Torishima Report 2017

Torishima Report 2017
Fiscal 2016 (For the year ended March 31, 2017)

TORISHIMA PUMP MFG.CO.,LTD.

Head office: 1-1-8 Miyata-cho, Takatsuki City, Osaka 569-8660, Japan
Tel: +81-72-690-2308 Fax: +81-72-690-2329
http://www.torishima.co.jp/enMeet Torishima

CSV

Creating Shared Value

Torishima conducts CSV (creating shared value)
management in which we help solve society’s challenges
while making a profit for the company.
By providing energy-efficient solutions andproducts that can address society’s challenges,
Torishima is enhancing profitability andproviding a competitive edge while
creating value both for society and for itself.

Torishima’s Role

Energy-Efficient Solutions
We contribute to greater efficiency in plants andother infrastructure by supplying high-efficiency
pumps and other energy-efficient products, andby providing energy-efficient solutions forpumping equipment and pumping stations.

Contents
Directors

P. 21

P. 1

Executive Officers

P. 22

4 Business Domains

P. 3

Financial Section

P. 23

Financial and Non-Financial Highlights

P. 4

Financial Data from the Past 11 YearsP. 23

Business Model

P. 5

Fiscal 2016 Financial Review

P. 25

Management Strategy and Message from the President

P. 7

Consolidated Financial Statements

P. 27

Research and Development

P. 13

ESG
Environment

P. 14

SocietyP. 16

Governance

P. 19

Corporate Data

P. 32

In order to communicate to the public Torishima’s corporate
value—including the company’s financial and non-financial
elements—we have consolidated and improved the contents of
the CSR Report (in Japanese) and the Annual Report (inEnglish) to create the Torishima Report (Japanese and English
editions). Please refer to our website for further information of
the company.
■ Financial Data Reference Source
In preparing the Japanese and English editions of the Torishima
Report, we strove to avoid any major discrepancies between thetwo in terms of content. Please note, however, that the financial
results (including consolidated financial statements) in theJapanese edition were excerpted from the securities report for
the year ending March 31, 2017. The English edition,
meanwhile, contains excerpts from financial statements thatwere audited by an audit company. Please visit the IR sectionof our website for further information, including financial
statements.

torishima pumpsearchhttp://www.torishima.co.jp/en1

Torishima Report 2017

Our state-of-the-art technology
ensures safety under all conditions.

Editorial Policy

Meet Torishima
CSV — Creating Shared Value

Providing Safety andReliability■ Organizations Covered
This report covers the activities of Torishima Pump Mfg. Co., Ltd. and its consolidated
subsidiaries. Some of the information is on Torishima Pump Mfg. Co., Ltd. only.
■ Period Covered
The report basically covers the financial reporting period from April 1, 2016 to March 31,
2017.
For information on items occurring after April 1, 2017, the date is included on therelevant page.
■ Referenced Guidelines
Torishima has endeavored to make a report that will generate unique value for thecompany.
We referred to the International Integrated Reporting Framework published by theInternational Integrated Reporting Council (IIRC) and the Environmental Reporting
Guidelines (2012 version) published by the Ministry of the Environment, Japan.
■ Cautionary Statement with Regard to Forward-Looking Statements
The data and forward-looking statements disclosed in the Torishima Report are based on
decisions made and on information obtained up until the day this report was published. The
forward-looking statements are subject to change due to various factors, and they do notguarantee the attainment of objectives, forecasts, or future business performance. The
information in the report is subject to change without prior notice. Therefore, readers are
cautioned to use the information in the report at their discretion while referring to—orcomparing the report with—other sources of information. Torishima bears no obligation
whatsoever to compensate for any damages that may occur as a result of using this report.

Torishima Pump Mfg. Co., Ltd.

2

Torishima’s 4 Business Domains
Torishima is an expert in pumps.

Financial Highlights■ Orders Received (millions of yen)

and construction of pumping stations to their operation and maintenance.

■ Operating Income or Loss(millions of yen)

We develop and supply pumps for various industry and infrastructure applications.
We also provide comprehensive pump solutions ranging from the engineering, procurement,■ Net Sales (millions of yen)

52,84751,30440,47943,48342,87840,97545,974 45,985 46,501

44,414
1,462
517

400

373

FY
2014

FY
2015

(945)

Providing high-efficiency and reliable
engineered pumps that respond to customers’
increasingly advanced and diversified needs

Offering well-proven expertise and experience as
an EPC (engineering, procurement, construction)
contractor

Torishima supplies highly engineered pumps for a wide
range of applications such as power plants, seawater
desalination plants, petrochemical plants, and othergeneral industrial plants. We continually revise andimprove our technology to meet our customers’ needs.

Not just a pump supplier, Torishima has a long history of
supplying pumping stations. We have been providing aturnkey service to our customers whereby we candesign, engineer, procure, construct, and commission all
the equipment within a pumping station.

FY
2012

FY
2013

FY
2014

FY
2015

FY
2016

FY
2012

FY
2013

FY
2014

FY
2015

FY
2016

FY
2012

FY
2013

FY
2016

FY2016: A long-term drop in crude oil prices
led to worsening finances in
oil-producing countries. The result
was a sluggish desalination market
and stagnant orders received fromoverseas, mainly Middle East
countries. However, profitability was
secured through a strategy offocusing on quality rather thanquantity.

FY2016: Due to a large backlog of orders
and other factors, targets were
mostly reached as planned.

FY2013: Income fell due to several factors:
sales were affected by yen
appreciation, and productstandardization and system
reforms disrupted engineering andmanufacturing.
FY2014–2015: Profit was back on track
thanks to a thorough revamping of
profitability.
FY2016: Substantial increase in profit due to
steady recovery of profit margin.

■ Net Income or Loss Attributable to
Owners of the Parent (millions of yen)

■ Net Assets per Share (yen)■ Equity Ratio

1,532

1,172.56 1,209.10

1,308.22

1,179.57 1,221.94

943
442

48.2%

405

49.9% 50.0%

48.7% 48.9%(2,422)

Projects
FY
2012

High-Tech
Pumps

FY
2014

FY
2015

FY
2016

FY
2012

FY
2013

FY
2014

FY
2015

FY
2016

FY
2012

FY2015: Income fell due mainly to transient
factors including exchange-rate
losses and investment losses.
FY2016: No major problems arose, so targets
were met.

4 Businesses
Centeredon Pumps

FY
2013

FY
2013

FY
2014

FY
2015

FY
2016

Note: Fiscal years ended March 31.

Non-Financial Highlights
Service
Solutions■ Manufactured Capital (millions of yen)
Capital investment■ Intellectual Capital (millions of yen)

Depreciation and amortization

R&D expenditure

3,083

Renewable Energy andthe Environment

2,139
1,646
1,231

FY2012FY2013

691
1,636
1,221

FY2014

1,391

1,561

FY2015

We offer customers total support in the design,
installation, and maintenance of facilities such as wind
power and mini/micro hydropower systems.

3

Torishima Report 2017

Maximizing the life span of plants withintegrated service solutions
Torishima is committed to providing the highest-quality
aftermarket services. Our innovative solutions can enhance
performance and increase the life span of pumps. This
allows operators to maximize efficiency, reduce
maintenance costs, and conserve energy.

658

1,599

484

453

FY2015FY20161,084

FY2016

In order to survive fierce global competition and maintain acompetitive edge, we invest aggressively in production facilities,
related equipment, software, and R&D. For example, we are
expanding our service bases overseas.

Contributing to a low-carbon society throughthe use of renewable energy

678

FY2012FY2013

FY2014Service facility, Torishima Service Solutions (Thailand) Ltd.

2012: Established Torishima Service Solutions Asia Pte. Ltd.
(Singapore)
Completed 2nd service facility, P.T. Torishima Guna Engineering(Indonesia)
2013:
Completed service facility, Torishima Pumps (India) Pvt. Ltd.
(Bengaluru, India)
2016:
Established Torishima Service Solutions (Saudi Arabia) Ltd.
(Dammam, Saudi Arabia)
Established Torishima Service Solutions (Thailand) Ltd.

Torishima Pump Mfg. Co., Ltd.

4

Torishima’s Business Model: CSV Management

It is our mission to address society’s challenges by providing energy-efficient solutions, safety, and reliability.
We do this by creating value through an integrated system covering everything from receiving orders to
product delivery.

Torishima Pumps: Integral to Our Lives
Desalination Plants
In the Middle East and other regions where there is a shortage ofwater, desalination plants convert seawater into fresh water. To
make this possible, seawater intake pumps, high-pressure pumps,
and other pumps play an important role in desalination plants.

Power Plants

Factories, Towns

Irrigation

Rainwater Drainage Facilities

Boiler feed pumps, boiler circulation pumps,
circulating water pumps, condensate pumps, andother pumps work around the clock in power plants
to provide electricity that lights up the streets of cities.

Torishima pumps support industrial
development and comfortable
lifestyles by delivering water andother liquids to factories and towns.

Pumps deliver
water to farms.

Drainage pumps protect houses and towns
from flood damage caused by heavy rainfall.

Potable Water Facilities

Sewage Treatment Plants

Water that is delivered to homes and businesses comes from purification plants that
purify river water, and from desalination plants that convert seawater into fresh water.
These plants rely on the crucial role played by water supply and distribution pumps.

Pumps also send wastewater tosewage treatment plants and return
purified water to rivers or seas.

Society’s Challenges
Water and energy shortages
caused by worldwide population
growth and development inemerging countries

Management Strategy

Value Creation

New Medium-TermBusiness Plan

Energy-Efficient
Solutions

Engineering
OrdersProcurement

Global warming fromCO2 emissions

Business Cycle

Management Foundation
Aging infrastructure inindustrialized countries

R&D

Finance

Control QCD(quality, cost, delivery)
through an integrated
production system

Production
Frequent flood damage due toextreme weather

Bases and facilities related to manufacturing,after-sales service, and sales

Technologies
R&D, certified skill training, human resource
development

Pumps are a crucial part ofthe solution

5

Torishima Report 2017

ESG
Environment, society, governance

After-sales
service

Delivery,
installation

Production

We contribute to greater efficiency
in plants and other infrastructure
by supplying high-efficiency
pumps and other energy-efficient
products, and by providing
energy-efficient solutions forpumping equipment and pumping
stations. We can thus play ourpart in solving issues like waterand energy shortages, andreducing CO2 emissions.

Providing Safety
and Reliability
We help expand and maintainworldwide infrastructure such as
waterworks, sewerage, rainwaterdrainage, irrigation, power plants,
and other pumping facilities.
Wherever they’re deployed,
Torishima’s advanced
technologies ensure safety andreliability under all conditions.

