The global push for green energy means that customers now have a greater demand and higher expectations for energy saving solutions. With the corporate mission of "To provide innovative, clean and energy-efficient solutions for a better tomorrow", Delta now defines its brand value as a provider of customized reliable energy saving solutions. By leveraging our core competency in power electronics and combining it with advanced energy-saving technologies we can now provide our customers with cleaner and more efficient solutions. While lowering our customers' operation costs and capital costs, we also reduce the consumption of the Earth's resources and emissions of greenhouse gases at the same time to create even more value for customers.

To fulfill our commitment to customers, Delta not only studies the needs of customers but also observes our end-customers' working environments and habits to identify opportunities for continued improvement and to propose best solutions. End-customer relations management at Delta emphasizes listening to the voices of our customers. Apart from conducting large-scale customer surveys we also commission consultants to conduct end-customer satisfaction surveys, focus groups interviews, individual interviews and online surveys. The in-depth understanding of customers' requirements and expectations serve as the basis for improvement in technical R&D, system design and solutions concepts. Also by accepting the results of our customers' quarterly business reviews (QBR), we strive to provide total solutions that exceed customer expectations while also looking for opportunities to develop new products and services. In addition, each business unit has a defined procedure in place for customer feedback or quality issues. The contact windows for each product category provided on the official website as well as our sales personnel ensure that these problems are dealt with in a timely manner. In 2011, nearly 290 customers provided their feedback through the surveys or QBRs, the overall satisfaction was around 73%.

Delta is also introducing customer relations management (CRM) systems in developing markets with strong potential such as China and India. The system will help meet the growing demand for CRM from Delta's global diversification and reinforce the Delta brand identity through efficient, effective and high-quality interactions with the customers. Once the system is in place, all Delta customer data and market resources can be integrated to deliver more effective customer service.

In addition to the above, our distribution partners are now spearheading Delta's global market expansion. With industrial automation products for example, we now have over 700 distributors on five continents helping us provide customer consultation, product installation, technical support and product training services. Our distributors also help communicate the Delta brand value and corporate mission. Delta regularly hosts distributor events for India, North America, South America, China and Europe. Besides sharing overall market trends and product planning with distributors, Delta also rewards outstanding distributor partners so they will continue to move forward with Delta. Delta is now promoting a certification system for channel partners to help them establish an after-sales support capability. Strong support is also given for advertising and marketing events to give our channel partners the backing they need. The goal is to establish a basis for long-term sustainable development as well as deliver timely and effective support services to customers and end users so our channel partners can work with Delta to build a unique brand experience. The "Mission Critical Infrastructure Solutions Business Unit" (MCIS) for example set up an online platform for channel partners around the world selling Delta's "InfraSuite" smart modular data center solution and uninterruptible power supply (UPS) products. The online platform provides Delta partners with documentation and training information for Delta products, technologies and solutions so they can troubleshoot end-user problems. The platform also incorporates a feedback function for receiving feedback from channel partners and end users.

Technology and talent are Delta's twin foundations. We believe that deep roots achieve a solid foundation. For this reason, the corporate culture at Delta accepts the possibility of failure during the innovation process. We are willing to endure short-term labor pains in return for the possibility of giving birth to breakthrough technologies. This is the key to continued innovation by Delta, and investment in R&D is not sacrificed even when the market is in a recession. In 2011, Delta's global R&D spending amounted to 5% of revenues.

To promote our corporate culture of teamwork and recognize outstanding teams in innovation during the year, Delta renamed the existing Da Vinci Innovation Award as the "Delta Innovation Award" in 2011. The 11 prize-winning teams demonstrated their innovation as a team in terms of product & technology, process improvements and new business models while also living up to our corporate philosophy of "To provide innovative, clean and energyefficient solutions for a better tomorrow". The Taoyuan Technology Center Automated Smart Green Building was one of the prize-winning projects and this was Delta Group's newly completed plant & office building. Delta's energy-saving, industrial automation products and control systems are used throughout this new flagship building. The Taoyuan Technology Center is a demonstration for Delta's green building solutions as well as an important proving ground for validating the real-world performance of building automation control and energysaving systems.

Another prize-winner was the "Qumi Pico-Projector", the smallest LED projector that the Delta Group has put into mass production to date. Weighing in at just 470g, the highperformance, low-energy, light and easy to carry pico-projector is the brightest in the industry with a projection efficiency of 300 lumens. The pico-projector was not just a demonstration of innovation by Delta's R&D team. The circuitry, software, light engine and mechanical design were all developed in-house by Delta as well. The development of its high-efficiency fan and transformer drew on inter-departmental sharing of design experience and resources, successfully leveraging the synergies of the Delta Group technologies.

The continued pursuit of innovation has won Delta products numerous outside accolades. Apart from the Delta Voice receiving the 2011 Speech Technology Excellence Award, our LED street lighting product was also awarded the only distinction award for "Excellence in Outdoor Illumination Facilities" by the Illuminating Engineering Society of Taiwan. Besides the above, a total of ten Delta products including an AC motor, touch-control human-machine interface, programmable logic controller, international power supply and USB charger, UPS and outdoor/indoor LED lighting were judged on their merits in R&D, design, quality and marketing and received the 2011 Taiwan Excellence Awards. The prize-winning products have also been licensed by the Ministry of Economic Affairs to use the Taiwan Excellence mark registered in more than 90 countries and regions around the world.

