2017 Business Report
Year Ended March 31, 2017

Creating the future

CMK CORPORATION
Securities Cord No : 6958

Message from the President

I would like to take this opportunity to express my gratitude to ourshareholders for the consistent support they have shown us over theyears. It is my pleasure to present the operating results for the 57th fiscal
year (from April 1, 2016 to March 31, 2017).
I ask for your continued understanding and further support in the years tocome.
June 2017

Takeo Takai

President and Chief Executive Officer

Financial Results for the Fiscal Year
Ended March 31, 2017
During the fiscal year under review, the Japanese
economy continued to stay on the path to moderate
recovery, reflecting a continued improvement in theemployment and income conditions, amid the standstillin consumer spending. However, the future outlook
remained uncertain due to concerns about downside
risks in the world economy, such as the slower
economic growth in China, the Brexit decision in the
United Kingdom and the policy trends of the new
government in the United States.
In this environment, the CMK Group saw a significant
increase in sales in products for automotive use in the
consolidated fiscal year under review, thanks to thetailwind of the increasing reliance of automobiles onelectronics as shown by the dissemination of advanced
driver assistance systems (ADAS). As a result,consolidated net sales increased 3.1% from theprevious fiscal year, to ¥75,370 million, despite adecline in sales in other products and the impact ofshrinking sales due to the stronger yen.
Operating income was ¥2,652 million, rising by a factorof 6.9 from the level a year ago thanks to higher net
sales and an improvement in income in all geographicalsegments, the result of reductions in fixed costs driven
1 CMK CORPORATION

by management rationalization in Japan, which theGroup has been pursuing since the previous fiscal year.
Ordinary income amounted to ¥2,628 million(compared with an operating loss of ¥628 million in theprevious fiscal year), mainly because of the posting of
foreign exchange gains. Profit attributable to owners ofparent came to ¥2,153 million (compared with a loss of¥8,122 million in the previous fiscal year).

Trends in the Automotive PWB Market
In CMK Corporation (hereinafter the “Company”),
products for automotive use make up approximately
70% of net sales, and sales of these products continue
to expand steadily. The Company views medium- tolong-term trends in the automotive printed circuit board
market as follows.
1. Increase in new car sales● New car sales have continued to rise since 2010.
● The market will continue to expand, backed bydemand from emerging countries, etc.

Interview with the President

2. Dissemination of next-generation vehicles due toresponse to environmental considerations● Fuel consumption regulations on automobiles tend
to be tightened in many countries including the EU
nations and the United States.
● Shift to next-generation vehicles such as PHV and
EV is expected.
3. D
 issemination of advanced driver assistancesystems (ADAS)● The dissemination of ADAS is expanding due to
growing needs for preventive safety and driving
support.
● ADAS will advance to autonomous driving in the
future.
As described above, we believe that the automotive
printed circuit board market will increasingly expand in the
future due to a rise in the load of printed circuit boards per
vehicle, in addition to increasing new car sales.
In addition, of the automotive printed circuit board market,
the market for high value-added products such as multilayer printed circuit boards and build-up printed circuitboards is expected to expand significantly. On top of that,high growth in the electrical control unit (ECU) market forengines and running and steering, an area where therequired reliability is particularly high even in automobiles,
is expected to continue. The Company will further expand
sales by establishing its competitive advantage in theareas of high value-added products and high reliability.

Increase in Production Capacity at Overseas Plants
Sales of products for automotive use of the Company
are steadily expanding, backed by the expansion of theautomotive printed circuit board market, and theutilization rate at its plants in Japan and overseas
remain high. In this environment, the Company ispromoting the “enhancement of production power” as
one of the priority measures in the medium-term
management plan and made capital investment toincrease the production capacity at a plant in Thailandby 30% in the fiscal year under review.
In the next fiscal year, we expect orders to increase
further mainly in products for automotive use.

