eQ Oyj — Earnings Release 2013

Feb 14, 2014

FINANCIAL STATEMENTS RELEASE

2013

eQ PLC STOCK EXCHANGE RELEASE

14 February 2014 at 12:00 noon

eQ PLC'S FINANCIAL STATEMENTS RELEASE 2013 – RESULT OF CLIENT OPERATIONS GREW – DIVIDEND WILL RISE TO EUR 0.15

October to December 2013 in brief

• In the last quarter, the Group's net revenue totalled EUR 5.1 million (EUR 3.6 million from 1 Oct. to 31 Dec. 2012).
• The Group's net fee and commission income totalled EUR 4.6 million (EUR 3.6 million).
• The Group's net investment income from own investments operations was EUR 0.5 million (EUR 0.0 million).
• The Group's operating profit was EUR 1.1 million (EUR -0.9 million).
• Earnings per share were EUR 0.02 (EUR -0.03).

January to December 2013 in brief

• In the financial period, the Group's net revenue totalled EUR 18.8 million (EUR 16.3 million from 1 Jan. to 31 Dec. 2012).
• The Group's net fee and commission income totalled EUR 15.4 million (EUR 11.3 million).
• The Group's net investment income from own investments operations was EUR 3.4 million (EUR 5.1 million).
• The Group's operating profit was EUR 4.9 million (EUR 4.7 million).
• The operating profit of client operations (Asset Management and Corporate Finance) was EUR 3.5 million (EUR 1.6 million).
• Earnings per share were EUR 0.10 (EUR 0.10).
• Dividend proposal EUR 0.15 per share (EUR 0.12).
• The assets under management totalled EUR 6.7 billion (EUR 6.3 billion on 31 Dec. 2012) at the end of the period.
• The net cash flow from own investment operations was EUR 10.4 million (EUR 7.6 million).
• The financial statements release contains Icecepital asset management companies acquired during the financial year 2012 from 20 November 2012. On 30 September 2013, eQ increased its holding in Finnreit Fund Management Company Ltd from 50 per cent to 100 per cent. Finnreit Fund Management Company has been consolidated with the Group's result as a subsidiary from 1 October 2013. Due to the acquisitions, the comparison figures of the interim report are not comparable.

Key ratios	10-12/ 2013	10-12/ 2012	Change %	1-12/ 2013	1-12/ 2012	Change %
Earnings per share, EUR	0.02	-0.03	167%	0.10	0.10	0%
Dividend proposal, EUR				0.15	0.12	25%
Equity per share, EUR	1.97	2.03	-3%	1.97	2.03	-3%
Interest-bearing liabilities, EUR million	0.0	4.0	-100%	0.0	4.0	-100%
Liquid assets and interest-bearing receivables, EUR million	11.3	10.7	5%	11.3	10.7	5%
Assets under management, EUR billion	6.7	6.3	6%	6.7	6.3	6%

	10-12/	10-12/	Change	1-12/	1-12/	Change
Key ratios	2013	2012	%	2013	2012	%
Net revenue, Group, EUR million	5.1	3.6	40%	18.8	16.3	15%
Net revenue, Asset Management, EUR million	3.7	2.6	43%	13.6	9.0	51%
Net revenue, Corporate Finance, EUR million	0.9	1.1	-14%	2.2	2.6	-18%
Net revenue, Investments, EUR million	0.4	-0.1	600%	3.0	4.7	-35%
Net revenue, other segments and
eliminations, EUR million	0.0	0.0	114%	0.0	0.0	-2%
Operating profit, Group, EUR million	1.1	-0.9	222%	4.9	4.7	6%
Operating profit, Asset Management, EUR million	0.8	-0.5	250%	3.1	0.9	244%
Operating profit, Corporate Finance, EUR million	0.3	0.4	-13%	0.4	0.7	-46%
Operating profit, Investments, EUR million	0.4	-0.1	600%	3.0	4.7	-35%
Operating profit, other segments, EUR million	-0.4	-0.7	41%	-1.6	-1.6	-1%
Profit for the period, EUR million	0.8	-0.8	201%	3.4	3.4	1%

Janne Larma, CEO

eQ consolidated its position as leading asset manager

The assets managed by eQ increased to EUR 6.7 billion by the end of the year. Measured with the value of the assets under management, eQ is the largest asset manager in Finland that is independent of bank groups. In 2013, we have successfully sold particularly asset management services related to emerging markets, real estate and private equity investments. During the year, the size of the eQ Emerging Markets Dividend Fund grew from EUR 70 million to EUR 159 million and the eQ Care Fund from EUR 6 million to EUR 81 million. The investment capacity of the eQ Care Fund exceeded EUR 160 million at the year-end. In the private equity market, we made a EUR 64 million close in the eQ PE VI North investment programme.

During the year, we improved our services by investing in a new information system. The system was introduced in stages during the year and is not fully operational. By investing in this new system, we were able to close three old systems, which both improves our client reporting and brings about cost savings.

Advium's market position remained good

For the fifth year in a row, the number of corporate and real estate acquisitions remained fairly modest. Towards the end of the year, activity started to grow, however, and the outlook is significantly better. In 2013, Advium acted as advisor in seven concluded transactions. Advium has a highly experienced team of 13, which creates good preconditions for result-yielding operations.

Asset Management increased its result

The Asset Management segment was able to increase its result significantly from the previous year, and its operating profit was EUR 3.1 million. In addition, one should note that all the synergy benefits related to the Icecapital acquisition were not yet visible at year level in 2013. Advium's result was modest with an operating profit of EUR 0.4 million. Based on the first months of 2014, the outlook is better, however. The Investments segment also made a lower result than in 2012 with an operating profit of EUR 3.0 million. The net cash flow of investments, EUR 10.4 million, exceeded, however, the 2012 level.

The Group's capital adequacy is high and balance sheet extremely strong

The balance sheet of the Group remained extremely strong during the entire year. The Group's liquid assets and interest-bearing receivables totalled EUR 11.3 million at the close of the year, while the balance sheet value of the private equity investments was EUR 30.6 million.

Outlook

The asset management business introduced the year 2014 from good preconditions. The strong sales during the last months of the year combined with the favourable outlook for new sales give trust in the growth of yields. Based on the beginning of the year, Advium's outlook is also encouraging. As a result, we believe that the result of the client operations, i.e. the Asset Management and Corporate Finance segments, will improve significantly from 2013. The result of the Investments segment depends, on the other hand, mainly on factors that the company cannot influence, due to which the result of the segment may vary considerably and is difficult to forecast.

***

eQ has decided to change the company's disclosure policy regarding issuing an outlook. According to the new practice, profit guidance is presented in the outlook as a verbal assessment regarding client operations (Asset Management and Corporate Finance). Previously, the company did not issue performance guidance and published the outlook as general verbal estimates. The outlook is presented in the financial statements release and in the report by the Board of Directors, as required by the Finnish Accounting Act. eQ will update the company's disclosure policy accordingly.

***

eQ's financial statements release for the period 1 January to 31 December 2013 is enclosed to this release and it will also be available on the company website at www.eQ.fi.

Additional information: Janne Larma, CEO, tel. +358 40 500 4366

Distribution: NASDAQ OMX Helsinki, www.eQ.fi

eQ Group is a Finnish listed company specialising in asset management and corporate finance business. eQ Asset Management offers a wide range of asset management services (including private equity funds) for institutions and individuals. The assets managed by the Group total approximately EUR 6.7 billion. Advium Corporate Finance Ltd, which is part of the Group, offers services related to mergers and acquisitions, real estate transactions and equity capital markets.

