Stock Code
5263

Brogent

Technologies

Inc.

2015
Annual Report
Notice to readersThis 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 andChinese versions, the Chinese version shall prevail.

Date Printed: April 11, 2016
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:stock@brogent.com
Representative spokesperson: Hui-Chuang Lin
Title: Director of the Administration Center
Telephone:(07)537-2869
Email:stock@brogent.com
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: Yielson Chang, CPA
Yu-Chieh Lo, 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 ............................................................................................ - 1 -II. COMPANY PROFILE ............................................................................................................. - 6 1.

DATE OF ESTABLISHMENT ................................................................................................... - 6 -2.

COMPANY HISTORY............................................................................................................... - 6 -III. CORPORATE GOVERNANCE REPORT.............................................................................. - 8 1.

ORGANIZATIONAL SYSTEM ................................................................................................. - 8 -2.

PROFILE OF DIRECTORS, SUPERVISORS, PRESIDENT, VICE PRESIDENTS, ASSISTANT
VICE PRESIDENTS, AND DEPARTMENT AND BRANCH DIRECTORS ................................. 10

4. IMPLEMENTATION OF CORPORATE GOVERNANCE .............................................................. 20
5. INFORMATION ON FEES TO CPA ............................................................................................... 43
6.

CHANGES TO CPA INFORMATION .......................................................................................... 44

7.

THE CHAIRMAN, PRESIDENT, FINANCIAL OR ACCOUNTING MANAGER OF THE
COMPANY WHO HAD WORKED FOR THE CERTIFYING ACCOUNTING FIRM OR ITSAFFILIATED ENTERPRISE IN THE PAST YEAR ..................................................................... 45

8.

SHARE TRANSFER BY DIRECTORS, SUPERVISORS, MANAGERS AND SHAREHOLDERSHOLDING MORE THAN 10% INTERESTS AND CHANGES TO SHARE PLEDGING BY THEM
IN THE PAST YEAR AND UP TO THE DATE OF REPORT ....................................................... 46

9.

INFORMATION ON RELATIONSHIP BETWEEN ANY OF THE TOP TEN SHAREHOLDERS(RELATED PARTY, SPOUSE, OR KINSHIP WITHIN THE SECOND DEGREE) ....................... 47

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 SHAREHOLDINGPERCENTAGE:........................................................................................................................... 48
IV. PLACEMENT SITUATION ...................................................................................................... 49
1.

COMPANY CAPITAL AND SHARE CAPITAL........................................................................... 49

2.

CORPORATE BOND (INCLUDING OVERSEAS CORPORATE BOND) ................................... 56

3.

ISSUANCE OF PREFERRED STOCKS ...................................................................................... 58

4.

ISSUANCE OF GLOBAL DEPOSITARY RECEIPTS (GDR) ...................................................... 58

5.

EXERCISE OF EMPLOYEE STOCK OPTION PLAN (ESOP) .................................................... 58

6.

RESTRICTED STOCK AWARDS................................................................................................ 58

7.

MERGER AND ACQUISITION .................................................................................................. 58

8.

ISSUANCE OF NEW SHARES FOR ACQUISITION OF SHARES OF OTHER COMPANIES ... 58

9.

IMPLEMENTATION OF CAPITAL ALLOCATION PLAN.......................................................... 58

V. BUSINESS OVERVIEW ........................................................................................................... 60
I.

BUSINESS ACTIVITIES............................................................................................................. 60

II. MARKET, PRODUCTION AND SALES ..................................................................................... 69
III. EMPLOYEE INFORMATION IN THE PAST 2 YEARS TO THE DATE OF THE ANNUALREPORT...................................................................................................................................... 84
IV. ENVIRONMENTAL PROTECTION EXPENDITURE INFORMATION ...................................... 85
V. LABOR RELATIONS.................................................................................................................. 86
VI. IMPORTANT CONTRACTS ....................................................................................................... 88
VI. FINANCIAL OVERVIEW......................................................................................................... 91
1. CONDENSED BALANCE SHEETS AND STATEMENT OF INCOME (2011 - 2015) .................... 91
2.

FINANCIAL ANALYSIS ............................................................................................................. 97

3.

SUPERVISOR REVIEW REPORT............................................................................................. 103

4. FINANCIAL REPORT AND CPA REVIEW REPORT .................................................................. 103
5. INDIVIDUAL FINANCIAL REPORT REVIEWED BY CPA (2011 - 2015) ................................... 103
6. FINANCIAL DIFFICULTIES AND CORPORATE EVENTS ENCOUNTERED BY THE COMPANY
AND AFFILIATES IN THE PAST TWO YEARS AND UP TO THE DATE OF REPORT THATHAVE MATERIAL IMPACT ON THE FINANCIAL STATUS OF THE COMPANY. .................. 103
VII.PRECAUTIONS OF REVIEW AND ANALYSIS OF FINANCIAL STATUS AND BUSINESSPERFORMANCE .................................................................................................................... 104
1.

FINANCIAL STATUS ............................................................................................................... 104

2.

FINANCIAL PERFORMANCE ................................................................................................. 105

3. CASH FLOWS ............................................................................................................................. 106
4. EFFECT OF MAJOR CAPITAL SPENDING ON FINANCIAL POSITION AND BUSINESSOPERATION ............................................................................................................................. 108
5. INVESTMENT POLICY IN THE PAST YEAR, PROFIT/LOSS ANALYSIS, IMPROVEMENT
PLAN, AND INVESTMENT PLAN FOR THE COMING YEAR ............................................... 108
6. ANALYSIS OF RISKS IN RECENT YEARS UP TO THE PUBLISHING DATE OF THE ANNUALREPORT.................................................................................................................................... 109
I.

OTHER IMPORTANT EVENTS.................................................................................................115

VIII.

IMPORTANT NOTICES..................................................................................................116

1.

PROFILE ON AFFILIATES AND SUBSIDIARIES.....................................................................116

2.

PRIVATE PLACEMENT OF CORPORATE BONDS IN THE PAST YEARS TO THE DATE OF
THE ANNUAL REPORT ............................................................................................................119

3.

HOLDING OR DISPOSAL OF STOCKS OF THE COMPANY BY SUBSIDIARIES IN THE PASTYEAR AND UP TO THE DATE OF REPORT: NOT APPLICABLE. .......................................... 123

4.

OTHER SUPPLEMENTAL INFORMATION ............................................................................. 123

IX. ITEMS OF IMPACT OF INTERESTS OF SHAREHOLDERS OR STOCK PRICE ............ 123
APPENDIX ..................................................................................................................................... 124
APPENDIX 1：STATEMENT OF INTERNAL CONTROL SYSTEM .............................................. 124
APPENDIX 2：SUPERVISOR’S REVIEW REPORT ....................................................................... 125
APPENDIX 3：CONSOLIDATED FINANCIAL STATEMENTS AND INDEPENDENT AUDITORS’REPORT.................................................................................................................................... 126

I. Letter to Shareholders
Dear Shareholders,

We thank you for your support to Brogent Technologies (hereafter "Brogent") and forattending our annual 2016 shareholders' meeting amidst your busy schedule.

In the past year, Brogent has made few changes in operation. The Company has not
only brought in strategic investors, but also adopted diverse management strategies, tointroduce profit division models to replace the current strategy of once-off outright sellingof equipment. These changes were made to ensure Brogent’s future growth. We wish totransform Brogent from simply being a supplier of amusement park facilities to acollective operator of the digital entertainment businesses.
In 2015, Brogent’s revenue amounted to NT$705 million. The gross profit was
NT$334 million. The operating profit was NT$130 million. The net income was NT$120
million, the earnings per share reached NT$2.57. The total amount of contracts signed in2015 broke our company’s record. However, the revenue was booked by the accounting
method “Percentage of Completion”; therefore, the 2015 earnings result cannot truely
represent what Brogent had accomplished in the past year.

Neverthless, Brogent has been working on optimize the content and enhance thevalue of our products. The efforts have paid off by the 2015 results. Not only our starproduct, i-Ride, has stepped into the supply chain of the first-tier theme parks in Europe
and North America, but the 4D motion theater also lauched the largest wildlife park in
Europe, Zoo Emmen. In addition, in this April, the largest shopping mall in the UnitedStates, Mall of America, held the grand opening of Brogent’s i-Ride flight theater.

In addition to providing fun stimulation experience, Brogent’s product development
team put more stringent requirements to improve the fineness and security . Recently, ourflight theaters have been formally adopted by the United States UL certification. The 4D-1-

motion cinema in Netherland, which can carry 100 people, also passed the European TUVNORD safety certification. The recognition from these European and American
certification companies certainly proved that the products made by Brogent have met thesafety requirements for the global market.

Looking over 2016, the transformed Brogent will expand globally with its flexible,
diverse business model, in an effort to optimize its products while raising product value,
therefore ensuring steady revenue growth for the Company and solidifying the foundation
for sustainable management. The Company and all of its employees will continue toachieve the Company's various operating goals in gratitude of each and every
shareholder's long-term support and encouragement.

Our best wishes for the health and prosperity of all our shareholders!

Chairman, Chung-Ming Huang-2-

1. Accomplishments in 2015
(1) Business Plan Implementation Outcomes in 2015
Unit: NT$1,000

Year

2014

2015

Change(amount)% Change

Sales revenue

829,511705,424(124,087)(14.96)Gross profit

426,915

333,961(92,954)(21.77)

Operatingexpenses

195,665

203,549

7,884

4.03

Operatingincome231,250

130,412(100,838)(43.61)

Net income(loss) before tax

269,742

152,227(117,515)(43.57)

Net income(loss)

224,432

119,769(104,663)(46.63)Item(2) 2015 Budget Execution
According to the Regulations Governing the Publication of Financial Forecastsof Public Companies, the Company did not need to compile a financial forecast for
2015, and therefore this section is not disclosed.

(3) Analysis of Financial Gains and Losses and Profitability
Unit: NT1,000

Year
Item
Financial
structure (%)
Solvency (%)

Profitability

Debt-to-assets ratio
Long-term fund to property, plantand equipment (fixed assets) ratio
Current ratio
Quick ratio
Times interest earned
Return on assets (%)
Return on equity (%)
Paid-in capital to income before tax(%)
Net profit margin (%)
Earnings per share (NT$)
-3-

2014

2015

27.45

20.8

386.42463.42501.60445.08
85.32
18.88
30.03

413.34361.3
31,358.11
3.89
4.82

80.09

34.07

27.06
6.83

16.98
2.57

(4) Research and Development
To continuously enhance the Company’s competitiveness, the Company
has always actively invested in R&D efforts. In 2014 and 2015, it has
expended a total of NT$89.069 million and NT$63.288 million in R&D,
respectively accounting for 10.74% and 8.97% of the net operating income.
2015 R&D expense was lowered maily because the development of new
projects was encluded in the cost of good sold.

(5) Impacts of External Competitive Environment, Regulatory
Environment, and Overall Operation Environment
The Company operates its business in accordance with domestic andforeign laws and regulations and periodically notes any changes in domestic
and foreign policies and development trends, to facilitate immediate
response. The Company's employees also receive training regularly to
update them on current political and economic changes and trends; therefore,changes to laws and regulations will not exert a material impact on the
Company's business development.
Regarding external competition and the overall business environment,
because the Company has successfully expanded into overseas markets in2015, we will continue to develop our businesses based on market
internationalization. By seeking high-quality customers, attaining productrecognition, raising product sales prices, and adopting a product composite
marketing model concurrent with mature technologies and scaled production,
the Company expects to accurately ascertain the pulse of the global market.
Thus, based on the economic recovery of European and American countries
as well as China’s entertainment market demand, Brogent will expand its
businesses into the global market, thereby enhancing its overall revenue
performance.

2. Summary of Business Plan for 2016(1) 2016 Operational Goals and Crucial Product Marketing
Policies
1. Continue to optimize the quality of sensory simulation amusement park
facilities and diversify product category.
2. Actively extend into the international market and raise its global brand-4-

awareness.
3. Deepen the design and production of digital contents and heighten
product added value.
4. Engage in industry–academic cooperation to actively cultivate
high-quality specialists in digital content.

(2) Expected Sales Volume and Criteria
The Company's operational revenues mainly come from the sales of motion
simulation entertainment facilities. According to the Regulations Governing the
Publication of Financial Forecasts of Public Companies, the Company did notneed to compile a financial forecast for 2016, and therefore this section is notdisclosed.

3. Future Corporate Development Strategy(1) Product diversification: We will continue to extend our product linefrom the current 15 product types.
(2) Market internationalization: The North America and European markets
are growing rapidly, with the Chinese market will become the largest
single market.
(3) Diversification of revenue models: In addition to the outright selling of
our equipment, profit distribution, ventures, peripheral products,
themed IP, and content licensing will also be our stable source ofincome.
(4) Integration of strategic partner resources: Licensing of themed IPs will
be strengthened, and more business locations will be established.

-5-

II. Company Profile
1.

Date of Establishment
October 30, 2001.

2.

Company History
Company milestones up to the date of this report:

April 2011
June 2011
September 2011
October 2011
December 2011
June 2012
September 2012
November 2012
December 2012
January 2013
February 2013
April 2013
July 2013
October 2013
October 2013
October 2013
February 2014

Opening of 4D Theater at Formosan Aboriginal Culture Village.
Conversion of employee stock options to 1,744,000 ordinary shares; the paid-up
capital following capital increase totaled to NT$213,560,000.
Seasoned equity offering (SEO) of NT$12,700,000; following capital increase, thepaid-up capital totaled to NT$226,260,000.
Approved public offering of stock.
Registered on emerging stock market.
Constructed started on new research and test center at Kaohsiung Software Park.
Passed the market listing application by the Board of Directors of the Taipei Exchange.
Public underwriting of SEO prior to listing amounted to NT$28,290,000, and thepaid-up capital following capital increase totaled to NT$254,550,000.
Stock market launch.
Completion of the operational headquarters and R&D test center.
The i-Ride passed China’s A-grade large-scale amusement park facility
authentication and a commercial business license was received for it.
The i-Ride opened at an anime themed shopping center in Hangzhou, China.
The new generation of i-Ride, Fly Over Canada, opened in Vancouver,
Canada.
Attended the National Palace Museum First New Media creative contest; theCompany's 3D interactive new media art gained honorable mention.
Signed a Memorandum of Understanding with Kodansha, Japan.
Surplus transfer of NT$12,727,500, and the paid-up capital following capital increase
totaled to NT$267,277,500.
Conversion of convertible corporate bond to ordinary bond totaled to NT$7,422,770;
the paid-up capital following capital increase totaled to NT$274,700,270.
First-quarter revenue reached NT$312 million, with net profit after tax

March 2014

amounting to NT$100 million, both re presented record highs in Brogent's
history.

April 2014

The i-Ride received the 2014 Taiwan Excellence Reward for the category of-6-fashion, life, culture and creativity product.

May 2014
June 2014
July 2014
July 2014
September 2014
October 2014
November 2014
January 2015
January 2015

Conversion of convertible corporate bond to ordinary bond totaled to NT$15,433,990;
the paid-up capital following capital increase totaled to NT$290,134,260.
Held the Groundbreaking Ceremony for the 2nd stage of the R&D Center.
Fuji Q Highland held the Grand Opening of the i-Ride flight theater "Fuji
Airways" in Fujiyoshida, Japan.
Conversion of convertible corporate bond to ordinary bond totaled to NT$18,753,440;
the paid-up capital following capital increase totaled to NT$308,887,700.
Capital reserve transfer of NT$27,470,020; the paid-up capital following capitalincrease totaled to NT$336,357,720.
Signed the "Attack on Titan" IP licensing contract with Kodansha Ltd.
Conversion of convertible corporate bond to ordinary bond totaled to NT$442,070; thepaid-up capital following capital increase totaled to NT$336,799,790.
Seasoned equity offering (SEO) of NT$60,000,000; following capital increase, thepaid-up capital totaled to NT$396,799,770.
Signed another MOU with Kodansha Ltd. to establish marketing companies
for peripheral products.
Awarded the Potential Mittelstand Enterprise for the 3rd Taiwan MittelstandMarch 2015

Award held by the Industrial Development Bureau, Ministry of Economic
Affairs (MOEA).

June 2015
July 2015
November 2015
December 2015
January 2016
March 2016
April 2016

Seasoned equity offering (SEO) of NT$10,300,000, following capital increase, thepaid-up capital totaled to NT$407,099,770.
Surplus transfer of NT$39,680,000, following capital increase, the paid-up capital
totaled to NT$446,779,770.
Awarded government subsidies under the international market development
program by the Bureau of Foreign Trade, Ministry of Economic Affairs.
The grand opening of i-Ride flight theater themed “ Attack on Titan” washeld in Shan-Shun World, Toufen Township, Miaoli County, Taiwan.
Grand opening of the 2 nd stage Office Building.
Grand opening of the 4D motion simulating theater in the famous European
safari “ Zoo Emmen” in Netherlands.
New launch of i-Ride flight theater “ FlyOver America ” in Mall of
America, Minnesota, U.S.A.

-7-

III. Corporate Governance Report
1. Organizational System(1) Organizational Profile(2) Business Activities of Each Major Division
Major Divisions

Primary Duties

Chairman's Office Supervise the execution of the corporate internal audit

Audit Office

A.Inspects and evaluates whether internal control systems are
sound and provides recommendations relating to analysis
and evaluations.
B.Plan, implement, and improve internal auditing systems;
requests operational procedures to comply with laws,
regulations, and articles of incorporation; and assists inincreasing business performance.

-8-

Major Divisions

Primary Duties

President’s Office

A.Plan the corporate mid-term and long-term businessstrategy, as well as the new business direction and market
deployment.
B.Control and evaluate the operation results of subsidiaries.

A. Plan and implement marketing strategies.
B.Achieve company-defined business goals and prepare foroverseas exhibitions.
Sales & Marketing C.Handle general tasks (product presentation, proposal,
Centerquotation, negotiation, payment collection, and payment
notification) and determine customer's status in contract
compliance.

Innovation Center

A.Design and excute new technology and products.
B. Develop new interactive game.
C. Produce animation.

A.Supervisor implementation and management of construction
projects.
B.Communicate and manage customers when implementing
Project Center
projects.
C.Coordinate and communicate with marketing business andtechnical teams.
A.Design, develop, and produce hardware structures such as
six-axis platforms, steel structures, and dynamic structures
such as elevators.
Technology Center B.Organize and archive information for certification
regulations and product technical operating maintenancehandbook.
A.Formulates financial plans, allocates use of funding, andmanages risks.
B.Manages and operates accounting, tax, and stock affairs,
Administrationand provides analysis and reports to assist decision-making
C.Assist
in executing and promoting general affairs andCentercooperate with establishing relevant systems.
D.Control product production processes and manage
outsourced contractors.
A.Develop and maintain computer networks and application
systems.
IT Department
B.Maintain and manage computer hardware, peripheral
equipment, and information files.
C.Plan and execute system safety.
A.Organize and plan human resources.
B.Recruit and train employees.
Human Resources
C.Analyze work tasks, develop and plan employee salaries.
Department
D.Carry out performance evaluations and devise welfare
policies.

-9-2. Profile of Directors, Supervisors, President, Vice Presidents, Assistant Vice Presidents, and Department andBranch Directors(1) Directors and Supervisors
1. Directors and Supervisors
April 02, 2016; Unit: Shares;
%

Title

Nationality
or place ofregistration

Name

Date
electedNumber of
Shares held by
Number of sharesshares held when
spouse and minor
currently held
Date firstelectedchildrenTermelectedSharesShare Number Shareholding Numberof shares Percentage of shares
Percentage
holding

Shareholding

Percentage

Number ofshares held in
the name ofothers269,784

0.60%

－

－

3

80,308

0.18%

－

－

200,771

0.45%

－

－

Huang

Director ROC

Chih-Hung
OuyangDirector ROC

Chin-Huo
3
2014.06.11 years 2011.10.05 763,350 2.47% 912,256
Huang2014.06.11 years 2011.10.05 2,194,500 7.10% 2,822,581 6.32%

2.04%- 10 -

Other positions

Number Shareofholding
shares Percentage

3

Chairman ROC Chung-Ming 2014.06.11 years 2011.10.05 1,992,900 6.45% 2,381,654 5.33%

Education/work experience

1.Ph.D in Engineering Management,
1. Director, Fu Yi
University Of Missouri-Rolla
Investment Ltd.
2.Director, Business Administration
2. Professor,
Office; Dean, Engineering &Engineering &Management of Advanced
Management ofTechnology Dept; Dean,
Advanced
International Business Dept, Chang
Technology Dept,
Jung Christian University
Chang Jung Christian
3.Supervisor, Taiwan Water
University
Corporation
1.Electrical Engineering, National Sun 1. President, Brogent
Yat-sen University
Techonologies Inc.
2.R&D Engineer, Acer Incorporated
2. Chairman, Fu Wu
3.Project Manager, Ai West Co. Ltd.
Investment Ltd.
4.President, Micro Sova
3. Chairman, Brogent
Global Inc.
4. Chairman, Brogent
Mechanical Inc.
1.Chang Hua Industrial Vocational
1. Chairman, Fu Ying
High School
Metal Industrial Co.,
2.Director, SANFU Motors Industrial
Ltd.
Corp.
2. Chairman, Fujing
3.Director, Chun Ying Metal IndustrialCo., Ltd.
Co., Ltd.

Other officer, director
or supervisor who isthe spouse or a
relative within thesecond degree
Title

Name

None.

None
None.
.

None.

None
None.
.

None.

None
None.
.

RelationshipTitleNationality
or place ofregistration

Name

Date
electedNumber of
Shares held by
Number of sharesshares held when
spouse and minor
currently held
Date firstelectedchildrenTermelectedSharesIndependent
Director

Independent
Director

ROC

ROC

Supervisor ROC

Yi-Hsiang3
2014.06.11 years 2011.11.23
HuangShun-Jen3
2014.06.11 years 2013.06.19
Cheng

－

－

Share Number Shareholding Numberof shares Percentage of shares
Percentage
holding

－

－

－

－

－

－

－

－

Shareholding

Percentage－－

Number ofshares held in
the name ofothers

－

－

－

－

1.98%

－

－

－

－

Supervisor

ROC

Chun-Hao3
Cheng
2014.06.11 years 2011.10.05 110,250 0.36%(Note 1)

125,781

0.28%

2,286

0.01%

－

－

Supervisor

ROC

3
Yung-Lia
2014.06.11 year 2014.06.11 899,000 2.91% 1,033,466
ng Huang
s

2.31%

－

－

－

－

- 11 -

Other positions

Number Shareofholding
shares Percentage

Chun-Nan
3
2014.06.11 years 2011.10.05 740,900 2.40% 885,426
ChenNote 1: Chun-Hao Cheng resigned on 2016,03.09.

Education/work experience

Other officer, director
or supervisor who isthe spouse or a
relative within thesecond degree
Title

1.Ph.D, Financial Management,
National Central University
2.Department Chair, Department of
Finance, National University ofKaohsiung
3.Director, Extension Education
Center, National University ofKaohsiung
1.Ph.D in Business Studies, Manuel
L.Q University
2.Doctoral Seminar in Institute ofTechnology & Innovation
Management, Chung Hua University

Name

RelationshipProfessor, Department
Noneof Finance, National
None.
None.
.
University of Kaohsiung1. Consultant at
Kaohsiung City
None
None.
None.
Government.
2. Vice President, Cheng
Shiu University

1.Zhong Shan School of Medicine
2.Advanced Level in the
Supervisor, Jinan
Examination for Medical Personnel
Industrial Co., Ltd
3.Attending physician, JiaYang
Dermatology Center
1.Ph.D in Business Studies, Meiji
University
2.Supervisor, Taiwan Water
Corporation
Professor, Graduate
3.Associate Professor, Department of Institute of Hospitality
Finance, I-Shou University
Management, NKUHT
4.Associate Professor, Graduate
Institute of Hospitality
Management, NKUHT
1.Masters in Business Management,
US International Asia Pacific
University
Director, Wing Yue
2.Continued education in Masters
Advertising Company
Program at Dayeh University
3.Media advertisement agency

None.

None
None.
.

None.

None
None.
.

None.

None
None.
.

2. Director and Supervisor Expertise and Independence
Has at least 5 years of work experience and meets one of
the following professional qualifications

Criteria
Name(Note 1)An instructor or
higher position ina department ofcommerce, law,

A judge, publicprosecutor, attorney,accountant, or otherprofessional or

Has work
experience incommerce,
law, finance,

finance,accounting orother department
related to thetechnical specialist
related to the needs of
the Company who has
passed a nationalor accounting
or a professionnecessary forthe business ofbusiness needs of
the Company in a
public or private
junior college or

examination andreceived a certificate
thereforthe Company

Number ofother public

Meet the independence criteria (Note 2)companiesin whichthe Director
also serves

7

8

9

10

as an
Independent Director

1

2

3

4

5

6





-

-



-

    

None.

Chih-Hung Ouyang



-

-

-



-

    

None.

Chin-Huo Huang





-

-

      

None.
None.

university

Chung-Ming Huang

Yi-Hsiang Huang

Shun-Jen Cheng                        

None.



         

None.





      

None.

Chun-Nan Chen
Chun-Hao Cheng(Note 3)Yung-Liang Huang

-

-

-

-

None.

Note 1: The amount of columns is adjusted according to the actual number.
Note 2: If a director or supervisor meets any of the following criteria in the two years before being elected or during theterm of office, a check "" is placed in the corresponding boxes.
(1) Not an employee of the Company or any of its affiliates.
(2) Not a Director or Supervisor of the Company or any of its affiliates unless the person is an Independent Director of
the Company or its parent company, or any subsidiary in which the Company holds, directly and indirectly, morethan 50% of the voting shares.
(3) Not a natural-person shareholder whose shareholding, together with those of his/her spouse, minor children, andshares held under others' names, exceed 1% of the total number of outstanding shares of the Company, or ranks the
person in the top ten shareholders of the Company.
(4) Not a spouse, relative within second degree of kinship, or lineal relative within third degree of kinship of any ofthe persons in the preceding three paragraphs.
(5) Not a director, supervisor or employee of a juristic-person shareholder that holds directly 5% or more of the total
number of outstanding shares of the Company or ranks in the top five shareholders.
(6) Not a director, supervisor, manager or shareholder holding 5% or more of the shares of a specified company or
institution that has a financial or business relationship with the Company.
(7) Not a professional or an owner, partner, director, supervisor, manager or a spouse of the abovementio ned who
provides commercial, legal, financial, accounting services or consultation to the Company or an affiliate of theCompany. Excluding members of compensation committee who exercise power in accordance with Article 7 of theRegulations Governing the Appointment and Exercise of Powers by the Compensation committee of a Company
Whose Stock is Listed on the Stock Exchange or Traded Over the Counter.
(8) Not having a marital relationship or a relative within the second degree of kinship to any other director o f theCompany.
(9) Not corresponding to any of the situations set forth in Article 30 of the Company Act of the R.O.C.
(10) Not a government agency, juristic person, or its representative set forth in Article 27 of the Company Act of the
R.O.C.
Note 3: Chun-Hao Cheng resigned on 2016,03.09- 12 -

(2) Profile of President, Vice Presidents, Assistant Vice Presidents, and Department Directors

Title(Note 1)

Nationality

Name

Date
appointed

Shares held

SharesShareholding

Shares held by Shares held
spouse andin the namechildrenof others
SharesPercentage

President

Director of the
Administration
CenterDirector ofTechnology
CenterChief Engineer& Director of
Project Center

ROC

ROC

ROC

ROC

Chih-Hung
Ouyang2001.10Lai

Yi-Chung
Huang

Shareholding

Title Name Relationship

SharesPercentage

80,308 0.18%

Percentage--

Electrical Engineering, National Sun
Yat-sen University
R&D Engineer, Acer Incorporated
Project Manager, Ai West Co. Ltd.
President, Micro Sova

Sui-Chuan
2013.01
Lin

Teng-Hung2,822,581 6.32%

Shareholding

Education/work experience(Note 2)

2010.112015.08

170,462 0.38%

28,442

19,3130.06

22,585 0.05%-

March 24, 2015; Unit: Shares; %Other officer, director orsupervisor who is the
spouse or a relative within
Other positions
second degree

-

-

-

-

-

Master Graduate from the Department of
Finance, National Sun Yat-sen University
Finance Office at Chienmei Construction
Development Corp.
Finance Department Manager at Brogent
Technology
Masters in the Department of Computer
Science and Engineering at National
Chung-Hsing University
Technical Chief Officer at Meihsing
Technology
President of Liang Chuan Co. Ltd.
PhD, Electrical Engineering, National Sun
Yat-sen University
Chang Gu Construction Inc.

