Annual Report 2023
Year Ended March 31, 2023

Financial Highlights
ICOM INCORPORATED AND SUBSIDIARIES
Years ended March 31, 2023, 2022 and 2021

Thousands of
U.S. dollars

Millions of yen
2023

2022

2021

2023

¥ 34,174¥ 28,277¥ 27,941$ 255,928

Operating income

2,850

1,058

1,890

21,344

Profit before income taxes

3,262

1,485

2,259

24,429Profit

2,575

1,094

1,737

19,284

Profit attributable to owners of parent

2,575

1,094

1,737

19,284¥ 67,164¥ 63,369¥ 61,668$ 502,988

Net sales

Total assets
Amounts per share:

Yen

U.S. dollars¥4,211.85¥4,022.67¥3,937.75

Profit – basic

179.3976.22

120.17

1.34

Cash dividends

72.00

50.00

50.00

0.54

Net Assets

$

31.54

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥133.53 = U.S.$1.00, the exchange rate prevailing on March 31, 2023.
2. Amounts shown in millions of yen and thousands of dollars are rounded off to the nearest million or thousand.

■ Consolidated Sales (Million Yen)

■ Operating income (Million Yen)

40,0003,000

30,00034,17427,941

28,277
2,000

2,850
1,890

20,000

1,058
1,000

10,00000

FY March

FY March

FY March

FY March

FY March

FY March

2021

2022

2023

2021

2022

2023

■ SG&A Expenses (Million Yen)

■ Ordinary Profit (Million Yen)
4,000
3,000

15,000

3,262
2,259

10,000

10,313FY March

FY March

FY March

2021

2022

2023

1,574

2,000

5,000

1,000
0

11,4369,782

FY March

FY March

FY March

2021

2022

2023

©2023 ICOM INCORPORATED

0

1

Operating Highlights
GEOGRAPHICAL SEGMENT INFORMATION
Years ended March 31, 2023 and 2022

Millions of yen
Net Sales

Thousands of U.S. dollars

Operating Income

2023

2022

2023

2022

¥ 29,081¥ 23,336¥ 2,406¥

North America

12,4699,599

Europe2,132

Asia & Oceania

Net Sales

Operating
Income

2023

2023

504

$ 217,786$ 18,018

477

205

93,380

3,572

1,886

196

123

15,967

1,469

1,652

1,383

94

47

12,372704

Eliminations(11,160)(7,927)

(323)

179

(83,577)(2,419)Consolidated total¥ 34,174¥ 28,277¥ 2,850¥ 1,058$ 255,928$ 21,344

Japan

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥133.53 = U.S.$1.00, the exchange rate prevailing on March 31, 2023.
2. Amounts shown in millions of yen and thousands of dollars are rounded off to the nearest million or thousand.

Net Sales (Millions of yen)Japan

29,081

30,000

North America
Europe23,336

Asia & Oceania

20,00012,4699,599

10,0002,132 1,652

1,886 1,383
0

FY March 2022

3,000

FY March 2023

Operating Income (Millions of yen)

Japan

2,406

EuropeNorth America
Asia & Oceania

2,000

1,000

0

©2023 ICOM INCORPORATED

504

205

477
123

47

FY March 2022

196

FY March 2023

2

94

Operating Highlights
OVERSEAS SALES

Years ended March 31, 2023 and 2022

Millions of yen

Thousands of U.S. dollars

2023 (Unaudited)

2023 (Unaudited)

2022
30.5

¥ 10,944

32.0%

Europe

5,581

16.3

4,468

15.8

41,796

Asia & Oceania

4,899

14.4

3,853

13.6

36,688Others

1,481

4.3

971

3.4

11,091

Overseas total

22,90567.0

17,89863.3

171,534

Japan

11,26933.0

10,37936.7

84,394¥ 28,277 100.0%$ 255,928

North America

Consolidated total¥ 34,174 100.0%

¥

8,606

%

$

81,959Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥133.53 = U.S.$1.00, the exchange rate prevailing on March 31, 2023.
2. Amounts shown in millions of yen and thousands of dollars are rounded off to the nearest million or thousand.

FY March 2022 Sales by Region
North America

Europe

30.5%

15.8%

Japan
36.7%
Overseas
63.3%
Others3.4%

Asia & Oceania
13.6%

FY March 2023 Sales by Region
North America

Europe

32.0%

16.3%

Japan
33.0%

Overseas
67.0%
Others4.3%©2023 ICOM INCORPORATED

3

Asia & Oceania
14.4%

Business Outline
Consolidated Sales Composition (FY March 2023)
Sales Composition by Product Category

Options 16.5％

Navigation 0.9％

Aviation 7.0％

Sales

Network 2.2%

34.1
billion yen

Marine 10.8％

Land Mobile 46.6%

Amateur 16.0％

Sales by Region
Others 4.3%

Asia ＆ Oceania 14.4％

Japan 33.0%

Sales

34.1
billion yen
North America 32.0%

Europe 16.3%©2023 ICOM INCORPORATED

4

Consolidated Balance Sheet
March 31, 2023

Thousands of
US dollars

Millions of yen(Note１)

2023

2022

2023

¥29,397¥27,077$220,153

253

330

1,895

Accounts receivable - trade (Note 5)

4,871

4,386

36,479Allowance for doubtful accounts

(24)

(19)

(180)

5,100

4,697

38,194Inventories (Note 7)

12,837

12,462

96,135

Other current assets

1,833

2,365

13,72749,16746,601

368,209

Land

4,354

4,330

32,607

Buildings and structures

7,049

6,854

52,790Machinery and equipment

14,676

14,264

109,908

Vehicles and other

270

240

2,022

Construction in progress

58

112

434

26,40725,800197,761(18,668)(18,163)(139,804)

7,739

7,637

57,957

87

107

652

6,215

5,324

46,544

Other investments

541

578

4,052

Retirement benefit asset (Note 8)

410

-

3,070

Deferred income taxes (Notes 3 and 9)

791

840

5,923

2,059

2,142

15,420Intangible assets (Note 15)

184

168

1,378

Allowance for doubtful accounts

(29)

(28)

(217)

10,2589,131

76,822¥67,164¥63,369$502,988

AssetsCurrent Assets:
Cash and deposits (Notes 4 and 5)
Trade notes (Note 5)

Total current assets
Property, plant and equipment:

Property, plant and equipment, at costLess accumulated depreciation
Property, plant and equipment, net (Note 15)
Investments and other assets:
Investments in securities (Notes 5 and 6)
Investments in affiliates
Other

Guarantee deposits

Total investments and other assets
Total Assets (Note 15)
See accompanying Notes to consolidated financial statements©2023 ICOM INCORPORATED

5

Consolidated Balance Sheet
March 31, 2023

Thousands of
US dollars

Millions of yen(Note１)

2023

2022

2023

Accounts payable – trade¥1,811¥1,652$13,562

Accounts payable - other

986

768

7,384

Accrued income taxes

723

165

5,414

Accrued expenses

810

780

6,066

Provision for accrued bonuses

660

508

4,943

Warranty reserves

40

39

300

Other current liabilities (Note 10)

310

187

2,322

5,340

4,099

39,991

Deferred tax liabilities (Notes 3 and 9)

240

173

1,797

Retirement benefit liability (Note 8)

550

832

4,119

Other long-term liabilities (Note 10)

583

528

4,366

1,373

1,533

10,282

7,081

7,081

53,029

Capital surplus

10,44910,44978,252Retained earnings (Note 16)

42,27540,418316,596(1,446)(1,445)(10,829)

58,35956,503437,048

507

373

3,797

1,381

1,037

10,342

204

(176)

1,528

2,092

1,234

15,66760,451

57,737452,715¥67,164¥63,369$502,988

Liabilities and net assets
Current liabilities:(Note 9)Total current liabilities
Long-term liabilities:

Total long-term liabilities
Net assets:
Shareholders' equity: (Note 11)
Common stock
Authorized -34,000,000 shares;
Issued - 14,850,000 shares in 2023 and 2022

Less treasury stock, at cost;
497,412 shares in 2023 and 497,178 sharesin 2022
Total shareholders' equity
Accumulated other comprehensive income: (Note 13)
Net unrealized holding gain on securities (Note 6)
Translation adjustments
Retirement benefit liability adjustments (Note 8)
Total accumulated other comprehensive income
Total net assets
Total liabilities and net assets

See accompanying Notes to consolidated financial statements©2023 ICOM INCORPORATED

