Financial statements 2008

Report of the Board of Directors 02
Consolidated income statement 10
Consolidated balance sheet 11
Consolidated statement of changes in shareholders' equity . 12
Consolidated cash flow statement 13
Notes to the consolidated financial statements 14
Key ratios 33
Shares and shareholders 34
Formulas for the key ratios 36
Parent company income statement 37
Parent company balance sheet 38
Parent company cash flow statement 39
Notes to the parent company financial statements 40

The Board of Directors' proposal concerning the
loss for the financial year 47
Auditors' report 48

1 REPORT OF THE BOARD OF DIRECTORS 2008

Biohit develops and manufactures laboratory equipment and accessories as well as diagnostic tests and analysis systems for use in research institutions, healthcare and industrial laboratories. Biohit operates in two business areas: the liquid handling business and the diagnostics business. The company is developing both its business areas as separate units with a view to growing into a profitable and leading global supplier in both product areas.

Biohit employs approximately 370 people in eight countries. The company has production facilities in Finland (Kajaani and Helsinki) and China (Suzhou). Its subsidiaries in Germany, France, the United Kingdom, Russia, China, Japan and the United States focus on product sales and marketing. Biohit's products are also sold through about 450 distributors in 70 countries.

Biohit's Series B share (trading code BIOBV) is quoted on NASDAQ OMX Helsinki in the Small cap/Healthcare group.

Net sales

The Biohit Group's net sales for the financial year totalled EUR 35.1 million (EUR 33.0 million in 2007; EUR 31.4 million in 2006), representing a rise of 6% on 2007. In a change to previous reporting practices, changes in currency exchange rates for internal receivables are now presented under financial items. Using the previous reporting method, net sales would have amounted to EUR 35.6 million (EUR 32.8 million in 2007), representing growth of 9%.

Sales and maintenance of liquid handling products accounted for 96% of net sales during the reporting period. The net sales of the liquid handling business for the entire reporting period amounted to EUR 33.6 million (EUR 31.4 million in 2007; EUR 29.5 million in 2006) and the net sales of the diagnostics business to EUR 1.5 million (EUR 1.7 million in 2007; EUR 1.9 million in 2006). Sales of test kits accounted for EUR 1.2 million of the net sales of the diagnostics business (EUR 1.1 million in 2007).

Trends in the Group's net sales have been good in all its main market areas since the end of the first quarter, and there has been brisk growth in the Asian market in particular. The global economic downturn did not have a substantial impact on net sales trends during the 2008 financial year.

When calculated in local currencies, the Group's net sales growth for the entire reporting period has been better than reported growth. When calculated using comparable exchange rates, net sales growth in the liquid handling business for the entire reporting period was 10%, while the reported figure was 6%.

Excluding the impact of instrument sales, growth for the diagnostics business totalled 14% when calculated using comparable currency exchange rates. Reported net sales growth exclusive of instrument sales was 8%.

Result

The operating profit was EUR 1.3 million, representing 3.7% of net sales (2007: operating loss EUR 0.2 million, -0.6% of net sales; 2006: operating loss EUR 0.1 million, -0.5% of net sales). The profit for the financial year totalled EUR 0.9 million, or 2.6% of net sales (2007: loss EUR 1.5 million, -4.5% of net sales; 2006: loss EUR 0.8 million, -2.7% of net sales).

The operating profit of the liquid handling business amount-

ed to EUR 3.7 million (operating profit EUR 2.7 million in 2007; operating profit EUR 2.2 million in 2006), while the operating loss of the diagnostics business totalled EUR 2.4 million (operating loss EUR 2.9 million in 2007; operating loss EUR 2.4 million in 2006).

Return on equity was 7.4% (-11.9 % in 2007; -6.1 % in 2006).

A minor sales downswing led to slightly weaker earnings trends in the early year. In order to improve earnings, the company began a savings and operational efficiency programme in June 2008. Increased efficiency and a reduction in fixed costs were achieved through this programme. These measures, coupled with the rise in sales that began in the second quarter, improved the Group's profitability. The euro's weaker trend against other currencies has also increased profitability.

Balance sheet

On 31 December 2008, the balance sheet total stood at EUR 27.1 million (EUR 27.3 million in 2007; EUR 27.3 million in 2006) and the equity ratio was 46.5% (43.6% on 31 Dec. 2007; 49.4% on 31 Dec. 2006). The rise in the equity ratio was primarily due to the profit for the reporting period and a decrease in both non-current financial liabilities and current liabilities.

Liquidity

Cash flow from operating activities during the financial year was EUR 1.2 million (EUR 1.1 million in 2007; EUR 0.2 million in 2006). At the end of the financial year, the Group's liquid assets totalled EUR 1.3 million (1.1 million in 2007; EUR 0.9 million in 2006). The company acquired EUR 0.6 million in new long-term financing in 2008. Interest-bearing liabilities totalled EUR 9.1 million (EUR 9.1 million in 2007; EUR 7.7 million in 2006). Current ratio was 2.5 (2.3 in 2007; 2.2 in 2006).

Research and development

Research and development expenditure during the reporting period amounted to EUR 2.0 million (EUR 2.0 million in 2007; EUR 1.7 million in 2006), representing 6% of net sales (6% in 2007; 6% in 2006). EUR 0.4 million (EUR 0.4 million in 2007; EUR 0.3 million in 2006) in development expenditure was capitalised during the period.

Investments

Gross investments during the reporting period totalled EUR 1.2 million (EUR 2.1 million in 2007; EUR 1.9 million in 2006). Investments were primarily for increasing production capacity and the purchase of equipment used in the manufacture of liquid handling products in Kajaani.

Personnel

The average number of Group personnel during the reporting period was 369 (352 in 2007 and 310 in 2006). Of these, 171 (178 in 2007; 162 in 2006) were employed by the parent company and 198 (174 in 2007; 148 in 2006) by subsidiaries. The Biohit Group's salaries and bonuses for the financial year totalled EUR 11.8 million (EUR 11.6 million in 2007; EUR 10.6 million in 2006).

Administration

The Annual General Meeting held on 21 April 2008 decided that the number of members of the Board of Directors is six. The AGM appointed Tero J. Kauppinen, Kalle Kettunen, Reijo Luostarinen, Mikko Salaspuro, Osmo Suovaniemi, and Mårten Wikström as members of the Board. Reijo Luostarinen has acted as Chairman of the Board.

Professor Osmo Suovaniemi is the company's President and CEO.

The AGM appointed authorised public accountants Ernst & Young Oy as auditor, with Erkka Talvinko, Authorised Public Accountant, as chief auditor.

New members were appointed to the Diagnostics Management Team during the reporting period: Aino Telaranta-Keerie (Research and development), Marjo Nikulin (Production and quality) and Tapani Tiusanen (Instruments and technologies). The Diagnostics Management Team focuses on the diagnostics business and its development, while the Liquid Handling Management Team focuses on the liquid handling business and its development as well as the administration of the Group as a whole.

At its meeting on 28 January 2009, Biohit's Board of Directors approved a Corporate Governance code, which is presented in more detail in the section following this report.

Liquid handling business

Biohit's liquid handling business develops, manufactures and markets laboratory equipment and accessories for the pharmaceutical, food and other industries. Biohit's products are also used in research institutions, universities and hospitals. The product range includes mechanical and electronic pipettes as well as disposable tips. While the majority of products are marketed under the Biohit brand, the company also sells customised OEM (Original Equipment Manufacturer) products that complement the diagnostic test and analysis systems of many global companies. In addition, the company offers maintenance, calibration and training services for liquid handling products through its distributor network.

According to Biohit's own estimates, the total market for pipettes and disposable tips has grown by about 5–10% per annum. Exchange rate fluctuations and the weakened economic climate in the United States have, however, had an unfavourable impact on growth, particularly in the market for pipettes. The global economic downturn has also slowed growth in other markets. Despite this, Biohit has succeeded in growing sales in certain market areas, sometimes even exceeding the total market average.

Main events of the financial year

2008 saw favourable trends in sales of liquid handling products in almost all market areas. Net sales showed a significant improvement after the end of the first quarter and grew by 7% on the previous year. Net sales growth and increased operational efficiency improved segment profitability, with operating profit totalling EUR 3.7 million (EUR 2.7 million 1-12/2007).

Biohit has continued to invest in R&D and launched new filter tips for pipettes in 2008. The tips are manufactured to high quality and sterility standards at the company's production facility in Kajaani. Biohit has also invested in equipment

for manufacturing the new tips. Demand for filter tips has increased as laboratory quality standards have become stricter. Deliveries have already begun and the new tips have been favourably received by customers.

The Proline Plus mechanical pipette launched at the end of 2007 has also been well received and sales trends during the reporting period have exceeded expectations.

Biohit's after-sales service business has been growing, particularly at the company's own maintenance units. Biohit's calibration laboratory in Germany received accreditation from the German authorities (DKD) in November. Biohit now has accredited laboratories in four countries: Finland, France, Germany and the UK. Accreditation is based on internationally recognised criteria and is a method of assuring laboratory competence and credibility. Biohit's after-sales service business seeks to increase product lifecycle management and customer satisfaction.

The company also continued to focus on R&D projects, OEM co-operation, strengthening the Biohit brands, and using the Lean system to develop cost-effective production processes and logistics at production facilities in China and Finland.

Diagnostics business

Biohit's diagnostics business develops, manufactures and markets tests and analysis systems primarily for the diagnosis, screening and prevention of diseases of the gastrointestinal tract. The product range includes the GastroPanel and Gastro-View examinations and the ColonView quick test for primary healthcare; lactose intolerance and Helicobacter pylori quick tests for specialised healthcare; and instruments and analysis systems for laboratories. The company runs a service laboratory in Finland and in the UK.

In addition to its individual tests, Biohit also offers Gastro-Panel Laboratories on a turnkey basis. GastroPanel Laboratories, which are split into small-scale (price EUR 150,000– 500,000) and large-scale (price EUR 4.3 million), come with GastroPanel tests, pipettes, instruments, and training and maintenance services. Increased demand for GastroPanel Laboratories would also significantly raise net sales in the diagnostics business.

Main events of the financial year

Sales trends in the diagnostics business did not reach a satisfactory level during 2008 and total net sales fell by 9% on the previous year. The majority of net sales are, however, generated by test kit sales, which have grown by 8%. The impact of instruments on net sales has decreased. Although increased operational efficiency and reductions in costs improved the profitability of the diagnostics business, the segment's operating result was once again in the red with a loss of EUR 2.4 million (loss of EUR 2.9 million 1-12/2007).

Biohit's reliable and cost-effective diagnostics products generate cost savings for the healthcare sector, which is under pressure to cut costs due to the global economic downturn. Consumer interest in examinations for abdominal complaints is also increasing all the time.

Biohit aims to get its GastroPanel and GastroView examinations introduced into national healthcare systems and local authority reimbursement schemes. Slow progress in obtaining approvals from the relevant authorities has, however, posed a

major challenge. The US Food and Drug Administration (FDA) has still not approved Biohit's application concerning the GastroPanel Pepsinogen I and II tests. Although Biohit delivered the requested further clarification during the reporting period, the FDA did not deem it sufficient. Biohit will now have to provide more extensive research material and make a new application to the FDA. The timetable for this process is therefore currently difficult to estimate.

The company is, however, continuing to prepare for test kit marketing in the USA by, for example, applying for patents. During the reporting period, the United States Patent and Trademark Office granted a patent for a test panel to diagnose atrophic gastritis (GastroPanel).

Biohit is also focusing primarily on those countries in which its test panels have already been granted approval by the relevant authorities. Test kit marketing efforts have also been upped in Finland with satisfactory results.

The focal point for diagnostics research and development during the period has been improvements to existing products and the commercialisation of new products. ColonView – Biohit's new quick test for the early detection of colorectal cancer - was launched during 2008. The ColonView tests offer an easy and cost-effective way of finding patients who have fecal occult blood and therefore a higher than average risk of colorectal cancer or precancerous lesions (adenomas). The test also provides data on other potential diseases of the gastrointestinal tract that are associated with intestinal bleeding. The test has been favourably received and will be used in a Finnish comparison study that is scheduled to begin soon. Participation in studies is part of the process of bringing diagnostics products to market.

Incorporation of the diagnostics business

Measures to spin off the diagnostics business continued during the period. As the current global economic climate has made finding a suitable partner difficult, the diagnostics business has instead been focusing on developing its operations.

Shares and shareholders

Biohit's shares are divided into Series A and B shares. Series A shares confer twenty (20) votes at General Meetings and Series B shares confer one (1) vote. However, the dividend paid for Series B shares is higher than that paid for Series A shares by two (2) per cent of its nominal value.

In the event of the dissolution of the company through a merger or other reason, Series A and B shareholders have an equal right to an equally-sized portion of the compensation paid for the dissolution. If a Series A share is transferred to a Series B shareholder or a new external shareholder, the shareholder receiving the share must notify the Board of Directors without delay and Series A shareholders have the right to buy back shares in accordance with the provisions of the Articles of Association.

On 28 August 2008, at Professor Pentti Sipponen's request and in accordance with the Articles of Association, Biohit Oyj's Board of Directors decided to convert 900,000 Series A shares owned by Sipponen into the equivalent number of Series B shares. The new Series B shares became available for public trading on 5 September 2008.

Distribution of the company's share capital by share type after the previously mentioned conversion:

	2008	2007
	No.		No.
	of shares	EUR	of shares	EUR
Series A shares
(20 votes/share)	2,975,500	505,835	3,875,500	658,835
Series B shares
(1 vote/share)	9,962,127	1,693,562		9,062,127 1,540,562
Total	12,937,627		2,199,397 12,937,627 2,199,397

Liquidity provision

Biohit Oyj gave notice on its market making agreement with Remium AB during the financial year. The agreement ended on 6 June 2008 in accordance with the contract. Market making began on 1 June 2007.

Convertible bonds

The main terms of the convertible bonds are presented in the Notes to the Financial Statements.

Capital loans

Biohit's principal shareholders and the State Treasury have granted the company a capital loan of EUR 1.2 million for product and other business-related development. The accumulated interest on the capital loan at 31 December 2008 totals EUR 0.6 million. The loan meets the provisions laid down in Chapter 12 of the Finnish Companies Act. The main terms of the loan are presented in the Notes to the Financial Statements.

Short-term risks and uncertainty factors

The main objective of Biohit's risk management policy is to identify major risks associated with the Group's business operations and environment. The cost-effective management and monitoring of these risks will then ensure that the company's strategic and operational targets can be reached as intended.

The Board of Directors carries the main responsibility for the company's risk management policy and monitoring its implementation. The President and CEO works with the parent company's operative management and subsidiaries' managements to ensure that the Group's risk management is duly arranged. The parent company's operative management is responsible for identifying and managing the risks involved within each business area, while subsidiaries' managements are responsible for those in their own market areas.

Risk management is one of the areas covered by Biohit's business planning and monitoring system, which regularly monitors the risks associated with the company's business operations, identifies any changes and, if necessary, takes appropriate action.

The most significant risks and uncertainty factors inherent in Biohit's business operations concern the diagnostics business, Group liquidity, and trends in currency exchange rates.

