Message from the President

(1)

July 2014 I am deeply grateful for the support we have received from all our stakeholders.

Fiscal 2014, the year ended March 31, 2014, was the second year of our Global Mid-term Policy. Higher production of automobiles in advanced economies and China, cost reduction efforts, and exchange gains from yen depreciation led to growth in both sales and income.

Net sales rose 14.4% year on year to ¥4,095.9 billion, operating income expanded 44.0% year on year to ¥377.7 billion, income before income taxes grew 48.5% year on year to ¥418.6 billion, and net income increased 58.2% to ¥287.4 billion. The results for fiscal 2014

were better than the Company's performance prior to the Lehman Shock.

In April 2013, we drew up the "DENSO Group Long-term Policy 2020." The DENSO Group

shares the one goal of "Protecting lives, Preserving the planet, and Preparing a bright future for generations to come." We aim to deliver convenience as well as the joy of driving to people all over the world, while striving to balance growth with sustaining the global environ-ment, as well as a society where each and every one of us can live in peace, safety, and hap-piness. We hope to contribute to the creation of such a society while gaining the confidence of all of our stakeholders.

I sincerely appreciate the ongoing support of all our stakeholders.

(2)

On creating the DENSO Group Global Mid-term Policy, we set several

objectives for fiscal 2016 (the year ending March 2016), namely to

expand business to ensure continuous future growth, to evolve by

continuing to develop world-first products, and to facilitate

Group-wide collaboration worldwide and speed up corporate

manage-ment.

In fiscal 2014, the second year of the Global Mid-term Policy, the

DENSO Group expanded business globally. In the environmental field,

we developed a new diesel common rail fuel injection system with the

world's highest injection pressure of 2,500 bar. In the security and

safety field, we developed active safety systems that prevent traffic

accidents from happening for not only luxury vehicles, but also

compact cars, large-scale trucks, and large tourist busses.

Leverag-ing our technologies in automotive products, we made progress on

expanding aftermarket business and new businesses.

As a result of these initiatives, in fiscal 2014, the DENSO Group

achieved ahead of schedule its targets for net sales of ¥4,000 billion

and an operating margin of 8.0%. With fiscal 2015 the final year of

the Global Mid-term Policy, the DENSO Group is determined to see

through its ongoing business activities to satisfactory outcomes.

A

Please give us an update on the Global Mid-term Policy. How much

progress has been made?

Q1

(3)

In fiscal 2014, the world economy grew at a faster clip than last year,

even though growth slowed in emerging countries. In Japan, the

economy was buoyed by stimulus measures and yen depreciation.

Turning to the automotive industry, despite signs of slowing growth

in emerging markets in Asia, such as Thailand and India, the

automo-bile industry expanded overall, achieving record-setting sales volume

thanks to market growth in China and advanced economies including

North America. In Japan, sales were partially affected by the

downward correction to robust demand attributable to eco-car

sub-sidiaries during the previous year. Looking at the year as a whole,

however, sales volumes increased owing to a pick-up in the economy,

the launch of compelling new models, and the front-loading of

demand prior to the consumption tax hike.

In fiscal 2015, we project that the global economy will expand

mod-erately, driven by growth in advanced economies while growth

con-tinues to taper in emerging economies. Regarding the Japanese

economy, we are concerned that domestic demand will be weak for a

while in the wake of the consumption tax hike, but we expect gentle

expansion from the second half of the year on the back of strong

exports and economic stimulus measures.

Turning to the automobile industry, we forecast mild growth overall,

as economic growth may flatten out in emerging countries. In Japan,

we expect demand to be weaker than the previous year owing to the

consumption tax hike.

A

What is your view of business conditions inside and outside Japan?

Q2

(4)

The DENSO Group has been developing new products and production

lines to strengthen its cost competitiveness.

In fiscal 2014, DENSO developed the world's first automotive climate

control units for automobiles that can be installed in a wide range of

models, from compact car to luxury vehicles, without regard to

man-ufacturer or sales region. Using new technologies to shrink the size of

components by 20% and innovative engineering to conform the

dimensions to car designs, we were able to standardize air

condition-ing units, which had until now differed for each car model, down to six

varieties from the previous 18 types. As a consequence,

develop-ment costs, which had been required for each car model, have been

reduced considerably. The new air conditioning systems have been

deployed in the Harrier, Noah, and Voxy models. We aim to expand

their deployment to other models while accelerating the

develop-ment of more standardized products like this.

Moreover, DENSO continued to transition to leaner and more

compet-itive

plants. In fiscal 2014, we broadened the scope of this

transition from the field of forging to the field of treatment

process-ing, and developed a revolutionary painting facility that requires only

1/15th the space at 1/5th the equipment cost, and also realized a

30% reduction in processing costs. We plan to deploy this painting

facility to our other plants.

In fiscal 2015, we forecast a temporary decline in profits as domestic

automobile output decreases following the consumption tax hike and

as we make investments to enhance our future competitiveness.

From fiscal 2016 onward, however, we look for earnings to increase

as we should begin to see returns on our investments in new plants

and products while benefits crystallize from our efforts to strengthen

cost competitiveness.

A

What measures are being taken to bolster competitiveness?

Q3

(5)

At DENSO, we strive to meet the expectations of all shareholders

through consistent increases in cash dividends, giving due

consider-ation to a comprehensive range of factors, including consolidated

performance and the dividend payout ratio. Our dividend payout ratio

target is 30%. We will consider future returns after the minimum

required earnings retention for appropriate investment and

develop-ment, taking into account the difficult business environment.

In light of our recent performance and the operating environment, we

declared an annual dividend of ¥105.00 per share for the fiscal 2014,

an increase of ¥41.00 from the previous year.

We are continually striving to provide a stable return of profits to

shareholders.

A

What are your views on shareholder returns?

Q4

(6)

2. Evolve by Continuing to Develop World's First Products

　・Improve capabilities of product development focusing on world's first technologies. 　・Establish global procurement, production and supply systems, that makes us

(extremely) cost competitive.

1. Strategies to Expand Business for Ensuring Our Continuous Growth in Future Years

　・Strengthen relationship with automakers and expand business in growing emerging markets.

　・Develop system products that make vehicles more attractive for customers. 　・Expand aftermarket business and develop new businesses.

Basic Strategies

Basic Strategies and Progress

Major Policies

In fiscal 2014, we were able to achieve our Mid-tem Policy targets for both sales

and operating income ahead of schedule. In fiscal 2015, the final year of the

DENSO Group Global Mid-term Policy, we will bring the activities on which we

have been working to a firm conclusion and make progress in planning the next

mid-term policy.

(7)

While global automobile production increased by 4.3% year on year, our sales

increased by 14.4%, meaning that our sales growth surpassed the increase in produc-tion.