6

Consolidated Statement of Income
Year ended March 31, 2023

Thousands of
US dollars

Millions of yen(Note１)

2023

2022

2023

Net sales (Notes 10 and 15)¥34,174¥28,277$255,928

Cost of sales (Note 7)

19,88816,906

148,941

Gross profit

14,286

11,371

106,987

Advertising expenses

721

560

5,400

Packing and transportation costs

336

342

2,516

9

(1)

67

2,894

2,437

21,673Welfare expenses

804

708

6,021

Provision for bonuses

205

143

1,535

Retirement benefit expenses (Note 8)

93

93

697

Depreciation and amortization

193

166

1,445

Commission fees

974

804

7,294

Research and development costs (Note 12)

3,862

3,931

28,922

Other

1,345

1,130

10,073

Total selling, general and administrative
expenses

11,436

10,31385,643Operating income (Note 15)

2,850

1,058

21,344

Selling, general and administrative expenses

Provision of allowance for doubtful accounts
Salaries and allowances

See accompanying Notes to consolidated financial statements©2023 ICOM INCORPORATED

7

Consolidated Statement of Comprehensive Income
Year ended March 31, 2023

Thousands of
U.S. dollars

Millions of yen
2023(Note１)

2023

2022

Other income (expenses):
216

116

1,618

6

10

45

-

(90)

-

Foreign exchange gain, net

179

318

1,340

Equity in losses of affiliates

(20)

(8)

(150)

31

81

232

412

427

3,085

3,262

1,485

24,429Current

800

376

5,991

Deferred

(113)

15

(846)

687

391

5,145

Profit¥2,575¥1,094$19,284

Profit attributable to owners of parent: (Note 14)¥2,575¥1,094$19,284

Interest and dividend income
Gain on sales of investments in securities, net(Note 6)

Loss on valuation of investments in securities(Note 6)

Other, net
Profit before income taxes
Income taxes: (Notes 3 and 9)

Thousands of
U.S. dollars

Millions of yen(Note１)

2023

2022

2023

¥2,575¥1,094$19,284

Net unrealized holding gain on securities

134

143

1,004

Translation adjustments

344

662

2,576

Retirement benefit liability adjustments

380

37

2,846

Total other comprehensive income

858

842

6,426

Comprehensive income¥3,433¥1,936$25,710

Total comprehensive income attributable to Ownersof parent:¥3,433¥1,936$25,710

ProfitOther comprehensive income (Note 13)

See accompanying Notes to consolidated financial statements©2023 ICOM INCORPORATED

8

Consolidated Statement of Changes in Net Assets
Year ended March 31, 2023

Millions of yen
Net

Number ofshares in
issue
Balance atApril 1, 2021

Retirement

CommonCapitalRetained

Treasury

unrealized

Translation

benefit

Total netstock

surplusearnings

stock, at cost

holding gain

adjustments

liability

assetson securities

adjustments

14,850,000¥7,081¥10,449¥40,041¥(1,445)

¥230

¥375

¥(213)¥56,518

Profit attributableto owners of parent
for the year

-

-

-

1,094

-

-

-

-

1,094

Cash dividends

-

-

-

(717)

-

-

-

-

(717)

Purchases oftreasury stock

-

-

-

-

(0)

-

-

-

(0)

Other changes

-

-

-

-

-

143

662

37

842

14,850,000¥7,081¥10,449¥40,418¥(1,445)¥373¥1,037¥(176)¥57,737

-

--

-

2,575

-

-

-

-

2,575

-

-

(718)

-

-

-

-

(718)

Balance atApril 1, 2022
Profit attributableto owners ofparent for the year
Cash dividends
Purchases oftreasury stock

-

-

-

-

(1)

-

-

-

(1)

Other changes

-

-

-

-

-

134

344

380

858

Balance at
March 31, 2023

14,850,000¥7,081¥10,449¥42,275¥(1,446)¥507¥1,381¥204¥60,451

Thousands of US dollars (Note 1)
Commonstock
Balance atApril 1, 2022

CapitalsurplusRetainedearnings

Treasurystock, at costNet
unrealized
holding gain
on securities

Translation
adjustments

Retirement
benefitliability
adjustments

Total net
assets$53,029$78,252$302,689$(10,822)$2,793$7,766$(1,318)$432,389

Profit attributable toowners of parent for
the year--

19,284----

19,284

Cash dividends--(5,377)

-

-

-

-

(5,377)Purchases oftreasury stock

-

-

-

(7)

-

-

-

(7)

Other changes

-

-

-

-

1,004

2,576

2,846

6,426

Balance at
March 31, 2023

$53,029$78,252$316,596$(10,829)$3,797$10,342$1,528$452,715

See accompanying Notes to consolidated financial statements©2023 ICOM INCORPORATED

9

Consolidated Statement of Cash Flows
Year ended March 31, 2023

Thousands of
US dollars

Millions of yen(Note１)

2023

2022

2023

¥ 3,262¥ 1,485$ 24,429

Depreciation and amortization

856

1,014

6,411

Interest and dividend income

(216)

(116)

(1,618)Foreign exchange gain, net

(198)

(76)

(1,483)

(261)

1,402

(1,955)(189)(1,457)(1,415)

157

679

1,176

-

90

-

Other, net

284

(261)

2,127

Subtotal

Operating activities:
Profit before income taxes
Adjustments for:(Increase) decrease in notes and accounts
receivable
Increase in inventories
Increase in accounts payable – trade
Loss on valuation of investment securities

3,695

2,760

27,672

Income taxes paid

(276)

(676)

(2,067)

Net cash provided by operating activities

3,419

2,084

25,605Investing activities:
Decrease (increase) in time deposits with original
maturities in excess of three months

3,146(2,308)23,560

Proceeds from sales of marketable securities

-

300

-

Purchases of property, plant and equipment

(694)

(630)

(5,197)Purchases of intangible assets

(32)

(21)

(240)

Purchases of investments in securities(906)(1,137)(6,785)

Proceeds from sales and redemption of investments
in securities

212

247

1,588

Interest and dividend income received

215

134

1,610

543

(21)

4,067

2,484

(3,436)

18,603

(0)

(0)

(0)

Cash dividends paid

(718)

(717)

(5,377)

Net cash used in financing activities

(718)

(717)

(5,377)

305

433

2,283

Net increase (decrease) in cash and cash equivalents

5,490(1,636)

41,114

Cash and cash equivalents at beginning of year

22,48924,125

168,419

Cash and cash equivalents at end of year (Note 4)¥27,979¥22,489$209,533

Other, net
Net cash provided by (used in) investing activities
Financing activities:
Purchase of treasury stock

Effect of exchange rate changes on cash and cash
equivalents

See accompanying Notes to consolidated financial statements©2023 ICOM INCORPORATED

10ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
1. Basis of Preparation
The accompanying consolidated financial statements of ICOM INCORPORATED (the “Company”) and its consolidated subsidiaries (the “Group”) are prepared on the basis of accounting principles generally accepted in Japan,
which are different in certain respects as to the application and disclosure requirements of International Financial
Reporting Standards (“IFRS”), and have been compiled from the consolidated financial statements prepared by
the Company as required by the Financial Instruments and Exchange Act of Japan.
In addition, the notes to the consolidated financial statements include certain information which is not required
under accounting principles generally accepted in Japan but is presented herein as additional information. The
translation of yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside
Japan, as a matter of arithmetic computation only, and has been made at ¥133.53 = U.S.$1.00, the approximate
rate of exchange in effect on March 31, 2023. This translation should not be construed as a representation that
yen have been, could have been, or could in the future be, converted into U.S. dollars at the above or any otherrate.
2. Summary of Significant Accounting Policies(a) Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and thecompanies which it controls directly or indirectly. Two companies over which the Company exercises
significant influence in terms of their operating and financial policies have been included in the accompanying
consolidated financial statements on an equity basis.
All significant intercompany balances and transactions have been eliminated in consolidation. All material
unrealized intercompany gains and losses among the Company and the subsidiaries have been entirely
eliminated.
The financial statements of one consolidated subsidiary whose fiscal year end is December 31 has been
included in consolidation on the basis of a full fiscal year closing on March 31 for consolidation purposes.
(b) Cash and cash equivalents
For purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash on
hand, deposits with banks withdrawable on demand, and short-term investments which are readily
convertible to cash subject to an insignificant risk of any changes in their value and which were purchasedwith an original maturity of three months or less.
(c) Foreign currency translation
The balance sheet accounts of the overseas subsidiaries are translated into yen at the rates of exchange in
effect at the balance sheet date except that the components of net assets are translated at their historicalexchange rates. Adjustments resulting from translating accounts denominated in foreign currencies are notincluded in the determination of profit in the accompanying consolidated financial statements, but arereported as “Translation adjustments,” a component of net assets.
Revenue and expense accounts of the overseas subsidiaries are translated at the average rates of exchange
in effect during the year.
All monetary assets and liabilities denominated in foreign currencies are translated into yen at the rates of
exchange in effect at the balance sheet date, except that receivables hedged by qualified forward foreignexchange contracts are translated at the corresponding contract rates. Gain or loss on each translation iscredited or charged to income.
(d) Marketable securities and investments in securities
In general, securities are classified into three categories: trading securities, held-to-maturity debt securities
or other securities.
Trading securities, consisting of debt and marketable equity securities, are stated at fair value. Gain or loss,
both realized and unrealized, are credited or charged to income. Held-to-maturity debt securities are statedat their amortized cost. Marketable securities classified as other securities are carried at fair value with any
changes in unrealized holding gain or loss, net of the applicable income taxes. Cost of securities sold isdetermined by the moving average method. Unquoted securities classified as other securities are carried atcost determined by the moving average method.
Securities held by the Company and its subsidiaries including investments in securities, which are notaccounted for on an equity basis, are all classified as “other securities” and have been accounted for as
outlined above.

