Securities Cord No : 6958

C r e a t i n gt h e

f u t u r e

2015 Business Report
Year Ended March 31, 2015

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.
It is my pleasure to deliver the Companyʼs 55th Financial Report (from April 1,2014 to March 31, 2015).
I hope that we will be able to continue to count on the understanding andsupport of our shareholders.
June 2015

Takeo Takai

President and CEO

Results for fiscal 2014
During fiscal 2014, the business environment wasmarked by a continued economic recovery in the
United States, which drove the global economy, theprolonged crisis in Europe, and the economic
slowdown in China and emerging economies.
The Japanese economy recovered only gradually,reflecting the support of the economic and financial
policies of the government and the Bank of Japan.
Other influences were the change in theenvironment accompanying the rapid weakening of
the yen in the latter half of the fiscal year, as well as
the adverse effect of the consumption tax hike.
In this changing operating environment, the CMKGroup’s sales of automobile-related products were
adversely affected by domestic production
adjustments after the consumption tax hike, offset
by higher sales in North America. Overall, sales ofautomobile-related products remained robust. In
other fields, sales of telecommunications-related
equipment and products for amusement equipment

1 CMK CORPORATION

increased, and as a result, sales of build-up boards
that are mostly used in those products climbed.
Sales of prototypes also rose.
As a result, for the fiscal year under review, theGroup recorded net sales of 73,730 million yen on aconsolidated bases, an increase of 2,698 million
yen, or 3.8% year on year.
On the profit front, operating income stood at 641
million yen (compared with an operating loss of
1,109 million yen for the previous fiscal year),reflecting an improvement in earnings at overseas
consolidated subsidiaries and the effect of businessrestructuring through mergers of domestic
consolidated subsidiaries.
Ordinary income came to 1,513 million yen(compared with an ordinary loss of 1,843 million yen
for the previous fiscal year) partly due to foreignexchange gains of 752 million yen associated withthe weaker yen.
The Group posted a net income of 1,178 million yen(compared with a net loss of 4,955 million yen forthe previous fiscal year), reflecting extraordinary
income, including a gain on the sale of shares ofInterview with the President

overseas consolidated subsidiaries of 619 million
yen.

Outlook and priorities
In the printed wiring board industry, the penetrationlevel of safety equipment for automobiles andautomobile electric equipment systems, especiallyenvironmentally friendly products, is expected toincrease. Meanwhile, demand is expected to growfor telecommunications-related equipment, including
smartphones and tablets. Accordingly, the market is
set to continue growing. However, the operating
environment surrounding the Company remains
uncertain, reflecting intensifying price competition
and an expected increase in demand for quality.
Responding to this management environment, undera management policy emphasizing quality and theability to control costs, the Company will address thebusiness challenges described below in line with themedium-term management policies—a shift from theconsolidation of operating foundations to a growthpath, and the establishment of competitive
advantage in the in-vehicle board industry—set out inits medium-term management plan announced on
May 25, 2015.
[Improve the earnings structure]
The Company will endeavor to improve earnings byachieving stable production through enhanced
production management, improving production
efficiency through a review of production units, andpromoting global integrated purchasing, thereby
strengthening its ability to control costs and pricecompetitiveness.
[Strengthen the ability to respond to changes in the
management environment]
The Company will work to develop earnings strengthby achieving consistent quality at all domestic andoverseas production bases through the promotion of
automation in its manufacture and inspection

processes and the transfer of domestic production
systems to overseas bases and will strive tostrengthen its competitiveness to respond to theneeds of markets and customers.
[Transform the business structure]
In domestic operations, in October 2014, theCompany merged with four subsidiaries andconsolidated management resources to streamline
operations and human resources management. The
CMK Group will continue to promote businessrestructuring, and will work to optimize businessstructure and scale by taking steps such ascommercializing new products and developing new
business sectors.
In its overseas operations, the Company will seek todevelop production systems that are based in
optimal locations from a global viewpoint by
expanding its production ability to respond to
growing demand in overseas markets.

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. In the fiscal year under review, while
the economy recovered, the business environment
remained challenging, as described above. However,we were able to post a net profit in the full year.
Following the Group’s basic policy, we would like to
distribute stable dividends to our shareholders as far as
possible and will distribute 5 yen per share as a yearend dividend for the fiscal year under review.
The Group is resolved to make its best effort to achieve
stable earnings and enhance corporate value by
sincerely tackling the business challenges describedabove. As we pursue this course, we ask for thecontinued support and understanding of ourshareholders.