Despite the increases in expenses and labor costs, operating income grew signifi-cantly, rising 44.0% year on year, due to production volume increase and the currency exchange gain, in addition to the cost reduction effort.

In fiscal 2015, it is expected that the stagnation in developing countries will continue but that, overall, there will be moderate growth. In Japan, increased sales and

decreased income are expected on account of the anticipated effect of the tax hike on consumer spending.

●

Key points

Progress in FY2014 Under the Mid-term Policy

3. Facilitating Group-wide Collaboration Worldwide and Speeding-up Corporate Management

　・Strengthen our foundation to facilitate the collaboration of 120,000 　associates in the DENSO Group.

(8)

We have identified efforts to foster new businesses as one of the core pillars of

the DENSO Group Global Mid-term Policy and are working to expand businesses

in order to secure sustainable growth.

Approaches into New Businesses Fields

Fields Main Products and Activities

Contribute to realization of low-carbon society through mutual power supply systems, such as home energy management systems (HEMS), storage batteries, charging / discharging stations and energy management systems, between vehicles and homes

(9)

Contribute to efficient and stable vegetable growing and improvements in agricultural competitiveness through greenhouse environmental control systems / energy-saving technologies

Agriculture Support

Contribute to global environmental protection fuels by getting away from fossil fuels, for example, by absorbing and fixing CO2 and by biomass fuel,

through a highly efficient algae culture process

Bio

Help in prevention and early detection of and in response to lifestyle-related diseases as well as contribute to improvements in quality of people's lives through body sensing devices/systems

Healthcare

Contribute to customer service improvements as well as safe and secure lifestyles through sensing technology applications

Security

Contribute to realization of a society where it is safe, secure, and eco-friendly to live through electric assist technologies that draw on core technologies (motors and control systems) cultivated for vehicles

(10)

Contribute to safe, secure, and comfortable life-styles by supporting delivery of information within communities

From the places they were grown to the point of consumption, contribute to secure transportation and supply of products that are safe to eat through energy-saving refrigeration / cold storage technolo-gies and traceability controls

Cold Chain

Community Network Solution Business

(11)

Note: Only major bases are identified on the map.

Global Management

Sales and Income by Segment

Note: The segments changed from the third quarter of fiscal 2011. Others mainly includes local corporations in South America.

Operating Income by Segment Net Sales by Segment

(12)

Japan

Demand is forecast to be temporarily sluggish as an effect of the consumption tax hike, but it is envisaged that the Japanese economy will make a gradual recovery from the second half onward, underpinned by strong exports and economic measures. Under these circumstances, we will be painstaking in optimum allocation of limited resources and move ahead with power shifts toward growth fields and operational efficiencies. At the same time, we will make ongoing strategic investments—such as in new process methods tailored to the evolution of our products and investments with high cost-re-duction effects that incorporate 1/N procost-re-duction equipment—with regard to the

creation of plants that are linked to improvements in our global competitive-ness and value added. In addition, to lead the Company to future growth we will make contributions to both revenue and society by promoting broader sales strategies that anticipate automaker trends as well as by aftermarket sales expansion and the com-mercialization of new businesses.

Approach for fiscal 2015

In the domestic automobile market, sales increased 10.3% year on year to ¥2,717.6 billion. Despite the reactionary decline from the effect of the Japanese government's subsidies for eco-friendly vehicles of the previous year, the number of vehicles sold during the year increased due to economic recovery, the market entry of attractive new models, and increased demand ahead of a consumption tax hike. Despite increased expenses, including R&D expenses, operating income soared 66.0% year on year, to ¥283.3 billion, due to such factors as increase in production volume and the currency exchange gain, in addition to the cost reduction effort.

Results for fiscal 2014

(13)

Global Management

(14)

North America

It is envisaged that there will be growth in consumer spending, due to such factors as an improvement in the employment environment and a recovery in the housing market, and that the rate of economic growth will rise. Under these circumstances, we will carry on from the previous year and further our efforts to expand sales to the Detroit Three and commercial vehicle and agricultural and construction equipment manufacturers in addition to expanding aftermarket business with a view to M&A. We will also further evolve hitozukuri (employee development) and monozukuri (the art of making things) on a localized basis and work to reduce variable costs, particularly for example by the local procurement of equipment and molds as well as components. In R&D, we will make progress in creating products that match the needs of the North American market by the localization of design.

The U.S. automobile market showed strong sales and production due to the U.S.

economic recovery, and the Company recorded increases in both its sales and income. Sales increased 28.5% year on year, to ¥816.6 billion, due to the increase in the number of cars produced by GM, Ford, Chrysler (collectively, the Detroit Three), and Toyota and heating, ventilation, and air-conditioning (HVAC) unit sales expansion. Operating income rose 9.1%, to ¥14.7 billion, due to such factors as gains in capacity utilization brought about by the sales increase.

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Global Management

(16)

Europe

It is envisaged that there will be gradual improvements in the employment and income environments along with an export-driven economic boost that will result in a rise in the rate of economic growth. In addition to ongoing sales promotion activities centering on European customers, we will leverage those contacts and put into place competitive production systems that also set DENSO products apart from those of our rivals to expand sales to businesses in the other regions. With a view to future growth, we will target business expansion, particularly into the security and safety field, and the devel-opment of new products using technologies developed in Europe. In addition, we will be working to acquire advanced technologies that leverage alliances.

In Europe, both sales and income increased, sales by 34.0%, to ¥498.9 billion, as a result the gradual recovery from the economic slump and the effect of the yen's depre-ciation. Operating income soared 216.1%, to ¥12.4 billion, due to such factors as pro-duction volume increase.

(17)

Global Management

(18)

Asia & Oceania

The slowdown in growth in emerging countries is expected to continue, but as the region's potential for market growth remains as high as ever, we will take future growth into account in the construction of production and supply systems and of mutually complementary networks within the ASEAN region. We will also proceed with the local procurement of equipment and components to mainly realize expansion in sales for compact cars. In the area of technical development, we will develop locally optimized products in close collaboration with technical centers and connect these to sales expansion achieved by setting DENSO products apart from those of other companies. Approach for fiscal 2015

Although economic growth slowed down in emerging markets, such as Thailand and India, these were buoyed up by the robust Chinese market. Overall, there was an

increase in the number of vehicles produced, resulting in our sales increasing by 18.8% year on year, to ¥943.1 billion. On the other hand, as operating income of ¥71.2 billion was 3.3% lower compared with the previous fiscal year, due to such factors as

increases in labor costs and the startup costs of the plants and technical centers designed to strengthen our future competitiveness.

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Global Management

(20)

The above goals characterize the value that DENSO provides, value created from a global perspective to meet local needs. To achieve these goals, we develop new products and services through R&D activities focused on "world-first technology."

