YEAR ENDED MARCH 31, 2020

ICOM INCORPORATED

Financial Highlights
ICOM INCORPORATED AND SUBSIDIARIES
Years ended March 31, 2020, 2019 and 2018

Thousands of
U.S. dollars

Millions of yen

Net sales
Operating income
Profit before income taxes
ProfitProfit attributable to owners of parent¥

Total assets¥

Amounts per share:
Net assets
Profit – basic
Cash dividends

2020
30,533
2,300
2,542
1,929
1,929

¥

2019
29,700
2,443
2,707
1,964
1,964

¥

61,70461,063¥¥2018
24,881
791
877
626
626

2020
$ 280,557
21,13423,35817,725
17,72559,204$ 566,976

Yen

U.S. dollars¥ 3,732.50
132.5745.00¥ 3,772.56
130.44
53.00¥ 3,654.65
42.26
30.00

$

34.66
1.20
0.49

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥108.83 = U.S.$1.00, the exchange rate prevailing on March 31, 2020.
2. Amounts shown in millions of yen and thousands of dollars are rounded off to the nearest million or thousand.

Net Sales

Operating Income(Millions of yen)

(Millions of yen)

2,443
33,00030,533

2,300

2,500

29,70031,0002,000

29,0001,500

27,0001,000

791
24,881

25,000500
023,000
2018

2019

2018

2020

Profit attributable to owners of parent

Total Assets(Millions of yen)

(Millions of yen)

1,964

2019

2020

1,929

2,000
61,70462,000

1,500
1,000

61,063626
60,00059,204500
58,000

0
2018

2019

2020

2018

2019

2020

ICOM INCORPORATED ANNUAL REPORT 20201

Operating Highlights
GEOGRAPHICAL SEGMENT INFORMATION
Years ended March 31, 2020 and 2019
Millions of yen

Net sales2020
2019¥ 27,060¥ 26,900
8,276
7,973
1,299
1,208
1,411
1,492
(7,513)(7,873)¥ 30,533¥ 29,700

Japan
North America
EuropeAsia & Oceania
Eliminations
Consolidated total

Thousands of U.S. dollars

Operating income (loss)
2020
2019
¥ 1,968¥ 2,317
(2)
74
75
59
74
93
185
(100)
¥ 2,300¥ 2,443

Net sales2020$ 248,645
76,045
11,936
12,965(69,034)$ 280,557

Operating income(loss)
2020$ 18,084
(19)
689
680
1,700
$ 21,134

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥108.83 = U.S.$1.00, the exchange rate prevailing on March 31, 2020.
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

27,06026,900

North America

25,000Europe20,000Asia & Oceania

15,000
8,276

7,973

10,000

1,208

5,000

1,492

1,299 1,411

0
2019

2020

Operating Income (Loss)(Millions of yen)

Japan

2,317

North America

1,968

2,500

Europe2,000

Asia & Oceania
1,500
1,000
500

74

59

93

(2)

75

74

0
(500)
2019

2020

ICOM INCORPORATED ANNUAL REPORT 20202

Operating Highlights
OVERSEAS SALES
Years ended March 31, 2020 and 2019
Millions of yen

North America
EuropeAsia & Oceania
Other
Overseas total
Domestic total
Consolidated total

2020 (Unaudited)¥ 7,499
24.6%
4,015
13.1
4,997
16.4
746
2.4
17,25756.5
13,27643.5¥ 30,533 100.0%

Thousands of U.S. dollars

2019¥ 7,382
24.9%
3,743
12.6
4,639
15.6
565
1.9
16,32955.0
13,37145.0¥ 29,700 100.0%

2020 (Unaudited)$ 68,905
36,89245,916
6,855
158,568
121,989$ 280,557

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥108.83 = U.S.$1.00, the exchange rate prevailing on March 31, 2020.
2. Amounts shown in millions of yen and thousands of dollars are rounded off to the nearest million or thousand.

Net Sales 2019

Europe12.6%

Overseas
Sales
North America
24.9%
Other
1.9%

Domestic Sales
45.0%

Asia &
Oceania
15.6%

Net Sales 2020

Europe13.1%
Overseas
Sales

Domestic Sales
43.5%

North America
24.6%

Asia &
Oceania
16.4%

Other
2.4%

ICOM INCORPORATED ANNUAL REPORT 2020

3

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet
March 31, 2020

AssetsCurrent assets:
Cash and deposits (Notes 5, 6 and 12)
Notes and accounts receivable (Note 6)
Allowance for doubtful accounts

Millions of yen
2020
2019

Thousands of
U.S. dollars(Note 1)
2020

Total current assets¥ 27,687
6,937
(19)
6,918
9,298
2,678
46,581¥ 25,466
9,188
(14)
9,174
9,325
2,262
46,227$ 254,406
63,742(175)
63,56785,43524,608428,016

Property, plant and equipment:
Land
Buildings and structures
Machinery and equipment
Vehicles and otherConstruction in progress
Property, plant and equipment, at costLess accumulated depreciation
Property, plant and equipment, net (Note 16)

4,126
6,697
14,030239
56
25,148(17,418)
7,730

4,141
6,793
13,294217
40
24,485(16,888)
7,597

37,912
61,536
128,9172,196
515
231,076(160,048)
71,028Investments and other assets:
Investments in securities (Notes 6 and 7)
Investments in affiliates
Other
Other investments
Deferred income taxes (Note 10)
Guarantee deposits
Intangible assets (Note 16)
Allowance for doubtful accounts
Total investments and other assets
Total assets (Note 16)

139
2,226
595
985
3,135
341
(28)
7,393
¥ 61,704

132
3,289
445
1,002
2,165
260
(54)
7,239
¥ 61,063

1,277
20,454
5,467
9,051
28,807
3,133(257)
67,932$ 566,976

Inventories (Note 8)
Other current assets

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2020

4

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet
March 31, 2020

Thousands of
U.S. dollars(Note 1)Millions of yen

Liabilities and net assets
Current liabilities:
Accounts payable - trade (Note 6)
Accounts payable - otherAccrued income taxes (Note 10)
Accrued expenses
Accrued bonuses
Warranty reserves
Other current liabilities

2020

2019

2020

Total current liabilities¥ 1,696
897
140
658
567
39
154
4,151

¥ 1,095
614
587
625
788
50
353
4,112

$ 15,584
8,242
1,286
6,046
5,210
359
1,415
38,142Long-term liabilities:
Deferred tax liabilities (Note 10)
Liability for retirement benefits (Note 9)
Other long-term liabilities
Total long-term liabilities

