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Net sales by geography 2009 by smx43008

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									Annual Report



                1
    Comptel is a leading telecom software vendor helping communications
    service providers to deliver innovative services flexibly and charge them
    effectively. We have sold solutions to 280 customers with 800 million
    subscribers in 85 countries.
       Key figures                                                            2005                 2006           2007                2008                2009
       Net sales, EUR million                                                  66.1                 80.4           82.4                84.8                74.9
         change, %                                                             10.7                 21.8            2.4                 3.0               -11.7
       Operating profit, EUR million                                           10.5                 11.2           16.5                11.4                 1.0
         % of net sales                                                        15.9                 14.0           20.0                13.4                 1.4
       Equity ratio, %                                                         75.2                 74.6           77.6                67.4                62.6
       Average number of personnel                                             462                  561            555                 606                 613




       Net sales by geography 2009                  Net sales and                                                 Order backlog
                                                    operating profit
                     7%                             EUR million               % of net sales                      EUR million
                                              Americas
                                              100                                              20           40
                                              Middle East and Africa                                          Del dolorum                                         Del dolorum
        22%
                                              Asia-Pasi c                                                     To delirium                                         To delirium
                                               75                                              15           30
                                              Europe
                                    44%
                                               50                                              10           20

          27%                                  25                                              5            10

           Europe            Middle East        0                                              0             0
                             and Africa
                                                                                                                     2005

                                                                                                                              2006

                                                                                                                                     2007

                                                                                                                                            2008

                                                                                                                                                   2009
                                                         2005

                                                                2006

                                                                       2007

                                                                              2008

                                                                                      2009




           Asia-Pacific
                             Americas


       Personnel by function 2009                   R&D investments                                               Dividend per share
                     9%                            EUR million                % of net sales                      EUR
                                                 administration

                                               15
                                                sales                                          18          0.08
                                                                                                               Del dolorum                                        Del dolorum
        19%
                                                 research
                                                                                                               To delirium                                        To delirium
                                                                                                           0.06
                                    41%
                                               10
                                                customer service                               12
                                                                                                           0.04
        31%
                                                5                                              6
                                                                                                           0.02
          Customer service   Sales and
                             marketing          0                                              0           0.00
          Research,                                                                                                                                   *
                                                                                                                     2005

                                                                                                                              2006

                                                                                                                                     2007

                                                                                                                                            2008

                                                                                                                                                   2009
                                                         2005

                                                                2006

                                                                       2007

                                                                              2008

                                                                                      2009




          development        Administration
          and product        and internal
          management         services                                                                             * Board    of Directors’ proposal


2
                               Content
                                2            Comptel for Investors
                                4            Message from the CEO
                                6            Report of the Board of Directors
                               12            Financial Statements
                               51            Corporate Governance Statement
                               54            Board of Directors and Corporate Executives
                               56            Shareholder Information and Annual Summary
                               57            Contact Information

                               Financial statements presented in the Annual Report are condensed from the
                               a
                               ­ udited­financial­statements­of­Comptel­Corporation.­The­entire­audited­financial­
                               statements­are­available­on­the­company’s­website­at­www.comptel.com.




COMPTEL Annual Report | 2009                                                                                  1 1
Comptel for Investors
    Comptel is one of the leading players in global Operations
    Support System (OSS) markets. Our solutions meet service
    providers’ growing needs to improve their efficiency and
    reduce time to market for new services.
    Comptel has wide expertise in service fulfill-       In addition to software products, we deliver
    ment, mediation and charging. Our offering           customer specific solutions to Elisa in Finland
    expands from point solutions to an integrated        and Telenor in Norway.
    end-to-end software platform. We sell software           Comptel aims to create shareholder value
    licenses as well as services and maintenance         by increasing net sales in the long term and by
    related to our products.                             sustaining profitability on a good level. We in-
        Comptel employs about 600 highly-skilled         tend to continue profitable growth by investing
    experts worldwide. We also cooperate in sales        in product development and strengthening our
    and delivery with partners, for example system       local presence close to customers worldwide.
    integrators IBM, Logica and Tech Mahindra, and       We are also actively seeking focused acquisi-
    network device manufacturers Alcatel-Lucent,         tions.
    Cisco and Juniper.                                       Comptel was founded in Finland in 1986
        Our customers include leading global oper-       and was listed on the Helsinki stock exchange
    ators, such as América Móvil, Bharti Airtel, China   in 1999. Comptel is a Mid Cap company and
    Mobile, O2, Orascom, QTel, Saudi Telecom,            part of the Information Technology sector of
    T-Mobile, Telefónica, Vodafone ja Zain.              NASDAQ OMX.



       Comptel’s software connects service providers’ customer care and billing systems with the
       network. The move towards next generation IP-based services will increase the role of OSS
       in the telecoms business, and operators will need to invest in OSS to bring innovative services
       to market faster and more efficiently. Comptel is the world’s leading provider of dynamic
       OSS, offering an extensive portfolio of solutions to increase revenues, improve the customer
       experience and reduce costs.




    Strategy

       •    Become the strategic partner of                •    Get closer to customers and offer
            choice for system integrators and                   unparalleled OSS expertise with
            network vendors                                     new business models, e.g. software
                                                                as a service



       •    Offer faster time to market for                •    Develop offerings with increased
            communications services                             value and competitive advantage –
                                                                an end-to-end Comptel Dynamic
                                                                OSS™ Solution




2                                                                                COMPTEL Annual Report | Comptel for Investors
          Solution Offering

                                 ORDER                                                            CHARGING

                                                      Customer Care and Billing
                         Order Processing
                          and Inventory
                                                       Comptel Dynamic OSS™
                        Fulfillment and                                                          Mediation and
                     Resource Management                           Catalog                         Charging

                                                                                           Convergent Mediation
                                                                                              and Charging
                         Access Networks                        Core Networks                  Service Platforms


          Fulfillment and Resource Management                          Mediation and Charging
          • Order management coordinates the order-to-cash             • Mediation collects usage information in real-time.
            process.                                                   • Rating attaches the price to services in real-time.
          • Inventory holds information for the management             • Charging solutions charge the subscriber account
            of network resources and associated services.                in real-time.
          • Provisioning and activation activates the network          • Policy control manages subscriber- and service-specific
            elements to provide services.                                policies in real-time.

          Catalog solutions manage complex service packages
          and their life-spans.




          Client Value Proposition
          Time to Market
          Comptel helps service providers reduce time to market for new services, driving real differentiated
          innovation. Comptel’s solutions can be deployed fast, so that the benefits can be realised fast.

          Reliable Delivery
          Comptel’s reliability enables service providers to predictably deliver quality services to their customers.
          Comptel’s solutions are reliable and scalable, so they can work in even the most challenging environ-
          ments.

          Value for Money
          Comptel helps service providers reduce overall operating costs, so they can offer value for money
          to their customers. Comptel’s solutions are designed to bring efficiencies to operations.

          Partners for the Future
          Comptel’s flexible solutions adapt to existing environments and thanks to Comptel’s expertise, evolve
          to meet the demands of future services. Comptel believes in building long-term relationships with
          service providers.


COMPTEL Annual Report | Comptel for Investors                                                                                      3
We continued to invest
in the future
                               The year 2009 was a challenging one for Comptel.
                               We adjusted our operations in line with reduced
                               demand, whilst continuing to invest in the
                               development of end-to-end solutions
                               in accordance with our strategy.




     ”Versatile broadband      The global economic recession slowed         congestion in data network. In order
                               down telecom operators’ investments          to meet the growing demand, operators
    offerings require more     and weakened the demand for Oper-            have been investing to increase their
                               ations Support Systems (OSS) in              network capacity, but revenues have
        ­ exible­systems­to­
        fl                     Europe and in the Americas. At the           not grown at the same pace as costs.
      support the growth.”     start of 2009 we began a cost cutting        Therefore new methods are required
                               exercise that was carried out accord-        for managing and optimising their
                               ing to the plan, and now we are able         broadband offering.
                               to operate with a significantly reduced          In 2009 we extended our mediation
                               cost structure.                              and charging solutions suite, adding
                                   Despite the recession, there is a        Comptel Policy Control which helps
                               growing need for telecom operators           operators to manage bandwidth in
                               to develop their services and networks.      real-time and allocate their network
                               Operators need dynamic support               capacity efficiently according to
                               systems to be able to launch versatile       demand. In addition, the solution can
                               services fast and manage their life-cycle.   help subscribers control their roaming
                               At the same time, operators are trying       costs. The solution has received several
                               to reduce costs by consolidating the         telecoms awards for innovation, and
                               network and business management              by the end of the year this product had
                               systems that they have built-up over         been sold and was being deployed in
                               many years. In addition, next gener-         a number of countries.
                               ation technologies and the building of
                               4G mobile networks are increasing the        IP solutions are becoming more
                               need for operators to invest in systems      common
                               that support their new business models.      Internet-based networks and services,
                                                                            such as IPTV and VoIP, are becoming
                               Breakthrough in mobile broadband             more popular and they require more
                               Mobile broadband services are a key          advanced service management systems.
                               growth area in telecoms. The rapidly in-     Comptel has great expertise in IP-based
                               creasing use of mobile to access email,      fulfillment solutions, and we invested
                               music and video services as well as          substantially in this growing market
                               Internet-based social networks creates       during 2009.




4                                                                              COMPTEL Annual Report | Message from the CEO
    We are building an integrated              our partners, including Alcatel-Lucent,    ”Our integrated
platform for fulfillment based on the          Cisco and IBM.
technology of Axiom Systems which                                                         platform consolidates
was acquired the previous year. We             A global expert
also combined our three product units          Comptel is an international company.       separate systems and
into one larger entity. Our main R&D           Our highly-skilled personnel are of        brings competitive edge.”
focus was in developing of end-to-end          40 different nationalities and we are
solutions for service fulfillment              present in 20 countries. In 2009, the
automation used in fixed broadband             proportion of our personnel working
networks.                                      in Asia increased to over one quarter
                                               of the total, and we also significantly
Unique offering for customers                  expanded the resources and operating
and partners                                   area of our Bulgarian service centre. We
We provide our customers and partners          are serving our customers and partners
with one of the most comprehensive             better than ever in their own markets.
solution portfolio available in the OSS            I wish to thank our personnel for
market. Our integrated software plat-          their valuable contribution and our
form automates the service fulfillment         customers, partners and shareholders
process, manages services and net-             for their trust and good cooperation
work resources and enables real-time           during these challenging times. I be-
mediation and charging. Our solutions          lieve that our adjustment measures
provide some one thousand off-the-             as well as the continuing investment
shelf interfaces for different network         in product development will ensure
elements and IT systems in fixed,              Comptel’s long-term profitability and
mobile, IP, cable and satellite and con-       competitiveness.
vergent environments.
    As part of our active partner strat-       Helsinki, March 2010
egy, we have been providing network
equipment vendors and system inte-
grators both solutions and expertise in
fulfillment and charging. In 2009, we          Sami Erviö
developed a closer cooperation with            President and CEO




COMPTEL Annual Report | Message from the CEO                                                                          5
Report of the Board of Directors for 2009
          Net sales and                                         Market development                                        representing 0.5 per cent (12.5) of net sales.
          operating profit
                                                                     Comptel operates globally in the telecom             Group net loss was EUR 2.1 million (net profit
          EUR million              % of net sales
                                                                     OSS (Operations Support System) markets.             6.6). Earnings per share for the financial per-
    100                                             20
                                                                             The global recession had an impact
                                                                   Del dolorum                                            iod were EUR -0.02 (2008: 0.06; 2007: 0.10).
                                                                     on telecom operators’ investments and it
                                                                   To delirium                                                 Tax expense for the year 2009 was EUR
     75                                             15
                                                                     decreased the demand for OSS in Europe               2.5 million (4.0), of which EUR 1.2 million
     50                                             10               and in the Americas. However, the oper-              (1.5) were withholding taxes due to double
                                                                     ators’ need to expand services and networks          taxation. The cumulative amount of double
     25                                             5                remains. With the deployment of 4G networks          paid withholding taxes is EUR 6.6 million.
                                                                     and the growth of data services in particular,       The respective countries and the Ministry of
      0                                             0                investment is required in systems which pro-         Finance in Finland are still negotiating on the
              2005

                     2006

                            2007

                                   2008

                                          2009




                                                                     mote new business. At the same time, in the          recovery of the withholding taxes. The com-
                                                                     developed markets especially, operators are          pany believes the treatment of its withholding
                                                                     looking to consolidate the network and busi-         taxation will be changed.
                                                                     ness management systems as a part of their                Return on equity was -4.4 per cent
                                                                     drive to reduce costs. Also these changes call       (2008: 12.8; 2007: 21.9).
                                                                     for software which supports modern business               The Group’s order backlog remained at
          Earnings per share                                         models.                                              the previous year’s level and was EUR 37.6
          EUR
                                                                             During the first and last quarter of 2009,   million at the end of the period (2008: 38.8;
                                                                     Comptel adjusted its headcount in line with          2007: 35.1).
0.10
                                                         Del dolorum
                                                                     the reduced demand with statutory personnel               Key figures, per share data and the defini-
                                                         To delirium negotiations in Finland and in Norway. The           tion of key figures are presented in more detail
    0.5                                                              company continued actively to focus R&D and          in notes to the financial statements.
                                                                     to position the offering away from point solu-
0.00                                                                 tions towards dynamic end-to-end solutions.          Business areas
                                                                     The customer service centre operations and           Comptel’s principal business segments are
                                                                     resources set-up in Bulgaria were significantly      the four geographical market areas: Europe,
-0.05                                                                expanded during the year.                            Asia-Pacific, Middle East and Africa, and the
              2005

                     2006

                            2007

                                   2008

                                          2009




                                                                                                                          Americas. The operating profit of the seg-
                                                                Net sales and profitability                               ments includes the cost of sales and customer
                                                                   The net sales of Comptel Group were EUR                services. Group R&D and general costs are not
                                                                   74.9 million in 2009 (2008: 84.8; 2007: 82.4).         allocated to the segments.
                                                                   Net sales decreased by 11.7 per cent (increased             In 2009, Comptel sold a total of 19 (21)
                                                                   3.0) compared to the previous year. Low                new core licenses of which five were Comptel
          Return on equity
                                                                   license sales especially in the European and           Mediation and Charging, five Comptel Con-
          %                                                        American markets decreased net sales.                  trol and Charge, four Comptel Provisioning
    30                                                                  The Group’s operating profit was EUR              and Activation, two Comptel Fulfillment, one
                                                         Del dolorum
                                                                   1.0 million (2008: 11.4; 2007: 16.5), which            Comptel Order Management, one Comptel
                                                         To delirium
    20                                                             corresponds 1.4 per cent (13.4) of net sales.          Inventory and one Comptel Service Reposi-
                                                                   The operating profit, excluding one-off items          tory.
    10                                                             of EUR 2.5 million (1.1) related to personnel               Europe was clearly the most significant
                                                                   reductions, was EUR 3.5 million (12.5), which          market area. Net sales in the area totalled
     0
                                                                   corresponds 4.7 per cent (14.7) of net sales.          EUR 33.3 million (40.8). Net sales decreased
                                                                        Net financial items were EUR 0.7 million          as a result of a decelerating market from the
    -10
                                                                   negative (0.9 negative). The Group’s profit            previous year and due to slowness in invest-
              2005

                     2006

                            2007

                                   2008

                                          2009




                                                                   before taxes was EUR 0.4 million (10.6),               ment decisions. The Group’s operating profit




6                                                                                                                     COMPTEL Annual Report | Report of the Board of Directors
for European business was EUR 15.4 million             and Telefónica groups, and Axtel, Oi and                Geographical net sales
                                                                                                               breakdown
(20.9), which was 46.1 per cent of the Euro-           T-Mobile US.
                                                                                                               EUR million
pean net sales (51.3). The profitability was                Comptel’s net sales are comprised of
                                                                                                          50
weakened by decreased net sales and also due           selling software licenses and license upgrades,                                                              Americas

to one-off items related to personnel reduc-           and secondly of the services and maintenance       40                                                        Middle Ea

tions. In 2009 Comptel sold ten core licenses          supporting its solutions. In 2009, license sales                                                             Asia-Pasif
                                                                                                          30
to its European customers. Some of the most            were EUR 19.7 million (27.4) and service and                                                                 Europe

significant European customers were Elisa and          maintenance sales were EUR 55.2 million            20
Telenor, operators belonging to the Telefónica         (57.5).
                                                                                                          10
O2, T-Mobile, Vodafone and Wind groups,                     Comptel sells and delivers its products
and Base, Cosmote, KPN and TDC.                        and solutions both directly through its own         0




                                                                                                                 2005

                                                                                                                          2006

                                                                                                                                  2007

                                                                                                                                           2008

                                                                                                                                                    2009
     The net sales of Asia-Pacific area remained       sales organisation and through its partners.
at the previous year’s level and were EUR 20.5         The most significant partners are system inte-
million (20.9). The Group’s operating profit           grators such as IBM, Tech Mahindra, Logica                Europe                  Middle East
                                                                                                                                         and Africa
from the Asia-Pacific business increased to            and Accenture and network equipment ven-                  Asia-Pacific
                                                                                                                                         Americas
EUR 11.5 million (9.3), which was 56.3 per             dors like Alcatel-Lucent, Cisco and Juniper.
cent of the segment’s net sales (44.8). Comptel        In addition to its global partners, Comptel
sold three core licenses to Asia-Pacific custo-        cooperates with a number of local partners
mers in 2009. The most significant customers           that are significant in their own region, such          Net sales by category
in the region were Bharti Airtel and Idea in           as T-Systems in Germany. In 2009, the net
                                                                                                               EUR million
India, Vodafone and IBM in India and Aus-              sales through partners and resellers were
tralia, Indosat in Indonesia, DiGi in Malaysia,        EUR 23.1 million (24.5) and from direct sales      80
                                                                                                                                                               Palvelut

FET in Taiwan and DTAC in Thailand.                    EUR 51.7 million (60.4).                                                                                Lisenssit
                                                                                                          60
     The net sales of the Middle East and
Africa increased to EUR 16.1 million (15.3).           Investments                                        40
The Group’s operating profit from the region           Gross investments in tangible and intangible
totalled EUR 8.3 million (8.9), which is 51.6          assets were EUR 0.7 million in 2009 (2008:         20
per cent of the segment’s net sales (58.6). In         EUR 1.5 million excluding the acquisition
2009, Comptel sold five core licenses to its           of Axiom Systems) and comprised of invest-          0
                                                                                                                  2005

                                                                                                                          2006

                                                                                                                                 2007

                                                                                                                                         2008

                                                                                                                                                  2009
customers in the region. Many of the biggest           ments in devices, software and furnishings.
operators in the Middle East are Comptel’s             The investments were funded through cash
customers. Among the most significant                  flow from operations.                                      Licenses

customers in the Middle East and Africa were                                                                      Services and maintenance

operators belonging to the Orascom, Q-Tel              Research and development
and Zain groups, Saudi Telecom and Telenor             Comptel’s direct R&D expenditures and
Pakistan.                                              investments were EUR 13.1 million (14.0).
                                                                                                               Net sales breakdown
     The net sales from the Americas de-               This corresponds to 17.5 per cent (16.5) of the         by sales channel
creased to EUR 5.1 million (7.9). A low de-            Group’s net sales. Direct R&D expenditure of            EUR million
mand for OSS licenses resulted in the decrease         2009 is not fully comparable to previous year      80
                                                                                                                                                               Partner sales
of net sales. The Group’s operating profit from        since Axiom Systems Ltd was consolidated as
the American business was EUR 0.3 million              of 20 April 2008 and since company’s expenses      60
                                                                                                                                                               Direct sales


(4.2), which is 5.4 per cent of the segment’s          have been allocated more widely in the
net sales (53.1). Comptel sold one core license        regional organisation in 2009.                     40
to its American customers in 2009. The most                Comptel’s R&D expenditure and invest-
significant customers in the Americas were             ments were mainly targeted at developing new       20
operators belonging to the América Móvil               dynamic end-to-end solutions, which enable
                                                                                                           0
                                                                                                                  2005

                                                                                                                          2006

                                                                                                                                 2007

                                                                                                                                          2008

                                                                                                                                                  2009




                                                                                                                  Direct sales
                                                                                                                  Partner sales




COMPTEL Annual Report | Report of the Board of Directors                                                                                                   7
          Statement of financial                               service providers to shorten time to market for       The trade receivables at the end of the
          position
                                                               new services and to charge for them. Comptel      period were EUR 23.6 million (27.6). Accrued
          EUR million
                                                               continued the development of all of its main      income was EUR 13.5 million (9.2). The
    100
                                                               products to further improve competitiveness
                                                     Del dolorum                                                 deferred income related to partial debiting was
                                                               and to offer new features and functionalities.
                                                     To delirium                                                 EUR 1.6 million (1.8).
     75
                                                                    A new product, Comptel Policy Control,           The Group had EUR 8.0 million of interest-
     50                                                        was launched for mediation and charging           bearing debt at the date of the financial state-
                                                               solutions. It allows roaming cost control,        ments (5.1). Comptel Corporation has in force
     25                                                        bandwidth management and the optimising           a revolving credit facility of EUR 15.0 million
                                                               of resource usage. Comptel Policy Control is      maturing in the year 2013, of which EUR 7.0
      0                                                        built on the top of the earlier launched tech-    million is still to be withdrawn. Equity ratio
              2005

                     2006

                            2007

                                   2008

                                          2009




                                                               nology platform, which enables online and         was 62.6 per cent (67.4) and the gearing ratio
                                                               real-time management as well as mediation         was 2.8 (2.1 negative).
                                                               and charging for both prepaid and postpaid
                                                               services.                                         Company structure
                                                                    In fulfillment, the development of an        At the end of 2009, Comptel Group comprised
                                                               integrated platform was continued. The focus      of the parent company Comptel Corporation
          Operating cash flow                                  was in developing of end-to-end solutions for     and the fully owned subsidiaries Comptel
          EUR million
                                                               service fulfillment automation of broadband       Communications Oy, Comptel Communica-
                                                               networks. Another important development           tions AS, Comptel Communications Inc.,
     15
                                                 Del dolorum
                                                               area was catalog solutions allowing the com-      Comptel Communications Sdn Bhd, Comptel
                                                 To delirium mercial and technical management of services        Communications Brasil Ltda, Comptel Ltd.,
     10                                                        as an integrated part of the platform.            Comptel Passage Oy and Business Tools Oy.
                                                                    Comptel filed two (eight) new patent         In addition the Group included the fully
      5                                                        applications in 2009, as well as extended 12      owned subsidiary Axiom Systems Holdings
                                                               previously filed patent applications. During      Ltd. and its fully owned subsidiaries Axiom
                                                               the year Comptel was granted two patents,         Systems Ltd., Viewgate Networks Limited and
      0                                                        which were connected with real-time media-        Axiom Systems OSS (Asia Pacific) Pte. The
              2005

                     2006

                            2007

                                   2008

                                          2009




                                                               tion of usage data and charging of subscribers    Group also included an Irish associated com-
                                                               in an online mediation environment. At the        pany Tango Telecom Ltd. (share of ownership
                                                               end of 2009, Comptel had 12 (ten) granted         20.0 per cent).
                                                               patents and 82 (70) pending patent applica-            Comptel Group has registered representa-
                                                               tions to protect all of its main products and     tive and branch offices in Australia, China,
                                                               solutions.                                        India, Italy, Russia, and in the United Arab
          Equity ratio
                                                                    The Comptel® trademark is a registered       Emirates.
          %                                                    trademark of Comptel Corporation in several
    100                                                        countries.                                        Personnel
                                                 Del dolorum
                                                                                                                 At the beginning of the year Comptel had 650
     75
                                                 To delirium
                                                               Financial position                                employees, and at the end of the year 587. The
                                                               Statement of financial position total on 31       number of employees was reduced by 9.7 per
     50                                                        December 2009 was EUR 82.6 million (83.0),        cent following of statutory personnel negotia-
                                                               of which liquid assets amounted to EUR            tions in 2009. The Group employed an average
     25                                                        6.7 million (6.1). In January–December, net       of 613 persons in 2009 (2008: 606; 2007: 555).
                                                               operating cash flow was EUR 6.3 million (7.9),         At the end of the year, 29 persons were
      0
                                                               paid dividends were EUR 4.3 million (6.4) and     working in the customer service centre estab-
              2005

                     2006

                            2007

                                   2008

                                          2009




                                                               net investments were EUR 4.1 million (15.3).      lished in Bulgaria in 2008. These persons are