More information about the Group is available on our website at www.eQ.fi.

eQ PLC'S FINANCIAL STATEMENTS RELEASE 1 JAN. TO 31 DEC. 2013

Result of operations 1 October to 31 December 2013

• In the last quarter of the year, the Group's net revenue totalled EUR 5.1 million (EUR 3.6 million from 1 October to 31 December 2012).
• The Group's net fee and commission income totalled EUR 4.6 million (EUR 3.6 million).
• The Group's net investment income from own investments operations was EUR 0.5 million (EUR 0.0 million).
• The Group's operating profit was EUR 1.1 million (EUR -0.9 million).
• Consolidated earnings after taxes were EUR 0.8 million (EUR -0.8 million).
• Earnings per share were EUR 0.02 (EUR -0.03).

Result of operations and financial position 1 January to 31 December 2013

• In the financial period, the Group's net revenue totalled EUR 18.8 million (EUR 16.3 million from 1 Jan. to 31 Dec. 2012).
• The Group's net fee and commission income totalled EUR 15.4 million (EUR 11.3 million).
• The Group's net investment income from own investments operations was EUR 3.4 million (EUR 5.1 million).
• The Group's operating profit was EUR 4.9 million (EUR 4.7 million).
• The operating profit of client operations (Asset Management and Corporate Finance) was EUR 3.5 million (EUR 1.6 million).
• Consolidated earnings after taxes were EUR 3.4 million (EUR 3.4 million).
• Earnings per share were EUR 0.10 (EUR 0.10).
• Dividend proposal EUR 0.15 per share (EUR 0.12).
• Equity per share was EUR 1.97 (EUR 2.03 on 31 Dec. 2012).
• The assets under management totalled EUR 6.7 billion (EUR 6.3 billion on 31 Dec. 2012) at the end of the period.
• The net cash flow from own investment operations was EUR 10.4 million (EUR 7.6 million).
• The financial statements release contains Icecepital asset management companies acquired during the financial year 2012 from 20 November 2012. On 30 September 2013, eQ increased its holding in Finnreit Fund Management Company Ltd from 50 per cent to 100 per cent. Finnreit Fund Management Company has been consolidated with the Group's result as a subsidiary from 1 October 2013. Due to the acquisitions, the comparison figures of the interim report are not comparable.

Operating environment

The year 2013 was a time of slowly improving growth and economic stabilisation. Particularly in the US and China, the worst fear for disappointments in economic growth started to give way, and even in Japan the pace of growth was a positive surprise. On the other hand, Europe and Latin America continued to grow slowly compared with expectations. In Finland, the situation remained poorer that in the rest of Europe.

Like so often when the economic situation is about to turn, the market sentiment in 2013 was two-fold. At the same time as the market was hopeful that economic growth would speed up, it feared that stronger growth would lead to tighter monetary policy. Above all in the US, this juxtaposition was a central theme during the entire year and caused the greatest market fluctuations. Europe continued to plod from one crisis to another (Cyprus, Italy, Spain), but the market did not react to the problems of these countries as nervously as it had done a few years ago, and the focus shifted more to the economies and monetary policy of the US and China.

Equity market

Developed equity markets gave a good yield all along the line in 2013. The MSCI World Index, which measures the development of shares globally, rose by 21.2 per cent, the S&P 500 Index describing the US market by 25.9 per cent and the Japanese Nikkei Index by 23.0 per cent. Helsinki Stock Exchange gave an even better yield that the above with a rise of 31.6 per cent, but if we look at different sectors and companies, the picture is very heterogeneous. For example share prices in the basic industry sector fell by one per cent while share prices in the consumer goods sector rose by an average of 33.2 per cent. In Finland, the rise in the share prices of some companies accounted for the most part of the entire rise of the stock exchange.

Share prices did not rise evenly last year either, and the market saw some recoils. The strongest of these was experienced in the second quarter, when the market reacted in anticipation of lower bond buying by the Fed. Towards the end of the year, the market had become used to the idea, and when the Fed started to tighten its monetary policy in December, this no longer had a negative impact on the equity market.

On the other hand, equities in emerging market mostly fell in 2013. The MSCI Emerging Markets share index, which measures emerging markets globally, fell by 6.8 per cent. The only region that developed positively was Asia, but even there, differences between countries were big.

There were several reasons for the poor development of emerging markets. As the US economy recovered, investors moved their assets from emerging markets to the US and towards the end of the year to Europe as well. The fear for slower growth in China had a negative impact on share prices in China as well as in other markets. Additionally, the currencies of several emerging markets fell clearly during the year, which further increased the negative overall yield of investors.

Bond market

In the bond market, the yield of low-risk bond investments remained low in 2013, but in Europe the interest spreads of the so-called fringe stated narrowed. EMU government bonds gave a yield or 2.3 per cent at index level and euro-denominated investment grade bonds a yield of 2.4 per cent. High-yield bonds gave an even higher return, 8.6 per cent. In emerging markets, bonds suffered from negative investment flows and weaker currencies (local currency), just like equities, and the yield of bonds denominated in both western and above all local currencies remained negative.

The policies and measures of the Fed had the greatest impact on interest rate movements in 2013. Just like in the equity market, the greatest turbulence was experienced in the second quarter, when long interest rates rose rather steeply, as the view that the Fed would cut bond-buying grew stronger. During the entire year 2013, the German 10-year interest rate rose by 0.6 percentage points to 1.9 per cent, while the corresponding interest rate in the US rose by 1.3 percentage points to 3 per cent due to the improving economic outlook.

Major events during the period under review

In connection with the acquisition of Icecapital's asset management operations in 2012, business transfers were carried out at the beginning of 2013, whereby the business operations of Icecapital Asset Management Ltd were transferred to eQ Asset Management Ltd and those of Icecapital Fund Management Company Ltd to eQ Fund Management Company Ltd. After these business transfers, Icecapital Asset Management Ltd was merged with eQ Asset Management Ltd and Icecapital Fund Management Company Ltd with eQ Fund Management Company Ltd in the spring of 2013.

The Amanda V East private equity fund managed by eQ held its final close on 31 January 2013 on EUR 50.0 million. The fund makes investments in growth and buyout private equity funds, which make investments in small and midsized unlisted companies in Russia, CIS, CEE and SEE countries.

The Board of Directors of eQ Plc received a letter of resignation from Eero Heliövaara on 14 February 2013. The reason for Heliövaara's resignation was his appointment as Director General of the Government Ownership Steering Department as of 1 March 2013.

The Board of Directors of eQ Plc decided on 14 February 2013, based on the authorisation by the Annual General Meeting of eQ held on 13 March 2012, to carry out a share issue against payment directed to certain key persons of the eQ Group. Through the share issue, a total of 145 000 new shares in the company were offered for subscription to key persons. The key persons sold their minority shareholdings in eQ Financial Products Ltd (previously Icecapital Financial Products Ltd), which is part of the eQ Group The purpose of the directed share issue was to enhance the key persons' commitment to the company.

On 14 February 2013, eQ Plc's Board of Directors decided to issue to Veli-Pekka Heikkinen 200 000 option rights in accordance with eQ Plc's option scheme 2010. Veli-Pekka Heikkinen, D.Sc. (Econ.) was appointed Head of Portfolio Management at eQ Asset Management Ltd on 14 February 2013.

