YEAR ENDED MARCH 31, 2010

ICOM INCORPORATED

Financial Highlights
ICOM INCORPORATED AND SUBSIDIARIES
Years ended March 31, 2010, 2009 and 2008
Thousands of
U.S. dollars

Millions of yen

2010
23,640431
711
230¥ 49,350

Net sales
Operating income
Income before income taxes
Net income
Total assets
Amounts per share:
Net assets
Net income – basic
Net income – diluted
Cash dividends

2009
29,575
2,785
1,532
998
¥ 49,245¥¥¥ 3,094.79
15.55
–
20.00

¥ 3,086.49
67.40
–
40.00

2008
33,139
4,817
4,628
2,912
¥ 51,1272010$ 254,112
4,633
7,643
2,472
$ 530,474¥ 3,102.92
197.28197.24
40.00

$

¥

Yen

U.S. dollars

33.27
0.17
–
0.21

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥93.03 = U.S.$1.00, the exchange rate prevailing on March 31, 2010.
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)

33,13935,0004,817
29,57530,0005,000
23,64025,0004,000

20,000

3,000

2,785

15,0002,000

10,000

0

431

1,000

5,000
2008

2009

2010

0

2008

Net Income

Total Assets(Millions of yen)

(Millions of yen)

2009

2010

49,24549,3502009

2010

53,0002,912

52,0003,000

51,12751,00050,0002,000

49,000998

48,000

1,000
230
0

47,00046,00045,000

2008

2009

2010

2008

ICOM INCORPORATED ANNUAL REPORT 20101

Operating Highlights
BUSINESS SEGMENT INFORMATION
Years ended March 31, 2010 and 2009
Millions of yen

RadioComputerEliminations
Consolidated total

Thousands of U.S. dollars

Operating income(loss)
2010
2009
¥ 498
¥ 2,873
(67)
(88)
–
–
¥ 431
¥ 2,785

Net sales2010
2009¥ 22,351¥ 27,715
1,289
1,860
–
–
¥ 23,640¥ 29,575

Net sales2010$ 240,256
13,856–$ 254,112

Operating income(loss)
2010$ 5,353(720)–$ 4,633

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥93.03 = U.S.$1.00, the exchange rate prevailing on March 31, 2010.
2. Amounts shown in millions of yen and thousands of dollars are rounded off to the nearest million or thousand.

Radio(Millions of yen)

35,000Net Sales

27,715

Operating income

30,00022,351

25,00020,00015,00010,000

2,873
498

5,000
0

2009

2010

Computer(Millions of yen)

2,500

Net Sales

1,860

Operating loss

1,289
1,500
(88)

(67)

500

(500)

2009

2010

ICOM INCORPORATED ANNUAL REPORT 20102

Operating Highlights
GEOGRAPHICAL SEGMENT INFORMATION
Years ended March 31, 2010 and 2009
Millions of yen

Net sales

Japan
North America
EuropeAsia & Oceania
Eliminations
Consolidated total

2010¥ 19,178
7,843
1,219
1,299
(5,899)¥ 23,640

2009¥ 26,732
10,177
1,761
1,727(10,822)¥ 29,575

Thousands of U.S. dollars

Operating income(loss)

Net sales2010¥ (182)
176
14
129
294
¥ 431

2010
$ 206,149
84,306
13,104
13,963(63,410)$ 254,1122009¥ 2,020
378
122
192
73
¥ 2,785

Operatingincome(loss)2010$ (1,956)
1,892
151
1,386
3,160
$ 4,633

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥93.03= U.S.$1.00, the exchange rate prevailing on March 31, 2010.
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

30,00026,732

North America
Europe25,000Asia & Oceania

19,17820,00010,177

15,000

7,843
10,0001,761 1,727

5,000
0

1,219 1,299

2009

2010

Operating Income(loss)(Millions of yen)

2,500

Japan

2,020

North America

2,000EuropeAsia & Oceania

1,500
1,000

378
122 192

500

(182)

176

14

129

0
(500)

2009

2010

ICOM INCORPORATED ANNUAL REPORT 20103

Operating Highlights
OVERSEAS SALES
Years ended March 31, 2010 and 2009
Millions of yen

North America
EuropeAsia
OtherOverseas total
Domestic total
Consolidated total

2010¥ 7,516
31.8%
4,061
17.2
3,747
15.8
1,837
7.8
17,161
72.6
6,479
27.4
¥ 23,640
100.0%

Thousands of U.S. dollars

2009¥ 9,524
32.2%
6,071
20.5
5,269
17.8
2,488
8.5
23,352
79.0
6,223
21.0
¥ 29,575
100.0%

2010$ 80,791
43,65340,277
19,746
184,467
69,645$ 254,112

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥93.03 = U.S.$1.00, the exchange rate prevailing on March 31, 2010.
2. Amounts shown in millions of yen and thousands of dollars are rounded off to the nearest million or thousand.

Net Sales 2009

North
America
32.2%

Overseas
Sales

Domestic
Sales
21.0%

Europe
20.5%

Asia
17.8%

Other
8.5%

Net Sales 2010

North
America
31.8%

Overseas
Sales

Domestic
Sales
27.4%

Europe
17.2%

Asia
15.8%
Other
7.8%

ICOM INCORPORATED ANNUAL REPORT 2010

4

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheets
March 31, 2010 and 2009
Thousands of
U.S. dollars(Note 1)Millions of yen

AssetsCurrent assets:
Cash and deposits (Notes 4, 5 and 11)
Marketable securities (Notes 4, 5 and 6)
Notes and accounts receivable (Note5)
Allowance for doubtful accounts

2010

2009

2010

Total current assets¥ 26,251
200
4,208
(36)
4,172
4,459
242
1,286
36,610¥ 23,478
94
3,684
(58)
3,626
5,897
569
1,448
35,112$ 282,178
2,150
45,233(387)
44,84647,931
2,601
13,823
393,529

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

3,841
6,031
11,408243
821,531(13,927)
7,604

3,828
4,965
11,246258
1,277
21,574(13,112)
8,462

41,28864,828
122,627
2,612
86
231,441(149,704)
81,737

Investments and other assets:
Investments in securities (Notes 5 and 6)
Other investments
Deferred income taxes (Note 9)
Other assets
Allowance for doubtful accounts
Total investments and other assets

1,687
2,628
619
246
(44)
5,136

1,833
2,853
740
294
(49)
5,671

18,13428,249
6,654
2,644
(473)
55,208¥ 49,350¥ 49,245$ 530,474

Inventories (Note 7)
Deferred income taxes (Note 9)
Other current assets

Total assets (Note 15)

ICOM INCORPORATED ANNUAL REPORT 2010

5

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheets
March 31, 2010 and 2009

