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Exhibit No. 99.1: Information Statement

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Subject to Completion. Dated September 28, 2004.

PRELIMINARY U.S. INFORMATION STATEMENT

Novelis Inc.

                        Common Shares

       This information statement includes excerpts from the prospectus that we are filing with provincial securities regulatory authorities in Canada to enable us to become a reporting issuer under applicable securities legislation in those provinces in connection with the distribution of our common shares pursuant to Alcan Inc.’s planned capital reorganization. This information statement is identical to the prospectus except for the omission of certain information that is solely required for Canadian regulatory purposes. We refer throughout this information statement to the excerpts of the prospectus as the prospectus. We are filing this information statement with the United States Securities and Exchange Commission, or the SEC, as an exhibit to our registration statement on Form 10 under the Securities Exchange Act of 1934.

      In reviewing this information statement, you should carefully consider the matters described under the caption “Risk Factors” beginning on page 10 of the attached prospectus.

      Neither the United States Securities and Exchange Commission nor any State securities commission has approved or disapproved these securities or determined if this information statement is truthful or complete. Any representation to the contrary is a criminal offense.

      This information statement does not constitute an offer to sell or the solicitation of an offer to buy any securities.

      The date of this information statement is                     , 2004.

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     This is a preliminary non-offering prospectus, a copy of which has been filed with the securities regulatory authorities in each of the provinces of Canada but which has not yet become final. Information contained in this preliminary prospectus may not be complete and may have to be amended.

Subject to Completion. Dated September 28, 2004.

PRELIMINARY NON-OFFERING PROSPECTUS

Novelis Inc.

                   Common Shares

       No securities are being offered or sold pursuant to this prospectus. We are filing this prospectus with provincial securities regulatory authorities in Canada to enable us to become a reporting issuer under applicable securities legislation in those provinces in connection with the distribution of our common shares pursuant to Alcan Inc.’s planned capital reorganization, the steps of which we refer to in this prospectus as the reorganization transactions. We are also filing excerpts of this prospectus with the United States Securities and Exchange Commission, or the SEC, as an exhibit to our registration statement on Form 10 under the Securities Exchange Act of 1934. Since no securities are being sold pursuant to this prospectus, no proceeds will be raised. Expenses in connection with the preparation and filing of this prospectus and the registration statement on Form 10 will be shared by Alcan Inc., or Alcan, from its general funds and us from proceeds of debt we intend to incur in connection with our separation from Alcan.

      The reorganization transactions are subject to, among other things, the approval of Alcan shareholders at a special meeting scheduled for             , 2004. Assuming that Alcan shareholders approve the reorganization transactions, Alcan obtains a final order of a Canadian court of competent jurisdiction approving the arrangement that implements the reorganization transactions, and Alcan’s board of directors subsequently approves the reorganization transactions, we expect that the reorganization transactions will be effective on             and that our common shares will be distributed to holders of Alcan common shares of record as of the close of business on             , 2004, which will be the record date. Alcan shareholders of record will receive             of our common shares for every             common shares of Alcan held on the record date as soon as practicable after the effectiveness of the reorganization transactions. No fractional shares will be issued, and Alcan shareholders will receive cash equal to the fair market value of any fractional shares to which they otherwise would have been entitled. Alcan shareholders will not be required to pay for our common shares to be received by them in the distribution, or to tender or surrender their Alcan common shares in order to receive our common shares or to take any other action in connection with the distribution.

      Alcan is seeking shareholder approval of the reorganization transactions and Alcan’s request for a proxy is being made to Alcan shareholders pursuant to a separate solicitation document. We are not asking you for a proxy and you are requested not to send us one.

      There is no current trading market for our common shares. We intend to apply to list our common shares on the Toronto Stock Exchange under the symbol “   ” and on the New York Stock Exchange under the symbol “   .”

      In reviewing this prospectus, you should carefully consider the matters described under the caption “Risk Factors” beginning on page 10.

      No securities regulatory authority in Canada has expressed an opinion about these securities and it is an offence to claim otherwise. Neither the United States Securities and Exchange Commission nor any State securities commission has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

      This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities.

      Shareholders of Alcan with inquiries related to the reorganization transactions or the distribution should review Alcan’s management proxy circular dated                , 2004.

      The date of this prospectus is                , 2004.

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      In this prospectus, the terms “we”, “our”, “us”, “Group”, “Novelis” and “Novelis Group” refer to Novelis Inc., a company incorporated in Canada under the Canada Business Corporations Act, or CBCA, and the business to be contributed to us by Alcan pursuant to the reorganization transactions.

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ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES

      We are incorporated in Canada under the CBCA. Our registered office as well as a substantial portion of our assets are located outside the United States. Also, some of our directors and officers and some of the experts named in this prospectus reside outside the United States and all or a substantial portion of their assets are located outside the United States. Therefore, it may be difficult for United States shareholders to effect service within the United States upon those persons who are not residents of the United States or to realize in the United States upon judgments of courts of the United States predicated upon the civil liability provisions of the United States federal securities laws. Ogilvy Renault, our Canadian counsel, has advised us that, in their opinion, there is doubt as to the enforceability in Canada against us or against our directors, officers and experts who are not residents of the United States, in original actions or in actions for enforcement of judgments of United States courts, of liabilities predicated solely upon United States federal securities laws.

EXPLANATORY INFORMATION

      We describe in this prospectus the aluminum rolled products businesses to be transferred to us by Alcan pursuant to the reorganization transactions as if they were our businesses for all historical periods described. For further information on our businesses and the reorganization transactions, see “Our Business”. Following the reorganization transactions, we will be an independent public company. Accordingly, our historical financial results as part of Alcan contained in this prospectus may not reflect our financial results in the future as an independent company or what our financial results would have been had we operated the businesses to be transferred to us by Alcan as a stand-alone company during the periods presented.

      The financial information contained in this prospectus is presented in accordance with United States Generally Accepted Accounting Principles, or U.S. GAAP, unless otherwise indicated. All figures are unaudited unless otherwise indicated. All dollar figures are in U.S. dollars unless otherwise indicated.

      We prepare our financial statements in U.S. dollars. The following table sets forth exchange rate information expressed in terms of Canadian dollars at the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York for US$1.00. You should note the rates set forth below may differ from the actual rates used in our accounting processes and in the preparation of our combined financial statements.

      Throughout this prospectus, we refer to the products we manufacture as aluminum rolled products. This term is synonymous with the terms “flat rolled products” and “FRP” commonly used by manufacturers and third-party analysts in our industry.

      All tonnages are stated in metric tonnes. One metric tonne is equivalent to 2,204.6 pounds. One kilotonne, or kt, is 1,000 metric tonnes.

      Throughout this prospectus, references to our shipment totals, results of operations and cash flows prior to January 1, 2004 do not include production from the Pechiney facilities to be transferred to us by Alcan.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS AND MARKET DATA

      This prospectus contains forward-looking statements that are based on current expectations, estimates, forecasts and projections about the industry in which we operate and beliefs and assumptions made by our management. Such statements include, in particular, statements about our plans, strategies and prospects under the headings “Summary,” “Risk Factors,” “Our Business” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Words such as “expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “estimate,” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve assumptions and risks and uncertainties that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed, implied or forecasted in such forward-looking statements. We do not intend, and we disclaim any obligation, to update any forward-looking statements after we distribute this prospectus, whether as a result of new information, future events or otherwise.

      This prospectus contains information concerning our markets and products generally which is forward-looking in nature and is based on a variety of assumptions regarding the ways in which these markets and product categories will develop. These assumptions have been derived from information currently available to us and to the third-party industry analysts, including CRU International Limited, or CRU, quoted herein. This information includes, but is not limited to, data concerning production capacity, product shipments and share of production. Actual market results may differ from those predicted. While we do not know what impact any of these differences may have on our business, our results of operations, financial condition and the market price of our common shares may be materially adversely affected. Factors that could cause actual results or outcomes to differ from the results expressed or implied by forward-looking statements include, among other things:

      We caution you that the above list of factors is not exclusive. Some of these and other factors are discussed in more detail under “Risk Factors” in this prospectus. These forward-looking statements are made as of the date of this prospectus.

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RISK FACTORS

      You should carefully consider the following risk factors and all the other information contained in this prospectus in evaluating us and our common shares.

Risks related to our separation from Alcan

      Prior to the reorganization transactions, our business was operated by Alcan primarily within two business groups of its broader corporate organization rather than as a stand-alone company. Alcan performed various corporate functions for us, including, but not limited to, the following:

      Following the separation, Alcan will have no obligation to provide these functions to us other than the transitional services that will be provided by Alcan and that are described in “Arrangements Between Novelis and Alcan — Transitional services agreement.”

      If we do not have in place our own systems and business functions, we do not have agreements with other providers of these services or we are not able to make these changes cost effectively, once our transitional services agreement with Alcan expires, we may not be able to operate our business effectively and our profitability may decline. If Alcan does not continue to perform the transitional services it has agreed to provide to us effectively, we may not be able to operate our business effectively after the separation.

      Historically we have benefited from Alcan’s size and purchasing power in procuring goods, technology and services. Although we expect to enter into group purchasing arrangements for certain goods and services with Alcan, we may be unable to obtain goods, technology and services as a separate, stand-alone company, at prices and on terms as favourable as those available to us prior to the separation and we may not have access to financial and other resources comparable to those available to us prior to the separation.

                  Following the separation, the level of our indebtedness, which will be relatively higher than that of Alcan, will subject us to various restrictions, result in higher interest costs and potentially limit our financial flexibility.

      Concurrently with the effectiveness of the reorganization transactions, we expect to assume or incur an aggregate of approximately $2.8 billion of debt. A portion of this indebtedness will be used to repay intercompany indebtedness owed to Alcan. This indebtedness will be governed by instruments which we expect will impose a number of restrictions and covenants on us which could limit our strategic alternatives or our ability to respond to market conditions or take advantage of business opportunities. We also expect to enter into revolving credit facilities that will be available for operating working capital and other requirements. These credit facilities are expected to be in the aggregate amount of $500 million. Any additional debt we incur in the future could impose further limits on us, increase our interest expense and reduce our profitability.

      A deterioration of our financial position or a credit rating downgrade following the separation could increase our borrowing costs or have an adverse effect on our business relationships. We intend, from time to time, to enter into various forms of hedging activities against currency or metal price fluctuations and to

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                  Our agreements with Alcan may not reflect what two unaffiliated parties might have agreed to.

      The allocation of assets, liabilities, rights, indemnifications and other obligations between Alcan and us under the separation and ancillary agreements we will enter into with Alcan may not reflect what two unaffiliated parties might have agreed to.

                  As a separate company, we will have supply agreements with Alcan for a portion of our raw materials requirements. If Alcan is unable to deliver sufficient quantities of these materials or if it terminates these agreements, our ability to manufacture products on a timely basis could be adversely affected.

      The manufacture of our products requires sheet ingot that has historically been, in part, supplied by Alcan. In 2003, we purchased the majority of our third party sheet ingot requirements from Alcan’s primary metal group. We will enter into a metal supply agreement with Alcan upon terms and conditions substantially similar to market terms and conditions for the continued purchase of sheet ingot from Alcan. If Alcan is unable to deliver sufficient quantities of this material on a timely basis or if Alcan terminates the agreement, our production may be disrupted and our sales and profitability could be materially adversely affected. Although aluminum is traded on the world markets, developing alternative suppliers for that portion of our raw material requirements we expect to be supplied by Alcan could be time consuming and expensive.

      Our continuous casting operations at our Saguenay Works, Canada facility depend upon a local supply of molten aluminum from Alcan. In 2003, Alcan’s primary metal group supplied 162 kilotonnes of such material to us, representing all of the molten aluminum used at Saguenay Works in 2003. We will enter into a metal supply agreement with Alcan upon terms and conditions substantially similar to market terms and conditions for the continued purchase of molten aluminum from Alcan. If this supply were to be disrupted, our Saguenay Works production could be interrupted and our sales and profitability materially adversely affected.

                  We may lose key rights if a change in control of our voting shares were to occur.

