Notes to the financial statements

1.1 Accounting principles for the consolidated financial statements

2.	Business segments
	2007	Vaisala Measurement Systems	Vaisala Instruments	Vaisala Solutions	Other operations	Eliminations	Group
	EUR million

	Net sales to external customers	82.5	70.3	71.3	0.0	0.0	224.1
	Intragroup sales	0.0	10.4	0.4	0.0	-10.9	0.0
	Net sales	82.5	80.8	71.7	0.0	-10.9	224.1

	Operating profit	12.7	19.9	5.3	-2.6	0.0	35.3

	Financial income and expenses						1.6
	Share of associated companies' net profit						0.0
	Net profit before taxes						37.0
	Income taxes						-11.2
	Net profit for the financial year						25.8

	Assets	40.8	19.8	23.8	140.6	0.0	225.1
	Holdings in associated companies	0.5	0.0	0.0	0.0	0.0	0.5
	Liabilities	6.1	3.9	10.6	28.6	0.0	49.2
	Investments	1.5	2.0	0.5	3.3	0.0	7.3

	Depreciation	2.6	1.8	0.5	3.3	0.0	8.2



	2006	Vaisala Measurement Systems	Vaisala Instruments	Vaisala Solutions	Other operations	Eliminations	Group
	EUR million

	Net sales to external customers	93.2	64.3	63.3	0.0	0.0	220.8
	Intragroup sales	0.0	11.1	0.4	0.0	-11.5	0.0
	Net sales	93.2	75.3	63.7	0.0	-11.5	220.8

	Operating profit	19.8	19.5	5.4	-6.1	0.0	38.6

	Financial income and expenses						-0.4
	Share of associated companies' net profit						0.0
	Net profit before taxes						38.2
	Income taxes						-11.6
	Net profit for the financial year						26.6

	Assets	51.8	19.5	22.1	125.5	0.0	218.8
	Holdings in associated companies	0.4	0.0	0.0	0.0	0.0	0.4
	Liabilities	7.6	3.7	8.8	29.4	0.0	49.4
	Investments	15.1	1.5	1.6	2.3	0.0	20.4

	Depreciation	4.8	1.9	0.7	3.4	0.0	10.8
	Restructuring expenses	0.0	0.0	0.0	0.0	0.0	0.0

3.	Geographical segments
	2007
	EUR million	Net sales, by destination country (1	Net sales, by location country (2	Assets (2	Investments
	Europe	80.7	183.2	186.2	5.4
	of which Finland	9.2	160.7	171.9	5.2
	North America	73.2	81.8	48.8	1.7
	Asia and Australia	60.2	20.7	9.1	0.2
	Africa, South and Central America	10.0			0.0
	Group eliminations		-61.6	-23.3
	Unallocated items			4.7

	Total	224.1	224.1	225.6	7.3

1) Sales to external customers have been presented as net sales by destination country
2) Net sales, assets and investments have been presented by the Group's and associated companies' countries of location .

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

	Total	220.8	220.8	219.2	20.4

1) Sales to external customers have been presented as net sales by destination country
2) Net sales, assets and investments have been presented by the Group's and associated companies' countries of location.

4.	Company acquisitions
	There were no acquisitions during the year 2007

	Company acquisitions in 2006
	In January 2006 Vaisala acquired all the shares of the US company Sigmet Corp. The company�s net sales in 2005 were EUR 8.8 million. Sigmet is the world�s leading manufacturer of weather radar systems, signal processors and application software. The company has 10 employees and it is located in Westford, Massachusetts. Vaisala announced in November 2005 its decision to enter the weather radar business. The Sigmet acquisition supports this decision by supplementing Vaisala�s range of products and services. Sigmet processors and application software products will continue to be sold to all weather radar manufacturers and end customers. The products will also be part of Vaisala�s own weather radar system, which is expected to come onto the market in 2007. These synergy benefits as well as acquiring control of the Sigmet brand contributed to the generation of goodwill amounting to EUR 3.7 million. The acquisition price was EUR 16.5 million. Auditing and legal fees of EUR 0.2 million relating to the acquisition, as well as taxes of EUR 0.6 million, have also been included in the purchase price. Sigmet�s net sales in January-December 2006 of EUR 10.0 million and operating profit of EUR 2.9 million have been included in the Vaisala Group.