©2023 ICOM INCORPORATED

11

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
2. Summary of Significant Accounting Policies (continued)(e)Inventories
Inventories are mainly stated at the lower of cost or net selling value, cost being determined by the moving
average method ,except for inventories held by certain overseas subsidiaries which are valued at the lower ofcost or net selling value, cost being determined by the moving average method.

(f)

Property, plant and equipment (except for leased assets)
Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment in the
Company and its domestic subsidiaries is computed principally by the declining-balance method over theestimated useful lives of the respective assets as prescribed in the Corporation Tax Law of Japan, exceptthat the straight-line method is applied to buildings (other than structures attached to the buildings)
acquired on or after April 1,1998 and structures attached to buildings and other structures acquired on orafter April 1, 2016. The overseas consolidated subsidiaries calculate depreciation by the straight-line method.

(g)Intangible assets (except for leased assets)
Amortization of intangible assets is calculated by the straight-line method over the estimated useful livesof the respective assets as prescribed in the Corporation Tax Law of Japan. Expenditures related to thedevelopment of computer software intended for internal use are charged to income when incurred, except
if it is anticipated that this software will contribute to the generation of income or to future cost savings.
Such expenditures are capitalized as assets and amortized by the straight-line method over an estimateduseful life of 3 or 5 years.

(h)Leased assets
Leased assets are depreciated by the straight-line method over respective lease periods with no residual
value.

(i) Allowance for doubtful accounts
The allowance for doubtful accounts is computed based on the historical ratio of bad debts and an estimateof certain uncollectible amounts determined after an analysis of specific individual receivables.
(j)

Accrued bonuses
Accrued bonuses are calculated based on the estimated amount to be paid to employees and directors after
the balance sheet date, which are attributable to the current fiscal year.

(k)

Warranty reserves
Warranty reserves are provided for anticipated future repair costs based on the historical ratio calculatedusing product repair costs against net sales, which are attributable to the current fiscal year.
The warranties generally guarantee to customers the performance of the products sold according to productspecifications which the Group and its customers have mutually agreed and thus, is recognized provisions for
product warranties.

(l) Retirement benefit liability
Retirement benefit liability is provided mainly at an amount calculated based on the retirement benefit
obligation less the fair value of the pension plan assets. The retirement benefit obligation is attributed to eachperiod by the straight-line method over the estimated remaining years of service of the eligible employees.
Actuarial gain or loss is being amortized in the year following the year in which the gain or loss isrecognizedby the straight-line method over ten years, which is within the average remaining years of service of eligible
employees.

©2023 ICOM INCORPORATED

12

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
2. Summary of Significant Accounting Policies (continued)(m)Significant revenues and expensesi)

Revenues from sales of goods and products
Revenues from sales of goods and products, which mainly include sales of land mobile radios,amateur radios, marine radios, other radios, and information and telecommunication equipment
such as networking facilities. Revenue is recognized at the time of delivery since it is consideredthat the control of the goods and products is transferred to the customer and the performanceobligation is satisfied at the time of delivery.
For sales of goods and products within Japan, revenue is recognized at the time of shipment if theperiod from the time of shipment to the time when control of the goods and products is transferred tothe customer is a normal period of time.

ii) Revenues from sales of services and other sales
Revenues from sales of services and other sales, which mainly include revenues fromtelecommunication services and revenues from product-related services such as warranty, repairs
and maintenance. If the performance obligation is satisfied at a point in time, revenue is recognizedwhen the service is completed. If the performance obligation is satisfied over time, revenue isrecognized uniformly over the period during which the services are provided.
(n)Hedge accounting
The Company utilizes derivative transactions in order to manage the risks arising from adverse fluctuation
in foreign currency exchange rates. In accordance with internal management rules, the Company enters into
forward foreign exchange contracts which fall within the Company’s foreign currency or foreign currency
receivables holding limits. Derivative transactions are not entered into for speculative purposes.
Under the accounting standard for financial instruments, gain or loss on derivatives designated as hedging
instruments is deferred until the loss or gain on the underlying hedged items is recognized. Forward foreignexchange contracts which meet certain conditions are accounted for by a method under which the foreign
currency deposits and receivables are translated at their corresponding forward foreign exchange contract
rates (“Allocation method.”)
The evaluation of effectiveness of such forward foreign exchange contracts is omitted because significant
terms of the hedging instruments and underlying hedged items are the same and the Company assumes
that movements in cash flows are completely offset.
Hedging instruments and hedged items are as follows:
Hedging instruments
Hedged items(o)Foreign exchange contracts
Foreign currency deposits and foreign currency trade receivables

Distribution of retained earnings
Under the Companies Act of Japan and the Company’s Articles of Incorporation, the distribution of retained
earnings with respect to a given fiscal year end is made by resolution of the shareholders at a general
meeting held subsequent to the close of the financial period. The distribution of retained earnings with respect
to interim financial periods is made by resolution of the board of directors. (Please refer to Note 16.)©2023 ICOM INCORPORATED

13

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
3. Significant Accounting Estimates(1)

Recoverability of Deferred Tax Assetsi) Recoverability of deferred tax assets as of March 31, 2023 and 2022:
Thousands of
U.S. dollars

Millions of yen

Deferred tax assets (net amount)

2023

2022

2023

¥

¥

$ 5,923791

840ii) Information on significant accounting estimates for identified items(a) Calculation method
The Group evaluates the recoverability of deferred tax assets for deductible temporary
differences based on the tax planning opportunities available to it and estimated future taxable
income that depends on future profitability. In estimating future taxable income, the Company
and its subsidiaries evaluate probable future taxable income by reasonably estimating the timing
and amount of expected future taxable income based on supporting materials such as thebusiness plan.
(b) Significant assumptions
The significant assumptions underlying the business plan to evaluate the estimate of futuretaxable income are sales growth rate and gross profit ratio.
The sales growth rate and the gross profit ratio are determined mainly by using a forecast ofcustomer demand and the latest actual sales results.
(c) Impact on consolidated financial statements for the following fiscal year
In the event the actual sales growth rate and gross profit ratio as significant assumptions fall
below expectations due to market trends such as innovation or a decrease in production resulting
from an adverse procurement situation of key components, which are mainly semiconductors,some deferred tax assets may be reversed in the following fiscal year.

