YEAR ENDED MARCH 31, 2016

ICOM INCORPORATED

Financial Highlights
ICOM INCORPORATED AND SUBSIDIARIES
Years ended March 31, 2016, 2015 and 2014
Thousands of
U.S. dollars

Millions of yen

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

Total assets¥

Amounts per share:
Net assets
Net income – basic
Net income – diluted
Cash dividends

2016
26,875
2,368
2,349
1,660
1,660
59,201¥

2015
26,399
2,501
2,992
2,115
2,115

¥

¥

58,660¥2014
26,283
2,205
3,369
2,238
2,238

2016
$ 238,529
21,017
20,84814,733
14,73356,458$ 525,437

Yen¥ 3,613.66
112.03–
36.00

U.S. dollars¥ 3,637.17
142.72–
35.00¥ 3,468.01
151.02
–
30.00

$

32.07
0.99
–
0.32

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥112.67 = U.S.$1.00, the exchange rate prevailing on March 31, 2016.
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)

26,87528,00026,283

26,399

2,501
3,000

2,205

2,368

2,500
26,000

2,000
1,500

24,000

1,000
500
0

22,000
2014

2015

2014

2016

Net Income attributable to owners of parent

Total Assets(Millions of yen)

(Millions of yen)

2,238

2015

58,660

2,115

2,500

60,0001,660

2016

59,20156,45858,0002,000

56,0001,500

54,0001,000

52,000500

50,00048,000

0
2014

2015

2016

2014

2015

2016

ICOM INCORPORATED ANNUAL REPORT 2016

1

Operating Highlights
GEOGRAPHICAL SEGMENT INFORMATION
Years ended March 31, 2016 and 2015
Millions of yen

Net sales
2016
2015¥ 23,129¥ 23,061
8,879
8,857
1,091
1,053
1,310
1,545
(7,534)(8,117)¥ 26,875¥ 26,399

Japan
North America
EuropeAsia & Oceania
Eliminations
Consolidated total

Thousands of U.S. dollars

Operating income (loss)
2016
2015
¥ 2,209¥ 2,627
10
122
(5)
(33)
(33)
26
187
(241)
¥ 2,368¥ 2,501

Net sales
2016$ 205,281
78,806
9,683
11,627(66,868)$ 238,529

Operating income(loss)
2016$ 19,606
89
(45)
(293)
1,660
$ 21,017

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥112.67 = U.S.$1.00, the exchange rate prevailing on March 31, 2016.
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)Japan23,12923,061

North America

25,000Europe20,000Asia & Oceania

15,000
8,857

8,879

10,000
1,053

5,000

1,091 1,310

1,545

0
2015

2016

Operating Income (Loss)(Millions of yen)

Japan

2,627

North America

3,000

2,209

Europe2,500

Asia & Oceania

2,000
1,500
1,000

122

500

△ 33

26

10 △ 5

△ 33

0
(500)
2015

2016

ICOM INCORPORATED ANNUAL REPORT 2016

2

Operating Highlights
OVERSEAS SALES
Years ended March 31, 2016 and 2015
Millions of yen

2016 (Unaudited)¥ 8,130
30.2%
3,790
14.1
5,266
19.6
849
3.2
18,035
67.1
8,840
32.9
¥ 26,875
100.0%

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

Thousands of U.S. dollars

2015¥ 8,000
30.4%
3,748
14.2
5,316
20.1
982
3.7
18,046
68.4
8,353
31.6
¥ 26,399
100.0%

2016 (Unaudited)$ 72,158
33,63846,738
7,535
160,069
78,460$ 238,529

Notes:
1. All dollar amounts herein refer to U.S. dollars translated from Japanese yen at ¥112.67 = U.S.$1.00, the exchange rate prevailing on March 31, 2016.
2. Amounts shown in millions of yen and thousands of dollars are rounded off to the nearest million or thousand.

Net Sales 2015

North America
30.4%

Europe14.2%

Overseas
Sales

Domestic Sales
31.6%

Other
3.7%

Asia &
Oceania
20.1%

Net Sales 2016

North America
30.2%

Europe14.1%

Overseas
Sales

Domestic Sales
32.9%

Other
3.2%

Asia &
Oceania
19.6%

ICOM INCORPORATED ANNUAL REPORT 2016

3

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet
March 31, 2016

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

AssetsCurrent assets:
Cash and deposits (Notes 3 and 4)
Marketable securities (Notes 3, 4 and 5)
Notes and accounts receivable (Note 4)
Allowance for doubtful accounts

2016

2015

2016

Total current assets¥ 32,986
401
5,144
(28)
5,116
6,379
512
1,436
46,830¥ 31,937
100
4,594
(33)
4,561
6,545
638
1,585
45,366$ 292,766
3,559
45,655(248)
45,40756,617
4,544
12,746415,639

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 13)

4,152
6,808
12,577204
1023,751(15,883)
7,868

4,174
6,869
12,320215
1423,592(15,498)
8,094

36,85160,424
111,627
1,810
89210,801(140,969)
69,832

Investments and other assets:
Investments in securities (Notes 4 and 5)
Other investments
Deferred income taxes (Note 8)
Intangible assets (Note 13)
Allowance for doubtful accounts
Total investments and other assets
Total assets (Note 13)

3,074
792
629
63
(55)
4,503
¥ 59,201

2,263
2,692
255
52
(62)
5,200
¥ 58,660

27,283
7,029
5,583
559
(488)
39,966$ 525,437

Inventories (Note 6)
Deferred income taxes (Note 8)
Other current assets

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2016

4

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Balance Sheet
March 31, 2016

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

Liabilities and net assets
Current liabilities:
Accounts payable - trade (Note 4)
Accounts payable - otherAccrued income taxes (Note 8)
Deferred income taxes (Note 8)
Accrued expenses
Accrued bonuses
Warranty reserves
Other current liabilities