Contribute to society as a whole by leveraging our core technologies built up through our activities in automobile

development

Society as

a whole

Contribute to the creation of a power-efficient, secure society that uses energy and information infrastructures for

automobiles

Contribute to the creation of a safe, secure, and environmentally

friendly society through aftermarket services

Automotive

society

Enhance the overall environmental friendliness

and safety of automobiles

Automobiles

Value Creation

Our mission in the next 10 years

Protecting lives, Preserving the planet,

and Preparing a bright future

for generations to come

Security & Safety

Preserving the planet

The DENSO Group's Long-Term Policy 2020 has the slogan "Protecting lives,

Preserving the planet, and Preparing a bright future for generations to come,"

which the Company has established as its mission, with a particular focus on

preserving the planet as well as security and safety.

(21)

Based on its slogan of "Protecting lives, Preserving the planet, and Preparing a

bright future for generations to come," DENSO is engaged in the mission of

solving the environmental and safety issues automotive society faces toward

the creation of a sustainable automotive society.

In the environmental field, DENSO is advancing the development of primarily

fuel-saving technology that will help conserve the global environment. In the

security and safety field, the Company is aiming to deliver "Everyday Confidence"

that supports drivers and prevents accidents and "Extraordinary Safety" that

mini-mizes injuries caused by accidents. At the same time, DENSO is advancing a range

of technical developments toward the creation of a sustainable automotive society.

Reduce emissions of CO2 and harmful gases, reduce use and increase recycling of limited resources, develop alternative technologies

The Environment

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Tandem Solenoid Starter ・Stop/Start System Engine ECU Ultra-high-pressure Pump Injector Rail

Common Rail System Autonomous Injection Accuracy Compensation Technology(i-ART) EGR Control System Sensor Technology

・Diesel Engine

Management System

Direct Injection System EGR Control System Sensor Technology

・Gasoline Direct Injection Engine Management System

Increase the efficiency of engines to reduce wasteful use of fuel

Increasing engine efficiency

Increasing vehicle energy efficiency (Energy management)

DC-DC Converter Inverter Motor Generator

Motor drive (HV/EV) Internal combustion engine

Example of technology applied to individual powertarains Commitment

Fuel-saving technology is one of the fields in which DENSO is focusing toward the solving of the issues facing automotive society. To make more effective use of energy that is mostly wasted by heat dissipation, the Company is working to make automobiles more energy efficient—by such methods as improving the energy efficiency of and reducing the load on engines as well as the reuse of energy—and engaging in its own energy man-agement. Not confining itself to improving individual automobiles, the Company is

expanding its field of view to encompass road transport infrastructure, such as traffic controls that utilize intelligent transportation systems (ITS), and advancing technical developments that will minimize wasted energy consumption in society as a whole.

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Increasing energy

efficiency in all

sectors of society

・Convoy Driving

・Avoidance and Reduction of Traffic Congestion

by Improving Traffic Flow

Ease traffic congestion and allow drivers to avoid congested roads

ITS-based traffic control

Use the energy dissipated as heat in the brakes, to generate electricity

Recovering energy

・Deceleration Energy Regeneration System

・Heat Storage System

Lithium Ion Battery Pack

・High-efficiency SC Alternator

・Heat Pump Air Conditioner

Reduce the workload on the engine by minimizing the amount of energy not used for driving vehicle, such as the energy used for air conditioner

Reducing engine load

・Ejector Cycle Air Conditioner

・Cold Storage Air Conditioner

Increasing vehicle energy efficiency (Energy management)

SiC Power Device Battery Current Sensor Battery Monitoring Unit

Motor drive (HV/EV) Internal combustion engine

Example of technology applied to individual powertarains Commitment

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The main causes of accidents are said to be drivers discovering that they are late, errors of judgment, and driving errors. The Company is engaged in the evolution of two core technologies: sensing technology that accurately keeps track of the driving environment / driver / automobile status; and human machine interface (HMI) technology to provide driving support appropriate to the prevalent conditions. On the basis of these core tech-nologies, DENSO is aiming for an automobile accident-free society by endeavoring to provide "Everyday Confidence" to prevent accidents and "Extraordinary Safety" to minimize injuries in the event of an unavoidable collision; a society in which drivers can easily recognize dangers and are assisted to not make errors.

Security & Safety

Reduce damage from collisions, avoid collisions, develop information and communication technologies, develop future autonomous driving technologies

Security & Safety

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・Cross Traffic Alert ・Collision Prevention

against Pedal Mishit ・Surrounding Obstacle Warning ・Parking Assista ・Surround Monitoring System Parking/ Start ・Electronic Stability Control

・Blind Spot Detection

Lane change

・Intersection Movement Assist ・Automatic High Beam

Inter-section ・Automatic Collision Notification System ・Pop-up Hood ・Airbag ・Autonomous Emergency Braking ・Forward Collision Warning ・Lane Departure Warning

・Lane Change Warning ・Distance Alert ・Driver Status

Monitoring

・Night Vision ・Full Speed Range

Adaptive Cruise Control

・Adaptive Cruise Control

・Lane Keeping Assist

Forward Application

The system protects and quickly saves the occupants and pedes-trians if the vehicle is involved in a collision. The system controls

the vehicle when the driver cannot avoid an imminent collision. The system warns and

supports the driver in avoiding hazardous conditions.

The system controls the vehicle, and provides information when required.This eliminates difficulties and concerns about driving and reduces driver fatigue. Protection Intervention Warning Automation/Information Assist In-crash/Post-crash Pre-crash Danger Normal Driving Extraordinary safety Everyday confidence Phase

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*Equipment that significantly reduces floor area, investment costs, and by processing costs by aligning produc-tion volume (economic units) with assembly, through more-compact producproduc-tion facilities and upgrading the production line.

DENSO is working on a transition to superior plants to make its domestic pro-duction more competitive. We are targeting increased propro-duction efficiency through such measures as cutting processing costs through faster and more continually operating production lines, applying initiatives including the use of 1/N production equipment*. Reduced administrative costs and overheads from the rationalization of logistics and inspections and reduced material costs from reform of procurement and lower purchased parts costs will also contribute to increased efficiency. The Company will advance the extension of these facilities to overseas plants.

(

outstanding

)

Plants

Monozukuri

Through the DENSO style of

(the art of making things),

cut-ting-edge product development and innovative self-development and

self-pro-duction of essential technologies, DENSO has generated a range of "world-first"

products. This uncompromising stance on

has laid the foundations

for DENSO's increased competitiveness and enhanced corporate value.

Support-ing this creation of new value are a large number of engineers and technical

personnel. DENSO believes that

is

, which is to say, the

art of making good things is the same thing as the art of making good people,

and this is the source and driving force behind value creation for DENSO.

This Special Feature presents efforts in DENSO-style

, which

con-fronts the challenges of creating new value, and the

that brings

to fruition.

