Torishima Pump Mfg.co., Ltd. TSE:6363

Torishima Pump Mfg : Financial Statements (1 April 2024 – 31 March 2025)

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Source: MarketScreener

Torishima Pump Mfg. Co., Ltd. and Consolidated Subsidiaries

Consolidated Financial Statements for the Year Ended March 31, 2025, and Independent Auditor's Report

Deloitte.

INDEPENDENT AUDITOR'S REPORT

To the Board of Directors of Torishima Pump Mfg. Co., Ltd.:

Consolidated Financial Statements>Opinion

Deloitte Touche Tohmatsu LLC Yodoyabashi Mitsui Building

4-1-1 Imabashi, Chuo-ku Osaka SAP-00d2

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Tel: +81 (6) 4560 6000

Fax: +81 (6) 4560 6001

www.de!oitte com/ p/en

We have audited the consolidated financial statements of Torishima Pump Mfg. Co., Ltd. and its consolidated subsidiaries (the "Group"), which comprise the consolidated balance sheet as of March 31, 2025, and the consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies, all expressed in Japanese yen.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of March 31, 2025, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with accounting principles generally accepted in Japan.

Convenience Translation

Our audit also comprehended the translation of Japanese yen amounts into U.S. dollar amounts and, in our opinion, such translation has been made in accordance with the basis stated in Note 1 to the consolidated financial statements. Such U.S. dollar amounts are presented solely for the convenience of readers outside Japan.

Basis for Opinion

We conducted our audit in accordance with auditing standards generally accepted in Japan. Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the provisions of the Code of Professional Ethics in Japan, and we have fulfilled our other ethical responsibilities as auditors. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matter

A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the consolidated financial statements of the current period. The matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on the matter.

Member of

Deloitte Touche Tohmatsu Limited

Revenue recognized over a certain period time of construction contracts in the Middle East region whose performance obligation is satisfied over the period

Key Audit Matter Description

How the Key Audit Matter Was Addressed in the Audit

As stated in Note 3 (Significant Accounting Estimates), the Group recognizes revenue from construction contracts over time based on the estimated progress toward complete satisfaction of its performance obligations.

Sales of ¥23,494 million ($156,626 thousand) in the consolidated statement of income for the year ended March 31, 2025, were recognized over time based on the progress toward completion of the construction, of which Y916 million

($6,106 thousand) was related to sales to the Middle East region.

The Group operates the business in manufacturing, sales and installation of pumps and other products as well as maintenance services. Construction projects may not proceed as planned based on the volatility of political and economic circumstances and different business practices in the Middle East region.

The progress toward complete satisfaction of performance obligations in the construction contracts in the Middle East region are estimated using an input method, which measures a ratio of the costs incurred to date against the total expected costs in order to satisfy the performance obligations.

The estimated total costs for large construction projects involve management's estimates and may increase uncertainties especially when such projects do not progress as planned.

As the estimated total contract costs in relation to the construction contracts in the Middle East region involve uncertainties and require significant management judgment, we determined it to be a key audit matter.

Our audit procedures related to the estimated total contract costs related to sales from construction contracts in the Middle East region included the following, among others:

  • We tested the design and operating effectiveness of controls over management's estimate of the total contract costs and revisions to such estimate.

  • We inspected contracts and related memorandums with customers and evaluated whether the scope and period of the projects are consistent with such contractual documentations.

  • We evaluated the reasonableness of the estimated total contract costs by reconciling them to the contracts with vendors and internal supporting documentations of the cost estimates.

  • We evaluated the accuracy of estimation of total contract costs by comparing the original estimates of contract costs to the latest estimates and investigating any differences.

  • We evaluated management's decision on whether it is necessary to revise the estimates of total contract costs by inquiring of the management, inspecting relevant supporting documents, such as working budgets and progress and monthly reports, and analyzing the trends in the actual costs incurred.

  • We evaluated the reasonableness of the estimated total contract costs by comparing them to the actual costs incurred by cost component and inspecting supporting documents, such as invoices and inspection acceptances.

  • We compared the final total construction cost of completed projects with the estimated total contract costs as of the end of the previous fiscal year to identify the factors behind any discrepancies and verify whether the cost estimates were appropriate.

Other Information

Other information comprises the information included in the Group's disclosure documents accompanying the audited consolidated financial statements, but does not include the consolidated financial statements and our auditor's report thereon.

We determined that no such information existed and therefore, we did not perform any work thereon

Responsibilities of Management and the Audit and Supervisory Committee for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with accounting principles generally accepted in Japan, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern in accordance with accounting principles generally accepted in Japan and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

The Audit and Supervisory Committee is responsible for overseeing the Directors' execution of duties relating to the design and operating effectiveness of the controls over the Group's financial reporting process.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in Japan will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in Japan, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  • Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks. The procedures selected depend on the auditor's judgment. In addition, we obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

  • Obtain, when performing risk assessment procedures, an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

  • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  • Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Group to cease to continue as a going concern.

  • Evaluate whether the overall presentation and disclosures of the consolidated financial statements are in accordance with accounting principles generally accepted in Japan, as well as the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  • Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial information of the entities or business units within the Group as a basis for forming an opinion on the group financial statements. We are responsible for the direction, supervision and review of the audit work performed for purposes of the group audit. We remain solely responsible for our audit opinion.

We communicate with the Audit and Supervisory Committee regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the Audit and Supervisory Committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with it all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated with the Audit and Supervisory Committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Information>

Fees for audit and other services for the year ended March 31, 2025, which were charged by us and our network firms to Torishima Pump Mfg. Co., Ltd. and its subsidiaries were ¥49 million and ¥2 million, respectively.

Interest Required to Be Disclosed by the Certified Public Accountants Act of Japan

Our firm and its designated engagement partners do not have any interest in the Group which is required to be disclosed pursuant to the provisions of the Certified Public Accountants Act of Japan.

August 7, 2025