2016

2015

2016

Total current liabilities¥ 1,328
632
217
1
665
458
48
123
3,472

¥ 1,178
603
513
2
147
447
69
766
3,725

$ 11,787
5,609
1,926
9
5,902
4,065
426
1,092
30,816Long-term liabilities:
Deferred income taxes (Note 8)
Liability for retirement benefits (Note 7)
Other long-term liabilities
Total long-term liabilities

140
1,451
591
2,182

233
180
626
1,039

1,243
12,878
5,245
19,366

7,081
10,44936,128

7,081
10,44935,031

62,84792,740320,653(104)
53,554(103)
52,458(923)
475,317

20
396
(423)
(7)
53,547¥ 59,201

17
903
518
1,438
53,896¥ 58,660

178
3,514(3,754)(62)475,255$ 525,437

Net assets:
Shareholders’ equity (Note 9):
Common stock:
Authorized – 34,000,000 shares;
14,850,000 shares in 2016 and 2015
Issued –Capital surplus
Retained earnings (Note 15)
Less treasury stock, at cost:
32,083 shares in 2016 and 31,783 shares in 2015
Total shareholders’ equity
Accumulated other comprehensive (loss) income(Note 11):
Net unrealized holding gain on securities (Note 5)
Translation adjustments
Retirement benefit liability adjustments (Note 7)
Total accumulated other comprehensive (loss) income
Total net assets
Total liabilities and net assets
See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2016

5

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement of Income
Year ended March 31, 2016
Thousands of
U.S. dollars(Note 1)Millions of yen

Net sales (Note 13)
Cost of sales (Notes 6 and 13)
Gross profit
Selling, general and administrative expenses(Notes 10 and 13)
Operating income (Note 13)
Other income (expenses):
Interest and dividend income
Gain on sales of investment in securities, net (Note 5)
Foreign exchange (loss) gain, net
Gain on sales of property, plant and equipment
Sales discounts
Other, net
Profit before income taxes
Income taxes (Note 8):
Current
DeferredProfitProfit attributable to owners of parent (Note 12)2016¥ 26,875
15,035
11,8402015¥ 26,399
14,558
11,841

2016$ 238,529
133,443
105,086

9,472
2,368

9,340
2,501

84,06921,017

182
9
(77)
1
(175)
41
(19)
2,349

200
9
376
7
(175)
74
491
2,992

1,615
80
(684)
9
(1,553)364(169)
20,848590
99689¥ 1,660¥ 1,660

894
(17)
877
¥ 2,115¥ 2,115

5,236
879
6,115
$ 14,733$ 14,733

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2016

6

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement ofComprehensive Income
Year ended March 31, 2016

Millions of yen

ProfitOther comprehensive (loss) income (Note 11):
Net unrealized holding gain on securities
Translation adjustments
Retirement benefit liability adjustments
Total other comprehensive (loss) income
Comprehensive income
Total comprehensive income attributable to:
Owners of parent

Thousands of
U.S. dollars(Note 1)2016
¥ 1,6602015¥ 2,1152016$ 14,733

3
(507)
(941)
(1,445)
¥ 215

51
470
314
835
¥ 2,950

27(4,500)(8,352)(12,825)$ 1,908¥¥ 2,950$ 1,908215

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2016

7

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement of
Changes in Net Assets
Year ended March 31, 2016
Millions of yen

Balance at April 1, 2014
Profit attributable toowners of parent
for the year
Cash dividends
Purchases of treasury
stock
Other changes
Balance at April 1, 2015
Profit attributable toowners of parent
for the year
Cash dividends
Purchases of treasury
stock
Other changes
Balance at March 31, 2016

Number ofshares in
issue

Commonstock

CapitalsurplusRetainedearnings

Treasurystock, at costNet
unrealized
holdinggain
on securities

14,850,000¥ 7,081¥ 10,449¥ 33,360¥ (103)¥ (34)

¥ 433

¥ 204

¥ 51,390

–
–

–
–

–
–

2,115
(444)

–
–

–
–

–
–

–
–

2,115
(444)

–
–

–
–

–
–

–
–

(0)
–

–
51

–
470

–
314

(0)
835

14,850,000¥ 7,081¥ 10,449¥ 35,031¥ (103)

¥ 17

¥ 903

¥ 518

¥ 53,896

–
–

–
–

–
–

1,660
(563)

–
–

–
–

–
–

–
–

1,660
(563)

–
–

–
–

–
–

–
–

(1)
–

–
3

–
(507)

–
(941)

(1)
(1,445)

14,850,000¥ 7,081¥ 10,449¥ 36,128¥ (104)

¥ 20

¥ 396

¥ (423)¥ 53,547

Translation
adjustments

Retirement
benefit liability
adjustments

Total net
assetsTranslation
adjustments

Retirement
benefit liability
adjustments

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

Balance at April 1, 2015
Profit attributable toowners of parent
for the year
Cash dividends
Purchases of treasury
stock
Other changes
Balance at March 31, 2016

Commonstock

CapitalsurplusRetainedearnings

Treasurystock, at costNet
unrealized
holdinggain
on securities$ 62,847$ 92,740$ 310,917$ (914)$ 151$ 8,014$ 4,598$ 478,353

–
–

–
–

14,733(4,997)

–
–

–
–

–
–

–
–

14,733(4,997)

–
–

–
–

–
–

(9)
–

–
27

–
(4,500)–(8,352)(9)(12,825)$ 62,847$ 92,740$ 320,653$ (923)$ 178$ 3,514$ (3,754)$ 475,255

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2016

8

ICOM INCORPORATED AND SUBSIDIARIES

Consolidated Statement of Cash Flows
Year ended March 31, 2016
Thousands of
U.S. dollars(Note 1)Millions of yen