53
1,377
520
1,950

–
1,122
525
1,647

487
12,653
4,778
17,918

7,081
10,44939,076

7,081
10,44937,88865,06596,012359,055(302)
56,304(106)
55,312(2,775)517,357

(80)
(168)
(453)
(701)
55,603¥ 61,704

33
187
(228)
(8)
55,304¥ 61,063(735)(1,544)(4,162)(6,441)
510,916$ 566,976

Net assets:
Shareholders’ equity (Note 11):
Common stock:
Authorized – 34,000,000 shares;
14,850,000 shares in 2020 and 2019
Issued –Capital surplus
Retained earnings (Note 17)
Less treasury stock, at cost:
111,063 shares in 2020 and 32,938 shares in 2019
Total shareholders’ equity
Accumulated other comprehensive loss
(Note 14):
Net unrealized holding (loss) gain on securities(Note 7)
Translation adjustments
Retirement benefit liability adjustments (Note 9)
Total accumulated other comprehensive loss
Total net assets
Total liabilities and net assets
See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2020

5

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement of Income
Year ended March 31, 2020

Thousands of
U.S. dollars(Note 1)Millions of yen

Net sales (Note 16)
Cost of sales (Notes 8 and 16)
Gross profit
Selling, general and administrative expenses(Notes 13 and 16)
Operating income (Note 16)
Other income (expenses):
Interest and dividend income
Gain on sales of investment in securities, net (Note 7)
Foreign exchange (loss) gain, net
Sales discounts
Settlement received
Other, net
Profit before income taxes
Income taxes (Note 10):
Current
DeferredProfitProfit attributable to owners of parent (Note 15)

2020¥ 30,533
17,812
12,721

2019¥ 29,700
16,915
12,7852020$ 280,557
163,668
116,889

10,421
2,300

10,342
2,443

95,755
21,134

117
70
(181)
(1)
258
(21)
242
2,542

125
12
166
(137)
–
98
264
2,707

1,075
643
(1,663)
(9)
2,371
(193)
2,224
23,358397
216
613¥ 1,929¥ 1,929708
35743¥ 1,964¥ 1,964

3,648
1,985
5,633
$ 17,725$ 17,725

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2020

6

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement ofComprehensive Income
Year ended March 31, 2020

Millions of yen

Thousands of
U.S. dollars(Note 1)

ProfitOther comprehensive income (Note 14):
Net unrealized holding loss on securities
Translation adjustments
Retirement benefit liability adjustments
Total other comprehensive loss
Comprehensive income

2020¥ 1,9292019¥ 1,9642020$ 17,725

(113)
(355)
(225)
(693)
¥ 1,236

(71)
42
(190)
(219)
¥ 1,745(1,038)(3,262)(2,067)(6,367)$ 11,358

Total comprehensive income attributable to:
Owners of parent¥ 1,236¥ 1,745$ 11,358

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2020

7

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement of
Changes in Net Assets
Year ended March 31, 2020
Millions of yen

Balance at April 1, 2018
Profit attributable toowners of parent
for the year
Cash dividends
Purchases of treasury
stock
Other changes
Balance at April 1, 2019
Profit attributable toowners of parent
for the year
Cash dividends
Purchases of treasury
stock
Other changes
Balance at March 31,
2020

Number ofshares in
issue

Commonstock

CapitalsurplusRetainedearnings

Treasurystock, at costNet
unrealized
holding(loss) gain
on securities

14,850,000¥ 7,081¥ 10,449¥ 36,516¥ (105)

¥ 104

¥ 145

–
–

–
–

–
–

1,964
(592)

–
–

–
–

–
–

–
–

–
–

–
–

(1)
–

14,850,000¥ 7,081¥ 10,449¥ 37,888¥ (106)

–
–

–
–

–
–

1,929
(741)

–
–

–
–

–
–

14,850,000¥ 7,081¥ 10,449

Translation
adjustments

Retirement
benefit liability
adjustments(38)¥ 54,152

–
–

–
–

1,964
(592)

–
(71)

–
42

–
(190)

(1)
(219)

33

¥ 187

¥ (228)¥ 55,304

–
–

–
–

–
–

–
–

1,929
(741)

–
–

(196)
–

–
(113)

–
(355)

–
(225)

(196)
(693)

¥ 39,076¥ (302)¥ (80)¥ (168)¥ (453)¥ 55,603

Translation
adjustments

Retirement
benefit liability
adjustments

Total net
assets303$ 1,718$ (2,095)$ 508,168¥¥

Total net
assetsThousands of U.S. dollars (Note 1)

Balance at April 1, 2019
Profit attributable toowners of parent
for the year
Cash dividends
Purchases of treasury
stock
Other changes
Balance at March 31,
2020

Net
unrealized
holding(loss) gain
on securities

Commonstock

CapitalsurplusRetainedearnings

Treasurystock, at cost

$ 65,065$ 96,012$ 348,139

$

–
–

–
–

17,725(6,809)

–
–

–
–

–
–

–
–

17,725(6,809)

–
–

–
–

–
–

(1,801)––(1,038)–(3,262)–(2,067)(1,801)(6,367)$ 65,065$ 96,012$ 359,055$ (2,775)$ (735)$ (1,544)$ (4,162)$ 510,916

(974)

$

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2020

8

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement of Cash Flows
Year ended March 31, 2020

Thousands of
U.S. dollars(Note 1)Millions of yen

Operating activities:
Profit before income taxes
Adjustments for:
Depreciation and amortization
Interest and dividend income
Foreign exchange loss, net
Decrease (increase) in notes and accounts receivable
Increase in inventories
Increase (decrease) in accounts payable - trade
Settlement received
Other, net
Subtotal
Income taxes paid
Settlement package received
Net cash provided by (used in) operating activities
Investing activities:(Increase) decrease in time deposits with original
maturities in excess of three months
Purchases of property, plant and equipment
Purchases of intangible assets
Purchases of investments in securities
Proceeds from sales and redemption of investments insecurities
Interest and dividend income received
Other, net
Net cash used in investing activities
Financing activities:
Purchases of treasury stock
Cash dividends paid
Net cash used in financing activities
Effect of exchange rate changes on cash and cash
equivalents
Net decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 5)