If the diagnostics business does not meet the substantial growth expectations that have been set, this may also weaken the profitability of the Group as a whole. The long-term failure of the diagnostics business to meet its growth expectations could also lead to a EUR 2.5 million impairment of goodwill. In 2009, Biohit will work to boost sales and marketing by focusing on those market areas in which a breakthrough can be expected first. The company will also alter the cost structure of the diagnostics business to make it flexible enough to adapt to its operating income.

The Group's profitability improved on 2007 and this led to a rise in the equity ratio, which was 46.5% at year-end. Although increased profitability has also bolstered the Group's financing position, liquidity remains at only a satisfactory level. The global economic downturn could also impact sales of the Group's products, which would weaken liquidity. 2009 investments will therefore be reasonably moderate and business solutions will seek the most cost-effective alternatives.

Weaker trends in the external value of the euro against the US dollar and the Japanese yen have improved the Group's profitability during the reporting period. A strengthening of the euro would likewise have a detrimental impact on profitability. The company seeks to protect itself from exchange rate risks by making procurements in currencies other than the euro.

Outlook for 2009

The Group experienced favourable trends in net sales during 2008 and these have also continued throughout the first month of 2009. Trends in the global economy during 2009 may, however, lead to fewer investments in healthcare, research and R&D than in previous years. Cost cutting on research in the healthcare sector, and in particular the pharmaceutical industry, could be unfavourably reflected in net sales of both liquid handling and diagnostics products.

However, the company estimates that total net sales will continue to grow in 2009. On the basis of factors such as, among others, currency exchange rate trends in target markets, net sales growth in traditional liquid handling products may not necessarily match that of 2008. Growth in the diagnostics business is, however, expected to be substantially greater than in 2008 due to, for example, new product launches. Growth in the diagnostics business will now be sought solely through test kit sales, as sales of instruments are continuing to fall.

Earnings trends in 2009 will be largely dependent on sales of liquid handling products. Continued growth in the diagnostics business will also improve the Group's profitability and enable the investments required to further business development. Biohit estimates that favourable trends in net sales in both of its business segments will lead to a profit in 2009.

Events after the close of the financial year

Biohit launched new pipette maintenance and calibration software after the close of the reporting period. The modulebased Quanta software range is suitable for all laboratories and maintenance companies that carry out pipette maintenance and calibration. Quanta rounds out Biohit's liquid handling range and promotes lifecycle management for products that are already in use.

Gastropäivät (the Finnish Gastroenterology Seminar) was held in Helsinki on 12–13 February 2009. Researchers from the University of Helsinki and the Helsinki University Central Hospital presented the results of clinical trials concerning Biohit's BioCyst capsules, which are currently still under development. The trials indicate that the capsules will help reduce the cancer risk posed by acetaldehyde in an anacidic stomach.

When taken with meals, Biohit's BioCyst capsules neutralise acetaldehyde in the stomach. Biohit seeks to bring its Bio-Cyst capsules to market both in Finland and abroad during 2009.

After the end of financial year, Biohit began cooperation with HUSLAB, a laboratory enterprise owned by the Hospital District of Helsinki and Uusimaa (HUS). GastroPanel and GastroView, which are intended for use as primary examinations in primary and occupational healthcare, have been introduced into the laboratory analysis offered by HUSLAB in Finland under the name 'Mahalaukun biomerkkiainetutkimus' (in Finnish only: www.huslab.fi / Lähete- ja tutkimuspyyntölomakkeet / Lähetteet aakkosjärjestyksessä; see, 'Mahalaukun biomerkkiainetutkimus'). HUSLAB offers physicians the chance to prescribe a GastroPanel or GastroView examination. This not only cuts healthcare costs but also promotes the early diagnosis of gastric diseases and furthers the prevention of, for example, gastric cancer, peptic ulcer disease, vitamin B12 deficiency, and many other serious diseases.

After the end of the financial year, Biohit Oyj's UK subsidiary spun off its diagnostics business as a subsidiary of its own. This company, Biohit Healthcare Ltd, will focus primarily on the UK market.

The board of directors' proposal for the disposal of earnings and distribution of other non-restricted equity

The parent company's distributable funds amount to EUR 9.5 million, which comprises non-restricted equity of EUR 12.2 million and an accumulated loss of EUR 2.7 million. The Board of Directors proposes that no dividend be paid and that the EUR 945,125.10 profit for the financial year be transferred to retained earnings.

Information required by current legislation, such as key financial and per-share figures, and information on share turnover, share price trends and related party transactions, are presented in the Notes to the Financial Statements.

CORPORATE GOVERNANCE

Biohit Oyj is a Finnish public limited company whose Series B share is quoted on NASDAQ OMX Helsinki in the Small cap/ Healthcare group. The Biohit Group (hereafter abbreviated as 'Biohit') comprises the parent company Biohit Oyj and its foreign subsidiaries, which primarily focus on sales and marketing for Biohit Oyj's products.

Biohit's administration complies with current legislation, the rules and regulations of NASDAQ OMX Helsinki Oy, and Biohit Oyj's Articles of Association. Biohit Oyj also follows the Finnish Corporate Governance Code for listed companies that was issued by the Securities Market Association in October 2008 and came into force on 1 January 2009. The Code covers the following areas:

Annual General Meeting

The tasks of the General Meeting

The General Meeting is Biohit's highest decision-making body. It meets once a year (Annual General Meeting, AGM) or more frequently as required (Extraordinary General Meeting, EGM). The AGM is held annually by the end of April. An EGM may be held at the request of the Board of Directors or when stipulated by law. The Board of Directors calls General Meetings and presents issues for consideration at the meeting. General Meetings deal with issues that are the business of General Meetings as set out in the Finnish Companies Act and Biohit's Articles of Association. According to the Finnish Companies Act, company shareholders also have the right to have issues presented for consideration by the General Meeting.

The major issues handled by the General Meeting include:

Changes to the Articles of Association
Share issues
Determining the number of members on the Board of Directors and electing its members
Electing an auditor
Approving the financial statements
Deciding on the distribution of profit and other funds

Notice of Annual General Meeting

A Notice of Annual General Meeting will be published in Helsingin Sanomat and Kauppalehti, and also on the company's website. The Notice will include the time and place of the meeting, the proposed agenda, any measures that need to be taken by participating shareholders, the record date, the address of the company's website, and where to obtain the material for the meeting. In addition to the agenda, the invitation will also include the nominees for the Board of Directors and the auditor. Nominees must have accepted their nomination and must be supported by shareholders possessing a total of at least 10% of the votes conferred by the company's shares. In addition to the Notice of Annual General Meeting, at least 21 days before the meeting, the company's website will also present the details of the Board nominees and the total number of shares and votes, by type of share, on the date the meeting was called. The Board's proposals and the documents to be presented at the meeting will also be made available.

The date of the AGM will be set so as to enable as many shareholders as possible to attend. Biohit Oyj's Board of Directors monitors trends in the company's shareholder structure and, if required, will take action to ensure that shareholders can participate to the fullest extent possible in decision-making at the AGM.

AGM attendance and publishing decisions

Shareholders must register in advance by the date given in the Notice of Annual General Meeting. Shareholders can attend the meeting in person or may nominate a proxy. Both shareholders and proxies may have an assistant at AGMs.

In addition to shareholders, AGMs are attended by the Chairman of the Board of Biohit Oyj, at least half of the Board members, the President and CEO, and the principal auditor. Unless there is a cogent reason for absence, all first-time Board nominees must attend the AGM.

Minutes are taken at the AGM, and these minutes are made available to shareholders on the company's website one (1) week after the meeting. Any decisions reached are published in a stock exchange bulletin immediately after the AGM.

Share series

Biohit's shares are divided into two series: Series A and B shares. Series A shares confer twenty (20) votes at General Meetings and Series B shares confer one (1) vote. However, the dividend paid for Series B shares is higher than that paid for Series A shares by two (2) per cent of its nominal value. Series A shares are governed by surrender regulations, which are set out in more detail in Article 13 of the company's Articles of Association.

Board of Directors

Composition and term of office

The Board of Directors, which comprises at least five (5) members elected by the Annual General Meeting, is responsible for the administration and appropriate organisation of the Group's business operations. The Board of Directors elects a chairman from amongst its members.

Those elected to the Board of Directors are expected to have the required competence for their tasks and sufficient time to carry out their duties. The majority of Board members should be independent of the company's major shareholders. The Board of Directors evaluates members' independence in accordance with Corporate Governance recommendation 15. Members must provide the Board with sufficient information on their competence and independence, including any changes in these details. After 1 January 2010, the Board must include both men and women.

Board membership commences at election by the AGM and lasts until the end of the next AGM.

Board members are presented in the section Board of Directors and their shareholdings are detailed in the Insider Register.

The tasks of the Board of Directors

The Board of Directors is responsible for the administration and appropriate organisation of business operations. The areas of responsibility laid down in the written rules of procedure approved by the Board are as follows:

To develop shareholder value.
To ensure the appropriate organisation of accounting and financial management.
To confirm the parent company and consolidated financial statements and the Report of the Board of Directors for the financial year now ended.
To confirm the interim reports for each quarter at the end of March, June and September.
To decide on Biohit's business plan, budget and investment plan.
To decide on Biohit's financing and risk management policies.
To approve management remuneration and incentive schemes.
To appoint the President and CEO.
To decide on Biohit's strategy, organisational structure, investments and other wide-reaching and significant issues.

The company's operative management draws up reports on the business development of the Group and its units, and the Board of Directors bases its decisions on these reports.

Board meetings and self-assessment

The Chairman is responsible for calling Board meetings and arranging Board activities. In general, the Board convenes once a month, that is, 10–12 times per year. When necessary, Board meetings are held more frequently or by teleconference. The meeting schedule for the entire term will be confirmed in advance.

The Board assesses its activities and working methods once a year. A self-assessment is carried out and discussed at a meeting of the Board.

The Board decides on the internal division of duties so as to best harness the expertise and experience of its members.

The scope of Biohit's business operations does no require the appointment of an Audit Committee, and no other committees have been appointed to assist the Board.

President and CEO

The President and CEO is responsible for the day-to-day management of the company in accordance with the instructions and regulations given by the Board of Directors. The President and CEO of the parent company is elected by the Board and also acts as Group President. The President also ensures the legality and reliable organisation of the company's accounting and financial management. The terms of the President's employment are laid down in a written contract that is approved by the Board of Directors. The President cannot be elected Chairman of the Board.

The President is presented in the section President and CEO and his or her shareholdings are in the Insider Register.

Management

Group Management Teams

Biohit has two Management Teams. The Diagnostics Management Team focuses on the diagnostics business and its development, while the Liquid Handling Management Team focuses on the liquid handling business and its development, as well as Group-level administration.

The duty of the Management Teams is to assist the President and CEO in planning and monitoring the Group's business operations, in managing daily operations, and in preparing matters to be submitted for consideration by the parent company's Board.

The Management Teams comprise the President and CEO and the directors of Group functions. The following functions are represented: Sales and Marketing, Production, Finance, Research and Development, Administration, and Quality Systems. The President and CEO, or in his absence the Director of Administration, acts as chairman of the Management Teams.

The President and CEO appoints Management Team members and approves their employment contracts in accordance with the instructions given by the Board of Directors.

The Liquid Handling Management Team meets every other week as directed, and the Diagnostics Management Team meets once a month.

The Management Teams are presented in the section Management Teams and their shareholdings are in the Insider Register.

Managing directors of subsidiaries

The managing directors of subsidiaries and their Boards of Directors are responsible for the management of subsidiary operations. Subsidiaries are responsible for the sales and marketing of Biohit's products in their market areas. The subsidiaries' managing directors operate under the management and supervision of the President and CEO and the Director of Administration. Each subsidiary's Board comprises its managing director and the requisite number of members of Biohit's Management Teams.

Each subsidiary's managing director is responsible for ensuring that business operations are managed, planned, monitored, reported on and developed in accordance with the Group's operating principles.

Compensation

The Annual General Meeting approves the fees of the Board of Directors. Members receive monetary compensation, and there is no share-based incentive scheme for Board members.

The fees paid to Board members during the financial year now ended, as well as the fees paid for consultancy and on the basis of employment contracts, are detailed in the section Board membership fees and other benefits.

The Board approves the President and CEO's fees and terms of employment. Like other Board members, the President is also paid an additional fee for Board membership. The fees paid to the President during the financial year now ended, as well as the President's main terms of employment, are detailed in the section Management fees and other benefits.

The President approves the fees and terms of employment of Management Team members. Biohit's Board of Directors has approved the principles of the incentive schemes for Management Team members and the President. Bonuses are determined by the net sales and earnings trends of each person's area of responsibility. The maximum bonus that can be received depends on each person's monthly salary and can total no more than three month's salary.

The President and CEO approves the salaries and profitbased incentives of subsidiaries' management in accordance with the instructions given by Biohit Oyj's Board of Directors. Profit-based incentives depend on the sales and earnings trends of each unit's product segments.

Biohit does not employ any incentive schemes that pay management in the company's own shares.

Internal control, risk management and internal audit

Internal control

Subsidiaries report on business and earnings trends to Group Management on a monthly and quarterly basis. Group Management reports to the Board of Directors on Group-level operations. The Board and the President and CEO decide on Group-level strategy and operational procedures.

The Liquid Handling Management Team decides, on the basis of the instructions given by the Board, on the Group's steering, financing and investments.

The Boards of subsidiaries follow business development at the subsidiary level and monitor that the steering instructions approved by the parent company and any other procedures are duly followed. Each subsidiary's Board usually convenes after each calendar quarter. Subsidiary Boards work with financial reports and the written interim reports drawn up by subsidiary management.

The Biohit Group's steering and control is carried out in accordance with the management system described above. The company provides all the reporting systems required for the monitoring of operations and financial management.

The parent company's financial department provides instructions for drawing up interim reports and financial statements, and prepares the consolidated financial statements. The parent company's financial department retains central control of funding and administrative matters, and is also responsible for the management of interest and exchange rate risks. The managing directors of subsidiaries ensure that subsidiary reporting is carried out in accordance with the instructions given by Group Management. The parent company's administrative department controls and provides instructions on Group-level personnel policies and any agreements made within the Group.

Risk management

The major short-term risks and uncertainty factors affecting Biohit's business operations are presented in detail in the Report of the Board of Directors, and this information is updated throughout the year in the Financial Statement Bulletin and interim reports.

Internal audit

Biohit has not appointed a separately organised function for internal auditing purposes. The Group's financial management holds primary responsibility for the practical implementation of the internal audit.

The Group has all the reporting systems required for financial management and monitoring business development. The reporting systems produce monthly financial data to ensure that the financial management instructions approved by the parent company on, for example, authorities are being adhered to. The Group's auditor and the auditors of each subsidiary evaluate the effectiveness of the internal audit both in connection with the external audit and through spot checks throughout the financial year.

Insider regulations

Insider guidelines

Biohit Oyj applies the Guidelines for Insiders approved by NASDAQ OMX Helsinki Oy, as well as any relevant amendments.

Permanent insiders and insider registers

According to securities market legislation, Biohit's permanent insiders comprise the members of the parent company's Board of Directors, the President and CEO, and the principal auditor. Biohit's Board of Directors has decided that the company's Management Team members will also be classed as permanent insiders.

