eQ Oyj — Interim / Quarterly Report 2012

Nov 7, 2012

eQ PLC STOCK EXCHANGE RELEASE

7 November 2012, at 3:30 p.m.

eQ PLC'S INTERIM REPORT 1 JANUARY TO 30 SEPTEMBER 2012

July to September 2012 in brief

• In the third quarter, the fee and commission income totalled EUR 2.7 million (EUR 2.6 million from 1 July to 30 Sept. 2011).
• The Group's net investment income was EUR 4.1 million (EUR 3.1 million).
• The Group's operating profit was EUR 4.3 million (EUR 3.2 million).
• Earnings per share were EUR 0.09 (EUR 0.07).

January to September 2012 in brief

• During the period under review, the fee and commission income totalled EUR 7.6 million (EUR 6.8 million from 1 Jan. to 30 Sept. 2011).
• The Group's net investment income was EUR 5.1 million (EUR 6.8 million).
• Operating profit was EUR 5.6 million (EUR 7.6 million).
• Earnings per share were EUR 0.12 (EUR 0.16).
• The interim report 1 January to 30 September 2012 comprises eQ Asset Management Group and Advium Corporate Finance Ltd from 1 April 2011 as comparison information. The comparison figures of the interim report are, therefore, not comparable.

Kay ratios	7-9/2012	7-9/2011	1-9/2012	1-9/2011	1-12/2011
Net sales, EUR million	6.7	5.6	12.7	13.6	15.8
Operating profit, EUR million	4.3	3.2	5.6	7.6	7.2
Profit before taxes, EUR million	4.3	3.2	5.6	7.2	6.9
Profit for the period, EUR million	3.2	2.3	4.2	5.2	4.9
Earnings per share, EUR	0.09	0.07	0.12	0.16	0.15
Equity per share, EUR	2.05	2.07	2.05	2.07	2.08
Equity to assets ratio, %	95.5%	93.6%	95.5%	93.6%	94.1%
Interest-bearing liabilities, EUR million	0.0	0.0	0.0	0.0	0.0
Cash, EUR million	12.5	11.0	12.5	11.0	10.5

Janne Larma, CEO

The trust of investors in the capital market improved in the third quarter. The crisis that the public economies of the eurozone suffer from persists, but it has been possible to prevent acute crises related to financing with special support packages. In the third quarter, share prices mainly rose and corporate loans gave a good return.

In the third quarter, there were two events that will contribute to the growth of our company. eQ acquired 50 per cent of the share capital of Finnreit Fund Management Company Ltd and launched at the same time a non-UCITS fund called eQ Care. The fund that makes investments in care properties complements our fund selection well, and it has aroused a lot of interest among investors. Secondly, we consolidated the organisation of eQ Asset Management by employing Mikko Koskimies, who will be in charge of the Asset Management segment. Koskimies' long and solid experience in asset management business is well in line with our target of growing significantly during the next few years.

The operations of the Asset Management and Corporate Finance segments were profitable, like in previous quarters. During the period under review, the operating profit of the Asset Management segment was EUR 1.4 million and that of the Corporate Finance segment EUR 0.4 million. The Investments segment made an excellent result and generated a good cash flow in the third quarter. The operating profit of the Investments segment for the period under review was EUR 4.8 million. During the period, the capital distributions from investments totalled EUR 4.4 million and the distribution of profit was EUR 5.1 million. Capital calls totalled EUR 2.5 million.

The Group's balance sheet continues to be in excellent shape. At the end of September, there were no interest-bearing liabilities in the balance sheet, and liquid assets totalled EUR 12.5 million. The balance sheet value of the private equity investments was EUR 39.1 million.

Outlook

The debt crisis of the public economies in the eurozone and the bank crises prevail, which creates considerable uncertainty in the capital market. Spain, which has a key role in solving the crisis of the eurozone, has started to take measures that will balance the economy of the country. We believe that the market will continue to be volatile and that the capital market will develop unevenly. The changes in the assets under the Group's management and the development of the fee and commission income correlate with the development of the capital market.

***

eQ's interim report for the period 1 January to 30 September 2012 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 group of companies that specialises in asset management and corporate finance operations. The Group offers services related to mutual funds, private equity funds and hedge funds as well as traditional asset management for institutions and individuals. The assets managed by the Group total approximately EUR 3.4 billion. In addition, 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 INTERIM REPORT 1 JANUARY TO 30 SEPTEMBER 2012

Result of operations from 1 July to 30 September 2012

• The Group's fee and commission income totalled EUR 2.7 million (EUR 2.6 million).
• The Group's net investment income was EUR 4.1 million (EUR 3.1 million).
• The Group's operating profit was EUR 4.3 million (EUR 3.2 million).
• Consolidated earnings after taxes were EUR 3.2 million (EUR 2.3 million).
• Earnings per share were EUR 0.09 (EUR 0.07).

Result of operations from 1 January to 30 September 2012

• The Group's fee and commission income totalled EUR 7.6 million (EUR 6.8 million from 1 Jan. to 30 Sept. 2011).
• The Group's net investment income was EUR 5.1 million (EUR 6.8 million).
• The Group's operating profit was EUR 5.6 million (EUR 7.6 million).
• Consolidated earnings after taxes were EUR 4.2 million (EUR 5.2 million).
• Earnings per share were EUR 0.12 (EUR 0.16).
• Equity per share was EUR 2.05 (EUR 2.07).
• Equity to assets ratio was 95.5% (93.6%).
• The interim report 1 January to 30 September 2012 comprises eQ Asset Management Group and Advium Corporate Finance Ltd from 1 April 2011 as comparison information. The comparison figures of the interim report are, therefore, not comparable.