CMK CORPORATION (THAILAND) CO., LTD.
Therefore, we plan to increase the production capacity
at the Thai plant by another 30%. We will also increase
the production capacity further at two plants in China tostrengthen our global production power. With thesecapacity increases, we will further solidify ourcompetitive advantage in the automotive printed circuitboard market where robust demand is expected andaim to expand sales toward the growth path.

Message to Shareholders
We regard profit distribution to shareholders as one of
the most important management policies, and the basic
policy is to pay stable dividends continuously, taking
into account the business performance and financial
conditions, etc. while ensuring internal reserves
necessary to strengthen our management practices
and develop business in the future.
In the fiscal year under review, we have decided to pay
the year-end dividends of ¥6.5 per share, given that
operating income, ordinary income and profit
attributable to owners of parent all increased as a resultof sales expansion and improved costs throughmanagement rationalization, etc.
We will continue to use all our ability to strengthen ourmanagement practices and further enhance ourcorporate value. We ask for your continued
understanding and further support.
CMK CORPORATION

2

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

Millions of Yen
FY 2015

FY 2016

FY 2017

FY 2017

April 1, 2014 - March 31, 2015

April 1, 2015 - March 31, 2016

April 1, 2016 - March 31, 2017

April 1, 2016 - March 31, 2017

73,73073,09875,370$689,696

641

381

2,652

24,267

Ordinary income (loss)

1,513

(628)

2,628

24,048

Profit (loss) attributable to owners of parent

1,178(8,122)

2,153

19,701

Net assets

59,65150,09051,549$471,714

Total assets

99,17590,504

93,748857,869

Net sales
Operating income

Yen

U.S. Dollars

Net income (loss) per share

19.99(137.21)

36.38

$0.33

Net assets per share

944.76786.33815.14

7.45

Operating income
Ordinary income (loss)
Profit (loss) attributable to owners of parent

Net sales

Net income (loss) per share
Net assets per share(Millions Yen)

(Millions Yen)

(Yen)

80,000

5,000

1,000

800
60,000600

0400

40,000-5,000200

20,0000

0

FY 2015

FY 2016

3 CMK CORPORATION

FY 2017-10,000

FY 2015

FY 2016

FY 2017-200

FY 2015

FY 2016

FY 2017

Sales Information (Consolidated)
Sales by application

FY 2017

FY 2016
AV equipment

1.3%

OthersAV equipment

Others

19.3%
Amusement

3.4%

1.0%

18.4%

Car electronics

Car electronics

68.8%

Digital still camera

3.5%

Amusement

70.6%

2.7%

Mobilecommunications

3.7%

Digital still camera

3.3%

Mobilecommunications

4.0%
Sales by type of PWB(Millions Yen)
80,00073,73022,032

Build-up PWBs
Multilayered PWBs
Double-sided PWBs
Others73,09820,70575,37021,86660,00029,61375,37073,73073,09844,573

43,62815,227

14,241

13,553

9,007

9,637

9,894

4,921

5,590

5,334

FY 2015

FY 2016

FY 2017

46,58831,92440,0000(Millions Yen)
80,000Japan
ChinaSoutheast Asia
EU & USA60,00027,02320,000

Sales by region

40,00015,371

14,136

9,304

8,643

FY 2015

FY 2016

14,291

20,0007,287

FY 20170

CMK CORPORATION

4Consolidated Financial Statements
Consolidated Balance Sheet
Thousands of
U.S. Dollars

Millions of Yen

FY 2017

FY 2016

FY 2017

FY 2017

As of
As of
As of
March 31, 2017 March 31, 2016 March 31, 2017

54,672

51,419 $500,292

Cash and deposits

22,671

21,582

207,457

Notes and accounts receivable - trade22,166

20,376

202,836

46

38

420

Merchandise and finished goods

3,273

3,904

29,950Work in process

3,408

3,046

31,185
16,736

Securities

Raw materials and supplies
Deferred tax assets
Other
Allowance for doubtful accounts
Non-current assets
Property, plant and equipment
Buildings and structures, net

