Creating the future2011 Business Report
Year Ended March 31, 2011

CMK CORPORATION
Securities Code No.: 6958

To Our Shareholders

Message from the President
My name is Kuniaki Kanemoto, and I am now the president and CEO of CMK Corporation.
While continuing to face challenging business circumstances, we will seek to maintain the trustof all stakeholders in society, particularly our shareholders, in line with our policy of quality-firstmanagement.
We respectfully ask for the continued support and understanding of our shareholders.

June 2011

Kuniaki Kanemoto

President and CEO

Summary of results for fiscal 2010
During fiscal 2010, the Japanese economy showed
moderate recovery, led by growth in emerging
countries, particularly China. However, the economy
continued to face a challenging situation, given thestrong yen and surges in oil prices.
The electronic parts industry, in which the CMK Group
operates, continued to face challenging conditions withfalling sale prices due to intensifying global competition
and rising material prices.
In the business environment, the Group focused on
improving its results, using the global production andsales systems that were established following its
restructure. However, although sales in automobilerelated industries rose thanks to the economic stimulus
measures introduced by governments, the prices ofthin-screen televisions fell sharply, both in Japan andabroad, and demand for products for conventional
mobile phones was weak. As a result, consolidated net
sales in the fiscal year under review declined 3,047
1

million yen (3.4%) from the previous fiscal year, to87,023 million yen.
Looking at profits, the entire Group sought to cut costs
comprehensively and improve productivity. However,earnings worsened due to the decline in net sales, and
the Group posted an operating loss of 1,041 million yen(compared with an operating loss of 395 million yen forthe previous fiscal year). A foreign exchange
revaluation loss of 591 million yen was recorded due tothe strong yen. Consequently, ordinary loss stood at
1,991 million yen (compared with an ordinary loss of
777 million yen for the previous fiscal year).
Restructuring costs of 2,233 million yen, including costs
associated with withdrawal from the single-sided PWB
business in Malaysia, and compensation for damage of
802 million yen as a loss relating to claims for inferior
quality were posted as extraordinary losses. As aconsequence, the Group posted a net loss of 5,726
million yen (compared with a net loss of 2,340 million
yen for the previous fiscal year).

Outlook for fiscal 2011 and priorities
With the impact of the earthquake unclear, we expectthat the Group will continue to face challenging
management circumstances in fiscal 2011. However,
we anticipate increased demand with high growth inemerging countries and continued market growth
associated with the spread of digital home information
appliances, particularly smartphones, and thedevelopment of electric vehicles and eco-friendly
vehicles in the medium to long term as global pricecompetition and technology competition in themarkets, the Group promoted restructuring anddeveloped an overseas production system forproduction in the best locations. The plants of overseas
subsidiaries will do their best for quality management
and cost cutting. We will consolidate those operatingbases as the Group’s main production bases.

3 Enhancing high-value-added products
To improve profitability, we are placing priority on
enhancing the productivity and quality of andtechnologies for products, such as build-up package

electronics industry intensify.

substrates, which are compatible with high-value-

In the business environment, the Group will boldly

technologies in Japan and bolstering high volume

implement management reforms and focus on thefollowing three business challenges as our top
priorities.

❶ Quality-first management
We will reaffirm our quality-first policy and will further
enhance quality. We will respond to customers’
requests, offering competitive prices and shortening
lead times. To this end, we will bolster our production
and sales systems and develop an efficient global
production system, with products manufactured in thebest locations. We will pursue strategic and flexible
management. To overcome the challenging businessenvironment, we will concentrate our management
resources in growth fields and establish a profitableadded electronic devices. We are developing theseproduction systems at overseas production bases toensure that we meet worldwide customer demand.