      Our separation agreement with Alcan will provide that if we experience a change in control within five years of the date of separation and the entity acquiring control does not assume our agreement with Alcan not to compete in the plate and aerospace markets, Alcan may terminate any or all of certain agreements we have with it. The termination of any of these agreements could deprive us of key services, resources or rights necessary to the conduct of our business. Replacement of these assets could be difficult or impossible, resulting in a material adverse effect on our business operations, sales and profitability. In addition, the potential termination of these agreements could prevent us from entering into future business transactions such as acquisitions or joint ventures at terms favourable to us or at all.

                  We could incur significant tax liability, or be liable to Alcan, if certain transactions occur which violate tax-free spin-off rules.

      Under Section 55 of the Income Tax Act (Canada), we and/or Alcan will recognize a taxable gain on our spin-off from Alcan if (1) within three years of our spin-off from Alcan, we engage in a subsequent spin-off or split-up transaction under Section 55, (2) a shareholder who (together with non-arm’s length persons and certain other persons) owns 10% or more of our common shares or Alcan common shares, disposes to a person unrelated to such shareholder of any such shares (or property that derives 10% or more of its value from such shares or property substituted therefor) as part of the series of transactions which includes our spin-off from Alcan, (3) there is a change of control of us or of Alcan that is part of the series of transactions that includes our spin-off from Alcan or (4) we sell to a person unrelated to us

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      Our U.S. subsidiary will also agree under a tax sharing and disaffiliation agreement to certain restrictions that are intended to preserve the tax-free status of the reorganization transactions in the United States for United States federal income tax purposes, and that will, among other things, limit our U.S. subsidiary’s ability to issue or sell stock or other equity-related securities, to sell its assets outside the ordinary course of business, and to enter into any other corporate transaction that would result in a person acquiring, directly or indirectly, a majority of our U.S. subsidiary, including an interest in our U.S. subsidiary through holding our shares. If we breach any of these covenants, we generally will be required to indemnify Alcan Corporation, the holding company of Alcan’s U.S. operations, against the United States federal income tax resulting from a failure of the reorganization transactions in the United States to be tax-free for United States federal income tax purposes.

      These potential liabilities could prevent us from entering into business transactions at favourable terms to us or at all.

      We and Alcan have each agreed to indemnify the other for certain liabilities and obligations related to, in the case of our indemnity, the business transferred to us, and in the case of Alcan’s indemnity, the business retained by Alcan. These indemnification obligations could be significant. We cannot determine whether we will have to indemnify Alcan for any substantial obligations after the distribution. We also cannot assure you that if Alcan has to indemnify us for any substantial obligations, Alcan will be able to satisfy those obligations.

      The process for resolving competing business interests will fundamentally change as a result of our separation from Alcan. A number of our commercial arrangements with Alcan that existed prior to the reorganization transactions, our separation arrangements and our post-separation commercial agreements with Alcan could be the subject of differing interpretation and disagreement and could affect our relationship with Alcan and ultimately harm our business operations.

      We have agreed not to compete with Alcan for a period of five years in the production and sale of certain products for use in the plate and aerospace markets. As a result, it may be more difficult for us to pursue successfully new business opportunities which could limit our potential sources of revenue and growth. Please see “Arrangements Between Novelis and Alcan — Separation agreement”.

      The historical financial information we have included in this prospectus has been derived from Alcan’s consolidated financial statements and does not necessarily reflect what our results of operations, financial position or cash flows would have been had we been an independent company during the periods presented. For this reason, as well as the inherent uncertainties of our business, the historical financial

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      Although our pro forma adjustments reflect changes that we expect will occur in our capital and cost structure as a result of our separation from Alcan, given the inherent uncertainties of our business and the separation process they do not necessarily indicate the actual changes in capital and cost structure we may incur as a publicly traded, independent company.

      We have previously marketed our products under the Alcan name which has a strong reputation within the markets we serve. Following the separation, we will adopt new trademarks and trade names to reflect our new company name. Although we plan to engage in significant marketing activities and intend to spend significant amounts of time and resources to develop a new brand identity, potential customers, business partners and investors generally may not associate Alcan’s reputation and expertise with our products and services. Furthermore, our name change also may cause difficulties in recruiting qualified personnel. We cannot predict the impact, if any, of the change in trademarks and trade names on our financial results.

      We are in the process of creating our own, or engaging third parties to provide, information technology infrastructure and systems to support our critical business functions, including accounting and reporting, in order to replace many of the systems Alcan currently provides to us. We may incur temporary interruptions in business operations if we cannot transition effectively from Alcan’s existing operating systems, databases and programming languages that support these functions to our own systems. Our failure to implement the new systems and transition our data successfully and cost-effectively could disrupt our business operations and have a material adverse effect on our profitability. In addition, our costs for the operation of these systems may be higher than the amounts reflected in our historical combined financial statements.

Risks related to our business and the market environment

      Our ten largest customers accounted for approximately 39% of our shipments in 2003. A significant downturn in the business or financial condition of our significant customers could materially adversely affect our results of operations. In addition, if our existing relationships with significant customers materially deteriorate or are terminated in the future, and we are not successful in replacing business lost from such customers, our results of operations could be adversely affected. Some of the longer term contracts under which we supply our customers, including under umbrella agreements such as those described under “Our Business — Our customers”, are subject to renewal, renegotiation or re-pricing at periodic intervals or upon changes in competitive supply conditions. Our failure to successfully renew, renegotiate or re-price such agreements could result in a reduction or loss in customer purchase volume or revenue, and if we are not successful in replacing business lost from such customers, our results of operations could be adversely affected. The markets in which we operate are competitive and customers may seek to consolidate supplier relationships or change suppliers to accrue cost savings and other benefits.

      Prices for the raw materials we require are subject to continuous volatility and may increase from time to time. Although our sales are generally made on a “margin over metal price”, if prices do increase,

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      We consume substantial amounts of energy in our rolling operations, our cast house operations and our Brazilian smelting operations. The factors that affect our energy costs and supply reliability tend to be specific to each of our facilities. A number of factors could materially adversely affect our energy position including:

      If energy costs were to rise, or if energy supplies or supply arrangements were disrupted, our profitability could decline.

      Although historically our cash flow from operations has been sufficient to satisfy working capital, capital expenditure and research and development requirements, in the future we may need to incur additional debt or issue equity in order to fund these requirements as well as to make acquisitions and other investments. To the extent we are unable to raise new capital, we may be unable to increase our manufacturing capability, improve our technology or address any gaps in our product offerings. If we raise funds through the issuance of debt or equity, any debt securities or preferred shares issued will have rights and preferences and privileges senior to those of holders of our common shares. The terms of the debt securities may impose restrictions on our operations that have an adverse impact on our financial condition. If we raise funds through the issuance of equity, this issuance would dilute your ownership of us.

      Our businesses and operations are exposed to the effects of changes in the exchange rates of the U.S. dollar, the euro, the British pound, the Brazilian real, the Canadian dollar, the Korean won and other currencies. Currency risk management for our business has historically been considered within Alcan’s overall treasury operations. As part of this strategy, Alcan has used financial instruments to reduce its exposure to adverse movements in currency exchange rates. As an independent company, we plan to implement a hedging policy that will attempt to manage currency exchange rate risks to an acceptable level based on our management’s judgment of the appropriate trade-off between risk, opportunity and cost; however, this hedging policy may not successfully or completely eliminate the effects of currency exchange rate fluctuations which could have a material adverse effect on our financial results.

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      We prepare our combined financial statements in U.S. dollars, but a portion of our earnings and expenditures are denominated in other currencies, primarily the euro, the Korean won and the Brazilian real. Changes in exchange rates will result in increases or decreases in our reported costs and earnings, and may also affect the book value of our assets located outside the United States and the amount of our equity.

      Because primary aluminum and aluminum recyclables represent between 45% and 80% of the cost of our rolled products and these input materials are purchased based upon LME aluminum trading prices denominated in U.S. dollars, and because we generally sell our rolled products on a “margin over metal” price, increases in the relative value of the U.S. dollar against the local currency in which sales are made can make aluminum rolled products less attractive to our customers than substitute materials, such as steel or glass, whose manufacturing costs may be more closely linked to the local currency, which in turn could have a material adverse effect on our financial results.

      Approximately two-thirds of our hourly-paid employees are represented by labour unions under a large number of collective bargaining agreements. We may not be able to satisfactorily renegotiate our collective bargaining agreements when they expire. In addition, existing collective bargaining agreements may not prevent a strike or work stoppage at our facilities in the future, and any such work stoppage could have a material adverse effect on our financial results.

      We are and will continue to be exposed to financial, political, economic and business risks in connection with our worldwide operations. We have made investments and carry on production and marketing activities in various emerging markets, including Brazil, Korea, China and certain other countries in Asia. While we anticipate higher growth or attractive production opportunities from these emerging markets, they also present a higher degree of risk than more developed markets. In addition to the business risks inherent in developing and servicing new markets, economic conditions may be more volatile, legal and regulatory systems less developed and predictable, and the possibility of various types of adverse governmental action more pronounced. Unexpected or uncontrollable events or circumstances in these markets could have a material adverse effect on our financial results.

      Factors in the politically and economically diverse countries in which we operate, including inflation, fluctuations in currency and interest rates, competitive factors, civil unrest and labour problems, could affect our revenues, expenses and results of operations. Our operations could also be adversely affected by acts of war, terrorism or the threat of any of these events as well as government actions such as controls on imports, exports and prices, new forms of taxation, and increased government regulation in the countries in which we operate or service customers.

      Breakdown of equipment or other events, including catastrophic events such as war or natural disasters, leading to production interruptions in our plants could lead to financial losses. Reduced production, itself, could result in reduced revenues. Further, because many of our customers are, to varying degrees, dependent on planned deliveries from our plants, customers that have to reschedule their own production due to our missed deliveries, could pursue financial claims against us. We may incur costs to correct any of these problems, in addition to facing claims from customers. Further, our reputation among actual and potential customers may be harmed, potentially resulting in a loss of business. While we

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      We have invested in and are involved with a number of technology and process initiatives. Several technical aspects of these initiatives are still unproven and the eventual commercial outcomes cannot be assessed with any certainty. Even if we are successful with these initiatives, we may not be able to deploy them in a timely fashion. Accordingly, the costs and benefits from our investments in new technologies and the consequent effects on our financial results may vary from present expectations.

      We depend on our senior executive officers and other key personnel to run our business. The loss of any of these officers or other key personnel could materially adversely affect our operations. Competition for qualified employees among companies that rely heavily on engineering and technology is intense, and the loss of qualified employees or an inability to attract, retain and motivate additional highly skilled employees required for the operation and expansion of our business could hinder our ability to improve manufacturing operations, conduct research activities successfully and develop marketable products.

      Although we attempt to protect our proprietary technology and processes and other intellectual property through patents, trademarks, trade secrets, copyrights, confidentiality and nondisclosure agreements and other measures, these measures may not be adequate to protect our intellectual property. Because of differences in intellectual property laws throughout the world, our intellectual property may be substantially less protected in various international markets than it is in the United States and Canada. Failure on our part to adequately protect our intellectual property may materially adversely affect our financial results. Furthermore, we may be subject to claims that our technology infringes the intellectual property rights of another. Even if without merit, those claims could result in costly and prolonged litigation, diversion of management’s attention and could materially adversely affect our business. In addition, we may be required to enter into licensing agreements in order to continue using technology that is important to our business. However, we may be unable to obtain license agreements on terms that are acceptable to us or at all.

      We have grown partly through the acquisition of other businesses including businesses acquired by Alcan through the Alusuisse Group Ltd. and Pechiney acquisitions. As part of our strategy for growth, we may continue to make acquisitions, divestitures or strategic alliances, which may not be completed or may not be ultimately beneficial to us. There are numerous risks commonly encountered in business combinations, including the risk that we may not be able to complete a transaction that has been announced, effectively integrate businesses acquired or generate the cost savings and synergies anticipated. Failure to do so could have a material adverse effect on our financial results.

      Most of our pension obligations relate to funded defined benefit pension plans for our employees in the United States and in Brazil (which was terminated in June 2004), unfunded pension benefits in

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      If the assets of our pension plans do not achieve expected investment returns for any fiscal year, such deficiency could result in one or more charges against earnings. In addition, changing economic conditions, poor pension investment returns or other factors may require us to make unexpected cash contributions to the pension plans in the future, preventing the use of such cash for other purposes.