Torishima Pump Mfg. Co., Ltd.

6

Management Strategy and Message from the President

Continual Strengthening of
Our Foundations
Kotaro Harada
President and CEO

Our Business Environment

Solving the world’s challenges is a business
opportunity, and Torishima’s pumptechnology can be part of the solution.

The 20th century was a time of rapid technologicaladvances, but these advances came at a price;
excessive use of energy and depletion of resources.
But as the 21st century unfolds, there has been aparadigm shift with respect to issues such as global
warming and the increasing world population.
Resources are limited, and sustainability must be at
the heart of any future developments. These issues,and continued globalization, transcend borders,creating opportunities for Torishima to rise to thechallenge by providing high-quality, energy-efficient
products.
The world’s population now exceeds 7 billion.
Demand for water and electricity is rising,particularly in developing countries, and pumps
play a crucial role in meeting that demand. It is an
undeniable irony that while pumps are essential for

7

Torishima Report 2017providing water and electricity, they themselves
require an enormous amount of power to function;
they account for about 30% of the electricity
consumed in Japan. So, any energy-efficiency gains
in our pumps is a gain for all of society. The energy
consumed by pumps necessitates the burning offossil fuels to create energy, which of course releases
CO2 into the atmosphere. If we are to reduce theseCO2 emissions and thus curb global warming, weneed to achieve greater energy efficiency. Rallying
around Torishima’s slogan of “Save the world withpumps,” we have dedicated ourselves to researchand development, utilizing state-of-the-art analysis
technologies and testing equipment to provide evenmore highly efficient pumps. But we don’t stop
there. At Torishima, we use the technologies wehave developed in large, high-pressure pumps, which
require high efficiency and safety, and apply these tosmall pumps known as standard pumps. And
through an initiative we call “Go green withpumps,” we have been doing more than any othermanufacturer to help the public understand how
pumps can contribute to energy efficiency.

Our pumps provide a safety net for people in timesof natural disasters. Urbanization is leading todecreased water-retention capacity, and increasingly
frequent torrential rains are sending massive
amounts of rainwater into drainage facilities,
requiring that municipalities convert to or newly
install high-volume pumps. However, if pumping
volume is increased without changing the shape anddimensions of existing pump sumps, the water flow
within the sump will increase, causing vortices thatcan damage the pumps. Traditionally, concreteanti-vortex baffles have been used to prevent these

Conventional method to prevent vortices
at rainwater drainage facilities

vortices. Installing such baffles, however, isexpensive and time-consuming, not to mention
dangerous. Torishima has made such concreteanti-vortex baffles obsolete by developing pumps
with two patented technologies—double-suction
bellmouths and vortex-preventing rings—that allow
the pumps themselves to prevent vortices. Pumps
with these highly touted technologies have been
installed on facilities in municipalities all overJapan.

Controlling vortices with the pump itself
Vortex-preventing ring(prevents surface vortices)

Double-suction bellmouth(prevents submerged vortices)

Anti-vortex baffle
Pump sump
Installing anti-vortex baffles on sumps currently in operation entails
replacing the water and installing temporary water-stoppage walls,
which increases the construction time and cost.

No anti-vortex baffles are needed as the pump itself prevents
submerged vortices and surface vortices. Installation thus
requires less time and cost.

Torishima Pump Mfg. Co., Ltd.

8

Top Message

Recent years have brought torrential rains that insome cases totally submerge pumping stations. In
response, we developed a patented pump with asubmersible motor that can operate even if thepump room is flooded. Normally, motors are
installed above ground-level to avoid the risk of
becoming submerged, requiring auxiliary

equipment such as an intermediate shaft between
the motor and the pump. Torishima’s new pump is
capable of operating under water. It also has its
equipment consolidated in one room, whichsimplifies the facility design and reduces
maintenance costs. The lack of an intermediate
shaft makes it highly earthquake-resistant.

New Medium-Term Business Plan (Fiscal 2017–2019)
for Achieving Long-Term Targets
The next three years leading up to fiscal 2019, Torishima’s 100th anniversary, are a time for us to consolidate
the steps taken so far, and at the same time prepare to grow even stronger in our second century of business.
We aim to improve our fundamental strengths so that we can withstand external environmental factors.

Conventional pumping station
Cannotoperate if
submerged

Device forMotoropeningand closing
discharge valve

Pumping station with submersible motor▽Ground

Intermediateshaft

By 2019—our 100th anniversary—complete
measures currently in progress and prepare to
grow even stronger in our second century.

▽Ground

level

level

Water-resistantmotor
Can operate
Discharge
even ifvalve
submerged

Discharge
valve

TargetOperating profit
margin
10% or higher

2019 Medium-TermBusiness Plan

Operatingprofitmargin
(%)
10

Sales
(billion yen)

Conventional
pump

Pump withsubmersible
motor

50

2016 Medium-TermBusiness Plan

44.4

45

44.5

45.5

46.5

8
6

6.5
5.5

40.5
Over the past five years, facilities in Japan have beensteadily installing Torishima’s double-suction
bellmouths, vortex-preventing rings, and pumps
with submersible motors—prime examples of how
Torishima’s pump technology is keeping things
running smoothly.
Pumps with submersible motor

In Japan, investment in public infrastructure peakedaround 1997 but dropped to about one-third of thisin 2010. Since then, however, there has been an
increase in the upgrading of aging infrastructure,
and Torishima has been successfully tapping into
this new area of demand. This trend is not justlimited to Japan: we foresee increasing demand in
the industrialized countries of Europe, North
America, and other world regions.
We therefore believe worldwide pump demand willshow a steady rise in the long term. At Torishima, it
is our mission to use our technologies, along with
our proven track record and the trust we have built
up around the world, to provide high-efficiency
pumps that offer society energy efficiency, safety,
and reliability. We will continue to dedicate
ourselves to meeting society’s increasingly
sophisticated and diverse needs.

Vertical mixed-flow pumpwith submersible motor

9

Torishima Report 2017

Vertical mixed-flow volute pumpwith submersible motor

0.9
0FY2015

4

4.5

40

3.3

FY20162

FY2017

In order to strengthen our internal systems andbuild a solid foundation as a global company, forthree years starting in fiscal 2013 we madereforming manufacturing processes a top priority.
To achieve this, in fiscal 2013 we upgraded our coresystems to secure integrated operational processes,
covering everything from receiving orders anddesign to procurement, production, installation,
and after-sales service. In fiscal 2014, we embarked
on standardization of pump design.
Our entire company pulled together to carry out
these plans, and as of fiscal 2016 we had achieved
certain targets in the reform of manufacturing
processes and we had streamlined ourorder-receiving policy to secure profits by focusing

FY2018FY2019100th anniversary

FY20260

on quality rather than quantity. The end result wasa return to higher levels of profitability. However,the long-term drop in crude oil prices led to a slump
in overseas demand for construction of new plants,
such as desalination plants and power plants. As aresult, competition with rivals intensified and orders
overseas were hard to come by. Fortunately,
demand was strong in Japan for thermal power
plant construction and infrastructure upgrading,
and we were able to end fiscal 2016 with increased
sales and profits for our worldwide operations as awhole. Considering this situation, however, we are
well aware that we must improve our company’s
fundamental strengths so that we can withstandexternal environmental factors such as crude oil
prices and currency fluctuations.

Torishima Pump Mfg. Co., Ltd.

10

Top Message

Torishima’s long-term challenges, and measures towards achieving
the 2019 Medium-Term Business Plan
Develop world-leading products that offer energy efficiency, safety, and reliability,
and create a business model to this end
Innovative Capabilities● Enhance core pump products, introduce new products● Develop new systems for the after-sales service market by utilizing

technologies such as IoT and 3D

Improve company’s fundamental strengths to withstand external environmental factors
Global Strength
Productivity,
Work Process Quality● Build an optimal global production system(plants in Japan, China, Indonesia, India)● Have state-of-the-art equipment boost productivity andexpand production capacity● Firmly establish and continuously improve process innovation● Cover more regions (Americas, Southeast Asia)

After-Sales Service
Capabilities● Increase number of supervisors and train them
● Make service solutions business account for 35% or more of all orders received● Increase number of products that can be serviced

Build flexible corporate infrastructure (mechanisms, people)● Improve viability of Board of Directors

Governance● Introduce performance-based compensation system● Strengthen management of worldwide subsidiaries● Reform working styles

Human Resources● Promote diversity(create work environment conducive to women and foreign nationals)● Hire and foster globally minded people

One way to improve our fundamental strengths is
to build an optimal global production system thatwill make us immune to currency fluctuations. We
are expanding product lineups at our existing plants
in China and Indonesia. In addition, in India wehave a service facility able to respond to the needsof the many thermal power plants that haveinstalled Torishima boiler circulation pumps. We
plan to make this service facility capable ofmanufacturing boiler circulation pumps.
At the same time, there is no end to the work wehave been doing to reform our manufacturing
processes and thus achieve greater QCD (quality,
cost, delivery) capabilities. We must firmly establish
process innovation in order to continue to achieve
improvements. In addition, it is imperative that we
make our factory equipment state of the art so that
we can realize increased productivity and expanded
production capacity.

