Introductory Note and Definitions

The objective of the Pilkington Company Briefing and Flat Glass Industry sections is to provide background information on the world’s flat glass industry and, as an industry leader, the position within it of the NSG Group’s Flat Glass business, which trades under the ‘Pilkington’ brand.

In June 2006, Pilkington plc was acquired by NSG UK Enterprises Limited. This company is a wholly-owned subsidiary of Nippon Sheet Glass Co., Limited (referred to in this publication as ‘the NSG Group’). On 1 April 2007, all of the Building Products and Automotive businesses of the NSG Group and Pilkington were combined into an integrated ‘Flat Glass’ business. The Flat Glass business includes both the Pilkington Group Ltd businesses (i.e. formerly Pilkington plc) and also NSG’s existing Flat Glass businesses in the USA, Japan, Vietnam and Malaysia.

The Flat Glass business of NSG Group now trades under the ‘Pilkington’ brand. Consequently, all references to ‘Pilkington’, with the exception of a few historical allusions, relate to the Flat Glass business of NSG Group. Where the operations of the whole Group are referenced, the terms ‘NSG Group’ or ‘the Group’ are used.

The other major structural difference is that in June 2007, the NSG Group sold the Pilkington Australasia Flat Glass business to CSR of Australia. Consequently, the NSG Group’s Flat Glass business, trading under the ‘Pilkington’ name now comprises the Building Products businesses in Europe, Japan, North America, South America and South East Asia, which are managed on a regional basis, and the Pilkington Automotive business, which is managed on a global basis.

It should be borne in mind that the Flat Glass business of the NSG Group accounts for just under 90 per cent of NSG’s business by sales and that the NSG Group also has two other businesses, in Information Technology and Glass Fiber, which are not covered in this section. As a result, any figures referring to ‘Pilkington’ or ‘NSG Group Flat Glass’ sales and operating income are lower than those for the NSG Group as a whole. The strategic direction of NSG Group itself is covered in this section.

The operating currency for the NSG Group is the Japanese Yen. However, for ease of reference the currency used throughout this section is the US Dollar and any figures relating to financial performance are therefore approximate.

This information should be read in conjunction with the NSG Group Annual Report 2007, for the fiscal year ended 31st March 2007, which is available from the NSG Group website at www.nsg.com.