Public Tender Offer by Nokia Solutions and Networks Oy for All Issued and Outstanding Shares and Option Rights in Comptel Corporation

TENDER OFFER DOCUMENT 23 February 2017

Public Tender Offer by Nokia Solutions and Networks Oy for all issued and outstanding shares and option rights in Comptel Corporation

Nokia Solutions and Networks Oy (the “Offeror”) hereby offers to acquire, in accordance with Chapter 11 of the Finnish Securities Market Act (746/2012, as amended) and the terms and conditions of this tender offer document, all of the issued and outstanding shares (the “Shares” or, individually, a “Share”) in Comptel Corporation (the “Company” or “Comptel”) and all of the option rights granted under the 2014 option plan of the Company (the “2014 Option Rights”) and under the 2015 option plan of the Company (the “2015 Option Rights”, and together with the 2014 Option Rights, the “Option Rights”) that are not held by Comptel or any of its subsidiaries (the “Tender Offer”).

The Offeror is a wholly-owned indirect subsidiary of Nokia Corporation (“Nokia”) incorporated under the laws of Finland. Nokia's shares are listed on the official list of Nasdaq Helsinki (“Nasdaq Helsinki”).

Comptel is a public limited company incorporated under the laws of Finland with its Shares and Option Rights 2014A and 2014B listed on the official list of Nasdaq Helsinki.

Nokia and Comptel have on 8 February 2017 (the “Signing Date”) entered into a Transaction Agreement (“Transaction Agreement”) under which Nokia makes the Tender Offer through the Offeror. For details please see “Summary of the Tender Offer”.

The price offered for each Share validly tendered in the Tender Offer is EUR 3.04 in cash (the “Share Offer Price”). The price offered for Option Rights validly tendered in the Tender Offer is EUR 2.56 in cash for each 2014A Option Right, EUR 2.16 in cash for each 2014B Option Right, EUR 1.53 in cash for each 2014C Option Right, EUR 2.15 in cash for each 2015A Option Right and EUR 2.15 in cash for each 2015B Option Right (together, the “Option Right Offer Price”).

The Share Offer Price represents a premium of approximately 51.2 percent compared to the volume-weighted average trading price of the Comptel Shares on Nasdaq Helsinki during the 12-month period preceding the date of announcement of the Tender Offer, a premium of approximately 31,0 percent compared to the volume-weighted average trading price during the 3-month period preceding the announcement of the Tender Offer, and a premium of approximately 28.8 percent compared to the closing price of the Shares on Nasdaq Helsinki on 8 February 2017, the last trading day before the announcement of the Tender Offer.

The acceptance period for the Tender Offer (the “Offer Period”) will commence on 27 February 2017 at 9:30 am (Finnish time) and expire on 29 March 2017 at 4:00 pm (Finnish time) unless the Offer Period is extended. For details please see “Terms and Conditions of the Tender Offer”.

The completion of the Tender Offer is subject to the satisfaction of the conditions described under section “Terms and Conditions of the Tender Offer – Conditions to Completion of the Tender Offer” of this tender offer document (the “Tender Offer Document”). The Offeror reserves the right to waive any conditions to completion of the Tender Offer.

Shareholders representing together approximately 48.3 percent of the Shares have subject to certain customary conditions irrevocably undertaken to accept the Tender Offer. The Board of Directors of Comptel recommends that the shareholders and holders of Option Rights accept the Tender Offer.

The information on this front page should be read in conjunction with, and is qualified in its entirety by, the more detailed information in this Tender Offer Document, in particular in section “Terms and Conditions of the Tender Offer”.

THE TENDER OFFER IS NOT BEING MADE DIRECTLY OR INDIRECTLY IN ANY JURISDICTION WHERE PROHIBITED BY APPLICABLE LAW AND THIS TENDER OFFER DOCUMENT AND RELATED ACCEPTANCE FORMS ARE NOT AND MAY NOT BE DISTRIBUTED, FORWARDED OR TRANSMITTED INTO OR FROM ANY JURISDICTION WHERE PROHIBITED BY APPLICABLE LAW BY ANY MEANS WHATSOEVER INCLUDING, WITHOUT LIMITATION, MAIL, FACSIMILE TRANSMISSION, E-MAIL OR TELEPHONE. IN PARTICULAR, THE TENDER OFFER IS NOT MADE IN AND THIS TENDER OFFER DOCUMENT MUST UNDER NO CIRCUMSTANCES BE DISTRIBUTED INTO THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG OR ANY OTHER JURISDICTION WHERE PROHIBITED BY APPLICABLE LAW. Financial Advisor to Nokia and the Offeror and Arranger of the Tender Offer

Nordea Bank AB (publ), Finnish Branch

IMPORTANT INFORMATION This Tender Offer Document has been prepared in accordance with Finnish law, including the Securities Market Act (746/2012, as amended “SMA”), Decree 1022/2012 of the Ministry of Finance and regulations and guidelines 9/2013 (FSA 10/01.00/2013) issued by the Finnish Financial Supervisory Authority (“FSA”). The Tender Offer Document and the Tender Offer are governed by Finnish law and any disputes related thereto shall be exclusively settled by Finnish courts of competent jurisdiction. The Offeror has undertaken to follow the Helsinki Takeover Code issued by the Securities Market Association referred to in Chapter 11 Section 28 of the SMA. According to the statement issued by the Board of Directors of Comptel on 21 February 2017 and attached as Annex A to this Tender Offer Document, Comptel has also undertaken to follow said Helsinki Takeover Code. This Tender Offer Document is available in Finnish and English. In the event of any discrepancy between the two language versions of the Tender Offer Document, the Finnish language version shall prevail. The FSA has approved the Finnish language version of the Tender Offer Document but is not responsible for the accuracy of the information presented therein. The decision number of such approval is FSA 4/02.05.05/2017. The Tender Offer Document will be available in Finnish from 27 February 2017 onwards at the branch offices of Nordea Bank (as defined below), at Nasdaq Helsinki, Fabianinkatu 14, FI-00130 Helsinki, Finland, and at Offeror's headquarters at Karaportti 3, FI-02610 Espoo, Finland. Electronic version of the Tender Offer Document will be available in Finnish from 24 February 2017 onwards online at www.nordea.fi/osakkeet, www.comptel.com/nokia-tender-offer and www.nokia.com/fi_fi/sijoittajat/yritysostot-ja-myynnit, and in English from 24 February 2017 onwards online at www.nordea.fi/equities, www.comptel.com/nokia-tender-offer and www.nokia.com/en_int/investors/acquisitions-divestments. As permitted under Finnish law, the Offeror may purchase Shares in the Company also on Nasdaq Helsinki or otherwise prior to the expiry of the Offer Period or any extended Offer Period, as the case may be, at a price not exceeding the Share Offer Price of EUR 3.04 per Share. The Offeror may also, as permitted under Finnish law, purchase Option Rights in Nasdaq Helsinki or otherwise prior to the expiry of the Offer Period or the extended Offer Period at a price not exceeding the relevant Option Right Offer Price. The Tender Offer is not being made directly or indirectly in any jurisdiction where prohibited by applicable law and this Tender Offer Document and related acceptance forms are not and may not be distributed, forwarded or transmitted into or from any jurisdiction where prohibited by applicable law by any means whatsoever including, without limitation, mail, facsimile transmission, e-mail or telephone. In particular, the Tender Offer is not made in and this Tender Offer Document must under no circumstances be distributed into the United States, Canada, Japan, Australia, South Africa or Hong Kong or any other jurisdiction where prohibited by applicable law. All financial and other information presented in this Tender Offer Document concerning the Company are exclusively based on the unaudited financial statements bulletin published by the Company for the financial year ended 31 December 2016, financial statements published by the Company for the financial year ended 31 December 2015, stock exchange releases published by the Company, entries in the Finnish Trade Register, the shareholders’ register of the Company dated 21 February 2017 and other information publicly available. Consequently, the Offeror does not accept any responsibility for such information except for the accurate restatement of such information herein. Save to the extent required by mandatory law, this Tender Offer Document will not be supplemented or updated with any financial information or other stock exchange releases published by the Company after the date of this Tender Offer Document nor will the Offeror otherwise separately inform about the publishing of such financial information or other stock exchange releases, unless so required by compulsory legislation. Certain Key Dates The following timetable sets forth certain key dates relating to the Tender Offer, provided that the Offer Period has not been extended or discontinued in accordance with the terms and conditions of the Tender Offer:  9 February 2017 Announcement of the Offeror’s decision to launch the Tender Offer  27 February 2017 Offer Period commences  29 March 2017 (preliminary) Offer Period expires  30 March 2017 (preliminary) Announcement of the preliminary result of the Tender Offer  3 April 2017 (preliminary) Announcement of the final result of the Tender Offer  6 April 2017 (preliminary) Payment of the Share Offer Price and Option Right Offer Price

PERSONS RESPONSIBLE FOR THE TENDER OFFER DOCUMENT Offeror Nokia Solutions and Networks Oy Address: Karaportti 3, FI-02610 Espoo, Finland Domicile: Helsinki The Board of Directors of the Offeror Tommi Uitto (Chairman) Esa Niinimäki Peter Rönnberg Parent Company of the Group of the Offeror Nokia Corporation Address: Karaportti 3, FI-02610 Espoo, Finland Domicile: Helsinki The Board of Directors of the Parent Company of the Group of the Offeror Risto Siilasmaa (Chairman) Bruce Brown Louis R. Hughes Jean C. Monty Elizabeth Nelson Carla Smits-Nusteling Olivier Piou Kari Stadigh Statement by the Offeror and Nokia This Tender Offer Document has been prepared by the Offeror pursuant to Chapter 11, Section 11 of the SMA for purposes of the Tender Offer set out herein. The Offeror and Nokia represent that to their best knowledge and understanding the information contained in this Tender Offer Document is accurate and no information has been omitted that is likely to affect the assessment of the merits of the Tender Offer. All information concerning the Company presented in this Tender Offer Document has been extracted from, and has been provided exclusively based upon, publicly available information. Consequently, neither the Offeror nor Nokia accept any responsibility for such information, except for the accurate restatement of such information herein.

In Helsinki, 23 February 2017 In Helsinki, 23 February 2017

Nokia Solutions and Networks Oy Nokia Corporation

ADVISORS TO THE OFFEROR Financial advisor to Nokia and the Offeror in connection with the Tender Offer Nordea Bank AB publ, Finnish Branch Satamaradankatu 5 FI-00020 NORDEA Finland Legal advisor to Nokia and the Offeror in connection with the Tender Offer Roschier, Attorneys Ltd Keskuskatu 7 A FI-00100 Helsinki Finland Arranger of the Tender Offer Nordea Bank AB (publ), Finnish Branch Satamaradankatu 5 FI-00020 NORDEA Finland

ADVISORS TO THE COMPANY Financial advisor to the Company in connection with the Tender Offer Sisu Partners Oy Mikonkatu 1 B FI-00100 Helsinki Finland Legal advisor to the Company in connection with the Tender Offer Castrén & Snellman, Attorneys Ltd. Eteläesplanadi 14 FI-00130 Helsinki Finland

TABLE OF CONTENTS

1. BACKGROUND AND OBJECTIVES ...... 7 1.1 Background to the Tender Offer ...... 7 1.2 Effect of the Tender Offer on Comptel’s Operations and Assets and Future Position of Management and Employees ...... 7 1.3 Offeror’s and Nokia's Strategic Plans ...... 8 1.4 Financing of the Tender Offer ...... 8 1.5 Offeror’s Future Plans with respect to Comptel Shares ...... 8 1.6 Statement by the Comptel Board of Directors ...... 8 1.7 Undertakings of Shareholders ...... 9 1.8 Fees to Advisors ...... 9 1.9 Applicable Law...... 9 2. INFORMATION ON GROUNDS FOR PRICING OF THE TENDER OFFER ...... 10 2.1 Grounds for determining the Offer Price ...... 10 2.2 Trading Prices of Comptel’s Shares ...... 10 2.3 Grounds for Determining the Option Right Offer Price ...... 11 2.4 Trading prices of Comptel 2014A and 2014B Option Rights...... 11 2.5 Other Tender Offers ...... 12 3. SUMMARY OF THE TRANSACTION AGREEMENT ...... 13 3.1 Background to the Transaction Agreement ...... 13 3.2 Offer Period and Offer Price ...... 13 3.3 Conditions to Completion ...... 13 3.4 Permission by the Board of Directors of Comptel to Transfer the 2015 Option Rights ...... 13 3.5 Recommendation by the Board of Directors of Comptel ...... 13 3.6 Representations and Warranties ...... 14 3.7 Undertakings ...... 15 3.8 Termination ...... 16 3.9 Governing Law ...... 16 4. TERMS AND CONDITIONS OF THE TENDER OFFER...... 17 4.1 Object of the Tender Offer ...... 17 4.2 Offer Price ...... 17 4.3 Offer Period ...... 17 4.4 Conditions to Completion of the Tender Offer ...... 18 4.5 Obligation to increase the Tender Offer or to pay compensation ...... 19 4.6 Acceptance Procedure of the Tender Offer ...... 19 4.7 Withdrawal Rights ...... 22 4.8 Announcement of the Result of the Tender Offer ...... 22 4.9 Terms of Payment and Settlement of Shares ...... 23 4.10 Terms of Payment and Settlement of Option Rights ...... 23 4.11 Transfer of Ownership ...... 24 4.12 Transfer Tax and Other Payments ...... 24 4.13 Other Issues ...... 24 5. PRESENTATION OF COMPTEL ...... 26 5.1 Overview ...... 26 5.2 Share Capital and Ownership Structure ...... 26 5.3 Authorization to Issue Shares, Options and Other Special Rights entitling to Shares in Comptel ...... 26 5.4 Option Rights ...... 27 5.5 Treasury Shares ...... 28 5.6 Shareholders’ Agreements ...... 28 5.7 Board of Directors, President and CEO, and Auditors ...... 28 5.8 Financial Information ...... 29 5.9 Future Prospects Published by the Company...... 29 5.10 Articles of Association ...... 29

6. PRESENTATION OF THE OFFEROR ...... 30 6.1 Offeror and Nokia in Brief ...... 30 6.2 Persons related to the Offeror as stipulated in Chapter 11, Section 5 of the SMA ...... 31 6.3 Company’s Ownership in the Offeror ...... 31

ANNEXES ANNEX A: STATEMENT OF COMPTEL’S BOARD OF DIRECTORS A1 ANNEX B: FINANCIAL STATEMENTS OF COMPTEL B1 ANNEX C: FINANCIAL STATEMENTS BULLETIN PUBLISHED BY COMPTEL C1 ANNEX D: STOCK EXCHANGE RELEASE PUBLISHED BY COMPTEL ON 9 FEBRUARY 2017 D1 ANNEX E: ARTICLES OF ASSOCIATION OF COMPTEL E1

1. BACKGROUND AND OBJECTIVES

1.1 Background to the Tender Offer The Offeror is a wholly-owned indirect subsidiary of Nokia. The Offeror's main business is part of Nokia's networks business area, in which the company offers a wide selection of various products ranging from hardware components for network operators to software solutions and, among others, services that support and optimize network operations and participates in the research and development of these products. Nokia is one of the global leaders in developing technologies for a connected world, offering communications services providers, authorities, major corporations and consumers the most comprehensive selection of products, services and licensing opportunities. Nokia is a global company with continuing operations in Europe, the Middle East, Africa, Asia- Pacific, Greater China, North America and Latin America. Furthermore, Nokia has research and development facilities in Europe, North America and Asia. Comptel is a long term partner of Nokia. It is a public limited company incorporated under the laws of Finland, and its shares are listed on the official list of Nasdaq Helsinki with the trading code CTL1V. Comptel was established in 1986 and it has approximately 837 employees in 32 countries. Comptel has completed over 1 400 customer projects in more than 90 countries. It processes 20 percent of world´s mobile usage data every day, orchestrates communications and digital services for more than two billion end-users daily and its largest customer has around 300 million subscribers. In 2016, Comptel’s net sales were EUR 100.0 million with an 11.0 percent operating margin. The company’s major sites are located in Finland, Bulgaria, Malaysia, India, the United Kingdom and Norway. Nokia and Comptel have on the Signing Date entered into a Transaction Agreement under which Nokia is committed to make through its indirect wholly-owned subsidiary Nokia Solutions and Networks Oy a public tender offer for all the Shares and Option Rights of Comptel that are not held by Comptel or any of its subsidiaries. The principal terms and conditions of the Transaction Agreement have been described in the section “Summary of the Transaction Agreement” below. After reviewing the Tender Offer and its terms and conditions, as well other available information, the Board of Directors of Comptel has unanimously decided to recommend that the shareholders and holders of Option Rights accept the Tender Offer (see section 1.6 and Annex A below). To support its statement, the Board of Directors of Comptel has received a fairness opinion dated 8 February 2017 from Comptel’s financial advisor Sisu Partners Oy. According to the opinion, the consideration to be received by the holders of the Shares and the Option Rights pursuant to the Tender Offer is believed to be fair from a financial point of view to such holders as of the date of opinion. Major shareholders of Comptel, Mandatum Life Insurance Company, Elisa Corporation, Kaleva Mutual Insurance Company, Varma Mutual Pension Insurance Company and Ilmarinen Mutual Pension Insurance Company (the “Major Shareholders”), and the President and CEO of Comptel personally and through an entity in his control, the Chairman of the Board of Directors of Comptel and the members of the Board of Directors of Comptel have subject to certain customary conditions irrevocably undertaken to accept the Tender Offer (see section 1.7 below). Such shareholders jointly represent approximately 48.3 percent of all the Shares and votes in Comptel. 1.2 Effect of the Tender Offer on Comptel’s Operations and Assets and Future Position of Management and Employees The Tender Offer is not expected to have a material effect on the operations, business locations or the number of jobs at Comptel. It is the intention of Nokia and the Offeror that Comptel will continue to operate as a separate unit, but its business might be eventually harmonized with and/or integrated into the standalone software business operated by Applications and Analytics business group of Nokia group based upon an integration plan to be developed by the management of Nokia. Certain employees and members of senior management of Comptel will play an important role in Nokia's organization following the completion of the Tender Offer. In order to encourage these key employees of Comptel to remain in the Company, the Offeror intends to offer them certain retention arrangements following the completion of the Tender Offer. However, the Offeror intends to change the composition of the Board of Directors of Comptel after the completion of the Tender Offer. The Offeror has not entered into any agreements providing for any compensation or other remuneration granted to the management or the members of the Board of Directors of Comptel payable in return for the execution of the Transaction Agreement and/or for the completion of the Tender Offer.

1.3 Offeror’s and Nokia's Strategic Plans The planned acquisition is part of Nokia's strategy to build a standalone software business at scale by expanding and strengthening its software portfolio and go-to-market capabilities with additional sales capacity and a strategic partner network. Comptel would bolster Nokia's software portfolio by adding critical solutions for catalogue-driven service orchestration and fulfillment, intelligent data processing, customer engagement, and agile service monetization. The combination of Nokia's Service Assurance portfolio and Comptel's Service Orchestration portfolio would enable a dynamic closed loop between service assurance and fulfillment that simplifies management of complex heterogeneous networks. When combined with Nokia's Cloudband(TM) and Nuage(TM) portfolios, Nokia would be able to provide customers with complete, end-to-end orchestration of complex Network Function Virtualization (NFV) and Software Defined Networking (SDN) deployments. In November 2016, Nokia announced its long-term strategy, Rebalancing for Growth. As part of the strategy, Nokia is strengthening its software capabilities in key areas: portfolio, services and go-to-market. The planned acquisition of Comptel would bolster go-to-market efforts with a software-dedicated sales force and strong partner network. It would also support Nokia's desire to build a portfolio that allows customers to automate as much of their network and business operations as possible – including customer services, self-optimization, management and orchestration. Comptel would help with this objective by bringing catalogue-driven fulfilment and digital service lifecycle management, complex event processing, applications for customer engagement and service monetization; and emerging technologies for context-aware on-device commerce and IoT pattern detection. The Tender Offer is not expected to have a material effect on the operations and business locations of, or on the number of jobs at Comptel. 1.4 Financing of the Tender Offer The Tender Offer will be financed through Nokia Group’s internal financing arrangements and no third party financing is required to complete the Tender Offer. The Tender Offer is thus not conditional upon obtaining financing for the Tender Offer. The financing arrangements for the Tender Offer do not have any impact on the operations or obligations of Comptel. 1.5 Offeror’s Future Plans with respect to Comptel Shares The Offeror’s intention is to acquire all the Shares and Option Rights in the Company through the Tender Offer. Obligation to Make a Mandatory Offer According to Chapter 11, Section 19 of the SMA, a shareholder holding more than thirty (30) percent or fifty (50) percent of the voting rights attached to shares in a company the shares of which are subject to public trading, is obligated to make a public tender offer (mandatory offer) for all the remaining shares and securities entitling to shares in the company. However, under the SMA, if the relevant threshold has been exceeded by means of a voluntary public tender offer, the voluntary offer does not need to be followed by a mandatory offer provided that the initial voluntary offer has been made for all shares and other securities entitling to shares in the target company. Pursuant to the above exception, the Offeror will not have an obligation to launch a subsequent mandatory offer after the completion of the Tender Offer. Redemption under the Finnish Companies Act Under Chapter 18 of the Finnish Companies Act (624/2006, as amended, “FCA”) a shareholder holding more than ninety (90) percent of the total number of shares and voting rights in a company shall have the right and obligation to redeem the remainder of the issued and outstanding shares in the company. Should the Offeror obtain more than ninety (90) percent of the Shares of the Company and of the voting rights attached to the Shares, the Offeror intends to initiate compulsory acquisition proceedings under the above provisions of the FCA in order to acquire title to all the Shares in the Company. In such situation, the Offeror intends to acquire also title to all Option Rights not tendered in the Tender Offer in accordance with the terms and conditions of the Option Rights. Delisting from Nasdaq Helsinki It is the Offeror’s intention that, as promptly as practicable following the initiation of the compulsory acquisition proceedings under the FCA, the Company shall apply for the delisting of its Shares and Option Rights 2014A and 2015B from Nasdaq Helsinki. 1.6 Statement by the Comptel Board of Directors The Board of Directors of Comptel has unanimously decided to recommend that the shareholders and holders of Option Rights accept the Tender Offer.

In order to support its assessment of the Tender Offer, the Board of Directors of Comptel has requested from Comptel’s financial advisor, Sisu Partners Oy, a fairness opinion regarding the Tender Offer. Sisu Partners Oy's fairness opinion dated 8 February 2017 states that the consideration offered to the shareholders and holders of Option Rights under the Tender Offer is fair from a financial point of view. After having obtained the fairness opinion from Sisu Partners Oy and having carefully evaluated the terms and conditions of the Tender Offer from the point of view of Comptel and its shareholders and the holders of the Option Rights and other available information, the Board of Directors of Comptel has on 21 February 2017 issued a statement to the effect that the consideration offered by the Offeror in the Tender Offer is fair to the holders of Shares and Option Rights. Accordingly, the Board of Directors of Comptel has unanimously decided to recommend the shareholders and holders of Option Rights to accept the Tender Offer. The statement by the Comptel Board in accordance with Chapter 11, Section 13 of the SMA is attached to this Tender Offer Document as Annex A. 1.7 Undertakings of Shareholders Nokia has received undertakings by the Major Shareholders and the President and CEO of Comptel personally and through an entity controlled by him, the Chairman of the Board of Directors of Comptel and the members of the Board of Directors of Comptel according to which such shareholders subject to certain customary conditions irrevocably undertake to accept the Tender Offer. Such shareholders represent jointly approximately 48.3 percent of all the Shares and votes in Comptel. 1.8 Fees to Advisors Nordea Bank (as defined below) serves as the financial advisor to Nokia and the Offeror in connection with the Tender Offer and as the Arranger of the Tender Offer. Nokia is committed to pay to Nordea Bank total fees of approximately EUR two (2) million based on the completion of the Tender Offer in connection with the Tender Offer. 1.9 Applicable Law The Tender Offer and this Tender Offer Document shall be governed by Finnish law and all disputes relating thereto shall be finally settled by a competent court in Finland.

2. INFORMATION ON GROUNDS FOR PRICING OF THE TENDER OFFER

2.1 Grounds for determining the Offer Price Under the Tender Offer, the Offeror is offering a cash consideration of EUR 3.04 for each Share validly tendered. The consideration offered for the Option Rights is EUR 2.56 in cash for each 2014A Option Right, EUR 2.16 in cash for each 2014B Option Right, EUR 1.53 in cash for each 2014C Option Right, EUR 2.15 in cash for each 2015A Option Right, and EUR 2.15 in cash for each 2015B Option Right. Any distribution of dividend or other assets by Comptel after the Signing Date ("Distribution") shall reduce the Share Offer Price by an amount equal to such Distribution per share as set out below in section 4.2. Such Distribution shall not affect the Option Right Offer Price. According to Chapter 11, Section 24 of the SMA, the starting point in determining the consideration to be offered in a voluntary tender offer for all shares and other securities entitling to shares in the target company shall be the highest price paid for the securities subject to the tender offer by the offeror or by a person related to the offeror as stipulated in Chapter 11, Section 5 of the SMA, during a period of six (6) months preceding the announcement of the tender offer. Neither the Offeror or Nokia nor any other party referred to in Chapter 11, Section 5 of the SMA has during the 6- month period preceding the announcement of the Tender Offer (the “Announcement”) acquired any Shares or Option Rights in the Company in public trading or otherwise at a price higher than the Share Offer Price or Option Right Offer Price. At the date of this Tender Offer Document, neither the Offeror or Nokia nor any other party referred to in Chapter 11, Section 5 of the SMA holds any Shares or Option Rights in the Company. 2.2 Trading Prices of Comptel’s Shares The chart below shows the price development of the Shares on Nasdaq Helsinki and the trading volumes of the Shares during the last three (3) years preceding the Announcement, i.e. between 9 February 2014 and 8 February 2017.1

4 6,000

3 4,500

2 3,000

Closing Closing price (EUR) 1 1,500 Trading Trading volume (thousand Shares) 0 0 10/02/14 10/05/14 10/08/14 10/11/14 10/02/15 10/05/15 10/08/15 10/11/15 10/02/16 10/05/16 10/08/16 10/11/16

Trading volume Closing price

The closing price per Share on Nasdaq Helsinki on 8 February 2017, i.e. on the last trading day preceding the Announcement, was EUR 2.36. The volume-weighted average trading price of the Shares on Nasdaq Helsinki over a 3- month period preceding the Announcement, i.e. from 9 November 2016 to 8 February 2017, was EUR 2.32. Correspondingly, the volume-weighted average trading price during the twelve (12) months preceding the Announcement, i.e. from 9 February 2016 to 8 February 2017, was EUR 2.01. The Share Offer Price of EUR 3.04 for each Share corresponds to a premium of approximately 28.8 percent to the closing price of the Shares of the Company (EUR 2.36) on Nasdaq Helsinki on 8 February 2017, the last trading day before the Announcement, and a premium of approximately 31.0 percent to the volume-weighted average trading price of the Shares of the Company on Nasdaq Helsinki during the 3-month period preceding the Announcement as well as a premium of approximately 51.2 percent compared to the volume-weighted average trading price during the last twelve (12) months preceding the Announcement.

1 Source: Nasdaq Helsinki 10

The table below shows the quarterly trading prices and trading volumes of the Shares on Nasdaq Helsinki during the last three (3) years preceding the Tender Offer.2 Share price during the period (EUR) Trading volume during the period Time period Average High Low Shares Euros 10 Feb 2014 – 31 Mar 014 0.54 0.57 0.51 8,895,970 4,778,806 1 Apr 2014 – 30 Jun 2014 0.59 0.70 0.53 3,638,158 2,155,344 1 Jul 2014 – 30 Sep 2014 0.63 0.67 0.60 3,722,165 2,342,349 1 Oct 2014 – 31 Dec 2015 0.65 1.00 0.55 7,129,937 4,992,838 1 Jan 2015 – 31 Mar 2015 0.94 1.02 0.84 6,187,394 5,791,499 1 Apr 2015 – 30 Jun 2015 1.18 1.49 0.95 11,484,779 13,887,816 1 Jul 2015 – 30 Sep 2015 1.23 1.41 1.06 6,902,879 8,541,207 1 Oct 2015 – 31 Dec 2015 1.39 1.93 1.15 16,647,477 24,655,572 1 Jan 2016 – 31 Mar 2016 1.53 1.80 1.19 14,744,049 21,717,618 1 Apr 2016 – 3 Jun 2016 1.55 1.89 1.41 8,485,142 13,513,584 1 Jul 2016 – 30 Sep 2016 2.31 2.65 1.79 14,709,582 33,520,022 1 Oct 2016 – 31 Dec 2016 2.26 2.56 1.96 10,419,711 23,691,666 1 Jan 2017 – 8 Feb 2017 2.38 2.51 2.30 2,718,009 6,520,648

2.3 Grounds for Determining the Option Right Offer Price The Option Right Offer Price is EUR 2.56 in cash for each 2014A Option Right, EUR 2.16 in cash for each 2014B Option Right, EUR 1.53 in cash for each 2014C Option Right, EUR 2.15 in cash for each 2015A Option Right and EUR 2.15 in cash for each 2015B Option Right. The Option Right Offer Price has been calculated by deducting the share subscription price of the respective Option Rights from the Share Offer Price of EUR 3.04. The share subscription prices of the respective Option Rights pursuant to the terms and conditions of the 2014 Option Rights and the 2015 Option Rights are as follows: EUR 0.48 for each 2014A Option Right, EUR 0.88 for each 2014B Option Right, EUR 1.51 for each 2014C Option Right, EUR 0.89 for each 2015A Option Right and EUR 0.89 for each 2015B Option Right. Each Option Right entitles to subscribe for one (1) share in the Company. For details of the Option Rights, please see section 5.4 below. 2.4 Trading prices of Comptel 2014A and 2014B Option Rights 2014A Option Rights and 2014B Option Rights are subject to public trading on the official list of Nasdaq Helsinki. The chart below sets forth the price development and trading volume of the 2014A Option Rights on Nasdaq Helsinki for the period preceding the Announcement during which these Option Rights were available for trading, i.e. between 1 February 2016 and 8 February 2017.3

3 180

2 120 Rights)

1 60 Closing Closing price (EUR)

0 0 Trading volume (thousand Option 01/02/2016 01/04/2016 01/06/2016 01/08/2016 01/10/2016 01/12/2016 01/02/2017

Trading volume Closing price

The closing price of the 2014A Option Rights on Nasdaq Helsinki on 8 February 2017, i.e. the last trading day preceding the Announcement, was EUR 1.84. The volume-weighted average trading price of the 2014A Option Rights

2 Source: Nasdaq Helsinki 3 Source: Nasdaq Helsinki 11

on Nasdaq Helsinki during the three (3) months preceding the Announcement, i.e. from 9 November 2016 to 8 February 2017, was EUR 1.84. The table below sets forth the quarterly trading prices and volumes of the 2014A Option Rights on Nasdaq Helsinki during the one (1) year period preceding the Tender Offer.4 Price of 2014A Option Rights during the Trading volume of 2014A Option Rights period (EUR) during the period 2014A Option Time period Average High Low Rights EUR 9 Feb 2016 – 31 Mar 2016 1.04 1.15 0.98 323,950 344,121 1 Apr 2016 – 30 Jun 2016 1.07 1.40 0.94 107,000 115,966 1 Jul 2016 – 30 Sep 2016 1.83 2.07 1.30 364,856 634,885 1 Oct 2016 – 31 Dec 2016 1.79 2.03 1.62 271,850 490,468 1 Jan 2017 – 8 Feb 2017 1.89 1.98 1.84 8,300 15,919 At the time of the Announcement, the 2014B Option Rights had been publicly traded for a total of six (6) trading days, but no trading took place in them during such period. Due to this, the premium on the closing price cannot be determined. 2.5 Other Tender Offers To the Offeror’s knowledge, no public tender offer for the Shares or securities entitling holders to shares of Comptel has been made by any third party during the twelve (12) months preceding the Announcement.

