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. Focusing on core operations and increasing the added value influenced the positive result.

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 2007 grew to EUR 106.84 million from EUR 96.57 million in the previous year. High demand in aluminium products and good growth in lighting track products, one of the Company's key business areas contributed to the sales growth.

The operative profit developed positively during the fiscal year. In combination with the start of a new ERP system non-recurring costs of EUR 1.2 million were booked in inventories during the last quarter.

The share of exports and international operations were 40.6 per cent of net sales as compared with 39.1 per cent the year before. The major export markets in 2007 were Western Europe, the Nordic countries, Russia and North America.

Net sales per employee was EUR 0.35 million (EUR 0.31 million).

Consolidated operating profit was EUR 20.02 million. The corresponding figure for the year before was EUR 11.07 million.

Order backlog

Nordic Aluminium's order book at the end of 2007 stood at EUR 7.74 million (EUR 7.95 million).

Research and development

Nordic Aluminium's research and development expenses in 2007 were EUR 0.50 million (EUR 0.47 million), 0.5 per cent of net sales (0.5 per cent).

Investments

Gross investments in 2007 were EUR 12.80 million (EUR 2.42 million). Insurance coverage based on the fire in the anodizing plant amounted to EUR 6.4 million of above mentioned investments.

Profitability

Return on investment (ROI) in Nordic Aluminium in 2007 was 53.1 per cent (33.7 per cent) and return on equity (ROE) was 40.6 per cent (27.4 per cent). Diluted earnings per share were 3.06 euros (1.70 euros). Equity per share was 9.02 euros (6.96 euros).

Comparable figures to previous fiscal year (2006) corrected with the effects of the fire in the anodizing plant are: Return on investment (ROI) 40.1 %, return on equity (ROE) 30.5 and diluted earnings per share 2.30.

Balance sheet and financing

The consolidated balance sheet total at the end of the 2007 fiscal year was EUR 57.72 million (EUR 45.83 million). The positive profit development clearly strengthened the balance sheet structure. Interest bearing liabilities were EUR 0.90 million (EUR 2.22 million), and gearing -14.4 per cent (-13.5 per cent). Equity ratio was 75.6 per cent (72.0 per cent). Cash flow from operations before interests and taxes was EUR 21.72 million (EUR 9.29 million).

Risk Management

The objective of Nordic Aluminium Plc's risk management is to secure business continuity in all possible situations. The CEO and the Board of Directors are responsible for risk management.

During the second half of the year the Company has had special focus on fire security and has concentrated on schooling of personnel as well as development of extinguishing equipment.

As part of the risk management the Company's insurance policies are re-evaluated annually. The factories and commercial activities are full value insured.

Main long term risks are related to the possible uncertainty in the development of the world economy and it's influence on market demand.

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 substantial 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 29, 2007 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 2006 EUR 0.85 per share (EUR 0.65) or a total of EUR 4.11 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.

Turnover of shares

A total of 367,188 Nordic Aluminium Plc shares were traded on the stock market in 2007. This corresponds to 7.6 per cent (15.7 per cent) of the Company's total capital stock. The year's highest quotation was 35.50 euros (21.50 euros) and the lowest 19.50 euros (15.05 euros). The average quotation was 27.22 euros (18.57 euros). On the last trading day of the year the share traded at an average price of 29.40 euros (19.77 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 2007 Nordic Aluminium Plc's ownership was as follows:

The biggest shareholders Dec 31, 2007

Owner	Number of shares	Share of capital and votes %
Oy Lival Ab	3 087 945	63,84
Varma Mutual Pension Employment Insurance Co.	250 000	5,17
Aktia Capital Unit Trust	225 000	4,65
Evli-Select Mutual Fund	173 840	3,59
Veritas Mutual Pension Insurance Coompany	169 000	3,49
Lival-Lindström, Stig	118 658	2,45
Fondita Micro Cap Mutual Trust	60 000	1,24
Evli Nordic Dividend	46 706	0,97
Rausanne Oy	34 977	0,72
Paajanen, Robert	33 642	0,70
Others	637 114	13,17
Total	4 836 882	100,00

The number of nominee-registered shares at the end of 2007 was 47,221, 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 844.

Shareholders by sector Dec 31, 2007

	Number of shares	Share %
Companies	3 219 191	66,55
Financial and insurance institutions	548 301	11,34
Associations	443 700	9,17
Non-profit associations	40 001	0,83
Households	584 170	12,08
Owners outside Finland	1 519	0,03
Total	4 836 882	100,00

Shareholders by size of holdings Dec 31, 2007

Number of shares	Number of owners	%	Number of shares	%
1 - 200	458	54,26	47 510	0,98
201 - 2 000	324	38,39	198 279	4,10
2 001 - 20 000	48	5,69	262 612	5,43
20 001 - 200 000	11	1,30	765 536	15,83
200 001 - 2 000 000	2	0,24	475 000	9,82
2 000 001 - 9 999 999	1	0,12	3 087 945	63,84
Total	844	100,00	4 836 882	100,00

Insider issues

Nordic Aluminium Plc adheres to the guidelines for insiders issued by OMX Helsinki Exchanges. 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 OMX 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 2007 the Nordic Aluminium Group had an average number of 306 employees. The corresponding number the year before was 311. At the end of 2007 the Group had 309 employees as compared with the number of 289 on the previous year.

Prospects

The market demand is expected to continue at a good level during the first half of the year. The order backlog for the Group was EUR 7.74 million (7.95). Growth expectations for exports are good.

Key targets for the current year are improving the service level and increasing the operative efficiency. The new modern anodizing plant which will be ramped up during the first quarter will improve efficiency and increase capacity. It will also remove disturbances to delivery cycle and logistics which were caused by the outsourcing of the equivalent production due to the fire.

The Company has started a considerable investment program of approximately EUR 10 million during 2008. The program includes increase of automation levels in packaging and logistics as well as investments in renewal of an extrusion line. The extrusion line is expected to increase efficiency and capacity from beginning of 2009.

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

The above mentioned predictions are based on the Company's management's best view of the Company's condition and market outlook.

The Board's proposal on the allocation of profits

The net profit of the parent company for the year is EUR 11,922,682.67 and its distributable earnings EUR 27,060,267.45.

The Board proposes that a dividend of EUR 1.15 per share, or a total of EUR 5,562,414.30, be declared and that the remaining balance of EUR 21,497,853.15 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, 2008

Stig Lival-Lindström
Chairman

Robert Paajanen, Eric Westerlund