©2023 ICOM INCORPORATED

14

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023

4. Cash and Cash Equivalents
In the preparation of the consolidated statements of cash flows, the relationship between the items included
in cash and cash equivalents and the corresponding amounts reflected in the consolidated balance sheets at
March 31, 2023 and 2022 is summarized as follows:
Thousands of
U.S. dollars

Millions of yen

2023¥

Cash and deposits

29,397¥-

Marketable securities¥

Subtotal

2023

2022

29,397

27,077$220,153-¥

27,077$220,153

Time deposits with original maturities in excess of
three months(1,418)(4,588)(10,620)---¥ 27,979¥ 22,489$ 209,533

Marketable securities with original maturities inexcess of three months
Cash and cash equivalents
5. Financial Instruments(1)

General informationi) Policy for financial instruments
In consideration of plans for capital investment, which is mainly centered on radio manufacturing
and sales, the Group obtains necessary financing through its own funds. The Group manages surplus
funds through financial assets that have high levels of liquidity. The Group uses derivatives for the
purpose of reducing risk and does not enter into derivatives for speculative purposes.
ii) Types of financial instruments and related risk
Notes and accounts receivable are exposed to credit risk in relation to customers. In addition,accounts receivable denominated in foreign currencies are exposed to exchange rate fluctional risk.
Marketable securities and investments in securities are exposed to market risk. Those securities arecomposed of mainly debt securities classified as other securities and equity securities of othercompanies with which it has business relationships.
Fair values of those securities are periodically reported to the meetings of the board of directors.
Most of trade accounts payable have payment due dates within two months. Those denominated inforeign currencies are exposed to exchange rate fluctional risk.
Regarding derivatives, the Group enters into forward foreign exchange contracts to reduce theforeign currency exchange rate fluctuation risk arising from cash and deposits and receivables
denominated in foreign currencies, and utilizes compound financial instruments for the purpose of
efficient management of surplus funds. Further information regarding the method of hedge
accounting, hedging instruments and hedged items, hedging policy, and the assessment of theeffectiveness of hedging activities can be found in “(n) Hedge accounting” in Note 2 “Summary of
Significant Accounting Policies”.

©2023 ICOM INCORPORATED

15

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023

5. Financial Instruments (continued)(1)

General information (continued)iii) Risk management for financial instruments(a) Monitoring of credit risk (the risk that customers or counterparties may default)
In accordance with the internal policies for managing credit risk of the Group arising from tradereceivables, the sales department monitors credit worthiness of main customers periodically, inprinciple, and monitors due dates and outstanding balances by customer. In addition, the Group ismaking efforts to early identify and mitigate risks of bad debt from customers who have financial
difficulties.
In accordance with the internal policies for security management, the Group only acquires debt
securities classified as other securities with high credit ratings. Accordingly, the Group believes thatthe credit risk deriving from such debt securities is insignificant.
The Group also believes that the credit risk of derivatives is insignificant as the Group enters into
derivative transactions only with financial institutions with high credit ratings.
(b) Monitoring of market risks (the risks arising from fluctuations in foreign exchange rates, interest
rates and others)
For cash and deposits denominated in foreign currencies, in principle, for a portion of receivables
denominated in foreign currencies, the Group identifies the foreign currency exchange risk by eachcurrency and enters into forward foreign exchange contracts to hedge such risk.
For marketable securities and investments in securities, the Group periodically reviews the fairvalues of such financial instruments and the financial position of the issuers. In addition, the Group
continuously evaluates whether securities should be maintained taking into account their fair values
and the relationships with the issuers.
For derivative transactions, the accounting department of the Company enters into and manages
transactions, and a respective director, in advance, approves them within the limits reported at themeeting of the board of directors. Results of derivative transactions are reported at the monthly
meetings of the board of directors. The consolidated subsidiaries do not enter into derivativetransactions.
(c) Monitoring of liquidity risk (the risk that the Group may not be able to meet its obligations on thescheduled due dates)
Based on reports from each division, the accounting department of the Company prepares andupdates its cash flow plans on a timely basis and maintains liquidity of assets for payment tomanage liquidity risk. The consolidated subsidiaries monitor liquidity risk in the same manner.
iv) Supplementary explanation of the estimated fair value of financial instruments
Since various assumptions and factors are reflected in estimating the fair value, different
assumptions and factors could result in different fair values.

©2023 ICOM INCORPORATED

16

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
5. Financial Instruments (continued)(2)

March 31, 2023

Estimated fair value of financial instruments
The carrying value of financial instruments on the consolidated balance sheets at March 31, 2023 and2022, the estimated fair value and the difference between them are shown in the following table. For cash
and deposits, trade notes, accounts receivable trade and accounts payable trade, they are not on the tablebelow as most of them are settled within a short term and their fair value approximates carrying value.
Millions of yen

2023
Carrying
value

Fair value

Difference

AssetsMarketable securities and investments in securities
Total assets¥ 6,206¥ 6,206¥-¥ 6,206¥ 6,206

¥

-

-

-

Derivative transactions (*)-

Millions of yen

2022
Carrying
value

Fair value

Difference

AssetsMarketable securities and investments in securities
Total assets¥ 5,315

¥

5,315

¥

-

¥ 5,315

¥

5,315

¥

-

Derivative transactions (*)

-

-

-

Thousands of U,S, dollars

2023
Carrying
value

Fair value

Difference$ 46,476$ 46,476$-$ 46,476$ 46,476

$

-

-

-

AssetsMarketable securities and investments in securities
Total assets
Derivative transactions (*)

Thousands of
U,S, dollars

Millions of yen

2023
Unlisted equity securities

¥

96

-

2022

2023

¥

$

116

720

Unquoted securities as of March 31, 2023 and 2022 are as follows. They are not included in thetable above.
(*) The value of assets and liabilities arising from derivative transactions is shown at net value.

©2023 ICOM INCORPORATED

17

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023

5. Financial Instruments (continued)(2)

Estimated fair value of financial instruments (continued)i)

Redemption schedule
The redemption schedule for monetary assets, marketable securities and investments in securities withmaturity dates is summarized as follows:
Millions of yen

2023
Due after
one yearthroughfive years

Due within
one year
Cash and deposits¥ 29,397

¥

-

2022

Due after
five years
throughten years

Due after
ten years

Due within
one year¥¥-¥ 27,077-

Due after
one yearthroughfive years¥-

Due after
five years
throughten years¥-

Due after
ten years

¥

-

253

-

-

-

330

-

-

-

4,871

-

-

-

4,386

-

-

-

Corporate bonds

-

1,100

2,300

100

-

1,100

1,900

-

Other

-

-

-

-

-

-

-

-

¥ 34,521¥ 1,100¥ 2,300100¥ 31,793¥ 1,100¥ 1,900

Trade notes
Accounts receivable
tradeMarketable securities
and investments insecurities:
Other securities
with maturity dates

Total

¥

Thousands of U.S. dollars

2023

Cash and deposits

Due within
one year

Due after
one yearthroughfive years$220,153$-

Due after
five years
throughten years$

Due after
ten years-$-

Trade notes

1,895

-

-

-

Accounts receivabletrade

36,479---Corporate bonds

-

8,238

17,225

749

Other

-

-

-

-

$258,527$ 8,238$17,225$ 749

Marketable securities
and investments insecurities:
Other securities
with maturity dates

Total©2023 ICOM INCORPORATED

18

¥

-

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
5. Financial Instruments (continued)(3)

Breakdown of fair value of financial instruments by level
Fair values of financial instruments are categorized into three levels as described below on the basis of
the observability and the materiality of the inputs used in the fair value measurement.
Level 1: Fair values measured using quoted prices of identical assets or liabilities in active markets amongobservable valuation inputs
Level 2: Fair values measured using inputs other than inputs included within Level 1 among observablevaluation inputs
Level 3: Fair values measured using unobservable valuation inputs
When several inputs that have significant impact on fair value measurement are used and those inputs
are categorized into different levels, the fair value is categorized into the lowest hierarchy level for fair value
measurement among those in which each of the inputs belongs.
Financial instruments measured at fair value
Millions of yen

2023
Level 1

Level 2

¥ 2,755¥

2022

Level 3

Total

Level 1

Level 2-

¥ 2,755¥ 2,327

¥

-

3,451

-

2,988

-

¥ 6,206¥ 2,327¥ 2,988

Level 3Total￥

- ¥ 2,327

Marketable securities
and investments insecurities:
Other securities
Equitysecurities
Corporate bonds
Total

-

-

3,451

¥ 2,755¥ 3,451

¥

¥

-

￥

2,988

- ¥ 5,315

Thousands of U.S. dollars

2023
Level 1

Level 2

＄20,632＄

Level 3

Total

Marketable securities
and investments insecurities:
Other securities
Equitysecurities
Corporate bonds
Total

-

-

25,844＄20,632＄25,844＄＄-＄20,632-

25,844-＄46,476

Notes: Explanation of valuation techniques used and inputs related to the calculation of fair valueMarketable securities and investments in securities
Fair values of listed equity securities and corporate bonds are determined by using quoted prices. Fair values oflisted equity securities are categorized as Level 1 since they are traded in active markets. Fair values of corporate
bonds are categorized as Level 2 because the frequency of market transactions is low and they are not recognized
as having quoted prices in active markets.

