2018 Annual Report
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Stock Code 5263 Brogent Technologies Inc. 2018 Annual Report Notice to readers This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail. Date Printed: 02 April, 2019 Taiwan Stock Exchange Market Observation Post System: http://newmops.twse.com.tw 1. Name, Title, Contact No., and Email of the Company's spokesperson Spokesperson name: Chih-Hung Ouyang Title: President Telephone:(07)537-2869 Email:[email protected] Representative spokesperson: Hui-Chuang Lin Title: Chief Financial Officer Telephone:(07)537-2869 Email:[email protected] 2. Head office address and telephone no. Head office: Number 9, Fuxing 4th Rd., Qianzhen District, Kaohsiung City (80661) Taiwan Telephone:(07)537-2869 3. Name, address, website, and telephone no. of stock transfer agency Stock transfer institute: Share Administration Agency, Taishin International Bank Address: No.96, Sec. 1, Jianguo N. Rd., Jhongshan District, Taipei City 10489, Taiwan Website:www.taishinbank.com.tw Telephone:(02)2504-8125 4. External auditor for most recent financial statement External auditor: Yu-Chieh Lo, CPA HuiPing Liu, CPA Accounting firm: Grant Thornton Taiwan Address: 13F.-2&-3, No.91 Chung Shan 2nd Road, Kaohsiung, Taiwan Website:www.gti.com.tw Telephone:(07)537-2589 5. Name of overseas trading office of listed valuable securities and method of searching for information of valuable overseas securities: None. 6. Company website:www.brogent.com Table of Contents Page I. LETTER TO SHAREHOLDERS .................................................................................................. - 6 - II. COMPANY PROFILE .................................................................................................................. - 11 - 1. DATE OF ESTABLISHMENT ....................................................................................................... - 11 - 2. COMPANY HISTORY .................................................................................................................... - 11 - III. CORPORATE GOVERNANCE REPORT ................................................................................. - 15 - 1. ORGANIZATIONAL SYSTEM ..................................................................................................... - 15 - 2. PROFILE OF DIRECTORS, SUPERVISORS, PRESIDENT, VICE PRESIDENTS, ASSISTANT VICE PRESIDENTS, AND DEPARTMENT AND BRANCH DIRECTORS .................................... 17 4. IMPLEMENTATION OF CORPORATE GOVERNANCE ................................................................... 26 5. INFORMATION ON FEES TO CPA ...................................................................................................... 50 6. CHANGES TO CPA INFORMATION ................................................................................................ 51 7. THE CHAIRMAN, PRESIDENT, FINANCIAL OR ACCOUNTING MANAGER OF THE COMPANY WHO HAD WORKED FOR THE CERTIFYING ACCOUNTING FIRM OR ITS AFFILIATED ENTERPRISE IN THE PAST YEAR ........................................................................... 51 8. SHARE TRANSFER BY DIRECTORS, SUPERVISORS, MANAGERS AND SHAREHOLDERS HOLDING MORE THAN 10% INTERESTS AND CHANGES TO SHARE PLEDGING BY THEM IN THE PAST YEAR AND UP TO THE DATE OF REPORT............................................................ 52 9. INFORMATION ON RELATIONSHIP BETWEEN ANY OF THE TOP TEN SHAREHOLDERS (RELATED PARTY, SPOUSE, OR KINSHIP WITHIN THE SECOND DEGREE) .......................... 53 10. THE SHAREHOLDING OF THE COMPANY, DIRECTOR, SUPERVISOR, MANAGEMENT AND AN ENTERPRISE THAT IS DIRECTLY OR INDIRECTLY CONTROLLED BY THE COMPANY IN THE INVESTED COMPANY, AND CONSOLIDATE THE SHAREHOLDING PERCENTAGE: ................................................................................................................................... 54 IV. PLACEMENT SITUATION .............................................................................................................. 55 1. COMPANY CAPITAL AND SHARE CAPITAL ................................................................................ 55 2. CORPORATE BOND (INCLUDING OVERSEAS CORPORATE BOND) ...................................... 63 3. ISSUANCE OF PREFERRED STOCKS ............................................................................................. 63 4. ISSUANCE OF GLOBAL DEPOSITARY RECEIPTS (GDR) ........................................................... 63 5. EXERCISE OF EMPLOYEE STOCK OPTION PLAN (ESOP) ........................................................ 63 6. RESTRICTED STOCK AWARDS ....................................................................................................... 