2020

2019

2020

¥ 2,542¥ 2,707$ 23,358

1,225
(117)
40
2,202
(89)
648
(258)
(1,249)
4,944
(829)
258
4,373

1,021
(125)
10
(4,047)(2,299)(381)–
705(2,409)(500)–(2,909)11,256(1,075)368
20,233(818)
5,954(2,371)(11,477)
45,428(7,617)
2,371
40,182(3,552)(1,269)
(206)
(847)

4
(1,275)
(222)
(349)

(32,638)(11,660)(1,893)(7,783)

1,824
131
(640)
(4,559)

258
130
(10)
(1,464)

16,7601,204(5,881)(41,891)

(196)
(741)
(937)

(1)
(592)
(593)

(1,801)(6,809)(8,610)(101)(1,224)23,376¥ 22,152

23(4,943)28,319¥ 23,376(928)(11,247)
214,794$ 203,547

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2020

9

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2020

1. Basis of Preparation
The accompanying consolidated financial statements of ICOM INCORPORATED (the “Company”) and its subsidiaries are preparedon the basis of accounting principles generally accepted in Japan, which are different in certain respects as to the application anddisclosure requirements of International Financial Reporting Standards, 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 preparing the accompanying consolidated financial statements, certain reclassifications have been made to the consolidated
financial statements issued domestically for the convenience of readers outside Japan. Certain reclassifications of previously reported
amounts have been made to conform the consolidated financial statements for the year ended March 31, 2019 to the 2020 presentation.
Such reclassifications had no effect on net assets.
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 matterof arithmetic computation only, and has been made at ¥108.83 = U.S.$1.00, the approximate rate of exchange in effect on March 31,
2020. 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 other rate.

2. Summary of Significant Accounting Policies(a) Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and the companies which it controls
directly or indirectly. Two companies over which the Company exercises significant influence in terms of their operating andfinancial 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 unrealizedintercompany gains and losses among the Company and the subsidiaries have been entirely eliminated.
The financial statements of certain consolidated subsidiary whose fiscal year end is December 31 has been included inconsolidation 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 withbanks withdrawable on demand, and short-term investments which are readily convertible to cash subject to an insignificant riskof any changes in their value and which were purchased with 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 historical exchange rates. Adjustments resulting fromtranslating accounts denominated in foreign currencies are not included in the determination of profit in the accompanying
consolidated financial statements, but are reported as “Translation adjustments,” a component of net assets.
Revenue and expense accounts 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 atthe balance sheet date, except that receivables hedged by qualified forward foreign exchange contracts are translated at thecorresponding contract rates. Gain or loss on each translation is credited 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 andunrealized, are credited or charged to income. Held-to-maturity debt securities are stated at their amortized cost. Marketablesecurities classified as other securities are carried at fair value with any changes in unrealized holding gain or loss, net of theapplicable income taxes, reported as a separate component of net assets. Non-marketable securities classified as other securities
are carried at cost determined by the moving average method.
Securities held by the Company and its subsidiaries including investments in securities, which are not accounted for on an equity
basis, are all classified as “other securities” and have been accounted for as outlined above.

ICOM INCORPORATED ANNUAL REPORT 2020

10

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
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 of cost 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 the estimated useful lives of the respective assets asprescribed in the Corporation Tax Law of Japan, except that the straight-line method is applied to buildings (other than structuresattached to the buildings) acquired on or after April 1, 1998 and structures attached to buildings and other structures acquired on
or after 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 lives of the respective assets
as prescribed in the Corporation Tax Law of Japan. Expenditures related to the development of computer software intended forinternal use are charged to income when incurred, except if it is anticipated that this software will contribute to the generation ofincome or to future cost savings. Such expenditures are capitalized as assets and amortized by the straight-line method over an
estimated useful 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 estimate of 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 after the balance sheet date, which are
attributable to the current fiscal year.

(k) Warranty reserves
Warranty reserves for certain overseas subsidiaries are provided for anticipated future repair costs based on the historical ratio
calculated using product repair costs against net sales, which are attributable to the current fiscal year.

(l) Liability for retirement benefits
Liability for retirement benefits is provided mainly at an amount calculated based on the retirement benefit obligation less thefair value of the pension plan assets. The retirement benefit obligation is attributed to each period 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 is recognized by the straightline method over ten years, which is within the average remaining years of service of eligible employees.

ICOM INCORPORATED ANNUAL REPORT 2020

11

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
2. Summary of Significant Accounting Policies (continued)(m) 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 notentered into for speculative purposes.
Under the accounting standard for financial instruments, gain or loss on derivatives designated as hedging instruments isdeferred until the loss or gain on the underlying hedged items is recognized. Forward foreign exchange contracts which meetcertain conditions are accounted for by a method under which the foreign currency deposits and receivables are translated at theircorresponding 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.

(n) Distribution of retained earnings
Under the Companies Act of Japan and the Company’s Articles of Incorporation, the distribution of retained earnings withrespect to a given fiscal year end is made by resolution of the shareholders at a general meeting held subsequent to the close of thefinancial period. The distribution of retained earnings with respect to interim financial periods is made by resolution of the Boardof Directors. (Please refer to Note 18.)

3. Accounting standards issued but not yet effective
Accounting Standard and Implementation Guidance for Revenue Recognition“Accounting Standard for Revenue Recognition” (ASBJ Statement No.29, March 31, 2020)“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No.30, March 31, 2020)“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No.19, March 31, 2020)(i) Overview
The International Accounting Standards Board (hereinafter referred to as the “IASB”) and the Financial AccountingStandards Board (hereinafter referred to as the “FASB”) in the United States co-developed comprehensive accounting
standards for revenue recognition and issued “Revenue from Contracts with Customers” (IFRS 15 by the IASB and Topic
606 by the FASB) in May 2014. The ASBJ developed comprehensive accounting standards on revenue recognition and issued
them in conjunction with the implementation guidance based on fact that IFRS 15 is applied from fiscal years starting on orafter January 1, 2018 and Topic 606 is applied from fiscal years starting after December 15, 2017.
As the basic policy in developing accounting standards for revenue recognition, the ASBJ defined the accounting standard
starting with incorporating the basic principle of IFRS 15 from a standpoint of comparability between financial statements,
which is one benefit of ensuring consistency with IFRS 15.
Furthermore, the ASBJ added alternative accounting treatment without impairing comparability when there are matters to
be considered related to accounting in practices, etc. common in Japan.
(ii) Scheduled date of adoption
The Company expects to adopt the accounting standard and implementation guidance from the beginning of the fiscal year
ending March 31, 2022.
(iii) Impact of the adoption of accounting standard and implementation guidance
The Company is currently evaluating the effect of the adoption of the accounting standard and the implementation guidanceon its consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2020