The Annual General Meeting of eQ Plc was held on 26 March 2013. The decisions of the AGM are presented in a separate chapter below.

eQ Asset Management Ltd acquired the entire share capital of Finnreit Fund Management Company Ltd through a deal that was carried out on 30 September 2013. eQ Asset Management Ltd had previously owned 50 per cent and the company management 50 per cent of the company. The sellers and key persons of Finnreit Fund Management Company Ltd joined eQ Asset Management Ltd.

The eQ PE VI North investment programme, established and managed by eQ, grew to EUR 64 million on 1 October 2013, when the eQ PE VI North Fund had its first close. The investment programme consists of a EUR 30 million programme launched in Q2 2013 for a local institutional investor, and a EUR 34 million fund, eQ PE VI North LP. eQ Plc made an investment commitment of EUR 3.0 million in the eQ PE VI North Fund in connection with the first close.

Group net sales and result development

Icecepital Asset Management Ltd and its subsidiaries, which eQ Group acquired on 19 November 2012, have been consolidated with the Group since the acquisition. On 30 September 2013, eQ increased its holding in Finnreit Fund Management Company Ltd from 50 to 100 per cent. Finnreit Fund Management Company has been consolidated with the Group's result as a subsidiary from 1 October 2013. Due to the acquisitions, the comparison figures of the interim report are not comparable.

During the financial period, the consolidated net revenue totalled EUR 18.8 million (EUR 16.3 million from 1 Jan. to 31 Dec. 2012). Fee and commission income increased from the comparison period due to the acquisition of Icecapital Asset Management Ltd and Finnreit Fund Management Company Ltd. The Group's net fee and commission income rose to EUR 15.4 million (EUR 11.3 million). On the other hand, the income from own investment operations fell from the comparison period. The net investment income was EUR 3.4 million (EUR 5.1 million), including a write-down of EUR 1.1 million (EUR 1.0. million) with a result impact.

The Group's expenses and depreciation totalled EUR 13.8 million (EUR 11.6 million). Personnel expenses were EUR 8.1 million (EUR 6.5 million), other administrative expenses totalled EUR 2.3 million (EUR 2.0 million) and the other operating expenses were EUR 2.1 million (EUR 1.9 million). Depreciation was EUR 1.4 million (EUR 1.2 million), including EUR 1.1 million (EUR 0.9 million) in depreciation of customer agreements allocated to intangible assets in connection with corporate acquisitions. The result of the financial year 2012 comprises non-recurring expenses totalling EUR 1.1 million resulting from a corporate acquisition and the termination of employment relationships.

The Group's operating profit was EUR 4.9 million (EUR 4.7 million). The profit for the financial period was EUR 3.4 million (EUR 3.4 million).

Business Areas

Asset Management

eQ Asset Management offers versatile asset management services to both institutions and individuals. The Asset Management segment consists of the investment firm eQ Asset Management Ltd and its subsidiaries, the most important of which is eQ Fund Management Company Ltd.

Mutual funds and asset management

The business operations of eQ Asset Management were expanded considerably towards the end of 2012, as it acquired the asset management business of Icecapital. In 2013, the organisations have been combined, the domestic fund range has been renewed and the portfolio management, risk management and reporting systems have been integrated. In connection with the integration, the company launched at the beginning of March a system project that introduced a new, unified and functionally efficient system platform. The project was completed by the end of 2013, and further development will continue in 2014.

At the end of 2013, eQ Asset Management had 34 mutual funds. The yields of the fixed-income funds were among the best in the market in 2013 as well. Among the equity funds, the best relative yield was given by our emerging market equity funds as well as funds making investments in Europe. The eQ Finland equity fund fell short of its benchmark index but gave an excellent return exceeding 20 per cent in 2013. As for the US and Japan, we mainly use Vanguard's effective index funds.

The best-performing fund of the year was the Emerging Markets Dividend Fund, which grew from about EUR 70 million to almost EUR 160 million. The fund is one of the best funds world-wide making investments in global emerging markets, and its yield exceeded that of the benchmark index by more than 15 percentage points in 2013.

Private equity

eQ Asset Management's private equity position was further consolidated in 2013. The Amanda V East private equity fund managed by eQ held its final close on 31 January 2013 on EUR 50.0 million, and its investment operations have began well.

On 1 October 2013, eQ launched a new fund called eQ PE North VI, which will make investments in private equity funds that make investments in small and mid-sized companies in Northern Europe. The total investment capacity of the parallel investment programme and fund is at the moment EUR 64 million, and the investment operations of the fund have had an exceptionally good start thanks to a secondary market transaction made in it.

Real estate investments

eQ Asset Management Ltd acquired the entire share capital of Finnreit Fund Management Company Ltd through a deal that was carried out on 30 September 2013. eQ Asset Management Ltd had previously owned 50 per cent and the company management 50 per cent of the company. The sellers and key persons of Finnreit Fund Management Company Ltd joined eQ Asset Management Ltd.

The size of the eQ Care fund grew during the year to more than EUR 80 million, and its investment capacity exceeds EUR 160 million. At the moment, the fund has 37 objects in its portfolio. The return of the first whole operating year was 12.1 per cent. The fund accepts subscriptions four times a year and redemptions twice a year.

Assets under management and clients

At the end of the financial year, the assets managed by eQ Asset Management totalled EUR 6 700 million, which is an increase by 6 per cent from the year before (EUR 6 294 million on 31 Dec. 2012). The increase was influenced by the rise of market values and net sales. At the end of the period under review, the assets managed by mutual funds registered in Finland totalled EUR 1 151 million (EUR 1 056 million on 31 Dec. 2012). Mutual funds managed by international partners and other assets covered by asset management operations totalled EUR 2 846 million (EUR 2 587 million). The assets managed under private equity funds and asset management totalled EUR 2 704 million (EUR 2 651 million). EUR 1 414 million (EUR 1 283 million) of these assets were covered by the reporting service.

The position of eQ Asset Management in the market for institutional investors improved according to the socalled SFR study that covers approximately 100 major institutional investors in Finland. According to the study, almost 40 per cent of these use eQ's services, and based on information about euro-denominated market shares, eQ is the fourth largest asset manager in Finland for institutional investors.

Result of the Asset Management segment

The net revenue of the Asset Management segment increased by 51 per cent and the operating profit by 244 per cent on the previous year. We assess that net synergy benefits exceeding EUR 2 million related to the acquisition of Icecapital were realized at annual level according to expectations. The number of personnel in the segment was 59 at the end of the period.

During the financial period, eQ closed its asset management offices in Sweden and Denmark. The decision is not expected to have any impact on the Group result. In future, eQ will carry out asset management operations in Denmark through a local partner.

Asset Management	10-12/ 2013	10-12/ 2012	Change %	1-12/ 2013	1-12/ 2012	Change %
Net revenue, EUR million	3.7	2.6	43%	13.6	9.0	51%
Operating profit, EUR million	0.8	-0.5	250%	3.1	0.9	244%
Assets under management, EUR billion	6.7	6.3	6%	6.7	6.3	6%
Personnel	59	81	-27%	59	81	-27%

The result of Icecapital Asset Management companies has been consolidated with the income statement of eQ Group and the Asset Management segment from 20 November 2012 and Finnreit Fund Management Company from 1 October 2013.

Corporate Finance

In the Corporate Finance segment, Advium Corporate Finance acts as advisor in mergers and acquisitions, larger real estate transactions and equity capital markets.

The year 2013 was challenging for Advium, as was the previous year. Even though the M&A market can still be described as cautious and slow, certain signs of market improvements started to emerge in the last quarter of 2013. During the financial year, Advium acted as advisor in seven transactions that were carried out.

