Report of the Board of Directors

The year in brief

The new organisation and the new operational model have improved profitability during the year. One-time costs related to deduction of personnel, are somewhat burdening the Company's result of the last quarter. During the last six months of the year the production had outages and reduced efficiency related to large automation installations on the extrusion lines.

In Manufacturing Services the net sales of profile production exceeded the last year's level and profitability improved. Despite the fact that component manufacturing was centralised to the Nivala factory, the volume of component production did not reach expected level, and the operation was still unprofitable.

Net sales and profitability of Products sales exceeded the level of previous year.

Corporate structure

Nordic Aluminium Plc's parent company is Oy Lival Ab. The Nordic Aluminium Group is made up of the parent company Nordic Aluminium Plc, operating at Kirkkonummi and Nivala, and its subsidiaries Nordic Aluprofiler AB in Sweden, Nordic Aluminium, Inc. in the United States, and Nordic Aluminium OÜ in Estonia.

Net sales and results

Nordic Aluminium´s consolidated net sales in the fiscal year 2004 were EUR 74.49 million as compared with EUR 73.05 million in the year before. The share of exports and international operations were 38.3 per cent of net sales as compared with 38.2 per cent the year before. The major export markets in 2004 were Western Europe, the Nordic countries and North America.

Net sales per employee was EUR 0.20 million (2003: EUR 0.18 million).

Consolidated operating profit was EUR 5.73 million. The corresponding figure for the year before was EUR 3.90 million.

Order backlog

Nordic Aluminium's order book at the end of 2004 stood at EUR 4.45 million (2003: EUR 4.29 million).

Research and development

Nordic Aluminium's research and development expenses in 2004 were EUR 0.92 million (2003: EUR 1.37 million), 1.2 per cent of net sales (1.9 per cent).

Investments

Gross investments in 2004 were EUR 3.83 million (2003:EUR 1.33 million), and they were mainly focused to automation related to production alteration works.

Profitability

Return on investment (ROI) in Nordic Aluminium in 2004 was 21.0 per cent (2003: 13.5 per cent) and return on equity (ROE) was 20.1 per cent (2003: 13.2 per cent). Earnings per share were 0.89 euros (0.56 euros). Equity per share was 4.63 euros (4.39 euros).

Balance sheet and financing

The balance sheet total at the end of the 2004 fiscal year was EUR 37.18 million (2003: EUR 40.11 million). The decrease of the balance sheet was mainly caused by the lower level of investments compared to depreciation and the decrease of interest bearing debt. Cash flow from operations was to EUR 6.12 million (2003: EUR 9.91 million). When purchasing it's main raw materials the company has decided prefer discounts instead of long payment time. The higher investment level has been another main factor in the Company's cash flow.

At the end of 2004 the equity to assets ratio of the Nordic Aluminium Group was 57.7 % (2003: 50.5 %), interest-bearing debts were EUR 5.83 million (EUR 6.82 million) and gearing 16.0 % (13.9 %).

Transition to IFRS Accounting Standards

During the fiscal year 2004 the Company has trained it's personnel regarding IFRS Accounting Standards, and has also made a IFRS manual. The Company publishes the first IFRS financial statements for the 2005 financial year.

The Company will publish a separate release regarding the transition to IFRS Accounting Standards. The release will include accounting principles according to the IFRS Accounting Standards and reconciliation between IFRS and FAS. Transition of the accounting standards will mainly effect to the following Nordic Aluminium's balance sheet items: tangible assets commodities and short-term liabilities.

Annual General Meeting

The Annual General Meeting of Nordic Aluminium Plc on March 31, 2004 adopted the financial statements and discharged the members of the Board and the Managing Director from liability. The Meeting also decided to approve the proposal of the Board for a dividend of EUR 0.60 per share or a total of EUR 2,77 million.

The Annual General Meeting elected Stig Lival-Lindström, Robert Paajanen and Eric Westerlund regular members of the Board of Directors. The board elected Stig Lival-Lindström Chairman on the same date.

The Annual General Meeting elected Authorised Public Accountants Tomi Englund, Authorised Public Accountant and Lars Winberg, Authorised Public Accountant, auditors, with Ernst & Young Oy, principle auditor Jan Rönnberg, Authorised Public Accountant, deputy auditor.

Authorisations

The Board has no current authorisations for the increase of the company's share capital, the procurement of own shares or issuing of convertible bonds and/or option loans.

Share capital

The nominal value of Nordic Aluminium Plc´s share is 1.28 euros and the total number of shares at the end of the fiscal year 2004 was 4,616,132. The registered share capital is 5,908,648.96 euros. All shares have the same voting and dividend rights. Nordic Aluminium Plc`s shares have been listed on the Helsinki Exchanges since 1997.