11

Torishima Report 2017

In the realm of service solutions, we have achieved
steady progress in our efforts to expand ourafter-sales service network, with a focus on regions
where many Torishima pumps are installed. In
fiscal 2016, we established service facilities in Saudi
Arabia and Thailand that have begun serving ourcustomers in the respective regions. Torishima’s
service solutions now account for 30% of all orders
received, a figure we plan to raise to 35% in fiscal
2019. By continuing to raise the ratio of service
solutions to overall orders, our aim is to achieve a
profit structure in which we secure stable profits
through service solutions even when our orders for
new pumps are sluggish. With this in mind, we arepreparing to establish service facilities in countries
where we have yet to establish them, including thenations of the Americas and Southeast Asia. We
are also taking our servicing and maintenancebusiness beyond just pumps, forming alliances withdedicated manufacturers of motors, turbines, andother pump-related rotating machinery. By doing
so, we offer our customers even greater
convenience.
Torishima must set itself apart not only from its
traditional rival manufacturers but also frombudget manufacturers in emerging countries. Hereagain, the key is quality—quality in pumps andtheir servicing. End users need pumps to operate
for several decades, so quality means giving themsafety, durability, and satisfying after-sales services.
To ensure that these end users ask for Torishima
pumps by name, we must make pumps that work
reliably for years and build a service network that isalways there when customers need it.
We must also elevate overall product strength to
new levels. That is, we need to boost the reliability,
efficiency, and competitiveness of Torishima’s core
pumps so that we can offer better energy efficiency,
safety, and reliability through our products andbecome industry-leaders in innovation. With
today’s lightning-fast pace of innovation in IoT,
AI, 3D, and other data-rich technologies giving
birth to new value in our world, we are witnessing
what many are calling the fourth industrial
revolution. We are harnessing these technologies todevelop original systems and tap into new markets
where we can secure new orders.
To succeed in the aforementioned efforts,
governance and human resources are key factors
supporting our company. To boost governancecapabilities, we have improved the viability of our
Board of Directors and introduced a performancebased compensation system, as well as strengthened
management of our subsidiaries. This will allow us
to improve the quality of our management andgrow our business sustainably in the medium andlong term.
To boost human resource capabilities, we must
realize that people are the lifeblood of acorporation. There is much to be done: reformworking styles, promote diversity, and hire andfoster globally minded people. As one example offostering human resources, with increasing demand
from our customers around the world formaintenance and servicing, we will increase thenumber of supervisors and further train them sothat when they are visiting customers to carry out
inspections and repairs, they can at the same time

Torishima Service Solutions (Saudi Arabia) Ltd.

offer energy-efficient solutions and suggest ways tobetter operate their pumps. This will lead to
improved service solutions and take our service
division to a whole new level.
Torishima will celebrate its 100th anniversary inAugust 2019. The next three years leading up to
2019—under the new 2019 Medium-Term
Management Plan—are a time for us to complete
the measures we have taken up to now and prepare
to grow even stronger in our second century ofbusiness. We will boost manufacturing efficiency
and improve our company’s fundamental strengths,with the goal of securing profit even in the face of
external environmental factors. Our aim is to be
fully prepared for the day when the market
overcomes its current stagnancy, returns to vibrant
growth, and provides us with improved sales.
Torishima’s business is all about creating sharedvalue (CSV): providing high-efficiency pumps andpump technologies that help solve society’s
sustainability problems by offering energy
efficiency, safety, and reliability—while also helping
us profit and grow as a company. My mission aspresident of Torishima is to raise our corporate
value as a global company that can growsustainably well into its second century of business.
I would like to once again offer my gratitude to themany stakeholders who have continued to support
us—shareholders, customers, suppliers, business
partners, and of course the many employees who
endeavor to proliferate our high-efficiency pumps. I
ask for your continued support as we at Torishima
strive to raise our corporate value and build good
relations with all of our stakeholders.

Kotaro Harada
President and CEO

Torishima Pump Mfg. Co., Ltd.

12

Research and Development

In an everchanging world our organization must continually develop and improve to remain competitive and influential
in the Engineered Pump market. We have achieved this by innovation in the form of products that meet the newchallenges in our society, which are linked to energy efficiency, predictive maintenance, and improved safety. The goal
being ever improved products with higher efficiencies and reliability.
To emphasize our R&D strategy, our team’s plan is to be first to market with products that respond to customer
needs, particularly in the field of hydraulics. Therefore we have shortened our development lead time by incorporating alarge-scale cluster system that utilizes a supercomputer and by automating our hydraulics development system. In
addition to these systems, so as to improve product quality, we are also improving our analysis of cavitation erosion,caused by increasing pump speed, by using visualization test loops.
In parallel to ongoing activities mentioned above we also strive to make our R&D more efficient by working withpartners through open innovation. With pumps continually increasing in size and speed as well as meeting dimensional
restrictions and improving efficiencies, improved rotor dynamic technology is needed in meeting such targets. Torishima
is conducting joint research with an American university to advance such rotor dynamic analysis technology and thus
further improve the reliability of pumps.
To boost development efficiency and give rise to innovation, we are conducting hydraulic design of multistage
pumps using multipurpose optimized design. We are also conducting joint research with universities with the goal of
improving the performance of low-specific speed pumps used in high-head applications. Other basic research we are
currently conducting with universities and other external research institutes covers elementary technologies in areas
such as structure and materials.

In fiscal 2016, research and development focusedon the following pumps in the fields of energy and desalination.
Circulating Water Pump for Power Plants
This is a vertical mixed-flow pump that supplies coolingwater to the condenser in a power plant. By optimizing
the water flow inside the pump, we achieved a pump thatis higher speed, more compact, and highly efficient.We
also succeeded in giving it higher-head and largercapacity capabilities. It went on sale in 2016 and isalready playing a major role at power plants around theworld.

Boiler Circulation Pump for Thermal Power Plants
We completed development of a next-generation boiler
circulation pump that can reduce the amount of coolingwater needed and is thus more economic as well as a
reduction on auxiliary systems needed for operation. We
intend to bring this to market in fiscal 2017.

Reverse-Osmosis High-Pressure Pump for
Seawater Desalination Plants
There is an increase in seawater desalination plant
construction as demand for fresh water continues to growworldwide. The reverse osmosis system has become thepreferred technology for these plants due to its ability tomeet the growing need for energy efficiency. The heart ofa desalination plant is a reverse-osmosis high-pressure
pump, which sends high-pressure water through areverse-osmosis membrane. Through optimal design
utilizing the latest fluid and structural analysis
technologies, we have achieved a reverse-osmosis
high-pressure pump with improved efficiency and stability.
And thanks to our ability to provide products of evenhigher reliability, we are confident our product is morecompetitive as our objective is to maintain our position asa leading pump supplier in the desalination market.

ESG—Environment

Environment

business activities, while also lowering the environmental burden of all its business activities.

Environmental Management
Torishima
Environmental Policy

Philosophy
At Torishima, we believe that protecting the Earth’s naturalenvironment is a vital task that must be addressed by all
mankind. In a quest to create a global environment of
natural beauty conducive to pleasurable living, for the sakeof the planet and all its inhabitants, through the provisionof pumps and other environmentally friendly products, we
supply environmentally sustainable systems engineered toenrich living environments everywhere. Meanwhile, throughproduction activities in harmony with environmental
demands and the provision of products having minimal
environmental loads, we strive to contribute to theformation of a developmentally sustainable society on a
global scale, to ensure the continuation of a healthy global
environment well into the future.

Activities
To carry out the foregoing philosophy into practice,
we undertake the following activities:
1) Development and supply of highly efficient,environmentally friendly pumps, as a way ofcontributing to energy savings
2) Development and supply of wind power andhydropower generation systems that use natural energy
sources, as a way of contributing to reduction of CO2
emissions
3) Provision of technologies targeting reuse of wastematerials, as a way of contributing to enhanced
recycling of natural resources
4) Proactive promotion of reductions in environmentalloads and prevention of environmental contamination
based on environmental assessment results5) Ongoing enhancement of environmental management
systems in order to raise environmental performance6) Compliance with environmental laws, regulations, andother appropriate demands, and formulation of andcompliance with in-house rules7) In the performance of production activities, pursuit ofenergy and natural resource savings, recycling, waste
reduction, and proper management of chemical
substances, as a way of lightening environmental
burdens

October 27, 2016
Kotaro Harada, President and CEO,Torishima Pump Mfg. Co., Ltd.

13

Torishima Report 2017

Reverse-osmosis high-pressure pump

GovernanceIn the environmental area of CSR, Torishima focuses on contributing to the environment through its products andDeveloping and Supplying
Environmentally Friendly Products
Pump Business, Renewable Energy andthe Environment Business
By providing energy-efficient pumps (high-efficiency boiler
feed pumps, Eco-Pumps, and large high-efficiency pumps)
along with wind power and mini/micro hydropowersystems, Torishima contributed to reducing CO2 emissions.
CO2 reductions (tons)
Tons
600,000
500,000
400,000
300,000
200,000
100,000
0

FY2014FY2015FY2016FY2017 (plan)

CO2 reductions from mini/micro hydropower systems
CO2 reductions from high-efficiency pumps
CO2 reductions from wind power systems

Initiatives for Reducing Environmental
Burden in Production Activities

1 Saving Resources and Energy
In fiscal 2016, total CO2 emissions from the head office andfactories rose by 3% year-on-year, but CO2 emissions per
production unit* actually fell by 3%.
CO2 emissions (tons) and CO2 emissions per production unit
(kg/1 million yen)
Per production unit:
Down
3%(kg/1 million yen)
300

Tons
4,000

250

Up
3%

3,000

200
150

2,000

100
1,000
0

Boiler circulation pumpSociety50
FY2014FY2015FY2016FY2017 (plan)0

CO2 emissions from head office and factories (tons)
CO2 emissions per production unit (kg/1 million yen)*Per production unit: The load generated per production of a certain amount of
product. Torishima uses a benchmark of “per production output (one million yen)”.

Torishima Pump Mfg. Co., Ltd.

14

ESG—Environment

Environment

2 Reducing Waste

Input

The total amount of waste at the head office and thechanges in the amount of waste per production unit were as
follows. In fiscal 2016, the amount of waste was down 5%
year-on-year, due to factors such as a reduction in sludge.
Meanwhile, waste generated per production unit was down
11% year-on-year.

Society

Torishima head office

Down
5%

Kerosene 2%

Customers

Utility gas 5%Long-term trust

Electricity 93%

1.50
1.00

FY2014FY2015Waste

FY2016

Employees

Employment, humanresource development

FY2017 (plan)

Waste per production unit

3 Reducing Discharge of PRTR Class

Suppliers, Engagement General
Business
PublicPartners
Contribution tosociety

Fair dealings

0.50
0.00

GovernanceTo maintain a good relationship with our subcontractor
partners, Torishima selects such partners on the basis oftransparent and impartial transactions. We also seek toestablish equal partnerships with them while complying
with all related laws and regulations.

Stakeholder

2.00

10.0

0

酉島製作所本社（前年度比）

Gas oil 0.02%

2.50

20.0

Society

Relationship with Business Partners

Fuel converted into crude oil

2,939 kL (up 2%)

Environment

In the social dimension of CSR, Torishima carries out various activities for all its stakeholders.

Per production unit:(kg/1 million yen)
3.00

Down
11%

30.0

ESG — Society

Energy consumption (year-on-year)

Total waste (tons) and waste per production unit
(kg/1 million yen)
Tons
40.0

Governance

Water consumption (year-on-year)
Industrial-use
water
Tap water

20,215 m3 (down 39%)
63,754 m3 (up 11%)

Shareholders,
Investors
Appropriate disclosure■ Cooperation in Safety and HealthTogether with subcontractors stationed at Torishima sites
in Japan, Torishima holds joint monthly meetings aimed atenhancing safety and health activities. We also hold safety
conferences focused on eliminating workplace accidents aswell as workshops for persons in charge of safety andhealth in their respective workplaces. Torishima and our
subcontractors are working as one to boost technical skills
and raise awareness of safety and health.

