10-K

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

Form 10-K

[4]       Annual Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended
31 December 2003

OR

[  ]  Transition Report pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Commission file number 1-3677

Alcan Inc.

Incorporated in:	I.R.S. Employer Identification No.:
Canada	Not applicable
1188 Sherbrooke Street West,
Montreal, Quebec, Canada H3A 3G2	Telephone: (514) 848-8000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Name of each exchange on which registered
Common Shares without nominal or par value	New York Stock Exchange
Common Share Purchase Rights	New York Stock Exchange
4 7/8% Notes due 2012	New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark whether the Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days: Yes 4No __.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. [ 4 ]

Indicate by check mark whether the Registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2): Yes 4 No __.

The aggregate market value of the voting stock
held by non-affiliates:	USD10,067million, as of 30 June 2003
Common Stock of Registrant outstanding:	367,809,292 Common Shares,
	as of 3 March 2004
Documents incorporated by reference:	Portions of the Annual Report to Shareholders for
	the fiscal year ended 31 December 2003
	Portions of the Proxy Circular for the Annual
	Meeting to be held on 22 April 2004

INDEX TO ALCAN INC.

2003 ANNUAL REPORT ON FORM 10-K

Primary Aluminum

Aluminum Conversion

Packaging

International Trade

PART I

In this report, unless the context otherwise requires, the following definitions apply:

"Alcan", "Company", "Registrant" or the "Issuer" means Alcan Inc. and, where applicable, one or more Subsidiaries,

"Algroup" means Alusuisse Group Ltd. (now Alcan Holdings Switzerland Ltd.), a Subsidiary of Alcan following the Algroup Combination,

"Algroup Combination" means the process by which Algroup became a Subsidiary of Alcan on 17 October 2000, through the completion of a share exchange offer by Alcan for the shares of Algroup,

"Annual Report" means Alcan's Annual Report to Shareholders for the year ended 31 December 2003,

"Business Group" refers to each of Alcan's six business groups, Bauxite and Alumina, Primary Metal, Rolled Products Americas and Asia, Rolled Products Europe, Engineered Products and Packaging,

"Board" or "Board of Directors" means the board of directors of Alcan,

"Director" means a director of Alcan,

"Dollars" or "$" means U.S. Dollars, unless otherwise specified,

"Executive Officers" means the President and Chief Executive Officer, the Executive Vice Presidents, the Senior Vice Presidents, the Vice Presidents, the Treasurer, the Controller and the Corporate Secretary of Alcan,

"Joint Venture" means an association (incorporated or unincorporated) of companies jointly undertaking some commercial enterprise and proportionately consolidated to the extent of Alcan's participation, but in which Alcan does not hold or exercise a controlling interest,

"LME" means the London Metal Exchange,

"Proxy Circular" means the management proxy circular prepared in connection with Alcan's Annual Meeting of Shareholders to be held on 22 April 2004, and any adjournment thereof,

"Pechiney" means Pechiney, a French société anonyme, a Subsidiary of the Company following the Pechiney Combination,

"Pechiney Combination" means the process by which Pechiney became a Subsidiary of Alcan on 15 December 2003, through the completion of a cash and Shares offer by Alcan for the securities of Pechiney,

"Related Company" means a company in which Alcan owns, directly or indirectly, 50% or less of the voting stock and in which Alcan has significant influence over management, but does not include a company in a Joint Venture,

"Share" or "Common Share" means a common share in the capital of Alcan,

"Subsidiary" means a company controlled, directly or indirectly, by Alcan,

"tonne" means a metric tonne of 1,000 kilograms or 2,204.6 pounds, and

"UBC" means a used beverage can.

Unless otherwise expressly indicated, the financial and other information given in this report is presented on a consolidated basis.

Certain information called for by Items of this Form is incorporated by reference to the Annual Report and to the Proxy Circular. Such information is specifically identified herein, including by the reference "See Annual Report..." or "See Proxy Circular...". With the exception of such information specifically incorporated by reference, the Annual Report and the Proxy Circular are not to be deemed filed as part of this Form 10-K Report. Information incorporated by reference is considered to be part of this report, and information filed later with the Securities and Exchange Commission ("SEC") will automatically update and supercede this information.

Special Note Regarding Forward-Looking Statements

Certain statements made or incorporated by reference in this report are forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Terms such as ''believes'', ''expects'', ''may'', ''will'', ''could'', ''should'', ''anticipates'', ''estimates'', "intends" and ''plans'' and the negatives of and variations on terms such as these signify forward-looking statements. Because these forward-looking statements include risks and uncertainties, readers are cautioned that actual results may differ materially from the results expressed in or implied by the statements.

The following factors, among others, could cause actual results or outcomes to differ from the results expressed or implied by forward-looking statements:

• changes in global supply and demand conditions for aluminum and other products;

• changes in aluminum ingot prices;

• changes in raw materials costs and availability;

• changes in the relative values of various currencies;

• cyclical demand and pricing within the principal markets for Alcan's products;

• changes in government regulations, particularly those affecting environmental, health or safety compliance;

• fluctuations in the supply of and prices for power in the areas in which Alcan maintains production facilities;

• the effect of integrating acquired businesses and the ability to attain expected benefits from acquisitions;

• potential discovery of unanticipated commitments or other liabilities associated with the acquisition and integration of Pechiney;

• major changes in technology that affect Alcan's competitiveness;

• the risk of significant losses from trading operations, including losses due to market and credit risks associated with derivatives;

• changes in prevailing interest rates and equity market returns related to pension plan investments, which may result in our being required to make larger than expected pension plan contributions;

• potential catastrophic damage, increased insurance and security costs and general uncertainties associated with the increased threat of terrorism or war;

• the effect of international trade disputes on Alcan's ability to import materials, export its products and compete internationally;

• relationships with and financial and operating conditions of customers and suppliers;

• economic, regulatory and political factors within the countries in which Alcan operates or sells products; and

• factors affecting Alcan's operations, such as litigation, labour relations and negotiations and fiscal regimes.

Additional information concerning factors that could cause actual results to differ materially from those in forward-looking statements include, but are not necessarily limited to, those discussed under the heading "Risks and Uncertainties" in the Management's Discussion and Analysis section of Alcan's Annual Report, on page 47 thereof. The text under such heading is incorporated herein by reference.

Alcan undertakes no obligation to release publicly the results of any future revisions it may make to forward-looking statements to reflect events or circumstances after the date of this report or to reflect the occurrence of unanticipated events.

Alcan files annual, quarterly and special reports and other information with the SEC. Any document so filed can be viewed at the SEC's public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms. Alcan's SEC filings are also available to the public over the Internet at the SEC's web site at http://www.sec.gov or through Alcan's website at http://www.alcan.com. Alcan's website also includes the Charters of its Board of Directors and of its four Committees of the Board of Directors: the Corporate Governance, the Audit, the Human Resources and the Environment, Health & Safety Committees, as well as its Worldwide Code of Employee and Business Conduct, available in nine languages.

ITEMS 1 AND 2 BUSINESS AND PROPERTIES

Alcan is the parent company of an international group involved in many aspects of the aluminum and packaging industries. Through Subsidiaries, Joint Ventures and Related Companies around the world, the activities of Alcan include bauxite mining, alumina refining, production of specialty chemicals, aluminum smelting, manufacturing and recycling, flexible and specialty packaging, as well as related research and development.

On 15 December 2003, through the Pechiney Combination, Alcan acquired a majority of the shares of Pechiney, a French aluminum and packaging company, which then became a Subsidiary. Alcan subsequently became owner of all outstanding Pechiney common shares, Pechiney Bonus Allocation Rights, Pechiney OCEANEs and Pechiney American Depositary Shares as a result of a re-opened offer that was completed on 15 January 2004 and a subsequent withdrawal offer and compulsory acquisition, made in accordance with French securities regulations, completed on 6 February 2004. The integration of Pechiney is being actively implemented. After accounting for the Pechiney Combination, Alcan employs 88,000 people in 63 countries.

A. OVERVIEW OF OPERATING SEGMENTS

The Company operates through six Business Groups, each responsible for different business units of which they are comprised. In 2004, Pechiney's business operations will be integrated into these Business Groups, but for the purposes of this report its operating sectors are presented separately, as is certain other information pertaining to Pechiney.

The Operating Segments of the Company are:

1.1	Bauxite and Alumina, headquartered in Montreal, Canada, this group comprises Alcan's worldwide activities related to bauxite mining, alumina refining and the production of specialty aluminas, owning and/or operating seven bauxite mines and deposits in five countries, five smelter-grade alumina plants in three countries and three specialty alumina plants in two countries;
1.2	Primary Metal, also headquartered in Montreal, this group comprises smelting operations, power generation and production of primary value-added ingot in the form of sheet ingot, extrusion billet, rod and foundry ingot, as well as engineering services and trading operations for alumina and aluminum, operating or having interests in 16 smelters in seven countries. Alcan has committed to establish the operational headquarters of its European primary aluminum business in France;
1.3	Rolled Products Americas and Asia, headquartered in Cleveland, U.S., this group produces aluminum sheet and light gauge products, operating 15plants in fivecountries;
1.4	Rolled Products Europe, headquartered in Zurich, Switzerland, this group produces aluminum sheet, including automotive, can and lithographic sheet, plate and foil stock production, operating 11 plants in four countries;
1.5	Engineered Products, headquartered in Neuhausen, Switzerland, this group produces fabricated aluminum products, including wire and cable, components for the mass transportation, automotive, building, display, electromechanical and other industrial markets, and includes sales and service centres throughout Europe, operating 66plants in 20 countries. Alcan has committed to establish the global operational headquarters of its engineered products group in France; and
1.6	Packaging, also headquartered in Zurich, this group consists of Alcan's worldwide food flexible, foil, tobacco, pharmaceutical and personal care packaging businesses, operating 84plants in 18countries. Alcan has committed to establish, the global operational headquarters of its packaging business in Paris.

1.7	Pechiney's Operating Sectors and International Trade Division:
1.7.1	Primary Aluminum, headquartered in Paris, France, this group comprises Pechiney's worldwide activities related to bauxite mining, alumina refining, smelting operations and the production of silicon and ferroalloys, operating two bauxite mines and deposits in two countries, six alumina plants (three alumina refineries and three specialty alumina plants) in four countries and eight smelters in six countries.
1.7.2	Aluminum Conversion, headquartered in Paris, this group consists of Pechiney's aluminum semi-finished products, hard and soft alloy, flat rolled products and extrusions, operating 25 plants in six countries and one research centre.
1.7.3	Packaging, headquartered in Paris, this group consists of Pechiney's plastics packaging, Cebal Tubes (Europe-Asia, Americas), Cebal Aerosols, Techpack International and caps and overcaps, operating 91 plants in 18 countries.
1.7.4	International Trade, headquartered in Paris, this division consists of Pechiney's sales network, trading activities and distribution network, through 50 entities operating in 60 countries.

Alcan's corporate head office, located in Montreal, focuses on strategy development, while overseeing governance, policy, legal, compliance, human resources and finance matters.

See Annual Report, page 97, Note 30 to the Consolidated Financial Statements for selected information by operating segment.

The balance sheet of Pechiney is included in Alcan's Consolidated Financial Statements as at 31 December 2003. However, the results of operations and operating cash flows of Pechiney will be included in the Company's Consolidated Financial Statements beginning 1 January 2004.

B. HISTORY / RECENT DEVELOPMENTS

Alcan is a limited liability Canadian company, incorporated on 3 June 1902, with its headquarters and registered office in Montreal, Canada. It was formed as a subsidiary of the Pittsburgh Reduction Company, one of the founding companies of the aluminum industry, to establish a smelter and hydroelectric power facility in Shawinigan, Quebec. In 1928, the international operations and domestic U.S. operations were separated into two competing companies that became Alcan and Alcoa Inc., respectively. During the Second World War substantial expansion of hydroelectric and smelting capacity took place in Quebec to supply aluminum for the war effort. In the 1950s, Alcan added hydroelectric and smelting capacity in British Columbia. During the post-war period, Alcan expanded internationally and invested in fabricating activities to stimulate demand for its primary metal production.

In October 2000, Alcan consummated the Algroup Combination, which valued Algroup at approximately $5.7 billion. The Algroup Combination substantially expanded Alcan's presence in Europe. In addition, the Algroup Combination, together with Alcan's strategic focus and industry trends, increased the importance of packaging to Alcan's overall business mix. The Pechiney Combination has continued Alcan's international expansion and has further increased the importance of packaging.

Today, Alcan is a multinational company engaged in all aspects of the aluminum and packaging industries on an international scale.

1. Alcan's Recent Developments

Since the beginning of 2003, Alcan reported the major events related to its business and corporate governance described below. Events related to the Pechiney Combination are described under the heading "The Acquisition of Pechiney" below.

On 29 January 2003, Alcan announced the construction of a new potlining center adjacent to the new Alma smelter, for a total investment of CAN$60 million.

On 17 March 2003, Alcan announced that Messrs. L. Denis Desautels and Milton K. Wong would be candidates for election to the Board of Directors at the annual meeting to be held in Montreal on 24 April 2003. Mr. Desautels is executive-in-residence at the School of Management of the University of Ottawa Centre on Governance and was Auditor General of Canada from 1991 to 2001. Mr. Wong is chairman of HSBC Asset Management (Canada) Limited and Chancellor of Simon Fraser University in British Columbia.

On 23 April 2003, the Company announced that it reduced total greenhouse gas ("GHG") emissions in 2001 and 2002 by an average of 1.45 million tonnes, surpassing its original goal by over one million tonnes per year, including both direct and indirect emissions. These reductions stem from Alcan's long-term emissions reduction program called TARGET, launched in 2001. Numerous GHG reduction programs such as improvements in process technology and the management of operational processes as well as energy efficiency improvements have been implemented across the Company.

On 28 April 2003, the Company announced a public offering in the U.S. of $500 million 4 1/2 % global notes, due 15 May 2013, which closed 1 May 2003. Net proceeds to the Company from the sale of the notes were used to help fund the acquisition of VAW Flexible Packaging ("FlexPac") and to refinance maturing long-term debt.

On 30 April 2003, Alcan announced that it had completed the acquisition of FlexPac from Norsk Hydro for approximately $361 million. FlexPac includes 14 high-quality flexible packaging plants in eight countries and 5,400 employees.

On 10 June 2003, Travis Engen, President and Chief Executive Officer of the Company, committed that the Company will work to ensure that all its operations, including its head office in Montreal, achieve ISO 14001, an environmental management standard, and OHSAS 18001, a health and safety management standard, certification by the end of 2004. Compliance with the two standards constitutes two components of Alcan's integrated Environment, Health and Safety management system (EHS FIRST).

On 1 July 2003, the Company announced that it had completed the acquisition of Baltek Corporation, the world's leading supplier of balsa-based structural core materials, for $35 million. This followed the approval by the Baltek shareholders. Prior to its acquisition, Baltek was a NASDAQ-listed company, headquartered in New Jersey, with operations in the United States, Ecuador and Western Europe. The company became part of the Alcan Composites business unit of the Engineered Products Business Group.

On 16 September 2003, the Company announced a CAN$25 million investment for the construction of a new manufacturing facility for the production of aluminum structural assemblies for the automotive industry in the Saguenay region of Quebec. The facility is expected to produce aluminum bumpers and side-impact beams, instrument panel supports and other weight saving structural sub-systems and will form part of the Engineered Products Business Group.

On 26 September 2003, the Company announced the appointment of Mrs. Christine Morin-Postel as Director of the Company and the departure of Mr. Clarence Chandran from the Board of Directors. Mrs. Morin-Postel serves on the Boards of Arlington Capital Europe, 3i Group plc and Pilkington plc. Until her recent retirement, she was executive vice president in charge of human resources at Suez Group and formerly CEO of Société Générale de Belgique. Mr. Chandran, a Director since 2001, elected to leave as a result of his appointment as an officer of CGI Group Inc., a significant outsourcing service provider to Alcan.

On 6 October 2003, Alcan announced that it had acquired the Uniwood/Fome-Cor Division of Nevamar for $95 million. Uniwood/Fome-Cor produces high performance foamboard materials used in the display and graphic arts market. The acquired company became part of the Alcan Composites business unit within the Engineered Products Business Group.

On 8 October 2003, the Company announced that it had increased its ownership position in the Aluminium Company of Malaysia ("ALCOM") from 36% to 59%. ALCOM is a manufacturer of light gauge aluminum products. Alcan acquired the additional shares from Nippon Light Metal in exchange for its ownership in Alcan Nikkei Siam Limited in Rangsit, Thailand. ALCOM employs 360 people at its Bukit Raja operation located near Kuala Lumpur.

On 15 October 2003, Alcan announced that it had selected the LSL Joint Venture to do a definitive feasibility study preliminary to the engineering, procurement and construction management project for the proposed expansion of Alcan's alumina refinery at Gove, in the Northern Territory of Australia. This potential expansion would increase Alcan's capacity for smelter-grade alumina production from 2 million tonnes per annum ("Mtpa") to approximately 3.5 Mtpa. Alcan expects to complete this and other studies by mid-2004 and, depending on the outcome of the studies, to potentially commission the expansion by 2007.

On 17 October 2003, the Company announced that it had developed a sustainable solution for the treatment of spent potlining and would invest up to CAN$150 million in the construction of a treatment plant in the Saguenay region. The technology which will be used at the plant was developed by Alcan's R&D team in Quebec. The construction of the 80,000 tonne-per-year treatment facility using Alcan's low caustic leaching & liming process is expected to begin in the second quarter of 2004.

On 23 October 2003, Alcan signed a definitive joint venture agreement with Qingtongxia Aluminum Company and the Ningxia Electric Power Development and Investment Co. Ltd. Under the agreement, Alcan will invest up to $150 million, for a 50% participation and a secure power supply in an existing 150,000 tonnes modern pre-bake smelter located in the Ningxia autonomous region, in the People's Republic of China. The agreement also gives Alcan a substantial operating role and the option to acquire, through additional investment, up to 80% of a new 250,000-tonne potline already under construction. The investment is expected to take place in the first quarter of 2004.

On 30 December 2003, Alcan acquired the remaining 65% stake in the Aluminium Dunkerque smelter, located in Dunkerque, France, from the smelter's financial partners through its subsidiary, Pechiney, which already owned a 35% share of the smelter. The acquisition of the smelter was made for €248 million. The transaction also resulted in the assumption by Alcan of an additional $128 million in debt.

On 22 January 2004, the Company announced that it will permanently halt production at its 60-year-old Jonquière Söderberg primary aluminum facility, in the Saguenay region of Quebec, by the second quarter of 2004. Compared to the other Alcan smelters in Quebec, the Jonquière Söderberg plant had the highest production costs, faced the greatest environmental challenges and was one the of the least energy efficient. The Company plans to close the four Söderberg potlines between February and April 2004. The closure will directly impact approximately 550 jobs in total, but Alcan will work closely with employee representatives to minimize layoffs and the impact on employees.

On 17 February 2004, the Company announced the appointment of Mr. Yves Mansion and Mr. Jean-Paul Jacamon as Directors of the Company. Mr. Mansion is chief executive officer of Société Foncière Lyonnaise and a member of the French Collège de l'Autorité des marchés financiers. He was group managing director of Assurances Générales de France from 1990 to 2001. Mr. Mansion is a member of the supervisory board of Euler Hermes and deputy director of l'Entreprise de Recherche et d'activités pétrolières.Mr. Jacamon is non-executive chairman of Bonna Sabla and of Gardiner Group. He was chief operating officer and director of Schneider Electric from 1996 to 2002. He is a director of Le Carbone Lorraine, STACI and AMEC plc. He is also chairman of Eureka (a European governmental organization responsible for research and development projects). Mr. Mansion and Mr. Jacamon both served on the board of directors of Pechiney, since 1994 and 2002 respectively.

2.	The Acquisition of Pechiney
2.1	Pechiney Background

Pechiney was a publicly traded company with shares listed on the Euronext Paris Stock Exchange until 6 February 2004 and Pechiney American Depositary Shares ("ADSs") listed on the New York Stock Exchange until 20 January 2004.

Pechiney operates in three core businesses: the production of primary aluminum, the production of fabricated aluminum products and the production of packaging materials. Pechiney's other businesses also include Ferroalloys and International Trade.

In 2003, Pechiney achieved sales and operating revenues of €10,812 million and employed 34,000 employees.

 

2.2 Alcan's offer for Pechiney

 

Alcan's offer to acquire all of the outstanding Pechiney common shares, Pechiney Bonus Allocation Rights, Pechiney OCEANEs (convertible debentures) and Pechiney ADS (collectively "Pechiney securities") was made through two separate offers:

- a French offer open to all holders of Pechiney securities (other than Pechiney ADSs), located in France and outside of France (but not in Canada and the United States) if, pursuant to the local laws and regulations applicable to such holders, they were permitted to participate in the French offer, and

- a U.S. offer open to all holders of Pechiney securities who were located in the U.S. and Canada and to all holders of Pechiney ADSs, wherever located.

2.2.1 Timeline

Beginning in May 2003, members of Alcan's management, assisted by advisors, conducted a review of the feasibility of a transaction combining Alcan and Pechiney. Alcan's management presented the results of its analysis and views concerning the potential for an Alcan-Pechiney business combination, including summaries of confidential discussions with the European Commission's Merger Task Force, to Alcan's Board of Directors at meetings held on 3 June 2003 and 26 June 2003.

On 2 July 2003, Alcan's Board of Directors held a meeting to discuss further the potential Pechiney Combination and received additional input from Alcan's management and advisors. After further review and discussion, the Directors present unanimously agreed and directed that the Company should pursue the Pechiney Combination.

On 4 July 2003, Mr. Engen met with Mr. Rodier and presented to him the business case for the Pechiney Combination. Mr. Rodier advised that he was not then in a position to formally respond.

On 5 July 2003, Mr. Engen met again with Mr. Rodier in Paris. Mr. Engen and Mr. Rodier together discussed the timeline for a potential Alcan offer. Mr. Rodier indicated that discussions among Pechiney's directors had begun and that three key criteria in assessing the merits of any offer would be price, the views of Pechiney's key managers with respect to potential acquirers of Pechiney and competition and antitrust issues.

On 7 July 2003, Alcan announced plans to launch a tender offer for Pechiney and filed its offer documents with the French Conseil des marchés financiers ("CMF"), the French Commission des opérations de bourse ("COB") and the SEC. The offer valued each Pechiney common share at €41. The offer consisted of 60% in cash and 40% in new Alcan Common Shares. The main characteristics of the offer included:

- Principal mixed offer : €123 in cash and three Alcan Shares for five Pechiney common shares;

- Subsidiary cash offer : €41 per each Pechiney common share;

- Subsidiary share offer : three Alcan Shares for every two Pechiney common shares;

- These two subsidiary offers would need to respect the final portion of 60% in cash and 40% in Alcan shares; and

- Offer for OCEANEs : €81.70 in cash for each OCEANE.

The offer was subject to the following conditions:

- competition approvals from the European Commission and the U.S. Department of Justice ("DOJ"); and

- receiving valid acceptances in respect of more than 50% of the total share capital and voting rights in Pechiney, calculated on a fully diluted basis.

On 8 July 2003, Pechiney's board of directors rejected the Alcan offer.

On 16 July 2003, the CMF declared Alcan's offer acceptable.

On 14 August 2003, Alcan filed the notification of its offer for Pechiney with the European Commission, and on 18 August 2003, it offered commitments for divestiture in relation to the European markets for certain aluminum flat rolled products, aluminum aerosol cans and aluminum cartridges. As a result of this notification and these commitments, the European Commission's initial competition review period, or "Phase I'' review, ended on 29 September 2003.

On 20 August 2003, Mr. Engen met with Mr. Rodier and discussed issues relating to the European competition approval process and factors relevant to the price Alcan was willing to pay. They agreed that their investment bankers should meet.

Discussions took place in August 2003 between Alcan's investment bankers and Pechiney's investment bankers to discuss potential modifications of the financial terms of the offer. Pechiney's investment bankers met with Alcan's investment bankers on 28 August 2003 and communicated to them that Pechiney believed the proposed offer was insufficient.

On 29 August 2003, Alcan filed its Hart-Scott-Rodino notification form in the U.S., triggering a 30-day waiting period under the U.S. antitrust laws, which ended on 29 September 2003.

On 31 August 2003, at Pechiney's request, Alcan submitted a written proposal. This proposal was contingent on the Pechiney board of directors' acceptance at a meeting scheduled for that day. The financial terms of the proposal stated that an additional Euro of consideration would be payable if 95% of Pechiney's securities were tendered. The proposal also addressed certain social and employment issues. However, Alcan was later informed that the Pechiney board of directors had rejected its proposal.

Alcan announced on 1 September 2003 that, because its proposal had not been accepted by the Pechiney board of directors, the proposal had lapsed and discussions with Pechiney had ended and Alcan would proceed with its offer.

On 4 September 2003, Mr. Rodier contacted Mr. Engen's office seeking to reopen discussions.

On 5 September 2003, Alcan announced that the French Ministry of Economy, Finance and Industry cleared Alcan's offer to acquire Pechiney securities. Alcan committed that the combined Company's worldwide headquarters would be in Montreal but, reflecting Alcan's significantly increased industrial presence in France, Alcan would locate the world headquarters of the combined entity's packaging business in Paris, while the European headquarters for primary aluminum operations, the world headquarters for engineering and aerospace operations and the global headquarters for new cell technology development would be located in France.

On 11 September 2003, Mr. Rodier met with Mr. Engen to discuss potential changes to the terms of Alcan's offer that could be proposed to Pechiney's board of directors. On 12 September 2003, Mr. Engen and Mr. Rodier exchanged a letter attaching the terms of revised offer. That same day, Alcan announced that the board of directors of Pechiney recommended the revised offer of Alcan as detailed below:

Per Pechiney Common Share/10 Bonus Allocation Rights:

- Cash: €24.60 per Pechiney common share, subject to increase as described below, and

- Alcan Shares: €22.90 in Alcan Shares per Pechiney common share, each Alcan Share would be valued at the greater of (x) €27.40 or (y) the volume-weighed average of the Alcan stock price on the New York Stock Exchange for ten trading days chosen at random from 30 trading days ending five days prior to the close of the offer (with each day's price expressed in Euros based upon €/$ exchange rate on the same ten trading days).

Per Pechiney OCEANEs:

- €83.40 per Pechiney OCEANE, subject to increase as described below.

Increase in Offer Price:

- If the offer was successful and more than 95% of Pechiney's share capital and voting rights on a fully diluted basis were tendered in the offer (including any re-opened offer), Alcan would provide all Pechiney security holders that have tendered their securities with:

- an additional €1 in cash for each Pechiney common share tendered;

- an additional €0.10 in cash for each Pechiney Bonus Allocation Rights tendered;

- an additional €0.40 in cash for each OCEANE and

- an additional €0.50 in cash for each Pechiney ADS tendered.

On 15 September 2003, Alcan filed documents relating to its revised offer for Pechiney with the CMF and the COB, and on 16 September 2003, Alcan filed the revised offer documents with the SEC.

On 22 September 2003, the CMF declared Alcan's revised offer for Pechiney to be acceptable (recevable), and this decision was released on 29 September 2003.

On 29 September 2003, Alcan announced the European Commission had granted clearance of Alcan's revised offer for the acquisition of Pechiney, subject to agreed conditions and commitments. To meet the Commission's regulatory concerns in relation to aluminum flat-rolled products, Alcan undertook to divest either its 50% share in the AluNorf rolling mill and its Göttingen and Nachterstedt rolling mills or Pechiney's rolling mills at Neuf-Brisach, Rugles and, if necessary, the Annecy rolling mill. Alcan's Latchford recycling/casting operations could also be added to either the AluNorf or Neuf-Brisach packages. In addition, Alcan agreed to undertakings for the licensing of alumina refining technology, aluminum smelter cell technology and anode baking furnace designs. Alcan would also eliminate the overlap arising from Alcan's and Pechiney's activities in aluminum aerosol cans and aluminum cartridges.

Also on 29 September 2003, Alcan announced that it had reached an agreement with the DOJ, which cleared its revised offer to acquire Pechiney. Under this agreement and a related consent decree, Alcan undertook to divest Pechiney's aluminum rolling mill located in Ravenswood, West Virginia, following its acquisition of Pechiney. The consent decree was filed in U.S. District Court on the same day and, as a result, the statutory waiting period under the U.S. Hart-Scott Rodino Act expired that night. The agreement with the DOJ removed the final condition related to Alcan's revised offer for Pechiney.

On 7 October 2003, Alcan announced that following the clearance by the COB of the documentation for its offer in France for Pechiney and the publication in France of such documentation, the CMF had published the notification of the opening of the offer. Accordingly, the French offer was open for acceptance beginning on this date.

On 10 October 2003, Pechiney filed a draft of its Response Document (note en réponse) with the COB and on 13 October 2003 issued a press release detailing the formal recommendation (avis motivée), of its board of directors following its meeting on 8 October 2003.

On 27 October 2003, Alcan announced that the registration statement filed with the SEC in connection with its offer for Pechiney had been declared effective. Accordingly, the U.S. offer was open for acceptance beginning on that date.

On 17 November 2003, Alcan announced the specific consideration to be paid in its offer for Pechiney following the determination of the average value of Alcan Common Shares and Alcan's decision to substitute additional cash consideration. In exchange for each Pechiney common share, each 10 Pechiney Bonus Allocation Rights or each two Pechiney ADSs that would be tendered into Alcan's exchange offer for Pechiney, tendering holders of Pechiney securities would receive:

- €28.60 in cash (subject to increase); and

- 0.5441 Alcan Common Shares.

In respect of each Pechiney OCEANE tendered, Alcan would pay €83.40 in cash (subject to increase).

On 24 November 2003, the acceptance period for Alcan's French and U.S. offersforPechiney closed at 5:00 p.m. New York time.

On 2 December 2003, Alcan announced that the provisional results of its offer for Pechiney as disclosed by the French Authorité des marchés financiers ("AMF") indicated that Alcan has secured 92.21% of Pechiney's total share capital (fully diluted) as of the expiry of the offer period.

On 3 December 2003, Alcan announced the new executive team and management structure of the enlarged Company following completion of the Pechiney Combination. Alcan's structure remained unchanged, with six Business Groups continuing their responsibilities in each of their respective core markets and products. (see Item 10: "Identification of Executive Officers").

On 5 December 2003, Alcan announced the successful conclusion of its offer for Pechiney securities. As of the expiration of its offers in France and the U.S. on 24 November 2003, Alcan had secured 92.21% of Pechiney's share capital and 93.55% of Pechiney voting rights, on a fully diluted basis.

In order to enable Pechiney shareholders who did not tender their securities to benefit from the offer, Alcan announced on 5 December 2003 its decision to re-open the offer from 9 to 23 December 2003. The terms and conditions of the re-opened offer were the same as those for the initial offer.

On 15 December 2003, Alcan announced that Alcan Common Shares were listed on the Premier Marché of the Euronext Paris stock exchange.

On 15 December 2003, Alcan acquired all Pechiney securities tendered into the initial offer, which was open from 7 October to 24 November 2003.

On 16 December 2003, Alcan announced that the composition of Pechiney's board of directors was modified following Alcan's acquisition of control of Pechiney on 15 December 2003. The new Pechiney board was constituted of 12 members:

- Six new members were appointed that day: Messrs. L. Yves Fortier (Chairman of Alcan's Board of Directors), Travis Engen (President and Chief Executive Officer, Alcan), Geoffery Merszei (Executive Vice President and Chief Financial Officer, Alcan), Daniel Gagnier (Senior Vice President, Corporate and External Affairs, Alcan), David McAusland (Senior Vice President, Mergers and Acquisitions and Chief Legal Officer, Alcan), and Madame Christine Morin-Postel (Director, Alcan).

- Six existing Pechiney directors remained on the Board: Messrs. Jean-Paul Jacamon, Yves Mansion, H. Onno Ruding, as well as three members previously appointed by the employees: Messrs. Gérard Bouvier, Antoine Nordberg and Tony Zanello.

- In addition, Mr. Engen was appointed chairman and chief executive officer of Pechiney.

On 8 January 2004, Alcan announced that it had secured 97.95% of Pechiney's total share capital and 97.92% of Pechiney voting rights as of the expiry of the re-opened offer (23 December 2003). Thus, because the number of Pechiney securities tendered into the initial offer and the re-opened offer corresponds to over 95% of Pechiney share capital and voting rights, on a fully diluted basis, Alcan would pay the following additional consideration to the holders of Pechiney securities who tendered their securities:

- €1 for each Pechiney common share tendered;

- €0.10 for each Pechiney Bonus Allocation Right tendered;

- €0.40 for each Pechiney OCEANE tendered; and

- €0.50 for each Pechiney ADS tendered.

Accordingly, the aggregate final consideration payable by Alcan under its offer for Pechiney would be:

- for each Pechiney common share, two Pechiney ADSs or ten Pechiney Bonus Allocation Rights: 0.5441 Alcan Common Shares and €29.60; and

- for each Pechiney OCEANE: €83.80.

On 15 January 2004, Alcan acquired all Pechiney securities tendered into the re-opened offer. As consideration for the securities tendered into the re-opened offer, Alcan issued 2,082,075 Alcan Common Shares and paid €126 million. On 19 January 2004, Alcan also paid €81 million as additional consideration to holders of Pechiney securities who tendered their securities during the initial offer.

2.2.2 Withdrawal Offer and Compulsory Acquisition

On 23 January 2004, Alcan announced that its withdrawal offer (offre publique de retrait) opened that day as a required step for it to acquire all remaining Pechiney securities in accordance with French securities regulations. The withdrawal offer was opened for ten French trading days until 5 February 2004 and was followed on 6 February 2004 by a compulsory acquisition (retrait obligatoire) by which Alcan became the owner of the remaining Pechiney securities.

The consideration paid by Alcan in the withdrawal offer and compulsory acquisition was in cash only and was the equivalent of the consideration paid in the offer:

- €48.50 in cash for each Pechiney common share (including, for purposes of the compulsory acquisition, Pechiney common shares underlying outstanding ADSs);

- €4.85 in cash for each Pechiney Bonus Allocation Right; and

- €82.86 in cash for each Pechiney OCEANE.

The Pechiney ADSs were de-listed from the New York Stock Exchange on 20 January 2004 and following the completion of the compulsory acquisition process, Pechiney common shares were de-listed from the Euronext Paris stock exchange on 6 February 2004. On 9 February 2004, Pechiney filed a notice of termination of registration with the SEC and ceased its status as a reporting issuer under the Securities Exchange Act of 1934.

2.2.3 Financing for the Transaction

In connection with Pechiney Combination, Alcan issued 44,495,180 Shares and paid aggregate cash consideration of $3.6 billion (net of cash and time deposits acquired).

The cash portion of the consideration for the Pechiney Combination was financed through short-term financing, including a commercial paper issuance, through registered and private notes issuances, as well as through application of cash on hand.

On 8 December 2003, Alcan issued and sold (1) $500 million of 5.20% Notes due 15 January 2014 and (2) $750 million of 6.125% Notes due 15 December 2033.

On 8 December 2003, Alcan Aluminum Corporation ("Alcancorp"), a Subsidiary, sold (1) $500 million aggregate amount of its Floating Rate Notes ("FRN") due 8 December 2004 and (2) $500 million aggregate principal amount of its FRN due 8 December 2005 through private placements. The FRN are fully and unconditionally guaranteed by Alcan. Alcancorp lent the combined net proceeds to Alcan. Alcancorp has the right to redeem the FRN due 8 December 2005 at any time on or after 8 June 2004. The FRN rank equally with Alcancorp's senior unsecured debt and are guaranteed by Alcan.

2.2.4 Alcan to Review Pechiney Businesses and Projects

On 19 January 2004, Alcan announced that, pursuant to its on-going review of Pechiney assets, an impairment charge of €45 million will be recorded for the costs incurred for the Coega smelter project in South Africa up to 30 September 2003. Project costs incurred subsequent to September 30th will be charged to income. This impairment will not affect Alcan's reported earnings and it will be recorded as a charge in Pechiney's 2003 statutory financial statements.

Alcan will continue to review Pechiney's current investments and business plans on the basis of assumptions currently used by Alcan. No decision has been made on any of Pechiney's current investments. The Company will announce in due course any decision taken in relation to this review.

C.	ALCAN BUSINESS GROUPS
1.	Bauxite and Alumina
1.1	Products / Business Units
1.1.1	Bauxite: Aluminum is one of the most abundant metals in the earth's crust but is never found in its pure form. Bauxite is the basic aluminum-bearing ore. The bauxite mines send their output to supply the alumina plants.
1.1.2	Smelter-Grade Alumina: Alumina (aluminum oxide) is produced from bauxite by a chemical process. Depending upon quality, between four and five tonnes of bauxite are required to produce approximately two tonnes of alumina.
1.1.3	Specialty Alumina: Alcan specialty aluminas include alumina based products for a wide array of applications including solid surfacing, refractories, ceramics, catalysts, absorbants, and water treatment.
1.2	Sales and Operating Revenues

In 2003, the Bauxite and Alumina Business Group had intersegment sales and operating revenues of $873 million and third-party sales and third-party revenues of $536 million, the latter making up 4% of Alcan's 2003 sales and revenues. Average realized prices for aluminaincreased in 2003, when compared to 2002, in line with higher LME prices and higher demand in the alumina market. Higher alumina prices contributed to improved earnings in 2003, partially offset by a 7.1% production cost increase over 2002. Production cost increases were mainly due to higher energy costs and foreign exchange fluctuations.

Alcan used 10.4 million tonnes of bauxite and produced 4.1 million tonnes of smelter-grade alumina, of which some 3.2million tonnes were transferred to its current smelting operations either through swap agreements or direct intersegment sales. The remainder was sold to third parties. Alcan also produced and sold, to third parties, 178,000tonnes of specialty aluminas.

1.3	Production / Facilities
1.3.1	Canada: Alcan owns the Vaudreuil alumina facility at Jonquière, Quebec. Bauxite for this operation is obtained from Brazil, Guinea, Ghana and Australia (see below). Alumina and specialty alumina produced at Vaudreuil supply, in part, the smelters in Quebec and are also sold in specialty alumina markets in the U.S. and Canada. Alcan also owns the Brockville specialty alumina plant in Ontario.
1.3.2	Australia: Alcan has a 100% interest in the Gove bauxite mine and refinery plant in Australia's Northern Territory. In 2003, the amount of bauxite mined at Gove was 6.1 million tonnes and the refinery produced 2.0million tonnes of smelter-grade alumina, which was used at the Kitimat, Iceland, Quebec and Sebree smelters as well as sold to third parties. Alcan owns 21.4% of Queensland Alumina Ltd., which operates an alumina plant at Gladstone (Queensland). Its ownership was increased to 41.4% due to the Pechiney Combination (see section 7.1.2 (a) below). Each participant in that plant supplies bauxite for toll conversion. All of Alcan's bauxite is purchased from Comalco Limited ("Comalco") in Australia under a long-term mining and exchange agreement. Alcan's share of production from Gladstone is used to supply third parties. Alcan and Comalco have an agreement providing for the future development of Alcan's Ely bauxite mine in Cape York, Queensland, Australia, with Comalco's adjacent operations.

1.3.3	Brazil: Alcan purchased approximately 2.6million tonnes of bauxite in 2003 from a 12.5% owned company, Mineração Rio do Norte S.A. ("MRN"). MRN's Trombetas mine in the Amazon region has an operating capacity of about 16.3 million tonnes per year. Bauxite purchased from MRN is processed at the Vaudreuil plant (see above) and at the Alumar alumina refinery in São Luis, Brazil, which has an annual capacity of about 1.3 million tonnes; Alcan owns a 10% interest in the Alumar refinery. Alcan also has alumina facilities (and related bauxite mining facilities) at Ouro Preto, with a capacity of about 145,000 tonnes of alumina per year and 500,000 tonnes of bauxite per year which supply smelters in Brazil.
1.3.4	Ghana: Alcan purchased about 495,000tonnes of bauxite in 2003 from Ghana Bauxite Co. Ltd. in which it holds an interest of 80%. The bauxite purchased is used for processing at the Vaudreuil plant (see above) and is also sold to third parties.
1.3.5	Guinea: Alcan purchased about 4 million tonnes of bauxite in 2003 under contracts in effect through 2011 from Compagnie des Bauxites de Guinée S.A. ("CBG"). Alcan has a 33% interest in Halco (Mining) Inc. The interest was increased to 43% due to the Pechiney Combination (see section 7.1.2 (a) below). Halco holds a 51% interest in CBG, the remaining 49% being held by the Republic of Guinea. CBG's mine in the Boké region of Guinea has an operating capacity of about 12.7 million tonnes per year. Bauxite purchased from CBG is processed at the Vaudreuil plant (see above) and is also sold to third parties.
1.3.6	India: Alcan holds a 45% interest in the proposed Utkal bauxite and alumina project in Orissa, India. The planned project would include a one-million tonne integrated alumina plant and bauxite mine, with potential to further expand production capacity.

With respect to smelter-grade alumina and specialty alumina, Alcan operates the following production facilities:

Alumina capacities -- As at 31 December 2003
Locations†		% of ownership by Alcan	Annual Capacity (thousands of tonnes)
Smelter -- grade alumina
Australia................................................	QAL	21.4	800	*
	(Queensland)
	Gove	100	1,980
	(Northern Territory)
Brazil.....................................................	Ouro Preto	100	135
	(Saramenha, Minas Gerais)
	Alumar	10	135	*
	(São Luís)
Canada..................................................	Vaudreuil	100	1,140
	(Jonquière, Quebec)
Total smelter-grade alumina			4,190
Specialty aluminas
Brazil.....................................................	Ouro Preto	100	10
	(Saramenha, Minas Gerais)
Canada..................................................	Vaudreuil	100	142
	(Jonquière, Quebec)
	Brockville	100	18
	(Brockville, Ontario)
Total specialty aluminas			170	**
Total			4,360

†Includes Joint Ventures, proportionately consolidated.

*This represents Alcan's share of total plant capacity.

**Actual production in a given year may differ from capacity depending on how much of the capacity of a specific plant is allocated to smelter grade alumina versus specialty aluminas.

1.4

Source Materials

1.4.1

Bauxite: Alcan obtains its bauxite from mining Subsidiaries, Joint Ventures, consortium companies and third-party suppliers. In 2003, the Company consumed 10.4million tonnes of bauxite. Based on bauxite deposits in numerous locations around the world, Alcan has more than sufficient bauxite reserves to meet its needs and does not believe that availability of bauxite will constrain its operations in the foreseeable future.

Bauxite Interests -- As at 31 December 2003
Locations		% of Ownership by Alcan	Annual Capacity (thousands of tonnes)
Australia.................................................	Gove	100	6,000
	Ely	100	0	*
Brazil.....................................................	Mineração Rio do Norte S.A.	12.5	2,000	**
	Ouro Preto	100	500
Ghana....................................................	Ghana Bauxite Co. Ltd.	80	700	**
Guinea...................................................	Compagnie des Bauxites de Guinée S.A.	16.8	2,100	**
India......................................................	Utkal	45	0	*
Total			11,300

*Bauxite extraction not yet in operation.

**This represents Alcan's share of total plant capacity.

1.4.2 Chemicals and Other Materials: Certain chemicals and other materials required for the production of alumina, such as caustic soda, fuel oil, natural gas, lime and flocculents are purchased from third parties.

2.	Primary Metal
2.1	Products / Business Units

The Primary Metal Business Group represents all Alcan primary aluminum facilities, power generation installations and trading operations worldwide.

2.1.1	Power Operations: The smelting of one tonne of aluminum requires between 13.5 and 18.5 megawatthours of electric energy to separate the aluminum from the oxygen in alumina. Alcan produces low-cost electricity at its own hydroelectric generating plants in Canada, Brazil and the U.K.
2.1.2	Smelter Operations: Primary aluminum is produced through the electrolytic reduction of alumina. Approximately two tonnes of alumina yield one tonne of metal. Alcan operates and has interests in 16smelters in sevencountries. Products include sheet ingot, extrusion billet, rod, foundry ingot and remelt ingot for conversion into fabricated products for end-use markets in consumer goods, transportation, construction and other industrial applications.
2.1.3	Trading: Alcan Trading AG, a wholly-owned Subsidiary, trades on behalf of Alcan's Subsidiaries. It also engages in limited aluminum and related trading activities for third parties. In 2003, sales volumes for aluminum trading activities for third parties amounted to approximately 410,000 tonnes. Trading services include several main activities: sales of excess raw materials, such as alumina and anodes, purchases of metal and other raw materials to cover requirements that exceed internal supplies, managing risk exposures through LME transactions and managing the supply logistics between smelters and fabricating plants. The Company's third party trading function focusses on metal transactions.

2.1.4	Engineering: Alcan Alesa Engineering AG ("Alesa") provides engineering services and custom-made engineering solutions on a global basis to Subsidiaries as well as to third parties. Alesa subsidiaries maintain engineering offices in Switzerland, Canada and Australia. The main areas of activity are:
-	Raw Materials Technologies, including carbon and reduction technology, alumina refining, anode production and smelter technology;
-	Materials Handling Technologies, including shiploaders and unloaders, silo systems, airlifts and air gravity conveyors, dense phase conveying systems, flyash handling and special applications; and
-	Process Automation, including electrolytic cell control systems and general purpose automation.

The Australian office also provides technical services to the Gove alumina refinery on an ongoing basis.

2.2 Sales and Operating Revenues

Smelter Operations: In 2003, the Primary Metal Business Group recorded intersegment sales and operating revenues of $2.3 billion and third-party sales and operating revenues of $2.6 billion, the latter making up 19% of Alcan's 2003 sales and operating revenues. In 2003, additional sales volumes, higher metal realizations and benefits from profit improvement initiatives were more than offset by the strengthening of local currencies which negatively impacted costs and balance sheet translation, higher alumina and fuel-related raw materials costs, as well as higher pension expenses.

The Company is the second largest aluminum producer in the Western World; 62% of its primary metal is produced using company-owned power, constituting a major competitive advantage. With its focus on continuous improvement in technology and cost, Alcan has a favourable low-cost primary metal position with almost 50% of its capacity in the world's lowest cost tier.

Approximately half of the primary aluminum produced in Alcan's North and South American smelters is sold at market prices to Alcan's fabricating facilities, primarily in the form of sheet ingot, rod, molten metal and remelt ingot. The remainder is sold to third party customers in North and South America as well as in Asia, in the form of value-added ingot, primarily extrusion billet, sheet ingot, rod, foundry ingot or remelt ingot. In 2003, the Primary Metal Business Group sold 1.3 million tonnes of primary aluminum to third parties.

Although Alcan's fabrication of aluminum products in Europe exceeds its production of primary aluminum, the duty barrier for aluminum from outside the European Union, including Canada, and high transportation costs have made it uneconomical to ship significant tonnages of metal to Europe from North America. Alcan's European smelter production is mainly consumed by Alcan's fabricating facilities. Alcan covers the remainder of its metal requirements in Europe with purchases of aluminum from third parties.

Average ingot product realizations were $1,586 per tonne in 2003 compared to $1,533 per tonne in 2002 and $1,614 per tonne in 2001.

2.3	Production / Facilities
2.3.1	Smelter Operations: Alcan operates and has interests in 16 primary aluminum smelters with a nominal rated annual capacity of 2.4 million tonnes. Eight of these smelters, having a total nominal rated capacity of 1.6 million tonnes, are located in Canada; the other smelters are located in Brazil, Iceland, Norway, Switzerland, the U.K. and the U.S. During 2003, Alcan's smelters produced 2,353,900 tonnes of primary aluminum: 1,557,400 tonnes in Canada, 192,900tonnes in the U.S., 198,000 tonnes in the U.K., 106,400 in Brazil, 175,800 tonnes in Iceland, 79,500 tonnes in Norway and 43,900 tonnes in Switzerland.
	For many years, Alcan has been engaged in smelter modernization and rebuilding programs to retrofit or replace some of its older facilities. It intends to continue these programs with a view to increasing productivity, improving working conditions and minimizing the impact of its operations on the environment. One of these steps was the acquisition in 2002 of 40% of Aluminerie Alouette, which operates a modern aluminum smelter in Sept-Iles, Quebec, Canada. Following the September 2002 approval for the expansion project of the Alouette smelter, construction work continued throughout the year. Start-up is expected in early 2005, with full production in the fall of 2005. The project is currently on budget and ahead of schedule, and the total capacity of the smelter is expected to reach 550,000 tonnes.
	On 22 January 2004, the Company announced that it will halt production at the 60-year-old Söderberg potlines at its Jonquière smelter, see above.

Smelter capacities -- As at 31 December 2003
Locations		% of Ownership by Alcan	Annual Capacity (thousands of tonnes)
Canada...............................................	Alma	100	400
	(Quebec)
	Alouette	40	97	*
	(Sept-Iles, Quebec)
	Arvida	100	248
	(Jonquière, Quebec)
	Grande-Baie	100	196
	(La Baie, Quebec)
	Laterrière	100	219
	(Chicoutimi, Quebec)
	Shawinigan	100	91
	(Quebec)
	Beauharnois	100	50
	(Melocheville, Quebec)
	Kitimat	100	277
	(British Columbia)
Total in Canada			1,578
Brazil..................................................	Ouro Preto	100	51
	(Saramenha, Minas Gerais)
	Aratu	100	58
	(Bahia)
Iceland................................................	ISAL	100	172
	(Reykjavik)
Norway................................................	SOERAL	50	66	*
	(Husnes)
Switzerland.........................................	Steg	100	40
	(Valais)
United Kingdom..................................	Lynemouth	100	164
	(Northumberland, England)
	Lochaber	100	40
	(Inverness-shire, Scotland)
United States......................................	Sebree	100	196
	(Kentucky)
Total outside Canada			787
Total			2,365

*This represents Alcan's share of total plant capacity.

2.3.2 Other Aluminum Sources: Other sources of aluminum include the following: purchases of primary aluminum under contracts and spot purchases, purchases of UBCs and aluminum scrap for recycling and purchases of customer scrap returned against ingot or semi-fabricated product sales contracts. Alcan purchases in 2003 of aluminum of all types from all sources amounted to 1.757million tonnes compared to 1.804 million tonnes in 2002 and 1.822 million tonnes in 2001. Such purchases are mainly from third party smelters, traders and, in the case of scrap, from customers and dealers.

Alcan operates extensive recycling operations (see sections 3.4.2 and 4.4.2 below).

2.4	Source Materials
2.4.1	Electrical Power: In Canada, Alcan's plants have an aggregate installed generating capacity of 3,583 megawatts, of which about 2,759 megawatts may be considered to be hydraulically available over the long-term. These facilities supply electricity to Alcan's Canadian smelters. All water rights pertaining to Alcan's hydroelectric installations are owned in perpetuity by Alcan, except for those relating to the Peribonka River in Quebec. An annual charge is payable to the Quebec provincial government based on total energy generation, escalating at the same rate as the Consumer Price Index in Canada. In 1984, Alcan and the Quebec provincial government signed a lease extending the Company's water rights relating to the Peribonka River to 31 December 2033, against an annual payment based on sales realizations of aluminum ingot, with an option to extend the term to 2058. In British Columbia, water rentals for electricity used in smelting and related purposes are directly tied to the sales realizations of aluminum produced at Kitimat. For electricity sold to third parties, Alcan pays provincial water rentals at rates that are fixed by the British Columbia provincial government, similar to those paid by BC Hydro, the provincially-owned electric utility.
	One third of Alcan's installed hydroelectric capacity in Canada was constructed by 1943, another third by 1956 and the remainder by 1968. All these facilities are regularly maintained and are expected to remain fully operational over the foreseeable future.
	In addition to electricity generated at its own plants, as described above, Alcan agreed to purchase, under a long-term agreement, between one and three billion kilowatthours of electrical energy annually from Hydro-Quebec, the provincially-owned electric utility, beginning in 2001. The Aluminerie Alouette, which is 40% owned by Alcan, purchases its electricity needs from Hydro-Quebec pursuant to two supply contracts. A long-term contract is currently in place for the existing smelter, whereas a new contract has been negotiated for the Expansion Project (Phase II), which is currently under construction.
	Any electricity that is surplus to Alcan's needs is sold to neighbouring utilities or customers under both long-term and short-term arrangements.
	For smelters located outside of Canada, electricity is obtained from a variety of sources. The smelters in England and Scotland operate their own coal-fired and hydroelectric generating plants, respectively. The smelters in Brazil partially obtain their electricity requirements from owned hydroelectric generating plants and purchase the balance. In 2003, Alcan commissioned 17 megawatts of additional installed hydroelectric power capacity from new investments in Brazil. The smelter in the U.S. purchases electricity under a long-term contract through 2011 as well as short-term contracts. The smelter in Iceland is supplied with hydroelectric power from Iceland's national power company. The Norwegian smelter has a number of contracts for energy supply. The smelter in Switzerland is supplied with power under a short-term contract.

Electrical power capacities -- As at 31 December 2003
		% of Ownership By Alcan	Installed Capacity ( MW)
Locations
Canada..................................................	Isle Maligne	100	402
	(Quebec)
	Chute-à-Caron	100	224
	(Quebec)
	Shipshaw	100	896
	(Quebec)
	Chute-du-Diable	100	205
	(Quebec)
	Chute à la Savane	100	210
	(Quebec)
	Chute-des-Passes	100	750
	(Quebec)
	Kemano	100	896
	(British Columbia)
Total in Canada			3,583
Brazil.....................................................	Ouro Preto Power Stations	100	47
England.................................................	Lynemouth Power Station*	100	420
Norway...................................................	Vigelands	100	26
Scotland................................................	Highlands Power stations	100	80
Total outside Canada			573
Total			4,156

*Coal-fired.

2.4.2	Anodes: Anodes are used and consumed in the smelting process. Most of Alcan's smelters produce their anodes at their own on-site facilities. Anodes are also produced in a stand-alone facility in the Netherlands ("Aluchemie"). Alcan holds 66% of Aluchemie directly while SOERAL, its 50% joint venture, owns a further 13%. The remainder of the shares is held by Hydro Aluminum A.S. During 2003, Hydro Aluminum A.S. invested in a new furnace with a capacity of 100,000 tonnes. Hydro's ownership will, therefore, increase to 36%; while Alcan will hold 53% of Aluchemie directly and SOERAL, its 50% joint venture, will own 11% once Aluchemie issues participation rights in 2004 to Hydro in exchange of its investment in the new furnace.
	Each of the shareholders of Aluchemie is entitled to a volume of anodes corresponding to its participation at prices determined by formula. Alcan's share of anodes produced by Aluchemie is currently used at the ISAL and SOERAL smelters or sold to third-party customers.
	The main raw materials for anode production are calcined petroleum coke and pitch. The production process involves the mixing of the raw materials followed by cold shaping of the anode and baking of the anode at elevated temperature.
2.4.3	Chemicals and Other Materials: Certain chemicals and other materials, e.g., aluminum fluoride, required for the production of aluminum at Alcan's smelters, are also produced by its chemical operations. Other materials (e.g., caustic soda, fuel oil, fluorspar and petroleum coke) are purchased from third parties.

3.	Rolled Products Americas and Asia
3.1	Products
Through an extensive network of rolled products facilities in North and South America and Asia, the Rolled Products Americas and Asia Business Group manufactures aluminum sheet and light gauge products, including can stock, automotive sheet and industrial products. In addition, the Business Group manages Alcan's global can sheet business.
3.2	Sales and Operating Revenues
In 2003, the Rolled Products Americas and Asia Business Group shipped 1.6 million tonnes of rolled products that included 229,000 tonnes of customer-owned metal. This Business Group's third-party sales and operating revenues for 2003 were $3.5 billion, representing 25% of Alcan's total sales and operating revenues for the year. Sales increases in 2003 were driven by the cost of higher-priced metal inputs being passed through to customers. In 2003, record shipments in Asia and South America offset a 7% decline in North America caused by weakness in some end-use markets and lower can sheet volumes. Volumes increased by 18% in Asia and 10% in South America.
Principal markets are beverage can sheet, containers and packaging, transportation (including automotive), building products and other industrial applications.
3.3	Production / Facilities
At the end of 2003, Alcan's annual rolled products manufacturing capacity in the Americas and Asia was:
-	North America, 1.25 million tonnes, divided among the following plants: Saguenay (Quebec), Kingston (Ontario), Logan and Berea (Kentucky), Oswego (New York), Terre-Haute (Indiana), Fairmont (West Virginia), Louisville (Kentucky), Warren (Ohio) and Greensboro (Georgia);
-	Asia, 460,000 tonnes, divided among the Yeongju (Korea), Ulsan (Korea) and Bukit Raja (Malaysia) plants; and
-	South America, 280,000 tonnes, divided among the Pindamonhangaba (Brazil), and Utinga (Brazil) plants.
At the partially-owned Logan plant, Alcan's capacity varies by production centre. Alcan's ownership of the Yeongju and Ulsan plants corresponds to its 68% shareholding in Alcan Taihan Aluminum Ltd. (''ATA''). Alcan's ownership of the Bukit Raja plant corresponds to its 59% shareholding in Aluminum Company of Malaysia Berhad. In 2003, Alcan increased its ownership position in Aluminum Company of Malaysia Berhad from 36% to 59%. Shares were acquired from Nippon Light Metal in exchange for its shares in Alcan Nikkei Siam Limited in Rangsit, Thailand.
3.4	Source Materials
3.4.1	Sheet and Primary Ingot: In 2003, 394,000 tonnes of sheet ingot were purchased from the Primary Metal Business Group and 186,000 tonnes were purchased from third party suppliers for the Rolled Products Americas and Asia Business Group. In addition, 297,000 tonnes of primary ingot were purchased from the Primary Metal Business Group and 293,000 tonnes were purchased from third party suppliers.

3.4.2

Recycling: As a matter of course, Alcan operates facilities in many plants to recycle post consumer aluminum as well as scrap aluminum generated during the manufacturing process at customers' and Alcan's manufacturing facilities. Recycled metal is primarily utilized by Alcan's own rolling facilities to produce can sheet.

Alcan has a dedicated UBC recycling plant, which has an ultimate capacity of 80,000 tonnes per year, at Pindamonhangaba, Brazil. In Korea, a recycling operation was started during March 2002 with an annual capacity of 22,000 tonnes. In addition, Alcan operates three specialized recycling plants in the U.S. for the recycling of UBCs and process scrap returned from customers. In the case of UBCs, Alcan has a well-established North American recycling network. In 2003, Alcan's U.S. plants processed more than 23 billion UBCs.

Recycling plant capacities -- As at 31 December 2003
Locations		% of Ownership by Alcan		Annual Capacity (thousands of tonnes)
Sheet ingot from UBCs and customer process scrap
Brazil......................................................	Pinda	100		80
	(Pindamonhangaba, Sao Paulo)
Korea.....................................................	ATA	68		22	*
	(Ulsan)
United States..........................................	Berea	100	ü
	(Kentucky)
	Greensboro	100	ý	550
	(Georgia)
	Oswego	100	þ
	(New York)
Total				652

* This represents Alcan's share of total plant capacity.

4.	Rolled Products Europe
4.1	Products
The Rolled Products Europe Business Group supplies markets with a variety of aluminum rolled products including bare and coated sheet, coil, plate and shate, which are used by customers for applications such as building, transport, cans and closures, lithographic, foils, automotive and industrial applications.
4.2	Sales and Operating Revenues
In 2003, Rolled Products Europe Business Group shipped 813,000 tonnes of rolled products to third parties, that included 173,000 tonnes of customer-owned metal. This Business Group's sales and operating revenues for 2003 were $2 billion, representing 15% of total Alcan sales and operating revenues for the year.
Most end-user markets remained weak all year, although higher realized prices have resulted in increased sales revenues in 2003. Rolled Products Europe's realized prices improved as a result of the stronger Euro and portfolio changes towards higher value-added products in more economically attractive markets. The improved higher-value mix, as well as benefits from restructuring programs resulted in higher earnings. In addition, the strengthening of the Euro and Swiss franc against the U.S. dollar also contributed to earnings in 2003.

Principal markets are beverage can sheet, packaging, automotive and transportation, building products, lithographic sheet, electrical and other industrial applications.
Alcan continues to work with DaimlerChrysler, Ford (including Jaguar), General Motors, Audi, BMW and other automakers in Europe to produce lighter, more efficient vehicles.
4.3	Production / Facilities
At the end of 2003, Alcan's annual rolled products manufacturing capacity in Europe was 1.7 million tonnes of finished goods, divided among the following rolling plants: Rogerstone and Falkirk (U.K.), AluNorf, Nachterstedt, Göttingen and Singen (Germany), Sierre (Switzerland), Bresso and Pieve Emanuele (Italy).
AluNorf, in Neuss, Germany is the world's largest rolling plant and is operated as a 50% joint venture with Hydro Aluminum A.S. The other plants are wholly-owned by Alcan.
4.4	Source Materials
4.4.1	Sheet Ingot: In 2003, 410,000 tonnes of sheet ingot were purchased from the Primary Metal Business Group and 270,000 tonnes were purchased from third party suppliers.
4.4.2	Recycling: Alcan operates a UBC collection system in the U.K., which feeds into a specialized recycling plant for the recycling of UBCs and process scrap returned from customers, with a capacity of 87,000tonnes per year.
	Alcan plays leading roles in joint industry programs to promote aluminum collection and recycling in many of the countries where it operates. Alcan operates facilities in many plants to recycle aluminum scrap generated internally by fabricating activities. It operates a facility in the U.K. for the production of 65,000 tonnes per year of sheet ingot from aluminum scrap, and a secondary aluminum smelter in Borgofranco, Italy, which has a capacity of 70,000 tonnes per year for the production of secondary aluminum from aluminum scrap.
	Recycled metal is primarily utilized by Alcan's own rolling facilities to produce can sheet.

Recycling plant capacities -- As at 31 December 2003
Locations		% of Ownership by Alcan	Annual Capacity (thousands of tonnes)
Foundry alloys and remelt scrap ingot Italy........................................................	Borgofranco di Ivrea	100	70
	(Piemonte region)
Sheet ingot from UBC & can scrap United Kingdom.....................................	Warrington	100	87
	(England)
Sheet ingot from miscellaneous scrap United Kingdom.....................................	Warrington	100	65
	(England)
Total			222

5.	Engineered Products
5.1	Products / Business Units
Alcan's Engineered Products Business Group produces engineered or fabricated aluminum products. These include cable and wire as well as fabricated and cast products for the automotive, mass transportation, electromechanical and industrial markets. In addition, the group manufactures composites for facade, display and transportation end uses.
The Business Group's product range is divided into the following business units:
5.1.1	Composites: Products include: multi-material composites, for example, comprising an outer and inner skin of aluminum sheet surrounding a plastic core; foam plastic materials, covered, if required by specific market requirements, with paper or plastic layers; fibre-reinforced plastic components, mainly for transportation applications and balsa core materials. The main applications include building facades, display and transportation markets, for which composites have a number of advantages over more traditional materials because of their low weight-to-stiffness ratio, ease of application and design variety; balsa core materials, a new product introduced in 2003, which serve as a complementary product to existing structural foam products, mainly used in composite sandwich construction; and foam board material, also a new product, which is processed by treating and laminating paper to a polystyrene foam core and supplements the existing composites products for use in foam-based display boards, signage, furniture backing and construction applications.
5.1.2	Cable: Aluminum is cast and rolled into rod, which is then drawn into wire and stranded into cable for the transmission and distribution of electricity. Rod is also used for mechanical applications such as screen wire and cable armouring.
5.1.3	Extruded Products: The extrusion process involves forcing hot metal through a die to create profiled shapes for the transportation, machine and building industries. Examples of end-products using extrusions include rail cars, buses and automotive components.
5.1.4	Automotive and Transportation: This group produces structures and engineered shaped products including crash systems and high-quality castings supplied to automotive customers, as well as the Mass Transportation unit, which supplies product and design services to rail and bus manufacturers.
5.1.5	Service Centres: Service Centres are located in many European countries. They typically offer various forms of fabricated aluminum including plates, extrusions and composite panels and perform value-added services for local customers such as cutting, shaping, machining and assembling.
5.2	Sales and Operating Revenues
In 2003, the Engineered Products Business Group had third-party sales and operating revenues of $1.8 billion, representing 13% of total Alcan sales and operating revenues for the year. Revenues were higher than in 2002, despite difficult market conditions, helped by the strength of the Euro and by the acquisitions of composite businesses.
5.2.1	Composites: Composites activities had third-party sales and operating revenues of $380 million in 2003. The market segments for the composite products are display, architecture, transportation and industry. The segment recently expanded to include marine, mass transportation, wind-power generation and aerospace markets for the balsa core materials and the display, graphic arts, decorative composites and construction markets for the foamboard materials, used in brands such as Sintra/Forex, Dibond, Kapa, Foam-X, Gator-Foam and Fome-Cor.