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

Liabilities and net assets
Current liabilities:
Accounts payable – trade (Note 5)
Accounts payable – other (Note 13)
Accrued income taxes (Note 9)
Deferred income taxes (Note 9)
Accrued expenses
Warranty reserves
Other current liabilities
Total current liabilities
Long-term liabilities:
Accrued retirement benefits for employees (Note 8)
Other long-term liabilities
Total long-term liabilities

Net assets:
Shareholders’ equity (Note 10):
Common stock:
Authorized – 34,000,000 shares;
14,850,000 shares in 2010 and 2009
Issued –Capital surplus
Retained earnings (Note 17)
Less treasury stock, at cost:
31,119 shares in 2010 and 30,839 shares in 2009
Total shareholders’ equity
Valuation and translation adjustments:
Unrealized holding gain (loss) on securities (Note 6)
Translation adjustments
Total valuation and translation adjustments
Total net assets
Total liabilities and net assets

2010
¥

1,204
351
10
–
861
60
125
2,611

2009
¥

2010

1,007
605
65
2
957
66
155
2,857

$ 12,942
3,773
(258)
–
9,621
645
1,343
28,066

277
601
878

32
617
649

2,978
6,460
9,438

7,081
10,44928,7707,081
10,44928,984

76,115112,319309,254(102)
46,198(101)
46,413(1,096)
496,592

25
(362)
(337)
45,861¥ 49,350

(128)
(546)
(674)
45,739¥ 49,245

269(3,891)(3,622)492,970$ 530,474

See accompanying notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2010

6

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Income
Years ended March 31, 2010 and 2009
Thousands of
U.S. dollars(Note 1)Millions of yen

Net sales (Note 15)
Cost of sales
Gross profit

2010¥ 23,640
14,942
8,698

2009¥ 29,575
17,436
12,1392010$ 254,112
160,615
93,497

8,267
431

9,354
2,785

88,864
4,633

163
7

373
11

1,752
75

(1)
157
0
(171)
125
280
711

(961)
(620)
1
(243)
186
(1,253)
1,532

(11)
1,688
0
(1,838)
1,344
3,010
7,643

142
339
481
230

806
(272)
534
998

1,527
3,644
5,171
2,472

Selling, general and administrative expenses(Notes 12 and 13)
Operating income (Note 15)
Other income (expenses):
Interest and dividend income
Gain on sales of securities, net (Note 6)
Loss on impairment of investments in securities(Note 6)
Foreign exchange gain (loss), net
Gain on sales of property, plant and equipment
Sales discounts
Other, net
Income before income taxes
Income taxes (Note 9):
Current
Deferred
Net income

¥

¥

$

See accompanying notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2010

7

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statements of
Changes in Net Assets
Years ended March 31, 2010 and 2009
Millions of yen

Balance at March 31, 2008
Net income for the year
Cash dividends
Purchases of treasury stock
Sales of treasury stock
Other changes
Balance at March 31, 2009
Net income for the year
Cash dividends
Purchases of treasury stock
Other changes
Balance at March 31, 2010

Number ofshares in issue

Commonstock

CapitalsurplusRetainedearnings

Treasurystock, at cost

Unrealized
holding gain
(loss) on
securities

14,850,000
–
–
–
–
–
14,850,000––––
14,850,000¥ 7,081–––––¥ 7,081––––¥ 7,081¥ 10,449–––––¥ 10,449––––¥ 10,449¥ 28,674
998
(592)
–
(96)
–
¥ 28,984
230
(444)
–
–
¥ 28,770¥ (354)
–
–
(1)
254
–
¥ (101)––(1)–¥ (102)¥ (261)––––133¥ (128)
–
–
–
153
¥ 25

Translation
adjustments

Total net
assets

¥

156
–
–
–
–
(702)
¥ (546)–––184¥ (362)¥ 45,745
998
(592)
(1)
158
(569)
¥ 45,739
230
(444)
(1)
337
¥ 45,861

Unrealized
holding gain
(loss) on
securities

Translation
adjustments

Total net
assets$ (1,376)
–
–
–
1,645
$ 269

$ (5,869)
–
–
–
1,978
$ (3,891)$ 491,658
2,472(4,773)(10)
3,623

Thousands of U.S. dollars (Note 1)

Balance at March 31, 2009
Net income for the year
Cash dividends
Purchases of treasury stock
Other changes
Balance at March 31, 2010

Commonstock

CapitalsurplusRetainedearnings

Treasurystock, at cost

$ 76,115––––$ 76,115$ 112,319––––$ 112,319$ 311,555
2,472(4,773)––$ 309,254$ (1,086)
–
–
(10)
–
$ (1,096)$ 492,970

See accompanying notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2010

8

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statements of Cash Flows
Years ended March 31, 2010 and 2009

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

2010
Operating activities:
Income before income taxes
Adjustments for:
Depreciation and amortization
Interest and dividend income
Foreign exchange (gain) loss, net(Increase) decrease in notes and accounts receivable
Decrease (increase) in inventories
Increase (decrease) in accounts payable -trade
Other, net
Subtotal
Income taxes paid
Net cash provided by operating activities

¥

711

2009
¥

1,532

2010
$

7,643

1,362
(163)
(61)
(551)
1,265
295
362
3,220
(278)
2,942

1,650
(373)
814
573
(1,442)
(548)
915
3,121
(1,737)
1,384

14,640(1,752)(656)(5,923)
13,5983,171
3,891
34,612(2,988)31,624

Investing activities:
Increase in time deposits with original
maturities in excess of three months
Proceeds from sales of marketable securities
Purchases of property, plant and equipment
Purchases of other assets
Purchases of investments in securities
Proceeds from sales of investments in securities
Interest and dividend income received
Other, net
Net cash used in investing activities

(604)
100
(619)
(65)
(314)
604
157
(5)
(746)

(455)
301
(2,253)(111)(1,232)
561
372
(167)
(2,984)(6,493)
1,075(6,654)(699)(3,375)
6,493
1,688
(54)
(8,019)Financing activities:
Purchases of treasury stock
Proceeds from sales of treasury stock
Cash dividends paid
Net cash used in financing activities

(1)
–
(444)
(445)

(1)
159
(592)
(434)

(10)
–
(4,773)(4,783)36
1,787
23,197¥ 24,984(1,066)(3,100)26,297¥ 23,197

387
19,209249,350$ 268,559

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 4)
See accompanying notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2010

9

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2010

1. Basis of Preparation
The accompanying consolidated financial statements of ICOM INCORPORATED (the “Company”) and its subsidiaries areprepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as to the applicationand disclosure 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 and rearrangements have been made to
the consolidated financial statements issued domestically in order to present them in a format which is more familiar to readers
outside Japan.
In addition, the notes to the consolidated financial statements include certain information which is not required under accounting
principles generally accepted in Japan but is presented herein as additional information.
The translation of yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan, as amatter of arithmetic computation only, and has been made at ¥93.03 = U.S.$1.00, the approximate rate of exchange in effect on
March 31, 2010. 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. Companies over which the Company exercises significant influence in terms of their operating and financial
policies have been included in the accompanying consolidated financial statements on an equity basis.
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealizedintercompany gains and losses among the Company and the subsidiaries have been entirely eliminated.