4 Source: Nasdaq Helsinki 12

3. SUMMARY OF THE TRANSACTION AGREEMENT

This summary is not an exhaustive presentation of all terms and conditions of the Transaction Agreement. The summary aims at describing the terms and conditions of the Transaction Agreement to the extent that such terms and conditions may materially affect the assessment of a shareholder or a holder of Option Rights of the Company of the terms and conditions of the Tender Offer. 3.1 Background to the Transaction Agreement Nokia and Comptel entered on 8 February 2017 into the Transaction Agreement under which Nokia has undertaken to make through its indirect wholly-owned subsidiary Nokia Solutions and Networks Oy, a public tender offer for all the Shares and Option Rights of Comptel that are not held by Comptel or any of its subsidiaries. For such purpose, Nokia has transferred its rights and obligations under the Transaction Agreement to the Offeror pursuant to the Transaction Agreement, whereby Nokia is automatically deemed to have guaranteed the performance of the Offeror’s obligations under the Transaction Agreement (the Offeror and Comptel hereafter each a “Party” and together “Parties”). Should the Offeror obtain more than ninety (90) percent of the Shares of the Company and of the voting rights attached to the Shares, the Offeror intends to initiate compulsory acquisition proceedings under the provisions of the FCA and/or under the terms of the Option Rights of Comptel in order to acquire title to all the Shares and Option Rights in the Company. The Offeror intends to apply for the delisting of the Company’s Shares from Nasdaq Helsinki. Background to the Transaction Agreement is detailed further in the section “Background and Objectives — Background to the Tender Offer". 3.2 Offer Period and Offer Price Under the Transaction Agreement, the Offer Period under the Tender Offer shall initially run for four (4) weeks and it may be extended by the Offeror in accordance with the terms and conditions of the Tender Offer. The Transaction Agreement provides that the Offeror shall offer to acquire all the Shares for a consideration of EUR 3.04 in cash for each Share subject to the terms and conditions of the Tender Offer. With respect to the Option Rights that have been validly tendered in the Tender Offer, the consideration offered shall be EUR 2.56 in cash for each 2014A Option right, EUR 2.16 in cash for each 2014B Option Right, EUR 1.53 in cash for each 2014C Option Right, EUR 2.15 in cash for each 2015A Option Right, and EUR 2.15 in cash for each 2015B Option Right. Any Distribution by Comptel after the Signing Date shall reduce the Share Offer Price by an amount equal to such Distribution per share as set out below in section 4.2. Such Distribution shall not affect the Option Right Offer Price. 3.3 Conditions to Completion Under the Transaction Agreement, the obligation of the Offeror to accept for payment the tendered Shares and Option Rights and to complete the Tender Offer shall be subject to the fulfilment or, to the extent permitted by applicable law, waiver by the Offeror of the Conditions to Completion (as defined below) described in section “Terms and Conditions of the Tender Offer – Conditions to Completion of the Tender Offer”. 3.4 Permission by the Board of Directors of Comptel to Transfer the 2015 Option Rights The Board of Directors of Comptel has under the Transaction Agreement undertaken to grant a permission to the holder of the 2015 Option Rights to transfer his Option Rights to the Offeror by accepting the Tender Offer and tendering the Option Rights into the Tender Offer despite the transfer restrictions contained in the terms and conditions of the Option Rights, as described in section “Terms and Conditions of the Tender Offer – Object of the Tender Offer”. 3.5 Recommendation by the Board of Directors of Comptel The Transaction Agreement provides that having evaluated the terms and conditions of the Tender Offer from the point of view of the Company, the shareholders and the holders of the Option Rights, the Board of Directors of the Company unanimously recommends that the shareholders and holders of the Option Rights accept the Tender Offer. Pursuant to the Transaction Agreement the Board of Directors of Comptel has, in the event of a possible competing offer or proposal, undertaken not to withdraw or change its recommendation for the Tender Offer unless the Board of Directors determines in good faith, after taking advice from external legal counsel and financial advisor, that the competing offer or proposal are from a financial point of view more favorable to the shareholders and the holders of the Option Rights than the Tender Offer when judged as a whole (taking into account, among other things, the identity of the offeror, the consideration and other terms and conditions as well as the availability and reliability of financing), and that therefore (i) it would no longer be in the best interest of the shareholders and holders of the Option Rights to accept the Tender Offer, and (ii) such withdrawal or change of the recommendation is required for the Board of Directors of the Company to comply with its fiduciary duties towards the shareholders and the holders of the Option Rights under Finnish laws. The Board of Directors may withdraw or change its recommendation for the Tender Offer in accordance with the above only if prior to such withdrawal or change, the Board of Directors has complied with certain agreed

procedures allowing the Offeror to assess the competing offer or proposal and to enhance its Tender Offer. For such purpose, Comptel has undertaken to inform the Offeror with reasonably detailed information about the competing offer or proposal (including identity of competing offeror, pricing and other main terms and conditions) and to provide the Offeror with an opportunity to negotiate with the Board of Directors of Comptel about the matters arising from the competing offer or proposal. Should the Offeror enhance its Tender Offer so as to be at least equally favorable to Comptel’s shareholders and holders of the Option Rights as the competing offer or proposal, the Board of Directors has undertaken to confirm and uphold the recommendation for the Tender Offer, as enhanced. 3.6 Representations and Warranties In the Transaction Agreement, Comptel has given to Nokia and the Offeror certain representations and warranties relating to, among other things:  Comptel and its affiliated entities being validly incorporated and Comptel having corporate power and authority to execute the Transaction Agreement and to perform its obligations thereunder;  the latest consolidated financial statements and interim report of Comptel having been prepared in accordance with relevant laws and accounting standards;  Comptel not discussing any competing offers or competing proposals and being unaware of any such offers or proposals;  Comptel having disclosed all material information required to be disclosed under applicable Finnish legislation, the regulation on market abuse (EU) No 596/2014 and the rules and requirements of Nasdaq Helsinki, and compiled all information it has delivered for the purpose of Nokia ’s due diligence review in good faith, and no such information being misleading or incorrect in any material respect;  the number of Shares and Option Rights issued by Comptel, and there being no further option rights or other securities entitling to shares in Comptel;  Comptel and its affiliated entities being in compliance in all material respects with (i) applicable laws and regulations, (ii) any material agreements and (iii) any applicable collective agreements and employee benefit plans and policies, and no material agreements being terminated;  there being no material claims, litigation or other legal proceedings pending or threatened against Comptel or its affiliated entities;  Comptel (or any of its affiliated entities) possessing exclusive ownership rights or valid licenses to all of the intellectual property rights necessary for Comptel's and its affiliated entities' business, and that no intellectual property rights have been breached and there are no pending or threatened litigation with regard to them, that Comptel's source codes have not been disclosed to a third party at any time, and that Comptel and its affiliated entities have undertaken the necessary measures within the framework of applicable legislation to protect their corporate secrets and are in compliance with the applicable data security legislation;  Comptel and all of its affiliated entities having filed all tax returns and there being no tax related actions or disputes pending or threatened with respect to them (excluding the announced tax dispute related to India);  Comptel and all of its affiliated entities having in place sufficient internal supervision mechanisms for bookkeeping and them not (i) having used any of their funds for unlawful activities or unlawful gifts, (ii) made any bribes or influence payments, or (iii) made or accepted any other unlawful payments; and  on the Signing Date, Comptel being unaware of any event, circumstance or change that constitutes or is likely to result in a Material Adverse Change or would likely have constituted a Material Adverse Change (as defined below under “Terms and Conditions of the Tender Offer – Conditions to Completion of the Tender Offer”) had it occurred after the Signing Date. In the Transaction Agreement, Nokia and the Offeror have given to Comptel certain representations and warranties relating to, among other things:  Nokia and the Offeror being validly incorporated and having corporate power and authority to execute the Transaction Agreement and to perform their obligations thereunder;  sufficient financing being available for the Offeror to finance the Tender Offer and there being no need for third party financing to complete the Tender Offer;  the Tender Offer Document, when filed and distributed or disseminated, complying in all material respects with all applicable laws and not containing any untrue or misleading statement of a material fact;

 on the Signing Date, Nokia not being in a process of discussing or aware of any intention to enter into a process of discussing any transaction that could hinder the completion of the Tender Offer; and  on the Signing Date, Nokia being unaware of any event, circumstance or change that constitutes or is likely to result in a Material Adverse Change (as defined below) or would likely have constituted a Material Adverse Change (as defined below) had it occurred after the Signing Date; The representations and warranties shall automatically terminate upon the title to the Shares and Option Rights validly tendered in the Tender Offer passing to the Offeror pursuant to the Tender Offer, thereby having no further effect after such date. If a material breach of any of the representation or warranties occurs and such breach has not been cured by the end of the Offer Period, the non-breaching Party may terminate the Transaction Agreement in accordance with section 3.8 below. 3.7 Undertakings Under the Transaction Agreement, the Parties have given each other certain undertakings, most of which shall automatically terminate upon the passing of title to the Shares and Option Rights validly tendered in the Tender Offer to the Offeror pursuant to the Tender Offer, thereby having no further effect after such date. The undertakings relate to the procedures to be followed in connection with the Tender Offer, including, among other things, the following:  each Party has undertaken to use its reasonable efforts to assist and cooperate with the other Party in the making of any necessary registrations and filings and in obtaining any necessary approvals, consents and waivers from relevant regulatory authorities, governmental entities and third parties;  Comptel has undertaken not to (directly or indirectly) solicit or knowingly encourage any competing offer or proposal for such offer or other transaction that could constitute or result in any competing transaction or otherwise harm or hinder the completion of the Tender Offer, nor to facilitate or promote such proposals, except if and to the extent such measures are required for the Board of Directors to comply with its fiduciary duties towards Comptel’s shareholders and holders of Option Rights under Finnish laws. Comptel shall inform the Offeror of any competing proposals (including the identity of the competing offeror, pricing and other main terms and conditions of such proposal) and provide the Offeror an opportunity to negotiate with the Board of Directors of Comptel of matters arising from such competing proposals;  Comptel has undertaken to, and to cause each of its affiliated entities to, conduct their respective businesses only in the ordinary course of business consistent with past practice and not to make or implement any material changes and certain actions without the prior consent of the Offeror;  Comptel has undertaken to use its reasonable efforts to provide the Offeror with access to information regarding Comptel and its affiliated entities reasonably needed for purposes of necessary filings, completion of the Tender offer or to assess any possible breach of representations and warranties or any Material Adverse Change (as defined below) or for planning the integration to the extent permitted by applicable laws;  Nokia and the Offeror on behalf of themselves and of their subsidiaries have undertaken that they shall not solicit for employment from the Company and its affiliated entities any of the latter's key employees during a certain period of time;  each of the Parties has undertaken to comply with, and not deviate from the recommendations included in, the Helsinki Takeover Code, or, in the event of a deviation, shall to the extent practically possible explain the reasons for such deviation to the other Party in advance;  each Party has undertaken to notify the other Party of certain events and to consult with each other before issuing any public announcements relating to the Tender Offer;  the Board of Directors of Comptel has undertaken to convene at the request of the Offeror an Extraordinary General Meeting of Shareholders of Comptel after the completion of the Tender Offer for the purpose of electing new members to the Board of Directors of Comptel; and  Nokia and the Offeror have undertaken to vote in favor of discharge of liability for the members of the Board of Directors of Comptel at the next Annual General Meeting of the shareholders and to pay the remuneration of the members of the Board of Directors and to maintain the members' of the Board of Directors and Managing Director's current liability insurance policies for a certain time after the completion of the Tender Offer. If a material breach of any of the undertakings occurs and such breach relating to the commitments concerning the conduct of Comptel’s business has not been cured by the end of the Offer Period, the non-breaching Party may terminate the Transaction Agreement in accordance with section 3.8 below.

3.8 Termination The Transaction Agreement and the transactions contemplated thereunder may be terminated with immediate effect only as follows:  either Party may terminate the agreement upon a material breach of any representations and warranties or of other undertakings by or obligations of the other Party set forth in the Transaction Agreement and such breach of a representation or warranty or an undertaking relating to the conduct of business has not been remedied before the Offer Period expires; or  either Party may terminate the agreement if the Board of Directors of Comptel has in compliance with the provisions set forth in the Transaction Agreement withdrawn its recommendation to the shareholders and holders of the Option Rights to accept the Tender Offer or changed its material contents; or  either Party may terminate the agreement if a final, non-appealable injunction or other order issued by any court of competent jurisdiction or other final, non-appealable legal restraint or prohibition preventing the consummation of the Tender Offer shall have taken effect after the Signing Date and shall still be in effect; or  either Party may terminate the agreement if the Tender Offer has not been completed by 31 May 2017 or, if the non-completion of the Tender Offer is due to the regulatory approvals not having been obtained and either Party has requested the extension of the Transaction Agreement by a maximum of three (3) months, by such later date; or  Comptel may terminate the agreement if the Offeror has not commenced the Tender Offer on or prior to 6 March 2017 or a later date agreed by the Parties; or  the Offeror or Nokia may terminate the agreement, if after the Signing Date, there occurs a Material Adverse Change (as defined below) or the Offeror or Nokia receives after the Signing Date information previously undisclosed to it that constitutes a Material Adverse Change (as defined below). In case the Transaction Agreement is terminated and this has a material effect on the planned acquisition from the perspective of the Offeror, the Offeror shall be entitled to withdraw the Tender Offer. 3.9 Governing Law The Transaction Agreement is governed by the laws of Finland.

4. TERMS AND CONDITIONS OF THE TENDER OFFER

The following sets forth the terms and conditions of the Tender Offer. Capitalized terms appearing in these terms and conditions of the Tender Offer which are not defined in this Chapter 4 have the meanings ascribed to such terms in the preceding sections of this Tender Offer Document. 4.1 Object of the Tender Offer Through the Tender Offer, the Offeror offers to acquire all of the issued and outstanding Shares and Option Rights in the Company that are not held by the Company or any of its subsidiaries on the terms and subject to the conditions set forth below. Nokia has guaranteed as for its own debt the performance of all of the Offeror’s obligations in relation to the Tender Offer, including the payment of any offer consideration. According to the terms and conditions of the Company's 2014 Option Rights, should anyone make a public tender offer for all the Shares, Option Rights and other special rights entitling to Shares issued by the Company, a holder of the 2014 Option Rights may assign all the 2014 Option Rights held by him or her to the Offeror, although the transfer right defined in the terms and conditions of the 2014 Option Rights had not yet begun. According to the terms and conditions of the Company's 2015 Option Rights, the 2015 Option Rights are transferable when the relevant share subscription period of the 2015 Option Rights has begun. On the date of this Tender Offer Document the share subscription period with respect to the 2015 Option Rights has not yet begun. The Board of Directors of the Company may, however, permit the transfer of the 2015 Option Rights also before the beginning of the share subscription period. Under the Transaction Agreement, the Board of Directors of the Company has undertaken to grant a permission to the holder of the 2015 Option Rights to transfer his 2015 Option Rights by accepting the Tender Offer and tendering the 2015 Option Rights into the Tender Offer in accordance with the terms and conditions thereof. 4.2 Offer Price The Share Offer Price for each Share validly tendered in accordance with the terms and conditions of the Tender Offer is EUR 3.04 in cash. However, should the Company resolve on any Distribution after the signing date of the Transaction Agreement, and should the record date of any such Distribution fall before any or all of the settlements of the completion trades (whether after the expiry of the Offer Period or any Subsequent Offer Periods (as defined below)) under the Tender Offer, the Share Offer Price shall be reduced by an amount equal to any and each such Distribution per Share, whereby the offer price so reduced shall constitute the Share Offer Price as defined under these terms and conditions of the Tender Offer. The Option Right Offer Price for each Option Right validly tendered in accordance with the terms and conditions of the Tender Offer is: EUR 2.56 in cash for each 2014A Option Right, EUR 2.16 in cash for each 2014B Option Right, EUR 1.53 in cash for each 2014C Option Right, EUR 2.15 in cash for each 2015A Option Right and EUR 2.15 in cash for each 2015B Option Right. Any Distribution by the Company shall not affect the Option Right Offer Price. 4.3 Offer Period The Offer Period under the Tender Offer commences on 27 February 2017 at 9:30 a.m. (Finnish time) and expires on 29 March 2017 at 4:00 p.m. (Finnish time), unless the Offer Period is extended as set forth below. The Offer Period may be extended by the Offeror (i) from time to time until the Closing Conditions (as defined below) have been fulfilled or waived and (ii) with a Subsequent Offer Period (as defined below) in connection with the announcement of the final result of the Tender Offer whereby the Offeror also declares the Tender Offer unconditional, all as set forth below. The Offeror will give notice of a possible extension of the Offer Period through a stock exchange release at the latest on 30 March 2017. The Offeror will give notice of a possible extension of an already extended Offer Period at the latest on the first Finnish banking day following the expiry of the extended Offer Period. If the Offeror extends the Offer Period, the Offer Period will expire on the date and at the time to which the Offeror extends the Offer Period unless the extended Offer Period is discontinued as set forth below. The maximum duration of the Offer Period (including any extended Offer Period) is ten (10) weeks. However, if the Closing Conditions (as defined below) have not been fulfilled due to a particular obstacle such as, for example, pending approval by a competition authority, the Offeror may extend the Offer Period beyond ten (10) weeks until such obstacle has been removed and the Offeror has had a reasonable time to respond to the situation. The date of the expiry of the extended Offer Period will in such case be published at least two (2) weeks before such expiry. Further, any Subsequent Offer Period (as defined below) may extend beyond ten (10) weeks. The Offeror may discontinue any extended Offer Period should all the Closing Conditions (as defined below) be fulfilled or waived by the Offeror before the expiry of the extended Offer Period and execute the sale and purchase of the Shares and Option Rights validly tendered in accordance with its terms and not properly withdrawn in accordance 17

with sections 4.9 and 4.10 below. Should the Offeror discontinue the extended Offer Period, the Offeror will announce its decision thereon through a stock exchange release as soon as possible after such decision has been made and in any case at least two (2) weeks before the expiry of the extended Offer Period to be discontinued. If the Offeror discontinues the extended Offer Period, the extended Offer Period will expire on such earlier date and at the time indicated in such announcement made by the Offeror. The Offeror also reserves the right to extend the Offer Period in connection with the announcement of the final result of the Tender Offer as set forth in section 4.8 (such extended Offer Period shall be referred to as the “Subsequent Offer Period”). In the event of such Subsequent Offer Period, the Subsequent Offer Period will expire on the date and at the time determined by the Offeror in the final result announcement. The expiration of a Subsequent Offer Period will be announced at least two (2) weeks before the expiration of such Subsequent Offer Period. 4.4 Conditions to Completion of the Tender Offer The obligation of the Offeror to accept for payment the tendered Shares and Option Rights and to complete the Tender Offer shall be subject to the fulfillment or, to the extent permitted by applicable law, waiver by the Offeror of the following conditions (jointly the "Closing Conditions") on or prior to the date of the Offeror’s announcement of the final result of the Tender Offer: 1) the valid tender of Shares representing, together with any other Shares otherwise acquired by the Offeror or Nokia prior to the final result announcement, more than ninety percent (90%) of the issued and outstanding Shares and voting rights of the Company on a fully diluted basis (i.e. taking into consideration the effect of the conversion of any and all Option Rights into shares in the Company) and calculated in accordance with Chapter 18 Section 1 of the FCA; 2) the receipt of all necessary regulatory approvals, permits and consents, including without limitation competition clearances (if any), and that any conditions set in such permits, consents or clearances, including, but not limited to, any requirements for the disposal of any assets of the Offeror, Nokia or the Company or any reorganization of the business of the Offeror, Nokia or the Company, are acceptable to the Offeror in that they are not materially adverse to the Offeror, Nokia or the Company in view of the Tender Offer or the benefits of the transaction contemplated thereby; 3) no Material Adverse Change (as defined below) having occurred after the Signing Date; 4) the Offeror or Nokia not, after the Signing Date, having received information previously undisclosed to them that constitutes a Material Adverse Change (as defined below), that occurred prior to the Signing Date; 5) no information made public by the Company or disclosed by the Company to Nokia or the Offeror being materially inaccurate, incomplete, or misleading, and the Company not having failed to make public any information that should have been made public by it under applicable laws, including the rules of Nasdaq Helsinki, provided that, in each case, the information made public, disclosed or not disclosed or the failure to disclose information constitutes a Material Adverse Change (as defined below); 6) no court or regulatory authority of competent jurisdiction having given an order or issued any regulatory action preventing, or materially challenging the completion of, the Tender Offer; 7) the Board of Directors of the Company having issued its recommendation for the Tender Offer and the recommendation remaining in force and not being modified or changed in a manner detrimental to the Offeror or Nokia; 8) the Transaction Agreement not having been terminated and remaining in force; and 9) the undertaking by each of the Major Shareholders to accept the Tender Offer remaining in force in accordance with its terms. “Material Adverse Change” means (a) any divestment or reorganization of all or any material part of the assets of the Company and its affiliated entities, taken as whole, or (b) any event, condition, circumstance, development, occurrence, change, effect or fact (each a “Effect”) that individually or in the aggregate, has, results in or would reasonably be expected to have or result in a material adverse effect on the business, assets, financial condition or results of operations of the Company and its affiliated entities, taken as a whole, excluding: 1) any Effect in political, financial, industry, economic or regulatory conditions generally, so long as such Effect does not have a disproportionate effect on the Company relative to other industry participants; 2) any Effect resulting from or caused by natural disasters, outbreak of major hostilities or any act of war or terrorism so long as such Effect does not have a disproportionate effect on the Company relative to other industry participants;

3) any Effect resulting from any actions taken by the Company at the express request or direction of the Offeror or Nokia; or 4) any Effect attributable to (i) an act or omission carried out or omitted by the Offeror or Nokia in connection with the Tender Offer or (ii) the Tender Offer (for the sake of clarity, including but not limited to Effects arising out of the announcement of, entry into, pendency of, anticipated completion of actions required or contemplated by or performance of obligations under, the Transaction Agreement and the transactions contemplated thereby or the identity of the parties to the Transaction Agreement). Under no circumstances shall any Material Adverse Change be deemed to exist to the extent the Effect causing the alleged Material Adverse Change has been publicly disclosed in any of the Company's stock exchange releases (including any publicly disclosed annual or interim reports) published during the three (3) years preceding the date of signing the Transaction Agreement or has been fairly disclosed in the due diligence information provided by the Company to Nokia or the Offeror prior to the date of signing the Transaction Agreement. The Offeror reserves the right to withdraw the Tender Offer in the event that any of the above Closing Conditions is not fulfilled. The Offeror can only invoke any of the Closing Conditions so as to cause the Tender Offer not to proceed, to lapse or to be withdrawn if the circumstances which give rise to the right to invoke the relevant Closing Condition have a significant meaning to the Offeror or Nokia in view of the Tender Offer, as referred to in the Regulations and Guidelines 9/2013 (as may be amended or re-enacted from time to time) issued by the Finnish Financial Supervisory Authority and the Helsinki Takeover Code. The Closing Conditions set out herein are the exhaustive conditions for the completion of the Tender Offer. The Offeror reserves the right to waive, to the extent permitted by applicable law, any of the Conditions to Completion that have not been satisfied. 4.5 Obligation to increase the Tender Offer or to pay compensation The Offeror reserves the right to acquire Shares and/or Option Rights also in public trading on Nasdaq Helsinki or otherwise during and after the Offer Period (including any extension thereof) and any Subsequent Offer Period or otherwise outside the Tender Offer. If the Offeror or any party referred to in Chapter 11, Section 5 of the SMA acquires, before the expiry of the Offer Period, Shares and/or Option Rights at a higher price than the Share Offer Price and/or the Option Right Offer Price or otherwise on terms that are more favourable than those of the Tender Offer, the Offeror must according to Chapter 11, Section 25 of the SMA amend the terms and conditions of the Tender Offer to correspond to this acquisition on more favourable terms (obligation to increase the offer). The Offeror shall then, without delay, make public the triggering of the obligation to increase the offer and pay, in connection with the completion of the Tender Offer, and in addition to the Share Offer Price and/or the Option Right Offer Price, the difference between the more favourable acquisition terms and the consideration offered in the Tender Offer to the holders of securities who have accepted the Tender Offer. If the Offeror or any party referred to in Chapter 11, Section 5 of the SMA acquires, during the nine (9) months following the expiry of the Offer Period, Shares and/or Option Rights at a higher price than the Share Offer Price and/or the Option Right Offer Price or otherwise on terms that are more favorable than those of the Tender Offer, the Offeror must according to Chapter 11, Section 25 of the SMA compensate those holders of securities who have accepted the Tender Offer for the amount equal to the difference between the more favorable acquisition terms and the consideration offered in the Tender Offer (obligation to compensate). The Offeror shall then, without delay, make public the triggering of the obligation to compensate and pay the difference between the more favorable acquisition terms and the consideration offered in the Tender Offer within one month after the triggering of the obligation to compensate to the holders of securities who have accepted the Tender Offer. According to Chapter 11, Section 25, Subsection 5 of the SMA, the obligation to compensate shall, however, not be triggered in case the payment of a higher price than the Share Offer Price (or the Option Right Offer Price) is based on an arbitral award pursuant to the FCA, provided that the Offeror or any party referred to in Chapter 11, Section 5 of the SMA has not offered to acquire Shares (or Option Rights) on terms that are more favorable than those of the Tender Offer before or during the arbitral proceedings. 4.6 Acceptance Procedure of the Tender Offer Shares The Tender Offer must be accepted separately for each book-entry account. A shareholder of the Company giving the acceptance must have a cash account in a financial institution operating in Finland or abroad. A shareholder may only

accept the Tender Offer unconditionally and for every Share on the book-entry account mentioned in the acceptance form on the date and time of the execution of the sale and purchase of the Shares. Acceptance given during the Offer Period is effective also until the end of any extended Offer Period. Most of the Finnish book-entry account operators will send a notification of the Tender Offer, including instructions and the relevant acceptance form to their customers who are registered as shareholders in the shareholders’ register of the Company maintained by Euroclear Finland Ltd. (“Euroclear”). Shareholders who do not receive such notification from their account operator or asset manager can contact any branch office of Nordea Bank AB (publ), Finnish Branch (“Nordea Bank”) where such shareholders shall receive necessary information and can give their acceptance. A shareholder in the Company whose shareholdings are registered in the name of a nominee and who wishes to accept the Tender Offer shall effect such acceptance in accordance with the nominee’s instructions. The Offeror will not send acceptance forms or other documents related to the Tender Offer to such shareholders in the Company. Pledged Shares may only be tendered with the consent of the relevant pledgee. The obtaining of such consent shall be the responsibility of the relevant shareholder in the Company. The consent by the pledgee shall be delivered in writing to the account operator. A shareholder in the Company who is registered as a shareholder in the shareholders’ register of the Company and who wishes to accept the Tender Offer shall submit a properly completed and duly executed acceptance form to the account operator managing the shareholder’s book-entry account in accordance with its instructions and within the time limit set by the account operator or, in the case such account operator does not accept acceptance forms (e.g. Euroclear), such shareholder shall contact any branch office of Nordea Bank to give his/her acceptance to tender the Shares. The acceptance form shall be submitted so that it is received during the Offer Period or, if the Offer Period has been extended, during such extended Offer Period, however, always in accordance with the instructions of the relevant account operator. In the event of a Subsequent Offer Period, the acceptance form shall be submitted so that it is received during the Subsequent Offer Period, however, always in accordance with the instructions of the relevant account operator. The method of delivery of acceptance forms is at the shareholder’s option and risk, and the delivery will be deemed made only when actually received by the relevant account operator or Nordea Bank. The Offeror reserves the right to reject any acceptance given in an incorrect or incomplete manner. The Offeror may also reject any partial tender of the Shares per book-entry account. By accepting the Tender Offer, the shareholder of the Company authorizes Nordea Bank or a party authorized by Nordea Bank or the account operator managing the shareholder’s book-entry account to enter a transfer restriction or a sales reservation on the shareholder’s book-entry account after the shareholder has delivered its acceptance of the Tender Offer. In addition, the shareholder who has accepted the Tender Offer authorizes Nordea Bank or a party authorized by Nordea Bank or the account operator managing the shareholder’s book-entry account to perform the necessary entries and to take all other actions required to technically execute the Tender Offer and to sell all the Shares held at such book-entry account at the time of the execution of trades under the Tender Offer to the Offeror in accordance with the terms and conditions of the Tender Offer. A shareholder that has validly accepted the Tender Offer and that has not properly withdrawn its acceptance in accordance with the terms and conditions of the Tender Offer may not sell or otherwise dispose of its tendered Shares. A transfer restriction in respect of the Shares will be registered in the relevant book-entry account after a shareholder has submitted the acceptance for the Tender Offer. If the Tender Offer is not completed or if the tender is properly withdrawn by the shareholder in accordance with the terms and conditions of the Tender Offer, the transfer restriction registered on the tendered Shares in the relevant book-entry account will be removed as soon as possible and within approximately three (3) Finnish banking days following the announcement that the Tender Offer will not be completed or the receipt of a notice of withdrawal in accordance with the terms and conditions of the Tender Offer. Option Rights 2014A Option Rights and 2014B Option Rights registered in the Finnish book-entry securities system Pursuant to the terms and conditions of the 2014 Option Rights, the share subscription period has with respect to the Option Rights belonging to the series 2014A begun on 1 February 2016, and to the series 2014B begun on 1 February 2017, and these Option Rights have been registered in the Finnish book-entry system. The acceptance procedure described here only applies to the 2014A Option Rights and the 2014B Option Rights. The Tender Offer must be accepted separately for each book-entry account. A holder of Option Rights of the Company giving the acceptance must have a cash account in a financial institution operating in Finland or abroad. A holder of Option Rights may only accept the Tender Offer unconditionally and for every Option Right on the book-entry account mentioned in the acceptance form on the date and time of the execution of the sale and purchase of the Option Rights. Acceptance given during the Offer Period is effective also until the end of any extended Offer Period.

Most of the Finnish book-entry account operators will send a notification of the Tender Offer, including instructions and the relevant acceptance form to their customers who are holders of Option Rights. Holders of Option Rights who do not receive such notification from their account operator or asset manager can contact any branch office of Nordea Bank where such holders of Option Rights shall receive necessary information and can give their acceptance. A holder of Option Rights whose holdings are registered in the name of a nominee and who wishes to accept the Tender Offer shall effect such acceptance in accordance with the nominee’s instructions. The Offeror will not send acceptance forms or other documents related to the Tender Offer to such holders of Option Rights in the Company. Pledged Option Rights may only be tendered with the consent of the relevant pledgee. The obtaining of such consent shall be the responsibility of the relevant holder of Option Rights. The consent by the pledgee shall be delivered in writing to the account operator. A holder of Option Rights who wishes to accept the Tender Offer shall submit a properly completed and duly executed acceptance form to the account operator managing the holder’s book-entry account in accordance with its instructions and within the time limit set by the account operator or, in the case such account operator does not accept acceptance forms (e.g. Euroclear), such holder of Option Rights can contact any branch office of Nordea Bank to give his/her acceptance to tender the Option Rights. The acceptance form shall be submitted so that it is received during the Offer Period or, if the Offer Period has been extended, during such extended Offer Period, however, always in accordance with the instructions of the relevant account operator. In the event of a Subsequent Offer Period, the acceptance form shall be submitted so that it is received during the Subsequent Offer Period, however, always in accordance with the instructions of the relevant account operator. The method of delivery of acceptance forms is at the option and risk of the holder of Option Rights, and the delivery will be deemed made only when actually received by the relevant account operator or Nordea Bank. The Offeror reserves the right to reject any acceptance given in an incorrect or incomplete manner. The Offeror may also reject any partial tender of the Option Rights per book-entry account. By accepting the Tender Offer, the holder of Option Rights authorizes Nordea Bank or a party authorized by Nordea Bank or the account operator managing the holder’s book-entry account to enter a transfer restriction or a sales reservation after the holder of Option Rights has delivered its acceptance of the Tender Offer. In addition, the holder of Option Rights who has accepted the Tender Offer authorizes Nordea Bank or a party authorized by Nordea Bank or the account operator managing the holder’s book-entry account to perform the necessary entries and to take all other actions required to technically execute the Tender Offer and to sell all the Option Rights held at such book-entry account at the time of the execution of trades under the Tender Offer to the Offeror in accordance with the terms and conditions of the Tender Offer. A holder of Option Rights that has validly accepted the Tender Offer and that has not properly withdrawn its acceptance in accordance with the terms and conditions of the Tender Offer may not sell or otherwise dispose of its tendered Option Rights. A transfer restriction in respect of the Option Rights will be registered in the relevant book-entry account after a holder of Option Rights has submitted the acceptance for the Tender Offer. If the Tender Offer is not completed or if the tender is properly withdrawn by the holder of Option Rights in accordance with the terms and conditions of the Tender Offer, the transfer restriction registered on the tendered Option Rights in the relevant book-entry account will be removed as soon as possible and within approximately three (3) Finnish banking days following the announcement that the Tender Offer will not be completed or the receipt of a notice of withdrawal in accordance with the terms and conditions of the Tender Offer. 2014C Option Rights, 2015A Option Rights and 2015B Option Rights not registered in the Finnish book-entry securities system Pursuant to the terms and conditions of the Option Rights, the share subscription period has not begun with respect to the Option Rights belonging to the series 2014C, 2015A and 2015B and these Option Rights have not been registered in the Finnish book-entry system. The acceptance procedures described herein apply only to the series 2014C, 2015A and 2015B Option Rights. A holder of Option Rights of the Company not registered in the Finnish book-entry securities system may only accept the Tender Offer for all Option Rights held by him/her on the date of the execution of the sale and purchase of the Option Rights. A holder of Option Rights must have a cash account in a financial institution operating in Finland or abroad. Nordea Bank will send a notification of the Tender Offer, including instructions and the relevant acceptance form, to all holders of Option Rights who are registered at the beginning of the Offer Period to the registry of holders of Option Rights held by the Company. The notification and instructions are sent to the address stated in such registry. If the holder of Option Rights does not receive such notification and acceptance form from Nordea Bank, or if the instructions and acceptance form cannot be sent because the address of the holder of Option Rights is unknown, the holder of Option Rights can contact the Company which shall instruct the holder of Option Rights on giving his/her acceptance.

Pledged Option Rights may only be tendered with the consent of the relevant pledgee. The obtaining of such consent shall be the responsibility of the relevant holder of Option Rights. The consent by the pledgee shall be delivered in writing together with the acceptance form. A holder of Option Rights who wishes to accept the Tender Offer shall submit a properly completed and duly executed acceptance form in accordance with the instructions and within the time limit set by Nordea Bank. The acceptance form shall be submitted so that it is received during the Offer Period or, if the Offer Period has been extended, during such extended Offer Period, however, always in accordance with the instructions of Nordea Bank. In the event of a Subsequent Offer Period, the acceptance form shall be submitted so that it is received during the Subsequent Offer Period, however, always in accordance with the instructions of Nordea Bank. Nordea Bank may set a separate time limit for delivering the acceptance form that ends already before the expiry of the Offer Period, the extended Offer Period or the Subsequent Offer Period. The method of delivery of acceptance forms is at the option and risk of the holder of Option Rights, and the delivery will be deemed made only when actually received by Nordea Bank. The Offeror reserves the right to reject any acceptance given in an incorrect or incomplete manner. The Offeror may also reject any partial tender of the Option Rights held by a holder of Option Rights. A holder of Option Rights that has validly accepted the Tender Offer may not sell or otherwise dispose of its tendered Option Rights. By accepting the Tender Offer, the holder of Option Rights authorizes Nordea Bank to sell his/her Option Rights to the Offeror in accordance with the terms and conditions of the Tender Offer. 4.7 Withdrawal Rights In accordance with the Chapter 11, Section 16, Subsection 1 of the SMA, the acceptances for the Shares and the Option Rights validly tendered in accordance with the terms and conditions of the Tender Offer may be withdrawn at any time during the Offer Period or, if the Offer Period has been extended, during such extended Offer Period, until the Offeror has announced that all the Conditions to Completion have been fulfilled by the Offeror or the Offeror has waived the right to invoke them, thereby declaring the Tender Offer unconditional. After such announcement, the acceptances for the Shares and the Option Rights already tendered may no longer be withdrawn except in the event that a third party announces a competing public tender offer for the Shares and the Option Rights before the execution of the sale and purchase of the Shares and the Option Rights in accordance with sections 4.9 and 4.10 below. The holders of the Shares and/or the Option Rights validly tendered may also withdraw their acceptance during the Offer Period if the Offer Period has lasted over ten (10) weeks and the Tender Offer has not been completed. The proper withdrawal of the acceptance for the Shares and/or the Option Rights validly tendered requires that a written notice of withdrawal is submitted to the same account operator to whom the acceptance form with respect to such Shares and/or Option Rights was submitted. In case the acceptance form with respect to Shares and/or Option Rights was submitted to Nordea Bank, the notice of withdrawal must be submitted to Nordea Bank. In case of holdings that are registered in the name of a nominee, the holders of Shares or Option Rights shall instruct the nominee to submit the notice of withdrawal. If a holder of Shares or Option Rights registered in the Finnish book-entry securities system withdraws his/her acceptance of the Tender Offer in accordance with the terms and conditions of the Tender Offer, the transfer restriction registered on the tendered Shares and Option Rights in the relevant book-entry account will be removed as soon as possible and within approximately three (3) Finnish banking days following the receipt of a notice of withdrawal in accordance with the terms and conditions of the Tender Offer. As for the Option Rights not registered in the book-entry securities system, Nordea Bank will send a proof of the withdrawal to the relevant holder of Option Rights to the address registered to the registry of holders of Option Rights held by the Company in case of a possible withdrawal of the acceptance of the Tender Offer in accordance with the terms and conditions of the Tender Offer. Shares and/or Option Rights for which an acceptance is withdrawn may be re-tendered by following the acceptance procedures described in section 4.6 above at any time prior to the expiry of the Offer Period or, if the Offer Period has been extended, prior to the expiry of such extended Offer Period or during the Subsequent Offer Period, if any. The account operator managing the relevant book-entry account or the nominee may charge a fee for withdrawals in accordance with its price list. In the event of a Subsequent Offer Period, the acceptance of the Tender Offer shall be binding and cannot be withdrawn, unless otherwise provided under mandatory law. 4.8 Announcement of the Result of the Tender Offer The Offeror will announce the preliminary result of the Tender Offer on or about the first (1st) Finnish banking day following the expiry of the Offer Period or, if applicable, the extended or discontinued Offer Period, and will announce the final result on or about the third (3rd) Finnish banking day following the expiry of the Offer Period or, if applicable,

the extended or discontinued Offer Period. The announcement of the final result will confirm (i) the percentage of the Shares and the Option Rights that have been validly tendered and not properly withdrawn and (ii) whether the Tender Offer will be completed. In the event of a Subsequent Offer Period, the Offeror will announce the initial percentage of the Shares and the Option Rights validly tendered during the Subsequent Offer Period on or about the first (1st) Finnish banking day following the expiry of the Subsequent Offer Period and the final percentage on or about the third (3rd) Finnish banking day following the expiry of the Subsequent Offer Period. 4.9 Terms of Payment and Settlement of Shares The sale and purchase of the Shares validly tendered and not properly withdrawn in accordance with the terms and conditions of the Tender Offer will be executed on or about the fourth (4th) Finnish banking day following the expiry of the Offer Period, or if the Offer Period has been extended or discontinued, the expiry of the extended or discontinued Offer Period. The sale and purchase of the Shares will take place on Nasdaq Helsinki if permitted by the rules applicable to securities trading on Nasdaq Helsinki. Otherwise, the sale and purchase of the Shares will take place outside of Nasdaq Helsinki. Settlement will be effected on or about the second (2nd) Finnish banking day following the above completion of trades (the “Settlement Date”). The payment of the Share Offer Price will be made on the Settlement Date into the bank account connected to the shareholder’s book-entry account or, in the case of shareholders whose holdings are registered in the name of a nominee, into the bank account specified by the custodian or nominee. In any case, the Share Offer Price will not be paid to a bank account situated in United States, Canada, Japan, Australia, South Africa or Hong Kong or any other jurisdiction where the Tender Offer is not to be made (see section “Important information”), and all guidance from custodians or nominees specifying bank accounts in such jurisdictions will be rejected. Actual time of receipt for the payment by the shareholder will depend on the schedules of money transactions between financial institutions and agreements between the holder and account operator, custodian or nominee in each case. In the event of a Subsequent Offer Period, the Offeror shall in connection with the announcement thereof announce the terms of payment and settlement for the Shares tendered during the Subsequent Offer Period. The completion trades of the Shares validly tendered in accordance with the terms and conditions of the Tender Offer during the Subsequent Offer Period shall, however, be executed at least within two (2) week intervals. The Offeror reserves the right to postpone the payment of the Share Offer Price if payment is prevented or suspended due to a force majeure event, but shall immediately effect such payment once the force majeure event preventing or suspending payment is resolved. 4.10 Terms of Payment and Settlement of Option Rights 2014A Option Rights and 2014B Option Rights registered in the Finnish book-entry securities system The sale and purchase of Option Rights registered in the Finnish book-entry securities system that are validly tendered and not properly withdrawn in accordance with the terms and conditions of the Tender Offer will be executed on the same date as the sale and purchase of the Shares, i.e. on or about the fourth (4th) Finnish banking day following the expiry of the Offer Period, or, if applicable, the extended or discontinued Offer Period. The sale and purchase of the 2014A Option Rights and the 2014B Option Rights will take place on Nasdaq Helsinki if permitted by the rules applicable to securities trading on Nasdaq Helsinki. Otherwise, the sale and purchase of the 2014A Option Rights and the 2014B Option Rights will take place outside of Nasdaq Helsinki. Settlement will be effected no later than on the Settlement Date, when the payment of the applicable Option Right Offer Price will be made into the bank account attached to the book-entry account of the holder of the Option Rights or, in case of nominee-registered Option Rights, into the bank account specified by the custodian or nominee. In any case, the Option Right Offer Price will not be paid to a bank account situated in United States, Canada, Japan, Australia, South Africa or Hong Kong or any other jurisdiction where the Tender Offer is not to be made (see section “Important information”), and all guidance from custodians or nominees specifying bank accounts in such jurisdictions will be rejected. Actual time of receipt for the payment by the holder of the Option Rights will depend on the schedules of money transactions between financial institutions and agreements between the holder and account operator, custodian or nominee in each case. In the event of a Subsequent Offer Period, the Offeror shall in connection with the announcement thereof announce the terms of payment and settlement for the Option Rights tendered during the Subsequent Offer Period. The sale and purchase of the Option Rights validly tendered in accordance with the terms and conditions of the Tender Offer during the Subsequent Offer Period shall, however, be executed at least within two (2) week intervals. The Offeror reserves the right to postpone the payment of the applicable Option Right Offer Price if payment is prevented or suspended due to a force majeure event, but shall immediately effect such payment once the force majeure event preventing or suspending payment is resolved.

