As filed
    with the Securities and Exchange Commission on October 24, 2003 SECURITIES
    AND EXCHANGE COMMISSION WASHINGTON, D.C.
    20549 FORM 20-F/A [  ] REGISTRATION
    STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT
    OF 1934
    OR [X] ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    for the fiscal year ended December 31, 2002 
    OR [  ] TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission
    File number: 1-14110  (Exact
    name of Registrant as specified in its charter) N/A
      France(Translation
          of Registrants name into English)
      (Jurisdiction
          of incorporation or organization) 7,
    Place du Chancelier Adenauer, 75116 Paris, France 
    Telephone: +33 (1) 56 28 20 00 (Address of principal
    executive offices) Securities registered or to be registered pursuant to Section 12(b) of the Act: Name
        of each exchangeTitle
        of each class:
      
      on
        which registeredCommon
        Shares "A", nominal value
      
      New
        York Stock Exchange15.25
        Euros per Common ShareAmerican
        Depositary Shares
      
      New
        York Stock Exchange Securities registered or to be registered pursuant to Section 12(g) of the Act: None Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None Indicate the number of outstanding shares of each of the issuers classes of capital or common stock as of the close of the period covered by the annual report: Common
        Shares "A", nominal value € 15.25 per share
      ...................................................................................................................................................
      81,422,639Preferred
        Shares "B", nominal value € 15.25 per share
      ...................................................................................................................................................
      1,091,044  Indicate by check
  mark whether the registrant (1) has filed all reports required to be filed by
  Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
  12 months (or for such shorter period that the registrant was required to file
  such reports), and (2) has been subject to such filing requirements for the
  past 90 days. Yes:[X]
    No:
        [  ] Indicate by check mark which financial statement item the registrant has elected to follow: Item
        17: [  ]
    Item
        18: [X]


1


»Tables
    of Contents Explanatory
        Note
      p.3Presentation
        of Information
      p.3Cautionary
        Statement Regarding
      p.4Forward
        Looking StatementsItem
        1
      p.5Item
        2
      p.6Item
        3
      p.7Item
        4
      p.15Item
        5
      p.73Item
        6
      p.103Item
        7
      p.121Item
        8
      p.123Item
        9
      p.125Item
        10
      p.133Item
        11
      p.161Item
        12
      p.163Item
        13
      p.164Item
        14
      p.165Item
        15
      p.166Item
        16
      p.167Item
        17
      p.168Item
        18
      p.169Item
        19
      p.170


2


»Explanatory
    Note This
          Annual Report on Form 20-F/A amends the Annual Report on Form 20-F filed
          by Pechiney on March 25, 2003.
        The amendment includes restated financial information as of December
          31, 2001 and 2000 and for each of the years ended December 31, 2002,
          2001 and 2000.
        The
          principal effect of the restatement of financial information is to include
          Pechiney's subsidiary Pechiney Far East within the scope of consolidation
          for the years ended December 31, 2000 and 2001. For further information,
          see Notes 1 and 25 to our Consolidated Financial Statements.
      
      As
          a result, recorded net sales have increased by €458 million (or 4.1%)
          in 2001 and by €195 million (or 1.8%) in 2000, recorded net loss has
          increased by €5 million (or 10.0%) in 2002 and recorded net income has
          increased by €1 million (or 0.4%) in 2001 and by €4 million (or 1.3%)
          in 2000.
        The filing of this Annual Report on Form 20-F/A should not be understood
          to mean that all statements contained in this document are true or complete
          as of any date subsequent to March 25, 2003. You should not consider
          this amendment to be a reaffirmation or reiteration of any forward-looking
          statements from the original filing that may be reproduced in this amendment.  »Presentation
    of Information The Company
          publishes its Consolidated Financial Statements in euros ("euros" or
          "€"). However, the Companys financial statements for 1998
          were originally prepared in French francs, and have been translated
          into euros for purposes of this document at the rate of FF 6.55957 =
          € 1.00, the applicable rate established on January 1, 1999. The
          euro did not exist during 1998, and the conversion rate used may not
          reflect the FF/euro exchange rate that would have applied if the euro
          had existed at such times. Solely for the convenience of the reader,
          this document contains translations of certain euro amounts into U.S.
          dollars at specified rates. These translations should not be construed
          as representations that the converted amounts actually represent such
          U.S. dollar amounts or could have been (at the relevant date) converted
          into U.S. dollars at the rates indicated or at any other rate. Unless
          otherwise stated, the translations of euros into U.S. dollars have been
          made at the rate published by the European Central Bank (the "ECB Rate")
          of € 1.00 = $1.0487 (or $1.00 = € 0.9536) on December 31,
          2002, the last trading day for the year 2002. See "Item 3. Key Information
          - Exchange Rate Information" for information regarding the euro/U.S.
          dollar exchange rate from January 1, 2002 to the present.
        In this document,
          references to "United States" are to the United States of America, references
          to "U.S. dollars" or "$" are to United States dollars and references
          to "tons" or "t" are to metric tons (1,000 kilograms or 2,204 pounds).
          References to "Euronext Paris" are to the integrated national dealing
          system through which listed securities are traded in France. References
          to "LME quotations" are to three-month forward quotations on the London
          Metal Exchange.
      
      As used herein,
          the term "Company" refers to Pechiney without its consolidated subsidiaries
          and the terms "Pechiney" and "Group" refer to the Company together with
          its consolidated subsidiaries. References to "Common Shares "A"" are
          to the Companys Class "A" shares, nominal value € 15.25 per
          Share, and references to "Preferred Shares "B"" are to the Companys
          Class "B" Shares, nominal value € 15.25 per Share. References to
          "share capital" are to the nominal amount of Common Shares "A" and Preferred
          Shares "B" and references to "voting rights" are to the rights to vote
          in general meetings of the holders of Common Shares "A" or Preferred
          Shares "B" (see "Item 10. Additional Information - Description of Share
          Capital").
        As used herein,
          the term "Consolidated Financial Statements" refers to the Companys
          audited consolidated financial statements as at and for the three years
          ended December 31, 2002.
        Various amounts
          and percentages set out in this document have been rounded and, accordingly,
          may not total.
        Except as
          otherwise noted herein, references to "Europe" do not include Russia
          or Turkey. Data regarding primary aluminum production in the "Western
          World" refers to worldwide production excluding China, CIS, and Eastern
          and Central European countries.


3


»Cautionary
    Statement Regarding Forward Looking Statements Certain of
          the statements contained in this document that are not historical facts,
          including, without limitation, certain statements made in the sections
          entitled "Item 3. Key Information - Risk Factors", "Item 4. Information
          on the Company" and "Item 5. Operating and Financial Review and Prospects",
          are statements of future expectations. Forward-looking statements can
          be identified by the use of forward-looking terminology such as "believes",
          "expects", "may", "is expected to", "will", "will continue", "should",
          "would be", "seeks" or "anticipates" or similar expressions or the negative
          thereof or other variations thereof or comparable terminology, or by
          discussions of strategy, plans or intentions. Although the Company believes
          its expectations are based on reasonable assumptions, these forward-looking
          statements are subject to numerous risks and uncertainties. Risks that
          could cause actual results to differ materially from the results anticipated
          in the forward-looking statements include, among other things:
        changes
            in exchange rates, including particularly the exchange rate of the
            euro to the U.S. dollar;
          changes
            in aluminum prices;
          changes
            in economic trends and seasonality;
      
      increasing
            levels of competition in France and other international aluminum markets;
          customers
            and market concentration;
          pricing
            and availability;
          changes
            in laws and regulations;
          risks and
            uncertainties attendant to doing business in numerous countries which
            may be exposed to, or may have recently experienced, economic or governmental
            instability;
          general
            competitive and market factors on a global, regional and/or national
            basis;
          raw materials
            and energy.Readers are
          urged to carefully review and consider the various disclosures made
          by the Company that attempt to advise interested parties of the factors
          affecting the Companys business, including the disclosures made
          under the captions "Item 3. Key Information - Risk Factors", "Item 4.
          Information on the Company" and "Item 5. Operating and Financial Review
          and Prospects" in this annual report, as well as the Companys
          other periodic reports on Form 6-K filed with the Securities and Exchange
          Commission.  »Cautionary
    Statement Regarding Market Shares Unless otherwise
          indicated, statistical and market trend information, as well as statements
          related to market position and competitive data, are based on the Companys
          internal statistics and/or estimates, which are in turn
      
      based on the
          Companys own research and various publicly available sources.


4


»Identity
          of Directors, Senior Management and Advisers
      Item
          1   Not
    Applicable.


5


»Offer
          Statistics and Expected Timetable
      Item
            2   Not Applicable.


6


»Key
          Information
      Item
          3 Selected
    Financial Data The
          following table sets forth selected consolidated financial data for
          the Group for the periods indicated. These data were derived from the
          Consolidated Financial Statements of the Group prepared in accordance
          with French generally accepted accounting principles ("GAAP"), which
          differ in certain significant respects from U.S. GAAP. This information
          is qualified by reference to, and should be read in conjunction with,
          the Consolidated Financial Statements, the related Notes thereto, and
          "Item 5. Operating and Financial Review and Prospects" included elsewhere
          in this Annual Report.
        Beginning
          with the financial statements for fiscal year 2001, Pechiney has prepared
          its financial statements in accordance with French GAAP only, and provides
          a description of the principal differences between French GAAP and U.S.
          GAAP and a reconciliation to U.S. GAAP of consolidated net income and
          shareholders equity. The use of a single set of accounting principles
          prevents any confusion that may be generated by the simultaneous publication
          of two different sets of financial statements and
      
      notes
          and comments thereto. The application of French GAAP is consistent with
          the standards used by the Companys internal reporting system.
        The
          impact of the differences between French GAAP and U.S. GAAP is presented
          in Note 25 to the Consolidated Financial Statements for a description
          of the principal differences between French GAAP and U.S. GAAP, as they
          relate to the Company and its consolidated subsidiaries and for a reconciliation
          to U.S. GAAP of net income and shareholders equity.
        In
          addition, the Company has changed its presentation of goodwill amortization
          in its Consolidated Financial Statements for the 2002 fiscal year with
          respect to previous years, impacting several line items on the Companys
          income statement. Accordingly, income from operations and other line
          items for the fiscal years 2001, 2000 and previously have been reclassified
          in this Annual Report to conform to the new accounting treatment.


7


»Key
  Information   SELECTED
        CONSOLIDATED DATAYear
        ended and as at December 31
      (1)2002
      
      (1)(2)2002
      
      (1)2001
      
      (1)2000
      
      (1)1999
      
      (1)1998(in
        millions, except per share, per cipand
        per ads data)
      (€)
      
      ($)
      
      (€)
      
      (€)
      
      (€)
      
      (€)(Restated)(5)
      
      (Restated)(5)
      
      (Restated)(5)
      
      (Restated)(5)Income
        Statement Data:Net
        sales
      11,909
      
      12,489
      
      11,512
      
      10,874
      
      9,507
      
      9,836Other
        operating revenues
      144
      
      151
      
      155
      
      153
      
      139
      
      176Cost
        of goods sold (excluding depreciation)
      (10,611)
      
      (11,128)
      
      (10,070)
      
      (9,411)
      
      (8,147)
      
      (8,442)Selling,
        general and administrative expense
      (610)
      
      (640)
      
      (620)
      
      (564)
      
      (529)
      
      (529)Research
        and development expense
      (90)
      
      (94)
      
      (97)
      
      (90)
      
      (79)
      
      (92)Depreciation
        and amortization
      (335)
      
      (351)
      
      (328)
      
      (303)
      
      (311)
      
      (318)Long-lived
        assets writedown
      (102)
      
      (107)
      
      (19)
      
      (13)
      
      (13)
      
      (8)Restructuring
        expense
      (43)
      
      (45)
      
      (56)
      
      (16)
      
      (25)
      
      (7)Other
        income (expense)
      (103)
      
      (108)
      
      10
      
      (8)
      
      (193)
      
      (3)Income
        (loss) from operations
      159
      
      167
      
      487
      
      622
      
      349
      
      613Financial
        expense, net
      (49)
      
      (51)
      
      (68)
      
      (68)
      
      (95)
      
      (142)Income
        (loss)
      110
      
      116
      
      419
      
      554
      
      254
      
      471Income
        tax (expense) benefit
      (39)
      
      (41)
      
      (130)
      
      (172)
      
      15
      
      (98)Income
        (loss) from consolidated companies
      71
      
      75
      
      289
      
      382
      
      269
      
      373Equity
        in net earnings of affiliates
      3
      
      3
      
      24
      
      (13)
      
      41
      
      10Minority
        interests
      0
      
      0
      
      (28)
      
      (31)
      
      (11)
      
      (20)Income
        (loss) from continuing operations
      74
      
      78
      
      285
      
      338
      
      299
      
      363Goodwill
        amortization
      (129)
      
      (135)
      
      (51)
      
      (20)
      
      (39)
      
      (52)Discontinued
        operations
      -
      
      -
      
      -
      
      -
      
      -
      
      -Cumulative
        effect of accounting changes
      -
      
      -
      
      -
      
      -
      
      -
      
      -Net
        income (loss)
      (55)
      
      (57)
      
      234
      
      318
      
      260
      
      311Per
        Share "A", Share "B"/CIP and ADS Data:(3)Net
        income (loss) available for distribution
      (55)
      
      (57)
      
      234
      
      318
      
      260
      
      311-
        Per Common Share "A"
      (0.72)
      
      (0.76)
      
      2.94
      
      3.94
      
      3.17
      
      3.80-
        Per Preferred Share "B"/CIP
      0.73
      
      0.77
      
      4.39
      
      5.39
      
      4.62
      
      5.25-
        Per ADS
      (0.36)
      
      (0.38)
      
      1.47
      
      1.97
      
      1.58
      
      1.90Cash
        dividends declared(4)-
        Per Common Share "A"
      1.00
      
      1.05
      
      1.00
      
      1.00
      
      0.81
      
      0.80-
        Per Preferred Share "B"/CIP
      1.65
      
      1.73
      
      1.79
      
      3.31
      
      0.81
      
      1.96-
        Per ADS
      0.50
      
      0.52
      
      0.50
      
      0.50
      
      0.40
      
      0.40Amounts
        in accordance with U.S. GAAPNet
        sales
      11,918
      
      12,498
      
      11,501Income
        from operations
      175
      
      184
      
      441Net
        income
      (9)
      
      (9)
      
      195Basic
        earnings per share "A"
      (0.13)
      
      (0.14)
      
      2.43Diluted
        earnings per share "A"
      (0.13)
      
      (0.14)
      
      2.92Balance
        Sheet Data:Cash
        and marketable securities
      436
      
      457
      
      445
      
      463
      
      468
      
      1,033Property,
        plant and equipment - net
      2,832
      
      2,970
      
      2,997
      
      2,476
      
      2,381
      
      2,770Total
        assets
      8,234
      
      8,635
      
      8,699
      
      8,087
      
      7,687
      
      9,282Long-term
        debt less current portion
      1,465
      
      1,536
      
      971
      
      734
      
      903
      
      1,307Shareholders
        equity (Group share)
      3,014
      
      3,161
      
      3,400
      
      3,277
      
      3,026
      
      2,624Minority
        interests
      149
      
      156
      
      169
      
      169
      
      153
      
      149Share
        capital (in billions)
      1.26
      
      1.32
      
      1.25
      
      1.25
      
      1.25
      
      1.25Number
        of shares
      82,513,683
      
      82,513,683
      
      81,626,190
      
      81,585,190
      
      81,576,212
      
      81,560,387 (1)
      Derived
        from the Groups audited Consolidated Financial Statements prepared
        in accordance with French GAAP. For the year ended December 31, 1998 amounts
        have been translated from French francs to euros using the official rate
        as of January 1, 1999.(2)
      The
        U.S. dollar amounts in this column have been translated solely for the
        convenience of the reader at an exchange rate of 
        € 1.00 = $1.0487 (the exchange rate on the balance sheet date).(3)
      Per
        Share data is calculated based upon the weighted average number of Shares
        outstanding during each period presented (see Note 12(h) to the Consolidated
        Financial Statements).(4)
      Does
        not include the French avoir fiscal.(5)
      For
        additional information, see Notes 1 and 25 to our Consolidated Financial
        Statements.


8


»Key
          Information
      Item
          3 Exchange
    Rate Information Under the
          provisions of the Treaty on European Union negotiated at Maastricht
          in 1991 and signed by the 12 member states of the European Union in
          early 1992, a European Monetary Union (known as the "EMU") was implemented
          on January 1, 1999, and a single European currency, known as the "euro",
          was introduced. The following 12 member states participate in the EMU
          and have adopted the euro as their national currency: Austria, Belgium,
          Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands,
          Portugal and Spain. The legal rate of conversion between French francs
          and euros was established on January 1, 1999 at FF 6.55957 = €
          1.00.
        For a discussion
          of the impact of currency fluctuations on the Groups financial
          condition and results of operations, see "Item 5. Operating and Financial
          Review and Prospects - General Information - Currency Fluctuations".
      
      The following
          table sets forth, for the periods and dates indicated, certain information
          concerning the noon buying rate in New York City, as certified for customs
          purposes by the Federal Reserve Bank of New York (the "Noon Buying Rate")
          for cable transfers:
        in French
            francs for 1998 (expressed in French francs per $1.00, and converted
            for informational purposes into U.S. dollars per € 1.00 at the
            French franc/euro conversion rate established on January 1, 1999);
          in euros
            for subsequent periods (expressed in U.S. dollars per € 1.00).These rates
          are provided solely for the convenience of the reader and are not the
          rates used by the Company in the preparation of its Consolidated Financial
          Statements included elsewhere in this Annual Report. The Group uses
          the ECB Rate for its internal financial reporting and for the presentation
          of certain U.S. dollar/French franc and U.S. dollar/euro translations
          set forth herein (see "Presentation of Information"). No representation
          is made that French francs or euros could have been, or could be, converted
          into U.S. dollars at these rates or at any other rate. Period-end
          rate
      
      (1)Average
          rate
      
      Euro
          High Point
      
      Euro
          Low Point($/€)
      
      (FF/$)
      
      ($/€)
      
      (FF/$)
      
      ($/€)
      
      (FF/$)
      
      ($/€)
      
      (FF/$)October
        2003 (Through October 17)
      
      1.16
      
      -
      
      1.17
      
      -
      
      1.18
      
      -
      
      1.16
      
      -September
        2003
      
      1.17
      
      -
      
      1.13
      
      -
      
      1.17
      
      -
      
      1.08
      
      -August
        2003
      
      1.10
      
      -
      
      1.11
      
      -
      
      1.13
      
      -
      
      1.09
      
      -July
        2003
      
      1.12
      
      -
      
      1.14
      
      -
      
      1.16
      
      -
      
      1.12
      
      -June
        2003
      
      1.15
      
      -
      
      1.17
      
      -
      
      1.19
      
      -
      
      1.14
      
      -May
        2003
      
      1.17
      
      -
      
      1.16
      
      -
      
      1.19
      
      -
      
      1.12
      
      -April
        2003
      
      1.12
      
      -
      
      1.09
      
      -
      
      1.12
      
      -
      
      1.06
      
      -2002
      
      1.05
      
      -
      
      0.95
      
      -
      
      1.05
      
      -
      
      0.86
      
      -2001
      
      0.89
      
      -
      
      0.89
      
      -
      
      0.95
      
      -
      
      0.84
      
      -2000
      
      0.94
      
      -
      
      0.92
      
      -
      
      1.03
      
      -
      
      0.83
      
      -1999
      
      1.01
      
      -
      
      1.06
      
      -
      
      1.18
      
      -
      
      1.00
      
      -1998
      
      
      
      FF
        5.62
      
      
      
      FF
        5.90
      
      
      
      FF
        5.39
      
      
      
      FF
        6.21 (1)   The
        yearly averages of the Noon Buying Rates for French francs or euros, as
        the case may be, were calculated using the average Noon Buying Rate on
        the last business day of each month during the relevant period. The monthly
        averages were calculated using the average of the daily Noon Buying Rates
        for euros within each month.


9


»Key
  Information Risk
    Factors Risk
    factors relating to our industry and markets Our business is subject to fluctuations in world aluminum prices which could negatively affect our earnings. We are exposed
          to the risk of fluctuations in the price of aluminum on the London Metal
          Exchange (LME) (see "Item 5. Operating and Financial Review and Prospects
          - General Information - Volatility of World Aluminum Prices"), which
          determines the price at which we are able to sell aluminum in the market.
          If the price of aluminum on the London Metal Exchange declines substantially,
          our operating results may deteriorate. Since the world price of aluminum
          (quoted on the LME) is denominated in U.S. dollars, and a substantial
          portion of our Primary Aluminum sales is linked to U.S. dollars, the
          negative impact on our operating results of a decline in the world price
          of aluminum is generally amplified when the U.S. dollar declines in
          value vis-à-vis the euro, while it is usually attenuated if the
          U.S. dollar is strong vis-à-vis the euro. Conversely, the positive
          impact of a rise in the world price of aluminum on Primary Aluminums
          earnings from
      
      operations
          can be significantly attenuated by a weak U.S. dollar vis-à-vis
          the euro. In addition to the effort made to reduce our sensitivity to
          the effects of currency fluctuations, we may occasionaly, through specific
          short-term hedging operations, anticipate fluctuations in the world
          price of aluminum (see "Item 5. Operating and Financial Review and Prospects
          - General Information - Sensitivity of the Groups Industrial Operations
          to Fluctuations in Aluminum Prices - Primary Aluminum"). Even when we
          have entered into hedging arrangements to protect ourselves from this
          fluctuation risk, we may cease to engage in hedging arrangements in
          the future, and any existing or future hedging arrangements may not
          be successful. Fluctuations in aluminum prices could thus result in
          lower profits and a reduction in any dividends, and could cause the
          trading price of our shares to decline. Our
    business is subject to the price and availability of other raw materials. The principal
          raw materials we use in manufacturing our products are alumina, aluminum
          and plastics. The prices of many of the raw materials we use depend
          on supply and demand relationships at a worldwide level, and are therefore
          subject to variation. The price of aluminum and other raw materials
          that we use, and demand for aluminum volumes, depend upon a number of
          factors, including general economic conditions, cyclical trends in our
          end-use markets and imbalances in supply. Prices for the raw materials
          we require may increase and, if they do, we may not be able to pass
          on the entire cost of the increases to our customers, which may cause
          our profitability to decline.
      
      There is a
          potential time lag between changes in prices under our purchase contracts
          and the point when we can implement a corresponding change under our
          sales contracts with our customers. As a result, we cannot necessarily
          protect ourselves from fluctuations in raw materials prices since during
          the time lag period we may have to temporarily bear the additional cost
          of the change under our purchase contracts, which could have a temporary
          negative impact on our profitability. Our
    business is subject to fluctuations in energy prices. We consume
          large volumes of energy, mainly electricity, particularly in producing
          aluminum and ferroalloys. Aluminum smelters generally require an uninterrupted
          supply of intense electrical energy, and any interruption of more than
          four hours, whatever the cause, may have a major technical, commercial
          and financial impact on the activities of the facility concerned.
      
      If energy
          costs were to rise, or if energy supplies or supply arrangements were
          disturbed, our profitability may decline, which could lead to a reduction
          in any dividends and cause the trading prices of our shares to decline.


10


»Key
          Information
      Item
          3 We
    may be subject to unforeseen environmental costs and liabilities that could
    adversely affect our financial condition and results. We
          are subject to a broad range of environmental laws and regulations in
          each of the jurisdictions in which we operate. These laws and regulations
          impose increasingly stringent environmental protection standards on
          us that relate, among other things, to air emissions, wastewater discharges,
          the use and handling of hazardous materials, waste disposal practices,
          and cleanup of environmental contamination. Such laws and regulations
          expose us to the risk of substantial costs and liabilities, including
          liabilities associated with assets that we have sold and activities
          that we have discontinued.
        It is our
          policy to identify and, to the extent possible, quantify the costs associated
          with the potential clean-up of sites where we could incur liability.
          There can be no assurance, however, that the amounts we have budgeted
          and provisioned will enable us to satisfy our environmental obligations,
          especially in light of several factors: the rapid development of increasingly
      
      stringent
          environmental laws and regulations and of their interpretation by the
          courts; governmental orders to carry out additional compliance on certain
          sites not initially included in remediation in progress; and potential
          liability of the Group to remediate sites for which provisions have
          not been established. Our accounting reserves may not be sufficient
          to cover future environmental liabilities. The amounts of these liabilities
          could result in lower profits, lead to a reduction in any dividends
          and cause the trading prices of our shares to decline.
        In addition,
          future developments, such as changes in law or new information regarding
          environmental conditions, could result in increased environmental costs
          and liabilities that could have a material adverse effect on our future
          financial condition and results of operations or our consolidated financial
          position. We
    may be subject to liability related to the use of hazardous substances in
    production. We
          use a variety of materials and chemicals in our manufacturing activities.
          In the event that any of these substances, such as aluminum or solvents
          such as glycol ethers, proves to be toxic, we may be liable for increased
          costs for health-related claims or removal or retreatment of such substances. Although
          we do not currently use asbestos or its derivatives as raw materials
          in our manufacturing process, there is some risk of asbestos exposure
          associated with the use of consumer goods in the manufacturing
      
      process, as
          well as with maintenance work on our buildings or ovens. We have implemented
          a strict system by which residual asbestos materials, such as fibrocement,
          are identified. We have also implemented a program that assures the
          protection and medical surveillance of the workforce. In the event that
          the provisions we have set aside to eliminate asbestos in our facilities
          is insufficient, our financial condition and results of operations could
          be harmed. Risk
    Factors Relating to our Group Fluctuations
    in the euro/U.S. dollar exchange rate may lead our financial results to decline. Fluctuations
          in the euro/U.S. dollar exchange rate could result in lower profits
          and a reduction in any dividends, and could cause the trading prices
          of our shares to decline. In 2002, 40%
          of our production was located in North America and in countries whose
          currency is linked to the U.S. dollar. In addition, a substantial portion
          of Primary Aluminum sales is denominated in or linked to U.S. dollars
          and is therefore subject to fluctuations in the euro/U.S. dollar exchange
          rate. Since most of our sales are denominated in currencies other than
          the euro, foreign exchange rate fluctuations have a significant
      
      impact on
          our operating income. We strive to reduce our sensitivity to the effects
          of currency fluctuations, in particular the fluctuations between the
          euro and the U.S. dollar or between the euro and currencies linked to
          the U.S. dollar, by financing our foreign investments in the currency
          of the country in question, on the one hand, and by hedging our foreign
          exchange risks, primarily through centralized management of such risks,
          on the other (see "Item 5. Operating and Financial Review and Prospects
          - General Information - Derivative Financial Instruments - Currency
          Fluctuations"). We
    are exposed to market and credit risk in derivatives. We use derivatives
          both to hedge our exposure to changes in exchange rates, interest rates
          and metals prices, among other things, and in our trading activities.
          With respect to our use of derivatives, we bear the risk of market movements
          and the risk of default by our counterparties. We have in the past experienced
          losses with respect to our use of derivatives. For
      
      further discussion
          of these matters, please refer to "Item 5. Operating and Financial Review
          and Prospects - General Information - Derivative Financial Instruments".
          Future losses of this nature nature could result in lower profits, which
          could lead to a reduction in any dividends and cause the trading prices
          of our shares to decline.


11


»Key
  Information We are exposed to risks in trading. We engage
          in substantial trading activities, including the purchase and sale of
          forwards, futures and options, both on and off exchanges. Although we
          believe we have established appropriate risk management procedures,
          trading activities involve elements of forecasting, and we bear the
          risk of market movements and the risk of default by our counterparties.
          For further
      
      discussion
          of our trading activities, please refer to "Item 4. Information on the
          Company - International Trade". Any of these risks could result in lower
          profits, which could lead to a reduction in any dividends and cause
          the trading prices of our shares to decline. Changes
    in interest rates could increase our cost of borrowing. A major portion
          of our financial debt is subject to variable interest rates. This results
          in exposure to interest rate fluctuations, which we strive to anticipate
          by using certain interest rate derivative instruments. (See "Item 5.
          Operating and Financial Review and Prospects - General Information -
          Derivative Financial Instruments - Interest Rate Fluctuations".) There
          can be no
      
      assurance
          that our risk management initiatives can adequately compensate for adverse
          changes in interest rates. An increase in interest rates could increase
          the cost of financing our existing debt and make future borrowings more
          expensive, which could harm our financial condition and results of operations. Uninsured
    damage to or loss of industrial property could have a negative impact on our
    financial results. Our ability
          to insure against the risk of industrial property damage or loss is
          subject to prevention audits commissioned by our insurance companies.
          Insurance companies evaluate the quality of risk control at industrial
          facilities to determine appropriate insurance premiums and coverage.
          Negative evaluations resulting from these prevention audits could limit
          the availability of our insurance coverage, or significantly increase
          the cost of our premiums. The percentage of physical assets designated
          as Highly Protected Risks decreased this year from 68% as of January
          1, 2002 to 55% as of January 1, 2003, with the loss of rating of six
          major facilities in 2002.
      
      While we have
          implemented action plans for 2003 designed to regain Highly Protected
          ratings for our facilities, there can no assurance that these efforts
          will be successful in increasing the coverage or decreasing the cost
          of insurance, or in reducing the probability and seriousness of financial
          loss in the event of an accident.
        Increased
          cost or other difficulties in obtaining insurance could harm our financial
          condition and results of operations. We
    are exposed to risks in developing countries, 
    which could lower our profitability and affect the value of our assets there. Our operations
          in developing countries may be more vulnerable to risks of war, civil
          disturbances and adverse governmental action than our operations in
          the rest of the world. Governmental action, for example, may disrupt
          or impede operations and markets, restrict the movement of funds, impose
          limitations on foreign exchange transactions or result in the
      
      expropriation
          of assets. Certain of the countries in which we operate have been subject
          to economic instability in recent periods. Any of these factors could
          adversely affect our operations in those countries and result in lower
          profits, which could lead to a reduction in any dividends and cause
          the trading prices of our shares to decline. Certain
    of our business areas have a relatively small number of customers. 
    The loss of one or more of them could result in lower sales. Our Aerospace
          business, and to a lesser degree the Pechiney Automotive division, both
          of which are included in the Aluminum Conversion segment, rely, to varying
          degrees, upon a relatively small number of major customers for a significant
          portion of their sales. Although we believe we have good working relationships
          with these customers, if our existing relationships with them are discontinued
          in the
      
      future, or
          we do not replace them if we lose them as customers, our financial results
          may be harmed, which could lead to a reduction in any dividends and
          cause the trading prices of our shares to decline. Our
    technology may become obsolete. We are committed
          to protecting our trade secrets and investing in research and development
          in order to maintain the benefits of our technology in the future. However,
          we may not be able to protect, or continue to develop, some of our proprietary
          information in the future. In addition, we may be
      
      subject to
          litigation in the future regarding the use of proprietary information
          that we have developed. For further discussion of our investments in
          technology, please refer to "Item 4. Information on the Company - Business
          Overview - Intellectual Property" and "- Litigation".


12


»Key
          Information
      Item
          3 Risk
    factors relating to our shares and ADSs We may
    not be able to pay dividends on our common shares. Whether we
          are able to pay dividends in the future, and if so, at what time, will
          depend upon our future earnings and financial condition. In addition,
          the holders of our Preferred Shares "B" are currently still entitled
          to a cumulative preferential dividend of € 1.45 per share per year,
          together with additional priority dividends based on the Companys
          net income excluding certain nonrecurring items, and these payments
          must be made from available funds before we can make any decision whether
          to pay dividends to holders of our Common Shares "A" and the corresponding
          ADSs. For further discussion of these rights, please refer to "Item
          10. Additional Information - Description of Share Capital - General
          Provisions Applicable to Shareholders - Dividend and Liquidation Rights".
          The number of outstanding Preferred Shares "B" is much
      
      smaller than
          the number of outstanding Common Shares "A" and corresponding ADSs,
          and certain holders of Preferred Shares "B" have proposed a resolution
          which, if adopted, would lead to the conversion of the remaining Preferred
          Shares "B" into Common Shares "B" and the consequent disappearance of
          the preferential and priority dividend rights associated with the Preferred
          Shares "B". Unless and until that resolution is approved, however, the
          rights associated with our Preferred Shares "B" could, under certain
          circumstances, lead us to declare reduced dividends or no dividends
          to holders of our Common Shares "A" and the corresponding ADSs, which
          could cause the trading prices of our Common Shares "A" and the corresponding
          ADSs to decline. The trading prices of our ADSs depend in part on the U.S. dollar exchange rate. Our Common
          Shares "A" trade in euros and our ADSs trade in U.S. dollars. Any dividends
          we declare are also denominated in euros. As a result, the trading prices
          of our ADSs in U.S. dollars may fluctuate as the U.S. dollar/ euro exchange
          rate fluctuates, and any material decrease in the value of the euro
          in relation to the U.S. dollar may cause the trading prices of our ADSs
          to decline.
        Moreover,
          there is currently a resolution proposed by two of the Pechiney's shareholders
          to convert Preferred Shares "B" into Common Shares "A" after the payment
          date of the dividend proposed in respect of the 2002 fiscal
      
      year, and
          this resolution will be presented to the annual General Shareholders'
          Meeting scheduled to take place on April 3, 2003. For a more detailed
          description of this proposed resolution, see "Item 9. The Offer and
          Listing - Price History of the Shares - Preferred Shares "B".
        In addition,
          for a discussion of our business exposure to fluctuations in currency
          exchange rates, please refer to " Risk factors relating to
          our Group  Fluctuations
          in euro/U.S. dollar exchange rate may lead our financial results to
          decline".


13


» Key
  Information


14


»Information
          on the Company
      Item
          4 Overview
    of the Pechiney Group The
          Pechiney Group operates in two core businesses, in which it ranks among
          the global market leaders(1):
          the production of primary aluminum and fabricated aluminum products
          and the production of packaging materials. The Group believes that it
          is Europes second and the worlds fifth largest producer
          of primary aluminum on the basis of 2002 obtainable production capacities
          and one of the leading European producers of flat-rolled aluminum products
          on the basis of 2002 sales volume, with strong positions in aerospace,
          cansheet, automotive and foil & thin foil markets. Its aluminum
          technology is recognized as some of the most efficient in the world.
          The Group believes that it is also one of the world leaders in the production
          of packaging materials for the food, healthcare and beauty industries
          on the basis of 2002 sales. It is the worlds largest producer
          of collapsible tubes. The Groups other activities include the
          production of ferroalloys and international trade.
      
      Through
          its unrelenting efforts to reduce indebtedness and improve competitiveness
          over the last few years, Pechiney believes it has the resources it needs
          to finance its development. Since April 2000, the Group committed, on
          an average annual basis, more than € 500 million per year to growth
          projects, in addition to maintenance expenditures. This strategy is
          primarily designed to ensure the Group of leading positions in each
          of its businesses in terms of market share and technological expertise.
          Nevertheless, this strategy will only be fully effective if the Group
          makes improving its cost position a constant priority. The Continuous
          Improvement System, whose mechanisms and objectives were presented in
          December 2001, is the cornerstone of profitable growth and the priority
          of Pechiney.
        The
          figures relating to the fiscal years 2000, 2001 and 2002 presented in
          this document were prepared in euros.


(1)
          Positions and market shares presented in this item or based on internal
          estimates. 15


»Information
  on the Company Selected
    Consolidated Financial Data millions
        of euros (except net income, and dividend paid per share in euros )
      2002
      
      2001
      
      2000(Restated)(1)
      
      (Restated)(1)
      
      (Restated)(1)Net
        sales
      11,909
      
      11,512
      
      10,874Net
        income
      (55)
      
      234
      
      318Basic
        net income per common share "A"
      (0.72)
      
      2.94
      
      3.94Net
        cash provided by operating activities
      629
      
      588
      
      396Net
        cash used in investing activities
      580
      
      947
      
      546Net
        cash used in financing activities
      (104)
      
      354
      
      (361)Dividend
        paid for the year per common share "A" (net)
      1.00
      
      1.00
      
      1.00Capital
        stock
      1,258
      
      1,245
      
      1,244Shareholders
        equity (Group share)
      3,014
      
      3,400
      
      3,277Shareholders
        equity and minority interests
      3,163
      
      3,569
      
      3,446Net
        indebtedness
      1,437
      
      1,473
      
      869Non-current
        assets
      4,840
      
      5,031
      
      4,258Total
        Assets
      8,234
      
      8,699
      
      8,087Other
        measuresEarnings
        from Operations(2)
      407
      
      552
      
      659 (1)
      For
        additional information, see Notes 1 and 25 to our Consolidated Financial
        Statements.(2)
      Earnings
        from Operations consists of Net Sales, Other Operating Revenues, Cost
        of Goods Sold (excluding depreciation), Selling, General and Administrative
        Expense, Research and Development Expense and Depreciation and Amortization
        (excluding Goodwill Amortization). Earnings from Operations does not include
        Goodwill Amortization, Long-lived Assets Writedown, Restructuring Expense
        or Other Income (expense). These items are considered to be operating
        income/expenses. Management
        believes that Earnings from Operations is useful to investors since it
        is permitted by the French accounting standard setter and is used by many
        French public companies, is used by management as a key indicator of the
        performance of the Group's segments and is closely monitored by analysts
        in France.
        Earnings from Operations is reconciled to Net income as follows :  2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)Net
        income
      (55)
      
      234
      
      318Add
        back income (expense):Exceptional
        Goodwill Amortization
      (98)
      
      (22)
      
      0Goodwill
        amortization
      (31)
      
      (29)
      
      (20)Minority
        interests
      0
      
      (28)
      
      (31)Equity
        in net earnings of affiliates
      3
      
      24
      
      (13)Income
        tax (expense) benefit
      (39)
      
      (130)
      
      (172)Financial
        expense, net
      (49)
      
      (68)
      
      (68)Other
        income (expense)
      (103)
      
      10
      
      (8)Restructuring
        expense and long-lived asset write-downs
      (145)
      
      (75)
      
      (29)Earnings
        from Operations
      407
      
      552
      
      659 Aluminum The Groups
          Aluminum sector is comprised of two segments: Primary Aluminum and Aluminum
          Conversion.
        Primary Aluminum
          is Europes second and the worlds fifth largest producer
          of primary aluminum on the basis of 2002 obtainable production
      
      capacity (1,240,000
          metric tons). It also holds interests in companies that produce bauxite
          and alumina. Primary Aluminum also licenses alumina and aluminum production
          technology and related equipment and believes that approximately 80%
          of world smelting capacity recently put into operation in Western World
          uses the Groups technology.


16


»Information
          on the Company
      Item
          4  Aluminum Conversion
          includes the activities of four divisions, which regroup activities
          organized around industrial or commercial goals shared in common:
        The Aerospace,
            Transport, Industry division regroups the production of aluminum rolled
            products for transport markets (aerospace, sea and ground, excluding
            automotive) and industry, as well as the production of hard alloy
            extrusions;
          The Cans,
            Automotive, Standard Rolled Products division regroups the production
            of aluminum rolled products at Neuf Brisach for the can, automotive
            and standard rolled products market;
          The Foil
            and Thin Foil / Specialty Products division includes Pechiney
      
      Eurofoils
            foil and thin foil activities at Dudelange, Flémalle and Rugles,
            as well as different specialty activities (circles, precoated sheets,
            etc.);
          The Extrusions,
            Casting Alloys, Automotive division manufactures and markets aluminum
            soft alloy sections for the construction, transport and equipment
            markets, as well as casting alloys used almost exclusively in the
            automotive market. The division is also in charge of Pechiney Automotive,
            a cross-division structure specially dedicated to the automotive market.On the basis of
        2002 production, the Group believes it is one of the main European producers
        of aluminum rolled products. Packaging   In 2002, the
          Groups Packaging sector regrouped the following activities:
        Plastic
            Packaging, an important North American and European producer of flexible
            packaging for the food, healthcare and specialty markets;
          Cebal Tubes
            Europe and Cebal Tubes Americas, which together are the world leader
            in the manufacture of flexible plastic, laminated and aluminum tubes
            for the cosmetics, personal care and healthcare markets on the basis
            of 2002 production;
      
      Cebal Aerosols,
            the worlds largest manufacturer of seamless aluminum aerosol
            and spray cans;
          Techpack
            International (TPI), one of the worlds principal producers of
            plastic packaging for makeup, perfume and cosmetics on the basis of
            2002 sales;
          Pechiney
            Capsules, which produces caps and overcaps for wines and spirits.  Ferroalloys
  and Other Activities   Pechiney Electrométallurgie,
          a wholly-owned subsidiary of the Group, mainly produces silicon and
          ferroalloys as well as abrasives and refractories. International
    Trade International
          Trade operates three lines of business: a worldwide network of sales
          agencies which market products manufactured by the Group and
      
      third parties;
          trading of non-ferrous metals and other basic materials; and the distribution
          of semi-finished aluminum products. New
    organization In order to
          ensure that the organization of the Pechiney Group reflects its different
          businesses, it was decided, as announced in December 2002, to divide
          aluminum activities into two distinct sectors:
        the Primary
            Aluminum sector, which now regroups in a single entity bauxite-alumina-aluminum
            production activities and ferroalloys;
          the Aluminum
            Conversion sector, comprised of rolled products, extrusions and casting
            alloys used in a wide variety of markets: aerospace, automotive, sea
            transport, rail, industry, industrial equipment, construction and
            beverage cans.
      
      This new organization
          of aluminum activities in two sectors, each of which has expertise to
          share, illustrates the Groups business-based strategy - the two
          sectors are distinct and respond to very different industrial and commercial
          approaches.
        The Group
          expects this organization to provide more simplicity and responsiveness
          through the continued deployment of the Pechiney Continuous Improvement
          System and profitable growth projects. The new organization took effect
          as of February 1, 2003. 17




»Information
    on the Company The following table
    sets forth the Net Sales of each of the Groups segments for the periods
    indicated. Year
          ended December 31net
        sales by segment (millions of euros)2002
      
      2001
      
      2000(Restated)(2)
      
      (Restated)(2)Primary
        Aluminum
      1,605
      
      13.5%
      
      1,851
      
      16.1%
      
      2,039
      
      18.8%Aluminum
        Conversion
      2,618
      
      22.0%
      
      2,676
      
      23.2%
      
      2,600
      
      23.9%Packaging
      2,342
      
      19.7%
      
      2,418
      
      21.0%
      
      2,085
      
      19.2%Ferroalloys
        and Other Activities
      308
      
      2.6%
      
      358
      
      3.1%
      
      377
      
      3.5%Net
        Sales from Industrial Operations
      6,873
      
      57.8%
      
      7,303
      
      63.4%
      
      7,101
      
      65.3%International
        Trade
      5,036
      
      42.2%
      
      4,209
      
      36.6%
      
      3,773
      
      34.7%Total
        Net Sales
      11,909
      
      100.0%
      
      11,512
      
      100.0%
      
      10,874
      
      100.0% (2)
      For
        additional information, see Notes 1 and 25 to our Consolidated Financial
        Statements. The
        following table sets forth the Net Sales of the Group by geographic region
        of production for the periods indicated.net
        sales by geographic region of production(1)
      
      
      
      
      Year
          ended December 31(millions
        of euros)
      2002
      
      2001
      
      2000(Restated)(2)
      
      (Restated)(2)France
      4,972
      
      41.7%
      
      4,719
      
      41.0%
      
      4,725
      
      43.5%Rest
        of Europe
      1,830
      
      15.4%
      
      1,834
      
      15.9%
      
      1,576
      
      14.5%North
        America
      3,546
      
      29.8%
      
      3,695
      
      32.1%
      
      3,598
      
      33.1%Rest
        of the World
      1,561
      
      13.1%
      
      1,264
      
      11.0%
      
      975
      
      9.0%Total
      11,909
      
      100.0%
      
      11,512
      
      100.0%
      
      10,874
      
      100.0% (1)
      The
        breakdown of Net Sales by geographic region of sales in 2002 was as follows:
        14% in France, 35% in the rest of Europe, 25% in the United States and
        26% in the rest of the world.(2)
      For
        additional information, see Notes 1 and 25 to our Consolidated Financial
        Statements. The following
        table sets forth the Earnings from Operations of each of the Group's segments
        for the period indicated.Year
          ended
          December 31earnings
        from operations by segment(1)(millions
        of euros)
      2002
      
      2001
      
      2000(Restated)(2)
      
      (Restated)(2)Primary
        Aluminum
      276
      
      
      423
      
      
      509Aluminum
        Conversion
      16
      
      
      23
      
      
      78Packaging
      129
      
      
      136
      
      
      100Ferroalloys
        and Other
      3
      
      
      0
      
      
      0International
        Trade
      73
      
      
      58
      
      
      65Holdings
      (90)
      
      
      (88)
      
      
      (93)Total
      407
      
      
      552
      
      
      659 (1)
      Earnings
        from Operations takes into account Net Sales, Other Operating Revenues,
        Cost of Goods Sold (excluding depreciation), Selling, General and Administrative
        Expense, Research and Development Expense and Depreciation and Amortization
        (excluding Goodwill Amortization).Earnings
        from Operations do not take into account Goodwill Amortization, Long-lived
        Assets Writedown, Restructuring Expense and Other Income (Expense). These
        items are considered to be operating income/expenses.(2)
      For
        additional information, see Notes 1 and 25 to our Consolidated Financial
        Statements.


18


»Information
          on the Company
        Item
          4


19


» Information
  on the Company History
    and Development of the Group Pechiney is
          the successor company of Pechiney Ugine Kuhlmann, itself created through
          the merger of two French manufacturing companies, Compagnie Pechiney
          and Ugine Kuhlmann, which for over a century had been developing new
          technologies for the conversion of natural resources and basic materials
          into a wide range of metal and chemical products.
        At the end
          of the 19th century, Pechiney developed a technique for the production
          of aluminum by electrolysis, to which it dedicated an increasing portion
          of its capital expenditures. To be more competitive in the post World
          War Environment, Pechiney reorganized its production activities by merging
          with Société Electrométallurgique Française.
          Beginning in 1950, due to the need to access new energy sources and
          raw materials, Pechiney decided to participate in the consolidation
          of the chemical industry in France, to integrate more closely its non-ferrous
          metal conversion activities and to work in foreign countries to develop
          its upstream aluminum activities.
        Compagnie
          Pechiney and Ugine Kuhlmann merged in 1971, creating an industrial group
          with diversified and complementary activities.
        Included
          in 1982 in the nationalization plan adopted by the French State, Pechiney
          Ugine Kuhlmann sold its specialty steel and chemical activities in 1982
          and 1983 respectively, and adhered to a strategy of concentrating the
          Groups resources in those areas in which its technical and market
          positions enabled it to rank among the worlds leaders. In 1983,
          after the reorganization of its activities, the Company readopted the
          name "Pechiney". In 1987, Pechiney sold its copper conversion activities.
        As part of
          this strategy, Pechiney also made certain acquisitions, including, most
          notably, the acquisition of American National Can (ANC) at the end of
          1988, which enabled the Group to become one of the worlds largest
          packaging manufacturers. Following the acquisition of ANC, the Group
          consolidated its packaging activities, turbine component activities
          and principal international aluminum assets in its subsidiary Pechiney
          International, 25% of which was then sold on the Paris Bourse in 1989
          in an initial public offering.
        In 1992,
          the Group implemented a program aimed at rebalancing its portfolio of
          activities, part of which included the transfer from Pechiney International
          to Pechiney of its Aluminum and International Trade activities. Concurrently,
          Pechineys shareholding in Pechiney International was further reduced
          to 67%. That same year, the Group sold its nuclear fuel assembly and
          zirconium/titanium activities.
        In 1995,
          upon the completion of an extensive strategic internal analysis, Pechiney
          restructured its portfolio of activities around two core sectors - Aluminum
          and Packaging - and implemented a disposition program which
      
      significantly
          reduced its financial indebtedness. Following the sale of a controlling
          stake in Carbone Lorraine and Ugimag at the end of June 1995, the Group
          disposed of three business segments: Food Metal and Specialty North
          America, Beverage Glass North America and Turbine Components, in July,
          September and December 1995, respectively. The combined divestitures
          allowed the Group to reduce its indebtedness by 1.6 billion euros.
        Pechiney
          was privatized in December 1995 through an offering of shares. In addition,
          two public exchange offers were undertaken for the Certificats dInvestissements
          Privilégiés (CIP) and shares in Pechiney International.
          On December 16, 1997, Pechiney International, of which the Group had
          held 97.3% since January 1996, was merged into Pechiney. The French
          State sold its remaining interest in Pechiney in April 1998, retaining
          only the shares necessary to grant free shares to Group employees on
          February 5, 1999.
        In July 1999,
          Pechiney launched an initial public offering on the New York Stock Exchange
          of the majority of the capital of its worldwide Beverage Cans activities.
          This transaction generated additional financial resources enabling the
          Group to pursue the selective and profitable development of its activities.
        Since the
          end of 1999, in addition to continuing to implement its cost control
          policy, Pechiney has targeted an active strategy of internal and external
          growth, with the objective of strengthening the Groups leadership
          in high value added segments and expanding its geographic coverage.
          This strategy of profitable growth has been illustrated by many acquisitions
          since April 2000, including the following notable examples:
        in Primary
            Aluminum, the acquisition of an additional 15.5% equity interest in
            Tomago, which makes Pechiney the main partner of one of the worlds
            most efficient primary aluminum smelting operations;
          in Aluminum
            Conversion, the acquisition of Workington and Eurofoil;
          in Packaging,
            the acquisition of Anchor Cosmetics (a subsidiary of Moll Industries),
            JPS Packaging and Soplaril, which allows the Group to strengthen its
            positions in different growth markets in the packaging sector and
            expand its geographic coverage.In December
          2001, Pechiney announced the effective launch of the Pechiney Continuous
          Improvement System, a program which targets not only cost reductions
          but also improved product quality, the multiplication of customer services,
          the optimization and heightened reliability of production tools and
          processes, safety, etc.
        By
          making processes more reliable and reducing costs, the Group aims to
          attain annual Continuous Improvement Gains, gross of inflation, of € 450
          million by 2004.


20


»Information
          on the Company
      Item
          4 Pechiney is
          a société anonyme à conseil dadministration
          (a corporation with a board of directors) incorporated under the laws
          of France. It is governed by the provisions of Titles I to IV of Book
          II of the legislative part of the new French Commercial Code (previously
          provisions of the French Companies Law no. 66-537 of July 24, 1966,
          now codified pursuant to Decree (ordonnance) no. 2000-912 of September
          18, 2000) and the provisions of Decree no. 67-236 of March 23, 1967,
          by other applicable provisions of French law, as well as by its by-laws
          (statuts).
        Pechiney
          was incorporated on November 17, 1922. The duration of the corporation,
          which was extended on November 10, 1951, will expire on November 30,
          2051, unless an Extraordinary General Meeting of Shareholders decides
          to extend the duration or wind up the Company. Pechineys registered
          office is located at 7, Place du Chancelier Adenauer, 75116 Paris, France,
          and the telephone number is +33 1 56 28 20 00.
        Capital expenditures
          in Aluminum totaled € 263 million in 2002, compared with €
          188 million in 2001 and € 150 million in 2000. Capital expenditures
          in Packaging totaled € 196 million in 2002, compared with €
          177 million in 2001 and € 106 million in 2000. For the Groups
          other activities and Holdings, capital expenditures represented €
          20 million in 2002, compared with € 24 million in 2001 and €
          31 million in 2000. These expenditures principally related to the modernization
          of existing facilities, in particular:
        in Primary
            Aluminum, the increase of production capacity in existing facilities;
          in Aluminum
            Conversion, the expenditures related to the modernization plan for
            industrial facilities, especially the Ravenswood plant in the United
            States;
          in Packaging,
            the modernization of production facilities, especially in plastic
            packaging.In 2002,
          proceeds from divestitures totaled € 43 million and principally
          concerned the sale of investments in non consolidated companies. In
          2001, proceeds from divestitures totaled € 30 million and principally
          concerned the sale of Société de Gerzat. In 2000, proceeds
          from divestitures totaled € 496 million and mainly included proceeds
          from the sale of the residual interest in the ANC Group, Inc. held by
          Pechiney.
        Tender
          Offer by Alcan Inc.
        On July 7,
          2003, Alcan Inc., a Canadian corporation (Alcan) announced
          an unsolicited bid for Pechineys Common Shares A,
          American Depositary Shares, Bonus Allocation Rights and OCEANE
          convertible bonds (collectively, the Pechiney Securities).
          On July 8, 2003, Pechineys Board of Directors decided that this
          unsolicited offer was uncertain and that the price proposed by Alcan
          was clearly inadequate, when taking into account Pechineys industrial,
          technological and intangible assets, and in no way reflected its true
          strategic value.
        On September
          11, 2003, following successive increases in the value of its bid, each
          of which was rejected by Pechineys Board of Directors, Alcan made
          a new revised proposal to increase the offer price to the following:
        up to 48.50
            per Common Share A, consisting of 47.50 per Common
            Share A plus 1.00 in cash per Common Share A
            if at least 95% of Pechineys share capital and voting rights
            on a fully diluted basis are tendered into the offer (including any
            reopened offer pursuant to Article 5-2-3-1 of the General Rules and
            Regulations of the French Conseil des marchés financiers(CMF)) and
      
      83.40
            in cash per OCEANE plus 0.40 for each OCEANE tendered if at
            least 95% of Pechineys share capital and voting rights on a
            fully diluted basis are tendered into the offer (including any reopened
            offer pursuant to Article 5-2-3-1 of the General Rules and Regulations
            of the CMF).On September
          12, 2003, Pechineys Board of Directors determined that this new
          revised proposal constituted the best value alternative available to
          the holders of Pechiney Securities and determined to recommend to holders
          of Pechiney Securities to accept this proposal, which it viewed as being
          in the best interest of Pechineys shareholders, employees, partners
          and customers.
        On September
          29, 2003, the CMF declared Alcans new revised proposal acceptable
          (recevable) and published a declaration to that effect (avis
          de recevabilité). On that same day, Alcan issued a press
          release announcing that the European Commission had granted clearance
          under European merger regulations and that it had reached an agreement
          with the U.S. Department of Justice (the DOJ) and, accordingly,
          the statutory waiting period under the U.S. Hart-Scott Rodino Act was
          to expire that evening.
        In connection
          with the receipt of clearance from the European Commission, Alcan announced
          that it had undertaken to divest either its 50% share in the AluNorf,
          Gottingen and Nachterstedt rolling mills or Pechineys rolling
          mills at Neuf-Brisach, Rugles and, if necessary, the Annecy rolling
          mill. Alcans Latchford casting operations may also be added to
          either the AluNorf or Neuf-Brisach packages. In addition, Alcan announced
          that it had agreed to undertakings for the licensing of alumina refining
          technology, alumina smelter cell technology and anode baking furnace
          designs and agreed to eliminate the overlap in Alcans and Pechineys
          activities in aluminum aerosol cans and aluminum cartridges. Pursuant
          to an agreement and a related consent decree with the DOJ, Alcan has
          agreed to divest Pechineys aluminum rolling mill located in Ravenswood,
          West Virginia. Pechiney was not a party to the negations between Alcan
          and the European Commission and Alcan and the DOJ.
        On October
          2, 2003, the French Commission des opérations de bourse(the
          COB) granted its approval with respect to Alcans offer
          documentation in France. On October 7, 2003, Alcan formally commenced
          its offer to holders of Pechiney Securities (other than American Depositary
          Shares) who are either located in France or located in other jurisdictions
          (except the United States and Canada) if, pursuant to local laws and
          regulations, they are permitted to participate in the offer.
        On October
          9, 2003, Pechiney issued a press release announcing that the Pechiney
          Board had made a formal recommendation (avis motivé) to
          the holders of Pechiney Securities to accept Alcans offer.
        Under U.S.
          securities regulations, Alcans offer to all holders of Pechiney
          American Depositary Shares worldwide, as well as to any holders of other
          Pechiney Securities who are located in the United States or Canada,
          is expected to commence following issuance by the U.S. Securities and
          Exchange Commission of its declaration of effectiveness of the Registration
          Statement on Form S-4 filed by Alcan with respect to the offer.


21


»Information
  on the Company Strategy Create
    value for Shareholders: profitable growth and the Pechiney Continuous Improvement
    System During the
          period 2000-2002, many acquisitions were finalized, made possible by
          the Groups low level of indebtedness and its solid cash flow.
          Pechineys strategic acquisitions included Eurofoil in thin foil,
          Soplaril in flexible packaging in Europe, and acquisitions targeting
          products or markets which are complementary to Pechineys own,
          such as Alufin (technical alumina), Euromin (trading), Envaril and Molplastic
          in South America (packaging), Tiger in Indonesia (cosmetics packaging),
          Harkens production lines and Phnixs assets in medical
          packaging in the United States.
      
      These acquisitions
          may be considered as successes for the Group - teams have been integrated;
          know-how has been transferred; and synergies identified at the time
          of acquisition have taken concrete form. This has produced visible results
          at the level of each of the activities concerned and therefore of the
          Group itself. Improve
    profitability: the Pechiney Continuous Improvement System One of the
          two major focuses of Pechineys strategy is the constant improvement
          of the Groups performance in all fields through the
      
      implementation
          of the Pechiney Continuous Improvement System throughout the Company. Objectives of the Pechiney Continuous Improvement System The Pechiney
          Continuous Improvement System targets four main objectives:
        to enhance
            safety, since the safest plants are the most efficient;
          to ensure
            the reliability of production processes and reduce controlled costs;
          to provide
            quality customer service;
          to improve
            the performance of acquisitions by standardizing and sharing best
            practices.The Pechiney
          Continuous Improvement System is implemented in all the Groups
          activities, applying a common point of reference and indicators to monitor
          performance. The progress achieved is regularly measured and reported
          savings have been published quarterly since January 1, 2002. In
      
      2002, two-day
          Continuous Improvement evaluations were conducted at 48 facilities which
          are representative of all of the divisions. Focused on the priorities
          defined by the divisions, the Pechiney Continuous Improvement System
          reviews make it possible to verify that implementation and results are
          in line with commitments, and to identify best practices, which will
          be incorporated into the frequently consulted Continuous Improvement
          Intranet base.
        With €130
          million in cumulated Continuous Improvement Gains, gross of inflation,
          at the end of 2002, Pechiney aims to realize, in the medium term, on
          average € 150 million per year.


22


»Information
          on the Company
      Item
          4  Cumulated
    Continuous Improvement Gains at the end of 2002 (millions of euros)  Continuous Improvement Gains as of December 31, 2002(millions of euros) Gains
        linked to the increase in volume in Primary Aluminum (aluminum and metallurgical
        alumina)
      1Reduction
        (net of inflation) of controlled costs
      75Estimated
        impact of inflation on the basis of controlled costs
      54Total
        cumulated Continuous Improvement Gains
      130 More growth,
          more efficiency: the Pechiney Continuous Improvement System is the ideal
          way to achieve the Groups objectives of sustained and profitable
          growth over the long term.
        The Pechiney
          Continuous Improvement System is based on the mobilization of expertise
          and the commitment of all our people in a
      
      learning,
          responsive organization focused on satisfying customers needs.
          It fosters industrial excellence by sharing best practices and applying
          the highest standards, especially with regard to safety and environmental
          protection. It promotes a corporate culture based on initiative and
          excellence that is open and stimulated by change.


23


» Information
  on the Company The
    foundation of the Pechiney Continuous Improvement System People mobilization
          and employee involvement are the foundation of the Pechiney Continuous
          Improvement System. Continuous Improvement success will be driven by
          managements commitment to unleash the potential of the workforce.
          In 2002, a common set of Human Resources standards were defined to drive
          the people mobilization needs of the
      
      organization.
          The five new Roadmap elements (visual communication, the role of management,
          the development of expertise and technical skills, suggestion systems
          and employee recognition) are based on best practices throughout the
          Pechiney organization. Training Training
          is a key component in the deployment of the Pechiney Continuous Improvement
          System. It allows employees to improve their performance and develop
          skills so that they can contribute to the success of the Groups
          strategy, and to rally teams around shared values, methods and objectives.
          In 2002, Pechiney continued to adapt training programs to the needs
          of its different businesses and their developmental needs.
      
      1,000 managers
          to be trained in Pechiney Continuous Improvement System management
        To facilitate
          effective implementation of the Pechiney Continuous Improvement System,
          Pechiney launched a program for plant managers, from unit heads to supervisors.
          Training takes place at production sites. It lasts a week and is organized
          in groups of 16 people. Alternating
          theory and practice, it teaches managers how to analyze situations,
          draw up an action plan and lead projects. The plants basic issues
          and priorities are focuses from the beginning and practical applications
          are important. Two- and three-day projects are undertaken in small groups
          with the participation of the plants operating staff. One-third
          of the managers targeted took this course in 2002. PCIS
    Reviews Pechiney Continuous
          Improvement System (PCIS) reviews will be organized at all of the Groups
          industrial facilities. Fifty plants will be concerned in 2003, and an
          PCIS review frequency of two years is targeted. These PCIS reviews are
          conducted using standards of industrial excellence in the Companys
          businesses. The first objective is to evaluate the pertinence of action
          plans in line with the plants priorities. The PCIS review helps
          identify best practices at the facilities and in the divisions and contributes
          to the use of Pechiney Continuous Improvement System standards.
      
      The PCIS reviewers
          and the plants management work together to prepare the PCIS review,
          which lasts two full days. During this time, improvement suggestions
          are collected; the main recommendations are circulated throughout the
          unit and monitored quarterly. The PCIS reviewers
          are confirmed managers, who represent the Groups operating and
          functional divisions, coordinated by the Pechiney Continuous Improvement
          System division. Its standards will be improved in 2003, in order to
          better account for the Groups priorities, as well as practices
          already developed by the most advanced facilities. Best
    practices and standards Best practices
          in the framework of review standards are systematically detected and
          described in PCIS reviews. They are communicated to all of the Groups
          workforce over the Intranet. Successive PCIS reviews enrich this data
          base, which thus becomes a real deployment assistance tool. In priority
          areas concerning both technical (e.g., process control, equipment
      
      maintenance)
          and operating (recognition systems, the role of production supervisors)
          issues, groups of experts have defined common standards for all the
          entities. Their deployment is piloted in the divisions and systematically
          verified during PCIS reviews. Individual improvement objectives are
          defined for managers concerning their implementation.


24


»Information
          on the Company
      Item
          4 Safety
    and the Pechiney Continuous Improvement System The safest
          plants are the most efficient. Improving health and safety conditions
          is a major priority in the Pechiney Continuous Improvement System. This
          effort is based on a risk prevention policy that applies standardized
          practices for priority risks, involves employees at all levels and promotes
          multi-year action plans with objectives defined in each facility. The
          Group aims to reduce the Lost Time Rate (LTR) per million hours worked
          to 2, and the Total Incidence Rate (TIR) per million hours to 7 (based
          on the French reporting system).
        The Success
          Stories trophy rewards the unit or department that achieved the best
          implementation of the Pechiney Continuous Improvement System
      
      during the
          year. In 2002, the winner was Cebal Tubes Europes Kolin facility
          in the Czech Republic, which has not reported an accident in two years.
          The mobilization of the units 300 employees enables them to find
          a solution for any problems. Practical solutions include protection
          guards on all the machines, Plexiglas barriers to keep fingers out of
          the polisher motors, safety wire to facilitate the emergency shutdown
          of welding equipment, activated on simple contact, ergonomics, systematic
          wearing of hearing protection devices, standard and shared tools, and
          ecological washing solvents. These solutions are often not expensive
          and ensure protection and productivity at the same time. A
    selective and profitable growth strategy The second
          focus of Pechineys strategy is to ensure selective and profitable
          growth. The criteria which guide this growth strategy are simple:
        selectivity:
            growth must be based on the Groups strong points, in profitable
            markets; it must help strategically bolster Pechineys positions
            and business portfolio;
          profitability:
            each project must correspond to strict profitability levels applied
            to the investment. Pechiney targets internal profitability of more
            than 13% after taxes.Each of the Groups
        activities represents different challenges in terms of growth. In aluminum
        rolling, alumina and primary aluminum, the size of the investment required
        leads to relatively few individual growth projects. As a leader in primary
        aluminum production technology, Pechiney plans to promote and operate
        a new AP50 technology smelter in the years to come, and to ensure that
        its needs in alumina are covered. The project to build the first AP50
        smelter in South Africa continues to move forward; a certain number of
        major contracts have been finalized or are being finalized, and partners
        have expressed an affirmed interest in investing in the project. With
        a front-ranking position in technical rolled products, Pechiney aims to
        strengthen its global position, particularly in the aerospace and transport
        markets.
      
      In plastic
          packaging, growth opportunities are more numerous and often of smaller
          size. They may aim to consolidate positions, expand the product line
          or access new geographic markets, in particular regions with low labor
          costs. Pechiney is determined to participate in the consolidation of
          this industrial sector - which it believes is a sure way to create value
          - while focusing on specialty products.
        Internal
          growth is primarily based on selectivity in the choice of markets, customers
          and products. This selectivity presupposes a thorough understanding
          of the markets, which the Challenge Revenues program helped build. Ongoing
          innovation in the range of products offered, particularly in the packaging
          sector, where customers are stepping up the pace of their product launches,
          also provides opportunities for growth, since these launches, which
          are organized on broader geographic bases, lead to an increasingly demanding
          selection of suppliers.
        This dynamic,
          which aims to strengthen ties with the Groups customers, whether
          they be on a contractual basis, co-development, integrated logistics
          or "Just in Time", is a fundamental thrust in all the Groups businesses.
          Pechiney believes it is positioned to meet these needs.


25


»
    Information
    on the Company Business
    of the Pechiney Group Simplified
    Organizational Chart of the Pechiney Group as of December 31, 2002 (% of capital
    and voting rights).  For a complete list
    of Pechiney's subsidiaries, see Note 23 to the Consolidated Financial Statements.


26


»Information
          on the Company
      Item
          4 Primary
    Aluminum Primary Aluminum
          was comprised of two operating segments as of December 31, 2002:
        Bauxite
            Alumina;
          Aluminum
            Metal.As announced
          in December 2002, the Ferroalloys division, presented at the end of
          Item 4. became part of the Primary Aluminum sector in February 2003.
      
      Primary Aluminum
          specializes in the production and sale of primary aluminum, and also
          produces bauxite and alumina. The Group believes that its industrial
          and commercial positions, together with its smelter technology, place
          it at the forefront of the aluminum industry. The Group believes that
          it is Europes second and the worlds fifth largest producer
          of primary aluminum on the basis of 2002 obtainable production capacity.
        The following
          table sets forth certain selected Primary Aluminum data.  Selected
        Primary Aluminum Data
      2002
      
      2001
      
      2000Consolidated
        Net Sales (millions of euros)
      1,605
      
      1,851
      
      2,039Earnings
        from Operations (millions of euros)
      276
      
      423
      
      509Assets
        Excluding Cash and Cash Equivalents (millions of euros)(1)
      1,984
      
      2,019
      
      1,935Number
        of Employees (as of December 31)
      6,495
      
      6,151
      
      5,877Primary
        aluminum (thousands of metric tons)(2)Production
        capacity at year end
      1,240
      
      1,230
      
      1,145Production
        controlled by the Group
      1,182
      
      1,140
      
      1,122Consolidated
        production(3)
      876
      
      820
      
      807Bauxite/alumina
        production (thousands of metric tons)(2)Bauxite
      2,448
      
      2,457
      
      2,521Alumina
      2,050
      
      2,032
      
      2,042Net
        sales by business (millions of euros, before elimination of intragroup
        sales)Primary
        aluminumSale
        of consolidated production
      1,430
      
      1,506
      
      1,566Other
        sales(4)
      513
      
      744
      
      685Alumina(5),
        sale of technology and other activities(6)
      300
      
      260
      
      424Total
        consolidated net sales
      2,238
      
      2,505
      
      2,674 (1)
      French
        accounting standards. The definition of Assets is not equal to the item
        "Capital Employed" used by Pechiney in calculating Return on Capital Employed.(2)
      On
        the basis of percentage of output obtained , before elimination of intragroup
        sales.(3)
      Production
        from fully consolidated facilities (plus Bécancour and Tomago).(4)   Sales
        of aluminum produced by Aluminium Dunkerque and Alucam, purchased and
        resold to third parties by Aluminium Pechiney, as well as income from
        trading activities (metal purchased from third parties and resold in different
        locations and /or in different forms, sometimes after conversion).(5)
      Income
        from the sale of alumina to third parties (primarily technical alumina)
        or to Group facilities accounted for by the equity method.(6)
      Income
        from the sale of alumina and aluminum production technology and from ECL
        (Electricité Charpente Levage).


27


»Information
  on the Company   In the Primary
          Aluminum segment, the bauxite mines send their output to the alumina
          plants. This output for the most part satisfies the plants aluminum
          production requirements. A portion of the production of alumina is used
          in non-metallurgical applications. Such technical alumina is primarily
          used in the production of various chemical products, refractory materials
          and ceramics.
        Primary Aluminum
          produced by smelting is cast into a number of different products, from
          basic aluminum ingots, rolling ingots, extrusion billets and wire for
          conductors, to specialized products such as mechanical wire and welding
          wire.
        Finally,
          Primary Aluminum also licenses alumina and aluminum production technology,
          know-how and equipment.
        In 1999,
          Pechiney created two new divisions, Bauxite-Alumina and Aluminum Metal.
          Each division has responsibility to adopt best practices in cost reduction
          in its business on a systematic basis and to consolidate and increase
          the Groups market share by applying all profitable and possible
          developments.
      
      The operating
          units that report to these two divisions were broken down as follows:
        Bauxite-Alumina
            division: the Aluminium Pechiney plant in Gardanne (France), the bauxite-alumina
            activities of Aluminium de Grèce (Greece), the Alufin unit
            acquired in 2002, the Groups equity interest in Queensland Alumina
            (Australia) and in Compagnie des Bauxites de Guinée, alumina
            technology sales activities and Sogerem (fluorspar);
          Aluminum
            Metal division: the facilities of Aluminium Pechiney at Saint-Jean-de-Maurienne
            and in the Pyrénées (France), Pechiney Nederland (Netherlands),
            the primary aluminum and casting activities of Aluminium de Grèce
            (Greece), the Groups equity interest in Tomago (Australia),
            Aluminerie de Bécancour (Canada), Aluminium Dunkerque (France)
            and Alucam (Cameroon), smelter technology sales activities and ECL.Each unit is
        individually responsible for meeting customer needs in its respective
        market sector and has autonomy in operations, marketing and human resources. Bauxite
    - Alumina Bauxite In 2002, the
          Bauxite-Alumina division obtained approximately 2.4 million metric tons
          of bauxite from the bauxite mines in Greece and Guinea in which it has
          an equity interest (see "- Primary Aluminum - Selected Data). These
          facilities supplied all of the bauxite requirements of the Gardanne
          (France) alumina refinery, and a significant portion of the requirements
          of the Saint-Nicolas (Greece) refinery. The average utilization rate
          of these mines in 2002 was 95%.
      
      In addition
          to the Groups share of output from these mines, the Bauxite-Alumina
          division purchases bauxite, pursuant to long-term supply contracts,
          for the supply of Aluminium de Grèce (ADG) from Greek
          mines and suppliers of tropical bauxite, and for the Gladstone refinery
          (Australia) from Comalco, one of the Groups partners in the Gladstone
          refinery.


28


»Information
          on the Company
      Item
          4 Production Facilities
    The following table
    sets forth certain bauxite mine data. Bauxite
        Mine DataTotal
          Production Capacity at the End of 2002
      Equity
          Interest of the Group in Operating Companies
      Share
          of Output Obtained by the Group in 2002
      Share
          of Capacity Obtainable by the Group as of December 31,2002(1)(thousands
          of metric tons
          per year)
      (%)
      (%)
      (thousands
          of metric tons
          
          per year)GuineaBoké
          mine (owned by Compagnie des Bauxites de Guinée - CBG)(2)
      12,700
      5.1%
      12.2%
      1,550GreeceParnasse
        mines (owned by Delphi-Distomon)(3)
      970
      60.2%
      100.0%
      970Total
      
      
      
      2,520 (1)
      On
        the basis of obtainable production capacity, including bauxite purchased
        pursuant to long-term contracts with mining companies in which the Group
        holds an indirect equity interest and, in certain cases, bauxite that
        the Group obtains for its own use or for resale as manager of a mine.(2)
      The
        Group owns 10% of Halco Mining Inc., which in turn holds 51% of CBG (with
        the remaining 49% held by the Republic of Guinea). The Republic of Guinea
        has granted to CBG a long-term bauxite mining concession. Pursuant to
        a long-term contract expiring in 2011, CBG has agreed to sell 12.2% of
        its bauxite output to Aluminium Pechiney.(3)
      The
        Group owns 60.2% of ADG, which in turn owns 100% of Delphi-Distomon. As
        the majority shareholder and manager of ADG, the Group obtains all of
        the production of Delphi-Distomon s Parnasse mines. Alumina Production The share
          of capacity obtainable by the Bauxite/Alumina division from the alumina
          refineries which it owns or in which it has an equity interest amounts
          to approximately 2.2 million metric tons per year. Its production of
          metallurgical alumina is generally sufficient to satisfy more than 80%
          of the alumina requirements of its smelters (with the balance supplied
          pursuant to
      
      long-term
          contracts). The average utilization rate of these facilities in 2002
          was 95%. In addition, part of Aluminum Metals share of alumina
          produced at Gardanne is sold to third parties as non-metallurgical alumina.


29


»
    Information
    on the Company Production
        FacilitiesThe
        following table sets forth certain alumina refinery data.Alumina
        Refinery Data
      Total
          Production 
          Capacity 
          at the End of 2002
      Equity
          Interest of the Group in Operating Companies
      Share
          of Output Obtained
          by the Group in 2002(1)
      Share
          of Capacity Obtainable by the as of December 31, 2002(thousands
          of metric tons
          per year)
      (%)
      (%)
      (thousands
          of metric tons
          per year)AustraliaGladstone
        (owned by Queensland Alumina Ltd.)(1)
      3,750
      20%
      20%
      750FranceGardanne
        (owned by Aluminium Pechiney)
      650
      100%
      100%
      650GreeceSaint-Nicolas
        (owned by ADG)(2)
      750
      60.2%
      100%
      750Total
      
      
      
      2,150 (1)   Through
        its Australian subsidiary, Pechiney Resources Pty Ltd., the Group holds
        a 20% equity interest in Queensland Alumina Ltd. (QAL). QAL operates,
        as a cooperative for the benefit of its shareholders, the tolling activities
        of the Gladstone refinery. The Groups share of QALs production
        is principally used to supply alumina to the Tomago and Bécancour
        smelters. Consequently, the Groups share in the results of QAL is
        included in the Groups cost of goods sold.(2)
      As
        the majority shareholder and manager of ADG, the Group obtains all of
        the alumina production of Saint-Nicolas. In 2002, deployment
          of the Pechiney Continuous Improvement System was pursued in the BXA
          division. The focus on standard and technical PCIS audits was broadened
          to include process control and employee mobilization.
        At ADG (Greece),
          improved performance led to a new production record, with an increase
          of 5% over 2001.
      
      At Gardanne
          (France), technical difficulties at the beginning of the year resulted
          in a 2% decline in production compared with 2001. Sales of technical
          alumina again increased, rising 3% from 2001.
        The QAL plant
          (Australia) was not able to maintain its level of production (- 1.3%)
          in 2002, owing to the accidental interruption of the facilitys
          electricity supply at the end of the year. The investment in new calcination
          furnaces will help improve the plants environmental performance
          in 2003. Sale
    of Alumina Technology Pechiney believes
          it is one of the world leaders in the sale of technology and in technical
          assistance for alumina production facilities. Its main achievements
          in this area in 2002 were as follows.
        The debottlenecked
            installations at the Pingguo alumina facility in China were successfully
            started up. Guaranteed performances were achieved and the reception
            of the contract was obtained without reserve. The construction of
            the plants second unit is under way, and a new licensing agreement
            was signed in 2002. The technology chosen remains that developed by
            Aluminium Pechiney for attack and decomposition;
          The startup
            of the new Guizhou attack unit in China took place at the beginning
            of 2002;
      
      The feasibility
            study commissioned by the government of Vietnam for an integrated
            bauxite/alumina/aluminum facility in the province of Lam Dong was
            completed in the third quarter of 2002;
          The third
            potline at the Nalco alumina plant in India was started up in the
            first quarter of 2002, and nominal capacity of 1,575,000 metric tons
            per year was attained by mid-2002. The technical reception of the
            oxalate removal unit took place at the end of September;
          The conditions
            precedent to the realization of the agreement signed with CVG in 2000
            for the modernization of the Bauxilum complex in Venezuela were satisfied
            in 2002. The full agreement is retroactively in effect. Technical
            assistance continued and led to a rise in production. Debottlenecking
            studies advanced.


30


»Information
          on the Company
      Item
          4 Markets
    and distribution The
    alumina market(1) Unless
          otherwise indicated, statistical and market trend information are based
          on the Companys own statistics, which are in turn based on the
          Companys own research and various publicly available sources.
        In 2002,
          the production of alumina in the western world totaled 43.4 million
          metric tons, up 1.0 million metric tons from the previous year.
        During the
          year, the alumina market, which had experienced a considerable surplus
          in 2001, progressively returned to a more balanced level, owing to significant
          purchases by Chinese buyers. The reductions in
      
      production
          introduced the previous year were partially lifted. A new production
          line was started up at a plant in India. Improvement was reported in
          the utilization rate of many facilities, particularly in Latin America.
        Spot prices
          rose moderately, from U.S.$130 per metric ton at the beginning of the
          year to U.S.$160 per metric ton in December. This situation nevertheless
          had a limited impact on medium-term contracts which cover most of the
          volume of alumina traded and are generally indexed on the price of aluminum
          on the London Metal Exchange (LME). Aluminum
    Metal Primary Aluminum production At the end
          of December 2002, primary aluminum obtainable capacity (expressed in
          tons of metal under control) amounted to approximately 1,240,000 metric
          tons per year.
        Approximately
          40% of the Groups primary aluminum production capacity is located
          in France at facilities owned by Aluminium Pechiney (a wholly-owned
          subsidiary of the Company and Aluminum Metals principal
      
      operating
          company in France) and Aluminium Dunkerque (a 35%-owned affiliate).
          The remaining aluminum production capacity is located in Greece, the
          Netherlands, Australia, Canada and Cameroon.
        The following
          table sets forth selected data regarding the aluminum smelters in which
          the Group has an interest. The average utilization rate of these facilities
          in 2002 was approximately 95% of capacity.