Financial environment

Capital market

The year 2012 started in a more positive tone than the previous year for the capital market. The European Central Bank allocated a considerable amount of new capital to European banks, which made it easier for at least the banks that suffer from solidity problems to manage their obligations. The financing package for Greece in the early spring of 2012 was also completed with help from international creditors. Uncertainty quickly returned to the market, however, as, based on the results of the parliamentary election in Greece, it was impossible to build a government that would bind itself to decisions on savings. A new election was held in Greece in June, and the country finally got a government, but both the political situation and the situation of the public economy have remained extremely unstable in early autumn. The trust of the market in the ability of Greece to manage its obligation with the present operating model is weak. Therefore, the capital market has turned its attention to arrangements aiming at preventing the crisis in Greece from spreading to the neighbouring countries.

The economic situation of Spain, both for the government and banks, has also worried the market in the summer and early autumn. The Spanish economy is burdened by high unemployment and the price bubble of real properties. In the autumn, the European Central Bank has lead preparations for a situation, where Spain or some other eurozone country wishes to obtain external financial aid, and more plausible support funds have been built for this purpose. The more determined measures by the ECB, IMF and the leading politicians of the euro states have calmed down the market somewhat during the autumn, and the trust in the survival of the euro system has increased. In early autumn, these strong political demonstrations of will and concrete decisions have been reflected on the international equity and bond markets, and the development has been clearly positive.

The national economies of the US and Asian countries have continued to grow during the entire year, and the results of companies remain good. As for the remaining part of the year, the development of the world economy will be influenced by the presidential election in the US and election of new representatives to the Senate and Congress, i.e. the emphasis in US politics is likely to change. The market is especially worried about the growing debt load of the US, and it seems that the US is reaching the debt ceiling set for it more rapidly than expected. In November, China will also have new political leadership, but despite this, the Chinese economy is expected to continue with a relatively strong growth.

Equity market

The equity market continued to rise in the third quarter. Macroeconomic indicators worldwide have lately been better that feared, and above all the announcement of the ECB that it will buy government bonds issued by the countries struck by the crisis and the new stimulation package in the US have increased the willingness of equity investors to take risks. The MSCI World Total Return Net Index, which describes equities globally, has risen by 13.1 per cent since the beginning of the year. In the third quarter, above all European equities gave a good return, as the risk of a breakdown of the eurozone started to decrease gradually. In Finland, the OMX Hex Cap Index has risen by 8.3 per cent and the Stoxx 600 TR Net Index by 13.1 per cent since the beginning of the year. The real economy has developed rather well in the US as well during the past few months. The trust of American consumers in the economy has gradually started to improve as unemployment figures and the housing market have recovered. Calculated in euros, the S&P 500 Total Return Net Index has risen by 16.0 per cent during the year.

Strong growth continued in emerging markets despite the somewhat weaker drive from the Chinese economy. The growth prognoses of China have been lowered during the year, but despite this, growth is expected to remain at, from the western perspective, a rather good level exceeding seven per cent even in 2012. Even on an average, the emerging markets are expected to grow clearly more rapidly that the western market. During the year, the MSCI EM Total Return Net Index describing the equity market of emerging markets has risen by 2.1 per cent.

Bond market

The euro crises, which had its source in the Spanish bank sector's need for additional capital in the first months of the year, has dominated the bond year. The market strongly doubted the refinancing ability of Spain, and at its highest, the interest rate of the 10-year government bond reached 7.5 per cent. At the same time, the German government bonds were regarded as a safe heaven, and their 10-year interest rate fell under 1.5 per cent. The measures taken by political decision-makers and central banks in order to solve the crisis calmed down the marker in early autumn, and the critical Spanish interest rate already fell to under 6 per cent. The price development of corporate loans has also varied during the year. In the pricing of credit risk, the prices were at their lowest at the beginning of June, but in early autumn, the increase of trust had a clearly positive impact on the prices of corporate loans.

For bond investors, the first three quarters of 2012 were especially good. Average euro-denominated bond investments gave a return of 8.2 per cent during the period. The clearly better return than the coupon rate can be explained by the fall in government interest rates and the narrower interest rate difference of corporate loans. High-yield corporate loans with a low credit rating gave the best return, about 15 per cent, but corporate loans with a good credit rating also gave a return exceeding 10 per cent in the first three quarters.

Finnish market for mutual funds

The assets managed by mutual funds operating in the Finnish market started to grow clearly in 2012, and the net subscriptions from January to September totalled EUR 3.1 billion. The total assets under management by mutual funds rose to about EUR 63 billion (EUR 55 billion on 31 December 2011), which is the second highest level since 2007. Net subscriptions were above all made in equity funds, asset allocation funds and bond funds. The emphasis of new investments in equity funds lay strongly on emerging markets.

On the other hand, assets were drawn from money market funds, which give a modest return in the present market situation.