In addition to the public register of insiders, the company also keeps a non-public register of insiders that lists both permanent insiders and project-specific insiders. People listed in the non-public register as permanent insiders are those who regularly receive inside information as part of their business activities. Project-specific insiders are those people who receive inside information in conjunction with a specific project.

Insider control

Biohit's head of legal affairs is responsible for insider control. He or she ensures that insiders are aware of insider regulations and adhere to trading restrictions. For example, permanent insiders are not allowed to trade Biohit securities for 21 days before the publication of the company's financial statement bulletin and interim reports. Project-specific insiders are not allowed to trade Biohit securities before the project has been made public or discontinued.

Audit

The auditor elected by the AGM is responsible for the statutory audit. According to the Articles of Association, the company must have one auditing firm that has been approved by the Central Chamber of Commerce. The auditing firm announces the name of the individual auditor who will assume principal responsibility for conducting the audit. The auditor's term of office begins during the current financial year and ends at the next AGM.

The auditors issue their statutory report to the shareholders in connection with the publication of the company's financial statements. The auditors of the parent company report their findings to the Board of Directors and President. The reports drawn up by parent company auditors are based in part on audits carried out by subsidiary auditors. These reports are also reviewed by Group Management.

Biohit's auditors and the fees paid to them during the financial year now ended are presented in the section Auditors.

Communications

Biohit's communications are based on policies approved by the Board of Directors and the legislation and regulations governing securities markets. Biohit seeks to maintain proactive communications with all of its interest groups and to pay attention to each group's specific needs and interests. Biohit aims to increase confidence in the company and thereby promote its business operations.

Biohit's major interest groups are its customers, shareholders and personnel. Other significant interest groups include analysts, authorities, mass media representatives, scientific communities, job seekers, and other partners in cooperation.

The President and CEO and the Director of Administration are responsible for ensuring that the company adheres to regulations on investor relations and communications and stock exchange releases. The Director of Communications is responsible for press releases and coordinating media relations.

All of Biohit's investor communications are published in both Finnish and English.

Consolidated income statement

1000€	Note number	1 Jan - 31 Dec 2008	1 Jan - 31 Dec 2007

Net sales	2.3	35,095	33,011
Other operating income	2.4	175	94
Change in inventories of finished goods and work in progress		-290	257
Materials and services	2.5	-6,681	-6,954
Employee benefit expenses	2.6, 2.9	-14,480	-14,140
Depreciation	2.7	-1,821	-1,815
Other operating expenses	2.8, 2.9	-10,684	-10,650
Operating result		1,314	-197
Financial income	2.10	423	61
Financial expenses	2.10	-741	-980
Profit before taxes		996	-1,116
Income taxes	2.11	-99	-386
Result for the period		897	-1,502
Distribution
To equity holders of the parent company		897	-1,502
Minority interest		-	-
Total		897	-1,502

Earnings per share are calculated from
the earnings attributable to equity holders of the parent company.
Earnings per share, undiluted, EUR	2.12	0.07	-0.12

Consolidated balance sheet

1000€	Note number	31.12.2008	31.12.2007
Assets
Non-current assets
Goodwill	2.13	2,638	2,638
Intangible assets	2.13	1,636	1,494
Tangible assets	2.14	6,452	7,203
Financial assets	2.15, 2.18	12	9
Deferred tax assets	2.16	2,010	1,954
Total non-current assets		12,748	13,297
Current assets
Inventories	2.17	5,769	5,622
Trade and other receivables	2.15, 2.18	6,800	6,385
Financial assets recognised at fair value through
profit or loss	2.15	480	923
Cash and cash equivalents	2.15, 2.19	1,310	1,109
Total current assets		14,359	14,040
Total assets		27,107	27,337
Equity and liabilities
Equity attributable to the equity holders of the parent company
Share capital	2.20	2,199	2,199
Share premium fund	2.20	0	174
Translation differences	2.20	-194	53
Fund for investments of non-restricted equity	2.20	12,404	12,230
Retained earnings		-1,917	-2,814
Total equity		12,492	11,842
Non-current liabilities
Deferred tax liabilities	2.16	0	82
Pension obligations	2.21	53	53
Interest-bearing liabilities
Capital loans	2.15, 2.23	880	880
Other interest-bearing liabilities	2.15, 2.23	7,112	7,380
Total interest-bearing liabilities	2.15, 2.23	7,992	8,260
Other liabilities	2.15, 2.24	748	929
Total non-current liabilities		8,793	9,324
Current liabilities
Trade payables	2.15, 2.24	1,321	1,419
Provisions	2.22	-	-
Current interest-bearing liabilities
Capital loans	2.15, 2.23	73	363
Other interest-bearing liabilities	2.15, 2.23	1,025	503
Total interest-bearing liabilities	2.15, 2.23	1,098	866
Other liabilities	2.15, 2.23	3,403	3,887
Total current liabilities		5,822	6,172
Total liabilities		14,615	15,495

Total equity and liabilities		27,107	27,337

Consolidated statement of changes in shareholders' equity

1000 €		Equity attributable to the equity holders of the parent company
					Fund for investments of
		Share	Share	Translation	non-restricted	Retained	Total
	Note number	capital premium fund		differences	equity	earnings	equity
Equity 1 Jan 2007		2,199	174	125	12,230	-1,312	13,415
Translation differences	2.20	-	-	-72	-	-	-72
Result for the period		-	-	-	-	-1,502	-1,502
Equity, 31 Dec 2007		2,199	174	53	12,230	-2,814	11,841
Translation differences	2.20	-	-	-247	-	-	-247
Transfer between funds	2.20	-	-174	-	174	-	-
Result for the period		-	-	-	-	897	897
Equity, 31 Dec 2008		2,199	-0	-194	12,404	-1,917	12,492

Consolidated cash flow statement

1000 €	Note number	2008	2007
Cash flow from operating activities
Result before taxes		996	-1,116
Adjustments for:
Depreciation according to plan	2.7	1,821	1,815
Other adjustments	2.26	318	602
Change in working capital
Increase (-) or decrease (+) in trade and other receivables		-291	280
Increase (-) or decrease (+) in inventories		-146	149
Increase (+) or decrease (-) in current non-interest-bearing liabilities		-368	218
Interest and other financial items paid		-951	-537
Interest received		4	4
Dividends received		0	1
Income taxes paid		-194	-372
Net cash flow from operating activities		1,188	1,044
Cash flow from investing activities
Investments in tangible and intangible assets		-1,228	-2,062
Proceeds from sales of tangible and intangible assets		0	16
Investments in funds and deposits		-	-1,200
Capital gains from investments in funds and deposits		477	1,110
Dividends received from investments		-	-
Net cash flow from investments		-751	-2,136
Cash flow from financing activities
Increase in long-term borrowings		605	2,494
Finance leasing debts paid		-176	-206
Repayments of long-term borrowings		-712	-916
Net cash flow from financing activities		-283	1,372
Increase (+) or decrease (-) in cash and cash equivalents		154	281
Cash and cash equivalents at the beginning of the period		1,109	850
Effect of exchange rates on cash and cash equivalents		46	-22
Cash and cash equivalents at the end of the period	2.19	1,310	1,109

2 Notes to the consolidated financial statements

2.1 Company profile

Biohit Oyj is a Finnish public company that manufactures liquid handling and diagnostics products and diagnostics analysis systems for use in research institutions, healthcare and industrial laboratories. The parent company is domiciled in Helsinki.

Copies of the consolidated financial statements are available on the Internet at www.biohit.com or from the parent company's headquarters, address Laippatie 1, Helsinki, Finland.

At its meeting on 31 March 2009, Biohit Oyj's Board of Directors approved the financial statements for publication.

2.2 Accounting policy applied in the financial statements

Accounting policy

These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS). They have been drawn up in compliance with the IAS and IFRS standards in force as at 31 December 2008 and SIC and IFRIC interpretations. The term 'IFRS standards' in the Finnish Accounting Act and the provisions laid down pursuant to the Act refers to the standards approved by the EU in accordance with the procedures laid down in IAS Regulation (EC) 1606/2002 of the European Parliament, and the interpretations of these standards. The notes to the consolidated financial statements also conform to Finnish accounting and corporate legislation.

The consolidated financial statements have been drawn up on the basis of original acquisition costs, with the exception of available-for-sale investments and financial assets and liabilities measured at fair value through profit or loss. The figures in the financial statements are presented in thousands of euros.

When financial statements are prepared in accordance with IFRS, the Group's management must make estimates and exercise judgement in the application of accounting policies. The note 'Accounting principles requiring judgements by management and key sources of estimation uncertainty' provides information on the judgements that have been made by management in the application of the accounting principles employed by the Group and which have the greatest impact on the figures presented in the financial statement.

Accounting policy applied in the consolidated financial statements

Subsidiaries

The consolidated financial statements include the parent company Biohit Oyj and all of its subsidiaries. Subsidiaries are those companies in which the Group has a controlling interest, that is, in which the Group holds over half of the voting rights or otherwise has a controlling interest. 'Controlling interest' means the right to dictate a company's financial and business principles in order to benefit from its operations.

The acquisition cost method has been used in eliminating cross-ownership of shares within the Group. The acquisition cost is taken to include surrendered assets at fair value, liabilities that have arisen or for which responsibility has been adopted, equity instruments issued, and all the direct expenses of the acquisition. Acquired subsidiaries are included in the consolidated financial statements as from the moment when the Group has assumed a controlling interest, and divested subsidiaries are included until the moment when the Group ceases to have a controlling interest. All intra-Group transactions, receivables, liabilities, unrealised profits and internal distribution of profits are eliminated when drawing up the consolidated financial statements. Unrealised losses are not eliminated if they are due to impairment. The distribution of profit for the period to the equity holders of the parent company and minority interests is presented in the income statement. Minority interest in equity is presented in the balance sheet as a separate item under shareholders' equity. The minority interest share of accumulated losses is recognised in the consolidated financial statements up to the amount of the investment at the most. The Group does not have any associated companies, joint ventures or minority shareholders.

Translation of items denominated in foreign currency

Figures relating to the result and financial position of each of the Group's business units are measured in the currency of the main operating environment for that unit. The consolidated financial statements are presented in euros, the functional and presentation currency of the parent company.

Foreign currency transactions are recorded in the functional currency using the exchange rates on the date of the transaction in question. Monetary receivables and liabilities are converted using the rates on the closing date. Non-monetary items denominated in foreign currency are translated to the functional currency at the rate on the transaction date. Exchange rate differences on translation have been entered in the income statement. The income statements of foreign subsidiaries have been translated into euros using the average exchange rates for the financial period. Their balance sheets have been translated using the rates on the closing date. The exchange rate difference resulting from the use of the average exchange rate in the translation of income statement items and the closing date rate in the balance sheets has been entered as a separate item under translation differences in consolidated shareholders' equity. Exchange rate differences in monetary items that are classed as net investments in foreign subsidiaries are entered under translation differences. In accordance with the exception permitted by IFRS 1, cumulative translation differences prior to the IFRS transition date are recorded under retained earnings at the time of the transition to IFRS, and will also not be entered into the income statement later on the divestment of a subsidiary.

Business segments

Biohit has organised its business into two primary business areas: Liquid Handling and Diagnostics. The format of the Group's primary segment reporting is based on these business segments. Biohit reports on geographical areas as its secondary segments: Europe, Asia, America and other countries.

A business segment produces products and services whose risks and profitability differ from the risks and profitability of other segments. A geographical segment produces products and services in an economic environment whose risks and profitability differ from the risks and profitability in other economic environments.

Income recognition

The sale of goods and services is recognised as income when the significant risks and rewards incident to ownership are transferred to the buyer, and the payment of goods and services, costs or the possible return of the goods does not involve significant uncertainty. The income recognised is the fair value of the consideration received from the goods or services sold less value-added tax and both bulk and other discounts as well as exchange rate gains or losses on the sale. Interest income is recognised using the effective interest method. Dividend income is booked when the rights to the dividends have materialised.

Property, plant and equipment

Property, plant and equipment have been valued at the original acquisition cost less accumulated depreciation and impairment. The acquisition cost includes the direct costs of acquisition. Later expenditure is included in the carrying amount of the asset or recognised as a separate asset only if it is probable that the Group will benefit from the future economic benefits of the asset and the acquisition cost of the asset can be reliably measured. Other repair and maintenance expenditure is recognised through profit or loss in the period incurred.

Assets are amortised on a straight-line basis over their estimated useful life. There is no depreciation on land areas. The estimated useful lives of assets are as follows:

Buildings	20 – 30 years
Machinery and equipment	3 – 10 years

The residual values and useful lives of assets are reviewed in each financial statement. If necessary, they are adjusted to reflect the changes in the expected economic benefits. Capital gains and losses on the discontinuation or disposal of property, plant and equipment are included in other operating income or expenses.

Costs of debt

Costs of debt are expensed in the financial period in which they were incurred. Transaction costs arising directly from the raising of loans – and which are clearly connected with a certain loan – are included in the original periodised acquisition cost of the loan and are periodised as interest expenses using the effective interest rate method.

Public grants

Public grants received for the acquisition of intangible assets and property, plant or equipment are recognised as decreases in the carrying amounts of property, plant and equipment. Grants are recognised as revenue through smaller depreciation over the useful life of the asset. Grants not related to the acquisition of non-current assets are booked in other operating income.

Intangible assets

Goodwill

In the case of companies acquired after 1 January 2004, goodwill corresponds to the share of the acquisition cost in excess of the Group's share of the fair value of the acquiree's net assets at the time of acquisition. The goodwill on the consolidation of business functions prior to this date corresponds to the carrying amount (as per the previously employed accounting standards), which has been used as the deemed cost. Neither the classification nor accounting treatment of these acquisitions has been adjusted when drafting the opening consolidated IFRS balance sheet.

No regular depreciation is recorded on goodwill. Instead, it is subjected to an annual impairment test. To this end, goodwill is allocated to cash generating units. Goodwill is measured at the original acquisition cost less impairment.

Research and development expenditure

Research expenditure is expensed in the income statement. Development expenditure on the design of new or more advanced products is capitalised as intangible assets in the balance sheet as from the date when the product is technically feasible, can be utilised commercially, and is expected to yield future economic benefits. Expensed development expenditure is not capitalised later. Amortisation begins when the asset is ready to be used. The useful life of capitalised development expenditure is about 5 years, over which time capitalised assets are expensed on a straight-line basis.

Other intangible assets

An intangible asset is recorded in the balance sheet only if the asset's acquisition cost can be reliably determined and it is probable that the company will benefit from the expected economic benefits of the asset. Other intangible assets with a finite useful life are entered in the balance sheet at the original acquisition cost and expensed in the income statement on a straight-line basis over their known or estimated useful lives. The Group has no intangible assets with unlimited useful lives.