8                                                                                                            COMPTEL Annual Report | Report of the Board of Directors
working for a partner company and will be                  In 2009 the amount of sick leave from             Number of employees
                                                                                                             at year end
transferred to the Comptel Group during the            active working hours was 1.6 per cent (2.3).
second quarter of 2010.
                                                                                                       800
     Of the Group personnel, 65.2 per cent             Corporate governance                                                                                 Del doloru

(73.0) were located in Europe, 26.6 per cent           The Annual General Meeting, held on 16                                                               To delirium
                                                                                                       600
(20.5) in the Asia-Pacific area, 3.9 per cent          March 2009, elected the following members
(2.9) in the Middle East and Africa and 4.3            for the Board of Directors: Mr Olli Riikkala,   400
per cent (3.5) in the Americas and at the end          Mr Hannu Vaajoensuu, Mr Timo Kotilainen,
of 2009.                                               Mr Juhani Lassila and Mr Petteri Walldén.       200
     Of the Group personnel, 40.4 per cent                  In 2009, the Group Executives were Mr
(39.1) worked in customer services, 31.3 per           Sami Erviö, President and CEO, the business       0




                                                                                                                 2005

                                                                                                                        2006

                                                                                                                                2007

                                                                                                                                         2008

                                                                                                                                                2009
cent (32.0) in research, product development           area leaders Mr Harri Palviainen (Europe)
and product management, 19.1 per cent (20.7)           until 26 August, Mr Mika Korpinen (Asia-
in sales and marketing and 9.2 per cent (8.3)          Pacific), Mr Youssef Kermoury (Middle
in administration and internal support ser-            East and Africa) and Mr Ricardo Carreon
vices at the end of 2009.                              (Americas), Mr Minesh Patel responsible               Personnel by market area
     At the end of the year the Group had 580          for Global Alliances and Sales Development,
                                                                                                             %
(641) regular workers and 7 (12) non-perma-            Ms Arnhild Schia responsible for Strategic
nent employees. Of the employees, 559 (619)            Marketing, Mr Simo Sääskilahti responsible      100
                                                                                                                                                            Amerikka

were full-time and 28 (34) part-time.                  for Products and Solutions, Mr Gareth Senior                                                         Lähi-itä
                                                                                                        75
     Average personnel turnover in 2009 was            (CTO), Mr Markku Pirskanen (CFO as of                                                                Aasia
16.9 per cent (15.9). The average years of             20 April, Mr Veli Matti Salmenkylä until
                                                                                                        50                                                  Eurooppa
service was 6.2 (6). The average age of the            15 March), Ms Niina Pesonen, responsible for
employees at the end of the year was 37 years          Human Resources, and Mr Markku Järvenpää         25
(38). At the end of the year 72 per cent (73)          responsible for Global Operations Support.
of the employees were men and 28 per cent              Mr Ricardo Carreon left the company on            0

                                                                                                                 2005

                                                                                                                        2006

                                                                                                                                2007

                                                                                                                                         2008

                                                                                                                                                2009
(27) women.                                            14 January 2010.
     Salaries and commissions totalled EUR                  Mr Simo Sääskilahti, Senior Vice Presi-
32.0 million in 2009 (2008: 32.0; 2007: 27.6).         dent of Products and Solutions, was appointed             Americas

     Salaries and compensations paid to the            to Deputy CEO of Comptel Corporation as                   Middle East and Africa

management are described in attachment                 of 1 December 2009. Mr Timo Koistinen,                    Asia-Pacific

30 Related party transactions of the financial         M.Sc (Engineering), was nominated as Senior               Europe

statements.                                            Vice President Europe region, effective as of
     Of the personnel, 66 per cent had a               1 January 2010.
university degree, 19 per cent had a polytech-              A separate Corporate Governance State-           Personnel breakdown
nic diploma, 8 per cent a vocational college           ment has been given as a part of the annual           by function
diploma and 7 per cent other education.                report.                                               %
     The Group launched Comptel Univer-                                                                 50
sity programme for personnel competence                Auditors
                                                                                                        40
development. In 2009, a special focus was in           Comptel’s authorised public accountant was
developing the sales competencies further in           KPMG Oy Ab.                                      30
all business areas. An average of EUR 1,047
                                                                                                        20
per person was spent on training (1,035).
The number of training days per person was                                                              10
4.9 (6.6).
                                                                                                         0
                                                                                                             2007
                                                                                                             2008
                                                                                                             2009
                                                                                                             2007
                                                                                                             2008
                                                                                                             2009
                                                                                                             2007
                                                                                                             2008
                                                                                                             2009
                                                                                                             2007
                                                                                                             2008
                                                                                                             2009




                                                                                                             Customer                  Sales and
                                                                                                             service                   marketing
                                                                                                             Research,                 Administration
                                                                                                             development               and internal
                                                                                                             and product               services
                                                                                                             management




COMPTEL Annual Report | Report of the Board of Directors                                                                                                9
Comptel’s share                                    is FI4000005335. The current share subscrip-      new shares and on repurchase to a maximum
and shareholders’ equity                           tion price is EUR 1.89 which corresponds to       of 10,700,000 own shares. Based on this auth-
Comptel has one share type. Each share             the trade volume weighted average quotation       orisation, a number of 211,350 own shares
constitutes one (1) vote at the Annual General     of the Comptel share on the Helsinki stock        were repurchased in 2009. The authorisations
Meeting. The company’s capital stock on 31         exchange during 1 April - 30 April 2007 de-       to share issues and repurchase the own shares
December 2009 was EUR 2,141,096.20 and the         ducted by the dividends paid.                     are valid until 30 June 2010.
total number of votes was 107,054,810.                  During the year, Comptel Corporation
     The total exchange of Comptel’s shares        allotted 168,426 shares as part of share-based    Business risks
in 2009 was 35.8 million shares (30.5), which      incentives to persons involved in the program     Comptel’s business risks are regularly
is 33.5 per cent (28.5) of the total number of     and 100,922 shares to the members of the          estimated as part of the annual operative plan-
shares. The closing price was EUR 0.78 (0.69).     Board of Directors as their annual compensa-      ning and strategy process, of the process of
Comptel’s market value at the end of the year      tion according to a resolution of the Annual      preparing and deciding on commercial offers
was EUR 83.3 million (73.8).                       General Meeting.                                  and agreements and investments and other
     Comptel’s shareholders by sector and size,         Members of the Board of Directors, the       resource allocations, and of other operative
the largest holders and the figures on shares      President and CEO, and the Deputy CEO             actions. Strategic risks are considered the
traded and share quotations are presented in       owned a total of 0.5 per cent of the company’s    most significant. Strategic risks are further
the section Shares and shareholders in the         shares and votes and 2.9 per cent of the com-     divided into market risks and risks related
financial statements.                              pany’s share options at the end of the period     to Comptel’s business strategy.
     During the year, a total of 1,250,000 share   under review. A total of 240,000 shares can            Below is a description of the most impor-
options 2009A have been distributed to the         be subscribed with the above options.             tant factors outside the Group or generated
key personnel of Comptel Group. The rest                A total of 8,400,000 Comptel Corporation     by its operation, which may be of significance
of the 2009 share options have been granted        shares can be subscribed with the company’s       to Comptel’s business, operating result and
to Comptel Communications Oy, to be further        outstanding share options.                        share price in the future.
distributed to the present and future key               The company held 304,004 of its own               The recovery of operations support system
personnel of the Group. The current share          shares at the end of the period under review,     markets may be delayed in Europe and in the
subscription price for option 2009A is EUR         which is 0.28 per cent of the total number of     North America, and the demand can weaken
0.63, which corresponds to the trade volume        its shares. The total counter-book value of the   also in other regions.
weighted average quotation of the Comptel          shares held by the company was EUR 6,080.              Comptel develops dynamic end-to-end
share on NASDAQ OMX Helsinki during                The company has initiated a share buy-back        solutions for leading operators in the telecom
1 April - 30 April 2009.                           programme, according to which a maximum           field. This requires Comptel to understand
     During the year, 100,000 share options        amount of 800,000 own shares will be pur-         correctly the trends taking place in its business
2006A have also been distributed. The current      chased through public trading on NASDAQ           environment and the needs of its customers
share subscription price for option 2006A is       OMX Helsinki.                                     and resellers by each region. Failure to identify
EUR 1.69, which corresponds to the trade                The Annual General Meeting, held on 16       market conditions, address customers’ needs
volume weighted average quotation of the           March 2009, approved the Board of Directors’      and develop its products in a timely way may
Comptel share on the Helsinki stock exchange       proposal for a dividend, according to which       significantly undermine Comptel’s business
during 1 April - 30 April 2006 deducted by the     a dividend of EUR 0.04 per share was paid for     and profitability.
dividends paid.                                    2008. The Annual General Meeting decided               Competition in the OSS market is keen.
     Comptel Corporation’s 2006B share op-         to issue share options to the key personnel       The sector is undergoing consolidation
tions were listed on NASDAQ OMX Helsinki           of the Comptel Group and granted the Board        between actors, which is reflected in the dur-
commencing from 2 November 2009. The               of Directors authorisations to decide on share    ation and pricing of agreements. If Comptel
trading code is CTL1VEW206 and ISIN code           issues amounting to a maximum of 21,400,000       does not manage to adapt its operations and




10                                                                                               COMPTEL Annual Report | Report of the Board of Directors
address the changes taking place in its compe-         and Norwegian Krone affect the company’s               Comptel’s net sales and operating profit
tition environment, the market development             net sales, expenses and net profit.               are estimated to grow in 2010. The full year
may greatly impair the company’s business                   The application submitted by Comptel to      operating profit margin is forecast to be 8 - 12
and operating result.                                  prevent double taxation is still pending with     per cent. However, in the first quarter net sales
     The Middle East, Africa and Asia are              the Ministry of Finance in Finland. The com-      are estimated to remain at the previous year’s
increasingly important market areas for                pany believes the treatment of its withholding    level or to decrease slightly, which may lead
Comptel. The company is operating in several           taxation will be changed also concerning the      to a negative operating result.
countries where the political and social situ-         countries where the issue is still unsolved.
ation is unstable. Deterioration of the situation           The risks and uncertainties of Comptel       Board of Directors’ proposal
in these areas may hinder Comptel’s business           is described more in detail in attachment 26      for the disposal of profits
and undermine its profitability. The value of          of the financial statements.                      The Group parent company’s distribut-
a single delivery project can well be several                                                            able equity on 31 December 2009 was EUR
million euros. Thus a single delivery project          Outlook for 2010                                  29,167,506.81 (35,326,977.62).
or customer may involve a significant risk.            The weakening of operations support system            The Board of Directors proposes to the
     Comptel operates globally so it is exposed        markets has halted according to our view,         General Meeting that a dividend of EUR
to risks arising from different currency posi-         and the situation is stable. There are no clear   0.03 (0.04) per share be paid, totalling EUR
tions. Exchange rate changes between the               signs yet of sustained market recovery, but we    3,197,119.68 (4,278,486.24).
Euro, which is the company’s reporting cur-            anticipate a cautious growth to begin during
rency, and the US Dollar, UK Pound Sterling            the second half of the year.




                                                                 Helsinki, 8 February 2010

                                                                        Olli Riikkala

Timo Kotilainen                                Juhani Lassila                                   Hannu Vaajoensuu                      Petteri Walldén

                                                                        Sami Erviö
                                                                    President and CEO




COMPTEL Annual Report | Report of the Board of Directors                                                                                                11
Consolidated Statement of
Comprehensive Income
EUR 1,000                                                                      Notes       1 Jan - 31 Dec 2009        1 Jan - 31 Dec 2008
Net sales                                                                            2                    74,896                      84,849

Other operating income                                                               5                        102                          81

Materials and services                                                               6                    -5,828                      -6,906
Employee benefits                                                                    7                   -38,231                     -38,930
Depreciation, amortisation and impairment charges                                    8                    -5,654                      -4,881
Other operating expenses                                                             9                   -24,268                     -22,830
                                                                                                         -73,980                     -73,547

Operating­profit/loss                                                                                      1,018                      11,383

Financial income                                                                   11                       1,156                      1,992
Financial expenses                                                                 11                      -1,825                     -2,913
Share of result of associated companies                                                                        40                        136

Profit/loss­before­income­taxes                                                                               388                     10,597

Income taxes                                                                       12                      -2,526                     -3,972

Profit/loss­for­the­period                                                                                -2,138                       6,625

Other comprehensive income

Cash flow hedges                                                                                             -176                          9
Translation differences                                                                                       743                     -1,683
Income tax relating to components of other comprehensive income                    12                          46                         -2

Total­comprehensive­income­for­the­period                                                                 -1,525                       4,948

Profit/loss attributable to:
  Equity holders of the parent company                                                                     -2,138                      6,625
  Minority interests                                                                                            -                          -

Total comprehensive income attributable to:
  Equity holders of the parent company                                                                     -1,525                      4,948
  Minority interests                                                                                            -                          -

Shareholders of the parent company:                                                13
Earnings per share, EUR                                                                                     -0.02                        0.06
Earnings per share, diluted, EUR                                                                            -0.02                        0.06




12                                                                COMPTEL Financial Statements | Consolidated Statement of Comprehensive Income
Consolidated Statement of
Financial Position
EUR 1,000                                                                     Notes   31 Dec 2009   31 Dec 2008
ASSETS
Non-current assets
Goodwill                                                                        15         19,355        19,027
Other intangible assets                                                         15         11,806        11,978
Tangible assets                                                                 14          1,589         2,595
Investments in associates                                                       16            689           649
Available-for-sale financial assets                                                            87            87
Deferred tax assets                                                             17          1,243         1,153
Other non-current receivables                                                                 346           244
                                                                                           35,116        35,734

Current assets
Trade and other receivables                                                     18         38,668        39,101
Current tax assets                                                                          2,093         2,005
 Cash and cash equivalents                                                      19          6,730         6,135
                                                                                           47,491        47,241

 TOTAL­ASSETS                                                                              82,607        82,975

 EQUITY­AND­LIABILITIES
 Equity attributable to equity holders of the parent company
 Share capital                                                                  20          2,141         2,141
 Fund of invested non-restricted equity                                         20          7,499         7,433
 Translation difference                                                         20         -1,757        -2,500
 Retained earnings                                                                         38,416        44,502
                                                                                           46,299        51,576

 Total­equity                                                                              46,299        51,576

 Non-current liabilities
 Deferred tax liabilities                                                       17          5,458         4,902
 Provisions                                                                     23          2,541         2,937
 Non-current financial liabilities                                              24              1            12
                                                                                            8,000         7,851

 Current liabilities
 Trade and other current liabilities                                            25         20,117        18,331
 Current tax liabilities                                                                      179           176
 Current financial liabilities                                                  24          8,012         5,040
                                                                                           28,308        23,548

 Total­liabilities                                                                         36,308        31,399

 TOTAL­EQUITY­AND­LIABILITIES                                                              82,607        82,975




COMPTEL Financial Statements | Consolidated Statement of Financial Position                                  13
Consolidated Statement of
Cash Flows
EUR 1,000                                                            Notes       1 Jan - 31 Dec 2009         1 Jan - 31 Dec 2008
Cash­flows­from­operating­activities
Profit/loss for the period                                                                       -2,138                       6,625
Adjustments:
  Non-cash transactions or items that are not part of cash flows
  from operating activities                                              27                       6,840                       6,596
   Interest and other financial expenses                                                            336                         159
   Interest income                                                                                  -64                        -274
   Income taxes                                                                                   2,526                       3,972
Change in working capital:
   Change in trade and other receivables                                                            273                       1,277
   Change in trade and other current liabilities                                                  1,648                      -4,713
   Change in provisions                                                                            -396                        -511
Interest paid                                                                                      -315                        -157
Interest received                                                                                   108                         262
Income taxes paid                                                                                -2,517                      -5,345
Net cash from operating activities                                                                6,301                       7,893

Cash­flows­from­investing­activities
Acquisition of subsidiaries, net of cash acquired                                                     -                      -9,333
Purchase price adjustments                                                                          268                           -
Investments in tangible assets                                                                     -458                      -1,273
Investments in intangible assets                                                                   -228                         -93
Investments in development projects                                                              -3,906                      -4,566
Proceeds from sale of tangible and intangible assets                                                341                           -
Loans granted                                                                                       -75                           -
Change in receivables                                                                                 5                           -
Net cash used in investing activities                                                            -4,053                    -15,265

Cash­flows­from­financing­activities
Dividends paid                                                                                   -4,278                      -6,415
Acquisition of Corporation's own shares                                                            -295                           -
Proceeds from borrowings                                                                          8,000                       8,000
Repayment of borrowings                                                                          -5,000                      -3,000
Change in other non-current liabilities                                                             -11                         -35
Net­cash­used­in­financing­activities                                                            -1,585                      -1,450

Net change in cash and cash equivalents                                                             663                      -8,822

Cash and cash equivalents at the beginning of the period                 19                       6,135                      14,708
Effects of changes in foreign exchange rates                                                         68                        -249
Cash and cash equivalents at the end of the period                       19                       6,730                       6,135
                                                                                                    663                      -8,822




14                                                                 COMPTEL Financial Statements | Consolidated Statement of Cash Flows
Consolidated Statement of
Changes in Equity
                                                           Equity attributable to equity holders                                  Minority   Equity
                                                                  of the parent company                                           interest    Total
                                                  Share        Other Translation Fair value        Treasury   Retained
EUR 1,000                                        capital     reserves differences reserve            shares   earnings    Total
Equity at 31 Dec 2007                             2,141         7,368         -817          78        -427     43,686    52,031       116    52,147
Dividends                                                                                                      -6,415    -6,415              -6,415
Transfer of treasury shares                                        65                                  302       -302        65                  65
Share-based compensation                                                                                          947       947                 947
Change in group structure1)                                                                                                          -116      -116
Total comprehensive income
for the period                                                               -1,683          6                  6,625     4,948               4,948
Equity at 31 Dec 2008                             2,141         7,433        -2,500         85        -125     44,541    51,576          -   51,576
Dividends                                                                                                      -4,278    -4,278              -4,278
Acquisition of Corporation's
own shares                                                                                            -336                 -336                -336
Transfer of treasury shares                                        67                                  174       -174        67                  67
Share-based compensation                                                                                          797       797                 797
Total comprehensive income                                                                                                                        -
for the period                                                                 743        -130                  -2,138   -1,525               1,525
Equity at 31 Dec 2009                             2,141         7,499        -1,757        -45        -287     38,748    46,299          -   46,299

1)
     The shares of Business Tools Oy transferred under Comptel Corporation’s direct holding and liquidation of Probatus Oy




COMPTEL Financial Statements | Consolidated Statement of Changes in Equity                                                                       15
Notes to the Consolidated Financial
Statements
1.­Accounting­principles­for­the­consolidated­                                  Amendments to IFRS 2 Sharebased Payment - Vesting Conditions
financial­statements                                                       and Cancellations. The amended standard requires all non-vesting
Company profile                                                            conditions to be taken into account when determining the fair value
Comptel Corporation is a Finnish public limited liability company          of the equity instruments granted. The amended standard also clarifies
organised under the laws of Finland. Founded in 1986, Comptel              the accounting treatment of cancellations. The amendment has not
Corporation is one of the leading providers of productised telecom         had any impact on the financial statements of Comptel.
software in convergent fulfillment, mediation and charging.                     Amendments to IFRS 7 Financial Instruments: Disclosures –
    Comptel Corporation is listed on NASDAQ OMX Helsinki                   Improving Disclosures about Financial Instruments. The changes were
(CTL1V). The parent company of the Comptel Group, Comptel                  implemented as a result of the international financial crisis in March
Corporation, is domiciled in Helsinki and its registered address is        2009. A three level hierarchy was introduced to disclose the fair values
Salmisaarenaukio 1, 00180 Helsinki.                                        of financial instruments. The amended standard also requires that
    A copy of the consolidated financial statements can be obtained        additional information is presented to facilitate the estimation of the
either from Comptel’s website (www.comptel.com) or from the parent         reliability of the fair values of financial instruments. The amendments
company’s head office, the address of which is mentioned above.            also clarify and expand earlier requirements in presenting information
                                                                           on liquidity risk. These changes have increased the scope of disclosures
Basis of preparation                                                       required to be presented in the financial statements.
Comptel’s consolidated financial statements have been prepared                  Improvements to IFRSs (Annual Improvements, May 2008). Under
in accordance with the International Financial Reporting Standards         this procedure minor and non-urgent amendments are grouped
(IFRS) in force as at 31 December 2009 including the IAS and IFRS          together and carried out through a single document annually. The
standards as well as the SIC and IFRIC interpretations. IFRSs referred     related amendments deal with 34 standards. The amendments have
to in the Finnish Accounting Act and in ordinances issued based on         not had a significant impact on the consolidated financial statements.
the provisions of this Act, refer to the standards and their inter-             Amended IAS 23 Borrowing Costs. The renewed standard stipu-
pretations adopted in accordance with the procedure laid down in           lates that borrowing costs that are directly attributable to the acquisi-
regulation (EC) No 1606/2002 of the EU. The notes to the consolidated      tion, construction or production of a qualifying asset, like production
financial statements also conform to the Finnish accounting and            plant, form part of the cost of that asset and should be capitalised. The
company legislation.                                                       amendment did not have impact on Comptel’s financial statements.
     The consolidated financial statements are prepared under the               Amendments to IAS 1 Presentation of Financial Statements and
historical cost convention except for available-for-sale assets, deriva-   IAS 32 Financial Instruments: Recognition and Measurement – Puttable
tive financial instruments and hedged items under fair value hedging.      Financial Instruments and Obligations Arising on Liquidation. The
Share-based payments are recognised at fair value at the grant date.       fundamental principle of the standard is that certain types of puttable
     All financial information presented in euro has been rounded          equity instruments should be classified as equity instead of financial
to the nearest thousand and consequently the sum of the individual         liability as previously. The amendments did not have impact on
figures can deviate from the sum figure.                                   Comptel’s financial statements.
     Comptel first adopted the IFRS in 2005 and applied IFRS 1                  Amendments to IFRIC 9 Reassessment of Embedded Derivatives
First-time adoption of IFRS in the transition. The transition date         and IAS 39 Financial Instruments: Recognition and Measurement –
was 1 January 2004.                                                        Embedded derivatives. The changes in the standard aim at clarifying
     On 1 January 2009 the Group adopted the following new and             the impact of a financial asset being transferred away from financial
amended standards and interpretations endorsed by the EU and that          assets recognised at a fair value. In case of an embedded derivative
are applicable to Comptel:                                                 being reclassified then all embedded derivatives must be reassessed
     IAS 1 Presentation of Financial Statements (revised 2007). The        and may be treated as separate items in the financial statements. This
amendments have mainly changed the presentation format of the              interpretation did not have impact on Comptel’s financial statements.
income statement and the statement of changes in equity. Further-               IFRIC 16 Hedges of a Net Investment in a Foreign Operation. The
more, the revised standard has extensively changed the terminology         interpretation clarifies the treatment of hedged net investment in
used also in other standards, and the names of some of the financial       a foreign operation. IFRIC 16 did not have impact on Comptel’s finan-
statements have changed, too. The calculation principle of earnings        cial statements.
per share ratio has not changed.                                                The preparation of financial statements in conformity with IFRS
     IFRS 8 Operating Segments. The standard defines that operating        requires management to make estimates as well as use judgement
segments information must be based on the reporting available to           when applying accounting principles. Actual results may differ from
executive management and accounting principles applied therein.            these estimates. The chapter “Accounting policies requiring manage-
IFRS 8 has not changed the reportable segments of Comptel Group.           ment’s judgement and key sources of estimation uncertainty” discusses




16                                                                             COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
judgements made by management when applying the accounting                      payments on behalf of the associate. The Group’s proportionate share
principles adopted by the Group and those financial statement items             of associates’ profit for the period is presented as a separate line item
on which judgements have the most significant effect.                           in the consolidated statement of comprehensive income.

