YEAR ENDED MARCH 31, 2021

ICOM INCORPORATED

Financial Highlights
ICOM INCORPORATED AND SUBSIDIARIES
Years ended March 31, 2021, 2020 and 2019

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

2021
27,941
1,890
2,259
1,737
1,737

¥

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

¥

61,66861,704¥¥2019
29,700
2,443
2,707
1,964
1,964

2021
$ 252,380
17,072
20,405
15,69015,69061,063$ 557,023

Yen

U.S. dollars¥ 3,772.56
130.4453.00¥ 3,937.75
120.1750.00¥ 3,732.50
132.57
45.00

$

35.57
1.09
0.45

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥110.71 = U.S.$1.00, the exchange rate prevailing on March 31, 2021.
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
33,00031,000

2,300

2,500

30,533

1,890

29,7002,000
27,941

29,0001,500

27,0001,000

25,000500
023,000
2019

2020

2019

2021

Profit attributable to owners of parent

Total Assets(Millions of yen)

(Millions of yen)

1,964

2020

2021

1,929
1,737

2,000

61,70462,0001,500

61,66861,0631,000
60,000500
58,000

0
2019

2020

2021

2019

2020

2021

ICOM INCORPORATED ANNUAL REPORT 2021

1

Operating Highlights
GEOGRAPHICAL SEGMENT INFORMATION
Years ended March 31, 2021 and 2020
Millions of yen

Net sales
2021
2020¥ 24,584¥ 27,060
8,087
8,276
1,820
1,299
1,202
1,411
(7,752)(7,513)¥ 27,941¥ 30,533

Japan
North America
EuropeAsia & Oceania
Eliminations
Consolidated total

Thousands of U.S. dollars

Operating income (loss)
2021
2020
¥ 1,648¥ 1,968
93
(2)
167
75
55
74
(73)
185
¥ 1,890¥ 2,300

Net sales2021$ 222,058
73,046
16,43910,858(70,021)$ 252,380

Operating income
2021$ 14,886
839
1,509
498
(660)
$ 17,072

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥110.71 = U.S.$1.00, the exchange rate prevailing on March 31, 2021.
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)

27,060Japan

24,584

North America

25,000Europe20,000Asia & Oceania

15,000
8,276

8,087

10,000
1,299

5,000

1,411

1,820 1,202

0
2020

2021

Operating Income(Millions of yen)

1,968

Japan

1,648

2,000

North America
Europe

1,500

Asia & Oceania

1,000
500

△2

75

74

93

167
55

0
(500)
2020

2021

ICOM INCORPORATED ANNUAL REPORT 2021

2

Operating Highlights
OVERSEAS SALES
Years ended March 31, 2021 and 2020
Millions of yen

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

2021 (Unaudited)¥ 7,410
26.5%
4,038
14.5
3,611
12.9
635
2.3
15,69456.2
12,24743.8¥ 27,941 100.0%

Thousands of U.S. dollars

2020¥ 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%

2021 (Unaudited)$ 66,932
36,47432,617
5,736
141,759
110,621$ 252,380

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥110.71 = U.S.$1.00, the exchange rate prevailing on March 31, 2021.
2. Amounts shown in millions of yen and thousands of dollars are rounded off to the nearest million or thousand.

Net Sales 2020

Europe13.1%

Overseas
Sales
North America
24.6%
Other
2.4%

Domestic Sales
43.5%

Asia &
Oceania
16.4%

Net Sales 2021

Europe14.5%
Overseas
Sales

Domestic Sales
43.8%

North America
26.5%

Other
2.3%

Asia &
Oceania
12.9%

ICOM INCORPORATED ANNUAL REPORT 2021

3

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet
March 31, 2021

AssetsCurrent assets:
Cash and deposits (Notes 5 and 6)
Marketable securities (Notes 6 and 7)
Notes and accounts receivable (Note 6)
Allowance for doubtful accounts

Millions of yen
2021
2020

Thousands of
U.S. dollars(Note 1)
2021

Total current assets¥ 26,323
302
5,955
(18)
5,937
10,7842,164
45,510¥ 27,687
–
6,937
(19)
6,918
9,298
2,678
46,581$ 237,765
2,728
53,789(163)
53,626
97,40819,547411,074