 

5.2.2	Cable: Cable activities had third-party sales and operating revenues of $442 million in 2003. Alcan cable is one of the largest aluminum cable manufacturers in North America. Alcan Cable supplies many sectors of the electrical industry and utilities, electrical distributors and original equipment manufacturers.
5.2.3	Extruded Products: Extrusion activities had third-party sales and operating revenues of $380 million in 2003. The Extruded Products business unit is a leading supplier of large and hard alloy extrusions with customers in rail, bus, marine, automotive and engineering applications.
5.2.4	Automotive and Transportation: This business unit achieved record sales in 2003. Automotive and transportation activities had third-party sales and operating revenues of $316 million in 2003. This trend reflects the continuing growth of aluminum's lightweight solutions in the transportation sector. Alcan's portfolio of aluminum alloys, design innovation and processing capabilities has made it a long-standing supplier with major automobile manufacturers world-wide including: Audi, BMW, DaimlerChrysler, Ford (including Jaguar), General Motors, Peugeot, Porsche, Renault, and Volkswagen as well as with bus and rail producers. The automotive products from this unit as well as from Rolled Products Europe, Rolled Products Americas and Asia and Primary Metal Business Groups are marketed to the global automotive industry using the Alcan Automotive brand.
5.2.5	Service Centres: Alcan Service Centres supply mainly small and mid-sized industrial companies with specialist services largely utilising Alcan's specialist fabricated products including plate, composite and extrusions. The extensive Service Centre network offers a customised processing service depending on clients' needs. This business unit had third-party sales and operating revenues of $260 million in 2003.
5.3	Production / Facilities
Alcan's Engineered Products Business Group consists of 66 production facilities around the world.
5.3.1	Composites: Composites has the following 17 main plants: Shanghai (China); Camacari (Brazil); Guayaquil, Quevedo; Santo Domingos and Manta (Equador); Osnabrueck and Singen (Germany); Sins, Gunzgen and Altenrhein (Switzerland); Chelmsford (U.K.) and Benton, Glasgow, Northvale, Richmond and Statesville (U.S.). This includes the acquisitions of Baltek and Fome-Cor completed in 2003.
5.3.2	Cable: Alcan's main wire, rod and cable businesses are located in Canada and the U.S.: Lapointe and St. Maurice (Quebec), Roseburg (Oregon), Sedalia (Missouri), and Williamsport (Pennsylvania).
5.3.3	Extruded Products: Alcan produces extruded products at the following plants: Decin (Czech Republic), St. Florentin (France), Singen (Germany), Sierre (Switzerland) and Shenzen (China).
5.3.4	Automotive and Other Transportation: Among the product lines included in this business unit are:
-	Extrusion-based safety systems and other structural automotive components and airfreight containers, which are produced in Dahenfeld, Gottmadingen, Rastatt, Markt Schwaben and Singen (Germany);

-	Diecastings, which are produced in Markt Schwaben (Germany) and in Alcan-Tomos d.o.o. (Slovenia) and suspension parts and forgings, which are produced in the Strojmetal joint venture (Czech Republic); and
-	Mass Transportation is located in Zurich (Switzerland).
5.3.5	Service Centres: The Service Centre network operates across most of Europe. Alcan Service Centres are established in: Schwarzach and Vienna (Austria); Brussels (Belgium); Lyon, Nantes and Ozoir-la-Ferrière (France); Budapest (Hungary); Bologna, Florence, Padua and Treviglio (Italy); Breda (Netherlands); Lisbon (Portugal); Ljubljana (Slovenia); Molins de Rey (Spain); Niederglatt (Switzerland); and Walsall (U.K.). In 2003, a new location was established in Romania to serve the growing market.
5.4	Source Materials
Aluminum used to produce engineered products is purchased from other Business Groups and from third party suppliers, which include producers and traders. Recycled metal is also purchased from customers and traders.
6.	Packaging
6.1	Products / Business Sectors
Packaging is used to protect and present consumer goods in individual formats. Alcan offers packaging made out of aluminum, plastics, paper, cartonboard, glass and steel. These products are mainly used for consumer branded goods.
In 2003, the Packaging Business Group was divided into the following four sectors:
6.1.1	Food Packaging and Food Services: Alcan packaging manufactures a wide range of packaging products for the food, dairy and beverage industries and is a leading producer of flexible packaging in Europe, North America, South America and Asia, converting film, foil and paper materials into value-added packaging. Alcan packaging provides packaging solution expertise in wide-ranging markets around the world, including beverages, biscuits/cookies/cereals, confectionery, dairy products, fresh and frozen food, instant products, pet food, retorted foods and snacks.
	The principal activities of this sector are printing, coating and lamination of plastic film, aluminum foil and paper into primary packaging materials for food manufacturers. The main processes used are rotogravure and flexographic printing, lamination using adhesive, wax or plastic extrusion and various coating processes to add barrier properties, sealability or gloss.
6.1.2	Pharmaceutical and Personal Care: Alcan is one of the world's leading suppliers of packaging to the pharmaceutical industry, with production sites and R&D expertise in Europe, Asia and the Americas. Products and services include blister packages, pouches, vials, plastic bottles and closures, folding cartons and pump dispenser containers, contract packaging products and services, scientific glassware and laboratory equipment.
6.1.3	Tobacco Packaging: Alcan Packaging is a leading supplier to the global tobacco industry with manufacturing operations around the world. Tobacco packaging products include folding cartons, flexible packaging, inner bundling and decorated tinplate containers.

	Alcan specializes in the production of high quality in-line rotogravure printed tobacco cartons. Nine manufacturing facilities are solely dedicated to the production of tobacco packaging, while Alcan is also the largest global producer of cigarette inner-bundling materials with five further locations.
6.1.4	Foil Rolling and Technical Products: The foil rolling and technical products sector of Alcan Packaging is one of Europe's leading integrated producers of plain foil and converted products, supplying the global packaging and technical products industries from its manufacturing plants in the U.K., Germany and Switzerland.
	The foil products unit uses cold rolling mills to roll the foil to its required thickness, while retaining shape and surface quality across the whole width of the foil. Other applications involve laminating, coating and printing to convert the foil into products such as sweet wrappers with the design printed onto the plain foil. Foil is used for household and commercial packaging applications and for industrial products. One of the largest applications for plain foil is the liquid beverage carton industry; beverage carton materials for certain products, such as long-life milk and fruit juices, include a layer of aluminum foil to provide the protection necessary to preserve the product.
6.2	Sales and Operating Revenues
Alcan is a global leader in the manufacture and sale of individual packages to the producers of consumer goods supplying the food, pharmaceutical, personal care, and tobacco markets. Packaging sales to third parties were $3.2billion in 2003. The Packaging Business Group's sales and operating revenues represented 24% of Alcan's total sales and operating revenues for the year.
In 2003, pricing pressures associated with customer consolidation and over-capacity in a weakened economic environment characterized the packaging markets. However, benefits from cost initiatives, largely related to synergy and restructuring programs, compensated for the weak economic environment resulting in comparable earnings performance relative to 2002.
6.2.1	Food Packaging and Food Services: The food business unit is the largest in the packaging sector, and generated sales and operating revenues of $1.3 billion.
6.2.2	Pharmaceutical and Personal Care: The pharmaceutical and cosmetics packaging sector accounted for third-party sales and operating revenues of $584 million in 2003, of which pharmaceuticals accounted for the major portion. Alcan is a leading supplier of pharmaceutical packaging in both Europe and North America.
6.2.3	Tobacco Packaging: Sales and operating revenues from third parties were $451 million in 2003.
6.2.4	Foil Rolling and Technical Products Europe: Alcan sells plain and converted foil for consumer and industrial applications. 2003 third-party sales and operating revenues were $402 million.
6.2.5	VAW Flexible Packaging Group: FlexPac, which was considered a separate business sector for financial purposes in 2003, attained sales and operating revenues of $464 million.
6.3	Production / Facilities
Alcan has 84main packaging plants in 18countries.
6.3.1	Food Packaging and Food Services: Alcan produces an extensive range of products at its manufacturing facilities in Brazil, Canada, France, Germany, Ireland, Italy, the Netherlands, Spain, Switzerland, the U.K. and the U.S. Since the acquisition of FlexPac, Alcan also has a strong presence in Asia, namely in Thailand, Indonesia, Philippines, China and Turkey.

6.3.2	Pharmaceutical and Personal Care: Manufacturing facilities are located in Brazil, Canada, France, Germany, Puerto Rico, the Netherlands, Switzerland, the U.K. and the U.S. Similarly to the Food Unit, the acquisition of FlexPac enhanced Alcan's presence in Asia with plants in Thailand, Indonesia, Philippines and China.
6.3.3	Tobacco Packaging: The tobacco and specialty markets are served by 11 main plants in sevencountries. The markets in which tobacco is represented are Germany, the Netherlands, Turkey, the U.K., Kazakhstan, Canada and the U.S. Apart from its tobacco packaging operations, the sector also has facilities in the U.K. focused on providing print finishing services, manufacturing steel cans mostly for the food industry and also for decorated tinplate containers.
6.3.4	Foil Rolling and Technical Products: Alcan's European foil rolling mills and other manufacturing facilities are located in Germany, Switzerland and the U.K.
6.4	Source Materials
Packaging is made from a variety of materials including aluminum, plastics, paper board, glass and steel. Aluminum foil stock used in packaging is mainly purchased from other Business Groups. Other source materials are purchased from many third party suppliers.
7.	Pechiney Business Sectors
7.1	Primary Aluminum
7.1.1	Products / Business Divisions
a)	Bauxite and Alumina: Pechiney mines bauxite, providing the base for a part of its alumina production. Pechiney produces two kinds of alumina: metallurgical alumina for the production of aluminum and technical alumina used in different industrial sectors, in particular in the production of refractory materials, ceramics and chemical products.
b)	Fluorspar: Pechiney mines fluorspar concentrates, the largest part of which is used in the fluorochemicals industry as source of fluorine. The main chemicals are hydrofluoric acid and aluminum fluorides for aluminum production and above all specialities for refrigeration industries such as fluids and insulation materials. Fluorspar is also used as a fluxing agent in welding consumables, in special steel manufacturing and the glass industry.
c)	Corundum: Pechiney produces electrofused alumina products used in abrasives and refractories.
d)	Aluminum Metal (Smelting): Through the electrolysis of alumina, Pechiney produces primary aluminum. Different aluminum alloys are prepared in foundry operations from liquid aluminum produced by electrolysis. There are four main products: slabs, ingots, billets and wire rod for electrical and mechanical uses. These products are mainly used in the aluminum conversion industry.
e)	Remelting Operations: Pechiney produces wire rod from remelted ingot and scrap.

f)	Electrometallurgy: Specialized in carbo-electric reduction, the Electrometalllurgy division produces silicon-based alloys and silicon, especially designed to upgrade the performance of steel, cast iron and light alloys and to be used in the production of silicon. The main markets for such products are steel (automotive, aerospace, electric, packaging and construction), foundry (automotive, water conveyance), chemicals (silicon), light alloys (automotive, aerospace, packaging) and construction and public works markets. In 2003, the division continued to benefit from significant gains in consumption of raw materials and product quality.
g)	Technology, Equipment and Services: As a result of the Pechiney Combination, Alcan has become one of the world leaders in the sale of alumina technology and in technical assistance for alumina production facilities. Activities also include the sale and licensing of primary aluminum smelting technology and know-how to third parties, such as AP30 technology. In addition, Pechiney is developing new smelter technology. There are three branches: bauxite-alumina technology and expertise, smelting operations and expertise and Electricité Charpente Levage ("ECL"), a manufacturer of equipment for aluminum smelters.
7.1.2	Production / Facilities
a)	Bauxite and Alumina: As a result of the Pechiney Combination, Alcan increased its ownership from 21.4% to 41.4% in Queensland Alumina Ltd. (Australia) and from 33% to 43% in Halco (Mining) Inc.; Halco holds a 51% interest in Compagnie des Bauxites de Guinée ("CBG"), the remaining 49% being held by the Republic of Guinea. Thus, Alcan has gone from an effective 17% equity interest in CBG to a 22% interest. Pechiney owns and operates mines and plants in France, Germany and Greece.
b)	Fluorspar: Pechiney operates three mines and a flotation plant in France.
c)	Corundum: Pechiney has two plants for production of corundum in France.
d)	Aluminum Metal (Smelting): Pechiney has facilities in Australia, Cameroon, Canada, France, Greece and the Netherlands.
e)	Remelting Operations: Pechiney has a plant in Castelsarrasin, France.
f)	Electrometallurgy: Pechiney has eight plants for the production of ferroalloys, silicon, specialty silicon alloys and recycled magnesium; seven are located in France and another one in South Africa. In 2003, the South African facility completed a major program designed to increase capacity and modernize operations. The Electrometallurgy division completed its withdrawal from calcium and calcium carbide production by disposing its 25% share in SKW Stahl Holding at the end of 2003.

Primary Aluminum capacities -- As at 31 December 2003
Locations		% of ownership by Pechiney	Annual Capacity (thousands of tonnes)
Bauxite
Greece...................................................	Delphi-Distomon**	60.2	970
	(Distomon)
Guinea...................................................	Compagnie des Bauxites de Guinée	5.1	1,550	*
	(Conakry)
Total Bauxite			2,520
Alumina (smelter grade and specialty)
Australia.................................................	Queensland Alumina Ltd.	20	750	*
	(Gladstone)
France....................................................	Aluminum Pechiney	100	650
	(Gardanne)
Germany................................................	Alufin	100	17
	(Teutschental)
Greece...................................................	Aluminum de Grèce**	60.2	750
	(Saint-Nicolas)
Total Alumina			2,167
Fluorspar
France....................................................	Sogerem	100	70
	(Albi area)
Total Fluorspar			70
Corundum
France....................................................	Pechiney Electrométallurgie (PEM AR)	100	28
	(La Bathie)
	PEM AR	100	24
	(Beyrede)
Total Corundum			52
Smelting Operations
Australia.................................................	Tomago Aluminum Pty	51.5	245	*
	(Tomago, NSW)
Cameroon..............................................	Alucam****	47	95
	(Edéa)
Canada..................................................	Aluminerie de Bécancour Inc.	25	102	*
	(Bécancour, Quebec)
France....................................................	Aluminum Pechiney***	100	0
	(Auzat )
	Aluminum Pechiney	100	50
	(Lannemezan)
	Aluminum Pechiney	100	135
	(Saint-Jean-de-Maurienne)
	Aluminum Dunkerque*****	100	250
	(Dunkerque)

Primary Aluminum capacities -- As at 31 December 2003
Locations	% of ownership by Pechiney	Annual Capacity (thousands of tonnes)
Smelting Operations

Greece...................................................	Aluminum de Grèce**	60.2	163
	(Saint-Nicolas)
Netherlands............................................	Pechiney Nederlands (PNL)	85	170	*
	(Vlissingen)
Total Smelting Operations			1,210
Remelting operations
France....................................................	Aluminum Pechiney	100	6
	(Castelsarrasin)
Total Remelting Operations			6
Electrometallurgy
France....................................................	Anglefort (silicon metal)	100	32
	(Alpes)
	Montrichet (silicon metal)	100	24
	(Alpes)
	Les Clavaux (silicon metal)	100	32
	(Alpes)
	Laudun (ferrosilicon)	100	43
	(Vallée du Rhone)
	Château-Feuillet (silicon, CaSi, FeSi)	100	48
	(Alpes)
	Pierrefitte (ferrosilicon)	100	16
	(Pyrénées)
	Marignac (magnesium)	100	4
	(Pyrénées)
South Africa...........................................	Polokwane (silicon)	100	50
	(Limpopo)
Total Electrometallurgy			249

*This represents Pechiney's share of total plant capacity.

**As a majority shareholder in Aluminum de Grèce, Pechiney obtains all the bauxite production of Delphi-Disomon's Parnasse mines and all the alumina production at the Saint-Nicolas refinery. It also effectively controls the marketing and sale of the aluminum produced at the smelter.

***The Auzat plant interrupted production in March 2003 and then closed in November 2003. The plant had a capacity of 500,000 tonnes while in operation.

****Pechiney's direct ownership in Edéa is 47%; however it obtains 100% of production of the plant as the major industrial shareholder and manager of Alucam.

*****Pechiney's ownership in Dunkerque increased from 35% to 100% in December 2003.

g)	Technology, Equipment and Services: In February 2003 the Pechiney activities relating to the sale of alumina and aluminum technology were regrouped under common management.
7.1.3	Source Materials
a)	Recycling: Apart from the Castelsarrasin plant, the Pechiney Primary Aluminum sector does not operate stand-alone aluminum recycling plants. Some of its primary aluminum smelters recover aluminum from scrap, mostly from internal sources, or purchased remelt ingot.

The Electrometallurgy division operates a magnesium recycling plant in Marignac (France), which converts class one die cast magnesium scrap into secondary magnesium alloys from selected customers throughout Europe.

Recycling plant capacities -- As at 31 December 2003
Locations		% of ownership by Pechiney	Annual Capacity (thousands of tonnes)
Aluminum (excluding Electrometallurgy)
Cameroun.........................................	Edea	47	8	*
France..............................................	Castelsarrasin	100	6
	(Tarn-et-Garonne)
Netherlands.......................................	Vlissingen (for remelt ingot)	85	20	* and **
	(Zeeland)
	Vlissingen (for recycling scrap)	85	26	* and **
	(Zeeland)
Total Aluminum (excluding Electrometallurgy)			34 - 40

Electrometallurgy
Magnesium recycling plant
France..............................................	Marignac	100	5
	(Haute-Garonne)
Total Electrometallurgy			5
Total			39 - 45

*This represents Pechiney's share of total plant capacity.

**Both capacities cannot be added; capacity at the plant can only be used for one or the other at the same time.

7.2	Aluminum Conversion
7.2.1	Products / Business Divisions
a)	Aerospace, Transport, Industry: The conversion process involves converting aluminum alloys into rolled products, extrusions and cast products. This division is managed along the following business lines: (a) technical rolled products North America, (b) technical rolled products Europe, (c) hard alloy extrusions, and (d) cast parts. The facilities manufacture cast plate for the aerospace and industrial markets, aluminum lithium ingots and billets for the aerospace industry, and plate, shate, sheet, wide coils, bars and wide sections for the aerospace, industrial, transportation and mechanical engineering markets in both the U.S. and Europe, as well as precision tubes for sports equipment.
b)	Cans, Automotive and Standard Rolled Products: This division pursues four types of activities: (a) can stock for cans, used in the food and beverage packaging sectors, (b) automotive parts, (c) heat exchangers for the automotive sector and (d) standard rolled products for the construction, industry and distribution sectors.
c)	Foil and Strip / Specialties: This division undertakes the manufacture of foil and thin strip, circles, precoated sheets, Rubanox refrigeration panels, heat exchangers, and aluminum foil used in the food, industrial, pharmaceutical, packaging, construction, automotive, electronics and lighting industries. The sale of technology relates to continuous casting, processing of liquid metal and technical assistance; in 2003, a project was launched to sell in-line degasification equipment.

d)	Extrusions, Casting Alloys, Automotive: This division is managed along three business lines:
-	Extrusions: This sub-division is involved in the manufacture and sale of soft aluminum alloy extrusions (extrusion, coating, anodizing, thermal break and mechanical finishing). The soft alloy extrusions are used for construction (doors, windows, curtain walling systems and interior building frames), transport (industrial vehicles, automotive) and industrial applications (mechanical applications, signalling, electricity).
-	Casting: The casting alloy sub-division produces and sells primary and secondary aluminum alloys in the form of ingots and liquid metal used to manufacture cast products, which are mainly used for the automotive industry.
-	Automotive: This sub-division co-ordinates the development of sheet, profiles and casting alloys in partnership with car makers and parts manufacturers.
7.2.2	Production / Facilities
a)	Aerospace, Transport, Industry: Plants are located at: Issoire, Montreuil-Juigne, Carquefou and Ussel (France), Workington (U.K.), and Vernon, Chicago and Ravenswood (U.S.).
b)	Cans, Automotive, Standard Rolled Products: Most of the production of can stock for cans and automotive parts as well as much of the production of heat exchangers parts and other standard rolled products is done at the Neuf-Brisach facility in France.
c)	Foil and Strip Specialties: Eight industrial plants are located at: Annecy, Chambery, Froges, Goncelin, Mercus and Rugles (France), Flemalle (Belgium) and Dudelange (Luxembourg). PAE (Pechiney Aluminum Engineering, sales of technology) is located at Voreppe (France).
d)	Extrusions, Casting Alloys, Automotive:
-	Extrusions: Facilities are located in Ham and Nuits-Saint-Georges (France), Landau, Crailsheim and Burg (Germany).
-	Casting: This business operates one facility in Compiègne and one facility in Sabart (France).
-	Automotive: There is no facility dedicated to the Automotive sector. Automotive semi-finished products are mainly fabricated in Neuf-Brisach (Flat Rolled Products), Nuits-Saint-Georges and Crailsheim (Extrusions) and Compiègne (Casting Alloys).
7.2.3	Source Materials
a)	Recycling: Most plants under Pechiney's Aluminum Conversion sector are not dedicated recycling plants, except for the Affimet Company plant in France (see table below). All casting plants recycle scrap that comes from the internal production process as well as external scrap purchased from customers.

Recycling plant capacities -- Aluminum Conversion As at 31 December 2003
Locations		% of ownership by Pechiney	Annual Capacity (thousands of tonnes)
Aerospace, Transport, Industry
Sheet ingot from customer process scrap (aircraft), miscellaneous scrap and internal scrap France......................................................	Pechiney Rhenalu	100	130
	(Issoire)
Sheet ingot from customer process scrap (building), miscellaneous  scrap and internal scrap United States...........................................	Pechiney Rolled Products	100	150
	(Ravenswood)
Billet from internal scrap and miscellaneous scrap France....................................................	Pechiney Aviatube	100	13
	(Montreuil Juigne)
Billet from internal scrap United Kingdom.......................................	Pechiney Rhenalu	100	15
	(Workington)
Cans, Automotive and Standard Rolled Products
Sheet ingot from customer process scrap (beverage can and automotive), miscellaneous scrap and internal scrap France....................................................	Pechiney Rhenalu	100	285
	(Neuf-Brisach)

Recycling plant capacities -- Aluminum Conversion As at 31 December 2003
Locations		% of ownership by Pechiney	Annual Capacity (thousands of tonnes)
Foil and Strip / Specialties
Sheet ingot from internal scrap France....................................................	Pechiney Rhenalu	100	22
	(Annecy)
Reroll coil from internal scrap (foil) France....................................................	Pechiney Rhenalu	100	15
	(Rugles)
Reroll coil from internal scrap (foil) Luxembourg...........................................	Pechiney Eurofoil	100	21
	(Dudelange)
Sheet ingot and customer process scrap (Pechiney Rhenalu Froges) and internal scrap France....................................................	Aluminum Pechiney	100	3
	(Mercus)
Extrusions, Casting Alloys, Automotive
Foundry alloys France....................................................	Affimet	100	65
	(Compiègne region)
Total			719

7.3	Packaging
7.3.1	Products / Business Divisions
a)	Plastic Packaging: Pechiney manufactures high value-added flexible packaging and plastic bottles characterized by high barrier properties, which enhance the product shelf life. Products include single and multi-layer films and laminations, pouches, bags, lidstock, thermoformed trays, single and multi-layer polyolefin and PET barrier bottles for juices, beer, sauces and ketchup. Main markets include food, healthcare and specialty markets. Research and development are important aspects of this division.
b)	Cebal Tubes Europe-Asia: Pechiney produces and sells Cebal collapsible plastic, laminated and aluminum tubes mainly for the cosmetics, personal care and healthcare markets.
c)	Cebal Tubes Americas: This division produces and sells similar products as Cebal Tubes Europe-Asia. The division targets the development of high-value added plastic and laminated tubes focused on dental hygiene segments and on personal care and pharmaceuticals markets.

d)	Cebal Aerosols: This division produces aluminum bottles and seamless aluminum aerosol cans mainly for the personal care market (deodorant, hair care and hygiene), as well as for other niche markets, such as pharmaceuticals, perfume, cleaning products, food and beverages.
e)	Techpack International: This business is a worldwide producer of high value-added plastic packaging for perfume and cosmetics, such as lipsticks, mascara cases, compacts, caps, bottles, promotional items, jars and dispensers.
f)	Caps and Overcaps: Pechiney operates a small business for the production of caps and overcaps for the global wine, alcohol and spirits markets.
7.3.2	Production / Facilities
a)	Plastic Packaging: Pechiney operates a worldwide plastics business divided into flexible/plastic packaging in Argentina, the Czech Republic, France, Germany, Italy, Mexico, Morocco, Portugal, Spain, New Zealand and the U.S., as well as a plastic bottles business in Canada, France, the U.K. and the U.S. This division also has a research and development center in the U.S. and graphic centers in France, Mexico and Spain. This division has benefited from significant acquisitions in the past year.
b)	Cebal Tubes Europe - Asia: This business has facilities located throughout Europe (the Czech Republic, France, Germany, Italy and Poland) and one facility in China.
c)	Cebal Tubes Americas: This business has eight facilities located throughout the Americas in Brazil, Canada, Mexico and the U.S.
d)	Cebal Aerosols: This business has facilities in the Czech Republic, France, Italy, Spain and the U.K.
e)	Techpack International: Techpack has set up a worldwide industrial and commercial network, which it expanded considerably in 2003. The network is comprised of 15 manufacturing facilities in Indonesia, France, Italy, Spain, South America (Brazil) and North America (U.S.), benefiting from specialized development centers, one innovation center, seven marketing units and a sourcing office in Asia.
f)	Caps and Overcaps: This business has facilities in Canada, Chile, France and the U.S.
7.4	International Trade
7.4.1	Services
a)	Sales: Through its global sales agency network, Pechiney's International Trade division specialised in the sale and sourcing of commodities and products for industrial use for Pechiney's other activities and also for third parties worldwide.
b)	Trading: International Trade specializes in the trading of bauxite, alumina and primary aluminum, as well as copper, ores and concentrates. It maintains a strong presence in both the intermediary markets and end-user markets.
c)	Distribution: This sub-division specializes in the distribution of semi-finished aluminum products and stainless steel items, mainly for the aerospace, mechanical engineering, transport, construction and boiler-making markets.

7.4.2	Locations
a)	Sales: International Trade's sales agency network maintains extensive presence through its 40 agencies operating in more than 60 countries around the world, including a strong growth in China.
b)	Trading: International Trade's activities are carried out through five companies: Pechiney World Trade USA (U.S.), Pechiney Trading Company (Switzerland), Pechiney Trading France (France), Pechiney Trading Ltd. (England) and Pechiney Far East Limited (Hong Kong).
c)	Distribution: The Almet distribution network operates in Austria, Belgium, France, Germany, the Netherlands and Switzerland. Operations are conducted through a network of sales outlets and five service centers in the same countries.
D.	INFORMATION BY GEOGRAPHIC AREAS
See Annual Report, page 94, Note 29 to the Consolidated Financial Statements for financial information by geographic area.
E.	RESEARCH AND DEVELOPMENT
Alcan: Research and development ("R&D") comprises a global system of research laboratories, applied engineering centres and plant technical departments. The principal research laboratories, responsible for approximately 60% of the total R&D expenses for Alcan, play a major role in innovation through basic and applied research. Two laboratories are located in Canada (at Kingston, Ontario, and Jonquière, Quebec), and one in Switzerland (Neuhausen). Together, these research laboratories employ about 450 people. In recent years, Alcan's R&D efforts have been refocused on core processes and products, assisting operating units to achieve increased productivity, higher quality and reduced costs. Alcan's R&D expenses totaled $140million in 2003, $115million in 2002 and $135 million in 2001. In addition, intellectual property management safeguards Alcan's process and product technologies and trademarks. Alcan manages applied engineering centres and technical departments located close to key markets and operating divisions. These include the Packaging Technology Center located in North America for canning and packaging technology, and technical centres in North America and Europe for automotive technologies. These centres are focused on major products and provide technical and product development support to customers, drawing extensively on the resources and scientific disciplines in the research centres. Pechiney: Pechiney's R&D activities are conducted at the central R&D laboratory ("Pechiney CRV") in Voreppe, France, and at six specialized laboratories (alumina, primary aluminum production, ferroalloys, tubes and aerosols and flexible packaging) located in France and the United States. In addition to its role as a central laboratory supporting the activities of the Group's other research centers, Pechiney CRV conducts all aluminum conversion research. In addition, in 2002 Techpack International opened a new innovation center that provides an enhanced upstream response to customer needs.

Approximately 80% of projects are integrated into industrial programs and 20% are dedicated to maintaining and developing expertise and promoting exploratory investigation. Co-development projects continued to develop in 2003. Pechiney involves major customers in the innovation process, conducting joint research programs in aerospace, automotive and packaging markets. Sustained efforts were also made to improve production and conversion processes in order to reduce costs, enhance product quality and boost environmental protection in a variety of fields. Finally, Pechiney pursued its active participation in European projects within the framework of the sixth European Union Framework Program for Research and Technology Development (Plan Communautaire de Recherche & Développement). In particular, it was a partner in the new Welding Concept for Aircraft (WELAIR) project, a European program for R&D, to develop new welded structure designs for aerospace applications. Pechiney's R&D expenses totaled €93 million in 2003, compared with €90 million in 2002 and €97 million in 2001.
F.	ENVIRONMENT, HEALTH AND SAFETY MATTERS
Alcan is subject to a broad range of environmental laws and regulations in each of the jurisdictions in which it operates. These laws and regulations, as interpreted by relevant agencies and the courts, impose increasingly stringent environmental protection standards regarding, among other things, air emissions, wastewater storage, treatment and discharges, the use and handling of hazardous or toxic materials, waste disposal practices, and the remediation of environmental contamination. The costs of complying with these, including participation in assessments and remediation of sites, could be significant. In addition, these standards can create the risk of substantial environmental liabilities, including liabilities associated with divested assets and past activities. Currently, Alcan is involved in a number of compliance efforts and legal proceedings concerning environmental matters. Alcan: Alcan's vision for environment, health and safety ("EHS") is to become a recognised leader of EHS excellence, in all Alcan does and everywhere it operates. To move towards this vision, in 2003 Alcan introduced EHS FIRST, a new EHS management system. EHS FIRST is a part of Alcan's Integrated Business Management System, contributing to maximizing Alcan's value. EHS FIRST requires all sites to implement ISO 14001 and OHSAS 18001 management systems. By the end of 2003, 63% of the sites were certified according to ISO 14001 and 46% of the sites were already certified for OHSAS 18001. By the end of Quarter 1, 2004 any facility, site or installation that is managed and/or at least 50% owned by Alcan and is a legal entity should be certified, with the exception of newly acquired facilities, which have two years time to be certified. EHS performance data were reported externally in our 2003 web-based sustainability report as part of Alcan's key measures of sustainability. As of October 2003 the Business Groups have taken the lead in managing TARGET, Alcan's internationally recognized greenhouse gas management program. The program was ranked best in class globally by Sustainable Asset Management for inclusion in the Dow Jones Sustainability World Index. EHS FIRST sets clear Alcan standards outlined in a management system handbook, including mandatory EHS directives. With an internal gap-analysis tool all facilities were enabled to check compliance with the new standards and to plan the measures to fill the gaps by the end of 2004. By the end of 2003, 94% of sites completed the gap analysis. The continuous improvement process drives Alcan's businesses to reduce impacts while improving their competitive position and efficiency. Alcan's capital expenditures to protect the environment and improve working conditions were $71 million in 2003. EHS expenditures for 2004 and 2005, including Pechiney, are projected to be $137 million and $193 million, respectively. In addition, expenditures charged against income for environmental protection were $196 million in 2003, and are expected to be $222 million in 2004 and $238 million in 2005, including Pechiney.

Pechiney: Pechiney's Environment and Industrial Risk Management Department is responsible for defining Pechiney policy in these areas. The business divisions are responsible for implementation. Pechiney is subject to a broad range of environmental laws and regulations in each of the jurisdictions in which it operates. These laws and regulations impose increasingly stringent environmental protection standards regarding, among other things, air emissions, wastewater discharges, the use and handling of hazardous materials, waste disposal practices, and the remediation of environmental contamination. Pechiney applies the international standard ISO 14001 as the benchmark for its environmental protection management. A comprehensive training program complements this system, which is based on the standards of prevention, compliance with regulations and the Pechiney Continuous Improvement System. The objective is to certify the Group's main facilities by 2005. In 2003, two facilities were certified, Aluminum de Grèce (alumina and primary aluminum) and Issoire (aluminum conversion), bringing the number of ISO 14001 facilities up to 26. The year 2003 saw the first application of the voluntary commitment to reduce greenhouse gas emissions at Pechiney facilities in France. Recycling products after use and reducing waste are priorities for the European Commission and the European Parliament. Interim results concerning environmental matters at the end of 2003 were in line with the objective for 2003/2004. The aggregate amount of provisions to ensure environmental compliance, or in connection with the risk of environmentally-related legal proceedings, was accrued as of 31 December 2003. Safety is a top priority for Pechiney; it is one of the important criteria by which management is measured at all levels. The achievement of positive safety results is linked to compensation. Pechiney implements a very active risk prevention policy in the workplace that is based on a visible commitment of management, employee mobilization and clear principles of organization. Annual and multi-annual action plans are applied, monitored and updated by safety committees in each operating division and for each facility. Two mechanisms contribute decisively to the improvement of safety conditions:
-	standards that determine the minimum requirements for a task or a specific risk; and
-	audits of safety systems, standards and practices in the work environment.
An independent medical and toxicological council advises executive management on work-related and public health issues related to manufacturing activities and products. In particular, it monitors studies on the possible toxicity of aluminum.
G.	PROPERTIES
Alcan believes that its properties, including those of Pechiney, most of which are owned, are suitable and adequate for its operations.

H.	EMPLOYEES
Alcan: As at 31 December 2003, Alcan employees, not including Pechiney's, were located as follows: approximately 18,600 in North America, 23,200 in Europe, 3,400 in South America, and 6,800 in Asia, Pacific and other areas. A majority of the hourly-paid employees are represented by labour unions. There are 26 collective labour agreements in effect in Canada. Labour agreements for unionized employees at Alcan facilities in Quebec expire at the end of 2006 or in 2007. In British Columbia, the Collective Labour Agreement at Kitimat expires in 2005. In all other locations, collective agreements are negotiated on a site, regional or national level, and are of different durations. Pechiney: Following the Pechiney Combination, France became the country where Alcan employs the largest number of employees: about 2,200 before the Pechiney Combination and about 16,500 after the Pechiney Combination, in more than 30 Subsidiaries. Employment conditions are defined by French law and by four national collective agreements relating to various industrial sectors: chemicals, mechanics, plastic transformation and cardboard transformation. Additional specific agreements exist at each individual company. Pension liabilities are not included in collective agreements and result from specific individual contracts. Following the Pechiney Combination, Alcan employs 88,000 people in 63 countries.
I.	PATENTS, LICENSES AND TRADEMARKS
Alcan (including Pechiney): Alcan owns, directly or through Subsidiaries, a large number of patents in Canada, the U.S., the European Union as well as in other countries which relate to the products, uses and processes of its businesses. The life of a patent is most commonly 20 years from the filing of the patent application. Alcan is continually filing new patent applications. All significant patents will be maintained until their normal expiration. Therefore, at any point in time, the range of life of the Company's patents will be from one to 20 years. Alcan owns a number of trademarks that are used to identify its businesses and products. The Company's trademarks have a term of three to ten years. As a result, at any point in time, the Company will have trademarks at the end of their term and others with a full ten-year term. At the end of their term, significant trademarks will be renewed for a further three to ten years. Alcan has also acquired certain intellectual property rights under licenses from others for use in its businesses. Alcan's patents, licenses and trademarks constitute valuable assets; however, the Company does not regard any single patent, license or trademark as being material to its sales and operations viewed as a whole. The Company has no material licenses or trademarks the duration of which cannot, in the judgment of management, be extended or renewed as necessary.
J.	COMPETITION AND GOVERNMENT REGULATIONS
The aluminum and packaging businesses are highly competitive in price, quality and service. The Company experiences competition from a number of companies in all major markets. In addition, aluminum products face competition from products fabricated from several other materials such as plastic, steel, iron, copper, glass, wood, zinc, lead, tin, titanium, magnesium, cement and paper. The Company believes that its competitive standing in aluminum production is enhanced by its ability to supply its own power to many smelters at low cost.

The operations of the Company, like those of other international companies, including its access to and cost of raw materials and repatriation of earnings, may be affected by such matters as fluctuations in monetary exchange rates, currency and investment controls, withholding taxes and changes in import duties and import restrictions. Imports of ingot and other aluminum products into certain markets may be subject to import regulations and import duties. These affect the Company's sales realizations and may affect the Company's competitive position. Shipments of the Company's products are also subject to the anti-dumping laws of the importing country, which prohibit sales of imported merchandise at less than defined fair values.
ITEM 3 LEGAL PROCEEDINGS
A.	ENVIRONMENTAL MATTERS
1.	Cases
1.1	Alcan
PAS Site. The Company's U.S. Subsidiary, Alcan Aluminum Corporation ("Alcancorp"), and third parties are defendants in a lawsuit instituted in July 1987 by the U.S Environmental Protection Agency ("EPA") relating to the Pollution Abatement Services site, a third-party disposal site, in Oswego, New York ("PAS"). Alcancorp is alleged to have contaminated this site through the disposal of waste materials disposed by contractors employed by Alcancorp (and other companies). Alcancorp's defense is that the waste was not hazardous. In January 1991, the Federal District Court for the Northern District of New York found Alcancorp liable for a share of the clean-up costs for the site, and in December 1991 determined the amount of such share to be $3,175,683. Alcancorp appealed this decision to the United States Circuit Court of Appeals for the Second Circuit. In April 1993, the Second Circuit reversed the District Court and remanded the case for a hearing on what liability, if any, might be assigned to Alcancorp depending on whether Alcancorp can prove that waste did not contribute to the costs of remediation at the site. This matter was consolidated with another case, instituted in October 1991 by the EPA against Alcancorp in the Federal District Court for the Northern District of New York seeking clean-up costs in regard to the Fulton Terminals superfund site in Oswego County, New York, which is also owned by PAS. The remand hearing was held in October of 1999. The trial court re-instituted its judgment holding Alcancorp jointly and severally liable with other defendants. The amount of the judgment plus interest was $13.5 million as of December 2000. The case was appealed. In the first quarter 2003, the Second Circuit affirmed the decision of the trial court. Alcancorp sought a rehearing but the motion was denied. Alcancorp filed a petition for certiorari in U.S. Supreme Court, which was denied. Alcancorp has also been sued by other potentially responsible parties ("PRPs") at PAS seeking contribution for costs incurred in cleaning up the PAS site which are being contested.

Butler Tunnel Site. Alcancorp was a party in a 1989 EPA lawsuit before the Federal District Court for the Middle District of Pennsylvania involving the Butler Tunnel superfund site, a third-party disposal site. In May 1991, the Court granted summary judgment against Alcancorp in the amount of $473,790 for alleged disposal of hazardous waste. After unsuccessful appeals, in 1995 Alcancorp paid $652,371 representing the judgment amount plus interest and is disputing about $400,000 associated with that judgment, representing additional enforcement costs incurred after the date of the initial judgment in a separate lawsuit. In order to recover part of these amounts, Alcancorp instituted proceedings against several third parties alleged to have disposed of waste at the site. These proceedings were consolidated with an action filed by the EPA against Alcancorp for additional sums for further remedial activities at the Butler Tunnel site.

Butler Site. The United States filed a second cost recovery action against Alcan seeking recovery of expenses associated with the installation of a early warning system for potential future releases from the Butler site. The case has been held in abeyance since shortly after it was filed. Alcan has been unable to determine what, if any, exposure it may have for the costs associated with the system and the extent of the exposure.

Omega Chemical Site. In February 1996, the Company's U.K. Subsidiary, British Alcan Aluminum plc ("British Alcan"), sold its investment in Luxfer USA Limited. As part of the sale, British Alcan agreed to indemnify the purchaser for certain liabilities, including those arising out of the following proceeding. Luxfer is a participant in a joint defense group being sued by the EPA in regard to waste Luxfer sent, from 1976 to 1991, to the Omega chemical waste Superfund site, a third-party disposal site in Whittier, California. At various times during 1995, Luxfer contributed various amounts totaling $11,800 for defense group costs and the removal of waste from the site. Large waste generators are cleaning up the site. Luxfer, being a small contributor, is discussing settlement offers. In 2000, Luxfer and other members of the joint defense group entered into a consent decree with the EPA to complete the remediation.

Pennsauken Landfill. Alcancorp is a third party defendant in a suit seeking response costs initiated in December 1995 by the State of New Jersey alleging that a disposal company that had been used by Alcancorp disposed of hazardous material in a landfill in Pennsauken. Including Alcancorp, there are 277 third-party defendants in this action. Various discovery issues remain outstanding. In 2002, the court granted the third-party defendants the right to conduct depositions of the other party's experts. The discovery process continued in 2003.

Tri-Cities Site. In 1994 Alcancorp and other companies responded to an EPA inquiry concerning the shipment of old drums to Tri-Cities Inc. (New York). The company previously reprocessed barrels. In 1996 the EPA issued an administrative order directing the defendants to clean up the site. Alcancorp refused to participate claiming that the drums sent to Tri-Cities were empty at the time of delivery. The PRPs sent Alcancorp a settlement offer and proposed Consent Decree for Alcancorp to agree to join other PRPs in the clean-up. Alcancorp rejected the offer as it disagreed with the drum count attributed to it. In September 2002, notification was received from the EPA that it contended Alcancorp was responsible for response costs totaling $170,512 plus interest and future response costs for its violation of the administrative order. Alcancorp responded by a letter outlining the objections to the EPA's determination. The EPA has since indicated that the matter has been referred to the Department of Justice ("DOJ") for enforcement. Alcancorp has responded with a letter stating that EPA's claims are unsupported.

Lower Passaic River Initiative. In 2003, Alcancorp received a letter from the EPA regarding an investigation being launched into possible contamination of the Lower Passaic River in 1965. Alcancorp has been identified as a PRP arising from one of its plants in Newark, New Jersey which may have generated hazardous waste. A remedial investigation feasibility study is scheduled to be carried out over several years.

Quanta Resources Facility. In June 2003, the DOJ filed a Superfund costs recovery action in Federal Court for the Northern district of New York against Alcancorp and Quanta Resources, seeking unreimbursed response costs of $1.4 million, stemming from the disposal of rolling oil emulsion at a Mahler facility in Syracuse, New York. Parties are in the process of producing initial disclosures.

Sealand Site. New York State claims Alcancorp's waste at the Sealand, New York site is hazardous; Alcancorp disputes this. There are a series of PRPs. In 1993, Alcancorp declined a request to participate in a program to provide drinking water to area residents, contending that Alcancorp's waste did not cause or contribute to the harm caused at the site. In 2003, Alcan met with the DOJ and the EPA, who quantified potential liability of unreimbursed costs at $2.6 million.

Millville, New Jersey Plant. In 1997, Wheaton USA Inc. ("Wheaton"), a wholly-owned Subsidiary, began building new furnaces at its Millville, New Jersey glass plant that were alleged to violate air emission regulations. The New Jersey Department of Environmental Protection ("NJDEP") issued a citation for violation of permits. The EPA issued an information request to which Alcan responded. Wheaton made modifications to the two furnaces. Wheaton is awaiting a review and approval from the NJDEP. There were no further developments in 2003.

Clifton, New Jersey Facility. Lawson Mardon USA Inc. ("LM USA"), a wholly-owned Subsidiary, is undertaking a site investigation and clean-up of the land at its Clifton, New Jersey plant, in compliance with a NJDEP permit. No court action was brought. According to studies, offsite contamination was not a result of LM USA's operations. LM USA has reached an agreement with the NJDEP for alleged on-site contamination whereby LM USA would isolate the area and would monitor the ground water for two years. LM USA completed the remediation in 2003 and will now conduct ground water monitoring. Monitoring costs are estimated at $6,000 per quarter.

LM Trentesaux Site. In 1999, an investigation was carried out at the Lawson Mardon Trentesaux SA site ("LM Trentesaux"), a Subsidiary, at Tourcoing, France. The land was found to be contaminated by solvent, fuel and chemical products resulting from engraving and packaging activities. An estimate of the clean-up costs was established. The investigation was also conducted to determine whether the contamination was the sole responsibility of LM Trentesaux and whether the migration of the contamination was possible. Ground contamination by solvent was treated and further treatment for other substances may be required.

Marseilles Red Mud Remediation. In 1982, Alusuisse Lonza France SA ("ALF"), a subsidiary of Algroup, sold land in Marseilles, France, to the local community, which contained red mud deposits on two different sites. Buildings were erected on this land and issues have arisen as to the overall stability of the red mud mounds. In 1997, French law changed to have the responsibility for deposits lie with the originator and ALF paid $1.68 million for remediation. ALF has been engaged in litigation and appeals with government agencies for further remediation; ALF is trying to establish the partial responsibility of the local community. In 2002, the appeal court rejected ALF's position for the two sites. ALF has appealed the decision for one site and is awaiting judgment.

Formiga Solid Waste Remediation. The Company's Brazilian wholly-owned Subsidiary, Alcan Alumínio Do Brasil Ltda. ("Alcanbrasil") was sued by the Municipality of Formiga for inadequate disposal of solid waste from its flexible packaging plant. The waste was being disposed of a third party. Some of the waste was found in unauthorized landfills. The third party is also being sued but under Brazilian law, Alcanbrasil is jointly and severally responsible. In 2002, a settlement was reached where Alcanbrasil will not be liable for any damages if Alcanbrasil's waste is removed from the landfills. In 2003, the waste was completely removed to an authorized landfill and final approval is awaited from the environmental authorities.

Algoods Ontario Remediation. Beginning in 1995 environmental investigations have been conducted into the presence of oil, gasoline and volatile organic compounds ("VOCs") in the soil and groundwater at the Algoods plant site in Ontario, Canada and third party properties adjacent to this site. Algoods was sold in 1996 and under the terms of the agreement, the Company retains liability for this case. A remediation plan was approved with the Ministry of Environment ("MOE") for the oil removal and recovery is approximately 85% complete. A gasoline recovery system was commissioned by Alcan and accepted by the owner of the affected property. MOE requested and has received from Alcan a delineation study with respect to VOCs in the surrounding area. This report is currently under review by the MOE. An initial remediation plan for VOCs was implemented in 2003.

1.2 Pechiney

Howmet Sites. Under the stock purchase agreement between Pechiney and Blade Corporation for the divestiture of certain Pechiney subsidiaries (Pechiney Corporation, Howmet Corporation, Howmet Cercast) dated 12 October 1995, Pechiney agreed to indemnify Blade Corporation, without limitation in time or a ceiling on the indemnification amount, with respect to certain environmental matters ("Howmet Sites") that exceeded a reserve of $6 million on the pro-forma 1995 balance sheet of Pechiney. Alcoa, the legal successor in interest to Blade Corporation and beneficiary of the indemnification clause, asked Pechiney on 30 April 2002 to pay for the remediation costs exceeding the $6 million provision concerning the environmental risks at several sites.

Omega Chemical Sites. In addition to Alcan's defense of Luxfer at this site, Howmet is also named as a PRP at the Omega Chemical site. Howmet entered into a consent decree, the total cost of which is estimated at $15 million to all PRPs. Howmet recently entered into a revocable assignment of contribution claims in favour of the Omega Chemical PRP Group, LLC.

Dover, New Jersey Site. In 1997, Howmet notified Pechiney of high PCB readings at Dover, New Jersey. There are other possible environmental concerns at the Dover site as well. In April 1991, Howmet entered into an administrative order with the State of New Jersey for a remedial investigation/feasibility study. That process is not complete and a remedy has yet to be selected. Additionally, Howmet received oral notification in January 2004 that the State of New Jersey is seeking natural resource damages ("NRD") for claimed impact on the site groundwater. The State of New Jersey is thus asking for money damages for the impact on the groundwater separate and above the remediation costs.

Combe Fill South Landfill. In 1998, the U.S. and the New Jersey Department of Environmental Protection sued Howmet and other parties for damages and response costs in response to the environmental conditions at the Combe Fill South Landfill in New Jersey. The governments claim both past costs for remediation and future costs. An alternative dispute resolution process is underway under the supervision of the U.S. District Court for the District of New Jersey and the process will continue until August 2004. Howmet submitted its position paper on allocation on 15 January 2004. There are hundreds of parties involved in the suit.

Holden Mine Site. Holden Mine was an underground copper mine that Howe Sound Company operated from 1936 until 1957. It is located in a remote wilderness area in the Wenatchee National Forest in Washington State. The U.S. Forest Service, together with officials of Washington State and the EPA, requested the performance of a remedial investigation. An administrative order was entered in 1997. The remedial investigation identified several remedial scenarios with a wide range in cost. Total site costs (including investigation costs) and NRD will likely exceed $30 million. Pechiney does not yet have an agreement with the agencies on the remedy or NRD obtained. Pechiney submitted its final draft feasibility study in February 2004. No other PRPs are involved.

Blackbird Mine. In 1994 and 1995, the former Pechiney Corporation signed a consent decree, with the U.S. Forest Service, National Oceanic and Atmosphere Administration and the EPA as well as the State of Idaho and two administrative orders with the EPA for a remedial investigation/feasibility study and early action clean-up of the Blackbird Mine. Pechiney must pay a significant portion of the total cost of the Blackbird Mine clean-up. The U.S. must pay a smaller portion of the remediation expenses with a cap. The removal actions, which began in 1995, are largely but not entirely complete. The U.S. investigated arsenic contamination at neighboring Panther Creek Inn and a soil removal remediation was performed in 1998. In August 2002, the EPA issued its proposed remedial plan for Blackbird Mine, which includes copper and cobalt actions. In Spring 2003, the EPA issued a record of decision ("ROD"), which Pechiney views as unfavorable and costly. Pechiney is also trying to negotiate a modification of the consent decree to extend the time for achieving water quality standards from 2002 to 2005. Negotiations with the various agencies concerning the ROD and the Consent Decree were held during 2003. The U.S. also issued a unilateral administrative order ("UAO") on 11 July 2003. The UAO became effective 10 August 2003. The parties indicated their intent to comply on 14 August 2003. The EPA estimated the ROD remedy cost at $15.4 million present value in addition to what has already been paid. The EPA also demanded $ 25 million in financial assurance from the parties. Pechiney is vigorously opposing certain elements of the additional work. The U.S. District Court for the District of Idaho retains jurisdiction.

Tungsten Mine Site. In April 2000, the North Carolina Department of Environment & Natural Resources, Division of Waste Management sought cooperation for the removal of drummed hazardous substances and for monitoring, testing, analyzing and reporting on the Tungsten Mine Site, in Vance County, North Carolina. Pechiney is the successor to Haile Mining Company, which it is believed mined the site from approximately 1945 through the late 1950s. A first meeting of PRPs took place in October 2001. Discussions with the State concerning Tungsten Mine are still preliminary, and site assessment has not yet been completed. This is an administrative case only and, thus, does not involve any court action.

Pohatcong Valley Site. The U.S. Department of Interior notified Pechiney Plastic Packaging Inc. ("PPPI") on 19 November 1999 that it wanted to geophysically log certain wells at the Washington, N.J. facility as it seeks to identify possible contributors of a specific contaminant - TCE - to the Pohatcong Valley Superfund Site. This matter involves both an on-site remediation of the Washington Plant, which is near completion and a Superfund Site, which is in the early stages of investigation. PPPI was advised that the "logging" process was completed and in the summer of 2001, the EPA did some minor additional investigation at the plant site. The EPA has issued a draft but not a final remedial investigation report. Meanwhile, PPPI has performed an on-site remediation at the Washington plant. It has received a "no further action" letter from the State of New Jersey for certain areas and an approval letter dated 12 June 2002 from the State for certain additional work. Over time $1 million has been spent at the Washington facility for on-site work. This is an administrative case only and, thus, does not involve any court action.

2. Reviews and Remedial Actions

From time to time, the Company is subject to environmental reviews and investigations. The Company has established procedures for reviewing environmental investigations and any possible remedial action on a regular basis. Although the Company cannot reliably estimate all of the costs which may ultimately be borne by it, the Company has no reason to believe that any remedial action will materially impair its operations, materially affect its financial condition or materially affect the Company's liquidity.

B.	OTHER MATTERS
1.	Alcan

Powerex Litigation. In 1997, as part of the claim settlement arrangements related to the British Columbia Government's cancellation of the Kemano Completion Project, Alcan obtained the right to transfer a portion of a power supply contract with BC Hydro to a third party. Alcan sold the right to supply this portion to Enron Power Marketing Inc. ("EPMI"), a subsidiary of Enron Corporation ("Enron") for cash consideration. In order to obtain the consent of BC Hydro to this sale, Alcan was required to retain residual liability for EPMI's obligations arising from the supply contract, including in the event that EPMI became unable to perform. This contingent liability is subject to a maximum aggregate amount of $100 million, with mitigation and subrogation rights. On 2 December 2001, EPMI and Enron filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Powerex, the BC Hydro affiliate which now holds the rights to the power supply contract, maintains that it has terminated the power supply contract and as a result filed a claim for $100 million against Enron on 15 March 2002 as a necessary step prior to making the same claim against the Company. Enron did not respond to that claim and the Company received, on 22 March 2002, a demand for payment in the amount of $100 million from Powerex. On 17 January 2003, the Company received a decision following arbitration hearings held in December 2002 on a contractual dispute between Powerex and Alcan. The arbitrator confirmed Powerex's claim for $100 million. In February 2003, Alcan filed an application in Oregon to set aside the arbitration award and Powerex also filed certain motions ("U.S. Proceedings"). Powerex has filed a petition in the British Columbia Supreme Court for judgment in the amount of the award and a declaration that the award is enforceable in the same manner as a judgment of the Court ("B.C. Proceedings"). In July 2003, the B.C. Supreme Court stayed the B.C. Proceedings pending a decision of the U.S. Federal Court in the U.S. Proceedings. In August 2003, the various Alcan and Powerex summary motions were heard before a magistrate judge of the U.S. Federal Court in Portland, Oregon. In September 2003, the magistrate judge issued various recommendations, including recommendations that Alcan's motions for judicial review be dismissed. Alcan objected to the recommendations and Powerex filed a reply to Alcan's objections. In October 2003, the recommendations, objections and reply were forwarded to an Article III judge of the U.S. Federal Court. On 11 December 2003, the Article III judge confirmed the recommendations of the magistrate judge. Alcan has appealed this decision. The hearing of the B.C. Proceeding is scheduled to take place in April 2004. A provision of $100 million was recorded in the fourth quarter of 2002 and is still in place.

2. Pechiney

Kaiser Aluminum Corporation. On 21 January 2004 Kaiser Aluminum Corporation and affiliated entities filed a motion before the U.S. Bankruptcy Court for the District of Delaware seeking to reject the five-year alumina supply agreement between Kaiser Aluminum International, Inc. ("KAII") and Pechiney Trading Company ("PTC"). The agreement provides for the supply of 300,000 tonnes of alumina a year to PTC, from January 2002 to the end of 2006. KAII assumed the agreement after it had entered into U.S. Chapter 11 debtor protection status. The Court specifically authorized the assumption of the agreement under applicable provisions of the U.S. Bankruptcy Code at the request of the Kaiser debtors. PTC believes that the agreement is valid and enforceable, and has filed objections to the motion as well as several motions of its own against the Kaiser entities. Neither the likelihood of nor the amount of any financial impact can currently be determined.

The Company is also involved in ordinary course litigation in jurisdictions throughout the world, none of which, in the Company's belief, could materially impair its operations, materially affect its financial condition or materially affect the Company's liquidity.

ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

The Company has not submitted any matter to a vote of security holders, through solicitations of proxies or otherwise, during the fourth quarter of the year ended 31 December 2003.

PART II

ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The information required is incorporated by reference to the Annual Report. See section entitled "Common Shares" on page 83.

The number of holders of record of Common Shares on 3 March 2004 was approximately17,882. For information on the effect of the Pechiney Combination on the Registrant's common equity, see description of the "Pechiney Acquisition" under Items 1 and 2 (B)(2.2.1).

While the Company intends to pursue a policy of paying quarterly dividends, the level of future dividends will be determined by the Board of Directors in light of earnings from operations, capital requirements and the financial condition of the Company. The Company's cash flow is generated principally from operations and also by dividends and interest payments from Subsidiaries, Joint Ventures and Related Companies. These dividend and interest payments may be subject, from time to time, to regulatory or contractual restraints, withholding taxes and foreign governmental restrictions affecting repatriation of earnings.

Dividends paid on Common Shares held by non-residents of Canada will generally be subject to Canadian withholding tax which is levied at the basic rate of 25%, although this rate may be reduced depending on the terms of any applicable tax treaty. For residents of the U.S., the treaty-reduced rate is currently 15%.

Equity Compensation Plan Information

The following table presents information related to securities to be issued upon the exercise of outstanding options, warrants and rights pursuant to equity compensation plans that have been approved by security holders, as well as plans that have not been approved by security holders as at 31 December 2003.

	Number of securities to be issuedupon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights	Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)	(c)
Equity compensation plans approved by security holders.........................................................
Alcan Executive Share Option Plan	9,565,684	CAN. $47.49	14,709,676
Pechiney Option Plans	3,888,607	€ 34.71	0
Equity compensation
plans not approved
by security holders.....................................................	N/A	N/A	N/A
Total.................................................	13,454,291	N/A	14,709,676

In relation to the Pechiney Option Plan, Alcan and Pechiney agreed on the terms of a liquidity agreement which has been made available to beneficiaries of Pechiney subscription and purchase options (''Liquidity Agreement''). The Liquidity Agreement allows the holders of Pechiney options to either (a) exchange their Pechiney shares resulting from the exercise of the Pechiney options for Alcan Common Shares on the basis of a ratio equivalent to the consideration offered under Alcan's public offer for Pechiney or (b) give up their Pechiney options and receive new options to subscribe for Alcan common shares on a basis of a ratio equivalent to the consideration offered under Alcan's public offer for Pechiney. Upon the clearance by the French Conseil des marchés financiers of Alcan's initial public offer for Pechiney securities on 16 July 2003, the Pechiney options became fully vested.

Sales of Unregistered Securities

Equity Issuance. In connection with the Pechiney Combination, the Company issued to Pechiney security holders 42,413,105 Common Shares on 15 December 2003 and 2,082,075 Common Shares on 15 January 2004. Common Shares issued to holders of Pechiney common shares and Pechiney Bonus Allocation Rights located in the United States and Canada and to all holders of Pechiney American Depositary Shares, wherever located, were registered under the Securities Act of 1933, as amended (the "Securities Act"), while Common Shares issued to holders of Pechiney common shares and Pechiney Bonus Allocation Rights located in France and located outside of France, Canada and the United States were not so registered, in reliance upon the exemption from registration provided by Regulation S under theSecurities Act. In consideration of the 15 December 2003 issuance and the payment of $3,544 million, the Company received 77,950,776 Pechiney common shares (including Pechiney common shares underlying the Pechiney American Depositary Shares), 1,598 Pechiney Bonus Allocation Rights and 7,722,915 Pechiney OCEANEs (which were purchased for cash). In consideration of the 15 January 2004 issuance and the payment of $158 million, the Company received 3,826,638 Pechiney common shares (including Pechiney common shares underlying the Pechiney American Depositary Shares), 19 Pechiney Bonus Allocation Rights and 149,072 Pechiney OCEANEs (which were purchased for cash).

ITEM 6 SELECTED FINANCIAL DATA

SELECTED HISTORICAL FINANCIAL DATA

(in millions of Dollars except for per Share amounts)

	Years ended 31 December
	2003	2002	2001	2000	1999
Sales and operating revenues	13,640	12,296	12,385	9,097	7,324
Net income (Canadian GAAP)	167	374	2	610	448
Net income (loss) (U.S. GAAP)	77	(336)	(54)	606	455
Total assets	31,957	17,598	17,541	18,389	9,839
Long-term debt (including current portion)	7,960	3,481	3,536	3,528	1,322
Net income (loss) per share (Canadian GAAP) - Basic	0.50	1.15	(0.02)	2.42	2.01
Net income (loss) per share (Canadian GAAP) - Diluted	0.50	1.14	(0.02)	2.42	2.01
Net income (loss) per share (U.S. GAAP)*	0.22	(1.06)	(0.19)	2.40	2.04
Cash dividends per share	0.60	0.60	0.60	0.60	0.60
* Basic and diluted.

Commencing 2001, the Company retroactively adopted the recommendations of the Canadian Institute of Chartered Accountants ("CICA") concerning earnings per share. The standard requires the disclosure of the calculation of basic and diluted earnings per share and the use of the treasury stock method for calculating the dilutive impact of stock options.

Commencing 2001, the Company adopted the recommendations of the CICA concerning business combinations. All business combinations initiated on or after 1 July 2001 are now required to be accounted for under the purchase method.

Commencing 2002, the Company adopted the recommendations by the CICA concerning goodwill and other intangible assets. Under this standard, goodwill and other intangible assets with an indefinite life are no longer amortized but are carried at the lower of carrying value and fair value. Goodwill and other intangible assets with an indefinite life are tested for impairment on an annual basis.

Commencing 2002, the Company retroactively adopted, with restatement of prior years back to 1999, the recommendations of the CICA concerning deferred foreign exchange translation gains and losses. Under this standard, the Company no longer amortizes the exchange gains and losses arising from the translation of long-term foreign currency denominated monetary assets and liabilities that have a fixed or ascertainable life extending beyond the end of the following fiscal year. These exchange gains and losses are now recognized in income immediately.

Commencing 2002, the Company adopted the recommendations of the CICA concerning disclosure of stock options and other stock-based compensation. This standard encourages but does not require that the fair value method be used for transactions with employees. If the fair value method is not used, note disclosure of pro forma net income and net income per common share - basic and diluted is required as if the fair value based method had been applied to all stock option awards.

Commencing 2003, the Company early adopted the recommendations of the CICA concerning impairment of long-lived assets. Under this standard, an impairment loss is recognized when the carrying amount of a long-lived asset held for use is not recoverable and exceeds its fair value. No impairment charges were recorded upon adoption of this new standard.

Commencing 2003, the Company early adopted the recommendations of the CICA concerning the disposal of long-lived assets and discontinued operations. Under this standard, a long-lived asset to be disposed of by sale is measured at the lower of its carrying amount or fair value less cost to sell, and is not depreciated while classified as held for sale. Assets and liabilities classified as held for sale are reported as assets held for sale and liabilities of operations held for sale on the balance sheet. A long-lived asset to be disposed of other than by sale, such as abandonment, before the end of its previously estimated useful life, is classified as held for use until it is disposed of and depreciation estimates revised to reflect the use of the asset over its shortened useful life. Also, the standard requires that the results of operations of a component of an enterprise, that has been disposed of either by sale or abandonment or is classified as held for sale, be reported as discontinued operations if the operations and cash flows of the component have been, or will be, eliminated from the ongoing operations as a result of the disposal transaction and the Company will not have any significant continuing involvement in the operations of the component after the disposal transaction.

Commencing 2003, the Company adopted the guidelines of the CICA concerning the disclosure of guarantees, which addresses disclosure requirements for a guarantor that issues a guarantee.

In April 2003, the Company adopted the Emerging Issues Committee abstract of the CICA concerning accounting for severance and termination benefits. Under this abstract, contractual termination benefits and severance costs are recognized as an expense when management, having the appropriate level of authority, approves a decision to terminate employees. Non-contractual termination benefits are recognized as an expense when communicated to employees. Retention bonuses are recognized as an expense over the required future service period.

In April 2003, the Company adopted the Emerging Issues Committee abstract of the CICA concerning accounting for costs associated with exit or disposal activities (including costs incurred in a restructuring). This abstract requires that a liability associated with an exit or disposal activity be recognized when the liability is incurred rather than at the date of the Company's commitment to an exit plan.

See Annual Report, page 64, Note 8 to the Consolidated Financial Statements for a comparison, for certain items listed, of the amounts as reported by the Company under Generally Accepted Accounting Principles ("GAAP") in Canada with amounts that would have been reported under U.S. GAAP.

ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

The section entitled "Management's Discussion and Analysis" in the Annual Report, page 28, is incorporated by reference.

Other Specified Items of $40 million after tax are detailed on page 32 of the Annual Report.

As the Company follows Canadian GAAP, reference should be made to Note 8 to the Consolidated Financial Statements on page 64 of the Annual Report which compares, for certain items listed, the amounts as reported with the amounts that would have been reported under U.S. GAAP. Beginning in 2001, the Company adopted, for supplementary U.S. GAAP reporting purposes only, Financial Accounting Standards Boards Statements 133 and 138. These standards require that all derivatives be recorded in the financial statements and valued at fair value.

The Company's measure of the profitability of its operating segments is referred to as business group profit ("BGP"). BGP comprises earnings before interest, income taxes, minority interests, depreciation and amortization and excludes certain items, such as corporate costs, asset impairments and Other Specified Items, that are not under the control of the Business Groups. These excluded items are managed by the Company's head office, which focuses on strategy development and oversees governance, policy, legal, compliance, human resources and finance matters.

ITEM 7A QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Changes in interest rates, foreign exchange rates and the market price of aluminum can impact on the Company's (including Pechiney's) cash flow. See risk factors on page 4 of this report.

Interest Rates

The impact of a 10% increase in interest rates on the Company's variable rate debt outstanding at 31 December 2003 net of its invested surplus cash and time deposits at 31 December 2003 would be to reduce net income by $5 million. Transactions in interest rate financial instruments for which there is no underlying interest rate exposure to the Company are prohibited. For accounting policies for interest rate swaps used to hedge interest costs on certain debt, see page 55 of the Annual Report.

Currency Derivatives

The schedule below presents fair value information and contract terms relevant to determining future cash flows categorized by expected maturity dates of the Company's currency derivatives (principally forward and option contracts) outstanding as at 31 December 2003.