0.04

Manager, KungYuanInternational
Technology

Chairman, Fu Wu
Investment Ltd.
Chairman, Brogent

-

-

-

-

-

-

-

-

-

Chairman,Tong Shun
Technology Inc.

-

-

-

None.

-

-

-

Global Inc.
Chairman, Brogent
Machanical Inc.

Supervisor, Brogent
Global Inc.

Director, Brogent
Machanical Inc.

Master Graduate from the Department ofAudit Manager

ROC

Hui-Ping
Li2008.03

30,077

0.07

3,000

0.01

-

-

Finance, National Sun Yat-sen University
Accounting Department in Taiflex
Scientific Co. Ltd.
Auditor at Ernst & Young Global Limited

Note 1: Should include data regarding the President, Vice President, Assistant Vice President, and department and branch heads. In addition, those whose titles are equivalent to a President,
Vice President, or Assistant Vice President, regardless of their titles, their data shall be disclosed.
Note 2: Those who have assumed their current position in CPA firms or affiliated companies during the period mentioned above shall describe their title and the duties and functions forwhich they are responsible.

- 13 -

3. Remunerations to Directors, Supervisors, President, and Vice Presidents in recent years
1. Remunerations to Directors (including Independent Directors) in the most recent year (2015)
Unit: NT$1,000
Director's remuneration

Pay received as an employee
SharesRatio of total A,
Remuneration(A)

Earnings

Pension (B)appropriation(Note 2)(C) (Note 3)

Business
expense (D)(Note 4)

B, C, and D to

Salary, bonus

after-tax income

and special(Note 11)

allowance (E)(Note 5)

Ratio of total A,
B, C, D, E, F,
Profit sharing & bonus (G)and G tounder
through restricted
Pension (F)after-tax income
employee stock stock award(Note 6)(Note 11)
(Note 13)
options (H)subscribable

Shares obtained(Note 7)

Brogent

All companies in consolidated statements(Note 8)Brogent

All companies in consolidated statements(Note 8)Brogent

All companies in consolidated statements(Note 8)Brogent

All companies in consolidated statements(Note 8)Brogent

Brogent

All companies in consolidated statements(Note 8)Brogent

All companies in consolidated statements(Note 8)Brogent

All companies in consolidated statements(Note 8)All companies in
consolidated
statements(Note 9)All companies in consolidated statements(Note 8)

－

－

642

642

60

60

3.24

3.24

－

－

－

－

－

－

－

－

－

－

－

－

3.24

3.24

None.

－

－

－

－

642

642

60

60

0.62

0.62 2,934 2,934

－

－

－

－

－

－

－

－

－

－

3.24

3.24

None.

－

－

－

－

642

642

48

48

0.61

0.61

－

－

－

－

－

－

－

－

－

－

－

－

0.61

0.61

None.

280

280

－

－

－

－

78

78

0.32

0.32

－

－

－

－

－

－

－

－

－

－

－

－

0.32

0.32

None.

280

280

－

－

－

－

60

60

0.3

0.3

－

－

－

－

－

－

－

－

－

－

－

－

0.3

0.3

None.

Brogent
Chung-Ming
ChairmanBrogent

Brogent

2,934 2,934

Name

All companies in consolidated statements(Note 8)All companies in consolidated statements(Note 8)Title

Remuneration
received frominvestees otherthan subsidiaries(Note 12)

Cash Stock Cash Stockbonus bonus bonus bonus

Huang
Chih-Hung
Director
OuyangDirectorChin-Huo
Huang

Independent

Yi-Hsiang

Director

Huang

Independent
Director

Shun-Jen
Cheng- 14 -Name of Directors
Total of (A+B+C+D)
Range of Remuneration

Total of (A+B+C+D+E+F+G)

The company

Companies in the
consolidated financial
statements

The company

Companies in the
consolidated financial
statements

Under NT$ 2,000,000

Chih-Hung Ouyang
Chin-Huo Huang
Yi-Hsiang Huang
Shun-Jen Cheng

Chih-Hung Ouyang
Chin-Huo Huang
Yi-Hsiang Huang
Shun-Jen Cheng

Chin-Huo Huang
Yi-Hsiang Huang
Shun-Jen Cheng

Chin-Huo Huang
Yi-Hsiang Huang
Shun-Jen Cheng

NT$2,000,001 ~ NT$5,000,000

Chung-Ming Huang

Chung-Ming Huang

Chung-Ming Huang
Chih-Hung Ouyang

Chung-Ming Huang
Chih-Hung Ouyang

0
0
0
0
0
0
5

0
0
0
0
0
0
5

0
0
0
0
0
0
5

0
0
0
0
0
0
5

NT$5,000,001 ~ NT$10,000,000
NT$10,000,001 ~ NT$15,000,000
NT$15,000,001 ~ NT$30,000,000
NT$30,000,001~ NT$50,000,000
NT$50,000,001 ~ NT$100,000,000
Over NT$100,000,000
Total.

Note 1: The Director's name shall be listed separately (corporate shareholders shall list their name and representative separately), and a summary of their benefits shall be disclosed. If the Director also
assumes the role of a President or Vice President, it shall be indicated in this table and Tables 3-1 or 3-2.
Note 2: Remuneration to the Director in the past year (including salary, additional pay, severance pay, bonuses and rewards).
Note 3: Refers to the proposed remuneration to Directors according to the most recent earnings distribution that has been approved by the Board of Directors but has not been submitted tothe shareholders’ meeting.
Note 4: This refers to business expenses of Directors in the past year (including transportation allowance, special allowance , stipends, accommodations, and car). When providing housing, vehicles andother transportation tools, or personal expenses, the asset characteristics and costs, actual rent or rent based on fair pric e calculation, petrol expenses, and other payments shall be disclosed. If adriver is hired, please describe the relevant remunerations the company has paid to the driver but this shall not be included in the Director's remuneration.
Note 5: All payments to a Director who is also an employee of the Company (including the position of President, Vice President, or other managerial officers or staff), including salary, additional pay,severance pay, bonuses, rewards, transportation allowance, special allowance, stipends, accommodations, and car. When providi ng housing, vehicles and other transportation tools, or personal
expenses, the asset characteristics and costs, actual rent or rent based on fair price calculation, petrol expenses, and other payments sha ll be disclosed. If a driver is hired, please describe therelevant remunerations the company has paid to the driver but this shall not be included in the Director's remuneration.

- 15 -

Note 6: For Directors also working as an employee (including the position of President, Vice President, or other managerial o fficers or staff), the amount of the proposed profit sharing and bonus
according to the most recent earnings distribution that has been approved by the Board of Directors but has not been submitted to the shareholders’ meeting. If the employee bonus cannot be
estimated, then the amount allocated for this year shall be calculated based on the proportion of the actual allocation of previous year, and this calculated amount shall be indicated in Table 1-3.
Note 7: Shares subscribable under the employee stock option plan by the Director also working as an employee (including the position of President, Vice President, or other managerial officers or staff)
as of the date of report (excluding shares already exercised), shall be indicated in this Table, as well as in Table 15.
Note 8: The total payment to the Director from all companies in the consolidated statements (including the Company).
Note 9: The name of the Director to whom the Company has paid the total compensations shall be disclosed on the basis of the classification of the compensation.
Note 10: The name of each Director to whom all the companies (including this Company) has paid the total compensations shall be disclosed within the consolidated statement on the basis of theclassification of the compensation.
Note 11: Net income refers to the net income of the most recent year; if international financial reporting criteria were adopted, then net income refers to the net income reported in individual fina ncial
report for the most recent year.
Note 12: a. This field shows the amount of remuneration a Director of the Company receives from investees other than subsidiaries of the Company.
b. If the Director obtains compensations from an investment company other than a subsidiary of the Company's, such compensati on shall be consolidated with Column J in the compensation
classification table, and the column shall be renamed as "All Investee Companies."c. The remuneration means pay, remuneration, employee bonus and business expense received by the Director serving as a Director, Supervisor or manager of an investee of a company otherthan the Company's subsidiaries.
Note 13: The new shares with restricted rights to employees acquired by Directors who are also employees (compensations paid to Directors from an investment company other than the Company's
subsidiary) as of the date of this Annual Report, shall be indicated in this Table, in addition to Table 15-1.
＊The compensation content disclosed in this table differs from the income concept of the Income Act; therefore, this table ser ves to disclose information rather than for tax purposes.

- 16 -

2. Remunerations to Supervisors in the most recent year (2015)
Unit: NT$1,000
Supervisor's Remuneration

Ratio of total A, B, andRemuneration
C to after-tax income
Remuneration (A)Profit sharing (B)Business expense (C)received from
Investees
All companies
All companies
All companies
All companies
other thanBrogent in consolidated Brogent in consolidated Brogent in consolidated Brogent in consolidated
subsidiaries
statements
statements
statements
statements

Title

Name

Su p er v i so r

Chun-Nan Chen

－

－

642

642

60

60

0.62

Su p er v i so r Chun-Hao Cheng

580

580

－

－

60

60

0.57

Su p er v i so r Yung-Liang Huang

－

－

642

642

60

60

0.62

0.62
0.57
0.62

None.
None.
None.

Name of Supervisors
Total of (A+B+C)
Companies in the consolidated
The company
financial statements

Range of Remuneration

Chun-Nan Chen

Under NT$ 2,000,000

Chun-Nan Chen

Chun-Hao Cheng

Chun-Hao Cheng

Yung-Liang Huang

Yung-Liang Huang

NT$2,000,001 ~ NT$5,000,000

00NT$5,000,001 ~ NT$10,000,000

00NT$10,000,001 ~ NT$15,000,000

00NT$15,000,001 ~ NT$30,000,000

00NT$30,000,001 ~ NT$50,000,000

00NT$50,000,001 ~ NT$100,000,00000Over NT$100,000,000

0

0

Total

3

3

Note 1: The Supervisor's name shall be listed separately (corporate shareholder shall list their name andrepresentative separately), and a summary of their benefits shall be disclosed.
Note 2: Remuneration to Supervisors in the past year (including salary, additional pay, severance pay, bonuses andrewards).
Note 3: The amount is the proposed remuneration to Supervisors according to the most recent earnings distribution
approved by the Board of Directors, but this figure has not yet been submitted to the shareholders' meeting.
Note 4: This is a business expense of Supervisors in the past year (including transportation allowance, special
allowance, stipends, accommodations, and car). When providing housing, vehicles and other transportation
tools, or personal expenses, the asset characteristics and costs, actual rent or rent based on fair pricecalculation, petrol expenses, and other payments shall be disclosed. If a driver is hired, please describe therelevant remunerations the company has paid to the driver but this shall not be included in the Director's
remuneration.
Note 5: The total payment to the Supervisor from all companies in the consolidated statements (including theCompany).
Note 6: The name of the Supervisor to whom the Company has paid the total compensations shall be disclosed on
the basis of the classification of the compensation.
Note 7: The name of each Supervisor to whom all the companies (including this Company) has paid the totalcompensations shall be disclosed within the consolidated statement on the basis of the classification of the- 17 -

compensation.
Note 8: Net income refers to the net income of the most recent year; if international financial reporting criteria wereadopted, then net income refers to the net income reported in individual financial report for the most recent
year.
Note 9: a. This field shows the amount of remuneration a Supervisor of the Company receives from investees otherthan subsidiaries of the Company.
b. If the Supervisor obtains compensations from an investment company other than a subsidiary of theCompany's, such compensation shall be consolidated with Column D in the compensation classificationtable, and the column shall be renamed as "All Investee Companies."c. The remuneration means pay, remuneration, employee bonus and business expense received by theSupervisor serving as a Director, Supervisor or manager of an investee of the Company other thansubsidiaries.
*The compensation content disclosed in this table differs from the income concept of the Income Act; therefore, thistable serves to disclose information rather than for tax purposes.

3. Remunerations to President, and Vice Presidents in the last year (2015)
Unit: NT$1,000
Pension(B)

Salary (A)

Title

Bonus and special
allowance (C)Name
All companies

All companies
All companies

inBrogent

inBrogent

consolidated

2,374

2,374

Brogent in consolidated Brogent

consolidated

statements

President

statements

Brogent in consolidated
statements

Chih-Hung

Ratio of total A,
SharesShares obtained
B, C, and D to
subscribablethrough
Employee bonus (D)Remuneratio
after-tax income under employee restricted stockn received(%)
stock options
award
from
All companies
InvesteesAll
All
Brogent
in consolidated
All companies
companies incompanies in other than
Cash

Stock

Cash

Stock

statements

-

-

620

620

bonus

bonus

bonus

bonus

-

-

-

-

Brogent
consolidated

consolidated

statements

statements

subsidiaries

statements

2.66

2.66

-

-

-

-

None.

OuyangName of President
Companies in the consolidated
The company
financial statements
00

Range of Remuneration
Under NT$ 2,000,000
NT$2,000,001 ~ NT$5,000,000

Chih-Hung Ouyang

Chih-Hung Ouyang

NT$5,000,001 ~ NT$10,000,000

00NT$10,000,001 ~ NT$15,000,000

00NT$15,000,001 ~ NT$30,000,000

00NT$30,000,001 ~ NT$50,000,000

00NT$50,000,001 ~ NT$100,000,00000Over NT$100,000,000

0

0

Total

1

1

Note 1: The President and Vice President's name shall be listed separately (corporate shareholders shall list theirname and representative separately), and a summary of their benefits shall be disclosed. If the Director
also assumes the role of a President or Vice President, it shall be indicated in this table and Tables 1-1 or
1-2.
Note 2: Salary, additional pay, and severance pay received by the President or Vice President in the past year.
Note 3: Bonus, reward, transportation allowance, special allowance, stipends, accommodations, car and other pays
received by the President or Vice President in the past year. When providing housing, vehicles and othertransportation tools, or personal expenses, the asset characteristics and costs, actual rent or rent based on- 18 -

fair price calculation, petrol expenses, and other payments shall be disclosed. If a driver is hired, please
describe the relevant remunerations the company has paid to the driver but this shall not be included in the
President or Vice President's remuneration.
Note 4: Refers the amount of the proposed profit sharing and bonus to Presidents and Vice Presidents according to
the most recent earnings distribution that has been approved by the Board of Directors but has not been
submitted to the shareholders' meeting. If the employee bonus cannot be estimated, then the amountallocated for this year shall be calculated based on the proportion of the actual allocation of previous year,
and this calculated amount shall be indicated in Table 1-3. Net income refers to the net income of the mostrecent year; international financial reporting criteria were adopted, and net income refers to the net income
reported in individual financial report for the most recent year.
Note 5: Shares subscribable under employee stock option plan by the President and Vice President as of the date ofreport (excluding shares already exercised), shall be indicated in this Table, as well as in Table 15.
Note 6: The total payment to the President or Vice President from all companies in the consolidated statements(including the Company).
Note 7: The name of each President and Vice President to whom all the companies has paid the totalcompensations shall be disclosed within the consolidated statement on the basis of the classification of thecompensation.
Note 8: The name of each President and Vice President to whom all the companies (including this Company) has
paid the total compensations shall be disclosed within the consolidated statement on the basis of theclassification of the compensation.
Note 9: Net income refers to the net income of the most recent year; if international financial reporting criteria
were adopted, then net income refers to the net income reported in individual financial report for the mostrecent year.
Note 10: a. This field shows the amount of remuneration the President or Vice President of the Company receives
from investees other than subsidiaries of the Company.
b. If the President and Vice President obtain compensations from an investment company other than thecompany's subsidiary, such compensation shall be consolidated with Column E in the compensation
classification table and rename the column as "All Investee Companies."c. The remuneration means pay, remuneration, employee bonus and business expense received by the
President or Vice President serving as a Director, Supervisor or manager of an investee of the Company
other than subsidiaries.
Note 11: The new shares with restricted rights to employees acquired by Directors who are also employees(compensations paid to Directors from an investment company other than the Company's subsidiary) as ofthe date of this Annual Report, shall be indicated in this Table, in addition to Table 15-1.
＊The compensation content disclosed in this table differs from the income concept of the Income Act;
therefore, this table serves to disclose information rather than for tax purposes.

4. Manager name and distribution situation regarding employee bonus in the last year (2015):

Title
President
Director ofTechnology Center
Chief Engineer &Managerial
Director of Project
officer

Name

Stock
bonus

Cash
bonus

Total

Total amount as a percentage of
earnings (%)

0

1,940

1,940

1.73

Chih-Hung
OuyangTeng-Hung Lai
Yi-Chung Huang

CenterDirector of the
Administration
CenterAudit Manager

Sui-Chuan Lin

Hui-Ping Li(4) Respectively compare and describe the analysis of remunerations to Directors, Supervisors,- 19 -

President and Vice Presidents as a percentage of earnings in the last two years anddescription of the policy, standards and packages of remunerations, procedure for making
such decision and relation to business performance and future risks:
Unit: NT$1,000
Title

Brogent

2015
All companies in
consolidated
statements

Director
Supervisor
10,705
12,822President
Note 1: The Company did not set up a Vice President position.
Note 2: The Company did not compile a consolidated statement

Brogent

2014
All companies in
consolidated
statements

11,295

11,295The total amount as a percentage of earnings (losses) in 2015 and 2014 wererespectively 11.41% and 5.03%. The Company determines the aforementioned
personnel remunerations according to the Company's business performance,
management performance, and standards in the market. The paid remuneration also
conforms to the Company's salary-related management regulations and should be
adequate for assuming responsibilities and risks.

4. Implementation of corporate governance(1)Operations of the Board of Directors
In 2015, a total of 10 (A) meetings of the Board of Directors were held in the most recent
year. The attendance was as follows:
Title

Chairman
Director
Director

Name

Attendance in(Note 1)

person (B)Chung-M ing Huang
Chih -H ung
O uyang
Chin -H uo
H uangAttendance rate (%)
By proxy

[B/A]

Note

(Note 2)100

100.0010

0100.00

9

0

90.00

Reelected on
2014.06.11
Reelected on
2014.06.11
Reelected on
2014.06.11

Independent
DirectorYi- H siang
H uang

9

0

90.00

Reelected on
2014.06.11

Independent

S hun-J en
Cheng

10

0

100.00Reelected on
2014.06.11

Director

Other matters that require reporting:
1. Matters stipulated in Article 14-3 of the Securities and Exchange Act and resolutions adopted by
the Board of Directors, to which an Independent Director has a dissenting or qualified opinion
that is on record or stated in a written statement,shall describe the date of the board meeting,- 20 -

2.
3.

term of the board, agenda items, opinions of Independent Directors, and actions taken by thecompany in response to the opinion of the Independent Directors: None.
Regarding Directors who recuse themselves from discussion or voting on an agenda item inwhich they have an interest, their names, agenda items, reason for recusal, and voting on an
agenda item shall be stated: Not applicable.
An evaluation of the goals set for strengthening the functions of the Board (e.g., setting up an
auditing committee and enhancing information transparency) and implementation status during
the current and immediately preceding fiscal years.
(1) The operation of the Board of the Company complies with laws and regulations, the Articles
of Incorporation, and the Exercise of Powers of the resolutions in shareholders' meetings. All
Directors adhere to the principle of good faith and duty of care in addition to possessing theexpertise, skills, and literacy required for exercising their powers, in order to maximize
benefits for all of their shareholders.
(2) To establish a favorable governing system for the Company's Board of Directors, a soundsupervision function, and strengthened management mechanism, the Company formulated theBoard of Director Meeting Agenda Regulations in accordance with Article 26-3 of the
Securities and Exchange Act, including agenda items, execution of operations, matters thatshould be recorded in meeting minutes, announcements, and other matters that should be
adhered to, and the aforementioned shall be handled in accordance with the formulated
regulations.
(3) In addition to regularly conducting self-examination of the operation of the Board of
Directors and reinforcing the functions of the Board, the Company requires its internal
auditors to produce auditing reports that describe the Board operations in order to conformwith government regulations.
(4) Establish a Remuneration Committee to assist the Board of Directors in executing its duties.

Note 1: Directors and Supervisors who are also legal persons shall disclose the name ofcorporate shareholders and their representatives.
Note 2:(1) For Directors or Supervisors who resigned from their position prior to the end of thefinancial year, the date of their resignation shall be noted in the Note column. Theiractual attendance rate (%) shall be calculated according to the frequency they attended
meetings of the Board during their tenure and their attendance in person.
(2) For changes to Directors or Supervisors before the end of the financial year, the new
and old Directors or Supervisors shall be listed and Directors or Supervisors who are
old or new and the date of their reelection and changes shall be noted in the Notecolumn. Their actual attendance rate (%) shall be calculated according to thefrequency they attended meetings of the Board during their tenure and theirattendance in person.

(2)State of operations of the audit committee or attendance ofSupervisors in board meetings: The Company does not have anaudit committee set up. Attendance of Supervisors in board
meetings:
In 2015, a total of 10 (A) meetings of the Board of Directors were held in the mostrecent year. The Supervisor attendance was as follows:
Attendance in Attendance rate
Title
Name
Note
person (B)(%)- 21 -

(B/A) (Note)
Supervisor

Chun -Nan
Chen

10100.00Supervisor

Chun -Hao
Cheng

10

100.00Supervisor

Yung- Liang Huang10100.00Reelected on
2014.06.11
Reelected on
2014.06.11
Resigned on
2015.03.09
Newly elected
on 2014.06.11

1. Composition and responsibility of Supervisors:(1) Communication between Supervisors and Company's employees andshareholders: Supervisors communicate with employees and shareholders
through the company spokesperson. This communication channel has beeneffective in past years, thereby facilitating supervisory functions.
(2) Communication between Supervisors and the Company's internal Audit
Manager and CPA (e.g., items, methods, and outcomes of communicatingcompany financial status and business conditions): The Company invites
its Supervisors to attend board meetings; therefore, the Company reports
the financial statement and business conditions of the Company during theboard meetings or designates the Audit Manager to report the evaluation
results of internal audits. All Supervisors may express their opinions
during the meetings. Moreover, the financial statements approved by the
CPA are submitted to the Supervisors for approval. If Supervisors voice
their opinion when reviewing the financial statements, such opinion shallbe either first explained by the CPA or be communicated to the CPA.
2. If a Supervisor voices an opinion in the Board of Directors meeting, the date of
the board meeting, term of the board, agenda items, resolutions adopted by theboard, and actions taken by the company in response to the opinion of theSupervisor shall be described: None.
Note:＊For Independent Directors who resigned from their position prior to the end of thefinancial year, the date of their resignation shall be noted in the Note column. Theiractual attendance rate (%) shall be calculated according to the frequency they attended
meetings of the Board during their tenure and their attendance in person.
＊For changes to Independent Directors before the end of the financial year, the new and
old Independent Directors shall be listed and Independent Directors who are old or new
and the date of their reelection and changes shall be noted in the Note column. Theiractual attendance rate (%) shall be calculated according to the frequency they attended
meetings of the audit committee during their tenure and their attendance in person.

- 22 -

(3)Corporate governance implementation status and deviations from Corporate Governance Best-PracticePrinciples for TWSE/TPEx Listed Companies and reasons
State of Operations (Note 1)
Assessed areas

1. Does the company establish and disclose its
corporate governance principles inaccordance with the Corporate GovernanceBest-Practice Principles for TWSE/TPEx
Listed Companies?
2. Shareholding structure & shareholders' rights(1) Does the company establish internal operatingprocedures for handling shareholder
suggestions, questions, complaints orlitigation and handled related mattersaccordingly?
(2) Does the company have a list of major
shareholders that have actual control over theCompany and a list of ultimate owners of
those major shareholders?
(3) Does the company establish and implement
risk management and firewall systems
between the Company and its affiliates?
(4) Does the company establish internal rules
against insiders trading with undisclosed
information?
3. Composition and responsibilities of the Boardof Directors(1) Does the Board of Directors develop andimplement a diversified policy for the

Yes

V

No

Summary
Handled in accordance with Corporate GovernanceBest-Practice Principles for TWSE/GTSM Listed
Companies.

(1) The Company has stock affairs specialists and astock affairs proxy agency to assist withhandling such affairs.

V

V

Deviations from Corporate
Governance Best-PracticePrinciples for TWSE/TPEx
Listed Companies andreasons
No deviation from Corporate
Governance Best-PracticePrinciples for TWSE/GTSM
Listed Companies.

No deviation from Corporate
Governance Best-PracticePrinciples for TWSE/GTSM
Listed Companies.

(2) Yes, according to the shareholders' registry
provided by the stock affairs proxy agency, andwe regularly report changes to the stock rights of
our Directors, Supervisors, and managerial
officers.
(3) The Companyhas set up internal rules in the
Company’s Internal Control System and AffiliatedCorporations Management.
(4) The Company's operation is conducted according to
the extent of internal control.

(1) The Company has set up 2 seats for Independent
Directors.

- 23 -

No deviation from Corporate
Governance Best-PracticePrinciples for TWSE/GTSM

State of Operations (Note 1)
Assessed areas

Yes

composition of its members?
(2) Does the company voluntarily establish otherfunctional committees in addition to
remuneration committee and audit committee?
(3) Does the company establish standards andmethod for evaluating the performance of theBoard of Directors, and implemented it
annually?
(4) Does the company regularly evaluate theindependence of CPAs?

4. Does the company establish a communication
channel and build a designated section on its
website for stakeholders, and properly respondto corporate social responsibility issues ofconcern to the stakeholders?
5. Does the company designate a professional
shareholder service agency to deal withshareholder affairs?
6. Information disclosure(1) Does the company establish a corporatewebsite to disclose information regarding thecompany's financial, business and corporate
governance status?
(2) Does the company have other information

No

Summary(2) The Company has established a Remuneration
Committee and proposed recommendations
regarding the remunerations to its Directors,
Supervisors, and managerial officers.