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)

4,295
6,748
14,154248
126
25,571(17,719)
7,852

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

38,79560,952
127,8482,240
1,138
230,973(160,049)
70,924

Investments and other assets:
Investments in securities (Notes 6 and 7)
Investments in affiliates
Other
Other investments
Deferred income taxes (Notes 4 and 10)
Guarantee deposits
Intangible assets (Note 16)
Allowance for doubtful accounts
Total investments and other assets
Total assets (Note 16)

115
4,307
641
906
2,140
225
(28)
8,306
¥ 61,668

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

1,039
38,903
5,790
8,184
19,3302,032(253)
75,025$ 557,023

Inventories (Note 8)
Other current assets

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2021

4

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet
March 31, 2021

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
Provision for accrued bonuses
Warranty reserves
Other current liabilities

2021

2020

Total current liabilities

969
592
502
654
439
33
308
3,497

¥ 1,696
897
140
658
567
39
154
4,151

Long-term liabilities:
Deferred tax liabilities (Note 10)
Liability for retirement benefits (Note 9)
Other long-term liabilities
Total long-term liabilities

145
1,002
506
1,653

53
1,377
520
1,950

1,310
9,051
4,570
14,931

7,081
10,44940,041

7,081
10,44939,076

63,96094,382361,675(1,445)56,126(302)
56,304(13,052)
506,965

230
375
(213)
392
56,518¥ 61,668

(80)
(168)
(453)
(701)
55,603¥ 61,704

2,077
3,387
(1,924)
3,540
510,505$ 557,023¥

Net assets:
Shareholders’ equity (Note 11):
Common stock:
Authorized – 34,000,000 shares;
14,850,000 shares in 2021 and 2020
Issued –Capital surplus
Retained earnings (Note 17)
Less treasury stock, at cost:
497,101 shares in 2021 and 111,063 shares in 2020
Total shareholders’ equity
Accumulated other comprehensive income (loss)(Note 14):
Net unrealized holding gain (loss) on securities(Note 7)
Translation adjustments
Retirement benefit liability adjustments (Note 9)
Total accumulated other comprehensive income (loss)
Total net assets
Total liabilities and net assets

2021
$

8,753
5,347
4,535
5,907
3,965
298
2,782
31,587

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2021

5

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement of Income
Year ended March 31, 2021

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

Net sales (Note 16)
Cost of sales (Note 8)
Gross profit
Selling, general and administrative expenses:
Advertising expenses
Packing and transportation costs
Provision of allowance for doubtful accounts
Salaries and allowances
Welfare expenses
Provision for bonuses
Retirement benefit expenses (Note 9)
Depreciation and amortization
Commission fee
Experimentation and research expenses (Note 13)
Other
Total selling, general and administrative expenses
Operating income (Note 16)
Other income (expenses):
Interest and dividend income
Gain on sales of investment in securities, net (Note 7)
Foreign exchange gain (loss), net
Commission for purchase of treasury stock
Equity in earnings (losses) of affiliates
Settlement received
Other, net
Profit before income taxes
Income taxes (Note 10):
Current
DeferredProfitProfit attributable to owners of parent (Note 15)2021¥ 27,941
16,26911,6722020¥ 30,533
17,812
12,7212021$ 252,380
146,951
105,429

595
299
1
2,418
722
139
114
173
638
3,595
1,088
9,782
1,890

743
341
9
2,529
719
183
89
158
635
3,769
1,246
10,421
2,300

5,374
2,701
9
21,841
6,522
1,255
1,030
1,563
5,763
32,472
9,827
88,357
17,072

80
22
288
(27)
(24)
–
30
369
2,259

117
70
(181)
0
6
258
(28)
242
2,542

723
199
2,601
244
(217)
–
(217)
3,333
20,405

591
(69)
522
¥ 1,737¥ 1,737

397
216
613
¥ 1,929¥ 1,929

5,338
(623)
4,715
$ 15,690$ 15,690

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2021

6

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement ofComprehensive Income
Year ended March 31, 2021

