Governance Risk Management

FOR INVESTORS

Comptel is an international software company specialising in telecommunications. We develop, sell and deliver software products and related services which enhance the business of telecom operators.

Risk Management

Risk management is an integral part of Comptel’s internal control. Risk management and internal control are integrated at the process level. Risk management refers to a systematic process to identify, evaluate and control risks due to external factors as well as risks arising from the Group’s own activity.

Comptel’s business is subject to various risks and uncertainties. Comptel evaluates key risks related to its business continuously and up to date information on the business and other risks related to Comptel are disclosed periodically in the annual and interim reports available  www.comptel.com/investors.

Read more of Comptel's internal control and risk management from Corporate Governance Statement 2015.

From Financial Statement Bulletin of Comptel Corporation 1 January - 31 December 2015


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 manner 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 and 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 a decision 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. Due to latest decisions by the Finnish tax authorities this risk impact on corporate effective tax rate is lower.

The risks and uncertainties of Comptel are described in more detail in the company’s financial statements and the Board of Directors’ report for 2015.

Financial Statement Bulletin of Comptel Corporation 1 January - 31 December 2015

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