http://www.maruichikokan.co.jp/

HEAD OFFICE9-10, 3 Chome, Kitahorie,

Nishi-ku Osaka 550-0014, JAPANTelephone: +81-6-6531-0101Facsimile: +81-6-6543-0190

Printed in Japan

ANNUAL REPORT 2012For the year ended March 31, 2012

005_9039001372408.indd 1 2012/07/23 9:51:35

Contents

Disclaimer Regarding Forward-Looking StatementsPlans, strategies and other forward-looking statements about corporate performance published in this report are not based on information concerning events in the past, but are projections based on assumptions and convictions of company executives in light of currently available information. It should be noted that risks and uncertainties are associated with any forward-looking statements included in this report.

1 Consolidated Financial Highlights

2 Message from the Management

6 Medium-Term Management Plan

9 Product Overview

12 Network

14 Consolidated Financial Review

16 Consolidated Balance Sheets

18 Consolidated Statements of Income

19 Consolidated Statements of Comprehensive Income

20 Consolidated Statements of Changes in Net Assets

22 Consolidated Statements of Cash Flows

24 Notes to the Consolidated Financial Statements

43 Directory

44 Investor Information

Profile

Since its establishment in 1947, Maruichi Steel Tube Ltd. has concentrated on accumulating industry-leading technological expertise as a specialist in steel tube production. The Company’s progress has been underpinned by R&D focused on enhancing this core competence.

Maruichi Steel Tube’s network in Japan comprises 20 sales offices providing nationwide coverage, including affiliated companies, and 13 manufacturing plants and logistics centers operating in close proximity based on a business model emphasizing demand-driven production systems. Overseas, the Company has been developing a global business by establishing manufacturing companies in the United States, Indonesia, China, Vietnam and India. Additionally, through persistent efforts to increase the efficiency of manufacturing and logistics, the Company is sharpening the cost competitiveness of products.

Convinced that fulfillment of corporate social responsibility is both a duty and a vital ingredient of business success, Maruichi Steel Tube has put in place corporate governance systems based on the Companies Act. Also, the Company is strengthening its internal control in view of the Financial Instruments and Exchange Act, Japan’s version of the U.S. Sarbanes-Oxley Act (SOX), which accords the prime importance to internal control of financial reporting and is applicable to accounting periods started from April 2008 onward.

Maruichi Steel Tube’s shares, listed on the first sections of the Tokyo Stock Exchange and the Osaka Securities Exchange, have been included in the Nikkei 500 Average since April 2001, underlining the Company’s importance.

005_9039001372408.indd 2 2012/07/23 9:51:36

Consolidated Financial HighlightsMaruichi Steel Tube Ltd. and Consolidated SubsidiariesYears ended March 31

Milliones of yen

Thousands ofU.S. dollars

(Note)

2010 2011 2012 2012

For the year: Net sales ¥102,410 ¥115,758 ¥120,615 $1,467,515Operating income 10,556 16,506 15,601 189,813Income before income taxes and minority interests 12,052 18,853 15,795 192,183Net income 7,364 10,212 7,453 90,681

At year-end:Total assets ¥257,137 ¥258,573 ¥249,225 $3,032,310Net assets 217,533 218,512 214,382 2,608,376

Per share (Yen/U.S. dollars):Net income ¥ 84.49 ¥ 117.84 ¥ 87.36 $ 1.06Net assets 2,256.07 2,433.27 2,428.25 29.54

Ratio (%):Return on assets (ROA) 2.9 4.0 2.9Return on equity (ROE) 3.9 5.0 3.6

Note: U.S. dollar amounts have been converted for convenience only at the rate of ¥82.19=US$1, the rate of exchange on March 30, 2012.

Cons

olid

ated

Fin

anci

al H

ighl

ight

s

(Millions of yen)

Net Sales Net Income Total Assets (left scale)

ROA (right scale)

Net Assets (left scale)

ROE (right scale)

2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012

(Millions of yen) (Millions of yen) (Millions of yen) (%)(%)

0

30,000

60,000

90,000

120,000

150,000

0

2,000

4,000

6,000

8,000

10,000

12,000

0

50,000

100,000

150,000

200,000

250,000

300,000

0

1

2

3

4

5

6

0

50,000

100,000

150,000

200,000

250,000

0

2

4

6

8

10

1

010_9039001372408.indd 1 2012/08/01 13:57:01

Seiji YoshimuraChairman of the Board of Directors(Left)

Hiroyuki SuzukiPresident(Right)

Message from the ManagementM

essa

ge fr

om th

e M

anag

emen

t

As a leading pipe company, we will accelerate our efforts to expand our overseas businesses and develop new business areas.

The Maruichi Steel Tube Group has grown into a corporate organization considered by both shareholders and business associates to be an excellent corporation.

This was realized through the synergistic effects such as (1) independent and self-driven business, (2) a positive financial base, (3) demand driven production system, and (4) increase of value-added products.