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FY2016 FY2015

FY2014 FY2013

Activities of Model Plant

■ All business group

■ Main 9 plants

The Whole Company Activity

Expand globally to to local situation speedily

monozukuri technology Improve and adopt

Overseas Expansion

Improve productivity

Expand technology to suppliers

Customers, Suppliers

Optimization in / out distribution Optimization of inspection

Synchronization of processing /Assembly line High-speed / Automation

Energy saving technology 1/N processing technology

Decreased lead time Increase output Plant in Japan

Activities

Development of production technology speedily against overseas competition

An organization that has evolved through a culture that entails the participation of all of its members in a spirit of friendly competition, continuously taking up each challenge and

consistently fine-tuning its skills.

Secure production output and keep technological development capabilities

Ideal situations

A plant in Japan that can be internationally competitive in the production field

even if the yen appreciates to ¥70 to the US dollar.

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5.5m

2

× height 1.8m

1/6

14m

2

× height 4.0m

Floor area

33MPa

1/2

68MPa

Pressure processing

Hard for unfilled sections to form, even under low pressure

Product cross section

height 1.8m

Exterior view:

・Development of products in which it will be hard for unfilled sections to form even under low pressure

・Realizing electrification and simplification by low pressure.

The thinking behind this approach

Small-scale electric die-casting system

Now

1.8m

If low pressure used, can easily result in unfilled sections (cavities inside the product)

Product cross section

height 4.0m

Exterior view:

・Fills unfilled sections (cavities inside the product) under high pressure

・Upsizing generates high pressure by hydraulic pump

The thinking behind this approach

Large-scale hydraulic pressure die-casting

Until now

4.0m

One metal mold manufacturing method, die casting, is normally undertaken at large facili-ties, as the process involves the high-temperature melting and high-pressure injection of metal. Due to its innovation in process methods, DENSO has developed a small-scale electric die-casting system that has significantly reduced the size of the area covered by the facilities and the amount of energy used.

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→ Standardization of the system and technology to realize improve marketability in timely manner (Flexibility / Extensibility).

Car Electronics System

→Standardization of the good products while reducing the type of product

Under body products (Platforms, Unit Products, and Devise)

→Differentiation of the function and the design to reflect regional needs

Upper body products (Information/ Telecommunication, Safety Products)

Platform

Marketability Appeal Regional Lows / Environment

Regional Tastes / Environment Adjustment Standardization (Variation) Differentiation

Core engineering which has competitiveness (Global Standards)

Smaller and lighter, and high-fuel efficiency

Universal Value of Vehicles

Development without Galapagosization based on other car makers in the future

Optimal location and Products

DENSO’s Goal: Standardization of the Good Products while Reducing the Type of Product

Among the world's automakers, moves on the sharing of parts and standardization are gaining pace. There is thus the possibility of a significant reduction in the number of development processes for parts that previously differed between each type of car and each automaker, and improvements in both development efficiency and productivity are expected. In the case of upper body products, an area in which design and function are important, efforts are made to set DENSO products apart by reflecting regional and customer needs. Contrastingly, in the case of under body products, DENSO is targeting the development of next-generation products that incorporate improvements in terms of product capabilities at the same time as standardization by combining a number of com-petitive core technologies.

Efforts in Sharing of Parts / Standardization

The first of its kind in the world, this new automotive climate control unit can be shared by automakers, in products ranging from compact to luxury cars, and across sales regions. This was achieved by new DENSO technologies that reduced the unit's size by 20% and by significant standardization (from 18 models to 6) that was enabled by an innovative struc-ture that has achieved commonality in vehicle design. From the production aspect, too, the new product realizes a convention-breaking level of standardization in its method of

assembly, so that all 6 models can be assembled on a single production line.

Development Case Study: New Automotive Climate Control Unit

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A new structure which enabled standarization of components while realizing required perfor-mance.

New Structure

Downsizing by 20% from conventional model enable HVAC to be installed in vehicles ranging from compact to luxury cars.

Downsizing

In the DENSO Group, the DENSO Spirit clearly expresses our stance regarding the values of "Foresight, Credibility and Collaboration," which have been implicit since the founda-tion of DENSO Corporafounda-tion and a driving force behind our activities. The DENSO Spirit has been translated into 17 languages and shared among associates.

We are working hard to enhance training policies to develop associates who can study on their own and think for themselves, and who continually seek new challenges. Having put in place management systems tied closely to different countries and regions, we are implementing a range of initiatives.

The DENSO Spirit

There are a total of a little less than 140,000 people working in the DENSO Group. The Group's varied and individual associates around the world have integral parts of the cor-porate DNA passed down to them, such as DENSO's attitude toward , and share values to grow and develop further.

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Training independently creative associates capable of flexibly responding to changes in the times and environment and who will form nucleus of future workplaces

DENSO Technical Skills Academy

6,000 of whom are currently playing active roles at the forefront of DENSO . Given the constantly changing environment surrounding our industry, we will continue to provide skills and education to flexibly respond to those changes.

DENSO Technical College is an in-house facility operated by the Company under Ministry of Health, Labour and Welfare certification. The college offers tuition in a wide range of disciplines with a view to nurturing the associates who will underpin DENSO's future . The college marked its 60th anniversary of its founding in April 2014, and at that time more than 9,000 people had graduated, more than

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The Company also trains its gifted technicians from its overseas bases, where the handing down of skills is also encouraged. Thus contestants come not only from Japan but also from Thailand and Indonesia, and Denso (Thailand) Co., Ltd. (DNTH) has won medals at three consecutive WorldSkills Competitions. In the years to come, the Company will work to continue training its highly skilled technicians through these initiatives.

Regarding the high levels of skills and know how that shape technology and technical development as inextricably linked factors in , DENSO focuses on techni-cians and the passing on of skills. As part of that focus, the Company encourages participation in the WorldSkills Competi-tion, where the highest level skills are contested.

Over the 50 years, up to and including 2013, in which DENSO has sent partici-pants to competitions, contestants have a track record of 28 gold, 15 silver, and 13 bronze medals.

The WorldSkills Competition

Training of highly skilled technicians who possess strong mental ability and

imagination in abundance

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(Billions of yen)

DENSO is organized around business groups. These businesses coordinate with

one another to accommodate systemization and modularization, and decision

making is conducted promptly in line with the conditions of each business.

