Securities Cord No : 6958

C r e a t i n gt h ef u t u r e

2014 Business Report
Year Ended March 31, 2014

CMK CORPORATION

Message from the President

On behalf of the Company, I would like to take this opportunity to express mygratitude to our shareholders for their support.
I was appointed President and Chief Executive Officer on April 1, 2014. I am
determined to do everything I can to accelerate the Company’s growth going
forward. I would be grateful for your continued support to us in the future.
It is my pleasure to deliver the Company’s 54th Financial Report (from April 1,2013 to March 31, 2014), and I hope that we will be able to continue to counton the understanding of our shareholders.
June 2014

Takeo Takai

President and CEO

Results for fiscal 2013
During fiscal 2013, the business environment
surrounding the Company was marked by continued
uncertainty in the global economy, given the clear
economic slowdown in China and emerging
economies. However, the Japanese economy staged
a gradual recovery, mainly reflecting higher demandon the back of the last-minute shopping spree
before the consumption tax hike, in addition to theeffects of the weaker yen and higher stock prices.
In this business environment, the CMK Group’s
sales of automobile-related products steadily roseyear on year. However, sales oftelecommunications-related equipment, products for
digital cameras and amusement equipment declined.
As a result, sales of build-up boards (high-densityspecification boards) that are mostly used in

1 CMK CORPORATION

equipment and products as described above
significantly declined year on year.
As a result, for the fiscal year under review, theGroup recorded net sales of 71,031 million yen on aconsolidated basis, a decline of 1,645 million yen or
down 2.3% year on year.
On the profit front, the Group positioned theimprovement of the Group’s overall earnings
structure as its most important issue and focused
mainly on reviewing the business structure,
improving productivity and reducing costs. The
effects of these measures became apparent in thesecond half of the fiscal year under review, but thiswas unable to offset the impact of lower sales on afull-year basis. As a result, operating loss stood at1,109 million yen (compared with an operating
income of 434 million yen for the previous fiscalyear) and ordinary loss came to 1,843 million yen

Interview with the President(compared with an ordinary income of 567 million
yen for the previous fiscal year).
The Group posted a net loss of 4,955 million yen(compared with a net income of 712 million yen forthe previous fiscal year). This reflected the recordingof extraordinary losses, such as businessrestructuring expenses of 1,649 million yen,including expenses for the closure of subsidiaries,
and the provision of an allowance for doubtful
accounts of 786 million yen in the overseas andChina regions.

Outlook and priorities
In fiscal 2014, trends in favor of the increasing
sophistication and diversification of electronics
equipment and the development of global production
structures and increasing requirements for lower
costs by customers are expected to accelerate.
Responding to this management environment, undera management policy of “Quality First,” the Company
will strive to improve its performance by sincerely
tackling the management issues described below.
[Improve the earnings structure]
The Group will aim to develop stable earnings
strength by positioning the improvement of theearnings structure of the overall Group as the mostimportant issue.
[Strengthen the ability to respond to changes in themanagement environment]
The Group will strive to further strengthen thecompetitiveness by providing quality, technologies,
costs and services that meet the market’s needs,
which will also enable the Group to improve its sales
structure.
[Transform the business structure]
The Group will work to optimize business structureand scale in its domestic operations by taking steps
such as focusing on the development of newbusiness sectors and new products. In its overseas
operations, it will seek to develop production
systems that are based in optimal locations from a
global viewpoint by expanding its production ability
to respond to growing demand.

Message to shareholders
The basic policy of the CMK Group with respect toreturning profits to shareholders is to distribute stabledividends while seeking to expand its operations andimprove retained earnings to maintain and strengthen
competitiveness. Unfortunately, the Group determined
to suspend dividend payments for the fiscal year underreview, as it was forced to record a substantial loss.
The Group is resolved to make its best effort to makeits operations profitable again on a fiscal year basis
and enhance corporate value by sincerely tackling thethree important issues described above. As we pursue
this course, we ask for the continued support andunderstanding of our shareholders.

CMK CORPORATION

2

Financial Highlights (Consolidated)
Millions of Yen
FY 2012FY 2013

Thousands of U.S. Dollars
FY 2014

FY 2014

April 1, 2011 - March 31, 2012

April 1, 2012 - March 31, 2013

April 1, 2013 - March 31, 2014

April 1, 2013 - March 31, 2014

80,56372,677

71,031$690,157

Operating income(loss)

757

434

(1,109)(10,775)

Ordinary income(loss)

346

567

(1,843)(17,907)

Net income(loss)(2,873)712(4,955)(48,144)

Net assets

55,82957,77356,966$553,497

Total assets

99,201

95,434

97,150943,937

Net sales

Yen

U.S. Dollars

Net income(loss) per share(48.92)

12.13(84.36)($0.82)

Net assets per share

900.50927.18907.408.82

Note: ‌U.S. Dollars amounts have been translated from Yen,for convenience only,at the rate of ¥102.92=$1, the Tokyo foreign exchange market rate as ofMarch 31.2014.