In the first quarter, Advium acted as advisor for the seller, when Laura Properties B.V. sold Kilo Health Clinic located in Espoo to Mutual Pension Insurance Company Ilmarinen. In the second quarter, Advium acted as financial advisor as the Finnish Ministry of Employment and the Economy tried to arrange financing for the TUI ships to be built at STX Finland's Turku docks. In addition, Advium acted as advisor for the seller, as Dextra Oy sold its medical centre property in Munkkivuori, Helsinki to Fennia Life insurance company. In the third quarter Advium acted as financial advisor of the seller as Treston Oy concentrated on its core business and sold Hexaplan Oy to Lounais-Suomen Logistiikka Oy. In the last quarter of the year, Advium acted as Pöyry Plc's advisor when it sold its headquarters in Vantaa, Finland, to a fund managed by Niam. In addition,

Advium acted as financial advisor of the buyer, as Governia Oy bought of VR Group and the telecommunications operator TDC Oy Finland the entire share capital of Corenet Ltd. Just before Christmas, Advium acted as advisor for the Finnish Ministry of Employment and the Economy, when the government private equity investment company Industry Investment Ltd acquired a 66.4 per cent share of Aker Arctic Technology Ltd.

In 2013, Advium Corporate Finance was once more elected the best investment bank in Finland in the real estate sector in an inquiry by the renowned Euromoney magazine. Advium has been elected the best transaction advisor or investment bank in the real estate sector seven times since 2005 in Euromoney's annual inquiry.

The number of personnel in the Corporate Finance segment remained unaltered during the period under review and was 13 at the end of December.

It is typical of corporate finance business that success fees have a considerable impact on invoicing, due to which the result may vary considerably from quarter to quarter.

Corporate Finance	10-12/ 2013	10-12/ 2012	Change %	1-12/ 2013	1-12/ 2012	Change %
Net revenue, EUR million	0.9	1.1	-14%	2.2	2.6	-18%
Operating profit, EUR million	0.3	0.4	-13%	0.4	0.7	-46%
Personnel	13	13	0%	13	13	0%

Investments

The business operations of the Investments segment consist of private equity fund investments made from eQ Group's own balance sheet. Additional information on the investments of the Group can be found on the company website at www.eQ.fi.

During the financial year, the net revenue of the Investments segment totalled EUR 3.0 million (EUR 4.7 million from 1 Jan. to 30 Dec. 2012). At the end of the period, the fair value of the private equity fund investments was EUR 30.6 million (EUR 38.7 million on 30 December 2012). As for private equity investments, the amount of the remaining investment commitments was EUR 11.2 million (EUR 10.8 million). During the financial year, eQ Plc made a EUR 3.0 million investment commitment in the eQ PE VI North Fund. The investment objects returned capital for EUR 8.9 million (EUR 5.7 million) and distributed a profit of EUR 4.5 million (EUR 6.2 million) during the financial period. Capital calls totalled EUR 3.0 million (EUR 4.3 million). The net cash flow from the investments during the period was consequently EUR 10.4 million (EUR 7.6 million). A write-down of EUR 0.6 million (EUR 0.0) was recorded in the second quarter and a write-down of EUR 0.5 million (EUR 1.0 million) in the last quarter.

The largest exits and cash flows in 2013 were:

• The exit of the Triton II Fund from the producer of chemical raw materials Rütgers. The company was sold to the Indian Rain Commodities. The cash flow generated for eQ in the first quarter was EUR 1.8 million.
• The exit of EQT IV Fund from a company called Gambro. The company was sold to an industrial buyer Baxter International. Gambro is a global service provider of products and care related to kidney disease. The exit generated a cash flow of about EUR 1.0 million to eQ in the third quarter.
• The exit of the EQT V Fund from a company called Springer. The company was sold to another private equity investor BC Partners. The company is a publisher of magazines in science, technology, and health care. The exit generated a cash flow of EUR 1.0 to eQ in the third quarter.
• The exit of the Montagu III Fund from a company called Host. The company was sold to another private equity investor Cinven. The company is a provider of web hosting services. The exit generated a cash flow of EUR 0.8 to eQ in the third quarter.
• eQ's cash flow from the Amanda III fund in the last quarter of the year was EUR 1.4 million. The Amanda III fund has made its investments in other private equity funds that make investments in Russia and Eastern Europe.

As for the income from own investment operations, eQ Group's net revenue is recognised for eQ in different quarters due to factors independent of the company. Due to this segment's result may vary considerably. eQ has made a decision that it will only make new investments in funds managed by eQ in future.

Investments	10-12/ 2013	10-12/ 2012	Change %	1-12/ 2013	1-12/ 2012	Change %
Net revenue, EUR million	0.4	-0.1	600%	3.0	4.7	-35%
Operating profit, EUR million	0.4	-0.1	600%	3.0	4.7	-35%
Fair value of investments, EUR million	30.6	38.7	-21%	30.6	38.7	-21%
Investment commitments, EUR million	11.2	10.8	4%	11.2	10.8	4%

Balance sheet

At the end of the financial year, the consolidated balance sheet total was EUR 77.7 million (EUR 84.3 million on 31 Dec. 2012). At the end of the period, eQ Plc's shareholders' equity was EUR 71.8 million (EUR 73.6 million). During the period, the shareholders' equity was influenced by the profit for the period of EUR 3.4 million, the change in the fair value reserve of EUR -1.1 million, a directed share issue of EUR 0.3 million and the dividend distribution of EUR -4.4 million. The changes are specified in detail in the tables attached to this release.

At the end of the period, liquid assets and interest-bearing receivables totalled EUR 11.3 million (EUR 10.7 million). In order to safeguard the availability of financing, the Group has access to a credit limit of EUR 6.0 million. At the end of the financial period, the Group had no interest-bearing liabilities (EUR 4.0 million). At the end of the period, interest-free long-term debt was EUR 1.4 million (EUR 0.9 million) and interest-free short-term debt EUR 4.4 million (EUR 5.8 million). eQ's equity to assets ratio was 92.4 % (87.3%).

In the first quarter, eQ paid an additional sales price in connection with the deal on Icecapital Asset Management Ltd concluded in November 2012. The additional sales price based on the acquired final net assets was EUR 0.2 million. This sum was allocated to goodwill in intangible assets.

The Group increased its holding in eQ Financial Products Ltd from 51 to 100 per cent in February 2013. The acquisition cost of the ownership share was EUR 0.4 million. The net assets of eQ Financial Products Ltd at the time of the acquisition were EUR 0.7 million and the net assets allocated to the acquired share EUR 0.4 million. eQ Financial Products Ltd was merged with eQ Asset Management Ltd in June 2013. In addition, the Group increased its holding in eQ Asset Management Denmark A/S from 85 to 100 per cent in October 2013. The acquisition cost of the ownership share acquired was EUR 0.0 million. The net assets of eQ Asset Management Denmark A/S at the time of the acquisition were EUR -0.3 million and the net assets allocated to the acquired share EUR -0.0 million. The difference between the acquisition costs of eQ Financial Products Ltd and eQ Asset Management Denmark A/S and the net assets of the acquired ownership shares was EUR 0.1 million, which was allocated to the Group's retained earnings.

Business acquisitions

eQ Asset Management Ltd acquired the entire share capital of Finnreit Fund Management Company Ltd through a deal that was carried out on 30 September 2013. eQ Asset Management Ltd had previously owned 50 per cent and the company management 50 per cent of the company. The total acquisition cost for Finnreit Fund Management Company Ltd was EUR 3.0 million. The purchase was financed with the Group's liquid assets. The acquisition cost comprises a transfer tax of EUR 0.0 million. The fair value of shares based on eQ Group's former holding (50%) immediately before the acquisition was EUR 0.3 million, which corresponded to the balance sheet value of the shares.

