Asahi Glass Co. Ltd.
Annual Report 2014

Plain-text annual report

Reporting and Editing Policy AGC Group Vision Based on its mission to “‘Look Beyond’ to make the world a brighter place,” we, the AGC Group communicates our corporate attitude and business initiatives to our stakeholders in ways that are easy to understand. The AGC Group publishes its corporate attitude and business initiatives in its annual AGC Report. In addition to relating this report presents the Group’s progress made on the Group’s mid-term management plan unique initiatives from the perspectives of Markets, the Earth and People. Detailed financial and non-financial data can be found on our website. “ -2015 ”, Resources that Deepen Communication with Stakeholders Financial Information Non-Financial Information (Sustainability Reporting) The AGC Group’s Corporate Vision and Business Activities Financial Review (PDF file only) Reports the AGC Group’s business outline and financial information including consolidated financial statements AGC Report 2014 (This report) CSR Website www.agc.com/english/csr/ Provides a comprehensive report on the AGC Group’s efforts to fulfill its social responsibilities. Based on the “core” of G41 1 The 4th edition of the GRI Sustainability Reporting Guidelines CSR Information Supplement (PDF file only) Reports on the AGC Group’s non-financial data and its various CSR policies and organizations for promoting CSR-related activities For Comprehensive Information AGC Website www.agc-group.com/ Provides information about the AGC Group more widely, timely and in more detail Scope •Reporting Period •Primary Notation and Report Targets Used in the Report Fiscal 2013 (Jan.–Dec. 2013) Some information includes content from both fiscal 2012 and 2014 -The AGC Group Same as “Organizations Covered in the Report” mentioned above. •Organizations Covered in the Report Asahi Glass and its 200 consolidated subsidiaries (Group companies in and outside Japan) -The AGC Group (Japan) Group companies in Japan including Asahi Glass Co., Ltd. -Asahi Glass/the Company Asahi Glass Co. Ltd. (on an unconsolidated basis) Related Information WEB Articles with this mark have related information on the AGC website. 1 AGC Report 2014 Our Mission—We, the AGC Group, “Look Beyond” to make the world a brighter place. We will continuously: Anticipate and envision the future, Have perspectives beyond our own fields of expertise, Pursue innovations, not becoming complacent with the status quo. We will continue to create value worldwide, demonstrating the vast potential of the Group’s entire organization. Our Mission Our Shared Values Our Spirit Our Shared Values Innovation & Operational Excellence (cid:127)We will seek innovations in technology, product and services beyond conventional concepts Related information p. 15 (cid:127)We will create value directed at our current and potential customer needs, accounting for changes in the business environment and, social and market evolution. (cid:127)We will continuously improve all aspects of our operations striving to achieve benchmark and frameworks. performance. Diversity Environment Integrity (cid:127)We will respect individual diversity of varied capabilities and personalities. (cid:127) We will respect cultural diversity of race, ethnicity, religion, language and nationality. (cid:127)We will respect different perspectives and opinions at all times. (cid:127)We will contribute to creation of a sustain- able society in harmony with nature as a successful and responsible global citizen. (cid:127)We will strive to ensure and further improve occupational health and safety in our working environment. (cid:127)We will build open and fair relationships with all of our stakeholders based on the highest ethical standards. (cid:127)We will comply with all applicable laws and regulations. (cid:127)We will fulfill our contractual and legal responsibilities to achieve customer satisfaction and trust. Related information p. 29 Related information p. 23 Related information p. 37 AGC Group Vision and Policies Group Vision The Group Vision operations and social activities of the AGC Group. This corporate philosophy will be carried on into the future. is at the root of all business Management Policy The Management Policy sets the course of action for all of the Group’s business activities providing social and business aspirations, guidelines and directives. It is revised as necessary to reflect changes in the business environment and circumstances of the Group. WEB www.agc.com/english/ir/pdf/c_overview.pdf AGC Group Charter of Corporate Behavior The Group Charter sets forth and declares the perspectives that form the basis of our behavior to ensure that the AGC Group will remain a good corporate citizen. WEB www.agc.com/english/csr/agcgroupcsr/ AGC Group Code of Conduct The Code of Conduct sets forth standards to be observed by all Group members from the perspective of “Integrity” in Our Shared Values under the AGC Group Vision . WEB www.agc.com/english/csr/integrity/coc.html Social Responsibility AGC Group Business Environment Charter of Corporate Behavior Group Vision Management Policy Code of Conduct AGC Report 2014 2 AGC Group Vision and PoliciesOur SpiritOur Shared ValuesOur Shared ValuesOur MissionInnovation & Operational Excellence(cid:127)We will seek innovations in technology, product and services beyond conventional concepts and frameworks.(cid:127)We will create value directed at our current and potential customer needs, accounting for changes in the business environment and, social and market evolution.(cid:127)We will continuously improve all aspects of our operations striving to achieve benchmark performance.Diversity(cid:127)We will respect individual diversity of varied capabilities and personalities.(cid:127)We will respect cultural diversity of race, ethnicity, religion, language and nationality.(cid:127)We will respect different perspectives and opinions at all times.Environment(cid:127)We will contribute to creation of a sustain-able society in harmony with nature as a successful and responsible global citizen.(cid:127)We will strive to ensure and further improve occupational health and safety in our working environment.Integrity(cid:127)We will build open and fair relationships with all of our stakeholders based on the highest ethical standards.(cid:127)We will comply with all applicable laws and regulations.(cid:127)We will fulfill our contractual and legal responsibilities to achieve customer satisfaction and trust.The Group Vision is at the root of all business operations and social activities of the AGC Group. This corporate philosophy will be carried on into the future.Group VisionBusinessEnvironmentSocialResponsibilityAGC GroupCharter ofCorporateBehaviorCode ofConductManagementPolicyGroup VisionThe Management Policy sets the course of action for all of the Group’s business activities providing social and business aspirations, guidelines and directives. It is revised as necessary to reflect changes in the business environment and circumstances of the Group.Management PolicyThe Group Charter sets forth and declares the perspectives that form the basis of our behavior to ensure that the AGC Group will remain a good corporate citizen.AGC Group Charter of Corporate BehaviorThe Code of Conduct sets forth standards to be observed by all Group members from the perspective of “Integrity” in Our Shared Values under the AGC Group VisionAGC Group Code of ConductOur Mission—We, the AGC Group, “Look Beyond” to make the world a brighter place.Anticipate and envision the future,Have perspectives beyond our own fields of expertise,Pursue innovations, not becoming complacent with the status quo.We will continue to create value worldwide, demonstrating the vast potential of the Group’s entire organization.We will continuously:Resources that Deepen Communication with Stakeholders•Reporting PeriodFiscal 2013 (Jan.–Dec. 2013)Some information includes content from both fiscal 2012 and 2014•Organizations Covered in the ReportAsahi Glass and its 200 consolidated subsidiaries(Group companies in and outside Japan)•Primary Notation and Report Targets Used in the Report-The AGC GroupSame as “Organizations Covered in the Report” mentioned above.-The AGC Group (Japan)Group companies in Japan including Asahi Glass Co., Ltd.-Asahi Glass/the CompanyAsahi Glass Co. Ltd. (on an unconsolidated basis)ScopeRelated InformationArticles with this mark have related information on the AGC website.WEBNon-Financial Information(Sustainability Reporting)Financial InformationThe AGC Group’s CorporateVision and Business ActivitiesAGC Report 2014(This report)Financial Review(PDF file only)Reports the AGC Group’s business outline and financial informationincluding consolidated financial statementsCSR InformationSupplement (PDF file only)Reports on the AGC Group’s non-financial data and its various CSR policies and organizations for promoting CSR-related activitiesCSR Websitewww.agc.com/english/csr/Provides a comprehensive report on the AGC Group’s efforts to fulfill its social responsibilities. Based on the “core” of G411 The 4th edition of the GRI Sustainability Reporting GuidelinesAGC Websitewww.agc-group.com/Provides information about the AGC Group more widely, timely and in more detailFor Comprehensive InformationAGC Group VisionReporting and Editing PolicyBased on its mission to “‘Look Beyond’ to make the world a brighter place,” we, the AGC Group communicates our corporate attitude and business initiatives to our stakeholders in ways that are easy to understand.Related information p. 15Related information p. 37Related information p. 23Related information p. 29WEBwww.agc.com/english/ir/pdf/c_overview.pdfWEBwww.agc.com/english/csr/agcgroupcsr/WEBwww.agc.com/english/csr/integrity/coc.html.The AGC Group publishes its corporate attitude and business initiatives in its annual AGC Report. In addition to relating progress made on the Group’s mid-term management plan this report presents the Group’s unique initiatives from the perspectives of Markets, the Earth and People. Detailed financial and non-financial data can be found on our website.“ -2015 ”,AGC Report 20142AGC Report 20141Contents 5 7 9 11 13Social Activities Risk Management/Compliance/Intellectual Property Corporate GovernanceBoard of Directors, Corporate Auditorsand Executive Officers152329CEO MessageMid-Term Management Plan ReviewFinancial and Non-Financial HighlightsOverview of the AGC GroupGlobal Network3537394217Business Domain 1Safe, Sound and ComfortableLiving Spaces & Materials19Business Domain 2Higher Quality Display Devices &Communication21Business Domain 3Clean & Green Energy25Activity Highlight 1– Reducing Energy Consumption in Production ActivitiesIngenuity in Energy ConservationGoes Global27Activity Highlight 2– Energy Reduction through Environment-Related ProductsAGC Group to Enhance its Low-Energyand Energy Creating Products31Activity Highlight 1 – Human Resource DevelopmentRealizations Generatedby Cross-Organizational Interaction33Activity Highlight 2 – Occupational Health and SafetyCreating Safe WorkplacesToward a Truly Strong AGC GroupWe communicate its corporate attitude and business initiativesfrom the perspectives of Markets, the Earth and People.For the EarthChapter IIFor MarketsChapter IFor PeopleChapter IIIThe AGC Group outlines its unique value, generated in three business domains:Safe, Sound and Comfortable Living Spaces & MaterialsHigher Quality Display Devices & CommunicationClean & Green EnergyWe present measures with regard to initiatives regarding energy issues—an important theme in environmental management. Specifically, it introduces various measures to reduce energy use through production activities and environment-related products.We discuss initiatives related to “Our People are Our Strength” and “No Production Without Safety,” statements given as the backbones of its business activities in the management policy .AGC Report 20144AGC Report 20143Toward a Truly Strong AGC Group We communicate its corporate attitude and business initiatives from the perspectives of Markets, the Earth and People. 3 AGC Report 2014 Chapter I For Markets 15 The AGC Group outlines its unique value, generated in three business domains: Safe, Sound and Comfortable Living Spaces & Materials Higher Quality Display Devices & Communication Clean & Green Energy Chapter II For the Earth 23 We present measures with regard to initiatives regarding energy issues—an important theme in environmental management. Specifically, it introduces various measures to reduce energy use through production activities and environment-related products. Chapter III For People We discuss initiatives related to “Our People are Our Strength” and “No Production Without Safety,” statements given as the backbones of its business activities in the management policy . 29 Contents CEO Message Mid-Term Management Plan Review Financial and Non-Financial Highlights Overview of the AGC Group Global Network Business Domain 1 Safe, Sound and Comfortable Living Spaces & Materials Business Domain 2 Higher Quality Display Devices & Communication Business Domain 3 Clean & Green Energy 5 7 9 11 13 17 19 21 Activity Highlight 1 – Reducing Energy Consumption in Production Activities Ingenuity in Energy Conservation Goes Global 25 Activity Highlight 2 – Energy Reduction through Environment-Related Products AGC Group to Enhance Its Energy-Saving and Energy-Creating Products 27 Activity Highlight 1 – Human Resource Development Learnings Generated by Cross-Organizational Interaction Activity Highlight 2 – Occupational Health and Safety Creating Safe Workplaces Social Contribution Activities Risk Management/Compliance/ Intellectual Property Corporate Governance Board of Directors, Corporate Auditors and Executive Officers 31 33 35 37 39 42 AGC Report 2014 4 Comprehensive strength of the AGC GroupBusinessGrowthCustomerTechnology (Glass/Chemicals/Ceramics)Safe, Sound,ComfortableLivingSpaces &MaterialsHigherQualityDisplay &Communi-cationClean &GreenEnergyBusiness domainsUnder the AGC Group’s Aspirations for 2020, we are aiming to become a highly profitable and fast-grow-ing leading global enterprise—achieving net sales of at least 2 trillion yen—that also contributes to the realization of a sustainable society.With an eye toward becoming a truly strong AGC Group, we began carrying out measures designed for growth under our mid-term management plan in fiscal 2013. As two action items, we have been working to strengthen and generate substantial results from the Group’s growth foundations, and to put our business back on an upward trend.In fiscal 2013, the first year of the plan, sales increased year on year on the back of the positive impact of the yen’s depreciation. Profits, however, decreased as a result of declining prices of architectural glass in Europe and electronic-related products, among other factors. Considering these results, and for the purpose of realizing our Aspirations for 2020, we will continue to push forward with initiatives in our three business domains in fiscal 2014, pursuing three strategies orga-nized under the concepts of becoming a Glass-tech-nology-driven Company, providing Technology Solutions for Environment and Energy, and promoting a Second Round of Globalization. To this end, we have been accelerating our efforts in modifying and evolv-ing our tactics for achieving these strategies. At the same time, the AGC Group will boost its competitive-ness by transforming its range of diversity in materials, technologies, markets and business regions respec-tively into a comprehensive strength. I invite you to read about some of these specific initiatives in the pages that follow. In the AGC Group, we regard the Group’s vision—to to make the world a brighter place—as our mission. Our purpose as a corporate enterprise is to bring more comfort, convenience, and abundance to people’s lives and society, while also considering the environment, through superior prod-ucts and services. By fulfilling this mission, we will evolve the AGC Group while gaining the trust of customers and meeting their expectations.CEO MessageBy fulfilling our mission to bring more comfort, convenience,and abundance to people’s lives and society,we will evolve the AGC Group into a truly strong organizationwhile gaining the trust of customers and meeting their expectations.AGC’s Aspirations for 2020The AGC Group aspires to excel as a highly profit-able and fast-growing global enterprise making contributions to a sustainable society by:(cid:127)Having strong and differentiated technologies(cid:127)Incorporating environmental friendliness not only in our products but also in our production processes and business activities(cid:127)Contributing to the development of fast-growing regionsThree strategiesBuild Foundationsfor GrowthSecond RoundofGlobalizationTechnologySolutions forEnvironmentand EnergyGlass-technology-drivenCompanyStrengthen and Generate Substantial Resultsfrom the Group’s Growth FoundationsNo Change in the Group’s Three Strategies and Business DomainsBusiness domainsPresident & CEOAGC Report 20146AGC Report 20145Comprehensive strength of the AGC GroupBusinessGrowthCustomerTechnology (Glass/Chemicals/Ceramics)Safe, Sound,ComfortableLivingSpaces &MaterialsHigherQualityDisplay &Communi-cationClean &GreenEnergyBusiness domainsUnder the AGC Group’s Aspirations for 2020, we are aiming to become a highly profitable and fast-grow-ing leading global enterprise—achieving net sales of at least 2 trillion yen—that also contributes to the realization of a sustainable society.With an eye toward becoming a truly strong AGC Group, we began carrying out measures designed for growth under our mid-term management plan in fiscal 2013. As two action items, we have been working to strengthen and generate substantial results from the Group’s growth foundations, and to put our business back on an upward trend.In fiscal 2013, the first year of the plan, sales increased year on year on the back of the positive impact of the yen’s depreciation. Profits, however, decreased as a result of declining prices of architectural glass in Europe and electronic-related products, among other factors. Considering these results, and for the purpose of realizing our Aspirations for 2020, we will continue to push forward with initiatives in our three business domains in fiscal 2014, pursuing three strategies orga-nized under the concepts of becoming a Glass-tech-nology-driven Company, providing Technology Solutions for Environment and Energy, and promoting a Second Round of Globalization. To this end, we have been accelerating our efforts in modifying and evolv-ing our tactics for achieving these strategies. At the same time, the AGC Group will boost its competitive-ness by transforming its range of diversity in materials, technologies, markets and business regions respec-tively into a comprehensive strength. I invite you to read about some of these specific initiatives in the pages that follow. In the AGC Group, we regard the Group’s vision—to to make the world a brighter place—as our mission. Our purpose as a corporate enterprise is to bring more comfort, convenience, and abundance to people’s lives and society, while also considering the environment, through superior prod-ucts and services. By fulfilling this mission, we will evolve the AGC Group while gaining the trust of customers and meeting their expectations.CEO MessageBy fulfilling our mission to bring more comfort, convenience,and abundance to people’s lives and society,we will evolve the AGC Group into a truly strong organizationwhile gaining the trust of customers and meeting their expectations.AGC’s Aspirations for 2020The AGC Group aspires to excel as a highly profit-able and fast-growing global enterprise making contributions to a sustainable society by:(cid:127)Having strong and differentiated technologies(cid:127)Incorporating environmental friendliness not only in our products but also in our production processes and business activities(cid:127)Contributing to the development of fast-growing regionsThree strategiesBuild Foundationsfor GrowthSecond RoundofGlobalizationTechnologySolutions forEnvironmentand EnergyGlass-technology-drivenCompanyStrengthen and Generate Substantial Resultsfrom the Group’s Growth FoundationsNo Change in the Group’s Three Strategies and Business DomainsBusiness domainsPresident & CEOAGC Report 20146AGC Report 20145’14-152,8403,0202,8009002,8001,000CAPEX in 2014 & 2015Depreciation in 2014 & 2014’14-15’14-15’14-15InitialAfter revisionInitialAfter revision(100 million yen)(100 million yen)CAPEX & DepreciationR&DChart 2: Revision of CAPEX and R&D ExpendituresOperating Income Results and Forecasts from 2012 to 2015Chart 1: Progress toward the Projected Business Outline in 2020201312%15%24%202020152012ActualTargetTargetActual17%11%20%020132014Short-termMid-term2020ForecastForecast51015Chart 3: Progress of ROE Target (Projection)Initial targetTarget after revision Target (After revision)5% or above0.5 or less8% or above0.5 or less12% or above0.5 or less2020Mid-termShort-term12% or above0.5 or lessROED/E2015Target (Initial)2012201320142015ActualActualForecastTargetMid-termGrowth strategyMid to long term2,0001,5001,0005000Strengthen growth strategiesand generate profits from them(100 million yen)（%）TechnologySolutions forEnvironmentand EnergyBuild Foundationsfor GrowthGlass-technology-drivenCompanySecond RoundGlobalizationPriority Issues in 2014 OnwardsBy carefully selecting items, we will keep CAPEX less than the level of depreciation.Narrow down the R&D theme and scale down the R&D expensesFast-growingcountriesEnvironment-relatedNewproducts30%30%30%25%19%18%With the aim to become a truly strong organization, the AGC Group has set two action items in its Mid-Term Management Plan to put business back on an upward trend, and to strengthen and generate substantial results from the Group’s growth foundations. The plan commenced in 2013, but although that was a year for pursu-ing initiatives intended to reverse the Group’s performance, operating income decreased 21.5% year on year to 79.9 billion yen. This was mainly the result of declining profitabil-ity in the display business, owing to the depreciation of the yen, and a slow recovery in the architectural glass business in Europe. (Details of net sales and other financial results are presented on page 9.) In each of the categories of emerging markets, environ-ment-related products, and new products, the AGC Group is aiming to have sales account for 30% or more of total net sales, respectively, by 2020. Progress toward achieving these sales ratio targets is shown in chart 1.As a result of carrying out various measures designed to enhance business in Asia, particularly in China, sales in emerg-ing markets has grown markedly to 24% of total net sales. Sales of environment-related products, however, accounted for only 15% of net sales, mainly owing to sluggish sales of cover glass for solar power systems and other products. Meanwhile, the sales ratio for new products grew to 12%, primarily due to the sales contribution from electronic-related materials and components. Taking into account the above results as well as changes in our operating environment, we revised certain financial targets that had been set in the mid-term management plan at the start of the plan’s second year (as shown in charts 2 and 3). The amount budgeted for capital expenditures (CAPEX) from 2014 to 2015 was downwardly revised to 280 billion yen, about 20 billion yen below initial plans. Based on this revision, we will aim to keep CAPEX within the same range as depreci-ation by carefully selecting investments, particularly those in fast-growing countries.For the same period, we downwardly revised the amount budgeted for R&D expenditures to 90 billion yen, 10 billion yen lower than our initial plans. These expenditures will be concen-trated in key areas, including the development of high-function glass products with high added value, technical development and upgrading of production processes, and research and development related to fluorine chemicals.Furthermore, while we had targeted a return on equity (ROE) of 12% by 2015, we will now aim to achieve this by 2020, and pursue a target of 5% and above over the short term (see chart 3).We set three priority issues to each of two action items in our mid-term management plan, for the purpose of becoming a truly strong AGC Group.By aggressively pushing forward with these initiatives in 2014 onwards, the Group intends to rebound its performance and return to the growth track over the period of the plan.:Action item 1Priority issue 1We will continue restructuring the flat glass business in Europe, and will bolster marketing and improve the cost performance of the architectural glass business in North America. Through these initiatives, we intend to improve the profitability of Glass operations.