Financial Report 2007

Year of Renewal, 2007 3
Online Annual Report 4
Vaisala in Short 4

Key Figures in Graphs 5
Board of Directors' Report 6

Consolidated Financial Statements (IFRS)

Consolidated Income Statement 12
Consolidated Balance Sheet 13-14
Consolidated Cash Flow 15
Statement of Changes in Shareholders' Equity 16
Notes to the Consolidated Financial Statement 17-45

Financial Ratios

Five Years in Figures 46
Financial Ratios and Shares in Figures 47
Calculation of Financial ratios 48

Parent Company Financial Statements (FAS)

Parent Company Income Statement 49
Parent Company Balance Sheet 50-51
Parent Company Cash Flow 52
Notes to the Parent Company Financial Statements 53-60
Shares and Shareholders 61
Signing of the Financial Statements 62
Auditor's Report 63
Information for Shareholders 64
Investor´s Calendar 65
Vaisala Worldwide 66-67

Year of Renewal, 2007

The Vaisala Group's net sales grew by 1.5 percent from the previous year, and were 224.1 million euros. Net sales were slightly below our expectations, due to a number of deliveries being postponed to 2008, ongoing development projects

supporting the corporate strategy and the deterioration in the exchange rates.

Net sales increased particularly in the Asia-Pacific region, whereas sales in the USA were affected by the weakening of the U.S. dollar. Net sales performed favorably in the Vaisala Instruments and Vaisala Solutions business areas, while the net sales and profit of Vaisala Measurement Systems were less than expected.

A particularly positive achievement in 2007 was the launch of the Vaisala Weather Radar and the signing of the first delivery agreements. We were also able to work more efficiently thanks to the outsourcing of our radiosonde assembly in 2006, improvements in the efficiency of our procurements and utilization of common product platforms.

Many Group-wide changes were carried out in 2007. We defined a new strategy for Vaisala; one that focuses on the customer and aims for growth. We seek growth both organically and through selective company acquisitions. We will develop especially our service and solutions business and transform the instrument business model from a product-based concept into a customer segment-based one.

We expect the market situation to remain unchanged in 2008. Instability in the world economy and currency exchange rate changes are expected to continue to affect the result. Vaisala maintained its strong market position in 2007, and aims to be the global market leader in its selected business areas also in the future. Thus, investment in the development of products and competitiveness will continue to be substantial.

A warm thank you to all Vaisala personnel for your hard work and commitment to our common goals. I would also like to thank our customers and partners for your trust in Vaisala - we constantly strive to cater for your needs even better.

Kjell Forsén President and CEO

Online Annual Report

From 2002, Vaisala has published its annual reports online only. The 2007 online report includes eg.:

CEO Kjell Forsén's video message, including his views on Vaisala's future outlook
A summary of the significant events in 2007
Customer cases from Vaisala's various business areas
Financial information, downloadable also in Excel format.

To subscribe to Vaisala press and stock exchange releases, please go to http://www.vaisala.com/newsanddownloads/ subscribetocorporatenews. Once subscribed, you will receive all Vaisala releases by e-mail either in Finnish or English.

Visit the Vaisala annual report at www.vaisala.com/annualreport

Vaisala in Short

Vaisala is a global leader in environmental and industrial measurement, providing services, products and solutions for meteorology, environmental sciences, aviation, traffic and industry. Built on science-based innovation, advanced technology and over 70 years of experience, Vaisala is committed to providing a better quality of life through environmental measurement.

Vaisala employs over 1100 professionals, and achieved net sales of EUR 224.1 million in 2007. Vaisala serves customers around the world. In 2007, operations outside Finland accounted for 96 per cent of net sales. Headquartered in Finland, Vaisala is listed on the Nordic Exchange, Helsinki.

Key Figures in Graphs

Overview

Vaisala's net sales in 2007 were slightly below the expectations stated in the beginning of the year, due to a number of deliveries being postponed to 2008. The profit was also affected by ongoing development projects supporting the corporate strategy and the deterioration of exchange rates. Net sales increased particularly in the Asia-Pacific region, whereas sales in the USA were affected by the weakening of the U.S. dollar. Net sales performed favorably in the Vaisala Instruments and Vaisala Solutions divisions, while the net sales and profit of Vaisala Measurement Systems were less than expected.

Many Group-wide changes were carried out in 2007. A new customer-oriented and growth-focused strategy was defined for Vaisala. Growth is sought both organically and through selective company acquisitions. The focal areas of development are the service and solutions business and the introduction of a customer segment-based operating concept, rather than a product-oriented one, for the instrument business.

Outlook

Instability in the world economy and currency exchange rate changes are expected to continue to affect the result. Due to the structure of Vaisala's customer base, the company's market situation is expected to remain unchanged in 2008. The net sales and operating profit for 2008 are expected to remain at the same level or be slightly higher than in the preceding year. Large seasonal variations are typical of Vaisala's business, on account of which the first quarter will probably be weaker than subsequent ones, as in previous years. The market situation is expected to remain favorable, especially in Asia-Pacific.

Vaisala aims to be the global market leader in its selected business areas in the future, too. Therefore, inputs in the development of products and competitiveness will continue to be substantial in 2008.

Market situation, net sales and order book

The Vaisala Group's net sales in 2007 developed most favorably in Asia-Pacific, increasing by 15.2 percent on the previous year to EUR 60.2 million (52.2). Net sales in Europe increased by 6.2 percent to EUR 80.7 million (76.0), while in Africa, South and Central America they fell by 26.1 percent to EUR 10.0 million (13.6). Exchange rates affected especially the North American

net sales, which decreased by 7.4 percent and, after translation into euros, totaled EUR 73.2 million (79.0). Without the effect of exchange rates, North American net sales would have grown 1.3 percent.

The goal-oriented development work and maintenance of competitiveness has helped the company to retain its strong market shares.

The value of orders received fell by 6.2 percent from the comparison year and totaled EUR 228.5 million (EUR 243.6 million in 2006, EUR 196.5 million in 2005). The end-of-year order book stood at EUR 82.3 million (77.6), of which some EUR 18 million can be recognized as sales in 2009 or later.

The Vaisala Group's net sales increased by 1.5 percent on the comparison year and totaled EUR 224.1 million (EUR 220.8 million in 2006, EUR 197.9 million in 2005). Net sales of the Vaisala Instruments division were up by 7.2 percent and those of the Vaisala Solutions division by 12.5 percent, whereas net sales of the Vaisala Measurement Systems division fell by 11.6 percent. The deterioration of exchange rates had a negative impact on the growth of net sales. If the most significant currencies with respect to Vaisala had remained at the previous year's level, Vaisala's consolidated net sales would have been up by 5.8 percent. Operations outside Finland accounted for 96 percent (97%) of net sales.

Performance and balance sheet

Operating profit for the financial year was EUR 35.3 million (38.6), or 15.8 percent of net sales. The structure of financial reporting has been revised by no longer reporting the result of currency hedging activities from the beginning of 2007 under 'Other operating income and expenses', but under 'Financial income and expenses'. 'Exchange rate gains and losses' are also reported under the same heading. The figures for the comparison year and the entire 2006 financial year have been adjusted to correspond with the current reporting structure.

Profit before taxes decreased from the comparison year by 3.0 percent to EUR 37.0 million (38.2), or 16.5 percent of net sales. Net profit for the financial year was EUR 25.8 million (26.6), down by 2.9 percent from the previous year.

The Vaisala Group's solvency ratio and liquidity remained strong. On December 31, 2007, the balance sheet total was EUR 225.6 million (EUR 219.2 million in 2006, EUR 196.9 in 2005). The Group's solvency ratio at the end of the financial year was 83 percent (81% in 2006, 81% in 2005).

Vaisala's consolidated liquid assets totaled EUR 99.2 million (EUR 87.3 million in 2006, EUR 81.4 million in 2005).

Research and development

Investments in research and development in the financial year totaled EUR 23.5 million (EUR 20.6 million in 2006, EUR 19.8 million in 2005), representing 10.5 percent of the Group's net sales. 21 percent (19/2006, 19/2005) of the Group's personnel worked in research and development. One result of the R&D activity is the weather radar, launched in autumn 2007. In addition, the company launched the upgraded AviMet aviation weather management system in February 2007. Development of common platforms for Vaisala's products was continued as well.

Capital expenditure

Gross capital expenditure totaled EUR 7.3 million (EUR 20.4 million in 2006, EUR 8.0 million in 2005).

Construction of a new enterprise resource planning (ERP) system for the entire organization commenced at the beginning of 2007. Once completed, the ERP system will replace a number of existing systems and will support Vaisala's growth strategy and business processes. The new system is intended to be introduced during the first half of 2009.

Vaisala Measurement Systems

Vaisala Measurement Systems' net sales to customers outside the Group fell below the expected level and decreased by 11.6 percent on the comparison year to EUR 82.5 million (93.2). Had the currency exchange rates remained at the previous year's level, the net sales would have been down by 7.4 percent. Operating profit dropped to EUR 12.7 million (19.8).

The total value of orders received decreased by 13.5 percent and was EUR 84.1 million (EUR 97.2 million in 2006, EUR 79.1 in 2005).

The drop in net sales was due to the decrease in sales of sounding equipment, wind profilers and weather radar signal processors. In the field, it is typical that the volume of sales changes notably from year to year. Thanks to the efficiency improvements in radiosonde production in 2006, cost savings of over EUR 2 million were achieved.

Vaisala received its first orders for weather radars during the year. The orders comprise five dual polarization radars featuring Sigmet's signal processors and application programs. The total value of these orders, when completed in full, will be about EUR 4 million. If the deliveries take place as planned, the projects will be recognized as revenue during the first two quarters of 2008.

Vaisala entered into an agreement with the Meteorological Service Canada on upgrading the country's synoptic upper-air observation network. The estimated total value of the 10-year agreement is USD 27 million, and deliveries commenced in October 2007.

Vaisala outsourced some of the Measurement Systems' production and reorganized its North American research and product development operations. The financial effects of this outsourcing are estimated to improve the division's annual profit by some EUR 2 million beginning from the 2008 financial year. As part of these measures, Vaisala had to let 14 persons go in the USA. Due to this measure, an expense of EUR 0.3 million has been recognized in the 2007 financial statements.

Vaisala Instruments

The business of the Vaisala Instruments division exceeded expectations in 2007. The division's net sales to customers outside the Group increased by 9.5 percent on the comparison year to EUR 70.3 million (64.3). Had the currency exchange rates remained at the previous year's level, the increase in net sales would have been 15.3 percent.

Total net sales increased by 7.2 percent and were EUR 80.8 million (75.3).

The operating profit increased to EUR 19.9 million (19.5). Despite the weakening of the U.S. dollar and the Japanese yen, the operating profit remained at an excellent level.

The value of orders from external customers increased to some extent from the comparison year and was EUR 70.4 million (EUR 68.2 million in 2006, EUR 60.2 million in 2005).

Board of Directors' Report 2007

The competitive situation has remained tight in all product market areas for industrial measurement devices.

Vaisala Solutions

Vaisala Solutions' net sales to customers outside the Group increased by 12.6 percent on the comparison year and totaled EUR 71.3 million (63.3). Due to expenses arising from development projects, the division's operating profit remained at the level of the previous year and was EUR 5.3 million (5.4). Had the currency exchange rates remained at the previous year's level, the net sales would have been up by 15.6 percent.

The total value of orders received decreased by 5.2 percent and was EUR 74.0 million (EUR 78.1 million in 2006, EUR 57.2 in 2005).

Demand for the comprehensive solutions offered by Vaisala Solutions remained at a good level throughout the year. As a result, net sales and the order book increased over the previous year, and the profit and profitability targets were reached.

Vaisala signed an agreement with a customer on deliveries of fixed-installation automatic weather stations for aviation weather observations. The agreement covers weather station deliveries and support services and includes an extension option until the end of 2012. The estimated value of the agreement exceeds USD 10 million.

Personnel

The average number of employees in the Vaisala Group during the financial year was 1,113 (1,069 in 2006, 1,062 in 2005). Some 39 percent of the personnel was based outside Finland (40% in 2006, 38% in 2005). About 21 percent of the personnel worked in research and development (19% in 2006, 19% in 2005).

Salaries paid by the company are based on local collective and individual agreements, personal performance and the demand level of each job. The base salaries are supplemented by resultsbased bonus systems, which cover all Vaisala personnel. The total sum of salaries paid in 2007 was EUR 57.2 million (57.3 million in 2006, 51.9 million in 2005).

Changes in Vaisala Corporation's management

The following appointments were made in Vaisala's management:

Matti Ervasti, born in 1955, M.Sc. (Chem.), was appointed Sales and Marketing Director as from May 15, 2007; Ari Meskanen, born in 1963, M.Sc. (Eng.), eMBA, was appointed Chief Technology Officer as from May 1, 2007; Scott Sternberg, born in 1964, M.Sc. (Phys.), was appointed Director of Vaisala Services as from June 1, 2007; Antti Ritvos, born in 1953, M.Sc. (Eng, Tech Physics), BA (Physics and Astronomy) was appointed Director of Vaisala Solutions as from November 15, 2007; Lauri Rintanen, born in 1955, M.Sc. (Eng.) was appointed Director of Operations as from November 1, 2007; Tapio Engström, born in 1963, M.Sc. (Accounting), was appointed Director of Business Development as from November 1, 2007; and Helena Marjaranta, born in 1963, M.A. (English philology, Communication and Organizational Psychology) was appointed Communications Director as from December 1, 2007.

All the above-mentioned persons are members of Vaisala's Corporate Management Group.

Risk management

Organization of risk management

Vaisala has a risk management policy that has been approved by the Board of Directors and that covers strategic, operating and financial risks relating to the company. Vaisala's Corporate Management Group regularly assesses risk management policies, and the scope, adequacy and focus areas of related practices. The policy aims at ensuring the safety of personnel and the company's operations and products and the continuity of operations. The policy also covers intellectual capital, corporate image and brand protection. An appropriate and up-to-date risk concept is integrated in decision-making.

Near-term risks and uncertainties

Vaisala regularly assesses risks and uncertainties relating to its business. To increase the transparency of its activities, Vaisala has further developed its reporting relating to risks. The effort is to describe risks and uncertainties in more detail.

The usual risks related to international business affect Vaisala's operating environment. The most significant of these are risks relating to changes in the global economy and hence in purchasing activities, currency exchange rates (with particular respect to the U.S. dollar), supply network management and production activities. Vaisala uses subcontractors. Significant changes in subcontractor relations, activities or operating environment may have an impact on Vaisala's business. Vaisala monitors these risks and prepares for them in accordance with the company's risk management policy.

Group-level insurance programs and risk-management methods have been established to deal with manageable operating risks. The insurance programs cover risks relating to property damage, business interruption, different liabilities, transport and business travel.

The company is currently introducing some major organizational changes in support of its new strategy. Substantial efforts are also being carried out regarding the sales organization, research and development, and new enterprise resource planning system development. These efforts may constitute a shortterm risk regarding Vaisala's net sales and result.

The net sales and operating profit estimates are based on the assumption that the order intake will remain at the current level and deliveries will be completed as planned.

Vaisala's share

As at the end of 2007, the company's Board of Directors had no valid authorizations for increasing the share capital or issuing convertible bonds or bonds with warrants.

On December 31, 2006, the average price of Vaisala's A share in the OMX Nordic Exchange Helsinki was EUR 33.07, and on December 31, 2007 the share price was EUR 35.60. The highest quotation during the financial year was EUR 41.99 and the lowest EUR 29.43.

A total of 5,595,292 Vaisala shares were traded in the stock exchange during the financial year.

Vaisala has 18,218,364 shares, of which 3,407,385 are K shares and 14,810,979 are A shares. The shares have a counter book value of EUR 0.42. The K shares and A shares are differentiated by the fact that each K shares entitles its owner to 20 votes at a General Meeting of Shareholders while each A share entitles its owner to 1 vote. The A shares represent 81.3 percent of the

total number of shares and 17.9 percent of the total votes. The K shares represent 18.7 percent of the total number of shares and 82.1 percent of the total votes.

Vaisala's main shareholders are listed on the company's website and in the Notes to the Financial Statements.

The shares give equal rights to dividends. According to the company's Articles of Association, the maximum number of shares is 68,490,017 and Vaisala's maximum share capital is EUR 28.8 million. All issued shares have been fully paid for. The shares have no consent or redemption clauses attached to them, apart from those shares mentioned above that are part of the sharebased incentive system for Vaisala's management.

According to the Articles of Association, a K share can be converted into an A share in the manner specified in the Articles.

Treasury shares and parent company shares

At year's end, the company held a total of 9,150 Vaisala A shares, which represented 0.05 percent of the share capital and 0.01 percent of the votes. The consideration paid for these shares was EUR 251,898.31.

Board of Directors

Members of the Board

In accordance with Vaisala Corporation's Articles of Association, the company's Board of Directors comprises at least three (3) and at most six (6) members. According to current practice, the Board comprises six members. All Board members are appointed by a General Meeting of Shareholders. The Board elects a Chairman and a Vice Chairman from among its members.