      Our results of operations or liquidity in a particular period could be affected by adverse legal proceedings or investigations, including environmental, product liability, health and safety and other claims, as well as commercial or contractual disputes with suppliers or customers.

Risks related to our industry

      Generally, the markets in which we operate are highly competitive. We compete primarily on the basis of our value proposition, including price, product quality, the ability to meet customers’ specifications, range of products offered, lead times, technical support and customer service. Some of our competitors may benefit from greater capital resources, have more efficient technologies, or have lower raw material and energy costs and may be able to sustain longer periods of price competition.

      In addition, our competitive position within the global aluminum rolled products industry may be affected by, among other things, the recent trend toward consolidation among our competitors, exchange rate fluctuations that may make our products less competitive in relation to the products of companies based in other countries, despite the U.S. dollar based input cost and the marginal costs of shipping, and economies of scale in purchasing, production and sales, which accrue to some of our competitors.

      Increased competition could cause a reduction in our shipment volumes and profitability or increase our expenditures, any one of which could have a material adverse effect on our financial results.

      The end-use markets for certain aluminum rolled products are highly competitive. Aluminum competes with other materials, such as steel, plastics and glass, among others, for various applications, including in the beverage/food cans and automotive end-use markets. In the past, customers have demonstrated a willingness to substitute aluminum for other materials. The willingness of customers to accept substitutes for aluminum products could have a material adverse effect on our financial results.

      Certain end-use markets for aluminum rolled products, such as the construction and industrial and transportation markets, experience demand cycles that are highly correlated to the general economic environment, which is sensitive to a number of factors outside our control. A recession or a slowing of the economy in any of the geographic segments in which we operate, including China where a significant portion of economic growth is expected, or a decrease in manufacturing activity in industries such as automotive, construction and packaging and consumer goods, could have an adverse effect on our results of

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      The construction industry and the consumption of beer and soda are sensitive to climatic conditions and as a result, demand for aluminum rolled products in the construction industry and for can feedstock is seasonal. Our quarterly financial results could fluctuate as a result of climatic changes, and a prolonged series of cold summers in the different areas in which we conduct our business could have a material adverse effect on our financial results.

      We are subject to a broad range of environmental laws and regulations in the jurisdictions in which we operate. These laws and regulations impose increasingly stringent environmental protection standards and permitting requirements 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 laws and regulations, including participation in assessments and remediation of sites and installation of pollution control facilities, have been and 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, we are involved in a number of compliance efforts, remediation activities and legal proceedings concerning environmental matters. We have established reserves for environmental remediation activities and liabilities where appropriate. However, environmental matters cannot be predicted with certainty, and these amounts may not be adequate, especially in light of potential changes in environmental conditions, changing interpretations of laws and regulations by regulators and courts, the discovery of previously unknown environmental conditions, the risk of governmental orders to carry out additional compliance on certain sites not initially included in remediation in progress, our potential liability to remediate sites for which provisions have not been previously established and the adoption of more stringent environmental laws. Such future developments could result in increased environmental costs and liabilities that could have a material adverse effect on our financial results.

      Some of our current and potential operations are located or could be located in or near communities that may regard such operations as having a detrimental effect on their social and economic circumstances. Should this occur, the consequences of such a development may have a material adverse impact upon the profitability or, in extreme cases, the viability of an operation. In addition, such developments may adversely affect our ability to expand or enter into new operations in such location or elsewhere.

      We use a variety of hazardous materials and chemicals in our rolling processes, as well as in our smelting operations in Brazil and in connection with maintenance work on our manufacturing facilities. In the event that any of these substances or related residues proves to be toxic, we may be liable for certain costs, including, among others, costs for health-related claims or removal or retreatment of such substances. Such costs could be significant and have a material adverse effect on our financial results.

Risks related to ownership of our common shares

      Prior to the separation, there will have been no trading market for our common shares. We cannot predict the extent to which investors’ interest will lead to a liquid trading market or whether the market price of our shares will be volatile. Furthermore, the combined trading prices of our shares and Alcan

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      The market price of our common shares could fluctuate significantly for many reasons, including for reasons unrelated to our specific performance, such as reports by industry analysts, investor perceptions, or negative announcements by our customers, competitors or suppliers regarding their own performance, as well as general economic and industry conditions. For example, to the extent that other large companies within our industry experience declines in their stock price, our share price may decline as well. In addition, when the market price of a company’s shares drops significantly, shareholders often institute securities class action lawsuits against the company.

      A lawsuit against us could cause us to incur substantial costs and could divert the time and attention of our management and other resources.

      Any sales of substantial amounts of our common shares in the public market or the exercise of significant amounts of options or the perception that such sales or exercise might occur, whether as a result of the separation or otherwise, may cause the market price of our common shares to decline. Upon completion of the separation, we will have outstanding an aggregate of approximately                 common shares based upon the shares of Alcan common shares outstanding on                , assuming no exercise of options.

      Distributions to shareholders whose investment profile may not be consistent with our investment profile may lead to sales of our common shares or a perception that such sales may occur, either of which could have a material adverse effect on the market for and market price of our common shares.

      If any of the events described under “— Risks related to our separation from Alcan — We could incur significant tax liability, or be liable to Alcan, if certain transactions occur which violate tax-free spin-off rules” were to occur and cause the spin-off to be taxable to Alcan, we would be required to indemnify Alcan for the resulting tax. This indemnity obligation, or our potential tax liability, might discourage, delay or prevent a change of control that you may consider favourable.

      The rights of Alcan to terminate certain of our agreements in circumstances described under “ — Risks related to our separation from Alcan — We may lose key rights if a change of control of our voting shares were to occur” also might discourage, delay or prevent a change of control that you may consider favourable.

      Our shareholder rights plan, which will be in effect after the separation, also may discourage, delay or prevent a merger or other change of control that shareholders may consider favourable.

      Please see “Arrangements Between Novelis and Alcan” and “Description of Our Share Capital” for a more detailed description of these agreements and provisions.

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OUR BUSINESS

      We are the world’s leading aluminum rolled products producer, with total aluminum rolled products shipments of approximately 2,478 kilotonnes in 2003. In 2003, we were the largest aluminum rolled products producer in terms of shipments in each of Europe, Asia-Pacific and South America, and the second largest in North America. With operations on four continents comprised of 38 operating facilities in 12 countries, we are the only company of our size and scope focused solely on aluminum rolled products markets and capable of local supply of technically sophisticated products in all of these geographic regions. We had sales and operating revenues of $6.2 billion in 2003.

Our history

      We are a Canadian corporation formed on September 21, 2004 to acquire and independently carry on most of the aluminum rolled products businesses operated by Alcan. We will be comprised of the majority of Alcan’s rolled products assets, together with some of Alcan’s alumina and primary metal-related assets in Brazil. These assets will be transferred to us as part of the reorganization transactions.

      The general terms and conditions relating to the reorganization transactions are set out in a separation agreement between us and Alcan, described below under “Arrangements Between Novelis and Alcan — Separation agreement”.

      We inherited our processes, structure, and values from Alcan. In 1902, the Canadian subsidiary of the Pittsburgh Reduction Company (later Alcoa Inc., or Alcoa) was first chartered as Northern Aluminum Company, Limited. When Alcoa divested most of its interests outside the United States in 1928, Alcan was formed as a separate company from Alcoa to assume control of most of these interests. In the following years, Alcan expanded globally building or acquiring hydroelectric power, smelting, packaging and fabricated product facilities currently run by approximately 88,000 employees in 63 countries.

      The first Alcan rolling operation began in September 1916 in Toronto, Canada, with an 84-inch hot mill and three finishing mills. Many of our mills were originally constructed by Alcan, including many among the largest aluminum rolling operations in each of the geographic regions in which we operate including:

      More recent expansion has been through acquisitions and modernization of existing mills, including Alcan’s acquisition of an interest in the Logan, Kentucky facility, which is dedicated to the production of can stock, from Arco Aluminum, or Arco, in 1985, our investment in a new production line at Logan which increased our share of production from 40% to 63%, as well as the purchase of a majority ownership interest in the Yeongju and Ulsan facilities in Korea in 1999 and 2000, respectively. Alcan’s acquisition of Alusuisse Group Ltd. in 2000 and Pechiney in 2003 provided us with additional sheet and foil rolling facilities.

Our industry

      The aluminum rolled products market represents the supply of and demand for aluminum sheet, plate and foil produced either from sheet ingot or continuously cast roll-stock in rolling mills operated by independent aluminum rolled products producers and integrated aluminum companies alike. According to CRU, worldwide aluminum rolled products consumption in 2003 were approximately 13,679 kilotonnes,

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      The figure below illustrates the aluminum production chain. The grey area represents the portion of the chain in which we mainly operate, while the area surrounded by a dashed line represents the operations of a typical vertically integrated aluminum company such as Alcan or Alcoa.

      Aluminum rolled products are semi-finished aluminum products that constitute the raw material for the manufacture of finished goods ranging from automotive body panels to household foil. There are two major types of manufacturing processes for aluminum rolled products differing mainly in the process used to achieve the initial stage of processing:

      Both processes require subsequent rolling, which we call cold rolling, and finishing steps such as annealing, coating, leveling or slitting to achieve the desired thicknesses and metal properties. Most customers receive shipments in the form of aluminum coil, a large roll of metal, which can be fed into their fabrication processes.

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      The figure below illustrates the rolled aluminum process flow.

      There are two sources of input material: primary aluminum, such as molten metal, re-melt ingot and sheet ingot, and recycled aluminum, such as recycled process material, used beverage cans and other post-consumer aluminum.

      Primary aluminum can generally be purchased at prices set on the LME, plus a premium that varies by geographic region of delivery, form (ingot or molten metal) and alloy.

      Recycled aluminum is also an important source of input material. Aluminum is infinitely recyclable and recycling it requires approximately 5% of the energy needed to produce primary aluminum. As a result, in regions where aluminum is widely used, manufacturers are active in setting up collection processes where used beverage cans and other recyclable aluminum are collected for re-melting at purpose-built plants. Manufacturers may also enter into agreements with customers who send back recyclable material from their fabrication process, which we refer to as recycled process material, and pay to have it re-melted and rolled into the same product again.

      The market for aluminum rolled products tends to be less subject to demand cyclicality than the market for primary aluminum which is affected by commodity price cyclicality. A significant share of total aluminum rolled products that are produced is used in consumer staples, which have historically experienced relatively stable demand characteristics. In addition, most aluminum rolled products are priced in two components: a pass-through aluminum price component based on the LME quotation and local market premia, plus a “margin over metal” or conversion charge based on the cost to roll the product. As a result, most of the raw material price risk is absorbed by the customer. Aluminum rolling companies also use recycled aluminum which provides sourcing flexibility for, and reduces the volatility of, input material. These three factors combine to create an industry that has lower cyclicality than the primary aluminum industry.

      There has been a long term industry trend towards lighter gauge (thinner) rolled products, which we refer to as downgauging, where customers request products with similar properties using less metal in order to reduce costs and weight. For example, aluminum rolled products producers and can fabricators have

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      Aluminum rolled products companies produce and sell a wide range of aluminum rolled products, which can be grouped into four end-use markets based upon similarities in end-use applications: construction and industrial, beverage/food cans, foil products and transportation. Within each end-use market, aluminum rolled products are manufactured with a variety of alloy mixtures, a range of tempers (hardness), thicknesses (gauge) and widths, and various coatings and finishes. Large customers typically have customized needs resulting in the development of close relationships with their supplying mills and close technical development relationships.

      The table below sets forth market information for the four broad end-use markets.

      Construction is the largest application within this end-use market in terms of shipments. Aluminum rolled products developed for the construction industry are often decorative, offer insulating properties, are durable and corrosion resistant, and have a high strength-to-weight ratio. Aluminum siding, gutters, and downspouts comprise a significant amount of construction volume. Other applications include doors, windows, awnings and canopies.

