Social Responsibility of DENSO

Compliance

Basic policy

The “Code of Conduct for DENSO Group Associates,” revised in April 2006, stipulates the compliance with legislation and the respect for culture and custom of the countries or localities in which the Company does business. Also, it stipulates the behavior of every associate subject to the highest ethical standards. The Code is shared with all group companies in Japan, while its spirit and principle are shared with the group companies overseas.

Promotion structure

As a part of the internal control system, in 1997 DENSO established a “Business Ethics and Compliance Committee” (Secretariat: Legal Department) chaired by a director of DENSO in the highest tier. From 2003, an internal whistle-blowing system called the “Business Ethics Hotline,” which is dealt with by external lawyers and Legal Dept., has been available. As of May 2006, the Company has expanded the coverage of the system to include the 300 first-tier suppliers and the Company operates it pursuant to the Whistle-blower Protection Act in Japan.

In North America, DENSO has established in 1999 the “North American Compliance Committee” and then the Compliance Officer has been responsible for penetrating the respective guides and operating a local hotline. Besides, in fiscal 2006, the Company started anew the Compliance Audit.

In Europe, the “EU Version of Code of Conduct for DENSO Group Associates” was formulated in fiscal 2006. From now on, DENSO will spread it out sequentially throughout its business sites in the EU, reflecting on the cultures and the legislation of respective countries. Also, the Company is discussing the introduction of a hotline subject to the guidelines unique to Europe.

In China, the Company begun discussions regarding the introduction of a compliance program in fiscal 2008.

In addition, once every year, the Company holds the “Global Legal Conference” for leaders of legal affairs at headquarters in Japan and at the regional headquarters in the U.S.A., Europe, and China, allowing them to share relevant information and issues.

Education and awareness-raising

To diffuse and embed the awareness of compliance, since 2002 DENSO has implemented seminars by organizational class. In May 2006, the Company installed Compliance Leaders (who are also CSR Leaders) at DENSO Japan and at each group company in Japan to conduct education and awareness-raising by workplace. In addition, Legal Dept. at DENSO Japan has strived to raise awareness of associates by publishing the “Business Ethics Newsletter” (eight times yearly), by enhancing the content of the Internet website for business ethics, and by conducting visiting legal educations. In October 2006, “Business Ethics Forum” was held for chief executives and Compliance Leaders at group companies in Japan.

Check in activities of compliance

Since 2003, every October has been set for “The Month of Business Ethics in DENSO Group,” during which a company-wide standardized self-check has been conducted. Also, since fiscal 2004, the “Survey of Business Ethics” has been implemented with the aim of comprehending the diffusional degree of respective measures and the potential risks. The results have been reported to the Business Ethics and Compliance Committee. In fiscal 2006, the scope of the survey was expanded to include temporary associates. The results of the roughly 4,000 surveys returned confirm that there is a gap in awareness of compliance between superiors and subordinates, and that there is a misunderstanding on the internal whistle-blowing system. Based on these feedbacks, in fiscal 2007 DENSO will promote focused activities to raise awareness at the managerial level and to correct the understanding of internal whistle-blowing system.

Results of activities in fiscal 2006

Entire procedure for the activities of business ethics