Dear Shareholders:

Delta Electronics continues to maintain a steady course as we pursue our long held corporate mission "To provide innovative, clean and energy-efficient solutions for a better tomorrow". In 2011, Delta's growth targets for revenues and profits were affected by the spreading European debt crisis and resulting drop in global market demand, as well as by the slower than expected development of the solar energy industry. Delta Electronics' consolidated sales revenues in 2011 were NT$172.1 billion, which was relatively flat compared to the previous year; gross profit was NT32.8 billion, or 19.1% of revenues, a decrease of 10% from the previous year; net operating profit was NT$10.3 billion, or 6% of revenues, a decrease of 40% from the previous year. Net income after tax was NT$11 billion, or 6.4% of revenues, a decrease of 30% from the previous year. In 2011 earnings per share (EPS) was NT$4.58.

Although we did not reach our financial goals last year, the good news is that through the efforts of all our employees, Delta consolidated our global leadership in power supplies, components, power management, displays, and more. Our many years of planning and effort are beginning to achieve outstanding results that will provide an important foundation for our long-term development. Delta not only continues to be a leading Original Design and Manufacturing (ODM) enterprise, we are also working hard to become a total solutions provider, integrating all of Delta's related technologies and products, and matching software with hardware to create energy-saving and convenient "smart green life" applications. We are also beginning to take the next step, which is to increase Delta's brand value. An overview of our major businesses and developments follows.

Delta maintains its position as the world's number one provider of switching power supplies, which we have held since 2002. We continue our long term development and accumulation of innovative power electronics' technology and applying it to new fields to create even greater added value. Delta has been the world's number one supplier of brushless DC fans for many years, which find broad application in fields such as information technology, industry, automotive, and consumer electronics. Our thermal technologies provide customers with system-level heat dissipation solutions, improving energy efficiency and energy recycling. Over the past few years Delta has expanded into products such as smart ventilating fans, air-to-air heat exchangers, and mini fans that use green technology to save energy and reduce carbon emissions as well as improve our daily lives. Cyntec, a Delta subsidiary, is focused on developing integrated miniaturized components and modules and has become a leader in speed and technology, earning customer trust. With the growth of trends such as handheld devices and cloud computing, Delta's server power supplies and miniaturized components will do particularly well over the next several years.

In Energy Management, Delta's broad range of products and services include industrial automation, telecommunication power supplies and uninterrupted power supplies, electric vehicle power trains and charging systems, and renewable energy products such as large-scale wind power inverters, solar inverters, and solar cells and modules. In industrial automation, Delta offers a complete line of advanced products in the areas of drive, motion, and control. Over the years Delta has penetrated China's industrial automation market by establishing channels and branding products. Delta's dealers provide high quality customized products and services, helping customers improve equipment capabilities and quality, while reducing energy consumption and dependence on labor. In the China market Delta has become a leading brand, on par with the world's best known names. Last year, Delta was honored as the "Most Influential Company in the China Industrial Automation Industry over the Past 15 Years". With China's labor shortages, rising labor costs, and strategy to save energy and reduce carbon emissions, it is plain to see the great potential Delta has for growth in this market.

Delta's telecom power supplies offer the highest efficiency in the industry, and integrated with a renewable energy source provide a green telecom power supply. Going a step further last year, Delta promoted a simple low cost design for improved competitiveness in the emerging markets. Combining an uninterruptible power system with Delta's outstanding hardware and software system capabilities, real-time monitoring, and power management guarantees that critical infrastructure and equipment remains operational and is not affected by the quality of utility power, which is crucial for both developed countries and emerging markets. Last year Delta's achievements in the development of electric vehicles (EV) included the delivery of around 200 EV power trains to two car factories. At a seminar on electric vehicles in Beijing, Delta's solutions were generally acknowledged as the best. At the end of last year, Delta and the government-sponsored Automotive Research & Testing Center (ARTC) cooperated in developing EV charging hardware and software infrastructure such as DC charging equipment, charging station monitors, and charging network management. Delta's cooperation with ARTC succeeded in establishing the first EV charging station in Taiwan to meet the testing specifications for EV certification of several countries, as well as featuring a conversion efficiency of close to 95%. At the beginning of 2012, Delta received research project funding from the U.S. Department of Energy (DOE) to develop smart-grid enabled residential EV chargers. Delta has R&D and integration capabilities which not only are recognized both domestically and internationally but also deliver industry leading solutions.

In 2011 demand in the solar energy market fell due to a decrease in government subsidies caused by the economic downturn. The result was oversupply and a large drop in prices with most of the industry suffering losses. Delta's solar energy related businesses were no exception and our profits were negatively affected. Despite this, the fall in market prices bodes well for the industry in the long run, and will help to bring about the wider adoption of solar energy. We believe that solar energy will continue to advance in the future, but due to short term market fluctuations we actively seek to reduce our costs. In addition to using more cost competitive materials, we will carefully evaluate future development trends for solar energy technology. We expect renewable energy, with its accelerating improvement in conversion efficiencies while becoming cheaper and cleaner, to eventually replace highly polluting fossil fuels.