2014C Option Rights, 2015A Option Rights and 2015B Option Rights not registered in the Finnish book-entry securities system The payment of the applicable Option Right Offer Price will be made no later than on the Settlement Date into the bank account of the holder of the Option Rights specified in the acceptance form. In any case, the Option Right Offer Price will not be paid to a bank account situated in United States, Canada, Japan, Australia, South Africa or Hong Kong or any other jurisdiction where the Tender Offer is not to be made (see section “Important information”), and all guidance from custodians or nominees specifying bank accounts in such jurisdictions will be rejected. Actual time of receipt for the payment by the holder of the Option Rights will depend on the schedules of money transactions between financial institutions. In the event of a Subsequent Offer Period, the Offeror shall in connection with the announcement thereof announce the terms of payment and settlement for the Option Rights tendered during the Subsequent Offer Period. The sale and purchase of the Option Rights validly tendered in accordance with the terms and conditions of the Tender Offer during the Subsequent Offer Period shall, however, be executed at least within two (2) week intervals. The Offeror reserves the right to postpone the payment of the applicable Option Right Offer Price if payment is prevented or suspended due to a force majeure event, but shall immediately effect such payment once the force majeure event preventing or suspending payment is resolved. 4.11 Transfer of Ownership Title to the Shares validly tendered in the Tender Offer will pass to the Offeror against the payment of the Share Offer Price by the Offeror to the tendering shareholder. Title to the Option Rights validly tendered in the Tender Offer will pass to the Offeror against the payment of the applicable Option Right Offer Price by the Offeror to the tendering holder of Option Rights. 4.12 Transfer Tax and Other Payments The Offeror will pay the transfer taxes, if any, relating to the sale and purchase of the Shares and Option Rights in connection with the completion of the Tender Offer. The Offeror will not, however, be responsible for payment of such transfer tax, where the tax liability is based on the Finnish Tax Administration’s position on taxation of employment based options stated in its guidance (record no. A243/200/2016). According to the guidance, such transfer tax liability with respect to employment based option arrangements arises at the moment when a subscription right is granted, but the amount of payable transfer tax can only be determined upon exercising the right (e.g., in connection with the Tender Offer when the Option Rights are disposed). Fees charged by account operators, asset managers, nominees or any other person for registering the release of any pledges or other possible restrictions preventing a sale of the relevant Shares or Option Rights, as well as fees relating to a withdrawal of the tender by a shareholder or a holder of Option Rights in accordance with section 4.7 above, will be borne by each shareholder and holder of Option Rights. The Offeror shall be responsible for other customary fees relating to book-entry registrations required for the purposes of the Tender Offer, the sale and purchase of the Shares and Option Rights tendered under the Tender Offer or the payment of the Share Offer Price and the Option Right Offer Price, respectively. 4.13 Other Issues The Offeror reserves the right to amend the terms and conditions of the Tender Offer in accordance with Chapter 11, Section 15, Subsection 2 of the SMA, subject to the provisions of the Transaction Agreement. Subject to the provisions of the Transaction Agreement, the Offeror reserves the right to extend the Offer Period and to amend the terms and conditions of the Tender Offer (including a potential withdrawal of the Tender Offer) in accordance with Chapter 11, Section 17 of the SMA if, during the Offer Period or any extended Offer Period, a third party announces a competing public tender offer for the Shares and Option Rights. The Offeror shall have sole discretion to determine all other issues relating to the Tender Offer, subject to the requirements of applicable law as well as the provisions of the Transaction Agreement. The Tender Offer is not being made directly or indirectly in any jurisdiction where either the making of or participating in such tender offer would be prohibited by applicable law or would require registration or further documents or measures in addition to those required under the Finnish law. As such, this Tender Offer Document and related acceptance forms are not and may not be distributed, forwarded or transmitted in or into any jurisdiction where such distribution, forwarding or transmission would be prohibited by applicable law or would require registration or further documents or measures in addition to those required under the Finnish law by any means whatsoever including, without limitation, mail, facsimile transmission, e-mail, telephone, Internet or other forms of communications. In particular, the Tender Offer is not being made, directly or indirectly, in or into, and this Tender Offer Document must under no circumstances be distributed into, or accepted by any such means within, or by persons located or resident in, or persons

(including agents, fiduciaries or other intermediaries) acting for the account or benefit of persons located or resident in, the United States, Canada, Japan, Australia, South Africa or Hong Kong. Any purported acceptance of the Tender Offer resulting directly or indirectly from a violation of these restrictions will be invalid.

5. PRESENTATION OF COMPTEL

All financial and other information presented in this Tender Offer Document concerning the Company are exclusively based on the unaudited financial statements bulleting published by the Company for the financial year ended 31 December 2016, the audited financial statements published by the Company for the financial year ended 31 December 2015, stock exchange releases published by the Company, entries in the Finnish Trade Register, the shareholders’ register of the Company dated 21 February 2017 and other information publicly available. Consequently, the Offeror does not accept any responsibility for such information, except for the accurate restatement of such information herein. 5.1 Overview The Company is a public limited company incorporated under the laws of Finland, and its Shares are listed on the official list of Nasdaq Helsinki with trading code CTL1V. In addition, the Company's Option Rights 2014A have been listed on the official list of Nasdaq Helsinki with the trading code CTL1VEW114 and Option Rights 2014B with a trading code CTL1VEW214.The business identity code of the Company is 0621455-2. The registered office of the Company is in Helsinki, Finland and its registered address is Salmisaarenaukio 1, FI-00180 Helsinki, Finland. The Company’s head office is located in Helsinki. Comptel was established in 1986 and it has approximately 837 employees in 32 countries. Comptel has completed over 1,400 customer projects in more than 90 countries. It processes 20 percent of world´s mobile usage data every day, orchestrates communications and digital services for more than two billion end-users daily and its largest customer has around 300 million subscribers. Comptel Group’s net sales for the financial year ended 31 December 2016 were EUR 100.0 million. The Group’s operating profit for the same period was EUR 11.0 million, which corresponded to 11.0 percent of the net sales. The Company’s major sites are located in Finland, Bulgaria, Malaysia, India, the United Kingdom and Norway. According to the Articles of Association of the Company, the scope of the Company’s business activities is to offer products and services related to information technology, develop information systems, buy, sell and maintain information processing devices, provide training and consultancy in the field and engage in other comparable activities. The Company may own and control shares, units and other securities and real estate. 5.2 Share Capital and Ownership Structure As at the date of this Tender Offer Document, the registered share capital of the Company is EUR 2,141,096.20 consisting of 109,271,496 Shares. The Company has a single share series and each Share entitles its holder to one (1) vote at the General Meetings of Shareholders. The Shares carry equal rights to dividends. The ten largest shareholders in the Company and their holdings on 21 February 2017 are presented in the table below.

% of shares and Shareholder Shares in total voting rights Mandatum Life Insurance Company Limited 20,532,625 18.79 Elisa Corporation 14,304,000 13.09 Kaleva Mutual Insurance Company 8,724,980 7.98 Nordea Bank AB (publ), Finnish Branch 7,525,603 6.89 Skandinaviska Enskilda Banken AB (publ) Helsinki Branch 5,320,547 4.87 Varma Mutual Pension Insurance Company 5,144,825 4.71 The State Pension Fund 2,600,000 2.38 Ilmarinen Mutual Pension Insurance Company 2,236,368 2.05 Sijoitusrahasto Taaleritehdas Mikro Markka 2,192,890 2.01 Etola Erkki Olavi 1,500,000 1.37 Ten largest in total 70,081,838 64.14

The Articles of Association of the Company do not include any provisions or restrictions on voting rights that deviate from the provisions of the FCA. 5.3 Authorization to Issue Shares, Options and Other Special Rights entitling to Shares in Comptel The Annual General Meeting of Shareholders of the Company resolved on 6 April 2016 to authorize the Board of Directors of Comptel to decide on the issuance of shares, options and other special rights entitling to shares, so that the total number of new shares, including the shares issued pursuant to the special rights, may be 21,400,000 at the maximum. The number of treasury shares held by the Company that can be assigned and/or obtained on the basis of special rights may not exceed 10,700,000. Based on the authorization new shares may be issued and existing treasury 26

shares held by the Company may be transferred to shareholders pro rata to their holdings or in a directed share issue in deviation from the shareholders’ pre-emptive subscription rights in case the deviation is justified by a weighty financial reason for the Company, such as development of the capital structure of the Company, financing or implementing acquisitions or other arrangements or implementing share-based incentive programs to the Company’s personnel. The authorization also entitles to decide on a share issue free of charge to the Company itself. The number of shares to be issued to the Company shall not exceed 10,700,000, including the number of own shares acquired by the Company by virtue of the authorization to repurchase the Company's own shares. The Board of Directors shall decide on other terms and conditions related to the authorizations. The authorizations shall be valid until 30 June 2017, apart from the authorization concerning the implementation of the Company's share-based incentive programs, which shall be valid for five years after the decision by the Annual General Meeting. The authorization revoked the corresponding authorization decided in the Annual General Meeting of 9 April 2015. The Board of Directors of the Company has proposed to the Annual General Meeting of Shareholders of the Company to be held on 4 April 2017 that the Annual General Meeting would authorize the Board of Directors of the Company to decide on the issuance of new shares and/or disposal of treasury shares either against or without consideration. Furthermore, the Board of Directors of Comptel has proposed to the Annual General Meeting of Shareholders of the Company that the Annual General Meeting would authorize the Board of Directors to issue options and other special rights entitling to shares referred to in Chapter 10, Section 1 of the FCA, that would entitle to subscribe for new shares or treasury shares in the Company against consideration, either by paying the subscription price in cash or by setting off the subscriber's receivable against the subscription price. The total number of new shares, including the shares issued pursuant to the special rights, would be 21,400,000 at the maximum. The number of treasury shares held by the Company that can be assigned and/or obtained on the basis of special rights would not exceed 10,700,000. Based on the proposed authorization new shares could be issued and existing treasury shares held by the Company could be transferred to shareholders pro rata to their holdings or in a directed share issue in deviation from the shareholders’ pre- emptive subscription rights in case the deviation is justified by a weighty financial reason for the Company, such as development of the capital structure of the Company, financing or implementing acquisitions or other arrangements or implementing share-based incentive programs to the Company’s personnel. The authorization would also entitle the Board of Directors to decide on a share issue free of charge to the Company itself. The number of shares that could be issued to the Company would not exceed 10,700,000, including the number of own shares acquired by the Company by virtue of the authorization to repurchase the Company's own shares. The subscription price of the new shares and the consideration paid for the Company’s own shares would be recorded in the invested non-restricted equity fund. The Board of Directors has proposed that it would decide on other terms and conditions related to the authorizations. The authorizations would be valid until 30 June 2018, apart from the authorization concerning the implementation of the Company's share-based incentive programs, which would be valid for five years after the decision by the Annual General Meeting. The authorization would revoke the corresponding authorization decided in the Annual General Meeting of 6 April 2016. 5.4 Option Rights Comptel currently has two share option plans, the 2014 share option plan and the 2015 share option plan. The 2014 share option plan is divided into tranches 2014A, 2014B and 2014C and the 2015 share option plan is divided into tranches 2015A and 2015B. The 2014A and 2014B Option Rights are publicly traded on the Nasdaq Helsinki stock exchange. At its meeting held on 4 February 2014, the Board of Directors of Comptel decided, by virtue of the authorization granted by the Company's Annual General Meeting held on 20 March 2013, to grant the 2014 Option Rights to persons who have a contractual relationship including fixed work performance with the Company and its subsidiaries and companies belonging to the Comptel Group. Under the terms and conditions of the 2014 Option Rights, a maximum of 4,200,000 2014 Option Rights were granted. Of the total granted Option Rights, 2,200,000 are marked with the symbol 2014A, 1,000,000 are marked with the symbol 2014B and 1,000,000 are marked with the symbol 2014C. Each 2014 Option Right entitles its holder to subscribe for one (1) new Comptel share, thus entitling the holders of the Option Rights to receive a maximum total of 4,200,000 new shares of the Company. The share subscription prices related to each Option Right, in accordance with the terms and conditions of the 2014 Option Rights, are EUR 0.48 for each 2014A Option Right, and EUR 0.88 for each 2014B Option Right and EUR 1.51 for each 2014C Option Right. At its meeting held on 9 September 2015, the Board of Directors of Comptel decided, by virtue of the authorization granted by the Company's Annual General Meeting held on 9 April 2015, to grant the 2015 Option Rights to the Company's President & CEO. Under the terms and conditions of the 2015 Option Rights, a maximum of 3,478,260 2015 Option Rights were granted. Of the total granted Option Rights, 1,739,130 are marked with the symbol 2015A and 1,739,130 are marked with the symbol 2015B. The subscription price of the 2015 Option Rights was EUR 0.23 per Option Right. Each 2015 Option Right entitles its holder to subscribe for one (1) new Comptel share, thus entitling the President & CEO of the Company to receive a maximum total of 3,478,260 new shares of the Company. The share subscription 27

prices related to each Option Right, in accordance with the terms and conditions of the 2015 Option Rights, are EUR 0.89 for each 2015A Option Right and EUR 0.89 for each 2015B Option Right. The granted 2014 Option Rights and 2015 Option Rights entitle their holders to subscribe for a maximum total of 7,678,260 new or existing shares of the Company. According to the stock exchange releases published by Comptel, of the 2014 Option Rights in total 576,087 had been used for share subscriptions by the date of this Tender Offer Document. As at the date of this Tender Offer Document, Comptel has not disclosed that any 2014B Option Rights would have been used to subscribe for shares. A summary of the Comptel Option Rights is presented in the following table:

Number of allocated Number of shares that may be 2014 Option Rights Option Rights subscribed for per Option Right Share subscription period 2014A 2,200,000 1 1 Feb 2016 – 31 Jan 2018 2014B 1,000,000 1 1 Feb 2017 – 31 Jan 2019 2014C 1,000,000 1 1 Feb 2018 – 31 Jan 2020 2014 Option Rights 4,200,000 total

Number of allocated Number of shares that may be 2015 Option Rights Option Rights subscribed for per Option Right Share subscription period 2015A 1,739,130 1 15 Aug 2018 – 15 Sep 2019 2015B 1,739,130 1 15 Aug 2019 – 15 Sep 2019 2015 Option Rights 3,478,260 total In addition to the Option Rights described above, there are no other securities entitling their holders to receive shares in the Company. 5.5 Treasury Shares According to the Offeror's knowledge, the Company held a total of 117,129 Treasury Shares at the date of this Tender Offer Document. The Annual General Meeting of the Company held on 6 April 2016, authorized the Board of Directors to decide on repurchase of the Company's own Shares up to a maximum number of 10,700,000 shares. The Company's own Shares may be repurchased otherwise than in proportion to the holdings of the shareholders using the non-restricted equity at the market price of the Shares in public trading through Nasdaq Helsinki at the time of the acquisition. The Shares shall be repurchased for strengthening or developing the Company's capital structure, to be used in financing or implementing acquisitions or other arrangements, to implement the Company's share-based incentive programs or to be conveyed by other means or to be canceled. Under the authorization the Board of Directors shall decide on other terms and conditions related to the repurchase of the Company's own Shares. The authorization to repurchase the Company's own Shares shall be valid until 30 June 2017, and it revokes the corresponding authorization decided in the Annual General Meeting of 9 April 2015. The Board of Directors of the Company has proposed to the Annual General Meeting of Shareholders of the Company to be held on 4 April 2017 that the Annual General Meeting would authorize the Board of Directors of the Company to decide on repurchase of the Company's own Shares up to a maximum number of 10,700,000 shares. The Company's own Shares could be repurchased otherwise than in proportion to the holdings of the shareholders using the non- restricted equity at the market price of the Shares in public trading through Nasdaq Helsinki at the time of the acquisition. The Shares could only be repurchased for strengthening or developing the Company's capital structure, to be used in financing or implementing acquisitions or other arrangements, to implement the Company's share-based incentive programs or to be conveyed by other means or to be canceled. Under the authorization the Board of Directors would decide on other terms and conditions related to the repurchase of the Company's own Shares. The authorization to repurchase the Company's own Shares would be valid until 30 June 2018, and it would revoke the corresponding authorization decided in the Annual General Meeting of 6 April 2016. 5.6 Shareholders’ Agreements The Offeror is not aware of any shareholders’ agreements or other agreements relating to the use of voting rights in the Company. 5.7 Board of Directors, President and CEO, and Auditors In accordance with the provisions of the FCA and the Articles of Association of the Company (see Annex E), the supervision and administration of the Company are divided between the shareholders represented at the General

Meeting of Shareholders, the Board of Directors and the President and CEO. Under the Articles of Association of the Company, the Board of Directors of the Company shall consist of at least three (3) and not more than six (6) members. As at the date of this Tender Offer Document, the Board of Directors of the Company consists of the following persons: Mr. Pertti Ervi (Chairman), Mr. Hannu Vaajoensuu (Vice Chairman), Ms. Eriikka Söderström, Mr. Antti Vasara and Mr. Thomas Berlemann. The President and CEO of the Company as at the date of this Tender Offer Document is Mr. Juhani Hintikka. The auditor of the Company is the auditing firm Ernst & Young Oy (the responsible auditor being Mr. Mikko Järventausta, APA). Shareholders representing approximately 39.86 percent of the Shares and votes in the Company have notified the Company that they will propose to the Annual General Meeting to be held on 4 April 2017 that the current Board members Mr. Pertti Ervi, Mr. Hannu Vaajoensuu, Ms. Eriikka Söderström, Mr. Antti Vasara and Mr. Thomas Berlemann be re-elected as members of the Board of Directors. The Board of Directors of the Company has proposed, based on the recommendation of the Board’s Audit Committee, to the Annual General Meeting to be held on 4 April 2017 that the Annual General Meeting would re-elect Ernst & Young Oy, Authorized Public Accountants organization, as the Auditor of the Company. 5.8 Financial Information The audited consolidated financial statements of the Company for the financial year ended 31 December 2015 are included in this Tender Offer Document (see Annex B) in the form published by the Company. The aforementioned financial statements have been presented to and adopted by the Annual General Meeting of the Company held on 6 April 2016. This Tender Offer Document includes the Company's unaudited financial statements bulletin for the financial year ended on 31 December 2016 (see Annex C) in the form published by the Company. The Board of Directors of the Company has proposed to the Annual General Meeting of the Company to be held on 4 April 2017 that no dividend be paid from the financial year ended on 31 December 2016. The Board of Directors of the Company has proposed to the Annual General Meeting of the Company to be held on 4 April 2017 that the Annual General Meeting would authorize the Board of Directors to decide on a dividend payment of up to a maximum of EUR 0.04 per share in one tranche for the financial period ended on 31 December 2016 conditional upon the Transaction Agreement having been terminated for any reason other than consummation of the Tender Offer, meaning that the authorization can be used only provided that Tender Offer is not completed. The authorization to decide on payment of dividend would be valid until 31 December 2017. Based on this authorization, the Board of Directors would be entitled to decide on the dividend record date, dividend payment date and other matters required by the matter. When deciding on the possible payment of dividend, the Board of Directors shall assess the Company's liquidity and financial position as required by the FCA. 5.9 Future Prospects Published by the Company The future prospects of the Company have been described in the audited financial statements of the Company for the financial year ended 31 December 2015 and the unaudited financial statements bulletin published by the Company for the financial year ended 31 December 2016 (see Annexes B and C). The stock exchange release published by the Company on 9 February 2017 describes the guidance of the Board of Directors of Comptel for the year 2017 and the Company's financial goals for the strategic period 2017-2019 (see Annex D). 5.10 Articles of Association The Articles of Association of the Company are included in this Tender Offer Document (see Annex E).

6. PRESENTATION OF THE OFFEROR

6.1 Offeror and Nokia in Brief The Offeror is a limited liability company incorporated in accordance with the laws of Finland. Its business identity code is 2058430-6. The registered domicile of the Offeror is Helsinki and its address is Karaportti 3, FI-02610 Espoo, Finland. The Offeror is a wholly-owned indirect subsidiary of Nokia and a wholly-owned direct subsidiary of Nokia Solutions and Networks B.V. Nokia Solutions and Networks B.V. is a wholly-owned direct subsidiary of Nokia Finance International B.V., and Nokia Finance International B.V. is a wholly-owned direct subsidiary of Nokia. The Offeror's main business is part of Nokia's networks business area, in which the company offers a wide selection of various products ranging from hardware components for network operators to software solutions and, among others, services that support and optimize network operations and participates in the research and development of these products. The Offeror engages in the telecommunications industry and other sectors in the electronics industry, including the production and marketing of computer systems and devices, as well as other industrial and business activities. The company may own and control shares, units, other securities and real estate, and engage in related activities. The company may also engage in securities trading and other investment activities. The company may borrow money and pledge security. Nokia is a public limited company incorporated in accordance with the laws of Finland. Its shares are listed on the official lists of Nasdaq Helsinki and Euronext Paris (with the trading code NOKIA) and its American depositary shares (ADS) are listed on the New York Stock Exchange (with the trading code NOK). The company's registered business identity code is 0112038-9. The registered domicile of the company is Helsinki and its address is Karaportti 3, FI-02610 Espoo, Finland. The company is headquartered in Espoo. The Nokia Group's turnover was EUR 23,614 million in the financial year ended on 31 December 2016. The Group's operating loss for the same period was EUR 1,100 million, corresponding to 4.7 percent of turnover. The Nokia Group employs around 101,000 people and has customers in more than 100 countries. In 2016, Nokia had sales in approximately 130 countries. Nokia also has significant research and development activities, spending EUR 4.9 billion on R&D in 2016. Under its current Articles of Association, Nokia's corporate purpose is to research, develop, manufacture, market, sell and deliver products, software and services in a wide range of consumer and business-to-business markets. These products, software and services relate to, among others, network infrastructure for telecommunication operators and other enterprises, the IoT, human health and well-being, multimedia, big data and analytics, mobile devices and consumer wearables and other electronics. The company may also create, acquire and license intellectual property and software as well as engage in other industrial and commercial operations, including securities trading and other investment activities. The company may carry on its business operations directly, through subsidiary companies, affiliate companies and joint ventures. Nokia is one of the global leaders in technology and services for a connected world, offering providers of telecommunications services, authorities, major corporations and consumers the most comprehensive selection of products, services and licensing opportunities in the sector. Nokia is a global company with continuing operations in Europe, the Middle East, Africa, Asia-Pacific, Greater China, North America and Latin America. Furthermore, Nokia has research and development facilities in Europe, North America and Asia. Nokia's largest business, the Networks business, is divided into four business groups: Mobile Networks, Fixed Networks, IP/Optical Networks and Applications & Analytics. The Networks business is also supported by Nokia's research organization, Nokia Bell Labs research and innovation arm. Nokia's Networks business is one of the leading vendors in the mobile infrastructure markets. It offers a broad range of products and services for the software and networking and IP infrastructure markets as well as related services markets. The core target group for products and services are telecommunications operators, but the importance of the public sector and major corporations, among others, is growing. In addition, Nokia has a fifth business group, Nokia Technologies, which focuses on developing and licensing advanced technologies. Besides its bold product development activities, Nokia Technologies possesses a comprehensive portfolio of over 26,000 patent families. The Applications & Analytics business group is Nokia's dedicated software business. Nokia has long standing positions in its primary markets: Nokia's BSS solutions support hundreds of millions of subscribers and manage over 1.5 billion devices each day; Nokia is one of the leaders in LTE network management; Nokia has thousands of OSS deployments with differentiated capabilities in service assurance, automation, analytics and Cloud; and Nokia's Session Border Controller, a SDP that secures network borders and connects an exploding number of devices, stands out for its virtualization capabilities. These markets are being reshaped by four trends: the transition to the Cloud, the growth of the IoT, the increased need for security and privacy and the impact of augmented intelligence and machine learning. These trends impact the way networks will operate, how new services and business models will be monetized, how customer expectations will evolve and the speed at which CSPs and TXLEs will need to innovate.

The Nokia's Applications & Analytics business group is driving an aggressive innovation agenda that includes an Emerging Business unit that is developing software for IoT, security, Cloud, SON, and analytics. These advances are helping Nokia's customers:  modernize BSS systems to rapidly launch and monetize new IoT and Cloud services;  improve customer experiences with rich analytics and machine learning;  operate larger networks and more services with fewer staff through virtualization and automation;  predict issues before they happen with augmented intelligence;  scale IoT services with a platform that handles data collection, event processing, device management, data contextualization, data analytics, and end-to-end security;  increase the success of digital transformations with improved processes, collaboration and profitability; and  secure services and data with confidence. Growing this business into a standalone software business at scale is a key tenent of Nokia's strategy. The acquisition of Alcatel Lucent in January 2016 strengthened Nokia's already significant position in the field of next generation technology. With the acquisition, Nokia became one of the market leaders in North America and the leading supplier headquartered outside the country in China. In addition, Nokia is currently preparing a joint venture that will combine its telecommunications infrastructure businesses in China with Alcatel Lucent Shanghai Bell, a joint venture of Alcatel Lucent and the Chinese company China Huaxin Post & Telecommunication Economy Development Center. The new joint venture is expected to generate added value to both Nokia and its Chinese partner in the joint venture. Moreover, with the Alcatel Lucent acquisition, Nokia also strengthened its position in Europe, Latin America, the Middle East and Africa. Nokia's target following the acquisition of Alcatel Lucent is to achieve approximately EUR 1.2 billion in total annual cost savings in full year 2018. 6.2 Persons related to the Offeror as stipulated in Chapter 11, Section 5 of the SMA The Nokia Group of companies consists of Nokia Corporation and numerous direct or indirect subsidiaries, with the Offeror being one of these subsidiaries. Neither the Offeror, Nokia, Nokia Solutions and Networks B.V., Nokia Finance International B.V. nor any other company belonging to the Nokia group, and thus no party referred to in Chapter 11, Section 5 of the SMA, holds as at the date of this Tender Offer Document any Shares or Option Rights in the Company or has during the 6-month period preceding the Announcement acquired any Shares or Option Rights in the Company in public trading or otherwise. 6.3 Company’s Ownership in the Offeror To the best knowledge of the Offeror, the Company does not as at the date of this Tender Offer Document hold any shares or securities entitling to shares in the Offeror, Nokia or in the entities referred to in Chapter 11, Section 5 of the SMA.

TABLE OF CONTENTS FOR ANNEXES Page ANNEX A: STATEMENT OF COMPTEL’S BOARD OF DIRECTORS A1 The Statement by the Board of Directors of Comptel on the Tender Offer in the form published by the Company on 21 February 2017. The Offeror does not accept any responsibility for such information except for the accurate restatement of such information herein. ANNEX B: FINANCIAL STATEMENTS OF THE COMPANY B1 The financial statements of the Company for the financial year ended 31 December 2015 have been included in this Annex B in the form published by the Company. The Offeror does not accept any responsibility for such information except for the accurate restatement of such information herein. ANNEX C: FINANCIAL STATEMENTS BULLETING PUBLISHED BY THE COMPANY C1 The financial statements bulletin of the Company for the financial year ended 31 December 2016 has been included in this Annex C in the form published by the Company. The Offeror does not accept any responsibility for such information except for the accurate restatement of such information herein. ANNEX D: STOCK EXCHANGE RELEASE PUBLISHED BY THE COMPANY ON 9 FEBRUARY 2017 D1 The stock exchange release published by the Company on 9 February 2017 has been included in this Annex D in the form published by the Company. The Offeror does not accept any responsibility for such information except for the accurate restatement of such information herein. ANNEX E: ARTICLES OF ASSOCIATION OF THE COMPANY E1 The English language translation of the Articles of Association of the Company has been included in this Annex E in the form registered in the Finnish Trade Register on the date of this Tender Offer Document. The Offeror does not accept any responsibility for such information except for the accurate restatement of such information herein.

Annex A

Statement of the Board of Directors of Comptel Corporation regarding the voluntary public tender offer by Nokia

Comptel Corporation, Stock Exchange Release, February 21, 2017 at 3 PM EET

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES, CANADA, JAPAN, AUSTRALIA, SOUTH AFRICA OR HONG KONG OR IN ANY OTHER JURISDICTION IN WHICH THE TENDER OFFER WOULD BE PROHIBITED BY APPLICABLE LAW.

Statement of the Board of Directors of Comptel Corporation regarding the voluntary public tender offer by Nokia

Nokia Corporation (“Nokia”) and Comptel Corporation (“Comptel” of the “Company”) have announced on February 9, 2017 that Nokia through its wholly owned indirect subsidiary Nokia Solutions and Networks Oy (the “Offeror”), makes a voluntary public cash tender offer to purchase all of the issued and outstanding shares and option rights in Comptel that are not owned by Comptel or any of its subsidiaries (the “Tender Offer”).

The Board of Directors of Comptel has on February 21, 2017 decided to issue the below statement regarding the Tender Offer as required by the Finnish Securities Markets Act (746/2012, as amended).

TENDER OFFER IN BRIEF

Nokia and Comptel have on February 8, 2017 entered into a transaction agreement (the “Transaction Agreement”) setting out, among others, the terms and conditions pursuant to which the Tender Offer shall be made by Nokia through the Offeror.

The Tender Offer will be made in accordance with the terms and conditions of the tender offer document expected to be published by the Offeror on or about February 24, 2017 (the “TenderOffer Document”).

The offer price is EUR 3.04 in cash for each share in Comptel. The share offer price represents a premium of:

28.8 percent compared to the closing price of the shares on Nasdaq Helsinki Ltd. (“Nasdaq Helsinki”) on February 8, 2017, the last trading day before the announcement of the Tender Offer; and 51.2 percent compared to the volume-weighted average trading price of the Comptel shares on Nasdaq Helsinki during the 12-month period preceding the date of the announcement of the Tender Offer. The price offered for each option right granted under

Comptel’s share option schemes 2014 and 2015 and validly tendered in the Tender Offer will be EUR 2.56 in cash for each 2014A option right, EUR 2.16 in cash for each 2014B option right, EUR 1.53 in cash for each 2014C option right, EUR 2.15 in cash for each 2015A option right and EUR 2.15 in cash for each 2015B option right.

Any distribution of dividend or other assets by Comptel after the date of the Transaction Agreement shall reduce the Share Offer Price by an amount equal to such dividend or distribution per share. Such distribution shall not affect the offer price for the Comptel option rights.

The offer period under the Tender Offer is expected to commence on or about February 27, 2017 and to run for approximately four (4) weeks. The Offeror reserves the right to extend the offer period from time to time in accordance with the terms and conditions of the Tender Offer.

Pursuant to the Transaction Agreement, the Offeror is to acquire all issued and outstanding shares and all issued and outstanding option rights in Comptel.

The Tender Offer will be financed through Nokia group’s internal financing arrangements and no third party financing is required by the Offeror to complete the Tender Offer. The Tender Offer is thus not conditional upon obtaining any financing for the Tender Offer.

The following major shareholders of Comptel have irrevocably undertaken to accept the Tender Offer subject to certain customary conditions: Mandatum Life Insurance Company Limited, Elisa Corporation, Kaleva Mutual Insurance Company, Varma Mutual Pension Insurance Company and Ilmarinen Mutual Pension Insurance Company as well as the members of the Comptel Board of Directors and the President and CEO of Comptel (personally and through an entity in his control), representing jointly approximately 48.3 percent of the shares and votes in Comptel.

The Tender Offer is subject to, among others, approvals by the relevant regulatory authorities, such as competition authorities, and the Offeror gaining control of more than 90 percent of the outstanding Comptel shares on a fully diluted basis.

STATEMENT OF THE BOARD OF DIRECTORS

1. Background for the statement

Pursuant to the Finnish Securities Market Act, the Board of Directors of Comptel shall prepare a public statement regarding the Tender Offer.

The statement shall include a well-founded assessment of the Tender Offer from the perspective of Comptel and its shareholders as well as of the strategic plans and their likely effects on the operations and employment of Comptel presented by the Offeror in the Tender Offer Document.

For the purposes of issuing this statement, the Offeror has submitted to the Board of Directors of Comptel the draft version of the Finnish language Tender Offer Document in the form in which the Offeror has filed it with the Finnish Financial Supervisory Authority for approval on February 16, 2017.

In preparing its statement, the Board of Directors of Comptel has relied on information provided in the Offeror’s announcement regarding the Tender Offer published on February 9, 2017 and the draft Tender Offer Document by the Offeror and has not independently verified this information. Accordingly, the Board of Directors’ assessments of the consequences of the Tender Offer on Comptel’s business and employees should be treated with caution.

2. Assessment regarding strategic plans presented by the Offeror and their likely effects on the operations and employment of Comptel

Information given by the Offeror in the Tender Offer Document

The Board of Directors of Comptel has assessed the Offeror’s strategic plans based on the statements in Offeror’s announcement regarding the Tender Offer published on February 9, 2017 and the draft Tender Offer Document.

Based on information provided by Nokia, it is the intention of Nokia and the Offeror that Comptel will continue to operate as a separate unit, but its businesses might be eventually harmonized with and/or integrated into the standalone software business operated by Applications & Analytics business group of Nokia group based upon an integration plan to be developed by the management of Nokia. Further, Nokia has presented that certain employees and members of senior management of Comptel will play an important role in Nokia’s organization following the completion of the Tender Offer. Nokia has set forth that in order to encourage these key employees of Comptel to remain in the Company, the Offeror intends to offer them certain retention arrangements following the completion of the Tender Offer. The Offeror, however, intends, based on information provided by Nokia, to change the composition of the Board of Directors of Comptel after the completion of the Tender Offer.

According to Nokia, the planned acquisition is part of Nokia’s strategy to build a standalone software business at scale by expanding and strengthening its software portfolio and go-to-market capabilities with additional sales capacity and a strategic partner network. Comptel would bolster Nokia’s software portfolio by adding critical solutions for catalogue-driven service orchestration and fulfillment, intelligent data processing, customer engagement, and agile service monetization. The combination of Nokia’s Service Assurance portfolio and Comptel’s Service Orchestration portfolio would enable a dynamic closed loop between service assurance and fulfillment that simplifies management of complex heterogeneous networks. When combined with Nokia’s Cloudband(TM) and Nuage(TM) portfolios, Nokia would be able to provide customers with complete, end-to-end orchestration of complex Network Function Virtualization (NFV) and Software Defined Networking (SDN) deployments.

In November 2016, Nokia announced its long-term strategy, Rebalancing for Growth. As part of the strategy, Nokia is strengthening its software capabilities in key areas: portfolio, services and go-to-market. The planned acquisition of Comptel would bolster go-to-market efforts with a software-dedicated sales force and strong partner network. It would also support Nokia’s desire to build a portfolio that allows customers to automate as much of their network and business operations as possible – including customer services, self-optimization, management and orchestration. Comptel would help with this objective by bringing catalogue-driven fulfilment and digital service lifecycle management, complex event processing, applications for customer engagement and service monetization; and emerging technologies for context-aware on-device commerce and IoT pattern detection.

The Tender Offer is not expected to have a material effect on the operations and business locations of, or on the number of jobs at Comptel.

Board assessment

The Board of Directors of Comptel believes that Nokia’s global reach, strength of brand, and cross-selling opportunities will benefit the activities of Comptel. Comptel will also gain entry to new markets in which Nokia already has a strong presence, especially the United States. The greater size and financial strength of Nokia could also enhance Comptel’s position with respect to its existing and potential customers. Combining Comptel’s business with Nokia’s will offer the customers of both Comptel and Nokia a wider and more innovative software portfolio which could improve the competitiveness of the combined business unit especially in the eyes of larger customers. The Board of Directors of Comptel believes that the combination will also deepen the network know- how of the combined entity.

The Board of Directors of Comptel believes that the combination creates an agile player in the OSS market and forms a foundation for profitable growth and innovation. Combining Comptel’s business with a large and recognized player such as Nokia, Comptel’s long-time partner, will also reduce risks related to Comptel’s current business, which result from the consolidation between the market players in Comptel’s sector and potential failures in the development or launch of new product areas, among others. In addition to these benefits to Comptel and its customers, the combination of Comptel’s business with Nokia will also create opportunities for personal and professional development for the employees of Comptel.