(1) Based
  on Pechineys internal estimates. 31


»
    Information
    on the Company Primary
        Aluminum Smelter Data
      Equity
          Interest of the Group in Operating Companies
      
      Total
          Capacity in at Year End 2002
      Share
          of Output Obtained by the Group
      
      Share
          of Capacity Obtainable by the Group at Year End 2002(1)
      
      Year
          of Start-up of Current Structure
      Year
          of last Major capacity Increase or Modernization(%)
      
      (thousand
          of
      (%)
      
      (thousand
          ofmetric
          tons per
      
      
      metric
          tons peryear)
      
      
      year)FranceAuzat
        (owned byAluminium
        Pechiney)100%
      100%
      
      50
      100%
      
      50
      
      1973
      1981Lannemezan
        (owned byAluminium
        Pechiney)
      100%
      
      50
      100%
      
      50
      
      1978
      --Saint-Jean-de-Maurienne(owned
        by Aluminium Pechiney)
      100%
      
      132
      100%
      
      132
      
      1980
      1986Dunkerque
        (AluminiumDunkerque,
        partly ownedby
      35%
      
      245
      100%
      
      245
      
      1992
      --Pechiney)(2)(4)Total
        France
      
      
      
      
      
      477Rest
        of the WorldSaint-Nicolas
        (owned by ADG,
      60%
      
      163
      100%
      
      163
      
      1966
      1971Greece)(3)Vlissingen
        (owned by PNL C.V.,
      85%
      
      192
      85%
      
      163
      
      1971
      --Netherlands)Edéa
        (owned by Alucam,
      47%
      
      95
      100%
      
      95
      
      1980
      --Cameroon)(3)(4)Tomago
        (owned by Tomago
      51.5%
      
      470
      51.5%
      
      242
      
      1983
      1998Aluminium
        Pty., Australia)Bécancour
        (owned by Aluminerie
      25%
      
      400
      25%
      
      100
      
      1986
      1990de
        Bécancour, Canada)(5)Total
        Rest of the World
      
      
      
      
      
      763Total
      
      
      
      
      
      1,240 (1)
      Includes
        the entire output of wholly-owned facilities in addition to, in the case
        of partly-owned facilities, aluminum purchased pursuant to long-term contracts
        with the operating companies of the facilities (entered into in connection
        with the Groups indirect equity interest in such companies) and,
        in certain cases, aluminum that Aluminum Metal obtains for its own use
        or resale as manager of a smelting facility (the total of the foregoing
        being the "obtainable" production capacity of a facility).(2)
      Pechiney
        owns 35% of the capital of Aluminium Dunkerque, which owns the Dunkerque
        facility. The Group has entered into a long-term contract pursuant to
        which it is obligated to purchase the entire output of Aluminium Dunkerque.
        The assets of Aluminium Dunkerque are subject to pledges and other liens
        in favor of certain of the lenders that financed the construction of its
        smelters (see "Item 5. Operating and Financial Review and Prospects -
        Liquidity and Capital Resources - Contingencies -Option on Affiliate -
        Aluminium Dunkerque").(3)
      As
        the majority shareholder and manager of ADG and the major industrial shareholder
        and manager of Alucam, the Group effectively controls the marketing and
        sale of the aluminum production of their smelters.(4)
      Accounted
        for by the equity method.(5)
      The
        Group owns 50% of Pechiney Reynolds Quebec Inc. (PRQ), which in turn owns
        50.1% of the Aluminerie de Bécancour which operates the Bécancour
        facility as a cooperative. PRQ is obligated to take its share of Bécancours
        output and to cover its share of Bécancours expenses, as
        a result of which the Groups share of PRQs results are included
        in the Groups cost of goods sold.


32


»Information
          on the Company
      Item
          4  The division
          pursued its efforts to base the management of its activities on the
          Pechiney Continuous Improvement System. The principal focuses are production
          systems and employee mobilization, within the more general framework
          of an approach that targets significant improvement in safety.
        The standardization
            of work methods received special attention. This is achieved through
            the effective deployment of many standardized operating modes which
            are frequently audited on site, and through training (in 2002, the
            division significantly increased the number of hours of training each
            employee received);
          In addition,
            the divisions units pursued and developed Pechiney Continuous
            Improvement System projects by focusing on priority objectives, particularly
            the control of raw materials and equipment reliability.Pechineys
          share of total production increased by 42,000 metric tons between 2001
          and 2002.
      
      Highlights
          of the year included the following.
        The Saint-Jean-de-Maurienne
            plant, where production was affected by a strike in August, continued
            to develop the production of wire for electrical and mechanical applications;
          The Pechiney
            Nederland unit encountered operating difficulties in August and a
            series of problems due to exceptional weather conditions which struck
            the north of Europe at the end of October, causing an interruption
            of the energy supply for several hours. However, the point feeding
            cell conversion project went ahead as planned, and a potline had already
            been converted by the end of the year;
          The Alucam
            facility in Cameroon was again affected by a lack of energy linked
            to poor hydraulics and the bad condition of the facilities operated
            by the local electricity producer. It nevertheless set new records
            for intensity and efficiency;
          Despite
            labor difficulties caused by the introduction of an ambitious cost
            reduction program, the Tomago smelter increased production by more
            than 10,000 metric tons and launched a project to achieve a 10% rise
            in production within existing scheduling and budget limits. AP
    50 technology and project Development
          teams attained the targeted objective of ensuring stable operating conditions
          for very high intensity (500kA) AP50 cells, acquiring sufficient experience
          to plan for the study and construction of an industrial unit with a
          capacity of at least 460,000 metric tons per year. The construction
          of the whole smelting facility around this technology aims to reduce
          the cost of investment per ton by 15%. In addition, operator safety
          will be enhanced through a new organization of flows within the plant.
      
      A new unit
          was created and teams mobilized to complete this project. After the
          signing of an electricity supply agreement with Eskom in March 2002,
          the AP50 project focuses on South Africa, where advanced negotiations
          are being conducted with the South African government, potential partners
          and local elected officials. The feasibility of other locations continued
          to be examined throughout 2002. On
          September 30, 2003, Pechiney exercised the option provided for in the
          agreement, thus making the agreement effective. For further information,
          see "Item 4. Information on the Company - Recent Developments". ECL Electricité
          Charpente Levage (ECL), a wholly-owned subsidiary of Aluminum Pechiney,
          markets equipment for aluminum smelters. The Group believes that it
          is the world leader in its activity with more than 90% of its production
          exported throughout the world. ECL supplies all the major producers
          of primary aluminum. In 2002, the company did
      
      record business,
          in particular supplying equipped superstructures for electrolysis cells
          in the expansion of the Mozal facility in Mozambique. ECL pursued the
          development of its service business through its subsidiaries (Canada,
          South Africa, Australia, Netherlands), which allow the company to make
          its expertise available to its main customers.


33


»Information
  on the Company Sale
    of Aluminum Technology Primary Aluminum
          is active in the sale and licensing of primary aluminum smelting technology
          and know-how to third parties, an activity in which the Group believes
          it is the world leader. Major technology transfer contracts executed
          in 2002 include the following.
        The startup
            of the extension of 80 AP18 cells at Talum (Slovenia) took place at
            the beginning of 2002 and was successfully completed in May;
          The startup
            of the Alma plant in Quebec (Alcan), which has one and a half potlines
            of AP30 cells, was successfully completed. Performance test results
            were excellent. The mission of two experts was extended by four months
            in 2002; all the experts have now returned from this assignment;
          The new
            Mozal facility in Mozambique, where the first AP30 potline was started
            up in 2000, launched a project to double capacity. Startup of the
            AP30 extension is scheduled for 2003;
          The contract
            for an extension of 144 AP30 cells at Hillside in South Africa (Billiton),
            which was signed in 2000, was activated in April 2002. Construction
            is moving forward rapidly;
      
      Technical
            assistance continued at Alba (Bahrein) and a contract for an extension
            of more than 300,000 metric tons per year was signed and activated
            in May 2002;
          In July,
            Alouette signed a contract for a 330 cell extension of its Sept-Iles
            facility in Quebec. The contract also includes a license for the second
            phase of the anode furnace;
          A contract
            to modernize furnaces at Alro (Romania) was signed in May 2001 and
            work has begun at the site;
          Technology
            licensing contracts for a furnace at Hydro Aluminium / VAW Kurri Kurri
            (Australia) and for a furnace at Almahdi (Iran) were signed and activated
            in August and November, respectively.In addition,
          the Chinese company Lanzhou Aluminium Co. and Aluminium Pechiney signed
          a preliminary agreement to develop major technical cooperation in China.
          The agreement provides for a detailed preliminary study on an aluminum
          smelting project of 260,000 metric tons per year with an integrated
          electric power plant. If the profitability of the project can be demonstrated,
          the parties will create a joint venture in 2004. Markets
  and distribution The
    global aluminum market(1) Unless
          otherwise indicated, statistical and market trend information are based
          on the Companys own statistics, which are in turn based on the
          Companys own research and various publicly available sources.
          The economic
          recovery, which had gotten off to a good start in 2002, particularly
          in the United States, lost momentum during the year. Compared with 2001,
          growth again slowed in Europe and remained close to zero in Japan. Asian
          economies (excluding Japan) reported strong growth owing to an upswing
          in world trade and significant internal demand. This was particularly
          the case in China, which demonstrated persistent economic dynamism.
          The consumption
          of primary aluminum benefited from the moderate improvement in the world
          economy and picked up in 2002. Despite the continued shutdown of certain
          production capacities in North America, production rose significantly
          in 2002, especially in China. Overall, the market surplus observed in
          2001 carried over into 2002 and continued to weigh on the price of aluminum,
          which decreased by 6% to U.S.$1,365 per metric ton (three month quotation
          on the LME). Expressed in euros, the average price decreased by 10%
          to € 1,457 per metric ton. Demand
          for Primary Aluminum Global
          demand for primary aluminum, which had been affected by the
      
      slowdown in
          the world economy in 2001, rose in response to the economic recovery
          in 2002. At the global level, it increased by approximately 7% to 25.5
          million metric tons.
        Global
            performance owes much to the rise in consumption in China (+16%),
            backed by strong growth in industrial production;
          In Asia
            (excluding Japan), consumption grew rapidly;
          In Japan,
            aluminium consumption partially recovered from a sharp drop in 2001.
            Although down slightly, automobile production boosted aluminum consumption
            in the transport sector, while business in the construction sector
            further eroded in 2002;
          Europe,
            experienced a growth in 2002 in spite of unfavorable underlying economic
            circumstances. This performance can be partially explained by a shortage
            of recycled material on the continent, which led to an extended use
            of primary aluminium instead of secondary. In the transport sector,
            the penetration of aluminum in the automotive market continued, offsetting
            the drop in automobile production. Construction activities generally
            stagnated. Aluminum consumption in packaging showed a moderate rise;
          In the
            United States, the consumption of primary aluminum, which had fallen
            drastically in 2001, rose again in 2002. The increase in automobile
            production and a sustained high level of activity in the construction
            sector, at least in the residential segment, contributed to this upturn
            in aluminum consumption.


(1)
    Based on Pechineys internal estimates.34


»Information
          on the Company
      Item
          4 Supply
    of Primary Aluminum In 2002, primary
          aluminum production rose significantly (+6.6% to 26.1 million metric
          tons). Trends were contrasting in the different regions.
        Production
            in the West was marked by a moderate increase (+3.3% to 17.2 million
            metric tons). In Canada, the new smelter started up in 2001 reported
            its first calendar year of production at full capacity. In Brazil,
            after the end of energy rationing, all the smelters were restarted
            in the first
      
      quarter.
            In the United States, capacities shut down during the energy crisis
            were partially restarted. At the end of the year, despite these restarts,
            1.3 million metric tons of installed capacity were temporarily stopped
            in North America due to energy supply issue;
          In
            the East, production in Russia and central European countries increased
            moderately, whereas Chinas production jumped 28% to 4.3 million
            metric tons, owing to the rapid startup of new smelting capacity. Distribution Shipments
    by Geographic Region and by Aluminum Source The products
          marketed by Primary Aluminum are principally sold in the worlds
          three major regions of consumption (Europe, Asia/Pacific and North and
          South America). This international presence is made possible by the
          Groups local facilities and its efficient international sales
          network. In the case of Alucam, ADG and Aluminium Dunkerque, in addition
          to selling its own share (based on equity interests in the operating
          companies) of the production output of the smelting facilities, the
          Group obtains, for its own use or for resale, the production output
          share of the other shareholders of these facilities.
      
      In addition,
          in order to enhance the geographic efficiency of its operations and
          to meet customer requirements, the Group may purchase ingots from third
          parties for resale in different locations and in different shapes. Therefore,
          the Groups sales of primary aluminum generally exceed its obtainable
          share of the annual production output of the smelting facilities in
          which it has an interest. In 2002, sales of primary aluminum originating
          from third parties represented 1% of total shipments.  Shipments
        by Geographic Region of Production
      2002
      
      
      
      2001(thousands
        of metric tons
      
      %
      
      thousands
        of metric tons
      
      %per
        year)
      
      
      
      per
        year)Europe
      859
      
      71
      
      905
      
      73Canada
      106
      
      9
      
      100
      
      8Australia
      236
      
      20
      
      228
      
      19Total
      1,201
      
      100
      
      1,233
      
      100Shipments
        by Aluminum SourceOutput
        from smelters controlled by the GroupAluminum
        Metal
      1183
      
      99
      
      1140
      
      92Trading,
        metal conversion
      18
      
      1
      
      93
      
      8Total
      1,201
      
      100
      
      1,233
      
      100 Shipments
    by Product Aluminum Metal
          distributes a full range of primary aluminum products, from the most
          standard, such as aluminum and alloy ingots, slabs and
      
      billets,
          to highly technical and specialized products such as welding and mechanical
          wire, high purity metals and thixotropic aluminum.  Shipments
        by Product
      2002
      
      
      
      2001(thousands
        of metric tons
      
      %
      
      (thousands
        of metric tons
      
      %per
        year)
      
      
      
      per
        year)Ingots
      299
      
      25
      
      369
      
      30Slabs
      429
      
      36
      
      379
      
      31Billets
      321
      
      26
      
      322
      
      26Other
      152
      
      13
      
      163
      
      13Total
      1,201
      
      100
      
      1,233
      
      100


35


» Information
  on the Company In 2002, the
          product mix was enhanced by the production of slabs, compared with 2001,
          as the Challenge Revenues program was pursued. Over the past several
          years, this program has involved refocusing the product mix to concentrate
          on value added cast products.
        Shipments
          by Customer Segment
        The majority
          of the primary aluminum requirements of the Groups European conversion
          activities are supplied by Aluminum Metal at prevailing market prices.
          From one year to the next, the corresponding volumes fluctuate based
          on changes in activity levels. They have historically accounted for
          26% to 38% of Aluminum Metals annual production during the period
          1992-2000. In 2002, intragroup sales accounted for approximately 40%
          of total shipments, or 476,000 metric tons.
      
      In 2002, Aluminum
          Metals shipments made to companies outside the Group were spread
          among a large number of customers. More than three-quarters of such
          shipments are purchased by customers representing individually less
          than 1% of annual production volume. No single customer accounts for
          more than 5% of sales to third parties. Aluminum Metal will generally
          enter into long-term supply contracts with those customers requiring
          such arrangements (for a discussion of the Groups policy with
          respect to forward sales and locking in of sales prices, see "Item 5.
          Operating and Financial Review and Prospects - General Information -
          Sensitivity of the Groups Operations to Future Fluctuations in
          Aluminum Prices").  Shipments
        by Customer
      2002
      
      
      
      2001(thousands
          of metric
      
      %
      
      (thousands
          of metric
      
      %tons
          per year)
      
      
      
      tons
          per year)Shipments
        to customers outside the Group
      725
      
      60
      
      754
      
      61Shipments
        to Group companies
      476
      
      40
      
      479
      
      39Total
      1,201
      
      100
      
      1,233
      
      100 Competition Internationally,
          Aluminum Metals principal competitors are the main North American
          industrial groups such as Alcoa, Alcan and Kaiser Aluminum, as well
          as other major aluminum producers such as BHP Billiton, Rio Tinto, Russky
          Aluminiy and Sual (Russia), Dubai (UAE) and Alba (Bahrain). The Companys
          principal competitors in Europe, in addition to Alcoa and Alcan, are
          Hydro Aluminium (which acquired VAW in 2002) and Corus.
      
      Aluminum products
          also compete in many markets with steel, copper, plastic and other materials
          for which aluminum may substitute in downstream applications. Aluminum
    Conversion Selected Aluminum
        Conversion Division Data
      
      2002
      
      2001
      
      2000Consolidated Net Sales (millions
          of euros)
      
      2,618
      
      2,676
      
      2,600Earnings from
        Operations (millions of euros)
      
      16
      
      23
      
      78Assets Excluding
        Cash and Cash Equivalents (millions of euros)*
      
      1,937
      
      2,004
      
      1,727Number of Employees
        (as of December 31)
      
      7,967
      
      8,254
      
      7,653 (*)
      The
        definition of Assets is not equal to the item "Capital Employed"
        used by Pechiney in calculationg Return on Capital Employed.


36


»Information
          on the Company
      Item
          4  The Group
          believes that it is one of the worlds leading producers of aluminum
          semi-finished products. The Group believes it is the second leading
          producer of hard alloy flat-rolled products and extrusions in the world
          and the third largest European manufacturer of rolled products. Its
          activities are organized in four divisions.
        The Aerospace,
            Transport, Industry division groups the production of aluminum rolled
            products for transport markets (aerospace, sea and land, excluding
            automotive) and industry, as well as the production of hard-alloy
            extrusions;
          The Cans,
            Automotive and Standard Rolled Products division groups the production
            of aluminum rolled products for the can, automotive and standard rolled
            products market of Neuf Brisach;
      
      The Foil
            and Thin Foil / Specialty Products division includes Pechiney Eurofoils
            foil and thin foil activities at Dudelange, Flémalle and Rugles,
            as well as different specialty activities (circles, precoated sheets,
            refined products, etc.);
          The Extrusions,
            Casting Alloys, Automotive division manufactures and markets aluminum
            soft alloy sections for the construction, transport and equipment
            markets, as well as casting alloys used almost exclusively in the
            automotive market. The division is also in charge of Pechiney Automotive,
            a cross-division structure specially dedicated to the automotivemarket.  Aerospace,
  Transport, Industry Selected
        Aerospace, Transport, Industry Data
      2002
      
      2001
      
      2000Net
        sales (millions of euros)(1)
      973
      
      1,013
      
      1,186Shipments
        (thousands of metric tons)(2)
      281
      
      267
      
      340 (1)
      Figures
        for 2000 not restated subsequent to the transfer, as of 2002, of the Mercus,
        Froges and Goncelin plants from the Aerospace, Transport, Industry division
        to the Foil and Thin Foil / Specialty Products division.(2)
      Including
        intragroup sales. Activities At its facilities
          located in France, the United Kingdom and the United States, the Aerospace,
          Transport, Industry division converts aluminum alloys into rolled products,
          extrusions and cast products. It serves four main technical markets:
          aerospace, industry, transport and heat exchangers for use in the automotive
          sector.
        In 2002,
          the division sold 281,000 metric tons.
        The average
          utilization rate of the divisions facilities in 2002 was approximately
          68%.
      
      The
          Aerospace, Transport, Industry division is organized by activities:
        technical
            rolled products in North America (Pechiney Rolled Products with Ravenswood,
            West Virginia, and its subsidiary Pechiney Cast Plates in Vernon,
            California and an Aluminium Lithium foundry in Chicago);
          technical
            rolled products in Europe (Pechiney Rhenalu facility at Issoire);
          hard alloy
            extrusions (Pechiney Aviatube with facilities at Montreuil-Juigné
            and Carquefou in France, Issoires extrusions and Workington
            in the United Kingdom);
          cast parts
            (Société des Fonderies dUssel).


37


»Information
    on the Company  Facilities(*)
      Products
      MarketsIssoire
      Plate
      Aerospace,
        industrial equipmentShates
        and sheets
      Aerospace,
        tanks, dumpers, boats, high-speed shipsWide
        coils
      Shipping
        containers, trucks, buses, trailersBars
        and wide sections
      Aerospace,
        transport, mechanical engineeringRavenswood(**)
      Plate
      Aerospace,
        industrial equipmentSheets
      Boats,
        high-speed ships, rail, trailersWide
        coils
      Shipping
        containers, trucks, buses, trailersBrazed
        products for exchangers
      Heat
        exchangers (automotive)Standard
        rolled products
      Construction,
        transportVernon(**)
      Cast
        plate
      Industrial
        equipmentChicago(**)
      Aluminum
        lithium ingots and billets
      AerospaceMontreuil-Juigné
      Bars,
        sections, tubes, wire
      Bar-machining,
        aerospace, mechanicalengineering,
        transport, sports and leisure equipmentCarquefou
      Precision
        tubes
      Automotive,
        aerospace, spor ts equipmentWorkington(***)
      Sections,
        bars
      Aerospace,
        mechanical engineering, transportUssel
      Cast
        parts
      Aerospace,
        transport, energy (*)
      Société
        Métallurgique de Gerzat was sold on May 31, 2001, and the refined
        products facilities (Mercus, Froges and Goncelin) have been consolidated
        in the Foil and Thin Foil / Specialty Products division since September
        1, 2001.(**)
      American
        facilities; Aluminum lithium cast products, facilities acquired in May
        2002 from McCook Metals.(***)
      British facilities. Markets The year 2002
          was marked by an unfavorable economic environment linked to the combined
          effect of the low phase of the aerospace cycle and the consequences
          of the September 11, 2001, terrorist attacks on the general economy.
        After a record
          year in 2001, the global aerospace market slid downhill in 2002, declining
          by 35% from the previous year.
        Nevertheless,
          the situations of Airbus and Boeing cannot be compared. In addition,
          Pechiney's relative exposure is greater vis-à-vis Airbus, which
          was much less affected by this environment than Boeing.
        In 2002,
          there were contrasting trends in the North American market.
        Markets
            for heat exchangers and standard rolled products reported growth with,
            respectively, an increase in automobile production in North America
            and the rebuilding of inventories by distributors.
      
      However,
            the transport market (road, rail) is still at the low point of the
            cycle and the industrial equipment market is still penalized by the
            lackluster situation in the electronics sector.This difficult
          environment had an impact on the Groups North American competitors
          - certain of them ceased their activity definitively (Scotsborro, McCook
          Metals), and others chose to file for bankruptcy under Chapter 11 (Kaiser).
        This situation
          enabled Pechiney Rolled Products to increase its market share in the
          heat exchanger and industrial equipment segments, and to acquire some
          equipment from McCook Metals. Pechiney believes that this equipment
          allows it to become a world leader in the production of aluminum lithium
          for civil and defense aerospace applications. In addition, Pechiney
          has strengthened its relations with its large North American customers
          by supplying products for Lockheed Martins F16 program.


38


»Information
          on the Company
      Item
          4 Operating
    priorities in 2002 Confronted
          by such an environment, Pechineys Aerospace, Transport, Industry
          facilities adjusted production capacities and reduced fixed costs, without,
          however, lessening their ability to respond to the coming upturn in
          the aerospace cycle.
        - Two
          restructuring plans were implemented at the extrusion plants of Aviatube
          France and Workington, leading to a total staff cut of approximately
          130 people.
        - At Ravenswood,
          an ambitious recovery plan was launched:
        approximately
            200 jobs were eliminated;
          the plants
            labor contract was extended for two years;
          a task
            force was created in October 2002 to increase the plants productivity
            in all areas (production, administration, marketing and sales, support
            functions, etc.);
          finally,
            the business reorganized its product / customer portfolio to focus
            on the most profitable segments and on those in which its differentiation
            potential is the greatest.
      
      In 2002, Issoire
          decided to invest in new casting equipment to secure and ensure the
          reliability of sheet production for its customers and increase production
          capacity in anticipation of the coming upturn in the aerospace cycle.
        All of the
          divisions facilities also launched a plan to reduce working capital
          requirements and set ambitious objectives to be met by the end of 2003.
          For example, significant results have already been achieved at SFU,
          and Issoire has taken advantage of the plan to improve respect for shipping
          deadlines and enhance customer service.
        To speed
          the accomplishment of its strategic and operating objectives, the Aerospace,
          Transport, Industry division continued to apply new work methods based
          on the Pechiney Continuous Improvement System. This initiative focused
          on safety, employee mobilization, constant adaptation to change, process
          control and the reliability of the logistic chain. Development
    of new products Research and
          development activities continued to focus on conversion products and
          processes (casting, rolling and heat treatments). New modern methods
          promoting teamwork were introduced to facilitate exchanges within the
          Company or with customers and to accelerate the development of new products.
        In the aerospace
          sector, the division continues to work in partnership with Airbus, Boeing,
          Dassault and other aerospace manufacturers. Focused efforts have been
          made to identify innovative solutions for future programs
      
      (particularly
          with aluminum lithium). SFU launched production of the passenger door
          of Dassaults Falcon jet; the first door was mounted in December
          2002.
        The alloys
          developed for the land and sea transport industry (industrial vehicles
          and high-speed ships) respond to customer demand for more resistant
          mechanical characteristics before and after welding, reduced thickness
          and easier cutting and forming. In 2002, Pechiney launched Sealium,
          an alloy for marine applications. Competition The divisions
          principal competitors are Alcoa and Alcan worldwide, Kaiser in the American
          market, and Corus in the European market.


39


» Information
  on the Company Cans,
    Automotive, Standard Rolled Products Selected
        Cans, Automotive, Standard Rolled Products Data
      2002
      2001
      2000Net
        sales (millions of euros)
      721
      734
      685Shipments
        (thousands of metric tons)(1)
      307
      293
      294.2(1)
        Including intragroup sales.  The Cans,
          Automotive,Standard Rolled Products division regroups four activities: can stock
          for cans,automotive
          parts, heat exchangers and
      
      standard rolled
          products. Theseactivities areconducted
          at a singleproduction facility, Neuf Brisach.  Activities
      Products
      
      MarketsCans
      Can
        stock, varnished and degreased ends
      
      Food
          packaging, beverage packagingAutomotive
      Car
        bodies, automotive parts, suspension systems
      
      AutomotiveHeat
        exchangers
      Heat
        exchangers
      
      Automotive,
          construction, industryStandard
        rolled products
      Standard
        coils and sheets, OAB and pre-anodized products
      
      Construction,
          industry, distribution  In 2002, the
          division consolidated its position as the leader in the European can
          market. Good conditions in the European market enabled the division
          to take full advantage of the partnership relations forged with its
          major customers (Rexam, Schmalbach-Lubeca and Crown Cork & Seal)
          to increase the volume of can stock shipped in 2002.
        With a good
          position in the pet food segment, which reported strong growth in 2002,
          the division won market share in aluminum cans, confirming its role
          as a major player in this market segment, in partnership with customers
          such as Impress Metal Packaging.
        The automotive
          business reported further growth in volume shipped in 2002 (+27%). Pechiney
          signed a long-term agreement with Daimler Chrysler, whose Class E has
          made it one of the largest aluminum consumers in the automotive market.
          Pechiney confirmed its position as the main supplier of PSA and Renault
          by providing most of the volume of aluminum parts for the new models
          Vel Satis, Espace and 807.
        The heat
          exchangers business diversified its client portfolio and in this manner
          managed to increase its sales volumes.
      
      In 2002, the
          standard rolled products business reported an increase of more than
          17% in sales volume over 2001. The activity continued to promote high
          value added products (pre-anodized, OAB-AID, Laminium brand, etc.).
          By systematically focusing on high value added products and exploiting
          commercial inventories, the business was able to maintain a good level
          of profitability, in spite of a relatively depressed economic environment.
          During 2002, the standard rolled products business also developed its
          sales of rolled products made from recycled scraps from the heat exchangers
          business.
        Finally,
          in 2002 the division continued to implement the strategic modernization
          of its manufacturing base with the acquisition of a new duplex furnace
          at Neuf Brisach which will provide additional production capacity of
          53,000 metric tons per year. Startup took place in November 2002.


40


»Information
          on the Company
      Item
          4 Markets In Europe,
          the aluminum can stock market rose significantly (+6%), reflecting good
          market conditions for beverage cans and increased market share for aluminum
          vis-à-vis steel. In particular, growth was very strong in central
          Europe and Russia, which are 100% aluminum regions. The penetration
          of aluminum exceeded 58% in 2002 for a can stock market of 344,000 metric
          tons for all of Europe (including Turkey and eastern European countries).
        Prospects
          for growth in the consumption of beverage cans in Europe remain strong
          (3% to 4% per year). However, the can stock market is expected to remain
          stable in light of the conversion to steel at Rexams Spanish facility.
        In addition,
          the introduction of packaging deposit requirements in Germany poses
          a threat for the beverage can market. The impact should nevertheless
          be minimized for the aluminum sector, given its low level of penetration
          in the beverage can market in Germany (approximately 10%).
        Demand for
          varnished and degreased products (ends) for beverage cans in 2002 is
          estimated at 133,000 metric tons with an average annualized growth rate
          of 2% between 2002 and 2005 in light of the many thickness reduction
          projects under way.
      
      For food cans,
          the market for varnished and degreased products, was approximately 67,000
          tons in 2002 and is expected to continue to grow regularly at a rate
          of 2-3% per year.
        In the automotive
          sector, car manufacturers confirmed their choice of aluminum as the
          best material to lightweight car bodies. The market for aluminum rolled
          products used in car bodies more than doubled in two years, from 35,000
          metric tons in 2000 to 78,000 metric tons in 2002. The use of aluminum
          in the automotive sector continues at a sustained pace.
        After growth
          of more than 8% per year in the European market between 1999 and 2002,
          demand for heat exchangers is expected to increase by approximately
          5% per year, owing to the development of automobile air conditioning
          systems.
        In the markets
          for construction and industry, demand for standard rolled products in
          Europe was moderate (approximately 2.5% in 2002). However, certain countries
          like Germany were more seriously affected, particularly in the construction
          sector. Research
    and development Research and
          development pursued its efforts to develop:
        products,
            in partnership with major customers, in applications for cans (thickness
            reduction, varnishes), automotive products (qualification of
      
      alloys for
          car bodies), heat exchangers (qualification of new long-life anticorrosion
          alloys) and thin sheets (high resistance alloys);
        traditional
            conversion processes (casting, rolling and heat treatments). Competition Pechineys
          main competitors in the European market are Alcan, Hydro Aluminium,
          Alcoa and Corus.


41


»Information
    on the Company Foil
    and Strip / Specialties Selected
        Foil and Strip / Specialties Data
      2002
      
      2001
      
      2000Net
        sales (millions of euros)(1)
      415
      
      354
      
      158Shipments
        (thousands of metric tons)(2)
      141
      
      111
      
      78.3 (1)
      Figures
        for 2000 not restated subsequent to the transfer, as of 2002, of the Mercus,
        Froges and Goncelin plants from the Aerospace, Transport, Industry division
        to the Foil and Strip / Specialties division.(2)
      Including
        intragroup sales. The Foil and
          Strip / Specialties division groups the manufacture of foil and strip,
          circles, precoated sheets, Rubanox refrigeration panels, heat exchangers,
          refined aluminium and foil and the sale of technology (Pechiney Aluminium
          Engineering). It operates eight production facilities located in France
          (Annecy, Chambéry, Froges, Goncelin, Mercus, Rugles), Belgium
          (Flémalle) and Luxembourg (Dudelange).
        With plants
          at Rugles, Dudelange and Flémalle, Pechiney Eurofoil is a major
          player in the foil and thin foil market in Europe. The Group believes
          it is Europes third largest manufacturer of this type of product.
      
      In addition,
          the Foil and Strip / Specialties division confirmed its position as
          the European leader in the refrigeration panel and circle markets. Pechiney
          Aluminium Engineering (PAE) believes it is the worlds leading
          supplier of continuous casting technology.
        Lastly, with
          its Mercus, Froges and Goncelin facilities, Pechiney is the only global
          manufacturer to possess a full line of activities linked to the production
          of foil for electrolytic capacitors.  Activities
      Products
      Markets
      FacilitiesFoil
        and thin foil
      Foil
        and thin strip
      Food,
        industriel and
      RuglesThickness
        5 to 200μ
      pharmaceutical
      Dudelangepackaging
      FlémalleCircles,
        precoated sheets, Rubanox
      Circles,
        precoated sheets,
      Domestic
        appliances,
      Annecypanels
      aluminum
        panels
      construction,
        automotive,
      Chambérythickness
        0.3 to 6 mm
      industryHeat
        exchangers
      Coated
        and uncoated sheets
      Automotive,
        construction,
      Ruglesthickness
        60 to 200 μ
      industrie
      DudelangeSale
        of technology
      Continuous
        casting, processing
      Aluminum
        conversion,
      Voreppeof
        liquid metal, technical assistance
      industryRefined
        products
      High-purity
        aluminum, etched
      Electronics,
        lighting
      Frogesand
        formed foil for capacitors, Bandoxal
      
      GoncelinMercus


42


»Information
          on the Company
      Item
          4 Foil
    and Strip The integration
          of Eurofoils activities, acquired in June 2001, has begun to bear
          fruit. Technical synergies have prompted a recovery at the Rugles facility.
        In 2002,
          Pechiney produced 95,000 metric tons of foil and thin foil with the
          majority of sales volume reported in western Europe. Demand in the
      
      European market
          is evaluated at approximately 725,000 metric tons per year with annual
          growth estimated for the period 2002-2005 at 2%.
        Pechineys
          main competitors in the European market for foil and thin foil are Alcan
          and Hydro Aluminium. Specialties Sales volume
          of specialty products was stable in 2002 in comparison with 2001:
        Production
            of Rubanox refrigeration panels totaled 5,200 metric tons in 2002.
            Pechiney is the second largest operator in the European market, which
            grows at a rate of 2% per year. Pechiney has a market share of approximately
            30%;
          Production
            of circles represented 16,000 metric tons in 2002. Demand in this
            market remained generally stable;
          The Satma
            facility at Goncelin, which produces etched and formed sheets sold
            to capacitor manufacturers mainly located in Asia, has a
      
      world
            market share of 4%. Competition is mostly Japanese, but also Italian
            (Becromal). New Chinese competitors have also recently entered the
            market;
          In the
            high purity aluminum market, which is very cyclical although it has
            an average rate of historical annualized growth of 7%, Froges sold
            2,300 metric tons of high purity alloys in 2002 (market share between
            8% and 20% depending on the type of alloy). Competition is mainly
            from Japanese companies and Hydro Aluminium. Almost half of sales
            are reported in Europe;
          As for
            technology sale, Pechiney sold two continuous casters in 2002.


43


»Information
  on the Company Extrusions,
    Casting Alloys, Automotive Selected
        Extrusions and Casting Alloys Data
      2002
      
      2001
      
      2000Consolidated
        Net Sales (millions of euros)
      509
      
      575
      
      571Shipments
        (thousands of metric tons)Extrusions
      82
      
      86
      
      91Casting
        alloys
      133
      
      137
      
      141 Extrusions The Extrusions
          division is involved in the manufacture and sale of aluminum alloy extrusions
          (precoating, anodizing, thermal brake and mechanical finishing).
        In 2002,
          sales by French extrusions companies accounted for 53% of total gross
          sales, and the remaining 47% was accounted for by sales of German companies.
      
      The Extrusions
          division has six production facilities, three located in France and
          three in Germany.  Facilities
      Capacity
      
      
      Markets(thousands
          of metric tons per year)France
        - Pechiney SoftalHam
        (Somme)
      20
      
      
      ConstructionNuits-Saint-Georges
        (Côte-dOr)
      23
      
      
      Transport,
        industryAubagne
        (Bouches-du-Rhône)
      9
      
      
      Construction,
        distributionGermany
        - PAPLandau
      10
      
      
      Construction,
        transportCrailsheim
      20
      
      
      Transport,
        industryBurg
      14
      
      
      Construction,
        industry  The Groups
          Extrusions business manufactures and sells soft alloy extrusions which
          are used in a number of different applications in the construction industry,
          including doors, windows, curtain walling systems and interior building
          frames, as well as applications in other industries, including truck
          siding, mechanical applications and billboards.
        The Group
          believes that Extrusions is a major producer in the European market
          for soft alloy extrusions on the basis of 2002 tonnage sold, and has
          a particularly strong position in France (through its wholly-owned subsidiary,
          Pechiney Softal) and in Germany (through its wholly-owned subsidiary,
          Pechiney Aluminium Presswerk - PAP).
        After a period
          of growth between 1996 and 2000, 2001 and 2002 were marked by a downturn.
          The French market was down 5% in 2001 and recovered only 1% in 2002,
          for a total decline of 4%. The decrease was even greater in the transport
          and industry
      
      market, which
          dropped 10% in two years, while the construction market remained steady.
        In Germany,
          demand declined even more: 10% in 2001 and 4% in 2002, for a total of
          14%. This trend was mostly due to poor conditions in the construction
          market, in which demand for extrusions fell 21% in two years. At the
          same time, the transport and industry market was down 6% between 2000
          and 2002.
        Tonnage sold
          by Pechiney (85,600 metric tons in 2001 versus 82,000 metric tons in
          2002) decreased by 4%. Between 2000 and 2002, sales volume fell 6% in
          France and 12% in Germany, whereas, during this period, the market declined
          4% in France and 14% in Germany. Although the trend in sales was negative,
          the division managed to stabilize its market share, with a small erosion
          in France and a small growth in Germany.


44


»Information
          on the Company
      Item
          4  The introduction
          of the Pechiney Continuous Improvement System began to bear fruit. Industrial
          efficiency increased and gains are close to the objective. In addition,
          several extruded parts were started up in 2002
      
      automotive
          applications, including for PSA, Renault and the new Audi A8. A major
          supply contract was signed with Renault and new preliminary studies
          were launched with PSA, Renault and Daimler Chrysler. Primary
    and secondary casting alloys The casting alloys
    business produces and sells primary and secondary aluminum alloys in the form
    of ingots or liquid metal used to manufacture cast parts, as well as forged
    billets. The business operates
    two facilities in France. Facilities
      Capacity
      
      
      Markets(thousands
          of metric tons per year)Aluminium
        PechineySabart(Ariège)
      45
      
      
      Automotive,
        forgeAffimetCompiègne(Oise)
      105
      
      
      Automotive  The casting
          alloys business addresses the needs of the automotive market which absorbs
          approximately 80% of its production. The remainder is sold to many other
          sectors, principally linked to the transport and aerospace markets.
        In 2002, in
          a depressed automotive market (car registration was down 5% in France),
          the good performance of Peugeot-Citröen and, to a lesser extent,
          Renault, maintained business volume at a satisfactory level, as aluminum
          continued to pursue its penetration into the automotive sector. The
          casting operations of PSA and its national and foreign subcontractors
          benefited from the joint production of diesel engine blocks for PSA
          and Ford (1.4 l and soon 1. 6 l).
      
      With regard
          to secondary aluminum alloys, margins were, however, affected by the
          lack of aluminum waste available for recycling. This phenomenon pushed
          up the relative price of this commodity compared with the LME price
          for primary aluminum. As for primary aluminum alloys, 30% to 40% of
          production is exported and the business supplies approximately 50% of
          the French market. The business provides approximately 25% of the French
          markets secondary aluminum alloys and exports less than 10% of
          its production. Pechiney
    Automotive Pechiney Automotive
          coordinates the development of sheets, profiles and casting alloys in
          partnership with car makers and parts manufacturers.
        
        In 2002,
          Pechiney consolidated its activities with the principal car makers and
          parts manufacturers:
        continued
            work on car bodies: aluminum hoods and door components (Renaults
            Vel Satis and Espace, Peugeots 807);
          Numerous
            developments in other applications: suspension systems (Peugeot),
            interior parts and energy absorption components;
          successful
            launch of the PSA/Ford diesel engine block (Pechiney supplies a significant
            percentage of the aluminum alloys used).
      
      In 2002, strong
          growth was reported in sales in Germany, consecrating development efforts
          at a certain number of German car makers and parts manufacturers:
        supply
            of 38% of the aluminum sheet used in Daimler Chryslers Mercedes
            Class E car bodies;
          supply
            of structural profiles for the new Audi A8 (formed by Thyssen Krupp);
          supply
            of semi-finished products for many parts manufacturers (Wagon, Bilstein,
            Bos, etc.).


45


» Information
  on the Company Packaging The Packaging
          sector is comprised of the following divisions: Plastic Packaging (Flexible
          Packaging Europe, Flexible Packaging North America,
      
      Bottles),
          Cebal Tubes Europe, Cebal Tubes Americas, Cebal China, Cebal Aerosols,
          Techpack International and Pechiney Caps and Overcaps.  Selected
        Packaging Data
      2002
      
      2001
      
      2000Net
        Sales (millions of euros)
      2,342
      
      2,418
      
      2,085Earnings
        from Operations (millions of euros)
      129
      
      136
      
      100Assets
        Excluding Cash and Cash Equivalents (millions of euros) (*)
      2,120
      
      2,396
      
      2,065Number
        of Employees (as of December 31)
      16,154
      
      16,494
      
      14,142 (*) The definition
  of Assets is not equal to the item "Capital Employed" used by Pechiney in calculating
  Return on Capital Employed. Plastic Packaging Plastic Packaging
          is a worldwide business, encompassing flexible packaging and plastic
          bottle operations in North America and Europe, where Pechiney considerably
          strengthened its position in 2001 through the acquisition of Soplaril,
          one of Europes largest manufacturers of flexible packaging. The
          Plastic Packaging division also has a base in South America, where it
          acquired Envaril Plastic Packaging Srl in Argentina in 2001. It is also
          active in New Zealand through Danaflex Packaging.
      
      As one of
          the major manufacturers of flexible packaging for the food, healthcare
          and specialty markets in North America and Europe, the Plastic Packaging
          division also produces single- and multi-layer plastic bottles in North
          America, the United Kingdom and Continental Europe.  Plastic
        Packaging Data
      2002
      
      2001
      
      2000Net
        Sales (millions of euros)
      1,291
      
      1,237
      
      1,021Breakdown
        of sales by product line (% of Total Division Sales)(1)Flexible
        Packaging
      86
      
      85
      
      82Plastic
        Bottles
      14
      
      15
      
      18Breakdown
        of sales by country (% of Total Division Sales)(1)United
        States
      68
      
      76
      
      80France
      15
      
      11
      
      7Rest
        of Europe
      17
      
      13
      
      13(1)
        Including intragroup sales.


46


»Information
          on the Company
      Item
          4 Products The Plastic
          Packaging division manufactures high value added flexible packaging
          and plastic bottles characterized by its high barrier properties, which
          enhance product shelf life. In the United States and Europe, the division
          produces a wide range of single- and multi-layer films and laminations,
          pouches, bags, lidstock and thermoformed trays. Flexible Packagings
          product line includes more than 2,000 products, which are continually
          updated and improved to meet evolving customer demand. In addition,
          Plastic Packaging activities include the production of a wide range
          of single- and multi-layer polyolefin and PET barrier bottles.
        The divisions
          capacity for innovation, which is supported by very structured research
          and development teams, is critical to competitiveness, allowing the
          division to maintain a strong position in the field of co-extruded multi-layer
          barrier films and coated aluminum foil.
      
      The Plastic
          Packaging division also has significant proprietary technology and expertise
          in extrusion blow molding of high-barrier containers. During 2002, the
          Plastic Packaging division continued to develop and commercialize its
          co-injection molding technology to manufacture high-barrier PET plastic
          preforms. The preforms are later blown into bottles suited for products
          requiring oxygen-barrier protection, such as natural juices, beer, sauces
          and ketchup. The Group believes the plastic bottle offers important
          advantages for products requiring high oxygen-barrier protection and
          has major potential for venues where glass is prohibited or not desirable.
          In 2002, the division commercialized two internally designed high output
          polyolefin lines at its Canadian facility in Brampton.  Production
        FacilitiesAs
        of December 31, 2002, Plastic Packaging operated 37 production facilities.Plastic
        Packaging
      Number
          of plants
      
      Plastic
        Bottles
      Number
          of plantsNorth
        America
      
      
      
      North
        AmericaUnited
        States
      (1)(2)(3)14
      
      
      United
        States
      (2)3Canada
      1Europe
      
      
      
      EuropeFrance
      (6)6
      
      
      United
        Kingdom
      (5)1Spain
      3
      
      
      France
      1Italy
      2Portugal
      1Germany
      1Czech
        Republic
      1South
        AmericaArgentina
      2AustralasiaNew
        Zealand
      (4)1 (1)
      Including
        the two JPS Packaging plants acquired in December 2000 and the Milwaukee
        plant (formerly Phoenix Healthcare Products) acquired in January 2002.(2)
      Of
        which one is a combined flexible packaging and plastic bottle facility.(3)
      These
        figures include a flexible packaging plant in Cleveland, Ohio, which was
        closed in 2002 due to competitive reasons and its operations were consolidated
        into other existing facilities.(4)
      Unconsolidated.(5)
      UK
        operations were consolidated into one site in 2002 and the second facility
        was closed.(6)
      Includes
        Avenir Print Serve, acquired in November, 2002.


47


»Information
  on the Company   The
        Plastic Packaging division also benefits from a research and development
        center in Neenah, Wisconsin. A second research facility in Voreppe, France,
        was closed in 2002 and its activities were distributed among the Groups
        European flexible packaging manufacturing facilities. The division also
        operates graphics centers in Dijon, France, and Barcelona, Spain. In 2002,
        a graphics center located in Neenah, Wisconsin, was closed and its activities
        outsourced to a company that specializes in graphics operations.
        Recent
          strategic acquisitions
        Reflecting
          its strategy to expand business in activities with potential for profitable
          growth, the Plastic Packaging division benefited from major financial
          investments:
        In August
            2001, the Group acquired Soplaril, a European manufacturer of film,
            laminated products and pouches for food, medical and consumer products.
            Soplarils experience and expertise in multi-layer blown films
            and stand-up pouches, as well as its capacity for innovation, will
            strengthen the Groups flexible packaging business in Europe,
            which has become the fifth largest flexible packaging activity in
            Europe;
          In October
            2001, the acquisition of industrial assets from Harken Products, an
            American manufacturer of flexible packaging for the healthcare and
            dental hygiene market, allowed Pechiney to strengthen its presence
            in this segment;
          In November
            2001, the Group acquired Envaril Plastic Packaging Srl (Envaril),
            an Argentine manufacturer of films, processed meat casings and barrier
            bags for meat and cheese products. In 2001, Envaril reported sales
            of U.S.$18 million.In 2002,
          the division pursued its strategy of internal and external profitable
          growth:
        In February
            2002, Pechiney Plastic Packaging acquired Phnix Health Care
            Products, LLC, a manufacturer of flexible packaging products for the
            medical market with sales of U.S.$16 million. This acquisition broadens
            the Groups line of medical packaging products;
          In July
            2002, the group completed its acquisition of Danaflex Packaging Corporation,
            in which it had acquired a majority interest in 1998. At its Wellington,
            New Zealand, facility, Danaflex Packaging manufactures plastic packaging
            materials and packaging systems for the meat, dairy and food industries.
            Of particular note is the global technology for a proprietary system,
            the Danaflex Multi-bagger system that increases the efficiency and
            traceability of meat vacuum packaging for our clients;
          In August
            2002, the Bottles business opened its first plastic bottles manufacturing
            facility in continental Europe. Located at Uchaux in southern France,
            it will serve the French private-label condiment market;
          In December
            2002, Pechiney acquired Avenir Print Service, a French company specializing
            in small runs of plastic films for health and beauty packaging. The
            company operates a new manufacturing facility located in Montreuil-Bellay,
            France;
      
      Investments

        Industrial
          investments made it possible to improve the efficiency of existing lines
          and promote modernization while increasing production capacity.
        In September
          2002, Pechiney Plastic Packaging announced its plans to modernize operations
          at its flexible packaging facility in Menasha, Wisconsin. This U.S.$17
          million expansion will increase the plants capacity and includes
          the creation of a printing cell and an upgrade to extrusion lamination
          equipment to support new technologies.
        The business
          also announced plans to expand blown film production capacity at its
          flexible packaging plant in Neenah, Wisconsin. Startup is scheduled
          for the first quarter of 2003.
        In September
          2002, Envaril Plastic Packaging launched a shrink bag capacity expansion
          to improve service to the Argentine market and boost exports within
          South America.
        Pechiney
          Soplaril Flexible Europe also made major investments in 2002 with the
          acquisition of a new press in Darmstadt, Germany, and of a triplex laminator
          in Garbagnate, Italy. It also acquired Doypack® cap-fitting and
          bag-making machines for the facility in Moreuil, France.
        North American
          activities In 1999, the
          Plastic Packaging division launched an ambitious Continuous Improvement
          program that produced results as of 2001 in terms of cost reductions
          and improved competitiveness.
        Continuous
          Improvement initiatives and their systematic deployment remain a major
          focus of the divisions manufacturing strategy. The priority is
          to select and transfer best practices in order to anchor an environment
          for change and continuous improvement in performance. Experts in key
          areas such as Policy Deployment, Safety, Workplace Organization and
          Standard Work routinely come together to refine best practices, tools
          and procedures.
        In 2001,
          Continuous Improvement initiatives also moved into the support groups,
          such as Sales and Marketing, Research and Development, Human Resources
          and Information Services. In 2002, Continuous Improvement initiatives
          grew in scope and effectiveness. During the year, Pechiney Plastic Packaging
          created a cultural diagnostic designed to ensure that Continuous Improvement
          remains an ongoing part of the businesss foundation. This diagnostic
          tool allows the business to identify areas of opportunity and develop
          action plans for embracing and sustaining Continuous Improvement. The
          business is also refining its business processes through the use of
          cross-functional teams. A cross-functional commercialization team has
          refined the process for bringing new products to market, introducing
          more accountability and discipline while giving greater attention to
          customer requirements, design, and process capability. In addition,
          pilot projects are nearing completion for developing best practices
          in specific manufacturing processes and the development of Statistical
          Problem Solving tools.


48


Information
          on the Company
      Item
          4  European
          activities
        In Europe,
          Pechiney Soplaril Flexible Europe implements the Pechiney Continuous
          Improvement System by promoting the sharing of best
      
      practices.
          The division exploited major synergies between safety initiatives developed
          by Pechiney and Soplarils expertise in the realm of hygiene.Markets
          and DistributionIn North America,
          the Plastic Packaging divisions customers include Abbott Laboratories,
          Bar S Foods, Cargill (Excel), ConAgra, Inc., H. J. Heinz Company, Hormel
          Foods Corporation, Keebler Co., Kraft Foods (a division of Philip Morris
          Companies, Inc.), Land O Lakes, Inc., Minute Maid (The Coca-Cola
          Company), Motts Company (Cadbury-Schweppes), Plastipak, Pepsi
          Cola, SSE, Schreiber and Welch Foods, The Procter & Gamble Co.,
          The Smithfield Companies and Unilever N.V. The American divisions
          five largest customers accounted for approximately 41% of its sales
          in 2001. Over the last few years, customers in the United States food
          industry have tended to reduce the total number of their suppliers in
          favor of developing more stable, long-term relationships. This trend
          offers advantages for the large supplier with a wide product portfolio
          and global operations. However, it has also placed significant pressure
          on prices in the corresponding markets, making the acceleration of Continuous
          Improvement projects an even greater priority.
        In South
          America, the integration of Envaril into the group continues. Exchange
          of technology has strengthened the companys position in the global
          fresh meat packaging market.
      
      In Europe,
          Pechiney Soplaril Flexible Europe was organized regionally into four
          business units - France, Spain/Portugal, Italy and Germany/central Europe
          - that focus on their own customers and markets, and operate their own
          sales, manufacturing and research and development resources. The main
          customers of Pechiney Soplaril Flexible Europe include (i) in the food
          industry, Bel, Cadbury Schweppes plc, The Danone Group, H.J. Heinz Company,
          Kraft International, Lactalis, Nestlé S.A. and Senoble, and (ii)
          in home and personal care, Aventis, Unilever N.V., Novartis AG, The
          Procter & Gamble Co. and The Roche Group.
        With respect
          to the Plastic Bottles business, recently developed polyolefins and
          PET barrier bottles for food products and fruit juices have experienced
          significant growth. The Group believes that this market should continue
          to grow and benefit from the use of plastic as a substitute for glass,
          especially in venues where replacing glass by plastic can heighten product
          differentiation, convenience and safety.
        The Plastic
          Packaging division distributes the majority of its products through
          its own sales network directly to its customers.CompetitionThe Group
          estimates that there are more than 300 participants in the North American
          flexible packaging market. Principal competitors in the flexible packaging
          market include Bemis, Cryovac (a division of Sealed Air Corporation),
          Printpack Inc. and Rexam. In the bottle market, the main competitors
          are Owens Illinois and Graham Packaging.
        In Europe,
          the flexible packaging market is equally fragmented, with
      
      approximately
        400 companies operating in the sector. However, the consolidation trend
        which was initiated in 2001, continued in 2002. In April, Amcor (which
        had merged with Danisco & Akerland in 2001) acquired the Tobepal (Spain)
        and Rexam (United Kingdom) plants; Bemis took over Walki in October; and
        Alcan Packaging reached a non-binding agreement in principle with Norsk
        Hydro to purchase VAW Packaging in November 2002. Wipak also acquired
        Covex (formerly Wolf-Bayer).


49


»Information
  on the Company Cebal
    Tubes Europe Cebal Tubes
          Europe is one of the four divisions created by the reorganization of
          Cebal. With Cebal Tubes Americas, it is, in the Groups
      
      opinion, the
          world leader in the market for collapsible plastic, laminated and aluminum
          tubes. The following table
    sets forth selected Cebal Tubes Europe data. Selected
        Cebal Tubes Europe Data
      2002
      
      2001
      
      2000Net
        Sales (millions of euros)
      240
      
      271
      
      282Sales,
        gross, by market (% of Total Division Sales)(1)Beauty
      63
      
      62
      
      59Personal
        care - dental hygiene
      2
      
      9
      
      14Healthcare
      13
      
      10
      
      12Other
        (food, household and industrial)
      22
      
      19
      
      15Sales,
        gross, by geographic region (% of Total Division Sales)(1)France
      45
      
      49
      
      41Germany
      25
      
      23
      
      17Italy
      11
      
      11
      
      9Eastern
        Europe
      9
      
      5
      
      5Rest
        of Europe
      -
      
      2
      
      23Other
      10
      
      10
      
      5Sales,
        gross, by product (% of Total Division Sales)(1)Plastic
        tubes
      70
      
      67
      
      63Laminated
        tubes
      6
      
      9
      
      13Aluminum
        tubes
      24
      
      24
      
      24 (1)
      Including
        intragroup sales. Products Cebals
          collapsible laminated, plastic and aluminum tubes mainly target the
          cosmetics, personal care and healthcare markets. Its packaging products
          are some of the most commonly used by mass-market and selective distribution
          brands in light of the good value they represent for the price and the
          sophistication of the printing and finished techniques employed by Cebal
          Tubes Europe.
        Tubes are
          popular in western countries and the Group believes that they have high
          growth potential in emerging countries, especially in Eastern Europe,
          where per capita consumption is increasing rapidly. Cebal Tubes Europe
          is also present in Poland and the Czech Republic.
      
      Cebal Tubes
          Europe places great emphasis on product innovation, since it is an increasingly
          important differentiation factor. In 2001, the division won two prizes
          awarded by the European Association of Tube Manufacturers. It also presented
          three new products at the Luxe Pack deluxe packaging fair in Monaco.
          These products effectively address current cosmetics issues and were
          acclaimed by the professional press and customers alike. The division
          presented an airbackless tube, which is particularly content-protective,
          an elliptical tube with a very attractive serving cap, and a dual tube
          for the mixture of two components just before use. In 2002, as Cebal
          continued to innovate (two-colored service cap, very transparent tubes,
          3D tubes, tubes with pointillist hotstamping, embossed tubes), the division
          began to commercialize the innovations presented in 2001 - Tandem for
          a cosmetics manufacturer and airbackless tubes for a pharmaceutical
          and skin cosmetics laboratory (Zeta-Pharm).


50


»Information
          on the Company
      Item
          4  Production
        FacilitiesThe following table sets forth Cebal Tubes Europes 16 production facilities.Cebal Tubes Europe
   Aluminum
   
   Plastic
   
   LaminatedFrance(1)
   1
   
   4
   
   (2)1Germany
   
   
   1Italy
   1
   
   1Poland
   
   
   1Czech Republic(3)
   1
   
   
   
   1Morocco(4)
   1China
   
   
   1
   
   1 (1)
      Cebal
        Tubes Europe has four additional facilities in France that are not mentioned
        in this table: Cotuplas (mechanical construction), Sefimo (molds for plastic
        materials), DM Photogravure (photography) and Carrillon (adhesive labels).(2)
      Combined
        plastic tube and laminated tube facility.(3)
      Combined
        aluminum tube and laminated tube facility.(4)
      Tubes,
        flexible packaging and household articles.  Cebal Tubes
          Europe continued to restructure its industrial base in 2002:
        After the
            closing of three facilities in 2000 and the refocusing of the lamination
            unit at the Ste-Menehould facility in France on complex tubes for
            the cosmetics market in 2001, the division sold its aluminum tubes
            business in Finland;
      
      Industrial
            investment continued with a very targeted focus: development of production
            capacities in Eastern Europe, investments in productivity, development
            of production capacity for Cebalcap service caps;
          Implementation
            of the Pechiney Continuous Improvement System was pursued, particularly
            through the introduction of European networks to share best practices.  Markets
  and Distribution After a year
          in 2001 marked by a focus on "Quality and Service" through the introduction
          of customer service representatives and the creation of a quality department,
          the division addressed the following issues in 2002:
        It developed
            its resources in line with the achievements of the previous year by
            bolstering quality control, introducing preventive measures (process
            reliability and zero error systems) and focusing on logistic improvements;
      
      It reaped
            the first benefits in terms of quality (15% decrease in customer returns
            for plastic tubes and 40% decrease for aluminum tubes compared with
            2001);
          It reaped
            the first benefits in terms of service (late deliveries were cut by
            an average factor of 2.5).Cebal Tubes Europe was
        also innovative in its marketing tools with the launch of an electronic
        catalog that allows clients to have permanent and current access to its
        tubes product offerings. Competition In plastic
          and aluminum tubes, Cebal Tubes Europes principal competitors
          tend to be local producers whose output is sold principally in
      
      a single region
          or country. In specialty laminated tubes, a key target of Cebal Tubes
          Europe, there is no real leading manufacturer.


51


»Information
  on the Company Cebal
    Tubes Americas Cebal Tubes
          Americas is one of the four divisions created by thereorganization
          of Cebal in June 2000. With Cebal Tubes Europe, it is, in the
      
      Groups
          opinion, the worldleader
          in the marketfor
          collapsible plastic,laminated
          and aluminum tubes. The following table
    sets forth selected Cebal Tubes Americas data. Selected
        Cebal Tubes Americas Data
      2002
      
      2001
      
      2000Net
        Sales (millions of euros)
      242
      
      251
      
      205Sales,
        gross, by market (% of Total Division Sales)(1)Beauty
      26
      
      22
      
      24Personal
        care - dental hygiene
      52
      
      53
      
      48Healthcare
      18
      
      20
      
      23Other
        (food, household and industrial)
      4
      
      5
      
      5Sales,
        gross, by geographic region
        (% of Total Division Sales)(1)North
        America (USA, Canada, Mexico)
      94
      
      92
      
      99South
        America (Brazil)
      6
      
      8
      
      1Sales,
        gross, by product (% of Total Division Sales)Plastic
        tubes
      36
      
      34
      
      33Laminated
        tubes
      64
      
      66
      
      65 (1)
      Including
        intragroup sales. Products Cebal Tubes
          Americas manufactures collapsible plastic and laminated tubes, as well
          as aluminum tubes in Brazil, for the cosmetics, personal care and healthcare
          markets. Its packaging products are some of the most commonly used by
          mass-market and selective distribution brands. Tubes are very popular
          in western countries, and the Group believes that they have significant
          growth potential, especially in Latin America.
        Recognized
          for the excellence of its laminated tubes which are widely used to pack
          toothpaste and also in the pharmaceutical market, the Cebal Tubes Americas
          division launched a program for the sophistication of plastic tubes
          and provided the North America market with high value added products
          (tubes with designed service caps, complex printing and finishing).
      
      Equipped
          with a new-generation rolling mill installed at its new plant in Brampton
          (near Toronto), Canada, the Cebal Tubes Americas division focuses its
          laminated tubes activities on products with higher added value, for
          example, for the personal care and pharmaceuticals markets.
        The division
          is committed to enhancing customer service and improving its competitiveness
          in its different markets. It therefore works to make its facilities
          more specialized through implementation of the Pechiney Continuous Improvement
          System.


52


»Information
          on the Company
      Item
          4  Production
        FacilitiesThe following table sets forth Cebal Tubes Americas 7 production facilities.Cebal Tubes Americas
   Aluminum
   
   Plastic
   
   LaminatedUnited States
   
   
   4
   
   (1)3Canada
   
   
   
   
   1Mexico
   
   
   
   
   1Brazil(2)
      1
   
   
   
   1 (1)
      Combined
        plastic tube and laminated tube facility.(2)
      Combined
        aluminum tube and laminated tube facility.  The new Brampton
          facility, which started operations in November 2001, progressively increased
          the production capacity of its new extrusion-lamination machine in 2002
          to meet the need for the web to be used in the manufacture of the divisions
          laminated tubes. In Brazil, the division, which has efficient machinery
          for the manufacture of laminated tubes, pursued the reorganization of
          its aluminum tubes business and launched the
      
      production
          of plastic tubes to respond to strong growth in the cosmetics market.
        In 2002,
          the divisions investment strategy focused on improving capacities
          and processes, particularly in plastic tubes activities. Markets
    and Distribution In North America,
          sales of plastic tubes increased compared with 2001. In order to broaden
          the product mix, the divisions marketing and sales strategy focused
          on more sophisticated, high value added tubes for which Cebals
          know-how and synergies between American and European activities provide
          a significant advantage.
      
      In the laminated
          tubes segment, in both the United States and Canada, sales rose slightly
          in comparison with the previous year. However, certain significant laminated
          tubes sales contracts will come to an end in the first quarter of 2003,
          which will impact turnover negatively in 2003. Competition In plastic
          and aluminum tubes, Cebals principal competitors tend to be local
          producers whose output is sold principally in a single region or
      
      country. In
          laminated tubes, the two most important competitors are Essel-Propack
          and Betts.


53


»Information
  on the Company Cebal
    Aerosols The Group
          believes Cebal Aerosols is the world leader in the market foraluminum
          bottles and seamless aluminum aerosol cans (on the basis of
      
      2002 Worldwide
          production)and
          the secondlargest manufacturer inEurope
          after Boxal (Alcan Group). The following table
    sets forth selected Cebal Aerosols data. Selected
        Cebal Aerosols Data
      2002
      
      2001
      
      2000Net
        Sales (millions of euros)
      89
      
      108
      
      93Sales,
        gross, by market (% of Total Division Sales)(1)Personal
        care
      69
      
      76
      
      -Pharmaceuticals
      11
      
      9
      
      -Other
        (perfume, hygiene, beverages, etc.)
      20
      
      15
      
      -Sales,
        gross, by geographic region (% of Total Division Sales)(1)France
      19
      
      23
      
      25Germany
      15
      
      16
      
      9United
        Kingdom
      24
      
      21
      
      12Italy
      8
      
      6
      
      11Spain
      5
      
      5
      
      14Eastern
        Europe
      7
      
      6
      
      -North
        America
      10
      
      9
      
      -Other
      12
      
      10
      
      29 (1)
      Including
        intragroup sales. Products Seamless aluminum
          aerosol cans and bottles meet the needs of various markets. The principal
          market is personal care (deodorant, hair care and hygiene), which is
          complemented by a wide range of specialty niches, such as perfume, pharmaceuticals,
          decoration products and promotional samples).
        Despite generally
          weaker demand in 2002, aluminum aerosol cans are appreciated for their
          technical and aesthetic qualities and are often used in product launches.
          The division created a technically complex aerosol with grips for the
          brand Axe / Lynx (Lever-Fabergé). This product was given an
      
      award by Aerobal
          (Association Européenne de Fabricants dAérosols
          en Aluminium - European Association of Aluminum Aerosol Manufacturers).
          The divisions creativity and the quality of its innovations were
          also demonstrated in the market for specialty products. Its aluminum
          bottles have had a particular impact, and the division shared a Packaging
          Oscar with Heineken for a very innovative beer bottle.
        The year
          was also marked by the startup of a new facility in Velim, Czech Republic,
          with a very favorable cost base to serve markets in Northern Europe,
          Germany and Eastern Europe.


54


»Information
          on the Company
      Item
          4 Production
    Facilities The following table sets forth Cebal Aerosols five production facilities in Europe (plus a unit operated by a subcontractor in Finland). The facility in Velim, Czech Republic, is a "green field" which started operations in April 2002. Aerosols
        EuropeFrance(1)
      1Spain
      1Finland
        (unit operated by a subcontractor)
      unitItaly
      1United
        Kingdom
      1Czech
        Republic
      1 1) Aerosols
  Europe also owns the company Copal (aluminum slugs).   The division
          has made a major effort to rationalize and modernize its production
          facilities since 2000. Highlights include:
        the closing
            of the Nürnberg aerosol unit at the end of 2000;
          the sale,
            through an MBO at the end of February 2002, of the majority of the
            equipment of the Hanko plant in Finland;
          the construction
            at the end of 2001 of the Velim plant in the Czech Republic, which
            started operations in April 2002;
          the introduction
            of cost and capacity adjustment measures at the facilities in Cividate,
            Italy, and Badalona, Spain.Specialization
          was reinforced at the divisions facilities to satisfy very different
          needs, including, on the one hand, specialty products for high
      
      value added
          niches (perfume, pharmaceuticals, decoration, etc.) and, on the other,
          personal care and hygiene products (deodorants, hair care, etc.), which
          reflect mass-market trends.
        The satisfactory
          startup of production at the Velim plant was one of the years
          major highlights. The facility is expected to have a workforce of 150
          and in three years to operate six production lines with a capacity of
          180 million aerosol cans per year. The plant was designed to integrate
          international standards in terms of safety, environmental protection
          and quality. It already participates in the Pechiney Continuous Improvement
          System. It was awarded ISO 9001 and ISO 14000 certification in December
          2002. Markets
    and Distribution After a good
          year in 2001, western European manufacturers experienced a significant
          contraction in shipments in Western Europe. This unfavorable trend reflected
          customers inventory depletion, especially in Germany, as well
          as transfers of procurement and restocking volume to Eastern Europe.
        While reorganizing
          its manufacturing base, the division adopted a marketing organization
          to serve customers efficiently and to introduce innovations which could
          be industrialized rapidly. It optimized its customer/
      
      product portfolio
          on a European basis, adjusted prices to reflect the services offered,
          signed multi-year contracts, invested in the development of specialty
          products and bolstered research and development.
        In the last
          two years, the division has striven to increase its penetration of large
          multinational accounts. It supplies most of the market leaders and works
          with both the restocking branches of large groups and smaller inventory
          specialists. Competition Cebal Aerosols
          competes with major groups such as US Can, Crown Cork, Impress and Alcan
          in the market for aluminum and steel aerosol cans. In
      
      aluminum,
          it is also in competition with small and medium-sized companies in western
          and Eastern Europe.


55


» Information
  on the Company Techpack
    International The Techpack
          International group (Techpack) is one of the worlds leadingproducers of high value added plastic packaging for perfume and
      
      cosmetics.
          Techpackalso has an internationalnetwork of sales andmarketing companies. The following table
    sets forth selected Techpack data. Selected
        Techpack Data
      2002
      
      2001
      
      2000Net
        Sales (millions of euros)
      388
      
      460
      
      405Sales
        by product line (% of Total Division Sales)Cosmetics
      55
      
      54
      
      50Perfumes
      21
      
      20
      
      23Skin
        care
      18
      
      18
      
      17Hair
        care, personal care and other
      6
      
      8
      
      10Sales
        by geographic area (% of Total Division Sales)France
      36
      
      36
      
      42Rest
        of Europe
      23
      
      19
      
      22United
        States
      38
      
      40
      
      33Rest
        of the world
      3
      
      5
      
      3 Products Techpacks
          product development strategy targets high value added markets - makeup,
          perfume, personal care and hair care. It offers customers a wide range
          of packaging products, including lipstick tubes, mascara cases, boxes,
          caps, bottles, promotional items, jars and dispensers, etc.
        In order
          to support its active focus on innovation, the division launched an
          Innovation Center in Paris in 2002. The center has state-of-the-art
          equipment that will enable Techpack to broaden its line of stock products
          that can be personalized and to form active strategic partnerships with
          its major customers and suppliers.
      
      In 2002, Techpack
          again demonstrated its creativeness and technological expertise and
          participated in the launch of many major products, including:
        in perfume,
            Guccis "Solo", LVMHs "Dior Addict";
          in personal
            care, the "Montblanc" bath line for women, Issey Miyakes body
            lotion;
          in makeup,
            Guerlains "Terracotta" line, two mascaras: Lancômes
            "Flextencils" and Diors "Maximeyes", and Clarins "Rouge" line;
          in blow-molding,
            Yves Saint Laurents "Nu" bath line, Victorias Secret "Pink"
            line;
          in mass-market
            promotional samples, Azzaros toilet kit, Yves Rochers
            makeup palette and Estée Lauders "blockbuster".


56


»Information
          on the Company
      Item
          4 Production
    and Sales Facilities In order to
          respond to the increasing internationalization of its customersand be present in emerging markets, Techpack has set up a worldwide
      
      industrial
          and commercial network made up of 22 industrial facilities and 12marketing units.  Industrial
        facilities(1)
      Perfume
      Makeup
      Blow-molding
      Number
          of facilitiesEuropeFrance
      X
      X
      X
      9Italy
      
      X
      
      4Spain
      
      X
      
      1AmericasNorth
        America
      X
      X
      
      5Latin
        America
      X
      X
      X
      2Asia/Pacific
      X
      X
      
      1Total
      
      
      
      22 (1) Certain
  production facilities are joint ventures with other manufacturers.  In the framework
          of Pechineys general strategy to develop business in markets with
          strong growth potential and to complete its geographic coverage, Techpack
          International chose to install an industrial base in Asia by acquiring
          the cosmetics business of the Indonesian group Tiger. Located in a region
          with favorable labor costs, this acquisition will allow the division
          to accompany its major customers in their effort to develop in Asia.
        In North
          America, two facilities were closed (Watertown and Yaphank) and production
          of mascara cases and compacts for the selective makeup market was regrouped
          at the Melville plant. Mass-market mascara and perfume packaging were
          concentrated at the Mexican units of Matamoros (TACP) and TPI Mexicana
          to benefit from a more advantageous cost base, confirming the
      
      successful
          integration of Anchor Cosmetics (now Techpack America Cosmetic Packaging
          - TACP), just one example over the last two years. In Europe, Käsmacher,
          the German subcontractor subsidiary, was sold.
        The deployment
          of the Pechiney Continuous Improvement System continued at a steady
          pace. Implementation was facilitated by a new comprehensive training
          program for supervisors, named Pechineys "best HR initiative"
          in 2002. Significant savings were obtained in terms of procurement and
          production. In safety, Techpack International made remarkable progress
          - the Lost Time Rate per million hours worked was down almost two-thirds
          in 2002 (6.2 versus 17 in 2001) (based on the French reporting system). Markets Techpack International
          works in partnership with the main French groups (LOréal,
          LVMH, Sanofi, Clarins, Chanel, etc.) and international groups (Estée
          Lauder, Unilever, Procter & Gamble, Revlon, Shisheido, etc.). Techpacks
          ten largest customers in 2002 represented 60% of its sales.
      
      The crisis
          which followed the events of September 11, 2001 weighed on the selective
          makeup and perfume market, particularly in the United States and in
          duty-free shops. For the Groups customers, the decrease in sales
          volume was offset by an increase in value. The market contraction linked
          to significant destocking affected Techpack sales volume. Competition Techpack International
          is a world leader in the deluxe plastic packaging industry, together
          with Rexam, Qualipac and Crown Cork and Seal. In the
      
      last few years,
          competition has grown from Asian companies such as Hsing Chun Plastics.


57


»Information
  on the Company Caps
    and Overcaps Activities
          are focused on the manufacture of caps and overcaps for the global wine,
          alcohol and spirits market. There are three production facilities
      
      in France,
          a unit in the United States (Pechiney Cork & Seal of California)
          (*) and since November 2000, a unit in Canada (Pechiney Capalux).  Selected Data
   2002
   
   2001
   
   2000Net Sales (millions of euros)(1)
   92
   
   91
   
   79 1) Excluding
  division activities which are not consolidated.   In 2002, the
          division reported growth in sales of caps, particularly as a result
          of the development of its subsidiary Pechiney Capalux. In overcapping,
          there were contrasting trends: sales of champagne caps and caps in complex
          increased, while sales of stamped caps, particularly those made of tin,
          declined, owing to a contraction in the American market, in addition
          to the replacement of these top-of-the-line caps by middle-range caps.
        The year
          2002 was marked by the ongoing consolidation of the Canadian
      
      subsidiary
          Pechiney Capalux, which has developed as planned to attain a good level
          of profitability. The development of capping activities at this facility
          will be boosted by additional investment to bolster the plants
          already considerable industrial efficiency.
        The division
          undertook a review of the organization of its facilities based on the
          Pechiney Continuous Improvement System, and created a customer service
          unit to reinforce its ties with its clients.


(*)
    Since January 1, 1998, Cork & Seal of California has not been consolided
    by the Group, since it does not meet consolidated criteria. 58


»Information
          on the Company
      Item
          4 Ferroalloys
    and Other Activities The Ferroalloys and Other Activities sector regroups the activities of the Ferroalloys division and of the Voreppe Research Center. Selected
        Ferroalloys and Other Activities Data
      2002
      
      2001
      
      2000Net
        Sales (millions of euros)
      308
      
      358
      
      377Earnings
        from Operations (millions of euros)
      3
      
      0
      
      0Assets
        Excluding Cash and Cash Equivalents (millions of euros)(*)
      380
      
      388
      
      345Number
        of Employees (as of December 31)
      2,153
      
      2,427
      
      2,433(*)
        The definition of Assets is not equal to the item "Capital Employed" used
        by Pechiney in calculating Return on Capital Employed.FerroalloysThe following
        table sets forth selected Ferroalloys data.Selected
        Ferroalloys Data
      2002
      
      2001
      
      2000Net
        Sales (millions of euros)
      308
      
      358
      
      377Sales by market(1)Steel
      17
      
      23
      
      22Foundry
      14
      
      12
      
      11Chemicals
      26
      
      26
      
      25Light alloys
      27
      
      25
      
      29Abrasives and
        refractories
      16
      
      14
      
      13(1)
        Including intragroup sales


59


»Information
  on the Company Products Specialized
          in electric kiln reduction and high-temperature fusion techniques, Pechiney
          Electrométallurgie manufactures silicon, ferroalloys, specialty
          metals and electrofused products specially designed to upgrade
        Its principal
          products and markets are the following.
      
      the performance
          of steel and cast iron, light alloys, silicones, abrasives and refractories.  Products
      MarketsFerroalloys
          (FeSi,
          CaSi, CaC2)
      Steel
          (automotive,
          aerospace, electric, packaging and construction)(inoculants,
          nodularizers)
      Foundry
        (automotive, water conveyance)Silicon
        and metals 
        (Mg, Sr, Ca)
      Chemicals
        (silicone, electronics) Light alloys (automotive, aerospace and packaging) 
        SteelSilica
        fumes
      Construction
        and public worksFused
        alumina (white and brown)
      Abrasives
        (grinding wheels, cloths and papers, surface treatment) 
        Refractories  In 2002, Ferroalloys
          pursued its strategic focus on high value added products by consolidating
          its long-term relationships with customers, including manufacturers
          of grain-oriented sheets, stainless steel, cast iron pipes, cast automotive
          parts, silicone and abrasives.
        In the framework
          of its innovation policy in the profitable market for inoculants used
          in the cast foundry industry, Pechiney Electrométallurgie formed
          new technical development partnerships with major customer
      
      foundries.
          These special ties led to the development of innovative solutions to
          ensure production quality for sensitive parts and reduce manufacturing
          scrap significantly.
        With the
          support of the Chedde Research Center, Invensil developed very high
          purity metallurgical silicon qualities for use in new markets such as
          the photovoltaic silicon segment. Production
    Facilities In each of
          its three principal businesses, Ferroalloys uses production processes
          that have high electricity requirements. The price of hydroelectric
          energy, pursuant to Article 8 of the Nationalization Law of 1946 from
          which Pechiney Electrométallurgie benefits, is a key element
          in maintaining a competitive position in all of the divisions
          markets (see "Dependence on the Economic Environment - Raw Materials
          and Energy").
        In 2002,
          Ferroalloys refocused on its strategic activities (silicon and alloys
          for cast foundry), in which it benefits from competitive advantages,
          and discontinued the production of magnesium, calcium and calcium carbide.
        In magnesium,
          Pechiney Electrométallurgie began talks with labor representatives
          in 2001 about the future of the business at the Marignac, France, facility,
          and in the absence of any economically viable solution, it
      
      decided to
          close the plant. An activity to recycle magnesium alloy waste and product
          production scrap was started at Marignac in cooperation with an external
          partner.
        In the steel
          industry, efforts to create alliances met with success in January 2002
          when Pechiney Electrométallurgie (PEM) and SKW Metallurgie combined
          their calcium carbide, calcium and calcium alloys activities, as well
          as their equity interests in Affival, the world leader in covered wire
          for the steel industry, in a joint subsidiary called SKW Stahl Holding
          (SSH). PEM has a 25% interest and SKW Metallurgie a 75% stake in the
          company.
        In 2002,
          plant performance significantly improved and the bases of the Pechiney
          Continuous Improvement System have been laid. Continuous Improvement
          initiatives focused on increasing productivity and


60


»Information
          on the Company
      Item
          4  implementing
          the new standard in process management. A special effort was also made
          to reduce quality defaults. A site piloting system using key performance
          indicators was also introduced.
        Considering
          that listening to customers and meeting their needs are key priorities,
          PEM and Invensil upgraded their quality programs at the end of
      
      2001, and
          were awarded in 2002 ISO 9001v2000 quality certification for their silicon,
          steel and foundry activities. The new version implies a regrouping under
          the same certification of most customer-related services in order to
          improve efficiency and reduce costs. In 2000, activities linked to the
          automotive sector had already been awarded the ISO/TS 16949 certification
          requested by manufacturers. Markets
    and Distribution Pechiney Electrométallurgie
          sells most of its products in the European market. Since Pechiney Electrométallurgie
          is a supplier to large heavy industries, its activity levels reflect
          trends in its markets.
        The year
          2002 was marked by a sharp downturn in the world economy, which particularly
          affected the divisions silicon and abrasives-refractories activities.
          The decline in the demand for silicon in the chemicals market and in
          the American metallurgical market resulted in a significant drop in
          Invensils sales volume. The results of the South African silicon
          plant at
      
      Polokwane
          increased significantly, bolstered by the very favorable trend in the
          parity of the U.S. dollar and the rand, but did not manage to offset
          the decline in profitability in France. The abrasives-refractories business
          also reported a significant decrease in orders of white fused alumina,
          offset by a notable rise in the sale of refractories. In such an environment,
          only foundry activities reported satisfactory results. Inoculants consolidated
          their position with increased orders from French automobile manufacturers. Competition The principal
          competitors of Pechiney Electrométallurgie in the ferroalloy
          and silicon markets are Elkem and Fesil in Norway and Globe in the United
          States. Norsk Hydro (Norway and Canada) remains the major manufacturer
          of magnesium since Dow Chemical (United States) decided to stop
      
      production.
          Treibacher (Austria), which was acquired by the Imerys Group in 2000,
          is the principal European manufacturer of fused alumina.
        In several
          markets, the division also has to face competition from a certain number
          of producers, especially in Russia and China.