Deviations from Corporate
Governance Best-PracticePrinciples for TWSE/TPEx
Listed Companies andreasons
Listed Companies.

(3) The Company currently has no method forevaluating the performance of the Board of
Directors.

V

V

V

(4) The Company regularly evaluates theindependence of CPAs. The Company's CPAs
are hired by the Board of Directors at least once
per year, and they have no interest relationshipwith the Company and are strictly independent.
The Company has a spokesperson and representative No deviation from Corporate
spokesperson who act as the communication channel Governance Best-Practicefor the Company.
Principles for TWSE/GTSM
Listed Companies.
The Company commissions the stock affairs agency No deviation from Corporate
department of Taishin International Bank to handle Governance Best-Practice
shareholder affairs.
Principles for TWSE/GTSM
Listed Companies.
(1) Web address: www.brogent.com; the Company No deviation from Corporate
has designated personnel to collect and disclose Governance Best-PracticeCompany information.
Principles for TWSE/GTSM(2) Spokesperson: President Chih-Hung Ouyang; Listed Companies.
investors can also access the Company's- 24 -

State of Operations (Note 1)
Assessed areas

disclosure channels (e.g., maintaining an
English-language website, appointing
responsible people to handle informationcollection and disclosure, creating a
spokesperson system, webcasting investor
conference on the company website)?
7. Is there any other important information tofacilitate a better understanding of thecompany’s corporate governance practices(including but not limited to employee rights,
employee wellness, investor relations, supplier
relations, rights of stakeholders, continuing
education of Directors and Supervisors, theimplementation of risk management policies
and risk evaluation standards, theimplementation of customer relations policies,
and purchasing insurance for Directors andSupervisors)?

Yes

No

Summary

Deviations from Corporate
Governance Best-PracticePrinciples for TWSE/TPEx
Listed Companies andreasons

information regarding the company's financial,business and corporate governance status from
the Market Observation Post System.

V(1) Employee rights protection and employee care No deviation from Corporate
measures adopted by the Company:
The Governance Best-PracticeCompany
providesequal
employment Principles for TWSE/GTSM
opportunities, offers employee group insurance, Listed Companies.
arranges health check ups regularly, andestablishes legal employee welfare committee toprotect employee rights. Furthermore, we
comply with law in enrolling every employee inlabor and health insurance and disburse pension
reserve funds to them. The Company establishes
appropriate channels for employees to file theircomplaint and values the importance of
employee training.
(2) The Company's relationship with its investors:
The Company holds shareholder meetings
according to law every year and adequately gives
its shareholders the chance to raise questions andmake proposals. In addition, we also have set up
spokespersons and representative spokespersonin accordance with law and designate them tohandle matters between the Company and its
investors. Moreover, the Company announcesand reports any information that should be- 25 -

State of Operations (Note 1)
Assessed areas

Yes

No

Summary
disclosed as required by the competentauthorities. Thus, information that potentiallyinfluences investor decisions is provided inreal-time.
(3)
The
Company maintainsasmoothcommunication channel with its suppliers andstakeholders, including partner banks, othercreditors, employees, and clients.
(4) Continuing education of Directors andSupervisors: The members of the Company's
Board of Directors possess professional
backgrounds and practical experience in business
management; they occasionally attend relevant
educational courses. The continuing education
status of the Board of Directors in 2014 and2015 to the print date of the Prospectuses are
displayed in the following table.
(5) Implementation status of risk management
policies and standard risk measures:
The
Company emphasizes the importance of risk
management, complies with relevant laws andregulations in executing various policies, andestablishes internal auditors who ensure that theexecution of relevant policies conforms toregulations.
(6) Accountability insurance for Directors andSupervisors: The Company has purchased
relevant accountability insurance for its
Directors, Supervisors, and managerial officers.

- 26 -

Deviations from Corporate
Governance Best-PracticePrinciples for TWSE/TPEx
Listed Companies andreasons

State of Operations (Note 1)
Assessed areas

8. Does the company have corporate governanceself-assessment report or have engaged anyother professional organization to conduct suchassessment? (If so, please describe the opinionof the board, the results of self or outside
evaluation, major deficiencies found,suggestions, or improvement actions taken)(Note 2)

Yes

No

Summary
The Company has not yet commissioned otherprofessional companies to compile corporate
government evaluation report.

V

Deviations from Corporate
Governance Best-PracticePrinciples for TWSE/TPEx
Listed Companies andreasons
Since 2014, the TWSE has
evaluated the corporate
governance system of
TWSE-listed and OTC
companies; therefore, theCompany has not yet
commissioned otherprofessional companies tocompile corporate
government evaluation
report.
No deviation from Corporate
Governance Best-PracticePrinciples for TWSE/GTSM
Listed Companies.

Note 1: The operating condition shall be described in the Summary column regardless of whether "Yes" or "No" is selected.
Note 2: The corporate governance self-evaluation report mentioned here refers to the corporate governance evaluation conducted and explained by
the company itself, and is a report on how the company enforces corporate governance.

- 27 -

The Continuing Education Status of Directors and Supervisors in 2014 and 2015 to the date of this Annual Report
Title
Chairman
Chairman
Chairman
Director
Director
Director
Director
Independent
Director
Independent
Director
Independent
Director
Independent
Director
Independent
Director
Supervisor

Name
Chung-Ming
Huang
Chung-Ming
Huang
Chung-Ming
Huang
Chih-Hung
OuyangChih-Hung
OuyangChin-Huo
Huang
Chin-Huo
Huang
Yi-Hsiang
Huang
Yi-Hsiang
Huang
Shun-Jen Cheng
Shun-Jen Cheng

Organizer
Taiwan Corporate Governance
Association
Taiwan Corporate Governance
Association
Taiwan Academy of Banking& Finance
Taiwan Corporate Governance
Association
Taiwan Corporate Governance
Association
Taiwan Corporate Governance
Association
Taiwan Corporate Governance
Association
Taiwan Corporate Governance
Association
Taiwan Corporate Governance
Association
Taiwan Corporate Governance
Association
Taiwan Corporate Governance
Association

Course name
Legal Responsibility on Fraudulent Financial Report
Disclosure of Corporate Major Information andResposibilities of Directors
Forum on Corporate Governance- How to Adapt Tax
ReformHours
3 hours
3 hours
3 hours

Legal Responsibility on Fraudulent Financial Report

3 hours

Disclosure of Corporate Major Information andResposibilities of Directors

3 hours

Legal Responsibility on Fraudulent Financial Report

3 hours

Disclosure of Corporate Major Information andResposibilities of Directors

3 hours

Legal Responsibility on Fraudulent Financial Report

3 hours

Disclosure of Corporate Major Information andResposibilities of Directors

3 hours

Legal Responsibility on Fraudulent Financial Report

3 hours

Disclosure of Corporate Major Information andResposibilities of Directors
2015 Forum on Corporate Governance – Insider Trading
and Corporate Social Resposibilities

Shun-Jen Cheng

Securities & Futures InstituteChun-Nan Chen

Taiwan Corporate Governance
Legal Responsibility on Fraudulent Financial Report
Association- 28 -

3 hours
3 hours
3 hours

Supervisor

Chun-Nan Chen

Supervisor

Chun-Nan Chen

Supervisor(Note 1)Supervisor(Note 1)

Chun-Hao
Cheng
Chun-Hao
Cheng
Yung-Liang
Huang
Yung-Liang
Huang
Yung-Liang
Huang

Supervisor
Supervisor
Supervisor

Taiwan Corporate Governance
Association
Taiwan Academy of Banking& Finance
Taiwan Corporate Governance
Association
Taiwan Corporate Governance
Association
Taiwan Corporate Governance
Association
Taiwan Corporate Governance
Association
Taiwan Academy of Banking& Finance

Disclosure of Corporate Major Information andResposibilities of Directors
Forum on Corporate Governance- How to Adapt Tax
Reform3 hours
3 hours

Legal Responsibility on Fraudulent Financial Report

3 hours

Disclosure of Corporate Major Information andResposibilities of Directors

3 hours

Legal Responsibility on Fraudulent Financial Report

3 hours

Disclosure of Corporate Major Information andResposibilities of Directors
Forum on Corporate Governance- How to Adapt Tax
ReformNote 1: Resigned on 2015. 03.09- 29 -

3 hours
3 hours

(4) If the company has established a remuneration committee, it shall disclose thecomposition, duties, and operation of the committee
1. Members of the Compensation Committee
Criteria

Has at least 5 years of work experienceand meets one of the following
professional qualifications
An instructor A judge, public

Position(Note 1)

Meet the independence criteria(Note 2)

Have workor higher
prosecutor,
experience inposition in
attorney,commerce,theaccountant, orlaw, finance,
department of other professional or

Number ofcommerce,or technicalaccounting
law, finance, specialist related or aaccounting or to the needs of the profession
otherCompany who has necessary for
department
passed a national the businessother publiccompanies inwhich theNotemember also
(Note 3)serves as arelated to the examination and of thebusiness
received aCompanyneeds of the certificate therefor
Company in a

1

2

3

4

5

6

7

8

member of
their
compensation committee

public orprivate juniorcollege oruniversity

Name
Independent Yi-Hsiang
Director-       

-



-



       

-



-



       

2

Huang

External
Ching-Wencommittee
ChuangmemberExternal
Liang-Chien
committee
LimemberNone

Note 1: Please specify identity (Director, Independent Director, or other).
Note 2: If the committee member meets any of the following criteria in the two years before being appointed or during the ter m ofoffice, please check "" in the corresponding boxes.
(1) Not an employee of the Company or any of its affiliates;(2) Not a Director or Supervisor of the Company or any of its affiliates; The same does not apply, however, in cases where thecommittee member is an Independent Director of the Company, its parent company, or any subsidiary in which the Company
holds, directly or indirectly, more than 50 percent of the voting shares.
(3) Not a natural-person shareholder whose shareholding, together with those of his/her spouse, minor children, and shares held
under others’ names, exceed 1% of the total number of outstanding shares of the Company, or ranks the person in the top ten
shareholders of the Company.
(4) Not a spouse, relative within second degree of kinship, or lineal relative within third degree of kinship of any of the persons
in the preceding three paragraphs.
(5) Not a Director, Supervisor or employee of an institutional shareholder that holds directly 5% or more of the total number ofoutstanding shares of the Company or ranks in the top five shareholders.
(6) Not a Director, Supervisor, manager or shareholder holding 5% or more of the shares of a specified company or institutionthat has a financial or business relationship with the Company.
(7) Not a professional or an owner, partner, Director, Supervisor, manager or a spouse of the above mentioned who provides
commercial, legal, financial, accounting services or consultation to the Company or an affiliate of the Company.
(8) Not having any of the situations set forth in Article 30 of the Company Act of the R.O.C.
Note 3: If the member is a Director, please describe whether it conforms to Article 6-5 of the Regulations Governing the Appointment
and Exercise of Powers by the Remuneration Committee of a Company Whose Stock is Listed on the Stock Exchange or Traded
Over the Counter.

2. State of operations of the compensation committee(A) The Compensation Committee comprises 3 members.
Current term of office: July 15, 2014–June 10, 2017; a total of 3 (A) meetings of the- 30 -

Compensation Committee were held in the most recent year. The members'
qualifications and attendance were as follows:
Title

Name

ConvenorIndependent Director, Yi-Hsiang Huang
Brogent
CommitteeChing-Wen
member-External
Chuangcommittee member
Committee
member-External
Liang-Chien Li
committee member

Attendance inperson(B)

By proxy Attendance rate (%) (B/A)
Frequency(Note)

30

100.0030100.0030100.00Note

Other matters that require reporting:
1. If the Board of Directors did not adopt or revised the recommendations of the compensation committee, describe thedate of the board meeting, term of the board, agenda item, resolutions adopted by the board, and actions taken by
the company in response to the opinion of the compensation committee (if the remunerations approved by the
Board of Directors are better than those recommended by the compensation committee, describe the difference andreasons): None.
2. If with respect to any resolution of the compensation committee, any member has a dissenting or qualified opinion
that is on record or stated in a written statement, describe the date of committee meeting, term of the committee,
agenda item, opinions of all members, and actions taken by the company in response to the opinion of members:
None.
Note:
(1) For Compensation Committee members who resigned from their position prior to the end of the financial year, thedate of their resignation shall be noted in the Note column. Their actual attendance rate (%) shall be calculated
according to the frequency they attended meetings of the Compensation Committee during their tenure and theirattendance in person.
(2) For changes to compensation committee members before the end of the financial year, the new and old members
shall be listed and members who are either old, new, or reelected and the date of their reelection shall be specified
in the Note column. Their actual attendance rate (%) shall be calculated according to the frequency they attended
meetings of the compensation committee during their tenure and their attendance in person.

- 31 -

(5) Implementation of corporate social responsibility (CSR)
State of Operations (Note 1)
Assessed areas

Yes

1. Corporate governance implementation(1) Does the company establish corporate social
responsibility policy or system and examine its
implementation results?
(2) Does the company provide educational training on
corporate social responsibility on a regular basis?
(3) Does the company establish a dedicated or
concurrent unit in charge of promoting CSR withV
senior management authorized by the board to takecharge of proposing CSR policies and reporting to
the board?
(4) Does the company establish a reasonable salary
remuneration policy, and integrate the employee
performance evaluation system with its CSR
policy, and establish an effective reward anddisciplinary system?
2. Fostering a sustainable environment(1) Does the company endeavor to improve theefficiency of resource utilization and use recycledmaterials which have a low impact on theenvironment?
V(2) Does the company establish a proper environmental
management system based on the characteristics of
the industry?
(3) Does the company monitor the impact of climatechange on business operations, conduct

No

Summary (Note 2)(1) The Company has established Corporate Social
Responsibility Best Practice Principles andexamined its implementation effectiveness.
(2) The departments related to the social
responsibility of the Company all handle
relevant matters according to their duties.
(3) The Company has established the Ethical Codeof Conducts for Directors, Supervisors, andManagerial Officers.
(4) The Company has established Work Rules andGuideline for Project Performance Reward
Management, which clearly specifies relevant
effective rewarding and punishment systems.

Departure from Corporate Social
Responsibility Best PracticePrinciples for TWSE/GTSM
listed companies and reasons
No deviation from Corporate
Governance Best-PracticePrinciples for TWSE/GTSM
Listed Companies.

(1) The Company generally endeavor to increase the No deviation from Corporate
efficiency of resource utilization and use Governance Best-Practiceenvironmentally friendly materials as much as Principles for TWSE/GTSM
possible to reduce the impact on the Listed Companies.
environment.
(2) The Company has established relevant
management regulations for the safety ofworking environment.
(3) The Company often holds internal promotional- 32 -

State of Operations (Note 1)
Assessed areasYesgreenhouse gas inventory and formulate strategies
for energy conservation and carbon andgreenhouse gas reduction?
3. Upholding public interests(1) Does the company formulate appropriate
management policies and procedures according torelevant regulations and the International Bill of
Human Rights?
(2) Has the company set up an employee hotline orgrievance mechanism to handle complaints
properly?
(3) Does the company provide a safe and healthy
working environment and provide employees withregular safety and health training?
(4) Does the company set up a channel forcommunicating with employees on a regular basis,V
and reasonably inform employees of any
significant changes in operations that may have an
impact on them?
(5) Does the company set up effective careerdevelopment and training programs for its
employees?
(6) Does the company establish any consumer
protection mechanisms and complaint procedures
regarding R&D, purchasing, production, operationand service?
(7) Does the company advertise and label its goods andservices according to relevant regulations andinternational standards?

No

Summary (Note 2)

Departure from Corporate Social
Responsibility Best PracticePrinciples for TWSE/GTSM
listed companies and reasonsactivity, reminds employees to switch off lights
when leaving a room and classify their trash, tofacilitate reducing the environmental impact of
the company's operation.
(1) The Company adheres to the labor regulations in No deviation from Corporate
the Labor Standards Act to protect employees' legal Governance Best-Practicerights. In addition, the Company disburses pension Principles for TWSE/GTSM
fund and labor welfare fund in accordance with law. Listed Companies.
Concurrently, the Company and its employees havealso established employee welfare committee andhold employer–employee meetings to implement
various welfare activities and coordinate
employer–employee
relationship,
therebypromoting matters related to employer–employee
cooperation.
(2) Yes, the Company has set up employee
grievance mailbox and has designatedpersonnel to handle relevant matters.
(3) The Company endeavors to provide a safe andhealthy working environment and provide
employees with regular safety and healthtraining.
(4) The Company regularly convenes meetings topresent and communicate the Company’sbusiness development direction and strategies
to its employees.
(5) The Company has two training programs,
namely Supervisors/regular training and general- 33 -

State of Operations (Note 1)
Assessed areas

(8)

(9)

Yes

Does the company evaluate the records ofsuppliers’ impact on the environment andsociety before doing business with the supplier?
Do the contracts between the company and its
major suppliers include termination clauses
which come into force once the suppliers breachthe corporate social responsibility policy andcause significant impact on the environmentand society?

No

Summary (Note 2)

Departure from Corporate Social
Responsibility Best PracticePrinciples for TWSE/GTSM
listed companies and reasons

employee/occasional training. The content oftraining depends on the job position of theemployees.
(6) There are no relevant operations currently.

(7)

Company products are designed andmanufactured in accordance with standard
regulations of various countries. These products
have also been certified by the following:
China: GB-8408 Amusement Device Safety
Code(Amusement device satety Cood)Europe: EN-13814(Fairground and amusementpark machinery and Structure-Safety)
USA and Canada: ASTM-F2291 (Standard
Practice for Design of Amusement and Devices)(8) No, a list of supplier evaluation standards wasadded.
(9) The Company upholds the principle of ethicalcorporate management and collectively
cooperate with the suppliers in development
projects to facilitate coexistence and collective
prosperity.

4. Enhancing information disclosure(1) Does the company disclose relevant and reliable
information regarding its corporate social V
responsibility on its website and the Market
Observation Post System?

The Company discloses relevant information No deviation from Corporate
regarding its corporate social responsibility on its Governance Best-Practicewebsite, annual report, and the prospectuses.
Principles for TWSE/GTSM
Listed Companies.

- 34 -

State of Operations (Note 1)

Departure from Corporate Social
Responsibility Best PracticeAssessed areas
Principles for TWSE/GTSM
Yes NoSummary (Note 2)
listed companies and reasons
5. If the Company has established the corporate social responsibility principles based on "Corporate Social Responsibility Best Practice Principles for
TWSE/TPEx Listed Companies", please describe any discrepancy between the principles and their implementation: Not applicable

6. Other important information to facilitate a better understanding of the company’s corporate social responsibility practices: None.
7. If the corporate social responsibility reports have received assurance from external institutions, they should state so below: Not applicable

Note 1: The operating condition shall be described in the Summary column regardless of whether "Yes" or "No" is selected.
Note 2: For companies that have compiled CSR reports, the summary may specify the CSR reporting method and page numbers.

- 35 -

(6) Implementation of ethical corporate management
State of Operations (Note 1)

Assessed areas

Yes

1. Establishment of ethical corporate management policy
and approaches(1) Does the company declare its ethical corporate
management policies and procedures in its rules andexternal documents, as well as the commitment of its
board and management to implementing themanagement policies?
(2) Does the company establish policies to prevent
unethical conduct with relevant procedures, guidelines
of conduct, punishment for violation, rules of appeal
clearly stated in the policies, and implement thepolicies?

(3) Does the company establish appropriate precautionary
measures for operating activities with higher risk ofunethical conducts provided in Paragraph 2, Article 7 of
the Ethical Corporate Management Best-PracticePrinciples for TWSE/TPEx Listed Companies or within
its scope of business?

V

Departure from "EthicalCorporate Management
Best Practice Principles forNo
Summary
TWSE/GTSM Listed
Companies" and reasons(1) The Company strictly adheres to the laws and No deviation from
regulations stipulated in the Company Act, Corporate Governance
Securities and Exchange Act, Business Entity Best-Practice Principles for
Accounting Act, and other regulations for listed TWSE/GTSM Listed
and OTC companies. The Company has Companies.
formulated internal control systems according
to regulations, established internal auditing
office,andensuredtheeffective
implementation of relevant operations, torealize the fundamental concepts of ethicalcorporate management.
(2) The Company has formulated Ethical Corporate
Management Principle according to the EthicalCorporate Management Best Practice Principles
for TWSE/GTSM Listed Companies andpromoted the importance of ethical code of
conduct, educating each employee on thecompany's core value and compliance systems.
The Company regularly offers training
programs.
(3) The Company requires its Directors,
Supervisors, managerial officers, andemployees to refrain from engaging in bribery
or providing illegal political donations during a- 36 -

State of Operations (Note 1)
Assessed areas

Yes

No

Summary

Departure from "EthicalCorporate Management
Best Practice Principles for
TWSE/GTSM Listed
Companies" and reasonsbusiness activity. The Company stipulates thatthey may not directly or indirectly provide orreceive unreasonable gifts, treatments, or otherimproper benefits to prevent employees frompursuing personal interests at the expense of
the company's rights and interests.
2. Implementation of ethical corporate management(1) Does the company evaluate the ethical records of parties
it does business with and stipulate ethical conduct
clauses in business contracts?
(2) Does the company establish a dedicated (concurrent)
unit under the Board of Directors to promote ethicalcorporate management, and report the status of
implementation to the board?
(3) Does the company establish policies to prevent conflictsof interest, provide appropriate channels for filingrelated complaints and implement the policies
accordingly?
(4) Does the company have effective accounting system andinternal control systems set up to facilitate ethicalcorporate management, and are those systems audited byeither internal auditors or CPAs on a regular basis?

V

No deviation from
(1) The Company's clients and suppliers are mostly Corporate Governancewell-known
companies
whose
ethical Best-Practice Principles for
management information is easily accessible. TWSE/GTSM Listed
When signing a business contract, the contract Companies.
also incorporates regulations regarding ethicalmanagement.
(2) The Company invites Supervisors to attend themeeting of the Board of Directors, thereby
maximizing the supervisory functions ofSupervisors.
(3) The Company has an Internal Material
Information Processing Operating Procedure,
specifying
that
Directors,
Supervisors,
managerial offices, and employees may not leakinternal material information to others, inquire
the company's internal material informationfrom others, or collate unpublished internalmaterial information of companies that are
irrelevant to their job duties. They are also
prohibited from leaking the company's- 37 -

State of Operations (Note 1)
Assessed areas

Yes(5) Does the company hold internal and external
educational trainings on operational integrity regularly?

3. Operation of whistleblowing system(1) Does the company establish concrete whistleblowing
and reward system and have a convenient reporting
channel in place, and assign an appropriate person tocommunicate with the accused?
(2) Does the company establish standard operatingprocedures for investigating reported cases and related
confidentiality mechanism?
(3) Does the company provide proper whistleblower
protection?

No

Summary

Departure from "EthicalCorporate Management
Best Practice Principles for
TWSE/GTSM Listed
Companies" and reasons

unpublished internal material information toothers.
(4) To implement ethical management, theCompany has established effective accounting
system and internal control system, and hasinternal auditors regularly check the situation
regarding compliance with the aforementioned
systems. To implement ethical management, theCompany has established effective accounting
system and internal control system, and hasinternal auditors regularly check the situation
regarding compliance with the aforementioned
systems.
(5) The Company promotes the concepts of
ethical management in Director andSupervisor training and managerial
meetings.

V(1) The Company has established whistleblowing No departure from "Ethicalchannels and developed relevant punishment Corporate Management Bestsystems and reporting mechanisms.
Practice
Principles
for
TWSE/GTSM
Listed(2) Yes.
Companies."(3) The Company adopts an anonymous reporting
policy.

- 38 -

State of Operations (Note 1)
Assessed areas

Yes

No

Summary

Departure from "EthicalCorporate Management
Best Practice Principles for
TWSE/GTSM Listed
Companies" and reasons

4. Enhancing information disclosure(1) Does the company disclose information regarding thecompany's ethical corporate management principles andimplementation status on its website and the Market
Observation Post System?

(1) The Company has set up a website for disclosing No departure from "Ethicalcorporate governance information.
Corporate Management BestV
Practice Principles for
TWSE/GTSM Listed
Companies."
5. If the company has established Ethical Corporate Management Principles in accordance with the "Ethical Corporate Management Best PracticePrinciples for TWSE/TPEx Listed Companies", describe any discrepancy between the principles and their implementation: None.
6. Other important information to facilitate a better understanding of the company's implementation of ethical corporate management: (e.g., inspect andrevise existing ethical management principles) None

Note 1: The operating condition shall be described in the Summary column regardless of whether "Yes" or "No" is selected.

- 39 -

(7) If the company has established corporate governance principles andrelated guidelines, disclose the means of accessing this information:
The Company has not formulated corporate governance principles
but has disclosed rules pertaining to corporate governance on theMarket Observation Post System, such as: Ethical Corporate
Management Principles and Remuneration Committee Organization
Rules.
(8) Other significant information which may improve the understanding ofcorporate governance and operation: None.
(9) The following matters pertaining to the implementation status ofinternal control systems should be disclosed:
1. Statement on Internal Control: (Please refer to Appendix 1).
2.The Company engages an accountant to examine its internal control system, disclose the
CPA examination report: None.

(10) Penalty on the Company and its personnel or punishment imposed by
the Company on personnel in violation of internal control systemregulations, major deficiencies and improvement in the past year and
up to the date of report: None.
(11) Important resolutions adopted in shareholders meeting and Board of
Directors' meeting in the past year and up to the date of report.
1. Shareholder’s Meeting
Date

Type of Meeting

Resolutions

A. Reporting Items(1) 2014 business report and financial report(2) 2014 Supervisor’s Review Report(3)Report on Issuing ofConvertible Corprate Bond
(4)Report on Issuing Private Placement Shares2015.05.20

Shareholders' B. Passed Items
meeting(1) 2014 business report and financial report(2) 2014 Profit Allocation Plan

C. Discussion Items(1) Capital increase out of 2014 earnings(2) Revising articles of the Corporate’s Article of
Association- 40 -

Implementation Status

1.The Borad of
Director’s Meeting set
2015.06.09
As Ex-Dividend
Date,and2015.08.05 as payable
date for cash andstock dividends(Capital increase outof 2014 earnings)。
2.Execution asscheduled.