Millions of yen

ProfitOther comprehensive income (Note 14):
Net unrealized holding gain (loss) on securities
Translation adjustments
Retirement benefit liability adjustments
Total other comprehensive income (loss)
Comprehensive income
Total comprehensive income attributable to:
Owners of parent

Thousands of
U.S. dollars(Note 1)2021
¥ 1,7372020¥ 1,9292021$ 15,690

310
543
240
1,093
¥ 2,830

(113)
(355)
(225)
(693)
¥ 1,236

2,800
4,905
2,168
9,873
$ 25,563¥ 2,830¥ 1,236$ 25,563

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2021

7

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement of
Changes in Net Assets
Year ended March 31, 2021
Millions of yen

Balance at April 1, 2019
Profit attributable toowners of parent for
the year
Cash dividends
Purchases of treasury
stock
Other changes
Balance at April 1, 2020
Profit attributable toowners of parent for
the year
Cash dividends
Purchases of treasury
stock
Other changes
Balance at March 31,
2021

Number ofshares in
issue

Commonstock

CapitalsurplusRetainedearnings

14,850,000¥ 7,081¥ 10,449¥ 37,888

–
–

–
–

–
–

1,929
(741)

–
–

–
–

–
–

–
–

14,850,000¥ 7,081¥ 10,449¥ 39,076

–
–

–
–

–
–

–
–

–
–

14,850,000¥ 7,081Net
unrealized
holding
gain (loss)
on securities

Translation
adjustments

Retirement
benefit liability
adjustments

Total net
assets33¥ 187¥ (228)¥ 55,304

–
–

–
–

–
–

–
–

1,929
(741)

(196)
–

–
(113)

–
(355)

–
(225)

(196)
(693)

(302)

¥ (80)¥ (168)¥ (453)¥ 55,603

1,737
(772)

–
–

–
–

–
–

–
–

1,737
(772)

–
–

–
–

(1,143)
–

–
310

–
543

–
240

(1,143)
1,093¥ 10,449¥ 40,041¥ (1,445)

¥ 230

¥ 375

¥ (213)¥ 56,518

Translation
adjustments

Retirement
benefit liability
adjustments

Total net
assetsTreasurystock, at cost
¥

¥

(106)

¥

Thousands of U.S. dollars (Note 1)

Balance at April 1, 2020
Profit attributable toowners of parent for
the year
Cash dividends
Purchases of treasury
stock
Other changes
Balance at March 31,
2021

Commonstock

CapitalsurplusRetainedearnings

Treasurystock, at costNet
unrealized
holding
gain (loss)
on securities$ 63,960$ 94,382$ 352,958$ (2,728)$ (723)$ (1,518)$ (4,092)$ 502,239

–
–

–
–

15,690(6,973)

–
–

–
–

–
–

–
–

15,690(6,973)

–
–

–
–

–
–

(10,324)
–

–
2,800

–
4,905

–
2,168

(10,324)
9,872$ 63,960$ 94,382$ 361,675$ (13,052)$ 2,077$ 3,387$ (1,924)$ 510,505

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2021

8

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement of Cash Flows
Year ended March 31, 2021

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 (gain) loss, net
Decrease in notes and accounts receivable
Increase in inventories(Decrease) increase in accounts payable - trade
Settlement received
Other, net
Subtotal
Income taxes paid
Settlement package received
Net cash provided by operating activities
Investing activities:
Decrease (increase) 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 provided by (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 increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 5)

2021

2020

2021

¥ 2,259¥ 2,542$ 20,405

1,236
(80)
(66)
1,049
(1,346)
(811)
–
983
3,224
(253)
–
2,971

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

11,164
(723)
(596)
9,475
(12,158)(7,325)–
8,879
29,121(2,285)–
26,836

3,509(1,254)(33)(2,021)(3,552)(1,269)
(206)
(847)

31,695(11,327)(298)(18,255)

89
81
362
733

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

804
732
3,270
6,621

(1,169)(772)(1,941)

(196)
(741)
(937)

(10,559)(6,973)(17,532)

210
1,973
22,152¥ 24,125(101)(1,224)23,376¥ 22,152

1,897
17,822200,090$ 217,912

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2021

9

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2021

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 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, 2020 to the 2021 presentation.
Such reclassifications had no effect on net profit for the fiscal year.
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 ¥110.71 = U.S.$1.00, the approximate rate of exchange in effect on March 31,
2021. 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 of the overseas subsidiaries are translated at the average rates of exchange in effect during theyear.
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. Cost of securities sold is determined by the moving average method. 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 2021

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.