	Purchase consideration
	EUR million

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

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

	Purchase consideration settled in cash	15.7
	Expenses related to the purchase	0.8
	Cash and cash equivalents in subsidiary acquired	-0.8
	Cash outflow on acquisition	15.7


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

6.	Other operating income
	EUR million		2007		2006
	Gains on the disposal of fixed assets		0.0		0.1
			0.0		0.1

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

	Goodwill not depreciated as of 1 January 2004. Procurement and production depreciation in 2006 includes depreciation of EUR 1.8 million on the order book of company acquisition Sigmet.


8.	Expenses arising from employee benefits		2007		2006
	EUR million
	Salaries		57.2		57.3
	Social costs		6.8		6.5
	Pensions
	Defined-benefit pension schemes		0.1		-0.2
	Defined-contribution pension schemes		5.4		6.0
	Personnel expenses, total		69.5		69.6


	Group personnel, average during the financial year		2007		2006
	By business unit
	Vaisala Instruments		281		345
	Vaisala Measurement Systems		351		335
	Vaisala Solutions		248		277
	Other operations		234		112
			1,113		1,069
	In Finland		677		656
	Outside Finland		436		414
			1,113		1,069

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

10.	Financial income and expenses			2007		2006
	EUR million
	Dividend income			0.0		0.0
	Other interest and financial income			2.0		1.2
	Change in fair value of assets recognised at fair value through profit an loss*			1.5		1.1
	Interest expenses
	Short- and long-term liabilities			-0.3		-0.1
	Finance lease agreements			0.0		0.0
	Other financial expenses			-0.1		-0.1

	Realised and unrealised gains arising from changes in fair value of derivative contracts and hedging activities			1.5		1.2

	Realised and unrealised losses arising from changes in fair value of derivative contracts and hedging activities			-0.4		-0.2
	Foreign exchange gains			2.5		1.3
	Foreign exchange losses			-5.1		-4.9
				1.6		-0.5
	*Change in fair value of income fund investments.

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

	Reconciliation statement between income statement tax item and taxes calculated at the
	tax rate of the Group country of domicile
	EUR million
	Profit before taxes			37.0		38.2

	Taxes calculated at Finnish tax rate			9.6		9.9
	Effect of foreign subsidiaries' tax rates			1.2		1.3
	Non-deductible expenses and tax-free revenue			-0.8		0.0
	Use of previously unrecognised tax losses			0.0		-0.1
	Effect of the group eliminations			0.9		0.2
	Others			0.3		0.3
	Tax in income statement			11.2		11.6

	Effective tax rate			30.2%		30.3%

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

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

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

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

	Changes in deferred taxes during 2007
	EUR million	31.12. 2006	Recognised in income statement	Translation differences	Purchased subsidiaries	31.12. 2007
	Deferred tax assets:
	Internal margin of inventories and fixed assets	0.2	0.3	0.0	0.0	0.5
	Employee benefits	0.1	0.0	0.0	0.0	0.1
	Unused tax losses	0.8	0.0	0.0	0.0	0.8
	Timing difference of depreciation on intangible items	3.1	-0.3	-0.3	0.0	2.5
	Other temporary differences	1.1	-0.1	-0.1	0.0	0.9
	Total	5.2	-0.1	-0.4	0.0	4.7

	Deferred tax liabilities
	Timing difference between accounting and taxation	0.4	0.0	0.0	0.0	0.4

	Deferred tax asset, net	4.9	-0.1	-0.4	0.0	4.3


	Changes in deferred taxes during 2006
	EUR million	31.12. 2005	Recognised in income statement	Translation differences	Purchased subsidiaries	31.12. 2006
	Deferred tax assets:
	Internal margin of inventories and fixed assets	0.2	0.0	0.0	0.0	0.2
	Employee benefits	0.1	-0.1	0.0	0.0	0.1
	Unused tax losses	1.0	-0.2	0.0	0.0	0.8
	Timing difference of depreciation on intangible items	3.1	0.3	-0.3	0.0	3.1
	Other temporary differences	0.8	0.4	-0.1	0.0	1.1
	Total	5.3	0.4	-0.4	0.0	5.2

	Deferred tax liabilities
	Timing difference between accounting and taxation	0.5	-0.1	0.0	0.0	0.4

	Deferred tax asset, net	4.7	0.5	-0.4	0.0	4.8

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

12.	Earnings per share
	The undiluted earnings per share figure is calculated by dividing the profit for the financial year belonging to
	the parent company's shareholders by the weighted average number of shares outstanding during the financial year.
					2007		2006
	Profit for financial year belonging to parent company shareholders, EUR million				25.8		26,596
	Weighted average number of shares outstanding, 1000 pcs				18,209		18,168
	Earnings per share, EUR				1.42		1.46