©2023 ICOM INCORPORATED

19

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
6. Marketable Securities and Investments in Securities
Marketable securities and investments in securities classified as other securities at March 31, 2023 and 2022
are summarized as follows:
Millions of yen

2023
Carrying

Acquisition

value

cost

2022
Carrying

Acquisition

value

cost

858

¥ 2,236¥ 1,679¥ 557

Difference

Difference

Securities whose carrying value
exceeds their acquisition cost:
Equity securities¥ 1,827¥969¥

Corporate bonds

502

501

1

604

601

3

Subtotal

2,329

1,470

859

2,840

2,280

560

Equity securities

928

1,001

(73)

90

90

-

Corporate bonds

2,949

3,002

(53)

2,385

2,403

(18)

Subtotal

3,877

4,003

(126)

2,475

2,493

(18)

¥ 6,206¥ 5,473¥ 733¥ 5,315¥ 4,773¥ 542

Securities whose carrying value
does not exceed their acquisition cost:

Total

Thousands of U.S. dollars

2023
Carrying

Acquisition

value

cost

Difference

Securities whose carrying value
exceeds their acquisition cost:
Equity securities$13,682$ 7,257$ 6,425

Corporate bonds

3,760

3,752

8

Subtotal

17,442

11,0096,433

Equity securities

6,949

7,496

(547)

Corporate bonds

22,08522,482(397)

Subtotal

29,03429,978(944)$46,476$40,987$ 5,489

Securities whose carrying value
does not exceed their acquisition cost:

Total

Sales of other securities for the years ended March 31, 2023 and 2022 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

2023
¥

Sales

2023

2022
12

¥

45

$

90

Aggregate gain

6

10

45

Aggregate loss

-

0

-

©2023 ICOM INCORPORATED

20

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
7. Inventories
Inventories at March 31, 2023 and 2022 are consisted of the following:Thousands of
U.S. dollars

Millions of yen

2023¥

Goods and finished products

4,482

¥

4,728

$

33,565

88

63

659

8,267

7,671

61,911¥ 12,837¥ 12,462$ 96,135

Work in process
Raw materials and supplies
Total

2023

2022

Cost of sales include a loss on devaluation of inventories of ¥363 million ($2,718,490) and ¥477 million
for the years ended March 31, 2023 and 2022, respectively.
8. Retirement Benefit Plans(1) Outline of retirement benefits for employees
The Company and its domestic subsidiaries have defined benefit corporate pension plans and lump-sum
payment plans for employees.
The Company and its domestic subsidiaries may pay additional retirement benefits to employees undercertain circumstances.
(2)

Retirement benefit liability for the years ended March 31, 2023 and 2022
i) The changes in retirement benefit obligation are outlined as follows (except for retirement benefit
obligation calculated by the simplified method):Thousands of
U.S. dollars

Millions of yen

2023
Retirement benefit obligation at beginning of year

2023

2022

¥ 7,074

¥

6,903

$

52,977

Service cost

215

218

1,610

Interest cost

59

57

442

Actuarial loss

(692)

8

(5,182)Retirement benefits paid

(137)

(112)

(1,026)¥ 6,519¥ 7,074$ 48,821

Retirement benefit obligation at end of yearii) The changes in plan assets at fair value are outlined as follows (except for retirement benefit
obligation calculated by simplified method):Thousands of
U.S. dollars

Millions of yen

2023¥

Plan assets at fair value at beginning of year
Expected return on plan assets
Actuarial gainContributions by the employer
Retirement benefits paid
Plan assets at fair value at end of year

©2023 ICOM INCORPORATED

¥

21

2023

2022

6,768

¥

6,392

$

50,685

45

40

337

(170)

39

(1,273)

423

409

3,168

(137)

(112)

(1,026)

6,929¥ 6,768$

51,891ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
8. Retirement Benefits Plans (continued)(2)

Retirement benefit liability for the years ended March 31, 2023 and 2022 (continued)iii) The changes in retirement benefits obligation calculated by the simplified method are outlined asfollows:
Thousands of
U.S. dollars

Millions of yen

Retirement benefit obligation at beginning of year

2023

2022

2023

¥

¥

$

491

3,932

49

48

367

(24)

(14)

(180)

¥ 550

¥ 525

Retirement benefits expenses
Retirement benefits paid
Retirement benefit obligation at end of year

525

$

4,119

iv) The balance of retirement benefit obligation and plan assets at fair value, liabilities and assets
recognized in the consolidated balance sheets are outlined as follows:
Thousands of
U.S. dollars

Millions of yen

2023

2023

2022

Funded retirement benefit obligation¥ 6,519

Plan assets at fair value(6,929)(6,768)(51,891)

(410)

306

(3,070)

550

526

4,119

Unfunded retirement benefit obligation
Net amount of liabilities and assets recognized inconsolidated balance sheets

¥

140

¥

7,074

¥

832

$

48,821$

1,049

Retirement benefit liability

550

832

4,119

Retirement benefit asset

(410)

-

(3,070)Net amount of liabilities and assets recognized inconsolidated balance sheets

¥

140

¥

832

$

1,049

v) The components of retirement benefit expenses for the years ended March 31,2023 and 2022 areoutlined as follows:
Thousands of
U.S. dollars

Millions of yen

Service cost

2023

2022

2023

¥

¥

$

Interest cost
Expected return on plan assets
Amortization:
Actuarial loss
Retirement benefit expenses©2023 ICOM INCORPORATED

¥

22

264

266

1,977

59

57

442

(45)

(40)

(337)

27

22

202

305

$ 2,284305¥

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
8. Retirement Benefits Plans (continued)(2)

Retirement benefit liability for the years ended March 31, 2023 and 2022 (continued)vi) The component of retirement benefit liability adjustments included in other comprehensive
income before tax effects are outlined as follows:
Thousands of
U.S. dollars

Millions of yen

2023

2022

2023

Actuarial gain

¥

548

¥

53

$

4,104

Total

¥

548

¥

53

$

4,104

vii) The balance of retirement benefit liability adjustments recognized in accumulated othercomprehensive income before tax effects is outlined as follows:
Thousands of
U.S. dollars

Millions of yen

2023

2022

2023

Unrecognized actuarial loss

¥

294

¥

254

$

2,202

Total

¥

294

¥

254

$

2,202

viii) The plan assets by major category consist of the following:

2023

2022

Debt securities

59%

60%

Equity securities

29

28

Cash and deposits

1

1

Other

11

11

Total

100%

100%

The expected long-term rate of return on plan assets is determined as a result of consideration of boththe portfolio allocation to each class at present and in the future, and long-term expected rate of returnfrom multiple plan assets at present and in the future.
ix) The assumptions used in accounting for the defined benefit plans for the years ended March 31,
2023 and 2022 are as follows:

2023

2022

Discount rates

1.5%

0.8%

Expected long-term rates of return on plan assets

0.7

0.6

Expected rate of compensation increases

1.3

1.3

©2023 ICOM INCORPORATED

23

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
9. Income Taxes
Income taxes applicable to the Company and its domestic subsidiaries comprise corporation, enterprise andinhabitants’ taxes which, in the aggregate, resulted in statutory tax rate of approximately 30.6% for the years
ended March 31, 2023 and 2022. The overseas subsidiaries are subject to income taxes of the respective
countries in which they operate.
Reconciliations of the statutory tax rate and effective tax rates for the years ended March 31, 2023 and 2022
as a percentage of profit before income taxes are as follows:

2023

2022

30.6%

30.6%

Non-deductible entertainment expenses and other forincome tax purposes

1.2

0.9

Per capita portion of inhabitants’ taxes

0.7

1.5

Tax credit for experimentation and research expenses

(9.0)

(5.5)

Differences in tax rates applicable to overseas
subsidiaries

(1.5)

(1.8)

Equity in earnings of affiliates

0.2

0.2

Valuation allowance

(0.4)

0.1

Effect of Tax Cuts and Jobs Act in U.S.