1-Designated Chemicals

In fiscal 2015 Torishima achieved a 36% year-on-year
reduction in the amount of discharged and transferredchemical substances covered by the PRTR (pollutant
release and transfer register) system in Japan. However,owing to an increase in production output, this figure rose
14% year-on-year in fiscal 2016. We keep striving toestimate the required paint volumes more accurately, while
reducing the amount of cleaning agents we use.
PRTR class 1-designated chemicals (tons)

OutputRelationship with Customers
Torishima head office

CO2 emissions (year-on-year)

4,233 tons (up 3%)
Waste (year-on-year)

37 tons (down 5%)
Recycled resources (year-on-year)

Tons
25.0

Down
36%

20.0

1,592 tons (up 8%)

Up
14%

15.0
10.0

FY2013

Toluene

FY2014FY2015

It is a challenging task to maintain effective
communication with every Torishima shareholder andinvestor in Japan and overseas, whether they are
individuals or institutions. Even so, we do everything we
can to deepen the understanding that shareholders andinvestors have of the company’s sustainable growth.
Torishima strives for fair disclosure of corporate
information, which is made available on the company
website. In fiscal 2016, Torishima held a generalshareholders’ meeting and financial results briefings for
institutional investors. We also participated in the
Sawakami Fund’s investment briefing for individual
investors.

XyleneA “Go Green with Pumps” training session at the Torishimahead office

The Torishima booth at the investment briefing let individual
investors get to know us better

FY2016Ethylbenzene

Energy Consumption and Input
Torishima fully understands the impact its businessactivities place on the environment. Ever aware of this
impact, we do all we can to reduce the environmental
burden at every stage of our activities, from productdevelopment to disposal. In fiscal 2016, plant electricity
usage increased by 2% year-on-year. Meanwhile, areduction in sludge output resulted in overall waste
reductions of 5% year-on-year.

15

We hold “Go Green with Pumps” seminars for customers
who have installed Torishima Eco-Pumps. We believe justdelivering pumps is not enough. These training sessions
embody Torishima’s years of experience and know-how as
pump professionals. We aim to give customers a deeper
understanding of pumps, while enabling them to apply
what they have learned to their own pumping facilities.
Instruction includes classroom lectures and hands-on
practical training. We also make visits to hold lectures andtravel to sites across Japan in our demo truck loaded with
Eco-Pumps. These efforts have been well received byparticipants.

Environmental Friendlinessthroughout the Value Chain

5.0
0.0

■ “Go Green with Pumps” Seminars

Torishima Report 2017

Relationship with Shareholders
and Investors

Torishima’s freight volume is below that of a specified
consigner, as designated under the Japanese Act on the
Rational Use of Energy. Nevertheless, we implement
various measures to reduce freight volume. We have set atarget in our environmental management program of
reducing freight volume ton-km* between shippers andsuppliers in an effort to lessen our environmental impact.
Specifically, we are raising the load efficiencies offreight trucks and preventing sporadic shipments. Theseand other steady day-to-day efforts enable us to achieve
company-wide improvements in transport efficiency.
*Ton-km = Freight weight (ton) × transport distance (kilometer)

Torishima Pump Mfg. Co., Ltd.

16

ESG — Society

Environment

Relationship with the General Public

Relationship with Employees■ Pump Classes at Elementary Schools

Torishima has always considered human resources a vital
asset that companies should nurture. We consistently create
workplace environments that enable employees to worksafely and worry-free, and we provide learning
opportunities that promote employees’ growth.

Every year, Torishima visits local elementary schools inJapan to teach children about pumps, manufacturing, andother topics. This gives us the opportunity to contribute to
the local community and to children’s education while also
boosting the skills and motivation of Torishima employees.
In February 2017, students of the Japanese School in
Dubai, U.A.E., paid a visit to Torishima’s local service
center and observed pumps and their assembly.
During the tour of theDubai service center,the children had a greattime trying their hand at
making an Archimedes
screw, the world’s firstpump■ Safety and Health Policy, Major Activities
In April 2010, Torishima was certified for the JISHA (Japan
Industrial Safety and Health Association) OSHMS(Occupational Safety and Health Management System)
standards. We work to reduce risks by conducting risk
assessments of mechanical equipment, operational
procedures, and chemical substances.

Safety and Health Policy
Basic Philosophy■ Harada Memorial Foundation
The Harada Memorial Foundation is a public interest
incorporated foundation. In 1981, then-president Ryuhei
Harada launched the foundation with a personal
contribution. The foundation provides grants to individuals
and organizations engaged in research in natural science
domains connected to the pump industry, such as
hydraulics and fluid mechanics. It also offers scholarships
to young people.
Research grants
andscholarships

771 million yen(Total from 1981 to 2016)■ Co-sponsoring the Takatsuki Citizens’ Sports Day
Torishima co-sponsored the 35th Takatsuki Citizens’
Sports Day, held in Takatsuki, the city where our head
office is located. This event allows disabled people to boost
their wellbeing through athletic activities that they might
not usually have the chance to partake in. Local citizens
pitch in to plan and run the event, and people of all abilities
get to enjoy sporting activities. It’s an enlightening
experience for everyone involved.

Torishima contributes to society through businessactivities that include the development and manufactureof pumps and related products. At the same time, we
regard creating a safe, healthy environment—one where
employees can work free of worries and where theirhealth is maintained or even enhanced—as the basis of
our QCD (quality, cost, and delivery) actions. We havethus formulated a basic policy on safety and health andare building a culture of safety and health that aims for a
virtuous cycle. And we seek to be a vibrant company
that continues to grow forever.

April 1, 2017
Kotaro Harada,
President and CEO

Under a bright autumn sky, 1,300 people took part in the 35th
Takatsuki Citizens’ Sports Day

17

Torishima Report 2017

Haruhisa Sumi,
Safety and HealthGeneral Manager

Governance■ Employee Education
Torishima actively offers educational opportunities and support, such as providing technical training on pumps and on-the-job
training for new employees. We also offer grants to help employees obtain a Ph.D. in engineering or a national technicalqualification, and we facilitate distance learning and seminars by outside organizations to boost employees’ skills. “Seeing isbelieving” is the motto for Torishima’s overseas on-site training for young employees. The goal of this intensive training programis to enable employees to identify customer needs and the seeds of new business beyond national boundaries.

■ Diversity
For Torishima to grow sustainably in a global market, weneed to use personnel diversity to our advantage.
Torishima actively hires non-Japanese staff and works
to foster employees with a global perspective so that we canstrengthen our competitive edge in the global market.
In Japan, the Act on Promotion of Women’sParticipation and Advancement in the Workplace and the
Act on Advancement of Measures to Support Raising
Next-Generation Children have come into effect. Companies
are obliged to formulate action plans for creating workplaceenvironments in line with these acts. To support employees inraising children, Torishima has an in-house daycare center.

Thanks to such measures, our percentage of women
returning to work after childbirth is 100%.
Torishima also offers two-week workplace experienceand training mainly for students from local special-needs
schools. As of fiscal 2017, a total of 18 students withdisabilities who have undergone this training have goneon to join the company. Torishima provides guidanceand support so that they can feel they are part of theTorishima team and nurture their own hopes and dreams
for the future.

■ Percentage of Non-Japanese Employees

Number of employees
Non-Japanese719 people(45.5%)

1,580
peopleBasic Policy
1) We constantly aim to raise the level of safety andhealth by steadily implementing our occupationalsafety and health management system and throughongoing improvement activities.
2) We identify hazardous factors in the workplacethrough risk assessments and take countermeasureson an ongoing basis so that we can reduce risks to an
absolute minimum.
3) We comply with all safety and health-related laws andregulations and company standards in an effort tofurther our safety and health management.
4) We seek to create a comfortable workplace foreveryone concerned by ensuring effective
communication among Torishima employees andamong other people working at Torishima sites.
5) We aim for zero accidents and disasters by raising
employees’ awareness of safety and health througheducation and training.
6) In executing safety and health activities, we invest theappropriate management resources and implement
effective improvements on an ongoing basis.

Society

Japanese
861 people(54.5%)

1,580 people(consolidated)

Of which are non-Japanese719 people(45.5%)For further information on Torishima’s ESG initiatives,
please visit our corporate website.

https://www.torishima.co.jp/en/au/csr.html

ISO-Certified Torishima Group Companies and Offices
ISO 9001

ISO 14001

Torishima has been certified for ISO 9001, an international
standard on quality management systems. This assures we deliverproducts, engineering, and maintenance services of a quality thatsatisfies customers and earns their trust.

Torishima actively pursues ISO 14001 certification, an international
standard on environmental management systems, and strives toprotect the environment. We have completed compliance with ISO
14001:2015 at all of our bases in Japan (head office, factories,
branches, and sales offices).

Date
February 1997
December 1998

Name

Date

Name

Torishima Pump Mfg. Co., Ltd. head office, factories,

July 1999

Torishima Pump Mfg. Co., Ltd. head office and factories (Japan)

branches, and sales offices (Japan)
P.T. Torishima Guna Indonesia (Indonesia)

April 2002

P.T. Geteka Founindo (Indonesia)

April 2003

P.T. Torishima Guna Engineering (Indonesia)

September 2010
August 2012

Torishima Service Solutions Europe Ltd. (U.K.)
Torishima Pump Mfg. Co., Ltd. Qatar Project Office (Qatar)

July 2013

Torishima Pump (Tianjin) Co., Ltd. (China)

December 2013

Torishima Service Solutions FZCO (U.A.E.)

June 2014

Torishima Service Solutions Asia Pte. Ltd. (Singapore)

January 2015

Torishima Pump Mfg. Co., Ltd. Middle East Project Office (U.A.E.)

August 2015

Torishima Pumps (India) Pvt. Ltd. (India)

March 2004
May 2005
September 2010
May 2012

P.T. Torishima Guna Indonesia (Indonesia)
P.T. Torishima Guna Engineering (Indonesia)
Kyushu Torishima Co., Ltd. (Japan)
Torishima Service Solutions Europe Ltd. (U.K.)
Torishima Sapporo, Sendai, Tokyo, Nagoya, Osaka,
Takamatsu, Hiroshima, and Kyushu branches;
Yokohama, Saga, and Okinawa sales offices (Japan)

August 2012

Torishima Pump Mfg. Co., Ltd. Qatar Project Office (Qatar)

January 2013

Torishima Pump Mfg. Co., Ltd. Middle East Project Office (U.A.E.)