Private equity and hedge market

In the European private equity market, the number of exits increased, but the value of new investments fell. In the first three quarters of 2012, 415 new investments were made in the amount of EUR 37 billion, which is 22 per cent less than during the corresponding period in 2011. Above all in the Mediterranean countries and France, the volumes fell considerably, the main reason being the economic problems in the eurozone and the difficulties in obtaining debt financing resulting from them. At the moment, the price expectations of buyers and sellers differ from each other considerably, and only companies that are not so dependent on the economic cycle and the result-yielding capacity of which is therefore easier to predict have a market. At the same time, buyers are interested in large companies with a leading market share. In the third quarter, four corporate acquisitions exceeding one billion euros were concluded. The largest of these was BSN Medical, acquired by the EQT fund, the value of which was EUR 1.8 billion. The most active sectors were health care, retail trade and technology, media and telecom (TMT). Exits picked up in the third quarter, and their number was 73 and value EUR 10.8 billion. About one half of the companies were sold to industrial buyers, which is normally regarded as a good indicator of the function of the private equity market. The largest transaction was the sale of the software company NDS Group, owned by Permira and News Corp, to Cisco Systems. With a value of EUR 4.0 billion, this is the largest exit in 2012 so far. Source: Centre for Management Buyout Research (CMBOR)

Based on information from September, the total assets in hedge funds were USD 1.76 trillion (source: Eurekahedge). The figure is somewhat higher than at the end of June. Capital flows were positive in August and September. In the third quarter, 200 new funds were established. Since the beginning of the year, US funds have obtained more capital and European funds have lost capital. New capital has flown to macro funds and equity funds, while other strategies have lost capital. According to estimates, there are 3 776 hedge funds in Europe, 44 per cent of which operate in the UK. The second most popular domiciles are Switzerland, Luxemburg, France and the US. In Europe, hedge funds under the UCITS III directive have increased their popularity. Since 2008, the cash flow to them has been EUR 90 billion, while non-UCITS funds have lost EUR 40 billion of capital in the same period. About one third of the capital was placed in UCITS III funds at the end of September.

Major events during the period under review

Group Legal Counsel Juha Surve was appointed member of the Management Team on 21 February 2012. As of 21 February 2012, the Group's Management Team consists of the following persons: Janne Larma (chairman), Staffan Jåfs, Lauri Lundström, Annamaija Peltonen and Juha Surve.

eQ Plc's Annual General Meeting was held on 13 March 2012. The decisions of AGM are presented below in a separate chapter.

The eQ Emerging Markets Local Currency Credit fund was launched on 21 March 2012. The non-UCITS fund makes investments in loans issued by solid companies operating in emerging markets in local currencies. The fund is the first Finnish fund that makes investments in emerging market corporate loans in local currencies.

The private equity fund Amanda V East, managed by eQ, held its second closing on 18 May 2012 in the size of EUR 40.3 million. The fund will continue to raise funds, and the final closing will take place by 31 December 2012.

The Board of Directors of eQ Asset Management Ltd, which a subsidiary of eQ Plc, appointed Mikko Koskimies, M.Sc. (Econ.), Managing Director of eQ Asset Management Ltd on 4 September 2012. Koskimies began his work on 1 October 2012. In addition, the Board of Directors of eQ Plc appointed Mikko Koskimies member of the eQ Group Management Team from the same date. As of 1 October 2012, eQ Asset Management Ltd's previous Managing Director Lauri Lundström began to work as eQ Plc's Administrative

Director and he will continue as member of eQ's Management Team. From 1 October 2012, the Group's Management Team has consisted of the following persons: Janne Larma (chairman), Staffan Jåfs, Mikko Koskimies, Lauri Lundström, Annamaija Peltonen and Juha Surve.

In connection with Mikko Koskimies appointment, eQ's Board decided on a new shareholding scheme for the eQ Group. The purpose of this scheme is to incentivise Mikko Koskimies by encouraging him to buy and hold shares in eQ Plc, and thus seek to increase the shareholder value of eQ in the long term. For this purpose, a share issue was directed to a company wholly owned by Mikko Koskimies on 4 September 2012. Through the issue, a total of 1 200 000 shares were offered for subscription in deviation from the shareholders' pre-emptive subscription right. As a result of the share subscriptions, Mikko Koskimies owns approximately 3.48% of the shares of eQ through his company. The subscription of shares was financed with capital from Koskimies' company and through an interest-bearing loan in the amount of EUR 1 336 000 issued by eQ to the company. The loan will be repaid in full after five years at the latest, but the company has the right to repay the loan prematurely at any time. The transfer of the shares owned by the company wholly owned by Mikko Koskimies is restricted for three years during the duration of the scheme.

eQ Asset Management Ltd, which is part of eQ Group, and Finnreit Fund Management Company Ltd agreed on 12 September 2012 that eQ Asset Management Ltd would subscribe for 50 per cent of Finnreit Fund Management Company Ltd's shares in a directed share issue. eQ Asset Management Ltd also has an option to buy the entire share capital. As a result of this agreement, a completely new type of property fund was launched. The name of the Finnreit Care fund was changed, and the name of the fund has been eQ Care since 26 October 2012. The fund is a non-UCITS fund, which is supervised by the Finnish Financial Supervisory Authority and acts according to the Act on Common Funds. eQ Care invests directly in care properties, which form a diversified portfolio for the fund. A share of the result of Finnreit Fund Management Company Ltd that corresponds to eQ Group's holding will be consolidated with eQ Group's income statement from 1 October 2012.

Group net sales and result development

The comparison information presented in the interim report is not comparable, as Advium Corporate Finance Ltd and eQ Asset Management Group Ltd, acquired on 16 March 2011, have been consolidated with the result of eQ Plc Group from 1 April 2011.