Hedging instruments and hedged items are as follows:
Hedging instruments
Hedged items

Foreign exchange contracts
Foreign currency trade receivables and payables and forecasted transactions(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 17.)

3. Accounting Standards Issued But Not yet Effective
Accounting Standard and Implementation Guidance for Revenue Recognition“Accounting Standard for Revenue Recognition” (Accounting Standards Boards of Japan (“ASBJ”) Statement No.29, March 31,
2020)“Implementation Guidance on Accounting Standard for Revenue Recognition” (ASBJ Guidance No.30, March 26, 2021)“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 guidance

ICOM INCORPORATED ANNUAL REPORT 2021

12

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statementson its consolidated financial statements as of preparing the consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2021

13

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 its consolidated financial statements as of preparing the consolidated financial statements.

4. Significant Accounting Estimates
1.

Recoverability of Deferred Tax Assets(1) Recoverability of deferred tax assets as of March 31, 2021:
Deferred tax assets (net amount)¥906 million ($8,184 thousand)(2) Information on significant accounting estimates for identified items①

Calculation method
The Company and its domestic subsidiaries evaluate the recoverability of deferred tax assets for deductible temporary
differences based on the tax planning opportunities available to them and estimated future taxable profit that depends on
future earning power. In estimating future taxable profit, the Company and its domestic subsidiaries evaluate probablefuture taxable profit by reasonably estimating when and how much future taxable profit is expected based on supporting
materials such as the business plan.

② Significant assumption
The significant assumption in underlying the business plan to evaluate the estimate of future taxable profit is forecast
sales volume.
The forecast sales volume is determined using a forecast of customer demand and the latest actual sales volume.

ICOM INCORPORATED ANNUAL REPORT 2021

14

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
4. Significant Accounting Estimates (continued)
1.

Recoverability of Deferred Tax Assets (continued)(2) Information on significant accounting estimates for identified items (continued)③ Impact on consolidated financial statements for the following fiscal year
In the event the actual sales volume is less than the forecast sales volume as a significant assumption 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 not be realized in the following fiscal year.

2.

Impact of the COVID-19 outbreak
Given the fact that economic activities have been normalized in areas where vaccination rates are high since the start ofvaccinations in each country, customer demand is expected to recover gradually during the year ending March 31, 2022 even in
an environment where the COVID-19 outbreak still continues to have impacts.
Any changes in the underlying situations of these assumptions may have significant impacts on the consolidated financial
statements.

(Additional Information)
Effective from the end of the fiscal year ended March 31, 2021, the Company and its domestic subsidiaries adopted the “AccountingStandard for Disclosure of Accounting Estimates” (ASBJ Statement No.31, March 31, 2020) and significant accounting estimates aredisclosed in Note 4. However, comparative information for the previous fiscal year has not been disclosed in accordance with thetransitional treatment set forth in the proviso of section 11 of the standard.

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, 2021 and 2020 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
2021
2020
26,323¥ 27,687
302–
26,625¥ 27,687(2,198)¥(302)
24,125

Thousands of
U.S. dollars
2021$ 237,765
2,728$ 240,493(19,853)(5,535)¥–
22,152$(2,728)217,912

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 Groupobtains necessary financing through its own funds. The Group manages surplus funds through financial assets that havehigh levels of liquidity. The Group uses derivatives for the purpose of reducing risk and does not enter into derivatives for
speculative purposes.

ICOM INCORPORATED ANNUAL REPORT 2021

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ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
6. Financial Instruments (continued)(1) General information (continued)ii)

Types of financial instruments and related risk
Notes and accounts receivable are exposed to credit risk in relation to customers. In addition, trade receivables denominatedin foreign currencies are exposed to exchange rate fluctional risk.
Marketable securities and investments in securities are exposed to market risk. Those securities are composed of mainly
debt securities classified as other securities and equity securities 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. Those denominated in foreign currencies are
exposed to exchange rate fluctional risk.
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”.