In US$ millions, except for average contract rate
		2004	2005	2006	2007	2008	2009	Total Nominal Amount	Fair  Value
FORWARD CONTRACTS
To purchase USD against the foreign currency
CHF	Nominal amount	20	29	16	2	1	1	69	(11)
	Average contract rate	1.572	1.387	1.336	1.287	1.261	1.238
GBP	Nominal amount	11	8	3	-	-	-	22	-
	Average contract rate	1.740	1.686	1.587	-	-	-
To sell USD against the foreign currency
AUD	Nominal amount	118	-	-	-	-	-	118	31
	Average contract rate	0.577	-	-	-	-	-
GBP	Nominal amount	6	1	-	-	-	-	7	1
	Average contract rate	1.5088	1.4068	-	-	-	-
BRL	Nominal amount	2	-	-	-	-	-	2	-
	Average contract rate	2.9	-	-	-	-	-
EUR	Nominal amount	195	63	20	9	-	-	287	43
	Average contract rate	1.1131	0.9713	0.8968	1.0454	-	-
To sell EUR against the foreign currency
USD	Nominal amount	352	49	13	4	8	-	426	(32)
	Average contract rate	1.164	1.099	1.059	0.975	1.076	-
USD	Nominal amount	-	-	1,256	-	-	-	1,256	(44)
	Average contract rate	-	-	1.1984	-	-	-	-
CHF	Nominal amount	41	10	8	4	4	3	70	-
	Average contract rate	1.5353	1.5111	1.4872	1.4610	1.4430	1.4266
ZAR	Nominal amount	30	6	-	-	-	-	36	-
	Average contract rate	8.5896	8.3049	-	-	-	-
To buy EUR against the foreign currency
GBP	Nominal amount	55	3	-	-	-	-	58	-
	Average contract rate	0.7112	0.7133	-	-	-	-
CHF	Nominal amount	2	-	-	-	-	-	2	-
	Average contract rate	1.5112	-	-	-	-	-
JPY	Nominal amount	15	-	-	-	-	-	15	1
	Average contract rate	130.1	-	-	-	-	-
OTHER	Nominal amount	63	-	-	-	-	-	63	-
To buy CHF against other foreign currency
OTHER	Nominal amount	1	-	-	-	-	-	1	-
To buy GBP against other foreign currency
OTHER	Nominal amount	36	-	-	-	-	-	36	-
OPTIONS
To sell USD against the foreign currency
AUD	Nominal amount	70	-	-	-	-	-	70	16
	Average contract rate	0.5643	-	-	-	-	-
GBP	Nominal amount	9	-	-	-	-	-	9	-
	Average contract rate	1.7100	-	-	-	-	-
EUR	Nominal amount	325	-	-	-	-	-	325	51
	Average contract rate	0.9418	-	-	-	-	-

In the second quarter of 2003, the Company changed the disclosure alternative for reporting currency derivatives from sensitivity analysis to fair value presentation. Information for the Company's currency derivatives outstanding as at 31 December 2002 is presented below for comparative purposes. The reason for the change is that the fair value presentation provides greater detail regarding the Company's currency derivatives.

In US$ millions, except for average contract rate
		2003	2004	2005	2006	2007	2008	2009	Total Nominal Amount	Fair Value
To purchase USD against the foreign currency
CHF	Nominal amount	60	18	5	3	-	-	-	86	(5)
	Average contract rate	1.085	1.460	1.203	1.190	-	-	-
GBP	Nominal amount	15	-	-	-	-	-	-	15	(1)
	Average contract rate	1.541	-	-	-	-	-	-
To sell USD against the foreign currency
AUD	Nominal amount	186	122	-	-	-	-	-	308	9
	Average contract rate	0.532	0.550	-	-	-	-	-
BRL	Nominal amount	29	-	-	-	-	-	-	29	(1)
	Average contract rate	3.400	-	-	-	-	-	-
To purchase EUR against the foreign currency
GBP	Nominal amount	22	1	-	-	-	-	-	23	-
	Average contract rate	0.641	0.637	-	-	-	-	-
To sell EUR against the foreign currency
USD	Nominal amount	231	16	4	4	3	2	-	260	(10)
	Average contract rate	0.977	0.953	0.959	0.960	0.963	0.968	-
CHF	Nominal amount	128	-	-	-	-	-	-	128	-
	Average contract rate	1.457	-	-	-	-	-	-

Any negative impact of currency movements on the currency contracts that the Company has taken out to hedge identifiable foreign currency commitments to purchase or sell goods and services, would be offset by an equal and opposite favourable exchange impact on the commitments being hedged. Transactions in currency related financial instruments for which there is no underlying foreign currency exchange rate exposure to the Company are prohibited. For accounting policies relating to currency contracts, see page 54 of the Annual Report.

Derivative Commodity Contracts

The effect of a reduction of 10% in aluminum prices on the Company's aluminum forward and options contracts outstanding at 31 December 2003 would be to reduce net income over the period ending December 2005 by approximately $26 million ($11 million in 2004 and $15 million in 2005). These results reflect a 10% reduction from the 31 December 2003, three-month LME aluminum closing price of $1,600 per tonne and assume an equal 10% drop has occurred throughout the aluminum forward price curve existing as at 31 December 2003. The Company's aluminum forward contract positions, producing the above results, are taken out to hedge future purchases of metal that are required for firm sales and purchases commitments to fabricated products customers and to hedge future sales. Consequently, any negative impact of movements in the price of aluminum on the forward contracts would be offset by an equal and opposite impact on the sales and purchases being hedged.

Transactions in metal related financial instruments for which there is no underlying metal price exposure to the Company are prohibited, except for a small trading portfolio of metal forwards not exceeding 24,000 tonnes, which is marked to market and which includes Pechiney. In addition, see page 48 of the Annual Report.

ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The information required is incorporated by reference to the Annual Report, Consolidated Financial Statements and Notes thereto on pages 51 to 99 and the "Auditors' Report" on page 50 and the section entitled "Quarterly Financial Data" on page 100.

The location of Financial Statements and other material required under this Item is found under Item 15 of this report.

ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

The Company has nothing to report under this Item.

ITEM 9A CONTROLS AND PROCEDURES

(a) Evaluation of Disclosure Controls and Procedures:

As of 31 December 2003, an evaluation was carried out under the supervision and with the participation of the Company's management, including the Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of Alcan's disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934). This evaluation extended to the disclosure controls and procedures in place at Pechiney which became a Subsidiary on 15 December 2003. As a result of the Pechiney Combination, Alcan's disclosure controls and procedures include those of Pechiney. Pechiney's disclosure controls and procedures, which differ in certain respects from those in the rest of Alcan, are being aligned with those of Alcan as part of the post-acquisition integration process. Based upon the evaluation, the Chief Executive Officer and Chief Financial Officer concluded that Alcan's disclosure controls and procedures were effective.

(b) Changes in Internal Control over Financial Reporting:

The Pechiney Combination resulted in certain changes to Alcan's internal controls over consolidated financial reporting. The operating results in the Consolidated Financial Statements exclude the results of Pechiney, but other elements of financial reporting have changed, including in relation to the balance sheet, information on cash flows and certain Notes to the financial statements for the year ended 31 December 2003. Pechiney internal controls over financial reporting are being aligned with those of Alcan as part of the post-acquisition integration process.

PART III

Information in this part is based on information contained in the Company's Proxy Circular dated 3 March 2004.

ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

A. IDENTIFICATION OF DIRECTORS

Alcan has a Worldwide Code of Employee and Business Conduct that governs all employees of Alcan as well as the Directors. As an annex to the Code and supplemental thereto, the Company has adopted a Code of Ethics for Senior Financial Officers including the CEO, the Chief Financial Officer and Controller.

The term of office of each Director runs from the time of his or her election to the next succeeding annual meeting or until he or she ceases to hold office as such.

The following are nominees for election as Directors:

ROLAND BERGER, 66, Director since 2002. Mr. Berger is non-executive chairman of Munich-based Roland Berger Strategy Consultants, one of the leading global strategy consultancies. In 1967 he founded this consulting firm which has become a world leader. He is a member of various supervisory boards and consultant groups, pursues extensive commitments in the public sector and is an expert on corporate management and general economic and social issues.

(1), (3), (5)

L. DENIS DESAUTELS, O.C., F.C.A., 60, Director since 2003. Mr. Desautels is executive-in-residence at the School of Management of the University of Ottawa. He was Auditor General of Canada from 1991 to 2001, prior to which he had been a senior partner of the accounting firm of Ernst & Young LLP. Mr. Desautels is chairman of the Laurentian Bank of Canada, a director of The Jean Coutu Group (PJC) Inc., a leading distributor of pharmaceuticals and related products, and of Bombardier Inc. and a member of the Accounting Standards Oversight Council of the Canadian Institute of Chartered Accountants.

(1), (2*), (3)

TRAVIS ENGEN, 59, Director since 1996. See Item 10 (B) ("Identification of Executive Officers") below.

L. YVES FORTIER, C.C, Q.C., 68, Director since 2002. Mr. Fortier is Chairman of the Board of Alcan and is chairman and a senior partner of the law firm Ogilvy Renault in Montreal since 1992. From 1988 to 1992, he was Ambassador and Permanent Representative of Canada to the United Nations. He is also governor of Hudson's Bay Company and a director of Nortel Networks Corporation, NOVA Chemicals Corporation and the Royal Bank of Canada. Mr. Fortier is a trustee of the International Accounting Standards Committee.

(1*), (4)

JEAN-PAUL JACAMON, 56, Director since 2004. Mr. Jacamon is non-executive chairman of Bonna Sabla, a leading manufacturer of precast concrete products, and of Gardiner Group, a distributor of electronic and surveillance systems. He was previously chief operating officer and director of Schneider Electric from 1996 to 2002. He is also a director of Le Carbone Lorraine, a world specialist in carbon and graphite products and their application, STACI, a leader in computer software for business to business on the web, and AMEC plc, an international engineering services company. He is also chairman of Eureka (a European governmental organization responsible for research and development projects). Mr. Jacamon has served on the Pechiney board of directors since 2002.

(1), (3)

WILLIAM R. LOOMIS, JR., 55, Director since 2002. Mr. Loomis is in the graduate PhD. Program at the University of California, Santa Barbara. He is limited managing director of Lazard LLC, where he was formerly chief executive officer from November 2000 to December 2001. He was previously managing director of Lazard LLC from June 1995 to November 2000. He is a director of Ripplewood Holdings LLC, an investment firm.

(1), (2), (4)

YVES MANSION, 53, Director since 2004. Mr. Mansion is chief executive officer of Société Foncière Lyonnaise since March 2002 and a member of the French Collège de l'Autorité des marchés financiers since November 2003. He was group managing director of Assurances Générales de France from 1990 to 2001. Mr. Mansion is a member of the supervisory board of Euler Hermes and deputy director of l'Entreprise de Recherche et d'activités pétrolières. Mr. Mansion has served on the Pechiney board of directors since 1994.

(1), (2)

CHRISTINE MORIN-POSTEL, 57, Director since 2003. Mrs. Morin-Postel was, from September 2000 until 2003, executive vice president in charge of human resources at Suez Group. She was previously chief executive officer of Société Générale de Belgique from 1998 to 2001. Mrs. Morin-Postel is a director of Arlington Capital Europe, 3i Group plc, a world leader in venture capital, and Pilkington plc, a world leader in manufacturing of glass and glazing products.

(1), (2)

J.E. NEWALL, O.C., 68, Director since 1985. Mr. Newall is chairman of NOVA Chemicals Corporation since 1998. He is also chairman of Canadian Pacific Railway Limited since 2001; he was vice-chairman and chief executive officer of NOVA Corporation from 1991 to 1998. He is a director of Maple Leaf Foods Inc. and the Royal Bank of Canada.

(1), (3*)

GUY SAINT-PIERRE, C.C., 69, Director since 1994. Mr. Saint-Pierre was chairman of the board of the Royal Bank of Canada until his retirement on 27 February 2004. He was president and chief executive officer of SNC-Lavalin Group Inc., a leading engineering-construction firm, from 1989 to 1996 and chairman from 1996 to 2002. Mr. Saint-Pierre is a director of General Motors of Canada and the Institute for Research on Public Policy.

(1), (2), (3), (5)

GERHARD SCHULMEYER, 65, Director since 1996. Mr. Schulmeyer is professor of practice at the MIT Sloan School of Business since 2002. From 1998 until 2001, he was president and chief executive officer of Siemens Corporation, a leading company in steel, capital goods and services. He serves on the boards of Zurich Financial Services, Ingram Micro Inc., and Korn/Ferry International as well as the international advisory board of Banco Santander Central Hispano.

(1), (2), (4), (5*)

PAUL M. TELLIER, P.C., C.C., Q.C., 64, Director since 1998. Mr. Tellier is president and chief executive officer and a director of Bombardier Inc. >From 1992 to 2002, he was president and chief executive officer of the Canadian National Railway Company. He is a director of McCain Foods, Bell Canada and BCE Inc. He is vice-chairman of the Canadian Council of Chief Executives and former chairman of the Conference Board of Canada.

(1), (2), (4*)

MILTON K. WONG, C.M., 65, Director since 2003. Mr. Wong is chairman of HSBC Asset Management (Canada) Limited since 1996 and Chancellor of Simon Fraser University in British Columbia since June 1999. He serves as a director on the boards of the Aga Khan Foundation Canada, the Canada-U.S. Fulbright Program, The Canadiana Fund, The Canadian Institute for Advanced Research, Genome BC, Mr. and Mrs. P.A. Woodward's Foundation, the Pierre Elliott Trudeau Foundation and Stem Cell Network. He is the founder and past-chairman of The Laurier Institution, a non-profit organization for advancing knowledge of the economics of cultural diversity.

(1), (4)

Committee Memberships

1. Corporate Governance

2. Audit

3. Human Resources

4. Environment, Health & Safety

5. Nominating

* Committee Chairman

B. IDENTIFICATION OF EXECUTIVE OFFICERS

The following is certain information with respect to Alcan's Executive Officers:

TRAVIS ENGEN, 59, President and Chief Executive Officer and Director since 1996. Mr. Engen has been President and CEO of Alcan since March 2001. Prior to joining the Company on 12 March 2001, Mr. Engen was chairman and chief executive of ITT Industries, Inc. from 1995 until 2001. He is a member of the U.S. Government's Defense Business Board. He is a director of Lyondell Chemical Company and the Canadian Council of Chief Executives and is chairman of the International Aluminium Institute.

RICHARD B. EVANS, 56, Executive Vice President, Office of the President. Mr. Evans has held this position since 1 January 2002 and oversees three of Alcan's six Business Groups: Primary Metal, Bauxite and Alumina, and Engineered Products. Prior to taking on this role, Mr. Evans was based in Zurich and was responsible for the integration of the Company and Algroup following the Algroup Combination. He has held several positions within the Company: Executive Vice President, President, Aluminum Fabrication, Europe (March 1999), Executive Vice President, Fabricated Products-North America and President of Alcan Aluminum Corporation (July 1997) and Senior Advisor, Corporate Development (January 1997). Prior to joining the Company in January 1997, Mr. Evans held senior management positions with Kaiser Aluminum & Chemical Corporation. Mr. Evans is a director of Bowater Incorporated.

BRIAN W. STURGELL, 54, Executive Vice President, Office of the President. Mr. Sturgell has held this position since 1 January 2002 and oversees three of Alcan's six Business Groups: Rolled Products Americas and Asia, Rolled Products Europe, and Packaging. He has held several positions with the Company: Executive Vice President, Aluminum Fabrication, Americas and Asia (November 2000), Executive Vice President, Corporate Development (January 1999), Executive Vice President, Asia/Pacific (July 1997) and Executive Vice President, Fabricated Products, North America and President of Alcan Aluminum Corporation (1996).

GEOFFERY E. MERSZEI, 52, Executive Vice President and Chief Financial Officer. Mr. Merszei joined the Company in September 2001. Prior to his current position, he was vice president and treasurer of The Dow Chemical Company. He worked for over 20 years in senior financial positions with Dow.

DANIEL GAGNIER, 57, Senior Vice President, Corporate and External Affairs. Mr. Gagnier's responsibilities include corporate communications, government relations and environment, health and safety. Mr. Gagnier was appointed Vice President, Corporate Affairs, in December 1994, and in 1995 his responsibilities were expanded to include environment, occupational health and safety issues for Alcan on a worldwide basis. Prior to joining Alcan, Mr. Gagnier held senior administrative positions with the Government of Canada.

DAVID L. McAUSLAND, 50, Senior Vice President, Mergers and Acquisitions and Chief Legal Officer. Mr. McAusland has held this position since October 2000 and his responsibilities include worldwide legal and regulatory affairs, mergers, acquisitions and major transactions as well as corporate development initiatives. He joined the Company in June 1999 as Vice President, Chief Legal Officer and Secretary. Prior to joining, he was managing partner at Byers Casgrain, a Montreal law firm, and was president of the Montreal Board of Trade. Mr. McAusland is a director of Cogeco Inc., Cogeco Cable Inc. and Cascades Inc.

GASTON OUELLET, 61, Senior Vice President, Human Resources. Mr. Ouellet has held this position since October 2000. He was appointed Vice President, Human Resources in April 1993. Mr. Ouellet joined the Company in 1967.

MICHAEL HANLEY, 38, Senior Vice President, Alcan Inc., President and Chief Executive Officer, Alcan Bauxite and Alumina. Mr. Hanley has held this position since 1 January 2002. He has held several positions with the Company: Vice President, Investor Relations (September 2000), Vice President and Assistant Financial Controller, Global Fabrication (July 1999) and Director, Finance, Bauxite, Alumina and Chemicals Group (June 1998). Prior to joining the Company in June 1998, Mr. Hanley was vice president and chief financial officer of Gaz Metropolitain Inc.

CYNTHIA CARROLL, 47, Senior Vice President, Alcan Inc., President and Chief Executive Officer, Alcan Primary Metal. Mrs. Carroll has held this position since 1 January 2002 and her responsibilities include Alcan primary metal facilities and power generation installations. She has held several positions with the Company: Vice President, President Bauxite, Alumina and Specialty Chemicals (1999), Managing Director of Aughinish Alumina Limited (1996) and Vice President/General Manager of Alcan Foil Products (1991).

MARTHA FINN BROOKS, 45, Senior Vice President, Alcan Inc., President and Chief Executive Officer, Alcan Rolled Products Americas and Asia. Mrs. Brooks joined the Company in this capacity on 1 August 2002. Prior to joining the Company, she was vice president, engine business, marketing, sales and engineering worldwide at Cummins Inc. During her 16 years with her previous employer, she held various senior positions in business development, marketing, sales and general management positions. Mrs. Brooks is a director of International Paper Co.

CHRISTOPHER BARK-JONES, 57, Senior Vice President, Alcan Inc., President and Chief Executive Officer, Alcan Rolled Products, Europe. Mr. Bark-Jones has held this position since 1 January 2002. Mr. Bark-Jones has held several positions with the Company: Vice President, Corporate Development and Chief Financial Officer, Alcan Europe (August 2000), Chairman and Chief Executive Officer of Indian Aluminum Company, Limited (1998) and Chief Financial Officer, Europe, Rolled Products (1996).

MICHEL JACQUES, 51, Senior Vice President, Alcan Inc., President and Chief Executive Officer, Alcan Engineered Products. Mr. Jacques has held this position since 3 December 2003. Prior to the Pechiney Combination, Mr. Jacques was Vice President, Strategic Management Support, a position he held since 1 January 2002 and assisted the Office of the President and the executive management team in addressing high value at stake issues and providing expertise to business groups. He has also held various positions with the Company: Director, Corporate Development (September 2000), Vice President, Metal Management, Business Planning and Development, Alcan Europe (1997), and Director, Metal Management, Logistics and Information Technology (September 1996).

CHRISTEL BORIES, 39, Senior Vice President, Alcan Inc., President and Chief Executive Officer, Alcan Packaging. Mrs. Bories has held this position since 3 December 2003. She joined Pechiney in April 1995 as Senior Vice President of Strategy and Control, and Secretary to the Executive Committee. In 1998 she became Executive Vice President, member of the Executive Committee of Pechiney. In January 1999, she was appointed head of the Packaging Sector of Pechiney. She also supervised Pechiney's General Procurement activities.

JEAN-DOMINIQUE SENARD, 50, Senior Vice President, Alcan Inc., responsible for Alcan Primary Metal, Europe and Africa. Mr. Senard has held this position since 3 December 2003. He joined Pechiney in October 1996 as Chief Financial Officer and member of Pechiney's Executive Committee. He was appointed head of Pechiney's Primary Aluminum in June 2001 and then head of the Primary Aluminum sector in 2003. He also supervised Pechiney's Energy, Environment and Industrial Safety and Information Systems departments.

PIERRE VAREILLE, 46, Senior Vice President, Alcan Inc. Mr. Vareille has held this position since 3 December 2003. Prior to the Pechiney Combination, he was President then CEO of GFI Aerospace, a company specialized in fasteners for Aerospace and High Tech industries based in Europe, the USA and China, from 1995 to 1999. He joined Faurecia in 1999 as a member of the Executive Committee and served as the CEO of the Exhaust Systems Business Group. He joined Pechiney in June 2002 as Senior Vice President of the Aerospace, Transportation and Industry Division, within the Aluminum Sector of Pechiney. He was appointed member of the Executive Committee of Pechiney in December 2002, and then head of the Aluminum conversion sector and Member of the Executive Committee of Pechiney in March 2003.

PIERRE ARSENEAULT, 47, Vice President, Alcan Inc. Mr. Arseneault has held this position since 3 December 2003, and his responsibilities include leading the integration of Pechiney within Alcan. In his 23 years with Alcan, he has held different key positions. He was President of Rolled Products North America from August 2000 to December 2003. In 1997 he held the position of Vice President of South East Asia until August 2000. In his first 15 years with Alcan, he held various positions in the Alcan Primary Metal Group.

GLENN R. LUCAS, 50, Vice President and Treasurer, Alcan Inc. Mr. Lucas was appointed Treasurer of the Company in April 1999 and his responsibilities include financing, foreign exchange risk management, cash management and insurance. He has held various senior positions with the Company in Asia: President, Alcan Japan (1998), President, Alcan Nikkei Asia Company (1997) and Vice President, Planning & Finance, Alcan Pacific Limited (1994). Mr. Lucas joined the Company in 1979.

THOMAS J. HARRINGTON, 45, Vice President and Controller, Alcan Inc. Prior to joining the Company in November 2002, Mr. Harrington was employed at General Electric Company, from 1997 to 2002, where he held several accounting and financial positions, leading to his role as global controller for GE Medical Systems. Prior to joining GE, Mr. Harrington was with Deloitte & Touche LLP, in California, from 1991 to 1997.

ROY MILLINGTON, 44, Corporate Secretary, Alcan Inc. Mr. Millington has held this position since July 2001. As senior legal counsel, he was previously based in Zurich and was active in the global legal integration of the Company and Algroup. He has been a member of Alcan's legal department since 1989 and served with British Alcan Aluminium plc from 1995 to 1997.

ITEM 11 EXECUTIVE COMPENSATION

The information required is incorporated by reference to the Proxy Circular, pages 23 to 28, in the section entitled "Executive Officers' Compensation".

ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Share Ownership of Certain Beneficial Owners

The following shareholder reported to the Securities and Exchange Commission on Schedule 13G/A that it owned more than five percent of Alcan's Common Shares. Except as set forth below, to Alcan's knowledge as of the date of this report, no person owned beneficially five percent or more of Alcan's Common Shares.

Name and Address of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Outstanding Common Shares Owned
FMR Corp. 82 Devonshire Street Boston, MA 02109	19,026,552 (1)	5.904%

(1) FMR Corp. ("FMR") is a parent holding company of investment managers and registered investment advisers. It reported that it had sole power to vote 2,001,328 shares, sole power to dispose of 18,234,188 shares and shared power to vote or dispose of none of the shares in a filing with the SEC on Form 13G/A on 13 February 2003. FMR states in its filing that it does not have sole power to vote or direct the voting of the shares owned directly by Fidelity Management & Research Company ("Fidelity") Funds, which power resides with the Funds' Boards of Trustees, and that Fidelity carries out the voting of the shares under written guidelines established by the Funds' Boards of Trustees. FMR notes in its filing that no one person's interest in the common stock is more than five percent of the total outstanding common stock.

Share Ownership of Directors and Executive Officers

Directors and Executive Officers as a group beneficially own 321,043 Common Shares (including shares over which control or direction is exercised). This represents 0.087% of Common Shares issued and outstanding. In addition, Executive Officers as a group have Options (as defined in the Proxy Circular) to purchase 3,218,060 Shares.

The following table lists ownership of Alcan's Common Shares by each Director, by each executive officer named in the executive officers' compensation table on page 23 of the Proxy Circular, and by all Directors and Executive Officers as a group as of 3 March 2004.

Name	Current Beneficial Holdings	Shares Subject to Options1	Stock Price Appreciation Units2	Number of Deferred Share Units	Restricted Share Units	Total
Roland Berger (D)	-	N/A	N/A	2,9063	N/A	2,906
L. Denis Desautels (D)	297	N/A	N/A	1,1503	N/A	1,447
Travis Engen (D, O)	225,500	1,244,000	N/A	1,8793	N/A	1,471,379
L. Yves Fortier (D)	1,000	N/A	N/A	7,2193	N/A	8,219
Jean-Paul Jacamon (D)	136	N/A	N/A	-	N/A	136
William R. Loomis (D)	10,000	N/A	N/A	4,0553	N/A	14,055
Yves Mansion (D)	-	N/A	N/A	-	N/A	-
Christine Morin-Postel (D)	-	N/A	N/A	1,3663	N/A	1,366
J.E. Newall (D)	8,532	N/A	N/A	10,1033	N/A	18,635
Guy Saint-Pierre (D)	15,005	N/A	N/A	6,1183	N/A	21,123
Gerhard Schulmeyer (D)	2,106	N/A	N/A	5,9763	N/A	8,082
Paul M. Tellier (D)	1,949	N/A	N/A	9,1373	N/A	11,086
Milton K. Wong (D)	40,000	N/A	N/A	2,3003	N/A	42,300
Richard B. Evans (O)	25,000	281,500	75,000	13,8104	-	395,310
Brian W. Sturgell (O)	6,708	326,050	N/A	3,0685	7,1996	343,025
Geoffery E. Merszei (O)	6,000	292,200	N/A	-	-	298,200
Cynthia Carroll (O)	-	167,216	N/A	-	-	167,216
All Directors and Officers as a group (32 individuals)	321,043	3,218,060	256,500	75,744	23,377	2,803,985

D- Director

O- Officer

1 Represents shares that may be acquired through the exercise of B, C, D and E options as described in the Proxy Circular on pages 24 and 25.

2 Indicates number of units awarded under the Alcan Stock Price Appreciation Unit Plan. The Plan is described on page 27 of the Proxy Circular. The units are payable in cash.

3 Indicates number of deferred share units awarded under the Directors Deferred Share Unit Plan. The Plan is described on page 29 of the Proxy Circular. The units are payable in cash.

4 Mr. Evans holds 10,742 deferred shares units under the Executive Deferred Share Unit Plan, and 3,068 units under the Medium-Term Incentive Plan, which has been discontinued. The Executive Deferred Share Unit Plan is described on page 20 of the Proxy Circular. The units are payable in cash.

5 Mr. Sturgell holds 3,068 deferred share units under the Medium-Term Incentive Plan, which has been discontinued. The units are payable in cash or Shares.

6 Mr. Sturgell holds these restricted share units that were awarded in recognition to his contribution in the Pechiney Combination. The units are payable in Shares.

ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS

The information required is incorporated by reference to the Proxy Circular, page 31, the section entitled "Indebtedness of Directors and Executive Officers".

The interest rate is currently nil on all outstanding option loans.

ITEM 14 PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information required is incorporated by reference to the Proxy Circular, pages 16 and 17, the sections entitled "Report of the Audit Committee" and "Auditors".

PART IV

ITEM 15 EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

A.1.	FINANCIAL STATEMENTS
	The information required is incorporated by reference to the Annual Report, pages 51 to 99 and the Auditors' Report on page 50 thereof.
2.	FINANCIAL STATEMENT SCHEDULES
	The required information is shown in the Consolidated Financial Statements or Notes thereto.
3.	EXHIBITS
	References to documents filed by the Company prior to April 1987 are to SEC File No. 1-3555. References to documents filed by the Company after April 1987 are to SEC File No. 1-3677.
	(3)	Articles of Incorporation and By-laws:
		3.1	Restated Articles of Incorporation dated 12 September 2002. (Incorporated by reference to exhibit 3 to the Quarterly Report on Form 10-Q of the Company for the quarter ended 30 September 2002.)
		3.2	By-law No. 1A. (Restated) (Filed herewith.)
	(4)	Instruments defining the rights of security holders:
		4.1.1	Indenture, dated as of 15 May 1983 between Alcan Inc. and Bankers Trust Company, as Trustee. (Incorporated by reference to exhibit 4.1 to the Company's Registration Statement on Form S-3 (No. 33-29761) filed with the Commission on 7 July 1989.)
		4.1.2	First Supplemental Indenture dated as of 1 January 1986 to the Indenture dated as of 15 May 1983 between Alcan Inc. and Bankers Trust Company, as Trustee. (Incorporated by reference to exhibit 4.2 to the Company's Registration Statement on Form S-3 (No. 33-29761) filed with the Commission on 7 July 1989.)

4.1.3	Second Supplemental Indenture dated as of June 30, 1989 to the Indenture dated as of 15 May 1983 between Alcan Inc. and Bankers Trust Company, as Trustee. (Incorporated by reference to exhibit 4.3 to the Company's Registration Statement on Form S-3 (No. 33-29761) filed with the Commission on 7 July 1989.)
4.1.4	Third Supplemental Indenture dated as of 19 June 1989 to the Indenture dated as of 15 May 1983 between Alcan Inc. and Bankers Trust Company, as Trustee. (Incorporated by reference to exhibit (4)(a) to the Company's Current Report on Form 8-K dated 26 July 1989 filed with the Commission on 26 July 1989 (Commission File Number 1-3677).)
4.1.5	Fourth Supplemental Indenture dated as of 17 July 1990 to the Indenture dated as of 15 May 1983 between Alcan Inc. and Bankers Trust Company, as Trustee. (Incorporated by reference to exhibit 4.5 to the Company's Registration Statement on Form S-3 (No. 33-35977) filed with the Commission on 20 July 1990.)
4.1.6	Fifth Supplemental Indenture dated as of 1 January 1995 to the Indenture dated 15 May 1983 between Alcan Inc. and Bankers Trust Company, as Trustee. (Incorporated by reference to exhibit 4.6 to the Company's Registration Statement on Form S-3 (No. 333-76535) filed with the Commission on 19 April 1999.)
4.1.7	Sixth Supplemental Indenture dated as of 8 April 2002 to the Indenture dated 15 May 1983 between Alcan Inc. and Bankers Trust Company, as Trustee. (Incorporated by reference to exhibit 4.7 to the Company's Registration Statement on Form S-3 (No. 333-85998) filed with the Commission on 11 April 2002.)
4.1.8	Form of Seventh Supplemental Indenture to the Indenture dated 15 May 1983 between Alcan Inc. and Bankers Trust Company, as Trustee. (Incorporated by reference to exhibit 4.8 to the Company's Registration Statement on Form S-3 (No. 333-105999) filed with the Commission on 10 June 2003.)
4.1.9	Form of Eighth Supplemental Indenture to the Indenture dated 15 May 1983 between Alcan Inc. and Bankers Trust Company, as Trustee. (Incorporated by reference to exhibit 4.9 to the Company's Registration Statement on Form S-3 (No. 333-110739) filed with the Commission on 25 November 2003.)
4.1.10	Specimen Form of Debt Security (Incorporated by reference to exhibit 4.1 to Form 8-A filed with the Commission on 10 September 2002.)
4.2	Form of certificate for the Registrant's Common Shares (Incorporated by reference to exhibit 4.2 to the Annual Report on Form 10-K of the Company for 1989.)
4.3	Shareholder Rights Agreement as re-confirmed on 25 April 2002 between Alcan Inc. and CIBC Mellon Trust Company as Rights Agent, which Agreement includes the form of Rights Certificates. (Incorporated by reference to exhibit 4 to the Quarterly Report on Form 10-Q for the quarter ended 30 June 2002.)

(10)	Material Contracts
	10.1	Employment Agreement, dated 23 February 2001, with Travis Engen. (Incorporated by reference to exhibit 10.14 to the Annual Report on Form 10-K of the Company for 2000.)
	10.2	Employment Agreement, dated 31 December 2001, with Brian W. Sturgell. (Substantially similar agreements have been entered into with R.B. Evans, G. E. Merszei and C. Carroll.) (Incorporated by reference to exhibit 10.19 to the Annual Report on Form 10-K of the Company for 2001.)
	10.3	Alcan Executive Share Option Plan. (Incorporated by reference to the section entitled "The Plan" on pages 3 through 8 and on pages 3 through 7 of the Prospectuses dated 30 April 1990 and 28 April 1993, respectively, filed as part of the Company's Registration Statements on Form S-8, Registration Nos. 33-34716 and 33-61790.)
	10.4	Alcan Executive Performance Award Plan revised as of October 1994. (Incorporated by reference to exhibit 10.3 to the Annual Report on Form 10-K of the Company for 1994.)
	10.5	Alcan Flexible Perquisites Program (Canada). (Incorporated by reference to exhibit 10.6 to the Annual Report on Form 10-K of the Company for 1995.)
	10.6	Alcan Corporation Flexible Perquisites Program (U.S.), dated 1 January 2003. (Filed herewith.)
	10.7	Alcan Corporation Executive Company Vehicle Program (U.S.), dated 7 November 2000 (U.S.) (Filed herewith.)
	10.8	Alcan Pension Plan for Officers, dated 1 January 2003. (Filed herewith.)
	10.9	B.C./Alcan Inc. 1997 Agreement. (Incorporated by reference to exhibit 10.12 to the Quarterly Report on Form 10-Q of the Company for the quarter ended 30 June 1997.)
	10.10	Alcan Inc. Stock Price Appreciation Plan dated 27 September 2001. (Incorporated by reference to exhibit 99.1 to the Quarterly Report on Form 10-Q of the Company for the quarter ended 30 September 2001.)
	10.11	Alcan Inc. 2001 Deferred Share Unit Plan for Non-Executive Directors dated 1 April 2001. (Incorporated by reference to exhibit 99.2 to the Quarterly Report on Form 10-Q of the Company for the quarter ended 30 September 2001.)
	10.12	Total Shareholder Return Performance Plan as of 1 January 2002. (Incorporated by reference to exhibit 10.20 to the Annual Report on Form 10-K of the Company for 2001.)
	10.13	Change of Control Agreement dated 1 August 2002 with Travis Engen. (Incorporated by reference to exhibit 10.18 to the Annual Report on Form 10-K of the Company for 2002.)
	10.14	Change of Control Agreement dated 1 August 2002 with Richard B. Evans. (Substantially similar agreements have been entered into with B.W. Sturgell, G. E. Merszei and C. Carroll.) (Incorporated by reference to exhibit 10.19 to the Annual Report on Form 10-K of the Company for 2002.)
	10.15	Special award of restricted stock units dated 17 December 2003 for Brian W. Sturgell. (Filed herewith.)

(13)	Annual Report. (Filed herewith.)
(14.1)	Worldwide Code of Employee and Business Conduct. (Filed herewith.)
(14.2)	Code of Ethics for Senior Financial Officers. (Filed herewith.)
(21)	Subsidiaries and Related Companies of the Company. (Filed herewith.)
(23)	Consent of Independent Accountants is on page 74. (Attached hereto.)
(24)	Powers of Attorney. (Filed herewith.)
	24.1	Power of attorney of R. Berger
	24.2	Power of attorney of L. D. Desautels
	24.3	Power of attorney of Travis Engen
	24.4	Power of attorney of L. Y. Fortier
	24.5	Power of attorney of J-P. Jacamon
	24.6	Power of Attorney of W. R. Loomis
	24.7	Power of attorney of Y. Mansion
	24.8	Power of attorney of C. Morin-Postel
	24.9	Power of attorney of J. E. Newall
	24.10	Power of attorney of G. Saint-Pierre
	24.11	Power of attorney of G. Schulmeyer
	24.12	Power of attorney of P. M. Tellier
	24.13	Power of attorney of M. K. Wong
(31.1)	Section 302 Certification signed by Travis Engen on 12 March 2004. (Filed herewith.)
(31.2)	Section 302 Certification signed by Geoffrey E. Merszei on 12 March 2004. (Filed herewith.)
(32.1)	Section 906 Certification signed by Travis Engen on 12 March 2004. (Filed herewith.)
(32.2)	Section 906 Certification signed by Geoffrey E. Merszei on 12 March 2004. (Filed herewith.)
(99)	Proxy Circular. (Filed herewith.)

B. REPORTS ON FORM 8-K

The Company has filed reports on Form 8-K during the quarter ended 31 December 2003concerning Item 5 ("Other Events"). The filing dates were on 22 October 2003, and on 18 November 2003, 25 November 2003, 3 December 2003 and 9 December 2003 (with respect to material filed under Item 5 ("Other Events") only).

The report filed on 22 October 2003 contained a portion which was furnished under Item 12 ("Results of Operations and Financial Condition").

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

		ALCAN INC.
12March 2004	By :	*
		L. Yves Fortier, Chairman of the Board

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities indicated, on 12 March 2004.

/s/ Travis Engen

Travis Engen, Director, President and Chief Executive Officer

(Principal Executive Officer)

*

Roland Berger, Director

*

L. D. Desautels, Director

*

L. Yves Fortier, Chairman of the Board

*

Jean-Paul Jacamon, Director

*

William R. Loomis, Director

*

Yves Mansion, Director

*

C. Morin-Postel, Director

*

J. E. Newall, Director

*

Guy Saint-Pierre, Director

*

Gerhard Schulmeyer, Director

*

Paul M. Tellier, Director

*

M. K. Wong, Director

/s/ Geoffery E. Merszei

Geoffery E. Merszei, Executive Vice President and Chief Financial Officer (Principal Financial Officer)

/s/ Thomas J. Harrington

Thomas J. Harrington, Vice President and Controller

(Principal Accounting Officer)

* By: Roy Millington as Attorney-in-fact

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 33-6070, 33-34716, 33-61790, 333-89711 and 333-111555) and on Form S-3 (Nos. 2-78568, 2-78713, 33-82754, 333-83336, 333-85998, 333-105999 and 333-110739) of Alcan Inc., of our report, dated 5 March 2004 relating to the financial statements and our comments by auditors on Canada-U.S. Reporting Difference dated 5 March 2004 which appear on page 50 of the 2003 Annual Report to Shareholders, which is incorporated by reference in this Annual Report on Form 10-K.

Montreal, Canada

12 March 2004

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP

EX-3

ALCAN INC.

BY-LAW NO. 1A

A By-law to regulate generally the

business and affairs of the Corporation

SHAREHOLDERS

Section 1.01. MEETINGS. The Directors shall call an annual meeting of Shareholders not later than 15 months after the holding of the last preceding annual meeting and may at any time call a special meeting of Shareholders. Meetings shall be held at such place as the Directors may determine. Failing any determination as to the location of the meeting by the Directors, the meeting shall take place in the city of Montreal. Meetings shall be held at such time as the Directors may determine.

Any person entitled to attend a meeting of Shareholders may participate in the meeting by means of a telephonic, electronic or other communication facility which may be made available by the Corporation, provided that the Chairman is satisfied that all participants will be able to communicate adequately with each other during the meeting.

A meeting of Shareholders may be held by means of a telephonic, electronic or other communication facility which may be made available by the Corporation, unless the Directors otherwise determine and provided that the Chairman is satisfied that all participants will be able to communicate adequately with each other during the meeting.

Section 1.02. NOTICE OF MEETINGS. Notice of time and place of each meeting of Shareholders shall be given by sending the notice to each Shareholder entitled to vote at the meeting, not less then 21 nor more then 60 days before the date of the meeting.

Any notice, communication or document to be given by the Corporation pursuant to the Canada Business Corporations Act, the Articles, the By-laws or otherwise, to a Shareholder, Director, officer or auditor shall be sufficiently given if delivered personally to the person to whom it is to be given, or if delivered to his recorded address, or if mailed by prepaid mail addressed to him at his recorded address.

In addition to the foregoing, any such notice, communication or document required to be given may instead be delivered by the Corporation in an electronic or other technologically enhanced format, provided that the requirements of the applicable law in respect of such delivery have been complied with in all respects, including, where required, receipt by the Corporation of the prior consent of the recipient to the delivery of such notice, communication or document in electronic or other technologically enhanced format and the designation by the recipient of the information system for receipt thereof.

The accidental failure to give notice of a meeting of Shareholders to any person entitled thereto or any error in such notice not affecting the substance thereof shall not invalidate any action taken at the meeting.

Section 1.03. QUORUM. Except as otherwise provided in the Articles of the Corporation, the holders of not less than 40% of the shares entitled to vote at a meeting of Shareholders present in person or by proxy shall constitute a quorum.

Section 1.04. CHAIRMAN OF THE MEETING. Subject to the provisions of any resolution of the Directors, the Chairman of the Board or, in his absence, the Vice Chairman of the Board, if any, or, in his absence, the President or, in the absence of each of the foregoing officers, any officer who is also a Director designated by the Directors for that purpose shall preside at all meetings of the Shareholders. If at any meeting all of the foregoing officers be absent, the Shareholders entitled to vote at such meeting may choose a chairman.

Section 1.05. PROCEDURE AT MEETINGS. The chairman of any meeting of Shareholders shall conduct the procedure thereat in all respects and his decision on all matters or things, including, but without in any way limiting the generality of the foregoing, any question regarding the validity or invalidity of any instruments of proxy, shall be conclusive and binding upon the Shareholders.

Section 1.06. VOTING. Voting at every meeting of Shareholders shall be by a show of hands except where, either before or after a show of hands, a ballot is required by the chairman of the meeting or is demanded by any person present and entitled to vote at the meeting. Any vote may be held, in accordance with the laws and regulations governing the Corporation, by means of a telephonic, electronic or other communication facility, provided the Corporation makes available such a communication facility.

Section 1.07. DECISION OF QUESTIONS. At every meeting of Shareholders all questions proposed for the consideration of Shareholders shall be decided by the majority of votes, unless otherwise required by the laws governing the Corporation or by the Articles of the Corporation.

DIRECTORS

Section 2.01. NUMBER. The Board of Directors shall consist of such number of Directors, not greater than the maximum (20) nor less than the minimum (9) set out in the Articles of the Corporation, as the Directors may determine from time to time.

2

Section 2.02. ELECTION AND TERM OF OFFICE. At each annual meeting the Shareholders shall elect Directors to hold office until the next succeeding annual meeting or until their successors shall be elected. A retiring Director shall be eligible for re-election unless such Director is older than the maximum age fixed by the Directors.

Section 2.03. MEETINGS OF DIRECTORS AND NOTICES. Meetings of the Directors may be called at any time by or by order of the Chairman of the Board, the Vice Chairman of the Board if one is in office, the President or any two Directors, and may be held at the registered office of the Corporation, or at any other place determined by the Directors. Notice specifying the place and time of each such meeting shall be delivered to each Director or left at his usual residence or usual place of business, or shall be mailed, sent by telefax or in an electronic or other technologically enhanced format at least 72 hours prior to the time fixed for such meeting. Notice of any meeting or any irregularity in any meeting or the notice thereof may be waived by any Director either before or after the meeting is held. In conjunction with the annual meeting of Shareholders each year, the Directors shall meet to appoint the officers of the Corporation and to transa ct such other business as may come before the meeting.

Section 2.04. QUORUM. The Directors may from time to time fix the quorum for meetings of Directors, but unless so fixed, five Directors shall constitute a quorum.

Section 2.05. DIVIDENDS. The Directors, when declaring dividends payable in cash on the common shares of the Corporation shall have the option of declaring such dividends payable in U.S. currency or in Canadian currency.

Section 2.06. COMPENSATION. Each Director who is not a salaried officer of the Corporation or of one of its subsidiaries may be paid such compensation as may be fixed by the Directors or by any committee to which the Directors may delegate power to do so, in addition to transportation and other expenses actually incurred in attending meetings of the Directors or of any committee of which he is a member or in otherwise performing the duties of his office.

Section 2.07. CHAIRMAN. Subject to the provisions of any resolution of the Directors, the Chairman of the Board or, in his absence, the Vice Chairman of the Board, if any, or, in the absence of each of the foregoing officers, the President shall preside at all meetings of the Directors. If the Chairman of the Board, the Vice Chairman of the Board, if any, and the President be absent, the Directors present may choose a Chairman from among their number. The Chairman at any meeting of Directors may vote as a Director.

Section 2.08. PARTICIPATION. Subject to the laws governing the Corporation, any Director may, if all of the Directors consent, participate at any meeting of Directors or of a committee of Directors by means of a telephonic, electronic or other communication facility that permits all participants to communicate with each other during the meeting. In the case of any such participation at any such meeting, each such Director so participating shall be deemed to be present at such meeting and such meeting shall be deemed to be held at the place specified in the notice calling such meeting or in the waiver thereof and, in the absence of any such specification, at the place where or from which the Chairman of the meeting shall have presided.

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ALCAN CORPORATION
Alcancorp Executive Perquisites Program
January 1, 2003

Statement of Program Objectives

Alcan Corporation (Alcancorp) strives to maintain a competitive package of compensation and benefits at all levels of the organization. In keeping with this goal, Alcancorp periodically reviews the compensation and benefits offerings, both in total and by specific component, at various job levels within the organization.

One specific area of review is that of executive perquisites. Over the years, Alcancorp has had a less-structured program of executive perquisites, including such things as company paid vehicles, financial planning and club memberships.

After a review of U.S. business practices, the company has decided to implement a program that provides flexibility and tax-efficiency while remaining competitive in the external marketplace. It is with this in mind that Alcancorp has developed the Alcancorp Executive Perquisites Program.

Although the general provisions of this program are outlined below, specific provisions of the program may be contained in other documents too lengthy to detail in this program overview. Specific questions should be directed to the Manager - Compensation - Alcan Corporation.

Eligibility for the Program

All Alcancorp employees in management positions in job grades 43 and above are eligible for coverage under the Alcancorp Executive Perquisites Program. Levels of coverage will be assessed periodically to ensure competitiveness of the program.

The Program

The overall Alcancorp Executive Perquisites Program is an umbrella approach, comprised of two separate and distinct programs - the "Alcancorp Executive Vehicle Program" and the "Alcancorp Flexible Perquisites Program".

Alcancorp Executive Vehicle Program

The Alcancorp Executive Vehicle Program remains unchanged from that which is currently in place for executives. Most recently, Alcancorp and GE Capital Leasing have jointly administered this program.

ALCAN CORPORATION
Alcancorp Executive Perquisites Program
January 1, 2003

Briefly outlined the program includes the provision to eligible participants of a company-paid leased vehicle, including operating, maintenance, insurance and registration fees.

Participants may select any make and model of vehicle, subject to the provisions of the program and according to the following capital cost schedule:

Jobgrade	Capital Cost
47 & above	$40,000
43 - 46	$37,000

Additionally, participants have the flexibility to select a vehicle with a capital cost in excess of those stated in the above schedule. In such cases, the difference in cost will be amortized over 50 months and such amount will be deducted from the participants' pay.

Questions pertaining to this program should be directed to the Manager - Corporate Human Resource Services.

Alcancorp Flexible Perquisites Program

The Alcancorp Flexible Perquisites Program is a new benefit offering and was effective August 1, 1999. Payments under this program replace, in their entirety, all previous benefits provided under Alcancorp's former less-structured approach that included such things as financial planning, tax preparation and club memberships.

Alcancorp will make payments with each paycheck directly to eligible employees in an amount sufficient to cover the expense of providing a competitive package of perquisites. This payment, which is separate from base pay and is non-pensionable, will be shown as a separate line item on the employee's paycheck.

Since a cash amount is paid directly to the employee, the employee has the flexibility to choose to spend this amount on the more traditional perquisites that Alcancorp's competition provides in the marketplace (i.e. financial planning or club membership), or the employee may elect to spend this amount on anything else he or she chooses. The decision is completely up to the employee.

Designed as such, the amount paid is immediately taxable to the employee.

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ALCAN CORPORATION
Alcancorp Executive Perquisites Program
January 1, 2003

Payments will be made with each paycheck and will be in accordance with the following schedule:

Jobgrade	Annual Payment
47 & above	$11,500
43 - 46	$ 7,000

Partial-year payments will be correspondingly less.

Program Administration

The Alcancorp Compensation and Benefits group administers the Alcancorp Executive Perquisites Program.

Further, it is recognized that exceptional situations may arise relative to the administration of the program. Any such cases will be reviewed by the Vice President - Human Resources, Rolled Products Americas & Asia and approved by the President, Rolled Products Americas & Asia.

Alcan Corporation reserves the right to modify or terminate this program at any time without notice.

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Alcan Corporation

Executive Company Vehicle Program

The company provides designated individuals with a company paid leased vehicle. The executive is given an allowance that may be spent on a vehicle of the employee's choosing (Appendix A). The executive may select a vehicle with a cost in excess of the allowance, but the excess is payable by the individual.

Lease Program

The company has a designated vehicle leasing company that obtains the vehicle and provides the following services at no cost to the individual.

Vehicle Purchase

Maintenance Services

Vehicle Registration

Personal Tax Calculation

Fuel Purchase Credit Card

Vehicle Disposal

Vehicle Operation

The vehicle is available for both business and personal use by the executive and his/her spouse. Per U.S. Internal Revenue Service Regulation, the driver is required to maintain records of personal use, because a company provided vehicle is considered a taxable benefit to the employee. The leasing company provides an automated reporting system to accommodate this process.

Vehicle Cost Exceeding Allowance

Should the executive select a vehicle in excess of the allowance, the amount above the allowance will be divided by 50 months (amortization period) and deductions taken from the employee's paycheck.

Vehicle Disposal

Company vehicles are disposed of after 36 months in service or 60,000 miles whichever comes first. The driver is given first right to purchase the vehicle at the book value (28% of the original capitalized cost). Should the driver decline to purchase the vehicle, the company will take responsibility for disposing of the vehicle. Any employee deductions for leases over the allowance cease upon disposal of the vehicle.

APPENDIX A

Executive Company Vehicle Program

Allowances

PRESIDENT, ROLLED PRODUCTS AMERICAS AND ASIA	$ 40,000
JOB GRADE 43 AND ABOVE (as approved by VP, Human Resources RPAA)	$ 37,000
JOB GRADE 42 AND BELOW (as approved by VP, Human Resources RPAA)	$ 32,000

Approved by: David Godsell, VP, HR - RPAA

November 7, 2000

EX-10

ALCAN INC.

ALCAN PENSION PLAN

FOR OFFICERS

Approved on 7 January 2003

with effect from 1 January 2003

	ARTICLE I: INTRODUCTION
1.01	This document sets out the terms of the Alcan Pension Plan for Officers (Plan).
1.02	The Plan provides a pension based on your earnings in excess of the cap on earnings set under your home country pension plan (HCPP).
1.03	The effective date of the Plan is 1 January 2003.

 

	ARTICLE II: ELIGIBILITY
2.01	You participate in the Plan if you are an officer of Alcan Inc. and the Personnel Committee of the Board of Alcan Inc. (PCOB) designates you a participant.
2.02	Your participation in the Plan begins on the first day of the month and year determined by the PCOB and ends on the last day of the month and year determined by the PCOB or if occurring before, on the last day of the month following either your death, retirement or termination of employment.

 

	ARTICLE III: PENSION CALCULATION
3.01	The pension formula set out below is the basis on which your pension payable under the Plan is calculated. It takes into account the following three elements:
	your pensionable earnings which are your basic salary plus guideline Executive Performance Award (EPA) subject to a maximum fixed from time to time by the PCOB; your highest average earnings (HAE) which is the annual average of your 60 highest consecutive months of pensionable earnings as defined above in excess of your highest average earnings for the purpose of your HCPP. Your HAE is determined as of the date that your participation in the Plan ends in accordance with section 2.02; your years (including fractional years) of participation in the Plan;
3.02	The pension formula is the following:
	3% x HAE x years of participation up to 10 plus 2% x HAE x years of participation between 10 and 20 equals your annual pension (max. 50% of HAE).
3.03	Your annual pension calculated in accordance with the pension formula in section 3.02 is reduced by 10% for each year that your years of service with the Alcan group of companies is less than ten at your retirement, termination or death. The PCOB may, in its sole discretion, waive in whole or in part the reduction contemplated by this section.

	ARTICLE IV: PENSION PAYMENT
4.01	If you retire or terminate employment on or after age 60 and with ten years or more of service with the Alcan group of companies, your annual pension is calculated according to the provisions of Article III and is payable from the first day of the month next following in equal monthly installments during your lifetime with the last payment due on the first day of the month of your death.
4.02	If you retire or terminate employment before age 60 or with less than ten years of service with the Alcan group of companies, your annual pension is calculated according to the provisions of Article III and is payable from the first day of the month next following your attainment of age 65 in equal monthly installments during your lifetime with the last payment due on the first day of the month of your death. At your request, payment of your pension shall be made to begin on the same date as your HCPP pension in which case the amount of the monthly payments shall be adjusted based on an actuarially determined equivalent stream of payments.
4.03	If you die before payment of your pension begins, the actuarial value of your pension entitlement shall be paid to the beneficiary designated by you for the purpose of the Plan or where there is no such beneficiary, to your beneficiary designated under your HCPP or where there is no such beneficiary, to the legal representative of your estate.
4.04	At your request, payment of your pension shall be made to correspond to one of the optional forms elected by you for payment of your HCPP pension in which case the amount of the monthly payments shall be adjusted based on an actuarially determined equivalent stream of payments.
4.05	Your pension under the Plan shall be calculated and paid in United States dollars and at your request shall be paid in the currency of your HCPP converted at the rate of exchange prevailing at determination of the pension.
4.06	Any request made by you pursuant to either section 4.02, 4.04 or 4.05 shall be irrevocable.

	ARTICLE V: OTHER PROVISIONS
5.01	The Plan may be amended or terminated at any time by the PCOB provided that such amendment or termination shall not reduce any rights which you have acquired prior to the amendment or termination date. Your acquired rights shall be determined on the basis of your years of participation and your earnings at that date.
5.02	Unless otherwise determined by the PCOB, the Plan shall remain an unfunded obligation of Alcan Inc. or of any Alcan Group Company and all pensions payable under the Plan represent merely unfunded, unsecured promises of Alcan Inc. or any Alcan Group Company to pay or cause to be paid a sum of money in the future. No funds will be contributed by any person to a third party or otherwise set aside to secure pensions under the Plan.
5.03	The administration of the Plan shall be managed jointly by Alcan's Human Resources (Executive Compensation) Department and Alcan Adminco (2000) Inc. Any question arising in the administration of the Plan or the construction of any term of the Plan shall be resolved by the PCOB, in its sole discretion.
5.04	The administrators of the Plan shall keep accurate and detailed records of participation in the Plan and upon request shall provide to a participant a statement of benefits.
5.05	Nothing in the Plan shall be deemed to give a participant the right to be retained in the service of any Alcan group company or to interfere with the rights of any Alcan group company to terminate a participant's employment at any time.
5.06	Unless otherwise determined by the PCOB, all pensions payable under the Plan shall not be subject to any periodic or ad hoc increases according to an index.
5.07	The Plan shall be governed by the laws of the Province of Quebec and the laws of Canada. If any part of the Plan is determined to be void or unenforceable, the validity and enforceability of remaining parts of the Plan shall not be affected as a consequence.

EX-10

alcan

Alcan Inc.
1188 Sherbrooke Street West Montreal, Quebec H3A 3G2 Canada	P.O. Box 6090 Montreal, Quebec H3C 3A7 Canada	Tel.:	(514) 848-8000
		Fax:	(514) 848-8115
		www.alcan.com

17 December 2003

Mr. Brian Sturgell

Re: Special award of Restricted Stock Units ("RSUs")

Dear Brian,

In recognition of the very special contribution you have made during the last 6 months on the acquisition project of Pechiney, the Human Resources Committee has awarded you a special award of Restricted Stock Units ("RSUs"). The terms and conditions of this award are outlined hereunder.

The Award is subject to the following terms and conditions:

1. Amount of Award

You have been granted 7,175 Restricted Stock Units (notional Alcan share equivalents). The effective date of your grant is 3 December, 2003. [Each Restricted Share Unit will give you the right, subject to the terms set out below, to an amount equal to the value of an Alcan Common Share, as determined in accordance with paragraph 5 below, which will be used to purchase on your behalf Alcan Common Shares on the open market.]

2. Account

These RSUs have been credited to your personal RSU account, which will be maintained on Alcan's books until your RSUs are redeemed and/or cancelled. Please note that RSUs are notional credits only; they are not Alcan Common Shares and do not entitle you to any shareholder rights. In addition, no funds are being set aside (in trust or otherwise) to guarantee the payment of RSUs.

3. Vesting Period

These RSUs will be fully vested on 15 December 2006 and payable to you as described in paragraph 5 below between 15 December 2006 and 31 December 2006.

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4. Dividend Reinvestment

Whenever a cash dividend is declared on the Alcan Common Shares, your RSU account will be credited with additional RSUs as explained below:

1. Dividends on Alcan Common Shares are declared in US currency. The Canadian currency equivalent of any such dividend will be determined at the Bank of Canada noon rate of exchange on the date that dividend is declared.

2. The RSUs in your account on the date the dividend is declared will qualify for a credit computed on the basis of the dividend declared.

3. The dollar amount obtained by multiplying your RSUs described in b) above by the dividend calculated as in a) above is divided by the average closing prices for Alcan Common Shares on the Toronto Stock Exchange and on the New York Stock Exchange (calculated on the date on which the dividend is declared) and the result is rounded to three decimal places.

4. The resulting RSUs determined in accordance with clause c) are credited to your account.

5. The additional RSUs credited to your account as a result of dividend reinvestments will vest and be payable as described in paragraph 5 below.

5. Redemption of RSUs

Provided you remain actively employed by Alcan or an Alcan affiliate on 15 December 2006, and except as described in 8 below, the RSUs credited to your personal RSU account on that date will vest fully. Those RSUs will be redeemed and used to purchase Alcan Common Shares as follows:

1. The total number of RSUs credited to your account on December 15, 2006 will be multiplied by the average of the closing prices for Alcan Common Shares on the Toronto Stock Exchange and on the New York Stock Exchange converted to Canadian dollars over the five consecutive trading days (i.e., days on which both exchanges were open for trading) ending 15 December 2006. Any currency conversion required is to be made at the Bank of Canada noon rate of exchange on the relevant day.

2. The dollar value calculated in a) above will be reported as taxable employment income to you for the year 2006 and will be paid to your broker as described in c) below net of income tax and any other statutory withholdings.

3. The "net amount" described in b) above will be paid to a stockbroker of your choice (who is independent from Alcan), acting as your agent, who will in turn purchase Alcan Common Shares in the market for your personal account. Trading commissions will be for Alcan's account (and must be reported as a taxable benefit to you in the year in which they are paid).

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6. Adjustments

In the event of a stock split, stock dividend, combination or exchange of shares by Alcan, a merger or any other event which materially affects the Alcan Common Shares, the necessary and proportionate adjustments, as determined by the Human Resources Committee of the Board, will be made with respect to the RSUs in your account.

7. Forfeiture

Except as described in 8 below, if you cease to be actively employed by Alcan or an affiliate of Alcan before 15 December 2006, you will forfeit all RSUs credited to your account and will have no right to receive any payment or shares in respect of those RSUs, unless the Human Resources Committee of the Board determines otherwise.

8. Redemption of RSUs on Retirement, Disability or Death

If, prior to 15 December 2006, you cease to be employed by Alcan or an affiliate of Alcan due to retirement or disability in accordance with Alcan's applicable policies, or death, all of the RSUs credited to your account at your date of retirement, disability or death (your "Early Termination Date") will vest immediately. Your RSUs will be redeemed in accordance with 5 above as soon as practicable after your Early Termination Date, except that the calculation in 5 a) will be based on the five consecutive trading days ending with your Early Termination Date; the amount so calculated will be included in your income (or the income of your estate or beneficiary, as the case may be) for the year of your Early Termination Date; and if you have died your beneficiary or legal representative may choose the broker who will purchase the Alcan Common Shares (as described in 5 c)). In any event, redemption of your RSUs pursuant to this paragraph 8 will occur by 31 December 2006.

9. Beneficiary

You will be required to complete a Beneficiary Designation Form indicating the name of your beneficiary (who must be either your spouse or the legal representative of your estate) to whom the benefits under your RSU account will be paid in the event that you die while your RSU account is still open. A Change of Beneficiary Form must be completed if you wish to change the name of your beneficiary at any time.

If your designated beneficiary, predeceases you, if you have not designated a beneficiary, or if you are subject to the laws of a jurisdiction that does not permit this type of beneficiary designation, all benefits under your RSU account are payable to the legal representative of your estate.

Travis Engen

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EX-13

Management's Discussion and Analysis

OVERVIEW

The recovery of the world's major developed economies remained fragile through most of 2003, showing signs of sustained improvement only towards year-end.  As a consequence, world demand growth for aluminum was muted and was fueled mainly by the continued rapid development of China's economy.  While primary aluminum was in surplus in 2003, the excess of production over demand narrowed as the year progressed.  For 2004, demand growth is expected to outstrip production increases, leading to a decline in industry inventories for the first time in three years. 

                The price of aluminum on the London Metal Exchange ended 2003 at US$1,605 per tonne, US$257 per tonne higher than at the start of the year.  Unlike the situation for other base metals, the run-up in aluminum prices in the second half of the year did not reflect improved industry fundamentals but rather the pronounced weakening of the U.S. dollar.  When viewed in terms of other currencies, aluminum prices showed little or no improvement year over year.  In 2004, the anticipated decline in industry inventories is expected to provide a better price environment for aluminum. 

                For Alcan, it was a year of external challenges and significant accomplishments. The benefits from higher aluminum prices were offset in the Company's results by the negative impact of the U.S. dollar's depreciation. Likewise, ongoing initiatives to reduce costs were successful, but could not fully offset the external pressures driving increases in costs for pensions, fuel and recycled metal.  In the opening months of 2004, the U.S. dollar has begun to firm and external cost pressures have largely abated.

                During 2003, Alcan took a number of important steps in pursuit of its value-maximization agenda, including the acquisition of a flexible packaging business and two composites businesses, as well as signing a joint venture agreement for a smelter in China.  However, the most significant development in 2003 was the acquisition at year-end of Pechiney, a leading international producer of aluminum and packaging products.  This acquisition provides Alcan with considerably increased scale, enhanced technological resources and greater opportunities for profitable growth, particularly in the aerospace and packaging markets.  While the addition of Pechiney further builds upon the stable earnings and cash flow foundation of Alcan's packaging business, it also brings greater earnings leverage to changes in aluminum prices. 

The graphs and tables presented in Management's Discussion and Analysis exclude Pechiney, unless otherwise stated. 

MARKET REVIEW

Western World* Primary Aluminum Balance

Demand
Total Western World aluminum consumption grew by an estimated 1.3% in 2003 to about 28.5 million tonnes (Mt).  A second year of sub-par growth kept consumption from fully recovering to the record level of 29.4 Mt reached in 2000.   Of all aluminum consumed in 2003, 20.7 Mt was in the form of primary aluminum, which was up 5.7% over the prior year. The balance of 7.8 Mt was in the form of secondary/recycled metal. The higher rate of primary consumption largely reflected the growing influence of China on the aluminum market. During the year, increased scrap aluminum imports by China substantially reduced scrap availability in the Western World, pushing up prices for secondary alloys and spurring increased primary usage.   Western World primary smelters also took advantage of the higher prices by increasing the casting of secondary alloys.

In 2003, aluminum consumption was down in the Americas but up in other regions. A 100-thousand-tonne (kt) decline in the U.S. contributed to a drop of 1% in North America, the world's largest consuming region.  Similarly, a 5.6% fall in Brazil was the leading contributor to the 2.7% decline in South America. Mixed results in Western Europe produced modest growth of 1%, while consumption in Russia registered a decline. In Asia, there were increases in every major country, which led to a 5.2% growth in that region.  Chinese consumption is estimated to have grown an impressive 25.9%, following 12.2% growth in 2002.

Supply

Total Western World primary aluminum supply (production plus imports) increased 4.3% to 20.8 Mt in 2003. Of this, primary aluminum production represented 17.8 Mt, up 3.2% from the previous year, with the balance comprising 3.0 Mt of net imports from China and former Eastern Bloc countries (C.I.S.* and Eastern Europe).   During the year, a total of about 500 kt of primary capacity was idled or closed in the U.S., Ghana, Brazil, France and New Zealand, but this was more than offset by expansions in Mozambique, Norway, India, Brazil, and South Africa, a few of which came on stream ahead of schedule. Net imports were up significantly from both Russia and China, the latter largely in anticipation of a cut in export tax rebates effective for 2004.

*Defined as the world excluding the Commonwealth of Independent States (C.I.S.), Eastern Europe and China.

Management's Discussion and Analysis

Western World Primary Aluminum Supply and Demand

Balance
With Western World primary aluminum demand increasing more quickly than supply, the surplus was about 155 kt in 2003, down from about 400 kt in 2002. By the end of the year, inventories held by the London Metal Exchange (LME), the New York Mercantile Commodities Exchange (COMEX) and aluminum producers had increased to approximately 4.5 Mt, or the equivalent of about 11 weeks of consumption. Driven primarily by the weakening U.S. dollar, the average 3-month LME aluminum price rose 5% in 2003 to $1,428/t, up from $1,365/t in the prior year.