Operating activities:
Profit before income taxes
Adjustments for:
Depreciation and amortization
Interest and dividend income
Foreign exchange loss, net
Increase in notes and accounts receivable
Increase in inventories
Increase (decrease) in accounts payable – trade
Other, net
Subtotal
Income taxes paid
Net cash provided by operating activities
Investing activities:
Decrease (increase) in time deposits with original
maturities in excess of three months
Redemption of marketable securities
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 in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 3)

2016

2015

2016

¥ 2,349¥ 2,992$ 20,848

892
(182)
129
(674)
(10)
250
(24)
2,730
(923)
1,807

866
(200)
33
(77)
(271)
(246)
(198)
2,899
(796)
2,103

7,917
(1,615)
1,145(5,982)
(89)
2,219
(213)
24,230(8,192)
16,038

2,816
100
(680)
(47)
(1,330)

(567)
–
(796)
(33)
(209)

24,993887(6,035)(417)(11,804)

121
181
1,823
2,984

321
200
(9)
(1,093)

1,074
1,606
16,18026,484

(1)
(563)
(564)

(0)
(444)
(444)

(9)
(4,997)(5,006)

(242)
3,985
28,210¥ 32,195

224
790
27,420¥ 28,210(2,147)35,369250,377$ 285,746

See accompanying Notes to consolidated financial statements.

ICOM INCORPORATED ANNUAL REPORT 2016

9

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
March 31, 2016

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 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, 2015 to the 2016
presentation. Such reclassifications had no effect on consolidated net income or net assets.
In addition, the notes to the consolidated financial statements include certain information which is not required under accounting
principles generally accepted in Japan but is presented herein as additional information.
The translation of yen amounts into U.S. dollar amounts is included solely for the convenience of readers outside Japan, as amatter of arithmetic computation only, and has been made at ¥112.67 = U.S.$1.00, the approximate rate of exchange in effect on
March 31, 2016. 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 theiroperating 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.
The financial statements of certain consolidated subsidiary whose fiscal year end is December 31 has been included inconsolidation on the basis of a full fiscal year closing on March 31 for consolidation purposes.

(b) Cash and cash equivalents
For purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash on hand, deposits withbanks withdrawable on demand, and short-term investments which are readily convertible to cash subject to an insignificant riskof any changes in their value and which were purchased with an original maturity of three months or less.

(c) Foreign currency translation
The balance sheet accounts of the overseas subsidiaries are translated into yen at the rates of exchange in effect at the balance
sheet date except that the components of net assets are translated at their historical exchange rates. Adjustments resulting fromtranslating accounts denominated in foreign currencies are not included in the determination of profit in the accompanying
consolidated financial statements, but are reported as “Translation adjustments,” a component of net assets.
Revenue and expense accounts are translated at the average rates of exchange in effect during the year.
All monetary assets and liabilities denominated in foreign currencies are translated into yen at the rates of exchange in effectat the balance sheet date, except that receivables hedged by qualified forward foreign exchange contracts are translated at thecorresponding contract rates. Gain or loss on each translation is credited or charged to income.

(d) Marketable securities and investments in securities
In general, securities are classified into three categories: trading securities, held-to-maturity debt securities or other securities.
Trading securities, consisting of debt and marketable equity securities, are stated at fair value. Gain or loss, both realized andunrealized, are credited or charged to income. Held-to-maturity debt securities are stated at their amortized cost. Marketablesecurities classified as other securities are carried at fair value with any changes in unrealized holding gain or loss, net of theapplicable income taxes, reported as a separate component of net assets. Non-marketable securities classified as othersecurities are carried at cost determined by the moving average method.
Securities held by the Company and its subsidiaries including equity investments in an affiliate, which are not accounted foron an equity basis, are all classified as “other securities” and have been accounted for as outlined above.

ICOM INCORPORATED ANNUAL REPORT 2016

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 goods held by certain overseas subsidiaries which are valued at the lower of cost or market, 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 is computed principally by the
declining-balance method over the estimated useful lives of the respective assets as prescribed in the Corporation Tax Law ofJapan, 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 and less than ¥200 thousand, are depreciated by the straight-line method over a three-year period.

(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 for internal use are charged to income when incurred, except if it is anticipated that this software will contribute to thegeneration of income 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. Small assets owned by the Company and its domestic subsidiaries, which
are valued at ¥100 thousand or more and less than ¥200 thousand, are amortized by the straight-line method over a three-year
period.

(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 calculated based on the historical ratio of the cost of repairs of the
products against net sales.

(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 thestraight-line method over ten years, which is within the average remaining years of service of eligible employees.

ICOM INCORPORATED ANNUAL REPORT 2016

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
not entered 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 attheir corresponding forward foreign exchange contract rates.
The evaluation of effectiveness of such forward foreign exchange contracts is omitted because significant terms of thehedging instruments and underlying hedged items are the same and the Company assumes that movements in cash flows arecompletely offset.

(n) Distribution of retained earnings
Under the Companies Act. of Japan and the Company’s Articles of Incorporation, the distribution of retained earnings withrespect to a given fiscal year end is made by resolution of the shareholders at a general meeting held subsequent to the close of
the financial period. The distribution of retained earnings with respect to interim financial periods is made by resolution of theBoard of Directors. (Please refer to Note 15.)(Changes in Accounting Policies)
Accounting Standard for Business Combinations
The Company adopted “Revised Accounting Standard for Business Combinations” (Accounting Standards Board of Japan(“ASBJ”) Statement No.21 issued on September 13, 2013), “Revised Accounting Standard for Consolidated Financial
Statements” (ASBJ Statement No.22 issued on September 13, 2013), “Revised Accounting Standard for Business Divestitures”(ASBJ Statement No.7 issued on September 13, 2013).
Under these revised accounting standards, the presentation method of net income was amended. The consolidated financial
statements for the previous year have been reclassified to reflect these changes in presentation.
(Standards Issued but Not Yet Effective)
Implementation Guidance on Recoverability of Deferred Tax Assets
On March 28, 2016, the ASBJ issued “Revised Implementation Guidance on Recoverability of Deferred Tax Assets” (ASBJ
Guidance No.26).
(1) Overview
Regarding the treatment of the recoverability of deferred tax assets, a review was conducted following the framework of theJapanese Institute of Certified Public Accountants Audit Committee Report No.66 “Audit Treatment on Determining the
Recoverability of Deferred Tax Assets,” whereby companies are categorized into five categories and deferred tax assets arecalculated based on each of these categories.
(2) Scheduled date of adoption
The Company expects to adopt the revised implementation guidance from the beginning of the fiscal year ending March 31,
2017.
(3) Impact of adopting revised implementation guidance
There will be no impact on the Company’s consolidated financial statement as a result of adopting the revised implementation
guidance.