Principles of consolidation                                                     Foreign currency transactions
The consolidated financial statements incorporate the financial state-          The result and financial position of a Group entity are measured us-
ments of the parent company Comptel Corporation and all those                   ing the currency of the primary economic environment in which the
subsidiaries in which it has, directly or indirectly, control (together         entity operates (functional currency). The consolidated financial state-
referred to as “Group” or “Comptel”). Associates included in the                ments are presented in euro, which is the functional and presentation
consolidated financial statements are those entities in which the parent        currency of the parent company.
company Comptel Corporation has, directly or indirectly, significant                 Transactions in foreign currencies are translated at the exchange
influence, but not control, over the financial and operating policies.          rates prevailing on the dates of the transactions. Foreign currency
                                                                                monetary balances are translated at the exchange rate at the end of
Subsidiaries                                                                    reporting period. Non-monetary items measured at fair value in a for-
Subsidiaries are entities controlled by Comptel. Control means that             eign currency are translated at the exchange rate at the end of reporting
the Group has the power to govern the financial and operating policies          period. Gains and losses resulting from transactions in foreign curren-
of an entity so as to obtain benefits from its activities. Control exists,      cies and translation of monetary items are recognised in profit or loss.
among other, when the voting rights attached to the shares owned by
Comptel amount to 50 per cent or more of the total voting rights. In            Financial statements of foreign subsidiaries
assessing control, potential voting rights that presently are exercisable       Statements of comprehensive income and cash flows of foreign
or convertible are taken into account.                                          subsidiaries are translated into euro at the average exchange rate
     Acquisitions of subsidiaries are accounted for using the purchase          during the financial period. Their statements of financial position are
method of accounting. The subsidiaries acquired have been consoli-              translated using the exchange rate at the end of reporting period. The
dated from the date of acquisition, when control commenced. The                 translation differences arising from the translation of the profit for the
subsidiaries disposed of are included in the consolidated financial             period by using the average and closing rates are recognised in other
statements until the control ceases.                                            comprehensive income and presented as a separate item in equity. The
     All inter-company income and expenses, receivables, liabilities            translation differences arising from the use of the purchase method
and unrealised profits arising from inter-company transactions, as well         and after the date of acquisition as well as the result of the hedge of a
as distribution of profits within the Group are eliminated as part of           net investment in a foreign operation are recognised in other compre-
the consolidation process. Unrealised losses are eliminated only to the         hensive income and presented within equity. If a subsidiary is disposed
extent that there is no evidence of impairment.                                 of, related cumulative translation differences deferred in equity are
     The allocation of the profit for the period attributable to equity         recognised in profit or loss as part of the gain or loss on sale. From the
holders of the parent company and minority interest is presented on             transition date onwards translation differences arising on the consoli-
the face of the statement of comprehensive income. The minority                 dation are presented as a separate component of equity.
interests are identified separately from the Group’s equity therein.                 Goodwill and fair value adjustments to assets and liabilities that
                                                                                arose on an acquisition of a foreign entity occurred prior to 1 January
Associates                                                                      2004 are translated into euro using the rate that prevailed on the date
Associates are those entities in which Comptel has significant influ-           of the acquisition. Goodwill and fair value adjustments arisen on an
ence. Significant influence generally arises when Comptel holds voting          acquisition after 1 January 2004 are treated as part of the assets and
rights less than 50 per cent but over 20 per cent or when the Group             liabilities of the acquired entity and are translated at the closing rate.
otherwise has significant influence over the financial and operating
policies, but not control. Holdings in associates are incorporated in           Tangible assets
these financial statements using the equity method from the date that           Tangible assets are measured at historical cost less cumulative depre-
significant influence commences until the date that significant influ-          ciation and any impairment losses. Where parts of an item of tangible
ence ceases. In respect of associates, the carrying amount of goodwill          assets have different economic useful lives, they are accounted for as
is included in the carrying amount of the investment in the associ-             separate items of tangible assets. Depreciation is recognised in profit or
ate. When Comptel’s share in an associate’s losses exceeds its interest         loss on a straight-line basis over the estimated useful lives of each part
in the associate, the Group’s carrying amount is reduced to nil and             of an item of tangible assets. The depreciation period for machinery
recognition of further losses is discontinued except to the extent that         and equipment is four years.
the Group has incurred obligations in respect of the associate or made               Maintenance, repairs and renewals are generally expensed during




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                           17
the period in which they are incurred except for substantial renova-          a straight-line basis over their useful lives. Amortisation is calculated
tion expenditure relating to leased premises that are capitalised under       based on the original cost and allocated over the useful life.
tangible assets. Such costs are depreciated over the shorter of five years         The capitalised patent costs are generally amortised over ten years
and the lease term.                                                           and licenses over four years.
     Residual values of tangible assets and expected useful lives are              The expected amortisation periods are reviewed at each report-
reassessed at each reporting date and where necessary are adjusted to         ing date and if they differ from previous estimates, the amortisation
reflect the changes in the expected future economic benefits.                 period is changed accordingly.
     Tangible assets classified as held for sale in accordance with IFRS 5         Identifiable intangible assets acquired on a business combination
Non-current Assets Held for Sale and Discontinued Operations are not          are measured at fair value. Such intangible assets relate for example to
depreciated after the classification as held for sale.                        client relationships and technologies received in an asset acquisition
     Gains and losses on sales and disposals of tangible assets are in-       and they are amortised over three to five years.
cluded in operating income and in operating expenses, respectively.
     According to IAS 23 borrowing costs that are directly attributable       Leases
to the acquisition, construction or production of a qualifying asset are      Comptel as lessee
to be capitalised.                                                            IAS 17 Leases divides leases into finance and operating leases. Leases
                                                                              are classified as finance leases whenever the terms of the lease transfer
Intangible assets                                                             substantially all the typical risks and rewards of ownership to the
Goodwill                                                                      lessee. At the commencement of the lease term an asset acquired under
After 1 January 2004 goodwill represents the Group’s share of difference      a finance lease is recognised in the statement of financial position at
between the cost of the acquisition and the fair value of the net identifi-   an amount equal to the lower of its fair value and the present value
able assets, liabilities and contingent liabilities acquired measured at      of the minimum lease payments. An asset acquired under a finance
the acquisition date. Goodwill arisen from the business combinations          lease is depreciated over the shorter of the lease term and its useful life.
occurred prior to the IFRS transition date has been accounted for in          Lease payments are apportioned between the finance charge and the
accordance with FAS and has been taken as a deemed cost.                      reduction of the outstanding lease liability so as to achieve a constant
    In accordance with IAS 36 Impairment of Assets goodwill is not            periodic rate of interest on the liability balance outstanding. Lease
amortised but tested for impairment annually. Goodwill is stated at           liabilities are included in financial liabilities. If the lease does not meet
cost less any cumulative impairment losses.                                   the requirements of a finance lease, it is always classified as an oper-
                                                                              ating lease. In such a case the lessee has the right to use the asset for
Research and development costs                                                a limited time and the risks and rewards incidental to ownership are
In accordance with IAS 38 Intangible Assets expenditure on research           not transferred to the lessee.
activities is recognised as an expense in the period in which it is in-            The leases of Comptel are mainly treated as operating leases.
curred. Development costs that arise from design of new or improved           Payments made thereunder are recognised in profit or loss as rental
products are capitalised as intangible assets in the statement of finan-      expenses on a straight-line basis over the lease term.
cial position when the product is technically and commercially feasible
and it will generate future economic benefits. Amortisation of such an        Impairment
asset is commenced when it is available for use. Unfinished assets are        Tangible and intangible assets
tested annually for impairment.                                               Comptel assesses at each reporting date whether there is any indica-
     Comptel capitalises development costs and costs related to inter-        tion of impairment of assets. If there are such indications, the asset’s
nal system projects meeting the requirements under IAS 38. As from            recoverable amount is estimated. In addition, the recoverable amount
1 January 2008 cost also includes an appropriate share of separately          is estimated annually for the following assets regardless of there being
determined overheads relating to the project in question. Capitalised         any indications of impairment: goodwill and unfinished intangible
development costs are amortised on a straight-line basis over three           assets. The need for impairment is reviewed at the level of cash-
years and the costs related to internal system projects over four years.      generating units which is the lowest level for which there are separately
     Government grants that compensate the Group for the develop-             identifiable, mainly independent cash flows.
ment costs are either deducted from the carrying amount of the asset               The recoverable amount is the higher of an asset’s fair value less
or from the related expenses in profit or loss.                               costs to sell and its value in use. The value in use represents the dis-
                                                                              counted future net cash flows expected to be derived from an asset or
Other intangible assets                                                       a cash-generating unit. The discount rate used is the pre-tax rate that
Patents and licenses acquired as well as costs incurred from patent           reflects the market’s view on the time value of money and the specific
applications with a finite useful life are capitalised and amortised on       risks related to the asset.




18                                                                                COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
     An impairment loss is recognised if the carrying amount of an              incentive programs are recognised as employee benefit expenses over
asset or a cash-generating unit is higher than the recoverable amount.          the vesting period.
Impairment losses are recognised in profit or loss. If an impairment
loss is allocated to a cash-generating unit, it is first allocated to           Provisions
decrease the goodwill allocated to this cash-generating unit and sub-           IAS 37 Provisions, Contingent Liabilities and Contingent Assets pre-
sequently to decrease pro-rata other assets of the cash-generating unit.        scribes the recognition criteria for a provision. A provision is based on
An impairment loss is reversed if there are any indications that the            an existing obligation and it is recognised in the statement of financial
conditions and the recoverable amount have changed since the impair-            position when an entity has a present obligation (legal or constructive)
ment loss was recognised. An impairment loss is reversed only to the            as a result of a past event, it is probable that an outflow of economic
extent that the asset’s carrying amount does not exceed the carrying            benefits will be required to settle the obligation and a reliable estimate
amount that would have been determined if no impairment loss had                can be made of the amount of the obligation.
been recognised. An impairment loss recognised for goodwill is never                 A warranty provision is recognised when a product that embodies
reversed.                                                                       a warranty is sold or delivered. The amount of the warranty provision
                                                                                is based on experience-based information about the materialisation of
Pension obligations                                                             warranty costs.
Under IAS 19 Employee Benefits pension plans are classified as either                A restructuring provision is recognised when Comptel has pre-
defined contribution plans or defined benefit plans based on the com-           pared a detailed plan for restructuring, commenced the implementa-
pany’s obligations. In a defined contribution plan the company pays             tion of the plan and announced about the plan. A restructuring plan
fixed contributions to a separate entity and has no further obligations.        includes at least the following information: the business concerned,
The pension plans of Comptel are arranged in accordance with the                the principal locations affected, the location, function and approxi-
local legislation. Contributions of the defined contribution plans based        mate number of employees who will be compensated for terminating
on the regularly reviewed actuarial calculations prepared by the local          their services, the expenditures that will be undertaken and when the
pension insurance companies are recognised as an expense in profit              plan will be implemented. No provision is recognised for the expendi-
or loss in the year to which they relate. Other plans are classified as         ture arising from the Group’s continuing operations.
defined benefit plans.                                                               A provision is recognised when the expected economic benefits to
     In a defined benefit plan the liability to be recognised in the state-     be derived by the Group from a contract are lower than the unavoid-
ment of financial position is the net amount of the net present value of        able cost of meeting its obligations under the contract.
the pension obligation and the plan assets measured at fair value at the
year-end, adjusted with both unrecognised actuarial gains and losses            Income taxes
as well as with unrecognised past service cost. The calculation for             The income taxes in the consolidated statement of comprehensive
pension obligations is carried out by qualified actuaries. The amount           income consist of current tax and the change in the deferred tax assets
of the obligation is based on the projected unit credit method. Pension         and liabilities. Current tax is calculated on the taxable profit for the
expenses are recognised in profit or loss over the expected working             period determined in accordance with local tax rules and is adjusted
lives of the employees participating in the plan.                               with the tax for previous years. The deferred tax amount attributable
                                                                                to other comprehensive income or equity is reflected in other compre-
Share-based payments                                                            hensive income or equity, accordingly.
Comptel has several option schemes and they are paid out as equity                   Deferred tax assets and liabilities are provided using the statement
instruments. Equity-settled share-based schemes are measured at fair            of financial position liability method, providing for temporary differ-
value at the grant date and expensed in profit or loss on a straight-line       ences between the carrying amounts of assets and liabilities for finan-
basis over the vesting period. The expense determined at the grant              cial reporting purposes and the amounts used for taxation purposes.
date is based on the Group’s estimate on the number of those options            The enacted or substantially enacted tax rate at the reporting date is
that eventually vest at the end of the vesting period. The fair value is        used as the tax rate. In Comptel the main temporary differences arise
determined using the Black-Scholes option pricing model.                        from the depreciation of tangible assets not deducted in taxation, the
     Comptel has also share-based incentive programs. The share-                fair value measurement of derivatives, capitalisation of development
based incentive programs provide the key personnel of the Comptel               costs and the reversal of goodwill amortisation on Group level.
Group with a possibility to receive shares of the company as compen-                 Deferred tax liabilities are recognised at their full amounts in the
sation. The compensation paid based on the share-based incentive                statement of financial position, and deferred tax assets are recognised
programs is paid as a combination of company shares and cash after              to the extent that it is probable that taxable profit will be available
the vesting period has expired. Costs incurred from the share-based             against which the deductible temporary difference can be utilised.




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                          19
Revenue recognition and net sales                                             The options and warrants have a dilutive effect only if the average
Revenue from the sale of goods is recognised when significant risks           share market price during the period is higher than the subscription
and rewards of ownership have been transferred to the buyer. Revenue          price of an option and a warrant.
from services is recognised when the service has been performed.
License revenue that includes no work performance is recognised               Financial assets and liabilities
when the license is delivered. The number of subscribers at a client is       Financial assets
reviewed continuously. If their number exceeds the number agreed on           In accordance with IAS 39 Financial Instruments: Recognition and
in the terms of the license, the client can be charged for the increased      Measurement the financial assets of the Group are classified to follow-
number of subscribers. This license upgrade revenue is recognised             ing groups: financial assets at fair value through profit or loss, held-
upon invoicing. Maintenance revenue is recognised as income on                to-maturity investments, loans and receivables and available-for-sale
a straight-line basis over the maintenance term.                              financial assets. Classification is based on the nature of the item and
                                                                              it is made at initial recognition.
Long-term projects                                                                  An item is classified as financial asset at fair value through profit
Revenue and expenses from long-term projects are recognised using             or loss when it is held for trading or classified at initial recognition
the percentage-of-completion method, when the outcome of a long-              as financial asset at fair value through profit or loss. The latter group
term project can be estimated reliably. The revenue from a long-term          comprises such investments that are managed based on their fair value
project comprises license income and work. The outcome of a long-             or an investment which contains one or more embedded derivative
term project can be estimated reliably when the revenue and expenses          which changes the cash flows of the contract significantly in which
expected as well as the progress made towards completing a particular         case the entire compound instrument is measured at fair value. Financial
project can be measured reliably and when it is probable that the             assets held for trading have been mainly acquired to generate profits
economic benefits associated with the project will flow to the Group.         from short-term changes in market prices. Derivative instruments
In Comptel the degree of completion of a long-term project is deter-          which do not meet the criteria for hedge accounting defined in IAS 39
mined by the relation of accrued work hours to estimated overall work         have been classified as held for trading. Derivatives held for trading
hours. If it is probable that total project costs will exceed total project   as well as financial assets maturing within 12 months are included in
revenue, the expected loss is recognised as an expense immediately.           current assets. These assets have been measured at fair value. Unrealised
     Net sales is adjusted for discounts granted, sales-related indirect      and realised gains and losses arisen from fair value measurement are
taxes and effects of the translation differences arisen on the translation    recognised in profit or loss in the period in which they occur.
of the trade receivables denominated in foreign currencies.                         Held-to-maturity investments are non-derivative financial assets
     A separate warranty provision is recognised to cover costs under         with fixed or determinable payments and fixed maturity that the
warranty periods following the completion of the projects. The total          Group has the positive intention and ability to hold to maturity. Held-
estimated margin of onerous projects is recognised as an expense and          to-maturity investments are measured at amortised cost and they are
a provision.                                                                  included in non-current assets. Comptel had no such financial assets
                                                                              during the financial year ended 31 December 2009.
Earnings per share                                                                  Loans and receivables are non-derivative financial assets with fixed
The calculation of earnings per share is based on the profit attribut-        or determinable payments that are not quoted in an active market. The
able to ordinary shareholders that is divided by the weighted average         Group does not hold them for trading purposes either. They are in-
number of ordinary shares outstanding during the year. Treasury               cluded in current assets, except for maturities greater than 12 months
shares owned by the Group are excluded when calculating the                   after the reporting date. Trade receivables are recognised based on the
weighted average number of ordinary shares. For the purpose of cal-           original amount charged from a client less any impairment losses.
culating diluted earnings per share using the treasury stock method,                Available-for-sale financial assets are non-derivative financial assets
the Group assumes the following: the exercise of dilutive warrants and        that are either designated in this category or not classified in any of the
options occurred at the beginning of the financial period, the exercise       other categories. They are included in non-current assets unless man-
of dilutive warrants and options granted during the period followed at        agement intends to dispose of the investment within 12 months of the
their grant date and the proceeds from their exercise was spent by ac-        reporting date, in which case they are classified as current. Available-
quiring treasury shares at the average market price during the period.        for-sale financial assets may include shares (equity securities) and
The denominator includes the weighted average number of ordinary              interest-bearing investments. They are measured at fair value, or when
shares and the shares to be issued following the exercise of warrants         the fair value can not be reliably determined, at cost.
and options.
    The assumptions of the exercise of options is excluded when cal-          Cash and cash equivalents
culating diluted earnings per share if the exercise price of the warrants     Cash and cash equivalents comprise cash in hand, deposits held at
and options exceeds the average share market price during the period.         call with banks and other short-term, highly liquid investments with




20                                                                                COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
original maturities of three months or less. Any bank overdrafts are            nated in foreign currency are adjusted against sales revenues. If the
included within current liabilities.                                            hedged forecast transaction subsequently results in the recognition
                                                                                of a non-financial asset, the associated gains and losses are removed
Financial liabilities                                                           from equity and are included in the cost of the asset. When a hedging
Financial liabilities are initially recognised at fair value, net of trans-     instrument designated as a cash flow hedge expires or is sold or the
action costs. Subsequently financial liabilities are measured at amor-          hedge no longer meets the criteria for hedge accounting, the cumula-
tised cost using the effective interest rate method. Financial liabilities      tive gain or loss on the hedging instrument remains in equity until the
are both non-current and current. A financial liability is classified as        forecast transaction occurs. However, if the forecast transaction is no
current when the Group does not have an unconditional right to defer            longer expected to occur, any related cumulative gain or loss in equity
settlement of the liability for at least 12 months after the reporting          is recognised immediately in profit or loss.
date. Borrowing costs are recognised in profit or loss as incurred. Fees
paid on the establishment of loan facilities are recorded as transaction        Dividends
costs of the loan to the extent that it is probable that some or all of the     The dividend proposed by the board of directors is not recognised
facility will be drawn down. In this case, the fee is deferred until the        until approved by a general meeting of shareholders.
draw-down occurs. When the draw-down occurs, the fees paid on the
establishment of loan facilities are recognised as part of transaction          Accounting policies requiring management’s judgment
costs. To the extent it is probable that some or all of the facility will       and key sources of estimation uncertainty
not be drawn down, the fee is capitalised as a pre-payment for liquid-          The preparation of financial statements calls for the management to
ity services and amortised over the period of the facility to which it          make future-related estimates and assumptions which may differ from
relates.                                                                        the actual results. In addition, judgment is required when applying
                                                                                accounting principles. The estimates are based on management’s best
Derivative financial instruments and hedge accounting                           view at the reporting date. Possible changes in estimates and assump-
Derivatives are initially recognised in the statement of financial              tions are recognised in that period when an assumption or estimate
position at cost, equivalent to their fair value and are subsequently           is corrected as well as in all subsequent periods.
measured to fair value. Gains and losses arising from the fair value                 In Comptel those key assumptions concerning the future and
measurement are accounted for in accordance with the purpose of the             those key sources of estimation uncertainty at reporting date that
derivative in the financial statements. Those derivatives that are used         have a significant risk of causing a material adjustment to the carrying
for hedging purposes and are effective hedges are presented consist-            amounts of assets and liabilities within the next financial year are the
ently with the hedged item in profit or loss. When Comptel enters into          following:
a derivative contract, it is accounted for either as a fair value hedge of
assets, liabilities or a firm commitment or, in respect of currency risk        Impairment testing
as a cash flow hedge, a hedge of a highly probable forecast transaction         Goodwill, patenting costs and development costs capitalised under
or as a derivative that does not meet the conditions of hedge account-          unfinished intangible assets are tested annually for impairment. Assets
ing under IAS 39.                                                               are reviewed for impairment in accordance with the principles set out
     At the inception of a hedge relationship, Comptel formally des-            above. Estimates are required in preparing these calculations.
ignates and documents the hedge relationship as well as the Group’s                  Additional information about the sensitivity of the recoverable
risk management objective and strategy for undertaking the hedge.               amount to changes in the assumptions used is presented in note 15.
Comptel documents and assesses, at the inception of a hedge relation-           Intangible assets.
ship and at least at each reporting date, the hedging instrument’s
effectiveness in offsetting the exposure to changes in the hedged item’s        Revenue recognition
fair value or cash flows attributable to the hedged risk. The changes in        As described above under the heading Revenue recognition principles
the fair values of those derivatives meeting the criteria of a fair value       revenue and expenses from long-term projects are recognised using
hedge are recognised in profit or loss together with the fair value             the percentage of completion method when the outcome of a long-
changes of the hedged asset or liability attributable to the hedged risk.       term project can be estimated reliably. The percentage of completion
     If a derivative meets the conditions of a cash flow hedge, the             method is based on estimates of total expected project revenue and
change in the fair value of the effective portion of the hedging instru-        costs, as well as on reliable measurement of the progress made towards
ment is recognised in other comprehensive income and presented                  completing a particular project. The recognition of project revenue
in equity in the hedging reserve. The accumulated gains or losses in            and project costs in profit or loss is changed if the estimate of the
equity are reclassified into profit or loss in the same period during           outcome of a project deviates from the plan, in the period in which the
which the hedged item affects profit or loss. Those gains and losses            change is identified for the first time and it can be estimated reliably.
resulting from the instruments hedging the expected sales denomi-               An expected loss on a long-term project is recognised in profit or loss




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                         21
immediately when it is identified and can be estimated reliably. Addi-       controlling interest (minority) also when they exceed the value of the
tional information about the long-term contracts is presented in note        minority shareholders’ investment.
4. Revenue recognition using percentage of completion method.                     Amendment to IAS 39 Financial Instruments: Recognition and
                                                                             Measurement - Eligible Hedged Items (effective for financial periods
Application of new or amended standards                                      beginning on or after 1 July 2009). The amendment deals with hedge
and interpretations                                                          accounting and relate to designation of a one-sided risk in a hedged
The below described standards, interpretations or their amendments           item and designation of inflation in a financial hedged item. The
have been published but are not yet effective and Comptel has not            Group does not expect the amendment to have any significant impact
adopted them prior to the mandatory application date. Comptel will           on the consolidated financial statements in the future.
adopt the following amended or new standards and interpretations                  IFRIC 17 Distributions of Non-Cash Assets to Owners (effective for
issued by the IASB as soon as they are effective:                            financial periods beginning on or after 1 July 2009). The interpretation
     IFRS 3 Business Combinations (revised 2008; effective for financial     gives guidelines to a situation when owners receive dividends in other
periods beginning on or after 1 July 2009). The scope of the revised         forms than cash or the owners have the possibility to select whether
IFRS 3 is broader than before. In respect of Comptel several signifi-        they will receive non-cash assets or cash. The Group does not expect
cant amendments have been made to the standard. The amendments               the amendment to have any impact on the consolidated financial state-
impact the amount of goodwill to be recognised on business combina-          ments.
tions and sales results of businesses. The amendments also have an                Improvements to IFRSs (April 2009; mainly effective for financial
effect on the amounts to be recognised in profit or loss both on the         periods beginning on or after 1 January 2010). Under this procedure
financial year when the business combination is effected and in those        minor and non-urgent amendments are grouped together and carried
financial years when contingent consideration is paid or further ac-         out through a single document annually. The related amendments
quisitions are made. Under the transitional provisions of the standard       deal with 12 standards. Impacts vary by standard but the Group does
those business combinations where control is transferred prior to the        not expect the future amendments to have a significant impact on the
effective date of the revised standard are not adjusted to comply with       consolidated financial statements. The amended standards have not
the new rules.                                                               been endorsed for use in the EU.
     IAS 27 Consolidated and Separate Financial Statements (amended               IFRS 9 Financial Instruments (effective for financial periods begin-
2008; effective for financial periods beginning on or after 1 July 2009).    ning on or after 1 January 2013). IFRS 9 is the first step in replacing
If the parent company retains control, the amended standard requires         IAS 39. The standard deals with classification and valuation of finan-
impacts from changes in ownership in a subsidiary be recognised              cial assets. The standard has not been endorsed for use in the EU yet.
directly in Group’s equity. When control is lost, the remaining interest          Revised IAS 24 Related Party Disclosures (effective for financial
is measured at fair value through profit or loss. A similar accounting       periods beginning on or after 1 January 2011). The amendment relaxes
treatment will be extended to investments in associated companies            the disclosure requirements of business operations between public
(IAS 28) and interests in joint ventures (IAS 31) in the future. Resulting   enterprises and simplifies and clarifies the definition of a related party.
from the amendments losses of a subsidiary may be allocated to non-          The revised standard has not been endorsed for use in the EU yet.