Message for shareholders
The basic policy of the CMK Group with respect to thereturn of profits to its shareholders is to pay steady
dividends while maintaining a sound level of internal
reserves, to be used effectively to expand operations
and maintain and strengthen competitiveness. Because
the Group recorded substantial losses during the fiscal
year under review, it regrets to report that it did not pay
any dividends. We will concentrate on the three priority
challenges above to ensure that we post a net profit
next fiscal year and enhance our corporate value. We
ask for your continued support and understanding.

operating base.

2 Bolstering the overseas management system
To take advantage of increasing demand in global
2

Financial Highlights (Consolidated)
U.S. Dollars (Thousands)

Yen (Millions)

FY 2009

FY 2010

FY 2011

FY 2011

April 1, 2008 - March 31, 2009

April 1, 2009 - March 31, 2010

April 1, 2010 - March 31, 2011

April 1, 2010 - March 31, 2011

¥107,583¥90,070¥87,023$1,046,578

Operating income (loss)(2,633)(395)(1,041)(12,519)

Ordinary income (loss)(3,587)(777)(1,991)(23,944)

Net income (loss)(8,378)(2,340)(5,726)(68,863)

Net assets¥68,985¥65,986¥58,423$702,621

Total assets

129,044

124,140

113,433

1,364,197

Net income (loss) per share¥(138.94)¥(39.84)¥(97.48)$(1.17)

Net assets per share

1,123.42

1,069.80

945.68

11.37

Net sales

Notes: 1. U.S. Dollars amounts have been translated from Yen, for convenience only, at the rate of ¥83.15 = $1,
		 the Tokyo foreign exchange market rate as of March 31, 2011.
2. All Millions Yen and Thousands U.S. Dollars amounts are rounded to the nearest figure.

Net income (loss) per share
Net assets per share

Operating income (loss)
Ordinary income (loss)
Net income (loss)

Net sales(Millions Yen)

(Millions Yen)

(Yen)

120,000

8,000

1,200

6,000

1,000

100,000
4,000
80,000

800

2,000
0

600

-2,000400

60,00040,000-4,000200-6,00020,0000-8,0000

3

FY 2009

FY 2010

FY 2011-10,000

FY 2009

FY 2010

FY 2011-200

FY 2009

FY 2010

FY 2011

Sales Information (Consolidated)

l Sales by application

l Sales by type of PWB
Build-up PWBs and Package Substrates
28,075 yen (millions) (32.3%)

FY 2011Car electronics

50.0%

Multilayered PWBs
26,189 yen (millions) (30.1%)
Double-sided PWBs
18,974 yen (millions) (21.8%)
Others13,784 yen (millions) (15.8%)

Others28.1%
Build-up PWBs and Package Substrates
27,530 yen (millions) (30.6%)

FY 2010Multilayered PWBs
28,239 yen (millions) (31.3%)
Double-sided PWBs
17,751 yen (millions) (19.7%)
Others16,548 yen (millions) (18.4%)

AV equipment

Information
devicesl Sales by region

8.2%

Japan
62,352 yen (millions) (71.6%)

2.6%

Mobilecommunications

FY 2011

11.1%

China
14,509 yen (millions) (16.7%)
Southeast Asia
7,035 yen (millions) (8.1%)
Europe and the United States
3,126 yen (millions) (3.6%)

Japan
65,587 yen (millions) (72.8%)

FY 2010China
15,482 yen (millions) (17.2%)
Southeast Asia
6,845 yen (millions) (7.6%)
Europe and the United States
2,155 yen (millions) (2.4%)

4

Consolidated Financial Statementsl Consolidated Balance Sheet(Unit: Thousands of U.S. Dollars/Millions of yen)
U.S. Dollars
Yen (Millions)(Thousands)

U.S. Dollars(Thousands)

Yen (Millions)

