Vaisala has a risk management policy, which covers strategic, operative and financial risks. The goal of the policy is to ensure the safety of Vaisala personnel, operations and products and continuity of operations. The policy also covers the company's intellectual property, image and brand. Appropriate and accurate risk profile is included in decision-making.

The policy, practices and emphasis are regularly assessed by the Management Group.

Vaisala's Management Group determines more specific guidelines for the Group's operations, e.g. authorizations, offering, procurement rights and terms of payment.
The usual risks related to international business affect Vaisala's operations.

Group financing is arranged through the parent company, and the financing of the subsidiaries is arranged through internal loans. The parent company also provides the subsidiaries with the necessary credit limit guarantees. The parent company assumes responsibility for financial risk management and for investing surplus liquidity.

The effect of interest rate changes to interest bearing borrowings and receivables in different currencies constitutes an interest rate risk. As the Group has few interest bearing borrowings and receivables, the interest rate risk is small. The borrowings are adjustable rate borrowings. The earnings on capital invested contain a small risk when interest rates change. Investment policy principles in the order of priority are: a) minimizing credit loss risks b) liquidity, c) profit on investment. The maximum term of investment is 12 months.

The international nature of its operations exposes Vaisala to transaction risks. The Group carries out sales in numerous foreign currencies, of which the most significant are the US dollar, Japanese yen, and the English pound. The Group has many investments in its subsidiaries abroad, whose net assets are exposed to currency risks. The Group does not hedge conversion differences of investments relating to its subsidies.

The Group's other currency risks are transaction risks resulting from commercial accounts receivable and accounts payable. Approximately half of the Group's net sales are in USD. A significant part of costs are in EUR. The company uses currency forwards for hedging purposes. The hedging level is at approximately 50% of the order book and the accounts receivable. The hedging is done by the parent company.

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

Liquid assets are invested within the confirmed limits to targets whose credit standing is good. The investment targets and their assigned limits are revised annually.
Credit risk

The Group's policy on granting credit is stringent. The Group protects itself against credit risks by using letters of credit, advance payments and bank guarantees.

The Group has no official internal auditing function. Tasks relating to internal auditing are carried out in control measures included in the company's processes, as well as by commissioning Authorized Public Accountants (see recommendation 49).