The Board of Directors of Comptel considers that the information on the Offeror’s strategic plans concerning Comptel included in the announcement regarding the Tender Offer published on February 9, 2017 and in the draft Tender Offer Document is of a general nature. However, based on information presented to Comptel and its Board of Directors, the Board of Directors of Comptel evaluates that the completion of the Tender Offer is not expected to have any material effect on Comptel’s operations and business locations or on the number of jobs at Comptel.

On the date of this statement the Board of Directors of Comptel has not received any formal statement as to the effects of the Tender Offer to the employments at Comptel from Comptel's employees.

3. Assessment of the Board of Directors from the perspective of Comptel and its shareholders and holders of option rights

Introduction

In evaluating the Tender Offer, analyzing alternative opportunities available to Comptel and concluding on its statement, the Board of Directors has considered several factors, such as Comptel’s recent financial performance, current position and future prospects, and the historical trading price of Comptel’s share.

The Board of Directors’ assessment of continuing the business operations of Comptel as an independent company has been based on reasonable future-oriented estimates which include uncertainties, whereas the offer consideration and the premium included therein is not subject to any uncertainty other than the fulfillment of the conditions to completion of the Tender Offer.

In order to support its assessment of the Tender Offer, the Board of Directors of Comptel has received a fairness opinion regarding the Tender Offer (the “Fairness Opinion”) from Comptel’s financial advisor, Sisu Partners.

The Fairness Opinion, subject to the assumptions and qualifications set out therein and dated February 8, 2017, states that the offer consideration, from a financial point of view, is believed to be fair. The Fairness Opinion is attached as Appendix 1 to this statement.

Board assessment

The Board of Directors of Comptel believes that the consideration offered by the Offeror to the shareholders and holders of option rights is fair to such holders based on an assessment of the issues and factors, which the Board of Directors has concluded to be material in evaluating the Tender Offer. These include, amongst other factors:

 the premium being offered;  historical trading price of Comptel’s share taking into account the fact that, in the opinion of the Board of Directors of Comptel, Comptel’s future value creation potential has been reflected in the current trading price to a large extent;  the information and assumptions on the business operations and finances of Comptel at the date of this statement and their expected future development including o the consolidation trend between the market players in Comptel’s sector and the risks for smaller players to be left out of delivery contracts; o Comptel’s new product areas, analytics and automation of customer’s delivery processes, will require significant investments in the future to remain competitive; o development or launch of new product areas involves uncertainties;  the valuation multiples of Comptel shares compared to the industry multiples before the announcement of the Tender Offer;  valuations and analysis made and commissioned by the Board of Directors as well as discussions with external financial advisors;  the support by significant shareholders in Comptel for the Tender Offer; and  the Fairness Opinion issued by Sisu Partners.

The Board of Directors has concluded that the relevant business prospects of Comptel provide opportunities for Comptel to develop its business as an independent company for the benefit of Comptel and its shareholders and holders of option rights. However, taking into consideration the risks and uncertainties associated with such standalone approach as well as the terms and conditions of the draft Tender Offer Document, the Board of Directors has concluded that the Tender Offer is a more favorable alternative for the shareholders and holders of option rights.

Comptel has in the Transaction Agreement agreed to a standard non-solicitation clause whereby Comptel has undertaken not to solicit competing proposals or, subject to the fiduciary duties of the Board of Directors of Comptel, promote the progress of such proposals. Having carefully assessed the terms and conditions of the Tender Offer, the Board of Directors of Comptel has concluded that entering into the Transaction Agreement, including said non-solicitation clause, is in the interest of Comptel’s shareholders and holders of option rights.

4. Recommendation of the Board of Directors

The Board of Directors of Comptel has carefully assessed the Tender Offer and its terms and conditions based on the draft Tender Offer Document, the Fairness Opinion, and other available information.

Based on the foregoing, the Board of Directors of Comptel deems that the Tender Offer and the amount of the offer consideration offered for the shares and option rights are under the prevailing circumstances fair to Comptel shareholders and holders of option rights.

Given the above-presented viewpoints, the Board of Directors of Comptel unanimously recommends that the shareholders of Comptel and holders of option rights accept the Tender Offer.

This statement is based on an assessment of the issues and factors which the Board of Directors has concluded to be material in evaluating the Tender Offer, including, but not limited to, the information and assumptions on the business operations and finances of Comptel at the date of this statement and their expected future development.

All members of the Board of Directors have participated in the decision making concerning the statement. The evaluation of independence of the members of the Board of Directors is available on the website of Comptel.

5. Other Issues

The Board of Directors of Comptel notes that combining the operations of Comptel with Nokia’s operations will, in addition to synergy benefits, pose challenges to both parties, and the combination may, as is common in such processes, involve unforeseeable risks.

The Board of Directors of Comptel notes that the shareholders and holders of option rights of Comptel should also take into account the risks related to non-acceptance of the Tender Offer. If the Offeror waives the acceptance condition of 90 per cent of the shares and votes, the completion of the Tender Offer would reduce the number of Comptel shareholders and the number of shares, which would otherwise be publicly traded. Depending on the number of shares validly tendered in the Tender Offer, this could have an adverse effect on the liquidity and value of the shares.

Pursuant to Chapter 18 of the Finnish Companies Act (624/2006, as amended), a shareholder with more than 90 per cent of all shares and votes in a company shall have the right to acquire, and subject to a demand by the other shareholders also be obligated to redeem, the shares owned by the other shareholders. The shares held by Comptel’s shareholders who have not accepted the Tender Offer may be redeemed through compulsory redemption proceedings under the Finnish Companies Act under the conditions set out therein.

Comptel has undertaken to comply with the Helsinki Takeover Code referred to in Chapter 11 Section 28 of the Finnish Securities Markets Act.

This statement of the Board of Directors of Comptel does not constitute investment or tax advice, and the Board of Directors of Comptel does not specifically evaluate herein the general price development or the risks relating to the shares in general. Shareholders and holders of option rights must independently decide whether to accept the Tender Offer, and they should take into account all relevant information available to them, including information presented in the Tender Offer Document and this statement as well as any other factors affecting the value of the shares.

Comptel is being advised by Sisu Partners as financial advisor and Castrén & Snellman Attorneys Ltd. as legal advisor.

THE BOARD OF DIRECTORS OF COMPTEL

Further information:

Comptel

Tom Jansson

Chief Financial Officer tel. +358 40 700 1849 [email protected]

APPENDIX: Sisu Partners’ Fairness Opinion

ABOUT COMPTEL

Life is digital moments. Comptel perfects these by transforming how you serve, meet and respond to the needs of “Generation Cloud” customers.

Our solutions allow you to innovate rich communications services instantly, master the orchestration of service and order flows, capture data-in-motion and refine your decision-making. We apply intelligence to reduce friction in your business.

Comptel has enabled the delivery of digital and communications services to more than 2 billion people. Every day, we care for more than 20% of all mobile usage data. Nearly 300 service providers across 90 countries have trusted us to perfect customers’ digital moments.

For more information, visit www.comptel.com.

Forward-Looking Statements

This stock exchange release contains statements that, to the extent they are not historical facts, constitute "forward looking statements''. Forward looking statements include statements concerning our plans, expectations, projections, objectives, targets, goals, strategies, future events, future revenues or performance, capital expenditures, financing needs, plans or intentions relating to acquisitions, our competitive strengths and weaknesses, plans or goals relating to financial position, future operations and development, our business strategy and the trends we anticipate in the industries and the political and legal environment in which we operate and other information that is not historical information. In some instances, they can be identified by the use of forward- looking terminology, including the terms "believes", "intends", "may", "will" or "should" or, in each case, their negative or variations on comparable terminology. By their very nature, forward looking statements involve inherent risks, uncertainties and assumptions, both general and specific, and risks exist that the predictions, forecasts, projections and other forward looking statements will not be achieved. Given these risks, uncertainties and assumptions, investors are cautioned not to place undue reliance on such forward looking statements. Any forward looking statements contained herein speak only as at the date of this stock exchange release.

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Attachments: Sisu Partners' Fairness Opinion.pdf

Annex

Annex B Board of Directors’ Report BOARD OF DIRECTORS’ REPORT 2015

BUSINESS OUTLOOK AND MARKETS year. Service Orchestration grew by 20.1 per cent and Intelligent Data grew by 7.1 per cent. It is more and more evident that both the business environment and technology in Operating profit was EUR 8.5 million (2014: 8.3; 2013: 7.3), which amounts to 8.7 telecommunications business are entering a new disruption point. New competition per cent (9.7) of net sales. The relative lower profitability was due to investments in the from global technology giants like Facebook, Google and Apple is challenging oper- development of the FWD solution (2.6M), investments in delivery capacity as well as ators in their core business and forcing them to adapt to the new business models in current product portfolio. and look for cost-efficiency and flexibility in their operations. We expect this trend to Profit before taxes was EUR 7.6 million (7.4), which amounts to 7.8 per cent continue also during the next few years and to bring Comptel considerable opportunity (8.7) of net sales. The company’s net profit was EUR 4.5 million (5.5). Earnings per by connecting to this new demand. share for the financial year was EUR 0.04 (2014: 0.05; 2013: 0.02). Currently key operator investments are driven by the vastly increasing data demand The consolidated effective tax rate in 2015 was 40.5 per cent (26.6). In the latest and targeted to increase the network bandwidth. Roll-outs of 4G and fibre networks tax decision, the tax authorities changed the interpretation on withholding taxes for are going on worldwide and operators have a strong need to harvest this capacity certain countries. Due to this decision a onetime adjustment for 2014 taxes was made also with new money-generating services. The importance of customer experience in 2015 which had a 4.2 per cent negative impact on the effective tax rate. The new and fierce competition both inside the telecoms industry and against the disruptors re- decision also increased the 2015 effective tax rate by 3.3 per cent. quires that operators improve their business processes continuously and pay special The tax expense for the financial year was EUR 3.1 million (2.0), including EUR 1.2 attention to the cost structure. million of withholding taxes (1.0). Traditionally the role of Comptel’s software has been in the management of ser- The Group’s order backlog grew by 20.2 per cent from the previous year and was vices and assigning network capacity to end users. The on-going shift of networks EUR 66.3 million (2014: 55.2; 2013 : 40.8). towards new cloud-based software technologies and the resulting tighter integration of network and business layers will mean that the significance and value of the man- BUSINESS AREAS agement software will increase. This is expected to bring new and more extensive business opportunities for Comptel service orchestration and intelligent data solutions. Business areas are defined by geography. Comptel has four business areas; Europe, In search of new revenue sources operators need more flexibility in integration to- Asia-Pacific, Middle East and Africa, and the Americas. The operating profit of the wards other business domains. To open up these new channels they need to introduce segments includes cost of sales and customer service. The Group R&D and general more sophisticated sales, order management and charging systems. The customers in and administration costs are not allocated to the segments. this market position require both more high value services and new project deliveries In 2015, Comptel received 29 significant orders (26): Service Orchestration re- that will create opportunity for business growth. ceived 16 orders (11 for the FlowOne Fulfillment solution, five for FlowOne Provisioning and Activation) and Intelligent Data received six orders (four for Data Refinery, one NET SALES AND PROFITABILITY for Fastermind and one for the Monetizer solution). Seven orders were multi-solution orders across business units. As significant orders Comptel reports sold projects and Comptel group’s 2015 net sales increased by 14.0 per cent (3.7) and were EUR 97.7 licenses with a minimum value of EUR 0.5 million. million (2014: 85.7; 2013: 82.7). Growth was generated by both business units for the Europe net sales were EUR 40.1 million (35.4). Europe net sales grew significantly

BOARD OF DIRECTORS’ REPORT 8 | Comptel Annual Report 2015 Board of Directors’ Report

across the region, especially with large Tier 1 global groups. The Group’s operating RESEARCH AND DEVELOPMENT profit for the segment was EUR 27.5 million (19.5), representing 68.6 per cent of net sales (55.3). Comptel won one new customer in this region. Some of the most signifi- Comptel’s direct R&D expenditure and investments were EUR 20.3 million (2014: 16.8; cant customers were operators belonging to the Telefonica and Vodafone group. 2013: 17.8). This corresponds to 20.8 per cent (2014: 19.6; 2013: 21.5) of net sales. The net sales of Asia-Pacific were EUR 29.6 million (24.8). The Group’s operating The focus of Comptel’s R&D expenditure was in the further development of solutions profit for the segment was EUR 15.5 million (14.5), representing 52.3 per cent of net in the main product areas, Service Orchestration and Intelligent Data. Development sales (58.7). Comptel won three new customers in this region. Some of the most is targeted both to secure the recurring revenue with competitive products and to significant customers were NBNCo, IBM and PT Indosat. win new markets by giving customers unique value with new innovations. Service The net sales of Middle East and Africa were EUR 16.8 million (16.8). The Group’s Orchestration’s FlowOne Fulfillment solution is developed as a suite of orchestration operating profit for the segment was EUR 5.6 million (7.3), representing 33.3 per cent elements that manage the service and business flows from ground to cloud. Intelligent of net sales (43.2). Some of the most significant customers were Saudi Telecom, Data’s Data Refinery captures data-in-motion and uses embedded intelligence to refine Ooredoo and Etisalat group companies. it for automated, in-the-moment decisions and actions. Monetizer is the business poli- Americas net sales were EUR 11.2 million (8.8). The Group’s operating profit was cy and charging tool that allows the rapid innovation and design of rich communication EUR 5.6 million (4.0), representing 50.1 per cent of net sales (45.5). Some of the and data service offers. Data Fastermind embeds artificial intelligence, prediction and most significant customers were operators belonging to the Telefonica and American machine learning capabilities into all solutions. Moviles group and T-Mobile in US. In these areas Comptel seeks global thought leadership in solving the business Comptel’s net sales are comprised of selling project & license business, and selling challenges of operators and digital communications service providers. Additionally recurring business. Project & License business sales grew 21.4 per cent from previous Comptel has started to invest in new products around the digital buying experience. year and were EUR 63.3 million (52.1). Recurring business sales grew 2.5 per cent During 2015, Comptel continued to develop its current offering, and twelve major from the previous year and were EUR 34.4 million (33.6) software releases were launched in these respective product areas. Comptel’s net sales are comprised also of Service Orchestration and Intelligent The company filed 4 new patent applications in 2015 (2). During the year Comptel Data. Service Orchestration grew 20.1 per cent from the previous year and was EUR was granted 4 new patents (8). At the end of the year, Comptel had 41 (37) granted 55.2 million (46.0). Intelligent Data grew 7.1 per cent from the previous year and was patents and 40 (39) pending patent applications to protect its main products and solu- EUR 42.5 million (39.7). tions. The Comptel® trademark is the registered trademark of Comptel Corporation in INVESTMENTS several countries. During 2015 gross investments in intangible and tangible assets amounted to EUR 0.6 FINANCIAL POSITION million (0.7) and comprised of investments in devices, software and furnishing. The investments were funded through liquid assets and cash flow from operations. The balance sheet total on 31 December 2015 was EUR 86.4 million (77.6), of which liquid assets amounted to EUR 3.0 million (9.4). Operating cash flow for the full year

9 | Comptel Annual Report 2015 Board of Directors’ Report

was EUR 0.6 million (10.0). For the fourth quarter the operating cash flow was EUR 742. The Group employed an average of 723 persons in 2015 (2014: 665; 2013: 684). -0.2 million (3.5). Cashflow was lower in 2015 due to the investments during the year. At the end of the period, 29.5 per cent (30.2) of the personnel were located in Trade receivables were EUR 40.5 million (27.7) at the end of the period. The trade Finland, 25.5 per cent (28.8) in Malaysia, 11.3 per cent (7.1) in India, 10.2 per cent receivables increased significantly at the end of the year due to strong net sales in (10.9) in Bulgaria, and 23.5 per cent (23.0) in other countries where Comptel operates. later part of the year. Accrued income was EUR 10.0 million (10.9). Deferred income Of the group personnel, 47.1 per cent (44.1) worked in customer services, 36.5 related to partial debiting was EUR 3.3 million (4.4). per cent (38.3) in research, product development and product management, 10.0 per Comptel has a EUR 25 million credit facility arrangement consisting of EUR 20 cent (11.8) in sales and marketing and 6.2 per cent (5.8) in administration and internal million revolving credit facility and EUR 5 million overdraft capacity on current bank support services at the end of the financial year. account. Out of this arrangement Comptel had EUR 5 million of the revolving credit At the end of the year the Group had 722 (650) regular workers and 20 (10) facility and EUR 2.0 million of the overdraft capacity outstanding at the end of the non-permanent employees. Of the employees, 712 (639) were full-time and 30 (21) period. The credit facility is valid until the end of July 2018. part-time. The equity ratio was 52.4 per cent (52.4) and the gearing ratio was 11.1 per cent Average personnel attrition in 2015 was 17.1 (19.7). The average years of service (-5.4). was 5.0 (4.9). The average age of employees at the end of the year was 37 (37). At the end of the year 73 per cent (71) of the employees were men and 27 per cent (29) COMPANY STRUCTURE women. Wages and salaries totaled EUR 38.4 million (2014: 34.6; 2013: 34.2). Salaries and At the end of 2015, the Comptel group comprised of the parent company Comptel compensation paid to the management are described in the note to the consolidated Oyj and the wholly owned subsidiaries Comptel Communications Oy, Comptel financial statements. Communications AS, Comptel Communications EOOD, Comptel Communications Of the personnel, 88 per cent had a university degree, 4 per cent had a polytechnic Sdn Bhd, Comptel Communications Brasil Ltda, Comptel Communications Inc., diploma, 4 per cent a vocational college diploma and 4 percent other education. Comptel Communications India Private Limited, Comptel Communications S.r.l., In the financial year, the amount of sick leave from active working hours was 1.4 Xtract Oy and Comptel Palvelut Philippines Inc.. In addition, the Group included the percent (1.5). wholly owned subsidiary of Comptel Communications Holdings and its wholly owned subsidiary Comptel Communications Ltd. The group also included an Irish associated CORPORATE GOVERNANCE company Tango Telecom Ltd (share of ownership 20.0 percent) Comptel Group has registered representative and branch offices in Australia, The Annual General Meeting (AGM), held on 9 April 2015, elected the following mem- Egypt, India, Russia, United Arab Emirates, The Netherlands, Sweden, Germany, bers to the Board of Directors: Pertti Ervi, Hannu Vaajoensuu, Eriikka Söderström, Singapore, Hong Kong, Indonesia, New Zeeland and Turkey. Antti Vasara and Heikki Mäkijärvi. In its meeting held after the AGM, the Board of Directors elected Pertti Ervi as chairman and Hannu Vaajoensuu as vice chairman. PERSONNEL The board did not have any committees. In the end of the financial year guarantees given on behalf of the related parties At the beginning of the year Comptel had 660 employees and at the end of the year amounted to EUR 29 thousand. Related party transactions are described in more

10 | Comptel Annual Report 2015 Board of Directors’ Report

detail in the note 31 to the consolidated financial statements. 3,478,260 options for a new incentive program to the CEO. The options give the right A separate Corporate Governance Statement has been given as part of the annual to subscribe for, in total, 3,478,260 company shares. report. Out of the subscription rights 1,739,130 are marked with symbol 2015A and 1,739,130 are marked with symbol 2015B. According to the rules of the incentive AUDITORS plan, the share subscription price is EUR 0.92, which is the volume-weighted average price of the company’share in NASDAQ OMX Helsinki during 12. August 2015 - 8. Comptel’s auditors was Ernst & Young Mikko Järventausta, APA, as the auditor with September 2015 deducted with 20 %. principal responsibility. Members of the Board of Directors and the CEO held at 31 December 2015 a total of 1.306 per cent of company’s outstanding shares and share options. COMPTEL’S SHARE AND The company held 118,507 of its own shares at the end of the financial year, which SHAREHOLDERS’ EQUITY is 0.11 percent of the total number of its shares. The total counter-book value of the shares held by the company was EUR 2,341. Comptel has one share type. Each share constitutes one (1) vote. The company’s The Annual General Meeting, held on 9 April 2015, approved the proposal of the capital stock on 31 December 2015 was EUR 2,141,096.20 and the total number of Board of Directors that dividend of 0.02 EUR per share was paid. votes was 108,395,409. The AGM authorised the Board of Directors to decide on share issues amounting The total exchange of Comptel’s shares in 2015 was 41.2 million shares (27.8) to a maximum of 21,400,000 new shares and/or special rights entitling to shares and which is 38.0 per cent (25.9) of the total number of shares. The closing price was EUR on repurchase or conveying of the company’s own shares up to a maximum number 1.83 (0.99). Comptel’s market value at the end of the year was EUR 198.1 million of 10,700,000 shares. The authorisations are valid until 30 of June 2016. However, (105.8). the authorisation to implement the company’s share-based incentive programs is valid During the year, Comptel Corporation allotted 64,950 shares to the members of until five years from the AGM resolution. the Board of Directors as part of their annual compensation and 133,333 shares to the A separate stock exchange release about the resolutions of the Annual General President and CEO as per 2012 share-based incentive scheme. Meeting including authorisations given to the Board of Directors was issued on 9 April The President and CEO of Comptel Corporation have a share-based incentive 2015. plan. The aim of the plan is to combine the objectives of the shareholders and the CEO of Comptel Corporation in order to increase the value of the company and to commit BUSINESS RISKS the CEO to the company. The prerequisite for the participation in the plan and receipt of reward from the performance period is that the CEO owns company’s shares or Comptel’s business risks are regularly estimated as part of the annual operative plan- acquires them up to the number predetermined by the Board of Directors, which is ning and strategy process, of the process of preparing and deciding on commercial 230,000 shares. The ownership requirement was valid until 31 December 2015. All the offers and agreements and investments and other resources allocations, and of other shares of the plan were transferred and rewards paid. operative actions. Strategic risks are considered the most significant. Strategic risks The Board of Directors decided on the 9.9.2015, based on the authorization are further divided into market risks and risks related to the Comptel’s business strat- received from the Annual General Meeting held on 9 April 2015, to grant in total egy.

11 | Comptel Annual Report 2015 Board of Directors’ Report

Below is a description of the most important factors outside of the Group or timely or in agreed time schedule, quality and cost risk. To projects is also associated generated by its operation, which may be of significance to Comptel’s business, liquidate damage risk. Furthermore, some of Comptel’s customers operate in coun- operating result and share price in the future. tries where the political or financial climate can be unstable which in part may increase The demand in the operation support system may vary significantly by region. credit risk. Comptel develops dynamic end-to-end solutions for leading operators globally Comptel operates globally and is exposed to risks arising from currency fluctua- in the telecom field. This requires that Comptel understands correctly the changing tions. The exchange rate changes between the Euro, which is the company’s reporting trends in its business environment and the needs of its customers and resellers in currency, and the US Dollar, UK Pound Sterling, Indian Rupee and Malaysian Ringgit each region. Failure to identify market conditions, address customers’ needs and de- affect the company’s net sales, expenses and net profit. velop products in a timely fashion may significantly undermine the growth of Comptel’s The application process where Comptel seeks to avoid double taxation is still business and profitability. pending with the Ministry of Finance in Finland. However, the legal process between Comptel has invested significantly into new product areas, in analytics and auto- the states is very slow and the results are difficult to foresee. The interpretation of tax mation of customers’ delivery processes. Failure in the development or launch in these treaties may result in different views between the countries in question. This could product areas can have a significant impact on the company’s growth and profitability. mean that the double taxation will persist. Comptel has also applications for return The timing of a single major deal and variations in the customer purchase behavior of withholding taxes in other countries but they are subject to local legal processes, cause significant quarterly variations in sales and profit, and are typical of Comptel’s which take time to get completed field of industry. The company’s financial risks are described more in detail in the note 27 of the The OSS market is highly competitive. The sector is undergoing consolidation consolidated financial statements. between the market players, which is reflected in the duration and pricing agreements. If Comptel does not manage to adapt its operations and address the changes taking EVENTS AFTER THE REPORTING PERIOD place in its competitive environment, the market development may greatly impair the company’s business and operating results. There were no significant events after the reporting period. Comptel has initiated the execution of customer and partner intimate business model which requires getting competent resources closer to key customers and part- CHANGES IN REPORTING ners in certain growth markets. The Middle East, Africa and Asia are increasingly important market areas for The company will be changing its segment reporting from 2016 onwards. The new seg- Comptel. The company is operating in several countries where the political situation is ments will be Business Units: Intelligent Data and Service Orchestration. Comparable unstable. Deterioration of the situation in these areas may hinder Comptel’s business numbers for 2015 will be published in March 2016. and undermine its profitability. Comptel’s business consists of delivering large productised IT systems, and the OUTLOOK value of a single project may be several million euros. Therefore, the financial loss or credit risk associated with a single project or an individual customer may be significant. Comptel expects the 2016 net sales to continue to grow and operating profit to be in There are also risks, associated to the deliveries, that projects are not completed the range of 8-14% of revenue.

12 | Comptel Annual Report 2015 Board of Directors’ Report

Characteristically a significant part of Comptel’s operating profit and net sales is generated in the second half of the year.

BOARD OF DIRECTORS’ PROPOSAL FOR THE DISPOSAL OF PROFITS

The Group parent company’s distributable equity on 31 December 2015 was EUR 7,692,598 (6,740,529). The Board of Directors proposes to the Annual General Meeting that dividend of 0.03 EUR per share will be paid for 2015.

Helsinki, 17 February 2016

Comptel Corporation Board of Directors

13 | Comptel Annual Report 2015 Financial statements CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

1 JAN - 1 JAN - 1 JAN - 1 JAN - EUR 1,000 NOTES 31 DEC 2015 31 DEC 2014 EUR 1,000 NOTES 31 DEC 2015 31 DEC 2014 Net sales 2 97,728 85,714 Other comprehensive income

Other operating income 5 63 282 Other comprehensive income to be reclassified to profit or loss in subsequent periods

Materials and services 6 -5,546 -3,905 Cash flow hedges 14 -227 Employee benefits 7 -46,764 -41,294 Translation differences 189 522 Depreciation, amortisation Income tax relating to components of other and impairment charges 8 -6,756 -6,263 comprehensive income 12 -3 45 Other operating expenses 9 -30,251 -26,225 -89,317 -77,686 Total comprehensive income for the period 4,728 5,802

Operating profit/loss 8,474 8,311 - - Profit/loss attributable to:

Financial income 11 1,392 1,478 Equity holders of the parent company 4,527 5,461 Financial expenses 11 -2,541 -2,398 Non-controlling interest - - Share of result of associated companies 287 45 Total comprehensive income attributable to:

Profit/loss before income taxes 7,612 7,436 Equity holders of the parent company 4,728 5,802 Non-controlling interest - -

Income taxes 12 -3,085 -1,975 Shareholders of the parent company 13

Profit/loss for the period 4,527 5,461 Earnings per share, EUR 0.04 0.05 Earnings per share, diluted, EUR 0.04 0.05

FINANCIAL STATEMENTS 14 | Comptel Annual Report 2015 Financial statements CONSOLIDATED STATEMENT OF FINANCIAL POSITION

EUR 1,000 NOTES 31 DEC 2015 31 DEC 2014 EUR 1,000 NOTES 31 DEC 2015 31 DEC 2014 ASSETS EQUITY AND LIABILITIES Non-current assets Equity attributable to equity holders of the parent Goodwill 15 2,646 2,646 company Other intangible assets 15 12,837 13,435 Share capital 20 2,141 2,141 Tangible assets 14 1,152 1,595 Fund of invested non-restricted equity 20 1,698 401 Investments in associates 16 960 673 Fair value reserve 20 -170 -182 Available-for-sale financial assets 87 87 Translation difference 20 -510 -699 Deferred tax assets 17 7,685 5,880 Retained earnings 34,165 31,685 Other non-current receivables 646 613 37,324 33,346 26,013 24,929 Total equity 37,324 33,346

Current assets Trade and other receivables 18 56,930 43,043 Non-current liabilities Deferred tax liabilities 17 2,572 2,669 Current tax assets 18 403 315 Non-current liabilities financial liabilities 24 92 1,257 Cash and cash equivalents 19 3,030 9,352 2,664 3,926 60,363 52,710 Current liabilities Provisions

TOTAL ASSETS 86,376 77,639 Current financial liabilities 23 1,090 1,325 Trade and other current liabilities 24 7,075 6,305 Current tax liabilities 25 37,816 32,713 407 24 46,388 40,367

Total liabilities 49,052 44,293

TOTAL EQUITY AND LIABILITIES 86,376 77,639

15 | Comptel Annual Report 2015 Financial statements CONSOLIDATED STATEMENT OF CASH FLOWS

EUR 1,000 NOTES 31 DEC 2015 31 DEC 2014 EUR 1,000 NOTES 31 DEC 2015 31 DEC 2014 Cash flows from operating activities Cash flows from financing activities Profit/loss for the period 4,527 5,461 Dividends paid -2,139 -1,073 Adjustments: Acquisition of own shares - -312 Non-cash transactions or items that are not Proceeds from new shares 497 - part of cash flows from operating activities 28 7,834 6,095 Proceeds from share option 800 - Interest and other financial expenses 273 620 Proceeds from borrowings 27,935 8,500 Interest income -88 -16 Repayment of borrowings -28,063 -9,544 Income taxes 3,069 1,996 Lease payments -243 -180 Change in working capital: Net cash used in financing activities -1,213 -2,609 Change in trade and other receivables -14,240 -6,573

Change in trade and other current liabilities 5,031 6,744 Net change in cash and cash equivalents -6,319 2,213 Change in provisions -277 -262

Interest paid -273 -295 Cash and cash equivalents Interest received 12 40 at the beginning of the period 9,352 6,542 Income taxes paid and tax returns received -5,245 -3,789 Cash and cash equivalents at the end of the period 3,030 9,352 Net cash from operating activities 623 10,021 Change -6,322 2,810

Cash flows from investing activities Sale of business operations - 300 Effects of changes in foreign exchange rates -2 596 Investments in tangible assets -456 -734 Investments in intangible assets -102 - Investments in development projects -5,176 -4,720 Proceeds from sale of tangible and intangible assets 7 39 Change in other non-current receivables -3 -82 Net cash used in investing activities -5,730 -5,199

16 | Comptel Annual Report 2015 Financial statements CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT COMPANY TRANSLATION EUR 1,000 SHARE CAPITAL OTHER RESERVES DIFFERENCES FAIR VALUE RESERVE RETAINED EARNINGS TOTAL Equity at 31 Dec 2013 2,141 401 -1,219 0 27,600 28,924 Acquisition of Corporation’s own shares -311 -311 Dividends paid -1,073 -1,073 Share-based compensation 263 263 Prior year corrections *) -256 -256 Total comprehensive income for the period 521 -182 5,461 5,800 Equity at 31 Dec 2014 2,141 401 -698 -182 31,684 33,346 Shares issued 497 497 Dividends paid -2,139 -2,139 Share-based compensation 800 428 1,228 Dissolution of subsidiaries 7 7 Prior year corrections *) -342 -342

Total comprehensive income for the period 188 12 4,527 4,727 Equity at 31 Dec 2015 2,141 1,698 -510 -170 34,165 37,324

*) Prior year expense adjustments were posted into retained earnings during the fiscal year.

17 | Comptel Annual Report 2015 Financial statements NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

to in the Finnish Accounting Act and in ordinances issued based on the 1. ACCOUNTING PRINCIPLES FOR THE provisions of this Act, refer to the standards and their interpretations CONSOLIDATED FINANCIAL STATEMENTS adopted in accordance with the procedure laid down in regulation (EC) No 1606/2002 of the EU. The notes to the consolidated financial state- COMPANY PROFILE ments also conform to the Finnish accounting and company legislation. The consolidated financial statements are prepared under the Comptel Corporation is a Finnish public limited liability company historical cost convention except for available-for-sale assets, deriva- organised under the laws of Finland. Founded in 1986, Comptel tive financial instruments and hedged items under fair value hedging. Corporation is one of the leading providers of telecom software and Share-based payments are recognised at fair value at the grant date. services in convergent mediation and charging, predictive analytics All financial information presented in euros has been rounded and service fulfillment. Comptel Corporation is listed on NASDAQ to the nearest thousand and consequently the sum of the individual OMX Helsinki (CTL1V). The parent company of the Comptel Group, figures can deviate from the sum figure. Comptel Corporation, is domiciled in Helsinki and its registered ad- Comptel first adopted the IFRS in 2005 and applied IFRS 1 First- dress is Salmisaarenaukio 1, 00180 Helsinki. time adoption of IFRS in the transition. The transition date was 1 A copy of the consolidated financial statements can be obtained January 2004. either from Comptel’s website (www.comptel.com) or from the parent On 1 January 2015, the Group adopted the following new and company’s head office, the address of which is mentioned above. amended standards and interpretations endorsed by the EU and that On 17th February 2016, the Board of Directors of Comptel are applicable to Comptel: Corporation has authorised the publication of the consolidated finan- Amendment to IAS 19. Employee Benefits. The the standard cial statements of Comptel Corporation for the year 2014. According to outlines the accounting and disclosure requirements for the employee the Finnish Companies Act, the Annual General Meeting can confirm benefits. or reject the consolidated financial statements after the publication. Annual Improvements to IFSRs 2010-2012 and Annual The Annual General Meeting may decide to change the financial state- Improvements to IFSRs 2011-2013. ments. The preparation of financial statements in conformity with IFRS requires management to make estimates as well as use judgement BASIS OF PREPARATION when applying accounting principles. Actual results may differ from these estimates. The chapter “Accounting policies requiring manage- Comptel’s consolidated financial statements have been prepared in ment’s judgement and key sources of estimation uncertainty” discuss- accordance with the International Financial Reporting Standards es judgements made by management when applying the accounting (IFRS) in force as at 31 December 2014 including the IAS and IFRS principles adopted by the Group and those financial statement items standards as well as the SIC and IFRIC interpretations. IFRSs referred on which judgements have the most significant effect.

18 | Comptel Annual Report 2015 Financial statements

PRINCIPLES OF CONSOLIDATION classified as equity shall not be revalued. The subsidiaries acquired have been consolidated from the date The consolidated financial statements incorporate the financial state- of acquisition, when control commenced. The subsidiaries disposed of ments of the parent company Comptel Corporation and all those sub- are included in the consolidated financial statements until the control sidiaries in which it has, directly or indirectly, control (together referred ceases. All inter-company income and expenses, receivables, liabili- to as “Group” or “Comptel”). Associates included in the consolidated ties and unrealised profits arising from inter-company transactions, as financial statements are those entities in which the parent company well as distribution of profits within the Group are eliminated as part of Comptel Corporation has, directly or indirectly, significant influence, the consolidation process. Unrealised losses are eliminated only to the but not control, over the financial and operating policies. extent that there is no evidence of impairment. The allocation of the profit or loss and the distribution of the comprehensive income for the period attributable to equity holders SUBSIDIARIES of the parent company and non-controlling interest are presented in Subsidiaries are entities controlled by Comptel. Control means that connection with the consolidated statement of comprehensive income. the Group has the power to govern the financial and operating policies Possible non-controlling interest is recognised at fair value or amount of an entity so as to obtain benefits from its activities. Control exists corresponding to its proportional share of the net identifiable assets when Comptel is exposed or has rights to variable returns from its acquired and liabilities assumed. Valuation method is defined sep- involvement with the investee and has the ability to affect those returns arately for each acquisition. Comprehensive income is attributed to through its power over the investee. equity holders of the parent company and non-controlling interest even Acquisitions of subsidiaries are accounted for using the purchase if share of non-controlling interest was negative. The share of equity method of accounting. The consideration transferred and the identifia- attributable to non-controlling interest is presented separately as part ble assets acquired and the liabilities assumed have been recognised of equity in the statement of financial position. If parent company own- at fair value at the acquisition date. The acquisition costs, excluding ership change in a subsidiary and does not result in loss of controlling the costs to issue debt or equity securities, have been recognised as interest it is recognised in equity. a cost. The consideration transferred exclude business operations If a business combination is achieved in stages the previously held treated separately from the acquisition. The impact is recognised in equity interest is recognised at fair value and the resulting gain or loss profit or loss when the acquisition takes place. Possible contingent is reflected in profit or loss. If the Group no longer has a controlling consideration has been recognised at fair value at the acquisition date stake in a subsidiary, the remaining asset is recognised at fair value at and has been classified as liability or equity. Contingent consideration such date when the transaction takes place and the resulting gain or classified as liability is recognised at fair value at the end of each loss is recognised in profit or loss. reporting period and the resulting gain or loss is recognised in profit Accounting treatment for acquisitions prior to 1 January 2010 has or loss or other comprehensive income. Contingent consideration followed the prevailing standards at the end of the reporting period.