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 sales
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 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 asother securities 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 arespective director, in advance, approves them within the limits reported at the Board of Directors meeting. Results ofderivative transactions are reported at the monthly Board of Directors meetings. The consolidated subsidiaries do notenter 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 12. “Derivatives and Hedging Activities” are not necessarily indicative of the actual market risk involved inderivative transactions.

ICOM INCORPORATED ANNUAL REPORT 2021

16

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, 2021 and 2020 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
2021
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¥

26,3232020

Fair value

Difference

¥

¥

5,955

26,323
5,955–

Carrying
value
¥

–

27,687

Fair value

Difference

¥

¥

6,937

27,687
6,937

–
–

¥

4,601
36,879¥4,601
36,879

¥

–
–

¥

2,166
36,790¥2,166
36,790

¥

–
–

¥
¥

969
969

¥
¥

969
969

¥
¥

–
–

¥
¥

1,696
1,696

¥
¥

1,696
1,696

¥
¥

–
–

Thousands of U.S. dollars
2021
Carrying
Fair value
Difference
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$

237,765$

53,789237,765$

53,789––$41,559333,113$41,559333,113

$

–
–

$
$

8,753
8,753

$
$

8,753
8,753

$
$

–
–

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 7.
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 2021

17

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
2021
2020
123
¥
199
2,140
3,135

¥

Thousands of
U.S. dollars
2021
$
1,111
19,330Since there is no market price for unlisted equity securities and it is difficult to determine the fair value, they are notincluded in marketable securities and 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 monetary assets, marketable securities and investments in securities with maturity dates issummarized 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
¥

26,323Due after
ten years¥–

Due within
one year¥

27,6872020
Due after
Due after
one yearfive years
through five through ten
years
years
¥
–
¥
–

Due after
ten years
¥

–

5,955

–

–

–

6,937

–

–

–

300
–
32,578

600
–
600

1,500
–
1,500

–
–
–

–
–
34,624

900
–
900

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
$

2021
Due after
Due after
one yearfive years
throughthrough ten
five years
years
¥
–
¥
–

237,765

¥

¥

¥

¥

¥

¥

¥

Thousands of U.S. dollars
2021
Due after
Due after
one yearfive years
Due after ten
throughthrough ten
years
five years
years
$
–
$
–
$
–

53,789

–

–

–

2,710
–
294,264

5,420
–
5,420

13,549–13,549

–
–
–

$

$

$

ICOM INCORPORATED ANNUAL REPORT 2021

18

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, 2021 and 2020 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

¥

¥

2,089
807
2,896

112
1,593
1,705
4,601

2021
Acquisition
cost

¥

¥

1,679
804
2,483

180
1,602
1,782
4,265

Carrying
value

Difference

¥

¥

410
3
413

¥

(68)
(9)
(77)
336

¥

–
507
507

269
1,390
1,659
2,166

2020
Acquisition
cost

¥

¥

–
506
506

364
1,406
1,770
2,276

Difference

¥

¥

–
1
1

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

Thousands of U.S. dollars
2021
Carrying
Acquisition
Difference
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$ 18,869
7,289
26,158$ 15,166
7,262
22,4281,012
14,38915,401$ 41,559

1,626
14,47016,096$ 38,524

$

$

3,703
27
3,730

(614)
(81)
(695)
3,035

Since there is no market price for unlisted equity securities and it is difficult to determine the fair value, unlisted equity securities of¥123 million ($1,111 thousand) and ¥199 million at March 31, 2021 and 2020, respectively, are not included in the above table.
Sales of other securities for the years ended March 31, 2021 and 2020 are summarized as follows:

Sales
Aggregate gain
Aggregate loss¥

Millions of yen
2021
2020
91
¥
1,722
22
71
–
1

Thousands of
U.S. dollars
2021
$
822
199
–

ICOM INCORPORATED ANNUAL REPORT 2021

19

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
8. Inventories
Inventories at March 31, 2021 and 2020 are consisted of the following:

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

¥

¥

Millions of yen
2021
2020
5,170
¥
4,169
66
81
5,548
5,048
10,784¥
9,298

Thousands of
U.S. dollars
2021$
46,699596
50,113$
97,408

Cost of sales are included loss on devaluation of inventories of ¥220 million ($1,987 thousand) and ¥66 million for the years ended
March 31, 2021 and 2020, respectively.

