Highlights and Lowlights in Fiscal 2018 (April 2017–March 2018)

In aiming to enhance its level of CSR management, DENSO believes in the importance of increasing management transparency by proactively disclosing negative information together with performance reports and making ongoing improvements after ascertaining new challenges. Since fiscal 2009, we have listed highlights and lowlights from an objective standpoint to increase visibility and have reported this information to all stakeholders.

April
HighlightsDENSO Blossom Commences Operations
Twenty-One Employees with Disabilities Join the Company, Which Holds Opening and Orientation Ceremonies

DENSO Blossom Commences Operations
Twenty-One Employees with Disabilities Join the Company, Which Holds Opening and Orientation Ceremonies

May
HighlightsAmakusa Takushin High School, DENSO, and the City of Amakusa Sign Agreement to Make Use of Local Resources in Education

Kumamoto Prefectural Amakusa Takushin High School, the city of Amakusa, and DENSO have signed an agreement to resolve issues in the community, including human resource development, by making use of local resources in Amakusa.

Under this agreement, the three parties will endeavor to raise awareness among students about resolving issues the community faces, leveraging DENSO’s research initiatives involving microalgae, the extensive specializations of the teaching staff at Amakusa Takushin High School, and facilities offering comprehensive industrial education. The aim of this agreement is to develop the human resources who will invigorate local industries—the future of Amakusa.

HighlightsDENSO and Nagoya University Sign Agreement on Value Creation and Joint Education
Through This Industry–Academia Collaboration, Conducting Exploratory Research Themed on “Movement” and Cultivating Value-Creating Human Resources

We have entered an agreement with Nagoya University, one of Japan’s national universities, to collaborate on exploratory research and joint education linked to value creation.

Under this agreement, DENSO and Nagoya University will make effective use of each other’s human resources, with specialists in such areas as sociology, psychology, and economics, as well as engineering, to promote exploratory research aimed at creating value for future society on the theme of “harmony between moving objects and people.” At the same time, we will strive to cultivate human resources that create value.

June
HighlightsCommencement of Virtual Power Plant Project in the City of Toyota

Chubu Electric Power Co., Ltd., Toyota Motor Corporation, and Toyota Turbine and Systems Inc. have begun working on a virtual power plant project. Aimed at producing renewable energy locally for local consumption in the city of Toyota, this virtual plant will be designed to function like a physical power plant—pooling various customers’ energy resources and providing electricity that has been generated from renewable sources to households and companies according to their needs.

Supplies of wind, solar, biomass and other types of renewable energy generated by facilities in the city of Toyota are affected by weather. This project involves energy management to adjust demand in accordance with renewable energy supply and verify the feasibility of local production of CO2-free renewable energy for local consumption.

October
HighlightsCity of Owariasahi, Nagoya University, and DENSO Sign Agreement to Cooperate on ICT-Leveraged Urban Development and Disaster Response Measures

We have entered an agreement with the city of Owariasahi and Nagoya University to collaborate on ICT-leveraged urban development and disaster response measures. In fiscal 2017, our three organizations worked together to develop an app for disaster prevention awareness that makes use of municipalities’ open data.

Under the current accord, we will step up collaboration toward future commercialization through a focused promotion of urban development and disaster response measures that will contribute to local community development.

LowlightsHigh Court Ruling on Suit Seeking Retraction of Tax Authorities’ Decision on Reassessment of Profits under Anti-Tax Haven Rules

DENSO had received a notification from the Nagoya Regional Taxation Bureau indicating that DENSO’s subsidiary in Singapore was not subject to exemptions to anti-tax haven rules, and that DENSO was thus required to amend its reported taxable income for the two fiscal years ended March 31, 2008 and 2009, to declare income of approximately ¥11.4 billion and to pay about ¥1.2 billion in back taxes, including local and other taxes. Dissatisfied with the judgment, DENSO filed a lawsuit for annulment of the decision, and on September 4, 2014, the Nagoya District Court ruled in favor of DENSO regarding its Singapore subsidiary subject to the exemptions to the anti-tax haven rules. However, on February 10, 2016, the Nagoya High Court ruled in favor of the defendant, rejecting DENSO’s assertions.

Dissatisfied with this ruling, DENSO appealed to the Supreme Court. Now today, DENSO announces that its claims were recognized by the Supreme Court and its assertion was accepted that DENSO’s subsidiary in Singapore was subject to the exemptions to the anti-tax haven rules.

This matter did not significantly impact DENSO’s consolidated financial results for the year ended March 31, 2018, although DENSO did receive a tax refund, including local taxes and the additions to taxes as a result of the judgment for the final appeal.

DENSO also received a similar notification from the Nagoya Regional Taxation Bureau for the two fiscal years ended March 31, 2010 and 2011, under the anti-tax haven rules. On October 18, 2017, DENSO’s assertion was accepted by the Nagoya High Court.

HighlightsDENSO Wins Medals at the 44th WorldSkills Competition

DENSO won a gold medal in the Manufacturing Team Challenge category (Japan national team) and a bronze medal in the Mobile Robotics category (Japan national team) at the 44th WorldSkills Competition. The competition was held in Abu Dhabi, United Arab Emirates.

DENSO began participating in this international competition in 1971, during its 20th iteration. To date, the Company has won a total of 32 gold medals, 16 silver medals, and 15 bronze medals. Since the 31st competition in 1991, DENSO has received gold medals in 14 consecutive competitions.