July 2013

Torishima Pump (Tianjin) Co., Ltd. (China)

Torishima Pump Mfg. Co., Ltd.

18

ESG — Governance

Environment

Society

GovernanceTo grow sustainably and raise corporate value in the medium to long term, Torishima is strengthening its corporate
governance and its framework for risk management, internal control, J-SOX compliance, and other items.

Corporate Governance Structure
As of June 26, 2015, Torishima shifted its corporate
governance structure to one of a company with an Audit
and Supervisory Committee. Under this structure,
directors who are members of the Audit and Supervisory
Committee (including three outside Audit and Supervisory
Committee members) are given voting rights on the Boardof Directors. This strengthens the supervisory functions of
the Board of Directors and enhances Torishima’s corporate
governance structure.
The accounting auditor cooperates with the Audit andSupervisory Committee and the Internal Audit Department
to efficiently conduct effective audits while exchanging
information and views.

Compliance Structure
The Internal Audit Department, which is independent
from business operations, conducts internal audits from anunbiased perspective and with a focus on the efficiency,
effectiveness, and legality of business operations. It also
audits overseas Torishima Group companies in light of the
globalization of Torishima’s business activities.
For the future, Torishima will aim to raise corporate
value by increasing the effectiveness of the Board of
Directors. We will also enhance management of domestic
and overseas subsidiaries, in an effort to strengthen
governance. And we will look into implementing aperformance-based compensation system as a means ofboosting business performance.

“The Torishima Group has consistently accorded highest priority towinning and maintaining the customer’s solid trust.” In line with thiscorporate motto, Torishima has formulated a basic policy to ensurecompliance in business management. The policy covers the observance oflaws and regulations, while also stipulating fair and impartial behavior
and prohibiting discrimination and acts that violate social ethics. There
are further stipulations on maintaining discipline and order, and on
remedial action to take when violations of the policy occur.
Torishima works to thoroughly communicate the content of the policy
to all directors and employees, so that they understand and follow it
properly.
Torishima also has a Compliance Committee and a consultation
service for discussing matters such as workplace ethics.

Q

Company Units

General Shareholders’ Meeting

Selection/
Supervision

Organizations in Charge of Conducting BusinessSupervision/
Auditing

Board of Directors(all directors)

Opinion Statements(on nomination andcompensation of directors)

Appointment/
Dismissal

Suggestions/
Reporting

Audit and Supervisory Committee(directors who are members of the Audit
and Supervisory Committee)

Reporting
Collaborating

Prior Discussions

Accounting
AuditorInstruction

Compliance Committee
Risk Management Committee
Safety and Health Committee

ReportingInternal Audit Department

Instruction
Reporting

Guidance/
AdviceAuditing/Instruction

2

Provide guidance and advice to businessexecution divisions regarding the results ofinternal audits of corporate ethics

3

Provide guidance and advice regarding
educational planning and activities related tocorporate ethics

4

Provide guidance and advice to the internal
consultation service regarding
whistle-blowing

Business Divisions
Administrative Divisions

Quality Committee
Environment Committee

Hiroshi Akiyama, Outside Director

Q

Auditing/
Instruction

How do you assess the effectiveness of Torishima’s
Board of Directors?

What should Torishima do to boost the effectivenessof the Board?

(Member of Audit and Supervisory Committee)
Profile1994 Registered as attorney, Osaka Bar
Association
Joins Midosuji Law Firm (now Midosuji
Legal Profession Corporation)
2003 Said firm reorganized into legal profession
corporation; becomes member (present)
2011 Outside Audit and Supervisory Board member,
Kotaro Pharmaceutical Co., Ltd. (present)2015 Outside Audit and Supervisory Board member,
Fujiki Komuten Co., Ltd. (present)2016 Director (Audit and Supervisory
Committee member), Torishima (present)

A: The Corporate Governance Code simply outlines typical examples. What’s really important, and what’s the best form tofollow, differs from one company to the next. So it’s crucial for Torishima to go deep into discussion to reveal what exactly isvital to the company and what the issues are. This in turn helps to enhance the Board’s effectiveness. It’s also important that
we directors—while keeping in mind the company’s value—have meaningful discussions on whether we’re going in the right
direction.

Q

Reporting/Consultation

What’s your impression of Torishima after being
appointed director in June 2016?

A: In my first days as director, I felt discussions at Torishima’s Board of Directors
meetings were more lively than those at other companies, and it felt fresh.
Participants could speak their minds freely. My unchanged impression from thestart is that Torishima directors all have a sunny disposition. Still, I think there’s
some room for improvement—for example, in speeding up the organization of
information and sharing awareness of issues as a premise for discussions.

Q

Executive Officers

Auditing/Instruction

Develop legal and ethical compliancesystems for Torishima and its subsidiaries,
which together make up the Torishima Group

A: There’s no fixed assessment method, but Japanese people tend to preferestablished routines. So we used a questionnaire in line with the JapaneseCorporate Governance Code, which each director filled out. We then summarized
our responses and made an assessment this April—a first for Torishima. I believe
this has provided a starting point from which Torishima’s Board of Directors cangrasp the state of the company’s corporate governance and spread awareness of it.
This time, the Board was found to be acting effectively. We should continue
making such assessments in the future, as they are highly worthwhile.

Collaborating

Instruction

Executive Officers
Committee

Appointment/
Dismissal

Auditing

Deliberation/
ReportingPresident

1

Interview with an Outside Director

Torishima’s Governance Structure

Appointment/
Dismissal

Duties of the Compliance Committee

What is your role as an outside director?

A: Being an attorney-at-law, my role as an outside director taking part in Board discussions among experts in business
management is to listen attentively to their opinions and scrutinize them from a mainly legal perspective. Of course, that’s not
the only role I have as director, but I believe that’s chiefly what’s expected of me.

Group Companies

19

Torishima Report 2017

Torishima Pump Mfg. Co., Ltd.

20

Directors (As of June 29, 2017)

Executive Officers (As of June 29, 2017)

Chief Executive Officer

Senior Managing Executive Officers

Kotaro Harada

Tetsuya Kujima

Gerald Ashe

Yoshiaki Inuyama

Koichiro Hamu

President

Corporate Planning Office,General Manager of
Manufacturing DivisionCorporate Planning Office,General Manager of Overseas
Marketing & Sales Division

Managing Executive Officers

Maximizing our experience and knowledge to raise the medium- andlong-term corporate value of the Torishima Group
Newly appointed
Director

Koichiro Hamu
Besides doing work
related to engineering,
Mr. Hamu is in charge of
R&D and overseas
marketing and sales.
His job is to promote theplanning anddevelopment of new
products and boost
Torishima’s overseas
marketing capabilities.

21

Director

Director

Nobuyuki Yoshikawa

Tetsuya Kujima

Mr. Yoshikawa has awealth of experience inquality assurance, CSR
promotion, andmanufacturing. Since
April 2017, he has been
supporting business
operations bystrengthening
procurement.

Mr. Kujima’s duties havefocused on sales
planning, wind power,
and procurement. Since
April 2017, he has beenpromoting innovation in
manufacturing.

Vice President andRepresentative Director

President andRepresentative Director

Hiromichi Fujikawa

Kotaro Harada

Mr. Fujikawa has mainly been
involved in sales and plantengineering, and he also works
towards globalizing Torishima’s
business. He uses thisexperience and knowledge inmanaging large-scale overseas
projects that will contribute to
making Torishima stronger
around the world.

Since being appointed
President and Representative
Director in June 2006, Mr.
Harada has demonstrated
strong leadership at the core of
Torishima’s management andhas striven to boost thecompany’s corporate value. He
will continue to play an
indispensable role in raising
corporate value over the
medium and long term.

Torishima Report 2017

Director(Member of Audit andSupervisory Committee)

Outside Director(Member of Audit andSupervisory Committee)

Yutaka Fukuda

Hiroshi Akiyama

Mr. Fukuda draws on
his experience andknowledge inaccounting, generalaffairs, and internal
auditing to strengthen
Torishima’s governanceand compliancesystems.

Mr. Akiyama was
appointed as a director in
June 2016. Using his
wealth of experience that
includes being a lawyer
and working as an
outside auditor at othercompanies, he oversees
the strengthening of
Torishima’s governanceand compliancesystems, particularly
from a legal perspective.

Outside Director(Member of Audit andSupervisory Committee)

Outside Director(Member of Audit andSupervisory Committee)

Akira Tsuda

Shiro Hakukawa

Mr. Tsuda has a wealth ofexperience, knowledge, andsuccess working at othercompanies as a director and inother management positions.
Using an objective viewpoint
independent of Torishima’s
management members, heprovides sound proposals andadvice to the company’s Boardof Directors.

With his wealth of specialized
knowledge in taxes, finance,
and accounting gained throughyears of experience as acertified public accountant, Mr.
Hakukawa brings strengthened
oversight and transparency toTorishima’s management.

Nobuyuki Yoshikawa
General Manager ofProcurement Division

General Manager ofPlant Engineering Division,
General Manager of Public-Sector
Management Department

General Manager ofEngineering Division,
General Manager of Research &Development Department

Executive Officers

Alister Flett

General Manager ofMiddle East Sales Department,
Managing Director of Torishima
Service Solutions FZCO

Masahisa Ikuta

Masahiro Yamazaki

Mike Choi

Haruhisa Sumi

Hiroto Takahashi

Satoshi Tomizawa

Akihiro Suezawa

Takumi Yoshimura

General Manager ofMiddle East Project Branch,
General Manager of
TGT Project Department

Chairman of Torishima Pumps(India) Pvt. Ltd.

Regional Director of
TGT Hong Kong & Vietnam,
Managing Director of
Torishima (Hong Kong) Ltd.

General Manager of
Administration Division

Executive Officers

Masahiko Ishida
General Manager ofService Division

General Manager of
Human Resource Department,
General Manager ofGeneral Affairs Department

Deputy General Manager ofOverseas Marketing &Sales Division,
TGT Regional Director,
General Manager of
TGT Sales Department

General Manager ofTokyo Branch

In charge of Indonesia
Service Solutions

Torishima Pump Mfg. Co., Ltd.