2. Board of Directors’ Meeting
Date

Type of Meeting2015.02.03

Board ofDirectors

2015.03.03

Board ofDirectors

2015.03.24

Board ofDirectors

2015.05.13

Board ofDirectors

2015.05.20

Board ofDirectors

2015.06.05

Board ofDirectors

2015.07.21

Board ofDirectors

2015.08.11

Board ofDirectors

2015.11.11

Board ofDirectors

2015.12.30

Board ofDirectors

2016.01.27

Board ofDirectors

2016.03.09

Board ofDirectors

Resolutions
Passed the Year-End Bonus Disbursement Principle and Manager Year-End Bonus.
Passed the independence assessment for CPAs.
Passed the 2015 Financial Statement Certification and Public Expenditure by Grant Thornton
Taiwan.
Passed the revision for Articles of Incorporation.
Passed the proposed calling of 2015 general shareholders' meeting.
Passed the 2014 Statement on Internal Control.
Passed the 2014 business report and financial statements.
Passed the 2014 earnings distribution plan.
Passed the 2014 capital reserve transfer for issuance of new shares plan.
Passed the amended clauses of Articles of Incorporation.
Passed the 2015 First Employee Stock Option Plan Issuance and Stock Option Regulations.
Passed the issuance of employee stock option.
Passed the investment transfer for establishing subsidiary.
Passed the proposed calling of 2015 general shareholders' meeting.
Passed the 2015 First Quarter Financial Report.
Passed the 2014 Director and Employee Bonus Plan
Passed the Independent Director Compensation Plan.
Passed the Salary Adjustment Plan of Managers
Passed the Prive Placement Issuing Plan
Passed the 2014 Shareholder’s meeting resolution on Private Placement Share Plan.The remaining
shares will not be issued within thetime remained.
Passed the expansion plan of the 2nd stage of R&D and Experience Center.
Passed the resolution on determing the 2015 ex-dividend date and payable date andcapital increase
plan.
Passed the Supervisor Compensation Plan.
Passed the manager promotion plan
Passed the Dissolution of Business Strife Limitation Clause of Manager plan.
Passed the stock buyback plan to transfer to employees.
Passed the 2015 Second Quarter Financial Report.
Passed the financing limit expansion plan
Passed the 2015 Second Quarter Financial Report.
Passed the revision of「Lavel of Authority」planPassed the「Trading Process Pause and Renewal Application」plan.
Passed the 2016 OperationBudget Plan.
Passed the 2016 Audit Plan
Passed the amended clauses of Articles of Incorporation.
Passed the Year-End Bonus Disbursement Principle and Manager Year-End Bonus.
Passed the eveluatio plan of the independence of CPAs
Passed the authorization of Grant Thorton as 2016 Auditor fortheCompany’sfinancial report.
Passed the treasury share transfer to employee plan.
Passed the amended plan the 3rd stage of Kaohsiung Soft Park investment plan.
Passed「Enhancing the corporate-madefinancial report」plan.
Passed the 2015 Statement on Internal Control.
Passed the 2015 Director and Employee Bonus Plan
Passed the 2015 business report and financial statements.
Passed the 2015 earnings distribution plan.
Passed the increased 2 seats on the Board of Directors.
Passed the Dissolution of Business Strife Limitation Clause of New Director and Its Representative.
Passed the proposed calling of 2016 general shareholders' meeting.
Pass the Resignation of the Supervisor Chun-Hao Cheng- 41 -

(12) Dissenting or qualified opinion of Directors or Supervisors against
an important resolution passed by the Board of Directors that is on
record or stated in a written statement in the past year and up to thedate of report: None.
(13) Resignation and dismissal of managerial officers related to thefinancial report (including Chairman, President, Chief Accounting
Officer, Chief Financial Officer, Chief R&D Officer and Audit
Manager) in the past year and up to the date of report: Not applicable.

- 42 -

5. Information on fees to CPA(1) Information on fees to CPA classification table
Name of accounting firm

CPA
Duration of audit
Yi-Shun Chang
2015/1/1-2015/12/31
Yu-Chieh Lo

Grant Thornton Taiwan

Note

Unit: NT$1,000
Public fee item
Audit fee

Non-audit fee

Total

Amount classification
1
2
3
4
5
6



<NT$2,000,000
NT$2,000,000(incl.)–NT$4,000,000
NT$4,000,000(incl.)–NT$6,000,000
NT$6,000,000(incl.)–NT$8,000,000
NT$8,000,000(incl.)–NT$10,000,000
NT$10,000,000 or above(2) When nonaudit fees paid to affiliates, CPA firm, and CPA
equal more than one-fourth of the audit fee, the audit andnonaudit fees amount and nonaudit service content shall be
disclosed.
The Company's nonaudit fees are less than one-fourth of the audit fee; however,
we voluntarily disclose the information as follows:
Name ofaccounting
firm

CPA

Grant
Thornton
TaiwanYi-ShunChang,
Yu-Chieh
Lo.

Audit fee

2,880

Non-audit fee
Systemdesign-BusinessHumanregistration Resources

270-

Audit period

Others84

Note

Subtotal
354

Translation
2015/1/1and2015/12/31 consultationfee(3) If the company changes accounting firm and the amount ofaudit fee paid in the year of change is less than that in the year
before: N/A.
(4) If the audit fee is more than 15% less than that paid in theprevious year: N/A.
- 43 -

6. Changes to CPA information(1) Concerning former CPA
Date of change

Passed by the Board of Directors on November 13, 2013

Reason and description of Because of organizational reform of the Company's original
accounting firm, the Company hired the Grant ThorntonchangeTaiwan to provide its services. This firm has passed the ISO
9001:2008 international certification and is a globallywell-known accounting firm. Because of its internal
adjustments, changes to a CPA will be made.
Contracting parties

CPA

Appointed person

Describe the termination of Involved person
an appointed person or CPA Proactive

Not applicableNot applicableNo longer accepts Not applicableNot applicableor refusal to accept

termination of

appointment

appointment(continue)
appointment
Evaluation report opinions None.
other than unqualified
opinion in the past 2 years
and reasons
Dissenting opinion with

None

issuerAdditional disclosures

None.

(those stipulated in Article
10.5.1.4 of the Criteria shallbe disclosed)- 44 -

(2) Concerning succeeding CPA

Name of accounting firm
CPA
Date of appointment

Grant Thornton Taiwan
Yi-Shun Chang and Wen-Yu Lo
Passed by the Board of Directors on November 13,
2013

Items and results relating to

Not applicableaccounting methods for specifictransactions or accounting principles,and consultation of potential opinions
in financial reports

Written opinions regarding

Not applicablesucceeding CPA disagreeing with theopinions of the previous CPA(3) Previous CPA response to items in Article 10.5.1 and 10.5.2.3 of theCriteria: Not applicable.
7. The Chairman, President, financial or accounting manager of thecompany who had worked for the certifying accounting firm or its
affiliated enterprise in the past year
None.

- 45 -

8. Share transfer by Directors, Supervisors, managers andshareholders holding more than 10% interests and changes to sharepledging by them in the past year and up to the date of report(1) Changes to the share rights of Directors, Supervisors, managerial
officers, and major shareholders
Title(Note 1)

2015
Name

Chung-Ming
Huang
Chih-Hung
Director (President)
OuyangChin-Huo
Director
Huang
Chairman

Current year up to April 02

Increase (decrease) Increase (decrease) Increase (decrease) Increase (decrease)in shares heldin pledged sharesin shares heldin pledged shares

211,522－－－232,920－200,000

800,000

81,020－－－Independent Director

Yi-Hsiang
Huang

－

－

－

－

Independent Director

Shun-Jen
Cheng

－

－

－

－

Supervisor

Chun-Nan
Chen

78,637－－－

Supervisor(Note 2)Chun-Hao
Cheng

4,360

－

－

－

Supervisor

Yung-Liang
Huang

91,785－－－

Director ofTechnology Center

Teng-Hung
Lai

526

－

2,000

－

Chief Engineer &Director of ProjectCenterYi Chung
Huang

205

－

18,000－10,698－50,000120,000

1,783－

10,000－

Director of
Sui-Chuan
Administration Center
Lin
Audit Manager

Hui-Ping Li

Note 1: Shareholders holding more than 10% of the company's total shares shall be specified as a major shareholder and listed
separately.
Note 2: Resigned on 2016.03.09(2) Information on relative person of share transfer as related party: None.
(3) Information on relative person of share pledging as related party:None.

- 46 -

9.

Information on relationship between any of the top ten shareholders(related party, spouse, or kinship within the second degree)
April 02, 2016; Unit: Shares; %NAME (NOTE 1)

TITLES, NAMES AND
RELATIONSHIPS BETWEENTOTALSHARES HELDTOP 10 SHAREHOLDERSSHAREHOLDINSHAREHOLDING BY SPOUSE AND(RELATED PARTY, SPOUSE, NOTEG BY NOMINEECHILDREN
OR KINSHIP WITHIN THE
ARRANGEMENTSECOND DEGREE).
(NOTE 3)－
Shareholding
Shareholding
Shareholding
SharesSharesSharesName
Relationship
Percentage

Percentage

Sen-Hao Cheng

3,680,901

8.24－

Chih-Hung Ouyang

2,822,581

6.32

80,308Chung-Ming Huang

2,381,654

5.33 269,784－－

0.18 －－－－

1,975,445

4.42

－

－

－

1,975,445

4.42

－

－

1,706,565

3.82

－

－

1,369,834

3.07

－

－

Fu Wu Investment Ltd.
Representative:
1,111,879
Chih-Hung Ouyang

2.49

－

－

－

Yung-Liang Huang

1,033,466

2.31

－

－

Chin-Huo Huang

912,256

Ruentex Development
Co. Ltd.
Representative:
Chang-Cheng Chien
Ruentex Industries Ltd.
Representative:
Chih-Fan Wang
Changchun Investment
Co. Ltd.
Representative:
Chuan-Thai Cheng
Cathay Life Insurance
Ltd.Representative:
Hong-Tu Tsai

2.04 200,771－

Percentage

0.60

0.45

－

－

－

Legal
representative

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

－

Chih-Hung
OuyangLegal
representative

－

－

－

－

－

－

－

－

－

－

－

Fu Wu
Investment
Ltd.

Note 1: List all of the top ten shareholders and separately list the name of corporate shareholders and theirrepresentatives.
Note 2: Shareholding percentage is calculated according to the shares held in the name of others or under their own
name, or by their spouse, and minor children.
Note 3: The aforementioned shareholders including legal person and natural person shall disclose their relationshipaccording to the regulations for compiling financial reports by issuers.

- 47 -

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 theshareholding percentage:

Investee Company

Investor Company
SharesBrogent Creative
900,000
Inc.
Brogent
5,500,000
Mechanical Inc.
Brogent Hong
Kong Limited
Brogent Global
30,000,000
Inc.
Brogent Rides(Shanghai)
LimitedBrogent Creative(Shanghai)
LimitedShareholding
Percentage

Director, Supervisor,
Manger anddirector
indirect investment
Shareholding
SharesPercentage

Total
SharesShareholding
Percentage

60%

-

-

900,000

60%

61.11%--

5,500,000

61.11%

100%

-

-

-

100%

100%

-

-

30,000,00

100%

100%

-

-

-

100%

100%

-

-

-

100%

- 48 -

IV. Placement Situation
1.

Company capital and share capital(1) Sources of capital property other than cash is paid by subscribers
1. Type of stock
April 02, 2016; Unit: Shares
Authorized capital
Type of stock
Ordinaryshares

Note

Shares issued andoutstanding

Unissued shares

Total

44,677,977

5,322,023

50,000,000

OTC shares (Including 434,000

treasury shares)

2. Sources of capital
April 02, 2016;
Authorized capital
Issue
Year/month priceAmount(NTD) Shares

Paid-in capital
SharesAmount

Unit: 1,000 shares; NT$1,000

Note
Sources of capital property Subscriptions paid
other than cash is paid by with property othersubscribers
than cash

2001.1010

5,000

50,0001,500

15,000 Cash set up

2002.07

10

5,000

50,0005,000

50,0002003.1010

6,000

60,0006,000

2004.0910

12,000120,000

8,106

Capital increase of
NT$35,000,000
Capital increase of
60,000
NT$10,000,000
81,060 Capital increase of- 49 -

None.
None.
None.
None.

OthersApproval by Kaoshifu Jianergongzi Letter No.
09007412400
Approval by Kaoshifu Jianergongzi Letter No.
09109112601
Approval by Kaoshifu Jianergongzi Letter No.
09205920530
Approval by Kaoshifu Jianergongzi Letter No.

Authorized capital
Issue
Year/month priceAmount(NTD) Shares

Paid-in capital
Shares2005.03

10

12,000120,000

9,610

2005.0510

12,896

128,960

12,896

2006.0810

20,000200,000

17,442

2010.03

10

20,000200,000

19,612

2011.0610

30,000300,000

21,3562011.0910

30,000300,000

22,6262012.1010

30,000300,000

25,4552013.1010

30,000300,000

26,727.75

2014.0210

30,000300,000

27,470.02

2014.05

10

30,000300,000

29,013.43

2014.0710

50,000500,000

30,888.77

AmountNote
Sources of capital property Subscriptions paid
other than cash is paid by with property othersubscribers
than cash
NT$21,060,000
09300940610

Capital increase of
NT$15,040,000
Capital increase of
128,960
NT$32,860,000
Capital increase of
174,420
NT$45,460,000
Capital increase of
196,120
NT$21,700,000
Stock option conversion of
213,560
NT$17,440,000
Capital increase of
226,260
NT$12,700,000
Capital increase of
254,550
NT$28,290,000
Dividends and bonuses of
267,277.5
NT$12,727,500
First domestic conversion of
convertible corporate bond of
NT$1,274,400
274,700.2
Second domestic conversionof convertible corporate bondof NT$6,148,300
First domestic conversion of
convertible corporate bond of
NT$9,103,500
290,134.3
Second domestic conversionof convertible corporate bondof NT$6,660,500
First domestic conversion of
308,887.7 convertible corporate bond of
NT$10,350,100
96,100- 50 -

None.
None.
None.
None.
None.
None.
None.
None.

OthersApproval by Kaoshifu Jianergongzi Letter No.
09400391490
Approval by Kaoshifu Jianergongzi Letter No.
09400469250
Approval by Kaoshifu Jianergongzi Letter No.
09500652270
Approval by Kaoshifu Jianergongzi Letter No.
09900452210
Approval by Kaoshifu Siweijingshanggongzi
Letter No. 10001224680
Approval by Kaoshifu Siweijingshanggongzi
Letter No. 10001356410
Approval by Jingguangzhengfazi Letter No.
1010048593
Approval by Jingjiasanshangzi Letter No.
10200112100

None.

Approval by Jingjiasanshangzi Letter No.
10300015650

None.

Approval by Jingjiasanshangzi Letter No.
10300054610

None.

Approval by Jingjiasanshangzi Letter No.
10300090820

Authorized capital
Issue
Year/month priceAmount(NTD) Shares

Paid-in capital
Shares2014.0910

50,000500,000

33,635.77

2014.10

10

50,000500,000

33,679.98

2015.01

10

50,000500,000

39,679.98

2015.0610

50,000500,000

40,709.98

2015.0710

50,000500,000

44,677.98

Note

Sources of capital property Subscriptions paid
other than cash is paid by with property other
Otherssubscribers
than cash
Second domestic conversionof convertible corporate bondof NT$8,403,400
Capital reserve transfer
Approval by Jingjiasanshangzi Letter No.
336,357.7
None.
increase
10300104170
First domestic conversion ofApproval by Jingjiasanshangzi Letter No.
336,799.8 convertible corporate bond ofNone.
10300137580
NT$442,100
Approval by Jingjiasanshangzi Letter No.
396,799.8 Cash issueNone.
10400008080
Approval by Jingjiasanshangzi Letter No.
407,099.8 Cash issueNone10400066620
Approval by Jingjiasanshangzi Letter No.
446,779.8 Stock dividends
None
10400074690

Amount- 51 -

(2) Shareholder structure
Shareholder
structurequantity

Government Financial Other juristic
institution institutions
persons

Number of
Shareholders
No. of shares
held
Shareholding
percentage (%)

Individual
investors

April 02, 2016
Foreigninstitutions
Total
and
foreigners

0

18

52

3,427

53

3,550

0

1,953,597

12,115,236

28,848,359

1,760,785

44,677,977

0.00

4.37

27.12

64.57

3.94

100.00(3) Dispersion of equity ownership
Ordinary shares
Shares
1~ 9991,000~ 5,000
5,001~ 10,000
10,001~ 15,000
15,001~ 20,000
20,001~ 30,000
30,001~ 40,000
40,001~ 50,000
50,001~ 100,000
100,001~ 200,000
200,001~ 400,000
400,001~ 600,000
600,001~ 800,000
800,001~1,000,000>1,000,001
Total

Number ofshareholders
967
2,029
214
82
46
63
40
15
37
28
8
5
4
3

Shares held
163,157
3,678,860
1,566,029
1,022,274
832,329
1,508,980
1,375,647
670,225
2,528,401
3,717,306
2,006,705
2,237,942
2,699,035
2,613,317

April 02, 2016
Shareholding
percentage (%)
0.37%
8.23%
3.51%
2.29%
1.86%
3.38%
3.08%
1.50%
5.66%
8.32%
4.49%
5.01%
6.04%
5.85%

9
3,550

18,057,770
44,677,977

40.42%
100.00%(4) List of major shareholder (shareholders holding more than 5%of shares or top ten shareholders)SharesName of major shareholder
Sen-Hao Cheng
Chih-Hung Ouyang
Chung-Ming Huang
Ruentex Development Co. Ltd.
- 52 -

April 02, 2016
Shareholding percentage
No. of shares held(%)
3,680,901
8.24%
2,822,581
6.32%
2,381,654
5.33%
1,975,445
4.42%

SharesNo. of shares held

Name of major shareholder
Ruentex Industries Ltd.
Changchun Investment Co. Ltd.
Cathay Life Insurance Ltd.
Fu Wu Investment Ltd.
Yung-Liang Huang
Chin-Huo Huang

1,975,445
1,706,565
1,369,834
1,111,879
1,033,466
912,256

Shareholding percentage
(%)
4.42%
3.82%
3.07%
2.49%
2.31%
2.04%

(5) Stock price, net worth, earnings, dividends and related
information (2014-2015)
Year

Unit: NT$
Current year up to
April 02 , 201 6(Note 5)

2014

2015

Maximum

675

448

330.5

Stock price Minimum

174

199

267

Average431.04342.31

Net worth Basic

30.52

54.72

(Note 5)per share Diluted

19.84

Undistributed(Note 5)

Earnings Weighted average shares

32,87443,712(Note 5)per share Earnings per share

6.83

2.57

(Note 5)2

2.5 (Note 4)

Item

Cash dividend
Dividends
per share

Stock

Earnings

1

grantsCapital surplus

-

-

-

-

-

-

Price-earnings ratio (Note1)

63.11

133.19(Note 5)

Price-dividend ratio (Note2)

215.52136.92(Note 5)

Cash dividend yield (Note3)

0.00460.0073(Note 5)

Accumulated unpaid
dividend
Returnanalysis-＊If shares are distributed by surplus or capital reserve transfer, the adjusted market priceaccording to the number of issued shares and cash dividend information.
Note 1: Price-earnings ratio=Year's average per share closing price / earnings per
share.
Note 2: Price-dividend ratio=Year's average per share closing price / cash dividend pershare.
Note 3: Cash dividend yield= Cash dividend per share / year's average per shareclosing price.
Note 4: The 2015 proposal of surplus distribution has not been resolved in theshareholders' meeting.
Note 5: Earnings not yet calculated.
- 53 -

(6) Dividend policy and implementation status
1. Dividend policy
The Company shall pay dividends or bonuses when there is profit. Any
unappropriated earnings may be distributed as employee bonus in the sum of 5% to
15% The Director and Supervisor remuneration may not exceed 2%. If there are
accumulated losses of the company , the earnings should be reserved in advance tomake up the amount. Employee bonus shall be paid by stock or cash; nevertheless,the criteria of qualified employee should be determined by the Board of Directors.
When allocating the net profits for each fiscal year, the Company shall first
offset its losses in previous years and set aside a legal capital reserve at 10% of the
profits left over, until the legal capital reserve has equaled the total capital of theCompany; the remaining balance and unappropriated earnings for the year shall be
adjusted. Then, set aside special capital reserve in accordance with relevant laws or
regulations or as requested by the authorities in charge and to satisfy business needsof the Company. and the Board shall propose a distribution plan for any balanceremaining, and such balance shall be distributed in accordance with the resolution of
the shareholders’ meeting.
The Company is situated in a changing industrial environment, wherein thecompany life cycle is at a stable growth stage. Considering the Company's capitalrequirement for continuous expansion and business operations, as well as long-term
financial planning to satisfy shareholders’ needs for cash flow, the Company's
dividend policy was based on the residual dividend policy in the relevant laws andregulations of the Company Act. The future capital requirement is measured
according to the future capital budget plan of the Company; then, set aside the capitalrequired for earnings financing, and the remaining earnings shall be distributed by
way of cash or stock dividend. Particularly, cash dividend may not exceed 10% of thetotal dividend.

2. Dividend distribution to be proposed to the shareholders’meeting:
The Company's 2015 earnings distribution plan was approved by the Board on
March 09, 2016. Shareholders' meeting has not yet been held. The 2015 earnings
distribution plan is as follows:
Amount(NT$1,000)
110,610

Cash dividend- 54 -

Dividends per
share (NT$)
2.5

(7) Effect of the proposed stock dividends (to be adopted by the
Shareholders' Meeting) on the operating performance and earnings per
share:The Company did not release financial forecasts in 2015 and hence it is notapplicable.

(8) Employee bonus and remuneration to Directors andSupervisors
1. Dividend Policy for terms stated in the Articles ofIncorporation regarding employees' bonus and Directors'
and Supervisors' remuneration:
Please refer to the following:

4. Placement situation: 1. Company

capital and share capital, and (6) Company share dividend policy andimplementation status.

2. Basis for estimating the amount of employee bonuses
and remuneration to Directors/Supervisors, basis forcalculating the number of shares to be distributed as
stock bonuses, and the accounting treatment of thediscrepancy, if any, between the actual distributed
amount and the estimated amount, for the current
period:The Company estimates employee bonus and remunerations to
Directors and Supervisors according to the annual net profit, legal
capital reserve, and the value specified in the Article of Incorporation.
The estimated values shall be recognized as the expense for thecurrent period. If thereafter, the actual distribution differs from theestimated values in the resolution of shareholders' meeting, then it
shall be regarded as loss for the next year and shall not influence theratified financial report.

3. Earnings distribution proposal has passed the Boardof Directors but not the resolution of theshareholders' meeting:
The Company’s 2015 earnings distribution was approved by the
Board on March 09, 2016. The distributed employee bonus was
NT$16,059,000 and Director and Supervisor remuneration was
NT$3,211,000, and these values did not differ from the recognized
expense and the annual estimated amount.

- 55 -

4. Earnings distribution proposal passed in the
resolution of the shareholders' meeting:
Not applicable. The Company’s 2015 earnings distribution plan wasapproved by the Board on March 09, 2016. Shareholders’ meetinghas not yet been held.

5. Describe, where applicable, the reason and handlingapproach for the difference (including the number ofshares, the monetary amount, and the face value ofshares distributed) between the actual distribution of
employee bonus and remunerations to Directors andSupervisors and the approved employee bonus andremunerations to Directors and Supervisors:
Not applicable.

(9) Buyback of Treasury Stock:
April 02, 2016
Treasury stocks: Batch Order

1 st Batch

Price range

Transfer to employees
2015.07.22 to 2015.09.01
NTD 170.00 to NTD 488.00

Class, quantity of shares bought back

1,000,000 Ordinary Shares

Purpose of buy-backTimeframe of buy-back

266,071,991

Value of shares bought-back (in NT$ thousands)
Shares sold/transferred

566,000

Accumulated number of company shares held

434,000

Percentage of total company shares held (%)

0.97%

2.

Corporate bond (including overseas corporate bond)(1) Issued corporate bond:Date of issue
Face value
Place of issue and trading
Issue price
Total
Interest rate
Expiry date
Guarantor institution
Trustee
Underwriting agencies

First domestic secured corporate bond Second domestic unsecured corporatebond
2013.06.28
2013.07.01
NTD 100,000
NTD 100,000
ROC Taipei Exchange
ROC Taipei Exchange
Issuance according to the face value
Issuance according to the face value
NT$150,000,000
NT$150,000,0000%0%3-year period, expiry date:
5-year period, expiry date: 2018/07/01
2016/06/28
Taishin International Bank
None.
Taiwan Cooperative Bank
Taishin International Bank
Taishin Securities Co., Ltd
Taishin Securities Co., Ltd- 56 -

External lawyer
External auditor

Repayment method
Unpaid principal
Terms of redemption and prepayment

Restriction clauses

First domestic secured corporate bond Second domestic unsecured corporatebondLinshugen Attorney Firm, Li-Fei Chiu Linshugen Attorney Firm, Li-Fei Chiu
BDO Taiwan
BDO Taiwan
Yi-Shun Chang, Tsu-Cheng Huang,
Yi-Shun Chang, Tsu-Cheng Huang,
CPA
CPA
Issuance and conversion methods
Issuance and conversion methods
Please refer to the Chinese Version of Please refer to the Chinese Version of2015 Annual Report.
2015 Annual Report
NT$0
NT$0
Issuance and conversion methods Issuance and conversion methods
Please refer to the Chinese Version of Please refer to the Chinese Version of2015 Annual Report2015 Annual ReportIssuance and conversion methods
Issuance and conversion methods
Please refer to the Chinese Version of Please refer to the Chinese Version of2015 Annual Report2015 Annual Report

Name of credit rating institution, rating
None.
None.
date, corporate bond rating result
A m ount o f con ve r ted( ex ch an ge o rsubs c r ip t ion ) o rd in ary
By the end of December 31, 2014,
By the end of December 31, 2014,sh a re , glob a l
corporate bond was converted tocorporate bond was converted tod epos ito ry r ec e ip t , o r
ordinary shares worth
ordinary shares worth NT$150,000,000
oth e r se cu r it ies up to
NT$150,000,000
Other rights
th e da te o f th e annu a lr epo r t
Issuance and Conversion
Issuance and conversion methods
Issuance and conversion methods(Exchange or Subscription)
described in Appendix 4
described in Appendix 5
Rules
According to the security company
evaluation report, given that the

According to the security company
evaluation report, given that the

The effects of the issuance and conversion, creditor requests his/her corporate
bonds to be converted into theexchange, or subscription rules on thepossible dilution conditions and influence
Company’s ordinary shares, theon shareholders' equity
maximum dilution rate for

creditor requests his/her corporate
bonds to be converted into theshareholders’ share is 13.58%,
indicating limited dilution effect.

shareholders’ share is 13.58%,
indicating limited dilution effect.

Name of target fiduciary custodian
institution

Company’s ordinary shares, themaximum dilution rate forNot applicableNot applicable(2) Information of corporate bond conversion:
Corporate bond type
Year
Item
MarketMaximum
price of
Minimum
conversion
corporate
AveragebondConversion price
Conversion price duringissuance
Method of conversion
obligation

First domestic secured corporate
bond

Second domestic unsecured
corporate bond

2013

2014

2013

2014

203
107

822
265

245
103.3

629
311

109.92419.09111.04480.72

71.4

71.4

75

75

Issue new shares

Issue new shares

Note: First domestic secured corporate bond and second domestic unsecured corporate bond have all been converted into
ordinary share by the end of December 31, 2014.

- 57 -

(3) Issued exchanged corporate bond: None.
(4) Adopt shelf registration method to collect and issue ordinary
corporate bond: None.
(5) Issued subscribed corporate bond: None.
(6) Private placement of corporate bonds in the past three years to
the date of the annual report: None.
3.