Total Aluminum Inventories and Ingot Prices

  *International Aluminium Institute

Outlook
In 2004, primary demand is expected to again rise more quickly than supply due to the continuing strength of China and better economic growth in the Western World.   Few major smelter expansions are scheduled to commence production this year in the Western World, though there will be a full year of production from those completed during 2003.  Assuming an improving economic climate and lower exports from China and the former Eastern Bloc, the resulting forecast is a net reduction in total inventories of approximately 100 to 200 kt in 2004.

Western World Consumption

The pattern of Western World aluminum consumption growth varied by end-use market in 2003.  Once again, transportation was the fastest growing market, as well as the largest end-use market for aluminum. While worldwide light vehicle production declined by 0.5%, consumption in this market was up 1.9% to 8.6 Mt, an indication of the continued penetration of aluminum in automobiles. Alcan's revenues from the transportation market increased by 11.7% to $1.0 billion.

Management's Discussion and Analysis

Western World Consumption by End-use Market - 2003

Aluminum consumption in the containers and packaging market was down a slight 0.3% to 4.9 Mt. Can stock demand declined by 0.8% in 2003, led by an 8% fall in Brazil. Other packaging, principally foil, rose by 1% to 1.4 Mt. Alcan's revenues from the packaging and beverage can markets, which represent the largest share of the Company's revenues, increased by 14.1% to $5.9 billion.

Consumption in the building and construction sector rose 1.2% to 5.2 Mt. Although U.S. housing starts were up 8.4% in 2003 and reached a 25-year record, aluminum consumption was up only 0.5% in the U.S. due to material substitution and a weak commercial construction market. There was a sharp drop in the building and construction market in South America and only modest growth elsewhere. Alcan's revenues from building and construction increased by 8.6% to $1.0 billion.

The electrical market gave up virtually all of its gain from the previous year, dropping 0.7% in 2003 to 2.3 Mt. Small gains in the majority of countries were not enough to offset large declines in Brazil and Korea and a small decline in North America.  Most private power projects in Brazil have been put on hold due to new government policies. Alcan's revenues from the electrical market declined by 5.7% to $0.5 billion.

Consumption in all other markets increased by 2.3% in 2003 to 7.5 Mt. This segment includes 2.4 Mt from the machinery and equipment market and 1.7 Mt from the consumer durables market. Alcan's revenues from these other markets, including aluminum ingot, increased by 9.8% to $5.2 billion.

Western World Consumption by Geographic Market - 2003

Management's Discussion and Analysis

Alcan's Revenues by Geographic Market - - 2003

RESULTS OF OPERATIONS

Presentation of Financial Information
During 2003, the Company's drive to maximize value resulted in decisions to sell certain non-core packaging and extrusions operations in order to release cash for higher value-creating opportunities.   Even though these operations are not major business units, they are classified as held for sale and are treated as discontinued operations.  Alcan will not have any significant continuing involvement in these operations after their disposal.

New accounting standards require that the operating results and any impairment charge for assets held for sale be disclosed separately as discontinued operations.  Prior years' financial information has been reclassified to present these businesses as discontinued operations on the statement of income, as assets held for sale and liabilities of operations held for sale on the balance sheet and as cash flows from (used for) discontinued operations on the statement of cash flows.  The financial information contained in  Management's Discussion and Analysis has been revised from the information presented in prior annual reports to reflect the reclassification.  For further details, see note 4 of the consolidated financial statements - Discontinued Operations and Assets Held for Sale.

On December 15, 2003, Alcan acquired 92.2% of Pechiney, an international producer of aluminum and packaging products with revenues in 2003 of approximately $12 billion and assets of approximately $10 billion.  The balance sheet of Pechiney is included in Alcan's consolidated financial statements as at December 31, 2003. However, Pechiney's results of operations and cash flows will only be included in the Company's consolidated financial statements beginning January 1, 2004.

Income from Continuing Operations

Income from continuing operations decreased largely due to the negative impact of foreign currency balance sheet translation.

Management's Discussion and Analysis

Net Income
Business conditions in 2003 were challenging, with Alcan's results negatively impacted by a number of external factors including a soft economic environment through most of the year, a weakening U.S. dollar and upward pressure on costs for pensions, fuel and recycled metal.  Providing a counterbalance to these factors were higher LME prices, which rose in the second half in response to the decline in the U.S. dollar, benefits from ongoing cost initiatives and profits from newly acquired businesses.

Income from continuing operations was $290 million for the year, down $99 million from 2002. The deterioration largely reflected the negative effects of foreign currency balance sheet translation, offset in part by a positive net year-over-year change in Other Specified Items. The Company estimates that the weakening of the U.S. dollar and external cost pressures reduced earnings by approximately $180 million in 2003.

In 2002, cost savings, increased shipment volumes, a higher-value product mix, lower interest expense and the absence of goodwill amortization more than compensated for the adverse impact of lower LME prices and higher pension costs.  Income from continuing operations was $389 million in 2002, compared to $4 million in 2001. The earlier year was impacted by large restructuring and impairment charges that were part of Other Specified Items.

After including the results of discontinued operations, the Company's reported net income was $167 million in 2003 as compared to $374 million in 2002 and $2 million in 2001.  Discontinued operations include the results and impairment charges of certain non-core packaging and extrusions operations in Europe that the Company has designated as held for sale.  After-tax results from discontinued operations were a loss of $123 million in 2003 compared to losses of $15 million and $2 million in 2002 and 2001, respectively.

Net Income (In millions of US$)	2003	2002	2001
Included in income from continuing operations are:
Foreign currency balance sheet translation	(306)	(41)	51
Other Specified Items:
Restructuring charges	(26)	(36)	(104)
Asset impairments	(81)	(16)	(186)
Gain (Loss) from non-routine sales of assets, businesses           and investments	39	21	(87)
Tax adjustments	72	(3)	12
Legal and environmental provisions	(17)	(76)	(167)
Pechiney financing-related gains	65	-	-
Other	(12)	3	1
Total Other Specified Items	40	(107)	(531)
Income from continuing operations	290	389	4
Income (Loss) from discontinued operations	(123)	(15)	(2)
Net Income	167	374	2

Foreign currency balance sheet translation effects arise from translating monetary items (principally deferred income taxes and long-term liabilities) denominated in Canadian and Australian dollars into U.S. dollars for reporting purposes. The significant weakening of the U.S. dollar in 2003 resulted in the Company recording translation losses of $306 million for the year as compared to losses of $41 million in 2002. In 2001, there were translation gains amounting to $51 million.  Although balance sheet translation effects are primarily non-cash in nature, they can have a significant impact on the Company's net income.

Income from continuing operations for 2003 included a net after-tax gain of $40 million from Other Specified Items.  The most significant items included a currency-related gain, net of financing costs, of $65 million on the funding of the Pechiney acquisition, favourable tax adjustments of $72 million primarily resulting from a change in tax legislation in Australia and gains of $39 million mainly from the sales of assets in the U.K., Malaysia and Italy.  These were partially offset by environmental and legal provisions of $17 million mainly due to an environmental reserve for a site in the U.S and impairment charges of $81 million.  The latter included a goodwill impairment charge of $28 million in the extrusions businesses in Europe and asset impairment charges for certain operations in Europe and North America. 

Management's Discussion and Analysis

Income from continuing operations for 2002 included a net after-tax charge of $107 million from Other Specified Items. The largest of these items was a provision of $68 million for a ruling on a contract dispute with Powerex (a subsidiary of BC Hydro), $13 million for the impairment of certain businesses in Italy, charges of $21 million for the closures of the Burntisland specialty alumina plant and the Banbury R&D facility, both in the U.K., $17 million relating to other integration and restructuring costs and $15 million in other miscellaneous charges.  These items were partially offset by an after-tax gain of $26 million on the sale of more than half of the Company's remaining portfolio investment in Nippon Light Metal Company, Ltd. (NLM).

In 2001, anticipating challenging economic conditions ahead, Alcan moved to safeguard its competitiveness by launching a restructuring program aimed at achieving annual pre-tax savings of $200 million. By the end of 2002, the Company had realized $178 million in cost reductions under the program and reached an annual run rate in excess of $200 million. Costs to implement the program were $270 million, half of which involved cash expenditures for redundancy, with the balance comprising non-cash items such as asset write-downs.  Other Specified Items for 2001 included a loss on the disposal of operations in Jamaica of $90 million, charges related to the restructuring program of $104 million, asset impairment provisions of $186 million and increases to environmental reserves of $167 million. These charges were slightly offset by a favourable prior year tax adjustment of $12 million.

Revenues and Aluminum Volumes

*Includes ingot and rolled product shipments, conversion of customer-owned metal (tolling) as well as aluminum used in engineered products and packaging.

Higher revenues reflect the contributions of the packaging and composites businesses acquired during 2003, higher prices for aluminum and alumina, increased ingot shipments and the impact of the stronger euro.

Sales and Operating Revenues

Sales and operating revenues were $13.6 billion in 2003, up 11% from 2002.   The increase reflected the additional revenues from the packaging and composites businesses acquired during the year, higher LME prices, higher alumina prices, increased ingot shipments and the impact of the stronger euro.

In 2002, sales and operating revenues were $12.3 billion, down 1% from 2001 as increased ingot and rolled products volumes along with the benefits of a stronger euro offset a 6% reduction in LME prices.

Revenues by Market - 2003

Management's Discussion and Analysis

Sales Price Realizations

Realizations for both ingot and rolled products increased in line with higher LME prices.

Costs and Expenses
In 2003, Alcan's cost base was adversely affected by currency movements and external cost pressures. The sharp decline in the value of the U.S. dollar had an unfavourable impact on costs incurred in other currencies, which are translated into U.S. dollars for reporting purposes.   The economic impact was pronounced in countries such as Canada, Australia and the U.K., where the Company's smelter and raw material operations have a local currency cost base, but U.S. dollar determined revenues.  External factors also resulted in increased costs for pensions, fuel and fuel-related items and recycled metal, which on a combined basis, increased by approximately $180 million in 2003. In order to mitigate the negative impact of currency and cost pressures, Alcan remained focused on reducing controllable costs. The Company estimates that during the year it successfully cut its annual cost base by approximately $125 million.

Value of U.S. Dollar - Average Annual Percentage Change (%)	2003	2002	2001
Canadian dollar	-11	+1	+4
Australian dollar	-17	-5	+12
Euro	-16	-5	+3

Cost of sales and operating expenses were 79% of sales and operating revenues in 2003, unchanged from the previous two years.  While higher LME prices helped boost revenues, the benefits were offset by the unfavourable impact of the weaker U.S. dollar on costs.  The Company's continued emphasis on cost and productivity improvements helped to offset increases in fuel and recycled metal costs.

In 2002, while LME prices were lower, cost of sales and operating expenses as a percentage of sales and operating revenues were flat compared to 2001. This was mainly due to the benefits from cost initiatives, including integration synergies and the 2001 restructuring program, as well as lower start-up and pre-operating expenses related to the Alma smelter in Quebec.

Total Aluminum Volume and Purchases

Increased primary production reduced the need for purchased metal.

* Includes ingot and rolled product shipments, conversion of customer-owned metal (tolling) as well as aluminum used in engineered products and packaging.

Depreciation and amortization expense was $923 million compared to $835 million in the previous year and $798 million in 2001.  The increase in 2003 mainly reflected the strengthening of the euro against the U.S. dollar and the impact of packaging and composites businesses acquired during the year.  The increase in 2002 was due to additional depreciation on the Alma smelter, which reached its full capacity at the end of September 2001, and the Company's 40% share of the Alouette smelter in Quebec that was acquired in two tranches of 20% each in 2002. These increases to depreciation were offset in part by the impact of the sale of operations in Jamaica in May 2001.

Management's Discussion and Analysis

Selling, administrative and general expenses were $746 million in 2003, $175 million higher than in the prior year.  Excluding the impact of business acquisitions, expenses increased by $148 million largely due to higher pension expenses and the impact of the weaker U.S. dollar.  In 2002, expenses were $571 million, up from $544 million in 2001. The increase in 2002 was due principally to higher pension expenses and increased consultant fees related to performance improvement initiatives.

Alcan's research and development (R&D) activities continue to be closely aligned with the needs of its core businesses, principally bauxite and alumina, smelting, fabrication and packaging. The Company is focused on improving process technology and developing new product applications for a diverse range of markets and customers.  R&D spending at central research laboratories, technology centres and technical departments was $140 million in 2003 compared to $115 million in 2002 and $135 million in 2001.  The bulk of the increase in 2003 reflected the impact of the weaker U.S. dollar. The decline in 2002 spending was primarily due to the achievement of integration synergies following the algroup acquisition.

Interest

The average interest cost remained low.  The increase in interest expense largely relates to the additional funding raised to finance the Pechiney acquisition.

Reflecting the low short-term interest rate environment, Alcan's effective average interest rate on debt was 5.2% in 2003, slightly higher than in the prior year. The effective average interest rate is derived by dividing the total interest cost on debt for the year (see page 38 of the annual report for a calculation of debt) by the average quarter-end debt for the year, including the prior year-end debt balance.  For 2003, the fourth quarter-end debt balance used to calculate the average debt for the year is adjusted on a pro-rata basis for the debt raised to finance Pechiney, in order to arrive at a more representative debt level on which interest was incurred.  Pechiney debt assumed is excluded from the calculation because the interest cost for the year excludes Pechiney and the debt raised to finance the acquisition is pro-rated because it was only outstanding for a portion of the fourth quarter. Total interest cost increased by $21 million primarily as a result of the $3.5 billion of short and long-term financing raised in December to fund the acquisition of Pechiney.  In 2002, strong free cash flow allowed the Company to reduce debt levels. Total interest costs rose in 2001 due to the inclusion of algroup debt for a full year and to the debt incurred to finance capital expenditures.  Interest capitalized in 2001 related mainly to the construction of the smelter in Alma, Quebec.

Restructuring, impairment and other special charges include amounts related to the Company's 2001 restructuring program. Under this program, a detailed business portfolio review was undertaken to identify high cost operations, excess capacity and non-core products.  Charges of $654 million in 2001 and $60 million in 2002 arose as a result of negative projected cash flows and recurring losses, and related principally to impairments for buildings, machinery and equipment and some previously capitalized project costs.  This program was completed in 2003 and a pre-tax gain of $38 million arose mainly from the sale of certain assets in the U.K. and the sale of certain businesses in Malaysia and Italy.

In 2003, other expenses (net of other income) included foreign exchange losses of $83 million from balance sheet translation, partly offset by currency-related gains on the financing of the Pechiney acquisition.  Also included in other expenses in 2003 were the pre-tax amounts of certain Other Specified Items.  The most significant items were asset impairment charges of $58 million related to operations in Germany and Canada, an environmental provision of $25 million for a site in the U.S. and restructuring charges of $10 million for a cable plant in the U.S.  Other expenses of $113 million in 2002 included a $100-million provision for a ruling on a contract dispute with Powerex (a subsidiary of BC Hydro) and foreign exchanges losses mainly arising from balance sheet translation of $37 million, which were partially offset by a gain on the sale of the Company's remaining portfolio investment in NLM of $36 million. In 2001, other expenses included a $123-million loss on the disposal of the Jamaican operations. 

Management's Discussion and Analysis

Income Taxes
Income tax expense of $325 million for 2003 represented an effective tax rate of 52%, compared to 43% in 2002 and 42% in 2001.  This compares to a composite statutory tax rate of 39% in Canada (39% in 2002 and 40% in 2001).  In 2003, the difference in the rates was due primarily to currency related items, partially offset by one-time tax benefits in Australia, investment and other allowances and lower tax rates in foreign jurisdictions.  The tax benefits in Australia relate to the implementation of a tax consolidation regime together with the conversion to the U.S. dollar as the tax reporting currency.  As a result of these changes in legislation, the Company was able to reset the tax value of certain assets in Australia and record a deferred tax benefit of $74 million. 

In 2002, the difference in the rates was primarily due to currency related items, the impact of potential future tax benefits that were not recognized since their realization was not likely, partially offset by lower tax rates in foreign jurisdictions and investment and other allowances.  In 2001, the income tax provision included a non-cash gain of $26 million on the currency revaluation of deferred tax balances mainly due to the weaker Canadian dollar during the year.  This was offset by the impact of potential future tax benefits that were not recognized since their realization was not likely. 

A full reconciliation between the Canadian composite statutory tax rate and the effective tax rate is presented in note 10 of the consolidated financial statements.

Goodwill
In 2002, the Company adopted new accounting standards on goodwill. As a result of this change, goodwill is no longer being amortized.  In 2003, the Company completed a review of goodwill and recorded an impairment charge of $28 million relating to the extrusions operations in Europe.  In 2002, a review of goodwill resulted in an impairment charge of $748 million recorded as a reduction in opening retained earnings as of January 1, 2002.  This non-cash adjustment reflected the deterioration in end-market conditions in the period from the algroup integration in October 2000 to January 1, 2002, and did not reflect a change in the growth prospects of the Company.

LIQUIDITY AND CAPITAL RESOURCES

Operating Activities

Cash from Operations and Free Cash Flow from Continuing Operations

Cash from operations and free cash flow surpassed the record levels achieved in 2002 and attained new all-time highs.

Despite external cost pressures and a soft economic environment, Alcan's pursuit of value maximization has led to improved cash flow performance. Focused attention on costs, stringent management of working capital and a disciplined approach to capital spending yielded substantial benefits in 2003.  The Company achieved record cash flow from operating activities in continuing operations of $1.8 billion, the third consecutive year of improvement.

Free cash flow from continuing operations was also a record $734 million, up from $691 million in 2002 and $83 million in 2001.  Free cash flow from continuing operations consists of cash from operating activities in continuing operations less capital expenditures and dividends. Management considers this relevant information for investors as it provides a measure of the cash generated internally that is available for investment opportunities and debt service.

Management's Discussion and Analysis

Free Cash Flow from Continuing Operations (In millions of US$)	2003	2002	2001
Cash from operating activities in continuing operations	1,833	1,603	1,375
Dividends
Alcan shareholders (including preference)	(200)	(197)	(200)
Minority interests	(11)	(6)	(2)
Capital expenditures in continuing operations	(888)	(709)	(1,090)
Free Cash Flow from Continuing Operations	734	691	83

For a third year in a row, working capital reduction was a significant contributor to cash flow. Management action resulted in operating working capital being drawn down by $282 million in 2003, following reductions of $153 million in 2002 and $143 million in 2001.  The decline in 2003 was due to a substantial reduction in receivables and inventories.  The declines in 2001 and 2002 were the result of reductions in receivables and inventories, offset in part by a decrease in payables.

Investment Activities

Alcan adopted value maximization as its governing objective in 2001 and as such uses a value-based approach to identify investment opportunities. In 2003, the Company made further progress towards this objective, executing several value-creating transactions including the acquisition of a packaging business, VAW Flexible Packaging (FlexPac), at a cost of $330 million and two composite product businesses, Baltek and Uniwood/Fome-Cor (Gator-Cor), at a cost of $38 million and $95 million, respectively. These acquisitions build upon Alcan's already strong market positions by extending product range and geographic reach.

During 2002, the Company acquired a 40% joint venture interest in the Aluminerie Alouette consortium in two transactions. The first tranche of 20% was purchased from the Société Générale de Financement (SGF) and the second tranche of 20% from the Corus Group plc at costs of $172 million and $171 million, respectively.

While capital expenditures on property, plant and equipment increased in 2003, they remained below the level of depreciation expense for a second year, a reflection of the Company's continuing financial discipline. Capital spending for continuing operations was $888 million in 2003, compared to $709 million in 2002 and $1,090 million in 2001. The increase in 2003 was due largely to an acceleration of spending for the expansion of the Alouette smelter in Quebec, in which Alcan has a 40% stake. In 2001, capital spending included $250 million related to the construction of the Alma smelter in Quebec. 

With the acquisition of Pechiney, Alcan's capital spending will increase in 2004, and the Company expects it to be approximately $1.2 billion. In the medium term, the Company's objective is to keep its capital spending in line with depreciation, which should be achievable given the investments in new capacity made over the last decade.

In 2003, asset disposals included the Borgofranco power station in Italy, the Banbury laboratory and the Burntisland specialty chemical plant, both located in the U.K., as well as the Company's remaining investment in NLM.  In addition, the Company sold businesses that were classified as discontinued operations in its consolidated financial statements. These included the Fibrenyle packaging business in the U.K. and the Pieve extrusions operations in Italy.  Proceeds on the sale of these businesses are included in cash used for investment activities in discontinued operations. Disposals in 2002 mainly comprised moulded glass operations in the U.S. and China, rolled product circles operations in Italy, three company-owned cargo ships and more than half of the Company's investment in NLM.

Pechiney Acquisition

On December 15, 2003, Alcan acquired 92.2% of Pechiney, a French société anonyme with international operations in three core businesses: primary aluminum, aluminum conversion and packaging. The total consideration for this ownership interest was $5.1 billion, which consisted of $3.4 billion in cash (including net transaction costs of $61 million and net of cash and time deposits acquired of $338 million), $1.6 billion in Alcan common shares  (41 million shares at $39.63 per share) and $80 million for Pechiney stock options held by the employees.  In addition, the Company assumed from Pechiney total debt of $2.1 billion. Subsequent to year-end, Alcan took a number of steps to acquire the remaining shares of Pechiney and as of February 6, 2004, it owned 100% of the company.

This transaction is an important step in Alcan's value-maximizing strategy, building upon its position as one of the world's leading aluminum and packaging companies and providing advantages of enhanced scale, financial strength and technological resources, as well as an increased capacity to serve customers worldwide.  The combined entity will also benefit from increased opportunities to leverage Pechiney's state-of-the-art smelting technology, a larger and more diversified position in low-cost primary aluminum production, an advanced aluminum fabricating business with a leading position in aerospace, and a global packaging business with a leading position in flexible packaging.  Going forward, the enhanced size and scope of the Company will also provide an increased number of strategic options.

Management's Discussion and Analysis

Alcan previously announced that the combination of the two companies will generate targeted synergies of $250 million in annual cost savings and benefits, on a pre-tax basis, that will be achieved within two years. These will be realized largely through streamlined corporate and head office services, logistical and purchasing efficiencies, the optimization of production facilities and a focused approach to R&D and capital spending.  In order to realize these synergies, Alcan estimates that it will need to incur approximately $200 million in costs and make capital expenditures of approximately $50 million. There is potential for additional synergy benefits pending management's ongoing review of the combined Company's operations.

                For further details on the transaction, refer to note 6 of the consolidated financial statements.

Capital Expenditures and Depreciation in Continuing Operations

Capital expenditures were held below depreciation for the last two years as a result of stringent financial discipline.

Financing Activities

Total Borrowings and Equity

* Includes borrowings of operations held for sale.

** Includes minority interests and preference shares.

Total borrowings increased in 2003 reflecting the debt raised to fund the Pechiney acquisition as well as the Pechiney debt assumed in this transaction.

In May 2003, the Company issued $500 million of 4.5% global notes, due May 15, 2013.  The proceeds were partially used to fund the FlexPac acquisition, with the remainder used to refinance maturing long-term debt.   In December, the Company completed a $2.25-billion four-tranche debt offering in the U.S. capital markets to partially fund the cash consideration portion of the Pechiney purchase price.  The debt offering consisted of two global notes issues, one for $500 million with a coupon of 5.2% due January 15, 2014, and the other for $750 million with a coupon of 6.125% due December 15, 2033, as well as the issuance of two tranches of floating rate notes:  $500-million one-year notes and $500-million two-year callable notes.   The floating rate notes, fully and unconditionally guaranteed by the Company, were issued by its wholly owned U.S. subsidiary, Alcan Aluminum Corporation. The remaining funding requirements for the acquisition were obtained through a combination of commercial paper, available cash and a short-term bank loan. In addition to the issuance of new debt, the Company has also assumed the debt of companies acquired, which amounted to $2.1 billion in 2003.  

In January 2002, the Company redeemed all of its $150-million 8.875% debentures originally due on January 15, 2022, for 104.15% of their face value. A loss of $6 million was recognized in the first quarter of 2002. In September 2002, the Company issued $500 million of 4.875% global notes due September 15, 2012. Net proceeds were used to repay existing long-term debt and commercial paper borrowings.

Debt as a percentage of invested capital does not have a uniform definition. Because other issuers may calculate debt as a percentage of invested capital differently, Alcan's calculation may not be comparable to other companies' calculations. The reconciliation below explains the calculation. The figure is calculated by dividing borrowings by total invested capital. Total invested capital is equal to the sum of borrowings and equity, including minority interests. The Company believes that debt as a percentage of invested capital can be a useful measure of its financial leverage as it indicates the extent to which it is financed by debtholders. The measure is widely used by the investment community and credit rating agencies to assess the relative amounts of capital put at risk by debtholders and equity investors.

Management's Discussion and Analysis

Reflecting the impact of new debt issuances and debt assumed on acquisitions, debt as a percentage of invested capital at the end of 2003 increased to 46%, up from 31% at the end of 2002 and 32% at the end of 2001. In line with its commitment to maintain strong financial ratios and solid investment grade credit ratings, Alcan plans to reduce its debt to capitalization ratio to about 35% over the next two years. Given forecasted operating cash flows and anticipated proceeds from divestitures related to the Pechiney acquisition, the Company believes this is achievable. The outcome of divestitures required for regulatory reasons as a result of the Pechiney acquisition could have a significant impact on future cash flows.  The regulatory requirements for divestitures are further described in note 24 of the consolidated financial statements.

Debt as a Percentage of Invested Capital As at December 31 (In millions of US$, including Pechiney)	2003	2002	2001
Debt
Short-term borrowings	1,802	381	553
Debt maturing within one year	356	295	652
Debt not maturing within one year	7,604	3,186	2,884
Debt of operations held for sale	1	5	2
Total debt	9,763	3,867	4,091
Equity
Minority interests	524	150	132
Redeemable non-retractable preference shares	160	160	160
Common shareholders' equity	10,555	8,465	8,610
Total equity	11,239	8,775	8,902
Invested capital	21,002	12,642	12,993
Debt as a Percentage of Invested Capital (%)	46	31	32

The quarterly common share dividend remained at 15 cents per share in 2003. Total dividends paid (common and preference) to shareholders were $200 million in 2003 compared to $197 million in 2002 and $200 million in 2001.

Cash and time deposits in continuing operations totaled $803 million at the end of 2003, up from $109 million at the end of 2002 and $116 million at the end of 2001. The increase in 2003 includes $338 million of cash assumed on the acquisition of Pechiney, as well as funds held for the purchase of the remaining shares of Pechiney subsequent to year-end. While Alcan has significantly more short-term debt at the end of 2003 as compared to 2002 and 2001, forecasted free cash flow and the anticipated proceeds from business divestments in connection with the Pechiney acquisition will be available for the repayment of short-term debt.  Short-term debt (short-term borrowings plus debt maturing within one year plus debt of operations held for sale) represented 22% of total debt at the end of 2003 as compared to 18% at the end of 2002 and 30% at the end of 2001.

Alcan has access to approximately $2.9 billion of corporate committed credit facilities, of which $500 million was unused as of the date of this report.  The Company believes that the cash from continuing operations, together with available credit facilities, will be more than sufficient to meet the cash requirements of operations, planned capital expenditures, dividends and any short-term debt refinancing requirements. In addition, the Company believes that its ability to access global capital markets, considering its investment grade credit rating, should provide any additional liquidity that may be required to meet unforeseen events.

Management's Discussion and Analysis

Contractual Obligations

The Company has future obligations under various contracts relating to debt payments, capital and operating leases, long-term purchase arrangements, pensions and other post-employment benefits, and guarantees.  The table below provides a summary of these contractual obligations (based on undiscounted future cash flows) as at December 31, 2003.

Contractual Obligations As at December 31, 2003 (In millions of US$, including Pechiney)	Payments due by period
	Total	Less than 1 year	1 - 3 years	3 - 5 years	More than 5 years
Long-term debt (1)	7,960	356	2,145	599	4,860
Capital leases (2)	86	16	23	20	27
Operating leases (2)	419	84	127	80	128
Purchase obligations (2)	3,275	607	485	414	1,769
Unfunded pension plans (3)	3,032	68	139	142	2,683
Other post-employment benefits (3)	2,544	69	151	171	2,153
Funded pension plans (3)	(4)	172	391	415	(4)
Guarantees (2)	187	74	74	23	16
Total		1,446	3,535	1,864

(1)	Refer to note 19, Debt Not Maturing Within One Year, of the accompanying consolidated financial statements.
(2)	Refer to note 24, Commitments and Contingencies, of the accompanying consoldiated financial statements.
(3)	Refer to note 28, Post-retirement Benefits, of the accompanying consolidated financial statements.
(4)	Pension funding generally includes the contribution required to finance the annual service cost, except where the plan is largely overfunded, and amortization unfunded liabilities over periods of 15 years, with larger payments made over the initial period where required by pension legislation.  Contributions depend on actual returns on pension assets and on deviations from other economic and demographic actuarial assumptions.  Based on management's long-term expected return on assets, annual contributions for years after 2008 are projected to be in the same range as in prior years and to grow in relation with payroll.

ENVIRONMENT, HEALTH AND SAFETY (EHS)

Alcan strives to be a recognized leader of environment, health and safety excellence. To move toward this vision, Alcan introduced a new EHS management system in 2003, EHS FIRST, which is an integral part of the Company's overall business management philosophy and a critical component of its value maximizing agenda.

EHS FIRST is aligned with ISO 14001, an international environmental management standard, and OHSAS 18001, an international occupational health and safety management standard. All Alcan facilities are expected to implement the necessary management systems to support ISO 14001 and OHSAS 18001 certifications. By the end of 2003, 63% of the Company's facilities were ISO 14001 certified and 46% of the facilities were OHSAS 18001 certified. By the end of March 2004, all Alcan facilities should be certified, with the exception of newly acquired facilities including those of Pechiney, which will have two years within which to comply. EHS performance data can be found in the Company's 2003 Web-based sustainability report under key measures of sustainability.

EHS FIRST provides clear standards set out in a management system manual, which also includes mandatory EHS directives. With the aid of an internal gap analysis tool, all facilities, excluding those of Pechiney, have been enabled to check compliance against the new standards and to plan the measures to fill any gaps in 2004. By the end of 2003, 94% of the requirements were fulfilled. The continuous improvement process drives Alcan's businesses to reduce impacts while improving their competitive position and efficiency. Alcan's capital expenditures to protect the environment and improve working conditions were $71 million in 2003. EHS expenditures are projected to be $137 million in 2004 and $193 million in 2005. In addition, expenditures charged against income for environmental protection were $196 million in 2003, and are expected to be $222 million in 2004 and $238 million in 2005.

As of October 2003, Alcan's six business groups took the lead in managing TARGET, an internationally recognized greenhouse gas management program. The Company was once again selected as a component of the Dow Jones Sustainability World Index.

Management's Discussion and Analysis

OPERATING SEGMENT REVIEW

Alcan's six business groups or operating segments are Bauxite and Alumina, Primary Metal, Rolled Products Americas and Asia, Rolled Products Europe, Engineered Products and Packaging.  Starting January 1, 2004, Pechiney's businesses will be aligned with Alcan's business structure.

The Company's measure of the profitability of its operating segments is referred to as business group profit (BGP).  BGP comprises earnings before interest, taxes, depreciation and amortization and excludes certain items, such as corporate costs, asset impairments and Other Specified Items that are not under the control of the business groups.  These excluded items are managed by the Company's head office, which focuses on strategy development and oversees governance, policy, legal, compliance, human resources and finance matters.

Additional operating segment information is presented in note 30 of the consolidated financial statements.  The information that follows is reported by operating segment on a stand-alone basis. Transactions between groups are conducted at arm's length and reflect market prices. Accordingly, earnings from Bauxite and Alumina as well as from Primary Metal operations include profit on alumina or metal produced by the Company, whether sold to third parties or used in the Company's fabricating and packaging operations. Earnings from the downstream operations represent only the value-added portion of the profit from rolled products, engineered products and packaging products.

Revenues by Business Group - 2003

Bauxite and Alumina

The Bauxite and Alumina (B&A) group owns or operates seven bauxite mines and deposits and five alumina refineries. The alumina produced is used to meet the Company's own smelting requirements and is also sold to third-party customers. In recent years, B&A has repositioned its business portfolio around low-cost bauxite and alumina assets in Australia, which has substantially lowered cash costs and improved its competitive position.  The acquisition of Pechiney increases the group's alumina production capacity (including specialty aluminas) from 4.4 Mt/y to approximately 6.5 Mt/y, making Alcan the second largest alumina producer in the world.

Sales and Production - B&A

Higher production in 2003 reflected the benefits of the Gove optimization project, partly offset by the closure of the European specialty alumina operations.

Management's Discussion and Analysis

In 2003, record production levels at the Gove refinery together with higher production levels at the Queensland Alumina joint venture in Australia were partially offset by production lost due to the 2002 closure of the Burntisland specialty alumina plant in the U.K.   The decline in production in 2002 was due to the sale of the Company's Jamaican operations in the second quarter of 2001.

In the second quarter of 2002, a production optimization project at Gove was initiated. This $40-million project has increased the refinery's capacity by 60 kt/y to date and is expected to further increase capacity by another 40 kt/y by the end of 2004 when the final phase of the project is completed.

In 2003, Alcan initiated a detailed feasibility study for a proposed expansion of the Gove refinery.  The potential expansion would increase Gove's smelter-grade alumina production from 2.0 Mt/y to approximately 3.5 Mt/y.  It is expected that the detailed feasibility study will be completed by mid-2004, with potential commissioning of the expansion in 2007.

As a result of a value-based review of its activities in specialty alumina-based chemicals, Alcan announced in January 2002 that it would exit this business in Europe due to the unprofitable nature of this market and because of its disadvantaged cost position.  Alcan ceased these operations in November 2002, following a consultation process with employees and union representatives.

Increased BGP for 2003 resulted from higher alumina prices, partly offset by higher energy costs and the negative impact of foreign currency movements on balance sheet translation and operating costs.  In 2002,  decreased production and lower alumina prices, partially offset by improved production costs, contributed to lower BGP.

BGP - B&A

Higher alumina prices contributed to higher BGP in 2003, despite increased energy costs and negative foreign currency impacts.

In 2003, strong demand from China caused the alumina market to be in short supply, resulting in a sharp rise in spot prices.  Long-term contract prices moved up as well in response to rising prices for aluminum on the LME.  Average realized prices decreased in 2002 compared to 2001 in line with lower LME prices.

Average production costs per tonne were 7% higher in 2003 as ongoing cost reduction efforts were more than offset by higher energy prices and the impact of foreign currency movements.  Average production costs per tonne were 6% better in 2002, due to the divestment of high-cost operations in Jamaica and lower raw material prices.

The B&A group also owns and operates three specialty chemical facilities. These facilities produce alumina-based products for a wide array of applications, including solid surfacing, refractories, ceramics, catalysts, absorbants and water treatment.  In 2003, operating results were 85% higher than in the prior year, due mainly to the closure of the Burntisland plant in the U.K. that had operated at a loss in 2002.  Operating results for 2002 were 24% lower than in 2001 due to poor market conditions.

Primary Metal

Alcan is the second largest primary aluminum producer in the world.  The Primary Metal group operates or has interests in 16 smelters worldwide with a total capacity of 2.4 Mt/y.  Of this capacity, 62% is supplied by Company-owned power, which represents a major competitive advantage when compared to the industry average of 28%. With a focus on continuous improvement in technology and costs, the Company is reinforcing its excellent low-cost primary metal position. Over 50% of Alcan's smelting capacity is in the lowest quartile on the industry cash cost curve.  In addition to LME-grade ingot, the Primary Metal group produces value-added aluminum in the form of sheet ingot, extrusion billet, cable rods and foundry ingot for other Alcan plants or third-party customers serving the transportation, building and construction, consumer goods and machinery markets.  The acquisition of Pechiney increases smelter capacity to approximately 4.1 Mt/y and gives the Company the largest share of low-cost capacity in the world.

Management's Discussion and Analysis

Sales and Production - Primary Metal

Alouette, Kitimat and Soeral were major contributors to the 5% increase in production in 2003.

A full year of production from the Company's 40%-interest in Aluminerie Alouette in Sept-Îles, Quebec, acquired during 2002, capacity restarts at the Kitimat smelter in British Columbia and benefits from the Soeral expansion project in Norway contributed to the 5% increase in production in 2003.   Nine smelters set annual production records.  Most of Alcan's smelter production is in the form of value-added ingot, and record sales levels were achieved for each of the three major products: extrusion billet, foundry ingot and rod.   Record production was also achieved at the partially-owned anode plant, Aluchemie, in the Netherlands.

BGP - Primary Metal

Negative foreign currency exchange and higher raw material costs more than offset a 5% increase in LME prices and benefits from profit improvement initiatives.

In 2003, additional sales volumes, higher metal realizations and benefits from profit improvement initiatives were more than offset by the negative impact of the weaker U.S. dollar, higher alumina and fuel-related raw material costs, as well as higher pension expenses. For the year, there was an unfavourable balance sheet translation impact of $69 million.

In 2002, BGP increased by 5% as compared to 2001. Additional sales volumes, lower operating costs, and benefits from the algroup integration and restructuring programs more than offset a 6% reduction in LME prices and the unfavourable impact of foreign currency translation of $10 million.

Cost of Production - Primary Metal

* Includes pre-operating and start-up costs, general overhead from non-operating sites, underabsorbed fixed costs due to unused capacity and environmental provisions.

Total metal production costs for the year increased by $91/t or 7%, mainly reflecting negative foreign exchange impacts.

Management's Discussion and Analysis

The increase of $91/t in total metal production costs in 2003 was attributable to the unfavourable impact of the weaker U.S. dollar, higher alumina and fuel-related raw materials, as well as higher pension expenses. Benefits from cost reduction initiatives helped to offset some of these unfavourable variances.  Special charges in 2001 and 2002 were mainly for Alma pre-operating and start-up expenses.

Work on the expansion of the Alouette smelter in Quebec, in which Alcan has a 40% stake, is proceeding on budget and ahead of schedule.  Start-up is expected in early 2005, with full production later that year. The expansion, of which Alcan's share of the cost is $350 million, will increase the capacity of the smelter from 243 kt/y to 550 kt/y. In 2003, capital spending on the expansion was $106 million.

The high-amperage/low-energy project at the Lynemouth and Lochaber smelters in the U.K., which was approved in June 2002, was completed on budget and on schedule. This project will result in incremental production of 16 kt/y, as well as improved energy efficiencies and lower CO2 emissions.

The construction of the Candonga hydro power plant in Brazil, with an installed capacity of 140 Mw, has been completed at a total cost to Alcan of $47 million.  Alcan participated equally in the facility with CVRD (Companhia Vale do Rio Doce).   Start-up is expected in the first quarter of 2004.

Alcan's innovation and commitment to finding sustainable and financially attractive solutions was further demonstrated in the development of a solution for the treatment of spent potlining. Spent potlining is considered a hazardous waste composed of carbon and the refractory lining of electrolytic cells that are taken out of service after a useful life of about six years.  For a total investment of up to CAN$150 million, an 80-kt/y treatment facility will be built in the Saguenay-Lac-Saint-Jean region of Quebec using Alcan technology.

In October, Alcan signed a definitive joint venture agreement with Qingtongxia Aluminum Company (QTX) and Ningxia Electric Power Development and Investment Co. Ltd. (NEI) in China. Under the agreement, Alcan will invest up to $150 million to acquire a 50% share in an existing modern 150-kt/y pre-bake smelter located in the Ningxia autonomous region. The agreement provides for the joint venture to obtain long-term access to dedicated power at competitive terms sufficient to meet the energy requirements of the smelter. The agreement also gives Alcan a substantial operating role and the option to acquire, through additional investment, up to 80% of a new 250-kt/y potline already under construction. The agreed joint venture proposal is awaiting Chinese government approval. The investment is expected to take place in the first quarter of 2004.

In line with its commitment to economic and environmental sustainability, Alcan announced in January 2004 that it will permanently halt production of the four Söderberg potlines at the 60-year-old Arvida smelter in Jonquière, Quebec. The shutdown will affect 90 kt/y of production, which represents 3% of Alcan's global production capacity. Total decommissioning costs are expected to be approximately $26 million consisting mainly of early retirement and demolition expenses.

Rolled Products Americas and Asia

Alcan Rolled Products Americas and Asia (RPAA), with 15 production facilities in five countries, is focused on meeting the ever-changing needs of its global and regional fabrication customers through the rapid transfer and adoption of best technology and management practices. The RPAA group manufactures and sells high-quality sheet and light gauge rolled products serving numerous markets, including beverage, food packaging, automotive, construction and other durable goods.  The acquisition of Pechiney does not materially impact RPAA.

Sales and Operating Revenues - RPAA

Revenues increased due to higher metal prices.

The sales increase in 2003 was driven mainly by higher-priced metal input costs being passed through to customers.  Volumes increased by 18% in Asia and 10% in South America, offsetting a 7% decline in North America.  The Company was able to capitalize on growth in Asian can demand, particularly in China, combined with improved operating performance in its Korean operations. Alcan also made further inroads into the South American can market, which began to grow towards the end of the year. North American sales were below the record 2002 pace with weakness in some end-use markets and lower can sheet volumes.

Management's Discussion and Analysis

Rolled Products Americas and Asia Revenues - 2003

BGP and Shipments - RPAA

* Includes shipments of rolled products and conversion of customer-owned metal.

Significantly improved costs helped offset higher energy, pension and recycled metal costs as well as unfavourable foreign exchange and product mix impacts.

BGP for RPAA in 2003 declined by 7% compared to the record 2002 performance. While shipments were at all-time highs in Asia and South America, the positive impact was offset by reduced volume in North America.  Benefits from aggressive cost reduction efforts in all regions helped counterbalance higher recycled metal and energy costs, a less favourable product mix and metal price lags, as well as the adverse impact of the strengthening Canadian dollar.  BGP in Asia and South America increased by 66% and 23%, respectively, compared to the prior year.

The financial results for RPAA in 2002 reflected a significant increase in BGP compared to 2001. This was attributable to volume increases along with successful cost reduction efforts in North America and the favourable impact of metal price movements. These factors more than offset the negative impact of a stronger Korean won and a volatile Brazilian economic situation and currency.

RPAA continues to benefit from important investments in the expansion, upgrade and acquisition of rolled products facilities in the past decade, as well as from its continuing customer focus and commitment to innovation, cost reduction and manufacturing excellence.

RPAA Business Units
In North America, shipments for 2003 were 7% below the prior year's record level due to lower can stock volumes, the transfer of volumes to Alcan's Asian plants and weak market conditions in the U.S. In contrast, automotive sheet sales reached an all-time record in 2003 as sales of light trucks in the North American market remained strong, despite a 3% decline in overall automobile sales.  RPAA benefited from innovations in sport utility vehicle (SUV) lift-gate and hood technologies as a result of its continued close co-operation with customers.  Industrial product revenues improved despite ongoing weakness in the distributor market and severe import price competition, as Alcan continued to concentrate on new value-creating product applications.  Container and foilstock volumes were essentially unchanged from 2002 levels, while package and converter foil shipments continued to be adversely affected by imports.

South American economies showed improvement compared to 2002, but the business environment remained challenging.  As the only local can sheet producer, Alcan was well positioned to grow can sheet sales despite a drop in the domestic can market. New product introductions along with competitive advantages and improvements in the distribution chain also strengthened the Company's sales position in industrial products and light gauge markets.  Efforts to grow export sales continued in order to mitigate the impact of soft local demand.

Taking full advantage of can sheet qualifications achieved in 2002 and improvements in operating performance in 2003, Alcan Taihan Aluminum Limited (ATA) capitalized on strong demand in Korea and China, achieving record production and sales volumes. In order to reinforce its strategic position in Southeast Asia, Alcan increased its ownership position in Aluminium Company of Malaysia from 36% to 59%.  The additional ownership stake was acquired from Nippon Light Metal Company, Ltd., in exchange for Alcan's shareholding in Alcan Nikkei Siam Limited in Thailand.

Management's Discussion and Analysis

Recycling
Alcan continues to be the world's leader in recycling used aluminum beverage cans (UBCs). Alcan's U.S. operations recycled 23 billion UBCs in 2003, representing an estimated 45% of all aluminum cans recycled in the United States.  The Company operates three aluminum can recycling plants located in Oswego, New York; Greensboro, Georgia; and Berea, Kentucky, the largest UBC recycling facility in the world.

Brazil, with its 87% recycling rate, was recognized as the worldwide leader among countries where UBC recycling is not legally mandated.  The state-of-the-art recycling operation at the Company's Pinda  facility in Brazil recycles UBCs and scrap purchased from a third-party metal recycler. Throughout 2003, Alcan made strides in the North American and Brazilian markets in its efforts to strengthen the returnable aluminum can concept with the public.  In Asia, ATA's Ulsan plant is developing its recycling business using Alcan technology.

Rolled Products Europe

Rolled Products Europe (RPE) produces a broad variety of flat rolled products through its 11 plants, with AluNorf in Germany as its large-scale modern hub for several further downstream operations. RPE continues to optimize its market and product portfolio and its production system to better serve its customers and markets and further reduce costs and working capital.  RPE serves a number of European markets including beverage can, building and construction, foilstock and automotive markets, as well as some global markets, such as lithographic sheet and industrial plate.  Through the Pechiney transaction, Alcan has acquired rolled products facilities in Europe.  As a condition to the acquisition, Alcan has made commitments to the European Commission to divest certain groups of assets (refer to note 24 of the consolidated financial statements). As of the date of this report, Alcan has not yet determined which assets to divest.

Sales and Operating Revenues - RPE

The stronger euro and a change in sales mix led to increased sales.

Higher realized prices, as a result of the stronger euro and a change in business mix, more than offset the decline in RPE's shipments, leading to higher revenues in 2003.

While the European beverage can market was negatively impacted by the introduction of the deposit legislation in Germany, demand growth in Eastern Europe compensated for this situation. The demand for high quality lithographic sheet was strong, ending 4% above 2002 levels; however the distribution market was weak throughout the year.

Other end-use markets were mixed in 2003.  The demand for bright surface products was robust, whereas painted products and industrial plate showed only modest improvement over 2002. In addition to the difficult economic situation, the strengthening euro versus the U.S. dollar exacerbated the already very competitive market conditions.

As in the prior year, the demand for aluminum automotive sheet remained strong in 2003 and represented the key driver for overall market growth, with automotive sheet volumes up 12% over 2002. Through its automotive finishing facility in Nachterstedt, Germany, RPE is the exclusive supplier to the all-aluminum structured Jaguar XJ, which entered production in 2003 at an estimated build rate of 30,000 cars per year.

Management's Discussion and Analysis

Rolled Products Europe Third-Party Revenues - 2003

BGP and Shipments - RPE

* Includes shipments of rolled products and conversion of customer-owned metal.

Higher realized prices and tight cost control resulted in higher BGP.

In 2003, RPE continued to concentrate on value-added market sectors and products, while focusing on cost and working capital reduction in its operations. To support the working capital reduction initiative, a standard mill scheduling optimizer was introduced at several plants during the year.

Higher price realizations, a better product mix and plant restructuring programs were the main drivers for higher BGP compared to 2002.   The translation impact from the stronger euro and Swiss franc also helped to boost U.S. dollar results.

Engineered Products

The Engineered Products (EP) group manufactures extruded and cast aluminum products, cable, wire and rod, as well as composite materials such as aluminum-plastic, fibre-reinforced plastic and foam-plastic. The group provides value-added solutions for the aerospace, automotive and mass transportation markets, as well as for the architectural and display markets. The group also has one of the largest aluminum cable positions in North America. Its focus is to capitalize on profitable growth opportunities by leveraging its superior technology on a global basis.  As a result of the acquisition of Pechiney, the group will become a leading supplier of high value-added aircraft sheet and plate.

Management's Discussion and Analysis

Sales and BGP - Engineered Products

Group-wide cost reduction initiatives and the contribution from composites' acquisitions mid-year offset the weak economic environment and higher costs for raw materials.

In 2003, sales and BGP were 10% and 1% higher, respectively. Despite difficult business conditions for the extrusions and distribution markets in Europe and for the cable market in North America, cost reduction initiatives across all businesses helped mitigate the weak economic environment and higher costs for raw materials.  Revenues and BGP in 2003 also benefited from the acquisitions of Baltek and Uniwood/FomeCor, since renamed Alcan Gator-Cor (Gator-Cor).

Engineered Products Revenues - 2003

Engineered Products Business Units
Auto sales in Europe in 2003 were 1.7% below 2002, the second consecutive year of decline. The group's increased sales of safety systems for new model cars largely offset the impact of delayed projects in cockpit carriers, but were not sufficient to compensate for a reduction in die casting sales. Two new dedicated plants for the production of safety systems are under construction in North America, which will help to replicate the Company's strong European position. Sales of safety systems for high-speed trains, metro trams and light-rail systems were below 2002 record levels as limited public sector spending led to the postponement of some projects.

Results for Alcan's North American cable business declined primarily due to softening markets, competitive pricing and cost pressures.  Market demand for transmission cable failed to materialize, as electric utilities did not increase spending as expected.  Additionally, the commercial/industrial sector showed no improvement.  The only strong markets for cable products in 2003 were rod and strip and residential construction, driven by housing starts.  Overall, total cable sales were lower than in 2002. While price levels improved compared to 2002, margins remained under pressure due to higher raw material costs.

With the acquisition and rapid integration of Baltek and Alcan Gator-Cor in 2003, Alcan secured a leadership position in the growing market for composites materials. In July, Alcan acquired Baltek Corporation, the world's leading supplier of balsa-based structural core materials, for approximately $38 million. The addition of Baltek's high performance materials will significantly enhance Alcan's range of composite products.  In October, the acquisition of Gator-Cor for $95 million was completed. Gator-Cor is one of the largest U.S.-based manufacturers of foam-based display boards. The successful completion of this transaction enables Alcan to offer a wide range of products to its customers in the graphics market. In addition to growth opportunities, the acquisition offers value-creating synergies particularly in best-practice transfers, logistical and operational improvements. Gator-Cor's two products, Gator-Foam and Fome-Cor, are complementary to Alcan's existing product range and are also sold through the same distribution channels.

In line with Alcan's strategy to maximize value, the extrusions operations in Italy were sold in 2003, while investments were made to modernize the extrusions plants in Decin, Czech Republic, and Saint-Florentin, France. While volumes for extrusions were only slightly higher than in 2002, higher aluminum prices led to a 24% increase in sales and a 17% improvement in results.

Management's Discussion and Analysis

Alcan's European service centres business experienced a decline in volumes particularly during the second half of 2003.  The weakening U.S. dollar contributed to a 14% improvement in sales over 2002. Low volumes combined with high stock levels at distributors put pressure on margins and resulted in a 14% decline in results compared to 2002.

Packaging

Revenues reached a record $3.2 billion in 2003, confirming the Packaging group as a world leader in the end-use packaging markets for food, pharmaceuticals, personal care and tobacco. The group offers a broad technical and geographical range of packaging solutions using plastics, engineered films, paper and paperboard, as well as aluminum and other materials. It is continuing to capitalize on profitable growth opportunities, both internal and external, created by enhanced product ranges, new geographies and new customer relationships resulting from both the algroup and VAW Flexible Packaging (FlexPac) additions.  The acquisition of Pechiney at the end of 2003 will further build on Alcan's leading positions in flexible and pharmaceutical packaging and is expected to increase group sales to approximately $6 billion annually. 

Sales and BGP - Packaging

Cost reductions and the contribution of the FlexPac acquisition offset weak market conditions in 2003.

Cost reductions related to integration and restructuring programs helped offset pronounced weakness across most markets in the second half of 2003. Substantial BGP growth was achieved through the acquisition of FlexPac, which brought with it a substantial European flexible packaging position, a leadership presence in Asia and Turkey, and complementary materials technologies. At the close of 2003, the program to realize $40 million in annual integration savings was on track.  BGP was further enhanced as a result of foreign exchange benefits due mainly to the strength of the euro against the U.S. dollar.  Cash flow from operations was very strong, reflecting major efforts to reduce working capital and a disciplined approach to capital spending.

Packaging Revenues by Market - 2003

Management's Discussion and Analysis

Packaging Revenues by Region - 2003

Packaging Revenues by Type of Input - 2003

In April 2003, Alcan completed the acquisition of FlexPac for $330 million. The acquisition provides an excellent platform for profitable growth and is a good example of Alcan's focus on maximizing value. It significantly enhances Alcan's global leadership position in packaging by adding one of the world's leading producers of high-quality flexible packaging, expanding its footprint technologically and regionally, particularly in the rapidly developing markets of Asia. As a result of the acquisition, Alcan has world-class flexible packaging operations in Europe, Asia and the Americas.

Packaging Business Units
In 2003, foil and technical products continued to implement major restructuring programs in the U.K., Germany and Switzerland, which are key to maximizing shareholder value. At mid-year, profitability improved as the sector's fixed cost burden was reduced through plant consolidation. Profit targets were achieved through aggressive cost reduction programs in order to offset soft demand in major markets, particularly in the second half of the year.

The food flexibles market in Europe was flat overall in 2003, despite a promising start in the first quarter. The difficult conditions in the general food market were exacerbated by a hot summer and weak market conditions in France. Volume and margin pressures were, however, partly offset by the benefits of ongoing cost reduction and integration programs. A notable success in 2003 was the outstanding performance of the European food container business following the completion of an asset optimization program. The year also saw the opening of a major new, customer-dedicated facility in Spain. North American food flexibles consolidated its number of sites through a plant specialization program.  Ongoing growth in beverage pouch and roll labels, however, strengthened the Company's niche market position in the U.S. for these products.

The pharmaceutical and personal care sector posted strong sales gains compared to 2002. This was due primarily to continued worldwide growth of the pharmaceutical packaging business, which benefited from new product launches and market growth. Market pressures in plastics and specialty cartons have resulted in lower margins. In response, rationalization programs were instituted during the summer of 2003 and it is anticipated that the benefits will be fully realized in 2004.  

Alcan's tobacco packaging business grew its market position overall, with consolidation of the growth achieved in North America in 2002 and significant growth in the European marketplace in 2003.  Investments made in Germany, Turkey and Kazakhstan are expected to achieve full-year potential in 2004.  A new tobacco inner liner production facility was successfully established in Bridgnorth in the U.K. and the new metallizing and laminating plant in Berlin, Germany, was officially opened in June, achieving full production targets by year-end 2003.

Management's Discussion and Analysis

RISKS AND UNCERTAINTIES

For further details, refer to notes 24, 25 and 26 of the consolidated financial statements.

Risk Management

As a multinational company, which is to a large degree engaged in a commodity-related business, Alcan's financial performance (including Pechiney) is heavily influenced by fluctuations in metal prices and exchange rates. In order to reduce a portion of the associated risks, the Company uses a variety of financial instruments and commodity contracts. Clearly defined policies and management controls govern all risk management activities. Transactions in financial instruments for which there is no underlying exposure to the Company are prohibited, except for a small metal trading portfolio not exceeding 24,000 tonnes, which is marked to market. 

The decision whether and when to commence a hedge, along with the duration of the hedge, can vary from period to period depending on market conditions and the relative costs of various hedging instruments. The duration of a hedge is always linked to the timing of the underlying exposure, with the connection between the two being constantly monitored to ensure effectiveness.

Sensitivities

Estimated after-tax effect on Alcan's net income of:

	Change in	US$M	US$
	rate/price		per share
Economic impact of changes in
period-average exchange rates
Canadian dollar	+1 US cent	$  (11)	$ (0.03)
Australian dollar	+1 US cent	$    (3)	$ (0.01)
Euro	+1 US cent	$    (1)	$ (0.00)
Balance sheet translation impact of changes
in period-end exchange rates
Canadian dollar	+1 US cent	$  (17)	$ (0.05)
Australian dollar	+1 US cent	$    (4)	$ (0.01)
Economic impact of changes in
period-average LME prices *
Aluminum	+US$100/t	$ 180	$ 0.49

*   Average price realizations across Alcan's total product portfolio generally lag LME price changes by three to six months.  Changes in local and regional premia may also impact aluminum price sensitivity.  All sensitivities reflect the acquisition of Pechiney.   

Foreign Currency Exchange
Exchange rate movements, particularly between the Canadian dollar and the U.S. dollar, have an impact on Alcan's costs and therefore its net results. Because the Company has significant operating costs denominated in Canadian dollars while its functional currency is the U.S. dollar, it benefits from a weakening in the Canadian dollar but, conversely, is disadvantaged if it strengthens.

The Company's deferred income tax liabilities and net monetary liabilities for operations in Canada and Australia are translated into U.S. dollars at current rates. The resultant exchange gains or losses are included in income and fluctuate from quarter to quarter depending on the changes in exchange rates. A decrease in the Canadian and Australian dollars results in a favourable effect, whereas an increase results in an unfavourable impact. 

Aluminum Prices
Depending on market conditions and logistical considerations, Alcan may sell primary aluminum to third parties and may purchase primary aluminum and secondary aluminum, including scrap, on the open market to meet the requirements of its fabricating businesses. In addition, depending on pricing arrangements with fabricated products customers, Alcan may hedge some of its purchased metal supply in support of those sales. Through the use of forward purchase and sale contracts and options, Alcan seeks to limit the impact of lower metal prices.

Management's Discussion and Analysis

Critical Accounting Policies and Estimates

The Company's significant accounting policies are presented in note 2 to the consolidated financial statements.  The critical accounting policies and estimates described below are those that are both most important to the portrayal of the Company's financial condition and results and require management's most difficult, subjective or complex judgments, often as a result of the need to make estimates about the effect of matters that are inherently uncertain.

Post-retirement Benefits
The costs of pension and other post-retirement benefits are calculated based on assumptions determined by management, with the assistance of independent actuarial firms and consultants.  These assumptions include the long-term rate of return on pension assets, discount rates for pension and other post-retirement benefit obligations, expected service period, salary increases, retirement ages of employees and health care cost trend rates.  These assumptions are subject to the risk of change as they require significant judgment and have inherent uncertainties that management may not be able to control. The two most significant assumptions used to calculate the obligations in respect of employee benefit plans are the discount rates for pension and other post-retirement benefits, and the expected return on assets.  The discount rate for pension and other post-retirement benefits is the interest rate used to determine the present value of benefits.  It is based on the yield on long-term high-quality corporate fixed income investments at the end of each fiscal year.  The weighted-average discount rate was 5.6% as at December 31, 2003 compared to 5.8% for 2002 and 6.1% for 2001. An increase in the discount rate of 0.5%, assuming inflation remains unchanged, will result in a reduction of approximately $554 million in the pension and other post-retirement obligations and a reduction of approximately $46 million in the net periodic benefit cost. A reduction in the discount rate by 0.5%, assuming inflation remains unchanged, will result in an increase of approximately $593 million in the pension and other post-retirement obligations and an increase of approximately $48 million in the net periodic benefit cost. The calculation of the estimate of the expected return on assets is described in note 28, Post-retirement Benefits.  The weighted-average expected return on assets was 7.1% for 2003, 7.1% for 2002 and 7.3% for 2001.  The expected return on assets is a long-term assumption whose accuracy can only be measured over a long period based on past experience.  Over the 15-year period ended December 31, 2003, the average actual return on assets exceeded the expected return by 1.5% per year. A variation in the expected return on assets by 0.5% will result in a variation of approximately $37 million in the net periodic benefit cost.

Environmental Liabilities
Environmental expenses are accrued on an undiscounted basis when it is probable that a liability for past events exists. In determining whether a liability exists, the Company is required to make judgments as to the probability of a future event occurring.  The Company's judgments regarding the probability are subject to the risk of change, as it must make assumptions about events that may or may not occur in the distant future.  If the Company's judgments differ from those of legal or regulatory authorities, the provisions for environmental expense could increase or decrease significantly in future periods. The Company consults with its external legal counsel on all material environmental matters.  In order to estimate the likelihood of a future event occurring, the Company and its external legal counsel exercise their professional judgement based on case facts and experience.

Property, Plant and Equipment
Due to changing economic and other circumstances, the Company regularly reviews its property, plant and equipment ("PP&E").  Accounting standards require that an impairment loss be recognized when the carrying amount of a long-lived asset held for use is not recoverable and exceeds its fair value.  The amount of impairment to be recognized is calculated by subtracting the fair value of the asset from the carrying amount of the asset. As discussed in the notes to the consolidated financial statements, the Company reviewed specific PP&E for impairment in 2003 due to situations where circumstances indicated that the carrying value of specific assets could not be recovered.  The Company made assumptions about the undiscounted sum of the expected future cash flows from these assets and determined that they were less than their carrying amount, resulting in the recognition of an impairment in accordance with GAAP. In estimating future cash flows, the Company uses its internal plans.  These plans reflect management's best estimates; however they are subject to the risk of change as they have inherent uncertainties that management may not be able to control.  Actual results could differ significantly from those estimates. The Company cannot predict whether an event that triggers an impairment of PP&E will occur or when it will occur, nor can it estimate what effect it will have on the carrying values of these assets.  However, the effect could be material.

Management's Discussion and Analysis

Goodwill
As reported in note 3, Accounting Changes, effective January 2002, goodwill is no longer amortized but is tested annually for impairment at the reporting unit level.  Impairment is determined by comparing the fair value of the reporting unit to its carrying value.  The fair value of a reporting unit and assets and liabilities within a reporting unit may be determined using alternative methods for market valuation, including quoted market prices, discounted cash flows and net realizable values.  Upon adoption of this standard, an impairment of $748 million (including $8 million related to assets held for sale) was identified in the goodwill balance as at January 1, 2002, and was charged to opening retained earnings in 2002.  Amortization expense recognized in the statement of income was $72 million in 2001. In estimating the fair value of a reporting unit, the Company uses acceptable valuation techniques and makes assumptions and estimates in a number of areas, including future cash flows and discount rates.  In estimating future cash flows, the Company uses its internal plans.  These plans reflect management's best estimates; however, they are subject to change as they have inherent uncertainties that management may not be able to control.  Actual results could differ significantly from those estimates.

Income Taxes
The provision for income taxes is calculated based on the expected tax treatment of transactions recorded in the Company's consolidated financial statements.  Income tax assets and liabilities, both current and deferred, are measured according to the income tax legislation that is expected to apply when the asset is realized or the liability settled.  The Company regularly reviews the recognized and unrecognized deferred income tax assets to determine whether a valuation allowance is required or needs to be adjusted.  In forming a conclusion about whether it is appropriate to recognize a tax asset, the Company must use judgment in assessing the potential for future recoverability while at the same time considering past experience.  All available evidence is considered in determining the amount of a valuation allowance.  If the Company's interpretations differ from those of tax authorities or judgments with respect to tax losses change, the income tax provision could increase or decrease, potentially significantly, in future periods.

Business Combinations
The Company accounts for business acquisitions using the purchase method.  Under this method, the cost of a purchase is allocated to the estimated fair values of the net assets acquired.   When the Company completes an acquisition towards the end of its fiscal year or the acquired enterprise is very large, the Company makes tentative estimates of the fair values of the net assets acquired as it is still in the process of gathering all the relevant data.  Accordingly, the final fair values of the net assets acquired could differ materially from the amounts presented in the 2003 consolidated financial statements.   In the case of the Pechiney acquisition completed on December 15, 2003, the significant elements for which the fair values could differ include PP&E, intangible assets, goodwill, deferred income taxes, deferred charges and other assets, and deferred credits and other liabilities.  Changes in the fair values of these elements could have a significant impact on the Company's net income, including depreciation and amortization, and income taxes.  The Company expects to complete the final valuation of Pechiney's net assets during 2004.

Cautionary Statement
Statements made in this report that describe the Company's or management's objectives, projections, estimates, expectations or predictions of the future may be "forward-looking statements" within the meaning of securities laws, which can be identified by the use of forward-looking terminology such as "believes", "expects", "may", "will", "should", "estimates", "anticipates" or the negative thereof or other variations thereon. The Company cautions that, by their nature, forward-looking statements involve risk and uncertainty and that the Company's actual actions or results could differ materially from those expressed or implied in such forward-looking statements or could affect the extent to which a particular projection is realized. Important factors that could cause such differences include global supply and demand conditions for aluminum and other products, aluminum ingot prices and changes in raw materials' costs and availability, changes in the relative value of various currencies, cyclical demand and pricing within the principal markets for the Company's products, changes in government regulations, particularly those affecting environmental, health or safety compliance, economic developments, relationships with and financial and operating conditions of customers and suppliers, the effects of integrating acquired businesses and the ability to attain expected benefits and other factors within the countries in which the Company operates or sells its products and other factors relating to the Company's ongoing operations including, but not limited to, litigation, labour negotiations and fiscal regimes. The aluminum market overview contained in this report is based on research that includes information from sources believed to be reliable, but Alcan does not make any representation that it is accurate in every detail. The aluminum market overview represents the Company's views as of March 5, 2004.

Responsibility for the Annual Report
Alcan’s management is responsible for the preparation, integrity and fair presentation of the financial statements and other information in the Annual Report. The financial statements have been prepared in accordance with Canadian generally accepted accounting principles and include, where appropriate, estimates based on the best judgment of management. A reconciliation with generally accepted accounting principles in the United States is also presented. Financial and operating data elsewhere in the Annual Report are consistent with that contained in the accompanying financial statements.

