8701SK-005 67-95B

2016

Protecting Lives, Preserving the Planet, and Preparing a Bright Future for

Generations to Come

1

We at DENSO have a mission, as

stated in our Philosophy: Contrib-

ute to a better world by creating

value together with a vision for

the future. Tackling that mission is

more important than ever.

The world’s population will exceed

eight billion people by 2025, and

global emissions of carbon dioxide

will exceed the amount that the

Earth can absorb by more than

threefold. The continuing growth

in vehicle ownership is a factor,

of course, in that output. It also

presents other challenges, includ-

ing an increase in traffi c accidents.

We need to maximize the conve-

nience and other benefi ts of motor

transport in ways that minimize the

drawbacks.

2

Contents

1 DENSO Goals

3 Automotive Field

5 Environment

7 Safety

9 Comfort

11 Convenience

13 Non-Automotive Fields

15Consumer and

Industrial Products

17 New Business Fields

19 DENSO and Society

21 Monozukuri

23 Hitozukuri

25 Corporate Citizenship

27 Company Profi le

Our Long-term Policy articulates a

shared commitment by all DENSO em-

ployees to optimize our social impact

in all our operations. The Long-term

Policy covers the 10 years to 2020. It

calls for us to step-up our efforts to

preserve environmental quality and

to ensure safety while continuing to

provide people everywhere with the

comfort and convenience of driving.

In non-automotive operations, we are

working to improve the quality of life

by deploying technologies nurtured in

our automotive operations as well as

completely new technologies. Those

technologies include advances in home

energy management systems and in

health maintenance and medical care.

At DENSO—all 150,000 of us world-

wide—are working in the spirit ex-

pressed in our Long-term Policy’s

slogan: Protecting Lives, Preserving the

Planet, and Preparing a Bright Future

for Generations to Come.

333 4

At DENSO, we work to improve the three basic

functions of the automobile: moving, turning,

and stopping. In addition, we strive to enhance

the driving experience for people worldwide.

This means minimizing the adverse effects of

vehicles, such as environmental degradation

and traffi c accidents, while providing the

convenience, the comfort, and the other benefi ts

of motor transport.

As a leading automotive supplier, we strive

to help shape a world where people, the

environment, and cars coexist in harmony.

We are an automotive industry leader in R&D

spending, allocating approximately 9 percent

of our revenue to research and development.

In 2015, this totaled 399.3 billion yen

(US$3.5billion). This supports the work of our

engineers who, day after day, conduct R&D and

product design at our technical centers around

the world.

4

AutomotiveContinuous innovation to build a sustainable

automotive society

Striving for Ultimate Effi ciency in All We Do to Reduce CO2

DENSO creates products that work to improve

performance and preserve the environment. DENSO’s

gasoline/diesel engines, hybrid/electric vehicles and

other powertrain products such as fuel cell vehicles

aim to reduce CO2 emissions.

We also strive to make cars environmentally–friendly

throughout their lifecycle. Our activities include:

Making “Clean Factories” to minimize emissions

and hazardous materials used in our production

processes; reduce the use of natural resources and

environmentally hazardous substances, and improve

recyclability of components.

5

Environment

Environment6

Products for fuel cell vehicles, the

next generation environmentally-

friendly vehicles

DENSO developed a new fuel cell monitoring unit,

pressure sensor, and hydrogen-charging electronic

control unit (ECU) in 2014 using technologies from

developing hybrid vehicle components. Our products and

technologies such as power control unit, cooling module

and cooling pump are used in “Mirai,” Toyota Motor

Corporation’s fuel cell vehicle.

Fuel Cell

Monitoring Unit

Cooling Module

Hydrogen-

Charging ECU

Power Control Unit

Pressure

Sensor

Cooling Pump

Temperature

Sensor

Infrared Ray

Transmitter

Water Control Valve

Fuel Cell Control Products

Power Electronics Products

Cooling System Products

Hydrogen System Products

7

For an accident-free society where drivers, passengers, and pedestrians can have peace of mind

Driving a car brings joy and convenience. However,

as long as humans are driving, we cannot

prevent all driving errors. DENSO combines high-

precision sensors, Human Machine Interface, and

communication technologies to develop active safety

products for preventing collisions and passive safety

products for protecting the driver, passengers, and

pedestrians by minimizing the impact of the collisions

when accidents occur. Furthermore, DENSO

accelerates the technology development of advanced

driving support to keep the driver away from danger

and automated driving.