Apart from products recognized with innovation awards, Delta is also actively developing green energy products and looking for green business opportunities. By maintaining our outstanding business performance, Delta has received awards recognizing businesses for their overall achievements in innovation as well. Delta was among the first "Top 20 Innovative Organizations in Taiwan" organized in 2011 by the MOEA Industrial Development Bureau. This was a non-industry-specific survey in Taiwan based on the framework used by Boston Consulting to select the top 50 most innovative companies in the world. More than 1000 professional managers from the top 5000 enterprises in Taiwan as well industry experts, academics and researchers were surveyed and the results weighed against business performance indicators. Delta Electronics Thailand (DET) also clinched the Runner-up position in its first attempt at the "Association of Southeast Asian Nations Business Award 2011" in the Innovation category for large companies. These awards recognize the diversity of Delta products and patents.

Beyond establishing our technical capabilities, Delta also adopts an attitude of open cooperation. We work closely with schools, suppliers, customers, and government agencies to create strategic investments in which we combine strengths from both parties to develop innovative products.

Quality is one of the core values of Delta's culture. Besides ISO-9001 certification of plants in Taiwan, China, Thailand, India and Slovakia, Delta has also established a Corporate Quality Division (CQD). The CQD continually pursues high quality, strengthens organizational quality planning and execution, and boosts training and competitiveness. With the integration of quality assurance methods, technologies, and systems, CQD aims to increase product quality, increase productivity and realize our corporate vision. Starting from selected business units, Delta combines accumulated experience in the field with best practices to pursue superior business performance.

The Production Technology Upgrade (PTU) at the Dongguan plant in 2011 was introduced with the support of the CQD department. The Dongguan plant underwent four phases: preparation, discovery, learning and implementation. The production process was expanded in detail to identify the key output and input variable that influenced production quality. Controls were then put in place for prediction & prevention and reoccurrence prevention. The project produced a total of 318 improvements including those transferred from other plants and self-innovations. A completion rate of 92% was achieved with 25 projects not yet fully introduced or still being fine-tuned. Delta executives including CEO/COO all took part in the project diagnosis meetings. PTU will hopefully expand quickly to other plants and integrate with existing improvement activities so resources can be effectively used and synergies realized.

Along with the quality assurance activities, since 2005 Delta has held quality diagnosis meetings a total of 10 times at various plants. The most recent quality diagnosis activity was held at the Wujiang plant. Management teams and various business unit leaders separated into four groups to investigate production lines over two days. The groups focused on improving production automation and operations processes. All of the executives praised the creativity shown in the plant's automation equipment and renewable energy as well as major breakthroughs in process expansion and control. They also expressed hopes that improvements will continue in the direction of more simple operations, lower operating costs, higher efficiency and greater manpower savings. The quality diagnosis activities allowed Delta to find and rectify problems, while encouraging communication between plants and business units.

At the same time, the Chinese electronics manufacturing industry will be leading the development of the "Specification for Assembly Level Applied Automatic Optical Inspection Characterization and Verification" standard of the "Association Connecting Electronics Industries" ⁷(IPC) for the first time. Delta Electronics' Chief Quality Officer China and Vice President of Technology, Mr. Wang Zhiping, has also been invited to serve as the chairman of the technology group. At the moment, academic organizations such as the Tsinghua University in Beijing, the Southwest Jiaotong University, the Jiangsu Institute of Electronics, Guangdong Institute of Electronics and the Sichuan Institute of Electronics, Wistron, Flextronics International, Pegatron, Foxconn, CETAQ as well as other well-known local and foreign AOI manufacturers have all joined the technology group. The opportunity to participate in and direct the defining of a new IPC international standard not only validates the quality and sophistication of Delta Electronics but will also give the company a greater voice in the SMT industry. The old model of "The West sets the standards for China to follow" has now been reversed.

Restrictions on environment-related substances in products, labor safety & health and human rights, climate change, water management, as well as conflict minerals/metals have all become important CSR issues in recent years. For the electronics industry, environment-related substances in products require controls at the source of materials supply. For labor safety & health and human rights, the focus is on suppliers scattered across the world as well as the company's own practices. The emphasis on climate change and water management is on the carbon / water footprint of the product lifecycle, while the conflict mineral / metal issue needs to be tracked all the way to the original mines. Indeed, these all require close cooperation with the entire supply chain to utilize companies' purchasing power and achieve optimal results.

Using the Code of Conduct promoted by the Electronic Industry Citizenship Coalition (EICC) as a reference, Delta has compiled online training materials for promoting standards for labor rights, safety & health and the environment. These materials help to improve the performance of Delta plants and suppliers in social and environmental responsibility. We have also set our policy on conflict mineral / metal issues. However, we know there is still a lot of work to do. We will keep working on these by benchmarking business leaders or customers that demonstrate great CSR performance.

At the same time, a CDP Supply Chain Program and EICC member companies conduct annual surveys of suppliers on climate change and water related risks, opportunities and corporate strategies. The information is used to determine whether these issues will have a potential impact on the enterprise itself. Delta attaches great importance to our communications with customers on this issue. Apart from responding to the survey each year we also use the questions as a guide to identifying potential improvements.

Our innovation, quality and responsive service over the years have resulted in a high level of customer satisfaction and recognition. This is the main reason Delta's market share and business continues to grow. We also receive outstanding supplier awards from our customers every year. In 2011, we received most outstanding / best supplier awards from Sony, Netgear, Indus, Asus, Pegatron, and more. We share these honors with all Delta employees and continue to enhance the quality of our products and services to ensure our customers' satisfaction.