition. East Capital Explorer expects to realize a premium of approximately 12% from the average price of USD 117.46 paid per share upon completion of the buyout from PepsiCo.

Should the buyout by PepsiCo not be completed, Wimm-Bill-Dann is still considered a sound company with strong fundamentals and a professional management team.

SHORT-TERM INVESTMENTS

East Capital Explorer has investments in a portfolio of USD and EUR denominated liquid bonds as a short-term cash management tool to create more attractive returns on cash while remaining liquid for future investments. On 31 December 2010, the fair value of the bond portfolio amounted to EUR 26.5m (38.4m).

Cash and cash equivalents

The EUR 18m (EUR 50m) that had not yet been invested or drawn-down, were placed in cash and cash equivalents. Interest income from cash and cash equivalents during 2010 amounted to EUR 0.2m (EUR 3.1m).

Results

The Group consists of the Parent Company East Capital Explorer AB, the subsidiary East Capital Explorer Investments AB as well as the consolidated funds East Capital Power Utilities Fund AB, East Capital Special Opportunities Fund, East Capital Special Opportunities Fund II, East Capital Bering Balkan and the East Capital Bering New Europe Fund. East Capital Explorer currently holds 73% of the share of equity in the East Capital Power Utilities Fund AB and its subsidiary Consibilink Ltd, 82% of the share of equity in the East Capital Special Opportunities Fund, 95% of the share of equity in the Special Opportunities fund II, 52% of the share of equity in the East Capital Bering Balkan Fund and 86% of the share of equity in the East Capital Bering New Europe Fund. These funds are therefore regarded as subsidiaries and consolidated with the East Capital Explorer Group. The investments in the consolidated funds are reported as investments in the portfolio report on page 2 but are consolidated in the financial statements.

While the global economy has continued its slow and irregular recovery, there are still major and hard to assess risks which remain and could affect the current positive trends and our investments. In addition, the global financial markets remain volatile and may increase the level of risk associated with our investments. For the coming months we remain in the same scenario as at the end of 2009 where we anticipate a continued trend of economic growth but at levels below long-term potential. While the current market comes with a high degree of risk, it also provides significant opportunities for positive profitability growth and development in sound portfolio companies.

Group

Net profit for the reporting period 1 January – 31 December 2010 amounted to EUR 115m (EUR 99m), corresponding to earnings per share to shareholders of the parent company of EUR 2.55 (EUR 2.26).

For the reporting period, main items of the net profit include EUR 85.5m (EUR 108.8m) in unrealized change in the value of investments, EUR 39.0m (EUR -6.6m) in realized change in the value of investments, which relates to sale of shares held in the consolidated funds and EUR 9.9m (EUR 0.3m) in dividends. Financial income amounted to EUR 6.5m (EUR 3.9m) and includes net result from bond portfolio EUR 3.2m (EUR 0.1m) and exchange gain EUR 3.0m (EUR -0.5m). The bond portfolio net result includes EUR 2.6m (EUR 0.7m) in interest income, result from exchange losses from forward contract on bonds EUR -2.0m (EUR 0.4m) and fair value change in the bond portfolio EUR 3.1m (EUR 0m). Other items include EUR -25.3m (EUR -5.9m) in operating expenses (described further below) and EUR -0.9m (EUR -0.5m) in income taxes.

Of the total operating expenses of EUR -25.3m (EUR -5.9m) during the reporting period, EUR -2.0m (EUR -1.2m) relates to ordinary operating expenses within the Parent Company. The remaining EUR -23.3m (EUR -4.8m) relates to operating expenses in consolidated funds and subsidiaries. The increase in operating expenses largely depends on performance fees EUR -14.6m (EUR -1.6m) in consolidated funds due to the fund"s improved performance during 2010.

In order to calculate the fees related only to the shareholders in East Capital Explorer AB, we should exclude the minority interest in the consolidated fund and add back fees generated in non-consolidated funds. Then the total fees payable to the Investment Manager generated by the fund investments and direct investments held by East Capital Explorer amounted to EUR 21.6m (EUR 15.9m was related to performance) during the reporting period. For more details about fees, please see the Annual reports available at our website.

Parent Company

The Parent Company"s net profit for 2010 amounted to EUR 44.5m (EUR 79.6m) of which EUR 46.0m (EUR 80.4m) referred to a reversal of write down of shares in group companies. These shares had been valued to the lower of fair value and acquisition value. Operating expenses amounted to EUR -2.0m (EUR -1.2m). No investment activities were carried out within the Parent Company.

