eQ PLC’S INTERIM REPORT 1 JANUARY TO 30 JUNE 2012

eQ PLC STOCK EXCHANGE RELEASE

16 August 2012 at 8:15 a.m.

April to June 2012 in brief

In the second quarter, the fee and commission income totalled EUR 2.5 million (EUR 3.3 million from 1 April to 30 June 2011).
The Group’s net investment income was EUR 0.0 million (EUR 3.3 million).
The Group’s operating profit was EUR 0.4 million (EUR 3.9 million).
Earnings per share were EUR 0.01 (EUR 0.08).

January to June 2012 in brief

During the period under review, the fee and commission income totalled EUR 5.0 million (EUR 4.2 million from 1 Jan. to 30 June 2011).
The Group’s net investment income was EUR 1.0 million (EUR 3.8 million).
Operating profit was EUR 1.3 million (EUR 4.3 million).
Earnings per share were EUR 0.03 (EUR 0.09).
The interim report 1 January to 30 June 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.

Key ratios	4-6/2012	4-6/2011	1-6/2012	1-6/2011	1-12/2011
Net sales, EUR million	2,5	6,6	6,0	8,0	15,8
Operating profit,
EUR million	0,4	3,9	1,3	4,3	7,2
Profit before taxes,
EUR million	0,4	3,7	1,3	4,0	6,9
Profit for the period,
EUR million	0,2	2,8	1,0	2,9	4,9

Earnings per share, EUR	0,01	0,08	0,03	0,09	0,15
Equity per share, EUR	2,05	2,05	2,05	2,05	2,08
Equity to assets ratio,%	95.1%	90.3%	95.1%	90.3%	94.1%
Interest-bearing
liabilities, EUR million	0,0	3,2	0,0	3,2	0,0

Janne Larma, CEO

The second quarter of the year was once more a very turbulent period. The prolonged and at times markedly intensified crisis in the eurozone contributed to a fall in share prices. At the same time, investors were again trying to find safe havens, and the interest rates of bonds issued by solid states continued to fall. The 12-month Euribor rate also fell to a record-low level. In this operating environment, the business operations of both the Asset Management and Corporate Finance segments were challenging. Both segments remained profitable, however. The operating profit of the Asset Management segment was EUR 0.9 million and that of the Corporate Finance segment EUR 0.2 million during the period under review, while the operating profit of the Investments segment was EUR 0.8 million. The capital distributions from investments totalled EUR 1.9 million and the distribution of profit was EUR 1.0 million. Capital calls totalled EUR 2.0 million. In addition, private equity funds have announced several exits that are estimated to generate cash flow of 6.1 million during rest of the year.

The Group’s balance sheet continues to be in excellent shape. At the end of June, there were no interest-bearing liabilities in the balance sheet, and liquid assets totalled EUR 6.0 million. The balance sheet value of private equity investments was EUR 45.1 million.

The growth of the equity and fixed-income funds managed by eQ has been slower than expected during the past few years. The main reasons for this have been the high volatility of the equity market and the uncertain economic situation. Our funds market share has remained approximately at the same level, however. In order to be able to grow faster, we are planning the launch of new products and inorganic growth. Our strong balance sheet gives us good opportunities for this. I believe that by growing we will be a better partner for our clients and a more interesting employer for our personnel.

Outlook

The debt crisis in Europe continues and creates considerable uncertainty in the capital market. On the other hand, many of the Q2 reports of companies have provided a positive surprise, which increases the trust in the market. 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 June 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 3.6 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 JUNE 2012

Result of operations from 1 April to 30 June 2012

The Group’s fee and commission income totalled EUR 2.5 million (EUR 3.3 million).
The Group’s net investment income was EUR 0.0 million (EUR 3.3 million).
The Group’s operating profit was EUR 0.4 million (EUR 3.9 million).
Consolidated earnings after taxes were EUR 0.2 million (EUR 2.8 million).
Earnings per share were EUR 0.01 (EUR 0.08).