The total acquisition cost comprises a conditional payment of EUR 0.7 million related to an additional purchase price defined on the basis of future income. This conditional payment has been defined by assessing the present value of the performance fees that will be obtained during the following five years. In the calculations, the company has used a discount rate that reflects the view on the time value of money and

the special risks related to the asset item. At the end of the financial period, the additional acquisition cost of EUR 0.7 is included in other liabilities on the balance sheet. The additional purchase price will fall due based on the income to be paid between 2017 and 2019 and can change from the now assessed sum.

The acquisition cost exceeded the purchased net assets by EUR 2.7 million, which was allocated to goodwill. The goodwill is based on the acquired company's personnel and expertise and gives eQ the opportunity to expand its business and product offering.

The balance sheet of Finnreit Fund Management Company Ltd has been consolidated with eQ Group as a subsidiary from 30 September 2013. The company's result is consolidated with eQ Group's result from 1 October 2013. If the acquired company had been consolidated with eQ Group's result from the beginning of 2013, the Group's net revenue had been EUR 0.1 million higher and result EUR 0.1 million lower during the period.

Fair value of acquires net assets and goodwill, EUR million
Liquid assets	0.2
Receivables	0.2
Liabilities	0.1
Net assets	0.2
Total acquisition cost	3.0
Goodwill	2.7

Shares and share capital

The Board of Directors of eQ Plc decided on 14 February 2013, based on the authorisation by the Annual General Meeting of eQ held on 13 March 2012, to carry out a share issue against payment directed to certain key persons of the Group. In the share issue, a total of 145 000 new shares in the company were offered for subscription to key persons deviating from the shareholders' pre-emptive subscription right.

The subscription price was EUR 2.01 per share. The volume-weighted average price of the company's share on NASDAQ OMX Helsinki Ltd for the period of 20 consecutive trading days before the Board meeting that decided on the personnel issue was EUR 2.23 per share. Thus, the discount in the issue was EUR 0.22 for each share i.e. 10 per cent. The entire subscription price of the new shares was entered into eQ's reserve for invested unrestricted equity. A subscriber has no right to assign the subscribed shares before 14 February 2014, and if the subscription exceeds 20 000 shares, not before 14 February 2016.

Based on the share issue, the number of eQ shares grew from 36 297 198 to 36 442 198 shares. The shares were entered in the Trade Register on 28 February 2013. The share capital did not change as a result of the share issue. The share capital was EUR 11 383 873 on 31 December 2013.

Own shares

eQ Plc held no own shares at the end of the period on 31 December 2013.

Shareholders

On 11 March 2013, eQ Plc issued a flagging notification, according to which Ulkomarkkinat Oy announced that it had acquired shares in an amount that exceeded the 10 per cent flagging threshold.

Ten major shareholders on 31 December 2013

	Share of votes and shares, %
Fennogens Investements SA	15.90%
Chilla Capital	11.72%
Ulkomarkkinat Oy	10.23%
Veikko Laine Oy	10.06%
Oy Hermitage Ab	6.30%
Mandatum Life Insurance Company	5.63%
Oy Cevante Ab	3.89%
Teamet Oy	3.29%
Fazer Jan Peter	2.92%
Linnalex Ab	2.42%

On 31 December 2013, eQ Plc had 3 300 shareholders.

Option scheme 2010

At the end of the period, eQ Plc had one option scheme. The option scheme is intended as part of the incentive and commitment system of the Group's key employees.

On 14 February 2013, eQ Plc's Board of Directors decided to issue to Veli-Pekka Heikkinen 200 000 option rights in accordance with eQ Plc's option scheme 2010 (50 000 2010B options, 50 000 2010C options, 50 000 2010D options and 50 000 2010E options). Veli-Pekka Heikkinen, D.Sc. (Econ.), was appointed Head of Portfolio Management at eQ Asset Management Ltd on 14 February 2013.

At the end of the period under review, altogether 1 700 000 options had been allocated. Based on the authorisation given to the Board on 14 April 2010 by the Annual General Meeting, there were 30 000 options still available for allocation at the end of the period. The terms and conditions of the option scheme have been published in a stock exchange release of 18 August 2010, and they can be found in their entirety on the company website at www.eQ.fi.

Decisions by the Annual General Meeting

eQ Plc's Annual General Meeting (AGM), held on Tuesday 26 March 2013 in Helsinki, decided on the following:

Confirmation of the financial statements

eQ Plc's AGM confirmed the financial statements of the company, which included the consolidated financial statements, the report by the Board of Directors and the Auditors' Report for the financial year 2012.

Decision in respect of the result shown on the balance sheet

The AGM confirmed the proposal by the Board of Directors that a dividend of EUR 0.12 per share be paid. The dividend was paid to shareholders who, on the record date for the dividend payment, i.e. 2 April 2013, were recorded in the shareholder register held by Euroclear Finland Ltd. The dividend was paid on 9 April 2013.

Discharge from liability to the Board of Directors and the CEO

The AGM decided to grant discharge from liability to the Board of Directors and the CEO.

Number of directors, appointment of directors and the remuneration of the directors

According to the decision of the AGM, five members shall be elected to eQ Plc's Board of Directors. Christina Dahlblom, Georg Ehrnrooth, Ole Johansson, and Jussi Seppälä were re-elected to the Board and Nicolas Berner was elected as new member. The term of office of the directors will end at the close of the next Annual General Meeting. The AGM decided that the directors would receive remuneration as follows: the Chairman of the Board will receive EUR 3 300 and the other directors EUR 1 800 per month. Travel and lodging costs will be compensated in accordance with the company's expense policy. The Board elected Ole Johansson Chairman of the Board at its constituent meeting held immediately after the AGM.

Auditors and auditors' compensation

Ernst & Young Oy, a corporation of authorised public accountants, will continue as auditor of the company, and Ulla Nykky, APA, will act as Lead Auditor. It was decided to compensate the auditors according to an invoice approved by eQ Plc.

Authorising the Board of Directors to decide on the repurchase of the company's own shares

The AGM authorised the Board of Directors to decide on the repurchase of no more than 1 000 000 own shares, which can be repurchased otherwise than in proportion to the shareholdings of the shareholders with assets from the company's unrestricted equity at the market price in public trading on NASDAQ OMX Helsinki at the time of purchase. The number of shares corresponded to approximately 2.76 per cent of all shares in the company. Own shares may be repurchased in order to develop the company's capital structure, to finance or carry out acquisitions or other business transactions, or to be used as part of the company's incentive schemes. For said purposes, the repurchased shares may be held, cancelled or transferred further. The Board of Directors shall decide on other matters related to the repurchase of own shares. The authorisation cancels all previous authorisations to repurchase the company's own shares and is effective until the next AGM.