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

	Profit for financial year belonging to parent company shareholders, EUR million				25.8		26.6

	Weighted average number of shares outstanding, 1000 pcs				18,209		18,168
	Effect of share options 2000, 1000 pcs				0		7
	Diluted weighted average number of shares, 1000 pcs				18,209		18,174

	Diluted earnings per share, EUR				1.42		1.46

13.	Dividend per share

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

14.	Intangible assets
	EUR million				Other
		Intangible			intangible
	Intangible assets	rights	Goodwill	Trademark	assets	Total
	Acquisition cost 1 Jan	20.6	10.0	3.2	2.3	36.1
	Translation difference	-1.0	-2.3	-0.3	-0.1	-3.8
	Increases	0.5	-	-	-	0.5
	Acquisition of subsidiary	0.0	-	-	-	0.0
	Decreases	-0.3	-	-	-	-0.3
	Transfers between items	0.6	-	-	-	0.6
	Acquisition cost 31 Dec	20.4	7.7	2.9	2.2	33.1


	Accumulated depreciation and impairment 1 Jan	13.7	-	-	1.4	15.1
	Translation difference	-0.5	-1.3	-	-0.1	-1.8
	Accumulated depreciation
	of decreases and transfers	-0.3	-	-	-	-0.3
	Depreciation in financial year	2.0	-	-	0.3	2.4
	Accumulated depreciation 31 Dec	14.9	-1.3	0.0	1.7	15.3

	Carrying amount 31 Dec 2007	5.5	8.9	2.9	0.5	17.8
	Carrying amount 31 Dec 2006	6.9	10.0	3.2	0.9	21.0

	Goodwill has not been depreciation as of 1 January 2004.

	Goodwill and trademark impairment testing

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

15.	Tangible assets					Advance
	EUR million				Other	payments and
		Land and	Buildings and	Machinery	tangible	construction
	Tangible assets	waters	structures	and equipment	assets	in progress	Total
	Acquisition cost 1 Jan	2.7	31.5	47.3	2.5	3.2	87.2
	Translation difference	-0.2	-0.3	-1.1	-0.2	0.0	-1.8
	Increases	-	0.0	2.8	0.4	3.7	7.0
	Decreases	-	0.0	-1.9	0.0	-	-1.9
	Transfers between items	-	0.0	1.8	0.0	-2.5	-0.6
	Acquisition cost 31 Dec	2.6	31.2	49.0	2.7	4.4	89.8


	Accumulated depreciation and impairment 1 Jan	-	13.7	38.5	1.6	-	53.8
	Translation difference	-	-0.1	-0.9	0.0	-	-1.0
	Accumulated depreciation
	of decreases and transfers	-	0.0	-1.9	0.0	-	-1.9
	Depreciation in financial year	-	1.7	3.9	0.3	-	5.8

	Accumulated depreciation 31 Dec	0.0	15.3	39.5	1.9	0.0	56.7

	Carrying amount 31 Dec 2007	2.6	15.9	9.5	0.8	4.4	33.1
	Carrying amount 31 Dec 2006	2.7	17.8	8.9	0.9	3.2	33.5

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

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

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

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

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

	The carrying amount of associated companies does not include goodwill.

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

	Associated companies 2006, EUR million	Domicile	Assets	Liabilities	Net sales	Profit/loss	Holding
	Meteorage SA, France	Cedex	1.5	1.0	1.6	0.1	35 %
	The information presented in the table are based on the latest available financial statements.

	Associated companies 2005, EUR million
	Meteorage SA, France	Cedex	1.4	0.5	1.6	0.1	35 %

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

17.	Other financial assets

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

18.	Receivables (long-term)	2007		2006
	EUR million	Balance sheet values	Fair values	Balance sheet values	Fair values
	Loan receivables	0.0	0.0	0.0	0.0
	Other receivables *	0.1	0.1	0.2	0.2
		0.1	0.1	0.2	0.2

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

19.	Inventories				2007		2006
	EUR million
	Materials and supplies				7.8		9.4
	Work in progress				4.4		2.8
	Finished goods				3.8		5.3
					16.1		17.6
	In the financial year expense of EUR 1.37million was recorded, equivalent to the amount by which the carrying amount of inventories was reduced to correspond with their net realisable value (EUR 1.3 million in 2006).