FY 2011

FY 2010

FY 2011¥62,328¥65,267 $749,585

As of
As of
As of
March 31, 2011 March 31, 2010 March 31, 2011

(Assets)
Current assets

FY 2010

FY 2011¥31,317¥32,849 $376,632(Liabilities)
Current liabilities

Cash and deposits

26,38323,655317,294

Notes and accounts payable

11,582

15,005

139,290

Notes and accounts receivable

25,47930,894306,422

Short-term borrowings

10,855

8,756

130,547

Trade payables

69,957

Marketable securities

36

47

432

5,817

6,305

Merchandise and finished goods

4,238

3,948

50,968

Income taxes payable

177

384

2,128

Work in process

3,070

3,931

36,921

Allowance for employee bonuses

681

722

8,190

Raw materials and supplies

1,696

1,733

20,396

Provision for loss on order received

248

247

2,982

Deferred income taxes

376

222

4,521

Allowance for restructuring

726

414

8,731

Other current assets

1,059

847

12,736

1,229

1,012

14,780

(11)

(14)

(132)

Fixed liabilities

23,69225,304284,930

51,087

58,846614,395

Bonds

5,500

5,500

66,145

Allowance for doubtful accounts
Fixed assets

Other current liabilities

Tangible fixed assets

44,13350,932

530,763

Long-term debt

14,352

19,006

172,603

Buildings and structures

17,654

20,467

212,315

Lease debt

2,753

―

33,108

Machinery, equipment, and others

15,27019,223

183,644

Deferred tax liabilities

482

146

5,796

Land

10,336

10,328124,305

Allowance for employee retirement benefits

305

366

3,668

Construction in process

261

111

3,138

Allowance for executive retirement benefits

181

163

2,176

Other tangible fixed assets

610

800

7,336

Other

Intangible fixed assets

635

1,131

7,636

Total liabilities

Goodwill

348

716

4,185

(Net assets)
Shareholders' equity

Other intangible fixed assets

287

414

3,451

Investments and other assets

6,318

6,782

75,983

Investments in securities

3,391

3,602

40,781

Deferred income taxes

40

80

481

2,920

3,163

35,117

(34)

(63)

(408)

16

25

192

Valuation difference on available-for-sale securities

16

25

192

Deferred hedge gains and losses

Other
Allowance for doubtful accounts
Deferred tax assets
Bond issuing expenses

Capital113,433

124,140 1,364,197

121

1,419

58,153

661,563

58,33363,818

701,539

22,30622,306268,262

Additional paid-in capital

22,06322,063

265,339

17,466

22,950210,054

Treasury stock(3,502)(3,502)(42,116)(2,779)(971)(33,421)

164

370

1,972

Accumulated other comprehensive income

Minority interests in subsidiaries

Total assets

118
55,009Retained earnings

Foreign currency translation adjustment

5

FY 2011

As of
As of
As of
March 31, 2011 March 31, 2010 March 31, 2011

0

0

0

(2,944)(1,342)(35,405)

2,868

3,139

34,491
702,621

Total net assets

58,42365,986

Total liabilities and net assets

113,433

124,140 1,364,197

l Consolidated Statement of Operationsl Consolidated Statement of Cash Flows(Unit: Thousands of U.S. Dollars/Millions of yen)

(Unit: Thousands of U.S. Dollars/Millions of yen)

U.S. Dollars(Thousands)

Yen (Millions)

FY 2011

FY 2010

Net sales¥87,023¥90,070 $1,046,578

Cost of sales

80,09881,949963,295

Gross profit

6,925

8,120

83,283

Selling, general, and administrative expenses

7,966

8,516

95,802

Operating income (loss)(1,041)(395)(12,519)

Non-operating income

857

1,079

10,306

Non-operating expenses

1,807

1,461

21,731

Ordinary income (loss)(1,991)(777)(23,944)

Extraordinary income

146

182

1,755

Extraordinary losses

3,331

749

40,060Net income (loss) before taxes and other adjustments(5,175)(1,344)(62,236)

Corporate, residence, and enterprise taxes

174

619

2,092

Corporate taxes and other adjustments

361

197

4,341

FY 2011(5,711)―(68,683)