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      Aluminum’s ability to conduct electricity and heat and to offer corrosion resistance makes it useful in a wide variety of electronic and industrial applications. Industrial applications include electronics and communications equipment, process and electrical machinery and lighting fixtures. Uses of aluminum rolled products in consumer durables include microwaves, coffee makers, flat screen televisions, air conditioners (which use finstock in heat exchangers), pleasure boats and cooking utensils.

      Another industrial application is lithographic sheet. Print shops, printing houses and publishing groups use lithographic sheet to print books, magazines, newspapers and promotional literature. In order to meet the strict quality requirements of the end-users, lithographic sheet must meet demanding metallurgical, surface and flatness specifications.

      Beverage cans are the largest aluminum rolled products application, accounting for approximately a quarter of worldwide shipments in 2003, based on CRU information. The recyclability of aluminum cans enables them to be used, collected, melted, and returned to the original product form many times, unlike steel, paper or polyethylene terephthalate plastic, or PET plastic, which are materials that deteriorate with every iteration. Aluminum beverage cans also offer advantages in fabricating efficiency and shelf life. Fabricators are able to produce and fill beverage cans at very high speeds, and non-porous aluminum cans provide longer shelf life than PET plastic containers. Aluminum cans are light, stackable and use space efficiently, making them convenient and cost efficient to ship.

      Due to the downgauging trend, the weight of an aluminum can has declined on average by 0.4% per year from 2001 to 2003. Downgauging and changes in can design help to reduce total costs on a per can basis and contribute to making aluminum more competitive with substitute materials.

      Beverage can sheet is sold in coil form for the production of can body, ends and tabs. The material can be ordered as rolled, degreased, pre-lubricated, pre-treated and/or lacquered. Typically, can makers define their own specifications for material to be delivered in terms of alloy, gauge, width, and surface finish.

      Other applications in this end-use market include food cans and screw caps for the beverage industry.

      Aluminum, because of its relatively light weight, recyclability and formability, has a wide variety of uses in packaging. Converter foil is very thin aluminum foil, plain or printed, that is typically laminated to plastic or paper to form an internal seal for a variety of packaging applications including juice boxes, pharmaceuticals, food pouches and lid stock. Customers order coils of converter foil in a range of thicknesses from 6 microns to 60 microns.

      Household foil includes home and institutional aluminum foil wrap, sold as a branded or generic product. Known in the industry as packaging foil, it is manufactured in thicknesses from 11 microns to 23 microns. Container foil is used to produce semi-rigid containers such as pie plates and take-out food trays and is usually ordered in a range of thicknesses from 60 microns to 200 microns.

      Currently, the largest application for aluminum rolled products in trucks and automobiles is in heat exchangers such as radiators and air conditioners. Original equipment manufacturers also use aluminum sheet with specially treated surfaces and other specific properties for interior and exterior applications. Newly developed alloys are being used in transportation tanks and rigid containers and allow for safer and more economical transportation of hazardous and corrosive goods.

      There has been recent growth in the use of aluminum rolled products in automotive body panel applications, including hoods, deck lids, fenders and lift gates. These uses typically result from co-operative efforts between aluminum rolled products manufacturers and their customers that yield tailor-made

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      Based on CRU information, in 2003, approximately 10% of the global shipments for the transportation end-use market was directed towards aerospace applications, a segment of the transportation market in which we do not compete. Aerospace-related consumption of aluminum rolled products in 2003, including for aircraft skin and airframe, was 153 kilotonnes, or 1.1% of the total aluminum rolled products market shipments, a decrease from a high of 227 kilotonnes, or 1.7% of the total aluminum rolled products market shipments, in 2000 due to a lower volume of commercial aircraft production.

      Aluminum is also used in the construction of ships’ hulls and superstructures and passenger rail cars because of its strength, light weight, formability and corrosion resistance.

      The aluminum rolled products industry is characterized by economies of scale, significant capital investments required to achieve and maintain technological requirements, and demanding customer qualification standards. The service and efficiency demands of large customers have encouraged consolidation among suppliers of aluminum rolled products. To overcome these obstacles in small but growing markets, established Western companies have entered into joint-ventures with local companies to provide necessary product and process know-how and capital.

      Based on CRU information, the top four aluminum rolled products producers together represented 47% of the global shipments in 2003. Alcoa and Norsk Hydro A.S.A., or Hydro are integrated aluminum companies with operations that range from bauxite mining, alumina refining, primary metal smelting to the manufacture of cast, rolled and extruded products that are supplied to end-users or further enhanced by their in-house engineered products and packaging businesses. Alcan acquired Pechiney, an integrated aluminum company, in December 2003. As part of the reorganization transactions, Alcan will transfer to us certain of Pechiney’s rolling assets, and will retain selected rolling assets to support its continuing involvement in the plate and aerospace markets, to support its engineered products business group and to satisfy certain regulatory requirements related to its acquisition of Pechiney.

Global Aluminum Rolled Products Shipments for 2003

      Based on CRU information, the global market for aluminum rolled products has grown on average at a rate of 3.3% per year from 2001 to 2003. A sluggish economy impacted demand in North America, while currency devaluations caused a temporary decline in South America as a result of weak demand and

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      The table below sets forth market size information by geographic region.

Source: CRU, The Aluminium Flat Rolled Products Quarterly Market Service (May 2004).

      While our customers tend to be increasingly global, many aluminum rolled products tend to be produced and sold on a regional basis. The regional nature of the markets is influenced in part by the fact that not all mills are equipped to produce all types of aluminum rolled products. For instance, only a few mills in Europe, a few mills in Asia, and one mill in South America, our Pindamonhangaba, or Pinda, facility, produce beverage can body and end stock. In addition, individual aluminum rolling mills generally supply a limited range of end-use applications, and try to maximize profits by producing high volumes of the highest margin mix given available capacity and equipment capabilities.

      Certain multi-purpose common alloy and plate rolled products are imported into Europe and North America from producers in emerging markets, such as Brazil, Africa, Russia and China. However, at this time these producers are generally unable to meet the quality requirements, lead times and specifications of customers for more demanding applications. In addition, high freight costs, import duties, inability to take back recycled aluminum, lack of technical service capabilities and long lead-times mean that many developing market exporters are viewed as second-tier suppliers. Therefore, many of our customers in the Americas, Europe and Asia do not look to suppliers in these emerging markets for a significant portion of their requirements.

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      Based on CRU information, Alcoa, Novelis and Commonwealth Industries, Inc., or Commonwealth, were the top three producers of aluminum rolled products in North America in terms of shipments in 2003 with an aggregated share of shipments of 65%. Market conditions during the past few years have led to the exit of several producers through consolidation, restructuring or bankruptcy, reducing production capacity. The resulting tighter supply in many end-use markets has led to margin and portfolio improvements. Established competitors have been able to improve their production capacity utilization as the industry has recovered.

      In North America, the average operating rate of the aluminum rolled products production capacity was 72% in 2003 according to CRU. The operating rate is determined by dividing estimated production by available capacity. Because of seasonality in demand, temporary shutdown of equipment for scheduled maintenance and equipment specialization, we estimate the effective maximum operating rate is approximately 90%.

North America Aluminum Rolled Products Shipments for 2003

      North American aluminum rolled products consumption reached a high of 5,274 kilotonnes in 1999 and then fell to 4,654 kilotonnes in 2003, which we believe was a result of the economic recession, the impact of the September 11, 2001 events and inventory drawdown effects. We believe that demand has since shown signs of recovery from the economic downturn. Construction and industrial uses of aluminum rolled products have rebounded with the economic pickup. According to CRU, the overall market for beverage containers is growing, but a slow packaging mix change towards single serve containers is expected to keep North American demand for aluminum cans relatively flat for the foreseeable future. Increased use of aluminum in automobile production is expected by CRU to increase transportation demand, the fastest growing end-use market in this region.

      Based on CRU information, Novelis, Hydro, and Pechiney were the top three producers of aluminum rolled products in Europe in terms of shipments in 2003 with an aggregated share of shipments of 49%. Other suppliers of aluminum rolled products in Europe include Alcoa, Corus Group Plc, or Corus, RusAl, Alcan Aluminium werk Umma AG (AMAG) and Elval S.A.

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      In Europe, the average operating rate of the aluminum rolled products production capacity was 76% in 2003 according to CRU.

      We believe that overcapacity in common alloy sheet and plate, used in applications such as building materials and industrial products, has weakened prices, resulting in generally lower profits than in North America. In end-use applications exhibiting growth, such as can, automotive, foil and lithographic sheet, the tighter supply and demand has led to margin and portfolio improvements. We believe there will be opportunities to focus on additional operational improvements and profitable products by more closely aligning individual product supply with market demand.

Europe Aluminum Rolled Products Shipments for 2003

      Based on CRU information, European output increased on average at a rate of 3.4% per year from 2001 to 2003, driven mainly by strong demand growth in Eastern Europe. We believe the demand for automotive sheet has improved as automotive manufacturers have increasingly substituted aluminum components for steel parts. We also believe that, as a relatively new market, there is potential for growth in automotive sheet.

      We expect that economic growth and demand from construction projects in Eastern Europe will continue to support growth of aluminum sheet. We expect demand for aluminum beverage cans to grow as aluminum continues to displace steel as the favoured packaging material. In Europe, steel cans still represent 38% of all beverage can production, compared to less than 1% in North America.

      The market for aluminum rolled products in Asia-Pacific has been characterized by strong growth but high fragmentation. Based on CRU information, Novelis, Unifus Aluminum Co., Ltd. and Sumitomo Light Metal Company, Ltd. were the top three producers of aluminum rolled products in Asia-Pacific in terms of shipments in 2003 with an aggregated share of shipments of 28%. The majority of Asian-Pacific aluminum rolled products is consumed in China, Japan and Korea.

      In Asia-Pacific, the average operating rate of the aluminum rolled products production capacity was 73% in 2003 according to CRU.

      Based on CRU information, consumption of aluminum rolled products in the Asia-Pacific region has grown on average at a rate of 8.7% per year from 2001 to 2003. We believe this rise in demand has been fuelled by growth in local demand as well as by growth in exports of goods with aluminum content. According to CRU, industrial production growth in China continues in line with averages since 1997. This

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Asia-Pacific Aluminum Rolled Products Shipments for 2003

      We believe that China has the highest potential for growth but is also the most fragmented Asia-Pacific market with many small aluminum rolled products producers. There are over 80 plants in China, most with an average capacity of 20 kilotonnes, compared to North America where average plant capacity is approximately 142 kilotonnes. There is limited hot mill capacity in China and a significant amount of sheet ingot (input metal) for local plants is imported from other countries. Most local production is from continuous casting plants that are only capable of producing industrial, construction and commodity aluminum rolled products. China’s strong growth has driven a variety of capacity expansions and new additions and more are planned.

      In Japan, there has been some market consolidation resulting from a long period of limited or no economic growth. Some mills are shifting emphasis from can and foil to industrial products to support Japanese demand, which we believe has provided us with an opportunity to expand our position in the Japanese can market. Our two hot mills in Korea, at Ulsan and Yeongju, together account for 64% of Korea’s production capacity. Both mills are active exporters to China and other Asian countries.

      Demand for foil products is expected to grow significantly in the Asia-Pacific region, driven by cigarette and liquor packaging, which also correlates with disposable income. In addition, producers of liquid crystal displays, or LCDs, represent a small but rapidly growing market for aluminum sheet in Korea, China and Japan, where most new production capacity is being installed.

      There are few producers in the South American region. Based on CRU information, Novelis, Companhia Brasileira de Alumínio, or CBA, and Alcoa were the top three producers of aluminum rolled

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      In South America, the average operating rate of the aluminum rolled products production capacity was 68% in 2003 according to CRU.

      Brazilian sheet industry capacity increased in 1999 from 330 kilotonnes to 490 kilotonnes due to the expansion of our Pinda plant, the only can sheet producer in South America. CBA has announced the expansion of its plant to increase its rolling capacity to produce commodity sheet and foil through the installation of two new finishing mills to be operational in 2006. Some sheet capacity has been redirected to exports following local currency devaluations. There have been no new entrants or market consolidation in recent years.