Result of operations and financial position from 1 January to 30 June 2012

The Group’s fee and commission income totalled EUR 5.0 million (EUR 4.2 million from 1 Jan. to 30 June 2011).
The Group’s net investment income fell to EUR 1.0 million (EUR 3.8 million).
The Group’s operating profit was EUR 1.3 million (EUR 4.3 million).
Consolidated earnings after taxes were EUR 1.0 million (EUR 2.9 million).
Earnings per share were EUR 0.03 (EUR 0.09).
Equity per share was EUR 2.05 (EUR 2.05).
Equity to assets ratio was 95.1% (90.3%).
The interim report 1 January to 30 June 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

Equity market

The first months of 2012 were rather positive for the capital market. The European Central Bank allocated a considerable amount of new capital to European banks round the turn of the year, 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, but based on the results of the first parliamentary election in Greece in the spring, it was impossible to build a government that would bind itself to decisions on savings. In late spring, the capital market was also worried about the economic situation of Spain, and the situation of above all Spanish banks has been alarming. These factors were reflected on international equity and bond markets, which showed a strongly negative development in April and May, compared with the good beginning of the year. Above all fringe areas like the Finnish equity market plummeted.

A new election was held in Greece in June, and the country finally managed to build a functioning government, which somewhat calmed down the market and creditors. The ECB and euro states worked intensively in July in order to stabilise the situation in Spain as well. The national economies of the US and Asian countries have, however, grown during the first half of the year, and company results have remained relatively good. The results of European companies have also been reasonably good compared with expectations, and the number of result warnings has not exceeded expectations. Nokia’s situation continues to be challenging, and the company has issued two result warnings in 2012 and told about extensive plans of cutting down the number of personnel and expenses.

After January and February, the Finnish equity market started to fall rapidly. At the end of June, the HEX Cap Index was in practice at the same level (+ 0.2%) as at the beginning of the year, which means that the rapid increase in valuations that took place in the first months of the year had melted away. The positive trend in other stock exchanges in Western Europe also turned to a fall, and the Stoxx 600 Index only rose by 5.2 per cent in the first half of the year. The change in the MSCI World (EUR) Index, which describes equities globally, was slightly positive (5.2%), and above all the US equities market rose briskly (S&P 500 (EUR) 12.2%). The movements in emerging markets were once again more rapid than in other markets, and after the fall experienced in late spring, the change in the MSCI EM Total Return Net (EUR) Index remained at 6.8%. At the end of June and beginning of July, the trust of investors in the ability of the euro countries and other actors to find concrete ways of controlling the debt crisis increased.

Bond market

The bond market developed strongly in the first quarter of 2012. The three-year financing that the European Central Bank offered to banks in the eurozone in December and at the end of February cut down the risk premiums of the European problem states. The impact died away gradually, however, and the returns in the second quarter were much poorer than in the first quarter. Concerns for above all Spain rose once more to the surface, and not even the successful debt arrangement for Greece could turn the market sentiment for the better. In June, the 10-year Spanish government bond rate rose above 7 per cent, which has been regarded as the critical level, as the market feared that Spanish banks would need additional capital. The EU summit held at the end of June managed, however, to once more momentarily turn down interest rates in the problem countries.

The average return of bond investments in Europe was 4.3% during the first half of the year. The returns of corporate loans were especially good. The best returns came from high yield corporate loans with a low credit rating, about 12%. Even corporate loans with a high credit rating gave a good return of approximately 5.5%.

Finnish market for mutual funds

The assets managed by mutual funds operating in the Finnish market started to rise in the first months of the year, and the net subscriptions during the first half of the year totalled EUR 1.7 billion. The total assets under management by mutual funds rose to about EUR 59 billion, even though the corresponding figure at the end of March had already been EUR 60 billion (EUR 55 billion on 31 December 2011). The increase was due to above all the positive development of the equity market in the first months of the year. A lot of assets were transferred from money market funds to the equity market in the first quarter. In the second quarter the movement was opposite when investors decreased their risks and funds transferred from equity funds to fixed income funds.

Private equity and hedge market

The fall in the European private equity market, which began in March, continued in the second quarter. The number of investments was 202, with a value of EUR 13.7 billion. Compared with the first quarter, the fall in volume was 8 per cent, while the value of the transactions increased by 17 per cent, as large corporate acquisitions (more than EUR 1 billion) drove the market. Based on investment stage, the most popular transaction type was buyouts, which were made in the value of EUR 11.6 billion, representing 85 per cent of all investments. Growth capital investments were made in the value of EUR 2 billion, which represents 14 per cent of the total volume. The prolonged difficulties in getting financing for the early-stage investment market continued, and new investments were only made in the value of EUR 100 million, i.e. less than one per cent of the total volume.