9

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 under certain circumstances.

(2) Liability for retirement benefits for the years ended March 31, 2021 and 2020i) 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
2021
2020
6,528
¥
6,231
224
229
54
52
192
99
(95)
(83)
6,903
¥
6,528

Thousands of
U.S. dollars
2021$
58,965
2,023
488
1,734
(858)
$
62,352ii) 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 gain (loss)
Contributions by the employer
Retirement benefits paid
Plan assets at fair value at end of year¥¥

Millions of yen
2021
2020
5,619
¥
5,550
45
58
497
(209)
326
303
(95)
(83)
6,392
¥
5,619

Thousands of
U.S. dollars
2021$
50,754
406
4,489
2,945
(858)
$
57,736ICOM INCORPORATED ANNUAL REPORT 2021

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, 2021 and 2020 (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
2021
2020
467
¥
441
46
45
(22)
(19)
491
¥
467

Thousands of
U.S. dollars
2021
$
4,218
416
(199)
$
4,435

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
2021
2020
6,903
¥
6,528
(6,392)(5,618)
511
910
491
467
1,002
1,002

¥

1,002

Thousands of
U.S. dollars
2021$
62,352(57,736)
4,616
4,435
9,051
9,051

1,377
1,377
¥

1,377

$

9,051

The components of retirement benefit expenses for the years ended March 31, 2021 and 2020 are outlined as follows:

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

Millions of yen
2021
2020
270
¥
273
54
52
(45)
(58)
40
319

¥

(17)
250

Thousands of
U.S. dollars
2021
$
2,439
488
(406)

$

360
2,881

ICOM INCORPORATED ANNUAL REPORT 2021

21

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, 2021 and 2020 (continued)vi) The component of retirement benefit liability adjustments included in other comprehensive income before tax effects
are outlined as follows:

Actuarial gain (loss)¥¥

Millions of yen
2021
2020
346
¥
(325)
346
¥
(325)

Thousands of
U.S. dollars
2021
$
3,125
$
3,125

vii) The balance of retirement benefit liability adjustments recognized in accumulated other comprehensive income before
tax effects is outlined as follows:

Unrecognized actuarial loss
Total

¥
¥

Millions of yen
2021
2020
307
¥
653
307
¥
653

Thousands of
U.S. dollars
2021
$
2,773
$
2,773

viii) The plan assets by major category consist of the following:
2021

2020

Debt securities
Equity securities
Cash and deposits
Other

60.0%
26.0%
3.0%
11.0%

65.0%
19.0%
7.0%
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, 2021 and 2020 are as
follows:

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

2021

2020

0.8%
0.8%
1.4%

0.8%
1.1%
1.5%

ICOM INCORPORATED ANNUAL REPORT 2021

22

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, 2021 and 2020. 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, 2021 and 2020 as a percentage of profit
before income taxes are as follows:
2021
30.6%
0.5
1.0
(6.3)
(0.6)
(0.4)
0.3
(0.5)
(1.2)
0.1
(0.4)
23.1%

Statutory tax rate
Non-deductible entertainment expenses and other for income tax purposes
Per capita portion of inhabitants’ taxes
Tax credit for experimentation and research expenses
Differences in tax rates applicable to overseas subsidiaries
Unrealized gain 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

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%

The significant components of deferred tax assets and liabilities at March 31, 2021 and 2020 are summarized as follows:
Thousands of
U.S. dollars
2021

Millions of yen
2021
2020
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
Loss on devaluation of inventories
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
Unrealized holding gain on securities
Other
Total deferred tax liabilities
Net deferred tax assets