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

Net sales

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

(Millions Yen)

(Yen)

100,000

5,000

1,000
800

80,0002,500
600

60,0000400

40,000200-2,50020,00000

FY 2012FY 2013

3 CMK CORPORATION

FY 2014-5,000FY 2012FY 2013

FY 2014-200

FY 2012FY 2013

FY 2014

Sales Information (Consolidated)
Sales by application

FY 2014

FY 2013

AV equipment

2.8%Others
AVequipment

Others

18.8%
Amusement

3.7%
MobileCar electronics

61.5%

communications

5.4%

17.8%

2.5%
Amusement

2.7%

Car electronics

68.8%

Mobilecommunications

2.8%

Digital still camera

7.8%

Digital still camera

5.4%
Sales by type of PWB(Millions Yen)
100,000

80,000

Build-up PWBs and Package Substrates
Multilayered PWBs
Double-sided PWBs
Others80,563
26,43972,677
23,208

Sales by region(Millions Yen)
100,000

80,00071,03180,56357,31572,67749,48019,60860,000Japan
ChinaSoutheast Asia
EU & USA60,00024,12524,452

27,31640,00040,00016,88220,00013,117071,03144,002

FY 2012

15,79815,987

9,219

8,120

FY 2013

FY 201420,0000

14,253

14,723

12,822

5,598
2,925

7,264
3,109

4,003

FY 2012FY 2013

FY 20148,772

CMK CORPORATION

4Consolidated Financial Statements
Consolidated Balance Sheet
Thousands ofU.S. Dollars

Millions of Yen

FY 2014

FY 2013

FY 2014

FY 2014

As ofAs of
As ofMarch 31, 2014 March 31, 2013 March 31, 2014

Cash and deposits
Notes and accounts receivable

50,15020,91949,444 $487,271
20,906203,254

20,037

19,810

194,6854544437

Merchandise and finished goods

2,978

3,010

28,935Work in process

3,429

2,421

33,317

Raw materials and supplies

1,536

1,301

14,924Marketable securities

FY 2013

FY 2014

As ofAs of
As ofMarch 31, 2014 March 31, 2013 March 31, 2014

(Liabilities)(Assets)
Current assets

Thousands ofU.S. Dollars

Millions of Yen

Current liabilities

26,74730,156 $259,881

Notes and accounts payable

9,659

8,611

93,849

Short-term borrowings

9,035

15,08487,786

Trade payable

4,929

4,669

47,891

Income taxes payable

164

170

1,593

Allowance for employee bonuses

191

2101,855

Provision for loss on order received

―

97―

1,783

308

17,324

Allowance for restructuring

Deferred income taxes

183

193

1,778

982

1,002

9,541

Other current assets

1,939

1,799

18,839Fixed liabilities

13,436

7,504

130,547

Allowance for doubtful accounts
Fixed assets
Tangible fixed assets

Other current liabilities

(919)

(43)

(8,929)

Bonds

4,500

4,500

43,723

46,97245,946456,393Long-term debt

5,893

―

57,258386,610

Lease debt

2,025

2,162

19,675

Deferred tax liabilities

696

494

6,762

Allowance for employee retirement benefits

―

248―

Allowance for executive retirement benefits

76

68
2,283

39,79039,170

Buildings and structures

15,122

15,593

146,929

Machinery, equipment, and others

13,172

12,097

127,982Land

10,305

10,262

100,126

Construction in process

224

439

2,176

Other tangible fixed assets

965

775

9,376

Intangible fixed assets

659

587

6,403

(Net assets)

Goodwill

318

327

3,089

Shareholder's equity

Other intangible fixed assets

340

259

3,303

Investments and other assets

6,522

6,189

63,369Investments in securities2,879

2,873

27,973Net defined benefit assets

701

―

6,811

Deferred income taxes

25

28

242

2,968

3,346

28,837

(53)

(58)

(514)

28

42

272

28

42

272

97,15095,434

943,937

Other
Allowance for doubtful accounts
Deferred assets
Bonds issue costs

Total assets

5 CMK CORPORATION

Net defined benefit liabilities

235

―

Other

77

91

748

40,184

37,660390,439

50,88855,991

494,442

Capital22,30622,306

216,731

Additional paid-in capital

22,06322,063

214,370

Retained earnings

10,021

15,12397,366

Treasury stock(3,502)(3,502)(34,026)

