Report of the Board of Directors

The year in brief

The profit development continued its positive trend, and the Company made a record turnover and result. Key factors were, following the strategic plan, focusing on key operations and increasing the added value.

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 and Nordic Aluminium Inc. in the United States.

Net sales and results

Nordic Aluminium's consolidated net sales in the fiscal year 2006 grew to EUR 96.57 million from EUR 80.77 million in the previous year. The growth in sales was partly due to the high increase in aluminium world market prices but also the operational growth exceeded 10 per cent. In lighting track production, one of the Company's key business areas, the growth was exceptionally good exceeding 30 per cent.

The share of exports and international operations were 39.1 per cent of net sales as compared with 38.2 per cent the year before. The major export markets in 2006 were Western Europe, the Nordic countries, Russia and North America.

Net sales per employee was EUR 0.31 million (EUR 0.26 million).

Consolidated operating profit was EUR 11.07 million. The corresponding figure for the year before was EUR 8.65 million.

Order backlog

Nordic Aluminium's order book at the end of 2006 stood at EUR 7.95 million (EUR 5.44 million).

Research and development

Nordic Aluminium's research and development expenses in 2006 were EUR 0.47 million (EUR 0.60 million), 0.5 per cent of net sales (0.7 per cent).

Investments

Gross investments in 2006 were EUR 2.42 million (EUR 2.79 million).

Profitability

Return on investment (ROI) in Nordic Aluminium in 2006 was 33.7 per cent (32.0 per cent) and return on equity (ROE) was 27.4 per cent (28.4 per cent). Diluted earnings per share were 1.70 euros (1.42 euros). Equity per share was 6.96 euros (5.61 euros).

Balance sheet and financing

The consolidated balance sheet total at the end of the 2006 fiscal year was EUR 45.83 million (EUR 42.23 million). 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 2.22 million (EUR 3.75 million), and gearing -13.5 per cent (-6.0 per cent). Equity ratio was 72.0 per cent (62.3 per cent). Cash flow from operations before interests and taxes was EUR 9.29 million (EUR 10.95 million).

Risk Management

The risk management issues can be viewed at Consolidated Financial Statements in site 29.

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 April 5, 2006 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 2005 EUR 0.65 per share (EUR 0.50) or a total of EUR 3,00 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, 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 2006 was 4,836,882. The registered share capital is 6,191,208.96 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 were traded on the Helsinki Exchanges Main list. The total number of all the warrants 1-4 was 293,200. Each right entitled to the subscription of one Nordic Aluminium Plc share in stages during the period May 1, 1999 - May 30, 2006.

Increase in the share capital

With Nordic Aluminium warrants of 1998 was issued a total of 213,950 shares between February 20, - May 30, 2006.

Due to these capital stock subscriptions the increase in the share capital was a total of EUR 273,856.00, this amount was subscribed to the trade register on May 8, 2006, May 31, 2006 and June 20, 2006. The issued capital of the Company is now a total of EUR 6,191,208.96, and the amount of shares is 4,836,882.

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

Turnover of shares

A total of 760,788 Nordic Aluminium Plc shares were traded on the stock market in 2006. This corresponds to 15.7 per cent (11.9 per cent) of the Company's total capital stock. The year's highest quotation was 21.50 euros (15.50 euros) and the lowest 15.05 euros (9.44 euros). The average quotation was 18.57 euros (12.32 euros). On the last trading day of the year the share traded at an average price of 19.77 euros (15.50 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 2006 Nordic Aluminium Plc's ownership was as follows:

The biggest shareholders Dec 31, 2006

Owner	Number of shares	Share of capital and votes
		%
Oy Lival Ab	3 087 945	63,84
Varma Mutual Pension Employment Insurance Company	250 000	5,17
Aktia Capital Unit Trust	225 000	4,65
Veritas Mutual Pension Insurance Company	169 000	3,49
Evli-Select Mutual Fund	158 800	3,28
Lival-Lindström, Stig	136 624	2,82
Fondita Micro Cap Mutual Trust	45 000	0,93
Rausanne Oy	43 959	0,91
Teknologiateollisuus ry	31 000	0,64
Others	689 554	14,27
Total	4 836 882	100,00

The number of nominee-registered shares at the end of 2006 was 43,101, which equals 0.89 per cent of the company's shares and votes. The total number of shareholders at the end of the year was 806.

Shareholders by sector Dec 31, 2006

	Number of shares	Share %
Companies	3 206 356	66,29
Financial and insurance institutions	514 110	10,63
Associations	443 700	9,17
Non-profit associations	47 651	0,99
Households	623 636	12,89
Owners outside Finland	1 429	0,03
Total	4 836 882	100,00

Shareholders by size of holdings Dec 31, 2006

Number of shares	Number of owners	%	Number of shares	%
1 - 200	391	48,51	44 503	0,92
201 - 2 000	353	43,80	220 289	4,56
2 001 - 20 000	49	6,08	296 526	6,13
20 001 - 200 000	10	1,24	712 619	14,73
200 001 - 2 000 000	2	0,25	475 000	9,82
2 000 001 - 9 999 999	1	0,12	3 087 945	63,84
Total	806	100,00	4 836 882	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 2006 the Nordic Aluminium Group had an average number of 311 employees. The corresponding number the year before was 313. At the end of 2006 the Group had 289 employees as compared with the number of 314 on the previous year.

Prospects

The market demand in the whole aluminium trade is exceptionally good, which is visible in increased order stocks and prolonged delivery times. The demand is expected to continue at a good level the first half of the year. Growth prospects in export are positive for the electrotechnical products.

The key target for the current year is increasing the operative efficiency. Main measures are: the development of efficient and clear material flows, focused investments on operative efficiency and increase of technical know-how on all levels.

The Company aims at a good profit development for the whole year.

The Board's proposal on the allocation of profits

The net profit of the parent company for the year is EUR 8,126,353.23 and its distributable earnings EUR 19,248,934.48.

The Board proposes that a dividend of EUR 0.85 per share, or a total of EUR 4,111,349.70, be declared and that the remaining balance of EUR 15,137,584.78 be retained in profit and loss account.

The Board has evaluated the company's future and finds that the proposal above does not risk the liquidity.

Annual summary

Nordic Aluminium Plc's annual summary of stock exchange bulletins and announcements in 2006 can be viewed at www.nordicaluminium.fi/financial info.

Helsinki, February 27, 2007

Stig Lival-Lindström
Chairman

Robert Paajanen, Eric Westerlund