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1. Parent Company accounting principles (FAS)

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

Non-current assets

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

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

Inventories

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

Financial assets

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

Foreign currency items

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

Pension costs

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

Research and development costs

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

Income taxes

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

Principles of revenue recognition Sales of goods and services rendered

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

Long-term projects

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

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

Other operating income and expenses

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

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

In addition, fair value changes in derivatives to which the Group does not apply hedge accounting under IAS 39 are recognised in other income and expenses.

	2. Net sales by market area	Parent Company
	EUR million	2005	2004
	Europe	56.3	51.2
	of which Finland	7.5	6.0
	North America	36.1	29.3
	Asia and Australia	33.3	36.3
	Africa, South and Central America	8.9	9.7
	Total	134.5	126.5

	3. Other operating income	Parent Company
	EUR million	2005	2004
	Gains on the disposal of fixed assets	0.0	0.0
	Foreign exchange gains from derivatives	0.2	1.2
	Others	0.0	0.1
	Total	0.2	1.3
	Other operating costs
	Foreign exchange losses from derivatives	-1.5	-0.5

	4. Personnel	Parent Company
		2005	2004
	Personnel costs
	Wages and salaries	32.4	28.2
	Pension costs	5.0	4.0
	Other personnel costs	2.8	1.6
	Total	40.2	33.7
	Personnel on average during the year (persons)
	In Finland	679	694
	Outside Finland	20	19
	Total	698	713
	Personnel Dec. 31
	In Finland	644	673
	Outside Finland	23	18
	Total	667	691
	Salaries
	Pekka Ketonen, Presidents and CEO
	Salary	0.21	0.22
	Bonuses	0.04
	Remuneration paid to Members of the Board of Directors
	Raimo Voipio, Chairman of the Board	0.03	0.03
	Pekka Hautojärvi, Member of the Board	0.01	0.01
	Mikko Niinivaara, Member of the Board	0.01	0.01
	Yrjö Neuvo, Member of the Board	0.01	0.01
	Mikko Voipio, Member of the Board	0.01	0.01
	Gerhard Wendt, Member of the Board	0.01	0.01
		0.35	0.31
	Salaries paid to the other employees	28.10	26.06
	Total	28.45	26.37

Cash loans, securities or contingent liabilities were not granted to the President or to the members of the Board of Directors.

	5. Financial income and expenses				Parent Company
	EUR million				2005	2004
	Dividend income
	From Group companies				3.3	1.1
	From others				0.0	0.0
	Interest income on long-term investments
	From Group companies				0.2	0.1
	Other interest and financial income
	From Group companies
	From others				0.7	0.7
	Change in fair value of assets recognised at fair value through profit an loss*				0.2	0.0
	Interest and other financial expenses
	From others				-0.1	-0.1
	Foreign exchange gains and losses
	From Group companies				1.2	0.6
	From others				1.6	-2.0
	Total				7.2	0.6

	6. Income taxes				Parent Company
	EUR million				2005	2004
	Taxes for the financial year				5.3	5.6
	Taxes from previous years				0.0	0.0
	Taxes paid at source abroad				0.0	0.0
	Deferred tax liability				0.4	-0.1
	Total				5.7	5.6

	7. Fixed assets and other long-term investments
	Parent Company
	EUR million		Intangible	Other long-term
	Intangible assets		rights	expenditure		Total
	Acquisition cost Jan. 1		12.2	0.8		13.0
	Increases		0.8	0.0		0.8
	Decreases		0.0	-		0.0
	Transfers between items		-	-		-
	Acquisition cost Dec. 31		13.0	0.8		13.7
	Accumulated depreciation
	and write-downs Jan. 1		9.9	0.4		10.3
	Accumulated depreciation of decreases and transfers		0.0	-		0.0
	Depreciation for the financial year		1.3	0.0		1.4
	Write-downs		-	-		-
	Accumulated depreciation Dec. 31		11.2	0.4		11.7
	Balance sheet value Dec. 31, 2005		1.7	0.4		2.1
	Balance sheet value Dec. 31, 2004		2.3	0.4		2.7
	Parent Company
	EUR million
		Land and waters	Buildings and structures	Machinery and equipment	Other tangible assets	Advance payments and construction in progress	Total
	Tangible assets
	Acquisition cost Jan. 1	1.2	28.7	29.1	0.0	2.0	61.0
	Increases	-	0.0	1.0	-	1.8	2.8
	Decreases	-	-0.6	-0.7	-	0.0	-1.3
	Transfers between items	-	0.2	1.8	-	-2.0	-
	Acquisition cost Dec. 31	1.2	28.3	31.2	0.0	1.7	62.5
	Accumulated depreciation
	and write-downs Jan. 1	-	10.7	21.2	-	-	31.9
	Accumulated depreciation						0.0
	of decreases and transfers	-	-0.6	-0.7	-	-	-1.3
	Depreciation for the financial year	-	1.5	3.2	-	-	4.8
	Write-downs	-	-	-	-	-	-
	Accumulated depreciation Dec. 31	0.0	11.7	23.7	0.0	0.0	35.4
	Revaluation	0.1	5.6	-	-	-	5.7
	Balance sheet value Dec. 31, 2005	1.3	22.3	7.5	0.0	1.7	32.9
	Balance sheet value Dec. 31, 2004	1.3	23.6	7.9	0.0	2.0	34.8
	The undepreciated acquisition cost of machinery and equipment belonging the tangible fixed assets
	was EUR 21.5 million on 31.12.2005 (EUR 20.9 million 31.12.2004).
	Parent Company
	EUR million
		Subsidiary shares	Other shares and holdings	Other long-term receivables from Group companies		Total
	Investments
	Acquisition cost Jan. 1	20.8	0.0	3.5		24.3
	Increases	0.6	-	15.7		16.3
	Decreases	-	-	-0.9		-0.9
	Transfers between items	-	-	-		-
	Balance sheet value Dec. 31	21.4	0.0	18.3		39.7
	Balance sheet value Dec. 31, 2004	20.8	0.0	3.5		24.3