Accumulated other comprehensive income

2,416(1,523)

23,474

Valuation difference on available-for-sale securities

417

224

4,051

Total liabilities

Deferred hedge gains and losses
Foreign currency translation adjustment
Remeasurements of defined benefit plans

0(0)

0

1,799

(1,747)

17,479

199

―

1,933

Minority interests in subsidiaries

3,661

3,306

35,571

Total net assets

56,966

57,773

553,497

Total liabilities and net assets

97,15095,434

943,937

Consolidated Statement of Income

Consolidated Statement of Cash FlowsThousands ofU.S. Dollars

Millions of Yen

FY 2014

FY 2013

FY 2014

FY 2014

FY 2013

FY 2014

Cash flows from operating activities

2,246

8,871

$21,822

Cash flows from investing activities(2,465)(4,046)(23,950)

Cash flows from financing activities(1,380)(3,964)(13,408)

Effect of exchange-rate changes on cash and cash equivalents

1,604

750

$15,584

Net increase (decrease) in cash and cash equivalents

5

1,610

$48

Cash and cash equivalents at beginning of year

20,888

Increase (decrease) in cash and cash equivalents
resulting from change of scope of consolidation

26

Cash and cash equivalents at end of year

20,919For the year
For the year
For the year
ended
ended
ended
March 31, 2014 March 31, 2013 March 31, 2014

Net sales

71,031

72,677 $690,157

Cost of sales

64,60464,668 $627,710

Gross profit

6,427

8,008

$62,446

Selling, general, and administrative expenses

7,536

7,574

$73,221

Operating income(loss)(1,109)Non-operating income

497

1,184

$4,828Non-operating expenses

1,231

1,050

$11,960

Ordinary income(loss)(1,843)Extraordinary income

245

743

$2,380Extraordinary losses

2,935

192

$28,517

Net income(loss) before taxes and other adjustments(4,534)

Corporate, residence, and enterprise taxes

335

299

$3,254

Corporate, taxes and other adjustments

25

10$242

Net income(loss) before minority interests(4,894)

Gains on minority interests in subsidiaries

60

Net income(loss)(4,955)434 ($10,775)

567 ($17,907)

1,117 ($44,053)

Thousands ofU.S. Dollars

Millions of Yen

For the year
For the year
For the year
ended
ended
ended
March 31, 2014 March 31, 2013 March 31, 2014

19,278 $202,953―$25220,888 $203,254

807 ($47,551)
94

$582

712 ($48,144)

CMK CORPORATION

6Consolidated Financial Statements
Consolidated Statement of Shareholder’s Equity(FY 2013: April 1, 2013 - March 31, 2014) (Unit: Thousands of U.S. Dollars/Millions of Yen)

Shareholder's equity
CapitalBalance at beginning of year

$216,731

22,306

Additional paid -in
capitalRetained earnings

Treasury stock

Total shareholder'sequity$214,370$146,939($34,026)$544,024

22,063

15,123(3,502)

55,991

Change during this year
Dividend of surplus
Net loss(1,418)(146)(1,418)(146)(48,144)(4,955)(48,144)(4,955)(0)(0)

Purchase of treasury stock
Disposal of treasury stock

(0)

(0)

(0)

(0)

000

0

(Net)change during this year in accounts
other than shareholder's equity
Total change during this year
Balance at end of year――――

(49,572)(5,102)(0)(0)(49,572)(5,102)

216,731

22,306214,370

22,06397,366

10,021(34,026)(3,502)494,442

50,888

Accumulated other comprehensive income
Valuation difference on Deferred hedge
Foreign
Total accumulated
Remeasurements ofavailable-for salegains andcurrency translation
other comprehendefined benefit planssecurities
lossesadjustment
sive income
Balance at beginning of year

$2,176224(0)(0) ($16,974)(1,747)―― ($14,797)

Minority
interests insubsidiaries(1,523) $32,122

Total net assets

3,306 $561,338

57,773

Change during this year
Dividend of surplus(1,418)(146)(48,144)(4,955)Purchase of treasury stock

(0)

(0)

Disposal of treasury stock00

Net loss(Net)change during this year in accounts
other than shareholder's equity

1,875

193

0

0

34,453

3,546

1,933

199

38,282

3,940

3,449

355

41,731

4,295

Total change during this year

1,875

193

0

0

34,453

3,546

1,933

199

38,282

3,940

3,449

355

(7,841)(807)