CMK CORPORATION

2

Financial Highlights (Consolidated)
Millions of Yen
FY 2013

FY 2014

Thousands of U.S. Dollars
FY 2015

FY 2015

April 1, 2012 - March 31, 2013

April 1, 2013 - March 31, 2014

April 1, 2014 - March 31, 2015

April 1, 2014 - March 31, 2015

72,677

71,03173,730$613,037

Operating income(loss)

434(1,109)

641

5,329

Ordinary income(loss)

567(1,843)

1,513

12,580Net income(loss)

712(4,955)

1,178

9,794

Net assets

57,77356,96659,651$495,975

Total assets

95,434

97,15099,175

824,602

Net sales

Yen

U.S. Dollars

Net income(loss) per share

12.13(84.36)

19.99

$166

Net assets per share

927.18907.40944.76

7,855

Note: ‌U.S. Dollars amounts have been translated from Yen, for convenience only, at the rate of ¥120.27=$1, the Tokyo foreign exchange market rate as ofMarch 31. 2015.

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

40,000200-2,50020,0000

0

FY 2013

FY 2014

3 CMK CORPORATION

FY 2015-5,000FY 2013

FY 2014

FY 2015-200

FY 2013

FY 2014

FY 2015

Sales Information (Consolidated)
Sales by application

FY 2015

FY 2014
AV equipment

2.5%

OthersOthersAVequipment

17.8%
5.4%

Car electronics

68.8%

Mobilecommunications

2.8%

19.6%

2.0%

Digital still camera

Digitalstill camera

65.9%

3.7%

Amusement

2.7%

Car electronics

Mobilecommunications

4.2%

Amusement

4.6%
Sales by type of PWB(Millions Yen)
80,00072,677
23,208

Build-up PWBs and Package Substrates
Multilayered PWBs
Double-sided PWBs
Others71,031
19,60873,73072,67749,48071,03144,00273,73044,57360,00024,452

27,31627,02340,000

0

Japan
China
Southeast Asia
EU & USA(Millions Yen)
80,00022,03260,00020,000

Sales by region

40,00015,79815,987

15,371

9,219

8,120

9,304

FY 2013

FY 2014

FY 2015

20,00012,8227,264
014,253

8,772

15,227

9,007

3,109

4,003

4,921

FY 2013

FY 2014

FY 2015

CMK CORPORATION

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

Millions of Yen

FY 2015

FY 2014

FY 2015

FY 2015

As of
As of
As of
March 31, 2015 March 31, 2014 March 31, 2015

FY 2014

FY 2015

As of
As of
As of
March 31, 2015 March 31, 2014 March 31, 2015

(Liabilities)(Assets)
Current assets

Thousands of
U.S. Dollars

Millions of Yen

50,20150,150 $417,402

Current liabilities

32,463

26,747 $269,917

Notes and accounts payable

12,441

9,659

Short-term borrowings

8,673

9,035

72,112Current portion of bonds

4,500

―

37,415Trade payable

3,293

4,493

27,380

Lease debt

2,430

436

20,204103,442

Cash and deposits

14,564

20,919121,094

Notes and accounts receivable

21,552

20,037179,196

Marketable securities

2,647

45

22,008Merchandise and finished goods

4,441

2,978

36,925Work in process

3,148

3,429

26,174

Income taxes payable

74

164

615

Raw materials and supplies

1,659

1,536

13,793

Allowance for employee bonuses

262

191

2,178

21

183

174

Allowance for restructuring

207

1,783

1,721

Other current liabilities

579

982

4,814

7,060

13,43658,701

―

4,500

―

5,527

5,893

45,954

Lease debt

428

2,025

3,558

Deferred tax liabilities

872

696

7,250

Deferred income taxes
Other current assets

2,337

1,939

19,431

Allowance for doubtful accounts

(170)

(919)

(1,413)

48,95946,972

407,075

Tangible fixed assets

41,096

39,790341,697

Buildings and structures

14,501

15,122

120,570

Machinery, equipment, and others

14,985

13,172

124,594

Allowance for executive retirement benefits

―

7

―

Land

9,972

10,30582,913Net defined benefit liabilities

44

235

365

511

224

4,248

Asset retirement obligations

160

―

1,330

Other

27

77

224

39,52340,184

328,618

51,84150,888431,038

Fixed assets

Construction in process
Other tangible fixed assets

Fixed liabilities
Bonds
Long-term debt

1,125

965

9,353

Intangible fixed assets

748

659

6,219

Goodwill

301

318

2,502

Other intangible fixed assets

446

340

3,708

Capital22,30622,306

185,466

Investments and other assets

7,115

6,522

59,158Additional paid-in capital

22,06322,063

183,445

Investments in securities

3,380

2,879

28,103Retained earnings

10,603

10,021

88,159Net defined benefit assets

495

701

4,115

Treasury stock(3,132)(3,502)(26,041)