Issuance of preferred stocks
None.

4.

Issuance of global depositary receipts (GDR)
None.

5.

Exercise of employee stock option plan (ESOP)
None.

6.

Restricted stock awards
None.

7.

Merger and acquisition
None.

8.

Issuance of new shares for acquisition of shares of othercompanies
None.

9.

Implementation of capital allocation plan

Ahead of schedule, behind in progress,
reasons, and improvement plans
Expected NT$250,000,000 According to the use of the initiallyestimated funds, the Company has used
Expenditure
ExpandActual NT$252,513,000 up the funds for the expansion plan of
R&D
the R&D Testing and Experience
Testing andCenter. The plan has been completed in100%
Experience Accumulated Expected
the third quarter of 2015. There should
implementati
Centerbe no major abnormalities.
on progress Actual
100.99%Plan

Implementation status

Expected NT$50,000,000
Expenditure
R&D
expenses0

ExpandOperation

ActualNT$50,460,000

Accumulated Expected
implementati
on progress Actual

100%

R&D funds were used up at the end of
the second quarter in 2014 as expected;
there were no major abnormal events.

100.92%

Expenditure Expected NT$817,240,000- 58 -The total amount of 2015 seasoned
equity offering was NT$1,757,240,000.

expenses
0Among it, NT$817,240,000 was usedmainly for operation expenses. The plan
was executed as scheduled; there were100%
no major abnormal events.

Actual NT$101,272,000
Accumulated Expected
implementati
on progress Actual

12.39%The total amount of 2015 seasoned
equity offering was NT$1,757,240,000.
Expenditure
Among it, NT$940,000,000 was used
Actual NT$418,063,000
for establishing affiliates. The fund wasused up as expected; there were no
Accumulated Expected
100% major abnormal events.
implementati
on progress Actual
44.47%
Expected NT$940,000,000

Other
expenses0- 59 -

V. Business Overview
I. Business Activities(1) Business Scope
1. Company's primary business activity
Information software
retailer

Electronic material retailer Computer installation

Information software
wholesaler
Information processing
serviceElectronic material
wholesaler
Electronic information
supply service

General advertising service Sound publishing

Information software
service
Arts service
Arts performance activity

Automated control
equipment engineering

Machinery installation

Machinery wholesaler

Computer and businessmachinery wholesaler

Electronic retailer

Computer and businessmachinery retailer

Intellectual property

Product design

Machinery retailer

Other machinery retailer

Wholesale of cultural
education, musicalinstrument, andeducational entertainment
necessities
Retailer of cultural
education, musicalinstrument, andeducational entertainment
necessities
International trade
Landscape and interior
designExcept for approved
business activities, may
engage in activities that are
not prohibited or restrictedby law

2. Company's primary products and their operating
weightUn it : N T$1, 000

Product Category
Simulator rides
Mobile device software
Others (Note)
Net revenue

2014
2015
Net revenue
Operating Net revenue Operating
weightweight812,086
97.90
675,537
95.76
2,377
0.29
593
0.09
15,048
1.81
29,294
4.15
829,511100.00705,424100.00N ot e : O the rs p r im a r ily r e fe r to incom e f rom rep a ir, m a int enan ce , and labo r a f fa irs .

- 60 -

3. The Company's products
Simulator Rides are the Company’s main product. Since moving to the Kaohsiung
Software Park in 2013, the Company has gradually placed its business focus on the
media-based attraction (MBA) industry, meaning that we combined our previously developed
3D real-time imaging and audiovisual multimedia technologies with the Stewart six-axis
motion platform and dynamic simulation techniques. Subsequently, the Company successfullycompleted the FlyOver Canada project in Vancouver, becoming the leader of the flight theater
industry. The Company's operating model has extended from selling hardware to digitalcontent development in recent years. In October 2013, we cooperated with Japan's Kodansha
in integrating Kodansha's comic characters into our simulator ride products, thereby jointly
developing a 4D animation of Attack on Titan. In 2014, Kodansha licensed its IP to us,
enabling the Company to sell the 4D product to its customers. Starting from 2015, theCompany will change its management model, from once-off selling of simulator rides tomanaging it with its customers. Moreover, the Company will work with the customer inplanning and developing relevant peripheral products, thereby expanding the sources ofincome.
In December 2015, The grand opening of i-Ride flight theater themed “ Attack
on Titan ” was held in Shan-Shun World, Toufen Township, Miaoli County,
Taiwan.

In addition to providing fun stimulation experience, Brogent’s product development teamput more stringent requirements to improve the fineness and security. Recently, our flighttheaters have been formally adopted by the United States UL certification. The 4D motion
cinema in Netherland, which can carry 100 people, also passed the European TUV NORD
safety certification.
- 61 -

An introduction to our products :Product namei-RideDescription

Images

The i-Ride, featuring a suspension seatplatform design, is the only dynamic flighttheater on the market built on a six degrees
of freedom (6DOF) motion platform. It not
only delivers super realism and fantastic
entertainment effects, but is also the mostrepresentative device among all extant
indoor gaming devices.
Riders' feet hang freely, to deliver the true
sensation of flying through the air. The
sweeping bird’s eye perspective delivers
unobstructed realism with no blind spots.
Wind, sound, light, water, and aromasheighten the sensation of conquering theair.
1)x-Ride2)With special 4D effects and 6DOF
platform, x-Ride is suitable for various
motion simulations and thematic videos

x-Ride3)Videos can be changed4)Diverse module design. Additional
mechanical compartments can be designed
according to the video content, thereby
creating a more realistic experience
1)Unlimited story topics2)Trackless and noiseless design for
self-driving cars

d-Rided-Ride3)Flexible plan scenes according to actual
needs onsite4)Combined with interactive game design,with touch, shoot, and hand gesture control
operating methods
1)High G-Force: Uses large-scale motion
platform that creates effects that simulate
high g-forces

VRide2)16:9 screen suitable for a diversity ofvideo topics; with special 4D effects, arealistic experience is created- 62 -

1)Adopts curved screen design to heighten
realism2)Suitable for various themes; with special
4D effects, users can immerse into thevideo content

1)The entire motion platform can move
forward and backward, strengthening therealistic and entertaining effects2)Spherical screen design achieves realistic
3D effects without having to wear 3D
glasses.
3)Surrounding effect with special 4D
effects makes the experience more realistic1)Two-sided curved screen design,
increasing visual sense of realism andexcitement
2)Vehicle can be changed depending on
the theme, such as traveling on the samecar, and with special 4D effects, it's as if
you're there in person1)You can either stand or sit, andexperience various sports activities
2)Screen type can be changed according toneeds, thereby creating a more realistic
experience3)Enjoy the fun of competing in groups4)Diverse designs; the appearance can be
designed according to different themes,
creating a unique experience
1)The 360° massive cylinder screen
delivers heightened realism and an
unobstructed panoramic view with no blindspots2)Passengers can walk safely and freely,
selecting their favorite perspective3)Suitable for various themes; with special
4D effects, users can immerse into thevideo content- 63 -

4. The Company's new future products (services)
The Company's operating model has extended from selling hardware to digital content
development in recent years. In October 2013, we cooperated with Japan's Kodansha in
integrating Kodansha's comic characters into our simulator ride products, thereby jointly
developing a 4D animation of Attack on Titan. In 2014, Kodansha licensed its IP to us,
enabling the Company to sell the 4D product to its customers. Starting from 2015, theCompany will change its management model, from once-off selling of simulator rides tomanaging it with its customers. Moreover, the Company will work with the customer inplanning and developing relevant peripheral products, thereby expanding the sources ofincome.
Furthermore, in response to the prevalence of online shopping activities, the convenienceof mobile devices, and the fact that people cannot visit large theme parks in remote areas
whenever they desire, the Company has endeavored to build a CitiPark indoor experience
center in the city, where transport is convenient. Using the Company's innovative imagination,
we combined simulator ride technologies with a variety of images, music, apparatuses, special
effects, and themes, enabling visitors to travel through space and time. Thus, with thisinnovation, the benefits of edutainment in learning geography and astronomy andexperiencing foreign cultures can be achieved. CitiPark is based on the operating model ofDisneyland; however, unlike Disneyland and Universal Studios Japan, which are located in a
suburban areas, CitiPark will be established in an area easily accessible to tourists, who canthen imagine themselves as a story character whenever, wherever they desire, thus creating anexperience economy that is just around the corner. The first CitiPark will open in Miaoli of
Taiwan, becoming the Company's first demonstration site.
Regarding the development of simulator rides, in addition to continuing investing in the
R&D and product optimization based on existing hardware designs, the Company alsoendeavors to add different product lines in response to global customer demand, customizing
products that are suitable for various types of customers.

(2) Industry overview
1.

Industry's current trends and future outlook

Since moving to the Kaohsiung Software Park in 2013, the Company has graduallyplaced its business focus on the media-based attraction (MBA) industry. The following section
presents an overview of the new media entertainment industries:
In the early days, theme parks were mainly equipped with mechanical and simple electronic
facilities such as the Ferris wheel, bumper cars, carousels, and roller coasters. However, as- 64 -

new technologies emerged, consumers gradually started to entertain themselves by engaging
in experience-based consumption activities. Thus, these facilitates can no longer attract
consumers, leading to the gradual decline of the once thriving theme parks. In replace of suchtheme parks is the simulator ride equipment that combines digital contents and fantasies
well-known to adolescents. Moreover, simulator ride equipment is not only entertaining but
also educational. This trend of the experience economy is increasing in the Asian market.
According to the 2013 global tourist attraction report published by the authoritative
Theme Entertainment Association (TEA), the global theme park industry has showed steady
growth in 2013. Particularly, the number of visitors to top 10 theme parks worldwide grew by
5.4% in 2012, and the growth rate for the top 25 theme parks was 4.3%. The growth in thenumber of visitors from Asian regions was the most significant, at 7.5%. In the Middle East
regions, construction for large-scale theme parks has commenced such as the Warner Bros in
Abu Dhabi. The overall growth rate for Europe remained steady, but United Kingdom,
Germany, and Denmark all exhibited stronger growth.
Current Asian theme parks are experiencing the same bottleneck. For example, China's
theme park exhibited overly high ratio of entrance fees to total revenue (80%) and low tourist
revisit rate (20%). To effectively solve the aforementioned problems, new amusement parks
must focus on product structures and customer services. While theme parks in Taiwan and
China had committed to raising their entrance price to increase their income, theme parks in
non-Asian countries such as the European and American regions have developed peripheralproducts, lowering the proportion of entrance fee income to 50%.
Furthermore, the 2014 annual report of Disney revealed that its income from peripheralproducts grew 22% compared with the previous year, primarily because of the substantial
sales it made from Frozen and Spider-man products. Disneyland's actual income originates
mainly from souvenirs and restaurants, both of which involve low fixed cost. Moreover,customers tend to favor Disney animations, and therefore Disney products can be sold at ahigh price. Based on these facts, peripheral products can be effectively marketed to potential
customers. Through repeated exposure, these products can be imprinted in the minds ofconsumers. In collaboration with Kodansha, Brogent was able to display the characters andstoryline of Attack on Titan through its simulator ride devices. Concurrently, the Company
develops fine cultural and creative products, which can be promoted through tourists' word of
mouth after then experienced. Thus, the popularity of these products can be increased, thereby
elevating the total amount of spending per capita.

- 65 -

2.

Relationship between up-, mid-, and down-stream suppliers in theindustry's supply chain
Upstream industry
Midstream industry
Hardware:Integrated hardware
1.Precision machineryand software
industry
technologies
2.Spherical screen
3.Projector
Software:
1.Wireless embedded control
system2.Spherical projector andplayback control system
3.High-definition digitalcontent

Downstream industry
Global theme parks
MuseumExhibition
Shopping mall
Tourist attractions
Urban experience
center

The upstream industries associated with the simulator ride equipment comprisethe hardware section, including precision machinery industry and manufacturers of
spherical screens and projectors, and the software section, including wirelessembedded control system, spherical projector and playback control systems, anddigital contents. The Company designs and integrates various software andhardware technologies according to customer needs, and then sells the products todownstream industries such as theme parks, museums, shopping mall, and urban
experience centers.

3.

Product development trends
Previous theme parks: Mainly equipped with mechanical and simple electronic

facilities such as the Ferris wheel, bumper cars, carousels, and roller coasters.
Generally, in bad weather, these theme parks must cease their operation,
substantially impacting business operations. By comparison, multimedia simulator
ride facilities can be installed indoors free from environmental influences; thus, theusage rate of theme park equipment can be enhanced, increasing the economic
benefits of theme parks. Moreover, simulator ride facilities have become the options
for updating theme parks in European and American countries and for planning andconstructing theme parks in emerging countries. In recent years, under the influenceof mature digital video technologies and Hollywood films, traditional mechanicalamusement facilities are no longer effective for attracting new-generation tourists.
To satisfy tourists' entertainment needs and novelty, new amusement parks havesuccessively incorporated digital video technologies with electromechanicalequipment. Thus, tourists can not only enjoy the excitement of conventional outdoor- 66 -

facilities, but also experience indoor facilities with excellent sound and lighting
effects without being influenced by weather conditions. Furthermore, theCompany's simulator rides that stimulate both sensory experiences and thrilling
sensations, which are in line with the current trend of experience economy.

4.

Product competition
Simulator rides are a type of amusement facilities featuring sound, lighting,and realistic effects that are developed to satisfy the entertainment needs ofconsumers. Consumers are given the options of playing on either mechanicalfacilities (e.g., roller coaster, free fall, and pirate ships) or static activities such as
watching a film. However, the mechanical amusement facilities provide relatively
monotonous entertainment effects, involve high construction cost, pose safetyconcerns, and are limited to certain age groups. In addition, the operation of thesefacilities is easily affected by weather conditions. Watching a film is a type ofleisure static activity, providing only visual entertainment effects and thus failing tosatisfy the needs for sound and light sensory stimulations pursued among theyounger generations. Therefore, such amusement facilities cannot yield satisfactory
entertainment effects or enhance the parks’ benefits. An overview of the current
domestic market reveals that the Company has no competitors involved in similarbusiness operations. Thus, there are no alternative or competing products on themarket.

(3) Overview of Technology and R&D
1.

2.

R&D investments in recent years to the date of the annual report
Year

2014

Unit: NT$1,000
2015

R&D expenses

89,06963,288Successfully developed technologies and products in recent years
Year

2011

R&D Accomplishments
Novel modularized suspension spherical theater based on a vertical
six-axis actuating platform
Ski simulator
Tablet 3D man-machine interface (Android 3.2)
9s series software downloading tool (Android platform)
Commercial electronic games－The Legend of a Golden City

- 67 -

Year

2012

2013

2014

2015

R&D Accomplishments
Novel special drive method
Web-shaped seat design mold
Seat cover design and production
Actuator cantilever turning gate
Suspension two-axis actuator platform stress analysis
Smart TV man-machine interface (Android 2.3)
Tablet 3D man-machine interface (Android 4.0)
9s series software downloading tool (iOS platform)
Smart TV software
Electrical gas six-axis platform design
Suspension two-axis actuator platform design and production
Completely dark ride (d-Ride) design
Balloon Ride design
Media Free Fall Design
Interactive walking theater
Joey's Aquarium (sketch-type aquarium)
Track d-Ride system“Attack on Titan” i-Ride Film
Car Racing simulator ride

Dandelion-shaped simulator ride(4) Business plan - long-term and short-term
1.Short-term development plan
(1) Marketing and product plan
A.Commit to on-going projects because successful performance is the best
marketing tool for a company; strengthen digital content development capacity
to satisfy future market demands for videos.
B.Design and plan highly modularized projects, provide affordable modularized
system, and improve competitive advantage.
C.Simulator ride products are currently in the process of applying for TUV
certification; regulate outsourced vendors' production operation so that the
products meet international standards; and continue to design products
conforming to international environmental regulations to become a benchmark
of green enterprises.
D.Sales channels are relatively closed; considering the ecological layout of local
markets of various regions, the Company will adopt a cooperative model inwhich it forms a strategic alliance with its agents.
E.Participate in international exhibitions (e.g., IAAPA), increase the visibility of
the company's product, and expand the range of regional buyers.

(2) R&D plan
A.Apply the ability to integrate six-axis actuator platform with multimedia
technologies, optimize d-Ride and innovative Media Free Fall Ride to expand
the Company's product line, and satisfy customers' diversified needs.
B.Reinforce knowledge management and integrate existing data, so thattechnological resources can be shared to enhance technological capacities.

(3) Human resources and informatization plan
A. Strengthen training programs and enhance the quality of R&D personnel so- 68 -

that employees can improve as the company develops.
B . Effectively integrate company's internal resources to enhance work
effectiveness.

(4) Financial Plan
A. Use appropriate financial instruments and formulate contract-based sales plan
to avoid risk of currency fluctuations.
B .Strengthen project management and reduce receivables to increase theturnover rate of receivables.

2.Mid- and Long-term development plan
(1)Marketing and product plan
A.T arget the future demand market of Asian regions where
economic growth is high and then advance toward the global
market, thereby becoming internationally recognized primary
supplier of simulator rides.
B.S eize business opportunities in replacing, renewing, or a dding
construction projects in the future European and US markets andjointly work with strategic alliance partners in market expansion.

(2)R&D plan
A. Cooperate with domestic research institutes and academic units toacquire leading technologies.
B.Continue t o develop new technologies and acquire patents.

(3)Human resources and informatization plan
A.Strengthen training to enhance employee skills.
B.Recruit professional managers to improve business performance.
C.Purchase professional collaborative operating software to provide employees
around the world with a joint operating platform.

(4)Financial Plan
A.Use various fund-sourcing channels to create optimal financial structures thatmaximize company value.
B.Issue financial instruments in a timely manner for the company to acquire
minimum capital cost.
C.Properly use financial instruments to reduce currency risks.

II.

Market, production and sales(1)Market analysis- 69 -

1. Product sales region
Year
Sales Region
Domestic Taiwan
sales
Asia
Americas
Exports
EuropeSubtotal
Total

2014
Net revenue%

Unit: NT$1,000
2015
Net revenue%

557,41346.62

79,964

11.33

222,358
2,370
47,370272,098

13.85
5.85
33.68
53.38
829,511222,244
211,568
191,648
625,460
100.00

31.51
27.16
30.00
88.67
705,424

333,559

2. Market Share
An overview of the current domestic market reveals that the Company has nocompetitors; therefore, no information regarding market shares is currently available
for comparison. Regarding simulator rides in new media amusement industries, theCompany is the first to integrate precision machinery, spherical projectors,
audiovisual control, and wireless embedded system and became the company the
independently developed simulator ride technologies. Currently, we have 15 productlines, making us the leader of flight theaters.
Internationally, in addition to Disney in the United States possessing two similar
theaters that are expensive and closed for external investment, Dynamic Structure in
Canada and Huss from Germany both have also introduced simulator rides. However,these two companies adopt motion platform-based hardware technologies and are notequipped with the ability to integrate hardware and software technologies, rendering
them incapable of offering a comprehensive solution regarding simulator rides tobusiness operators. Furthermore, their platform moves merely in a maximum of two
axial directions, yielding poor realistic effects. Therefore, after the Company entered
the simulator ride market, the Company will leverage its advantages (technology andcosts), cooperate with Vekoma Rides Manufacturing BV, and introduce simulator
rides to theme parks and tourist attractions around the world. Thus, tourists
worldwide can perceive the enjoyment generated from riding the simulator rides, andthe Company's business scale can be enhanced.

3. Future market demand and supply and growth potential
The Company implemented the Content–Channel (CC) Strategy in recent years,transforming from being merely a supplier of amusement facilities to an operator ofentertainment businesses. To achieve this goal, the Company recruited strategic
investors over the past year, while adopting diversified management strategies that- 70 -

integrate profit distribution models to replace the model where devices are just soldonce. CitiPark will become the Company's business demonstration site where a profit
distribution business model is adopted. Taiwan's first CitiPark Indoor Experience
Center is expected to commence its operation this summer, at Toufen, Miaoli of
Taiwan, providing Taiwanese citizens with diverse sensory experiences. In addition
to outright selling its equipment, Brogent has also planned a two-floor thematicinteractive exhibit, in the hopes of educating children through fun, thereby bringing
parents and children closer together. In response to the prevalence of online shopping
activities, the convenience of mobile devices, and the fact that people cannot visit
large theme parks in remote areas whenever they desire, the Company has
endeavored to build a CitiPark indoor experience center in the city where transport isconvenient. The goal was to help business operators attract crowds.
In recent years, Taiwanese citizens have placed increased attention on quality oflife, increasing their consumption needs. Thus, how to enable an entire family,
whether old or young, to satisfy their entertainment needs whilst making purchases or
shopping is a topic warranting attention. Nevertheless, CitiPark offers a complete
solution. Located in the busy area of Toufen, Miaoli County and being geographicallyadvantaged, the first CitiPark in Taiwan enables creating Asia's first 5D scenic parkfor citizens living around the Hsinchu Science Park.
Regarding the Company's main product—i-Ride—beginning with its Fly Overthe World project in Taiwan, Brogent is no longer merely a slogan. Within years, it
has exploited its technological advantages with its hardware design integrated withcreative software technologies. Brogent has extended its arm into the global sales
channel with its hardware and software products, acquiring a solid status in themultimedia industry. Regardless of product safety or technological stability, Brogent
has become increasingly mature with the globalization of the sales market, achieving
the industry leader status. After flying across the world, the Company has also beganplanning the locations for the FlyOver project that are most representative of Taiwan;
thus, tourists visiting Taiwan will be given an additional must-see tourist attraction.
Regarding the growth potential of the simulator ride market, according to the
Global Entertainment and Media Outlook: 2012-2016 by PricewaterhouseCoopers,
the total global entertainment spending will increase from US$1600 billion in 2011 to
US$2100 billion in 2016, at a growth rate of 5.7%. Furthermore, Vekoma Rides
Manufacturing BV, a well-known roller coaster manufacturer in Holland with over 40- 71 -

years of history in the theme park market and possessing world-class clients
including Disney and Universal Studio Japan, estimated that there will be over 2000
large theme parks across the world. Moreover, numerous theme parks are in theprocess of construction as the spending power of these countries continues to rise.
The Chinese consulting firm CIConsulting reported that in 2011 - 2015, theChinese theme park market will exceed RMB 10 billion each year, and in the next 25
to 30 years, at least 10 theme parks with a scale similar to that of Disneyland can beconstructed in China. In the past, simulator rides involved high development cost andwere restricted under Disneyland's patents, which made them relatively rare in themeparks. The Company's research team has devoted its efforts to acquiring patents frommany countries, contributing to the Company's development in integrated softwareand hardware technologies and leveraging the advantages in manufacturing costs in
Taiwan. By collaborating with internationally known marketing strategic partners, theCompany has actively negotiated, planned, and constructed simulator rides frommajor theme parks all over the world. In recent years, countries in Europe and the US
have gradually restructured existing large shopping centers, cinemas, and movie
theaters in tourist attraction areas into popular leisure venues to attract visitors.
Because a simulator ride can be customized according to the height restrictions of
their buildings, they can provide consumers with an all-new entertainment experience.
Simulator rides have become the focus of tourism industries in restructuring
amusement facilities in Europe and the US. In summary, the business opportunities
brought by the efforts of emerging countries in building amusement parks and ofEurope and the US in reforming tourism facilities will contribute to the unlimited
growth of simulator rides in the future.

4. Competitive Niches
A. Globally Recognized Technology
The Company's management teams are relatively experienced in the industrial
sector, making them capable of launching new products to customers at the right timeand rapidly responding to customer demand. Currently, we have more than 15
products types in the market. In addition, our service quality is trusted by our clients,
and the quality of our products is ensured during the software development process(including the design, implementation, and testing stages). Thus through enrichedproject management experiences, the Company offers customers excellent quality
software services, contributing to the value of our software products.

- 72 -

In contrast to Disney's simulator rides, which feature a two-axis arm lift
platform with two motion directions (leftward, rightward, upward, and downward),
the Company's products adopt a six motion direction side-standing suspended
six-axis platform. Our platform not only enables riders to fully experience realismand enjoyment but also facilitates saving space in the theater. Thus, business benefits
could be maximized by adequately utilizing the space in the theaters. The Company
has applied for patents from Taiwan, China, the United States, and the European
Union for the side-standing suspension framework of the six-axis platform to protect
our technology and increase the threshold for other vendors to enter the market.
The number of pantents owned by the company is listed as below:
EuropeChina

TaiwanU.S.A.

Korea

Total

10

7

6

3

1

27

B. Premium Brand Equity
Theme parks, museums, and exhibition centers are generally a closed market.
The Company combines the marketing channels of internationally well-known theme
park facility suppliers, enabling the successful transition into the theme park supply
chain. This transition will be advantageous for expansion into the global market.
Furthermore, the Company possesses excellent professional technological know-how
and development experience; its products are strongly recognized by international
clients. From 2008 to 2015, product sales distribution has gradually extended into
international communities; Brogent’s products can be seen as follows:- 73 -

In 2015, the Company received many orders from the domestic market, andexpansion into the overseas market has also been a success. Our future businessdevelopment will continue to involve market internationalization to expand ourmarketing scope of the global market, thereby improving the overall revenue
performance.
C. Product modularization lowers cost and increases competitiveness
Simulator ride facilities involve a wide range of technical aspects, covering
hardware systems (suspension, spherical screen with audiovisual systems) andsoftware technologies (projector, playback, wireless embedded control, andhigh-definition digital content). Therefore, the technical teams of the Company
performed high modularization engineering analysis and planning of large complex
system frameworks based on the existing six-axis platform technologies. In addition,
our design, production, transportation, and assembly processes are all designed andmodularized in accordance with international standard regulations. Suchmodularization enables saving large amount of construction time and manpower,
which considerably lowers construction cost and raises the Company's
competitiveness.
D. Collaboration with international strategic partners in digital content

development
The Company holds a solid foundation for software technology development.
In addition to developing our own software applications (apps) and helping large
brand vendors develop mobile device software, the Company also supports thesoftware technology development required for simulator rides. In 2013, the flighttheater i-Ride received the attention of Kodansha. Through the assistance of theInstitute for Information Industry Taiwan - Japan Industry Promotion Center, theCompany signed the first memorandum of understanding (MOU) with Kodansha in
October 2013. Thereafter, frequent business meetings were held with the Japanesecompany, with the hope of integrating Brogent's product technologies with
Kodansha's manga series to launch a highly entertaining amusement facility. The
manga of choice in this cooperation was the popular Attack on Titan. With
Kodansha's support, Brogent officially received authorization for the manga series
Attack on Titan, and began producing related films for the i-Ride facility.
In 2015, both parties once again signed an MOU with the premise of- 74 -

expanding their scope of cooperation to including all of Brogent's simulator ride
products. Thus, Kodansha's numerous, popular works can now be displayed throughBrogent's simulator rides and technologies, enabling passengers to immersethemselves in the story. Concurrently, the Company collaborates with suppliers ofperipheral products; sales channels for these products will be established while
theme-based entertainment activities are launched to allow passengers to receive
satisfactory services and products. Consequently, a new sales platform will becreated, elevating the value of cultural and creative products.