*Repair parts, original brand products of subsidiaries

+14.4 3,580.9 4,095.9 Total +5.0 58.5 61.4 New Business Total

-1.3 15.8 15.6 Others +10.9 9.2 10.2 Consumer Products +6.3 33.5 35.6 Industrial Systems +14.5 3,522.4 4,034.5 Automotive Total +11.0 51.7 57.5 Others* +12.0 256.0 286.7 Small Motors +11.9 342.1 382.8 Electronic Systems +9.0 576.9 628.6 Information and Safety Systems

+17.8 1,057.5 1,245.5 Thermal Systems +15.8 1,238.2 1,433.4 Powertrain Control Systems

Consolidated Sales by Business Group

Change(%) FY2013 FY 2014 %

1.8

Others %

0.2

Consumer Products %

0.9

Industrial Systems %

7.0

Small Motors %

9.4

Electronic Systems %

15.3

Information and Safety Systems

%

30.4

Thermal Systems

%

35.0

Powertrain Control Systems

billion

¥4,095.9

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Developed an exhaust gas recirculation (EGR) valve unit, a major component of EGR systems that helps make diesel engine emissions cleaner. The new unit, the first in the world to integrate an air intake throttle valve and an EGR valve, which are usually installed separately in vehicles, is half the size of conventional models and reduces costs by 20%. The air intake throttle valve controls the amount of air entering the engine and the EGR valve controls the amount of exhaust gas to be recirculated into the engine. Honored with the 2013 Nikkei Excellent Products & Services Award for Excellence in recognition of the intelligent-Accuracy Refinement Technology (i-ART) feedback injec-tion control system, a computer that controls common rail systems. The i-ART

feedback injection control system controls fuel injection precision to within 1mm3_in

volume and 1 / 100,000 of a second in timing. The Toyota Hilux, launched in Brazil in 2012, was the first mass production vehicle featuring i-ART to greet the world. The awards recognize the technological development, growth potential, innovativeness, and industry/social impact of the i-ART feedback injection control system.

Developed a new diesel common rail (DCR) fuel injection system with the world's highest level of injection pressure at 2,500 bars. Compared with the Company's previous 2,000 bar system, the new system can help increase fuel efficiency by up to 3% while also reducing hazardous substance particulate matter (PM) by up to 50% and nitrogen oxides (NOx) by up to 8%, contributing to lower fuel costs and less environmental impact. The new DCR fuel injection system is part of Volvo's new Drive-E powertrains in Europe.

New Products and Technologies

Fiscal 2014 Topics

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In fiscal 2014, sales increased considerably compared with the previous fiscal year, buoyed by a higher production volume at Japanese automakers and a recovery in China.

+15.8% 1,238.2

1,433.4 Sales (Billions of yen)

Change YoY FY2013

FY2014

Results for Fiscal 2014 and Growth Strategies

Sales expanded for inverters used in hybrid vehicles made by Nissan Motor Co., Ltd. (Pathfinder) and Mazda Motor Corporation (Axela).

Commenced production at a third newly constructed plant at PT. DENSO INDONESIA in February 2014, in order to keep pace with expanding automobile production in Indo-nesia. The new plant produces engine control products, including engine electronic control units (ECUs) and variable cam timing (VCT) control systems, as well as starters and alternators.

Decided to expand operations at the DENSO Mexico S.A. de C.V. (DNMX) manufactur-ing facility in Silao in order to meet expandmanufactur-ing production of automobiles in Mexico. The Company will put in place a new manufacturing line for alternators with produc-tion scheduled to commence from October 2014. Construcproduc-tion on the Silao Plant, the third for DNMX, broke ground in March 2012. The plant started manufacturing

heating, ventilation and air conditioning (HVAC) units in November 2013 and radia-tors and washer systems in January 2014.

Built an evaluation facility to strengthen the development of power electronics products, such as inverters used in hybrid vehicles worldwide, on the site of the Anjo Plant. The facility began participating in the development and evaluation of these products in April 2014.

Established a production company in Cambodia, the Company's first presence there, as part of efforts to enhance the production and supply framework in the ASEAN region. In July 2013, production of sensor components for ignition magnetos (starters for motor-cycles) commenced. Plans call for steadily expanding production to other products.

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Common rail systems

In-line fuel injection pumps, Rotary fuel injection pumps Nozzles

Fuel filters

Diesel Injection Products

Intake and exhaust products: Exhaust gas recirculation (EGR) valves, Throttle bodies, Inte-grated air fuel modules, and others

Variable valve products: Variable Cam Timing (VCT) components, Oil flow Control Valve (OCV)

Drive control products: Integrated mechatronic modules, AT solenoid valves, Valve bodies, Shift-by-wire actuators

Evaporator products: Purge valves, Evaporative leak check pump module Sensors: Knock sensors, Air flow meters, Accelerator Pedal Module (APM) Filters: Oil filters, Air cleaners

System Control Components

Ceramic substrates

Diesel Particulate Filters (DPFs) Engine ECUs for motorcycles Exhaust gas temperature sensor Ignition coils, Magnetos

Spark plugs Glow plugs

Exhaust gas sensors

Engine Control Components

Main Products

In fiscal 2015, to meet environmental regulations around the world, we will provide innova-tive world-first products that improve internal combustion fuel efficiency. Specifically, we will contribute to greater fuel economy and higher efficiency in internal combustion engines by increasing sales of gasoline direct injection systems and diesel common rail systems. In the field of electric motors, in addition to expanding sales of essential hybrid components such as motor generators and inverters, we will pursue miniaturization and cost reduction in these products. We will also leverage our core technologies and experience in the fields of starters, alternators, engine cooling systems, and semiconductors to develop new products including battery packs that make full use of our proprietary technologies. In aftermarket business for products including iridium plugs, we plan to invest in cost-competitive products suited to market needs and products with our proprietary technology at the core.

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Inverter

Battery monitoring units Inverters

DC-DC converters EHV Components

Alternator

ISG

Lithium-ion battery pack Starters

Alternators MG stators

Engine Electrical Systems

Fuel pump module

Fuel pumps

Fuel pump modules Fuel injectors

Direct injection components (Injector, Pump) Gasoline Injection Products

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DENSO East Japan Corporation (currently Denso Fukushima Corporation) expanded its manufacturing plant to meet demand from increasing vehicle production in eastern Japan. In July 2014, it commenced operations on the new production line for engine cooling modules (ECMs), in addition to its current production of air conditioning systems.

Business Expansion and New Companies

With Hino Motors, Ltd., jointly developed the world's first electric refrigerator system for heavy-duty trucks using a hybrid unit. This system is used in the Hino Profia in Japan. Developed a new automotive climate control unit that can be used in a wide variety of vehicles ranging from compact to luxury cars, regardless of manufacturer or sales region. The new climate control unit is deployed in Toyota Motor Corporation's new Harrier as well as in its Noah and Voxy models.

Developed a refrigerator system for marine containers based on our cooling system technology for refrigerated trucks. As an industry-first for marine containers, the refrigerator system features independent control of the rotational speed of two com-pressors via inverters, realizing major savings in fuel costs and greater precision in temperature management.