(b) Cash and cash equivalents
For purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash on hand, deposits with banks
withdrawable on demand, and short-term investments which are readily convertible to cash subject to an insignificant risk of any
changes in their value and which were 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 from translating
accounts denominated in foreign currencies are not included in the determination of net income 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 at thebalance sheet date, except that receivables and payables 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 arecarried at cost determined by the moving average method.
Securities held by the Company and its subsidiaries including equity investments in affiliates are all classified as “other securities”
and have been accounted for as outlined above.

(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 goods held by certain overseas subsidiaries which are valued at the lower of cost or market, cost being determined by the moving
average method.
Effective the year ended March 31, 2009, the Company and its domestic subsidiaries adopted “Accounting Standard for
Measurement of Inventories” (Accounting Standards Board of Japan (ASBJ) Statement No.9 issued on July 5, 2006). As a result of
the adoption of this accounting standard, operating income decreased by ¥82 million and income before income taxes decreased by¥5 million for the year ended March 31, 2009 as compared to the corresponding amounts which would have been recorded under the
method applied in the previous year.

ICOM INCORPORATED ANNUAL REPORT 201010

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
2. Summary of Significant Accounting Policies (continued)(f) Property, plant and equipment (except for leased assets)
Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment is computed by the
declining-balance method over the estimated useful lives of the respective assets as prescribed in the Corporation Tax Law of Japan,
except that the straight-line method is applied to buildings (other than structures attached to the buildings) acquired on April 1, 1998
and thereafter. Small assets owned by the Company and its domestic subsidiaries, which are valued at ¥100 thousand or more andless than ¥200 thousand, are depreciated by the straight-line method over a three-year period.
In accordance with the 2008 revision of the Corporation Tax Law, effective the year ended March 31, 2009, the Company and its
domestic subsidiaries had reviewed the estimated useful lives of certain tangible fixed assets and changed them.
The impact of this change on operating income and income before income taxes was immaterial.

(g) Software development costs (except for leased assets)
Expenditures relating to the development of computer software intended for internal use are charged to income when incurred,
except if it is anticipated that this software will contribute to the generation of income or to future cost savings. Such expenditures arecapitalized as assets and amortized by the straight-line method over an estimated useful life of 3 years or 5 years.

(h) Leased assets
Leased assets are depreciated by the straight-line method over respective lease periods with no residual value.
Previously, finance lease transactions not involving the transfer of ownership were accounted for in a manner similar to theaccounting treatment for operating lease transactions. However, effective the year ended March 31, 2009, the Company and its
domestic subsidiaries adopted “Accounting Standard for Lease Transactions” (ASBJ Statement No.13 originally issued by the First
Committee of the Business Accounting Council on June 17, 1993 and revised by ASBJ on March 30, 2007) and “Implementation
Guidance on Accounting Standard for Lease Transactions” (ASBJ Guidance No.16 originally issued by the Accounting System
Committee of the Japanese Institute of Certified Public Accountants on January 18, 1994 and revised by ASBJ on March 30, 2007).
Such transactions are now accounted for as ordinary sale and purchase transactions.
The Company and its domestic subsidiaries continue to account for finance lease transactions not involving the transfer ofownership that were contracted prior to April 1, 2008 in a manner similar to the accounting treatment for ordinary operating leasetransactions.

(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) Warranty reserves
Warranty reserves for certain overseas subsidiaries are calculated based on the historical ratio of the cost of repairs of the products
against net sales.

(k) Accrued retirement benefits
Accrued retirement benefits for employees are provided mainly at an amount calculated based on the retirement benefit obligationand the fair value of the pension plan assets as adjusted for unrecognized actuarial gain or loss and unrecognized prior service cost.
The retirement benefit obligation is attributed to each period by the straight-line method over the estimated remaining years ofservice of the eligible employees.
Actuarial gain or loss and prior service cost are amortized over a period of ten years commencing the year following the year inwhich the gain or loss is recognized by the straight-line method. The amortization period is shorter than the average estimatedremaining years of service of the eligible employees.
The net retirement benefit obligation at transition of ¥592 million is being amortized principally over a period of fifteen years.
Prior service cost is being amortized by the straight-line method over ten years within the average remaining years of service at thetime of occurrence.
Actuarial gain or loss is being amortized on a straight-line basis over ten years, which is within the average remaining years ofservice of employees, allocated proportionately starting from the year following the respective fiscal year of occurrence.
The Company and certain domestic subsidiaries had unfunded retirement benefit plans for directors and corporate auditors. The
amounts required under the plans had been fully accrued in accordance with their internal regulations and were to be paid subject toapproval at a shareholders’ meeting. At the Company’s general shareholders’ meeting held on June 26, 2008, shareholders approved
and resolved to abolish these retirement benefit plans for directors and corporate auditors and to pay retirement benefits for theapplicable service period of each officer up to the date of the above shareholders’ meeting at the time each officer subsequently
retires. As a result, a retirement benefit obligation for certain officers of ¥511 million was included in “Other long-term liabilities” inthe consolidated balance sheet as of March 31, 2009.

ICOM INCORPORATED ANNUAL REPORT 201011

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
2. Summary of Significant Accounting Policies (continued)(k) Accrued retirement benefits (continued)(Accounting Changes)
Effective the year ended March 31, 2010, the Company and its domestic subsidiaries have adopted “Partial Amendments to
Accounting Standard for Retirement Benefits (Part3)” (ASBJ Statement No. 19 issued on July 31, 2008). The adoption of thisstandard had no effect on the consolidated operating results for the year ended March 31, 2010.

(l) Hedge accounting
Under the accounting standard for financial instruments, gain or loss on derivatives designated as hedging instruments is deferred
until the loss or gain on the underlying hedged items is recognized. Derivatives such as forward foreign exchange contracts are
utilized to manage foreign currency risk. Forward foreign exchange contracts which meet certain conditions are accounted for by amethod under which foreign currency receivables or payables are translated at their corresponding forward foreign exchange contract
rates.

(m) Distribution of retained earnings
Under the Corporation Law 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 earning with respect to interim financial period it made by resolution of the Board of
Directors. (See Note 17.)

3. Changes in Method of Accounting Policies Applied to Overseas Subsidiaries
Effective the year ended March 31, 2009, “Practical Solution on Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task Force No.18, May 17, 2006), was adopted. The
impact of this change on operating results for the year ended March 31, 2009 was immaterial.