15

177

180

(5,726)(2,340)(68,863)

FY 2011

FY 2010

FY 2011

Cash flows from operating activities¥5,215¥(1,067)$62,717

Cash flows from investing activities(1,101)(1,798)(13,241)

Cash flows from financing activities(626)(4,623)(7,528)

Effect of exchange-rate changes on cash and cash equivalents

(731)

88

8,791

Net increase (decrease) in cash and cash equivalents

2,756(7,400)33,144

Cash and cash equivalents at beginning of year

23,63731,038284,269

Cash according to change within the range of connection
and amount of increase and decrease of cash equivalent

(28)

―

(336)

Cash and cash equivalents at end of year

26,365For the year ended For the year ended For the year ended
March 31, 2011
March 31, 2010
March 31, 2011

Net income before minority interests
Gains on minority Interests in subsidiaries
Net income (loss)

U.S. Dollars(Thousands)

Yen (Millions)

For the year ended For the year ended For the year ended
March 31, 2011
March 31, 2010
March 31, 201123,637 (317,077)

6

Consolidated Financial Statementsl Consolidated Statement of Shareholders' Equity (FY 2011: April 1, 2010 - March 31, 2011) (Unit: Thousands of U.S. Dollars/Millions of yen)
Shareholders' equity
Common stock
Balance as of March 31, 2010

$268,262¥22,306

Additional paid-in
capitalRetained earnings$265,339$276,007¥22,063¥22,950

Total shareholders'equityTreasury stock$(42,116)¥(3,502)$767,504¥63,818

Change during this consolidated fiscal year
Dividends from surplus(1,407)(117)(1,407)(117)

Net loss(68,863)(5,726)(68,863)(5,726)

4,317

359

(0)

Purchase of treasury stock
Change of range of connection

(0)

(0)

(0)

4,317

359

( Net) change during this consolidated
fiscal year in accounts other thanshareholders' equity
Total change during this consolidated
fiscal year
Balance as of March 31, 2011

―

―

―

―

(65,953)(5,484)(0)(0)(65,953)(5,484)

268,262

22,306265,339

22,063210,054

17,466(42,116)(3,502)(701,539)

58,333

Accumulated other comprehensive income
Valuation difference on
available-for-salesecurities
Balance as of March 31, 2010

$4,449¥370

Foreign
Total accumulated
currency translation other comprehensive
adjustment
incomeDeferred hedge
gains and losses$0¥0 $(16,134)¥(1,342) $(11,677)

Minorityshareholders'interests¥(971) $37,751

Total net assets¥3,139 $793,577¥65,986

Change during this consolidated fiscal year
Dividends from surplus(1,407)(117)

Net loss(68,863)(5,726)

Purchase of treasury stock
Change of range of connection( Net) change during this consolidated
fiscal year in accounts other thanshareholders' equity

7

(0)

(0)

4,317

359

(2,477)

(206)

0

0

(19,254)(1,601)(21,731)(1,807)(3,247)(270)(24,978)(2,077)

Total change during this consolidated
fiscal year

(2,477)

(206)

0

0

(19,254)(1,601)(21,731)(1,807)(3,247)(270)(90,944)(7,562)

Balance as of March 31, 2011

1,972

164

0

0

(35,405)(2,944)(33,421)(2,779)(34,491)

2,868

702,62158,423

CMK TOPICS

50 Years of CMKCMK Corporation celebrated its 50th anniversary on February 25, 2011. Please allow me to express my heartfelt gratitude for yoursupport. As a leading manufacturer of printed wiring boards, we will continue to develop our operations and contribute to society.

Founding of Chuo Meiban Kogyo Co., Ltd.
Noboru Nakayama, the Chairman of theCompany, founded Chuo Meiban Kogyo Co.,
Ltd. in 1961. In the beginning, there were
only five employees manufacturing brass
and aluminum nameplates. Riding the waveof the development of the electronics
industry, Chuo Meiban Kogyo began to
manufacture printed wiring boards.