8

25

66

Accumulated other comprehensive income

4,088

2,416

33,990

Valuation difference on available-for-sale securities

887

417

7,375

0

0

0

2,915

1,799

24,237

Deferred income taxes
Other
Allowance for doubtful accounts
Deferred assets
Bonds issue costs

Total assets

5 CMK CORPORATION

3,278

2,968

27,255

(48)

(53)

(399)

13

28

108

13

28

108

99,175

97,150824,602

Total liabilities(Net assets)
Shareholder's equity

Deferred hedge gains and losses
Foreign currency translation adjustment

286

199

2,377

Minority interests in subsidiaries

Remeasurements of defined benefit plans

3,721

3,661

30,938

Total net assets

59,651

56,966495,975

Total liabilities and net assets

99,175

97,150824,602

Consolidated Statement of Income

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

Millions of Yen

FY 2015

FY 2014

FY 2015

FY 2015

FY 2014

FY 2015

Cash flows from operating activities

1,937

2,246

$16,105

Cash flows from investing activities(2,789)(2,465) ($23,189)

Cash flows from financing activities(1,438)(1,380) ($11,956)

Effect of exchange-rate changes on cash and cash equivalents(1,465)

1,604 ($12,180)

Net increase (decrease) in cash and cash equivalents(3,754)5 ($31,213)

Cash and cash equivalents at beginning of year

20,91920,888 $173,933

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

Cash and cash equivalents at end of year

17,164

For the year
For the year
For the year
ended
ended
ended
March 31, 2015 March 31, 2014 March 31, 2015

Net sales

73,73071,031 $613,037

Cost of sales

65,40364,604 $543,801

Gross profit

8,326

6,427

$69,227

Selling, general, and administrative expenses

7,685

7,536

$63,897

Operating income(loss)

641(1,109)$5,329Non-operating income

1,698

497

$14,118

Non-operating expenses

826

1,231

$6,867

Ordinary income(loss)

1,513(1,843)$12,580

Extraordinary income

1,111

245

$9,237Extraordinary losses

775

2,935

$6,443

Net income(loss) before taxes and other adjustments

1,849(4,534)$15,373

Corporate, residence, and enterprise taxes

362

335

$3,009Corporate, taxes and other adjustments

175

25

$1,455

Net income(loss) before minority interests

1,310(4,894)$10,892

Gains on minority interests in subsidiaries

131

60

$1,0891,178(4,955)$9,794

Net income(loss)

Thousands of
U.S. Dollars

Millions of Yen

For the year
For the year
For the year
ended
ended
ended
March 31, 2015 March 31, 2014 March 31, 2015

26―

20,919 $142,712

CMK CORPORATION

6

Consolidated Financial Statements
Consolidated Statement of Shareholder’s Equity(FY 2014: April 1, 2014 - March 31, 2015) (Unit: Thousands of U.S. Dollars/Millions of Yen)

Shareholder's equity
CapitalBalance at beginning of year

$185,466

22,306

Additional paid -in
capitalRetained earnings

Treasury stock

Total shareholder'sequity$183,445$83,320

10,021($29,117)$423,114

50,888(2,951)(355)(2,951)(355)

80,3609,665

420,154

50,532

9,794

1,178

9,794

1,178

(0)

(0)

(0)

(0)

(1,995)

(240)

3,076

370

1,072

129

22,063Cumulative effects of changes inaccounting policies
Restated balance

185,466

22,306

183,445

22,063(29,117)(3,502)(3,502)

Change during this year
Net income
Purchase of treasury stock
Disposal of treasury stock(Net)change during this year in accounts
other than shareholder's equity
Total change during this year
Balance at end of year

―

―

―

―

7,790

937

3,076

370

10,875

1,308

185,466

22,306

183,445

22,06388,15910,603(26,041)(3,132)431,038

51,841

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

$3,467417

0

0 $14,958

1,799$1,654199 $20,088

2,416 $30,439

Cumulative effects of changes inaccounting policies
Restated balance

3,467

417

0

0

14,958

1,799

1,654

199

20,088

Minority
interests in
subsidiaries

2,416

Total net assets

3,661 $473,650

56,966(24)(3)(2,976)(358)

30,414

3,658

470,666

56,607

Change during this year
9,794

1,178

Purchase of treasury stock

(0)

(0)