4. Cash and Cash Equivalents
In the preparation of the consolidated statements of cash flows, the relationship between the items included in cash and cash
equivalents and the corresponding amounts reflected in the consolidated balance sheets at March 31, 2010 and 2009 is summarized asfollows:
Thousands ofMillions of yen

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

2010
26,251200
26,451¥(1,267)¥(200)
24,984

U.S. dollars

2009
23,47894
23,572

$

(281)

¥

(94)
23,197

2010
282,178
2,150
284,328(13,619)$(2,150)268,559ICOM INCORPORATED ANNUAL REPORT 201012

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
5. Financial Instruments
Effective the year ended March 31, 2010, the Company and subsidiaries have adopted “Accounting Standard for Financial
Instruments” (ASBJ Statement No.10 issued on March 10, 2008) and “Implementation Guidance on Disclosures about Fair Value of
Financial Instruments” (ASBJ Guidance No.19 issued on March 10, 2008).

(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
subsidiaries (collectively, the “Group”) finance necessary funds through their own funds. The Group manages surplus funds throughfinancial 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 trading 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 to foreign
currency exchange rate fluctuation risk arising from 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 valuesof those securities are periodically reviewed and reported to board of directors meetings.
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 denominated in foreign currencies. Further information regarding the method of hedge
accounting, hedging instruments and hedged items, hedging policy, and the assessment of the effectiveness of hedging activities canbe found in Note 11.
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 receivables, the credit department
monitors credit worthiness of main customers periodically, and monitors due dates and outstanding 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 other securities withhigh 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 derivative transactions only withfinancial 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 arising from trade receivables denominated in foreign currencies, theGroup 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. Results of derivative transactions
are reported at the monthly Board of Directors meetings. 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 flow plans on atimely basis to manage liquidity risk. Subsidiaries monitor liquidity risk in a same manner.

ICOM INCORPORATED ANNUAL REPORT 201013

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
5. Financial Instruments (continued)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 priceavailable, fair value is reasonably estimated. Since various assumptions and factors are reflected in estimating the fair value, different
assumptions and factors could result in different fair values. In addition, the notional amounts of derivatives in Note 11 are notnecessarily indicative of the actual market risk involved in derivative transactions.

(2) Estimated fair value of financial instruments
The carrying value, fair value and unrealized gains (losses) of the financial instruments on the consolidated balance sheet as ofMarch 31, 2010 are shown in the following table. The following table does not include financial instruments for which it is extremely
difficult to determine the fair value. (Please refer to Note ⅱ) below).

Millions of yen
2010
Fair value

Carrying value
Assets(1) Cash and deposits(2) Notes and accounts
receivable(3) Marketable securities
and investments insecurities
Total assets¥

26,251¥

26,251

Unrealized gains (losses)

¥

–

4,208

4,208

–

¥

1,757
32,216¥

1,757
32,216¥––

Liabilities(1) Accounts payable trade
Total liabilities

¥
¥

1,204
1,204

¥
¥

1,204
1,204

¥
¥

–
–

Derivative transactions (*)

¥

1

¥

1

¥

–

Carrying value

Thousands of U.S. dollars
2010
Fair value

Unrealized gains (losses)

Assets(1) Cash and deposits(2) Notes and accounts
receivable(3) Marketable securities
and investments insecurities
Total assets$

18,886346,297$

18,886346,297$––

Liabilities(1) Accounts payable trade
Total liabilities$$

12,942
12,942$$

12,942
12,942$$––Derivative transactions (*)

$

11

$

11

$

–

$

282,178$

45,233

282,178$

45,233––(*) The value of assets and liabilities arising from derivatives is shown at net value.

ICOM INCORPORATED ANNUAL REPORT 2010

14

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
5. Financial Instruments (continued)(2) Estimated fair value of financial instruments (continued)
Notes:i) Methods to determine the market value of financial instruments and other matters related to marketablesecurities and derivative transactions
Assets(1) Cash and deposits, and (2) Notes and accounts receivable
Since these items are settled in a short period of time, their carrying values 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 on either quoted
market prices or the prices provided by the financial institutions making markets for these securities. For information on securities
classified by purpose of holding, please refer to Note 6.
Liabilities(1) Accounts payable - trade
Since these items are settled in a short period of time, their carrying values approximate the fair value.
Derivatives Transactions
Please refer to Note 11.

ii) Financial instruments for which it is extremely difficult to determine the fair value
Thousands ofMillions of yen

Unlisted stocks¥

U.S. dollars

2010
130

2010
1,397

$

Since there is no market price for unlisted stocks and it is difficult to determine the fair value, they are not included in above (3)marketable securities and investments in securities in the preceding table “(2) Estimated fair value of financial instruments”.

iii) The redemption schedule for other securities with maturity dates
The redemption schedule for financial instruments receivable and marketable securities and investments in securities with maturity
dates is summarized as follows:
Millions of yen

2010
Due within one year
Cash and deposits
Notes and accounts
receivable
Marketable securities
and investments insecurities:
Other securities withmaturing dates
Corporate bonds
Other
Total

¥

¥

26,251

Due after one year
through five years¥–

Due after five years
through ten years¥–

Due after ten years
¥

–

4,208

–

–

–

200
–
30,659

424
–
424

300
–
300

400
–
400

¥

¥

¥

ICOM INCORPORATED ANNUAL REPORT 2010

15

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
5. Financial Instruments (continued)iii) The redemption schedule for other securities with maturity dates (continued)
Thousands of U.S. dollars

2010
Due within one year
Cash and deposits
Notes and accounts
receivable
Marketable securities
and investments insecurities:
Other securities withmaturing dates
Corporate bonds
Other
Total

$

$

282,178

Due after one year
through five years$–

Due after five years
through ten years$–

Due after ten years$–

45,233

–

–

–

2,150
–
329,561

4,558
–
4,558

3,225
–
3,225

4,300
–
4,300

$

$

$

(Additional information)
Effective the year ended March 31, 2010, the Company and subsidiaries have adopted “Accounting Standard for Financial
Instruments” (ASBJ Statement No.10 issued on March 10, 2008) and “Implementation Guidance on Disclosures about Fair Value of
Financial Instruments” (ASBJ Guidance No.19 issued on March 10, 2008).