61


»Information
  on the Company International
    Trade International
          Trade consists of three principal businesses: a global sales agency
          network through which the Groups products and certain complementary
          products are sold, trading activities and since 1999, the
      
      distribution
          of semi-finished aluminum (and some stainless steel) products in France,
          Germany, Switzerland, Austria and Belgium.  Selected International
        Trade Data
      2002
      
      2001
      
      2000(Restated)(3)
      
      (Restated)(3))Net Sales (millions
        of euros)
      5,036
      
      4,209
      
      3,773Earnings from
        operations (millions of euros)
      73
      
      58
      
      65Assets Excluding
        Cash and Cash Equivalents (millions of euros)(1)
      665
      
      829
      
      723Number of employees
        (as of December 31)
      770
      
      808
      
      848Agency sales by
        geographic region (% of Total Division Sales)(2)Europe
      58
      
      55
      
      55Asia
      26
      
      32
      
      29North America
      8
      
      7
      
      8Latin America
      2
      
      4
      
      5Rest of World
      6
      
      2
      
      3(1)
          The definition of Assets is not equal to the item "Capital Employed"
          used by Pechiney in calculating Return on Capital Employed
          .
          (2) Including intragroup sales.(3)For
          additional information, see notes 1 and 25 to our Consolidated Financial
          Statements.  Shipments by
        product sourceGroup products
      55
      
      68
      
      77Non-Group products
      45
      
      32
      
      23 Sales
    Agency Network International
          Trades sales agency network maintains an extensive international
          presence through its 40 agencies operating in more than 60 countries
          around the world. The sales agency network offers its principals a wide
          range of services, and is structured to keep pace with the evolution
          of their manufacturing strategies. Through this network, International
          Trade distributes a variety of industrial products for the Groups
          other activities and also for third parties.
      
      After the
          events of September 11, 2001, the sluggishness of the American economy
          affected the world economy. Throughout 2002, this unfavorable situation
          weighed on the activities of the sales network, which nevertheless remained
          generally satisfactory. In fact, the diversity of the services the network
          provides and the good resistance demonstrated in southern Europe made
          it possible to minimize the lesser performances of certain agencies
          (Japan, Germany).


62


»Information
          on the Company
      Item
          4 Trading International
          Trades trading activities are carried out through five companies:
          Pechiney World Trade USA in the United States; in Europe, Pechiney Trading
          Company (Switzerland), Pechiney Trading France (France) and Pechiney
          Trading Ltd. (London, formerly Brandeis Ltd.); and in Asia, Pechiney
          Far East Limited (Hong Kong).
        International
          Trade specializes in the trading of bauxite, primary aluminum and metallurgical
          grade alumina. It maintains a global presence and is active both in
          intermediary markets and end-user markets. The Group believes that International
          Trade ranks as one of the largest traders worldwide, present at each
          stage of aluminum production, from bauxite mining to metal conversion.
        International
          Trade is also active in refined copper trading, a business which benefits
          from synergies among the sales network and trading
      
      activities.
          Finally, operating from the United States, the ores and concentrates
          activity remains one of the worlds major participants for copper,
          zinc and lead concentrates.
        In 2002,
          the acquisition of Euromins trading activities strengthened International
          Trades presence in the former Commonwealth of Independent States
          (particularly Russia, Ouzbekistan and Kazakhstan). This acquisition
          also boosted the zinc metal business with trading volume of almost 200,000
          metric tons per year.
        Results in
          2002 were up significantly from 2001 and were not affected by the generally
          depressed environment in the market for raw materials. Trading of aluminum,
          copper and concentrates made substantial contributions to the traditional
          good performance of alumina trading. Distribution The Almet
          distribution network operates in Austria, Belgium, France, Germany and
          Switzerland.
        Specialized
          in semi-finished aluminum products, the network also distributes stainless
          steel items, primarily in France, to round off its product line. Together
          with the Aerospace, Transport, Industry division, Almet is particularly
          active in the aerospace, mechanical engineering and transport markets,
          as well as in boilermaking and construction. Operations are conducted
          through a network of sales outlets, which is being reorganized and modernized,
          and five service centers that ensure finishing (splitting, cutting and
          machining). Almet companies supply requirements are purchased
          from the Pechiney Group at prevailing market prices and on standard
          market terms.
      
      Business in
          2002 followed the trend observed at the end of 2001. The economic environment,
          characterized by a sharp decline in demand, led to a significant decrease
          in sales volume, selling prices and margins. This was true in all markets
          throughout the distribution network, and was particularly felt in the
          aerospace sector.
        The restructuring
          and cost reduction program implemented in France at the end of 2001
          made it possible to limit the impact. In light of the economic situation,
          these measures will be intensified. Trading
    Risks Assumed by the Group Trading activities
          conducted by International Trade involve managing a certain number of
          risks inherent in this type of operation. In connection with these activities,
          International Trade purchases and sells forwards and futures, as well
          as options (physical and paper) both on (LME) and off exchanges.
        Price risks
          (price fluctuations) are systematically hedged, to stay within exposure
          limits authorized by the Group. Structure
          risks (gap between the spot price and the forward price) and premium
          risks (fluctuations in geographic premiums) are also subject to strict
          limits set by the Groups executive management.
      
      These limits
          are set by product and type of exposure. Daily monitoring of these limits
          involves immediate notification of the divisions management in
          the event of non-compliance.
        Counterparty
          credit risks (default of counterparties or suppliers) are limited to
          lines of credit granted on a case by case basis, with credit insurance
          policies subscribed in certain countries. These lines are reviewed periodically.
        There is
          no material seasonal variation in aluminum production and sales.


63


»Information
  on the Company Dependence
    on the Economic Environment Supply
    of Raw Materials Bauxite In 2002, the
          Group consumed approximately 4.6 million metric tons of bauxite, the
          basic raw material for the production of alumina and, in turn, aluminum.
          Depending on the quality of the bauxite ore (i.e. the level of alumina
          oxide content), the amount of bauxite required to produce one metric
          ton of alumina varies from two to four metric tons. All raw materials
          are purchased at prevailing market prices and on standard market terms.
      
      In 2002, approximately
          53% of the Groups bauxite requirements were extracted from mines
          in which the Group has an interest, with the balance supplied pursuant
          to long-term contracts (see "- Business of the Pechiney Group - Aluminum
          Sector - Primary Aluminum - Production Facilities -Bauxite Production"). Alumina The Groups
          share of alumina capacity from alumina refineries it owns or in which
          it has an interest amounts to approximately 2.2 million metric tons
          per year (see "- Business of the Pechiney Group - Aluminum Sector -Primary
          Aluminum - Production Facilities - Alumina Production"). A part of this
      
      share of alumina
          is sold to third parties as non-metallurgical alumina, creating a need
          for external purchases in order to meet the Groups alumina requirements.
          These external purchases generally amount to approximately 20% of the
          Groups internal consumption. Aluminum The aluminum
          tonnage used by the Groups European aluminum conversion activities
          increased compared with 2001 to approximately 620,000 metric tons of
          aluminum (excluding scrap metal). The rise was mainly linked to the
          2001 acquisition of Eurofoils two facilities in Belgium
      
      and Luxembourg.
          Most of this aluminum was procured directly from Aluminum Metal, pursuant
          to long-term supply contracts entered into at prevailing market prices
          and on standard market terms. Plastics Plastic packaging
          activities in the United States and Europe consumed approximately 295,000
          metric tons of films and resins in 2002, as compared
      
      with 305,000
          metric tons in 2001. These films and resins are purchased from major
          European and American producers.


64


»Information
          on the Company
      Item
          4 Energy The Groups
          aluminum electrolysis and ferroalloys activities consume large quantities
          of electrical energy. The cost of energy is one of the most significant
          components in the overall production cost of primary aluminum and thus
          proves to be a determining factor in deciding the location of new smelters.
        The ferroalloys
          and aluminum electrolysis plants located in France are supplied with
          electrical energy by Electricité de France (EDF). Approximately
          25% of the Groups electricity requirements in France, and essentially
          relating to the needs of Ferroalloys (see "- Business of the Pechiney
          Group - Ferroalloys and Other Activities - Ferroalloys"), are supplied
          under Article 8 of the French Nationalization Law of 1946, under which
          the Group has been given the right to obtain electricity from EDF at
          prices and quantities equivalent to those which it would have obtained
          from such hydroelectric facilities prior to their nationalization. The
          agreements implementing Article 8 expired at the end of 1996 and were
          renewed on similar terms effective as of January 1, 1997.
        EDF supplies
          Aluminium Dunkerques energy requirements pursuant to a 25-year
          contract. In addition, EDF contributes to the financing of the
      
      working capital
          requirements of Aluminium Dunkerque and is entitled to a share of Aluminium
          Dunkerques results. The balance of the electricity consumed by
          the facilities located in France in which the Group has an interest
          is supplied pursuant to separate contractual arrangements with EDF.
        Since the
          end of its contract on March 31, 2001, Pechiney Nederland NV has supplied
          its aluminum production facility in Vlissingen, Netherlands, with electricity
          bought on the open Dutch market. Pechiney Nederland NV is currently
          investigating various electricity supply alternatives, which may prove
          to be more competitive.
        Bécancour
          (Canada), Tomago (Australia), Aluminium de Grèce (Greece) and
          Alucam (Cameroon) obtain energy pursuant to long-term contracts, expiring
          between 2006 and 2017, with Hydro Québec, Macquarie Generation,
          DEH and AES-Sonel, respectively. The arbitration rendered in 2002 on
          Aluminium de Grèces energy contract (see "- Legal Proceedings")
          has made it possible to secure this contract until it expires, with
          the provision of certain additional payments. Each energy contract includes
          pricing formulas indexing electricity prices to LME aluminum quotations. Fluctuations
    in Prices of Raw Materials Primary
    Aluminum In addition
          to energy (see "- Energy"), the principal raw materials of this division
          are bauxite, alumina, coke and soda ash. A substantial portion of the
          divisions bauxite and alumina raw material requirements is supplied
          by
      
      the Group,
          with the balance of bauxite and alumina as well as the coke and soda
          ash being supplied pursuant to long-term supply contracts entered into
          with third parties. Aluminum
    Conversion The principal
          raw materials consumed are aluminum and, to a lesser extent, additive
          metals used in aluminum alloys.
      
      To protect
          against fluctuations in the price of aluminum, the policy of the Aluminum
          Conversion divisions is to hedge aluminum prices as orders for semi-finished
          products are recorded, as well as all of the firm commercial commitments
          taken by these divisions.


65


» Information
  on the Company Cebal The principal
          raw material consumed by Cebal in the production of aerosols and aluminum
          tubes is, by definition, aluminum.
        Cebal generally
          limits its exposure to fluctuations in the price of aluminum by matching,
          to the degree possible, its contracts to supply cans to its customers
          with forward purchase contracts for aluminum supply on the same terms.
      
      In 2002, almost
          all of Cebals aluminum requirements were supplied by Pechiney
          Trading France and Aluminium Pechiney. To the extent Cebal has not procured
          a sufficient supply of aluminum to meet its obligations under its sales
          contracts, it hedges its exposure to fluctuations in the price of aluminum
          by entering into a variety of hedging commodity contracts in the same
          manner as described above with respect to Aluminum Conversion. Plastic
    Packaging, Cebal and Techpack International With respect
          to the production of flexible packaging, plastic bottles, plastic tubes
          and deluxe plastic packaging, the primary raw materials consumed by
          these three activities are resins for plastics and, to a lesser extent,
          thin aluminum foil, plastic films and paper. These activities enter
          into purchase contracts for these raw materials on prevailing market
          terms.
        In some cases,
          these activities protect themselves from fluctuations in raw
      
      materials
          prices by including escalator clauses in their sales contracts. Such
          provisions allow them to pass on increases or decreases in resin prices
          to their customers, although there can be a time lag between a change
          in prices under their purchase contracts and the corresponding change
          under their sales contracts. During such lag, they bear the temporary
          additional cost or benefit resulting from the change in prices under
          their purchase contracts. Energy Aluminum
          smelters generally require an uninterrupted supply of intense electrical
          energy, and any interruption of more than four hours, whatever the cause,
          may have a major technical, commercial and financial impact on the activities
          of the facility concerned. Smelters that depend on hydroelectric power
          may also, in certain cases, be affected by a persistent decrease in
          the rain gage level when such an occurrence results in a drop in the
          electrical intensity supplied at certain periods of the year (this
      
      explains the
          seasonal nature of primary aluminum production capacity sometimes observed
          at certain facilities). Nevertheless, in light of the technical, commercial
          and financial implications an interrupted supply of intense electrical
          energy has for the Groups smelters, the contracts signed by the
          Group for these facilities generally contain provisions to ensure priority
          access to the electric power produced by the suppliers of electricity.


66


»Information
          on the Company
      Item
          4 Industrial
    and Environmental Risks Pechineys
          Environment and Industrial Risk Management Department is responsible
          for defining Group policy in these areas. The Groups industrial
          divisions are responsible for its implementation. Environmental
    Regulation and Policy The
          Group is subject to a broad range of environmental laws and regulations
          in each of the jurisdictions in which it operates. These laws and regulations
          impose increasingly stringent environmental protection standards on
          the Group regarding, among other things, air emissions, wastewater discharges,
          the use and handling of hazardous materials, waste disposal practices,
          and the remediation of environmental contamination.
        Each
          year, the Group commits significant capital resources and expenditures
          towards its environmental regulation compliance requirements. The Group
          believes its facilities and activities are generally in accordance with
          applicable environmental laws and regulations.
        Pechiney
          applies the international standard ISO 14001 as the benchmark for its
          environmental protection management. This system, which is based on
          the standards of prevention, compliance with regulations and the Pechiney
          Continuous Improvement System, is complemented by a comprehensive training
          program. The objective is to certify the Groups main facilities
          by 2004. In 2002, the plants at Saint-Jean-de-Maurienne (smelting),
          Sogerem
      
      (fluorspar
          mines), Compiègne (aluminum recycling), Dudelange (Eurofoil),
          Arenzano, Badalona and Velim (packaging) were certified, bringing to
          25 the number of ISO 14001 facilities. Several other units have undertaken
          similar initiatives. In addition, the Groups American facilities
          comply with the MACT standard (Maximum Achievable Control Technology).
        In
          2002, the major improvements concerned the reduction of atmospheric
          emissions of fluorine (smelters), COV (aluminum conversion and packaging
          plants) and dioxides (Affimet), as well as recycling programs for bauxite
          scrap (Gardanne and ADG) and carbonaceous electrolysis cell linings.
        For
          its customers, the Group develops solutions that contribute to sustainable
          development. AP18 and AP30 electrolysis cells are the most economical
          in the world in terms of the consumption of electrical energy, and emissions
          of greenhouse gases are two times lower than the world smelting average.
          The new generation of AP50 cells will make it possible to reduce PFC
          emissions even further.  (millions of euros)
   2002
   
   2001
   
   2000Environmental provisions
      77.0
   
   76.0
   
   85.8 The
          aggregate amount of provisions made to ensure environmental compliance
          as well as the risk of environmentally related legal proceedings totaled
          approximately € 77 million as of December 31, 2002.
        Environmental
          protection obligations included in the provisions are those which the
          Group may be obliged to meet with respect to certain current and past
          activities as well as for disposal sites it owns or that belong to third
          parties, notably when it agreed to continue to bear all or part of the
          environmental responsibility involved upon the sale of these activities
          or disposal sites. In the United States, the Groups activities
          are subject to both federal and state laws. Certain laws allow for the
          financial liability of certain categories of specifically named individuals
          for the remediation of polluted sites with no obligation to prove that
          they may have committed any particular offense or failed to comply with
          environmental standards
      
      applicable
          to the activity alleged to have caused the pollution. It is the Groups
          policy to identify and, to the extent possible, quantitatively budget
          for the costs associated with the potential remediation of sites where
          the Group could incur liability. The Group makes provisions no later
          than when the occurrence of an event makes costs probable and reasonably
          estimable, such as the issuance by competent authorities of an order
          to perform remedial work. In keeping with this policy, the Group believes
          it has covered all the expenses relating to environmental remediation
          activities that it has determined were probable and reasonably estimable
          as of December 31, 2002.
        There
          can be no assurance that the amounts the Group has budgeted and provisioned
          will enable it to satisfy its environmental obligations, especially
          in light of the following factors:
        The
          rapid development of increasingly stringent environmental laws and


67


»Information
  on the Company regulations
            and of their interpretation by the courts, especially if minority
            shareholders of companies being liquidated were to be made liable;
          Governmental
            orders to carry out additional compliance on certain sites not initially
            included in remediation in progress; and potential liability of the
            Group to remediate sites for which provisions have not been established;
          In addition,
            future developments, such as changes in law or new information regarding
            environmental conditions, could result in increased environmental
            costs and liabilities that could have a material adverse effect on
            the Groups future financial condition and results of operations
            or its consolidated financial position.
        Between 1990
          and 2000, Pechiney reduced emissions of greenhouse gases at its aluminum
          facilities in France by 41% in line with its commitment, while increasing
          production by 30%.
      
      In 2000, the
          Group broadened this voluntary commitment to reduce greenhouse gas emissions
          in all its activities throughout the world. The objective is a 15% reduction
          (direct emissions only) by 2012 compared with the 1990 level with ambitious
          growth in business. The reduction achieved in 2001-2002 totaled approximately
          11% (subject to verification by an independent audit), with a mediocre
          year in 2002 owing to serious operating problems at three facilities.
          New initiatives will be taken to improve the situation, in particular
          in the framework of the agreement on voluntary reduction that Pechiney
          is going to propose to French authorities for the period 2003-2007 together
          with other committed companies in the AERES organization, which was
          created for this purpose. The
    impact of products on the environment Pechiney must
          meet the most stringent environmental protection standards. For this
          reason, the Group closely follows the introduction of environmental
          regulations in which it actively participates along with European manufacturers.
        Recycling
          products after use and reducing waste are priorities for the European
          Commission and the European Parliament.
        The Group
          expanded its recycling capacity. In line with its efforts to promote
          the recycling of its can customers aluminum scrap, the Neuf Brisach
          facility is now able to reuse a major portion of its automotive customers
          production scrap (PSA Citroën, Renault and Daimler Chrysler
      
      Mercedes).
          In aerospace, the Issoire plant introduced a system in 2002 that makes
          it possible to recast machining scrap from Airbus. Almost € 4 million
          were invested in this project to recycle 11,000 metric tons of aluminum
          alloy per year. Pechiney also develops solutions to limit raw materials
          consumption and facilitate the recycling of post-consumer packaging.
        The use of
          aluminum in automobiles makes a direct contribution to the attainment
          of this objective. Pechiney is closely associated with automobile manufacturers
          and involved in the recovery of cars that are no longer operable to
          find solutions that will optimize the recovery and recycling of their
          aluminum content. Industrial
    property risks Pechiney advocates
          an advanced policy for the prevention of industrial property risks.
        Insurance
          companies evaluate the quality of risk control at industrial facilities
          to determine appropriate insurance premiums and coverage.
        As of January
          1, 2003, 55% of physical assets in production units insured by the Group
          (assets plus annual gross margin) were designated Highly Protected Risks,
          compared with 68% as of January 1, 2002. Six major facilities lost their
          rating in 2002, subsequent to prevention audits by prevention engineers
          commissioned by the Groups insurance companies.
        In 2003,
          action plans will be implemented at these facilities to enable them
          to regain their HPR rating. In addition, different improvement points
          have
      
      been identified
          and, in particular fire protection upgrades, which should make it possible
          to have at least 70% of the Groups facilities designated Highly
          Protected Risks by the end of 2003. These efforts will reduce the probability
          and seriousness of financial loss in the event of an accident, as well
          as the cost of insurance.
        In this way,
          the Pechiney group demonstrates its capacity to meet or even exceed
          the prevention criteria established by the National Fire Protection
          Association in the United States, which maintains some of the strictest
          property protection standards in the world.
        After a methodological
          study of industrial hazards, the six Group facilities recently classified
          Seveso 2 met regulatory requirements which reinforce the industrial
          property risks prevention system.


68


»Information
          on the Company
      Item
          4 Safety A top priority
          for Pechiney, safety is one of the important criteria according to which
          the quality of management is measured at all levels of the Group. Pechiney
          implements a very active risk prevention policy at work that is based
          on a visible commitment of the management and committed employee mobilization
          to clear principles of organization.
        Annual and
          multi-annual action plans are designed, monitored and implemented by
          safety committees in each operational division and for each facility.
      
      Two mechanisms
          contribute decisively to the improvement of safety conditions:
        standards
            that determine the minimum requirements for a task or a specific risk;
          internal
            reviews that cover safety systems, standards and practices in the
            work environment.Groups
        of security coordinators assigned to the aluminum and packaging sectors
        assist the facilities in implementing these mechanisms and encouraging
        the exchange of information as to good practices and
      
      significant
        incidents. Positive results are incentivized through compensation.  Lost
          Time Rate per million hours worked - LTR2002
      
      2001
      
      2000
      
      1999
      
      19986.8
      
      9.7
      
      10.1
      
      11.0
      
      12.9Total
          Incidence Rate per million hours worked - TIR2002
      
      2001
      
      2000
      
      1999
      
      199818.1
      
      23.9
      
      24.6
      
      28.5
      
      31.8 Health An independent
          medical and toxicological council, chaired by Dr. Maurice Tubiana, advises
          executive management on work-related and public health issues related
          to the Groups manufacturing activities and products. In particular,
          it is monitoring studies on the possible toxicity of aluminum. The protocol
          agreement signed in 2001 with the French National Institute of Health
          and Medical Research (INSERM) took concrete form in 2002 through the
          organization of scientific monitoring of solvents such as glycol ethers.
          In addition, impact studies at the main risk category facilities in
          France made it possible to verify the absence of health risks in their
          environment
        To the best
          of their knowledge, neither Pechiney nor any of its subsidiaries has,
          in the past, extracted asbestos or utilized asbestos as a raw material
          in the manufacture of its products, or marketed products containing
          asbestos, with the one known exception of Cefilac Saint-Etienne (part
          of Carbone Lorraine), whose production included some joints made of
          asbestos.
      
      The only exposure
          of Pechiney employees to asbestos has been principally due to asbestos
          contained in consumer goods, such as gloves, joints, weaves and consumable
          asbestos slabs or resulting from maintenance work on asbestos-containing
          products contained in buildings or in the ovens (insulation).
        The number
          of employees exposed to asbestos is therefore very limited compared
          to that of manufacturers of asbestos-containing products.
        In July 2002,
          common asbestos standards were adopted by the sectors of the Group.
          They reiterate that the use of consumable asbestos has been forbidden
          in the Pechiney Group since 1993, and set up a strict management system
          to identify any residual asbestos materials, such as fibrocement, through
          permanent inventory, labeling, regular measurement of asbestos particles
          in the atmosphere and the adoption of remediation procedures.


69


» Information
  on the Company Insurance The Pechiney
          Groups companies are insured through centralized global packages.
          In 2003, the cost of these insurance policies totalled €36 million,
          excluding the costs of life and medical insurance for Group employees,
          since these types of insurance are purchased on a country-by-country
          basis in light of local practices.The coverage provided by these packages
          and the amounts of their guarantees are comparable to those of industrial
          groups of the same size and in the same sector throughout the world.
          These policies cover risks involving property and resulting operating
          losses, transport and liability related to operations or products. The
          risk of accidental pollution is also covered.
        Insurance
          for damage at the Group's industrial facilities and resulting economic
          losses is in the form of "all risks excluding" coverage. The coverage
          is subject to certain exclusions and standard limitations, in particular,
          damages resulting from natural hazards or terrorism. For general and
          products liability coverage (including aircraft products) the coverage
          limit is at least €200 million.
        The Group's
          insurance coverage is also subject to additional exclusions and sub-limitations,
          standard among comparable companies, such as damage due to gradual pollution
          or performance defects. These sub-limitations may vary according to
          geographic location.
      
      In order to
          preserve basic guarantees and adequate coverage, and at the same time
          to optimize the Groups premium budget in one of the least
          flexible insurance
          markets in decades, Pechiney opted for a higher deductible for property
          damage and business interruptions. This deductible has been raised to
          € 15 million per claim as of January 1, 2003.
        Moreover,
          the tightening of conditions in the insurance market has caused the
          Group to take certain restrictions on coverage as of 2003.
        In November
          2002, the bad weather that ravaged northern Europe caused major damage
          at the Groups Dutch plant. Deposits of sea salt seriously damaged
          the substations electrical installations, affecting the electrolysis
          cells. The damage caused will result in several months of operating
          losses estimated at more than € 25 million. Intellectual
    Property Intellectual
          property (patents, models, know-how, trademarks, etc.) constitutes an
          important asset for the Group.
        As of December
          31, 2002, the Group had a portfolio of 815 basic patents in several
          countries (a total of approximately 3,400 patents). The Group filed
          80 new patent applications in 2002.
        The patents
          granted to the Group in 2002 in Europe and the United States include
          the following noteworthy processes and products:
        several
            processes linked to the construction of new-generation smelters;
      
      a process
            to distribute alumina on electrolysis cells;
          polycrystalline
            fused alumina and realization process;
          an alloy
            for brazed heat exchangers;
          an alloy
            for aircraft fuselages;
          an aerosol
            with a threaded neck;
          several
            new processes for food and cosmetics packaging products.No Group
          activity is threatened by the expiration of a patent within the next
          few years. Legal
    Proceedings In 1990,
            the U.S. environmental protection authorities commenced proceedings
            against the Group regarding environmental liabilities relating to
            several mines and manufacturing facilities in the United States operated
            by a former Group subsidiary between 1940 and 1962. In connection
            with the sale of the mines in 1960, the Group agreed to indemnify
            the purchaser against certain environmental liabilities.
          In 1991,
            the Group commenced proceedings in the New Jersey state courts seeking
            to recover its costs and legal expenses from its insurers under former
            insurance policies.After accounting
        for remediation work already carried out, the Group believes that its
        provision amounting to U.S.$20.4 million as of December 31, 2002, is adequate.
        The Group cannot evaluate its risks more accurately until the extent of
        the necessary remediation work has been fully determined.
      
      In March
            1997, Howmet Turbine Corp., a former Group subsidiary sold in 1995,
            notified Pechiney of the existence of polychlorbiphenyls (PCBs) at
            its facility in Dover, New Jersey. In accordance with an agreement
            entered into in April 1997 with the New Jersey authorities, Howmet
            undertook investigations to determine an acceptable means of remediation.
            The solution has not yet been determined by the authorities.In June 1998,
          Howmet notified Pechiney that remediation work may also be necessary
          at its facility in Combe Fill South, New Jersey. Similar remediation
          work relating to operations prior to 1995 may also be necessary for
          other facilities.
        In connection
            with the sale of its Turbine Components in 1995, the Group agreed
            to indemnify the purchaser against certain environmental liabilities.
            The Group may be liable to bear a substantial portion of remediation
            expenses under this indemnity. This guarantee is effective, after
            allocation


70


»Information
          on the Company
      Item
          4  of insurance
          indemnities, from the first dollar exceeding the provision determined
          contractually with the buyer at the cumulated amount of U.S.$6 million.
          The December 31, 2002, estimate of the risks of loss or damage for all
          the facilities covered by this guarantee totals U.S.$11 million (including
          attorneys fees). In light of the deductible sum stipulated in
          the contract in the amount of U.S.$6 million which is the responsibility
          of the buyer, the provision made by the Group as of December 31, 2002,
          totaled U.S.$5 million. The Group believes this provision is sufficient
          and it is not possible to make an accurate assessment of the definitive
          risks related to these proceedings until the extent of the necessary
          remediation work at the two locations (Dover and Combe Fill South) has
          been fully determined.
        At the
            end of December 1999, DEH, which supplies electric power to Aluminium
            de Grèces Saint Nicolas aluminum production facility
            in Boetia, delivered to the Group a request for arbitration. The request
            for arbitration seeks approval of the following changes in its electricity
            supply contract:
            an increase in the thermal tranche price of electricity supplied
                as of January 1, 1999, and
              a
                re-examination of the contract to ensure compliance with Greek
                legislation transposing the European directive No. 96/92 relating
                to the deregulation of the electricity market in the European
                Union
      
      Since January
          1, 1999, the price of electricity for the thermal tranche continues
          to be billed temporarily by DEH on the basis of the formula in the initial
          contract, with the difference between this price and the price asked
          for in the arbitration procedure representing, for the years 1999 and
          2000, a total of approximately U.S.$12 million on the basis of actual
          consumption.
        The Group
          rejected these two requests, and was opposed to any increase in the
          various price components before the expiration of the contract which
          is scheduled for the end of 2006. The arbitration panel met at the end
          of June 2000. The arbitration rendered in June 2002 rejected DEHs
          second request, which was for a re-examination of the contract to ensure
          compliance with Greek legislation transposing the European directive
          relating to the deregulation of the electricity market. On the other
          hand, in their capacity as arbitrators, the members of the panel partially
          acquiesced to DEHs first request, for an increase in the thermal
          tranche price of electricity. The outcome of these proceedings represented
          an additional payment to DEH (capital plus interest) of € 12.8
          million, determined on the basis of the new price formula set by the
          arbitrators and covering the whole period in dispute.
        Other than
            the foregoing, the Group has no knowledge of any claims or legal proceedings
            which may, beyond existing provisions, substantially affect its consolidated
            results of operations, financial condition or liquidityRecent
        developmentsOn January
            17, 2003, Cebal Americas, a division of Pechineys Packaging
            sector, announced plans to build a plant in Mexico to manufacture
            plastic tubes for the cosmetics segment in North America. Construction
            of the new plant is expected to represent an investment of U.S.$10
            million.
          On March
            13, 2003, Corus Group plc announced that it was unable to proceed
            with the proposed sale of its aluminum conversion business to Pechiney.
          On March
            19, 2003, Pechiney announced that management of its Auzat aluminum
            plant in Ariège, France had decided for safety reasons to suspend
            operations at the plants smelting workshop. The Auzat plant
            was subsequently shut down permanently.
          On April
            9, 2003, Pechiney and SUAL announced that they had reached an agreement
            to enter into substantive negotiations for the joint development of
            a bauxite, alumina and aluminum complex in the Komi Republic, Russian
            Federation. It is contemplated that Pechiney will acquire an interest
            of up to 35-40% in the joint venture.
          In April
            2003, Pechiney announced the acquisition of the cosmetics packaging
            assets of the Tiger Group of Indonesia. The acquisition was made through
            Techpack Asia, a newly-created subsidiary held as to 95% by Pechineys
            subsidiary Techpack International. Pechiney announced that Techpack
            Asias business would also include CT-Pack, which was previously
            held jointly by Techpack International and the Tiger Group. Initially,
            Teckpack Asia's revenues are expected to amount to U.S. $ 20 million
            per year.
      
      On May
            27, 2003, a special meeting of the holders of Preferred Shares "B"
            of Pechiney approved the vote of the general shareholders meeting
            of April 3, 2003 to convert the Preferred Shares "B" into
            Common Shares "A". For further information, see "Item
            10. Additional Information  Description of Share Capital 
            Capital Structure of the Company."
          On June
            12, 2003, Pechiney announced the acquisition of Enocap, a Chilean
            capsule manufacturer, by Pechiney Capsules. Enocap achieves annual
            sales of almost U.S. $ 3 million.
          On July
            9, 2003, Pechiney announced that it had reached an agreement with
            its financial partners to purchase, as of December 30, 2003, the 65%
            equity interest in Aluminium Dunkerque not already held by Pechiney.
            This agreement is the result of negotiations undertaken during the
            first half of 2003 with the financial partners with a view to anticipating
            the exercise of put options that were granted to them in June 1990.
            In this transaction, all of the shares transferred to Pechiney, together
            with all subordinated debt (titres subordonnés participants), for
            consideration of approximately €250 million. The consolidation of
            Aluminium Dunkerque will also lead to Pechiney consolidating additional
            debt that is estimated to amount to approximately €135 million at
            year end 2003. For further information, see "Item 5. Operating
            and Financial Review and Prospects Liquidity and Capital Resources
             Contingencies  Option on an Affiliate."
          On August
            22, 2003, Pechiney Plastic Packaging Inc. acquired Novacel, a Mexican
            custom flexible packaging company, from Grupo Arteva, S. de R.L. de
            C.V. and Grupo Bimbo, S.A. de C.V. for U.S.$90 million. Novacel manufactures
            a variety of flexible packaging products, primarily for the food market.


71


» Information
  on the Company On August
            26, 2003, Pechiney announced that Baotou Aluminium Co. and Aluminium
            Pechiney had reached an agreement for the construction of a new production
            unit for high purity aluminum in Baotou, Inner Mongolia. Aluminium
            Pechiney and Baotou Aluminium Co. are expected to own 51% and 49%
            of the joint venture, respectively. Pechineys total investment
            in this project is estimated to amount to U.S.$13 million.
          On July
            7, 2003, Alcan announced an unsolicited bid for the Pechiney Securities.
            For further information, see "Item 4. Information on the Company
             Overview of the Pechiney Group." Following successive
            increases in the value of Alcans bid, Pechiney announced on
            October 9, 2003 that its board of directors had formally recommended
            to the holders of Pechiney Securities that they accept the revised
            bid. Pechiney has made a provision in its September 30, 2003 Financial
            Statements (which have not, as yet, been reviewed by Pechiney's auditors)
            in the amount of 33 million for the estimated fees to be paid
            to its financial and legal advisors in respect of their services relating
            to the Alcan tender offer.
          On October
            2, 2003 Pechiney announced that it had entered the FTSE4GOOD Europe
            and Global indices, which were created by the FTSE group in July 2001
            and specialize in sustainable development. The criteria for inclusion
            in these indices focus on working towards environmental sustainability,
            developing positive relations with stakeholders and upholding and
            supporting human rights.
          The Coega
            Aluminum Smelter project for the construction of an aluminum smelter
            in South Africa using AP50 Technology has made significant progress.
            For further information on this project, see "Item 4. Information
            on the Company-Business of the Pechiney Group-Primary Aluminum-Aluminum
            Metal". Based on the decisions in principle taken by several partners
            to make equity investments in the project, subject to certain conditions,
            in addition to the 49% which is to be held by Pechiney, these commitments
            currently cover more than 90% of the project's equity financing. Moreover,
            on September 30, 2003, Pechiney gave notice of its decision to continue
            with the project, which resulted in the electricity supply agreement
            with the Eskom group becoming effective. This agreement may be terminated
            during the next 12 months, subject to a break up fee of U.S. $5 million
            per month. In addition, this notification triggers an obligation for
            Pechiney to pay, in October 2003, an installment of ZAR 100 million
            (equal, for information purposes, to approximately €12.29 million
            on the basis of the exchange rate at September 30, 2003) in respect
            of connection fees, and a requirement that it confirms its undertaking
            to reimburse, if applicable, up to ZAR 133 million (equal, for information
            purposes, to approximately €16.34 million on the basis of the
            exchange rate at September 30, 2003) which is the maximum amount payable
            to Eskom as compensation for infrastructure costs not recoverable
            if the project is terminated. Pechiney has thus been actively continuing
            the preparation of the Coega Aluminum Smelter project. If a different
            approach were to be adopted in the future, any decision not to continue
            the project, made between the date hereof and September 30, 2004,
            would require that the following be charged to income: the costs capitalized
            on Pechiney's balance sheet (equal to €45 million at September
            30, 2003), as increased by additional assets and commitments to be
            incurred in the future (in particular the connection fee of up to
            ZAR 100 million, the break-up fee, the portion actually incurred of
            the compensation amount of up to ZAR 133 million discussed above,
            and the cost of winding down the project).
      
      On October
            22, 2003, the Queensland Government in Australia, without prior consultation,
            requested a Pechiney subsidiary in Australia to surrender mining rights,
            which site has not to date been exploited by Pechiney. The government
            has given Pechiney until October 24, 2003, to make such surrender.
            Pechiney is considering its position in respect of such request.
          The performance
            of a business contract by a Pechiney subsidiary in the Aluminum Lithium
            activity could require industrial investments that currently may generate
            a loss, the aggregate total of which is estimated to amount, in such
            a scenerio, to approximately U.S.$10 million.
          The non-renewal
            of a multi-year contract, in one of the units in the Packaging sector
            is expected to have a negative impact on 2004 revenues of approximately
            U.S.$30 million assuming that the loss of the contract, is not offset
            by new business. On the same assumption, it may also become necessary
            to carry out industrial restructuring measures.
          With respect
            to the valuation of Pechineys assets, tax loss carry-forwards
            and goodwill, Pechineys multi-year business plans which form
            the basis for the annual depreciation analysis, (unless any new developments
            come to light during the course of the year) will be presented and
            analyzed in the last two months of 2003. However, the deteriorating
            financial outlook in certain businesses will lead Pechiney to incur
            write-downs of tangible assets in its September 30, 2003 financial
            statements in the amount of 6 million in the Primary Aluminum
            sector, 8 million in the Aluminum Conversion sector and 22
            million in the Packaging sector. For the same reasons, an earlier
            than anticipated review of the outlook for certain of the activities
            of the Techpack business unit (Packaging sector) and Foil and Strip/Specialties
            business unit (Aluminum Conversion sector) is ongoing and might lead,
            if such deteriorating financial outlook was confirmed to exceptional
            write downs in the September 30, 2003 financial statements.
          In January
            2003, Pechiney began consultations with employee representatives regarding
            three new industrial restructuring plans, including the potential
            termination of approximately 600 employee positions at the following
            plants: the Aluminium Pechiney plants at Auzat and Sabart in Ariège,
            France; the Casting Alloys headquarters; the Pechiney Softal extrusions
            plant at Aubagne in Bouches-du-Rhône, France; and the Lir-France
            cosmetics packaging plants at Avallon in Yonne, France and at Provins
            in Seine-et-Marne, France. See "Item 5. Directors, Senior Management
            and Employees  Employees  Labor Policy." Following
            this consultation process, implementation of the restructuring plans
            has been underway from April through October 2003, and production
            has been terminated or transferred to other plants. The related employment
            terminations have been ongoing since April 2003 and are expected to
            be completed in early 2004, at the end of the relevant notice and
            outplacement periods. In addition, a further 70 employment terminations
            (expected to be carried out between July 2003 and June 2004) have
            been scheduled in the Pechiney Aviatube hard alloy extrusion plant
            in Carquefou, France, and approximately 50 proposed employment terminations
            in the Cebal aerosol can plant in Bellegarde, France have been submitted
            to employee representatives for consultation.


72


»Operating
          and Financial Review and Prospects
      Item
          5  The
          following discussion and analysis should be read in conjunction with
          the Groups Consolidated Financial Statements and the notes thereto
          included elsewhere in this Annual Report.
        The
          Company has changed its presentation of goodwill amortization in its
          Consolidated Financial Statements for the 2002 fiscal year with respect
          to previous years, impacting several line items on the Companys
          income statement. Income from operations published in the Groups
          2001 Annual
      
      Report
          on Form 20-F and in prior years reflected goodwill amortization. In
          2002, Income from Operations no longer includes goodwill amortization,
          which is now presented as the last item on the income statement before
          net income. Accordingly, income statements of previous years have been
          reclassified in this years Annual Report to conform to the new
          accounting treatment. This change in presentation was made to facilitate
          comparisons with U.S. companies that no longer amortize goodwill, in
          conformity with recent changes to U.S. GAAP rules. Results
    of Operations Year
    Ended December 31, 2002, Compared with Year Ended December 31, 2001 Net
    Sales(Restated) Contributions
          to the Groups Net Sales by segment after elimination of intragroup
          sales for the years ended December 31, 2002 and 2001, and the percentage
          change between the periods were as follows.  Year
        Ended December 31(millions
        of euros)
      2002
      
      2001
      
      Percentage
          
          ChangePrimary
        Aluminum
      1,605
      
      1,851
      
      -13.3%Aluminum
        Conversion
      2,618
      
      2,676
      
      -2.2%Packaging
      2,342
      
      2,418
      
      -3.1%Ferroalloys
        and other
      308
      
      358
      
      -14.0%Net
        Sales from Industrial Activities
      6,873
      
      7,303
      
      -5.9%International
        trade (Restated)
      5,036
      
      4,209
      
      19.6%Total
        Net sales(Restated)
      11,909
      
      11,512
      
      3.4%  The
          Groups consolidated Net Sales increased by 3.4% to € 11,909
          million in 2002, compared with € 11,512 million in 2001.


73


»Operating
  and Financial Review and Prospects  Aluminum Primary
    Aluminum In 2002, Primary
          Aluminum reported Net Sales of € 1,605 million, representing a
          decrease of 13.3% from 2001 (€ 1,851 million).
        This trend
          reflected two factors:
        a decrease
            in selling prices, which were negatively impacted by the combined
            decline in the price of aluminum on the LME and in geographic and
            form premiums, as well as by the significant depreciation of the U.S.
            dollar vis-à-vis the euro;
      
      a decrease
            in sales volume to third parties due, on the one hand, to production
            difficulties encountered at facilities belonging to Alucam (a hydroelectric
            energy supply problem resulting from the drought) and PNL (consequence
            of bad weather conditions in northern Europe in October) and, on the
            other hand to the greater percentage of internal sales to the aluminum
            conversion sector.These negative
        elements were only partially offset by a rise in the net sales of ECL,
        which benefited from the shipment of superstructures for the second potline
        at Mozal and the third potline at Hillside. Aluminum
    Conversion Net Sales
          from Aluminum Conversion activities totaled € 2,618 million in
          2002, compared with € 2,676 million in 2001, down 2.2%. In 2002,
          this figure included the contribution of the companies consolidated
          during 2001 Workington and Eurofoil. On a comparable basis, the decrease
          was 6%.
      
      The contributions
          of the different divisions to Net Sales from Aluminum Conversion activities
          for the years ended December 31, 2002 and 2001, and the percentage change
          between the periods were as follows.  Year
        Ended December 31(millions
        of euros)
      2002
      
      2001
      
      Percentage
          ChangeAerospace,
        Transport, Industry
      973
      
      1,013
      
      -3.9%Cans,
        Automotive, Standard Rolled products
      721
      
      734
      
      -1.8%Foil
        and Strip / Specialties
      415
      
      354
      
      17.2%Extrusions,
        Casting Alloys, Automotive
      509
      
      575
      
      -11.5%Transformation
      2,618
      
      2,676
      
      -2.2%  Net Sales
          of the Aerospace, Transport, Industry division decreased by 3.9% to
          € 973 million in 2002, compared with € 1,013 million
          in 2001.
        In Europe,
          the division was primarily affected by the crisis in the aerospace market,
          which resulted in a very significant drop in shipments of technical
          rolled products and hard alloy extrusions. In the divisions other
          markets, the environment remained sluggish, with a general decline in
          sales volume. Nevertheless, at the end of the year there was a slight
          recovery in shipments in aerospace markets, reflected by a marked increase
          in orders of technical rolled products in the fourth quarter of 2002.
        In the United
          States, a major rise in the production volume of standard rolled products,
          linked to an upswing in demand during the year and to more efficient
          use of equipment, offset the low aerospace volume caused by the crisis
          in this sector in the United States.
      
      Net Sales
          of the Cans, Automotive, Standard Rolled Products division decreased
          by 1.8% in 2002. This trend reflected a decline in selling prices as
          a result of the lower price of aluminum on the LME, which was offset
          to a large extent by increased sales volume in the automotive and heat
          exchanger markets.
        Net Sales
          of the Foil and Strip / Specialties division increased by 17.2%, due
          mainly to the full year contribution of Eurofoil, which was consolidated
          in 2001.
        Net Sales
          of the Extrusions, Casting Alloys, Automotive division totaled € 509 million
          in 2002, down € 66 million from 2001. The division was
          confronted by a significant drop in sales volume, in both extrusions
          and casting alloys, linked to a general decrease in demand in Germany
          and France. In addition, the division was affected by the erosion of
          its sales margins, due to increased pressure from competition.


74


»Operating
          and Financial Review and Prospects
      Item
          5  Packaging Net sales
          of Packaging totaled € 2,342 million in 2002, compared with
          € 2,418 million in 2001, representing a decrease of 3.1%.
          In 2002, Net Sales included the sales, on a full year basis, of Soplaril,
          acquired in 2001. On a comparable basis, the decrease was 9%.
      
      The respective
          contributions of activities for the years ended December 31, 2002 and
          2001, and the percentage changes between periods were as follows.  Year
        Ended December 31(millions
        of euros)
      2002
      
      2001
      
      Percentage
          
          ChangeFlexible
        Packaging Europe
      372
      
      260
      
      43.1%Flexible
        Packaging North America
      734
      
      786
      
      -6.6%Bottles
      185
      
      191
      
      -3.1%Cebal
        Tubes Europe(*)
      240
      
      271
      
      -11.4%Cebal
        Aerosols
      89
      
      108
      
      -17.6%Cebal
        Tubes Americas
      242
      
      251
      
      -3.6%Techpack
        International
      388
      
      460
      
      -15.7%Caps
      92
      
      91
      
      1.1%Packaging
      2,342
      
      2,418
      
      -3.1% (*) Net Sales
  of the Cebal China division are included in those of Cebal Tubes Europe.   Net sales
          of Plastic Packaging (flexible packaging and bottles) rose to € 1,291
          million in 2002 from € 1,237 million in 2001. This rise reflected
          the contribution, on a full year basis, of Soplaril, which was acquired
          in 2001. This offset the impact of the depreciation of the U.S. dollar
          vis-à-vis the euro from one year to the next. On a comparable
          basis, net sales in this division were down 7%.
        Cebal reported
          Net Sales of € 571 million in 2002, compared with € 630 million
          in 2001. The respective decline in net sales at Cebal Tubes Europe and
          Cebal Aerosols was mainly due to lower sales volume in these divisions.
          At Cebal Tubes Americas, increased sales volume offset the negative
          parity impact.
      
      Techpack International
          reported Net Sales of € 388 million in 2002, down € 72
          million from 2001.
        The decline
          mainly reflected lower sales volume, mainly in the makeup and perfume
          markets, as the environment in these markets was particularly unfavorable.
          Net Sales in this sector were also affected, though to a lesser degree,
          by the depreciation of the U.S. dollar vis-à-vis the euro.
        Net sales
          from the Caps and Overcaps division totaled € 92 million in 2002,
          practically stable compared with 2001. This stability nevertheless masked
          a significant increase in sales volume in the final quarter, which compensated
          for a first quarter marked by lower demand, particularly in the champagne
          cap market.


75


»Operating
  and Financial Review and Prospects  Ferroalloys
    and Other Activities Net sales
          from Ferroalloys and Other Activities totaled € 308 million in
          2002, down € 50 million from 2001.
        The decrease
          mainly reflected the deconsolidation of the activities
      
      transferred
          to the SKW joint venture in 2001, as well as the shutdown of magnesium
          production at the Marignac plant. In addition, the division experienced
          a significant drop in the price of silicon. International
    Trade (Restated) In 2002, Net
          Sales from International Trade activities totaled € 5,036 million,
          compared with € 4,209 million in 2001, representing an increase
          of 20%. The increase was related principally to a major increase in
          sales volume linked to the development of copper activities in Europe
          and the integration of the Euromin contracts that Pechiney acquired
          in February 2002. These factors was partially diminished by a negative
          parity impact, mainly due to the depreciation of the U.S. dollar, and
          by a decline in selling prices, especially in alumina.
        In 2002,
          International Trade was engaged in three principal activities:
        marketing
            the products of the Group and other producers on an agency basis;
          nonferrous
            metal trading;
          LME brokerage
            (see "Item 4. Information on the Company - Business of the Pechiney
            Group - International Trade"). The bulk of Net Sales from International
            Trade activities are contributed by its trading operations, which
            are conducted through Pechiney Trading Company, Brandeis (USA) and
            the Minemet group of companies. A far smaller portion of International
            Trades Net Sales comes from agency and distribution operations.
            Because the sales of International Trade reflect only a portion of
            its activities and because sales are not a good indicator of the International
            Trades contribution to Earnings from Operations, the Group
      
      does
            not consider the reported sales of the International Trade to be a
            meaningful indicator of the development of International Trades
            business.International
          Trades marketing activities, when conducted on a pure agency basis,
          are not reflected in Net Sales but reported under Other operating revenues
          as described in Note 1 to our consolidated financial statements.
        Trading activities
          are reflected in Net Sales to the extent that such sales represent International
          Trade sales to third parties of products produced by third parties.
          Sales to the Group or sales to third parties of the Groups products
          are not reflected in International Trades Net Sales. Consequently,
          reported Net Sales from International Trade activities are influenced
          primarily by the volume of third party sales versus Group sales made
          through trading operations. Reported sales are also affected by fluctuations
          in the price of metals.


76


»Operating
          and Financial Review and Prospects
      Item
          5 Earnings
    from Operations (Restated) Earnings
          from Operations take into account Net Sales, Other Operating Revenues,
          Cost of Goods Sold (excluding depreciation), Selling, General and Administrative
          Expense, Research and Development Expense and Depreciation and Amortization.
          Earnings from Operations do not take into account Goodwill Amortization,
          Long-lived Assets Writedown, Restructuring Expense and Other Income
          (Expense); such items are, under U.S. GAAP, considered to be operating
          income/expenses. The Earnings from Operations measure has been used
          by the Group for many years in its public reporting and is closely monitored
          by financial analysts
      
      in France.
          The Group believes that the exclusion of Goodwill Amortization, Long-lived
          Assets Writedown, Restructuring Expense and Other Income (Expense) results
          in a measure that reasonably reflects recurring operating results and
          facilitates comparison with the Groups competitors.
        Contributions
          to the Groups Earnings from Operations by segment after elimination
          of intragroup transactions, which are included as inventory under the
          Holdings line items, for the years ended December 31, 2002 and 2001,
          and the percentage change between the periods were as follows.  Year Ended
          December 31 (millions of euros)
      2002
      
      2001
      
      Percentage
          
          ChangePrimary Aluminium
      276
      
      423
      
      -34.8%Aluminium
          Conversion
      16
      
      23
      
      -30.4%Packaging
      129
      
      136
      
      -5.1%Ferroalloys
          and Other
      3
      
      0
      
      -International
          Trade (Restated)
      73
      
      58
      
      25.9%Holdings
      (90)
      
      (88)
      
      2.3%Total (Restated)
      407
      
      552
      
      -26.3%  In 2002, the
          Groups Earnings from Operations totaled € 407 million,
          compared with € 552 million in 2001, representing a decrease
          of € 145 million or 26.3%.
        In 2002,
          the Group was confronted by a difficult economic environment -mainly
          a decrease in the price of aluminum and the U.S. dollar, as well as,
          to a lesser degree, a significant decline in sales volumes in certain
          Aluminum Conversion (aerospace) and Packaging markets. These negative
          factors were partially offset by:
        the positive
            impact of the scope of consolidation, mainly due to the acquisition
            in 2001 of Eurofoil, Soplaril and an additional 15.5% equity interest
            in Tomago;
          a notable
            reduction in raw materials costs, primarily in packaging, as a result
            of the lower price of resins;
          the good
            performance reported in terms of costs in the Aluminum Conversion
            and Packaging segments, linked to the rapid implementation of the
            Pechiney Continuous Improvement System.
      
      Pechiney does
          not report Other Operating Revenues, Cost of Goods Sold (excluding depreciation),
          Selling, General and Administrative Expense, Research and Development
          Expense or Depreciation and Amortization (excluding Goodwill Amortization)
          by segment. For the Group as a whole, Other Operating Revenues decreased
          by 7% to income of € 144 million in 2002, compared with €
          155 million in 2001; Cost of Goods Sold (excluding depreciation) increased
          by 5.4% to an expense of € 10,611 million in 2002, compared with
          an expense of € 10,070 million in 2001; Selling, General and Administrative
          Expense decreased to € 610 million in 2002, compared with € 620
          million in 2001; Research and Development Expense decreased by 7.2%
          to an expense of € 90 million in 2002, compared with an expense
          of € 97 million in 2001; and Depreciation and Amortization
          (excluding Goodwill Amortization) increased by 2.1% to an expense of
          € 335 million in 2002, compared with an expense of € 328
          million in 2001 (see "the Consolidated Statement of Income").


77


» Operating
  and Financial Review and Prospects  Aluminum Primary
    Aluminum Primary Aluminum
          Earnings from Operations decreased by € 147 million to
          € 276 million in 2002, compared with € 423 million in 2001.
        This decline
          reflected an unfavorable trend in external factors: the divisions
          operating results were affected by a decline in the price of aluminum,
          as well as, to a lesser degree, the depreciation of the U.S. dollar
          vis-à-vis the euro. The average price of aluminum on the LME
          realized by Pechiney in 2002 (U.S.$ 1,358 per metric ton) was down 8.4%
          from 2001).
        The negative
          impact from these external factors could only partially be compensated
          by the progress made otherwise by the sector:
      
      Production
          of primary aluminum was increased due, in particular, to the acquisition
          of its additional 15.5% equity interest in the Tomago facility in October
          2001;
        Several successes
          were reported in the sale of technology (winning all the large smelter
          expansion contracts on the market in 2002) mainly Alba, Hillside, Alouette
          and Mozal 2. These successes reinforce Pechineys technological
          leadership.
        Production
          costs for the sector were kept under control despite several technical
          incidents in different factories of the Group and higher maintenance
          costs during 2002. Aluminum
    Conversion Aluminum Conversion
          Earnings from Operations totaled € 16 million in 2002, compared
          with € 23 million in 2001. This result at first obscures otherwise
          good performances in European activities, which at € 70 million
          succeeded in maintaining earnings from operations at the level of 2001.
          This demonstrates a certain resistance to the economic slump, a rapid
          adaptation of production capacity to weak demand and good performancesin
          terms of cost reductions. At the same time, the Ravenswood plant in
          West Virginia reported a loss of € 54 million in 2002, compared
          with € 47 million in 2001.
        European
          activities of the Aerospace, Transport, Industry division were principally
          affected by the aerospace crisis, with a significant decrease in shipments
          of heavy plate and hard alloy extrusions in this market. Nevertheless,
          the stability of sales margins and satisfactory performance in terms
          of costs made it possible to limit the impact of this situation. After
          a period of major inventory depletion, there seemed to be a slight upswing
          in shipments at the end of the year in the aerospace market, reflected
          in a significant increase in orders for technical rolled products in
          the fourth quarter of 2002.
        In the United
          States, despite the rise in sales volume for standard rolled products,
          the Ravenswood plant was confronted with a significant erosion of its
          product mix, linked to slow sales to the aerospace industry. The persistence
          of losses in this business led the Group to launch a dynamic recovery
          plan, including a 17% cut in the workforce and a complete overhaul of
          the facilitys marketing and sales policy, focusing sales on profitable
          customers and segments. Finally, the business was six months early in
          negotiating a two-year renewal of the labor agreement at the plant,
          on more favorable terms.
      
      The Cans,
          Automotive, Standard Rolled Products division reported strong growth
          in sales volume, good industrial and technical performances at the Neuf
          Brisach plant and a marked reduction in the divisions production
          and operating costs, which generated a major increase in operating results
          in 2002 compared with 2001. In addition, the environment remains favorable
          in most of the divisions markets: automotive, heat exchangers
          and can stock.
        In 2002,
          the Foil and Strip / Specialties division benefited from the full contribution
          of Eurofoils plants, acquired in 2001. In addition, the integration
          of these facilities into the division made it possible to generate major
          industrial and commercial synergies with the Rugles plant, which reported
          considerable improvement in operating performance in 2002, particularly
          in terms of production volume and costs.
        Lastly, in
          the Extrusions, Casting Alloys, Automotive division, Extrusions suffered
          in both Germany and France from the persistent unfavorable economic
          environment, with a marked decline in sales volume. As for Casting Alloys,
          in addition to the decrease in shipments, business was penalized in
          recycling by the sharp rise in aluminum waste.
        Aluminum
          Conversions Earnings from Operations as a percentage of Net Sales
          decreased to 0.6% in 2002, compared with 0.9% in 2001. The decrease
          was mainly due to lower shipments of heavy plate and hard alloy extrusions
          in the aerospace market.


78


»Operating
          and Financial Review and Prospects
      Item
          5 Packaging Earnings from
          Operations in Packaging decreased slightly from € 136 million in
          2001 to € 129 million in 2002.
        The decline
          reflected good resistance to the low sales volume recorded in most of
          the markets in this sector. The impact of this difficult environment
          exerted on earnings from operations was largely offset by the decrease
          in raw materials costs and cost reductions secured through the Pechiney
          Continuous Improvement System.
        In flexible
          packaging, results continued to improve and benefited, in particular,
          from the successful integration of Soplaril. This activity more than
          offset the decrease in sales volume and selling prices by reducing production
          costs and raw materials costs, the latter decrease linked to lower resin
          prices and procurement synergies generated by the integration of Soplaril.
          In addition, earnings from operations in 2002 included the impact of
          the change in the scope of consolidation linked to the full year contribution
          of Soplaril, consolidated as of August 2001.
      
      Whether the
          result of inventory depletion or of the significant downturn in the
          luxury packaging market, the sharp decline in sales volume and selling
          prices in the beauty and cosmetics markets was not offset by the nevertheless
          marked improvement in production costs.
        The general
          decrease in sales volume, related to particularly unfavorable market
          conditions, did not allow the sector to increase its operating results.
          Nevertheless, the difficult economic environment was accompanied by
          good performances in terms of production costs linked to the implementation
          of the Pechiney Continuous Improvement System in the sector.
        Packagings
          Earnings from Operations as a percentage of Net Sales was stable at
          5.5% in 2002, compared with 5.6% in 2001. Ferroalloys
    and Other Activities Earnings from
          Operations in Ferroalloys and Other Activities rose from € 0
          million in 2001 to € 3 million in 2002.
        The increase
          in operating results in 2002 was mainly linked to the deconsolidation
          of the facilities transferred to the SKW joint venture and the shutdown
          of the Marignac plant in France, activities which reported a loss in
      
      2001, and
          to good performance in terms of costs. Nevertheless, the significant
          decrease in selling prices for silicon continued to weigh on the divisions
          results.
        Ferroalloys
          and Other Activities Earnings from Operations as a percentage
          of Net Sales increased to 1% in 2002, compared with 0% in 2001. This
          evolution reflects the increase in operating results. International
    Trade (Restated) International
          Trade reported strong growth in Earnings from Operations to € 73
          million in 2002 from € 58 million in 2001.
        The increase
          reflected principallya
          significant rise in sales volume in trading of copper and aluminum,
          in particular in Europe, and of concentrate, linked to the integration
          of the contracts acquired from Euromin in February 2002.
      
      Earnings from
          Operations of brokerage and trading activities are impacted primarily
          by the volume of sales and purchases in the various metals brokered
          and traded by the Group, which is affected by several market conditions,
          and by the level of quotations of such metals on the LME. Broadly speaking,
          improved demand in the market tends to cause International Trades
          volume to increase, while spreads and commissions tend to increase as
          prices increase. The Earnings from Operations of agency business generally
          result from commissions calculated as a percentage of the principals
          sales. Consequently, such Earnings from Operations are also impacted
          primarily by the price and volume in the market generally.


79


»Operating
  and Financial Review and Prospects Other
    Statement of Income Items Income
    from Operations (Restated) Income from
          Operations takes into account Earnings from Operations,   Goodwill
          Amortization, Restructuring Expense and Long-lived Assets
      
      Writedown,
          and Other Income (Expense). Thefollowing
          table presentsthese
          items for the years ended December 31, 2002 and 2001.  Year
        Ended December 31(millions
        of euros)
      2002
      
      2001(Restated)
      
      (Restated)Earnings
        from Operations
      407
      
      552Restructuring
        Expense and Long-lived Assets Writedown
      (145)
      
      (75)Other
        Income (Expense)
      (103)
      
      10Income
        from Operations
      159
      
      487  The €
          328 million decrease in Income from Operations was the result of the
          € 145 million decline in Earnings from Operations, and of the trend
          in other income items discussed below.
        Restructuring
          Expense and Long-lived Assets Writedown totaled € 145 million,
          compared with € 75 million in 2001. The € 70 million increase
          was mainly due to restructuring expense and long-lived asset writedown
          (calculated in accordance with the new US GAAP SFAS 144) for certain
          activities in the Packaging sector, in particular the activities of
          Techpack International in Europe and the United States and the activities
          of Cebal in Asia, and of certain activities in the Aluminum Conversion
          sector, especially in the United States, which were higher than the
          expenses recorded in 2001, and which mainly concerned the shutdown of
          primary magnesium production (Ferroalloys and Other Activities).
      
      Other Income
          (Expense) fell from net income of € 10 million in 2001 to a net
          expense of € 103 million in 2002. This negative change of €
          113 million was mainly the result of the depreciation of securities
          and receivables of entities linked to the brokerage business sold in
          2000, in large measure owing to the settlement of a legal dispute related
          to this activity, and due to the cost of the premium of an individual
          insurance policy relating to the environmental remediation costs linked
          to the past operation of a mine in the United States. This negative
          change was reduced by income from the positive settlement of a legal
          dispute concerning violation of a patent registered by the Group. The
          net income reported in 2001 came from the reversal of provisions following
          the definitive settlement of the Viskase litigation.  Income
    before Income Taxes (Restated) Income before
          Income Taxes totaled € 110 million in 2002, compared with
          € 419
          million in 2001. The decrease of € 309 million mainly reflected
          the € 328
          million decline in Income from Operations.
      
      Net financial
          expense totaled € 49 million in 2002, compared with € 68 million
          in 2001. This trend was due to the reduction in the average cost of
          the Groups financing (3.8% in 2002, compared with 5.7% in 2001),
          linked to the decline in interest rates on euro- and U.S. dollar-denominated
          debt between 2001 and 2002.


80


»Operating
          and Financial Review and Prospects
      Item
          5 Income
    from Consolidated Companies(Restated) Income from
          Consolidated Companies totaled € 71 million in 2002, compared
          with € 289 million in 2001. This € 218 million decrease was
          due to the € 309 million decline in Income before Income Taxes,
          offset in the amount of € 91 million by the change in Income Tax,
          which went from a tax expense of € 130 million in 2001 to
          a tax expense of € 39 million in 2002.
      
      The change
          in Income Tax was primarily the result of the decrease in Income before
          Income Taxes in 2002. Net
    Income excluding Goodwill Amortization(Restated) In 2002, Net
          Income excluding Goodwill Amortization totaled € 74 million,
          compared with € 285 million in 2001. This € 211 million decrease
          was due to the € 218 million decline in Income from Consolidated
          Companies and to the € 21 million decline in the Net Earnings of
          Equity Affiliates, offset in the amount of € 28 million by
          the reduction of minority interests in consolidated net income.
      
      The Groups
          share of the Net Earnings of Equity Affiliates decreased by € 21 million,
          from € 24 million in 2001 to € 3 million in 2002. This change
          was mainly due to the impact of the drop in the price of aluminum on
          the income of aluminum-producing companies.
        Minority
          interests in consolidated net income totaled € 0 million in 2002,
          compared with € 28 million in 2001; this trend was mainly due to
          the results of Cebal Asia. Net
    Income (Loss) (Restated) In 2002,
          the Group reported a Net Loss of € 55 million, compared with Net
          Income of € 234 million in 2001. The € 289 million decrease
          was due to the € 211 million decline in Net Income excluding
          Goodwill Amortization and to the € 78 million increase in goodwill
          amortization.
      
      Recurring
          goodwill amortization increased by € 2 million, from € 29
          million in 2001 to € 31 million in 2002. Extraordinary goodwill
          amortization increased by € 76 million, from € 22 million
          in 2001 to € 98 million in 2002. This change was mainly due to
          the extraordinary amortization of a part of the goodwill of the activities
          of Techpack International (Packaging sector) and of all of the goodwill
          of the American activities of the Aluminum Conversion sector (calculated
          in accordance with the new US GAAP SFAS 142).


81


»Operating
  and Financial Review and Prospects Year Ended
    December 31, 2001, Compared with Year Ended December 31, 2000 Net
    Sales Contributions
          to the Groups Net Sales by segment after elimination of intragroup
          sales for the years ended December 31, 2001 and 2000, and the percentage
          change between the periods were as follows.  Year
        Ended December 31(millions
        of euros)
      2001
      
      2000
      
      Percentage
          ChangePrimary
        Aluminum
      1,851
      
      2,039
      
      -9.2%Aluminum
        Conversion
      2,676
      
      2,600
      
      2.9%Packaging
      2,418
      
      2,085
      
      16.0%Ferroalloys
        and Other
      358
      
      377
      
      -5.0%Net
        Sales from Industrial Activities
      7,303
      
      7,101
      
      2.8%International
        Trade (Restated)
      4,209
      
      3,773
      
      11.6%Total
        Net Sales(Restated)
      11,512
      
      10,874
      
      5.9%  The Groups
          consolidated Net Sales increased by 5.9% to € 11,512 million
          in 2001, compared with € 10,874 million in 2000. This growth was
          mainly
      
      linked to
          the consolidation in 2001 of the companies acquired in 2000 and2001. Aluminum Primary
    Aluminum In 2001, Primary
          Aluminum reported Net Sales of €1,851 million,representing a decrease of 9.2% from 2000 (€ 2,039 million).
        This trend
          reflected three main factors:
        a decrease
            in the price of aluminum on the LME and a decline in geographic and
            form premiums;
          lower
            technology sales due to the termination of the Alma and Mozal contracts;
      
      the transfer
            of the alumina trading activity from the Primary Aluminumsector to International Trade.These negative
        elements were only partly offset by a rise in the average parity of the
        U.S. dollar negotiated by Primary Aluminum from one period to the next
        (+7.4%) and by an increase in the volume of aluminum metal and alumina
        sold by the segment.


82


»Operating
          and Financial Review and Prospects
      Item
          5 Aluminum
    Conversion Net Sales
          from Aluminum Conversion activities totaled € 2,676 million in
          2001, compared with € 2,600 million in 2000. In 2001, this figure
          included the contribution of the companies consolidated during the year,
          Workington and Eurofoil. Conversely, Société Métallurgique
          de Gerzat, which had been consolidated in 2000, was sold in May 2001.
      
      The contributions
          of the different divisions to Net Sales from Aluminum Conversion activities
          for the years ended December 31, 2001 and 2000, and the percentage change
          between the periods were as follows.  Year
        Ended December 31(millions
        of euros)
      2001
      
      2000
      
      Percentage
          
          ChangeAerospace,
        Transport, Industry
      1,013
      
      (*)1,186
      
      -14.6%Cans,
        Automotive, Standard Rolled products
      734
      
      685
      
      7.2%Foil
        and Strip / Specialties
      354
      
      (*)158
      
      124.1%Extrusions,
        Casting Alloys, Automotive
      575
      
      571
      
      0.7%Transformation
      2,676
      
      2,600
      
      2.9% (*) Figures
    not restated subsequent to the transfer, as of 2002, of the Mercus, Froges
    and Goncelin plants from the Aerospace, Transport, Industry division to the
    Foil and Strip / Specialties division. Net Sales
          of the Aerospace, Transport, Industry division decreased by 14.6% to
          € 1,013 million in 2001, compared with € 1,186 million in
          2000. In Europe, a favorable environment in the aerospace market, the
          maintenance of a good level of selling margins and the consolidation
          of Workingtons sales generated significant growth in Net Sales,
          in spite of a sharp drop in sales volume (excluding aerospace). Conversely,
          in the United States, Net Sales were down owing to a substantial decline
          in sales of standard rolled products and to the impact on the aerospace
          market of the events of September 11, which occurred more rapidly than
          in Europe, where the first effects of the tragedy on the aerospace market
          were felt at the end of the year with a significant decrease in orders.
        Net Sales
          of the Cans, Automotive, Standard Rolled Products division rose 7.2%
          in 2001, reflecting:
        an increase
            in selling prices as a result, in particular, of passing through to
            customers the rise in the price of aluminum expressed in euros (the
            appreciation of the parity of the U.S. dollar more than offset the
            fall in the price of aluminum);
      
      improvements
            in the product mix due to the progressive discontinuing of standard
            rolled products activities to the benefit of cans, a market in which
            demand remains strong, and the automotive segment.Net Sales of
          the Foil and Strip / Specialties division increased by € 196 million
          mainly as a result of the acquisition of Eurofoil and improved manufacturing
          performances at certain facilities like Rugles and Annecy in France,
          which in 2000 had to deal with technical problems.
        Net Sales
          of the Extrusions, Casting Alloys, Automotive division totaled €
          575 million in 2001, almost stable compared with 2000. The division
          was confronted by a drop in sales volume, particularly in Germany, in
          a difficult market environment. Only in the French construction market
          was sales volume relatively stable. In the casting alloys market, sales
          volume was down slightly from one year to the next. The decline in sales
          volume was offset by higher selling prices due, in part, to success
          in passing through to customers the rise in the price of aluminum expressed
          in euros.


83


» Operating
  and Financial Review and Prospects  Packaging Net sales
          of Packaging totaled € 2,418 million in 2001, compared with
          € 2,085 million in 2000, representing an increase of 16.0%.
        In 2001,
          Net Sales included the sales, on a full year basis, of the companies
          acquired in 2000 (JPS Packaging, Anchor Cosmetics and Metalpack), as
          well as the partial contributions of the companies consolidated in 2001
          (Soplaril, Molplastic, Capalux, etc.).
      
      The respective
          contributions of the activities of Food, Healthcare and Beauty for the
          years ended December 31, 2001 and 2000, and the percentage changes between
          periods were as follows.  Year
        Ended December 31(millions
        of euros)
      2001
      
      2000
      
      Percentage
          ChangeFlexible
        Packaging Europe
      260
      
      173
      
      50.3%Flexible
        Packaging North America
      786
      
      668
      
      17.7%Bottles
      191
      
      180
      
      6.1%Cebal
        Tubes Europe(*)
      271
      
      282
      
      -3.9%Cebal
        Aerosols
      108
      
      93
      
      16.1%Cebal
        Tubes Americas
      251
      
      205
      
      22.4%Techpack
        International
      460
      
      405
      
      13.6%Caps
      91
      
      79
      
      15.2%Packaging
      2,418
      
      2,085
      
      16.0% (*) Net
    Sales of the Cebal China division are included in those of Cebal Tubes Europe. Net sales
          of Plastic Packaging rose to € 1,237 million in 2001 from €
          1,021 million in 2000. This rise mainly reflected the contribution of
          the activities acquired at the end of 2000 and in 2001 (primarily JPS
          Packaging and Soplaril). The increase in Net Sales was also linked,
          to a lesser degree, to the appreciation of the parity of the U.S. dollar
          from one year to the next.
        Cebal reported
          an increase of 8.6% in Net Sales (€ 630 million in 2001, compared
          with € 580 million in 2000). Net Sales in 2001 included the
          contribution of the activities acquired at the end of 2000 and in 2001
          (primarily Metalpack).
        Excluding
          this impact, the rise in sales was due to higher sales volume, reflecting
          very contrasting trends. Cebal Americas and Cebal Aerosols Europe reported
          strong growth during the year, while Cebal Tubes Europe was affected
          by a decline in sales volume linked to the end of a laminated tube contract
          with a major customer and by sluggish demand. Cebal also benefited,
          to a lesser degree, from higher selling prices in Europe, subsequent
          to the introduction a new marketing strategy at the end of 2000 as well
          as from the impact of a favorable U.S. dollar exchange rate.
      
      Techpack International
          reported Net Sales of € 460 million in 2001, compared with
          € 405 million in 2000.
        The rise
          mainly reflected the consolidation in 2001 of the sales of companies
          recently acquired (in particular, Anchor Cosmetics and Molplastic).
          The business also benefited from higher sales, especially in the markets
          for accessories and promotional samples, perfume and makeup.
        Net sales
          from Caps & Overcaps Activities totaled € 91 million in
          2001, compared with € 79 million in 2000. The increase was the
          result, on the one hand, of the acquisition of Capalux, and on the other,
          of increased sales volume reflecting growth in the capping and overcapping
          segments, particularly in export markets. The consolidation of Capalux
          thus allowed the division to enter the North American market and expand
          its customer portfolio.


84


»Operating
          and Financial Review and Prospects
      Item
          5 Ferroalloys
    and Other Activities Net sales
          from Ferroalloys and Other Activities totaled € 358 million in
          2001, compared with € 377 million in 2000.
        The decrease
          mainly reflected lower sales volume in several markets, particularly
          in steel, silicon and especially magnesium, which was the result of
          the shutdown of the Marignac plant in May 2001.
      
      Conversely,
          selling prices remained stable, as opposed to the trend reported in
          2000, in particular in the metallurgical silicon and calcium carbide
          markets. International
    Trade (Restated) In 2001,
          Net Sales from International Trade activities totaled € 4,209
          million, compared with € 3,773 million in 2000, representing an
          increase of 11.6%. The increase was related to the appreciation of the
          U.S. dollar and to
      
      increased
          operating volume, particularly in alumina and aluminum trading activities,
          where an increase in volume more than offset a decline in prices. Earnings
    from Operations (Restated) Earnings from
          Operations take into account Net Sales, Other Operating Revenues, Cost
          of Goods Sold (excluding depreciation), Selling, General and Administrative
          Expense, Research and Development Expense and Depreciation and Amortization.
          Earnings from Operations do not take into account Goodwill Amortization,
          Long-lived Assets Writedown, Restructuring Expense and Other Income
          (Expense); such items are, under U.S. GAAP, considered to be operating
          income/expenses. The Earnings from Operations measure has been used
          by the Group for many years in its public reporting and is closely monitored
          by financial analysts
      
      in France.
          The Group believes that the exclusion of Goodwill Amortization, Long-lived
          Assets Writedown, Restructuring Expense and Other Income (Expense) results
          in a measure that reasonably reflects recurring operating results and
          facilitates comparison with the Groups competitors.
        Contributions
          to the Groups Earnings from Operations by segment after elimination
          of intragroup transactions for the years ended December 31, 2001 and
          2000, and the percentage change between the periods were as follows.  Year Ended
          December 31 (millions of euros)
      2001
      
      2000
      
      Percentage
          
          ChangePrimary Aluminum
      423
      
      509
      
      -16.9%Aluminum Conversion
      23
      
      78
      
      -70.5%Packaging
      136
      
      100
      
      36.0%Ferroalloys
          and Other
      0
      
      0
      
      -International
          Trade (Restated)
      58
      
      65
      
      -10.8%Holdings
      (88)
      
      (93)
      
      -5.4%Total (Restated)
      552
      
      659
      
      -16.2%


85


» Operating
  and Financial Review and Prospects In 2001, the
          Groups Earnings from Operations totaled € 552 million,
          compared with € 659 million in 2000, representing a decrease of
          € 107 million. A decrease in sales volume, which mainly affected
          primary aluminum and aluminum conversion activities, higher raw materials
          and energy costs and a rise in the average price of aluminum and the
          level of geographic and form premiums had a negative effect on the Groups
          results.
        Nevertheless,
          good industrial performances in the packaging sector, with increased
          sales volume, a positive foreign exchange impact linked to the appreciation
          of the U.S. dollar from one period to the next, and the contribution
          of the acquisitions made at the end of 2000 and in 2001 helped limit
          the consequences of what proved to be a particularly difficult economic
          environment in 2001.
        Pechiney
          does not report Other Operating Revenues, Cost of Goods Sold (excluding
          depreciation), Selling, General and Administrative Expense,
      
      Research and
          Development Expense or Depreciation and Amortization (excluding Goodwill
          Amortization) by segment. For the Group as a whole, Other Operating
          Revenues increased by 1.3% to income of € 155 million in 2001,
          compared with € 153 million in 2000; Cost of Goods Sold (excluding
          depreciation) increased by 7% to an expense of € 10,070 million
          in 2001, compared with an expense of € 9,411 million in 2000; Selling,
          General and Administrative Expense increased to € 620 million in
          2001, compared with € 564 million in 2000; Research and Development
          Expense increased by 7.8% to an expense of € 97 million in 2001,
          compared with an expense of € 90 million in 2000; and Depreciation
          and Amortization (excluding Goodwill Amortization) increased by 8.3%
          to an expense of € 328 million in 2001, compared with an expense
          of € 303 million in 2000 (see "the Consolidated Statement
          of Income"). Aluminum Primary
    Aluminum Primary Aluminum
          Earnings from Operations decreased by € 86 million to
          € 423 million in 2001, compared with € 509 million in
          2000.
        This decline
          reflected:
        a drop
            in sales volume linked to production difficulties in the first half
            of the year at certain smelters and to a decrease in technology sales
            due to the termination of the Alma and Mozal contracts;
          a rise
            in the price of raw materials and energy, which mainly affected alumina
            production activities (bauxite, gas, heating oil and soda ash);
          a temporary
            rise in costs (linked to the launch of certain projects, in particular
            AP50);
      
      a decrease
            in the price of aluminum and in geographic and form premiums.These elements
          were partly offset by:
        a rise
            in the average parity of the U.S. dollar from one period to the next;
          the consolidation
            of the additional 15.5% equity interest in Tomago acquired in October
            2001.  Aluminum
  Conversion Aluminum Conversions
          Earnings from Operations decreased by € 55  million to
          € 23 million, from € 78 million in 2000.
        European
          activities of the Aerospace, Transport, Industry division benefited
          from a favorable environment in Europe during most of the year, particularly
          in the aerospace segment, a market in which sales volume and margins
          were maintained at a good level. Nevertheless, there was a decrease
          in orders at the end of the year in this market, the first effect of
          a downturn in the aerospace cycle accelerated by the events of September
          11. In the United States, on the other hand, business was characterized,
          in spite of favorable conditions in the aerospace segment, by a very
          difficult market environment in standard rolled products and by production
          problems at Ravenswood linked to the industrial restructuring of this
          plant in the first nine months of the year. In addition, exceptional
          cost overruns partly related to the economic environment (provisions
          for non-performing loans, etc.) weighed on the results of the divisions
          American activities.
      
      In the Foil
          and Strip / Specialties division, sales volume declined owing to a drop
          in demand in the market for refined products (high-purity aluminum)
          and to lower sales of technology (Jumbo 3CM continuous casting) than
          in 2000, which benefited from the Norandal contract.
        Conversely,
          the Cans, Automotive, Standard Rolled Products division succeeded, under
          difficult market conditions, in maintaining the level of sales, in particular
          owing to the fact that it withdrew from the standard rolled products
          market and concentrated on automotive applications and can stock. This
          improved product mix also enabled the division to increase its margins
          compared with 2000. Nevertheless, non-recurring charges in 2001 did
          not allow the division to maintain the good level of results reported
          in 2000.


86


»Operating
          and Financial Review and Prospects
      Item
          5  Lastly, the
          Extrusions, Casting Alloys, Automotive division suffered in both Germany
          and France from the economic downturn which occurred in the second half
          of the year, in the market for extrusions (construction and industry)
          and cast products. In addition, sales volume and costs were affected
          in France by technical problems at two manufacturing facilities. These
          negative elements were partly offset by maintaining margins at a good
          level, in particular for cast products.
      
      Aluminum Conversions
          Earnings from Operations as a percentage of Net Sales decreased to 0.9%
          in 2001, compared with 3% in 2000. The decrease was due to difficult
          market conditions related to the deterioration of the economic environment
          and by production problems at Ravenswood linked to the industrial restructuring
          of this plant in the first nine months of the year. Packaging Earnings from
          Operations in Packaging increased by € 36 million to € 136
          million in 2001 from € 100 million in 2000.
        The sector
          benefited from increased sales volume, particularly in the following
          markets:
        flexible
            packaging for food products in the United States, where demand remained
            strong throughout the year;
          the healthcare
            and beauty sector in North America (Tubes Americas division) with
            a significant improvement in the product mix and gains in market share
            (a result of marketing strategy and the launch of new products);
          aerosol
            cans in Europe, with sustained strong demand in a market characterized
            by under-capacity and the development of specialty products by the
            division;
          packaging
            for the perfume and makeup markets, which benefited in 2001 from a
            considerable increase in demand.The rise
          in Earnings from Operations in this sector was also linked to the good
          manufacturing performance of Plastic Packaging and certain of Cebals
          activities. Continuous Improvement workshops led to a notable improvement
          in industrial efficiency throughout the year in the United
      
      States and
          are beginning to have an impact in Europe. Conversely, Techpack International
          had to deal with technical and productivity problems linked to the overloading
          of certain lines and to the launch of many new products.
        Higher raw
          materials costs (resins and film) observed at the start of the year,
          partly offset by an increase in prices negotiated at the end of the
          first half of the year, nevertheless weighed on the sectors results.
          In certain activities, strong competitive pressure obliged the divisions
          to make concessions to major customers. The trend in raw materials costs
          was, however, favorable in the second half of the year. Finally, there
          was also a rise in structure costs, particularly in North America, linked
          to the launch of e-business projects.
        Packagings
          Earnings from Operations as a percentage of Net Sales increased to 5.6%
          in 2001, compared with 4.8% in 2000. The increase was mainly due to
          the good manufacturing performance of Plastic Packaging and certain
          of Cebals activities. Ferroalloys
    and Other Activities Earnings from
          Operations in Ferroalloys and Other Activities were stable in comparison
          with 2000.
        This business
          was affected by a very sharp drop in sales volume, particularly in steel
          and magnesium (linked to the shutdown of the
      
      Marignac plant),
          and a significant increase in the price of raw materials and energy.
          Conversely, it benefited from a significant improvement in production
          costs and the positive impact of the appreciation of the U.S. dollar
          and the South African rand.