Disposal of treasury stock

1,072

129

14,425

1,735

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

3,899

469

(0)

(0)

Total change during this year

3,899

469

(0)

(0)

9,279

1,116

Balance at end of year

7,375

887

0

0

24,2372,915

7 CMK CORPORATION

9,279

1,116

715

86

13,902

1,672

523

63

715

86

13,902

1,672

523

63

25,309

3,044

2,377

286

33,990

4,088

30,9383,721

495,975

59,651

Medium-Term Management Plan (from the fiscal year ending March 2016 to the fiscal year
ending March 2018)

From the consolidation of operating foundations to a growth path
Establishing a competitive advantage in the in-vehicle board industry
The Group has formulated a medium-term management plan for fiscal years up to March 31, 2018. In the new
management plan, the Group will shift from the consolidation of operating foundations, for which it took steps until thefiscal year ended March 31, 2015, to a growth path, and will make its best effort to achieve stable earnings andenhance corporate value.

●Priority markets●Enhancing overall quality

1 In-vehicle board market
2 Telecommunications devices market

1 Strengthening production capacity
2 Strengthening the ability to control costs
3 Enhancing quality●Management targets(Billions of yen)

Net sales
Operating income
Operating income margin
Net income

ResultFY 2015
73.7
0.6
0.8%
1.1

FY 2016
75.0
1.5
2.0%
0.7

Return on equity (ROE)

2.2%

1.2%

Plan
FY 2017
82.0
2.5
3.0%
1.6

FY 2018
90.0
4.5
5.0%
3.0

2.9%

5.0%

Assumed exchange rates: USD: 115 yen; EUR: 125 yen

Initiatives in photovoltaic power generation businessTo effectively use assets and help conserve the environment, theCompany has installed photovoltaic power generation facilities on thesite of former parking facilities next to the KIBAN Center plant in Gunma
Prefecture. The Company installed 720 solar panels, with a generation
capacity of 180kW. They started to generate power in April this year andwill contribute to earnings, albeit slightly, through sales of electric power
while also helping to reduce CO2 emissions.
Under one of its management principles – as a good corporate citizen,
the Company will fulfill its social responsibility – the Company will
promote environmentally friendly corporate activities in every aspect.

CMK CORPORATION

8

Corporate Data
(As of March 31, 2015)

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
1,536 (Group total 4,490)

Primary Consolidated SubsidiariesJapan
CMK Finance Corporation
CMK Products Corporation

Overseas

Executives (as of September 1, 2015)

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

Director and Executive
Managing Officer

Eizo Shibata

CMKC (SHENZHEN). LTD.

Director and Executive
Officer

Akiharu Nakayama

CMKC (DONG GUAN) LTD.

Director and Executive
Officer

Hiroshi Hanaoka

Director and Executive
Officer

Kenichi Urushiyama

Director

Tsuyoshi Ukyo

CMKC (HONG KONG) LTD.

CMK ELECTRONICS (WUXI) CO., LTD.
CMK EUROPE N.V.
CMK AMERICA CORPORATION

Board of Corporate Auditors
Standing Corporate
AuditorYutaka Ishii

Corporate Auditor

Shigeo Ichikawa

Corporate Auditor

Fumio Haraguchi

Executive Officer

Isao Osawa

Executive Officer

Takashi Ogasawara

Executive Officer

Masanori Kawashima

Executive Officers

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

Stock Information

Shareholders Memo

(As of March 31, 2015)

Total number of shares authorized
227,922,000
Total number of shares issued and outstanding 63,060,164
Number of shareholders
7,163
Share trading unit
100
Major shareholders (10 largest)
Shareholders

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

Noboru Nakayama

4,982

7.9

Freesia Macross Corporation

3,334

5.3

Mizuho Bank, LTD.

2,576

4.1

The Foundation for Technology Promotion of Electronic Circuit Board

2,500

4.0

Japan Trustee Services Bank, Ltd. (Trust account)

2,171

3.4

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

2,107

3.3

The Dai-ichi Mutual Life Insurance Company

1,895

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

Sumitomo Mitsui Banking Corporation

1,613

2.6

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

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

Contact address:

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

Note: Although the Company holds 3,860 thousand shares of treasury stock, it is notincluded in the above list of major shareholders.

Shareholder Breakdown
Other firms

Individuals and others

15,821 thousand shares (25.1%)

20,913 thousand shares (33.2%)

Foreign companies and individuals

Total
63,060,164 shares

4,504 thousand shares (7.1%)
Securities firms
2,157 thousand shares(3.4%)

Financial institutions
19,663 thousand shares (31.2%)

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