6. Marketable Securities and Investments in Securities
Marketable securities classified as other securities at March 31, 2010 and 2009 are summarized as follows:
Millions of yen

2010
Carrying
value

Acquisition
cost
Securities whose carrying value
exceeds their acquisition cost:
Equity securities
Corporate bonds
Other
Subtotal
Securities whose carrying value
does not exceed their acquisition cost:
Equity securities
Corporate bonds
Other
Subtotal
Total

¥

¥

330
317
35
682

33
996
–
1,029
1,711

¥

410
323
43
776

24
957
–
981
¥ 1,757

Unrealized
gain (loss)

Acquisition
cost

¥

¥

80
6
8
94

170
–
–
170

22
–
–
22

ICOM INCORPORATED ANNUAL REPORT 2010

16

¥

202
1,473
33
1,708
1,878

¥

¥

¥

220
1,844
35
2,099
2,247

¥

Unrealized
gain (loss)

(18)
(371)
(2)
(391)
(369)

¥

(9)
(39)
–
(48)
46

148
–
–
148

2009
Carryingvalue

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
6. Marketable Securities and Investments in Securities (continued)
Thousands of U.S. dollars

2010
Carrying
value

Acquisition
cost
Securities whose carrying value
exceeds their acquisition cost:
Equity securities$ 3,547
Corporate bonds
3,408
Other
376
Subtotal
7,331
Securities whose carrying value
does not exceed their acquisition cost:
Equity securities
355
Corporate bonds
10,706
Other–
Subtotal
11,061
Total$ 18,392

$

4,407
3,472
462
8,341

258
10,287–
10,545$ 18,886

Unrealized
gain (loss)

$

$

860
64
86
1,010

(97)
(419)
–
(516)
494

The Company recorded an impairment loss of ¥893 million on marketable equity securities and ¥68 million on other securities forthe year ended March 31, 2009.
Sales of other securities for the years ended March 31, 2010 and 2009 are summarized as follows:
Thousands ofMillions of yen

Sales
Aggregate gain
Aggregate loss

¥

2010
494
7
0

¥

U.S. dollars

2009
349
11
0

$

2010
5,310
75
0

The carrying value of investments in non-marketable securities at March 31, 2010 and 2009 is summarized as follows:
Thousands ofMillions of yen

2010
Unlisted equity securities (except for equity securities
traded on the over-the-counter market)
Total

¥
¥

65
65

U.S. dollars

2009
¥
¥

10
10

2010
$
$

699
699

7. Inventories
Inventories at March 31, 2010 and 2009 consisted of the following:Thousands ofMillions of yen

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

¥

¥

2010
2,740
87
1,632
4,459

¥

¥

U.S. dollars

2009
4,135
65
1,697
5,897

$

$

2010
29,453935
17,54347,931ICOM INCORPORATED ANNUAL REPORT 201017

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
8. Accrued Retirement Benefits for Employees
The Company and its domestic subsidiaries have employees’ defined benefit pension plans, i.e., corporate pension plans,
tax-qualified pension plans and lump-sum payment plans.
The Company and its domestic subsidiaries pay additional retirement benefits to employees under certain circumstances.
The funded and accrued status of the employees’ defined benefit pension plans of the Company and its domestic subsidiaries andthe amounts recognized in the accompanying consolidated balance sheets at March 31, 2010 and 2009 are summarized as follows:
Thousands ofMillions of yen

Retirement benefit obligation at end of year
Plan assets at fair value at end of year
Unfunded retirement benefit obligation
Unrecognized net retirement benefit obligation attransition
Unrecognized actuarial loss
Unrecognized prior service cost
Prepaid pension costAccrued retirement benefits for employees

¥

¥

2010
(3,639)2,340(1,299)
102
931
(11)
–
(277)

¥

U.S. dollars

2009(3,517)2,001(1,516)

¥

122
1,392
(13)
(17)
(32)

$

$

2010
(39,116)
25,153(13,963)
1,095
10,008(118)–(2,978)Certain domestic subsidiaries have applied simplified methods for calculating their retirement benefit obligation, which arepermitted under the accounting standard for employees’ retirement benefits.
The components of retirement benefit expenses for the years ended March 31, 2010 and 2009 are outlined as follows:
Thousands ofMillions of yen

Service cost
Interest cost
Expected return on plan assets
Amortization of prior service cost
Amortization of retirement benefit obligation attransition
Amortization of actuarial loss
Retirement benefit expenses, net

¥

¥

2010
193
66
(37)
(2)
20
194
434

¥

¥

U.S. dollars

2009
196
64
(42)
(2)
20
160
396

$

$

2010
2,075
709
(398)
(21)
215
2,085
4,665

Retirement benefit expenses of certain domestic subsidiaries, which have been calculated by simplified methods, are included inservice cost in the above table.
The assumptions used in accounting for the above plans were a discount rate of 2.0% and an expected rate of return on plan assetsof 2.0% for the years ended March 31, 2010 and 2009.

ICOM INCORPORATED ANNUAL REPORT 201018

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
9. Income Taxes
Income taxes applicable to the Company and its domestic subsidiaries comprise corporation, enterprise and inhabitants’ taxes
which, in the aggregate, resulted in a statutory tax rate of approximately 40.6% for the years ended March 31, 2010 and 2009. 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, 2010 and 2009 as a percentage ofincome before income taxes are as follows:
2010
40.6%
2.5
2.9
–
25.3
(4.4)
0.7
67.6%

Statutory tax rate
Permanently non-deductible expenses
Per capita portion of inhabitant’s taxes
Special tax credit for research and development costs
Unrealized profit on inventories
Differences in tax rates applicable to overseas subsidiaries
Other
Effective tax rates

2009
40.6%
1.3
1.3
(3.8)
–
(4.5)
0.0
34.9%

The significant components of deferred tax assets and liabilities at March 31, 2010 and 2009 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

2010
Deferred tax assets:
Unrealized gain on inventories
Net operating loss carryforward
Long-term accounts payable-otherAccrued bonuses
Accrued retirement benefits for employees
Deferred revenue
Devaluation of investments in securities
Allowance for doubtful accounts
Loss on devaluation of inventories
Unrealized holding loss on securities
Warranty reserves
Other
Total deferred tax assets¥

Deferred tax liabilities:
Depreciation
Reserve for special depreciation
Other
Total deferred tax liabilities
Net deferred tax assets

–
263
207
145
112
39
35
30
30
–
–
83
944

2009
¥

(33)
(19)
(31)
(83)
¥

861

319
–
208
151
–
61
394
40
–
82
21
81
1,357

2010
$

(35)
–
(15)
(50)
¥

1,307

–
2,827
2,225
1,559
1,204
419
376
322
322
–
–
893
10,147

(355)
(204)
(333)
(892)
$

9,255

ICOM INCORPORATED ANNUAL REPORT 2010

19

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
10. Shareholders’ Equity
The Corporation Law of Japan (the “Law”) provides that an amount equal to 10% of the amount to be disbursed as distributions ofcapital surplus (other than the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capital reserveand the legal 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 aremet.
The Company’s legal reserve included in retained earnings at March 31, 2010 and 2009 amounted to ¥293 million ($3,150
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, 2010 and 2009 are summarized as follows:

Treasury stock

Treasury stock

March 31, 2009
30,839Number of shares
2010
Increase
Decrease
280–

March 31, 2010
31,119March 31, 2008
107,451

Number of shares
2009
Increase
Decrease
388
77,000March 31, 2009
30,839

11. Derivatives and Hedging Activities
The estimated fair value of the derivatives positions outstanding which qualify for deferral hedge accounting at March 31, 2010 issummarized as follows:
Currency-related transactions
Millions of yen
2010

Method ofhedge
accounting
Allocation
method forforwardforeignexchange
contracts

Transaction
Forward foreignexchange contracts
Selling:
USD

Total

Major hedged item

Contract value(notional
principal
amount)Contract value(notional
principal
amount)over one year

Estimated
fair
value

Deposits denominated in foreign
currencies

¥ 557

¥–

¥ (1)

¥ 557

¥–

¥ (1)

ICOM INCORPORATED ANNUAL REPORT 201020

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
11. Derivatives and Hedging Activities (continued)
Thousand of U.S. dollar
2010

Method ofhedge
accounting
Allocation
method forforwardforeignexchange
contracts

Major hedged item

Contract value(notional
principal
amount)Contract value(notional
principal
amount)over one year

Estimated
fair
value

Deposits denominated in foreign
currencies$ 5,987$–$ (11)$ 5,987$–$ (11)

Transaction
Forward foreignexchange contracts
Selling:
USD

Total

The fair values of forward foreign exchange contracts are calculated using the prices offered by the transacting financial
institutions and others.