22

Financial Data from the Past 11 Years(Millions of yen)(Thousands of
U.S. dollars*1)

FY2006

FY2007

FY2008FY2009FY2010FY2011FY2012FY2013

FY2014FY2015FY2016FY2016

Orders received

43,08850,794

46,98858,62432,97439,57940,97552,84742,87851,304

43,483

388,241

Net sales

36,40447,272

45,69245,00849,88046,45345,97445,98546,50140,47944,414

396,554

Gross operating income

5,940

8,269

8,596

9,548

9,257

8,959

8,015

8,320

9,162

9,191

10,53894,089Operating income or loss

852

2,643

2,761

3,258

3,127

2,286

517

(945)

400

373

1,462

13,054

Ordinary income or loss

1,245

2,566

3,410

3,833

3,673

2,929

1,389

(632)

793

(1,663)

1,871

16,705

635

1,410

1,990

2,609

1,892

1,497

943

442

405

(2,422)

1,532

13,679Gross profit margin (%)

16.3%

17.5%

18.8%

21.2%

18.6%

19.3%

17.4%

18.1%

19.7%

22.7%

23.7%

23.7%

Operating profit margin (%)

2.3%

5.6%

6.0%

7.2%

6.3%

4.9%

1.1%

(2.1)%

0.9%

0.9%

3.3%

3.3%

ROE (return on equity) (%)

2.3%

5.2%

8.0%

9.5%

6.1%

4.8%

2.9%

1.3%

1.1%

(7.5)%

4.7%

4.7%

ROA (return on assets) (%)

1.0%

2.3%

3.2%

4.0%

3.1%

2.5%

1.4%

0.6%

0.6%

(3.7)%

2.3%

2.3%

Total assets

65,581

62,076

62,13265,641

61,17860,812

68,232

68,062

71,987

66,19867,719604,634

Net assets

27,943

26,03024,00631,08330,96831,77533,602

34,52436,532

32,79433,713301,009

Equity ratio (%)

42.6%

41.9%

38.6%

47.2%

50.3%

51.3%

48.2%

49.9%

50.0%

48.7%

48.9%

48.9%

Japan

20,27820,524

19,126

20,93918,703

17,281

18,07020,096

19,104

17,06022,153

197,795

Asia

4,089

8,733

8,449

5,408

11,196

13,125

10,259

9,042

11,124

11,307

8,612

76,893

Middle East

10,798

14,682

13,347

16,24814,36911,43011,887

9,753

11,1158,225

10,94097,679Others

1,239

3,331

4,770

2,412

5,609

4,615

5,758

7,092

5,156

3,887

2,708

24,179Overseas ratio (%)

44.3%

56.6%

58.1%

53.5%

62.5%

62.8%

60.7%

56.3%

58.9%

57.9%

50.1%

50.1%

Public sector

17,643

16,525

14,835

14,575

9,973

11,60010,971

15,923

12,001

16,013

15,913142,080

Private sector

6,924

5,578

5,245

4,517

4,921

6,205

5,733

7,144

6,943

8,396

7,973

71,188Overseas

18,52028,69026,90739,532

18,07921,772

24,27029,77923,93326,895

19,595

174,955

Public sector

14,236

14,445

14,09915,46913,76011,317

12,277

13,797

12,957

9,980

13,832

123,500

Private sector

6,040

6,079

5,025

5,468

4,942

5,963

5,792

6,299

6,146

7,078

8,320

74,286

Overseas

16,127

26,74826,56624,06931,17629,172

27,90425,88827,397

23,41922,261

198,759

Public sector

8,394

10,473

11,20910,316

6,528

6,811

5,505

7,631

6,675

12,707

14,788132,036

Private sector

3,709

3,208

3,428

2,477

2,455

2,698

2,639

3,484

4,281

5,598

5,251

46,884

Overseas

33,58435,52635,86751,32938,23130,832

27,19831,08927,625

31,101

28,436

253,893

SG&A (selling, general, and administrative expenses)

5,088

5,625

5,834

6,290

6,130

6,673

7,497

9,265

8,761

8,818

9,075

81,027

SG&A-to-sales ratio (%)

14.0%

11.9%

12.8%

14.0%

12.3%

14.4%

16.3%

20.1%

18.8%

21.8%

20.4%

20.4%

Depreciation

866

910

873

851

961

1,096

1,231

1,646

1,636

1,561

1,599

14,277

Capital investment

731

654

739

1,311

2,297

2,224

3,083

2,139

1,221

1,391

1,084

9,679

R&D expense

534

638

603

730

567

606

691

678

658

484

453

4,045

Cash flow from operations(5,218)

2,511

922

4,439

735

2,661

3,513

(4,086)(1,194)

5,000

6,496

58,000Cash flow from investments

(599)

578

(1,259)(3,084)(75)(1,269)(3,966)(4,498)

(345)

(415)

1,376

12,286

Cash flow from financial activities

2,355(1,465)

(669)

1,678

590

(2,371)

4,356

(112)

2,120

(1,624)(4,140)(36,964)6
Per share information

Net income per share (yen)

24.65

54.77

77.32

100.07

67.45

53.38

33.64

15.74

14.61

(88.13)56.15

0.5 dollars

Net assets per share (yen)1,084.65

1,010.45

931.13

1,105.50

1,097.71

1,112.29

1,172.56

1,209.10

1,308.22

1,179.57

1,221.94

10.9 dollars

7
Stock information

Dividends (yen)

13

15

17

20*

2

18

18

18

18

18

18

18

0.2 dollars

Payout ratio (%)

52.7%

27.4%

22.0%

20.0%

26.7%

33.7%

53.5%

−

−

−

32.1%

32.1%

(Fiscal years ended March 31)

1
Business
performance

2 Financial status

Net income or loss attributable to owners of the parent

Net salesby region

3
Breakdown oforders received,
net sales, andorder backlog

Orders received
by segment

Net salesby segment

Order backlog
by segment

4
Major expenditures

5 Cash flow

*1: U.S. dollar amounts have been translated from yen—solely for the convenience of the reader—at the rate of ¥112 to U.S.$1.00,
the exchange rate prevailing on March 31, 2017.
*2: Includes an additional 2-yen dividend commemorating Torishima’s 90th year of business.
Note: Figures on pages 25 to 28 have been calculated based on Japanese disclosure rules.

23

Torishima Report 2017

Torishima Pump Mfg. Co., Ltd.

24

Fiscal 2016 Financial Review

1Analysis of Consolidated Operating
Results

1. Fiscal 2016 Operating Results
The world economy in fiscal 2016 showed slowing growthagainst a background of a sluggish U.S. economy in the firstfiscal half and chaos in financial markets driven by fears ofdeceleration in the Chinese economy and the “Brexit shock.” In
the second fiscal half, the U.S. economy rebounded, the Chinese
government took measures to buoy the economy, and thecentral banks of major countries took prompt steps to deal
with Brexit, all of this resulting in mild recovery.
The Japanese economy also saw a mild recovery thanks to
improved employment and earnings situations, a bottoming outof resource prices in the second fiscal half, a halting of the yen’s
upward movement, a recovery in the international economy,
and rebounding exports and manufacturing in Japan.
But there is increasing uncertainty as to what the effect will beon the Japanese and world economies as the Trumpadministration seeks to pursue protectionist, “America first”
policies and enforce stricter immigration policies in the U.S.
In the pump industry, promising movement could be seen
amidst infrastructure building, particularly water-resourcerelated, to meet the needs of a growing world population, andthe construction of thermal power plants in response to revisedenergy policies. At the same time, the industry was strugglingon the orders front worldwide as projects mainly in the Middle
East slowed down due to declining oil demand and capital
investment in the private sector dropped off.
Against this background, the Torishima Group continued tofocus on developing, producing, and selling high-efficiency
pumps, pushing ahead with the sale of Eco-Pumps, promoting
new technologies to the public sector, and expanding its
maintenance service. As a result, orders for fiscal 2016 totaled¥43,483 million (84.8% of the ¥51,304 million in orders of theprevious year).
Broken down by customer type, public-sector orders were¥15,913 million (99.4% of the ¥16,013 million in the previous
fiscal year), domestic private-sector orders were ¥7,973 million(95% of the ¥8,396 million in the previous fiscal year), andorders from overseas were ¥19,595 million (72.9% of the¥26,895 million in the previous fiscal year).
Net sales for fiscal 2016 were ¥44,414 million (109.7% of the¥40,479 million reported for the previous fiscal year). Thebalance of orders outstanding at the end of fiscal 2016 andcarried over to the next year amounted to ¥48,476 million(98.1% of the ¥49,407 million in the previous fiscal year).

25

Torishima Report 2017

Operating income for the fiscal year was ¥1,462 million(compared with ¥373 million in the previous fiscal year). This
was thanks to an increase in net sales and an improvement ingross profit margin.
Ordinary income was ¥1,871 million (compared with an
ordinary loss of ¥1,663 million in the previous fiscal year). Thiswas due to factors including foreign exchange income of ¥126
million as non-operating income.
Net income attributable to owners of the parent company was¥1,532 million (compared to a net loss attributable to owners of
the parent company of ¥2,422 million in the previous fiscal
year). Reasons included a gain on sales of subsidiary stocks of¥168 million as extraordinary income and a loss on valuation of
investment securities of ¥103 million as extraordinary loss.

2. Forecast for Fiscal 2017 andthe New Medium-Term Business Plan
With the world’s population exceeding 7 billion, the securing
and effective use of water, food, and energy continues to present
global challenges. In response, it is expected that the world’s
water market will expand and more thermal power plants will
be constructed around the world to ensure a stable supply ofelectricity. In Japan, the business environment is expected tostabilize as maintenance service expands in response to the need
to upgrade aging infrastructure and as public works projects arecarried out to build infrastructure capable of withstanding
natural disasters.
Against this background, the Torishima Group formulated its
new medium-term business plan covering a three-year period
culminating in fiscal 2019, our 100th anniversary.
Under this plan, we aim to improve our fundamental strengths
to withstand external environmental factors and build a flexible
corporate infrastructure (mechanisms, people). Keys will be
developing world-leading products that offer energy efficiency,
safety, and reliability, and creating a business model to this end.
This will allow us to make our 100th anniversary of 2019 a newlaunching point for further growth.

2 Analysis of Financial Position
1. Consolidated Assets, Liabilities, and Net Assets
Assets on a consolidated basis at the end of fiscal 2016
amounted to ¥67,719 million, an increase of ¥1,521 million overthe previous fiscal year-end. This was primarily due to anincrease in cash and deposits (¥3,687 million increase over theprevious fiscal year-end) and a decrease in investment securities(¥1,660 million decrease over the previous fiscal year-end).