South America Aluminum Rolled Products Shipments for 2003

      The Brazilian aluminum can market grew at a high rate during the past decade, from 2.5 billion cans in 1994 to 10.7 billion in 2002. Since primary aluminum prices on the LME are U.S. dollar based, devaluations of the Brazilian and Argentinean local currencies in 2001 and 2002 have dampened aluminum consumption. At the same time, Venezuela faced a political and economic crisis that reduced overall consumption. Once general price levels adjusted to the currency devaluation, the market resumed growth. Over the longer term, we believe the most important variable impacting aluminum rolled products consumption in South America has been disposable income.

      The industrial products market in South America has not grown in recent years, which we believe is mainly because of economic recession and substitution of aluminum by other materials, such as steel, plastics and vinyl which are priced locally.

      We believe aluminum foil consumption will grow as food and beverage manufacturers continue to take advantage of the benefits of flexible packaging. The transportation end-use market does not yet have significant automotive volume and consists primarily of aerospace.

      The aluminum rolled products market is highly competitive. We face competition from a number of companies in all of the geographic regions and end-use markets in which we operate, although there are no

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      In addition to competition from within the aluminum rolled products industry as discussed above in “— Market structure, size and growth”, we, as well as other aluminum rolled products manufacturers, face competition from non-aluminum materials, as fabricators and end-users have, in the past, demonstrated a willingness to substitute other materials for aluminum. In the beverage/food cans end-use market, aluminum rolled products’ primary competitors are glass, PET plastic and steel. In the transportation end-use market, aluminum rolled products compete mainly with steel. Aluminum competes with wood and steel in building products applications. Factors affecting competition with substitute materials include price, ease of manufacture, consumer preference and performance characteristics.

      The following factors have historically affected the demand for aluminum rolled products:

      Economic growth. We believe that economic growth is the single largest driver of aluminum rolled products demand. In mature markets, growth in demand has typically correlated closely with growth in industrial production. In emerging markets such as China, growth in demand typically exceeds industrial production growth largely because of expanding infrastructures, capital investments and rising incomes that often accompany economic growth in these markets.

      Substitution trends. Manufacturers’ willingness to substitute aluminum for other materials and competition from other materials for substitution also affect demand. For example, in North America, competition from PET plastic containers and glass bottles, and changes in consumer preferences in beverage containers, have, in recent years, reduced the growth rate of aluminum can sheet in North America from the high rates experienced in the 1970s and 1980s.

      LME and local currency effect. U.S. dollar denominated trading of primary aluminum on the LME has two primary effects on demand. First, significant shifts between the value of the local currency of the end-user and the U.S. dollar may affect the cost of aluminum to the end-user relative to substitute materials, depending on the cost of the substitute material in local currency. Second, the uncertainty of primary metal movements on the LME may discourage product managers in industries such as automotive from making long term commitments to use aluminum parts. Long term forward contracts can be used by manufacturers to reduce the impact of LME price volatility.

      Downgauging. Increasing technological and asset sophistication has enabled aluminum rolling companies to offer consistent or even improved product strength using less material, providing customers with a more cost-effective product. This continuing trend reduces raw material requirements, but also effectively increases rolled products’ plant utilization rates and reduces available capacity because the same number of units require more rolling hours to achieve thinner gauges. As utilization rates increase, revenues rise as pricing tends to be based on machine hours used rather than on the volume of material rolled. On balance, we believe that downgauging has enhanced overall market economics for both users and producers of aluminum rolled products.

      Seasonality. Demand for certain important aluminum rolled products is significantly affected by seasonal factors. As the temperature increases so does consumption of beer and soft drinks packaged in aluminum cans. Summer construction starts also increase demand for aluminum sheet used in the construction and industrial end-use market. For these reasons, revenues typically peak in the northern hemisphere in the second and third quarters, while sales in the southern hemisphere, which account for a

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      The following factors have historically affected the supply of aluminum rolled products:

      Production capacity. As in most manufacturing industries with high fixed costs, production capacity has the largest impact on supply in the aluminum rolled products industry. In the aluminum rolled products industry, the addition of production capacity requires large capital investments and significant plant construction or expansion and typically requires long lead-time equipment orders.

      Alternative technology. Advances in technological capabilities allow aluminum rolled products producers to better align product portfolio and supply with industry demand. As an example, continuous casting offers the ability in some markets to increase capacity in smaller increments than is possible with hot mill additions. This enables production capacity to better adjust to small year-over-year increases in demand. However, the continuous casting process permits the production of a more limited range of products.

      Trade. Some trade flows do occur between regions despite shipping costs, import duties and the need for localized customer support. Higher value-added, specialty products such as lithographic sheet are more likely to be traded internationally, especially if demand in certain markets exceeds local supply. With respect to less technically demanding applications, emerging markets with low cost inputs may export commodity aluminum rolled products to larger, more mature markets. Accordingly, regional changes in supply, such as plant expansions, may have some effect on the worldwide supply of commodity aluminum rolled products.

Our business strengths

      For nearly 90 years, our business has evolved within Alcan’s integrated aluminum business. Continuing as an aluminum rolled products company independent of Alcan, we intend to build on the business strengths we developed while part of Alcan. Our key strengths are outlined below.

      International presence and scale. With 38 operating facilities located in 12 countries and on four continents, we have a broad geographical presence that we believe allows us to better serve our increasingly global customer base as well as diversify our sources of cash flow and offset risk across different regions. Our size allows us to service a wide variety of customer needs, leverage our selling, administrative, research and development and other general expenses, establish new uses for aluminum rolled products and access new markets for such products.

      Strong customer relationships. We maintain long-standing supply relationships with many of our customers. Our major customers include Agfa-Gevaert N.V., Alcan’s packaging business group, Anheuser-Busch Companies, Inc., Ball Corporation, various bottlers of the Coca-Cola system, Crown Cork & Seal Company, Inc., Daching Holdings Limited, DaimlerChrysler AG, Kodak Polychrome Graphics GmbH, Ford Motor Company, General Motors Corporation, Integris Metals Corporation, Pactiv Corporation, Rexam Plc, Tetra Pak Ltd. and Visteon Corporation. We endeavor to gain strong customer loyalty by anticipating and meeting the specific technical standards demanded by our customers with a high level of quality, technical support and customer service.

      Leading market positions. We are the world’s leading aluminum rolled products producer with an estimated 18% share of worldwide aluminum rolled products shipments. In 2003, we were the largest aluminum rolled products producer in terms of shipments in each of Europe, Asia-Pacific and South America, and the second largest in North America. We hold a top two market position on a worldwide basis in each of the four principal end-use markets for aluminum rolled products. In 2003, we held the number one position in terms of shipments in the beverage/food cans end-use market with a 31% market share and the number one position in terms of shipments in the foil products end-use market with a 14% market share. We held the number one position in terms of shipments in the construction and industrial end-use market with a 14% market share and the number two position in terms of shipments in the transportation end-use market with a 13% market share.

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      Efficient producer. We operate highly automated and well-maintained facilities using modern manufacturing technologies for the efficient production of aluminum rolled products in many regions of the world. Our large production base within each of our business groups allows us to combine similar production runs and dedicate facilities for focused and cost-efficient production.

      Metal supply management. We have a diversified metal supply, experience to manage our metal needs as well as comprehensive hedging capabilities, including our agreements with Alcan that should provide us with the ability to fix metal forward and hedge contracts with Alcan as counterparty, to assist our customers in managing metal price risk. The metal supplied by Alcan’s primary aluminum group to its aluminum rolled products units has historically been transferred at arm’s length market prices. In connection with the reorganization transactions, Alcan will enter into ongoing metal supply agreements with us on a basis consistent with past practice. These supply arrangements will supplement supply from our primary operations in Brazil, our use of recycled aluminum and our own market purchases of primary aluminum.

      Innovation leader with proprietary technologies. We endeavor to be at the forefront of developing next generation technologies in the aluminum rolled products industry in which we operate and believe that we are the world leader in continuous casting technology, as owner of technology relating to the two main continuous casting processes. We have approximately 300 employees dedicated to research and development and customer technical support, located in many of our plants and research centers.

      Experienced and dedicated management and employees. We have a management team that has significant experience in the aluminum rolled products industry. The members of our senior management team have over 200 years of combined experience in the aluminum industry and bring a wide range of skills in manufacturing, engineering, marketing and sales, human resource management and finance. In continuing as an independent aluminum rolled products company, we inherit Alcan’s core business principles, with its focus on continued improvement, value-based management and best practices in environmental management, health, safety and quality.

Our business strategy

      As a separate company, our management will be free to focus on aluminum rolled products, which we believe will enable us to respond more quickly to market demands and maximize the efficient allocation of our capital, technical and human resources. As a separate company, we will also be able to provide incentives to our management and employees that more closely align their interests with the performance of the aluminum rolled products business.

      Our primary objective is to maximize shareholder value by increasing our revenues and profitability in the North American, European, Asia-Pacific and South American aluminum rolled products markets. We intend to achieve our objective through the application of our business strengths to the strategic initiatives outlined below. We intend to:

      Address customer needs with innovative and market-driven products. Our future success is impacted by our ability to innovate in anticipation of our customers’ needs. To that end, we intend to enhance value to our customers by improving the quality of our products and services. We intend to conduct research and development that generates new products and processes to enable us to maintain long term partnerships with our key customers. Significant growth opportunities in aluminum rolled products consumption have typically come from product substitution opportunities, such as thin aluminum foil in packaging applications, automotive body panels and aluminum building materials. We plan to work in partnership with our customers to develop new uses for our various products by substituting highly engineered aluminum rolled products for other materials, thereby developing new markets for our products. We believe that our experience in process innovation, developing new technologies in surface treatment, casting, alloying, laser semi-finishing, forming and joining, and our ability to develop specialized aluminum rolled products solutions, will assist our efforts. We plan to address higher technology and more profitable end-use markets with proprietary products and processes that will be unique and attractive to our customers.

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      Develop and implement a new business model. We intend to implement a new metal conversion business model focused on the aluminum rolled products markets and more closely aligned with the current requirements of those markets. Our new business model will emphasize product line selection based on higher value added rather than volume, economies of utilization, a higher focus on recyclables, and a pricing strategy based on conversion rather than a cost plus approach. We believe the resulting change will allow us to react more quickly in all markets and better align our business with customer requirements.

      Improve production from existing assets and reduce capital needs. We have achieved a leading position in aluminum rolled products markets in part through the development and the acquisition of quality assets in our four geographic regions. Having established this position, we intend to optimize our production capacity in order to focus on achieving attractive returns on our capital assets without investing significant amounts of new capital. Our modern mills in North America, Europe, Asia and South America give us the ability to manufacture a wide range of value-added differentiated aluminum rolled products enabling us to selectively move production among our mills within these regions based on market demand. We believe that our separation from Alcan and its vertically integrated production chain will offer us further opportunities to improve sourcing logistics and increase working capital efficiency. Other opportunities for capital reductions include increasing the use of tolling which reduces our capital requirements because the metal being processed is owned by the customer. Tolling allows us to generate revenues by converting the metal without having to utilize capital on maintaining inventory.

      Leverage economies of scale in raw material sourcing. As an independent rolled products producer, we expect to be the largest purchaser of aluminum in the world and one of the largest recyclers. We will also be equipped with significant sheet ingot casting capability. We believe these attributes will enable us to source metal flexibly and advantageously. We intend to continue working with our suppliers to further leverage economies of scale in our purchase of primary aluminum, supplies and services. Our metal management strategy includes plans to develop our recycling program further with a focus on sources of material such as used beverage cans, as well as other forms of recycled material in all regions in which we operate, which will expand our access to less expensive sources of aluminum. We will also have the ability to expand our sheet ingot casting capacity in the different regions in which we operate, which can be used to reduce reliance on, or maintain costs from, third party sheet ingot suppliers.

      Capture growth in targeted markets. Our international presence has enabled us to capture growth opportunities in targeted aluminum rolled products markets such as beverage and food cans and the growing automotive component market on the North American, European and Asian continents. We also own technology relating to the two main types of continuous casting processes, namely belt caster and twin roll caster, providing us with a substantial cost advantage when examining options to profitably serve common alloy aluminum rolled products production in emerging markets such as China, Eastern Europe and South America. We intend to use these strengths, through joint ventures with local partners or on a stand-alone basis, to grow profitably when opportunities arise in these emerging markets.