Safety

Safety8

Image of HUD Display Currently under Development

Providing the right information,

in the right place, at the right time

The head-up display (HUD) is a technology that takes

the vehicle speed, various critical warnings, and other

information needed in driving and displays it on the

windshield. This allows the driver to get information

quickly while driving, without having to make large

movements in the line of sight. This provides the driver

with greater safety and assurance and is expected to help

reduce accidents.

DENSO is working toward commercializing the TFT* liquid

crystal HUD in 2017. Aiming to improve the visibility, we

plan to produce 20-inch (50.8cm) models that will be the

world's largest HUD for use in cars.

DENSO's strength is our capability to incorporate our

car navigation systems and image-sensing technologies

to the new HUD technology which will provide "turn-by-

turn guidance" using arrows, warnings when the distance

between the vehicle and the car in front is too close, and

other technologies and functions.

* TFT: Thin Film Transistor

Arrow length and color call the driver's attention to the decreasing space between the vehicle and the car in front of it

"Turn-by-Turn Guidance" indicates the driver's path with arrows

Towards a society in which everyone can enjoy their “moving space” and their time in it

Regardless of how extreme conditions outside

the vehicle may be, we want the cabin interior to

remain a calm, comfortable space. That way, we

can realize the usefulness of the vehicle and enjoy

driving to the fullest.

As a leading manufacturer of automotive air

conditioners, DENSO continues to spur advanced

climate control technology in pursuit of that “quality

sense” that allows the driver and all passengers

to truly enjoy this moving space and the time they

spend in it.

9

Comfort

Comfort10

Outer fins

Refrigerant tube

Cold storage case

DENSO technologies ensure

environmental performance

and comfort

A vehicle’s air conditioner cycle runs on power from the

engine. The stop/start function thus interrupts the supply

of cooled air, and the temperature in the vehicle interior

rises. Our challenge was to fi nd a way to keep drivers

and passengers comfortable without increasing fuel

consumption and carbon dioxide output. Our answer

was the DENSO Cold Storage Evaporator.

An evaporator exchanges heat between warm air and

cold refrigerant to supply cooled and dehumidifi ed air.

Our evaporator contains cold-storage material that can

retain a low temperature. The air conditioning system

cools the cold-storage material while running on power

from the engine, and the material serves as coolant

during the engine stop.

Cold Storage Evaporator

Construction of the Cold Storage Evaporator

Cold StorageCooler temperatures

from the refrigerant

tube retained in

the cold storage

medium

ReleaseCool air is released

from the cold storage

medium through the

refrigerant tube and

outer fi ns

For a world of luxurious drivingallowing smooth, stress-free movement

DENSO anticipates those features that are likely to

prove convenient, and then goes on to create products

incorporating these features. Examples include meters

with superior visibility to reduce driving stress, anti-theft

systems that utilize information and communications

technologies, car navigation systems that allow vehicle

occupants to enjoy a wide variety of entertainment

news and information, and more. When it comes to

convenience, we continue to provide new products

using a broad range of DENSO technology.

11

Convenience

Convenience12

NaviBridge connects your mobile

devices to navigation systems

You can search your destinations in your favorite

compatible apps on your mobile devices and send it to

compatible in-vehicle navigation systems with one tap

on the devices. It eliminates time and effort to type-in

the destinations on your navigation system before you

start driving.

With NaviBridge, you can also share your location and

searched destinations with your family and friends via

e-mail and Social networking service (SNS). It is a handy

app for a meet-up.

DENSO has been developing and manufacturing car

navigation systems and technologies for more than 30

years. By taking full advantage of its expertise, DENSO

will continue to enhance convenience for more users by

providing services that connect car navigation systems

with smartphones.

NaviBridge

For more information

Non-Automotive

13 14

Working toward a society where everyone can enjoy,

safety and a good quality of life

Over the years, DENSO has expanded our automotive expertise to

include advanced technologies, such as the semiconductor, heat

exchange, communications, and sensing technologies.

We also apply them in non-automotive fi elds.

Expanding our technological scope and partnerships,

we will continue to develop products and technologies

that help solve new social problems

and bring people a good quality of life.