87


» Operating
  and Financial Review and Prospects  International
    Trade (Restated) International
          Trade reported a decrease in Earnings from Operations to € 58
          million in 2001 from € 65 million in 2000.
        The divisions
          volume of business, which reflects fluctuations in the economic environment,
          mainly recorded a significant drop in sales volume,
      
      particularly
          in trading and distribution. These activities were penalized throughout
          the year by the weak demand reported in the United States and by the
          slowdown observed in Europe in the second half of the year. This decrease
          in the volume of business was, however, partially offset by a major
          reduction in structure costs and good performance in alumina trading.  Holdings The change
          in Earnings from Operations of the holdings mainly reflected drastic
          cost reductions introduced as of the summer of 2001 to respond to the
          erosion of the European economic environment, particularly in the
      
      aluminum
          market, as well as the first results of Continuous Improvement initiatives
          at the holdings.


88


»Operating
          and Financial Review and Prospects
      Item
          5 Other
    Statement of Income Items Income from Operations
    (Restated) Income from
          Operations takes into account Earnings from Operations,  Goodwill
          Amortization, Restructuring Expense and Long-lived Assets
      
      Writedown,
          and Other Income (Expense). Thefollowing
          table presentsthese items for the years ended December 31, 2001 and 2000.  Year
        Ended December 31(millions
        of euros)
      2001
      
      2000(Restated)
      
      (Restated)Earnings
        from Operations
      552
      
      659Restructuring
        Expense and Long- lived Assets Writedown
      (75)
      
      (29)Other
        Income (Expense)
      10
      
      (8)Income
        from Operations
      487
      
      622  The €
          135 million decrease in Income from Operations was the result of the
          decline in Earnings from Operations, in the amount of € 107 million,
          and of the trend in other income items commented below.
        Restructuring
          Expense and Long-lived Assets Writedown increased by € 46 million.
          This change was mainly due to the writedown of a part of the goodwill
          on the TPI Group and to restructuring expense and long-lived assets
          writedown linked to the shutdown of primary magnesium production at
          the Marignac plant in France (Ferroalloys and Other Activities) and
          the closing of the Cleveland, Ohio, facility (Packaging), the
      
      amounts of
          which were greater than the charges of the same nature recorded in 2000,
          which mainly concerned the restructuring of the brokerage activity of
          the subsidiary Brandeis Brokers Limited and a Cebal UK plant.
        Other Income
          (Expense) went from a net expense of € 8 million in 2000 to net
          income of € 10 million in 2001. This positive change of €
          18 million was mainly the result of a reversal of provisions in the
          amount of € 48 million following the definitive settlement of the
          Viskase litigation. Income
    before Income Taxes(Restated) Income before
          Income Taxes totaled € 419 million in 2001, compared with € 554
          million in 2000. The decrease of € 135 million reflected the €
          135 million decline in Income from Operations.
      
      Net financial
          expense totaled € 68 million in both 2001 and 2000. The reduction
          in the average cost of the Groups financing (5.7% in 2001, compared
          with 6.5% in 2000) linked to the decline in interest rates on euro and
          U.S. dollar-denominated debt offset the rise in the Groups average
          indebtedness between 2000 and 2001. Income
    from Consolidated Companies(Restated) Income from
          Consolidated Companies totaled € 289 million in 2001, compared
          with € 382 million in 2000. This € 93 million decrease was
          due to the € 135 million decline in Income before Income Taxes,
          offset in the amount of € 42 million by the change in Income Tax,
          which went from a tax expense of € 172 million in 2000 to a tax
          expense of € 130 million in 2001.
      
      The change
          in Income Tax was primarily the result of the decrease in Income before
          Income Taxes in 2001, the impact of which was partly offset by a slight
          increase in the average tax rate.


89


» Operating
  and Financial Review and Prospects  Goodwill
    Amortization Goodwill Amortization
          increased by € 31 million, owing to:
        an exceptional
            amortization of goodwill at Techpack International;
          the goodwill
            recorded in 2001 on recent acquisitions (mainly Techpack
      
      America Cosmetic
          Packaging L.P., the Soplaril Group, the companies Eurofoil S.A. and
          Eurofoil Belgium S.A., and the additional 15.5% equity interest acquired
          in Tomago Aluminium Company Pty Ltd). Net
    Income (Restated) Net Income
          in 2001 totaled € 234 million, compared with € 318 million
          in 2000.
        The Groups
          share of the net earnings of equity affiliates increased by € 37
          million from an expense of € 13 million in 2000 to income of €
          24 million in 2001. This trend mainly reflected the recognition in 2000
          of a loss of € 46 million corresponding to the Groups share
          in the non-recurring amortization of goodwill on ANC.
      
      At €
          28 million, minority interests in consolidated results remained stable.
        For information
          as to the impact of foreign currency fluctuations and the extent to
          which impacted investments are hedged, see section on "Derivative Instruments
          - Currency Fluctuations".


90


»Operating
          and Financial Review and Prospects
      Item
          5 Liquidity
    and Capital Resources In 2002,
          the Groups principal source of liquidity was cash provided by
          operating activities.
        The funds
          obtained were used primarily to fund capital expenditures and financial
          investments, payment of pensions and other employee benefits. The Group
          believes that currently available sources of liquidity will provide
          sufficient financial resources for the Groups ongoing operations
          for the near term.
      
      The Groups
          cash flow from operating activities, investing activities and financing
          activities for each of the years in the three-year period ended December
          31, 2002, were as follows.  (millions
        of euros)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)Net
        cash provided by operating activities
      629
      
      588
      
      396-
        Investments
      (580)
      
      (947)
      
      (546)-
        Divestitures
      43
      
      30
      
      496Net
        cash used in investing activities
      (537)
      
      (917)
      
      (50)Net
        cash (used in) provided by financing activities
      (104)
      
      (354)
      
      (361)Net
        effect of foreign currency transaction on cash
      14
      
      (43)
      
      (10)Net
        increase (decrease) in cash and cash equivalents
      2
      
      (18)
      
      (5) Cash
    Flows from Operating Activities (Restated) Net cash provided
          by operating activities increased by € 41 million in 2002 to €
          629 million, compared with € 588 million in 2001 and € 396
          million in 2000.
        The increase
          in net cash provided by operating activities in 2002 compared with 2001
          was mainly due to a € 134 million improvement in the change in
          working capital requirements, for € 83 million in trade payables
          and to a lesser extent in trade receivables and inventories.
      
      The increase
          in net cash provided by operating activities in 2001 compared with 2000
          was mainly due to the following factors:
        a decline
            in cash from operations, which decreased by € 30 million to €
            751 million in 2001 from € 781 million in 2000, reflecting the
            trend in the Groups operating results;
          change
            in working capital requirements, which improved by € 247 million
            in 2001 versus 2000;
          expenditures
            related to restructuring, pensions and the environment, which increased
            by € 25 million to € 197 million in 2001, compared with
            €172
            million in 2000.


91


»Operating
  and Financial Review and Prospects Cash
    Flows from Investing Activities Capital expenditures
          for acquisitions of property, plant and equipment totaled € 479
          million in 2002, compared with € 389 million in 2001 and € 287
          million in 2000.
        Capital expenditures
          in Aluminum totaled € 263 million in 2002, compared with €
          188 million in 2001 and € 150 million in 2000. Capital expenditures
          in Packaging totaled € 196 million in 2002, compared with €
          177 million in 2001 and € 106 million in 2000. For the Groups
          other activities and Holdings, capital expenditures represented €
          20 million in 2002, compared with € 24 million in 2001 and €
          31 million in 2000.
        These expenditures
          principally related to the modernization of existing facilities, in
          particular:
        in Primary
            Aluminum, the increase in the capacity of existing smelters and replacement
            of industrial equipment;
          in Aluminum
            Conversion, further expenditures related to the launch of a modernization
            plan for industrial facilities, especially at the Ravenswood plant
            in the United States (€ 43 million);
          in Packaging,
            the modernization of production facilities, especially in Plastic
            Packaging.Financial
          and other long-term investments totaled € 101 million in 2002,
          compared with € 558 million in 2001 and € 259 million in 2000.
      
      The 2002 amount
          concerned:
        the acquisition
            of equity interests in the amount of € 42 million with the acquisition
            of Phnix, Envaril and APS, in the packaging sector, as well
            as the buyout of minority interests in Danaflex;
          an increase
            in fixed assets in the amount of € 38 million, € 17 million
            of which was linked to the acquisition of computer licenses.In 2001,
          financial investments concerned the acquisition, in the packaging sector,
          of Soplaril and, in the aluminum sector, of Eurofoil in Belgium and
          Luxembourg and of AMPs equity interest in Tomago in Australia.
          The 2000 amount concerned investments in the packaging sector, i.e.
          the acquisition of JPS Packaging and Anchor Cosmetics, both in the United
          States, Metalpack in Brazil and Capalux in Canada.
        In 2002,
          proceeds from divestitures totaled € 43 million, € 25
          million of which was proceeds from the sales of equity interests and
          fixed assets and € 18 million received from the repayments
          of long-term loans within the framework of the Groups contribution
          to the financing of working capital requirements at Aluminium Dunkerque.
          In 2001, proceeds from divestitures totaled € 30 million and were
          mainly composed of proceeds from the sale of Gerzat shares. In 2000,
          proceeds from divestitures totaled € 496 million and mainly included
          proceeds from the sale of the residual interest held by Pechiney in
          the ANC Group, Inc. Indebtedness
    (Restated) As of December
          31, 2002, Pechineys long-term indebtedness (excluding the current
          portion) totaled € 1,465 million, compared with € 971 million
          as of December 31, 2001, and € 734 million as of December
          31, 2000. The increase in the long-term portion of the Groups
          indebtedness was due to the issue of "Océanes" convertible bonds
          in May 2002 for a total of € 595 million(1),
          which enabled the Group to refinance its short-term debt.
        The maturities
          of the Groups long-term debt range from 2003 to 2013. Debt, before
          currency hedges, is denominated in euros (82%) and in U.S. dollars (17%)
          (see "Note 15 to the Consolidated Financial Statements").
        As of December
          31, 2002, the Groups bank overdrafts totaled € 390 million
          (€ 912 million as of December 31, 2001, and € 594 million
          as of December 31, 2000) and the current portion of long-term debt totaled
          an additional € 39 million (€ 37 million as of December
          31, 2001, and € 31 million as of December 31, 2000). As of December
          31, 2002, the Group had a total of € 436 million in cash and marketable
          securities (€ 445 million as of December 31, 2001, and € 463
          million as of December 31, 2000) and € 821 million in non-utilized
          committed medium-term and long-term lines of credit (€ 967
      
      million as
          of December 31, 2001, and € 860 million as of December 31, 2000).
          These short-term investments and non-utilized committed lines of credit
          covered 293% of Pechineys total short-term financial debt (bank
          overdrafts, short-term borrowings and current portion of long-term debt)
          in 2002, 148% in 2001 and 208% in 2000.
        The Groups
          net financial debt totaled € 1,437 million as of December 31, 2002,
          compared with € 1,473 million as of December 31, 2001, and €
          869 million as of December 31, 2000.
        The decrease
          in 2002 principally reflected the following factor:
         In
          2002, the Group generated excess net cash (before changes in indebtedness)
          of € 92 million, representing the sum of € 629 million in
          net cash provided by operating activities minus € 537 million in
          net cash used in investing activities, to which should be added the
          impact on the debt of foreign currency variations in the amount of €
          134 million (mainly linked to the U.S. dollar), the impact of the capital
          increase reserved for employees in the amount of € 36 million,
          minus the impact of cash dividends paid (€ 122 million) and the
          cost of the acquisition of the Companys own shares (€ 40
          million).


1 -
    Excluding amortization premium of € 9 millions. 92


»Operating
          and Financial Review and Prospects
      Item
          5  The increase
          in 2001 principally reflected the following factor:
        In 2001,
            the Group generated a need for net cash (before changes in indebtedness)
            of € 522 million, representing € 588 million in net cash
            provided by operating activities minus € 917 million in net cash
            used in investing activities, € 134 million in cash dividends
            paid and € 59 million in share buyback and other changes in capital.The decrease
          in 2000 principally reflected the following factor:
        In 2000,
            the Group generated excess net cash (before changes in indebtedness)
            of € 274 million, representing the sum of € 396 million
            in net cash provided by operating activities and € 50 million
            in net cash used in investing activities, minus € 72 million
            in cash dividends paid.
      
      With total
          shareholders equity and minority interests of € 3,163
          million, € 3,569 million and € 3,446 million (French
          GAAP) at the end of 2002, 2001 and 2000, respectively (€ 3,058
          million, € 3,411 million and € 3,349 million respectively
          in U.S. GAAP), the Groups net financial debt to equity and minority
          interests ratio was 0.45, 0.41 and 0.25 (French GAAP) at the end of
          2002, 2001 and 2000, respectively (0.47, 0.43 and 0.26 respectively
          in U.S. GAAP).
        The main
          currencies, in which cash and cash equivalents are held by Pechiney,
          are the euro and the U.S. dollar. Contingencies The Groups
          contingent liabilities include sales to financial institutions of selected
          receivables with limited recourse, pension and retirement indemnity
          liabilities, obligations for post-retirement benefits other than
      
      pensions,
          variable interest rate loans, guarantees, unresolved litigation liabilities
          and environmental expenses (see "Notes 11, 14, 15 and 20 to the Consolidated
          Financial Statements"). Option
    on an affiliateAluminium
    Dunkerque In June 1990,
          the Group entered into an agreement pursuant to which the shareholders
          of Aluminium Dunkerque other than the Group (representing in the aggregate
          65% of its capital) were granted an option to sell their shares of Aluminium
          Dunkerque. This put option will become exercisable in part beginning
          on September 1 following the date at which 80% of Aluminium Dunkerques
          project financing indebtedness is reimbursed, which, according to present
          estimates, should occur in 2003. The option will thereafter remain open
          for a period of five years. The options may be exercised each year in
          an amount up to 30% of the part of the share capital held by the other
          shareholders of Aluminium Dunkerque.
      
      In the event
          that this put option is exercised in full, the Group could become the
          majority shareholder of Aluminium Dunkerque as early as the first year
          of exercise. As a result, the Group would be required to consolidate
          Aluminium Dunkerque, including all of its project financing indebtedness
          then outstanding (which could represent up to 20% of the original amount,
          or approximately U.S.$135 million). The exercise price of the put option
          is the fair market value of the shares as determined each year during
          the exercise period by independent experts. On
          July 9, 2003, Pechiney announced that it had reached an agreement with
          its financial partners to purchase, as of December 30, 2003, the 65%
          equity interest for a price of approximately € 250 million,
          for further information, see "Item 4. Information on the Company
          - Recent Developments". Other
    Contingencies Aluminium
    Dunkerque The Group
          held an equity investment of € 99 million in Aluminium Dunkerque
          as of December 31, 2002, (€ 98 million as of December 31, 2001,
          and € 85 million as of December 31, 2000) which is recorded
          as Investment in Equity Affiliates in the Consolidated Balance Sheet.
          This amount corresponds to an initial total investment of € 91
          million, subsequently increased by the Groups participation in
          a capital increase in 1996 and decreased by an amount corresponding
          to the Groups share of Aluminium Dunkerques accumulated
          losses since its inception.
      
      In addition,
          the Group has extended to Aluminium Dunkerque a long-term loan which
          as of December 31, 2002, totaled € 33 million, compared with € 50
          million as of December 31, 2001. Moreover, Aluminium Dunkerque had extended
          short-term advances to the Group (recorded as "Short-Term Bank Loans"
          in the Consolidated Balance Sheet), the net amount of which, as of December
          31, 2002, totaled € 19 million, compared with € 40 million
          as of December 31, 2001, and € 9 million as of December 31, 2000.


93


»Operating
  and Financial Review and Prospects Finally, in
          June 1990, in the framework of the agreements relating to the creation
          of Aluminium Dunkerque, the Group committed itself to take off the facilitys
          total production and to finance a share of the plants working
          capital requirements.
      
      As of December
          31, 2002, Aluminium Dunkerque had statutory shareholders equity
          of € 205.5 million, compared with € 189.2 million as of December
          31, 2001, and € 130 million as of December 31, 2000. Bauxilum
    Project In April 2001,
          Aluminium Pechiney SPV, a wholly-owned Group subsidiary, entered into
          a technical, commercial, financial and management support agreement
          ("Investment and Liquidation Agreement") with CVG Bauxilum ("Bauxilum"),
          a subsidiary of the Venezuelan state holding company Corporacion Venezolana
          de Guyana (see "Acquisitions"). The purpose of this agreement is to
          modernize Bauxilums bauxite and alumina production facility so
          as to increase in a lasting manner its annual alumina production from
          1.7 million to 2 million metric tons and to ensure compliance of the
          installations in environmental matters. Within the framework of this
          agreement, the Group will provide equipment, technology, technical assistance
          and other services to Bauxilum for a total value of approximately U.S.$228
          million which shall be financed, on the one hand by two loans of a maximum
          amount of U.S.$110 million granted by a banking syndicate to Aluminium
          Pechiney SPV, and for the remainder, by the Group. Reimbursements of
          the loan amounts shall be carried out through the sales of alumina which
          shall be taken off by the Group. In light of the projects
      
      structure,
          the credit risk incurred by the Group should not exceed an estimated
          U.S.$120 million. Within the framework of this project, it is provided
          that the Group will deliver several guarantees, in particular as to
          performance and that it will subcontract, under its responsibility,
          a part of the project. This project also calls for a feasibility study
          of the expansion of the facility so as to allow the increase of annual
          alumina production from 2 million to 3 million metric tons. As of December
          31, 2002, the conditions precedent to the closing of the transaction
          contemplated by the Investment and Liquidation Agreement were satisfied,
          and the amounts determined in the agreement have been made available
          to Aluminium Pechiney SPV. As of December 31, 2002, the expenses incurred
          by the Group within the framework of the Bauxilum project amounted to
          € 17 million, and drawdowns on the loans granted by the banking
          syndicate totaled € 14 million. General
    Information Trends
    and Prospects In the course
          of 2002, the global economic situation did not witness the expected
          recovery. In the United States, the economy remained hesitant. In spite
          of successive decreases in interest rates by the Federal Reserve, the
          prospect of a short-term economic recovery in the United States remains
          uncertain, according to most economists.
        The decrease
          in the value of the dollar with respect to the euro from 0.88 to 1.05
          during the course of 2002 reinforced the stagnancy of the economic situation.
        In Europe,
          the economic situation is hardly more encouraging and a recovery has
          proven difficult. The following trends characterized the Group's principal
          markets.
        The demand
            for primary aluminum grew significantly in 2002, rising 6 % to 25.5
            million metric tons, mainly owing to increased consumption in Asia
            (excluding Japan). Production rose even more, by 6.9 % to 26.1 million
            metric tons, a fact which explains the persistence of a surplus in
      
      the world
          aluminum market. This marked increase in the supply of aluminum can
          be attributed to the sharp rise in Chinese production, linked to the
          startup of new smelting capacity at a rapid rate. The increase in inventories
          resulting from this imbalance between supply and demand explains the
          decrease in the price of aluminum on the LME  the year's average
          stood at U.S.$ 1,356 per metric ton, down 6.1 % from 2001 and 12.9 %
          from 2000.
        In aluminum
            conversion, the European situation showed contrasting trends in the
            different markets served. As the level of consumption remained relatively
            high in spite of the lackluster economic environment, consumption-oriented
            markets remained profitable, contrary to those related to investment.
            European can and automotive markets therefore benefited from the increased
            penetration of aluminum compared with steel, while the foil and thin
            foil market profited from high sustained demand. In the United States,
            most aluminum conversion markets continued to be affected by the low
            level of industrial production. Nevertheless, the rise in shipments
            of standard rolled products in the middle of 2002, compared


94


»Operating
          and Financial Review and Prospects
      Item
          5  with the particularly
          difficult situation in 2001, was most likely due to the combined effect
          of an upswing in demand and efforts to rebuild inventories by large
          aluminum consumers in North America.
        Finally,
          in Europe as well as in the United States, the low end of the aerospace
          cycle was compounded by the consequences on the air transport industry
          of the terrorist attacks of September 11, 2001. Demand in this market
          dropped significantly compared with 2001. Nevertheless, in Europe, shipments
          seemed to pick up at the end of the fourth quarter.
        Packaging
            markets suffered from persistent sluggish demand, due, first, to the
            difficult economic environment and the direct consequences of the
            terrorist attacks of September 11, 2001, and, second, to the impact
            of inventory depletion and changes in marketing strategy by major
            customers in this sector, who were confronted with the erosion of
            end-user markets and therefore focused on high value added products
            to the detriment of sales volume. The beauty and luxury market was
            particularly vulnerable in both the United States and Europe.
      
      The year 2003
          has begun in an environment marked by major political and economic uncertainty
          which affects all of the Groups activities, in particular the
          impact of the very unfavorable trend in the parity of the U.S. dollar
          and current market conditions. In Aluminum Conversion and Packaging,
          sales should, nevertheless, benefit from the end of the destocking phase
          observed in 2002, with pressure on prices which will remain strong in
          certain segments. In such an environment, the Groups priority
          is to continue to achieve the benefits of the Pechiney Continuous Improvement
          System, in line with the objectives defined a year ago. These efforts
          will be complemented by the restructuring, and on some occasions the
          closing, of activities which are unable to demonstrate their viability.
          These measures, though often difficult, are necessary to allow the Group
          to preserve its competitive position and continue to grow. Volatility
    of World Aluminum Prices World aluminum
          prices as quoted on the London Metal Exchange (LME) are marked by high
          volatility. The evolution of the price of aluminum is strongly influenced
          by supply and demand conditions in the market, while the consumption
          of aluminum is strongly linked to the state of the economy. Aluminum
          is used for a multitude of activities throughout the world. Many of
          the end-user markets served by the Group, such as the construction and
          transport industries, are cyclical and are significantly affected by
          changes in general and local economic conditions. These include employment
          levels, interest rates, consumer confidence and housing demand. Changes
          in these conditions significantly affect the demand for aluminum. Over
          the years, the cyclical nature of the demand for aluminum has decreased
          with the increase in the importance of more stable industries, such
          as packaging.
      
      Aluminum producers
          are not able to adapt to short-term fluctuations in demand by stopping
          and starting aluminum production due to the nature of the production
          process and the heavy costs this would imply. On the other hand, aluminum
          can be easily stored. In the medium term, mismatches in supply and demand
          resulting from the startup of new production operations may also affect
          the market.
        Prices of
          aluminum as quoted on the LME may likewise be affected by participants
          in the aluminum trading markets anticipating the market impact of developments
          in the industry and the world economy and by speculative trading in
          the aluminum markets. Sensitivity
    of the Groups Industrial Operations to Fluctuations in Aluminum Prices Primary
    Aluminum With respect
          to aluminum prices, the pricing of most commercial transactions is linked
          to the LME. Therefore, fluctuations in LME aluminum quotations directly
          impact Aluminum revenues and earnings.
        The Group
          estimates that, on a consolidated basis, its sales to third parties
          of primary aluminum and aluminum semi-finished products contributing
          directly to its Earnings from Operations are approximately 876,000 metric
          tons per year, excluding sales by affiliates accounted for under the
          equity method. Of this amount, a large majority is accounted for by
          sales of primary aluminum on which the Group is fully exposed to any
          change in the price of aluminum, except to the extent it is partly offset
          by certain costs, principally electricity, which are indexed on LME
          aluminum quotations. This
      
      slightly reduces
          the degree to which the Groups operating results are directly
          exposed to LME fluctuations.
        Since 1995,
          the Group has implemented a policy to reduce its exposure to fluctuations
          in the market price of aluminum. This policy consists of:
        not entering
            into long-term and medium forward sales contracts except on a limited
            basis where special circumstances warrant such treatment (e.g., project
            financing);
          occasionally
            covering the risk of an aluminum price decrease by entering into put
            options, having recourse to such options only at satisfactory cost
            and aluminum price levels.


95


»Operating
  and Financial Review and Prospects  Other
    Industrial Activities In order to
          reduce their exposure to fluctuations in the market price of aluminum,
          Aluminum Conversion activities and Cebal either enter into aluminum
          purchase contracts which match their respective sales contracts or use
          commodity hedge instruments (principally aluminum forward purchase and
          sale contracts) (see "Item 4. Information on the Company -Dependence
          on the Economic Environment").
        On the basis
          of the open positions of all the Groups industrial companies on
          aluminum hedge instruments as of December 31, 2002, Pechiney
      
      believes
          that an immediate and adverse 10% movement in the price of aluminum
          would have an adverse impact of approximately € 23 million on the
          fair value of such instruments. Since the Groups objective in
          entering into these contracts is to cover its purchase and sale transactions,
          this adverse impact would offset all or some of the positive effect
          of changes in aluminum prices on the contracts being covered. Sensitivity
    of the Groups Trading Operations to Fluctuations in Metal Prices The Groups
          results of operations from trading activities conducted by International
          Trade are influenced by fluctuations in metal prices. In connection
          with its activities, International Trade purchases and sells forward
          and futures contracts as well as options for the purchase and sale of
          metal, both on organized exchanges (principally) and in over-the-counter
          transactions with counterparties. In addition, it operates within specific
          risk limits, which attenuate sensitivity to metal prices.
      
      On
          the basis of the Groups trading activities exposure to fluctuations
          in metal prices as of December 31, 2002, International Trade estimates
          that an immediate and adverse 10% fluctuation in the price of each metal
          in which it deals would have a cumulative adverse impact of approximately
          € 4.7 million on the aggregate fair value of its contracts. Derivative
    Financial Instruments In order to
          reduce the Groups exposure to the risks of currency and interest
          rate fluctuations, the Group manages the hedging operations of its principal
          subsidiaries, to the extent permitted by local laws, on a central basis
          through its treasury department. The Group uses various derivative financial
          instruments, such as rate and currency swaps, collars, caps and forward
          rate agreements, to hedge currency and interest rate fluctuations on
          assets, liabilities and future commitments, in accordance with guidelines
          established by Pechineys Executive Committee. All foreign exchange
          and interest rate derivative instruments are either quoted on recognized
          exchanges or represent over-the-counter transactions with
      
      highly rated
          counterparties. Income or loss on these instruments is accounted for
          in the same manner and period as the loss or income on the hedged transaction.
          If, in very limited cases, the instruments do not constitute a hedge,
          they are marked to market with the income or loss immediately recorded
          in the statement of income (see "Notes 1(l) and 19 to the Consolidated
          Financial Statements").
        The Groups
          positions on derivative financial instruments are managed using various
          techniques, including fair value approach, sensitivity analysis and
          impact on consolidated results of operations.


96


»Operating
          and Financial Review and Prospects
      Item
          5 Currency
    Fluctuations For the fiscal
          year ended December 31, 2002, Pechineys consolidated financial
          statements were prepared in euros. The Group operates in many geographic
          regions (notably France, the rest of Europe and North America) and many
          currencies (see "Note 22(b) to the Consolidated Financial Statements").
        Approximately
          58% of Pechineys Consolidated Net Sales in 2002 were generated
          by subsidiaries located outside of France, primarily in North America
          and in other countries whose currencies are linked to the U.S. dollar.
          In addition, a substantial portion of Aluminum Net Sales are denominated
          in U.S. dollars or linked to the U.S. dollar as well as in currencies
          other than the euro and are sensitive over time to changes in exchange
          rates. Because a majority of Pechineys Consolidated Net Sales
          are generated in foreign currencies, currency fluctuations have a significant
          effect on Pechineys consolidated financial results of operations.
          The two primary effects are:
        the effect
            on the results of operations of those subsidiaries that incur costs
            in currencies not linked to the U.S. dollar while all or part of their
            revenuesare denominated in or determined by reference to the U.S.
            dollar;
          to a lesser
            extent, the effect on translations into euros of revenues, costs and
            values of assets and liabilities in other currencies to be reported
            in Pechineys consolidated statements of income and balance sheets.In general,
          an appreciation of the euro relative to other currencies has an adverse
          effect on the translation into euros of the Net Sales and Income (Loss)
          from Operations generated in foreign currencies. Conversely, this effect
          is offset by reductions in the value in euros of the costs, interest
          expenses and depreciation and tax charges incurred in foreign currencies.
          Similarly, an appreciation of the euro relative to other currencies
          has an adverse effect on the translation into euros of the value of
          assets denominated in foreign currencies, with this negative effect
          being offset by the positive effect of reductions in the euro value
          of liabilities denominated in foreign currencies. Such translation effects
          are greatest at the level of Net Sales and Earnings from Operations
          and are progressively less at the levels of Income (Loss) from Operations,
          Income (Loss) Before Income Tax and Net Income (Loss). The Group attempts
          to reduce its sensitivity to the translation effects of currency fluctuations
          by financing assets located in foreign countries with debt denominated
          in the corresponding local currency.
        A significant
          portion of the Groups consolidated indebtedness is denominated
          in foreign currencies, particularly U.S. dollars. As of December 31,
          2002, net consolidated indebtedness totaled € 1,437 million, of
          which approximately € 345 million was denominated in U.S.
          dollars (without accounting for hedging operations).
        The average
          exchange rates for 2002, 2001 and 2000 were € 1.00 = $ 0.94,
          $ 0.90 and $ 0.92, respectively. The depreciation of the U.S. dollar
          vis-à-vis the euro between 2001 and 2002 had a negative effect
          on the Groups
      
      consolidated
          results of operations when translated into euros.
        The Groups
          policy is to cover the commercial foreign exchange risks of its subsidiaries
          on exports and imports by systematically hedging firm commitments of
          less than one year, at the time customers orders are recorded,
          through centralized risk management. Hedging of exposure on commitments
          of more than one year may be undertaken with the approval of the members
          of the Companys Executive Committee. The principal currencies
          for which the Group hedges are, in order of importance, the U.S. dollar,
          the British pound and the Japanese yen (see "Note 19 to the Consolidated
          Financial Statements").
        The aggregate
          amount of derivative foreign exchange instruments handled by the Groups
          treasury department and its principal subsidiaries represents on average
          $32.7 billion per year with respect to covering various exchange rate
          guarantees granted by the Company to its operating subsidiaries. Although
          from time to time the Group purchases or sells currencies forward to
          hedge currency risk in liabilities or receivables, the Groups
          policy is not to take speculative positions through forward currency
          contracts. In 2002, 2001 and 2000, the Group did not experience significant
          gains or losses as a result of its hedging activities through the use
          of derivative foreign exchange instruments. The Groups strategies
          to reduce exposure to fluctuations in exchange rates have made it possible
          to mitigate, but not eliminate, the positive or negative impact of such
          fluctuations.
        The Company
          has utilized a sensitivity approach to determine the maximum potential
          one-day loss, on the basis of the Groups aggregate exposure to
          foreign exchange rate fluctuations as of December 31, 2002. The method
          used includes all foreign exchange derivative instruments as well as
          all debt, accounts receivable and accounts payable denominated in its
          principal foreign currencies (U.S. dollar and British pound). Anticipated
          transactions (including firm commitments) denominated in such currencies
          which certain of these derivative instruments are intended to hedge
          were excluded from the sensitivity analysis. The estimated maximum potential
          one-day loss in fair value of these instruments resulting from an adverse
          10% fluctuation in the U.S. dollar and British pound is € 17 million.
          However, since the Group utilizes currency sensitive derivative instruments
          for hedging anticipated foreign currency transactions (including firm
          commitments), a loss in the fair value of these instruments is generally
          offset by an increase in the fair value of the underlying anticipated
          transactions.
        Fluctuations
          in the value of other currencies do not materially affect Pechineys
          consolidated results.


97


»Operating
  and Financial Review and Prospects Interest
    Rate Fluctuations Approximately
          38% of the Groups financial debt is indexed on variable interest
          rates. This results in exposure to interest rate fluctuations which
          the Group hedges by using interest rate derivative instruments.
        Taking into
          account the effect of hedging instruments, the interest rate payable
          on approximately 51% of the Groups indebtedness is variable.
        Fees and
          interest rate spreads are accounted for as financial income or expense
          over the life of the relevant instruments.
      
      On the basis
          of average interest rates prevailing at the end of 2002 and of its aggregate
          exposure to interest rate fluctuations, taking into account all market
          sensitive debt and derivative interest rate instruments, the Company
          estimates that a 1% increase in interest rates, used as a reference
          for euro and dollar denominated borrowings, would increase the Groups
          annual financial expense by approximately € 9 million.  Research
    and Development Research and
          development activities are conducted at the central R&Dlaboratory
          in Voreppe, France, and at six specialized laboratories (alumina,primary
          aluminum production, ferroalloys, tubes and aerosols and flexiblepackaging)
          located in France and the United States.
      
      The following
          table sets forth information regarding Pechineys researchcenters, their division and location.  Sector
      Division
      Research
        centerAluminum
      Bauxite
         Alumina
      CRG
        Gardanne (France)Aluminum
        Metal
      LRF
        St-Jean-de-Maurienne (France)(primary
        aluminum)Packaging
      Tubes
        Aerosols Europe
      CRM
        Sainte-Menehould (France)Tubes
        Aerosols USA
      Washington,
        N.J. (USA)Plastic
        Packaging
      NTC
        Neenah, Wis. (USA)Techpack
      Centre
        dInnovation Chevilly Larue (France)Group
        R&D
      Pechiney CRV
      CRV
        Voreppe (France)  The Groups
          research and development expenses totaled € 90 million in2002, € 97 million in 2001 and € 90 million in 2000.Research and development projects are managed by the corporatedivisions.
          Placed under the responsibility of operating managers, they areconducted in cooperation with the Groups customers and production
          units.Approximately
          80% of these projects are integrated into industrialprograms and 20% are dedicated to maintaining and developing expertiseand
          promoting exploratory investigation.
        Codevelopment,
          which is intrinsic to packaging, has also become the rulein
          aluminum. Pechiney conducts research programs with its majorcustomers
          in aerospace, automotive and packaging markets. Examplesinclude:
        the development
            of new alloys to meet the requirements of newaerospace programs such as Airbuss A380;
          the development
            of new applications for automobile bodies and structural parts in
            the automotive industry with the main manufacturers and European subcontractors;
      
      the definition
            of new alloys with a much longer service life for use in heatexchangers (Evalife ®).All these
          developments require resources and new skills in order torecognize
          and anticipate customer needs better. The Voreppe ResearchCenter
          therefore acquired the following equipment and expertise in 2002:
        a press
            to bend aluminum sections to meet the needs of automotivemanufacturers and subcontractors;
          a scientific
            supercalculator which is capable of conducting 64 billionoperations per second (13 times more powerful than the previousmodel) and accessible online from Group facilities; it is used to
            studymechanical
            resistance, shock absorption and corrosion resistance;
          greater
            expertise in design and calculation for automotive and aerospaceapplications.In environmental
          protection, further efforts were accomplished in 2002:
        continued
            research on new inert materials for use in an alternative processes
            to replace carbonaceous anodes in electrolysis cells;


98


»Operating
          and Financial Review and Prospects
      Item
          5  new odorless
            rolling oils and new effluent processing solutions to limit the use
            of kerosene and reduce scrap;
          new varnishes
            for can stock to reduce the consumption of chemical products and scrap
            at the Neuf Brisach facility;
          new initiatives
            to recycle the aluminum contained in packaging and waste from automobile
            crushing and demolition operations by using new optical sorting technology.
      
      Finally, Pechiney
          pursued its active participation in European projects. In particular,
          it was the leader of two projects launched in 2002:
        AGEFORM
            on the forming during tempering of heavy and thin plate for aerospace
            applications;
          ALUMOPLA
            on the development of injection molds for plastic.For information
          relating to the Companys patents, see "Item 4 - Information on
          the Company - Intellectual Property". Divestitures Direct
    Divestitures In 2002, Pechiney
          did not itself undertake any divestitures, which would have significantly
          modified the Groups scope of consolidation or the extent of its
          activities.  Indirect
    Divestitures In April 2002,
          Almet, a Group subsidiary specialized in the distribution of semi-finished
          aluminum and stainless steel, sold its equity interest in Etablissements
          Lafay et Cie, based in Sassenage, France, and specialized in the manufacture
          of signing and signaling plates, particularly for the construction and
          automotive (license plate) sectors.
        In May 2002,
          Cebal, a Pechiney subsidiary, sold its equity interest in its Finnish
          subsidiary Cebal Printal Oy, which owns an aluminum tube and aerosol
          production facility at Hanko, in the south of Finland, through a management
          buyout (MBO). The former subsidiary took back its original name (Printal
          Oy) and kept all its aluminum tube equipment and related activities
          in the Scandinavian market. In aerosols, its second manufacturing focus,
          Printal Oy is expected to continued to work closely with Cebals
      
      aerosols division
          by providing technical and development assistance and production subcontracting.
          Some of the aerosol equipment is planned to be acquired by Cebals
          aerosols division, particularly for its new plant in Velim, Czech Republic,
          the construction of which began in September 2001. The facility is now
          operational. While avoiding job loss at the Finnish plant, this divestiture
          is an example of Cebals strategy to focus on a number of optimized
          facilities.
        On October
          23, 2002, Techpack Deutschland, a German subsidiary of the Techpack
          division, sold its equity interest in the German companies Kaesmacher
          Verwaltung and Kaesmacher GmbH, specialized in the manufacture of packaging
          products for the cosmetics market. Acquisitions At the beginning
          of 2002, Pechiney Plastic Packaging, Inc., Pechineys North American
          subsidiary, acquired Phnix Healthcare Products, specialized in
          flexible packaging for the medical sector. Phnix Healthcare operates
          a plant in Milwaukee, Wisconsin, where it manufactures a diversified
          range of products, including packaging for surgical gloves, hospital
          jackets and gowns, catheters, syringes, bandages and other medical and
          hospital equipment. This acquisition expands the line of products offered
          by the Healthcare and Specialty unit of the Groups Pechiney Plastic
          Packaging division.
        On February
          4, 2002, Pechiney announced the acquisition of the German
      
      company Alufin
          GmbH Tabularoxid, specialized in the production of tabular alumina by
          high temperature sintering. This firm operates from its production base
          in Teutschenthal, near Leipzig, with an annual capacity of approximately
          18,000 metric tons, a figure which will soon be doubled. This acquisition
          should allow Pechiney to penetrate a new market for the technical alumina
          produced by its subsidiary Aluminium Pechiney in Gardanne, France -
          high performance refractories. This operation is expected to strengthen
          the position of Gardannes Altech technical alumina business, which
          is a leader in Europe with an annual capacity of approximately 340,000
          metric tons. In addition to refractories, Altec specialty alumina is
          used to make ceramics, tile and enamel and in polishing.


99


» Operating
  and Financial Review and Prospects On
          April 2, 2002, Pechiney announced the signing of a letter of intent
          with the local partners Dubai Investments PJSC and Al-Ghurair LLC to
          create a new aluminum thin foil rolling facility in the Emirate of Dubai.
          It is expected that Pechiney will be the operator of the new company
          (Emiroll), in which it would have a 30% equity interest. It is also
          contemplated that the new facility would use Pechineys state-of-the-art
          continuous casting and rolling technology. Construction of the new plant
          is scheduled to begin once the agreement will have been finalized, and
          the facility should be operational some two years later. It would have
          an annual capacity of approximately 33,000 metric tons of aluminum foil,
          thin foil and rolls for the local market and export.
        In
          July 2002, the Groups International Trade division, Pechiney World
          Trade (PWT) acquired the Belgian distribution company S.A. De Cleene
          -Vereecken, with positions in the Benelux market for cast products,
          which is specialized in the sale of consumable goods (resins, refractories,
          inoculants and nodularizers), capital goods and spare parts (molding
          machines and dust removal installations). It is expected that this acquisition
          will allow PWT to bolster, within Pechiney Belgium, the distribution
          of PEM casting products in Benelux and to extend the scope of its commercial
          and technical expertise in casting throughout northern Europe.
        On
          September 17, 2002, the Techpack division signed an agreement with the
          aim to allow it to strengthen its presence in South East Asia by acquiring
          the cosmetics assets of the Indonesian group Tiger, a recognized specialist
          in plastic injection, coating and metalizing, with which Techpack has
          worked closely for more than ten years through its Promotions and Accessories
          business. It is expected that the acquisition vehicle will be based
          in Semarang on the island of Java and named Techpack Asia; Techpack
          would own a 95% equity interest and the remaining 5% would be held by
          the present owners of Tiger, who would become part of the executive
          management of Techpack Asia. This operation should provide Techpack
          with a major industrial base in Asia for makeup cases, lipstick and
          beauty cream jars in the divisions Promotions and Accessories
          business, with competitive facilities for short and medium runs. This
          operation should also enable Techpack to increase its penetration of
          the South East Asian market, which is very profitable in the areas of
          makeup
      
      and personal
          care. This agreement remains subject to certain conditions precedent
          to the closing of the transaction. Within the framework of this operation,
          the equity interest in the joint venture PT Cosmetech Tigermandiri Packaging
          was sold to the Indonesian partner.
        On October
          23, 2002, Pechiney announced the signing of a preliminary agreement
          for the acquisition by Pechiney of the aluminum conversion activities
          of the British-Dutch group Corus. The planned acquisition was defeated
          by the supervisory board of Corus' Dutch Subsidiary, which decision
          was upheld by the Amsterdam Enterprise Court on an appeal brought by
          the management board of Corus Group plc. As a consequence, Corus Group
          plc is required to pay Pechiney an agreed break-up fee of € 20
          million, according to its contractual obligations.
        In December
          2002, Pechiney Emballage Flexible Europe, a Group subsidiary, acquired
          Avenir Print Service (APS), based at Montreuil Bellay (France), which
          operates a recent facility specialized in the production of plastic
          film for pharmaceuticals and cosmetics. This acquisition should facilitate
          the integration into the Group of a business that is a leader in short
          runs for cosmetics samples and promotional items as well as pharmaceutical
          pouches. It should enable the business acquired to benefit from synergies
          with the Groups research and development and marketing and sales
          teams in packaging for the healthcare and beauty sector. It should also
          lead to a strengthened position in Europe for this segment of the Groups
          packaging activities in the market for short runs.


100


»Operating
          and Financial Review and Prospects
      Item
          5 Other
    operations In April 2001,
          Pechiney Aluminium SPV, a wholly-owned Group subsidiary, signed an Investment
          and Liquidation Agreement with CVG Bauxilum, a subsidiary of the Venezuelan
          national holding company Corporacion Venezolana de Guyana. This agreement,
          which involves technical, commercial, financial and management support
          aspects, concerns modernization and increased output at the Bauxilum
          bauxite (at Los Pijiguados) and alumina (at Puerto Ordaz) production
          complex in Venezuela. The project targets a durable increase in the
          facilitys annual production of alumina from 1.7 million metric
          tons to 2 million metric tons and, at the same time, compliance with
          environmental standards. The project would be financed through Pechineys
          sale of the supplemental aluminum production. 45% of the basic engineering
          necessary for the realization of the project has been completed. The
          agreement took effect as of December 23, 2002. It also contemplated
          to complete a feasibility study on an expansion of the facility to increase
          production from 2 million to 3 million metric tons of aluminum.
        In December,
          2002, Pechiney announced, through its subsidiary Aluminium Pechiney,
          the signing of an agreement with the South African company Eskom for
          the long-term supply of electricity to an aluminum smelter in the industrial
          development area of Coega, near Port Elizabeth, South Africa. This agreement
          is an important step towards the construction of a new aluminum smelter
          using AP50 technology developed by Aluminium Pechiney, and opens the
          way to more advanced discussions with the South African government and
          provincial authorities, potential partners and local governments. Such
          advanced discussions remain a perequisit to the realization of a project
          to build a new aluminum smelter using AP50 technology in South Africa.
          In addition to the electric power made available locally, the discussions
          precedent to the realization of such a project particularly pertain,
          whatever the country concerned, to the conditions locally proposed to
          welcome the project and the possibilities offered in terms of port infrastructures
          and road and rail connections. This initiative reflects Pechineys
          consistent strategy - as a leader in smelting technology, to promote
          and operate new smelters using AP50 technology in the coming years and
          to ensure that its needs in alumina are covered. In 2002, the technical
          development teams achieved their objective of
      
      ensuring stable
          operation of AP50 cells at very high intensity (500,000 amperes), with
          sufficient experience to envisage the study and construction of a first
          industrial unit with a future annual production capacity of at least
          460,000 metric tons This new technology aims to reduce per-ton investment
          costs by 15% and is also more environmentally friendly.
        On April
          29, 2002, Pechiney and its partners in the Tomago aluminum smelter (in
          which Pechiney has an equity interest of 51.55%, Gove 36.05% and Hydro
          Aluminium 12.4%) announced they had approved a project to augment the
          facilitys production capacity by upgrading the productivity of
          the electrolysis cells (Pechiney AP18 technology) through an increase
          in the electric intensity utilized from 194,000 to 225,000 amperes.
          The project, which would provide for the production of supplemental
          metal in the form of ingots, aims to increase the smelters production
          from 460,000 to 530,000 metric tons per year. An initial increase in
          tonnage is planned for 2004, and the objective of 530,000 metric tons
          is scheduled for 2006. All the partners in this joint enterprise have
          approved the project, but Gove must decide by November 2003 whether
          it will participate. If this partner decides not to participate the
          other two partners, Pechiney and VAW will share the corresponding supplemental
          tonnage, proportionally to their respective equity interests in the
          joint venture.
        On May 1,
          2002, Pechiney finalized the acquisition of certain assets of McCook
          Metals, a North American company based near Chicago, Illinois. The assets
          so purchased are mainly industrial equipment for the manufacture of
          heavy plate for the aeronautic market and industry. This equipment is
          expected to make it possible to accompany a future rise in the need
          for capacity by the Groups Aerospace Transport Industry division
          in these markets. The assets thus acquired also include industrial casting
          equipment for the production of aluminum lithium sheets and billets
          for the aeronautic, aerospace and defense markets. This industrial equipment
          should enable the division to strengthen its relations with large customers
          in North America in these sectors.


101


» Operating
  and Financial Review and Prospects


102


»Directors,
          Senior Management and Employees
      Item
          6 Directors
    and Senior Management Board
    of Directors For
          a discussion of certain powers of the directors of the Company, see
          "Item 10 - Additional Information - Memorandum and Articles of Association
          - Directors".
        The
          Companys by-laws provide that the Board of Directors must be composed
          of no fewer than 11 and no more than 22 directors. The Companys
          Board of Directors currently consists of 12 directors: nine directors
          were elected by the Shareholders at the meeting held on March 28, 2002.
          Anne Lauvergeon whose appointment to the Board of Directors was renewed
          by the Shareholders at the March 28, 2002 meeting, resigned on December
          16, 2002. The other three current directors were elected by the employees
          of the Groups French companies on June 11, 2002. They officially
          took up their posts on July 24, 2002 at the first meeting of the Board
          following the announcement of the results of their election (in accordance
          with article 15 (A) 2 of the by-laws).
        The
          Board of Directors cannot increase the number of members of the Board.
          Each director must be a Shareholder of the Company and, according to
          the Companys by-laws, hold at least 200 Shares. Under French law,
          a director may be an individual or a corporation, but the Chairman must
          be an individual. The Companys by-laws provide that each director
          shall serve for a term of office of four years. Directors serve until
          the expiration of their respective terms, or until their resignation,
          death or removal, with or without cause, by the Shareholders. The Board
          of Directors may, under certain conditions, fill vacant seats on the
          Board for directors elected by the Shareholders pending the next Shareholders
          General Meeting. Except as may otherwise be provided by a companys
          by-laws, French law requires that no more than one-third of the directors
          be over 70 years old.
      
      Under
          French law, the role of the Board of Directors is to determine the orientations
          of Pechineys activities and to oversee their implementation. Except
          for those powers expressly reserved under the law for the Shareholders
          General Meeting or the Chairman and Chief Executive Officer, or the
          Chief Executive Officer if his or her duties are not assumed by the
          Chairman of the Board of Directors, and within the limits of the purpose
          of the Company, the Board of Directors takes up all questions involving
          the smooth working of the Company and settles all issues concerning
          the running of the Company. It carries out the monitoring it considers
          appropriate. Generally, the Board of Directors makes all of those decisions,
          which fall under its domain by virtue of law, current regulations or
          by the by-laws of Pechiney. Meetings of the Board of Directors of the
          Company are normally convened and presided over by the Chairman, who
          is elected by the Board of Directors among its members.
        A
          quorum of the Board of Directors consists of the presence of one-half
          of its members and decisions are taken by a vote of the majority of
          the members present or represented by other members of the Board of
          Directors. Pursuant to the by-laws, the Chairman has the ability to
          cast a deciding vote. A director may give a proxy to another director
          but a director cannot represent more than one other director at any
          particular meeting. Members of the Board of Directors represented by
          another director at meetings do not count for purposes of determining
          the existence of a quorum.
        Under French
          law,directors are liable for violations of French legal or regulatory
          requirements applicable to sociétés anonymes ,violations of the Company
          's by-laws or mismanagement.Directors may be held liable for such actions
          both individually and jointly with other directors.


103


» Directors,
  Senior Management and Employees Board
    of Directors  Members
    of the Board of Directors The Board
          of Directors is currently composed of 12 directors, of which 9 directors
          were appointed by the shareholders on March 28, 2002(1)and
          3 directors were elected by the employees of Pechineys French
          companies(2).
      
      The following
          table sets forth the names of the current directors of the Company,
          their principal occupation or employment, the dates of their initial
          appointments and the number of Common Shares "A" they held as of December
          31, 2002.  Name
        (age)
      Principal
        Occupation or Employment
      Initially
          Appointed
      
      Number
          of
          Common Shares "A" held(3)
          (4)Jean-Pierre
        Rodier (56)
      Chairman
        and Chief Executive Officer, Pechiney
      1994
      
      (5)2,038François
        Ailleret (66)
      President,
        AFNOR and Honorary Chief Executive
      1996
      
      210Officer,
        Electricité de FranceEtienne
        Davignon (71)
      President,
        Compagnie des Wagons-Lits et de Sibeka,
      1996
      
      205and
        Vice President, Société Générale de BelgiqueJean-François
        Dehecq (63)
      Chairman
        and Chief Executive Officer,
      1994
      
      410Sanofi-SynthélaboGermaine
        Gibara (59)
      President,
        AVVIO Management Inc.
      2002
      
      250Jean-Paul
        Jacamon (56)
      Independent
        Consultant, and non-executive
      2002
      
      250director,
        AMEC plc.Yves
        Mansion (52)
      Chairman
        and Chief Executive Officer,
      1994
      
      1,250Société
        Foncière LyonnaiseBaudouin
        Prot (52)
      Director
        and Deputy Chief Executive
      1994
      
      551Officer,
        BNP ParibasH.
        Onno Ruding (64)
      Vice
        Chairman and director, Citibank
      1996
      
      207Members elected by Employees(2):Gérard
        Bouvier (56)
      Production
        technician at the Pechiney
      2002
      
      (5)708Rhenalu
        factory in Cran-Gevrier (Annecy)Antoine
        Nordberg (53)
      Operations
        director of Pechiney Trading Company
      2002
      
      (5)209Tony
        Zanello (43)
      Product
        development assistant at the Pechiney
      2002
      
      (5)200Electrométallurgie
        factory in Château Feuillet (1)
      Mrs.
        Anne Lauvergeon, whose appointment to the Board was renewed by the shareholders
        on March 28, 2002, resigned as a director of Pechiney on December 16,
        2002.(2)
      These
        directors took up their posts on July 24, 2002, the date of the first
        meeting of the Board of Directors held after the announcement of the results
        of their election (Article 15(A)2
        of Pechineys by-laws). (3)
      As
        at December 31, 2002. Pursuant to Article 16 of the by-laws, each director
        must own at least 200 Common Shares "A" for the duration of his term of
        office.(4)
      The
        beneficial shareholdings of each member of the Board of Directors (including
        any outstanding options to purchase Shares) represent less than 1% of
        Pechineys CommonShares
        "A".(5)
      Common
        Shares "A" held either directly or through the Groups employee mutual
        investment fund (FCPE).


104


»Directors,
          Senior Management and Employees
      Item
          6  Antoine Bied-Charreton,
          General Counsel, serves as the secretary of the Board of Directors and
          the Boards committees (see "- Corporate Governance" below).
        Jean-Pierre
          Rodierhas been Chairman of the Board of Directors since July 1994; he has
          held the title of Pechineys Chairman and Chief Executive Officer
          since March 28, 2002 (see "- Executive Officers" below). He also chairs
          three associations (Eurometaux; Entreprises pour lEnvironnement;
          Entreprise & Personnel). He can be contacted at 7, place du Chancelier
          Adenauer, 75116 Paris (France).
        François
          Ailleretis Chairman of the Board of Directors of AFNOR (France), Honorary Officer
          of Electricité de France (France), and a director of Pechiney
          (France), EDF International (France), C.I.E. (Côte-dIvoire)
          and MIB (MBA de lENPEC) (France). He was previously Chairman of
          EDF International (France), and a director of Electricité de
          France (France), Edelfi (France), Lydec (Maroc) and SMEG (Monaco). He
          can be contacted at 151, boulevard Haussmann, 75008 Paris (France).
        Gérard
          Bouvieris a director of Pechiney (France) and a production technician at the
          Pechiney Rhenalu in Cran-Gevrier (France). He can be contacted at Pechiney
          Rhenalu, 74, avenue de la République, 74961 Cran Gevrier (France).
        Etienne
          Davignonis President of Compagnie des Wagons-Lits (Belgium), SIBEKA (Belgium)
          and of the Palais des Beaux-Arts (Belgium). He is Vice President of
          Société Générale de Belgique (Belgium),
          Umicore (Belgium), Petrofina (Belgium), Fortis (Belgium), Tractebel
          (Belgium) and Accor (France). He is a director of Pechiney (France),
          Sofina S.A. (Belgium), Solvay S.A. (Belgium), Recticel (Belgium), Compagnie
          Maritime Belge (Belgium), Suez (France) and Gilead (United States).
          He is also a member of the supervisory board of BASF (Germany). He was
          previously Vice President of Arbed (Luxembourg) and a director of Sidmar
          (Belgium) and Anglo American (United Kingdom). He can be contacted at
          30, rue Royale, 1000 Bruxelles (Belgium).
        Jean-François
          Dehecqis Chairman and Chief Executive Officer of Sanofi-Synthélabo
          (France) and President and representative director of Sanofi-Synthélabo
          Daiichi Pharmaceuticals Co. Ltd (Japan). He is also a director of Pechiney
          (France), Air France (France), Finance et Management (France), Financière
          Yves Rocher (France) and Laboratoires Daiichi Sanofi-Synthélabo
          (France), permanent representative of Sanofi-Synthélabo at the
          Board of Sanofi-Synthélabo Recherche (France), and a director
          of Fusijawa Sanofi-Synthélabo (Japan) and Sanofi-Synthélabo
          Inc. (United States). He was previously a director of Balmain (Belgium).
          He can be contacted at 174, avenue de France, 75635 Paris Cedex 13 (France).
        Germaine
          Gibarais President of AVVIO Management, Inc. (Canada). She is also
          a director of Pechiney (France), Sun Life (Canada) and Corel Corporation
          (Canada). She was previously a director of Clarica (Canada). She can
          be contacted at 1470 Peel Street, Suite 200, Montréal H3A ITI
          (Canada).
      
      Jean-Paul
          Jacamonis a director of Pechiney (France), Le Carbone Loraine (France) and
          STACI (France). He is also a non-executive director of AMEC plc (United
          Kingdom). He was previously a director of Rexecode (France). He can
          be contacted at 64, route de lEtang-la-Ville, 78750 Mareil Marly
          (France).
        Yves Mansionis Chairman and Chief Executive Officer of Société Foncière
          Lyonnaise (France). He is a director of Pechiney (France) and an alternate
          director of ERAP (Entreprise de Recherches et dactivités
          pétrolières) (France). He is also a member of the supervisory
          board of EULER (France) and Hermès (France). He was previously
          a director of Caisse Centrale de Réassurance (France). He can
          be contacted at 9, rue Montorgueil, 75001 Paris (France).
        Antoine
          Nordbergis a director of Pechiney (France) and Operations director at Pechiney
          Trading Company. He can be contacted at Pechiney Trading Company, Chamerstrasse
          52, 6300 Zug (Switzerland).
        Baudouin
          Protis Director and Deputy Chief Executive Officer of BNP Parisbas (France).
          He is Chairman of the Board of Directors of BNP Paribas E3 (France).
          He is a director of Pechiney (France) and BNP Intercontinentale (France),
          and a member of the supervisory board of Pinault-Printemps-Redoute (France)
          and Cetelem (France). He is also permanent representative of BNP Paribas
          at the Board of Accor (France). He was previously Chairman of the Board
          of Directors of Compagnie Immobilière de France (France), a member
          of the supervisory board of Fonds de Garantie des Dépôts
          (France) and permanent representative of BNP Paribas at the Board of
          Directors of Banque Petrofigaz (France) and Answork (France). He can
          be contacted at 16, boulevard des Italiens, 75009 Paris (France).
        H. Onno
          Rudingis Vice-Chairman and director of CITIBANK (United States). He is a director
          of Pechiney (France), Corning Inc. (United States), and RTL Group (Luxembourg).
          He is also International advisor of Robeco Group NV (The Netherlands).
          He was previously a director of Unilever N.V. (The Netherlands) and
          Unilever Plc (United Kingdom). He can be contacted at 263g boulevard
          Général Jacques, 1050 Bruxelles (Belgium).
        Tony Zanellois a director of Pechiney (France) and Préparateur Bureau de
          Méthodes (Product development assistant) at the Pechiney Electrométallurgie
          factory in Château Feuillet. He can be contacted at Pechiney Electro-métallurgie
          factory in Château-Feuillet, 73260 Aigueblanche (France).
        Of these 12
          Board members, three do not have French citizenship.


105


»Directors,
  Senior Management and Employees Executive
    Officers In its March
          28, 2002 meeting, the Board of Directors decided, in accordance with
          the second paragraph of article L. 225-51-1 of the French Commercial
          Code, that the general management of the Company is assumed by the Chairman
          of the Board of Directors, acting as Chief Executive Officer, under
          the title of Chairman and Chief Executive Officer (Président
          Directeur Général).
          As a result, the Chairman and Chief Executive Officer of Pechiney:
        in his
            capacity as Chairman is responsible for representing Pechineys
            Board of Directors, organizing its work and presenting it to the Shareholders
            General Meeting, ensuring the proper operation of the various corporate
            bodies of the Company and ensuring, in particular, that
      
      directors
            are able to fulfill their tasks;
          in his
            capacity as Chief Executive Officer, has all powers under French law
            to act on behalf of the Pechiney and represent the Company toward
            third parties, within the limits imposed by applicable laws and regulations.The following table
        sets forth the names of the executive officers of the Company and their
        responsibilities within the Group as of February 1, 2003. Each of these
        executive officers is a member of the Groups Executive Committee. Name
        (Age)
      Responsibility
      Member
        of Executive Committee SinceJean-Pierre
        Rodier (56)
      Chairman
        and Chief Executive Officer(2)
      1994Christel
        Bories (39)
      Packaging
        Sector (Food, Healthcare and Beauty).
      1998Also
        supervises ProcurementsGilles-Pierre
        Lévy (56)
      Human
        Resources
      1995Olivier
        Mallet (47)
      Chief
        Financial Officer.
      2001Also
        supervises International Trade(3)Jean-Dominique
        Senard (50)
      Primary
        Aluminum Sector (Bauxite-Alumina, Aluminium Metal, Ferroalloys).
      1996Also
        supervises Energy, Environment and Industrial Safety and Information SystemsPierre
        Vareille (46)(1)
      Heads
        the Aerospace, Transport and Industry Division
      2002and
        from July 1, 2003, the Aluminium Conversion Sector(2)Philippe
        Varin (49)
      Previously
        Head of Aluminum Sector (Primary Aluminum,
      1999Aluminium
        Conversion and International Trade)(4).Currently
        advisor to the Chief Executive Officer. (1)   Since
        December 13, 2002.(2)
      Jean-Pierre
        Rodier temporarily headed the Aluminium Conversion Sector from February
        1, 2003 until June 30, 2003.(3)
      Since
        February 1, 2003.(4)   Until
        January 31, 2003.


106


-Directors,
          Senior Management and Employees
      Item
          6  Christel
          Boriesis a graduate ofHautes
          Etudes Commerciales.
          In 1986, she joined Booz Allen & Hamilton as a consultant. From
          1987 to 1993 she was a consultant and then manager of Corporate Values
          Associates. From 1993 to 1995, she was Senior Vice-President of Strategy
          and Control and member of the Executive Committee of Union Minière
          (Belgium). She joined Pechiney in April 1995 as Senior Vice-President
          of Strategy and Control, and Secretary to the Executive Committee. In
          1998 she became Executive Vice-President, member of the Executive Committee.
          Since January 1, 1999, she has been in charge of the Packaging Sector
          of Pechiney. She also supervises the Companys General Procurement
          activities.
        Gilles-Pierre
          Lévygraduated from theEcole
          Nationale dAdministration.
          He began his career at the Cour des Comptes in 1973. From 1978 to 1980,
          he worked at the Ministry of Industry, where he was successively Deputy
          Director of Hydrocarbons, Deputy Director General of Industry and Director
          of General Administration. In 1993, he became Director General of Administration
          and Finance at the Ministry of Industry, Post Office and Telecommunications.
          In 1995, Mr. Lévy became the head of Pechineys Human Resources
          division. He is a member of the Executive Committee.
        Olivier
          Malletis a graduate of theEcole
          Nationale dAdministrationand Institut
          des Sciences Politiques.
          He began his career in 1981 as anInspecteur
          des Finances.
          He held various positions from 1988 to 1993 as counselor to the Minister
          of Finance, Minister of Budget and Prime Minister. He joined Thomson
          Multimedia in 1993 as General manager in charge of Planning, then became
          Vice-President in charge of Planning and Control and from 1995 to 2001
          was Chief Financial Officer and member of the executive commitee. He
          joined Pechiney in May 2001. He has been the Companys Chief Financial
          Officer since June 2001 and also supervises the International Trade
          Sector.
        Jean-Dominique
          Senardbegan working with the Pechiney Group as Chief Financial Officer and
          member of the Executive Committee on October 1, 1996. He is a graduate
          ofHautes
          Etudes Commerciales.
          Mr. Senard began his career with the French oil company Total as controller
          at its financial headquarters. He then was appointed Manager of Financial
          Risks within Totals Treasury Department. He joined the Saint-Gobain
          Group in 1987 and was appointed Group Treasurer in 1989 and, in 1995,
          Financial Director for Saint-Gobain in Germany and Central Europe and
          member of the Management Committee of the glass manufacturing company
          VEGLA GmbH. He is in charge of Pechineys Primary Aluminum Sector
          and supervises the Companys Energy, Environment and Industrial
          Safety and Information Systems departments.
      
      Pierre Vareilleis a graduate of the EcoleCentrale
          de Paris,
          an engineering school, and theInstitut
          dEtudes Politiques de Paris.
          He also holds various degrees in Economics and Finance (Sorbonne University).
          Mr. Vareille worked for 13 years in the Vallourec Group (steel and titanium
          tubes for high-tech industries) as an engineer, and then as a general
          manager of several subsidiaries mainly involved in the aerospace and
          automotive industries. In 1995 he became President then CEO of GFI Aerospace,
          a company specialized in fasteners for Aerospace and High Tech industries
          based in Europe, the USA and China. He joined Faurecia in 1999 as a
          member of the Executive Committee and served as the CEO of the Exhaust
          Systems Business Group, the world leader for exhaust systems for the
          automotive industry. Since 2002, Pierre Vareille has served as Senior
          Vice President of the Aerospace, Transportation and Industry Division
          of Pechiney. From July 1, 2003, he will be in charge of the Aluminium
          Conversion sector of Pechiney.
        Philippe
          Varin,
          a graduate ofEcole
          PolytechniqueandEcole
          des Mineshas
          spent his entire career with the Pechiney Group. As a researcher from
          1978 to 1980, then as Vice-President, Engineering and Research, from
          1984 to 1988, he contributed to the design and development of aluminum
          smelters. From 1981 to 1983, he was in charge of strategic studies for
          the aluminum branch. In 1989, Mr. Varin was appointed Project Director
          for the construction of the aluminum smelter in Dunkerque (France).
          As Managing Director of Aluminium Dunkerque from 1990 to 1992, he achieved
          the plants start-up. In 1993, he became Group Financial Controller,
          based first in Paris and then from 1994 in Chicago at American National
          Cans headquarters. In 1995, he became Vice-President of the Rhenalu
          division, one of Europes leading producers of aluminum mill products.
          In March 1999, Mr. Varin was appointed Senior Executive Vice-President
          of the Aluminum Sector and a member of Pechineys Executive Committee.
          He currently advises the Chief Executive Officer.
        Fabienne
          Herlaut, in charge of Strategy, has served as secretary of the Executive
          Committee since September 1, 2000.
        As of December
          31, 2002, the current members of the Groups Executive Committee
          held 14,968 Common Shares "A" directly or through the Groups employee
          mutual investment fund (FCPE).
        Each member
          of the Executive Committee beneficially owns Common Shares "A", although,
          in each case, these shareholdings (including any outstanding options
          to purchase Shares) represent less than 1% of Pechineys Common
          Shares "A".


107


» Directors,
  Senior Management and Employees Corporate
    Governance The Board
          of Directors has taken certain measures to improve the efficiency of
          its work, following the recommendations on corporate governance issued
          in July 1995 and July 1999 by the commission chaired by Mr. Marc Viénot,
          and in the September 2002 report (Bouton Report)
      
      issued by
          the French working group set up by AFEP-AGREF and MEDEF and chaired
          by Mr. Daniel Bouton, and taking also into account the corporate governance
          rules in force in the United States as of December 31, 2002. Functioning
    of the Board of Directors The Board
          of Directors adopted in March 1996 internal rules (under the form of
          arèglement
          intérieur)
          regarding its functioning and setting forth the rights and obligations
          of the directors, beyond those imposed by applicable laws and regulations.
          The Board amended its internal rules in March 2002, so as to permit
          the participation of directors in certain of its meetings by videoconference,
          within the limits set forth in paragraph 2 of article L. 225-37 of the
          French Commercial Code. It was then amended in January 2003, mainly
          to take into account the recommendations outlined in the Bouton Report
          on the one hand and the corporate governance rules in force in the United
          States at December 31, 2002.
      
      The Board
          of Directors met five times in 2002. On average, more than 10 of the
          12 directors attended these meetings. Its internal rules now require
          a minimum of five meetings per year, including one during which its
          internal functioning and achievements, as well as those of its specialized
          committees, are assessed. See "- Specialized Committees of the Board
          of Directors" below.
        The internal
          rules reinforce the directors access to information necessary
          to perform their task, in particular for the directors who are not executive
          officers or employees of the Group, and impose confidentiality obligations
          going beyond the obligation of secrecy imposed by art. L. 225-37 of
          the French Commercial Code. Powers
    of the Board of Directors In accordance
          with applicable law and Pechineys by-laws, the Board of Directors
          determines the orientations of Pechineys activities and oversees
          their implementation. Within the limits of the corporate purpose of
          the Company and without prejudice to the powers expressly assigned by
          law, regulations or its by-laws to decisions to be made at shareholders
          meetings or by the Chief Executive Officer, it addresses all questions
          and makes all decisions relating to the Companys affairs. It undertakes
          all controls and verifications it deems appropriate. As a general matter,
          the Board of Directors makes all decisions and uses all powers to which
          it is entitled pursuant to applicable laws and regulations or Pechineys
          by-laws.
      
      In addition,
          the Boards internal rules provide that the Board must be consulted
          prior to certain transactions (acquisition or divestitures for an amount
          equal to, or higher than, €100
          million, loan for an amount equal to, or higher than,€ 300
          million, except if through an issuance of debt instruments). It also
          mandates the consultation of the Board prior to any significant transaction
          that would diverge from the Companys activity orientations determined
          by the Board of Directors.


108


»Directors,
          Senior Management and Employees
      Item
          6 Members
    of the Board of Directors The Boards
          internal rules set forth the conditions that a director has to meet
          to be considered independent. These conditions for determining independence
          are based on the recommendations of the Bouton Report and the corporate
          governance rules in force in the United States as of December 31, 2002.
          Those conditions may be summarized as follows:
        A director
          is independent if:
        he is not,
            and has not been during the past five years: (i) an executive officer
            or employee of a company of the Group, (ii) associated with a statutory
            auditor of Pechiney or (iii) an employee of a company that does not
            belong to the Group and has set up an appointment and compensation
            committee (or the equivalent thereof) of which an executive officer
            or employee of the Group is a member;
          he has
            no relationship whatsoever with Pechiney, its executive officers or
            any of its direct or indirect subsidiaries which could impair his
            independence and does not receive any compensation from any company
            of the Group other than directors attendance fees;
          he does
            not own or manage, alone or in concert with others, more than 10%
            of Pechineys share capital or voting rights at shareholders
            meetings;
          he has
            not been a director of Pechiney for more than 12 years.
      
      The definition
          of director independence in the Boards internal rules may not
          be entirely consistent with the definition of independence proposed
          by the SEC for audit committee members on January 8, 2003, which would
          prohibit both indirect and direct payments of consulting, advisory or
          other compensatory fees to audit committee members as well as bar affiliated
          persons of the issuer from serving on the audit committee.
        As of January
          29, 2003, the 12 members of Pechineys Board of Directors can be
          grouped into the following three categories:
        the Chairman
            is an executive officer of the Group (Jean-Pierre Rodier);
          eight members
            qualify as independent directors in accordance with the conditions
            set by the internal rules of the Board (François Ailleret,
            Etienne Davignon, Jean-François Dehecq, Germaine Gibara, Jean-Paul
            Jacamon, Yves Mansion, Baudoin Prot and H. Onno Ruding);
          three directors
            were elected by the employees of the French companies of the Group
            (Gérard Bouvier, Antoine Nordberg and Tony Zanello). Specialized
    Committees of the Board of Directors Three committees
          were created in March 1996 to assist the Board of Directors in carrying
          out its tasks: an Audit Committee, an Appointments and Compensation
          Committee and a Strategy and Development Committee. The Board of Directors
          internal rules set out the composition and the responsibilities of the
          Audit Committee and the Appointments and Compensation Committee.
        Audit
          Committee The Audit Committee
          of Pechineys Board of Directors, created in March 1996, is exclusively
          composed of independent directors, according to the definition of independence
          set by its internal rules (which may not overlap completely with the
          SEC definition recently proposed). It is currently composed of Messrs.
          Mansion, Prot (Chairman of the Committee) and Ruding.
        In January
          2003, the responsibilities of the Audit Committee were expanded to take
          into account both the recommendations in the Bouton Report as well as
          the new rules resulting from the Sarbanes-Oxley Act of 2002.
        The Audit
          Committee is primarily responsible for:
        analyzing
            the Groups annual financial statements as they are prepared,
            reviewing and issuing an opinion as to the adequacy of accounting
            principles and methods used, discussing the foregoing with the Groups
            statutory auditors and reviewing the Companys exposure to risks
            and Pechineys significant off-balance sheet commitments;
          reviewing
            with the Groups statutory auditors the nature, extent and results
            of the controls performed by the Companys statutory auditors,
      
      actively
            participating in the choice of the Companys statutory auditors
            proposed by the Board of Directors to the General Shareholders Meeting
            in relation to their appointment or renewal, as well as ensuring the
            compliance with regulations concerning the independence of the Companys
            statutory auditors and making recommendations regarding their compensation;
          ensuring
            the handling of claims, if any, received by Pechiney on one or another
            of these issues in accordance with the Sarbanes-Oxley Act.The Audit Committee
        is also responsible for reviewing internal audit procedures and advising
        on the organization of Pechineys Internal Audit Department. The
        role of this department is to ensure, at all the Groups facilities,
        that any situation not in conformity with the laws, regulations and internal
        rules of the Group is detected, that the Groups assets are protected
        and that operational risks are under control. In order to guarantee the
        independence of the Internal Audit Department in carrying out its tasks,
        its director is placed under the direct authority of the Chief Executive
        Officer, and reports directly to him as well as to the Audit Committee
        of the Board of Directors regarding the work completed by the Internal
        Audit Department. The intervention program of the Internal Audit Department
        is decided upon each year by Pechineys Executive Committee on the
        basis of a proposal made by the departments director, and then approved
        by the Audit Committee of the Board of Directors. A summary of the work
        completed by the Internal Audit Department is submitted each year to the
        Audit Committee of the Board of Directors, which interviews its director,
        assesses the resources necessary to carry out


109


» Directors,
  Senior Management and Employees its task and
          makes any comments and suggestions which it deems necessary.
        There were
          four meetings of the Audit Committee of the Board of Directors in 2002.
          During 2002, the Audit Committee primarily carried out a detailed analysis
          of the Groups annual and semi-annual financial statements and
          interviewed, at each one of these meetings, the Companys statutory
          auditors, the Companys Chief Financial Officer and the director
          of
      
      Pechineys
          Internal Audit Department. In addition, during 2002, this Committee
          reviewed the establishment of internal procedures in relation to Pechineys
          preparation of its annual report, which Pechiney makes available to
          its shareholders in France (document de référence) and
          the United States (Form 20-F), as those internal procedures (disclosure
          controls and procedures) are provided for by section 302 of the Sarbanes-Oxley
          Act of 2002. Nomination
    and Compensation Committee The Nomination
          and Compensation Committee of Pechineys Board of Directors, created
          in March 1996, is composed of a majority of independent directors fullfiling
          the conditions of independence set by its internal rules. It is currently
          composed of Mrs. Gibara and Messrs. Davignon and Dehecq (Chairman of
          the Committee). All three are independent directors in accordance with
          the internal rules.
        The responsibilities
          of the Nomination and Compensation Committee were also expanded to take
          into account both the recommendations of the Bouton Report, as well
          as the rules proposed by the New York Stock Exchange in addition to
          the Sarbanes-Oxley Act of 2002.
        The Nomination
          and Compensation Committee is responsible for:
        reviewing
            each year the personal situation of Pechineys directors in order
            to assess their independence (in acordance with the criteria of independence
            explained above in "Members of the Board of Directors");
          making
            recommendations to the Board of Directors regarding nominations of
            new directors of Pechiney or renewals of directors of Pechiney;
          making
            recommendations to the Board of Directors regarding compensation and
            retirements benefits for the Chairman and Chief Executive Officer;
          reviewing
            proposals regarding the establishment of stock option plans as well
            as issuing recommendations to the Board of Directors;
      
      advising
            the Chairman and Chief Executive Officer with respect to the appointment
            or replacement and compensation of other members of the Executive
            Committee.The Chairman
          and Chief Executive Officer may occasionally take part in the deliberations
          of the Nomination and Compensation Committee in respect of matters not
          related to his individual situation, although he is not a member of
          this committee.
        This committee
          met twice in 2002 to:
        issue a
            recommendation to the Board of Directors;
          propose
            to the Board of Directors the persons whose appointment or renewal
            as a director of Pechiney was submitted by the Board of Directors
            to the General Shareholders Meeting of March 28, 2002;
          issue a
            recommendation to the Board of Directors as to the membership of specialized
            committees;
          review
            a proposed stock option plan submitted for approval to the Board of
            Directors in March 2002;
          set the
            fixed base salary of the Chairman and Chief Executive Officer for
            2002 and his variable compensation paid in 2002 in respect of 2001;
          advise
            the Chairman and Chief Executive Officer on certain points relating
            to the personal situation of other members of Pechineys Executive
            Committee. Strategy
    and Development Committee The Strategy
          and Development Committee of Pechineys Board of Directors, created
          in June 1997, is composed of members of the Audit Committee (Messrs.
          Mansion, Prot and Ruding), members of the Nomination and Compensation
          Committee (Mrs. Gibara and Messrs. Davignon and Dehecq) and chaired
          by Pechineys Chairman and Chief Executive Officer. The purpose
          of the Strategy and Development Committee is to prepare, using
      
      thorough analysis,
          and to submit to the Board of Directors, proposals of long-term strategies
          for Pechiney and the other companies of the Group. The Strategy
          and Development Committee met once in 2002 to examine the continuation
          of certain actions of the Company pertaining to its internal and external
          growth, in particular, the main development projects in some of its
          principal lines of business.