The depreciation periods are as follows:

Patents	10 years
Development expenditure	5 years
Software	3 years
Other	5-7 years

Impairment of tangible and intangible assets

At each closing date, the Group evaluates whether there are indications of impairment on any asset item. If impairment is indicated, the recoverable amount of the asset is estimated. The recoverable amount for goodwill is also assessed annually regardless of whether impairment is indicated. Impairment is examined at the level of cash generating units, that is, at the lowest unit level that is primarily independent of other units and whose cash flows can be separated out from other cash flows. The discount interest used is determined before taxes and describes the market outlook for the time value of money and the risks associated with the asset items to be tested.

The recoverable amount is the fair value of the asset item less the costs of disposal or the value in use, whichever is higher. Value in use is the estimated net cash flow, discounted to its present value, from the asset item or cash-generating unit in question. An impairment loss is recognised if the carrying amount of the asset item is higher than its recoverable amount. The impairment loss is entered immediately in the

income statement. If the impairment loss is allocated to a cash generating unit, it is first allocated as a reduction to the goodwill of the cash generating unit and subsequently as a reduction to the other asset items of the unit on a pro rata basis. An impairment loss is reversed if the situation changes and the recoverable amount of an asset item has changed since the date when the impairment loss was recorded. However, impairment losses are not reversed beyond the carrying amount of the asset exclusive of impairment losses. Impairment losses on goodwill are never reversed under any circumstances.

Inventories

Inventories are measured either at the acquisition cost or at the probable net realisable value, whichever is lower. The acquisition cost is determined using the FIFO principle. The acquisition cost of finished and incomplete products comprises raw materials, direct labour costs, other direct costs, and the appropriate portion of the variable general costs of manufacture and fixed overhead at a normal level of operations. The net realisable value is the estimated selling price in ordinary business operations less the estimated expenditure on product completion and sale.

Lease agreements

The Group as lessee

Lease agreements concerning property, plant and equipment in which the Group holds a material share of the risks and rewards of ownership are classified as finance lease agreements. Assets acquired under finance lease agreements are recognised in the balance sheet at the fair value of the asset when the lease period begins or at the present value of the minimum rents, whichever is lower. Assets acquired under finance lease agreements are amortised over their useful life or the lease period, whichever is shorter. Lease payments are split between the finance cost and a reduction in the liability over the lease period such that the interest rate on the liability outstanding for each financial period remains the same. The lease commitments are included in interest-bearing liabilities.

Lease agreements in which the risks and rewards incident to ownership are retained by the lessor are treated as other lease agreements. Rents payable under other lease agreements are expensed in the income statement on a straight-line basis over the lease period.

The Group does not act as a lessor.

Pension obligations

Group companies have organised their pension security in accordance with the pension legislation and practices of the country in question. The majority of the Group's pension schemes are defined contribution schemes for which payments are expensed in the period in which they occur. Defined benefit pension schemes are entered into the income statement such that expenses are periodised over the years in employment of the employee on the basis of annual actuarial calculations. Actuarial gains and losses are recognised in the income statement over the average remaining time in service of the persons in the scheme insofar as they exceed either 10% of the pension commitment or 10% of the fair value of assets, whichever is higher.

Provisions

Provisions are recorded when the Group has a legal or constructive obligation on the basis of a prior event, the materialisation of the payment obligation is probable, and the size of the obligation can be reliably estimated. The amount recognised as a provision represents the best estimate of the expenditure required to fulfil the existing obligation on the closing date. If the time value of money is material, the provision recorded is the present value of expected expenditure.

Income taxes

Tax expenses in the income statement comprise taxes on the taxable income for the period and deferred tax liabilities. Taxes on the taxable income for the period are calculated on the taxable income on the basis of the tax base in force in the country in question. If applicable, taxes are adjusted for the taxes of previous periods.

Deferred taxes are calculated on all temporary differences between the carrying amount and taxable value. The largest temporary differences arise from the depreciation of property, plant and equipment, unused tax losses, and the internal margin included in inventories.

No deferred taxes are calculated on goodwill impairment that is not deductible in taxation and no deferred taxes are recognised on the undistributed profits of subsidiaries to the extent that the difference is unlikely to be discharged in the foreseeable future.

Deferred taxes have been calculated using the tax bases set by the closing date. Deferred tax assets have been recognised to the extent that it is probable that taxable income against which the temporary difference can be applied will materialise in the future.

Financial assets and liabilities

The Group's financial assets are categorised as: financial assets at fair value through profit or loss, loans and other receivables, and available-for-sale financial assets. Financial assets are classified in accordance with the purpose underlying their acquisition, and are categorised on initial recognition. All acquisitions and sales of financial assets are booked on the date of the transaction. Financial assets are derecognised in the balance sheet when the Group has lost its contractual rights to their cash flows, or when the Group has substantially transferred the risks and rewards out of the Group.

Financial assets at fair value through profit or loss comprise held-for-trading assets. Held-for-trading assets are interest fund investments and are included in current assets. The items in this group are measured at fair value. The fair value of all investments in this group is measured on the basis of released price quotations on well-functioning markets, that is, buy quotations on the closing date. Both realised and unrealised gains and losses due to changes in fair value are recorded in the income statement on the period in which they were incurred.

Loans and other receivables are assets that exclude derivative assets and whose related payments are fixed or definable. They are not quoted on well-functioning markets and are not held for trading. Assets are measured at the periodised acquisition cost using the effective interest rate method. They are included in the balance sheet as either current and noncurrent financial assets – non-current if they do not mature within the next 12 months. This category mainly consists of trade receivables.

Available-for-sale assets comprise investments in unquoted shares. They are measured at acquisition cost, as they are nonliquid assets whose fair value cannot be reliably determined. Available-for-sale assets are included in non-current assets, as the Group is unlikely to surrender them within 12 months of the closing date.

Cash and cash equivalents comprise cash at bank and in hand and other liquid investments with a maturity of less than 3 months.

Financial liabilities are originally booked at their fair value on the basis of the consideration received. Transaction costs have been included in the original carrying amount of financial liabilities. All financial liabilities are later valued at the periodised acquisition cost using the effective interest rate method. Financial liabilities are included in current and noncurrent liabilities and may be interest-bearing or non-interestbearing. Interest-bearing liabilities comprise financial liabilities requiring the company to make contractual interest or other payments during the term of the loan. Non-interest-bearing liabilities comprise liabilities for which the company does not have to make contractual interest or other payments.

The fair value of the convertible bond liability has been determined using the market interest rate for a comparable liability on the date of issue. The bond liability will be presented as a periodised acquisition cost until it is amortised through repayment or conversion into shares. The remainder – the equity component of the bond – is presented, less taxes, in the share premium fund.

The principles used for determining the fair values of financial assets and liabilities are presented in note number 2.15 to the financial statements.

Impairment of financial assets

At every closing date, the Group evaluates whether there is objective evidence indicating impairment in the value of either a single item or a group of financial assets. If there is evidence of impairment, impairment is recognised through profit or loss. If the impairment loss decreases in a subsequent financial year, the recognised loss is reversed through profit or loss, except in the case of available-for-sale investments classed as equity instruments. Impairment of the latter is not reversed in the income statement.

The Group recognises an impairment loss on trade receivables when there is reliable evidence to indicate that the receivable cannot be collected according to the original terms. The impairment loss to be recognised in the income statement is defined as the difference between the carrying amount of the receivable and the estimated present value of future cash flows adjusted using the effective discount interest rate. If the impairment loss decreases in a subsequent financial year and the reduction can be considered as relating to an event after the recognition of impairment, the recognised loss is then reversed through profit or loss.

Definition of operating profit or loss

The IAS 1 standard – Presentation of Financial Statements – does not include a definition of operating profit. The Group has defined it as follows: operating profit or loss is the net sum

remaining after other operating income is added to net sales, less purchasing costs (adjusted for the change in inventories of finished goods and work in progress and the costs incurred from production for own use) and less expenses, depreciation and potential impairment losses caused by employee benefits and other operating expenses. All other income statement items except the above-mentioned are presented below operating profit/loss. Translation differences and changes in the fair value of derivatives are included in operating profit/loss if they are incurred from items related to operational activities, otherwise they are entered under financial items.

Accounting principles requiring judgements by management and key sources of estimation uncertainty

When preparing financial statements, estimates and assumptions about the future must be made, so actual results may differ from these estimates and assumptions. Management must also exercise judgement in the application of accounting policies. Although estimates are based on the most up-to-date information available, actual results may differ from these estimates. The major areas in which estimation and judgement have been used are described below.

Impairment testing

The Group tests goodwill and incomplete intangible assets for impairment on at least an annual basis, and evaluates whether there are indications of impairment as presented in the accounting policies above. The recoverable amount from cash generating units has been defined on the basis of value in use calculations. Estimates must be used when performing these calculations.

Deferred tax assets

In the case of unused tax losses and the deferred tax assets recognised on temporary differences, the Group evaluates annually whether it is probable that the company in question will generate sufficient taxable income before the unused tax losses lapse.

Application of new or amended IFRS standards and IFRIC interpretations

Adoption of the following standards and interpretations issued by the IASB will be compulsory in 2009 or later. The Group has decided against the early adoption of these standards, but will introduce them in coming financial years.

New or amended IFRS standards and IFRIC interpretations coming into force in 2009 or later:

IFRS 1 and IAS 27, Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate. Adopted in 2008.
IFRS 8, Operating Segments, replaces IAS 14, Segment Reporting. In 2009, the GastroPanel test package will appear as its own separate segment rather than as part of the Diagnostics segment.
IAS 23 and IAS 23R, Borrowing Costs. This standard may have an impact if the Group invests in production assets that take a long time to be completed, such as buildings.
IFRS 2, Vesting Conditions and Cancellations amendment to IFRS 2, Share-based Payment. The Group has no sharebased payment schemes.
IFRS 3 and IFRS 3R, Business combinations. The Group will adopt this standard from 2010 onwards.
- IAS 1 and IAS 1R, Presentation of Financial Statements, replaces IAS 1, Presentation of Financial Statements (revised in 2003 and amended in 2005). The Group will present the statement of comprehensive income in the Notes to the Financial Statements. The new standard will be adopted as of 1 January 2009.
IAS 27, Consolidated and separate financial statements (amended in 2008) replaces IAS 27, Consolidated and separate financial statements. Will have no impact on the consolidated financial statements.
IFRIC 16, Hedges of a Net Investment in a Foreign Operation. Group policy has been to not hedge net investments in subsidiaries.
IAS 39 and IFRS 7 (amendments). Changes in the categorisation of financial assets. The Group does not hold any instruments covered by these amendments.

New or revised standards and interpretations that came into force in 2008 but do not have a material effect on the consolidated financial statements

IFRIC 11, Group and Treasury Share Transactions
IFRIC 12, Service Concession Arrangements
IFRIC 13, Customer Loyalty Programmes
IFRIC 14 and IAS 19, The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction.

2.3 SEGMENT REPORTING

Biohit has organised its business into two primary business areas: Liquid Handling and Diagnostics. Biohit reports on these business areas as its primary segments. Biohit reports on geographical areas as its secondary segments: Europe, America, Asia and other countries.

The Group's business is divided into separate business segments on the basis of the nature of the products and services provided. A segment represents a business unit that offers different kinds of products and services to different markets. Service provision does not generate a significant proportion of earnings. The Liquid Handling segment produces electronic and mechanical pipettes, disposable tips, and maintenance. The Diagnostics segment produces diagnostic test systems, tests and instruments, and related software. There are no sales or other business transactions between business segments. Segment assets consist primarily of property, plant and equipment, intangible assets, inventories, receivables and cash and cash equivalents. Segment liabilities consist of business debts and do not include items such as tax liabilities or the liabilities of the Group as a whole. Investments comprise increases of property, plant and equipment and increases of intangible assets to be employed longer than one financial period.

Although the Group's two business segments are managed globally, they operate in four separate geographical areas: Europe, America, Asia and the rest of the world. Sales are allocated to geographical areas on the basis of the country in which the customer is located. A segment's assets and investments are allocated on the basis of the location of the asset.

Segment reporting follows the structure of the company's internal reporting. There is no trade between primary segments. In the secondary segments, internal pricing follows marketbased internal prices.

Notes to the consolidated financial statements, IFRS

Net sales 33,588 1,507 - 35,095 Operating profit/loss 3,671 -2,357 - 1,314 Assets 21,052 2,761 3,294 27,107 Liabilities 1,314 8 13,293 14,615 Investments 977 236 - 1,213 Depreciation -1,760 -61 - -1,821 Business segments 2007 Liquid handling Diagnostics Unallocated Total Net sales 31,352 1,659 - 33,011 Operating profit/loss 2,474 -2,931 - -458 Assets 20,836 2,848 3,652 27,337 Liabilities 1,263 155 14,076 15,495 Investments 1,871 210 - 2,081 Depreciation -1,729 -87 - -1,815 Other Geographical segments 2008 Europe America Asia countries Total Net sales 19,518 6,367 4,014 5,196 35,095 Segment assets 21,334 1,869 3,084 820 27,107 Investments 1,129 24 54 5 1,213 Other Geographical segments 2007 Europe America Asia countries Total Net sales 18,754 6,344 3,062 4,851 33,011 Segment assets 23,006 1,707 1,883 741 27,337 Investments 1,860 37 182 1 2,081 2.4 OTHER OPERATIN G INCOME 2008 2007 Capital gains on the sale of property, plant and equipment 0 16 Grants 42 15 Other 133 62 Total 175 94 2.5 MATE RIALS AND SERVICES 2008 2007 Raw materials, consumables and goods 5,848 6,200 External manufacturing services 833 754 Total materials and services 6,681 6,954 2.6 EMPLOYEE BENE FIT EXPENSES 2008 2007 Wages and salaries 11,828 11,640 Pensions Defined benefit plans 33 31 Pensions Defined contribution plans 1,342 1,267 Other personnel expenses 1,739 1,625 Wages and salaries capitalised in non-current assets -461 -424 Total 14,480 14,140	Business segments 2008	Liquid handling	Diagnostics	Unallocated	Total

Details of management's employee benefits are presented in note number 2.27, Related party transactions.

Number of personnel	2008	2007
Average number of salaried personnel	244	251
Average number of non-salaried personnel	125	102
Average number of personnel	369	352
Number of personnel at the end of the financial period	360	359

2.7 DEPRECIATION

	2008	2007
Intangible assets	372	367
Buildings	180	176
Machinery and equipment	1,269	1,273
Total	1,821	1,815

2.8 OTHER OPERATING EXPENSES

	2008	2007
Travel and other employee related expenses	2,252	2,318
Rent and maintenance expenses	2,738	2,694
Marketing and sales expenses	2,417	2,113
Other external services	1,960	2,235
Other operating expenses	1,316	1,289
Total	10,684	10,650

Invoiced auditors' fees	101	163
Other fees	19	15
Total auditors' fees	121	178

2.9 RESEARCH AND DEVELOPMENT EXPENDITURE

The Group's research and development expenditure totalled EUR 2,044 thousand (EUR 2,005 thousand), representing 5.8% (6.1%) of net sales, of which EUR 395 thousand (EUR 362 thousand) has been capitalised as development expenditure.