15

Home & Industry

Applying core automotive technologies to non-automotive fi elds

DENSO applies the technologies and expertise

developed over the years to the consumer and

industrial product fi elds. We are developing products

in a variety of fi elds, for example incorporating our heat

exchange technologies in a CO2 heat pump hot water

supply system, utilizing our Integrated Circuits (IC) and

other electronics technologies with Handy Terminals,

and other automatic recognition products, and further

applying our production technologies in factory

automation products (robots).*Automatic recognition and factory automation products are handled

by DENSO WAVE, Inc.

Consumer and Industrial Products

16

Development of the QR Code

Now generally visible in daily life, the QR code

was originally developed and used by DENSO in

production control. This two-dimensional code

developed to hold from dozens to hundreds of

times more data than the barcode, has successfully

spread and is now widely used.

Home Appliances

CO2 Heat Pump Hot Water Supply System

Vastly reduces the energy used in heating water

Spot Coolers

Simple to install, highly effi cient cooling for people and objects

Barcode and 2D Code Handy Terminals

Rationalizing distribution and logistics operations and management

Vertical Articulated Robot

Realizing effi cient, high-quality production

Commercial Air Conditioners

Auto ID Data Capture Devices

FA Products (Robots)

17

New Business

Aspiring to solve new social issues with DENSO technologies

Our business activities are always based on DENSO's

philosophy of contributing to the well-being of people

around the world. We focus our efforts on finding

solutions to challenges facing the elderly, energy

problems, and other issues facing society. We are

applying current technologies and collaborating on

projects with new partners in order to move into

other fields where DENSO technologies can make a

difference.

New Business Fields

Agricultural support utilizing environment greenhouse control systems

18

Micro GridWe are helping to realize a low-carbon

society through micro-grid products

and technologies including Home

Energy Management Systems (HEMS),

storage batteries, V2H (vehicle-to-

home) power supply systems, and

other products that create, store,

and conserve energy in the age of

connected cars and homes.

Electric Power AssistElectric power assist technology

derived from our automotive motor/

control systems contributes to a safer,

more secure and eco-friendly society.

SecurityOur sensing technologies are

contributing to safer and more secure

living.

HealthcareOur biosensor system and surgical-

support robot help in disease

prevention, early detection and

recovery, improving the quality of life.

Biotechnology (Micro Algae)We aim to contribute to environmental

quality by utilizing an effi cient algae

cultivation process for CO2 absorption

and by producing biofuel as an

alternative to fossil fuels.

Agricultural Support Utilizing greenhouse environment

control systems and energy

conservation technologies, we

contribute to more effi cient and stable

vegetable cultivation and improved

agricultural competitiveness.

Cold ChainThrough energy-saving cooling

and freezing technology, as well as

technology to preserve freshness,

we are contributing to safety and

assurance in food transport and supply

from production to consumption.

Community Network Solution BusinessWe support information distribution

within communities to help enhance

safety, security, and convenience in

daily lives.

19 20

Corporate Social Responsib ility

Aiming to be a company trusted and backed by the community

Our corporate activities are founded upon

the trust and enthusiastic support

we receive from our customers around the world,

our shareholders and investors,

suppliers and employees,

and from the local and international communities.

We put corporate social responsibility (CSR)

front and center in management

and this is refl ected in

our manufacturing, human development, corporate

contribution activities,

and in all our corporate conduct.

Engineering and technique, hand in hand

“Engineering” and “technique” are not true synonyms.

Our engineers substantiate the theories behind

various research results and new concepts, and then

describe these ideas in design drawings. It is our

superior technicians who then give these theories

concrete form as products. We make full use of

molds, jigs, and other tools to create prototypes,

evaluate their performance, and then develop and

manufacture production facilities to enable mass

production of the items.

Our engineers and technicians collaborate throughout

these processes to clear the high hurdles we

encounter. This close fusion of engineering and

technique results in the birth of the products that are

the fi rst and best of their kind in the world.

21

Monozukuri - Manufacturing

World’s smallest motorized car, recognized by the Guinness Book of World Records

MonozukuriEngine ECU

Piezo Injector

Supply Pump

Common Rail

Product development with success

or failure riding on a gap size of a

mere 1/60 the width of a human hair

Common rail systems exhibit revolutionary environmen-

tal performance by delivering jets of ultra-fi ne, ultra-high

pressure fuel into diesel engine combustion chambers

for complete fuel combustion. The nozzles of these fuel-

spraying units, called “injectors,” have an allowable gap

of just one micron*. That’s 1/60 the width of a human

hair. A gap any bigger than this results in a loss of the

airtight seals. A gap any smaller prevents the injector

from operating smoothly.

