Report of the Board of Directors

The year in brief

The Company's profit development was negative. The operating profit was weak during the last quarter. The Company made a devaluation in inventories of EUR 1.6 million based on rapid and abrupt price decrease in aluminium world market price.

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 2008 stood at EUR 5.05 million (EUR 7.74 million).

Purchase behaviour in the market has changed. Customers are not able to give reliable estimates and order only for actual needs with short delivery times.

Research and development

Nordic Aluminium's research and development expenses in 2008 were EUR 0.33 million (EUR 0.50 million), 0.3 per cent of net sales (0.5 per cent).

Investments

Gross investments in 2008 were EUR 9.64 million (EUR 12.80 million.)

Profitability

Return on investment (ROI) in Nordic Aluminium in 2008 was 24.1 per cent (53.1 per cent) and return on equity (ROE) was 18.4 per cent (40.6 per cent). Diluted earnings per share were EUR 1.71 (EUR 3.06). Equity per share was EUR 9.56 (EUR 9.02).

Comparable figures to the fiscal year 2007 corrected with the effects of the fire in the anodizing plant are: Return on investment (ROI) 40.1 per cent, return on equity (ROE) 30.5 per cent and diluted earnings per share EUR 2.30.

Balance sheet and financing

The consolidated balance sheet total at the end of the 2008 fiscal year was EUR 56.18 million (EUR 57.72 million). Equity ratio was 82.4 per cent (75.6 per cent). Cash flow from operations before interests and taxes was EUR 19.71 million (EUR 21.72 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.

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 its influence on market demand.

The insurance company of the Kirkkonummi production facility has placed a regression claim for EUR 7.1 million based on the total amount of compensation due to the fire in the anodizing plant in June 2007. Nordic Aluminium's view is that the demand is groundless.

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 14001:2004. The certificates are valid until December 31st, 2011. 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 April 1, 2008 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 2007 EUR 1.15 per share (EUR 0.85) or a total of EUR 5.56 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, 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 EUR 1.28 and the total number of shares at the end of the fiscal year 2008 was EUR 4,836,882. The registered share capital is EUR 6,191,208.96. All shares have the same voting and dividend rights. Nordic Aluminium Plc's shares have been listed on NASDAQ OMX Helsinki Ltd. since 1997.

Turnover of shares

A total of 66,874 Nordic Aluminium Plc shares were traded on the stock market in 2008. This corresponds to 1.4 per cent (7.6 per cent) of the Company's total capital stock. The year's highest quotation was EUR 30.00 (EUR 35.50) and the lowest EUR 12.50 (EUR 19.50). The average quotation was EUR 21.43 (EUR 27.22). On the last trading day of the year the share traded at an average price of EUR 12.71 (EUR 29.40).

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 2008 Nordic Aluminium Plc's ownership was as follows:

The biggest shareholders Dec 31, 2008

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	3,60
Veritas Mutual Pension Insurance Coompany	169 000	3,49
Lival-Lindström, Stig	99 050	2,05
Fondita Micro Cap Mutual Trust	60 000	1,24
Paajanen, Robert	53 250	1,10
Hietala, Pekka	50 318	1,04
Mutual Fund Evli Nordic Dividend	35 111	0,73
Others	633 368	13,09
Total	4 836 882	100,00

The number of nominee-registered shares at the end of 2008 was 36,799, which equals 0.76 per cent of the company's shares and votes. The total number of shareholders at the end of the year was 935.

Shareholders by sector Dec 31, 2008

	Number of shares	Share %
Companies	3 214 139	66,45
Financial and insurance institutions	538 638	11,14
Associations	443 464	9,17
Non-profit associations	39 850	0,82
Households	599 322	12,39
Owners outside Finland	1 469	0,03
Total	4 836 882	100,00

Shareholders by size of holdings Dec 31, 2008

Number of shares	Number of owners	%	Number of shares	%
1 - 200	534	57,11	52 173	1,08
201 - 2 000	341	36,47	205 382	4,25
2 001 - 20 000	46	4,92	250 997	5,19
20 001 - 200 000	11	1,18	765 385	15,82
200 001 - 2 000 000	2	0,21	475 000	9,82
2 000 001 - 9 999 999	1	0,11	3 087 945	63,84
Total	935	100,00	4 836 882	100,00

Insider issues

Nordic Aluminium Plc adheres to the guidelines for insiders issued by NASDAQ OMX Helsinki Ltd. 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 issue responsible is the Company's CFO. Up-to-date insider data is maintained in the Central Securities Depository at Euroclear Finland Ltd's premises.

The Company recommends that the permanent insiders' investments in the Company's are to be long-term investments. According to NASDAQ OMX Helsinki Ltd. 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 2008 the Nordic Aluminium Group had an average number of 315 employees. The corresponding number the year before was 306. At the end of 2008 the Group had 294 employees as compared with the number of 309 on the previous year.

Prospects

The order backlog for the Group was EUR 5.05 million (EUR 7.74 million).

Market prospects are still weak and uncertain due to the turmoil in the global economy. Production volume and turnover are expected to be clearly lower than in year 2008. The Company has adjusted its operations to meet the declined demand. The Company is prepared to make additional adjustments if the market demand and profit development so requires. Despite the adjustments made to the production volume and cuts in fixed costs the profitability will be significantly lower.

The investment program which started in the beginning of 2008 will be finalized during the first half of 2009. The new extrusion line will start production during March 2009.

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 7,695,911.87 and its distributable earnings EUR 29,193,765.02.

The Board proposes that a dividend of EUR 0.40 per share, or a total of EUR 1,934,752.80, be declared and that the remaining balance of EUR 27,259,012.22 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 2008 can be viewed at www.nordicaluminium.fi/financial information.

Helsinki, March 4, 2009

Stig Lival-Lindström
Chairman

Robert Paajanen, Eric Westerlund