22                                                                               COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
2.­ Segment­reporting

Comptel Group has four reportable segments which are based on geo-                Group. Comptel Group’s operating segment reporting is conforming
graphical areas. Comptel operates globally in all these market areas.             to IFRS standards.
Geographical market areas differ from each other in terms of price                     The assessment of the operating results and resource allocation
level, competitive position and Comptel’s own resource allocation. The            is based on the operating result of the segment in Comptel Group.
segment division is based on the geographical location of customers.              The President and CEO of Comptel Group is ultimately responsible
Geographical segments are Europe, Asia-Pacific, Middle East and                   for these decisions.
Africa and Americas. All segments generate revenue from sales of                       Total net sales from the operating segments consolidate to Group
software licenses, services and support and maintenance associated                external net sales. Segment expenses include sales and customer service
with the software licenses.                                                       expenses. Unallocated expenses relate to product management, re-
    Adoption of IFRS 8 did not change the reported operating seg-                 search and development as well as administration units. Segment assets
ments or items allocated or not allocated to the segments of Comptel              include trade receivables.



2009                                                                                                 Middle East
EUR 1,000                                                              Europe     Asia-Pacific        and Africa           Americas      Segments total
Net sales                                                              33,296          20,455             16,078               5,067             74,896
Segment share of operating result                                      15,359          11,517              8,301                 275             35,453
Depreciation and amortisation                                             671              49                 17                  15                752
Trade receivables                                                        7,228            3,023             9,188              2,733             22,172



2008                                                                                                 Middle East
EUR 1,000                                                              Europe     Asia-Pacific        and Africa           Americas      Segments total
Net sales                                                              40,768          20,861             15,279               7,941             84,849
Segment share of operating result                                      20,898           9,348              8,946               4,219             43,411
Depreciation and amortisation                                             543             331                151                  93              1,119
Trade receivables                                                      10,096           4,037              8,655               3,403             26,191



Reconciliations

Result                                                                            Assets

EUR 1,000                                                  2009           2008    EUR 1,000                                            2009        2008
Segment share of operating result                        35,453         43,411    Segment assets                                   22,172        26,191
Unallocated expenses                                    -34,436        -32,028    Unallocated assets                               60,435        56,784
Financial income and expenses                              -670           -922    Total­assets                                     82,607        82,975
Share of result of associated companies                      40            136
Group­profit/loss­before­income­taxes                       388         10,597
                                                                                  Information about products and services

Depreciation, amortisation and impairment charges                                 EUR 1,000                                            2009        2008
                                                                                  Licenses                                         19,663        27,376
EUR 1,000                                                  2009           2008    Service and maintenance                          55,233        57,473
Segment depreciation and amortisation                       752           1,119   Total                                            74,896        84,849
Unallocated depreciation, amortisation
and impairment charges                                    4,901           3,762
Total­depreciation,­amortisation­and­
impairment charges                                        5,654           4,881




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                         23
Geographical information                                                     The values of the assets and liabilities arising from
                                                                             the acquisition were as follows::
Revenues­from­external­customers                                                                                            Recognised          Pre-acquisi-
The geographical split of net sales is based on the customer domicile.                                                    fair values on      tion carrying
                                                                             EUR 1,000                                        acquisition          amounts
EUR 1,000                                            2009          2008      Technology (incl. in other intangi-
                                                                             ble assets)                                           3,001                  -
India                                               9,007         9,336
                                                                             Machinery and equipment                                 289                289
Finland                                             6,435         7,953
                                                                             Deferred tax assets                                     233                233
Norway                                              5,699         7,847
                                                                             Trade receivables and other
Saudi Arabia                                        3,523         3,406      receivables                                           4,246              4,246
Other countries                                    50,233        56,307      Cash and cash equivalents                               124                124
Total                                              74,896        84,849      Total assets                                          7,894              4,892


Non-current assets                                                           Deferred tax liabilities                                901                    -
The geographical split of non-current assets is based on the location        Other non-interest bearing
                                                                             liabilities                                           7,195              7,195
of such assets. Non-current assets are presented without deferred tax
                                                                             Interest bearing liabilities                             89                 89
assets and post-employment benefit assets.
                                                                             Total liabilities                                     8,184              7,284
EUR 1,000                                            2009          2008
                                                                             Net assets                                             -291             -2,392
Finland                                            10,813        11,462
Other countries                                     1,160         1,246
                                                                             Acquisition cost                                      9,457
Investments in associates                             689           649
                                                                             Goodwill                                              9,748
Unallocated assets                                 21,184        21,214
Total                                              33,847        34,571
                                                                             Purchase price paid in cash                           9,457
                                                                             Cash and cash equivalents in
3.­ Business­combinations­                                                   acquired subsidiary                                    -124
                                                                             Total net cash outflow on the
Acquisition in 2008                                                          acquisition                                           9,333
On 21 April 2008, Comptel Corporation acquired all the shares of
Axiom Systems Holdings Limited. UK-based Axiom Systems is spe-               During the first quarter 2009 the purchase price was adjusted to
cialised in the broadband fulfillment market.                                6.8 million UK Pound Sterling (8.6 million euro).
     The intial purchase price of 7.0 million UK Pound Sterling (8.9              The purchase price calculation has been prepared in UK Pound
million euro) was paid in cash. The actual purchase price of 8.9 million     Sterling and therefore the amount of goodwill fluctuates according
euro, costs directly attributable to the acquisition were 0.7 million euro   to the exchange rate. As at 31 December 2009 the goodwill totalled
and the fair value of allocations to the identifiable net assets was 3.0     8.5 million euro (8.2 million euro on 31 December 2008).
million euro, therefore the goodwill according to IFRS 3 was 9.7 million
euro. 3.0 million euro was allocated to intangible assets, which are
amortised over 5 years.                                                      4.­ Revenue­recognition­using­percentage­of­completion­­
     The goodwill is attributable to the synergies expected to arise sub-        method
sequent to the acquisition. The acquisition was in line with Comptel’s
long-term growth strategy to become world’s leading supplier of tele-        EUR 1,000                                                      2009      2008
com software. According to the Comptel management, the goodwill is           Net sales recognised as revenue according to
mainly based on the fact that Axiom’s solutions for IP services comple-      percentage of completion                                    13,953     20,561
ment Comptel’s product portfolio, the common sales network enables           Amount recognised as revenue during
cross-selling to Axiom’s and Comptel’s customers, and the combined           the financial year and previous years for
                                                                             long-term projects in progress                              20,382     19,348
R&D strengthens the operations. The professionally skilled workforce
is also part of the goodwill.                                                Backlog of orders of long-term projects
                                                                             according to percentage of completion                          6,905     8,219
     Axiom Group’s loss for the period 21 April to 31 December 2008,
                                                                             Prepayments and accrued income recognised
1.3 million euro, is included in the Comptel Group result for 2008.
                                                                             on the basis of percentage of completion                       7,772     4,796
Comptel Group net sales for January - December 2008 would have
                                                                             Deferred income and accruals recognised
been 87.5 million euro and profit 5.7 million euro if Axiom had been         on the basis of percentage of completion                       1,582     1,876
consolidated from the beginning of the year 2008.



24                                                                               COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
5.­ Other­operating­income                                                           8.­ Depreciation,­amortisation­and­impairment­charges

EUR 1,000                                                  2009           2008       EUR 1,000                                    2009     2008
Gains on disposal of tangible assets                           2                16   Depreciation and amortisation
Indemnity                                                     70                 -   by asset type
                                                                                     Intangible assets
Negative goodwill on consolidation
recognised as income                                           -                52      Patents and trademarks                       50       39
                                                                                        Capitalised development costs             2,629    1,521
Other income items                                            29                12
                                                                                        Other intangible assets                   1,480    1,951
Total                                                       102                 81
                                                                                     Total                                        4,160    3,511

                                                                                     Tangible assets
6.­ Materials­and­services                                                             Machinery and equipment                    1,153    1,366
                                                                                     Total                                        1,153    1,366
EUR 1,000                                                  2009           2008
Purchases during the period                               1,395           1,750      Impairment charges by asset type
External services                                         4,433           5,156        Patents and trademarks                        -        4
                                                                                       Capitalised development costs               340        -
Total                                                     5,828           6,906
                                                                                     Total                                         340        4
                                                                                     Total­depreciation,­amortisation­and­
7.­ Employee­benefits                                                                impairment charges                           5,654    4,881

EUR 1,000                                                  2009           2008       9.­ Other­operating­expenses
Wages and salaries                                       31,176         30,713
Pension expenses - defined contribution                                              EUR 1,000                                    2009     2008
plans                                                     2,925           3,677      Lease payments                               5,233    5,143
Pension expenses - defined benefit plans                     46              19      Travel expenses                              4,968    5,619
Share options granted                                       572             722      Marketing expenses                           1,890    1,160
Expenses related to share-based                                                      Expenses relating to restructuring of the
incentive program                                           208             554      acquired subsidiary                              -      550
Other social security costs                               3,303           3,245      Other operating expenses                    12,177   10,358
Total                                                    38,231         38,930       Total                                       24,268   22,830

The average number of employees in the Group during                                  The auditors’ fees
the­financial­year                                                                   EUR 1,000                                    2009     2008
                                                           2009           2008       KPMG
Europe                                                      422             467      Audit                                         108       64
Asia-Pacific                                                142             101      Statements                                      -        2
                                                                                     Tax consultation                               60       65
Middle East and Africa                                       23              17
                                                                                     Other services                                 57      205
Americas                                                     26              21
                                                                                     Total                                         226      336
Total                                                       613             606

                                                                                     Pricewaterhouse Coopers
Information on the remuneration of the Group management is pre-                      Audit                                          -16      28
sented in note 30. Related party transactions.                                       Tax consultation                                 7      32
    Information on the options granted and on the management’s                       Other services                                   0       -
share in the share-based incentive plan is presented in note 21. Share-              Total                                           -9      60
based payments.
                                                                                     Other
                                                                                     Audit                                           6        5
                                                                                     Tax consultation                                -        1
                                                                                     Total                                           6        7
                                                                                     Total­auditors'­fees                          223      402




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                 25
Audit fees include the fees of the statutory auditors of each Group         In November 2006 Comptel Corporation received a refusal from the
company. For the year 2008 Other services included acquisition-             Board of Adjustment of the Tax Office for Major Corporations con-
related services, amounting to 116 thousand euro, which has been            cerning the crediting of taxes withheld at source in taxation of 2004.
capitalised.                                                                The claim for adjustment concerns the crediting of taxes withheld
                                                                            at source the company has paid in 2004 to avoid double taxation.
10.­ Research­and­development­costs                                              Comptel Corporation recognised and paid these taxes withheld
                                                                            at source for 2004 in 2005. According to the Board of Adjustment’s
The research and development costs recognised as expenses in the            decision currently in force, Comptel Corporation has expensed taxes
statement of comprehensive income amounted to 9,186 thousand euro           withheld at source amounting to 3,186 thousand euro for the years
in 2009 (9,441 thousand euro in 2008).                                      2005-2007. Witholding taxes expensed amounted to 1,499 thousand
     The capitalised development expenditure totalled 3,906 thousand        euro in 2008 and 1,234 thousand euro in 2009. Consequently, the total
euro (4,566 thousand euro in 2008). The amortisation of the capi-           withholding taxes expensed amounted to 6,561 thousand euro as of
talised development costs amounted to 2,680 thousand euro (1,559            31 December 2009.
thousand euro in 2008). A write-down of 340 thousand euro was made               Comptel Corporation has received license revenue from the
on the capitalised development costs in 2009.                               countries with which Finland has a tax treaty. The purpose of the tax
                                                                            treaties is to avoid double taxation. Taxes have been withheld from
11.­ Financial­income­and­expenses                                          the payments made to Comptel Corporation, in accordance with the
                                                                            royalty article of the related tax treaty, in the source country of the
EUR 1,000                                           2009         2008       revenue. If the taxes withheld at source paid by Comptel Corporation
Interest income from cash and cash                                          will not be credited in Finland, the revenue from the customers lo-
equivalents                                           31              239   cated in the tax treaty countries will be subject to double taxation.
Interest income from other receivables                33               35        The Ministry has announced that it has reached an agreement
Foreign exchange gains from other                                           with Greece, Malaysia and Romania. In respect of these countries a tax
receivables and other liabilities                  1,092         1,718      receivable amounting to 635 thousand euro has been recognised based
Interest expenses from financial liabilities                                on the double tax treatment for the years 2004-2008. The refund proc-
measured at amortised cost                          -251              -82   ess pertaining to these countries is still pending with the relevant tax
Interest expenses from other liabilities              -68             -41   authorities. Comptel is pursuing the negotiations with the Ministry of
Foreign exchange losses from other                                          Finance and other countries that have withheld tax at source to avoid
receivables and other liabilities                 -1,490        -2,754      double taxation. The company believes the treatment of its withhold-
Other financial expenses                              -17             -36   ing taxation will be changed.
Total                                               -670          -922           In 2008 the current tax includes a tax credit, 573 thousand euro,
                                                                            for Axiom Systems’ research and development activities. Similar tax
                                                                            credit was not obtained in 2009.
 Other statement of comprehensive income items include
 foreign­exchange­differences­as­follows:                                   Income­tax­recognised­in­other­comprehensive­income­

EUR 1,000                                           2009         2008                                                          Tax
                                                                            2009                                       expense (-)/
Net sales                                           -291          -334      EUR 1,000                       Before tax benefit (+)             Net of tax
Materials and services                                 2            22
                                                                            Cash flow hedges                       -176                46             -130
                                                                            Translation differences                 743                 -              743
12.­ Income­taxes                                                           Total                                   567                46              613

EUR 1,000                                           2009         2008                                                          Tax
Current tax expense                                  449         1,656      2008                                       expense (-)/
                                                                            EUR 1,000                       Before tax benefit (+)             Net of tax
Adjustments for previous years' taxes                252           178
Deferred taxes                                       545         1,328      Cash flow hedges                          9                 -2               6
Withholding taxes                                  1,280           810      Translation differences              -1,683                  -          -1,683
Total                                              2,526         3,972      Total                                -1,675                 -2          -1,677




26                                                                              COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
Reconciliation­between­the­income­tax­expense­recognised­in­                                                                      2009            2008
the­statement­of­comprehensive­income­and­the­taxes­calcu-                          Profit/loss for the year attributable
lated­using­the­Group’s­domestic­corporate­tax­rate­26%:­                           to equity holders of the parent
                                                                                    (EUR 1,000)                                  -2,138           6,625
                                                                                    Weighted average number of
EUR 1,000                                                  2009           2008      shares for calculation of diluted
Profit before taxes                                         388         10,597      earnings per share                      107,078,252     106,938,539
Income tax calculated using the                                                     Diluted earnings per share (euro)             -0.02            0.06
domestic corporation tax rate                               101           2,755
Effect of tax rates in foreign jurisdictions                -41             -38
Non-deductible expenses                                     143             113     14.­Tangible­assets
Options and share-based payments                            188             228
Share of profit / loss of associates                        -10             -35                                                           Machinery and
Withholding taxes                                         1,280             810     EUR 1,000                                                equipment
Current year losses for which no                                                    Cost at 1 Jan 2009                                            8,794
deferred tax assets was recognised                          795                 -   Additions                                                       458
Taxes for previous years                                    252             156     Disposals                                                      -877
Change in unrecognised deferred tax                                                 Exchange difference                                             214
assets/liabilities                                         -103              69     Cost at 31 Dec 2009                                           8,589
Other items                                                 -79             -86
Income taxes in the consolidated                                                    Accumulated depreciation at 1 Jan 2009                       -6,199
statement of comprehensive income                         2,526           3,972
                                                                                    Depreciation                                                 -1,153
                                                                                    Disposals                                                       534
13.­Earnings­per­share                                                              Exchange difference                                            -181
                                                                                    Accumulated depreciation at 31 Dec 2009                      -6,999
The basic earnings per share is calculated by dividing the profit/loss
for the year attributable to equity holders of the parent by the weighted
                                                                                    Book value at 1 Jan 2009                                      2,595
average number of ordinary shares outstanding during the financial
                                                                                    Book value at 31 Dec 2009                                     1,589
year.

                                                                                    Cost at 1 Jan 2008                                            7,482
                                                        2009              2008
                                                                                    Additions                                                     1,351
Profit/loss for the year attributable                                               Business combination                                            289
to equity holders of the parent
(EUR 1,000)                                            -2,138             6,625     Disposals                                                        -9
Number of outstanding shares                                                        Exchange difference                                            -318
during the financial period, weighted                                               Cost at 31 Dec 2008                                           8,794
average                                        106,953,918        106,938,539
Basic earnings per share (euro)                         -0.02              0.06     Accumulated depreciation at 1 Jan 2008                       -5,082
                                                                                    Depreciation                                                 -1,366
                                                                                    Disposals                                                         8
In calculating the diluted earnings per share, the weighted average
number of shares is adjusted by the effect of the conversion into shares            Exchange difference                                             241
of all dilutive potential ordinary shares. Comptel has share options,               Accumulated depreciation at 31 Dec 2008                      -6,199
which have a diluting effect, when the exercise price of the share
options is lower than the fair value of the share. The fair value of the            Book value at 1 Jan 2008                                      2,400
share is based on the average price of the shares during the financial              Book value at 31 Dec 2008                                     2,595
period. In 2009, the options did not have a material dilutive effect
(no dilutive effect in 2008).




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                        27
15.­Intangible­assets

                                                                        Patents and       Development         Other intangible
EUR 1,000                                              Goodwill         trademarks               costs                  assets                     Total
Cost at 1 Jan 2009                                       19,027                851                15,650                 11,028                 46,556
Additions                                                                       98                 3,808                    228                  4,134
Decreases                                                  -268                                                                                   -268
Exchange difference                                         597                                                             243                    840
Cost at 31 Dec 2009                                      19,355                949                19,459                 11,499                 51,263

Accumulated amortisation at 1 Jan 2009                         0              -228                 -8,100                 -7,223               -15,551
Amortisation                                                                   -50                 -2,629                 -1,480                -4,160
Impairment loss                                                                                      -340                                         -340
Exchange difference                                                                                                          -50                   -50
Accumulated amortisation at 31 Dec 2009                        0              -278               -11,070                  -8,753               -20,102

Book value at 1 Jan 2009                                 19,027                624                 7,550                   3,805                31,005
Book value at 31 Dec 2009                                19,355                671                 8,389                   2,746                31,161

Cost at 1 Jan 2008                                       10,832                711                11,225                  8,473                 31,242
Additions                                                                      140                 4,426                    111                  4,677
Business combination                                      9,748                                                           3,001                 12,749
Exchange difference                                      -1,554                                                            -557                 -2,111
Cost at 31 Dec 2008                                      19,027                851                15,650                 11,028                 46,556

Accumulated amortisation at 1 Jan 2008                         0              -185                 -6,580                 -5,333               -12,097
Amortisation                                                                   -39                 -1,521                 -1,951                -3,511
Impairment loss                                                                 -4                                                                  -4
Exchange difference                                                                                                           61                    61
Accumulated amortisation at 31 Dec 2008                        0              -228                 -8,100                 -7,223               -15,551

Book value at 1 Jan 2008                                 10,832                526                 4,645                   3,140                19,144
Book value at 31 Dec 2008                                19,027                624                 7,550                   3,805                31,005


Allocation of goodwill                                                   Impairment testing
Of the goodwill 10,832 thousand euro (10,832 thousand euro in 2008)      The recoverable amount of goodwill is determined based on value in
relates to know-how and market knowledge of the personnel and            use calculations. The value in use is computed based on discounted
to the development potential of technology transferred from EDP          forecast cash flows. The cash flow forecasts rely on the plans approved
Partners in connection of the business acquisition. 8,523 thousand       by the Board of Directors and management concerning in particular
euro (8,195 thousand euro in 2008) is attributable to the acquisition    profitability and the growth rate of net sales. The plans cover a five-
of Axiom Systems. According to Comptel management, the goodwill          year period taking into account the recent development of the busi-
is mainly based on the fact that solutions for IP services complement    ness. The used pre-tax rate discount rate is 16.9% (14.9% in 2008).
Comptel’s product portfolio, the combined sales network enables              The cash flows after the five-year period have been forecast by
cross-selling to Axiom’s and Comptel’s customers, and the combined       estimating the future growth rate of net sales to be 3% (3% in 2008).
R&D strengthens the operations. The professionally skilled workforce     Based on the impairment tests there is no need to recognise an impair-
is also part of the goodwill. The expected future cash flows may be      ment loss.
generated from all market areas, therefore goodwill can not be               The use of the testing model requires making estimates and
specifically allocated to any of the geographical segments alone.        assumptions concerning investments, market growth and general
     The agreement also included a provision regarding a contingent      interest rate level.
consideration. As the net sales of Axiom Systems for the year 2008
were less than 13.5 million euro, no contingent consideration was        Sensitivity analysis of impairment testing
paid. The potential contingent consideration was not included in the     The realisation of an impairment loss would require the actual
goodwill determined at the acquisition date since the amount could       operating profit (EBIT) level to be 77% lower than the management’s
not be estimated reliably.                                               estimate at the end of reporting period (42% in 2008), or that the
                                                                         discount rate was over 29% (21% in 2008).




28                                                                           COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
16.­Investments­in­associates

EUR 1,000                                                                                                                              2009     2008
Carrying amount at 1 Jan                                                                                                               649       513
Share of results                                                                                                                        40       136
Carrying amount at 31 Dec                                                                                                              689       649

The carrying amount of goodwill included in the carrying amount of the investment in the associate amounted to 400 thousand euro
at 31 December 2009 (31 December 2008: 400 thousand euro).