After many trial and error, our engineers and technicians

worked together to overcame this challenge. They de-

veloped a micron-machining technology of fl owing clay

mixed with micro-gain whetstones. The main reason for

this success was our technicians’ miraculous ability to

detect by sight and touch differences of less than one

micron.*1/1000 of a millimeter.

Common Rail System

Piezo Injector

22

Monozukuri is Hitozukuri (Manufacturing is human development)

Human capabilities are what propel the high-level

craftsmanship in manufacturing that underpins ad-

vances in high-tech automotive components. In 1954,

soon after the company’s founding, DENSO estab-

lished a Technology Training Center, which later de-

veloped into the “DENSO Technical Skills Academy.”

This company school has now produced more than

9,000 graduates.

DENSO’s corporate environment promotes joy in

improving engineering and technical skills. This has

resulted in 31 gold medals at the WorldSkills Compe-

tition, an event where youths from around the world

vie in demonstrating their technical skills. Additionally,

those programs have led to our inimitable system of

product development, the establishment of 34 skill

training room around the world, and many other simi-

lar achievements.

Education on DENSO-way Monozukuri

23

Hitozukuri - Human Development

Hitozukuri

Original Hitozukuri creates drama

It was in 1997, on the fi nal day of competition in the pre-

cision device assembly category at WorldSkills Competi-

tion. DENSO’s entrant (representing Japan) pointed out,

“There’s a one-millimeter error in the drawings, so even

if I machine this correctly, the device won’t work.” In

what was an unprecedented turn of events, the judges

checked the drawings and confi rmed the error, then af-

ter distributing supplementary tools, reran the competi-

tion. The DENSO competitor won the gold medal with a

world record-breaking score, and in the process marked

a legendary moment in the history of this competition.

Our tradition of developing such superior technicians

has crossed both time and seas at our production sites

around the world.

At our Thai training academy, established in 2005,

“Monozukuri is Hitozukuri”

has been adopted as the

slogan for the school,

which has produced a

st r ing of compet i tors

representing Thailand,

Indonesia, and Vietnam at

WorldSkills Competition.Original production equipment developed by staff at overseas site

Gold Medal from WorldSkills Competition

24

Gold 31

Silver 16

Bronze 14

Number ofMedals Won

61

WinningPercentage66.3 percent

Number of Medals Won and Winning Percentage at WorldSkills Competition (As of August, 2015)

WorldSkills CompetitionHeld every other year since 1950. Open for entrants aged 22 or younger, who won fi rst place of the domestic competition.DENSO’s aim for the entry is not only to achieve excellent results, but also to improve systematic human development and pass on superior techniques to the next generations. Through the training for the WorldSkills Competition, the young technicians improve their spirit, technique and physical condition for fi ght and prepare to be advanced experts in the future.

As a corporate citizen,as global citizens

DENSO is committed to building a sustainable society.

We draw on all the resources of the DENSO Group to

participate in community support programs and projects,

focusing on typical DENSO themes such as “Harmony

with the environment,” “Safe and secure community

building,” “Hitozukuri (development of youth and support

for the disabled).” As our employees and individual group

companies work together on these projects, we actively

promote programs designed by DENSO and a culture of

community engagement.

PriorityAreas

Corporate Climate

Basic Policy

Wheelchair Repair Activities (Thailand / Japan)

25

Corporate Citizenship

1. Harmony with the environment2. Safe and secure community building3. Hitozukuri - Development of youth - Support for the disabled

Creating an environment that encourages each employee to become involved in our activities

CorporateCitizenship

26

Harmony with the environment

Sustaining a healthy local natural envi-ronment, now and in the future

Our business activities

are always based on

DENSO’s philosophy of

contributing to the well-

being of people around

the world. In addition

to our environmentally-

friendly manufacturing and

production practices, we are actively involved in activities to

help preserve the natural environment in local communities

that future generations can be proud of.

Safe and secure community building

Supporting local communities by pro-moting safe driving

With the aim of protecting

lives around the world,

DENSO strives to

develop technologies and

manufacturing practices

with a particular emphasis

on safety. We also work

globally to improve traffi c

safety so that everyone, especially our children and senior

citizens, can live with greater peace of mind.