Alcan’s policy is to maintain systems of internal accounting, administrative and disclosure controls of high quality consistent with reasonable cost. Such systems are designed to provide reasonable assurance that the financial information is accurate and reliable and that Company assets are adequately accounted for and safeguarded. The Board of Directors oversees the Company’s systems of internal accounting, administrative and disclosure controls through its Audit Committee, which is comprised of directors who are not employees. The Audit Committee meets regularly with representatives of the shareholders’ independent auditors and management, including internal audit staff, to satisfy themselves that Alcan’s policy is being followed. In addition, a Disclosure Committee of management has been established to manage disclosure of corporate information and oversee the functioning of the Company’s disclosure controls and procedures.

The Audit Committee has recommended the appointment of PricewaterhouseCoopers LLP as the independent auditors, subject to approval by the shareholders.

The financial statements have been reviewed by the Audit Committee and, together with the other required information in this Annual Report, approved by the Board of Directors. In addition, the financial statements have been audited by PricewaterhouseCoopers LLP, whose report is provided below.

((Signature))
Travis Engen, President and Chief Executive Officer

((Signature))
Geoffery E. Merszei, Executive Vice-President and Chief Financial Officer
March 5, 2004

OECD Guidelines
The Organization for Economic Cooperation and Development (OECD), which consists of 30 industrialized countries including Canada, has established guidelines setting out an acceptable framework of reciprocal rights and responsibilities between multinational enterprises and host governments. Alcan supports and complies with the OECD guidelines and has a Worldwide Code of Employee and Business Conduct, which is consistent with them.

Auditors’ Report

To the Shareholders of Alcan Inc.

We have audited the consolidated balance sheets of Alcan Inc. as at December 31, 2003, 2002 and 2001 and the consolidated statements of income, retained earnings and cash flows for each of the years in the three-year period ended December 31, 2003. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing standards in Canada and the United States. Those standards require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of the Company as at December 31, 2003, 2002 and 2001 and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2003 in accordance with Canadian generally accepted accounting principles.

((Signature))
PricewaterhouseCoopers LLP, Chartered Accountants                                 Montreal, Canada, March 5, 2004

Comments by Auditors on Canada-United States Reporting Difference
United States reporting standards for auditors require the addition of an explanatory paragraph (following the opinion paragraph) when the financial statements are affected by a change in accounting principle, such as those changes described in note 3 to the consolidated financial statements. Although we conducted our audits in accordance with both Canadian and United States generally accepted auditing standards, our report to the shareholders dated March 5, 2004 is expressed in accordance with Canadian reporting standards which do not permit a reference to such changes in accounting principles in the auditors’ report when the changes are properly accounted for and adequately disclosed in the financial statements.

((Signature))
PricewaterhouseCoopers LLP, Chartered Accountants                                 Montreal, Canada, March 5, 2004

Consolidated Financial Statements

Consolidated Statement of Income (in millions of US$, except per share amounts)
Year ended December 31	2003	2002	2001
Sales and operating revenues	13,640	12,296	12,385
Costs and expenses
Cost of sales and operating expenses	10,802	9,716	9,786
Depreciation and amortization (notes 2 and 7)	923	835	798
Selling, administrative and general expenses	746	571	544
Research and development expenses	140	115	135
Interest	218	202	252
Restructuring, impairment and other special charges (note 9)	(38)	60	654
Goodwill impairment (note 7)	28	-	-
Other expenses (income) - net (note 14)	193	113	112
	13,012	11,612	12,281
Income from continuing operations
before income taxes and other items	628	684	104
Income taxes (note 10)	325	295	44
Income from continuing operations before other items	303	389	60
Equity income	3	3	3
Minority interests	(16)	(3)	13
Income from continuing operations
before amortization of goodwill	290	389	76
Amortization of goodwill (note 7)	-	-	72
Income from continuing operations	290	389	4
Loss from discontinued operations (note 4)	(123)	(15)	(2)
Net income	167	374	2
Dividends on preference shares	7	5	8
Net income (Loss) attributable to common shareholders	160	369	(6)
Net income (Loss) per common share – basic
Income from continuing operations
before amortization of goodwill	0.88	1.19	0.21
Amortization of goodwill	-	-	0.22
Income (Loss) from continuing operations	0.88	1.19	(0.01)
Income (Loss) from discontinued operations	(0.38)	(0.04)	(0.01)
Net income (Loss) per common share – basic	0.50	1.15	(0.02)
Net income (Loss) per common share – diluted
Income from continuing operations
before amortization of goodwill	0.88	1.18	0.21
Amortization of goodwill	-	-	0.22
Income (Loss) from continuing operations	0.88	1.18	(0.01)
Income (Loss) from discontinued operations	(0.38)	(0.04)	(0.01)
Net income (Loss) per common share - diluted	0.50	1.14	(0.02)
Dividends per common share	0.60	0.60	0.60

The accompanying notes are an integral part of the financial statements.

Consolidated Statement of Retained Earnings (in millions of US$)
Year ended December 31	2003	2002	2001
Retained earnings – beginning of year	3,503	4,074	4,272
Accounting change – Impairment of goodwill
as at January 1, 2002 (note 3)	-	(748)	–
	3,503	3,326	4,272
Net income	167	374	2
Dividends
– Common	(193)	(192)	(192)
– Preference	(7)	(5)	(8)
Retained earnings – end of year (note 23)	3,470	3,503	4,074

The accompanying notes are an integral part of the financial statements.

Consolidated Balance Sheet (in millions of US$)
December 31		2003	2002	2001
ASSETS
Current assets
Cash and time deposits		803	109	116
Trade receivables (net of allowances of $90 in 2003,
$58 in 2002 and $51 in 2001) (notes 2, 12 and 13)		3,215	1,252	1,183
Other receivables		824	542	526
Deferred income taxes (note 10)		50	-	-
Inventories
	Aluminum operating segments
	Aluminum	944	901	870
	Raw materials	432	390	413
	Other supplies	330	296	268
		1, 706	1,587	1,551
	Packaging operating segment	479	368	368
	Pechiney operating segment	1, 923	-	-
		4, 108	1,955	1,919
Current assets held for sale (note 4)		231	92	73
Total current assets		9,231	3,950	3,817
Deferred charges and other assets (note 15)		926	666	715
Deferred income taxes (note 10)		745	60	83
Property, plant and equipment (note 16)
Cost (excluding Construction work in progress)		23, 463	17,618	16,084
Construction work in progress		673	566	607
Accumulated depreciation		(9,064)	(8,093)	(7,125)
		15, 072	10,091	9,566
Intangible assets, net of accumulated amortization
of	$88 in 2003, $53 in 2002 and $26 in 2001 (note 7)	1, 059	318	285
Goodwill (note 7)		4, 789	2,303	2,874
Long-term assets held for sale (note 4)		135	210	201
Total assets		31,957	17,598	17,541

The accompanying notes are an integral part of the financial statements.

Consolidated Balance Sheet (in millions of US$)
December 31	2003	2002	2001
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Payables and accrued liabilities	5,187	2,283	2,281
Short-term borrowings	1,802	381	553
Debt maturing within one year (note 19)	356	295	652
Deferred income taxes (note 10)	86	-	-
Current liabilities of operations held for sale (note 4)	113	58	49
Total current liabilities	7,544	3,017	3,535
Debt not maturing within one year (notes 19 and 26)	7,604	3,186	2,884
Deferred credits and other liabilities (note 18)	3,268	1,418	1,130
Deferred income taxes (note 10)	1,983	1,180	1,069
Long-term liabilities of operations held for sale (note 4)	319	22	21
Minority interests	524	150	132
Shareholders’ equity
Redeemable non-retractable preference shares (note 20)	160	160	160
Common shareholders’ equity
Common shares (note 21)	6,426	4,703	4,687
Contributed surplus (notes 6 and 22)	80	-	-
Retained earnings (note 23)	3,470	3,503	4,074
Common shares held by a subsidiary (note 21)	(56)	-	-
Deferred translation adjustments (note 25)	635	259	(151)
	10,555	8,465	8,610
	10,715	8,625	8,770
Commitments and contingencies (note 24)
Total liabilities and shareholders’ equity	31,957	17,598	17,541
The accompanying notes are an integral part of the financial statements.
Approved by the Board:
((Signature))
Travis Engen, Director
((Signature))
L. Denis Desautels, Director

Consolidated Statement of Cash Flows (In millions of US$)
Year ended December 31	2003	2002	2001
Operating activities
Income from continuing operations	290	389	4
Adjustments to determine cash from operating activities:
Depreciation and amortization	923	835	798
Amortization of goodwill	-	-	72
Deferred income taxes	47	71	(149)
Asset impairment provisions	86	33	232
Loss (Gain) on sales of businesses and investment – net	(44)	(27)	123
Change in operating working capital
Change in receivables	185	154	120
Change in inventories	71	90	83
Change in payables	26	(91)	(60)
Total change in operating working capital	282	153	143
Change in deferred charges, other assets,
deferred credits and other liabilities – net	222	150	133
Other – net	27	(1)	19
Cash from operating activities in continuing operations	1,833	1,603	1,375
Cash from operating activities in
discontinued operations (note 4)	7	11	12
Cash from operating activities	1,840	1,614	1,387
Financing activities
New debt	3,687	848	1,852
Debt repayments	(642)	(1,138)	(1,779)
	3,045	(290)	73
Short-term borrowings – net	604	(209)	(479)
Sale of receivables	-	-	300
Common shares issued*	42	16	61
Dividends
Alcan shareholders (including preference)	(200)	(197)	(200)
Minority interests	(11)	(6)	(2)
Cash from (used for) financing activities
in continuing operations	3,480	(686)	(247)
Cash from (used for) financing activities in
discontinued operations (note 4)	(28)	2	-
Cash from (used for) financing activities	3,452	(684)	(247)

* Excludes the non-cash impact of common shares issued in exchange for Pechiney securities. See note 6 – Acquisition of Pechiney.

The accompanying notes are an integral part of the financial statements.

Consolidated Statement of Cash Flows (In millions of US$)
Year ended December 31	2003	2002	2001
Investment activities
Property, plant and equipment	(888)	(709)	(1,090)
Business acquisitions, net of cash and time deposits acquired
(note 6 and 17)	(3,817)	(345)	(404)
	(4,705)	(1,054)	(1,494)
Proceeds from disposal of businesses, investments
and other assets, net of cash of companies deconsolidated	63	118	239
Cash used for investment activities
in continuing operations	(4,642)	(936)	(1,255)
Cash from (used for) investment activities
in discontinued operations (note 4)	21	(16)	(20)
Cash used for investment activities	(4,621)	(952)	(1,275)
Effect of exchange rate changes on cash and time deposits	22	13	(7)
Increase (Decrease) in cash and time deposits	693	(9)	(142)
Cash and time deposits – beginning of year	110	119	261
Cash and time deposits – end of year
in continuing operations	803	109	116
Cash and time deposits – end of year
in discontinued operations	-	1	3
Cash and time deposits – end of year	803	110	119

The accompanying notes are an integral part of the financial statements.

Notes to Consolidated Financial Statements
        (in millions of US$, except where indicated)

    Note 1. Nature of Operations Alcan is engaged, together with subsidiaries, joint ventures and related companies, in a variety of aspects of the aluminum and packaging businesses on an international scale. Its operations include the mining and processing of bauxite, the basic aluminum ore; the refining of bauxite into alumina; the generation of electric power for use in smelting aluminum; the smelting of aluminum from alumina; the recycling of used and scrap aluminum; the fabrication of aluminum, aluminum alloys and non-aluminum materials into semi-fabricated and finished products; the producing and converting of specialty packaging and packaging products for many industries including the food, pharmaceutical, cosmetic and health sectors; the distribution and marketing of aluminum, non-aluminum and packaging products; and, in connection with its aluminum operations, the production and sale of industrial chemicals and licensing of alumina and aluminum production technology and related equipment.

     Alcan, together with its subsidiaries, joint ventures and related companies, has bauxite holdings in five countries, produces alumina in three countries, smelts primary aluminum in seven countries, operates rolled products plants in nine countries, has engineered products plants in 20 countries, has packaging facilities in 18 countries and has sales outlets and maintains warehouse inventories in the larger markets of the world. Alcan also operates a global transportation network that includes the operation of bulk cargo vessels, port facilities and freight trains.

     Pechiney, headquartered in Paris, France, has bauxite holdings in two countries, produces alumina in four countries, smelts primary aluminum in six countries, operates fabrication plants and a research center in six countries, has packaging facilities in 18 countries, and has an international trade division, consisting of a sales network, trading activities and distribution network in 60 countries.

    Pechiney – Basis of Presentation As described in note 6 – Acquisition of Pechiney, Alcan acquired Pechiney on December 15, 2003. Pechiney refers to Pechiney, a French société anonyme, and, where applicable, its consolidated subsidiaries. The balance sheet of Pechiney is included in the consolidated financial statements as at December 31, 2003, and the statement of income of Pechiney will be included in the consolidated financial statements beginning January 1, 2004.

    Note 2. Summary of Significant Accounting Policies Generally Accepted Accounting Principles These financial statements conform with Canadian generally accepted accounting principles (GAAP). Note 8 – Differences between Canadian and United States Generally Accepted Accounting Principles (GAAP), provides an explanation and reconciliation of differences between Canadian and U.S. GAAP.

    Use of Estimates The preparation of financial statements in conformity with GAAP in Canada and the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

    Principles of Consolidation
These consolidated financial statements include the accounts of subsidiaries that are controlled by Alcan, all of which are majority owned. Joint ventures, irrespective of percentage of ownership, are proportionately consolidated to the extent of Alcan’s participation. Companies subject to significant influence are accounted for using the equity method. Under the equity method, Alcan’s investment is increased or decreased by Alcan’s share of the undistributed net income or loss and deferred translation adjustments since acquisition. Investments in companies in which Alcan does not have significant influence are accounted for using the cost method. Under the cost method, dividends received are recorded as income.

     Intercompany balances and transactions, including profits in inventories, are eliminated in the consolidated financial statements.

All business combinations are accounted for under the purchase method.

    Foreign Currency
The financial statements of self-sustaining foreign operations (located principally in Europe and Asia) are translated into U.S. dollars at prevailing exchange rates. Revenues and expenses are translated at average exchange rates for the year while assets and liabilities are translated at exchange rates in effect at year-end. Differences arising from exchange rate changes are included in the Deferred translation adjustments (DTA) component of Common shareholders’ equity. If there is a reduction in the Company’s ownership in a foreign operation, the relevant portion of DTA is recognized in Other expenses (income) – net or Restructuring, impairment and other special charges at that time. All other operations, including most of those in Canada, are considered to be integrated foreign operations having the U.S. dollar as the functional currency. Under this method, monetary items are translated at current rates and translation gains and losses are included in income. Non-monetary items are translated at historical rates.

     The Company has entered into foreign currency contracts and options that are designated as hedges of certain future identifiable foreign currency revenue and operating cost exposures. The exchange gains or losses are not recorded in the statement of income, but are deferred on the balance sheet until the contract is settled or the designated transaction is recognized. They are then included, together with related hedging costs, in Sales and operating revenues, Cost of sales and operating expenses, Depreciation and amortization or Property, plant and equipment, as applicable. For contracts that are settled, but the hedged transaction has not occurred, the gains or losses are deferred on the balance sheet until the recognition of the underlying transaction.

Foreign currency forward contracts and swaps are also used to hedge certain foreign currency denominated debt and intercompany foreign currency denominated loans. Unrealized currency gains or losses on these contracts are recorded in earnings concurrently with the unrealized gains or losses on the foreign currency denominated debt and intercompany foreign currency denominated loans being hedged.

Other gains and losses from foreign currency denominated items are included in Other expenses (income) – net.

    Revenue Recognition
The Company recognizes revenue when significant risks and benefits of ownership are transferred, which coincides with the shipment of goods or rendering of services.

    Shipping and Handling Costs
Amounts charged to customers related to shipping and handling are included in Sales and operating revenues, and related shipping and handling costs are recorded as a reduction of sales.

    Commodity Contracts and Options
Virtually all of the forward metal contracts and options serve to hedge certain future identifiable aluminum price exposures. Gains or losses on these hedges are not recorded in the financial statements until early settlement or recognition of the hedged transaction. They are then included, together with related hedging costs, in Sales and operating revenues or Cost of sales and operating expenses, as applicable, concurrently with recognition of the underlying items being hedged.

Unrealized gains and losses on oil and natural gas futures contracts, swaps and options are generally not recorded in the financial statements until recognition of the hedged transactions. In circumstances where a hedging relationship cannot be demonstrated, the derivatives are recorded at fair value and the unrealized gains and losses recorded in earnings.

In circumstances where the Company’s purchase or sales contracts for a commodity contain derivative characteristics, these contracts are generally not recorded at fair value as they involve quantities that are expected to be used or sold in the normal course of business over a reasonable period of time.

    Interest Rate Swaps
Amounts receivable or payable under interest rate swaps are recorded in Interest concurrently with the interest expense on the underlying debt. Unrealized gains and losses are not recorded in the financial statements as these contracts hedge interest costs on certain debt.

    Inventories
Aluminum, raw materials, packaging products and other supplies are stated at cost (determined for the most part on the monthly average cost method) or net realizable value, whichever is lower.

    Capitalization of Interest Costs
The Company capitalizes interest costs associated with the financing of major capital expenditures up to the time the asset is ready for its intended use.

    Sale of Receivables
When the Company sells certain receivables, it retains servicing rights and provides limited recourse, which constitute retained interests in the sold receivables. No servicing asset or liability is recognized in the financial statements as the fees received by the Company reflect the fair value of servicing these receivables. The related purchase discount is included in Other expenses (income) – net.

    Property, Plant and Equipment
Property, plant and equipment is recorded at cost. An impairment loss is recognized when the carrying amount of these assets is not recoverable and exceeds their fair value. Depreciation is calculated on the straight-line method using rates based on the estimated useful lives of the respective assets. The principal rates range from 2% to 10% for buildings and structures, 1% to 4% for power assets and 3% to 20% for chemical, smelter and fabricating assets.

    Goodwill
As of January 2002, goodwill is no longer amortized and is carried at the lower of carrying value and fair value. Goodwill is tested for impairment on an annual basis at the reporting unit level. Fair value is determined using discounted cash flows.

Under accounting standards in effect until December 31, 2001, goodwill was recorded at cost less accumulated amortization and was amortized over a period of 40 years using the straight-line method of amortization. Periodic assessments were made to determine whether there was permanent impairment in the remaining unamortized goodwill balance based on the undiscounted cash flows of the underlying operations. See note 3 – Accounting Changes; Goodwill and Other Intangible Assets.

    Intangible Assets
Intangible assets are primarily trademarks, patented and non-patented technology, purchase contracts and customer contracts all of which have finite lives. Intangible assets are recorded at cost less accumulated amortization and are generally amortized over 15 years using the straight-line method of amortization. An impairment loss is recognized when the carrying amount of the assets is not recoverable and exceeds their fair value.

    Environmental Costs and Liabilities
Environmental expenses are accrued on an undiscounted basis when it is probable that a liability for past events exists. Such liabilities are reviewed and adjusted as required on a regular basis to reflect current conditions. For future removal and site restoration costs, provision is made in a systematic manner by periodic charges to income, except for assets that are no longer in use, in which case full provision is charged immediately to income. Environmental expenses are normally included in Cost of sales and operating expenses except for large, unusual amounts which are included in Other expenses (income) – net. For 2001, the environmental provisions for treatment costs relating to spent potlining in Quebec and British Columbia, Canada, and for remediation costs relating to red mud disposal at other sites in Canada and the United Kingdom were included in Restructuring, impairment and other special charges. Accruals related to environmental costs are included in Payables and accrued liabilities and Deferred credits and other liabilities.

Environmental expenditures of a capital nature that extend the life, increase the capacity or improve the safety of an asset or that mitigate or prevent environmental contamination that has yet to occur are included in Property, plant and equipment and are depreciated generally over the remaining useful life of the underlying asset.

    Post-retirement Benefits
The costs of pension benefits and post-retirement benefits other than pensions are recognized on an accrual basis over the working lives of employees. Post-retirement benefit obligations are actuarially calculated using management’s best estimates and based on expected service period, salary increases and retirement ages of employees. Post-retirement benefit expense includes the actuarially computed cost of benefits earned during the current service period, the interest cost on accrued obligations, the expected return on plan assets based on fair market value and the straight-line amortization of net actuarial gains and losses and adjustments due to plan amendments. All net actuarial gains and losses are amortized over the expected average remaining service life of the employees.

    Stock Options and Other Stock-Based Compensation
The Company does not recognize compensation expense in earnings for options granted under the share option plan for employees as stock options are granted at an exercise price equal to the market price of the underlying share on the grant date. The pro forma effect, as if the Company had elected to recognize compensation expense for stock options using the fair value method, is disclosed in note 22 – Stock Options and Other Stock-Based Compensation. Other stock-based compensation arrangements that can be settled in cash result in the recognition of compensation expense over the vesting period of the awards.

    Income Taxes
The Company uses the liability method for income taxes, under which deferred income tax assets and liabilities are recorded based on the temporary differences between the accounting basis and the tax basis of assets and liabilities. Deferred income tax assets and liabilities are revalued for all enacted or substantially enacted changes in tax rates and exchange rates. The future recoverability of recognized deferred income tax assets is assessed on a regular basis to determine whether a valuation allowance is required.

    Cash and Time Deposits
All time deposits have original maturities of 90 days or less and qualify as cash equivalents.

    Recently Issued Accounting Standards
    Asset Retirement Obligations
The Canadian Institute of Chartered Accountants (CICA) issued Section 3110, Asset Retirement Obligations, which will be effective for the Company’s fiscal year beginning on January 1, 2004. This standard establishes accounting standards for the recognition, measurement and disclosure of liabilities and the associated asset retirement cost for legal obligations relating to the retirement of a tangible long-lived asset. Under this standard, a liability would generally be recognized for such an obligation at its fair value when incurred and a corresponding asset retirement cost would be added to the carrying amount of the related asset. The Company expects the impact to be similar to that of the asset retirement obligations disclosed for U.S. GAAP. See note 8 – Differences between Canadian and United States Generally Accepted Accounting Principles (GAAP).

    Consolidation of Variable Interest Entities The CICA issued accounting guideline AcG-15, Consolidation of Variable Interest Entities, which will be effective for the Company’s annual and interim periods beginning on January 1, 2005. The guideline provides guidance as to when to apply consolidation principles to certain entities that are subject to control on a basis other than ownership of voting shares and thus determining when an enterprise includes the assets, liabilities and results of activities of such an entity (a variable interest entity) in its consolidated financial statements. The Company does not expect its financial statements to be significantly impacted by this guideline.

    Hedging Relationships The CICA issued accounting guideline AcG-13, Hedging Relationships, which establishes certain conditions regarding when hedge accounting may be applied and which is effective for the Company’s annual and interim periods beginning on January 1, 2004. The Company is preparing for implementation of the hedging provisions. Each hedging relationship will be subject to an effectiveness test on a regular basis for reasonable assurance that it is and will continue to be effective. Under these rules, the fair value of derivatives will be recorded on the balance sheet and any derivative instrument that does not qualify for hedge accounting will be reported on a mark-to-market basis in earnings.

    Stock-Based Compensation and Other Stock-Based Payments
The CICA issued an amendment to Section 3870, Stock-Based Compensation and other Stock-Based Payments, which is effective for annual and interim periods beginning on January 1, 2004. The amendment requires the recognition of an expense computed using the fair value method of accounting for all stock options and payments at grant date. The standard is to be applied retroactively. The Company discloses a pro forma stock option expense using the fair value method in note 22 – Stock Options and Other Stock-Based Compensation.

    Generally Accepted Accounting Principles
In July 2003, the CICA issued Section 1100, Generally Accepted Accounting Principles, which will be effective for the Company’s fiscal year beginning on January 1, 2004. This standard establishes accounting standards for financial reporting in accordance with GAAP. It defines primary sources of GAAP and requires that the Company apply every relevant primary source. The Company is currently in the process of evaluating the impact of this new standard on its financial statements.

    General Standards of Financial Statement Presentation
In July 2003, the CICA issued Section 1400, General Standards of Financial Statement Presentation, which will be effective for the Company’s fiscal year beginning on January 1, 2004. This standard clarifies what constitutes fair presentation in accordance with GAAP, which involves providing sufficient information in a clear and understandable manner about certain transactions or events of such size, nature and incidence that their disclosure is necessary to understand the Company’s financial statements.

    Note 3. Accounting Changes     Goodwill and Other Intangible Assets
On January 1, 2002, the Company adopted the new standard of the CICA Section 3062, Goodwill and Other Intangible Assets. Under this standard, goodwill and other intangible assets with an indefinite life are no longer amortized but are carried at the lower of carrying value and fair value. Goodwill and other intangible assets with an indefinite life are tested for impairment on an annual basis.

Goodwill is tested for impairment using a two-step test. Under the first step, the fair value of a reporting unit, based upon discounted cash flows, is compared to its net carrying amount. If the fair value is greater than the carrying amount, no impairment is deemed to exist. However, if the fair value is less than the carrying amount, a second test must be performed whereby the fair value of the reporting unit’s goodwill must be estimated to determine if it is less than its carrying amount. Fair value of goodwill is estimated in the same way as goodwill is determined at the date of acquisition in a business combination, that is, the excess of the fair value of the reporting unit over the fair value of the identifiable net assets of the reporting unit.

An impairment of $748 (including $8 relating to assets held for sale) was identified in the goodwill balance as at January 1, 2002, and was charged to opening retained earnings in 2002 upon adoption of the new accounting standard. Any further impairment arising subsequent to January 1, 2002, is taken as a charge against income. As a result of the new standard, the Company no longer amortizes goodwill. The amount of goodwill amortization was $72 in 2001.

    Impairment of Long-Lived Assets On January 1, 2003, the Company early adopted the CICA Section 3063, Impairment of Long-Lived Assets. Under this standard, an impairment loss is recognized when the carrying amount of a long-lived asset held for use is not recoverable and exceeds its fair value. No impairment charges were recorded upon adoption of this new standard. Impairment charges recorded during 2003 are described in note 4 – Discontinued Operations and Assets Held for Sale, note 9 – Restructuring, Impairment and Other Special Charges and note 14 – Other Expenses (Income) – Net.

    Disposal of Long-Lived Assets and Discontinued Operations On January 1, 2003, the Company early adopted the the CICA Section 3475, Disposal of Long-Lived Assets and Discontinued Operations. Under this standard, a long-lived asset to be disposed of by sale is measured at the lower of its carrying amount or fair value less cost to sell, and is not depreciated while classified as held for sale. Assets and liabilities classified as held for sale are reported as assets held for sale and liabilities of operations held for sale on the balance sheet. A long-lived asset to be disposed of other than by sale, such as by abandonment, before the end of its previously estimated useful life, is classified as held for use until it is disposed of and depreciation estimates revised to reflect the use of the asset over its shortened useful life. Also, the standard requires that the results of operations of a component of an enterprise, that has been disposed of either by sale or abandonment or is classified as held for sale, be reported as discontinued operations if the operations and cash flows of the component have been, or will be, eliminated from the ongoing operations as a result of the disposal transaction and the Company will not have any significant continuing involvement in the operations of the component after the disposal transaction. A component of an enterprise comprises operations and cash flows that can be clearly distinguished, operationally and for financial reporting purposes, from the rest of the enterprise. Disposal activities relating to long-lived assets initiated by the Company in 2003 are described in note 4 - Discontinued Operations and Assets Held for Sale.

    Guarantees
On January 1, 2003, the Company adopted the CICA accounting guideline AcG-14, Disclosure of Guarantees, which addresses disclosure requirements for a guarantor that issues a guarantee. See note 24 – Commitments and Contingencies.

    Severance and Termination Benefits On April 1, 2003, the Company adopted the new CICA Emerging Issues Committee abstract No. 134, Accounting for Severance and Termination Benefits. Under this abstract, contractual termination benefits and severance costs are recognized as an expense when management, having the appropriate level of authority, approves a decision to terminate employees. Non-contractual termination benefits are recognized as an expense when communicated to employees. Retention bonuses are recognized as an expense over the required future service period.

    Costs Associated with Exit or Disposal Activities
On April 1, 2003, the Company adopted the new CICA Emerging Issues Committee abstract No. 135, Accounting for Costs Associated with Exit or Disposal Activities (including Costs Incurred in a Restructuring). This abstract requires that a liability associated with an exit or disposal activity be recognized when the liability is incurred rather than at the date of the Company’s commitment to an exit plan.

    Note 4. Discontinued Operations and Assets Held for Sale
In the second quarter of 2003, the Company committed to a plan to sell certain non-strategic Packaging operations, as the businesses are not part of its core operations. These businesses are classified as held for sale and are included in discontinued operations. An impairment charge of $138 was recorded in discontinued operations to reduce the carrying values of these businesses to estimated fair values less costs to sell. Fair values were determined based on either discounted cash flows or selling price. In the fourth quarter of 2003, the Company recorded the sale of Fibrenyle, one of the non-strategic Packaging operations, in the U.K. for proceeds of $29. The remaining divestments are expected to be completed by June 30, 2004.

    In December 2003, the Company classified in discontinued operations its extrusions operations in Milan, Italy (Engineered Products). These operations had been classified as held and used until their sale in December 2003.

    Discontinued operations include a net loss of $8, comprising a loss of $17 on the sale of the extrusions operations and a gain of $9 on the sale of Fibrenyle.

    On December 31, 2003, the Company classified the aluminum rolling mill in Ravenswood, West Virginia, as held for sale. Ravenswood was acquired through the acquisition of Pechiney. Its divestment, which must be completed by March 31, 2004, subject to two 30-day extensions granted at the discretion of the U.S. Department of Justice (DOJ), is part of the requirements imposed by the DOJ as a condition to its approval of the acquisition.

    Certain financial information has been reclassified in the prior periods to present these businesses as discontinued operations on the statement of income, as assets held for sale and liabilities of operations held for sale on the balance sheet and as cash flows from (used for) discontinued operations on the statement of cash flows.

    Selected financial information for the businesses included in discontinued operations is reported below:

Year ended December 31	2003	2002	2001
Sales	263	244	241
Income (Loss) from operations	1	(8)	(1)
Loss on disposal – net	(8)	-	-
Loss from impairment	(138)	(9)	(2)
Pre-tax loss	(145)	(17)	(3)
Income taxes recovered	22	2	2
Amortization of goodwill	-	-	(1)
Loss from discontinued operations	(123)	(15)	(2)

The major classes of Assets held for sale and Liabilities of operations held for sale are as follows:

	2003	2002	2001
Current assets held for sale:
Cash and time deposits	-	1	3
Trade receivables	75	48	33
Other receivables	19	11	6
Deferred income taxes	3	-	-
Inventories	134	32	31
	231	92	73
Long-term assets held for sale:
Deferred charges and other assets	3	1	1
Deferred income taxes	70	-	-
Property, plant and equipment, net	40	142	136
Intangible assets, net	-	14	13
Goodwill, net	22	53	51
	135	210	201
Current liabilities of operations held for sale:
Payables and accrued liabilities	112	54	47
Short-term borrowings	1	4	2
	113	58	49
Long-term liabilities of operations held for sale:
Debt not maturing within one year	-	1	-
Deferred credits and other liabilities	314	1	1
Deferred income taxes	5	20	20
	319	22	21

    Note 5. Income from Continuing Operations per Common Share – Basic and Diluted Basic and diluted income from continuing operations per common share are based on the weighted average number of shares outstanding during the year. The treasury stock method for calculating the dilutive impact of stock options is used. The following table outlines the calculation of basic and diluted income from continuing operations per common share.

	2003	2002	2001
Numerator for basic and diluted income
from continuing operations per common share
Income (Loss) from continuing operations
attributable to common shareholders	283	384	(4)
Denominator (number of common shares in millions)
Denominator for basic income from
continuing operations per common share –
weighted average of outstanding shares	322	321	320
Effect of dilutive stock options	-	1	1
Denominator for diluted income from
continuing operations per common share –
adjusted weighted average of outstanding shares	322	322	321
Income (Loss) from continuing operations
per common share – basic	0.88	1.19	(0.01)
Income (Loss) from continuing operations
per common share – diluted	0.88	1.18	(0.01)

Options to purchase 3,443,855 common shares (2002: 1,146,500; 2001: 579,000) at a weighted average price of CAN$53.70 per share (2002: CAN$60.16; 2001: CAN$59.35) were outstanding during the year but were not included in the computation of diluted earnings per share because the options’ exercise price was greater than the average price of the common shares.

As at December 31, 2003, there are 365,181,101 common shares outstanding (2002: 321,470,298; 2001: 320,901,748). As described in note 1 – Nature of Operations, the results of operations of Pechiney are not included in the 2003 statement of income. The common shares issued in December 2003 as part of the Pechiney acquisition are excluded from the weighted average of outstanding shares.

    Note 6. Acquisition of Pechiney During the initial offer period, which closed on November 24, 2003, 77,950,776 Pechiney shares, 1,598 Pechiney bonus allocation rights and 7,722,915 Pechiney OCEANEs were tendered, representing 92.21% of Pechiney share capital and 93.55% of Pechiney voting rights, on a fully diluted basis. Pechiney shares, Pechiney bonus allocation rights, Pechiney OCEANEs and Pechiney American Depositary Shares (ADS) are collectively hereby referred to as Pechiney securities. On December 15, 2003, the Company acquired the Pechiney securities tendered during the initial offer and as consideration, issued 42,413,105 common shares (including 1,417,910 shares to Pechiney) valued at $39.63 per share and paid $3,544 in cash. Accordingly, Pechiney became a subsidiary of the Company on December 15, 2003. In addition, the Company assumed from Pechiney total debt of $2,130 (short-term borrowings, debt maturing within one year, and debt not maturing within one year). The value of $39.63 per share represents the average closing market price for an Alcan common share for a reasonable period of time before and after November 17, 2003, the date at which the number of Alcan common shares to be issued and the amount of cash consideration for each Pechiney share became fixed.

    The offer was re-opened from December 9 to 23, 2003. During the re-opened offer, 3,826,638 Pechiney shares, 19 Pechiney bonus allocation rights and 149,072 Pechiney OCEANEs were tendered. As more than 95% of the capital and voting rights of Pechiney were tendered (on a fully diluted basis) during the initial and re-opened offers, the Company paid to the holders of Pechiney securities who tendered during the initial offer, additional consideration of $100 on January 19, 2004. This additional consideration was recorded in 2003 as it became payable on December 23, 2003, the date the re-opened offer closed.

    On January 15, 2004, the Company acquired the Pechiney securities tendered in the re-opened offer and as consideration, issued 2,082,075 common shares of the Company valued at $39.63 per share and paid $158 in cash including $5 as payment of additional consideration for holders of Pechiney securities who tendered during the re-opened offer. The additional ownership acquired through this re-opened offer will be accounted for in 2004 when the Company settled the purchase price and obtained legal title of the Pechiney securities tendered during the re-opened offer.

The withdrawal offer of Alcan, made in accordance with French securities regulations, as a required step to acquire all remaining Pechiney securities, was opened from January 23 to February 5, 2004. It was followed on February 6, 2004, by a compulsory acquisition by which Alcan became the owner of the remaining Pechiney securities it did not already own. On January 23, 2004, Alcan paid $109, which will be accounted for in 2004, representing the aggregate consideration for the withdrawal offer and compulsory acquisition (without taking into account the Pechiney shares that could have resulted from exercise of Pechiney options between January 23 and February 5, 2004), for distribution in accordance with the provisions of French securities regulations. On February 6, 2004, the Company paid $7, which will be accounted for in 2004, in order to complete the acquisition of the Pechiney shares that were issued between January 23 and February 5, 2004, upon the exercise of Pechiney options. On February 6, 2004, Pechiney became a wholly-owned subsidiary of the Company.

     Pechiney’s three core businesses are primary aluminum, aluminum conversion and packaging. The transaction is intended to enable Alcan to build upon its position as one of the world’s leading aluminum and packaging companies and to benefit from the combined entity’s enhanced scale, financial strength and technological resources as well as its increased capacity to serve customers worldwide. The combined entity will expect to benefit from a larger and more diversified low-cost global position in primary aluminum production with opportunities for profitable growth, an advanced aluminum fabricating business with facilities around the world and a leading position in flexible packaging.

     The acquisition has been accounted for using the purchase method. The balance sheet of Pechiney is included in the consolidated financial statements as at December 31, 2003, and the results of operations of Pechiney will be included in the consolidated financial statements beginning January 1, 2004. Given the magnitude of the acquisition of Pechiney and due to the fact that the transaction was completed at the end of 2003, a tentative purchase price allocation has been performed and, as permitted by accounting standards, the final valuation will be completed in 2004. The Company is in the process of completing its valuations of certain assets and liabilities. Accordingly, the fair value of assets acquired and liabilities assumed could differ materially from the amounts presented in the consolidated financial statements. The significant elements for which the fair values could be modified include property, plant and equipment, intangible assets, goodwill, deferred income taxes, deferred charges and other assets, and deferred credits and other liabilities.

     The divestitures required for regulatory reasons as a result of the Pechiney acquisition are described in note 24 –Commitments and Contingencies.

	2003
Fair value of net assets acquired at date of acquisition
Trade receivables	1,876
Other receivables	238
Deferred income taxes – current	50
Inventories	1,923
Current assets held for sale	166
Deferred charges and other assets	238
Deferred income taxes – non-current	637
Property, plant and equipment	4,459
Intangible assets	665
Goodwill (1)	2,213
Long-term assets held for sale	83
Total assets	12,548
Payables and accrued liabilities	2,464
Deferred income taxes - current	86
Short-term borrowings	857
Debt maturing within one year	204
Current liabilities of operations held for sale	64
Debt not maturing within one year	1,069
Long-term liabilities of operations held for sale	313
Minority interests	380
Deferred credits and other liabilities	1,393
Deferred income taxes – non-current	646
Fair value of net assets acquired at date of acquisition –
net of cash and time deposits acquired	5,072
(1) See note 7 – Goodwill and Intangible Assets
The $2,213 of goodwill has been assigned to the Pechiney segment, as the new management organizational structure is not yet in place. The goodwill is not expected to be deductible for tax purposes.
Acquisition Cost	2003
Issuance of common shares on December 15, 2003 (40,995,195 * common shares
without nominal or par value; average market value of $39.63 per share)	1,625
Cash paid of $3,544 net of cash and time deposits acquired of $338	3,206
Additional consideration for initial offer to be paid in 2004	100
Cost of Pechiney options	80
Transaction costs	61
Total acquisition cost – net of cash and time deposits acquired	5,072

*Represents the issuance of 42,413,105 common shares net of 1,417,910 common shares held by Pechiney

    Supplemental Pro Forma Information     (in millions of US$, except per share amounts) The following unaudited pro forma information for 2003 and 2002 presents a summary of consolidated results of operations of the Company and Pechiney as if the combination had occurred on January 1, 2002. These pro forma results have been prepared for comparative purposes only.

	2003	2002
	(unaudited)	(unaudited)
Sales and operating revenues	25,715	23,417
Income from continuing operations	124	284
Net income (Loss)	(37)	213
Income from continuing operation per common share - basic	0.34	0.79
Income from continuing operation per common share – diluted	0.34	0.78
Net income (Loss) per common share – basic	(0.10)	0.59
Net income (Loss) per common share – diluted	(0.10)	0.59

Note 7. Goodwill and Intangible Assets

    Goodwill

The changes in the carrying amount of goodwill for the year ended December 31, 2003, are as follows:

	Balance				Deferred		Balance
	as at	Impairment			Translation		as at
	January 1, 2003	Losses	Disposals	Additions	Adjustments	Adjustments	December 31, 2003
Bauxite and Alumina	546	-	-	-	-	12	558
Primary Metal	511	-	-	6	18	(1)	534
Engineered Products	161	(28)	-	33	18	(1)	183
Packaging	1, 085	-	-	75	126	15	1,301
Pechiney	-	-	-	2,213	-	-	2,213
Goodwill excluding amount    included in Long-term    assets held for sale	2, 303	(28)	-	2,327	162	25	4,789
Goodwill included in    Long-term assets held for    sale	53	-	(11)	-	(1)	(19)	22
Total	2, 356	(28)	(11)	2,327	161	6	4,811

The changes in the carrying amount of goodwill for the year ended December 31, 2002, were as follows:

	Balance				Deferred		Balance
	as at	Impairment			Translation		as at
	January 1, 2002	Losses	Disposals	Additions	Adjustments	Adjustments	December 31, 2002
Bauxite and Alumina	543	-	-	-	-	3	546
Primary Metal	426	-	-	33	49	3	511
Rolled Products Europe	163	(163)	-	-	-	-	-
Engineered Products	466	(321)	-	2	19	(5)	161
Packaging	1,255	(256)	-	-	94	(8)	1,085
Other	21	-	-	-	-	(21)	-
Goodwill excluding amount     included in Long-term assets     held for sale	2,874	(740)	-	35	162	(28)	2,303
Goodwill included in    Long-term assets held for    sale	51	(8)	-	-	9	1	53
Total	2,925	(748)	-	35	171	(27)	2,356

Using the CICA accounting standard concerning goodwill and other intangible assets (see note 3 – Accounting Changes), the Company completed the annual test to determine whether, for the year ended December 31, 2003, there was impairment in the carrying amount of goodwill. As a result of this review, an impairment loss of $28 was recognized as a charge to income in 2003. At the time of adoption, January 1, 2002, a review of the impairment in the goodwill balance was completed, and an impairment loss of $748 (including $8 relating to long-term assets held for sale) was recognized as a charge to opening retained earnings in 2002. This adjustment reflected the decline in end-market conditions in the period from the algroup merger in October 2000 to January 1, 2002. The annual test was also completed in 2002 and no further impairment was identified. The fair value of all reporting units was determined using discounted future cash flows.

In 2003, a reduction in goodwill of $7 (2002: $28), included in adjustments, was recorded principally relating to a decrease in the valuation allowance related to future income tax assets acquired in the combination with algroup, but which were not recognized at the date of the business combination.

    The changes in the carrying amount of goodwill for the year ended December 31, 2001, were as follows:

	Balance			Deferred			Balance
	as at			Translation			as at
	January 1, 2001	Disposals	Additions	Adjustments	Adjustments	Amortization	December 31, 2001
Bauxite and Alumina	384	-	234	-	(62)	(13)	543
Primary Metal	337	-	-	(5)	104	(10)	426
Rolled Products Europe	165	-	-	(7)	9	(4)	163
Engineered Products	458	-	-	(14)	34	(12)	466
Packaging	1,249	(3)	7	(32)	66	(32)	1,255
Other	20	-	30	-	(28)	(1)	21
Goodwill excluding amount     includedin Long-term    assets held for sale	2,613	(3)	271	(58)	123	(72)	2,874
Goodwill included in    Long-termassets held for sale	56	-	-	(4)	-	(1)	51
Total	2,669	(3)	271	(62)	123	(73)	2,925

Intangible Assets with Finite Lives
	Gross Carrying	Accumulated	Net Book
	Amount	Amortization	Value
		December 31, 2003
Trademarks	182	34	148
Patented and non-patented technology	559	52	507
Purchase contracts	291	2	289
Customer Contracts	115	-	115
	1,147	88	1,059
		December 31, 2002
Trademarks	138	20	118
Patented and non-patented technology	213	32	181
Purchase contracts	20	1	19
	371	53	318
		December 31, 2001
Trademarks	122	10	112
Patented and non-patented technology	189	16	173
	311	26	285

The aggregate amortization expense for the year ended December 31, 2003, was $27 (2002: $23). The estimated amortization expense for the five succeeding fiscal years is approximately $72 per year. The acquisition of intangible assets amounted to $733 (2002: $20) in the year ended December 31, 2003.

Pro forma net income and net income per common share – basic and diluted, before goodwill amortization for 2001, are presented below.

Year ended December 31	2001
Reported net income	2
Goodwill amortization	72
Adjusted net income	74
Net income (Loss) per common share – basic and diluted
Reported net income (loss)	(0.02)
Goodwill amortization	0.22
Adjusted net income per common share – basic and diluted	0.20

Note 8. Differences between Canadian and United States Generally Accepted Accounting Principles (GAAP)

Significant differences between Canadian and United States GAAP are described below.

(a) Derivatives
Beginning in 2001, the Company elected not to adopt the optional hedge accounting provisions of the FASB Statements Nos. 133 and 138, Accounting for Derivative Instruments and Hedging Activities. Accordingly, for U.S. GAAP reporting purposes only, beginning in 2001, unrealized gains and losses resulting from the valuation of derivatives at fair value are recognized in net income as the gains and losses arise and not concurrently with the recognition of the transactions being hedged. On January 1, 2003, the Company adopted, for certain transactions, the optional hedge accounting provisions; see "Recently Adopted Accounting Standards for U.S. GAAP Presentation" below.

In its primary Canadian GAAP financial statements, the Company continues to recognize the gains and losses on derivative contracts in income concurrently with the recognition of the transactions being hedged. For certain foreign currency forward contracts and swaps that are used to hedge certain foreign currency denominated debt and foreign currency denominated loans, unrealized currency gains or losses are recorded in income concurrently with the unrealized gains or losses on the items being hedged. In addition, oil put options are recorded at market value. Under Canadian GAAP, fair value is based on the spot rate; under U.S. GAAP, fair value is based on the forward rate.

Upon initial adoption of the FASB Statement Nos. 133 and 138 in 2001, the cumulative effect of the accounting change resulted in a decrease in net income of $12.

(b) Currency Translation
The difference between Deferred translation adjustments under Canadian GAAP and U.S. GAAP arises from the different treatment of exchange on long-term debt at January 1, 1983, resulting from the adoption of Canadian accounting standards on foreign currency translation on such date.

(c) Investments
Under U.S. GAAP, certain marketable portfolio investments, which are considered to be “available-for-sale” securities, are measured at market value, with the unrealized gains or losses included in Comprehensive income. Under Canadian GAAP, the concept of comprehensive income does not exist and these investments are measured at cost.

(d) Minimum Pension Liability
Under U.S. GAAP, if the accumulated benefit obligation exceeds the market value of plan assets, a minimum pension liability for the excess is recognized to the extent that the liability recorded in the balance sheet is less than the minimum liability. Any portion of this additional liability that relates to unrecognized prior service cost is recognized as an intangible asset while the remainder is charged to Comprehensive income. Canadian GAAP has no such requirement to record a minimum liability and does not have the concept of comprehensive income.

(e) Impairment of Goodwill Under U.S. GAAP, goodwill impairment identified as at January 1, 2002, was charged to income as the cumulative effect of an accounting change. Under Canadian GAAP, the impairment loss identified as at January 1, 2002, was recognized as a charge to opening retained earnings in 2002. See note 3 – Accounting Changes, for a description of the impact on the Company and see note 7 – Goodwill and Intangible Assets.

(f) Asset Retirement Obligations Under U.S. GAAP, standards are established for the recognition, measurement and disclosure of liabilities for legal obligations associated with the retirement of a tangible long-lived asset that result from its acquisition, construction, development or normal operation. A liability is generally recognized for such an obligation at its fair value when incurred and a corresponding asset retirement cost is added to the carrying amount of the related asset. In subsequent periods, the carrying amount of the liability is adjusted to reflect the passage of time and any changes in the timing or amount of the underlying future cash flows. The asset retirement cost is amortized to expense over the asset’s useful life. Under Canadian GAAP, a similar standard will be effective for the Company’s fiscal year beginning on January 1, 2004. The Canadian GAAP standard in effect for 2003 requires that a provision for future removal and site restoration costs, net of expected recoveries, be recorded when reasonably determinable, in a rational and systematic manner.

(g) Deferred Translation Adjustments Under U.S. GAAP, deferred translation adjustments are reported as a component of Comprehensive income. Under Canadian GAAP, the concept of comprehensive income does not exist and deferred translation adjustments are reported as a component of shareholders’ equity.

(h) Income Taxes Under U.S. GAAP deferred income tax assets and liabilities are revalued for all enacted changes in tax rates. Under Canadian GAAP, deferred income tax assets and liabilities are revalued for all enacted or substantially enacted changes in tax rates.

(i) Acquired In-Process Research and Development
Under U.S. GAAP, acquired in-process research and development costs are expensed immediately upon acquisition. Under Canadian GAAP, these costs are recognized as intangible assets upon acquisition if they result from contractual or other legal rights, or the research and development is capable of being separated or divided from the acquired company and sold, transferred, licensed, rented, or exchanged. Under Canadian GAAP, these intangible assets are amortized over their useful lives.

(j) Joint Ventures Under Canadian GAAP, joint ventures are accounted for using the proportionate consolidation method, while under U.S. GAAP, joint ventures are accounted for under the equity method. Pursuant to an accommodation of the U.S. Securities and Exchange Commission, accounting for joint ventures need not be reconciled from Canadian to U.S. GAAP. The different accounting treatment affects only the display and classification of financial statement items and not net income or shareholders’ equity. See note 11 – Joint Ventures for summarized financial information about joint ventures.

(k) Comprehensive Income
U.S. GAAP requires the disclosure of Comprehensive income which, for the Company, comprises Net income under U.S. GAAP, the movement in Deferred translation adjustments under U.S. GAAP, unrealized gains or losses for the period less gains or losses realized during the period on “available-for-sale” securities, unrealized gains or losses for the period less gains or losses realized during the period on derivatives and the movement in the minimum pension liability. The concept of comprehensive income does not exist under Canadian GAAP.

(l) Consolidated Statement of Income
Under U.S. GAAP, income from continuing operations before amortization of goodwill and income from continuing operations per common share before amortization of goodwill would not be presented.

(m) Consolidated Statement of Cash Flows
Under U.S. GAAP, separate subtotals within operating, financing and investment activities would not be presented.

(n) Shipping and Handling Costs
Under U.S. GAAP, shipping and handling costs are reported in cost of sales. Under Canadian GAAP, the Company has elected to record these costs as a reduction of sales.

Recently Adopted Accounting Standards for U.S. GAAP Presentation
   Asset Retirement Obligations On January 1, 2003, the Company adopted the FASB Statement No. 143, Accounting for Asset Retirement Obligations. This statement establishes accounting standards for the recognition, measurement and disclosure of liabilities for legal obligations associated with the retirement of a tangible long-lived asset that result from its acquisition, construction, development or normal operation. Under this standard, a liability is generally recognized for such an obligation at its fair value when incurred and a corresponding asset retirement cost is added to the carrying amount of the related asset. In subsequent periods, the carrying amount of the liability is adjusted to reflect the passage of time and any changes in the timing or amount of the underlying future cash flows. The asset retirement cost is amortized to expense over the asset’s useful life.

    Under the FASB Statement No. 143, the Company recognized, for U.S. GAAP reporting only, additional liabilities, at fair value, of approximately $106 as at January 1, 2003, for existing legal asset retirement obligations. Such liabilities are adjusted for accretion costs and revisions in estimated cash flows. The related asset retirement costs are capitalized as increases to the carrying amount of the associated long-lived assets and accumulated depreciation on these capitalized costs recognized. These liabilities consist primarily of environmental remediation costs, resulting from normal operations, associated with certain bauxite residue disposal sites at its alumina refineries and the disposal of certain of its spent potlining associated with smelter facilities.

    As a result of the new standard, as at January 1, 2003, Property, plant and equipment - cost has been increased by $140, Property, plant and equipment - accumulated depreciation has been increased by $90, Deferred credits and other liabilities have been increased by $106, Deferred income tax liabilities have been reduced by $17 and an after-tax charge of $39 recorded in Net income for the cumulative effect of accounting change. The cumulative effect of accounting change related primarily to costs for spent potlining disposal for pots currently in operation. Net income for the year ended December 31, 2002, would not have been materially different if this standard had been adopted effective January 1, 2002. For 2003, net income was reduced by $1 due to the adoption of the standard.

    The following is a reconciliation of the aggregate carrying amount of liabilities for asset retirement obligations and the pro forma impact for the year ended December 31, 2002, as if the standard had been adopted effective January 1, 2002.

December 31	2003	Pro Forma 2002
Balance – beginning of year	389	363
Acquisition of Pechiney	116	-
Liabilities incurred	35	12
Liabilities settled	(25)	(12)
Accretion expense	25	17
Exchange	91	9
Revisions in estimated cash flows	(53)	-
Balance – end of year	578	389

    Guarantees
On January 1, 2003, the Company adopted the recognition and measurement provisions of the FASB Interpretation No. 45, Guarantor’s Accounting and Disclosure Requirements for Guarantees, including Indirect Guarantees of Indebtedness of Others. The provisions are applied on a prospective basis to guarantees issued or modified after December 31, 2002. There were no significant guarantees issued or modified after December 31, 2002. See note 24 - Commitments and Contingencies.

    Costs Associated with Exit or Disposal Activities
On January 1, 2003, the Company adopted the FASB Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities. This standard requires that a liability associated with an exit or disposal activity be recognized when the liability is incurred rather than at the date of the Company’s commitment to an exit plan.

    Derivative Instruments and Hedging Activities
On July 1, 2003, the Company adopted the FASB Statement No. 149, Amendment of Statement 133 on Derivative Instruments and Hedging Activities. This standard amends and clarifies financial accounting and reporting for derivatives and for hedging activities under the FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities. This standard has no impact on the Company’s financial statements.

    Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity
On July 1, 2003, the Company adopted the FASB Statement No. 150, Accounting for Certain Financial Instruments with Characteristics of Both Liabilities and Equity. This standard requires that certain financial instruments embodying an obligation to transfer assets or to issue equity securities be classified as liabilities. This standard has no impact on the Company’s financial statements.

    Newly Issued Accounting Standards for U.S. GAAP Presentation
    Consolidation of Variable Interest Entities
In January 2003, the FASB issued Interpretation No. 46 (FIN 46), Consolidation of Variable Interest Entities. This interpretation requires that existing unconsolidated variable interest entities be consolidated by their primary beneficiaries if the entities do not effectively disperse risks among parties involved. An entity that holds a significant variable interest but is not the primary beneficiary is subject to specific disclosure requirements.

    On December 24, 2003, the FASB issued a revision to FIN 46. Under this revision, application of FIN 46 is required for periods ending after December 15, 2003, only for existing variable interest entities that are structured as special-purpose entities. Application by public entities for all other types of variable interest entities is required in financial statements for periods ending after March 15, 2004. The Company does not hold any interests in variable interest entities that are structured as special-purpose entities. The Company does not expect its financial statements to be significantly impacted by this interpretation.

Reconciliation of Canadian and U.S. GAAP
Year ended December 31	Reference	2003	2002	2001
Income from continuing operations
– as reported		290	389	4
Differences due to:
– Valuation of derivatives	(a)	(33)	60	(72)
– Currency translation	(b)	1	(2)	-
– Asset retirement obligations	(f)	10	-	-
– In-process research and development	(i)	(50)	-	-
– Income taxes	(h)	-	-	5
– Deferred tax effect on the above		21	(20)	23
Income (Loss) from continuing operations
before cumulative effect of accounting changes – U.S. GAAP		239	427	(40)
Loss from discontinued operations		(123)	(15)	(2)
Cumulative effect of accounting changes – net of taxes
– Valuation of derivatives	(a)	-	-	(12)
– Impairment of goodwill	(e)	-	(748)	-
– Asset retirement obligations	(f)	(39)	-	-
Net income (Loss) – U.S. GAAP		77	(336)	(54)
Dividends on preference shares		(7)	(5)	(8)
Net income (Loss) attributable to common shareholders – U.S. GAAP		70	(341)	(62)
Net income (Loss) per common share – basic and diluted – U.S. GAAP
Income (Loss) from continuing operations		0.72	1.30	(0.15)
Loss from discontinued operations		(0.38)	(0.04)	(0.01)
Cumulative effect of accounting changes		(0.12)	(2.32)	(0.03)
Net income (Loss) per common share – basic and diluted – U.S. GAAP		0.22	(1.06)	(0.19)

December 31	2003				2002				2001
	As Reported	Ref.	Amount	U.S. GAAP	As Reported	Ref.	Amount	U.S. GAAP	As Reported	Ref.	Amount	U.S. GAAP
Other receivables	824	(a)	52	876	542		-	542	526		-	526
Inventories	4,108	(a)	(2)	4,106	1,955	(a)	(4)	1,951	1,919	(a)	(5)	1,914
Deferred charges and other assets	926	(a)	15	947	666	(a)	(9)	663	715	(a)	(7)	716
		(c)	6			(c)	6			(c)	8	__
Property, plant and equipment
Cost (excluding Construction work
in progress)	23,463	(f)	185	23,648	17,618		-	17,618	16,084	(a)	(5)	16,079
Accumulated depreciation	(9,064)	(f)	(93)	(9,157)	(8,093)		-	(8,093)	(7,125)		-	(7,125)
Intangible assets, net of
accumulated amortization	1,059	(d)	224	1,233	318	(d)	143	461	285	(d)	18	303
		(i)	(50)
Goodwill	4,789	(f)	65	4,854	2,303		-	2,303	2,874		-	2,874
Payables and accrued liabilities	5,187	(a)	117	5,375	2,283	(a)	17	2,300	2,281	(a)	73	2,354
		(f)	71
Deferred credits and other liabilities	3,268	(a)	(1)	4,169	1,418	(d)	610	2,028	1,130	(d)	233	1,363
		(d)	730
		(f)	172
Deferred income taxes	1,983	(a)	(27)	1,734	1,180	(a)	(9)	1,023	1,069	(a)	(30)	972
		(d)	(156)			(d)	(148)			(d)	(67)
		(f)	(48)
		(i)	(18)
Shareholders’ equity
Redeemable non-retractable
preference shares	160		-	160	160		-	160	160		-	160
Common shares	6,426		-	6,426	4,703		-	4,703	4,687		-	4,687
Contributed surplus	80		-	80	-		-	-	-		-	-
Retained earnings	3,470	(a)	(42)	3,414	3,503	(a)	(20)	3,537	4,074	(a)	(60)	4,070
		(b)	55			(b)	54			(b)	56
		(f)	(37)
		(i)	(32)
Common shares held by a subsidiary	(56)		-	(56)	-		-	-	-	-		-
Deferred translation
adjustments	635	(a)	29	-	259	(b)	(54)	-	(151)	(b)	(56)	-
		(b)	(55)			(g)	(205)			(g)	207
		(g)	(609)
Other comprehensive
income (loss)	-	(a)	(12)	253	-	(c)	6	(109)	-	(c)	8	(347)
		(c)	6			(d)	(320)			(d)	(148)
		(d)	(350)			(g)	205			(g)	(207)
		(g)	609
Shareholders’ equity	10,715		(438)	10,277	8,625		(334)	8,291	8,770		(200)	8,570

(a)	Derivatives
(b)	Currency translation
(c)	Investments
(d)	Minimum pension liability
(e)	Impairment of goodwill
(f)	Asset retirement obligations
(g)	Deferred translation adjustments
(h)	Income taxes
(i)	Acquired in-process research and development

Year ended December 31	2003		2002	2001
Comprehensive income (loss)
Net income (Loss)		77	(336)	(54)
Net change in deferred translation adjustments		404	412	(131)
Net change in excess of market value over book value    of “available-for-sale” securities		8	8	(7)
Reclassification to net income on disposal    of “available-for-sale” securities		(8)	(10)	-
Valuation of derivatives (net of tax of $5)
Net change from periodic revaluations (net of tax of $5)		(12)	-	-
Net change in minimum pension liability –
net of tax of $9 (2002: $81; 2001:$67)		(30)	(172)	(148)
Comprehensive income (loss)		439	(98)	(340)
December 31	2003		2002	2001
Accumulated other comprehensive income (loss)
Derivatives		(12)	-	-
Deferred translation adjustments		609	205	(207)
Minimum pension liability		(350)	(320)	(148)
Unrealized gain on “available-for-sale” securities		6	6	8
Accumulated other comprehensive income (loss)		253	(109)	(347)

Reconciliation of the funded status of the Company’s pension plans with the amounts recognized in the U.S. GAAP balance sheet.

December 31	2003		2002		2001
	As	U.S.	As	U.S.	As	U.S.
Pension Benefits	Reported	GAAP	Reported	GAAP	Reported	GAAP
Funded Status	(2,466)	(2,466)	(1, 421)	(1, 421)	(467)	(467)
Unamortized
- actuarial (gains) losses	612	612	656	656	(193)	(193)
- prior service cost	624	848	687	830	653	671
Minimum pension liability (excluding the amount relating
to unrecognized prior service cost)	N/A	(730)	N/A	(610)	N/A	(233)
Net liability in balance sheet	(1,230)	(1, 736)	(78)	(545)	(7)	(222)
Net liability recognized in the U.S. GAAP balance sheet
Deferred charges and other assets		222		314		344
Intangible assets		224		143		18
Payables and accrued liabilities		(44)		(34)		(31)
Deferred credits and other liabilities		(2,071)		(968)		(553)
Long-term liabilities of operations held for sale		(67)		-		-
Net liability in balance sheet		(1,736)		(545)		(222)

    Note 9. Restructuring, Impairment and Other Special Charges In 2001, the Company implemented a restructuring program aimed at safeguarding its competitiveness, resulting in a series of plant sales, closures and divestments throughout the organization. In the context of the Company's objective of value maximization, a detailed business portfolio review was undertaken in 2001 to identify high cost operations, excess capacity and non-core products. Impairment charges arose as a result of negative projected cash flows and recurring losses. These charges related principally to buildings, machinery and equipment and some previously capitalized project costs. This program was completed in 2003. The following information relates only to the 2001 program.

    Restructuring and Asset Impairment Charges
The schedule provided below shows details of the provision balances and related cash payments for the restructuring and asset impairment charges relating to the 2001 restructuring program.

		Asset
	Severance	Impairment
	Costs	Provisions	Other	Total
2001:
Charges	111	268	29	408
Cash payments – net	(6)	-	(7)	(13)
Non-cash charges	-	(268)	-	(268)
Provision balance as at December 31, 2001	105	-	22	127
2002:
Charges	35	17	27	79
Cash payments – net	(63)	-	-	(63)
Non-cash charges	(6)	(17)	(7)	(30)
Provision balance as at December 31, 2002	71	-	42	113
2003:
Charges (recoveries)	(3)	-	(26)	(29)
Cash payments – net	(45)	-	(26)	(71)
Non-cash charges	-	-	33	33
Provision balance as at December 31, 2003	23	-	23	46

The remaining provision balance of $46 at December 31, 2003, related principally to employee severance costs and environmental remediation for which payments will be made over an extended period.

    2003 Activities In 2003, Restructuring, impairment and other special charges of ($38), pre-tax were recorded, which included recoveries in restructuring and asset impairment charges of $29 and other special charges of $9. The $29 recovery consists of $3 for the reversal of an excess redundancy provision in the U.K. (Rolled Products Europe), a gain of $19 principally for the sale of the Borgofranco power facilities in Italy (Rolled Products Europe), income of $6 on the sale of extrusions operations in Malaysia (Rolled Products Americas and Asia), and a gain of $9 relating to sales of assets in the U.K. ($5: Bauxite and Alumina; $4: Packaging), partially offset by other costs of $8 principally in the U.K. (Packaging).

    In 2003, the Company completed the closure of facilities at Glasgow, U.K., sold its extrusions operations in Malaysia for net proceeds of $2 and decided to retain the recycling operations at the Borgofranco plant in Italy and both cold mills at the light gauge operations in Fairmont, West Virginia.

    2002 Activities In 2002, Restructuring, impairment and other special charges of $60, pre-tax were recorded, which included restructuring and asset impairment charges of $79 and gains in other special charges of $19. The $79 charge consisted of severance costs of $35 related to workforce reductions of approximately 950 employees, impairment of long-lived assets of $17 and other exit costs related to the shutdown of facilities of $27. Severance charges of $35 related primarily to the closure of the Burntisland facility, U.K. (Bauxite and Alumina), certain cable operations in North America (Engineered Products), extrusions operations in Malaysia and light gauge operations in Fairmont, West Virginia (Rolled Products Americas and Asia). Asset impairment charges of $17 related primarily to the Borgofranco plant in Italy (Rolled Products Europe) and the operations in Korea (Rolled Products Americas and Asia). Other exit costs of $27 consisted principally of closure costs of $19 for the Burntisland facility, U.K., a loss of $5 on the sale of the extrusions operations in Thailand that arose from the realization of deferred translation losses (Rolled Products Americas and Asia), a loss of $4 on the sale of the rolled products circles production unit at Pieve, Italy (Rolled Products Europe), other costs of $3 and was offset in part by income of $4 from the write-back of excess contract loss provisions upon settlement with a customer (Engineered Products).

    In 2002, the Company completed the sale of certain glass packaging operations located in Park Hills, Missouri, and Mays Landing, Williamstown and Millville, New Jersey for proceeds of $15 equal to book value. As well, the Company sold its rolled product circles production unit at its Pieve plant in Italy for proceeds of $14 and its two Pharmatech rubber stopper and aluminum seals operations located in Salisbury, Maryland, in the U.S. for proceeds of $9 equal to book value.

2001 Activities
In 2001, Restructuring, impairment and other special charges of $654 pre-tax were recorded, which included restructuring and asset impairment charges of $408 and other special charges of $246. The charges of $408 included severance costs of $111, which related to workforce reductions of approximately 2,190 employees, impairment of long-lived assets of $268 and other exit costs related to the shutdown of facilities of $29.

