Financial Overview

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	Rate of change (%)	Factors
Overall
Sales	552,223	577,069	(4.3)	-The outlook was bearish because consumers were curtailing their purchases of new items based on the negative economic forecast.
Operating income	4,386	22,867	(80.8)
Net income	(1,749)	15,815	-
Automotive Glass Business
Sales	251,229	264,031	(4.8)	-
Operating income	5,123	11,937	(57.1)	-

Business Overview

Automotive Glass Division
-The Company, in seeing continued growth in emerging markets such as South America and other regions, enhanced its production capacities in Brazil, Mexico, Poland and other developing countries during 2012 fiscal year.

-The Company faced extraordinary high spending costs during fiscal year 2012 for energy and raw materials. In responding to this situation, the Company found it was difficult over the short term to pass most of the cost increases onto its customers with whom it has already concluded supply agreements for automotive glass. However, over the longer term, the Company will seek to revise on-going supply agreements by raising product costs, and thus reduce the impact that these higher costs have on performance.

<Europe>
-Sales in Europe account for 47% of the Automotive Glass Division's sales.

-In the Automotive Glass Division, operating revenue slightly fell year-on-year, with improved demand for automotive glass for vehicles destined for export being offset by lower unit sales of vehicles sold in the region

-Operating profit decreased year-on-year due to various factors, which included increased spending, initial start-up costs for new facilities and equipment, and lower demand for automotive glass among European OEMs parts procurement activities, as a result of the Great East Japan Earthquake.

<Japan>
-Sales in Japan account for 18% of the Automotive Glass Division's sales.

-Operating revenue for the year was about the same level as it was during the previous fiscal year, while operating profit actually rose year-on-year.

-Demand, which was impacted by the March 2011 earthquake in Japan, had recovered due to OEMs' production levels reaching their pre-earthquake levels by the end of the second quarter. This favorable trend continued during the fourth quarter because of favorable market conditions.

<North America>
-Sales in North America account for 20% of the Automotive Glass Division's sales.

-Operating revenue on a local-currency basis actually increased year-on-year, but operating profit was lower for the year.

-The Company's revenue base in North America is heavily dependent upon Japan-based OEMs. As a result of largely depending on Japanese OEMs, which were affected by the Great East Japan Earthquake and the flooding in Thailand, the Company suffered from shortages in parts supplies and was faced with severe constraints on production levels

<Other regions>
-Volume increased year-on-year in South America, with operating revenue posting an increase on a US-dollar basis. Profits, however, were lower due to large fluctuations in demand, increased spending for the costs of goods, and initial expenses incurred with the launch of new facilities and equipment in Brazil.

Program Business

-The world's first switchable light-controlled (light sensitive) automotive glass, Sundym Select, is being mounted on the Mercedes-Benz "SLK Class" and "SL Coupe".

New Company

-The Company announced the merger of Pilkington Glass LLC, the Group's equity-method affiliate, and the STiS Group of Companies to expand its float glass business in Russia. Pilkington Glass LLC currently operates a float glass production line in Ramenskoye, near Moscow. STiS is a manufacturer of insulated glass units in Russia. The merged business will be an integrated flat glass business combining float glass manufacturing facilities with downstream processing activities. Concurrently, the Russian Corporation of Nanotechnologies (RUSNANO) and the European Bank for Reconstruction and Development (EBRD) will also invest in the merged business. These funds will finance the construction of a new float line at the site of the NSG Group's current float line in Ramenskoye. The new investment from EBRD and RUSNANO will also enable the installation of new coating facilities in Ramenskoye, capable of manufacturing low-emissivity energy-saving products. (From a press release on December 6, 2011)

Restructuring

-The following cost-cutting measures in terms of production capacity and production volume were initiated in response to customer demand.　

• The Company announced its intention to mothball one of its three float lines in the UK. Manufacturing will cease on the UK6 Float line and the solar cutting operation, both based in St Helens, by the end of April 2012. This will result in a reduction of 150 roles across the two sites.
• Some automotive-glass production lines were closed in Finland, Germany, and Italy.

-Worldwide headcount will be reduced by 10%.