	8. Deferred assets	2005	2004
	EUR million
	Tax related deferred assets	1.8	1.2
	Other deferred assets	1.8	1.3
		3.7	2.5

	9. Financial assets	2005	2004
	EUR million
	Other investments
	Income fund interest-bearing papers	27.2
	Cash and bank balances
	Cash and balance in the bank accounts	9.7	8.4
	Certificates of deposit	11.2	35.3
		20.9	43.8

Financial assets recognised at fair value through profit and loss include income fund investments which involve the short-term investment of liquid assets.  The maturity of these income fund interest-bearing papers is at most one year. The income fund investments are publicly quoted securities, whose fair value is determined in the market.  The change in fair value has been recognised in the income statement group financial income and expenses. In 2004 there were no income fund investments.

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

	10. Deferred tax assets and liabilities	2005	2004
	EUR million
	Deferred tax assets
	Timing differences	0.0	0.3
		0.0	0.3
	Deferred tax liabilities
	Timing differences	0.0	0.0
		0.0	0.0
	Deferred tax assets/liabilities, net	0.0	0.3

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

	11. Shareholders’ equity	2005	2004
	The parent company's shares are divieded into series, with 3,409.285 series K shares (20 votes/share) and 14,256,165 series A shares ( 1 vote/share). In accordance with the Company Articles, series K shares can be converted into series A shares through a procedure defined in detail in the Company Articles.
	EUR million
	Share capital
	Series A Jan.1	5.9	5.9
	Converted from series K to A	0.0	0.0
	Share issues	0.1	-
	Series A Dec.31	6.0	5.9
	Series K  Jan.1	1.4	1.4
	Converted from series K to A	0.0	0.0
	Share capital Dec. 31	7.4	7.4
	Shares issued 2005	5.4
	Reserve fund Jan.1	7.3	7.3
	Translation difference	3.8	-
	Reserve fund Dec. 31	11.0	7.3
	Profit from previous years Jan. 1	108.9	116.8
	Dividends paid	-13.1	-21.8
	Translation difference	-	-
	Profit from previous years Dec. 31	95.4	94.5
	Profit for the financial year	18.7	14.0
	Total equity	138.0	123.1

	12. Obligatory provisions	2005	2004
	Reserve for social costs		0.0
	Pension reserve	0.5	0.5
	Other reserve		0.1
		0.5	0.6

13. Non-current liabilities

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

	14. Accrued expenses and deferred income	2005	2004
	EUR million
	Wages, salaries and wage-related liabilities	10.6	4.5
	Tax liabilities	-	-
	Other accrued expenses and deferred income	2.7	2.9
		13.3	7.3

	15. Receivables and liabilities from other companies in the Vaisala Group	2005	2004
	EUR million
	Non-current loan receivables	18.3	3.5
	Current loan receivables	2.7	0.9
	Trade receivables	14.2	10.6
	Prepaid expenses and accrued income	0.1	0.0
	Total receivables	35.3	15.0
	Trade payables	0.7	0.6
	Accrued expenses and deferred income	0.0	0.1
	Total liabilities	0.7	0.8

	16. Contingent liabilities and pledges given	2005	2004
	EUR million
	For own loans/commitments
	Guarantees	6.0	6.3
	For Group companies
	Guarantees	2.2	4.2
	Other own liabilities
	Pledges given	0.1	0.0
	Leasing liabilities
	Payable during the financial year	0.1	0.5
	Payable later	0.1	0.5
		0.2	0.9
	Total contingent liabilities and pledges given	8.5	11.5
	Derivative contracts
	Capital of off-balance sheet contracts made to hedge
	against exchange rate and interest risks
	Currency forwards	12.7	8.8
	Total capital	12.7	8.8
	Fair value of off-balance sheet contracts made to
	hedge against exchange rate and interest rate risks
	Currency forwards	-0.1	0.2
	Fair value, total	-0.1	0.2