5. Competitive Edge, Favorable and Adverse Factors forLong-term Growth and Response Strategy(1) Favorable factors
A. Needs of emerging countries and reconstruction business opportunities in
Europe and the US
As the economy of emerging countries develop, these countries have graduallyfocused on the construction and development of leisure entertainment industries,
specifically large theme parks, the existence of which can not only create domestic
demand and employment opportunities, but also promote urban tourism
development. Low income level in emerging countries render the entrance fees totheme parks in these countries incomparable to those in developed countries (e.g.,
European countries, North America, and Japan). To effectively increase theeconomic benefits of amusement parks, governments of emerging countries strictly
regulated the benefits generated by amusement facilities. In addition, becauseindoor amusement facilities allow customers to still enjoy themselves during bad
weather, and because of the rapid development of digital audiovisual technologies
in recent years, traditional mechanical amusement facilities are no longer effective
for attracting the attention of new-generation tourists. Therefore, when planning andconstructing theme parks, emerging countries typically prioritized their focus onindoor amusement facilities that feature 3D sound and lighting effects and stimulatea sense of excitement in users. To reconstruct their tourism industries and boost
their economy, European countries and the US have successively initiated tourist
attraction reform projects, building leisure facilities by restricting existing buildings
and movie theaters. These leisure facilities are based on a composite business modelcomprising department stores and hotels to attract visitors. Because simulator rides
are built according to the height restrictions of existing buildings to provide
consumers with an all-new entertainment experience, this type of facility became
the primary focus of Europe and the US in reconstructing amusement facilities.
- 75 -

B. Construction and formation of industry supply chain
Before the Company entered the simulator ride market, there were no vendors
investing in similar products in Taiwan. Since undertaking the FlyOver Taiwan
project for E-DA Theme Park, the Company has adequately leveraged Taiwan'
strong R&D and production capabilities of information hardware and precision
machinery industries. With the efforts devoted by the Company's R&D personnel
and domestic vendors, Taiwan has become one of the few countries worldwide
capable of constructing simulator ride bases. Not only were the production costs ofamusement facilities lowered, but the quality of these facilities reached international
standard. Subsequently, a complete and tight supply chain in the simulator rideindustry was established. Because simulator rides are completely customized
according to customer needs, the Company's supply chain system enable the design,
motion control, or digital content of such rides to be adjusted whenever required
depending on customer needs. Thus, customer demand can be satisfied, thereby
increasing the overall competitiveness of the Company.
C. Establishing word of mouth facilitates business promotion
Distinct from general consumer electronic products, simulator rides featurelong life cycle, high degree of customization, high technical threshold, and highcost; therefore, customer repurchase and loyalty increased after establishing theword of mouth for the technology and quality of this product. Since completing the
FlyOver Taiwan and FlyOver Canada projects, the Company has accumulated
considerable experience, word of mouth, and popularity in the simulator ride market.
In addition, by forming strategic alliance with internationally well-known
amusement facility suppliers, the Company will acquire more competitive
advantage in business expansion.
D. Supported by strong technology
Since its inception in 2001, the Company has endeavored to develop
audiovisual multimedia technologies, accumulating considerable experiences intechnological development. Thus, the Company has established partnership withmultiple international mobile phone factories, and received Small Business
Innovation Research (SBIR) subsidies from the Ministry of Economic Affairs(MOEA) multiple times. In 2007, the Company was honored with the award of
excellence in SBIR from the Department of Industrial Technology, MOEA.
Regarding simulator ride facilities, the Company has received recognition for its- 76 -

technological capability since the successful implementation of the FlyOver Taiwan
and FlyOver Canada projects. For example, the unique fish eye lens designed by theCompany can achieve the projection effects of a spherical screen simply by
installing them with a projector. Thus, the cost and space required for projector
installation are substantially reduced, and the stability and image quality of the
projector system are considerably enhanced. The Company's self-developed
automated control technology can integrate motion platforms with video systems
with increased precision. This way, riders can perceive the flow experience ofrealism. Furthermore, the Company also possesses the capacity to develop digitalcontent, and customize it according to customer needs, thereby providing multiple
choices to our customers. Therefore, the Company enhances the technologicalcapacity of its research team, and therefore has substantial room for improvement.
(2) Unfavorable factors and their response strategies
A. Closed sales channel for simulator rides, impeding business expansion
Simulator rides are primarily built in theme parks, museums, and exhibition
halls. Unlike general daily necessities, the sales channel of simulator rides isrelatively closed, and suppliers specializing in this market are mostly business
operators who have established their status for a long time. Thus, new vendors
cannot easily directly enter this supply chain system and expand their businesses.
Response strategies:
The Company fully understands the characteristics of this industry. To expand
its market and increase its market share, the Company formed a strategic alliancewith internationally known suppliers of amusement facilities who have had ahistory of more than 40 years in the industry. These suppliers assist the Company inexpanding its market channel to successfully enter the supply chain of the theme
park industry and facilitate its expansion into the global market. In addition, theCompany adopts "experiencing in an urban setting" as a strategy to actively develop
miniature simulator rides and compete in the market.
B. Shortage of professional talent, hindering talent recruitment
Because information electronic related industries remain the dominant of thedomestic market, and domestic vendors have already established a complete supply
chain in the information hardware industry, general graduates still prefer to enter
industries relevant to information electronics. Furthermore, domestic universities
and colleges have established faculty departments associated with software design- 77 -

or amusement facilities in recent years. However, talent still require additional
training, and simulator ride technologies encompass a wide variety of aspects, thus
making R&D talent recruitment and cultivation difficult.
Response measures:
Engage in industry-academia cooperation to cultivate high-quality experts ofdigital content development and foster technological talent that industries require;provide employees with favorable working environment, perfect employee welfare
systems, and formulate reward/punishment systems as well as employee training
programs; and establish job positions according to employees’ expertise andcharacteristics and provide employees with the opportunity to become a shareholderof the Company so that they could share business outcomes with the Company,
thereby cohering their efforts and reducing turnover rate.
C. Raw material price and supply stability
The hardware system of the Company's simulator rides comprises thefollowing: The raw materials of carriers, six-axis platform, and steel structures aremostly steel and iron. The prices of these raw materials may vary according tomarket supply and demand, causing price fluctuations, thereby influencing theCompany's purchasing cost and profitability.
Response strategies:
In addition to having maintained a positive and long-term cooperative
relationship with its suppliers, the Company appropriately adjusts its sources ofprocurement and disperses different purchasing vendors to seek the most optimal
price quotation. Thus, over-concentration in purchasing, thereby increasing
operating risks can be avoided.

- 78 -

(2) Major product usage and manufacturing processes
1. Main purposes
Theme park, museum, exhibition hall, shopping center, andindoor experience center afford entertainment and educational
functions, provide adventurous experiences, and elic it sense of
excitement.

2.

Manufacturing process
A. Digital content:

Customer demand

Product/planning/R&D proposal
requirement

Conducted briefings
to elucidate thestory and plot

Passed project proposal and initiated project
implementation

Compiled story content

Produced art works

Conducted integration, troubleshooting, testing, andmodification

Completed digital content- 79 -Developed programs

B. Simulator rides:

Customer demand(simulator rides)

Convened productproject meeting andapproved forexecution

Hardwaretechnologies

Motionplatform system

Softwaretechnologies

Verticalspherical screen
systemSpherical
projector andplayback control
systemWireless
embedded control
systemConducted integration, troubleshooting, testing, and modification of pilot
machines

Test machine operation and product delivery- 80 -

High-definition
digital content

3. State of supply of chief raw materials
Primary spare parts

Supply condition

1.Stewart six-axis platform

Good, stable

2.Structure of ride carriers

Good, stable

3.Spherical screen

Good, stable

4.Servo valve, motor

Good, stable

5.Projector

Good, stable

6.Acoustic equipment

Good, stable

7.Digital content contractor

Good, stable

The Company develops its own mobile device software instead of outsourcing it.
The hardware and software systems of the simulator rides are designed anddeveloped by the Company. Regarding the mechanical hardware parts, the Company
cooperates with its vendor and commissions contractors for assistance. The Company
and its suppliers have a stable cooperative relationship, facilitating the stable material
supply. Therefore, there were no incidences of supply interruption.
4. Major buying and selling vendors/customer information(1) Names of customers who accounted for more than 10% of the sales in the last two
years, sales as a percentage of total sales, and reasons of change
Unit: NT$1,000
2014
Item

2015

Percentage of Relationship
Name

AmountPercentage of RelationshipName

net sales (%)

with issuer

Amountnet sales (%)

with issuer

1

BB2005547,802

66.04

None.

BB200555,743

7.90

None.

2

BB3013

115,787

13.96

None.

BB3013

-

-

None.

3

BB301486,786

10.46

None.

BB3014

5,292

0.75

None.

4

BB3015

14,341

1.73

None.

BB3015

115,259

16.34

None.

5

-

-

-

-

BB3017

210,975

29.91

None.

6

-

-

-

-

BB301897,010

13.75

None.

7

-

-

-

-

BB301974,976

10.63

None.

8

-

-

-

-

BB302080,572

11.42

None.

Others64,795

7.81

None

Others65,597

9.30

None.

Total

829,511100.00Total

705,424100.009- 81 -

Reasons for changes:
The Company's chief products are simulator rides. Because simulator ride
projects involve high costs, the sales target in the most recent two years iscustomers who purchase simulator rides. In 2015, the Company successfully
extended its reach into the overseas market and Taiwan's market. BB3017,
BB3018, BB3019 and BB3020 are

new buyers of the Company's simulator rides,

and projects accepted in 2013 were commissioned by BB3015 customer. The mostconstruction was undergone in 2014. In 2015, simulator ride projects werecompleted, and revenues were received according to the proportion of job
completion. BB3015 client client became our second biggest client.
To increase its market share in the global market, the Company continues towork with international vendors and Taiwanese vendors, actively vie for theircooperation, and devoted to seeking new client base to disperse sources ofcustomer order and maintain robust growth.

(2) Names vendors who accounted for more than 10% of the purchases in the last
two years, purchases as a percentage of total purchase, and reasons of change
Unit: NT$1,000
2014

2015

Percentage

Percentage
Relationshi

Itemof totalName

Amountp withNameof total

Relationshippurchasewith issuer

Amountpurchase
issuer
(%)(%)

1

AA0251

3,670

1.14

None.

AA025160,53113.41

2AA009245,921

14.29

None.

AA0092

48,123

10.66

None.
RelatedParty.

3

AA011647,841

14.89

None.

-

-

-

-

4

AA003336,531

11.37

None.

AA003336,385

8.06

None.

5

Others187,377

58.31

None.

Others306,394

67.87

None.

Total

321,340

100.00

Total

451,433

100.00Reasons for changes:
To develop simulator rides, the Company adequately uses the technicalstrength, flexibility, and willingness of small and medium enterprises to cooperate.
In addition, the Company plans, designs, and collects the various technical andproduction information of international companies, commissioning contractors to- 82 -

manufacture our products. Furthermore, the Company cooperates with small andmedium enterprises to construct the supply chain system of simulator ride facilities.
The Company primarily procures six-axis platform, ride carriers, spherical screens,
servo valve, and projector and acoustic equipment. Except for when customers
designate their preferred suppliers, the Company's suppliers are selected according
to their quality, stability, delivery date, and price.
AA0251 is the subcontractor of the car and ride shape design as well as renovation
construction for our Taiwanese client, with our total purchase of NT$60,531,000,
becoming the first biggest supplier of the Company.AA0116 is the Company's firstlargest supplier of Holland D-ride self-riding cars from whom it made a totalpurchase of NT$47,841,000 in 2014. The project was completed in 2014. Hence,
the Company made no purchase to the supplier in 2015. AA0092 is the Company's
second largest cooperating supplier who possesses strong manufacturing
technologies and system integration capabilities. Therefore, since 2011, theCompany commissions AA0092 to manufacture i-Ride actuator platforms andpurchased actuator platforms from AA0092 . In 2015, the Company set up a
subsidiary company, Brogent Machanical Inc., with AA0092, which has become arelative party to the Company since 2015. AA0033 the Company's third largest
supplier of steel structures and push carriers from whom it made a total purchaseof NT$36,385,000 in 2015, who became the third largest supplier in 2015. Overall,the changes in the primary suppliers of the Company in the past two years werebased on the project scale and job completion progression. There were no major
abnormalities.
5. Output volume and value during the most recent two years
The Company's primary business involved the R&D and sales of simulator rides.
Since 2008 when the Company started the development and selling of simulator ridefacilities, these facilities, including their hardware and software systems andautomated control system, were designed and developed by the Company. The
mechanical body engineering part was commissioned to external contractors, and theCompany purchases the final product from the supplier and therefore is not a
manufacturing industry. Thus, the Company is not associated with output volume andvalue.

- 83 -

6. Sales volume and value during most recent two years
Unit: NT$1,000
2014

Year
Sales volume and value

Domestic sales

Primary products

Quantity

Exports

Value

Mobile device software-

Simulator rides

2015

Quantity

7-

Domestic sales

Value

Quantity

Exports

Value

Value

Quantity

2,370

-

-

-

592

- 547,802- 264,284-

55,743-

619,794

Others (Note)

-

-

5,444

-

27,544

-

1,751

Total

- 557,413- 272,098-

83,287-622,137

9,604

Note: Others refer to repair and maintenance and income generated sales (gaming machines) and laboraffairs

Reasons for changes:
From 2014 to 2015, the sales amount of mobile device software declined,primarily because of the Company's adjustment to its sales strategy (reduced thenumber of customized software projects accepted) in 2013. Regarding the simulatorride, the internal and external sales amount decreased in 2015 compared with 2014;
this is primarily attributed to the successive orders received from the domestic market
in 2014, from domestic client BB2005; the major construction was mostly completed
in 2014 with revenue recognition. Therefore, the total amount of domestic sales
decreased in 2015 with less revenue booked.

III. Employee Information in the Past 2 Years to the Date of theAnnual ReportYear

End of 2014

End of 2015

Up toApril 11, 2016

Managerial officer

21

26

26

R&D personnel

74

116

109

General employee

53

50

51

Total

148

192

186

Average age

35.26

34.07

34.95

Average years of service (year)

3.83

3.10

3.06

Number of
employees

Ph.D

0.68

0.54

0.54

Master's

42.28

43.22

47.31

Education

University/College

57.04

55.7

51.08

distribution (%)

Senior high school

0

0.54

1.07

Senior high schooland below000- 84 -

IV. Environmental protection expenditure information(1) The Company primarily engages digital content development and selling of simulator
rides, the production of which is entirely outsourced to external contractors.
Therefore, the Company is not associated with pollution concerns.
1. According to laws and regulations if it is required to apply for a permit for installing
anti-pollution facilities, or permit of pollution drainage, or to pay anti-pollution fees,or to organize and set up an exclusively responsible unit/office for environmental
issues, the description of the status of such applications, payment or establishment
shall be made: Not applicable.
2. Setting forth the company's investment in the major anti-pollution facilities, the use
purpose of such facilities and the possible effects to be produced: None.
3. Describe the process undertaken by the company on environmental pollution
improvement for the most recent 2 fiscal years and up to the publishing date of theannual report. If there had been any pollution dispute, its handling process shall also
be described: None.
4. Describe the loss (including damage compensations paid) suffered by the company
due to environmental pollution incidents occurred in the most recent 2 fiscal years andup to the annual report publishing date, the total penalty/fine amount, as well as
disclosing its future preventive policies (including improvement measures) andpossible expenses to be incurred (including possible loss if no preventive measures aretaken, and the penalties and estimated damage compensation amount; if reasonableestimation cannot be made, explanation on the facts why it cannot be made shall be
stated): None.
5. Explain the current condition of pollution and the impact of its improvement to the
profits, competitive position and capital expenditures of the company, as well as the
projected major environment-related capital expenses to be made for the coming 2
fiscal years: None.
(2) The 2nd stage of R&D and experience center was completed in Febuary 2016 andawared the green building certificate (Certification No. on 105.01.08
CGB-BC-01-00409). The related green power arrangement is explained asfollowings:- 85 -

1.Installation of solar power
2. Installation of central air-conditioning control system
3. Installation of all heat exchangers
4. Build up rain storage and recycle irrigation systems
5.Use LED lightening system
6.Set up indoor air quality supervisory system

V. Labor Relations
1. Set forth all employee benefits, continuing education, training, retirement systems,
and the status of their implementation, as well as the status of agreements between laborand management, and all measures aimed at preserving the rights and interests of
employees:(1) Employee welfare measures and implementation status
The Company offers the following welfare to its employees: labor and healthinsurance, employee group insurance, employee health examination, year-end bonus,
and employee stock option bonus. In addition, the Company has also set up an
Employee Welfare Committee that handles employees' various welfare affairs,
including employee marriage, funeral, sick leave, and maternal leave subsidies,annual employee travel benefit, three-festival bonuses (Dragon Boat Festival, Moon
Festival, and Chinese New Year), birthday bonus, and year-end new year banquet.
(2) Employee continuing education, training, and status of their implementation
To enhance employee quality and their work efficiency and quality, theCompany requires all its new recruits to receive immediate training and guidance on
their job content. During their period of employment, employees must regularly
undergo professional training, both internal and external, on employee job duties.
Internal training courses entail exchanging internal professional technologies andimproving employee productivity; external courses depend on company requirements.
Employees may be dispatched to attend external seminars and courses. Thus, theCompany's employees are provided with opportunities to receive professional- 86 -

training. Actual training attendance is registered and managed with the hope of
fostering professional talent and effectively nurture and utilize talent.
(3) Employee pension system and status of implementation
The Company regulates employee pension system according to the Labor
Standard Act, formulates Employee Retirement Regulation, and establishes laborpension account with the Central Trust of China to which a labor pension reserve
equivalent to 2% of employees' monthly salary is contributed.

As of July 1, 2005,

when the new labor pension system was implemented by the government, theCompany asks its employees whether they wish to adopt the new or old laborpension systems. Employees who prefer the new pension system shall have 6% of
their monthly salary contributed to their personal pension account and shall retain
their seniority status as required by the Labor Standard Act, to ensure their living
needs after they retire. No employees have retired since the Company's
establishment.
(4) Labor negotiations
The Company is subject to the Labor Standard Act, operating its business inaccordance with the Labor Standard Act. Generally, the Company emphasizes theimportance of employee welfares and communication with its employees; therefore,
it has maintained a harmonious relation with its employees. In addition, to maintainpositive labor relation, the Company attaches increased importance on employee
opinions, which can be communicated by the employees via email. Since its
establishment, the Company has not been involved in labor disputes. However, theCompany will still strengthen its labor communication protocols and endeavor toformulate effective welfare measures for its employees so that a more harmonious
labor relationship can be sustained to prevent any possibilities of labor disputes fromoccurring.
(5) Measures for protecting employee rights and interests
The Company has a complete document management system that specifies
various management regulations, employee rights and obligations and their welfares,
to protect employee rights and interests.
(6) Preventive measures taken to ensure a safe working environment and maintainemployees' personal safety:
The Company hires designated personnel to plant flowers and trees in- 87 -

vacant spaces surrounding the Company. By applying the practice of landscapegreening, the Company creates a comfortable, safe working environment and plans
an effective parking space. The Company constructs a safe, healthy working
environment and regularly provides employee health examination to maintainemployee physical and mental health. In addition, a Labor Safety and HealthCommittee is established to engage in promotion efforts for environmental protection
and labor safety and health. The Company also offers employee safety and healthtraining programs to help employees enhance their health and safety related
knowledge and skills.
2. Describe the loss suffered by the company due to labor disputes occurring in the mostrecent 2 fiscal years and up to the annual report publishing date, and disclose theestimated amount expected to be incurred for the present and future as well as thepreventive measures:
The Company maintains a harmonious relationship with its employees. There
were no losses incurred from incidences of labor disputes during the most recent 2
years up to the publishing date of the annual report. The Company upholds theprinciple of maintaining a reciprocal relationship and sharing profits with its
employees. There is minimum likelihood of losses due to labor disputes occurring in
the future.

VI. Important contracts
Nature ofRestriction
Contracting parties

Date of contract start and end

Content

contract

clauses
Canadian Company
2011.08~2013.12

Simulator rides

None.

BB3005
Taiwanese Company

Video renting and special
2013.03.01~2014.02.28

BB3002None.
effects

2013.10~May terminate theTaiwanese Company
contract according to

Simulator rides

None.

Simulator rides

None.

Simulator rides

None.

Sale contract BB2005
agreement2013.12.~May terminate theChinese Company
contract according toBB3014agreement
Japanese Company
BB30132013.11~May terminate thecontract according to- 88 -

agreement
2013.02~May terminate thecontract according to

None.

Simulator rides

None.

Simulator rides

None.

Simulator rides

None.

Simulator rides

None.

Simulator rides

None.

Simulator rides

None.

agreement

Dutch Company
BB3012

Simulator rides (4D)2013.02~May terminate thecontract according toagreement
2014.12~May terminate theChinese Company
contract according toBB3015agreement2015.02~May terminate the
US Company
contract according toBB3017agreement2015.03~May terminate theArabian Company
contract according toBB3018agreement2015.07~May terminate theSpain Company
contract according toBB3019agreement2015.10~May terminate theGerman Company
contract according toBB3020agreement
2009.01.06~No period (Mayterminate when either party
fails

to

executeits

Sales Agency Vekoma Rides
responsibilities or when both Sales agency

None.

Agreement Manufacturing B.V.
parties

providea written

notification 6 months prior tocontract termination)
Land Rental Export Processing Zone

Renting of Kaohsiung2012.3.14 - 2032.3.13

Agreement Administration, MOEA

None.
Software Park Land2014.07~May terminate the
Xu-Yi Construction Co.
Construction Phase 2 Construction ofcontract according to

None.
Ltd.

Project

the R&D Testing andContract

Experience Center

agreement
2014.07~May terminate the Li-Yao MechanoelectricalNone.
contract according to- 89 -

Technology Co. Ltd.

agreement
Loan

Long-term collateral-based
Taiwan Cooperative Bank

2013.02.06 - 2027.08.10

AgreementNone.
loan application- 90 -

VI. Financial Overview
1. Condensed balance sheets and statement of income (2011 - 2015)(1) Condensed balance sheets
1. Condensed balance sheets- International Financial ReportingStandards (IFRS)- Consolidated
Unit: NT$1,000Year

Financial information: FY2011 - FY2015(Note 1)

Item

2011

Current assets
Property, plant andequipment
Intangible assets
Other assets
Total Assets
Basic
Current
liabilities
DilutedNon-current liabilities
Basic
Total liabilities
DilutedEquity attributable toowners of parent
Share capital
Capital reserve
Basic
Retainedearnings
Diluted
Other interests
Treasury stock
Non-controllinginterests
Total
Basic
shareholders' Diluted
equity

2012

2013

2014

As of
March 31,2016
2015
(Note 3)
2,341,930 2,271,164

-

-

-

-

-

-

-

-

557,047

800,167

-

-

-

-

13,987
235,074
3,148,038
566,592(Note 2)
88,140654,732(Note 2)

166,10258735
3,296,168
509,744(Note 2)
125,642635,386(Note 2)

-

-

-

-

2,444,938

2,613,977

-

-

-

-

-

446,780
2,043,087
220,459(Note 2)684
266,072
48,368446,780
2,052,653
229,945(Note 2)
75
115,476
46,805----2,493,306(Note 2)2,660,782(Note 2)

Note 1: Starting from 2015, the Company has consolidated financial reports.
Note 2: The 2015 proposal of surplus distribution has not been resolved in the shareholders'meeting.
Note 3: The year to date March 31. 2016 financial results has been reviewed by a CPA.

- 91 -

2. Condensed balance sheets- International Financial Reporting Standards(IFRS)- Individual
Unit: NT$1,000Year

Financial information: FY2011 - FY2015(Note 1)

Item

2011

Current assets
Property, plant andequipment
Intangible assets
Other assets
Total Assets
Basic
Current
liabilities
DilutedNon-current liabilities
Basic
Total liabilities
DilutedEquity attributable toowners of parent
Share capital
Capital reserve
Basic
Retainedearnings
Diluted
Other interests
Treasury stock
Non-controllinginterests
Total
Basic
shareholders'
DilutedequityAs ofMarch 31,2016
2015
(Note 3)
1,967,995
551,001

2012

2013

2014

-

374,091

717,863

1,046,900-

159,704

161,607

310,698-

2,952
44,238580,985
137,936
163,391
6,586
144,522
169,977

3,284
105,798
988,552
192,503
192,503329,297
521,800
521,800

6,086
53,163
1,416,847
208,712
288,072
180,165
388,877
468,237

13,934
594,044
3,126,974
593,896(Note 2)
88,140682,036(Note 2)-436,463466,752

1,027,970

2,444,938-

254,550
134,356
47,557
22,102-

267,277
188,618
3,434
3,434
-

341,294
459,496
227,180
147,820-446,780
2,043,087
220,459(Note 2)684
266,072

-

-

-

-

-

-

436,463466,752

1,027,970-

411,008

466,752

948,6102,444,938(Note 2)-

Note 1: The 2012, 2013, 2014 and 2015 Financial Reports of the Company have been reviewed by a CPA.
Note 2: The 2015 proposal of surplus distribution has not been resolved in the shareholders' meeting.
Note 3: The company does not have individual financial report as of March 31, 2016.

- 92 -

3. Condensed balance sheets- Taiwan financial reporting standards
Year
Item
Current assets
Funds and long-term
investments
Fixed assets
Intangible assets
Other assets
Total Assets
Basic
Current
liabilities
DilutedLong-term liabilities
Other liabilities
Basic
Total
liabilities
DilutedShare capital
Capital reserve
Basic
Retainedearnings
DilutedUnrealized gain/loss
on financial
instrument
Cumulativetranslation
adjustments
Net losses notrecognized as pension
costs
Total
Basic
shareholders' Diluted
equityUnit: NT$1,000
Financial information: FY2011 - FY2015 (Note)
2011

2012

241,961

380,801-

22,5001,221
1,046
28,316
272,544
41,31841,3183,378
1,334
46,123
46,123
226,260
826
826

2013

2014

-

-

158,889991
18,795581,976
136,693
162,148
2,252
2,553
140,988
166,443
254,550
134,356
52,91427,459

-

-

-

-

-

-

-

-

-

-

(665)

(832)

-

-

226,421440,988

226,421415,533--

No te: The 20 11 - 2 015 fi nanci al rep ort s h ave b een certi fied b y th e CPA.