110


»Directors,
          Senior Management and Employees
      Item
          6  The
    Supervisory Board of the Companys Employee Mutual Investment Funds (FCPE) Of the twenty
          members of the Supervisory Board (conseil
          de surveillance)
          of each employee mutual investment funds of the Company, through which
          employees of certain companies of the Group hold Common Shares "A",
          five members are chosen among the employees of such companies by the
          Chairman of the Board of Directors, while the fifteen other members
          are elected directly by the employees of the companies who hold Shares
          in the relevant FCPE. Prior to each Shareholders General Meeting,
          the Supervisory Board examines the proposed resolutions, and decides
          how
      
      the Chairman
          of the Supervisory Board will vote the Shares with respect to each resolution
          at the Shareholders General Meeting.
        The minority
          representation within the Supervisory Board, consisting of the employees
          appointed by the Chairman of the Board of Directors of Pechiney, helps
          to ensure the independence of the votes cast at Shareholders General
          Meetings of the Common Shares "A" held by the employees through the
          Companys employee mutual investment funds. Compensation
    of Directors and Officers Directors
    Compensation General
        At their
          general meeting on May 18, 1998, the Shareholders voted to set aside
          an annual aggregate of € 347,583.76 (i.e 2,280,000 French francs)
          per year as attendance fees until further notice for the compensation
          of the Companys directors.
        In March
          2002, the Board of Directors resolved to set individual compensation
          for attendance at meetings of the Board at a maximum of € 22,000
          (determined as described below). This amount is increased to a maximum
          of € 27,000 for directors who are also members of the Audit Committee
          or of the Nomination and Compensation Committee. The directors who chair
          the Audit Committee or the Nomination and Compensation Committee are
          each entitled to a maximum of € 32,000 for attendance. There is
          no additional compensation for members of the Strategy and Development
          Committee.
        At December
          31, 2002, directors eligible for compensation for attendance at meetings
          of the Board set at € 22,000 were Messrs. Aillerat, Jacamon, Nordberg
          and Zanello and Mrs. Gibara.
        At December
          31, 2002, members of the Audit Comittee or of the Nomination and Compensation
          Comittee were Messrs. Manson, Ruding and Davignon.
        Mr Prot is
          chairman of the Audit Comittee and Mr. Dehecq is chairman of the Nomination
          and Compensation Comittee.
        The Board
          of Directors also decided that the compensation to be paid for attendance
          by the directors would be paid as follows:
        one-half
            at a flat rate at the close of the first half of the year (including,
            if appropriate, the additional compensation due for the members and
            Chairman of the Audit Committee or Nomination and Compensation Committee);
      
      the remainder
            at the end of the year on the basis of actual attendance by the directors
            at meetings of the Board (and of the committees, for those who are
            members or Chairman).In accordance
          with these provisions, the various directors received the specific compensation
          amounts set forth in the table below.
        This resulted
          in the payment of an aggregate amount of € 323,601.59 in 2002,
          as compared with € 273,036.19 in 2001. The maximum authorized by
          the Shareholders Meeting amount is € 347,583.76.
        During 2002,
          the Company and the Group entered into agreements in the ordinary course
          of business with companies with which certain directors and officers
          of the Group are related parties, namely BNP Paribas and Assurances
          Générales de France and their respective subsidiaries.
          No agreement outside the ordinary course of business was entered into
          between the Group and Pechineys directors, between the Group and
          any of the above mentioned companies, between the Company and any of
          its Shareholders holding at least 5% of the voting rights of the Company
          or between the Company and any entity controlling such Shareholder.
        The annual
          compensation and all other advantages (in cash or in kind) paid by Pechiney,
          or by companies controlled by Pechiney, within the meaning of article
          L.233-16 of the French Commercial Code, to directors of the Company
          other than the Chairman of the Board of Directors were as follows for
          2002 (Article L. 225-102-1 of the French Commercial Code):


111


»Directors,
  Senior Management and Employees  (euros)
      Pechiney
      
      Companies
          controlled by Pechiney
        (within
          the meaning of article l.233-16
        of
          the french commercial code)Annual
      
      All
        other
      
      Annual
      
      All
        otherCompensation
      
      compensation
      
      Compensation
      
      compensationFrançois
        Ailleret
      19,800.00
      
      0.00
      
      0.00
      
      0.00Anthony
        Bouthelier(1)
      7,700.00
      
      0.00
      
      0.00
      
      0.00Gérard
        Bouvier(2)
      12,100.00
      
      0.00
      
      32,468.00
      
      0.00Pierre-Michel
        Chabaud(3)
      9,900.00
      
      0.00
      
      64,812.00
      
      0.00Etienne
        Davignon(4)
      23,142.86
      
      0.00
      
      0.00
      
      0.00Jean-François
        Dehecq(5)
      29,714.29
      
      0.00
      
      0.00
      
      0.00Germaine
        Gibara(6)
      19,800.00
      
      0.00
      
      0.00
      
      0.00Rainer
        E. Gut(7)
      7,700.29
      
      0.00
      
      0.00
      
      0.00Jean
        Paul Jacamon(8)
      19,800.00
      
      0.00
      
      0.00
      
      0.00Anne
        Lauvergeon(9)
      27,000.00
      
      0.00
      
      0.00
      
      0.00Yves
        Mansion(10)
      27,000.00
      
      0.00
      
      0.00
      
      0.00Albert
        Mastrot(11)
      9,900.00
      
      0.00
      
      30,307.00
      
      0.00Antoine
        Nordberg(12)
      12,100.00
      
      0.00
      
      123,165.00
      
      0.00Baudouin
        Prot(13)
      28,444.44
      
      0.00
      
      0.00
      
      0.00H.
        Onno Ruding(14)
      25,500.00
      
      0.00
      
      0.00
      
      0.00Gérard
        Ruffier(15)
      9,900.00
      
      0.00
      
      35,193.00
      
      0.00Tony
        Zanello(16)
      12,100.00
      
      0.00
      
      36,237.00
      
      0.00 (1)
      Director
        of Pechiney until March 29, 2002.(2)
      Employee
        of Pechiney Rhenalu. Director of Pechiney until July 24, 2002.(3)
      Employee
        of Pechiney Rhenalu. Director of Pechiney until March 29, 2002.(4)
      Member
        of the Appointments and Compensation Committee.(5)
      Chairman
        of the Appointments and Compensation Committee.(6)
      Director
        of Pechiney since March 28, 2002. Member of the Appointments and Compensation
        Committee since January 29, 2003.(7)
      Director
        of Pechiney until March 28, 2002.(8)
      Director
        of Pechiney since March 28, 2002.(9)
      Director
        and Member of the Audit Committee and the Appointments and Compensation
        Committee until December 16, 2002.(10)
      Member
        of the Audit Committee.(11)
      Research
        technician, Pechiney Research Center in Voreppe (CRV). Director of Pechiney
        until March 29, 2002.(12)
      Employee
        of Pechiney Trading Company. Director of Pechiney since July 24, 2002.(13)
      Member
        of the Appointments and Compensation Committee until March 28, 2002. Chairman
        of the Audit Committee since April 1, 2001.(14)
      Member
        of the Audit Committee since March 28, 2002.(15)
      Employee
        of Pechiney Electrométallurgie. Director of Pechiney until March
        29, 2002.(16)
      Employee
        of Pechiney Electrométallurgie. Director of Pechiney since July
        24, 2002. There are currently no directors service contracts with the Company or any of its subsidiaries providing for benefits upon termination of employment.


112


»Directors,
          Senior Management and Employees
      Item
          6 Compensation
    of the Chairman and Chief Executive Officer The Chairman
          and Chief Executive Officer generally receives a fixed base salary plus
          a variable amount of compensation which, for 2002, could not represent
          more than 60% of the base salary. This amount is composed of two parts:
        an individual
            part, dependent on the attainment of yearly goals;
          a collective
            part, dependent on the attainment of Group targets with respect to
            the budget, measured in terms of earnings from operations corrected
            for the impact of variations in the exchange rate of the dollar and
            in the price of aluminum.Each of these
          parts represents a maximum of 30% of the fixed base salary. The variable
          compensation for a fiscal year is determined at the end of each fiscal
          year by the Board of Directors acting on the recommendation of the Nomination
          and Compensation Committee. The gross base salary of the Chairman and
          Chief Executive Officer was fixed during the fiscal year 2002 at €
          690,000; the amount of variable compensation received by the Chairman
          in 2002 for the fiscal year 2001 totaled € 207,000. Moreover, the
          amount of
      
      directors
          fees received in 2002 by the Chairman with respect to his attendance
          at meetings of the Board of Directors totaled €22,000. The amount
          of directors attendance fees received by him is identical to the
          amount received by the other directors who are not members of a specialized
          committee of the Board, with respect to both the fixed portion thereof
          and the portion related to the number of meetings actually attended.
          The total amount of all other benefits received by the Chairman of the
          Board of Directors during the course of fiscal year 2002 totaled €
          4,391.
        In 2002,
          the Chairman and Chief Executive Officer received no compensation or
          particular advantages from companies controlled by Pechiney, within
          the meaning of article L. 233-16 of the French Commercial Code.
        There was
          no amount paid by the Company and its subsidiaries in 2002 to provide
          for pension, retirement or similar benefits for the members of the Board
          of Directors serving as at December 31, 2002 other than the legally
          required social and retirement expenses.
        Furthermore,
          the Chief Executive Officer benefits from a discretionary supplemental
          pension guaranteeing him a total income, inclusive of other pension
          plans, of 50% of the average of his total annual fixed and variable
          compensation over the past five fiscal years. Executive
    Officers Each member
          of the executive committee receives a fixed base salary plus variable
          compensation, which, for 2002, could not represent more than 60% of
          base salary. Variable compensation is composed of two elements: a maximum
          of 50% of the bonus is paid when financial indicators at the end of
          the year satisfy the Groups objective set by the executive committee
          at the beginning of the year; the other 50% is calculated on the basis
          of an individuals success in achieving personal objectives.
        In 2002,
          the aggregate compensation of the members of the Groups executive
          committee employed as at December 31, 2002 (seven members), amounted
          to € 3.196 million. Of this amount, € 2.449 million represented
          fixed base salaries and € 0.747 million variable compensation,
          linked to results of the fiscal year 2001 and the attainment of personal
          objectives. The corresponding amounts in 2001 (six members) were €
          2.14 million for fixed base salaries and € 0.48 million for variable
          compensation
      
      linked to
          results of the fiscal year 2000 and attainment of personal objectives.
        There was
          no amount paid by the Company and its subsidiaries in 2002 to provide
          for pension, retirement or similar benefits for the Chief Executive
          Officer and the members of the executive committee employed as at December
          31, 2002 other than the legally required social and retirement expenses.
           Furthermore, the members
          of the Executive Committee benefit from a discretionary supplemental
          pension guaranteeing them a total income, inclusive of other pensions
          plans, equal to a percentage of the average of their last total annual
          compensations.
        At December
          31, 2002, seven members of the executive committee held options to subscribe
          for or purchase Common Shares "A" granted by the Board of Directors
          in 1996, 1997, 1998, 1999, 2000, 2001 and 2002 (See Note 12 to the Consolidated
          Financial Statements). These options represent rights to subscribe for
          or purchase 845,609 Common Shares "A".


113


» Directors,
  Senior Management and Employees Options
    to Purchase Securities General
        The options
          granted by Pechiney in 2002 consist of options to purchase Common Shares
          "A". These options were granted by the Board of Directors on March 28,
          2002 pursuant to the authorization given by the twelfth resolution of
          the Shareholders General Meeting held on March 29, 2001. The beneficiaries
          of these options, numbering 449 at December 31, 2002, of these options
          are executives or "high potential" managers of the Group. As in previous
          years, these options were granted by the Board of Directors following
          the recommendations of the Nomination and Compensation Committee and
          represent at December 31, 2002 a total of 915,500 options to purchase.
          The options granted in 2002 are in general exercisable for six years
          starting on the fourth anniversary of the date of grant. Beneficiaries
          having a tax residence in the United States at the time of the exercise
          may also cumulatively exercise up to one-fourth of the options as from
          the first anniversary of the attribution date, one-half as from the
          second anniversary of the attribution date and three-fourths as from
          the third anniversary of the attribution date.
        Pursuant
          to each of the Companys existing option plans, the exercise prices
          range between € 26.69 and € 60.06 (after adjustment pursuant
          to the rights provided for by Article 174-12 and 174-13 of Decree No.
          67-236 of March 23, 1967 due to the payment of a dividend from reserves
          in accordance with the fifth resolution of the Shareholders Meeting
          of March 30, 2000), and the options are exercisable at the end of an
          initial period of three, four or five years, as applicable, prior to
          which times they cannot be exercised (unless they are declared exercisable
          earlier by the Board of Directors or, starting in 2001, in specific
          cases as decided by the Board of Directors or in the case where the
          beneficiaries have their tax residence in the United States at the time
          of exercise). Options are generally valid only if the recipient remains
          an employee of the Group.
        The total
          number of Shares that may be issued upon the exercise of subscription
          options granted by the Company between January 1, 1996 and December
          31, 2000 and outstanding at December 31, 2002 totaled 2,489,150 Common
          Shares "A" (after adjustment pursuant to the rights provided for by
          Article 174-12 and 174-13 of Decree No. 67-236 of March 23, 1967 due
          to the payment of a dividend from reserves). The total number of Shares
          that may be purchased upon exercise of options granted by the Company
          starting on January 1, 2001 and outstanding at December 31, 2002 totaled
          995,800 Common Shares "A". None of the beneficiaries of Pechineys
          stock option plan, including the Groups directors and executive
          officers, hold options that would, in combination with any Shares they
          already own, entitle them to beneficially own 1% or more of any class
      
      of Pechiney
          Shares. The detailed characteristics of all the options granted to purchase
          the Companys Shares are described in Note 12 to the Consolidated
          Financial Statements.
        The options
          that may be exercised at December 31, 2002 are those granted on June
          26, 1996, June 27, 1997 and September 16, 1997. These options have been
          exercisable since June 26, 1999, June 26, 2000 and September 16, 2002,
          respectively, by each relevant beneficiary, up to the total number of
          options respectively granted to each of them. Added to these are the
          subscription options granted on December 22, 2000 and the purchase options
          granted on July 25, 2001, which have been exercisable since December
          23, 2002 and July 26, 2002, respectively, by beneficiaries having their
          tax residence in the United States at the time of exercise, in an amount
          up to one-half the number of options granted (in the case of the December
          22, 2000 options) and in an amount up to one-fourth (in the case of
          those granted on July 25, 2001). The total number of exercisable rights
          outstanding at December 31, 2002 totalled 722,344 subscription options
          and 825 purchase options.
        32,216 new
          Common Shares "A" were issued through the exercise of options during
          2002. In 2002, a total of € 999,340.32 was received by the Company
          as payment for these new Shares, of which € 491,294 represented
          an increase in capital and € 508,046.32 represented an issuance
          premium. In accordance with the provisions of Article L. 225-178 of
          the French Commercial Code, the Board of Directors, on January 29, 2003,
          at its first meeting following the end of the fiscal year 2002, took
          notice of the amount and par value of the Shares issued in 2002 and
          made the necessary modifications to the by-laws of the Company relating
          to the amount of share capital and the number of Shares representing
          such capital. The Board of Directors noted that, during the fiscal year
          2002, the share capital of the Company was increased by € 491,294,
          from € 1,257,842,371.75 to € 1,258,333,665.75. On December
          31, 2002, the share capital was represented by a total of 82,513,683
          Shares (of which 81,422,639 Common Shares "A" and 1,091,044 Preferred
          Shares "B") with a par value of € 15.25 each.
        Directors
        The Chairman
          of Pechineys Board of Directors is one of the beneficiaries of
          options to subscribe for Common Shares "A" granted by the Board of Directors
          in 1996, 1997, 1998, 1999, 2000 and 2002. The amount of Common Shares
          "A" that may be subscribed to or purchased through the exercise of the
          options granted to him is set forth below. At the date hereof, none
          of these options have been exercised.


114


»Directors,
          Senior Management and Employees
      Item
          6  Plan
        of June 26, 1996
      20,509
          Common Shares "A" may be subscribed for until June 25, 2006 at a per
          Share priceof
          € 31.02. (of which 10, 254 vested from June 26, 2002);Plan
        of June 27, 1997
      15,382
          Common Shares "A" may be subscribed for until June 25, 2007 at a per
          Share price of € 29.25;Plan
        of September 16, 1997
      35,890
          Common Shares "A" may be subscribed for at a per Share price of €
          38.14 betweenSeptember
          16, 2002 and September 5, 2007;Plan
        of May 18, 1998
      15,382
          Common Shares "A" may be subscribed for at a per Share price of €
          41.27 betweenMay
          19, 2003 and May 18, 2008;Plan
        of June 2, 1999
      71,779
          Common Shares "A" may be subscribed for at a per Share price of €
          37.47 betweenJune
          3, 2004 and June 2, 2009;Plan
        of December 22, 2000
      100,000
          Common Shares "A" may be subscribed for at a per Share price of €
          46.35 betweenDecember
          23, 2005 and December 22, 2010; andPlan
        of March 28, 2002
      75,000
          Common Shares "A" may be purchased at a per share price of € 59.84
          betweenMarch
          29, 2006 and March 28, 2012.  No options
          to subscribe for or purchase Shares were granted to any other executive
          officers of the Company.
        Options
          granted to non-executive officer employees of the Company
        The following
          table sets forth the number and average purchase or
      
      subscription
          price of the options to purchase Common Shares "A" grantedby
          the Board of Directors in 2002 (See "Note 12 to the ConsolidatedFinancial
          Statements") to the 10 non-executive officer employees whoreceived
          the greatest number of options among employees of theCompany
          and subsidiaries included in the options program:  Plan of that may be purchased
        upon exercice
      Number
          of Common Shares "A"
          per Common Share "A"
      
      Average
          Purchase PriceMarch 28, 2002
      190,300
      
      € 59.84


115


»Directors,
  Senior Management and Employees The following
          table sets forth the number and average price of the options to purchase
          or subscribe for Common Shares "A" granted since 1996 by the Board of
          Directors (See Note 12 to the Consolidated Financial Statements) which
          were exercised by the 10 individuals who as at
      
      December 31,
          2002 were non-executive officer employees who exercised the greatest
          number of options among employees of the Company and subsidiaries included
          in the options program:  plans
        of
      Number
          of CommonShares
          "A" acquired
      Average
          purchase orsubscription
          price
          perCommon
          Share "A"June
        26, 1996
      7,150
      
      € 31.02June
        27, 1997
      -
      
      -September
        16, 1997
      -
      
      -May
        18, 1998
      -
      
      -November
        25, 1998
      -
      
      -June
        2, 1999
      -
      
      -November
        8, 1999
      -
      
      -December
        22, 2000
      -
      
      -July
        25, 2001
      -
      
      -March
        28, 2002
      -
      
      - No company of the Group other than Pechiney has granted in 2002, or in previous years, options to purchase Shares.


116


»Directors,
          Senior Management and Employees
      Item
          6 Employees Employees
    by Geographic Region, Business Segment, and Professional Category The following
          table sets forth, by geographic region and business sector, the number
          of employees of the Groups consolidated companies over the last
          three years.  employees
        by geographic region as of December 31(1)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)France
      16,898
      
      17,198
      
      16,150Rest
        of Europe
      6,613
      
      6,745
      
      5,441North
        America
      6,679
      
      7,965
      
      7,412Asia/Pacific
      1,064
      
      1,035
      
      934Rest
        of World
      2,746
      
      1,577
      
      1,360Total
      34,000
      
      34,520
      
      31,297 (1) Not
    adjusted to reflect changes in the Groups structure. employees
        by business segment as of December 31(1)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)Primary
        Aluminium
      6,495
      
      6,151
      
      5,877Aluminium
        Conversion
      7,967
      
      8,254
      
      7,653Packaging
      16,154
      
      16,494
      
      14,142Feroalloys
        and Other Activities
      2,153
      
      2,427
      
      2,433International
        Trade
      770
      
      808
      
      848Holdings
      461
      
      386
      
      344Total
      34,000
      
      34,520
      
      31,297 (1) Not
    adjusted to reflect changes in the Groups structure. The reduction
          in overall headcount in 2002 compared with 2001 does not represent the
          net effect of changes in the Groups scope of consolidation. Acquisitions
          of companies by the Group during 2002 resulted in a slight increase
          in headcount, although this was more than offset by headcount reductions
          resulting from disposals during the year.
        This reduction
          resulted principally from improvements in productivity and from adjustments
          reflecting the economic situation. The principal workforce reductions
          took place primarily in the lamination segment in the United States
          (Pechiney Rolled Products), the extrusions and casting
      
      alloys segment
          in Europe (Pechiney Aviatube and Pechiney Aviatube UK), the cosmetics
          packaging segment in the United States and the ferroalloys segment in
          France.
        In contrast,
          the workforce increased in primary aluminum due to sales techniques
          and the preparation of the AP 50 project.
        The following
          table sets forth, by geographic region, the breakdown of employees by
          professional category.


117


»Directors,
  Senior Management and Employees Employees
        by professional category as of December 31, 2002
      France
      
      Other
          countries
      
      Group
          totalEngineers
        and management
      11%
      
      8%
      
      9%Technicians
      16%
      
      10%
      
      13%Other
        employees
      15%
      
      15%
      
      15%Plant
        workers
      58%
      
      67%
      
      63% Labor
    Policy A significant
          percentage of the Groups employees in Europe and the United States
          are members of labor unions. As required by French and European law,
          the Companys management holds annual meetings with a delegation
          of French union representatives and a delegation of employee representatives
          of Group entities in Europe in order to respond to questions regarding
          the Groups economic and employment situation. Management also
          conducts other meetings with employee representatives (for a description
          of employee representation on the Board of Directors of the Company,
          see "- Board of Directors").
        Significant
          events involving labor relations during 2002 were as follows:
        in early
            2002, the last of the employee demonstrations took place relating
            to the discontinuation of magnesium production in 2001;
          in the
            second half 2002, a new collective bargaining agreement was signed,
            for a validity of two years, between the management and the Pechiney
            rolled products division at Ravenswood.
      
      In January
          2003, three French subsidiaries of the Group undertook an information
          gathering mission in which they consulted with representatives of their
          employees on new industrial restructuring plans, which could result
          in the suppression of approximately 600 jobs. The sites which potentially
          could be impacted are:
         Aluminium
          Pechiney in Auzat and Sabart (Ariège) and the central business
          headquarters for Casting Alloys;
        Pechiney
            Softal in Aubagne (Bouches du Rhône);
          Lir-France,
            a subsidiary of Techpack International, in Avallon (Yonne) and Provins
            (Seine et Marne).Implementation
          of the restructuring plans has been underway from April through October
          2003, and production has been terminated or transferred to other plants.
          The related employment terminations have been ongoing since April 2003
          and are expected to be completed in early 2004, at the end of the relevant
          notice and outplacement period. For further information, see "Item
          4. Information on the Company - Recent Developments." Profit
    Sharing Plans In accordance
          with the regulation (ordonnance) No. 86-1134 of October 21, 1986 concerning
          profit- sharing plans, almost every French company of the Group has,
          over the past few years, entered into or renewed profit sharing agreements
          with their employees. Such arrangements allocate a portion of the profits
          to employees based partly on financial results and partly on specific
          performance criteria, such as cost reduction and quality of products
          or services provided to the customer. The employees share of the
          profits may be invested in various employee mutual funds included in
          the Groups employee shareholding plans.
      
      The employees
          share of the profits that is invested in the employee shareholding plans
          of the Pechiney Group, as well as personal investments in such employee
          shareholding plans by employees, benefit from an additional contribution
          by the Company.
        The following
          table sets forth the payments made by the Group pursuant to the different
          profit sharing plans during the last five years:  (in millions
          of €)
      (1)2002
      
      2001
      
      2000
      
      1999
      
      1998Profit sharing
      21.2
      
      16.9
      
      16.8
      
      21.6
      
      27.0Participation
      3.3
      
      4.9
      
      5.5
      
      6.4
      
      5.0Financial
          contribution of the group
      0.8
      
      0.8
      
      (2)1.6
      
      (2)0.8
      
      (2)1.4 (1)
      Forecast.(2)
      Including
        the financial contribution of the Group to the acquisition of Pechiney
        Shares by its employees (Action 2 program from 1998 to 2000).


118


»Directors,
          Senior Management and Employees
      Item
          6  A performance
          management program, applicable since 1997 to the entire management team
          of the Group, aims at increasing the focus of the management on specific
          targets. The program includes bonus payments that vary depending on
          individual and collective performance. The amount of bonuses paid in
          2002 for the year 2001 totaled €10 million for the French companies
          in the Group, i.e., an average of 9% of the fixed compensation of the
          relevant managers. In the United States, such variable compensation
      
      may be much
          more significant. For a manager at the level of factory manager or higher,
          variable compensation may represent approximately 40% of fixed compensation.
        Some employees
          also benefit from stock options plans or "Stock Appreciation Rights"
          (see Note 12 to the Consolidated Financial Statements). Employee
    Shareholding Employee
          Share Subscription and Purchase Program
        Action
          2 Since September
          1998, within the framework of the system established by regulation (ordonnance)
          No. 86-1134 dated October 21, 1986, the Company has offered a program,
          called Action 2, for employees of the Groups French companies
          with at least six months of service which gives them the opportunity
          to purchase Common Shares "A" on Euronext Paris. These purchases occur
          at the beginning of each quarter within the framework of the Companys
          shareholding plan (articles L. 443-1 et seq. of the French Labor Code).
        In
          order to allow employees to optimize their investment and to minimize
          related transaction costs for both Pechiney and the employees, employees
          invest through the Groups employee mutual investment funds, established
          within the framework of the Groups employee shareholding plans.
        Employee
          participation in Action 2 is generally accompanied by financial incentive
          in the form of a cash contribution from the employer, which is added
          to the personal investment made by the employee. In 2000, this employer
          contribution amounted to 35% of the employees personal investment
          up to € 1,219.60, and 20% if the employees investment was
          between € 1,219.61 and € 4,573.47. The amount of the employer
          contribution is capped at € 1,097.63 per employee per year.
        The Action
          2 program, as well as its proposed extension to other European countries
          where the Group operates, was suspended provisionally in 1999. Action
          2 was restarted in 2000.
        Capital
          Increases Reserved to Employees During fiscal
          year 2001, Action 2 was again suspended to permit a capital
      
      increase
          consisting of an investment program and a leveraged investment plan
          aimed at the employees of the countries where the Group operates. This
          transaction took place in accordance with articles L. 225-138-.IV. of
          the French Commercial Code and L. 443-5 of the French Labor Code, after
          adoption of the thirteenth resolution by the Shareholders General
          Meeting on March 29, 2001. Pechiney also set up various Group shareholding
          plans under the provisions of articles L. 443-1 et seq. of the French
          Labor Code to complement the shareholding plan already in effect.
        Employees
          of the Company and its direct and indirect subsidiaries located in France,
          Greece, Mexico, Spain, Italy, the Netherlands and the United Kingdom,
          in accordance with article L. 444-3 of the French Labor Code, were able
          to participate in the shareholding plan through one of two formulas
          proposed. Employees of the Groups subsidiaries in Germany and
          the United States were able to participate in the plan through the traditional
          investment formula.
        In
          total, 855,277 new Common Shares "A" were issued, of which 736,325 Common
          Shares "A" were issued under the leveraged investment formula and 118,952
          Common Shares "A" under the traditional investment formula. These new
          Shares were issued at a price per Share of € 45.65 (i.e.,
          an issuance premium of € 30.40 per Share purchased). These Shares
          were subscribed either directly or through the intermediary of the Groups
          mutual investment funds (FCPE Actions Pechiney, FCPE Levier Actions
          Pechiney, FCPE Pechiney Classic, FCPE Pechiney Leverage and FCPE Pechiney
          Leverage Italia).
        All of these
          employee mutual investment funds are regulated by articles L. 214-24
          and L. 214-40 of the French Financial and Monetary Code (Code monétaire
          et financier) and are registered with the COB. This capital increase
          was completed on January 24, 2002. Employee
    Participation in the Capital of the Company At
          December 31, 2002, the total number of Common Shares "A" held by the
          employees of the Group totaled 2,051,394 (in addition to Common Shares
          "A" purchased through stock options), representing at December 31, 2002
          approximately 2.48% of the capital and 2.64% of voting rights. This
          number includes not only those Shares held by the Companys employees
          within shareholding plans set up by the Company (pursuant to article
          L. 443-1 through L. 443-9 of the French Labor Code) or through the Companys
          mutual investment funds but also those Shares directly held by employees
          that were acquired pursuant to the privatization law and that are currently
          freely transferable.
      
      As
          required under article L. 225-102 of the French Commercial Code, the
          Company has indicated that at December 31, 2002, the number of Shares
          held by employees of the Group within the framework of shareholding
          plans set up by Pechiney in accordance with articles L. 443-1 through
          L. 443-9 of the French Labor Code, or through the Companys employee
          mutual investment fund, totaled 1,726,531 Common Shares "A", representing
          at December 31, 2002 approximately 2.09% of the share capital of Pechiney
          and 2.22% of the voting rights at Pechiney Shareholders meetings.


119


»Directors,
  Senior Management and Employees


120


»Major
          Shareholders and Related Party transactions
      Item
          7 Major
    Shareholders Information regarding the Companys major shareholders and changes in the Companys shareholding during the past three years is set forth in Note 12 to the Consolidated Financial Statements. The following table sets out to the best of the Companys knowledge the Shareholders holding more than 5% of Pechineys stock capital at December 31, 2002: Common
      
      %
          of Share
      
      (1)%
          of VotingShares
          "A"
      
      Capital
      
      RightsFranklin
        Resources, Inc.(2)
      5,396,777
      
      6.54%
      
      6.94%AGF
        Assurances
      5,081,067
      
      6.16%
      
      6.53%Fidelity
        investments(3)
      4,179,328
      
      5.06%
      
      5.37% (1)   Consistent
        with local law, no voting rights attach to 982,669 Common Shares "A" held
        by Pechiney Nederland N.V., 1,163,642 Common Shares "A" purchased by the
        Company in 2000, 1,394,254 Common Shares "A" and 14,099 Preferred Shares
        "B" purchased by the Company in 2001 and 1,162,274 Common Shares "A" purchased
        by the Company in 2002.(2)
      Shares
        held by Franklin Resources, Inc. and its affiliates, including Templeton
        Worldwide Inc., and through investment funds and client accounts managed
        by Franklin Resources, Inc.(3)
      FMR
        Corp and Fidelity International Ltd, on behalf of funds managed by their
        subsidiaries.  In
          February 2000, Electricité de France sold all of its Common Shares "A"
          of the Company which,at December 31,2001,amounted to 6,321,990 shares
          representing 7.75% of outstanding share capital and 8.10% of voting
          rights as of that date.
        As
          at January 29,2003,date of a meeting of the Board of Directors, Pechiney
          had not been notified of a change in the percentage ownership of the
          major shareholders listed above.
        There
          is no group of stable shareholders,the entire share capital of the Company
          (with the exception of Shares held by the Group or its employees) being
          considered floating.See Note 12 to the Consolidated Financial Statements.
          
          Shareholders holding more than 5%of the Company 's capital stock do
          not have different voting rights.
        As
          at January 29,2003,date of a meeting of the Board of Directors,no shareholders
          ' agreement regarding its share capital had been notified to the Company.
        There
          is no arrangement known to the Company, the operation of which may at
          any subsequent date result in a change of control of Pechiney. Pechiney
          is not directly or indirectly owned or controlled by another corporation,
          by any government or any other natural or legal person.
      
      To
          Pechineys knowledge, at December 31, 2002, 5,136,002 ADRs representing
          2,568,001 Common Shares "A" were held in the United States through the
          Depositary by approximately 900 beneficial owners and 162 registered
          holders. In the United States, there were 279 record holders of the
          Common Shares "A" and, to the best knowledge of the Compagny no holders
          of the Preferred Shares "B" at December 31, 2002. Pechiney estimates
          that between 35% and 45% of its Common Shares "A" are held by U.S. persons.


121


»Major
  Shareholders and Related Party Transactions Related
    Party Transactions In the ordinary
          course of business, the Group engages in transactions with various organizations
          in which certain of the Companys directors and officers are interested,
          including BNP Paribas and Assurances Générales de France
          and their respective affiliates. These transactions were entered into
          on an arms length basis in accordance with the Companys
          business practices.
        None of the
          individual transactions concluded during fiscal year 2002 between the
          Group and any one of its directors or organizations in which such directors
          may be interested, or between the Group and any of its significant shareholders,
          or organizations which may control such shareholders, are considered
          by the Company to be material.
      
      In addition,
          Pechiney has cash pooling arrangements with a number of its subsidiaries.
        At December
          31, 2002, the Company had no outstanding loans to directors, executive
          officers or significant shareholders.


122


»Financial
          Information
      Item
          8 Consolidated
    Statements and Other Financial Information See
          "Item 18. Financial Statements" for a list of the financial statements
          filed with this document.
        Total
          export sales (outside of France) for the Group for the year ended
      
      December
          31, 2002 amounted to € 6.9 billion, which represented approximately
          58.3% of total Group sales. See "Item 4. Information on the Company
          - Selected Consolidated Financial Data." Legal
    Proceedings Pechiney
          is involved in various routine legal proceedings, including tax proceedings,
          incidental to the ordinary course of its business. Management believes
          that the outcome of all legal pending legal and tax proceedings will
          not have a significant effect on Pechineys financial condition
          or results of
      
      operations,
          with the exception of the potential consequences of the proceedings
          described in "Item 4. Information on the Company - Legal Proceedings." Dividend
    Policy The
          declaration and amount of dividends to be paid on the Shares in respect
          of any period are subject to the decision of the Companys shareholders
          at an Ordinary General Meeting. Pursuant to French law, the payment
          of dividends must be made within nine months following the end of the
          fiscal year to which they relate.
        Under
          French law and the Companys by-laws, the Companys net income
          in each fiscal year, as increased or reduced, as the case may be, by
          any profit or loss of the Company carried forward from prior year years
          less any contributions to legal reserves, is available for distribution
          to Shareholders of the Company as dividends, subject to the other applicable
          requirements of French law and the Companys statuts. See "Item
          10. Additional Information - Memorandum and Articles of Association
          - Dividend and Liquidation Rights."
      
      The
          following table sets forth, for the years indicated, both:
        the
            amount of dividends paid per Common Share "A", per ADS and per Preferred
            Share "B" without including the French avoir fiscal;
          the
            amount of such dividends paid including the French avoir fiscal (before
            deduction of applicable French withholding tax).Dividends
          declared in respect of a given year are paid in the following year.
          Any future dividends will depend on the Companys earnings, financial
          condition and other factors.


123


»Financial
    Information Dividend
          per Common
      
      
      
      
      
      Dividend
          per ADS(2)
      
      
      
      Dividend
        per CIP or PreferredShare
          "A"(2)
      
      
      
      
      
      
      
      
      
      
      
      Share
          "B"(2)Year
        to Which
        Dividend
      
      ExcludingAvoir
          Fiscal
      
      IncludingAvoir
          Fiscal
      
      ExcludingAvoir Fiscal
      
      IncludingAvoir Fiscal
      
      ExcludingAvoir Fiscal
      
      IncludingAvoir
          FiscalRelates(1)(€)
      
      ($)
      
      (€)
      
      ($)
      
      (€)
      
      ($)
      
      (€)
      
      ($)
      
      (€)
      
      ($)
      
      (€)
      
      ($)1998
      
      0.80
      
      0.93
      
      1.20
      
      1.40
      
      0.40
      
      0.47
      
      0.60
      
      0.70
      
      1.96
      
      2.29
      
      2.94
      
      3.431999
      
      0.81
      
      0.77
      
      1.21
      
      1.15
      
      0.40
      
      0.38
      
      0.60
      
      0.57
      
      0.81
      
      0.77
      
      1.21
      
      1.152000
      
      1.00
      
      0.93
      
      1.50
      
      1.40
      
      0.50
      
      0.47
      
      0.75
      
      0.70
      
      3.31
      
      3.08
      
      4.96
      
      4.612001
      
      1.00
      
      0.89
      
      1.50
      
      1.34
      
      0.50
      
      0.45
      
      0.75
      
      0.67
      
      1.79
      
      1.59
      
      2.68
      
      2.392002(3)
      
      1.00
      
      1.05
      
      1.50
      
      1.57
      
      0.50
      
      0.52
      
      0.75
      
      0.79
      
      1.65
      
      1.73
      
      2.47
      
      2.59 (1)
      Pursuant
        to French law, payments of dividends must be made within nine months following
        the end of the fiscal year to which they relate.(2)
      The
        Company has paid dividends in euros since 1999. The U.S. dollar amounts
        for dividends related to 1998 (paid in 1999) provided in the above table
        have been translated solely for convenience into dollars at the Noon Buying
        Rate (as defined under "- Exchange Rate Information") on the dividend
        payment date, or on the following business day if such date was not a
        business day in France or the United States. Avoir fiscal amounts have
        been converted into dollars at the same rates on the dividend payment
        dates, although such amounts are paid subsequent to such payment dates.(3)   Subject
        to approval at the Shareholders General Meeting convened for April
        3, 2003. The exchange rate used in this table for the year 2002 dividend
        is € 1.00 = $1.0487, the ECB Rate on December 31, 2002.  Dividends
          paid to holders of ADSs, Common Shares "A", or Preferred Shares "B"
          who are not residents of France generally will be subject to French
          withholding tax at a rate of 25%. Holders who qualify for benefits under
          an applicable tax treaty and who comply with the procedures for claiming
          treaty benefits may be entitled to a reduced rate of withholding tax
          and, in certain circumstances, an additional payment by the French Treasury
          (net of withholding tax) representing part of the French avoir fiscal,
          or part of the précompte, or tax credit, subject to the conditions
          provided for in the relevant treaty and under French law (see "Item
          10. Additional Information - French Taxation - Taxation of Dividends").
          Holders of ADSs,
      
      Common Shares
          "A" or Preferred Shares "B" should consult their own advisors with respect
          to the tax consequences of an investment in ADSs or Common Shares "A"
          or Preferred Shares "B".
        Holders of
          Preferred Shares "B" are entitled to a preferential dividend, which,
          pursuant to the Companys by-laws, is prior in right to the payment
          of any dividend in respect of the Shares (see "Item 10. Additional Information
          - Memorandum and Articles of Association - Dividend and Liquidation
          Rights"). Significant
    Changes For a description
    of significant changes after December 31, 2002, see Note 3 to the Consolidated
    Financial Statements.


124


»The
          Offer and Listing
      Item
          9 Market
    Information General The
          Common Shares "A" have been listed on thePremier
          Marchéof Euronext Paris S.A. (Euronext Paris, previously known as the Paris
          Bourse) under the Sicovam code 13290 since December 18, 1995. They are
          included in the SBF 120 index and also form the underlying security
          for certain options traded on the MONEP options market. On a European
          level, Pechineys Common Shares "A" are included in the Dow Jones
          Euro STOXX index.
        The
          SBF 120 index is compiled by Euronext Paris and consists of the 120
          largest French companies, in terms of market capitalization, listed
          on Euronext Paris.
      
      The
          ADSs, each representing one half of one Common Share "A", are listed
          on the New York Stock Exchange (NYSE) under the symbol "PY". The Common
          Shares "A" are also traded in euros on SEAQ International under the
          symbol PECHaq.L. The Preferred Shares "B" are listed on thePremier
          Marchéof Euronext Paris under the Sicovam code 3640.
        There
          have been no significant trading suspensions of Pechiney shares or ADSs
          in the past three years.
        Since
          Pechineys "A" and "B" shares have been quoted in euros since January
          4, 1999, historical data presented in this report for periods prior
          to such date have been converted into euros. Euronext
    Paris On
          September 22, 2000, upon successful completion of an exchange offer,
          the ParisBourseSBFSA, or the "SBF", the Amsterdam Stock Exchange and the Brussels Stock
          Exchanges merged to create Euronext N.V., the first pan-European exchange.
          Through the exchange offer, all the shareholders of SBF, the Amsterdam
          Stock Exchange and the Brussels Stock Exchanges contributed their shares
          to Euronext N.V., a Dutch holding company. Following the creation of
          Euronext, the SBF changed its name to Euronext Paris SA. Securities
          quoted on exchanges participating in Euronext will be traded over a
          common Euronext platform, with central clearinghouse, settlement and
          custody structures. However, these securities will remain listed on
          their local exchanges. As part of Euronext, Euronext Paris retains responsibility
          for the admission of shares to Euronext Paris trading markets
          as well as the regulation of those markets.
        Euronext
          N.V. has been listed on the Premier Marché of Euronext Paris
          since July 2001. In January 2002, Euronext N.V. acquired the London
          International Financial Futures and Options Exchange (LIFFE), Londons
          derivatives market. In February 2002, Euronext N.V. acquired Bolsa de
          Valores de Lisboa e Porto, the Portuguese stock exchange, and renamed
          it Euronext Lisbon.
        Securities
          approved for listing by Euronext Paris are traded in one of three
      
      markets.
          The securities of most large public companies are listed on thePremier
          Marché,
          with the Second Marché available for small and medium-sized companies.
          Trading on the Nouveau Marché was introduced in March 1996 to
          allow companies seeking development capital to access the stock market.
          In addition, securities of certain other companies are traded on a non-regulated
          over-the-counter market, theMarché
          Libre OTC.
        Admission
          to thePremier
          Marchéis subject to certain capital adequacy and liquidity requirements determined
          by Euronext Paris. In addition, companies applying for listing on thePremier
          Marchéare required to publish comprehensive information regularly and to keep
          the public informed of events likely to affect the market price of their
          securities.
        Securities
          listed on Premier Marché are placed in one of two categories
          depending on the volume of transactions. The Common Shares "A" are currently
          listed in the category known asContinu,
          which includes the most actively traded securities. The minimum yearly
          trading volume required to be in Continu for a company already listed
          on a regulated market of Euronext Paris is 2,500 trades, i.e., on average
          approximately 10 trades per business day.


125


» The
  Offer and Listing Securities
          listed on thePremier
          Marchéare officially traded through authorized financial intermediaries that
          are members of Euronext Paris. Securities are traded continuously on
          each business day from 9:00 a.m. through 5:25 p.m., with a pre-opening
          session from 7:15 a.m. through 9:00 a.m. and a pre-closing session from
          5:25 p.m. to 5:30 p.m., during which transactions are recorded but not
          executed, and a closing auction at 5:30 p.m. (Paris Time). Any trade
          effected after the close of a stock exchange session is recorded on
          the next Euronext Paris trading day at the previous sessions closing
          price for the relevant security.
        Euronext
          Paris may suspend trading in an issuers listed securities if quoted
          prices exceed certain price limits defined by Euronext Paris regulations.
          In particular, if the quoted price of aContinusecurity varies by more than 10% from the previous days closing
          price, trading may be suspended for 4 minutes. Further suspensions for
          4 minutes are also possible if the price again varies by more than 10%
          from the threshold at which the suspension was initiated. Trading may
          again be suspended for 4 minutes if the price varies by more than 2%
          from the last quoted price. Euronext Paris may also suspend trading
          of a listed security in certain other limited circumstances, including,
          for example, unusual trading activity in such security. In addition,
          in exceptional cases, the CMF and the COB may require Euronext Paris
          to suspend trading.
        Trades of
          securities listed on thePremier
          Marchéare settled on a cash basis. Market intermediaries are also permitted
          to offer investors to place orders on a deferred settlement basis (ordre
          stipulé à réglement différéor OSRD) for a fee. The OSRD is only available for trades in securities
          which either (i) are a
      
      component
          of the SBF 120 index or (ii) have both a total market capitalization
          of at least € 1 billion and a daily average trading volume of at
          least € 1 million. The Companys Shares are eligible for the
          OSRD. Investors can elect on the determination date (date
          de liquidation),
          which is the fifth trading day before the end of the month, either to
          settle the trade by the last trading day of the month, or to pay an
          additional fee and postpone the settlement decision to the determination
          date of the following month.
        Equities
          traded on a deferred settlement basis are considered to have been transferred
          only after they have been registered in the purchasers account.
          In accordance with French securities regulations, any sale of shares
          executed on a deferred settlement basis during the month of a dividend
          payment date is deemed to occur after the dividend has been paid. If
          the sale takes place before, but during the month of, a dividend payment
          date, the purchasers account is credited with an amount equal
          to the dividend paid and the sellers account is debited by the
          same amount.
        Prior to
          any transfer of securities held in registered form on thePremier
          Marché,
          the securities must be converted into bearer form and accordingly inscribed
          in an account maintained by an accredited intermediary with Euroclear
          France SA, a registered clearing agency. Transactions in securities
          are initiated by the owner giving instruction (through an agent, if
          appropriate) to the relevant accredited intermediary. Trades of securities
          listed on thePremier
          Marchéof Euronext Paris are cleared and settled through Euroclear France SA
          using a continuous net settlement system. A fee or commission is payable
          to the broker-dealer or other agent involved in the transaction.


126


»The
          Offer and Listing
      Item
          9 Price History of the Shares  Common Shares "A" The following tables set forth, for the periods indicated, certain trading data for Pechineys Common Shares "A" on Euronext Paris: (in
        euros)
      2002
      
      2001
      
      2000
      
      1999
      
      1998High
      63.80
      
      68.65
      
      81.00
      
      71.00
      
      47.09Low
      24.50
      
      30.04
      
      37.90
      
      26.70
      
      23.23Year
        end
      34.82
      
      57.90
      
      48.69
      
      70.95
      
      27.82Average
        value of daily trading(in
        thousands of euros)
      22,081
      
      19,011
      
      15,437
      
      12,743
      
      8,740  Year
      Quarter ended
      High (in euros)
      Low (in euros)2001
      March 30
      48.94
      46.65June 29
      68.65
      45.22September 28
      63.40
      30.04December 31
      59.40
      40.352002
      March 29
      63.80
      57.05June 28
      61.85
      45.20September 30
      48.93
      26.90December 31
      39.60
      24.50


127


» The
  Offer and Listing  Month
      MonthlyVolume of Shares
      
      Average
          DailyVolume
          of Shares
      
      Average
          Valueof Daily Volume(in thousandsof euros)
      
      High(in euros)
      
      Low(in
          euros)2001
      July
      7,341,640
      
      
      333,711
      
      
      19,368
      
      
      63.40
      
      51.55August
      4,633,242
      
      
      201,445
      
      
      11,279
      
      
      61.70
      
      53.00September
      6,300,677
      
      
      315,034
      
      
      14,056
      
      
      56.35
      
      30.04October
      6,971,097
      
      
      303,091
      
      
      14,068
      
      
      51.45
      
      40.35November
      6,797,203
      
      
      308,964
      
      
      16,377
      
      
      56.70
      
      47.41December
      5,515,999
      
      
      306,444
      
      
      17,070
      
      
      59.40
      
      52.602002
      January
      6,012,852
      
      
      273,311
      
      
      16,458
      
      
      63.25
      
      57.05February
      14,662,373
      
      
      733,119
      
      
      43,580
      
      
      63.80
      
      57.20March
      7,574,272
      
      
      378,714
      
      
      22,666
      
      
      61.95
      
      58.10April
      15,532,589
      
      
      739,647
      
      
      42,260
      
      
      61.85
      
      53.65May
      12,289,277
      
      
      558,604
      
      
      32,014
      
      
      60.20
      
      54.00June
      8,669,944
      
      
      433,497
      
      
      21,991
      
      
      57.90
      
      45.20July
      11,429,012
      
      
      496,914
      
      
      21,699
      
      
      48.93
      
      36.60August
      10,236,656
      
      
      465,303
      
      
      17,537
      
      
      42.00
      
      34.00September
      7,210,102
      
      
      343,338
      
      
      11,269
      
      
      37.31
      
      26.90October
      9,842,303
      
      
      427,926
      
      
      12,617
      
      
      33.95
      
      24.50November
      8,718,254
      
      
      415,155
      
      
      13,722
      
      
      39.60
      
      28.76December
      6,040,148
      
      
      302,007
      
      
      10,609
      
      
      39.50
      
      30.502003
      January
      9,349,464
      
      
      424,976
      
      
      12,429
      
      
      34.30
      
      24.66February
      9,588,791
      
      
      479,440
      
      
      11,863
      
      
      27.30
      
      21.02March
      7,541,740
      
      
      359,130
      
      
      8,392
      
      
      26.66
      
      20.37April
      10,460,760
      
      
      523,038
      
      
      12,671
      
      
      26.25
      
      22.10May
      12,144,964
      
      
      578,332
      
      
      14,122
      
      
      27.09
      
      22.60June
      12,954,758
      
      
      616,893
      
      
      17,953
      
      
      32.21
      
      24.26July
      45,565,845
      
      
      1,981,124
      
      
      83,164
      
      
      45.51
      
      30.01August
      8,550,209
      
      
      407,153
      
      
      18,611
      
      
      46.30
      
      45.03September
      35,830,247
      
      
      1,628,648
      
      
      76,033
      
      
      47.75
      
      45.55 Source: Monthly activity reports of Euronext


128


»The
          Offer and Listing
      Item
          9  American Depositary Shares ("ADSs") The Bank of New York serves as depositary with respect to the ADSs traded on the NYSE. The following table sets forth, for the periods indicated, the high and low sales price per ADS on the NYSE: (in
        $)
      2002
      2001
      2000
      1999
      1998High
      28.13
      30.00
      41.25
      36.44
      25.25Low
      12.17
      16.05
      16.38
      15.69
      13.63Year
      
      Quarter
        ended
      
      High
        (in $)
      Low
        (in $)2001
      
      March
        30
      
      21.30
      20.92June
        29
      
      30.00
      20.35September
        28
      
      26.80
      16.05December
        31
      
      26.05
      18.652002
      
      March
        29
      
      28.13
      25.25June
        28
      
      27.75
      22.67September
        30
      
      24.10
      13.58December
        31
      
      19.50
      12.17Year
      
      Month
      
      High
        (in $)
      Low
        (in $)2001
      
      July
      
      26.80
      23.30August
      
      26.20
      23.80September
      
      24.80
      16.05October
      
      23.00
      18.65November
      
      25.10
      21.40December
      
      26.05
      24.002002
      
      January
      
      28.13
      25.34February
      
      27.55
      25.25March
      
      27.24
      25.60April
      
      27.20
      24.25May
      
      27.75
      24.25June
      
      26.90
      22.67July
      
      24.10
      18.45August
      
      20.10
      16.68September
      
      18.22
      13.58October
      
      16.25
      12.17November
      
      19.50
      14.60December
      
      19.45
      16.552003
      
      January
      
      18.00
      13.95February
      
      14.35
      11.52March
      
      14.15
      11.40April
      
      14.37
      12.00May
      
      15.16
      13.05June
      
      18.20
      14.68July
      
      25.96
      17.48August
      
      26.20
      24.52September
      
      27.68
      25.46 Source: Monthly
  activity reports of The Bank of New York


129


»The
  Offer and Listing The number
          of ADSs outstanding remained stable in 2002 at 5,136,002 ADSs on December
          31, 2002 compared with 5,080,676 ADSs on December 31, 2001. As in 2001,
          the number of ADSs rose during the first
      
      part of the
          year to reach 5,585,994 ADSs in July 2002 and then declined steadily
          in the second part of the year.  Preferred
    Shares "B" Pechineys
          Preferred Shares "B" result from the distribution of voting right certificates
          (certificats de droit de vote) previously held by the French government
          to the holders of preferred investment certificates (certificats dinvestissement
          privilégiés or "CIPs"). Since June 25, 1997, the Preferred
          Shares "B" have been listed on the Premier Marché of Euronext
          Paris under Sicovam code 3640.
      
      The following
          tables set forth, for the periods indicated, certain trading data for
          Preferred Shares "B" traded on Euronext Paris:   (in
        euros)
      2002
      2001
      2000
      1999
      1998High
      59.60
      65.10
      80.90
      72.75
      46.95Low
      26.40
      30.10
      39.57
      30.80
      28.36Year
        end
      36.70
      54.40
      48.00
      72.75
      30.95Average
        value of daily trading(in
        thousands of euros)
      43
      63
      194
      129
      119Year
      
      Quarter
        ended
      
      High
          (in euros)
      Low
          (in euros)2001
      
      March
        30
      
      53.00
      50.80June
        29
      
      65.10
      49.55September
        28
      
      59.70
      30.10December
        31
      
      54.55
      39.522002
      
      March
        29
      
      59.60
      52.50June
        28
      
      59.05
      43.51September
        30
      
      48.50
      26.40December
        31
      
      40.40
      26.63


130


»The
          Offer and Listing
      Item
          9   Month
      MonthlyVolume of Shares
      
      Average
          DailyVolume of Shares
      
      Average
          Valueof
          Daily Volume(in thousandsof euros)
      
      High(in
          euros)
      
      Low(in
          euros)2001
      July
      10,635
      
      
      483
      
      
      27
      
      59.70
      
      51.10August
      19,018
      
      
      951
      
      
      44
      
      57.60
      
      51.90September
      21,623
      
      
      1,081
      
      
      44
      
      52.40
      
      30.10October
      14,672
      
      
      638
      
      
      29
      
      48.09
      
      39.52November
      23,423
      
      
      1,171
      
      
      53
      
      53.55
      
      45.00December
      24,242
      
      
      1,347
      
      
      69
      
      54.55
      
      48.502002
      January
      25,383
      
      
      1,154
      
      
      65
      
      59.60
      
      52.50February
      10,899
      
      
      545
      
      
      31
      
      58.50
      
      53.00March
      34,234
      
      
      1,802
      
      
      98
      
      58.40
      
      55.35April
      13,671
      
      
      651
      
      
      36
      
      59.05
      
      51.15May
      11,278
      
      
      564
      
      
      27
      
      55.35
      
      48.70June
      6,114
      
      
      340
      
      
      15
      
      54.00
      
      43.51July
      28,316
      
      
      1,287
      
      
      54
      
      48.50
      
      36.10August
      21,768
      
      
      989
      
      
      36
      
      41.76
      
      33.90September
      33,114
      
      
      1,577
      
      
      50
      
      37.95
      
      26.40October
      48,763
      
      
      2,217
      
      
      62
      
      33.50
      
      26.63November
      13,198
      
      
      660
      
      
      22
      
      40.40
      
      31.50December
      9,581
      
      
      479
      
      
      18
      
      39.86
      
      34.002003
      January
      8,853
      
      
      422
      
      
      14
      
      37.20
      
      31.80February
      34,597
      
      
      1,730
      
      
      53
      
      33.49
      
      29.50March
      21,801
      
      
      1,038
      
      
      30
      
      31.95
      
      25.32April
      17,022
      
      
      851
      
      
      24
      
      30.50
      
      26.55May
      13,490
      
      
      710
      
      
      18
      
      33.00
      
      26.12 Source: Monthly
  activity reports of Euronext   The annual
          shareholders' meeting held on April 3, 2003 approved a resolution for
          the conversion of all outstanding Preferred Shares "B" into Common Shares
          "A", at a conversion ratio of 1.10 Common Share "A" for one Preferred
          Share "B", such conversion to be carried out after the date of payment
          of the dividends proposed in respect of the 2002 fiscal year.
      
      This resolution
          was further approved by a special meeting of the holders of Preferred
          Shares "B" held on May 27, 2003, following which the conversion duly
          took place.For further information, see "Item 10. Additional Information
           Description of Share Capital  Capital Structure of the
          Company".


131


» The
  Offer and Listing  Other
    Listed Securities As of December 31, 2002, there are no securities representing a portion of the Companys capital stock, which are not listed on the Paris stock exchange.  Non-Equity
    Securities Pechiney has
          issued two series of debt securities authorized by the Board of Directors
          pursuant to authority granted by the Shareholders on November 6, 1995:
          (i) FF 1,500,000,000 (equivalent to € 228,673,526) in 5.10% bonds
          due May 11, 2005, in the form of 300,000 bonds with a nominal value
          of FF 5,000 (equivalent to € 762.25) issued on April 14, 1998.
          These bonds are listed on the Premier Marché of Euronext Paris
          (Sicovam code 20-909); and
          (ii) FF 350,000,000 (equivalent to € 53,357,156) in bonds due July
          29, 2005
      
      indexed on
          Pechineys Shares, in the form of 35,000 bonds with a nominal value
          of FF 10,000 (equivalent to € 1,524.49) issued on June 2, 1998.
          These bonds are listed on the Premier Marché of Euronext Paris
          (Sicovam code 20-943).
        These securities
          are described in Note 15 to the Consolidated Financial Statements. Securities
    Giving Access to the Companys Share Capital Pursuant to
          the delegation granted in April 2002 by the Board of Directors in accordance
          with the authorization given by the General Shareholders Meeting held
          on March 28, 2002, the Chairman of the Board resolved on April 2, 3
          and 8, 2002, to proceed with an issuance of convertible and/or exchangeable
          bonds (obligations convertibles et/ou échangeables en actions
          nouvelles ou existantes, or "OCEANE"). The aggregate amount of the OCEANE
          issuance was € 595,124,859 represented by 7,908,636 bonds with
          a nominal value of € 75.25 each. Other than in the event of
          early redemption at the option of the issuer, the then outstanding OCEANE
          will be redeemable in full on January 1, 2007 (or the following business
          day), at up to an amount of € 82.21 per OCEANE, representing approximately
          110.05% of their nominal amount. The OCEANE may be exchanged for existing
          Common Shares "A", or converted into new Common Shares "A" to
      
      be issued
          by Pechiney, from May 21, 2002, until December 20, 2006, at a ratio
          of one Common Share "A" per OCEANE (subject to the adjustment of the
          conversion or exchange ratio in the event of the adjustment events as
          set forth in the terms and conditions of the OCEANE). The terms and
          conditions of the OCEANE are set out in a final prospectus (note dopération
          definitive), which received the visa number 02-306 from the COB on April
          3, 2002. The OCEANE are listed on the Premier Marché of Euronext
          Paris S.A. (Sicovam Code 18840). During fiscal year 2002, no OCEANE
          were repurchased on the market or redeemed early by Pechiney, or exchanged
          or converted into shares.
        The following
          table sets forth, for the periods indicated, certain trading data for
          the OCEANE traded on Euronext Paris:  Month
      MonthlyVolume of Shares
      
      High
        (in
          euros)
      
      Low
        (in
          euros)2002
      May
      5,440
      
      
      76.30
      
      73.70June
      13,740
      
      
      76.00
      
      71.00July
      25,431
      
      
      72.00
      
      68.50August
      12,312
      
      
      70.00
      
      63.00September
      15,021
      
      
      72.00
      
      67.80October
      77,268
      
      
      75.00
      
      66.55November
      641
      
      
      72.50
      
      66.70December
      1,532
      
      
      74.00
      
      70.502003
      January
      78,391
      
      
      72.00
      
      69.00February
      100
      
      
      70.05
      
      70.05March
      5,154
      
      
      71.50
      
      69.10April
      1,160
      
      
      71.50
      
      71.25May
      31,772
      
      
      74.75
      
      71.75June
      190
      
      
      75.55
      
      73.65July
      544,075
      
      
      80.85
      
      74.20August
      162,774
      
      
      82.00
      
      80.55September
      1,973,025
      
      
      83.00
      
      81.00 Source : Monthly activity
  reports of Euronext
  For additional information on the OCEANE, please refer to "Item 10. Additional
  information."


132


»Additional
          Information
      Item
          10  Description
    of Share Capital Capital
    Structure of the Company The
          Company currently has one outstanding class of shares, the common shares
          (previously known as the Common Shares "A") with a par value of €
          15.25 per share.
        As
          of December 31, 2002, there were 81,422,639 Common Shares "A" outstanding
          and 1,091,044 Class B Preferred Shares with a par value of € 15.25
          per share (the Preferred Shares "B" and, collectively with
          the Common Shares "A", the "Shares") outstanding,
          for a total of 82,513,683 Shares, all of which were authorized, issued
          and fully paid. The Companys share capital at December 31, 2002
          amounted to € 1,258,333,665.75. As of December 31, 2001, the Companys
          share capital amounted to € 1,245 million, divided into 81,626,190
          Shares (80,535,146 Common Shares "A" and 1,091,044 Preferred Shares
          "B"). For details on changes in the Companys share capital since
          2001 and over the three years ended December 31, 2002, please see Note
          12 to the Consolidated Financial Statements.
        At
          the meeting of the Companys Board of Directors held on January
          29, 2003, the Board noted the number and value of Shares issued during
          2002 following the exercise of stock options granted in 1996, and adopted
          corresponding amendments to the articles of the Companys by-laws
          relating to the share capital and the number of Shares outstanding.
          During 2002, 32,216 Shares were subscribed through the exercise of stock
          options, leading to the issuance of 32,216 Common Shares "A". As of
          October 3, 2003, 243,508 stock options has been exercised since July
          17, 2003. A more detailed description of the stock options granted by
          the Company is set forth in Note 12 to the Consolidated Financial Statements.
        Pechiney
          Nederland N.V., a 100% subsidiary of Pechiney, holds 982,669 common
          shares which, in accordance with article L. 233-31 of the French Commercial
          Code (Code de commerce), do not have voting rights. Pechiney Nederland
          N.V. received:
        982,320
            of these shares in December 1997 as a result of the merger of Pechiney
            International with and into Pechiney, in exchange for Pechiney International
            Shares held by it, and
          349
            of these shares in May 1998 when it purchased fractional entitlements
            to receive Pechiney International Shares resulting from the merger
            of Pechiney International with and into Pechiney under compensation
            and overcompensation transactions carried out by financial intermediaries
            after such merger.
      
      In
          addition, as of December 31, 2002, Pechiney held 3,734,269 of its own
          Shares, of which 3,720,170 were Common Shares "A" and 14,099 were Preferred
          Shares "B". In accordance with article L. 225-210 of the French Commercial
          Code, these Shares do not have voting rights or give right to dividends.
          These Shares were purchased as follows:
        1,163,642
            Common Shares "A" during fiscal year 2000 pursuant to the authorization
            to purchase its own Shares granted by the Shareholders General
            Meeting held on June 2, 1999,
          1,394,254
            Common Shares "A" and 14,099 Preferred Shares "B" purchased during
            fiscal year 2001 pursuant to the authorization granted by the Shareholders
            General Meeting held on March 29, 2001, and
          1,162,274
            Common Shares "A" purchased during fiscal year 2002 pursuant to the
            authorization granted by the Shareholders General Meeting held
            on March 23, 2002.At
          the request of two shareholders of Pechiney, the annual shareholders
          meeting held on April 3, 2003 approved a resolution for the conversion
          of all outstanding Preferred Shares "B" into Common Shares "A", at a
          conversion ratio of 1.10 Common Share "A" for one Preferred Share "B",
          such conversion to be carried out after the date of payment of the dividends
          proposed in respect of the 2002 fiscal year. This resolution was further
          approved by a special meeting of the holders of Preferred Shares "B"
          held on May 27, 2003, following which the conversion duly took place.
          Following this conversion, Pechineys share capital amounted to €1,259,997,440.75,
          consisting of 82,622,783 common shares of a single class (previously
          known as the Common Shares "A"). As of October 3, 2003, Pechiney's share
          capital amounted to € 1,263,710,937.75.
        As of October
          3, 2003, after accounting for the shares held by Pechiney Nederland
          N.V. and the shares held in treasury by Pechiney, as well as the conversion
          of all Preferred Shares "B" into common shares, the number of voting
          rights attached to the 82,866,291 outstanding common shares amounted
          to 78,372,760 and the number of common shares giving right to a dividend
          was 79,355,429. For details on the authorizations granted to the Board
          to issue equity securities and on the Company's outstanding convertible/exchangeable
          debt instruments, see below "- Memorandum and Articles of Association".
          For details on the Company's stock options, see Note 12 to the Consolidated
          Financial Statements.
        On
          January 24, 2002, 855,277 Common Shares "A" were issued in connection
          with an employee offering pursuant to articles L. 225-138-IV of the
          French Commercial Code and L. 443-5 of the French Labor Code and pursuant
          to the authorization granted by the thirteenth resolution adopted by
          the Shareholders General Meeting held on March 29, 2001 and terms
          set by the Board of Directors on December 14, 2001. All of these Shares
          have been purchased, directly or through the Companys employee
          mutual investment fund governed by articles L. 214-4 and L. 214-40 of
          the French Financial and Monetary Code, by employees of the Company
          and French and foreign affiliates, as defined in article L. 225-180
          of the French Commercial Code, who participate in the group savings
          plan established by the Company pursuant to articles L. 443-1 et seq.
          of the French Labor Code.


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» Additional
  Information As a result
          of this employee offering (which is described in the prospectus dated
          December 14, 2001 which received the COB visa No. 01-1447 on December
          14, 2001), the share capital of the Company increased to € 1,257,842,371.75
          on January 24, 2002. As of that date, there were 81,390,423 Common Shares
          "A" and 1,091,044 Preferred Shares "B" outstanding, each of which had
          a par value of € 15.25 per Share, for a total of 82,481,467 Shares.
          As a result, the number of voting rights attached to the 82,481,467
          Shares then outstanding amounted to 78,926,803 as of that date and the
          number of Shares "A" and "B" giving right to a dividend was 79,909,472
          (78,832,527 Common Shares "A" and 1,076,945 Preferred Shares "B").
        For details
          as to Pechineys stock option plans for directors, management and
          employees, see "Item 6. Directors, Senior Management and Employees-Options
          to Purchase Securities" and "- Employee Shareholding".


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»Additional
          Information
      Item
          10  Memorandum
    and Articles of Association General The Company
          is a société anonyme, a form of limited liability company,
          established under the laws of France. The following is a summary description
          of the Companys share capital and of certain provisions of its
          by-laws and applicable provisions of French law. This information does
          not purport to be complete.
      
      You may obtain
          copies of the Companys by-laws in French from the Greffe du Registre
          du Commerce et des Sociétés de Paris, France. An unofficial
          English translation of the by-laws is included as an exhibit to this
          document. Please refer to those full documents for additional details. Register,
    Object and Purpose of the Company The Company
          is registered with the Registre du Commerce et des Sociétés
          de Paris under number 562 095 166.
        Pursuant
          to article 3 of the Companys by-laws, the purposes of Pechiney,
          in France and abroad, are the following:
        the manufacture,
            transformation and sale of any chemical, metallurgic, electrochemical,
            electrometallurgical products and of any wrapping products, and of
            their by-products, components, and raw materials;
          the manufacture
            and sale of any equipment necessary for the manufacture and transformation
            of these products;
      
      the prospecting,
            research, extraction and operation of any deposit of ore or ore substances
            and any source of energy; and
          any creation
            and operation of industrial firms or any industrial, commercial, financial,
            real estate operation with respect to the industry of these products.In general,
          the Company may perform any commercial, industrial, agricultural, real
          estate and financial operation with respect to the purposes stated above. Directors For a complete
          description of the Board of Directors powers under French law
          and Pechineys by-laws, see "Item 6. Directors, Senior Management
          and Employees - Directors and Senior Management - Board of Directors".
        Directors
          power to vote on agreements in which they are materially interested.
        In accordance
          with the by-laws of the Company and pursuant to article 225-38 of the
          French Commercial Code, any proposed agreement (except agreements in
          the ordinary course of business entered into on an arms length
          basis), either directly or indirectly, between (i) the Company and (ii)
          the Directeur Général (or Chief Executive Officer) or
          any Directeur Général Délégué (or
          Delegated Executive Officers), a member of the Board of Directors or
          any shareholder holding more than 5% of the voting rights of the Company
          or, if the shareholder is a company, with the company controlling directly
          or indirectly such shareholder, must be submitted to the Board for prior
          approval. Agreements in which such persons have an indirect interest
          must also follow the same procedure. If the interested party is a board
          member, such party is not entitled to vote on the issue. French law
          further requires such agreements to be submitted to the general meeting
          of shareholders for approval once entered into, upon presentation of
          a special report from the Companys auditors. The interested party,
          directly or indirectly, may not vote on such a shareholders resolution.
      
      In case of
          equal votes, the President of the Board or the Director holding such
          position has a casting vote, except with respect to decisions approving
          related party transactions pursuant to article L. 225-38 et seq. of
          the French Commercial Code.
        Directors
          power to vote compensation
        The total
          compensation for all directors is voted by the Shareholders Meeting
          and is then allocated by the directors among themselves. The Board of
          Directors may also grant to some of its members exceptional directors
          fees in respect to a specific task or mandate. These special directors
          fees must correspond to actual work, or the director may be prosecuted
          under French criminal law. See "Item 6. Directors, Senior Management
          and Employees - Compensation of Directors and Officers -Directors
          Compensation".
        Borrowing
          powers exercisable by the directors
        In accordance
          with article L. 225-43 of the French Commercial Code, directors and
          executive officers may not borrow money or obtain a guarantee from Pechiney.
          Any such loan or guarantee would be void and may not be relied upon
          by third parties.


135


»Additional
  Information Age
          requirements for retirement of directors
        In accordance
          with article L. 225-19 of the French Commercial Code, no more than one-third
          of the members of the Board of Directors may be more than 70 years old,
          unless the by-laws of the Company provide otherwise. Pechineys
          by-laws do not contain any provisions contrary to this age limit.
      
      Number
          of Shares required for a directors qualification
        Each director
          must, according to the Companys by-laws, hold at least 200 Shares. Legal
    Characteristics of Common Shares "A" and Preferred Shares "B" Each Preferred
          Share "B" entitled its holder to receive a preferred dividend (see "-
          Dividend and Liquidation Rights"). Except for this right to receive
          a preferred dividend, Preferred Shares "B" were subject to the same
          statutory provisions as Common Shares "A", and their holders were entitled
          to the same rights. For details on the action necessary to change the
          rights of the holders of the stock and to amend the by-laws, please
          see "- Attendance and Voting at Shareholders Meetings".
        Under Article
          L.225-99 of the French Commercial Code, the Board of Directors was required
          to convene a special general meeting of Holders of Preferred
      
      Shares "B"
          in order to approve all decisions taken by the Shareholders General
          Meeting that could result in a modification of rights of holders of
          Preferred Shares "B". Shareholders holding not less than 50% in the
          aggregate of the Preferred shares "B" (or 25% for a meeting held on
          second call) were required to be present in person or represented (by
          postal vote or proxy) at such special general meeting. Such meetings
          were generally conducted in accordance with the same procedural rules
          applicable to Extraordinary General Meetings of Shareholders (see "--
          Attendance and Voting at Shareholders Meetings"). Attendance
    and Voting at Shareholders Meetings General
        In accordance
          with French law, there are two types of Shareholders General Meetings,
          ordinary and extraordinary. A combined general meeting is a meeting
          of the Shareholders where matters pertaining to both Ordinary and Extraordinary
          General Meetings are addressed.
        Ordinary
          General Meetings of Shareholders are required for matters such as:
        appointing,
            replacing and removing directors,
          allocating
            fees to the Board of Directors,
          appointing
            statutory auditors,
          approving
            annual accounts,
          declaring
            dividends or authorizing dividends to be paid in Shares,
          issuing
            debt securities, and
          approving
            share repurchase programs.Extraordinary
          General Meetings of Shareholders are required for approval of matters
          such as:
        amendments
            to the Companys by-laws;
          changes
            in the name or corporate purpose of the Company;
          approval
            of mergers in which the Company is not the surviving entity;
          approval
            of mergers in which the Company is the surviving entity but in connection
            with which the Company is issuing a portion of its share capital to
            the stockholders of the merged entity;
          increases
            or decreases in share capital (including a waiver of preferential
            subscription rights; see "-- Preferential Subscription Rights");
          creation
            of a new class of shares;
      
      authorization
            of the issuance of investment certificates or securities convertible
            or exchangeable into equity securities; and
          the liquidation
            of the Company prior to the end of its statutory term.Annual
          Ordinary Meetings
        The Board
          of Directors is required to convene an annual Ordinary General Meeting
          of all Shareholders for approval of the annual accounts within six months
          of the end of the Companys fiscal year. This period may be extended
          by decision of the President of the Commercial Court (Tribunal de Commerce).
          Other ordinary or extraordinary meetings may be convened at any time
          during the year upon proper notice. Shareholders meetings may
          be convened by the Board of Directors or, if the Board of Directors
          fails to call a required meeting, by the Companys statutory auditors
          or by a court-appointed agent. The court may be requested to appoint
          an agent:
        by one
            or more Shareholders holding in the aggregate at least 5% of the share
            capital of the Company,
          by any
            interested party including the workers committee in cases of
            emergency, or
          by certain
            duly qualified associations of Shareholders who have held their Shares
            in registered form for at least two years and who together hold at
            least a specified percentage of the voting rights of the Company.Notice
          of Ordinary and Extraordinary Shareholders Meetings
        At least
          30 days before the date set for any general meeting, a preliminary notice
          (avis de réunion) must be published in France in the Bulletin
          des Annonces Légales Obligatoires (BALO) containing, among other
          things,


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»Additional
          Information
      Item
          10  the
          time, date and place of the meeting, the agenda for the meeting and
          a draft of the resolutions to be considered. A copy of the preliminary
          notice must be provided to the COB before publication. The COB also
          recommends that the preliminary notice be published in a newspaper of
          national circulation in France. Within 10 days of the announcement,
          additional resolutions to be voted on at the meeting may be proposed
          by:
        one or
            more Shareholders holding a specified percentage of Shares calculated
            on the basis of a formula relating to the Companys share capital
            at the time,
          the workers
            committee, or
          a duly
            qualified association of Shareholders who have held their Shares in
            registered form for at least two years and who together hold at least
            a specified percentage of the voting rights of the Company.The
          Board of Directors must submit those resolutions to a vote of the Shareholders.
        At
          least 15 days prior to the date set for a general meeting on first call,
          and at least six days before any second call, a final notice (avis
          de convocation) must be sent by mail or, subject to certain conditions,
          by e-mail to all registered Shareholders who have held such Shares for
          more than one month prior to the issuance of the final notice. Notice
          of the meeting shall also be given in a newspaper authorized to publish
          legal announcements in the local administrative district (département)
          in which the Company is registered, as well as in the BALO, with prior
          notice to the COB. The notice must state, among other things, the type
          of meeting and the agenda, place, date and time for the meeting.
        No
          action may be taken at a meeting on any matter not listed on the agenda
          for the meeting other than the dismissal of members of the Board of
          Directors.
        Attendance
          and Voting at Shareholders Meetings Attendance
          at Ordinary and Extraordinary General Meetings and exercise of voting
          rights by shareholders are subject to certain conditions:
        a holder
            of registered Shares must have its Shares registered in its name in
            a Shareholder account maintained by BNP Paribas Securities Services
            on behalf of the Company;
          a holder
            of bearer Shares must obtain from the accredited financial intermediary
            with whom such holder has deposited its Shares a certificate indicating
            the number of Shares owned by such holder (certificat dimmobilisation)
            and stating that the such Shares are not transferable until the date
            and time fixed for the meeting. A holder of bearer Shares may attend
            the meeting and exercise such holders voting rights only upon
            transmission of the certificate to the Company.The
          foregoing formalities must be accomplished not less than five days prior
          to the relevant meeting. The Companys by-laws provide that this
          five-day period may be reduced by the Board of Directors when it calls
          the meeting.
      
      Subject
          to the formalities referred to in the above paragraph, all Shareholders,
          upon proof of their identity, have the right to participate in general
          meetings - in person, by proxy, by mail or e-mail - and to vote the
          number of Shares they hold.
        In
          addition, any Shareholder who complies with the above-mentioned formalities
          may nonetheless sell all or part of his or her Shares while his or her
          registered Shares are registered with BNP Paribas Securities Services
          or while his or her bearer Shares are non-transferable, if such Shareholder
          notifies the accredited financial intermediary of the cancellation of
          such registration or non-transferability no later than 3:00 p.m. Paris
          time, on the day prior to the meeting, provided that, if he has requested
          an admission card or cast his vote by mail or proxy, he transmits to
          the accredited financial intermediary the elements allowing his vote
          or proxy to be cancelled or to modify the number of Shares and corresponding
          votes. If the cancellation occurs after 3:00 p.m. Paris time on the
          day prior to the meeting, the correcting information does not have to
          be transmitted. An amendment to the by-laws will be proposed at the
          next Shareholders meeting to conform such by-laws to new applicable
          regulations.
        The
          Board of Directors has the power, when it calls the meeting, to enable
          Shareholders to participate by videoconference or any other telecommunication
          means, to the extent permitted by law. Shareholders who participate
          by videoconference or by any other of these telecommunication means
          shall be deemed present for purposes of the quorum and majority.
        Since
          the General Meeting of the Shareholders held on March 29, 2001 (which
          adopted the fifth resolution amending article 36 of the by-laws), access
          to the general meetings of the Shareholders is no longer restricted
          to Shareholders holding at least 10 Shares.
        Proxies
          and Votes by Mail or E-mail Proxies will
          be sent to Shareholders upon request. In order to be counted, proxies
          must be received at the registered office of the Company or at the address
          indicated on the notice convening the meeting prior to the date of the
          meeting. Proxies may be granted by a Shareholder to his or her spouse,
          to another Shareholder or, in the case of a corporation, to a legal
          representative (who in turn may grant a proxy). Alternatively, Shareholders
          may send blank proxies (procurations en blanc) to the Company,
          in which case the chairman of the meeting will vote the relevant Shares
          in favor of all resolutions proposed or approved by the Board of Directors
          and against all others.
        With
          respect to voting by mail (vote à distance), the Company
          must send a ballot to all Shareholders who request one. The ballot must
          be returned to the Company at least three days before the meeting. Under
          French law, Shareholders at Ordinary and Extraordinary General Meetings
          may modify resolutions presented by the Board of Directors. In such
          case, Shareholders who have given prior instructions to vote in favor
          of the original resolution or blank proxies shall be deemed to have
          voted against the revised resolution. However, if the Board of Directors
          approves the


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»Additional
  Information revised resolution,
          Shareholders who have sent a blank proxy shall be deemed to have voted
          in favor of the revised resolution.
        Voting by
          electronic mail is subject to the same conditions, except that the ballots
          must be sent to the Company before 3:00 p.m., Paris time, the day before
          the meeting. The Companys by-laws currently permits such a vote
          by electronic mail, if such vote by electronic mail is allowed by the
          Board of Directors at the time the General Meeting of Shareholders is
          convened by it.
        A Shareholder
          who is not a French resident may be represented at the general meeting
          by an intermediary who is acting on his or her behalf if:
        such intermediary
            has been registered, in the form of a collective account or in several
            individual accounts, with BNP Paribas Securities Services, as the
            accredited Company account administrator for Pechiney;
          such intermediary
            has declared, when opening one or several accounts with BNP Paribas
            Securities Services, as the accredited Company account administrator
            for Pechiney, that it is an intermediary holding Shares on behalf
            of a Shareholder, as required by law; and
          such intermediary
            represents that, upon Pechiney or BNP Paribas Securities Services
            request, it will disclose the identity of the nonresident holders
            of the Shares whose voting rights are exercised.An intermediary
          which complies with the above-mentioned requirements may exercise the
          voting rights or transmit the relevant proxies pertaining to the Shares
          for which it has received a general power of attorney. However, such
          voting rights or proxies will not be taken into account if the intermediary
          has not registered or has not disclosed the identity of the non-resident
          holders of the Shares for whom such voting rights or proxies are exercised.
        Quorum
        Under French
          law, a quorum requires the presence (in person, by video-conference,
          by mail or by proxy, as the case may be) of Shareholders
      
      holding at
          least 25% (in the case of an Ordinary General Meeting or an Extraordinary
          General Meeting deciding upon any share capital increase by capitalization
          of reserves, profits or share premium) or 33% (in the case of any other
          Extraordinary General Meeting) of the Shares entitled to vote.
        If a quorum
          is not present at any meeting, the meeting is adjourned. If an adjourned
          Ordinary General Meeting is reconvened, there is no quorum requirement.
          If an Extraordinary General Meeting is reconvened, the quorum requires
          the presence (in person, by videoconference or by proxy, as the case
          may be) of Shareholders having not less than 25% of the Shares entitled
          to vote, except when an increase in the Companys share capital
          is proposed by capitalization of reserves, profits or share premium,
          in which case there are no quorum requirements when an adjourned Extraordinary
          General Meeting is resumed.
        Majority
        At an Ordinary
          General Meeting, or at an Extraordinary General Meeting deciding upon
          any share capital increase by capitalization of reserves, profits or
          share premiums, a simple majority of the votes cast is required to approve
          a resolution. At any other Extraordinary General Meeting, a two-thirdsmajority
          of the votes cast is required. However, a unanimous vote is required
          to increase liabilities of Shareholders. Abstention from voting is treated
          as a vote against a resolution submitted to a vote.
        Each Share
          confers on its holder the right to one vote. Under French company law,
          Shares held by the Company or entities controlled directly or indirectly
          by the Company are not entitled to voting rights and are not counted
          for quorum or majority purposes.
        Changes in
          the voting rights of share capital during 2000, 2001 and 2002 are set
          forth in Note 12 to the Consolidated Financial Statements. Dividend
    and Liquidation Rights Net income
          in each fiscal year (after applicable deductions for depreciation and
          provisions), as increased by any profit or loss carried forward from
          prior fiscal years less any contributions to legal reserves, is available
          for distribution as dividends, subject to the requirements of French
          law and the Companys by-laws.
        Legal
          Reserve
        The Company
          is legally required to contribute a minimum of 5% of its annual net
          income to a legal reserve. This minimum contribution is no longer required
          if, and for so long as, the Company maintains a legal reserve equal
          to 10% of the aggregate nominal value of its issued share capital. The
          legal reserve is distributable to Shareholders only upon the liquidation
          of the Company.
      