2.10 FINANCIAL INCOME AND EXPENSES

	2008	2007
Dividend income from available-for-sale financial assets	0	1
Exchange rate gains from financial assets and liabilities	414	34*
Gains from financial assets recognised at fair value	3	17
Other financial income	6	9
Total financial income	423	61

Interest expenses on financial liabilities	-565	-513
Exchange rate losses on financial assets and liabilities	-1	-354*
Wage and salary expenses	-175	-113
Total financial expenses	-741	-980

Total financial income and expenses	-318	-919

* The comparable figures for 2007 have been amended so that currency exchange rate losses on the Group's internal receivables are now presented under financial expenses rather than net sales. In 2008, EUR 350 thousand in currency exchange rate gains on the Group's internal receivables has been transferred from net sales to financial income and EUR 181 thousand to translation differences in the statement of changes in equity.

2.11 INCOME TAXES

Direct taxes	2008	2007
Taxes on taxable income for the period	-237	-254
Deferred taxes	138	-133
Total direct taxes	-99	-387

Reconciliation of the tax rate	2008	2007
Profit before taxes	996	-1,116
Taxes at the rate of the parent company, 26%	-259	290
Effect of different tax rates of foreign subsidiaries	-16	-27
Non-deductible expenses and tax-exempt income	11	-121
Unrecognised tax assets from tax losses/
use of previously unrecognised tax losses	168	-521
Use of temporary differences	-3	-8
Taxes in the income statement	-99	-387

2.12 EARNINGS PER SHARE

Undiluted earnings per share are calculated by dividing the profit for the period attributable to equity holders of the parent company by the weighted average number of shares outstanding during the period.

	2008	2007
Earnings for the period attributable to equity holders of the parent company, EUR thousand	897	-1,502
Interest on the convertible bond	263	263
Result for the period for the calculation of the earnings per share adjusted
with the dilution effect	1,160	-1,238
Average number of shares, undiluted	12,937,627	12,937,627
Conversion of the convertible bond into shares	900,000	900,000
Average number of shares, diluted	13,837,627	13,837,627
Earnings per share (EPS), EUR, undiluted	0.07	-0.12

In the calculation of the earnings per share adjusted with the dilution effect, the weighted average number of shares accounts for the dilution effect of the conversion of convertible bonds into shares. The convertible bonds did not have a dilutive effect in the 2007 and 2006 financial years.

2.13 INTANGIBLE ASSETS

				Other
	Development	Intangible		intangible
2008	expenditure	rights	Goodwill	assets	Total
Acquisition cost at beginning of period	864	1,604	2,638	1,129	6,235
Increases	341	126	-	140	607
Decreases				-	-
Transfers between items	-	0	-	-93	-93
Foreign exchange differences	-	-	-	-6	-6
Acquisition cost at end of period	1,205	1,730	2,638	1,170	6,743
Accumulated depreciation and impairment at
beginning of period	-101	-1,100	-	-903	-2,104
Depreciation for the period	-121	-103	-	-148	-372
Foreign exchange differences	-	-	-	6	6
Accumulated depreciation and impairment at
end of period	-222	-1,203	-	-1,045	-2,470
Carrying amount at end of period	983	527	2,638	125	4,273
Carrying amount at beginning of period	763	504	2,638	226	4,131

				Other
	Development	Intangible		intangible
Intangible assets 2007	expenditure	rights	Goodwill	assets	Total
Acquisition cost at beginning of period	567	1,518	2,638	1,231	5,954
Increases	297	85	-	283	665
Transfers between items	-	-	-	-379	-379
Foreign exchange differences	-	-	-	-6	-6
Acquisition cost at end of period	864	1,604	2,638	1,129	6,234
Accumulated depreciation and impairment at
beginning of period	-58	-979	-	-703	-1,740
Depreciation for the period	-42	-121	-	-203	-367
Foreign exchange differences	-	-	-	3	3
Accumulated depreciation and impairment at
end of period	-101	-1,100	-	-903	-2,104
Carrying amount at end of period	763	504	2,638	226	4,131
Carrying amount at beginning of period	509	540	2,638	528	4,214

Intangible rights consist of patents. Assets acquired under finance lease agreements have been capitalised in other intangible assets. The acquisition cost at end of year was EUR 462 thousand (EUR 497 thousand), accumulated depreciation EUR 436 (EUR 371 thousand) and the carrying amount EUR 26 thousand (EUR 126 thousand).

Goodwill impairment test

All goodwill has been allocated to certain GastroPanel products in the Diagnostics segment. In impairment testing, recoverable amounts have been determined on the basis of the value in use. Cash flow estimates cover a five-year period. The forecast for 2009 is based on the budget approved by the Board. Estimated cash flows for the years 2010–2013 are based on market-specific business plans approved by the Board and an understanding of future trends in key market areas. A growth rate of 10% has been used in calculations for the years after 2014. No substantial net sales growth has been assumed after that. As this is a fledgling business area, growth estimates cannot be based on historical data. In management's opinion, the business growth expectations used in impairment testing are conservative, and the company's targets have been set considerably higher.

The sales margin used for impairment testing is a cautious estimate that reflects trends in the sales margin and net sales of previous years. Biohit's management is of the opinion that increased operational efficiency will raise the sales margin by 3–4% in the coming years.

The fixed costs used in impairment testing are based on management's estimates, which take into account the rise in costs caused by market-specific growth expectations. Average annual growth has been forecast at about 1%. Cost cutting and increasing operational efficiency will enable the company to keep expenses in check.

The discount rate used in impairment calculations reflects the impact of business risks on the required return on equity. The cost of debt has been defined according to the existing credit base. The higher risk of commercialising new medical products has been taken into account when defining the discount interest rate, which has been set at 15% before taxes.

On the basis of impairment testing using the previously mentioned estimates, there is no need to recognise any impairment losses on goodwill in the financial statements for the year ending 31 December 2008.

Impairment testing sensitivity analysis

The table below gives a breakdown of the maximum changes in each key assumption (in percentage points) that can occur in order for the value of future cash flows to equal the book value.

Vuosi	actual 2008	2009	2010-2014	sensitivity, %
Net sales growth, %*)	8.3	29.5	26.1	-2.6
Discount interest rate, %		15.0	15.0	6.0
Sales margin, %	66.0	71.0	72.0	-8.5

The long term growth used in the calculation is 2%. Sensitivity of the long term growth is -13,4%

*) 2008 net sales growth in comparable currencies was 20%.

Whether or not the projected net sales figures are achieved depends largely on the following factors:

The market penetration of Biohit's diagnostics products has taken longer than expected. The FDA has still not granted authorisation for GastroPanel's Pepsinogen I and II tests, and this has prevented sales growth in the United States. In order to continue with the approval process, Biohit will have to submit a new application accompanied by more extensive research material. The timetable for the approval process is currently difficult to estimate.

Negotiations with distributors are still partly ongoing in several European and Asian countries. Delays in these negotiations and

difficulties in finding reliable distributors could lead to net sales growth not meeting the forecasts used in impairment testing.

Management's estimations indicate that there is substantial growth potential for the GastroPanel product family in China and India. However, forecasts for future trends cannot be based on historical data, as net sales in these markets have been minimal to date. If approval from local opinion leaders and physicians is not obtained for the product concept according to schedule, there will be an increased risk that the growth forecasts used in goodwill impairment testing will not be met.

2.14 TANGIBLE ASSETS

			Machinery and
2008	Land	Buildings	equipment	Total
Acquisition cost at beginning of period	72	3,801	13,991	-17,864
Increases	-	8	621	629
Decreases	-	-	-29	-29
Transfers between items	-	-	93	93
Foreign exchange differences	-	-	-5	-5
Acquisition cost at end of period	72	3,809	14,671	18,552
Accumulated depreciation and impairment at
beginning of period	-	-1,590	-9,070	-10,660
Accumulated depreciation of decreases
and transfers	-	-	25	25
Depreciation for the period	-	-180	-1,269	-1,449
Foreign exchange differences	-	8	-24	-16
Accumulated depreciation at end of period	-	-1,762	-10,338	-12,100
Carrying amount at end of period	72	2,047	4,333	6,452
Carrying amount at beginning of period	72	2,211	4,920	7,203

			Machinery and
2007	Land	Buildings	equipment	Total
Acquisition cost at beginning of period	72	3,796	12,533	16,401
Increases	-	5	1,437	1,442
Decreases	-	-	-303	-303
Transfers between items	-	-	379	379
Foreign exchange differences	-	-	-55	-55
Acquisition cost at end of period	72	3,801	13,991	17,864
Accumulated depreciation and impairment at
beginning of period	-	-1,414	-8,131	-9,546
Accumulated depreciation of decreases
and transfers	-	-	293	293
Depreciation for the period	-	-176	-1,273	-1,449
Foreign exchange differences	-	-	40	41
Accumulated depreciation at end of period	-	-1,590	-9,070	-10,660
Carrying amount at end of period	72	2,211	4,920	7,203
Carrying amount at beginning of period	72	2,381	4,401	6,855

Commitments on agreements relating to the acquisition of property, plant and equipment amounted to EUR 274 thousand (EUR 91 thousand).

Assets acquired under finance lease agreements have been capitalised in machinery and equipment. The acquisition cost at end of year was EUR 278 thousand (EUR 282 thousand), accumulated depreciation EUR 232 thousand (EUR 167 thousand) and the carrying amount EUR 47 thousand (EUR 114 thousand).

2.15 FINANCIAL ASSETS AND LIABILITIES BY CATEGORY

Balance sheet values of financial assets	Loans and	Available-	Recognised	Total carrying
by category at 31 December 2008	receivables	for-sale	at fair value	amount	Fair value
Non-current financial assets
Financial assets	4	8	-	12	12(*
Total	4	8	-	12	12
Current financial assets
Trade and other receivables	6,800	-	-	6,800	6,800
Investments held for trading	-	-	480	480	480
Cash and cash equivalents	1,310	-	-	1,310	1,310
Total	8,110	-	480	8,590	8,590
Total financial assets	8,114	8	480	8,602	8,602
Balance sheet values of financial assets	Loans and	Available-	Recognised	Total carrying
by category at 31 December 2007	receivables	for-sale	at fair value	amount	Fair value
Non-current financial assets
Financial assets	1	8	-	9	1(*
Total	1	8	-	9	1
Current financial assets
Trade and other receivables	6,385	-	-	6,385	6,385
Investments held for trading	-	-	923	923	923
Cash and cash equivalents	1,109	-	-	1,109	1,109
Total	7,494	-	923	8,417	8,417
Total financial assets	7,495	8	923	8,426	8,418

*) Available-for-sale investments totalling EUR 8 thousand (EUR 8 thousand) include unquoted investments, which have been presented at cost because their fair value is not reliably available.

The carrying value of other receivables is equivalent to their fair value, because the discount effect is minimal when taking into account the maturity of liabilities.

	Carrying amount	Fair value	Carrying amount	Fair value
Financial liabilities by category	2008	2008	2007	2007
Non-current financial liabilities valued
at a periodised acquisition cost
Convertible bond	3,929	3,620	3,872	3,620
Capital loans	880	880	880	880
Other interest-bearing liabilities	3,183	3,183	3,508	3,508
Other liabilities	748	748	981	981
Total	8,740	8,431	9,240	8,988
Current financial liabilities valued at a periodised acquisition cost
Capital loans	73	73	363	363
Other interest-bearing liabilities	1,025	1,025	503	503
Trade payables and other liabilities	4,724	4,724	4,924	4,924
Total	5,822	5,822	5,790	5,790
Total financial liabilities	14,562	14,253	15,030	14,778

The original carrying amount of trade payables and other non-interest-bearing liabilities is equivalent to their fair value, because the discount effect is minimal when taking into account the maturity of liabilities.

The fair value of the convertible bond has been determined using a discount interest rate of 9.00% (9.00%). The fair value of capital loans cannot be reliably determined because they are not quoted on well-functioning markets. Other interest-bearing liabilities are primarily floating rate liabilities linked to the market interest rate, or else have been drawn down close to the closing date. Their balance sheet values do not substantially differ from their fair values.

2.16 DEFERRED TAXES

Deferred tax assets	2008	2007
Intangible assets	300	171
Internal margin on inventories	353	313
Pension obligations	29	18
Unused tax losses	845	1,442
Accumulated depreciation difference	482
Other	1	11
Total	2,010	1,954
Deferred tax liabilities
Accumulated depreciation differences	0	82
Other	-	-
Total	0	82

Changes in deferred taxes have been entered into the income statement. Deferred tax assets on confirmed losses have been recognised to the extent that management believes it is probable that taxable income against which the asset can be utilised will materialise in the future.

On 31 December 2008, Group companies had EUR 2,737 thousand (EUR 2,817 thousand) in confirmed tax losses for which no deferred tax assets have been recorded, as it has been estimated that it is not probable that these losses can be utilised prior to maturity. Said losses lapse in 2009-2028 and the equivalent deferred taxes are EUR 652 thousand (EUR 751 thousand).

2.17 INVENTORIES

	2008	2008
Raw materials and consumables	2,583	2,054
Products in progress	730	711
Completed products and goods	2,456	2,856
Total inventories	5,769	5,622

EUR 6,208 thousand (EUR 5,943 thousand) was expensed during the financial year to reduce the carrying amount of inventories. The item includes the carrying amount of obsolete and slow-moving inventories recognised as expenses, EUR 255 thousand (EUR 663 thousand).

2.18 TRADE AND OTHER RECEIVABLES

Non-current receivables	2008	2007
Non-current non-interest-bearing receivables	3	1

Current receivables
Trade receivables	5,857	5,532
Prepayments and accrued income	600	442
Other receivables	343	411
Total	6,800	6,385

A breakdown of trade receivables by age is presented in note number 2.25.

2.19 CASH AND CASH EQUIVALENTS

Cash and cash equivalents	2008	2007
Cash at bank and in hand	1,310	1,109
Total	1,310	1,109
Cash and cash equivalents in the cash flow statement	1,310	1,109

2.20 SHARE CAPITAL AND EQUITY FUNDS

Biohit Oyj's share capital is EUR 2,199,397 and the number of shares 12,937,627, of which 2,975,500 (3,875,500 in 2007) are Series A shares and 9,962,127 (9,062,127) Series B shares. 900,000 series A shares have been converted into series B shares. The series B shares are quoted on the stock exchange. The total amount of shares has remained the same.

Both series have a nominal value of EUR 0.17. Series A shares confer twenty (20) votes at General Meetings and Series B shares confer one (1) vote. However, in payment of dividends, a dividend of two (2) per cent higher than the nominal value is paid for Series B shares than is paid for Series A shares.

According to the Articles of Association, the company's minimum share capital is EUR 1,063,101.29 and the maximum share capital EUR 4,252,405.16. Within these limits, the share capital can be increased or decreased without amending the Articles of

Association. There was no change in share capital in 2008 and 2007. The share capital is fully paid-in.

Description of shareholders' equity funds:

Share premium fund the equity component of the convertible bond has been transferred from the share premium fund to the fund for investments of non-restricted equity.

Translation differences The fund includes translations differences resulting from the conversion of foreign subsidiaries' financial statements into euros.

Fund for investments of non-restricted equity includes other equity investments and payments for share subscriptions insofar as it is decided not to enter said amounts into the share capital.

2.21 PENSION LIABILITIES

The majority of the Group's pension shemes are defined contribution plans. There is a defined benefit plan in France.