¥

¥

278
140
133
37
8
304
12
25
21
98
–
62
42
1,160
(42)
1,118

(137)
(116)
(102)
(2)
(357)
761

¥

¥

222
143
172
26
9
418
12
26
27
115
35
13
41
1,259
(75)
1,184

(137)
(114)
–
(1)
(252)
932

$

$

2,511
1,265
1,201
334
72
2,746
108
226
190
885
–
560
379
10,477(379)
10,098(1,237)(1,048)(921)(18)(3,224)
6,874

ICOM INCORPORATED ANNUAL REPORT 2021

23

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, 2021 and 2020 amounted to ¥293 million ($2,647 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, 2021 and 2020 are summarized as follows:
Number of shares
2021
Shares issued:
Common stock
Treasury stock:
Common stock

April 1, 2020

Increase

Decrease

March 31, 2021

14,850,000––

14,850,000

111,063

386,038–

497,101

The increase in treasury stock of 386,038 shares is due to purchases of 385,900 shares by the resolution of the Board of Directors
and purchases of 138 shares of less than one voting unit for the year ended March 31, 2021.
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 of the board of directors andpurchases of 125 shares of less than one voting unit for the year ended March 31, 2020.

ICOM INCORPORATED ANNUAL REPORT 2021

24

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
12 Derivatives and Hedging Activities
There were no outstanding currency-related derivatives positions not designated as hedging instruments as of March 31, 2021 and2020.
There were no derivatives positions outstanding which qualify for hedge accounting at March 31, 2021.
The estimated fair value of the derivatives positions outstanding which qualify for hedge accounting at March 31, 2020 issummarized as follows:
Currency-related transactions
Millions of yen
2020
Method of hedge accounting

Transaction

Major
hedged item

Allocation method for forward
foreign exchange contracts

Forward foreignexchange contracts
Sell:
USD
EUR

Foreigncurrency
deposits

Total

Notional
amountMore than
one year

Fair value

¥

650
748

¥–
–

¥–
–

¥ 1,398¥–¥–

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, 2021 and2020 are as follows:

Research and development costs¥

Millions of yen
2021
2020
3,595
¥
3,769

Thousands of
U.S. dollars
2021$ 32,472

ICOM INCORPORATED ANNUAL REPORT 2021

25

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, 2021 and 2020 are as
follows:

Millions of yen
2021
2020
Net unrealized holding gain (loss) on securities:
Amount arising during the year
Reclassification adjustments
Before tax effects
Tax effects
Net unrealized holding gain (loss) on securities¥

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

¥

447
–
447
(137)
310

¥

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

Thousands of
U.S. dollars
2021
$

4,038
–
4,038
(1,238)
2,800

579
(36)
543

(355)
–
(355)

5,230
(325)
4,905

306
40
346
(106)
240
1,093

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

2,764
361
3,125
(957)
2,168
9,873

¥

$

15 Amounts Per Share
Amounts per share at March 31, 2021 and 2020 and for the years then ended are as follows:Yen
Net assets
Profit attributable to owners of parent:
BasicCash dividends¥

2021
3,937.75
120.17
53.00

¥

2020
3,772.56
130.44
50.00

U.S. dollars
2021
$
35.57
1.09
0.48

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 2021

26

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 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, China and Vietnam as for March 31 2021, and Australia, China and Taiwan as for
March 31 2020.

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, 2021 and 2020 are as follows:Japan
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

North
America¥ 16,924
7,660
24,584¥ 1,648¥

Europe
¥

¥

8,077
10
8,087
93

¥

1,820
–
1,820
167

¥ 54,884

¥

6,779

¥

¥

¥

63
–

¥

1,159
115
1,181

40

Millions of yen
2021
Asia &
Oceania
Subtotal

Eliminations Consolidated¥¥ 27,941
7,752
35,693¥ 1,963

¥

¥

1,120
82
1,202
55

1,178

¥

1,915

5
–

¥

9
–

8

3

¥

¥

–
(7,752)(7,752)(73)¥

27,941–
27,941
1,890¥ 64,756¥(3,088)¥61,668

¥

¥

–
–

¥

1,236
115

1,236
115
1,232

–

ICOM INCORPORATED ANNUAL REPORT 2021

1,232

27

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
16. Segment Information (continued)iii) Information as to sales, income 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 (loss)
II. Total assets
III. Other items
Depreciation and amortization
Investments in affiliates
Increase in property, plant andequipment / intangible assets¥ 20,073
6,987
27,060¥ 1,968¥¥¥ 55,741