Term of office of members of the Board

In deviation from recommendation no. 12 of the Corporate Governance Recommendation for Listed Companies, the term of office of members of the Board is not one year. Instead, the term of office is 3 years, as stipulated in the Articles of Association. The term of office begins after the General Meeting of Shareholders at which the member is elected, and ends at the close of the third Annual General Meeting that follows the member's election.

President and CEO

Vaisala's President and CEO is appointed by the Board. The President and CEO manages the company in accordance with the instructions and orders given by the Board, and informs the Board of the development of the company's business and financial situation. The President and CEO is also responsible for arranging the company's management.

Events relating to the permanent group of insiders No loans were granted to any of the persons belonging to the permanent group of insiders, and no contingent liabilities were made on their behalf.

Group structure

The company has regional offices in Canada, China, Malaysia and United Arab Emirates. The addresses and contact details of the regional offices are available on Vaisala's website.

Environment

Vaisala takes environmental matters to heart and attends to them with care. Vaisala wants to be involved in establishing a sound foundation for better quality of life, environmental protection, safety and productivity.

Positive environmental aspects for customers

Vaisala's environmental measurement products and systems provide the company's customers with a means of favorably influencing their environment. Due to the climate change, different weather phenomena are observed and measured more extensively and accurately than before. Empowered by Vaisala's environmental measurement equipment and weather observation systems, the company's customers have the tools for reducing the environmental load from energy consumption in buildings and various industrial processes.

Vaisala measurement instruments for industry can be used to improve product quality and production process efficiency, optimize energy consumption, and enhance the safety and well-being of people. In many manufacturing processes, it is of utmost importance to accurately measure and control humidity, so that product quality can be kept high and energy consumption low.

Carbon dioxide content is a good indicator of indoor air quality and ventilation efficiency. Indoor air can be kept fresh without wasting energy if ventilation is controlled by carbon dioxide

measuring instruments. Correspondingly, indoor air temperature is controlled by temperature transmitters and humidity by humidity transmitters.

Vaisala is a signatory to the voluntary energy efficiency agreement

Vaisala has entered the voluntary energy efficiency agreement of the Federation of Finnish Technology Industries as a signatory. The agreement aims at improving energy efficiency, generating cost savings, and countering climate change. Being a party to the agreement, Vaisala gains information and a framework for complementing the company's own related measures.

Collaborating in environmental matters in 2007 Vaisala studied the environmental effects of its measurement devices by means of lifecycle analyses in a collaboration project entitled ELE-DFE together with the companies ABB Oy and Helvar Oy Ab and the Tampere University of Technology. The Tuotekehitys Oy Tamlink company and Tekes, the Finnish Funding Agency for Technology and Innovation, also participated in the project. The results of lifecycle analyses are harnessed in the design of new products. The development work aims at minimizing the environmental effects of the company's products throughout their lifecycles.

Vaisala was involved in the activity of the environmental committee of the Federation of Finnish Technology Industries. The committee observes environmental legislation relevant to companies and promotes collaboration in environmental matters between corporate entities, authorities and environmental experts.

Vaisala complies with generally accepted international standards and requirements. The Group employs a certified environmental system based on the SFS-EN ISO 14001 standard. The system covers all Vaisala sites and products. The level of waste management and materials recycling is high at Vaisala's manufacturing sites and places of operation. The Inspecta Oy company has been Vaisala's partner in the certification.

Active involvement in the scientific community Vaisala is involved in active discussion with different stakeholders, promoting advancement in science, particularly the development of environmental measurement. Vaisala collaborates in several projects with leading research institutes in the field, such as NOAA (the National Oceanic and Atmospheric Administration, USA), Colorado State University, VTT (Techni-

Board of Directors' Report 2007

cal Research Centre of Finland) and the Helsinki University of Technology, Finland.

Vaisala's representatives participate on the Board of the Federation of Finnish Technology Industries and on various of its committees, such as the Environmental Committee. Vaisala also closely collaborates with a number of meteorological authorities around the world and takes part in the activity of the UN World Meteorological Organization (WMO). During the year, Vaisala again granted research scholarships to universities, students and researchers in both the United States and Finland.

Proposals to the Annual General Meeting

The Board of Directors' proposal for the distribution of profit

According to the financial statements as per December 31, 2007, the parent company's distributable funds amount to EUR 130,992,510.76, of which the profit for the financial year is EUR 22,683,835.80.

The Board proposes to the Annual General Meeting that the distributable funds be used as follows:

- A dividend of EUR 0.85 per share be paid,
totaling	EUR 15,477,831.90
- To be retained in shareholders' equity	EUR 115,514,678.86
Total	EUR 130,992,510.76

No material changes have occurred in the company's financial situation since the end of the financial year. The company's liquidity remains good and, in the view of the Board, is not threatened by the proposed profit distribution.

The record date for dividend payment has been set at April 1, 2008, and it is proposed that the dividend be paid on April 8, 2008.

The terms of office of Board members Mikko Niinivaara and Raimo Voipio will end at the Annual General Meeting. Shareholders representing more than 10 percent of all the votes in the company have announced their intention to propose to Vaisala's Annual General Meeting, to be held on March 27, 2008, that the number of Board members will be six. The Board proposes that Mikko Niinivaara and Raimo Voipio be re-elected.

The Board proposes that PricewaterhouseCoopers Oy, Authorized Public Accountants, and Hannu Pellinen, APA, be reelected as Vaisala's auditor.

The proposed persons and auditor have given their consent to their re-election.

Events after the financial year

Vaisala has entered into an agreement with a long-standing customer on the delivery of upper air observation products. The agreement is substantial in scope. The order has a value of EUR 8.3 million and comprises radiosondes and supplies. The deliveries will take place during 2008.

Vantaa, Finland, February 13, 2008,

Vaisala Corporation Board of Directors

Consolidated Income Statement

EUR Million	Note		1.1. -31.12.2007		1.1. -31.12.2006
Net sales	2, 3	224.1		220.8
Cost of production and procurement	7	-99.6		-100.1
Gross profit		124.5	55.6%	120.8	54.7%
Other operating income	6	0.0		0.1
Cost of sales and marketing	7	-46.2		-42.1
Development costs	7	-23.5		-20.6
Other administrative costs	7	-19.5		-19.6
Operating profit		35.3	15.8%	38.6	18.0%
Financial income and expenses	10	1.6		-0.5
Share of results of associated companies	16	0.0		0.0
Profit before tax		37.0	16.5%	38.2	17.3%
Income taxes	11	-11.2		-11.6
Profit after tax		25.8	11.5%	26.6	12.0%
Attributable to
Equity holders of the parent		25.8		26.6
Earnings per share for profit attributable to the equity holders of the parent
Basic earnings per share, €	12	1.42		1.46
Diluted earnigns per share, €		1.42		1.46

Consolidated Balance Sheet

EUR Million	Note	1.1. -31.12.2007	1.1. -31.12.2006
Assets
Non-current assets
Intangible assets	14	17.8	21.0
Tangible assets	15	33.1	33.5
Investments in associates	16	0.5	0.4
Other financial assets	17	0.0	0.2
Long-term receivables	18	0.1	0.1
Deferred tax assets	11	4.7 5.3	5.2 5.9

Current assets
Inventories	19	16.1	17.6
Trade and other receivables	20	53.4	53.9
Accrued income tax receivables		0.5	0.0
Financial assets recognised at fair value
through profit and loss	21	42.6	41.2

Cash and cash equivalents	22	56.6	46.1

Total assets		225.6	219.2

Consolidated Balance Sheet

EUR Million	Note	1.1. -31.12.2007	1.1. -31.12.2006
Shareholders' equity and liabilities
Shareholders' equity
Equity attributable to equity holders of the parent
Share capital		7.7	7.7
Share premium reserve		16.6	16.6
Reserve fund		0.1	0.1
Own shares		-0.3	-0.3
Translation differences		-5.4	-1.6
Profit from previous years		131.8	120.7
Profit for the financial year		25.8	26.6
		176.3	169.8
Total equity	23	176.3	169.8

Liabilities

Long-term liabilities
Retirement benefit obligations	25	0.3	0.3
Interest-bearing liabilities	24	0.2	0.3
Provisions	26	0.2	0.0
Deferred tax liabilities	11	0.4	0.4
		1.1	1.1
Current liabilities
Current portion of long-term borrowings	24	0.1	0.3
Current interest-bearing liabilities	24	0.7	0.3
Advances received		12.0	9.6
Accrued income tax payables		2.5	2.6
Trade and other payables	27	32.9	35.6
		48.1	48.4
Total shareholders' equity and liabilities		225.6	219.2

Consolidated Cash Flow Statement

EUR Million	Note	1.1. -31.12.2007	1.1. -31.12.2006
Cash flows from operating activities
Cash receipts from customers		228.2	220.3
Other income from business operations		0.0	0.0
Cash paid to suppliers and employees		-184.0	-173.7
Cash flow from business operations before financial items and taxes		44.1	46.6
Interest received		3.4	2.2
Interest paid		-0.4	-0.1
Other financial items. net		-0.4	-3.3
Dividend received from business operations		0.0	0.0
Direct tax paid		-10.8	-9.7
Cash flow from business operations (A)		36.0	35.7
Cash flow from investing activities
Investments in tangible and intangible assets		-7.4	-7.2
Acquisition of subsidiary, net of cash acquired	4	0.0	-15.7
Proceeds from sale of fixed assets		0.0	0.1
Loans granted		0.0	0.0
Other investments		0.0	-0.1
Cash flow from investing activities (B)		-7.4	-22.9
Cash flow from financing activities
Equity issue		0.0	6.1
Repayment of short-term loans		-0.2	-0.5
Dividend paid and other distribution of profit		-15.5	-13.4
Cash flow from financing activities (C)		-15.7	-7.8
Change in liquid funds (A+B+C) increase (+) / decrease (-)		12.9	5.0
Liquid funds at beginning of period		87.3	81.4
Foreign exchange effect on cash		-1.0	0.9
Net increase in cash and cash equivalents		12.9	5.0
Liquid funds at end of period	21, 22	99.2	87.3

Consolidated Statement of Changes in Shareholders' Equity

December 31, 2007 EUR Million	Share capital	Share issue	Share premium reserve	Reserve fund	Own shares	Translation differences	Retained earnings	Total equity
Balance at December 31. 2005	7.4	5.4	5.3	0.1	0.0	1.9	134.1	154.3

Translation differences				0.0		-3.5		-3.5
Net profit for the period							26.6	26.6
Dividend paid							-13.4	-13.4
Stock options exercised	0.2	-5.4	11.3					6.1
Own shares acquired					-1.0			-1.0
Own shares transferred					0.7			0.7

Balance at December 31. 2006	7.7	0.0	16.6	0.1	-0.3	-1.6	147.3	169.8
Translation differences				0.0		-3.8		-3.8
Transferred from retained
earnings to reserve fund				0.0			0.0	0.0
Net profit for the period							25.8	25.8
Dividend paid							-15.5	-15.5

Balance at December 31.12.2007	7.7	0.0	16.6	0.1	-0.3	-5.4	157.6	176.3

1.1. Accounting Principles for the Consolidated Financial Statements

The Group's parent company, Vaisala Oyj, is a Finnish public limited company established under Finnish law, its domicile is Vantaa and its registered address in Vanha Nurmijärventie 21, FI-01670 Vantaa (P.O. Box 26, FI-00421 Helsinki). The company's Business ID is 0124416-2. Vaisala has offices and business operations in Finland, North America, France, the UK, Germany, China, Sweden, Malaysia, Japan and Australia. Vaisala's consolidated financial statements have been prepared according to the International Financial Reporting Standards (IFRS) and in their preparation all the obligatory IAS and IFRS standards as well as the SIC and IFRIC interpretations in effect on 31 December 2007 have been followed. By international financial statement standards is meant standards approved for application in the EU, and interpretations issued about them, according to the procedure prescribed in Finnish law and provisions enacted thereon in EU Regulation (EC) No. 1606/2002. The notes to the consolidated financial statements are also in accordance with Finnish accounting and corporate law.

Vaisala Oyj is an international technology group which develops and manufactures electronic measuring systems and instruments. The areas of application of these products are meteorology, the environmental sciences, transport and industry. Vaisala's products create the basis for better quality of life, cost savings, environmental protection, security and efficiency.

Segment reporting

Segment information is presented in accordance with the Group's business and geographical segment divisions. The Group's primary segment reporting format is according to business segments. Business segments are based on the Group's internal organisational structure and internal financial reporting.

The business segments consist of asset categories and business operations whose product- or service-related risks and profitability differ from other business segments. The products or services of geographical segments are produced in a financial environment whose risks and profitability differ from the risks and profitability of the financial environment of other geographical segments.

Pricing between segments takes place at the fair market price.

The assets and liabilities of segments are business items which the segments use in their business operations or which on sensible grounds are attributable to the segments. Other activity includes the development units of new business operations, unattributed tax and financial items as well as other items common to the whole company. Investments consist of additions to tangible fixed assets and intangible assets, which are used in more than one financial year.

Vaisala's three business divisions are Vaisala Measurement Systems, Vaisala Solutions and Vaisala Instruments.

Vaisala Measurement Systems develops, manufactures and markets systems and instruments for observing the weather in the upper atmosphere as well as wind profilers, weather radars, weather radar signal, data processing and display systems and lightning detection systems that make extensive use of remote sensing technology. The division also offers maintenance services for these systems and instruments.

Vaisala Solutions develops, manufactures and markets weather observation instruments, which are used to observe weather conditions on or near the Earth's surface. The division also offers maintenance service for these instruments.

Vaisala Instruments develops, manufactures and markets instruments for the measurement of relative humidity, dewpoint, barometric pressure, carbon dioxide, wind, visibility, cloud height and prevailing weather conditions. The division also offers its customers maintenance services for measuring instruments.

Accounting Principles for the Consolidated Financial Statements (IFRS)

During 2005 the Group adopted the international IFRS financial reporting practice. The transition date was 1 January 2004..

Financial statement data are presented in millions of euros and they are based on original acquisition costs if not otherwise stated in the accounting principles outlined below.

The preparation of financial statements in accordance with IFRS standards requires Group management to make certain estimates and to exercise discretion in applying the accounting principles. Information about the discretion exercised by management in applying the accounting principles followed by the Group and that which has most impact on the figures

presented in the financial statements has been presented in the item 'Accounting principles that require management discretion and main uncertainty factors relating to estimates'.

Principles of consolidation

Subsidiaries

The consolidated financial statements include the parent company Vaisala Oyj and all subsidiaries in which it directly or indirectly owns more than 50% of the votes or in which the parent company otherwise exercises control. The existence of potential voting rights has been taken into account when assessing the terms of control when instruments conferring entitlement to potential control are presently exercisable. Subsidiaries acquired or founded during the financial period are consolidated from the date on which the Group has acquired control and are no longer consolidated from the date that control ceases. Subsidiaries acquired before 1 January 2004 are consolidated at original acquisition cost, according to the exception mentioned in IFRS 1. Subsidiaries acquired on or after 1 January 2004 are consolidated according to the IFRS 3 standard Business Combinations.

The consolidated financial statements have been prepared using the acquisition cost method. Intra-Group transactions, unrealised margins on internal deliveries, internal receivables and liabilities, and the Group's internal distribution of profit are eliminated. Unrealised losses on intra-Group transactions are also eliminated unless costs are not recoverable or the loss results from an impairment. The consolidated financial statements are prepared applying consistent accounting principles to the same transactions and other events which are implemented under the same conditions. Minority interests have been separated from subsidiaries' results for the financial year and have been presented as a separate item in the Group's shareholders' equity.

Associated companies

The share of profits or losses of associated companies, i.e. companies of which Vaisala owns between 20% and 50% and over which it has significant influence, are included in the consolidated financial statements using the equity method. If Vaisala's share of an associated company's losses exceeds the book value of the investment, the investment is entered in the balance sheet at zero value and further losses are not recognised unless the Group has incurred obligations on behalf of the associated company. Unrealised gains on transactions between the Group and its associated companies have been eliminated to the

extent of the Group's interest in the associated companies. The Group's investment in associated companies includes goodwill on acquisition.

The Group's share of associated companies' results is presented in the income statement as a separate item after 'financial income and expenses'. Investments in associated companies are originally entered into the accounts at their acquisition cost and the book value increased or decreased by the share of postacquisition profits or losses. Distribution of profit received from an investment reduces the book value of the investment.

Foreign currency items

Transactions in foreign currencies are recognised at the rates of exchange on the date of transaction. Receivables and payables in foreign currency have been valued at the exchange rates quoted by the European Central Bank on the closing date. Exchange rate differences resulting from the settlement of monetary items or from the presentation of items in the financial statements at different exchange rates from which they were originally recognised during the financial period, or presented in the previous financial statements, are recognised as income or expenses in the income statement group 'financial income and expenses' in the financial period in which they arise.