ICOM INCORPORATED ANNUAL REPORT 2016

12

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
3. 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, 2016 and 2015 is summarized asfollows:
Thousands of
U.S. dollars

Millions 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

¥
¥

¥

2016
32,986401
33,387¥¥2015
31,937100
32,037$$

2016
292,766
3,559
296,325(791)(3,727)(7,020)(401)
32,195(100)
28,210(3,559)285,746¥$

4. 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 have highlevels of liquidity. The Group uses derivatives for the purpose of reducing risk and does not enter into derivatives for
speculative or 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 toforeign currency exchange rate fluctuation risk arising from trade receivables denominated in foreign currencies.
Marketable securities and investments in securities are exposed to market risk. Those securities are composed of mainly
corporate bonds in other securities and the shares of common stock of other companies with which it has business
relationships. Fair values of those securities are periodically reviewed and reported to board of directors meetings.
Most of Trade accounts payable have payment due dates within two months. The Group is exposed to foreign currency
exchange rate fluctuation risk arising from those denominated in foreign currencies.
Regarding derivatives, the Group enters into forward foreign exchange contracts to reduce the foreign currency exchange
rate fluctuation risk arising from cash and deposits and receivables denominated in foreign currencies. Further information
regarding the method of hedge accounting, hedging instruments and hedged items, hedging policy, and the assessment of theeffectiveness of hedging activities can be found in “(m) Hedge accounting” in Note 2 “Summary of Significant Accounting
Policies”.

ICOM INCORPORATED ANNUAL REPORT 2016

13

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
4. Financial Instruments (continued)(1) General information (continued)iii) Risk management for financial instruments(a) Monitoring of credit risk (the risk that customers or counterparties may default)
In accordance with the internal policies for managing credit risk of the Group arising from trade receivables, the credit
department monitors credit worthiness of main customers periodically, in principle, and monitors due dates andoutstanding balances by customer. In addition, the Group is making efforts to identify and mitigate risks of bad debt
from customers who have financial difficulties.
In accordance with the internal policies for security management, the Group only acquires corporate bonds or othersecurities with high credit ratings. Accordingly, the Group believes that the credit risk deriving from such debt
securities is insignificant.
The Group also believes that the credit risk of derivatives is insignificant as the Group enters into derivativetransactions only with financial institutions with high credit ratings.
(b) Monitoring of market risks (the risks arising from fluctuations in foreign exchange rates, interest rates and others)
For cash and deposits denominated in foreign currencies, in principle, for a portion of receivables denominated inforeign currencies, the Group identifies the foreign currency exchange risk by each currency and enters into forward
foreign exchange contracts to hedge such risk.
For marketable securities and investments in securities, the Group periodically reviews the fair values of such financial
instruments and the financial position of the issuers. In addition, the Group continuously evaluates whether securities
should be maintained taking into account their fair values and the relationships with the issuers.
For derivative transactions, the accounting department of the Company enters into and manages transactions, and a
representative director, in advance, approves them within the limits reported at the Board of Directors meeting. Resultsof derivative transactions are reported at the monthly Board of Directors meetings. The consolidated subsidiaries do 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.

ICOM INCORPORATED ANNUAL REPORT 2016

14

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
4. 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, 2016 and 2015 are shown in the following table. The following table does not include financial instruments forwhich it is extremely difficult to determine the fair value. (Please refer to Note ii below).
Millions of yen

2016
Carrying
value

2015

Fair value

Unrealized
gain (loss)¥¥

Carrying
value

Fair value

Unrealized
gain (loss)¥¥

Assets(1) Cash and deposits(2) Notes and accounts
receivable(3) Marketable securities andinvestments in securities
Total assets

¥

3,227
41,357¥3,227
41,357

¥

–
–

¥

2,159
38,690¥2,159
38,690¥––Liabilities(1) Accounts payable - trade
Total liabilities

¥
¥

1,328
1,328

¥
¥

1,328
1,328

¥
¥

–
–

¥
¥

1,178
1,178

¥
¥

1,178
1,178

¥
¥

–
–

¥

32,986
5,144

32,986
5,144

–

¥

–

31,937
4,594

31,937
4,594––

Thousands of U.S. dollars

2016
Carrying
value

Fair value

Unrealized
gain (loss)$$

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

28,641
367,062$

28,641
367,062$––

Liabilities(1) Accounts payable - trade
Total liabilities$$

11,787
11,787$$

11,787
11,787

$
$

–
–

$

292,766
45,655

292,766
45,655––ICOM INCORPORATED ANNUAL REPORT 2016

15

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
4. Financial Instruments (continued)(2) Estimated fair value of financial instruments (continued)
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 on either
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 5.
Liabilities(1) Accounts payable - trade
Since this item is settled in a short period of time, its carrying value approximates the fair value.
ii) Financial instruments for which it is extremely difficult to determine the fair value are as follows:
Thousands of
U.S. dollars

Millions of yen

Unlisted equity securities

¥

2016
248

¥

2015
204

$

2016
2,201

Since there is no market price for unlisted equity securities and it is difficult to determine the fair value, they are notincluded in above “(3) Marketable securities and investments in securities” in the preceding table in “(2) Estimated fairvalue of financial instruments.”