Pension liabilities for defined benefit plans in the balance sheet	2008	2007
Present value of unfunded liabilities	86	53
Present value of funded liabilities	96	82
Unrecognised actuarial gains/losses	4	-4
Fair value of assets	-100	-78
Pension liabilities at end	86	53
Changes in the present value of obligations during the period
Present value of obligations at beginning of period	53	106
Costs based on work carried out during the period	27	30
Interest expenses	1	1
Benefits paid	5	-2
Pension liabilities at end	86	135
Changes in the fair value of assets during the period
Fair value of assets at beginning of period	82	60
Employer contributions	20	20
Benefits paid	-6	-2
Fair value of assets at end of period	96	78
Pension expenses from defined benefit schemes recognised in the income statement
Costs based on work carried out during the period	32	30
Interest expenses	1	1
Total	33	31
Mathematical assumptions for defined benefit pension schemes
Discount interest rate, %	3	3
Projected increase in wages and salaries, %	2.5	2.0
Projected inflation, %	4.0	4.5
Projected average time remaining in the company's employ (years)	19.6	23.0

Payments into pension schemes are expected to total EUR 15 thousand in 2009.

2.22 PROVISIONS

Provisions for warranty	2008	2007
1 Jan	0	56
Provision additions	-	-
Released during the period	0	-10
Reversals of unused provisions	0	-46
31 Dec	-	-
Total provisions	-	-

2.23 INTE REST -BEARING LIABILITIES
Interest-bearing liabilities, balance sheet values	2008	2007
Non-current interest-bearing liabilities
Loans from financial institutions	3,130	3,430
Convertible bonds	3,929	3,872
Capital loans	880	880
Finance leasing liabilities	53	78
Total	7,992	8,260
Current interest-bearing liabilities
Loans from financial institutions, current portion	947	327
Capital loans, current portion	73	363
Finance leasing liabilities, current portion	77	176
Total	1,097	866
Total interest-bearing liabilities	9,089	9,126

Fair values for financial liabilities are presented in note number 2.15.

Current and non-current interest-bearing liabilities are presented in euros. At the end of the period, the average weighted interest on the company's loans was 6.2 % per annum (5.3 % in 2007). The fair values of interest-bearing liabilities do not substantially differ from their balance sheet values.

Convertible bonds

On 27 October 2005, Biohit Oyj floated an issue of convertible bonds targeted at professional investors in Finland. The subscription value of the convertible bond on the date of issue was EUR 4,050,000. Annual fixed interest of 6.5% is paid on the capital of the convertible bond, which has a five-year maturity. Each EUR 4,500 note unit can be converted into 1,000 Series B shares with a nominal value of EUR 0.17. The conversion rate is EUR 4.50. The bond can be converted into a maximum of 900,000 Biohit Oyj Series B shares. The company's share capital may be increased by a maximum of EUR 153,000 and the number of Series B shares by a maximum of 900,000 new shares as a result of conversions. The proportion of shares that can be converted on the basis of the convertible bond is a maximum of 6.5% of the company's shares, and 1.0% of the votes conferred by the shares after a possible increase in share capital. The company is entitled to repay the entire capital of the bond before the maturity date, providing that the mean rate weighted with the Biohit Series B share turnover on the Helsinki Stock Exchange has been at least EUR 10 immediately before the decision date regarding the repayment on 20 exchange days of 30 consecutive exchange days.

The convertible bonds mature 5 years after issue unless the bond holders do not exercise their right to convert the bonds to shares in the parent company. Conversion can be carried out from 28 October 2005 - 28 October 2010. No bonds were converted into shares during the financial year.

The convertible bonds mature if the bond holders do not exercise their right to convert the bonds to shares in the parent company. Conversion can be carried out until the due date, 28 October 2010. In the balance sheet, the convertible bond is divided into equity and liabilities. The liability component has been initially recognised at fair value, which was defined using the market interest on an equivalent liability at the moment when the bond was issued. The equity component has been calculated as the difference between the cash received from the bond issue and the fair value of the liability. The equity component of the convertible bond, EUR 174 thousand, is presented in the fund for investments of non-restricted equity

Covenants related to non-current loans

Loans from financial institutions include EUR 1,113 thousand (EUR 1,204 thousand) in long-term loans with the special condition that the loan will mature immediately when the creditor so demands. The bases for this demand are detailed in note number 2.25.

Capital loans

Biohit's principal shareholders and the State Treasury have granted the company a capital loan of EUR 1.0 million for product and other business-related development. The accumulated interest on the capital loan at 31 December 2008 totals EUR 0.6 million. The loan meets the provisions laid down in Chapter 12 of the Finnish Companies Act. The main terms are:

In the event of the dissolution and bankruptcy of the company, the payment of the capital, interest and other compensation is subordinated to all other creditors.
In other cases, the capital may be repaid only if a full margin remains on restricted equity and other non-distributable items in the balance sheet adopted for the company for the financial period last ended.
Interest and other compensation can be paid only if the amount to be paid can be used for the distribution of profit in accordance with the balance sheet adopted for the company for the financial period last ended.
Loan interest rates vary between 4% and 6% per annum.

Capital of EUR 0.1 million and interest of EUR 0.1 million on the capital loan is due for payment during 2009. These items are presented in the balance sheet under current liabilities. Other capital loans and their outstanding interest are presented under non-current liabilities.

Financial leasing liabilities
Total minimum rents	2008	2007
Due for payment in the next year	78	182
Due for payment in the next 2–5 years	0	78
Due for payment in more than 5 years	-	-
Total	78	260
Future financial expenses	0	-7
Present value of financial leasing liabilities	78	254

Present value of minimum rents
Due for payment in the next year	78	176
Due for payment in the next 2–5 years	0	78
Due for payment in more than 5 years	-	-
Present value of financial leasing liabilities	78	254

2.24 TRADE PAYABLES AND OTHER LIABILITIES

Non-interest-bearing liabilities, balance sheet values	2008	2007
Non-current non-interest-bearing liabilities
Deferred tax liabilities	0	82
Pension liabilities	53	53
Interest on capital loans	596	681
Other non-current liabilities	153	248
Total	801	1,064

Current non-interest-bearing liabilities
Trade payables	1,321	1,419
Other liabilities	493	816
Provisions	-	-
Advances received	250	199
Tax liabilities	172	183
Interest on capital loans	0	82
Accrued liabilities and prepaid income	2,488	2,607
Total	4,724	5,306

Total non-interest-bearing liabilities	5,525	6,369

Accrued liabilities and prepaid income include periodised employee benefits and leasing expenses.

2.25 FINANCIAL RISK MANAGEMENT

Biohit's risk management has focused on analysing and minimising the following major risks:

Exchange rate risk

International operations involve exchange rate risks. Weaker trends in the external value of the euro against the US dollar and the Japanese yen have improved the Group's profitability during the reporting period. A strengthening of the euro would likewise have a detrimental impact on profitability. The company seeks to protect itself from exchange rate risks by making procurements in currencies other than the euro.

At the closing date, 32% (33%) of the Group's external trade receivables and 11% (24%) of its trade payables were in foreign currencies.

Sensitivity analysis of changes in foreign currency exchange rates in accordance with IFRS7

2008 EUR thousands	USD	JPY	GBP
Net position	2,089	2,459	254
Effect on profit before taxes	100	348	-51
Effect on shareholders' equity	-113	145	-107

2007 EUR thousands	USD	JPY	GBP
Net position	1,680	1,723	565
Effect on profit before taxes	-80	-82	-27
Effect on shareholders' equity	-39	1	-6

The net position includes cash and cash equivalents in foreign currencies, as well as receivables and payables to both Group and non-Group companies.

Interest rate risk

Changes in interest rates have only a slight effect on Biohit's earnings, for which reason the Group has not implemented separate hedging measures during the financial period. The overall potential interest rate risk of deposits and short-term money market investments is not significant. The Group's income and cash flows from operating activities are largely independent of changes in market interest rates. Interest rate risks associated with the Group's credit granting are managed with fixed-rate lending. On the closing date, 65% (75%) of the Group's credit was fixed interest.

Sensitivity analysis of changes in interest levels in accordance with IFRS7

The Group has net floating rate liabilities totalling EUR 3,265 thousand (EUR 2,334 thousand). A change of 1 percentage point in the interest level at the end of the year would mean a +/- EUR 30 thousand (EUR 12 thousand) effect on the result before taxes.

The contractual repricing periods for floating rate liabilities are as follows:

2008	under 6 months		6-12 months 12-36 months	Later	Total
Loans from financial institutions	14	3,002	129	120	3,265

2007	under 6 months		6-12 months 12-36 months	Later	Total
Loans from financial institutions	25	2,061	129	120	2,334

Liquidity risk

Growing cost pressures in the liquid handling business and the outlays required in the diagnostics business give rise to financial risks whose management requires the optimisation of operational cost structure and the correct allocation of resources. Liquidity risk management aims to safeguard the Group's financing in all situations. The Group's liquid assets at the closing date totalled EUR 1.3 million. The Group's profitability improved in the previous financial year and this has strengthened the Group's financial position. If trends in the Group's profitability are weaker than expected, this will impact on liquidity.

The loan refinancing risk - that is, the risk that too large of a share of the Group's loans will fall due at a time when loan refinancing is financially impossible - is minimised by balancing out the loan maturities. However, a convertible bond of EUR 4.1 million will mature in full in 2010 if the bond holders do not exercise their right to convert them into shares in the parent company.

Biohit's non-current liabilities contain EUR 1.2 million in financing with the special condition that the loan will mature immediately if the equity ratio in the consolidated financial statements adopted by Biohit Oyj Group falls below 40% or the debtor or subsidiary has, without prior written consent of the creditor, placed or will place the collateral position of the creditor on a weaker footing than other creditors. Equity ratio in 2008 was 47% (44% in 2007).

Financial liability maturity analysis 2008

	<1 year	1-5 years	>5 years	Total
Trade payables and other non-interest-bearing liabilities	4,494	383	53	4,930
Repayments on loans from financial institutions	904	2,814	306	4,024
Financing costs for loans from financial institutions	161	280	15	456
Repayments on the convertible bond	-	4,050	-	4,050
Financing costs for the convertible bond	263	217	-	480
Repayments on capital loans	73	-	880	953
Financing costs for capital loans	48	-	596	644
Repayments on financial leasing liabilities	77	-	-	77
Financing costs for financial leasing liabilities	1	-	-	1
Total	6,021	7,744	1,850	15,615

Financial liability maturity analysis 2007

	<1 year	1-5 years	>5 years	Total
Trade payables and other non-interest-bearing liabilities	5,315	477	113	5,905
Repayments on loans from financial institutions	326	2,721	708	3,755
Financing costs for loans from financial institutions	174	430	31	636
Repayments on the convertible bond	-	4,050	-	4,050
Financing costs for the convertible bond	263	527	-	790
Repayments on capital loans	363	-	880	1,243
Financing costs for capital loans	105	-	681	786
Financing costs for financial leasing liabilities	7	1	-	8
Repayments on financial leasing liabilities	176	77	-	253
Total	6,730	8,283	2,414	17,427

Commodity risk

The company has not hedged against commodity risks with derivatives, as they are not appropriate to the nature of the company's business. Biohit engages in long-term delivery contracts to minimise any risks associated with commodity availability.

Credit and counterparty risk

Business units are responsible for any credit loss risks associated with their trade receivables, and have conducted separate evaluations of the credit risk associated with each customer. Biohit's customer base consists mainly of financially sound companies, and consequently Biohit does not consider credit loss risks significant. The Group has not taken out any credit insurance. Biohit mainly enters into long-term, active relationships with its customers, so that any changes in customers' credit ratings will quickly come to the company's attention.

At 31 December 2008, trade receivables totalled EUR 5.9 million (EUR 5.5 million). Trade receivables include EUR 0.3 million (EUR 0.5 million) in receivables from a single, financially stable customer. The maximum credit risk amount is equal to the carrying amount of trade receivables.

Breakdown of trade receivables by age	2008	2007
Not yet falling due	4,088	3,592
Under 60 days	1,356	1,690
61-120 days	332	157
121-360 days	57	83
Over 360 days	24	11
Total	5,857	5,532

In 2008, EUR 39 thousand in credit losses from trade receivables were recognised (EUR 19 thousand in 2007).

Equity structure management

Biohit's equity structure management aims to safeguard the Group's ability to operate in all situations. The equity ratio is used to monitor equity structure, and it should remain above 40%.

The equity structure indicator – the equity ratio – is calculated by dividing the Group's shareholders' equity by the balance sheet total minus advances received and then multiplying the result by 100.

Equity ratio	2008	2007
Total shareholders' equity	12,492	11,842
Balance sheet total	27,107	27,337
Advances received	-251	-199
Equity ratio	47%	44%

2.26 OPERATING CASH FLOW ADJUSTMENTS

Other adjustments for transactions with no associated cash flow	2008	2007
Financial income and expenses	318	658
Capital gains from sales of property, plant and equipment	0	-16
Change in provisions	0	-56
Other adjustments	0	16
Total	318	602

2.27 RELATED PARTY TRANSACTIONS

Parties are considered to be related parties if one party is able to exercise control over the other or has substantial influence in decision making relating to the other's finances and business operations. The Group's related parties include the parent company and subsidiaries. Related parties also include members of the Board of Directors, the Group's Management Team, and the President & CEO.

Salaries and other current employee benefits	2008	2007
Parent company
Management Teams	678	827
President and CEO	203	190
Subsidiaries
Managing Directors	730	712
Fees of Board Members
Parent company
Osmo Suovaniemi	14	14
Reijo Luostarinen	19	19
Mårten Wikström	14	14
Peter Tchernych	-	12
Tero Kauppinen	14	14
Mikko Salaspuro	14	-
Peter Coggins	-	6
Parent company, total	76	80
Subsidiaries
Members of the Boards	108	76
Other operating expenses
Consulting fees
Companies controlled by Board Members	18	38
Key members of the parent company's management	-	30
Total consulting fees	18	68
Capital loans from related parties
Loan amounts	880	880
Interest for the period	48	48
Total in interest payment liabilities	596	681
Average loan interest, per annum	5.4 %	5.4 %

The main terms for the capital loans are presented in note number 2.23.

Group's parent company and subsidiaries

Parent company Biohit Oyj, Finland	Group's holding
Biohit Ltd, UK	100%
Biohit SAS, France	100%
Biohit Deutschland GmbH, Germany	100%
Biohit Japan Co., Ltd, Japan	100%
Biohit Inc., USA	100%
Biohit OOO, Russia	100%
Biohit Biotech (Suzhou) Co., Ltd, China	100%
Oy Finio Ab, Finland	100%
Vantaan Hienomekano Oy, Finland	100%

Oy Finio Ab and Vantaan Hienomekano Oy did not conduct any business operations in 2008 or 2007.