November
LowlightsThe Korea Fair Trade Commission’s Announcement Concerning the Monopoly Regulation and Fair Trade Act Related to Certain Automotive Components

The Korea Fair Trade Commission (KFTC) announced that it decided to order corrective measures and impose a surcharge on certain automotive suppliers pursuant to the Monopoly Regulation and Fair Trade Act, in connection with certain past sales of automotive fuel pumps and variable cam timing.

The KFTC has investigated this matter at certain automotive suppliers, including DENSO and its South Korean subsidiary (DENSO Korea Automotive), and the DENSO companies have cooperated fully with the KFTC.

As per the KFTC’s announcement, DENSO CORPORATION and its South Korean subsidiary were named as the suppliers involved in the conduct suspected to be in violation of the Monopoly Regulation and Fair Trade Act. However, DENSO was exempted from all of the KFTC’s orders as described above, because it had completely eliminated the conduct that was suspected to be in violation before the commencement of the authority’s investigation and because it applied to the KFTC for the leniency program in regard to the automotive components referred to above, which was granted by the KFTC.

Going forward, DENSO will continue to enact more stringent compliance rules in a thorough effort to prevent recurrence and restore trust among its customers and other related parties.

January
HighlightsDENSO Undertakes Demonstration Project to Advance Manufacturing Industry in Thailand, Trains System Integrators on Lean Automation and Connectivity

DENSO announced that it will undertake a demonstration project aimed at training system integrators who can handle production and failure analysis equipment in Thailand by using a showcase production line for next-generation lean automation. The project was consigned by the Japan External Trade Organization (JETRO) to train lean automation system integrators (LASIs) in the “Connected Industries” as part of the “Project for Nurturing New Industries in ASEAN and Japan” promoted by the Ministry of Economy, Trade and Industry (METI).

Through the demonstration project, DENSO will train local system integrators who have practical capabilities to help enhance the competitiveness in the automation field. The project is regarded as a core project of Thailand 4.0 and will help increase the presence of Japan’s “Connected Industries” in Thailand, while accelerating automation of the local Thai and Japanese manufacturing industry, and enhancing DENSO’s manufacturing competitiveness in Thailand.

HighlightsReceiving the Prime Minister’s Award at the Seventh Monodzukuri Nippon Grand Award

In recognition of the gold medal it received at the 44th WorldSkills Competition, DENSO received the Prime Minister’s Award at the Seventh Monodzukuri Nippon Grand Award. The Monodzukuri Nippon Grand Award was created to support the development of Japanese industry and culture, as well as to steadily pay forward the expertise in manufacturing that has contributed so substantially to the bounty of Japanese life and to encourage its future development. This program recognizes outstanding individuals from various generations engaged in manufacturing. Winners can be mid-career individuals playing key manufacturing and production roles or young people expected to play leading roles in the future of manufacturing. The award, which has been jointly organized by the Ministry of Economy, Trade and Industry; the Ministry of Land, Infrastructure, Transport and Tourism; the Ministry of Health, Labour and Welfare; and the Ministry of Education, Culture, Sports, Science and Technology every other year since 2005, was provided for the seventh time in 2018.

February
HighlightsDENSO Receives the Grand Prize for Excellence in Energy Efficiency and Conservation and the New Energy Award in the Agency for Natural Resources and Energy’s Director-General’s Prizes
Grand Prize for Excellence in Energy Efficiency and Conservation (a Director-General’s Prize of the Agency for Natural Resources and Energy)

DENSO received this award for its success in developing a new testing method, which is used in the process of testing for helium leaks in radiators manufactured at its Nishio Plant. The new method saves a substantial amount of energy. At the same time, we received the Grand Prize for Excellence in Energy Efficiency and Conservation (a Director-General’s Prize of the Agency for Natural Resources and Energy) for initiatives in a process used in machining parts at the Daian Plant that halves the amount of air required for chip removal. DENSO has received this award during each of the seven years since it was established in 2011.

Under this agreement, DENSO and Nagoya University will make effective use of each other’s human resources, with specialists in such areas as sociology, psychology, and economics, as well as engineering, to promote exploratory research aimed at creating value for future society on the theme of “harmony between moving objects and people.” At the same time, we will strive to cultivate human resources that create value.

New Energy Award (a Director-General’s Prize of the Agency for Natural Resources and Energy)

The hybrid power conditioner cooler for solar power generation systems, which DENSO and DENSO Aircool Corporation developed jointly, won the New Energy Award for the first time.

LowlightsEuropean Commission’s Decision on Sales of Automotive Components

The European Commission announced the imposition of fines on certain automotive suppliers that infringed EU competition law in connection with past sales of automotive spark plugs. The Commission has investigated certain automotive suppliers, including DENSO in this matter, and DENSO cooperated fully with the investigation.

As per the Commission’s announcement, DENSO was named as one of the suppliers that had been involved in the conduct suspected to be in violation of EU competition law. However, DENSO received full immunity from fines, because it had completely eliminated the conduct that was suspected to be in infringement before the Commission’s investigation, and because it applied to the Commission under the leniency program in regard to suspected illegal conduct related to sales of the product, which was granted by the Commission.

Going forward, DENSO will continue to enact more stringent compliance rules in a thorough effort to prevent recurrence and restore trust among its customers and other related parties.

March
HighlightsDENSO Signs Comprehensive Partnership Agreement with the City of Kariya in the Area of Urban Development

DENSO has signed a comprehensive partnership agreement with the city of Kariya involving urban development. Under this agreement, the two parties will cooperate to leverage DENSO’s ICT technology in the aim of resolving various regional issues. Since fiscal 2017, DENSO and Kariya have been considering ways of communicating the city’s attractions and efficiently disseminating information to the city’s residents. Based on this agreement, the two parties will step up activities based on this cooperation.