      Distribution
          of Dividends
        Net income
          in each fiscal year, as increased or reduced by any profit or loss carried
          forward from prior fiscal years less any contributions to legal reserves,
          is available for distribution as dividends, subject to the requirements
          of French law and the Companys by-laws. The annual Ordinary General
          Meeting of the Shareholders must allocate distributable amounts in the
          following order:
        (1) Before
          the conversion of Preferred Shares "B" to Common Shares "A",
          a first preferred dividend was payable to holders of Preferred Shares
          "B" equal to 9.5% of the nominal net paid-in value of the Preferred
          Shares "B". This dividend was cumulative, i.e. if the amounts distributable
          for the fiscal year were not sufficient to allow its distribution in
          full, the unpaid amounts were required to be paid from the distributable
          amounts during the following years, prior to the payment of any other
          dividends;


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»Additional
          Information
      Item
          10  (2) Before
          the conversion of Preferred Shares "B" to Common Stock Shares
          "A", an additional dividend to holders of Preferred Shares
          "B". This dividend, determined upon recommendation of the Board of Directors
          and based on the consolidated results of the Group, was required to
          be at least equal to 10% of the Companys net profit divided by
          the number of outstanding Shares, excluding capital gains and losses
          on disposal of investments in equity interests, and was required to
          be paid on a pro rata basis to the holders of Preferred Shares "B";
        (3) An allocation
          of such amount as the Shareholders, upon recommendation of the Board
          of Directors, may approve to one or more reserve funds or to carry forward
          as retained earnings;
        (4) Upon
          recommendation of the Board of Directors, a first dividend to holders
          of Common Shares "A", which per Share amount prior to the conversion
          of the Preferred Shares "B" to Common Shares "A" was required to be
          no greater than the preferred dividend plus any additional dividend
          distributed to holders of Preferred Shares "B" on a pro rata basis;
          and
        (5) Any amount
          outstanding after these distributions is divided among the holders of
          Shares (including, before conversion the Preferred Shares "B")
          Common Shares "A" and Preferred Shares "B" in an amount proportional
          to the share capital represented by each type of Share.
        As discussed
          above, a special meeting of the holders of Preferred Shares "B" of Pechiney
          approved the vote of the general shareholders' meeting of April 3, 2003
          to convert the Preferred Shares "B" into Common Shares "A". For further
          information, see "Item 4. Information on the Company - Recent Developments"
          and "Item 10. Additional Information - Description of Share Capital
          - Capital Structure of the Company". As a result, the order of allocations
          summarized above will be amended accordingly for distributions to be
          made in 2004 and following years.
        The Shareholders
          General Meeting may, upon recommendation of the Board of Directors,
          decide to distribute sums originally allocated to reserves over which
          it has control. In such case, the resolution must expressly indicate
          the reserves from which the sums are distributed. Except in the case
          of a decrease in the share capital, the Company may not
      
      distribute
          any amount to its Shareholders if the net assets are, or would become
          as a result of the distribution, less than the amount of capital plus
          the reserves that may not be distributed pursuant to French law.
        The methods
          of payment of the dividends are decided by the Shareholders General
          Meeting or, in the absence of such a decision, by the Board of Directors.
          Dividends in respect of any fiscal year must be paid within nine months
          of the end of that fiscal year unless otherwise authorized by a court
          order. Under French law, dividends not claimed within five years of
          the date of payment revert to the French State.
        Each Shareholder
          may be granted at the General Meeting, with respect to all or part of
          the dividend or interim dividend distributed, an option to be paid the
          dividend or interim dividend in cash or in Shares of the Company.
        Each Shareholder
          has an interest in the Company proportional to the nominal value of
          his or her holdings. In the event that the Company is liquidated, the
          assets of the Company remaining after payment of its debts, liquidation
          expenses and all of its remaining obligations must be distributed first
          to repay in full the nominal value of the Shares. Any surplus is distributed
          pro rata among the Shareholders based on the nominal value of their
          holdings.
        All the securities
          that constitute or will constitute the share capital are totally assimilated
          with regards to taxes. Therefore, any taxes that, for any reason whatsoever,
          may become due because the share capital is being paid back, and apply
          only to some of these securities, either during the existence of the
          Company or at its liquidation, will be divided between all the securities
          that constitute the share capital at the moment of reimbursement, in
          such a way that all the current or future securities will grant their
          owner the same advantages and entitle them to receive the same net amount.


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»Additional
  Information Changes
    in Share Capital Increases
          in Share Capital
        The share
          capital of the Company may be increased only with the approval of the
          Shareholders at an Extraordinary General Meeting upon recommendation
          of the Board of Directors. Increases in the Companys share capital
          may be effected by:
        issuing
            additional Shares,
          creating
            a new class of equity securities,
          increasing
            the nominal value of existing Shares,Increases
          in share capital by the issuance of additional securities may be effected:
        for cash,
          in satisfaction
            of indebtedness incurred by the Company,
          for assets
            contributed in kind,
          by capitalization
            of reserves, profits or share premiums,
          upon conversion,
            exchange or redemption of securities convertible or exchangeable into
            equity securities issued by the Company,
          or upon
            the exercise of stock options, share warrants or other similar securities
            comprising rights to subscribe for equity securities.In addition,
          Share dividends may be distributed in lieu of payment of cash dividends
          (see "- Dividend and Liquidation Rights").
        Decisions
          to increase the share capital through the capitalization of reserves,
          profits and/or share premiums require the approval of an Extraordinary
          General Meeting, acting under the quorum and majority requirements applicable
          to ordinary shareholders meetings. Increases effected by an increase
          in the nominal value of shares require unanimous approval of the shareholders,
          unless effected by capitalization of reserves, profits or share premiums.
          All other capital increases require the approval of an Extraordinary
          General Meeting.
      
      The Shareholders
          may delegate to the Board of Directors, which may in turn delegate to
          the Chairman, the powers required to effect any increase in share capital
          primarily authorized by the Shareholders. Such increases may be effected
          in one or more stages (subject to the limitations provided by French
          law).
        Each time
          the Shareholders decide a capital increase or decide to delegate to
          the Board of Directors the right to carry out a capital increase, they
          must also decide whether or not to proceed with a capital increase reserved
          for employees of the Company and its subsidiaries and whether or not
          to delegate to the Board of Directors the right to carry out such reserved
          capital increase.
        Information
          with respect to capital increases of the Company carried out during
          the past five years is set forth below in the Consolidated Statement
          of Shareholders Equity and Note 12 to the Consolidated Financial
          Statements.
        The authorization
          to increase the capital granted by Shareholders to the Board of Directors
          of the Company are set forth in "Item 5. Operating and Financial Review
          and Prospects".
        Decreases
          in Share Capital
        The share
          capital of the Company may be decreased only with the approval of the
          Shareholders at an Extraordinary General Meeting. The specific conditions
          under which the share capital may be decreased will vary depending upon
          whether the decrease is attributable to losses incurred by the Company.
          All Shareholders must be treated equally. A decrease in the Companys
          share capital can be made either by decreasing the nominal value of
          the Shares or by reducing the number of outstanding Shares. If the decrease
          is not attributable to losses incurred by the Company, the Company may
          reduce its share capital by purchasing and cancelling Shares. Preferential
    Subscription Rights According
          to the French Commercial Code, if the Company issues, for cash, shares
          or specific kinds of additional securities giving right to subscribe
          to Shares, Shareholders will have preferential rights to subscribe (droit
          préférentiel de souscription) on a pro rata basis to these
          securities. These preferential rights require the Company to give priority
          treatment to those Shareholders. Preferential subscription rights are
          transferable during the subscription period relating to a particular
          offering. These rights may also be listed on the Premier Marché
          of Euronext Paris. Shareholders do not have such preferential rights
          with respect to securities issued for contributions in kind.
      
      A two-third
          majority of the Shares entitled to vote at an Extraordinary General
          Meeting may vote to waive preferential subscription rights with respect
          to any particular offering. French law requires that the Board of Directors
          and auditors present reports that specifically address any proposal
          to waive preferential subscription rights. In the event of a waiver,
          the issue of securities must be completed within the period prescribed
          by law. Shareholders may also decide at an Extraordinary General Meeting
          to give the existing Shareholders a non-transferable priority right
          to subscribe to the new securities, during a limited period of time.
          Shareholders also may notify the Company that they wish to waive their
          own preemptive subscription rights with respect to any particular offering
          if they so choose.


140


»Additional
          Information
      Item
          10 Purchase
    by the Company of its Shares Under French
          law the Company may not issue Shares to itself but it may, either directly
          or through a financial intermediary acting on its behalf, purchase its
          own Shares for one of three purposes:
        with the
            approval of the Shareholders at an Extraordinary General Meeting to
            reduce its share capital under certain circumstances,
          to provide
            Shares for distribution to employees under a profit-sharing or stock
            option plan,
          to acquire
            up to 10% of its share capital pursuant to a corporate repurchase
            program, provided that the Companys Shares are listed on a regulated
            market (i.e., on the Premier Marché, the Second Marché
            or the Nouveau Marché), subject to the filing of a note dinformation
            that has received the approval (visa) of the COB and after obtaining
            approval from the Shareholders at an Ordinary General Meeting. The
            Company may decide to (i) keep the Shares acquired, (ii) sell or transfer
            them (including to employees under a profit-sharing plan or stock
            option plan) or (iii) with the previous authorization of the Shareholders
            at an Extraordinary Meeting, cancel them.The Company
          may not cancel more than 10% of its outstanding share capital over any
          24-month period. In addition, the Company may not repurchase an amount
          of Shares that would result in the Company holding, directly or through
          a person acting on its behalf, more than 10% of its outstanding share
          capital or 10% of Shares in each class. Furthermore, the
      
      Company must
          inform both the COB and the CMF, on a monthly basis, of any purchase,
          sale, transfer or cancellation of its own Shares. The CMF will then
          make this information public.
        Shares held
          by the Company must be held in registered form and be fully paid. Such
          Shares are deemed to be outstanding under French law but are not entitled
          to dividends or voting rights, and the Company may not itself exercise
          preferential subscription rights. The Shareholders, at an Extraordinary
          General Meeting, may decide not to take such Shares into account in
          determining the preferential subscription rights attached to the other
          Shares; in the absence of such a decision, the rights attached to Shares
          held by the Company must be either sold on the market before the end
          of the subscription period or distributed to the other Shareholders
          on a pro rata basis.
        French law
          generally prohibits a direct subsidiary of the Company from holding
          Shares and, in the event it becomes a holder of Shares, such subsidiary
          must transfer such Shares within one year following the date on which
          it becomes the holder thereof. An indirect subsidiary of the Company
          may only acquire Shares if such subsidiary demonstrates a business purpose
          for holding the Shares, but in no event will it be entitled to vote
          such Shares.


141


»Additional
  Information Trading
    in the Companys own Shares Under Regulation
          No 90-04 of the COB, as amended, the Company may not trade in its Shares
          for the purpose of manipulating the market. There are three requirements
          for trades by a company in its own shares to be considered valid. Specifically,
          in order to be valid:
        trades
            during same business day must be executed on behalf of the Company
            by only one intermediary or, if the issuer uses its share repurchase
            program in part by way of derivatives, by two intermediaries provided
            that the issuer is able to ensure an appropriate coordination between
            these intermediaries, in each trading session;
          any block
            trades may not be made at a price above the current market price;
            and
          each trade
            must be made at a price that falls between the lowest and the highest
            trading price of the trading session during which it is executed.If a companys
          shares are continuously quoted (cotation en continu), as Pechineys
          Shares are, then a trade must meet the following requirements to be
          considered valid:
        the trade
            must not influence the determination of quoted price before opening
            of trading, at the opening of trading, at the first trade of the shares,
            at the reopening of trading following a suspension, or as applicable,
            in the last half hour of any trading session or at the fixing of the
            closing price;
          the trade
            must not be carried out in order to influence the price of a derivative
            instrument relating to the companys shares; and
          the trade
            must not account for more than 25% of the total daily trading volume
            on the Premier Marché in the shares during the three trading
            days immediately preceding the trade for shares eligible for the OSRD.
      
      This third
          requirement does not apply to trades in blocks of shares. The first
          and third requirements do not apply to trades executed on behalf of
          the issuer by an intermediary acting in pursuance of a liquidity agreement
          (contrat de liquidité) complying with a charter of ethics approved
          by the COB. A first code of ethics was adopted by the Association Française
          des Entreprises dInvestissement (AFEI) and approved by the COB
          on February 13, 2001.
        There are
          two periods during which the Company is not permitted to trade in its
          own securities:
        the 15-day
            period before the date on which the Company makes its consolidated
            or annual accounts public; and
          the period
            beginning on the date at which the Company becomes aware of information
            that, if disclosed, would have a significant impact on the market
            price of its securities and ending on the date this information is
            made public.This requirement
          does not apply to trades executed on behalf of the issuer by an intermediary
          acting in pursuance of a contrat de liquidité complying with
          the charter of ethics approved by the COB, as discussed above.
        After making
          an initial purchase of the Companys own shares, the Company must
          file monthly reports with the COB and the CMF that contain specific
          information about subsequent transactions. The CMF makes this information
          available to the public. Authorization
    granted to the Company to repurchase its own Shares In accordance
          with the provisions of Articles L.225-209 et seq. of the French Commercial
          Code, the Company was permitted to intervene on Euronext
      
      Paris to regulate
          the price of the Common Shares "A" and the Preferred Shares "B", on
          the terms set forth in the following table:  Grant of authority
      Class
        of Shares
      Maximum
        number of Shares(1)
      
      Maximumpurchase
        price
      
      Minimum
        resaleprice
      Expiration
        of authorityMarch 28,2002
      Common
      8,139,042
        at March 28, 2002
      
      €
          65.00
      
      €
          40.00
      September
        27, 2003Shares
        "A"
      8,142,263
        at December 31, 2002March 28,2002
      Preferred
      109,104
      
      €
          67.00
      
      €
          42.00
      September
        27, 2003Shares
        "B" 1) Since the maximum number
  of Shares that may be repurchased is determined as a percentage of the outstanding
  Shares (10%), the maximum number of Common Shares "A" that may be repurchased
  at any particular time depends upon the number of outstanding Common Shares
  "A", which in turn depends upon the number of options to subscribe for Common
  Shares "A" that have been exercised and the number of new Common Shares "A"
  issued during the period.  During 2002,
          1,162,274 Common Shares "A" were repurchased at an average price of
          approximately € 34.59 per Share. The fees for such purchases amounted
          to € 110,110.14. Those Shares were repurchased
      
      between June
          14, 2002 and November 15, 2002 in order to limit excessive variations
          in the Share price or to ensure the liquidity of the Common Shares "A",
          pursuant to the authorization granted by the Shareholders General


142


»Additional
          Information
      Item
          10  Meeting held
          on March 28, 2002 and in accordance with the terms set forth in the
          information memorandum which received visa No. 02-189 from the COB on
          March 8, 2002.
        The Company
          did not resell these Shares. Therefore, after accounting for 1,163,642
          Common Shares "A" repurchased in 2000 pursuant to the authorization
          granted by the Shareholders General Meeting held on June 2, 1999,
          and 1,394,254 Common Shares "A" and 14,099 Preferred Shares "B" repurchased
          in 2001 pursuant to the authorization granted by the Shareholders General
          Meeting held on March 29, 2001, the Company held at December 31, 2002
          3,720,170 Common Shares "A" and 14,099 Preferred Shares "B", each with
          a par value of € 15.25, representing 4.51% and 0.02% of its share
          capital, respectively. Thus, on December 31, 2002 the Company held 3,734,269
          Shares representing 4.53% of its share capital. The total value of these
          Shares, based on their purchase price, is € 149,137,415.39, as
          reflected in the financial statements of the Company as of December
          31, 2002.
        Including
          the Shares acquired by Pechiney during 2001, the total amount of Shares
          held by Pechiney and its affiliates at December 31, 2002 was 4,702,839
          Common Shares "A" and 14,099 Preferred Shares "B", representing 5.70%
          and 0.02% of the share capital of the Company, respectively. Thus, at
          December 31, 2002 the Company and its affiliates held a total of 4,716,938
          Shares representing 5.72% of the share capital of the Company. The balance
          of 982,669 Common Shares "A" was held by Pechiney Nederland NV, an affiliate
          of the Company.
        In accordance
          with the legislation governing the repurchase by a company of its own
          Shares, as defined under articles L.225-209 et seq. of the French
      
      Commercial
          Code, the Shareholders General Meeting of April 3, 2003 authorized,
          in its fourth resolution, an extension of the Companys authorization
          to purchase its own Shares for resale, transfer or cancellation. This
          authorization replaced the authorization granted by the Shareholders
          General Meeting on March 28, 2002, which expired on September 27, 2003
          and expires on October 2, 2004, i.e., after the current fiscal year.
        Pursuant
          to COB Regulation No. 98-02 of September 6, 1998, as amended, the purposes
          and terms of such share repurchases have been set forth in a note dinformation
          submitted by the Company to the COB for review.
        Under the
          new authorization, the Company is authorized to purchase an amount of
          Shares representing up to 10% of the share capital. The maximum purchase
          price for these Shares is € 55. The minimum resale price for these
          Shares is € 30 for the Common Shares.
        In addition,
          the authorization granted by the Shareholders General Meeting
          on March 29, 2001 in its eleventh resolution to cancel part or all of
          the Shares repurchased and to reduce the share capital of the Company
          expired on March 28, 2003. The Shareholders granted the Board of Directors
          the authorization to cancel all or part of the Shares repurchased (or
          to be repurchased pursuant to a new authorization) by the Company in
          accordance with article L. 225-209 of the French Commercial Code, provided
          that the Company may not cancel more than 10% of its outstanding share
          capital over a 24-month period ending on April 2, 2005, and the authorization
          to reduce its share capital accordingly. Participation
    of Employees in the Shareholding of the Company Information
          regarding the participation of the Companys employees in the shareholding
          of Pechiney is set forth in "Item 6. Directors, Senior
      
      Management
          and Employees - Employees - Employee Shareholding".


143


» Additional
  Information Holding
    of Shares In accordance
          with French law concerning dematerialization (dématérialisation)
          of securities, Shareholders ownership rights are not represented
          by physical certificates but by book entries in equity securities accounts.
        The Company
          maintains an account with Euroclear France S.A., the French clearing
          house system, with respect to each class of shares in registered form
          (the "Company Account"), which is administered by BNP Paribas acting
          on behalf of the Company as its agent. Equity securities held in registered
          form are registered in a separate account for each holder (a "Holder
          Account"), either directly, or, at the holders request, through
          such holders accredited intermediary. Each Holder Account shows
          the name of the holder and the number of shares held and, in the case
          of shares registered through an accredited intermediary, shows that
          they are so held. BNP Paribas issues confirmations as to holdings of
          shares registered in the Holder Accounts to the persons in whose names
          the holdings are registered, but these confirmations do not constitute
          documents of title.
        In the case
          of Shares held in bearer form, the Shares are held on the
      
      Shareholders
          behalf by an accredited intermediary and are registered in an account
          maintained by the accredited intermediary with Euroclear France S.A.,
          separate from the Company Account. Shares held in this manner are referred
          to as being in bearer form. Each accredited intermediary maintains a
          record of Shares held through it and will issue certificates of registration
          for the Shares that it holds. Transfers of Shares held in bearer form
          may only be effected through accredited intermediaries and Euroclear
          France S.A.
        According
          to the French Commercial Code, Shares owned by any non-French resident
          may be held on the Shareholders behalf in a collective account
          or in several individual accounts by an intermediary. The intermediary
          must declare that it is acting as an intermediary and may be requested
          by the Company to provide the identity of the Shareholders on whose
          behalf it is acting. Failure to declare that it is acting as an intermediary
          or the provision of inaccurate or incomplete information about the beneficial
          owner can result in the deprivation of the right to vote and the right
          to receive dividends or both, for a period of up to five years. Identification
    of Holders in Bearer Form The Companys
          by-laws permit, in accordance with the applicable legislation, the use
          of the procedure known as titres au porteur identifiables, according
          to which Euroclear France S.A. will, upon the Companys request,
          disclose a Shareholders name, date of birth (or, in the case of
          a legal person, name and date of organization), nationality, address
          and the amount of securities (including Common Shares "A", Preferred
          Shares "B" and American Depositary Shares, or ADSs) which have, or may
          in the future acquire, voting rights, held by such Shareholder and any
          restrictions that may apply to such securities.
        Pursuant
          to applicable law, the accredited intermediary which holds Shares in
          bearer form on behalf of a Shareholder must transmit the above requested
          information to Euroclear France, which then provides such information
          to the Company, both within a specific timeframe as provided in the
          relevant laws and regulations.
        If the accredited
          intermediary does not transmit the requested information in such timeframe
          or transmits incomplete or inaccurate information
      
      pertaining
          to its status or to the holders of the securities, the voting rights
          of the securities giving immediate or future access to the share capital
          of the Company for which the accredited intermediary is registered cannot
          be exercised until such date as the identity of the relevant security
          holder has been disclosed or rectified, and the payment of the corresponding
          dividend is postponed until such date.
        According
          to the French Commercial Code, any entity holding more than 2.5% of
          the share capital or voting rights of the Company will disclose upon
          the Companys request, the identity of any individual or entity
          holding, directly or indirectly, more than 33% of its share capital
          or voting rights attached thereto.
        In addition,
          if the accredited intermediary knowingly fails to comply with the obligation
          to disclose the identity of the relevant security holder, a court may,
          at the request of the Company or one or several Shareholders representing
          at least 5% of the share capital of the Company, deprive the Shares
          held by the security holder whose identity was not disclosed from any
          voting rights and dividends, for a period of up to five years.


144


»Additional
          Information
      Item
          10 Requirements
    for Holdings Exceeding Certain Percentages French
          Law
        French law
          provides that any individual or entity, acting alone or in concert with
          others, acquires, directly or indirectly, more than 5%, 10%, 20%, 33%,
          50% or 66% of the outstanding share capital of the Company (including
          Common Shares "A", Preferred Shares "B" and ADSs, or of the voting rights
          attached thereto (unless such individual or entity holds the total number
          of voting rights in the Company)), or that increases or decreases its
          shareholding or voting rights above or below any of those percentages,
          must notify the Company within 15 calendar days of the date it crosses
          such threshold of the number of Shares (and the voting rights attached
          thereto) and the number of ADSs it holds, individually or in concert
          with others. Such individual or entity must also notify the Conseil
          des Marchés Financiers, or CMF, within five trading days of the
          date such threshold has been crossed. Those requirements also apply
          to any registered intermediary that holds Shares on behalf of Shareholders
          who are not French residents, taking into account all the Shares held
          by such intermediary.
        French law
          and COB Regulation No. 88-02 impose additional reporting requirements
          on acquirors of more than 10% or 20% of the share capital of the Company,
          or of the equivalent voting rights at Shareholders Meetings. An
          acquiror must file a report (declaration dintention) indicating
          whether it is acting alone or in concert with others and specifying
          its intentions for the 12-month period following acquisition of its
          stake, including whether or not it intends to continue its purchases,
          to acquire control of the company or to seek nomination to the Board
          of Directors. According to applicable French law:
        this report
            must be filed with the Company, the COB and the CMF, which will then
            publish the report, within 15 days of the date it crosses such threshold,
          the acquiror
            may amend its stated intentions, provided it does so on the basis
            of significant changes in its own situation or shareholding. Upon
            any change of intention, it must file a new report.
      
      These requirements
          also apply to any registered intermediary that holds Shares on behalf
          of Shareholders who are not French residents, taking into account all
          the Shares held by such intermediary.
        Under CMF
          regulations, and subject to limited exemptions granted by the CMF, any
          person or persons acting in concert holding in excess of 33% of the
          share capital or voting rights of a French company listed on the Premier
          Marché of Euronext Paris must immediately inform the CMF and
          initiate a public tender offer for the balance of the shares and other
          securities giving access to the share capital or to voting rights of
          such company which conforms with the requirements of the CMF.
        By-laws
        In addition
          to the foregoing, the Companys by-laws provide that any person
          acting alone or in concert with others who becomes the owner of at least
          0.5%, or any multiple thereof, of the outstanding share capital or voting
          rights (including Common Shares "A", Preferred Shares "B" and ADSs)
          of the Company must notify the Company by registered mail, return receipt
          requested, within 15 calendar days of the date such threshold has been
          crossed of the number of Shares and ADSs or voting rights it holds.
          The same notification requirement applies if any person acting alone
          or in concert with others falls below such 0.5% threshold, or passes
          or falls below any multiple thereof. These requirements also apply to
          any registered intermediary that holds Shares on behalf of Shareholders
          who are not French residents, taking into account all the Shares held
          by such intermediary.


145


» Additional
  Information Publication
    by the Company of the number of voting rights outstanding In order to
          permit holders or intermediaries to give the required notice, the Company
          must publish in the BALO, not later than 15 calendar days after the
          annual Ordinary General Meeting of Shareholders, information with respect
          to the total number of voting rights outstanding as of the date of such
          meeting. In addition, if the number of outstanding voting rights changes
          by 5% or more between two annual Ordinary General Meetings, the Company
          must publish in the BALO, within 15 calendar days of such change, the
          number of voting rights outstanding and transmit such information to
          the CMF.
        Declaration
          of ADS Holding
        In order
          to facilitate compliance with the above-mentioned notification requirements
          imposed by law or by the Companys by-laws, a holder of ADSs may
          deliver any such notification and the relating rapport dintention,
          as the case may be, to the Depositary (The Bank of New York) and the
          Depositary shall, as soon as practicable, forward such notification
          to the Company and, if necessary, to the CMF and the COB.
        Applicable
          Sanctions
        In the event
          of failure to comply with the legal notification requirements, the Shares
          or voting rights in excess of the relevant threshold will be deprived
          of voting rights for all Shareholders meetings until the end of
          a two-year period following the date on which the owner thereof complies
          with the notification requirements. In addition, any Shareholder who
          fails to comply with these requirements may have all or part of its
          voting rights suspended
      
      by the Commercial
          Court at the request of the Companys Chairman, any Shareholder
          or the COB for a maximum period of five years, and may be subject to
          a € 18,000 fine.
        In the event
          of failure to comply with the notification requirements provided by
          Pechineys by-laws, one or more Shareholders holding 0.5% or more
          of the share capital or voting rights of the Company may require a meeting
          of the Shareholders to deprive the Shares in excess of the relevant
          threshold of voting rights for all Shareholders meetings for two
          years following the date on which the owner complies with such notification
          requirements.
        If the accredited
          intermediary which holds Shares on behalf of a Shareholder who is not
          a French resident does not comply with the above mentioned legal notification
          requirement, the voting rights of the Shares for which the accredited
          intermediary is registered cannot be exercised until such date as the
          notification requirement has been met, and the payment of the corresponding
          dividend is postponed until such date.
        In addition,
          if the accredited intermediary knowingly fails to comply with such notification
          requirement, a court located in the jurisdiction of the headquarters
          of the Company may, at the request of the Company or one or several
          Shareholders representing at least 5% of the share capital of the Company,
          deprive the Shares in excess of the relevant threshold of voting rights,
          and any dividends, for a period not to exceed five years. Transfer
    of Shares Prior to any
          transfer on Euronext Paris of Shares held in registered form, such Shares
          must be converted into bearer form and registered in an account maintained
          by an accredited intermediary. Dealings in Shares are initiated by the
          owner giving instructions (through an agent, if appropriate) to the
          relevant accredited intermediary. For dealings on Euronext Paris, an
          impôt sur les opérations de Bourse, or tax assessed on
          the price at which the securities were traded, is payable by French
          residents, at a rate of 0.3% on transactions up to € 153,000 and
          at a rate of 0.15% thereafter, subject to a rebate of € 23 per
          transaction and maximum assessment of € 610 per transaction. Non-residents
          of France are generally not subject to the
      
      payment of
          such impôt sur les opérations de Bourse. In addition, a
          fee or commission is payable to the French broker, accredited intermediary
          or other agent involved in the transaction regardless of whether the
          transaction occurs within or outside France. No registration duty is
          normally payable in France, unless a transfer instrument has been executed
          in France.
        An owner
          of Shares who resides outside of France may trade Shares on Euronext
          Paris. If the owner, or the broker or other agent through whom a sale
          is effected, requires assistance in this connection, an accredited intermediary
          should be contacted.


146


»Additional
          Information
      Item
          10 Authority
    Granted to the Board of Directors to Issue Securities In accordance
          with French company law, the General Shareholders Meeting may
          delegate certain powers to the Board of Directors enabling the Board
          to issue equity or non-equity securities without further approval of
          the Shareholders.
      
      The following
          table shows the dates, terms and conditions of the powers granted by
          the Companys Shareholders to the Board of Directors to issue securities,
          together with exercises of such powers by the Board, as of December
          31, 2002:  Grant of Authority
      
      Forms of capital
        increase authorized
      
      Maximum nominal
        amount (€)
      
      Decisions to exercise authority
      
      Classes of securities
        issued/options
        granted
      
      Amounts of issue (€)
      
      Expiration
        of authorityEQUITY SECURITIESMarch 28, 2002
      
      Issuance, with or without preferential subscription rights(through
        three distinct grants of authority), of any securities giving rights to
        equity securities, either immediately or in the future(1), either:(1) with preferential subscription rights for
        existing Shareholders (22nd resolution of the Shareholder's General Meeting
        held on March 28, 2002)
      
      € 490,000,000, provided that securities
        representing debt and convertible into or exchangeable for equity securities
        may not exceed € 700,000,000
      
      None
      
      None
      
      None
      
      May 27, 2004or (2) without preferential subscription rights Shareholders
        (23rd resolution of the Shareholders' General Meeting held on March 28,
        2002)
      
      € 245,000,000, provided that securities
        representing debt and convertible into or exchangeable for equity securities
        may not exceed € 700,000,000, or
      
      March 22, 2002(2)
      
      7,908,636 "Océanes" (Debt
        securities convertible into or exchangeable for existing or newly issued
        shares) (Art. L 228-91 or of the French Commercial Code)
      
      Amount of debt Securities:
          € 595,124,859
          Amount of underlying equity securities: 
          € 120,606,699
          (7,908,636 shares)
      
      May 27, 2004 (or March 27, 2004 for debt with
        warrants to purchase Shares) 
        (or March 27, 2003 for warrants to purchase Shares)or
        (3) by incorporation of premiums, provisions, profits or other items,
        the capitalization of which is authorized. (24thresolution of the Shareholders General Meeting held on March 28,
        2002)
      
      € 490,000,000
      
      None
      
      None
      
      None
      
      May 27, 2004


147


»Additional
  Information Grant of Authority
      
      Forms of capital
        increase authorized
      
      Maximum nominal
        amount(€)
      
      Decisions to exercise authority
      
      Classes of securities
        issued/options
        granted
      
      Amounts of issue (€)
      
      Expiration
        of authorityMarch 28, 2002
      
      Common
        Shares "A" to be taken up pursuant to options granted to certain executive
        officers and employees of the Company and French and foreign affiliates
        pursuant to art L. 443-5 of the French Labor Code and L. 225-138 IV of
        the French Commercial Code (25thresolution of the Shareholders if General Meeting held on March
        28, 2002).
      
      €
        37,000,000
      
      None
      
      None
      
      None
      
      March 27, 2007NON EQUITY SECURITIESMarch 28, 2002
      
      Debt
        Securities (16th Resolution of the Shareholder's if General Meeting held
        on March 28, 2002).
      
      €
        1,000,000,000
      
      None
      
      None
      
      None
      
      March 27, 2007 (1)
      The
        power delegated to the Board of Directors by Shareholders is suspended
        during periods of public or exchange offerings of the Companys Shares.(2)
      Decision
        of the Board of Directors dated March 28, 2002, followed by decisions
        of the Chairman of the Board on April 3, 4 and 8, 2002.


148


»Additional
          Information
      Item
          10 April
    2002 issuance of bonds convertible into new A Shares and/or exchangeable for
    existing A Shares (OCEANE) In
          accordance with the provisions of the last paragraph of Article 155-2
          of French Decree No. 67-236 of March 23, 1967, below is the supplementary
          report of the Companys Board of Directors (translation for convenience
          only. French version prevails) pursuant to the provisions of Articles
          155-2 (first paragraph) and 155-3 (second paragraph) of such Decree,
          relating to the issuance, pursuant to the delegation granted by the
          Shareholders at the General Meeting held on March 28, 2002 under its
          23rdresolution, of bonds convertible into new shares and/or exchangeable
          for existing shares (OCEANE):
        Implementation
          of the delegation granted in its 23rd resolution by the General Shareholders
          Meeting held on March 28, 2002: (1) The General Shareholders Meeting
          held on March 28, 2002 has, in particular, in its 23rd resolution, authorized
          the Board of Directors to implement the delegation granted by that Meeting
          in its 22nd resolution to issue, without maintenance of shareholders
          preferential subscription rights, any security giving access immediately
          or in time, to a portion of the Companys share capital, within
          the limits of the following amounts:
        the
            maximum nominal amount of shares that may be issued without preferential
            subscription rights pursuant to this authorization shall not exceed
            € 245 million in the aggregate, including the nominal amount
            of the capital increases needed, as the case may be, to maintain the
            rights of holders of certain securities giving access in time to the
            Companys share capital;
          the
            maximum nominal amount of any debt securities giving access in time
            to shares of the Companys share capital that may be issued without
            preferential subscription rights pursuant to such delegation shall
            not exceed € 700 million in the aggregate, or the equivalent
            of said amount in the event of an issuance in foreign currency or
            any other accounting unit established by reference to a group of currencies.In
          its 23rd resolution, the Ordinary and Extraordinary Shareholders Meeting
          of March 28, 2002 also granted to the Board of Directors all powers,
          with the possibility of sub-delegating to its Chairman, under the conditions
          provided for by law, to implement such authorization granted hereunder,
          in particular to:
        determine
            the conditions of each issuance, in particular, determine the issue
            dates, terms and conditions, the nature and form of the securities
            to be issued, the aggregate amount and the unitary issue price, the
            amount of any premium requested, as the case may be, the method of
            payment of securities issued or to be issued, the terms and conditions
            of the exercise of the rights attached to the securities giving access
            immediately or in time to a portion of the Companys share capital
            and, in particular, to set the date, including retroactively, from
            which the shares shall bear dividends;
          provide
            for the suspension of the exercise of rights attached to the securities
            that give access in time to a portion of the Companys share
            capital for a period of up to three months, as well as to determine
            the terms
      
      and
            conditions under which any rights of holders of certain securities
            will be maintained, as the case may be, in compliance with applicable
            laws and regulations; and
          generally
            speaking, enter into all agreements, take all measures and carry out
            all formalities for the issuance and financial servicing of the securities
            issued pursuant to the authorization granted thereunder and for the
            exercise of rights attached thereto, acknowledge each capital increase
            resulting from any issuance carried out pursuant to this authorization
            and amend the Companys by-laws accordingly.(2)
          During
          the Meeting held on March 28, 2002, the Board of Directors:
        decided
            that the Company could issue by way of a public offering, without
            shareholders preferential subscription rights and without granting
            shareholders a priority subscription period, bonds convertible into
            new Common Shares "A" and/or exchangeable for existing Common Shares
            "A" under the conditions and within the limits it has set;
          granted
            to the Chairman of the Board of Directors a sub-delegation until July
            24, 2002, with respect to these same limits and conditions, to fix
            the final terms of such issue, in particular, the subscription price,
            the conversion periods and parities and the size of the issuance,
            as well as to determine the terms of this supplementary report provided
            by article
            155-2 of Decree No. 67-236 of March 23, 1967.(3)
          On April 2, 2002, pursuant to the sub-delegation granted by the Board
          of Directors on March 28, 2002, the Chairman of the Board of Directors
          determined the preliminary conditions of the issuance of the OCEANE,
          determining that each OCEANE will bear interest at a rate of 1.25% per
          annum. A preliminary prospectus (note dopération préliminaire)
          comprising the preliminary terms of the issuance was prepared and received
          COB visa number 02-303 dated April 3, 2002.
        (4)
          On April 3, 2002, following a review by the bookrunners of the institutional
          offering, the Chairman of the Board of Directors determined the final
          terms of this issuance of bonds on the basis of a reference price of
          the Common Shares "A" of € 58.80, in particular setting the principal
          amount and issue price of each OCEANE at € 75.25, representing
          a premium of approximately 28% compared with the reference price of
          the Common Shares "A"; set the maximum number of OCEANE to be issued
          by the Company at 7,908,636; resolved to proceed with the issuance by
          the Company of 6,877,076 OCEANE representing a total amount of € 517,499,969;
          granted an over-allotment option to the joint global coordinators, limited
          to 1,031,560 additional shares representing an additional total amount
          of € 77,624,890; set the gross yield to maturity at 3.25%;
          and set the redemption price of each OCEANE at € 82.81 at maturity
          on January 1, 2007, representing approximately 110.05% of their nominal
          amount. A final prospectus (note dopération definitive),
          comprising all the


149


» Additional
  Information final
          terms of the issuance, was also prepared and received COB visa number
          02-306 dated April 3, 2002.
        (5) On
          April 8, 2002, and acknowledging the exercise in full of the over-allotment
          option granted to the joint global coordinators, the Chairman of the
          Board of Directors resolved to fix the total principal amount of this
          issuance of OCEANE to the final amount of € 595,124,859 divided
          into 7,908,636 OCEANE convertible into a maximum number of 7,908,636
          new Common Shares "A" in the event of conversion of all the issued OCEANE,
          subject to adjustments of the conversion/exchange ratio as set forth
          in paragraph 2.6.7.3 (entitled "Adjustment in the event of financial
          transactions") of the final prospectus (note dopération
          definitive) which received COB visa number 02-306 dated April 3, 2002.
      
      Effect
          of issuance and conversion of 7,908,636 bonds convertible into new Common
          Shares "A" and/or exchangeable for existing Common Shares "A" on shareholders
          and on the portion of Shareholders equity per Common Share "A".
        For information
          purposes, assuming that all the OCEANE are converted into new Common
          Shares "A", the tables below show the effect on existing Shareholders
          of the conversion of the OCEANE into new Common Shares "A" as follows:
        The
            composition of the Companys share capital, assuming that all
            the OCEANE are converted into new Common Shares "A", and after accounting
            for the exercise of all stock options previously granted by the Companys
            Board of Directors, in place as at December 31, 2001, would be as
            follows:  Number of Shares
   
   Number of SharesOutstanding as at
   
   Outstanding as atJanuary 30, 2002
   
   January 30, 2002(non-diluted basis)
   
   (diluted basis)(1)As at January 30, 2002
   82,481,467
   
   85,220,814Following issuance and conversion of 6,877,076 OCEANE
   89,358,543
   
   92,097,890Following issuance and conversion of 7,908,636 OCEANE
   90,390,103
   
   93,129,450 (1)
      Following
        the issuance of 2,739,347 new Common Shares "A" resulting from the exercise
        of stock options granted by the Board of Directors (on the basis of stock
        options existing as at December 31, 2001).  Apart
          from the OCEANE and the stock options mentioned above, there are no
          other financial instruments issued by the Company giving access at a
          later date to the Companys share capital.
      
      The
            effect of this issuance and conversion of OCEANE on the percentage
            shareholding of a shareholder who held a 1% interest in the Companys
            share capital prior to this issue and who did not subscribe the OCEANE
            is as follows (on the basis of the number of Common Shares "A" outstanding
            as at January 30, 2002):  Percentage Shareholding
   
   Percentage Shareholding(non-diluted basis)
   
   (diluted basis)(1)Prior to the issuance of the OCEANE
   1.00
   
   0.97Following issuance and conversion of 6,877,076 OCEANE
   0.92
   
   0.90Following issuance and conversion of 7,908,636 OCEANE
   0.91
   
   0.89 (1)   Following
        the issuance of 2,739,347 new Common Shares "A" resulting from the exercise
        of stock options granted by the Board of Directors (on the basis of stock
        options existing as at December 31, 2001).


150


»Additional
          Information
      Item
          10  The
            effect of this issuance and conversion of the OCEANE on the   proportion
            of consolidated shareholders equity as at December 31, 2001
      
      attributable
          to the holder of one Common Share "A" who did not subscribe for OCEANE
          is as follows:  Portion
        of Share
      
      Portion
        of ShareCapital
        per Share
      
      Capital
        per Share(non-diluted
        basis)(1)
      
      (diluted
        basis)(1)(2)Prior
        to the issuance of the OCEANE
      € 41.16
      
      € 41.16Following
        issuance and conversion of 6,877,076 OCEANE
      € 43.79
      
      € 43.71Following
        issuance and conversion of 7,908,636 OCEANE
      € 44.15
      
      € 44.06 (1)
      Excluding
        minority interests.(2)
      Following
        the issuance of 2,739,347 new Common Shares "A" resulting from the exercise
        of new stock options granted by the Board of Directors (on the basis of
        stock options existing as at December 31, 2001).  In the
          event that all the OCEANE are exchanged for existing Common Shares "A",
          the position of the Companys existing shareholders would not be
          affected, except that the voting rights and dividend rights of existing
      
      Common
          Shares "A" currently held by the Company and delivered to holders of
          OCEANE will be reinstated. Theoretical
    effect of the issuance of 7,908,636 OCEANE on the market value of the Common
    Shares "A" The issuance
          price of the OCEANE, set at € 75.25 per OCEANE, represents approximately
          128% of the market value of each Common Share "A" which, at the time
          of the determination of the final terms of the issuance on April 3,
          2002, was equal to € 58.80.
        On the
          basis of 82,481,467 Shares outstanding at January 30, 2002, the issuance
          of OCEANE (€ 595,124,859) equals approximately 9.6% of the Companys
          market capitalization (€ 6,206,730,391) based on the issuance price
          of the OCEANE.
        After
          accounting for the exercise of all stock options existing as at December
          31, 2001 the issuance of OCEANE represents approximately 9.3% of the
          Companys market capitalization based on the issuance price of
          the OCEANE.
      
      Taking
          into account the issuance price of the OCEANE and the trading volume,
          the issuance of OCEANE should not therefore have a theoretical effect
          on the market value of the Common Shares "A". Taking into account the
          limited share capital percentage represented by Preferred Shares "B"
          and the fact that the market value of the Preferred Shares "B" is virtually
          identical to the Common Shares "A", the issuance of OCEANE should not
          have a greater theoretical effect on the market value of the Preferred
          Shares "B" than on the market value of the Common Shares "A".
        This supplementary
          report of the Statutory Auditors on this issuance will be presented
          to shareholders during the next General Shareholders Meeting scheduled
          to take place on second notice on April 3, 2003, in accordance with
          the same regulatory provisions.


151


»Additional
  Information  Ownership
    of ADSs or Shares by Non-French Persons Under French
          law, there is no limitation on the right of non-residents or non-French
          Shareholders to own or, where applicable, to vote securities of a French
          company.
        A French
          law dated February 14, 1996 abolished the requirement that a person
          who is not a resident of the European Union obtain an autorisation préalable,
          or prior authorization, prior to acquiring a controlling interest in
          a French company except if the relevant company engages in certain businesses.
          However, any person not residing in France, any group of non-French
          residents acting in concert, or any French resident entity controlled
          by a non-French resident person or group must file a déclaration
          administrative, or administrative notice, with the French authorities
          in connection with (i) the acquisition of a controlling interest in
          any French company or (ii) the increase of a controlling interest in
          a French company, unless the non-French resident person or group already
          controls more than two-thirds of the share capital or voting rights
          of the relevant company prior to such increase.
      
      Under existing
          administrative rulings, ownership of 20% or more of a listed companys
          share capital or voting rights is regarded as a controlling interest,
          but a lower percentage may be held to be a controlling interest in certain
          circumstances (depending upon such factors as the acquiring partys
          intentions, its ability to elect directors or financial reliance by
          the French company on the acquiring party).
        In addition,
          shares held, in registered form or bearer form, by non-French residents
          may be held on a shareholders behalf in a collective account or
          in several individual accounts by an intermediary. This intermediary
          must declare that it is acting as an intermediary and may be requested
          by the company to provide the identity of the shareholders on whose
          behalf it is acting. Failure to declare that it is acting as an intermediary
          or the provision of inaccurate or incomplete information about the shareholders
          can result in the deprivation of the right to vote or the right to receive
          dividends, or both. Other
    Limitations For other
          limitations affecting Shareholders, see "- Holding of Shares"; "- Identification
          of Holders in Bearer Form" and "- Transfer of Shares". Material
    Contracts In the opinion
          of the Company, no single contract taken on an individual basis can
          be considered material to the business of the Group taken as a whole. Exchange
    Controls Under current
          French exchange control regulations, there are no limitations on the
          amount of payments that may be remitted by a French company to non-residents.
          Laws and regulations concerning foreign exchange controls do require,
          however, that all payments on transfers of funds (including
      
      payments
          of dividends to foreign shareholders) made by a French resident to a
          non-resident be handled by an accredited intermediary. In France, all
          registered banks and substantially all credit establishments are accredited
          intermediaries.


152


»Additional
          Information
      Item
          10  French
    Taxation The following
          generally summarizes the material French tax consequences of owning
          and disposing of Shares. The statements relating to French tax laws
          set out below are based on the laws in force as of the date hereof,
          and are subject to any changes in applicable French tax laws or in any
          applicable treaty with France occurring after such date.
        This discussion
          is intended only as a descriptive summary and does not purport to be
          a complete analysis or list of all potential tax effects of the
      
      purchase
          or ownership of the Shares. In particular, this summary may only be
          relevant to Shareholders who are not resident of France for French tax
          purposes and do not hold their Shares in connection with a permanent
          establishment in France.
        Potential
          purchasers of Shares are urged to consult their own tax advisors concerning
          the consequences of ownership and disposal of Shares. Taxation
    on Sale or Disposal of Shares Depending
          upon the provisions of any relevant tax treaty, persons who are not
          French residents for the purpose of French taxation (as well as, under
          certain conditions, foreign states, international organizations and
          certain foreign public bodies) and who have held, directly or indirectly,
          and as relates to individual, alone or with relatives, not more than
          25% of the dividend rights (droits aux bénéfices sociaux)
          of the Company at any time during the preceding five years, are generally
          not subject to any French
      
      income tax
          or capital gains tax on any sale or disposal of Shares.
        If a Share
          transfer is evidenced by a written agreement, such Share transfer agreement
          is, in principle, subject to registration formalities and therefore
          to a 1% registration duty assessed on the higher of the purchase price
          and the market value of the Shares (subject to a maximum assessment
          of €3,049
          per transfer) provided that, under certain circumstances, no duty is
          due if such written Share transfer agreement is executed outside France. Taxation
    of Dividends In France,
          dividends are paid out of after-tax income. French residents, who receive
          dividends from French companies, are generally entitled to a tax credit,
          known as the avoir fiscal.
        The amount
          of the avoir fiscal is generally equal to:
        50% of
            the dividend paid for (i) individuals and (ii) companies which own
            at least 5% of the capital and meet the conditions to qualify under
            the French parent subsidiary regime of the French distributing company;
            or
          15% of
            the dividend paid for the other Shareholders who used the avoir fiscal
            in 2002, and 10% of the dividend paid for such other Shareholders
            who will use the avoir fiscal as of January 1, 2003.In addition,
          if the distribution of dividends by the Company gives rise to the précompte,
          Shareholders entitled to the avoir fiscal at the rate of 15%, and then
          10%, will generally be entitled to an additional amount of avoir fiscal
          equal to:
        70% of
            the précompte paid in cash by the Company for Shareholders
            entitled to use the avoir fiscal at the rate of 15%; and
          80% of
            the précompte paid in cash by the Company for Shareholders
            entitled to use the avoir fiscal at the rate of 10%.
      
      As indicated
          below, the précompte is a tax which is paid by French companies
          when they distribute dividends out of certain profits and such dividends
          give rise to the avoir fiscal (see paragraph below relating to the précompte).
        Under French
          domestic law, dividends paid to non-residents are normally subject to
          a 25% French withholding tax and non-residents are not eligible for
          the benefit of the avoir fiscal. Under most tax treaties entered into
          between France and other countries, such withholding tax may, subject
          to certain conditions, be reduced and give rise in such other country
          to a tax credit of the amount of the tax withheld or, in the case of
          certain tax treaties, be eliminated.
        Furthermore,
          the following Territoires dOutre-Mer and other territories and
          countries have entered into treaties with France whereby tax residents
          of such countries and territories may, under certain circumstances,
          generally obtain from the French tax authorities a reduction (generally
          15%) of such withholding tax and a refund of the avoir fiscal (net of
          applicable with holding tax).


153


» Additional
  Information Australia
      Iceland
      Mauritius
      SwedenAustria
      India
      Mexico
      SwitzerlandBelgium
      Israel
      Namibia
      TogoBolivia
      Italy
      Netherlands
      TurkeyBrazil
      Ivory
        Coast
      New
        Zealand
      UkraineBurkina Faso
      Japan
      Niger
      United
        KingdomCanada
      Latvia
      Norway
      United
        States of AmericaEstonia
      Lithuania
      Pakistan
      VenezuelaFinland
      Luxembourg
      SenegalGabon
      Malaysia
      SingaporeGermany(1)
      Mali
      South
        KoreaGhana
      Malta
      SpainTerritoires d'Outre-Mer
        and OtherMayotteNew CaledoniaSaint-Pierre et
        Miquelon (1)
        According to a common statement of the French and German tax authorities
        dated July 13, 2001, dividends paid to German resident holders who are
        not individuals as of January 1, 2001 no longer give right to the avoir
        fiscal. In addition, according to a supplementary agreement to the tax
        treaty between France and Germany which was signed by the French Republic
        and the Federal Republic of Germany on December 20, 2001, dividends paid
        to German resident individuals would no longer give right to the avoir
        fiscal. Such supplementary agreement has not yet been adopted but, if
        adopted, should apply retroactively as of January 1, 2002.  Treaties with
          some of the countries and territories listed above contain specific
          limitations applicable to corporate entities entitled to benefit from
          the avoir fiscal, or limit the rights to the avoir fiscal strictly to
          individual residents (as opposed to corporate entities).
        Dividends
          paid to non-residents of France benefiting from the avoir fiscal in
          accordance with a tax treaty will generally be subject, on the date
          of payment, to the withholding tax at the reduced rate provided for
          by such treaty (subject to filing formalities) rather than to the French
          withholding tax at the rate of 25% to be later reduced to the treaty
          rate; provided, however, that they establish their entitlement to such
          reduced rate before the date of payment.
      
      Amounts distributed
          as dividends by French companies out of profits which have not been
          taxed at the ordinary corporate income tax rate or which have been earned
          and taxed more than five years before the distribution and which give
          rise to the avoir fiscal are subject to a tax known as the précompte.
          The précompte is paid by the distributing company to the French
          tax authorities. It is equal to one half of the nominal dividend distributed.
          When a tax treaty in force does not provide for a refund of the avoir
          fiscal or when the non-resident investor is not entitled to such refund
          but is otherwise entitled to the benefits of a tax treaty, such investor
          may obtain from the French tax authorities a refund of such précompte
          actually paid in cash by the Company, if any (net of applicable withholding
          tax). Estate
    and Gift Tax France imposes
          an estate and gift tax on shares of French companies acquired by inheritance
          or gift from a non-resident of France. France has entered into estate
          and gift tax treaties with a number of countries pursuant to which,
          assuming certain conditions are met, residents of the treaty
      
      countries
          may be exempted from such tax. Prospective investors in Shares should
          consult their own advisors concerning the applicability of French estate
          and gift tax to their shareholding in the Company and the availability
          of, and the conditions for claiming exemption under, such a treaty. Wealth
    Tax In the absence
          of a more favorable tax treaty, the French wealth tax (impôt de
          solidarité sur la fortune) does not apply to the Shares of non-French
          resident individual investors owning directly or indirectly less than
          10% of
      
      the Companys
          share capital, provided that these Shares do not enable their holder
          to exercise influence on the Company.


154


»Additional
          Information
      Item
          10 Taxation
    of U.S. Investors The following
          is a general summary of the material United States federal income and
          French tax consequences to U.S. Holders. A "U.S. Holder" is a beneficial
          owner of one or more ADSs or Shares (a) who owns, directly, indirectly
          or by attribution, less than 10% of the share capital of the Company,
          (b) who is (i) an individual citizen or resident of the United States
          for United States federal income tax purposes, (ii) a corporation or
          certain other entity created or organized in or under the laws of the
          United States or any state thereof, (iii) an estate, whose income is
          subject to United States federal income taxation regardless of its source,
          or (iv) a trust if a U.S. court can exercise primary supervision over
          the administration of the trust and one or more U.S. persons are authorized
          to control all substantial decisions of the trust, (c) who is entitled
          to the benefits of the Treaty (as defined below) under the Limitation
          on Benefits provisions contained in the Treaty, (d) who holds the ADSs
          or Shares as capital assets and (e) whose functional currency is the
          U.S. dollar. Certain holders (including but not limited to United States
          expatriates, insurance companies, tax-exempt organizations, financial
          institutions, persons subject to the alternative minimum tax, securities
          broker-dealers and persons holding the ADSs or Shares as part of a straddle,
          hedging or conversion transaction) may be subject to special rules not
          discussed below. If a partnership holds ADSs or Shares, the tax treatment
          of a partner generally will depend upon the status of the partner and
          the activities of the partnership. If a U.S. Holder is a partner in
          a partnership that holds ADSs or Shares, the Holder is urged to consult
          its own tax advisor regarding the specific tax consequences of owning
          and disposing of ADSs or Shares. Because this is a general
      
      summary, U.S.
          Holders are advised to consult their own tax advisor with respect to
          the ownership and disposition of ADSs and the Shares.
        The statements
          regarding United States and French tax laws set out below assume that
          each obligation in the Deposit Agreement of the Company pursuant to
          which the ADSs have been issued and any related agreement will be performed
          in accordance with its terms and are based on United States and French
          laws and the double taxation conventions between the United States and
          France in force, and on the practice of the French tax authorities,
          all as of the date hereof, and as a consequence are subject to any changes
          in such laws, conventions or practice occurring after such date. In
          this regard, we refer to the Convention between the United States of
          America and the French Republic for the Avoidance of Double Taxation
          and the Prevention of Fiscal Evasion with Respect to Taxes on Income
          and Capital of August 31, 1994 (the "Treaty") which entered into force
          on December 30, 1995. In addition, tax regulations were issued by the
          French tax authorities (the "Regulations"). The Treaty and the Regulations
          affect the French withholding tax rules applicable to dividends to which
          an avoir fiscal is associated and affect the timing of payments to nonresidents
          of France that are entitled to treaty benefits pursuant thereto.
        For purposes
          of the Treaty and the United States Internal Revenue Code of 1986, as
          amended (the "Code"), U.S. Holders of American Depositary Receipts ("ADRs")
          will be treated as owners of the ADSs evidenced thereby and the Shares
          represented by such ADSs. Taxation
    of Dividends Withholding
    / Avoir Fiscal In France,
          dividends are paid out of after-tax income. French residents, who receive
          dividends from French companies, are generally entitled to a tax credit,
          known as the avoir fiscal.
        The amount
          of the avoir fiscal is generally equal to:
        50% of
            the dividend paid for (i) individuals and (ii) companies which own
            at least 5% of the capital of the French distributing company and
            meet the conditions to qualify under the French parent-subsidiary
            regime; or
          15% of
            the dividend paid for the other Shareholders who used the avoir fiscal
            in 2002, and 10% of the dividend paid for such other Shareholders
            who will use the avoir fiscal as of January 1, 2003.
      
      In
          addition, if the distribution of dividends by the Company gives rise
          to the précompte, Shareholders entitled to the avoir fiscal at
          the rate of 15%, and then 10%, will generally be entitled to an additional
          amount of avoir fiscal equal to:
        70% of
              the précompte paid in cash by the Company for Shareholders
              entitled to use the avoir fiscal at the rate of 15%; and
            80% of
              the précompte paid in cash by the Company for Shareholders
              entitled to use the avoir fiscal at the rate of 10%.
        As
          indicated below, the précompte is a tax which is paid by French
          companies when they distribute dividends out of certain profits and
          such dividends give rise to the avoir fiscal (see paragraph below relating
          to the précompte).


155


»Additional
  Information Under French
          domestic law, dividends paid to non residents are normally subject to
          a 25% French withholding tax and non-residents are not eligible for
          the benefit of the avoir fiscal.
        Under the
          Treaty, the rate of French withholding tax on dividends paid to a U.S.
          Holder whose ownership of the ADSs or Shares is not effectively connected
          with a permanent establishment or a fixed base in France is reduced
          to 15%. According to the Regulations, dividends paid to an Eligible
          U.S. Holder, as defined below, will be immediately subject to the reduced
          rate of 15%, provided that such holder establishes before the date of
          payment of the dividend that it is a resident of the United States in
          accordance with the procedures described below. An Eligible U.S. Holder
          would also be entitled to a payment equal to the avoir fiscal, less
          a 15% withholding tax. As noted below, such payment will not be made
          until after the close of the calendar year in which the dividend was
          paid and only upon receipt by the French tax authorities of a claim
          made by the Eligible U.S. Holder for such payment in accordance with
          the procedures set forth below.
        An Eligible
          U.S. Holder is a U.S. Holder whose ownership of ADSs or Shares is not
          effectively connected with a permanent establishment or fixed base in
          France, and who is (i) an individual or other non-corporate holder that
          is a resident of the United States as defined pursuant to the provisions
          of the Treaty, (ii) a United States corporation, other than a regulated
          investment company, (iii) a United States corporation that is a regulated
          investment company only if less than 20% of its shares are beneficially
          owned by persons who are neither citizens nor residents of the United
          States or (iv) a partnership or trust that is treated as a resident
          of the United States as defined pursuant to the provisions of the Treaty,
          but only to the extent that its partners, beneficiaries or grantors
          would qualify under clause (i) or (ii) above.
        In general,
          an Eligible U.S. Holder may receive a payment of the avoir fiscal only
          if such holder (or its partners, beneficiaries or grantors, if the holder
          is a partnership or trust) attests that it is subject to United States
          federal income taxes on the payment of the avoir fiscal and the related
          dividend. Certain entities are not entitled to the avoir fiscal or are
          only entitled to receive a reduced portion of the avoir fiscal. Certain
          tax-exempt "U.S. Pension Funds", as discussed below, and certain tax-exempt
          entities (including certain State-owned institutions, not-for-profit
          organizations and individuals with respect to dividends beneficially
          owned by such individuals and derived from an investment in a retirement
          arrangement) ("Other Tax-Exempt Entities"), that own, directly and indirectly,
          less than 10% of the capital of the Company, and that satisfy certain
          filing formalities specified in the Regulations (discussed above) (i)
          are entitled to a payment, subject to French withholding tax, equal
          to 30/85 of the gross avoir fiscal (the "partial avoir fiscal") and
          (ii) are eligible for the reduced withholding tax rate of 15% on dividends.
          A "U.S. Pension Fund" is a fund that is subject to the Code provisions
          relating to tax-exempt pension funds, including Section 401(a) (qualified
          retirement plans), Section 403(b) (tax deferred annuity contracts) or
          Section 457 (deferred compensation plans) of the Code and that is established
          and managed in order to pay retirement benefits.
      
      Dividends
          paid to an Eligible U.S. Holder will be subject to the reduced withholding
          tax rate of 15% at the time the dividend is paid if (i) such holder
          duly completes and provides the paying agent with French Treasury Form
          RF 1 EU-NO. 5052 (the "Form") together with, if such holder is not an
          individual, an affidavit attesting that it is the beneficial owner of
          all the rights attached to the full ownership of the ADSs or Shares,
          including, but not limited to dividend rights, before the date of payment
          of the relevant dividend, or if (ii) completion of the Form is not possible
          prior to the payment of dividends, such holder duly completes and provides
          the institution responsible for the management of the securities account
          (établissement gestionnaire du compte titre) with a simplified
          certificate (the "Certificate") stating that (a) such holder is a United
          States resident as defined pursuant to the provisions of the Treaty,
          (b) such holders ownership of the ADSs or Shares is not effectively
          connected with a permanent establishment or fixed base in France, (c)
          such holder owns all the rights attached to the full ownership of the
          ADSs or Shares, including but not limited to dividend rights, (d) such
          holder meets all the requirements of the Treaty for obtaining the benefits
          of the reduced rate of withholding tax and the right to payment of the
          French avoir fiscal and (e) such holder claims the reduced rate of withholding
          tax and payment of the avoir fiscal. Dividends paid to a U.S. Holder
          that is not entitled to the avoir fiscal (i.e., a holder other than
          an Eligible U.S. Holder) or to an Eligible U.S. Holder that has not
          filed a completed Form or Certificate before the dividend payment date
          will be subject to French withholding tax at the rate of 25%. Such a
          holder may claim a refund of the excess withholding tax and an Eligible
          U.S. Holder may claim the avoir fiscal by completing and providing the
          French tax authorities with the Form before December 31 of the second
          calendar year following the year during which the dividend was paid.
          U.S. Pension Funds and Other Tax-Exempt Entities are subject to the
          same general filing requirements as Eligible U.S. Holders except that
          they may have to supply additional documentation evidencing their entitlement
          to these benefits.
        Eligible
          U.S. Holders, U.S. Pension Funds and Other Tax-Exempt Entities must
          file the Form and, where applicable, the affidavit, in order to receive
          payment of the avoir fiscal or partial avoir fiscal (whichever is applicable).
          The avoir fiscal or partial avoir fiscal is generally expected to be
          paid to Eligible U.S. Holders, U.S. Pension Funds and Other Tax-Exempt
          Entities within 12 months of filing the Form, but not before January
          15 following the end of the calendar year in which the related dividend
          is paid. Similarly, any French withholding tax refund is generally expected
          to be paid to U.S. Holders within 12 months of filing the form, but
          not before January 15 following the end of the calendar year in which
          the related dividend is paid.
        The Form
          or the Certificate, together with their respective instructions, will
          be provided by the Depositary to all U.S. Holders of ADRs registered
          with the Depositary and are also available from the United States Internal
          Revenue Service. The Depositary will arrange for the filing with the
          French tax authorities of all Forms or Certificates completed by U.S.
          Holders of ADRs that are returned to the Depositary within the time
          periods specified by the Depositary in its notification to U.S. Holders
          of ADRs.


156


»Additional
          Information
      Item
          10  For United
          States federal income tax purposes, the gross amount of a dividend and
          the amount of the avoir fiscal paid to a U.S. Holder, including any
          French withholding tax thereon, will be included in gross income as
          dividend income on the date each such payment is received (which, in
          the case of a U.S. Holder of ADSs, will be the date of receipt by the
          Depositary) to the extent paid or deemed paid out of the Companys
          current or accumulated earnings and profits as calculated for United
          States federal income tax purposes. Distributions in excess of current
          earnings and profits will be treated first as a tax-free return of capital
          to the extent of the U.S. Holders tax basis in the ADSs or Shares,
          and to the extent in excess of such tax basis, will be treated as gain
          from a sale or exchange of such ADSs or Shares. No dividends received
          deduction will be allowed with respect to dividends paid by the Company.
          Such dividends will generally constitute foreign source "passive" income
          or (in the case of certain holders) "financial services" income for
          foreign tax credit purposes. The amount of any dividend paid in euros,
          including the amount of any French taxes withheld therefrom, will be
          equal to the U.S. dollar value of the euros on the date such dividend
          is included in income (which, for a U.S. Holder of ADSs, will be the
          date of receipt by the Depositary), regardless of whether the payment
          is in fact converted into U.S. dollars. A U.S. Holder may be required
          to recognize United States source ordinary income or loss
      
      upon a subsequent
          sale or disposition of euros. Moreover, a U.S. Holder may be required
          to recognize foreign currency gain or loss, which will generally be
          United States source ordinary income or loss, in connection with the
          receipt of a refund of any French taxes withheld from a dividend in
          excess of the Treaty rate of 15%.
        French withholding
          tax imposed at the Treaty rate of 15% on dividends paid by the Company
          and on any related payment of the avoir fiscal is treated as payment
          of a foreign income tax and, subject to certain conditions and limitations,
          may generally be claimed as a credit against such U.S. Holders
          United States federal income tax liability. Alternatively, a U.S. Holder
          may claim foreign taxes paid in a particular year as an itemized deduction.
          A deduction does not reduce United States tax on a dollar-for-dollar
          basis like a tax credit. The deduction, however, is not subject to the
          limitations applicable to foreign tax credits. The United States Treasury
          has expressed concerns that parties to whom ADSs are released may be
          taking actions that are inconsistent with the claiming of foreign tax
          credits for U.S. holders of ADSs. Accordingly, the discussion above
          regarding the creditability of French withholding tax could be affected
          by future actions that may be taken by the United States Treasury. Précompte Amounts distributed
          as dividends by French companies out of profits which have not been
          taxed at the ordinary corporate income tax rate or which have been earned
          and taxed more than five years before the distribution and which give
          rise to the avoir fiscal are subject to a tax known as the "précompte".
          The précompte is paid by the distributing company to the French
          tax authorities and is equal to one-half of the nominal dividend distributed.
        U.S. Holders
          not entitled to the avoir fiscal and U.S. Pension Funds and Other Tax
          Exempt Entities entitled to the partial avoir fiscal only may generally
          obtain a refund from the French tax authorities of the précompte
          paid by the Company with respect to the dividends distributed. Pursuant
          to the Treaty, the amount of the précompte refunded to United
          States residents is reduced by the 15% withholding tax applicable to
          dividends and, where applicable, by the partial avoir fiscal paid to
          U.S. pension funds
      
      and other
          Tax Exempt Entities. A U.S. Holder is only entitled to a refund of précompte
          actually paid in cash by the Company and is not entitled to a refund
          of the précompte paid by the Company by means of offsetting French
          and/or foreign tax credits.
        A U.S. Holder
          entitled to a refund of the précompte must apply for such refund
          by filing a French Treasury form RF 1 B EU-NO.5053 before the end of
          the second calendar year following the year in which the related dividend
          was paid. The form and its instructions are available from the United
          States Internal Revenue Service or at the Centre des Impôts des
          Non-Résidents (9, rue dUzès, 75094 Paris Cedex 2,
          France).
        For United
          States federal income tax purposes, the amount of the précompte
          paid to a U.S. Holder generally will be included in gross income as
          dividend income on the date such payment is received.


157


»Additional
  Information Taxation
    of Capital Gains In general,
          under the Treaty, a U.S. Holder who is a resident of the United States
          for purposes of the Treaty will not be subject to French tax on any
          capital gain derived from the sale or exchange of ADSs or Shares unless
          the ADSs or Shares form part of the business property of a permanent
          establishment or fixed base that the U.S. Holder has in France. Special
          rules apply to individuals who are residents of more than one country.
        The deposit
          or withdrawal of Shares in exchange for ADSs by a U.S. Holder under
          the Deposit Agreement will not be subject to United States federal income
          tax. In general, for United States federal income tax purposes, a
      
      U.S. Holder
          will recognize capital gain or loss on the sale or exchange of ADSs
          or Shares in the same manner as on the sale or exchange of any other
          ADSs or Shares held as capital assets. Such gain or loss, if any, will
          generally be United States source gain or loss, and will be treated
          as a long-term capital gain or loss if the holding period in the ADSs
          or Shares exceeds one year at the time of sale or exchange. In the case
          of a U.S. Holder who is an individual, capital gains, if any, generally
          will be subject to United States federal income tax at preferential
          rates if specified minimum holding periods are met. The deductibility
          of capital losses is subject to significant limitations. French
    Estate and Gift Taxes Pursuant to
          "The Convention Between the United States of America and the French
          Republic for the Avoidance of Double Taxation and the Prevention of
          Fiscal Evasion with Respect to Taxes on Estates, Inheritance and Gifts
          of November 24, 1978", a transfer of ADSs or Shares by gift or by reason
          of the death of a U.S. Holder that would otherwise be subject to French
          gift or
      
      inheritance
          tax, respectively, will not be subject to French tax unless (i) the
          donor or the transferor is domiciled in France at the time of making
          the gift, or at the time of his or her death, or (ii) the ADSs or Shares
          were used in, or held for use in, the conduct of a business through
          a permanent establishment or fixed base in France. French
    Wealth Tax The French
          wealth tax does not generally apply to the ADSs or Shares of a U.S.
          Holder who is a resident of the United States as defined pursuant to
      
      the provisions
          of the Treaty. U.S.
    Information Reporting and Backup Withholding Dividend payments
          with respect to ADSs or Shares and proceeds from the sale, exchange
          or redemption of ADSs or Shares may be subject to information reporting
          to the Internal Revenue Service and possible United States backup withholding
          at a current rate of 30%. Backup withholding will not apply, however,
          to a Holder who furnishes a correct taxpayer identification number or
          certificate of foreign status and makes any other required certification
          or who is otherwise exempt from backup withholding. United States persons
          who are required to establish their exempt status generally must provide
          such certification on Internal Revenue Service Form W-9 (Request for
          Taxpayer Identification Number and Certification). Non-U.S. holders
          generally are not subject to United States information
      
      reporting
          or backup withholding. However, such holders may be required to provide
          certification of non-U.S. status in connection with payments received
          in the United States or through certain United States-related financial
          intermediaries.
        Backup withholding
          is not an additional tax. Amounts withheld as backup withholding may
          be credited against a Holders United States federal income tax
          liability, and a Holder may obtain a refund of any excess amounts withheld
          under the backup withholding rules by filing the appropriate claim for
          refund with the Internal Revenue Service and furnishing any required
          information.


158


»Additional
          Information
      Item
          10 Documents
    on Display The Company
          is subject to the information requirements of the U.S. Securities Exchange
          Act of 1934, as amended (the "Exchange Act"), and files reports and
          other information with the U.S. Securities and Exchange Commission (the
          "SEC"). Copies of all reports filed by the Company with the SEC may
          be inspected and copied at the Public Reference Section of
      
      the SEC at
          Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
          20549.
        For more
          information as to where to find public information on the Company, see
          the section entitled "Shareholder Communications".


159


»Additional
  Information


160


»Quantitative
          and Qualitative Disclosures About Market Risk
      Item
          11  See "Item 5. Operating and Financial Review and Prospects - General Information".


161


» Additional
  Information


162


»Description
          of Securities Other than Equity Securities
      Item
          12  See "Item 5. Operating and Financial Review and Prospects - General Information".


163


»Defaults,
          dividend Arrearages and Delinquencies
      »Item
          13  Not Applicable.


164


»Material
          Modifications to the Rights of Security Holders and Use of proceeds
      Item
          14  To the knowledge
          of the Company, there have been no material modifications to instruments
          defining the rights of holders of the Companys Shares other than
          the following. The annual general shareholders meeting of April 3, 2003,
          passed a resolution proposed by the Board of Directors of Pechiney to
          harmonize Pechineys by-laws with the new French regulation regarding
          the formalities to be accomplished by shareholders who wish to participate
          in shareholders meetings, with respect to evidence of their shareholding.
          This resolution amended Article 27 of the by-laws of Pechiney in order
          to harmonize such by-laws with the new regulations enacted by the French
          Decree of May 3, 2002 (amending article 136 of the French Decree of
          March 23, 1967 governing French companies), which give more flexibility
          regarding formalities to be accomplished by shareholders who wish to
          participate in a general meeting of the shareholders, with respect to
          evidence of their shareholding. This new regulation officially recognizes
          the possibility to transmit by any means, including through remote or
          electronic means, the certificate indicating the number of shares held
          in bearer form by any shareholder. More importantly, the new regulation
          now authorizes the sale of shares held in bearer form or in registered
          form at any time before the shareholders meeting, including after
          transmission of the voting or proxy form
      
      or the delivery
          of an admission card. However, if the revocation of the certificate
          of non-transferability of shares occurs before 3:00 p.m. (Paris Time)
          the day before the shareholders meeting, then the revocation must
          be transmitted with all information enabling the related adjustment
          of the number of voting rights for which a voting form or a proxy form
          has been transmitted or an attendance card delivered; if it occurs after
          that time, then such information do not have to be transmitted.
        Furthermore,
          on May 27, 2003, a special meeting of the holders of Prefered Shares
          "B" approved the vote of the general shareholders' meeting of April
          3, 2003 to convert the Preferred Shares "B" into Common Shares "A".
          For further information see "Item 4. Information on the Company - Recent
          Developments".
        For a description
          of the impact of the Companys issuance of OCEANE (debt securities
          convertible into or exchangeable for existing or newly issued Shares)
          in April 2002, please see Item 10. Additional Information 
          April 2002 issuance of bonds convertible into new A shares and/or exchangeable
          for existing A shares (OCEANE)".


165


»Controls
          and Procedures
      Item
          15  As
          of the end of the period covered by this Annual Report on Form 20-F,
          Pechineys Chairman and Chief Executive Officer and Chief Financial
          Officer, after evaluating the effectiveness of the Companys disclosure
          controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)
          under the Exchange Act) with the assistance of the Disclosure Committee
          of the Company whose members are other members of management, have concluded
          that the Companys disclosure controls and procedures were effective
          to ensure that material information relating to the Company and its
          consolidated subsidiaries was made known to them by others within those
          entities particularly during the period in which this Annual Report
          on Form 20-F was being prepared.
      
      There
          have been no significant changes in the Companys internal control
          over financial reporting that occured during the period covered by this
          Annual Report on Form 20-F that has materially affected, or is reasonably
          likely to materially affect the Company's internal control over financial
          reporting.


166


Item
          16 [Reserved]


167


»Financial
          Statements
      Item
          17 Not Applicable


168


»Financial
          Statements
      Item
          18 The following financial statements
    are filed as part of this Annual Report PageReport of Independent Accountants
      F-1Consolidated Statement of Income
      F-3Consolidated Balance Sheet
      F-4Consolidated Statement of Cash Flows
      F-5Consolidated Statement of Shareholders Equity
      F-6Notes to the Consolidated Financial Statements
      F-7


169


»Exhibits
      Item
          19 The following exhibits are filed
    as part as this Annual Report. Exhibit 1.1
      By-laws
        of Pechiney(statuts) as of May 27, 2003 (unofficial
        English translation)2.1
      Prospectus
        (Note dOpération définitive), dated April 3, 2002,
        relating to the issuance of bonds convertible into new Common Shares "A"
        and/or exchangeable for existing Common Shares "A" (unofficial English
        translation)8.1
      Subsidiaries
        of Pechiney (see "Note 23 to the Consolidated Financial Statements")12.1
      Certification
        of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley
        Act of 2002.12.2
      Certification
        of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley
        Act of 2002.13.1
      Certification
        of Chief Executive Officer pursuant to Section 906 of the Sarbanes Oxley
        Act of 2002.13.2
      Certification
        of Chief Financial Officer pursuant to Section 906 of the Sarbanes Oxley
        Act of 2002.


170


» Report
  of Independent Accountants To the Board of Directors and Shareholders of Pechiney We have audited
    the accompanying consolidated balance sheets of Pechiney and its subsidiaries
    as of December 31, 2002, 2001 and 2000, and the related consolidated statements
    of income, of shareholders equity and cash flows for each of the three
    years in the period ended December 31, 2002. These financial statements are
    the responsibility of the Companys management. Our responsibility is
    to express an opinion on these financial statements based on our audits. We conducted our
    audits in accordance with auditing standards generally accepted in the United
    States of America. Those standards require that we plan and perform the audit
    to obtain reasonable assurance about whether the financial statements are
    free of material misstatement. An audit includes examining, on a test basis,
    evidence supporting the amounts and disclosures in the financial statements.
    An audit also includes assessing the accounting principles used and significant
    estimates made by management, as well as evaluating the overall financial
    statement presentation. We believe that our audits provide a reasonable basis
    for our opinion. These financial
    statements have been prepared in accordance with accounting principles generally
    accepted in France, except for the following matter. As described in note
    1, in order to comply with the requirements of the United States Securities
    and Exchange Commission, the Company's financial statements have been restated
    in the Annual Report on Form 20-F to reflect the consolidation of Pechiney
    Far East as of December 31, 2001 and 2000 and for each of the three years
    in the period ended December 31, 2002. Consolidated net income has been decreased
    by €5 million for the year ended December 31, 2002 and increased by €1
    million and €4 million for the years ended December 31, 2001 and 2000,
    respectively. Under accounting principles generally accepted in France (Avis
    CNC No. 97-06), prior periods are not permitted to be retroactively restated,
    and the consolidation of Pechiney Far East was reflected beginning January
    1, 2002 in the Pechiney consolidated financial statements filed in France. In our opinion,
    except for the effects of the restatement described in the previous paragraph,
    the consolidated financial statements audited by us present fairly, in all
    material respects, the financial position of Pechiney as of December 31, 2002
    and 2001, and the results of their operations and their cash flows for each
    of the three years in the period ended December 31, 2002, in conformity with
    accounting principles generally accepted in France. Accounting principles
    generally accepted in France vary in certain significant respects from accounting
    principles generally accepted in the United States of America. The application
    of the latter, after giving effect to the restatement referred to in Notes
    1 and 25, would have affected the determination of consolidated net income
    for each of the three years in the period ended December 31, 2002 and the
    determination of consolidated shareholders equity at December 31, 2002,
    2001, and 2000 to the extent summarized in note 25 to the consolidated financial
    statements. Paris,
    France, January 29, 2003, except as to Note 1 Restatement for which the date
    is October 24, 2003


F1


»Consolidated
  Statements


F2


Consolidated
    Statements of Income Years
        ended December 31, 2002, 2001 and 2000(in
        millions of euros)
      Notes
      
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)Net
        sales
      
      
      11,909
      
      11,512
      
      10,874Other
        operating revenues
      
      
      144
      
      155
      
      153Cost
        of goods sold (excluding depreciation)
      
      
      (10,611)
      
      (10,070)
      
      (9,411)Selling,
        general and administrative expense
      
      
      (610)
      
      (620)
      
      (564)Research
        and development expense
      
      
      (90)
      
      (97)
      
      (90)Depreciation
        and amortization
      4-6
      
      (335)
      
      (328)
      
      (303)Earnings
        from operations
      
      
      407
      
      552
      
      659Restructuring
        expense and long-lived asset writedowns
      4-14
      
      (145)
      
      (75)
      
      (29)Other
        income (expense)
      17
      
      (103)
      
      10
      
      (8)Income
        from operations
      
      
      159
      
      487
      
      622Financial
        expense, net
      16
      
      (49)
      
      (68)
      
      (68)Income
        before income taxes
      
      
      110
      
      419
      
      554Income
        tax (expense) benefit
      18
      
      (39)
      
      (130)
      
      (172)Net
        income from consolidated companies
      
      
      71
      
      289
      
      382Equity
        in net earnings of affiliates
      7
      
      3
      
      24
      
      (13)Minority
        interests
      13
      
      0
      
      (28)
      
      (31)Net
        income before goodwill
      
      
      74
      
      285
      
      338Goodwill
        amortization
      5
      
      (31)
      
      (29)
      
      (20)Exceptional
        goodwill amortization
      5
      
      (98)
      
      (22)
      
      -Net
        income (loss)
      
      
      (55)
      
      234
      
      318Net
        income per common share "A" (in euros)
      12-
        Basic earnings per share
      
      
      (0.72)
      
      2.94
      
      3.94-
        Diluted earnings per share
      
      
      (0.72)
      
      2.92
      
      3.92See
        Notes to the Consolidated Financial Statements.