0.1

0.4

Accumulated earnings tax

(0.5)

1.0

Other

(0.3)

(1.1)

Effective tax rate

21.1%

26.3%

Statutory tax rate

©2023 ICOM INCORPORATED

24

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
9. Income Taxes (continued)
The significant components of deferred tax assets and liabilities at March 31, 2023 and 2022 are summarized
as follows:
Thousands ofMillions of yen
U.S. dollars

2023

2022

2023

¥

¥

208

$ 2,351

Deferred tax assets:
Unrealized gain on inventories

314

Long-term accounts payable - other

139

139

1,041

Provision for accrued bonuses

200

153

1,498

Accrued enterprise tax

62

25

464

Deferred revenue

8

7

60

Retirement benefit liability

165

251

1,236

Allowance for doubtful accounts

14

13

105

Loss on valuation of investments in securities

25

25

187

Accrued legal welfare expense on bonuses

32

24

240

Net operating loss carryforward

32

127

240

Loss on devaluation of inventories

176

151

1,318

Other

73

42

546

Gross deferred tax assets

1,240

1,165

9,286

Valuation allowance

(34)

(46)

(255)

Total deferred tax assets

1,206

1,119

9,031

Unrealized holding gain on securities

(223)

(164)

(1,670)Gain on sales of property, plant and equipment

(179)

(156)

(1,341)

Accumulated earnings tax

(115)

(131)

(861)

Retirement benefit asset

(125)

-

(936)

Other

(13)

(1)

(97)

Deferred tax liabilities:

Total deferred tax liabilities

(655)
¥

Net deferred tax assets©2023 ICOM INCORPORATED

25

551

¥

(452)

(4,905)667$ 4,126

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
10.Revenue Recognition(1)

Information on disaggregated revenue arising from contracts with customers
Millions of yen

2023
Japan

North
America

EuropeAsia &
Oceania

Subtotal

Goods or services transferred at a point
in time¥ 15,898¥ 12,188¥

2,025¥ 1,461¥ 31,572

Goods or services transferred over time

2,206

277

107

12

2,602

18,104

12,465

2,132

1,473

34,174

-

-

-

-

-

¥ 18,104¥ 12,465¥ 2,132¥ 1,473¥ 34,174

¥

¥

¥

¥

¥

Sales

Revenue from contracts withcustomers
Other revenue
Sales to external customers
Sales to government offices

1,678

561

2

14

2,255

Millions of yen

2022
Japan

North
America

EuropeGoods or services transferred at a point
in time¥ 13,621¥¥

Goods or services transferred over time

1,969

Asia &
Oceania

Subtotal

Sales

1,849

¥ 1,199¥ 26,081

184

37

6

2,196

15,590

9,596

1,886

1,205

28,277

-

-

-

-

-

¥ 15,590¥ 9,596¥ 1,886¥ 1,205¥ 28,277

¥

¥

¥

¥

¥

Revenue from contracts withcustomers
Other revenue
Sales to external customers
Sales to government offices

734

9,412

237

1

16

988

Thousands of U.S. dollars

2023
Japan

North
America

EuropeAsia &
Oceania

Subtotal

Goods or services transferred at a point
in time$119,059$ 91,275$ 15,165$ 10,941$236,440

Goods or services transferred over time

16,521

2,075

802

90

19,488135,580

93,35015,967

11,031

255,928

-

-

-

-

-

$135,580$ 93,350$ 15,697$ 11,031$255,928$ 12,566$$$$ 16,887

Sales

Revenue from contracts withcustomers
Other revenue
Sales to external customers
Sales to government offices©2023 ICOM INCORPORATED

26

4,201

15

105

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
10.Revenue Recognition (continued)(2) Information providing a basis for understanding revenue arising from contracts with customers.
Basic information for understanding revenue arising from contracts with customers is shown in “(m)Significant revenues and expenses ” of Note 2 “Summary of Significant Accounting Policies”.
(3) Information about the amount of revenue from contracts with existing customers at the end of the fiscal
year that are expected to be recognized in the following fiscal year or beyond
Balance of contract assets and contract liabilities

Thousands of
U.S. dollars

Millions of yen

2023

2022

2023

¥

$

Contract liabilities (Beginning balance)¥

Advance payments received

78

102

584

Unearned revenue

26

9

195

Long-term unearned revenue

48

24

359

135

$ 1,138

Total

¥

152

¥

Thousands of
U.S. dollars

Millions of yen

2023

2022

¥

¥

2023

Contract liabilities (Ending balance)
Advance payments received

177

78

$ 1,326

Unearned revenue

50

26

374

Long-term unearned revenue

92

48

689

152

$ 2,389

Total

¥

319

¥

Note:
1. Contract liabilities consist of advances received from customers on sales of goods and products andunearned revenue and long-term unearned revenue from customers on sales of services and other sales.
Contract liabilities are reversed as revenue is recognized.
2. Contract liabilities are included in “Other current liabilities” under current liabilities and “Other long-term
liabilities” under long-term liabilities in the consolidated balance sheet at March 31, 2023 and 2022.
3. The amount of revenue recognized for the year ended March 31, 2023 and 2022 that were included in thebalance of contract liabilities at the beginning of the years were ¥91 million ($681,495) and ¥103 million,
respectively.

©2023 ICOM INCORPORATED

27

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
11. Shareholders’ Equity
The Companies Act (the “Act”) provides that an amount equal to 10% of the amount to be disbursed as
distributions of capital surplus (other than the capital reserve) and retained earnings (other than the legal
reserve) be transferred to the capital reserve and the legal reserve, respectively, until the sum of the capitalreserve and the legal reserve equals 25% of the capital stock account. Such distributions can be made at any
time by resolution of the shareholders, or by the board of directors if certain conditions are met.
The Company’s legal reserve included in retained earnings at March 31, 2023 and 2022 amounted to ¥293
million ($2,194,263).
In addition, upon the issuance and sale of new shares of capital stock, the entire amount of the proceeds isrequired to be accounted for as capital stock, although a company may, by resolution of the board of directors,
account for an amount not exceeding one-half of the proceeds of the sale of new shares as additional paid-in
capital included in capital surplus.
Movements in treasury stock for the years ended March 31, 2023 and 2022 are summarized as follows:
Number of shares

2023
April 1,
2022

Increase

March 31,2023

Decrease

Shares issued:
Common stock

14,850,000--

14,850,000

Treasury stock:
Common stock

497,178234-

497,412The increase in treasury stock of 234 shares is due to purchases of 234 shares of less than one voting unit for
the year ended March 31, 2023.
Number of shares

2022
April 1,
2021

Increase

March 31,2022

Decrease

Shares issued:
Common stock

14,850,000--

14,850,000

Treasury stock:
Common stock

497,101

77-

497,178.

The increase in treasury stock of 77 shares is due to purchases of 77 shares of less than one voting unit for
the year ended March 31, 2022.

©2023 ICOM INCORPORATED

28

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
12. Research and Development Costs
Research and development costs included in selling, general and administrative expenses for the years
ended March 31, 2023 and 2022 are as follows:
Thousands of
U.S. dollars

Millions of yen

Research and development costs

2023

2022

2023

¥ 3,862¥ 3,931$ 28,922

13. Other Comprehensive Income
Reclassification adjustments and tax effects of other comprehensive income for the years ended March 31,
2023 and 2022 are as follows:
Thousands of
U.S. dollars

Millions of yen

2023

2022

2023

¥

¥

116

$ 1,446-90-

Before tax effects

193

206

1,446

Tax effects

(59)

(63)

(442)

134

143

1,004

344

662

2,576

-

-

-

344

662

2,576

Amount arising during the year

522

31

3,909

Reclassification adjustments

26

22

195

Before tax effects

548

53

4,104

(168)

(16)

(1,258)

380

37

2,846

842

$ 6,426

Net unrealized holding gain on securities:
Amount arising during the year
Reclassification adjustments

Net unrealized holding gain on securities

193

Translation adjustments:
Amount arising during the year
Reclassification adjustments
Translation adjustments
Retirement benefit liability adjustments:

Tax effects
Retirement benefit liability adjustments
Total other comprehensive income©2023 ICOM INCORPORATED

29

¥

858

¥

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
14.

