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SUSTAINABILITY REPORT 2005

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Automobiles are one of the most important modes of transportation in our modern society and they will retain this position for the future
as well. This is chiefly founded on the status of cars: communicating perfection of fascination, freedom, flexibility, and convenience to its users. Furthermore, an increasing demand for cars is lying ahead of us, mainly created by the growing economies of the emerging countries in Eastern Europe, China, India, Latin America and Russia, providing us with novel chances and challenges at the same time. A higher demand of cars implies growth for the automotive sector, however, also a rise in the global environmental burden and new upcoming social concerns.

The Denso Group, as one of the leading automotive suppliers, is prepared for those future economic, environmental and social challenges. We have recognized that an environmentally oriented company management is the management style of the 21st century.

By working to remain a forerunner among environmental oriented companies, we hope to realize a sustainable society, and hence to give the fascination technology a green seal. The DENSO Group wants to contribute to people’s happiness through research and development. Meaning, we want to be in harmony with the environment and to promote conservation activities by consolidating the wisdom and effort of every DENSO employee. Moreover, as a global player we have to bear responsibility in terms of being a decisive part of the whole car supply chain. Hence, we have to take care in choosing our suppliers; to build up a collaborative network with our customers “the automotive companies”; to create products with the highest possible value for the final consumers.

Our two businesses – both Diesel Injectors and System Control Components – at Denso Manufacturing HUngary Ltd. (DMHU) made profit throughout the Fiscal Year 2005. Furthermore, we are pleased to announce that DMHU has achieved its annual profit-loss target even though being affected by difficult external circumstances.

I am fully satisfied with the result in the Fiscal Year 2005; however, a continuing growth in profit for the Fiscal Year 2006 should be anticipated. Especially, facing the fact, that the cost competition among the competitors is getting harder and harder and that quality requirements from the customers are getting higher and higher. For achieving the target, it is crucial to improve our KAIZEN activities at each working site and to realize the targets of Eco Vision 2015. Our operations are guided by the principle that every single activity is significant, since it will surely contribute to the profit and quality of the company.

In the 4th sustainability report of Denso Manufacturing Hungary Ltd. we would like to put the emphasis on the financial aspects of our operations. After rather focusing on the environmental and social performance in the previous two released reports, the aim is to present our activities under financial viewpoints including the social and environmental dimensions.

The guiding principles of our 4th sustainability report are the Sustainability Reporting Guidelines of the Global Reporting Initiative (GRI). The DMHU sustainability report 2005 is completely based on GRI 2002 Guidelines but in addition we used some of the performance indicators of the new GRI G3 Guidelines that were covering an innovative field.

Please, join the fascination of our products and see all our operations out of an economic, environmental, and social angle. We would be very pleased to receive your statement.

DENSO Manufacturing Hungary Ltd.,
September 2006

Yukimasa Ohoka
DMHU President