Summary­financial­information­for­the­Group’s­investments­in­the­associate­-­assets,­liabilities,­net­sales­and­profit­/­loss­(EUR­1,000):

2009                                                                    Assets            Liabilities     Net sales    Profit / loss      Ownership %
Tango Telecom Ltd.                                                       3,523                  868          5,250             200                20

2008
Tango Telecom Ltd.                                                       3,119                  442          5,247             681                20


17.­Deferred­tax­assets­and­liabilities

Changes­in­deferred­tax­assets­and­liabilities­during­2009:
                                                                                                         Recognised
                                                                                                            in other
                                                                                        Recognised in comprehensive      Exchange
EUR 1,000                                                          31 Dec 2008           profit or loss      income     differences       31 Dec 2009
Deferred tax assets
Provisions                                                                       127               -43                                            84
Reversal of depreciation and amortisation in taxation                            475                 3                                           478
Impairment loss on trade receivables                                             273               -33                                           241
Loss for the period                                                                -               152                                           152
Business combinations                                                            196               -35                            86             248
Amortisation on technology in acquired business
operations                                                                       101              -101                                             0
Forward contracts hedging backlog of orders                                        -                              16                              16
Other tax deductible temporary differences                                       -20                45                                            25
Total                                                                           1,153              -12            16              86            1,243

Deferred tax liabilities
Capitalisation of intangible assets                                             2,127              230                                          2,357
Capitalisation of and amortisation on technology
in acquired business operations                                                   757             -263                            55              549
Impact of goodwill amortisation in taxation                                     1,831              563                                          2,394
Cumulative depreciation difference                                                 71               35                            -2              104
Forward contracts hedging backlog of orders                                        30                            -30                                0
Other taxable temporary differences                                                88              -33                                             55
Total                                                                           4,902              532           -30              53            5,458




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                      29
Changes­in­deferred­tax­assets­and­liabilities­during­2008:

                                                                                              Recognised in           Business
EUR 1,000                                                                   31 Dec 2007        profit or loss      combinations         31 Dec 2008
Deferred tax assets
Provisions                                                                             78                   49                                     127
Reversal of depreciation and amortisation in taxation                                 486                  -11                                     475
Impairment loss on trade receivables                                                  301                  -28                                     273
Business combinations                                                                   0                                      196                 196
Amortisation on technology in acquired business operations                              0                 101                                      101
Other tax deductible temporary differences                                            -82                  63                                      -20
Total                                                                                 783                 174                  196               1,153


                                                                                          Recognised
                                                                                             in other
                                                                         Recognised in comprehensive                 Business
EUR 1,000                                                  31 Dec 2007    profit or loss      income              combinations          31 Dec 2008
Deferred tax liabilities
Capitalisation of intangible assets                              1,346             781                                                           2,127
Capitalisation of technology in acquired business
operations                                                           0                                                        757                  757
Impact of goodwill amortisation in taxation                      1,267             563                                                           1,831
Cumulative depreciation difference                                  15              56                                                              71
Forward contracts hedging backlog of orders                         27                                      2                                       30
Other taxable temporary differences                                  5               83                                                             88
Total                                                            2,660           1,483                      2                 757                4,902




18.­ Trade­receivables­and­other­current­receivables

EUR 1,000                                           2009       2008      Ageing analysis of trade receivables
Trade receivables                               23,578        27,621     EUR 1,000                         Gross 2009         Impaired      Net 2009
Receivables from associates                          1           191     Not past due                            12,563                        12,563
Prepayments                                         84           106     1-30 days past due                       3,001                         3,001
Accruals from long-term projects                 7,772         4,796     31-90 days past due                      3,189                         3,189
Other prepayments and accrued income             3,592         2,311     91-180 days past due                       736                           736
Other receivables                                3,641         4,076     181-360 days past due                    3,430            -13          3,418
Total                                           38,668        39,101     Over 360 days past due                   2,087         -1,415            672
                                                                         Total                                   25,007         -1,428         23,578
Comptel has recognised credit losses on trade receivables totalling
429 thousand euro in 2009 (2008: 187 thousand euro). Credit losses       EUR 1,000                         Gross 2008         Impaired      Net 2008
recognised arose from several small receivables past due over a year.    Not past due                            15,549                        15,549
The carrying amounts of the trade receivables and other receivables      1-30 days past due                       3,981                         3,981
equal the related maximum exposure to credit risk. Other prepayments     31-90 days past due                      3,807                         3,807
and accrued income mainly consist of accruals related to software        91-180 days past due                     2,360                         2,360
service and user charges and rent accruals.                              181-360 days past due                    1,101                         1,101
                                                                         Over 360 days past due                   1,882         -1,060            822
                                                                         Total                                   28,681         -1,060         27,621




30                                                                          COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
19.­ Cash­and­cash­equivalents

EUR 1,000                                                  2009           2008
Cash at bank and in hand                                  6,730           6,135
Total                                                     6,730           6,135




20.­ Capital­and­reserves

The impacts of movement in the number of shares are as follows:

                                                                                                  Fund of invested
                                                                 Number                             non-restricted
EUR 1,000                                                        of shares        Share capital             equity     Treasury shares                Total
At 1 Jan 2008                                                106,814,469                 2,141               7,368                -427               9,082
Transfer of treasury shares                                      156,334                                        65                 302                 367
Return of treasury shares                                         -8,647                                                                                 0
At 31 Dec 2008                                               106,962,156                 2,141               7,433                -125               9,449
Acquisition of Corporation's own shares                         -480,698                                                          -336                -336
Transfer of treasury shares                                      269,348                                        67                 174                 241
At 31 Dec 2009                                               106,750,806                 2,141               7,499                -287               9,353



The maximum number of Comptel Corporation shares is 500 million                      Treasury shares
at 31 December 2009 (31 December 2008: 500 million). The counter-                    Treasury shares reserve includes the cost of treasury shares held by
book value of a share is 0.02 euro per share and the maximum share                   the Group. Comptel transferred 110,463 shares purchased in 2007 to
capital amounts to 8,400,000.00 euro (31 December 2008: 8,400,000.00                 persons under the share-based incentive plan for 2007 in 2008 and
euro). All shares issued have been fully paid.                                       45,871 shares to the members of the Board of Directors as part of their
                                                                                     annual compensation. Comptel bought 269,348 shares in 2009 out of
The descriptions of the reserves under equity are as follows:                        which 168,426 shares were transferred to persons under the share-
                                                                                     based incentive plan and 100,922 shares to the members of the Board
Fund of invested non-restricted equity                                               of Directors as part of their annual compensation. Comptel acquired
The fund of invested non-restricted equity includes other investments                211,350 own shares in the end of 2009. At the end of the finanical year
of equity nature and subscription prices of shares to the extent that it             the company had 304,004 treasury shares (92,654 treasury shares at
is specifically not to be credited to share capital.                                 31 Dec 2008).

Translation reserve                                                                  Dividends
The translation reserve comprises the translation differences arising                After 31 December 2009 the Board of Directors has proposed a divi-
from the translation of the financial statements of the foreign subsi-               dend to be paid 0.03 euro per share.
diaries.

Fair value reseve
The fair value reserve comprises the hedging reserve including the
effective portion of the cumulative net change in the fair value of cash
flow hedging instruments.




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                            31
21.­Share-based­payments                                                 The­number­and­average­exercise­prices­of­the­share­options­
                                                                         outstanding at the end of the period:
Share options
The Group has had two share option schemes during the financial          2009                                               Average
year. The options in question have been granted to the key personnel                                                  exercise price,      Number of
as well as to the subsidiaries fully owned by Comptel Corporation. For   Year of expiration                              EUR/share           options
the option scheme approved in 2006, the total number of share options    2010                                                     1.69       1,090,000
issued is 4,200,000. The share options may be exercised to subscribe     2011                                                     1.89       1,120,000
a maximum of 4,200,000 Comptel Corporation shares in total. The          2012                                                     1.44       1,180,000
share subscription period is for option 2006A, 1 November 2008 - 30      2013                                                     0.63       1,250,000
November 2010, for option 2006B, 1 November 2009 - 30 November
2011 and for option 2006C, 1 November 2010 - 30 November 2012.           2008                                               Average
For the option scheme approved in 2009, the total number of share                                                     exercise price,      Number of
                                                                         Year of expiration                              EUR/share           options
options issued is 4,200,000. The share options may be exercised to
subscribe a maximum of 4,200,000 Comptel Corporation shares in           2010                                                     1.73         990,000
total. The share subscription period is for option 2009A, 1 November     2011                                                     1.93       1,248,000
2011-30 November 2013, for option 2009B, 1 November 2012 - 30            2012                                                     1.48       1,292,000
November 2014 and for option 2009C, 1 November 2013 - 30 Novem-
ber 2015. The corporate executives are not included in 2009 option       The fair value of the share options 2009A and 2006A granted during
program. The subscription period of the 2001 option scheme expired       the financial year was 0.37 euro and 0.33 euro (2006C 0.56 and 2006B
on 31 December 2008. During the subscription period no shares were       0.32 euro in 2008), determined using the Black-Scholes option pricing
subscribed.                                                              model.

Changes in the number of the outstanding share options and               The inputs used in the Black-Scholes formula were as follows:
weighted­average­exercise­prices­during­the­period­were­as­
follows:                                                                                                          2009        2008
                                                                                                                 2009A 2006A 2006C 2006B
                                             Weighted                    Weighted average share price
                                     average exercise    Number of       (euro)                                    0.82       1.53       1.46      1.44
2009                                 price, EUR/share      options
                                                                         Exercise price (euro)                     0.63       1.73       1.48      1.93
Outstanding at the beginning of                                          Expected volatility                       38%        35%        36%       36%
the year                                          1.71     3,530,000
                                                                         Expected option life (years)               4.5        2.6        4.6       3.5
Granted during the year                           0.71     1,350,000
                                                                         Risk-free interest rate                 2.71%      4.20%      5.23%     5.34%
Forfeited during the year                         1.68      -240,000
Expired during the year                              -             -     The expected volatility has been determined based on the historical
Outstanding at the end of                                                volatility for a period equalling to the option vesting period in 2009
the year                                          1.39     4,640,000
                                                                         calculations. In 2008 a volatility for 12 months immediately preceding
Exercisable at the end of the year                1.79     2,210,000
                                                                         the grant date was used in the calculations.
                                                                             In 2009 the expense recognised in respect of the option schemes
                                             Weighted
                                                                         amounted to 572 thousand euro (2008: 722 thousand euro).
                                     average exercise    Number of
2008                                 price, EUR/share      options
Outstanding at the beginning of
the year                                          3.50     4,446,500
Granted during the year                           1.54     1,590,000
Forfeited during the year                         1.77      -400,000
Expired during the year                           5.26    -2,106,500
Outstanding at the end of
the year                                          1.71     3,530,000
Exercisable at the end of the year                1.73       990,000




32                                                                           COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
Share-based incentive plan                                                      22.­Pension­obligations
The key personnel of the Group has had a share-based incentive
program since 2006. The last vesting period of Comptel Corporation              Comptel has pension plans in various countries that are based on the
Share Ownership Plan 2006 - 2008 ended on 31 December 2008. The                 local legislation and well-established practices. In Finland the pen-
compensation based on the share based incentive program has been                sion arrangement is mainly managed through the Finnish Statutory
paid as a combination of company shares and cash after the vesting              Employment Pension Scheme (TyEL) which is a defined contribution
period has expired. A participant has to possess the shares paid as             plan. In addition, Comptel has a voluntary additional pension plan
compensation at least for two years after the end of the vesting period.        to certain employees in Finland and this arrangement has been ac-
     In the beginning of 2009 the Board of Directors of Comptel                 counted for as a defined benefit plan.
Corporation approved a new share-based incentive plan for the                       The difference between the net liability and unrecognised actuarial
Comptel Group key personnel. The aim of the plan is to combine                  gains and losses is included in other non-current receivables.
the objectives of the shareholders and the key personnel in order to
increase the value of the company, to commit the key personnel to the           Liability/receivable­for­defined­benefit­obligations­in­statement­of­
company, and to offer them a competitive reward plan based on hold-             financial­position:
ing the company shares.
     The new plan includes three vesting periods, calendar years 2009,          EUR 1,000                                          2009         2008
2010 and 2011. The Board of Directors will decide on the earnings               Present value of obligations                         209          139
criteria for each vesting period at the beginning of each vesting period.       Fair value of plan assets                           -198         -135
A two-year restriction period will follow each vesting period, during           Net liability                                         11            4
which shares cannot be transferred. Should a key person’s employment
                                                                                Unrecognised actuarial gains (+)
or service end during the restriction period, must he/she gratuitously          and losses (-)                                       -37          -14
return the shares paid as reward to the company. The reward from the
                                                                                Liability­(+)/receivable­(-)­in­statement­
plan for vesting period 2009 is based on the continuance of employ-             of­financial­position­                               -26          -11
ment or service of a key person and on the Comptel Group’s operat-
ing profit margin. The reward from the vesting period 2009 will be
paid partly as the Company’s shares and partly in cash in 2010. The             Defined­benefit­expense­recognised­in­the­statement­of­compre-
proportion of cash will cover taxes and tax-related costs arising from          hensive income:
the reward.
     The President and CEO of the company belongs to the incentive              EUR 1,000                                          2009         2008
plan provided that he holds at least 150,000 Comptel Corporation                Current service cost                                  41           42
shares until 31 December 2012. The restriction periods of the rewards           Interest expense                                      10            7
to be paid to the President and CEO, on the basis of continuance of his         Expected return on plan assets                        -5           -4
service, will end in 2012 and 2013. A maximum amount in denomina-               Actuarial gains (-) and losses (+)                     0            1
tion in euro has been determined for the rewards of the President and
                                                                                Total                                                 46           47
CEO.
     The cost of the program is recognised under employee benefit
expenses over the vesting period. In 2009, 327 thousand euro was                Movements in the present value of the obligation:
expensed (2008: 515 thousand euro), of which 166 thousand euro
is the portion to be paid in cash (2008: 279 thousand euro).                    EUR 1,000                                          2009         2008
     The outstanding option schemes and share-based incentive pro-              Obligation at the beginning of the period           139           102
grams are described in more detail in section Shares and shareholders.          Current service cost                                 41            42
                                                                                Interest expense                                     10             7
                                                                                Actuarial gains (-) and losses (+)                   19           -13
                                                                                Obligation at the end of the period                 209           139




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                       33
Movements in the fair value of plan assets:                               23.­ Provisions

EUR 1,000                                           2009        2008      Movements in provisions during 2009:
Fair value of plan assets at the beginning
of the period                                        135           93                                    Provision
Expected return on plan assets                         5            4                                           for  Lease     Other
                                                                          EUR 1,000                      warranty provision provisions              Total
Actuarial gains (+) and losses (-)                    -4           -3
Contributions into the plan paid by                                       Balance at 1 Jan 2009                428         2,386           124 2,937
 the employer                                         61           41     Provisions made during
                                                                          the year                                           302                     302
Fair value of plan assets at the end of
the period                                           198          135     Provisions used during
                                                                          the year                              -37         -687          -124      -847
                                                                          Exchange difference                                149                     149

Principal­actuarial­assumptions­at­31­December:                           Balance at 31 Dec 2009               391         2,150              0 2,541


                                                    2009        2008      Movements­in­provisions­during­2008:
Discount rate                                       5.00%       5.75%
Expected return on plan assets                      3.40%       3.40%                                    Provision
                                                                                                                for  Lease     Other
Future salary increases                             2.50%       4.00%
                                                                          EUR 1,000                      warranty provision provisions              Total
                                                                          Balance at 1 Jan 2008                464           300             12      776
                                                                          Provisions made during
EUR 1,000                                           2009        2008
                                                                          the year                                           332           124       456
Actual return on plan assets                           1            1     Business combinations                            2,683                   2,683
                                                                          Provisions used during
                                                                          the year                                          -540                    -540
EUR 1,000                       2009         2008     2007      2006      Unused provisions
Present value of the                                                      reversed                              -36                         -12       -48
obligation                       209          139      102        586     Exchange difference                               -389                    -389
Fair value of plan assets       -198         -135      -93       -336     Balance at 31 Dec 2008               428         2,386           124 2,937
Surplus­(-)­/­deficit­(+)         11           4            9     250

                                                                          Provision for warranty
Experience adjustments
arising on plan assets             -4          -3       65          -6    A provision for warranties is recognised when the underlying product
Experience adjustments                                                    including a warranty is sold. The provision is based on historical war-
arising on plan liabilities       -26          -4       -40        20     ranty data.

The expected contributions to the defined benefit pension plans for the   Lease provision
year 2010 are 32 thousand euro.                                           This item includes the provisions made for unoccupied leased facili-
                                                                          ties.

                                                                          Other provisions
                                                                          Other provisions include a provision recognised for employment
                                                                          benefit expenses.




34                                                                            COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
24.­Financial­liabilities                                                            25.­Trade­and­other­current­liabilities

EUR 1,000                                                  2009           2008       EUR 1,000                                            2009          2008
Non-current­financial­liabilities­                                                   Trade payables                                       1,412           872
measured at amortised cost                                                           Trade payables and other current
Finance lease liabilities                                      -                11   liabilities to associates                                 -          197
Other liabilities                                              1                 1   Advances received from long-term
Total                                                          1                12   contracts                                            1,582         1,876
                                                                                     Accrued expenses and deferred income                13,868        11,986
Current­financial­liabilities­                                                       Other liabilities                                    3,255         3,401
measured at amortised cost                                                           Total                                              20,117        18,331
Loans from financial institutions                         8,000           5,000
Finance lease liabilities                                    12              40      The accrued expenses and deferred income mainly comprise accruals
Total                                                     8,012           5,040      related to employee benefits.

                                                                                     26.­Financial­risk­management
The fair values of liabilities are presented in note 26. Financial risk
management.                                                                          Comptel is exposed to financial risks in its ordinary business operations.
     Comptel had a bank loan amounting to 8,000 thousand euro at 31                  The objective of Comptel’s risk management is to minimise the adverse
December 2009 (5,000 thousand at 31 December 2008). The weighted                     effects arising from fluctuations of financial markets on the Group’s cash
average interest rate is 1.5% (3.6% in 2008). The loan together with the             flows, result and equity. Comptel’s general risk management principles
interest become payable during the second quarter in 2010. Comptel                   are approved by the Board of Directors and their implementation is
has a 15 million euro Revolving Credit Facility arrangement in place                 the responsibility of the Chief Financial Officer (CFO) together with
until 2013. At 31 December 2009 the amount available under the said                  the business units. Comptel’s financial policy is risk-adverse. The main
facility was 7 million euro.                                                         financial risks for the Group are currency risk and credit risk. Financial
                                                                                     management identifies and assesses risks and acquires the instruments
Maturity analysis of finance lease liabilities                                       needed to hedge against risks together with operating units. Hedging
                                                                                     transactions are carried out in accordance with the written risk manage-
EUR 1,000                                                  2009           2008       ment principles approved by the Board of Directors. Comptel uses
Finance lease liabilities - minimum lease                                            foreign currency forwards in its currency risk management.
payments
Less than one year                                            12                46   Currency risk
Between one and five years                                     -                12   Comptel operates globally and is therefore exposed to currency risks
Total                                                         12                58   arising from various currency positions. In Comptel’s business oper-
                                                                                     ations the major currencies are Euro and US Dollar (USD). Other
Finance lease liabilities - present value                                            significant currencies are UK Pound Sterling (GBP) and Norwegian
of minimum lease payments                                                            Krona (NOK).
Less than one year                                            12                40        Comptel hedges open positions in foreign currency and applies
Between one and five years                                     -                11   hedge accounting for the definition of these positions. The currency
Total                                                         12                52   position is monitored on a 12-month rolling period.
                                                                                          The hedging instruments are forward contracts entered into with
Future financial charges                                       0                6    banks. The hedging forward contract is always denominated in the
                                                                                     same currency as the underlying item resulting the value of the hedging
                                                                                     instrument to change in the opposite way compared to the underlying
                                                                                     item and consequently the hedge is effective. The potential ineffective-
                                                                                     ness may result from a possible overhedging or underhedging.
                                                                                          The invoicing of sales orders follows the progress of projects,
                                                                                     which causes timely uncertainty. Moreover, the realised turnover of
                                                                                     trade receivables exceeds the terms in the client agreements. The hedg-
                                                                                     ing of the future cash flows is timed taking these facts into account.
                                                                                     The ineffective portion of a hedge is recognised in the statement of
                                                                                     comprehensive income.




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                               35
Interest rate risk                                                                 Comptel introduced a new policy for writing off trade receivables.
Interest rate risk is the risk that cash flows or the result will fluctuate   According to the policy a bad debt provision of 50% of the total value
because of changes in market interest rates. Comptel’s interest-bearing       is generally booked if the receivable is overdue more than 360 days and
liabilities as at 31 December 2009 totalled 8,012 thousand euro, of           a provision of 100% is impacted when the receivable is overdue more
which 8,000 thousand euro is a bank loan (5,052 thousand euro, of             than 540 days. The amount of credit losses recognised in the statement
which 5,000 thousand euro was a bank loan in 2008). The bank loan             of comprehensive income in the financial year 2009 was 429 thousand
becomes repayable in 2010 but can be renewed under Comptel’s                  euro (187 thousand euro in 2008). Credit losses recognised arose from
Revolving Credit Facility. Comptel has a Revolving Credit Facility of         several small receivables past due over a year. The maximum amount
15 million euro valid until 2013 and the undrawn funds amounted to            of Comptel’s credit risk equals the carrying amount of financial assets
7 million euro. The interest payment for amounts falling due in 2010          at the end of the financial year. The ageing analysis of trade receivables
is fixed. The interest rate is determined based on prevailing IBOR.           is presented in note 18. Trade receivables and other current receiv-
Possible short-term investments in financial securities gives rise to in-     ables.
terest rate risk but the impact of such risk is not significant. Comptel’s
revenues and operating cash flows are mainly independent of the               Liquidity risk
fluctuations of market rates.                                                 Liquidity risk means insufficient financing or higher than normal
                                                                              financing expenses when business environment deteriorates and
Credit risk                                                                   financing is needed. The objective of liquidity risk management is to
Credit risk is the risk that one party will cause a financial loss for the    maintain sufficient liquidity and ensure that financing of business op-
Group by failing to discharge an obligation. In Comptel credit risk           erations is available when needed quickly enough. Part of the Group’s
mainly arises from trade receivables related to customers, derivatives,       liquid funds are invested in mutual funds based on the principles
cash and cash equivalents and money market investments.                       approved by the Board of Directors. Comptel’s main source of financ-
     Credit risk management principles are defined in Comptel’s docu-         ing has been the operating cash flow. Cash levels are monitored on
mented procedures (Risk Management Principles, Currency hedging               a weekly basis.
in Comptel Corporation and General principles of investment activi-                As at 31 December 2009 the Group’s cash and cash equivalents
ties). Credit risk management in respect of derivatives and invest-           totalled 6,730 thousand euro (6,135 thousand euro at 31 December
ments is centralised to the Group accounting department, in respect           2008). As at 31 December 2009 Comptel’s interest-bearing liabilities
of clients and credit control to the business area organisation.              totalled 8,012 thousand euro (5,052 thousand in 2008). Under the
     Comptel’s customers are mainly mid-size or large teleoperators.          Revolving Credit Facility in place until 2013 there is still 7 million
The Group’s clientele is large and geographically widely dispersed,           euro available for down-draw. The Facility contains a covenant
which decreases the customer risk of the Group.                               whereby Group equity ratio must be at least 35%. As of 31 December
     Comptel’s business consists of deliveries of large productised IT        2009 Comptel’s equity ratio was 62.6% (2008: 67.4%). Furthermore,
system and the value of a single project may be several million euro.         Comptel has an option for TyEL (earnings-related pension) premium
Therefore the risk associated with a single project or an individual          loan amounting to 9.8 million euro.
client may be significant. Furthermore some of Comptel’s clients oper-
ate in countries that are or have been war zone areas, which in part
increases credit risk.
     Comptel has no significant credit risk concentrations, since no
individual customer or customer group represents a material risk. In
delivery projects partial advance invoicing is generally used. Further-
more credit risk is reduced by progress payments invoiced based on
percentage of completion. In some countries letter of credits are used.