19 | Comptel Annual Report 2015 Financial statements

ASSOCIATES reporting period. Gains and losses resulting from transactions in foreign currencies and translation of monetary items are recognised in Associates are those entities in which Comptel has significant influ- profit or loss. ence. Significant influence generally arises when Comptel holds voting rights less than 50 per cent but over 20 per cent or when the Group FINANCIAL STATEMENTS OF FOREIGN SUBSIDIARIES otherwise has significant influence over the financial and operating policies, but not control. Holdings in associates are incorporated in Statements of comprehensive income and cash flows of foreign these financial statements using the equity method from the date that subsidiaries are translated into euros at the average exchange rate significant influence commences until the date that significant influ- during the financial period. Their statements of financial position are ence ceases. In respect of associates, the carrying amount of goodwill translated using the exchange rate at the end of reporting period. The is included in the carrying amount of the investment in the associate. translation differences arising from the translation of the profit for the When Comptel’s share in an associate’s losses exceeds its interest period by using the average and closing rates are recognised in other in the associate, the Group’s carrying amount is reduced to nil and comprehensive income and presented as a separate item in equity. recognition of further losses is discontinued except to the extent that The translation differences arising from the use of the purchase meth- the Group has incurred obligations in respect of the associate or made od and after the date of acquisition as well as the result of the hedge payments on behalf of the associate. The Group’s proportionate share of a net investment in a foreign operation are recognised in other of associates’ profit for the period is presented as a separate line item comprehensive income and presented within equity. If a subsidiary in the consolidated statement of comprehensive income. is disposed of, related cumulative translation differences deferred in equity are recognised in profit or loss as part of the gain or loss on sale. From the transition date onwards translation differences arising FOREIGN CURRENCY TRANSACTIONS on the consolidation are presented as a separate component of equity. The result and financial position of a Group entity are measured using Goodwill and fair value adjustments to assets and liabilities that the currency of the primary economic environment in which the entity arose on an acquisition of a foreign entity occurred prior to 1 January operates (functional currency). The consolidated financial statements 2004 are translated into euros using the rate that prevailed on the date are presented in euros, which is the functional and presentation cur- of the acquisition. Goodwill and fair value adjustments arisen on an rency of the parent company. acquisition after 1 January 2004 are treated as part of the assets and Transactions in foreign currencies are translated at the exchange liabilities of the acquired entity and are translated at the closing rate. rates prevailing on the dates of the transactions. Foreign currency monetary balances are translated at the exchange rate at the end TANGIBLE ASSETS of reporting period. Non-monetary items measured at fair value in a foreign currency are translated at the exchange rate at the end of Tangible assets are measured at historical cost less cumulative

20 | Comptel Annual Report 2015 Financial statements

depreciation and any impairment losses. Where parts of an item of the acquisition-date fair values of the identifiable assets acquired and tangible assets have different economic useful lives, they are account- liabilities assumed. ed for as separate items of tangible assets. Depreciation is recognised Acquisitions that have taken place between 1 January 2004 and 31 in profit or loss on a straight-line basis over the estimated useful lives December 2009 have been recognised based on the previous IFRS of each part of an item of tangible assets. The depreciation period for standards. Goodwill arisen from the business combinations occurred machinery and equipment is four years. prior to the IFRS transition date has been accounted for in accordance Maintenance, repairs and renewals are generally expensed during with FAS and has been taken as a deemed cost. the period in which they are incurred except for substantial renovation In accordance with IAS 36 Impairment of Assets goodwill is not expenditure relating to leased premises that are capitalised under amortised but tested for impairment annually. Goodwill is stated at cost tangible assets. Such costs are depreciated over the shorter of five less any cumulative impairment losses. years and the lease term. Residual values of tangible assets and expected useful lives are RESEARCH AND DEVELOPMENT COSTS reassessed at each reporting date and where necessary are adjusted to reflect the changes in the expected future economic benefits. In accordance with IAS 38 Intangible Assets expenditure on research Tangible assets classified as held for sale in accordance with IFRS activities is recognised as an expense in the period in which it is in- 5 Non-current Assets Held for Sale and Discontinued Operations are curred. Development costs that arise from design of new or improved not depreciated after the classification as held for sale. products are capitalised as intangible assets in the statement of finan- Gains and losses on sales and disposals of tangible assets are cial position when the product is technically and commercially feasible included in operating income and in operating expenses, respectively. and it will generate future economic benefits. Amortisation of such an According to IAS 23 borrowing costs that are directly attributable asset is commenced when it is available for use. Unfinished assets are to the acquisition, construction or production of a qualifying asset are tested annually for impairment. to be capitalised. Comptel capitalises development costs and costs related to internal system projects meeting the requirements under IAS 38. Capitalised development costs are amortised on a straight-line basis over three INTANGIBLE ASSETS years and the costs related to internal system projects over four years.

Government grants that compensate the Group for the develop- GOODWILL ment costs are either deducted from the carrying amount of the asset Goodwill resulting from business combinations subsequent to 1 or from the related expenses in profit or loss. January 2010 is recognised at the value at which the consideration transferred the amount of non-controlling interest and previously held assets together exceed the Group’s share of the amount of the net of

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OTHER INTANGIBLE ASSETS periodic rate of interest on the liability balance outstanding. Lease liabilities are included in financial liabilities. Patents and licenses acquired as well as costs incurred from patent If the lease does not meet the requirements of a finance lease, it is applications with a finite useful life are capitalised and amortised on always classified as an operating lease. In such a case the lessee has a straight-line basis over their useful lives. Amortisation is calculated the right to use the asset for a limited time and the risks and rewards based on the original cost and allocated over the useful life. incidental to ownership are not transferred to the lessee. The capitalised patent costs are generally amortised over ten years The leases of Comptel are mainly treated as operating leases. and licenses over four years. Payments made thereunder are recognised in profit or loss as rental The expected amortisation periods are reviewed at each reporting expenses on a straight-line basis over the lease term. date and if they differ from previous estimates, the amortisation period is changed accordingly. IMPAIRMENT Identifiable intangible assets acquired on a business combination

are measured at fair value. Such intangible assets relate for example TANGIBLE AND INTANGIBLE ASSETS to client relationships and technologies received in an asset acquisition and they are amortised over three to five years. Comptel assesses at each reporting date whether there is any indica- tion of impairment of assets. If there are such indications, the asset’s recoverable amount is estimated. In addition, the recoverable amount LEASES is estimated annually for the following assets regardless of there be-

ing any indications of impairment: goodwill and unfinished intangible COMPTEL AS LESSEE assets. The need for impairment is reviewed at the level of cash-gen- IAS 17 Leases divides leases into finance and operating leases. erating units which is the lowest level for which there are separately Leases are classified as finance leases whenever the terms of the identifiable, mainly independent cash flows. lease transfer substantially all the typical risks and rewards of owner- The recoverable amount is the higher of an asset’s fair value less ship to the lessee. costs to sell and its value in use. The value in use represents the dis- At the commencement of the lease term an asset acquired under counted future net cash flows expected to be derived from an asset or a finance lease is recognised in the statement of financial position at a cash-generating unit. The discount rate used is the pre-tax rate that an amount equal to the lower of its fair value and the present value of reflects the market’s view on the time value of money and the specific the minimum lease payments. An asset acquired under a finance lease risks related to the asset. is depreciated over the shorter of the lease term and its useful life. An impairment loss is recognised if the carrying amount of an as- Lease payments are apportioned between the finance charge and the set or a cash-generating unit is higher than the recoverable amount. reduction of the outstanding lease liability so as to achieve a constant Impairment losses are recognised in profit or loss. If an impairment loss

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is allocated to a cash-generating unit, it is first allocated to decrease comparability of financial statements and provide a clearer view of the the goodwill allocated to this cash-generating unit and subsequently to financial commitments related to defined benefit plans. decrease pro-rata other assets of the cash-generating unit. An impairment loss is reversed if there are any indications that the conditions SHARE-BASED PAYMENTS and the recoverable amount have changed since the impairment loss was recognised. An impairment loss is reversed only to the extent that Comptel has several option schemes and they are paid out as equity the asset’s carrying amount does not exceed the carrying amount that instruments. Equity-settled share-based schemes are measured at fair would have been determined if no impairment loss had been recog- value at the grant date and expensed in profit or loss on a straight-line nised. An impairment loss recognised for goodwill is never reversed. basis over the vesting period. The expense determined at the grant date is based on the Group’s estimate on the number of those options PENSION OBLIGATIONS that eventually vest at the end of the vesting period. The fair value is determined using the Black-Scholes option pricing model. Under IAS 19 Employee Benefitspension plans are classified as either Comptel has also share-based incentive programs. The share- defined contribution plans or defined benefit plans based on the com- based incentive programs provide the key personnel of the Comptel pany’s obligations. In a defined contribution plan the company pays Group with a possibility to receive shares of the company as compen- fixed contributions to a separate entity and has no further obligations. sation. The compensation paid based on the share-based incentive The pension plans of Comptel are arranged in accordance with the programs is paid as a combination of company shares and cash after local legislation. Contributions of the defined contribution plans based the vesting period has expired. Costs incurred from the share-based on the regularly reviewed actuarial calculations prepared by the local incentive programs are recognised as employee benefit expenses pension insurance companies are recognised as an expense in profit over the commitment period. or loss in the year to which they relate. Other plans are classified as defined benefit plans. PROVISIONS In a defined benefit plan the liability to be recognised in the statement of financial position is the net amount of the net present value IAS 37 Provisions, Contingent Liabilities and Contingent Assets pre- of the pension obligation and the plan assets measured at fair value scribes the recognition criteria for a provision. A provision is based on at the year-end. The calculation for pension obligations is carried out an existing obligation and it is recognised in the statement of financial by qualified actuaries. The amount of the obligation is based on the position when an entity has a present obligation (legal or constructive) projected unit credit method. as a result of a past event, it is probable that an outflow of economic The revised standard includes several amendments to harmonize benefits will be required to settle the obligation and a reliable estimate the recognition of defined benefit pension plans and to improve com- can be made of the amount of the obligation. parability. In addition, the amendments to presentation will improve the

23 | Comptel Annual Report 2015 Financial statements

The amounts recognised as provisions shall be the best estimate of financial position liability method, providing for temporary differenc- at the end of the reporting period and if the best estimates change es between the carrying amounts of assets and liabilities for financial the provisions are adjusted. Changes in the provision are recognised reporting purposes and the amounts used for taxation purposes. The similarly in profit or loss as the original provision. enacted or substantially enacted tax rate at the reporting date is used A warranty provision is recognised when a product that embodies as the tax rate. In Comptel the main temporary differences arise from a warranty is sold or delivered. The amount of the warranty provision the depreciation of tangible assets not deducted in taxation, the fair is based on experience-based information about the materialisation of value measurement of derivatives, capitalisation of development costs, warranty costs. paid withholding taxes, which Comptel estimates to be able to deduct A restructuring provision is recognised when Comptel has prepared from the future income taxes and the reversal of goodwill amortisation a detailed plan for restructuring, commenced the implementation of the on Group level. plan and announced about the plan. A restructuring plan includes at Deferred tax liabilities are recognised at their full amounts in the least the following information: the business concerned, the principal statement of financial position, and deferred tax assets are recognised locations affected, the location, function and approximate number of to the extent that it is probable that taxable profit will be available employees who will be compensated for terminating their services, against which the deductible temporary difference can be utilised. the expenditures that will be undertaken and when the plan will be implemented. No provision is recognised for the expenditure arising REVENUE RECOGNITION AND NET SALES from the Group’s continuing operations. A provision is recognised when the expected economic benefits to Revenue from the sale of goods is recognised when significant risks be derived by the Group from a contract are lower than the unavoida- and rewards of ownership have been transferred to the buyer. Revenue ble cost of meeting its obligations under the contract. from services is recognised when the service has been performed. License revenue that includes no work performance is recognised INCOME TAXES when the license is delivered. The number of subscribers at a client is reviewed continuously. If their number exceeds the number agreed on The income taxes in the consolidated statement of comprehensive in the terms of the license, the client can be charged for the increased income consist of current tax and the change in the deferred tax assets number of subscribers. This license upgrade revenue is recognised and liabilities. Current tax is calculated on the taxable profit for the upon invoicing. Maintenance revenue is recognised as income on a period determined in accordance with local tax rules and is adjusted straight-line basis over the maintenance term. with the tax for previous years. The deferred tax amount attributable to other comprehensive income or equity is reflected in other comprehen- LONG-TERM PROJECTS sive income or equity, accordingly. Deferred tax assets and liabilities are provided using the statement Revenue and expenses from long-term projects are recognised using

24 | Comptel Annual Report 2015 Financial statements

the percentage-of-completion method, when the outcome of a long- by acquiring treasury shares at the average market price during the term project can be estimated reliably. The revenue from a long-term period. The denominator includes the weighted average number of project comprises license income and work. The outcome of a long- ordinary shares and the shares to be issued following the exercise of term project can be estimated reliably when the revenue and expenses warrants and options. expected as well as the progress made towards completing a particu- The assumptions of the exercise of options is excluded when cal- lar project can be measured reliably and when it is probable that the culating diluted earnings per share if the exercise price of the warrants economic benefits associated with the project will flow to the Group. In and options exceeds the average share market price during the period. Comptel the degree of completion of a long-term project is determined The options and warrants have a dilutive effect only if the average by the relation of accrued work hours to estimated overall work hours. share market price during the period is higher than the subscription If it is probable that total project costs will exceed total project revenue, price of an option and a warrant. the expected loss is recognised as an expense immediately. Net sales is adjusted for discounts granted, sales-related indirect FINANCIAL ASSETS AND LIABILITIES taxes and effects of the translation differences arisen on the translation

of the trade receivables denominated in foreign currencies. FINANCIAL ASSETS A separate warranty provision is recognised to cover costs under warranty periods following the completion of the projects. The total In accordance with IAS 39 Financial Instruments: Recognition and estimated margin of onerous projects is recognised as an expense Measurement the financial assets of the Group are classified to and a provision. following groups: financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets. Classification is based on the nature of EARNINGS PER SHARE the item and it is made at initial recognition. The calculation of earnings per share is based on the profit attributable An item is classified as financial asset at fair value through profit to ordinary shareholders that is divided by the weighted average num- or loss when it is held for trading or classified at initial recognition as ber of ordinary shares outstanding during the year. Treasury shares financial asset at fair value through profit or loss. The latter group com- owned by the Group are excluded when calculating the weighted prises such investments that are managed based on their fair value or average number of ordinary shares. For the purpose of calculating an investment which contains one or more embedded derivative which diluted earnings per share using the treasury stock method, the changes the cash flows of the contract significantly in which case the Group assumes the following: the exercise of dilutive warrants and entire compound instrument is measured at fair value. Financial assets options occurred at the beginning of the financial period, the exercise held for trading have been mainly acquired to generate profits from of dilutive warrants and options granted during the period followed short-term changes in market prices. Derivative instruments which at their grant date and the proceeds from their exercise was spent do not meet the criteria for hedge accounting defined in IAS 39 have

25 | Comptel Annual Report 2015 Financial statements

been classified as held for trading. Derivatives held for trading as well original maturities of three months or less. Any bank overdrafts are as financial assets maturing within 12 months are included in current included within current liabilities. assets. These assets have been measured at fair value. Unrealised and realised gains and losses arisen from fair value measurement are FINANCIAL LIABILITIES recognised in profit or loss in the period in which they occur. Held-to-maturity investments are non-derivative financial assets Financial liabilities are initially recognised at fair value, net of transac- with fixed or determinable payments and fixed maturity that the Group tion costs. Subsequently financial liabilities are measured at amortised has the positive intention and ability to hold to maturity. Held-to-maturity cost using the effective interest rate method. Financial liabilities are investments are measured at amortised cost and they are included in both non-current and current. A financial liability is classified as cur- non-current assets. Comptel had no such financial assets during the rent when the Group does not have an unconditional right to defer financial year ended 31 December 2009. settlement of the liability for at least 12 months after the reporting date. Loans and receivables are non-derivative financial assets with fixed Borrowing costs are recognised in profit or loss as incurred. Fees paid or determinable payments that are not quoted in an active market. The on the establishment of loan facilities are recorded as transaction Group does not hold them for trading purposes either. They are in- costs of the loan to the extent that it is probable that some or all of the cluded in current assets, except for maturities greater than 12 months facility will be drawn down. In this case, the fee is deferred until the after the reporting date. Trade receivables are recognised based on draw-down occurs. When the draw-down occurs, the fees paid on the the original amount charged from a client less any impairment losses. establishment of loan facilities are recognised as part of transaction Available-for-sale financial assets are non-derivative financial costs. To the extent it is probable that some or all of the facility will not assets that are either designated in this category or not classified in be drawn down, the fee is capitalised as a pre-payment for liquidity any of the other categories. They are included in non-current assets services and amortised over the period of the facility to which it relates. unless management intends to dispose of the investment within 12 months of the reporting date, in which case they are classified as DERIVATIVE FINANCIAL INSTRUMENTS current. Available-for-sale financial assets may include shares (equity AND HEDGE ACCOUNTING securities) and interest-bearing investments. They are measured at fair value, or when the fair value can not be reliably determined, at Derivatives are initially recognised in the statement of financial position cost. at cost, equivalent to their fair value and are subsequently measured to fair value. From 1 October 2014 onwards Comptel has applied hedge ac- CASH AND CASH EQUIVALENTS counting in accordance with IAS 39. Cash and cash equivalents comprise cash in hand, deposits held at Comptel formally designates and documents the hedge relation- call with banks and other short-term, highly liquid investments with ship as well as the Group’s risk management objective and strategy

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for undertaking the hedge. Comptel documents and assesses, at the to make future-related estimates and assumptions which may differ inception of a hedge relationship and at least at each reporting date, from the actual results. In addition, judgment is required when apply- the hedging instrument’s effectiveness in offsetting the exposure to ing accounting principles. The estimates are based on management’s changes in the hedged item’s fair value or cash flows attributable to best view at the reporting date. Possible changes in estimates and the hedged risk. The changes in the fair values of those derivatives assumptions are recognised in that period when an assumption or meeting the criteria of a fair value hedge are recognised in profit or estimate is corrected as well as in all subsequent periods. loss together with the fair value changes of the hedged asset or lia- In Comptel those key assumptions concerning the future and those bility attributable to the hedged risk. The changes in the fair values of key sources of estimation uncertainty at reporting date that have a sig- the derivatives hedging trade receivables are booked against sales nificant risk of causing a material adjustment to the carrying amounts revenues. of assets and liabilities within the next financial year are the following: If a derivative meets the conditions of a cash flow hedge, the change in the fair value of the effective portion of the hedging instrument is IMPAIRMENT TESTING recognised in other comprehensive income and presented in equity in the hedging reserve. The accumulated gains or losses in equity Goodwill, patenting costs and development costs capitalised under are reclassified into profit or loss in the same period during which the unfinished intangible assets are tested annually for impairment. Assets hedged item affects profit. When a hedging instrument designated as are reviewed for impairment in accordance with the principles set out a cash flow hedge expires or is sold or the hedge no longer meets the above. Estimates are required in preparing these calculations. criteria for hedge accounting, the cumulative gain or loss on the hedg- Additional information about the sensitivity of the recoverable ing instrument remains in equity until the forecast transaction occurs. amount to changes in the assumptions used is presented in note 16. However, if the forecast transaction is no longer expected to occur, any Intangible assets. related cumulative gain or loss in equity is recognised immediately in profit or loss. REVENUE RECOGNITION DIVIDENDS As described above under the heading Revenue recognition principles revenue and expenses from long-term projects are recognised using The dividend proposed by the board of directors is not recognised until the percentage of completion method when the outcome of a long- approved by a general meeting of shareholders. term project can be estimated reliably. The percentage of completion Accounting policies requiring management’s judgment and key method is based on estimates of total expected project revenue and sources of estimation uncertaint costs, as well as on reliable measurement of the progress made towards completing a particular project. The recognition of project The preparation of financial statements calls for the management revenue and project costs in profit or loss is changed if the estimate

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of the outcome of a project deviates from the plan, in the period in liabilities. Different ways of measurement for financial assets have which the change is identified for the first time and it can be estimated been retained, but simplified. Based on measurement, financial as- reliably. An expected loss on a long-term project is recognised in profit sets are classified into two main groups: financial assets at amortised or loss immediately when it is identified and can be estimated reliably. cost and financial assets at fair value. Classification depends on a Additional information about the long-term contracts is presented in company’s business model and the characteristics of contractual cash note 4. Revenue recognition using percentage of completion method. flows. For financial liabilities, the standard retains most of the IAS 39 requirements. Comptel Group is yet to assess the full impact of the amendments. The standard has not been endorsed for use in the EU TAXES yet. Management needs to assess the treatment of withholding taxes as IFRS 10, IFRS 12 and IAS 28 Investment entities. The new stand- well as the possibility to utilise deferred tax assets. Deferred tax assets ard is not expected to have an impact on Comptel’s consolidated are recognised to the extent that it is probable that taxable profit will financial statements. be available against which the deductible temporary difference can be IFRS 11 Joint Arragements. The amendment to the standard utilised. requires that for the acquisition of an interest in a joint operation, in which the activity constitutes a business, the principles for business APPLICATION OF NEW OR AMENDED combinations accounting are applied. The amendment is estimated STANDARDS AND INTERPRETATIONS not to have significant effects on the consolidated financial statements. IFRS 14 Regulatory Deferral Accounts. The standard allows The below described standards, interpretations or their amendments rate-regulated entities to continue reporting regulatory deferral ac- have been published but are not yet effective and Comptel has not count balances in connection with the first-time adoption of IFRS. The adopted them prior to the mandatory application date. Comptel will standard is not estimated to have an effect on the Group’s financial adopt the following amended or new standards and interpretations statements. issued by the IASB as soon as they are effective if the effective dated IFRS 15 Revenue from Contracts with customers. The standard is the same as the beginning of the financial year, or if the effective includes a five-step model for revenue recognition. The recognition date is different, they will be adopted as from the beginning of the model includes clearly more detailed instructions than the currently following financial year: valid standards. Comptel is evaluating the impact of the standard and IFRS 9 Financial Instruments. Standard will be issued in three will implement it according to the schedule. phases, it will replace the existing IAS 39 Financial instruments: IFRS 16 Leases. The standard specifies how the lease agree- Recognition and Measurement: ments will be recognized, measured, presented and disclosed. The The amendments resulting from the first phase address the classi- standard provides a single lessee accounting model, requiring lessees fication, measurement and recognition of financial assets and financial to recognize assets and liabilities for all leases unless the lease term

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is 12 months or less or the underlying asset has a low value. The standard is estimated to have an impact on Comptel’s consolidated financial statements. IAS 16 and IAS 38 Clarification of acceptable methods of depreciation and amortization. The amendment rebuts the revenue-based method of depreciating tangible assets and allows, to a limited extend, the application of revenue-based method of depreciating for intangible assets. The amendments are not estimated to have an impact on Comptel’s consolidated financial statements. IAS 16 and IAS 41 Agriculture. IAS 16 to be applied to plants meeting the criteria instead of IAS 41 Agriculture. The amendments will not have an impact on Comptel’s consolidated financial statements. IAS 1 Disclosure Initiative. The amendment encourages entitities to assess the notes disclosed and their classification. The amendment is not estimated to have an effect on Comptel’s consolidated statements. Annual Improvements to IFSRs 2010-2012 and Annual Improvements to IFSRs 2011-2013 and Annual Improvements to IFSRs 2012-2014. Minor and less urgent amendments to the standards are collected and implemented once a year. The effects of the amendments vary by standard, but the amendments are not estimated to have a significant effect on Comptel’s consolidated statements.

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2. SEGMENT REPORTING

Comptel Group has five reportable segments which are based on geographical The assessment of the operating results and resource allocation is based on the areas. Comptel operates globally in all geographical market areas. Market areas operating result of the segment in Comptel Group. The President and CEO of Comptel differ from each other in terms of price level, competitive position and Comptel’s Group is ultimately responsible for these decisions. own resource allocation. The segment division is based on the geographical location Total net sales from the operating segments consolidate to Group external net of customers. Geographical segments are Europe, Asia-Pacific, Middle East and sales. Segment expenses include sales and customer service expenses. Unallocated Africa and Americas. All segments generate revenue from sales of software licenses, expenses relate to product management, research and development as well as admin- services and support and maintenance associated with the software licenses. istration units. Segment assets include trade receivables. Comptel Group’s operating segment reporting is conforming to IFRS standards.

MIDDLE EAST 2015, EUR 1,000 EUROPE ASIA-PACIFIC AND AFRICA AMERICAS SEGMENTS TOTAL

Net sales 40,096 29,607 16,794 11,231 97,728 Segment share of operating result 27,515 15,483 5,600 5,631 54,229 Depreciation and amortisation 13 40 9 31 93 Trade receivables 16,127 10,741 7,982 5,608 40,458

MIDDLE EAST 2014, EUR 1,000 EUROPE ASIA-PACIFIC AND AFRICA AMERICAS SEGMENTS TOTAL

Net sales 35,358 24,752 16,814 8,790 85,714 Segment share of operating result 19,538 14,526 7,272 3,998 45,334 Depreciation and amortisation 18 119 2 43 182 Trade receivables 11,503 4,130 7,536 6,476 29,645

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RECONCILIATIONS GEOGRAPHICAL INFORMATION

RESULT REVENUES FROM EXTERNAL CUSTOMERS

EUR 1,000 2015 2014 The geographical split of net sales is based on the customer domicile.

Segment share of operating result 54,229 45,334 EUR 1,000 2015 2014 Unallocated expenses -45,755 -37,023 Germany 12,433 7,907 Financial income and expenses -1,149 -920 India 9,280 7,696 Share of result of associated companies 287 45 Saudi Arabia 7,687 6,572 Group profit/loss before income taxes 7,612 7,436 Australia 7,337 7,358 Argentina 5,187 4,010 DEPRECIATION, AMORTISATION AND IMPAIRMENT CHARGES Great Britain 3,305 1,691 EUR 1,000 2015 2014 Other countries 52,499 50,480 Segment depreciation and amortisation 93 182 Total 97,728 85,714 Unallocated depreciation, amortisation and impairment charges 6,663 6,081 Total depreciation, amortisation and impairment charges 6,756 6,263 NON-CURRENT ASSETS The geographical split of non-current assets is based on the location of such assets. ASSETS Non-current assets are presented without deferred tax assets and post-employment

benefit assets. EUR 1,000 2015 2014

Segment assets 40,458 29,645 EUR 1,000 2015 2014 Unallocated assets 44,272 47,993 Finland 13,401 13,950 Total assets 84,730 77,638 Other countries 1,274 1,691 Investments in associates 960 673 INFORMATION ABOUT PRODUCTS AND SERVICES Unallocated assets 2,693 2,735 Total 18,328 19,049 REVENUES FROM EXTERNAL CUSTOMERS

EUR 1,000 2015 2014 INFORMATION ABOUT MAJOR CUSTOMERS Project & License business 63,289 52,115 In 2015 and 2014 revenues from a single customer did not exceed 10% of the total Recurring business 34,439 33,599 Comptel group net sales. Total 97,728 85,714

31 | Comptel Annual Report 2015 Financial statements

3. BUSINESS COMBINATIONS 6. MATERIALS AND SERVICES

No new business combinations were acquired during the year 2015 or 2014. EUR 1,000 2015 2014 Purchases -87 82 External services 5,633 3,823 4. REVENUE RECOGNITION USING PERCENTAGE Total 5,546 3,905 OF COMPLETION METHOD

EUR 1,000 2015 2014 7. EMPLOYEE BENEFITS Net sales recognised as revenue according to percentage of completion 22,193 16,401 EUR 1,000 2015 2014 Amount recognised as revenue during the financial year and Wages and salaries 38,373 34,623 previous years for long-term projects in progress 13,336 12,042 Pension expenses - defined contribution plans 4,364 3,690 Total costs of incomplete long-term projects 6,843 8,332 Pension expenses - defined benefit plans 328 188 Backlog of orders of long-term projects according to percentage of completion 19,696 14,053 Share options granted 322 122 Expenses related to share-based incentive program 647 410 Prepayments and accrued income recognised on the basis of percentage of completion 2,845 2,821 Other social security costs 2,730 2,260 Deferred income and accruals recognised on the basis of Total 46,764 41,293 percentage of completion 3,270 4,409 THE AVERAGE NUMBER OF EMPLOYEES IN THE GROUP DURING THE FINANCIAL YEAR 2015 2014 5. OTHER OPERATING INCOME Europe 361 348 EUR 1,000 2015 2014 Asia-Pacific 298 257 Gains on disposal of tangible assets 3 2 Middle East and Africa 57 54 Sale of business operations - 300 Americas 7 6 Other income items 60 -20 Total 723 665 Total 63 282

32 | Comptel Annual Report 2015 Financial statements

An additional contribution pension plan has been agreed on for the President and 9. OTHER OPERATING EXPENSES CEO of the parent company. The retirement age is based on the Finnish Statutory Employment Pension Sheme (TyEL). CEO’s pension costs were totally 209,310.00 EUR 1,000 2015 2014 euros in 2015 (123,574.00 euros in 2014), of which the additional pension plan’s por- Lease payments 3,035 3,435 tion was 85,595.00 euros (56,859.00 euros in 2014). Travel expenses 6,814 5,285 Information on the remuneration of the Group management is presented in note Marketing expenses 2,151 1,163 31. Related party transactions. Other operating expenses 18,251 16,342 Information on the options granted and on the management’s share in the share- Total 30,251 26,225 based incentive plan is presented in note 21. Share-based payments. THE AUDITORS’ FEES

8. DEPRECIATION, AMORTISATION AND IMPAIRMENT EUR 1,000 2015 2014 CHARGES Ernst & Young Audit 282 189 EUR 1,000 2015 2014 Tax consultation 81 55 Depreciation and amortisation by asset type Other services 21 12 Intangible assets Total 384 256 Patents and trademarks 77 77 Capitalised development costs 5,520 4,993 Audit fees include the fees of the statutory auditors of each Group company. Other intangible assets 405 456 Total 6,002 5,526 10. RESEARCH AND DEVELOPMENT COSTS

Tangible assets The research and development costs recognised as expenses in the statement of Machinery and equipment 754 737 comprehensive income amounted to EUR 12,752 thousand in 2015 (EUR 12,071 Total 754 737 thousand in 2014). The capitalised development expenditure totalled EUR 5,176 thousand (EUR 4,720 thousand in 2014). The amortisation of the capitalised development costs amounted to Total depreciation, amortisation and impairment charges 6,756 6,263 EUR 5,520 thousand (EUR 4,923 thousand in 2014).

33 | Comptel Annual Report 2015 Financial statements

STATEMENT OF COMPREHENSIVE INCOME ITEMS INCLUDE FOREIGN EXCHANGE 11. FINANCIAL INCOME AND EXPENSES DIFFERENCES AS FOLLOWS:

EUR 1,000 2015 2014 EUR 1,000 2015 2014 Interest income from cash and cash equivalents 8 4 Net sales Interest income from other receivables 80 36 Change in fair value of forward exchange contracts -584 46 Financial assets/liabilities measured at fair value through Foreign exchange differences, net 179 126 profit or loss: Other operating expences Forward exchange contracts not in hedge accounting 1,305 - Change in fair value of forward exchange contracts - -17 Foreign exchange gains from other receivables and other Foreign exchange differences, net -106 -111 liabilities 142 1,438 Financial income Interest expenses from financial liabilities measured at Change in fair value of forward exchange contracts -25 - amortised cost -189 -125 Foreign exchange profits 1,330 1,463 Interest expenses from other liabilities -84 -18 Financial expenses Forward exchange contracts - -356 Change in fair value of forward exchange contracts -1,099 -1,150 Foreign exchange losses from other receivables and other liabilities -2,410 -1,763 Foreign exchange losses -1,311 -1,041 Other financial expenses - -136 Total -1,616 -684

Total -1,148 -920 Comptel is applying hedge accounting in accordance with IAS 39 effect from 1.10.2014.

34 | Comptel Annual Report 2015 Financial statements

INCOME TAX RECOGNISED IN OTHER COMPREHENSIVE INCOME 12. INCOME TAXES 2015 TAX EXPENCE (-)/ EUR 1,000 2015 2014 EUR 1,000 BEFORE TAX BENEFIT (+) NET OF TAX Current tax expense 1,199 775 Cash flow hedges 14 -3 11 Adjustments for previous years' taxes 161 84 Translation differences 189 - 189 Deferred taxes -1,829 -1,793 Total 203 -3 200 Withholding taxes 3,510 2,909 2014 TAX EXPENCE (-)/ Other direct taxes 45 - EUR 1,000 BEFORE TAX BENEFIT (+) NET OF TAX Total 3,086 1,975 Cash flow hedges -227 45 -182 Translation differences 522 - 522 In November 2006 Comptel Corporation received a refusal from the Board of Total 295 45 340 Adjustment of the Tax Office for Major Corporations concerning the crediting of taxes withheld at source in taxation of 2004. The claim for adjustment concerns the crediting Reconciliation between the income tax expense recognised in the statement of of taxes withheld at source the company has paid in 2004 to avoid double taxation. comprehensive income and the taxes calculated using the Group’s domestic corpo- Comptel Corporation recognised and paid these taxes withheld at source for 2004 rate tax rate 20 %: in 2005. According to the Board of Adjustment’s decision currently in force, Comptel EUR 1,000 2015 2014 Corporation has expensed taxes withheld at source amounting to EUR 3,510 thousand Profit before taxes 7,612 7,436 in 2014. The total withholding taxes expensed between 2004 and 2015 amount to EUR 12,179 thousand. Income tax calculated using the domestic corporation tax rate 1,522 1,487 Comptel Corporation has received license revenue from the countries with which Effect of tax rates in foreign jurisdictions 370 -71 Finland has a tax treaty. The purpose of the tax treaties is to avoid double taxation. Non-deductible expenses - 30 Taxes have been withheld from the payments made to Comptel Corporation, in accordance with the royalty article of the related tax treaty, in the source country of R&D additional tax credit - -80 the revenue. If the taxes withheld at source paid by Comptel Corporation will not be Non-deductible depreciations, amortisations and impairment charges 114 51 credited in Finland, the revenue from the customers located in the tax treaty countries will be subject to double taxation. Withholding taxes, net 926 593 The application process to prevent Comptel’s double taxation is still pending with Current year losses for which no deferred tax assets was recognised - -34 the Ministry of Finance in Finland. However, the process between the states is very slow and the timing of a change is hard to forecast. The interpretation of tax treaties Taxes for previous years 161 34 may result in different views between the countries in questions. This could mean that Other items -8 -35 the double taxation will prevail. Income taxes in the consolidated statement of There are confirmed losses in taxation for the group company Xtract Oy, totally comprehensive income 3,085 1,975 13,851 thousand euros (11,404 thousand euros in 2014). Deferred taxes from the losses were not booked, because of the uncertainty of the possibilities to utilize the losses.