Items relating to the result and financial position of each entity of the Group are measured using the currency which is the main currency of each entity's operating environment. Balance sheets of Group companies outside the euro zone have been translated into euros using the official mid-market exchange rates of the European Central Bank on the closing date. In translating income statements, mid-market exchange rates have been used. Exchange rate differences resulting from the translation of income statement items at mid-market exchange rates and from the translation of balance sheet items at exchange rates on the closing date have been recognised as a separate item in shareholders' equity. Translation gains and losses which arose in the elimination of the shareholders' equity of subsidiaries have been recognised as a separate item in shareholders' equity. When a foreign subsidiary or associated company is sold, the accumulated translation difference is recognised in the income statement as part of the gain or loss on the sale.

Goodwill or fair value adjustments arising on the acquisition of an independent foreign entity are treated as that entity's foreign currency assets and liabilities and are translated at the closing balance sheet rate.

Tangible fixed assets

The office and factory premises at Vantaa were revalued by a total of EUR 5.7 million in the years 1981-1988. These revaluations have been reversed in connection with the adoption of IFRS and in the valuation of tangible assets the values have been restored in all respects to original acquisition cost.

Fixed assets comprise mainly land and buildings as well as machinery and equipment. The balance sheet values are based on original acquisition cost less accumulated depreciation and amortisation as well as possible impairment losses. The cost of self-constructed assets includes materials and direct work as well as a proportion of overhead costs attributable to construction work. If a fixed asset consists of several parts which have useful lives of different lengths, the parts are treated as separate assets. Expenditures that arise later to an asset or part thereof are capitalised only when they increase the asset's economic benefit to the company. All other expenditures, such as normal repair and maintenance, are charged to the income statement during the financial period in which they are incurred. Interest expenses are not included in the acquisition cost of fixed assets.

Depreciation is calculated using the straight-line method and is based on the estimated useful life of the asset. Land is not depreciated. Estimated useful lives for various assets are:

Buildings and structures	5 – 40 years
Machinery and equipment	3 – 10 years
Other tangible assets	5 – 15 years

The residual value, depreciation method and useful life of assets are checked in connection with each financial statement and if necessary adjusted to reflect changes in the expectation of economic benefit. Gains and losses on disposals are determined by comparing the disposal proceeds with the carrying amount and are included in the operating profit.

Public grants received for fixed asset investments are recognised as a reduction in the carrying amounts of tangible fixed assets. Grants are recognised in the form of smaller depreciations during the useful life of the asset.

Depreciation of a tangible fixed asset is discontinued when the tangible fixed asset is classified as being for sale in accordance with the IFRS 5 standard Non-Current Assets Held for Sale and Discontinued Operations.

Intangible assets

Goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group's share of the net assets of the acquired subsidiary/associated company at the date of acquisition. Goodwill is calculated in the currency of the operating environment of the acquired entity. If the acquisition cost is lower than the value of the acquired subsidiary's net asset value the difference is entered directly into the income statement. According to the relief permitted by the IFRS standard, company acquisitions before the IFRS transition date have not been adjusted according to IFRS principles; they have been left at the values according to Finnish accounting practice. In acquisitions that took place before the IFRS transition date, the acquisition cost has been attributed where applicable to the fixed assets of the acquired subsidiary and amortised according to plan over an estimated useful life of 5 years.

Goodwill is not amortised, rather it is tested annually for any impairment. For this purpose goodwill has been attributed to cash generating units. Goodwill is valued at the original acquisition cost and in terms of subsidiaries acquired before 1 January 2004 at assumed acquisition cost less impairments.

Other intangible assets

Other intangible assets are e.g. patents and trademarks as well as software licences. They are valued at their original acquisition cost and amortised using the straight-line method over their useful life. Intangible assets that have an indefinite useful life are not amortised, rather they are tested for impairment annually. Intangible assets of the acquired subsidiaries are valued at their fair values at the date of acquisition.

Estimated useful lives for intangible assets are:
Intangible rights	at most 5 years
Other tangible assets	at most 10 years
Software	3-5 years

Research and development expenditure

Research and development expenditures have been recognised as expenses in the financial period in which they were incurred, except for machinery and equipment acquired for research and development use, which are amortised according to plan over 5 years. Costs relating to the development of new products and processes are not capitalised because the future earnings obtained from them are only assured when the products come

to market. According to IAS 38 an intangible asset is entered in the balance sheet only when it is probable that the company will derive financial benefit from the asset. Moreover, it is typical of the industry that it not possible to distinguish the research stage of an internal project that aims to create an asset from its development stage.

Borrowing costs

Borrowing costs are recognised as an expense for the period during which they arise.

Inventories

Inventories are presented at the lower of acquisition cost and net realisable value. Net realisable value is the estimated selling price in the ordinary course of business, less the costs of completion and selling expenses. The cost of finished goods and work in progress comprises raw materials, direct labour costs, other direct costs and an appropriate proportion of variable and fixed production overheads based on normal operating capacity. In determining the acquisition cost, standard cost accounting is applied and standard costs are adjusted regularly and changed if necessary according to the situation at the time in question. Acquisition cost is determined using the weighted average method, whereby the cost is determined as the weighted average of similar inventory items which were held at the beginning of the financial period and those bought or produced during the financial period.

Lease agreements

The Group is the lessee

Lease agreements of tangible assets where the Group has a substantial part of the risks and rewards of ownership are classified as finance leases. Finance leases are entered into the balance sheet's tangible fixed assets at the start of the lease term at the lower of the fair value of the leased property and the present value of the minimum lease payments. The asset acquired under a finance lease is depreciated over the shorter of the asset's useful life and the lease term. Lease payments are allocated between the liability and finance charges so as to achieve a constant interest rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in interest-bearing liabilities.

Lease agreements where the lessor retains a significant portion of the risks and rewards of ownership are treated as other leases. Payments made under other leases are charged to the income statement on a straight-line basis over the period of the lease.

The Group is the lessor

Leases of Group assets where a significant portion of the risks and rewards of ownership are transferred to the lessee are classified as finance leases and the present value of the lease payments is recognised in the balance sheet as a receivable. The difference between the gross receivable and the present value of the receivable is recognised as unearned finance income. Finance income from a finance lease is determined so that the remaining net investment produces a constant periodic rate of return over the term of the lease.

Assets leased out under leases other than finance leases are included in tangible fixed assets in the balance sheet. They are depreciated over their useful lives on a basis consistent with similar owned tangible fixed assets. Rental income is recognised in the balance sheet on a straight-line basis over the lease term.

Impairment

On every closing date the Group reviews asset items for any indication of impairment losses. If there are such indications, the amount recoverable from the said asset item is assessed. The recoverable amount is also assessed annually for the following asset items irrespective of whether there are indications of impairment: goodwill, intangible assets which have an indefinite useful life as well as incomplete intangible assets.

The recoverable amount is the higher of the asset item's fair value less the cost arising from disposal and its value in use. When determining value in use, the expected future cash flows are discounted based on their present values at discount interest rates which reflect the average capital cost before taxes of the country and business sector in question (WACC = weighted average cost of capital). The special risks of the assets in question are also taken into account in the discount interest rates. The recoverable amount of financial assets is either the fair value or the present value of expected future cash flows discounted at the original effective interest rate. Short-term receivables are not discounted. In terms of individual asset items which do not independently generate future cash flows, the recoverable amount is determined for the cash generating unit to which the said asset item belongs.

An impairment loss is recognised in the income statement when the carrying amount is greater than the recoverable amount. The impairment loss is reversed if a change in conditions has occurred and the recoverable amount of the asset has changed since the date when the impairment loss was recognised. The impairment loss is not reversed, however, by more

than that which the carrying amount of the asset (less depreciation) would be without the recognition of the impairment loss. Impairment losses recognised for goodwill are not reversed under any circumstances.

Trade and other receivables

Trade and other receivables are recognised at their anticipated realisable value, which is the original invoicing value less the estimated impairment provision of these receivables. An impairment provision for trade receivables is made when there are good grounds to expect that the Group will not receive all its receivables on original terms.

Financial assets and financial liabilities The IAS 32 and IAS 39 standards relating to financial instruments have been applied as of 1 January 2005.

IAS 39 classifies a group's financial assets into the following categories: financial assets measured at fair value through profit and loss, held-to-maturity investments, loans and receivables, and available-for-sale financial assets. Categorisation is made on the basis of the purpose for which the financial assets were acquired and they are categorised in connection with the original acquisition. Transaction costs have been included in the original carrying amount of the financial assets when the item in question is not valued at fair value through profit and loss. All purchases and sales of financial assets are recognised on the trade date.

Derecognition of financial assets takes place when the Group has lost a contractual right to receive the cash flows or when it has transferred substantially the risks and rewards outside the Group. On every closing date the Group assesses whether there is objective evidence that the value of a financial asset item or group of items asset items has been impaired. If such evidence exists, the impairment is recognised in the income statement item financial expenses.

Financial assets held for trading purposes such as derivative instruments to which the Group does not apply hedge accounting under IAS 39 as well as income fund investments consisting of the short-term investment of liquid assets have been categorised as financial assets recognised at fair value through profit and loss. The fair value of income fund investments has been determined based on price quotations published in an active market, namely the bid quotations on the closing date. Realised and unrealised gains and losses arising from changes in fair value are recognised in the income statement in the period in which they arise. Financial assets held for trading as

well as those maturing within 12 months are included in current assets.

Held-to-maturity investments are financial assets not belonging to derivative assets whose payments are fixed and quantifiable and which mature on a specified date and which the Group has the firm intent and ability to hold to maturity. They are valued at amortised cost and they include either short-term or longterm assets.

Loans and other receivables are assets not belonging to derivative assets whose payments are fixed and quantifiable and which are not quoted on an active market and which the company does not hold for trading purposes. This category includes Group financial assets which have arisen through the transfer of money, goods or services to debtors. They are valued at amortised cost and they include short- and long-term financial assets, the latter if they mature after more than 12 months. If there are indications of value impairment, the carrying amount is estimated and reduced immediately to correspond with the recoverable amount.

Available-for-sale financial assets are assets not belonging to derivative assets which are expressly allocated to this category or which do not fall into one of the other categories. These include long-term assets except if the intent is to keep them for less than 12 months from the closing date, in which case they are included in current assets. The company does not, however, have any such items at present.

Cash and cash equivalents are carried in the balance sheet at original cost. Cash and cash equivalents comprise cash on hand, deposits held at call with banks, other short-term, highly liquid investments with original maturities of three months or less and which consist mainly of the short-term investment of cash assets. Bank overdrafts are included within current interest-bearing liabilities. Owing to their short-term nature, the fair values of cash funds and short-term investments have been estimated to be the same as their acquisition cost.

Financial liabilities are recognised at fair value on the basis of the original consideration received. Transactions costs have been included in the original carrying amount of the financial liabilities. Later, all financial liabilities are valued at amortised cost using the effective yield method. Financial liabilities include long- and short-term liabilities and they can be interest-bearing or non-interest-bearing.

Derivative contracts and hedging activities

All derivatives contracts are initially recognised at cost and subsequently remeasured at their fair value. Forward foreign exchange contracts are valued at their fair value using the market prices of forward contracts at the closing date.

The Group has sales in a number of foreign currencies, of which the most significant are the US dollar, the Japanese yen and the British pound. The Group does not apply hedge accounting under IAS 39 to forward foreign exchange contracts that hedge sales in foreign currencies. The Group has a number of investments in foreign subsidiaries whose net assets are exposed to foreign currency risk. The Group does not hedge the foreign exchange risk of subsidiaries' net assets.

Unrealised and realised gains and losses arising from changes in fair value are recognised in the income statement in 'financial income and expenses" in the period during which they arise.

Employee benefits

Pension obligations

The Group has a number of pension schemes in different parts of the world which are based on local conditions and practices. These pension schemes are classified as either defined-contribution or defined-benefit schemes. Under defined-contribution plans, expenses are recognised in the balance sheet in the financial period in which the contribution is payable.

In defined-benefit plans, the Group can be left with the arrangement of obligations or assets after the financial period in which the contribution is payable. A pension liability describes the present value of future cash flows resulting from payable benefits. The present value of the defined-benefit pension plans has been determined using the projected unit credit method and assets belonging to the plans have been valued at fair value on the closing date. The obligations of the Group's defined-benefit pension plans have been calculated for each plan separately. On the basis of calculations made by authorised actuaries, the calculated actuarial gains and losses are recognised in the income statement during the average remaining period of service of employees participating in the plan to the extent that they exceed the greater of 10% of the present value of the plan's defined-benefit pension obligations and the fair value of assets included in the plan.

On the transition date to IFRS standards on 1 January 2004, all actuarial gains and losses have been recognised in the balance sheet's opening shareholders' equity in the manner allowed by the IFRS 1 standard.

Share-based payments

The Group currently has no stock option schemes. The company's option scheme 2000 ended for all options on 31 January 2006.

Provisions

Provisions are recognised when the Group has a present legal or constructive obligation as the result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. If it is possible that the Group will be reimbursed for part of the obligation by some third party, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The amount of provisions is estimated at each closing date and the amount is changed to correspond to the best estimate at the given time. A provision is cancelled when the probability of financial settlement has been removed. A change in provisions is recognised in the same item of the income statement in which the provision was originally recognised.

Provisions relate to the restructuring of operations, loss-making agreements and repairs under guarantee. Restructuring provisions are recognised when a detailed and appropriate plan relating to them has been prepared and the company has begun to implement the plan or has announced it will do so. Restructuring provisions generally comprise lease termination penalties and employee termination payments.

A provision for a loss-making agreement is recognised when unavoidable expenditure required to fulfil obligations exceeds the benefits obtainable from the agreement.

Income tax

The tax item in the income statement comprises tax based on taxable income for the financial year, adjustments to tax accruals related to previous years and the change in deferred taxes. Tax based on taxable income for the financial year is calculated for taxable income on the basis of each country's current tax rate.

Deferred taxes are calculated for all temporary differences between the carrying amount of an asset or liability and its tax base. The largest temporary differences arise from amortisation of fixed assets, defined-benefit pension schemes and unused tax losses. In taxation deferred tax is not recognised for non-deductible goodwill impairment and deferred tax is not recognised for distributable earnings of subsidiaries where it is probable that the difference will not reverse in the foreseeable future. The Group's deferred tax assets and liabilities relating to the same tax recipient are stated net.

Deferred taxes have been calculated using tax rates prescribed by the closing date.

Deferred tax assets are recognised to the extent that it is probable that future taxable profit, against which the temporary differences can be utilised, will be available.

Shareholders' equity, dividends and treasury shares The Board of Directors' proposal for dividend distribution has not been recognised in the financial statements; the dividends are recognised only on the basis of the Annual General Meeting's approval.

If a company buys its own shares (treasury shares), the consideration paid for them including direct costs is deducted from shareholders' equity.

Principles of revenue recognition

Sales of goods and services rendered

Revenue from the sale of goods is recognised when significant risks and rewards of owning the goods are transferred to the buyer. Revenue recognition generally takes places when the transfer has taken place. Revenue for rendering of services is recognised when the service has been performed. When recognising turnover, indirect taxes and discounts, for example, have been deducted from sales revenue. Possible exchange rate differences are recognised in the financial income and expenses.

Long-term projects

Revenues from long-term projects are recognised using the percentage of completion method, when the outcome of the project can be estimated reliably. The stage of completion is determined for each project by reference to the relationship between the costs incurred for work performed to date and the estimated total costs of the project or the relationship between the working hours performed to date and the estimated total working hours.

will be recoverable. When it is probable that total costs necessary to complete the project will exceed total project revenue, the expected loss is recognised as an expense immediately.

Other revenue received by the Group

Revenue arising from royalties and rents is recognised on an accrual basis in accordance with the substance of the relevant agreements. Interest income is recognised on a time-proportion basis, taking account of the effective yield of the asset item, and dividend income is recognised when the Group's right to receive payment is established.

Other operating income and expenses

Gains on the disposal of assets as well as income other than that relating to actual performance-based sales, such as rental income, are recognised as other operating income.

Losses on the disposal of assets and expenses other than those relating to actual performance-based sales are included in other operating expenses.

Grants

Grants received from the state or another party are recognised in the income statement at the same time as expenses are recognised as a deduction of the related expense group. Grants relating to asset acquisition are presented as an adjustment to the acquisition cost of the asset and they are recognised in the form of smaller depreciations over the useful life of the asset.

Held-for-sale assets and discontinued operations

Held-for-sale assets and assets relating to discontinued operations, which have been classified as held for sale, are valued at the lower of the following: the carrying amount and the fair value less costs arising from the sale. Depreciation of these assets is discontinued at the moment of classification.

Accounting principles requiring management discretion and the main uncertainty factors relating to estimates The preparation of financial statements requires the use of estimates and assumptions relating to the future and the actual outcomes may differ from the estimates and assumptions made. In addition, discretion has to be exercised in applying the accounting principles of the financial statements. Estimates made and discretion exercised are based on previous experience and other factors, such as assumptions about future events. Estimates made and discretion exercised are examined regularly. The key areas in which estimates have been made and discretion has been exercised are outlined below. Other estimates are connected mainly with environmental, litigation

and tax risks, the determination of pension obligations as well as the utilisation of deferred tax assets against future taxable income.