First Use of a CAD System in the Industry
To promote efficiency in circuit design, Chuo
Meiban Kogyo pioneered the use of a CAD
system in Japan in 1975. All types ofmanufacturers, from auto manufacturers toapparel manufacturers, visited Chuo Meiban
Kogyo to see the epoch-making system.

Age of High Quality and Highly Complex Products
The Company achieved the largest market share for singlesided PWBs in 1983 and the largest market share fordouble-sided PWBs in 1985, and began manufacturing
more sophisticated products.
CMK Corporation made a full-scale entry into the multilayer
PWB market in 1989 and into the build-up PWB market in
1995, and established itself as a comprehensive
manufacturer of PWBs.
CMK Corporation undertakes research on a daily basis todevelop new technologies.
CARFT®, a carmounted RF board

Conventional
productZERO
WARP
ZEROWARP®, curbing warping and deflection to a minimum

The home office in 1970

Establishment of an Overseas Base
Chuo Meiban Kogyo established CMK
SINGAPORE (PTE.) LTD. (now CMK ASIA
(PTE.) LTD.) as its first overseas production
base in 1980. The CMK Group launched its
global production and sales systems, whichhave a large number of overseas production
and sales bases.

G Station Factory
Business Expansion and Construction of
Massive Plants
In response to increasing demand, Chuo
Meiban Kogyo opened Saitama Factory(now called SE Center) in 1967 and becamea specialized manufacturer of printed wiringboards in 1970. Chuo Meiban Kogyo built
Gunma Factory (now called G Station
Factory), equipped with an 80-meter
automatic line, in 1974.

Going Public
While expanding its operations, CMK
Corporation was listed on the Second
Section of the Tokyo Stock Exchange in1985 and became the only PWB specialized
manufacturer listed on the First Section of
the Tokyo Stock Exchange in 1989.
Expansion of the Domestic Production
SystemIn response to increasing domestic demand,
CMK Corporation built the Kiban Center
Factory in 1986 and the Niigata Satellite
Factory, with a site area of over 100,000 m²,
in 1990. CMK Corporation invested indomestic production subsidiaries to increase
the number of domestic production bases
making highly complex products.

Enhancement of the Global Production andSales Systems
In response to requests from customers
undertaking production shifts to Asia at anever-increasing pace, CMK Corporation
opened production bases in China in 2000
and 2001 and a production base in Thailand
in 2006. The Company opened a sales basein North America in 2007 to further enhance
its global production and sales systems.

CMK Electronics (Wuxi) Co., Ltd.

CMKS (MALAYSIA) SDN. BHD.
(established in 1989)
Corporate Name Changed to CMKCorporation
Chuo Meiban Kogyo changed its name to
CMK Corporation in 1984.

Niigata Satellite Factory

CMK CORPORATION (THAILAND) CO., LTD.

8

Corporate Data (As of March 31, 2011)l Name of listed company

CMK CORPORATIONl Primary Consolidated Subsidiaries(Securities code no.: 6958)

l Date of establishmentl Capitall Address of head officel Number of employees

February 25, 1961

Japan

¥22,306,203,140l CMK Mechanics Corporation

5-1 Nishishinjuku 6-chome,l CMK Multi Corporation

Shinjuku-ku, Tokyo, Japanl CMK Niigata Corporation

1,009 (Group total 5,723)

l CMK Products Corporationl Management (as of June 29, 2011)
Directors

Chairman and
Representative Director

Noboru Nakayama

President and Chief
Kuniaki Kanemoto
Executive Officer
Representative Director Vice
President and Executive
Takeo Takai
Officer
Director Vice President andShigeo Araki
Executive Officer