¥

¥

¥

1,456

II. Total assets
III. Other items
Depreciation and amortization
Investments in affiliates
Increase in property, plant andequipment / intangible assets$$ 495,746$

10,668

5,949

¥

66
–

¥

¥

¥

898
513
1,411
74

955

¥

3
–

¥

12

North
America$ 152,868
69,190222,058$ 14,886

10,469
1,039

¥

¥

1,298
1
1,299
75

34

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

Europe

8,264
12
8,276
(2)

1,146
139

¥

Millions of yen
2020
Asia &
Oceania
Subtotal

1,395

¥

10
–

¥

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

–

1,514

Thousands of U.S. dollars
2021
Asia &
EuropeOceania
Subtotal

Eliminations

Consolidated$$$ 16,439–
16,439$ 1,509$$

72,9569073,046
839$

61,232$ 10,640

$

569
–

$

361

¥

30,533
7,513
38,046
2,115

Eliminations Consolidated

45
–
72

$

$

10,117741
10,858498$

252,38070,021
322,401
17,732$–(70,021)(70,021)(660)$

252,380–
252,380
17,072$

17,298$584,916$(27,893)$557,023

$

81
–

$

11,164
1,039

$

–
–

$

11,164
1,039

27

11,128–ICOM INCORPORATED ANNUAL REPORT 2021

11,12828

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, 2021
and 2020 were summarized as follows:

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

¥

¥

2021
12,247
6,184
1,226
4,038
3,611
635
27,941¥¥

2020
13,276
6,153
1,346
4,015
4,997
746
30,533Thousands of
U.S. dollars
2021$
110,62255,858$

11,07436,47432,617
5,735
252,380(b) Property, plant and equipment
Property, plant and equipment categorized by country and region at March 31, 2021 and 2020 were summarized as follows:

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

¥

¥

2021
6,621
1,053
8
12
158
7,852

¥

2020
6,522
1,057

Thousands of
U.S. dollars
2021$
59,805
9,512
72
108
1,427
70,924

7
15
129
7,730

Disclosure of the information by product and service for the years ended March 31, 2021 and 2020 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.
Sales information by major customer for the years ended March 31, 2021 and 2020 was omitted as no single customer accounted for
10% or more of consolidated net sales.

17. Subsequent Events
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, 2021, was approved at the Company’s general shareholders’ meeting held on June25, 2021:

Cash dividends (¥25 = U.S.$0.23 per share)

Millions of yen
2021
¥
359

Thousands of
U.S. dollars
2021
$
3,243

ICOM INCORPORATED ANNUAL REPORT 2021

29BOARD OF DIRECTORSAND AUDITORSTokuzo 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

Takayuki Seto
AuditorHiroshi Umemoto
Outside Auditor

Katsunori Sugimoto

SUBSIDIARIESTRANSFER AGENT

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.

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

AFFILIATES
Comforce Inc.
Position Co., Ltd.

Outside Auditor

HEAD OFFICE DIRECTORYEXECUTIVE OFFICERS

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/

INVESTOR RELATIONS
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

CORPORATE FACTS
Shigeyoshi Tanabe
Yoshiki Enomoto
Kenichi Noda
Mitsuhiro Nakatani
Masahiro Hasegawa(As of March 31, 2021)
Established: July 1964
Employees: 598
Paid-in capital: ¥7,081 million
Authorized shares: 34,000,000
Issued and outstanding shares:
14,850,000
Shareholders: 10,979
Stock listing: Tokyo Stock Exchange(As of March 31, 2021)
Major shareholders
Tokuzo Inoue
Gigapalace Inc.
HIKARI TSUSHIN, INC.
UHPartners2, INC.
The Icom Foundation
The Master Trust Bank of Japan, Ltd. (Trust account)
JVC KENWOOD Corporation
Sumitomo Realty & Development Co., Ltd.
Meiji Yasuda Life Insurance Company
ICOM Employee Shareholding Association

Thousands of shares
2,049
1,472
1,446
1,047
1,000
497
445
357
326
299