Allocation of acquisition cost

IFRS 3 requires the acquirer to recognise an intangible asset separately from goodwill, if the recognition criteria are fulfilled. Recognition of an intangible asset at fair value requires management estimates of future cash flows. Where possible, management has used available market values as the basis of acquisition cost recognition in determining fair values. When this is not possible, which is typical particularly with intangible assets, valuation is based principally on the historic cost of the asset item and its intended use in business operations. Valuations are based on discounted cash flows as well as estimated disposal and repurchase prices and require management estimates and assumptions about the future use of asset items and the effect on the company's financial position. Changes in the emphasis and direction of company operations can in future result in changes to the original valuation.

Revenue recognition

The Group uses the percentage of completion method in recognising revenue for long-term projects. Revenue recognition according to percentage of completion is based on estimates of expected revenue and costs as well as on a determination of the progress of the percentage of completion. Changes can arise to recognised revenue and profit if estimates of a project's total costs and total income are adjusted. The cumulative effect of adjusted estimates is recognised in the period in which the change becomes probable and it can be estimated reliably.

Impairment testing

The Group tests goodwill annually for possible impairment and reviews whether there are indications of impairment according to the accounting principle presented above. The recoverable amounts of cash generating units have been determined in calculations based on value in use. Although assumptions used according to the view of the company's management are appropriate, the estimated recoverable amounts might differ substantially from those realised in future.

Valuation of inventories

A management principle is to recognise an impairment for slowly moving and outdated inventories based on the management's best possible estimate of possibly unusable inventories in the Group's possession at the closing date. Management bases its estimates on systematic and continuous monitoring and evaluations.

Application of new or amended IFRS standards and IFRIC interpretations

New and updated standards and interpretations that the Group has applied in 2007

Standard IFRS 7, Financial instruments: Information to be Presented in Financial Statements and amendment of Standard IAS 1, Presentation of Financial Statements. The introduction of this standard and amendment increases disclosures relating to financial instruments. The standard requires the presentation of qualitative and quantitative information on the company's vulnerability to risks arising from financial instruments and it contains minimum requirements for disclosures relating to credit, liquidity and market risks, including a sensitivity analysis of market risk. The amendment to Standard IAS 1 requires the presentation of information on the company's capital levels and the management thereof.

IFRIC 8, Scope of IFRS 2. The interpretation applies to arrangements where the company grants equity instruments and the identifiable consideration given appears to be less than the fair value of the equity instruments granted. In such situations an assessment must be made as to whether the arrangement belongs within the scope of IFRS 2. [This interpretation has no impact on the Group's financial statements.]

IFRIC 10, Interim Reports and Impairment. The interpretation prohibits an entity from reversing, at a later closing date, an impairment loss recognised in a previous interim period in respect of goodwill , equity instruments classified as availablefor-sale and unquoted equity instruments carried at cost. [This interpretation has no impact on the Group's financial statements.]

New and revised standards and interpretations that entered into effect in 2007 but which have no substantial impact on the Group's financial statements IFRIC 7, Applying the Restatement Approach under IAS 29 Financial Reporting in Hyperinflationary Economies.

IFRIC 9, Reassessment of Embedded Derivatives.

The IASB has published standards and interpretations, listed below, which are not yet in effect and which the Group has not yet applied. The Group will introduce them from the effective date of each standard and interpretation or, if the effective date is other than the first day of the financial period, from the beginning of the financial period following the effective date.

IFRIC 11, IFRS2 - Group and Treasury Share Transactions (effective for financial periods beginning on or after 1 March 2007). The new interpretation clarifies the scope of equity-based transactions according to the IFRS 2 standard and requires the reassessment of such transactions in subsidiaries. [The new interpretation will have no impact on the Group's future financial statements.*]

IFRIC 12, Service Concession Arrangements (effective for financial periods beginning on or after 1 January 2008). The interpretation addresses arrangements in which a private body participates in the development, financing or realisation of public services or in the maintenance of infrastructure.<0} The Group has no arrangements with the public sector referred to in the interpretation, so the interpretation will have no impact on the Group's future financial statements.*

IFRIC 13 Customer Loyalty Programmes (effective for financial periods beginning on or after 1 July 2008). The interpretation defines transactions in which goods or services are sold in a way that encourages customer loyalty as sales contracts that have separable components. The consideration received from the customer is allocated to different components of the sales contract based on their fair value. The Group has no customer loyalty programmes referred to in the interpretation, so the interpretation will have no impact on the Group's future financial statements.*

IFRIC 14 IAS 19 - The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction (effective for financial periods beginning on or after 1 January 2008). The interpretation addresses post-retirement defined-benefit arrangements according to the IAS 19 standard and other long-term definedbenefit employee benefits when the arrangement includes a minimum funding requirement. The interpretation also addresses balance sheet recognition conditions for significant asset items via future refunds or future reductions of contributions made into the arrangement. The Group has in Finland a defined-benefit pension arrangement referred to in the interpretation. According to a preliminary assessment, the new interpretation will have no substantial impact on the Group's future financial statements. *

IFRIC 8 Operating Segments (effective for financial periods beginning on or after 1 January 2009). IFRS 8 replaces the IAS 14 Segment Reporting standard. Under the new standard, segment reporting is based on management's internal reporting and on the accounting principles followed therein. IFRS 8 requires the presentation of information on a Group's products, services, geographical areas and significant customers. An entity is also required to give information on the basis of specification of reportable segments as well as the accounting principles to be applied in segment reporting. In addition, the standard requires the presentation in segment reporting of a reconciliation statement for certain income statement and balance sheet items. The Group considers that the new standard will not substantially change the present segment reporting, because the business segments specified according to internal reporting are nowadays the Group's primary form of reporting. The Group expects that the introduction of IFRS 8 will mainly influence the way in which segment information is presented in the notes to future financial statements. *

IAS 23 Borrowing Costs, amendment (effective for financial periods beginning on or after 1 January 2009). The amended standard requires that borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset, such as a production plant, are included in the acquisition cost. In the manner permitted earlier, the Group has recognised borrowing costs as an expense in the financial period during which they arose. The Group considers that the introduction of the new standard will not, however, have a substantial impact on future financial statements.*

IAS 1 Presentation of Financial Statements, amendment (effective for financial periods beginning on or after 1 January 2009). The revised standard changes the way in which financial statements are presented. The Group considers that the change will mainly affect the presentation of the income statement and the statement of changes in shareholders' equity. The accounting principle behind the calculation of the key figure earnings per share will not change.*

IFRS 3 (Revised), Business Combinations (effective for financial periods beginning on or after 1 January 2010). The revised standard further requires the use of the purchase method in the handling of business combinations, however with certain significant changes. For example, all payments relating to the acquisition of companies must be recognised at fair value at the date of acquisition and certain contingent considerations

are valued after the acquisition at fair value through profit and loss. Goodwill can be calculated based on the parent company's portion of net assets or it can include the goodwill attributed to the minority interest. All transaction costs are recognised as an expense.*

IAS 27 (Revised), Consolidated and Separate Financial Statements. The revised standard requires the recognition of all minority transactions in shareholders' equity, if control is not transferred. Thus minority transactions no longer result in the recognition of goodwill nor in the recognition of profit or loss. The standard also specifies the handling of transactions when control is transferred. Any residual value in the acquired entity is valued at fair value and any profit or loss arising is recognised through profit and loss.*

* The said standard/interpretation has not yet been approved for application in the EU

1.2. Risk management

Organization of risk management

Vaisala's Management Group determines more specific guidelines for the Group's operations. These include authorizations for approvals, tendering and procurement, as well as payment terms.

The usual risks related to international business affect Vaisala's operations.

Interest rate risk

Interest rate risk arises from the effects of interest rate changes on interest-bearing receivables and liabilities in different currencies. According to the company's management, the interest rate risk is small, as the existing interest-bearing liabilities and receivables are but marginal compared with the scope of the company's business. The liabilities have floating rates. The returns on invested capital entail a minor risk relating to interest rate changes. A change of one percentage point in the level of interest rates would result in a change of EUR 78,500 (101,800) in the total value of investments. The main principles of the investment policy in the order of their priority are a) minimizing credit loss risks, b) ensuring liquidity, and c) maximizing return on investment. The maximum term of investment is 12 months.

Currency risk

The international nature of Vaisala's operations exposes the company to Group-level transaction risks, as the Group carries out sales in a number of foreign currencies, of which the most significant are the U.S. dollar, the Japanese yen, and the pound sterling. The Group has many investments in its foreign subsidiaries, whose net assets are exposed to currency risks. The Group does not hedge the currency risks related to its subsidiaries' net assets. The table below features a sensitivity analysis (SA) on how changes in the rates of the most important currencies for the Group and in the euro, both in terms of average rate and balance sheet day rate, would affect the consolidated profit before taxes and the consolidated equity. The SA calculation does not incorporate the effects of parent company purchases in other currencies during the financial year, or the effect of hedging measures.

The Group's other currency risks are transaction risks arising mainly from commercial accounts receivable and accounts payable. Approximately half of the consolidated net sales are denominated in U.S. dollars. A substantial part of the Group's procurement is euro-denominated. The resulting net position is hedged with currency forwards, to which the Group does not apply hedge accounting as per IAS 39. The hedging level is at approximately 50 percent of the order book and the accounts receivable. The hedging is done by the parent company.

Liquidity risk

The Group aims to continuously assess and observe the level of funding required to finance the business to ensure that the Group has sufficient liquid assets for financing its operations. Group financing is arranged through the parent company, and the financing of the subsidiaries is arranged through internal loans. The parent company also provides the subsidiaries with the necessary credit limit guarantees. The parent company

assumes responsibility for financial risk management and for investing surplus liquidity.

With the company's current balance sheet structure, liquidity risks are non-existent.

Counterparty risk

Liquid assets are directed, within set limits, to investments whose creditworthiness is good. The investments and investment limits are redefined annually.

Credit risk

The Group applies a stringent credit issuance policy. Credit risks are hedged by using letters of credit, advance payments and bank guarantees as terms of payment. According to Group management, the company has no material credit risk concentrations, because no individual customer or customer group represents an excessive risk, thanks to global diversification of the company's customer pool. Total credit losses arising from accounts receivable and recognized for the financial year amounted to EUR 0.3 million (0.5), and the total net credit loss for the financial year was EUR 0.1 million (0.3). The credit losses resulted from an unexpected change in the financial environment of a customer. The maximum amount of the Group's

credit risk corresponds with the carrying amount of financial assets at the end of the financial year. The periodic distribution of accounts receivable items is presented in Note 20 in the Notes to the Financial Statements.

Management of capital assets

Management of the Group's capital assets aims at ensuring normal company operation and increasing shareholder value with an optimum capital structure. The goal is to attain the best possible returns over the long term. An optimum capital structure also ensures lower capital costs. Capital structure can be affected through dividend distribution and share issues, for example. The Group can alter or adjust the amount of dividend payable to shareholders, the amount of capital returned to them or the number of new shares issued, or it may decide to sell or divest asset items to reduce its liabilities.

Internal audit

The company does not have a separate internal audit function. Duties relating to internal audit are undertaken by implementing control measures incorporated in the company's operating processes and by assigning the partnering firm of auditors to undertake any duties as necessary (see recommendation 49),

Effect of changes in the rates of the principal currencies for the Group

2007			Effect on profit before taxes, EUR thousand	Effect on equity, EUR thousand
USD/EUR	Exchange rate rise	10 %	1,403	4,128
	Exchange rate fall	10 %	-1,329	-3,558
JPY/EUR	Exchange rate rise	10 %	199	292
	Exchange rate fall	10 %	-163	-239
GBP/EUR	Exchange rate rise	10 %	905	1.174
	Exchange rate fall	10 %	-847	-1,067
2006
USD/EUR	Exchange rate rise	10 %	1,677	4,438
	Exchange rate fall	10 %	-1,590	-3,848
JPY/EUR	Exchange rate rise	10 %	171	277
	Exchange rate fall	10 %	-140	-226
GBP/EUR	Exchange rate rise	10 %	515	988
	Exchange rate fall	10 %	-497	-883

2. Business segments

	Vaisala
EUR million	Measurement	Vaisala	Vaisala	Other
2007	Systems	Instruments	Solutions	operations	Eliminations	Group
Net sales to external customers	82.5	70.3	71.3	0.0	0.0	224.1
Intragroup sales	0.0	10.4	0.4	0.0	-10.9	0.0
Net sales	82.5	80.8	71.7	0.0	-10.9	224.1
Operating profit	12.7	19.9	5.3	-2.6	0.0	35.3
Financial income and expenses						1.6
Share of associated companies' net profit						0.0
Net profit before taxes						37.0
Income taxes						-11.2
Net profit for the financial year						25.8
Assets	40.8	19.8	23.8	140.6	0.0	225.1
Holdings in associated companies	0.5	0.0	0.0	0.0	0.0	0.5
Liabilities	6.1	3.9	10.6	28.6	0.0	49.2
Investments	1.5	2.0	0.5	3.3	0.0	7.3
Depreciation	2.6	1.8	0.5	3.3	0.0	8.2
EUR million 2006	Vaisala Measurement Systems	Vaisala Instruments	Vaisala Solutions	Other operations	Eliminations	Group
Net sales to external customers	93.2	64.3	63.3	0.0	0.0	220.8
Intragroup sales	0.0	11.1	0.4	0.0	-11.5	0.0
Net sales	93.2	75.3	63.7	0.0	-11.5	220.8
Operating profit	19.8	19.5	5.4	-6.1	0.0	38.6
Financial income and expenses						-0.4
Share of associated companies' net profit						0.0
Net profit before taxes						38.2
Income taxes						-11.6
Net profit for the financial year						26.6
Assets	51.8	19.5	22.1	125.5	0.0	218.8
Holdings in associated companies	0.4	0.0	0.0	0.0	0.0	0.4
Liabilities	7.6	3.7	8.8	29.4	0.0	49.4
Investments	15.1	1.5	1.6	2.3	0.0	20.4
Depreciation	4.8	1.9	0.7	3.4	0.0	10.8
Restructuring expenses	0.0	0.0	0.0	0.0	0.0	0.0

3. Geographical segments

EUR million 2007	Net sales, by destination country (1	Net sales, by location country (2	Assets (2	Invest

Europe	80.7	183.2	186.2	5.4
of which Finland	9.2	160.7	171.9	5.2
North America	73.2	81.8	48.8	1.7
Asia and Australia	60.2	20.7	9.1	0.2
Africa, South and Central America	10.0			0.0
Group eliminations		-61.6	-23.3
Unallocated items			4.7
Total	224.1	224.1	225.6	7.3

1) Sales to external customers have been presented as net sales by destination country

2) Net sales. assets and investments have been presented by the Group's and associated companies' countries of location.

EUR million	Net sales. by destination	Net sales. by location
2006	country (1	country (2	Assets (2	Invest
Europe	76.0	175.0	178.4	4.0
of which Finland	7.5	152.4	163.1	3.8
North America	79.0	89.0	53.5	16.2
Asia and Australia	52.3	19.3	8.2	0.2
Africa, South and Central America	13.6			0.0
Group eliminations		-62.4	-26.2
Unallocated items			5.2
Total	220.8	220.8	219.2	20.4

1) Sales to external customers have been presented as net sales by destination country

2) Net sales, assets and investments have been presented by the Group's and associated companies' countries of location.

4. Company acquisitions

There were no acquisitions during the year 2007.

Company acquisitions in 2006

In January 2006 Vaisala acquired all the shares of the US company Sigmet Corp. The company's net sales in 2005 were EUR 8.8 million. Sigmet is the world's leading manufacturer of weather radar systems, signal processors and application software. The company has 10 employees and it is located in Westford, Massachusetts. Vaisala announced in November 2005 its decision to enter the weather radar business. The Sigmet acquisition supports this decision by supplementing Vaisala's range of products and services. Sigmet processors and application software products will continue to be sold to all weather radar manufacturers and end customers. The products will also be part of Vaisala's own weather radar system, which is expected to come onto the market in 2007. These synergy benefits as well as acquiring control of the Sigmet brand contributed to the generation of goodwill amounting to EUR 3.7 million. The acquisition price was EUR 16.5 million. Auditing and legal fees of EUR 0.2 million relating to the acquisition, as well as taxes of EUR 0.6 million, have also been included in the purchase price.

Sigmet's net sales in January-December 2006 of EUR 10.0 million and operating profit of EUR 2.9 million have been included in the Vaisala Group.

Purchase consideration

EUR million
Purchase price paid	15.7
Expenses related to the purchase	0.8
Total purchase cost	16.5
Fair value of the acquired net identifiable assets	-12.8
	3.7

Assets and liabilities arising from the acquisition are as follows	Fair value recognised before combination	Acquiree's carrying amount in combination
Tangible fixed assets	0.4	0.1
Intangible assets
Software	4.1	0.0
Orderbaclocg	1.7	0.0
Trademark	3.2	0.0
Customer value	1.4	0.0
Inventories	0.5	0.5
Receivables	1.1	1.1
Cash and cash equivalents	0.8	0.8
Non-interest-bearing liabilities	-0.5	-0.5
Net identifiable assets	12.8	2.0
Acquisition cost	16.5
Goodwill	3.7
Purchase consideration settled in cash	15.7
Expenses related to the purchase	0.8
Cash and cash equivalents in subsidiary acquired	-0.8
Cash outflow on acquisition	15.7

5. Long-term project

Net sales include EUR 8.9 million (2006; EUR 2.9 million ) in revenue recognised for long-term projects. Revenue of EUR 0.8 million recognised for long-term projects in progress was included in the consolidated income statement (2006; EUR 0.1 million). Advance payments of EUR 5.4 million recognised for long-term projects in progress were included in the balance sheet at 31.12.2007 (EUR 2.4 million 31.12.2006).