    Workforce Reductions
Planned workforce reductions relating to the 2001 restructuring program are as follows:

	2001	2002	Total
Bauxite and Alumina	-	380	380
Primary Metal	500	-	500
Rolled Products Americas and Asia	200	250	450
Rolled Products Europe	400	-	400
Engineered Products	-	200	200
Packaging	790	120	910
Other	300	-	300
Planned workforce reductions	2,190	950	3,140
As at December 31, 2003, approximately 3,120 of a total of 3,140 employees had been terminated.

    Asset Impairment Provisions

	Assets Held and Used			Assets Held for Disposal (2)
	2001 (1)	2002 (1)	Total	2001
Bauxite and Alumina (3)	45	-	45	-
Primary Metal (4)	22	-	22	-
Rolled Products
Americas and Asia (7)	14	3	17	8
Rolled Products Europe (5) (8)	79	9	88	22
Engineered Products	3	4	7	-
Packaging (6) (9)	42	1	43	12
Other	21	-	21	-
Total	226	17	243	42

(1)	An impairment provision was recorded to the extent that the net book value exceeded net recoverable amount or undiscounted cash flows.
(2)	An impairment provision was recorded to the extent that the net book value exceeded the fair value less selling costs. Fair values were determined based on either discounted cash flows or selling price.

Assets Held and Used

(3)	Charges principally relate to the specialty chemicals plant at Burntisland, U.K.
(4)	Charges principally relate to the engineered cast products plant in Quebec, Canada.
(5)	Charges principally relate to the cold mill at the Rogerstone plant in the U.K. ($62) and the recycling operations at the Borgofranco plant in Italy ($9).
(6)	Charges principally relate to the foil facilities at Glasgow, U.K.

Assets Held for Disposal

(7)	Charges principally relate to the extrusions operations in Malaysia and Thailand.
(8)	Charges principally relate to certain rolled products operations at the Pieve plant in Italy.
(9)	Charges principally relate to the Pharmatech rubber stopper and aluminum seals operations in the U.S.

Assets Held for Disposal

	Rolled Products	Rolled Products
	Americas and Asia	Europe	Packaging	Total
Sales and Operating Revenues
2003	12	-	-	12
2002	16	32	90	138
2001	30	37	130	197
Net Operating Losses (Income)
2003	(1)	-	-	(1)
2002	2	(1)	6	7
2001	-	-	10	10
Assets
December 31, 2003	-	-	-	-
December 31, 2002	10	-	-	10
December 31, 2001	20	57	80	157
Liabilities
December 31, 2003	-	-	-	-
December 31, 2002	5	13	-	18
December 31, 2001	10	11	70	91

    Other Special Charges
In 2001, the Company increased its environmental provisions by $246 pre-tax to cover treatment costs of $150 for stored spent potlining (SPL) in Quebec and British Columbia, Canada, as well as to cover remediation costs of $96 relating to red mud disposal at other sites in Canada and the U.K. The charges were recorded in the statement of income in Restructuring, impairment and other special charges and on the balance sheet in Deferred credits and other liabilities $(235) and in Payables and accrued liabilities $(11).

    SPL, which is a waste material generated by the smelting process, needs to be treated in a safe and environmentally sound manner. The Company’s objectives have been to find the best alternative to stockpiling SPL and various technical studies were carried out to identify treatment alternatives that are economically viable. Following these studies, which were completed in 2001, and in accordance with local laws and regulations, the Company has initiated a project to identify the best treatment technology to treat the stored SPL. The liability of $150 reflected the Company’s best estimate of the cost to treat the stored SPL in Quebec and to have the SPL in British Columbia treated by a third party. The liability recorded in 2001 is being paid over a period of approximately twenty years.

    The liability of $96 relating to red mud disposal reflected the Company’s best estimate of the cost of rehabilitation. Red mud is the normal residue associated with extracting alumina from bauxite. The charge represents the cost to fill and seal the sites.

    In 2002, the environmental provision was reduced by $22 principally comprising a reduction of $4 in the SPL provision for the recovery from a third party of a portion of the costs and a reduction of $18 in the red mud disposal provision due to lower remediation costs at the Burntisland facility in the U.K. The reductions in the provisions were recorded in the statement of income in Restructuring, impairment and other special charges and on the balance sheet as an increase in Other receivables and a reduction in Deferred credits and other liabilities.

    In 2003, the environmental provision for SPL was reduced by $11 because of lower treatment costs.

Note 10. Income Taxes
	2003	2002	2001
Income from continuing operations
before income taxes and other items
Canada	(186)	(65)	(303)
Other countries	814	749	407
	628	684	104
Current income taxes
Canada	18	(9)	(48)
Other countries	260	233	241
	278	224	193
Deferred income taxes
Canada	111	56	(69)
Other countries	(64)	15	(80)
	47	71	(149)
Income tax provision	325	295	44
The composite of the applicable statutory corporate income tax rates in Canada is 39.0% (2002: 39.0%; 2001: 40.0%). The following is a reconciliation of income taxes calculated at the above composite statutory rates with the income tax provision:
	2003	2002	2001
Income taxes at the composite statutory rate	246	267	41
Differences attributable to:
Tax benefits from changes in Australian tax legislation	(74)	-	-
Exchange translation items	97	35	3
Exchange revaluation of deferred income taxes	119	16	(26)
Effect of tax rate changes on deferred income taxes	(1)	–	(8)
Unrecorded tax benefits on losses – net	1	18	26
Investment and other allowances	(35)	(18)	8
Goodwill impairment	11	-	-
Large corporations tax	7	7	8
Withholding taxes	6	5	8
Reduced rate or tax exempt items	4	(18)	(2)
Foreign tax rate differences	(48)	(25)	(6)
Prior years’ tax adjustments	(10)	(3)	(14)
Other – net	2	11	6
Income tax provision	325	295	44

Note 10. Income Taxes (cont’d)

At December 31, the principal items included in Deferred income taxes are:
	2003	2002	2001
Liabilities
Property, plant, equipment and intangibles	2,404	1,341	1,158
Undistributed earnings	26	17	24
Inventory valuation	118	66	78
Other – net	204	175	193
	2,752	1,599	1,453
Assets
Tax benefit carryovers	1,421	361	297
Accounting provisions not currently deductible for tax	910	363	382
Property, plant, equipment and intangibles	288	-	-
	2,619	724	679
Valuation allowance (amount not likely to be recovered)	1,141	245	212
	1,478	479	467
Net deferred income tax liability	1,274	1,120	986
Amounts recognized in the Consolidated Balance Sheet consist of:
Deferred income tax asset – current	(50)	-	-
Deferred income tax asset – non-current	(745)	(60)	(83)
Deferred income tax liability – current	86	-	-
Deferred income tax liability – non-current	1,983	1,180	1,069
Net deferred income tax liability	1,274	1,120	986

The valuation allowance relates principally to loss carryforward benefits and tax credits where realization is not likely. The majority of the allowance relates to loss carryforwards of French companies with no expiry date, but which are subject to limitations to their use such that it is unlikely that they will be used against taxable income. In 2003, $5 (2002: $11; 2001: $4) of the valuation allowance was reversed when it became more likely than not that benefits would be realized. Of that amount, $4 (2002: $5) reduced goodwill since it related to future income tax assets acquired in business combinations, but which were not recognized at the date of the business combinations.

     Based on rates of exchange at December 31, 2003, tax benefits of approximately $884 relating to prior and current years’ operating losses and $156 of benefits related to capital losses and tax credits carried forward will be recognized when it is more likely than not that such benefits will be realized. These amounts are included in the valuation allowance above. Approximately $8 of these potential tax benefits expire in 2004.

     In 1997, income taxes on Canadian operations for the years 1988 to 1991 were reassessed by the Canadian tax authorities. Most of the additional taxes and interest are related to transfer pricing issues and are recoverable in other countries. The process to obtain recoveries from other countries is underway. During 1999, the Canadian tax authorities indicated their intention not to proceed with the reassessments made in 1997 in respect of the years 1988 and 1989. In 2000, certain provinces decided not to proceed with the reassessments pertaining to 1988 and 1989. As a result of this and other adjustments, in 2000 the Company recorded $32 of tax recoveries. During 2002, the Canadian and U.S. tax authorities settled the majority of the transfer pricing issues related to the 1997 reassessments. As a result of this and other adjustments, in 2002 the Company recorded $4 of tax recoveries. See note 29 – Information by Geographic Areas.

    Note 11. Joint Ventures
As of December 31, 2003 the activities of the Company's major joint ventures are the procurement and processing of bauxite in Australia, Brazil and Guinea, smelting operations in Norway, Australia, Cameroon and Canada, aluminum rolling operations in Germany and the United States, as well as packaging operations in France and China and engineered products operations in Norway.

     In 2003, with the acquisition of Pechiney, the Company acquired a 50% interest in Pechiney Reynolds Quebec, Inc. (Canada), a 29.97% interest in Socatral (Norway), a 46.67% interest in Alucam (Cameroon), a 50% interest in Airlessystems (France) as well as an additional 20% interest in Queensland Alumina Limited (Australia) and an additional 10% interest in Halco (Guinea). In addition, the Company acquired a 50% interest in Alcan Propack Chengdu Co. (China).

    In 2002, the Company acquired a 40% interest in the Aluminerie Alouette consortium in Quebec, Canada.

    In 2001, the Company sold its bauxite and alumina operations in Jamaica.

     Alcan's proportionate interest in all joint ventures is included in the consolidated financial statements. Summarized financial information relating to Alcan's share of these joint ventures is provided below. Most of the activities of the Company's joint ventures result in the supplying of materials to other operations of the Company.

	2003	2002	2001
Financial position at December 31
Inventories	167	86	69
Property, plant and equipment – net	2,132	942	550
Other assets	19	64	47
Total assets	2,318	1,092	666
Short-term debt	57	51	46
Debt not maturing within one year	189	67	83
Other liabilities	397	212	164
Total liabilities	643	330	293
Cash flow information for the year ended December 31
Cash from operating activities	3	4	3
Cash from (used for) financing activities	16	(13)	(5)
Cash used for investment activities	(149)	(83)	(73)

    Note 12. Sales of Receivables
Under an agreement effective December 18, 2001, on an ongoing basis, the Company sells to a third party an undivided interest in certain trade receivables, with limited recourse, for maximum cash proceeds of $300 with the maximum credit exposure to the Company held in reserve by the third party. This amount is recorded in Deferred charges and other assets. Net proceeds were used in 2001 to repay commercial paper borrowings. The Company acts as a service agent and administers the collection of the receivables sold.

    As at December 31, 2003, the Company sold trade receivables of $336 (2002: $341; 2001: $330), with $43 (2002: $44; 2001: $30) held in reserve by the third party.

    Pechiney has entered into agreements with certain financial institutions to sell up to $211 of selected receivables without recourse and up to $5 with recourse. As at December 31, 2003, Pechiney sold trade receivables for an amount of $143.

    Note 13. Allowance for Doubtful Accounts
The allowance for doubtful accounts reflects management’s best estimate of probable losses inherent in the trade receivables balance. Management determines the allowance based on known uncollectable accounts, historical experience, and other currently available evidence. Activity in the allowance for doubtful accounts is as follows:

		Additions
	Balance at	Charged to
	Beginning	Costs &				Balance at
Description	of Year	Expenses	Acquisitions	Write-offs	Divestments	End of Year
2003	58	12	27	7	-	90
2002	51	23	-	12	4	58
2001	53	13	-	15	-	51

    Note 14. Other Expenses (Income) – Net
Other expenses (income) – net comprise the following elements:

	2003	2002	2001
Restructuring costs	37	3	(1)
Asset impairment provisions	58	4	-
Loss (Gain) on disposal of businesses and investment – net (note 17)	(13)	(36)	123
Provisions for legal claims (note 24)	1	113	-
Environmental provisions	29	2	-
Interest revenue	(19)	(12)	(25)
Exchange (gains) losses	83	37	(8)
Other	17	2	23
	193	113	112

The 2003 restructuring costs of $37 consist principally of employee severance costs and other exits costs at flexible packaging operations in Europe (Packaging) and closure costs for certain cable operations in the U.S. (Engineering Products). At December 31, 2003, approximately $12 remain in accrued liabilities.

The 2003 asset impairment provisions of $58 consist principally of $21 for the casting operations of an automotive parts facility in Germany (Engineered Products), $14 for the closure of the Söderberg primary aluminum facility in Jonquière, Quebec (Primary Metal), $7 for flexible packaging operations in Europe and $7 for a converting facility in Charlotte, North Carolina (Packaging). The impairment charges arose as a result of negative projected cash flows and related principally to buildings and machinery and equipment. Fair values were determined based on either discounted cash flows or selling price.

Note 15. Deferred Charges and Other Assets
Deferred charges and other assets comprise the following elements:

	2003	2002	2001
Prepaid pension costs	222	314	344
Income taxes recoverable	31	-	51
Marketable securities	45	37	40
Prepaid mining expenses	54	56	57
Debt financing costs	47	21	17
Investments*	135	46	52
Reserve for receivables sold (note 12)	43	30	30
Amount receivable on currency swap of debt	16	-	(12)
Long-term notes and other receivables	143	105	84
Other	190	57	52
	926	666	715
* Investments
Companies accounted for under the equity method	50	18	21
Portfolio investments – at cost	85	28	31
	135	46	52
Note 16. Property, Plant and Equipment
	2003	2002	2001
Cost (excluding Construction work in progress)
Land and property rights	561	371	299
Buildings	4,042	3,153	2,864
Machinery and equipment	18,860	14,094	12,921
	23,463	17,618	16,084

Accumulated depreciation relates primarily to Buildings and Machinery and equipment.

    Note 17. Sales and Acquisitions of Businesses and Investments     2003
    Asia and Other Pacific In the second quarter of 2003, the Company sold its remaining investment in Nippon Light Metal Company. Ltd (NLM) for sales proceeds of $22, resulting in a gain of $33 including the realization of deferred translation gains of $14. In the third quarter of 2003, the Company increased its ownership position in Aluminium Company of Malaysia, a manufacturer of light gauge aluminum products, from 36% to 59% by acquiring additional shares, with a value of $30, from NLM in exchange for its ownership in Alcan Nikkei Siam Limited in Rangsit, Thailand, with a value of $24, and a cash payment of $6. The sale of Alcan Nikkei Siam Limited resulted in the realization of deferred translation losses of $11. The gain on the sale of NLM and the loss on the sale of Alcan Nikkei Siam Limited were recorded in Other expenses (income) - net.

In October 2003, the Company announced the signing of a definitive joint venture agreement with Qingtongxia Aluminum Company and Ningxia Electric Power Development and Investment Co. Ltd. Under the agreement, the Company will invest up to $150, of which $60 is expected to be invested in the first quarter of 2004, following necessary regulatory approvals for a 50% participation and a secure power supply in an existing 150-kt modern pre-bake smelter located in the Ningxia autonomous region in the People’s Republic of China. The agreement provides for the joint venture to obtain long-term access to dedicated power on competitive terms sufficient to meet the energy requirements of the smelter. The agreement also gives Alcan a substantial operating role and the option to acquire, through additional investment, up to 80% of a new 250-kt potline, already under construction.

    In December 2003, the Company sold the extrusions operations of Aluminium Company of Malaysia, for net proceeds of $2. A pre-tax amount of $6, which is included in Restructuring, impairment and other special charges, consists of a favourable adjustment to a previously recorded impairment provision.

    France, Germany, Other Europe and Asia and Other Pacific In April 2003, the Company completed the acquisition of VAW Flexible Packaging (FlexPac) from Norsk Hydro for a cost of $302, net of cash and time deposits acquired. FlexPac includes 14 plants in 8 countries and has 5,400 employees. FlexPac comprises a set of custom manufacturing businesses producing high quality flexible packaging products for a wide variety of end-use customers and manufacturers of consumer goods, including those in the food, dairy and pharmaceutical industries. The business combination is accounted for using the purchase method and the results of operations are included in the consolidated financial statements since acquisition.

    As part of the acquisition of FlexPac in the second quarter of 2003, the Company acquired, directly and indirectly, 63% of the total issued share capital of Strongpack Plc in Thailand. Strongpack is engaged in packaging businesses, providing production and processing services on all types of flexible packaging materials. In June 2003, the Company acquired an additional 12% of Strongpack for a cost of $4.

    Also, as part of the acquisition of FlexPac, the Company acquired 70% of the total issued share capital of Rotopak in Turkey. Rotopak is engaged in the food flexible packaging business. In August 2003, the Company acquired the remaining 30% of Rotopak for cost of $24.

    Allocation of the purchase price involves estimates and information gathering during months following the date of the combination. The estimation process will be finalized in 2004. Accordingly, there may be some changes to the assigned values presented below.

    The total purchase cost of $330 for FlexPac was allocated based on the assigned fair values of the assets acquired and liabilities assumed as follows:

	2003
Current assets	285
Deferred charges and other assets	2
Property, plant and equipment	215
Intangible assets	10
Deferred tax asset	19
Goodwill (1)	75
	606
Current liabilities	188
Debt not maturing within one year	11
Deferred credits and other liabilities	60
Minority interests	17
Fair value of net assets acquired at date of acquisition
(net of cash and time deposits acquired of $31)	330

(1) See note 7 – Goodwill and Intangible Assets.

Note 17. Sales and Acquisitions of Businesses and Investments (cont’d)
    United States and Ecuador
In July 2003, the Company completed the acquisition of Baltek Corporation (Baltek) for a cost of $38. Baltek is the world’s leading supplier of balsa based structural core materials and has production and sales facilities around the world, including in Ecuador. Baltek’s balsa core materials fit well into the existing composites business, as structural foam and balsa are complementary products that go to market through the same distribution channels. Ecuador is included in the geographic area All other. The business combination is accounted for using the purchase method and the results of operations are included in the consolidated financial statements since acquisition. The purchase price was allocated based on the assigned fair values of the assets acquired and liabilities assumed as follows:

	2003
Current Assets	29
Deferred charges and other assets	1
Property, plant and equipment	23
Intangible assets	4
Goodwill (1)	8
	65
Current liabilities	22
Debt not maturing within one year	1
Deferred credits and other liabilities	4
Fair value of net assets acquired at date of acquisition	38

⁽¹⁾ See note 7 – Goodwill and Intangible Assets

In October 2003, the Company acquired the Uniwood/Fome-Cor Division of Nevamar for a cost of $95. Uniwood/Fome-Cor is one of the largest U.S. manufacturers of foam-based display board, with its head office and production facilities in Statesville, North Carolina, and another production site in Glasgow, Kentucky.

    The business combination is accounted for using the purchase method and the results of operations are included in the consolidated financial statements since acquisition. The purchase price was allocated based on the assigned fair values of the assets acquired and liabilities assumed as follows:

	2003
Current assets	14
Property, plant and equipment	17
Intangible assets	54
Goodwill (1)	25
	110
Current liabilities	4
Deferred income taxes	11
Fair value of net assets acquired at date of acquisition	95

(1)    See note 7 - Goodwill and Intangible Assets

Other See reference to the sale of the extrusions operations in Milan, Italy, and the sale of Fibrenyle in the U.K. in note 4 –Discontinued Operations and Assets Held for Sale.

    See reference to the acquisition of Pechiney in note 6 – Acquisition of Pechiney.

   See reference to the sale of the Borgofranco power facilities in Italy in note 9 – Restructuring, Impairment and Other Special Charges.

    Note 17. Sales and Acquisitions of Businesses and Investments (cont’d)

    2002
    Canada
In April 2002, the Company acquired the Société générale de financement (SGF) 20% joint venture interest in the Aluminerie Alouette consortium at a cost of $172 and in September 2002, the Company acquired the Corus Group plc’s 20% joint venture interest at a cost of $171 giving the Company a 40% ownership in Alouette. These business combinations are accounted for using the purchase method and the results of operations are included in the consolidated financial statements since acquisition.

The total purchase price was allocated based on the assigned fair values of the assets acquired and liabilities assumed as follows:

	2002
Current assets	31
Deferred charges and other assets	3
Property, plant and equipment	300
Intangible assets	20
Goodwill (1)	39
	393
Current liabilities	9
Deferred credits and other liabilities	15
Deferred income taxes	26
Fair value of net assets acquired at date of acquisition	343

⁽¹⁾     See note 7 – Goodwill and Intangible Assets

In September 2002, the five co-venturers of the Aluminerie Alouette consortium announced their final approval of the plant expansion in Sept-Îles, Quebec. Alcan’s share of the cost will be approximately $350. Construction began in the spring of 2003 and will continue throughout 2004. Production start-up is expected to take place in February 2005 with completion in the fall of 2005.

    Japan
In 2002, the Company sold a portion of its investment in Nippon Light Metal Company, Ltd. (NLM), included in the geographic area Asia and Other Pacific, for net cash proceeds of $22, reducing its holdings to an effective ownership of 2.2%. Included in Other expenses (income) – net is a gain of $36. The after-tax gain included a previously deferred gain of $8 related to the sale in 1996 of Toyo Aluminium K.K. to NLM.

    2001
    Australia
In 2001, the Company acquired the remaining 30% of the Gove alumina refinery and related bauxite mine for a cash consideration of $379 subject to certain post-closing adjustments. As a result of this transaction, the Company owns 100% of these assets. The acquisition was accounted for using the purchase method. The purchase price was allocated based on the assigned fair values of the assets acquired and liabilities assumed as follows:

	2001
Working capital	15
Property, plant and equipment	172
Goodwill (1)	234
	421
Other liabilities – net	41
Long-term debt	1
	42
Fair value of net assets acquired at date of acquisition	379

(1)     See note 7 – Goodwill and Intangible Assets.

    Note 17. Sales and Acquisitions of Businesses and Investments (cont’d)

    Jamaica
In 2001, the Company completed the sale of its Jamaican operations, included in the geographic area All other. Proceeds from the sale were $153. The total pre-tax loss on the sale was $123, which was recorded in Other expenses (income) – net.

    United Kingdom, Germany and Other Europe
The following transactions were completed in 2001 as part of the divestment requirements imposed by the European Commission as a condition to its approval of the merger between Alcan and algroup in October 2000.

• The Company sold its alumina specialties production plant, Martinswerk, located in Bergheim, Germany.

• The Company sold a number of foil container manufacturing assets in Spain and Germany.

• The Company sold certain assets at its lithographic sheet production plant, Star Litho, located in Bridgnorth, U.K.      The Company received proceeds of approximately $54 from these sales.

    Korea In 2001, the Company’s subsidiary Alcan Taihan Aluminum Limited (ATA) acquired the remaining 5% of Aluminium of Korea Limited (Koralu), included in the geographic area Asia and Other Pacific, for $21. As a result of the transaction, the Company’s ownership of ATA was reduced to 66% from 68%.

Note 18. Deferred Credits and Other Liabilities
Deferred credits and other liabilities comprise the following elements:

	2003	2002	2001
Post-retirement and post-employment benefits (note 28)	2,025	640	562
Environmental liabilities	487	327	327
Restructuring liabilities	42	27	41
Claims	240	206	37
Market value of foreign currency forward contracts	92	25	(12)
Long-term payables	140	77	70
Other	242	116	105
	3,268	1,418	1,130

Note 19. Debt Not Maturing Within One Year

	2003	2002	2001
Alcan Inc.
Commercial paper – CAN$ (a)	1,346	390	585
Commercial paper – US$ (a)	304	246	166
Bank loans, due 2004/2005 (€ 54 million) (b)	68	91	105
5.375% Swiss franc bonds(c)	-	129	105
5.5% Euro note, due 2006 (€ 600 million)	753	629	528
6.25% Debentures, due 2008	200	200	200
6.45% Debentures, due 2011	400	400	400
4.875% Global notes, due 2012	500	500	-
4.50% Global notes, due 2013	500	-	-
5.20% Global notes, due 2014	500	-	-
8.875% Debentures, due 2022 (d)	-	-	150
7.25% Debentures, due 2028	100	100	100
7.25% Debentures, due 2031	400	400	400
6.125% Global notes, due 2033	750	-	-
Other debt	-	-	7
Alcan Aluminum Corporation
Floating Rate Notes, due 2005(b), (g)	500	-	-
Alcan Deutschland GmbH and subsidiary companies
Bank loans, due 2008/2013 (€ 6 million) (b)	8	7	7
Queensland Alumina Limited
Bank loans, due 2004/2008 (b)	124	52	84
Alcan Holdings Switzerland AG
4.5% Bank loan (CHF 100 million)	-	-	59
Alcan Finance Jersey Limited
Euro Medium Term Note Program (EMTN)
EMTN, (€ 400 million)	-	-	352
EMTN, due 2008 (€ 13 million) (e)	17	14	11
EMTN, due 2008 (€ 8 million) (e)	10	8	7
ALA (Nevada) Inc.
Bank loan, due 2005(b)	60	60	60
Alcan Packaging Canada Limited
5.69% Bank loan	-	35	35
6.24% Bank loan, due 2004	30	30	30
Pechiney S.A.(l)
5.10% Debentures, due 2005 (€ 229 million) (i)	303	-	-
Equity link bonds, due 2005 (€ 53 million) (i)	73	-	-
3.25% Convertible bonds (OCEANEs), due 2007 (€ 15 million)(k)	20	-	-
5.14% FOCOMO bond, due 2004 (€ 6 million) (j)	7	-	-
6.03% FOCOMO bond, due 2005 (€ 7 million) (j)	10	-	-
6.20% FOCOMO bond, due 2006 (€ 9 million) (j)	12	-	-
5.69% FOCOMO bond, due 2007 (€ 8 million) (j)	10	-	-
4.81% FOCOMO bond, due 2008 (€ 2 million) (j)	3	-	-
Bank loans, due 2008 (€ 183 million)(i)	230	-	-
Bank loan, due 2004/2005 (€ 8 million)(i)	10	-	-

Bank loan, due 2006 (€ 40 million)(i)	50	-	-
Pechiney Pacific
Long-term credit facility, due 2006(b) (h)	78	-	-
Long-term credit facility, due 2004 (b) (h)	105	-	-
Techpack Asia
Bank loans, due 2005/2010(b)	26	-	-
Aluminium Pechiney SPV
Bank loan, due 2004/2013 (b)	50	-	-
Aluminium Dunkerque
Bank loan, due 2004/2005 (b)	88	-	-
Long-term credit facility, due 2016 (b)	40	-	-
Other
Bank loans, due 2004/2013 (b)	149	138	84
4% Eurodollar (f)	-	14	14
Other debt, due 2004/2033(b)	126	38	47
	7,960	3,481	3,536
Debt maturing within one year included in current liabilities	(356)	(295)	(652)
	7,604	3,186	2,884

(a)	The Company has two long-term, global, multi-year and multi-currency facilities with a syndicate of major international banks each amounting to $1,000 (2002: $1,000 and $1,000; 2001: $1,000 and $1,000). One of the global facilities expires in tranches in 2005 and 2006 while the other facility expires in 2004; however the Company, at its sole discretion, has an option to extend the maturity of the facility until 2007. The Company also has one short-term, € 700 million revolving credit facility. These facilities are available as back-up for commercial paper issued by the Company in Canada, the U.S. and Europe. Commercial paper of € 368 million ($463) issued by Pechiney is included in Short-term borrowings. To finance the acquisition of Pechiney, the Company had a $4,000 bridge credit facility. As at December 31, 2003, the bridge credit facility had been reduced to $495 and was undrawn.
	On December 31, 2003, 2002 and 2001, the commercial paper borrowings in the U.S. and Canada have been classified as Debt not maturing within one year since the Company had both the intent and ability, through its long term credit facilities, to refinance the borrowings on a long-term basis.
	In 2003, 2002 and 2001, commercial paper borrowings of CAN$1,747 million, CAN$616 million and CAN$940 million, respectively, were swapped for $1,332, $391 and $599, respectively, through the use of forward exchange contracts.
(b)	Interest rates fluctuate principally with the lender’s prime commercial rate, the commercial bank bill rate, or are tied to LIBOR/EURIBOR/SIBOR rates.
(c)	The Swiss franc bonds were issued as CHF178 million and were swapped for $105 at an effective interest rate of 8.98%.The bonds were repaid in April 2003.
(d)	The 8.875% debentures were redeemed in January 2002 at a price of 104.15%. The loss on redemption of $6 pre-tax is included in Other expenses (income) – net.
(e)	The Euro Medium Term Note Program (EMTN) notes of principal amounts of € 13 million and € 8 million with rates tied to EURIBOR or LIBOR were swapped for £9 million and £5 million, respectively.
(f)	Debenture holders were entitled to receive at their option 1,772 common shares held by the Company in NLM, a portfolio investment, in exchange for each ten thousand dollars principal amount of debentures. The Company sold its remaining investment in NLM in the second quarter of 2003 and the debentures were repaid in September 2003.

(g)    Alcan Aluminum Corporation has the right to redeem the Floating Rate Notes due December 8, 2005 at any time on or after June 8, 2004. The Floating Rate Notes rank equally with Alcan Aluminum Corporation’s senior unsecured debt and are guaranteed by the Company.

(h)   Pechiney Pacific has two credit facilities amounting to $110 and $105; $78 and $105 have been borrowed under these facilities, respectively.

(i)     Swapped or partially swapped against index EURIBOR.

(j)    FOCOMO bonds are unlisted bonds subscribed by Pechiney and its French subsidiaries’ employee saving plan fund. The interest rate on the bonds maturing in 2008 will be adjusted in 2004.

(k)    The purchase of the Pechiney OCEANEs, outstanding at December 31, 2003, was completed on February 6, 2004, for a cost of $19.

(l)    Upon acquisition of Pechiney, Pechiney’s debt was recorded at fair market value.

The Company has swapped, to 2004, interest payments on $25 (2002: $3; 2001: $59) of its floating rate debt in exchange for fixed interest payments, interest payments on $660 (2002: $9; 2001: nil) of its fixed rate debt in exchange for floating interest payments, and interest payments on $230 of its floating rate debt in exchange for floating interest payments where the floating rate is capped at a certain percentage.

Based on rates of exchange at year-end, debt repayment requirements over the next five years amount to $356 in 2004, $1,135 in 2005, $1,010 in 2006, $73 in 2007 and $526 in 2008.

    Note 20. Preference Shares     Authorized An unlimited number of preference shares issuable in series. All shares are without nominal or par value.

    Authorized and Outstanding
In each of the years 2003, 2002 and 2001, there were authorized and outstanding 5,700,000 series C and 3,000,000 series E redeemable non-retractable preference shares with stated values of $106 and $54, respectively.

Preference shares, series C and E, are eligible for quarterly dividends based on an amount related to the average of the Canadian prime interest rates quoted by two major Canadian banks for stated periods. The dividends on series C and E preference shares are cumulative.

Preference shares, series C and E, may be called for redemption at the option of the Company on 30 days’ notice at CAN$25.00 per share.

Any partial redemption of preference shares must be made on a pro rata basis or by lot.

    Note 21. Common Shares
The authorized common share capital is an unlimited number of common shares without nominal or par value. On March 3, 2004, there were 367,809,292 common shares outstanding. Changes in outstanding common shares are summarized below:

	Number (in thousands)			Stated Value
	2003	2002	2001	2003	2002	2001
Outstanding – beginning of year	321,470	320,902	317,921	4,703	4,687	4,597
Issued for cash:
Executive share option plan	699	292	2,158	22	7	55
Liquidity Agreement (note 22)	2	-	-	-	-	-
Dividend reinvestment and share
purchase plans	597	276	135	20	9	5
Issued in exchange for tendered
Pechiney securities*	42,413	-	-	1,681	-	-
Issued in exchange for tendered
algroup shares	-	–	688**	-	-	30
Outstanding – end of year	365,181	321,470	320,902	6,426	4,703	4,687

*	Of which 1,418 shares with a stated value of $56 are held by Pechiney.
**	The 688 common shares were issued to acquire the remaining algroup shares in accordance with the provisions of Swiss law.

In June 2000, the Company obtained authorization, which terminated on June 18, 2001, to repurchase up to 21,800,000 common shares under a normal course issuer bid. In 2001, no common shares were purchased under this authorization.

    Shareholder Rights Plan

In 1990, shareholders approved a plan whereby each common share of the Company carries one right to purchase additional common shares. The plan, with certain amendments, was reconfirmed at the 1995 Annual Meeting and further amendments were approved at the 1999 Annual Meeting. The plan was reconfirmed for a three year period with no amendments at the 2002 Annual Meeting. The rights under the plan are not currently exercisable but may become so upon the acquisition by a person or group of affiliated or associated persons (“Acquiring Person”) of beneficial ownership of 20% or more of the Company’s outstanding voting shares or upon the commencement of a takeover bid. Holders of rights, with the exception of an Acquiring Person, in such circumstances will be entitled to purchase from the Company, upon payment of the exercise price (currently $100.00), such number of additional common shares as can be purchased for twice the exercise price based on the market value of the Company’s common shares at the time the rights become exercisable.

The plan has a permitted bid feature that allows a takeover bid to proceed without the rights under the plan becoming exercisable, provided that it meets certain minimum specified standards of fairness and disclosure, even if the Board does not support the bid.

The plan expires in 2008, subject to reconfirmation at the Annual Meeting of Shareholders in 2005 but may be redeemed earlier by the Board, with the prior consent of the holders of rights or common shares, for $0.01 per right. In addition, should a person or group of persons acquire outstanding voting shares pursuant to a permitted bid or a share acquisition in respect of which the Board has waived the application of the plan, the Board shall be deemed to have elected to redeem the rights at $0.01 per right.

Note 22. Stock Options and Other Stock-Based Compensation
    Alcan Executive Share Option Plan
Under the Alcan executive share option plan, certain key employees may purchase common shares at an exercise price that is based on the market value of the shares on the date of the grant of each option. The vesting period for options granted beginning in 1998 is linked to Alcan’s share price performance, but does not exceed nine years. Options granted before 1998 vest generally over a fixed period of four years from the grant date and expire at various dates during the next 10 years.

Changes in the number of shares under options as well as the average exercise price are summarized below:

	Number of Shares under			Weighted Average
	Options (in thousands)			Exercise Price (CAN$)
	2003	2002	2001	2003	2002	2001
Outstanding – beginning of year	8,687	7,108	7,326	46.08	46.34	43.20
Granted	1,609	1,937	1,945	52.58	44.19	50.96
Exercised	(699)	(292)	(2,158)	41.85	39.69	39.85
Forfeited	(31)	(66)	(5)	45.29	46.53	39.08
Outstanding – end of year	9,566	8,687	7,108	47.49	46.08	46.34
Exercisable – end of year	5,852	5,007	4,665	44.98	45.47	44.91

Shares under Options Outstanding at December 31, 2003

			Weighted
		Weighted	Average
Number of	Range of	Average	Remaining
Shares under Options	Exercise Price	Exercise Price	Contractual Life
(in thousands)	(CAN$)	(CAN$)	(Years)
12	33.00	33.00	0.11
1,766	34.47-39.50	38.07	7.31
1,051	40.91-45.43	44.05	3.70
3,992	46.18-48.91	46.91	4.11
2,745	52.64-64.25	55.78	8.82
9,566	33.00-64.25	47.49

Shares under Options Exercisable at December 31, 2003

		Weighted
Number of	Range of	Average
Shares under Options	Exercise Price	Exercise Price
(in thousands)	(CAN$)	(CAN$)
12	33.00	33.00
1,309	34.47-39.50	37.81
1,034	40.91-45.43	44.07
3,178	46.18-48.91	47.00
319	52.64-64.25	57.67
5,852	33.00-64.25	44.98

At December 31, 2003, the Company had reserved for issue under the executive share option plan 14,709,676 shares.

Stock options are granted at an exercise price equal to the market price on the grant date. The weighted average fair value of stock options granted in 2003 is $10.00 (2002: $8.69; 2001: $12.00).

To compute the pro forma compensation expense, the Black-Scholes valuation model was used to determine the fair value of the options granted. Using the model, the fair value of options averages approximately 26% to 41% of the exercise price. See note 2 – Summary of Significant Accounting Policies; Stock Options and Other Stock-Based Compensation.

The fair value of each option grant is estimated on the date of grant with the following weighted average assumptions used for the option grants:

	2003	2002	2001
Dividend yield (%)	1.88	1.65	1.93
Expected volatility (%)	29.16	35.73	30.83
Risk-free interest rate (%)	3.39	3.50	5.57
Expected life (years)	6	6	10

    Pechiney Stock Option Plans
Under the stock option plans of Pechiney, now a wholly-owned subsidiary of Alcan, certain officers and employees were granted options to subscribe to or to purchase Pechiney common shares.

Alcan and Pechiney agreed on the terms of a liquidity agreement which has been made available to beneficiaries of Pechiney subscription and purchase options (“Liquidity Agreement”). The Liquidity Agreement allows the holders of Pechiney options to either (a) exchange their Pechiney shares resulting from the exercise of the Pechiney options for Alcan common shares on the basis of a ratio equivalent to the consideration offered under Alcan’s public offer for Pechiney or (b) give up their Pechiney options and receive new options to subscribe for Alcan common shares on the basis of a ratio equivalent to the consideration offered under Alcan’s public offer for Pechiney. Upon the clearance by the French Conseil des marchés financiers of Alcan’s initial public offer for Pechiney securities on July 16, 2003, the Pechiney options became fully vested.

Changes in the number of Alcan shares under Pechiney options as well as the average exercise price are summarized below:

	Number of Shares under Pechiney Options (in thousands) 2003	Weighted Average Exercise Price (€) 2003
Outstanding – beginning of year	-	-
Shares subject to the Liquidity Agreement	3,891	34.71
Exercised	(2)	22.62
Outstanding and exercisable – end of year	3,889	34.71

Shares under Pechiney Options Outstanding and Exercisable at December 31, 2003

			Weighted
		Weighted	Average
Number of	Range of	Average	Remaining
Shares Under Options	Exercise Price	Exercise Price	Contractual Life
(in thousands)	(€)	(€)	(Years)
540	19.09-22.73	22.23	8.04
384	26.80-29.52	27.13	4.74
1,609	33.15-35.77	33.89	6.65
1,356	42.80-42.96	42.82	8.19
3,889	19.09-42.96	34.71

Under the terms of the Liquidity Agreement, a maximum of 3,890,542 Alcan common shares can be issued.

    As part of the cost of the acquisition of Pechiney (see note 6 - Acquisition of Pechiney) an amount of $80 was recognized for the fair value of the Pechiney share options and credited to contributed surplus. The Black-Scholes valuation model was used to determine the fair value of Pechiney options. The weighted average assumptions used were a dividend yield of 2.19%, an expected volatility of 52.5%, a market risk-free interest rate of 3.99% and an expected life of 7 years.

Pro Forma Expense
For pro forma income purposes, the fair value of options granted is being amortized over their respective vesting period.

Pro forma net income and net income per common share – basic and diluted, as if the fair value method had been applied to all stock option awards, are presented below.

	2003	2002	2001
Net income as reported	167	374	2
Compensation expense if the fair value method was used	(13)	(11)	(24)
Pro forma net income (loss)	154	363	(22)
Net income (Loss) per common share – basic – as reported	0.50	1.15	(0.02)
Pro forma net income (loss) per common share – basic	0.46	1.12	(0.10)
Net income (Loss) per common share – diluted – as reported	0.50	1.14	(0.02)
Pro forma net income (loss) per common share – diluted	0.46	1.11	(0.10)

    Compensation To Be Settled in Cash
    Stock Price Appreciation Unit Plan
A small number of employees are entitled to receive Stock Price Appreciation Units ("SPAU") whereby they are entitled to receive cash in an amount equal to the excess of the market value of a common share on the date of exercise of a SPAU over the market value of a common share as of the date of grant of such SPAUs. In 2003, 254,200 units (2002: 275,600 units; 2001: 311,060 units) were granted. At December 31, 2003, 720,309 units (2002: 580,305 units; 2001: 311,060 units) were outstanding, of which 260,685 units (2002: 214,635 units; 2001: nil units) were vested. The vesting period is linked to Alcan’s share price performance, but does not exceed nine years.

    Executive Deferred Share Unit Plan Under the Executive Deferred Share Unit Plan, executive officers based in Canada may elect, prior to the beginning of any particular year, to receive Executive Deferred Share Units (EDSUs) with a value between 10% and 100% of their Executive Performance Award in respect of that year, instead of a cash payment. The number of EDSUs is determined by dividing the amount so elected by the average price of a common share on the Toronto and New York stock exchanges at the end of the preceding year. Additional EDSUs are credited to each holder thereof corresponding to dividends declared on common shares. The EDSUs are redeemable only upon termination of employment (retirement, resignation or death). The amount to be paid by the Company upon redemption is calculated by multiplying the accumulated balance of EDSUs by the average price of a common share on the said exchanges at the time of redemption. Under the terms of this plan, discretionary EDSUs may be granted as determined by the Board. In 2003, 25,038 units (2002: 9,771 units; 2001: 36,214 units) were granted and 24,935 units (2002: 939 units; 2001: 12,467 units) were redeemed. At December 31, 2003, 224,972 units (2002: 224,869 units; 2001: 216,037 units) were outstanding.

    Total Shareholder Return Performance Plan A number of employees are entitled to receive cash awards under the Total Shareholder Return Performance Plan, a cash incentive plan which provides performance awards to eligible employees based on the relative performance of the Company’s common share price and cumulative dividend yield performance compared to other corporations included in the Standard & Poor’s Industrial Composite Index measured over three-year periods commencing on October 1, 2003 and 2002. If the performance results for the Company’s common shares is below the 30th percentile compared to all companies in the Standard & Poor’s Industrials Composite Index, the employee will not receive an award. At or above the 75th percentile rank, the employee will earn the maximum award, which is equal to 300% of the target set for the period. The actual amount of the award (if any) will be prorated between the percentile rankings. In 2003, a total target cash award of $15 (2002: $12) was granted to specific key employees.

As described above, under the Executive Deferred Share Unit Plan, executive officers based in Canada may elect, at least 12 months prior to the period, to receive EDSUs with a value between 10% and 100% of their award earned under the Total Shareholder Return Performance Plan for that period instead of a cash payment.

    Non-Executive Directors Deferred Share Unit Plan Under the Non-Executive Directors Deferred Share Unit Plan, non-executive directors receive 50% of compensation payable in the form of Directors’ Deferred Share Units (DDSUs) and 50% in the form of either cash or additional DDSUs at the election of each non-executive director. The number of DDSUs is determined by dividing the quarterly amount so elected by the average price of a common share on the Toronto and New York stock exchanges on the last five trading days of each quarter. Additional DDSUs are credited to each holder thereof corresponding to dividends declared on common shares. The DDSUs are redeemable only upon termination (retirement, resignation or death). The amount to be paid by the Company upon redemption is calculated by multiplying the accumulated balance of DDSUs by the average price of a common share on the said exchanges at the time of redemption. In 2003, 28,011 units (2002: 25,913 units; 2001: 15,859 units) were granted and 16,742 units (2002: 8,876 units; 2001: 5,905 units) were redeemed. At December 31, 2003, 59,481 units (2002: 48,212 units; 2001: 31,175 units) were outstanding.

    Restricted Stock Units In 2003, a small number of employees were granted Restricted Stock Units (RSUs). Additional RSUs are credited to each holder thereof corresponding to dividends declared on common shares and they will be fully vested on December 15, 2006. Each RSU carries the right to an amount equal to the average of the closing prices of a common share on the Toronto and New York stock exchanges on the five consecutive trading days ending December 15, 2006. A total of 45,500 units were granted under this plan in 2003.

    Deferred Share Agreements Deferred share agreements were also entered into with a small number of employees whereby the Company will grant to the executive a certain number of common shares after having completed three years of service. Under these agreements, no deferred shares were granted in 2003 (2002: 33,500; 2001: 15,000).

    Compensation Cost The compensation cost for stock-based employee compensation awards, that are to be settled in cash, is based on the change in the common share price during the year and is recognized in income over the vesting period of each award. Total compensation cost for such awards was $26 in 2003 (2002: $2; 2001: $4).

    Note 23. Retained Earnings
Consolidated retained earnings at December 31, 2003, include $2,586 (2002: $3,146; 2001: $3,243) of undistributed earnings of subsidiaries and joint ventures, some part of which may be subject to certain taxes and other restrictions on distribution to the parent company. No provision is made for such taxes as these earnings are considered to be permanently reinvested in the businesses.

    Note 24. Commitments and Contingencies
In 1997, as part of the claim settlement arrangements related to the British Columbia Government's cancellation of the Kemano Completion Project, the Company obtained the right to transfer a portion of a power supply contract with BC Hydro to a third party. The Company sold the right to supply this portion to Enron Power Marketing Inc. (EPMI), a subsidiary of Enron Corporation (Enron) for cash consideration. In order to obtain the consent of BC Hydro to this sale, the Company was required to retain a residual obligation for EPMI's performance under the power supply contract in the event that EPMI became unable to perform, to a maximum aggregate amount of $100, with mitigation and subrogation rights. BC Hydro assigned its rights to receive the power to BC Hydro's affiliate, Powerex Corporation (Powerex). On December 2, 2001, EPMI and Enron filed for protection under Chapter 11 of the U.S. Bankruptcy Code. Powerex alleged that the power supply contract with EPMI was terminated and that Powerex was owed a termination payment of more than $100. On March 22, 2002, Alcan received a demand for payment in the amount of $100 from Powerex. On January 17, 2003, an arbitrator’s decision confirmed Powerex's claim for $100. In early 2003, Alcan commenced legal proceedings in the U.S. Federal Court (Oregon) seeking judicial review of the arbitration award. Powerex also commenced a proceeding in the British Columbia Supreme Court to recognize and enforce the arbitration award. On July 10, 2003, the B.C. Supreme Court stayed the British Columbia proceedings until the U.S. Federal Court had decided the various matters before it. On September 18, 2003, a Magistrate Judge of the U.S. Federal Court issued his recommendations. The Magistrate Judge recommended that the Company's motion for judicial review of the arbitration award be denied. On September 29, 2003, the Company filed an objection with the U.S. Federal Court objecting to the recommendations of the Magistrate Judge and Powerex shortly thereafter filed a reply to the objection. The Magistrate Judge's recommendations, the objection and the reply to the objection have been submitted to an Article 3 judge of the U.S. Federal Court who will make the final decision. A provision of $100 pre-tax was recorded in the fourth quarter of 2002.

On January 21, 2004, Kaiser Aluminum Corporation and affiliated entities filed a motion before the U.S. Bankruptcy Court for the District of Delaware seeking to reject the five-year alumina supply agreement between Kaiser Aluminum International, Inc. (KAII) and Pechiney Trading Company (PTC). The agreement provides for the supply of 300,000tonnes of alumina a year to PTC, from January2002 to the end of 2006. KAII assumed the agreement after it had entered into U.S. Chapter11 debtor protection status. The Court specifically authorized the assumption of the agreement under applicable provisions of the U.S. BankruptcyCode at the request of the Kaiser debtors. PTC believes that the agreement is valid and enforceable and has filed objections to the motion as well as several motions of its own against the Kaiser entities. Neither the likelihood of, nor the amount of, any financial impact can currently be determined.

The approval of the Pechiney acquisition by the European Commission was obtained on September 29, 2003. The approval is subject to the following conditions:

1)       Alcan must divest its anode baking furnace designs.

2)     The Company must continue to grant licenses to third parties for the alumina refining technologies of either Alcan or Pechiney, and Pechiney’s smelter cell technologies on terms and conditions equivalent to those in existence prior to the Pechiney acquisition.

3)       The Company must divest either of the following groups of assets:

(a)	Alcan’s 50% interest in AluNorf, held through a joint venture with Norsk Hydro ASA, and its Göttingen and Nachterstedt rolling mills. In addition, the Company must transfer the research and development capacities related to these assets to the purchaser. The Latchford recycling facility may also, at the purchaser’s option, be included in the divestiture;
(b)	Pechiney’s interest in the rolling mill at Neuf-Brisach, the Rugles foil mill and, at the purchaser’s option, the Annecy rolling mill. In addition, the Company must transfer the research and development capacities related to these assets to the purchaser. The Latchford recycling facility may also, at the purchaser’s option, be included in the divestiture.

           As of December 31, 2003, the Company had not determined which of these groups of assets to divest.

4)       The Company must also divest either of the following operations:

(a)	Alcan’s European activities in relation to aerosol cans and aluminum cartridges;
(b)	Pechiney’s European activities in relation to aerosol cans and aluminum cartridges.

            As of December 31, 2003, the Company had not determined which of these groups of assets to divest.

The divestitures must be completed within a limited period.

In order to obtain the approval of the Pechiney acquisition by the DOJ, the Company entered into a consent decree, on September 29, 2003, with the DOJ pursuant to which the Company has undertaken to divest Pechiney’s rolling mill located in Ravenswood, West Virginia, as described in note 4 – Discontinued Operations and Assets Held for Sale. This divestiture must be completed by March 31, 2004, subject to two 30-day extensions granted at the discretion of the DOJ.

The Company has guaranteed the repayment of approximately $187 of indebtedness by third parties. Alcan believes that none of these guarantees is likely to be invoked. These guarantees relate primarily to customer contracts, employee housing loans and potential environmental remediation at former Alcan sites. Commitments with third parties and certain related companies for supplies of goods and services are estimated at $607 in 2004, $259 in 2005, $226 in 2006, $237 in 2007, $177 in 2008 and $1,769 thereafter. Total payments to these entities were $171 in 2003, $50 in 2002 and $36 in 2001, excluding capital expenditures and $218 in 2001, in relation to the Alma, Quebec, smelter.

Minimum rental obligations are estimated at $100 in 2004, $81 in 2005, $69 in 2006, $62 in 2007, $38 in 2008 and $155 thereafter. Total rental expenses amounted to $91 in 2003, $82 in 2002 and $72 in 2001.

Alcan, in the course of its operations, is subject to environmental and other claims, lawsuits and contingencies. The Company has environmental contingencies relating to approximately 111 existing and former Alcan sites and third-party sites. Accruals have been made in specific instances where it is probable that liabilities will be incurred and where such liabilities can be reasonably estimated. Environmental provisions were recorded in 2002 and 2001 for treatment costs relating to spent potlining in Canada and for remediation costs relating to red mud disposal at other sites in Canada and the U.K.

Although there is a possibility that liabilities may arise in other instances for which no accruals have been made, the Company does not believe that it is reasonably possible that losses in excess of accrued amounts are sufficient to significantly impair its operations, have a material adverse effect on its financial position or liquidity, or materially and adversely affect its results of operations for any particular reporting period, absent unusual circumstances, will occur.

In addition, see reference to income taxes in note 10, debt repayments in note 19, and financial instruments and commodity contracts in note 26.

Note 25. Currency Gains and Losses
The following are the amounts recognized in the financial statements:
	2003	2002	2001
Currency gains (losses) recorded in income
Gains (Losses) realized and unrealized on currency derivatives	(37)	(146)	15
Realized deferred translation adjustments*	9	11	(2)
Gains (Losses) on translation of monetary assets and liabilities	(46)	106	(23)
	(74)	(29)	(10)
Deferred translation adjustments – beginning of year	259	(151)	(20)
Effect of exchange rate changes	425	460	(129)
Losses (Gains) realized*	(9)	(11)	2
Losses on forward exchange contracts or translation of debt
designated as an equity hedge of foreign subsidiaries	(57)	(39)	(4)
Gains on translation of a convertible loan to a
subsidiary forming part of the net investment	17	-	-
Deferred translation adjustments - end of year	635	259	(151)

* The gain realized in 2003 includes a gain of $14 on the sale of the remaining portion of the Company’s investment in NLM and a gain of $11 on the sale of Fibrenyle in the U.K. that is included in Loss from discontinued operations. These gains are offset in part by a loss on the sale of Alcan Nikkei Siam Limited of $11, and a loss of $5 on the sale of the Company’s extrusions operations in Milan, Italy, that is included in Loss from discontinued operations.

The gain realized in 2002 related to a gain on the partial sale of the Company’s investment in NLM which was offset in part by a loss on the sale of Alcan Nikkei Thai Limited.

In 2001, $6 of exchange losses related to hedging of Canadian dollar construction costs of the new smelter at Alma, Quebec. In 2002 and 2001, these costs were included in Property, plant and equipment – cost. See note 10 – Income Taxes for amounts of exchange gains and losses included in income taxes.

    Note 26. Financial Instruments and Commodity Contracts
In conducting its business, the Company uses various derivative and non-derivative instruments, including forward contracts, swaps and options, to manage the risks arising from fluctuations in exchange rates, interest rates, aluminum prices and other commodity prices. Generally, such instruments are used for risk management purposes only.

    Derivatives – Currency
The Company enters into forward currency contracts and options that are designated as hedges of certain identifiable foreign currency revenue and operating cost exposures. Foreign currency forward contracts and swaps are also used to hedge certain foreign currency denominated debt and intercompany foreign currency denominated loans.

Outstanding at December 31		2003		2002		2001
Financial Instrument	Hedge	Notional Amount	Fair Value	Notional Amount	Fair Value	Notional Amount	Fair Value
Forward exchange contracts	Future firm net operating cash flows(1) (10)	1,212	33	876	(16)	933	(16)
Forward exchange contracts	To swap intercompany foreign currency denominated loans to US$(3)	1,178	(37)	797	(34)	415	(7)
Forward exchange contracts	To swap intercompany foreign currency denominated loans to €(10)	684	31	-	-	-	-
Forward exchange contracts	To hedge € equity (9)	1,256	(44)	-	-	-	-
Forward exchange contracts	Future commitments (7)	-	-	-	-	20	-
Currency options	Future firm operating cost commitments(1)	70	16	163	6	220	(1)
Currency options	Future US$ sales against € (10)	325	51	-	-	-	-
Currency options	Future US$ sales against £(10)	9	-	-	-	-	-
Cross currency interest swap	To swap CAN$ commercial paper borrowings to US$(2)	1,349	13	391	-	599	(9)
Cross currency interest swap	To swap 5.375% CHF178 million bonds to US$(4)	-	-	105	24	105	-
Cross currency interest swap and forward exchange contracts	To swap US$ third party borrowings to KRW(5)	233	2	271	(5)	--
Cross currency interest swap	To swap € 400 million medium term notes to CHF608 million (6)	-	-	-	-	360	(8)
Cross currency interest swap	To swap € 21 million medium term notes to £14 million(6)	25	1	23	(1)	20	(2)
Cross currency interest swap	To swap US$ commercial paper borrowings to CHF (8)	-	-	-	-	307	3
Cross currency interest swap	To swap € debt to SEK(10)	19	-	-	-	-	-

(1)	Included in Deferred charges and other assets and Other receivables is an amount of nil (2002: $1; 2001: nil) consisting of net losses on terminated forward exchange contracts and options, as well as the net cost of outstanding options, used to hedge future costs. These deferred charges will be included in the cost of the underlying transactions being hedged upon their recognition. Included in Payables and accrued liabilities is an amount of $1 (2002: $1) that offsets the revaluation of the underlying items being hedged.
(2)	An amount of $16 (2002: nil; 2001: liability of $12) related to the swap of the principal has been recorded in Deferred charges and other assets. The CAN$1,747 million swap, outstanding at December 31, 2003, matures at various dates in 2004. The CAN$616 million swap, outstanding at December 31, 2002, matured in 2003. The CAN$940 million swap, outstanding at December 31, 2001, matured in 2002.
(3)	A net liability of $34 (2002: $34) which is recorded in the balance sheet, offsets the revaluation of the underlying intercompany foreign currency denominated loans being hedged.
(4)	The 5.375% Swiss franc bonds of principal amount of CHF178 million were swapped for $105 at an effective interest rate of 8.98%. In 2002, an asset of $24 (2001: nil) related to the swap of the principal was recorded in Other receivables. The swap matured in 2003.

(5)	A liability of $2 (2002: $4), which is recorded in Other receivables (2002: Payables and accrued liabilities), offsets the revaluation of the underlying third-party borrowings being hedged.
(6)	Part of the EMTN Program, whereby an amount of nil (2002: nil; 2001: liability of $8) has been recorded in the balance sheet.
(7)	Mainly Canadian dollar, principally for the construction of the smelter at Alma, Quebec.
(8)	In 2001, an asset of $8 was recorded in the balance sheet. Because the swap was hedging an intercompany CHF loan, it had no impact on net income. The CHF505 million swap, outstanding at December 31, 2001, matured in May 2002.
(9)	A liability of $58 has been recorded in Deferred credits and other liabilities and an exchange loss of $58 recorded in Deferred translation adjustments.
(10)	Upon acquisition of Pechiney, the fair value of $129 for Pechiney’s currency derivatives was recorded in Other receivables.

    Derivatives – Interest Rate
The Company sometimes enters into interest rate swaps to manage funding costs as well as the volatility of interest rates.

	2003		2002		2001
	Notional	Fair	Notional	Fair	Notional	Fair
Outstanding at December 31, 2003	Amount	Value	Amount	Value	Amount	Value
Financial Instrument
Rate swap - Fixed to floating
- in € Fixed to EURIBOR	534	8	9		- -	-
- in US$ Fixed to LIBOR	126	-	-		- -	-
Rate swap - Floating to fixed
- in KRW Floating to KRW Fixed	25	-	3		59	(1)
Rate swap - floating to Floating capped
- in €Floating to €Fixed	230	6

Upon acquisition of Pechiney, the fair value $14 for Pechiney’s interest rate derivatives was recorded in Deferred charges and other assets.

    Derivatives and Commodity Contracts – Aluminum
Depending on supply and market conditions, as well as for logistical reasons, the Company may sell primary metal to third parties and may purchase primary and secondary aluminum on the open market to meet its fabricated products requirements. In addition, the Company may hedge certain commitments arising from pricing arrangements with some of its customers and the effects of price fluctuations on inventories.

Through the use of forward purchase and sales contracts and options, the Company seeks to limit the negative impact of low metal prices.

Outstanding at December 31	2003	2002	2001
Financial Instrument
Forward contracts (principally forward sales contracts in 2003 and
principally forward purchase contracts in 2002 and 2001)
Tonnes covered	1,423,561	556,051	650,400
Maturing principally in years	2004 to 2005	2003 to 2004	2002 to 2004
Call options purchased
Number of tonnes	14,575	88,050	379,925
Maturing principally in years	2004	2003	2002 to 2003
Call options sold
Number of tonnes	155,400	-	-
Maturing principally in years	2004	-	-
Put options purchased
Number of tonnes	150,000	-	42,000
Maturing principally in years	2004	-	2002
Fair value	(37)	15	(25)

Included in Other receivables or Deferred charges and other assets is nil in 2003 (2002: $4; 2001: $12) representing the net cost of outstanding options. Also included in 2003 in Other receivables is an amount of $2 (2002: $5) and included in Payables and accrued liabilities is an amount of $7 (2002: nil) consisting of net gains (2002: net losses) on terminated forward metal contracts used to hedge future costs. These deferred amounts will be included in the cost of the items being hedged at the same time as the underlying transactions being hedged are recognized.

Upon acquisition of Pechiney, the fair value of $(19) for Pechiney’s aluminum derivatives was recorded in Payables and accrued liabilities.

    Derivatives and Commodity Contracts – Other Metals
The Company has entered into derivatives to hedge the effects of price fluctuations on sales, purchases, and inventories.

Outstanding at December 31	2003	2002	2001
Financial Instrument
Forward contracts (principally forward sales contracts)
Tonnes covered	1,442,969	-	-
Maturing principally in years	2004	-	-
Fair value	(53)	-	-

Upon acquisition of Pechiney, the fair value of $(53) for Pechiney’s other metal derivatives was recorded in Payables and accrued liabilities.

    Derivatives – Oil
As a hedge of future oil purchases, the Company had outstanding as at December 31:

	2003	2002	2001
Financial Instrument
Futures, swaps and options
Number of barrels (in millions)	10.4	14.0	17.1
Maturing at various times in the years	2004 to 2006	2003 to 2006	2002 to 2006
Fair value	2	9	(12)
In 2002, a net liability of $4 (2001: $10) relating to the oil derivatives is recorded in the balance sheet.
Derivatives – Natural Gas
As a hedge of future natural gas purchases, the Company had outstanding as at December 31:
	2003	2002	2001
Financial Instrument
Swaps
Number of decatherms (in millions)	2.0	1.5	-
Options
Number of decatherms (in millions)	2.3	0.4	-
Fixed price contracts
Number of decatherms (in millions)	-	0.8	5.3
Maturing in various times throughout	2004	2003	2002
Fair value	1	2	(4)

Counterparty Risk
As exchange rates, interest rates, metal, oil and natural gas prices fluctuate, the above contracts will generate gains and losses that will be offset by changes in the value of the underlying items being hedged. The Company may be exposed to losses in the future if the counter parties to the above contracts fail to perform. However, the Company is satisfied that the risk of such non-performance is remote, due to its monitoring of credit exposures.

    Financial Instruments – Fair Value
On December 31, 2003, the fair value of the Company’s long-term debt totaling $7,960 (2002: $3,481; 2001: $3,536) was $8,135 (2002: $3,699; 2001: $3,579), based on market prices for the Company’s fixed rate securities and the book value of variable rate debt.

At December 31, 2003, the quoted market value of the Company’s marketable portfolio investments having a book value of $45 (2002: $28; 2001: $31) was $51 (2002: $34; 2001: $39).

At December 31, 2003, the fair value of the Company’s preference shares having a book value of $160 (2002 and 2001: $160) was $173 (2002: $131; 2001: $128).

    The fair values of all other financial assets and liabilities are approximately equal to their carrying values.

    Note 27. Supplementary Information

	2003	2002	2001
Income statement
Interest on long-term debt	191	158	218
Capitalized interest	(6)	(1)	(30)
Balance sheet
Payables and accrued liabilities include the following:
Trade payables	3,293	937	884
Other accrued liabilities	1,195	908	955
Income and other taxes	360	158	200
Accrued employment costs	339	280	242

At December 31, 2003, the weighted average interest rate on short-term borrowings for continuing operations was 2.7% (2002: 4.1%; 2001: 5.0%).

Statement of cash flows
Interest paid
- continuing operations	226	204	263
- discontinued operations	1	1	2
Income taxes paid
- continuing operations	239	183	216
- discontinued operations	2	4	(3)

    Note 28. Post-retirement Benefits Alcan, its subsidiaries and joint ventures have established pension plans in the principal countries where they operate. Most of the pension obligation relates to funded defined benefit pension plans in Canada, Switzerland, the United Kingdom and the United States, unfunded pension benefits in France and Germany, and lump sum indemnities payable to employees of French companies upon retirement. Pension benefits are generally based on the employee’s service and highest average eligible compensation before retirement, and are periodically adjusted for cost of living increases, either by Company practice, collective agreement or statutory requirement.

Most funded pension plans are administered by a Board of Trustees composed of plan members designated by the Company and employees. Each Board adopts its own investment policy that generally favors diversification and active management of plan assets through selection of specialized managers. Investments are generally limited to publicly traded stocks and high-rated debt securities, excluding securities in Alcan, and include only small amounts in other categories, except for the Swiss plan, whose target allocation is evenly distributed between equity, bonds, and real estate. Depending on the age distribution of the membership, target allocation varies as indicated below. The allocation at December 31, 2003, includes all major plans.

Category of asset	Target allocation	Allocation in aggregate at December 31
		2003	2002	2001
Equity	40% to 65%	52%	50%	53%
Debt securities	30% to 55%	37%	40%	38%
Real Estate		6%	7%	6%

    Alcan’s pension funding policy is to contribute the amount required to provide for contractual benefits attributed to service to date, and to amortize unfunded actuarial liabilities for the most part over periods of 15 years or less. The Company expects to contribute $172 in aggregate to its funded pension plans in 2004, and to pay $68 of unfunded pension benefits and lump sum indemnities from operating cash flows.

The Company and some of its subsidiaries provide health care and life insurance benefits to retired employees in Canada and the United States, mostly unfunded. The Company expects to pay benefits of $69 in 2004 from operating cash flows and to contribute $1 to its funded plans.

	Pension Benefits			Other Benefits
	2003	2002	2001	2003	2002	2001
Change in benefit obligation
Benefit obligation at January 1	7,198	6,514	6,317	241	217	201
Service cost	141	126	120	6	5	5
Interest cost	448	405	376	17	15	15
Members’ contributions	39	27	26	-	-	-
Benefits paid	(394)	(388)	(346)	(16)	(14)	(12)
Amendments	4	111	153	-	1	-
Acquisition of Pechiney	1,156	-	-	661	-	-
Other acquisitions	198	-	-	2	-	-
Curtailments/divestitures	1	(6)	(71)	-	(2)	-
Actuarial (gains) losses	822	(38)	23	39	19	8
Currency (gains) losses	437	447	(84)	1	-	-
Benefit obligation measured at December 31	10,050	7,198	6,514	951	241	217
Change in market value of plan assets (Assets)
Assets at January 1	5,777	6,047	7,014	3	4	5
Actual return on assets	1,300	(349)	(537)	-	-	-
Members’ contributions	39	27	26	-	-	-
Benefits paid from funded plans	(361)	(350)	(325)	(1)	(1)	(2)
Company contributions	127	90	59	-	-	1
Acquisition of Pechiney	267	-	-	-	-	-
Other acquisitions	111	-	-	-	-	-
Curtailments/divestitures	-	(4)	(117)	-	-	-
Currency gains (losses)	324	316	(73)	-	-	-
Assets at December 31	7,584	5,777	6,047	2	3	4
Assets less than
benefit obligation	(2,466)	(1,421)	(467)	(949)	(238)	(213)
Unamortized
– actuarial (gains) losses	612	656	(193)	32	(9)	(24)
– prior service cost	624	687	653	1	1	1
Net liability in balance sheet	(1,230)	(78)	(7)	(916)	(246)	(236)

The net liability in the consolidated balance sheet includes $889 of pension benefit obligation of Pechiney in excess of market value of assets at December 31, 2003, principally from unfunded retirement plans in Europe, and $661 of benefit obligation in respect of other post-retirement benefits.