F3


»Consolidated
  Statements Consolidated
    Balance Sheets December
        31, 2002, 2001 and 2000(in
        millions of euros)
      Notes
      
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)ASSETSNon
        current assetsProperty,
        plant and equipment, net
      4
      
      2,832
      
      2,997
      
      2,476Goodwill,
        net
      5
      
      637
      
      860
      
      642Other
        intangible assets, net
      6
      
      163
      
      145
      
      166Investments
        in equity affiliates
      7
      
      285
      
      297
      
      261Long-term
        investments
      8
      
      139
      
      141
      
      149Deferred
        income taxes
      18
      
      505
      
      335
      
      331Other
        long-term assets
      9
      
      279
      
      256
      
      2334,840
      
      5,031
      
      4,258Current
        assetsInventories,
        net
      10
      
      1,525
      
      1,601
      
      1,448Accounts
        receivable  trade
      11
      
      1,281
      
      1,470
      
      1,512Deferred
        income taxes
      18
      
      51
      
      60
      
      53Other
        receivables and prepaid expenses
      
      
      101
      
      91
      
      353Marketable
        securities
      15
      
      153
      
      113
      
      86Cash
      15
      
      283
      
      332
      
      3773,394
      
      3,668
      
      3,829Total
        assets
      
      
      8,234
      
      8,699
      
      8,087LIABILITIES
        AND SHAREHOLDERS EQUITYShareholders
        equityCapital
        stock
      
      
      1,258
      
      1,245
      
      1,244Share
        premium
      
      
      790
      
      767
      
      767Retained
        earnings
      
      
      1,297
      
      1,478
      
      1,335Cumulative
        translation adjustment
      
      
      (151)
      
      50
      
      (9)Treasury
        shares
      
      
      (180)
      
      (140)
      
      (80)12
      
      3,014
      
      3,400
      
      3,277Minority
        interests
      13
      
      149
      
      169
      
      169Shareholders
        equity and minority interests
      
      
      3,163
      
      3,569
      
      3,446Long-term
        provisionsDeferred
        income taxes
      18
      
      195
      
      173
      
      93Other
        long-term provisions
      14
      
      1,142
      
      1,129
      
      1,0791,337
      
      1,302
      
      1,172Long-term
        debt
      15
      
      1,465
      
      971
      
      734Current
        liabilitiesAccounts
        payable  trade
      
      
      1,456
      
      1,514
      
      1,511Other
        payables and accrued liabilities
      
      
      384
      
      394
      
      599Current
        portion of long-term debt
      15
      
      39
      
      37
      
      31Short-term
        bank loans
      15
      
      390
      
      912
      
      5942,269
      
      2,857
      
      2,735Total
        liabilities and shareholders equity
      
      
      8,234
      
      8,699
      
      8,087Contingencies
      20See
        notes to the Consolidated Financial Statements.


F4


» Consolidated
  Statements Consolidated
    Statements of Cash Flows  Years
        ended December 2002, 2001 and 2000(in
        millions of euros)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)CASH
        FLOWS FROM OPERATING ACTIVITIESNet
        income (loss)
      (55)
      
      234
      
      318Minority
        interests
      0
      
      28
      
      31Equity
        in net earnings of affiliates
      (3)
      
      (24)
      
      13Depreciation
        and amortization
      464
      
      379
      
      323Net
        gain on disposal of long-lived assets
      (1)
      
      1
      
      (6)Long-lived
        assets write-down
      102
      
      41
      
      13Restructuring
        provision
      38
      
      53
      
      15Deferred
        income tax expense (benefit)
      (28)
      
      18
      
      9Other
        non-cash expense, net :-
        Pensions and other post-employment benefits
      114
      
      98
      
      86-
        Depreciation of investments carried at cost and long term loans
      81
      
      11
      
      18-
        Provision for environment and environmental costs
      35
      
      (13)
      
      5-
        Miscellaneous
      (7)
      
      (75)
      
      (44)Gross
        operating cash flow
      740
      
      751
      
      781Changes
        in assets and liabilities exclusive of effects ofacquisitions,
        divestitures and translation adjustments:-
        (Increase) decrease in inventories
      (23)
      
      (53)
      
      (138)-
        (Increase) decrease in trade receivables
      216
      
      195
      
      (149)-
        Increase (decrease) in trade payables
      (25)
      
      (108)
      
      74-
        Restructuring expenditures
      (32)
      
      (33)
      
      (47)-
        Other changes
      (247)
      
      (164)
      
      (125)Net
        cash provided by operating activities
      629
      
      588
      
      396CASH
        FLOWS FROM INVESTING ACTIVITIESAdditions
        to property, plant and equipment
      (479)
      
      (389)
      
      (287)Increase
        in long-term investments
      (42)
      
      (582)
      
      (227)Increase
        in long-term recevables
      (21)
      
      -
      
      (20)Other
        (increase) decrease in long-lived assets
      (38)
      
      24
      
      (12)Proceeds
        from sales of other investments,net
        of cash of businesses sold
      10
      
      10
      
      480Other
        proceeds from sales of long-term assets
      15
      
      15
      
      14Receipts
        from other long-term receivables
      18
      
      5
      
      2Net
        cash used in investing activities
      (537)
      
      (917)
      
      (50)CASH
        FLOWS FROM FINANCING ACTIVITIESAdditions
        to long-term debt
      645
      
      262
      
      24Increase
        (decrease) in other financial debt
      (623)
      
      285
      
      (264)Purchase
        of Pechiney shares
      (40)
      
      (60)
      
      (49)Share
        capital increase in Pechiney
      36
      
      1
      
      -Dividends
        paid:-
        by Pechiney
      (102)
      
      (111)
      
      (66)-
        to minority interests in subsidiaries
      (20)
      
      (23)
      
      (6)Net
        cash (used in) provided by financing activities
      (104)
      
      354
      
      (361)Net
        effect of foreign currency translation on cash
      14
      
      (43)
      
      10Net
        increase (decrease) in cash and cash equivalents
      2
      
      (18)
      
      (5)Cash
        and cash equivalents at beginning of period
      434
      
      463
      
      468Cash
        and cash equivalents at end of period
      436
      
      445
      
      463SUPPLEMENTAL
        DISCLOSURESCash
        payments during the period for:-
        Interest
      (49)
      
      (81)
      
      (67)-
        Income taxes
      (132)
      
      (110)
      
      (114)See
        Notes to the Consolidated Financial Statements.


F5


»Consolidated
  Statements Consolidated
    Statement of Shareholders Equity Years
        ended December 31, 2002, 2001, and 2000(in
        millions of euros)
      Numberof
          shares
      Capitalstock
      Treasuryshares
      SharePremium
      Retainedearnings
      Cumulativetranslation
          adjustment(Restated)
      Shareholdersequity
          (Restated)Common
        Shares "A"
      80,485,168Preferred
        Shares "B"
      1,091,044Balance
        as of December 31, 1999
      81,576,212
      1,244
      (31)
      833
      1,068
      (88)
      3,026Net
        income
      
      
      
      
      318
      
      318Translation
        adjustment
      
      
      
      
      
      79
      79Exercise
        of stock options
      8,978
      
      
      
      
      
      -Purchase
        of Pechiney shares
      
      
      (49)
      
      
      
      (49)Cash
        dividends:-
        Common Shares "A"
      
      
      
      (65)
      
      
      (65)-
        Preferred Shares "B"
      
      
      
      (1)
      
      
      (1)Precompte
      
      
      
      
      (31)
      
      (31)Common
        Shares "A"
      80,494,146Preferred
        Shares "B"
      1,091,044Balance
        as of December 31, 2000
      1,585,190
      1,244
      (80)
      767
      1,355
      (9)
      3,277Net
        income
      
      
      
      
      234
      
      234Translation
        adjustment
      
      
      
      
      
      59
      59Exercise
        of stock options
      41,000
      1
      
      
      
      
      1Purchase
        of Pechiney shares
      
      
      (60)
      
      
      
      (60)Cash
        dividends:-
        Common Shares "A"
      
      
      
      
      (78)
      
      (78)-
        Preferred Shares "B"
      
      
      
      
      (4)
      
      (4)Precompte
      
      
      
      
      (29)
      
      (29) (in
        millions of euros)
      Numberof
          shares
      Capitalstock
      Treasuryshares
      SharePremium
      Retainedearnings
      Cumulativetranslation
          adjustment
      ShareholdersequityCommon
        Shares "A"
      80,535,146Preferred
        Shares "B"
      1,091,044Balance
        as of December 31, 2001
      81,626,190
      1,245
      (140)
      767
      1,478
      50
      3,400Net
        income
      
      
      
      
      (55)
      
      (55)Translation
        adjustment
      
      
      
      
      
      (201)
      (201)Exercise
        of stock options
      32,216
      
      
      1
      
      
      1Increase
        in capital
      855,277
      13
      
      22
      
      
      35Purchase
        of Pechiney shares
      
      
      (40)
      
      
      
      (40)Cash
        dividends:-
        Common Shares "A"
      
      
      
      
      (78)
      
      (78)-
        Preferred Shares "B"
      
      
      
      
      (2)
      
      (2)Precompte
        and other changes
      
      
      
      
      (46)
      
      (46)Common
        Shares "A"
      81,422,639Preferred
        Shares "B"
      1,091,044Balance
        as of December 31, 2002
      82,513,683
      1,258
      (180)
      790
      1,297
      (151)
      3,014 See
  Notes to the Consolidated Financial Statements.


F6


Note 1
    - Basis of Presentation  Accounting
    Principles The consolidated
          financial statements are prepared in accordance with accounting principles
          generally accepted in France and, in particular, comply with the principles
          defined in Regulation 99-02 of the "Comité
          de réglementation comptable"
          (CRC).
      
      The use of
          these accounting principles results in a small number of differences
          from the use of accounting principles generally accepted in the United
          States of America, which are also used as a reference by the Group because
          of the magnitude of its international activities. These differences
          are presented in note 25. Restatement  As disclosed
          in its previously issued financial statements, the Group consolidated
          its wholly owned subsidiary, Pechiney Far East, effective January 1,
          2002. Prior to January 1, 2002, the Group's interest in Pechiney Far
          East was accounted for as an unconsolidated subsidiary at historical
          cost. Subsequent to the filing of the annual report on Form 20-F for
          the year ended December 31, 2002, it was determined that all controlled
          subsidiaries, including Pechiney Far East, should have been consolidated
          for all periods for purposes of complying with the requirements of the
          United States Securities and Exchange Commission (the "SEC"). The financial
          statements for the three years ended December 31, 2002 have been restated
          to consolidate Pechiney Far East effective January 1, 2000. Using the
          criteria in Staff Accounting Bulletin 99 "Materiality", the Group concluded
          that after the consolidation of Pechiney Far East, the effect of consolidating
          the other subsidiaries that were omitted from consolidation was not
          material to the financial statements.
      
      The
          restatement of financial statements is prohibited under generally accepted
          accounting principles in France (French GAAP) after the date of the
          annual shareholders meeting which approved them. However, the SECs
          rules and practices require the Companys French GAAP financial
          statements to be restated in the Form 20-F to reflect the consolidation
          of Pechiney Far East as of January 1, 2000 instead of January 1, 2002.
          This results in restated financial statements for the three years ended,
          which differ from those approved by the shareholders meeting and from
          those filed with the Commission des Opérations de Bourse (COB).
        The
          principal effects of restating prior year financial statements filed
          with the SEC are summarized in the table below.  Earnings
      
      
      
      Earnings
      
      Earningsfrom
      
      Net Income
      
      per Share 
      
      per Share 
      
      Total
      
      Total
      
      ShareholdersNet Sales
      
      Operations
      
      (Loss)
      
      Basic
      
      Diluted
      
      Assets
      
      Liabilities
      
      EquityYear Ended December31, 2002Previously reported
      11,909
      
      407
      
      (50)
      
      (0.66)
      
      (0.66)
      
      8,234
      
      5,220
      
      3,014Adjustment
      
      
      
      
      (5)
      
      (0.06)
      
      (0.06)
      
      
      
      
      
      As restated
      11,909
      
      407
      
      (55)
      
      (0.72)
      
      (0.72)
      
      8,234
      
      5,220
      
      3,014Year Ended December31, 2001Previously reported
      11,054
      
      549
      
      233
      
      2.92
      
      2.90
      
      8,683
      
      5,288
      
      3,395Adjustment
      458
      
      3
      
      1
      
      0.02
      
      0.02
      
      16
      
      11
      
      5As restated
      11,512
      
      552
      
      234
      
      2.94
      
      2.92
      
      8,699
      
      5,299
      
      3,400Year Ended December31, 2000Previously reported
      10,679
      
      658
      
      314
      
      3.90
      
      3.88
      
      8,073
      
      4,800
      
      3,273Adjustment
      195
      
      1
      
      4
      
      0.04
      
      0.04
      
      14
      
      10
      
      4As restated
      10,874
      
      659
      
      318
      
      3.94
      
      3.92
      
      8,087
      
      4,810
      
      3,277 (1)
  As previously reported in the Groups Annual Report on Form 20-F and as
  reported in accordance with French GAAP in the Groups financial statements
  filed with the Commission des Opérations de Bourse. The restatement
    described above has similar effects on the Groups U.S. GAAP financial
    information. See Note 25. New
    Accounting Standards Effective
          January 1, 2002, the Group applied regulation 00-06 of the CRC relating
          to the accounting for liabilities. The application of this regulation
      
      had no significant
          impact on the Groups financial position or results of operations.


F7


»Consolidated
  Statements  Significant
    Accounting Policies a)
    Principles of Consolidation The consolidated
          financial statements include Pechiney and subsidiaries in which the
          Group owns, directly or indirectly, a controlling
      
      interest.
          The equity method of accounting is used for companies in which the Group
          does not own a controlling interest but exercises significant influence. b)
    Property, Plant and Equipment Property,
          plant and equipment are stated at cost of purchase or construction and
          are depreciated on a straight-line basis over their estimated useful
          lives, which are generally as follows:
        - buildings and structures 25 to 40 years,
        -
          machinery and equipment 8 to 25 years,
        - other 3 to 10 years.
        Whenever
          events or changes in circumstances indicate that the carrying amount
          of long-lived assets may not be recoverable, this carrying amount is
          compared with the future cash flows (undiscounted and without interest
      
      charges).
          If the sum of expected future cash flows is less than the carrying amount
          of the assets, an impairment loss is recognized based on the fair value
          of the assets, which is generally estimated as the present value of
          expected future cash flows.
        Significant
          acquisitions under capital lease agreements are capitalized on the basis
          of the present value of future rental costs and depreciated over their
          estimated useful lives.
        Interest
          costs incurred during the period of construction of fixed assets are
          capitalized as part of acquisition costs. c)
    Intangible Assets The difference
          between the purchase price and the book value of net assets acquired
          is allocated to tangible and intangible assets and to assumed liabilities
          for which a fair value can be specifically determined. The excess of
          the purchase price over the fair value of net assets acquired is allocated
          to goodwill. If an acquisition relates only to a portion of the share
          capital, this allocation is carried out proportionately, i.e. limited
          to the portion of shares acquired. Goodwill is amortized on a straight-line
          basis over a period not exceeding 40 years.
        The carrying
          value of goodwill is reviewed annually to reflect changes which may
          have permanently impaired the profitability and the value of the related
          assets. Beginning in 2002, this review is carried out in accordance
          with SFAS 142:
        the carrying
            value of the net assets and liabilities of the reporting units to
            which goodwill has been assigned
      
      is compared
        with the fair value of these reporting units, estimated mainly on the
        basis of discounted cash flows;
        if the
            fair value of the reporting unit is lower than the carrying amount,
            the implied value of the goodwill included in this fair value is determined
            by deducting the fair value of each of the assets and liabilities
            of the reporting unit from its global fair value;
          if the
            implied fair value of goodwill is lower than its carrying value, an
            impairment loss is recognized to reduce the carrying value to the
            level of the implied fair value.In 2000 and 2001,
        the carrying value of goodwill was compared with the fair value of the
        acquired entities and was also reviewed for impairment jointly with the
        property, plant and equipment with which goodwill was associated. d)
    Inventories Inventories
          are stated at the lower of cost or market value. Cost is generally calculated
          using the weighted average cost method. The last-in-first-out (LIFO)
          method is used by the following subsidiaries: Pechiney Rhenalu,
      
      Pechiney Rolled
          Products LLC, Pechiney Cast Plate, Inc. and Pechiney Plastic Packaging,
          Inc. e)
    Treasury shares Shares of
          the parent company Pechiney SA held by consolidated Group companies
          are presented as a deduction from consolidated equity. f)
    Revenue Recognition Revenues are
          recognized as follows:
        For industrial
            and trading subsidiaries, revenues are recognized in Net sales upon
            transfer of title ownership and risk to the customer.
          For sales
            conducted on a pure agency basis the Group reports commission revenues
            under the caption Other operating revenues at the time the commission
            is earned, which is generally upon shipment of the goods by the supplier
            to the customer.Contracts for the
        sale and licensing of primary aluminium smelting technology and know-how
        typically comprise (i)
      
      compensation for technical documentation, technical assistance and other
        activities required to transfer the technology and know-how and (ii) licensing
        fees for the right to use the Pechiney technology. The Group recognizes
        revenues from the provision of technical documentation, technical assistance
        and other activities using the percentage of completion method based on
        the ratio of contract costs measured to date to total estimated contract
        costs. Anticipated losses, if any, are recognized when identified. The
        Group recognizes licensing fees for the right to use the Pechiney technology
        on apro rata temporis basis over the contract period.


F8


»Consolidated
  Statements g)
    Research and Development Costs Research and
          development costs are expensed as incurred. h)
    Foreign Currency Translation of Financial Statements and Transactions The financial
          statements of foreign subsidiaries are translated as follows:
        balance
            sheet items are translated at period-end exchange rates;
          income
            statement items are translated at average exchange rates in effect
            during the period;
      
      the net
            effect of translating foreign currencies is reflected as a cumulative
            translation adjustment within shareholders equity.Exchange differences
        arising from foreign currency transactions are recorded in the statement
        of income. i)
    Deferred Income Taxes Deferred
          income taxes are accounted for using the liability method on temporary
          differences between the consolidated financial statements and tax bases
          and on net operating loss carryforwards. These deferred taxes are measured
          by applying currently enacted tax laws. Valuation allowances are established
          on deferred tax assets when management estimates that it is more likely
          than not that the related benefit will not be realized. Deferred tax
          assets and liabilities are stated at present value when the impact of
      
      discounting
          is significant and the timing of reversals is sufficiently reliable.
          Since these requirement of CRC Regulation 99-02 became mandatory in
          2000, these two conditions have not been met.
        Income
          taxes which may be incurred upon remittance of the Groups share
          of foreign subsidiaries undistributed earnings are provided unless
          such earnings are expected to be permanently retained. j)
    Pension Plans and Retirement Indemnities The Groups
          projected benefit obligations relating to defined benefit pension plans,
          retirement indemnity schemes and similar schemes are calculated using
          actuarial assumptions which take into account the
      
      economic situation
          of each country. These obligations are covered either by plan assets
          to which the Group contributes or by reserves recorded in the balance
          sheet over the period the rights are acquired. k)
    Postretirement Benefits Other than Pensions The Groups
          obligations relating to healthcare and life insurance benefits are recognized
          over the period the rights are acquired. The accrued
      
      obligations
          are based on an actuarial valuation, which takes into account assumptions
          regarding mortality and future healthcare cost trends. l)
    Commodity Instruments In order to
          reduce its exposure to market fluctuations in the price of raw materials,
          the Group uses various hedging instruments, in accordance with established
          Group guidelines.
        Industrial
          subsidiaries record gains or losses generated by these instruments in
          the same manner and period as the income or loss on the hedged transactions.
          If, in very limited circumstances, the instruments do
      
      not constitute
          a hedge, they are marked to market with the gain or loss immediately
          recorded in the income statement, in Cost of goods sold. Trading subsidiaries
          mark to market their contracts. Net unrealized losses are recorded in
          the income statement, in Cost of goods sold, as well as net unrealized
          gains. Unrealized gains on contracts involving commodities without a
          liquid market are deferred until the contract is closed. m)
    Financial Instruments Due to the
          magnitude of transactions denominated in foreign currencies and the
          use of diversified financing, the Group protects itself against market
          fluctuations, under defined procedures.
        The Group
          uses various financial instruments to hedge currency and interest rate
          risks on assets, liabilities and anticipated transactions, including
          firm commitments. All foreign exchange and interest rate instruments
          are either quoted on organized exchanges or are over-the-counter transactions
          with highly-rated counterparties. Gains or losses on these instruments
          are accounted for in the same manner and period as the income or loss
          on the hedged transaction.
      
      Only instruments
          which reduce the exposure of the Group to currency or interest rate
          risks and designated as a hedge of the exposed item are accounted for
          as a hedge. The Group reassesses whether contracts accounted for as
          hedges continue to constitute hedges in the event of a change in the
          underlying hedged exposure.
        In very limited
          circumstances, certain instruments do not or no longer constitute a
          hedge. These instruments are marked to market with the gain or loss
          recorded immediately in the income statement.


F9


»Consolidated
  Statements n) Uncertainties Resulting from the Use of Estimates  The preparation
          of financial statements in conformity with generally accepted accounting
          principles requires management to make estimates and assumptions that
          affect the reported amounts of assets and liabilities and disclosure
          of contingent assets and liabilities at the date of the financial statements
          and the reported amounts of revenues and expenses during the reporting
          period. Actual results could differ from these estimates and assumptions.
          Estimates and
          assumptions are particularly significant with respect
      
      to
          estimating
          liabilities such as provisions and accruals for litigation or environmental
          remediation. They are also significant with respect to assessing the
          recoverability of the carrying value of property, plant and equipment,
          intangible assets and deferred tax assets which, to a large extent,
          is based on estimates of expected future net income or cash flows. Considering
          the factors specific to the principal businesses of the Group, estimates
          of future net income and cash flows could vary significantly from actual
          results. o) Cash
  and Cash Equivalents  For purposes
          of the statement of cash flows, cash and cash equivalents include all
          instruments with an original maturity of three months or less.
      
      Cash equivalents
          are included on the balance sheet in marketable securities and are carried
          at cost, which approximates market value. p) Stock Option
  Plans and Stock Appreciation Rights Plans The Group's
          stock option plans are accounted for using the intrinsic value method.
          The difference between compensation cost determined under the intrinsic
          value method and compensation cost determined under the fair value method
          is disclosed in Note 25. 
          The Group's stock appreciation plans are accounted for as variable stock-based
          compensation plans.
      
      Compensation
          cost is measured initially as the difference between (a) the quoted
          market value of the shares at the grant date and (b) the exercise price
          and is recognized over the service period. Subsequent changes in the
          quoted market value of the shares between the date of grant and measurement
          date are accounted for as changes in estimate in the period of the change. q) Environmental
  Remediation Liabilities
          relating to the clean-up of past environmental contamination and other
          remediation activities are recognized when a clean-up or remediation
          program becomes probable and the costs can be reasonably estimated.
          The Group makes provisions for the estimated costs based on current
          environmental laws and regulatory requirements
      
      and currently
          available technology. These cost estimates are not discounted and not
          reduced by potential recoveries from claims under insurance. Recoveries
          under insurance policies are recognized when the claim is formally accepted
          by the insurer. Note
    2 - Changes in the Group Structure In
          2002:
        on
          January 1, the Group consolidated its 100 percent ownership interest
          in Electrification Charpente Levage South Africa which was previously
          accounted for as a non-consolidated investment;
        on
          January 1, the Group consolidated its 100 percent ownership interest
          in Cosmetech Mably International Hong-Kong, which was previously accounted
          for under the equity method;
        on
          January 1, the Group sold its 100 percent ownership interest in Affival,
          and deconsolidated Pechiney Inter NV which no longer had significant
          activities;
        on
          January 1, Cosmetech Europe merged with Mably Europe and was renamed
          Cosmetech Mably Europe;
        on
          February 1, the Group consolidated its 100 percent ownership interest
          in the new company Alufin;
        on
          July 1, Lir USA merged with Henlopen Manufacturing Co, Inc;
        on
          July 1, the Group deconsolidated Cebal Printal Oy, which had disposed
          of most of its activity;
        on
          August 1, the Group consolidated its 100 percent ownership interest
          in Pechiney Rolled Product Property and Equipment Company LLC;
        on
          October 1, the Group sold its 100 percent ownership interest in Kasmacher;
        on
          October 1, the Group consolidated its 100 percent ownership interest
          in Sofiri, which was previously accounted for as non-consolidated investments.
        In
          2001:
        on January
          1, the Group consolidated its 100 percent ownership interest in Cebal
          Mexico S.A. de C.V. and ECL-CDG Services Inc., which were previously
          accounted for as non-consolidated investments, as well as Pechiney Approvisionnements
          Alumine, a new subsidiary to which the alumina trading activity of Aluminium
          Pechiney was transferred;
        on
          January 1, the Group consolidated its 100 percent ownership interest
          in the Brazilian company Cebal Brasil Limitada after its merger with
          the Brazilian company Metalpack, acquired in 2000;
      
      on
          January 1, the Group deconsolidated the British company Brandeis Brokers
          Limited, which no longer had significant activities;

        in
          March, as part of the Bauxilum project, the Group created the wholly-owned
          company Aluminium Pechiney SPV;

        in
          April, a wholly-owned subsidiary recently created by the group, Pechiney
          Aviatube Limited, acquired the extruded alloyed aluminum activity from
          the company Luxfer Holdings PLC (Workington plant in Great Britain);

        following
          the purchase of minority interests in Pet Plas Packaging Ltd in April,
          the Group now owns a 100 percent interest in this company;

        in
          May, the Group sold its 100 percent ownership interest in the French
          company Société Métallurgique de Gerzat;

        in
          May, the Group acquired a 100 percent ownership interest in the Brazilian
          company Molplastic Moldes Plasticos Ltda., subsequently merged with
          TPI Novolit S.A. and renamed TPI Molplastic Ltda.;

        in
          May, the Group sold its 100 percent ownership interest in the Australian
          company Lir Australia;

        in
          June, the Group acquired a 100 percent ownership interest in Sapa Eurofoil
          S.A. and Eurofoil Belgium S.A., which were subsequently renamed Pechiney
          Eurofoil Luxembourg S.A. and Pechiney Eurofoil Belgique S.A., respectively;

        in
          July, the Group acquired a 100 percent ownership interest in the following
          companies which comprise the Soplaril Group: Soplaril S.A., Soplaril
          Italia S.p.A, Soplaril Portugal Lda and Polibol S.A.;

        following
          the purchase of minority interests in Cosmetech Europe, Mably Europe
          and CMI, which occurred in June, the Group now owns a 100 percent interest
          in each of these three companies;

        in
          October, the Group exercised its call option related to the shares of
          the Australian companies Johcath Holdings Pty Ltd and Cathjoh Holdings
          Pty Ltd owned by AMP Private Capital. Following these acquisitions,
          the Group owns a 100 percent interest in Cathjoh Holdings Pty Ltd, itself
          owner of 15.5 percent of the Tomago smelting facility (Australia), bringing
          the total Group share in this facility to 51.55 percent;


F10


»Consolidated
  Statements in December,
            the Group consolidated its ownership interest of 58 percent in Cebal
            Tuba SP ZO.O. and of 100 percent in Pechiney Capalux previously accounted
            for as non-consolidated investments.In
          2000:
        on January
            1,the
            Group consolidated its 100 percent ownership interst in Pechiney Far
            East, which was previously accounted for as a non-consolidated investment;
          on January
            1, the Dutch company Impress Metal Packaging, which was previously
            accounted for under the equity method, was accounted for as a non-consolidated
            investment due to a capital increase subscribed by the majority shareholder
            which decreased the Groups ownership interest from 20 percent
            to 6 percent;
          on January
            1, the Group consolidated its 100 percent ownership interest in the
            Czech company Cechobal and the French company Cosmetech Europe;
          on January
            1, the company Cebal Savoie was merged into the company Cebal;
      
      in January,
            the Group increased its ownership interest in Financière Techpack,
            the holding company of the Techpack International group, from approximately
            92 percent to 100 percent;
          in February,
            the Group sold the brokerage activity of Brandeis Brokers Limited;
          in July,
            the Group sold its 45.45 percent residual interest in American National
            Can;
          in July,
            Techpack International group, together with the Valois group, formed
            the company Airlessystems, in which the Group has a 50 percent ownership
            interest, and transferred to it its plastic injection packaging system
            activity. This investment has been accounted for under the equity
            method;
          in October,
            the Group increased its ownership interest in Invensil from 77 percent
            to 100 percent;
          in November,
            the Group acquired a 100 percent ownership interest in the U.S. company
            Anchor Cosmetics (subsequently renamed Techpack America Cosmetic Packaging
            L.P.), which owns a 100 percent ownership interest in the Mexican
            company Cepillos de Matamoros;
          in December,
            the Group acquired a 100 percent ownership interest in the U.S. company
            JPS Packaging. Note 3
    - Subsequent events None.


F11


»Consolidated
    Statements Note 4
    - Property, Plant and Equipment  (in
        millions of euros)
      Land
          andimprovements
      
      Buildings
          andimprovements
      
      Machinery,
          equipment,furniture
          and tooling
      
      Constructionin
          progress
      
      TotalCost
        as of January 1, 2000
      84
      
      1,155
      
      3,850
      
      171
      
      5,260Additions
      1
      
      13
      
      87
      
      178
      
      279Disposals
      (1)
      
      (8)
      
      (75)
      
      (1)
      
      (85)Translation
        adjustment
      2
      
      47
      
      99
      
      3
      
      151Other
        changes
      4
      
      50
      
      207
      
      (191)
      
      70Cost
        as of December 31, 2000
      90
      
      1,257
      
      4,168
      
      160
      
      5,675Accumulated
        depreciation and write-downs
      (10)
      
      (756)
      
      (2,433)
      
      -
      
      (3,199)Net
        book value as of December 31, 2000
      80
      
      501
      
      1,735
      
      160
      
      2,476Cost
        as of January 1, 2001
      90
      
      1,257
      
      4,168
      
      160
      
      5,675Additions
      1
      
      21
      
      141
      
      230
      
      393Disposals
      (1)
      
      (5)
      
      (90)
      
      (4)
      
      (100)Translation
        adjustment
      1
      
      6
      
      88
      
      4
      
      99Other
        changes
      8
      
      89
      
      471
      
      (130)
      
      438Cost
        as of December 31, 2001
      99
      
      1,368
      
      4,778
      
      260
      
      6,505Accumulated
        depreciation and write-downs
      (10)
      
      (806)
      
      (2,692)
      
      -
      
      (3,508)Net
        book value as of December 31, 2001
      89
      
      562
      
      2,086
      
      260
      
      2,997Cost
        as of January 1, 2002
      99
      
      1,368
      
      4,778
      
      260
      
      6,505Additions
      1
      
      24
      
      168
      
      291
      
      484Disposals
      -
      
      (13)
      
      (121)
      
      (27)
      
      (161)Translation
        adjustment
      (5)
      
      (33)
      
      (309)
      
      (24)
      
      (371)Other
        changes
      10
      
      17
      
      72
      
      (167)
      
      (68)Cost
        as of December 31, 2002
      105
      
      1,363
      
      4,588
      
      333
      
      6,389Accumulated
        depreciation and write-downs
      (12)
      
      (826)
      
      (2,719)
      
      -
      
      (3,557)Net
        book value as of December 31, 2002
      93
      
      537
      
      1,869
      
      333
      
      2,832  In 2001, "Other
          changes" relate mainly to the acquisition of Pechiney Eurofoil Belgium,
          Pechiney Eurofoil Luxemburg and companies of the
      
      Soplaril Group,
          as well as to the share of fixed assets corresponding to the increase
          of the Groups ownership in the Tomago plant.  (in millions of euros, as of december 31)
   2002
   
   2001
   
   2000Capital lease- gross value
   84
   
   84
   
   82- net book value
   24
   
   26
   
   30


F12


» Consolidated
  Statements Depreciation charges and losses due to the writedown of property, plant and equipment were as follows: (in
        millions of euros, for the year ended December 31)
      2002
      
      2001
      
      2000Depreciation
        charges
      301
      
      292
      
      269Write-downs
        of property, plant and equipment
      102
      
      19
      
      13  Write-downs
          of property, plant and equipment are primarily due to:

          in 2002,
            certain Packaging assets (66 million euros) and certain Aluminium
            Conversion assets (29 million euros), whose carrying value was higher
            than the sum of their undiscounted future cash flows;
      
      in 2001,
            certain Food, Healthcare and Beauty assets which will no longer be
            used in production;
          in 2000,
            certain Ferroalloy assets, whose carrying value was higher than the
            sum of their undiscounted future cash flows. Note 5 - Goodwill,
  net  (in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000Goodwill,
        gross
      968
      
      1,102
      
      822Accumulated
        amortization
      (331)
      
      (242)
      
      (180)Goodwill,
        net
      637
      
      860
      
      642 Analysis
    of and Changes in GoodwillChanges
    in goodwill since January 1, 2000 are presented in the following table: (in
        millions of euros)Goodwill,
        net, as of January 1, 2000
      531Amortization
      (20)Additions
      106Divestitures
        / de-consolidation
      -Translation
        adjustment
      27Other
      (2)Goodwill,
        net, as of December 31, 2000
      642Amortization
      (29)Writedown
      (22)Additions
      252Divestitures
      (1)Translation
        adjustment
      23Other
      (5)Goodwill,
        net, as of December 31, 2001
      860Amortization
      (31)Writedown
      (98)Additions
      12Divestitures
      (3)Translation
        adjustment
      (99)Other
      (4)Goodwill,
        net, as of December 31, 2002
      637


F13


»Consolidated
  Statements As of December
          31, 2002, goodwill relates principally to Pechiney Plastic Packaging,
          Inc. (€ 267 million), Financière Techpack and its subsidiaries
          (€ 116 million), Soplaril S.A. (€ 84 million) and Pechiney
          Pacific PTY Ltd (€ 51 million).
        Write-down
          of goodwill in 2002 mainly relates to Techpack International activities
          (€ 73 million) and the North American activities of the Aluminium
          Conversion segment (€ 16 million).
        In 2002,
          the translation adjustment stems from the change in euro-dollar exchange
          rate.
        The additions
          to goodwill for the year 2001 are mainly due to the consolidation of
          Cebal Brasil Limitada on January 1, 2001, the acquisitions
      
      of SAPA Eurofoil
          SA in June 2001 and the Soplaril Group in July 2001 and the increase
          (from 36.1% to 51.6%) in the Groups share in the Tomago plant
          in October 2001.
        Write-down
          of goodwill in 2001 relates to the Hair care and Toiletries activity
          of Techpack International.
        The additions
          to goodwill for the year 2000 are mainly due to the acquisition of Anchor
          Cosmetics (renamed Techpack America Cosmetics Packaging, L.P.) in November
          2000, to the purchase price adjustments related to the acquisitions
          of Pechiney Rolled Products LLC and Pechiney Cast Plate, Inc., which
          were acquired in 1999, and to the increase in the Groups ownership
          interest (from 92% to 100%) in Financière Techpack in January
          2000. Note 6
    - Other Intangible Assets Other intangible
          assets mainly consist of:

          rights
            to electric power acquired from Electricité de France in 1984.
            The Group received access to a constant supply of electricity for
            a portion of the energy used by certain of its French plants through
            2012. The rights were granted in exchange for an interest-free advance
            payment of € 305 million to be invested in a nuclear power generation
            plant. For the year ended December 31, 2002, the net book value of
            these rights amounted to € 78 million (€ 92 million and
            € 107 million as of December 31, 2001 and 2000, respectively);
      
      software
            for a net book value of € 35 million (€ 27 million and €
            34 million as of December 31, 2001 and 2000, respectively).

        For the year ended December 31, 2002, amortization expense for other intangible
        assets amounted to € 34 million (€ 36 million and € 34
        million for each of the years ended December 31, 2001 and 2000, respectively). Note 7
    - Investments in Equity Affiliates (in
        millions of euros)
      2002
      
      2001
      
      2000Beginning
        of period
      297
      
      261
      
      777Changes:-
        Equity in net income of Queensland Alumina Limited and Pechiney Reynolds
        Québec Inc.(*)
      15
      
      4
      
      (3)-
        Equity in net income of other affiliates
      3
      
      24
      
      (13)-
        Dividends received from equity affiliates
      (3)
      
      (9)
      
      (14)-
        Divestitures and reduction in ownership percentage
      -
      
      -
      
      (502)-
        Translation adjustment
      (22)
      
      6
      
      4-
        Other
      (5)
      
      11
      
      12End
        of period
      285
      
      297
      
      261 (*)
          Pechiney Resources PTY Ltd., an Australian subsidiary of Pechiney, owns
          a 20% interest in an incorporated venture through which Queensland Alumina
          Limited (QAL) owns and operates on a cooperation basis an alumina tolling
          facility with an annual capacity of 3,750,000 metric tons, located in
          Australia. QAL mostly supplies alumina to the Groups aluminum
          smelters at Tomago (Australia) and Becancour (Canada).
        Pechiney
          Reynolds Québec, Inc. (PRQ), 50 percent owned by the Group, holds
          a 50.1% interest in the company Aluminerie de Becancour, Inc. which
          operates, on a cooperative basis, the Becancour aluminum smelter with
          an annual capacity of 400,000 metric tons. PRQ is required to purchase
          its share of aluminum output and to finance its share of operating costs
          incurred.
        The
          Groups share in the net income (loss) of QAL and PRQ is consequently
          included, together with the Groups share in the net income of
          the partnerships, as a component of cost of goods sold.


F14


»Consolidated
  Statements The Groups
          remaining ownership interest of 45.45% in American National Can Group,
          Inc. (ANC) was sold in July 2000. The Groups interest in ANC was
          accounted for under the equity method since August 1, 1999 with an initial
          investment recorded on that date of € 457 million.
      
      For the year
          ended 2000, the Groups share in the net income of its equity affiliates
          includes a loss of € 46 million related to the write-off of the
          goodwill recorded by ANC in the first quarter of 2000. Key
    Financial Information of Equity Affiliates Key financial
          information are derived from financial statements of the Groups
          equity affiliates prepared on the same basis as the Groups financial
          statements.
      
      The following
          table includes financial data relating to all equity affiliates as of
          and for the years ended December 31, 2002, 2001 and 2000. This financial
          data is extracted from the affiliates financial statements and include
          the Groups share and the majority interests in these companies.  (in
        millions of euros)
      2002
      
      2001
      
      2000Balance
        sheet data (as of December 31):Current
        assets
      479
      
      785
      
      718Non-current
        asset
      1,073
      
      1,143
      
      1,106Current
        liabilities
      605
      
      659
      
      529Non-current
        liabilities
      282
      
      518
      
      670Statement
        of income data (year ended December 31):Net
        sales
      1,254
      
      1,444
      
      1,369Gross
        profit
      247
      
      328
      
      332Net
        income
      (34)
      
      82
      
      69Note
        8 - Long-Term Investments  Long-term
          investments amounted to € 139 million, € 141 million and €
          149 million at December 31, 2002, 2001 and 2000 respectively. The change
          in long-term investments is primarily due to the write down of certain
          investments largely off set by the purchase of new investments
      
      and the inclusion
          of the shares in Skw Stahl Holding (Germany), received in payment for
          the asset contribution of certain activities of the Ferroalloys Division.


F15


»Consolidated
    Statements Note 9
    - Other Long-Term Assets (in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000Non-current
        receivables(*)
      49
      
      55
      
      60Prepaid
        pensions (see Note 14a)
      7
      
      12
      
      13Additional
        minimum pension liabilities,net
        of related tax effect (see Note 14a)
      141
      
      121
      
      98Other
      82
      
      68
      
      62Total
      279
      
      256
      
      233(*)
        Including long-term loans to Aluminium Dunkerque:
      33
      
      50
      
      54Note
        10 - Inventories(in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000Raw
        materials and supplies
      427
      
      428
      
      368Work
        in progress
      468
      
      469
      
      449Finished
        and semi-finished goods
      658
      
      735
      
      642Inventories,
        gross
      1,553
      
      1,632
      
      1,459Less:
        allowance for slow-moving inventories and others
      (28)
      
      (31)
      
      (11)Inventories,
        net
      1,525
      
      1,601
      
      1,448(in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000Valuation
        of inventories on a weighted average cost basis instead of a LIFObasis
        would have increased the carrying value of inventories by
      5
      
      16
      
      17%
        of total inventories valued on a LIFO basis
      31
      
      31
      
      31Note
        11 - Accounts Receivable - Trade(in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)Accounts
        and notes receivable
      1,051
      
      1,269
      
      1,298Other
      265
      
      244
      
      246Less
        allowance for doubtful recevables
      (35)
      
      (43)
      
      (32)Total
      1,281
      
      1,470
      
      1,512


F16


»Consolidated
  Statements The activity
        in the allowance for doubtful receivables was as follows:(in
        millions of euros)
      2002
      
      2001
      
      2000Balance
        at beginning of year
      43
      
      32
      
      29Provision
        charged to (released to) income
      (2)
      
      16
      
      3Writeoff
        of uncollectable receivables, net of recoveries
      (2)
      
      (1)
      
      (1)Translation
        adjustment
      (4)
      
      1
      
      1Other
        changes
      -
      
      (5)
      
      -Balance
        at end of year
      35
      
      43
      
      32  The credit
          risk arising from accounts and notes receivable is limited due to the
          large number of customers comprising such receivables. These customers
      
      are spread
          among many industrial sectors and geographic locations. Receivables
          sold are presented in note 20. Note 12
    - Shareholders Equity a) Capital
    Stock As of December
          31, 2002, 2001 and 2000 the capital stock was divided into common shares
          "A" and preferred shares "B", each having a par value of € 15.25
          per share. Prior to the conversion of capital stock to euros on January
          28, 1999, the par value was FF 100 per share or € 15.24 per share.
        Each preferred
          share "B" includes a voting right and entitles its holder to a
      
      preferred
          annual dividend of 9.5% of par value and, under certain conditions,
          to an additional dividend. Each common share "A" includes a voting right
          and entitles its holder to a dividend which, in any given year, cannot
          exceed the amount of the aggregate dividend paid per preferred share
          "B". b) Changes
    in Capital Stock 1999
          Conversion
          of Capital to Euros The conversion
          to euros of the par value of each share "A" and each share "B", approved
          by the Board of Directors on January 28, 1999 in accordance with the
          authorization granted by shareholders at the Annual General Meetings
          on June 25, 1997 and May 18, 1998, resulted in, with the effect of rounding,
          an increase in the par value of shares "A" and "B" to € 15.25 per
          share. As a result, the capital stock of the Group increased by €
          415,817.39, such amount having been transferred from retained earnings.
          After this conversion, capital stock amounted to € 1,243,795,901.75.
        Exercise
          of stock options During 1999,
          15,825 options were exercised. These options were granted by the Board
          of Directors on June 26, 1996 pursuant to the authorization granted
          by the shareholders at the March 29, 1996 Annual General Meeting. This
          resulted in an increase in the capital stock of the Group related to
          the exercise of these options of € 241,331.25 corresponding to
          15,825 new shares "A" issued with a par value of € 15.25 and an
          increase in capital premium of € 262,062.19 corresponding to €
          16.56 for each new share.
        2000
          Exercise
          of stock options During 2000,
          8,978 options were exercised. These options were granted by
      
      the Board
          of Directors on June 26, 1996 pursuant to the authorization granted
          by shareholders at the March 29, 1996 Annual General Meeting. This resulted
          in an increase in capital stock related to the exercise of these options
          of € 136,914.50 corresponding to 8,978 new shares "A" issued with
          a par value of € 15.25, and an increase in capital premium of €
          147,863.56. It corresponds to 7,950 new shares with a premium of € 16.56
          for each new share (before legal adjustments) and to 1,028 new shares
          with a premium of € 15.77 for each new share (after legal adjustments)
          .
        2001
        Exercise
          of stock options
        During 2001,
          41,000 options were exercised. These options were granted by the Board
          of Directors on June 26, 1996 pursuant to the authorization granted
          by shareholders at the March 29, 1996 Annual General Meeting. This resulted
          in an increase in capital stock related to the exercise of these options
          of € 625,250 corresponding to 41,000 new shares "A" issued with
          a par value of €15.25 and an increase in capital premium of € 646,570
          corresponding to € 15.77 for each new share.
        As of December
          31, 2001, capital stock amounted to € 1,244,799,397.50, representing
          81,626,190 shares (80,535,146 shares "A" and 1,091,044 shares "B") with
          a par value of € 15.25 per share.


F17


»Consolidated
  Statements   2002
          Capital increase
          reserved for employees 855,277 new
          shares "A" were issued on January 24, 2002 at a price per share of €
          45,65 to complete an increase of capital reserved to employees under
          Articles L.225-138-IV of the French Commercial Code and Article L.443-5
          of the French Labor Code, in accordance with the authorization granted
          by the Shareholders meeting held on March 29, 2001 under its thirteenth
          resolution and final terms and conditions fixed by the board of directors
          on December 14, 2001 accordingly. All of these newly issued shares were
          subscribed, either directly or through employee mutual investment funds
          (FCPE) governed by Articles L.214-24 and L.214-40 of the French Financial
          and Monetary Code, by employees of Pechiney and employees of French
          and foreign companies which was affiliated to Pechiney in the meaning
          of Article L.225-80 of the French Commercial Code and have adhered in
          accordance with Article L.444-3 of the French Labor Code to a Group
          Shareholding Plan established by Pechiney under Articles L.443-1 and
          seq. of the French Labor Code. As a result, capital stock amounted to
          € 1,257,842,371.75, representing 82,481,467 shares (of which 81,390,423
          shares "A" and 1,091,044 shares "B") with a par value of € 15.25
          per share.
      
      Issuing
          of debt securities exchangeable for existing shares, or convertible
          into new shares (OCEANE). In April 2002,
          Pechiney issued debt securities for an aggregate amount of € 595,124,859
          face value, representing 7,908,636 bonds convertible into new shares
          "A" and/or exchangeable for existing shares "A", with a par value of
          € 75.25 per bond. From May 21, 2002 to December 20, 2006, each
          of these bonds can be exchanged for existing shares "A" and/or converted
          into new shares "A" to be issued by Pechiney, at a ratio of one share
          for one bond (subject to adjustment of this exchange and/or conversion
          ratio in case of financial operations identified at the time of issuance
          of these bonds). During 2002, none of these debt securities was converted
          into new shares "A".
        Exercise
          of stock options During 2002,
          32,216 options were exercised. This resulted in an increase in capital
          stock related to the exercise of these options of € 491,294
          corresponding to 32,216 new shares "A" issued with a par value of € 15.25
          and an increase in capital premium of € 508,046.32 corresponding
          to € 15.77 for each new share.
        As of December
          31, 2002, capital stock amounted to € 1,258,333,665.75, representing
          82,513,683 shares (of which 81,422,639 shares "A" and 1,091,044 shares
          "B") with a par value of € 15.25 per share.


F18


»Consolidated
  Statements c) Capital structure and voting rights breakdown as of December 31, 2002, 2001 and 2000 According to information received by Pechiney, the breakdown of capital stock and voting rights was as follows As of December 31, 2002, 2001 and 2000:  as
          of December 31, 2002
      
      as
          of December 31, 2001
      
      as
          of December 31, 2000Number
          of
          sharesheld
      
      %
          of
          sharecapital
      
      %of
          votingrights
      
      Number
          of sharesheld
      
      %of
          sharecapital
      
      %of
          votingrights
      
      Number
          of sharesheld
      
      %of
          sharecapital
      
      %of
          votingrightsShares
        "A"Employees(1)
      2,051,394
      
      2.48
      
      2.64
      
      1,429,602
      
      1.75
      
      1.83
      
      1,916,000
      
      2.35
      
      2.41Pechiney(2)
      3,720,170
      
      4.51
      
      -
      
      2,557,896
      
      3.13
      
      -
      
      1,163,642
      
      1.43
      
      -Pechiney
        Nederland N.V.(2)
      982,669
      
      1.19
      
      -
      
      982,669
      
      1.20
      
      -
      
      982,669
      
      1.20
      
      -FLOATING
        STOCK(inst.
        investors & public)of which
      74,668,406
      
      90.49
      
      95.98
      
      75,564,979
      
      92.58
      
      96.79
      
      76,431,835
      
      93.68
      
      96.22-
        Franklin Resources, Inc.(3)
      5,396,777
      
      6.54
      
      6.94
      
      5,469,983
      
      6.70
      
      7.01
      
      4,481,788
      
      5.49
      
      5.64-
        Groupe AGF Assurances(4)
      5,081,067
      
      6.16
      
      6.53
      
      5,081,067
      
      6.22
      
      6.51
      
      5,081,067
      
      6.23
      
      6.40-
        Fidelity Investments(5)
      4,179,328
      
      5.06
      
      5.37
      
      3,354,066
      
      4.11
      
      4.30
      
      -
      
      -
      
      --
        Groupe Caisse des Dépôts(6)
      3,743,668
      
      4.54
      
      4.81
      
      3,507,782
      
      4.29
      
      4.49
      
      3,567,853
      
      4.37
      
      4.49-
        Groupe BNP Paribas(7)
      1,553,733
      
      1.88
      
      2.00
      
      2,891,584
      
      3.54
      
      3.70
      
      2,891,584
      
      3.54
      
      3.64-
        Electricité de France(8)
      -
      
      -
      
      -
      
      6,321,990
      
      7.75
      
      8.10
      
      6,321,990
      
      7.75
      
      7.96Shares
        "B"Pechiney(2)
      14,099
      
      0.02
      
      -
      
      14,099
      
      0.02
      
      -
      
      -
      
      -
      
      -FLOATING
        STOCK(inst.
        investors & public)
      1,076,945
      
      1.31
      
      1.38
      
      1,076,945
      
      1.32
      
      1.38
      
      1,091,044
      
      1.34
      
      1.37Total
      82,513,683
      
      100.00
      
      100.00
      
      81,626,190
      
      100.00
      
      100.00
      
      81,585,190
      
      100.00
      
      100.00 (1)Shares
          held through employee mutual investment funds (FCPE) under a Group employee
          shareholding plan, or directly held after having been acquired or freely
          received from the French State at the time of privatization of Pechiney
          and currently freely tradable. (2)In
          accordance with French law, treasury shares and shares held by a direct
          or indirect subsidiary of the Company have no voting rights.
          (3)Shares
          held by Franklin Resources, Inc. and its subsidiaries are comprised
          primarily of those held by Franklin Templeton through its investment
          funds and managed clients accounts. Last declaration of crossed threshold
          dated February 28, 2002. (4)Last
          declaration of crossed threshold dated May 13, 2002. (5)FMR
          Corp and Fidelity International Ltd, for investments funds held by their
          subsidiaries. Last declaration of crossed threshold dated December 20,
          2002. (6)Directly
          or through investment funds or trading or other companies controlled
          by Caisse des Dépôts et Consignations. Last declaration
          of crossed threshold dated September 2, 2002.(7)
          Last
          declaration of crossed threshold dated October 29, 2002.(8)
          Last
          declaration of crossed threshold dated February 28, 2002.  The shareholdings
          mentioned in this table are those the Company is aware of in accordance
          with declaration for crossed thresholds received by the Company or published
          by the French Financial Market Council (Conseil des Marchés Financiers).
          These shareholdings may have changed since the date of reception or
          publication of the most recent declarations. To the knowledge of the
          Company, no shareholder is lastingly linked to the Company except for
          the Company itself, its Dutch subsidiary Pechiney Nederland N.V and
          employees of the Group. Although disparities in the capital structure
          exist between the last 3 fiscal years, there is no particular rationale
          for such disparities since the holding of shares in the Company usually
          results from the way under which those holding shares in the
      
      Company deal
          with their portfolios of securities under their own plans and policies.
          To the knowledge of the Company, there is no natural person or legal
          entity holding individually more than 5% of the share capital or voting
          rights in the Company except for AGF Vie.
        The articles
          of association of the Company (by-laws) do not permit the award of voting
          rights above the ratio of one voting right per share, and do not set
          forth a ceiling on quantity of voting rights respectively held by each
          shareholder. Any disparity between the percentage of capital and the
          percentage of voting rights held by a shareholder for a same quantity
          of stock only results from the number of treasury shares and shares
          held by direct or indirect subsidiaries of the Company, which shares
          have no voting right.


F19


»Consolidated
  Statements d)
    Share Premium and Retained Earnings Share premium
          represents the difference between the issue price in cash or in-kind
          and the par value of the shares, net of issuance costs. Share premium
          amounted to € 790 million as of December 31, 2002, € 22 million
          of which related to the share capital increase reserved for employees.
      
      Pechineys
          distributable retained earnings amount to € 1.594 million
          and would be subject to additional withholding tax of a maximum amount
          of € 369 million in the event of total distribution. e)
    Cumulative Translation Adjustment of Subsidiaries within Euro Zone The cumulative
          translation adjustment as of December 31, 2002 includes a net credit
          of € 47 million related to translation differences arising
          from balances of subsidiaries within the euro zone. These differences
          will be
      
      recognized
          in income in the event that the Groups investment in these subsidiaries
          is sold or liquidated. f)
    Treasury Shares When Pechiney
          International was merged into Pechiney in December 1997, Pechiney Nederland
          N.V., a subsidiary of Pechiney, received 982,320 common shares "A" of
          Pechiney in exchange for its ownership interest in Pechiney International.
          In addition, in May 1998, Pechiney Nederland N.V. purchased outstanding
          shares of Pechiney International "over the counter" and exchanged them
          for 349 common shares "A". As of December 31, 2002, these common shares
          "A" of Pechiney, which have been retained by the Group, are presented
          in the Consolidated Balance Sheet as a reduction in shareholders
          equity in the amount of € 31 million, representing Pechiney Nederland
          N.V.s share of in the carrying value of Pechiney International
          at the date of the merger, increased by the amount of
          the additional purchase value.
      
      Using the
          authorizations granted by shareholders at the March 28, 2002, March
          29, 2001 and June 2, 1999 Annual General Meetings, Pechiney purchased
          1,162,274 common shares "A" during 2002, 1,394,254 common shares "A"
          and 14,099 preferred shares "B" during 2001 and 1,163,642 common shares
          "A" during 2000, to reduce the excessive fluctuation in the Groups
          share price, to ensure stabilization and liquidity of the market for
          these shares and to enable the exercise of options granted to employees.
          As of December 31, 2002, the common shares "A" of Pechiney which have
          been retained by the Group are presented in the consolidated balance
          sheet as a reduction in shareholders equity in the amount of €
          149 million. g)
    Stock Option Plans Each year
          since 1996, pursuant to the authorizations granted by the Shareholders
          at the March 2001, June 1997 and March 1996 General Meetings, the Board
          of Directors has granted options to certain officers and
      
      employees
          of the Group to subscribe to or purchase common shares "A". The following
          table summarizes information regarding the stock subscription option
          and stock purchase option plans:  Number
          of
      Exercise
        PriceOptions(1)(2)
      (3)(4)
      Other
          information(6)Authorization
        date by shareholders meeting: March 29, 1996Plan
        June 1996 (Stock subscription options)
      
      31.02
        euros
      Granting
        date by the Board of directors: June 26, 1996Outstanding
        as of January 1, 2002
      292,410
      
      Number
        of rights initially granted: 460,500Cancelled
        in 2002
      (8,085)
      
      Legal
        adjustments: 8,713 (2)Exercised
        in 2002
      (32,216)
      
      Number
        of shares already subscribed: (98,019)Outstanding
        as of December 31, 2002
      252,109
      
      Number
        of options cancelled: (119,085)Executive
        Committee:(5)
      31,877
      
      Number
        of underlying shares still under options: 252,109Number
        of remaining beneficiaries:
      322
      
      Options
        vesting date: June 26, 1999Executive
        Committee:(5)
      4
      
      Options
        expiration date: June 25, 2006Authorization
        date by shareholders meeting: March 29, 1996June,
        1997 Plan (Stock subscription options)
      
      29.25
        euros
      Granting
        date by the Board of directors: June 25, 1997Outstanding
        as of January 1, 2002
      15,382
      
      Number
        of rights initially granted: 15,000Cancelled
        in 2002
      -
      
      Legal
        adjustments: 382 (2)Exercised
        in 2002
      -
      
      Number
        of shares already subscribed: (0)Outstanding
        as of December 31, 2002
      15,382
      
      Number
        of options cancelled: (0)Executive
        Committee:(5)
      15,382
      
      Number
        of underlying shares still under options: 15,382Number
        of remaining beneficiaries:
      1
      
      Options
        vesting date: June 26, 2000Executive
        Committee:(5)
      1
      
      Options
        expiration date: June 25, 2007


F20


» Consolidated
  Statements Number
          of
      ExerciseOptions(1)(2)
      Price(3)(4)
      Other
          information(6)Authorization
        date by shareholders meeting: June 25, 1997September,
        1997 Plan (Stock subscription options)
      
      38.14
        euros
      Granting
        date by the Board of directors: June 25, 1997Outstanding
        as of January 1, 2002
      409,230
      
      Number
        of rights initially granted: 541,500Cancelled
        in 2002
      (21,027)
      
      Legal
        adjustments: 10,911 (2)Exercised
        in 2002
      -
      
      Number
        of shares already subscribed: (0)Outstanding
        as of December 31, 2002
      388,203
      
      Number
        of options cancelled: (164,208)Executive
        Committee:(5)
      75,883
      
      Number
        of underlying shares still under options: 388,203Number
        of remaining beneficiaries:
      164
      
      Options
        vesting date: September 16, 2002Executive
        Committee:(5)
      5
      
      Options
        expiration date: September 15, 2007Authorization
        date by shareholders meeting: June 25, 1997May,
        1998 Plan (Stock subscription options)
      
      41.27
        euros
      Granting
        date by the Board of directors: May 18, 1998Outstanding
        as of January 1, 2002
      15,382
      
      Number
        of rights initially granted: 15,000Cancelled
        in 2002
      -
      
      Legal
        adjustments: 382 (2)Exercised
        in 2002
      -
      
      Number
        of shares already subscribed: (0)Outstanding
        as of December 31, 2002
      15,382
      
      Number
        of options cancelled: (0)Executive
        Committee:(5)
      15,382
      
      Number
        of underlying shares still under options: 15,382Number
        of remaining beneficiaries:
      1
      
      Options
        vesting date: May 19, 2003Executive
        Committee:(5)
      1
      
      Options
        expiration date: May 18, 2008Authorization
        date by shareholders meeting: June 25, 1997November,
        1998 Plan (Stock subscription options)
      
      26.69
        euros
      Granting
        date by the Board of directors: November 25, 1998Outstanding
        as of January 1, 2002
      255,924
      
      Number
        of rights initially granted: 337,500Cancelled
        in 2002
      (14,359)
      
      Legal
        adjustments: 6,397 (2)Exercised
        in 2002
      -
      
      Number
        of shares already subscribed: (0)Outstanding
        as of December 31, 2002
      241,565
      
      Number
        of options cancelled: (102,872)Executive
        Committee:(5)
      0
      
      Number
        of underlying shares still under options: 241,565Number
        of remaining beneficiaries:
      159
      
      Options
        vesting date: November 25, 2003Executive
        Committee:(5)
      0
      
      Options
        expiration date: November 24, 2008Authorization
        date by shareholders meeting: June 25, 1997June,
        1999 Plan (Stock subscription options)
      
      37.47
        euros
      Granting
        date by the Board of directors: June 3, 1999Outstanding
        as of January 1, 2002
      349,674
      
      Number
        of rights initially granted: 372,000Cancelled
        in 2002
      (27,687)
      
      Legal
        adjustments: 9,209 (2)Exercised
        in 2002
      -
      
      Number
        of shares already subscribed: (0)Outstanding
        as of December 31, 2002
      321,987
      
      Number
        of options cancelled: (59,222)Executive
        Committee:(5)
      205,085
      
      Number
        of underlying shares still under options: 321,987Number
        of remaining beneficiaries:
      16
      
      Options
        vesting date: June 3, 2004Executive
        Committee:(5)
      5
      
      Options
        expiration date: June 2, 2009Authorization
        date by shareholders meeting: June 25, 1997November,
        1999 Plan (Stock subscription options)
      
      50.01
        euros
      Granting
        date by the Board of directors: November 8, 1999Outstanding
        as of January 1, 2002
      347,745
      
      Number
        of rights initially granted: 373,000Cancelled
        in 2002
      (16,923)
      
      Legal
        adjustments: 9,309 (2)Exercised
        in 2002
      -
      
      Number
        of shares already subscribed: (0)Outstanding
        as of December 31, 2002
      330,822
      
      Number
        of options cancelled: (51,487)Executive
        Committee:(5)
      0
      
      Number
        of underlying shares still under options: 330,822Number
        of remaining beneficiaries:
      257
      
      Options
        vesting date: November 8, 2004Executive
        Committee:(5)
      0
      
      Options
        expiration date: November 7,2009


F21


»Consolidated
    Statements Number
          of
      ExerciseOptions(1)(2)
      Price
        (3)(4)
      Other
          information(6)Authorization
        date by shareholders meeting: June 25, 1997December,
        2000 Plan (Stock subscription options)
      
      46.35
        euros
      Granting
        date by the Board of directors: December 22, 2000Outstanding
        as of January 1, 2002
      973,300
      
      Number
        of rights initially granted: 989,300Cancelled
        in 2002
      (49,600)
      
      Legal
        adjustments: n/aExercised
        in 2002
      -
      
      Number
        of shares already subscribed: (0)Number
        of options cancelled: (65,600)Number
        of underlying shares still under options: 923,700Outstanding
        as of December 31, 2002
      923,700
      
      Options
        vesting date: December 23, 2004Executive
        Committee:(5)
      260,000
      
      of
        which progressively vest from December 23, 2001: 133,300(6)Number
        of remaining beneficiaries:
      336Executive
        Committee:(5)
      5
      
      Options
        expiration date: December 22, 2010Authorization
        date by shareholders meeting: March 29, 2001July,
        2001 Plan (Stock purchase options)
      
      60.06
        euros
      Granting
        date by the Board of directors: July 25, 2001Outstanding
        as of January 1, 2002
      80,300
      
      Number
        of rights initially granted: 80,300Cancelled
        in 2002
      -
      
      Legal
        adjustments: n/aExercised
        in 2002
      -
      
      Number
        of shares already purchased: (0)Number
        of options cancelled: (0)Outstanding
        as of December 31, 2002
      80,300
      
      Number
        of underlying shares still under options: 80,300Executive
        Committee:(5)
      50,000
      
      Options
        vesting date: July 25, 2005Number
        of remaining beneficiaries:
      8
      
      of
        which progressively vest from July 26, 2002: 3,300 (6)Executive
        Committee:(5)
      1
      
      Options
        expiration date: July 25, 2011Authorization
        date by shareholders meeting: March 29, 2001March,
        2002 Plan (Stock purchase options)
      
      59.84
        euros
      Granting
        date by the Board of directors: March 28, 2002Outstanding
        as of March 28, 2002
      920,100
      
      Number
        of rights initially granted: 920,100Cancelled
        in 2002
      (4,600)
      
      Legal
        adjustments: n/aExercised
        in 2002
      -
      
      Number
        of shares already purchased: (0)Number
        of options cancelled: (4,600)Outstanding
        as of December 31, 2002
      915,500
      
      Number
        of underlying shares still under options: 915,500Executive
        Committee:(5)
      192,000
      
      Options
        vesting date: March 29, 2006Number
        of remaining beneficiaries:
      449
      
      of
        which progressively vest from March 29, 2003: 162,200 (6)Executive
        Committee:(5)
      6
      
      Options
        expiration date: March 28, 2012 (1)
      Subject
        to adjustments in connection with changes in the capital stock.(2)
      Including
        adjustments made following a decision by the Board of Directors on May
        12, 2000 in accordance with the articles 174-12 and 174-13 of the French
        decree number
        67-236 on March 23, 1967, on the basis of the average opening quoted price
        of common shares "A" of € 49.04 during the period from May 2, 2000
        to June 5, 2000 and a distribution of reserves amount to € 1.215
        per shares "A" and "B" on June 30, 2000 in accordance with the 5th resolution
        of General Meeting of shareholders held on March 30, 2000. (3)   After
        adjustment mentioned in (2).(4)
      Shares
        must be fully paid for in cash upon exercise of options.(5)
      In
        its composition at December 31, 2002.(6)
      Participant
        having their tax residency within the United States of America at the
        time of exercise of their options may exercise their options within the
        proportion of 25% as from
        the first anniversary of the date of grant, of 50% as from the second
        anniversary of the date of grant, of 75% as from the third anniversary
        of the date of grant and of 100% as from the fourth anniversary of the
        date of grant. Indication in this table of the quantity of options for
        which aforesaid progressive vesting is applicable is an estimation of
        the aggregate number of options so still concerned as of December 31,
        2002.


F22


»Consolidated
  Statements   As of December
          31, 2002, 3,484,950 options were outstanding.


        2,489,150
          options to subscribe for new shares A
          995,800
            options to purchase existing shares "A".

        The range
          of exercise prices of these options (after legal adjustments) was € 26.69
          - € 60.06 and the weighted-average exercise price was € 46.27.
          The weighted-average remaining contractual life of these options was
          7.22 years.
      
      In addition,
          certain American subsidiaries of the Group granted certain executive
          officers, senior management and certain former employees with Stock
          Appreciation Rights plans providing for incentive compensation based
          on changes in the quoted price of Pechiney American Deposit Shares listed
          on the New York Stock Exchange. The related compensation represented
          an income of € 0.3 million in 2002, an expense of € 0.6 million
          in 2001 and an income of € 3 million in 2000 representing the payments
          made and the impact of the decrease or increase in the quoted price
          on outstanding rights at year-end. The following table summarizes information regarding the Stock Appreciation Rights Plans: NumberStock
        Appreciation Rights Plans
      of
          rights
      Exercise
          price
      Exercise
          periodNovember
        1998 Plan
      
      16.16
        dollarsOutstanding
        as of January 1, 2002
      23,300Exercisable
        in 2002
      23,300Exercised
        in 2002
      5,300Cancelled
        in 2002
      18,000Outstanding
        as of December 31, 2002
      -February
        1999 Plan
      
      18.56
        dollarsOutstanding
        as of January 1, 2002
      34,850Exercisable
        in 2002
      34,850Exercised
        in 2002
      20,000Cancelled
        in 2002
      6,600Outstanding
        as of December 31, 2002
      8,250
      
      January
          1, 2003 - February 9, 2003: 8,250 rightsNovember
        1999 Plan
      
      26.10
        dollarsOutstanding
        as of January 1, 2002
      106,300Exercisable
        in 2002
      106,300Exercised
        in 2002
      -Cancelled
        in 2002
      6,500
      
      January
        1, 2003 - June 14, 2003: 30,000 rightsOutstanding
        as of December 31, 2002
      99,800
      
      January
        1, 2003 - November 7, 2003: 69,800 rightsSeptember
        2000 Plan
      
      19.88
        dollarsOutstanding
        as of January 1, 2002
      39,450Exercisable
        in 2002
      39,450Exercised
        in 2002
      10,250Cancelled
        in 2002
      -Outstanding
        as of December 31, 2002
      29,200
      
      January
          1, 2003 - September 21, 2004: 29,200 rightsSeptember
        2001 Plan
      
      16.53
        dollarsGranted
        in 2002
      66,600Exercisable
        in 2002
      66,600Exercised
        in 2002
      -Cancelled
        in 2002
      -
      
      January
        1, 2003 - September 21, 2005: 33,300 rightsOutstanding
        as of December 31, 2002
      66,600
      
      September
        21, 2003 - September 21, 2005: 33,300 rights


F23


»Consolidated
  Statements h)
    Earnings per Share Common
          Shares "A" 
          Computation of basic earnings per share: basic net income (loss) per
          common share "A" is computed by subtracting the preferred dividend payable
          to holders of preferred shares "B" from net income (loss) and dividing
          the resulting number by the aggregate weighted-average number of common
          shares "A" and preferred shares "B" outstanding during the period. Computation
          of diluted earnings per share: the computation of diluted net income
          (loss) per common share "A" is similar to the computation of basic earnings
          per share, except that the denominator is increased to include on
      
      one hand the
          number of additional common shares that would have been outstanding
          if all stock options outstanding at year-end had been exercised and
          on other hand the conversion or the exchange of OCEANE bonds in shares
          "A". In the particular case whereas the options, the conversions or
          the exchanges show a net income per share higher than the one calculated
          with the average number of shares during the exercise, the effects of
          options, conversions and exchanges are not taken into account and the
          diluted income presented is equal to the basic income.  Reconciliation
    of basic and diluted earnings per common share "A": (in
        millions of euros, except earnings
      
      
      2002
      
      
      
      
      
      2001
      
      
      
      
      
      2000per
        share, in euros)Net
        Income
        (numerator)(Restated)
      
      Average
        Number
        of
          Shares(denominator)
      
      Earnings
        per
          Share(Restated)
      
      Net
        Income
        (numerator)(Restated)
      
      Average
        Number
        of
          Shares(denominator)
      
      Earnings
        per
          Share(Restated)
      
      Net
        Income
        (numerator)(Restated)
      
      Average
        Number
        of
          Shares(denominator)
      
      Earnings
          per
          Shares(Restated)Net
        Income
      (55)
      
      
      
      
      
      234
      
      
      
      
      
      318Preferred
        dividend
      (2)
      
      
      
      
      
      (1)
      
      
      
      
      
      (1)Basic
        income availableto
        common shareholders
      (57)
      
      78,520,814
      
      (0.72)
      
      233
      
      79,058,594
      
      2.94
      
      317
      
      80,272,151
      
      3.94Effect
        of dilutive stock options(a)
      -
      
      
      
      -
      
      
      
      608,669
      
      
      
      
      
      456,969Amortization
        of OCEANE
      (b)bonds
        reimbursement premiumDiluted
        income availableto
        common shareholders
      (57)
      
      78,520,814
      
      (0.72)
      
      233
      
      79,667,263
      
      2.92
      
      317
      
      80,729,120
      
      3.92 (a)
          The number of additional common shares that would have been outstanding
          if all stock options outstanding at year-end had been exercised is computed
          using the treasury stock method. This method assumes that the proceeds
          upon exercise are used exclusively to repurchase Pechiney common shares,
          at the average market price during the period, reducing the number of
          shares to be added to outstanding common shares in computing diluted
          earnings per share. (b)
          The effects of options, conversions and exchanges are not taken into
          account in 2002 because they are antidilutive.  Preferred
          Shares "B"Computation
          of basic and diluted earnings per share: basic and diluted netincome
          (loss) per preferred share "B" are computed by adding the
      
      preferred
          dividend of 9.5% of par value per preferred share "B" to basic anddiluted net income (loss) per common share "A".  Basic
        and diluted earnings per preferred share "B":(in
        euros)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)Basic
        earnings
      0.73
      
      4.39
      
      5.39Diluted
        earnings
      0.73
      
      4.37
      
      5.37


F24


» Consolidated
  Statements   Note
        13 - Minority Interests(in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000Beginning
        of period
      169
      
      169
      
      153-
        dividends paid to minority shareholders
      (21)
      
      (23)
      
      (6)-
        minority interests in net income of consolidated subsidiaries
      -
      
      28
      
      31-
        minority interests change in ownership interest
      3
      
      (6)
      
      (18)-
        translation adjustment
      (2)
      
      1
      
      9End
        of period
      149
      
      169
      
      169Note
        14 - Other Long-Term Liabilities(in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000Liabilities
        for pensions and similar obligations
      595
      
      518
      
      463Liabilities
        for postretirement benefits other than pensions
      420
      
      499
      
      487Reserve
        for restructuring expense
      3
      
      5
      
      10Reserve
        for environmental expense
      54
      
      54
      
      71Other
        non-current liabilities
      70
      
      53
      
      481,142
      
      1,129
      
      1,079 a) Activity in Long-Term Liabilities (including Short Term portion) Balance
          at beginningof
          year
      
      Increase
      
      Decrease
      
      Other
          changes
      
      Balance
          at end of yearLong
      
      Short
      
      Total
      
      Charge
      
      Amount
      
      Amount
      
      
      
      Long
      
      Short
      
      TotalTerm
      
      Term
      
      
      
      to
          income
      
      used
      
      released
          to income
      
      
      
      Term
      
      TermLiabilities
        for pensions and similar obligations
      518
      
      34
      
      552
      
      78
      
      (54)
      
      
      
      58
      
      595
      
      39
      
      634liabilities
        for postretirement benefits
        other than pensions
      499
      
      48
      
      547
      
      52
      
      (49)
      
      
      
      (85)
      
      420
      
      45
      
      465Reserve
        for restructuring expense
      5
      
      45
      
      50
      
      36
      
      (32)
      
      (1)
      
      (7)
      
      3
      
      43
      
      46Reserve
        for environmental expense
      54
      
      22
      
      76
      
      34
      
      (14)
      
      (6)
      
      (13)
      
      54
      
      23
      
      77Other
        non-current liabilities
      53
      
      46
      
      99
      
      21
      
      (14)
      
      (10)
      
      2
      
      70
      
      28
      
      98Total
      1,129
      
      195
      
      1,324
      
      221
      
      (163)
      
      (17)
      
      (45)
      
      1,142
      
      178
      
      1,320  Change in
          provisions for pensions and similar obligations and for postretirement
          benefits other than pensions reported under "other changes" include
          translation adjustments related to North American subsidiaries.


F25


»Consolidated
  Statements b)
    Liabilities for Pensions and similar obligations and Postretirement Benefits
    Other than Pensions The obligations
          of the Group with respect to pensions relate principally to defined
          benefit pension plans covering certain employees of French companies
          who joined the Group prior to January 1, 1973 and substantially all
          employees of North American companies. The obligations of the Group
          that are similar to pensions relate principally to lump sum indemnities
          payable to employees of French companies upon retirement. Pension benefits
          and similar obligations are based on formulas, which generally take
          into account length of service, job grade and compensation.
        Pension plans
          are generally funded, except for those of French companies, which are
          not funded. Annual contributions to the defined benefit pension plans
      
      are at least
          equal to the minimum funding requirements under local laws and regulations.
          Retirement indemnities and similar schemes are not funded.
        The Groups
          North American subsidiaries provide healthcare and life insurance benefits
          to retired employees based on age and length of service. The cost of
          these schemes is directly assumed by the related companies and is not
          funded. Generally, healthcare benefits represent a percentage of costs
          incurred after deductibles and other reimbursements. The changes in
          benefit obligations and in the fair value of plan assets in 2002 and
          2001, and the net amounts recognized in the balance sheet as of December
          31, 2002 and 2001 are as follows:  (in
        millions of euros, as of December 31)
      Pensions
          and Similar Obligations
      
      Other
          Postretirement Benefits2002
      
      2001
      
      2002
      
      2001Change
        in benefit obligation-
        benefit obligation at beginning of year
      806
      
      739
      
      611
      
      521-
        service cost
      31
      
      26
      
      8
      
      6-
        interest cost
      50
      
      48
      
      42
      
      40-
        plan amendements
      4
      
      1
      
      (3)
      
      (7)-
        plan participants contributions
      -
      
      -
      
      -
      
      --
        actuarial loss
      51
      
      28
      
      80
      
      72-
        acquisitions (divestitures
      52
      
      6
      
      -
      
      --
        translation adjustment
      (46)
      
      12
      
      (105)
      
      29-
        benefits paid
      (61)
      
      (54)
      
      (49)
      
      (50)Benefit
        obligation at end of year
      887
      
      806
      
      584
      
      611Change
        in plan assets-
        fair value of plan assets at beginning of year
      209
      
      210
      
      -
      
      --
        actual return on plan assets
      (19)
      
      (6)
      
      -
      
      --
        plan participants contributions
      -
      
      -
      
      -
      
      --
        employers contribution
      59
      
      47
      
      49
      
      50-
        acquisitions (divestitures)
      34
      
      -
      
      -
      
      --
        translation adjustment
      (31)
      
      12
      
      -
      
      --
        benefits paid
      (61)
      
      (54)
      
      (49)
      
      (50)Fair
        value of plan assets at end of year
      191
      
      209
      
      -
      
      -Funded
        status
      (696)
      
      (597)
      
      (584)
      
      (611)-
        unrecognized actuarial loss
      292
      
      245
      
      135
      
      79-
        unrecognized prior service cost and transition (asset) obligation
      3
      
      3
      
      (16)
      
      (15)Net
        amount recognized
      (401)
      
      (349)
      
      (465)
      
      (547)Amounts
        recognized in the statement of financial position consist of:-
        prepaid benefit cost
      7
      
      12
      
      -
      
      --
        accrued benefit liability (*) (**)
      (634)
      
      (552)
      
      (465)
      
      (547)-
        other intangible assets
      4
      
      -
      
      -
      
      --
        other long-term asset (**) (gross amount)
      222
      
      191
      
      -
      
      -Net
        amount recognized
      (401)
      
      (349)
      
      (465)
      
      (547)(*)Current
        portion included in this amount:
      (39)
      
      (34)
      
      (45)
      
      (48)(**)The
        accrued pension liability recognized in the balance sheet included an
        amount of € 222 million (€ 191 million as of December 31, 2001)
        representing the additional amount required to recognize the minimum liability
        which is defined by SFAS 87 as the excess of the accumulated benefit obligation
        over the fair value of the plan assets. The changes of this additional
        amount, which are mainly linked to the fluctuation in the return of plan
        assets, do not impact the income statement; the counterpart of this additional
        amount, net of tax, is registered in "other long-term assets" (see note
        9).


F26


» Consolidated
  Statements The projected
          benefit obligation, accumulated benefit obligation and fair value of
          plan assets for the pension plans with accumulated benefit obligations
          in excess of plan assets were € 887 million, € 825 million
          and € 191 million, respectively, as of December 31, 2002 and
          € 806 million,
      
      €
          739 million and € 209 million, respectively, as of December 31,
          2001.
        The components
          of the net pensions and similar obligations cost and of the healthcare
          and life insurance cost are as follows:  (in
        millions of euros, as of December 31)
      Pensions
          and Similar Obligations
      
      Other
          Postretirement Benefits2002
      
      2001
      
      2000
      
      2002
      
      2001
      
      2000Components
        of costService
        cost
      31
      
      26
      
      25
      
      8
      
      6
      
      5Interest
        cost
      50
      
      48
      
      46
      
      42
      
      40
      
      38Expected
        return on plan assets
      (18)
      
      (20)
      
      (20)
      
      -
      
      -
      
      -Net
        amortization
      15
      
      3
      
      4
      
      2
      
      (2)
      
      (3)Net
        periodic benefit cost
      78
      
      57
      
      55
      
      52
      
      44
      
      40  For pension
          and similar obligations benefits, amortization is based uponthe average remaining service period of covered employees.
      
      Assumptions
          used to determine the benefit obligations and costs are asfollows:  Pensions
        and Similar Obligations
      
      Other
        Postretirement BenefitsWeighted-average
        assumptions2002
      
      2001
      
      2002
      
      2001Discount
        rate:-
        Projected Benefit Obligation
      6.03%
      
      6.25%
      
      6.74%
      
      7.25%-
        Interest cost
      6.15%
      
      6.54%
      
      7.07%
      
      7.25%Expected
        rate of increase in compensation levels
      3.42%
      
      3.51%
      
      5.00%
      
      5.00%Expected
        rate of return on plan assets
      9.06%
      
      9.42%
      
      -
      
      -  The assumed
          health care cost trend rate in 2002 was 8.01 percent for pre-65 retirees
          and 7.21 percent for post-65 retirees. These rates are expected to decline
          to ultimate trend rates of 6.0 percent and 5.0 percent, respectively,
          by the year 2006 and remain at those levels thereafter.
      