Tax

East Capital Explorer"s consolidated tax of EUR -0.9m (EUR - 0.5m) for the reporting period comprises the net effect of actual income tax within the Parent Company of EUR 0.5m (EUR 0.3m) and actual tax related to subsidiaries of EUR -0.9m (EUR -0.7m), deferred tax in the Group is EUR -0.5m (EUR -0.1m).

Dividend

As East Capital Explorer is now fully invested, the Board of Directors has decided to change the dividend policy to start paying dividends, and to propose to the AGM a dividend of SEK 0.80 (-) per share for the fiscal year 2010.

Financial position

Cash flow from operating activities during 2010 was EUR 2.9m (EUR -1.6m).

The Group"s cash, cash equivalents and other short-term investments at the end of the period amounted to EUR 89.4m (EUR 94.0m). The Group"s cash, cash equivalents and other short-term investments differ from the portfolio on page two since cash and cash equivalents in the consolidated funds are included in the Group. Excluding the consolidated funds, cash, cash equivalents and other short-term investments amounted to EUR 44.3m (EUR 88.8m) and interest income from these amounted to EUR 2.2m (EUR 3.6m) during the reporting period. On 31 December, EUR 28m was available for future commitments and investments.

East Capital Explorer had no debt on 31 December 2010.

Commitments and draw-downs

EUR 5m has been committed to a direct investment in a new venture, which, together with Intrum Justitia and East Capital Financial Funds, will seek to invest in portfolios of nonperforming consumer loans mainly in Russia. On 31 December, total draw-downs of EUR 0.3m had been made.

Other Information

New Consolidated Subsidiaries

The Group invested an additional EUR 5m stake in East Capital Bering Balkan Fund on 1 June 2010. At the time of the investment the Group held a EUR 44.9m stake in the fund and following the investment the Group"s stake represented 49% of the fund. As of 1 October 2010, the Group"s holdings in the fund increased to above 50% of the fund due to redemptions, and at year end the Group"s holdings represented 52% of the fund. In light of the above, the holdings in East Capital Bering Balkan Fund have been reclassified from an investment to a subsidiary and are included in the consolidation of the Group as from October 2010. As at the time the Group acquired controlling influence, the fund"s total NAV was 82.5 MEUR.

On 1 October 2010, the Group made a EUR 35m investment into the newly launched East Capital Special Opportunities Fund II at the time of its formation. As of 31 December 2010, the Group owned 95% of the fund.

Risks and uncertainty factors

The dominant risk in East Capital Explorer"s operations is commercial risk in the form of exposure to certain sectors, geographic regions or individual holdings. A more detailed description of East Capital Explorer"s material risks and uncertainties is provided in the company"s 2009 Annual Report. An assessment for the coming months is provided in the Results section above.

Related party transactions

No changes or transactions have occurred during the year other than fee payments according to agreements. For information on related party transactions please see pages 56 and 87 in the 2009 Annual Report.

Organizational and investment structure

East Capital Explorer is a public limited liability company that indirectly and directly invests in Russia and other countries within the Commonwealth of Independent States (CIS), the Balkans, the Baltic States, Central Asia and Central Eastern Europe. Our indirect investments are made through a selection of East Capital"s current and future funds.

The investment activities of the company are governed by an investment policy within an Investment Management Agreement between the Company and East Capital PCV Management AB (the Investment Manager), a company within the East Capital Group.

In addition to the related party transactions referenced above, East Capital Explorer has made direct investments into companies where East Capital Group also invests through one of its controlled companies or products, which during the period included investments in TEO LT, East European Debt Finance, Populi and Wimm-Bill-Dann.

For further information about the organization and investment structure of the Company, please see the corporate governance report for 2009 that has been included in the annual report and on our web site www.eastcapitalexplorer.com in the section, "About East Capital Explorer/Corporate Governance"

Share buy-back mandate

The Annual General Meeting 2009 issued a new repurchase authorization for the Board to decide on acquiring the company"s own shares until the Annual General Meeting 2010. On 8 March 2010, East Capital Explorer announced that the Company"s Board had decided to utilize the authorization for the purpose of giving the Board wider freedom of action in the work with the Company"s capital structure and thus creating more value for the shareholders.