The consolidated net sales totalled EUR 12.7 million (EUR 13.6 million from 1 Jan. to 30 Sept. 2011). Fee and commission income increased from the comparison period due to the acquisition of Advium Corporate Finance Ltd and eQ Asset Management Group Ltd. The Group's fee and commission income rose to EUR 7.6 million (EUR 6.8 million). On the other hand, the net investment income fell from the comparison period to EUR 5.1 million (EUR 6.8 million). The Group's expenses and depreciation totalled EUR 7.1 million (EUR 6.1 million). Personnel expenses totalled EUR 3.8 million (EUR 3.3 million) and depreciation was EUR 0.9 million (EUR 0.6 million). Other operating expenses were EUR 2.3 million (EUR 2.2 million). The Group's operating profit was EUR 5.6 million (EUR 7.6 million). The fall from the comparison period is above all due to the decreasing income from investment operations. The profit for the period under review was EUR 4.2 million (EUR 5.2 million).

Business Areas

Asset Management

The operating environment of the Asset Management segment has fluctuated during the first nine months of 2012. The debt crisis of the eurozone has clearly hampered the outlook of investors during the entire year. At the beginning of the year, attention momentarily shifted to the macro-economic outlook and the fundamentals of the investment objects, but mainly due to the financial crises in Greece and Spain, considerable nervousness returned to both the equity and bond market in late spring. In early autumn, above all the more convincing measures and promises on the sufficiency of the support packages by the ECB and the leading politicians of the eurozone shifted the attention of the market from the problems of the Mediterranean countries. As a result of these measures, a positive change in valuation levels was seen in

both the equity and bond markets, and the first nine months have, as a rule, been a good time in most markets.

It became momentarily easier to sell the asset management services of eQ Asset Management at the beginning of 2012, which could also be seen in the general increase of the risk willingness of investors. The culmination of the crisis in Greece once more later in spring, and above all the exceptionally strong plummet of the Finnish equity market in April and May, together with Nokia's profitability problems, wiped out the willingness of domestic investors to make new investments by the beginning of the holiday period. In the autumn, the trust of investors in the market has partly recovered, which has increased eQ Asset Management's new sales somewhat. The assets under the segment's management totalled EUR 3 394 million at the end of September (EUR 3 680 million on 30 Sept. 2011). On 30 September 2012, the assets managed under equity and bond investments totalled EUR 767 million (EUR 869 million) and within private equity investments, the assets under management were EUR 2 627 million (EUR 2 811 million). Of these assets, EUR 1 230 million (EUR 1 190 million) was covered by the reporting service.

Net subscriptions in eQ Funds totalled EUR 5 million during the period, and the assets managed by the funds rose to EUR 489 million by the end of September as a result of increasing asset values (EUR 424 million on 30 Sept. 2011). The fund that clearly gathered the most net subscriptions was eQ Emerging Markets Dividend, which makes investments in dividend stock in emerging markets. At the end of the quarter, the fund's assets totalled about EUR 53 million after just a little more than 18 months of operation.

A new fixed-income fund called eQ Emerging Market Local Currency Credit was launched in March. It follows an entirely new investment strategy in Finland. The fund makes investments in emerging market corporate loans in local currencies. This means that the fund has a higher yield expectation than, e.g. the eQ Emerging Markets Corporate Bond fund, which makes investments in euro-denominated equities.

In September, eQ Asset Management Ltd acquired 50 per cent of the share capital of Finnreit Fund Management Company Ltd, and as a result of this, the non-UCITS fund eQ Care was launched. This is the first opportunity in Finland to make investments in domestic care properties and, consequently, obtain annual income from rents through the fund's profit distribution. The fund has been received well in the market.

In the past few months, the portfolio management organisation of eQ Asset Management has managed to assess changes in the market relatively well and weigh the right asset classes and sectors. The pace of allocation work has been speeded up, and we have made changes in allocations more easily than before, but with smaller shares. The aim of this has been to better adjust operations to the exceptionally strong external challenges that the market is faced with at the moment. We have also informed our clients of the changes in our views and the reasons for them more efficiently than before.

During the period under review, eQ Private Equity continued active fundraising to the Amanda V Fund. The final closing will take place by 31 December 2012.

The number of personnel in the Asset Management segment was 43 at the end of September.

Asset Management	7-9/2012	7-9/2011	1-9/2012	1-9/2011	1-12/2011
Net sales, EUR million	2.2	2.1	6.4	5.4	7.6
Operating profit, EUR million 0.5		0.6	1.4	1.6	2.2
Personnel	43	46	43	46	44

The income statement of eQ Asset Management Group has been consolidated with the income statement of eQ Group and the Asset Management segment from 1 April 2011.

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 turbulence and uncertainty that prevail in the financial market have continued to keep M&A and real estate transaction processes long.

In the third quarter of the year, Advium acted as advisor in two transactions. Advium acted as advisor for the sellers, as the advertising agency chain JWT, which is part of the world leader in marketing communication WPP, bought the majority share in the digital marketing agency Activeark Oy. Towards the end of the quarter, Advium also acted as advisor for the sellers, as a fund managed by the private equity investor Midinvest Management Oy and the minority owners sold Produal, the Finish market leader in measuring equipment for building automation, to a fund managed by Vaaka Partners Oy.

The number of personnel at Advium was 13 at the end of September.

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	7-9/2012	7-9/2011	1-9/2012	1-9/2011	1-12/2011
Net sales, EUR million	0.6	0.6	1.5	1.7	2.1
Operating profit, EUR million 0.1		0.1	0.4	0.6	0.7
Personnel	13	10	13	10	11

The income statement Advium Corporate Finance Ltd has been consolidated with the income statement of eQ Group and Corporate Finance segment from 1 April 2011.