      Assumed health
          care trend rates have a significant effect on the amounts reported for
          the health care plans.
        A one-percentage-point
          change in assumed health care cost trend rate would have the following
          effects:    One-Percentage-
      
      One-Percentage-(in
        millions of euros)
      Point
          Increase
      
      Point
          DecreaseEffect
        on total of service and interest cost components
      2
      
      (1)Effect
        on postretirement benefit obligation
      35
      
      (32)  c)
        Reserve for restructuring expense(in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000Long-term
        portion
      3
      
      5
      
      10Current
        portion
      43
      
      45
      
      25Total
      46
      
      50
      
      35


F27


» Consolidated
  Statements The activity in the restructuring reserve for the years ended December 31, 2002, 2001 and 2000 was as follows: (in
        millions of euros)
      Employee
          termination and severance programs
      
      Other
          exit costs
      
      TotalAs
        of January 1, 2000
      58
      
      8
      
      66Charge
        to income
      14
      
      1
      
      15Cash
        expenditure
      (44)
      
      (3)
      
      (47)Other
      1
      
      -
      
      1As
        of December 31, 2000
      29
      
      6
      
      35Charge
        to income
      27
      
      26
      
      53Cash
        expenditure
      (21)
      
      (12)
      
      (33)Other
      -
      
      (5)
      
      (5)As
        of December 31, 2001
      35
      
      15
      
      50Charge
        to income
      35
      
      1
      
      36Cash
        expenditure
      (21)
      
      (11)
      
      (32)Other
      (8)
      
      -
      
      8)As
        of December 31, 2002
      41
      
      5
      
      46 Expected cash payments for restructuring costs in future periods are as follows: (in millions
        of euros)2003
      432004
      22005
      1Total
      46  As of December
          31, 2002, restructuring reserves are primarily comprised of amounts
          related to plans initiated in 2002 (€ 22 million) and in 2001 (€16
          million).
        Restructuring
          plans initiated in 2002 mainly concern redundancy schemes at Pechiney
          Rolled Products, Pechiney Aviatube, Pechiney Aviatube Ltd (Aluminum
          Conversion segment), Pechiney Electrométallurgie (Ferroalloys
          and Other segment) and Decoplast (Packaging segment). Collectively,
          they target the termination of 870 positions. Under these programs 319
          positions were terminated at the end of 2002.
      
      Restructuring
          plans initiated in 2001 concerned mainly the cessation of the primary
          magnesium primary activity (Ferroalloys and Other segment) and globally
          targeted the termination of 531 positions. Under these plans 388 positions
          were terminated at the end of 2002. d) Reserve
    for environmental expense Laws and regulations
          expose the Group to the risk of substantial environmental costs and
          liabilities, including liabilities associated with past activities.
          The Group is involved in judicial and administrative proceedings concerning
          environmental compliance and the remediation of contamination at Group
          properties and other sites. The Group also has contractually undertaken
          to indemnify certain purchasers of the Groups divested assets
          for certain environmental liabilities associated with those assets.
      
      The related
          charges are reserved for when these liabilities can be reasonably estimated.
          The types of costs accrued are expenditures for clean up of environmental
          contamination and other remediation activities. The estimated reserves
          are based on current environmental laws and regulatory requirements
          and currently available technology. The accrued costs do not include
          potential recoveries from insurers and have not been discounted to their
          present value.


F28


Consolidated
    Statements The
        environmental reserves are as follows:in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000Long-term
        portion
      54
      
      54
      
      71Current
        portion
      23
      
      22
      
      15Total
      77
      
      76
      
      86  Most of these
          environmental reserves are associated with the remediation of former
          waste disposal sites used by the Group in the past, primarily in the
          United States. The Group is a responsible party at the majority of these
          sites. The Group is also involved in several remediation matters in
          France, mainly relating to waste disposal sites. As of the end of 2002,
          about 80 sites are concerned.
        The precision
          and reliability of the loss estimates vary from site to site, depending
          on such factors as the quantity of data concerning contamination at
          the site, the extent to which remediation requirements have been identified
          or agreed upon with regulatory authorities and the availability and
          likelihood of contributions from other responsible parties. The Group
          believes that the amount it has reserved will enable it to satisfy its
          known and anticipated
      
      environmental
          liabilities to the extent they can be estimated. In addition, the Group
          is not aware of environmental matters for which a material loss to the
          Group, beyond the existing reserves, could currently be considered reasonably
          possible. Because environmental matters cannot be predicted with certainty,
          there can be no assurance that the reserves will be adequate for all
          purposes. In addition, the discovery of new sites or future developments
          at known sites, such as changes in law or environmental conditions,
          could result in increased environmental costs and liabilities in excess
          of accrued environmental reserves that could have a material effect
          on the Groups results of operations in any given year or its consolidated
          financial position, although the amount of such increases cannot be
          estimated. e) Other
    non-current liabilities The increase
          of the non-current liabilities between 2001 and 2002 is due to the consolidation
          in 2002 of Sofiri, a captive insurance company. Life insurance and claim
          reserves of this company amount to € 23 million at the end of 2002.  Note
        15 - Debt (Restated)(in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000(Restated)Bonds
      916
      
      314
      
      313Other
        long-term debt
      549
      
      657
      
      421Long-term
        debt
      1,465
      
      971
      
      734Current
        portion
      39
      
      37
      
      31Total
      1,504
      
      1,008
      
      765Including
        capital lease obligations
      4
      
      5
      
      4Short-term
        bank loans
      390
      
      912
      
      594  As of December
          31, 2002, total net indebtedness amounted to € 1,437 million (€
          1,473 million and € 869 million as of December 31, 2001 and
          2000, respectively) after deducting cash in the amount of 283 million
          (€ 322 million and € 377 million as of December 31, 2001
          and 2000,
      
      respectively)
          and marketable securities in the amount of € 153 million (€
          113 million and € 86 million as of December 31, 2001 and 2000,
          respectively) and including other financial liabilities and receivables.


F29


»Consolidated
    Statements Maturity
        of Debt(in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000In
        1 year
      39
      
      37
      
      31In
        2 years
      219
      
      71
      
      26In
        3 years
      304
      
      300
      
      67In
        4 years
      130
      
      299
      
      311In
        5 years
      617
      
      85
      
      296More
        than five years
      195
      
      216
      
      341,504
      
      1,008
      
      765Breakdown
        of Long-Term Debt by Major Currency (Excluding Current Portion)(in
        millions of euros, as of December 31)
      2002
      
      2001
      
      2000Euros
      1,203
      
      618
      
      436U.S.
        dollars
      260
      
      350
      
      296Other
        currencies
      2
      
      3
      
      21,465
      
      971
      
      734  Individually
        Significant Long-Term Loans as of December 31, 2002(in
        millions of euros)
      Interest
          rate
      Maturity
      
      Nominal
          Value
      
      2002PechineyBonds
      5.10%
      2005
      
      (1,500
        M. FRF)
      
      229Equity
        link bonds
      (*)Pechiney
        share
      2005
      
      (350
        M. FRF)
      
      53Convertible
        bonds
      (**)3.25%
      2007
      
      (595
        M. EUR)
      
      604Private
        placement
      5.10%
      2003
      
      (200
        M. FRF)
      
      10Private
        placement
      EURIBOR
      (***)2006
      
      (260
        M. FRF)
      
      40Private
        placement
      EURIBOR
      2005
      
      (80
        M. FRF)
      
      8Private
        placement
      EURIBOR
      2008
      
      (183
        M. EUR)
      
      183Pechiney
        PacificLine
        of credit
      LIBOR
      2004
      
      (185
        M. USD)
      
      176Line
        of credit
      LIBOR
      2006
      
      (110
        M. USD)
      
      74Aluminium
        Pechiney SPVLines
        of credit
      LIBOR
      2013
      
      (110
        M. USD)
      
      9OtherOther
        long-term loans
      
      
      
      
      
      79Current
        portion of long-term loans
      
      
      
      
      
      39Total
        long-term debt (including current portion)
      
      
      
      
      
      1,504 (*)
      Swap
        against index EURIBOR.(**)
      Gross
        annual yield 3.25%, redemption premium 10.05% of the nominal value (amortized
        over the life of the bonds, see Note 20c).(***)
      Maturity
          in 2003, extendable until 2006 on option. Interest
          on short-term debt is based on monetary indexes such as EURIBOR, LIBOR
          or spot rate, depending on the currency and debt instrument. As of December
          31, 2002, the Group has available outstanding and unused long-term lines
          of credit amounting to € 821 million. The information relating
          to financial instruments and to the market value of the debt is provided
          in Note 19.  The information relating to guarantees on indebtedness is provided in Note 20.


F30


»Consolidated
  Statements Note
        16 - Financial Expense(in
        millions of euros, year ended December 31)
      2002
      
      2001
      
      2000Financial
        expense:-
        interest on long-term debt
      (52)
      
      (49)
      
      (66)-
        interest on short-term debt
      (26)
      
      (48)
      
      (44)-
        interest on the sale of receivables
      (5)
      
      (8)
      
      (9)-
        exchange loss
      (8)
      
      (4)
      
      (12)-
        capitalized interest
      3
      
      3
      
      2-
        other expense
      (4)
      
      (6)
      
      (5)(92)
      
      (112)
      
      (134)Financial
        income:-
        interest on long-term loans
      5
      
      11
      
      6-
        revenue from marketable securities
      4
      
      -
      
      3-
        exchange gain
      15
      
      7
      
      9-
        short-term financial income
      16
      
      25
      
      47-
        other income
      3
      
      1
      
      143
      
      44
      
      66Financial
        expense, net
      (49)
      
      (68)
      
      (68)Note
        17 - Other (Expense) Income (Restated)Other
        income and expense for the years ended December 31, 2002, 2001 and 2000
        includes the following:(in
        millions of euros, year ended December 31)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)Gain
        (loss) on divestitures and writedowns of financial assets
      (80)
      
      (12)
      
      7Expenses
        relating to retirees
      (26)
      
      (27)
      
      (23)Other
      3
      
      49
      
      8(103)
      
      10
      
      (8)  In
          2002:
        the
          caption "Gain (loss)on divestitures and writedowns of financial assets"consists
          mainly of a € 47 million writedown of the investment in entities
          limited to the brokerage activity sold in 2000,following the settlement
          of a litigation relating to the activity;
        the
          caption "Other" comprises mainly a gain of € 24 million resulting
          from the positive settlement of a litigation relating to a patent held
          by the Group and of a loss of € 20 million corresponding to the
          cost of an insurance policy covering environment remediation costs of
          a former mine located in the United States.
      
      In
          2001:
        the
          caption "Other" consists mainly of a € 48 million release related
          to Viskase litigation, a charge amounting to € 31 million paid
          by Alcoa to the group when it sold its interest in Worsley to Billiton
          and a charge amounting to € 13 million related to reserves for
          environmental remediation costs.
        In
          2000:
        the
          caption "Other" consists mainly of a € 16 million release from
          reserves related to ANC and a charge amounting to € 4 million related
          to reserves for environmental remediation costs.


F31


»Consolidated
    Statements Note 18 - Income Taxes (in
        millions of euros, year ended December 31)
      2002
      
      2001
      
      2000Current
        income taxes
      (64)
      
      (106)
      
      (157)Deferred
        income taxes
      28
      
      (18)
      
      (9)(36)
      
      (124)
      
      (166)Withholding
        taxes
      (3)
      
      (6)
      
      (6)(39)
      
      (130)
      
      (172) a)
    Effective Tax Rate Since 2002,
          the effective tax rate calculated on the basis of income before goodwill
          amortization and writedowns. A pro-forma effective tax rate has been
          calculated for the previous periods.
      
      The difference
          between the effective tax rate and the enacted tax rate applicable in
          France is as follows:   2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)Enacted
        tax rate
      35.43%
      
      36.43%
      
      37.76%Effect
        of foreign tax rates differential
      (9.20%)
      
      (4.20%)
      
      (3.60%)Permanent
        différences
      (12.90%)
      
      (3.35%)
      
      (6.80%)Taxes
        at lower rates
      (14.30%)
      
      1.17%
      
      (0.40%)Change
        in valuation allowance
      14.20%
      
      1.92%
      
      2.40%Other
      (7.90%)
      
      (3.28%)
      
      0.60%Withholding
        taxes
      2.30%
      
      1.70%
      
      1.00%Effective
        tax rate
      36.23%
      
      30.43%
      
      30.96%b)
        Deferred Income TaxDeferred income
        taxes are reported in the consolidated balance sheet as follows: (in
        millions of euros, as of December 31)
      
      2002
      
      2001
      
      2000Deferred
        income tax assets
      - long term
      505
      
      335
      
      331-
        short term
      51
      
      60
      
      53Deferred
        income tax liabilities
      -
        long term
      (195)
      
      (173)
      
      (93)-
        short term(*)
      (10)
      
      (7)
      
      (7)Net
        deferred income taxes assets
      
      351
      
      215
      
      284 (*)
        included in "Other payables and accrued liabilities" in the Consolidated
        Balance Sheet.


F32


»Consolidated
  Statements  Deferred income taxes include the following components:(in millions of euros, as of December 31)
   2002
   
   2001
   
   2000Temporary differences - assetsDepreciation and amortization
   51
   
   33
   
   16Employee benefits liabilities
   409
   
   418
   
   386Restructuring reserves
   13
   
   23
   
   4Others
   115
   
   108
   
   101Total
   588
   
   582
   
   507Net operating losses
   679
   
   641
   
   660Less valuation allowance
   (459)
   
   (525)
   
   (536)Total assets, net of valuation allowance
   808
   
   698
   
   631Temporary differences - liabilitiesDepreciation and amortization
   313
   
   337
   
   218Capitalized interest
   12
   
   14
   
   5Regulated reserves
   48
   
   48
   
   41Inventory
   21
   
   23
   
   25Unremitted reserves
   7
   
   8
   
   4Tax reserves
   17
   
   15
   
   11Others
   39
   
   38
   
   43Total liabilities
   457
   
   483
   
   347Net deferred income tax asset
   351
   
   215
   
   284  The valuation
          allowance relates to net operating losses carried forward and other
          deferred tax assets which more likely than not will not be realized.
        At December
          31, 2000, 2001, and 2002 valuation allowances relating to loss carryforwards
          of French companies continue to represent the majority
      
      of the total
          allowance. They relate to loss carryforwards exceeding the probable
          taxable income during the carryforward period and to those carryforwards
          with no expiry date which are subject to limitations to their use such
          that it is unlikely that they will be used against taxable income. Note 19
    - Financial Instruments linked to financial and metal risk management a) Financial
    Instruments Used The Group
          uses various financial instruments to reduce its exposure to fluctuations
          in currency values and interest rates.
        The majority
          of the financial instruments used are over-the-counter instruments that
          are sufficiently standard and liquid to be considered similar to instruments
          commonly traded on organized financial markets:

          in order
            to hedge foreign exchange exposures, the Group buys and sells currencies
            in both the spot and forward markets, buys currency options and buys
            or sells instruments for simple option strategies (collars);
          in order
            to hedge interest rate exposures, the Group buys caps to limit the
            exposure to interest rate increases to fix, in advance and for a period
            of generally less than seven years, the amounts of future payments.
            The
      
      Group also
            enters into interest rate swaps or swaptions to fix the cost of the
            debt for periods exceeding one year.

        The Group does
          not use financial instruments with leverage features. Accordingly, the
          notional amount of the contracts is the proper measure for determining
          the effect of possible fluctuations in the foreign exchange or interest
          rate markets.
        The Group
          does not engage in the trading of foreign exchange and interest rate
          instruments except for certain limited arbitrage transactions in the
          foreign exchange markets. These arbitrage transactions are exclusively
          performed on spot and forward foreign exchange markets or through options
          strategies. These operations are carried out, within predetermined limits,
          in order to optimize the management of the Groups


F33


»Consolidated
  Statements centralized
          hedging operations. These transactions are entered into exclusively
          on currencies commonly used by the Group. As a result of the predetermined
          limits, net open positions resulting from arbitrage operations are not
          material. As arbitrage transactions are not hedges,
      
      positions
          are marked to market and unrealized gains and losses are immediately
          recorded in income, within the caption Financial expense, net. b) Hedging
    of Currency Risks Hedging operations
          are centralized at the parent company for all subsidiaries when permitted
          by local regulations and by administrative management constraints. The
          main material exception to this principle is Pechiney Japon K.K.. All
          hedging is performed using instruments quoted on organized markets or
          over-the-counter transactions that are similar to instruments traded
          on organized markets.
        The Group
          policy is to systematically hedge risks associated with firm commercial
          transactions. As an exception to this rule, for certain exposures where
          the amount and maturity are known, the Group may decide either not to
          hedge certain specific risks, or to hedge certain transactions which
          are anticipated but not yet committed.
        Foreign exchange
          instruments are utilized to hedge commercial purchase and sale contracts
          of Group subsidiaries, as soon as such contracts are entered into, as
          foreign exchange exposure arises at that time. Accordingly, foreign
          exchange instruments generally hedge trade payables and trade receivables
          denominated in foreign currencies and contracted but unbilled purchases
          and sales denominated in foreign currencies.
        Exchange
          gains and losses related to operating activities are recorded in Income
          from operations, principally in Net sales and Cost of goods sold. Gains
          and losses related to financial activities are recorded in Financial
          expense, net.
        Portfolio
          of Foreign Exchange Instruments
        As of December
          31, 2002, the foreign exchange instruments portfolio consisted primarily
          of hedging purchases of raw materials and sales of aluminum, semi-fabricated
          and fabricated products by the French
      
      companies
          in the aluminum activities (€ 545 million equivalent of export
          hedges - forward sales - and € 814 million equivalent of import
          hedges -forward purchases).
        As of December
          31, 2002, the foreign exchange instruments portfolio also included foreign
          exchange contracts granted to affiliates (€ 14 million equivalent
          of forward purchases and € 8 million equivalent of forward sales)
          and hedging contracts which are now external to the Group (€ 22
          million equivalent of forward purchase, exchange contract assumed by
          Rexam in connection with the sale of ANC) as well as the related hedging
          contracts with banks.
        Foreign exchange
          instruments (currency swaps) are also used to convert debt instruments
          issued in euros into U.S. dollars, primarily in order to refinance U.S.
          based operations; as of December 31, 2002, these hedging foreign exchange
          instruments amounted to € 495 million.
        The open
          options portfolio as of December 31, 2002 consisted primarily of:

          puts purchased:
            Euro / Sterling, € 10 million;

        calls purchased:
          Euro / U.S. dollars, € 10 million and puts purchased: Euro / U.S.
          dollars, € 13 million;
          purchases
            of collars: Australian dollars / U.S. dollars (calls purchased AUD
            / USD: € 41 million; puts written AUD / USD: € 41 million)
            for the Australian operations of the Aluminum sector;
          purchases
            of collars: Euros / U.S. dollars (puts purchased EUR / USD:
            €  114
            million; calls written EUR / USD: € 114 million), puts written
            EUR / USD, € 57 million, and purchases of puts Euros / U.S. dollars,
            € 57 million, granted to affiliates of the Aluminum sector;
          purchases
            of collars: Euros / U.S. dollars (calls purchased EUR / USD:
            €  57
            million; puts written EUR / USD: € 57 million) with banks for
            hedging of collars with consolidated entities. The portfolio of
    foreign exchange instruments at year end was as follows:  (in millions of euros)
   2002
   
   2001
   
   2000Notional amountForward puritanismes
   700
   
   741
   
   889Forward sales
   1,489
   
   1,828
   
   1,634Options puritanisme
   473
   
   972
   
   604Options written
   440
   
   949
   
   539 Gains or losses with
  respect to foreign exchange instruments are described in paragraph (f) below.


F34


»Consolidated
  Statements The foreign exchange positions as of December 31, 2002 by major currency were as follows (foreign currency amounts are translated at December 31, 2002 exchange rates): (in millions of euros)
      Forward Purchases
      Forward SalesU.S. dollar
      561
      
      1,326Pound Sterling
      24
      
      106Japanese yen
      1
      
      13Other
      114
      
      44Total
      700
      
      1,489  As of December
          31, 2002, currency instruments with a term longer than one year but
          shorter than 6 years represent an amount of € 69 million for
          forward purchases, € 202 million for forward sales. c) Hedging
    of Interest Rate Risks The interest
          rate risks of the Group are managed centrally by the parent company
          to the extent permitted by local laws. All hedging is performed using
          over-the-counter instruments that are similar to instruments traded
          on organized markets.
        Most of the
          Groups long-term debt bears interest at variable rates. This results
          in exposure to fluctuations in the interest rate markets, which the
          Group reduces through the use of interest rate instruments. The Group
          policy is to use these instruments to fix or to limit the fluctuations
          of a portion of the interest expense on its variable rate debt:

          interest
            rate swaps to fix the interest expense on variable rate debt;
          caps or
            swaptions to limit the effect of fluctuations in interest rates on
            the interest expense on variable rate debt.
      
      Premiums paid
          or received related to cap transactions or swaptions and amounts receivable
          and payable related to swap transactions are recorded in Financial expense
          concurrently with the interest expense on the underlying debt.
        Interest
          rate instruments are essentially used to hedge long-term debt, which
          bears interest at rates indexed on LIBOR, STIBOR and EURIBOR.
        Portfolio
          of Interest Rate Instruments
        The following
          tables set forth for each period presented and for each category of
          interest rate instrument used by the Group, the notional amount, maturity
          and average rate. The average rate for caps represents the average ceiling
          rate. The average rate for swaps and swaptions represents the average
          guaranteed fixed rate. These instruments are used to hedge a portion
          of the debt bearing interest at variable rates and denominated in euros
          and U.S. dollars.


F35


»Consolidated
  Statements (in
        millions of euros)
      Notional
          Amount
      
      Maturity
      
      
      Average
          rate<
        1 year
      
      1
        - 7 yearsAs
        of December 31, 2002Interest
        Rate swap - Fixed rate debt:-
        in EUR Fixed to EURIBOR
      114
      -
      
      114
      
      4.4%-
        in USD Fixed to LIBOR
      270
      195
      
      75
      
      2.38%Interest
        Rate swap - Capped rate debt:-
        in EUR EURIBOR to capped EURIBOR
      138
      -
      
      138
      
      6.13%Interest
        Rate swap -Fixed rate debt:-
        in EUR Fixed to EURIBOR
      311
      -
      
      311
      
      4.77%Interest
        Rate swap -Capped rate debt:-
        in EUR EURIBOR to capped EURIBOR
      45
      -
      
      45
      
      6%Caps
        purchases:-
        in EUR Fixed to PIBOR
      152
      152
      
      -
      
      4.88%Currency
        interest rate swaps:-
        in EUR / SEK for EURIBOR / STIBOR
      15
      -
      
      15
      
      -As
        of December 31, 2001Interest
        Rate swap - Fixed rate debt:-
        in EUR Fixed to EURIBOR
      114
      -
      
      114
      
      4.4%Interest
        Rate swap - Capped rate debt:-
        in EUR EURIBOR to capped EURIBOR
      138
      -
      
      138
      
      6.01%Interest
        Rate swap -Fixed rate debt:-
        in EUR Fixed to EURIBOR
      311
      -
      
      311
      
      4.77%-
        in EUR Fixed to CMS
      45
      -
      
      45
      
      4.25%Interest
        Rate swap -Capped rate debt:-
        in EUR EURIBOR to capped EURIBOR
      45
      -
      
      45
      
      6%Caps
        purchases:-
        in EUR Fixed to PIBOR
      152
      -
      
      152
      
      4.88%-
        in USD Fixed to LIBOR
      238
      238
      
      -
      
      7.5%Caps
        sales:-
        in USD Fixed to LIBOR
      238
      238
      
      -
      
      7.5%Currency
        interest rate swaps:-
        in EUR / SEK for EURIBOR / STIBOR
      15
      -
      
      15
      
      -As
        of December 31, 2000Interest
        Rate swap - Fixed rate debt:-
        in FRF / EUR Fixed to EURIBOR
      152
      38
      
      114
      
      4.31%Interest
        Rate swap -Variable rate debt-
        in FRF / EUR Fixed to EURIBOR
      311
      -
      
      311
      
      4.77%-
        in FRF / EUR Fixed to CMS
      45
      -
      
      45
      
      4.25%Caps
        purchases:-
        in FRF Fixed to PIBOR
      400
      248
      
      152
      
      4.71%-
        in USD Fixed to LIBOR
      290
      64
      
      226
      
      7.5%Caps
        sales:-
        in FRF Fixed to PIBOR
      8
      8
      
      -
      
      5%-
        in USD Fixed to LIBOR
      290
      64
      
      226
      
      7.5%Currency
        interest rate swaps-
        in EUR / SEK for EURIBOR / LIBOR
      15
      -
      
      15
      
      - There are no interest rate instruments with a maturity longer than seven years.


F36


»Consolidated
  Statements d) Metal
    Commitments Industrial
          divisions In order to
          reduce its exposure to price fluctuations of certain metals (principally
          aluminum), the Group uses the following instruments traded on the London
          Metal Exchange (LME) or New York Commodity Exchange (COMEX): purchase
          and sales contracts, purchased options or option hedging strategies.
        These transactions
          allow the Groups industrial companies to fix the future prices
          of purchasing raw materials or the margin levels or to limit to a determined
          level the effect of future price fluctuations on these prices or margin
          levels. The Group has been applying, for its subsidiaries which produce
          aluminum, a policy designed to take advantage of the increases in aluminum
          prices and excluding any locking-in of sales prices for medium or long-term
          periods, and on a case by case basis protecting itself against a decrease
          in prices below a pre-determined level by purchasing put options.
        Gains and
          losses on forward metal contracts and options which serve to hedge metal
          price exposures within industrial subsidiaries are recorded in the same
          manner and period as the gains and losses on the hedged transactions.
          In accordance with the Groups risk management policies,
      
      instruments
          which reduce the exposure to fluctuations in the price of metal and
          are designated as hedges of the exposed items are accounted for as hedges.
        Futures and
          options contracts are only entered into with creditworthy counterparties
          and up to predetermined limits for any one counterparty, so as to limit
          credit risks. Market risks arise from the volatility of the aluminum
          market, which can result in significant fluctuations in the market value
          of hedge instruments. The effect of these fluctuations on future purchases
          and sales of aluminum should approximately offset the effect on the
          market value of the hedging instruments.
        International
          Trade division
        For the subsidiaries
          in the International Trade division, which trade both internally with
          the Groups industrial subsidiaries and with third parties, commodity
          instruments are essentially used as hedges in order to fix a profit
          margin on their operations. These hedges, determined either specifically
          or globally, are made on firm commitments. At the end of each period,
          the original values of all open contracts are marked to market. For
          metals which are not traded on organized markets (mainly alumina), unrealized
          gains are not recorded. The revenues of
    the agency and trading activities (and of brokerage activities until February
    2000) are recorded as follows: (in millions of euros, for the year ended december 31)
   2002
   
   2001
   
   2000Purchase for resale net revenue(*)
   138
   
   112
   
   138Commission and brokerage income
   24
   
   21
   
   17(*)
        Net sales less Cost of goods sold.  The division
          limits the credit risks associated with trading and brokerage activities
          by dealing only with highly rated counterparties, by limiting its maximum
          exposure to any single counterparty and by spreading its risks among
          a large number of counterparties. The market risks of the trading activities
          result from potential fluctuations in the market price of metals, possible
          mismatches in the timing of long and short positions, and potential
          changes in the premiums or discounts applicable to specific markets.
          The market risk associated with the brokerage activities is generally
          limited to a one day risk and there is little long-term exposure. The
          market risks of both the trading and brokerage activities are subject
          to strict
      
      policies and
          controls, including risk limits. The brokerage activity is also subject
          to the regulatory control of the U.K. Securities and Futures Authority
          (SFA).
        Open
          positions as of December 31, 2002
        As of December
          31, 2002, hedging instruments for aluminium have a fair value of €
          (11) million whereas hedging instruments for other metals have a fair
          value of € 1 million. Fair value represents unrealized hedging
          gains (losses) deferred at the year end. These deferred gains (losses)
          are expected to offset the effects of price fluctuations on sales and
          purchases of metal.


F37


»Consolidated
  Statements   e)
          Counterparty Risk and Market Risk
        The potential
          counterparty risks to the Group are concentrated in the following areas:

          accounts
            receivable;
          debt and
            equity investments;
          off balance
            sheet financial instruments;

        The client
          risk, which is managed by each subsidiary, is limited due to the large
          number of clients spread among many industrial sectors and geographic
          locations.
      
      Excess cash
          generated by subsidiaries is remitted to the parent Company when permitted
          by local regulations. These funds are invested in money market or mutual
          funds.
        All off balance
          sheet financial instruments are entered into with highly rated financial
          institutions. Accordingly, the Group does not believe that non-performance
          by a counterparty would have a significant impact on its financial position.
        As the Group
          uses financial instruments to hedge its interest rate and foreign exchange
          exposures, the Group believes the market risk with respect to such instruments
          is not material. f) Market
    Value of Financial Instruments The table below
    summarizes the book and market values of the financial instruments used by
    the Group as of December 31, 2002, 2001 and 2000. 2002
      
      2001
      
      2000(in
        millions of euros)Net
          Book value
      
      Market
          value
      
      Net
          book value
      
      Market
          value
      
      Net
          book value
      
      Market
          valueInvestments
        in equity affiliates
      285
      
      285
      
      297
      
      297
      
      261
      
      261Long-term
        investments
      139
      
      139
      
      141
      
      141
      
      149
      
      149Long-term
        loans
      49
      
      49
      
      55
      
      55
      
      60
      
      60Accounts
        receivable - trade (Restated)
      1,281
      
      1,281
      
      1,466
      
      1,466
      
      1,500
      
      1,500Marketable
        securities
      153
      
      153
      
      113
      
      113
      
      86
      
      86Cash
        (Restated)
      283
      
      283
      
      332
      
      332
      
      377
      
      377LiabilitiesLong-term
        debt(including
        current portion)
      1,504
      
      1,463
      
      1,008
      
      1,002
      
      765
      
      757Accounts
        payable  trade
      1,456
      
      1,456
      
      1,504
      
      1,504
      
      1,503
      
      1,503Short-term
        bank loans
      390
      
      390
      
      912
      
      912
      
      594
      
      594Off
        balance sheetInterest
        rate instruments
      
      
      11
      
      
      
      0
      
      
      
      0Currency
        instruments
      
      
      59
      
      
      
      (3)
      
      
      
      23  The market
          value of equity affiliates and long-term investments was determined
          using stock exchange values for listed companies, equity values for
          non-listed equity affiliates and, for non-listed investments, the net
          book values, which approximate the market values.
        The market
          value of long-term fixed rate debt and of significant long-term loans
          was determined item by item, using values communicated either by the
          agent bank or estimated by the Group on the basis of discounted future
          cash flows, using rates and conditions prevailing at the end of each
          period.
        The market
          value for cash and cash equivalents and for all current assets and liabilities
          (Accounts Receivable - trade, Marketable Securities, Accounts Payable
          - Trade and short-term Bank Loans) is considered to be equal to the
          net book value due to their short-term maturities.
      
      The market
          value of off balance sheet foreign exchange instruments is determined
          by reference to the closing rates at the balance sheet date.
        The banks
          that are counterparties to currency options and interest rate instruments
          confirmed the market value of off balance sheet interest rate instruments.
        In the last
          two cases, the market value represents what the Group would receive
          (or pay) to unwind the foreign exchange and interest rate instruments
          as of the balance sheet date. As these instruments relate essentially
          to specific hedges, the gain or loss arising from the mark to market
          on the instrument is offset by the gain or loss on the designated hedged
          item.


F38


»Consolidated
  Statements Note 20
    - Commitments and Contingent Liabilities a) Guarantees provided in the usual course of business (in
        millions of euros, as of December 31)
      
      
      
      
      Guarantees<
        1 year
      
      from
          1 to 3 years
      
      from
          3 to 5 years
      
      >
        5 years
      
      Total
          2002Receivables
        sold(1)
      200
      
      -
      
      -
      
      -
      
      200Guarantees(2)
      79
      
      263
      
      194
      
      43
      
      579Mortgages
        and liens
      -
      
      -
      
      -
      
      -
      
      -Total
      279
      
      263
      
      194
      
      43
      
      779 (1)
      The
        Group has entered into agreements with certain financial institutions
        to sell up to € 187 million of selected receivables without recourse
        (€ 199 million in 2001, € 205 million in 2000) and up to €
        28 million with recourse (€ 8 million in 2001, € 7 million in
        2000). The outstanding receivables sold deducted from the caption "Accounts
        and
        notes receivables" amounts to € 200 million in 2002, including €
        25 million sold with recourse.(2)
      Guarantees given mainly relate to loans and credit lines granted to Group
        companies.  As of December
          31, 2002, debt instruments in the aggregate amount of € 1,165
          million, including unused lines of credit,
      
      contained
          restrictive covenants relating to the maintenance of the consolidated
          net worth of Pechiney and consolidated debt to equity ratio. The following
    table shows, as of December 31, 2002, the Groups loans and lines of
    credit for a term exceeding one year, drawn or partially drawn, which are
    subject to early redemption requirements if the Group fails to maintain certain
    levels of consolidated net worth or exceeds certain indebtedness ratios: Rate
      Maturity
      Maximum
      Amount
      
      Consolidated Net
      Debt RatioPrincipal Amount
      Drawn Down
      
      Worth Requirement( millions)PechineyPrivate Placement
      EURIBOR
      2008
       183 million
      183
      
      >  2,500 million
      < 140 %Pechiney PacificLine of credit
      LIBOR
      2004
      US$ 185 million
      176
      
      >  1,982 million(1)
      -Line of credit
      LIBOR
      2006
      US$ 110 million
      74
      
      >  2,500 million
      - (1) 13 billion
  French francs b) Other
    commitments provided in the usual course of business Commitments(in
        millions of euros, as of December 31)<
        1 year
      
      from
          1 to 3 years
      
      from
          3 to 5 years
      
      >
        5 years
      
      Total
          2002Operating
        leases
      19
      
      28
      
      17
      
      29
      
      93Capital
        expenditures
      66
      
      4
      
      -
      
      -
      
      70Total
      85
      
      32
      
      17
      
      29
      
      163 Financial instruments linked to foreign exchange interest, rate and metal exposure are detailed in Note 19. c) Guarantees and other commitments relating to non-recurring transactions Amounts(in
        millions of euros, as of December 31)
      <
        1 year
      
      from
          1 to 3 years
      
      from
          3 to 5 years
      
      >
        5 years
      
      Total
        2002Contingent
        guarantees and commitments(*)OCEANE
        bonds redemption premium
      -
      
      -
      
      51
      
      -
      
      51Earn
        out clauses
      2
      
      -
      
      -
      
      -
      
      2Firm
        commitments (*)Bauxilum
        project
      -
      
      7
      
      210
      
      -
      
      217Tomago
      -
      
      -
      
      29
      
      -
      
      29Total
      2
      
      7
      
      290
      
      -
      
      299 (*) Assessed
  commitments; these commitments, as well as the non-assessable guarantees and
  other commitments relating to non-recurring transactions, are described hereunder.


F39


»Consolidated
  Statements OCEANE
    bonds redemption premium On
          April 2002, the Group launched an offering of bonds convertible into
          new shares and / or exchangeable for existing shares of Pechiney (OCEANE),
          with a redemption premium. The redemption premium, which amounts to
          € 60 million, is amortized over the life of the bonds. At the end
          of December 2002, the unrecognized premium amounts to € 51 million.
          Except in case of an anticipated repayment decided by Pechiney, these
          bonds are all redeemable on January 1st, 2007. These bonds can also
          be exchanged for existing "A" shares of Pechiney, or converted into
          new "A" shares to be issued by Pechiney, from May 21, 2002 to December
          20, 2006. During 2002, no bond has been purchased on the Stock Exchange
          or redeemed by Pechiney and there was no request for conversion or exchange.
        Earn
          out clauses
        As
          part of the agreements for the acquisition of certain assets, the Group
          has agreed to pay additional amounts to the sellers, provided that various
          conditions are met. The maximum amount which could be paid in respect
          of these agreements is estimated at € 2 millions, payable in 2003.
        Bauxilum
          project
        In
          2001, Aluminium Pechiney SPV, a subsidiary of the Group, entered into
          a technical, commercial, financial and management support agreement,
          the Investment and Liquidation Agreement, with CVG Bauxilum ("Bauxilum")
          a subsidiary of the Venezuelan state holding company Corporacion Venezolana
          de Guyana. The purpose of this agreement is to modernize Bauxilums
          bauxite and alumina production facility so as to increase in a lasting
          manner its annual production from 1.7 million tons to 2 million tons
          and to ensure compliance of the installations in environmental matters.
        Within
          the framework of this agreement, the Group will provide equipment, technology,
          technical assistance and other services to Bauxilum for a total value
          of approximately 228 million dollars (representing € 217 million
          at December 31, 2002) which shall be financed, on the one hand, by two
          loans of a maximum amount of 110 million dollars granted by a banking
          syndicate to Aluminium Pechiney SPV, and for the remainder, by the Group.
          Reimbursements of the loan amounts shall be carried out through the
          sale of alumina which shall be off taken by the Group. Taking into account
          the projects structure, the credit risk incurred by the Group
          should not exceed an estimated 120 million dollars. Within the framework
          of this project, it is provided that the Group will deliver several
          guarantees, in particular as to performance and that it will subcontract,
          under its responsibility, part of the project. This project also calls
          for a feasibility study for an extension of the facility so as to allow
          the increase of alumina production from 2 to 3 million tons.
        This
          agreement became effective on December 23, 2002, when the conditions
          precedent to the closing of the transaction contemplated by the Investment
          and Liquidation Agreement were completed.
      
      As
          of December 31, 2002, the financing through the loan agreements was
          available to Aluminium Pechiney SPV, the expenses incurred by the Group
          within the framework of the project amounted to € 17 million and
          drawings on the banking pool loan amounted to € 14 million.
        Tomago
        On
          April 28, 2002, Pechiney and its partners in the Tomago smelter agreed
          to increase the capacity of the plant. The Pechiney commitment in relation
          to this project amounts to 34 million Australian dollars (representing
          € 18 million at December 31, 2002), which could be raised to 53
          million Australian dollars (representing € 29 million at December
          31, 2002) in case one of the partners uses its right not to participate
          in the project.
        Aluminium
          Dunkerque
        In
          June 1990, the Group agreed to take off the whole production of the
          Dunkerque plant and to finance part of the working capital of the plant.
          Also pursuant to this agreement, the shareholders of Aluminium Dunkerque
          other than the Group (representing in the aggregate 65% of its share
          capital) have the right to put their shares of Aluminium Dunkerque.
          This put option will be exercisable progressively, beginning September
          1 following the date on which 80% of Aluminium Dunkerques project
          financing indebtedness is reimbursed which, according to present estimates,
          will occur in 2003. The put option will then be open for a period of
          five years. The percentage of put options exercisable each year represents
          30% of the shares held by the shareholders of Aluminium Dunkerque other
          than the Group. As a result of the exercise of these put options, the
          Group could obtain a majority interest in Aluminium Dunkerque, as early
          as the first year of the exercise period, thereby requiring the Group
          to consolidate Aluminium Dunkerque, including the then outstanding project
          financing indebtedness (which could represent up to 20% of the original
          amount, or $ 135 million). The purchase price would be the fair market
          value of the shares as determined each year during the exercise period
          by independent experts.
        Corus
          project
        Pechiney
          had reached an agreement in principle with the Anglo-dutch Group Corus
          on the proposed acquisition of its aluminum conversion activities.The
          proposed acquisition was rejected by the supervisory board of Corus'
          Dutch Subsidiary, which decision was upheld by the Amsterdam Enterprise
          Court on an appeal brought by the management board of Corus Group plc.
          As a consequence, Corus Group plc is required to pay Pechiney an agreed
          break-up fee of € 20 million, according to its contractual obligations.
        Liability
          guarantees
        As
          part of the agreements for the sale of certain investments or assets,
          the Group has guaranteed the buyers against various risks relating mainly
          to tax, labor and environmental matters. These guarantees are those
          usually encountered in such transactions and are, generally, limited
          in duration and subject to deductible or threshold clauses or capped,
          depending on assets and liabilities guaranteed.


F40


» Consolidated
  Statements d) Obligations
    and commitments summary (in
        millions of euros, as of December 31)
      
      
      Amounts
          to be paid<
        1 year
      
      from
          1 to 3 years >
      
      from
          3 to 5 years >
      
      5
        years
      
      Total
        2002Loans
        (see Note 15)
      39
      
      523
      
      747
      
      195
      
      1,504Capital
        leases
      8
      
      18
      
      19
      
      12
      
      57Off
        balance sheet commitments:-
        provided in the usual course of business (see b above)
      85
      
      32
      
      17
      
      29
      
      163-
        non-recurring (see c above)
      2
      
      7
      
      290
      
      -
      
      299Total
      134
      
      580
      
      1,073
      
      236
      
      2,023 e)
    Contingent liabilities Certain Group
          companies have been subjected to tax audits which are not completed.
        Management
          believes that all known litigation involving the Group is
      
      adequately
          provided for so that liabilities related to such litigation should not
          materially affect the Groups financial position or results of
          operations. Note 21
    - Related Party Transactions Significant transactions
    and balances between the Group and its affiliates as of and for the years
    ended December 31, 2002, 2001 and 2000 included the following: (in
        millions of euros)
      2002
      
      2001
      
      2000Year
        ended December 31Net
        sales (Restated)
      158
      
      302
      
      280Purchases
        (Restated)
      490
      
      679
      
      610As
        of December 31Accounts
        receivable - trade, net
      21
      
      38
      
      55Long-term
        loans (non-current portion)
      33
      
      50
      
      54Financial
        advances, net
      19
      
      38
      
      8Accounts
        payable  trade
      91
      
      101
      
      86  As of December
          31, 2002, Pechiney has entered into exchange and currency option contracts
          for a total amount of € 366 million with Aluminium Dunkerque and
          Alucam. These contracts mature in 2003.
      
      The Group
          also enters into numerous transactions with certain of its main shareholders,
          notably Assurances Générales de France.


F41


»Consolidated
  Statements Note 22
    - Segment and Geographic Information A - OPERATIONAL
    SEGMENTS The activities
          of Pechiney are organized into 17 divisions, each offering specific
          products and services. The five major operating segments presented below
          are either divisions or groups of divisions with similar characteristics.
          The Primary Aluminum division produces aluminum, alumina and bauxite
          and licenses aluminum related technology. Aluminum Conversion includes
          the divisions which convert aluminum into laminated or extruded products.
          Packaging includes the divisions which produce flexible plastic packaging,
          tubes, aerosols and a large range of other packaging for the food, healthcare
          and beauty markets. The International Trade division is engaged in metal
          sales. Ferroalloys and other is mainly comprised of Pechiney Electrométallurgie.
      
      Segment performance
          is evaluated principally on earnings from operations, which is calculated
          as income (loss) from operations, less amortization of goodwill, long-lived
          asset writedowns, restructuring expense and other income (expense).
        The accounting
          principles applied in the determination of segment earnings from operations
          are identical to those described in Note 1 with the exception of the
          interest cost and return on plan assets relating to the North American
          defined benefit pension plans and medical and life insurance schemes
          for the Packaging segment, which are recorded under Holdings. The impact
          on the Groups operating margin of the elimination of interGroup
          profit in inventory is recorded in Holdings. Segment assets do not include
          deferred tax assets of companies included in the French and U.S. tax
          groups, which are recorded in Holdings.  AluminumPackaging
      
      Ferroalloys
      
      International
      
      Holdings
      
      Total(in
        millions of euros)
      Primary
      
      Aluminum
      
      
      
      &
          other
      
      TradeAluminum
      
      Conversion2002Net
        sales
      1,605
      
      2,618
      
      2,342
      
      308
      
      5,036
      
      -
      
      11,909Earnings
        from operations
      276
      
      16
      
      129
      
      3
      
      73
      
      (90)
      
      407Restructuring
        expense,
      
      
      
      
      
      
      
      
      
      
      
      
      (145)long-lived
        asset writedownsOther
        income (expense)
      
      
      
      
      
      
      
      
      
      
      
      
      (98)Income
        (loss) from operations
      
      
      
      
      
      
      
      
      
      
      
      
      164Financial
        expense, net
      
      
      
      
      
      
      
      
      
      
      
      
      (49)Income
        (loss) before income taxes
      
      
      
      
      
      
      
      
      
      
      
      
      115Assets(excluding
        cash and Marketable securities)
      1,984
      
      1,937
      
      2,120
      
      380
      
      665
      
      712
      
      7,798Cash
        and marketable securities
      
      
      
      
      
      
      
      
      
      
      
      
      436Total
        assets
      
      
      
      
      
      
      
      
      
      
      
      
      8,234Acquisitions
        of property, plantand
        equipment
      133
      
      130
      
      196
      
      16
      
      2
      
      2
      
      479Depreciation
        and amortization excludinglong-lived
        assets writedowns and
      (90)
      
      (96)
      
      (124)
      
      (17)
      
      (3)
      
      (5)
      
      (335)goodwill
        amortization


F42


»Consolidated
  Statements   Aluminum(in
        millions of euros)
      Primary
      
      Aluminum
      
      Packaging
      
      Ferroalloys
      
      International
      
      Holdings
      
      TotalAluminum
      
      Conversion
      
      
      
      &
          other
      
      Trade(Restated)
      
      
      
      (Restated)2001Net
        sales
      1,851
      
      2,676
      
      2,418
      
      358
      
      4,209
      
      -
      
      11,512Earnings
        from operations
      423
      
      23
      
      136
      
      -
      
      58
      
      (88)
      
      552Restructuring
        expense,
         long-lived
        asset writedowns
      
      
      
      
      
      
      
      
      
      
      
      
      (75)Other
        income (expense)
      
      
      
      
      
      
      
      
      
      
      
      
      10Income
        (loss) from operations
      
      
      
      
      
      
      
      
      
      
      
      
      487Financial
        expense, net
      
      
      
      
      
      
      
      
      
      
      
      
      (68)Income
        (loss) before income taxes
      
      
      
      
      
      
      
      
      
      
      
      
      419Assets
        (excluding cash and Marketable
      2,019
      
      2,004
      
      2,396
      
      388
      
      829
      
      618
      
      8,254securities)Cash
        and marketable securities
      
      
      
      
      
      
      
      
      
      
      
      
      445Total
        assets
      
      
      
      
      
      
      
      
      
      
      
      
      8,699Acquisitions
        of property, plant and equipment
      51
      
      137
      
      177
      
      20
      
      2
      
      2
      
      389Depreciation
        and amortization excludinglong-lived
        assets writedownsand goodwill amortization
      (86)
      
      (91)
      
      (125)
      
      (19)
      
      (3)
      
      (4)
      
      (328)AluminumPrimary
      
      Aluminum
      
      Packaging
      
      Ferroalloys
      
      International
      
      Holdings
      
      Total(in
        millions of euros)
      Aluminum
      
      Conversion
      
      
      
      &
          other
      
      Trade(Restated)
      
      
      
      (Restated)2000Net
        sales
      2,039
      
      2,600
      
      2,085
      
      377
      
      3,773
      
      -
      
      10,874Earnings
        from operations
      509
      
      78
      
      100
      
      -
      
      65
      
      (93)
      
      659Restructuring
        expense,long-lived
        asset writedowns
      
      
      
      
      
      
      
      
      
      
      
      
      (29)Other
        income (expense)
      
      
      
      
      
      
      
      
      
      
      
      
      (8)Income
        (loss) from operations
      
      
      
      
      
      
      
      
      
      
      
      
      622Financial
        expense, net
      
      
      
      
      
      
      
      
      
      
      
      
      (68)Income
        (loss) before income taxes
      
      
      
      
      
      
      
      
      
      
      
      
      554Assets
        (excluding cash and Marketable securities)
      1,938
      
      1,727
      
      2,065
      
      345
      
      723
      
      826
      
      7,624Cash
        and marketable securities
      
      
      
      
      
      
      
      
      
      
      
      
      463Total
        assets
      
      
      
      
      
      
      
      
      
      
      
      
      8,087Acquisitions
        of property, plant and equipment
      33
      
      117
      
      106
      
      25
      
      5
      
      1
      
      287Depreciation
        and amortization excluding long-lived assets writedowns and goodwill
      (85)
      
      (78)
      
      (113)
      
      (20)
      
      (3)
      
      (4)
      
      (303)amortization


F43


»Consolidated
  Statements B - GEOGRAPHIC INFORMATION (BY
    COUNTRY OF PRODUCTION) (in millions of euros, as
        of December 31)
      Net sales
      Long-lived
          assets2002France
      4,972
      1,315United States of America
      3,546
      1,155Australia
      356
      421Other
      3,035
      741Total
      11,909
      3,6322001France
      4,719
      1,432United States of America
      3,695
      1,346Australia
      394
      506Other (Restated)
      2,704
      718Total (Restated)
      11,512
      4,0022000France
      4,725
      1,350United States of America
      3,598
      1,223Australia
      421
      234Other (Restated)
      2,130
      477Total (Restated)
      10,874
      3,284


F44


»Consolidated
  Statements Note 23
    - List of Group Companies Percentage of
    ownership interest as of December 31, 2002 COMPANIES
    ACCOUNTED UNDER THE GLOBAL METHOD ARE: ALUMINUM
        METALAlufin
        (Germany)
      100Aluminium
        de Grèce (Greece)
      60Aluminium
        Pechiney (France)(*)
      100Aluminium
        Pechiney SPV (France)
      100Cathjoh
        Holdings Pty Ltd (Australia)
      100Électrification
        Charpente Levage (France)
      100Électrification
        Charpente Levage DPG Engineering Pty Ltd (South Africa)
      100Électrification
        Charpente Levage Canada - CDG Services Inc. (Canada)
      100Johcath
        Holdings Pty Ltd (Australia)
      100Pechiney
        Bécancour, Inc. (United States)
      100Pechiney
        Consolidated Australia PTY Ltd (Australia)
      100Pechiney
        Nederland C.V. (Netherlands)
      85Pechiney
        Nederland N.V. (Netherlands)
      100Pechiney
        Pacific PTY Ltd (Australia)
      100Pechiney
        Resources PTY Ltd (Australia)
      100Pechiney
        Sales Corporation (United States)
      100Société
        Financière pour le Développement de lAluminium (France)
      100ALUMINUM
        CONVERSIONAffimet
        (France)
      100Aluminium
        Pechiney (France)(*)
      100Pechiney
        Aluminium Presswerk GmbH (Germany)
      100Pechiney
        Aviatube (France)
      100Pechiney
        Aviatube Ltd. (Great Britain)
      100Pechiney
        Cast Plate, Inc. (United States)
      100Pechiney
        Eurofoil Belgique S.A. (Belgium)
      100Pechiney
        Eurofoil Luxembourg S.A. (Luxembourg)
      100Pechiney
        Rhenalu (France)
      100Pechiney
        Rolled Products LLC (United States)
      100Pechiney
        Rolled Products Property and Equipment Co, LLC (United States)
      100Pechiney
        Softal (France)
      100Satma
        (France)
      100Société
        des Fonderies dUssel (France)
      100


F45


»Consolidated
    Statements PACKAGINGBenson
        S.r.l (Italy)
      100Cebal
        Brasil Limitada (Brazil)
      100Cebal
        CR S.A. (Czech Republic)
      100Cebal
        Entec S.A. (Spain)
      100Cebal
        Italiana S.P.A (Italy)
      84Cebal
        Mexico S.A. de C.V. (Mexico)
      100Cebal
        Tuba SP ZO.O. (Poland)
      58Cebal
        UK Ltd (Great Britain)
      100Cebal
        S.A.S. (France).
      100Cebal
        Verpackungen GmbH & Co (Germany)
      100Cebal
        Zhongshan Co. Ltd (Chine)
      60Cepillos
        de Matamoros (Mexico)
      100Cosmetech
        Mably Europe (France)
      100Cosmetech
        Mably International Hong-Kong Ltd (Hong-Kong)
      100Cosmetech
        Mably International LLC (United States)
      100Decoplast
        (France)
      100Financière
        Techpack (France)
      100Guardian
        Española S.A. (Spain)
      100Henlopen
        Manufacturing Co, Inc (United States)
      100Industrias
        Metalicas Castello, SA (Spain)
      100JPS
        Packaging, Inc (United States)
      100Laffon
        S.P.A (Italy)
      100Lir
        France (France)
      100MT
        Packaging (France)
      100Pechiney
        Capalux (Canada)
      100Pechiney
        Cebal Packaging Ltd (Great Britain)
      100Pechiney
        Cechobal, S.r.o. (Czech Republic)
      100Pechiney
        Celograf S.A. (Spain)
      100Pechiney
        Capsules (France)(**)
      100Pechiney
        Emballage Flexible Europe (France)
      100Pechiney
        Lebensmittelverpackungen (Germany)
      100Pechiney
        Manufacture Marocaine dAluminium (Morocco)
      61Pechiney
        Plastic Packaging, Inc. (United States)(***)
      100Pechiney
        Scheuch GmbH & Co, KG (Germany)
      100Pet
        Plas Packaging Ltd (Great Britain)
      100Polibol
        S.A. (Spain)
      100Precis
        S.A. (Spain)
      100Société
        Française de Galvanoplastie (France)
      100Soplaril
        Italia S.p.A (Italy)
      100Soplaril
        Portugal Lda (Portugal)
      100Soplaril
        S.A. (France)
      100Techpack
        America Inc (United States)
      100Techpack
        America Cosmetic Packaging, L.P. (United States)
      100Techpack
        Deutschland Gmbh (Germany)
      100Techpack
        España, S.L. (Spain)
      100Techpack
        International (France)
      100TPI
        Mexicana S.A. (Mexico)
      100TPI
        Molplastic Ltda. (Brazil)
      100


F46


»Consolidated
  Statements RELATED
        INDUSTRIAL ACTIVITIESFerroalloysInvensil (France)
   100Pechiney Electrométallurgie (France)
   100Pechiney Electrométallurgie Abrasifs-Réfractaires (France)
   100Silicon Smelters (South Africa)
   100OtherPechiney Centre de Recherches de Voreppe (France)
   100INTERNATIONAL
        TRADEAlmet France (France)
   100Pechiney Approvisionnements Alumine (France)
   100Pechiney Deutschland GmbH (Germany)
   100Pechiney Far East (Hong-Kong)
   100Pechiney Italia S.p.A (Italy)
   100Pechiney Japon K.K. (Japan)
   100Pechiney Trading Company S.A. (Switzerland)
   100Pechiney Trading France (France)
   100Pechiney Trading Limited (Great Britain)
   100Pechiney UK Ltd (Great Britain)
   100Pechiney World Trade USA, Inc. (United-States)(****)
   100Pechiney World Trade (France)
   100HOLDINGSCompagnie Générale de Participation Industrielle et Financière (France)
   100Financière Européenne dEmballages Pechiney (France)
   100Financière Européenne dEmballages Pechiney Holdings UK Ltd (Great Britain)
   100Pechiney Aluminium Engineering (United States)
   100Pechiney Holdings, Inc. (United States)
   100Pechiney Metals Corporation (United States)
   100Pechiney Metals Corporation Lease Company (United States)
   100Pechiney Plastic Packaging, Inc. (United States)(***)
   100Pechiney Holdings UK Ltd (Great Britain)(*****)
   100Pechiney World Trade USA, Inc (United States)(****)
   100Sofiri (Luxembourg)
   100 THE MAJOR COMPANIES ACCOUNTED FOR UNDER THE EQUITY METHOD ARE: Airlessystems
        (France)
      50Almet - a.m.b.
        (Germany)
      36Alucam (Cameroon)
      47Aluminium Dunkerque
        (France)
      35Carbone Savoie
        (France)
      30Pechiney Reynolds
        Québec, Inc. (Canada)
      50Queensland Alumina
        Limited (Australia)
      20Socatral (Cameroon)
      30 (*)
      Aluminium
        Pechiney is comprised of "Aluminium Metal" and "Aluminium Conversion".(**)
      Legal
        Name of Pechiney Emballage Alimentaire became Pechiney Capsules from September
        2002.(***)
      Pechiney
        Plastic Packaging, Inc. is comprised of "Packaging" and "Holdings".(****)
      Pechiney
        World Trade USA, Inc. is comprised of "International Trade" and "Holdings".(*****)
      Legal
        Name of Pechiney World Trade Holdings Ltd became Pechiney Holdings UK
        Ltd from June 2002.


F47


» Consolidated
  Statements Note 24
    - Compensation and Number of Employees (year
        ended December 31)
      2002
      
      2001
      
      2000Restated
      
      RestatedLabor
        costs (in millions of euros)
      1,773
      
      1,681
      
      1,543Average
        number of employees of consolidated subsidiaries
      33,499
      
      32,402
      
      29,680 Note 25
    - Reconciliation with US GAAP (Restated) The accounting
          principles used by the Group to prepare its consolidated financial statements
          conform with accounting principles generally accepted in France, which
          differ in certain significant respects from accounting principles generally
          accepted in the United States of America (US GAAP). Differences between
          the accounting principles applied to
      
      prepare the
          Group consolidated financial statements and US GAAP are described below.
          Their impact is quantified in the reconciliation of consolidated net
          income and shareholders equity. A condensed US GAAP statement
          of income, a condensed US GAAP balance sheet and certain other supplementary
          information are also presented. Restatement As discussed
          in Note 1, in order to comply with the requirements of the United States
          Securities and Exchange Commission, the Group restated its French GAAP
          financial statements as presented herein as of December 31, 2001 and
          2000
      
      and for each
          of the years ended December 31, 2002, 2001 and 2000. The impact of the
          restatement on previously reported US GAAP amounts is summarized in
          the table below. Earnings
      
      
      
      Earnings
      
      Earningsfrom
      
      Net Income
      
      per Share 
      
      per Share 
      
      Total
      
      Total
      
      ShareholdersNet Sales
      
      Operations
      
      (Loss)
      
      Basic
      
      Diluted
      
      Assets
      
      Liabilities
      
      EquityYear Ended December31, 2002Previously reported
      11,918
      
      423
      
      (4)
      
      (0.07)
      
      (0.07)
      
      8,374
      
      5,465
      
      2,909Adjustment
      
      
      
      
      (5)
      
      (0.06)
      
      (0.06)
      
      -
      
      -
      
      -As restated
      11,918
      
      423
      
      (9)
      
      (0.13)
      
      (0.13)
      
      8,374
      
      5,465
      
      2,909Year Ended December31, 2001Previously reported
      11,043
      
      503
      
      194
      
      2.43
      
      2.42
      
      8,745
      
      5,508
      
      3,237Adjustment
      458
      
      + 3
      
      + 1
      
      + 0.02
      
      + 0.01
      
      16
      
      11
      
      5As restated
      11,501
      
      506
      
      195
      
      2.45
      
      2.43
      
      8,761
      
      5,519
      
      3,242Year Ended December31, 2000Previously reported
      10,679
      
      658
      
      314
      
      3.90
      
      3.88
      
      7,975
      
      4,800
      
      3,175Adjustment
      195
      
      + 1
      
      4
      
      + 0.04
      
      + 0.04
      
      14
      
      10
      
      4As restated
      10,874
      
      659
      
      318
      
      3.94
      
      3.92
      
      7,989
      
      4,810
      
      3,179 Description
    of differences between accountingprinciples applied to prepare the consolidated financial statements and US
    GAAP a) Derivative
    instruments and hedging activity The changes
          introduced in US GAAP in 2001 by SFAS 133 and SFAS 138 (Accounting for
          Derivative Instruments and Hedging Activities) cannot be applied under
          French accounting principles. As a result, in the consolidated financial
          statements, the accounting for derivatives and hedging activities remained
          unchanged:


        derivative
          instruments used as hedges are not recognized in the balance sheet;
        hedging
          gains and losses are recorded in the same period as the income or loss
          on the hedged transactions.

        In US GAAP
          financial statements, as of January 1, 2001:

          all derivative
            instruments are recognized in the balance sheet, at fair value;
      
      hedge accounting
            may be applied to hedges meeting strict criteria; the Group applies
            hedge accounting to the main hedging transactions which meet these
            criteria;
          for cash
            flow hedges, hedge accounting consists of recording changes in the
            fair value of the derivative instruments in other comprehensive income,
            with no impact on earnings;
          for fair
            value hedges of balance sheet items or firm commitments, hedge accounting
            consists of recording in earnings both the changes in the fair value
            of the derivative instruments and the inverse changes in the fair
            value of the hedged items;
          if hedge
            accounting is not applied, changes in the fair value of derivative
            instruments are recorded in earnings, with no recognition of the inverse
            effect of the changes in the fair value of the hedged items. b)
    Goodwill The changes
          introduced in US GAAP by SFAS 141 and SFAS 142 (Business Combinations
          and Goodwill and Other Intangible Assets) as of July 1, 2001 have not
          to be applied under French accounting principles. As a result, in the
          consolidated financial statements, all goodwill is amortized in accordance
          with accounting principles applied in prior periods.
      
      In the US
          GAAP financial statements:

          goodwill
            is no longer amortized (as of July 1, 2001 for goodwill relating to
            acquisitions in the second half of 2001, and as of January 1, 2002
            for all other goodwill);
          goodwill
            is tested for impairment at least annually, as described in paragraph
            c) of note 1; as a result of the non-amortization of goodwill in US
            GAAP financial statements, the impairment that may be required in
            US GAAP financial statements is higher than that required in the consolidated
            financial statements.


F48


»Consolidated
  Statements c) Additional
    minimum pension liability In the consolidated
          financial statements, the additional minimum pension liability required
          in certain cases by SFAS 87 is recorded with a counterpart in an asset
          account included in other long-term assets.
        In US GAAP
          financial statements, this additional liability (which is recorded
      
      when, as a
          result of unamortized actuarial losses and prior service costs, the
          accrued liability would be lower than the excess of the accumulated
          benefit obligation over the fair value of the plan assets) is recorded
          with a counterpart in other comprehensive income. d)
    Comprehensive income (loss) Comprehensive
          income includes all changes in equity during a period except those resulting
          from investments by owners and distributions to owners. In the consolidated
          financial statements, the concept of comprehensive income does not exist
          because French accounting principles do not allow any change in equity
          corresponding to this definition other than net income, changes in the
          cumulative translation adjustment related to consolidated foreign subsidiaries
          and changes in accounting principles.
      
      In US GAAP
          financial statements, comprehensive income and its components must be
          displayed in a statement of comprehensive income. For the Group, this
          statement includes, in addition to net income:


        changes
          in the cumulative translation adjustment related to consolidated foreign
          subsidiaries;

        changes
          in the fair value of derivative instruments designated as cash flow
          hedges meeting the criteria established by SFAS 133;
          changes
            in the amount of the additional minimum pension liability. e) Impairment
    of Property, Plant and Equipment Under French
          GAAP, write-downs of property, plant and equipment are recorded as an
          increase in accumulated depreciation.
      
      Under U.S.
          GAAP, write-downs for property, plant and equipment are recorded as
          a reduction to the cost basis.  Reconciliation
        of net income (loss) and shareholders equitya)
        Net income (loss)(in
        millions of euros)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)Net
        income (loss) as reported in the consolidated income statement
      (55)
      
      234
      
      318Derivative
        instruments and hedging activities
      25
      
      (31)
      
      -Goodwill
        amortization
      52
      
      3
      
      -Income
        under US GAAP, before cumulative effect of change
      22
      
      206
      
      318in
        accounting principleCumulative
        effect of change in accounting for derivatives
      
      
      
      
      -and
        hedging activities as of January 1, 2001
      -
      
      (11)
      
      -Cumulative
        effect of change in accounting for goodwill as of January 1, 2002
      (31)
      
      -
      
      -Net
        income (loss) under US GAAP
      (9)
      
      195
      
      318b)
        Shareholders equity(in
        millions of euros)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)Shareholders
        equity as reported in the consolidated balance sheet
      3,014
      
      3,400
      
      3,277Derivative
        instruments and hedging activities
      15
      
      (40)
      
      -Goodwill
        amortization
      21
      
      3
      
      -Additional
        minimum pension liability
      (141)
      
      (121)
      
      (98)Shareholders
        equity under US GAAP
      2,909
      
      3,242
      
      3,179


F49


»Consolidated
    Statements Condensed
        US GAAP statement of income and balance sheeta)
        Condensed US GAAP statement of income(in
        millions of euros)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)Net
        sales and other operating income
      12,062
      
      11,656
      
      11,027Costs
        of goods sold and operating expenses
      (11,639)
      
      (11,150)
      
      (10,368)Restructuring
        expense, long-lived asset write-downs and other income (expense)
      (248)
      
      (65)
      
      (37)Goodwill
        amortization
      -
      
      (26)
      
      (20)Goodwill
        impairment
      (77)
      
      (22)
      
      -Financial
        expense, net
      (50)
      
      (70)
      
      (68)Income
        tax (expense) benefit
      (44)
      
      (113)
      
      (172)Equity
        in net earnings of affiliates
      18
      
      24
      
      (13)Minority
        interest
      -
      
      (28)
      
      (31)Income
        before cumulative effect of change in accounting principle
      22
      
      206
      
      318Cumulative
        effect of change in accounting for goodwilland
        for derivatives and hedging activities
      (31)
      
      (11)
      
      -Net
        income (loss)
      (9)
      
      195
      
      318Net
        income per share "A" (in euros)-
        Before cumulative effect of change in accounting principle-
        Basic earnings per share
      0.26
      
      2.59
      
      3.94-
        Diluted earnings per share
      0.26
      
      2.57
      
      3.92-
        After cumulative effect of change in accounting principle-
        Basic earnings per share
      (0.13)
      
      2.45
      
      3.94-
        Diluted earnings per share
      (0.13)
      
      2.43
      
      3.92


F50


»Consolidated
  Statements b)
        Condensed US GAAP balance sheet(in
        millions of euros)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)ASSETSCash
      283
      
      332
      
      377Marketable
        securities
      153
      
      113
      
      86Accounts
        receivable  trade
      1,269
      
      1,448
      
      1,512Inventories,
        net
      1,524
      
      1,601
      
      1,448Other
        current assets
      367
      
      294
      
      406Property,
        plant and equipment, net
      2,832
      
      2,997
      
      2,476Goodwill,
        net
      659
      
      864
      
      642Other
        intangible assets, net
      163
      
      145
      
      166Investments
        in equity affiliates
      285
      
      280
      
      261Deferred
        income taxes, long-term
      499
      
      339
      
      331Long-term
        investments and other long-term assets
      340
      
      347
      
      284Total
        assets
      8,374
      
      8,761
      
      7,989LIABILITIES
        AND SHAREHOLDERS EQUITYShort-term
        bank loans
      392
      
      912
      
      594Accounts
        payable  trade
      1,451
      
      1,515
      
      1,511Other
        current liabilities
      626
      
      569
      
      630Long-term
        debt
      1,465
      
      971
      
      734Deferred
        income taxes, long-term
      195
      
      173
      
      93Other
        long-term liabilities
      1,187
      
      1,210
      
      1,079Minority
        interest
      149
      
      169
      
      169Shareholders
        equity
      2,909
      
      3,242
      
      3,179Total
        liabilities and shareholders equity
      8,374
      
      8,761
      
      7,989c)
        US GAAP statement of comprehensive income (loss)(in
        millions of euros)
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)Net
        income (loss) under US GAAP
      (9)
      
      195
      
      318Other
        comprehensive income (loss), net of tax:-
        Changes in cumulative translation adjustment
      (205)
      
      59
      
      79-
        Changes in additional pension liability
      (44)
      
      (23)
      
      (25)-
        Changes in fair value of derivative instruments designated as cash flow
        eges
      31
      
      2
      
      -Comprehensive
        income (loss) under US GAAP
      (227)
      
      233
      
      372


F51


»Consolidated
  Statements Supplementary
    information a) Effect
    of new US accounting standards Effective
          January 1, 2002, the Group adopted Statement of Financial Accounting
          Standards (SFAS) No. 144, "Accounting for the Impairment or Disposal
          of Long-Lived Assets", which provides more detailed rules to assess
          the impairment of long-lived assets and to account for the disposal
          of long-lived assets. The adoption of this statement had no impact on
          the Groups financial position at January 1, 2002. Long-lived assets
          impairment recorded in 2002 amounted to € 102 million.
        Effective
          July 1, 2001 for business combinations for which the acquisition date
          is after June 30, 2001 and effective January 1, 2002 for other goodwill
          and intangible assets, the Group adopted SFAS No. 141 "Business Combinations"
          and SFAS No 142 "Goodwill and Other Intangible Assets", for purposes
          of the US GAAP reconciliation. These statements require that all business
          combinations be accounted for using the purchase method and that goodwill
          and other intangible assets with indefinite lives not be amortized;
          instead, these assets are tested for impairment at least annually.
        The application
          of SFAS 141 and SFAS 142 to acquisitions of the second half of 2001
          had no significant impact on the Groups financial position or
          results of operations. The application of SFAS 141 and SFAS 142 to other
          goodwill and intangible assets resulted in a cumulative after-tax transition
          adjustment at January 1, 2002 amounting to € 31 million, charged
          to earnings. In 2002, no goodwill amortization was recorded but goodwill
          impairment amounting to € 77 million was recorded in the second
          half of the year. In 2001, goodwill amortization totaled € 26 million.
        Effective
          January 1, 2001, for purposes of US GAAP reconciliation, the Group adopted
          SFAS No. 133 "Accounting for Derivative instruments and Hedging Activities"
          and SFAS 138 which amended SFAS 133. These statements require that all
          derivative instruments (foreign exchange, interest rates, commodities)
          be recognized as assets or liabilities and measured at fair value. These
          statements also establish new criteria to define hedging transactions
          for which hedge accounting may be applied.
      
      As a result
          of these new requirements, changes in the fair value of certain derivative
          instruments are recorded in earnings instead of being deferred until
          the income or loss on the hedged transaction is recorded. The transition
          adjustment on January 1, 2001 resulted in a cumulative after-tax charge
          of € 11 million recorded in earnings and a cumulative after-tax
          increase of other comprehensive income of € 3 million.
        Effective
          January 1, 2001, the Group adopted SFAS No. 140 "Accounting for Transfers
          and Servicing of Financial Assets and Extinguishment of Liabilities".
          This statement provides revised standards for accounting for transfers
          of financial assets. The adoption of this statement had no impact on
          the Groups financial position or results of operations.
        In 2001,
          the Financial Accounting Standards Board issued SFAS No. 143 "Accounting
          for Asset Retirement Obligations". This statement provides new standards
          for accounting for tangible asset retirement obligations. For the Group,
          the effective date of this statement is January 1, 2003. The Group is
          currently evaluating the impact of adoption of this statement.
        In 2002,
          the Financial Accounting Standards Board issued SFAS No. 145 "Rescission
          of FASB Statements No 4, 44, and 64, Amendment of FASB Statement No
          13, and Technical Corrections". This statement rescinds or amends various
          items in accounting pronouncements, such as the accounting for certain
          lease modifications arising after May 15, 2002, which have no application
          in the Group.
        In 2002,
          the Financial Accounting Standards Board issued SFAS No. 146 "Accounting
          for Costs Associated with Exit or Disposal Activities". This statement
          establishes new accounting rules for costs associated with an exit or
          disposal activity initiated after December 31, 2002. For the Group,
          the effective date of this statement is January 1, 2003. The Group is
          currently evaluating the impact of adoption of this statement.Effects of adopting SFAS 142
        The effects of adopting SFAS 142 on U.S. GAAP net income and U.S. GAAP
          income before cumulative effect from accounting change and on diluted
          earnings per share are as follows: 2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)U.S. GAAP net income
      (9)
      
      195
      
      318Less: cumulative effect from changein accounting for goodwill
      31
      
      -
      
      -U.S. GAAP income before cumulative
        effect from accounting change for goodwill
      22
      
      195
      
      318Add: goodwill amortization
      -
      
      26
      
      20U.S. GAAP adjusted net income beforecumulative effect from accounting
        change for goodwill and goodwill amortization
      22
      
      221
      
      338Diluted earnings per share A
      2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)U.S. GAAP net income
      (0.13)
      
      2.45
      
      3.94Less: cumulative effect from change
        inaccounting change for goodwill
      0.39
      
      -
      
      -U.S. GAAP income before cumulative
        effectfrom accounting change for goodwill
      (0.26)
      
      2.45
      
      3.94Add: goodwill amortization
      -
      
      0.33
      
      0.25U.S. GAAP adjusted net income before
        cumulative effectfrom accounting change for goodwill
        and goodwill amortization
      (0.26)
      
      2.78
      
      4.19


F52


»Consolidated
  Statements b) Stock option plans and stock purchase plan Determined in accordance
    with the intrinsic value method, the compensation cost corresponding to options
    granted under the current stock option plans (note 12g) and to shares issued
    under the December 2001 share purchase plan (note 12a) is immaterial or nil.
    Had the compensation
    cost been determined based on the fair value of the options or shares at the
    grant dates, net loss and net loss per share would have increased (and net
    income and net income per share would have decreased) to the pro forma amounts
    indicated below:  2002
      
      2001
      
      2000As
          reported
      
      Pro-forma
      
      As
          reported
      
      Pro-forma
      
      As
          reported
      
      Pro-forma(Restated)
      
      (Restated)
      
      (Restated)
      
      (Restated)
      
      (Restated)
      
      (Restated)Net
        income (loss) (in millions of euros)
      (9)
      
      (18)
      
      195
      
      185
      
      318
      
      315Net
        income (loss) per share "A" (ineuros):-
        Basic
      (0.13)
      
      (0.25)
      
      2.45
      
      2.32
      
      3.94
      
      3.90-
        Diluted
      (0.13)
      
      (0.25)
      
      2.43
      
      2.30
      
      3.92
      
      3.88 The weighted-average fair value of the options at the date of grant and the assumptions used to estimate this fair value using the Black-Scholes option-pricing model were as follows: 2002 Plan
   
   2001 Plan
   
   2000 Plan
   
   1999 Plans
   
   1998 Plans
   
   1997 Plans
   
   1996 PlanFair value peroption
        (in euros)
   23.97
   
   14.75
   
   13.58
   
   12.60
   
   8.02
   
   17.44
   
   11.05Assumptions:Dividend yield
   2%
   
   2%
   
   2%
   
   2%
   
   1.88%
   
   2.5%
   
   2.5%Expected volatility
   40%
   
   25%
   
   25%
   
   25%
   
   25%
   
   25%
   
   22%Interest rates
   3.74%
   
   5.07%
   
   5.37%
   
      4.25%
          to
   
      3.48%
          to
   
      4.74%
          to
   
      3.90%
          to5.21%
   
   4.06%
   
   5.30%
   
   5.80%Expected life
   7 years
   
   7 years
   
   7 years
   
   7 years
   
   7 years
   
   7 years
   
   7 years The fair value of the shares issued at a discount under the 2001 share purchase plan was € 51.91 for each of the 855,277 shares issued.


F53


» Consolidated
  Statements c)
    Effective Tax Rate The
    reconciliation of the effective and enacted tax rates in Note 18 is based
    on pre-tax income before amortization and writedowns of goodwill because these
    items represent permanent book/tax differences and, accordingly, have no impact
    on income tax expense. The reconciliation with the effective tax rate based
    on pre-tax income is as follows: 2002
      
      2001
      
      2000(Restated)
      
      (Restated)
      
      (Restated)Enacted tax rate
      35.43%
      
      36.43%
      
      37.76%Effect of foreign tax rates differential
      (21.00)%
      
      (5.10)%
      
      (3.70)%Goodwill amortization and
      56.80%
      
      5.40%
      
      1.40%write-downsOther permanent differences
      (29.50)%
      
      (3.80)%
      
      (7.10)%Taxes at lower rates
      32.70%
      
      1.30%
      
      (0.50)%Change in valuation allowance
      32.50%
      
      2.20%
      
      2.50%Other
      (17.90)%
      
      (3.70)%
      
      0.70%Withholding taxes
      5.20%
      
      1.90%
      
      0.90%Effective tax rate
      94.23%
      
      34.63%
      
      32.06% d) Derivative
    instruments and hedging activities At December
          31, 2002, all derivative instruments held by the Group are recognized
          in the US GAAP balance sheet at fair value. These derivative instruments
          are used to hedge foreign exchange, commodity and interest rate risks,
          as explained in note 19. Among these hedges, the following ones have
          been accounted for as hedges in the US GAAP accounts.
        Cash flows
          hedges
        Foreign
          exchange:the effects of fluctuations in exchange rates on forecasted payments
          and receipts of foreign currencies related to the main (i) long-term
          contracts for the sale of fabricated aluminum products, (ii) sale and
          purchase contracts of aluminum and alumina and (iii) operating expenses
          incurred by certain subsidiaries in currencies other than their functional
          currency are hedged using forward and option contracts. These hedges
          are accounted for as cash flow hedges.
        Metal:the effects of fluctuations in aluminum prices on forecasted purchases
          related to long-term sales contracts are hedged using forward instruments.
          These hedges are accounted for as cash flow hedges.
        For these
          transactions, which are designated and qualify as cash flow hedges,
          changes in the fair value of hedging instruments are recorded in other
          comprehensive income, except for the ineffective portion of the change
          in fair value, which is immediately recorded in earnings. Amounts recorded
          in other comprehensive income during the hedging period are reclassified
          to earnings in the period in which earnings are impacted by the
      
      hedged transaction,
          or when the hedge no longer qualifies as a cash flow hedge. Hedging
          gains and losses are recorded in net sales, cost of goods sold or other
          operating cost depending on the nature of the hedged transaction. These
          hedges cover periods not exceeding 5 years.
        Fair value
          hedges
        Metal:the
          effects of fluctuations in prices of aluminum and other metals in the
          period when the metal is held in the inventory of certain trading companies
          in the International Trade division are hedged using forward instruments.
          These hedges are accounted for as fair value hedges.
        Interest
          rates:certain fixed rate borrowings have been transformed into variable rate
          borrowings, using interest swaps; these hedges are accounted for as
          fair value hedges.
        For these
          transactions, which are designated and qualify as fair value hedges,
          changes in the fair value of hedging instruments are recorded in earnings,
          in the caption corresponding to the nature of the hedged item. They
          offset most of the changes in the fair value of hedged items, which
          are also recorded in earnings, in the same caption.
        Hedges other
          than those described above are not accounted for as hedges. Accordingly,
          changes in the fair value of derivative instruments used for these hedges
          are recorded in earnings, with no recognition of the inverse effect
          of the changes in the fair value of the hedged items.


F54


Shareholder
    Communications In order to improve Shareholder communications and transparency, Pechiney has created various documents to inform Shareholders of the Groups activities, strategy, financial results and future prospects: a summary brochure of information about the Company which sets forth the key points of the Groups activities, its development over the course of the fiscal year and its financial results is published at the same time as the Groups Document de Référence; following publication of its annual financial results, the Group sends Shareholders a newsletter that provides an update on the Groups business and financial results. These documents are prepared in French and English and are sent to all registered Shareholders and other Shareholders who have requested to be on the Groups mailing list, both in France and other countries. The documents are also available upon request. In addition to the legally required notification, Shareholders are informed of Shareholders Meetings by the publication of a notice in the financial press. Financial information, including the Companys Annual Report on Form 20-F, is also available on the Pechiney Internet site at http://www.pechiney.com. The French Document de Référence is also available on the Pechiney internet site in both French and English. A Shareholder relations office (tel: (33) 1 56 28 25 77; fax: (33) 1 56 28 33 38) can answer Shareholders questions and help them with formalities. In addition, Pechiney has an agreement with BNP Paribas, the financial intermediary that manages the Groups Shares account, in order to expand the services available to Shareholders: Shareholders
    may call or fax BNP Paribas to get answers to technical, administrative and
    tax questions; Registered Shareholders may buy and sell Shares directly through BNP Paribas without, as in the past, having to use the services of another financial intermediary. For 2003, financial
    information is expected to be released as follows*: First quarter
        results - April 29, 2003Semi-annual
        results - July 30, 2003Third quarter
        results - November 4, 2003 (*) These dates
    are subject to change





Signature The registrant
          hereby certifies that it meets all the requirements for filing on Form
          20-F/A and that it has duly caused and authorized the undersigned to
          sign this annual report on its behalf.Date
        : October 24, 2003
      PECHINEYBy:/s/ Olivier
          Mallet 
          Name : Olivier Mallet
          Title : Senior Executive Vice PresidentChief
          Financial Officer