Amounts Per Share
Amounts per share at March 31, 2023 and 2022 and for the years then ended are as follows:
Yen

U.S. dollars

2023

2022

¥ 4,211.85¥ 4,022.67

Basic

179.39

76.22

1.34

Cash dividends

72.00

50.00

0.54

Net assets

2023
$

31.54

Profit attributable to owners of parent:

Net assets per share is computed based on net assets and the number of shares of common stock
outstanding at the respective year end.
Basic profit attributable to owners of parent per share is computed based on the profit attributable to ownersof parent available for distribution to shareholders of common stock and the weighted-average number ofshares of common stock outstanding during each year. Cash dividends per share represent the cash dividends
declared as applicable to the respective fiscal years.
Profit per share for the years ended March 31, 2023 and 2022 are calculated based on the following:Thousands of
U.S. dollars

Millions of yen

2023

2022

Profit attributable to owners of parent¥ 2,575¥ 1,094

Amounts not attributable to commonshareholders

-

-

-

Profit attributable to owners of parent forcommon stock

2,575

1,094

19,284

Average number of common stock during
the fiscal year (in thousands)

14,352

14,352

14,352©2023 ICOM INCORPORATED

30

2023
$

19,284

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
15. Segment Informationi) Outline of segment information
The Group’s reporting segments are divisions of the Group for which separate financial information isavailable, and whose operating results are reviewed regularly by the board of directors meeting of theGroup in order to allocate management resources and assess performance of operations.
The Group are primarily engaged in the manufacture and sale of telecommunication equipment. The
subsidiaries are independent business units and formulate comprehensive strategies for products andoperate business geographically.
Therefore, the Group consists of four segments based on sales by region. The four segments are“Japan” , “North America,” which primarily includes the United States and Canada; “Europe,” whichprimarily includes Germany and Spain; and “Asia & Oceania,” which primarily includes Australia, China andVietnam as of March 31, 2023 and 2022.
ii) Calculation methods used for sales, income or loss, assets and other items on each reporting
segment
The accounting policies of the segments are substantially the same as those described in the significant
accounting policies in Note 2. Segment performance is evaluated based on operating income or loss.
Intersegment sales are recorded at the same prices applied in transactions with third parties.
iii) Information as to sales, income or loss, assets and other items on each reporting segment
Information by reporting segment for the years ended March 31, 2023 and 2022 are as follows:
Millions of yen

2023
Japan

North

Asia &

EuropeAmerica

Oceania

Subtotal

Elimination¥

Consolidated

I. Net sales and operating income
Sales to third parties¥ 18,104¥ 12,465¥ 2,132¥ 1,473¥ 34,174Intersegment sales

10,9774

0179

Net sales

29,081

12,4692,132

Operating income¥ 2,406¥¥58,272¥ 8,948¥¥

II. Total assets

477-¥ 34,174

11,160(11,160)-

1,652

45,334(11,160)¥ 34,17494¥ 3,173¥ (323)¥ 2,850¥ 1,709¥ 2,196¥71,125¥(3,961)¥ 67,164

¥

¥

¥

¥

¥

¥

196

¥

III. Other items
Depreciation andamortization
Investments in affiliates
Increase in property, plantand equipment / intangible
assets©2023 ICOM INCORPORATED

759

80

5

12

856

-

856

87

-

-

-

87

-

87

721

103

14

9

847

-

847

31

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
15. Segment Information (continued)iii) Information as to sales, income or loss, assets and other items on each reporting segment(continued)
Millions of yen

2022
Japan

North

Asia &

EuropeAmerica

Subtotal

Oceania

Elimination

ConsolidatesdI. Net sales and operating income¥ 15,590¥ 9,596¥ 1,886

Intersegment sales

7,746

3

Net sales

23,336

9,599

Sales to third parties

Operating income
II. Total assets

¥

504

¥

205

1,205

¥ 28,277

0

178

1,886

1,383

¥

¥

123

¥

47

-

¥ 28,277

7,927(7,927)-36,204(7,927)28,277

¥

¥

879

¥

179

¥

1,058

¥ 55,323¥ 7,610¥ 1,410¥ 2,042¥ 66,385¥(3,016)¥ 63,369

¥

¥

¥

¥

¥

¥

¥

III. Other items
Depreciation and amortization

929

68

6

11

1,014

-

1,014

Investments in affiliates

107

-

-

-

107

-

107

Increase in property, plantand equipment / intangible
Assets

530

70

6

23

629

-

629

Thousands of U.S. dollars

2023
Japan

North

Asia &

EuropeAmerica

Subtotal

Oceania

Elimination

Consolidated

I. Net sales and operating
income$135,580$ 93,350$ 15,967$ 11,031$255,928

Intersegment sales

82,206

30

0

1,341

Net sales

217,786

93,38015,967

Operating income$ 18,019$ 3,572$ 1,468$$436,396$ 67,011$ 5,684$

Sales to third parties

II. Total assets$-$255,928

83,577(83,577)-

12,372

339,505(83,577)$255,928

704$ 23,763$ (2,419)$ 21,344$ 12,799$ 16,446$532,652$(29,664)$502,988$$

90$ 6,411$$

III. Other items
Depreciation andamortization
Investments in affiliates
Increase in property, plantand equipment / intangible
assets©2023 ICOM INCORPORATED

599

38

-

6,411

652

-

-

-

652

-

652

5,400

771

105

67

6,343

-

6,343

32

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
15. Segment Information (continued)iv) Geographical information(a) Sales
Sales categorized by country and region based on locations of customers by the Group for the years
ended March 31, 2023 and 2022 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

2023
¥

Japan

11,269

2022
¥

2023

10,379$ 84,394

USA

8,451

6,897

63,289North America (except for the USA)

2,493

1,709

18,670Europe

5,581

4,468

41,796

Asia & Oceania

4,899

3,853

36,688Others1,481

971

11,091

Total¥ 34,174

28,277$ 255,928©2023 ICOM INCORPORATED

33¥

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2023
15. Segment Information (continued)iv) Geographical information(b) Property, plant and equipment
Thousands of
U.S. dollars

Millions of yen

2023

2022

2023

¥

¥

6,270

$ 46,439

1,325

1,166

9,923

North America (except for the USA)

20

8

150

Europe

19

11

142

Asia & Oceania

174

182

1,303

Others

-

-

-

Total

¥ 7,739

7,637$ 57,957

Japan

6,201

USA

¥

Disclosure of the information by product and service for the years ended March 31, 2023 and 2022
has been omitted as sales of products and services to external customers in a single segment accountfor more than 90% of net sales in the consolidated statement of income.
Sales information by major customers for the years ended March 31, 2023 and 2022 was omitted as no single
customer accounted for 10% or more of consolidated net sales.
16.

Subsequent Events

The following distribution of retained earnings of the Company, which has not been reflected in theaccompanying consolidated financial statements for the year ended March 31, 2023, was approved at theCompany’s general shareholders’ meeting held on June 27, 2023:

Cash dividends (¥47 = U.S.$0.35 per share)©2023 ICOM INCORPORATED

34

Millions of yen

Thousands of
U.S. dollars

2023

2023

¥

$

675

5,055

Independent Auditor’s Report

The Board of Directors
ICOM INCORPORATEDOpinionWe have audited the accompanying consolidated financial statements of ICOMINCORPORATED and its consolidated subsidiaries (the Group), which comprise theconsolidated balance sheet as at March 31, 2023, and the consolidated statements of income,comprehensive income, changes in net assets, and cash flows for the year then ended, and notes
to the consolidated financial statements.
In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at March 31, 2023, and its
consolidated financial performance and its consolidated cash flows for the year then ended inaccordance with accounting principles generally accepted in Japan.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in Japan. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Consolidated Financial Statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are relevant to our audit of theconsolidated financial statements in Japan, and we have fulfilled our other ethicalresponsibilities in accordance with these requirements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significancein our audit of the consolidated financial statements of the current period. These matters wereaddressed in the context of the audit of the consolidated financial statements as a whole, and informing the auditor’s opinion thereon, and we do not provide a separate opinion on thesematters.
Appropriateness of sales cut-off of ICOM INCORPORATED
Description of Key Audit Matter

Auditor’s Response

ICOM INCORPORATED (the “Company”)
and its consolidated subsidiaries are mainly
engaged in the sale of telecommunicationequipment. The sale of telecommunicationequipment in the Japan segment is classified
as goods or services transferred at a point intime and amounted to ¥15,898 million

We mainly performed the following audit
procedures in examining the appropriatenessof the Company’s sales cut-off.

Ernst & Young ShinNihon LLC(1) Evaluation of internal controls･ In order to evaluate the design andoperating effectiveness of certain internal($119,059 thousand) (*) as described in Note
10 of the notes to the consolidated financial
statements, which accounted for 46.5% of net
sales on the consolidated financial statements.
In addition, the Company recognizes sales
that are quantitatively material in the Japan
segment.

controls over the appropriateness of thesales cut-off, we performed inspections of
relevant documents, made inquiries withthe related person in charge and conductedexaminations of internal control
implementation records, based on samples
we selected.