Authorising the Board of Directors to decide on the issuance of shares as well as the issuance of special rights entitling to shares

The AGM authorised the Board of Directors to decide on a share issue or share issues and/or the issuance of special rights entitling to shares referred to in Chapter 10 Section 1 of the Limited Liability Companies Act, comprising a maximum total of 5 000 000 new shares. The amount of the authorisation corresponded to approximately 13.76 per cent of all shares in the company. The authorisation is to be used in order to finance or carry out potential acquisitions or other business transactions, to strengthen the balance sheet and the financial position of the company, to carry out the company's incentive schemes or to any other purposes decided by the Board. Based on the authorisation, the Board shall decide on all matters related to the issuance of shares and special rights entitling to shares referred to in Chapter 10 Section 1 of the Limited Liability Companies Act, including the recipients of the shares or the special rights entitling to shares and the amount of the consideration to be paid. Therefore, based on the authorisation, shares or special rights entitling to shares may also be issued to certain persons, i.e. in deviation from the shareholders' pre-emptive rights as described in said Act. A share issue may also be executed without payment in accordance with the preconditions set out in the Limited Liability Companies Act. The authorisation cancels all previous corresponding authorisations and is effective until the next AGM.

Personnel and organisation

At the end of the period, the number of Group personnel was 82 (103 on 31 December 2012). The Asset Management segment had 59 (81) employees, the Corporate Finance segment 13 (13) employees and the Investments segment 1 (1) employee. Group administration had 9 (8) employees. The personnel of the Asset Management segment comprises three persons with fixed-term employment and that of Group administration one person. Of the personnel, 79 persons (99) worked in Finland and 3 persons (4) in other Scandinavian countries.

As a result of the co-determination negotiations concerning the entire personnel conducted by eQ Plc's subsidiaries eQ Asset Management Ltd, eQ Fund Management Company Ltd, Icecapital Asset Management Ltd and Icecapital Fund Management Company Ltd in November 2012, the company agreed with 18 persons on the termination of their employment at the beginning of 2013. The aim of the plan handled during the negotiations was to remove overlapping functions generated through the acquisition of Icecapital Asset Management Ltd and its subsidiaries and to improve the Group's competitiveness by adapting costs.

The overall salaries paid to the employees of eQ Group during the financial period totalled EUR 8.1 million (EUR 6.5 million from 1 Jan. to 31 Dec. 2012). Due to the acquisitions of Icecapital Asset Management Ltd and Finnreit Fund management Company Ltd, the information on overall salaries in 2012 and 2013 is not comparable.

Major risks and short-term uncertainties

The result of the Asset Management segment depends on the development of the assets under management, which is highly dependent of the development of the capital market. On the other hand, the management fees of private equity funds are based on long-term agreements that produce a stable cash flow.

Success fees, which depend on the number of mergers and acquisitions and real estate transactions, have a considerable impact on the result of the Corporate Finance segment. These vary considerably within one year and are dependent on economic trends.

The risks associated with eQ Group's own investment operations are the market risk, currency risk and liquidity risk. Among these, the market risk has the greatest impact on investments. The company's own investments are well diversified, which means that the impact of one investment in a company, made by one individual fund, on the yield of the investments is often small. The income from eQ Group's own investment operations is recognised for eQ in different quarters due to factors independent of the company, depending on the exits from private equity funds. The income from investment operations may vary considerably from quarter to quarter.

Proposal for the distribution of profit

The distributable means of the parent company on 31 December 2013 totalled EUR 57.0 million. The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.15 per share be paid out on the record date 1 April 2014. The proposal corresponds to a dividend totalling EUR 5 466 329.70 calculated with the number of shares at the end of the financial year. The Board proposes that the dividend payment date is 8 April 2014.

After the end of the financial period, no essential changes have taken place in the financial position of the company. The Board of Directors feel that the proposed distribution of profit does not endanger the liquidity of the company.

Events after the financial period

The business operations of the Group's subsidiary Finnreit Fund Management Company Ltd were transferred with a business transfer to another subsidiary, eQ Fund Management Company Ltd on 1 January 2014.

In the Investments segment, private equity funds in which eQ has made investments have announced exits that have not been realised during the financial period. If the announced exits will be carried out according to plan, the cash flow from the exits that eQ will receive after the financial period, in the first or second quarter of 2014, is estimated to be about EUR 1.4 million, of which the estimated distribution of profits accounts for about EUR 0.0 million.

After the end of the financial period, Advium acted as advisor for Sanoma in the sale of its printing facility and office properties located in Vantaankoski, Finland. The buyer is Swedish AB Sagax. This was one of the largest sales of industrial property in Finland ever.

Outlook

The asset management business introduced the year 2014 from good preconditions. The strong sales during the last months of the year combined with the favourable outlook for new sales give trust in the growth of yields. Based on the beginning of the year, Advium's outlook is also encouraging. As a result, we believe that the result of the client operations, i.e. the Asset Management and Corporate Finance segments, will improve significantly from 2013. The result of the Investments segment depends, on the other hand, mainly on factors that the company cannot influence, due to which the result of the segment may vary considerably and is difficult to forecast.

eQ Plc Board of Directors

TABLES

Principles for drawing up the report

The financial statements release has been prepared in accordance with the IFRS and IAS 34 Interim Financial Reporting standards approved by the EU. At the beginning of the financial period, the company has adopted certain new or amended IFRS standards and IFRIC interpretations in the manner described in the financial statements 2012. However, the introduction of these new or amended standards has not had any major impact on the reported figures. For other parts, the Group has applied the same accounting principles as in the financial statements for the year 2012. The calculation principles and formulas of the key ratios remain unaltered, and they have been presented in the financial statements for 2012.

From the beginning of the financial period 2013, the Group has changed the way of presenting the Group's IFRS income statement and balance sheet in a manner allowed by IFRS. From the beginning of 2013, the Group presents the income statement and balance sheet in the manner commonly used by investment firms. The manner of presentation was changed, as the main emphasis of the Group's business lies on investment firm operations. The comparison figures of the interim report have been regrouped according to the new manner of presentation. The change in the manner of presentation does not have any impact on the figures presented now or earlier, as the changes only relate to the way of grouping income statement and balance sheet items.

As for the net investment income from own investment operations, eQ Group's net sales are recognised for eQ in different quarters due to factors independent of the company.

The financial statements figures presented in this release are based on the company's audited financial statements. The Auditors' Report has been issued on 14 February 2014.

	10-12/13	10–12/12	1–12/13	1–12/12
Fee and commission income	4 645	3 664	15 670	11 435
Net income from foreign exchange dealing	-7	4	-24	4
Interest income	16	16	28	30
Net income from available-for-sale financial assets	500	20	3 430	5 080
Operating income, total	5 154	3 704	19 105	16 548
Fee and commission expenses	-59	-85	-269	-209
Interest expenses	-11	-21	-69	-44
NET REVENUE	5 084	3 598	18 767	16 295
Administrative expenses
Personnel expenses	-2 403	-2 662	-8 052	-6 509
Other administrative expenses	-559	-627	-2 263	-1 952
Depreciation on tangible and intangible assets	-449	-336	-1 388	-1 246
Other operating expenses	-562	-919	-2 136	-1 920
OPERATING PROFIT (LOSS)	1 111	-946	4 928	4 668
Share of associated companies' results	-	-35	-71	-35
PROFIT BEFORE TAXES	1 111	-981	4 857	4 632
Income tax	-275	157	-1 443	-1 247
PROFIT (LOSS) FOR THE PERIOD	835	-825	3 414	3 386

CONSOLIDATED INCOME STATEMENT, EUR 1 000

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

	10-12/13	10–12/12	1–12/13	1–12/12
Other comprehensive income:
Items that may be reclassified subsequently
to the income statement:
Available-for-sale financial assets, net	-516	215	-1 083	-938
Translation differences	-1	-5	15	-5
Other comprehensive income after taxes	-517	210	-1 068	-943
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	319	-614	2 346	2 443
Profit for the period attributable to:
Equity holders of the parent company	864	-847	3 487	3 364
Non-controlling interests	-29	22	-73	22
Comprehensive income for the period attributable to:
Equity holders of the parent company	348	-636	2 419	2 421
Non-controlling interests	-29	22	-73	22
Earnings per share calculated from the profit of equity
holders of the parent company:
Earnings per average share, EUR	0.02	-0.03	0.10	0.10
Diluted earnings per average share, EUR	0.02	-0.03	0.09	0.10