      Pursue selected expansion or acquisition opportunities. We intend to use our management team, large scale operations, technical resources, market focus and operating cash flow to identify and take advantage of appropriate expansion and acquisition opportunities as they may arise.

Our business groups

      Due in part to the regional nature of supply and demand of aluminum rolled products and in order to best serve our customers, we manage our activities on the basis of geographical areas and are organized under four business groups. The business groups are Novelis North America (NNA), Novelis Europe (NE), Novelis Asia (NA) and Novelis South America (NSA).

      The table below sets forth the contribution of each of our business groups to our revenues, profitability, total assets and shipments for the years ended December 31, 2003, 2002 and 2001. We refer to the measure of profitability of our business groups as business group profit, or BGP. BGP comprises earnings before interest, income taxes, minority interests, depreciation and amortization and excludes

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      Our 38 operating facilities in 12 countries provide us with highly automated, flexible and advanced manufacturing capabilities. In addition to the aluminum rolled products plants, NSA operates bauxite mining, aluminum refining and smelting facilities. We believe our facilities have the assets required for efficient production and are well managed and maintained. For a further discussion of financial information by geographic area, see note 24 to our audited combined financial statements.

      Through a network of 12 aluminum rolled products facilities, NNA manufactures aluminum sheet and light gauge products. Important end-use applications for NNA include beverage cans, containers and packaging, automotive and other transportation applications, building products and other industrial applications.

      In 2003, NNA had sales and operating revenues of $2.4 billion, representing 38% of our total sales and operating revenues, and shipments of 1,083 kilotonnes, including tolled metal, representing 39% of our total shipments. Tolled metal refers to the process by which customers provide their own aluminum to us to be converted into a rolled product, and are charged a value-added conversion cost, instead of the metal plus value-added conversion cost.

      Approximately two-thirds of NNA’s production is directed to beverage can sheet. Beverage can is a technically demanding end-use market to supply and pricing is very competitive. Producers with low-cost and technologically advanced manufacturing facilities and technical support capability have a competitive advantage. Recycling is important in the manufacturing process and NNA has three facilities that collect

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      The table below sets forth plant processes, end-use markets and production information about our North American facilities.

      The Oswego, New York, facility, wholly owned by us, operates modern equipment for used beverage cans recycling, ingot casting, hot rolling, cold rolling and finishing. Oswego produces can stock as well as building and industrial products. Oswego also provides feedstock to our Kingston, Ontario, facility, which produces heat-treated automotive sheet and our Fairmont, West Virginia, facility, which produces light gauge sheet.

      The Logan, Kentucky, facility is a joint venture between us and Arco Aluminium, a subsidiary of BP plc. Our original investment in the joint venture was 40%, while Arco held the remaining 60% interest. Subsequent equipment investments have resulted in us now owning approximately 67% of Logan’s total production. Logan, which was built in 1985, is the newest and largest hot mill in North America. Logan operates modern and high-speed equipment for ingot casting, hot-rolling, cold-rolling and finishing. Logan is a dedicated manufacturer of aluminum sheet products for the can stock market with modern equipment, efficient workforce and product focus. A portion of the can end stock is coated at NNA’s Warren, Ohio, facility, in addition to Logan’s on-site coating assets.

      Our Saguenay Works, Quebec, facility operates the world’s largest continuous caster, which produces feedstock for our three foil rolling plants located in Terre Haute, Indiana, Fairmont, West Virginia and Louisville, Kentucky. The continuous caster was developed through internal research and development and

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      The table below sets forth 2003 production information about our North American recycling facilities.

      Along with our recycling center in Oswego, we own two other fully dedicated recycling facilities in Berea, Kentucky and Greensboro, Georgia. Each offers a modern, cost-efficient process to recycle used beverage cans and other recycled aluminum into sheet ingot to supply our hot mills in Logan and Oswego. Berea is the largest used beverage can recycling facility in the world.

      NE provides European markets with value-added sheet and light gauge products through its 18 plants. In 2003, NE had sales and operating revenues of $2.5 billion, representing 40% of our total sales and operating revenues, and shipments of 1,000 kilotonnes, including tolled metal, representing 36% of our total shipments.

      NE serves a broad range of aluminum rolled product end-use applications. Construction and industrial represents the largest end-use market in terms of shipment volume by NE. NE supplies plain and painted sheet for building products such as roofing, siding, panel walls and shutters, where, due to the material’s recyclability, aluminum products compare favourably with non-metallic building materials that usually have to be disposed of in landfills after demolition. NE is a global leader in the production of lithographic sheet, a specialized product requiring technical production. NE is the second largest supplier of foil and beverage can sheet in Europe in terms of shipments, and is one of the major suppliers for ultra thin gauge foil for aseptic liquid packaging of milk and juices. Finally, NE held the number two position in terms of shipments in the European transportation end-use market with a 16% market share.

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      The table below sets forth plant processes, end-use markets and production information about our European facilities.

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      Aluminium Norf GmbH in Germany, a 50/50 production sharing joint venture between us and Norsk Hydro Aluminium Deutschland GmbH, is a large scale, modern manufacturing hub for several of our operations in Europe. Norf is the largest aluminum rolling mill in the world. With total production of approximately 1,300 kilotonnes in 2003, Norf production represented approximately one quarter of aluminum rolled products production in Europe. Norf supplies hot coil for further processing through cold rolling to some of our other plants including Goettingen and Nachterstedt in Germany and provides foilstock to our plants in Ohle and Ludenscheid in Germany and in Rugles, France.

      Rogerstone’s hot mill in the United Kingdom also supplies the Bridgnorth foil plant with foilstock and produces paintstock reroll for Pieve and Annecy. Furthermore, Rogerstone produces standard sheet and coil for the United Kingdom distributor market. The Pieve plant, located in Milan, Italy, produces continuous cast coil that is cold rolled into paint stock and sent to the Bresso plant, also located in Milan.

      The Dudelange foil plant in Luxembourg utilizes continuous twin roll casting equipment and is one of the few foil plants in the world capable of producing 6 micron foil for aseptic packaging applications from continuous cast material. The Sierre hot rolling plant in Switzerland is Europe’s leading producer of automotive sheet in terms of shipments and also supplies plate stock to Alcan.

      The table below sets forth 2003 production information about our European recycling facilities.

      Our recycling operations at Borgofranco, Italy and Latchford, United Kingdom position us as one of the major recyclers in Europe. Latchford is the only recycling plant in Europe dedicated to used beverage cans.

      NE also manages Pechiney Aluminum Engineering (Voreppe, France), which sells casthouse technology, including liquid metal treatment devices, such as degassers and filters, direct cast automation packages and twin roll continuous casters, in many parts of the world.

      NA operates three manufacturing facilities in the Asian region and manufactures a broad range of sheet and light gauge products.

      In 2003, NA had sales and operating revenues of $918 million, representing 15% of our total sales and operating revenues, and shipments of 429 kilotonnes, including tolled metal, representing 16% of our total shipments.

      NA production is balanced between the foil products, construction and industrial, and beverage/food can end-use markets. NA is the second largest supplier to China in terms of shipments, which is, based on CRU information, Asia-Pacific’s fastest growing market. Due primarily to capacity increases through our subsidiary in Korea, NA’s production capabilities have increased by 70% from 2001 to 2003. As the second largest supplier to the Chinese market, we believe that NA is well-positioned to benefit from further economic development in China.

      The table below sets forth plant processes, end-use markets and production information about our Asian facilities.

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      Our Korean subsidiary, in which we hold a 68% interest, was formed through acquisitions in 1999 and 2000. Since our acquisition, production at our Ulsan and Yeongju plants has increased from 198 kilotonnes in 2000 to 353 kilotonnes in 2003, which represents a 78% increase. In addition, product capability has been developed to address higher margin markets such as can sheet.

      In 2003, we increased from 36% to 59% our participation in the Aluminium Company of Malaysia, a publicly traded company that controls the Bukit Raja, Selangor light gauge rolling facility. Unlike our production sharing joint ventures at Norf and Logan, our Korean and Malaysian partners are financial partners and we market 100% of the plants’ output.

      NA also operates a recycling furnace in Ulsan, Korea for the conversion of customer and third party recycled aluminum, including used beverage cans. Ulsan’s total production for 2003 was 20 kilotonnes. Metal from recycled aluminum purchases represented 10% of NA’s total shipments in 2003.

      NSA operates two rolling plants and primary aluminum production facilities in South America. NSA manufactures various aluminum rolled products, including can stock, automotive and industrial sheet and light gauge for the beverage/food can, construction and industrial and transportation end-use markets.

      In 2003, NSA had sales and operating revenues of $414 million, representing 7% of our total sales and operating revenues, and shipments of 258 kilotonnes, including tolled metal, representing 9% of our total shipments. These figures exclude sales and operating revenues and shipments associated with NSA’s primary aluminum operations.

      NSA’s Pinda rolling and recycling facility in Brazil is the largest aluminum rolling and recycling facility in South America in terms of shipments and the only facility in South America capable of producing can body and end stock. Our Pinda plant recycles primarily used beverage cans, and is engaged in tolling recycled metal for our customers.

      The primary aluminum produced by NSA’s mine, refinery and smelters is used by our Brazilian aluminum rolled products operations, with any excess production being sold on the market in the form of aluminum billets. In 2003, NSA earned an additional $84 million from third party sales of 54 kilotonnes of primary metal. NSA generates a portion of its own power requirements. NSA also owns options to develop additional hydroelectric power facilities.

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      The table below sets forth plant processes, end-use markets and production information about our South American facilities.

      Our Pinda facility has an integrated process that includes recycling, sheet ingot casting, hot mill and cold mill operations. A leased coating line produces painted products, including can end stock. Our Pinda facility supplies foil stock to our Utinga foil plant, which produces converter, household and container foil.

      Our Pinda facility is the largest used beverage cans recycling center in South America with total production of 70 kilotonnes in 2003.

      The table below sets forth plant processes, end-use markets and production information about our South American primary metal operations.

      Bauxite mining, alumina refining, primary aluminum smelting and hydroelectric power generation operations are conducted at NSA’s Ouro Preto facility in Saramenha, Brazil. Our owned power generation supplies 70% of the Ouro Preto smelter needs. In the Ouro Preto region, we own rights to approximately 10 million tonnes of bauxite reserves. There are additional reserves in the Cataguases and Carangola regions sufficient to meet our requirements in the foreseeable future.

      Primary aluminum smelting operations are also conducted at NSA’s Aratu facility in Brazil.

Raw materials and suppliers

      The raw materials that we use in manufacturing include primary aluminum, recycled aluminum, sheet ingot, alloying elements and grain refiners. Our smelters also use alumina, caustic soda and calcined petroleum coke and resin. These raw materials are generally available from several sources and are not

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      We obtain aluminum from a number of sources, including the following:

      Primary aluminum purchases. We purchased approximately 2,000 kilotonnes of primary aluminum in 2003 in the form of sheet ingot and standard ingot, as quoted on the LME. We purchased 48% of our primary aluminum requirements from Alcan in 2003. Following our separation from Alcan, we will continue to source aluminum from Alcan pursuant to the metal supply agreements described under “Arrangements Between Novelis and Alcan”.

      Primary aluminum production. We produced approximately 90 kilotonnes of our own primary aluminum requirements in 2003 through our smelter and related facilities in Brazil.

      Recycled aluminum products. We operate facilities in several plants to recycle post-consumer aluminum, such as used beverage cans collected through recycling programs. In addition, we have agreements with several of our large customers where we take recycled processed material from their fabricating activity and re-melt, cast and roll their recycled aluminum products and re-supply them with aluminum sheet. Other sources of recycled material include lithographic plates, where over 90% of aluminum used is recycled, and products with longer lifespans like cars and buildings which are just starting to become high volume sources. We purchased approximately 800 kilotonnes of recycled material in 2003.

      The majority of recycled material collected and re-melted is directed back through can-stock plants. The net effect of these activities is that 28% of our aluminum rolled products production in 2003 was made with recycled material. On a regional basis this translated into 41% for each of our North and South American aluminum rolled products shipments, 17% of our European shipments and 9% of our Asian shipments.