Investments

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

During the period under review, the net income of eQ Plc's Investments segment totalled EUR 5.1 million (EUR 6.8 million from 1 Jan. to 30 Sept. 2011). At the end of the period, the fair value of the private equity funds was EUR 39.1 million (EUR 41.2 million on 30 Sept. 2011). As for private equity investments, the amount of the remaining investment commitments was EUR 12.5 million (EUR 16.3 million). The investment objects returned capital in the amount of EUR 4.4 million (EUR 7.2 million) and distributed profit EUR 5.1 million (EUR 6.8 million) during the period under review.

The largest exits in the third quarter of 2012 were the exit of the EQT V Fund from the Danish cancer diagnostics company Dako. The company was sold to the American company Agilent Diagnostics and the exit generated a cash flow of EUR 1.0 million for eQ. The Gresham III Fund made an exit from Olaer, a company offering fluid management solutions. The company was sold to an industrial buyer Parker Hannifin. The exit generated a cash flow of about EUR 0.8 million for eQ. Montagu III made an exit from the European company BSN Medical, which manufactures medical and heath care products. The company was sold to another private equity investor EQT Partners. The cash flow generated for eQ from this exit was EUR 1.4 million. The Permira IV Fund made an exit from a company called NDS, which provides software to pay-TV operators. The company was sold to Cisco Systems, and the cash flow generated for eQ was EUR 0.5 million. The Triton II Fund made an exit from the German Bravida, which offers technical installation and service for real properties. The company was sold to another private equity investor Bain Capital and the cash flow generated for eQ was EUR 1.9 million.

The capital calls of the funds totalled EUR 2.5 million (EUR 4.3 million) during the period under review.

Investments	7-9/2012	7-9/2011	1-9/2012	1-9/2011	1-12/2011
Net sales, EUR million	4.1	3.1	5.1	6.8	6.5
Operating profit, EUR million 4.0		3.0	4.8	6.5	6.1
Personnel	1	1	1	1	1

eQ has made a decision that it will only make new investments in funds managed by eQ in future.

Balance sheet

The consolidated balance sheet total was EUR 74.1 million (EUR 73.9 million on 30 Sept. 2011). At the end of the period, eQ Plc's shareholders' equity was EUR 70.8 million (EUR 69.2 million). During the period, the shareholders' equity was influenced by the profit for the period of EUR 4.2 million, the change in the fair value reserve of EUR -1.2 million, the dividend payout of EUR -4.0 million, and the share issue of EUR 2.0 million directed to Mikko Koskimies. The changes are specified in detail in the tables attached to this release.

The subscription of the shares directed to Mikko Koskimies was financed with capital from Koskimies' company and through a loan that eQ Plc issued to Koskimies' company. As part of the arrangement, eQ Plc's Board decided to grant an interest-bearing loan in the amount of EUR 1.3 million at the most to the company wholly owned by Koskimies for financing the subscription of eQ Plc's shares.

The financial situation of the Group remained strong during the period under review. At the end of the period, the cash in hand totalled EUR 12.5 million (EUR 11.0 million). In order to safeguard the availability of financing, the Group has access to a credit limit of EUR 10.0 million. At the end of the period, the Group had no interest-bearing liabilities. At the end of the period, interest-free long-term debt was EUR 0.9 million (EUR 1.2 million) and interest-free short-term debt was EUR 2.4 million (EUR 3.5 million). eQ's equity to assets ratio was 95.5% (93.6%).

Shares and share capital

On 9 May 2012, eQ Plc's Board of Directors decided to cancel 163 153 own shares held by the company. The number of shares in eQ Plc was altered on 7 June 2012, as the cancellation of the shares that the company had held was entered in the Trade Register. After the cancellation, the number of shares was 33 297 198. The cancellation did not have any impact on the company's share capital.

Based on an authorisation by the Annual General Meeting held on 13 March 2012, eQ Plc's Board of Directors decided on 4 September 2012 to carry out a share issue against payment directed to a company wholly owned by Mikko Koskimies, new Managing Director of eQ Asset Management Ltd. Through the share issue, a total of 1 200 000 shares were offered for subscription in deviation from the shareholders' preemptive subscription right. eQ has a weighty financial reason to deviate from the shareholders' pre-emptive right, as the shares were issued to a company wholly owned by Koskimies in order to incentivise Koskimies and enhance his commitment as one of the Group's key persons.

The subscription price per share of the new shares was the volume-weighted average price of the company's share on NASDAQ OMX Helsinki Ltd for 20 consecutive trading days immediately preceding the meeting of the Board that decided on the issuance of the shares, i.e. EUR 1.67 per share. The company wholly owned by Mikko Koskimies has on 4 September 2012 subscribed for all the offered shares and paid the subscription price on 14 September 2012. An amount corresponding to the subscription price of the new shares, EUR 2.0 million, has been entered into eQ's invested unrestricted equity reserve. Rights to dividends and other shareholder rights commenced on the day when the new shares were entered in the Trade Register and the shareholders' register of the company. The new shares were entered in the Trade Register on 24 September 2012, and they became subject to public trading on NASDAQ OMX Helsinki Ltd on 27 September 2012.

Due to the share issue, the number of eQ shares grew from 33 297 198 to 34 497 198. Each share holds one vote. The share capital did not change as a result of the share issue. On 30 September 2012, the share capital was EUR 11 383 873.

Own shares

eQ Plc held no own shares at the end of the period under review on 30 September 2012. eQ Plc's Board of Directors decided on 9 May 2012 to cancel altogether 163 153 own shares held by the company, which corresponded to about 0.5% of the registered number of shares. The cancellation became effective on 7 June 2012 as it was entered in the Trade Register.