12

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
3. Accounting standards issued but not yet effective (continued)
Accounting Standard for Fair Value Measurement and Related Implementation Guidance“Accounting Standard for Fair Value Measurement” (ASBJ Statement No. 30, July 4, 2019)“Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9, July 4, 2019)“Accounting Standard for Financial Instruments” (ASBJ Statement No. 10, July 4, 2019)“Implementation Guidance on Accounting Standard for Fair Value Measurement” (ASBJ Guidance No. 31, July 4, 2019)“Implementation Guidance on Disclosures about Fair Value of Financial Instruments” (ASBJ Guidance No.19, March 31, 2020)(i) Overview
Given that the IASB and the FASB have issued IFRS 13 “Fair Value Measurement” and FASB Accounting Standards
Codification Topic 820 “Fair Value Measurement” as similar detailed guidance for fair value measurement, the ASBJ
deliberated on how to ensure consistency between Japanese and international accounting standards mainly related to theguidance and disclosures for the market value of financial instruments. Accordingly, the ASBJ issued “Accounting Standard
for Fair Value Measurement” and other standards.
As the basic policy in developing accounting standards for fair value measurement, the ASBJ essentially incorporated allof the provisions in IFRS 13 from a standpoint of comparability among financial statements of domestic and overseas entities
through a uniform measurement method.
Furthermore, taking into account the common practices in Japan, additional treatments for individual items have been
provided to the extent that the comparability between financial statements is not impaired.

(ii) Scheduled date of adoption
The Company expects to adopt the accounting standards and related implementation guidance from the beginning of the
fiscal year ending March 31, 2022.

(iii) Impact of adoption
The Company has not yet determined the effect of the adoption of the accounting standards and related implementation
guidance on it consolidated financial statements as of preparing the consolidated financial statements.

4. Additional information
Impact of COVID-19 outbreak on accounting estimates.
During the fiscal year ending March 31, 2021, because restrictions on economic activity have been implemented worldwide due tothe COVID-19 outbreak, sales activities, such as business events, have decreased or been postponed. In addition, these restrictions
have resulted in some delays in the delivery of raw materials. However, given the relaxation of restrictions in some areas, business
operations are expected to gradually return to normal by the second half of the fiscal year ending March 31, 2021. The Groupmakes accounting estimates such as impairment testing of fixed assets based on these assumptions.

ICOM INCORPORATED ANNUAL REPORT 2020

13

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
5. 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, 2020 and 2019 is summarized asfollows:

Cash and deposits
Marketable securities
SubtotalTime deposits with original maturities in excess of
three months
Marketable securities with original maturities inexcess of three months
Cash and cash equivalents¥¥

Millions of yen
2020
2019
27,687¥ 25,466––
27,687¥ 25,466(5,535)¥–
22,152Thousands of
U.S. dollars
2020$ 254,406–$ 254,406(50,859)(2,090)¥–23,376$–
203,547

6. 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 Company
and its consolidated subsidiaries (“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, the Group is exposed toforeign currency exchange rate fluctuation risk arising from trade receivables denominated in foreign currencies.
Marketable securities and investments in securities are exposed to market risk. Those securities are composed of mainly
corporate bonds in other securities and the shares of common stock of other companies with which it has business relationships.
Fair values of those securities are periodically reported to board of directors meetings.
Guarantee deposits are mostly related to lease deposit with office renting.
Most of trade accounts payable have payment due dates within two months. The Group is exposed to foreign currency
exchange rate fluctuation risk arising from those denominated in foreign currencies.
Regarding derivatives, the Group enters into forward foreign exchange contracts to reduce the foreign 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 methodof hedge accounting, hedging instruments and hedged items, hedging policy, and the assessment of the effectiveness ofhedging activities can be found in “(m) Hedge accounting” in Note 2 “Summary of Significant Accounting Policies”.

ICOM INCORPORATED ANNUAL REPORT 2020

14

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
6

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 trade receivables, the credit
department monitors credit worthiness of main customers periodically, in principle, and monitors due dates andoutstanding balances by customer. In addition, the Group is making efforts to 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 corporate bonds or othersecurities with high credit ratings. Accordingly, the Group believes that the 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 derivativetransactions 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 inforeign currencies, the Group identifies the foreign currency exchange risk by each currency and enters into forward
foreign exchange contracts to hedge such risk.
For marketable securities and investments in securities, the Group periodically reviews the fair values 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
representative director, in advance, approves them within the limits reported at the Board of Directors meeting. Resultsof derivative transactions are reported at the monthly Board of Directors meetings. The consolidated subsidiaries do
not enter into derivative transactions.
(c) Monitoring of liquidity risk (the risk that the Group may not be able to meet its obligations on the scheduled due dates)
Based on reports from each division, the accounting department of the Company prepares and updates its cash flowplans on a timely basis and maintains liquidity of assets for payment to manage liquidity risk. The consolidated
subsidiaries monitor liquidity risk in the same manner.
iv) Supplementary explanation of the estimated fair value of financial instruments
The fair value of financial instruments is based on their quoted market price, if available. When there is no quoted market
price available, fair value is reasonably estimated. Since various assumptions and factors are reflected in estimating the fairvalue, different assumptions and factors could result in different fair values. In addition, the notional amounts of derivatives
in Note 13. “Derivatives and Hedging Activities” are not necessarily indicative of the actual market risk involved inderivative transactions.

ICOM INCORPORATED ANNUAL REPORT 2020

15

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
6. Financial Instruments (continued)(2) Estimated fair value of financial instruments
The carrying value, fair value and unrealized gain (loss) of the financial instruments on the consolidated balance sheets at March
31, 2020 and 2019 are shown in the following table. The following table does not include financial instruments for which it isextremely difficult to determine the fair value. (Please refer to Note ii below).
Millions of yen
2020
Carrying
value
Assets(1) Cash and deposits(2) Notes and accounts
receivable(3) Marketable securities andinvestments in securities
Total assets
Liabilities(1) Accounts payable - trade
Total liabilities¥

27,687

2019

Fair value

Unrealized
gain (loss)

¥

¥

6,937

27,687
6,937–

Carrying
value
¥

–

25,466

Fair value

Unrealized
gain (loss)