Geographically, the UK continued to be the most active private equity market in Europe. Investments in the German-speaking area (DACH) were six-fold compared with the first quarter, and the value of the investments increased to EUR 3.2 billion. The debt crisis that Mediterranean countries suffer from could also be seen in the private equity market, and there were only 11 new investments. (Source: unquote Private Equity barometer)

Based on information from May, the total assets of hedge funds were USD 1.75 trillion (source: Eurekahedge). The figure is in practice the same as at the end of March. Since the beginning of the year, about 350 new funds have been launched and most of the new capital has been allocated to macro funds, equity funds and relative value funds, whereas the capital in multi-strategy and distressed debt funds decreased. The total capital invested in macro funds exceeded for the first time USD 150 billion.

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.

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 6.0 million (EUR 8.0 million from 1 Jan. to 30 June 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 5.0 million (EUR 4.2 million). On the other hand, the net investment income fell from the comparison period to EUR 1.0 million (EUR 3.8 million). The Group’s expenses and depreciation totalled EUR 4.7 million (EUR 3.7 million). Personnel expenses totalled EUR 2.5 million (EUR 1.9 million) and depreciation was EUR 0.6 million (EUR 0.4 million). Other operating expenses were EUR 1.6 million (EUR 1.4 million).

The Group’s operating profit was EUR 1.3 million (EUR 4.3 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 1.0 million (EUR 2.9 million).

Business Areas

Asset Management

The operating environment of the Asset Management segment has fluctuated during the first half of 2012. Attention shifted from the debt crisis of the eurozone to the macro-economic outlook of the market and the fundamentals of the investment objects during the first months of the year, but mainly due to the political crisis in Greece, the debt situation of the Spanish state and the poorer solidity of Spanish banks, considerable nervousness returned to both the equity and bond market in April and May. In June, the new election in Greece and the measures taken by the euro countries calmed down the market somewhat, but we cannot yet see any clear solution to the debt crisis or an elimination of its impacts on the capital market.

It became momentarily easier to sell asset management services to both individuals and institutions at the beginning of 2012, which could also be seen in the general increase of the risk willingness of investors. As the crisis in Greece culminated 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, almost totally wiped out the willingness of domestic investors to make new investments. In June, institutional investors were especially cautious when making new investments due to the summer holiday period, bearing the experiences of 2011 in mind. This was clearly reflected on the new sales of the second quarter. The assets under the segment’s management totalled EUR 3 572 million at the end of June (EUR 3 829 million on 30 June 2011). On 30 June 2012, the assets managed under equity and bond investments totalled EUR 938 million (EUR 1 069 million) and within private equity investments, the assets under management were EUR 2 634 million (EUR 2 760 million). Of these assets, EUR 1 101 million (EUR 1 135 million) was covered by the reporting service.

Net subscriptions in eQ Funds totalled EUR 23 million during the period, and the assets managed by the funds totalled EUR 485 million at the end of June (EUR 544 million on 30 June 2011). Within eQ Asset Management, 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 45 million after a little more than 15 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 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 in the spring, 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.

The Amanda V East private equity fund, managed by eQ, continued active fundraising during the period under review. The fund 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 fund has attracted a lot of interest among new clients as well. 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 number of personnel in the Asset Management segment was 44 at the end of June.

Asset Management 4-6/2012 4-6/2011 1-6/2012 1-6/2011 1-12/2011

Net sales,

EUR million 2.1 2.3 4.2 3.3 7.6

Operating profit,

EUR million 0.5 0.6 0.9 1.0 2.2

Personnel 44 49 44 49 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 high volatility of the equity market, the considerable increase of the debt margins of companies and the debt crisis in the eurozone have had a negative impact on the M&A and real estate market. The increasing uncertainty continues to keep M&A and real estate transaction processes rather long.

In the second quarter of the year, Advium acted as advisor in three transactions. In April, Advium acted as advisor as Uponor sold Hewing GmbH to Retting and when Vaahto Group made a directed issue. In June, Advium acted as advisor for Etera in the sale of a real estate owned by the Seinäjoki regional authority.

The number of personnel at Advium was 12 at the end of the period under review.