1,829

1,534

Current liabilities

24,99022,704 $228,678

11,543

10,088105,627

Short-term loans payable

5,407

5,476

49,478Current portion of bonds

560

500

5,124

Accounts payable - other

5,435

4,345

49,734

Lease obligations

419

294

3,834

Income taxes payable

323

103

2,955

Deferred tax liabilities

―

0

―

Provision for bonuses

374

165

3,422

Allowance for restructuring

131

1,110

1,198

70

22

640

1,242

948

11,365

(36)

(34)

(329)

794

617

7,265

Non-current liabilities

17,20817,709157,467

38,98438,953356,734

Bonds payable

6,960

7,250

63,68932,09633,306

293,704

Long-term loans payable

8,468

9,179

77,48993,521

Lease obligations

631

475

5,774

Deferred tax liabilities

912

564

8,345

Net defined benefit liability

43

44

393

Asset retirement obligations

165

162

1,509

10,22010,970Other

11,026

11,597

100,896

Tools, furniture and fixtures, net

1,098

1,153

10,047

Land

8,288

9,063

75,841

Construction in progress

1,462

520

13,378

Total liabilities

Intangible assets

421

587

3,852

Net assets

Goodwill

226

265

2,068

195

321

1,784

Investments and other assets

6,466

5,059

59,169Investment securities

3,390

2,661

31,021

832

183

7,613

1

0

9
20,872

Net defined benefit asset
Deferred tax assets
Other
Allowance for doubtful accounts
Deferred assets
Bond issuance cost
Total assets

5 CMK CORPORATION

FY 2017

Notes and accounts payable - trade

Machinery, equipment, and vehicles, net

Other

FY 2016

As of
As of
As of
March 31, 2017 March 31, 2016 March 31, 2017

Liabilities

AssetsCurrent assets

Thousands of
U.S. Dollars

Millions of Yen

2,281

2,260

(38)

(46)

(347)

91

131

832

91

131

832

93,74890,504

857,869

Other

27

33

247

42,19940,413

386,154

Shareholder’s equity

45,57543,422

417,047

Capital stock

22,30622,306204,117

Capital surplus

16,62822,063

152,159Retained earnings

9,773

2,185

89,430Treasury shares(3,133)(3,132)(28,669)

Accumulated other comprehensive income

2,679

3,127

24,515

Valuation difference on available-for-sale securities

886

359

8,107

Deferred gains or losses on hedges

(0)

0

(0)

Foreign currency translation adjustment

1,561

2,939

14,284

232

(170)

2,122

Non-controlling interests

Remeasurements of defined benefit plans

3,294

3,540

30,142

Total net assets

51,54950,090471,714

Total liabilities and net assets

93,74890,504

857,869

Consolidated Statement of Income

Consolidated Statement of Cash Flows
Thousands of
U.S. Dollars

Millions of Yen

FY 2017

FY 2016

Millions of Yen

FY 2017

FY 2017

FY 2016

FY 2017

Cash flows from operating activities

5,226

5,210

$47,822

Cash flows from investing activities(3,159)(1,579)(28,907)

Cash flows from financing activities

(426)

1,300

(3,898)

Effect of exchange rate change on cash and cash equivalents

(552)

(512)

(5,051)

Net increase (decrease) in cash and cash equivalents

1,088

4,418

9,956

Cash and cash equivalents at beginning of period

21,582

17,164

197,492

Cash and cash equivalents at end of period

22,671

21,582

207,457

For the year
For the year
For the year
ended
ended
ended
March 31, 2017 March 31, 2016 March 31, 2017

Net sales

75,37073,098 $689,696

Cost of sales

64,99864,912594,784

Gross profit

10,372

8,186

94,912

Selling, general, and administrative expenses

7,720

7,804

70,644

Operating income

2,652

381

24,267

Non-operating income

621

585

5,682

Non-operating expenses

644

1,595

5,893

Ordinary income (loss)