Balance at end of year

4,051

417

00

17,479

1,799

1,933

199

23,4742,416

35,571

3,661

553,497

56,966

7 CMK CORPORATION

Initiatives to produce thinner module boards
Mobile equipment, typically smartphones and tablet devices, has been improving in terms of performance andfunctionality with every year, and the pace of batteries adopting greater capacity and the increase in the number ofparts used in such equipment has been accelerating. Consequently, space within equipment for installing each part has
become more limited and needs for thinner and smaller printed wiring boards and other module parts have been rising.
Responding to these
Cross section view of four-layer model
Cross section view of six-layer modelneeds, the Company hascommenced initiatives to
produce thinner moduleboards and it is now
capable of mass
producing four-layer
module boards with aboard thickness of 0.2
Cross section photograph of the board
Cross section photograph of the board
mm and six-layer moduleboards with 0.28 mm.
In an effort to produce
thinner boards, a board
thickness of 0.2 mm even
0.28mmfor six-layer module
0.2mm
boards, the Company isstriving to develop moresophisticatedtechnologies.

Strengthening of the production of build-up boards in Thailand
CMK CORPORATION (THAILAND) CO., LTD. has been taking
steps to strengthen its production structure to respond to anincrease in the installation rate of build-up boards in theautomobile sector.
By expanding the production capacity of build-up boards, inaddition to double-sided printed wiring boards and multilayered
printed wiring boards, it will function as a production base thatcan deal with a wide range of products, including consumer
equipment, industrial equipment and automobiles.
On the technological front, it will respond to advances in thesophistication in any layer models, while it will strive to moveahead by always taking measures to improve the technologies.
In this way, it will aim to establish a position as a production
base that can deal with global demand in the ASEAN regionand other areas.

Plant in Thailand

CMK CORPORATION

8Corporate Data
(As of March 31, 2014)

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
763 (Group total 4,938)

Executives (as of June 26, 2014)

Primary Consolidated SubsidiariesJapan
CMK Mechanics Corporation
CMK Multi Corporation
CMK Finance Corporation
CMK Products Corporation

Board of Directors

CMK Kanbara Electronic Corporation Japan

Chairman andRepresentative Director

Noboru Nakayama

President and Chief
Executive Officer

Takeo Takai

Director and Executive
Vice President

Takahiro Nakayama

Director and Executive
Officer

Akiharu Nakayama

Director and Executive
Officer

Takaya Oguchi

Director and Executive
Officer

Hiroshi Hanaoka

CMKC (SHENZHEN). LTD.

Director and Executive
Officer

Akira Kurosawa

CMKC (DONG GUAN) LTD.

Director and Executive
Officer

Kenichi Urushiyama

CMK ELECTRONICS (WUXI) CO., LTD.

Board of Corporate Auditors

CMK ASIA (PTE.) LTD.
CMK CORPORATION (THAILAND) CO.,LTD.
CMKC (HONG KONG) LTD.

CMK EUROPE N.V.

Standing CorporateAuditor

Yutaka Ishii

Corporate Auditor

Hiroo Wakabayashi

Corporate Auditor

Shigeo Ichikawa

Executive Managing
OfficerTakeshi Ikeda

Executive Managing
Officer

Eizo Shibata

Executive Officer

Kazuhiro Ito

Executive Officer

Takashi Ogasawara

Executive Officers

9 CMK CORPORATION

Overseas

CMK AMERICA CORPORATION

Stock Information

Shareholders Memo

(As of March 31, 2014)

Total number of shares authorized
227,922,000
Total number of shares issued and outstanding 63,060,164
Number of shareholders
8,454
Share trading unit100Major shareholders (10 largest)
Shareholders

Investment in CMK
Number of shares held Percentage(thousands)(%)

Takahiro Nakayama

2,835

4.5

Mizuho 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

1,895

3.0

Akiharu Nakayama

1,886

3.0

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

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

1,619

2.6Sumitomo Mitsui Banking Corporation

1,613

2.6

Japan Trustee Services Bank, Ltd. (Trust account)

1,463

2.3

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

1,457

2.3

Note: Although the Company holds 4,315 thousand shares of treasury stock, it is notincluded in the above list of major shareholders.

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.

Transfer agent:

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

Contact address:

Japan Securities Agents, Ltd.,
Agent Division,
8-4 Izumi 2-chome, Suginami-ku,
Tokyo 168-8620
ふ 0120-707-843

Shareholder Breakdown
Other firms

Individuals and others

12,498 thousand shares (19.8%)

24,554 thousand shares (39.0%)

Foreign companies and individuals
3,465 thousand shares (5.5%)

Total
63,060,164 shares

Securities firms
3,034 thousand shares(4.8%)

Financial institutions
19,507 thousand shares (30.9%)

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