35 | Comptel Annual Report 2015 Financial statements

13. EARNINGS PER SHARE 14. TANGIBLE ASSETS MACHINERY AND EUR 1,000 EQUIPMENT The basic earnings per share is calculated by dividing the profit/loss for the year at- Cost at 1 Jan 2015 9,218 tributable to equity holders of the parent by the weighted average number of ordinary shares outstanding during the financial year. Additions 456 In calculating the diluted earnings per share, the weighted average number of Disposals -150 shares is adjusted by the effect of the conversion into shares of all dilutive potential Exchange difference -250 ordinary shares. Comptel has share options, which have a diluting effect, when the Cost at 31 Dec 2015 9,274 exercise price of the share options is lower than the fair value of the share. The fair value of the share is based on the average price of the shares during the financial Accumulated depreciation at 1 Jan 2015 -7,623 period. In 2014 and 2014, the options did not have a material dilutive effect on earnings Depreciation -847 per share. Disposals 146

2015 2014 Exchange difference 202 Number of outstanding shares during the financial period, Accumulated depreciation at 31 Dec 2015 -8,122 weighted average 107 370 551 107 284 900 Book value at 1 Jan 2015 1,595 Options - 1 400 000 Book value at 31 Dec 2015 1,152 Weighted average number of shares for calculation of diluted earnings per share 109 640 245 107 625 526 The net book value of the tangible assets leased finance lease is EUR 92 thousands. MACHINERY AND EUR 1,000 EQUIPMENT Profit/loss for the year attributable to equity holders of the parent (EUR 1,000) 4,527 5,461 Cost at 1 Jan 2014 9,685 Additions 739 Number of outstanding shares during the financial period, weighted average 107 370 551 107 284 900 Disposals -1,456 Basic earnings per share (euro) 0.04 0.05 Exchange difference 250 Cost at 31 Dec 2014 9,218 Profit/loss for the year attributable to equity holders of the parent (EUR 1,000) 4,527 5,461 Accumulated depreciation at 1 Jan 2014 -8,056 Depreciation -834 Weighted average number of shares for calculation of diluted earnings per share 109 640 245 107 625 526 Disposals 1,446 Diluted earnings per share (euro) 0.04 0.05 Exchange difference -179 Accumulated depreciation at 31 Dec 2014 -7,623

Book value at 1 Jan 2014 1,629 36 | Comptel Annual Report 2015 Book value at 31 Dec 2014 1,595 The net book value of the tangible assets under finance lease is EUR 179 thousands. Financial statements

15. INTANGIBLE ASSETS PATENTS AND OTHER EUR 1,000 GOODWILL TRADEMARKS DEVELOPMENT COSTS INTANGIBLE ASSETS TOTAL Cost at 1 Jan 2015 22,198 1,227 43,479 15,531 82,435 Additions 102 5,176 5,278 Disposals 0 Exchange difference 46 46 Cost at 31 Dec 2015 22,198 1,329 48,655 15,577 87,759

Accumulated amortisation at 1 Jan 2015 -19,552 -649 -31,092 -15,061 -66,354 Amortisation -78 -5,520 -311 -5 909 Exchange difference -13 -13 Accumulated amortisation at 31 Dec 2015 -19,552 -727 -36,612 -15,385 -72,276

Book value at 1 Jan 2015 2,646 577 12,387 470 16,080 Book value at 31 Dec 2015 2,646 602 12,043 192 15,483

PATENTS AND DEVELOPMENT OTHER INTANGIBLE EUR 1,000 GOODWILL TRADEMARKS COSTS ASSETS TOTAL Cost at 1 Jan 2014 21,559 1,227 38,758 15,514 77,058 Additions 4,721 4,721 Disposals -32 -32 Exchange difference 639 49 688 Cost at 31 Dec 2014 22,198 1,227 43,479 15,531 82,435

Accumulated amortisation at 1 Jan 2014 -18,913 -572 -26,099 -14,654 -60,239 Amortisation -77 -4,993 -359 -5,429 Exchange difference -639 -48 -687 Accumulated amortisation at 31 Dec 2014 -19,552 -649 -31,092 -15,061 -66,354

Book value at 1 Jan 2014 2,646 654 12,659 860 16,819 Book value at 31 Dec 2014 2,646 577 12,387 470 16,080

37 | Comptel Annual Report 2015 Financial statements

ALLOCATION OF GOODWILL Goodwill has been allocated to two different product business units which form due to the significant growth expectation set for the unit. Based on the impairment separate cash generating units. These product business units do not relate directly tests there is no need to recognise an impairment loss. to geographic segments reported by Comptel. Future cash flows can be generated The use of the testing model requires making estimates and assumptions concern- from all geographical market areas. Consequently, goodwill cannot be allocated to a ing investments, market growth and general interest rate level. specific geographical segment. Goodwill has been allocated to two cash generating units which are Inventory unit and Fastermind unit. The latter was formed as a result SENSITIVITY ANALYSIS OF IMPAIRMENT TESTING of the Xtract acquisition in 2012. EUR 653 thousand (EUR 653 thousand in 2014) of The realisation of an impairment loss in the Inventory unit would require the long-term goodwill has been allocated to Inventory unit and EUR 1,993 thousand (EUR 1,993 EBITDA level to be more than 134% lower than the management’s estimate at the end thousand in 2014) to Fastermind unit. of reporting period or that the discount rate was over 105%. The realisation of an impairment loss in the Intelligent Customer Interaction unit IMPAIRMENT TESTING would require the long-term EBITDA level to be more than 22% lower than the man- The recoverable amount of goodwill is determined based on value in use calculations. agement’s estimate at the end of reporting period or that the discount rate was over The value in use is computed based on discounted forecast cash flows. The cash 102%. flow forecasts rely on the plans approved by the Board of Directors and management concerning in particular profitability and the growth rate of net sales. The plans cover a five-year period taking into account the recent development of the business. The used pre-tax rate discount rate is 17.2 % (17.3 % in 2014). The cash flows after the five-year period for the Inventory unit have been forecasted by estimating net sales to decrease with rate of -20% . Net sales is mainly generated from existing support and maintenance contracts as well as change requests to the existing systems. Based on these facts, management view is that there is a reasonable justification to use lower growth projection than the long-term economic growth estimate. Another key factor impacting the cash flows is operating expenses. Based on the impairment tests there is no need to recognise an impairment loss. The cash flows after the five-year period for the Fastermind unit have been forecasted by estimating the future growth rate of net sales to be 1% . The global growth of communications services providers’ net sales and investments was approximately 2-3% in 2015. In spite of somewhat weak economic outlook the growth rate was higher than the GDP growth in general. Consequently, using a 1% growth rate is justified. Analytics software is one of the fastest growing sectors in the telecommunications software space. Net sales growth is the key factor impacting the valuation of the unit

38 | Comptel Annual Report 2015 Financial statements

16. INVESTMENTS IN ASSOCIATES 17. DEFERRED TAX ASSETS AND LIABILITIES

Group has an associated company in Limerick, Ireland. Tango Telecom Ltd employed CHANGES IN DEFERRED TAX ASSETS AND LIABILITIES DURING 2015: an average of 69 employees in the year 2015 (65 in 2014). RECOGNISED IN EUR 1,000 31 DEC 2014 PROFIT OR LOSS 31 DEC 2015 EUR 1,000 2015 2014 Deferred tax assets Carrying amount at 1 Jan 706 661 Reversal of depreciation and Share of results 254 45 amortisation in taxation 162 9 171 Carrying amount at 31 Dec 960 706 Loss for the period 301 -301 - Withholding taxes 5,235 1,624 6,859 The impairment in the investment value was realised during the year 2013, which Share options 86 33 119 brought up the value of the investment to correspond the corporate portion of the Bad Debt reserve - 267 267 equity. The accounts of the associate do not include goodwill at 31.12.2015. Other tax deductible temporary differences 96 173 269 Total 5,880 1,805 7,685 Summary financial information for the Group’s investments in the associate - assets, liabilities, net sales and profit / loss (EUR 1,000): RECOGNISED IN EUR 1,000 31 DEC 2014 PROFIT OR LOSS 31 DEC 2015 PROFIT / OWNERSHIP 2015 ASSETS LIABILITIES NET SALES LOSS % Deferred tax liabilities Tango Telecom Capitalisation of intangible assets 2,491 -84 2,407 Ltd. Group 6,810 2,068 9,189 1,428 20 Capitalisation of and amortisation on technology in acquired PROFIT / OWNERSHIP business operations 19 -9 10 2014 ASSETS LIABILITIES NET SALES LOSS % Impact of goodwill amortisation in Tango Telecom taxation 131 - 131 Ltd. Group 5,612 2,247 7,172 223 20 Cumulative depreciation difference 20 - 20 Other taxable temporary differences 9 -4 5 Total 2,669 -97 2,572

39 | Comptel Annual Report 2015 Financial statements

18. TRADE RECEIVABLES AND OTHER CURRENT AGEING ANALYSIS OF TRADE RECEIVABLES RECEIVABLES EUR 1,000 GROSS 2015 IMPAIRED NET 2015 Not past due 29,508 29,508 EUR 1,000 2015 2014 1-30 days past due 3,540 3,540 Trade receivables 40,458 27,731 31-90 days past due 3,124 3,124 Prepayments 59 42 91-180 days past due 2,822 2,822 Accruals from long-term projects 6,968 8,554 181-360 days past due 1,238 1,238 Other prepayments and accrued income 3,121 2,407 Over 360 days past due 1,872 -1,646 226 Other receivables 6,726 4,624 Total 42,104 -1,646 40,458 Total 57,332 43,358 EUR 1,000 GROSS 2014 IMPAIRED NET 2014 Comptel recognised EUR 83 thousand credit losses on trade receivables in 2015 (2014: Not past due 20,773 20,773 no recognision). The carrying amounts of the trade receivables and other receivables 1-30 days past due 1,926 1,926 equal the related maximum exposure to credit risk. Other prepayments and accrued income mainly consist of accruals related to software services and user charges and 31-90 days past due 1,011 1,011 rent accruals. 91-180 days past due 3,158 3,158 181-360 days past due 581 581 Over 360 days past due 1,466 -1,184 282 Total 28,915 -1,184 27,731

19. CASH AND CASH EQUIVALENTS

EUR 1,000 2015 2014 Cash at bank and in hand 3,030 9,352 Total 3,030 9,352

40 | Comptel Annual Report 2015 Financial statements

20. CAPITAL AND RESERVES

Comptel has one class of shares, articles of association do not limit the maximun number of shares. The shares do not carry a nominal value. All shares issued are fully paid. The impacts of movement in the number of shares are as follows:

FUND OF INVESTED NON- EUR 1,000 NUMBER OF SHARES SHARE CAPITAL RESTRICTED EQUITY TREASURY SHARES TOTAL

At 1 Jan 2014 107,260,051 2,141 401 -383 2,159 Transfer of treasury shares 0 0 Return of treasury shares 196,480 66 66 Emission of new share 500,000 -312 -312 At 31 Dec 2014 106,956,531 2,141 401 -629 1,913 Emission of new share 346,232 494 494 Transfer of treasury shares 0 0 Return of treasury shares 974,139 497 428 925 At 31 Dec 2015 108,276,902 2,141 898 293 3,332

The descriptions of the reserves under equity are as follows: started to apply hedge accounting in accordance with IAS 39.

FUND OF INVESTED NON-RESTRICTED EQUITY TREASURY SHARES The fund of invested non-restricted equity includes other investments of equity nature Treasury shares reserve includes the acquisition cost of treasury shares held by the and subscription prices of shares to the extent that it is specifically not to be credited Group. During the financial year 2015 the company allotted 281,282 shares to its to share capital. employees based on the terms of the share-based incentive plan 2012 and 64,950 shares to members of the Board of Directors as part of their annual compensation TRANSLATION RESERVE (2014: 121,480 shares). At the end of the financial year the company held 118,507 The translation reserve comprises the translation differences arising from the transla- treasury shares (464,739 treasury shares at 31 Dec 2014). tion of the financial statements of the foreign subsidiaries. DIVIDENDS FAIR VALUE RESERVE The Board of Directors proposes to the Annual General Meeting that the Board would The fair value reserve comprises the hedging reserve including the effective portion of be authorised to decide a dividend pay-out for 2015. The maximum dividend payment the cumulative net change in the fair value of cash flow hedging instruments. Comptel would be EUR 0.03 per share and the authorisation would be effective until the date of the next Annual General Meeting.

41 | Comptel Annual Report 2015 Financial statements

21. SHARE-BASED PAYMENTS SHARE OPTIONS

TThe Group has had five share option schemes during the financial year. The options in question have been granted to the key personnel as well as to a subsidiary fully owned by Comptel Corporation.

2015 2009C 2014A 2014B 2015A 2015B

Grant date 14.04.2011 13.02.2014 16.03.2015 09.09.2015 09.09.2015 Subscription period 1.11.13 -30.11.15 1.2.16 -31.1.18 1.2.17 -31.1.19 15.8.18 -15.9.19 15.8.19 -15.9.19 Subscription value date 14.04.2011 13.02.2014 16.03.2015 08.09.2015 08.09.2015 Inputs to the value model: Share price at grant date 0.54 0.55 0.97 1.15 1.15 Excercise price 0.51 0.51 0.91 0.92 0.92 Expected volatility - 33 % 35 % 25 % 25 % Expected life of share options - 2.1 3.1 3.7 3.7 Risk free interest 0.00% 0.00% 0.00% 0.00% 0.00% Fair value of the share option at the grant date 0.06 0.54 0.28 0.11 0.11 Granted share options 0 2,100,000 950,000 1,739,130 1,739,130

2014 2009B 2009C 2014A

Grant date 26.05.2010 14.04.2011 13.02.2014 Subscription period 1.11.12 -30.11.14 1.11.13 -30.11.15 1.2.16 -31.1.18 Subscription value date 21.04.2010 14.04.2011 13.02.2014 Inputs to the value model: Share price at grant date 0.78 0.58 0.55 Excercise price 0.69 0.54 0.53 Expected volatility 39 % 41 % 33 % Expected life of share options - 0.9 3.1 Risk free interest 0.09% 0.24% 0.60% Fair value of the share option at the grant date 0.02 0.06 0.54 Granted share options 0 975.000 2,120,000

42 | Comptel Annual Report 2015 Financial statements

For the option scheme approved in 2009, the total number of share options is- 1.2.2016 - 31.1.2018, the share subscription period for the options 2014B (1,000,000 sued is 4,200,000. The share options may be exercised to subscribe a maximum of options) is 1.2.2017 - 31.1.2019 and the share subcription period for the options 2014C 4,200,000 Comptel Corporation shares in total. The share subscription period is for (1,000,000 options) is 1.2.2018 - 31.1.2020. option 2009A, 1 November 2011-30 November 2013, for option 2009B, 1 November Based on the authorisation given by the Annual General Meeting, the Board of 2012-30 November 2014 and for option 2009C, 1 November 2013-30 November 2015. Directors has on 9 September 2015 decided on the issue of the share options to the The members of the Executive Board were not included in 2009 option program. CEO of the company as part of the remuneration, incentive and commitment program. The Annual General Meeting of Shareholders has on 12 March 2014 decided on The total number of share options issued is 3,478,260. The share subscription period the issue of the share options to the Comptel Group key personnel as part of the for options 2015A (1,739,130 options) is 15.8.2018 - 15.9.2019, the share subscription incentive and commitment program. The total number of share options issued is period for the options 2015B (1,739,130 options) is 15.8.2019 - 15.9.2019. 4,200,000. The share subscription period for options 2014A (2,200,000 options) is Changes in the number of the outstanding share options and weighted average exercise prices during the period were as follows:

2015 2009C 2014A 2014B 2015A 2015B

Outstanding at the beginning of the year 974,000 2,120,000 Granted during the year 80,000 970,000 1,739,130 1,739,130 Exercised during the year 973,139 Forfeited during the year -100,000 -20,000 Expired during the year 861 Outstanding at the end of the year 2,100,000 950,000 1,739,130 1,739,130 Exercisable at the end of the year

Weighted average exercise price (euro) 0.51 0.51 0.91 0.92 0.92

2014 2009B 2009C 2012A 2012B 2014A

Outstanding at the beginning of the year 1,125,000 975,000 1,523,824 1,523,824 Granted during the year 2,140,000 Exercised during the year Forfeited during the year 275,000 1,523,824 1,523,824 20,000 Expired during the year 1,400,000 Outstanding at the end of the year 974,000 2,120,000 Exercisable at the end of the year 974,000

Weighted average exercise price (euro) 0.00 0.53 0.00 0.00 0.53

43 | Comptel Annual Report 2015 Financial statements

The number and average exercise prices of the share options outstanding at the end of the period:

2015 2014 The aim of the new plan is to combine the objectives of the shareholders and the AVERAGE AVERAGE target group of employees in order to increase the value of the company, commit the YEAR OF EXERCISE PRICE, NUMBER OF EXERCISE PRICE, NUMBER OF EXPIRATION EUR/SHARE OPTIONS EUR/SHARE OPTIONS target group to the company and to offer them a competitive reward plan based on long-term shareholding in the company. 2015 0.51 974,000 The Matching Share Plan includes two performance periods, both beginning on 2 2018 0.51 2,120,000 0.53 974,000 May 2012. The performance periods will end on 2 May 2015 and on 2 May 2016. The 2019 0.92 4,428,260 0.53 2,120,000 pre-requisite for participation to the plan and the receipt of reward from the performance periods requires that a target person owns the company’s shares or acquires The expected volatility has been determined based on the historical volatility for a them up to a number pre-determined by the Board of Directors. Furthermore, the period equalling to the option vesting period. potential reward from the plan is tied to the validity of the target person’s employment In 2015 the expense recognised in respect of the option schemes amounted to or service or contractual relation. EUR 304 thousand (2014: EUR 122 thousand). Rewards from the Plan will be paid partly in the form of company’s shares and partly in cash in 2015 and 2016. SHARE-BASED INCENTIVE PLAN The cost of the program is recognised under employee benefit expenses over the TIn 2015, there is no expense for the share based incentive plan of the President and vesting period. In 2015 EUR 223 thousand was expensed of which EUR 164 thousand CEO (EUR 40 thousand in 2014, of which EUR 19 thousand was the portion paid in is the portion to be paid in cash (in 2014, EUR 360 thousand of which 288 thousand cash). in cash) . The Board of Directors of Comptel Corporation approved a new share-based The outstanding option schemes and share-based incentive programs are de- incentive plan for the Group key personnel in February 2012. scribed in more detail in Section Shares and shareholders.

44 | Comptel Annual Report 2015 Financial statements

22. PENSION OBLIGATIONS 24. FINANCIAL LIABILITIES

Comptel has pension plans in various countries that are based on the local legislation EUR 1,000 2015 2014 and well-established practices. In Finland the pension arrangement is mainly managed Non-current financial liabilities measured at amortised through the Finnish Statutory Employment Pension Scheme (TyEL) which is a defined cost contribution plan. Loans from financial institutions 33 1,078 Finance lease liabilities 58 179 23. PROVISIONS Total 91 1,257 Movements in provisions during 2015: PROVISION FOR LEASE Current financial liabilities measured at amortised cost EUR 1,000 WARRANTY PROVISION TOTAL Loans from financial institutions 6,963 5,984 Balance at 1 Jan 2015 270 1,055 1,325 Finance lease liabilities 112 259 Provisions made during the year -161 -74 -235 Other interest-bearing liabilities - 62 Provisions used during the year - - - Total 7,075 6,305 Exchange difference - - - Balance at 31 Dec 2015 109 981 1,090

The fair values of liabilities are presented in note 27. Financial risk management. EUR 1,000 2015 2014 Comptel had bank loans amounting to EUR 5,000 thousand at 31 December 2015 Non-current provisions - - (EUR 7,000 thousand at 31 December 2014) and EUR 1,979 thousand of the overdraft Current provisions 1,090 1,325 limit (in 2014 there was no overdraft limit outstanding). Comptel has a credit facility Total 1,090 1,325 consisting of EUR 20 million Revolving Credit Facility and EUR 5 million overdraft capacity. The facility is valid until 31 July 2018. Comptel’s subsidiary has a loan in the PROVISION FOR WARRANTY amount of EUR 78 thousand from Finnvera with fixed amortisation schedule. The last A provision for warranties is recognised when the underlying product including a war- instalment will be paid on 15 August 2017. ranty is sold. The provision is based on management estimates on warranty costs The interest rate of the Facility is floating and determined based on prevailing which will materialise. IBOR. The weighted average interest rate is 0.7 % (2014: 1.3 %). The interest of the loan from Finnvera is determined based on 6 months euribor. At 31 December 2015 This item includes the provisions made for unoccupied leased facilities. the interest rate was 3.7 %.

45 | Comptel Annual Report 2015 Financial statements

MATURITY ANALYSIS OF FINANCE LEASE LIABILITIES 26. FAIR VALUE OF FINANCIAL ASSETS AND LIABILITIES

EUR 1,000 2015 2014 Fair value hierarchy for financial instruments measured at fair value. Finance lease liabilities - minimum lease payments Less than one year 126 270 EUR 1,000 FAIR VALUE AT 31.12.2015 Between one and five years 62 184 LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Total 188 454 Forward contracts measured at fair value through profit or loss Liabilities 138 138 Finance lease liabilities - present value of minimum lease payments Forward contracts measured at Less than one year 112 258 fair value recognised in other Between one and five years 57 179 comprehensive income Total 170 437 Liabilities 214 214

Financial assets available-for-sale Future financial charges 7 16 Other shares 87 87

EUR 1,000 FAIR VALUE AT 31.12.2014 25. TRADE AND OTHER CURRENT LIABILITIES LEVEL 1 LEVEL 2 LEVEL 3 TOTAL Forward contracts measured at fair EUR 1,000 2015 2014 value through profit or loss Trade payables 2,116 1,094 Assets 25 25 Advances received from long-term contracts 3,270 4,409 Liabilities 847 847 Accrued expenses and deferred income 26,034 22,646 Forward contracts measured at Other liabilities 6,802 4,564 fair value recognised in other Total 38,222 32,713 comprehensive income Liabilities 227 227 The accrued expenses and deferred income mainly comprise of accruals related to deferred revenue, accrued employee benefits and accrued operating expenses. Financial assets available-for-sale Other shares 87 87

Comptel’s derivative contracts at fair value through the profit or loss accounts and contracts under the hedge accounting are determined using quoted market price and valuation methods. 46 | Comptel Annual Report 2015 Financial statements

27. FINANCIAL RISK MANAGEMENT INTEREST RATE RISK

Comptel is exposed to financial risks in its ordinary business operations. The objective Interest rate risk is the risk that cash flows or the result will fluctuate because of chang- of Comptel’s risk management is to minimise the adverse effects arising from fluctu- es in market interest rates. Comptel’s interest-bearing liabilities at 31 December 2015 ations of financial markets on the Group’s cash flows, result and equity. Comptel’s totalled EUR 7,167 thousand (2013: EUR 7,562 thousand). Comptel had bank loans general risk management principles are approved by the Board of Directors and their amounting to EUR 6,963 thousand at 31 December 2015 ( EUR 7,000 thousand at implementation is the responsibility of the Chief Financial Officer (CFO) together with 31 December 2014). Comptel has a loan facility, which consists of EUR 20 million the business units. Comptel’s financial policy is risk-adverse. The main financial risks revolving credit facility and EUR 5 million overdraft capacity on current bank account. for the Group are currency risk and credit risk. Financial management identifies and The ending date for the facility is 31 July 2018. At 31 December 2015 the amount assesses risks and acquires the instruments needed to hedge against risks together available under the Revolving Credit Facility was EUR 15 million. Comptel’s subsidiary with operating units. Hedging transactions are carried out in accordance with the writ- has a loan in the amount of EUR 78 thousand from Finnvera with fixed amortisation ten risk management principles approved by the Board of Directors. Comptel uses schedule. The last instalment will be paid on 15 August 2017. foreign currency forwards in its currency risk management. Other currency instruments The interest rate of the loan facility is floating and determined based on prevail- may be used based on a resolution of the Board of Directors. ing IBOR. The weighted average interest rate is 0.7%. The interest of the loan from Finnvera is determined based on 6 months euribor. At 31 December 2015 the interest CURRENCY RISK rate was 3.7. Comptel operates globally and is therefore exposed to currency risks arising from Corporate did not have interest rate swap contracts at the end of the Fiscal Year various currency positions. In Comptel’s business operations the major currencies are Possible short-term investments in financial securities give rise to interest rate risk Euro and US Dollar (USD). An other significant currency is UK Pound Sterling (GBP). but the impact of such risk is not significant. Comptel´s revenues and operating cash Comptel hedges open foreign currency positions. The currency position is mon- flows are mainly independent of the fluctuations of market rates. itored on a 12-month rolling period twice a month. Comptel started to apply hedge accounting in accordance with IAS 39 from 1.10.2014. The changes in the fair value of CREDIT RISK the hedging instuments for the financial assets and liabilities are recognised through Credit risk is the risk that one party will cause a financial loss for the Group by failing profit and loss accounts. to discharge an obligation. In Comptel credit risk mainly arises from trade receivables The hedging instruments are forward contracts entered into with banks. The related to customers, derivatives and cash and cash equivalents. hedging forward contract is denominated in the same currency as the underlying item Credit risk management principles are defined in Comptel’s documented proce- resulting the value of the hedging instrument to change in the opposite way compared dures (Risk Management Principles, Currency hedging in Comptel Corporation and to the underlying item. General principles of liquidity management). Credit risk management in respect of The invoicing of sales orders follows the progress of projects, which causes timely derivatives and investments is centralised to the Group accounting department, in uncertainty. Moreover, the realised turnover of trade receivables exceeds the terms in respect of clients and credit control to the business area organisation. the client agreements. The hedging of the future cash flows is timed taking these facts Comptel’s customers are mainly mid-size or large teleoperators. The Group’s into account. clientele is large and geographically widely dispersed, which decreases the customer

47 | Comptel Annual Report 2015 Financial statements

risk of the Group. 15 million available for draw-down. The Facility contains a covenant whereby Group Comptel’s business consists of deliveries of large productised IT system and the equity ratio must be at least 35 %. At 31 December 2015 Comptel’s equity ratio was value of a single project may be several million euro. Therefore the risk associated 52.4 % (2014: 52.4 %). In addition, the arrangement contains a covenant, according with a single project or an individual client may be significant. Furthermore some of to which the net debt to the Group’s EBITDA must be equivalent or less than 2.75. At Comptel’s clients operate in countries that are or have been war zone areas, which in 31 December the the net debt to EBITDA was 0.27 (31 December 2014 -0.12). The part increases credit risk. covenants are reported every three months. Furthermore, Comptel has an option for Comptel has no significant credit risk concentrations, since no individual customer TyEL (earnings-related pension) premium loan amounting to EUR 13,4 million. or customer group represents a material risk. In delivery projects partial advance invoicing is generally used. Furthermore credit risk is reduced by progress payments invoiced based on percentage of completion. In some countries letter of credits are used. Comptel has a policy for writing off trade receivables. According to the policy a bad debt provision of 50% of the total value is generally booked if the receivable is overdue more than 360 days and a provision of 100% is impacted when the receivable is overdue more than 540 days. Comptel recognised credit losses in the statement of comprehensive income 83 thousand euros in the financial year 2015 (there were no credit losses in 2014). The ageing analysis of trade receivables is presented in note 18. Trade receivables and other current receivables.

LIQUIDITY RISK Liquidity risk means insufficient financing or higher than normal financing expenses when business environment deteriorates and financing is needed. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that financing of business operations is available when needed quickly enough. Part of the Group’s liquid funds are invested in mutual funds based on the principles approved by the Board of Directors. Comptel’s main source of financing has been the operating cash flow. Cash levels are monitored on a daily basis. At 31 December 2015 the Group’s cash and cash equivalents totalled EUR 3,030 thousand (EUR 9,352 thousand at 31 December 2014). At 31 December 2015 Comptel’s interest-bearing liabilities totalled EUR 7,166 thousand (EUR 7,562 thousand in 2014). Under the Revolving Credit Facility in place until 2018 there is still EUR

48 | Comptel Annual Report 2015 Financial statements

The following table sets forth maturity analysis based on contractual cash flows. Cash flow includes both loan repayments and interest payments.

CONTRACTUAL 2015, EUR 1,000 CARRYING AMOUNT CASH FLOW 1-6 MONTHS 7-12 MONTHS 1-2 YEARS 3-5 YEARS

Non-derivative financial liabilities Loans from financial institutions 6,996 7,007 6,950 23 34 - Finance lease liabilities 170 177 67 46 64 - Trade payables 2,116 2,116 2,116 - - -

Derivative financial liabilities

Forward exchange contracts under hedge accounting Outflow 138 138 135 3 - -

CONTRACTUAL 2014, EUR 1,000 CARRYING AMOUNT CASH FLOW 1-6 MONTHS 7-12 MONTHS 1-2 YEARS 3-5 YEARS

Non-derivative financial liabilities Loans from financial liabilities 7,062 7,176 5,057 1,038 1,081 - Hire purchase liabilities 63 63 32 31 - - Finance lease liabilities 437 454 135 135 102 82 Trade payables 1,094 1,094 1,094 - - -

Derivative financial liabilities Forward exchange contracts under hedge accounting Inflow -25 -25 -25 - - - Outflow 1,074 1,074 978 95 - - Interest swap - not in hedge accounting Net cash flow 19 19 - - 19 -

49 | Comptel Annual Report 2015 Financial statements

FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES CAPITAL STRUCTURE MANAGEMENT The purpose of Comptel capital structure management is to support the business BOOK VALUE FAIR VALUE BOOK VALUE FAIR VALUE operations by securing normal operational demands and grow shareholder value in EUR 1,000 31.12.15 31.12.15 31.12.14 31.12.14 the long-term. Comptel aims at continuing profitable business by investing in R&D Financial assets and enhancing its presence on the global market place. Comptel’s profit distribution is Financial assets at fair value typically 30 to 60 per cent of the net income for the previous financial year. The amount through profit or loss of dividends paid may vary according to the near-term economic outlook as well as Forward contracts (level 2) - - 25 25 Comptel’s financial position. Available-for-sale financial assets (level 3) 87 87 87 87 Gearing in 2015 and 2014 was as follows: Non-current trade receivables 1,872 1,872 1,466 1,466 EUR 1,000 2015 2014 Current trade receivables 40,232 40,232 27,449 27,449 Interest-bearing liabilities 7,167 7,562 Other current receivables 7,133 7,133 4,624 4,624 Cash and cash equivalents -3,030 -9,352 Cash and cash equivalents 3,030 3,030 9,352 9,352 Interest-bearing net liabilities 4,137 -1,790

Financial liabilities Total equity 37,324 33,346 Financial liabilities at fair value through profit or loss Gearing 11,1 % -5.4 % Forward contracts (level 2) 138 138 847 847 Trade payables and other liabilities 38,020 38,020 32,713 32,713 Non-current loans from financial institutions 33 33 1,078 1,081 Non-current finance lease liabilities 58 58 179 179 Current loans from financial institutions 5,044 5,056 5,984 6,095 Current bank overdraft facility 1,918 1,918 - -

Current finance lease liabilities 112 112 259 259 Other current liabilities - - 63 63

50 | Comptel Annual Report 2015 Financial statements

EXPOSURE TO CURRENCY RISK In calculating the sensitivity related to exchange rate changes the following assump- 2015 2014 tions were used: - a +/- 10 % exchange rate change EUR 1,000 USD GBP USD GBP - the position comprises foreign currency financial assets and financial liabilities, i.e. Loan receivables 404 - 362 - loans, trade receivables, cash and cash equivalents, trade payables and derivative Trade receivables 10,259 1,709 10,066 90 instruments. This applies to companies operating in currency which is different from Cash and cash the currency subject to the sensitivity analysis. equivalents 6 4 1,179 221 Trade payables -430 -7,584 -208 -6,190 FAIR VALUES OF FINANCIAL ASSETS AND LIABILITIES The carrying amount of the loans is EUR 7,166 thousand and the fair value is EUR Net statement of financial position 7,184 thousand. For other financial assets and liabilities their carrying amounts exposure 10,239 -5,871 11,399 -5,879 equal their fair values as the discounting has no material effect considering the short maturity of these items. Order backlog Derivative instruments measured at fair value: (12 months) 20,887 4,680 21,938 1,460 Hedging POSITIVE FAIR NEGATIVE FAIR NOMINAL VALUE 2015 VALUE (CARRY- VALUE (CARRY- OF UNDERLYING Forward contracts EUR 1,000 ING AMOUNT) ING AMOUNT) INSTRUMENT (12 months) -26,207 6,142 -12,527 5,398 Total net exposure 4,919 4,951 20,810 979 Forward contracts - all - 351 39,046 Forward contracts - under hedge accounting - 213 - SENSITIVITY TO FOREIGN EXCHANGE RATES A 10 % weakening/strengthening of the euro against the currencies below at 31 December would have affected equity and result after taxes as follows: POSITIVE FAIR NEGATIVE FAIR NOMINAL VALUE 2014 VALUE (CARRY- VALUE (CARRY- OF UNDERLYING 2015 EUR 1,000 ING AMOUNT) ING AMOUNT) INSTRUMENT EUR 1,000 EQUITY RESULT Forward contracts - all 25 1,074 17,203 USD -1 390/1 390 -90/90 Forward contracts - under hedge GBP -2 530/2 530 -300/300 accounting - 227 - 2014 Interest swap - not under hedge EUR 1,000 EQUITY RESULT accounting - 19 - USD -31/31 -69/69 GBP -2 239/2 239 -6/6

51 | Comptel Annual Report 2015 Financial statements

28. ADJUSTMENTS TO CASH FLOWS FROM OPERATING 30. COMMITMENTS AND CONTINGENCIES ACTIVITIES EUR 1,000 2015 2014 Non-cash transactions or items that are not part of cash flows from operating activities: Bank guarantees, short term 2,286 2,595

EUR 1,000 2015 2014 Bank guarantees, long term 441 285 Total 2,727 2,880 Other operating income -62 -300 Depreciation, amortisation and impairment charges 6,756 6,263 Corporate mortgages 200 200 Exchange differences 994 325 Share of result of associates -287 -45 Collaterals given on behalf of others Share-based payments 428 263 Guarantees 29 34 Other adjustments 5 -411 Total 7,834 6,095

29. OPERATING LEASES Minimum lease payments on non-cancellable office facilities leases and other operating leases are payable as follows:

EUR 1,000 2015 2014 Less than one year 2,161 2,428 Between one and five years 1,218 2,962 Total 3,379 5,390

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 to renew the lease after that date. The index, renewal and other terms of the agreements are diverse. The statement of comprehensive income for the year 2015 includes lease expenses for the office premises amounting to EUR 3,035 thousand (2014: EUR 2,978 thousand).

52 | Comptel Annual Report 2015 Financial statements

31. RELATED PARTY TRANSACTIONS 2015 2014 The Comptel Group companies are as follows:

COMPANY DOMICILE GROUP HOLDING (%) GROUP VOTING (%) GROUP HOLDING (%) GROUP VOTING (%)

Comptel Corporation Finland Comptel Communications Holdings Ltd. UK 100.00 100.00 100.00 100.00 Comptel Communications Ltd. UK 100.00 100.00 100.00 100.00 Business Tools Oy Finland 0.00 0.00 100.00 100.00 Comptel Communications AS Norway 100.00 100.00 100.00 100.00 Comptel Communications Brasil Ltda Brazil 100.00 100.00 100.00 100.00 Comptel Communications EOOD Bulgaria 100.00 100.00 100.00 100.00 Comptel Communications Inc. USA 100.00 100.00 100.00 100.00 Comptel Communications Oy Finland 100.00 100.00 100.00 100.00 Comptel Communications Sdn Bhd Malaysia 100.00 100.00 100.00 100.00 Comptel Passage Oy Finland 0.00 0.00 100.00 100.00 Comptel Ltd UK 0.00 0.00 100.00 100.00 Viewgate Networks Ltd. UK 0.00 0.00 100.00 100.00 Xtract Oy Finland 100.00 100.00 100.00 100.00 Comptel Communications India Private Ltd. India 100.00 100.00 100.00 100.00 Comptel Communications S.r.l. Italy 100.00 100.00 100.00 100.00 Comptel Palvelut Philippines, Inc. Philippines 100.00 100.00 0.00 0.00

The Comptel Group has a related party relationship with its associates, the Board of Directors, President and CEO, the Executive Board and also with people and companies under Comptel management’s influence. More information about the investments in associates is given in the note number 16.

53 | Comptel Annual Report 2015 Financial statements

Transactions, which have been entered into with related parties, are as follows: The employee benefits of the President and CEO and the members of the Board of

EUR 1,000 2015 2014 Directors of the parent company: EUR 1,000 2015 2014 Other operating income President and CEO 868 585 Associates - 1

Interest revenue Board of Directors at 31 Dec 2013 Ervi Pertti 59 61 Associates 8 8 Mäkijärvi Heikki 31 31 Söderström Eriikka 31 32 Non-current receivables Vaajoensuu Hannu 39 40 Associates 121 113 Vasara Antti 31 33 Former Board members CONTINGENT LIABILITIES ASSUMED ON BEHALF OF GROUP COMPANIES Walldén Petteri - 2 In 2008 Comptel Corporation gave a performance guarantee, still in force, on behalf Total 191 199 of its subsidiary. The total value of this agreement is USD 4 million. Comptel gave a guarantee of GBP 700 thousand for its subsidiary in 2009. GUARANTEES AND OTHER CONTINGENT LIABILITIES 2015 2014 Guarantees 29 34 KEY MANAGEMENT COMPENSATION The key management personnel compensation includes the employee benefits of the An additional defined contribution pension plan has been agreed on for the President President and CEO, the members of the Board of Directors and the members of the and CEO of the parent company. Yearly pension expense is 15% of salary. The re- Executive Board. tirement age is based on the Finnish Statutory Employment Pension Scheme (TyEL). New options were granted to the former and current members of the Executive Board EUR 1,000 2015 2014 in 2015, total number of the share options was 480,000 (In 2014 2.140.000). 3.618.260 Salaries and other short-term employee benefits 2,169 2,131 share options were granted to the President and CEO in 2015 (In 2014 400.000). At 31 Share-based payments 725 131 December 2014 the management had 5,448,260 share options, which were not exercis- Total 2,894 2,262 able (2014: 3,094,000 share options, of which 975,000 were 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 management of the Group had no loans referred to in the Companies Act, chapter 8, article 6.