Shareholders

On 6 March 2012, eQ Plc issued a flagging notification, according to which Janne Olavi Larma and Chilla Capital SA announced that they had acquired shares in an amount that exceeded the flagging threshold of 10%. In the second quarter of the year on 16 May 2012, eQ Plc issued a flagging notification according to which Berling Capital Oy announced that it had transferred shares to such an amount that it had fallen below the flagging thresholds of 10% and 5%. In addition, eQ Plc issued a flagging notification on 16 May 2012 stating that Fennogens Investments S.A. announced that it had acquired shares in such an amount that the flagging threshold of 15% had been exceeded. On 16 October 2012, eQ Plc issued a flagging notification stating that Ulkomarkkinat Oy had announced that its holding had fallen under the flagging threshold of 10% as a result of the change in eQ Plc's number of shares that took place on 24 September 2012.

Shares in eQ Plc, which were deposited on the joint account set up by the company, in total of 6 709 shares representing approximately 0.02 per cent of all shares in the company, have been sold between 1 June and 29 June 2012 on behalf and for the benefit of their owners and the proceeds of the sale, after deducting costs incurred in connection with the sale and notification thereof, have been deposited on 5 July 2012 for the benefit of the owners with the Southern Finland's Regional State Administrative Agency (in Finnish: Etelä-Suomen aluehallintovirasto). The shareholders have the right to receive an amount from the deposited funds equalling their proportion of the shares against the delivery of relevant share certificates and other possible documents of title from the Southern Finland's Regional State Administrative Agency. A stock exchange release regarding the arrangement was published on 5 July 2012.

Ten major shareholders on 30 September 2012

Share of shares and votes, %

Fennogens Investments S.A. Chilla Capital S.A. Veikko Laine Oy Ulkomarkkinat Oy Oy Hermitage Ab Mandatum Life Insurance Company Oy Cevante Ab Teamet Oy Fazer Jan Peter	15.93 12.10 10.60 9.89 6.86 5.95 4.11 3.48 3.09
Linnalex Ab	2.56

On 30 September 2012, eQ Plc had 3 212 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 4 September 2012, eQ Plc's Board of Directors decided to issue to Mikko Koskimies, who had been appointed Managing Director of eQ Asset Management Ltd and member of eQ Group's Management Team, 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).

At the end of the period, altogether 900 000 options has been allocated. Based on the authorisation given to the Board on 14 April 2010 by the Annual General Meeting, there were 1 100 000 unallocated options 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

The Annual General Meeting (AGM) of eQ Plc held on 13 March 2012 in Helsinki made the following decisions.

Confirmation of the financial statements

eQ Plc's AGM confirmed the financial statement of the company, which included the consolidated financial statements, report by the Board of Directors and the auditor's report for the financial year 2011.

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 dividend payment, 16 March 2012, were recorded in the shareholder register held by Euroclear Finland Ltd. The dividend payment date was 26 March 2012.

Discharge from liability to the Board of Directors, CEOs and substitutes for the CEO

The AGM decided to grant discharge from liability to the Board of Directors, CEOs and substitutes for the CEO.

Number of Board members, election of Board members and remuneration of Board members

According to the decision of the AGM, five members were elected to the Board. The following members were re-elected: Ole Johansson, Georg Ehrnrooth, Eero Heliövaara and Jussi Seppälä. Christina Dahlblom was elected as new member. The term of the Board members will end at the close of the following AGM. The AGM decided that the members of the Board would receive remuneration as follows: the Chairman of the Board will receive EUR 3 300 and the Board members EUR 1 800 per month. Travel and lodging costs will be compensated in accordance with the company's expense policy. The Board appointed Ole Johansson Chairman of the Board at its constituting meeting held immediately after the AGM.

Auditors and auditors' fees

Ernst & Young Oy, a firm of authorized public accountants, will continue as auditor of the company, and Ulla Nykky, APA, will act as auditor with main responsibility. The meeting decided to compensate the auditors based on invoice.

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 500 000 company shares, which can be repurchased otherwise than in proportion to the shareholdings of the shareholders with assets from the company's unrestricted equity. Shares will be purchased at the market price in public trading on the NASDAQ OMX Helsinki at the time of purchase. The number of shares corresponds to approximately 1.49 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 corporate acquisitions or other business transactions, or as part of the company's incentive scheme. The repurchased shares may be held by the company, annulled or transferred further. The Board of Directors shall decide on all 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 following Annual General Meeting.

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 of 5 000 000 shares. The amount of the authorisation corresponds to approximately 14.94 per cent of all company shares. The authorisation is to be used in order to finance or carry out potential corporate acquisitions or other business transactions, to consolidate the balance sheet and financial position of the company, to carry out the company's incentive schemes or for any other purposes decided by the Board. Based on the authorisation, the Board shall decide on the terms of 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 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 in a manner that deviates from the shareholders' pre-emptive rights, as described in the Limited Liability Companies' Act. A share issue may also be executed without consideration, in accordance with the preconditions set out in the Limited Liability Companies' Act. The authorisation cancels all previous authorisations to decide on share issues, and it will be effective until the following AGM.

Personnel and organisation

At the end of the period, the number of personnel was 64 (63 on 30 Sept. 2011). The Asset Management segment had 43 (46) employees, the Corporate Finance segment 13 (10) employees and the Investments segment 1 (1) employee. Group administration had 7 (6) employees. The personnel of the Asset Management segment comprises eight persons with fixed-term employment.