¥

¥

9,188

25,466
9,188

–
–

¥

2,166
36,790¥2,166
36,790

¥

–
–

¥

3,227
37,881¥

3,228
37,882

¥

–
–

¥
¥

1,696
1,696

¥
¥

1,696
1,696

¥
¥

–
–

¥
¥

1,095
1,095

¥
¥

1,095
1,095

¥
¥

–
–

Thousands of U.S. dollars
2020
Carrying
Unrealized
Fair value
value
gain (loss)
Assets(1) Cash and deposits(2) Notes and accounts
receivable(3) Marketable securities andinvestments in securities
Total assets
Liabilities(1) Accounts payable - trade
Total liabilities$

254,406$

63,742

254,406$

63,742––$

19,903
338,051$

19,903
338,051

$

–
–

$
$

15,584
15,584$$

15,584
15,584$$––

Notes:i) Methods to determine the fair value of financial instruments are as follows:
Assets(1) Cash and deposits, and (2) Notes and accounts receivable
Since these items are settled in a short period of time, their carrying value approximate the fair value.
(3) Marketable securities and investments in securities
The fair value of equity securities is based on quoted market prices. The fair value of debt securities is based oneither quoted market prices or the prices provided by the financial institutions making markets for these securities. For
information on securities classified by holding purpose, please refer to Note 8.
Liabilities(1) Accounts payable - trade
Since this item is settled in a short period of time, its carrying value approximates the fair value.

ICOM INCORPORATED ANNUAL REPORT 2020

16

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
6

Financial Instruments (continued)(2) Estimated fair value of financial instruments (continued)ii)

Financial instruments for which it is extremely difficult to determine the fair value are as follows:

Unlisted equity securities
Guarantee deposits

Millions of yen
2020
2019
199
¥
194
3,135
2,165

¥

Thousands of
U.S. dollars
2020
$
1,828
28,807Since there is no market price for unlisted equity securities and it is difficult to determine the fair value, they are notincluded in investments in securities in the preceding table estimated fair value.
For guarantee deposits with no fixed repayment date, there are no market price and their future cash flow cannot be
estimated. Furthermore, as their fair value is recognized as extremely difficult to determine, they are not subject to disclosureof fair value(3) Redemption schedule
The redemption schedule for financial instruments receivable and marketable securities and investments in securities withmaturity dates is summarized as follows:
Millions of yen

Due within
one year
Cash and deposits¥
Notes and accounts
receivable
Marketable securities
and investments insecurities:
Other securities withmaturity dates
Corporate bonds
Other
Total
¥

27,687

Due after
ten years¥–

Due within
one year¥

25,4662019
Due after
Due after
one yearfive years
through five through ten
years
years
¥
–
¥
–

Due after
ten years
¥

–

6,937

–

–

–

9,188

–

–

–

–
–
34,624

900
–
900

1,000
–
1,000

–
–
–

–
–
34,654

300
–
300

1,500
–
1,500

1,000
–
1,000

Due within
one year
Cash and deposits$
Notes and accounts
receivable
Marketable securities
and investments insecurities:
Other securities withmaturity dates
Corporate bonds
Other
Total
$

2020
Due after
Due after
one yearfive years
throughthrough ten
five years
years
¥
–
¥
–

254,406

¥

¥

¥

¥

¥

¥

¥

Thousands of U.S. dollars
2020
Due after
Due after
one yearfive years
Due after ten
throughthrough ten
years
five years
years
$
–
$
–
$
–

63,742

–

–

–

–
–
318,148

8,270
–
8,270

9,189
–
9,189

–
–
–

$

$

$

ICOM INCORPORATED ANNUAL REPORT 2020

17

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
7

Marketable Securities and Investments in Securities

Marketable securities and investments in securities classified as other securities at March 31, 2020 and 2019 are summarized asfollows:
Millions of yen
Carrying
value
Securities whose carrying value
exceeds their acquisition cost:
Equity securities
Corporate bonds
Subtotal
Securities whose carrying value
does not exceed their acquisition cost:
Equity securities
Corporate bonds
Subtotal
Total

¥

¥

–
507
507

269
1,390
1,659
2,166

2020
Acquisition
cost

Unrealized
gain (loss)

¥

¥

¥

–
506
506

364
1,406
1,770
2,276

¥

–
1
1

Carrying
value

¥

(95)
(16)
(111)
(110)

¥

151
2,434
2,585

136
506
642
3,227

2019
Acquisition
cost

Unrealized
gain (loss)

¥

¥

¥

136
2,352
2,488

180
507
687
3,175

¥

15
82
97

(44)
(1)
(45)
52

Thousands of U.S. dollars
2020
Carrying
Acquisition Unrealized
gain (loss)
value
cost
Securities whose carrying value
exceeds their acquisition cost:
Equity securities
Corporate bonds
Subtotal
Securities whose carrying value
does not exceed their acquisition cost:
Equity securities
Corporate bonds
Subtotal
Total

$

–
4,659
4,659

2,472
12,772
15,244$ 19,903

$

–
4,649
4,649

3,345
12,91916,264$ 20,913

$

$

–
10
10

(873)
(147)
(1,020)(1,010)Since there is no market price for unlisted equity securities and it is difficult to determine the fair value, unlisted equity securities of¥199 million ($1,828 thousand) and ¥194 million at March 31, 2020 and 2019, respectively, are not included in the above table.
Sales of other securities for the years ended March 31, 2020 and 2019 are summarized as follows:

Sales
Aggregate gain
Aggregate loss¥

Millions of yen
2020
2019
1,722
¥
260
71
13
1
1

Thousands of
U.S. dollars
2020$ 15,823
652
9ICOM INCORPORATED ANNUAL REPORT 2020

18

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
8. Inventories
Inventories at March 31, 2020 and 2019 are consisted of the following:

Merchandise and finished products
Work in process
Raw materials and supplies
Total

¥

¥

Millions of yen
2020
2019
4,169
¥
4,887
81
110
5,048
4,328
9,298
¥
9,325

Thousands of
U.S. dollars
2020$
38,307744
46,384$85,435

Cost of sales are included loss on devaluation of inventories of ¥66 million ($606 thousand) and ¥147 million for the years ended
March 31, 2020 and 2019, respectively.

9

Retirement Benefit Plans(1) Outline of retirement benefits for employees
The Company and its domestic subsidiaries have employees’ defined benefit plans, i.e., corporate pension plans and lump-sum
payment plans.
The Company and its domestic subsidiaries pay additional retirement benefits to employees under certain circumstances.