    For certain plans, the projected benefit obligation (PBO) exceeds the market value of the assets. For these plans, including unfunded pensions and lump sum indemnities, the PBO is $7,147 (2002: $6,468; 2001: $4,083), the accumulated benefit obligation (ABO) is $6,696 (2002: $5,885; 2001: $3,769), while the market value of the assets is $4,591 (2002: $5,023; 2001: $3,272).

The total ABO is $9,341 (2002: $6,512; 2001: $5,938). For certain plans, the ABO exceeds the market value of the assets. For these plans, including unfunded pensions and lump sum indemnities, the PBO is $5,932 (2002: $3,862; 2001: $2,495), the ABO is $5,669 (2002: $3,576; 2001: $2,414) while the market value of the assets is $3,539 (2002: $2,608; 2001: $1,882).

	Pension Benefits			Other Benefits
	2003	2002	2001	2003	2002	2001
Components of net periodic benefit cost
Service cost	141	126	120	6	5	5
Interest cost	448	405	376	17	15	15
Expected return on assets	(437)	(437)	(480)	-	-	(1)
Amortization
– actuarial (gains) losses	82	9	(47)	-	(2)	(1)
– prior service cost	69	69	89	-	-	-
Curtailment/settlement (gains) losses	8	9	40	-	(2)	-
Net periodic benefit cost	311	181	98	23	16	18
	Pension Benefits			Other Benefits
	2003	2002	2001	2003	2002	2001
Weighted average assumptions used
to determine benefit obligation at December 31
Discount rate	5.6%	5.8%	6.1%	6.2%	6.5%	6.9%
Average compensation growth	3.3%	3.3%	3.6%	3.7%	3.9%	4.4%
Weighted average assumptions used
to determine net periodic benefit cost
Discount rate	5.8%	6.1%	6.3%	6.5%	6.9%	7.3%
Average compensation growth	3.3%	3.6%	3.7%	3.9%	4.4%	4.5%
Expected return on assets	7.1%	7.1%	7.3%	8.5%	8.5%	8.5%

In estimating the expected return on assets of a pension plan, consideration is given primarily to its target allocation, the current yield on long-term bonds in the country where the plan is established, and the historical risk premium in each relevant country of equity or real estate over long-term bond yields. The approach is consistent with the principle that assets with higher risk provide a greater return over the long-term.

    The assumed health care cost trend used for measurement purposes is 9.8% for 2004, decreasing gradually to 4.3% in 2010 and remaining at that level thereafter. A one percentage point change in assumed health care cost trend rates would have the following effects:

	Other Benefits
	1% Increase	1% Decrease
Sensitivity Analysis
Effect on service and interest costs	2	(1)
Effect on benefit obligation	72	(66)

The Company also sponsors savings plans in Canada and the United States as well as defined contribution pension plans in various countries. The cost of the Company contribution was $21 in 2003 (2002: $20; 2001: $21).

    Note 29. Information by Geographic Areas

	Location	2003	2002	2001
Sales and operating revenues – third parties (by destination)
	Canada	806	707	584
	United States	4,452	4,574	4,597
	Brazil	417	395	470
	France	558	416	438
	United Kingdom	1,030	933	964
	Germany	1,622	1,402	1,365
	Switzerland	208	191	184
	Other Europe	2,305	1,809	1,807
	Australia	104	103	39
	Asia and Other Pacific	1,757	1,492	1,544
	All other	381	274	393
	Total	13,640	12,296	12,385
Sales and operating revenues	Canada	2,577	2,354	2,127
– intercompany (by origin)	United States	581	602	541
	Brazil	86	54	64
	France	18	15	16
	United Kingdom	445	385	408
	Germany	513	319	242
	Switzerland	772	765	670
	Other Europe	661	599	581
	Australia	350	299	288
	Asia and Other Pacific	19	13	5
	All other	118	97	190
	Sub-total	6,140	5,502	5,132
	Consolidation eliminations	(6,140)	(5,502)	(5,132)
	Total	-	-	-

Sales to subsidiary companies are made at fair market prices recognizing volume, continuity of supply and other factors.
	Location	2003	2002	2001
Sales and operating revenues	Canada	1,363	999	1,045
– third parties (by origin)	United States	4,252	4,389	4,355
	Brazil	450	420	424
	France	411	262	255
	United Kingdom	793	829	828
	Germany	2,409	2,028	2,022
	Switzerland	1,381	1,356	1,421
	Other Europe	1,061	760	704
	Australia	184	183	208
	Asia and Other Pacific	1,233	972	1,014
	All other	103	98	109
	Total	13,640	12,296	12,385

    Note 29. Information by Geographic Areas (cont’d)

	Location	2003	2002	2001
Income (Loss) from	Canada	(66)	94	(57)
continuing operations (*)	United States	97	74	137
	Brazil	11	38	29
	France	(1)	12	9
	United Kingdom	8	10	(138)
	Germany	(13)	36	19
	Switzerland	2	8	(14)
	Other Europe	71	17	(12)
	Australia	129	68	87
	Asia and Other Pacific	21	3	(30)
	All other	30	24	(38)
	Consolidation eliminations	1	5	12
	Total	290	389	4

(*) Other Specified Items included in Income (Loss) from continuing operations is comprised of restructuring charges, asset impairments, gain (loss) from non-routine sales of assets, businesses and investment, tax adjustments, legal and environmental provisions and other. In 2003, Other Specified Items also included Pechiney financing-related gains.

In 2003, Income (Loss) from continuing operations included after-tax charges (income) relating to Other Specified Items of $(61) for Canada, $31 for the United States, $16 for Brazil, $7 for France, $(3) for the United Kingdom, $45 for Germany, $16 for Switzerland, $(4) for Other Europe, $(74) for Australia and $(13) for Asia and Other Pacific.

In 2002, Income (Loss) from continuing operations included after-tax charges (income) relating to Other Specified Items of $85 for Canada, $20 for the United States, $(2) for Brazil, $3 for France, $12 for the United Kingdom, $(5) for Germany, $2 for Switzerland, $13 for Other Europe, $(16) for Asia and Other Pacific and $(5) for All other.

In 2001, Income (Loss) from continuing operations included after-tax charges (income) relating to Other Specified Items of $200 for Canada, $23 for the United States, $2 for Brazil, $6 for France, $161 for the United Kingdom, $(3) for Germany, $11 for Switzerland, $36 for Other Europe, $1 for Australia, $4 for Asia and Other Pacific and $90 for All other.

In 2002, Income (Loss) from continuing operations included income (charges) for transfer pricing adjustments of $69 for Canada, $(70) for the United States and $5 for the United Kingdom. (See note 10 - Income Taxes).

	Location	2003	2002	2001
Property, plant and equipment,	Canada	4,386	4,317	4,114
Intangible assets and Goodwill at	United States	3,148	1,500	1,689
December 31 (*)(**)	Brazil	757	743	731
	France	3,642	224	257
	United Kingdom	1,001	807	755
	Germany	1,474	1,108	1,166
	Switzerland	660	630	704
	Other Europe	2,529	1,476	1,422
	Australia	2,038	1,215	1,199
	Asia and Other Pacific	813	627	607
	All other	472	65	81
	Total	20,920	12,712	12,725
Cash paid for capital expenditures	Canada	286	477	399
and business acquisitions (**)	United States	925	96	196
	Brazil	74	78	61
	France	1,610	14	17
	United Kingdom	134	70	87
	Germany	200	85	73
	Switzerland	30	43	44
	Other Europe	653	87	95
	Australia	424	58	416
	Asia and Other Pacific	180	33	79
	All other	189	13	27
	Total	4,705	1,054	1,494
Average number of employees
excluding Pechiney	Canada	11	12	12
(in thousands – unaudited)	United States	8	9	9
	Brazil	3	3	3
	France	2	2	2
	United Kingdom	4	4	5
	Germany	8	8	8
	Switzerland	3	3	4
	Other Europe	5	4	4
	Australia	1	1	1
	Asia and Other Pacific	2	2	2
	All other	2	1	2
	Total	49	49	52

(*) In 2003, Property, plant and equipment, Intangible assets, and Goodwill include goodwill impairment charges of $6 in France, $5 in Germany, $5 in Switzerland and $12 in Other Europe.

In 2002, Property, plant and equipment, Intangible assets and Goodwill – net included goodwill impairment charges of $9 for Canada, $130 for the United States, $33 for the United Kingdom, $208 for Germany, $171 for Switzerland and $189 for Other Europe.

        In 2001, Property, plant and equipment, Intangible assets and Goodwill – net included asset write-offs of $31 for Canada, $33 for the United States, $1 for Brazil, $127 for the United Kingdom, $8 for Germany, $4 for Switzerland, $7 for Other Europe and $11 for Asia and Other Pacific.

(**)   The allocation of the purchase price for Pechiney by geographic area is tentative. The final valuation will be completed in 2004 and accordingly, the fair values could be modified for property, plant and equipment, intangible assets and goodwill.

    Note 30. Information by Operating Segments
The following presents selected information by operating segment, viewed on a stand-alone basis. The operating management structure is comprised of six operating segments plus Pechiney. The six operating segments are Bauxite and Alumina; Primary Metal; Rolled Products Americas and Asia; Rolled Products Europe; Engineered Products; and Packaging. The Company's measure of the profitability of its operating segments is referred to as business group profit (BGP). BGP comprises earnings before interest, income taxes, minority interests, depreciation and amortization and excludes certain items, such as corporate costs, restructuring, impairment and other special charges, and pension actuarial gains, losses and other adjustments, that are not under the control of the business groups or are not considered in the measurement of their profitability. These items are generally managed by the Company's corporate head office, which focuses on strategy development and oversees governance, policy, legal, compliance, human resources and finance matters. Transactions between operating segments are conducted on an arm’s-length basis and reflect market prices. Thus, earnings from the Primary Metal group represent mainly profit on metal produced by the Company, whether sold to third parties or used in the Company’s Rolled Products, Engineered Products or Packaging groups. Earnings from the Rolled Products, Engineered Products and Packaging groups represent only the fabricating profit on their respective products. The accounting principles used to prepare the information by operating segment are the same as those used to prepare the consolidated financial statements of the Company. The operating segments are described below.

    Bauxite and Alumina
Headquartered in Montreal, Canada, this group comprises Alcan’s worldwide activities related to bauxite mining, alumina refining and the production of specialty alumina's, owning and/or operating seven bauxite mines and deposits in five countries, five smelter-grade alumina plants in three countries and three specialty alumina plants in two countries.

    Primary Metal
Also headquartered in Montreal, this group comprises smelting operations, power generation and production of primary value-added ingot in the form of sheet ingot, extrusion billet, rod and foundry ingot, as well as engineering services and trading operations for alumina and aluminum, operating or having interests in 16 smelters in seven countries. Alcan has committed to locate in France the operational headquarters of its European primary aluminum business.

    Rolled Products Americas and Asia
Headquartered in Cleveland, U.S.A., this group encompasses aluminum sheet and light gauge products, operating 15 plants in five countries.

    Rolled Products Europe
Headquartered in Zurich, Switzerland, this group comprises aluminum sheet, including automotive, can and lithographic sheet, plate and foil stock, operating 11 plants in four countries.

    Engineered Products
Headquartered in Neuhausen, Switzerland, this group produces fabricated aluminum products, including wire and cable, components for the mass transportation, automotive, building, display, electromechanical and other industrial markets, as well as sales and service centres throughout Europe, operating 66 plants in 20 countries. Alcan has committed to establish in France the global operational headquarters of its engineered products group.

    Packaging
Headquartered in Zurich, this group consists of the Company's worldwide food flexible, foil, tobacco, pharmaceutical and personal care packaging businesses, operating 90 plants in 18 countries. Six of these plants have been excluded from the operating segment information as they have been reclassified to discontinued operations and assets held for sale. Alcan has committed to locate in Paris, France, the global operational headquarters of its packaging business.

    Pechiney
For December 31, 2003 reporting purposes, Pechiney is considered a separate segment as the new management organizational structure and the corresponding financial information are not yet in place. The balance sheet of Pechiney is included in the consolidated financial statements as at December 31, 2003, and the results of operations will be included in the consolidated financial statements from January 1, 2004. Pechiney is headquartered in Paris, France, comprising two bauxite mines in two countries, six alumina plants (three alumina refineries and three specialty alumina plants in four countries), eight smelters in six countries, 25 fabrication plants and one research centre in six countries, and 91 packaging plants in 18 countries. Included in this segment is Pechiney’s International Trade division, consisting of its sales network, trading activities and distribution network, through 50 entities operating in 60 countries.

    Intersegment and other
This classification includes the deferral or realization of profits on intersegment sales of aluminum and alumina, corporate office costs as well as other non-operating items.

Sales and operating revenues	Intersegment			Third Parties
	2003	2002	2001	2003	2002	2001
Bauxite and Alumina	873	757	771	536	435	477
Primary Metal	2,306	2,205	2,117	2,613	2,447	2,546
Rolled Products Americas and Asia	64	185	173	3,459	3,327	3,316
Rolled Products Europe	507	333	338	1,999	1,814	1,735
Engineered Products	22	12	23	1,778	1,614	1,623
Packaging	18	21	60	3,220	2,599	2,658
Other	(3,790)	(3,513)	(3,482)	35	60	30
	-	-	-	13,640	12,296	12,385
Business Group Profit (BGP)			2003	2002	2001
Bauxite and Alumina			257	249	301
Primary Metal			795	858	818
Rolled Products Americas and Asia			343	367	296
Rolled Products Europe			184	132	83
Engineered Products			99	98	103
Packaging			394	327	328
BGP sub-total			2,072	2,031	1,929
Depreciation and amortization			(923)	(835)	(798)
Restructuring, impairment and other special charges			38	(60)	(654)
Goodwill impairment			(28)	-	-
Intersegment and other			(207)	(151)	(43)
Corporate office			(103)	(96)	(75)
Interest			(218)	(202)	(252)
Income taxes			(325)	(295)	(44)
Minority interests			(16)	(3)	13
Income from continuing operations
before amortization of goodwill			290	389	76
Income from continuing operations
after amortization of goodwill			290	389	4

Restructuring, impairment and other special charges for 2003 included $(5) for Bauxite and Alumina, $(11) for Primary Metal, $(6) for Rolled Products Americas and Asia, $(22) for Rolled Products Europe, $1 for Engineered Products, $3 for Packaging and $2 for Intersegment and Other.

Included in 2003 Intersegment and Other are asset impairments of $46, legal and environmental provisions of $36, restructuring charges of $32, and other of $17, partially offset by a net currency-related gain on the financing of the Pechiney acquisition of $59, and net gains of $20 on disposal of businesses.

    Included in 2002 BGP for Bauxite and Alumina is a gain of $5 related to the sale of fixed assets.

Restructuring, impairment and other special charges for 2002 included $14 for Bauxite and Alumina, $(6) for Primary Metal, $15 for Rolled Products Americas and Asia, $13 for Rolled Products Europe, $1 for Engineered Products, $8 for Packaging and $15 for Intersegment and Other.

Included in 2002 Intersegment and Other are net charges of $84 relating principally to a provision of $100 for the ruling on a contract dispute with Powerex (a subsidiary of BC Hydro), an increase of $9 to legal provisions, a loss of $6 on redemption of debt, and partially offset by a gain of $36 on the sale of a portfolio investment.

Included in 2001 BGP for Primary Metal and Packaging were $1 and $(5) related to a reversal of prior year restructuring costs, respectively.

Restructuring, impairment and other special charges for 2001 included $149 for Bauxite and Alumina, $201 for Primary Metal, $16 for Rolled Products Americas and Asia, $148 for Rolled Products Europe, $7 for Engineered Products, $92 for Packaging and $41 for Intersegment and Other.

Included in 2001 Intersegment and Other is a loss on the sale of Jamaican Bauxite and Alumina operations of $123.

Total assets at December 31	2003	2002	2001
Bauxite and Alumina	2,138	2,073	2,164
Primary Metal	6,432	6,316	5,889
Rolled Products Americas and Asia	2,424	2,496	2,522
Rolled Products Europe	1,783	1,620	1,638
Engineered Products	1,552	1,355	1,467
Packaging	4,126	3,277	3,279
Pechiney	12,637	-	-
Other	499	159	308
Assets held for sale:
Engineered Products	11	18	20
Packaging	106	284	254
Pechiney	249	-	-
Total assets held for sale	366	302	274
	31,957	17,598	17,541

	Depreciation and Amortization			Cash Paid for Capital Expenditures and Business Acquisitions
	2003	2002	2001	2003	2002	2001
Bauxite and Alumina	89	83	93	95	104	479
Primary Metal	310	295	260	390	556	462
Rolled Products Americas and Asia	150	146	146	81	73	149
Rolled Products Europe	90	77	82	75	63	73
Engineered Products	82	69	60	190	61	60
Packaging	192	154	145	531	188	247
Pechiney	-	-	-	3,335	-	-
Other	10	11	12	8	9	24
	923	835	798	4,705	1,054	1,494

Note 31. Prior Year Amounts
Certain prior year amounts have been reclassified to conform with the 2003 presentation.

Quarterly Financial Data (in millions of US$, except where indicated)
(unaudited)	First	Second	Third	Fourth	Year
2003
Revenues	3,203	3,459	3,472	3,506	13,640
Cost of sales and operating expenses	2,525	2,741	2,733	2,803	10,802
Depreciation and amortization	223	231	237	232	923
Income taxes	141	151	77	(44)	325
Other items	298	311	305	386	1,300
Income from continuing operations (1)	16	25	120	129	290
Income (Loss) from discontinued operations	(3)	(114)	(20)	14	(123)
Net income (Loss)	13	(89)	100	143	167
Dividends on preference shares	2	1	2	2	7
Net income (Loss) attributable to common shareholders	11	(90)	98	141	160
Net income (Loss) per common share – basic (in US $)
Income from continuing operations	0.05	0.07	0.37	0.40	0.88
Income (Loss) from discontinued operations	(0.01)	(0.35)	(0.06)	0.04	(0.38)
Net income (Loss) per common share – basic (in US$)(2)	0.04	(0.28)	0.31	0.44	0.50
Net income (Loss) per common share – diluted (in US$)
Income from continuing operations	0.04	0.07	0.37	0.40	0.88
Income (Loss) from discontinued operations	(0.01)	(0.35)	(0.06)	0.04	(0.38)
Net income (Loss) per common share – diluted (in US$)(2)	0.03	(0.28)	0.31	0.44	0.50
Net income (Loss) under U.S. GAAP(3)	(25)	21	91	(10)	77

(unaudited)	First	Second	Third	Fourth	Year
2002
Revenues	2,881	3,137	3,164	3,114	12,296
Cost of sales and operating expenses	2,280	2,464	2,492	2,480	9,716
Depreciation and amortization	199	212	207	217	835
Income taxes	79	122	64	30	295
Other items	236	266	198	361	1,061
Income from continuing operations (1)	87	73	203	26	389
Income (Loss) from discontinued operations	(1)	(2)	(12)	-	(15)
Net income	86	71	191	26	374
Dividends on preference shares	1	1	1	2	5
Net income attributable to common shareholders	85	70	190	24	369
Net income (Loss) per common share – basic (in US$)
Income from continuing operations	0.27	0.22	0.63	0.08	1.19
Loss from discontinued operations	(0.01)	-	(0.04)	-	(0.04)
Net income per common share – basic (in US$)(2)	0.26	0.22	0.59	0.08	1.15
Net income (Loss) per common share – diluted (in US$)
Income from continuing operations	0.27	0.22	0.63	0.08	1.18
Loss from discontinued operations	(0.01)	-	(0.04)	-	(0.04)
Net income per common share – diluted (in US$) (2)	0.26	0.22	0.59	0.08	1.14
Net income (Loss) under U.S. GAAP (3)	(595)	58	160	41	(336)
(unaudited)	First	Second	Third	Fourth	Year
2001
Revenues	3,200	3,100	3,100	2,985	12,385
Cost of sales and operating expenses	2,516	2,421	2,432	2,417	9,786
Depreciation and amortization	190	199	199	210	798
Income taxes	58	100	68	(182)	44
Other items	285	289	233	874	1,681
Income (Loss) from continuing operations
before amortization of goodwill	151	91	168	(334)	76
Amortization of goodwill	17	19	18	18	72
Income (Loss) from continuing operations (1)	134	72	150	(352)	4
Income (Loss) from discontinued operations	1	2	(1)	(4)	(2)
Net income (Loss)	135	74	149	(356)	2
Dividends on preference shares	2	2	2	2	8
Net income (Loss) attributable to common shareholders	133	72	147	(358)	(6)
Net income (Loss) per common share – basic (in US$)
Income (Loss) from continuing operations
before amortization of goodwill	0.47	0.28	0.52	(1.04)	0.21
Amortization of goodwill	0.05	0.05	0.06	0.06	0.22
Income (Loss) from continuing operations	0.42	0.23	0.46	(1.10)	(0.01)
Loss from discontinued operations	-	-	-	(0.01)	(0.01)
Net income (Loss) per common share– basic (in US$)(2)	0.42	0.23	0.46	(1.11)	(0.02)
Net income (Loss) per common share – diluted (in US$)
Income (Loss) from continuing operations
before amortization of goodwill	0.46	0.27	0.52	(1.04)	0.21
Amortization of goodwill	0.05	0.05	0.06	0.06	0.22
Income (Loss) from continuing operations	0.41	0.22	0.46	(1.10)	(0.01)
Loss from discontinued operations	-	-	-	(0.01)	(0.01)
Net income (Loss) per common share– diluted (in US$) (2)	0.41	0.22	0.46	(1.11)	(0.02)
Net income (Loss) under U.S. GAAP (3)	74	94	104	(326)	(54)

(1) The first quarter of 2003 included a net after-tax charge of $12 relating mainly to prior years’ tax adjustments.

The second quarter of 2003 included net after-tax gains of $26 relating mainly to gains of $41 on the sale of non-core assets in Italy and the remaining portfolio investment in Nippon Light Metal Company, Ltd., partially offset by  charges of $8 for closure of the Charlotte packaging plant and the Bay St. Louis plant in the United States.

The third quarter of 2003 included a non-cash, after-tax charge of $24 relating mainly to the realization of deferred translation losses of $11 on the sale of a subsidiary in Thailand and charges of  $7 for environmental provisions related to certain operations in the United States and Switzerland.

The fourth quarter of 2003 included a net after-tax gain of $50 relating mainly to one time favourable tax benefits of $85 arising principally from changes in Australian tax legislation, currency-related net gains of $57 on the financing of the Pechiney acquisition, gains on sales of assets in the U.K. of $6, a gain on the sale of an extrusions business in Malaysia of $4, and a favourable adjustment of $7 to previously recorded environmental provisions. These items were partially offset by the impairment of assets in Germany of $35, goodwill impairment in the extrusions operations of $28, an environmental provision in the United States of $16, and the restructuring of a packaging operation in Switzerland of $8.

The first quarter of 2002 included net after-tax charges of $7 relating mainly to the restructuring program announced in 2001. The charges included a fixed asset impairment charge of $9 relating to the recycling operations at the Borgofranco plant in Italy and a loss of $5 on the sale of extrusions operations in Thailand. The second quarter of 2002 included net after-tax charges of $8 relating mainly to the restructuring program announced in 2001. The charges included severance and pension costs of $7 relating to the closure of the Bracebridge cable plant in Ontario, Canada. The third quarter of 2002 included net after-tax charges of $6 relating mainly to increases of $9 to legal provisions and net recoveries of $2 relating to the 2001 restructuring program principally arising from severance costs of $4 for the extrusions operations in Malaysia, light gauge operations in Fairmont, West Virginia, and certain cable operations in North America, and income of $8, primarily for the write-back of ex cess contract loss provisions. The fourth quarter of 2002 included net after-tax charges of $86 relating mainly to a provision of $68 for the ruling on a contract dispute with Powerex (a subsidiary of BC Hydro) and charges of $20 for the closures of the specialty chemicals plant at Burntisland, U.K. and the Banbury, U.K. R&D facilities. These charges were partially offset by a gain of $26 on the sale of a portfolio investment.

The first quarter of 2001 included after-tax charges for the impairment in value of fixed assets of $70 for Jamaica. The second quarter of 2001 included an after-tax charge of $17 principally comprised of $20 for post-closing adjustments relating to the divestment of Jamaica, partly offset by a write-back of restructuring costs of $4 in the U.K. The results for the fourth quarter of 2001 included a net after-tax charge of $444. This included a $78 charge related to the restructuring program announced on October 17, 2001, and a $22 charge related to the synergy program announced in the fourth quarter of 2000 in relation to the merger with algroup. Also included are impairment provisions of $186 in relation to certain assets and capitalized project costs, a $167 charge related to environmental provisions, and a favourable prior year’s tax adjustment of $12.

(2) Net income per common share calculations are based on the average number of common shares outstanding in each period. See note 5 – Income from Continuing Operations per Common Share – Basic and Diluted.

 (3) See note 8 – Differences between Canadian and United States Generally Accepted Accounting Principles (GAAP) for explanation of differences between Canadian and U.S. GAAP.

Eleven-Year Summary

	2003*		2002 *	2001*	2000	1999	1998	1997	1996	1995	1994	1993
CONSOLIDATED INCOME STATEMENT ITEMS (in millions of US$)
Sales and operating revenues	13,640	12,296		12,385	9,097	7,324	7,789	7,777	7,614	9,287	8,216	7,232
Cost of sales and operating expenses	10,802	9,716		9,786	7,068	5,695	6,076	6,005	5,919	7,247	6,740	6,002
Depreciation and amortization	923	835		798	540	477	462	436	431	447	431	443
Selling, administrative and general expenses	746	571		544	406	375	448	444	422	484	528	551
Research and development expenses	140	115		135	81	67	70	72	71	76	72	99
Interest	218	202		252	78	76	92	101	125	204	219	212
Goodwill Impairment Other expenses (income) - net *	28 155	- 173		- 766	- 50	- (40)	- (12)	- (34)	- 13	- (39)	- (14)	- 31
Income taxes	325	295		44	255	211	210	248	212	326	112	(13)
Equity income (loss)	3	3		3	4	(1)	(48)	(33)	(10)	(3)	(29)	(12)
Minority interests	(16)	(3)		13	1	(14)	4	(4)	(1)	4	(3)	1
Income (Loss) from continuing operations before amortization of goodwill and extraordinary item	290	389		76	624	448	399	468	410	543	96	(104)
Amortization of goodwill	-	-		72	16	-	-	-	-	-	-	-
Income (loss) from  continuing operations before extraordinary item	290	389		4	608	448	399	468	410	543	96	(104)
Extraordinary gain (loss)	-	-		-	-	-	-	17	-	(280)	-	-
Income (Loss) from continuing operations	290	389		4	608	448	399	485	410	263	96	(104)
Income (Loss) from discontinued operations	(123)	(15)		(2)	2	-	-	-	-	-	-	-
Net Income (Loss)	167	374		2	610	448	399	485	410	263	96	(104)
Net income (Loss) attributable to common shareholders	160	369		(6)	600	439	389	475	394	239	75	(122)
CONSOLIDATED BALANCE SHEET ITEMS (in millions of US$)
Operating working capital ***	2,960	1,466		1,347	1,945	1,307	1,682	1,483	1,461	1,731	1,675	1,314
Capital assets and goodwill - net***	20,920	12,712		12,725	12,824	6,434	5,897	5,458	5,470	5,672	5,534	6,005
Total assets	31,957	17,598		17,541	18,389	9,839	9,901	9,374	9,228	9,736	10,003	9,812
Total debt***	9,762	3,862		4,089	4,606	1,489	1,789	1,515	1,516	1,985	2,485	2,652
Deferred income taxes - net***	1,274	1,120		986	1,203	781	747	969	996	979	914	888
Minority interests	524	150		132	244	-	-	-	-	-	-	-
Preference shares	160	160		160	160	160	160	203	203	353	353	353
Common shareholders - equity	10,555	8,465		8,610	8,849	5,371	5,359	4,871	4,661	4,482	4,308	4,096
PER COMMON SHARE (in US$)
Net income (Loss) before amortization of goodwill and extraordinary item	0.50	1.15		0.21	2.47	2.01	1.71	2.02	1.74	2.30	0.34	(0.54)
Net income (Loss) before extraordinary item	0.50	1.15		(0.02)	2.42	2.01	1.71	2.02	1.74	2.30	0.34	(0.54)
Net income (Loss)	0.50	1.15		(0.02)	2.42	2.01	1.71	2.09	1.74	1.06	0.34	(0.54)
Dividends paid	0.60	0.60		0.60	0.60	0.60	0.60	0.60	0.60	0.45	0.30	0.30
Common shareholders' equity	28.90	26.33		26.83	27.84	24.60	23.71	21.43	20.57	19.84	19.17	18.28
Market price - NYSE close	46.95	29.52		35.93	34.19	41.38	27.06	27.63	33.63	31.13	25.38	20.75

	2003*	2002 *	2001*	2000	1999	1998	1997	1996	1995	1994	1993
OPERATING DATA (in thousands of tonnes except for LME price)
Consolidated aluminum shipments
Ingot products (includes primary and secondary ingot, trading and scrap)	1,552	1,429	1,419	974	859	829	858	810	801	897	887
Rolled products	2,022	2,058	1,937	1,855	1,609	1,603	-	-	-	-	-
Aluminum used in engineered products and packaging	531	545	536	352	302	220	-	-	-	-	-
Total fabricated products	2,553	2,603	2,473	2,207	1,911	1,823	1,694	1,539	1,733	1,763	1,560
Conversion of customer-owned metal	402	391	344	328	315	289	276	258	225	189	91
Total aluminum volume	4,507	4,423	4,236	3,509	3,085	2,941	2,828	2,607	2,759	2,849	2,538
Consolidated primary aluminum production	2,354	2,238	2,042	1,562	1,518	1,481	1,429	1,407	1,278	1,435	1,631
Consolidated aluminum purchases	1,744	1,791	1,803	1,670	1,297	1,227	1,254	1,003	1,365	1,350	865
Consolidated aluminum inventories (end of year)	509	535	536	568	477	469	451	408	449	435	403
PRIMARY ALUMINUM CAPACITY
Consolidated subsidiaries and joint ventures	4,076	2,365	2,252	1,899	1,583	1,706	1,558	1,561	1,561	1,561	1,711
Total consolidated subsidiaries and related companies	4,076	2,365	2,252	1,899	1,583	1,706	1,695	1,698	1,712	1,712	1,862
Average three-month LME price (US$ per tonne)	1,428	1,365	1,454	1,567	1,388	1,379	1,620	1,536	1,830	1,500	1,161
OTHER STATISTICS
Cash from operating activities from continuing operations (in millions of US$)	1,833	1,603	1,375	1,059	1,182	739	719	981	1,044	65	444
Cash from (used for) financing activities from continuing         operations (in millions of US$)	3,480	(686)	(247)	781	(629)	(95)	(46)	(700)	(744)	(191)	(172)
Cash from (used for) investment activities from continuing         operations  (in millions of US$)	(4,642)	(936)	(1,255)	(2,074)	(838)	(656)	(587)	178	(273)	71	(339)
Cash used for capital expenditures  (in millions of US$)	888	709	1,090	1,482	1,169	805	641	482	390	264	251
Cash used for business acquisitions (in millions of US$)	3,817	345	404	244	129	72	-	-	51	92	119
Debt as a percentage of invested capital (%)	46	31	32	33	21	24	23	23	29	35	37
Average number of employees (in thousands)	49	49	52	37	38	36	33	34	39	42	46
Common shareholders – registered (in thousands at end of year)	18	18	18	19	20	20	21	22	23	26	28
Common shares outstanding (in millions at end of year)	365	321	321	318	218	226	227	227	226	225	224
Registered in Canada (%) **	82	80	79	76	61	60	61	61	61	55	59
Registered in the United States (%)	18	20	21	24	39	39	39	39	38	44	40
Registered in other countries (%)	-	-	-	-	-	1	-	-	1	1	1
Return on average common shareholders' equity (%)	2	4	-	10	9	7	10	9	5	2	(3)

*

2003, 2002 and 2001 include Restructuring, impairment and other special charges.

**

Shares held by former algroup and Pechiney shareholders are registered in Canada.

***

From continuing operations

See note 8 – Differences between Canadian and United States Generally Accepted Accounting Principles (GAAP) for U.S. GAAP information.

EX-14

WORLDWIDE CODE

OF EMPLOYEE AND

BUSINESS CONDUCT

Compliance with the Code is essential to

preserving and enhancing Alcan's reputation

as a responsible corporate citizen and ultimately

to maximizing shareholder value.

WORLDWIDE CODE OF	1
EMPLOYEE AND BUSINESS CONDUCT

LETTER FROM THE PRESIDENT

AND CHIEF EXECUTIVE OFFICER

Dear Fellow Employees

At Alcan, we have always understood that our success is possible because of our values, which include integrity, accountability, trust and transparency, and teamwork. Alcan set an historical benchmark in ethical practice by first releasing a policy framework back in 1978 titled, Alcan, Its Purposes, Objectives and Policies, which was followed up by our first Code of Conduct in 1996. Given our substantial organizational change in recent years, the time is right to re-issue an updated Worldwide Code of Employee and Business Conduct, which supports and reinforces these values.

The Code requires that we exercise the highest degree of ethical conduct in all our dealings with or on behalf of Alcan. Despite the fact that this principle is entrenched in our culture, it is understood that in our working lives we often experience situations where the "right thing to do" is not immediately apparent. The interests of Alcan and those of fellow employees, customers, suppliers, families, communities and ourselves may seem to conflict at times. When we're faced with such complex situations, it can be difficult to decide just where the ethical path lies.

I encourage you to take time to read this important document. The principles that it contains are intended as a guide to making the "right choice". However, we know that no set of policy guidelines can hope to cover all the situations that we may encounter. When in doubt about any matter that may have ethical implications, you should seek guidance. This Code identifies the channels and procedures that we have established to help answer your questions or address your concerns.

Compliance with the Code is essential to preserving and enhancing Alcan's reputation as a responsible corporate citizen and ultimately to maximizing shareholder value. Violation of the Code is a serious matter that could subject you or Alcan to legal liability.

I truly believe in our values, forged over our long history, practiced by thousands of employees past and present and embodied in this Code. They are a critical part of the pride I have in being part of Alcan. To me, it's all a part of "doing the right thing!"

Travis Engen

May 10, 2002

WORLDWIDE CODE OF	2
EMPLOYEE AND BUSINESS CONDUCT

TABLE OF CONTENTS

LETTER FROM THE PRESIDENT AND CHIEF EXECUTIVE OFFICER	1
INTRODUCTION	3
WORLDWIDE CODE OF EMPLOYEE AND BUSINESS CONDUCT	4
Application of the Code to Non-Employees	4
Books and Records	4
Competition Issues	5
Confidential Information and Intellectual Property	6
Conflicts of Interest	7
Drugs, Alcohol Impairment and Firearms	8
E-mail and Internet Usage	8
Employee Use of Company Property	9
Environment, Health and Safety	9
Government Relations	10
Human Rights and the Workplace	11
Improper Payments to Officials	11
International Business	12
Marketing and Sales	12
Political Activity	13
Securities Law and Insider Trading	14
Sexual Harassment, Workplace Harassment and Violence	14
Shareholder, Media and Community Relations	15
Workplace Security	16
Compliance with the Code	16
QUESTIONS AND ANSWERS	17
COMPANY CONTACTS	29
Throughout this Code, "Company" or "Alcan" refers to Alcan Inc. and, where the context requires, one or more of its subsidiaries and related companies.

WORLDWIDE CODE OF	3
EMPLOYEE AND BUSINESS CONDUCT

INTRODUCTION

Alcan is a multinational business with operations around the world in the aluminum and packaging fields. Our Company reflects the differing corporate and social characteristics that result from the many races, cultures and languages of the many countries in which we operate. Ethical practices that are clearly understood and consistently followed are the means to strong and sustained growth. They enable us to build a competitive company while doing what is right. It is our firm belief that our Worldwide Code of Employee and Business Conduct is a fundamental component of our success. An effective code must be more than a paper or web document. It must be known to all employees and live through their actions. To ensure that the Code is more than just a good concept, it is made available to all Alcan employees, consultants and suppliers, all of whom are bound by its principles in their dealings with or on behalf of Alcan. The Code is supplemented by Alcan's Policies Manual that is available on Alcan's intranet site (web.alcan.com). If faced with uncertainty about what to do, we must stop and ask for help. We should refer to the relevant section of this Code, speak with our supervisors or, if preferred, communicate with any of the other points of contact indicated in the Code. When confronted with a business decision that has ethical considerations, there are several questions that should be asked:
	1. Am I adhering to the spirit and the letter of the laws or policies that may be involved? 2.Would I want my actions reported on the front page of the newspaper? 3.What would my family, friends or neighbours think of my actions? 4.Will there be any direct or indirect negative consequences for Alcan? 5. Are my actions consistent with the overall values set forth in the Code or Policies Manual?
We recognize that there may still be grey areas where reasonable people may disagree. We welcome and encourage open discussion in these situations.

WORLDWIDE CODE OF	4
EMPLOYEE AND BUSINESS CONDUCT

WORLDWIDE CODE

OF EMPLOYEE AND BUSINESS CONDUCT

APPLICATION OF THE CODE TO NON-EMPLOYEES

The Code is not just for employees. All consultants and suppliers are equally expected to adhere to this Code in all their dealings with or on behalf of the Company. We must ensure that they are aware of the contents of this Code, either by providing them with a copy or by referring them to the dedicated page on Alcan's Web site (www.alcan.com).

Although Alcan may not be able to require adherence to the Code in every joint venture and related company in which it participates, the principles in the Code are universal and so we should encourage its use in such organizations.

BOOKS AND RECORDS

All financial transactions are to be properly recorded in the books of account and accounting procedures are to be supported by the necessary internal controls. In turn, all Company books and records must be available for audit. In relation to Alcan's books of account and Company records, we must:
	1. not intentionally cause Alcan documents to be incorrect in any way; 2. not create or participate in the creation of any records that are intended to conceal anything that is improper; 3. properly and promptly record all disbursements of funds; 4. co-operate with internal and external auditors; 5. report any knowledge of any untruthful or inaccurate statements or records or transactions that do not seem to serve a legitimate commercial purpose; and 6. not make unusual financial arrangements with a customer or a supplier (such as, over-invoicing or under-invoicing) for payments on their behalf to a party not related to the transaction.
Suspected breaches of financial policy, which directly or indirectly affect Alcan's business, must be reported and investigated. As far as practicable, contracts to which Alcan is a party should be in writing, leaving as little uncertainty as possible. "Side letters" or "comfort letters" that are not referred to in the main document should only be accepted or given with the advice of a Company lawyer.

WORLDWIDE CODE OF	5
EMPLOYEE AND BUSINESS CONDUCT

COMPETITION ISSUES

Alcan must act independently and in its own interest in all commercial situations affecting competitive conditions of trade and avoid practices that restrict competition.
Therefore:
	1. never enter into any agreement or tacit understanding with our competitors, and avoid discussing competitive issues on such matters as:
		a) the price or other terms on which Alcan or any of our competitors sell products; b) the costs incurred or profits made by Alcan or any of our competitors in manufacturing products; c) the rate of production or percentage of capacity utilization of Alcan or any of our competitors; d) the customers to whom, or territories in which, Alcan or our competitors sell products; and e) the type or amount of any product that Alcan or our competitors will manufacture or offer for sale;
	2. when participating in joint ventures and industry associations involving competitors, limit communications to those actually required for the legitimate business of the joint endeavour; 3. deal fairly with all customers and suppliers, including those with whom we also compete; 4. respect our customers' freedom to conduct their business as they see fit, including the setting of prices at which they wish to sell their products; 5. avoid any use of coercion in the sale of products to customers, such as forcing a customer to purchase unwanted products; 6. refrain from using any market power or market information in a way which may restrict competition; and 7. avoid any unfair or deceptive act or practice.
It is the responsibility of each manager to comply with the letter and spirit of all competition laws as they apply to Alcan. In order to interpret specific situations, refer to the competition guidelines available on the intranet. Whenever in doubt, competition-sensitive issues must be brought to the attention of a Company lawyer.

WORLDWIDE CODE OF	6
EMPLOYEE AND BUSINESS CONDUCT

CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY

	Confidential information includes: technical information about products or processes; vendor lists or purchase prices; cost, pricing, marketing or service strategies; non-public financial reports; and information related to divestitures, mergers and acquisitions. In addition, the way we put publicly-known information together, to achieve a particular result, is often a valuable trade secret. Intellectual Property (IP) includes: patents, copyrights, trademarks and trade secrets. IP owners have rights granted to them under the law. Confidential information, including that which relates to IP, is a valuable asset that could benefit a competitor if known to it or otherwise harm the Company if made public.We must be careful not to disclose such information to unauthorized persons, either within or outside Alcan, and must exercise care to protect the confidentiality of such information received from another party. Confidential information can be protected under the law as a trade secret if it has value to others and the owner takes the necessary steps to protect it. Therefore, we must:
		1. be careful about where we discuss Alcan matters involving confidential information; 2. not disclose or use any Alcan confidential information for personal profit or advantage; 3. sign a patent and secrecy agreement, as necessary; 4. execute confidentiality agreements with persons outside the Company (including Alcan consultants) before discussing Alcan's confidential information; 5. while being alert to information in the marketplace, obtain competitive information only in accordance with sound business and ethical principles; 6. when approached with any offer of confidential information, ensure that both parties understand and accept the condition under which the information is received; and 7. discuss with a supervisor or a Company lawyer any unsolicited offer of confidential information in order to determine whether the information should be accepted or declined. This is particularly important if you have reason to believe it may have been obtained improperly.
We must always protect Alcan's confidential information and IP rights and we must also respect the same rights of others.

WORLDWIDE CODE OF	7
EMPLOYEE AND BUSINESS CONDUCT

We must always protect Alcan's confidential information and IP rights and we must also respect the same rights of others. Report any unauthorized use of Alcan's IP.

The Alcan trademark and tradename are among Alcan's most valuable assets. The presentation, use and protection of the Alcan trademark is governed by the corporate identity guidelines available on the intranet.

Alcan's policy is to licence one software package per employee-user, except when the licence provides otherwise or permits a network version of the software to be used. We must not copy software, protected by copyright law and/or licence agreements, unless the owner of the copyright or licence holder specifically grants, directly or indirectly, permission to do so.

CONFLICTS OF INTEREST

It is essential that we remain free of, or disclose, commitments and relationships that involve, or could involve, a conflict of interest with Alcan. A conflict of interest can exist if you have a direct or indirect personal interest in a decision being made where that decision should be made objectively, free from bias and in the best interests of Alcan. It is important that even the appearance of a conflict of interest be avoided. Any employee who believes that he or she may be affected by a conflict of interest must immediately disclose all relevant details to his or her supervisor. There are some conflict-of-interest situations that we should disclose and for which we should obtain written approval before proceeding. These include:

1. any consulting or other significant relationship with, or interest in, any supplier, customer or competitor; 2. any personal interest that is competitive with the interests of Alcan; 3. any business relationship on behalf of Alcan with any person who is a relative or a personal friend, or with any company controlled by such a person; 4. any position where we have influence or control over the job evaluation or compensation of any person who is a relative or personal friend; 5. any personal use or sharing of Alcan confidential information for profit, such as advising others to buy or sell Alcan property or products on the basis of such information;

WORLDWIDE CODE OF	8
EMPLOYEE AND BUSINESS CONDUCT

	6. any personal sale to or purchase from Alcan; or 7. any acceptance of benefits, other than modest gifts and entertainment, from a person or organization dealing, or expecting to deal, with Alcan in a business transaction.
Anything that could present a conflict of interest to an employee could also present a conflict of interest if it is passed on to a family member or a third party who is receiving benefits for the employee. Common sense and good judgement must be exercised to avoid any perception of impropriety or conflict of interest.

DRUGS, ALCOHOL IMPAIRMENT AND FIREARMS

It is forbidden to possess or consume illegal drugs while working on Alcan premises. To remain competitive in today's business environment, it is essential that we make the best decisions; therefore, we expect that all our judgements be clear and unimpaired by drugs or alcohol. Firearms are permitted only in those areas and circumstances expressly authorized by management. These restrictions are established for the well-being and productivity of our employees and our Company.

E-MAIL AND INTERNET USAGE

E-mail and Internet systems are provided primarily for business use. E-mail is not entirely secure and may be susceptible to interception and creates a permanent record. Any e-mail you send may be printed by the recipient and forwarded by the recipient to others, and is probably retained on company computers for a substantial period of time. Therefore, Alcan's employees should exercise the same care, caution and etiquette in sending an e-mail message as they would in normal written business communications.

In relation to your Company Internet connection, do not download any data that is unprofessional or inappropriate for business use. In addition, all employee e-mail and Internet usage may be the subject of monitoring without notice.

For more information, refer to the related policies available on the intranet.

WORLDWIDE CODE OF	9
EMPLOYEE AND BUSINESS CONDUCT

EMPLOYEE USE OF COMPANY PROPERTY

Company property is for Company use. We must not:
	1. obtain, use or divert Alcan property for personal use or benefit; 2. materially alter or destroy Alcan property without proper authorization; or 3. remove Company property or use Company services without prior management approval.
Some activities may have benefits to Alcan as well as to an individual employee and the distinction between the two may be difficult to establish. Accordingly, it is important that any use of Alcan property or services that is not solely for the benefit of Alcan be approved in advance by your supervisor. Any suspected fraud or theft by employees or third parties must be reported.

ENVIRONMENT, HEALTH AND SAFETY

	At Alcan, our goal is to protect and promote the environment and the health and safety of our employees and the communities where we operate. As part of the overall approach to environment, health and safety (EH&S), we must:
		1. be familiar with all EH&S policies, procedures and practices; 2. take responsibility for our environment, personal health and safety and that of co-workers and strictly adhere to EH&S regulations and practices; 3. identify hazards, assess risks and whenever possible, initiate corrective action and bring the matter to the attention of management; 4. promptly report EH&S incidents (such as spills, non-compliant emissions, occupationally-related injuries and illness, etc.) to local management to allow for investigation of causes and initiation of corrective and preventive measures; 5. promptly report EH&S incidents to appropriate legal authorities as required by local regulations;
. . . our goal is to protect and promote the EH&S of our employees and the communities where we operate.

WORLDWIDE CODE OF	10
EMPLOYEE AND BUSINESS CONDUCT

	6. use personal protective equipment correctly; and 7. participate actively in EH&S training activities.
Our individual involvement in EH&S will contribute to the benefit of all.

GOVERNMENT RELATIONS

In the conduct of our business, government relations include all contacts with governments, their agencies and representatives, in national and local jurisdictions around the world. Many employees interact with various government agencies on a routine basis in accordance with established practices and procedures.

Though customs may vary from one country to another, there is only one standard for Alcan representatives, and that is conducting ourselves according to the highest ethical standards in all our dealings with governments.

We will cooperate with every legitimate request for information from government sources. Nevertheless, we must assert Alcan's basic legal rights, such as representation by counsel, where appropriate. Consequently, if a government authority requests information or access to files, advise that the matter must first be discussed with a Company lawyer. If, however, the authority (a police officer, for instance) has a search warrant, cooperate immediately but contact a Company lawyer without delay. Never destroy Alcan documents in anticipation of a request for those documents from a government agency.

When submitting information to any authority, we must take appropriate steps to protect its confidentiality. In many countries, information in government files is available to the public upon request. While the object of such laws is to promote open and accountable government, this can also allow competitors to obtain information about us.

Alcan must not retain a government employee to perform services except under written contract with the government specifying the nature of the services to be provided. Care must be taken so that the service provided cannot be misinterpreted as a means to provide improper payments. In some countries, hiring a government employee for any work is prohibited.

Limit entertainment of government representatives so that it does not compromise - or appear to compromise - the individuals involved or Alcan in any way.

WORLDWIDE CODE OF	11
EMPLOYEE AND BUSINESS CONDUCT

HUMAN RIGHTS AND THE WORKPLACE

	Alcan is guided by principles of non-discrimination, respect for human rights and individual freedoms and conducts its global business in a manner that makes it an employer of choice. In many ways, our workplace is our second home, where all of us are entitled to be treated with respect. Respect is central to a harmonious workplace, where the rights of employees are upheld, and where their dignity is affirmed, free of intimidation, discrimination or coercion of any kind. We:
		1. strive to maintain a work environment where personal dignity of the individual is respected; 2. do not permit discrimination or harassment on the basis of race, gender, national origin, religious belief or on the basis of any personal characteristic protected by law; 3. do not approve of the use of inappropriate language in the workplace, including profanity, swearing, vulgarity or verbal abuse; 4. do not permit coercion or intimidation in the workplace; 5. are unequivocally opposed to forced or child labour.
Respect is central to a harmonious workplace, where the rights of employees are upheld, and where their dignity is affirmed . . .
	We respect employees' rights in relation to employment matters. While the Company will promote its position in a fair and legal manner, we recognize the right of employees to organize legally and bargain collectively.

IMPROPER PAYMENTS TO OFFICIALS

We must not offer improper payments when acting on behalf of the Company. Alcan funds must not be used to make payment, directly or indirectly (through agents or otherwise), in money, property, services or any other form to a government official, political party or candidate for political office to induce the recipient to:
	1. exert influence to assist the Company in obtaining or retaining business; or 2. commit any act in violation of a lawful duty.
If you are in doubt about the legitimacy of a payment that you have been requested to make, seek the advice of a Company lawyer.

WORLDWIDE CODE OF	12
EMPLOYEE AND BUSINESS CONDUCT

INTERNATIONAL BUSINESS

We operate on a global basis and are therefore subject to national and local laws and regulations that vary from one jurisdiction to another. Our policy is to comply with the laws wherever we do business. In particular, we must:

1. ensure that payments made to agents or distributors are always for services rendered and are reasonable according to the nature of those services; 2. never expand business into a foreign country, where Alcan has not previously done business, without discussing it with management and a Company lawyer; 3. be aware of dealings with countries that are involved in conflicts or that are subject to international sanctions; 4. when involved in exports, observe all regulations that govern the shipment of Alcan's products and services to the importing country, as well as applicable international trade agreements; 5. be accurate when furnishing information to any person hired to facilitate export or import transactions; and 6. consult a Company lawyer for specific guidelines to deal with crossborder management of Alcan's business (including membership on the boards of directors of companies located in foreign countries).

MARKETING AND SALES

It is our policy to demonstrate the highest standards of integrity in all aspects of Alcan's business and to do business fairly and equitably.

This policy extends to the sale or purchase of services (such as, banking, consulting, advertising, engineering and maintenance) as well as to the sale or purchase of tangible goods and products.

In buying, we must choose suppliers fairly, except insofar as specific national government policy or legal requirements dictate.

WORLDWIDE CODE OF	13
EMPLOYEE AND BUSINESS CONDUCT

	In marketing and sales, we must:
		1. where comparisons are permitted by law, fairly compare our products, services or employees to those of our competitors; 2. make all price estimates and forecasts of future delivery dates clear and concise, subject to variations of supply and demand; 3. never give or receive improper payments or gifts to or from anyone in connection with the sale or purchase of products or services even at the cost of foregoing business opportunities; and 4. be alert to product liability concerns and, where applicable, warn our customers of any inherent dangers in the products sold.
It is our policy to demonstrate the highest standards of integrity in all aspects of Alcan's business . . .

POLITICAL ACTIVITY

As a general rule, we refrain from participating in political activities in the name of Alcan or in organizing such activities on Alcan property. However, we affirm each of our rights to express our political convictions, and to vote on them, in our capacity as private citizens. Whether or not local laws restrict the use of corporate funds in support of political parties, it is our general policy not to make contributions to political parties at any level of government. Examples of activities that are in breach of this policy and may be illegal in some jurisdictions are:
	1. the inclusion of a political contribution on an expense account. This would include, for example, a luncheon held by a political party, even though Alcan business affairs are discussed; and 2. the use of our facilities to assist the staging of a political event. This would include using Alcan telephones or enlisting Alcan staff to make contacts or prepare political materials.
In exceptional cases and where local law permits, a political contribution may be made with the approval of Alcan's Chief Executive Officer. Any such contribution must be consistent with our belief that Alcan's role is complementary to the responsibility of governments. From time to time, issues of significant importance to the financial and business well-being of Alcan may arise in a political context. Alcan may participate in such political processes, according to local laws and the guidelines set forth in this Code, in order to advance its legitimate interests. Participation may include lobbying, publication of its views in the media and support of interested organizations.

WORLDWIDE CODE OF	14
EMPLOYEE AND BUSINESS CONDUCT

SECURITIES LAW AND INSIDER TRADING

We must refrain from buying or selling Alcan securities, products or raw materials while in possession of material non-public information about Alcan and refrain from passing such information on to others, which includes family and friends. "Material non-public information" is information that is significant enough that, if publicly known, is likely to affect the market price of any of Alcan's securities (e.g. shares or bonds). Here are some examples:
	1. unpublished financial results, including unreleased quarterly and annual results; 2. major acquisitions or divestitures by Alcan; 3. important contracts that are signed or ended; 4. significant changes in our products; 5. increases or decreases in regular dividends paid by Alcan; 6. significant capital projects or significant changes to capital projects; 7. significant changes in senior management or to our Board of Directors; and 8. take-over bids or other change-of-control situations.
Whenever in doubt as to whether you may trade, refer to the trading policy on the intranet and/or contact a Company lawyer.

SEXUAL HARASSMENT, WORKPLACE HARASSMENT AND VIOLENCE

	Sexual harassment may include unwanted sexual advances, sexual jokes, subtle or overt pressure for sexual favours, sexual innuendoes, and offensive propositions. These are not tolerated at Alcan. Sexual harassment is an act of a sexual nature that may result in adverse working conditions, including:
We do not tolerate workplace harassment or violence of any kind.		1. the creation of an intimidating, hostile or offensive work environment; 2. interference with an individual's work performance; and/or 3. limitation of an individual's opportunities for employment or advancement.

WORLDWIDE CODE OF	15
EMPLOYEE AND BUSINESS CONDUCT

We do not tolerate workplace harassment or violence of any kind. This includes threats, intimidation, bullying, subjecting individuals to ridicule or unwarranted exclusion.

Report any such behaviour or concerns, particularly about your personal safety or that of your colleagues. When the Company believes that harassment or violence has occurred, appropriate disciplinary action will be taken against those responsible, which may include dismissal.

SHAREHOLDER, MEDIA AND COMMUNITY RELATIONS

We value, and have benefited from, good relations with our shareholders. We always attempt to respond to their inquiries and requests as quickly as possible.

Requests from investors or shareholders for information concerning Alcan and its business should be forwarded to Alcan's Investor Relations department, whose coordinates can be found on the Alcan intranet.

Communications with external audiences, i.e., with the news media and investors, is essentially about communicating in an equitable, credible and timely manner. Alcan's credibility is key to building the value of its name and enhancing shareholder value.

Media interaction is the responsibility of authorized Alcan spokespersons, who ensure the timely and informed communication of relevant information. All spokespersons, or anyone dealing with the media, must demonstrate high standards of integrity and transparency, while refraining from unauthorized disclosure of proprietary or non-public information.

Alcan employees should make sure these spokespersons know about any relevant issue of local or national interest that relate to Alcan's business of which they may not be aware.

Alcan is committed to demonstrating that good corporate citizenship is compatible with achieving superior returns for its shareholders. Our objective is to balance the interests of Alcan and its shareholders with the legitimate interests of employees, customers and suppliers, as well as governments and the public at large. We take into account the differing social, economic and environmental aspirations of the communities in which we are active.

Alcan encourages all employees to play a voluntary role in the community. In all instances of voluntary, community and political activity, except in specific cases approved by senior management, Alcan employees participate without remuneration, in their own names and on their own time.

WORLDWIDE CODE OF	16
EMPLOYEE AND BUSINESS CONDUCT

WORKPLACE SECURITY

We are committed to ensuring the safety of our employees as well as the security of our assets. Alcan representatives and security staff are permitted to direct the search of persons, vehicles or property that are on Alcan premises, in accordance with local laws. All employees as well as suppliers, consultants, etc. are expected to cooperate by allowing a search of their persons and property on Company premises.

COMPLIANCE WITH THE CODE

All Alcan employees, consultants and suppliers are expected to comply with Alcan's Worldwide Code of Employee and Business Conduct and actively support its values and principles. Any employee who fails to comply with the Code, or who withholds information during the course of an investigation regarding a possible violation of it is subject to disciplinary action up to and including dismissal. Any consultant or supplier who fails to comply with the Code may see their contract terminated or not renewed. Depending upon the nature of the noncompliance, Alcan may have the legal obligation to report the non-compliance to the appropriate authorities. Breaches of the Code must be reported immediately to one of the following:
	1. your supervisor; 2. your department or function head; 3. a Company lawyer; 4. your Human Resources department; or 5. such other means that the Company may from time to time make available (i.e., designated telephone lines).
All information will, to the extent possible, be received in confidence. No retaliatory action will be taken against anyone for making in good faith a report of a violation. However, anyone who takes part in a prohibited activity may be disciplined even if they report it. An employee's decision to report will, in all cases, be given due consideration in the event any disciplinary action is necessary. Compliance with this Code will be measured by audits, which will include review of reporting procedures and training programs.

WORLDWIDE CODE OF	17
EMPLOYEE AND BUSINESS CONDUCT

QUESTIONS AND ANSWERS

Q	APPLICATION OF THE CODE TO NON-EMPLOYEES
	I'm in the process of negotiating an agreement with a contractor. What should I include in the agreement to ensure that they are acting in compliance with the Code?
	A	You should add a clause such as: "The contractor acknowledges receipt of a copy of Alcan's Worldwide Code of Employee and Business Conduct and agrees to act in accordance with it in all dealings with and on behalf of Alcan".

Q	BOOKS AND RECORDS
	Some clients were in town and I took them out for dinner. I have since realized that I lost the receipt. I am usually very good about keeping track of my receipts - can I be reimbursed in this case?
	A	We must ensure that all financial transactions are properly recorded in Alcan's books of account; however, in this rare case where you have lost a receipt and cannot obtain a copy, you should discuss the situation with your supervisor and determine how the dinner could be documented in your expense account.

Q	I was entitled to buy a business class airline ticket for a recent business trip and then realised that it would cost $1,500 less to fly economy class. I cashed in the business class ticket for an economy class ticket, entered the business class ticket purchase in my expense account and pocketed the money saved. My friend tells me it's fraudulent but I figure that the Company has not lost out because it was going to pay that amount regardless. Is he right?
	A	Yes. If you are entitled to a business class ticket, it is to help you in carrying out your job and in being at your best when representing Alcan. In addition, by doing this, you are intentionally causing Alcan's books to be inaccurate, which is a breach of the Code.

WORLDWIDE CODE OF	18
EMPLOYEE AND BUSINESS CONDUCT

Q	BOOKS AND RECORDS I worked an over-time shift to accomplish a certain task that should have taken eight hours. The job took me four hours and so I charged six hours of over-time. As I see it, I gained but so did the Company. Is this wrong?
	A	Yes, it's wrong. We are not paid by the task but by hours worked, which must be accurately recorded. This is a breach of the Code.

Q	COMPETITION ISSUES A few months back, I was at a fund-raising dinner, which was attended by one of our competitors as well. I got to talking to this one gentleman, who I have known for years. We started off by talking very generally and then he indicated that his company was looking at raising prices next month. This made me uncomfortable and so I told him that I did not think it was appropriate that we discuss this sort of information. I have since placed a call to one of our lawyers. It was just a casual conversation, did I act rashly?
	A	You did the right thing. Even informal discussions among competitors, about things like prices, may be potential competition law violations. You should explain exactly what happened to your Company lawyer.

Q	I was asked by a competitor to provide information for a "benchmarking study". What should I do?
	A	Any exchange of price, cost and other sensitive information among competitors is risky; it may be seen as providing the basis for finding an unlawful agreement to restrain competition. Calling such an exchange "benchmarking" will not avoid this risk. It is essential that any such exercise can be demonstrated to have no purpose other than the lawful objective of formulating improvements in operations or processes. Alcan has a benchmarking policy stating that any proposed exchange of benchmarking information with competitors, or any request to participate in a benchmarking study with competitors must be reviewed in advance by a Company lawyer.

WORLDWIDE CODE OF	19
EMPLOYEE AND BUSINESS CONDUCT

Q	COMPLIANCE WITH THE CODE Who do I call or contact when I have issues regarding the Code?
	A	In most cases your supervisor, or as appropriate, department head, function head, Human Resources representative, a Company lawyer or other methods of contact the Company may from time to time make available.

Q	I am aware that two co-workers are involved in violations of the Code regarding the unauthorized use of Company property. This has been going on for a long time and I have not yet reported it but I now wish to do so. Will I be disciplined for not reporting this sooner?
	A	You should report breaches to the Code immediately. However, your decision to report and your non-involvement will be given due consideration and could mean, depending on the facts, that you will not be disciplined.

Q	CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY We're hiring a consultant to do some work on our computers. There's a chance that she may see some electronic files containing confidential information. Do I need to have her sign a confidentiality agreement?
	A	Yes. However, it is often sufficient, in cases where a firm of consultants is concerned, to enter into a confidentiality agreement with the firm as long as it undertakes to ensure its employees also respect Alcan's confidential information. Consult a Company lawyer in relation to the form and content of the confidentiality agreement. Even where there is a confidentiality agreement in place, we must avoid unnecessary disclosure of confidential information.

WORLDWIDE CODE OF	20
EMPLOYEE AND BUSINESS CONDUCT

Q	CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY As part of the preparation for a department fishing trip, I thought it would be fun to depict a fish on a poster with the Alcan logo as its head. Can I do this?
	A	No. The Alcan logo must only be used for Company business and must only appear in the prescribed manner outlined in Alcan's corporate identity guidelines.

Q	I have a computer program at work that I would like to copy to my home computer for my wife and kids to use with no commercial use intended. Am I allowed to do so?
	A	No. You must not copy software protected by copyright law and/or licence agreements unless the owner of the copyright or the licence holder specifically grants permission to do so. You should check with a member of your Information Technology department before copying any Alcan-furnished software program to your home computer.

Q	CONFLICTS OF INTEREST I received a very expensive watch from an Alcan supplier. May I keep it?
	A	No. Do not accept any gift or entertainment other than something quite modest for which you will not be reasonably expected to have an obligation. As a rule, exercise common sense and good judgement to avoid any perception of impropriety or conflict of interest.

Q	What about my family and friends - are they subject to the same conflict of interest principles?
	A	Generally speaking, anything that could present a potential conflict for you may also present a conflict if it benefits your immediate family or friends.

WORLDWIDE CODE OF	21
EMPLOYEE AND BUSINESS CONDUCT

Q	CONFLICTS OF INTEREST I often plan Alcan management conferences, which means that I deal with hotels, restaurants, and so on. A hotel, which we use most often, has offered a free weekend for my entire family and me. It would be a great getaway - would I be doing anything wrong if I were to accept it?
	A	Yes. By accepting the free weekend, it may appear that the hotel is attempting to sway your future business decisions. Decline the offer.

Q	We often hold events on-site (meetings, celebrations, etc.) for which we order lunch and/or pastries. My uncle owns a local bakery that offers excellent quality pastries on short notice. His prices are reasonable, and he is even willing to discount his prices because of our relationship. May I suggest that we hire him without considering other suppliers?
	A	These situations must be handled on a case-by-case basis. Precisely because he's your uncle, you should avoid any appearance of favoritism. Just to be on the safe side, you should ask a colleague to compare prices with other bakeries, to make sure your uncle's price list is competitive, especially if he would be supplying your events on an ongoing basis.

Q	I would like to have my landscaping re-done, which can be quite expensive. I ran into an Alcan supplier who offered me a great deal. Can I take him up on the offer?
	A	Probably not if this is a deal that you are being offered because of this supplier's dealings, or anticipated dealings, with Alcan, that involve you. Common sense and good judgement should prevail to avoid what may be a perceived conflict of interest. If you require clarification, ask your supervisor and obtain his or her approval.

Q	I'm doing some repairs at the cottage, and an Alcan supplier offered to drive by and drop off a free load of softwood lumber. He says it's excess supply and that I'm actually doing him a favour by taking it off his hands. Can I accept the lumber?
	A	No. Regardless of how this offer is presented by the supplier, this is clearly a favour for you. By doing you a favour, he may expect that you will do him one in return. This is a conflict-of-interest situation.

WORLDWIDE CODE OF	22
EMPLOYEE AND BUSINESS CONDUCT

Q	DRUGS, ALCOHOL IMPAIRMENT AND FIREARMS My co-workers and I often go to a local restaurant for lunch. I usually have three or four beers and return to work. My friend says that I could get into trouble at work over a few beers - is this true?
	A	At Alcan, we expect all our judgements to be clear and unimpaired by alcohol. This policy is clearly for the well-being of our employees and the productivity of the Company. If in fact you are impaired on the job, whether by alcohol or drugs, you have breached the Code. You shouldn't drink on the job any more than you should drink and drive.