20.	Trade receivables and other receivables				2007		2006
	EUR million
	Trade receivables				39.4		43.1
	Loan receivables				0.0		0.0
	Advanced paid				0.9		0.8
	Other receivables				2.3		3.3
	Receivables from long-term project customers				6.6		3.3
	Value-added tax receivables				2.9		1.6
	Other prepaid expenses and accrued income				1.2		1.7
					53.4		53.9
	The fair values of trade and other receivables essentially correspond to their carrying amounts. Other receivables principally include allocations of maintenance and data sales contracts. Other prepaid expenses and accrued income include interest and exchange rate allocations as well as miscellaneous allocations.

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

	The carrying amounts of group's trade and other			2007			2006
	receivables are denominated in the following curencies:
	EUR million
	EUR			17.2			17.3
	USD			16.1			19.9
	GBP			3.4			2.6
	JPY			1.7			2.0
	AUD			0.4			0.5
	CNY			0.0			0.1
	Other			0.6			0.7
				39.4			43.1

21.	Financial assets recognised at fair value through profit and loss				2007		2006
	EUR million
	Income fund investments				42.6		41.2
	Derivative contracts				0.4		0.2

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

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

	The values of cash and cash equivalents is equivalent to their carrying amounts. Certificates of deposit consist of short-term, highly liquid investments whose maturity is less than 3 months and which are mainly involved in the short-term investment of liquid assets. The average interest rate on teh investments in 2007 was 4.1% (2.9% in 2006). In the cash flow statements, income fund investments of EUR 42.6 million (EUR 41.2 milion in 2006) are also treated as cash and cash equivalents.

23.	Notes relating to shareholders' equity

	Vaisala applies the insider rules of the Helsinki Stock Exchange.

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

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

	Optio scheme

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

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


	Share-based incentive schemes
	2007 scheme

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

	2006 scheme

	In 2006 Vaisala�s Board of Directors instituted a new share-based incentive scheme for around 50 key individuals of the company. Some of these individuals belong to related parties of the Group. The incentive scheme is of two years� duration and it ends in February 2008. The performance period of incentive scheme is the financial year that began on 1 January 2006 and ended on 31 December 2006. The imputed number of shares to which individuals are entitled is based on the achievement of set financial targets, which are measured by earnings per share (EPS). A bonus corresponding to the imputed number of shares will be paid in cash and the share price used is the average price on the trading day that follows the publication of the 2007 final statements. Individuals must invest the proportion of the cash sum they receive that remains after taxes in Vaisala shares. Key individuals undertake to acquire the shares themselves at the market price. In addition, the shares have a restriction on sale of one year. The maximum cost of the incentive scheme corresponds to the value of 130,000 shares. A EUR 2.9 million liability has been recognised for the scheme in the consolidated balance sheet on 31 December 2006.
	The incentive scheme is an arrangement that complies with IFRS 2. The fair value of the shares given as bonuses has been determined using the share price on the closing date. As the scheme involves the giving of shares for no consideration, no option pricing model has been used.


	Authorisation of the Board of Directors

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

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


24.	Interest-bearing liabilities
	EUR million			Balance sheet value
	Long-term			2007	2006
	Loans			0.0	0.1
	Finance lease liabilities			0.2	0.2
				0.2	0.3

	Short-term
	Loan repayments in next year			0.1	0.3
	Other short-term liabilities			0.4
	Finance lease liability repayments
	in next year			0.3	0.3
				0.8	0.6
	Interest-bearing liabilities, total			0.9	0.9

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

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

	Present value of minimum payments of finance lease liabilities
	Up to 1 year			0.3	0.3
	1 - 5 years			0.2	0.2
	More than 5 years			-	-
	Total			0.5	0.5

25.	Pension obligations

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

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

	The balance-sheet defined-benefit pension liability is determined as follows:
	EUR million	2007	2006
	Present value of unfunded obligations
	Fair value of funded obligations	1.8	1.9
	Fair value of assets	-1.5	-1.7
	Deficit/surplus	0.4	0.2
	Unrecognised net actuarial gains (+)/ losses (-)	-0.1	0.2
	Unrecognised costs based on past service	-	-
	Net liability present in balance sheet	0.3	0.3

	Pension expenses in personnel expenses
	EUR million	2007	2006
	Service costs for the financial year	0.1	0.1
	Interest costs	0.1	0.3
	Expected yield from assets belonging to the scheme	-0.1	-0.3
	Actuarial gains and losses	-	-
	Costs based on past service	-	-
	Gains/losses from reduction of scheme	0.0	-0.3
		0.1	-0.2

	Actual yield from assets belonging to the scheme	5.5%	6.7%

	Overall expected return as calculated by the insurance company. Information on asset categories is not available. Expected contributions payable for the group during the year 2007 is EUR 0.1 million (EUR 0.1 million in 2006).