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 4-6/2012 4-6/2011 1-6/2012 1-6/2011 1-12/2011

Net sales,

EUR million 0.5 1.1 1.0 1.1 2.1

Operating profit,

EUR million 0.2 0.6 0.2 0.6 0.7

Personnel 12 13 12 13 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 1.0 million (EUR 3.8 million from 1 Jan. to 30 June 2011). At the end of the period, the fair value of the private equity funds was EUR 45.1 million (EUR 43.9 million on 30 June 2011). As for private equity investments, the amount of the remaining investment commitments was EUR 12.8 million (EUR 17.4 million). The investment objects returned capital in the amount of EUR 1.9 million (EUR 5.6 million) and distributed EUR 1.0 million (EUR 3.8 million) during the period under review.

The largest exits in the second quarter of 2012 were the exit of the IK 2000 Fund from the Norwegian retail trade chain Europris A/S and the final exit of the PAI IV Fund from Chr.Hansen. Europris was sold to the private equity investor Nordic Capital and the exit generated a cash flow of about EUR 0.3 million for eQ. The final exit of the PAI IV Fund from Chr.Hansen to Novo A/S generated a cash flow of approximately EUR 0.6 million for eQ. Chr.Hansen develops bioscience ingredients for the food, health and animal health sector.

The capital calls of the funds totalled EUR 2.0 million (EUR 3.0 million) during the period under review.

Investments 4-6/2012 4-6/2011 1-6/2012 1-6/2011 1-12/2011

Net sales,

EUR million 0.0 3.3 1.0 3.8 6.5

Operating profit,

EUR million -0.1 3.2 0.8 3.6 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 72.0 million (EUR 75.1 million on 30 June 2011). At the end of the period, eQ Plc’s shareholders’ equity was EUR 68.5 million (EUR 67.8 million). During the period, the shareholders' equity was influenced by the profit for the period of EUR 1.0 million, the change in the fair value reserve of EUR 1.8 million and the dividend payout of EUR -4.0 million. The changes are specified in detail in the tables attached to this release.

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 6.0 million (EUR 6.8 million). In order to safeguard the availability of financing, the Group has access to a credit facility of EUR 10.0 million. At the end of the period, the Group had no interest-bearing liabilities. At the end of the comparison period on 30 June 2011, the amount of interest-bearing long-term debt was EUR 3.2 million. At the end of the period, interest-free long-term debt was EUR 1.6 million (EUR 1.7 million) and interest-free short-term debt was EUR 1.9 million (EUR 2.4 million). eQ’s equity to assets ratio was 95.1% (90.3%).

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 is 33 297 198. Each share carries one vote. Before the cancellation, the number of shares was 33 460 351. The cancellation did not have any impact on the company’s share capital. On 30 June 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 June 2012. eQ Plc's Board of Directors decided on 9 May 2012 to cancel altogether 163,153 own shares held by the company, which totals 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.

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 June 2012

Share of shares and votes, %

Fennogens Investments S.A. 16.50

Chilla Capital S.A. 12.54

Veikko Laine Oy 10.98

Ulkomarkkinat Oy 10.12

Oy Hermitage Ab 7.10

Mandatum Life Insurance Company 6.17

Oy Cevante Ab 4.26

Fazer Jan Peter 3.20

Linnalex Ab 2.65

Louko Antti Jaakko 2.25

On 30 June 2012, eQ Plc had 3 221 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. There were no changes in the number of allocated options during the period. At the end of the period, a total number of 700 000 options has been allocated. Based on the authorisation received by the Board on 14 April 2010, there were 1 300 000 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 June 2011). The Asset Management segment had 44 (43) employees, the Corporate Finance segment 12 (13) employees and the Investments segment 1 (1) employee. Group administration had 8 (5) employees. The personnel of the Asset Management segment comprises nine persons with fixed-term employment and the Corporate Finance segment two persons with fixed-term employment.

The overall salaries paid to the employees of eQ Group during the period under review totalled EUR 2.5 million (EUR 1.9 million from 1 Jan. to 30 June 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

After the end of the period under review, Advium has acted as advisor in the Corporate Finance segment for example when WPP’s subsidiary JWT acquired a majority holding in Activeark Oy, which is a full-service digital marketing agency.

In the Investments segment, private equity funds in which eQ has made investments have announced several exits, which 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 third or fourth quarters, will be about EUR 6.1 million, of which the distribution of profits accounts for about EUR 4.3 million.