“ -2015”(Note) Financial data is based on International Financial Reporting Standards (IFRS).Mid-Term Management PlanReview“ -2015”Progressing toward 2020 Sales Ratio TargetsThe Ratio of Sales in Emerging Markets Grows MarkedlyRevision of the TargetsBudgets for CAPEX and R&D Expenses Reduced, and ROE Target Date ReviewedMeasures in 2014 OnwardsPushing Forward with Key Initiatives for Realizing a Truly Strong AGC GroupPut our business back on an upward trendAction item 2Strengthen/generate substantial results from growth foundationsTurn around the performance of the glass businessPriority issue 2We plan to expand operations in the market for small and medium-size displays and in China’s display market, which is forecast to grow. At the same time, in order to minimize declining profitability in its display business, we will introduce high-efficiency equipment and reduce costs by optimizing the global operations of manufacturing plants.Minimize the profitability decline in the display businessPriority issue 3Cost reduction will be promoted through Group-wide projects intended to strengthen operations as a whole. This initiative intends to improve efficiency in all of its divisions and departments spanning from research and development to sales and administration.Group-wide efforts to enhance efficiencyPriority issue 1We have established a more stable business platform in fast-growing countries through proactive investments initiated in 2010. By leverag-ing this platform and aggressively investing in markets where high profitability is likely, we will strive to generate steady earnings growth in emerging markets. Enhance business in fast-growing countriesPriority issue 2We will release and promote new products in its three business domains (presented on page 15) in an effort to accelerate earnings. We also plan to step up marketing of its mainstay chemically strengthened glass products by broadening the diversity of their applications to include transport vehicles, solar power plants, and building materials. Accelerate new product launches and promote sales expansionPriority issue 3With fast-growing countries and new products as growth drivers, Chemicals operations is expected to grow more than any of the Group’s businesses. We intend to boost investment in basic chemical products in Southeast Asia with an eye to increase its market share and generate steady earnings. Promoting sales of high-performance fluorinated products will also be essential for growth. Growth in Chemicals operationsAGC Report 20148AGC Report 20147’14-152,8403,0202,8009002,8001,000CAPEX in 2014 & 2015Depreciation in 2014 & 2014’14-15’14-15’14-15InitialAfter revisionInitialAfter revision(100 million yen)(100 million yen)CAPEX & DepreciationR&DChart 2: Revision of CAPEX and R&D ExpendituresOperating Income Results and Forecasts from 2012 to 2015Chart 1: Progress toward the Projected Business Outline in 2020201312%15%24%202020152012ActualTargetTargetActual17%11%20%020132014Short-termMid-term2020ForecastForecast51015Chart 3: Progress of ROE Target (Projection)Initial targetTarget after revision Target (After revision)5% or above0.5 or less8% or above0.5 or less12% or above0.5 or less2020Mid-termShort-term12% or above0.5 or lessROED/E2015Target (Initial)2012201320142015ActualActualForecastTargetMid-termGrowth strategyMid to long term2,0001,5001,0005000Strengthen growth strategiesand generate profits from them(100 million yen)（%）TechnologySolutions forEnvironmentand EnergyBuild Foundationsfor GrowthGlass-technology-drivenCompanySecond RoundGlobalizationPriority Issues in 2014 OnwardsBy carefully selecting items, we will keep CAPEX less than the level of depreciation.Narrow down the R&D theme and scale down the R&D expensesFast-growingcountriesEnvironment-relatedNewproducts30%30%30%25%19%18%With the aim to become a truly strong organization, the AGC Group has set two action items in its Mid-Term Management Plan to put business back on an upward trend, and to strengthen and generate substantial results from the Group’s growth foundations. The plan commenced in 2013, but although that was a year for pursu-ing initiatives intended to reverse the Group’s performance, operating income decreased 21.5% year on year to 79.9 billion yen. This was mainly the result of declining profitabil-ity in the display business, owing to the depreciation of the yen, and a slow recovery in the architectural glass business in Europe. (Details of net sales and other financial results are presented on page 9.) In each of the categories of emerging markets, environ-ment-related products, and new products, the AGC Group is aiming to have sales account for 30% or more of total net sales, respectively, by 2020. Progress toward achieving these sales ratio targets is shown in chart 1.As a result of carrying out various measures designed to enhance business in Asia, particularly in China, sales in emerg-ing markets has grown markedly to 24% of total net sales. Sales of environment-related products, however, accounted for only 15% of net sales, mainly owing to sluggish sales of cover glass for solar power systems and other products. Meanwhile, the sales ratio for new products grew to 12%, primarily due to the sales contribution from electronic-related materials and components. Taking into account the above results as well as changes in our operating environment, we revised certain financial targets that had been set in the mid-term management plan at the start of the plan’s second year (as shown in charts 2 and 3). The amount budgeted for capital expenditures (CAPEX) from 2014 to 2015 was downwardly revised to 280 billion yen, about 20 billion yen below initial plans. Based on this revision, we will aim to keep CAPEX within the same range as depreci-ation by carefully selecting investments, particularly those in fast-growing countries.For the same period, we downwardly revised the amount budgeted for R&D expenditures to 90 billion yen, 10 billion yen lower than our initial plans. These expenditures will be concen-trated in key areas, including the development of high-function glass products with high added value, technical development and upgrading of production processes, and research and development related to fluorine chemicals.Furthermore, while we had targeted a return on equity (ROE) of 12% by 2015, we will now aim to achieve this by 2020, and pursue a target of 5% and above over the short term (see chart 3).We set three priority issues to each of two action items in our mid-term management plan, for the purpose of becoming a truly strong AGC Group.By aggressively pushing forward with these initiatives in 2014 onwards, the Group intends to rebound its performance and return to the growth track over the period of the plan.:Action item 1Priority issue 1We will continue restructuring the flat glass business in Europe, and will bolster marketing and improve the cost performance of the architectural glass business in North America. Through these initiatives, we intend to improve the profitability of Glass operations.“ -2015”(Note) Financial data is based on International Financial Reporting Standards (IFRS).Mid-Term Management PlanReview“ -2015”Progressing toward 2020 Sales Ratio TargetsThe Ratio of Sales in Emerging Markets Grows MarkedlyRevision of the TargetsBudgets for CAPEX and R&D Expenses Reduced, and ROE Target Date ReviewedMeasures in 2014 OnwardsPushing Forward with Key Initiatives for Realizing a Truly Strong AGC GroupPut our business back on an upward trendAction item 2Strengthen/generate substantial results from growth foundationsTurn around the performance of the glass businessPriority issue 2We plan to expand operations in the market for small and medium-size displays and in China’s display market, which is forecast to grow. At the same time, in order to minimize declining profitability in its display business, we will introduce high-efficiency equipment and reduce costs by optimizing the global operations of manufacturing plants.Minimize the profitability decline in the display businessPriority issue 3Cost reduction will be promoted through Group-wide projects intended to strengthen operations as a whole. This initiative intends to improve efficiency in all of its divisions and departments spanning from research and development to sales and administration.Group-wide efforts to enhance efficiencyPriority issue 1We have established a more stable business platform in fast-growing countries through proactive investments initiated in 2010. By leverag-ing this platform and aggressively investing in markets where high profitability is likely, we will strive to generate steady earnings growth in emerging markets. Enhance business in fast-growing countriesPriority issue 2We will release and promote new products in its three business domains (presented on page 15) in an effort to accelerate earnings. We also plan to step up marketing of its mainstay chemically strengthened glass products by broadening the diversity of their applications to include transport vehicles, solar power plants, and building materials. Accelerate new product launches and promote sales expansionPriority issue 3With fast-growing countries and new products as growth drivers, Chemicals operations is expected to grow more than any of the Group’s businesses. We intend to boost investment in basic chemical products in Southeast Asia with an eye to increase its market share and generate steady earnings. Promoting sales of high-performance fluorinated products will also be essential for growth. Growth in Chemicals operationsAGC Report 20148AGC Report 201471.6%0.5%5.8(%)0.60.30Debt to equity(D/E) ratio(%)6420Net incomeNet Income Attributableto Owners of the ParentReturn onEquity (ROE)16.1billion yen806040200201348.416.1(Billion yen)Capital Expenditures160120804002012138.5155.3(Billion yen)138.5billion yen2013Depreciation Costs160120804002012135.8117.9(Billion yen)135.8billion yen2013R&D Costs604530150201246.947.1(Billion yen)46.9billion yen20131,145.1billion yenCapital201220131,20090060030001,145.1(Billion yen)960.7575.0billion yenInterest-Bearing DebtDebt to Equity(D/E) Ratio201220131,0007505002500575.0(Billion yen)Interest-bearingdebt538.62,120.6billion yenAssetsOperating Profit79.9billion yen1209060300201320131,32079.9(Billion yen)Net Sales11,320billion yenJapan/Asia 956.9billion yenData by RegionFinancial DataNon-Financial DataOrganizations Covered in the Report: Asahi Glass Co., Ltd. and its consolidated subsidiariesReporting Period: Consolidated fiscal year ending December 31All numeric data (except non-financial data) is based on International Financial Reporting Standards (IFRS)201220131,6001,20080040002,4001,8001,20060002012201220122,120.6101.81,190Human resources and occupational safety data2Number of employeesPersons registered in Skill Map personnel databaseFatal accidents3Environment data4Total energy consumption (PJ)5 Greenhouse gas emissions (1,000 tons-CO2) Total waste generated (1,000 tons) Total waste disposed (1,000 tons) Total wastewater (million m3)6Year-on-yearchange50,9575,50021479,86081125487 Sales by region calculated before elimination(Billion yen)(Billion yen)Net SalesSales Ratio7Greenhouse Gas EmissionsRatioTotal Energy ConsumptionRatioEmployees RatioEurope 291.4billion yenThe Americas 111.8billion yen8.2%The Americas111.8 billion yen 21.4%Europe291.4billion yen 70.4%Japan/Asia956.9billion yen 28.6%Europe14,70762.9%Japan/Asia32,35518.4%Europe27 PJ74.1%Japan/Asia109 PJ21.7%Europe2,140thousandtons-CO271.6%Japan/Asia7,070thousandtons-CO28.5%The Americas4,3867.5%The Americas11 PJ6.7%The Americas662 thousandtons-CO2201220131,0007505002500(Billion yen)320240160800(Billion yen)956.9911.120122013291.4229.01209060300(Billion yen)20122013111.883.61,916.41,360.1billion yen2013201149,9617,300315010,05065025471,4871,000–2–3–18014–31201251,4488,30011479,87066422482013ROE1.60.560.50Financial and Non-Financial Highlights1 Sales by region calculated before elimination(Note) Please refer to the separate CSR Information Supplement and our CSR website for more detailed non-financial data.2 Please refer to Chapter 3 (Human Rights and Labor Practices) starting on page 29 for related information.3 Numbers are for AGC Group employees. 4 Please refer to Chapter 2 (The Environment) starting on page 23 for related information.5 PJ (petajoule) = 1015J (joules) 6 Numbers are for the AGC Group (Japan).(Note) Please refer to page 11 for financial data by segment, and to the Annual Securities Report (Japanese only) or Financial Review booklet (English only) for more detailed financial data.147PJ20139,870thousandtons-CO2201351,4482013AGC Report 201410AGC Report 201491.6%0.5%5.8(%)0.60.30Debt to equity(D/E) ratio(%)6420Net incomeNet Income Attributableto Owners of the ParentReturn onEquity (ROE)16.1billion yen806040200201348.416.1(Billion yen)Capital Expenditures160120804002012138.5155.3(Billion yen)138.5billion yen2013Depreciation Costs160120804002012135.8117.9(Billion yen)135.8billion yen2013R&D Costs604530150201246.947.1(Billion yen)46.9billion yen20131,145.1billion yenCapital201220131,20090060030001,145.1(Billion yen)960.7575.0billion yenInterest-Bearing DebtDebt to Equity(D/E) Ratio201220131,0007505002500575.0(Billion yen)Interest-bearingdebt538.62,120.6billion yenAssetsOperating Profit79.9billion yen1209060300201320131,32079.9(Billion yen)Net Sales11,320billion yenJapan/Asia 956.9billion yenData by RegionFinancial DataNon-Financial DataOrganizations Covered in the Report: Asahi Glass Co., Ltd. and its consolidated subsidiariesReporting Period: Consolidated fiscal year ending December 31All numeric data (except non-financial data) is based on International Financial Reporting Standards (IFRS)201220131,6001,20080040002,4001,8001,20060002012201220122,120.6101.81,190Human resources and occupational safety data2Number of employeesPersons registered in Skill Map personnel databaseFatal accidents3Environment data4Total energy consumption (PJ)5 Greenhouse gas emissions (1,000 tons-CO2) Total waste generated (1,000 tons) Total waste disposed (1,000 tons) Total wastewater (million m3)6Year-on-yearchange50,9575,50021479,86081125487 Sales by region calculated before elimination(Billion yen)(Billion yen)Net SalesSales Ratio7Greenhouse Gas EmissionsRatioTotal Energy ConsumptionRatioEmployees RatioEurope 291.4billion yenThe Americas 111.8billion yen8.2%The Americas111.8 billion yen 21.4%Europe291.4billion yen 70.4%Japan/Asia956.9billion yen 28.6%Europe14,70762.9%Japan/Asia32,35518.4%Europe27 PJ74.1%Japan/Asia109 PJ21.7%Europe2,140thousandtons-CO271.6%Japan/Asia7,070thousandtons-CO28.5%The Americas4,3867.5%The Americas11 PJ6.7%The Americas662 thousandtons-CO2201220131,0007505002500(Billion yen)320240160800(Billion yen)956.9911.120122013291.4229.01209060300(Billion yen)20122013111.883.61,916.41,360.1billion yen2013201149,9617,300315010,05065025471,4871,000–2–3–18014–31201251,4488,30011479,87066422482013ROE1.60.560.50Financial and Non-Financial Highlights1 Sales by region calculated before elimination(Note) Please refer to the separate CSR Information Supplement and our CSR website for more detailed non-financial data.2 Please refer to Chapter 3 (Human Rights and Labor Practices) starting on page 29 for related information.3 Numbers are for AGC Group employees. 4 Please refer to Chapter 2 (The Environment) starting on page 23 for related information.5 PJ (petajoule) = 1015J (joules) 6 Numbers are for the AGC Group (Japan).(Note) Please refer to page 11 for financial data by segment, and to the Annual Securities Report (Japanese only) or Financial Review booklet (English only) for more detailed financial data.147PJ20139,870thousandtons-CO2201351,4482013AGC Report 201410AGC Report 201492012344.1257.320121 All numeric data is based on International Financial Reporting Standards (IFRS).Flat glass(cid:127)Float glass(cid:127)Low-emissivity (Low-E) glass(cid:127)Double glazing glass for solar control/heat-insulation(cid:127)Safety glass(cid:127)Decorative glass(cid:127)Glass for solar power systemsAutomotive glass(cid:127)Tempered automotive glass(cid:127)Laminated automotive glassDisplay glass(cid:127)Glass substrates for TFT-LCDs(cid:127)Glass substrates for PDPs(cid:127)Specialty glass for display applications(cid:127)Glass substrates for display devices(cid:127)Display-related materialsElectronics materials and parts(cid:127)Visibility compensation filters for digital cameras(cid:127)CMP slurry(cid:127)Synthetic quartz glass(cid:127)Glass frit and paste(cid:127)Glass molded lens(cid:127)Polycarbonate sheet & filmChlor-alkali & urethane(cid:127)Raw materials for vinyl chloride monomer and polymer(cid:127)Caustic soda(cid:127)Urethane materialsFluorochemicals & specialty chemicals(cid:127)Fluoropolymers/films(cid:127)Fluorinated water and oil repellents(cid:127)Pharmaceutical and agrochemical intermediates and active ingredients Iodine-related products(cid:127)Battery materialsCeramics(cid:127)Various refractory materials(cid:127)Fine ceramics(cid:127)Sputtering targetsLogistics/Engineering290.72013(Billion yen)2013(Billion yen)346.02 Tafluprost is glaucoma treatment co-developed with Santen Pharmaceutical Co., Ltd.As of the end ofDecember 2013Corporate DataNameHead OfficeFoundedIncorporatedAsahi Glass Co., Ltd.(Global brand: AGC)1-5-1, Marunouchi, Chiyoda-ku, Tokyo 100-8405 JAPANSeptember 8, 1907June 1, 1950CapitalOutstanding stockEmployeesConsolidated Group companies90,873 million yen1,186,705,905 shares51,448 (consolidated),6,269 (non-consolidated)200 (164 overseas)GlassChemicalsElectronicsCeramics/Other“Fluon® ETFE FILM” Fluoropolymer filmTafluprost2 pharmaceutical and agrochemical intermediates and active ingredients“Lumiflon™” highly weather-resistant fluoropolymer resin for coatingsFused cast refractory bricks for glass furnace crowns“THERMOTECT WALL™” high thermal insulation furnace wallsCeramic sputtering targetsCement rotary kiln“Dragontrail™ X” specialty glass for chemical strengthening Glass substrates for TFT-LCDs Visibility compensation filters for digital camerasLow emissivity (Low-E) double glazing unitStopray Ultra 50 on Clearvision“UV Verre Premium™” Series for automotive glass48%25%21%6%GlassChemicalsElectronicsCeramics/Other201287.02013(Billion yen)78.6Sales Ratio1Sales Trends1Main ProductsOperations2012564.62013(Billion yen)667.3Overview of the AGC Group300200100050030040020010001005006007004005003002001000AGC Report 201412AGC Report 2014112012344.1257.320121 All numeric data is based on International Financial Reporting Standards (IFRS).Flat glass(cid:127)Float glass(cid:127)Low-emissivity (Low-E) glass(cid:127)Double glazing glass for solar control/heat-insulation(cid:127)Safety glass(cid:127)Decorative glass(cid:127)Glass for solar power systemsAutomotive glass(cid:127)Tempered automotive glass(cid:127)Laminated automotive glassDisplay glass(cid:127)Glass substrates for TFT-LCDs(cid:127)Glass substrates for PDPs(cid:127)Specialty glass for display applications(cid:127)Glass substrates for display devices(cid:127)Display-related materialsElectronics materials and parts(cid:127)Visibility compensation filters for digital cameras(cid:127)CMP slurry(cid:127)Synthetic quartz glass(cid:127)Glass frit and paste(cid:127)Glass molded lens(cid:127)Polycarbonate sheet & filmChlor-alkali & urethane(cid:127)Raw materials for vinyl chloride monomer and polymer(cid:127)Caustic soda(cid:127)Urethane materialsFluorochemicals & specialty chemicals(cid:127)Fluoropolymers/films(cid:127)Fluorinated water and oil repellents(cid:127)Pharmaceutical and agrochemical intermediates and active ingredients Iodine-related products(cid:127)Battery materialsCeramics(cid:127)Various refractory materials(cid:127)Fine ceramics(cid:127)Sputtering targetsLogistics/Engineering290.72013(Billion yen)2013(Billion yen)346.02 Tafluprost is glaucoma treatment co-developed with Santen Pharmaceutical Co., Ltd.As of the end ofDecember 2013Corporate DataNameHead OfficeFoundedIncorporatedAsahi Glass Co., Ltd.