(2) Liability for retirement benefits for the years ended March 31, 2020 and 2019i) The changes in retirement benefit obligation are outlined as follows (except for retirement benefit obligation calculated
by simplified method):

Retirement benefit obligation at beginning of year
Service cost
Interest cost
Actuarial loss
Retirement benefits paid
Retirement benefit obligation at end of year¥¥

Millions of yen
2020
2019
6,231
¥
5,756
229
216
52
48
99
281
(83)
(70)
6,528
¥
6,231

Thousands of
U.S. dollars
2020$
57,254
2,104
478
910
(763)
$
59,983ii) The changes in plan assets at fair value are outlined as follows (except for retirement benefit obligation calculated bysimplified method):Plan assets at fair value at beginning of year
Expected return on plan assets
Actuarial (loss) gainContributions by the employer
Retirement benefits paid
Plan assets at fair value at end of year¥¥

Millions of yen
2020
2019
5,550
¥
5,229
58
65
(209)
18
303
308
(83)
(70)
5,619
¥
5,550

Thousands of
U.S. dollars
2020$
50,997533(1,920)
2,784
(763)
$
51,631ICOM INCORPORATED ANNUAL REPORT 2020

19

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
9

Retirement Benefits Plans (continued)(2) Liability for retirement benefits for the years ended March 31, 2020 and 2019 (continued)iii) The changes in retirement benefits obligation calculated by simplified method are outlined as follows:

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

Millions of yen
2020
2019
441
¥
409
45
41
(19)
(9)
467
¥
441

Thousands of
U.S. dollars
2020
$
4,052
413
(174)
$
4,291

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:

Funded retirement benefit obligation
Plan assets at fair value
Unfunded retirement benefit obligation
Net amount of liabilities and assets recognized inconsolidated balance sheets
Liability for retirement benefits
Net amount of liabilities and assets recognized inconsolidated balance sheetsv)¥

Millions of yen
2020
2019
6,528
¥
6,231
(5,619)(5,550)
909
681
468
441
1,377
1,377

¥

1,377

Thousands of
U.S. dollars
2020$
59,984(51,631)
8,353
4,300
12,653
12,653

1,122
1,122
¥

1,122

$

12,653The components of retirement benefit expenses for the years ended March 31, 2020 and 2019 are outlined as follows:

Service cost
Interest cost
Expected return on plan assets
Amortization:
Actuarial gain
Retirement benefit expenses¥¥

Millions of yen
2020
2019
273
¥
257
52
48
(58)
(65)
(17)
250

¥

(10)
230

Thousands of
U.S. dollars
2020
$
2,508
478
(533)

$

(156)
2,297

ICOM INCORPORATED ANNUAL REPORT 2020

20

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
9

Retirement Benefits Plans (continued)(2) Liability for retirement benefits for the years ended March 31, 2020 and 2019 (continued)vi) The component of retirement benefit liability adjustments included in other comprehensive income before tax effects
are outlined as follows:

Actuarial loss¥¥

Millions of yen
2020
2019
(326)
¥
(273)
(326)
¥
(273)

Thousands of
U.S. dollars
2020$(2,996)$(2,996)vii) The balance of retirement benefit liability adjustments recognized in accumulated other comprehensive income before
tax effects is outlined as follows:

Unrecognized actuarial gain (loss)
Total

¥
¥

Millions of yen
2020
2019
653
¥
(327)
653
¥
(327)

Thousands of
U.S. dollars
2020$(6,000)$(6,000)viii) The plan assets by major category consist of the following:
2020

2019

Bonds
Equities
Cash and deposits
Other

65.0%
19.0%
7.0%
9.0%

67.0%
22.0%
2.0%
9.0%

Total

100.0%

100.0%The expected long-term rate of return on plan assets is determined as a result of consideration of both the portfolio allocation
to each class at present and in the future, and long-term expected rate of return from 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, 2020 and 2019 are as
follows:

Discount rates
Expected long-term rates of return on plan assets
Expected rate of compensation increases

2020

2019

0.8%
1.1%
1.5%

0.8%
1.2%
1.5%

ICOM INCORPORATED ANNUAL REPORT 2020

21

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
10 Income Taxes
Income taxes applicable to the Company and its domestic subsidiaries comprise corporation, enterprise and inhabitants’ taxes which,in the aggregate, resulted in statutory tax rate of approximately 30.6% for the years ended March 31, 2020 and 2019. 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, 2020 and 2019 as a percentage of profit
before income taxes are as follows:
2020
30.6%
0.6
0.9
(7.0)
(1.1)
–
0.4
(0.1)
0.2
0.4
(1.2)
0.4
24.1%

Statutory tax rate
Non-deductible entertainment expenses and other for income tax purposes
Per capita portion of inhabitants’ taxes
Tax credit for research and development costs
Differences in tax rates applicable to overseas subsidiaries
Income taxes for prior period
Unrealized gain (loss) on inventories
Equity in earnings of affiliates
Valuation allowance
Effect of Tax Cuts and Jobs Act of 2017 in U.S.
Accumulated earnings tax
Other
Effective tax rates

2019
30.6%
0.6
0.8
(9.5)
(0.2)
(0.4)
(1.2)
0.7
0.3
0.7
5.4
(0.4)
27.4%

The significant components of deferred tax assets and liabilities at March 31, 2020 and 2019 are summarized as follows:
Thousands of
U.S. dollars
2020

Millions of yen
2020
2019
Deferred tax assets:
Unrealized gain on inventories
Long-term accounts payable - otherAccrued bonuses
Accrued enterprise tax
Deferred revenue
Liability for retirement benefits
Allowance for doubtful accounts
Write down of investments in securities
Accrued legal welfare expense on bonuses
Net operating loss carryforward
Unrealized holding loss on securities
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Gain on sales of property, plant and equipment
Accumulated earnings tax
Accrued interest
Other
Total deferred tax liabilities
Net deferred tax assets

¥

¥

222
143
172
26
9
418
12
26
27
115
35
54
1,259
(75)
1,184

(137)
(114)
(0)
(1)
(252)
932

¥

¥

290
143
243
56
9
341
18
26
37
155
–
67
1,385
(71)
1,314

(150)
(145)
(1)
(16)
(312)
1,002

$

$

2,040
1,314
1,580
239
83
3,841
110
239
248
1,057
322
496
11,569(689)
10,880(1,259)(1,048)(0)(9)(2,316)8,564