The overall salaries paid to the employees of eQ Group during the period under review totalled EUR 3.8 million (EUR 3.3 million from 1 Jan. to 30 Sept. 2011). The comparison figure comprises the salaries of Advium Corporate Finance Ltd and the eQ Asset Management Group from 1 April 2011 and the salaries of eQ Plc and Amanda Advisors Ltd from 1 January 2011. The figures are, therefore, 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 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.

Events after the period under review

In the Investments segment, private equity funds in which eQ has made investments have announced exits that have not been realised during the period under review. If the announced exits will be carried out according to plan, the cash flow from the exits that eQ will receive after the period under review, in the fourth quarter, will be about EUR 1.2 million, of which the estimated distribution of profits accounts for about EUR 1.1 million.

After the period under review, on 6 November 2012, eQ Plc issued a flagging notification, according to which Ulkomarkkinat Oy announced that it had acquired shares in an amount that exceeded the flagging threshold of 10%.

Outlook

The debt crisis of the public economies in the eurozone and the bank crises prevail, which creates considerable uncertainty in the capital market. Spain, which has a key role in solving the crisis of the eurozone, has started to take measures that will balance the economy of the country. We believe that the market will continue to be volatile and that the capital market will develop unevenly. The changes in the assets under the Group's management and the development of the fee and commission income correlate with the development of the capital market.

eQ Plc Board of Directors

TABLES

Principles for drawing up the report

The interim report has been prepared in accordance with the International Financial Reporting Standards (IFRS) and the IAS 34 Interim Financial Reporting standard approved by the EU. When preparing the interim report, eQ has applied the same principles as in the financial statements for the year 2011, and the calculation formulas of the key ratios have been presented in the financial statements. As for the net investment income, eQ Group's net sales are recognised for eQ in different quarters due to factors independent of the company.

The interim report has not been audited.

CONSOLIDATED INCOME STATEMENT, EUR 1 000

	7–9/12	7–9/11	1–9/12	1–9/11	1–12/11
NET SALES
Net investment income	4 090	3 059	5 059	6 818	6 482
Fee and commission income	2 650	2 584	7 647	6 816	9 327
Total	6 740	5 643	12 706	13 634	15 808
Operating expenses	-2 086	-2 156	-6 173	-5 451	-7 709
Depreciation	-305	-239	-910	-628	-865
Operating profit	4 349	3 247	5 623	7 555	7 234
Financial income and expenses	-7	-17	-9	-363	-302
Profit before taxes	4 342	3 230	5 614	7 192	6 932
Income taxes	-1 113	-918	-1 404	-1 968	-1 988
Minority interests	-	-	-	-3	-3
PROFIT (LOSS) FOR THE PERIOD	3 229	2 312	4 210	5 222	4 942
Other comprehensive income:
Available-for-sale financial assets, net	-3 063	-1 627	-1 153	2 673	3 432
TOTAL COMPREHENSIVE INCOME FOR THE
PERIOD	166	685	3 057	7 895	8 374
Earnings per share, EUR	0.09	0.07	0.12	0.16	0.15
Earnings per average share, EUR Diluted earnings per average share,	0.10	0.07	0.13	0.16	0.16
EUR	0.10	0.08	0.13	0.17	0.16

When calculating the ratio, the weighted average number of shares outstanding has been used.

CONSOLIDATED BALANCE SHEET, EUR 1 000

	30 Sept. 2012	30 Sept. 2011	31 Dec. 2011
ASSETS
LONG-TERM ASSETS Tangible fixed assets Intangible assets	127 18 472	163 19 510	151 19 318
Shares in associated companies	400	-	-
Investments available for sale Financial securities Private equity investments	5 39 149	49 41 242	49 42 539
Loans and receivables	1 336	-	-
Deferred tax assets	70	81	79
CURRENT ASSETS Other assets Accrued income and advance payments	1 620 368	1 236 626	1 056 242
Investments available for sale Financial securities	45	45	45
Cash	12 521	10 963	10 540
TOTAL ASSETS	74 113	73 915	74 020
SHAREHOLDERS' EQUITY AND LIABILITIES
SHAREHOLDERS' EQUITY	70 814	69 159	69 684
LIABILITIES
NON-CURRENT LIABILITIES Deferred tax liability	866	1 248	1 230
CURRENT LIABILITIES Accounts payable and other liabilities	2 433	3 508	3 106
TOTAL LIABILITIES	3 299	4 756	4 336
TOTAL SHAREHOLDERS' EQUITY AND LIABILITIES	74 113	73 915	74 020

CONSOLIDATED CASH FLOW STATEMENT, EUR 1 000

	1–9/12	1–9/11	1-12/11
CASH FLOW FROM OPERATIONS
Operating profit	5 623	7 555	7 234
Depreciation and write-downs	910	628	865
Transactions with no related payment transaction	65	15	102
Investments available for sale, change	1 507	3 867	2 643
Change in working capital
Business receivables, increase (-) / decrease (+)	-1 937	-1 176	-809
Interest-free debt, increase (+) / decrease (-)	-961	2 998	1 525
Interest-bearing debt, increase (+) / decrease (-)	-	-5 800	-5 800
Total change in working capital	-2 898	-3 978	-5 083
Cash flow from operations before financial items and
taxes	5 206	8 086	5 761
Interests received	14	21	52
Interests paid	-23	-384	-354
Taxes	-1 185	-1 968	-336
CASH FLOW FROM OPERATIONS	4 012	5 756	5 122
CASH FLOW FROM INVESTMENTS
Investing activities in investments	-40	703	669
CASH FLOW FROM FINANCING
Dividends paid	-3 996	-	-
Income from share issue	2 004	391	636
Purchase of own shares	-	0	0
CASH FLOW FROM FINANCING	-1 992	391	636
INCREASE/DECREASE IN LIQUID ASSETS	1 981	6 851	6 428
Liquid assets on 1 Jan.	10 540	4 112	4 112
Liquid assets on 30 Sept.	12 521	10 963	10 540

Liquid assets contain cash and bank deposits.