Disclosure of corresponding information on derivatives which qualify for deferral hedge accounting at March 31, 2009 isomitted.

12. Research and Development Costs
Research and development costs included in selling, general and administrative expenses for the years ended March 31, 2010 and2009 were as follows:
Thousands of
U.S. dollars

Millions of yen

Research and development costs

¥

2010
2,763

¥

2009
3,022

$

2010
29,700ICOM INCORPORATED ANNUAL REPORT 201021

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
13. Related Party Transactions
Principal transactions between the Company and a related party for the years ended March 31, 2010 and 2009 were summarized asfollows:[Corporate Auditors]
Thousands of
U.S. dollars

Millions of yen

Name
Katsunori
Sugimoto

Description
The Company’s corporate
auditor and a patent attorney

Equityownership
percentage
0.01%

Nature oftransaction
Payment ofpatentattorney’s fee

2010

¥

14

2009

¥

2010

17

$

150

Payment of patent attorney’s fee were determined based on the same terms as third party transactions.
The balances due to a related party at March 31, 2010 and 2009 were as follows:
Thousands of
U.S. dollars

Millions of yen

Due to Katsunori Sugimoto

Account nameAccounts payable-other

¥

2010
2

¥

2009
2

$

2010
21

(Additional information)
Effective the year ended March 31, 2009, the Company adopted a new accounting standard, “Accounting Standard for Related
Party Disclosures” (ASBJ Statement No. 11 issued on October 17, 2006) and “Guidance on Accounting Standard for Related Party
Disclosures” (ASBJ Guidance No. 13 issued on October 17, 2006).

14. Amounts per Share
Amounts per share at March 31, 2010 and 2009 and for the years then ended were as follows:Yen

Net assets
Net income:
Basic
DilutedCash dividends¥

2010
3,094.79
15.55
–
20.00

¥

U.S. dollars

2009
3,086.49
67.40
–
40.00

$

2010
33.27
0.17
–
0.21

Net assets per share is computed based on the number of shares of common stock outstanding at the year end.
Basic net income per share is computed based on the weighted-average number of shares of common stock outstanding during
each year. Diluted net income per share is computed based on the weighted-average number of shares of common stock outstanding
during each year after giving effect to the dilutive potential of the shares of common stock to be issued upon the exercise of stockacquisition rights.
Cash dividends per share represent the cash dividends declared as applicable to the respective fiscal years.
Diluted net income per share for the years ended March 31, 2010 and 2009 was not presented since the Company had nooutstanding dilutive securities at March 31, 2010 and 2009.

ICOM INCORPORATED ANNUAL REPORT 201022

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
15. Segment Information
The Company and its subsidiaries are primarily engaged in the manufacture and sale of products in Japan and overseas in two
major segments: radio and computer. The radio products are manufactured by the Company and Wakayama Icom Inc., a domestic
subsidiary and are sold in Japan and overseas through the Company and its subsidiaries. The manufacturing in the computer segment
is handled by the Company and Wakayama Icom Inc. and certain components and commercial products are supplied by Asia Icom
Inc., a Taiwanese subsidiary. The market for products in the computer segment is mainly Japan and these products are sold by theCompany and its domestic subsidiaries.

(1) Business Segments
The business segment information of the Company and its subsidiaries for the years ended March 31, 2010 and 2009 issummarized as follows:
Millions of yen

Radio
I. Net sales and operating income (loss)
Sales to third parties
Intersegment sales
Net sales
Operating expenses
Operating income (loss)
II. Total assets, depreciation andamortization and capital expenditures
Total assets
Depreciation and amortization
Capital expenditures

¥

¥

¥

2010
SubtotalComputer

22,351–
22,351
21,853498¥

47,302
1,313
434

¥

¥

1,289
–
1,289
1,356
(67)

¥

2,048
49
15

¥

¥

Eliminations

Consolidated

23,640–23,64023,209
431

¥

–
–
–
–
–

¥

49,350
1,362
449

¥

–
–
–

¥

¥

¥

23,640–23,64023,209431

49,350
1,362
449

Millions of yen

Radio
I. Net sales and operating income (loss)
Sales to third parties
Intersegment sales
Net sales
Operating expenses
Operating income (loss)
II. Total assets, depreciation andamortization and capital expenditures
Total assets
Depreciation and amortization
Capital expenditures

¥

¥

¥

2009
SubtotalComputer

27,715–27,71524,842
2,873¥

46,633
1,565
2,402

¥

¥

1,860
–
1,860
1,948
(88)

¥

2,612
85
96

¥

¥

Eliminations

Consolidated

29,575–29,575
26,790
2,785

¥

–
–
–
–
–

¥

49,245
1,650
2,498

¥

–
–
–

¥

¥

¥

ICOM INCORPORATED ANNUAL REPORT 2010

29,575–29,575
26,7902,785

49,245
1,650
2,498

23

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
15. Segment Information (continued)(1) Business Segments (continued)
Thousands of U.S. dollars

Radio
I. Net sales and operating income (loss)
Sales to third parties
Intersegment sales
Net sales
Operating expenses
Operating income (loss)
II. Total assets, depreciation andamortization and capital expenditures
Total assets
Depreciation and amortization
Capital expenditures

$

$

$

240,256–
240,256
234,903
5,353

508,460
14,113
4,665

2010
SubtotalComputer$$$

13,856–
13,856
14,576(720)$

22,014
527
161

$

$

Eliminations

Consolidated

254,112–254,112249,479
4,633

$

–
–
–
–
–

$

530,474
14,640
4,826

$

–
–
–

$

$

$

254,112–254,112249,479
4,633

530,474
14,6404,826(Accounting Changes)
1. Accounting Standard for Retirement Benefits
As mentioned in Note 2(k), effective the year ended March 31, 2010, the Company and its domestic subsidiaries have adopted“Partial Amendments to Accounting Standard for Retirement Benefits (Part3)” (ASBJ Statement No. 19 issued on July 31, 2008).
The adoption of this standard had no effect on the consolidated operating results for the year ended March 31, 2010.
2.