	Changes in the present Value of the Obligation	2007	2006
	EUR million
	Present value of obligation 1 Jan	1.9	6.6
	Current sevice cost	0.1	0.1
	Interest cost	0.1	0.3
	Settlement and curtailments	-0.3	-4.6
	Actuarial gain (-) loss(+) on obligation	0.1	-0.5
	Present value of obligation on 31 Dec	1.8	1.9

	Changes in the Fair Value of Plan Assets
	EUR million	2007	2006
	Fair value of plan assets 1 Jan	1.7	6.1
	Expected return on plan assets	0.1	0.3
	Actuarial gain (+) loss(-) on plan assets	-0.1	-0.2
	Contributions	0.1	0.1
	Settlements	-0.3	-4.6
	Fair value of plan assets 31 Dec	1.5	1.7


	Changes of liabilities presented in balance sheet
	EUR million	2007	2006
	At beginning of financial year	0.3	0.6
	Paid contributions	-0.1
	Pension expenses in income statement	0.1	-0.2
	At end of financial year	0.3	0.3

	Actuarial assumptions used:
	Discount rate	5.00%	4.50%
	Expected yield from assets belonging to the scheme	5.00%	5.00%
	Future pension increases	3.25%	3.25%


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

	The increase in provisions in 2007 relates to the restructuring of the company's organisation. A 2006 restructuring provision relates to the centralisation of the company�s lightning detection business into one location and to the closure of the Aix-en-Provence office, situated in France. At the end of 2006, four thousand euros of the provision remained. An increase in provisions, 24 thousand euros, results from a restructuring of production at the sonde plant in Vantaa.

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

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

28.	Contingent liabilities and pledges given
	EUR million			2007		2006
	For own loans/commitments
	Guarantees			8.0		9.7
	Other own liabilities
	Pledges given			0.1		0.1
	Other leases			0.2		0.2

	Contingent liabilities and pledges given, total			8.3		9.9
	The pledges given are lease guarantee deposits.


	Derivative contracts			2007		2006
	EUR million
	Capital value of off-balance sheet contracts made to
	hedge against exchange rate and interest rate risks
	Currency forwards			14.3		11.9
	Capital value, total			14.3		11.9

			2007		2006
	Derivative contracts are denominated in the following currencies:		Currency million	EUR million	Currency million	EUR million
	USD		16.5	11.6	12.5	9.6
	AUD		1.5	0.9	1.6	1.0
	JPY		115.0	0.7	115.0	0.8
	GBP		0.8	1.1	0.4	0.6
				14.3		11.9

	Maturity
	Less than 90 days			9.6		10.8
	over 90 days and less than 120 days			3.0		1.1
	Over 120 days and less than 230 days			1.7
				14.3		11.9


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

29.	Related party transactions

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

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

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

	Employee benefits of management (EUR million)
	Salary and bonuses paid to President and CEO			2007		2006
	Kjell Forsen, President and CEO
	Salary			0.26		0.07
	Bonuses			0.02
	Pekka Ketonen, President and CEO 1 Jan to 30 Sept 2006
	Salary					0.31
	Bonuses			0.28		0.38

	Remuneration paid to Members of the Board of Directors
	Gustavsson Stig	Member of the Board		0.02		0.01
	Hautoj�rvi Pekka	Member of the Board				0.00
	Neuvo Yrj�	Member of the Board		0.02		0.02
	Niinivaara Mikko	Member of the Board		0.02		0.02
	Torkko Maija	Member of the Board		0.02
	Voipio Mikko	Member of the Board		0.02		0.02
	Voipio Raimo	Chairman of the Board		0.03		0.03
	Wendt Gerhard	Member of the Board				0.00
	Total			0.70		0.87
	Salaries and bonuses paid to managing directors of Group subsidiaries totalled EUR 0.3 million (2006 EUR 0.3 million). Age of retirement for the President and CEO is 63 years, according to Finnish law. The President and CEO has a compensation based retirement plan.

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

30.	Collected information
	Information published during Vaisala previous financial year can be found on the Vaisala website:

	www.vaisala.com/investors