Q	E-MAIL AND INTERNET USAGE I received an e-mail chain letter. Can I send the letter to friends in Alcan and elsewhere using the Alcan e-mail system?
	A	No. An Alcan-furnished computer and e-mail system should not be used to originate or forward non-business matters such as chain letters. Alcan's e-mail system is provided to Alcan employees for the conduct of Alcan's business.

Q	EMPLOYEE USE OF COMPANY PROPERTY I am doing home repairs and am in need of a hammer drill. I noticed that there is one at work that is never used. Can I borrow it for the week-end?
	A	No. Do not remove (even to borrow) any Company property without prior management approval.

WORLDWIDE CODE OF	23
EMPLOYEE AND BUSINESS CONDUCT

Q	ENVIRONMENT, HEALTH AND SAFETY  I accidentally backed my lift-truck into a barrel of solvent and knocked it over. My co-workers cleaned up the spill and no traces were left. Do I still need to report it?
	A	Yes. Even minor spills or other environmental incidents must be reported immediately.

Q	Something at work causes me occasionally to have sore and watery eyes. I have brought this to the attention of senior co-workers who have told me to stop complaining. What should I do?
	A	You should speak to your supervisor. Any potential hazards in the workplace must be identified.

Q	GOVERNMENT RELATIONS I received a request from a governmental representative asking for access to certain files related to a project that I am working on. Can I hand over the information?
	A	Unless the authority has a search warrant, first discuss the matter with a Company lawyer. If, however, the authority (a police officer, for instance) has a search warrant, cooperate immediately but contact a Company lawyer without delay.

WORLDWIDE CODE OF	24
EMPLOYEE AND BUSINESS CONDUCT

Q	HUMAN RIGHTS AND THE WORKPLACE A co-worker of mine is a member of a visible minority who moved here from another country. Other co-workers often make derogatory comments about his background. These comments are usually made behind his back, but sometimes even to his face. I feel very bad about this. What can I do?
	A	Two things. First, speak to the co-workers making these comments and let them know that you find their comments offensive, inappropriate, and in violation of Alcan's Code. Second, if it doesn't stop, report these unacceptable remarks to your supervisor. Racial discrimination takes many forms, both overt and insidious, spoken and unspoken. Overcoming racist attitudes is an ongoing challenge. It begins with each of us in our communities and our places of work. Alcan is a multinational, multiracial corporation operating in many countries around the world, representing many races and faiths. For Alcan to continue to succeed and prosper, each of those employees must receive the respect they deserve.

Q	One of my co-workers is gay and I know that he has been denied a promotion by his supervisor on the basis of his sexual orientation. What should he do?
	A	Discrimination on the basis of sexual orientation is not permitted at Alcan. Your co-worker should consult his Human Resources representative who in turn may consult a Company lawyer.

Q	A supplier to our plant uses child labour in his manufacturing and assembly operation. I found out about this through a contact who works there. As far as I know, Alcan management is unaware of the situation. What should I do?
	A	Report the situation immediately to your supervisor. Our Code clearly states that Alcan does not hire or approve of child or forced labour in any form (which includes by our suppliers), in any country in which we operate.

WORLDWIDE CODE OF	25
EMPLOYEE AND BUSINESS CONDUCT

Q	IMPROPER PAYMENTS TO OFFICIALS I have heard about "facilitating payments", which may not in fact be illegal. May I make such payments?
	A	The law distinguishes between facilitating payments and bribes, (i.e. it allows certain facilitating payments). Of course, these payments must also be allowable under the other country's laws. The dividing line between facilitating payments and improper payments is often difficult to determine. Therefore, if in doubt, consult a Company lawyer.

Q	INTERNATIONAL BUSINESS  I sometimes hear stories that certain agents use money paid by other companies for expensive gifts to senior foreign government officials. I'd like to stay competitive. What are my responsibilities and/or restrictions?
	A	Alcan's policy is to comply with the laws wherever we do business. You have an obligation to adhere to laws that forbid such gratuities to government officials. You must immediately report any situation that concerns you to your supervisor and a Company lawyer. Otherwise, you may expose Alcan and yourself to legal sanctions.

Q	MARKETING AND SALES Someone has asked me to compare our products with our competitors. Can I tell them a few white lies to get them to buy our products?
	A	No. In marketing and sales where comparisons are permitted by law, we must compare our products accurately to those of our competitors.

WORLDWIDE CODE OF	26
EMPLOYEE AND BUSINESS CONDUCT

Q	POLITICAL ACTIVITY I am doing some volunteer work for an upcoming municipal election. I would like to use the office fax machine to send out some campaign material. This involves only local calls and will be done after business hours. Is this okay?
	A	No. You may not use Alcan facilities for political purposes.

Q	Our office has been solicited to make a major donation to the mayor's re-election campaign. He's going to win easily, and our relationship with City Hall is important to us. Can we send him a cheque?
	A	Donations to political campaigns or parties, whether at the local or national level, can only be made when approved by Alcan's CEO.

Q	SECURITIES LAW AND INSIDER TRADING While eating at a restaurant today, I overheard two of Alcan's managers talking about Alcan's imminent plans to buy another company. Since I consider them to be reliable sources, can I purchase Alcan shares?
	A	No. You may not trade in Alcan securities, products, or raw materials while possessing material information about Alcan that has not been publicly disclosed. Nor may you pass such information on to others. You can buy stock only after such information becomes publicly available. Buying stock based on insider information could subject you to disciplinary measures and even criminal prosecution.

Q	I am a participant in an Alcan employee savings plan and, although I am not part of management, I have become aware of important insider information that could have an impact on Alcan's share price. Can I effect a transaction in my Savings Plan that would involve Alcan's Shares before the information I am privy to becomes publicly known?
	A	No. Neither you nor anyone else can enter into such a transaction, or any other transaction, directly or indirectly involving Alcan Shares, while possessing such information before it is publicly disclosed. Share-related transactions of any variety, based on inside information, is a breach of the Code and could make you subject to criminal prosecution. Whenever in doubt, contact a Company lawyer.

WORLDWIDE CODE OF	27
EMPLOYEE AND BUSINESS CONDUCT

Q	SECURITIES LAW AND INSIDER TRADING One of our consultants is working on the slides and presentations for the Annual General Meeting, where we will be announcing a split of Alcan stock. Is he considered an insider, or can he buy the stock and tell his friends about it?
	A	He's considered an insider, bound by the rules of insider trading. He cannot trade on this privileged information. If he does, he may be subject to sanctions and even criminal prosecution. If he informs you that he has traded our stock on this basis, you are duty bound to tell your supervisor immediately.

Q	SEXUAL HARASSMENT, WORKPLACE HARASSMENT AND VIOLENCE My female colleague tells me that her boss often makes comments about her "sexy walk". She knows that he thinks it is harmless, but his comments and the way he leers at her make her work environment very uncomfortable. Is this sexual harassment?
	A	Sexual harassment may include innuendoes that could be offensive, and this type of comment is considered inappropriate. Comments or behaviour that are in any way ambiguous or subject to misinterpretation should be avoided - they may constitute sexual harassment.

Q	My boss has been making suggestive comments to me, for example, suggesting that we get together after work. I've made it clear to her that I'm happily married and not available, but she keeps coming on to me.  I'm very uncomfortable with the situation. What should I do?
	A	Sexual harassment can happen regardless of the sexes of the individuals concerned. In the workplace, sexual harassment is often about power and the difficulty of fending off inappropriate advances from people you work for. Any form of sexual harassment, including unwelcome suggestive comments, is unacceptable. If your boss persists, speak to her supervisor who will deal with the situation.

WORLDWIDE CODE OF	28
EMPLOYEE AND BUSINESS CONDUCT

Q	SEXUAL HARASSMENT, WORKPLACE HARASSMENT AND VIOLENCE My co-workers are constantly picking on me, or else are ignoring me altogether. This makes my work environment almost unbearable. Can I do anything?
	A	At Alcan, we strive to maintain a work environment in which the personal dignity of the individual is respected by the Company and other employees. We do not tolerate the behaviour that you describe. You should discuss this matter with your supervisor.

Q	SHAREHOLDER, MEDIA AND COMMUNITY RELATIONS From time to time, I receive calls from the local media, analysts, and even shareholders, with questions related to the Company and its business. I read the Annual Report every year and consider myself to be knowledgeable about the Company. May I answer their questions?
	A	No. The questioner's motives may not be apparent. Please refer any such questions to either Media Relations [1 (514) 848-1342] or Investor Relations [1 (514) 848-8368] as appropriate. That's their job. Let them take care of such inquiries.

Q	WORKPLACE SECURITY I was leaving work one night and our security staff was searching everyone's bag. It seems that a portable computer had gone missing from someone's office. Does Alcan security have the right to search our belongings?
	A	Yes, subject to local laws, Alcan security staff (or Alcan representatives) are permitted to direct the search of persons, vehicles or property that are on Alcan premises. All employees as well as suppliers, purchasers, etc. are expected to cooperate with such searches.

COMPANY CONTACTS

Your Supervisor is normally your main contact for Code-related matters.

Other contacts are:

• Your Human Resources Representative

Name: ________________________________________________________________________________________________________________

Phone: _______________________________________________________________________________________________________________

• Your Company Lawyer

Name: ________________________________________________________________________________________________________________

Phone: _______________________________________________________________________________________________________________

• Your Business Group's Compliance Officer

Name: ________________________________________________________________________________________________________________

Phone: _______________________________________________________________________________________________________________

• Alcan's Ombudsman

Phone: +1 (514) 848-8000 (Alcan network: 5-344-8000)

E-mail: ombudsman@alcan.com

Please note that this contact information may change from time to time.

To view updates, please consult the electronic version of the Code on

the intranet (web.alcan.com), under publications, or on the Internet

(www.alcan.com).

Alcan Inc. 1188 Sherbrooke Street West Montreal, Quebec H3A 3G2 Canada   www.alcan.com Printed in Canada (34100E-2002)   Mailing Address: P.O. Box 6090 Montreal, Quebec H3C 3A7 Canada Telephone: (514) 848-8000 Telecopier: (514) 848-8115  

EX-14

Alcan Code of Ethics for Senior Financial Officers

I. Statement of Policy

Alcan Inc. ("Alcan" or the "Company") is committed to financial integrity and to full and accurate financial disclosure in compliance with applicable accounting policies, laws and regulations. This Code of Ethics for Senior Financial Officers ("Code") sets out specific principles to guide the Company's senior financial officers, including the Chief Executive Officer, the Chief Financial Officer and the Controller, in the performance of their duties.

The Code supplements the principles in Alcan's Worldwide Code of Employee and Business Conduct. Alcan's senior financial officers are bound by the requirements of both documents.

II. Principles

In performing their duties, Senior Financial Officers must:

1.	act with honesty and integrity, avoiding actual or apparent conflicts between personal interests and the interests of Alcan;
2.	provide information that is accurate, complete, objective, relevant, timely and understandable for disclosure in reports and documents that the Company files with securities authorities and in any other public document;
3.	comply with applicable accounting and reporting policies, laws and regulations;
4.	act in good faith, responsibly, with due care, competence and diligence, without misrepresenting or omitting material facts or allowing independent judgment to be compromised;
5.	respect the confidentiality of information acquired in the course of the performance of responsibilities except when authorized or otherwise legally obligated to disclose; confidential information acquired while performing their duties must not be used for personal advantage;
6.	share knowledge and maintain skills that are important and relevant to the performance of their work;
7.	co-operate with internal and external auditors;
8.	proactively promote ethical behaviour among subordinates, peers and consultants; and
9.	use corporate assets and resources in a responsible manner.

III. Compliance

Senior financial officers must promptly report to Alcan's Chief Legal Officer, an Ombudsman or the Audit Committee of the Board any violation of securities and anti-fraud laws or any violation of this Code.

Any complaint of retaliation, discharge or other adverse employment action for acting as "whistleblowers" by providing information concerning any alleged violations of law will be investigated and followed up in accordance with Company policy.

Senior financial officers will be advised of their status as such by the Chief Financial Officer and must acknowledge and certify annually that they have carried out their responsibilities in accordance with this Code.

EX-21

EXHIBIT NO. 21:  SUBSIDIARIES, RELATED COMPANIES, ETC.

With the exception of a number of Subsidiaries which, considered in the aggregate, would not constitute a significant Subsidiary, the Subsidiaries of Alcan, as of 15 February 2004, are listed below.  All Subsidiaries and Joint Ventures named below are consolidated in the financial statements incorporated by reference in this report.  The list also includes several Related Companies for which Alcan reports its interest in the net income or loss of such companies. Alcan is the direct owner of the stock of each Subsidiary or Related Company, except where the name is indented.  Indentation signifies that the principal ownership by Alcan is through the company under which the indentation is made; where there is additional ownership through another company also listed below, that additional ownership is described in the end-note.

ALCAN INC.
Subsidiaries, Related Companies, Etc.	Organized Under the Laws of	% of Voting Shares Held by Immediate Owner
3712001 CANADA INC.	Canada	100.00
9121-5988 QUÉBEC INC.	Quebec	100.00
ALCAN ALUMINIUM QUEBEC AND COMPANY, LIMITED PARTNERSHIP	Quebec	99.00 (3)
9121-5996 QUÉBEC INC.	Quebec	100.00
ALCAN-SPROSTONS LIMITED	Jamaica	100.00
ALCAN ACQUISITION CORPORATION	Texas	100.00
ALCAN ADMINCO (2000) INC.	Canada	100.00
ALCAN ALESA TECHNOLOGIES LTD.	Canada	100.00
ALCAN ALLUMINIO S.p.A.	Italy	100.00
ALCAN PACKAGING ITALIA S.r.l.	Italy	76.00 (14)
bp EUROPACK S.r.l.	Italy	100.00
ALCAN ALUMINIO (AMÉRICA LATINA) INC.	Canada	100.00
ALCAN ALUMINIUM BETEILIGUNGSGESELLSCHAFT mbH	Germany	100.00
ALCAN ASIA PACIFIC LIMITED	Canada	100.00
ALCAN HOLDINGS FINANCE LLC	Delaware	100.00
ALCAN CORPORATION	Texas	97.00 (5)
ALCAN ALUMINUM CORPORATION	Texas	100.00
LOGAN ALUMINUM INC.	Delaware	40.00
ALCAN ALUMINUM EXPORT, INC.	Georgia	100.00
ALCAN CONNECTICUT, INC.	Connecticut	100.00
ALCAN DE MEXICO, S.A. DE C.V.	Mexico	100.00
ALCAN MANAGEMENT SERVICES USA INC.	Ohio	100.00
ALCAN POWER MARKETING, INC.	Ohio	100.00
ALCAN PRIMARY PRODUCTS CORPORATION	Texas	100.00
ALCAN PRODUCTS CORPORATION	Texas	100.00
ALCAN BALTEK CORPORATION	Delaware	100.00
BALSA DEVELOPMENT CORPORATION	New Jersey	100.00
BALSA ECUADOR LUMBER CORPORATION	New Jersey	100.00
BALTEK FOREIGN SALES CORPORATION	US Virgin Islands	100.00
BALTEK GmbH	Germany	100.00
BALTEK INTERNATIONAL CORPORATION	Delaware	100.00
BALTEK LIMITED	England	100.00
PACIFIC TIMBER LIMITED	England	100.00
BALTEK MERCOSUR, L.L.C.	New Jersey	100.00
BALTEK S.A.	France	100.00
BALTEK SCANDINAVIA ApS DENMARK	Denmark	100.00
COMPANIA ECUATORIANA DE BALSA S.A.	Ecuador	100.00
CRUSTACEA CORPORATION	Delaware	100.00
CRYOGENIC STRUCTURES CORPORATION	Delaware	94.00
PLANTATIONES DE BALSA  PLANTABA S.A.	Ecuador	49.90 (72) (73) (74) (75)
POUCNST S.A.	Ecuador	100.00
PRODPAC, PRODUCTOS DEL PACIFICO S.A.	Ecuador	100.00
BALMANTA S.A.	Ecuador	67.93 (29)
MADERAS SECAS C.A. MASECA	Ecuador	57.08 (53) (54)
SANLAM CORPORATION	New York	100.00

1

ALCAN INC.
Subsidiaries, Related Companies, Etc.	Organized Under the Laws of	% of Voting Shares Held by Immediate Owner
ALCAN ENTERPRISES AMÉRICA LATINA INC.	Canada	100.00
ALCAN ALUMÍNIO DO BRASIL LTDA.	Brazil	100.00
ALCAN COMPOSITES BRASIL S.A.	Brazil	70.00
ALCAN PACKAGING DO BRASIL LTDA.	Brazil	83.00 (13)
CONSÓRCIO CANDONGA - (Unincorporated)	Brazil	50.00
CONSÓRCIO DE ALUMÍNIO DO MARANHÃO ("CONSÓRCIO ALUMAR")	Brazil	10.00
MINERAÇÃO RIO DO NORTE S.A.	Brazil	12.50
PETROCOQUE S.A. - INDÚSTRIA E COMÉRCIO	Brazil	25.00
ALCAN EUROPE LIMITED	England	99.00 (7)
ALCAN FINANCES B.V.	The Netherlands	100.00
ALCAN FINANCES (Bda) LTD.	Bermuda	100.00
ALCAN ASIA LIMITED	Hong Kong	100.00
ALCAN NIKKEI CHINA LIMITED	Hong Kong	49.00
ALCAN NINGXIA HOLDINGS LIMITED	Bermuda	100.00
ALCAN PACKAGING PUERTO RICO INC.	New Jersey	100.00
ALCAN (BERMUDA) LIMITED	Bermuda	100.00
ALCAN SHIPPING (BERMUDA) LIMITED	Bermuda	100.00
ALCOM NIKKEI SPECIALTY COATINGS SDN. BHD.	Malaysia	49.00 (17)
ALUMINIUM COMPANY OF MALAYSIA BERHAD	Malaysia	59.15
AL DOTCOM SDN. BHD.	Malaysia	100.00
CHAMPLAIN INSURANCE COMPANY LTD.	Bermuda	100.00
HALCO (MINING) INC.	Delaware	33.00 (50)
BOKE INVESTMENT COMPANY	Delaware	100.00
BOKE PERSONNEL LTD	Guernsey	100.00
BOKE SERVICES COMPANY	Belgium	100.00
BOKE SERVICES MANAGEMENT, INC.	Delaware	100.00
BOKE TRADING INC.	Delaware	100.00
COMPAGNIE DES BAUXITES DE GUINÉE	Delaware	51.00
NONFEMET INTERNATIONAL (China-Canada-Japan) ALUMINIUM COMPANY LIMITED	China	27.00
QUADREM INTERNATIONAL HOLDINGS,  LTD.	Bermuda	9.00 (78)
ALCAN FINANCES (IRELAND) LIMITED	Canada	100.00
ALCAN ALUMINIUM AG	Switzerland	100.00
ALCAN PACKAGING RORSCHACH AG	Switzerland	100.00
ALCAN HOLDINGS CANADA LIMITED	Canada	100.00
ALCAN FINANCES (IRELAND) COMPANY	Ireland	100.00
ALCAN HOLDINGS AUSTRALIA PTY LIMITED	Australia	100.00
ALCAN SOUTH PACIFIC PTY LTD	Australia	100.00
ALCAN GOVE DEVELOPMENT PTY LIMITED	Australia	100.00
ALCAN NORTHERN TERRITORY ALUMINA PTY LIMITED	Australia	100.00
GOVE ALUMINIUM LIMITED	Australia	100.00
ALCAN GOVE PTY LIMITED	Australia	50.00 (10)
ALCAN QUEENSLAND SMELTER PTY LTD	Australia	100.00
NABALCO PTY LIMITED	Australia	100.00
QUEENSLAND ALUMINA LIMITED	Australia	21.39 (79)
QUEENSLAND ALUMINA SECURITY CORPORATION	Delaware	20.00
ALCAN HOLDING (THAILAND) LIMITED	Thailand	48.00
SUBTANEE HOLDING COMPANY LIMITED	Thailand	50.09 (91)
SANGTHIEN HOLDING COMPANY LIMITED	Thailand	100.00
ALCAN HOLDINGS IRELAND CO.	Ireland	100.00
ALCAN DEUTSCHLAND HOLDINGS GmbH & Co. KG	Germany	99.99
ALCAN DEUTSCHLAND GmbH	Germany	90.00 (6)
ALUMINIUM NORF GmbH	Germany	50.00
DEUTSCHE ALUMINIUM VERPACKUNG RECYCLING GmbH	Germany	16.70 (39) (40)
ALUSUISSE-LONZA CSFR s.r.o.	Czech Republic	100.00

2

ALCAN INC.
Subsidiaries, Related Companies, Etc.	Organized Under the Laws of	% of Voting Shares Held by Immediate Owner
ALCAN HOLDINGS SWITZERLAND AG (SA/LTD.)	Switzerland	100.00
AL HOLDING  USA LLC	Delaware	100.00
ALCAN COMPOSITES USA INC.	Missouri	100.00
ALCAN GATOR-COR HOLDINGS, LLC	Delaware	59.44 (8) (9)
ALCAN GATOR-COR COMPANY, LLC	Delaware	100.00
NEVAMAR FINANCING, LLC	Delaware	100.00
NEVAMAR OFFSHORE ACQUISITION CORPORATION	Delaware	100.00
NEVAMAR TE ACQUISITION CORPORATION	Delaware	100.00
ALCAN PACKAGING FOOD AND TOBACCO INC.	Delaware	100.00
ALA (NEVADA) INC.	Nevada	95.38 (1) (2)
ALCAN PACKAGING PHARMA CENTER INC.	Delaware	100.00
ALCAN PACKAGING PHARMACEUTICAL AND PERSONAL CARE INC.	New Jersey	100.00
HBE FERMENTATION SYSTEMS INC.	California	10.00
INTERNATIONAL GLASS EQUIPMENT LTD.	Bahamas	100.00
POLAR MATERIALS INC.	Pennsylvania	86.21
PC MATERIALS INC.	Pennsylvania	50.00
POLYPLASMA INC.	Canada	100.00
WHEATON PACIFIC LIMITED	Hong Kong	99.80
ALCAN PACKAGING THERMAPLATE INC.	New Jersey	100.00
ALUSUISSE ALUMINUM USA INC.	Delaware	100.00
VAW FLEXIBLE PACKAGING INC.	Delaware	100.00
ALCAN AIREX AG	Switzerland	100.00
ALCAN ALESA ENGINEERING AG	Switzerland	100.00
ALCAN ALLEGA AG	Switzerland	100.00
ALCAN ALUCOBOND (FAR EAST) PTE LTD.	Singapore	100.00
ALCAN ALUMINIO ESPAÑA, S.A.	Spain	100.00
ALCAN ALUMINIO PORTUGAL LDA.	Portugal	98.00
ALCAN ALUMINIUM VALAIS SA	Switzerland	100.00
ALCAN AUSTRIA GmbH	Austria	100.00
ALCAN ALPE ADRIA D.O.O.	Slovenia	100.00
ALCAN HUNGARIA Kft.	Hungary	100.00
ALCAN ROMANIA SRL.	Romania	100.00
ALCAN CAPITAL JERSEY LIMITED	The Island of Jersey	100.00
ALCAN FINANCE JERSEY LIMITED	The Island of Jersey	100.00
ALCAN CAPITAL MARKET LTD.	Switzerland	100.00
ALCAN DÉCIN EXTRUSIONS s.r.o.	Czech Republic	100.00
ALCAN HOLDINGS EUROPE B.V.	The Netherlands	72.73 (11)
A-L FINANCIAL PRODUCTS LTD.	England	100.00
ALCAN DISTRIBUZIONE srl	Italy	100.00
ALCAN HOLDINGS FRANCE S.A.	France	99.99
ALCAN CMIC SAS	France	100.00
ALCAN FRANCE EXTRUSIONS SAS	France	100.00
ALCAN LAMINÉS FRANCE	France	100.00
ALCAN PACKAGING FRANCE SAS	France	100.00
ALCAN PACKAGING SARREBOURG SAS	France	100.00
BOXAL FRANCE SAS	France	100.00
CHARMETTES SAS	France	100.00
CIVILE IMMOBILIÈRE CELI	France	99.50 (35)
LAWSON MARDON TRENTESAUX SA	France	99.99
SOCIÉTÉ ALSACIENNE D'ALUMINIUM	France	100.00
VAW INTERNATIONAL CAPSULES S.A.	France	100.00
WHEATON FRANCE SAS	France	100.00
ALCAN HOLDINGS GERMANY GmbH	Germany	99.24 (12)
ALCAN BDW BETEILIGUNGS GmbH	Germany	100.00
ALCAN BDW GmbH & CO. KG	Germany	100.00

3

ALCAN INC.
Subsidiaries, Related Companies, Etc.	Organized Under the Laws of	% of Voting Shares Held by Immediate Owner
ALCAN COMPOSITES LTD, SHANGHAI	China	100.00
ALCAN KAPA GmbH	Germany	100.00
ALCAN PACKAGING NEUMUNSTER GmbH	Germany	100.00
ALCAN PACKAGING SINGEN GmbH	Germany	99.90 (15)
TSCHEULIN-ROTHAL GmbH	Germany	95.91
ALCAN PACKAGING MOSKAU OOO	Russia	100.00
ALCAN SINGEN GmbH	Germany	100.00
ALCAN TOMOS d.o.o.	Slovenia	66.67
ALCAN HOLDINGS NEDERLAND B.V.	The Netherlands	100.00
ALCAN NEDERLAND B.V.	The Netherlands	100.00
S.A. ALCAN BELGIUM N.V.	Belgium	99.37 (92)
ALCAN PACKAGING AMSTERDAM BV	The Netherlands	100.00
ALCAN PACKAGING BRABANT BV	The Netherlands	100.00
ALCAN PACKAGING ZUTPHEN BV	The Netherlands	100.00
ALU-VASTGOED B.V.	The Netherlands	100.00
ALUMINIUM & CHEMIE ROTTERDAM B.V.	The Netherlands	65.82 (28)
BOXAL NETHERLANDS B.V.	The Netherlands	100.00
BOXAL SALES GmbH	Germany	100.00
ALCAN HOLDINGS UK LIMITED	England	100.00
ALCAN PACKAGING BRIDGNORTH LTD	England	100.00
ALCAN PACKAGING CRAMLINGTON LTD.	England	100.00
ALCAN PRODUCTS UK LTD.	England	100.00
LAWSON MARDON PACKAGING LTD.	England	100.00
ALCAN PACKAGING ALZIRA SAU	Spain	100.00
ALCAN PACKAGING PENSION TRUST LTD.	England	100.00
ALCAN PACKAGING UK LTD	England	100.00
KOTERS (LIVERPOOL) LIMITED	England	100.00
LAWSON MARDON FIBRENYLE LTD.	England	100.00
FIBRENYLE (CORBY) LIMITED	England	100.00
LAWSON MARDON FLEXIBLE LIMITED	England	100.00
MARDON FLEXIBLE PACKAGING (KENTON) LIMITED	England	100.00
LAWSON MARDON SMITH BROTHERS LTD.	England	100.00
ALCAN PACKAGING SUTTON LTD.	England	100.00
MARDON PELOREX LIMITED	England	100.00
LMG IRIDON LIMITED	England	100.00
LAWSON MARDON THERMOPLASTICS LTD.	England	100.00
WHEATON UK LTD.	England	100.00
LAWSON MARDON NORTHERN LIMITED	England	100.00
LAWSON MARDON READING LTD.	England	100.00
STALCON PLASTICS LIMITED	England	100.00
ALCAN PACKAGING (UK SALES) LTD.	England	100.00
HEADLEY (READING) LIMITED	England	100.00
CELLOGLAS HOLDINGS LTD.	England	100.00
ALCAN PRINT FINISHERS LTD.	England	100.00
FIVE STAR CORPORATION LIMITED	England	100.00
PROTECTA PRINT LIMITED	England	100.00
QUALICOAT LIMITED	England	100.00
UNIVERSAL COATINGS LIMITED	England	100.00
WEST MIDLANDS FOIL BLOCKING LIMITED	England	100.00
LUSTRETEX LTD.	England	100.00
THE UV COMPANY LIMITED	England	100.00
UVIPAK (FINISHING) LIMITED	England	100.00
HEADLEY TRUSTEES LIMITED	England	100.00
LAWSON MARDON GROUP INTERNATIONAL LIMITED	England	100.00
LAWSON MARDON IZMIR GRAVUR BASKILI KARTON SANAYI VE TICARET A.S.	Turkey	100.00
LAWSON MARDON KAZAKHSTAN LIMITED LIABILITY PARTNERSHIP	Kazakhstan	100.00
ROTOPAK MATBAACILIK AMBALAJ SANAYI VE TICARET A.S.	Turkey	100.00
ROTOGRAVÜR KLISECILIK GRAFIK SANAYI VE TICARET A.S.	Turkey	95.00 (80)
ROTOPAS AMBALAJ PAZARLAMA VE DAGITIM A.S.	Turkey	100.00

4

ALCAN INC.
Subsidiaries, Related Companies, Etc.	Organized Under the Laws of	% of Voting Shares Held by Immediate Owner
VAW EUROPACK IBERICA, S.L.	Spain	100.00
LAWSON MARDON PACKAGING SALES LTD.	England	100.00
ALCAN JAPAN LTD.	Japan	100.00
ALCAN PRODOTTI SPECIALI spa	Italy	100.00
LMG (IRELAND) LIMITED	Ireland	100.00
ALCAN PACKAGING DUBLIN LTD	Ireland	100.00
WCL FLEXIBLE PACKAGING LIMITED	Ireland	100.00
WAXED CARTONS (EXPORT) LIMITED	Ireland	100.00
ZITELI LIMITED	Ireland	100.00
ALCAN HOLDINGS INVESTMENT LLC	Delaware	100.00
ALCAN ICELAND LTD.	Iceland	100.00
ENDURVINNSLAN LTD.	Iceland	7.00
ALCAN MASS TRANSPORTATION SYSTEMS AUSTRALIA PTY. LTD.	Australia	100.00
ALCAN PACKAGING CANADA LIMITED	Ontario	100.00
LAWSON MARDON PACKAGING OVERSEAS (BRISTOL) LIMITED	England	99.00 (52)
ALCAN PACKAGING KREUZLINGEN AG (SA/LTD.)	Switzerland	100.00
ALCAN PACKAGING SERVICES LTD.	Switzerland	100.00
ALCAN TECHNOLOGY & MANAGEMENT LTD.	Switzerland	100.00
ALCAN TRADING AG	Switzerland	100.00
ALUFLUOR AB	Sweden	50.00
ALUSUISSE OF AUSTRALIA LIMITED	Australia	100.00
ALCAN ENGINEERING PTY LIMITED	Australia	100.00
SWISS ALUMINIUM AUSTRALIA LIMITED	Australia	100.00
GOVE JOINT VENTURE (THE)	Australia	70.00 (49)
ALUSUISSE SERVICIOS S.A., Panama	Panama	100.00
ALUSUISSE SERVICIOS S.A., Venezuela	Venezuela	100.00
BOXAL (SUISSE) S.A.	Switzerland	100.00
METALLICA S.A.	Switzerland	35.00
METALLWERKE REFONDA AG	Switzerland	100.00
SOCIÉTÉ MINIÈRE ET DE PARTICIPATIONS GUINÉE-ALUSUISSE	Guinea	50.00
SOR-NORGE ALUMINIUM AS	Norway	50.00
ALCAN INTERNATIONAL LIMITED	Canada	100.00
ALCAN IRELAND LIMITED	Ireland	100.00
ALCAN MANAGEMENT SERVICES CANADA LIMITED	Canada	100.00
ALCAN PACKAGING STARPACK CORPORATION	Philippines	100.00
SPC REALTY CORPORATION	Philippines	40.00
ALCAN PACKAGING STRONGPACK PUBLIC COMPANY LIMITED	Thailand	49.00 (16)
STRONG THAIPACK COMPANY LIMITED	Thailand	100.00
ALCAN REALTY LIMITED	Canada	100.00
ALCAN SHANNON COMPANY	Ireland	100.00
ALCAN SHIPPING SERVICES LIMITED	Canada	100.00
ALCAN SMELTERS AND CHEMICALS LIMITED	Canada	100.00
ALCAN TAIHAN ALUMINUM LIMITED	Korea	67.91
ALUMINERIE ALOUETTE INC.	Quebec	20.00 (21)
ALUMINUM COMPANY OF CANADA LIMITED	Canada	100.00
ALCAN FINANCES USA LLC	Delaware	100.00
BRITISH ALCAN ALUMINIUM plc	England	100.00
ALCAN CHEMICALS EUROPE LIMITED	England	100.00
ALCAN CHEMICALS LIMITED	England	100.00
ALCAN FARMS LIMITED	England	100.00
TBAC LIMITED	England	100.00
ALCAN ALUMINIUM UK LIMITED	England	85.00 (4)
BRITISH ALCAN OVERSEAS INVESTMENTS LIMITED	England	100.00
SARATOGA RESOURCES N.V.	Netherland Antilles	20.00
VIGELAND METAL REFINERY A/S	Norway	50.00
GHANA BAUXITE COMPANY LIMITED	Ghana	80.00
VIGELANDS BRUG A/S	Norway	100.00
THE BOWLING BACK LAND COMPANY LIMITED	England	50.00

5

ALCAN INC.
Subsidiaries, Related Companies, Etc.	Organized Under the Laws of	% of Voting Shares Held by Immediate Owner
N.V. ALCAN ALUMINIUM PRODUCTS BENELUX S.A.	Belgium	100.00
PECHINEY	France	100.00
ALUMINIUM DUNKERQUE S.A.	France	100.00
ALUMINIUM PECHINEY	France	98.75 (24)
AFFIMET	France	100.00
ALUCAM - COMPAGNIE CAMEROUNAISE DE L'ALUMINIUM	Cameroun	46.67
ALUBASSA	Cameroun	70.09 (19)
ALUCONGO	Congo	55.86 (20)
CENTRE MÉDICAL DES ENTREPRISES DE LA SANAGA	Cameroun	74.89 (33) (34)
COLALU	Centre Africa	57.35 (36)
HOSTELLERIE DE LA SANAGA	Cameroun	67.50
SOCATRAL - SOCIÉTÉ CAMEROUNAISE DE TRANSFORMATION DE L'ALUMINIUM	Cameroun	52.55 (82)
SOTRALGA - SOCIÉTÉ DE TRANSFORMATION DE L'ALUMINIUM AU GABON	Gabon	38.33 (90)
ALUMINIUM PECHINEY SERVICE	France	99.36 (26)
ALUMINIUM PECHINEY SPV	France	99.96 (27)
ALUMINIUM PECHINEY UO 5	France	100.00
ÉLECTRIFICATION CHARPENTE LEVAGE - E.C.L.	France	100.00
ECL SCES AFRICA ENGINEERING	South Africa	100.00
ECL SERVICES NL BV	The Netherlands	100.00
ECL SERVICES PTY LIMITED	Australia	100.00
ECL SERVICES, INC.	Quebec	100.00
ECL CHINA HOLDINGS LTD	China	50.00 (41)
ECL SERVICOS LIMITADA	Mozambique	85.71 (42)
ECL SHANGHAI	China	100.00
PECHINEY ALUMINA RESOURCES INDIA PRIVATE LTD	India	100.00
PECHINEY PHILIPPINES INC	Philippines	99.99
PECHINEY VÉNÉZUELA, S.A.	Venezuela	100.00
PECHINEY SERVICIOS	Venezuela	100.00
PEM ABRASIFS-RÉFRACTAIRES	France	100.00
SOCIÉTÉ FINANCIÈRE POUR LE DÉVELOPPEMENT DE L'ALUMINIUM - S.F.D.A.	France	100.00
ALUMINIUM DE GRÈCE S.A.I.C.	Greece	41.10 (22) (23)
DELPHES & DISTOMON (SOCIÉTÉ MINIÈRE DE)	Greece	99.98
SOCIÉTÉ IMMOBILIÈRE ALPES PROVENCE - SIAP	France	89.44 (86)
SOCIÉTÉ MAURIENNAISE DE TRANSFORMATION - S M T	France	100.00
SOCIÉTÉ MINIÈRE DES BAUX	France	99.90
SOCIÉTÉ POUR LE DÉVELOPPEMENT DE L'AFRIQUE CENTRALE ET DE L'OUEST -    SODAFE	France	62.83 (88)
SOREMI - SOCIÉTÉ DE RECHERCHES ET D'EXPLOITATIONS MINIÈRES	France	99.86 (89)
TECHNOLOGIE PECHINEY LIMITÉE	Quebec	100.00
BRANDEIS (BROKERS) LIMITED	England	100.00
CARBONE SAVOIE	France	30.00
CARBONE SAVOIE BRAZIL SA	Brazil	97.89
COMPAGNIE GÉNÉRALE D'ÉLECTROLYSE DU PALAIS	France	100.00
FONDERIE DE CUIVRE DU PALAIS	France	100.00
COMPAGNIE GÉNÉRALE DE PARTICIPATION INDUSTRIELLE ET FINANCIÈRE	France	100.00
CEBAL BRASIL LIMITADA	Brazil	100.00
CEPILLOS DE MATAMOROS, S.A. de C.V.	Mexico	100.00
EMIROLL	United Arab Emirates	30.00
ENVARIL PLASTIC PACKAGING s.r.l.	Argentina	100.00
NOVACEL S.A. DE C.V.	Mexico	100.00
CELPLY S.A. DE C.V.	Mexico	100.00
PECHINEY EUROFOIL EMIRATES	United Arab Emirates	80.00 (56)

6

ALCAN INC.
Subsidiaries, Related Companies, Etc.	Organized Under the Laws of	% of Voting Shares Held by Immediate Owner
PECHINEY EUROFOIL, LUXEMBOURG S.A.	Luxembourg	100.00
EUROFOIL, INC.	New York	100.00
EURONORCA PARTNERS (unincorporated)	New York	50.00
PECHINEY EUROFOIL BELGIQUE S.A.	Belgium	100.00
STOCKTUNA, AB	Sweden	100.00
PECHINEY HOLDINGS UK LTD	England	100.00
BRANDEIS LIMITED	England	99.99 (30)
CEBAL UK LTD	England	100.00
FEEP HOLDINGS UK LIMITED	England	100.00
PET PLAS PACKAGING LIMITED	United Kingdom	100.00
PECHINEY AVIATUBE LTD.	England	100.00
PECHINEY CEBAL PACKAGING LTD	England	100.00
PECHINEY TRADING LIMITED	England	100.00
PECHINEY UK LIMITED	United Kingdom	100.00
ALUMINIUM PECHINEY (UK) LIMITED	England	100.00
PECHINEY ELECTROMETALLURGY LTD	England	100.00
PECHINEY UK INTERNATIONAL LTD	England	99.90
SEFRANEX GULF LTD	England	100.00
TECHPACK (UK) LIMITED	United Kingdom	100.00
PECHINEY METALS CORPORATION	Delaware	62.50 (62)
PECHINEY ALUMINIUM ENGINEERING, INC.	Delaware	100.00
PECHINEY PLASTIC PACKAGING TEXAS, INC.	Delaware	100.00
PECHINEY PLASTIC PACKAGING, INC.	Delaware	100.00
GUARDIAN ESPANOLA S.A.	Spain	100.00
PECHINEY PLASTIC PACKAGING CANADA, INC.	Canada	100.00
PECHINEY PLASTIC PACKAGING RECEIVABLES CORPORATION	Delaware	100.00
PECHINEY ROLLED PRODUCTS, LLC	Delaware	100.00
PECHINEY CAST PLATE, INC.	Delaware	100.00
PECHINEY WORLD TRADE (USA), INC.	New York	92.88 (71)
BRANDEIS SERVICES, INC.	Delaware	100.00
PÉCHINEY BÉCANCOUR, INC.	Delaware	100.00
PECHINEY REYNOLDS QUEBEC INC.	Nebraska	50.25
ALUMINERIE DE BÉCANCOUR, INC.	Quebec	50.10
PECHINEY SALES CORPORATION	Delaware	100.00
PECHINEY CANADA, INC.	Canada	100.00
PECHINEY HOLDINGS, INC.	Delaware	100.00
PECHINEY PERU	Peru	98.00
PMC LEASE COMPANY	Delaware	100.00
PRP PROPERTY & EQUIPMENT, LLC	Illinois	100.00
SPOT COMMUNICATION	France	100.00
FINANCIÈRE EUROPÉENNE D'EMBALLAGES PECHINEY	France	100.00
CEBAL S.A.S.	France	97.94 (32)
CARRILLON ÉTIQUETTES ADHÉSIVES	France	100.00
CEBAL AÉROSOL FRANCE	France	100.00
CEBAL CR, A.S.	Czech Republic	99.45
CEBAL FINLAND OY	Finland	100.00
CEBAL ITALIANA SPA	Italy	99.87
CEBAL MEXICO	Mexico	100.00
CEBAL SVENSKA AB	Sweden	100.00
CEBAL TUBA POLSKA S.A.	Poland	60.96
CEBAL TUBA SP ZO.O.	Poland	62.50
CEBAL ZHONGSHAN CO. LTD	China	60.00
COPAL SNC	France	51.00 (37)
COTUPLAS	France	76.96 (38)
PECHINEY MANUFACTURE MAROCAINE D'ALUMINIUM - M.M.A.	Morocco	48.64 (61)
AL WIFAQ 5	Morocco	99.95
MOGALBAT - MOGHREBIENNE ALUMINIUM POUR LE BATIMENT	Morocco	22.71
SOCIÉTÉ MÉTALLURGIQUE DE MOHAMMEDIA - S.M.M.	Morocco	79.00
SEFIMO S.A.	France	95.85 (81)

7

ALCAN INC.
Subsidiaries, Related Companies, Etc.	Organized Under the Laws of	% of Voting Shares Held by Immediate Owner
SOCIÉTÉ IMMOBILIÈRE CLICHY - HUGO	France	60.00 (87)
SOCIÉTÉ MANUFACTURE MAROCAINE DE MOHAMMEDIA - S.M.M.M.	Morocco	99.94
TECHPION RECHERCHE G.I.E.	France	51.00 (94)
THIBAULT COLLIN DACHARRY	France	99.76 (95)
CEBAL VERPACKUNGEN GmbH	Germany	100.00
CEBALSOL s.r.o.	Czech Republic	100.00
DANAFLEX PACKAGING CORPORATION LIMITED	New Zealand	100.00
PECHINEY BOUTEILLES PLASTIQUES	France	100.00
PECHINEY CAPSULES	France	100.00
PECHINEY CAPALUX	Canada	100.00
INVERSIONES PECHINEY CHILE LIMITADA	Chile	99.99 (51)
ENOCAP CHILE S.A.	Chile	100.00
PECHINEY CORK & SEAL OF CALIFORNIA	California	100.00
PECHINEY CECHOBAL S.r.o.	Czech Republic	100.00
PECHINEY CELOGRAF S.L.	Spain	100.00
CEBAL ENTEC S.A.	Spain	100.00
INDUSTRIAS METALICAS CASTELLO S.A.	Spain	100.00
PRECIS, S.A.	Spain	100.00
PECHINEY ESPANA, S.A.	Spain	100.00
SOPLARIL PORTUGAL	Portugal	99.99
PECHINEY EMBALLAGE FLEXIBLE EUROPE	France	100.00
PECHINEY LEBENSMITTEL VERPACKUNGEN GmbH	Germany	100.00
ALUFIN GmbH TABULAROXID	Germany	100.00
PECHINEY SCHEUCH BETRIEBS-UND VERWALTUNGS GmbH	Germany	100.00
PECHINEY SCHEUCH GmbH & Co KG	Germany	100.00
SCHEUCH UNTERSTUTZUNGSKASSE GmbH	Germany	100.00
SOCIÉTÉ DE FINANCEMENT DES RISQUES INDUSTRIELS - SOFIRI	Luxembourg	90.00 (85)
SOPLARIL	France	100.00
AVENIR PRINT SERVICE	France	100.00
SOPLARIL ITALIA S.p.A.	Italy	100.00
FINANCIÈRE TECHPACK	France	100.00
TECHPACK INTERNATIONAL - T.P.I.	France	99.99
AIRLESSYSTEMS	France	50.00
BENSON SRL	Italy	100.00
COSMETECH MABLY EUROPE	France	100.00
DECOPLAST	France	99.91
HEVCO SA	Switzerland	100.00
LAFFON SPA	Italy	100.00
LIR FRANCE	France	100.00
MT PACKAGING	France	100.00
PT TECHPACK ASIA	Indonesia	95.00
SFG - SOCIÉTÉ FRANÇAISE DE GALVANOPLASTIE	France	100.00
TECHPACK AMERICA, INC.	Delaware	100.00
HENLOPEN MANUFACTURING CO. INC.	New York	100.00
COSMETECH MABLY INTERNATIONAL, LLC	New York	100.00
COSMETECH MABLY INTERNATIONAL (H.K.) LTD.	Hong Kong	51.00
CT PACK, LLC	New York	100.00
TECHPACK AMERICA COSMETIC PACKAGING, L.P.	Texas	99.50 (93)
TECHPACK LATIN AMERICA S.A.	Venezuela	100.00
TPI MEXICANA S.A. de C.V.	Mexico	99.98 (97)
TPI MOLPLASTIC Ltda	Brazil	100.00
TPI PLASTIMEC S.A.	Argentina	51.00
TECHPACK DEUTSCHLAND GmbH	Germany	100.00
TECHPACK FINANCEMENT	France	100.00
FRANCE ALUMINIUM RECYCLAGE SA	France	39.99 (43) (44)
GIE - PECHINEY RECHERCHE	France	92.00 (45) (46) (47) (48)
INVESTRIA	France	98.74
PECHINEY CENTRE DE RECHERCHES DE VOREPPE	France	100.00

8

ALCAN INC.
Subsidiaries, Related Companies, Etc.	Organized Under the Laws of	% of Voting Shares Held by Immediate Owner
PECHINEY CONSOLIDATED AUSTRALIA PTY LIMITED	Australia	55.52 (55)
PECHINEY PACIFIC PTY LIMITED	Australia	100.00
ALUMINIUM PECHINEY HOLDINGS PTY LTD	Australia	99.00 (25)
JOHCATH HOLDINGS PTY LIMITED	Australia	100.00
CATHJOH HOLDINGS PTY LIMITED	Australia	50.00 (31)
PECHINEY RESOURCES PTY, LIMITED	Australia	100.00
PECHINEY AUSTRALU PTY LIMITED	Australia	100.00
TOMAGO ALUMINIUM COMPANY PTY LTD	Australia	50.00
TOMAGO ALUMINIUM JOINT-VENTURE	Australia	36.05 (96)
PECHINEY ÉLECTROMÉTALLURGIE	France	100.00
INVENSIL	France	100.00
INVENSIL FREE STATE (Pty) LTD	South Africa	100.00
SILICON SMELTERS (Pty) Ltd	South Africa	100.00
VAAL SILICON SMELTERS (Pty) LTD	South Africa	74.90
PECHINEY POLSIN KARBID	Poland	60.00
PRODUCTION PECHINEY POLSIN KARBID	Poland	93.32
SOCIÉTÉ DE PRODUITS INDUSTRIELS DU RHÔNE	France	99.94
PECHINEY IOTA 99	France	99.76 (58)
PECHINEY KHI 99	France	99.76 (60)
PECHINEY MANHATTAN	France	100.00
SAVOIE SERVICE Y.K.	Japan	100.00
PECHINEY MU 99	France	99.76 (63)
PECHINEY NEDERLAND, N.V.	Netherlands	100.00
PECHINEY NEDERLANDS & CO ALUMINIUM PRODUCTIE BEDRIEJF, C.V.	The Netherlands	85.00
PECHINEY PHI 2000	France	99.76 (64) (65)
PECHINEY RHENALU	France	100.00
ALMET A.G.	Germany	36.36 (18)
ALMET	France	100.00
E.M.T.- TONNETOT	France	100.00
SANTELLI	France	100.00
ALUMINIUM METALL ALMET AG	Switzerland	100.00
CAST HOUSE TECHNOLOGY, LTD	Canada	100.00
PECHINEY ALUMINIUM PRESSWERK GMBH	Germany	100.00
PECHINEY ALUMINIUM PRESSWERK BURG GmbH	Germany	100.00
PECHINEY ALUMINIUM PRESSWERK PFALZ GMBH	Germany	99.99
PECHINEY AVIATUBE	France	100.00
PECHINEY BÂTIMENT	France	100.00
PECHINEY EUROFOIL FRANCE	France	100.00
PECHINEY SERVICES FINANCE	France	46.53 (67) (68)
PECHINEY SOFTAL	France	100.00
RHENAROLL S.A.	France	49.85
PECHINEY WORLD TRADE S.A.	France	100.00
000 PECHINEY EURASIA	Russian Federation	100.00
CHROMEX MINING CO (PTY) LIMITED	South Africa	100.00
PECHINEY APPROVISIONNEMENTS ALUMINE	France	100.00
PECHINEY A.I.M.	France	100.00
PECHINEY BELGIUM  S.A.	Belgium	99.90
ALMET BELGIUM SA	Belgium	99.34
DE CLEEN & VEREECKEN N.V.	Belgium	99.60
PECHINEY BRASIL LTDA	Brazil	100.00
PECHINEY CHILE LIMITADA	Chile	99.00
PECHINEY DADCO LIMITED	United Kingdom	50.00
PECHINEY DANMARK A/S	Denmark	100.00
PECHINEY DEUTSCHLAND GmbH	Germany	100.00
COFRANEX GmbH	Germany	100.00
PECHINEY DIS TICARET LIMITED SIRKETI	Turkey	99.99
PECHINEY FAR EAST LIMITED	Hong Kong	99.90
PECHINEY (SHANGHAI) WORLD TRADE LTD	China	100.00
PECHINEY HANDELSGESELLSCHAFT m.b.H.	Austria	100.00

9

ALCAN INC.
Subsidiaries, Related Companies, Etc.	Organized Under the Laws of	% of Voting Shares Held by Immediate Owner
PECHINEY HELLAS COMMERCE S.A.	Greece	99.46 (57)
PECHINEY ITALIA SPA	Italy	99.99 (59)
OXIMET SRL	Italy	66.67
PECHINEY JAPON	Japan	100.00
PECHINEY TRADING JAPAN	Japan	100.00
PECHINEY MEXICANA SA de CV	Mexico	99.96
PECHINEY NORGE A/S	Norway	100.00
PECHINEY PORTUGAL, LDA	Portugal	99.87 (66)
PECHINEY SINGAPORE PTE LTD	Singapore	100.00
PECHINEY SOUTHERN AFRICA	South Africa	100.00
PECHINEY SVERIGE AB	Sweden	100.00
PECHINEY TAÏWAN INC.	Taiwan	99.88 (69) (70)
PECHINEY TRADING COMPANY (PTC)	Switzerland	100.00
PECHINEY TRADING FRANCE	France	100.00
PECHINEY VERKOOP B.V.	The Netherlands	100.00
PWT AUSTRALASIA PTY LIMITED	Australia	100.00
SEFRANEX	France	100.00
SATMA	France	100.00
SOCIÉTÉ D'ASSURANCE DE RISQUES INDUSTRIELS - S.A.R.I.	France	99.80 (83) (84)
SOCIÉTÉ D'ENTREPRISES, CARRIÈRES ET MINES DE L'ESTEREL - S.E.C.M.E.	France	100.00
SOCIÉTÉ DE FINANCEMENT POUR AIDER À LA CONVERSION DANS LES BASSINS       D'EMPLOI DE PECHINEY	France	100.00
SOCIÉTÉ DES FONDERIES D'USSEL	France	100.00
SOCIÉTÉ GÉNÉRALE DE RECHERCHES ET D'EXPLOITATIONS MINIÈRES - SOGEREM	France	100.00
UGINA	Morocco	99.92 (98)
PROPACK INTERNATIONAL HOLDINGS LIMITED	Hong Kong	65.00
ALCAN PROPACK CHENGDU CO LTD	China	40.00
EVERWEAL INTERNATIONAL LIMITED	Hong Kong	100.00
HUIZHOU PROPACK PLASTIC LIMITED	China	100.00
JIANGYIN PROPACK ADVANCED PACKING CO., LIMITED	China	100.00
JIANGYIN PROPACK PACKING CO., LIMITED	China	99.05
PROPACK HUIZHOU LIMITED	China	73.47 (76)
PROPACK HUIZHOU NEW MATERIAL CO LTD	China	100.00
VPS BEIJING PROPACK CO., LTD.	China	55.00 (99)
PT INTERKEMAS FLEXIPACK	Indonesia	99.99 (77)
SOCIÉTÉ DES ALUMINES ET BAUXITES DE PROVENCE SARL	France	100.00
THE ROBERVAL AND SAGUENAY RAILWAY COMPANY	Quebec	100.00
UTKAL ALUMINA INTERNATIONAL LIMITED	India	45.00

END-NOTE:  ADDITIONAL OWNERSHIP (%) THROUGH THE FOLLOWING SUBSIDIARIES

(1) AL HOLDING  USA LLC  2.89
(2) ALCAN PACKAGING PHARMACEUTICAL AND PERSONAL CARE INC.  1.73
(3) 9121-5996 QUÉBEC INC.  1.00
(4) BRITISH ALCAN ALUMINIUM plc  15.00
(5) ALCAN ACQUISITION CORPORATION  3.00
(6) ALCAN INC.  10.00
(7) BRITISH ALCAN ALUMINIUM plc  1.00
(8) NEVAMAR TE ACQUISITION CORPORATION  37.69
(9) NEVAMAR OFFSHORE ACQUISITION CORPORATION  2.87
(10) SWISS ALUMINIUM AUSTRALIA LIMITED  50.00
(11) ALCAN HOLDINGS UK LIMITED  27.27
(12) ALCAN HOLDINGS SWITZERLAND AG (SA/LTD.)  0.76
(13) ALCAN HOLDINGS SWITZERLAND AG (SA/LTD.)  17.00
(14) bp EUROPACK S.r.l.  24.00
(15) ALCAN SINGEN GmbH  0.10
(16) SANGTHIEN HOLDING COMPANY LIMITED  25.61

10

(17) ALUMINIUM COMPANY OF MALAYSIA BERHAD  51.00
(18) ALUMINIUM METALL ALMET AG  27.27
(19) SOCIÉTÉ POUR LE DÉVELOPPEMENT DE L'AFRIQUE CENTRALE ET DE L'OUEST - SODAFE  12.65
(20) SOCIÉTÉ POUR LE DÉVELOPPEMENT DE L'AFRIQUE CENTRALE ET DE L'OUEST - - SODAFE  25.00
(21) ALCAN ALUMINIUM QUEBEC AND COMPANY, LIMITED PARTNERSHIP  20.00
(22) PECHINEY  10.00
(23) ALUMINIUM PECHINEY  9.08
(24) PECHINEY RHENALU  1.25
(25) ALUMINIUM PECHINEY  1.00
(26) FINANCIÈRE EUROPÉENNE D'EMBALLAGES PECHINEY  0.64
(27) COMPAGNIE GÉNÉRALE DE PARTICIPATION INDUSTRIELLE ET FINANCIÈRE  0.04
(28) SOR-NORGE ALUMINIUM AS  13.00
(29) COMPANIA ECUATORIANA DE BALSA S.A.  32.07
(30) BRANDEIS (BROKERS) LIMITED  0.01
(31) PECHINEY PACIFIC PTY LIMITED  50.00
(32) PECHINEY  2.06
(33) HOSTELLERIE DE LA SANAGA  0.05
(34) SOCATRAL - SOCIÉTÉ CAMEROUNAISE DE TRANSFORMATION DE L'ALUMINIUM  0.07
(35) ALCAN HOLDINGS FRANCE S.A.  0.50
(36) SOCIÉTÉ POUR LE DÉVELOPPEMENT DE L'AFRIQUE CENTRALE ET DE L'OUEST - SODAFE  25.00
(37) ALCAN HOLDINGS FRANCE S.A.  49.00
(38) CEBAL VERPACKUNGEN GmbH  5.00 
(39) ALCAN HOLDINGS GERMANY GmbH  16.67
(40) PECHINEY  16.67
(41) ÉLECTRIFICATION CHARPENTE LEVAGE - E.C.L.  50.00
(42) ECL SCES AFRICA ENGINEERING   14.29
(43) ALCAN HOLDINGS FRANCE S.A.  20.00
(44) ALCAN DEUTSCHLAND GmbH  20.00
(45) ALMET  1.00
(46) ALUMINIUM PECHINEY  1.00
(47) PECHINEY AVIATUBE  1.00
(48) PECHINEY ÉLECTROMÉTALLURGIE  1.00
(49) GOVE ALUMINIUM LIMITED  30.00
(50) ALUMINIUM PECHINEY  10.00
(51) PECHINEY CORK & SEAL OF CALIFORNIA  0.01
(52) LAWSON MARDON PACKAGING LTD.  1.00
(53) COMPANIA ECUATORIANA DE BALSA S.A.  41.67
(54) BALMANTA S.A.  1.25
(55) PECHINEY HOLDINGS, INC.  44.48
(56) FINANCIÈRE EUROPÉENNE D'EMBALLAGES PECHINEY  20.00
(57) SEFRANEX  0.49
(58) COMPAGNIE GÉNÉRALE DE PARTICIPATION INDUSTRIELLE ET FINANCIÈRE  0.04
(59) PECHINEY A.I.M.  0.01 
(60) COMPAGNIE GÉNÉRALE DE PARTICIPATION INDUSTRIELLE ET FINANCIÈRE  0.04
(61) SOCIÉTÉ MANUFACTURE MAROCAINE DE MOHAMMEDIA - S.M.M.M.  13.45
(62) PECHINEY  37.50
(63) COMPAGNIE GÉNÉRALE DE PARTICIPATION INDUSTRIELLE ET FINANCIÈRE  0.04
(64) FINANCIÈRE EUROPÉENNE D'EMBALLAGES PECHINEY  0.04
(65) COMPAGNIE GÉNÉRALE DE PARTICIPATION INDUSTRIELLE ET FINANCIÈRE  0.04
(66) PECHINEY A.I.M.  0.13 
(67) ALUMINIUM PECHINEY  45.63
(68) PECHINEY CENTRE DE RECHERCHES DE VOREPPE  7.84
(69) PECHINEY JAPON  0.02
(70) PECHINEY FAR EAST LIMITED  0.02
(71) COMPAGNIE GÉNÉRALE DE PARTICIPATION INDUSTRIELLE ET FINANCIÈRE  7.12
(72) BALMANTA S.A.  20.01
(73) COMPANIA ECUATORIANA DE BALSA S.A.  10.03 
(74) PRODPAC, PRODUCTOS DEL PACIFICO S.A.  10.03 
(75) MADERAS SECAS C.A. MASECA  10.03
(76) EVERWEAL INTERNATIONAL LIMITED  23.65 
(77) ALUMINUM COMPANY OF CANADA LIMITED  0.01
(78) COMPAGNIE GÉNÉRALE DE PARTICIPATION INDUSTRIELLE ET FINANCIÈRE  6.00
(79) PECHINEY RESOURCES PTY, LIMITED  20.00 
(80) LAWSON MARDON GROUP INTERNATIONAL LIMITED  5.00
 

11

(81) THIBAULT COLLIN DACHARRY  0.01 
(82) ALUMINIUM PECHINEY  5.44 
(83) FINANCIÈRE EUROPÉENNE D'EMBALLAGES PECHINEY  0.03
(84) COMPAGNIE GÉNÉRALE DE PARTICIPATION INDUSTRIELLE ET FINANCIÈRE  0.03 
(85) COMPAGNIE GÉNÉRALE DE PARTICIPATION INDUSTRIELLE ET FINANCIÈRE  10.00
(86) PECHINEY  10.56
(87) THIBAULT COLLIN DACHARRY  40.00
(88) UGINA  1.95
(89) COMPAGNIE GÉNÉRALE DE PARTICIPATION INDUSTRIELLE ET FINANCIÈRE  0.14 
(90) SOCIÉTÉ POUR LE DÉVELOPPEMENT DE L'AFRIQUE CENTRALE ET DE L'OUEST - SODAFE  25.00
(91) ALCAN INC.  49.90
(92) ALCAN HOLDINGS SWITZERLAND AG (SA/LTD.)  0.62 
(93) HENLOPEN MANUFACTURING CO. INC.  0.50
(94) COPAL SNC  49.00 
(95) COTUPLAS  0.04
(96) CATHJOH HOLDINGS PTY LIMITED  15.50
(97) HENLOPEN MANUFACTURING CO. INC.  0.02 
(98) SOCIÉTÉ GÉNÉRALE DE RECHERCHES ET D'EXPLOITATIONS MINIÈRES - SOGEREM  0.02
(99) ALCAN INC.  20.00

12

EX-24

Exhibit 24.1

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ Roland Berger
Name:	Roland Berger
Title:	Director

Exhibit 24.2

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ L. Denis Desautels
Name:	L. Denis Desautels
Title:	Director

Exhibit 24.3

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ Travis Engen
Name:	Travis Engen
Title:	Director

Exhibit 24.4

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ L. Yves Fortier
Name:	L. Yves Fortier
Title:	Director

Exhibit 24.5

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ Jean-Paul Jacamon
Name:	Jean-Paul Jacamon
Title:	Director

Exhibit 24.6

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ William R. Loomis, Jr.
Name:	William R. Loomis, Jr.
Title:	Director

Exhibit 24.7

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ Yves Mansion
Name:	Yves Mansion
Title:	Director

Exhibit 24.8

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ Christine Morin-Postel
Name:	Christine Morin-Postel
Title:	Director

Exhibit 24.9

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ J. E. Newall
Name:	J. E. Newall
Title:	Director

Exhibit 24.10

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ Guy Saint-Pierre
Name:	Guy Saint-Pierre
Title:	Director

Exhibit 24.11

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ Gerhard Schulmeyer
Name:	Gerhard Schulmeyer
Title:	Director

Exhibit 24.12

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ Paul M. Tellier
Name:	Paul M. Tellier
Title:	Director

Exhibit 24.13

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS

WHEREAS, ALCAN INC., a Canadian corporation (the "Company"), proposes shortly to file with the Securities and Exchange Commission, under the provisions of the Securities Act of 1934 as amended (the "Act"), the Annual Report on Form 10-K pursuant to Section 13 or 15 (d) of the Act.

WHEREAS, the undersigned is an Officer and/or a Director of the Company as indicated below;

NOW, THEREFORE, the undersigned hereby constitutes and appoints R. Millington, D. McAusland and P. Chenard and each of them, as attorneys for the undersigned and in the undersigned's name, place and stead, and in each of the undersigned's offices and capacities as an Officer and/or a Director of the Company, to execute and file such Annual Report on Form 10-K, hereby giving and granting to said attorneys full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises as fully, to all intents and purposes, as the undersigned might or could do if personally present at the doing thereof, hereby ratifying and confirming all that said attorneys may or shall lawfully do, or cause to be done, by virtue hereof.

IN WITNESS WHEREOF, I have hereunto set my hand this 5th day of March 2004.

Signed:	/s/ Milton K. Wong
Name:	Milton K. Wong
Title:	Director

EX-31

CERTIFICATION

I, Travis Engen, President and Chief Executive Officer of Alcan Inc. ("Alcan"), certify that:

1.	I have reviewed this annual report on Form 10-K of Alcan;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
		a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		b)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		c)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
		a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	12 March 2004	/s/ Travis Engen
		Travis Engen
		President and Chief Executive Officer

EX-31

CERTIFICATION

I, Geoffery E. Merszei, Executive Vice President and Chief Financial Officer of Alcan Inc. (''Alcan''), certify that:

1.	I have reviewed this annual report on Form 10-K of Alcan;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
		a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
		b)	Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
		c)	Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
		a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
		b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date:	12 March 2004	/s/ Geoffery E. Merszei
		Geoffery E. Merszei
		Executive Vice President and
		Chief Financial Officer

EX-32

Certification

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Alcan Inc. (the "Company"), hereby certifies, to such officer's knowledge, that the Company's Annual Report on Form 10-K for the quarter ended December 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: 12 March 2004	/s/ Travis Engen
	Travis Engen
	President and Chief Executive Officer

EX-32

Certification

Pursuant to 18 U.S.C. § 1350, the undersigned officer of Alcan Inc. (the "Company"), hereby certifies, to such officer's knowledge, that the Company's Annual Report on Form 10-K for the quarter ended December 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: 12 March 2004	/s/ Geoffery E. Merszei
	Geoffery E. Merszei
	Executive Vice President and
	Chief Financial Officer

EX-99

Alcan Inc.

Notice of Annual Meeting

of Shareholders

22 April 2004

Proxy Circular

Dear Shareholder:

You are cordially invited to attend the 102^nd Annual Meeting of Shareholders of Alcan Inc., which will take place on Thursday, 22 April 2004, in the Auditorium of the Centre Mont-Royal, 2200 Mansfield Street, Montreal, Quebec, Canada at 10:00 a.m.

At the Meeting, the Shareholders will be asked to consider the matters set out in the enclosed Notice of Annual Meeting.

Your vote is important. Please complete, sign and date the form of proxy and return it in the enclosed envelope, whether or not you plan to attend the Meeting. Returning the proxy will not limit your right to vote in person if you attend the Meeting.

The Meeting will be webcast on Alcan's web site (www.alcan.com)

If you have any questions regarding the matters to be dealt with at the Meeting or require additional copies of this material, please call Alcan's transfer agent, CIBC Mellon Trust Company, at

1-800-387-0825 (toll free) or collect at 416-643-5500.

Yours sincerely,

L. Yves Fortier

Chairman of the Board of Alcan Inc.

3 March 2004

Proxy Circular 2004 (i) Alcan Inc.