36                                                                                COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
The­following­table­sets­forth­maturity­analysis­based­on­contractual­cash­flows.­
Cash­flow­includes­both­loan­repayments­and­interest­payments.­­ ­             ­                      ­            ­             ­

2009                                                                                   Carrying     Contractual              1-6           7-12
EUR 1,000                                                                               amount       cash flow            months         months
Non-derivative­financial­liabilities
Loans from financial institutions                                                          8,000           8,070            8,070
Finance lease liabilities                                                                     12              12               12
Trade payables                                                                             1,412           1,412            1,412

Derivative­financial­liabilities
Forward exchange contracts used for hedging
Inflow                                                                                       220            -220                -219             -1

2008                                                                                   Carrying     Contractual              1-6           7-12          1-2
EUR 1,000                                                                               amount       cash flow            months         months        years
Non-derivative­financial­liabilities
Loans from financial institutions                                                          5,000           5,138                           5,138
Finance lease liabilities                                                                     52              58                 23           23         12
Trade payables                                                                               885             885                885

Derivative­financial­liabilities
Forward exchange contracts used for hedging
Inflow                                                                                       177            -177                -177
Outflow                                                                                     -114             114                            114


Capital structure management                                                     Gearing­in­2009­and­2008­was­as­follows:­                  ­
The purpose of Comptel capital structure management is to support
the business operations by securing normal operational demands and                EUR 1,000                                                2009        2008
grow shareholder value in the long term. Comptel aims at continuing               Interest-bearing liabilities                             8,012       5,052
profitable business by investing in R&D and enhancing its presence on             Cash and cash equivalents                               -6,730      -6,135
the global market place. The amount of dividends paid to the share-               Interest-bearing net liabilities                         1,282      -1,083
holders may vary in order for the Group to reduce debt or increase
cash in hand which would result in increased opportunities to focused             Total equity                                            46,299      51,576
acquisitions also in the future.
                                                                                  Gearing                                                  2.8%        -2.1%

Exposure to currency risk

                                                                                2009                                                   2008
EUR 1,000                                                              USD         NOK              GBP                 USD               NOK           GBP
Trade receivables                                                     8,088       1,666              768               12,469            1,724          831
Cash and cash equivalents                                             3,101          85              446                  788              482           86
Trade payables                                                         -125                          -47                  -38               -2           -5
Net­statement­of­financial­position­exposure                        11,063        1,751            1,167               13,219            2,204          912

Order backlog (12 months)                                           11,101        2,833               32                9,809            2,726          737

Hedging
Forward contracts (12 months)                                        -8,677                                          -14,730

Total­net­exposure                                                  13,487        4,583            1,199                8,298            4,930         1,649




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                             37
Sensitivity to foreign exchange rates                                                                                  Positive     Negative         Nominal
                                                                                                                     fair value     fair value       value of
                                                                               2008                                  (carrying      (carrying      underlying
A­10%­weakening/strengthening­of­the­euro­against­the­cur-                     EUR 1,000                              amount)        amount)      instrument
rencies­below­at­31­December­would­have­affected­equity­                       Cash­flow­hedges
and­result­after­taxes­as­follows:                                             Recognised in other
                                                                               comprehensive income                        114                          2,515
2009
EUR 1,000                                              Equity        Result    Fair value hedges
USD                                                177/-177       485/-485     Recognised in profit or loss                               177         12,215
NOK                                                130/-130       130/-130
GBP                                                  86/-86         86/-86
                                                                               Fair­value­hierarchy­for­financial­instruments­measured­
2008                                                                           at fair value
EUR 1,000                                              Equity        Result
                                                                               EUR 1,000                                          31 Dec 2009         Level 2
USD                                                -112/112          74/-74
                                                                               Liabilities­measured­at­fair­value
NOK                                                163/-163       163/-163
                                                                               Financial liabilities measured at fair value
GBP                                                  68/-68         68/-68     through profit and loss
                                                                               Forward contracts                                             220          220
In calculating the sensitivity related to exchange rate changes the fol-       of which cash flow hedges                                      62           62
lowing assumptions were used:                                                  Total                                                         220          220
•	 a	+/-10%	exchange	rate	change
•	 the	position	comprises	foreign	currency	financial	assets	and	
   financial liabilities, i.e. trade receivables, cash and cash equivalents,   According to IFRS 7 financial instruments carried at fair value must
   trade payables and derivatives                                              be classified according to a three level hierarchy.
•	 the	position	excludes	future	foreign	currency	cash	flows                        Level 1: fair values are based on quoted prices (unadjusted) in
                                                                               active markets for identical assets or liabilities
Fair values of financial assets and liabilities                                    Level 2: fair values are based on inputs other than quoted prices
For financial assets and liabilities their carrying amounts equal their        included within level 1. However, the fair values are based on informa-
fair values as the discounting has no material effect considering the          tion that is observable for the asset or liability either directly (i.e. as
short maturity of these items..                                                prices) or indirectly (i.e. derived from prices).
                                                                                   Level 3: fair values are based on significantly different information
Derivative instruments measured at fair value:                                 than the input data and is not based on observable market data (unob-
                                                                               servable inputs). The fair values are based on management estimates
                                       Positive    Negative        Nominal     and application of those in generally accepted valuation models.
                                     fair value    fair value      value of
2009                                 (carrying     (carrying     underlying
EUR 1,000                             amount)       amount)     instrument
Cash­flow­hedges
Recognised in other
comprehensive income                                      62          4,165

Fair value hedges
Recognised in profit or loss                            158         11,831


Currency forward contracts presented in equity will be recognised
in profit or loss during 2010.




38                                                                                 COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
27.­Adjustments­to­cash­flows­from­operating­activities                           30.­Related­party­transactions

Non-cash­transactions­or­items­that­are­not­part­of­cash­flows­                   The Comptel Group companies are as follows:
from operating activities:
                                                                                  2009                                           Group      Group
EUR 1,000                                                  2009           2008    Company                       Domicile    holding (%) voting (%)
Depreciation, amortisation and                                                    Comptel Corporation           Finland
impairment charges                                        5,654           4,881   Axiom Systems Holdings Ltd.   UK              100.00     100.00
Exchange differences                                        398           1,036   Axiom Systems Ltd.            UK              100.00     100.00
Share of result of associates                               -40            -136   Axiom Systems OSS
Share-based payments                                        779             888   (Asia-Pacific) Pte            Singapore       100.00     100.00
Other adjustments                                            50             -73   Business Tools Oy             Finland         100.00     100.00
Total                                                     6,840           6,596   Comptel Communications AS     Norway          100.00     100.00
                                                                                  Comptel Communications
                                                                                  Brasil Ltda                   Brazil          100.00     100.00
28.­Operating­leases                                                              Comptel Communications Inc.   USA             100.00     100.00
                                                                                  Comptel Communications Oy     Finland         100.00     100.00
Minimum­lease­payments­on­non-cancellable­office­facilities­                      Comptel Communications
                                                                                  Sdn Bhd                       Malaysia        100.00     100.00
leases and other operating leases are payable as follows:
                                                                                  Comptel Passage Oy            Finland         100.00     100.00
                                                                                  Comptel Ltd                   UK              100.00     100.00
EUR 1,000                                                  2009           2008
                                                                                  Network People Ltd.           UK              100.00     100.00
Less than one year                                        3,904          4,234
                                                                                  Viewgate Networks Inc.        USA             100.00     100.00
Between one and five years                               12,783         12,136
                                                                                  Viewgate Networks Ltd.        UK              100.00     100.00
More than five years                                      2,248          3,282
Total                                                    18,935         19,652
                                                                                  2008                                           Group      Group
                                                                                  Company                       Domicile    holding (%) voting (%)
Comptel has leased the office premises it uses. These leases typically
run for a period from one to ten years, and normally with an option               Comptel Corporation           Finland
to renew the lease after that date. The index, renewal and other terms            Axiom Systems Holdings Ltd.   UK              100.00     100.00
of the agreements are diverse.                                                    Axiom Systems Ltd.            UK              100.00     100.00
     The statement of comprehensive income for the year 2009 includes             Axiom Systems OSS
                                                                                  (Asia-Pacific) Pte            Singapore       100.00     100.00
lease expenses for the office premises amounting to 4,554 thousand
                                                                                  Business Tools Oy             Finland         100.00     100.00
euro (2008: 4,498 thousand euro).
                                                                                  Comptel Communications AS     Norway          100.00     100.00
                                                                                  Comptel Communications
29.­Commitments­and­contingencies                                                 Brasil Ltda                   Brazil          100.00     100.00
                                                                                  Comptel Communications Inc.   USA             100.00     100.00
EUR 1,000                                                  2009           2008
                                                                                  Comptel Communications Oy     Finland         100.00     100.00
Bank guarantees                                           1,616           1,047   Comptel Communications
                                                                                  Sdn Bhd                       Malaysia        100.00     100.00
                                                                                  Comptel Passage Oy            Finland         100.00     100.00
                                                                                  Comptel Ltd                   UK              100.00     100.00
                                                                                  Network People Ltd.           UK              100.00     100.00
                                                                                  Viewgate Networks Inc.        USA             100.00     100.00
                                                                                  Viewgate Networks Ltd.        UK              100.00     100.00




COMPTEL Financial Statements | Notes to the Consolidated Financial Statements                                                                   39
The Comptel Group has a related party relationship with its associates,     Key management compensation
the Board of Directors, CEO, deputy CEO, the Corporate Executives           The key management personnel compensation includes the employee
and also with people and companies under Comptel management’s               benefits of the CEO, deputy CEO, the members and deputy members
influence.                                                                  of the Board of Directors and the Corporate Executives.

Transactions, which have been entered into with related parties,            EUR 1,000                                                 2009           2008
are as follows:                                                             Salaries and other short-term
                                                                            employee benefits                                        2,249           1,790
EUR 1,000                                              2009         2008    Share-based payments                                       409             412
Purchases of goods and services                                             Total                                                    2,657           2,201
Associates                                              635        1,318
Companies under management’s influence                   35           28
                                                                            The­employee­benefits­of­the­CEO­and­the­members­of­the­
Interest revenue                                                            Board of Directors of the parent company:
Associates                                                 4           12
                                                                            EUR 1,000                                                 2009           2008
Receivables                                                                 CEO                                                         486            556
Associates                                                76         191
                                                                            Board of Directors at 31 Dec 2009
Liabilities                                                                 Kotilainen Timo                                              34             35
Associates                                                 -         197    Lassila Juhani                                               34             35
Companies under management’s influence                     1           1    Riikkala Olli                                                60             66
                                                                            Vaajoensuu Hannu                                             41             46
                                                                            Walldén Petteri                                              25              -
Contingent liabilities assumed on behalf of                                 Former members of the Board of
Group companies                                                             Directors
In 2008 Comptel Corporation gave a performance guarantee, still             Mustaniemi Matti                                               8            35
in force, on behalf of its subsidiary. The total value of this agreement    Hintikka Juhani                                                -             7
is 4 million US Dollars. Comptel gave a guarantee of 700 thousand           Total                                                      688             780
UK Pound Sterling for its subsidiary in 2009.

                                                                            The retirement age of the CEO of the parent company is 62 years.
                                                                                Management of the company was granted 100,000 share options in
                                                                            2009 (2008: 140,000). At 31 December 2009 management had 510,000
                                                                            share options, of which 362,000 were exercisable (2008: 370,000 share
                                                                            options, of which 110,000 exercisable).
                                                                                The compensation to the members of the Board of Directors has
                                                                            been paid by giving shares in Comptel Corporation with 40% of the
                                                                            annual gross compensation.
                                                                                The related parties of the Group had no loans referred to in the
                                                                            Companies Act, chapter 8, article 6.




40                                                                              COMPTEL Financial Statements | Notes to the Consolidated Financial Statements
Key Figures
Financial summary                                                         2005              2006            2007           2008            2009
Net sales, EUR 1,000                                                    66,065             80,439         82,399          84,849         74,896
Net sales, change %                                                       10.7               21.8             2.4             3.0         -11.7
Operating profit/loss, EUR 1,000                                        10,516             11,232         16,518          11,383          1,018
Operating profit/loss, change %                                          -29.0                 6.8          47.1           -31.1          -91.1
Operating profit/loss, as % of net sales                                  15.9               14.0           20.0            13.4             1.4
Profit/loss before taxes, EUR 1,000                                     10,815             11,206         16,396          10,597            388
Profit/loss before taxes, as % of net sales                               16.4               13.9           19.9            12.5             0.5
Return on equity, %                                                       15.8               12.7           21.9            12.8            -4.4
Return on investment, %                                                   24.0               25.3           32.9            19.1             1.5
Equity ratio, % 1)                                                        75.2               74.6           77.6            67.4           62.6
Gross investments in tangible and intangible assets,
EUR 1,000 2)                                                            19,968              1,477          1,908          10,919            686
Gross investments in tangible and intangible assets,
as % of net sales 2)                                                      30.2                 1.8            2.3           12.9             0.9
Research and development expenditure, EUR 1,000                          8,154             11,079         10,333          14,007         13,092
Research and development expenditure, as % of net sales                   12.3               13.8           12.5            16.5           17.5
Order backlog, EUR 1,000                                                24,482             29,483         35,051          38,846         37,554
Average number of employees during the financial period                    462                561            555             606            613
Interest-bearing net liabilities, EUR 1,000                             -9,632            -12,934        -14,708          -1,083          1,282
Gearing ratio, %                                                         -21.5              -27.7          -28.2             -2.1            2.8

1)
     When calculating the equity ratio for 2007, those deferred           2)
                                                                                Includes the acquisition of the EDB Telecom business in 2005.
     income items recognised on the basis of the percentage of                  The aggregate gross capital expenditure excluding this acquisi-
     completion method as well as deferred income arising from                  tion amounted to 1,852 thousand euro, which was 2.8% of
     sales accruals have been accounted for as advances received.               the net sales..
     The comparative information has been restated.                                Includes the acquisition of Axiom Systems in 2008. The
                                                                                aggregate gross capital expenditure excluding this acquisition
                                                                                amounted to 1,461 thousand euro, which was 1.7% of the
                                                                                net sales.


Per share data                                                            2005              2006            2007           2008            2009
EPS, EUR                                                                       0.07          0.05           0.10           0.06           -0.02
Diluted EPS, EUR                                                               0.07          0.05           0.10           0.06           -0.02
Equity per share, EUR                                                          0.42          0.44           0.49           0.48            0.43
Dividend per share, EUR 3)                                                     0.04          0.05           0.06           0.04            0.03
Dividend per earnings, % 3)                                                    61.5          92.8           59.1           64.6          -150.1
Effective dividend yield, % 3)                                                  2.4           2.8             4.2            5.8             3.8
P/E ratio                                                                      25.2          33.4           14.0           11.1           -39.0
Highest share price                                                                                         2.29           1.58            0.96
Lowest share price                                                                                          1.36           0.60            0.57
Market value at year-end, million EUR                                                                      151.7           73.8            83.3
Adjusted number of shares at the end of period                      107,054,810       107,054,810    107,054,810    107,054,810     107,054,810
 of which the number of treasury shares                                                                  240,341         92,654         304,004
Outstanding shares at the end of period                             107,054,810       107,054,810    106,814,469    106,962,156     106,750,806
Adjusted average number of shares during the period                 107,054,810       107,054,810    106,848,199    106,938,539     106,953,918
Average number of shares, dilution included                         107,054,810       107,054,810    106,848,199    106,938,539     107,078,252

3)
     The Board’s proposal




COMPTEL Financial Statements | Key Figures                                                                                                    41
Definitions of Key Figures
                                             Operating profit/loss
Operating margin %                       =                                                                                         x 100
                                             Net sales

                                             Profit/loss before taxes
Profit margin (before income taxes) %    =                                                                                         x 100
                                             Net sales

                                             Profit/loss
Return on equity % (ROE)                 =                                                                                         x 100
                                             Total equity (average during year)

                                             Profit/loss before taxes + financial expenses
Return on investment % (ROI)             =                                                                                         x 100
                                             Total equity + interest bearing liabilities (average during year)

                                             Total equity
Equity ratio %                           =                                                                                         x 100
                                             Statement of financial position total – advances received


Gross investments in tangible and            Gross investments in tangible and intangible assets
                                         =                                                                                         x 100
intangible assets, as % of net sales         Net sales



Reasearch and development expenditure,       Research and development expenditure
                                         =                                                                                         x 100
as % of net sales                            Net sales



                                             Interest-bearing liabilities - cash and cash equivalents
Gearing ratio %                          =                                                                                         x 100
                                             Total equity

                                             Profit/loss for the financial year attributable to equity shareholders
Earnings per share (EPS)                 =
                                             Average number of outstanding shares for the financial year

                                             Equity attributable to the equity holders of the parent company
Equity per share                         =
                                             Adjusted number of shares at end of period

                                             Dividend
Dividend per share                       =
                                             Adjusted number of shares at end of period

                                             Dividend per share
Dividend per earnings %                  =                                                                                         x 100
                                             Earnings per share (EPS)

                                             Dividend per share
Effective dividend yield %               =                                                                                         x 100
                                             Share closing price at end of period

                                             Share closing price at end of period
P/E-ratio                                =
                                             Earnings per share (EPS)




42                                                                                           COMPTEL Financial Statements | Definition of Key Figures
Parent Company Income Statement, FAS
EUR 1,000                                                             1 Jan - 31 Dec 2009   1 Jan - 31 Dec 2008
Net sales                                                                         67,881                76,884

Other operating income                                                                94                    14

Materials and services                                                            -5,445                -5,773
Personnel expenses                                                               -18,627               -21,875
Depreciation and amortisation                                                     -3,696                -4,651
Other operating expenses                                                         -40,178               -36,694
                                                                                 -67,945               -68,993

Operating­profit/loss                                                                 30                 7,905

Financial income                                                                      789                   969
Financial expenses                                                                 -1,064                -1,737

Profit/loss­before­appropriations­and­income­taxes                                  -245                 7,137

Change in accumulated depreciation                                                    59                     0

Profit/loss­before­income­taxes                                                     -186                 7,137

Income taxes                                                                       -1,424                -2,934

Profit/loss­for­the­period                                                        -1,610                 4,203




COMPTEL Financial Statements | Parent Company Income Statement, FAS                                          43
Parent Company Balance Sheet, FAS
EUR 1,000                                Notes              31 Dec 2009                 31 Dec 2008
ASSETS

Non-current assets
Goodwill                                                             1,628                       3,794
Other intangible assets                                                922                       1,591
Tangible assets                                                        603                       1,539
Investments                                                         10,317                      10,586
                                                                    13,471                      17,510

Current assets
Non-current receivables                                              8,963                       5,513

Current receivables                                                 35,951                      36,010
Cash and cash equivalents                                            4,580                       4,882
                                                                    40,531                      40,892

Total­assets                                                        62,964                      63,915

EQUITY­AND­LIABILITIES

Capital and reserves                          1
Share capital                                                        2,141                       2,141
Fund of invested non-restricted equity                               7,499                       7,433
Retained earnings                                                   23,279                      23,691
Profit/loss for the period                                          -1,610                       4,203
                                                                    31,309                      37,468

Accumulated appropriations                                                0                          59

Provisions                                                             694                         884

Liabilities
Non-current liabilities                                                273                         273
Current liabilities                                                 30,689                      25,231

Total­equity­and­liabilities                                        62,964                      63,915




44                                       COMPTEL Financial Statements | Parent Company Balance Sheet, FAS
Parent Company Statement of
Cash Flows, FAS
EUR 1,000                                                                    1 Jan - 31 Dec 2009   1 Jan - 31 Dec 2008
Cash­flows­from­operating­activities
Profit/loss before appropriations and income taxes                                         -245                 7,137

Adjustments:
   Depreciation and amortisation                                                          3,696                 4,651
   Financial income and expenses                                                           -181                  -169
   Other adjustments                                                                         66                   297
Change in working capital:
   Change in trade and other receivables                                                     112                -1,928
   Change in trade and other current liabilities                                           2,397                -1,003
   Change in provisions                                                                     -190                   119
Interest paid                                                                               -246                  -133
Interest received                                                                             99                   291
Taxes paid                                                                                -1,510                -5,543
Net cash from operating activities                                                        3,998                 3,718

Cash­flows­from­investing­activities
Acquisition of subsidiaries                                                                    -                -9,690
Purchase price adjustments                                                                   268                     -
Investments in tangible and intangible assets                                               -267                  -871
Proceeds from sale of tangible and intangible assets                                         341                     -
Proceeds received from liquidation of a subsidiary                                             -                   103
Loans granted                                                                             -3,069                     -
Net cash used in investing activities                                                    -2,726               -10,459

Cash­flows­from­financing­activities
Dividends paid                                                                            -4,278                -6,415
Acquisition of Corporation's own shares                                                     -295                     -
Proceeds from borrowings                                                                   8,000                 8,000
Repayment of borrowings                                                                   -5,000                -3,000
Change in other non-current liabilities                                                        -                     1
Net­cash­used­in­financing­activities                                                    -1,574                -1,415

Change in cash and cash equivalents                                                        -302                -8,156

Cash and cash equivalents at the beginning of period                                      4,882                13,037
Cash and cash equivalents at the end of period                                            4,580                 4,882
Change                                                                                     -302                -8,156




COMPTEL Financial Statements | Parent Company Statement of Cash Flows, FAS                                          45
Notes to the Financial Statements
of the Parent Company, FAS
The annual report contains the parent company’s notes in summary.           2.­Collaterals,­commitments­and­other­contingent­
Full audited financial statements are available on the website              liabilities
www.comptel.com.
                                                                            Lease commitments
1.­Equity
                                                                                                                                     31 Dec          31 Dec
Restricted equity                                                            EUR 1,000                                                 2009            2008
                                                                             Amounts payable during
EUR 1,000                                        2009        2008            the next financial year                                     261             352
                                                                             Amounts payable later                                       129             314
Share capital at 1 Jan                          2,141        2,141
Share capital at 31 Dec                         2,141        2,141           Total                                                       390             666

Non-restricted equity                                                       The leases the company has entered into generally run for a period
                                                                            of three years and contain no redemption commitments.
EUR 1,000                                        2009        2008
Fund of invested non-restricted equity                                      Rental commitments
at 1 Jan                                        7,433        7,368
Treasury shares given to the members                                                                                                 31 Dec          31 Dec
of the Board of Directors                          66           66           EUR 1,000                                                 2009            2008
Fund of invested non-restricted equity                                       Amounts payable during
at 31 Dec                                       7,499        7,433           the next financial year                                   2,248          2,097
                                                                             Amounts payable later                                    11,952         12,577
Retained earnings at 1 Jan                     27,893       30,106           Total                                                    14,200         14,674
Dividends paid                                 -4,278       -6,415
Acquisition of Corporation's own shares          -336            0          Guarantees
Retained earnings at 31 Dec                    23,279       23,691
                                                                                                                                     31 Dec          31 Dec
Profit/loss­for­the­financial­year             -1,610        4,203           EUR 1,000                                                 2009            2008
                                                                             Bank guarantees due within one year                         607             281
Equity, total                                  31,309       37,468           Bank guarantees due later                                   157             206
                                                                             Total                                                       764             487
Breakdown of distributable funds

                                              31 Dec       31 Dec           Contingent liabilities assumed on behalf
EUR 1,000                                       2009         2008           of Group companies
Fund of invested non-restricted equity          7,499        7,433
Retained earnings                              23,279       23,691          In 2008 Comptel Corporation gave a performance guarantee, still
Profit/loss for the financial year             -1,610        4,203          in force, on behalf of its subsidiary. The total value of this agreement
Total                                          29,168       35,327          is 4 million US Dollars. Comptel gave a guarantee of 700 thousand
                                                                            UK Pound Sterling for its subsidiary in 2009.

                                                                            Derivative instruments

                                                                                                                                     31 Dec          31 Dec
                                                                             EUR 1,000                                                 2009            2008
                                                                             Forward exchange contracts
                                                                             Market value                                               -220            -63
                                                                             Value of underlying instrument                           15,996         14,730

                                                                            Forward exchange contracts are used for hedging purposes.




46                                                                  COMPTEL Financial Statements | Notes to the Financial Statements of the Parent Company, FAS
Shares and Shareholders
The share of Comptel Corporation is listed in the NASDAQ OMX                 the pre-emptive rights of existing shareholders, since the share options
Helsinki under the code CTL1V.                                               are intended as part of an incentive and commitment program for the
     Comptel has one series of shares. Each share equals to one (1) vote     key personnel.
at the Shareholders’ General Meeting.                                             The total number of share options issued is 4,200,000. Of the share
     The share capital of the company has not changed during the year        options, 1,400,000 are marked with the symbol A, 1,400,000 are marked
ended. The company’s share capital on 31 December 2009 amounted              with the symbol B and 1,400,000 are marked with the symbol C. The
to 2,141,096.20 euros, and the total number of shares was 107,054,810.       share options may be exercised to subscribe to a maximum of 4,200,000
                                                                             Comptel shares in total.
Authorisations to the Board of Directors                                          The current share subscription price for option 2006A is EUR 1.69
Authorisation to decide on share issues                                      which corresponds to the trade volume weighted average quotation
The Annual General Meeting on 16 March 2009 granted to the Board             of the Comptel share on the Helsinki stock exchange during 1 April -
of Directors an authorisation to decide on share issues and granting         30 April 2006 deducted by the dividend paid, for option 2006B EUR
special rights entitling to shares. A maximum of 21,400,000 shares can       1.89 which corresponds to the trade volume weighted average quotation
be issued. A maximum of 10,700,000 of the company’s treasury shares          of the Comptel share on the Helsinki stock exchange during 1 April -
held by the company can be conveyed and/or received on basis of the          30 April 2007 and for option 2006C EUR 1.44 which corresponds to the
special rights.                                                              trade volume weighted average quotation of the Comptel share on the
     New shares may be issued and the company’s treasury shares held         Helsinki stock exchange during 1 April - 30 April 2008.
by the company may be conveyed to the company’s shareholders in                   The share subscription period is for option 2006A, 1 November 2008
proportion to their present shareholdings in the company; or waiving         - 30 November 2010, for option 2006B, 1 November 2009 - 30 November
the pre-emptive rights of the shareholders, through a directed share         2011 and for option 2006C, 1 November 2010 - 30 November 2012.
issue if the company has a weighty financial reason to do so, such                As a result of the subscriptions, the share capital of Comptel
as using the shares to develop the company’s capital structure, as           Corporation may be increased by a maximum of 4,200,000 new shares
financing or in implementing acquisitions or other arrangements              or by a total of 84,000 euros. At the end of the financial year, 4,200,000
or in implementing the company’s share-based incentive program.              share options were distributed and these can be exercised to subscribe
     The Board of Directors was authorised to grant option rights and        4,200,000 shares of Comptel. A number of 810,000 of these share op-
other special rights referred to in Chapter 10, Section 1 of the Companies   tions were granted to Comptel’s subsidiary Comptel Communications.
Act, which carry the right to receive, against payment, new shares of the         Comptel’s 2006A share options were listed on Helsinki stock exchange
company or the company’s treasury shares held by the company in such         commencing from 3 November 2008. The trading code for the share op-
a manner that the subscription price of the shares is paid in cash or by     tions 2006A is CTL1VEW106 and ISIN code is FI0009652390. In 2009, a
using the subscriber’s receivable to set off the subscription price.         number of 30,000 options were traded and the closing price was EUR 0.05.
     The subscription price of the new shares and the consideration               Comptel’s 2006B share options were listed on NASDAQ OMX
payable for the company’s own shares shall be recognised under the           Helsinki commencing from 2 November 2009. The trading code is
invested non-restricted equity fund.                                         CTL1VEW206 and ISIN code is FI4000005335. No options were traded
     The authorisation to share issues is valid until 30 June 2010.          in 2009.