2,628

(628)

24,048Extraordinary income

388

171

3,550

Extraordinary losses

390

7,422

3,568

2,627

(7,879)24,039

Income taxes - current

331

169

3,028

Income taxes - deferred

4

28

36

Profit (loss) before income taxes

2,291(8,077)

20,964

Profit attributable to non-controlling interests

Profit (loss)

137

44

1,253

Profit (loss) attributable to owners of parent

2,153(8,122)

19,701Thousands of
U.S. Dollars

For the year
For the year
For the year
ended
ended
ended
March 31, 2017 March 31, 2016 March 31, 2017

CMK CORPORATION

6

Consolidated Financial Statements
Consolidated Statement of changes in Equity(FY 2016: April 1, 2016 - March 31, 2017) (Unit: Thousands of U.S. Dollars/Millions of Yen)

Shareholder's equity

Balance at beginning of period

Capital stock

Capital surplus

204,117

201,894

22,06319,994

2,185(49,734)(5,435)49,734
19,701

22,306

Retained earnings

Total shareholder’sequityTreasury shares(28,660)(3,132)

397,346

43,422

5,435

―

―

2,153

19,701

2,153

Change of item during period
Deficit disposition
Profit (loss) attributable to ownersof parent
Purchase of treasury shares

(0)

(0)

(0)

(0)

Net Charges of items other thanshareholder’s equity
Total change of item during period
Balance at end of period――(49,734)(5,435)69,436

7,588

(0)

(0)

19,701

2,153

204,117

22,306

152,159

16,62889,4309,773(28,669)(3,133)417,047

45,575

Accumulated other comprehensive income
Valuation difference on Deferred gains
Foreign
Total accumulated Non controlling Total net assets
Remeasurements ofinterests
available-for saleor losses on currency translation
other comprehendefined benefit planssecurities
hedgesadjustment
sive income
Balance at beginning of period

3,285

359

0

0

26,894

2,939(1,555)(170) 28,614

3,127

32,3933,540

458,363

50,090――19,701

2,153

(0)

(0)

(6,341)(693)

Change of item during period
Deficit disposition
Profit (loss) attributable to ownersof parent
Purchase of treasury shares
Net Charges of items other thanshareholder’s equity

4,822

527

(0)

(0) (12,609)(1,378)

3,687

403

Total change of item during period

4,822

527

(0)

(0) (12,609)(1,378)

3,687

403

(4,090)(447)(2,251)(246)

13,351

1,459

Balance at end of period

8,107

886

(0)

(0) 14,284

1,561

2,122

232

24,5152,679

30,142

3,294

471,71451,5497 CMK CORPORATION(4,090)(447)(2,251)(246)

MK
TOPICS

Automotive PWB Technology

ADAS-responsive automotive rigid-flex printed circuit board technology
As advanced driver assistance systems (ADAS) have become
widely available, the automobile society has become moreconvenient.
In addition, the development of systems for the practical useof autonomous driving has also been accelerating rapidly inrecent years, and printed circuit boards are playing animportant role in sensors, communication equipment andactuator control ECU that are used in these systems.
In particular, in sensor devices such as millimeter-wave
radars, cameras, laser radars (LiDAR), infrared light andsonars, the load per vehicle is expected to increase further.
In the (57th) fiscal year under review, we have commenced
the high-volume production of rigid-flex printed circuit boards
for in-vehicle camera modules that have become morereliable as a vehicle-responsive sensing camera.
We will continue to increase the production of sensor circuitboards, including control circuit boards, for millimeter-wave
radars and cameras by vigorously promoting the development
and improvement of printed circuit boards used for ADAS andthe autonomous driving technologies.