- 93 -

2015

(2) Condensed statements of income
1. Condensed statements of income- International Financial ReportingStandards (IFRS)-Consolidated (Note 1)
Unit: NT$1,000
Year

-

-

-

-

As of
March 31,2016
2015
(Note 3)
705,424
167,275
333,961
75,136----130,412

6,372

-

-

-

-

21,8151,650

152,227

8,022

Financial information: FY2011 - FY2015 (Note 2)

Item

2011

Sales revenue
Gross profit
Operating income(loss)
Non-operating
income and expense
Net income (loss)
before tax
Continuing
operations
Net income
Profit and loss of
discontinuing
operations
Net income (loss)
Other comprehensive
income(net income)
Total comprehensive
incomeNet income belongs to
the parent company
Net income belongs to
non-controllinginterests
Total comprehensive
income belongs to theparent company
Total comprehensive
income belongs to thenon-controllinginterests
Earnings per share

2012

2013

2014

-

-

-

-

119,769

7,923

-

-

-

-

-

-

-

-

-

-

119,769

7,923

-

-

-

-

619

(609)

-

-

-

-

120,388

7,314

-

-

-

-

112,384

9,486

-

-

-

-

7,385

(1,563)

-

-

-

-

113,003

8,877

-

-

-

-

7,385

(1,563)

-

-

-

-

2.57

0.22

Note 1: Starting from 2015, the Company has consolidated financial reports..
Note 2: The 2015 consolidate financial results has been verified by a CPA.
Note 3: The year to date March 31. 2016 financial results has been reviewed by a CPA.

- 94 -

2. Condensed statements of income- International Financial ReportingStandards (IFRS)-Individual
Unit: NT$1,000
Year

2012

2013

2014

-

285,896
156,071

333,559
140,655

829,511
426,915-

61,1752,134

231,250

As ofMarch 31,2016
2015
(Note 2)
690,617304,396
110,586

-

1,505

2,863

38,49230,73062,6804,997

269,742

141,316-

51,870(5,982)

224,432

112,384

-

-

-

-

-

-

-

51,870(5,982)

224,432

112,384

-

-

(575)

41

(686)

619

-

-

51,295(5,941)

223,746

113,003--

51,295(5,941)

223,746

112,384

-

-

-

-

-

-

-

-

51,295(5,941)

223,746

113,003

-

-

-

-

-

-

-

Financial information: FY2011 - FY2015 (Note 1)

Item
Sales revenue
Gross profit
Operating income(loss)
Non-operating
income and expense
Net income (loss)
before tax
Continuing
operations
Net income
Profit and loss of
discontinuing
operations
Net income (loss)
Other comprehensive
income(net income)
Total comprehensive
incomeNet income belongs to
the parent company
Net income belongs to
non-controllinginterests
Total comprehensive
income belongs to theparent company
Total comprehensive
income belongs to thenon-controllinginterests
Earnings per share

2011

-

2.18

(0.22)

6.83

2.57

Note 1: The 2012, 2013, 2014 and 2015 Financial Reports of the Company have been reviewed by a CPA
Note 2: The company does not have individual financial report as of March 31, 2016.

- 95 ---

3. Condensed statements of income- Taiwan financial reporting standards
Unit: NT$1,000Year
Financial information: FY2011 - FY2015 (Note)
Item
Sales revenue
Gross profit
Operating income (loss)
Non-operating income andgain
Non-operating expense andloss
Before-tax profit and lossof continuing operations
department
Profit and loss ofcontinuing operations
department
Profit and loss of
discontinuing operations
department
Extraordinary profit andloss
Cumulative impact ofchange in accounting
principle number
Net income (loss) for thecurrent period
Earnings per share

2011

2012

2013

2014

168,810
107,31031,957285,896
156,701
61,393--

14,386

4,658

-

-

1,261

3,153

-

-

45,08262,898--36,71352,088

-

-

-

-

-

-

-

-

-

-

-

-

-

-

36,71352,088

-

-

1.74

2.29

-

-

Note: The 2011 - 2015 financial reports have been certified by the CPA.
Earnings per share are after tax.
2-1. Names of auditors and audit opinions
Year

Name of accounting firm

2011

BDO Taiwan

2012

BDO Taiwan

2013

Grant Thornton Taiwan

2014

Grant Thornton Taiwan

2015

Grant Thornton Taiwan- 96 -CPA
Yi-Shun Chang,
Tsu-Cheng
Huang, CPA
Yi-Shun Chang,
Tsu-Cheng
Huang, CPA
Yi-Shun Chang,
Yu-Chieh Lo
Yi-Shun Chang,
Yu-Chieh Lo
Yi-Shun Chang,
Yu-Chieh Lo

Audit opinion
Unqualified opinion

Unqualified opinion
Unqualified opinion
Unqualified opinion
Unqualified opinion2015

2. Financial Analysis(1) Financial analysis (2011 - 2015)
1. Financial Analysis - International Financial Reporting Standards(IFRSs)-Consolidated (Note 1)
As ofMarch 31,20162015 (Note 3)

Financial analysis (2011 - 2015) (Note2)

Year (Note 1)
Item (Note 3)

2011

2012

2013

2014

Debt-to-assets ratio
Financial
structure (%) Long-term fund to property,
plant and equipment (fixed
assets) ratio

-

-

-

-

20.80

19.28

-

-

-

-

463.42348.23Current ratio

-

-

-

-

413.34445.55

Solvency
Quick ratio
(%)

-

-

-

-

361.30390.76

Times interest earned

-

-

-

-

Receivables turnover ratio(times)Average days of collection

-

-

-

-

4.05

0.55

-

-

-

-

90.12

165.16

-

-

-

-

-

-

-

-

-

-

-

-

-

-

1.36

0.25

-

-

-

-

0.23

0.05

-

-

-

-

3.89
4.82

0.26
0.31

-

-

-

-

34.07

1.8

-

-

-

-

16.98
2.57
(52.84)

4.74
0.22
12.8

Cash flow adequacy ratio
(%)

-

-

-

-

24.42

(27.18)Cash reinvestment ratio (%)

-

-

-

-

(14.91)

2.53

Operating leverage

-

-

-

-

1.27

4.49

Financial leverage

-

-

-

-

1.00

1.12

Inventory turnover ratio(times) (Note 2)
Payables turnover ratio
Operating (times)
ability
Average days of sales
Property, plant andequipment (fixed assets)turnover ratio (times)
Total assets turnover ratio(times)Return on assets (%)
Return on equity (%)
Paid-in capital to income
Profitability
before tax (%) (Note 8)
Net profit margin (%)
Earnings per share (NT$)
Cash flow ratio (%)
Cash flows

Leverage

Note 1: Starting from 2015, the Company has consolidated financial reports..
Note 2: The 2015 consolidate financial results has been verified by a CPA.
Note 3: The year to date March 31. 2016 financial results has been reviewed by a CPA.

- 97 -

31,358.11 1,271.09

-

3.74

-

1.59
-

2. Financial Analysis - International Financial Reporting Standards(IFRSs)-Individual (Note 1)

2012

2013

2014

As of
March 31,20162015 (Note 3)

Financial analysis (2011 - 2015)

Year (Note 1)
Item (Note 3)2011

Debt-to-assets ratio
Financial
structure (%) Long-term fund to property,
plant and equipment (fixed
assets) ratio

-

24.88

52.78

27.45

21.81

-

-

274.00492.58386.42459.72-Current ratio-

271.21372.91501.60331.37-

Solvency
Quick ratio(%)-

197.13342.50445.08280.17-

Times interest earned-

514.77

1.96

85.32

29,117.66-

Receivables turnover ratio(times)Average days of collection

-

16.84

4.08

5.46

4.03

-

-

21.67

89.46

66.8

90.57

-

3.55

-

Inventory turnover ratio(times) (Note 2)
Payables turnover ratio
Operating (times)
ability
Average days of sales
Property, plant andequipment (fixed assets)turnover ratio (times)
Total assets turnover ratio(times)Return on assets (%)

-

6.98

-

9.46

-

7.37

-

-

-

-

3.55

2.08

3.51

1.33

-

-

0.67

0.43

0.69

0.22

-

-

12.18
15.65

(0.21)(1.32)

18.88
30.03

3.66
4.60

-

-

24.62

1.87

80.09

31.63

-

-

18.14
2.28
(15.74)(1.79)(0.22)
53.14

27.06
6.83
28.21

16.27
2.57
(50.73)-

Cash flow adequacy ratio
(%)

-

7.87

15.2

(25.39)38.06-

Cash reinvestment ratio (%)-(5.22)

9.69

4.79(17.96)-

Operating leverage

-

1.19

11.47

1.12

1.37

-

Financial leverage

-

1.00

(0.69)

1.01

1.00

-

Return on equity (%)
Paid-in capital to income
Profitability
before tax (%) (Note 8)
Net profit margin (%)
Earnings per share (NT$)
Cash flow ratio (%)
Cash flows-

Leverage- 98 -

Reasons for changes in financial ratios in the most recent 2 years. (Can be left blank of the increaseor decrease is less than 20%)
1. Liability to asset ratio: The liability to asset ratio was reduced in 2015 compared with 2014 primarily because of
issuring common stock for cash and repayment of company debts.
2. Long-term fund to fixed assets ratio: Decline in ratio was attributed to issurance common stock for cash.
3. Times interest earned: Times interest earned increased after 2014 primarily due to the increase in capitalized interestof the loan for constracting the R&D Testing Center.
4. Average days of collection: Average number of days declined primarily because the payments for the implementationof customized design plans, scale, and completion progress were received on time in 2015.
5. The Company primarily focuses on the R&D and design of simulator rides by using its design, R&D, and system
integration capabilities as well as the hardware equipment of outsourced vendors. Because the Company's core value
is its design, R&D, and system integration capabilities, its business characteristic differs from general man ufacturingindustries in that the Company manufactures and sells physical products. Therefore, inventory turnover ratio is not
calculated.
6. Payables turnover ratio: Payables turnover ratio declined primarily because that the amount of purchase in past 6months increased compared to 2014.
7. Property, plant and equipment turnover ratio: Property, plant and equipment turnover ratio was reduced in 2015
because of decrease in operating income and constracting the R&D Testing Center.
8. Total assets turnover ratio: Total assets turnover ratio declined because of decrease in operating income and issuringcommon stock for cash.
9. Profitability (return on assets, return on shareholder's equity, percentage of net operating income to paid-in capital,
percentage of income before tax to paid-in capital, net profit margin, and earnings per share): Each ratio declined dueto the decrease in operating income in 2015 compared with 2014, which decrease the gross margin, thus decreasing
the net operating income.
10. Cash flow ratio: Cash flow ratio in 2015 decreased because of increase in inventory and increase in othernoncurrent assets.

Note 1: The 2012, 2013, 2014 and 2015 Financial Reports of the Company have been reviewed by the CPA.
Note 2: The Company primarily focuses on the R&D and design of simulator rides by using its design, R&D, andsystem integration capabilities as well as the hardware equipment of outsourced vendors. Because theCompany's core value is its design, R&D, and system integration capabilities, its business characteristic differsfrom general manufacturing industries in that the Company manufactures and sells physical products. Therefore,
inventory turnover ratio is not calculated.
Note 3: The company does not have individual financial report as of March 31, 2016.
Note 4: The following calculation formulas shall be displayed at the end of the tables of the annual report.
1. Financial structure(1) Debt-to-asset ratio = total liabilities / total assets.
(2) Long-term fund to property, plant and equipment ratio = (total equity + non-current liabilities) / net property, plantand equipment.
2. Solvency(1) Current ratio = current assets / current liabilities.
(2) Quick ratio = (current assets - inventory - prepaid expense) / current liabilities.
(3) Times interest earned = net income before income tax and interest expense / current interest expense.
3. Operating ability(1) Receivable (including accounts receivable and business-related notes receivable) turnover ratio = net operating
revenue / average balance of receivable of the period (including accounts receivable and business-related notes
receivable).
(2) Average days of collection = 365 / receivables turnover ratio.
(3) Inventory turnover ratio = cost of goods sold / average amount of inventory.
(4) Payable (including accounts payable and business-related notes payable) turnover ratio = cost of goods sold /average balance of payable of the period (including accounts payable and business-related notes payable).
(5) Average days of sales = 365 / inventory turnover ratio.
(6) Property, plant and equipment turnover ratio = net sales / net average property, plant and equipment.
(7) Total assets turnover ratio = net sales / total average assets.
4. Profitability(1) Return on assets ＝ [net income + interest expense (1 - tax rate)] / average total assets.
(2) Return on equity = after-tax profit /total average equity.
- 99 -

(3) Net profit margin = net income / net sales.
(4) Earnings per share = (income attributable to owners of parent - dividend to preferred stock) / weighted average of sharesissued. (Note 4)
5. Cash flows(1) Cash flow ratio = new cash flows from operating activities / current liabilities.
(2) Cash flow adequacy ratio = net cash flows from operating activities in the past five years / (capital expenditure +increase in inventory + cash dividend) in the past five years.
(3) Cash reinvestment ratio = (net cash flows from operating activities - cash dividend) / (gross margin of property,
plant and equipment + long-term investment + other non-current assets + working capital). (Note 5)
6. Leverage:(1) Operating leverage = (net operating income - variable operating cost and expenses) / operating income (Note 6).
(2) Financial leverage = operating income / (operating income - interest expense).
Note 5: Precautions shall be taken when measuring the aforementioned earnings per share:
1. Based on the weighted average number of ordinary shares, rather than on the year-end number of issued shares.
2. Weighted average number of shares shall be based on the flow period during capital increase or treasury stocktransactions.
3. For earnings transfer or capital reserve transfer, annual and semiannual earnings per share shall be tracked andadjusted according to the proportion of capital increase without considering the issuance period when capitalincreased.
4. If the preferred stocks are nonconvertible cumulative preferred stocks, the annual stock dividend (issued or not issued)
shall exclude after-tax income or include after-tax loss. If the preferred stocks are noncumulative, then when
there is after-tax income, preferred stocks shall exclude after-tax income, and no adjustment to preferred stocks
is required when there are losses.
Note 6: The following precautions shall be taken when measuring cash flow:
1. Net cash flow of business activities refer to the net cash inflow in the company's business activity.
2. Capital expenditure refers to the cash outflow for annual capital investments.
3. Increase in inventory is calculated only when the balance at the end of a period exceeds the balance at the initialperiod; if the year-end inventory is reduced, then it shall be zeroed.
4. Cash dividend includes the cash dividend from holding ordinary and preferred stocks.
5. Gross property, plant, and equipment refer to the total property, plant, and equipment values before cumulative
depreciation.
Note 7: Issuer shall categorize operating costs and expenditures into fixed or variable costs and expenditures according
to their characteristics; when costs and expenditures are estimated or subjectively determined, their rationality
and consistency shall be ensured.
Note 8: When company stocks have no face value or the face value per share is not NT$10, face value to paid-in capitalshall be calculated according to the equity ratio that is based on the balance sheets of the owner of the parent.

- 100 -

2. Financial Analysis - Taiwan financial reporting standards
Unit: NT$1,000
Year (Note 1)

Financial analysis (2010 - 2014)
2014

2010

2011

2012

2013

11.28

16.92

24.23

-

-

9,027.50

18,728.3
4

278.25--Current ratio

934.01585.61278.58--

Quick ratio

855.41527.54203.83--

Times interest earned(828.73)654.36516.56--

Receivables turnover ratio (times)
Average days of collection
Inventory turnover ratio (times) (Note 2)
Payables turnover ratio (times)
Average days of sales
Fixed assets turnover ratio (times)
Total assets turnover ratio (times)
Return on assets (%)
Return on shareholder's equity (%)

4.92
74
2.32
22.93
0.20
(25.48)(29.34)

16.47
22
4.63
122.68
0.80
17.32
20.33

16.84
22
6.98
3.57
0.67
12.21
15.61

-

-

Operating income(20.64)

14.12

24.12

-

Income before tax(21.58)

19.92

24.71

-

(130.23)(2.04)

21.75
1.74

18.22
2.29

-

-

Cash flow ratio (%)

-

69.97

-

-

-

Cash flow adequacy ratio (%)

-

-

-

-

-

Cash reinvestment ratio (%)

-

12.51

-

-

-

Operating leverage

0.91

1.16

1.19

-

-

Financial leverage

1.00

1.00

1.00

-

-

Item (Note 2)
Debt-to-assets ratio
Financial structure (%)
Long-term fund to fixed assets ratio

Solvency (%)

Operating ability

Profitability

Percentage of paid-in capital (%)

Net profit margin (%)
Earnings per share (NT$)

Cash flows

Leverage

Note 1: The 2010 - 2014 financial reports have been certified by the CPA.
- 101 -

Note 2: The Company is an information software service industry, with its primary business activity being the R&D
and design of simulator rides. Regarding the mobile device software, the various application software aredeveloped according to customer needs and are delivered to customers in the form of software applications.
Therefore, the Company has no physical inventory of software systems. The Company primarily focuses on
the R&D and design of simulator rides by using its design, R&D, and system integration capabilities as wellas the hardware equipment of outsourced vendors. Because the Company's core value is its design, R&D, andsystem integration capabilities, its business characteristic differs from general manufacturing industries in that
the Company manufactures and sells physical products. Therefore, inventory turnover ratio is not calculated.
Note 3: The business cash flow is nonsignificant when it is a negative value; therefore, its related ratios are notdisplayed.
Note 4: The following calculation formulas shall be displayed at the end of the tables of the annual report.
1. Financial structure(1) Debt-to-asset ratio = total liabilities / total assets.
(2) Long-term fund to fixed assets ratio＝(net shareholders’ equity + long-term debt) / net fixed assets.
2. Solvency(1) Current ratio = current assets / current liabilities.
(2) Quick ratio = (current assets - inventory - prepaid expense) / current liabilities.
(3) Times interest earned = net income before income tax and interest expense / current interest expense.
3. Operating ability(1) Receivable (including accounts receivable and business-related notes receivable) turnover ratio = net
operating revenue / average balance of receivable of the period (including accounts receivable andbusiness-related notes receivable).
(2) Average days of collection = 365 / receivables turnover ratio.
(3) Inventory turnover ratio = cost of goods sold / average amount of inventory.
(4) Payable (including accounts payable and business-related notes payable) turnover ratio = cost of goods sold /average balance of payable of the period (including accounts payable and business-related notes payable).
(5) Average days of sales = 365 / inventory turnover ratio.
(6) Fixed assets turnover ratio＝net sales / net average fixed assets.
(7) Total assets turnover ratio = net sales / total average assets.
4. Profitability(1) Return on assets ＝ [net income + interest expense (1 - tax rate)] / average total assets.
(2) Return on shareholder’s equity＝ net income / net average shareholders’ equity.
(3) Net profit margin = net income / net sales.
(4) Earnings per share＝(net income - dividend to preferred stock) / weighted average of shares issued. (Note 4)
5. Cash flows(1) Cash flow ratio = new cash flows from operating activities / current liabilities.
(2) Cash flow adequacy ratio = net cash flows from operating activities in the past five years / (capital
expenditure + increase in inventory + cash dividend) in the past five years.
(3) Cash reinvestment ratio = (net cash flows from operating activities - cash dividend) / (gross fixed assets +long-term investment + other assets + working capital). (Note 5)
6. Leverage:(1) Operating leverage = (net operating income - variable operating cost and expenses) / operating income (Note6).
(2) Financial leverage = operating income / (operating income - interest expense).
Note 5: Precautions shall be taken when measuring the aforementioned earnings per share:
1. Based on the weighted average number of ordinary shares, rather than on the year-end number of issued shares.
2. Weighted average number of shares shall be based on the flow period during capital increase or treasury stocktransactions.
3. For earnings transfer or capital reserve transfer, annual and semiannual earnings per share shall be tracked andadjusted according to the proportion of capital increase without considering the issuance period when capitalincreased.
4. If the preferred stocks are nonconvertible cumulative preferred stocks, the annual stock dividend (issued or notissued) shall exclude after-tax income or include after-tax loss. If the preferred stocks are noncumulative, thenwhen there is after-tax income, preferred stocks shall exclude after-tax income, and no adjustment to preferredstocks is required when there are losses.
Note 6: The following precautions shall be taken when measuring cash flow:- 102 -

1. Net cash flow of business activities refer to the net cash inflow in the company's business activity.
2. Capital expenditure refers to the cash outflow for annual capital investments.
3. Increase in inventory is calculated only when the balance at the end of a period exceeds the balance at the initialperiod; if the year-end inventory is reduced, then it shall be zeroed.
4. Cash dividend includes the cash dividend from holding ordinary and preferred stocks.
5. Gross fixed asset refers to the total fixed asset before cumulative depreciation.
Note 7: Issuer shall categorize operating costs and expenditures into fixed or variable costs and expenditures according
to their characteristics; when costs and expenditures are estimated or subjectively determined, their rationality
and consistency shall be ensured.

3. Supervisor Review Report
Refer to Appendix 2.

4. Financial Report and CPA Review Report
Refer to Appendix 3.

5. Individual financial report reviewed by CPA (2011 - 2015)
None.

6. Financial difficulties and corporate events encountered by the Company andaffiliates in the past two years and up to the date of report that have material
impact on the financial status of the Company: None.

- 103 -

Precautions of Review and Analysis of Financial
Status and Business Performance

VII.
1.

Financial status(1) Consolidated
Unit: NT$1,000
Year

Item

End of 2014

End of 2015

Variation
Amount%Current assets-

2,341,930--

Property, plant and equipment-

557,047--

Other assets-

249,061--

Total Assets-

3,148,038--

Current liabilities-

566,592--

Non-current liabilities-

88,140--Total liabilities-

654,732--

Share capital-

446,780--

Capital reserve-

2,043,087--

Undistributed earnings-

220,459--

Total shareholders' equity-

2,493,306--

Satrting from Year 2015, the company has consolidated financial report; therefore, no YoY comparison is presented.

(2) Induvidual
Unit: NT$1,000
Year
Item

End of 2014

End of 2015

Variation
Amount

%1,028,066

1,967,995

939,929

91.43

310,698

551,001240,303

77.34

78,083
1,416,847

609,978
3,126,974

529,895
1,710,127

678.63120.70Current liabilities

208,712593,896385,184

184.55

Non-current liabilities

180,165

88,140(92,025)(51.08)

Total liabilities

388,877

682,036

293,159

75.39

Share capital

341,294446,780

105,486

30.91

Capital reserve459,496

2,043,087

1,583,591

344.64

Undistributed earnings

227,180

220,459(6,721)(2.96)

Total shareholders' equity

1,027,970

2,444,938

1,416,968

137.84Current assets
Property, plant and equipment
Other assets
Total Assets- 104 -

Analysis and explanation of changes:(1) Increase in current asset in 2015 was attributed to issuranse common stock for cash.
(2) Increase in fixed asset in 2015 was attributed to the construction of the R&D Testing and Experience Center.
(3) Increase in other assets in 2015 was attributed to the recognization of profit sharing right of ticket sales andincrease in prepayment for equipment for construction of the R&D Testing and Experience Center.
(4) Increase in current liabilities and reduction in noncurrent liabilities in 2015 because long-term liabilities will due
within 12 months and reclassified to current liabilities.
(5) Increase in share capital and capital reserves in 2015 was attributed to issuranse common stock for cash.

2. Financial performance(1) Comparative analysis of business performance- Consolidate
Year
Item
Sales revenue

2014

2015

-

705,424-

Change (amount)

Variation as apercentage (%)

-

-

-

-

Less: Returns and Allowances-

Net revenue-

705,424--

Operating cost-

371,463--

Gross profit-

333,961--

Operating expenses-

203,549--

Operating income-

130,412--

Non-operating income and gain-

33,618--Non-operating expense and loss-

11,803--

Income (loss) before tax-

152,227--

Income tax benefits (expenses)-(32,458)--

Net profit (loss)-

119,769--

Satrting from Year 2015, the company has consolidated financial report; therefore, no YoY comparison is presented.

(2)Comparative analysis of business performance- Individual
Unit: NT$1,000
Year

Item
Sales revenue
Less: Returns and Allowances

2014

2015

829,511-

690,617

Change (amount)(138,894)--

Variation as apercentage (%)(16.74)-

Net revenue

829,511

690,617(138,894)(16.74)

Operating cost

402,596

381,147(21,449)(5.33)

Gross profit

426,915304,396(122,519)(28.70)Operating expenses

195,665

193,810(1,855)(0.95)

Operating income

231,250

110,586(120,664)(52.18)Non-operating income and gain

42,30442,533229

0.54

Non-operating expense and loss

3,812

11,803

7,991

209.63

269,742

141,316(128,426)(47.61)

Income (loss) before tax- 105 -

Year

2014

Item
Income tax benefits (expenses)
Net profit (loss)

2015

Change (amount)

Variation as apercentage (%)(45,310)(28,932)(16,378)(36.15)

224,432

112,384(112,048)(49.93)

Analysis and explanation of changes:(1) The Revenue booked in 2015 was less than 2014, since the 2015 exsiting contracts were mostly signed andconstructed in 2014. The most revenue was booked in 2014. As for the new contracts signed in 2015, the majority
were signed and undergone the manufacturing in the 2nd half of 2015. Therefore, the reduction in gross profit andoperating income is due to less revenue recognition in 2015.
(2) Increase in non-operating expense and loss was caused by loss on financial assets at fair value through profit orloss.
(3) Decrease in net income .profit before tax and Income tax expense was caused by reasons mentioned above.

(3) Expected Sales Volume and Criteria
On the basis of current industrial environment and future market supply and demand, as well as
information relevant to R&D schedule and business development, the Company expects its business togrowth steadily in 2016.

3. Cash flows(1) Analysis on the cash flow changes - Consolidated
Item
Net cash inflow (outflow) from operating
activities
Net cash inflow (outflow) from investing
activities
Net cash inflow (outflow) from financing
activities

2014

2015

Changes (increase/decrease)-(299,404)--(766,615)--

1,484,212-

Satrting from Year 2015, the company has consolidated financial report; therefore, no YoY comparison is presented.

(2) Analysis on the cash flow changes - Individual
Unit: NT$1,000
Item
Net cash inflow (outflow) from operating
activities
Net cash inflow (outflow) from investing
activities
Net cash inflow (outflow) from financing
activities- 106 -

2014

2015

Changes (increase/decrease)58,874(301,286)(360,160)(306,825)(1,116,265)(809,440)

187,914

1,443,212

1,255,298

Analysis on the cash flow changes of two years:(1) In 2015, net business cash outflow increased by NT$360,160,000 primarily because of net income and the change of related
assets and liabilities.
(2)In 2015, net investment cash outflow increased by NT$809,440 primarily because of Acquisition of held-to-maturity financial
assets, acquisition of investments accounted for using equity method, and the construction of the Phase 2 R&D Testing andExperience Center.
(3) In 2015, the net financing cash inflow increased by approximately NT$1,225,298primarily because of insurance common
stock for cash.