Outlook

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

		4–6/12	4–6/11	1–6/12	1–6/11	1–12/11
	NET SALES
	Net investment income	1	3 325	969	3 759	6 482
	Fee and commission income	2 530	3 289	4 997	4 232	9 327
	Total	2 531	6 615	5 966	7 991	15 808

	Operating expenses	-1 868	-2 441	-4 087	-3 295	-7 709
	Depreciation	-303	-244	-605	-389	-865
	Operating profit	360	3 930	1 274	4 308	7 234

	Financial income and expenses	-6	-183	-2	-345	-302
	Profit before taxes	354	3 747	1 272	3 962	6 932

	Income taxes	-129	-969	-290	-1 050	-1 988
	Minority interests	-	-3	-	-3	-3

	PROFIT (LOSS) FOR THE PERIOD	225	2 775	982	2 910	4 942

	Other comprehensive income:
	Available-for-sale financial
	assets, net	1 892	345	1 810	4 300	3 432

	TOTAL COMPREHENSIVE INCOME FOR THE PERIOD	2 117	3 121	2 791	7 210	8 374


	Earnings per share, EUR	0.01	0.08	0.03	0.09	0.15
	Earnings per average share, EUR	0.01	0.10	0.03	0.10	0.16
	Diluted earnings per average share,
	EUR	0.01	0.10	0.03	0.10	0.16

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

CONSOLIDATED BALANCE SHEET, EUR 1 000
		30 June 2012	30 June 2011	31 December 2011
	ASSETS

	LONG-TERM ASSETS
	Tangible fixed assets	135	175	151

	Intangible assets	18 731	19 604	19 318

	Investments available for sale
	Financial securities	5	50	49
	Private equity investments	45 080	43 869	42 539

	Accruals	-	133	-

	Deferred tax assets	72	102	79

	CURRENT ASSETS
	Other assets	1 234	4 025	1 056
	Accrued income and advance payments	706	374	242

	Investments available for sale
	Financial securities	93	45	45

	Cash	5 969	6 751	10 540

	TOTAL ASSETS	72 024	75 128	74 020


	SHAREHOLDERS’ EQUITY AND LIABILITIES

	SHAREHOLDERS’ EQUITY	68 516	67 832	69 684

	LIABILITIES

	NON-CURRENT LIABILITIES
	Other liabilities	-	3 212	-
	Deferred tax liability	1 588	1 646	1 230

	CURRENT LIABILITIES
	Accounts payable and other liabilities	1 920	2 438	3 106

	TOTAL LIABILITIES	3 508	7 296	4 336

	TOTAL SHAREHOLDERS’ EQUITY AND LIABILITIES	72 024	75 128	74 020

CONSOLIDATED CASH FLOW STATEMENT, EUR 1 000

		1–6/12	1–6/11	1-12/11
	CASH FLOW FROM OPERATIONS
	Operating profit	1 274	4 308	7 234
	Depreciation and write-downs	605	389	865
	Transactions with no related
	payment transaction	37	9	102
	Investments available for sale,
	change	-148	2 614	2 643
	Change in working capital
	Business receivables, increase (-)
	decrease (+)	-206	-4 057	-809
	Interest-free debt, increase (+)
	decrease (-)	-1 352	1 674	1 525
	Interest-bearing debt, increase (+)
	decrease (-)	-	-2 588	-5 800

	Total change in working capital	-1 558	-4 971	-5 083

	Cash flow from operations before
	financial items and taxes	210	2 348	5 761
	Interests received	13	11	52
	Interests paid	-15	-356	-354
	Taxes	-781	-200	-336

	CASH FLOW FROM OPERATIONS	-574	1 803	5 122

	CASH FLOW FROM INVESTMENTS
	Investing activities in investments	-1	837	669

	CASH FLOW FROM FINANCING
	Dividends paid	-3 996	-	-
	Income from share issue	-	-	636
	Purchase of own shares	-	0	0

	CASH FLOW FROM FINANCING	-3 996	0	636

	INCREASE/DECREASE IN LIQUID ASSETS	-4 571	2 639	6 428
	Liquid assets on 1 Jan.	10 540	4 112	4 112
	Liquid assets on 30 June	5 969	6 751	10 540

	Liquid assets contain cash and bank deposits.