CHANGE IN CONSOLIDATED SHAREHOLDERS' EQUITY, EUR 1 000

		Reserve for
	Share	invested unrestricted	Fair value	Retained
	capital	equity	reserve	earnings	Total
Shareholders equity on 1 Jan
2011	11 384	29 614	-6 819	10 051	44 229
Comprehensive income			2 673		2 673
Profit (loss) for the period				5 222	5 222
Total comprehensive income			2 673	5 222	7 895
Share issue		17 017			17 017
Other changes				18	18
Shareholders' equity on 30 Sept. 2011	11 384	46 631	-4 147	15 291	69 159
Shareholders' equity on 1 Jan. 2012	11 384	46 631	-546	12 215	69 684
Comprehensive income			-1 153		-1 153
Profit (loss) for the period				4 210	4 210
Total comprehensive income			-1 153	4 210	3 057
Share issue		2 004			2 004
Dividend distribution				-3 996	-3 996
Other changes				65	65
Shareholders' equity on 30 Sept. 2012	11 384	48 635	-1 699	12 494	70 814

SEGMENT INFORMATION, EUR 1 000

7-9/12		Corporate				Group
	Asset Management	Finance	Investments	Other	Eliminations	total
External income	2 076	575	4 090	-		6 740
Income from
other segments	100	-	-	18	-118	-
Net sales	2 176	575	4 090	18	-118	6 740
Operating profit	542	134	3 990	-317		4 349
Profit for the period	542	134	3 990	-1 437		3 229

7-9/11		Corporate				Group
	Asset Management	Finance	Investments		Other Eliminations	total
External income Income from	2 025	558	3 059	-		5 643
other segments	100	-	-	-	-100	-
Net sales	2 125	558	3 059	-	-100	5 643
Operating profit	637	74	2 959	-421		3 247
Profit for the period	637	74	2 959	-1 356		2 312

1-9/12		Corporate				Group
External income	Asset Management 6 100	Finance 1 547	Investments 5 059	-	Other Eliminations	total 12 706
Income from
other segment	300	-	-	55	-355	-
Net sales	6 400	1 547	5 059	55	-355	12 706
Operating profit	1 447	359	4 759	-942		5 623
Profit for the period	1 447	359	4 759	-2 355		4 210
Long-term assets	9 542	9 373	39 219	1 425		59 559

1-9/11		Corporate				Group
	Asset Management	Finance	Investments	Other	Eliminations	total
External income Income from	5 120	1 696	6 818	-		13 634
Other segments	300	-	-	-	-300	-
Net sales	5 420	1 696	6 818	-	-300	13 634
Operating profit	1 631	628	6 518	-1 222		7 555
Profit for the period	1 631	628	6 518	-3 555		5 222
Long-term assets	10 073	9 599	41 323	50		61 046

1-12/11		Corporate				Group
	Asset Management	Finance	Investments	Other	Eliminations	total
External income	7 226	2 101	6 482	-		15 808
Income from
other segment	400	-	-	-	-400	-
Net sales	7 626	2 101	6 482		-400	15 808
Operating profit	2 179	707	6 082	-1 734		7 234
Profit for the period	2 179	707	6 082	-4 026		4 942

Long-term assets	10 063	9 384	42 618	71	62 137

The income of the Asset Management segment from other segments

comprise 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 produced by Group administration to other segments.

The line operating profit under the item Other presents the undivided personnel, administration and other expenses allocated to Group administration. In addition to the above, undivided financial income and expenses as well as taxes have been presented on line profit for the period, under the item Other.

CONSOLIDATED KAY RATIOS
	30 Sept.	30 Sept.
	2012	2011
Profit (loss) for the period (EUR 1 000)	4 210	5 222
Earnings per share, EUR	0.12	0.16
Earnings per average share, EUR	0.13	0.16
Diluted earnings per average share, EUR	0.13	0.17
Equity per share, EUR	2.05	2.07
Equity per average share, EUR *)	2.12	2.29
Return on investment, ROI % p.a.	8.0	12.5
Return on equity, ROE % p.a.	8.0	12.3
Equity to assets ratio, %	95.5	93.6
Share price at the end of the period, EUR	1.85	1.63
Number of personnel at the end of the period	64	63
Private equity investments
to equity ratio, %	55.3	59.6
Private equity investments and remaining
commitments to equity ratio, %	72.9	83.2

*) Weighted average number of shares outstanding during the period,

CHANGE IN BOOK VALUE OF PRIVATE EQUITY FUNDS, EUR 1 000

Book value of private equity funds on 1 Jan. 2012	42 539
Capital calls to private equity funds	2 516
Return of capital from private equity funds	-4 379
Changes in the value of private equity funds in fair value reserve	-1 527
Book value of private equity funds on 30 Sept. 2012	39 149

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 30 September 2012, 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.

REMAINING COMMITMENTS

On 30 September 2012, eQ Plc's remaining commitments in private equity funds totalled EUR 12.5 million (EUR 16.3 million on 30 Sept. 2011). Other liabilities at the end of the period under review totalled EUR 1.2 million (EUR 1.9 million on 30 Sept. 2011).