(Global brand: AGC)1-5-1, Marunouchi, Chiyoda-ku, Tokyo 100-8405 JAPANSeptember 8, 1907June 1, 1950CapitalOutstanding stockEmployeesConsolidated Group companies90,873 million yen1,186,705,905 shares51,448 (consolidated),6,269 (non-consolidated)200 (164 overseas)GlassChemicalsElectronicsCeramics/Other“Fluon® ETFE FILM” Fluoropolymer filmTafluprost2 pharmaceutical and agrochemical intermediates and active ingredients“Lumiflon™” highly weather-resistant fluoropolymer resin for coatingsFused cast refractory bricks for glass furnace crowns“THERMOTECT WALL™” high thermal insulation furnace wallsCeramic sputtering targetsCement rotary kiln“Dragontrail™ X” specialty glass for chemical strengthening Glass substrates for TFT-LCDs Visibility compensation filters for digital camerasLow emissivity (Low-E) double glazing unitStopray Ultra 50 on Clearvision“UV Verre Premium™” Series for automotive glass48%25%21%6%GlassChemicalsElectronicsCeramics/Other201287.02013(Billion yen)78.6Sales Ratio1Sales Trends1Main ProductsOperations2012564.62013(Billion yen)667.3Overview of the AGC Group300200100050030040020010001005006007004005003002001000AGC Report 201412AGC Report 201411●●●●●●●●●■■■■■■▲▲▲▲▲▲▲▲▲▲▲▲▲◆◆AGC Glass Products Co., Ltd.AGC Glass Kenzai Co., Ltd.AGC Okinawa Glass Kenzai Co., Ltd.AGC Amenitech Co., Ltd.Ryugasaki Glass Co., Ltd.AGC Fabritech Co., Ltd.AGC Automotive AMC Co., Ltd.AGC Automotive Window Systems Co., Ltd.Autoglass Co., Ltd.AGC Display Glass Yonezawa Co., Ltd.AGC Electronics Co., Ltd.AGC Techno Glass Co., Ltd.AGC Micro Glass Co., Ltd.AGC Polycarbonate Co., Ltd.Optical Coatings JapanIse Chemicals CorporationKeiyo Monomer Co., Ltd.AGC Si-Tech Co., Ltd.AGC Engineering Co., Ltd.AGC Seimi Chemical Co., Ltd.AGC Coat-Tech Co., Ltd.AGC Polymer Material Co., Ltd.AGC Green-Tech Co., Ltd.AGC Wakasa Chemicals Co., Ltd.AGC Matex Co., Ltd.AGC Filtech Co., Ltd.Hokkaido Soda Co., Ltd.Kashima Chemical Co., Ltd.AGC Ceramics Co., Ltd.AGC Plibrico Co., Ltd.AGC Research Institute, Inc.AGC Insurance Management Co., Ltd.AGC Finance Co., Ltd.AGC Logistics Co., Ltd.AGC Technology Solutions Co., Ltd.Tokai Kogyo Co., Ltd.ThailandAGC Flat Glass (Thailand) Public Co., Ltd.AGC Automotive (Thailand) Co., Ltd.AGC Techno Glass (Thailand) Co., Ltd.AGC Micro Glass (Thailand) Co., Ltd.AGC Chemicals (Thailand) Co., Ltd.AGC Matex (Thailand) Co., Ltd.AGC Technology Solutions (Thailand) Co., Ltd.IndonesiaPT Asahimas Flat Glass Tbk.PT IWAKI Glass IndonesiaPT Cahayatiara Mustika Scientific IndonesiaPT Asahimas ChemicalSingaporeAGC Flat Glass Asia Pacific Pte., Ltd.AGC Electronics Singapore Pte. Ltd.AGC Chemicals Asia Pacific Pte. Ltd.AGC Ceramics Singapore Pte. Ltd.AGC Asia Pacific Pte., Ltd.AGC Singapore Services Pte. Ltd.PhilippinesAGC Flat Glass Philippines Inc.AGC Automotive Philippines Inc.AGC Philippine Ecozone Management CorporationTaiwanAGC Display Glass Taiwan Co., Ltd.AGC Electronics Taiwan Co., Ltd.ChinaAGC Flat Glass (Dalian) Co., Ltd.AGC Flat Glass (Suzhou) Co., Ltd.AGC Flat Glass Protech (Shenzhen) Co., Ltd.AGC Flat Glass (Hong Kong) Co., Ltd.AGC Automotive China Co., Ltd.AGC Automotive Foshan Co., LtdBeijing Kuayian Car Glass Sales & Service Co., Ltd.AGC Glass Substrate (Hong Kong) Co., Ltd.AGC Glass Substrate (Guangdong) Co., Ltd.AGC Display Glass (Kunshan) Co., Ltd.AGC Display Glass (Shenzhen) Co., Ltd.AGC Chemicals Trading (Shanghai) Co., Ltd.Seimi Tongda Lithium Energy Co., Ltd.Zibo Asahi Glass Alumina Materials Co., Ltd.Yixing AGC Ceramics Co., Ltd.Plibrico (Dalian) Industries Co., Ltd.AGC(China) Holdings Co., Ltd.AGC Shanghai Co., Ltd.AGC Technology Solutions (Kunshan) Co., LTD.KoreaHanwook Techno Glass Co., Ltd.Asahi Glass Fine Techno Korea Co., Ltd.Asahi PD Glass Korea Co., Ltd.AGC Display Glass Ochang Co., Ltd.●●●■■●●●●●●●■■■■▲▲◆◆◆■■■■BelgiumAGC Glass Europe S.A.AGC Glass Europe Sales S.A.AGC Automotive Europe S.A.AGC Automotive Belgium S.A.AGC Europe S.A.NetherlandAGC Flat Glass Nederland B.V.U.K.AGC Glass UK Ltd.AGC Chemicals Europe, Ltd.Czech RepublicAGC Flat Glass Czech a.s., clen AGC GroupAGC Automotive Czech a.s. Russia OJSC AGC Bor GlassworksAGC Flat Glass Klin LLCFranceAGC France SASItalyAGC Flat Glass Italia S.r.lAGC Automotive Italia S.r.lSpainAGC Flat Glass Iberica S.A.GermanyAGC Glass Germany GmbHInterpane Glas Industrie AGHungaryAGC Glass Hungary Ltd.PolandAGC Gdansk Sp. z o.o.TurkeyAGC Otomotiv Adapazari Üretim, Sanayi Ve Ticaret Anonim Sirketi●●●● ●●▲●●●●●●●●●●●●●●■▲◆GlassElectronicsChemicalsCeramicsOthersAsahi Glass Co., Ltd.AsiaEuropeU.S.AAGC Flat Glass North America, Inc.AGC Soda CorporationAGC Automotive Americas Co.AGC Automotive Americas R&D, Inc.AGC Electronics America, Inc.AGC Chemicals Americas, Inc.Woodward Iodine CorporationAGC America, Inc.AGC Capital, Inc.CanadaAGC Flat Glass North America, Ltd.AGC Automotive Canada, Inc.MexicoAGC Automotive Mexico S. de R.L. de C.V.AGC Automotive Glass Mexico S.A. de C.V.●●●●■▲▲●●●●North AmericaBrazilAGC Glass Brazil, Inc.●▲South AmericaJapanIn BrazilAsahi Glass is providing glass roofs for the player benches of all 12 stadiums hosting the 2014 FIFA World Cup Brazil. These roofs utilize Dragontrail™ X, specialty glass for chemical strengthening (see page 20 for details), one of the world’s most durable. Dragontrail™ X’s surface strength is approximately eight times that of ordinary glass, and its impressive shock resistance has been further strengthened by layering two panes together. The glass has also been given a unique anti-reflective coating that reduces its reflective properties to 1/13th those of ordinary glass, allowing fans a clear view of the players and coach.The AGC Group has also been selected as the official glass supplier for São Paolo’s Arena Corinthians football stadium. The Group enhances the beauty of the stadium with Planibel Clearvision, an exceptionally clear glass.In addition, the exterior of Recife’s Itaipava Arena Pernambuco football stadium utilizes Fluon® ETFE FILM, a high-performance fluoropolymer film. This lightweight, flexible fluoropolymer film made the beautiful stadium with its curved lines a reality (photo on page 18).We used our unique glass and chemical technologies to add to the excitement at the 2014 FIFA World Cup Brazil.(Note) As of December 2013NewsThe east façade of the Arena Corinthians stadium utilizes Planibel Clearvision, a high-transmission glassⓒCoutinho, Diegues, Cordeiro/DDGThe glass roof for player benches utilizes Dragontrail™ X, a specialty glass for chemical strengthening Global Network●●■■▲ ▲●■ ■▲●■▲◆AGC’s Wide-Ranging Technologies that Support the 2014 FIFA World CupAGC Report 201414AGC Report 201413●●●●●●●●●■■■■■■▲▲▲▲▲▲▲▲▲▲▲▲▲◆◆AGC Glass Products Co., Ltd.AGC Glass Kenzai Co., Ltd.AGC Okinawa Glass Kenzai Co., Ltd.AGC Amenitech Co., Ltd.Ryugasaki Glass Co., Ltd.AGC Fabritech Co., Ltd.AGC Automotive AMC Co., Ltd.AGC Automotive Window Systems Co., Ltd.Autoglass Co., Ltd.AGC Display Glass Yonezawa Co., Ltd.AGC Electronics Co., Ltd.AGC Techno Glass Co., Ltd.AGC Micro Glass Co., Ltd.AGC Polycarbonate Co., Ltd.Optical Coatings JapanIse Chemicals CorporationKeiyo Monomer Co., Ltd.AGC Si-Tech Co., Ltd.AGC Engineering Co., Ltd.AGC Seimi Chemical Co., Ltd.AGC Coat-Tech Co., Ltd.AGC Polymer Material Co., Ltd.AGC Green-Tech Co., Ltd.AGC Wakasa Chemicals Co., Ltd.AGC Matex Co., Ltd.AGC Filtech Co., Ltd.Hokkaido Soda Co., Ltd.Kashima Chemical Co., Ltd.AGC Ceramics Co., Ltd.AGC Plibrico Co., Ltd.AGC Research Institute, Inc.AGC Insurance Management Co., Ltd.AGC Finance Co., Ltd.AGC Logistics Co., Ltd.AGC Technology Solutions Co., Ltd.Tokai Kogyo Co., Ltd.ThailandAGC Flat Glass (Thailand) Public Co., Ltd.AGC Automotive (Thailand) Co., Ltd.AGC Techno Glass (Thailand) Co., Ltd.AGC Micro Glass (Thailand) Co., Ltd.AGC Chemicals (Thailand) Co., Ltd.AGC Matex (Thailand) Co., Ltd.AGC Technology Solutions (Thailand) Co., Ltd.IndonesiaPT Asahimas Flat Glass Tbk.PT IWAKI Glass IndonesiaPT Cahayatiara Mustika Scientific IndonesiaPT Asahimas ChemicalSingaporeAGC Flat Glass Asia Pacific Pte., Ltd.AGC Electronics Singapore Pte. Ltd.AGC Chemicals Asia Pacific Pte. Ltd.AGC Ceramics Singapore Pte. Ltd.AGC Asia Pacific Pte., Ltd.AGC Singapore Services Pte. Ltd.PhilippinesAGC Flat Glass Philippines Inc.AGC Automotive Philippines Inc.AGC Philippine Ecozone Management CorporationTaiwanAGC Display Glass Taiwan Co., Ltd.AGC Electronics Taiwan Co., Ltd.ChinaAGC Flat Glass (Dalian) Co., Ltd.AGC Flat Glass (Suzhou) Co., Ltd.AGC Flat Glass Protech (Shenzhen) Co., Ltd.AGC Flat Glass (Hong Kong) Co., Ltd.AGC Automotive China Co., Ltd.AGC Automotive Foshan Co., LtdBeijing Kuayian Car Glass Sales & Service Co., Ltd.AGC Glass Substrate (Hong Kong) Co., Ltd.AGC Glass Substrate (Guangdong) Co., Ltd.AGC Display Glass (Kunshan) Co., Ltd.AGC Display Glass (Shenzhen) Co., Ltd.AGC Chemicals Trading (Shanghai) Co., Ltd.Seimi Tongda Lithium Energy Co., Ltd.Zibo Asahi Glass Alumina Materials Co., Ltd.Yixing AGC Ceramics Co., Ltd.Plibrico (Dalian) Industries Co., Ltd.AGC(China) Holdings Co., Ltd.AGC Shanghai Co., Ltd.AGC Technology Solutions (Kunshan) Co., LTD.KoreaHanwook Techno Glass Co., Ltd.Asahi Glass Fine Techno Korea Co., Ltd.Asahi PD Glass Korea Co., Ltd.AGC Display Glass Ochang Co., Ltd.●●●■■●●●●●●●■■■■▲▲◆◆◆■■■■BelgiumAGC Glass Europe S.A.AGC Glass Europe Sales S.A.AGC Automotive Europe S.A.AGC Automotive Belgium S.A.AGC Europe S.A.NetherlandAGC Flat Glass Nederland B.V.U.K.AGC Glass UK Ltd.AGC Chemicals Europe, Ltd.Czech RepublicAGC Flat Glass Czech a.s., clen AGC GroupAGC Automotive Czech a.s. Russia OJSC AGC Bor GlassworksAGC Flat Glass Klin LLCFranceAGC France SASItalyAGC Flat Glass Italia S.r.lAGC Automotive Italia S.r.lSpainAGC Flat Glass Iberica S.A.GermanyAGC Glass Germany GmbHInterpane Glas Industrie AGHungaryAGC Glass Hungary Ltd.PolandAGC Gdansk Sp. z o.o.TurkeyAGC Otomotiv Adapazari Üretim, Sanayi Ve Ticaret Anonim Sirketi●●●● ●●▲●●●●●●●●●●●●●●■▲◆GlassElectronicsChemicalsCeramicsOthersAsahi Glass Co., Ltd.AsiaEuropeU.S.AAGC Flat Glass North America, Inc.AGC Soda CorporationAGC Automotive Americas Co.AGC Automotive Americas R&D, Inc.AGC Electronics America, Inc.AGC Chemicals Americas, Inc.Woodward Iodine CorporationAGC America, Inc.AGC Capital, Inc.CanadaAGC Flat Glass North America, Ltd.AGC Automotive Canada, Inc.MexicoAGC Automotive Mexico S. de R.L. de C.V.AGC Automotive Glass Mexico S.A. de C.V.●●●●■▲▲●●●●North AmericaBrazilAGC Glass Brazil, Inc.●▲South AmericaJapanIn BrazilAsahi Glass is providing glass roofs for the player benches of all 12 stadiums hosting the 2014 FIFA World Cup Brazil. These roofs utilize Dragontrail™ X, specialty glass for chemical strengthening (see page 20 for details), one of the world’s most durable. Dragontrail™ X’s surface strength is approximately eight times that of ordinary glass, and its impressive shock resistance has been further strengthened by layering two panes together. The glass has also been given a unique anti-reflective coating that reduces its reflective properties to 1/13th those of ordinary glass, allowing fans a clear view of the players and coach.The AGC Group has also been selected as the official glass supplier for São Paolo’s Arena Corinthians football stadium. The Group enhances the beauty of the stadium with Planibel Clearvision, an exceptionally clear glass.In addition, the exterior of Recife’s Itaipava Arena Pernambuco football stadium utilizes Fluon® ETFE FILM, a high-performance fluoropolymer film. This lightweight, flexible fluoropolymer film made the beautiful stadium with its curved lines a reality (photo on page 18).We used our unique glass and chemical technologies to add to the excitement at the 2014 FIFA World Cup Brazil.(Note) As of December 2013NewsThe east façade of the Arena Corinthians stadium utilizes Planibel Clearvision, a high-transmission glassⓒCoutinho, Diegues, Cordeiro/DDGThe glass roof for player benches utilizes Dragontrail™ X, a specialty glass for chemical strengthening Global Network●●■■▲ ▲●■ ■▲●■▲◆AGC’s Wide-Ranging Technologies that Support the 2014 FIFA World CupAGC Report 201414AGC Report 201413ThreeStrategiesBusinessDomainsTheBackbonesof theGroup’sBusinessActivitiesGlass-technology-drivenCompanySecond Roundof GlobalizationTechnologySolutions forEnvironmentand EnergyTechnology (Glass/Chemicals/Ceramics)No ProductionWithout SafetyOur People AreOur StrengthCustomerSafe, Sound andComfortableLiving Spaces &MaterialsHigher QualityDisplayDevices &CommunicationClean & GreenEnergy123Based on these business domains, the AGC Group will realize growth by promoting three strategies: to be a Glass-technology-driven Company, providing Technology Solutions for Environment and Energy and pursuing a Second Round of Globalization.AGC Group Business DomainsFor MarketsChapter ISales by Region111.8The Americas956.9Japan & Asia291.4billion yenbillion yenbillion yenEuropeRecent years have seen the creation of new markets that span multiple industries, smart cities being a prime example. Meanwhile, the AGC Group has been creating new products by combining its core glass, chemical and ceramics technologies.If the AGC Group is to grow in the midst of dynamic internal and external changes, it must seize business opportunities that extend beyond the boundaries of conventional frameworks. In light of this situation, in 2013, the AGC Group broke away from the traditional business domains, which it had established for each product and industry, and defined new domains.Based on these new business domains, the AGC Group generates a comprehensive strength by leveraging its diversity in materials, technologies, markets and business regions, and provides value that goes beyond the boundaries of its business divisions.Leveraging AGC Group’s Comprehensive Strength in Markets that Integrate beyond Conventional FrameworksProducts and technologies for safe and secure lifestyles that contribute to more comfortable spaces. Major target industries include buildings & residences, cars, infrastruc-ture, lighting and pharmaceuticals.Business Domain 1: Safe, Sound and Comfortable Living Spaces & MaterialsMaterials and technologies for improving the perfor-mance of devices in the rapidly evolving fields of telecommunications and imaging equipment. Major target industries include displays, information & commu-nication devices and optical instruments.Business Domain 2: Higher Quality Display Devices & CommunicationMaterials and technologies designed to save energy and make it cleaner. Major targets include industries related to energy-saving and energy-creating products including components, solar power generation and eco-friendly vehicles.Business Domain 3: Clean & Green EnergyDetails p. 17Details p. 19Details p. 21AGC Report 201416AGC Report 201415ThreeStrategiesBusinessDomainsTheBackbonesof theGroup’sBusinessActivitiesGlass-technology-drivenCompanySecond Roundof GlobalizationTechnologySolutions forEnvironmentand EnergyTechnology (Glass/Chemicals/Ceramics)No ProductionWithout SafetyOur People AreOur StrengthCustomerSafe, Sound andComfortableLiving Spaces &MaterialsHigher QualityDisplayDevices &CommunicationClean & GreenEnergy123Based on these business domains, the AGC Group will realize growth by promoting three strategies: to be a Glass-technology-driven Company, providing Technology Solutions for Environment and Energy and pursuing a Second Round of Globalization.AGC Group Business DomainsFor MarketsChapter ISales by Region111.8The Americas956.9Japan & Asia291.4billion yenbillion yenbillion yenEuropeRecent years have seen the creation of new markets that span multiple industries, smart cities being a prime example. Meanwhile, the AGC Group has been creating new products by combining its core glass, chemical and ceramics technologies.If the AGC Group is to grow in the midst of dynamic internal and external changes, it must seize business opportunities that extend beyond the boundaries of conventional frameworks. In light of this situation, in 2013, the AGC Group broke away from the traditional business domains, which it had established for each product and industry, and defined new domains.Based on these new business domains, the AGC Group generates a comprehensive strength by leveraging its diversity in materials, technologies, markets and business regions, and provides value that goes beyond the boundaries of its business divisions.Leveraging AGC Group’s Comprehensive Strength in Markets that Integrate beyond Conventional FrameworksProducts and technologies for safe and secure lifestyles that contribute to more comfortable spaces. Major target industries include buildings & residences, cars, infrastruc-ture, lighting and pharmaceuticals.Business Domain 1: Safe, Sound and Comfortable Living Spaces & MaterialsMaterials and technologies for improving the perfor-mance of devices in the rapidly evolving fields of telecommunications and imaging equipment. Major target industries include displays, information & commu-nication devices and optical instruments.Business Domain 2: Higher Quality Display Devices & CommunicationMaterials and technologies designed to save energy and make it cleaner. Major targets include industries related to energy-saving and energy-creating products including components, solar power generation and eco-friendly vehicles.Business Domain 3: Clean & Green EnergyDetails p. 17Details p. 19Details p. 21AGC Report 201416AGC Report 201415UV blocking tempered glass (Including UV absorbent)High-performance UV and infrared absorbing layerIn rapidly growing new markets, there is increasing demand for homes and cars, and these commodities are becoming more functional as public infrastructure is put into place. In developed nations, the need for further comfort in lifestyles and spaces is anticipated to continue rising.In a move to steadily capture the demand from these markets, the AGC Group has integrated its glass, chemical and ceramics technologies and is promoting the development of products to support safe and secure lifestyles and create more comfortable spaces.In recent years, there has been an increasing demand from drivers for protection against heat-producing infrared rays and ultraviolet rays, the culprits behind sunburns, skin spots, wrinkles, and even skin cancer.The AGC Group’s “UV Verre Premium Cool on™”, tem-pered automotive door glass, is the first in the world1 to cut ultraviolet rays by 99%2, and its infrared ray blocking perfor-mance has been improved as well. Not only does it protect the driver from the intensity of ultraviolet rays, but the reduced heat inside the car makes it possible to keep the air conditioner set to a higher tempera-ture, helping to reduce environmental load. In 2013, UV Verre Premium Cool on™ received the seal of recommenda-tion from the US-based Skin Cancer Foundation for its ultraviolet ray-block-ing function.1 As of December 2012. Research conducted by Asahi Glass2 ISO 9050. Research conducted by Asahi Glass3 Tafluprost is glaucoma treat-ment co-developed with Santen Pharmaceutical Co., Ltd.© Inês Campelo/Itaipava Arena Pernambuco© Inês Campelo/Itaipava Arena Pernambucowww.agc.com/english/portal/index.htmlWEB(Note) For information on products and technology related to Safe, Sound and Comfortable Living Spaces & Materials, please refer to the AGC website.For MarketsChapter IA Powerful Ally for Drivers: Blocks Ultraviolet and Infrared Rays!UV Verre Premium™ SeriesMain ProductsUV Verre Premium Cool on™KEY PRODUCTHigh-performancefluoropolymer filmPharmaceutical activeingredient forglaucoma treatmentFluon®ETFE FILMTafluprost3OTHER PRODUCTSThis product is the result of a collaboration of glass materials, coating and chemical technologies.Materials andcomponents forLED/OLED lighting Architectural glassFluorochemicals(Coating materials)Ceramic pigmentsfor pavement paintFluorochemicals(Films)Architectural glassGlass fortransportationvehiclesAutomotive glassMaterials and componentsfor LED/OLED lightingUrethane materialsChemicallystrengthenedspecialty glassSafe, Sound and ComfortableLiving Spaces & MaterialsProducts and technologies for safe and secure lifestyles, and that contribute to more comfortable spacesPharmaceutical and agrochemical intermediates and active ingredientsAGC Report 201418AGC Report 201417UV blocking tempered glass (Including UV absorbent)High-performance UV and infrared absorbing layerIn rapidly growing new markets, there is increasing demand for homes and cars, and these commodities are becoming more functional as public infrastructure is put into place. In developed nations, the need for further comfort in lifestyles and spaces is anticipated to continue rising.In a move to steadily capture the demand from these markets, the AGC Group has integrated its glass, chemical and ceramics technologies and is promoting the development of products to support safe and secure lifestyles and create more comfortable spaces.In recent years, there has been an increasing demand from drivers for protection against heat-producing infrared rays and ultraviolet rays, the culprits behind sunburns, skin spots, wrinkles, and even skin cancer.The AGC Group’s “UV Verre Premium Cool on™”, tem-pered automotive door glass, is the first in the world1 to cut ultraviolet rays by 99%2, and its infrared ray blocking perfor-mance has been improved as well. Not only does it protect the driver from the intensity of ultraviolet rays, but the reduced heat inside the car makes it possible to keep the air conditioner set to a higher tempera-ture, helping to reduce environmental load. In 2013, UV Verre Premium Cool on™ received the seal of recommenda-tion from the US-based Skin Cancer Foundation for its ultraviolet ray-block-ing function.1 As of December 2012. Research conducted by Asahi Glass2 ISO 9050. Research conducted by Asahi Glass3 Tafluprost is glaucoma treat-ment co-developed with Santen Pharmaceutical Co., Ltd.© Inês Campelo/Itaipava Arena Pernambuco© Inês Campelo/Itaipava Arena Pernambucowww.agc.com/english/portal/index.htmlWEB(Note) For information on products and technology related to Safe, Sound and Comfortable Living Spaces & Materials, please refer to the AGC website.For MarketsChapter IA Powerful Ally for Drivers: Blocks Ultraviolet and Infrared Rays!UV Verre Premium™ SeriesMain ProductsUV Verre Premium Cool on™KEY PRODUCTHigh-performancefluoropolymer filmPharmaceutical activeingredient forglaucoma treatmentFluon®ETFE FILMTafluprost3OTHER PRODUCTSThis product is the result of a collaboration of glass materials, coating and chemical technologies.Materials andcomponents forLED/OLED lighting Architectural glassFluorochemicals(Coating materials)Ceramic pigmentsfor pavement paintFluorochemicals(Films)Architectural glassGlass fortransportationvehiclesAutomotive glassMaterials and componentsfor LED/OLED lightingUrethane materialsChemicallystrengthenedspecialty glassSafe, Sound and ComfortableLiving Spaces & MaterialsProducts and technologies for safe and secure lifestyles, and that contribute to more comfortable spacesPharmaceutical and agrochemical intermediates and active ingredientsAGC Report 201418AGC Report 201417Increased Surface Strength to Create the Unbreakable Smartphone!Specialty Glass for Chemical Strengthening1 Dragontrail™ XKEY PRODUCT1 Chemical reinforcement is a technique in which a sheet of plain glass is soaked in chemicals to chemically strengthen its surface. 2 As of March 20143 Compression stress values: Conventional Dragontrail™ can handle a maximum of 800Mpa, while the new Dragontrail™ X can handle up to 1GMpa.Due to the global spread of smartphones and other information terminals, the communications and imaging market is anticipated to expand even further. At the same time, user needs are growing more sophisticated and diverse, with requests for thinner and lighter devices and higher image definition. In addition, the appearance of the 4K TV that surpasses conventional image resolution has created a demand for an even faster, larger capacity communications infrastructure.The AGC Group creates high-performance products that are able to respond promptly to these rapidly evolving markets and works to proactively develop new uses for them.Users require many different things from the touch panels on their smartphones. They want them to be unbreakable, impossible to scratch, thin and light, glossy and beautiful. The answer: Dragontrail™ specialty glass for chemical strengthening, which possesses excellent strength, scratch resistance, and surface texture. At present, it has so far been used over 300 models across 37 brands worldwide2.2014 saw the launch of Dragontrail™ X, a product whose surface strength is more than 30% stronger than that of the original Dragontrail™. This product, the strongest chemically strengthened glass in the world3, is contributing to the realization of mobile devices that are even harder to break.The AGC Group is proactively promoting chemically strengthened specialty glass for an even wider range of uses.www.agc.com/english/portal/index.htmlWEB(Note) For information on products and technology related to Higher Quality Display Devices & Communication, please refer to the AGC website.Main ProductsOTHER PRODUCTSGlass substratesfor display devicesGlass materials and componentsfor optical equipmentGlass materials and componentsfor storage devicesMaterials and componentsfor semiconductormanufacturing equipmentGlass substratesfor display devicesGlass materials and componentsfor optical equipmentGlass substratesfor display devicesSpecialty glass forchemical strengtheningHigher Quality Display Devices & CommunicationMaterials and technologies for improving the performance of devices in the rapidly evolving fields of telecommunications and imaging equipmentUltra-low thermalshrinkage glass substrateAN Wizus™ Self-adhesive glassfor optical bonding For MarketsChapter IAGC Report 201420AGC Report 201419Increased Surface Strength to Create the Unbreakable Smartphone!Specialty Glass for Chemical Strengthening1 Dragontrail™ XKEY PRODUCT1 Chemical reinforcement is a technique in which a sheet of plain glass is soaked in chemicals to chemically strengthen its surface. 