CONSOLIDATED BALANCE SHEET, EUR 1 000

	31 Dec.	31 Dec.
	2013	2012
ASSETS
Liquid assets	28	33
Claims on credit institutions	9 955	9 356
Claims of the public and public sector entities	1 300	1 336
Available-for-sale financial assets
Financial securities	51	50
Private equity investments	30 600	38 691
Shares in associated companies	-	365
Intangible assets	31 120	29 174
Tangible assets	116	138
Other assets	2 214	3 582
Accruals and prepaid expenditure	1 647	1 248
Income tax receivables	96	289
Deferred tax assets	527	57
TOTAL ASSETS	77 653	84 319
LIABILITIES AND EQUITY
LIABILITIES
Liabilities to credit institutions	-	4 000
Other liabilities	2 618	2 680
Accruals and deferred income	2 382	3 076
Income tax liabilities Deferred tax liabilities	131 732	84 875
TOTAL LIABILITIES	5 863	10 715
EQUITY
Attributable to equity holders of the parent company:
Share capital	11 384	11 384
Fair value reserve	-2 567	-1 484
Translation difference	10	-5
Reserve for invested unrestricted equity	52 167	51 875
Retained earnings	7 654	8 394
Profit (loss) for the period	3 487	3 364
Attributable to non-controlling interests	-345	77
TOTAL EQUITY	71 790	73 604
TOTAL LIABILITIES AND EQUITY	77 653	84 319

CONSOLIDATED CASH FLOW STATEMENT, EUR 1 000

	1-12/2013	1-12/2012
CASH FLOW FROM OPERATIONS
Operating profit	4 929	4 668
Depreciation and write-downs	2 438	2 234
Interest income and expenses	41	14
Transactions with no related payment transactions	337	131
Available-for-sale investments, change	5 883	1 617
Change in working capital
Business receivables, increase (-) / decrease (+)	1 473	-2 490
Interest-free debt, increase (+) / decrease (-)	-1 722	324
Total change in working capital	-249	-2 166
Cash flow from operations before financial items and taxes	13 378	6 498
Interests received	28	30
Interests paid	-69	-44
Taxes	-1 870	-1 832
CASH FLOW FROM OPERATIONS	11 467	4 652
CASH FLOW FROM INVESTMENTS
Acquisition of associated companies	-	-400
Acquisition of subsidiaries excluding acquired cash	-1 932	-10 649
Investments in intangible and tangible assets	-438	-1
CASH FLOW FROM INVESTMENTS	-2 370	-11 051
CASH FLOW FROM FINANCING
Dividends paid	-4 411	-3 996
Income from share issue	291	5 244
Loan withdrawals	-	4 000
Repayment of loans	-4 000	-
Changes in subsidiary holdings	-386	-
CASH FLOW FROM FINANCING	-8 505	5 248
INCREASE/DECREASE IN LIQUID ASSETS	593	-1 150
Liquid assets on 1 Jan.	9 389	10 540
Liquid assets on 31 Dec.	9 982	9 389

CHANGE IN CONSOLIDATED SHAREHOLDERS' EQUITY, EUR 1 000

Equity attributable to equity holders of the parent company
	Share capital	Reserve for invested unrestricted equity	Fair value reserve	Translation differences	Retained earnings	Total	Share of non controlling interests	Total equity
Shareholders' equity on 1
Jan. 2012	11 384	46 631	-546	-	12 215	69 684	-	69 684
Profit (loss) for the period					3 364	3 364	22	3 386
Other comprehensive income
Available-for-sale financial assets			-938			-938		-938
Translation differences				-5		-5		-5
Total comprehensive income			-938	-5	3 364	2 421	22	2 443
Share issue		5 244				5 244		5 244
Dividend distribution					-3 996	-3 996		-3 996
Other changes					35	35		35
Options granted					140	140		140
Changes in subsidiary
holdings							55	55
Shareholders' equity on 31
Dec. 2012	11 384	51 875	-1 484	-5	11 758	73 528	77	73 604
Shareholders' equity on 1
Jan. 2013	11 384	51 875	-1 484	-5	11 758	73 528	77	73 604
Profit (loss) for the period					3 487	3 487	-73	3 414
Other comprehensive income
Available-for sale financial assets			-1 083			-1 083		-1 083
Translation differences				15		15		15
Total comprehensive income			-1 083	15	3 487	2 419	-73	2 346
Dividend distribution					-4 411	-4 411		-4 411
Share issue		291				291		291
Options granted					338	338		338
Other changes					-31	-31		-31
Changes in subsidiary
holdings							-348	-348
Shareholders' equity on 31
Dec. 2013	11 384	52 167	-2 567	10	11 141	72 135	-345	71 790

FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES, EUR 1 000

	31 Dec. 2013		31 Dec. 2012
	Fair	Book	Fair	Book
	value	value	value	value
Financial assets
Available-for-sale financial assets
Private equity investments	30 600	30 600	38 691	38 691
Financial securities	51	51	50	50
Loan receivables	1 300	1 300	1 336	1 336
Accounts receivable and other
receivables	3 957	3 957	5 119	5 119
Liquid assets	9 982	9 982	9 389	9 389
Total	45 890	45 890	54 586	54 586
Financial liabilities
Liabilities to credit institutions	-	-	4 000	4 000
Accounts payable and other liabilities	5 131	5 131	5 840	5 840
Total	5 131	5 131	9 840	9 840

The table shows the fair values and book values of financial assets and liabilities per balance sheet item. The assessment principles of fair values are presented in the accounting principles. The original book value of accounts receivable and accounts payable corresponds to their fair value, as the impact of discounting is not essential taking into account the maturity of the receivables and liabilities.

Value of financial instruments across the three levels of the fair value hierarchy

	31 Dec. 2013
	Fair value	Level 3
Available-for-sale financial assets
Private equity investments	30 600	30 600
Financial securities	51	51
Total	30 652	30 652

Level 3 reconciliation – Available-for-sale financial assets:

	Private
	equity	Financial
	investments	securities	Total
Opening balance on 1 Jan. 2013	38 691	50	38 741
Calls	3 046	-	3 046
Returns	-8 928	-	-8 928
Impairment loss	-1 050	-	-1 050
Change in fair value	-1 158	1	-1 157
Closing balance on 31 Dec. 2013	30 600	51	30 652

The fair values of level 3 instruments are based on the value of the fund according to the management company of the fund and their use in widely used valuation models.

Private equity investments are valued in accordance with a practice widely used in the sector,

International Private Equity and Venture Capital Guidelines.

The impairment losses of private equity investments are based on the management's assessment, as described in the principles for preparing the financial statements. During the period under review, no transfers took place between the levels of the fair value hierarchy.