6. Other operating income

EUR million	2007	2006
Gains on the disposal of fixed assets	0.0	0.1
	0.0	0.1

7. Depreciation and impairment

EUR million	2007	2006
Depreciation by function
Procurement and production	2.2	4.7
Sales and marketing	2.4	2.3
Research and development	0.4	0.4
Other administration	3.2	3.3
	8.2	10.8

Goodwill not depreciated as of 1 January 2004.

Procurement and production depreciation in 2006 includes depreciation of EUR 1.8 million on the order book of company acquisition Sigmet.

8. Expenses arising from employee benefits

EUR million	2007	2006
Salaries	57.2	57.3
Social costs	6.8	6.5
Pensions
Defined-benefit pension schemes	0.1	-0.2
Defined-contribution pension schemes	5.4	6.0
Personnel expenses, total	69.5	69.6
Group personnel, average during the financial year	2007	2006
By business unit
Vaisala Instruments	281	345
Vaisala Measurement Systems	351	335
Vaisala Solutions	248	277
Other operations	234	112
	1,113	1,069
In Finland	677	656
Outside Finland	436	414
	1,113	1,069

9. Research and development expenditure

The income statement includes research and development expenditure of EUR 23.5 million recognised as an expense in 2007 (EUR 20.6 million in 2006).

10. Financial income and expenses

EUR million	2007	2006
Dividend income	0.0	0.0
Other interest and financial income	2.0	1.2
Change in fair value of assets recognised at fair value through profit an loss*	1.5	1.1
Interest expenses
Short- and long-term liabilities	-0.3	-0.1
Finance lease agreements	0.0	0.0
Other financial expenses	-0.1	-0.1
Realised and unrealised gains arising from changes in fair value
of derivative contracts and hedging activities	1.5	1.2
Realised and unrealised losses arising from changes in fair value
of derivative contracts and hedging activities	-0.4	-0.2
Foreign exchange gains	2.5	1.3
Foreign exchange losses	-5.1	-4.9
	1.6	-0.5

*Change in fair value of income fund investments.

11. Income taxes

EUR million	2007	2006
Tax based on taxable income for the financial year	11.1	12.1
Taxes from previous financial years	-0.1	0.0
Change in deferred tax assets and liabilities	0.1	-0.5
	11.2	11.6

Reconciliation statement between income statement tax item and taxes calculated at the tax rate of the Group country of domicile

EUR million
Profit before taxes	37.0	38.2
Taxes calculated at Finnish tax rate	9.6	9.9
Effect of foreign subsidiaries' tax rates	1.2	1.3
Non-deductible expenses and tax-free revenue	-0.8	0.0
Use of previously unrecognised tax losses	0.0	-0.1
Effect of the group eliminations	0.9	0.2
Others	0.3	0.3
Tax in income statement	11.2	11.6
Effective tax rate	30.2%	30.3%

Deferred taxes in balance sheet

EUR million	2007	2006
Deferred tax assets	4.7	5.2
Deferred tax liabilities	-0.4	-0.4
Deferred tax asset, net	4.3	4.8

Deferred tax is presented net in the balance sheet in respect of those companies between which the option exists in taxation for tax equalisation or which are taxed as one taxpayer.

Gross change in deferred taxes recognised in balance sheet:

	2007	2006
Deferred taxes 1 Jan	4.9	4.7
Items recognised in income statement	-0.1	0.5
Translation differences	-0.4	-0.4
Deferred tax asset, net	4.3	4.9

Deferred tax assets of EUR 2.1 million (2006: EUR 2.1 million) related to losses of a German subsidiary have not been recognised in the consolidated financial statements because it is not deemed probable that the tax benefit connected with them will be realised in the near future. The losses are connected with company operations discontinued as unprofitable in previous years. The balance sheet includes EUR 0.8 million (2006 EUR 0.8 million) in deferred tax assets for subsidiaries whose result for the current or previous financial years has been loss-making. The recognition of these tax receivables is based on profit forecasts which indicate that the realisation of the tax assets in question is deemed probable.

Changes in deferred taxes during 2007

		Recognised in income statement	Translation differences	Purchased
EUR million	31.12. 2006			subsidiaries	31.12. 2007
Deferred tax assets:
Internal margin of inventories and fixed assets	0.2	0.3	0.0	0.0	0.5
Employee benefits	0.1	0.0	0.0	0.0	0.1
Unused tax losses	0.8	0.0	0.0	0.0	0.8
Timing difference of depreciation on intangible items	3.1	-0.3	-0.3	0.0	2.5
Other temporary differences	1.1	-0.1	-0.1	0.0	0.9
Total	5.2	-0.1	-0.4	0.0	4.7
Deferred tax liabilities
Timing difference between accounting and taxation	0.4	0.0	0.0	0.0	0.4
Deferred tax asset, net	4.9	-0.1	-0.4	0.0	4.3

Changes in deferred taxes during 2006

EUR million	31.12. 2005	Recognised in income statement	Translation differences	Purchased subsidiaries	31.12. 2006
Internal margin of inventories and fixed assets	0.2	0.0	0.0	0.0	0.2
Employee benefits	0.1	-0.1	0.0	0.0	0.1
Unused tax losses	1.0	-0.2	0.0	0.0	0.8
Timing difference of depreciation on intangible items	3.1	0.3	-0.3	0.0	3.1
Other temporary differences	0.8	0.4	-0.1	0.0	1.1
Total	5.3	0.4	-0.4	0.0	5.2
Deferred tax liabilities
Timing difference between accounting and taxation	0.5	-0.1	0.0	0.0	0.4
Deferred tax asset, net	4.7	0.5	-0.4	0.0	4.8

For the EUR 28.9 million undistributed retained earnings of foreign subsidiaries in 2007 (27.1 million in 2006), no deferred tax liability has been recognised, because the assets have been invested permanently in the countries in question.

12. Earnings per share

The undiluted earnings per share figure is calculated by dividing the profit for the financial year belonging to the parent company's shareholders by the weighted average number of shares outstanding during the financial year.

	2007	2006
Profit for financial year belonging to parent company shareholders, EUR million	25.8	26.6
Weighted average number of shares outstanding, 1000 pcs	18,209	18,168
Earnings per share, EUR	1.42	1.46

When calculating the earnings per share adjusted by dilution, the weighted average of the number of shares takes into account the dilution of all potentially diluting shares. The Group has share options (option scheme 2000) that increase the number of diluting shares. The share options have a dilution effect when the subscription price of the options is lower than the fair value of the share. A dilution effect arises from the number of shares that have to be issued without consideration because with the funds obtained from the exercising of the options the Group could not issue the same number of shares at fair value. The fair value of the share is based on the average price of the shares during the financial year.

Profit for financial year belonging to parent company shareholders, EUR million	25.8	26.6
Weighted average number of shares outstanding, 1000 pcs	18,209	18,168
Effect of share options 2000, 1000 pcs	0	7
Diluted weighted average number of shares, 1000 pcs	18,209	18,174
Diluted earnings per share, EUR	1.42	1.46

13. Dividend per share

For 2006 a dividend of 0.85 euros per share was paid. At the Annual General Meeting to held on 27 March 2008 the payment of a dividend of 0.85 euros per share will be proposed, representing a total dividend of EUR 15.5 million. The proposed dividend has not been recognised as a dividend liability in these financial statements.

14. Intangible assets				Other
EUR million	Intangible			intangible
Intangible assets	rights	Goodwill	Trademark	assets	Total
Acquisition cost 1 Jan	20.6	10.0	3.2	2.3	36.1
Translation difference	-1.0	-2.3	-0.3	-0.1	-3.8
Increases	0.5	-	-	-	0.5
Acquisition of subsidiary	-	-	-	-	0.0
Decreases	-0.3	-	-	-	-0.3
Transfers between items	0.6	-	-	-	0.6
Acquisition cost 31 Dec	20.4	7.7	2.9	2.2	33.1
Accumulated depreciation and
impairment 1 Jan	13.7	-	-	1.4	15.1
Translation difference	-0.5	-1.3	-	-0.1	-1.8
Accumulated depreciation
of decreases and transfers	-0.3	-	-	-	-0.3
Depreciation in financial year	2.0	-	-	0.3	2.4
Accumulated depreciation 31 Dec	14.9	-1.3	0.0	1.7	15.3
Carrying amount 31 Dec 2007	5.5	8.9	2.9	0.5	17.8
Carrying amount 31 Dec 2006	6.9	10.0	3.2	0.9	21.0

Goodwill has not been depreciation as of 1 January 2004.

Goodwill and trademark impairment testing

Goodwill is attributed to the segments Vaisala Measurement Systems and Vaisala Solutions. Trademark EUR 2.9 (3.2) million is attributed to the segment Vaisala Measurement Systems. The balance sheet value of goodwill and trademarks is assessed at least once per year to ascertain any possible impairment. Trademark value is assessed by the relief-from-royalty method by comparing the present value of the royalty payments saved with the value of thetrademark. For impairment testing the goodwill is attributed tothree different cash generating units, i.e. EUR 4.6 million (2006 EUR 5.1 million) to a North American lightning detection systems business unit, EUR 1.1 million (2006 EUR 1.2 million) to a North American airport weather support systems business unit and EUR 3.3 million (2006 EUR 3.7 million) to a North American radar systems business unit. The value of the recoverable amount of the cashgenerating unit is based on value-in-use calculations. The cash flow forecasts used in these calculations are based on actual operating profit and management-approved five-year forecasts. Estimated amounts of sales are based on existing fixed assets and the most important assumptions of the forecasts are the sales distribution for each country and the margin received fromthe products. Vaisala's sector-specific capital yield requirement before taxes (WACC) has been used as the discount rate. The components of the yield requirement are the risk-free yield percentage, the market risk premium, the sector-specific beta coefficient as well as the cost and target capital structure of borrowing. The discount rate in 2007 was 15.2% (2006 15.9%).Cash flows after the management-approved forecast period have been calculated using the residual value method, in whichthe average of operating profits of the last four planning periods have been multiplied by four and discounted using the discount rate described above and the zero-growth percentage. On the basis of impairment testing there is no need for impairment recognitions. On the basis of sensitivity analyses made, reasonable changes to the assumptions used do not result in impairment of the goodwill of North American lightning detection systems business unit or North American radar systems business unit. At the North American airport weather business unit, a weakening of more than 6 per cent in sales or the margin receivable from products would result in an impairment recognition.

15. Tangible assets

EUR million Tangible assets	Land and waters	Buildings and structures	Machinery and equipment	Other tangible assets	Advance payments and construction in progress	Total
Acquisition cost 1 Jan	2.7	31.5	47.3	2.5	3.2	87.2
Translation difference	-0.2	-0.3	-1.1	-0.2	0.0	-1.8
Increases	-	0.0	2.8	0.4	3.7	7.0
Decreases	-	0.0	-1.9	0.0	-	-1.9
Transfers between items	-	0.0	1.8	0.0	-2.5	-0.6
Acquisition cost 31 Dec	2.6	31.2	49.0	2.7	4.4	89.8
Accumulated depreciation and
impairment 1 Jan	-	13.7	38.5	1.6	-	53.8
Translation difference	-	-0.1	-0.9	0.0	-	-1.0
Accumulated depreciation
of decreases and transfers	-	0.0	-1.9	0.0	-	-1.9
Depreciation in financial year	-	1.7	3.9	0.3	-	5.8
Accumulated depreciation 31 Dec	0.0	15.3	39.5	1.9	0.0	56.7
Carrying amount 31 Dec 2007	2.6	15.9	9.5	0.8	4.4	33.1
Carrying amount 31 Dec 2006	2.7	17.8	8.9	0.9	3.2	33.5

The undepreciated acquisition cost of machinery and equipment belonging the tangible fixed assets was EUR 25.4 million on 31.12.2007 (EUR 25.0 million 31.12.2006).

Tangible fixed assets include the following assets acquired on finance leases:

2007 EUR million	Machinery and equipment
Acquisition cost	1.2
Accumulated depreciation	-0.7
Carrying amount 31 Dec 2007	0.4
2006 EUR million
Acquisition cost	1.3
Accumulated depreciation	-0.8
Carrying amount 31 Dec 2006	0.5

16. Holdings in associated companies

EUR million	2007	2006
Acquisition cost 1 Jan	0.4	0.3
Share of result	0.0	0.0
Dividends received
Increases	0.0	0.1
Disposals and other decreases
Translation differences	0.0	0.0
Associated company investments, total 31 Dec	0.5	0.4

The carrying amount of associated companies does not include goodwill.

Information on Group associated companies as well as their combined assets, liabilities, net sales and profit/loss.

EUR million
Associated companies 2007	Domicile	Assets	Liabilities	Net sales	Profit/loss	Holding
Meteorage SA, France	Cedex	1.5	1.0	1.6	0.1	35%

The information presented in the table are based on the latest available financial statements.

EUR million Associated companies 2006
Meteorage SA, France	Cedex	1.4	0.5	1.6	0.1	35%

The information presented in the table are based on the latest available financial statements. Associated company Meteorage SA maintains lightning detection networks and sales information related to lightning detection.

17. Other financial assets

Other financial assets include an insubstantial quantity of unquoted shares, which have been valued at acquisition cost as well as lease guarantee deposits.

18. Receivables (long-term)

		2006
EUR million	Balance sheet values	Fair values	Balance sheet values	Fair values
Loan receivables	0.0	0.0	0.0	0.0
Other receivables *	0.1	0.1	0.2	0.2
	0.1	0.1	0.2	0.2

*Fair values have been calculated by discounting the future cash flows of every significant receivable at the market interest rate on the closing date.

19. Inventories

EUR million	2007	2006
Materials and supplies	7.8	9.4
Work in progress	4.4	2.8
Finished goods	3.8	5.3
	16.1	17.6

In the financial year expense of EUR 1.7 million was recorded, equivalent to the amount by which the carrying amount of inventories was reduced to correspond with their net realisable value (EUR 1.3 million in 2006).

20. Trade receivables and other receivables

EUR million	2007	2006
Trade receivables	39.4	43.1
Loan receivables	0.0	0.0
Advanced paid	0.9	0.8
Other receivables	2.3	3.3
Receivables from long-term project customers	6.6	3.3
Value-added tax receivables	2.9	1.6
Other prepaid expenses and accrued income	1.2	1.7
	53.4	53.9

The fair values of trade and other receivables essentially correspond to their carrying amounts. Other receivables principally include allocations of maintenance and data sales contracts. Other prepaid expenses and accrued income include interest and exchange rate allocations as well as miscellaneous allocations.

		provision			provision
Age analysis for the trade receivables		for	Net		for	Net
EUR million	2007	impairment	2007		2006 impairment	2006
invoices not due	5.1		5.1	5.3		5.3
due less than 30 days	17.4		17.4	24.5		24.5
due 31- 90 days	14.0		14.0	8.7		8.7
due over 90 days	3.2	0.3	2.9	5.0	0.5	4.6
Total	39.7	0.3	39.4	43.6	0.5	43.1

The carrying amounts of group's trade and other receivables are denominated in the following curencies:

EUR million	2007	2006
EUR	17.2	17.3
USD	16.1	19.9
GBP	3.4	2.6
JPY	1.7	2.0
AUD	0.4	0.5
CNY	0.0	0.1
Other	0.6	0.7
	39.4	43.1

21. Financial assets recognised at fair value through profit and loss

EUR million	2007	2006
Income fund investments	42.6	41.2
Derivative contracts	0.4	0.2

Fixed income fund investments are publicly quoted securities whose fair value is determined in the market and whose liquidity is good. Investments are directed at euro-denominated fixed income funds of banks that are a good credit risk and under Finnish supervision. A change in fair value is recognised in the income statement in 'financial income and expenses'. A change in interest rate of 1 per cent upwards our downwards would correspondingly influence the value of the investments by around EUR 63,900 (94,800 in 2006).

22. Cash and cash equivalents

EUR million	2007	2006
Cash and bank deposits	24.8	21.2
Certificates of deposit	31.9	25.0
Total	56.6	46.1

The values of cash and cash equivalents is equivalent to their carrying amounts. Certificates of deposit consist of short-term, highly liquid investments whose maturity is less than 3 months and which are mainly involved in the short-term investment of liquid assets. The average interest rate on teh investments in 2007 was 4.1% (2.9% in 2006). Deposits consists of fund investments investments in Euros. These are provided by banks under finnish official supervision and having a good credit rating. A change in interest rate of 1 per cent upwards or downwards would correspondingly influence the value of the investments by around EUR 14,600 /14,600 (EUR 7,000/7,000 in 2006) In the cash flow statements, income fund investments of EUR 42.6 million (EUR 41.2 milion in 2006) are also treated as cash and cash equivalents.

23. Notes relating to shareholders' equity

Vaisala applies the insider rules of the Helsinki Stock Exchange.