2 As of March 20143 Compression stress values: Conventional Dragontrail™ can handle a maximum of 800Mpa, while the new Dragontrail™ X can handle up to 1GMpa.Due to the global spread of smartphones and other information terminals, the communications and imaging market is anticipated to expand even further. At the same time, user needs are growing more sophisticated and diverse, with requests for thinner and lighter devices and higher image definition. In addition, the appearance of the 4K TV that surpasses conventional image resolution has created a demand for an even faster, larger capacity communications infrastructure.The AGC Group creates high-performance products that are able to respond promptly to these rapidly evolving markets and works to proactively develop new uses for them.Users require many different things from the touch panels on their smartphones. They want them to be unbreakable, impossible to scratch, thin and light, glossy and beautiful. The answer: Dragontrail™ specialty glass for chemical strengthening, which possesses excellent strength, scratch resistance, and surface texture. At present, it has so far been used over 300 models across 37 brands worldwide2.2014 saw the launch of Dragontrail™ X, a product whose surface strength is more than 30% stronger than that of the original Dragontrail™. This product, the strongest chemically strengthened glass in the world3, is contributing to the realization of mobile devices that are even harder to break.The AGC Group is proactively promoting chemically strengthened specialty glass for an even wider range of uses.www.agc.com/english/portal/index.htmlWEB(Note) For information on products and technology related to Higher Quality Display Devices & Communication, please refer to the AGC website.Main ProductsOTHER PRODUCTSGlass substratesfor display devicesGlass materials and componentsfor optical equipmentGlass materials and componentsfor storage devicesMaterials and componentsfor semiconductormanufacturing equipmentGlass substratesfor display devicesGlass materials and componentsfor optical equipmentGlass substratesfor display devicesSpecialty glass forchemical strengtheningHigher Quality Display Devices & CommunicationMaterials and technologies for improving the performance of devices in the rapidly evolving fields of telecommunications and imaging equipmentUltra-low thermalshrinkage glass substrateAN Wizus™ Self-adhesive glassfor optical bonding For MarketsChapter IAGC Report 201420AGC Report 201419ATTOCH™ ExistingsashExistingglassWhile people are becoming increasingly conscious of energy conservation, indoor temperature control in office buildings and shops still depends largely on air conditioning. Window glass replacement in office buildings and shops is difficult, and solar control film is often used as an alternative solution. This solar control film, however, blocks not only the summer heat but also the sunlight in winter. In addition, it does not have sufficient thermal insulation to keep warm air inside in colder seasons.ATTOCH™, an energy-saving glass from the AGC Group displays excellent energy conservation performance all year round. The product successfully reduces air conditioner energy use by approximately 33%, thereby lowering air conditioning energy costs by approximately 570,000 yen annually.1Installation is very simple: energy-saving glass is simply attached to the inside of the existing window glass. There is no need to dispose of the glass and scaffolding is also unnecessary. Therefore—taking just 30 minutes to an hour per window—this simple installation reduces total costs. In addition, ATTOCH™ does not need to be replaced like solar control film, and it can help to reduce waste.In recognition of these functions, ATTOCH™ was award-ed “The Energy Conservation Center Chairman’s Prize” in the FY2013 Energy Conservation Grand Prize and the 2013 Special Award in the ECHO CITY Product Grand Prize.1 When architectural conditions are as follows (Location: Tokyo).Building width: 15m / Length: 15m / Number of floors: 6 / Floor area of standard floor: 225m2 / Main direction: South / Standard story height: 3.6m / Glass surface area of entire building: 432m2KEY PRODUCTIn addition to environmental issues such as climate change, global interest in energy conservation and the use of clean energy from the perspective of securing energy resources is increasing. The AGC Group sees business opportunities in the resolution of urgent environmental issues, and is creating the value society seeks through its products.In specific terms, the Group is focusing on developing products on two fronts: Low-energy products that contribute to reductions in home and office power use, and energy-creating products that contribute to the spread of solar power generation and eco-friendly vehicles.www.agc.com/english/portal/index.htmlWEB(Note) For information on products and technology related to Clean & Green Energy, please refer to the AGC website.OTHER PRODUCTSMaking Offices Comfortable Year-Round with Every-Saving Glassfor Easy and Low-Cost Renovation!ATTOCH™ for Easy Energy-Saving RenovationFuel cell-related materialsEco-friendly vehicles-relatedmaterials and components(cid:127)Glass-ceramics substrates forhigh-power LED lighting(cid:127)Materials for lithium-ion battery(cid:127)Fuel cell-related materialsLow-E doubleglazing unitGlass for solar power systemsChemically strengthenedspecialty glassClean & Green EnergyMaterials and technologies designed to save energy and make it cleanerMain ProductsUltra-light solarcell moduleLightjoule™Chemically strengthenedspecialty glassLeoflex™For MarketsChapter IAGC Report 201422AGC Report 201421ATTOCH™ ExistingsashExistingglassWhile people are becoming increasingly conscious of energy conservation, indoor temperature control in office buildings and shops still depends largely on air conditioning. Window glass replacement in office buildings and shops is difficult, and solar control film is often used as an alternative solution. This solar control film, however, blocks not only the summer heat but also the sunlight in winter. In addition, it does not have sufficient thermal insulation to keep warm air inside in colder seasons.ATTOCH™, an energy-saving glass from the AGC Group displays excellent energy conservation performance all year round. The product successfully reduces air conditioner energy use by approximately 33%, thereby lowering air conditioning energy costs by approximately 570,000 yen annually.1Installation is very simple: energy-saving glass is simply attached to the inside of the existing window glass. There is no need to dispose of the glass and scaffolding is also unnecessary. Therefore—taking just 30 minutes to an hour per window—this simple installation reduces total costs. In addition, ATTOCH™ does not need to be replaced like solar control film, and it can help to reduce waste.In recognition of these functions, ATTOCH™ was award-ed “The Energy Conservation Center Chairman’s Prize” in the FY2013 Energy Conservation Grand Prize and the 2013 Special Award in the ECHO CITY Product Grand Prize.1 When architectural conditions are as follows (Location: Tokyo).Building width: 15m / Length: 15m / Number of floors: 6 / Floor area of standard floor: 225m2 / Main direction: South / Standard story height: 3.6m / Glass surface area of entire building: 432m2KEY PRODUCTIn addition to environmental issues such as climate change, global interest in energy conservation and the use of clean energy from the perspective of securing energy resources is increasing. The AGC Group sees business opportunities in the resolution of urgent environmental issues, and is creating the value society seeks through its products.In specific terms, the Group is focusing on developing products on two fronts: Low-energy products that contribute to reductions in home and office power use, and energy-creating products that contribute to the spread of solar power generation and eco-friendly vehicles.www.agc.com/english/portal/index.htmlWEB(Note) For information on products and technology related to Clean & Green Energy, please refer to the AGC website.OTHER PRODUCTSMaking Offices Comfortable Year-Round with Every-Saving Glassfor Easy and Low-Cost Renovation!ATTOCH™ for Easy Energy-Saving RenovationFuel cell-related materialsEco-friendly vehicles-relatedmaterials and components(cid:127)Glass-ceramics substrates forhigh-power LED lighting(cid:127)Materials for lithium-ion battery(cid:127)Fuel cell-related materialsLow-E doubleglazing unitGlass for solar power systemsChemically strengthenedspecialty glassClean & Green EnergyMaterials and technologies designed to save energy and make it cleanerMain ProductsUltra-light solarcell moduleLightjoule™Chemically strengthenedspecialty glassLeoflex™For MarketsChapter IAGC Report 201422AGC Report 201421Japan & Asiat-CO22,140,000t-CO27,070,000Europet-CO2662,000The AmericasMaterial Issues for Environmental Management1Initiatives regarding energy issuesMaterial Issue 1Prevention ofpollution Material Issue 2Sustainableresource useMaterial Issue 3Reduction of energythrough environment-related productsReduction of energyinvolved inproduction activitiesGreenhouse Gas Emissions by Region30%19%15%www.agc.com/csr/env/index.htmlWEB1 For detailed information on the selection process for material issues and progress on each issue, visit the CSR website.In order to reduce the amount of energy consumed in its production activities, the AGC Group is working on various measures such as changing the fuel source to natural gas and achieving greater energy efficiency through improved production processes. In particular, the process of melting raw materials is very energy-intensive, so the Group is working to develop new technology while also promoting the practical application of in-flight melting technology, a technique which utilizes plasma or flame produced by oxygen combustion.In addition, the Group is implementing global efforts to reduce the amount of energy used for utilities, such as electricity and steam used in production processes. As a corporation that contributes to the creation of a sustain-able society, the AGC Group develops and promotes widespread use of environment-related products which will lead to reductions in the environmental load of society as a whole. The Group sees these efforts as a business opportu-nity, and in order to accelerate this measure, it has set a goal of increasing its environment-related sales ratio to 19% by 2015, and to 30% by 2020. In 2013, the environment-related sales ratio stood at 15%.In specific terms, the AGC Group has an extensive lineup of products such as energy-saving architectural glass, in addition to components used in solar power generation and eco-friendly vehicles. The Group is also working to release information that will lead to the further spread of its environment-related products through efforts that include, among others, making the effects of these products visible by calculating the lifecycle CO2 (Note 2) for each product.Slogan for CO2 emissions avoided throughenvironment-related productsEnvironment-Related Sales Ratio (Actual results)2013 (Target)2015 (Target)2020For the EarthChapter IIPositioning the environment as a top management priority, the AGC Group states in its “Aspirations for 2020” its intent to consider the environment, not only in its products, but in its production processes and business activities as a whole. Specifically, the Group identifies initiatives regarding energy issues, preven-tion of pollution and sustainable resource use as mate-rial issues, and is promoting a range of measures.In terms of initiatives regarding energy issues, the AGC Group works to reduce the energy involved in its production activities. At the same time, the Group contributes to reduced energy consumption for society as a whole through environment-related products that facilitate energy conservation and energy creation, while at the same time seeks out business opportunities in the growing global response to the environment.Focusing on the Business Opportunities in “AGC’s responsibility as Part of Energy-Intensive Industry” and in “Responses to Low-Energy and Energy-Creation Needs”Reduction of Energy Consumption Involved in Production ActivitiesWorking from the Perspective of Both Production Facilities and UtilitiesEnergy Reduction throughEnvironment-Related ProductsFinding Business Opportunities Amongst the Growing Need for Energy Conservation and Energy CreationActivity highlight p. 25Activity highlight p. 27(Note 2) CO2 emissions generated throughout the lifecycle of a product, from the procurement of raw materials through manufacture, sales, logistics and use to disposal or recyclingThe AGC Group, through its energy-saving and energy-creating products, will enable avoidance of over six times AGC Group’s own annual CO2 emissions in 2020.AGC Report 201424AGC Report 201423Japan & Asiat-CO22,140,000t-CO27,070,000Europet-CO2662,000The AmericasMaterial Issues for Environmental Management1Initiatives regarding energy issuesMaterial Issue 1Prevention ofpollution Material Issue 2Sustainableresource useMaterial Issue 3Reduction of energythrough environment-related productsReduction of energyinvolved inproduction activitiesGreenhouse Gas Emissions by Region30%19%15%www.agc.com/csr/env/index.htmlWEB1 For detailed information on the selection process for material issues and progress on each issue, visit the CSR website.In order to reduce the amount of energy consumed in its production activities, the AGC Group is working on various measures such as changing the fuel source to natural gas and achieving greater energy efficiency through improved production processes. In particular, the process of melting raw materials is very energy-intensive, so the Group is working to develop new technology while also promoting the practical application of in-flight melting technology, a technique which utilizes plasma or flame produced by oxygen combustion.In addition, the Group is implementing global efforts to reduce the amount of energy used for utilities, such as electricity and steam used in production processes. As a corporation that contributes to the creation of a sustain-able society, the AGC Group develops and promotes widespread use of environment-related products which will lead to reductions in the environmental load of society as a whole. The Group sees these efforts as a business opportu-nity, and in order to accelerate this measure, it has set a goal of increasing its environment-related sales ratio to 19% by 2015, and to 30% by 2020. In 2013, the environment-related sales ratio stood at 15%.In specific terms, the AGC Group has an extensive lineup of products such as energy-saving architectural glass, in addition to components used in solar power generation and eco-friendly vehicles. The Group is also working to release information that will lead to the further spread of its environment-related products through efforts that include, among others, making the effects of these products visible by calculating the lifecycle CO2 (Note 2) for each product.Slogan for CO2 emissions avoided throughenvironment-related productsEnvironment-Related Sales Ratio (Actual results)2013 (Target)2015 (Target)2020For the EarthChapter IIPositioning the environment as a top management priority, the AGC Group states in its “Aspirations for 2020” its intent to consider the environment, not only in its products, but in its production processes and business activities as a whole. Specifically, the Group identifies initiatives regarding energy issues, preven-tion of pollution and sustainable resource use as mate-rial issues, and is promoting a range of measures.In terms of initiatives regarding energy issues, the AGC Group works to reduce the energy involved in its production activities. At the same time, the Group contributes to reduced energy consumption for society as a whole through environment-related products that facilitate energy conservation and energy creation, while at the same time seeks out business opportunities in the growing global response to the environment.Focusing on the Business Opportunities in “AGC’s responsibility as Part of Energy-Intensive Industry” and in “Responses to Low-Energy and Energy-Creation Needs”Reduction of Energy Consumption Involved in Production ActivitiesWorking from the Perspective of Both Production Facilities and UtilitiesEnergy Reduction throughEnvironment-Related ProductsFinding Business Opportunities Amongst the Growing Need for Energy Conservation and Energy CreationActivity highlight p. 25Activity highlight p. 27(Note 2) CO2 emissions generated throughout the lifecycle of a product, from the procurement of raw materials through manufacture, sales, logistics and use to disposal or recyclingThe AGC Group, through its energy-saving and energy-creating products, will enable avoidance of over six times AGC Group’s own annual CO2 emissions in 2020.AGC Report 201424AGC Report 2014232015201420132012201110070Index(FY)Target8.5%reduction15.6%reductionAsiaBrazilSão PauloChinaKoreaIndonesiaSingaporeTaiwanPhilippinesThailandSince 2009, the AGC Group has been working to reduce the amount of energy associated with its use of utilities, such as electricity and steam.The Group implemented energy conservation assessment at each of its production bases in Japan and promoted updates and improvements to equipment and energy conservation measures. In 2012, by encour-aging information sharing between plants and horizon-tally developing countermeasures, the Group achieved its target of an 8.5% reduction from the previous year.In fiscal 2013, in addition to setting a new 3-year target of reducing utility-related energy use by 30%1 by the end of 2015, the Group expanded its activities and scope. Energy conservation measures for existing equipment and the incorporation of energy conserva-tion measures for new equipment from time of introduc-tion resulted in a reduction of 15.6% from the previous fiscal year.In fiscal 2014, the Group extended the numerical targets it had used in Japan to its Asian production bases and has begun to conduct quantitative evaluations. The Group is also proactively sharing its measures in Japan and other Asian countries with Europe and North America and is working to develop them horizontally.In the future, the AGC Group will continue working to reduce the environmental impact of the Group as a whole by globally expanding the energy conservation technology it has cultivated up to the present.In order to respond to rising infrastructure demands in Asia, the AGC Group is increasing the production capacity of its local Glass and Chemicals businesses. As it does, it also works to reduce its local environmental impact to fulfill its social responsibilities as an environmentally advanced company.In China, for example, at a plant that is currently under construction and scheduled to begin mass production in 2015, the Group has included measures promoted by previ-ous energy conservation assessment for air conditioning and lighting and fully incorporated its energy conservation tech-nology into the new production line, resulting in a plant that will realize excellent energy conservation performance from the very beginning of operations.In October 2013, AGC Glass Brazil began full production in the Brazilian state of São Paulo. This plant has been built using various advanced environmental technologies, including energy conservation, exhaust gas treatment and low water-use technology, and in doing so became the glass plant with the lowest environmental impact in South America.In addition, consideration was extended to the ecosys-tem in the vicinity of the plant. Beginning in 2011, the AGC Group joined the local government to implement a revegeta-tion and wildlife protection project. Emphasis was placed on fauna resource recovery, on capturing wildlife and relocating it to safe areas, and on keeping deforestation to a minimum and maintaining soil permeability and water quality. The approximately 33,000 trees that were removed during con-struction are being replanted in other areas.1 Relative to fiscal 2012(Note) Applies to main Japanese pro-duction bases.Reducing Energy Consumptionin Production ActivitiesThe Goal: A 30% Reduction in Utility-Related Energy UseIngenuity in Energy ConservationGoes GlobalFor the EarthChapter IIIn AsiaTrends in Utility-Related Energy UseActivity Highlight 1Leading Energy Conservation Technology Responds to the Trust and Expectations of Asian SocietiesIn BrazilState-of-the-art Green Plant Begins Operationsin BrazilAGC Report 201426AGC Report 2014252015201420132012201110070Index(FY)Target8.5%reduction15.6%reductionAsiaBrazilSão PauloChinaKoreaIndonesiaSingaporeTaiwanPhilippinesThailandSince 2009, the AGC Group has been working to reduce the amount of energy associated with its use of utilities, such as electricity and steam.The Group implemented energy conservation assessment at each of its production bases in Japan and promoted updates and improvements to equipment and energy conservation measures. In 2012, by encour-aging information sharing between plants and horizon-tally developing countermeasures, the Group achieved its target of an 8.5% reduction from the previous year.In fiscal 2013, in addition to setting a new 3-year target of reducing utility-related energy use by 30%1 by the end of 2015, the Group expanded its activities and scope. Energy conservation measures for existing equipment and the incorporation of energy conserva-tion measures for new equipment from time of introduc-tion resulted in a reduction of 15.6% from the previous fiscal year.In fiscal 2014, the Group extended the numerical targets it had used in Japan to its Asian production bases and has begun to conduct quantitative evaluations. The Group is also proactively sharing its measures in Japan and other Asian countries with Europe and North America and is working to develop them horizontally.In the future, the AGC Group will continue working to reduce the environmental impact of the Group as a whole by globally expanding the energy conservation technology it has cultivated up to the present.In order to respond to rising infrastructure demands in Asia, the AGC Group is increasing the production capacity of its local Glass and Chemicals businesses. As it does, it also works to reduce its local environmental impact to fulfill its social responsibilities as an environmentally advanced company.In China, for example, at a plant that is currently under construction