ICOM INCORPORATED ANNUAL REPORT 2016

16

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
4. Financial Instruments (continued)(3) Redemption schedule
The redemption schedule for financial instruments receivable and marketable securities and investments in securities withmaturity dates is summarized as follows:
Millions of yen

Due within
one year
Cash and deposits
Notes and accounts
receivable
Marketablesecurities andinvestments insecurities:
Other securities
with maturity
dates
Corporate bonds
Other
Total

¥

32,9862016
Due after
Due after
one yearfive years
throughthrough ten
five years
years
¥
– ¥
–

2015
Due after
five years
through ten
years
¥
–

Due after ten
years

Due within
one year¥¥–

Due after ten
years
¥

–

5,144

–

–

–

4,594

–

–

–

400

300
100
400

1,000

1,100

100

100

–

–

700
100
800

900

–

–
¥

31,937

Due after
one yearthroughfive years¥–

38,530

¥

¥

1,000

¥

1,100

¥

36,631

¥

–
¥

900

–
¥

100

Thousands of U.S. dollars

Cash and deposits
Notes and accounts
receivable
Marketablesecurities andinvestments insecurities:
Other securities
with maturity
dates
Corporate bonds
Other
Total

Due after
Due within
one year
one yearthroughfive years$
292,766 $–
45,655$3,550–
341,971 $2016
Due after
five years
through ten
years
$
–

Due after ten
years
$

–

–

–

–

2,663
887
3,550

8,875
–
8,875

9,763
–
9,763

$

$

ICOM INCORPORATED ANNUAL REPORT 2016

17

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
5. Marketable Securities and Investments in Securities
Marketable securities classified as other securities at March 31, 2016 and 2015 are summarized as follows:
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
¥

37
2,824
2,861

257
109
366
3,227

2016
Acquisition
cost

Unrealized
gain (loss)

¥

¥

¥

11
2,755
2,766

319
111
430
3,196

¥

Carrying
value

26
69
95

¥

(62)
(2)
(64)
31

¥

230
1,720
1,950

108
101
209
2,159

2015
Acquisition
cost

Unrealized
gain (loss)

¥

¥

¥

193
1,700
1,893

136
102
238
2,131

¥

37
20
57

(28)
(1)
(29)
28

Thousands of U.S. dollars

Carrying
value
Securities whose carrying value
exceeds their acquisition cost:
Equity securities$
328
25,065
Corporate bonds
Subtotal
25,393
Securities whose carrying value
does not exceed their acquisition cost:
Equity securities
2,281
Corporate bonds
967
Subtotal
3,248
Total
$ 28,641

2016
Acquisition
cost

Unrealized
gain (loss)

$

$

98
24,452
24,550

2,831
985
3,816
$ 28,366

$

230
613
843

(550)
(18)
(568)
275

Since there is no market price for unlisted equity securities and it is difficult to determine the fair value, unlisted equity securities of¥248 million ($2,201 thousand) and ¥204 million at March 31, 2016 and 2015, respectively, are not included in the above table.
Sales of other securities for the years ended March 31, 2016 and 2015 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Sales
Aggregate gain

¥

2016
19
9

¥

2015
218
9

$

2016
169
80

ICOM INCORPORATED ANNUAL REPORT 2016

18

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
6. Inventories
Inventories at March 31, 2016 and 2015 consisted of the following:Thousands of
U.S. dollars

Millions of yen

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

¥

¥

2016
3,366
213
2,800
6,379

¥

¥

2015
3,567
69
2,909
6,545

$

$

2016
29,875
1,890
24,852
56,617

Cost of sales included loss on devaluation of inventories of ¥106 million ($941 thousand) and ¥48 million for the years ended
March 31, 2016 and 2015, respectively.

7. Retirement Benefits Plans(1) Outline of retirement benefits for employees
The Company and its domestic subsidiaries have employees’ defined benefit pension plans, i.e., corporate pension plans andlump-sum payment plans.
The Company and its domestic subsidiaries pay additional retirement benefits to employees under certain circumstances.
Certain consolidated subsidiaries calculate the liability for retirement benefits based on the simplified method. Under thesimplified method retirement benefit obligation has been calculated based on the amount which would be payable at the year end
if all eligible employees terminated their services voluntarily.

(2) Liability for retirement benefits for the years ended March 31, 2016 and 2015i) The changes in retirement benefit obligation are outlined as follows (except for retirement benefit obligation
calculated by simplified method):Thousands of
U.S. dollars

Millions of yen

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

¥

¥

2016
4,045
166
81
1,088
(53)
5,327

¥

¥

2015
3,830
167
77
27
(56)
4,045

$

$

2016
35,901
1,473
719
9,657
(470)
47,280ii) The changes in plan assets at fair value are outlined as follows (except for retirement benefit obligation calculated bysimplified method):Thousands of
U.S. dollars

Millions of yen

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

¥

¥

2016
4,156
83
(280)
302
(53)
4,208

¥

¥

2015
3,433
69
419
291
(56)
4,156

$

$

2016
36,886737(2,485)2,680(470)
37,348ICOM INCORPORATED ANNUAL REPORT 2016

19

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
7. Retirement Benefits Plans (continued)(2) Liability for retirement benefits for the years ended March 31, 2016 and 2015 (continued)iii) The changes in retirement benefits obligation calculated by simplified method are outlined as follows:
Thousands of
U.S. dollars

Millions of yen

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

¥

¥

2016
291
46
(5)
332

¥

¥

2015
253
44
(6)
291

$

$

2016
2,583
408
(45)
2,946

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

Millions of yen

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 sheets

¥

2016
5,327
(4,208)
1,119
332

¥

2015
4,045
(4,156)
(111)
291

1,451
1,451
¥

1,451

$

180
180
¥

180

2016
47,280(37,348)
9,932
2,946
12,87812,878$12,878v) The components of retirement benefit expenses for the years ended March 31, 2016 and 2015 are outlined as follows:
Thousands of
U.S. dollars