All the warrants 1-4 of the Bond Loan with warrants 1998 of Nordic Aluminium Plc are traded on the OMX Exchanges Main list. The total number of all the warrants 1-4 is 300,000. Each right entitles to the subscription of one Nordic Aluminium Plc share in stages during the period May 1, 1999 - May 30, 2006. At the end of 2004 the subscription price was 8.72 euros. No shares have been subscribed based on these rights.

Turnover of shares

A total of 617,300 Nordic Aluminium Plc shares were traded on the stock market in 2004. This corresponds to 13.3 per cent (2003: 45.3 per cent) of the company's total capital stock. The year's highest quotation was 11.00 euros (8.84 euros) and the lowest 8.31 euros (5.80 euros). The average quotation was 9.70 euros (8.19 euros). On the last trading day of the year the share traded at an average price of 9.72 euros (8.54 euros).

Shares and ownership

On October 19th By Nordic Aluminium announced that the company had received information that Ilmarinen Mutual Pension Insurance Company withdrew from the ownership of Nordic Aluminium Plc and consequently it's portions of the voting rights and the share capital is now 0.0 per cent.

There were no other major changes in the ownership of Nordic Aluminium Plc during the year. At the end of the fiscal year 2004 Nordic Aluminium Plc`s ownership was as follows:

The biggest shareholders Dec 30, 2004

Owner	Number of shares	Share of capital and votes
		%
Oy Lival Ab	2 873 095	62,2
Varma Mutual Pension Employment Insurance Company	250 000	5,4
Aktia CApital Unit Trust	225 000	4,9
Lival-Lindström, Stig	165 300	3,6
OP-Suomi Kasvu Sijoitusrahasto, Mutual Fund	136 000	3
HSS/Skandinaviska Enskilda Banken AB (publ.)	85 400	1,9
Emil Aaltonen Foundation	55 000	1,2
Gyllenberg Small Firm Unit Trust	54 000	1,2
Veritas Mutual Pension Insurance Company	53 200	1,2
Evli-Select Mutual Fund	50 000	1,1
Others	669 137	14,5
Total	4 616 132	100

The number of nominee-registered shares at the end of 2004 was 103,400, which equals 2.24 per cent of the company's shares and votes. The total number of shareholders at the end of the year was 724.

Shareholders by sector Dec 30, 2004

	Number of shares	Share %
Companies	3 011 455	65,2
Financial and insurance institutions	657 600	14,3
Associations	262 700	5,7
Non-profit associations	116 520	2,5
Households	566 557	12,3
Owners outside Finland	1 300	0,03
Total	4 616 132	100

Shareholders by size of holdings Dec 30, 2004

Number of shares	Number of owners	%	Number of shares	%
1 - 200	332	45,9	38 251	0,8
201 - 2 000	334	46,1	210 786	4,6
2 001 - 20 000	45	6,2	329 100	7,1
20 001 - 200 000	10	1,4	689 900	15,0
200 001 - 2 000 000	2	0,3	475 000	10,3
2 000 001 - 9 999 999	1	0,1	2 873 095	62,2
Total	724	100	4 616 132	100

Insider issues

Nordic Aluminium Plc adheres to the guidelines for insiders issued by OMX Exchanges. The Company recommends that the permanent insiders' investments in the Company's are to be long-term investments. According to OMX Exchanges' guidelines for insiders and the Company's own Insider Guidelines trading in the Company's securities should be done at the times when the market has as exact information as possible of the issues and matters influencing the value of the security.

Personnel

In 2004 the Nordic Aluminium Group had an average number of 367 employees. The corresponding number the year before was 407. At the end of 2004 the Group had 320 employees as compared with the number of 387 on the previous year.

Prospects

The domestic markets are expected to continue slow. Due to the activated marketing, prospects have improved in exports. The Company is expecting moderate growth from the year 2005.

During the year 2005 the Company will focus on improvement of operations and operational control - cost control and management, and rationalisation of production with precisely aimed investments.

The Company will continue focusing marketing activities in component production in order to further expand the customer base.

The Board's proposal on the allocation of profits

Consolidated profits according to the consolidated balance sheet per Dec 31, 2004, are total EUR 13,493,465.66 and the distributable earnings EUR 10,899,595.34.

The net profit of the parent company for the year is EUR 4,049,392.21, and its distributable earnings EUR 9,150,694.30.

The Board proposes that a dividend of EUR 0.50 per share, or a total of EUR 2,308,066.00, be declared and that the remaining balance of EUR 6,842,628.30 be retained in profit and loss account.

Helsinki, February 10, 2005

Stig Lival-Lindström
Chairman

Robert Paajanen, Eric Westerlund