and scheduled to begin mass production in 2015, the Group has included measures promoted by previ-ous energy conservation assessment for air conditioning and lighting and fully incorporated its energy conservation tech-nology into the new production line, resulting in a plant that will realize excellent energy conservation performance from the very beginning of operations.In October 2013, AGC Glass Brazil began full production in the Brazilian state of São Paulo. This plant has been built using various advanced environmental technologies, including energy conservation, exhaust gas treatment and low water-use technology, and in doing so became the glass plant with the lowest environmental impact in South America.In addition, consideration was extended to the ecosys-tem in the vicinity of the plant. Beginning in 2011, the AGC Group joined the local government to implement a revegeta-tion and wildlife protection project. Emphasis was placed on fauna resource recovery, on capturing wildlife and relocating it to safe areas, and on keeping deforestation to a minimum and maintaining soil permeability and water quality. The approximately 33,000 trees that were removed during con-struction are being replanted in other areas.1 Relative to fiscal 2012(Note) Applies to main Japanese pro-duction bases.Reducing Energy Consumptionin Production ActivitiesThe Goal: A 30% Reduction in Utility-Related Energy UseIngenuity in Energy ConservationGoes GlobalFor the EarthChapter IIIn AsiaTrends in Utility-Related Energy UseActivity Highlight 1Leading Energy Conservation Technology Responds to the Trust and Expectations of Asian SocietiesIn BrazilState-of-the-art Green Plant Begins Operationsin BrazilAGC Report 201426AGC Report 201425Six-fold 8 to 9 timesApprox.CO2 emissionsin 20202 CO2 reductionthrough energy-saving andenergy-creating products3reductionreduction13,000,000 Approx.tons80,000,000Approx.tonsSpecial metal film Dry intermediatelayerthat selectively permits orreflects light and heatSpacerAbsorbentmaterialSealing materialCO2 emissions1/1,300Approx.GWP (Global Warming Potential)1234yf1/6Approx.AMOLEATM40%Approx.reductionEnergy(as compared to conventional products)Low-E double glazing repels the heat of summer through the power of metal coating applied onto the glass. In addi-tion, the layer of air between the two panes raises heat effi-ciency in winter and keeps dew condensation from forming. These heat insulating and heat shielding effects dramatically increase heating and cooling efficiency, making it possible to cut annual air-condition-ing cost by 1/3 (compared to single-paned windows). When comparing CO2 emis-sions over the entire lifecycle of the product from manu-facture to use, Low-E double glazing has an emission reduction effect between 8 and 9 times greater than that of conventional products.Caustic soda is a basic industrial chemical that is indispens-able to various industries, such as synthetic fibers, paper and pulp. The fluoropolymer ion-exchange membrane Flemion™ is a core component of the ion-exchange membrane process, a caustic soda manufacturing method. In comparison to the conventional mercury process, this process reduces energy usage by approximately 40%, in addition to not using any toxic substances. At present, the AGC Group has developed and is selling Flemion F-8080™, a new product that con-sumes even less electricity than the standard Flemion™. The Group has become the first company in the world to achieve a total conversion to the ion-exchange membrane method in all its caustic soda production bases. In the future, it plans to promote the spread of this method to fast-growing countries through mecha-nisms such as the binational offset credit system4 whose systematic implementa-tion is anticipated.The glass industry is an energy-intensive industry, account-ing for approximately 1% of the energy consumption of the entire manufacturing industry (in Japan). Conscious of its own environmental load, the AGC Group is working to develop and supply environment-related products that can contribute to energy conservation and creation, in order to make a contribution that outweighs its environ-mental impact. To spur on this initiative, the Group has established the statement “The AGC Group, through its energy-saving and energy-creating products, will enable avoidance of over six times AGC Group’s own annual CO2 emissions in 2020” as its slogan in fiscal 2014.By current estimates, the amount of CO2 reduction the Group will need to achieve in fiscal 2020 is approxi-mately 80,000,000 tons annually, an amount equivalent to the annual energy use1 of nearly 16,000,000 average households.In order to achieve this goal, the AGC Group is working to develop energy-saving and energy-creating environment-related products, and to further augment proposals conducted in cooperation with its sales partners.2 The AGC Group’s estimated annual CO2 emissions in 20203 The amount of CO2 reduction if the energy-saving and energy-creating products manufactured in 2020 are used to the end of their useful lives.4 A mechanism by which Japan’s contribution to the effect realized through fast-growing countries’ greenhouse gas reduction measures is quantitatively evaluated by both countries and used to achieve Japan’s reduction targets.Hydrofluorocarbons (HFC) are used as refrigerants in air con-ditioners and cars. However, since their global warming potential (GWP) is high, their use is being increasingly restricted in Japan, Europe, North America, and the rest of the world. The AGC Group is the world’s first company to establish the production technology for the next-generation automotive refrigerant 1234yf, one that has an extremely low environmental load with a GWP that’s equal to or less than 1/1300 the GWP of conventional products5. In January 2014, the AGC Group announced that it would supply the product to the US company Honeywell. In addition, in March 2014, the Group developed AMOLEATM, a new refrigerant for air conditioners whose performance is the same as con-ventional products6, but whose GWP has been lowered to approximately 1/6. Commercial production is expected to begin in 2016.5 As compared to the automotive refrigerant 134a6 As compared to HFC-410A1 Annual CO2 emissions for one household: Approx. 5 tons (fiscal 2011)Source: Greenhouse Gas Inventory Office of Japanhttp://www.jccca.org/chart/chart04_06.htmlAGC’s Aspirations for 2020 regarding CO2Emissions Reduction Energy Reduction throughEnvironment-Related ProductsTowards the Realization of “Low-Energy Contributions” Equaling Six Times Its Own Energy Use in 2020AGC Group to Enhance Its Energy-Savingand Energy-Creating ProductsFor the EarthChapter IIEnergy-Saving Architectural Glass Creates Comfortable, Low-Energy SpacesFlemion™: A Fluoropolymer Ion-Exchange Membrane thatRealizes Energy Savings in Caustic Soda Production1234yf and AMOLEA™: Low-Environmental Impact Refrigerants with Reduced Influence on Climate ChangeActivity Highlight 2AGC Report 201428AGC Report 201427Six-fold 8 to 9 timesApprox.CO2 emissionsin 20202 CO2 reductionthrough energy-saving andenergy-creating products3reductionreduction13,000,000 Approx.tons80,000,000Approx.tonsSpecial metal film Dry intermediatelayerthat selectively permits orreflects light and heatSpacerAbsorbentmaterialSealing materialCO2 emissions1/1,300Approx.GWP (Global Warming Potential)1234yf1/6Approx.AMOLEATM40%Approx.reductionEnergy(as compared to conventional products)Low-E double glazing repels the heat of summer through the power of metal coating applied onto the glass. In addi-tion, the layer of air between the two panes raises heat effi-ciency in winter and keeps dew condensation from forming. These heat insulating and heat shielding effects dramatically increase heating and cooling efficiency, making it possible to cut annual air-condition-ing cost by 1/3 (compared to single-paned windows). When comparing CO2 emis-sions over the entire lifecycle of the product from manu-facture to use, Low-E double glazing has an emission reduction effect between 8 and 9 times greater than that of conventional products.Caustic soda is a basic industrial chemical that is indispens-able to various industries, such as synthetic fibers, paper and pulp. The fluoropolymer ion-exchange membrane Flemion™ is a core component of the ion-exchange membrane process, a caustic soda manufacturing method. In comparison to the conventional mercury process, this process reduces energy usage by approximately 40%, in addition to not using any toxic substances. At present, the AGC Group has developed and is selling Flemion F-8080™, a new product that con-sumes even less electricity than the standard Flemion™. The Group has become the first company in the world to achieve a total conversion to the ion-exchange membrane method in all its caustic soda production bases. In the future, it plans to promote the spread of this method to fast-growing countries through mecha-nisms such as the binational offset credit system4 whose systematic implementa-tion is anticipated.The glass industry is an energy-intensive industry, account-ing for approximately 1% of the energy consumption of the entire manufacturing industry (in Japan). Conscious of its own environmental load, the AGC Group is working to develop and supply environment-related products that can contribute to energy conservation and creation, in order to make a contribution that outweighs its environ-mental impact. To spur on this initiative, the Group has established the statement “The AGC Group, through its energy-saving and energy-creating products, will enable avoidance of over six times AGC Group’s own annual CO2 emissions in 2020” as its slogan in fiscal 2014.By current estimates, the amount of CO2 reduction the Group will need to achieve in fiscal 2020 is approxi-mately 80,000,000 tons annually, an amount equivalent to the annual energy use1 of nearly 16,000,000 average households.In order to achieve this goal, the AGC Group is working to develop energy-saving and energy-creating environment-related products, and to further augment proposals conducted in cooperation with its sales partners.2 The AGC Group’s estimated annual CO2 emissions in 20203 The amount of CO2 reduction if the energy-saving and energy-creating products manufactured in 2020 are used to the end of their useful lives.4 A mechanism by which Japan’s contribution to the effect realized through fast-growing countries’ greenhouse gas reduction measures is quantitatively evaluated by both countries and used to achieve Japan’s reduction targets.Hydrofluorocarbons (HFC) are used as refrigerants in air con-ditioners and cars. However, since their global warming potential (GWP) is high, their use is being increasingly restricted in Japan, Europe, North America, and the rest of the world. The AGC Group is the world’s first company to establish the production technology for the next-generation automotive refrigerant 1234yf, one that has an extremely low environmental load with a GWP that’s equal to or less than 1/1300 the GWP of conventional products5. In January 2014, the AGC Group announced that it would supply the product to the US company Honeywell. In addition, in March 2014, the Group developed AMOLEATM, a new refrigerant for air conditioners whose performance is the same as con-ventional products6, but whose GWP has been lowered to approximately 1/6. Commercial production is expected to begin in 2016.5 As compared to the automotive refrigerant 134a6 As compared to HFC-410A1 Annual CO2 emissions for one household: Approx. 5 tons (fiscal 2011)Source: Greenhouse Gas Inventory Office of Japanhttp://www.jccca.org/chart/chart04_06.htmlAGC’s Aspirations for 2020 regarding CO2Emissions Reduction Energy Reduction throughEnvironment-Related ProductsTowards the Realization of “Low-Energy Contributions” Equaling Six Times Its Own Energy Use in 2020AGC Group to Enhance Its Energy-Savingand Energy-Creating ProductsFor the EarthChapter IIEnergy-Saving Architectural Glass Creates Comfortable, Low-Energy SpacesFlemion™: A Fluoropolymer Ion-Exchange Membrane thatRealizes Energy Savings in Caustic Soda Production1234yf and AMOLEA™: Low-Environmental Impact Refrigerants with Reduced Influence on Climate ChangeActivity Highlight 2AGC Report 201428AGC Report 201427Material Issues for Human Resources and OccupationalSafety Management1Occupationalhealth andsafetyMaterial Issue 2Creation ofpleasant workenvironmentsMaterial Issue 3HumanresourcedevelopmentMaterial Issue 1In March 2014, Asahi Glass was selected as a Tokyo Stock Exchange (TSE) Nadeshiko Brand2 for the second year in a row. The Company was selected in recognition of the fact that it set and has achieved a goal of recruiting women as 20% of its graduate recruits for career-track positions, and for its efforts to create a system and environ-ment in which women can work without worry at any life stage.can work safely. Through these measures, the power of each individual employee will be transformed into growth for the Group.www.agc.com/csr/employee/index.htmlWEBThe driving force behind the growth of the AGC Group is none other than its 51,000 employees in over 30 countries and regions. In its management policy, , the Group gives the concepts Our People Are Our Strength and No Production Without Safety as the backbones of its business activities (see page 16).In order to create an environment in which its diverse employees can reach their true potential, the AGC Group implements personnel management that emphasizes leadership, expertise, competence and motivation. At the same time, the Group focuses on providing secure environments in which employees The AGC Group considers the growth of each of its employ-ees to be the driving force that supports the growth of the entire Group. As this is so, the Group has established a training system through which employees can continuously grow, acquiring the techniques, knowledge and expertise necessary to their duties and roles. In positioning the augmentation of expertise and improvement of work ability as the system’s main purposes and constantly reviewing its content, the Group works to facilitate more effective growth.The AGC Group conducts its global safety management activities in accordance with two main policies. One is the reduction of occupational accident risk. The Group works with its business partners to devise preventative and corrective measures for occupational accidents and works to horizon-tally develop information and measures between plants. The second is improving the level of safety awareness. The Group conducts various education and training initiatives in order to raise employee sensitivity to occupational health and safety.In its Charter of Corporate Behavior, the AGC Group states that it will respect human rights, engage in management that takes the culture and customs of each country and region into consideration, respect the diversity, unique personalities and individuality of its people, and work to create pleasant workplaces without discrimination while forbidding forced labor, child labor, or any violation of human rights. Based on this mindset, the Group respects the diversity of its employ-ees and promotes the creation of pleasant workplaces.The AmericasJapan & AsiaEurope4,38614,70732,355Number of Group Employees by RegionFor PeopleChapter IIITransforming the Growth of Diverse Employees Worldwide into Growth for the AGC Group Human Resource DevelopmentPersonnel Development that Drives GrowthActivity highlight p. 31Occupational Health and SafetyTwo Mainstays: Risk Reduction andImproving AwarenessActivity highlight p. 33Creating Pleasant WorkplacesCreating Environments in whichEmployee Diversity is RespectedWomen’s Advancement Initiatives Result in 2nd Consecutive Nadeshiko Brand Selection1 For detailed information on the selection process for material issues and progress on each issue, visit the CSR website.2 Twenty-six companies listed on the first section of the Tokyo Stock Exchange were selected after being evaluated on their promotion of women’s participation and their return on equity (ROE).AGC Report 201430AGC Report 201429Material Issues for Human Resources and OccupationalSafety Management1Occupationalhealth andsafetyMaterial Issue 2Creation ofpleasant workenvironmentsMaterial Issue 3HumanresourcedevelopmentMaterial Issue 1In March 2014, Asahi Glass was selected as a Tokyo Stock Exchange (TSE) Nadeshiko Brand2 for the second year in a row. The Company was selected in recognition of the fact that it set and has achieved a goal of recruiting women as 20% of its graduate recruits for career-track positions, and for its efforts to create a system and environ-ment in which women can work without worry at any life stage.can work safely. Through these measures, the power of each individual employee will be transformed into growth for the Group.www.agc.com/csr/employee/index.htmlWEBThe driving force behind the growth of the AGC Group is none other than its 51,000 employees in over 30 countries and regions. In its management policy, , the Group gives the concepts Our People Are Our Strength and No Production Without Safety as the backbones of its business activities (see page 16).In order to create an environment in which its diverse employees can reach their true potential, the AGC Group implements personnel management that emphasizes leadership, expertise, competence and motivation. At the same time, the Group focuses on providing secure environments in which employees The AGC Group considers the growth of each of its employ-ees to be the driving force that supports the growth of the entire Group. As this is so, the Group has established a training system through which employees can continuously grow, acquiring the techniques, knowledge and expertise necessary to their duties and roles. In positioning the augmentation of expertise and improvement of work ability as the system’s main purposes and constantly reviewing its content, the Group works to facilitate more effective growth.The AGC Group conducts its global safety management activities in accordance with two main policies. One is the reduction of occupational accident risk. The Group works with its business partners to devise preventative and corrective measures for occupational accidents and works to horizon-tally develop information and measures between plants. The second is improving the level of safety awareness. The Group conducts various education and training initiatives in order to raise employee sensitivity to occupational health and safety.In its Charter of Corporate Behavior, the AGC Group states that it will respect human rights, engage in management that takes the culture and customs of each country and region into consideration, respect the diversity, unique personalities and individuality of its people, and work to create pleasant workplaces without discrimination while forbidding forced labor, child labor, or any violation of human rights. Based on this mindset, the Group respects the diversity of its employ-ees and promotes the creation of pleasant workplaces.The AmericasJapan & AsiaEurope4,38614,70732,355Number of Group Employees by RegionFor PeopleChapter IIITransforming the Growth of Diverse Employees Worldwide into Growth for the AGC Group Human Resource DevelopmentPersonnel Development that Drives GrowthActivity highlight p. 31Occupational Health and SafetyTwo Mainstays: Risk Reduction andImproving AwarenessActivity highlight p. 33Creating Pleasant WorkplacesCreating Environments in whichEmployee Diversity is RespectedWomen’s Advancement Initiatives Result in 2nd Consecutive Nadeshiko Brand Selection1 For detailed information on the selection process for material issues and progress on each issue, visit the CSR website.2 Twenty-six companies listed on the first section of the Tokyo Stock Exchange were selected after being evaluated on their promotion of women’s participation and their return on equity (ROE).AGC Report 201430AGC Report 201429Sales Procurement/PurchasingSkill EDivision ADivision BDivision CDivision DDivision ESkill DSkill CSkill BSkill AThe Three Functions of Skill MapCollaborations Between Employees with Different Skills8,300 employees registeredFabricationTechnologySimulationTechnologyMaterialDevelopmentSalesThe AGC Group introduced a unique personnel database, Skill Map, in fiscal 2010. This group-wide database is designed to promote communication and provide effective staffing as employees are registered by speciality. It enables the Group to “see” the skills held by employees in various divisions at various companies.As of the end of 2013, approximately 8,300 employees are registered in Skill Map in 26 technical categories and 13 sales/administrative categories. When beginning a new proj-ect, for example, Skill Map facilitates the creation of optimal teams as it shows which organization in which country employs personnel who have the necessary skills.In addition, the database allows at a glance to see which fields have sufficient personnel and which may not have enough in the future across the whole Group, facilitating strategic hiring and training of personnel in accordance with the growth strategy.Employees with common skills who work for different companies or divisions and so had no previous point of con-tact can also find each other and build networks. This cross-divisional network activity facilitates communication that crosses organizational and national boundaries and sim-ilar preexisting frameworks, making it possible to further develop skills and work to resolve problems from unprece-dented perspectives.Cross-divisional network activity provides opportunities for employees to exchange information and perform joint research with those who have skills in common but belong to different organizations and do not come into contact with each other in the course of their daily work. By posing ques-tions to each other and sharing their individual skills, employ-ees uncover clues to the resolution of problems and the cre-ation of new techniques.In addition, as the number of employees registered on Skill Map increases, cross-divisional network activity grows more active and collaborations between separate networks begin. In some fields, these collaborations have already begun, not only among employees with technical skills, but between employees with technical skills and those with sales or administrative skills. Unprecedented perspectives and ideas are resulting in new initiatives, such as, for example, a collaboration between the sales division and research & development division whose goal is to make better use of customer views in research & development.By making personnel exchange that crosses preexisting frameworks part of the AGC Group’s unique culture, the Group will generate new products and services that were never before possible.Optimal assembly ofproject teamsFunction 1Employment and hiring plansto secure future human resources(Strategic recruitmentand training)Function 2Exchange of ideas betweenemployees across divisionsand countries(Cross-divisionalnetwork activity)Function 3Human Resource DevelopmentCross-Divisional Network Activity through Skill Map Brings New ValueLearnings Generated byCross-Organizational InteractionFor PeopleChapter IIIActivity Highlight 1Skill Map: A Unique Personnel DatabaseCollaboration through Cross-divisional