2.28 CONTINGENT LIABILITIES

Liabilities for which corporate mortgages and shares
have been lodged as collateral	2008	2007
Loans from financial institutions	3,496	3,307
Corporate mortgages	2,276	1,603
Mortgages on real estate	1,900	1,957
Other liabilities	237	331
Mortgages on real estate	757	757
Lease agreements	2,144	2,442
Corporate mortgages	235	235
Operational lease agreements and lease agreements
Due for payment in the next year	1,377	1,488
Due for payment in the next 2–5 years	2,657	3,662
Due for payment in more than 5 years	0	979
Total	4,034	6,129

The Group has rented office and warehouse buildings for its use under different types of lease agreements. In addition, other lease agreements for tangible assets that are not finance lease agreements are classified as other lease agreements. Their rents are expensed over the lease period.

3 KEY RATIOS

3.1 Key financial ratios

	IFRS	IFRS	IFRS	IFRS	IFRS
	2004	2005	2006	2007	2008
Net sales	26,702	28,660	31,408	33,011	35,095
Change in net sales, %	1.7 %	7.3 %	9.6 %	5.1 %	6.3 %
Operating profit/loss	251	-33	-143	-197	1,314
% of net sales	0.9 %	-0.1 %	-0.5 %	-0.6 %	3.7 %
Profit/loss before extraordinary items and taxes	104	-256	-607	-1,116	996
% of net sales	0.4 %	-0.9 %	-1.9 %	-3.4 %	2.8 %
Profit/loss before taxes	104	-256	-607	-1,116	996
% of net sales	0.4 %	-0.9 %	-1.9 %	-3.4 %	2.8 %
Return on equity, %	-1.1 %	-1.6 %	-6.1 %	-11.9 %	7.4 %
Return on investment (ROI), %	2.0 %	0.5 %	0.0 %	-0.6 %	8.2 %
Equity ratio, %	62.3 %	51.5 %	49.4 %	43.6 %	46.5 %
Investments in fixed assets	2,260	1,988	1,928	2,081	1,213
% of net sales	8.5 %	6.9 %	6.1 %	6.3 %	3.5 %
R&D expenditure	1,304	1,630	1,689	2,005	2,044
% of net sales	4.9 %	5.7 %	5.4 %	6.1 %	5.8 %
Total assets	22,759	27,851	27,320	27,337	27,107
Personnel, average	291	295	310	352	369
3.2 Key per share ratios	IFRS 2004	IFRS 2005	IFRS 2006	IFRS 2007	IFRS 2008
Earnings per share, undiluted, EUR	-0,01*	-0,02*	-0,06*	-0,12*	0,07*
Equity per share attributable to the equity
holders of the parent company, EUR	1.09	1.10	1.04	0.92	0.97
Price/earnings ratio, (P/E)	-158	-123	-31	-14	18
Dividend per share	-	-	-	-	-
Dividend/earnings, %	-	-	-	-	-
Effective dividend yield, %	-	-	-	-	-
Series B share price trend, EUR
- average	2.39	2.20	2.26	2.42	1.41
- low	1.75	1.75	1.99	1.51	0.91
- high	3.09	2.87	2.61	3.29	1.92
- price at 31 Dec	2.06	2.15	2.03	1.57	1.27
Market capitalisation, EUR 1,000
(assuming the market price of the Series A
share is the same as that of the Series B share)	26,652	27,816	26,263	20,312	16,431
Turnover of Series B shares, 1,000 shares	1,131	2,114	1,530	3,436	1,742
- % of total number of shares	12.5 %	23.3 %	16.9 %	37.9 %	17.5 %
Average number of shares,
adjusted for share issues	12,937,627	12,937,627	12,937,627	12,937,627	12,937,627
- accounting for the dilutive effect of options and bonds	-	13,095,435	13,837,627	13,837,627	13,837,627
Total number of shares at the closing date,
adjusted for share issues	12,937,627	12,937,627	12,937,627	12,937,627	12,937,627
- accounting for the dilutive effect of options and bonds	-	13,837,627	13,837,627	13,837,627	13,837,627

*) options and bonds have no dilutive effect

As of 1 January 2004, financial statements have been drafted in accordance with IFRS.

4 SHARES AND SHAREHOLDERS

4.1 Share turnover and average price

4.2 Shares and shareholders

Holdings by shareholder group, 31 Dec 2008

		No of shareholders		No of shares
Series A shares	no.	%	no.	%
1. Companies	1	0.9	24,990	0.8
2. Households	8	99.1	2,943,000	98.9
Shares on the waiting list			7,510	0.3
Total Series A shares	9	100.0	2,975,500	100.0

		No of shareholders		No of shares
Series B shares	no.	%	no.	%
1. Companies	145	4.2	2,137,092	16.7
2. Financial and insurance institutions	2	0.1	2,210	0.0
3. Public sector organisations	1	0.0	391,800	3.0
4. Non-profit organisations	8	0.2	27,821	0.2
5. Households	3,289	95.0	7,346,373	79.6
6. Foreign ownership	18	0.5	51,239	0.4
Shares on the joint book-entry account			5,592	0.1
Series B shares	3,485	100.0	9,962,127	100.0
Total Series A and B shares	3,494		12,937,627

		No of shareholders		No of shares
Series A shares	no.	%	no.	%
1-1,000	1	11.1	10	0.0
10,001-50,000	1	11.1	24,990	0.6
Over 50,000	7	77.8	3,825,500	98.7
Shares on the waiting list			25,000	0.6
Total Series A shares	9	100.0	3,875,500	100.0

		No of shareholders	No of shares
Series B shares	no.	%	no.	%
1-1,000	2,873	82.4	1,036,623	11.4
1,001-5,000	458	13.1	998,923	11.0
5,001-10,000	74	2.1	559,828	6.2
10,001-50,000	64	1.8	1,197,081	13.2
Yli 50,000	16	0.5	5,264,080	58.1
Shares on the joint book-entry account			5,592	0.1
Total Series B shares	3,485	100.0	9,062,127	100.0
Total Series A and B shares			12,937,627

Largest registered shareholders, 31 December 2008

The 10 largest shareholders by number of shares	Series A shares	Series B shares	Total shares	%
Suovaniemi, Osmo	2,265,340	965,207	3,230,547	25.0
Sipponen, Pentti	-	910,000	910,000	7.0
Biocosmos Oy		693,735	693,735	5.4
Suovaniemi, Ville	208,280	371,300	579,580	4.5
Interlab Oy		572,762	572,762	4.4
Suovaniemi, Joel	208,280	333,000	541,280	4.2
Etra-Invest Oy Ab		420,000	420,000	3.3
Suovaniemi, Oili	111,600	288,935	400,535	3.1
Etera Mutual Pension Insurance Company		391,800	391,800	3.0
Härkönen, Matti	57,200	329,515	386,715	3.0
The 10 largest shareholders by number of votes	Series A shares	Series B shares	Total votes	%
Suovaniemi, Osmo	45,306,800	965,207	46,272,007	66.6
Suovaniemi, Ville	4,165,600	371,300	4,536,900	6.5
Suovaniemi, Joel	4,165,600	333,000	4,498,600	6.5
Suovaniemi, Oili	2,232,000	288,935	2,520,935	3.6
Suovaniemi, Vesa	1,496,000	220,699	1,716,699	2.5
Härkönen, Matti	1,144,000	329,515	1,473,515	2.1
Sipponen, Pentti	-	910,000	910,000	1.3
Biocosmos Oy	-	693,735	693,735	1.0
Tech Know Oy Ltd	499,800	98,000	597,800	0.9
Interlab Oy	-	572,762	572,762	0.8

Management's shareholding, 31 Dec 2008

On 31 December 2008, members of the Board of Directors and the President and CEO owned a total of 2,275,340 Series A shares and 2,338,542 Series B shares. These represent 35.7% of the total number of shares outstanding and 68.0% of the voting rights conferred.

5 FORMULAS FOR THE KEY RATIOS

Return on equity, %	result for the period X 100 shareholders' equity (average over the year)
Return on investment, %	profit before extraordinary items + interest and other financial expenses X 100 balance sheet total – non-interest-bearing liabilities (average over the year)
Equity ratio, %	shareholders' equity in the balance sheet X 100 balance sheet total – advance payments received
Earnings per share, EUR	profit for the period average number of shares, adjusted for share issues
Equity per share, EUR	shareholders' equity in the balance sheet number of shares on the closing date
Dividends per share, EUR	dividends for the period number of shares on the closing date
Dividends per earnings, %	dividends per share X 100 earnings per share
Effective dividend yield, %	dividends per share X 100 closing share price
Price per earnings ratio, (P/E)	closing share price earnings per share

1000 € Note number 1 Jan - 31 Dec 2008 1 Jan - 31 Dec 2007 Net sales 6.1 22,918 20,073 Change in inventories of finished goods and work in progress -99 144 Other operating income 6.2 139 106 Materials and services 6.3 -5,952 -5,569 Personnel expenses 6.4 -7,417 -7,715 Depreciation and impairment 6.5 -1,809 -1,774 Other operating expenses 6.6 -6,482 -6,766 Operating profit/loss 1,300 -1,500 Financial income and expenses 6.7 -671 -547 Profit/loss before appropriations and taxes 629 -2,047 Appropriations 6.8 316 8 Profit/loss for the period 945 -2,039

Parent company income statement

Parent company balance sheet (FAS)

EUR 1,000	Note number	31 Dec 2008	31 Dec 2007
Assets
Non-current assets
Intangible assets	6.9	2,304	2,415
Tangible assets	6.10	5,407	6,057
Investments
Participations in Group companies	6.11	3,805	3,805
Other investments	6.11	7	7
Total non-current assets		11,522	12,284
Current assets
Inventories	6.12	3,620	3,724
Non-current receivables	6.13	20	44
Current receivables	6.13	8,670	7,251
Marketable securities	6.14	480	923
Cash at bank and in hand	6.15	516	159
Total current assets		13,306	12,102
Total assets		24,828	24,386
Liabilities
Shareholders' equity
Share capital	6.16	2,199	2,199
Fund for investments of non-restricted equity	6.16	12,230	12,230
Accumulated profit/loss from previous years	6.16	-3,669	-1,630
Profit/loss for the period	6.16	945	-2,039
Total shareholders' equity		11,705	10,760
Accumulated appropriations	6.17	-	316
Obligatory provisions	6.18	-	-
Liabilities
Non-current liabilities	6.20	7,755	8,230
Capital loans	6.21	880	880
Current liabilities	6.22	4,415	3,837
Capital loans	6.21	73	363
Total liabilities		13,123	13,310
Total liabilities		24,828	24,386

Parent company cash flow statement

EUR 1,000	2008	2007
Cash flow from operating activities:
Profit/loss before extraordinary items	945	-2,047
Adjustments for:
Depreciation according to plan	1,809	1,774
Financial income and expenses	671	547
Other adjustments	15	328
Change in working capital:
Increase (-) or decrease (+) in current non-interest-bearing trade receivables	-1,819	-43
Increase (-) or decrease (+) in inventories	104	49
Increase (+) or decrease (-) in current non-interest-bearing liabilities	156	134
Interest and other financial items paid	-816	-475
Interest received from operating activities	8	6
Cash flow from operating activities	1,072	271
Cash flow from investing activities:
Investments in tangible and intangible assets	-1,095	-1,788
Investments in other securities	-	-1,200
Capital gains from other investments	443	1,110
Proceeds from sales of tangible and intangible assets	-	16
Repayments of loan receivables	91	76
Interest and other income received from investments	-	14
Cash flow from investing activities	-561	-1,773
Cash flow from financing activities:
Increase in long-term borrowings	500	2,434
Repayments of long-term borrowings	-655	-868
Cash flow from financing activities	-155	1,566

Increase (+) or decrease (-) in cash and cash equivalents	356	64
Cash and cash equivalents at the beginning of the financial period	159	95
Cash and cash equivalents at the end of the financial period	516	159

6 NOTES TO THE PARENT COMPANY'S FINANCIAL STATEMENTS

6.0 ACCOUNTING POLICY

When preparing financial statements in accordance with Generally Accepted Accounting Principles, the company's management must make estimates and assumptions. Actual results may differ from these estimates.

These financial statements have been prepared in accordance with the Finnish Accounting Act.

The financial statements are presented in thousands of euros and are based on initial transaction values, except for marketable securities included in current assets, which have been measured at fair value.

Measurement of property, plant and equipment

Property, plant and equipment have been entered into the balance sheet at the original acquisition cost less grants received, deprecation according to plan, and impairment. Depreciation according to plan has been calculated on a straight-line basis over the useful economic lives of the items of property, plant or equipment.

Depreciation periods according to plan are:

Intangible rights	3 -10 years
Goodwill	10 years
Development expenditure	5 years
Other capitalised expenditure	5 - 10 years
Buildings	20 years
Machinery and equipment	3 -10 years

Measurement of inventories

Inventories are presented using the FIFO principle at acquisition cost, or at the lower of the replacement cost or the probable sale price. In addition to the direct costs, the acquisition cost of inventories includes an appropriate proportion of production overheads.

Valuation of marketable securities

Marketable securities included in current assets are measured at fair value. The fair value of all investments is measured on the basis of released price quotations on well-functioning markets, that is, buy quotations on the closing date. Both gains and losses due to changes in fair value are recorded in the income statement in the period in which they materialised.

Research and development expenditure

Research expenditure is expensed in the year it is incurred. Development expenditure for new products has been capitalised as intangible assets in the balance sheet since 1 January 2004 and amortised over the economic lives of the products within a maximum of five years.

Revenue recognition

Net sales are calculated as gross sales less indirect sales taxes and discounts. Revenues from products and services are recognised upon delivery.

Maintenance and repairs

Maintenance and repair costs are recorded as expenses in the financial year they are incurred. The costs of renovating rented premises have been capitalised under "other capitalised expenditure", with depreciation calculated on a straight-line basis over the remaining lease period.

Pensions

Pension schemes and any additional pension benefits required by Finnish law are arranged through pension insurance companies. Pension costs are recorded over the period of service of employees on an accrual basis.

Deferred taxes

Deferred taxes have not been recognised in the balance sheet. In accordance with the general guidelines of the Finnish Accounting Standards Board, issued on 12 September 2006, the notes to the financial statements present the amount of deferred taxes that could be recognised in the balance sheet and the amount of tax liabilities and assets that are unlikely to materialise and as such should not be recognised in the balance sheet.

Foreign currency translation

Figures for receivables and liabilities in foreign currencies are converted into euros at the exchange rate quoted by the European Central Bank on the closing date. Exchange rate gains and losses are recognised through profit or loss.

6.1 NET SALES BY BUSINESS AREA

	2008	2007
Liquid handling	21,974	18,922
Diagnostics	944	1,151
Total	22,918	20,073

Net sales by geogr aph ical area	2008	2007
Finland	1,489	1,812
The rest of Europe	10,091	9,188
North and South America	4,129	3,899
Asia	3,743	2,090
Other countries	3,466	3,083
Total	22,918	20,073

6.2 OTHER OPERATING INCOME

	2008	2007
Capital gains on the sale of property, plant and equipment	0	16
From Group companies	17	51
Other	122	39
Total	139	106

6.3 MATERIALS AND SERVICES

	2008	2007
Purchases during the year	5,584	4,978
Change in inventories	5	193
Total raw materials and consumables	5,589	5,171
External services	363	398
Total materials and services	5,952	5,569

6.4 PERSONNEL EXPENSES AND NUMBER OF PERSONNEL

	2008	2007
Salaries and wages	6,315	6,574
Pension expenses	1,007	1,047
Other personnel expenses	556	517
Wages and salaries capitalised in non-current assets	-461	-424
Total personnel expenses	7,417	7,715

EUR 395 thousand (EUR 362 thousand) in development expenditure (wages and salaries) and EUR 62 thousand (EUR 66 thousand) related to mould production was capitalised during the financial year.