Share capital and share premium fund

	Number of		Share		Paid but
	shares	Share	premium	Reserve		Own unregistered
EUR million	1000	capital	fund	fund	shares	options	Total
31.12.2005	17 665	7.4	5.3	0.1	0.0	5.4	18.3
Share options exercised	553	0.2	11.3			-5.4	6.1
Own shares acquired	-9				-0.3		-0.3
31.12.2006	18 209	7.7	16.6	0.1	-0.3	0.0	24.1
31.12.2007	18 209	7.7	16.6	0.1	-0.3	0.0	24.1
Own shares held by company	9
	18 218

Shareholders' equity consists of the share capital, share premium fund, reserve fund, translation differences and retained earnings. A change in the value of the share capital that exceeds the nominal value is entered in the share premium fund. The reserve fund of EUR 0.1 million contains items based on the local rules of other . Group companies. The translation differences fund contains translation differences arising from the conversion of the financial statements of foreign units. The profit for the financial year is entered in retained earnings. The share premium fund is not a distributable equity fund. Restrictions based on local rules apply to the distributability of the reserve fund.

Optio scheme

The company's option scheme 2000 ended for all options on 31 January 2006. During the reporting period options had been used to subscribe for 293,164 Vaisala Series A shares. The subscription price was EUR 20.78 per share.

Change in number of options outstanding	kpl
Number of options outstanding on 1 Jan 2006	309 800
Options granted
Options exercised which have been registered	-293 164
Options exercised which have not been registered
Options held by the company
Expired options	-16 636
Number of options outstanding on 31 Dec 2006	0

Share-based incentive schemes

2007 scheme

In 2007 Vaisala's Board of Directors instituted a new share-based incentive scheme for around 50 key individuals of the company. Some of these individuals belong to related parties of the Group. The incentive scheme is of two years' duration and it ends in February 2009. The performance period of incentive scheme is the financial year that began on 1 January 2007 and ended on 31 December 2007. The imputed number of shares to which individuals are entitled is based on the achievement of set financial targets, which are measured by earnings per share (EPS). A bonus corresponding to the imputed number of shares will be paid in cash and the share price used is the average price on the trading day that follows the publication of the 2008 final statements. Individuals must invest the proportion of the cash sum they receive that remains after taxes in Vaisala shares. Key individuals undertake to acquire the shares themselves at the market price. In addition, the shares have a restriction on sale of one year. The maximum cost of the incentive scheme corresponds to the value of 130,000 shares. Because financial targets were not met, no liablity has been recogninsed for the scheme in the consolidated balance sheet on 31 December 2007.

2006 scheme

In 2006 Vaisala's Board of Directors instituted a new share-based incentive scheme for around 50 key individuals of the company. Some of these individuals belong to related parties of the Group. The incentive scheme is of two years' duration and it ends in February 2008. The performance period of incentive scheme is the financial year that began on 1 January 2006 and ended on 31 December 2006. The imputed number of shares to which individuals are entitled is based on the achievement of set financial targets, which are measured by earnings per share (EPS). A bonus corresponding to the imputed number of shares will be paid in cash and the share price used is the average price on the trading day that follows the publication of the 2007 final statements. Individuals must invest the proportion of the cash sum they receive that remains after taxes in Vaisala shares. Key individuals undertake to acquire the shares themselves at the market price. In addition, the shares have a restriction on sale of one year. The maximum cost of the incentive scheme corresponds to the value of 130,000 shares. A EUR 3.3 million (2.9 million in 2006) liability has been recognised for the scheme in the consolidated balance sheet on 31 December 2007.

The incentive scheme is an arrangement that complies with IFRS 2. The fair value of the shares given as bonuses has been determined using the share price on the closing date. As the scheme involves the giving of shares for no consideration, no option pricing model has been used.

Authorisation of the Board of Directors

At the end of 2007, the Board of Directors had no authorisations to increase the share capital nor to issue convertible or warrant bonds. The Board of Directors had an authorisation granted by the Annual General Meeting of 22 March 2005 to acquire and transfer the company's own shares. The authorisation was valid until 22 March 2006. A maximum of 35,000 shares could be purchased. The Board of Directors used the authorisation in full. Under the authorisation, the shares were used as part of the incentive and bonus schemes for the company's personnel.

Notes to the Consolidated Financial Statements

Acquired own shares	Number of shares	Purchase price EUR million
February 2006	13 000	355
March 2006	22 000	608
Total	35 000	963
Shares transferred	-25 850	-712
Company's own shares on 31 December 2006	9 150	252
Shares transferred	-	-
Company's own shares on 31 December 2007	9 150	252

24. Interest-bearing liabilities

EUR million	Balance sheet value
	2007	2006
Long-term
Loans	0.0	0.1
Finance lease liabilities	0.2	0.2
	0.2	0.3
Short-term
Loan repayments in next year	0.1	0.3
Other short-term liabilities	0.4
Finance lease liability repayments
in next year	0.3	0.3
	0.8	0.6
Interest-bearing liabilities, total	0.9	0.9

The fair values of the interest-bearing liabilities is equivalent to their carrying amounts..Other shor-term liability is interest-bearing liability related to the building of the clean room. Interest-bearing liabilities are loans granted by Tekes, the interest rate on which is base rate confirmed by the Finnish Ministry of Finance less three percentage points, but at least one per cent. The interest rate on 31 December 2007 was 1.25% (2006; 1%). The company has no loans that would mature after five years or a longer period.

EUR million	2007	2006
Finance lease liabilities - total amount of minimum lease payments
Up to 1 year	0.3	0.3
1 - 5 years	0.2	0.3
More than 5 years	-	-
	0.5	0.6
Future financial expenses	0.0	-0.1
Present value of finance lease liabilities	0.5	0.5
Present value of minimum payments of finance lease liabilities
Up to 1 year	0.3	0.3
1 - 5 years	0.2	0.2
More than 5 years	-	-
Total	0.5	0.5

Maturity dates of finance lease liabilities:

25. Pension obligations

Group has a number of pension schemes, which have been classified as either defined-contribution or defined-benefit schemes. Under defined-contribution plans, contributions made are recognised as an expense in the income statement of the financial period in which the contributions are payable. TEL pension cover managed in an insurance company are defined-contribution schemes. The defined-benefit schemes are in Finland. The Group has no other benefits post-employment benefits. The supplementary pension benefits managed in the Vaisala Pension Fund have been treated as defined-benefit pension schemes. The Pension Fund's obligations were transferred to a pension insurance company on 31 December 2005. The company retains, however, an obligation under IFRS 19 for future index and salary increases in terms of individuals covered by the Pension Fund who are employed by the company.

Items entered in the income statement

EUR million	2007	2006
Defined-benefit pension schemes	0.1	-0.2
Defined-contribution pension schemes	5.4	6.0
	5.5	5.8
Defined-benefit pension schemes by function
Procurement and production		-0.1
Sales and marketing		-0.1
Research and development		0.0
Other administration	0.1	0.0
	0.1	-0.2

The balance-sheet defined-benefit pension liability is determined as follows

0.1 -0.2

EUR million	2007	2006
Present value of unfunded obligations
Fair value of funded obligations	1.8	1.9
Fair value of assets	-1.5	-1.7
Deficit/surplus	0.4	0.2
Unrecognised net actuarial gains (+)/ losses (-)	-0.1	0.2
Unrecognised costs based on past service	-	-
Net liability present in balance sheet	0.3	0.3
Pension expenses in personnel expenses
EUR million
Service costs for the financial year	0.1	0.1
Interest costs	0.1	0.3
Expected yield from assets belonging to the scheme	-0.1	-0.3
Actuarial gains and losses	-	-
Costs based on past service	-	-
Gains/losses from reduction of scheme	0.0	-0.3

Actual yield from assets belonging to the scheme 5,5% 6,7%

Overall expected return as calculated by the insurance company. Information on asset categories is not available. Expected contributions payable for the group during the year 2008 is EUR 0.1 million (EUR 0.1 million in 2007).

Changes in the present Value of the Obligation

EUR million	2007	2006
Present value of obligation 1 Jan	1.9	6.6
Current sevice cost	0.1	0.1
Interest cost	0.1	0.3
Settlement and curtailments	-0.3	-4.6
Actuarial gain (-) loss(+) on obligation	0.1	-0.5
Present value of obligation on 31 Dec	1.8	1.9
Changes in the Fair Value of Plan Assets
EUR million
Fair value of plan assets 1 Jan	1.7	6.1
Expected return on plan assets	0.1	0.3
Actuarial gain (+) loss(-) on plan assets	-0.1	-0.2
Contributions	0.1	0.1
Settlements	-0.3	-4.6
Fair value of plan assets 31 Dec	1.5	1.7
Changes of liabilities presented in balance sheet
EUR million	2007	2006
At beginning of financial year	0.3	0.6
Paid contributions	-0.1
Pension expenses in income statement	0.1	-0.2
At end of financial year	0.3	0.3
Actuarial assumptions used:
Discount rate	5.00%	4.50%
Expected yield from assets belonging to the scheme	5.00%	5.00%
Future pension increases	3.25%	3.25%
26. Provisions

EUR million	2007 Restructuring provision	2006 Restructuring provision
Provisions 1 Jan	0.0	0.2
Additional provisions	0.2	0.0
Used provisions	0.0	-0.2
Provisions 31 Dec	0.2	0.0

The increase in provisions in 2007 relates to the restructuring of the company's organisation.

A 2006 restructuring provision relates to the centralisation of the company's lightning detection business into one location and to the closure of the Aix-en-Provence office, situated in France. At the end of 2006, four thousand euros of the provision remained. An increase in provisions, 24 thousand euros, results from a restructuring of production at the sonde plant in Vantaa.

27. Trade payables and other liabilities

Non-interest bearing

EUR million	2007	2006
Trade payables	10.4	12.2
Salary and social cost allocations	15.5	15.8
Other accrued expenses and deferred income	5.0	6.1
Other short-term liabilities	1.9	1.6
Non-interest bearing liabilities, total	32.9	35.6

The fair value of the trade payables and other liabilities is equivalent to their carrying amounts.

28. Contingent liabilities and pledges given

EUR million	2007		2006
For own loans/commitments
Guarantees	8.0		9.7
Other own liabilities
Pledges given	0.1		0.1
Other leases	0.2		0.2
Contingent liabilities and pledges given, total	8.3		9.9
The pledges given are lease guarantee deposits.
Derivative contracts
EUR million	2007		2006
Capital value of off-balance sheet contracts made to
hedge against exchange rate and interest rate risks
Currency forwards	14.3		11.9
Capital value, total	14.3		11.9
Derivative contracts are denominated in the following currencies:	2007 Currency million	EUR million	2006 Currency million	EUR million
USD	16.5	11.6	12.5	9.6
AUD	1.5	0.9	1.6	1.0
JPY	115.0	0.7	115.0	0.8
GBP	0.8	1.1	0.4	0.6
		14.3		11.9
Maturity
Less than 90 days		9.6		10.8
over 90 days and less than 120 days		3.0		1.1
Over 120 days and less than 230 days		1.7
		14.3		11.9

Fair value of off-balance sheet contracts made to hedge against exchange rate and interest rate risks
Currency forwards	0.4	0.2
Fair value, total	0.4	0.2

29. Related party transactions

The Vaisala Group's related parties include subsidiaries, associated companies, members of the Board of Directors, the President and CEO, and the Vaisala Pension Fund.

The parent companies and subsidiaries are as follows:

	Group	Share of
Company	ownership %	votes %
Parent company Vaisala Oyj, Vantaa, Finland
Vaisala Limited, Birmingham, UK	100 %	100 %
Vaisala Pty Ltd., Hawthorn, Australia	100 %	100 %
Vaisala GmbH, Hamburg, Germany	100 %	100 %
Vaisala KK, Tokyo, Japan	100 %	100 %
Vaisala Holding Inc., Woburn, USA	100 %	100 %
Vaisala Inc., Woburn, USA	100 %	100 %
Vaisala China Ltd, Beijing, China	100 %	100 %
Tycho Technology Inc, Woburn., USA	100 %	100 %
WSDM LCC, Minneapolis, USA	100 %	100 %
Vaisala S.A., Argentina	100 %	100 %
Vaisala SAS , Saint-Quentin-En-Yvelines, France	100 %	100 %

Sales of goods and services concluded with related parties are based on market prices and general market terms and conditions.

Employee benefits of management (EUR million)		2007	2006
Salary and bonuses paid to President and CEO
Kjell Forsen, President and CE
Salary		0.26	0.07
Bonuses		0.02
Pekka Ketonen, President and CEO 1 Jan to 30 Sept 2006
Salary			0.31
Bonuses		0.28	0.38
Remuneration paid to Members of the Board of Directors
Gustavsson Stig	Member of the Board	0.02	0.01
Hautojärvi Pekka	Member of the Board		0.00
Neuvo Yrjö	Member of the Board	0.02	0.02
Niinivaara Mikko	Member of the Board	0.02	0.02
Torkko Maija	Member of the Board	0.02
Voipio Mikko	Member of the Board	0.02	0.02
Voipio Raimo	Chairman of the Board	0.03	0.03
Wendt Gerhard	Member of the Board		0.00
Total		0.70	0.87

Salaries and bonuses paid to managing directors of Group subsidiaries totalled EUR 0.3 million (2006 EUR 0.3 million) . Age of retirement for the President and CEO is 63 years, according to Finnish law. The President and CEO has a compensation based retirement plan.

Management share ownership

Vaisala Oyj's Board of Directors held and controlled 1,394,601 shares on 31 December 2007,accounting for 16.6% of the total votes (2006: 1,353,101 shares and 16.5% of the total votes). The company's President and CEO did not own shares or options on 31 December 2007. The President and CEO and the Members of the Board have not been granted loans nor have guarantees or commitments been given on their behalf.

30. Collected information

Information published during Vaisala previous financial year can be found on the Vaisala website: www.vaisala.com/investors

Five Years in Figures

Consolidated income statement EUR million	IFRS 12/2007	IFRS 12/2006	IFRS 12/2005	IFRS 12/2004	FAS 12/2003
Net sales	224.1	220.8	197.9	178.1	189.2
Other operating income	0.0	0.1	0.3	0.2	0.9
Costs	180.6	171.5	158.4	140.1	152.3
Depreciation. amortization and impairment charges	8.2	10.8	8.4	9.4	11.9
Operating profit	35.3	38.6	31.5	28.7	25.9
Financial income and expenses	1.7	-0.4	2.6	0.3	-2.5
Profit before tax	37.0	38.2	34.1	29.1	23.4
Income taxes	-11.2	-11.6	-9.2	-8.1	-8.9
Net profit for the period	25.8	26.6	24.9	21.0	14.5

Consolidated balance sheet EUR million	31.12.07	31.12.06	31.12.05	31.12.04	31.12.03
Assets
Non-current assets	56.3	60.4	53.7	50.5	56.9
Inventories	16.1	17.6	14.1	15.0	18.4
Current assest	153.1	141.3	129.1	98.2	97.6
	225.6	219.2	196.9	163.7	172.9
Shareholders' equity and liabilities
Equity attributable to equity holders of the parent	176.3	169.8	154.3	129.7	139.5
Liabilites. total	49.2	49.4	42.6	34.0	33.5
Interest bearing	0.9	0.9	1.5	2.0	2.2
Non-interest bearing	48.3	48.6	41.1	32.0	31.3

Financial Ratios

Financial ratios	IFRS 2007	IFRS 2006	IFRS 2005	IFRS 2004	FAS 2003
Net sales M€	224.1	220.8	197.9	178.1	189.2
exports and international operations	95.8%	96.6%	96.2%	96.6%	96.6%
Operating profit M€	35.3	38.6	31.5	28.7	25.9
% of net sales	15.8%	17.5%	15.9%	16.1%	13.7%
Profit before taxes M€	37.0	38.2	34.1	29.1	23.4
% of net sales	16.5%	17.3%	17.2%	16.3%	12.4%
Return on equity (ROE)	14.9%	16.4%	17.5%	16.0%	10.4%
Return on investment (ROI)	21.5%	23.5%	23.8%	21.9%	16.6%
Solvency ratio	82.6%	81.0%	80.8%	82.2%	84.4%
Current ratio	3.5	3.3	3.7	3.7	3.7
Gross capital expenditure M€	7.3	20.4	8.0	4.8	14.1
% of net sales	3.3%	9.2%	4.0%	2.7%	7.4%
R&D expenditure
on machinery and equipment M€	0.6	0.3	0.3	0.1	0.4
R&D expenditure M€	23.5	20.6	19.8	21.3	21.1
% of net sales	10.5%	9.3%	10.0%	12.0%	11.2%
Orderbook on Dec. 31. M€	82.3	77.6	55.3	52.7	62.9
Average personnel	1 113	1 069	1 062	1 092	1 141
Shares in figures
Earnings/share (EPS)	€ 1.42	1.46	1.42	1.20	0.83
Earnings/share (EPS), calculated taking into account
the dilution impact of the bond with warrants	€ 1.42	1.46	1.42	1.20	0.83
Cash flow from business operations/share	€ 1.98	1.96	2.21	2.06	1.99
Shareholders' equity/share	€ 9.68	9.32	8.74	7.42	7.98
Dividend/share	€ *0.85	0.85	0.75	0.75	1.25
Dividend/earnings %	**59.9%	58.2%	52.8%	62.5%	150.8%
Effective dividend yield ***	2.4%	2.6%	3.1%	4.1%	5.1%
Price/earnings (P/E)	25.11	22.65	16.90	15.17	29.55
A-share trading
highest	€ 41.99	33.33	24.74	24.50	25.00
lowest	€ 29.43	23.10	18.48	17.25	16.70
weighted average	€ 37.31	26.64	22.15	20.03	19.95
at balance sheet date	€ 35.60	33.07	24.00	18.20	24.50
Market capitalisation at
balance sheet date *** M€	648.2	602.2	424.0	318.1	428.2
A-shares traded
traded pcs	5 595 292	6 873 504	2 442 168	1 635 934	1 495 572
% of entire series	37.8%	46.4%	17.1%	11.6%	10.6%
Adjusted number of shares pcs	18 209 214	18 174 250	17 532 161	17 479 000	17 471 904
A-shares pcs	14 810 979	14 809 079	14 256 165	14 065 715	14 063 215
K-shares pcs	3 407 385	3 409 285	3 409 285	3 413 285	3 415 785
Number of shares at Dec. 31 pcs	18 209 214	18 209 214	17 665 450	17 479 000	17 479 000