      Sheet Ingot. We have the ability to cast sheet ingot, which are the slabs of aluminum that are fed into hot rolling mills to make aluminum rolled products. Casting, which requires precise control of heat and metal alloys, can have a major impact on the quality of the sheet ingot produced and all aluminum rolled products that are subsequently produced from that sheet ingot. We are currently able to supply 72% of our internal needs for sheet ingot, which helps us to control the quality of the sheet ingot we use, and generates cost savings and sourcing flexibility. We purchase the remainder from Alcan and other providers on longer term contracts. Following the separation, we expect to continue to source a portion of our sheet ingot requirements from Alcan pursuant to the metal supply agreements described under “Arrangements Between Novelis and Alcan”.

      We use several sources of energy in the manufacture and delivery of our aluminum rolled products. Natural gas and electricity represent more than 75% of our energy consumption by cost. We also use fuel oil and transport fuel. The majority of energy usage occurs at our casting centers and during the hot rolling of aluminum. Our cold rolling facilities require relatively less energy. We purchase our natural gas on the open market, which subjects us to market pricing fluctuations. Recent natural gas pricing volatility in the United States has increased our energy costs. We are considering the relative costs of stabilizing our future exposure to natural gas prices through forward purchase contracts. Natural gas prices in Europe and Asia have historically been more stable.

      A portion of our electricity requirements are purchased pursuant to long term contracts in the local regions in which we operate. A number of our facilities are located in regions with regulated prices, which affords relatively stable costs. NSA has its own hydroelectric facilities that meet a substantial portion of its local electricity requirements for smelting operations.

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      We also have bauxite and alumina requirements. We expect to satisfy some of our alumina requirements for the near term by entering into an alumina supply agreement with Alcan, as discussed below under “Arrangements Between Novelis and Alcan”.

Our customers

      Although we provide products to a wide variety of customers in each of the markets that we serve, we have experienced consolidation trends among our customers in many of our key end-use markets. In 2003, approximately 39% of our shipments were to our ten largest customers, most of whom we have been supplying for more than 20 years. To address consolidation trends, we focus significant efforts at developing and maintaining close working relationships with our customers and end-users.

      Our major customers include Agfa-Gevaert N.V., Alcan’s packaging business group, Anheuser-Busch Companies, Inc., affiliates of Ball Corporation, various bottlers of the Coca-Cola system, Crown Cork & Seal Company, Inc., Daching Holdings Limited, DaimlerChrysler AG, Kodak Polychrome Graphics GmbH, Ford Motor Company, General Motors Corporation, Integris Metal Corporation, Pactiv Corporation, Rexam Plc, Tetra Pak Ltd. and Visteon Corporation.

      We sell most of our products under long-term contracts with pricing based on “margin-over-metal” pricing, which is subject to periodic adjustments based on market factors.

      In our largest end-use market, beverage can sheet, we sell directly to beverage makers and bottlers as well as to can fabricators that sell the cans they produce to bottlers. In certain cases, we also operate under umbrella agreements with beverage makers and bottlers under which they direct their can fabricators to source their requirements for beverage can body, end and tab stock from us. The bottlers are not responsible for the contractual performance by the can fabricators that we supply under these umbrella agreements. Among these umbrella agreements is one, referred to as the CC agreement, with several North American bottlers of Coca-Cola branded products, including Coca-Cola Enterprises and its affiliates. This agreement is based on arrangements that have been in place since 1997 and have been subject to periodic renewal. Under the CC agreement we shipped approximately 379 kilotonnes of beverage can sheet, including tolled metal, in 2003. These shipments were made to, and we received payment from, our direct customers, being the beverage can fabricators that sell beverage cans to the Coca-Cola associated bottlers. Under the CC agreement, bottlers in the Coca-Cola system may join the CC agreement and benefit from its terms by committing a specified percentage of the can sheet required by their can fabricators to us. Pricing under the CC agreement is set for the duration of the agreement, but is subject to change in the event of changes in the competitive environment or to the competitive industry price structure.

      Purchases by Rexam plc and its affiliates from our operations in all of our business segments represented approximately 9%, 11% and 11% of our total sales and operating revenues in 2003, 2002 and 2001, respectively. Rexam plc’s North American affiliates are the largest customers purchasing under the CC agreement.

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Distribution and backlog

      We have two principal distribution channels for the end-use markets in which we operate: direct sales and distributors (who are sometimes referred to as stockists). The figure below sets forth the percentage of our total aluminum rolled products shipments for each sales channel for 2003.

Novelis Rolled Products Sales by Channel, 2003

      We supply various end-use markets in approximately 88 countries through a direct sales force that operates from individual plants or sales offices, as well as from regional sales offices in 21 countries. The direct sales channel typically involves very large, sophisticated fabricators and original equipment manufacturers. Long standing relationships are maintained with leading companies in industries that use aluminum rolled products. Supply contracts for large global customers generally range from one to five years in length and historically there has been a high degree of renewal business with customers. Given the customized nature of products and in some cases, large order sizes, switching costs are significant, thus adding to the overall consistency of the customer base.

      We also use third-party agents or traders in some regions to complement our own sales force. They provide service to our customers in countries where we do not have local expertise. We tend to use third-party agents in Asia and South America more frequently than in other regions.

      We also sell our products through aluminum distributors, particularly in North America and Europe. Customers of distributors are widely dispersed, and sales through this channel are highly fragmented. Sales of mostly commodity, or less specialized, products are sold into many end-use markets, including the construction and industrial and transportation markets. We collaborate with our distributors to develop new end-use applications and improve the supply chain and order efficiencies.

      We produce aluminum rolled products primarily to meet our customers’ requirements established under annual or multi-year contracts, which are typically not “take-or-pay” contracts and we do not believe that order backlog is a material aspect of our business.

Research and development

      In 2003, we spent $62 million on research and development activities in modern research facilities, which included mini-scale production lines equipped with hot mills, can lines and continuous casters. We

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      Based on our extensive experience in can sheet, automotive sheet, lithographic sheet, painted sheet, foil and anodizing production techniques, we have the ability to supply advanced aluminum rolled products and support our customers. Our technological leadership has led to the design of products to address various needs in different regions of the world. Examples include:

Our employees

      At August 31, 2004, we had approximately 13,600 employees. A significant portion of our employees, approximately 7,000, are employed in our European operations and approximately 2,900 are employed in North America. With respect to the remainder of our workforce, approximately 1,600 are employed in Asia and approximately 2,100 are employed in South America and other areas. Approximately two-thirds of our hourly-paid employees are represented by labour unions and their employment conditions governed by collective bargaining agreements. Collective bargaining agreements are negotiated on a site, regional or national level, and are of different durations. We believe that we have good labour relations in all our operations and have not experienced a significant labour stoppage in any of our principal operations during the last decade.

Intellectual property

      In connection with our separation from Alcan, Alcan will assign or license to us a number of important patents, trademarks and other intellectual property rights owned by Alcan and required for our business. Ownership of intellectual property that is used by both us and Alcan will be owned by one of us, and licensed to the other. Certain specific intellectual property rights which have been determined to be exclusively useful to us or which are required to be transferred to us for regulatory reasons will be assigned to us with no license back to Alcan.

      We own technology relating to the two main types of continuous casting processes. Continuous casting mills are an alternative technology for making aluminum rolled products, using a process that converts molten aluminum directly into hot coils for further processing. Because small incremental capacity additions of between 10 kilotonnes and 175 kilotonnes can be made at lower capital investment than a hot mill, continuous casting mills offer the industry a better way of matching supply and demand. We developed the belt caster technology named Flexcaster through internal research and development, and acquired the twin roll casting machine technology through the Pechiney acquisition. We will continue to specialize in the development and sales of casthouse equipment in order to maintain our position as the world leading manufacturer of continuous casting machines.

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Legal proceedings

      In connection with our separation from Alcan, we will assume a number of liabilities mainly related to our historical rolled products operations, including liabilities in respect of legal claims. As a result, we may be required to indemnify Alcan for claims successfully brought against Alcan or for the defense of, or defend, legal actions that have arisen from time to time in the normal course of our rolled products business, the outcomes of which, in the opinion of our management, neither individually nor in the aggregate, are likely to result in a material adverse effect on our business, results of operations or financial condition. The following describes certain environmental matters relating to our business that we expect to assume responsibility for as a result of the reorganization transactions.

      PAS Site. Alcan’s subsidiary, Alcan Aluminum Corporation, or Alcancorp, and third parties are defendants in a lawsuit instituted in July 1987 by the U.S. Environmental Protection Agency, or EPA, relating to the Pollution Abatement Services site, a third-party disposal site, in Oswego, New York, or 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 U.S. 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 Court of Appeals, 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 U.S. 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 paid the judgment plus interest in 2004 and is currently responsible only for future oversight costs estimated at $500,000. Alcancorp has also been sued by other potentially responsible parties, or PRPs, at PAS seeking contribution for costs incurred in cleaning up the PAS site which costs are being contested.

      Oswego North Ponds. In the late 1960s and early 1970s, Alcan Oswego used an oil containing polychlorinated biphenyls, or PCBs, in its re-melting operations. At the time, Alcan utilized a once-through cooling water system that discharged through a series of constructed ponds and wetlands, collectively referred to as the North Ponds. In the early 1980s, low levels of PCBs were detected in the cooling water system discharge and Alcan performed several subsequent investigations. The PCB-containing hydraulic oil Pydraul, which was eliminated from use by Alcan in the early 1970s, was identified as the source of contamination. In the mid-1980s, the Oswego North Ponds site was classified as an “inactive hazardous waste disposal site” and added to the New York State Registry under Alcan Sheet and Plate Company. Alcan ceased discharge through the North Ponds in mid-2002.

      In cooperation with the New York State Department of Environmental Conservation, or NYSDEC, and the New York State Department of Health, or NYSDOH, Alcan entered into a consent agreement in August 2000 to develop and implement a remedial program to address the PCB contamination at the Oswego North Ponds site. A remedial investigation report was submitted in January 2004, and we anticipate that the NYSDEC will issue a proposed remedial action plan and record of decision during the first quarter of 2005. We expect that the remedial plan will be implemented in 2006.

      Butler Tunnel Site. Alcancorp was a party in a 1989 EPA lawsuit before the U.S. District Court for the Middle District of Pennsylvania involving the Butler Tunnel Superfund site, a third-party disposal site.

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      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). Prior to that, Alcancorp had reprocessed the barrels. In 1996 the EPA issued an administrative order directing the PRPs 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 by which Alcancorp would 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, Alcancorp received notice from the EPA contending that 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 its objections to the EPA’s determination. The EPA has since indicated that the matter has been referred to the Department of Justice, or DOJ, for enforcement. Alcancorp has responded with a letter stating that the EPA’s claims are unsupported. In 2003, Alcancorp met with the DOJ and the EPA who quantified potential liability for unreimbursed costs and penalties in the amount of $2.1 million.

      Quanta Resources Facility. In June 2003, the DOJ filed a Superfund costs recovery action in U.S. District 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. The 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, which Alcancorp disputes. There are several PRPs at this site. 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 for unreimbursed costs in the amount of $2.6 million.

      From time to time, we are subject to environmental reviews and investigations. We have established procedures for reviewing environmental investigations and any possible remedial action on a regular basis. Although we cannot reliably estimate all of the costs which may ultimately be borne by us, we have fully provided for anticipated costs associated with certain ongoing environmental remediation activities, and we have no reason to believe that any remedial action will materially impair our operations, materially affect our financial condition or materially affect our liquidity.

Environment, health and safety

      We own and operate numerous manufacturing and other facilities in various countries around the world. Our operations are subject to numerous and increasingly stringent laws and regulations governing the protection of the environment, health and safety. We regularly monitor and conduct environment, health and safety assessments of our facilities. Environment, health and safety is a key component of our management operating system. We believe we have well-developed processes and we expect to continue to focus on this component going forward.