The utilization of the authorization allowed the Company to repurchase own shares from 8 March 2010 up to and including 9 April 2010. During the period, East Capital Explorer repurchased 647,485 own shares, corresponding to 1.8% of the shares in the Company. Average price per share paid was SEK 78.46. At the Annual General Meeting held in Stockholm on 28 April 2010, the 647,485 repurchased shares were resolved to be cancelled. Following the cancellation of shares, the new total number of shares in the Company amounts to 34,851,675.

On 28 April 2010, the Annual General Meeting 2010 issued a new repurchase authorization for the Board to decide on acquiring the company"s own shares until the Annual General Meeting 2011. The new authorization has not been utilized.

Annual Meeting 2011

East Capital Explorer"s Annual General Meeting 2011 will be held on Tuesday 12 April 2011, at Nalen, Regeringsgatan 74, Stockholm. Shareholders who wish to submit a proposal for consideration at the AGM should send such proposal to the Chairman of the Board before 22 February 2011. The publication of the notice of the meeting is scheduled to take place in the beginning of March 2011.

Shareholders who wish to contact the Nomination Committee or the Board of Directors, are welcome to send an e-mail to [email protected], or a letter to East Capital Explorer, Box 7214, 103 88 Stockholm, Sweden.

Events occurring after the end of quarter

The previously announced investment in the publicly listed Komercijalna Banka AD Skopje, based in Macedonia, was somewhat delayed and the bank is currently carrying out the share capital increase through a public offering. East Capital Explorer submitted a subscription order to participate in the public offering on 11 February 2011, and we expect the final results of the offering to be announced in the coming weeks.

East Capital Explorer has decided to invest an additional EUR 5m in the East Capital Bering Balkan Fund. East Capital Explorer has been waived the subscription fee. Other terms are the same as for the other fund unit holders which include a 2.0% management fee and a 20% performance fee above a high-watermark. East Capital Explorer will invest in newly issued shares that will be received in the beginning of March.

NAV on 31 January 2011

NAV per share per 31 January 2011 amounted to EUR 12.55 (corresponding to SEK 111). The share price on 31 January 2011 was SEK 88.75 (corresponding to EUR 10.05). Cash, cash equivalents and other short-term investments on 31 January 2011 amounted to EUR 44m (SEK 385m) corresponding to EUR 1.25 (SEK 11) per share. Of those, EUR 28m (SEK 250m) were available for future investments.

	NAV
	per		%
	share,	NAV,	of
Portfolio on 31 January 2011	EUR	EURm	NAV
Fund Investments
East Capital Bering Russia	1.26	44.0	10%
East Capital Bering Ukraine A	0.24	8.3	2%
East Capital Bering Ukraine R	0.18	6.1	1%
East Capital Bering Balkan	1.28	44.7	10%
East Capital Bering Central Asia	0.72	25.2	6%
East Capital Bering New Europe	0.55	19.3	4%
East Capital Power Utilities Fund	2.70	94.1	22%
East Capital Special Opportunities Fund	1.76	61.2	14%
East Capital Special Opportunities Fund II	1.09	38.0	9%
East Capital (Lux) Eastern European Fund	0.45	15.5	4%
	10.23	356.5	81%
Direct Investments
Melon Fashion Group	0.40	13.8	3%
TEO LT	0.44	15.3	3%
East European Debt Finance	0.01	0.3	0%
Populi	0.10	3.6	1%
Wimm-Bill-Dann	0.20	7.1	2%
	1.15	40.1	9%
Short-term Investments
Short-term Investments (incl. bonds)	0.76	26.6	6%
Cash and cash equivalents	0.49	17.0	4%
	1.25	43.6	10%

Total Portfolio	12.63	440.2	101%

Other assets and liabilities net	-0.08	-2.7	-1%
Net Asset Value (NAV)	12.55	437.5	100%

Note that certain numerical information may not sum up due to rounding.

Definitions

Please see the Annual Report 2009, pages 56-57 and 91 for a list of definitions.

Accounting Principles

The consolidated interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and applicable provisions in the Swedish Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with The Swedish Annual Accounts Act Chapter 9, interim report. The accounting principles that have been applied for the Group and Parent Company are in agreement with the accounting principles and the methods of computation used in last year"s annual report.

The Group applies the revised versions of IFRS 3 and IAS 27 as of 1 January 2010. The changes in these standards will affect acquisitions after 1 January 2010. New or revised IFRS principles and interpretations of the IFRIC have not had any material effect on the financial position or results of the Group or Parent Company.