ICOM INCORPORATED ANNUAL REPORT 2020

22

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
11 Shareholders’ Equity
The Companies Act (the “Act”) provides that an amount equal to 10% of the amount to be disbursed as distributions of capitalsurplus (other than the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capital reserve and thelegal reserve, respectively, until the sum of the capital reserve 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, 2020 and 2019 amounted to ¥293 million ($2,692 thousand).
In addition, upon the issuance and sale of new shares of capital stock, the entire amount of the proceeds is required 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-halfof 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, 2020 and 2019 are summarized as follows:
Number of shares
2020
Shares issued:
Common stock
Treasury stock:
Common stock

April 1, 2019

Increase

Decrease

March 31, 2020

14,850,000––

14,850,000

32,93878,125–

111,063

The increase in treasury stock of 78,125 shares is due to purchases of 78,000 shares by the resolution on board meeting and purchasesof 125 shares of less than one voting unit for the year ended March 31, 2020.
Number of shares
2019
Shares issued:
Common stock
Treasury stock:
Common stock

April 1, 2018

Increase

Decrease

March 31, 201914,850,000––

14,850,000

32,543395–

32,938The increase in treasury stock is due to purchases of 395 shares less than one voting unit for the year ended March 31, 2019.

ICOM INCORPORATED ANNUAL REPORT 2020

23

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
12 Derivatives and Hedging Activities
The estimated fair value of the derivatives positions outstanding which qualify for hedge accounting at March 31, 2020 and 2019 issummarized as follows:
Currency-related transactions
Thousands of U.S. dollars

Millions of yen

Method of hedge
accounting
Allocation method
for forward
foreign exchange
contracts

2020

2020
Fair
value

Notional
amountMorethan one
year

Fair
value

Transaction

Major
hedgeditem

Notional
amountMorethan oneyear

Forwardforeignexchange
contracts
Sell:
USD
EUR

Foreigncurrency
deposits

¥ 650
748

¥–
–

¥–
–

$ 5,973
6,873

$–
–

$–
–

¥ 1,398¥–¥–$ 12,846

$–

$–

Total

Millions of yen
2019
Method of hedge
accounting
Allocation method
for forward
foreign exchange
contracts

Major
hedgeditem

Foreigncurrency
deposits

Transaction
Forwardforeignexchange
contracts
Sell:
USD
Total

Notional
amountMorethan one
year

Fair
value

¥ 781

¥–

¥–

¥ 781

¥–

¥–

The forward foreign exchange contracts that qualify for the allocation method and the underlying foreign currency deposits areaccounted for as a unit. Therefore, the fair value of the forward foreign exchange contracts is included in cash and deposits.

13 Research and Development Costs
Research and development costs included in selling, general and administrative expenses for the years ended March 31, 2020 and2019 are as follows:

Research and development costs¥

Millions of yen
2020
2019
3,769
¥
3,864

Thousands of
U.S. dollars
2020$ 34,632

ICOM INCORPORATED ANNUAL REPORT 2020

24

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
14 Other Comprehensive Income
Reclassification adjustments and tax effects of other comprehensive income for the years ended March 31, 2020 and 2019 are as
follows:

Millions of yen
2020
2019
Net unrealized holding loss on securities:
Amount arising during the year
Reclassification adjustments
Before tax effects
Tax effects
Net unrealized holding loss on securities

¥

(99)
(63)
(162)
49
(113)

¥

(102)
(0)
(102)
31
(71)

Thousands of
U.S. dollars
2020
$

(910)
(579)
(1,489)451(1,038)Translation adjustments:
Amount arising during the year

(355)

42

(3,262)Retirement benefit liability adjustments:
Amount arising during the year
Reclassification adjustments
Before tax effects
Tax effects
Retirement benefit liability adjustments
Total other comprehensive (loss) income

(308)
(17)
(325)
100
(225)
(693)

(263)
(10)
(273)
83
(190)
(219)

(2,830)(156)(2,986)919(2,067)(6,367)¥¥$15 Amounts Per Share
Amounts per share at March 31, 2020 and 2019 and for the years then ended are as follows:Yen
Net assets
Profit attributable to owners of parent:
BasicCash dividends¥

2020
3,772.56
130.44
53.00

¥

2019
3,732.50
132.57
45.00

U.S. dollars
2020
$
34.66
1.20
0.49

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 owners of parent available for
distribution to shareholders of common stock and the weighted-average number of shares of common stock outstanding during eachyear. Cash dividends per share represent the cash dividends declared as applicable to the respective fiscal years.

ICOM INCORPORATED ANNUAL REPORT 2020

25

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
16 Segment Informationi)Outline of segment information
The Group’s reporting segments are divisions of the Group for which separate financial information is available, and whose
operating results are reviewed regularly by the board of directors meeting of the Group (the highest management decision makingbody) in order to allocate management resources and assess performance of operations.
The Group are primarily engaged in the manufacture and sale of telecommunications equipment. The subsidiaries are
independent business units and formulate comprehensive strategies for products and operate 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,” which primarily includes Germany and Spain; and “Asia &Oceania,” which primarily includes Australia, Taiwan and China.

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 inNote 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, 2020 and 2019 are as follows:Japan
I. Net sales and operating income
Sales to third parties
Intersegment sales
Net sales
Operating income (loss)
II. Total assets
III. Other items
Depreciation and amortization
Investments in affiliates
Increase in property, plant andequipment / intangible assets

North
America¥ 20,073
6,987
27,060¥ 1,968¥

Europe
¥

¥

8,264
12
8,276
(2)

¥

1,298
1
1,299
75

¥ 55,741

¥

5,949

¥

¥

¥

66
–

¥

1,146
139
1,456

34

Millions of yen
2020
Asia &
Oceania
Subtotal

Eliminations Consolidated¥¥ 30,533
7,513
38,046¥ 2,115

¥

¥

898
513
1,411
74

955

¥

1,395

3
–

¥

10
–

12

12

¥

¥

–
(7,513)(7,513)
185¥

30,533–30,5332,300¥ 64,040¥(2,336)¥

61,704

¥

¥

–
–

¥

1,225
139

1,225
139
1,514

–

ICOM INCORPORATED ANNUAL REPORT 2020

1,514

26

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
16. Segment Information (continued)iii) Information as to sales, profit or loss, assets and other items on each reporting segment (continued)

North
AmericaJapan
I. Net sales and operating income
Sales to third parties
Intersegment sales
Net sales
Operating income
II. Total assets
III. Other items
Depreciation and amortization
Investments in affiliates
Increase in property, plant andequipment / intangible assets¥ 19,566
7,334
26,900¥ 2,317¥¥¥¥ 54,975