* Proposal by the Board of Directors, ** Calculated according to the proposal by the Board of Directors, *** Value of A and K shares is here calculated to be equal

Calculation of Financial Ratios

Return on equity, ROE (%)	Profit before taxes less taxes =
	Shareholders' equity plus minority interest (average)
	Profit before taxes
Return on investment, ROI (%)	= plus interest and financial expenses
	Balance sheet total less non-interest bearing liabilities
	(average)
	Shareholders' equity plus minority interest
Solvency ratio, (%)	= Balance sheet total less advance payments
	Current assets
Current ratio	= Current liabilities
	Profit before taxes less taxes
Earnings / share, €	+/- minority interest
	= Average number of shares, adjusted
	Cash flow from business operations
Cash flow from business	= Number or shares at balance sheet date
	Shareholders' equity
Equity / share, €	= Number of shares at balance sheet date, adjusted
	Dividend
Dividend / share, €	= Number of shares at balance sheet date, adjusted
	Dividend
Dividend / earnings, (%)	= Profit before taxes less taxes
	+/- minority interest
Effective dividend yield, (%)	Dividend / share
	= Share price at balance sheet date
	Share price at balance sheet date
Price / earnings, €	= Earnings / share
Market capitalisation, M€	= Share price at balance sheet date times number of shares

Parent Company Income Statement

(Finnish accounting principles, FAS)

EUR million	Note	1.1. - 31.12.2007	1.1. - 31.12.2006
Net sales	2	160.7	152.4
Cost of production and procurement		-82.6	-77.7
Gross profit		78.1	74.7
Cost of sales and marketing Cost of administration		-20.1	-17.1
Development costs		-18.5	-15.9
Other administrative costs		-15.1 -33.6	-15.0 -30.9
Other operating income	3	0.0	0.1
Operating profit		24.5	27.9
Financial income and expenses	5	5.5	2.9
Profit before provisions and taxes		29.9	29.7
Provisions		-0.1	0.5
Direct taxes	6	7.2	7.3
Net profit for the financial year		22.7	22.9

Parent Company Balance Sheets

Parent company accounts (Finnish accounting principles, FAS)

EUR million	Note		31.12.2007		31.12.2006
Assets

Non-current assets
Intangible assets	7
Intangible rights		1.9		1.6
Other long-term expenditure		0.3	2.1	0.3	1.9
Tangible assets	7
Land and waters		1.3		1.3
Buildings		19.3		20.8
Machinery and equipment		7.0		6.6
Other tangible assets		0.0		0.0
Advance payments and construction in progress		4.0	31.6	3.0	31.7

Investments	7
Other shares and holdings		21.4		21.4
Other receivables		0.0		0.0
Receivables from subsidiaries		9.7	31.1	12.4	33.8

Current assets
Inventories
Materials and consumables		6.0		7.1
Work in progress		3.8		1.6
Finished goods		2.9	12.8	3.6	12.3

Receivables
Trade receivables		28.8		31.0
Loan receivables		1.4		1.5
Other receivables		1.0		0.6
Prepaid expenses and accrued income	8	7.9		3.9
Deferred tax assets	10	0.0	39.0	0.0	37.1
Fianancial assets
Other fianancial assets	9		42.6		41.2

Cash and bank balances	9		39.3		31.8
Assets, total			198.6		189.8

Parent Company Balance Sheets

Parent company accounts (Finnish accounting principles, FAS)

EUR million	Note		31.12.2007		31.12.2006
Shareholders' Equity and Liabilities
Shareholders' Equity	11
Share capital		7.7		7.7
Share issue		0.0		0.0
Reserve fund		22.3		22.3
Profit from previous years		108.3		100.9
Profit for the financial year		22.7	161.0	22.9	153.8

Provisions
Accumulated depreciation difference			1.6		1.5
Obligatory provisions	12		0.2		0.0
Liabilities

Non-current
Other non-current liabilities	13		0.1		0.1
Deferred tax liabilities	10		0.0		0.0

Current
Advances received		9.8		7.3
Trade payables		11.0		11.4
Other current liabilities		1.5		1.2
Accrued expenses and deferred income	14	13.5	35.8	14.5	34.4
Shareholders' equity and liabilities, total			198.6		189.8

Parent Company Cash Flows

(Finnish accounting principles, FAS)

EUR Million	Note	2007	2006
Cahs fl ows
Cash fl ows from operating activities
Cash receipts from customers		162.6	155.2
Other income from business operations		0.0	0.0
Cash paid to suppliers and employees		-132.6	-122.8
Cash fl ow from business operations before fi nancial items and taxes		30.0	32.3
Interest received		3.5	2.7
Interest paid		-0.2	0.0
Other fi nancial items, net		-0.5	-2.0
Dividend received from business operations		3.7	2.8
Direct tax paid		-8.5	-5.6
Cash fl ow from business operations (A)		27.9	30.2

Cash fl ow from investing activities
Investments in tangible and intangible assets		-4.8	-3.9
Proceeds from sale of fi xed assets		0.0	0.1
Loans granted		0.0	-0.2
Repayments on loan receivables		1.5	6.5

Cash fl ow from investing activities (B)		-3.3	2.5

Cash fl ow from fi nancing activities
Equity issue		0.0	6.1
Repayment of short-term loans		0.0	0.0
Withdrawal of long-term loans		0.0	0.0
Repayment of long-term loans		-0.2	-0.4
Dividend paid and other distribution of profi t		-15.5	-13.4
Cash fl ow from fi nancing activities (C)		-15.7	-7.7
Change in liquid funds (A+B+C) increase (+) / decrease (-)		8.9	24.9

Liquid funds at beginning of period		73.0	48.1
Liquid funds at end of period	9	81.9	73.0

1. Parent Company accounting principles (FAS)

The financial statements of the parent company have been prepared according to the Finnish accounting standards (FAS). Financial statement data are based on original acquisition costs if not otherwise stated in the accounting principles outlined below. Revaluations are not taken into account if not separately mentioned.

Non-current assets

The balance sheet values of fixed assets are stated at historical cost, less accumulated depreciation and amortization, with the exception of the office and factory premises at Vantaa, which were revalued in previous years by a total of EUR 5.7 million. Despite of the revaluations, the asset value is significantly less than the market value of the office and factory premises. The cost of self-constructed assets also includes overhead costs attributable to construction work. Interest is not capitalized on fixed assets. Depreciation and amortization is calculated on a straight-line basis over the expected useful lives of the assets, except for land, which is not depreciated. Estimated useful lives for various assets are:

Intangible rights	3 – 5 years
Goodwill and group Goodwill	5 years
Buildings and structures	5 – 40 years
Machinery and equipment	3 – 10 years
Other tangible assets	5 – 15 years

Inventories

The cost of inventories comprises all costs of purchase. Finished goods produced include also fixed and variable production overheads. Inventories are valued using the average cost method.

Financial assets

Fianacial assets includes income fund investments consisting of the short-term investment of liquid assets. These financial assets are recognised at fair value through profit and loss statement. The fair value of income fund investments has been determined based on price quotations published in an active market, namely the bid quotations on the closing date. Realised and unrealised gains and losses arising from changes in fair

value are recognised in the income statement in the period in which they arise.

Foreign currency items

Transactions in foreign currencies are recorded at the rates of exchange prevailing at the date of transaction. Receivables and payables in foreign currency are valued at the exchange rates quoted by the European Central Bank at the balance sheet date. All foreign exchange gains and losses, including foreign exchange gains and losses on trade accounts receivable and payable, are recorded as financial income and expenses.

Pension costs

Pension costs are recorded according to the finnish regulations. The additional pension coverage of parent company personnel is arranged by the Vaisala Pension Fund (closed on 1.1.1983). The pension liability of the fund is fully covered.

Research and development costs

Except for investments in machinery and equipment, which are amortized on a straight line basis over a period of five years, research and development costs are expensed in the financial period in which they occurred.

Income taxes

Income taxes consist of current and deferred tax. Current taxes in the income statement include estimated taxes payable or refundable on tax returns for the financial year and adjustments to tax accruals related to previous years. The deferred taxes in the income statement represent the net change in deferred tax liabilities and assets during the year.

Principles of revenue recognition

Sales of goods and services rendered

Long-term projects

When the outcome of a long-term project cannot be estimated reliably, project costs are recognised as expenses in the same period when they arise and project revenues only to the extent of project costs incurred where it is probable that those costs will be recoverable. When it is probable that total costs necessary to complete the project will exceed total project revenue, the expected loss is recognised as an expense immediately.

Other operating income and expenses

Gains on the disposal of assets as well as income other than that relating to actual performance-based sales, such as rental income, are recognised as other operating income.

Losses on the disposal of assets and expenses other than those relating to actual performance-based sales are included in other operating expenses.

2. Net sales by market area

EUR million	Parent Company 2007	Parent Company 2006
Europe	67.2	77.8
of which Finland	9.3	7.6
North America	36.1	16.3
Asia and Australia	48.7	41.0
Africa, South and Central America	8.6	17.2
Total	160.7	152.4

3. Other operating income

EUR million
Gains on the disposal of fixed assets	0.0	0.1
Total	0.0	0.1

Notes to the Parent Company Income Statements and Balance Sheets

4. Personnel

		Parent Company	Parent Company
EUR million		2007	2006
Personnel costs
Wages and salaries		34.2	34.4
Pension costs		4.7	4.6
Other personnel costs		3.0	2.6
Total		41.9	41.6
	Personnel on average during the year (persons)
In Finland		669	651
Outside Finland		8	5
Total		677	656
Personnel Dec. 31
In Finland		687	643
Outside Finland		7	7
Total		694	650
Salaries
EUR million
	Salary and bonuses paid to President and CEO
Kjell Forsen	President and CEO
Salary		0.26	0.07
Bonuses		0.02
Ketonen Pekka	President and CEO 1 Jan to 30 Sept 2006
Salary			0.31
Bonuses		0.28	0.38
	Remuneration paid to Members of the Board of Directors
Gustavsson Stig	Member of the Board	0.02	0.01
Hautojärvi Pekka	Member of the Board		0.00
Neuvo Yrjö	Member of the Board	0.02	0.02
Niinivaara Mikko	Member of the Board	0.02	0.02
Torkko Maija	Member of the Board	0.02
Voipio Mikko	Member of the Board	0.02	0.02
Voipio Raimo	Chairman of the Board	0.03	0.03
Wendt Gerhard	Member of the Board		0.00
Total		0.70	0.87
Salaries paid to the other employees		32.4	31.5

Cash loans, securities or contingent liabilities were not granted to the President or to the members of the Board of Directors. Age of retirement for the President and CEO is 63, according to the Finnish law. The President and CEO has a compensation based retirement plan.

Total 33.1 32.4

5. Financial income and expenses

	Parent Company	Parent Company
EUR million	2007	2006
Dividend income
From Group companies	3.7	2.8
From others	0.0	0.0
Interest income on long-term investments
From Group companies	0.8	1.1
Other interest and fi nancial income
From Group companies
From others	2.8	1.8
Change in fair value of assets recognised at fair value
through profi t an loss	1.5	1.1
Interest and other fi nancial expenses
From others	-0.6	-0.3
Foreign exchange gains and losses
From Group companies	-1.4	-2.2
From others	-1.1	-1.2
Total	5.5	2.9

6. Direct taxes

EUR million	Parent Company 2007	Parent Company 2006
Taxes for the fi nancial year	7.0	7.1
Taxes from previous years	0.0	0.0
Taxes paid at source abroad	0.2	0.2
Deferred tax liability	0.0	0.0
Total	7.2	7.3

7. Fixed assets and other long-term investments

Other long-term

expenditure	Total
0.8	14.0
-	0.4
-	-0.3
-	0.6
0.8	14.7

	12.1

-	-0.3
0.0	0.8
0.5	12.5
0.3	2.1
0.3
	0.4

		Buildings	Machinery	Other	Advance
EUR million Tangible assets	Land and waters	and construction	and equipment	tangible assets	payments in progress	Total
Acquisition cost Jan. 1	1.2	28.4	32.7	0.0	3.0	65.3
Increases	-	-	1.6	-	3.0	4.6
Decreases	-	-	-1.0	-	-	-1.0
Transfers between items	-	-	1.5	-	-2.1	-0.6
Acquisition cost Dec. 31	1.2	28.4	34.6	0.0	4.0	68.2
Accumulated depreciation
and write-downs Jan. 1	-	13.2	26.1	-	-	39.3
Accumulated depreciation
of decreases and transfers	-	-	-1.0	-	-	-1.0
Depreciation for the financial year	-	1.5	2.5	-	-	4.0
Accumulated depreciation Dec. 31	0.0	14.7	27.6	0.0	0.0	42.3
Revaluation	0.1	5.6	-	-	-	5.7
Balance sheet value Dec. 31, 2007	1.3	19.3	7.0	0.0	4.0	31.6
Balance sheet value Dec. 31, 2006	1.3	20.8	6.6	0.0	3.0	31.7

The undepreciated acquisition cost of machinery and equipment belonging the tangible fixed assets was EUR 24.7 million on 31.12.2007 (EUR 24.3 million 31.12.2006).

Notes to the Parent Company Income Statements and Balance Sheets

	Other long-term
Parent Company EUR million Investments	Subsidiary shares	Other shares and holdings	receivables from Group companies	Total
Acquisition cost Jan. 1	21.4	0.0	12.4	33.8
Increases	-	-	-	0.0
Decreases	-	0.0	-2.7	-2.7
Transfers between items	-	-	-	0.0
Balance sheet value Dec. 31	21.4	0.0	9.7	31.1
Balance sheet value Dec. 31, 2006	21.4	0.0	12.4	33.8

8. Deferred assets

EUR million	2007	2006
Tax related deferred assets	2.9	1.7
Other deferred assets	4.9	2.3
	7.9	3.9

9. Fianancial assets

EUR million	2007	2006
Other investments
Income fund interest-bearing papers	42.6	41.2
Cash and bank balances
Cash and balance in the bank accounts	7.5	6.9
Certificates of deposit	31.9	25.0
	39.3	31.8

Financial assets recognised at fair value through profit and loss include income fund investments which involve the short-term investment of liquid assets. The maturity of these income fund interest-bearing papers is at most one year. The income fund investments are publicly quoted securities, whose fair value is determined in the market.

The change in fair value has been recognised in the income statement group financial income and expenses.

Certificates of deposit consist of short-term, highly liquid investments whose maturity is less than 3 months and which are mainly involved in the short-term investment of liquid assets.

Fair value of off-balance sheet contracts made to hedge against exchange rate and interest rate risks

EUR million
Currency forwards	0.4	0.2
Fair value, total	0.4	0.2

The change in fair value has been recognised in the income statement group financial income and expenses.

10. Deferred tax assets and liabilities

EUR million	2007	2006
Deferred tax assets/liabilities, net	0.0	0.0

The deferred tax liability arising from revaluation has not been taken into account. If realized, the tax effect of revaluation would be EUR 1.5 million at the current 26% tax rate.

11. Shareholders' equity

The parent company's shares are divieded into series, with 3,407,385 series K shares (20 votes/share)and 14,810,979 series A shares ( 1 vote/share). In accordance with the Company Articles, series K shares can be converted into series A shares through a procedure defined in detail in the Company Articles.

EUR million	2007	2006
Share capital
Series A Jan.1	6.2	6.0
Converted from series K to A	0.0	-
Share issues	-	0.2
Series A Dec.31	6.2	6.2
Series K Jan.1	1.4	1.4
Converted from series K to A	0.0	-
Share capital Dec. 31	7.7	7.7
Reserve fund Jan.1	22.3	11.0
Share issues	0.0	11.3
Reserve fund Dec. 31	22.3	22.3
Profit from previous years Jan. 1	124.0	114.6
Dividends paid
Own shares	-15.5	-13.4
Translation difference	-0.3	-0.3
Profit from previous years Dec. 31	108.3	100.9
Profit for the financial year	22.7	22.9
Total equity	161.0	153.8
12. Obligatory provisions
EUR million	2007	2006

Other reserve 0.2 0.0 0.2 0.0

13. Non-current liabilities

The company has no loans that would mature after five years or a longer period.

