Financial Overview

(in millions of JPY)

	FY2009	FY2008	Rate of change (%)	Factors
Overall
Sales	588,394	739,365	(20.4)	-In the first half of the year, the Company clearly suffered the impact of the economic slowdown occurring in most countries and regions where the Company is operating. -During the third quarter, the markets gradually stabilized. -In the fourth quarter, the Company sold greater volume than it did in the first and second quarters in most of its major markets. -On the whole, however, yearly sales declined.
Operating income	(17,183)	1,908	-
Ordinary income	(28,552)	(12,259)	-
Current net income	(41,313)	(28,392)	-
Automotive Glass Business
Sales	265,017	299,096	(11.4)	-
Operating income	221	1,292	(82.9)	-Part of the loss from a decline in sales volume was recovered by the Company's successful cost-reduction initiatives.

Automotive Glass Division
<Europe>
-Sales in Europe account for 50% of the Automotive Glass Division's sales.
-Sales incentive programs by governments to encourage new car purchases had a temporal but positive impact on sales of new car components. On the whole, however, sales declined due to sluggish demand. Sales of repair parts remained strong, as the Company's financial results remained relatively good.

-Pilkington established a plant in Senec, Slovakia, and has started production of automotive glazing. The facility has a total of seven assembly lines and employs 46 people. (From a press release on May 11, 2009)

<North America>
-Sales in North America account for 21% of the Automotive Glass Division's sales.
-Sales drastically decreased all at once in the earlier half of the year, due to a decline in sales volume. But sales volume improved in the fourth quarter, as automotive sales improved. The profit margin of the Company's repair parts segment dropped, because of sluggish demand and lower selling prices.

<Japan>
-Sales in Japan account for 17% of the Automotive Glass Division's sales.
-Sales declined, despite the market recovery encouraged by governmental sponsored sales incentives, because demand still remained at low levels.
-The profit margin improved, thanks to an improved market environment and successful cost reductions.

<Other regions>
- Markets in emerging countries and regions remained comparatively strong and sales this year were at the same level as those of last year. Operating income increased.

Business Restructuring

-The Company, a major glass manufacturing company in Japan, announced additional restructuring measures in order to deal with the declining demand in the global market. The Company, which said on January 29 that it would invest 22 billion yen in its restructuring program centered on its operations in US and Europe, has decided to spend additional 3 billion yen. The Company is now discussing plans to reduce its production capacity in Asia including Japan, and South America. The Company has adjusted production of automotive and construction glass by temporary suspending operations. The measures will be also implemented in the functional glass materials division, which is making products such as rubber cords for timing belts. Further, following last fiscal year's personnel downsizing program, which resulted in a 3,000 reduction in headcount, a further cutback of 2,800 employees is scheduled for this fiscal year ending in March 2010. In the current fiscal term, the Company is likely to generate a loss of approximately 22 billion yen, which will be the first deficit in six years, due to falling vehicle production. The Company will step up its restructuring efforts, because the already announced program including a 15 percent reduction in glass production capacity is no longer enough to cope with the prolonged downturn in the global market, which is affecting its various divisions. (From an article in the Nikkan Jidosha Shimbun on April 9, 2009)

Awards

-Pilkington Automotive has received a Quality Achievement Award from truck manufacturer DAF for its backlights. The award recognized Pilkington's three plants - Ylojarvi and Tampere in Finland, and Sao Paulo in Brazil. (From a press release on February 3, 2010)

>>>Financial Forecast for the Next Fiscal Year (Sales, Operating Income etc.)

R&D Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	12,100	10,500	15,500
Automotive Glass Division	4,300	3,200	5,200

R&D Structure

-The Company conducts research of automotive glass at its technology research center in Itami city, Hyogo prefecture.
-In the automotive glass business, the Company aims to manage the business more efficiently by integrating the R&D organization of Pilkington with its own. The Company's engineering division has departments engaged in R&D activities and developing grazing systems and global tooling.

R&D Activities

Automotive Glass Division
-Development of anti-fogging and lightweight glass which supports initiatives to reduce emissions of greenhouse gas.
-Development and introduction of automatic testers for inspecting all products produced on the Company's mass-production lines.
-The Company completed projects for improving processes aimed at cutting costs and improving quality of glass for side windows.

-Pilkington has been licensed by US-based Research Frontiers Inc. to manufacture and sell SPD-Smart light-control automotive products. The SPD-SmartGlass technology allows motorists to control light levels within the vehicle at the touch of a button. Since it blocks heat as well as light, SPD-SmartGlass can reduce the need for air-conditioning systems and thus save weight, fuel and CO2 emissions. With this new license, the Group can now offer SPD-Smart end-products including sunroofs, roof panels, side and rear windows, and adaptive sunvisors. (From a press release on October 12, 2009)

Capital Expenditure

(in millions of JPY)

	FY2009	FY2008	FY2007
Overall	15,700	42,100	47,700
Automotive Glass Division	12,700	15,600	21,200

Automotive Glass Division
-Mainly in initiatives to improve technological capabilities in Italy.