Outlook for FY ending Mar. 31, 2013

(in billions of YEN)

	FY ending Mar. 31, 2013 (Outlook)	FY ended Mar. 31, 2012 (Result)	Change
Sales	560	552.2	7.8
Operating income	(4)	4.4	(8.4)
Net income	(10)	(1.7)	(8.3)

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

R&D Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	8,000	10,700	12,100
Automotive Glass Division	3,300	4,000	4,300

R&D Structure

-The Company conducts research on automotive glass at its technology research center in Itami, Hyogo Prefecture, Japan.

-The Group's R&D structure was reorganized and centralized into one unit in January 2012 in order to ensure that all R&D activities are given better support. As a result, all the R&D functions are able to gain access to the technology owned by the Group, and thus eliminate any duplicate/redundant work activities while improving R&D efficiencies and effectiveness in ensuring that developments are established under one, single R&D unit.

R&D Activities

Automotive Glass Division
-The Company developed UV glass that is designed as side glass in vehicles. This glass, which is capable of eliminating 99% of the sun's ultraviolet rays, is being equipped on Toyota vehicles.

-The Company worked to develop a new type of press-bending furnace for producing windshield glass. The furnace is planned to be first installed within 2012.

-Development and introduction of automatic testers for inspecting all products produced on the Company's mass-production lines.

Capital Expenditure

(in millions of JPY)

	FY ended Mar. 31, 2012	FY ended Mar. 31, 2011	FY ended Mar. 31, 2010
Overall	34,700	31,900	15,700
Automotive Glass Division	18,800	16,100	12,700

Automotive Glass Division
-The Company made capital investments to increase its production operations and capacities mainly in Brazil and Poland, but also invested to conduct regular maintenance and repair on its float-glass kilns in Japan.

Investment Outside Japan

<Argentina>
-The Company and Saint Gobain Sekurit France S.A.S. have announced plans to build a new float glass line in Argentina. The plant, to be constructed at Exaltacion de la Cruz in the state of Buenos Aires, will be the second float line operated by Vidrieria Argentina S.A (VASA), the NSG Group/Saint Gobain Glass joint venture in Argentina. With a planned daily output of 800 tonnes, the plant will allow VASA to enhance its service in Uruguay, Paraguay and Bolivia. The new line is due to come on stream in the first quarter of 2014. (From a press release on October 28, 2011)

<Vietnam>
-The Company has announced plans to build two new float lines in Vietnam. The first of the two new float lines will be fitted with online coating equipment for the production of coated glass for use in thin-film type photovoltaic applications. The second is designed to help to meet the growing demand for very thin high tech float glass products. NSG Ultra Fine Flat glass (UFF) products are increasingly being used in the growing touch panel market. The total investment will be in the order of 320 million USD (26 billion yen), with both lines due to start production in calendar year 2013. It is estimated that approximately 400 jobs will be created locally as a result of the investment. The new float lines will be constructed in Vietnam Glass Industries Ltd., which is NSG's wholly-owned subsidiary. The new investment will bring the NSG Group's online coating float lines producing solar energy products to seven (one in Japan, two in North America, two in Europe and two in Vietnam) and those dedicated to UFF production to two (one in Japan and one in Vietnam). (From a press release on May 23, 2011)

<Peru>
-The Company announced on May 17 that it will establish a new plant in Lima, Peru to produce automotive glass. Investment in the project is expected to reach about 200 million dollars, and production is scheduled to begin by the end of 2014. The new facility will be formed by Vidrios Lirquen, which is a joint venture by the NSG Group, Saint-Gobain Glass, and a local partner. Vidrios Lirquen is included in NSG's consolidated statements. The plant will be equipped with a kiln that has a daily production capacity of 800 tons. It will also manufacture building glass. (From an article in the Nikkan Jidosha Shimbun on May 18, 2011)

Major New Facilities

(As of Mar. 31, 2012)

Company/Office	Location	Overview	Planned amount of investment (in million JPY)	Start	Complete
Pilkington Brazil Ltda	Brazil	Manufacture of glass	2,500	Jan. 2011	1Q in FY ending Mar. 2013
Pilkington Automotive Poland SP. Zo. o.	Poland	Manufacture of glass	5,900	Sep. 2011	4Q in FY ending Mar. 2013
Pilkington North America, Inc.	USA	Manufacture of glass	2,383	Aug. 2011	Jan. 2013