(3) Improvement plan for inadequate liquidity: None.
(4) Cash flow analysis for the coming year
Unit: NT$1,000
Expected cash
Remedial measures for expected cash deficit
flow from
Expected cash
Cash balance,
investment and surplus (deficit)
beginningfinancing+ Investment plan
Financing plan
activities
703,135
185,000
30,000918,135(1) Expected cash flow from operating activities: Cash inflow will be attribute to net income and the change of related
assets and liabilities.
(2) Expected cash flow from investment and financing activities: Cash inflow will be attribute to share of the profit ofsubsidiaries and associates and interest earned.
(3) Remedial measures for expected cash deficit:None
Expected cash
flow fromoperatingactivities- 107 -

4. Effect of major capital spending on financial position and business operation(1) Major capital spending and sources of funds
Unit: NT$1,000
Project

Actual or
expected sourceof funds

Actual or
estimatedcompletion date

Total funding need

Actual or expected status ofspending
2015
2016

Expand R&D
Testing andExperience Center

Marketfund-raising104.09250,000

252,513-

Business officeMarketfund-raising106.11

940,000

418,063-(2) Anticipated benefit(1) Enhance R&D testing capacity to increase corporate competitiveness(2) Integrate office and plant to raise operational efficiency(3) Improve working environment to increase employee commitment

5. Investment policy in the past year, profit/loss analysis, improvement plan,and investment plan for the coming year
(1) Investment transfer policy
The Company currently focuses its investment transfer policy on business investment related targets anddoes not invest in other businesses. Related executing department handles affairs according to theInvestment Circulation regulations of its internal control system and Procedure for Processing theAcquisition and Disposal of Assets, both of which have been reviewed and approved by the Board of
Directors.

(2) Reasons for profit or loss due to investment transfer in recent years
In accordance with the Company’s business expansion and future development, Brogent’s subsidiaries
were set up in 2015 for different purposes listed as below:
Investee Company

Business Scope

Brogent Mechanical Inc.

Manufacture and sales of the simulator rides and its key components

Brogent Creative Inc.

Development and sales of the peripheral products of simulator rides

Brogent Global Inc.

Development and management business of self-operated outlets

Brogent Hong Kong Limited

Reinvestment and trading business- 108 -

Investee Company

Business Scope

Brogent Rides (Shanghai) Limited

Import and export businessBrogent Creative (Shanghai)
LimitedDevelopment and management business of self-operated outlets

Since the subsidiaries are newly established, no significant revenue was generated. In 2015, the total
revenue from the affiliated companies accounted 2.1% of the consolidated revenue. The total profit was
NT$9,168,000. Once the subsidiaries grow, the Company’s consoliated revenue is expected to increase
accordingly.

(3) Investment plan for the next year
The Company will review and evaluate our investment plant from a long-term strategic perspective tostrengthen the channel-content management strategy and continue to strengthen our global
competitiveness.

6. Analysis of risks in recent years up to the publishing date of the annual
report(1) Impact of interest rate and exchange rate changes and inflation on
Company’s profit and response measures:(1) Impact of interest rate on Company's profit and response measures
The Company uses its funds conservatively and steadily; the operation-generated funds are stored astime deposits and current deposits. The interests earned in 2014 and 2015 were respectively
NT$5,634,000 and 14,659,000. The bank loan interest expenses were respectively NT$3,199,000 and
487,000. The interest earned and ratio of expenditure as a percentage of operating income and net
income before tax was low. Because the Company is increasing its business scale and building the R&D
Testing and Experience Center, it is expected that the Company will need more loans in NTD. The
Company will remain vigilant at changes in the banks' interest rate and maintain a good relationshipwith its cooperating banks so that the Company can acquire preferential interest rate to reduce the effects
of interest rate variations on the Company operation.

(2) During recent years up to the annual report publishing date, the effects of
exchange rate variations on the Company's profit and its future response- 109 -

measures
The business focus of the Company is mobile device software and simulator rides; the downstream
customers are major foreign and domestic cellphone manufacturers as well as developers of theme parks.
Our mobile device software is priced in USD, and the simulator rides are priced in either NTD or foreign
currency depending on the region of sale. Therefore, foreign currency assets are generated. The net
foreign exchange (loss) gain were respectively NT$12,180,000 and NT$ 7,435,000, accounting for1.47% and 1.05% in 2014 and 4.52% and 4.88% in 2015 of the operating income and net profit margin
before tax. Because exchange rate changes influence the profits of the Company, the Company's
management authorities pay close attention to the exchange rate trends and reinforce the management ofrisks in exchange rate fluctuations. The corresponding measures adopted are as follows:Because of the gradual increase in export sales, the Company attempts to mitigate the effects of
exchange rate changes by setting up a foreign currency savings account to manage foreign currencies.
The Company assigns designated personnel from the finance department to sell excess foreign
currencies under optimal conditions according to the daily foreign currency balance and monthly fundestimates, to reduce the impact of exchange rate changes on the profit.
When giving quotes to foreign customers, the business department considers the effects of exchange
rate variations on product prices and refers to the prices adjusted according to the changing exchange
rates, or negotiates a new price in NTD with the customer, thereby mitigating the effects of exchange
rate variations on the profit of the Company.
Our finance department personnel maintains a close contact with the foreign exchange departments offrequent interacting banks to adequately acquire market information and use such information to forecast
the long- and short-term trends of the exchange rage and sell or buy in foreign currencies in a timely
manner. Thus, the effects of exchange rate variations on the profitability of the Company can be
reduced.
At the appropriate timing, the Company will have its finance department personnel to review thechanges in the foreign exchange market and consider foreign exchange fund requirements and balances
to determine whether hedging derivative financial instrument operating strategies should be used inaccordance with the Procedure for Processing the Acquisition and Disposal of Assets, such as buying
forwards in advance to avert exchange rate risks, thereby minimizing the effects of exchange ratevariations on the profit of the Company.

(3) During recent years up to the annual report publishing date, the effects ofinflation on the Company's profit and its future response measures:
The Company profits have not experienced material influence from inflation; it is predicted that such
effect remains limited on the Company's profits. The Company will continue to monitor the inflation- 110 -

situation and adequately adjust its product prices accordingly.

(2) Policies of engaging in high-risk, high-leverage investments, lending toothers, providing endorsement and guarantee, and derivatives transactions,profit/loss analysis, and future response measures:(1) The Company has always focused on its main business activities and upheld the practical principle ofmanaging a business. Our financial policy is based on the principle of robustness and conservativeness,and thus the Company does not engage in high-risk, high-leveraging investment as well as derivative
instrument transactions.
(2) From 2014 to 2015 and up to the annual report publishing date, the Company has not engaged inproviding endorsement and guarantee, lending to others, and derivatives transactions. If suchengagements are required in the future, it shall be executed in accordance with the "Operating Procedurefor Endorsements and Guarantees," "Operating Procedure for Fund Lending," and "Procedure for
Acquisition or Disposal of Assets" and relevant transaction information shall be announced inaccordance with laws and regulations.

(3) Future R&D projects and estimated R&D expenditure:
To continuously enhance the Company’s competitiveness, the Company has always actively invested in
R&D efforts. In 2014 and 2015, it has expended a total of NT$89,069 million and NT$63,288 million in
R&D, respectively accounting for 10.74% and 8.97% of the net operating income. It is expected that a
total of NT$90,820 million will be expended in R&D in 2016, and the Company's future R&D projects
are as follows:
Unit
Creativity center

Technical center

New products under development
A.Games(1).Interactive game combining motion simulation and technology(2).Sensory interactive game combining augmented reality and related 3D
imaging technologies(3).d-Ride interactive shooting game
B.Digital content production (including cooperative development)(1). Product x-Ride imaging production(2). Product T-Rex imaging production(3). Product i-Ride imaging production(4). Product Odyssey imaging production(5). Product Media Free Fall imaging production
C.Theme planning and renovation design
D.Applied equipment combined with wearable device
E.Novel projector technical development
F.Theme-based peripheral product development
A.Group interactive motion theater development
B.Novel simulator ride product development

C.Platform-controlled technological optimization
D.Mechanical design optimization- 111 -Unit

New products under development
E.Arts design refinement
F.Equipment miniaturization- 112 -

(4) Major changes in government policies and laws at home and broad and theimpact on Company finance and business and response measures:
During recent years up to the annual report publishing date, major changes in government
policies and laws at home and broad exerted no material effect on Company finance and business.
The Company will acquire relevant information in a timely manner and formulate necessary
response measures to meet company operation requirements.

(5) Impact of recent technological and market changes during recent years up
to the annual report publishing date on the Company's finance andbusiness, and response measures:
The Company has constantly paid attention to technological and market changes anddesignated personnel to search for information regarding industry-related technologies and trend
variations to provide a reference for decision-making at the management level. The information canfacilitate adjusting operational strategies and devise response measures. Therefore, there were no
impact of recent technological and market changes on the Company's finance and business.

(6) Impact of corporate image change on risk management and response
measures:
Since its inception, the Company actively strengthens its internal management, focusing on the
management of its main business activities. In addition, it endeavors to maintain corporate image
and compliance with relevant laws and regulations. To date, there have been no changes to theCompany's image that would cause risks to company operation. In future, the Company willcontinue to comply with and implement corporate governance requirement, and consult relevant
experts in a timely manner, to reduce the effects of such risk on the Company's finance andbusiness.

(7) Expected benefits and potential risks of merger and acquisition andresponse measures:
During recent years up to the annual report publishing date, the Company has not undertaken
merger and acquisition plans. In the future, when evaluating and implementing relevant plans, theCompany shall handle related matters according to laws and regulations and the Company's internalmanagement regulations.

(8) Expected benefits and potential risks of capacity expansion and response
measures:
The Company has relocated to the newly constructed R&D Testing Center in January 2013, asa response to prepare for the Company's future expansion, increase its R&D and testing capacities,- 113 -

and raise its operational efficiency requirements. After relocating to the new plant, the Company's
image, ability to receive orders, and management efficiency have improved, which is conducive toits business expansion. Because of the currently accepted and expected projects, the Company's
R&D testing capacity is inadequate. The Company has started the construction of a R&D Testingand Experience Center in the lower half of 2014 and completed construction in 2016. The R&D
Testing and Experience Center not only facilitates determining consumers' entertainment needs
regarding simulator rides, but also improves product development, testing and production capacity,
increases the capacity to receive more orders and market share, and magnify the gap between the
Company and its competitors in competitive advantage.

The Company has carefully evaluated thefunding requirement for business expansion and properly planned the use of the funds. The
Company will raise funds in a capital market to support the construction works. However, if market
fund-raising fails, the Company has a low credit limit remaining in bank loans and thus it will apply
for construction financing loans from the bank. In addition, the Company's cash flow from operating
activities should be enough to support the expansion requirement; therefore, the Company is not
subject to the risk of shortage of funds caused by the construction of the R&D Testing andExperience Center.

(9) Risks associated with over-concentration in purchase or sale and response
measures:(1) Purchases
The Company is a professional manufacturer of simulator rides, purchasing stocks according
to the project designs of various simulator rides. The Company also commissions manufacturers
to undergo hardware processing. In the past 2 years, no purchases exceeding 15% were made fromeach manufacturer. Therefore, the Company is not associated with risks of overly concentratingstock purchases.
(2) Sales
Because simulator rides involve high manufacturing cost, the Company primarily receives
income from selling simulator rides since our entry into the simulator ride market. The proportionof sales to simulator ride customers is also demonstrating an increasing trend annually. Following
the successful operation of the FlyOver Taiwan project, the Company has attracted the attention of
global amusement park and tourist attraction operators, and these operators have visited theCompany to engage in negotiations and experience the products themselves. According tocustomer demand, the Company designs and integrates upstream software and hardware systems
and technologies, selling them to downstream operators, including theme parks, museums,
shopping malls, and urban experience center. With the increasing popularity and word of mouth of
the Company as well as partnering with internationally well-known companies, the Company has
expanded from the domestic market to China, North American regions, and Euroasian regions,- 114 -

effectively reducing its reliance on a single customer, thereby mitigating the risk of sales
concentration.
The upstream industries associated with the simulator ride equipment comprise the hardware
section, including precision machinery industry and manufacturers of spherical screens andprojectors, and the software section, including wireless embedded control system, sphericalprojector and playback control systems, and digital contents.

(10) Impact of mass transfer of equity by or change of directors, supervisors,or shareholders holding more than 10% interests on the Company,
associated risks and response measures:
During recent years up to the annual report publishing date, there were no mass transfers ofequity by or change of directors, supervisors, or shareholders holding more than 10% interests on
the Company.

(11) Impact of change of management rights on the Company, associatedrisk and response measures:
In 2014 and 2015 up to the annual report publishing date, there were no negative impacts
from changes in management rights.

(12) Litigation or non-litigation events(1) Disclose the litigation facts, target amount, litigation start date, main parties involved, andcurrent progress regarding concluded or pending litigious, non-litigious, or administrative
litigation events, the potential effects of the outcomes on shareholder equity or security
prices during the recent two years up to the annual report publishing date: None.
(2) The outcome of concluded or pending litigious, non-litigious, or administrative litigation
events involving the director, supervisor, president, de facto responsible person, major
shareholders holding more than 10% interest, or subsidiary of the Company during the recent
two years up to the annual report publishing date: None.
(3) The involvement of the director, supervisor, president, and major shareholders holding morethan 10% interest in events regulated in Article 157 of the Securities and Exchange Act during
the recent two years up to the annual report publishing date, and the Company's current
progress in handling such events: None.

(13) Other significant risks and response measures: None.
I. Other important events: None.

- 115 -

VIII. Important Notices
1. Profile on affiliates and subsidiaries(1) Subsidiaries Iperation Report
A. Subsidiary Chart

B. Business Scope of each subsidiary

InvesteeCompany

Date of
Establishment

Location

Brogent
Mechanical Inc.

May, 2015

Taoyuan,TaiwanNTD
55,000,000

Brogent
Creative Inc.

April, 2015

Kaohsiung,TaiwanNTD 9,000,000

Brogent Global
Inc.

September,
2015

Taipei,TaiwanNTD
300,000,000- 116 -

Investment
AmountBusiness Scope
Manufacture and salesof the simulator rides
and its key components
Development and salesof the peripheralproducts of simulator
rides
Development andmanagement business of
self-operated outlets

Investee
Company
Brogent Hong
Kong Limited
Brogent Rides(Shanghai)
LimitedBrogent
Creative(Shanghai)
LimitedDate of
Establishment

Location

Investment
AmountJune, 2015

Kowloon,Hong
Kong

USD1,700,000

Reinvestment andtrading business

July, 2015

Shanghai,
China

USD700,000

Import and export
business

September,
2015

Shanghai,
China

RMB3,000,000

Development andmanagement business of
self-operated outlets

Business Scope

C. Shareholders in Common of Brogent and Its Subsidiaries with Deemed Control andSubordination: None.
D. Rosters of Directors, Supervisors, and Presidents of Brogent’s Subsidiaries
Investee

Title
Chairman
Director
Director

Brogent
Creative Inc. Director
Director
Supervisor

Brogent
Mechanical Chairman
Inc.
Director
Director
Supervisor

Brogent Hong
ChairmanKong Limited

Name or Representative
Brogent Technologies Inc.
Representative：Pei-Chi HoBrogent Technologies Inc.
Representative：Chun-Hao Cheng
Brogent Technologies Inc
Representative：Nobuyasu Suzuki
Brogent Technologies Inc
Representative：Osamu YoshibaMuse
Communication Co., Ltd.
Representative：Kuo-Hsiang Yang
Pei-Kuan Lee
Brogent Technologies Inc.
Representative：Chih-Hung Ouyang
Sunny Enterprises Co., Ltd.
Representative：Wen-Hsiang Kao
Brogent Technologies Inc.
Representative：Teng-Hung Lai
Fei-Hsiu Hsu
Brogent Technologies Inc.
Representative：Pei-Chi Ho- 117 -

Shares Held
SharesPercentatge
900,000

60 %

900,000

60 %

900,000

60 %

900,000

60 %

75,0005%--5,500,000

61.11%

3,500,000

38.89%

5,500,000

61.11%

-

-

-

100%

Investee

Title

Brogent Rides Chairman(Shanghai)Supervisor
LimitedBrogent
ChairmanCreative(Shanghai)Supervisor
LimitedBrogent Technologies Inc.
Representative：Pei-Chi HoBrogent Technologies Inc.
Representative：Pei-Kuan Lee

-

100%

-

100%

Brogent Technologies Inc.
Representative：Pei-Chi Ho

-

100%

Brogent Technologies Inc.
Representative：Pei-Kuan Lee

-

100%

30,000,000

100%

30,000,000

100%

30,000,000

100%

30,000,000

100%

Brogent Technologies Inc.
Representative：Chih-Hung Ouyang
Brogent Technologies Inc.
Director
Representative：Pei-Chi HoBrogent Technologies Inc.
Director
Representative：Ming-Chi Chang
Brogent Technologies Inc.
Supervisor
Representative：Sui-Chuan Lin
ChairmanBrogent
Global Inc.

Shares Held
SharesPercentatge

Name or Representative(2) Operational Highlights of Subsidiaries

Investee
Brogent
Creative Inc
Brogent
Mechanical Inc.
Brogent Global
Inc.
Brogent Hong
Kong Limited
Brogent Rides(Shanghai)
LimitedBrogent
Creative(Shanghai)
LimitedCapital

Total
Asset

15,000

Unit: NT$1,000 As of Dec. 31, 2015
Net
IncomeEPS
Revenue
Profit(After
(NTD)
Tax)

Total
Liabilities

Net
Value

14,935

11

14,924

0

(106)

(76)

(0.05)

90,000197,071

88,024

109,046

84,711

22,82019,0462.12

300,000

300,592

2,369

298,223

0(2,282)(1,777)(0.06)

54,06354,248054,248

0

(377)

(641)

-

22,69021,93575

21,860

0

(85)

(264)

-

14,961

14,911

196

14,715

0

(199)

(199)

-

(3) Consolidated Financial Statements: Please refer to Appendix 3.

- 118 -

2. Private placement of corporate bonds in the past years to the date of theannual report
Private Placement No.1
Date of Issue: February 06, 2015

Item

Types of Privately
Ordinary shares
Placed Securities
Date and number of
On December 19, 2014, the Shareholders' extraordinary meeting passed the private
shares passed in the placement of 6,000 ordinary shares, which shall take place once in a year starting fromshareholders' meeting the date of resolution.
The pricing criterion for the issuance of privately placed ordinary share resolved in
the shareholders' meeting on December 19, 2014 was no less than 60% of the reference
price. Because the private placement price was less than 80% of the private placement
Pricing criteria andreference price, CPA Shun-Fa Hsu from Deloitte & Touche was requested to produce a
rationality
private placement price rationality independent expert opinion book on November 1,
2014. This conforms to the regulation of public issuing companies regarding the terms
and condition of private placement securities; therefore, the price should be reasonable.
Method of selecting
Limited to the designated party as regulated under Article 43-6 of the Securities anddesignated party
Exchange Act.
The current private placement is aimed to recruit strategic investors through which
the Company can strengthen its customer structure, product combination, andNecessary reason for marketing abilities. Compared with publicly placed securities, privately placed
private placement
securities may not be transferred freely within three years, and such regulation ensuresthe long-term cooperation between the Company and placement subscribers.
Date of Payment
2015.01.05
Completion
Private placement Criteria
Number of
Relation
Participation in
subject
shareswith
corporate(Note 6)(Note 5)subscribedcompany
management

Subscriber
information

Ruentex
1,800,000
Development Co.
Ltd.
Ruentex
1,800,000
Industries Ltd.
Changchun
1,555,000
Investment Co.
Ltd.
Chihping
Investment Co.
200,000
Ltd.
Yong-Fang
Conforms to Article 6,000
Chiang43-6 of the
Securities and6,000
Sheng-Yu Hsu
Exchange Act
28,000Shou-Jen Chen
Ling-Chung
7,000
Meng
Shun-Long Chen
123,000
6,000
Kuo-Ming Lu
Deng-Chih Chang
6,000
6,000
Shu-Feng Yeh
Shu-Ming Liu
6,000
37,000
Bi-Yang Tsai
Hua-Tong Chao
18,000- 119 -

None.

None.

None.

None.

None.

None.

None.

None.

None.

None.

None.
None.

None.
None.

None.

None.

None.
None.
None.
None.
None.
None.
None.

None.
None.
None.
None.
None.
None.
None.

18,000
Chun-Hsiang Wu
3,000
Kuo-Song Chan
18,000Tong-Hui Lin
1,000
Cheng-Cheng Liu
6,000
Chih-Tsang Lu
22,000Chih-Chuan Chen
20,000Chen-Wei Mah
Cheng-Chuan
22,000Chen
22,000Chih-Fan Wang
Chuan-Thai
22,000Cheng
22,000Chong-Hsian Liu
Dah-Meng Tseng
22,000Conforms to Article
22,000
Fan-Wen Meng 43-6 of theLong-Yeh Chuo Securities and22,000ExchangeAct
22,000Chih-Chang Hsu
Shih-Hsun Lai
22,00044,000Shih-Ning Dong
Chang-Cheng
22,000Chien
22,000Chih-Hong Li
22,000Ming-Chun Chen
Actual subscription(or conversion) price
Actual subscription(or conversion) priceand difference withreference priceEffect of private
placement onshareholder's equity
Status of private
placement fundspending and project
implementation
progress
Manifestation ofprivate placement
benefits

None.
None.
None.
None.
None.
None.
None.

None.
None.
None.
None.
None.
None.
None.

None.

None.

None.

None.

None.

None.

None.
None.
None.
None.
None.
None.
None.

None.
None.
None.
None.
None.
None.
None.

None.

None.

None.
None.

None.
None.

NT$240.
No difference
The current private placement funds are utilized as operational funds to strengthen
financial structure, facilitate operation promotion, attract long-term partners, andpromote stable business growth, thus benefiting the shareholders' rights and interests.
All funds have been received and will be successively utilized following planningcompletion.

Not applicable.

- 120 -

Private Placement No. 2
Date of Issue: July 06, 2015

Item
Types of
Privately
PlacedSecurities
Date andnumber ofshares passedin theshareholders'meeting

Ordinary shares

On June 11, 2014, the Shareholders' meeting passed the private placement of 3,300
ordinary shares, which shall take place once or twice in a year starting from the date ofresolution.

The pricing criterion for the issuance of privately placed ordinary share resolved in the
Pricing criteria shareholders' meeting on June 11, 2014, was no less than 6 80% of the private placement
and rationality reference price. This conforms to the regulation of public issuing companies regarding theterms and condition of private placement securities; therefore, the price should be reasonable.
Method of
Not applicable.
selectingdesignatedparty
The current private placement is aimed to recruit strategic investors through which theNecessaryCompany
can strengthen its customer structure, product combination, and marketing abilities.
reason for
Comparedwith publicly placed securities, privately placed securities may not be transferredprivatefreelywithinthree years, and such regulation ensures the long-term cooperation between theplacement
Company and placement subscribers.
Date of2015.06.03
Payment
Completion
Number Relation Participation
Private placement subject
Criteriaof shares within corporate
subscribed company management
Kodasha Custody Account in
None
None
250,000
Taipei Fubon Financial Bank
None
500,000 None
Gains Investment Corporation
Subscriber
information
Conforms
toArticleShang Yang Investment
None
None
43-6 of the Securities 100,000
Corporationand Exchange Act
None
Chao Yang Investment Corporation
100,000 None
None
None
50,000Cheng-Chien Pu
None
None
Ming-Chu Kuo
30,000
Actualsubscription(or conversion) NT$308
price
Actualsubscription(or conversion) No difference
price anddifference withreference priceEffect ofprivate
The current private placement funds are utilized as operational funds to strengthen financial
placement on structure, facilitate operation promotion, attract long-term partners, and promote stableshareholder's business growth, thus benefiting the shareholders' rights and interests.
equityStatus ofprivateplacement fund All funds have been received and will be successively utilized following planning completion.
spending and- 121 -

project
implementation
progress
Manifestationof private
Not applicable.
placement
benefits- 122 -

3.

Holding or disposal of stocks of the Company by subsidiaries in the past
year and up to the date of report: Not applicable.

4. Other supplemental information
Items of Commitment: The Company has executed or signed letter of understanding regarding itemsof commitment to listing and trading over the counter.

IX. Items of impact of interests of shareholders or
stock priceNone.

- 123 -

Appendix
Appendix 1：Statement of Internal Control System
Brogent Technologies Inc.
Statement of Internal Control System

Date: March 9, 2016
Based on the findings of a self-assessment, Brogent Technologies Inc. (Brogent) states the following
with regard to its internal control system during the year of 2015：
1. Brogent’s Board of Directors and Management are responsible for establishing, implementing, andmaintaining an adequate internal control system. Our internal control is a process designed toprovide reasonable assurance over the effectiveness and efficiency of our operations (including
profitability, performance, and safeguarding of assets), reliability, timeliness, transparency of ourreporting, and compliance with applicable rulings, laws and regulations.
2. An internal control system has inherent limitations. No matter how perfectly designed, an effective
internal control system can provide only reasonable assurance of accomplishing its stated objectives.
Moreover, the effectiveness of internal control system may be subject to changes due to extenuating
circumstances beyond our control. Nevertheless, our internal control system contains
self-monitoring mechanisms, and Brogent takes immediate remedial actions in response to any
identified deficiencies.
3. Brogent evaluates the design and operating effectiveness of its internal control system based on thecriteria provided in the Regulations Governing the Establishment of Internal Control Systems by
Public Companies (herein below, the “Regulations”). The criteria adopted by the Regulations
identify five key components of managerial internal control: (1) control environment, (2) risk
assessment, (3) control activities, (4) information and communication, and (5) monitoring activities.
4. Brogent has evaluated the design and operating effectiveness of its internal control system
according to the aforesaid Regulations.
5. Based on the findings of such evaluation, Brogent believes that, on December 31, 2015, it has
maintained, in all material respects, an effective internal control system (that includes thesupervision and management of our subsidiaries), to provide reasonable assurance over ouroperational effectiveness and efficiency, reliability, timeliness, transparency of reporting, andcompliance with applicable rulings, laws and regulations.
6. This Statement will be an integral part of Brogent’s Annual Report for the year 2015 andProspectus, and will be made public. Any falsehood, concealment, or other illegality in the content
made public will entail legal liability under Articles 20, 32, 171, and 174 of the Securities andExchange Law.
7. This Statement has been passed by the Board of Directors in their meeting held on March 9, 2016,
with the five attending directors all affirming the content of this Statement.
Brogent Technologies Inc.
Chairman：Chung-Ming Huang
President： Chih-Hung Ouyang- 124 -

Appendix 2：Supervisor’s Review ReportSupervisor’s Review Report
The Board of Directors has prepared the Company’s 2015 Business Report, Financial
Statements, and proposal for allocation of profits. The CPA firm of Grant Thornton was retained toaudit the Company’s Financial Statements and has issued an audit report relating to the Financial
Statements. The Business Report, Financial Statements and Profit Allocation Proposal have beenreviewed and determined to be correct and accurate by the Audit Committee members of Brogent
Technologies Inc. According to Article 219 of the Company Law, we hereby submit the report.
To the 2015 Annual General Meeting

Brogent Technologies Inc.

Supervisor：Chun-Nan Chen

Supervisor：Chun-Hao Cheng

Supervisor：Yung-Liang Huang

March 9. 2016125

Appendix 3：Consolidated Financial Statements and Independent Auditors’ Report

126

127

128

129

130

131

132

133

134

135

136

137

138

139

140

141

142

143

144

145

146

147

148

149

150

151

152

153

154

155

156

157

158

159

160

161

162

163

164

165

166

167

168

169

170

171

172

173

174

175

176

177

178

179

180

181

182

- 183 -- 184 -智崴資訊科技股份有限公司

董事長

黃仲銘

- 185 -