2016 Annual Report

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2016 Annual Report Stock Code:6196 Taiwan Stock Exchange Market Observation Post System: http://mops.twse.com.tw MIC annual report is available at: http://www.micb2b.com Marketech International Corp. 2016 Annual Report Printed on April 30, 2017 Notice to readers This English-version annual report is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions,the Chinese version shall prevail. 1. The name, title, telephone number, and e-mail address of the spokesman or acting spokesman: Spokesperson:Scott Lin Deputy Spokesperson:Scott Lin Title:President Title:President Tel:+883-2-26558899 Tel:+886-2-26558899 Email:[email protected] Email:[email protected] 2. The address and telephone number of the company’s headquarters, branch offices, and factories: Corporate Headquarter:6F, No.3-2, Yuancyu St., Nangang Dist., Taipei City 11503, Taiwan, R.O.C. Tel:+886-2-26558899 Hsin Chu Branch:6F-3, No.83, Sec2, Gongdao 5th Rd., East Dist., Hsinchu City 30070, Taiwan, R.O.C. Tel:+886-03-5160088 Tainan Science Park Branch:No.6, Dali 2nd Rd., Tainan Science-Based Industrial Park, Tainan City 74144, Taiwan,R.O.C. Tel:+886-6-5055666 Hukou Factory:No.35, Guangfu S. Rd., Hukou Township, Hsinchu County 303, Taiwan, R.O.C. Tel:+886-3-5974779 Toufen Factory:No.15, Lane 430, Zonghua Rd, Toufen Township, Miaoli County 351, Taiwan, R.O.C. Tel:+886-37-612385 Shanhua Factory:No.73 Hsingnong Rd., Shanhua Township, Tainan City 741 ,Taiwan,R.O.C. Tel:+886-6-5819803 Tainan Science Factory:No.6, Dali 2nd Rd., Tainan Science-Based Industrial Park, Tainan City 74144, Taiwan,R.O.C. Tel:+886-06-5055666 Tainan Science Factory:No.6, Dali 2nd Rd., Tainan Science-Based Industrial Park, Tainan City 74144, Taiwan,R.O.C. Tel:+886-06-5055666 MIC-TECH Wuxi Factory:No. 11, Xin Xi Rd., Wuxi National High-Tech DEV Zone, Wuxi City, Jiangsu Province, China 214028 Tel:+ 86-510-85200505 3. The name, address, e-mail address, and telephone number of the agency handling shares transfer: Company:KGI Securities Co., Ltd.,Stock Administration Department Address:4F., No.2, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City 100, Taiwan , R.O.C. Website:www.kgieworld.com.tw Tel:+886-2-23892999 4. The name of the certified public accountant who duly audited the annual financial report for the most recent fiscal year, and the name, address and telephone number of said person's accounting firm: Auditors:AccountLin,Chun-Yao&AccountChang, Shu-Chiung Accounting Firm:PricewaterhouseCoopers Taiwan Address:27F,Taiwan No.333., Sec. 1,Keelung Rd, Taipe Cityi, Taiwan 11012,R.O.C. Website:www.pwc.tw Tel:+886-2-2729-6666 5. The name of any exchanges where the company's securities are traded offshore, and the method by which to access information on said offshore securities:None. 6. Corporate Website:www.micb2b.com ~2 ~ Contents Part 1 Letter to Shareholders……………………….…………………………. 1 Part 2 Company Profile…………..…………………………………………….. 5 1.Date of Incorporation…………………………………………..……. 5 2.Company History…………………………………………………….. 5 Part 3 Corporate Governance Report……………………………………….... 9 1.Organization……………………………………………………….…. 9 2.Directors, Supervisors, President, VicePresident, Assistant Vice 12 President and Department Heads………………………………..…. 3.The remunerations dispensed to the Directors, Supervisors, 17 President and Vice President in the most recent fiscal year…..…… 4.Implementation of Corporate Governance …………………..……... 25 5.Information Regarding the Company’s Audit Fee and 41 Independence…………………………………………….…………… 6.Information on Replacement of Certified Public Accountant……… 42 7.The Chairman, President and the Manager in charge of finance or 43 accounting matters who has worked for the independent auditor or related parties in the most recent year………..………………..… 8.Information on shareholding transfer and pledge by Directors, 43 Supervisors, Department Heads and Shareholders with over 10% shareholding in the most recent year and up to the printing of the annual report……………………………………………………….…. 9.Relationship information among the Top Ten Shareholders and any 44 one is a related party pr a relative within the second degree of kinship of another 10.The shareholding of the same invested company by the Company, 45 the Directors, the Supervisors, the Managers or other business that is controlled by the Company directly or indirectly……………………………………………………….……… Part 4 Capital Overview………………………………………….….…..…….. 46 1. Capital and Shares……………………………………….….……… 46 2. Bonds………………………………………………………….……… 51 3. Preferred Stock…………………………………………...…………. 52 4. Global Depository Receipts…………………………………………. 52 5.Employee Stock Options………………………………………..……. 53 6. New Restricted Employee Shares…………………………………... 