CHANGE IN CONSOLIDATED SHAREHOLDERS’ EQUITY, EUR 1 000

	Share capital	Reserve for invested unrestricted equity	Fair value reserve	Retained earnings	Total

Shareholders’ equity on 1 Jan. 2011	11 384	29 614	-6 819	10 051	44 229

Comprehensive income			4 300		4 300
Profit (loss) for the period				2 910	2 910

Total comprehensive income			4 300	2 910	7 210

Share issue		16 381			16 381
Other changes				11	11
Shareholders’ equity on 30 June 2011	11 384	45 995	-2 520	12 972	67 832


Shareholders’ equity on 1 Jan. 2012	11 384	46 631	-546	12 215	69 684

Comprehensive income			1 810		1 810
Profit (loss) for the period				982	982

Total comprehensive income			1 810	982	2 791

Dividend distribution				-3 996	-3 996
Other changes				37	37
Shareholders’ equity on 30 June 2012	11 384	46 631	1 264	9 238	68 516

SEGMENT INFORMATION, 1 000 EUR

1-6/12	Asset	Corporate				Group,
	Management	Finance	Investments	Other	Eliminations	total
External income	4 024	972	969	-		5 966
Income from
other segments	200	-	-	37	-237	-
Net sales	4 224	972	969	37	-237	5 966

Operating profit	905	225	769	-625		1 274
Profit for the period	905	225	769	-918		982

Long-term
assets	9 432	9 377	45 151	62		64 023

1-6/11	Asset	Corporate				Group,
	Management	Finance	Investments	Other	Eliminations	total
External income	3 095	1 138	3 759	-		7 991
Income from
other segments	200	-	-	-	-200	-
Net sales	3 295	1 138	3 759	-	-200	7 991

Operating profit	994	554	3 559	-801		4 308
Profit for the period	994	554	3 559	-2 199		2 910

Long-term
assets	10 565	9 394	43 919	55		63 933


4-6/12	Asset	Corporate				Group,
	Management	Finance	Investments	Other	Eliminations	total
External income	2 006	524	1	-		2 531
Income from
other segments	100	-	-	18	-118	-
Net sales	2 106	524	1	18	-118	2 531

Operating profit	541	173	-99	-255		360
Profit for the period	541	173	-99	-390		225


4-6/11	Asset	Corporate				Group,
	Management	Finance	Investments	Other	Eliminations	total
External income	2 151	1 138	3 325	-		6 615
Income from
other segments	100	-	-	-	-100	-
Net sales	2 251	1 138	3 325	-	-100	6 615

Operating profit	580	554	3 225	-429		3 930
Profit for the period	580	554	3 225	-1 583		2 775


1-12/11	Asset	Corporate				Group,
	Management	Finance	Investments	Other	Eliminations	total
External income	7 226	2 101	6 482	-		15 808
Income from
other segments	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 expense will be allocated to the Investments
segment. Under the item Others, income from other segments comprises the administrative services produced by Group administration to other segments.

The line operating profit under the item Others 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 Others.

CONSOLIDATES KEY RATIOS
	30 June 2012	30 June 2011

Profit (loss) for the period (EUR 1 000)	982	2 910
Earnings per share, EUR	0.03	0.09
Earnings per average share, EUR	0.03	0.10
Diluted earnings per average share, EUR	0.03	0.10
Equity per share, EUR	2.05	2.05
Equity per average share, EUR *)	2.06	2.36
Return on investment, ROI % p.a.	2.9	10.8
Return on equity, ROE % p.a.	2.8	10.4
Equity to assets ratio, %	95.1	90.3
Share price at the end of the period, EUR	1.67	1.78
Number of personnel at the end of the period	64	63
Private equity investments to equity ratio, %	65.8	64.7
Private equity investments and remaining
commitments to equity ratio, %	84.5	90.4


*) 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

Draw-downs to private equity funds	1 998
Return of capital from private equity funds	-1 855
Changes in the value of private equity funds
in fair value reserve	2 397

Book value of private equity funds on 30 June 2012	45 080

REMAINING COMMITMENTS

On 30 June 2012, eQ Plc’s remaining commitments in private

equity funds totalled EUR 12.8 million (EUR 17.4 million on 30 June

2011). Other liabilities at the end of the period under review totalled EUR 1.3 million (EUR 0.2 million on 30 June 2011).

eQ PLC’S INTERIM REPORT 1 JANUARY TO 30 JUNE 2012

Attachments