¥

¥

¥

1,518

II. Total assets
III. Other items
Depreciation and amortization
Investments in affiliates
Increase in property, plant andequipment / intangible assets$$ 512,185$

13,379

6,191

¥

87
–

¥

¥

956
536
1,492
93

859

¥

3
–

¥

3

North
America$ 184,444
64,201
248,645$ 18,084

10,530
1,277

¥

¥

1,207
1
1,208
59

36

Japan
I. Net sales and operating income
Sales to third parties
Intersegment sales
Net sales
Operating income (loss)

Europe

7,971
2
7,973
74

921
132

Millions of yen
2019
Asia &
Oceania
Subtotal¥

29,7007,873
37,573
2,543

1,865

¥

10
–

¥

1

¥

¥

–
(7,873)(7,873)
(100)

¥

¥

29,700–29,7002,443

63,890¥(2,827)¥61,063

1,021
132

¥

–
–

¥

1,021
132

1,558

–

1,558

Thousands of U.S. dollars
2020
Asia &
EuropeOceania
Subtotal

Eliminations

Consolidated$$$ 11,927
9
11,936$689$$

75,935
110
76,045(19)$

54,663

$

8,775

$

606
–

$

28
–

313

¥

Eliminations Consolidated

110

$

8,251
4,714
12,965680$

280,557
69,034
349,591
19,434$–(69,034)(69,034)
1,700$

280,557–
280,557
21,134$

12,818$588,441$(21,465)$

566,976

$

92
–

$

11,256
1,277

$

–
–

$

11,256
1,277

110

$

13,912–ICOM INCORPORATED ANNUAL REPORT 2020

13,91227

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
16. 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, 2020
and 2019 were summarized as follows:

Millions of yen
Japan
USA
North America(except for the USA)
EuropeAsia & Oceania
Other
Total

¥

¥

2020
13,276
6,153

¥

1,346
4,015
4,997
746
30,533¥

2019
13,371
6,040
1,342
3,743
4,639
565
29,700Thousands of
U.S. dollars
2020$
121,989
56,537$

12,36836,89245,916
6,855
280,557(b) Property, plant and equipment
Property, plant and equipment categorized by country and region at March 31, 2020 and 2019 were summarized as follows:

Millions of yen
Japan
USA
North America(except for the USA)
EuropeAsia & Oceania
Total

¥

¥

2020
6,522
1,057

¥

7
15
129
7,730

2019
6,329
1,105

Thousands of
U.S. dollars
2020$
59,929
9,712

9
6
148
7,597

64
138
1,185
71,028Disclosure of the information by product and service for the years ended March 31, 2020 and 2019 has been omitted as
sales of products and services to external customers in a single segment account for more than 90% of net sales in the
consolidated statement of income.
(c) Information on Major Customers
Information on major customers for the year ended March 31, 2019 was summarized as follows:

Major customer
National Police Agency

Related segment
Japan

¥

Millions of yen
2020
2019
–
¥
3,840

Thousands of
U.S. dollars
2020
$
–

Disclosure of the information by major customer for the year ended March 31, 2020 has been omitted as no sales to a single
customer accounted for more than 10% of consolidated net sales.

ICOM INCORPORATED ANNUAL REPORT 2020

28

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
17. Subsequent Events(1) Distribution of retained earnings
The following distribution of retained earnings of the Company, which has not been reflected in the accompanying consolidated
financial statements for the year ended March 31, 2020, was approved at the Company’s general shareholders’ meeting held on
June 24, 2020:

Cash dividends (¥28 = U.S.$0.26 per share)

Millions of yen
2020
¥
413

Thousands of
U.S. dollars
2020
$
3,795

(2) Treasury stock acquisition
At the Board of Directors’ meeting held on May 13, 2020, the Company resolved to acquire treasury stock in accordance with
provisions of Article 156 of the Act, as applied by replacing terms pursuant to the provisions of Article 165, Paragraph 3 of theAct.
i)Reason for treasury stock acquisition
To implement flexible capital policies in accordance with the business environment and to improve capital efficiency

ii)

Overview of the acquisitiona)Type of stock to be acquired
Common stockb)

Total number of shares that can be acquired
Up to 500,000 sharesc)

Total acquisition cost
Up to ¥1,000 milliond)Acquisition method
Market purchasese)Acquisition period
From May 14, 2020 to September 30, 2020

ICOM INCORPORATED ANNUAL REPORT 202029

BOARD OF DIRECTORSAND AUDITORSTokuzo Inoue
Chairman and Representative Director

Masataka Harima
President and Representative Director

Kenichi Kojiyama
Director

Haruyuki Yoshizawa
Outside Director

Akifumi Honda
Outside Director

Yoko Murakami
Outside Director

Toshihiko Sano
AuditorHiroshi Umemoto
Outside Auditor

Katsunori Sugimoto
Outside Auditor

SUBSIDIARIESTRANSFER AGENT

Icom America, Inc.
Icom (Europe) GmbH
Icom (Australia) Pty., Ltd.
Icom Spain, S.L.
Asia Icom Inc.
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.

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, JapanINVESTOR RELATIONS

Comforce Inc.
Position Co., Ltd.

Keiichi Uehata
General Manager of Business
Management Department
1-1-32, Kamiminami, Hirano-ku,
Osaka, 547-0003, Japan
Phone: 81-6-6793-5301
Fax: 81-6-6793-5305

HEAD OFFICE DIRECTORYCORPORATE FACTS

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, 2020)
Established: July 1964
Employees: 613
Paid-in capital: ¥7,081 million
Authorized shares: 34,000,000
Issued and outstanding shares:
14,850,000
Shareholders: 8,891
Stock listing: Tokyo Stock Exchange

AFFILIATESEXECUTIVE OFFICERS
Hiroshi Nakaoka
Shinichi Matsuo
Shigeyoshi Tanabe
Yoshiki Enomoto
Kenichi Noda

(As of March 31, 2020)
Major shareholders
Tokuzo Inoue
Gigapalace Inc.
HIKARI TSUSHIN, INC.
The Icom Foundation
The Master Trust Bank of Japan, Ltd. (Trust account)
Japan Trustee Services Bank, Ltd. (Trust account)
JVC KENWOOD Corporation
Meiji Yasuda Life Insurance Company
ICOM Employee Shareholding Association
MUFG Bank, Ltd.

Thousands of shares
1,868
1,472
1,446
1,000
721
503
445
326
267
243