Stockholm, 16 February 2011

Gert Tiivas Chief Executive Officer

CONTACT INFORMATION

Gert Tiivas, CEO, +46 8 505 977 30 Mathias Pedersen, CFO, +46 8 505 977 48

FINANCIAL CALENDAR

Monthly net asset value report on the fifth working day after the end of each month
Annual Report 2010, available on 22 March 2011 at the office of the company and its website
Annual General Meeting 2011 on 12 April 2011
Interim Report, 1 January 31 March 2011 on 6 May 2011
Interim Report, 1 January 30 June 2011 on 5 August 2011
Interim Report, 1 January 30 September 2011 on 11 November 2011

The information in this year end report is that which East Capital Explorer AB is required to disclose under Sweden's Securities Market Act. It was released for publication at 07:00 a.m. CET on 16 February 2011.

Review Report

To the Board of East Capital Explorer AB (publ)

Corporate identity number 556693-7404

Introduction

We have reviewed the interim report for East Capital Explorer AB (publ) as of 31 December 2010, and the twelve-month reporting period ending on that date. The Board of Directors and the Chief Executive Officer are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Focus and Scope of the Review

We conducted our review in accordance with the Standard on Review Engagements (SÖG) 2410, "Review of Interim Financial Information Performed by the Independent Auditors of the Entity". A review consists of making inquiries, primarily to persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden (RS) and other generally accepted auditing practices in Sweden. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed on the basis of a review does not give the same level of assurance as a conclusion expressed on the basis of an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.

Stockholm, 16 February 2011 KPMG AB

Carl Lindgren Authorized Public Accountant

This review report is a translation of the original review report in Swedish.

Statement of Comprehensive Income

	2010	2009	2010	2009
EUR thousands	Jan-Dec	Jan-Dec	Oct-Dec	Oct-Dec
Result from financial assets at fair value through profit and loss	85,544	108,821	35,459	18,914
Realized gains/losses from financial assets through profit and loss	39,010	-6,574	8,472	1,219
Dividends	9,926	315	5,347	142
Total operating income	134,480	102,562	49,278	20,275
Staff expenses	-1,095	-554	-545	-153
Other operating expenses	-24,250	-5,384	-10,395	-1,462
Operating profit/loss	109,135	96,624	38,339	18,660
Financial income	6,475	3,899	657	646
Financial expense	-51	-818	-31	-645
Profit/loss before tax	115,559	99,705	38,966	18,661
Income tax	-903	-497	-846	111
NET PROFIT/LOSS FOR THE PERIOD	114,656	99,208	38,120	18,772

Other comprehensive income:
Exchange differences on translating foreign operations	5,230	-801	2,380	843
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	119,886	98,407	40,500	19,616

Net profit/loss for the period distribution:
Shareholders of the Parent company	89,260	80,421	29,785	16,169
Non-controlling interest	25,397	18,787	8,335	2,603
	114,656	99,208	38,120	18,772
Total comprehensive income distribution:
Shareholders of the Parent Company	93,710	79,620	31,891	16,744
Non-controlling interest	26,176	18,787	8,608	2,872
	119,886	98,407	40,500	19,616
Earnings per share, EUR
- shareholders of the Parent Company	2.55	2.26	0.85	0.46
No accumulated dilution effects
No dilution effects during period

Statement of Financial position

	2010	2009
EUR thousands	31 Dec	31 Dec
ASSETS
Shares and participations in investing activities	455,302	292,174
Total non-current assets	455,302	292,174
Other short term receivables	2,092	1,286
Accrued income and prepaid expenses	76	388
Short-term investments1	26,494	36,138
Cash and cash equivalents	62,874	57,909
Total current assets	91,536	95,721
Total assets	546,838	387,895

EQUITY AND LIABILITIES
Equity
Share capital	3,628	3,628
Other contributed capital	379,149	384,376
Translation reserve	3,333	-1,117
Retained earnings	-45,517	-125,938
Profit/loss for the period	89,260	80,421
Equity attributable to shareholders of the Parent Company	429,853	341,370
Non-controlling interest	95,581	40,171
Total Equity	525,434	381,541

Deferred tax liabilities	1,182	713
Total long-term liabilities	1,182	713
Current liabilities
Tax liabilities	252	1,950
Other liabilities	8,670	1,686
Accrued expenses and deferred income	11,300	2,005
Total current liabilities	20,222	5,641
TOTAL EQUITY AND LIABILITIES	546,838	387,895

1) In the Annual report 2009 the bond portfolio is presented on several rows in the Statement of financial position. In this report all items related to the bond portfolio are accounted for under short-term investments. The figures for 2009 have been adjusted accordingly.