Circuit board formillimeter-wave radars

Actual results and forecast for sales of products for automotive use(Unit: 100 million yen)

600

581

580

Camera module RF circuit board

560
540

531

520
500

502

480
460

FY2016/3

FY2017/3

FY2018/3 (forecast)

CMK CORPORATION

8

Corporate Data
(As of March 31, 2017)

Name of listed company
Date of establishment
CapitalAddress of head office
Number of employees

CMK CORPORATION(Securities code no.: 6958)
February 25, 1961
¥22,306,203,140
5-1 Nishishinjuku 6-chome,
Shinjuku-ku, Tokyo, Japan
1,178 (Group total 4,512)

Primary Consolidated SubsidiariesJapan
CMK Products Corporation
CMK Finance Corporation

Overseas

Executives (as of September 1, 2017)

CMK ASIA (PTE.) LTD.

Board of Directors
President and Chief
Executive Officer

Takeo Takai

Director and Executive
Vice President

Takahiro Nakayama

Director and Executive
Managing Officer

Akira Kurosawa

CMKC (HK) LIMITED

Director and Executive
Managing Officer

Eizo Shibata

CMKC (SHENZHEN). LTD.

Director and Executive
Officer

Akiharu Nakayama

Director and Executive
Officer

Hiroshi Hanaoka

Director and Executive
Officer

Isao Osawa

CMK ELECTRONICS (WUXI) CO., LTD.

Director

Tsuyoshi Ukyo

CMK EUROPE N.V.

Director

Yoshiaki Hasegawa

Board of Corporate Auditors
Standing Corporate
AuditorTakashi Ogasawara

Corporate Auditor

Fumio Haraguchi

Corporate Auditor

Yukio Otaka

Executive Officer

Yoshiaki Ishizaka

Executive Officer

Masanori Kawashima

Executive Officer

Satoru Takahashi

Executive Officers

9 CMK CORPORATIONCMK CORPORATION (THAILAND) CO.,LTD.

CMKC (DONG GUAN) LTD.

CMK AMERICA CORPORATION

Stock Information

Shareholders Memo

(As of March 31, 2017)

Total number of shares authorized
227,922,000
Total number of shares issued and outstanding 63,060,164
Number of shareholders
5,241
Share trading unit
100
Major shareholders (10 largest)
Shareholders

Investment in CMK
Number of shares held Percentage

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

September 30(thousands)(%)

Noboru Nakayama

5,529

8.8

Japan Trustee Services Bank, Ltd. (Trust account)

5,236

8.3

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

3,206

5.1

Date of record for
mid-yeardividends:

Mizuho Bank, LTD.

2,576

4.1

Notification
method:The Foundation for Technology Promotion of Electronic Circuit Board

2,500

4.0

The Dai-ichi Life Insurance Company, Limited

1,895

3.0

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

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

Transfer agent:

NOMURA PB NOMINEES LIMITEDOMNIBUS - MARGIN (CASHPB)

1,632

2.6

Mizuho Trust & Banking Co., Ltd.
1-2-1, Yaesu, Chuo-ku, Tokyo, Japan
Stock Transfer Agency Bussiness
Planning Department

Sumitomo Mitsui Banking Corporation

1,613

2.6

Contact address:

Japan Trustee Services Bank, Ltd. (Trust account 9)

1,397

2.2

Mizuho Trust & Banking Co., Ltd.
8-4 Izumi 2-chome, Suginami-ku,
Tokyo 168-8507
ふ 0120-288-324

Note: Although the Company holds 3,861 thousand shares of treasury stock, it is notincluded in the above list of major shareholders.

Shareholder Breakdown
Other firms

Individuals and others

12,045 thousand shares (19.1%)

Foreign companies and individuals

13,280 thousand shares (21.1%)

Total
63,060,164 shares

11,628 thousand shares (18.4%)
Securities firms
814 thousand shares (1.3%)

Financial institutions
25,290 thousand shares (40.1%)

CMK CORPORATION

10

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

http://www.cmk-corp.com