Report of the Board of Directors

The year in brief

The result development of the Company was positive. Profitability increased, due to improvement of operations and operational control - cost control and management, and rationalisation of production with precisely aimed investments. Overall result was clearly better than the previous year. Raw material cost increases, due to the rapid increase in aluminium price, reduced the result during the last quarter.

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. The Company has started actions to terminate the subsidiary in Estonia.

Net sales and results

Nordic Aluminium´s consolidated net sales in the fiscal year 2005 were EUR 80.77 million as compared with EUR 74.49 million in the year before. The share of exports and international operations were 38.2 per cent of net sales as compared with 38.3 per cent the year before. The major export markets in 2005 were Western Europe, the Nordic countries and North America.

Net sales per employee was EUR 0.26 million (EUR 0.20 million).

Consolidated operating profit was EUR 8.65 million. The corresponding figure for the year before was EUR 6.33 million.

Order backlog

Nordic Aluminium's order book at the end of 2005 stood at EUR 5.44 million (EUR 4.45 million).

Research and development

Nordic Aluminium's research and development expenses in 2005 were EUR 0.60 million (EUR 0.89 million), 0.7 per cent of net sales (1.2 per cent).

Investments

Gross investments in 2005 were EUR 2.70 million (EUR 3.95 million).

On May 17th the Company announced that Nordic Aluminium Plc's subsidiary Nordic Aluminium Inc. (GA, USA) has sold it's operations in Hutchinson (MN, USA) to Nordic Components Inc., a new company established by the operating management.

Profitability

Return on investment (ROI) in Nordic Aluminium in 2005 was 32.0 per cent (23.0 per cent) and return on equity (ROE) was 28.4 per cent (22.7 per cent). Diluted earnings per share were 1.42 euros (1.01 euros). Equity per share was 5.61 euros (4.73 euros).

Balance sheet and financing

The consolidated balance sheet total at the end of the 2005 fiscal year was EUR 42.23 million (EUR 38.06 million). Non-current assets decreased as investments were less than depreciation. Current assets grew due to volume growth and good cash flow. The positive profit development clearly strengthened the balance sheet structure.

Interest bearing liabilities were EUR 3.75 million (EUR 6.22 million), and Gearing -6.0 per cent (17.5 per cent). Equity ratio was 62.3 per cent (57.6 per cent). %). Cash flow from operations before interests and taxes was EUR 11,02 million (EUR 8,92 million).

IFRS

Nordic Aluminium Group reports under the International Financial Reporting Standards (IFRS) as of January 1, 2005.

Risk Management

The risk management issues can be viewed at Consolidated Financial Statements in site 28.

Environmental Issues

Nordic Aluminium Plc is trying continuously to reduce environmental influences. Lloyd´s Register Quality Assurance has approved our Environmental Management System to the following Environmental Management System Standards: ISO 14001:1996. The certificates are valid until December 31st, 2008. The Company does not have any substancial environmental risks.

The Company's Environment policy can be viewed at www.nordicaluminium.fi.

Annual General Meeting

The Annual General Meeting of Nordic Aluminium Plc on March 22, 2005 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 0.50 per share (EUR 0,60) or a total of EUR 2,31 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 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 2005 was 4,622,932. The registered share capital is 5,917,352.96 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 Helsinki Exchanges Main list. The total number of all the warrants 1-4 is 293,000. 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 2005 the subscription price was 8.72 euros.

Increase in the share capital

With Nordic Aluminium warrants of 1998 was issued a total of 6,800 shares between Sept. 12 - Sept. 13, 2005.

Due to the capital stock subscription the increase in the share capital was a total of EUR 8,704.00, this amount was subscribed to the trade register on October 6, 2005. The issued capital of the Company is now a total of EUR 5,917,352.96, and the amount of shares is 4,622,932.

The period for subscription of warrants 1998 will end on May 30, 2006.