Statement of Changes in Equity

EUR thousands 2010	Share capital	Other contributed capital	Trans lation reserve	Retained earnings incl. profit /loss for the period	Total equity shareholders in Parent Company	Non controll ing interest	Total equity
Opening equity 1 Jan 2010	3,628	384,376	-1,117	-45,517	341,370	40,171	381,541
Total comprehensive income	-	-	4,450	89,260	93,710	26,176	119,886
Acquired subsidiaries	-	-	-	-	-	37,268	37,268
Dividends	-	-	-	-	-	-7,924	-7,924
Share buy-back	-	-5,227	-	-	-5,227	-110	-5,337
Per 31 December 2010	3,628	379,149	3,333	43,743	429,853	95,581	525,434

EUR thousands 2009	Share capital	Other contributed capital	Trans lation reserve	Retained earnings incl. profit /loss for the period	Total equity shareholders in Parent Company	Non controll ing interest	Total equity
Opening equity 1 Jan 2009	3,627	387,652	-316	-125,938	265,025	10,425	275,450
Total comprehensive income	-	-	-801	80,421	79,620	18,787	98,407
Acquired subsidiaries						10,959	10,959
Share buy-back	-	-3,275	-	-	-3,275	-	-3,275
Bonus issue	1	-1	-	-	0	-	0
Per 31 December 2009	3,628	384,376	-1,117	-45,517	341,370	40,171	381,541

Statement of Cash Flow

EUR thousands	1 Jan – 31 Dec 2010	1 Jan – 31 Dec 2009
Operating activities
Operating profit/loss	109,135	96,624
Adjusted for unrealized change in value	-85,544	-108,821
Capital gain/loss from divestment	-39,010	6,574
Interest received	1,830	5,306
Interest paid	-35	-15
Tax paid	-1,715	-500
Cash Flow From Current Operations Before Changes In Working Capital	-15,340	-832
Cash flow from changes in working capital
Increase (-)/decrease (+) in other current receivables	2,328	-1,176
Increase (+)/decrease (-) in other current payables	15,949	446
CASH FLOW FROM OPERATING ACTIVITIES	2,937	-1,562
Investing activities
Investment in shares and participations1	-126,304	-167,636
Sale of shares and participations	136,453	38,838
CASH FLOW FROM INVESTING ACTIVITIES	10,150	-128,798
Financing activities
Contribution from non-controlling interest	1,749	-
Payment to non-controlling interest	-7,924	7,606
Share buy-back	-5,337	-3,275
CASH FLOW FROM FINANCING ACTIVITIES	-11,512	4,331
CASH FLOW FOR THE PERIOD	1,574	-126,029
Cash and cash equivalents at beginning of the year2	57,909	183,643
Exchange rate differences in cash and cash equivalents	3,391	295
CASH AND CASH EQUIVALENTS AT END OF THE PERIOD	62,874	57,909

1) Comparatives have been altered as an effect of the reclassification of the bond mandate whereas the cash from bond mandate has been moved to investment in shares and participations in 2009.

2) Cash equivalents comprise deposits and cash.

Segment reporting

East Capital Explorer classifies the company"s segments based on the nature of its investments. Segment results and assets include items directly attributable to the segment as well as those that can be allocated on a reasonable basis.

EUR thousands	Fund	Direct	Short-term		Total
1 Jan – 31 Dec 2010	Investments	Investments	Investments	Unallocated	consolidated
Result from financial assets at fair value
through profit or loss	78,543	6,699	302	-	85,544
Realized gains on financial assets through profit or loss	38,646	-	364	-	39,010
Dividends	8,909	1,017	-	-	9,926
Staff expenses	-	-	-	-1,095	-1,095
Other operating expenses	-21,915	-1,404	-10	-922	-24,250
Operating profit/loss	104,183	6,313	655	-2,017	109,135
Financial income	3,497	-	2,978	-	6,475
Financial expense	-37	-	-	-14	-51
Profit/loss before tax	107,643	6,313	3,634	-2,030	115,559
Assets	417,390	40,041	89,368	39	546,838