64 7. MERGER AND ACQUISITION .......................................................................................................... 64 8. ISSUANCE OF NEW SHARES FOR ACQUISITION OF SHARES OF OTHER COMPANIES .... 64 9. IMPLEMENTATION OF CAPITAL ALLOCATION PLAN .............................................................. 64 V. BUSINESS OVERVIEW ................................................................................................................... 65 I. BUSINESS ACTIVITIES ..................................................................................................................... 65 II. MARKET, PRODUCTION AND SALES ........................................................................................... 78 III. EMPLOYEE INFORMATION IN THE PAST 2 YEARS TO THE DATE OF THE ANNUAL REPORT ............................................................................................................................................... 92 IV. ENVIRONMENTAL PROTECTION EXPENDITURE INFORMATION ......................................... 92 V. LABOR RELATIONS .......................................................................................................................... 95 VI. IMPORTANT CONTRACTS ............................................................................................................... 98 VI. FINANCIAL OVERVIEW ................................................................................................................ 99 1. CONDENSED BALANCE SHEETS AND STATEMENT OF INCOME (2011 - 2015) ...................... 99 2. FINANCIAL ANALYSIS ................................................................................................................... 104 3. SUPERVISOR REVIEW REPORT .................................................................................................... 108 4. FINANCIAL REPORT AND CPA REVIEW REPORT ........................................................................ 108 5. INDIVIDUAL FINANCIAL REPORT REVIEWED BY CPA (2011 - 2015) ...................................... 108 6. FINANCIAL DIFFICULTIES AND CORPORATE EVENTS ENCOUNTERED BY THE COMPANY AND AFFILIATES IN THE PAST TWO YEARS AND UP TO THE DATE OF REPORT THAT HAVE MATERIAL IMPACT ON THE FINANCIAL STATUS OF THE COMPANY. .................... 108 VII. PRECAUTIONS OF REVIEW AND ANALYSIS OF FINANCIAL STATUS AND BUSINESS PERFORMANCE ............................................................................................................................. 109 1. FINANCIAL STATUS ....................................................................................................................... 109 2. FINANCIAL PERFORMANCE ........................................................................................................ 110 3. CASH FLOWS ...................................................................................................................................... 111 4. EFFECT OF MAJOR CAPITAL SPENDING ON FINANCIAL POSITION AND BUSINESS OPERATION ...................................................................................................................................... 112 5. INVESTMENT POLICY IN THE PAST YEAR, PROFIT/LOSS ANALYSIS, IMPROVEMENT PLAN, AND INVESTMENT PLAN FOR THE COMING YEAR ................................................... 112 6. ANALYSIS OF RISKS IN RECENT YEARS UP TO THE PUBLISHING DATE OF THE ANNUAL REPORT ............................................................................................................................................. 113 I. OTHER IMPORTANT EVENTS ....................................................................................................... 119 VIII. IMPORTANT NOTICES ........................................................................................................ 120 1. PROFILE ON AFFILIATES AND SUBSIDIARIES ......................................................................... 120 2. PRIVATE PLACEMENT OF CORPORATE BONDS IN THE PAST YEARS TO THE DATE OF THE ANNUAL REPORT ................................................................................................................... 125 3. HOLDING OR DISPOSAL OF STOCKS OF THE COMPANY BY SUBSIDIARIES IN THE PAST YEAR AND UP TO THE DATE OF REPORT: NOT APPLICABLE............................................... 126 4. OTHER SUPPLEMENTAL INFORMATION ................................................................................... 126 IX. ITEMS OF IMPACT OF INTERESTS OF SHAREHOLDERS OR STOCK PRICE .............. 126 APPENDIX ............................................................................................................................................... 127 APPENDIX 1:STATEMENT OF INTERNAL CONTROL SYSTEM