Turnover of shares

A total of 548,756 Nordic Aluminium Plc shares were traded on the stock market in 2005. This corresponds to 11.9 per cent (13.3 per cent) of the company's total capital stock. The year's highest quotation was 15.50 euros (11.00 euros) and the lowest 9.44 euros (8.31 euros). The average quotation was 12.32 euros (9.70 euros). On the last trading day of the year the share traded at an average price of 15.50 euros (9.72 euros).

Shares and ownership

There were no major changes in the ownership of Nordic Aluminium Plc during the year. At the end of the fiscal year 2005 Nordic Aluminium Plc`s ownership was as follows:

The biggest shareholders Dec 30, 2005

Owner	Number of shares	Share of capital and votes
		%
Oy Lival Ab	2 873 095	62,15
Varma Mutual Pension Employment Insurance Company	250 000	5,41
Aktia Capital Unit Trust	225 000	4,87
OP-Suomi Kasvu Sijoitusrahasto, Mutual Fund	185 400	4,01
Lival-Lindström, Stig	152 800	3,31
Evli-Select Mutual Fund	113 000	2,44
Veritas Mutual Pension Insurance Company	100 900	2,18
Teknologiateollisuus ry	31 000	0,67
Others	691 737	14,96
Total	4 622 932	100,00

The number of nominee-registered shares at the end of 2005 was 108,049, which equals 2.34 per cent of the company's shares and votes. The total number of shareholders at the end of the year was 711.

Shareholders by sector Dec 30, 2005

	Number of shares	Share %
Companies	2,929,945	63.38
Financial and insurance institutions	726,249	15.71
Associations	375,600	8.12
Non-profit associations	44,020	0.95
Households	545,818	11.81
Owners outside Finland	1 300	0,03
Total	4 616 132	100,00

Shareholders by size of holdings Dec 30, 2005

Number of shares	Number of owners	%	Number of shares	%
1 - 200	334	46,98	38 087	0,82
201 - 2 000	325	45,71	203 601	4,40
2 001 - 20 000	39	5,48	260 100	5,63
20 001 - 200 000	10	1,41	773 049	16,72
200 001 - 2 000 000	2	0,28	475 000	10,28
2 000 001 - 9 999 999	1	0,14	2 873 095	62,15
Total	711	100,00	4 622 932	100,00

Insider issues

Nordic Aluminium Plc adheres to the guidelines for insiders issued by Helsinki Exchanges (OMX Helsinki). Nordic Aluminium Plc's permanent insiders are: Members of the Board of Directors, Managing Director & CEO, Secretary of the Board and the Members of the Management Group as well as named individuals within the Company's financial administration, sales and marketing and production. The appointed insider issues responsible is the Company's CFO. Up-to-date insider data is maintained in the Central Securities Depository at Central Securities Depository's premises.

The Company recommends that the permanent insiders' investments in the Company's are to be long-term investments. According to Helsinki 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 2005 the Nordic Aluminium Group had an average number of 313 employees. The corresponding number the year before was 367. At the end of 2005 the Group had 314 employees as compared with the number of 320 on the previous year.

Prospects

Market demand is expected to develop moderately despite of aluminium price increase. Growth prospects in export are positive due to the development in distribution channels

Main goals for the year are: increasing net sales, improving operations in every sector, cutting variable expenses and fixed costs and training the personnel.

Aluminium price increase slows down the profit development during the first quarter. The Company still aims at a good profit development for the whole year.

The Board's proposal on the allocation of profits

Consolidated profits according to the consolidated balance sheet per Dec 31, 2005, are total EUR 18,300,068.49 and the distributable earnings EUR 16,269,314.79.

The net profit of the parent company for the year is EUR 7,296,640.86, and its distributable earnings EUR 14,139,269.16.

The Board proposes that a dividend of EUR 0.65 per share, or a total of EUR 3,004,905.80, be declared and that the remaining balance of EUR 11,134,363.36 be retained in profit and loss account.

Helsinki, March 14, 2006

Stig Lival-Lindström
Chairman

Robert Paajanen, Eric Westerlund