Network ActivityAGC Report 201432AGC Report 201431Sales Procurement/PurchasingSkill EDivision ADivision BDivision CDivision DDivision ESkill DSkill CSkill BSkill AThe Three Functions of Skill MapCollaborations Between Employees with Different Skills8,300 employees registeredFabricationTechnologySimulationTechnologyMaterialDevelopmentSalesThe AGC Group introduced a unique personnel database, Skill Map, in fiscal 2010. This group-wide database is designed to promote communication and provide effective staffing as employees are registered by speciality. It enables the Group to “see” the skills held by employees in various divisions at various companies.As of the end of 2013, approximately 8,300 employees are registered in Skill Map in 26 technical categories and 13 sales/administrative categories. When beginning a new proj-ect, for example, Skill Map facilitates the creation of optimal teams as it shows which organization in which country employs personnel who have the necessary skills.In addition, the database allows at a glance to see which fields have sufficient personnel and which may not have enough in the future across the whole Group, facilitating strategic hiring and training of personnel in accordance with the growth strategy.Employees with common skills who work for different companies or divisions and so had no previous point of con-tact can also find each other and build networks. This cross-divisional network activity facilitates communication that crosses organizational and national boundaries and sim-ilar preexisting frameworks, making it possible to further develop skills and work to resolve problems from unprece-dented perspectives.Cross-divisional network activity provides opportunities for employees to exchange information and perform joint research with those who have skills in common but belong to different organizations and do not come into contact with each other in the course of their daily work. By posing ques-tions to each other and sharing their individual skills, employ-ees uncover clues to the resolution of problems and the cre-ation of new techniques.In addition, as the number of employees registered on Skill Map increases, cross-divisional network activity grows more active and collaborations between separate networks begin. In some fields, these collaborations have already begun, not only among employees with technical skills, but between employees with technical skills and those with sales or administrative skills. Unprecedented perspectives and ideas are resulting in new initiatives, such as, for example, a collaboration between the sales division and research & development division whose goal is to make better use of customer views in research & development.By making personnel exchange that crosses preexisting frameworks part of the AGC Group’s unique culture, the Group will generate new products and services that were never before possible.Optimal assembly ofproject teamsFunction 1Employment and hiring plansto secure future human resources(Strategic recruitmentand training)Function 2Exchange of ideas betweenemployees across divisionsand countries(Cross-divisionalnetwork activity)Function 3Human Resource DevelopmentCross-Divisional Network Activity through Skill Map Brings New ValueLearnings Generated byCross-Organizational InteractionFor PeopleChapter IIIActivity Highlight 1Skill Map: A Unique Personnel DatabaseCollaboration through Cross-divisional Network ActivityAGC Report 201432AGC Report 201431Change in Occurrence of Fatal Accidents(AGC Group) Serious Accident Eradication Project20132012201120102009(FY)543210(Number)13210In April 2012, based on its health and safety policy, No Production Without Safety, the AGC Group launched the Serious Accident Eradication Project. The project aims to eliminate fatal or crippling occupational accidents and envi-ronmental or industrial safety and security accidents that could result in worker injuries and heavily affect the sur-rounding area.The AGC Group established subcommittees for occupa-tional accidents on four themes that are particularly high-risk across the Group: Forklifts, Palettes, Construction and Work with Equipment, and Caught and Involved. Preventative measures are being devised on a global, cross-divisional scale using unconventional approaches.In fiscal 2013, the Group surveyed each plant, closely examining the causes of accidents and latent risks, then for-mulated policies and guidelines to counteract them.In the future, these countermeasures will be imple-mented at production bases around the world and their full establishment encouraged.One major cause of occupational accidents at glass manufacturing sites is heavy equipment such as H-shaped palettes, large flat glass and wooden boxes—which can’t stand independent-ly—falling over. In order to prevent these types of accidents, the Pallet Working Group implemented a survey of the current situation at glass manufacturing plants in China, Thailand, Indonesia and the Philippines in the first half of fiscal 2013. Based on the results, the working group drew up AGC Group standards and shared them with each plant. These standards clarify rules to maintain safety by articulating details such as the safe angle of glass inclination when leaning large panes against something while in storage, and the specifications for belts used to stabilize palettes and glass.In the future, the Group will expand the scope of the standards and work to develop new measures, including improvement of the jigs used to hold glass during transport.Leaning storage of large flat glassIn 2013, AGC Flat Glass (Dalian) (AFD) received high marks in a Pallet Working Group survey with its preemptive and effective initiatives for accident preven-tion, such as establishing regulations for glass pack storage and safety loads for individual pallets.AGC Group standards for the storing of large flat glass consist of detailed and practical safety standards, and AFD has improved facilities and strengthened regulations for product management in the warehouse to meet strict compliance.AFD intends to further improve working site conditions in pursuit of greater safety with the Pallet Working Group.(Note) The number of AGC Group employees. The AGC Group collects data regarding occupational accidents, including those that occur at its business partners, and discloses detailed information on its CSR website.Serious AccidentEradicationProjectPallet Working Group InitiativeActivity ExampleClarifying Safety Standards Basedon Surveys of the Current Situation‘‘’’General Manager AGC Flat Glass (Dalian)Zhao BinTheme 1ForkliftsTheme 3Constructionand Workwith EquipmentTheme 2PalettesTheme 4Caught andInvolvedUpper left: A safety meeting held before work at PT Asahimas Flat Glass, Tbk. (Indonesia) Lower left: The manufacturing floor at the Bellefontaine Plant, AGC Automotive Americas Co. (United States)Upper right: The manufacturing floor at the Bellefontaine Plant, AGC Automotive Americas Co. (USA)Lower right: Safety patrol training (Japan)Occupational Health and SafetyGlobally Developing the Serious Accident Eradication ProjectCreating Safe WorkplacesFor PeopleChapter IIIActivity Highlight 2Eliminating Occupational Accidentswith the Pallet Working GroupAGC Report 201434AGC Report 201433Change in Occurrence of Fatal Accidents(AGC Group) Serious Accident Eradication Project20132012201120102009(FY)543210(Number)13210In April 2012, based on its health and safety policy, No Production Without Safety, the AGC Group launched the Serious Accident Eradication Project. The project aims to eliminate fatal or crippling occupational accidents and envi-ronmental or industrial safety and security accidents that could result in worker injuries and heavily affect the sur-rounding area.The AGC Group established subcommittees for occupa-tional accidents on four themes that are particularly high-risk across the Group: Forklifts, Palettes, Construction and Work with Equipment, and Caught and Involved. Preventative measures are being devised on a global, cross-divisional scale using unconventional approaches.In fiscal 2013, the Group surveyed each plant, closely examining the causes of accidents and latent risks, then for-mulated policies and guidelines to counteract them.In the future, these countermeasures will be imple-mented at production bases around the world and their full establishment encouraged.One major cause of occupational accidents at glass manufacturing sites is heavy equipment such as H-shaped palettes, large flat glass and wooden boxes—which can’t stand independent-ly—falling over. In order to prevent these types of accidents, the Pallet Working Group implemented a survey of the current situation at glass manufacturing plants in China, Thailand, Indonesia and the Philippines in the first half of fiscal 2013. Based on the results, the working group drew up AGC Group standards and shared them with each plant. These standards clarify rules to maintain safety by articulating details such as the safe angle of glass inclination when leaning large panes against something while in storage, and the specifications for belts used to stabilize palettes and glass.In the future, the Group will expand the scope of the standards and work to develop new measures, including improvement of the jigs used to hold glass during transport.Leaning storage of large flat glassIn 2013, AGC Flat Glass (Dalian) (AFD) received high marks in a Pallet Working Group survey with its preemptive and effective initiatives for accident preven-tion, such as establishing regulations for glass pack storage and safety loads for individual pallets.AGC Group standards for the storing of large flat glass consist of detailed and practical safety standards, and AFD has improved facilities and strengthened regulations for product management in the warehouse to meet strict compliance.AFD intends to further improve working site conditions in pursuit of greater safety with the Pallet Working Group.(Note) The number of AGC Group employees. The AGC Group collects data regarding occupational accidents, including those that occur at its business partners, and discloses detailed information on its CSR website.Serious AccidentEradicationProjectPallet Working Group InitiativeActivity ExampleClarifying Safety Standards Basedon Surveys of the Current Situation‘‘’’General Manager AGC Flat Glass (Dalian)Zhao BinTheme 1ForkliftsTheme 3Constructionand Workwith EquipmentTheme 2PalettesTheme 4Caught andInvolvedUpper left: A safety meeting held before work at PT Asahimas Flat Glass, Tbk. (Indonesia) Lower left: The manufacturing floor at the Bellefontaine Plant, AGC Automotive Americas Co. (United States)Upper right: The manufacturing floor at the Bellefontaine Plant, AGC Automotive Americas Co. (USA)Lower right: Safety patrol training (Japan)Occupational Health and SafetyGlobally Developing the Serious Accident Eradication ProjectCreating Safe WorkplacesFor PeopleChapter IIIActivity Highlight 2Eliminating Occupational Accidentswith the Pallet Working GroupAGC Report 201434AGC Report 201433Guided by the AGC Group Social Contribution Basic Policy, the AGC Group carries out activities for supporting communities around the world. The Group will promote activities meant to contribute to the resolution of social issues in fast-growing countries where the company operates.AGC Chemicals Europe (AGCCE) communi-cates the importance of environmental conser-vation to children by offering workshops on the environment and creating a sustainable society at four local elementary schools in partnership with a charity organization.AGC Flat Glass (Thailand) Public (AFT) is actively promoting its Open Kids Vision initiative, which includes efforts to improve the education of children in rural forested regions in collabora-tion with local residents, specialists and NGOs. Three AGC Group companies in South Korea are supporting the development of children by donating books to three local elementary schools. The companies also held a book report contest to foster reading habits and make good use of the donated books.AGC Glass North America (AGNA) holds a contest and other activities every year for Earth Day on April 22 to increase awareness and appreciation of global environmental conser-vation among employees. This year awards for outstanding efforts were presented to individ-ual employees and several AGNA locations.The AGC Group has been supporting the develop-ment of local communities through the donation of glass in many countries and regions around the world.Since 2005, Asahi Glass has conducted its Glass Power Campaign to promote safety measures in local communities through the donation of safety glass. As part of this effort, safety glass that is designed to be effective in natural disasters, including typhoons, strong winds, and earthquakes, has been donated to 35 local governments thus far.Donations were made to aid Tsukuba City in Ibaraki Prefecture, which was severely damaged by a tornado in May 2013, and in February 2014, donations were made to aid Koshigaya City in Saitama Prefecture, which also saw tornado damage. All of the window glass was replaced with safety glass in each facility’s elementary school gymnasiums, which also function as designated evacuation shelters—making the gym a safer place during natural disasters.In addition, in 2013, 145 square meters of glass was donated to the police station and the temple in the vicinity of the PT Asahimas Flat Glass, Tbk (AMG) Cikampek Plant in Indonesia, increasing both comfort and convenience for the local residents in their use of these facilities and thereby contributing to the devel-opment of the local community.Additionally, to encourage a speedy recovery in affected areas, AGC Glass Europe donated 2000 square meters of glass to hospitals and educational institutions damaged by the February 2013 meteorite explosion in Russia’s Chelyabinsk Oblast, while also providing other support, such as augment-ing glass supply in the affec-ted areas.The Blue Planet Prize is an international environmental award that, as of 2013, has been presented a total of 22 times. It is presented annually to two individuals or organizations that make significant contributions in scientific research or applications and practices to solve global environmental problems.In 2013, the Blue Planet Prize was awarded to Dr.Taro Matsuno (Japan) for his superior leadership in meteorological research, forecasting and analysis and his great contributions to deepening world conscious-ness of global warming and climate change, and to Professor Daniel Sperling (US) for his comprehensive practical research regarding the influence of transpor-tation on the environment, covering everything from science and technology to political administration, and for the resulting major advances and guidelines gained by urban environmental measures.An awards ceremony was held on October 30 at Palace Hotel Tokyo, where the prize-winners were greeted by Their Imperial Highnesses Prince and Princess Akishino. The winners gave commemorative lectures on the following day, October 31, at the United Nations University in Tokyo.WEBContent publishedon the CSR websitewww.agc.com/english/csr/social/activity_2.htmlSupport for the Next Generationwww.agc.com/english/csr/social/activity_3.htmlHarmony with Local Communitieswww.agc.com/english/csr/social/activity_4.htmlNatural Environment ConservationRussiaIndonesiaJapanThailandSouth KoreaHighlights in Fiscal 2013The UKUSAIn the UKIn theUSAIn ThailandIn SouthKoreaIn JapanSocial ContributionActivity CasesAGC Group Social Contribution Basic Policy Priority AreasAGC Chemicals EuropeGlobalSocial Contribution ActivitiesEnvironmental Workshopsfor SchoolchildrenAGC Flat Glass (Thailand) PublicAFT Promotes Activitiesto Support the Sustainable Development of Local CommunitiesAsahi Glass Fine Techno Korea / HanwookTechno Glass / Asahi PD Glass KoreaBooks Donated,Book Report Competition HostedAGC Glass North AmericaAwarding Achievements on Earth DayAGC GroupSafety Glass Donation Activities Expanding WorldwideThe Asahi Glass FoundationTwo Individual Researchers Receive the Blue Planet Prize in 2013Glass donation for local temple (Indonesia)Dr. Yoshihiro Hayashi, Chairman of the Selection Committee makes an explanation about the selection process, and the recipients with their familiesSupport for the Next GenerationWe, as a creator of future value, support the development of children, who will carry the future, helping them to live out their dreams.Natural Environment ConservationWe, as a global enterprise, contribute to the solution of global environmental problems.Harmony with Local CommunitiesWe, as a member of the communities in which we operate, contribute to their sustainable development.AGC Report 201436AGC Report 201435Guided by the AGC Group Social Contribution Basic Policy, the AGC Group carries out activities for supporting communities around the world. The Group will promote activities meant to contribute to the resolution of social issues in fast-growing countries where the company operates.AGC Chemicals Europe (AGCCE) communi-cates the importance of environmental conser-vation to children by offering workshops on the environment and creating a sustainable society at four local elementary schools in partnership with a charity organization.AGC Flat Glass (Thailand) Public (AFT) is actively promoting its Open Kids Vision initiative, which includes efforts to improve the education of children in rural forested regions in collabora-tion with local residents, specialists and NGOs. Three AGC Group companies in South Korea are supporting the development of children by donating books to three local elementary schools. The companies also held a book report contest to foster reading habits and make good use of the donated books.AGC Glass North America (AGNA) holds a contest and other activities every year for Earth Day on April 22 to increase awareness and appreciation of global environmental conser-vation among employees. This year awards for outstanding efforts were presented to individ-ual employees and several AGNA locations.The AGC Group has been supporting the develop-ment of local communities through the donation of glass in many countries and regions around the world.Since 2005, Asahi Glass has conducted its Glass Power Campaign to promote safety measures in local communities through the donation of safety glass. As part of this effort, safety glass that is designed to be effective in natural disasters, including typhoons, strong winds, and earthquakes, has been donated to 35 local governments thus far.Donations were made to aid Tsukuba City in Ibaraki Prefecture, which was severely damaged by a tornado in May 2013, and in February 2014, donations were made to aid Koshigaya City in Saitama Prefecture, which also saw tornado damage. All of the window glass was replaced with safety glass in each facility’s elementary school gymnasiums, which also function as designated evacuation shelters—making the gym a safer place during natural disasters.In addition, in 2013, 145 square meters of glass was donated to the police station and the temple in the vicinity of the PT Asahimas Flat Glass, Tbk (AMG) Cikampek Plant in Indonesia, increasing both comfort and convenience for the local residents in their use of these facilities and thereby contributing to the devel-opment of the local community.Additionally, to encourage a speedy recovery in affected areas, AGC Glass Europe donated 2000 square meters of glass to hospitals and educational institutions damaged by the February 2013 meteorite explosion in Russia’s Chelyabinsk Oblast, while also providing other support, such as augment-ing glass supply in the affec-ted areas.The Blue Planet Prize is an international environmental award that, as of 2013, has been presented a total of 22 times. It is presented annually to two individuals or organizations that make significant contributions in scientific research or applications and practices to solve global environmental problems.In 2013, the Blue Planet Prize was awarded to Dr.Taro Matsuno (Japan) for his superior leadership in meteorological research, forecasting and analysis and his great contributions to deepening world conscious-ness of global warming and climate change, and to Professor Daniel Sperling (US) for his comprehensive practical research regarding the influence of transpor-tation on the environment, covering everything from science and technology to political administration, and for the resulting major advances and guidelines gained by urban environmental measures.An awards ceremony was held on October 30 at Palace Hotel Tokyo, where the prize-winners were greeted by Their Imperial Highnesses Prince and Princess Akishino. The winners gave commemorative lectures on the following day, October 31, at the United Nations University in Tokyo.WEBContent publishedon the CSR websitewww.agc.com/english/csr/social/activity_2.htmlSupport for the Next Generationwww.agc.com/english/csr/social/activity_3.htmlHarmony with Local Communitieswww.agc.com/english/csr/social/activity_4.htmlNatural Environment ConservationRussiaIndonesiaJapanThailandSouth KoreaHighlights in Fiscal 2013The UKUSAIn the UKIn theUSAIn ThailandIn SouthKoreaIn JapanSocial ContributionActivity CasesAGC Group Social Contribution Basic Policy Priority AreasAGC Chemicals EuropeGlobalSocial Contribution ActivitiesEnvironmental Workshopsfor SchoolchildrenAGC Flat Glass (Thailand) PublicAFT Promotes Activitiesto Support the Sustainable Development of Local CommunitiesAsahi Glass Fine Techno Korea / HanwookTechno Glass / Asahi PD Glass KoreaBooks Donated,Book Report Competition HostedAGC Glass North AmericaAwarding Achievements on Earth DayAGC GroupSafety Glass Donation Activities Expanding WorldwideThe Asahi Glass FoundationTwo Individual Researchers Receive the Blue Planet Prize in 2013Glass donation for local temple (Indonesia)Dr. Yoshihiro Hayashi, Chairman of the Selection Committee makes an explanation about the selection process, and the recipients with their familiesSupport for the Next GenerationWe, as a creator of future value, support the development of children, who will carry the future, helping them to live out their dreams.Natural Environment ConservationWe, as a global enterprise, contribute to the solution of global environmental problems.Harmony with Local CommunitiesWe, as a member of the communities in which we operate, contribute to their sustainable development.AGC Report 201436AGC Report 201435In accordance with its Corporate Policy over Internal Control, the AGC Group has established the AGC Group Enterprise Risk Management Basic Policies. Under these policies, the Group defines risks that could interfere with achieving its management objectives, and works to continu-ously enhance and improve the ability of its management to prevent risks from occurring and to respond to any risk that becomes manifest. The AGC Group formulated its business continuity plan (BCP) in fiscal 2008 to prepare for a large-scale accident or disaster. Additionally, in March 2011, the Group issued the AGC Group Business Continuity Plan (BCP) Development Guideline for use by divisions and business sites when formulating BCPs for each type of risk. The Group has been regularly reviewing and enhancing its BCPs based on its business continuity management (BCM) processes for continuously maintaining and improving BCPs. Since fiscal 2011, Asahi Glass’s headquarters has been conducting drills with unannounced emergency scenarios. Executive managers up to the Group CEO participate in the drills in an effort to raise the effectiveness of the BCPs and ensure that all employees are aware of proper procedures.In addition to the Group Code of Conduct, the AGC Group has formulated and implemented global guidelines for compli-ance with antitrust laws. Under the guidelines, the legitimacy of having a meeting with a competitor company must be thoroughly vetted first. As a means to minimize the necessity of such meetings, employees must gain approval to participate from a supervisor in advance, and then submit meeting minutes and a report to the supervisor after the meeting. The Group is also carrying out various other measures, such as providing training on compliance with antitrust laws in each region and organization, and conducting audits on the status of compliance with relevant guidelines.As a corporate enterprise that contributes to a sustainable society, the AGC Group is implementing initiatives designed to address human rights and labor practices, as well as to solve various environmental and social issues across the entire supply chain, including efforts with suppliers.The Group has emphasized the importance of corporate social responsibility in its AGC Group Purchasing Policy, revised in 2009, and is encouraging suppliers to incorporate the policy and cooperate in its enforcement.In 2013, the Group requested 244 of its main suppliers, including those from outside Japan, to cooperate in raising awareness of the AGC Group Purchasing Policy among their employees. In the same year, the Group commenced a survey of suppliers in Japan to determine their progress in implementing CSR activities. The survey is scheduled to be carried out in Europe and North America in 2014.Recognizing that intellectual property is a crucial asset for its business strategies, the AGC Group is working to create, protect, and enhance its intellectual property as a means of sharpening its competitive edge. While making the most of inventions created at its development facilities in Asia includ-ing Japan, as well as Europe and the United States, the Group makes sure to acquire intellectual property rights according to its business activities, utilizing relevant systems in various countries to acquire rights at an early stage. Looking ahead, the Group intends to be at the forefront of intellectual property activities, incorporating intellectual property strategies when determining the future direction of its business and R&D.Issued in 12 types covering 18 languages, the AGC Group Code of Conduct contains guidelines that all employees are required to follow in their work. The Group has also introduced a system in which employees periodically submit a personal certification to follow the AGC Group Code of Conduct. The purpose of the system is to give employees regular opportunities to renew their awareness of compliance and recognize its significance in the workplace and in their own work. In fiscal 2013, the certification was submitted by about 40,000 designated employees, equivalent to around 80% of all Group employees.As a means to raise awareness of its Code of Conduct globally, the AGC Group is stepping up its compliance train-ing programs for employees around the world. For example, the Group continually implements compliance-related online training (e-learning) in Japan, Europe and North America. The Group also proactively promotes training activ-ities intended to reinforce compli-ance in each country and region, including classroom training as well as the production of training mate-rials that include illustrations and quizzes, compliance pocket-sized cards, video materials for training and educational posters.The AGC Group has established several varieties of help line to serve as points of contact regarding compliance. As a general rule, help lines are set up at each company, while additional, common help lines are established in Europe, North America, China, Japan and South Korea.To encourage employees to use the help lines, the Group protects the anonymity of consultants and strictly forbids any act of retaliation against anyone who makes a report in good faith. When consultants offer their real names, efforts are made to facilitate effective two-way communication and provide feedback on the status and results of handling reported issues. In addition, the Group is making efforts to promote awareness of its help lines so that its members do not hesitate to use them if necessary.Investment inresearch andresultinginventionsProfits throughcommercializationAcquisitionof patentsCreationUtilizationProtectionPublic disclosureStimulate development by others(cid:127)Natural disasters such as earthquakes(cid:127)Environmental regulations(cid:127)Market conditions with regard to product demand(cid:127)Occupational accidents(cid:127)Product liability(cid:127)Procurement of resources(cid:127)Overseas business developmentExamples of risks managed by the AGC Group:Excerpt from the AGC Group Purchasing PolicyItems suppliers are requested to cooperate on when promoting CSR in the supply chain:1. Concentrate to supply products and services with good quality, considering Safety & Environment and Compliance to Laws & Regulations of each country.2 .Secure and proper managing of Proprietary information and Intellectual property.3. Not to be engaged to forced labor or child labor and never tolerate infringements of human rights.4. Make efforts to environment preservation and ensuring safety and security.5. Maintain adequate level of occupational health and safety.Exclusion of others within the scope of acquired rights (removal rights)Major investment for development and commercializationRisk ManagementComplianceIntellectual PropertyIn November 2013, Asahi Glass was recognized as one of the world’s 100 most innovative com-panies and organizations with a 2013 Top 100 Global Innovators Award, sponsored by Thomson Reuters. The award is presented to companies that have made major achievements in technological innovation in consider-ation of international trends related to intellectual property and patents. Evaluation criteria are organized into four cate-gories: patent success rate, internationalization, influence, and volume1. Among them, Asahi Glass received particularly high ratings in the internationalization and influence catego-ries. On the momentum of this award, the Company looks forward to pursuing innovative technologies, products, and services beyond conventional frameworks in the future.Risk Management / Compliance /Intellectual PropertyCycle of IntellectualProperty CreationWEBBusiness Continuity Management (BCM) StructureTaking Group-wide Measures to Ensure that Business Can Continue with the Establishment of a Business Continuity Plan Development Guideline and a Basic Policy to Cope with Natural DisastersRaising Awareness of ComplianceConducting Compliance Training in Each RegionCompliance with Antitrust LawsEnsuring Fair Transactions through Strict Adherence to Guidelines, Training and Audits Promoting Supply Chain ManagementCommencing a Survey of Suppliers’ CSR ActivitiesGlobally Establishing Help LinesCommitted to Promoting Awareness and Protecting CallersBCP training at Asahi Glass headquarters in October 2013The illustrated explanation of the Code of ConductSelected as One of the World’s 100 Most Innovative Companies and Organizations1 The criteria are based on the ratio of published applications to granted patents, the international breadth of the patent portfolio, the extent patents are cited, and the number of patents.Please visit the AGC website for more detailed information about risk management, compliance, and intellectual property. AGC Report 201438AGC Report 201437In accordance with its Corporate Policy over Internal Control, the AGC Group has established the AGC Group Enterprise Risk Management Basic Policies. Under these policies, the Group defines risks that could interfere with achieving its management objectives, and works to continu-ously enhance and improve the ability of its management to prevent risks from occurring and to respond to any risk that becomes manifest. The AGC Group formulated its business continuity plan (BCP) in fiscal 2008 to prepare for a large-scale accident or disaster. Additionally, in March 2011, the Group issued the AGC Group Business Continuity Plan (BCP) Development Guideline for use by divisions and business sites when formulating BCPs for each type of risk. The Group has been regularly reviewing and enhancing its BCPs based on its business continuity management (BCM) processes for continuously maintaining and improving BCPs. Since fiscal 2011, Asahi Glass’s headquarters has been conducting drills with unannounced emergency scenarios. Executive managers up to the Group CEO participate in the drills in an effort to raise the effectiveness of the BCPs and ensure that all employees are aware of proper procedures.In addition to the Group Code of Conduct, the AGC Group has formulated and implemented global guidelines for compli-ance with antitrust laws. Under the guidelines, the legitimacy of having a meeting with a competitor company must be thoroughly vetted first. As a means to minimize the necessity of such meetings, employees must gain approval to participate from a supervisor in advance, and then submit meeting minutes and a report to the supervisor after the meeting. The Group is also carrying out various other measures, such as providing training on compliance with antitrust laws in each region and organization, and conducting audits on the status of compliance with relevant guidelines.As a corporate enterprise that contributes to a sustainable society, the AGC Group is implementing initiatives designed to address human rights and labor practices, as well as to solve various environmental and social issues across the entire supply chain, including efforts with suppliers.The Group has emphasized the importance of corporate social responsibility in its AGC Group Purchasing Policy, revised in 2009, and is encouraging suppliers to incorporate the policy and cooperate in its enforcement.In 2013, the Group requested 244 of its main suppliers, including those from outside Japan, to cooperate in raising awareness of the AGC Group Purchasing Policy among their employees. In the same year, the Group commenced a survey of suppliers in Japan to determine their progress in implementing CSR activities. The survey is scheduled to be carried out in Europe and North America in 2014.Recognizing that intellectual property is a crucial asset for its business strategies, the AGC Group is working to create, protect, and enhance its intellectual property as a means of sharpening its competitive edge. While making the most of inventions created at its development facilities in Asia includ-ing Japan, as well as Europe and the United States, the Group makes sure to acquire intellectual property rights according to its business activities, utilizing relevant systems in various countries to acquire rights at an early stage. Looking ahead, the Group intends to be at the forefront of intellectual property activities, incorporating intellectual property strategies when determining the future direction of its business and R&D.Issued in 12 types covering 18 languages, the AGC Group Code of Conduct contains guidelines that all employees are required to follow in their work. The Group has also introduced a system in which employees periodically submit a personal certification to follow the AGC Group Code of Conduct. The purpose of the system is to give employees regular opportunities to renew their awareness of compliance and recognize its significance in the workplace and in their own work. In fiscal 2013, the certification was submitted by about 40,000 designated employees, equivalent to around 80% of all Group employees.As a means to raise awareness of its Code of Conduct globally, the AGC Group is stepping up its compliance train-ing programs for employees around the world. For example, the Group continually implements compliance-related online training (e-learning) in Japan, Europe and North America. The Group also proactively promotes training activ-ities intended to reinforce compli-ance in each country and region, including classroom training as well as the production of training mate-rials that include illustrations and quizzes, compliance pocket-sized cards, video materials for training and educational posters.The AGC Group has established several varieties of help line to serve as points of contact regarding compliance. As a general rule, help lines are set up at each company, while additional, common help lines are established in Europe, North America, China, Japan and South Korea.To encourage employees to use the help lines, the Group protects the anonymity of consultants and strictly forbids any act of retaliation against anyone who makes a report in good faith. When consultants offer their real names, efforts are made to facilitate effective two-way communication and provide feedback on the status and results of handling reported issues. In addition, the Group is making efforts to promote awareness of its help lines so that its members do not hesitate to use them if necessary.Investment inresearch andresultinginventionsProfits throughcommercializationAcquisitionof patentsCreationUtilizationProtectionPublic disclosureStimulate development by others(cid:127)Natural disasters such as earthquakes(cid:127)Environmental regulations(cid:127)Market conditions with regard to product demand(cid:127)Occupational accidents(cid:127)Product liability(cid:127)Procurement of resources(cid:127)Overseas business developmentExamples of risks managed by the AGC Group:Excerpt from the AGC Group Purchasing PolicyItems suppliers are requested to cooperate on when promoting CSR in the supply chain:1. Concentrate to supply products and services with good quality, considering Safety & Environment and Compliance to Laws & Regulations of each country.2 .Secure and proper managing of Proprietary information and Intellectual property.3. Not to be engaged to forced labor or child labor and never tolerate infringements of human rights.4. Make efforts to environment preservation and ensuring safety and security.5. Maintain adequate level of occupational health and safety.Exclusion of others within the scope of acquired rights (removal rights)Major investment for development and commercializationRisk ManagementComplianceIntellectual PropertyIn November 2013, Asahi Glass was recognized as one of the world’s 100 most innovative com-panies and organizations with a 2013 Top 100 Global Innovators Award, sponsored by Thomson Reuters. The award is presented to companies that have made major achievements in technological innovation in consider-ation of international trends related to intellectual property and patents. Evaluation criteria are organized into four cate-gories: patent success rate, internationalization, influence, and volume1. Among them, Asahi Glass received particularly high ratings in the internationalization and influence catego-ries. On the momentum of this award, the Company looks forward to pursuing innovative technologies, products, and services beyond conventional frameworks in the future.Risk Management / Compliance /Intellectual PropertyCycle of IntellectualProperty CreationWEBBusiness Continuity Management (BCM) StructureTaking Group-wide Measures to Ensure that Business Can Continue with the Establishment of a Business Continuity Plan Development Guideline and a Basic Policy to Cope with Natural DisastersRaising Awareness of ComplianceConducting Compliance Training in Each RegionCompliance with Antitrust LawsEnsuring Fair Transactions through Strict Adherence to Guidelines, Training and Audits Promoting Supply Chain ManagementCommencing a Survey of Suppliers’ CSR ActivitiesGlobally Establishing Help LinesCommitted to Promoting Awareness and Protecting CallersBCP training at Asahi Glass headquarters in October 2013The illustrated explanation of the Code of ConductSelected as One of the World’s 100 Most Innovative Companies and Organizations1 The criteria are based on the ratio of published applications to granted patents, the international breadth of the patent portfolio, the extent patents are cited, and the number of patents.Please visit the AGC website for more detailed information about risk management, compliance, and intellectual property. AGC Report 201438AGC Report 201437Asahi Glass employs corporate auditors who audit the performance of directors by attending important meetings such as management committee sessions and holding regular meetings with representative directors. The corpo-rate auditors also enhance the effectiveness of auditing by exchanging views and obtaining information concerning audit results and other matters in cooperation with account-ing auditors and the Internal Audit Office. As of March 28, 2014, Asahi Glass employed four corporate auditors in total, of which three were outside auditors. All three fulfill the requirements of the Companies Act, as well as standards for independence set forth by our company (see list at right). The outside auditors also fulfill the criteria for Independent Auditors set forth by securities listing regulations and the enforcement rules for the securities listing regulations.Asahi Glass established its Nominating and Compensation Committees in 2003 as voluntary advisory committees of the Board of Directors.Asahi Glass has set the following standards to ensure the independence of outside directors and outside corporate auditors.To enable outside directors to effectively oversee opera-tions based on adequate information about the Company, the Office of the President, which serves as the Secretariat of the Board of Directors, notifies them about Board of Directors meetings, distributes related materials before-hand, and provides full explanations of agenda items for the meetings in advance.Likewise, to enable outside corporate auditors to more effectively perform audits, the Secretariat of the Board of Corporate Auditors holds Board of Corporate Auditors meetings, and assists them in coordinating meetings with representative directors and accounting auditors.At Asahi Glass, the management execution function is the responsibility of executive officers below the president & CEO. As an advisory committee to the president & CEO, Asahi Glass establishes the Management Committees and discusses business management monitoring and decisions regarding management execution. A system of In-house Companies (quasi-subsidiaries within the Group) has been introduced and a global consolidated management system is adopted with regard to business execution. Much of the responsibility and authority for business execution has been delegated to the In-house Companies and the Strategic Business Unit.As stated in its basic policy concerning corporate governance, the AGC Group clearly separates the functions of oversight and execution of management, aiming to strengthen the management oversight function.By establishing a sound and effective system of corpo-rate governance, the Group ensures the appropriate super-vision of operations as it strives to realize highly efficient and transparent management.The Board of Directors of Asahi Glass comprises seven directors, including three outside directors1, and is tasked with approving the AGC Group’s basic policy and monitor-ing the execution of its management.Asahi Glass began employing outside directors in 2002 in an effort to enhance the management oversight function. The appointment of outside directors is carried out in accor-dance with requirements under the Companies Act of Japan as well as Asahi Glass’ own selection criteria designed to ensure director independence (see page 40 for details). The three outside directors also fulfill the criteria for Independent Directors set forth by the securities listing regulations and enforcement rules for the securities listing regulations.The term of office for outside directors is one year, during which they are expected to draw on their extensive experience in global corporate management to offer propos-als in the Board of Directors concerning general manage-ment from an independent standpoint.Committee Activities in Fiscal 2013Corporate GovernanceApproach to Corporate GovernanceFramework for Management OversightBoard of DirectorsImproving the Objectivity and Transparency of the Board of Directors by Incorporating Opinions and Scrutiny from Outside DirectorsFramework for Management ExecutionExecutive Officers Perform their Duties Promptly and Appropriately while Each In-house Company Flexibly Manages the BusinessBoard of Corporate AuditorsEnhancing the Effectiveness of Audits with Accounting Auditors and the Internal Audit Organization while Auditing the Performance of DirectorsFramework for Enhancing the Management Oversight FunctionEarly Establishment of Nominating and Compensation Committees in 2003Support System for Outside OfficersCompany Organizations Support Effective Supervision and AuditingStandards for Independence of Outside Officers1 As of March 28, 2014NominatingCommittee:4 Directors(of which 3 areoutside directors)Deliberate on candidates fordirector and executive officerpositions, and makerecommendations to theBoard of DirectorsDutiesCommittee andmembers5 timesCompensationCommittee:4 Directors(of which 3 areoutside directors)Deliberate on the compensation system for directors and executive officers, directors’ compensation limits and bonuses to be reported to the general shareholders meeting, and the amount of compensation for executive officers4 timesNumber ofmeetingsheldExecutive Officers:27 OfficersManagement OversightBusiness ExecutionGroup Corporate FunctionBusiness Operations FunctionMutual CooperationGeneral Meeting of ShareholdersCorporate Auditors: 4 Auditors(Including 3 OutsideCorporate Auditors)Independent AccountantsGroupCorporateNominating Committee:4 Directors(Including 3 Outside Directors)Compensation Committee:4 DirectorsCompliance CommitteeFair Trade CommitteeInformation ManagementCouncilSecurity Export ControlHeadquarters(Including 3 Outside Directors)Board of Directors: 7 DirectorsManagement CommitteeIn-house Companies/Strategic Business Unit (SBU)21 SBU:AGC Ceramics3 In-house Companies:GlassElectronicsChemicals(Including 3 Outside Directors)President & CEOSenior Executive Vice President &Overall business management2 Senior Executive Officers &Overall business managementCSR CommitteeInternal AuditOffice2 An In-house Company is defined as a business unit with net sales exceeding 200 billion yen which conducts its business globally. At present, there are three In-house Companies: the Glass Company, the Electronics Company and the Chemicals Company. Business units smaller than this are defined as Strategic Business Units (SBUs).Overview of Corporate Governance Structure (as of March 28, 2014)(cid:127)Meetings held: 13(cid:127)Attendance rate of each outside directorin meetings: 97%Board of Directors Meetings in Fiscal 2013Standards for Independence of Outside Officers (Summary)(cid:127)An outside officer shall not be a business executing person from a company competing in the same industries as the AGC Group, a company which has the AGC Group as a major business counterparty or a major business counterparty of the AGC Group (in the past three years), or a major shareholder of Asahi Glass.