Authorisation to repurchase company’s own shares                             Share option scheme 2009
The Annual General Meeting granted the Board of Directors an au-             The Annual General Meeting decided on 16 March 2009 to issue
thorisation to repurchase a maximum of 10,700,000 of the company’s           share options to the key personnel of the Comptel Group as a part of
own shares for developing the company’s capital structure, to be used        the incentive and commitment program.
in financing or implementing acquisitions or other arrangements, for              The total number of share options issued is 4,200,000. Of the share
implementing the company’s share-based incentive programs or to be           options, 1,400,000 are marked with the symbol A, 1,400,000 are marked
conveyed by other means or to be cancelled.                                  with the symbol B and 1,400,000 are marked with the symbol C. The
     Based on this authorisation, a number of 211,350 own shares             share options may be exercised to subscribe to a maximum of 4,200,000
were purchased in 2009.                                                      new shares in the company or existing shares held by the company. The
     The authorisation to repurchase the own shares is valid until           share options now issued can be exchanged for shares constituting a
30 June 2010.                                                                maximum total of 3.8 per cent of the company’s shares and votes of the
                                                                             shares, after the potential share subscription, if new shares are issued
Share option schemes                                                         in the share subscription.
Comptel has currently two share option schemes.                                   The share subscription price will be based on the prevailing market
                                                                             price of the Comptel share on the NASDAQ OMX Helsinki Ltd in April
Share­option­scheme­2006                                                     2009, April 2010 and April 2011. The current share subscription price
The Annual General Meeting decided on 13 March 2006 to issue share           for Comptel share option 2009 A is EUR 0.63 per share, which corre-
options to the key personnel of Comptel Group, as well as to a wholly        sponds to the trade volume weighted average quotation of the share
owned subsidiary of Comptel Corporation. It was decided to disapply          on the NASDAQ OMX Helsinki during 1 April - 30 April 2009.



COMPTEL Financial Statements | Shares and Shareholders                                                                                            47
     The share subscription period for stock options 2009A will be                   Share quotations 2005 - 2009
1 November 2011 - 30 November 2013, for stock options 2009B                          Weighted weekly average, EUR
1 November 2012 - 30 November 2014 and for stock options 2009C
                                                                              3.0
1 November 2013 - 30 November 2015.
     The Board of Directors decides on the distribution of share options      2.5
during the second quarters of 2009, 2010 and 2011. During 2009, a total       2.0
of 1,250,000 share options 2009A have been distributed to the key per-
sonnel of Comptel Group. The rest of the 2009 share options have been         1.5
granted to Comptel Communications Oy to be further distributed.               1.0
     The Corporate Executives and other key persons belonging to
                                                                              0.5
the target group of the share based incentive plan 2009 - 2011 are not




                                                                                                 2005




                                                                                                                       2006




                                                                                                                                              2007




                                                                                                                                                                   2008




                                                                                                                                                                                       2009
included in the share option scheme 2009.

                                                                                              Comptel
Share-based incentive plans                                                                   OMX Helsinki (all shares)
The last earning period of share-based incentive plan 2006 - 2008 for
                                                                                              OMX Helsinki Information Technology
the key personnel ended on 31 December 2008. The reward was based
on the growth of net sales and on the development of operating profit.
The reward for 2008 was paid in 2009 by transferring gratuitously
93,426 company shares and in cash, amounting to EUR 89,716. Bene-
                                                                                     Shares traded 2005 - 2009
ficiaries are prohibited from transferring the shares within two years               Thousand shares/month
from the end of the earning period. There were 16 key persons in the                          101,447
                                                                           12,000
plan at the end of 2008.
     The Board of Directors approved a new share-based incentive plan      10,000
in January 2009. The aim of the plan is to combine the objectives of        8,000
the shareholders and the key personnel in order to increase the value       6,000
of the company and to commit the key personnel to the company. The
                                                                            4,000
plan includes three earning periods, years 2009, 2010 and 2011. The
                                                                            2,000
Board of Directors decides on the earnings criteria at the beginning of
each period. A two-year restriction period will follow each earning pe-         0
                                                                                    2005/01

                                                                                                  2005/07

                                                                                                            2006/01

                                                                                                                        2006/07

                                                                                                                                  2007/01

                                                                                                                                               2007/07

                                                                                                                                                         2008/01

                                                                                                                                                                   2008/07

                                                                                                                                                                             2009/01

                                                                                                                                                                                       2009/07

                                                                                                                                                                                                 2009/12
riod, during which shares cannot be transferred. Should a key person’s
employment or service end during the restriction period, he/she must
gratuitously return the shares paid as reward to the company.
     The potential reward from the plan for the earning period 2009
will be based on the continuance of employment or service of a key
person and on the Comptel Group’s operating profit margin. There           Share trading data
were 13 key persons in the plan at the end of 2009. The President and                                                                       1 Jan - 31 1 Jan - 31 1 Jan - 31
CEO of the Company belongs to the incentive plan provided that he                                                                           Dec 2007 Dec 2008 Dec 2009
holds at least 150,000 Comptel shares until 31 December 2012. The re-       Closing price, EUR                                                       1.42                 0.69               0.78
striction periods of the rewards to be potentially paid to the President    Highest price, EUR                                                       2.29                 1.58               0.96
and CEO, on the basis of continuance of his service, will end in 2012       Lowest price, EUR                                                        1.36                 0.60               0.57
and 2013. A maximum amount in denomination of euro has been                 Weighted average trading
determined for the rewards of the President and CEO. The rewards            price, EUR                                                               1.85                 1.28               0.69
to be paid on the basis of the plan will correspond to the value of         Shares traded, 1,000 shares                                        57,547              30,480              35,838
a maximum total of five million Comptel shares.                             Shares traded, EUR million                                          106.0                39.7                24.3
                                                                            Market capitalisation at the
Management interests                                                        year end, EUR million                                                 151.7                   73.8               83.3
Members of the Board of Directors and the President and CEO hold:
•	 A	total	of	0.571	per	cent	of	the	company’s	outstanding	shares	and		
   share options
•	 0.420	per	cent	of	the	votes	and	share	capital	
•	 The	share	options	can	provide	them	with	0.182	per	cent	of	the	votes		
   and share capital




48                                                                                                                    COMPTEL Financial Statements | Shares and Shareholders
Shareholding by owner group on 31 Dec 2009                                        Largest shareholders on 31 Dec 2009
                                                                                                                                            % of
                                                                     % of total                                                       shares and
                                                         Shares         shares                                                 Shares      votes
Companies                                          21,749,752             20.3    ­­1. Mandatum­Life­Insurance­Company­
Financial and insurance companies                  43,561,021             40.7         Limited                              19,569,925    18.28
Public sector                                      11,436,308             10.7    ­­2. Elisa Corporation                    14,304,000    13.36
Non-profit making entities                            365,882              0.3    ­­3. OP-funds                              8,047,625     7.52
Private households                                 23,054,704             21.5            OP-Finland Small Firms Fund        4,661,802     4.35
Foreign holding and nominee                                                               OP-Delta Fund                      2,085,823     1.95
registered                                          6,887,143               6.4           OP-Nordic Small Firm Fund          1,300,000     1.21
Total­number­of­shares                            107,054,810              100    ­­4. Kaleva Mutual Insurance Company
                                                                                       Group                                 7,816,875     7.30
                                                                                          Kaleva Mutual Insurance Company    7,816,875     7.30
Shareholding by number of shares on 31 Dec 2009                                   ­­5. Varma Mutual Pension Insurance
                                                                                       Company                               5,144,825     4.81
                                                                                  ­­6. ABN AMRO funds                        4,953,173     4.63
                   Number                  % of                           % of
                   of share-             share-          Number           total           Alfred Berg mutual funds           2,714,353     2.54
  Number of shares holders              holders          of shares      shares            ABN AMRO Small Cap Finland Fund 1,416,223        1.32
           1 – 100          2,152          11.0     136,033                0.1            ABN AMRO Optimal Fund                822,597     0.77
        101 – 500          11,803          60.6   2,184,488                2.0    ­­7. The­State­Pension­Fund                2,600,000     2.43
       501 – 1000           1,884           9.7   1,569,920                1.5    ­­8. Aktia funds                           1,867,437     1.74
      1001 – 5000           2,715          13.9   6,627,447                6.2            Investment Fund Aktia Capital      1,100,000     1.03
     5001 – 10000             491           2.5   3,741,391                3.5            Aktia Secura Fund                    517,437     0.48
    10001 – 50000             347           1.8   7,230,081                6.8            Fund Aktia Solida                    250,000     0.23
   50001 – 100000              38           0.2   2,884,677                2.7    ­­9. Etera Mutual Pension Insurance
                                                                                       Company                               1,143,938     1.07
  100001 – 500000              28           0.1   6,517,427                6.1
                                                                                  10. Forssan Seudun Puhelin Oy                989,998     0.92
         500001 –              23           0.1 76,163,346                71.1
                                                                                  11. Erikoissijoitusrahasto­Fourton­Fokus­
              Total        19,481         100.0 107,054,810              100.0         Suomi                                   895,961     0.84
                                                                                  12. Evli funds                               762,700     0.71
                                                                                  13. Ilmarinen Mutual Pension Insurance
                                                                                       Company                                 683,591     0.64
                                                                                  14. Veikko­Laine­Oy                          576,275     0.54
                                                                                  15. Etola Erkki                              555,000     0.52




COMPTEL Financial Statements | Shares and Shareholders                                                                                        49
The Board of Directors’ Proposal for the
Distribution of Parent Company Profit
According to the parent company statement of financial position at 31                                The Board of Directors proposes to the Annual General Meeting the distrib-
December 2009 the parent company’s distributable funds were 29,167,506.81                            utable funds be used as follows:
euro.                                                                                                •	 dividend	of	0.03	euro	per	share	on	the	106,570,656	shares	outstanding	
                                                                                                        which makes in total 3,197,119.68 euro
                                                                                                     •	 to	be	left	in	equity	25,970,387.13	euro	

                                                                                  Helsinki, 8 February 2010
                                                                                          Olli Riikkala
                                    Timo Kotilainen                                                                                             Juhani Lassila
                                    Hannu Vaajoensuu                                                                                           Petteri Walldén
                                                                                          Sami Erviö
                                                                                      President and CEO



Auditors’ Report
To­the­Annual­General­Meeting­of­Comptel­Corporation                                                 financial statements or of the report of the Board of Directors, whether due to
We have audited the accounting records, the financial statements, the report                         fraud or error. In making those risk assessments, the auditor considers internal
of the Board of Directors, and the administration of Comptel Corporation                             control relevant to the entity’s preparation and fair presentation of the financial
for the year ended on December 31, 2009. The financial statements comprise                           statements and the report of the Board of Directors in order to design audit pro-
the consolidated statement of financial position, consolidated statement of                          cedures that are appropriate in the circumstances. An audit also includes evaluat-
comprehensive income, statement of changes in equity, statement of cash                              ing the appropriateness of accounting policies used and the reasonableness of
flows and notes to the consolidated financial statements, as well as the parent                      accounting estimates made by management, as well as evaluating the overall pres-
company’s balance sheet, income statement, statement of cash flows and notes                         entation of the financial statements and the report of the Board of Directors.
to the financial statements.                                                                               The audit was performed in accordance with good auditing practice in
                                                                                                     Finland. We believe that the audit evidence we have obtained is sufficient and
The responsibility of the Board of Directors                                                         appropriate to provide a basis for our audit opinion.
and the President and CEO
The Board of Directors and the President and CEO are responsible for the                             Opinion on the consolidated financial statements
preparation of the financial statements and the report of the Board of Direc-                        In our opinion, the consolidated financial statements give a true and fair view
tors and for the fair presentation of the consolidated financial statements                          of the financial position, financial performance, and cash flows of the group in
in accordance with International Financial Reporting Standards (IFRS) as                             accordance with International Financial Reporting Standards (IFRS) as adopted
adopted by the EU, as well as for the fair presentation of the parent company’s                      by the EU.
financial statements and the report of the Board of Directors in accord-
ance with laws and regulations governing the preparation of the financial                            Opinion on the company’s financial statements
statements and the report of the Board of Directors in Finland. The Board of                         and the report of the Board of Directors
Directors is responsible for the appropriate arrangement of the control of the                       In our opinion, the financial statements and the report of the Board of Directors
company’s accounts and finances, and the President and CEO shall see to it                           give a true and fair view of both the consolidated and the parent company’s
that the accounts of the company are in compliance with the law and that its                         financial performance and financial position in accordance with the laws and
financial affairs have been arranged in a reliable manner.                                           regulations governing the preparation of the financial statements and the report
                                                                                                     of the Board of Directors in Finland. The information in the report of the Board
Auditors’ responsibility                                                                             of Directors is consistent with the information in the financial statements.
Our responsibility is to perform an audit in accordance with good auditing
practice in Finland, and to express an opinion on the parent company’s finan-                        Opinion on the discharge from liability
cial statements, on the consolidated financial statements and on the report of                       and disposal of distributable funds
the Board of Directors based on our audit. Good auditing practice requires                           The consolidated financial statements and the parent company’s financial
that we comply with ethical requirements and plan and perform the audit to                           statements can be adopted and the members of the Board of Directors and the
obtain reasonable assurance whether the financial statements and the report                          President and CEO of the parent company can be discharged from liability for
of the Board of Directors are free from material misstatement and whether                            the period audited by us. The proposal by the Board of Directors regarding
the members of the Board of Directors of the parent company and the Presi-                           the disposal of distributable funds is in compliance with the Limited Liability
dent and CEO have complied with the Limited Liability Companies Act.                                 Companies Act.
     An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements and the report of the                                                         Helsinki, February 8, 2010
Board of Directors. The procedures selected depend on the auditor’s judg-                                                                  KPMG OY AB
ment, including the assessment of the risks of material misstatement of the                                                Pekka Pajamo, Authorized Public Accountant


This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.



50                                              COMPTEL Financial Statements | The Board of Directors´ Proposal for the Distribution of Parent Company Profit and Auditors´ Report
Corporate Governance Statement 2009
Comptel Corporation complies with the Finnish Limited Liability            elects a minimum of three and a maximum of six Board members.
Companies Act, other regulations concerning publicly traded com-           The Board members are elected for one year at a time so that the term
panies, Comptel Corporation’s own Articles of Association and the          of office for all Board members ends at the close of the following years
rules of NASDAQ OMX Helsinki Ltd. In addition, Comptel complies            Annual General Meeting. The Board of Directors elects a chairman
with the Finnish Corporate Governance Code issued by the Securities        and a vice chairman from among its members.
Market Association in 2008. The Corporate Governance Code is                    The Annual General Meeting for 2009 elected the following five
publicly available at www.cgfinland.fi.                                    Board members: Mr Timo Kotilainen, Mr Juhani Lassila, Mr Olli
                                                                           Riikkala (chairman), Mr Hannu Vaajoensuu (vice chairman) and
Duties and responsibilities of executive bodies                            Mr Petteri Walldén.
The highest decision-making bodies in Comptel Corporation are                   As a general rule, the Board of Directors convenes once a month
shareholders at the General Meeting, the Board of Directors, and           and additionally, whenever necessary. In 2009 the Board of Directors
the President and CEO of the Group.                                        convened 11 times (2008: 16). The average attendance of the members
                                                                           was 96 per cent (99).
General Meeting                                                                 All members of the Board are independent of the company and
The highest decision-making power in Comptel Corporation is vested         the company’s significant shareholders.
in the General Meeting. In the General Meeting, shareholders decide
on the adoption of the financial statements, the use of the profit shown   Board Committees
in the balance sheet, the discharge from liability of the Board members    There are two permanent committees within the Board of Directors:
as well as the President and CEO, the number of Board members and          the Audit Committee and the Compensation Committee, both of
the remuneration paid to the Board members and auditors. The Gen-          which consist of three Board members. The Board of Directors elects
eral Meeting elects the Board members and, whenever necessary, the         the chairmen and the members of the committees from among its
auditor and deputy auditors or the public accounting firm. In addition,    members for one year at a time. The Board of Directors has confirmed
any other business mentioned in the notice of the meeting is dealt with    a written charter for the committees that lay down their key duties and
during the General Meeting.                                                operating policies.
     The General Meeting of Comptel Corporation is summoned by                  The Audit Committee is the Board’s preparatory body which
the company’s Board of Directors. According to the company’s Articles      focuses on matters relating to the company’s financial reporting and
of Association, the Annual General Meeting must be held each year          control. The Committee makes sure that the company’s financial re-
before the end of June, on a date set by the Board.                        porting, accounting and financial management as well as external and
     Comptel Corporation’s Annual General Meeting for 2009 was held        internal audit and risk management systems are properly organised.
on the 16th of March 2009. The documents concerning the Annual             The Committee is also responsible for keeping in contact with the
Meeting are available on the company’s website at www.comptel.com.         auditor and assessing the auditors’ performance.
                                                                                In 2009 the Audit Committee convened 4 times (2008: 4). The
Board of Directors                                                         average attendance of the members was 92 per cent (92). In its meeting
The duties and responsibilities of the Board of Directors are primarily    held after the Annual General Meeting for 2009, the Board of Direc-
defined by the Finnish Limited Liability Companies Act and the Ar-         tors elected Mr Juhani Lassila as the Chairman and Mr Timo Koti-
ticles of Association of Comptel Corporation. The Board of Directors       lainen and Mr Petteri Walldén as members of the Audit Committee.
controls and supervises the operational management of the company.              The Compensation Committee is the Board’s preparatory body
The Board of Directors is responsible for ensuring that the company’s      which assists the Board of Directors in matters relating to the terms and
accounting and financial management are properly organised.                conditions of employment and remuneration for the senior manage-
     The Board of Directors has confirmed the written charter that         ment and prepares and develops the company’s compensation systems.
specifies the Board’s duties, business to be handled, meeting practices         In 2009 the Compensation Committee convened 1 time (2008: 4).
and the decision-making processes. According to the written charter,       The average attendance of the members was 100 per cent (100). In its
the Board of Directors handles and decides on all matters that are         meeting held after the Annual General Meeting for 2009, the Board
financially, commercially or fundamentally significant to the Group’s      of Directors elected Mr Olli Riikkala as the Chairman and Mr Timo
operations. The Board of Directors confirms the Group’s strategy,          Kotilainen and Mr Hannu Vaajoensuu as members of the Compen-
budget, corporate structure, major corporate arrangements and invest-      sation Committee.
ments. Furthermore, the Board of Directors approves and confirms the            In addition, whenever needed, the Board may also set temporary
principles of risk management, appoints and discharges the President       working committees to prepare subjects for the Board. In 2009, there
and CEO, and decides on the terms and conditions of employment for         did not convene any working committee of the Board.
the President and CEO.
     The Board of Directors regularly evaluates its own operations and     President­and­CEO
working practices. The Board also carries out a self-assessment in rela-   The President and CEO is responsible for ensuring that the company’s
tion to its operations and working practices once a year.                  accounting is legally arranged and that the company’s financial man-
     As specified in the Articles of Association, the General Meeting      agement is reliably organised.



COMPTEL Annual Report | Corporate Governance Statement                                                                                           51
     The President and CEO is responsible for ensuring that the objec-       Auditing
tives, strategies, future plans, outlines and goals set by the Board of      According to the Finnish Auditing Act, statutory audits comprise
Directors are implemented and achieved by the Comptel Group. The             the auditing of the accounts, financial statements, Board’s report and
President and CEO prepares the issues to be decided by the Board             administration. The General Meeting must be provided with an audi-
of Directors and executes the decisions made.                                tor’s report including an opinion on whether the financial statements
     The President and CEO is appointed by the Board of Directors.           give correct and sufficient information about the Group’s result and
The Board of Directors decides on the terms and conditions of Presi-         financial position at the close of the financial year. The auditors report
dent and CEO´s employment, including the salary, other compen-               to the Board of Directors on their work and observations.
sations and fringe benefits that are defined in the CEO’s contract                KPMG Oy Ab acts as the auditors of Comptel, Mr Pekka Pajamo
of employment.                                                               (APA) being the principal auditor.
     Comptel Corporation’s President and CEO is Mr Sami Erviö.
                                                                             Communications
Corporate­Executives                                                         All essential information concerning Comptel’s corporate governance
The duty of the Corporate Executives is to assist the President and          as well as the stock exchange and press releases are published on the
CEO. Corporate Executives include the directors of the business units        company’s website.
and the units supporting business operations.
     Comptel’s management of business operations is based on the             The main features of the internal control and risk manage-
operations of the profit and cost units. Comptel Corporation’s subsidi-      ment systems pertaining to the financial reporting process
aries and affiliated companies operate within the respective business        Objectives of internal control
areas. The Corporate Executives are responsible for integrating the          Internal control comprises all processes that are designed to provide
activities of the Group and its parts into an operating plan associated      reasonable assurance regarding the achievement of the company’s ob-
with the annual budget to implement the Group’s strategies. During           jectives in the following matters: the efficiency of operations, cost-effec-
the year, the results of the operations relative to the budget and operat-   tive use of resources, reliability of financial reporting and compliance
ing plan are reported monthly, and the causes of any deviations as well      with the laws and regulations as well as the internal principles policies.
as the measures taken to correct them are properly documented.                    Internal control is an essential part of Comptel’s corporate govern-
     In 2009, the Group Executives were, in addition to the President        ance. Comptel’s Board of Directors, management and other personnel
and CEO, the business area leaders Mr Harri Palviainen (Europe) until        take part in internal control processes.
26 August, Mr Mika Korpinen (Asia-Pacific), Mr Youssef Kermoury                   The objective of Comptel’s internal control is to ensure that:
(Middle East and Africa) and Mr Ricardo Carreon (Americas), Mr               •	 the	company’s	operations	are	efficient	and	profitable
Minesh Patel responsible for Global Alliances and Sales Development,         •	 financial	and	operational	information	is	reliable
Ms Arnhild Schia responsible for Strategic Marketing, Mr Simo                •	 the	entire	Group	complies	with	the	regulations	and	policies.
Sääskilahti responsible for Products and Solutions, Mr Gareth Senior              Internal control is not a separate process, but it is integrated into
(CTO), Mr Markku Pirskanen (CFO as of 20 April, Mr Veli Matti                the company’s day-to-day operations. Internal control covers all of
Salmenkylä until 15 March), Ms Niina Pesonen, responsible for                Comptel processes, policies and organisational structures that help
Human Resources, and Mr Markku Järvenpää responsible for Global              to ensure that the company is achieving its objectives, that the busi-
Operations Support.                                                          ness conduct is ethical, that the assets are managed responsibly and
     In 2009 the Corporate Executives convened 6 times (11).                 that financial reporting is organised properly. It includes for example
                                                                             reporting, approval practices and information on the compliance with
Insider administration                                                       the policies.
Comptel complies with the insider guidelines of NASDAQ OMX
Helsinki Ltd. In accordance with the Securities Market Act, Comptel          Control environment
maintains a register containing information on the so-called insiders        The foundation of Comptel’s internal control is its values: Reliability,
with the duty to declare, in the SIRE system of Euroclear Finland Ltd.       Professional Excellence, Responsibility and Fairness. The company has
Insiders comprise permanent insiders and project-specific insiders.          also approved the code of conduct that guides the Group’s operations.
     At the end of 2009, there were 17 insiders with the duty to declare     The values and the code of conduct are reflected in the day-to-day
(14) and 83 company-specific permanent insiders (84). The insiders           operations as well as in the internal guidelines, processes and prac-
with the duty to declare include the members of the Board of Direc-          tices, thus developing the corporate culture.
tors, the CEO, Corporate Executives and the principal auditor.                    Comptel’s management system is based on performance manage-
     Comptel’s insiders are obliged to comply with the so-called closed      ment. The strategy process controls the establishment of objectives.
window rule which starts three weeks prior to the announcement of            The annual Group-level financial and other targets are translated into
an interim report and financial statements and ends 24 hours after the       targets for business and other units. Target setting is an integral part
announcement of such. Comptel does not apply the ’open window’ rule.         of each employee’s performance management in Comptel. Duties and
     An updated list of the insiders with the duty to declare, their con-    responsibilities are given in accordance with the strategy to promote
nections and their holdings is available on the company’s website.           the company’s objectives.