55 7.Status of New Issuance in Connection with Mergers and 55 Acquisitions…………………………………………………………… 8.Financing Plans and Implementation…………………..…………... 55 Part 5 Operational Highlights………………………………………….……… 57 1. BusinessActivities…………………………………………………… 57 2. Market and Sales Overview………………………..……………….. 157 3.Human Resources ……………………………………………..……… 171 4.Environmental Protection Expenditure………….…………………. 171 5.Labor Relations………………………..………………………..……. 171 ~3 ~ 6.Important Contracts………………………………………………… 174 Part 6 Financial Information………………...……..………………………… 176 1.Condensed Balance Sheets and Statements of Comprehensive 176 Income for the past 5 fiscal years, and the name of the Certified Public Accountant and the Auditors Opinion given thereby…….. 2.Financial Analysis in the past 5 fiscal years…………………..…… 184 3.Supervisors’ or Audit Committee’s Report in the most recent 191 fiscal year…...……………………………………………………….. 4. Consolidated Financial Statement in the most recent fiscal year... 192 5. Separate Financial Statement of the Parent Company and 192 Related Party in the most recent fiscal year and during the current fiscal year up to the date of printing of the annual report………………………….…………………………………….. 6.Financial difficulties of the Company and Related Party in the 192 most recent fiscal year and during the current fiscal year up to the date of printing of the annual report.…………………………………………………………..……. Part 7 Review of Financial Conditions, Operating Results, and Risk 193 Management……………………………………………………………. 1.Analysis of Financial Position……………………..………………… 19 3 2.Analysis of Financial Performance ………………..……………….. 19 5 3.Analysis of Cash Flow……………………………………………….. 197 4.The Effect upon Financial Operations of any major capital 199 expenditures during the most recent fiscal year………………..…. 5.Investment Policy in the most recent fiscal year, Main Causes for 199 profits or losses, Improvement Plans and the Investment Plans for the coming year……………………….…………………………. 6.Analysis of Risk Mangement…………………………………….….. 215 7.Other Important Matters……………………………...…………….. 217 Part 8 Special Disclosures……………………….. ………………………… 218 1.Information related to the Company’s Affiliates……………… 218 2.Private Placement Securities in the most recent fiscal year and during the current fiscal year up tothe date of printing of the annual report………………………………………………………….. 228 3.The Shares in the Company Held or Disposal of by subsidiaries in the most recent fiscal year and during the current fiscal year up to the date of printing of the annual report……...………………… 228 4.Other Disclosures…………………………………………..………… 228 9.Any of the situations listed in Article 36, paragraph3, subparagraph 2 of the Securities and Exchange Act of Taiwan, which might materially affect Shareholders’ Equity or the price of the Company Securities, has occurred during the most recent fiscal year or during the current fiscal year up to the date of printing of the annual report……………………….………….…… 228 ~4 ~ Part 1. Letter to Shareholders 1. Preface Dear shareholders, ladies, and gentlemen, Marketech International Corporation (MIC), established for 28 years, has been a listed company for 14 years. Over the years, we are committed to providing high-tech plant engineering solutions and equipment for automatic supply system. At the same time, we also provide OEM/ODM parts supply as well as localized and customized process and facility equipment. What’s more, we are dedicated to provide a comprehensive marketing platform as a sales representative. In 2016, MIC had attained operational success by achieving a record high net profit. MIC’s huge success in 2016 was marked by gaining a consolidated revenue of 18.651 billion dollars with a 3% growth compared to the revenue of 18 billion dollars the previous year. The operating income was 700 million dollars with an annual increase of 21%, and the net profit after tax was 511 million dollars with an annual growth of 11%. The consolidated earnings per share was 3.1. Our company had achieved a record high success in annual revenue, net profit, and earnings per share. In recent years, the semiconductor industry has been booming in China with frequent plant expansion news. According to the latest World Fab Forecast report of the Semiconductor Equipment and Materials International (SEMI), it is anticipated that there will be 62 newly built fab plants between 2017 and 2020 with 26 of those plants locating in China. Presently, out of 19 fab plants planning to be built within two years, 10 are to be built in China. SEMI’s latest year-end forecast announces that the revenue for the global semiconductor manufacturing equipment market is expected to grow 8.7% to 39.7 billion dollars in 2016 and 9.3% to 43.4 billion US dollars. All the data and the market atmosphere tell us that the semiconductor industry is
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