SEGMENT INFORMATION, EUR 1 000

Management Finance Other total Fee and commission income 3 715 930 - - 4 645 From other segments 100 - - - -100 - Net income from foreign exchange dealing -7 - - 0 -7 Interest income - - - 16 16 Net income from available-for sales financial assets - - 500 - 500 Other operating income - - - - - From other segments - - - 19 -19 - Operating income, total 3 808 930 500 35 -119 5 154 Fee and commission expenses -59 - - - -59 To other segments - - -100 - 100 - Interest expenses - - - -11 -11 NET REVENUE 3 748 930 400 24 -19 5 084 Administrative expenses Personnel expenses -1 642 -469 - -292 -2 403 Other administrative expenses -438 -77 - -63 19 -559 Depreciation on tangible and intangible assets -439 -4 - -6 -449
Other operating expenses -428 -63 - -71 -562
OPERATING PROFIT (LOSS) 802 317 400 -409 0 1 111
Share of associated companies' results - - - - -
PROFIT BEFORE TAXES 802 317 400 -409 1 111
Income tax -275 -275
PROFIT (LOSS) FOR THE PERIOD -684 835

10-12/12		Asset Corporate	Investments		Eliminations	Group
	Management	Finance		Other		total
Fee and commission income	2 576	1 088	-	-		3 664
From other segments	100	-	-	-	-100	-
Net income from foreign exchange dealing	4	-	-	-		4
Interest income	-	-	-	16		16
Net income from available-for-sale
financial assets	-	-	20	-		20
Other operating income	-	-	-	-		-
From other segments	-	-	-	18	-18	-
Operating income, total	2 680	1 088	20	34	-118	3 704
Fee and commission expenses	-55	-	-	-30		-85
To other segments	-	-	-100	-	100	-
Interest expenses	-	-	-	-21		-21
NET REVENUE	2 625	1 088	-80	-17	-18	3 598

10-12/12		Asset Corporate	Investments		Eliminations	Group
	Management	Finance		Other		total
Administrative expenses
Personnel expenses	-1 914	-550	-	-198		-2 662
Other administrative expenses	-478	-86	-	-81	18	-627
Depreciation on tangible and intangible
assets	-323	-4	-	-9		-336
Other operating expenses	-445	-82	-	-392		-919
OPERATING PROFIT (LOSS)	-535	366	-80	-697	0	-946
Share of associated companies' results	-35	-	-	-		-35
PROFIT BEFORE TAXES	-571	366	-80	-697		-981
Income tax				157		157
PROFIT (LOSS) FOR THE PERIOD				-540		-825

1-12/13		Asset Corporate	Investments		Eliminations	Group
	Management	Finance		Other		total
Fee and commission income	13 511	2 159	-	-		15 670
From other segments	400	-	-	-	-400	-
Net income from foreign exchange dealing	-23	-	-	-1		-24
Interest income	-	-	-	28		28
Net income from available-for sales
financial assets	-	-	3 430	-		3 430
Other operating income	-	-	-	-		-
From other segments	-	-	-	76	-76	-
Operating income, total	13 888	2 159	3 430	103	-476	19 105
Fee and commission expenses	-267	-	-	-2		-269
To other segments	-	-	-400	-	400	-
Interest expenses	-	-	-	-69		-69
NET REVENUE	13 621	2 159	3 030	33	-76	18 767
Administrative expenses
Personnel expenses	-5 774	-1 253	-	-1 025		-8 052
Other administrative expenses	-1 806	-243	-	-290	76	-2 263
Depreciation on tangible and intangible
assets	-1 350	-12	-	-26		-1 388
Other operating expenses	-1 552	-261	-	-323		-2 136
OPERATING PROFIT (LOSS)	3 139	389	3 030	-1 631	0	4 928
Share of associated companies' results	-71	-	-	-		-71
PROFIT BEFORE TAXES	3 068	389	3 030	-1 631		4 857
Income tax				-1 443		-1 443
PROFIT (LOSS) FOR THE PERIOD				-3 074		3 414

1-12/12		Asset Corporate	Investments		Eliminations	Group
	Management	Finance		Other		total
Fee and commission income	8 800	2 635	-	-		11 435
From other segments	400	-	-	-	-400	-
Net income from foreign exchange dealing	4	-	-	-		4
Interest income	-	-	-	30		30
Net income from available-for-sale
financial assets	-	-	5 080	-		5 080
Other operating income	-	-	-	-		-
From other segments	-	-	-	73	-73	-
Total operating income	9 204	2 635	5 080	103	-473	16 548
Fee and commission expenses	-179	-	-	-30		-209
To other segments	-	-	-400	-	400	-
Interest expenses	-	-	-	-44		-44
NET REVENUE	9 025	2 635	4 680	29	-73	16 295
Administrative expenses Personnel expenses	-4 321	-1 402	-	-786		-6 509
Other administrative expenses	-1 536	-219	-	-270	73	-1 952
Depreciation on tangible and intangible
assets	-1 202	-15	-	-29		-1 246
Other operating expenses	-1 055	-274	-	-591		-1 920
OPERATING PROFIT (LOSS)	912	725	4 680	-1 648	0	4 668
Share of associated companies' results	-35	-	-	-		-35
PROFIT BEFORE TAXES	876	725	4 680	-1 648		4 633
Income tax				-1 247		-1 247
PROFIT (LOSS) FOR THE PERIOD				-2 895		3 386

The income of the Asset Management segment from other segments comprises the management fee income from eQ Group's own investments in private equity funds. The corresponding expenses are allocated to the Investments segment. Under the item Other, income from other segments comprises the administrative services provided by Group administration to other segments and the undivided interest income and expenses. The item Other also includes the undivided personnel, administration and other expenses allocated to Group administration. The taxes not distributed to the segments are also presented under the item Other.

The highest operative decision-making body does not follow assets and liabilities at segment level, due to which the Group's assets and liabilities are not presented as divided between the segments.

GROUP KEY RATIOS

	31 Dec.	31 Dec.
	2013	2012
Profit (loss) for the period to the equity holders of the parent company
(EUR 1 000)	3 487	3 364
Earnings per average share, EUR	0.10	0.10
Diluted earnings per average share, EUR	0.09	0.10
Equity per share, EUR	1.97	2.03
Equity per average share, EUR *)	1.97	2.21
Return on investment, ROI % p.a.	4.7	4.7
Return on equity, ROE % p.a.	4.7	4.7
Equity to assets ratio, %	92.4	87.3
Group's capital adequacy ratio, %	35.7	42.3
Share price at the and of the period, EUR	2.29	2.00
Number of personnel at the end of the period	82	103

*) Weighted average number of shares outstanding.

RELATED PARTY TRANSACTIONS

Open balances with key persons belonging to the company management

On 4 September 2012, eQ Plc's Board decided to grant an interest-bearing loan in the amount of EUR 1.3 million to a company wholly owned by Mikko Koskimies, who had been appointed Managing Director of eQ Asset Management Ltd and member of eQ Group's Management Team for financing a purchase of shares in eQ Plc as part of the management's long-term incentive scheme. On 31 December 2013, EUR 1.3 million of this loan was an open receivable.

The acquired shares in eQ Plc function as security for the loan. The interest rate of the loan is market-based. The entire loan will be repaid within five years at the latest. The company wholly owned by Koskimies has the right to repay the loan prematurely at any time. The transfer of the eQ shares owned by the company is restricted for three years during the duration of the scheme.

Transactions with related parties and receivables from related parties, EUR 1 000

Associated companies - Finnreit Fund Management Company Ltd, associated company till 30 September 2013

	1-12/13	1-12/12
Sales	156	43
Receivables	-	16

REMAINING COMMITMENTS

On 31 December 2013, eQ's remaining commitments in private equity funds totalled EUR 11.2 million (EUR 10.8 million on 31 Dec. 2012). Other commitments at the end of the period under review totalled EUR 0.4 million (EUR 1.2 million on 31 Dec. 2012).