For our "smart green life" business, Delta is currently focusing on network communications and displays, though for the future we expect LED lighting and cloud computing to gradually make a larger contribution. Our subsidiary Delta Networks has maintained steady growth for many years serving both the high-end enterprise equipment market and the SOHO market. In light of the diversity and breadth of cloud applications and ever increasing telecom market demand, Delta Networks is set to become an important engine for Delta's future growth. Delta displays not only continue to lead in high-end visual systems for theatres, large meeting rooms, and large outdoor LED screens, but are also reaching the public as art installations integrated into systems using software technology. Last year Taiwan's National Palace Museum used over 50 of Delta's high-end projectors to present the "Dwelling in the Fuchun Mountains" Chinese classic art exhibition in high definition to wide acclaim. Delta's high definition projectors illuminated a literary master's epic "The Peony Pavilion (Youth Edition)" with 30,000 lumens at Beijing's National Grand Theatre, winning enthusiastic applause at every performance. On the observation deck of the world's tallest green building, Taipei 101, Delta installed the industry's first interactive guide system to use two 46-inch touch panels. The system provides sightseers with information that describes the 360-degree view from the building. Delta is using leading technology to bring new life to the arts and humanities, and expressing the essence of a "smart green life".

The LED lighting business is a major focus of Delta. At the end of 2011, we won the project to replace traditional streetlights with LED street lighting for the Penghu Island pilot case for establishing the first and role-model low-carbon society in Taiwan. We completed the project in February 2012. The LED streetlights will not only decrease energy usage by 50%, but will also shine for an estimated 50,000 hours while reducing maintenance and management costs. Although the LED market is just in its initial stages, we believe LED lighting with its special features such as energy-saving, long product life, lack of mercury, and high color rendering will quickly replace traditional lighting in the future, providing a great benefit to the environment. The rise of cloud computing is another substantial business opportunity. It directly benefits Delta products such as server power supplies, thermal cooling systems, and networking devices. Delta has established a special business unit to integrate data center equipment and capabilities, and has also invested in developing cloud application software and services. Our aim is to speed the arrival of the future "smart green life".

Saving energy and reducing carbon emissions is essential for mankind's sustainable development; it is also Delta's promise. Delta's long held business principles are to invest in R&D, develop talent, advance our innovation capabilities, and penetrate markets to gain a thorough understanding of our customers as we build brand value. Last year Delta was named as one of the Top 20 Taiwanese Innovative Companies of 2011 by Taiwan's Industrial Development Bureau, Ministry of Economic Affairs (MOEA). Delta was also listed for the first time as one of Taiwan's top 20 brands for the 2011 Taiwan Global Brand Value Survey. Delta opened its new Shanghai Operations Center and R&D Building last year to strengthen and integrate R&D and marketing capabilities, to enhance sensitivity and response to the China market, and to directly support brand building. At the same time, Delta also opened its new Taoyuan Plant 3 and R&D Center in Taiwan, to become a base for industrial automation and electric vehicle systems research and development. The construction of Taoyuan Plant 3 integrated Delta's solar power systems, LEDs, water resource management, building automation, and other technologies. In one year we estimate the building will realize 30%~50% in energy savings, 75% in water savings, and reduce more than 1,000 tonnes of CO2; the building is also a live demonstration of Delta's integrated solution capabilities.

Delta is making great efforts on behalf of customers and the community. In 2011 we received many business awards from customers such as ASUS, Pegatron, Sony, and Netgear. In 2010 Delta's management team was honored with the Ernst & Young "Entrepreneur of the Year Award". Last year Institutional Investor magazine presented Delta with three major awards: Best CEO, Best Investor Relations, and Best IR Professionals in the Technology/Hardware sector. Delta continues to win acclaim for our corporate social responsibility efforts. Last year we received Commonwealth Magazine's award for "Most Admired Company" in the electronics industry for the 10th year in a row, as well as the magazine's "Corporate Citizenship Award" for the 5th year in a row. Delta also won Global Views Magazine's "2011 CSR Champion Award". Delta was rated A+ for the 4th time by the Securities and Futures Institute's Information Transparency and Disclosure Ranking. We were also listed for the first time in the "World index" and "Asian index" of the Dow Jones Sustainability Index in 2011/2012. While Delta has become a shining example for corporate governance in Taiwan, we continue striving to make Delta Electronics a highly regarded enterprise internationally.

Once again, I thank all of my Delta colleagues for your dedication and contributions. I also wish to express my gratitude to our customers, suppliers, shareholders and the community for the support you have given Delta. Last year we did not achieve ideal results, but we will conduct a thorough assessment, and prepare and strictly implement our future growth strategy. We will establish a firm foundation for Delta's continued growth and strive to fulfill the expectations of society and all of our stakeholders.