Average number of people employed by the parent company during the year	2008	2007
Salaried employees	87	92
Non-salaried employees	84	86
Average number of personnel	171	178
Personnel at end of period	163	172

6.5 DEPRECIATION

	2008	2007
Intangible assets	620	590
Buildings	132	132
Machinery and equipment	1,056	1,051
Total	1,809	1,774

6.6 OTHER OPERATING EXPENSES

	2008	2007
Travel and other personnel-related expenses	887	1,061
Rent and maintenance expenses	1,838	1,874
Marketing and sales expenses	1,417	1,257
Other external services	1,114	1,205
Depreciation of trade receivables	372	425
Other operating expenses	854	943
Total	6,482	6,766

Depreciation of trade receivables contains EUR 335 thousand (EUR 400 thousand) in receivables from Group companies.

6.7 FINANCIAL INCOME AND EXPENSES

	2008	2007
Interest income from long-term investments
From others	3	4
Total income from long-term investments	3	4
Other interest and financial income
From Group companies	-	2
From others	5	17
Other interest and financial income	5	19
Total interest income from long-term investments and other
interest and financial income	8	23
Interest expenses and other financial expenses
To Group companies	-14	-10
To others	-665	-560
Total interest expenses and other financial expenses	-679	-570
Total financial income and expenses	-671	-547
Foreign exchange losses included under 'Financial income and expenses' (net)	-21	-36

The items presented above operating profit include EUR 552 thousand in net exchange rate losses (EUR 309 thousand). These financial items contain EUR 37 thousand (EUR 4 thousand) in unrealised financial income from securities recognised at fair value.

6.8 APPROPRIATIONS

	2008	2007
The accumulated difference between the depreciation
according to plan and depreciation in taxation	316	8

6.9 INTANGIBLE ASSETS

				Other
	Development	Intangible		capitalised
2008	expenditure	rights	Goodwill	expenditure	Total
Acquisition cost at beginning of year	854	1,604	6,558	1,266	10,282
Increases	341	126	-	135	602
Decreases	-	-	-	-	-
Transfers between items				-93	-93
Acquisition cost at end of year	1,195	1,730	6,558	1,309	10,792
Accumulated depreciation and impairment at
beginning of year	-101	-1,100	-5,502	-1,166	-7,868
Depreciation and impairment during the year	-	-	-	-	-
Accumulated depreciation at end of year	-222	-1,203	-5,854	-1,210	-8,489
Carrying amount at end of year	973	527	705	98	2,303

Acquisition costs consist of patents transferred and a liquidation loss as a result of the dissolution of Locus genex Oy.

				Other
	Development	Intangible		capitalised
2008	expenditure	rights	Goodwill	expenditure	Total
Acquisition cost at beginning of year	566	1,519	6,558	1,366	10,009
Increases	287	85	-	257	629
Decreases	-	-	-	-	-
Acquisition cost at end of year	854	1,604	6,558	1,266	10,281
Accumulated depreciation and impairment at
beginning of year	-58	-979	-5,149	-1,090	-7,277
Depreciation and impairment during the year	-	-	-	-	0
Accumulated depreciation at end of year	-101	-1,100	-5,502	-1,165	-7,867
Carrying amount at end of year	753	504	1,057	101	2,415

6.10 TANGIBLE ASSETS

		Machinery
2008	Buildings	and equipment	Total
Acquisition cost at beginning of year	2,594	12,184	14,779
Increases	-	445	445
Decreases	-	0	0
Transfers between items	-	93	93
Acquisition cost at end of year	2,594	12,722	15,316
Accumulated depreciation and impairment at beginning of year	-872	-7,849	-8,721
Accumulated depreciation of decreases	-	-	0
Depreciation during the year	-132	-1,056	-1,189
Accumulated depreciation at end of year	-1,005	-8,905	-9,910
Carrying amount at end of year	1,590	3,817	5,406

The unamortised acquisition cost of production machinery and equipment is EUR 3,537 thousand (EUR 4,019 thousand).

		Machinery
2007	Buildings	and equipment	Total
Acquisition cost at beginning of year	2,594	10,937	13,531
Increases	-	1,188	1,188
Decreases	-	-297	-297
Transfers between items	-	357	357
Acquisition cost at end of year	2,594	12,184	14,779
Accumulated depreciation and impairment at beginning of year	-740	-7,085	-7,825
Accumulated depreciation of decreases	-	287	287
Depreciation during the year	-132	-1,051	-1,183
Accumulated depreciation at end of year	-872	-7,849	-8,721
Carrying amount at end of year	1,722	4,336	6,058
6.11 SHARES AND HOLDINGS
2008 Shares	Group companies	Other shares	Total
Carrying amount at beginning and end of year	3,805	7	3,812
2007 Shares	Group companies	Other shares	Total
Carrying amount at beginning and end of year	3,805	7	3,812

6.12 INVENTORIES

	2008	2007
Raw materials and consumables	1,855	1,934
Products in progress	728	755
Finished products/goods	1,037	1,035
Total inventories	3,620	3,724

6.13 RECEI VABLES
Non-current receivables	2008	2007
Receivables from others
Payments and accrued income	20	44
Total non-current receivables	20	44

Current receivables	2008	2007
Receivables from Group companies
Trade receivables	6,203	4,758
Loan receivables	-	91
Other receivables	16	12
Total	6,219	4,861
Receivables from others
Trade receivables	2,127	2,065
Other receivables	214	251
Prepayments and accrued income	110	74
Total	2,450	2,390
Total current receivables	8,670	7,251

At 31 December 2008, EUR 44 thousand (EUR 69 thousand) in convertible bond issue costs have been capitalised in prepayments and accrued income.

Capitalised expenditure is expensed over a resting two-year (three-year) maturity.

6.14 MARKETABLE SECURITIES

	2008	2007
Investments in funds	480	923

Marketable securities consist of investments in interest funds.

6.15 CASH AND CASH EQUIVALENTS

	2008	2007
Cash at bank and in hand	516	159

6.16 SHAREHOLDERS' EQUITY

	2008	2007
Share capital, 1 Jan and 31 Dec	2,199	2,199
Fund for investments of non-restricted equity, 1 Jan and 31 Dec	12,230	12,230
Accumulated profit/loss from previous years, 1 Jan and 31 Dec	-3,669	-1,630
Reported profit for the year	945	-2,039

Total shareholders' equity	11,705	10,760

Shares and voting rights

Biohit's shares are divided into Series A and B shares. Series A shares confer twenty (20) votes at General Meetings and Series B shares confer one (1) vote. however, in the payment of dividends, a dividend of two (2) per cent higher than the nominal value is paid for Series B shares than is paid for Series A shares.

Notes to the parent company financial statements, FAS

Structure of the parent company's	2008				2007
shareholders' equity	no.	EUR	% of shares	% of votes	no.	EUR
Series A shares (20 votes per share)	2,975,500	505,835	23.0	85.7	3,875,500	658,835
Series B shares (1 vote per share)	9,962,127	1,693,562	77.0	14.3	9,062,127	1,540,562
Total	12,937,627	2,199,397	100.0	100.0	12,937,627	2,199,397

The company does not own any of its own shares. The Board of Directors has no valid authorisations to carry out a share issue or issue of convertible bonds or bonds with warrants, or to buy back the company's own shares. The company has no share option schemes.

6.17 ACCUMULATED APPROPRIATIONS

Accumulated appropriations on 31 Dec 2007 comprise accumulated depreciation differences.

6.18 OBLIGATORY PROVISIONS

Provisions for warranty	2008	2007
1 Jan	-	56
Released during the period	-	-10
Reversals of unused provisions	-	-46
Total obligatory provisions		-

6.19 DEFERRED TAX LIABILITIES AND ASSETS

The company has a total of EUR 2,033 thousand (EUR 1,913 thousand) in deferred tax assets from tax losses and temporary differences. The company's management estimates that EUR 1,463 thousand (EUR 1,459 thousand) of this amount can be utilised.

6.20 NON-CURRENT LIABILITIES

	2008	2007
Loans from Group companies	231	231
Loans from others
Loans from financial institutions	2,736	3,031
Convertible bonds	4,050	4,050
Other non-current liabilities	142	237
Interest on capital loans	596	681
Total non-current liabilities	7,755	8,230

Liabilities falling due after five years:	2008	2007
Loans from financial institutions	306	521
Capital loans	880	880
Total	1,186	1,401

Non-current liabilities include convertible bonds totalling EUR 4,050 thousand. The main terms of the bonds are presented in the notes (2.23) to the consolidated financial statements.

6.21 CAPITAL LOANS

	2008	2007
From related parties	880	880
From others	73	363
Total	953	1,243

The company has capital loans totalling EUR 953 thousand. The main terms for these loans are detailed in the notes to the consolidated financial statements.

6.22 CURRENT LIABILITIES

	2008	2007
Loans from financial institutions, current portion	794	269
Other non-current liabilities, current portion	95	95
Advances received	66	33
Accrued liabilities and prepaid income	1,778	2,149
Other liabilities	170	194
Liabilities to Group companies
Trade payables	496	17
Accrued liabilities and prepaid income	60	93
Total current liabilities	4,415	3,837

Accrued liabilities and prepaid income include holiday pay periodisation and related social expenses totaling EUR 984 thousand (EUR 1,068 thousand), leasing cost periodisation of EUR 358 thousand (EUR 361 thousand), and interest cost periodisation of EUR 92 thousand (EUR 170 thousand).

6.23 LIABILITIES AND COMMITMENTS WITH MORTGAGES AS COLLATERAL

Liabilities for which mortgages have been lodged as collateral	2008	2007
Loans from financial institutions	3,096	2,849
Corporate mortgages	2,276	1,603
Mortgages on real estate	1,500	1,500
Other liabilities	237	331
Mortgages on real estate	763	763
Lease agreements	2,037	2,442
Corporate mortgages	235	235

The parent company has assumed EUR 0.3 million (EUR 0.3 million) in contingent liabilities on behalf of Group companies.

Leasing commitments	2008	2007
Due for payment the following year	373	426
Due for payment at a later date	329	398
Total	702	825

Rental commitments	2008	2007
Due for payment the following year	429	407
Due for payment at a later date	1,715	2,035
Total	2,144	2,442

Leasing commitments and rents mainly consist of fixed-term leasing and rental agreements that are effective for more than one year

7 The Board of Directors' proposal concerning the loss for the financial year

The Board of Directors proposes to the Annual General Meeting that no dividend be paid and that the EUR 945,125.10 million profit for the financial year be transferred to reatined earnings.

Helsinki, 31 March 2009

Reijo Luostarinen Osmo Suovaniemi Tero Kauppinen Chairman of the Board Member of the Board Member of the Board

President and CEO

Kalle Kettunen Mikko Salaspuro Mårten Wikström Member of the Board Member of the Board Member of the Board

8 AUDITOR'S REPORT

To the Annual General Meeting of Biohit Oyj

We have audited the accounting records, the financial statements, the report of the Board of Directors, and the administration of Biohit Oyj for the financial period 1.1.2008 - 31.12.2008. The financial statements comprise the consolidated balance sheet, income statement, cash flow statement, statement of changes in equity and notes to the consolidated financial statements, as well as the parent company's balance sheet, income statement, cash flow statement and notes to the financial statements.

The responsibility of the Board of Directors and the Managing Director

The Board of Directors and the Managing Director are responsible for the preparation of the financial statements and the report of the Board of Directors and for the fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, as well as for the fair presentation of the parent company's financial statements and the report of the Board of Directors in accordance with laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The Board of Directors is responsible for the appropriate arrangement of the control of the company's accounts and finances, and the Managing Director shall see to it that the accounts of the company are in compliance with the law and that its financial affairs have been arranged in a reliable manner.

Auditor's responsibility

Our responsibility is to perform an audit in accordance with good auditing practice in Finland, and to express an opinion on the parent company's financial statements, on the consolidated financial statements and on the report of the Board of Directors based on our audit. Good auditing practice requires that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements and the report of the Board of Directors are free from material misstatement and whether the members of the Board of Directors and the Managing Director have complied with the Limited Liability Companies Act.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements and the report of the Board of Directors. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements and the report of the Board of Directors.

The audit was performed in accordance with good auditing practice in Finland. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion on the consolidated financial statements

In our opinion, the consolidated financial statements give a true and fair view of the financial position, financial performance, and cash flows of the group in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU.

Opinion on the company's financial statements and the report of the Board of Directors

In our opinion, the financial statements, together with the consolidated financial statements included therein, and the report of the Board of Directors give a true and fair view of the financial performance and financial position of the company in accordance with the laws and regulations governing the preparation of the financial statements and the report of the Board of Directors in Finland. The information in the report of the Board of Directors is consistent with the information in the financial statements.

Helsinki, March 31, 2009

Ernst & Young Oy Authorized Public Accountant Firm

Erkka Talvinko Authorized Public Accountant

AI assistant

Biohit Oyj — Annual Report 2008

3304_10-k_2009-03-31_4581f404-e6c7-4d7d-b349-9e149a88a32e.pdf

Financial statements 2008

1 REPORT OF THE BOARD OF DIRECTORS 2008

Net sales

Result

Balance sheet

Liquidity

Research and development

Investments

Personnel

Administration

Liquid handling business

Main events of the financial year

Diagnostics business

Main events of the financial year

Incorporation of the diagnostics business

Shares and shareholders

Liquidity provision

Convertible bonds

Capital loans

Short-term risks and uncertainty factors

Outlook for 2009

Events after the close of the financial year

The board of directors' proposal for the disposal of earnings and distribution of other non-restricted equity

CORPORATE GOVERNANCE

Annual General Meeting

The tasks of the General Meeting

Notice of Annual General Meeting

AGM attendance and publishing decisions

Share series

Board of Directors

Composition and term of office

The tasks of the Board of Directors

Board meetings and self-assessment

President and CEO

Management

Group Management Teams

Managing directors of subsidiaries

Compensation

Internal control, risk management and internal audit

Internal control

Risk management

Internal audit

Insider regulations

Insider guidelines

Permanent insiders and insider registers

Insider control

Audit

Communications

Consolidated income statement

Consolidated balance sheet

Consolidated statement of changes in shareholders' equity

Consolidated cash flow statement

2 Notes to the consolidated financial statements

2.1 Company profile

2.2 Accounting policy applied in the financial statements

Accounting policy

Accounting policy applied in the consolidated financial statements

Subsidiaries

Translation of items denominated in foreign currency

Business segments

Income recognition

Property, plant and equipment

Costs of debt

Public grants

Intangible assets

Goodwill

Research and development expenditure

Other intangible assets

Impairment of tangible and intangible assets

Inventories

Lease agreements

The Group as lessee

Pension obligations

Provisions

Income taxes

Financial assets and liabilities

Impairment of financial assets

Biohit Oyj Annual Report 2008