Millions of yen

Service cost
Interest cost
Expected return on plan assets
Amortization:
Actuarial (gain) loss
Past service cost
Net retirement benefit obligation at transition
Retirement benefit expenses

¥

¥

2016
212
81
(83)
(6)
–
–
204

¥

¥

2015
211
77
(69)
38
(2)
20
275

$

$

2016
1,881
719
(737)
(53)
–
–
1,810

ICOM INCORPORATED ANNUAL REPORT 2016

20

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
7. Retirement Benefits Plans (continued)(2) Liability for retirement benefits for the years ended March 31, 2016 and 2015 (continued)vi) The components of retirement benefit liability adjustments included in other comprehensive (loss) income before tax
effects are outlined as follows:

Thousands of
U.S. dollars

Millions of yen

Actuarial (loss) gain
Past service cost
Net retirement benefit obligation at transition

¥

¥

2016
(1,374)––(1,374)

¥

¥

2015
430
(2)
20
448

$

$

2016
(12,195)––(12,195)vii) The balance of retirement benefit liability adjustments recognized in accumulated other comprehensive (loss) income
before tax effects is outlined as follows:

Thousands of
U.S. dollars

Millions of yen

Unrecognized actuarial (loss) gain
Total
viii)

¥
¥

2016
(609)
(609)

¥
¥

2015
765
765

$
$

2016
(5,405)(5,405)The plan assets by major category consist of the following:

Bonds
Equities
Cash and deposits
Total

2016
52.0%
46.0%
2.0%
100.0%

2015
45.0%
53.0%
2.0%
100.0%The expected long-term rate of return on plan assets is has been estimated based on the consideration of both the portfolio
allocation to each class at present and in the future and long-term expected rate of return from plan assets held in each category
at present and in the future.
ix) The assumptions used in accounting for the defined benefit pension plans for the years ended March 31, 2016 and2015 are as follows:

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

2016
0.8%
2.0%
1.6%

2015
2.0%
2.0%
1.7%

ICOM INCORPORATED ANNUAL REPORT 2016

21

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
8. 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 rates of approximately 33.0% and 35.6% for the years ended March 31, 2016 and 2015,
respectively. The overseas subsidiaries are subject to income taxes of the respective countries in which they operate.
Reconciliations of the statutory tax rates and effective tax rate for the years ended March 31, 2016 and 2015 as a percentage of
profit before income taxes are as follows:
2016
33.0%
0.6
0.9
(7.0)
(0.4)
1.5
–
0.7
29.3%

Statutory tax rates
Permanently non-deductible expense such as entertainment expense
Per capita portion of inhabitants’ taxes
Tax credit for research and development costs
Differences in tax rates applicable to overseas subsidiaries
Effect of changes in corporate tax rates
Tax valuation allowance
Other
Effective tax rate

2015
35.6%
0.5
0.7
(9.0)
(0.4)
2.3
(0.4)
(0)
29.3%

The significant components of deferred tax assets and liabilities at March 31, 2016 and 2015 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

2016
Deferred tax assets:
Unrealized gain on inventories
Long-term accounts payable - otherAccrued bonuses
Deferred revenue
Liability for retirement benefits
Accrued enterprise tax
Allowance for doubtful accounts
Write down of investments in securities
Accrued legal welfare expense on bonuses
Net operating loss carryforward
Other
Gross deferred tax assets
Valuation allowance
Total deferred tax assets
Deferred tax liabilities:
Gain on sales of property, plant and equipment
Depreciation
Accrued interest
Reserve for special depreciation
Other
Total deferred tax liabilities
Net deferred tax assets

¥

¥

270
155
140
37
441
25
25
23
21
85
98
1,320
(41)
1,279

(236)
(30)
(1)
(1)
(11)
(279)
1,000

2015
¥

¥

354
163
146
59
56
53
30
25
22
–
113
1,021
(44)
977

(252)
(43)
(10)
(3)
(11)
(319)
658

2016
$

$

2,396
1,376
1,243
328
3,914
222
222
204
186
754
871
11,716(365)
11,351(2,095)
(266)
(9)
(9)
(97)
(2,476)
8,875

ICOM INCORPORATED ANNUAL REPORT 2016

22

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
8. Income Taxes (continued)
The “Act for Partial Amendment of the Income Tax Act, etc.” (Act No.15, 2016) and the “Act for Partial Amendment of the Local
Tax Act, etc.” (Act No.13, 2016) were enacted on March 29, 2016. As a result, the effective statutory tax rates used to measure theCompany’s deferred tax assets and liabilities were changed from 33.0% used in the previous fiscal year to 30.8% for the temporary
differences expected to be realized or settled in the years beginning April 1, 2016 and 2017 and to 30.6% for the temporary
differences expected to be realized or settled in the years beginning April 1, 2018.
The effects of the announced reduction of the effective statutory tax rate were to decrease deferred tax assets, after offsetting
deferred tax liabilities, by ¥45 million ($399 thousand), and increase deferred income taxes by ¥36 million ($320 thousand), net
unrealized holding gain on securities by ¥0 million ($0 thousand), and retirement benefit liability adjustments by ¥10 million ($89
thousand) as of and for the year ended March 31, 2016.

9. 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, 2016 and 2015 amounted to ¥293 million ($2,601
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, 2016 and 2015 are summarized as follows:

April 1, 2015
Shares issued:
Common stock
Treasury stock:
Common stock

March 31, 2016

14,850,000––

14,850,000

31,783300–

32,083

April 1, 2014
Shares issued:
Common stock
Treasury stock:
Common stock

Number of shares
2016
Increase
Decrease

Number of shares
2015
Increase
Decrease

March 31, 2015

14,850,000––

14,850,000

31,607

176–

31,783The increases in treasury stock were due to purchases of shares of less than one voting unit.