New Products and Technologies

Fiscal 2014 Topics

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Air-conditioning system Oil coolers

Engine cooling modules Reserve tanks Air-conditioning systems for cars Radiators Cooling fans Inter coolers

Thermal Systems Products

Main Products

In fiscal 2014, sales increased as a result of higher automobile output in Japan and North America, and also growth in sales in Europe.

In fiscal 2015, amid growing need for fuel efficiency, we plan to differentiate ourselves from our competitors through technologies that provide real-world improvements in fuel economy. In addition, we aim to please our customers with comfortable cabin environments that are secure and safe drawing on the key words of "human comfort."

+17.8% 1,057.5

1,245.5 Sales (Billions of yen)

Change YoY FY2013

FY2014

Results for Fiscal 2014 and Growth Strategies

DENSO's product competitiveness and robust global supply structure were behind an increase in sales to General Motors.

Jointly established Yantai Shougang TD Automotive Compressor Co., Ltd. (YST) with Toyota Industries Corporation to manufacture compressors for heating, ventilation and air conditioning (HVAC) units. The new company began operations in December 2013. Constructed a new plant at DENSO Mexico S.A. de C.V. (DNMX) in response to higher production at automakers' bases in Mexico. The new plant began making heating, ventilation and air conditioning (HVAC) units in November 2013, as well as radiators and washer systems in January 2014.

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Engine cooling module Air-conditioning systems for buses and

construction equipment Truck refrigeration units Air purifiers

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Developed a driver status monitoring system that is able to detect a driver inatten-tiveness or drowsiness with facial recognition technology. Consisting of a near-infra-red camera and an electronic control unit (ECU), the system is installed under the instrument panel visor. The ECU analyzes pictures taken by the camera of the driver's face to determine the angle of the head and openness of the eyelids. If the eyes are closed or the head is at an odd angle for a preset length of time, the system sounds an alarm for the driver, reminding them to drive safely. This driver monitoring system is currently used in the Hino Profia large truck and the Hino Selega tourist bus made by Hino Motors, Ltd.

Developed a new in-vehicle infotainment (IVI) system with dual large-size touch-panel displays. The top screen displays maps and other information, and the bottom screen is a touch panel display with smooth controls. The IVI system is used in the Infiniti Q50 made by Nissan Motor Corporation for the U.S. market.

Developed a laser radar as a sensor for safety systems that help avoid crashes and lessen the impact of collisions. A first for compact vehicles, the new laser radar is used as a sensor for the Smart Assist System that Daihatsu Motor Co., Ltd. deploys in its Move, Mira e:S, and Tanto car models.

New Products and Technologies

Fiscal 2014 Topics

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In fiscal 2014, sales increased as a result of higher automobile production, increased adoption of active safety systems, and stronger sales of IVI and instrument clusters.

In fiscal 2015, we will leverage our strengths in millimeter-wave radar, laser radar, cameras, and sonar to coordinate core sensing, control, and human-machine interface (HMI) technolo-gies as a system supplier and develop cutting-edge safety technology.

Also, as we gather increased data about not only safety but also convenience and comfort, improving HMI technologies in cars has become a more important problem to tackle. For this reason, we continue to work on development of communication between cars and between cars and infrastructure.

+9.0% 576.9

628.6 Sales (Billions of yen)

Change YoY FY2013

FY2014

Results for Fiscal 2014 and Growth Strategies

Acquired a stake in ADASENS Automotive GmbH, a developer of image recognition technologies for advanced safety systems, to help accelerate the development of active safety technologies. ADASENS develops advanced driver assistance systems, particularly in the area of image recognition technologies using cameras to detect obstacles ahead, behind, and around vehicles.

Decided to expand the two technical centers of DENSO AUTOMOTIVE Deutschland GmbH in Germany (Aachen Engineering Center and Munich Engineering Center). With this expansion, we aim to more rapidly address customer needs and enhance the design of products for local customers. We will also contribute to development in other regions by promoting future developments in advanced technological areas in Europe.

Acquired shares of Pricol Components Limited, a subsidiary of Pricol Limited, a major automotive parts maker in India, in order to expand the instrument cluster business in India. Pricol Components designs, manufactures, and sells instrument clusters for pas-senger vehicles. DENSO has a 51% stake and Pricol has a 49% stake in the company.

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Sensors and ECUs for Electric Power Steering (EPS) systems

Electric Drive Unit (EDU) for electric Variable Cam Timing (e-VCT) system Electric Control Components

Millimeter-wave radar Airbag sensors and ECUs

ABS/ESC actuators and ECUs

Millimeter-wave radars and ECUs for pre-crash safety systems and adaptive cruise control systems

Laser radars and ECUs for adaptive cruise control systems Cameras and ECUs for Lane Keeping Assist

ECUs for adaptive front lighting systems Driving Assist and Safety Products

Car navigation system Instrument cluster Instrument clusters

Head-up displays

Integrated climate control panels Smart keys

Remote keyless entry controllers Rear and corner sonars

Car security systems Body ECUs

Tire pressure monitoring system Remote touch controller

Car navigation systems

Electronic Toll Collection (ETC) on-board equipment Telematics control units

Advanced vehicle operation system In-vehicle infortainment systems (IVI) Driver status monitoring system

Information and Communications

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We took steps to increase sales of engine ECUs and various sensors to overseas auto-makers including customers in Europe.

Established the Basis Electronic Technology Unit in July 2013 for the purpose of

developing electronic systems with a bird's-eye view of the entire vehicle. We will work on creating new integrated products while enhancing standardization and security. Established a new engineering and development base in Tokyo in July 2014 to strengthen our engineering and development framework for automotive electronic components that improve environmental and security and safety performance.

Business Expansion and New Companies

Advancing the development of silicon carbide (SiC) power devices that boast consid-erable durability against high voltages and temperatures and low power loss to help realize more compact, lower cost inverters and sensors for hybrid vehicles.

Advancing the development of products integrating mechanical and electronic compo-nents including transmission, variable-cam timing, idle-stop, and motor ECUs to

achieve lower costs, better adaptability, smaller sizes, and lighter weight with the aim of increasing the appeal of electronic systems.

Fiscal 2014 Topics

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Relays Semiconductor sensor (Inertia sensor) Semiconductor sensors ICs Power modules Electronics Devices Engine ECU Engine ECUs Transmission ECUs

Power management ECUs Electronics Products

Main Products

In fiscal 2014, sales expanded firmly for electronic products for environmentally friendly vehicles, especially hybrid vehicles and cars with MAZDA SKYACTIV technology.

In fiscal 2015, while further refining our existing products, we will work to create new

products through the development of cutting-edge semiconductors and core products inte-grating mechanical and electronic components for use in environmental and safety products. We will continue to strengthen our global expansion, focusing on important customers and emerging markets.