Auditors

Executive Officers

9l CMK Finance Corporation

Managing Director andExecutive Officer

Sadanobu Kondo

Director and Executive
Officer

Kazuhiro Ito

Director and Executive
Officer

Akiharu Nakayama

Standing Auditor

Nobuo Akiyama

Auditor

Hiroo Wakabayashi

Auditor

Shigeo Ichikawa

Managing Executive officer

Hiroshi Nakano

Executive Officer

Takaya Oguchi

Executive Officer

Nobuyuki Kageyama

Executive Officer

Toshimi Kuroki

Executive Officer

Masashi Koike

Executive Officer

Kazuma Shiobara

Executive Officer

Takahiro Shirai

Executive Officer

Takahiro Nakayama

Executive Officer

Hiroshi Hanaoka

l Yamanashi Sanko Co., Ltd.
l CMK Kanbara Electronic Corporation Japan
Overseasl CMKC (Hong Kong) Ltd.
l CMKC (Dong Guan) Ltd.
l CMK Electronics (Wuxi) Co., Ltd.
l CMK EUROPE N.V.
l CMK ASIA (PTE.) LTD.
l CMK CORPORATION (THAILAND) CO.,LTD.
l CMK AMERICA CORPORATION

Stock Information (As of March 31, 2011)

Stockholder's Memol Total number of shares authorizedl Total number of shares issued and outstanding
l Number of shareholders
l Share trading unitl Major shareholders (10 largest)
Shareholders

227,922,000

Fiscal year:

April 1 through March 31of the following year

Regular general
meeting ofshareholders:

Held in June each year

Date of record for
end-of-year
dividends:

March 31

Date of record for
mid-yeardividends:

September 30

Notification
method:Electronic notification(company website at
http://www.cmk-corp.com).
If notification cannot be madeelectronically, it will be made using
the Nihon Keizai Shimbun.

Stock transfer
agent:

Japan Securities Agents, Ltd.
2-4 Kayabacho 1-chome,
Nihonbashi,
Chuo-ku, Tokyo, Japan

Contact address:

Japan Securities Agents, Ltd.,
Agent Division,
8-18 Shiohama 2-chome, Koto-ku,
Tokyo 137-8650
ふ 0120-707-843

63,060,164
8,064
100
Investment in CMK

Number of shares held Percentage(thousands)(%)

Japan Trustee Services Bank, Ltd. (Trust account)

6,345 10.1

Takahiro Nakayama

2,941

4.7

Mizuho Corporate Bank, Ltd.

2,576

4.1

The Foundation for Technology Promotion of Electronic Circuit Board

2,500

4.0

The Dai-ichi Mutual Life Insurance Company

2,495

4.0

The Master Trust Bank of Japan, Ltd. (Trust account)

2,195

3.5

Akiharu Nakayama

1,886

3.0

Panasonic Electric Works Co., Ltd.

1,860

3.0

Trust & Custody Services Bank, Ltd. as trustee for Hitachi
Chemical Co., Ltd.; retirement benefit trust accountre-entrusted by Mizuho Trust and Banking Co., Ltd.

1,822

2.9

Trust & Custody Services Bank, Ltd. as trustee for Tokyo
Tomin Bank, Ltd.; retirement benefit trust accountre-entrusted by Mizuho Trust and Banking Co., Ltd.

1,745

2.8

Note: Although the Company holds 4,313 thousand shares oftreasury stock, it is not included in the above list of major
shareholders.

l Shareholder Breakdown
Other firms

Individuals and others

13,317 thousand shares (21.1%)
Foreign companies and individuals

4,416 thousand shares (7.0%)

Securities firms

17,503 thousand shares (27.8%)

Total

63,060,164 shares
Financial institutions
26,673 thousand shares (42.3%)

1,149 thousand shares (1.8%)10

http://www.cmk-corp.com

43rd Floor, Shinjuku I-Land Tower Bldg., 6-5-1
Nishi-Shinjuku, Shinjuku-ku, Tokyo 163-1388, Japan
Tel.: +81-3-5323-0231 (main)