10. Research and Development Costs
Research and development costs included in selling, general and administrative expenses for the years ended March 31, 2016 and2015 are as follows:

Research and development costs¥

Millions of yen
2016
2015
3,144
¥
3,095

Thousands of
U.S. dollars
2016$ 27,904

ICOM INCORPORATED ANNUAL REPORT 2016

23

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
11. Other Comprehensive (Loss) Income
Reclassification adjustments and tax effects of other comprehensive (loss) income for the years ended March 31, 2016 and 2015 are
as follows:
Thousands of
U.S. dollars

Millions of yen

2016
Net unrealized holding gain on securities:
Amount arising during the year
Reclassification adjustments
Before tax effects
Tax effects
Net unrealized holding gain on securities

¥

3
–
3
(0)
3

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

2015

¥

¥

2016

87
(9)
78
(27)
51

$

27
–
27
(0)
27

(507)

470

(4,500)(1,368)(6)(1,374)433(941)(1,445)

392
56
448
(134)
314
835

(12,142)(53)(12,195)
3,843(8,352)(12,825)¥$

12. Amounts Per Share
Amounts per share at March 31, 2016 and 2015 and for the years then ended are as follows:Yen

Net assets
Profit attributable to owners of parent:
BasicCash dividends¥

2016
3,613.66
112.03
36.00¥

U.S. dollars

2015
3,637.17
142.72
35.00

$

2016
32.07
0.99
0.32

Net assets per share is computed based on net assets and the number of shares of common stock outstanding at the 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 2016

24

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
13. Segment Informationi) Outline of segment information
The Company’s reporting segments are divisions of the Company for which separate financial information is available, andwhose operating results are reviewed regularly by the board of directors meeting of the Company (the highest management
decision making body) in order to allocate management resources and assess performance of operations.
The Company and its subsidiaries 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 businessgeographically.
Therefore, the group consists of four segments based on sales by region. The four segments are “Japan,” “North America,”
which primarily includes the United States and Canada; “Europe,” which primarily includes Germany and Spain; and “Asia& Oceania,” which primarily includes Australia, Taiwan and China.
ii) Calculation methods used for sales, income or loss, assets and other items on each reporting segment
The accounting policies of the segments are substantially the same as those described in the significant accounting policies
in Note 2. Segment performance is evaluated based on operating income or loss. Intersegment sales are recorded at thesame 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, 2016 and 2015 are as follows:
Millions of yen

Japan
I. Net sales and operating income(loss)
Sales to third parties
Intersegment sales
Net sales
Operating expenses
Operating income (loss)
II. Total assets
III. Other items
Depreciation and amortization
Investments in affiliatedcompanies
Increase in property, plant andequipment / intangible fixed
assetsNorth
America¥ 16,006
7,123
23,12920,920¥ 2,209¥

Europe

¥

¥

8,876
3
8,879
8,869
10

¥ 52,476

¥

¥

¥

778

2016
Asia &
Oceania

¥

¥

1,091
0
1,091
1,096
(5)

¥

902
408
1,310
1,343
(33)

6,184

¥

767

¥

1,825

98

¥

6

¥

10

Subtotal

Eliminations

Consolidated¥ 26,875
7,534
34,40932,228¥ 2,181¥¥¥–(7,534)(7,534)(7,721)
187¥

26,875–26,87524,5072,368¥ 61,252¥(2,051)¥

59,201

¥

¥

–

¥

892

892

85

–

–

–

85

–

85

731

38

5

5

779

–

779

ICOM INCORPORATED ANNUAL REPORT 2016

25

ICOM INCORPORATED AND SUBSIDIARIES

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

North
AmericaJapan
I. Net sales and operating income(loss)
Sales to third parties
Intersegment sales
Net sales
Operating expenses
Operating income (loss)
II. Total assets
III. Other Items
Depreciation and amortization
Investments in affiliatedcompanies
Increase in property, plant andequipment / intangible fixed
assets¥¥¥15,377
7,684
23,061
20,434
2,627¥

50,127¥

2015
Asia &
Oceania

Europe

¥

¥

8,854
3
8,857
8,735
122

¥

Subtotal

¥

¥

1,115
430
1,545
1,519
26

¥

26,3998,117
34,516
31,774
2,742

768

¥

3,203

¥

7

¥

11

¥

Eliminations¥

Consolidated

¥

¥

1,053
0
1,053
1,086
(33)

¥

¥

–
(8,117)(8,117)(7,876)(241)¥

26,399–26,39923,898
2,501

7,324

¥

61,422¥(2,762)¥58,660

760 ¥

88

¥

866

¥

–

¥

866

93

–

–

–

93

–

93

769

53

6

8

836

–

836

Eliminations

Consolidated

Thousands of U.S. dollars

North
AmericaJapan
I. Net sales and operating income(loss)
Sales to third parties
Intersegment sales
Net sales
Operating expenses
Operating income (loss)
II. Total assets
III. Other items
Depreciation and amortization
Investments in affiliatedcompanies
Increase in property, plant andequipment / intangible fixed
assets$ 142,061
63,220205,281
185,675$ 19,606$$ 465,750
$

6,905

2016
Asia &
Oceania

Europe$$78,77927
78,80678,71789$

54,886$870

Subtotal

238,529
66,868305,397
286,040
19,357$$

9,683 $ 8,006 $
0
3,621
9,683
11,627
9,728
11,920(45) $(293) $$–
(66,868)(66,868)(68,528)
1,660

$

6,807

$

53

$

238,529–
238,529
217,51221,017$ 16,198$

543,641$(18,204)$

525,437

$

$

7,917

$

–

$

7,917

89

$

754

–

–

–

754

–

754

6,489

337

44

44

6,914

–

6,914

ICOM INCORPORATED ANNUAL REPORT 2016

26

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
13. 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,
2016 and 2015 were summarized as follows:
Millions of yen