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ARRANGEMENTS BETWEEN NOVELIS AND ALCAN

General

      In connection with our separation from Alcan, we and Alcan will enter into a separation agreement and several ancillary agreements to complete the transfer of Alcan’s rolled products businesses to us and the distribution of our shares to Alcan common shareholders. The separation agreement and various ancillary agreements are summarized below. In addition to the agreements described below, we may enter into other agreements with Alcan prior to or concurrently with the separation that would relate to other aspects of our relationship with Alcan following the separation. The subject matters and terms of these agreements, if any, are in the process of being established. Following the separation, we may enter into other commercial agreements with Alcan from time to time, the terms of which will be determined at the relevant times.

Separation agreement

      The separation agreement sets forth the agreement between us and Alcan with respect to the principal corporate transactions required to effect our separation from Alcan; the transfer to us of most of Alcan’s aluminum rolled products businesses and certain related businesses; the distribution of our shares to Alcan shareholders; and other agreements governing the relationship between Alcan and us following the separation. Under the terms of the separation agreement, we will assume and agree to perform and fulfill all of the liabilities and obligations of the contributed businesses and of the entities through which such businesses shall be contributed, including liabilities and obligations related to discontinued rolled products businesses conducted by Alcan prior to the separation, in accordance with their respective terms.

      The separation agreement will provide for a full and complete mutual release and discharge of all liabilities existing or arising from all acts and events occurring or failing to occur or alleged to have occurred or to have failed to occur and all conditions existing or alleged to have existed on or before the separation, between or among us or any of our subsidiaries, on the one hand, and Alcan or any of its subsidiaries other than us, on the other hand, except as expressly set forth in the agreement. The liabilities released or discharged will include liabilities arising under any contractual agreements or arrangements existing or alleged to exist between or among any such members on or before the separation, other than the separation agreement, the ancillary agreements described below and the other agreements referred to in the separation agreement.

      We will agree to indemnify Alcan and its affiliates and each of their respective directors, officers and employees, against liabilities relating to, among other things:

      Alcan will agree to indemnify us and our affiliates and each of our respective directors, officers and employees against liabilities relating to:

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      The separation agreement will also specify procedures with respect to claims subject to indemnification and related matters.

      The separation agreement will provide that we and Alcan will indemnify each other (and our respective affiliates) with respect to certain contingent liabilities and will share the benefits of certain contingent gains. The terms of these arrangements are in the process of being established.

      Subject to Alcan’s sole and absolute discretion to determine whether to proceed with all or any part of the reorganization transactions, in addition to the actions specifically provided for elsewhere in the separation agreement, both we and Alcan have agreed to use our commercially reasonable efforts, prior to, on and after the separation, to take, or cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary, proper or advisable under applicable laws and agreements to complete the transactions contemplated by the agreement and the other ancillary agreements described below.

      Except with the written approval of the other party and subject to certain exceptions provided in the agreement, we and Alcan will agree not to directly or indirectly solicit for employment or recruit the employees of the other party or one of its affiliates, or induce or attempt to induce any employee of the other party or one of its affiliates to terminate his or her relationship with that other party or affiliate for a period of two years following the separation, or enter into any employment, consulting, independent contractor or similar agreement with any employee or former employee of the other party or one of its affiliates, until one year after the effective date of the termination of such employee’s employment with the other party or one of its affiliates, as applicable.

      We will agree not to engage, directly or indirectly, in any manner whatsoever, for a period of five years following the separation, in the production and sale of certain products for the plate and aerospace markets, unless expressly permitted to do so under the terms of the agreement.

      We will agree (1) not to undergo a change of control event, as defined in the separation agreement, for a period of 12 months after the separation, and (2) in the event of a change of control (including a change of control achieved in an indirect manner), during the five-year period following the separation, to provide Alcan, within 30 days thereafter a written undertaking of the acquirer that such acquirer shall be bound by the non-compete covenants set forth in the separation agreement during the remainder of the five-year period following the separation, to the same extent as if it had been an original party to the agreement.

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      If a change of control event occurs during the 12-month period following the separation, or if, at any time during the five-year period following the separation a change of control of our company occurs and the person or group of persons who acquired control of our company fails to execute and deliver the undertaking mentioned above or refuses, neglects or fails to comply with any of its obligations pursuant to such undertaking (each a “control-related event”), Alcan will have a number of remedies, including terminating any or all ancillary agreements described below (other than the tax sharing agreement).

Transitional services agreement

      Prior to or concurrently with the separation, we and Alcan intend to enter into a transitional services agreement pursuant to which Alcan will provide to us or we will provide to Alcan, as applicable, on an interim, transitional basis, various services, including, but not limited to, treasury administration, selected benefits administration functions, employee compensation, selected legal functions and information technology services. The agreed upon charges for these services will generally be intended to allow us or Alcan, as applicable, to recover fully the allocated costs of providing the services, plus all out-of-pocket costs and expenses.

      In general, the services will begin on the distribution date and will cover a period generally not expected to exceed 12 months following the separation. With respect to particular services, we or Alcan, depending on who is the recipient of the relevant services, may terminate the agreement with respect to one or more of those services upon prior written notice. The terms of the transitional services agreement are in the process of being established.

      With respect to all or any of the services, the agreement may be terminated by Alcan (1) upon a breach by us or any of our affiliates of the non-competition covenant set forth in the separation agreement, or (2) upon the occurrence of a control-related event (as defined under “— Separation agreement — Change of control” above).

Metal supply agreements

      Prior to or concurrently with the separation, we and Alcan intend to enter into one or more metal supply agreements pursuant to which Alcan will supply us with specified quantities of metal at a negotiated price during a specific period. This agreement is anticipated to provide us with the ability to cover some metal requirements through a fixed price purchase mechanism. The terms of this agreement are in the process of being established.

      The agreement may be terminated by Alcan (1) upon a breach by us or any of our affiliates of the non-competition covenant set forth in the separation agreement, or (2) upon the occurrence of a control-related event (as defined under “— Separation agreement — Change of control” above).

      In addition, we expect that certain metal supply agreements currently in effect between us and Alcan will remain in effect following the separation.

Foil supply agreements

      Prior to or concurrently with the separation, we and Alcan intend to enter into foil supply agreements pursuant to which we would supply Alcan with specified minimum quantities of aluminum foil conforming to specifications to be set forth in these agreements at a negotiated price during a specified period. The terms of these agreements are in the process of being established.

      The agreement may be terminated by Alcan (1) upon a breach by us or any of our affiliates of the non-competition covenant set forth in the separation agreement, or (2) upon the occurrence of a control-related event (as defined under “— Separation agreement — Change of control” above).

      In addition, we expect that certain foil supply agreements currently in effect between us and Alcan will remain in effect following the separation.

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Alumina supply agreement

      Prior to or concurrently with the separation, we and Alcan will enter into a long term alumina supply agreement pursuant to which we will purchase from Alcan, and Alcan will supply to us alumina for our primary aluminum smelter located in Aratu, Brazil. We estimate that the quantity of alumina supplied under this agreement will be approximately 80,000 tonnes of alumina per year. The agreed-upon price for each tonne of alumina delivered to us by Alcan pursuant to the agreement will be based on a specified or determinable percentage of the LME selling price for primary high grade aluminum applicable during a specified or determinable period prior to or during the period in which the alumina is supplied to us.

      The agreement may be terminated upon the mutual agreement of the parties, as a result of force majeure, or at the election of the non-defaulting party upon the occurrence of an event of default specified in the agreement.

      The agreement may also be terminated by Alcan (1) upon a breach by us or any of our affiliates of the non-competition covenant set forth in the separation agreement, or (2) upon the occurrence of a control-related event (as defined under “— Separation agreement — Change of control” above).

      In addition, we expect that certain alumina supply agreements currently in effect between us and Alcan will remain in effect following the separation.

Intellectual property agreements

      Prior to or concurrently with the separation, we and Alcan intend to enter into intellectual property agreements pursuant to which Alcan will assign or license to us a number of important patents, trademarks and other intellectual property rights owned by Alcan and required for our business. Ownership of intellectual property that is used by both us and Alcan will be owned by one of us and licensed to the other. Certain specific intellectual property rights which have been determined to be exclusively useful to us or which are required to be transferred to us for regulatory reasons will be assigned to us with no license back to Alcan.

      The agreement may be terminated by Alcan (1) upon a breach by us or any of our affiliates of the non-competition covenant set forth in the separation agreement, or (2) upon the occurrence of a control-related event (as defined under “— Separation agreement — Change of control” above).

Sierre agreement

      Prior to or concurrently with the distribution, we and Alcan intend to enter into an agreement pursuant to which (1) Alcan will sell to us on a going concern basis, the ownership of the automotive and other aluminum rolled products businesses relating to the sales and marketing output of the Sierre North Building, which is a part of the Sierre facility in Switzerland, pursuant to the provisions of the separation agreement, (2) Alcan will lease to us the Sierre North Building and the machinery and equipment located in the building on a triple net basis for a term of ten years, renewable at the option of either party and (3) Alcan will retain access to a portion (to be established) of the total production capacity of the Sierre hot mill which is located in the Sierre North Building, for output volume destined for aluminum rolled plate production. The formula for the price to be charged to Alcan for products from the Sierre hot mill will be based upon its proportionate share of the fixed production costs relating to the Sierre hot mill and the variable production costs associated with the actual scheduled hours utilized by Alcan. Under the agreement, we will agree to maintain the current standards of maintenance, management and operation of the Sierre hot mill.

      With respect to the use of the machinery or equipment in the Sierre North Building, we will agree to refrain from making or authorizing any use of it which may benefit any business relating to the sale, marketing, manufacturing, development or distribution of plate products.

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      The agreement may be terminated by Alcan (1) upon a breach by us or any of our affiliates of the non-competition covenant set forth in the separation agreement, or (2) upon the occurrence of a control-related event (as defined under “— Separation agreement — Change of control” above).

Tax sharing and disaffiliation agreement

      Prior to or immediately following the separation, we and Alcan and certain of our respective subsidiaries or affiliates intend to enter into one or more agreements (which may include the separation agreement) with respect to certain tax matters. Such agreements will include certain factual representations. They will also provide an indemnification if such representations are breached or if certain transactions are undertaken or certain actions are taken that have the effect of negatively affecting the tax treatment of the separation, including the reorganization transactions. They will further govern the disaffiliation of the tax matters of Alcan and its subsidiaries or affiliates other than us, on the one hand, and us and our subsidiaries or affiliates, on the other hand. In this respect they will allocate taxes accrued prior to the separation and after the separation as well as transfer taxes resulting therefrom. They will also allocate obligations for filing tax returns and the management of certain pending or future tax contests and create mutual collaboration obligations with respect to tax matters. The specific terms of these agreements are currently being established.

Employee matters agreement

      Prior to or concurrently with the separation, we and Alcan intend to enter into an employee matters agreement pursuant to which we will continue the employment of the employees involved with the contributed businesses on terms and conditions of employment substantially similar to those offered to such employees by Alcan prior to the separation. The terms of this agreement are in the process of being established.

      The agreement may be terminated by Alcan (1) upon a breach by us or any of our affiliates of the non-competition covenant set forth in the separation agreement, or (2) upon the occurrence of a control-related event (as defined under “— Separation agreement — Change of control” above).

Technical services agreement

      Prior to or concurrently with the separation, we and Alcan or one or more of its subsidiaries, intend to enter into technical services agreements pursuant to which (1) Alcan will provide technical support and related services to certain of our facilities in Canada, Brazil, France and Switzerland, and (2) we will provide similar services to certain Alcan facilities in Canada. These agreements are not expected to be long term agreements with the exception of the technical support agreement in Brazil and all are expected to be on arm’s length terms. The specific terms of these agreements are currently being established.

      The agreement may be terminated by Alcan (1) upon a breach by us or any of our affiliates of the non-competition covenant set forth in the separation agreement, or (2) upon the occurrence of a control-related event (as defined under “— Separation agreement — Change of control” above).

Ohle agreement

      Prior to or concurrently with the separation, we and Alcan or one or more of its subsidiaries, intend to enter into an agreement pursuant to which (1) we will lease from Alcan certain equipment used in the production of pet food containers, and (2) we will supply pet food containers to Alcan, which Alcan will market in connection with its related packaging activities. The specific terms of these arrangements are currently being established.

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Joint procurement of goods and services