(cid:127)An outside officer will not have received a significant sum of money (in the past three years) from the AGC Group besides compensation designated for their respective position.(cid:127)An outside officer shall not have been an employee of an auditing firm that has conducted audits on the AGC Group in the past three years.(cid:127)The absence of serious conflicts of interest between the Company and an outside officer, or any matter between the Company and an outside officer that may damage his or her independence.AGC Report 201440AGC Report 201439Asahi Glass employs corporate auditors who audit the performance of directors by attending important meetings such as management committee sessions and holding regular meetings with representative directors. The corpo-rate auditors also enhance the effectiveness of auditing by exchanging views and obtaining information concerning audit results and other matters in cooperation with account-ing auditors and the Internal Audit Office. As of March 28, 2014, Asahi Glass employed four corporate auditors in total, of which three were outside auditors. All three fulfill the requirements of the Companies Act, as well as standards for independence set forth by our company (see list at right). The outside auditors also fulfill the criteria for Independent Auditors set forth by securities listing regulations and the enforcement rules for the securities listing regulations.Asahi Glass established its Nominating and Compensation Committees in 2003 as voluntary advisory committees of the Board of Directors.Asahi Glass has set the following standards to ensure the independence of outside directors and outside corporate auditors.To enable outside directors to effectively oversee opera-tions based on adequate information about the Company, the Office of the President, which serves as the Secretariat of the Board of Directors, notifies them about Board of Directors meetings, distributes related materials before-hand, and provides full explanations of agenda items for the meetings in advance.Likewise, to enable outside corporate auditors to more effectively perform audits, the Secretariat of the Board of Corporate Auditors holds Board of Corporate Auditors meetings, and assists them in coordinating meetings with representative directors and accounting auditors.At Asahi Glass, the management execution function is the responsibility of executive officers below the president & CEO. As an advisory committee to the president & CEO, Asahi Glass establishes the Management Committees and discusses business management monitoring and decisions regarding management execution. A system of In-house Companies (quasi-subsidiaries within the Group) has been introduced and a global consolidated management system is adopted with regard to business execution. Much of the responsibility and authority for business execution has been delegated to the In-house Companies and the Strategic Business Unit.As stated in its basic policy concerning corporate governance, the AGC Group clearly separates the functions of oversight and execution of management, aiming to strengthen the management oversight function.By establishing a sound and effective system of corpo-rate governance, the Group ensures the appropriate super-vision of operations as it strives to realize highly efficient and transparent management.The Board of Directors of Asahi Glass comprises seven directors, including three outside directors1, and is tasked with approving the AGC Group’s basic policy and monitor-ing the execution of its management.Asahi Glass began employing outside directors in 2002 in an effort to enhance the management oversight function. The appointment of outside directors is carried out in accor-dance with requirements under the Companies Act of Japan as well as Asahi Glass’ own selection criteria designed to ensure director independence (see page 40 for details). The three outside directors also fulfill the criteria for Independent Directors set forth by the securities listing regulations and enforcement rules for the securities listing regulations.The term of office for outside directors is one year, during which they are expected to draw on their extensive experience in global corporate management to offer propos-als in the Board of Directors concerning general manage-ment from an independent standpoint.Committee Activities in Fiscal 2013Corporate GovernanceApproach to Corporate GovernanceFramework for Management OversightBoard of DirectorsImproving the Objectivity and Transparency of the Board of Directors by Incorporating Opinions and Scrutiny from Outside DirectorsFramework for Management ExecutionExecutive Officers Perform their Duties Promptly and Appropriately while Each In-house Company Flexibly Manages the BusinessBoard of Corporate AuditorsEnhancing the Effectiveness of Audits with Accounting Auditors and the Internal Audit Organization while Auditing the Performance of DirectorsFramework for Enhancing the Management Oversight FunctionEarly Establishment of Nominating and Compensation Committees in 2003Support System for Outside OfficersCompany Organizations Support Effective Supervision and AuditingStandards for Independence of Outside Officers1 As of March 28, 2014NominatingCommittee:4 Directors(of which 3 areoutside directors)Deliberate on candidates fordirector and executive officerpositions, and makerecommendations to theBoard of DirectorsDutiesCommittee andmembers5 timesCompensationCommittee:4 Directors(of which 3 areoutside directors)Deliberate on the compensation system for directors and executive officers, directors’ compensation limits and bonuses to be reported to the general shareholders meeting, and the amount of compensation for executive officers4 timesNumber ofmeetingsheldExecutive Officers:27 OfficersManagement OversightBusiness ExecutionGroup Corporate FunctionBusiness Operations FunctionMutual CooperationGeneral Meeting of ShareholdersCorporate Auditors: 4 Auditors(Including 3 OutsideCorporate Auditors)Independent AccountantsGroupCorporateNominating Committee:4 Directors(Including 3 Outside Directors)Compensation Committee:4 DirectorsCompliance CommitteeFair Trade CommitteeInformation ManagementCouncilSecurity Export ControlHeadquarters(Including 3 Outside Directors)Board of Directors: 7 DirectorsManagement CommitteeIn-house Companies/Strategic Business Unit (SBU)21 SBU:AGC Ceramics3 In-house Companies:GlassElectronicsChemicals(Including 3 Outside Directors)President & CEOSenior Executive Vice President &Overall business management2 Senior Executive Officers &Overall business managementCSR CommitteeInternal AuditOffice2 An In-house Company is defined as a business unit with net sales exceeding 200 billion yen which conducts its business globally. At present, there are three In-house Companies: the Glass Company, the Electronics Company and the Chemicals Company. Business units smaller than this are defined as Strategic Business Units (SBUs).Overview of Corporate Governance Structure (as of March 28, 2014)(cid:127)Meetings held: 13(cid:127)Attendance rate of each outside directorin meetings: 97%Board of Directors Meetings in Fiscal 2013Standards for Independence of Outside Officers (Summary)(cid:127)An outside officer shall not be a business executing person from a company competing in the same industries as the AGC Group, a company which has the AGC Group as a major business counterparty or a major business counterparty of the AGC Group (in the past three years), or a major shareholder of Asahi Glass.(cid:127)An outside officer will not have received a significant sum of money (in the past three years) from the AGC Group besides compensation designated for their respective position.(cid:127)An outside officer shall not have been an employee of an auditing firm that has conducted audits on the AGC Group in the past three years.(cid:127)The absence of serious conflicts of interest between the Company and an outside officer, or any matter between the Company and an outside officer that may damage his or her independence.AGC Report 201440AGC Report 201439In its Compensation Principles, Asahi Glass sets out its basic stances and philosophies on overall compensation for officers as follows.Under the Company’s compensation system, outside directors and corporate auditors receive fixed compensation in the form of monthly compensation. Directors who serve as executive officers receive monthly compensation as well as performance-linked compensation in the form of bonuses and stock compensation-type stock options.The amount of the Bonuses, which is aimed at motivating recipients to achieve their single-fiscal-year business results goals, varies depending on consolidated business results for a single fiscal year. The Stock Compensation-Type Stock Options are intended to allow recipients to share benefits and risks associated with stock price fluctuations with our shareholders, and enhance their motivation and morale so as to raise business results and corporate value on a medium to long term basis.The Compensation Committee deliberates on matters such as the compensation system and level for directors and executive officers based on the Compensation Principles, makes proposals regarding them to the Board of Directors, and verifies the results of compensation payments in order to increase the objectivity and transparency of the compensation determination process.In response to the establishment of the Companies Act, Asahi Glass voted on its corporate policy over internal control at the Board of Directors meeting held in May 2006. The aim was to review and ensure the appropriateness of its business operation systems, including the compliance system.The Company adopted an internal control reporting system in compliance with Japan’s Financial Instruments and Exchange Act, and then established the AGC Group Internal Control over Financial Reporting Implementation Regulations. Based on these regulations, the Group maintains, operates and evaluates internal controls for financial reporting.Independent auditors evaluated the Group’s internal control systems in fiscal 2013, and confirmed that the systems were effective and compliant. Board of Directors, CorporateAuditors and Executive OfficersKazuhikoIshimuraRepresentativeDirectorYoshinoriHiraiDirectorTakashiFujinoDirectorYujiNishimiRepresentativeDirectorMasahiroSakaneDirector(Outside)MasakoEgawaDirector(Outside)HiroshiKimuraDirector(Outside)Appointed in March 2014Member of the Nominating and Compensation CommitteesExecutive Vice President of the University of TokyoAppointed in March 2011Member of the Nominating and Compensation CommitteesCouncilor of Komatsu Ltd.Outside Director ofTokyo Electron LimitedOutside Director ofNomura Holdings, Inc.Outside Director ofNomura Securities Co., Ltd.Appointed in March 2013Member of the Nominating and Compensation CommitteesChairman of the Board ofJapan Tobacco Inc.As of March 28, 20141 Figures include compensation for two directors (including one outside director) and one corporate auditor who stepped down at the time of the 88th General Meeting of Shareholders held on March 28, 2013.Corporate GovernanceCompensation SystemBoard of DirectorsExecutive OfficersBasic Philosophy on Compensation SystemEstablishing an Objective and Highly Transparent Compensation SystemComposition of CompensationOutside Directors Receive Fixed Compensation while Inside Directors Receive Both Fixed and Performance-Linked CompensationCompensation Determination MethodEnsuring the Objectivity and Transparency of the Company’s Compensation Decision-Making ProcessInternal ControlMaintaining, Applying, and Assessing Internal Control over Financial Reporting CorporateAuditorsShukichi Umemoto Izumi Tamai (Outside)Kenji Haga (Outside)Toru Hara (Outside)GM of Display Glass General Div., Electronics CompanyKazuyoshi WatanabeDeputy GM of Automotive General Division, Glass CompanyKihachiro OkamotoGM of Electronic Glass General Div., Electronics CompanyShigekuni InoueGM of Research Center, Technology General DivisionHiroyuki WatanabePresident of Chemicals CompanyMasao NemotoGM of Technology Management General Div., Chemicals CompanyTakayasu IdeDeputy GM of Display Glass General Div., Electronics CompanySeigo WashinoueGM of Finance & Control OfficeTetsuo TatsunoGM of CSR OfficeTokio MatsuoPresident of AGC Ceramics Co., Ltd.Akinobu ShimaoGM of Production Technology Center, Technology General DivisionTomoya TakigawaChief Representative of AGC Group for ChinaTakashi ShimboGM of Electronics General Div., Electronics CompanyShinji MiyajiChief Representative of AGC Group for Southeast AsiaYoshinori KobayashiDeputy GM of Building & Industrial General Division, Glass Company; GM of Japan/Asia Pacific Division, Building & Industrial General Division, Glass CompanyKimikazu IchikawaOverall business management (Finance);GM of Office of the PresidentTakashi FujinoGM of Technology General Division, Glass CompanyYasumasa NakaoPresident of Electronics CompanyTakuya ShimamuraOverall business management(Technology); GM of Technology General Division; Deputy Leader of AGC Group Improvement Activities and Business DevelopmentYoshinori HiraiGM of Building & Industrial General Division, Glass Company; Jean-François HerisGM of Strategy & Planning Office, Glass CompanyExecutive OfficersTadayuki OiGM of Human Resources & Administration OfficeShinichi KawakamiCEOPresident & CEOKazuhiko IshimuraOverall business management (AGC Group Improvement Activities, Electronics business and Business development)Senior ExecutiveVice PresidentYuji NishimiRepresentative for the Americas, Glass CompanyExecutiveVice PresidentsKei YonamotoGM of Automotive General Division, Glass CompanySenior ExecutiveOfficersMarehisa IshikoPresident of Glass CompanyYoshiaki Tamura(cid:127)The compensation system shall be one that enables the Company to attract, secure and reward diverse and talented personnel, in order to establish and expand the Company’s edge over its peers.(cid:127)The compensation system shall be one that promotes continued improvement of corporate value, and in this way allows shareholders and management to share gains(cid:127)The compensation system shall be one that gives motiva-tions to achieve performance goals relating to management strategies for the AGC Group’s continuous development.(cid:127)The decision-making process of determining compensa-tion shall be objective and highly transparentAll directorsOutside directors onlyAll corporate auditorsOutside corporate auditors only9453Number ofrecipients1378489357Total payment(millions of yen)1DirectorsFixed compensationMonthly compensationAll directorsCorporateauditorsFixed compensationMonthly compensationAll corporate auditorsPerformance-linked compensationDirectors who also serve as executive officersStock compensation-type stock optionsPerformance-linked bonusesDirectors excluding outside directorsType of compensation Eligible personsCompensation to Directors and Corporate Auditorsin Fiscal 2013Composition of Compensation for Directors and Corporate Auditors AGC Report 201442AGC Report 201441Corporate Governance Board of Directors, Corporate Auditors and Executive Officers Compensation System Basic Philosophy on Compensation System Establishing an Objective and Highly Transparent Compensation System Compensation Determination Method Ensuring the Objectivity and Transparency of the Company’s Compensation Decision-Making Process The Compensation Committee deliberates on matters such as the compensation system and level for directors and executive officers based on the Compensation Principles, In its Compensation Principles, Asahi Glass sets out its basic makes proposals regarding them to the Board of Directors, stances and philosophies on overall compensation for and verifies the results of compensation payments in order to officers as follows. increase the objectivity and transparency of the compensation (cid:127)The compensation system shall be one that enables the Company to attract, secure and reward diverse and talented personnel, in order to establish and expand the Company’s edge over its peers. (cid:127)The compensation system shall be one that promotes continued improvement of corporate value, and in this way allows shareholders and management to share gains (cid:127)The compensation system shall be one that gives motiva- tions to achieve performance goals relating to management strategies for the AGC Group’s continuous development. (cid:127)The decision-making process of determining compensa- tion shall be objective and highly transparent Composition of Compensation Outside Directors Receive Fixed Compensation while Inside Directors Receive Both Fixed and Performance- Linked Compensation Under the Company’s compensation system, outside directors and corporate auditors receive fixed compensation in the form of monthly compensation. Directors who serve as executive determination process. Compensation to Directors and Corporate Auditors in Fiscal 2013 Number of recipients1 Total payment (millions of yen)1 All directors Outside directors only All corporate auditors Outside corporate auditors only 9 4 5 3 378 48 93 57 1 Figures include compensation for two directors (including one outside director) and one corporate auditor who stepped down at the time of the 88th General Meeting of Shareholders held on March 28, 2013. Internal Control officers receive monthly compensation as well as performance- In response to the establishment of the Companies Act, linked compensation in the form of bonuses and stock Asahi Glass voted on its corporate policy over internal control compensation-type stock options. at the Board of Directors meeting held in May 2006. The aim The amount of the Bonuses, which is aimed at motivating was to review and ensure the appropriateness of its business recipients to achieve their single-fiscal-year business results operation systems, including the compliance system. goals, varies depending on consolidated business results for a The Company adopted an internal control reporting single fiscal year. The Stock Compensation-Type Stock Options system in compliance with Japan’s Financial Instruments and are intended to allow recipients to share benefits and risks Exchange Act, and then established the AGC Group Internal associated with stock price fluctuations with our shareholders, Control over Financial Reporting Implementation Regulations. and enhance their motivation and morale so as to raise business Based on these regulations, the Group maintains, operates results and corporate value on a medium to long term basis. and evaluates internal controls for financial reporting. Independent auditors evaluated the Group’s internal control systems in fiscal 2013, and confirmed that the systems were effective and compliant. Composition of Compensation for Directors and Corporate Auditors Type of compensation Eligible persons Directors Fixed Monthly All directors compensation compensation Performance- Performance-linked linked compensation bonuses Directors who also serve as executive officers Stock compensation- Directors excluding type stock options outside directors Corporate auditors Fixed Monthly compensation compensation All corporate auditors 41 AGC Report 2014 Board of Directors Kazuhiko Ishimura Representative Director Yuji Nishimi Representative Director Masahiro Sakane Director (Outside) Hiroshi Kimura Director (Outside) Takashi Fujino Director Masako Egawa Director (Outside) Appointed in March 2011 Member of the Nominating and Compensation Committees Councilor of Komatsu Ltd. Outside Director of Tokyo Electron Limited Outside Director of Nomura Holdings, Inc. Outside Director of Nomura Securities Co., Ltd. Appointed in March 2013 Member of the Nominating and Compensation Committees Chairman of the Board of Japan Tobacco Inc. Appointed in March 2014 Member of the Nominating and Compensation Committees Executive Vice President of the University of Tokyo Maintaining, Applying, and Assessing Internal Control over Financial Reporting Executive Officers President & CEO Kazuhiko Ishimura CEO Senior Executive Vice President Yuji Nishimi Overall business management (AGC Group Improvement Activities, Electronics business and Business development) Executive Vice Presidents Kei Yonamoto Representative for the Americas, Glass Company Yoshiaki Tamura President of Glass Company Senior Executive Officers Marehisa Ishiko GM of Automotive General Division, Glass Company Jean-François Heris GM of Building & Industrial General Division, Glass Company; Takashi Fujino Overall business management (Finance); GM of Office of the President Yasumasa Nakao GM of Technology General Division, Glass Company Takuya Shimamura President of Electronics Company Yoshinori Hirai Overall business management (Technology); GM of Technology General Division; Deputy Leader of AGC Group Improvement Activities and Business Development Executive Officers Tadayuki Oi GM of Strategy & Planning Office, Glass Company Shinichi Kawakami GM of Human Resources & Administration Office Tetsuo Tatsuno GM of Finance & Control Office Kazuyoshi Watanabe GM of Display Glass General Div., Electronics Company Tokio Matsuo GM of CSR Office Akinobu Shimao President of AGC Ceramics Co., Ltd. Tomoya Takigawa GM of Production Technology Center, Technology General Division Takashi Shimbo Chief Representative of AGC Group for China Shinji Miyaji GM of Electronics General Div., Electronics Company Kimikazu Ichikawa Deputy GM of Building & Industrial General Division, Glass Company; GM of Japan/Asia Pacific Division, Building & Industrial General Division, Glass Company Yoshinori Kobayashi Chief Representative of AGC Group for Southeast Asia Kihachiro Okamoto Deputy GM of Automotive General Division, Glass Company Shigekuni Inoue GM of Electronic Glass General Div., Electronics Company Hiroyuki Watanabe GM of Research Center, Technology General Division Masao Nemoto President of Chemicals Company Takayasu Ide GM of Technology Management General Div., Chemicals Company Seigo Washinoue Deputy GM of Display Glass General Div., Electronics Company Yoshinori Hirai Director Corporate Auditors Shukichi Umemoto Izumi Tamai (Outside) Kenji Haga (Outside) Toru Hara (Outside) As of March 28, 2014 AGC Report 2014 42 Date of Publication June 2014 (Last date of publication: June 2013) Regarding Future Assumption, Forecasts and Plans Future perspectives described in this report are based on the latest information available to the AGC Group at the time of editing this report. Nevertheless, please note that results and consequences may vary with fluctuations in the business environment. URL: www.agc-group.com/ 1-5-1, Marunouchi, Chiyoda-ku, Tokyo 100-8405, JAPAN Corporate Communications & Investor Relations Office Tel: +81-3-3218-5603 Fax: +81-3-3218-5390 E-mail: info.ad@agc.com Printed on paper made with wood from forest thinning.“Morino Chonai- Kai” (Forest Neighborhood Associ- ation) —Supporting sound forest management. All rights reserved. Unauthorized reproduction of this report is a violation of applicable laws. 

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