Targets of the New Three-Year Business Plan

(Millions of yen)

FY2017FY2018FY2019

Plan

Plan

Plan

Orders received

44,00046,00050,000Net sales

44,50045,50046,500Operating income

2,000

2,500

3,000

Ordinary income

2,500

3,000

3,500

Net income attributable to owners of the parent company

1,800

2,000

2,500

Note: These figures do not take into account the International Financial Reporting Standards (IFRS).

Liabilities on a consolidated basis at fiscal year-end amounted
to ¥34,006 million, an increase of ¥602 million yen over theprevious fiscal year-end. Despite a decrease in long-term debt
(down ¥4,055 million yen over the previous fiscal year-end),
there were increases in notes and accounts payable (¥1,193
million increase over the 2015 fiscal year-end), advances
received (¥1,179 million increase over the 2015 fiscal year-end),and short-term borrowings (¥868 million increase over the fiscal
2015 year-end).
Net assets on a consolidated basis at fiscal year-end were¥33,713 million, an increase of ¥918 million over the previous
fiscal year-end.

2. Consolidated Cash Flows
Consolidated cash and cash equivalents (hereinafter, cash) at
the end of the fiscal year amounted to ¥10,871 million, an
increase of ¥3,696 million over the previous fiscal year-end.
Note that the cash in the consolidated financial statements
includes ¥58 million in time deposits with maturities over threemonths.
Operating Cash FlowsNet cash provided by operating activities amounted to ¥6,496
million (compared to ¥5,000 million in the previous fiscal year).
Despite a decrease in net cash due to items such as an increasein trade receivable of ¥915 million yen (compared to a tradereceivable decrease of ¥3,471 million in the previous fiscal year),this was offset by an increase in net cash in the form of a trade
payable increase of ¥1,304 million (compared to a decrease of¥1,735 million in the previous fiscal year) and an increase inadvances received of ¥1,222 million (compared to an increaseof ¥1,421 million in the previous fiscal year).
Investing Cash FlowsNet cash provided by investing activities was ¥1,376 million(compared to net cash used in investing activities of ¥415
million in the previous fiscal year). Despite cash outflows due topurchases of property, plant, and equipment of ¥924 million
yen (compared to ¥1,109 million in the previous fiscal year), thiswas offset by cash inflows, including proceeds from sales ofinvestment securities of ¥2,524 million (compared to ¥1,449
million in the previous fiscal year).
Financing Cash FlowsNet cash used in financing activities amounted to ¥4,140 million(compared to net cash used in financing activities of ¥1,624
million in the previous fiscal year). Despite cash inflows that
included proceeds from long-term debt of ¥1,892 million(compared to ¥2,008 million in the previous fiscal year), thesewere offset by factors such as a decrease in short-termborrowings of ¥4,029 million (¥999 million in the previous fiscal
year) and cash outflows in the form of repayment of long-term
debt amounting to ¥1,000 million (compared to ¥1,729 million
in the previous fiscal year).

Policy for Allocation of Income, and3 Basic
Dividends for Fiscal 2016 and Fiscal 2017
It is the Torishima Group’s policy to pay shareholders
consistent dividends. In order to achieve further growth throughthe allocation of our profit, we aim to maintain a dividend
payout ratio of about 30%.
Our retained earnings are invested so that future growth isachieved in the most effective manner. Retained earnings areinvested to develop new technologies and new products that will
respond to the increasingly sophisticated needs of pumps,
related equipment, and software; to maintain existing pumping
facilities and stations; to develop more efficient, streamlined
production facilities; and to expand the scope of business into
environmental sectors for conserving the natural environment.
For fiscal 2016, the Torishima Group paid a regular interim
dividend of ¥9 per share. The focus of the year-end dividend of¥9 per share was to share business profits with shareholders.
The full-year dividend was thus ¥18 per share.
For fiscal 2017, a full-year dividend of ¥18 per share is planned.

Torishima Pump Mfg. Co., Ltd.

26

Consolidated Financial Statements(1) Consolidated Balance Sheet
Torishima Pump Mfg. Co., Ltd. and Consolidated Subsidiaries
Years ended March 31
Thousands of
U.S. Dollars*1

Millions of Yen

FY2016ASSETS

FY2017FY2017

Short-term investments¥ 7,175¥ 10,871

69

59

$

97,063527

FY2016FY2017FY2017

Short-term borrowings¥ 5,619¥ 1,580$ 14,107

Current portion of long-term debt

1,096

5,998

53,554

8,218

9,397

83,902

47

61

544

1,268

1,224

10,929

Payables:Receivables:
22,99923,665211,295

Unconsolidated subsidiaries and associated companies

85

48

429

Other

574

199

1,776

Trade

LIABILITIES AND EQUITYCURRENT LIABILITIES:CURRENT ASSETS:
Cash and cash equivalents

Thousands of
U.S. Dollars*1

Millions of Yen

Trade
Unconsolidated subsidiaries and associated companies
Other

(355)

(372)

(3,321)

Advances received from customers

3,202

4,381

39,116

9,288

8,996

80,321

Income taxes payable

196

337

3,009

Advance payments

243

418

3,732

Allowance for product warranties

654

848

7,571

Deferred tax assets

512

655

5,848

Allowance for losses on construction contracts

314

957

8,545

Other current assets

943

780

6,964

Accrued expenses

1,470

1,289

11,50941,53345,319404,634

44

129

1,152

22,12826,201

233,938

9,916

5,881

52,509Allowance for doubtful accounts
Inventories

Total current assets

Other current liabilities
Total current liabilities

PROPERTY, PLANT, AND EQUIPMENT:
Land

2,510

2,499

22,313

Buildings and structures

9,948

10,14290,553Long-term debt

Machinery and equipment

12,67013,115

117,098

Liability for retirement benefits

314

337

3,009

Deferred tax liabilities

701

1,221

10,902Other long-term liabilities

344

366

3,268

11,275

7,805

69,688

1,593

1,593

14,223

7,800

7,770

69,375

100

119

1,063

21,734

22,775203,348(1,671)(1,904)(17,000)

Unrealized gain on available-for-sale securities

801

1,833

16,366

Deferred gain on derivatives under hedge accounting

241

7

62

1,523

743

6,634

191

308

2,750

32,312

33,244

296,821

483

470

4,196

Construction in progress

69

71

634

Lease assets

644

644

5,750

25,841

26,471

236,348(15,752)(16,534)(147,625)

10,0899,937

88,723

Total
Accumulated depreciation
Net property, plant, and equipment

Total long-term liabilities
COMMITMENTS AND CONTINGENT LIABILITIESEQUITY:
Common stock,

INVESTMENTS AND OTHER ASSETS:
Investment securities

LONG-TERM LIABILITIES:

7,196

8,564

76,464authorized, 60,000 thousand shares; issued
29,889 thousand shares in 2017 and 2016

Investments in and advances to unconsolidated subsidiaries
4,548

1,533

13,688

Capital surplus

1,961

1,656

14,786

Stock acquisition rights

Asset for retirement benefits

173

375

3,348

Retained earnings

Deferred tax assets

51

53

473

Other assets

647

283

2,527

14,576

12,464111,286¥ 66,198¥ 67,720$ 604,643

and associated companies
SoftwareTotal investments and other assets
TOTAL

Treasury stock—at cost
2,781 thousand shares in 2017 and 2,581 thousand shares in 2016
Accumulated other comprehensive income:

Foreign currency translation adjustments
Defined retirement benefit plans
Total
Noncontrolling interests
Total equity
TOTAL

32,79533,714

301,017¥ 66,198¥ 67,720$ 604,643*1: U.S. dollar amounts have been translated from yen—solely for the convenience of the reader—at the rate of ¥112 to U.S.$1.00,
the exchange rate prevailing on March 31, 2017.

27

Torishima Report 2017

Torishima Pump Mfg. Co., Ltd.

28

Consolidated Financial Statements(2) Consolidated Statement of Operations(4) Consolidated Statement of Changes in Equity

Torishima Pump Mfg. Co., Ltd. and Consolidated Subsidiaries
Years ended March 31

Torishima Pump Mfg. Co., Ltd. and Consolidated Subsidiaries
Year ended March 31, 2017

Thousands of
U.S. Dollars*1

Millions of Yen

NET SALESCOST OF SALES
Gross profit
SELLING, GENERAL, AND ADMINISTRATIVE EXPENSES
Operating income
OTHER INCOME (EXPENSES) :Interest and dividend income
Interest expense
Loss on valuation of investment securities
Gain on redemption investment securities
Gain (Loss) on foreign exchange—net
Rent income
Equity in losses of associated companies
Gain on sales of subsidiaries
Gain on return of assets from retirement benefit trust
Settlement expense
Other—net
Other income (expenses) —net
INCOME (LOSS) BEFORE INCOME TAXESINCOME TAXES:
Current
Deferred
Total income taxes
NET INCOME (LOSS)NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTERESTSNET INCOME (LOSS) ATTRIBUTABLE TO OWNERS OF THE PARENTFY2016FY2017FY2017¥ 40,479
31,287
9,192
8,819
373

¥ 44,415
33,876
10,5399,076
1,463$ 396,563
302,464
94,09981,036
13,063

214
(176)
(7)
300
(1,395)138(1,076)
201
467
(337)
(117)
(1,788)(1,415)

338
(124)
(103)

3,018
(1,107)
(920)

(60)
474
1,937

(536)
4,232
17,295244
733
977(2,392)(30)¥ (2,422)

337
(59)
278
1,659
(126)
1,533

3,009
(527)
2,482
14,813(1,125)
13,688

126
145
(17)
169

¥

U.S. Dollars*1

FY2016FY2017FY2017(88.14)¥ 56.16
55.92
18.00

$ 0.50
0.50
0.16

18.00

Millions of Yen
Accumulated Other Comprehensive Income

IssuedForeign
Deferred
Unrealized
Number of Number ofCurrency
Loss onGain onDefinedShares of Shares of
Available-for- Derivatives Translation Retirement
Stock
Common Treasury Common Capital Acquisition Retained Treasury
under Hedge AdjustSale
BenefitStockments
Accounting
Stock Surplus
Earnings Stock
Securities
RightsStock
Plans
BALANCE, APRIL 1, 2015

29,889(2,402)¥1,593 ¥7,829¥110¥24,651 ¥(1,499)¥1,615¥(457)¥1,503¥725

Noncontrolling
Total Interests¥36,070

¥463

Total
Equity¥36,533

Net income attributable(2,422)to owners of the parent(2,422)(2,422)

Cash dividends,
(495)

(495)

(191)

(191)

(191)

19

29

29

(495)