54 | Comptel Annual Report 2015 Financial statements KEY FIGURES

FINANCIAL SUMMARY 2011*) 2012 2013 2014 2015

Net sales, EUR 1,000 76,751 82,428 82,668 85,714 97,728 Net sales, change % -1.5 7.4 0.3 3.7 14.0 Operating profit/loss, EUR 1,000 11,902 -13,517 7,308 8,311 8,474 Operating profit/loss, change % 31.3 213.6 154.1 13.7 2.0 Operating profit/loss, as % of net sales 15.5 -16.4 8.8 9.7 8.7 Profit/loss before taxes, EUR 1,000 10,963 -13,955 5,554 7,436 7,612 Profit/loss before taxes, as % of net sales 14.3 -16.9 6.7 8.7 7.8 Return on equity, % 16.7 -37.2 9.3 17.5 12.8 Return on investment, % 23.6 -36.3 16.1 19.5 18.3 Equity ratio, % 66.5 46.8 50.5 52.4 52.4 Gross investments in tangible and intangible assets, EUR 1,000 1) 1,037 4,484 551 740 558 Gross investments in tangible and intangible assets, as % of net sales 1) 1.4 5.4 0.7 0.9 0.6 Research and development expenditure, EUR 1,000 15,419 18,581 17,790 16,791 20,299 Research and development expenditure, as % of net sales 20.1 22.5 21.5 19.6 20.8 Order backlog, EUR 1,000 47,217 48,368 40,756 55,213 66,344 Average number of employees during the financial period 623 700 684 665 723 Interest-bearing net liabilities, EUR 1,000 -9,334 3,541 2,228 -1,789 4,137 Gearing ratio, % -22.3 13.1 7.7 -5.4 11.1 Debt-equity ratio% 0.2 31.0 30.3 22.7 19.2

1) The figure does not include investments in development projects. Includes the acquisition of Xtract in 2012. The gross capital investments excluding the acquisition amounted EUR 1,678 thousand, which is 2.0% of net sales.

55 | Comptel Annual Report 2015 Financial statements

PER SHARE DATA 2011*) 2012 2013 2014 2015

EPS, EUR 0.07 -0.12 0.02 0.05 0.04 Diluted EPS, EUR 0.07 -0.12 0.02 0.05 0.04 Equity per share, EUR 0.39 0.25 0.27 0.31 0.34 Dividend per share, EUR 2) 0.03 - 0.01 0.02 0.03 Dividend per earnings, % 2) 42.2 - 41.20 39.54 72.65 Effective dividend yield, % 2) 6.1 - 2.10 2.00 1.60 P/E ratio 6.9 -3.3 19.8 19.4 43.40 Highest share price 0.79 0.63 0.59 1.00 1.93 Lowest share price 0.42 0.37 0.38 0.48 0.84 Yearly average share price (VWAP) 0.63 0.47 0.46 0.60 1.20 Market value at year-end, million EUR 52.3 42.8 51,5 105,8 198.1 Trading volume 32 836 546 26 734 489 18,358,693 27,778,321 41,222,529 Development of exchange of shares % 30.7 25.0 17.1 25.9 38.0 Adjusted number of shares at the end of period 107,054,810 107,054,810 107,421,270 107,421,270 108,395,409 of which the number of treasury shares 292,685 161,219 161,219 464,739 118,507 Outstanding shares at the end of period 106,762,125 106,893,591 107,260,051 106,956,531 108,276,902 Adjusted average number of shares during the period 106,775,223 106,863,518 106,893,591 107,284,900 107,370,551 Average number of shares, dilution included 106,775,223 107,650,327 106,893,591 107,625,526 109,640,245

2) The Board’s proposal *) Year 2011 error has been corrected.

56 | Comptel Annual Report 2015 Financial statements DEFINITIONS OF KEY FIGURES

Profit/loss for the financial year attributable to equity Operating profit/loss shareholders Operating margin % = x 100 Earnings per share (EPS) = Net sales Average number of outstanding shares for the financial year

Profit margin Profit/loss before taxes Equity attributable to the equity holders of the parent = x 100 (before income taxes) % Net sales company Equity per share = Adjusted number of shares at end of period Profit/loss Return on equity % (ROE) = x 100 Total equity (average during year)) Dividend Dividend per share = Adjusted number of shares at end of period Profit/loss before taxes + financial expenses Return on investment % (ROI) = x 100 Total equity + interest bearing liabilities (average during year) Dividend per share Dividend per earnings % = x 100 Earnings per share (EPS) Total equity Equity ratio % = x 100 Statement of financial position total – advances received Dividend per share Effective dividend yield % = x 100 Share closing price at end of period Gross investments in tangible Gross investments in tangible and intangible assets and intangible assets, as % = x 100 of net sales Net sales Share closing price at end of period P/E-ratio = Earnings per share (EPS) Research and development Research and development expenditure = x 100 expenditure, as % of net sales Net sales Development of exchange of Volume of exchange of shares = shares % Adjusted number of shares at the end of period Interest-bearing liabilities - cash and cash equivalents Gearing ratio % = x 100 Total equity

Interest-bearing liabilities Debt-equity ratio % = x 100 Total equity

57 | Comptel Annual Report 2015 Financial statements PARENT COMPANY PARENT COMPANY INCOME STATEMENT, FAS BALANCE SHEET, FAS 1 JAN - 31 DEC 1 JAN - 31 DEC EUR 1,000 NOTES 2015 2014 EUR 1,000 NOTES 31 DEC 2015 31 DEC 2014 Net sales 2 93,137 82,580 ASSETS Non-current assets 11 Other operating income 3 54 314 Other intangible assets 246 379 Tangible assets 96 61 Materials and services 4 -3,896 -3,021 Investments 3,180 3,279 Personnel expenses 5 -18,083 -16,284 3,522 3,719 Depreciation and amortisation 6 -310 -345 Current assets Other operating expenses 7 -65,440 -57,599 Non-current receivables 12 4,140 3,583 -87,730 -77,249 Current receivables 13 52,547 43,525 Operating profit/loss 5,462 5,645 Cash and cash equivalents 193 6,609 52,740 50,133 Financial income 8 703 2,319 Financial expenses 9 -1,490 -1,116 TOTAL ASSETS 60,402 57,435

Profit/loss before appropriations and income taxes 4,675 6,848 EQUITY AND LIABILITIES Capital and reserves 14 Extraordinary income 550 - Share capital 2,141 2,141 Fund of invested non-restricted equity 1,698 401 Profit/loss before income taxes 5,225 6,848 Retained earnings 4,266 2,388 Profit/loss for the period 1,729 3,952 Income taxes 10 -3,496 -2,896 9,834 8,882

Profit/loss for the period 1,729 3,952 Provisions 15 109 270

Liabilities Non-current liabilities 16 - 1 272 Current liabilities 17 50,459 47,012

58 | Comptel Annual Report 2015 TOTAL EQUITY AND LIABILITIES 60,402 57,435 Financial statements PARENT COMPANY STATEMENT OF CASH FLOWS, FAS

1 JAN - 31 DEC 1 JAN - 31 DEC 1 JAN - 31 DEC 1 JAN - 31 DEC EUR 1,000 2015 2014 EUR 1,000 2015 2014 Cash flows from operating activities Cash flows from financing activities Profit/loss before appropriations and income taxes 4,675 6,848 Dividends paid -2,139 -1,073 Acquisition of own shares - -312 Adjustments: Proceeds from new shares 497 - Depreciation, amortisation and impairment charges 310 345 Proceeds from share options 800 - Financial income and expenses 176 -1,475 Proceeds from borrowings 27,979 8,500 Other adjustments 12 37 Repayment of borrowings -28,063 -9,600 Change in working capital: Net cash used in financing activities -926 -2 484 Change in trade and other current receivables -8,662 -6,175 Change in trade and other current liabilities 2,599 8,267 Change in provisions -161 -7 Change in cash and cash equivalents -6,416 2,111 Interest paid -256 -187 Interest received 5 3 Cash and cash equivalents at the beginning of period 6,609 4,498 Taxes paid and tax returns received -3,496 -2,896 Cash and cash equivalents at the end of period 193 6,609 Net cash from operating activities -4,798 4,760 Change -6,416 2,111

Cash flows from investing activities Sale of business operations - 300 Investments in subsidiaries -180 - Investments in tangible and intangible assets -212 -43 Proceeds from sale of tangible and intangible assetts - 1 Proceeds from repayments of loans 243 - Loans granted -543 -423 Net cash used in investing activities -692 -165

59 | Comptel Annual Report 2015 Financial statements NOTES TO THE FINANCIAL STATEMENTS OF THE PARENT COMPANY, FAS

1. ACCOUNTING PRINCIPLES FOR THE foreign currency are translated at the closing rate at the balance sheet FINANCIAL STATEMENTS date. Gains and losses resulting from transactions in foreign currencies and translation of monetary items are recognised on the income statement. COMPANY PROFILE TANGIBLE ASSETS, INTANGIBLE ASSETS AND ComptelCorporation is a Finnish public limited liability company organ- OTHER LONG-TERM EXPENDITURE ised under the laws of Finland. Founded in 1986, Comptel Corporation is one of the leading providers of telecom software and services in Tangible assets, intangible assets and other long-term expenditure are convergent mediation and charging, predictive analytics and service stated at historical cost less cumulative depreciation and amortisation fulfillment. Comptel Corporation is listed on NASDAQ OMX Helsinki and any impairment losses. Where parts of an item of tangible assets, (CTL1V). The parent company of the Comptel Group, Comptel an intangible asset or parts of other long-term expenditure have different Corporation, is domiciled in Helsinki and its registered address is useful lives, they are accounted for as separate items of tangible assets, Salmisaarenaukio 1, 00180 Helsinki. intangible assets or other long-term expenditure. Maintenance, repairs Comptel Corporation’s separate financial statements are prepared and renewals are generally expensed during the financial period in which in accordance with Finnish Accounting Standards (FAS). they are incurred except for large renovation expenditure relating to leased premises that are capitalised under other long-term expenditure. PRESENTATION OF FINANCIAL INFORMATION Depreciation and amortisation is charged to the income statement on a straight-line basis over the estimated useful life of an asset. The All financial information presented in euro has been rounded to the depreciation/amortisation period for all assets is four years, with the nearest thousand and consequently the sum of the individual figures exception of the basic refurbishment of leased premises and capital- can deviate from the total figure. ized patent expenses. Leased assets are amortised over the shorter of the period of five years and the lease term. Capitalized patent ex- FOREIGN CURRENCY TRANSACTIONS penses are depreciated within ten years. The amortisation period for goodwill is five years. Transactions denominated in foreign currencies are translated at the Gains and losses on sales and disposals of the abovementioned exchange rates prevailing on the dates of the transactions. Foreign assets are included in operating income and in operating expenses, currency monetary balances are translated at the closing rate at the respectively. balance sheet date. Non-monetary items measured at fair value in a The difference between the annual depreciation according to

60 | Comptel Annual Report 2015 Financial statements

plan and the depreciation made in taxation is shown as a separate constructive) as a result of a past event, it is probable that an outflow of item under appropriations in the income statement. The accumulated economic benefits will be required to settle the obligation and a reliable depreciation difference is shown under appropriations between the estimate can be made of the amount of the obligation. shareholders’ equity and liabilities in the balance sheet. A provision for onerous contracts is recognised when the expected benefits to be derived by the company from a contract are lower than RESEARCH AND DEVELOPMENT COSTS the unavoidable cost of meeting its obligations under the contract. Research and development costs are expensed during the period in INCOME TAXES which they occur. Government grants that compensate the company for the development costs are deducted from the related expenses in The income taxes in the income statement consist of income tax based the income statement. on taxable profit for the financial period, adjustments to prior year taxes and withholding taxes treated as non-deductible. LEASES REVENUE RECOGNITION AND NET SALES Lease payments are expensed during the financial period in which they occur. Revenue from the sale of goods is recognised when significant risks and rewards of ownership have been transferred to the buyer. Revenue PENSION OBLIGATIONS from services is recognised when the service has been performed. License revenue that includes no work performance is recognised The pension plans of the parent company are arranged in accordance when the licence is delivered. The number of subscribers at a client with the Finnish legislation. Contributions based on the regularly is reviewed continuously. If their number exceeds the number agreed reviewed actuarial calculations prepared by the pension insurance on in the terms of the licence, the client is charged for the increased company are recognised as an expense in the income statement in number of subscribers. This licence upgrade revenue is recognised the year to which they relate. upon invoicing. Maintenance revenue is recognised on a straight-line basis over the maintenance term. PROVISIONS LONG-TERM PROJECTS A provision is based on an existing obligation and it is recognised on the balance sheet when an entity has a present obligation (legal or Revenue and expenses from a long-term project are recognised using

61 | Comptel Annual Report 2015 Financial statements

the percentage of completion method, when the outcome of a long- DERIVATIVE FINANCIAL INSTRUMENTS term project can be estimated reliably. The revenue from a long-term project comprises licence income and work. The outcome of a long- PRINCIPLES term project can be estimated reliably when the revenue and expenses expected as well as the progress made towards completing a particu- Receivables, debt and cash flow in foreign currencies can be hedged. lar project can be measured reliably and when it is probable that the Cash flows are hedged against currency fluctuations in respect of those economic benefits associated with the project will flow to the company. projects for which revenue is recognised based on the percentage of In Comptel the percentage of completion of a long-term project is completion method and invoices issued in a currency other than euro. determined by the relation of accrued work hours to estimated overall work hours. When it is probable that total project costs will exceed RECOGNITION AND MEASUREMENT total project revenue, the expected loss is recognised as an expense immediately. The company uses currency forward contracts. The changes in the Net sales are adjusted for sales-related indirect taxes and other values of the currency forward contracts entered into to hedge curren- adjusting items. cy risks are recognised so that the interest rate difference, if material, A separate warranty provision is recognised to cover costs under is allocated over the term of the contract and the accrued portion is warranty periods following the completion of the projects. The total recognised in interest income or expenses. Exchange rate gains and estimated margin of onerous projects is recognised as an expense losses are recognised as adjustments to sales or in exchange rate and a provision. gains and losses under financial items, depending on the nature of the underlying item. TRADE RECEIVABLES Any open currency forward contracts are measured at the average exchange rate at the balance sheet date and the resulting changes in Trade receivables are recognised at the original invoice amount to value are recognised in the income statement. The exception applies customers and stated at their cost less impairment losses. to currency forward contracts relating to the company’s cash flow from sales, as their changes in value are recognised in the income CASH AND CASH EQUIVALENTS statement as the cash flow is realized. The nominal values and market values (closing cost) of all unexpired currency forward contracts are Cash and cash equivalents comprise cash, bank balances and other presented in the notes to the financial statements under the heading short-term highly liquid investments with original maturities of three Collaterals, commitments and other contingent liabilities, irrespective months or less from the date of acquisition. Bank overdrafts, if any, are of whether their changes in value have been recognised in the income included within current liabilities. statement.

62 | Comptel Annual Report 2015 Financial statements

2. NET SALES 4. MATERIALS AND SERVICES

1000 EUROA 2015 2014 EUR 1,000 2015 2014 By geographical area Purchases -88 79 Europe 39,831 34,821 External services 3,984 2,942 Asia-Pacific 25,791 22,951 Total 3,896 3,021 Middle East and Africa 16,791 16,698 Americas 10,725 8,110 5. PERSONNEL EXPENSES Total 93,137 82,580 EUR 1,000 2015 2014 Net sales figures have been calculated based on the area, where the work was delivered to. Wages and salaries 14,479 13,539 Pension expenses 2,814 2,120 REVENUE RECOGNITION USING PERCENTAGE OF COMPLETION METHOD Other social security costs 791 625 1000 EUROA 2015 2014 Total 18,083 16,284 Net sales recognised as revenue according to percentage of completion 21,731 15,841 MANAGEMENT SALARIES AND OTHER COMPENSATION 2015 2014 Amount recognised as revenue during the financial year and previous years for long-term projects in Members of the Board of Directors 191 200 progress 12,932 11,541 Information on the remuneration of the Group management is presented in more Total costs of incomplete long-term projects 5,775 7,541 detail in note 31. Related party transactions to the consolidated financial statements. Backlog of orders of long-term projects according to percentage of completion 18,371 13,543 2015 2014

Prepayments and accrued income recognised on Average number of personnel 208 188 the basis of percentage of completion 2,845 2,768 Deferred income and accruals recognised on the PENSION COMMITMENTS IN RESPECT OF MEMBERS OF THE BOARD OF DIRECTORS AND basis of percentage of completion 2,477 4,409 THE PRESIDENT AND CEO An additional defined contribution pension plan has been agreed on for the President 3. OTHER OPERATING INCOME and CEO. The retirement age is based on the Finnish Statutory Employment Pension EUR 1,000 2015 2014 Scheme (TyEL) Gain on sale of tangible and intangible assets 0 1 Other 54 313 Total 54 314

63 | Comptel Annual Report 2015 Financial statements

6. DEPRECIATION, AMORTISATION AND 8. FINANCIAL INCOME

IMPAIRMENT CHARGES EUR 1,000 2015 2014 EUR 1,000 2015 2014 Interest income Depreciation and amortisation From Group companies 13 120 From others 67 33 Intangible rights 268 311

Machinery and equipment 42 34 Income from dividends Total 310 345 From Group companies 204 1 524

7. OTHER OPERATING EXPENSES Exchange gains From others 418 642 EUR 1,000 2015 2014 Lease payments 1,420 1,361 Total 703 2,319 Travel expenses 1,593 1,415 Marketing expenses 2,066 1,062 9. FINANCIAL EXPENSES Software expenses 3,493 3,412 Consulting expenses 3,409 3,245 EUR 1,000 2015 2014 Group charges 49,137 43,990 Interest expenses Other operating expenses 4,323 3,114 To others 93 97 Total 65,440 57,599 Other financial expenses AUDITOR’S FEES 2015 2014 To others 162 105 Ernst & Young Audit 233 105 Exchange losses Tax consultation 79 55 To others 1,234 914 Other services 5 12 Total 317 172 Total 1,490 1,116

64 | Comptel Annual Report 2015 Financial statements

10. INCOME TAXES

EUR 1,000 2014 2013 Withholding taxes 3,420 2,819 Taxes from previous years 31 77 Taxes from previous years 45 0 Total 3,496 2,896

11. NON-CURRENT ASSETS

INTANGIBLE ASSETS OTHER INTANGIBLE ASSETS OTHER INTANGIBLE LONG-TERM INTANGIBLE LONG-TERM EUR 1,000 RIGHTS EXPENDITURE TOTAL EUR 1,000 RIGHTS EXPENDITURE TOTAL Cost at 1 Jan 2015 11,022 417 11,439 Cost at 1 Jan 2014 11,022 417 11,439 Additions 103 32 135 Additions 0 0 0 Cost at 31 Dec 2015 11,125 450 11,574 Cost at 31 Dec 2014 11,022 417 11,439

Accumulated amortisation at 1 Jan Accumulated amortisation at 1 Jan 2015 10,643 417 11,060 2014 10,332 417 10,749 Amortisation 265 3 268 Amortisation 311 0 311 Accumulated amortisation at 31 Dec Accumulated amortisation at 31 Dec 2015 10,908 421 11,328 2014 10,643 417 11,060 Book value at 31 Dec 2015 217 29 246 Book value at 31 Dec 2014 379 0 379

65 | Comptel Annual Report 2015 Financial statements

TANGIBLE ASSETS MACHINERY AND TANGIBLE ASSETS MACHINERY AND EUR 1,000 EQUIPMENT EUR 1,000 EQUIPMENT Cost at 1 Jan 2015 3,900 Cost at 1 Jan 2014 3,857 Additions 77 Additions 43 Cost at 31 Dec 2015 3,977 Cost at 31 Dec 2014 3,900

Accumulated depreciation at 1 Jan 2015 3,840 Accumulated depreciation at 1 Jan 2014 3,805 Depreciation 42 Depreciation 34 Accumulated depreciation at 31 Dec 2015 3,881 Accumulated depreciation at 31 Dec 2014 3,840 Book value at 31 Dec 2015 96 Book value at 31 Dec 2014 61

SHARES IN SHARES IN ASSOCIATED SHARES IN OTHER INVESTMENTS GROUP COMPANIES COMPANIES INVESTMENTS TOTAL

Cost at 1 Jan 2015 2,792 400 87 3,279 Additions 180 - - 180 Decreases -280 - - -280 Cost at 31 Dec 2015 2,692 400 87 3,180

Book value at 31 Dec 2015 2,692 400 87 3,180

SHARES IN SHARES IN ASSOCIATED SHARES IN OTHER INVESTMENTS GROUP COMPANIES COMPANIES INVESTMENTS TOTAL

Cost at 1 Jan 2014 2,792 400 87 3,279 Additions - - - - Cost at 31 Dec 2014 2,792 400 87 3,279

Book value at 31 Dec 2014 2,792 400 87 3,279

Additions in Group companies in 2012: Xtract Oy EUR 2,253 thousand (ownership 100%), Comptel Communications S.r.l. EUR 10 thousand (ownership 100 %), Comptel Communications India Private Ltd EUR 0 thousand (ownership 1 %), total EUR 2,263 thousand.

66 | Comptel Annual Report 2015 Financial statements

12. NON-CURRENT RECEIVABLES 13. CURRENT RECEIVABLES

EUR 1,000 2015 2014 EUR 1,000 2015 2014 Receivables from Group companies Receivables from Group companies Loan receivables 3,470 3,470 Trade receivables 2,671 2,342 Total 3,470 3,470 Loan receivables 868 569 Other receivables 572 2,011 Receivables from associated companies Total 4,111 4,921 Loan receivables 75 75 Prepayments and accrued income 596 38 Receivables from others Total 671 113 Prepayments 1 61 Trade receivables 33,457 25,115 Non-current receivables total 4,141 3,583 Other receivables 6,326 4,263 Prepayments and accrued income 8,653 9,164 Capital loans of EUR 3,470 thousand have been granted to the subsidiary Xtract Oy Total 48,437 38,604 in accordance with the Companies Act chapter 12, constituting a non-current loan receivable. The interest of the loan is the base rate set by the Ministry of Finance Current receivables total 52,547 43,525 +1.55%. The accrued interest balance is 117,462.60 euros. Pitkäaikaisista siirtosaamisista 550 000,00 euroa on emoyhtiön tytäryhtiöltään Specification of prepayments and accrued Comptel Communications Oy:ltä saama konserniavustus. income

Accrued income capitalised according to degree of completion 2,845 2,768 Other prepayments 5,808 6,396 Total 8,653 9,164

67 | Comptel Annual Report 2015 Financial statements

14. EQUITY 15. PROVISIONS EUR 1,000 2015 2014 RESTRICTED EQUITY EUR 1,000 2015 2014 Provisions at 1 Jan 270 277 Share capital at 1 Jan 2,141 2,141 Provisions made during the financial year 109 270 Share capital at 31 Dec 2,141 2,141 Provisions used during the financial year -270 -277 Provisions at 31 Dec 109 270 NON-RESTRICTED EQUITY EUR 1,000 2015 2014 The provisions consist of a warranty provision. In 2012 the provisions include also Fund of invested non-restricted equity at 1 Jan 401 401 a provision recognised for unoccupied leased office facilities and a cost reserve for fulfilling obligations pertaining to customer projects. New shares 497 0

Share based compensation 800 0 16. NON-CURRENT LIABILITIES Fund of invested non-restricted equity at 31 Dec 1,698 401 EUR 1,000 2015 2014 Liabilities to Group companies Retained earnings at 1 Jan 6,340 3,706 Other liabilities 0 272 Acquisition of Corporation’s own shares 0 -312

Transfer of treasury shares 66 66 Liabilities to others Dividends paid -2,139 -1,073 Loans 0 1,000 Retained earnings at 31 Dec 4,266 2,388

Total non-current liabilities 0 1,272 Profit/loss for the financial year 1,729 3,952

Equity, total 9,834 8,882

BREAKDOWN OF DISTRIBUTABLE FUNDS EUR 1,000 2015 2014 Fund of invested non-restricted equity 1,698 401 Retained earnings 4,266 2,388 Profit/loss for the financial year 1,729 3,952 Total 7,693 6,741

68 | Comptel Annual Report 2015 Financial statements

17. CURRENT LIABILITIES 18. DEFERRED TAX ASSETS EUR 1,000 2015 2014 EUR 1,000 2015 2014

Liabilities to Group companies Deferred tax assets, which have not been Trade payables 24,427 19,724 booked in the balance sheet: Other liabilities 21 925 Reversal of depreciation and amortisation in taxation 171 165 Total 24,448 20,649 Loss for the period 0 301 Impairment loss on trade receivables 6,860 5,236 Liabilities to others Trade payables 1,745 944 Total 7,032 5,702 Loans 6,979 6,000 Other liabilities 525 1,296 Accrued expenses and deferred income 16,762 18,123 Total 26,011 26,363

Current liabilities total 50,459 47,012

Specification of accrued expenses and deferred income

Personnel expenses 4,195 4,383

Items recognised on the basis of percentage of completion method 2,477 4,409 Other accrued expenses and deferred income items related to revenue recognition 9,074 8,446 Other accrued expenses and deferred income items 1,016 885 Total 16,762 18,123

69 | Comptel Annual Report 2015 Financial statements

19. COLLATERALS, COMMITMENTS AND OTHER CONTINGENT LIABILITIES

LEASE COMMITMENTS EUR 1,000 2015 2014 CONTINGENT LIABILITIES ASSUMED ON BEHALF OF GROUP COMPANIES

Amounts payable during the next financial year 152 198 In 2008 Comptel Corporation has given a performance guarantee on behalf of its Amounts payable later 102 191 subsidiary, still valid on 31.12.2012. The total value of this agreement is USD 4 Total 253 389 million. Comptel gave a guarantee of GBP 700 thousand for its subsidiary in 2009. The leases the company has entered into generally run for a period of three years and contain no redemption commitments. DERIVATIVE INSTRUMENTS EUR 1,000 2014 2013 RENTAL COMMITMENTS Forward exchange contracts EUR 1,000 2015 2014 Market value -351 -1,049 Amounts payable during the next financial year 1,324 1,323 Value of underlying instrument 39,046 17,203 Amounts payable later 657 1,971 Total 1,981 3,295 Forward exchange contracts are used for hedging purposes.

GUARANTEES THE BOARD OF DIRECTORS’ PROPOSAL FOR THE DISTRIBUTION OF EUR 1,000 2015 2014 PARENT COMPANY PROFIT Bank guarantees due within one year 2,286 2,600 According to the parent company balance sheet at 31 December 2015 the parent Bank guarantees due later 441 0 company’s distributable funds were EUR 7,692,598.27. Total 2,728 2,600 The Board of Directors proposes to the Annual General Meeting that the dividend for the year 2015 would be EUR 0.03 per share. COLLATERALS GIVEN ON BEHALF OF OTHERS EUR 1,000 2015 2014 Guarantees 29 34

70 | Comptel Annual Report 2015 Financial statements SHARES AND SHAREHOLDERS

The share of Comptel Corporation is listed in the NASDAQ OMX incentive and commitment program. Helsinki under the code CTL1V. The remaining number of share options with the symbol C is Comptel has one series of shares. Each share equals to one (1) 975,000. The share options may be exercised to subscribe to a maxi- vote at the Shareholders’ General Meeting. mum of 975,000 new shares in the company or existing shares held by The share capital of the company has not changed during the the company. The issued share options can be exchanged for shares financial year ended. The company’s share capital on 31 December constituting a maximum total of 0.09 per cent of the company’s shares 2015 amounted to 2,141,096.20 euros, and the total number of shares and votes of the shares, after the potential share subscription, if new was 108,395,409. shares are issued in the share subscription. The share subscription price will be based on the prevailing market AUTHORISATIONS TO THE BOARD OF DIRECTORS price of the Comptel share on the NASDAQ OMX Helsinki Ltd in April 2010 and April 2011. The current share subscription price for Comptel The annual General meeting on 9 April 2015 granted to the Board of share option 2009C is EUR 0.51 per share, which corresponds to the Directors an authorisation to decide on share issues and granting spe- trade volume weighted average quotation of the share on the NASDAQ cial rights entitling to shares. A maximum of 21,400,000 shares can be OMX Helsinki during 1 April - 30 April 2011 deducted by the dividends issued. A maximum of 10,700,000 of the company´s treasury shares and capital repayment paid. held by the company can be conveyed and/or received on basis on the Comptel’s 2009C share options were listed on NASDAQ OMX special rights. Helsinki commencing from 1 November 2013. The trading code is The authorisations are valid until 30 June 2016. However, the CTL1VEW309 and ISIN code is FI4000048772. In 2015, 788,359 authorisation to implement the company’s share-based incentive pro- options were traded and the closing price was EUR 0.63. grams is valid until five years from the AGM resolution. A separate stock release regarding the authorisations to the Board SHARE OPTION SCHEME 2014 of Directors has been given on 9 April 2015. Based on the authorization given by the Annual General Meeting, the Board of Directors of Comptel Corporation has decided on 5.2.2014 to SHARE OPTION SCHEMES issue stock options to the key personnel of the Comptel Group. Comptel has currently two share option schemes. The maximum total number of stock options issued is 4.200.000, and they entitle their holders to subscribe each one share for maximum SHARE OPTION SCHEME 2009 total of 4.200.000 new shares in the Company or existing shares held by the Company. The new option scheme replaces the share option The Annual General Meeting decided on 16 March 2009 to issue share scheme 2012. options to the key personnel of the Comptel Group as a part of the Of the stock options, 2.200.000 are marked with the symbol 2014A,

71 | Comptel Annual Report 2015 Financial statements

1.000.000 are marked with the symbol 2014B and 1.000.000 are The share subscription periods for the options will be: 2015A marked with the symbol 2014C. 15.8.2018-15.9.2019, 2015B 15.8.2019-15.9.2019. The subscription price for stock option 2014A is EUR 0.51 per The share subscriptions may result in increase of the number of the share, which is the trade volume weighted average quotation of the company shares, maximum of 3,478,260 shares. share on NASDAQ OMX Helsinki Ltd during 15.2.-15.3.2014 deducted by the dividends and capital repayment paid. The subscription prices SHARE-BASED INCENTIVE PLANS for stock options 2014B is EUR 0.91 per share, which is the trade

volume weighted average quotation of the share on NASDAQ OMX CEO PERFORMANCE SHARE PLAN 2011-2013 Helsinki Ltd during 15.2.-15.3.2015. The subscription prices for stock options 2014C shall be the trade volume weighted average quotation The CEO has had a share-based incentive plan. The aim of the plan is of the share on NASDAQ OMX Helsinki Ltd during 15.2.-15.3.2016. to combine the objectives of the shareholders and the CEO of Comptel The share subscription periods for the options will be: 2014A Corporation in order to increase the value of the company and to 1.2.2016-31.1.2018, 2014B 1.2.2017-31.1.2019 and 2014C 1.2.2018- commit the CEO to the company. The prerequisite for participation in 31.1.2020. the plan and receipt of reward from the performance periods is that The share subscriptions may result in increase of the number of the the CEO owns company’s shares or acquires them up to the number company shares, maximum of 4,200,000 shares. predetermined by the Board of Directors which is 230,000 shares. The ownership requirement is valid until 31 December 2015. Furthermore, SHARE OPTION SCHEME 2015 the potential reward from the plan is tied to the validity of the CEO’s service contract. Based on the authorization given by the Annual General Meeting held At the end of the financial year 2014 all shares of the plan were on 9 April 2015, the Board of Directors has decided on 9.9.2015 to transferred and rewards paid. issue stock options to the President and CEO of Comptel Group. The maximum total number of stock options issued is 3,478,260, and they MATCHING SHARE PLAN 2012 entitle the holder to subscribe each one share for maximum total of 3,478,260 new or existing shares held by the company. The Board of Directors of Comptel Corporation has approved on 27 Out of the subscription rights 1,739,130 options are marked by February 2012 a share-based incentive plan for the Group key per- 2015A and 1,739,130 options by 2015B. sonnel. The subscription price is the trade volume weighted average quo- The aim of the plan is to combine the objectives of the share- tation of the share in NASDAQ OMX Helsinki during 12 August 2015 holders and the target people in order to increase the value of the – 8 September 2015 deducted by 20%. company, to commit the target people to the company, and to offer

72 | Comptel Annual Report 2015 Financial statements

them a competitive reward plan based on long-term shareholding in the company. The Matching Share Plan includes two performance periods, both beginning on 2 May 2012. The performance periods will end on 2 May 2015 and on 2 May 2016. The prerequisite for participation in the plan and receipt of reward from the performance periods provides that a target person owns the company’s shares or acquires them up to the number predetermined by the Board of Directors. Furthermore, the potential reward from the plan is tied to the validity of the target person’s employment or service or contractual relation. No reward will generally be paid if a target person’s employment or service ends before the reward payment. Rewards from the Plan will be paid partly in the company’s shares and partly in cash in 2015 and in 2016. The cash proportion is intended to cover taxes and tax-related costs arising from the reward to a target person. The total outstanding amount of rewards to be paid on the basis of the Plan is an approximate maximum of 525,000 Comptel Corporation shares and a cash payment corresponding to the value of the shares, multiplied by 1.5, in the maximum. There were 22 persons in the plan at the end of the year 2015.

73 | Comptel Annual Report 2015 Financial statements BOARD OF DIRECTORS’ PROPOSAL FOR THE DISPOSAL OF PROFITS

The Group parent company’s distributable equity on 31 December 2015 was EUR 7,692,598 (6,740,529).

The Board of Directors proposes to the Annual General Meeting that dividend of 0.03 EUR per share will be paid for 2015.

Helsinki, 17 February 2016

Pertti Ervi

Hannu Vaajoensuu Eriikka Söderström

Antti Vasara Heikki Mäkijärvi

Juhani Hintikka President and CEO

74 | Comptel Annual Report 2015 Financial statements AUDITOR’S REPORT

Liability Companies Act or the articles of association of the company. TO THE ANNUAL GENERAL MEETING OF COMPTEL CORPORATION An audit involves performing procedures to obtain audit evidence about the amounts We have audited the accounting records, the financial statements, the report of the and disclosures in the financial statements and the report of the Board of Directors. The Board of Directors, and the administration of Comptel Corporation for the year ended procedures selected depend on the auditor’s judgment, including the assessment of 31 December, 2015. The financial statements comprise the consolidated statement of the risks of material misstatement, whether due to fraud or error. In making those risk financial position, statement of comprehensive income, statement of changes in equity assessments, the auditor considers internal control relevant to the entity’s preparation and statement of cash flows, and notes to the consolidated financial statements, as well of financial statements and report of the Board of Directors that give a true and fair view as the parent company’s balance sheet, income statement, cash flow statement and in order to design audit procedures that are appropriate in the circumstances, but not notes to the financial statements. for the purpose of expressing an opinion on the effectiveness of the company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well RESPONSIBILITY OF THE BOARD OF DIRECTORS AND THE MANAGING DIRECTOR as evaluating the overall presentation of the financial statements and the report of the The Board of Directors and the Managing Director are responsible for the preparation Board of Directors. of consolidated financial statements that give a true and fair view in accordance with We believe that the audit evidence we have obtained is sufficient and appropriate to International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for provide a basis for our audit opinion. the preparation of financial statements and the report of the Board of Directors that give a true and fair view in accordance with the laws and regulations governing the prepara- OPINION ON THE CONSOLIDATED FINANCIAL STATEMENTS tion of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the In our opinion, the consolidated financial statements give a true and fair view of the company’s accounts and finances, and the Managing Director shall see to it that the financial position, financial performance, and cash flows of the group in accordance with accounts of the company are in compliance with the law and that its financial affairs have International Financial Reporting Standards (IFRS) as adopted by the EU. been arranged in a reliable manner. Opinion on the company’s financial statements and the report of the Board of Directors In our opinion, the financial statements and the report of the Board of Directors give a true and fair view of both the consolidated and the parent company’s financial per- AUDITOR’S RESPONSIBILITY formance and financial position in accordance with the laws and regulations governing Our responsibility is to express an opinion on the financial statements, on the consolidat- the preparation of the financial statements and the report of the Board of Directors in ed financial statements and on the report of the Board of Directors based on our audit. Finland. The information in the report of the Board of Directors is consistent with the The Auditing Act requires that we comply with the requirements of professional ethics. information in the financial statements. We conducted our audit in accordance with good auditing practice in Finland. Good auditing practice requires that we plan and perform the audit to obtain reasonable assur- Helsinki, 17 February 2016 ance about whether the financial statements and the report of the Board of Directors are free from material misstatement, and whether the members of the Board of Directors of Ernst & Young Oy, Authorized Public Accountant Firm the parent company or the Managing Director are guilty of an act or negligence which may result in liability in damages towards the company or have violated the Limited Mikko Järventausta, Authorized Public Accountant

75 | Comptel Annual Report 2015 Annex C

COMPTEL CORPORATION FINANCIAL STATEMENTS RELEASE FOR 2016

Stock exchange release 17 February 2017 at 8:00 am

 Net sales and profit grew, earnings per share grew 154.4 %

Key figures for the Fourth Quarter of 2016:

 Net sales EUR 29.9 million (Q4 2015: 32.6), change -8.2%  Operating profit EUR 5.0 million (5.6), change -10.2%  Operating profit 16.8% of net sales (17.2)  Profit EUR 8.0 million (4.0), growth 100.9%  Earnings per share EUR 0.07 (0.04), growth 96.3%  Order backlog EUR 65.7 million (66.3), change -0.9%

Key figures for Full Year of 2016:

 Net sales EUR 100.0 million (2015: 97.7), growth 2.3%  Operating profit EUR 11.0 million (8.5), growth 29.8%  Operating profit 11.0% of net sales (8.7)  Comparable profit, excluding the India tax accounting, was EUR 7.1 million (4.5), growth 57.3%  The reported profit EUR 11.7 million (4.5), growth 157.5%  Earnings per share EUR 0.11 (0.04), growth 154.4%

Dividend Proposal

The Board of Directors proposes to the Annual General Meeting that no dividend be paid for the financial period ended on December 31st, 2016.

