December 14,2018
CMK CORPORATION
Unapproved change relating to manufacturing process

We have launched an initial investigation of the issue (hereinafter referred to as “the Incident”) thatsome companies of CMK Group changed the manufacturing process without making applications forthe approval of such change to some of the customers, though we had agreed with the customers
that when the manufacturing process is changed we should make prior application to customers towhom our products are delivered.
Now, taking the incident seriously, we understand that what we should do first is to identify thecause of the Incident and take necessary measures to prevent recurrence. We have decided,
therefore, to put the investigations into the case to the hands of the neutral and independent
outside law firm in order to proceed with objective and fair investigations, clarify all the facts,
analyze the cause and work out measures to prevent recurrence accordingly. We expect the resultof investigations by the outside law firm will be released by the end of this fiscal year.
We deeply apologize to all concerned as well as our customers for all the inconvenience caused by
the Incident.

1. Summary of the Incident
We have made agreements with customers that when the manufacturing process already agreed byour customers has to be changed we need to get prior approval of the customers by making
applications for such change. However, we have been informed of the fact by internal and outside
persons that our manufacturing process had been changed without customers’ approval. Our new
management took the matter seriously and conducted an initial investigation from May throughJuly this year, involving lawyers. The investigation revealed that some companies in CMK Group
had changed the site of manufacturing process and/or used outsourcing for the products to bedelivered to some of our customers, without making applications for such change to get the approvalof such customers.
In response to the above result, we have taken possible measures to sort out the issue so far. Inview of the seriousness of the issue, however, we thought it necessary to proceed with an objective
and fair investigations by the outside experts in considering the measures to be taken to prevent therecurrence of the Incident, and asked the outside law firm to investigate into the Incident thisNovember. At the same time, we believe our company’s urgent mission is to devote ourselves
entirely to working on the Incident.
Products and our related sites relevant to the Incident identified at the moment are as follows

Content of the Incident (identified as of today):
Products

PWB
All of the products based on each customer’s specifications aredelivered to each customer by companies of CMK Group and usedby being equipped to the customer’s products.

Relatedsites

Japan: 2 sites
CMK Niigata Factory
CMK Kanbara Factory
Overseas: 3 sites
China

CMKC (DONG GUAN) LTD.

China

CMK ELECTRONICS(WUXI)LTD

Thailand CMK CORPORATION (THAILAND) CO.,LTD.
2.

Impact on products

In the internal investigation, we have inspected the products relevant to the Incident (hereinafterreferred to as “the Products”) following the regulations of our company but have not found any
specific problem that may cause concern over the quality of the Products so far.
We have explained to the customers to whom the Products had been delivered about the fact andthe investigated details identified so far and still keep in touch with them, consulting about what
actions should be taken further.

We will continue to have a discussion with our customers

regarding the issue of getting approvals for the change of manufacturing process and so forth.
3.

Impact on the financial results

As far as the impact of the Incident on our financial results of the fiscal year ended on March
2019 is concerned, we expect at the moment that the impact would be insignificant. However,
we will immediately make an announcement when it becomes clear that there will be asignificant impact on the results.
We sincerely apologize to our customers, stakeholders, investors and all others concerned for all
the inconvenience caused by the Incident.