Delta believes that high quality corporate governance is the best way to ensure that the company always delivers excellent performance and provides an optimum balance for all stakeholders' interests. Corporate governance is therefore our top priority.

Using the parent company Delta Electronics as an example, the board currently consists of nine directors and two supervisors ⁹, including one independent director and one independent supervisor ¹⁰. The board chairman does not hold an administrative position within the company. According to the "Articles of Incorporation of Delta Electronics, Inc." ¹¹, the remuneration for directors and supervisors is no more than 1% of the distributed balance. In 2010, the average annual remuneration for each director is NT$1.47 million, and for each supervisor NT$1.75 million. ¹²

To enhance the board's responsibility and trust, it convenes at least once quarterly to review the company's performance and discuss important strategic issues. The board convened on six occasions in 2010, and the overall attendance rate was 94% ¹³. Key resolutions passed by the board are published in a timely manner on the Market Observation Post System of the Taiwan Stock Exchange and in the corporate governance section of the Delta website ¹⁴. The Article of Incorporation, board meeting regulations and election rules for the directors/supervisors are also provided online for reference. An internal audit team submits its audit report to the supervisors monthly, and the Chief Auditing Officer presents critical findings to board members at board meetings.

Apart from the board meetings, the independent director and supervisor also take part in Delta Electronics' internal strategy meetings to ensure they are familiar with the company's current activities and can provide appropriate advice when necessary. Meanwhile, the Board organized the Compensation Committee to evaluate the overall compensation policy, the compensation of the company's directors and officers, and carry out other assignments by the board. The Committee is composed of at least three directors from the Board, and at least one of the committee members is an independent director. In addition, the chief director of the Human Resources Department joins the committee as a councilor without a right to vote. Committee members are prohibited from approving their own or relevant parties' compensation.

The core areas of the company are R&D, manufacturing, and sales. We do not participate in businesses of high-risk and highly leveraged investment. Delta consistently monitors capital on the market and interest rates, makes cautious funding decisions, and hedges against foreign exchange rate risks. Simultaneously, through our auditing, finance, corporate investment, information technology, legal and intellectual property, corporate communications, investor services, and environmental health & safety departments, we are able to assess and manage risks associated with all operations to maintain company sustainability.

Delta's efforts in corporate governance continued to win outside recognition in 2010. Besides winning Commonwealth Magazine's corporate citizen award and Yazhou Zhoukan's 2010 "Global Chinese Business 1000-Best Performance Award", Delta placed first as Commonwealth Magazine's top electronics company since 2002. We received an A+ rating once again from the Securities and Futures Institute in Taiwan in 2010. Moreover, our top management received "CNBC Asia Innovator of the Year", the "China Business Leaders Awards 2010", and Ernst & Young's "Entrepreneur of the Year". Delta Thailand was also awarded the "Prime Minister's Industry Award 2010" by Thailand's prime minister, the country's most prestigious recognition of industrial competitiveness on the basis of innovation, quality, sustainability, community involvement, environmental protection, and a clear role in social responsibility.

We will continue to improve the quality of corporate governance at Delta by strengthening the organization and function of the board to make Delta an even more respectable world-class corporation.

The "Delta Code of Conduct" was revised in 2010, describinges Delta's expectations for all employees around the world. The Code provides guidelines for employee conduct and asks all employees to protect Delta's assets, rights and image by committing themselves to engaging in legal and ethical behavior so that the company can sustain its business and growth. The Code is taught as a part of each new employee's training. In addition to obeying the applicable laws and corporate policies, implementing the principles of "Care for the Environment, Energy-saving and Our Green Earth" and maintaining "integrity" are stated at the very beginning of the Code.