The Board of Directors proposes to the Annual General Meeting that the Annual General Meeting authorizes the Board of Directors to decide on a dividend payment of up to a maximum of EUR 0.04 per share in one tranche for the financial period ended on December 31st, 2016 conditional upon the Transaction Agreement entered into on 8 February 2017 by and between Nokia Corporation and Comptel having been terminated for any reason other than consummation of said tender offer, meaning that the authorization can be used only provided that tender offer announced by Nokia Corporation on 9 February 2017 for all of the issued and outstanding shares and option rights in Comptel Corporation is not completed.

The authorization to decide on payment of dividend shall be valid until 31st, December 2017. Based on this authorization, the Board of Directors is entitled to decide on the dividend record date, dividend payment date and other matters required by the matter. When deciding on the possible payment of dividend, the Board of Directors shall assess the company's liquidity and financial position as required by the Companies Act.

Outlook

We expect 2017 revenue to grow with double digit percentage and we expect comparable EBIT to be between 10-15% of net sales.

Characteristically a significant part of Comptel’s operating profit and net sales is generated in the second half of the year.

These statements for 2016 are based on the company's audited financial statements. The Auditor's Report was issued 16 February, 2017.

Juhani Hintikka, President and CEO:

Both Business Units’ net sales grew slightly in the year 2016. Also, both Business Unit’s profitability improved clearly in 2016.

We continued, as planned, to bring new solutions to the market and this can be seen in the distribution of the net sales. The important FulFillment solution net sales grew over 20 per cent compared to previous year. In Intelligent Data business unit both our Fastermind solution as well as the Monetizer solution grew significantly during 2016. Fastermind solution grew 50 per cent and Monetizer 70 per cent compared to previous year. The net sales of traditional products declined and therefore overall growth of the company was modest. We expect in the future our new products growth to continue and impact more significantly the overall company growth.

The FWD cloud solution got traction in 2016 and at the end of the year we had 4 signed contracts with customers. In addition, we have several ongoing negotiations with new customers and expect the net sales to start showing in 2017 numbers.

Regionally, EMEA continued to grow with strong performance in 2016. In Europe we received a significant reference, when one of the biggest operator chose Comptel as a partner for developing jointly their future virtual solutions. In APAC, we experienced some continued delays with our customers’ decision making as well as increasing competition among vendors.

In Latin America, the year 2016 was challenging and we implemented changes in the operational structure to better match the market conditions. Especially the traditional solutions net sales declined in Latin America. We expect this situation to improve during 2017. During 2016 we increased our investment in the North American market and built a good foundation for future growth.

The company profitability developed positively and our EBIT for the year improved from 8.7 per cent to 11.0, despite significant investments into R&D and sales coverage. I’m especially pleased with the company’s profitability development.

The full year profit increased significantly, being EUR 11.7 million and earnings per share 0.11. We managed to complete the process concerning a large part of our outstanding withholding taxes in India. This had a significant impact on our net profit for the year.

During 2016, we secured 21 orders valued over EUR 1.0 million. In 2015, the comparable number was 25. We also won 9 new customers during 2016.

In the beginning of 2017 our sales pipeline is significantly higher than a year ago and we are confident that we will achieve double digit growth in 2017.”

Business review of 2016

In the fourth quarter, Comptel’s net sales declined by 8.2 percent compared to previous year and were EUR 29.9 million (32.6). Both business unit net sales declined in the fourth quarter, compared to previous year. In the fourth quarter net sales continued to grow in the EMEA region while all other regions net sales declined.

Full year net sales grew by 2.3 per cent compared to previous year and were EUR 100.0 million (97.7). The new solutions sales continued to grow significantly while some of the traditional solutions sales declined compared to previous year.

Operating profit for the year improved by 29.8 per cent and was EUR 11.0 million (8.5). Significant investments into R&D and the product portfolio continued during the year 2016.

For the full year 2016 financial income/expenses were EUR 0.9 million (-1.1). This includes EUR 1.1 million interest income that relates to withholding tax refund from India. The other financial income/expenses were mainly due to fluctuation in exchange rates between EUR and other currencies. Shares in associated minority companies impacted results before taxes by EUR -0.2 million (0.3).

Profit before taxes, for the full year, was EUR 11.7 million (7.6) and profit for the reporting period was EUR 11.7 million (4.5). Earnings per share for the year was EUR 0.11 (0.04).

The tax expenses for 2016 were EUR 0.1 million (3.1), including EUR -2.7 million of withholding taxes (1.2). The 2016 tax expenses include the India tax refund that was received during the year. The EUR 4.5 million withholding tax refund included EUR 3.4 million tax and EUR 1.1 million interest. At the end of the year EUR 3.6 million has been paid in cash to the company.

In 2016, Comptel received 21 orders of which the value exceeded EUR one million (25), of which Intelligent Data unit received five (four Data Refinary solutions and one Monetizer) and Service Orchestration received 11 (11 FlowOne solutions). Five orders were multi-solution orders across the business units. Comptel reports orders for sold projects and licenses with a minimum value of EUR 1,000,000.

The Company’s 12-month order backlog was EUR 65.7 million (66.3). This was due to several significant orders were delayed to 2017. The total order backlog was around EUR 90 million at the end of the year.

Business areas

Net sales, 10-12 10-12 Change, 1-12 1-12 Change EUR million 2016 2015 % 2016 2015 % Intelligent Data 13.1 14.6 -10.0 43.8 42.5 3.0 Service Orchestration 16.8 18.0 -6.8 56.1 55.2 1.6 Other 0.0 0.0 0.0 0.1 0.0 0.0 Total 29.9 32.6 -8.2 100.0 97.7 2.3 Operating result, EUR million Intelligent Data 2.6 3.5 -26.4 6.8 5.8 16.6 Service Orchestration 3.5 2.9 21.2 7.5 5.1 46.1 Other -0.1 -0.7 -36.0 -3.3 -2.5 -32.3 Total 5.0 5.6 -10.2 11.0 8.5 29.8

Operating result, % of net sales Intelligent Data 19.5 23.8 15.5 13.7 Service Orchestration 20.8 16.0 13.4 9.3 Other - - - - Total 16.8 17.2 11.0 8.7

In the fourth quarter both business unit net sales declined compared to previous year. The relative profitability of Intelligent Data unit decreased. For Service Orchestration, in the fourth quarter, the relative profitability improved compared to previous year.

For the full year 2016 both business unit’s net sales slightly grew. The operating result for Intelligent Data unit grew by 16.6 per cent and for Service Orchestration 46.1 per cent compared to the previous year. This growth in operating result was also reflected in the relative profitability in both business unit’s.

Net sales breakdown, 10-12 10-12 Change, 1-12 1-12 Change EUR million 2016 2015 % 2016 2015 % Project & License business 21.0 24.0 -12.8 65.1 63.3 2.9 Recurring business 9.0 8.5 5.7 34.9 34.4 1.4 Total 29.9 32.6 -8.2 100.0 97.7 2.3

In the fourth quarter the net sales of project and license business declined by 12.8 per cent compared to previous year. The support and maintenance business grew by 5.7 per cent.

For the full year 2016 the net sales of project and license business grew 2.9 per cent and support and maintenance business grew 1.4 per cent compared to previous year.

Net sales Regional breakdown, 10-12 10-12 Change, 1-12 1-12 Change, EUR million 2016 2015 % 2016 2015 % APAC 6.6 8.9 -26.1 30.1 29.6 1.6 EMEA 21.6 20.5 5.2 61.6 56.9 8.3 AMERICAS 1.8 3.2 -44.6 8.3 11.2 -26.0 Total 29.9 32.6 -8.2 100.0 97.7 2.3

In the fourth quarter, the EMEA region net sales continued to grow by 5.2 per cent compared to previous year and this was the 6th consecutive quarter that the region grew. Both the APAC and Americas regions net sales declined in the fourth quarter.

For the full year 2016 net sales grew in EMEA by 8.3 per cent compared to previous year. In APAC the net sales grew 1.6 per cent compared to the previous year. APAC net sales slowed down in the 2H of the year due to customer delays. For the full year 2016 Americas net sales declined by 26 per cent compared to the previous year.

Financial Position

31 Dec 31 Dec Change, EUR million 2016 2015 % Statement of financial position total 94.9 86.4 9.8 Liquid assets 9.2 3.0 205.0 Trade receivables, gross 40.4 42.1 -4.1 Bad debt provision -1.9 -1.6 13.7 Trade receivables, net 38.5 40.5 -4.8 Accrued income 15.8 10.0 59.0 Deferred income related to partial debiting 4.8 3.3 47.2 Interest-bearing debt 9.5 7.5 32.3 Equity ratio, per cent 58.6 52.4 11.8

The statement of the financial position on 31 Dec 2016 was EUR 94.9 million (86.4), of which liquid assets amounted to EUR 9.2 million (3.0). The operating cash flow was EUR 15.6 million (0.6) in 2016.

Trade receivables were EUR 38.5 million (40.5) at the end of the period. The accrued income was EUR 15.9 million (10.0). The deferred income related to partial debiting was EUR 5.0 million (3.3).

Comptel has a EUR 25 million credit facility arrangement consisting of a EUR 20 million revolving credit facility and a EUR 5 million overdraft capacity on current bank account. Out of this arrangement Comptel had EUR 8 million of the revolving credit facility outstanding at the end of the period and EUR 0.8 million of the overdraft facility. The credit facility is valid until July 2018.

The equity ratio was 58.7 per cent (52.4) and the gearing 0.5 per cent (11.1).

Research and Development (R&D)

10-12 10-12 Change 1-12 1-12 Change EUR million 2016 2015 % 2016 2015 % Direct R&D expenditure 5.8 7.5 -22.2 21.8 20.3 7.4 Capitalisation of R&D expenditure according to -1.7 -1.5 16.8 -6.2 -5.2 19.5 IAS 38 R&D depreciation and impairment charges 1.2 1.4 -17.6 4.9 5.5 -12.1 R&D expenditure, net 5.3 7.4 -28.9 20.5 20.6 -0.9 Direct R&D expenditure, % of net sales 19.5 22.9 21.8 20.8

Direct R&D expenditure represented 21.8 per cent (20.8) of net sales.

The key focus of Comptel’s R&D expenditure was in the further development of our existing solutions (Service Orchestration and Intelligent Data) and FWD time-based mobile data marketing solution.

Development work was focused on securing recurring revenue with competitive products, winning new markets by giving customers unique value, and by improving margins with better deployment and scalability of our products.

The FlowOne Fulfillment solution ensures unified order and service delivery flows for orchestrating services. FlowOne V is a design-led service orchestration for virtual networks. Data Refinery captures data-in-motion, turns raw data into immediate value and integrates into any data source. Monetizer is the business policy and charging solution that sets the speed to money and allows the innovation and designing of rich communication and data. Fastermind offers artificial intelligence apps, predictive analytics and machine learning capabilities for digital telcoes. In all of these areas, Comptel seeks global thought leadership in solving the business challenges of operators and digital communications service providers.

During 2016, the company continued to develop its current offering. In 2016 ten major software releases were launched in the product areas mentioned above.

Investments

10- 10-12 Change 1-12 1-12 Change EUR million 12 2015 % 2016 2015 % 2016 Gross investments in property, plant and 0.2 0.2 46.3 1.5 0.6 177.6 equipment and intangible assets

The investments comprised of devices, software and furnishings. The investments were funded through cash flow from operations.

Personnel

31 Dec 31 Dec Change, 2016 2015 % Number of employees at the end of period 837 742 12.8

1-12 1-12 Change, 2016 2015 % Average number of personnel during the 791 723 9.4 period

The number of employees increased in 2016, compared to the previous year, due to the increase in product investments and delivery capacity. In the fourth quarter, the personnel expenses were 43.3 per cent of net

sales (47.2). For the full year, personnel expenses were 46.8 per cent of net sales (47.9).

At the end of the period, 28.1 per cent (29.5) of the personnel were located in Finland, 22.7 per cent (25.5) in Malaysia, 15.5 per cent (11.3) in India, 12.2 per cent (10.2) in Bulgaria, and 21.5 per cent (23.5) in other countries where Comptel operates.

Comptel share

The closing share price of the period was EUR 2.37 (1.83). Comptel’s market value at the end of the period was EUR 258.7 million (198.1).

10- 10- Change 1-12 1-12 Change Comptel share 12 12 % 2016 2015 % 2016 2015 Shares traded, million 10,4 16,6 -37,4 48,4 41,2 17,3 Shares traded, EUR million 23,7 24,7 -3,9 92,4 52,9 74,8 Highest price, EUR 2,56 1,93 32,6 2,65 1,93 37,3 Lowest price, EUR 1,96 1,15 70,4 1,19 0,84 41,7

Of Comptel’s outstanding shares, 5.1 per cent (6.0) were nominee registered or held by foreign shareholders at the end of the period.

At the end of the period, the company held 117,129 of its own shares, which represents 0.11 per cent of the total number of shares. The total counter-book value of the shares held by the company was EUR 2,295.

Corporate Governance

Comptel Corporation’s Annual General Meeting (AGM) was held on 6 April 2016. The AGM resolved the number of Board members to be five. Mr. Pertti Ervi, Mr. Hannu Vaajoensuu, Ms. Eriikka Söderström, and Mr. Antti Vasara were re-elected as members of the Board of Directors. Mr. Thomas Berlemann was elected as a new member of the Board of Directors.

The AGM appointed Ernst & Young Oy as the company’s auditor. Mr. Mikko Järventausta is acting as the principal auditor.

The AGM resolved that a dividend of EUR 0.03 per share was paid for the year 2015.

In its meeting held after the Annual General Meeting, the Board of Directors elected Mr. Pertti Ervi as chairman and Mr. Hannu Vaajoensuu as vice chairman.

The Board of Directors decided to establish an audit committee to deal with the preparation of matters relating to the company’s financial reporting and control. The Board of Directors elected Ms. Eriikka Söderström as the chairperson of the audit committee, and Mr. Pertti Ervi and Mr. Antti Vasara as the members of the audit committee. All the members of the audit committee are independent from the company and its significant shareholders.

The AGM authorised the Board of Directors to decide on share issues amounting to a maximum of 21,400,000 new shares and on the repurchase or conveying of the company’s own shares up to a maximum number of 10,700,000 shares. The authorisations are valid until 30 June 2017. However, the authorisation to implement the company’s share-based incentive programs is valid five years from the AGM resolution.

A separate stock exchange release about the authorisations given and other decisions made by the Annual General Meeting was published on 6 April 2016.

Events after the Reporting Period

On the 9th of February Nokia announced its intention to acquire Comptel to advance its software strategy. Nokia made, recommended by the Comptel board, a cash tender offer for all the shares and option rights in Comptel.The offer price is EUR 3.04 in cash for each share in Comptel. A separate stock exchange release on this has been published on 9 February 2016.

Near-term Risks and Uncertainties

Comptel develops dynamic end-to-end solutions for leading operators globally in the telecom field. This requires Comptel to understand correctly the trends taking place in its business environment and the needs of its customers and resellers by each region. Failure to identify market conditions, address customers’ needs and develop its products in a timely way may significantly undermine the growth of Comptel’s business and its profitability.

Characteristics of Comptel’s field of industry are significant quarterly variations of net sales and profit, which are related to customers’ purchasing behaviour and the timing of major single deals.

Comptel’s business consists of deliveries of large productised IT systems, and the value of a single project may be several million euros. Therefore, the credit risk associated with a single project or an individual customer may be significant. Furthermore, some of Comptel’s customers operate in countries where the political or financial climate can be unstable which in part may increase credit risk.

Comptel operates globally, so it is exposed to risks arising from different currency positions. Exchange rate changes between the Euro, which is the company’s reporting currency, and the US Dollar, UK Pound Sterling and Malaysian Ringgit affect the company’s net sales, expenses and net profit.

The application process to prevent Comptel’s double taxation is still pending with the Ministry of Finance in Finland. However, the process between the states is very slow and the timing of change is hard to forecast. The interpretation of tax treaties may result in different views between the countries in question. This could mean that the double taxation will prevail. Comptel has also applications for return of withholding taxes in other countries but they are subject to local legal processes, which take time to get completed.

The risks and uncertainties of Comptel are described in more detail in the company’s financial statements and the Board of Directors’ report for 2016.

Business outlook and markets

Gartner forecasts operator investments will grow about 4 per cent during next few years. For Comptel the most important trend is that new investments go more to Cloud technology and software-based network solutions. This has been evidenced during the last year when we have seen that all leading operators have started building their next generation systems on software and cloud. First of these implementations have

been commissioned into trial use beside traditional systems and proved that they yield considerable savings and ease the promotion of new services for the digital society. However, the most important impact is that software networks are essential for launching new concepts like Internet of Things (IoT) and 5G.

We assume that this development is getting traction during the next years and will improve Comptel’s position when the number of managed services and volume of accumulated data will increase. We believe Comptel’s ability to successfully manage hybrid networks where old and new systems are used in parallel is a strong differentiator.

Another important trend is the huge growth in number of services and the aim to make them more personal. Operators will face a problem when they are combining the wide scope of services from large multinational giants (like Facebook, Google and Apple) and new innovate service developers. This will require improvements in network capacity, service management, scalability and management of the huge amount of data to meet the expected level of customer experience.

We see that Comptel’s role within the new network concept is to build user services from available resources and create balance between user experience and resource costs. This function is now strongly integrating with the cloud-based business systems (like sales, customer relationships, charging) and result is that we need to take a role as provider of real-time end-to-end data and control function.

Outlook:

We expect 2017 revenue to grow with double digit percentage and we expect EBIT to be between 10-15%.

Characteristically a significant part of Comptel’s operating profit and net sales is generated in the second half of the year.

Board of Directors proposal for the Disposal of Profits

The Group parent company’s distributable equity on 31 December 2016 was EUR 13,002,143 (7,692,598)

The Board of Directors proposes to the Annual General Meeting that no dividend be paid for the financial period ended on December 31st, 2016.

The Board of Directors proposes to the Annual General Meeting that the Annual General Meeting authorizes the Board of Directors to decide on a dividend payment of up to a maximum of EUR 0.04 per share in one tranche for the financial period ended on December 31st, 2016. The Board of Directors proposes that the authorization to decide on such dividend is conditional upon the Transaction Agreement entered into on 8 February 2017 by and between Nokia Corporation and Comptel Corporation (the “Transaction Agreement”) having been terminated for any reason other than consummation of said tender offer pursuant to the Transaction Agreement, meaning that the tender offer announced by Nokia Corporation on 9 February 2017 for all of the issued and outstanding shares and option rights in Comptel Corporation is unsuccessful.

The authorization to decide on payment of dividend shall be valid until the end of December 31st, 2017. Based on this authorization, the Board of Directors is entitled to decide on the dividend record date, dividend payment date and other matters required by the matter. When deciding on the possible payment of dividend, the Board of Directors shall assess the company's liquidity and financial position as required by the Companies Act.

COMPTEL CORPORATION

Board of Directors

Additional information: Mr Juhani Hintikka, President and CEO, tel. +358 9 700 1131 Mr Tom Jansson, CFO, tel. +358 40 700 1849

TABLE PART

The interim financial statements have been prepared in accordance with IAS 34, Interim Financial Reporting, as adopted by the EU. The accounting policies and methods of computation adopted in the financial statements are consistent with those of the annual financial statements for the year ended 2015.

All figures in the financial report have been rounded and consequently the sum of the individual figures can deviate from the sum figure. The interim report is unaudited.

1 Jan – 1 Jan – 1 Oct – 1 Oct – Consolidated Statement of Comprehensive Income 31 Dec 31 Dec 31 Dec 31 Dec (EUR 1,000) 2016 2015 2016 2015

Net sales 100,011 97,728 29,930 32,611

Other operating income 27 63 6 40

Materials and services -4,141 -5,546 -897 -1,556 Employee benefits -46,763 -46,764 -12,964 -15,383 Depreciation, amortisation and impairment charges -5,817 -6,756 -1,451 -1,672 Other operating expenses -32,314 -30,251 -9,588 -8,432 -89,036 -89,317 -24,899 -27,043

Operating profit/loss 11,003 8,474 5,037 5,608

Financial income 3,269 1,392 1,503 91 Financial expenses -2,365 -2,541 -264 -65 Share of results of associated companies -172 287 -171 287

Profit/loss before income taxes 11,735 7,612 6,105 5,921

Income taxes -77 -3,085 1,857 -1,958

Profit/loss for the period 11,658 4,527 7,962 3,963

Other comprehensive income:

Other comprehensive income to be reclassified to profit or loss in subsequent periods

Translation differences -934 189 45 75 Cash flow hedges -296 14 -479 -505 Income tax relating to components of other 59 -3 95 101 comprehensive income Total other comprehensive income -1 170 200 -338 -329

Total comprehensive income for the period 10,487 4,728 7,624 3,634

Profit/loss attributable to: Equity holders of the parent company 11,658 4,527 7,962 3,963

Total comprehensive income attributable to: Equity holders of the parent company 10,487 4,728 7,624 3,634

Shareholders of the parent company:

Earnings per share, EUR 0.11 0.04 0.07 0,04 Earnings per share, diluted, EUR 0.10 0.04 0.07 0,04

31 Dec 31 Dec Consolidated Statement of Financial Position (EUR 1,000) 2016 2015

Assets

Non-current assets Goodwill 2,646 2,646 Other intangible assets 14,095 12,837 Tangible assets 1,707 1,152 Investments in associates 788 960 Available-for-sale financial assets 87 87 Deferred tax assets 8,242 7,685 Other non-current receivables 570 646

28,135 26,013

Current assets Trade and other current receivables 56,977 56,930 Current tax asset 532 403 Cash and cash equivalents 9,242 3,030 66,751 60,363

Total assets 94,886 86,376

Equity and liabilities

Equity attributable to equity holders of the parent company

Share capital 2,141 2,141 Fund of invested non-restricted equity 1,975 1,698 Fair value reserve -407 -170 Translation differences -1,443 -510 Retained earnings 42,783 34,165 Total equity 45,049 37,324

Non-current liabilities Deferred tax liabilities 2,805 2,572 Non-current financial liabilities 491 92 3,296 2,664

Current liabilities Provisions 116 1,090 Current financial liabilities 8,993 7,075 Trade and other current liabilities 37,432 38,223 46,541 46,388

Total liabilities 49,837 49,052

Total equity and liabilities 94,886 86,376

Consolidated Statement of Cash Flows 1 Jan – 31 Dec 1 Jan – 31 Dec (EUR 1,000) 2016 2015

Cash flows from operating activities

Profit/loss for the period 11,658 4,527 Adjustments: Non-cash transactions or items that are not part of cash flows 6,497 7,834 from operating activities Interest and other financial expenses 250 273 Interest income -1,197 -88 Income taxes 77 3,069 Change in working capital: Change in trade and other current receivables -174 -14,240 Change in trade and other current liabilities -1,500 5,031 Change in provisions -664 -277 Interest and other financial expenses paid -250 -273 Interest received 1,197 12 Income taxes paid and tax returns received -291 -5,245

Net cash from operating activities 15,603 623

Cash flows from investing activities

Investments in tangible assets -1,417 -456 Investments in intangible assets -132 -102 Investments in development projects -6,185 -5,176 Proceeds from the sale of tangible assets 95 7 Change in other non-current receivables 29 -3

Net cash used in investing activities -7,610 -5,730

Cash flows from financing activities

Dividends paid -3,248 -2,139 Additional investment into equity 277 497 Proceeds from share options - 800 Proceeds from borrowings 33,715 27,935 Repayment of borrowings -31,924 -28,063 Change in lease liabilities 527 -243

Net cash used in financing activities -653 -1,213

Net change in cash and cash equivalents 7,339 -6,319

Cash and cash equivalents at the beginning of the period 3,030 9,352 Cash and cash equivalents at the end of the period 9,242 3,030 Change 6,212 -6,322

Effects of changes in foreign exchange rates -1,127 -2

Consolidated Statement of Changes in Equity Equity attributable to equity holders of the parent company Share Other Translation Fair value Retained EUR 1,000 Total capital reserves differences reserve earnings Equity at 2,141 401 -698 -182 31,684 33,346 31 Dec 2014 Dividends -2,139 -2,139 Shares issued 497 497 Share-based compensation 800 428 1,228 Dissolution of a subsidiary 7 7 Prior year correction * -342 -342 Total comprehensive income for 188 12 4,527 4,727 the period Equity at 2,141 1,698 -510 -170 -34,165 37,324 31 Dec 2015

Dividends -3,248 -3,248 Shares issued 277 277 Share-based compensation 492 492 Prior year correction * -283 -283 Total comprehensive income for -934 -237 11,658 10,487 the period Equity at 2,141 1,975 -1,444 -407 42,784 45,049 3 Dec 2016

*Prior year expenses were corrected directly to Retained Earnings during the reporting periods.

Notes

1. Application of new or amended standards and interpretations

Comptel has adopted the new or amended standards and interpretations, effective for the financial years beginning on or after 1 January 2016. However, those have not had an impact on the consolidated financial statements.

2. Segment information

Net sales by segment

1 Jan – 1 Jan – 1 Oct – 1 Oct – EUR 1,000 31 Dec 31 Dec 31 Dec 31 Dec 2016 2015 2016 2015

Intelligent Data 43,791 42,503 13,126 14,587 Service Orchestration 56,085 55,225 16,797 18,024 Other 135 - 7 - Group total 100,011 97,728 29,930 32,611

Operating profit/loss by segment

1 Oct – 1 Oct – 1 Jan – 1 Jan – EUR 1,000 31 Dec 31 Dec 31 Dec 2016 31 Dec 2015 2016 2015

Intelligent Data 6,769 5,808 2,554 3,469 Service Orchestration 7,492 5,128 3,496 2,884 Other -3,259 -2,462 -1,012 -745 Group operating profit/loss total 11,003 8,474 5,037 5,608

3. Income tax

Income tax expense according to the statement of comprehensive income for the period was EUR 77 thousand (EUR 3,085 thousand).

In 2006, the Board of Adjustment of the Tax Office for Major Corporations refused to accept the crediting of taxes withheld at source in taxation of 2004 and 2005.

The application process to prevent Comptel’s double taxation is still pending with the Ministry of Finance in Finland. However, the process between the states is very slow and the timing of a change is hard to forecast. The interpretation of tax treaties may result in different views between the countries in question. This could mean that the double taxation will prevail.

According to the Board of Adjustment’s decision currently in force, Comptel Corporation has expensed taxes withheld at source amounting to EUR -2,714 thousand in January – December (EUR 1,167 thousand).

4. Tangible assets

1 Jan – 1 Jan – EUR 1,000 31 Dec 2016 31 Dec 2015

Additions 1,417 456 Decreases -446 -150

5. Related party transactions

The Comptel Group have a related party relationship with its associate, the Board of Directors, the Executive Board and also with people and companies under Comptel management’s influence.

Transactions which have been entered into with related parties are as follows:

1 Jan – 1 Jan – EUR 1,000 31 Dec 2016 31 Dec 2015

Associate Other operating income 2 - Interest income 8 8

EUR 1,000 31 Dec 2016 31 Dec 2015

Associate

Non-current receivables 128 121

Remuneration to key management

Key management personnel compensation includes the employee benefits of the members of the Board of Directors and the Executive Board.

1 Jan – 31 Dec 1 Jan - 31 Dec EUR 1,000 2016 2015

Salaries and other short-term employee benefits 1,798 2,169 Share-based payments 295 725 Total 2,093 2,894

Guarantees and other commitments

EUR 1,000 31 Dec 2016 31 Dec 2015

Guarantees - 29

6. Commitments

Minimum lease payments on non-cancellable office facilities and other operating leases are payable as follows:

EUR 1,000 31 Dec 2016 31 Dec 2015

Less than one year 2,395 2,161 Between one and five years 5,722 1,218 More than five years 548 - Total 8,665 3,379

The group had no material capital commitments for the purchase of tangible assets at 31 December 2016 and 31 December 2015.

7. Contingent liabilities

EUR 1,000 31 Dec 2016 31 Dec 2015

Bank guarantees 4,136 2,727 Corporate mortgages 200 200

EUR 1,000 31 Dec 2016 31 Dec 2015

Contingent liabilities on behalf of others Guarantees - 29

8. Fair values of financial assets and liabilities

Book value Fair value Book value Fair value EUR 1,000 31.12.2016 31.12.2016 31.12.2015 31.12.2015 Financial assets Financial assets at fair value through profit or loss Forward contracts (level 2) 160 160 - - Available-for-sale financial assets (level 3)) 87 87 87 87 Non-current trade receivables 4,473 4,473 1,872 1,872 Current trade receivables 35,908 35,908 40,232 40,232 Other current receivables 3,115 3,115 7,133 7,133 Cash and cash equivalents 9,242 9,242 3,030 3,030

Financial liabilities Financial liabilities at fair value through profit or loss Forward contracts (level 2) 588 588 138 138 Trade payables and other liabilities 36,844 36,844 38,020 38,020 Non-current loans from financial institutions - - 33 33 Non-current finance lease liabilities 491 491 58 58 Current loans from financial institutions 7,973 7,973 5,044 5,056 Current bank overdraft facility 815 815 1,918 1,918 Current finance lease liabilities 205 205 112 112

9. Key figures

1 Jan – 1 Jan- Financial summary 31 Dec 31 Dec 2016 2015

Net sales, EUR 1,000 100,011 97,728 Net sales, change % 2.3 14.0 Operating profit/loss, EUR 1,000 11,003 8,474 Operating profit/loss, change % 29.8 2.0 Operating profit/loss, as % of net sales 11.0 8.7 Profit/loss before taxes, EUR 1,000 11,735 7,612 Profit/loss before taxes, as % of net sales 11.7 7.8 Return on equity, % 28.3 12.8 Return on investment, % 23.9 18.3 Equity ratio, % 58.7 52.4 Gross investments in tangible and intangible assets, EUR 1,549 558 1,0001) Gross investments in tangible and intangible assets, as % of 1.5 0.6 net sales Capitalizations according to IAS 38 to intangible assets, EUR 6,185 5,176 1,000 Research and development expenditure, EUR 1,000 21,794 20,299 Research and development expenditure, 21.8 20.8 as % of net sales Order backlog, EUR 1,000 65,717 66,344 Average number of employees during the period 791 723 Interest-bearing net liabilities, EUR 1,000 243 4,137 Gearing ratio, % 0.5 11.1

1) The figure does not include investments in development projects.

1 Jan – 1 Jan- Per share data 31 Dec 31 Dec 2016 2015

Earnings per share (EPS), EUR 0.11 0.04 EPS diluted, EUR 0.10 0.04 Equity per share, EUR 0.41 0.34 Dividend per share, EUR 0.04 0.03 Dividend per earnings, % 38,36 72.7 Effective dividend yield, % 1.7 1.6 P/E ratio 22.1 43.4

Adjusted number of shares at the end of the period 109,271,496 108,395,409

of which the number of treasury shares 117,129 118,507 Outstanding shares 109,154,367 108,276,902 Adjusted average number of shares during the period 108,685,905 107,370,551 Average number of shares, dilution included 111,798,635 109,640,245

10. Definition of key figures

Operating margin % = Operating profit/loss x100 Net sales

Profit margin (before income taxes) % = Profit/loss before taxes x100 Net sales

Return on equity % (ROE) = Profit/loss x100 Total equity (average during year)

Profit/loss before taxes + Return on investment % (ROI) = x100 financial expenses Total equity + interest bearing liabilities (average during the year)

Equity ratio % = Total equity x100 Statement of financial position total – advances received

Gross investments in Gross investments in tangible and intangible assets, = tangible and intangible x100 as % of net sales assets Net sales

Research and development expenditure, as % of net Research and development = x100 sales expenditure Net sales

Interest-bearing liabilities Gearing ratio % = – cash and cash x100 equivalents Total equity

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

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

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

Dividend per earnings % = Dividend per share x100 Earnings per share (EPS)

Effective dividend yield % = Dividend per share x100 Share closing price at end of period

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

Annex D

COMPTEL ANNOUNCES PRELIMINARY INFORMATION ABOUT 2016 FINANCIALS AND OUTLOOK FOR 2017 AND FINANCIAL TARGETS FOR STRATEGY PERIOD

Comptel Corporation Stock Exchange Release February 9, 2017, 9.05 AM EET

Comptel’s preliminary net sales for 2016 were approximately EUR 100.0 million (2015: EUR 97.7 million) and its preliminary EBIT was approximately EUR 11.0 million in 2016 (2015: EUR 8.5 million). Comparable profit, excluding the India tax accounting, was EUR 7.1 million. The reported profit was approximately EUR 11.7 million in 2016 (2015: EUR 4.5 million EUR) and earnings per share were approximately EUR 0.11 (2015: EUR 0.04). Backlog for the next 12 months was at the end of the year EUR 65.7 million (2015: EUR 66.3 million). The figures are based on preliminary results for 2016 which have not been audited.

BOARD OF DIRECTORS OUTLOOK STATEMENT FOR 2017

We expect 2017 revenue to grow with double digit percentage and we expect comparable EBIT to be between 10-15%.

COMPANY’S FINANCIAL TARGETS FOR STRATEGY PERIOD 2017-2019

Comptel’s financial goal over strategy period is to seek double digit annual growth and to increase operating profit towards 20 % at the end of the period. Additionally Comptel will continue to evaluate non-organic growth options.

Comptel Corporation will publish the financial statements for 2016 on Friday 17th of February 2017. The 2016 annual report, which includes the financial statements, will be published in week 11.

Near term risks and uncertainties

The same near-term risks and uncertainties that have been published and referred to in Comptel’s interim reports during 2016 apply also with respect to the outlook and targets expressed above.

For further information, please contact:

Juhani Hintikka, President and CEO, tel. +358 9 7001131

Distribution:

NASDAQ Helsinki

Major media www.comptel.com

About Comptel Corporation

Life is digital moments. Comptel perfects these by transforming how you serve, meet and respond to the needs of "Generation Cloud" customers.

For more information, visit www.comptel.com.

Annex E

Articles of Association of Comptel Oyj

Article 1

The Company's trade name is Comptel Oyj, in English Comptel Corporation. The domicile of the Company is Helsinki.

Article 2

The Company's line of business is to offer information technology services and products, development of information systems, purchase, sell and service of information technology equipment, offer training and consulting related to the field and engage in other comparable activities. The company may own and control shares interests and other securities as well as real estate.

Article 3

The Company has a Board of Directors, which consists of no less than three (3) and no more than six (6) ordinary members.

The term of office for members of the Board of Directors expires at the end of the Annual General Meeting of Shareholders following their election.

Article 4

The Board of Directors shall elect a Chairman and a Deputy Chairman among its members. The meeting of the Board of Directors shall be convened by the Chairman as often as the interests of the Company require it. The Board of Directors shall constitute a quorum when more than half of its members are present.

Article 5

The Chairman of the Board of Directors and the Managing Director, each alone, and the members of the Board of Directors, two together, shall have the right to represent the Company.

The Board of Directors may authorise one or more persons to represent the Company by virtue of a procuration.

Article 6

The Company has one (1) regular auditor, which shall be an audit firm authorized by the Central Chamber of Commerce.

The term of office of the auditor shall be one calendar year. The duties of the auditor shall end at the close of the next Annual General Meeting following its election.

Article 7

The financial year of the Company ends on 31 December. Financial Statements including the pertinent documents and the report of the Board of Directors shall be delivered to the auditors at least one (1) month before the Annual General Meeting of Shareholders; the auditors shall

give their report and a written auditor's report no later than two (2) weeks before the Annual General Meeting of Shareholders.

Article 8

The notice convening the General Meeting of Shareholders shall be delivered to the shareholders no later than 21 days prior the General Meeting of Shareholders, and in any event at least 9 days prior to the record date for the meeting, by publishing it in at least two newspapers, determined by the Board of Directors, or by publishing it in the internet pages of the Company, or by sending the notice by post to the shareholders to their addresses registered in the Company's register of shareholders.

To be entitled to attend the General Meeting of Shareholders, a shareholder must notify the Company of its attendance by the date specified in the notice convening the meeting, which date may not be earlier than ten days prior to the meeting.

Article 9

The Annual General Meeting of Shareholders shall be held each year before the end of June on a date decided by the Board of Directors.

At the Annual General Meeting of Shareholders the following shall be

Presented:

1) the financial statements which include consolidated financial statements, and the report of the Board of Directors; and

2) the Auditor's Report;

Decided:

3) the adoption of the financial statements, which also includes adoption of the consolidated financial statements;

4) the application of the profit shown in the balance sheet;

5) the discharge from liability of the members of the Board of Directors and the Managing Director;

6) the number of members of the Board of Directors; and

7) the remuneration to be paid to the members of the Board of Directors, and the auditors; as well as

Elected:

8) the members of the Board of Directors; and

9) the auditor.

Article 10

The Company's shares belong to the book-entry system after the registration date determined by the Board of Directors or the General Meeting of Shareholders of the Company.