Accounting Standard for Measurement of Inventories
As mentioned in Note 2(e), effective the year ended March 31, 2009, the Company and its domestic subsidiaries adopted“Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9 issued on July 5, 2006). As a result, operating
expenses in the radio and computer segments increased by ¥75 million and ¥7 million, respectively, and operating income decreasedby the same amounts for the year ended March 31, 2009 as compared to the corresponding amounts which would have been recorded
under the previous method.
3.

Accounting Standard for Lease Transactions
As mentioned in Note 2(h), finance leases that did not transfer ownership to the lessee had been treated in a manner similar tooperating leases.
However, effective the year ended March 31, 2009, the Company and its domestic subsidiaries adopted “Accounting Standard forLease Transactions” (ASBJ Statement No.13 originally issued by the First Committee of the Business Accounting Council on June
17, 1993 and revised by ASBJ on March 30, 2007) and “Implementation Guidance on Accounting Standard for Lease Transactions”(ASBJ Guidance No.16 originally issued by the Accounting System Committee of the Japanese Institute of Certified Public
Accountants on January 18, 1994 and revised by ASBJ on March 30, 2007). Such transactions are now accounted for as ordinary saleand purchase transactions. The adoption of this standard had no effect on the consolidated operating results for the year ended March
31, 2009.
4.

Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements
As mentioned in Note 3, effective the year ended March 31, 2009, “Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task Force No.18 issued on May 17,2006) was adopted. The impact of this change on the business segment information was immaterial.

ICOM INCORPORATED ANNUAL REPORT 201024

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
15. Segment Information (continued)(1) Business Segments (continued)(Additional information)
As mentioned in Note 2(f), in accordance with the 2008 revision of the Corporation Tax Law, effective the year ended March 31,
2009, the Company and its domestic subsidiaries had reviewed the estimated useful lives of certain tangible fixed assets and changed
them. The impact of this change on the business segment information was immaterial.

(2) Geographical Segments
The geographical segment information of the Company and its subsidiaries for the years ended March 31, 2010 and 2009 issummarized as follows:
Millions of yen

Japan
I. Net sales and operating (loss)
incomeSales to third parties
Intersegment sales
Net sales
Operating expenses
Operating (loss) income
II. Total assets¥ 13,494
5,684
19,17819,360¥(182)¥ 43,518

North
America

¥

¥
¥

7,831
12
7,843
7,667
176
5,154

2010
Asia &
Oceania

Europe

¥

¥
¥

1,218
1
1,219
1,205
14
857

¥

¥
¥

1,097
202
1,299
1,170
129
2,141

Subtotal

Eliminations

Consolidated¥ 23,640
5,899
29,53929,402¥137¥ 51,670¥¥ 23,640–
23,64023,209¥431¥ 49,350¥¥–(5,899)(5,899)(6,193)294(2,320)Millions of yen

I. Net sales and operating (loss)
incomeSales to third parties
Intersegment sales
Net sales
Operating expenses
Operating income
II. Total assets

¥

¥
¥

Japan

North
America

16,344
10,38826,732
24,7122,020
43,696¥ 10,162
15
10,177
9,799¥
378¥ 5,671

2009
Asia &
Oceania

Europe

¥

¥
¥

1,761
0
1,761
1,639
122
933

¥

¥
¥

1,308
419
1,727
1,535
192
1,602

Subtotal

Eliminations

Consolidated¥ 29,575
10,82240,397
37,685¥ 2,712¥ 51,902¥¥ 29,575–
29,575
26,790¥ 2,785¥ 49,245–(10,822)(10,822)(10,895)¥73¥ (2,657)

ICOM INCORPORATED ANNUAL REPORT 201025

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
15. Segment Information (continued)
2) Geographical Segments (continued)
Thousands of U.S. dollars

I. Net sales and operating (loss)
incomeSales to third parties
Intersegment sales
Net sales
Operating expenses
Operating (loss) income
II. Total assets

Japan

North
America

Europe$ 145,050
61,099206,149
208,105$ (1,956)$ 467,785$ 84,177
129
84,30682,414$ 1,892$ 55,401$ 13,093
11
13,104
12,953$151$ 9,2122010
Asia &
Oceania$$$

11,792
2,171
13,963
12,577
1,386
23,014

Subtotal

Eliminations

Consolidated$ 254,112
63,410317,522
316,049$1,473$ 555,412$$ 254,112–
254,112249,479$
4,633$ 530,474–(63,410)(63,410)(66,570)$
3,160$ (24,938)(Accounting Changes)
1. Accounting Standard for Retirement Benefits
As mentioned in Note 2(k), effective the year ended March 31, 2010, the Company and its domestic subsidiaries have adopted“Partial Amendments to Accounting Standard for Retirement Benefits (Part3)” (ASBJ Statement No. 19 issued on July 31, 2008).
The adoption of this standard had no effect on the consolidated operating results for the year ended March 31, 2010.
2.

Accounting Standard for Measurement of Inventories
As mentioned in Note 2(e), effective the year ended March 31, 2009, the Company and its domestic subsidiaries adopted“Accounting Standard for Measurement of Inventories” (ASBJ Statement No. 9 issued on July 5, 2006). As a result, operating
expenses in the Japan geographic segment increased by ¥82 million and operating income decreased by the same amount for the year
ended March 31, 2009 as compared to the corresponding amount which would have been recorded under the previous method.
3.

Accounting Standard for Lease Transactions
As mentioned in Note 2(h), finance leases that did not transfer ownership to the lessee had been treated in a manner similar tooperating leases.
However, effective the year ended March 31, 2009, the Company and its domestic subsidiaries adopted “Accounting Standard forLease Transactions” (ASBJ Statement No.13 originally issued by the First Committee of the Business Accounting Council on June
17, 1993 and revised by ASBJ on March 30, 2007) and “Implementation Guidance on Accounting Standard for Lease Transactions”(ASBJ Guidance No.16 originally issued by the Accounting System Committee of the Japanese Institute of Certified Public
Accountants on January 18, 1994 and revised by ASBJ on March 30, 2007). Such transactions are now accounted for as ordinary saleand purchase transactions. The adoption of this standard had no effect on the consolidated operating results for the year ended March
31, 2009.
4.

Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements
As mentioned in Note 3, effective the year ended March 31, 2009, “Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task Force No.18 issued on May 17,2006), was adopted. The impact of this change on the geographical segment information was immaterial.

(Additional information)
As mentioned in Note 2(f), in accordance with the 2008 revision of the Corporation Tax Law, effective the year ended March 31,
2009, the Company and its domestic subsidiaries had reviewed the estimated useful lives of certain tangible fixed assets and changed
them. The impact of this change on the geographical segment information was immaterial.