Japan
USA
North America (except for USA)
EuropeAsia & Oceania
Other
Total

¥

¥

2016
8,840
6,864
1,266
3,790
5,266
849
26,875¥¥

Thousands of U.S. dollars

2015
8,353
6,364
1,636
3,748
5,316
982
26,3992016
78,46060,921
11,23633,63846,738
7,535
238,528$$(b) Property, plant and equipment
Property, plant and equipment categorized by country and region at March 31, 2016 and 2015 were summarized asfollows:
Millions of yen

Japan
USA
North America (except for USA)
EuropeAsia & Oceania
Total

¥

¥

2016
6,381
1,283
13
13
178
7,868

¥

¥

Thousands of U.S. dollars

2015
6,441
1,423
18
16
196
8,094

$

$

2016
56,635
11,387
115
115
1,580
69,832Disclosure of the information by product and service for the years ended March 31, 2015 and 2016 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.
Disclosure of the information by major customers for years ended March 31, 2016 and 2015 has been omitted as sales
to each customer were less than 10% of consolidated net sales.

ICOM INCORPORATED ANNUAL REPORT 2016

27

ICOM INCORPORATED AND SUBSIDIARIES

Notes to Consolidated Financial Statements
14. Significant Subsidiaries and Affiliates
The Company’s subsidiaries and significant affiliates at March 31, 2016 are presented as follows:
Ownership
Interest
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%
100.0%

United States of America
Germany
Australia
Spain
Taiwan
China
Japan
Japan
United States of America
CanadaConsolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Consolidated subsidiary
Consolidated sub-subsidiary
Consolidated sub-subsidiary

100.0%

BrazilConsolidated sub-subsidiary

Comforce Inc.

49.0%

Japan

Position Co., Ltd.

33.3%

Japan

Name
Icom America, Inc.
Icom (Europe) GmbH
Icom (Australia) Pty., Ltd.
Icom Spain, S.L.
Asia Icom Inc.
PURECOM CO., LTD.
Wakayama Icom Inc.
Icom Information Products Inc.
Icom America License Holding LLC
ICOM CANADA HOLDINGS INC.
ICOM DO BRASIL
RADIOCOMUNICACAO LTDA.

Country of Incorporation

Subsidiaries/Affiliate

Affiliate accounted for by theequity method
Affiliate accounted for by theequity method

15. 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, 2016, was approved at the Company’s general shareholders’ meeting held on June24, 2016:
Thousands of
U.S. dollars

Millions of yen

Cash dividends (¥18 = U.S.$0.16 per share)

¥

2016
267

¥

2015
296

$

2016
2,370

ICOM INCORPORATED ANNUAL REPORT 201628

BOARD OF DIRECTORSAND AUDITORSTokuzo Inoue
Chairman and Representative Director

Tsutomu Fukui
President and Representative Director

Nobuo Ogawa
Executive Managing Director

Hiroshi Shimizu
Director

Kenichi Kojiyama
Director

Haruyuki Yoshizawa
Outside Director

Kenji Oono
AuditorHiroshi Umemoto
Outside Auditor

Katsunori Sugimoto
Outside Auditor

EXECUTIVE OFFICERS
Masataka Harima
Hiroshi Nakaoka
Takashi Tsujiuchi
Shinichi Matsuo
Shigeyoshi Tanabe
Yoshiteru Yano
Yoshiki Enomoto
Shu Kitaguchi

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.
12421 Willows Road NE, Kirkland,
WA 98034, 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.
Ctra. Rubi, No. 88 “Edificio Can
Castanyer” 08190, Sant Cugat delValles, 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
PURECOM CO.,LTD
Room 1110H, Block A, Tiley Central
Plaza, Haide 3rd road, Nanshan
District, Shenzhen, 518054, China.
Phone: 86-755-8633-2141
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
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
12421 Willows Road NE, Kirkland,
WA 98034, U.S.A
Phone: 1-425-454-8155
Fax: 1-425-454-1509
Icom Canada, Inc.
#150-6165 Highway 17A,
Delta, BC V4K 5B8, Canada
Phone: 1-604-952-4266
Fax: 1-604-952-0090
URL http://www.icomcanada.com/

Icom Do Brasil Radiocomunicacao
LTDA.
Rua Itororó, 444 Padre Eustáquio Belo
Horizonte MG, CEP: 30130-150 Brazil
Phone: 55-31-3582-8847

Affiliates:
Comforce Inc.
Sumitomofudousanhamatyou Bld.8F,
3-42-3, Nihombashihamacho, Chuo-ku,
Tokyo, 103-0007, JAPAN
Phone: 81-3-3662-1167
Fax: 81-3-3662-1168
URL http://www.comforce.co.jp/
Position Co., Ltd.
3-1-7 Mitatouhou Bld.5F, Mita,
Minato-ku, Tokyo, 108-0073, JAPAN
Phone: 81-3-5439-6011
Fax: 81-3-5439-6012
URL http://www.posit.co.jp/index.html

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
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(As of March 31, 2016)
Established: July 1964
Employees: 637
Paid-in capital: ¥7,081 million
Authorized shares: 34,000,000
Issued and outstanding shares:
14,850,000
Shareholders: 7,766
Stock listing: Tokyo Stock Exchange(As of March 31, 2016)
Major shareholders
State Street Bank and Trust Company
Tokuzo Inoue
Gigapalace Inc.
The Icom Foundation
JVC KENWOOD Corporation
The Master Trust Bank of Japan, Ltd.
Meiji Yasuda Life Insurance Company
Japan Trustee Service Bank, Ltd.
JPMorgan Chase & Co.
UBS AG LONDON A/C IPB SEGREGATED CLIENT ACCOUNT

Thousands of shares
1,885
1,847
1,472
1,000
445
363
326
314
304
256