+11.9% 342.1

Change YoY FY2013

FY2014

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Decided to establish a new company in Mexico through joint investment between ASMO Co., Ltd. and its subsidiary ASMO NORTH AMERICA, LLC., as a part of efforts to strengthen the production and supply structure in North America. The new company will start to produce small motors and related components for automobiles in April 2016. Established a new company in Myanmar through joint investment between ASMO Co., Ltd. and its subsidiary PT. Asmo Indonesia, as part of a plan to reinforce the produc-tion and supply structure in the ASEAN region. The new company began manufactur-ing components related to small motors used in automobiles in January 2014.

Built a new manufacturing facility at DENSO HARYANA Pvt. Ltd. (DNHA) to keep pace with growth in automobile production in India. In July 2013, the new plant began manufacturing small motors for products, such as windshield wipers, power windows, and thermal component engine cooling modules.

Business Expansion and New Companies

Developed a power window motor with enhanced safety features. In addition to pre-venting fingers and hands from getting caught in the window when it is raised, the new world-first safety feature entails sensors that prevent fingers and hands from getting pinched in the window when it is lowered, by stopping the movement of the glass. The motor is smaller and lighter than before, thanks to multi-polarization and improved power efficiency. We began mass producing the power window motor in Japan as the first step to expanding production to seven plants overseas.

Fiscal 2014 Topics

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Power window motor Windshield wiper system Windshield wiper systems

Windshield washer systems

Power window motors, seat motors Power sliding door motors

Power steering motors

Motors for engine control systems Other automotive motors

Main Products

Affiliated Company: ASMO Co., Ltd. In fiscal 2014, sales increased largely attributable to the increase in auto production and growth in sales of windshield wiper systems and power window motors mainly in North America.

In fiscal 2015, we aim to increase sales further by launching products tailored to customer needs, focusing on the development of unique products such as highly efficient, highly

reliable system controllers amid tightening fuel economy regulations and growing demand for environmentally friendly vehicles. We plan to expand the overseas production structure in response to customer expectations for local procurement.

+12.0% 256.0

Chage YoY FY2013

FY2014

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+6.3% 33.5

Change YoY FY2013

FY2014

Results for Fiscal 2014 and Growth Strategies

Decided to merge DENSO WAVE Incorporated, which develops and sells automatic data capture devices and industrial robots and other systems and devices, and DENSO

ELECS Co., Ltd., which manufactures products developed by DENSO WAVE, in January 2015 in order to further increase our competitiveness in the industrial equipment field.

Business Expansion and New Companies

First in the world to develop a robot arm that moves pieces in shogi (Japanese chess) based on commands from computer software. The robot arm is based on the VS-060 six-axis articulated robots, which offer the world's highest speed and precision in their class. This robot arm was featured in the Third Computer vs. Player Shogi Competition. Launched the WS1-QB scanner, a 35-gram scanner that the user wears on their head, enabling them to scan bar codes and QR codes without touching the scanner.

New Products and Technologies

Fiscal 2014 Topics

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Cooling units for electronic devices (mobile phone base stations and other devices) Spot coolers and heaters

Refrigeration and Air-conditioning Systems Industrial robots

Programmable controllers

Factory Automation (FA) Products

Bar code handy scanners and handy terminals QR code scanners and handy terminals

IC card readers/writers

Radio Frequency-Identification (RF-ID) systems

Industrial robot Automatic ID Data Capture Devices

Main Products

Affiliated Company: DENSO WAVE INC. In fiscal 2014, sales rose 6.3% compared with the previous fiscal year, thanks to higher sales of AUTO-ID products in Japan and industrial controllers inside and outside Japan.

In fiscal 2015, we will focus on strengthening core businesses, creating new businesses, and expanding business domains in line with the 2015 Mid-term Policy, and translate these

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In fiscal 2014, overall sales were slightly decreased from the previous fiscal year. Sales of HEMS increased as brand awareness of smart houses improved, but this growth faded by weaker sales of CO2 refrigerant heat-pump water heaters in the market as a whole.

In fiscal 2015, outside the automobile field, we aim to launch products created with our proprietary technologies and expand our presence in the housing equipment business through the application of core automotive technologies.

+10.9% 9.2

Chage YoY FY2013

FY2014

Results for Fiscal 2014 and Growth Strategies

Introduced a new model for home energy management system (HEMS) that helps homeowners conserve energy. This new model lets homeowners see in real time their electricity usage in each area of their home on a smartphone, tablet, or PC. While at home, users can also turn on and off home appliances compatible with HA and ECHONET standards.

Fiscal 2014 Topics

2012 2013 2014 (FY) 10.7 9.2 10.2 Net Sales (Billions of yen)

Consumer Products

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CO₂ refrigerant heat-pump water heaters Automatic faucets

Central air conditioner

Home energy management system (HEMS)

CO₂ refrigerant heat-pump water heater

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* DENSO projects: accelerated development limited to 2 years at business groups or Engineering Research & Development Center

Technology management strategies

In a global environment of continued severe competition, DENSO has further strengthened its R&D development in order to create new value and produce new technologies. In con-junction with this, we have instituted roadmaps to track the progress for each development span from the short term (up to 5 years) through the medium term (up to 10 years) to the long term (more than 10 years). These roadmaps are updated every year, incorporating changes in society and regulations, and shared between each division and engineering research and development center so that decisions can be made about which projects to start and which to alter or terminate. Roadmaps are used throughout the Group, including proposals for unique kinds of value and technologies in each region. Presently, the Compa-ny's R&D Division makes decisions about new technology proposals, but in the future we aim to build a global R&D structure centered on European and North American sites.

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In order to develop products that are optimized to meet the conditions and needs in each of the world's regions, the DENSO Group maintains seven technical centers and is strengthening its global development network.

Overseas in fiscal 2014, we expanded two technical centers in Germany (the Aachen Engi-neering Center and the Munich EngiEngi-neering Center) and invested in the German company ADASENS Automotive GmbH, which develops image recognition technologies for advanced active safety. In Japan, we established a design and development base for automotive semi-conductor circuits in Tokyo, aiming to enhanced our advanced technologies in environment, security and safety fields.

In the fiscal 2014, R&D expenditure amounted to ¥368.7 billion, of which the overseas

segment accounted for approximately 15%. Going forward, we will be enhancing the utiliza-tion of our overseas bases and are thus planning to increase the proporutiliza-tion of overseas R&D expenses.

Development Network

Core / component technologies for products

Technologies

Adjustment and reconciliation Products adapted to systems

Products

Adjustment and reconciliation Necessary future systems

Systems

Future automobiles, the automotive society

Customer value

Social trends, changes in regulations

Society, regulations

Technology management strategies

New value

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R&D Expenditures / Ratio of R&D Expenditures to Net Sales

South America North America

China Asia & Oceania

India Europe

Core Technical Centers

In fiscal 2015, we are expecting R&D expenditure of ¥390.0 billion and will continue R&D

activities at an ongoing high level. We will also continue to conduct enterprising R&D with a

view to enhancing our competitiveness. We consider R&D expenditures at 8%–9% of sales to

be an appropriate level and will work proactively on the power shift to priority fields, enhanc-ing our integrated development/production network, and raisenhanc-ing operational efficiency by the promotion of standardized procedures.