ICOM INCORPORATED ANNUAL REPORT 2010

26

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
15. Segment Information (continued)(3) Overseas Sales
Overseas sales, which include export sales of the Company and its domestic subsidiaries and sales (other than exports to Japan) of
the overseas subsidiaries, for the years ended March 31, 2010 and 2009 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

31.8%
17.2%
15.8%
7.8%
72.6%

¥

2009
9,524
6,071
5,269
2,488
¥ 23,352

32.2%
20.5%
17.8%
8.5%
79.0%

$

¥

2010
7,516
4,061
3,747
1,837
17,161$

2010
80,791
43,65340,277
19,746
184,467¥

23,640100.0%¥ 29,575

100.0%$

254,112

North America
EuropeAsia
OtherSales to overseas customers¥

Consolidated net sales

16. Significant Subsidiaries and Affiliate
The Company’s subsidiaries and a significant affiliate are presented as follows:

Name
Icom America, Inc.
Icom (Europe) GmbH
Icom (Australia) Pty., Ltd.
Icom Spain, S.L.
Asia Icom Inc.
Wakayama Icom Inc.
Icom Information Products Inc.
Icom America License Holding LLC
Comforce Inc.

Ownership
Interest
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%Country of Incorporation
United States of America
Germany
Australia
Spain
TaiwanJapan
Japan
United States of America

49.0%

Japan

Subsidiaries/Affiliate
Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Affiliate accounted forby the equity method

17. Subsequent Event
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, 2010, was approved at the Company’s general shareholders’ meeting held on June25, 2010:
Thousands of
U.S. dollars

Millions of yen

Cash dividends (¥10 = U.S.$0.11 per share)

¥

2010
148

$

2010
1,591

ICOM INCORPORATED ANNUAL REPORT 201027

Report of Independent Auditors
The Board of Directors
ICOM INCORPORATED
We have audited the accompanying consolidated balance sheets of ICOMINCORPORATED and subsidiaries as of March 31, 2010 and 2009, and the related
consolidated statements of income, changes in net assets, and cash flows for the years thenended, all expressed in yen. These financial statements are the responsibility of theCompany’s management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in Japan.
Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accounting principles used andsignificant estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all material
respects, the consolidated financial position of ICOM INCORPORATED and subsidiaries
at March 31, 2010 and 2009, and the consolidated results of their operations and their cash
flows for the years then ended in conformity with accounting principles generally acceptedin Japan.
The U.S. dollar amounts in the accompanying consolidated financial statements withrespect to the year ended March 31, 2010 are presented solely for convenience. Our audit
also included the translation of yen amounts into U.S. dollar amounts and, in our opinion,such translation has been made on the basis described in Note 1.

June 25, 2010

BOARD OF DIRECTORSAND AUDITORSTokuzo Inoue
Chairman and Representative Director

Tsutomu Fukui
President and Representative Director

Nobuo Ogawa
Executive Managing Director

Kiyoshi Sakurai
Director

Taichiro Itoyama
Director (part-time)

Toshihiro Wada
Auditor (full-time)

Hiroshi Umemoto
Auditor

Katsunori Sugimoto
AuditorEXECUTIVE OFFICERS
Masataka Harima
Masanori Kamoto
Hiroshi Shimizu
Kikuji Okumura
Seishi Yamazaki
Hiroshi Nakaoka
Masakazu Kaneko
Takayuki Watanabe
Takashi Tsujiuchi

DIRECTORY
Head Office: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/
Subsidiaries:
Icom America, Inc.
2380 116th Avenue N.E., Bellevue,
WA 98004, U.S.A.
Phone: 1-425-454-8155
Fax: 1-425-454-1509
URL http://www.icomamerica.com/
Icom (Europe) GmbHAuf der Krautweide 24, 65812
Bad Soden am Taunus, GERMANY
Phone: 49-6196-76685-0
Fax: 49-6196-76685-50
URL http://www.icomeurope.com/
Icom (Australia) Pty., Ltd.
A.B.N. 88 006 092 575
Unit 1/103 Garden Road,
Clayton Victoria 3168, AUSTRALIA
Phone: 61-3-9549-7500
Fax: 61-3-9549-7505
URL http://www.icom.net.au/
Icom Spain, S.L.
“Edificio Can Castanyer” Ctra. Gracia
a Manresa km. 14, 750 08190
Sant Cugat Del Valles
Barcelona, SPAIN
Phone: 34-93-590-2670
Fax: 34-93-589-0446
URL http://www.icomspain.com/
Asia Icom Inc.
6F, No.68, Section 1, Cheng-Teh,
Road Taipei, TAIWAN R.O.C.
Phone: 886-2-2559-1899
Fax: 886-2-2559-1874
Wakayama Icom Inc.
1866-1, Oaza Tokuda, Aritagawa-chou
Arita-gun, Wakayama, 643-0801
JAPAN
Phone: 81-737-52-6600
Fax: 81-737-52-6603

Shareholders
Tokuzo Inoue
State Street Bank and Trust Company
Gigapalace Inc.
The Icom Foundation
Northern Trust Co. (AVFC) Sub A/C American Clients
State Street Bank and Trust Company
Kenwood Corporation
The Master Trust Bank of Japan, Ltd.
Japan Trustee Service Bank, Ltd.
Meiji Yasuda Life Insurance Company

Icom Information Products Inc.
3-8-15, Nipponbashi, Naniwa-ku,
Osaka, 556-0005, JAPAN
Phone: 81-6-6635-5701
Fax: 81-6-6635-5707
URL http://www.icom-jk.co.jp/
Icom America License Holding LLC
2380 116th Avenue N.E., Bellevue,
WA 98004, U.S.A.
Phone: 1-425-454-8155
Fax: 1-425-454-1509

Affiliates:
Comforce Inc.
8F, 3-42-3, Nihonbashi Hamacho,
Chuo-ku, Tokyo, 103-0007, JAPAN
Phone: 81-3-3662-1167
Fax: 81-3-3662-1168
URL http://www.comforce.co.jp/

TRANSFER AGENT
Mitsubishi UFJ Trust and Banking
Corporation
Tokyo Office:4-5, Marunouchi 1-chome,
Chiyoda-ku, Tokyo 100-8212, JAPAN
Osaka Office:6-3, Fushimimachi 3-chome
Chuo-ku, Osaka, 541-0044, JAPANINVESTOR RELATIONS
Mr. Kenji Oono
Chief of Managing and Planning
Section, Icom Inc.
1-1-32, Kamiminami, Hirano-ku,
Osaka, 547-0003, JAPAN
Phone: 81-6-6793-5301
Fax: 81-6-6793-5305

CORPORATE FACTS
Established: July 1964
Employees: 623
Paid-in capital: ¥7,081 million
Authorized shares: 34,000,000
Issued and outstanding shares:
14,850,000
Shareholders: 3,722
Stock listing: Tokyo Stock Exchange
and Osaka Securities Exchange
Thousands of shares
1,868
1,757
1,472
1,000
580
572
445
437
363
343