52                                                                                               COMPTEL Annual Report | Corporate Governance Statement
     The achievement of the Group’s and individual business units’ an-         authorisation to sign agreements, procurement rights and approval
nual objectives is followed up through monthly management report-              practices concerning payments. The Accounting Manual contains
ing. The Corporate Executives also regularly follow up on the reliabil-        the charts of account and guidelines on the use of expense accounts
ity of the company’s financial reporting. Comptel’s financial reporting        for those approving invoices.
uses an ERP system. The Group’s Financial Administration monitors                   Comptel’s Quality System defines the company’s key processes
the realisation of internal and external accounting and reconciles the         and duties as well as the related roles, responsibilities, guidelines,
possible differences between the two.                                          documentation, best practice policies and quality indicators. Comptel’s
     Comptel applies the International Financial Reporting Standards           customer deliveries, software development and development of inter-
(IRFS). Ensuring the reliability of financial reporting requires good          nal processes comply with the project management process which is
organisation of the financial administration and accounting systems.           described in the company’s quality management guidelines.
The financial reporting process is monitored by the Board of Directors’             Revenue recognition for long-term customer projects is essential
Audit Committee. In connection with the statutory audit, the auditor           in defining Comptel’s net sales and profit. The percentage of comple-
reviews the control environment of the financial reporting as part of          tion method, and control points have been internally defined and
auditing the administration.                                                   approved. Managing, controlling and monitoring the key process
                                                                               of project related revenue recognition is essential for the business.
Risk assessment
Risk management is an important part of Comptel’s internal control.            Information and communication
The two are integrated on the process level. Risk management refers            The internal control system needs sufficient and reliable communi-
to a systematic process to identify, evaluate and control risks due to         cation within the organisation. The Corporate Executives follow up
external factors as well as risks arising from the Group’s own activity.       on the achievement of the company’s financial and other objectives
     Comptel’s risk management system aims at minimising the det-              in regular meetings. The Financial Administration is responsible for
rimental impacts of risks on the Group’s profit. The Board of Direc-           preparing monthly reports and regularly updating the financial fore-
tors has ratified the principles of risk management defining the risk          cast. The Group uses a common reporting system.
management objectives and general practices, and also the tasks and                 The company’s guidelines and manuals are available to all em-
responsibilities connected with risk management.                               ployees on the Group’s intranet. The Corporate Communications
     The Chief Financial Officer is in charge of coordinating risk man-        is responsible for the internal communication channels and for
agement within the Group. As a general rule, the business units are            Comptel’s external communications.
responsible for identification and management of any and all risks that
have an impact on their operations. Risk evaluation and management             Monitoring
are an important part of the Group’s annual business planning and              Monitoring refers to processes that are used to assess Comptel’s system
strategy process, budgeting, as well as the preparatory and decision-          of internal control and its performance. Monitoring is performed both
making processes connected with commercial offers, agreements and              on an ongoing basis and through separate evaluations including qual-
investments and other operative activities.                                    ity audits, internal and external audits.
     In addition, the risk management system is based on monthly                    The quality audits are carried out by the company’s internal quality
reports that are used to track the development of the financial posi-          organisation in accordance with the annual plan.
tion, net sales, profitability, orders, deliveries, trade receivables, order        An internal audit is carried out according to the annual plan in
backlog and order flow, which in turn enable monitoring the develop-           which the auditing targets are defined. The actual audit is executed in
ment of the entire Group’s results. The internal reporting is carried out      chosen locations based on a prepared auditing plan. The audit focuses
by business units during the meetings of the Corporate Executives and          on the assessment of business operations, the implementation and
in the audits of the Group’s support functions.                                realisation of financial and administrative processes in practice, and
                                                                               the compliance of good corporate governance. The audit also ensures
Control activities                                                             the compliance of all permissions, reports and obligations.
Comptel’s internal control system includes human resources man-                     Within Comptel Corporation, internal audits belong to the
agement policies, such as compensation and benefits, personnel                 Financial Administration’s responsibilities, and it is primarily carried
development, recruitment and resourcing management. Individual                 out by the company’s own personnel. Whenever necessary, external
objective and appraisal processes enable the evaluation of employees’          experts are used to complement the audit activities. The internal audit
performances on an individual level. The Human Resources function              is reported to the Board of Directors’ Audit Committee.
is responsible for maintaining and developing the company’s                         The external auditor verifies that the company’s annual accounts
HR processes.                                                                  are correct and monitors the company’s quarterly reporting. In ad-
     Comptel has confirmed the corporate approval rights. The                  dition, the auditors report to the Board of Directors in an ongoing
Delegation of Authority defines the situations requiring prior approval,       fashion regarding the administration and operations.




COMPTEL Annual Report | Corporate Governance Statement                                                                                               53
Board of Directors
OLLI­RIIkkALA,                                                          TIMO­kOTILAINEN
born 1951, M.Sc. (Engineering), MBA                                     born 1959, M.Sc. (Engineering)
Chairman of the Board since 2005                                        Member of the Board since 2005
Professional experience                                                 Professional experience
GE­Healthcare                                                           Nixu­Oy, Managing Director, 2006 -
Senior Advisor, 2004 - 2006
                                                                        Nokia Networks
Senior Executive, 2003 - 2006
                                                                        Vice President, Head of the EMEA Customer Business Team, 2002 - 2003
CEO GEMS/IT Europe, Middle East and Africa, 2003 - 2004
                                                                        Director, Head of the Nordic Customer Business Team, 2001 - 2002
Instrumentarium Corporation                                             Director, Mobile Internet Applications, Head of the Marketing and Sales,
Member of the Board of Directors, 1987 - 2003                           2000 - 2001
President and CEO, 1997 - 2003                                          Sales Director and General Manager, South Europe, 1998 - 2000
Executive VP, 1995 - 1997                                               Sales Director and General Manager, North Europe, 1996 - 1998
Executive Director, Health Care Group, 1990 - 1997                      Account Manager, Finland, 1993 - 1996
Several managerial positions in 1979 - 1990
                                                                        Hewlett-Packard­Oy, Account Manager, 1991 - 1993
Board memberships
                                                                        Solid Information Technology, Sales Manager, 1990 - 1991
Nexstim­Oy, Deputy Chairman of the Board, 2009 -
Tieto Corporation, Vice Chairman of the Board, 2008 -, Member, 2004 -   Proha Oyj, Consultant, 1987 - 1990
Fastems Oy Ab, Chairman of the Board, 2007 -
                                                                        Comptel shares: 38,143
Helvar­Oy­Ab, Chairman of the Board, 2007 -
Oriola-KD Corporation, Chairman of the Board, 2006 -
                                                                        JUhANI­LASSILA
Instrumentarium­Scientific­Foundation, Member, 2004 -
                                                                        born 1962, M.Sc. (Economics)
Helvar­Merca­Oy­Ab, Chairman of the Board, 2004 -, Member, 1999 -
                                                                        Member of the Board since 2006
Biomedicum Foundation, Member, 2000 -
HYKS-Instituutti­Oy, Member, 2000 -                                     Professional experience
Appointed into the Finnish Academy of Technology, 2002                  Agros Oy, Managing Director, 2005 -
Comptel shares: 111,183                                                 GE­Healthcare, Finance integration leader for Instrumentarium
                                                                        Corporation and GEMS/IT, 2003 - 2004
HANNu VAAjOENSuu
                                                                        Instrumentarium Corporation
born 1961, M.Sc. (Economics)
                                                                        Director of Group Finance and Group Treasury, 1999 - 2004
Vice Chairman of the Board since 2005
                                                                        Group Treasurer, 1996 - 1999
Professional experience
                                                                        Postipankki Oy, Financial analyst, 1988 - 1996
Basware Corporation
Chairman of the Board, 2010 -                                           Instrumentarium Corporation, Investment Analyst, 1987 - 1988
Full-time Chairman of the Board, 2005 - 2010
                                                                        Board memberships
CEO, 1999 - 2004
                                                                        Lassila & Tikanoja plc, Vice Chairman of the Board, 2007 -, Member, 2001 -
Partner, Executive Director, 1991 - 1999
                                                                        Suominen­Yhtymä­Oy, Member of the Board, 2005 -
Consulting Director, 1990 - 1991
                                                                        Evald­and­Hilda­Nissi­Foundation, Chairman of the Board, 2003 -
Consultant, 1987 - 1990
                                                                        Comptel shares: 33,986
Execuplan­Oy, Software Specialist, 1985 - 1987
Board memberships                                                       PETTERI­WALLDéN
Basware Corporation, Member of the Board, 1990 -, Chairman 2005 -       born 1948, M.Sc. (Engineering)
Inventure Oy, Member of the Board, 2009 -                               Member of the Board since 2009
Nervogrid Oy, Member of the Board, 2009 -
                                                                        Professional experience
Proha Plc, Member of the Board, 2009 -
                                                                        Alteams Oy, President and CEO, 2007 -
Efecte­Corp., Chairman of the Board, 2008 -, Member, 2005 -
Profit­Software­Oy, Chairman of the Board, 2008 -                       Onninen Oy, President and CEO, 2001 - 2005
Biocomputing Platforms Ltd Oy, Member of the Board, 2008 -
                                                                        Ensto­Oy, President and CEO, 1996 - 2001
Sede Oy, Chairman of the Board, 2007 -
                                                                        Nokia Cables Ltd, President and CEO, 1990 - 1996
Comptel shares: 50,501
                                                                        Sako Ltd, President, 1987 - 1990
                                                                        Nokia Cables Ltd, General Manager, 1983 - 1986
                                                                        Board memberships
                                                                        Teleste Corporation, Member of the Board, 2009 -
                                                                        Tikkurila Oy, Member of the Board, 2008 -
                                                                        Kuusakoski Group Oy, Member of the Board, 2007 -
                                                                        Empower­Oy, Member of the Board, 2007 -
                                                                        Nokian Tyres Oyj, Chairman of the Board 2006 -, Member, 2005 -
                                                                        eQ Oyj, Member of the Board, 2005 -
The­holdings­of­board­members­and­corporate­executives­are­as­per­
                                                                        S.E.­Mäkinen­Logistics­Oy, Member of the Board, 1995 -
31­December­2009.­Up-to-date­information­on­ownership­is­available­
at­www.comptel.com/investors.                                           Comptel shares: 16,000




54                                                                                                         COMPTEL Annual Report | Board of Directors
Corporate Executives
As of January 2010


SAMI ERVIö                                                                 MINESh­PATEL
born 1962, M.Sc. (Engineering), MBA                                        born 1964, Honours degree in Chemistry & Biochemistry
President and CEO of Comptel since 2005.                                   Senior Vice President, Global Alliances & Sales Development
Held several specialist and senior management positions in Instrumenta-    Joined Comptel in 2008, Corporate Executive since 2009. Has previously
rium in 1987 - 2005, such as sales, marketing and R&D in Datex-Ohmeda      worked in Axiom Systems as Executive Vice President of world wide
division and as Business Development Director of Instrumentarium           operations 2001 - 2008. Has also worked at Micromuse (IBM) and at
Corporation. His latest positions were Managing Director of subsidiary     Application and Telecoms Division of Oracle.
Deio, which provides IT systems for healthcare, and General Electric’s
                                                                           Comptel share options 2006: 10,000
European Integration Director for Instrumentarium.
Comptel shares: 200,000; share options 2006: 210,000                       NIINA PESONEN
                                                                           born 1965, M.Sc. (Social and Behavioural)
SIMO­SääSkILAhTI                                                           Senior Vice President, Human Resources
born 1971, M.Sc. (Engineering Physics; Economics)
                                                                           Joined Comptel in 2007, Corporate Executive since 2007. Has previously
Senior Vice President, Products and Solutions, Deputy CEO
                                                                           held several HR management and development positions in Nokia 1992
Joined Comptel in 2001, Corporate Executive since 2003. Has previously     - 2007. Her latest positions were Business HR Director for the Delivery
worked as Head of Convergent Charging Business, as CFO and as              Operations of Nokia Networks and HR Head for North East Region in
Corporate Planning Manager. Before joining Comptel worked as               Nokia Siemens Networks.
Management Consultant at McKinsey & Company.
                                                                           Comptel shares: 4,432; share options 2006: 10,000
Comptel shares: 39,127; share options 2006: 30,000
                                                                           MARKKu PIRSKANEN
MARKKu jäRVENPää                                                           born 1964, M.Sc. (Economics)
born 1958, M.Sc. (Engineering)                                             Chief Financial Officer
Senior Vice President, Global Operations Support
                                                                           Joined Comptel in 2009, Corporate Executive since 2009. Has previously
Joined Comptel in 2000, Corporate Executive since 2005. Has previously     worked as the CFO and Director of Project Sales unit in Finlayson Oy,
worked as Head of Customer Services and Technology, as Head of EDB         as CFO of F-Secure Corporation and as Financial Director of Santasalo-
Telecom integration, as head of Provisioning Business and as IT Manager.   Jot Oy.
Before joining Comptel worked as IT Manager in Oy Suomen Michelin
                                                                           Comptel shares: 7,000
Ab and as IT Project Manager in Michelin SA, Switzerland.
Comptel shares: 27,549; share options 2006: 30,000                         ARNhILD­SChIA
                                                                           born 1963, Master degree in Computer Science, diploma of Business
YOUSSEF­kERMOURY                                                           Management
born 1970, B.Sc. (Computer Science)                                        Senior Vice President, Strategic Marketing
Senior Vice President, Middle East and Africa
                                                                           Joined Comptel in 2005, Corporate Executive since 2005. Has previously
Joined Comptel in 1996, Corporate Executive since 2009. Has previously     worked as Head of South and West Europe, Asia-Pacific and Americas
worked as Head of Global Services and Regions, as Head of Technical        and as Head of Market Development. Before joining Comptel worked
Consultation and Training Services, as Head of Consultation Services       as President and CEO of EDB Telecom AS and Incatel AS, and as EVP
and as Head of Customer Services APAC.                                     of Telesciences Inc.
Comptel shares: 3,500; share options 2006: 50,000                          Comptel shares: 36,075; share options 2006: 30,000

TIMO­kOISTINEN                                                             GARETh­SENIOR
born 1957, M.Sc. (Engineering)                                             born 1970
Senior Vice President, Europe                                              Chief Technology Officer
Joined Comptel in 2010, Corporate Executive since 2010. Has previously     Joined Comptel in 2008, Corporate Executive since 2008. Has previously
held various senior sales management and business development posi-        worked at Axiom Systems as CEO in 2004 - 2008 and as CTO in 2000
tions in Nokia Siemens Networks since 1997. Before that worked             - 2004. Has 20 years experience of IT development, of which 15 years
in Hewlett-Packard in sales and sales management positions.                working directly for National Carriers with a focus on Service Fulfillment.
No holding in Comptel                                                      Comptel shares: 4,432; share options 2006: 110, 000

MIKA KORPINEN
born 1961, Engineer of Telecommunications
Senior Vice President, Asia-Pacific
Joined Comptel in 2001, Corporate Executive since 2009. Has previously
worked as Head of Asia-Pacific region, as Head of Hong Kong office and
as Sales Director of North Asia. Before joining Comptel has worked
as Senior Manager at Elcoteq Asia Ltd. in Hong Kong and as General
Manager of Tecnomen in Hong Kong.
Comptel shares: 2,659; share options 2006: 30,000




COMPTEL Annual Report | Corporate Executives                                                                                                      55
Shareholder Information
Annual General Meeting                                                        The financial statements and the proposals of the Board of Directors
The Annual General Meeting of Comptel shareholders will be held at       are available on Comptel Corporation’s website at www.comptel.com
the Finlandia Hall, terrace hall, Mannerheimintie 13 e, 00100 Helsinki   from 1 March 2010. Copies of the documents will be sent to shareholders
starting at 2 pm on Monday, 22 March 2010.                               upon	request,	tel.	+358	9	700	11793.
     Shareholders intending to attend the Meeting shall notify the
company thereof by 10 am Finnish time on 17 March 2010, either           Changes of name and address
writing to Comptel Corporation, P.O.Box 1000, FI-00181 Helsinki,         Shareholders should notify the book-entry securities register where
Finland	or	by	telephone	at	+358	9	700	11793,	or	by	telefax	at	           their book-entries are registered of any changes in name and/or
+358	9	700	11224	or	by	email	to	yhtiokokous@comptel.com.                 address.
     Shareholders registered on Wednesday 10 March 2010 in the
Company’s Shareholder Register maintained by Euroclear Finland Ltd       Publication of interim reports 2010
shall have the right to attend the Annual General Meeting. Any proxies   •	 January	-	March,	Thursday,	22	April
shall be sent to the above address together with the notification.       •	 January	-	June,	Thursday,	22	July
                                                                         •	 January	-	September,	Tuesday,	26	October
Dividend and financial statements
The Board of Directors has decided to propose to the Annual General      Comptel publishes its interim reports, financial statements and annual
Meeting that a dividend of 0.03 euros per share be paid for year 2009.   reports in English and Finnish. The financial reports are available
The dividend decided by the Annual General Meeting will be paid          on Comptel’s website at www.comptel.com under Investors. They
to shareholders registered on 25 March 2010 in the Company’s Share-      may	also	be	ordered	by	email	(communications@comptel.com)	or	by	
holder Register maintained by the Euroclear Finland Ltd. The Board       phone	(+358	9	700	11793).
of Directors proposes to the Annual General Meeting that the dividend
be paid on 14 April 2010.                                                Investor contacts
                                                                         Samppa Seppälä, Director,
                                                                         Investor Relations and Corporate Communications
                                                                         Tel.	+358	9	700	1131,	fax	+358	9	700	11375
                                                                         Email:	samppa.seppala@comptel.com



Annual Summary
Stock Exchange Releases of Comptel Corporation in 2009

Expiry of Comptel Corporation’s 2001 Share Options                                                                                      2 January
Comptel to Start Personnel Negotiations for Reducing Costs                                                                              8 January
The Board of Directors of Comptel Corporation Resolved on an Incentive Plan for Key Personnel                                         20 January
Comptel Concludes Personnel Negotiations                                                                                              9 February
Notice of Annual General Meeting                                                                                                    12 February
Comptel Corporation’s Financial Statements for 2008                                                                                 12 February
Comptel Share Incentives                                                                                                            19 February
Markku Pirskanen Has Been Nominated as the New CFO                                                                                  23 February
Comptel’s Annual Report 2008 Published                                                                                                   6 March
Resolutions Passed by Comptel Corporation’s Annual General Meeting                                                                     16 March
Interim Report of Comptel Corporation 1 January - 31 March 2009                                                                          29 April
Share Subscription Price with Comptel Share Options 2009A and Market Value of the Option Serie 2009A                                        8 May
Comptel Has Received a Major Order in India                                                                                                22 July
Interim Report of Comptel Corporation 1 January - 30 June, 2009                                                                            29 July
Changes in Comptel Corporation Executive Management                                                                                    26 August
Interim Report of Comptel Corporation 1 January - 30 September 2009                                                                  28 October
Comptel Corporation’s Share Options 2006B Will Be Listed                                                                             30 October
Comptel’s Financial Reporting and Annual General Meeting in 2010                                                                    4 November
Changes in the Management of Comptel Corporation                                                                                   27 November
Repurchase of Comptel Corporation’s Own Shares                                                                                      2 December
The Date of Comptel’s Annual General Meeting                                                                                       21 December

Comptel Corporation’s stock exchange releases are available on Comptel’s website at www.comptel.com.



56                                                                                 COMPTEL Annual Report | Shareholder Information and Annual Summary
Contact Information
Helsinki, Finland                    Reading, UK                              Beijing, China                        São Paulo, Brazil
Headquarters                         69 Suttons Business Park                 Air China Plaza Room 809              World Trade Center São Paulo
Comptel Corporation                  Sutton Park Avenue                       Xiaoyun Road No 36                    Av. das Nações Unidas
P.O.Box 1000, FI-00181 Helsinki      Earley, Reading, RG6 1AZ, UK             Chaoyang District (100027)            12.551 - 9º andar
Visiting address:                    Tel. +44 (0) 118 929 4000                Beijing,, China                       Cep: 04578-903 - São Paulo -
Salmisaarenaukio1                    europe@comptel.com                       Tel. +86 10 8447 5050                 Brasil
Tel. +358 9 700 1131                                                          Fax +86 10 8447 5060                  Tel. +55 11 3443-7459
Fax +358 9 700 11375                 Milan, Italy                             asia@comptel.com                      Fax +55 11 3443-7607
europe@comptel.com                   Via Vincenzo Monti, 8                                                          americas@comptel.com
                                     20123 Milano, Italy                      Hong Kong, China
Oslo, Norway                         Tel. +39 02 46712296                     Room 1005, 10th Floor                 Buenos Aires, Argentina
P.O.Box 519, N-1327 Lysaker          europe@comptel.com                       Jubilee Center, 18 Fenwick Street     Victoria Ocampo 360 - piso 3
Visiting address:                                                             Wanchai, Hong Kong                    C1107BGA Buenos Aires
Arnstein Arnebergsvei 28             Moscow, Russia                           Tel. +852 2530 0879                   Argentina
Tel: +47 815 55 880                  Ul. Staraya Basmannaya, 38/2             Fax +852 2530 0325                    Tel. +54 11 4515 6300
europe@comptel.com                   105066 Moscow, Russia                    asia@comptel.com                      Fax +54 11 4515 6301
                                     Tel. +7 903 660 6537                                                           americas@comptel.com
Bergen, Norway                       europe@comptel.com                       New Delhi, India
Bredalsmarken 15                                                              CS3, 5th Floor, Lobe No. 1            México City, Mexico
N-5006 Bergen                        Dubai, United Arab Emirates              The Corenthum                         Blvd. Manuel Ávila Camacho 36
Tel. +47 815 55 880                  Dubai Internet City                      A-41 Sector 62                        Piso 10 y 12
Fax +47 55 36 96 02                  Building # 16, Office 133                Noida 201307, UP India                Col. Lomas de Chapultepec
europe@comptel.com                   Dubai, United Arab Emirates              Tel. +91 120 3005500                  11560 México, D.F.
                                     Tel. +971 4 361 6810                     Fax +91 120 4280560                   Tel. +52 55 9171 1652
Bodø, Norway                         Fax +971 4 368 6850                      asia@comptel.com                      americas@comptel.com
Jernbaneveien 69                     mea@comptel.com
N-8002 Bodø                                                                   Sydney, Australia                     Arlington, Virginia, USA
Tel. +47 815 55 880                  Cape Town, South Africa                  Level 12, Suite 16                    1655 North Fort Myer Drive
Fax +47 75 53 32 77                  19 Highgrove, Tokai Road, Tokai          100 Walker Street                     Suite 700, Arlington, Virginia
europe@comptel.com                   7945, Cape Town, South Africa            North Sydney, NSW 2060                22209 USA
                                     Tel. (mobile) +27 796 736 247            Australia                             Tel. +1 703 351 1141
Lillehammer, Norway                  mea@comptel.com                          Tel. +61 2 9956 7855                  Fax +1 703 351 1143
Vormstuguveden 40                                                             Fax +61 2 9956 7955                   americas@comptel.com
N-2624 Lillehammer                   Kuala Lumpur, Malaysia                   asia@comptel.com
Tel. +47 815 55 880                  L5-E-6, Enterprise 4
Fax +47 61 26 26 27                  Technology Park Malaysia
europe@comptel.com                   Bukit Jalil, 57000 Kuala Lumpur
                                     Malaysia
                                     Tel. +603 8995 6222
                                     Fax +603 8996 1888
                                     asia@comptel.com




                                                                    Bodø
                                                             Lillehammer
                                                             Bergen                Helsinki (HQ)
                                                                       Oslo              Moscow
                                                         Reading

                                                                           Milan
                    Arlington,                                                                                           Beijing
              Washington D.C.
                                                                                                   New Delhi
                                                                                    Dubai                                 Hong Kong
            México City

                                                                                                     Kuala Lumpur


                                         São Paulo

                                                               Cape Town                                                                Sydney
                          Buenos Aires
                                                             Customer Support Centre
                                                             Sales Office
                                                             Representative Office
Comptel Corporation
Salmisaarenaukio 1
P.O.Box 1000, FI-00181 Helsinki
Tel. +358 9 700 1131
Fax +358 9 700 11375
www.comptel.com




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