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DENSO will continue to advance R&D with an eye to the future, to reach the stage where driving is made safer, more secure, and more enjoyable by car to driver communication. More development of the technologies installed in the Interactive Communication Cockpit will be conducted toward product commercialization at an early stage.

These technologies link meters with a head-up display and remote touch controller to provide drivers with necessary video and audio information at the appropriate time and in an easily understood format.

HMI technologies

These technologies combine information from multiple sensors to more reliably project rec-ognized images showing the presence of pedestrians and bicycles or leverage vehicle-to-ve-hicle communication and infrastructure-to-vevehicle-to-ve-hicle communication technologies, so that drivers detect the presence of blind-spot hazards.

Sensing technologies

Realized through DENSO's accumulated sensing and human-machine interface (HMI) technol-ogies, the Interactive Communication Cockpit represents the safety and security technolo-gies of the near future.

Interactive Communication Cockpit

Amid reports that errors in awareness and handling as well as of judgment on

the part of drivers are contributory factors in 75% of all road traffic accidents,

DENSO is accelerating the development of technologies linked to proper car

handling. These technologies correctly recognize the driving conditions, convey

audio and video information about those conditions to drivers, and are linked to

proper car handling in order to accurately support driver awareness, handling,

and judgment. Here, we provide an example of those efforts.

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Depending on the driving situation, the large LCD flexibly adjusts its display mode to make the information easier to read.

Large LCD Display: Presents information flexibly

2

A friendly humanoid robot provides information through dialogue based on a driver's individuality and preferences. The robot is designed to give a sense of security, and a safe and fun driving experience.

Communication Robot:

Provides information through dialogue with the driver.

1

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When the driver grasps the steering wheel with both hands, built-in sensors assess the driver's health.

Biometric Monitor: Checks the driver’s health

5

The mirror covers a wider field of view than ever before. In combination with image processing technologies, the mirror can clearly present information that requires the driver's attention.

Electronic Rearview Mirror: Clearly presents information

4

Drivers can safely obtain information while keeping their eyes on the road ahead. The large color display presents information on the driver's forward view in a timely and easy to see manner.

Large Head-up Display: Presents information in a safe manner

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DENSO Corporation has adopted a corporate auditor system. In addition to statutory bodies such as the General Meeting of Shareholders, Board of Directors, Board of Audit and Supervisory Board Members and Accounting Auditor, DENSO Corporation has devel-oped various internal control mechanisms. For rapid decision making and the execution of our operations, we have adopted an executive officer system that separates and clarifies the roles of the Board of Directors that is charged with management (decision making / oversight) and the senior managing directors and managing officers who are responsible for business execution.

Promotion Structure

DENSO believes that establishing a corporate governance system designed to strengthen Group competitiveness is the key to maintaining and improving long-term corporate performance in a quickly changing global marketplace. It is also essential to promoting CSR management that is essential for sustainable growth on an ongoing basis. We are working to strengthen our corporate governance in accordance with this belief.

Basic Stance

Corporate Governance

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※Total for the period from April 2013 to March 2014

None Retirement benefit allowance system for

Audit and Supervisory Board members

Disclosure of total figure Remuneration disclosure

4 Number of independent officers

Stock option system Policy regarding incentives for directors

13 Number of meetings of Board of Directors※

3 Number of outside Audit and

Supervisory Board members

5 Number of Audit and Supervisory Board members

1 year Term of directors

2 Number of outside directors

14 Number of directors

Audit & Supervisory Board system Format

As of June 20, 2014

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Outside Directors 32 23 ― 9 ― 3 Audit and Supervisory Board members 96 58 _― 38 _― 2 Directors 989 573 _― 416 _― 16 Position Total compen-sation (¥ million)

Total compensation by type (¥ million) Base _optionStock Base Retirement

benefits Directors / Audit and Supervisory Board members Compensation of Directors and Audit and Supervisory Board members for fiscal 2014 is as follows.

Compensation of Directors

Monthly remuneration has been set within the range of the maximum amount of total compensation (Directors: ¥80 million a month; Audit and Supervisory Board members: ¥15 million a month) determined by resolution at a General Shareholders' Meeting. Upon receipt of the Board of Director's authority, the representative director decides the monthly remuneration of each director on the basis of Company-set criteria, the remu-neration of each Audit and Supervisory Board members being decided following consulta-tion with the auditor.

Following approval by resolution at an Ordinary General Shareholders' Meeting, a number of stock options are granted to directors by rank. However, since it was difficult to offer stock options as an incentive following the chaos in the markets, the stock options granted up to and including fiscal 2010 were continued until the end of the period in which they could be exercised, and stock options not granted from fiscal 2011 onward. Following its resolution at an Ordinary General Shareholders' Meeting, bonuses to be paid to the Board of Directors receives approval. The amount of bonus for each director, which takes into account the level of contribution directors have made to the Company, is then determined by the representative director upon receipt of the Board of Directors' authority.

At the Board of Directors' meeting held on May 12, 2014, a resolution was passed abol-ishing the payment of bonuses to auditors to further strengthen auditor independence with regard to management.

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Remembering to express appreciation, providing ureshisa (consideration) and yasashisa (fulfillment), and providing timely and sincere solutions / Transactions based on free and fair competition

III. Earning trust and meeting the expectations of customers

Understanding DENSO's philosophy and values and pursuing personal development / Respecting human rights, ensuring open communication and respecting the privacy of others / Maintaining mental and physical health and maintaining a healthy workplace / Maintaining order and ethics in the workplace / Maintaining a clear distinction between public and private matters

II. Creating a vibrant workplace

Recognizing your role in society / Integrity as the foundation of trust / Compliance with laws and ethical principles

I. Your conduct as a member of the DENSO Group

Key Items in the Code of Conduct for DENSO Group Associates

We believe that key actions to earn the trust and understanding of society pertain to the DENSO Group's observance of all applicable national and regional laws and all Group asso-ciates' fair and faithful conduct with the highest ethical standards. We see compliance as not only the observance of laws but also a responsibility to meet the expectations of stakeholders. In this sense, we consider it to be the cornerstone of all conduct.

Based on this recognition, in 2006 we adopted the Code of Conduct for DENSO Group Associates, which clearly indicates the standards of conduct for each and every associ-ate. While developing the Code of Conduct for DENSO Group Associates, we consulted the United Nations Universal Declaration of Human Rights, United Nations Global