14. Accrued expenses and deferred income

EUR million	2007	2006
Wages, salaries and wage-related liabilities	11.3	11.7
Tax liabilities	0.0	1.2
Other accrued expenses and deferred income	2.2	1.6
	13.5	14.5

15. Receivables and liabilities from other companies in the Vaisala Group

EUR million
Non-current loan receivables	9.7	12.4
Current loan receivables	1.4	1.5
Trade receivables	8.6	10.1
Prepaid expenses and accrued income	0.0	0.0
Total receivables	19.7	24.0
Trade payables	0.9	0.9
Accrued expenses and deferred income	0.0	0.0
Total liabilities	0.9	0.9

16. Contingent liabilities and pledges given

EUR million	2007	2006
For own loans/commitments
Guarantees	8.0	9.7
For Group companies
Guarantees	1.6	5.5
Other own liabilities
Pledges given	0.1	0.1
Leasing liabilities
Payable during the financial year	0.4	0.5
Payable later	0.4	0.4
	0.8	1.0
Total contingent liabilities and pledges given	10.5	16.2
Derivative contracts
EUR million

Capital of off-balance sheet contracts made to hedge
against exchange rate and interest risks
Currency forwards	14.3	11.9
Total capital	14.3	11.9

Largest shareholders, Dec. 31, 2007

	% of votes
		Series K Shares	Series A Shares	of total shares
Finnish Academy of Science and Letters	21.7	25.8	3.1	7.3
Novametor Oy	12.7	13.5	9.4	10.1
Mikko Voipio	7.7	8.8	2.2	3.4
Anja Caspers	7.0	8.3	1.3	2.6
Raimo Voipio	5.8	6.7	1.7	2.6
Tauno Voipio	4.2	4.6	2.0	2.5
Henki-Sampo Insurance Company	4.1	4.0	4.2	4.2
Inkeri Voipio	2.2	0.0	12.3	10.0
Minna Luokkanen	2.0	2.4	0.1	0.5
Jaakko Väisälä estate	1.6	1.8	1.1	1.2
Ilmarinen Mutual Pension Insurance Company	1.5	0.0	8.4	6.8
Tuulikki Laasonen	1.3	1.6	0.0	0.3
Nominee registered	4.0	0.0	22.6	18.4

Ownership structure by owner type, December 31, 2007

		%	% of	% of	%
	Number		Series K	Series A	of total
	of owners	of votes	Shares	Shares	shares
Companies	182	13.1	13.5	11.6	12.0
Financial and insurance institutions	18	4.9	4.0	8.7	7.8
Municipalities	11	2.0	0.0	11.2	9.1
Non-profit organizations	71	22.1	25.8	5.4	9.2
Private individuals	3,917	53.6	56.7	39.2	42.5
Outside Finland and nominee registered	33	4.3	0.0	23.8	19.4
Not transferred to the book-entry system		0.0	0.0	0.1	0.0
Total	4,232	100.0	100.0	100.0	100.0

Ownership structure by shareholding, December 31, 2007

Number of shares	Owners	% of owners	% of votes	% of total Owners of shares.	K shares	% of K shares	Owners of A shares	% of A shares
1-100	1,488	35.2	0.1	0.5	2	0.0	1,489	0.6
101-1000	2,312	54.6	1.1	4.5	18	0.3	2,309	5.5
1001-10000	343	8.1	2.9	5.2	26	3.9	336	6.3
10001-100000	68	1.6	18.2	12.9	23	24.1	60	12.7
100001-	21	0.5	77.7	76.8	7	71.7	18	74.9
Not transferred
to the book-entry system	-	-	0.0	0.0	-	0.0	-	0.1
Total	4,232	100.0	100.0	100.0	76	100.0	4,212	100.0

Vaisala Oyj's Board of Directors held and controlled 1,394,601 shares on 31 December 2007, accounting for 16.6% of the total votes (2006: 1,353,101 shares and 16.5% of the total votes).

Signing of the Board of directors' report and Financial statements

Vantaa, February 13, 2008

Raimo Voipio Stig Gustavson Mikko Niinivaara Chairman of the Board

Yrjö Neuvo Mikko Voipio Maija Torkko

Kjell Forsén President and CEO

Auditors' report

To the shareholders of Vaisala Corporation

We have audited the accounting records, the financial statements, the report of the Board of Directors and the administration of Vaisala Corporation for the period 1.1. – 31.12.2007. The Board of Directors and the Presi-dent and CEO have prepared the consolidated financial statements, prepared in accordance with International Financial Reporting Standards as adopted by the EU, as well as the report of the Board of Directors and the parent company's financial statements, prepared in accordance with prevailing regulations in Finland, contain-ing the parent company's balance sheet, income statement, cash flow statement and notes to the financial statements. Based on our audit, we express an opinion on the consolidated financial statements, as well as on the report of the Board of Directors and the parent company's financial statements and administration.

We conducted our audit in accordance with Finnish Standards on Auditing. Those standards require that we perform the audit to obtain reasonable assurance about whether the report of the Board of Directors and the financial statements are free of material misstatement. An audit includes examining on a test basis evidence supporting the amounts and disclosures in the report of the Board of Directors and in the financial statements, assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. The purpose of our audit of the administration is to ex-amine whether the members of the Board of Directors and the President and CEO of the parent company have complied with the rules of the Companies' Act.

Consolidated financial statements

In our opinion the consolidated financial statements, prepared in accordance with International Financial Re-porting Standards as adopted by the EU, give a true and fair view, as defined in those standards and in the Finnish Accounting Act, of the consolidated results of operations as well as of the financial position.

Parent company's financial statements, report of the Board of Directors and administration

In our opinion the parent company's financial statements have been prepared in accordance with the Finnish Accounting Act and other applicable Finnish rules and regulations. The parent company's financial statements give a true and fair view of the parent company's result of operations and of the financial position.

In our opinion the report of the Board of Directors has been prepared in accordance with the Finnish Account-ing Act and other applicable Finnish rules and regulations. The report of the Board of Directors is consistent with the consolidated financial statements and the parent company's financial statements and gives a true and fair view, as defined in the Finnish Accounting Act, of the result of operations and of the financial position.

The consolidated financial statements and the parent company's financial statements can be adopted and the members of the Board of Directors and the President and CEO of the parent company can be discharged from liability for the period audited by us. The proposal by the Board of Directors regarding the disposal of distribut-able funds is in compliance with the Companies' Act.

Vantaa, 13 February 2008

PricewaterhouseCoopers Oy Authorised Public Accountants

Mikko Nieminen Hannu Pellinen

Authorised Public Accountant Authorised Public Accountant

Annual General Meeting

Vaisala Oyj's Annual General Meeting will be held on Thursday March 27, 2008, at 6 p.m. at the company's head office, Vanha Nurmijärventie 21, 01670 Vantaa.

Agenda of the Annual General Meeting Items specified in Article 13 of the Articles of Association.

Right of attendance

Shareholders who are registered in the company's share register maintained by the Finnish Central Securities Depository Ltd by 17 March 2008 may attend the Annual General Meeting. Shareholders whose shares have not been transferred to the book-entry securities system may also attend the Annual General Meeting provided that such shareholders were registered in the company's share register before 21 October 1994. In such cases, shareholders must present evidence that their shareholding rights have not been transferred to the book-entry securities system.

Documentation

Documents relating to financial statements and the Board's proposals to the Annual General Meeting are available as copies for the shareholders to see at the company's head office in Vantaa, Vanha Nurmijärventie 21, for a week before the Annual General Meeting. On request, copies will be sent to shareholders.

Notice of attendance

Shareholders wishing to attend the Annual General Meeting must notify the company no later than 4 p.m. on Tuesday 18 March 2008. Notification can be made either by letter addressed to Vaisala Oyj, Nina Andersin, P.O.Box 26, FIN-00421 Helsinki, Finland, by telefax to +358 9 8949 2206, by e-mail at [email protected], or by telephone on weekdays between 9 to 11 a.m., tel. +358 9 8949 2201.

Letter authorizing a proxy to vote on behalf of a shareholder should be sent to the company before expiry of the notification.

Distribution of profit and remuneration to the members of the Board

The Board of Directors proposes to the Annual General Meeting a dividend of EUR 0.85 per share for 2007. The dividend will be paid to shareholders registered in the Register of Shareholders held by the Finnish Central Securities Depository Ltd on the record date April 1, 2008. The Board proposes that the dividend be paid on April 8, 2008. The Board proposes to the Annual General Meeting that the remuneration payable to the members of the Board of Directors to be elected at the Annual General Meeting for the term until the close of the Annual General Meeting in 2009 be as follows: EUR 35.000 for the Chairman and EUR 25.000 for each member.

Election of the members of the Board of Directors and auditors

Board members Mikko Niinivaara and Raimo Voipio are in turn to retire by rotation. Shareholders representing more than 10 percent of all the votes in the company have informed that they will propose to the Annual General Meeting held on 27 March 2008 the re-election of Mikko Niinivaara and Raimo Voipio. The Board proposes PricewaterhouseCoopers Oy and Mr Hannu Pellinen APA, to be selected as Vaisala Oyj's Authorized Public Accountants. The proposed members of the Board of Directors and the Authorized Public Accountants have given their consent for the election.

Vantaa February 13, 2008

Vaisala Oyj Board of Directors

Investor Calendar

Vaisala Oyj will publish three interim reports, in Finnish and in English, in 2008 as follows:

May 8, 2008 Interim report 1.1. - 31.3.2008 (Q1) Aug 7, 2008 Interim report 1.1. - 30.6.2008 (Q2) Nov 5, 2008 Interim report 1.1. - 30.9.2008 (Q3)

Annual General Meeting 2008 March 27, 2008 Vanha Nurmijärventie 21, Vantaa

Vaisala Capital Markets Day April 2, 2008 Vanha Nurmijärventie 21, Vantaa

Silent time

No analyst or investor meetings are arranged during a period of three weeks before the publication of annual financial results. Financial reports can be ordered from:

Vaisala Oyj Corporate Communications P.o.Box 26, 00421 Helsinki, Finland Tel. +358 9 8949 2744 Fax +358 9 8949 2593 e-mail: [email protected]

The Financial Statements 2007 brochure is published in Finnish and English. The brochure is distributed to all Vaisala shareholders on week 10 (March 3-9, 2008). The company's interim reports as well as other stock exchange releases and press releases are available on the Vaisala website at www.vaisala. com.

Vaisala Worldwide

Finland Vaisala Oyj

Po. Box 26, 00421 Helsinki Address: Vanha Nurmijärventie 21, 01670 Vantaa Finland Phone +358 9 894 91 Fax +358 9 8949 2227 e-mail: [email protected] Business ID: 0124416-2

Sweden Vaisala Oyj

Malmö Office

Drottninggatan 1 D, S-212 11 Malmö, Sweden Phone +46 40 298 991 Fax +46 40 298 992

Stockholm Office

Isafjordsgatan 22, B 5tr S-16440 Kista, Sweden

Germany Vaisala GmbH

Hamburg Office

Schnackenburgallee 41, D-22525 Hamburg Phone +49 40 839 030 Fax +49 40 839 03 110

Stuttgart Office

Bahnhofstrasse 3 73066 Uhingen Germany

Bonn Office

Adenauerallee 15 D-53111 Bonn, Germany Phone +49 228 249 710 Fax +49 228 2497 111

France Vaisala SAS

Paris Office

2, rue Stéphenson (escalier 2bis) F-78181 Saint-Quentin-en-Yvelines Cedex, France Phone +33 1 3057 2728 Fax +33 1 3096 0858

United Kingdom Vaisala Ltd

Birmingham Operations

Vaisala House 349 Bristol Road Birmingham B5 7SW, UK Phone +44 121 683 1200 Fax +44 121 683 1299

Newmarket Office

Unit 9, Swan Lane, Exning, Newmarket Suffolk CB8 7FN, UK Phone +44 1638 576 200 Fax +44 1638 576 240

USA Vaisala Inc.

Boston Operations

10-D Gill Street Woburn, MA 01801, USA Phone +1 781 933 4500 Fax +1 781 933 8029

Boulder Operations

194 South Taylor Avenue, Louisville, CO, 80027, USA Phone +1 303 499 1701 Fax +1 303 499 1767

Houston Office

1120 NASA Road, Suite 220-E Houston, TX 77058, USA Phone +1 281 335 9955 Fax +1 281 335 9956

Minneapolis Operations

6300 34th Avenue South Minneapolis, Minnesota 55450, USA Phone +1 612 727 1084 Fax +1 612 727 3895

San Jose Office

6980 Santa Teresa Blvd, Suite 203 San Jose, CA 95119-1393, USA Phone +1 408 578 3671 Fax +1 408 578 3672

Tucson Operations

2705 East Medina Road Tucson, Arizona 85706, USA Phone +1 520 806 7300 Fax +1 520 741 2848

Westford Operations

7A Lyberty Way Westford, MA 01886 USA Phone +1 978 692 9234 Fax +1 978 692 9575

Canada Vaisala Inc.

Canada Office

37 De Tarascon Blainville, Quebec J7B 6B7, Canada Phone +1 450 430 0880 Fax +1 450 430 6410

China Vaisala China Ltd.

Beijing Office

Floor 2, EAS Building No. 21, Xiao Yun Road, Dongsanhuan Beilu Chaoyang District, Beijing, P.R. China 100027 Phone +86 10 85261199 Fax +86 10 85261155

Shenzhen Branch

Building 1 17B China Phoenix Building Shennan Avenue Futian District Schenzhen C-518026 P.R. China Phone +86 755 8279 2442 Fax +86 755 8279 2404

Shanghai Branch

6F 780 Cailun Lu Pudong New Area 201203 Shanghai P.R. China Phone + 86 21 5132 0656 Fax + 86 21 5132 0657

Malaysia Vaisala Oyj

Regional Office Malaysia

Level 36, Menara Citibank 165 Jalan Ampang 50450 Kuala Lumpur Malaysia Phone +60 3 2163 3363 Fax +60 3 2164 3363

Australia Vaisala Pty Ltd

Melbourne Office

3 Guest Street Hawthorn, VIC 3122 Australia Phone +61 3 9818 4200 Fax +61 3 9818 4522

Japan

Vaisala KK

Tokyo Office

42 Kagurazaka 6-Chome Shinjuku-Ku Tokyo 162-0825, Japan Phone +81 3 3266 9611 Fax +81 3 3266 9610

United Arab Emirates, UAE

Vaisala Oyj

Regional Office United Arab Emirates

Khalifa Al Naboodah Building, Ist Floor Sheikh Zayed Road Dubai, United Arab Emirates Phone: +971 4 3219112 Fax: +971 4 3219113

AI Terminal

Vaisala Oyj

3246_10-k_2008-03-06_809913ba-1010-4da7-b46f-79b4fa893196.pdf

Financial Report 2007

Contents

Consolidated Financial Statements (IFRS)

Financial Ratios

Parent Company Financial Statements (FAS)

Year of Renewal, 2007

Online Annual Report

Vaisala in Short

Key Figures in Graphs

Overview

Outlook

Market situation, net sales and order book

Performance and balance sheet

Research and development

Capital expenditure

Vaisala Measurement Systems

Vaisala Instruments

Board of Directors' Report 2007

Vaisala Solutions

Personnel

Changes in Vaisala Corporation's management

Risk management

Organization of risk management

Near-term risks and uncertainties

Vaisala's share

Treasury shares and parent company shares

Board of Directors

Members of the Board

Term of office of members of the Board

President and CEO

Group structure

Environment

Positive environmental aspects for customers

Vaisala is a signatory to the voluntary energy efficiency agreement

Board of Directors' Report 2007

Proposals to the Annual General Meeting

Events after the financial year

Consolidated Income Statement

Consolidated Balance Sheet

Consolidated Balance Sheet

Consolidated Cash Flow Statement

Consolidated Statement of Changes in Shareholders' Equity

1.1. Accounting Principles for the Consolidated Financial Statements

Segment reporting

Accounting Principles for the Consolidated Financial Statements (IFRS)

Principles of consolidation

Subsidiaries

Associated companies

Foreign currency items

Tangible fixed assets

Intangible assets

Goodwill

Other intangible assets

Research and development expenditure

Borrowing costs

Inventories

Lease agreements

The Group is the lessee

The Group is the lessor

Impairment

Trade and other receivables

Financial assets and financial liabilities The IAS 32 and IAS 39 standards relating to financial instruments have been applied as of 1 January 2005.

Derivative contracts and hedging activities

Employee benefits

Pension obligations

Share-based payments

Provisions

Income tax

Principles of revenue recognition

Sales of goods and services rendered

Long-term projects

Other revenue received by the Group

Other operating income and expenses

Grants

Held-for-sale assets and discontinued operations

Allocation of acquisition cost

Revenue recognition