Hitozukuri

(Development of youth and support for the disabled)

Aiming for human development in areas of DENSO’s expertise

DENSO supports hands-

on activities to promote

science, technology,

engineering, and math as

the need for professionals

in these fi elds grows.

We also support the

independence of disabled

persons by donating wheelchairs as well as supporting

sports activities.

Tree planting (Spain)

Traffi c-safety Lessons (Indonesia)

Science School (Japan)

companyprofi le

27

Corporate Data

28

Company Name DENSO CORPORATION

Established Dec. 16, 1949

Head Offi ce 1-1, Showa-cho, Kariya, Aichi 448-8661, Japan

Capital ¥187.4 billion [US$1.7 billion]

Revenue Consolidated Basis: ¥4,524.5 billion [US$40.2 billion]

Operating Profi t Consolidated Basis: ¥315.7 billion [US$ 2.8 billion]

Profi t*Profi t attributable to owners of the parent company.

Consolidated Basis: ¥244.3 billion [US$2.2 billion]

EmployeesConsolidated Basis: 151,775 Non-consolidated Basis: 38,490

Consolidated Subsidiaries188 (Japan 62, North America 28, Europe 34, Asia 58,

South America/Others 6)

Affi liates Under the Equity Method

36 (Japan 13, North America 4, Europe 4, Asia 13,

South America/Others 2)

Profi le

*U.S. dollar amounts have been translated, for convenience only, at the rate of 112.68 yen = US$1, the approximate exchange rate prevailing on March 31, 2016. Billion is used in the American sense of one thousand million.

Consolidated Revenue by Business Group

Consolidated Revenue by DENSO Company Locations

Japan39.8％

North America23.9％

Asia22.4％

Europe12.6％

South America/Others1.3％

Thermal31.2％

Powertrain Control35.8％

Information and Safety Systems15.2％

Small Motors 6.8％

Other Automotive 1.4％

New Business1.4％

Electronic 8.2％

¥4,524.5 billion ¥4,524.5 billion

DENSO Global Website Facts & Figures

As of March 31, 2016

%(billion yen)

0

100

200

300

400

500

0

2

4

6

8

10

2012 2013 2014 2015 (FY)2016

R&D Expenditures

Ratio to Revenue

8.8

399.3

9.29.59.5 9.49.49.0

396.4368.7

335.5298.4

Corporate Data

3029

As of March 31, 2016

Revenue Operating Profi t

(billion yen) (billion yen)

0

400

2013(FY)

300

200

100

2012 2014 2015 (FY)20160

1,000

2013

2,000

3,000

5,000

4,000

20142012 2015 2016

4,524.54,309.8

4,095.03,580.9

3,154.6

315.7

160.7

262.4

371.4331.4

Profi t*1 R&D Expenditures

(billion yen)

0

300

200

100

20142013 (FY)2015 20162012

244.3258.4

277.2

181.7

89.3

Global Network (Consolidated Basis)

63

66,311

JAPAN

* Number of companies, Number of employees

*Figures of fiscal are based on IFRS.

*Figures represents total revenue by DENSO company locations, including sales between DENSO companies.

34

15,646

EUROPE593.6

554.8498.9

28

21,513

NORTH AMERICA

966.5

(billion yen)

(FY)2014 2015

1,112.7

2016

816.6

1,000

1,500

500

2,000

2,500

3,000

0

(billion yen)

(FY)2014 2015 2016

6

3,265

SOUTH AMERICA　OTHERS

74.3 73.880

0

20

10

30

50

40

60

70

(billion yen)

(FY)2015 20162014

59.5

ASIA

58

45,040

943.11,049.7

1,161.2

2,716.7 2,664.5 2,646.6

600

0

100

200

300

400

500

(billion yen)

(FY)2014 2015 2016

(billion yen)

(FY)2014 2015 2016

1,200

1,000

0

200

400

600

800

12,000

10,000

0

2,000

4,000

6,000

8,000

*1：Profit attribatable to owners of the parent company.

*Figures of fiscal 2013, year ended March 31, 2013 and prior are based on Japanese accounting standards. Figures of fiscal year 2014, 2015 and 2016 are based on IFRS.

DENSO Global Website Global Network