EUR thousands	Fund	Direct	Short-term		Total
1 Jan – 31 Dec 2009	Investments	Investments	Investments	Unallocated	consolidated
Result from financial assets at fair value
through profit or loss	107,058	357	1,406	-	108,821
Realized gains on financial assets through profit or loss	-6,574	-	-	-	-6,574
Dividends	315	-	-	-	315
Staff expenses	-	-	-	-554	-554
Other operating expenses	-4,384	-249	-136	-615	-5,384
Operating profit/loss	96,415	108	1,270	-1,169	96,623
Financial income	-	-	3,899	-	3,899
Financial expense	-	-	-818	-	-818
Profit/loss before tax	96,415	108	4,351	-1,169	99,705
Assets	273,222	19,262	93,323	2,088	387,895

Consolidated key figures

	12m	9m	6m	3m	12m	9m	6m	3m
Key figures	2010	2010	2010	2010	2009	2009	2009	2009
Net asset value, EURm	430	398	383	410	341	325	292	259
Change in NAV during the quarter	8.0%	3.8%	-6.5%	20.2%	5.1%	11.2%	12.6%	-2.2%
Equity ratio, %	96.1%	97.2%	97.8%	95.8%	98.4%	97.7%	98.1%	98.5%
Market capitalization, SEKm	2,954	2,501	2,492	2,884	2,378	2,245	2,192	1,696
Market capitalization, EURm	329	273	261	296	232	220	202	155
Outstanding number of shares, m	34.9	34.9	34.9	35.0	35.5	35.5	35.5	35.8
Weighted average number of shares, m	35.0	35.0	35.1	35.3	35.7	35.7	35.8	36.1
Number of employees	4	4	3	3	4	4	4	4

	12m	9m	6m	3m	12m	9m	6m	3m
Key figures per share	2010	2010	2010	2010	2009	2009	2009	2009
Earnings per share, EUR	2.55	1.70	1.08	1.92	2.26	1.80	0.84	-0.12
NAV, SEK	111	105	105	114	99	93	89	79
NAV, EUR	12.33	11.42	11.01	11.73	9.61	9.12	8.22	7.25
Share price, SEK	84.75	71.75	71.50	82.5	67	63.25	61.75	47.4
Share price, EUR	9.43	7.84	7.50	8.47	6.53	6.19	5.70	4.33
SEK/EUR	8.99	9.15	9.53	9.74	10.26	10.21	10.84	10.95

Income statement – Parent company

	2010	2009	2010	2009
EUR thousands	Jan-Dec	Jan-Dec	Oct-Dec	Oct-Dec
Staff expenses	-1,095	-554	-545	-153
Other operating expenses	-922	-615	-85	-233
Operating profit/loss	-2,017	-1,169	-630	-386
Financial income1	46,005	80,429	-	16,931
Financial expense	-14	-1	-3	-1
Profit/loss before tax	43,973	79,259	-633	16,544
Income tax	533	300	165	99
NET PROFIT/LOSS FOR THE PERIOD	44,507	79,559	-468	16,643

1) Financial income in Parent Company comprises reversal of write down of shares in Group companies.

Statement of Comprehensive Income – Parent Company

	2010	2009	2010	2009
EUR thousands	Jan-Dec	Jan-Dec	Oct-Dec	Oct-Dec
NET PROFIT/LOSS FOR THE PERIOD	44,507	79,559	-468	16,643
Other comprehensive income	-	-	-	-
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	44,507	79,559	-468	16,643

Balance Sheet – Parent Company

	31 Dec	31 Dec
EUR thousands	2010	2009
Participations in group companies	380,576	339,570
Total non-current assets	380,576	339,570
Receivables from group companies	2,566	2,540
Accrued income and prepaid expenses	39	59
Cash and cash equivalents	272	247
Total current assets	2,878	2,846
Total assets	383,454	342,416
Share capital	3,628	3,628
Share premium reserve	379,149	384,376
Profit/loss brought forward	-44,361	-125,413
Net profit/loss for the period	44,507	79,559
Total equity	382,924	342,150
Tax liabilities	-	-
Other liabilities	99	84
Accrued expenses and prepaid income	431	182
Total current liabilities	530	266
Total equity and liabilities	383,454	342,416

PLEDGED ASSETS AND CONTINGENT LIABILITIES

Pledged assets	-	-
Contingent liabilities	-	-

AI assistant

Eastnine — Interim / Quarterly Report 2010

3037_10-k_2011-02-16_1bea67e4-1a83-4bf7-be39-ee96cea28df5.pdf

Year-end Report 2010