(2) Substantive procedures
As described in i) “Revenues from sales ofgoods and products” (m) “Significant･ In order to understand trends of therevenues and expenses” under Note 2
industry’s market environment and“Summary of Significant Accounting
business activities, we held discussions
Policies”, the Company recognizes revenue ofwith management and the responsible
telecommunication equipment at the time of
person in sales department.
delivery when control over merchandise and･ In order to examine whether sales are
finished products is transferred to therecorded in the appropriate accounting
customer and the Company’s performance
period, we selected transactions above a
obligation is satisfied. For sales of goods andcertain threshold and at random from sales
products within Japan, revenue is recognizeddata over a certain period of time before
at the time of shipment if the period from theand after the fiscal year end and traced
time of shipment to the time when control ofshipping invoices issued by distributors,
the goods and products is transferred to the
product acceptance receipts and bill ofcustomer is a normal period of time.
lading.
In this respect, there is a risk that sales are notrecorded in the appropriate accounting period, ･ In order to examine whether sales arerecorded in the appropriate accounting
mainly due to the following reasons.
period, we performed a balance･ The Company handles a wide variety ofconfirmation of accounts receivable fortelecommunication equipment andselected samples based on the risk usingtransacts throughout the year with a large
the end of the fiscal year as theamount of transactions in the fourth quarter
confirmation date.
of the fiscal year in particular.
･ In order to examine that there were no･ Although the transaction amount pertransactions that should be accounted fortransaction for merchandise and finishedas sales cancellations for the current fiscal
products is relatively small, the impact ofyear, we inspected sales data over a certain
incorrect processing could be material due
period of time after the fiscal year end andto the large volume of transactions.
reviewed whether there were any returns
or discounts above a certain threshold.
･ The Company has a sales target for amanagement goal, and since Company’ssales in the core Japan segment are an
important management indicator for
management and financial statement users,
an error in the timing of sales reporting
would have a significant impact on the
consolidated financial statements.
We, therefore, determined that theappropriateness of the Company’s sales cutErnst & Young ShinNihon LLC

off in the Japan segment was the mostsignificant in our audit of the consolidated
financial statements for the current period,
and accordingly, a key audit matter.
(*) The translation of Japanese yen amounts into U.S. dollar amounts has been made on the basis
described in Note 1 to the consolidated financial statements.
Other Information
The other information comprises the information included in the Annual Report that contains
audited consolidated financial statements but does not include the consolidated financial
statements and our auditor’s report thereon. Management is responsible for preparation anddisclosure of the other information. The Corporate Auditor and the Board of Corporate Auditors
are responsible for overseeing the Group’s reporting process of the other information.
Our opinion on the consolidated financial statements does not cover the other information and
we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is toread the other information and, in doing so, consider whether the other information is materiallyinconsistent with the consolidated financial statements or our knowledge obtained in the audit orotherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Responsibilities of Management, the Corporate Auditor and the Board of Corporate
Auditors for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with accounting principles generally accepted in Japan, andfor such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to fraud
or error.
In preparing the consolidated financial statements, management is responsible for assessing theGroup’s ability to continue as a going concern and disclosing, as required by accounting
principles generally accepted in Japan, matters related to going concern.
The Corporate Auditor and the Board of Corporate Auditors are responsible for overseeing theGroup’s financial reporting process.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and toissue an auditor’s report that includes our opinion. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on the basis of these consolidated
financial statements.
Ernst & Young ShinNihon LLC

As part of an audit in accordance with auditing standards generally accepted in Japan, we
exercise professional judgment and maintain professional skepticism throughout the audit. We
also:
・ Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion.
・ Consider internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances for our risk assessments, while the purpose of the audit of
the consolidated financial statements is not expressing an opinion on the effectiveness of theGroup’s internal control.
・ Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
・ Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Group’s ability tocontinue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the
consolidated financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor’s report. However, future events or conditions may cause the Group to cease tocontinue as a going concern.
・ Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentationin accordance with accounting principles generally accepted in Japan.
・ Obtain sufficient appropriate audit evidence regarding the financial information of theentities or business activities within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance ofthe group audit. We remain solely responsible for our audit opinion.
We communicate with the Corporate Auditor and the Board of Corporate Auditors regarding,among other matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our audit.
We also provide the Corporate Auditor and the Board of Corporate Auditors with a statementthat we have complied with the ethical requirements regarding independence that are relevant toour audit of the consolidated financial statements in Japan, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence, andwhere applicable, related safeguards.

Ernst & Young ShinNihon LLC

From the matters communicated with the Corporate Auditor and the Board of Corporate
Auditors, we determine those matters that were of most significance in the audit of theconsolidated financial statements of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a mattershould not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan
Our firm and its designated engagement partners do not have any interest in the Group which is
required to be disclosed pursuant to the provisions of the Certified Public Accountants Act ofJapan.
Convenience Translation
The U.S. dollar amounts in the accompanying consolidated financial statements with respect tothe year ended March 31, 2023 are presented solely for convenience. Our audit also included thetranslation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, suchtranslation has been made on the basis described in Note 1 to the consolidated financial
statements.
Ernst & Young ShinNihon LLC
Osaka, Japan
August 10, 2023

/s/ Kazuaki Kaneko
Kazuaki Kaneko
Designated Engagement Partner
Certified Public Accountant/s/ Yasuhiro Takata
Yasuhiro Takata
Designated Engagement Partner
Certified Public Accountant

Ernst & Young ShinNihon LLC

Other Information
BOARD OF DIRECTORSAND AUDITORSSUBSIDIARIESTRANSFER AGENT
Mitsubishi UFJ Trust and Banking
Corporation
Tokyo Office:4-5, Marunouchi 1-chome,
Chiyoda-ku, Tokyo 100-8212,
Japan
Osaka Office:6-3, Fushimimachi 3-chome
Chuo-ku, Osaka, 541-0044,
Japan

Takayuki Seto

Icom America, Inc.
Icom (Europe) GmbH
Icom (Australia) Pty., Ltd.
Icom Spain, S.L.
PURECOM CO., LTD
ICOM ASIA COMPANY LIMITED
Wakayama Icom Inc.
Icom Information Products Inc.
Icom America License Holding LLC
ICOM CANADA HOLDINGS INC.
ICOM DO BRASIL
RADIOCOMUNICACAO LTDA.
ICOM CENTRAL AMERICA, S.DE
R.L.DE C.V.

Hiroshi Umemoto

AFFILIATES

Katsunori Sugimoto

Comforce Inc.
Position Co., Ltd.

Tokuzo Inoue

Chairman and Representative Director

Hiroshi Nakaoka

President and Representative Director

Kenichi Kojiyama

Director

Haruyuki Yoshizawa
Outside Director

Akifumi Honda

Outside Director

Yoko Murakami
Outside Director
AuditorOutside Auditor
Outside Auditor

EXECUTIVE OFFICERS

HEAD OFFICE DIRECTORY

Shigeyoshi Tanabe
Yoshiki Enomoto
Kenichi Noda
Mitsuhiro Nakatani
Masahiro Hasegawa

1-1-32, Kamiminami, Hirano-ku,
Osaka, 547-0003, Japan
Phone: 81-6-6793-5301
Fax: 81-6-6793-5305
URL http://www.icom.co.jp/(As of March 31, 2023）

Major shareholders

INVESTOR RELATIONS
Yoshiki Enomoto
Executive Officer
Accounting Department
1-1-32, Kamiminami, Hirano-ku,
Osaka, 547-0003, Japan
Phone: 81-6-6793-5301
Fax: 81-6-6793-5305
CORPORATE FACTS(As of March 31, 2023)
Established: July 1964
Employees: 599
Paid-in capital: ¥7,081 million
Authorized shares: 34,000,000
Issued and outstanding shares:
14,850,000
Shareholders: 10,551
Stock listing: Tokyo Stock Exchange

Thousands of shares%

Tokuzo Inoue

2,049

14.28

Gigapalace Inc.

1,472

10.26

UHPartners2. INC

1,379

9.61

HIKARI TSUSHIN. INC

1,185

8.26

The Icom Foundation

1,000

6.97

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

700

4.88

JVC KENWOOD Corporation

445

3.10

Sumitomo Realty & Development Co., Ltd

357

2.49

ICOM Employee Shareholding Association

335

2.33

Meiji Yasuda Life Insurance Company

326

2.27

©2023 ICOM INCORPORATEDContact:
Icom Incorporated
Office of the CEO
Tel: +81 (0)6-6793-5301
Email: BMD＠icom.co.jp
URL:https://www.icomjapan.com/●Icom Incorporated, Icom and the ICOM logo are registered trademarks of Icom Incorporated.