¥18.00 per share
Purchase of treasury stock(210)

Disposal of treasury stock

31

10

Change in the parent’s
ownership interest
due to transactions

BALANCE, MARCH 31, 2016

(10)
29,889(2,581)¥1,593 ¥7,800

(39)

(39)

(39)

with noncontrolling interests
Net change in the year

Yen

PER SHARE OF COMMON STOCK:
Basic net income (loss)
Diluted net income
Cash dividends applicable to the year

1,125
1,295
(152)
1,509

Thousands¥100¥21,734 ¥(1,671)

(814)

698

20

(534)

(640)

20

(620)

¥801

¥241

¥1,523¥191¥32,312¥483¥32,795

Net income attributable
1,533

to owners of the parent

1,533

1,533

Cash dividends,
(492)

(492)

(240)

(240)

(240)

7

8

8

(492)

¥18.00 per share
Purchase of treasury stock(208)

Disposal of treasury stock

8

1

Change in the parent’s
ownership interest
due to transactions

BALANCE, MARCH 31, 201719
29,889(2,781)¥1,593 ¥7,770

(31)

(31)

(31)

with noncontrolling interests
Net change in the year

¥119

¥22,775 ¥(1,904)

1,032

(234)

(780)

117

154

(13)

141

¥1,833

¥7

¥743

¥308

¥33,244¥470¥33,714

Noncontrolling
Total Interests

Total
EquityThousands of U.S. Dollars*1
Accumulated Other Comprehensive Income(3) Consolidated Statement of Comprehensive Income
Torishima Pump Mfg. Co., Ltd. and Consolidated Subsidiaries
Years ended March 31
NET INCOME (LOSS)OTHER COMPREHENSIVE INCOME (LOSS):
Unrealized gain (loss) on available-for-sale securities
Deferred (loss) gain on derivatives under hedge accounting
Foreign currency translation adjustments
Defined retirement benefit plans
Share of other comprehensive loss in associates
Total other comprehensive income (loss)
COMPREHENSIVE INCOME (LOSS)TOTAL COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO:
Owners of the parent
Noncontrolling interests

Thousands of
U.S. Dollars*1

Millions of Yen

FY2016FY2017FY2017¥ (2,392)¥ 1,659$ 14,813

(814)
698
52
(534)
(1)
(599)
¥ (2,991)

1,032
(234)
(823)
117
(4)
88
¥ 1,7479,214(2,089)(7,348)
1,044
(36)
785
$ 15,598¥ (3,052)
61¥ 1,66780$ 14,884
714

DeferredForeign
Unrealized
Loss onCurrency
Gain onDefinedAvailable-for- Derivatives Translation Retirement
Stock
under Hedge AdjustCommon Capital Acquisition Retained Treasury
Sale
BenefitAccounting
ments
Stock Surplus
Earnings Stock
Securities
Rights
Plans
BALANCE, MARCH 31, 2016

$14,223 $69,643$893 $194,053 $(14,920)$7,152$2,151 $13,598$1,706 $288,499 $4,312 $292,811

Net income attributableto owners of the parent
Cash dividends, $0.16 per share
Purchase of treasury stock
Disposal of treasury stock

9

13,688

13,688

13,688(4,393)(4,393)(4,393)(2,143)(2,143)(2,143)

63

72

72

Change in the parent’s
ownership interest
due to transactions
with noncontrolling interests
BALANCE, MARCH 31, 2017

170
$14,223 $69,375

(277)

(277)

(277)

Net change in the year

$1,063 $203,348 $(17,000)

1,375

(116)

1,259

9,214

(2,089)(6,964)

1,044$16,366$62$6,634$2,750 $296,821 $4,196 $301,017*1: U.S. dollar amounts have been translated from yen—solely for the convenience of the reader—at the rate of ¥112 to U.S.$1.00,
the exchange rate prevailing on March 31, 2017.

29

Torishima Report 2017

Torishima Pump Mfg. Co., Ltd.

30

Consolidated Financial Statements
Global Network
Torishima has delivered products to more than 100 countries and today
our network of offices, factories, and service centers spans the globe.

(5) Consolidated Statement of Cash Flows
Torishima Pump Mfg. Co., Ltd. and Consolidated Subsidiaries
Years ended March 31
Thousands of
U.S. Dollars*1

Millions of Yen

OPERATING ACTIVITIES:
Income (Loss) before income taxes
Adjustments for:
Income taxes—paid
Income taxes—refunded
Depreciation and amortization
Loss on valuation of investment securities
Gain on redemption of investment securities
Gain on sales of subsidiaries
Gain on return of assets from retirement benefits trust
Equity in losses of associated companies
Changes in assets and liabilities:
Change in accounts receivables
Change in inventories
Change in advance payments
Change in accounts payables
Change in advances received from customers
Change in allowance for doubtful accounts
Change in allowance for product warranties
Change in allowance for losses on construction contracts
Change in liability for retirement benefits
Other—net
Total adjustments
Net cash provided by operating activities
INVESTING ACTIVITIES:
Increase in saving of time deposits
Proceeds from withdrawal of time deposits
Purchases of property, plant, and equipment
Proceeds from sales of property, plant, and equipment
Purchases of intangibles
Proceeds from sales of investments in consolidated subsidiarywith change in consolidation scope
Purchases of investment securities
Proceeds from sales of investment securities
Payments of loans receivableCollection of loans receivable
Other
Net cash provided by (used in) investing activities
FINANCING ACTIVITIES:
Change in short-term borrowings—net
Proceeds from long-term debt
Repayments of long-term debt
Purchase of treasury stock
Dividends paid
Purchase of shares of subsidiaries without change in scope of consolidation
Other
Net cash used in financing activities
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS
ON CASH AND CASH EQUIVALENTS
NET INCREASE IN CASH AND CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR
CASH AND CASH EQUIVALENTS, END OF YEAR

FY2016FY2017FY2017¥ (1,415)¥ 1,937$17,295

(155)
101
1,562
12
(300)
(201)
(467)
1,076

(264)
33
1,599
101
(169)

(1,509)

17

152

3,471
(505)
558
(1,174)
1,422
415
18
(122)
672
32
6,415
5,000

(915)
242
(186)
1,218
1,223
224
193
644
(13)
612
4,559
6,496

(8,170)2,161(1,661)
10,875
10,920
2,000
1,723
5,750
(116)
5,463
40,70558,000(19)
69(1,110)
145
(281)

(19)
30
(925)
27
(159)

(170)
268
(8,259)241(1,420)

(39)
2,524
(111)
24
25
1,377

(348)
22,536
(991)
215
223
12,295(75)(1,625)(4,030)1,892(1,148)
(240)
(492)
(87)
(35)
(4,140)(35,982)
16,893(10,250)(2,143)(4,393)(777)(312)(36,964)

(92)
2,868
4,307
¥ 7,175

(37)
3,696
7,175
¥ 10,871(331)
33,00064,063$97,06396(1,001)
1,449
249
(12)
(415)

Torishima Report 2017

Beijing, China
Beijing Representative Office

Bath, U.K.
Torishima Europe Projects Ltd.
Madrid, Spain
Torishima Europe Ltd.
Madrid Office

HEAD OFFICE
Osaka, Japan
Torishima Pump Mfg. Co., Ltd.

Gurgaon, India
Torishima Pumps (India) Pvt. Ltd.

Riyadh, Saudi Arabia
Saudi Arabian Representative Office

Bengaluru, India
Torishima Pumps (India) Pvt. Ltd.
Dubai, U.A.E.
Torishima Service Solutions FZCO /Middle East Sales Department
Abu Dhabi, U.A.E.
Middle East Project Branch
Doha, Qatar
Qatar Project Office

Massachusetts, U.S.
North America Branch

Saga, Japan
Kyushu Torishima Co., Ltd.

TaiwanTaiwan Branch
Hong Kong
Torishima (Hong Kong) Ltd.
Bangkok, Thailand
Torishima Service Solutions (Thailand) Ltd.
Singapore
Singapore Branch /Torishima Service Solutions Asia Pte. Ltd.

Dammam, Saudi Arabia
Torishima Service Solutions(Saudi Arabia) Ltd.

Mexico City, Mexico
Torishima Europe Ltd.
Mexico Office

Jakarta, Indonesia
P.T. Torishima Guna Engineering /P.T. Torishima Guna Indonesia /P.T. Geteka Founindo

Victoria, Australia
Torishima Australia Pty. Ltd.

Countries where Torishima has delivered products (more than 100)

Corporate Data

As of March 31, 2017

Torishima Pump Mfg. Co., Ltd.

Overseas Branches and Offices

Foundation: August 1, 1919

Singapore Branch
Middle East Project Branch (U.A.E.)
North America Branch (U.S.)
Taiwan Branch
Beijing Representative Office (China)
Saudi Arabian Representative Office
Qatar Project OfficePaid-in-capital: 1,592,775,030 yen
Outstanding shares: 29,889,079
Shareholders: 6,531(1,000)2,009(1,870)
(191)
(498)

*1: U.S. dollar amounts have been translated from yen—solely for the convenience of the reader—at the rate of ¥112 to U.S.$1.00,
the exchange rate prevailing on March 31, 2017.

31(2,357)295
14,277902

Tianjin, China
Torishima Pump (Tianjin) Co., Ltd.

Glasgow, U.K.
Torishima Europe Ltd. /Torishima Service Solutions Europe Ltd.

Employees: 1,580 (consolidated); 858 (non-consolidated)

Individuals andothers5,971,500 shares
19.98%

Treasury stock2,579,439
Financialsharesinstitutions
8.63%
9,238,448
shares30.91%

Major Japanese Bases
Head office: 1-1-8 Miyata-cho, Takatsuki City, Osaka
569-8660, Japan
Branch offices: Tokyo, Osaka, Sapporo, Sendai, Nagoya,Takamatsu, Hiroshima, Kyushu

Share Breakdown by
Type of Shareholder

Sales offices: Yokohama, Wakayama, Saga, Okinawa
Manufacturing Bases
Head office factory (Osaka, Japan)
Kyushu Torishima Co., Ltd. (Saga, Japan)
P.T. Torishima Guna Indonesia, P.T. Geteka Founindo(Jakarta, Indonesia)
Torishima Pump (Tianjin) Co., Ltd. (Tianjin, China)

Non-Japanesecompanies, etc.
5,039,891 shares
16.86%

Financial instrumentbusiness operators
281,377 shares
0.94%
Other companies
6,778,424 shares
22.68%Torishima Pump Mfg. Co., Ltd.

32