ANNUAL REPORT YEAR ENDED MARCH 31. ICOM INCORPORATED
Years ended March 31, 2010, 2009 and 2008
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.

BUSINESS SEGMENT INFORMATION

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.

GEOGRAPHICAL SEGMENT INFORMATION

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)

OVERSEAS SALES

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.
Years ended March 31, 2010 and 2009
See accompanying 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 are prepared on the basis of accounting principles generally accepted in Japan, which are different in certain respects as to the application and disclosure requirements of International Financial Reporting Standards, 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 a matter 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 unrealized intercompany 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 the balance sheet date, except that receivables and payables hedged by qualified forward foreign exchange contracts are translated at the corresponding 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 and unrealized, are credited or charged to income.  Held-to-maturity debt securities are stated at their amortized cost.  Marketable securities classified as other securities are carried at fair value with any changes in unrealized holding gain or loss, net of the applicable income taxes, reported as a separate component of net assets.    Non-marketable securities classified as other securities are carried at cost determined by the moving average method. Securities held by the Company and its subsidiaries including 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.

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 and less 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 are capitalized 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 the accounting 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 of ownership that were contracted prior to April 1, 2008 in a manner similar to the accounting treatment for ordinary operating lease transactions.
(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 obligation and 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 of service 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 in which the gain or loss is recognized by the straight-line method.  The amortization period is shorter than the average estimated remaining 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 the time of occurrence. Actuarial gain or loss is being amortized on a straight-line basis over ten years, which is within the average remaining years of service 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 to approval 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 the applicable 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" in the consolidated balance sheet as of March 31, 2009.

Summary of Significant Accounting Policies (continued)
2.
(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 this standard 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 a method 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 with respect to a given fiscal year end is made by resolution of the shareholders at a general meeting held subsequent to the close of the financial period. The distribution of retained 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 as follows:

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 information
i) 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 through financial assets that have high levels of liquidity. The Group uses derivatives for the purpose of reducing risk and does not enter into derivatives for speculative 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 values of 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 can be 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 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 derivative transactions only with financial institutions with high credit ratings. (b) Monitoring of market risks (the risks arising from fluctuations in foreign exchange rates, interest rates and others) For cash and deposits denominated in foreign currencies arising from trade receivables denominated in foreign 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. 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 a timely basis to manage liquidity risk. Subsidiaries monitor liquidity risk in a same manner.

Financial Instruments (continued)
5.
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 fair value, different assumptions and factors could result in different fair values. In addition, the notional amounts of derivatives in Note 11 are not necessarily 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 of March 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).
(*) The value of assets and liabilities arising from derivatives is shown at net value.

Financial Instruments (continued)
5.
(2) Estimated fair value of financial instruments (continued) Notes: i) Methods to determine the market value of financial instruments and other matters related to marketable securities 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
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:

Financial Instruments (continued)
5.

iii) The redemption schedule for other securities with maturity dates (continued) (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:
6. Marketable Securities and Investments in Securities (continued)
The Company recorded an impairment loss of ¥893 million on marketable equity securities and ¥68 million on other securities for the year ended March 31, 2009. Sales of other securities for the years ended March 31, 2010 and 2009 are summarized as follows:
The carrying value of investments in non-marketable securities at March 31, 2010 and 2009 is summarized as follows:

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

Accrued Retirement Benefits for Employees
8.
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 and the amounts recognized in the accompanying consolidated balance sheets at March 31, 2010 and 2009 are summarized as follows:
Certain domestic subsidiaries have applied simplified methods for calculating their retirement benefit obligation, which are permitted 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:
Retirement benefit expenses of certain domestic subsidiaries, which have been calculated by simplified methods, are included in service 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 assets of 2.0% for the years ended March 31, 2010 and 2009.

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 of income before income taxes are as follows:
The significant components of deferred tax assets and liabilities at March 31, 2010 and 2009 are summarized as follows:

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 of capital surplus (other than the capital reserve) and retained earnings (other than the legal reserve) be transferred to the capital reserve and the legal reserve, respectively, until the sum of the 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, 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-half of the proceeds of the sale of new shares as additional paid-in capital included in capital surplus. Movements in treasury stock for the years ended March 31, 2010 and 2009 are summarized as follows:

11.  Derivatives and Hedging Activities
The estimated fair value of the derivatives positions outstanding which qualify for deferral hedge accounting at March 31, 2010 is summarized as follows: Currency-related transactions
11. Derivatives and Hedging Activities (continued)
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 is omitted.
12. Research and Development Costs
Research and development costs included in selling, general and administrative expenses for the years ended March 31, 2010 and 2009 were as follows:

13. Related Party Transactions
Principal transactions between the Company and a related party for the years ended March 31, 2010 and 2009 were summarized as follows:
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:
(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:
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 stock acquisition 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 no outstanding dilutive securities at March 31, 2010 and 2009.

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 the Company 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 is summarized as follows:

15. Segment Information (continued)
(1)  Business Segments (continued)

(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. Accounting Standard for Measurement of Inventories 2. 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 decreased by 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 to operating leases. 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 adoption of this standard had no effect on the consolidated operating results for the year ended March 31, 2009. Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements 4. 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.

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 is summarized as follows:

15. Segment Information (continued)
2)    Geographical Segments (continued)

(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 to operating leases. 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 adoption of this standard had no effect on the consolidated operating results for the year ended March 31, 2009. Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements 4. 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.

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:

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

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 June 25, 2010:
The Board of Directors ICOM INCORPORATED We have audited the accompanying consolidated balance sheets of ICOM INCORPORATED 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 then ended, all expressed in yen.  These financial statements are the responsibility of the Company'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 the financial statements.   An audit also includes assessing the accounting principles used and significant 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 accepted in Japan. The U.S. dollar amounts in the accompanying consolidated financial statements with respect 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.
BOARD OF DIRECTORS
AND AUDITORS
Tokuzo 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 Auditor
EXECUTIVE 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) GmbH Auf 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 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, JAPAN
INVESTOR 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
The Board of Directors ICOM INCORPORATED audited the accompanying consolidated balance sheets of   ICOM We have INCORPORATED and consolidated subsidiaries as of March 31, 2010 and 2009, and the related consolidated statements of operations, changes in net assets, and cash flows for the years then ended, all expressed in yen.    These financial statements are the responsibility of the Company'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 the financial statements.    An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial We believe that our audits provide a reasonable basis for our statement  presentation. opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of ICOM INCORPORATED and consolidated 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 accepted in Japan. The U.S. dollar amounts in the accompanying consolidated financial statements with respect 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. Vihon  LLC June 25, 2010