Maruichi Steel Tube believes that its mission is to continuously develop these characteristics. It is expected that the environment surrounding the steel industry will continue to grow harsh in the future due to the severe

economic climate, but the company must resiliently grow and develop in spite of this situation. In order to quickly resolve these difficulties and make further leaps, the company will:

(1) Aggressively respond to more sophisticated and diverse customer needs(2) Create new demand for steel tubing by introducing new and unique Maruichi Steel Tube products(3) Create future Group growth and expansion by developing overseas businesses(4) Further improve shareholder value by continually improving business results.

Maruichi Steel Tube intends to do its absolute best to live up to shareholder expectations.The company is also keenly aware that it must work towards the following priority goals on a daily basis.

2

010_9039001372408.indd 2 2012/08/01 13:57:01

Mes

sage

from

the

Man

agem

ent

(1) Sales promotion, new product development, improvement of research and technical abilities(2) Increasing competitiveness by further reducing costs(3) Achieving a high standard quality level that will satisfy customers(4) Enacting our environmental management system (ISO14001)(5) Improving each individual employee’s abilities and setting challenging goals (6) Eliminating injuries and accidents

Maruichi Steel Tube will aim to become an even stronger company by diligently answering these challenges daily.The company sincerely asks everyone to continue giving their support, their advice and their cooperation.

Review of OperationsIn the fiscal year ended March 2012 (FY2012), as supply chains were restored, the Japanese economy gradually recovered from the massive blow of the Great East Japan Earthquake. However, the debt crisis in Europe, delays in the recovery of the U.S. economy, and global economic stagnation caused mainly by slowed economic growth in Asian developing countries, in addition to electrical power supply uncertainty due to the nuclear power plant accident, the long-standing strong yen, and damage caused by flooding in Thailand, muddied future prospects. While there are bright signs, such as business recoveries for some companies, the future situation remains uncertain.

In the domestic steel manufacturing industry, crude steel output slumped due to the Great East Japan Earthquake but demand increased accompanied with the nation’s recovery from the confusion following the disaster. However, because of a lack of growth in exports, partly due to the strong yen in FY2012, the output fell to 106.46 million tons (down 3.9% from the previous year).

JAPAnTurning to the Maruichi Group’s business in Japan, demand for automobiles, which had fallen significantly as a result of the Great East Japan Earthquake in the first half, recovered during the second half to pre-earthquake levels as supply chains were reestablished. However, demand for construction, which accounts for a large proportion of the Group’s earnings, remained low throughout the year because of the earthquake, despite hopes for a recovery, as it has been three years since the economic recession which began with the collapse of Lehman Brothers. In terms of product pricing, we raised the prices of all of our products during the period between April and June 2011 through shifting the increases of coil price hikes by blast furnace companies triggered by a rise in the prices of raw materials. Unfortunately, downward pressures, such as the earthquake and strong yen, strengthened in Japan, and international market prices also fell, causing a decline in the domestic steel tube product market and a continuing harsh market climate. As a result of the above, the Group’s business in Japan had net sales of ¥94,010 million and segment profit of ¥15,831 million.

noRtH AmeRicATurning to the Group’s business in North America, sales volume and product prices rose for the United States’ Maruichi American Corporation (MAC) and Maruichi Leavitt Pipe & Tube, LLC (Leavitt). In addition, the companies promoted improvement of manufacturing efficiency and cost reductions. As a result, the Group’s business in North America significantly improved with net sales of ¥12,670 million and segment profit of ¥720 million.

ASiATurning to the Group’s business in Asia, net sales for the Maruichi Sun Steel Joint Stock Company (SUNSCO) of Vietnam rose to ¥13,935 million due to increased sales volume. However, increased depreciation costs and amortization of goodwill, together with the slowing of the Vietnamese economy due to inflation, the flooding in Thailand, and decreased market prices in the region, etc. resulted in segment loss of ¥943 million.

With regard to the Group production facilities, in order to provide support for overseas business related to stainless steel tubes for automobiles, a dedicated steel tube mill (2” mill) was installed as a mother line in the Tokyo No. 2 Plant in April 2011. A second plant was added to the Sakai Pole Plant, and began operation in January of this year. Moreover, the Takuma Plant 3

010_9039001372408.indd 3 2012/08/01 13:57:01

completed an LNG satellite base in order to switch over from LPG to LNG to reduce CO2 emission, and has been actively engaged in environmental and cost reduction measures.

Meanwhile, outside Japan, SUNSCO in Vietnam began construction of continuous galvanizing line (CGL) No. 2 and color steel plate line (CCL) No. 2 in order to respond to increased demand. At Maruichi Metal Product (Foshan) Co., Ltd. (MMP), the Wuhan Plant was built to handle expanded manufacturing for Japanese automakers, together with the Tianjin Plant. Construction was completed in March of this year. At the Chicago Plant of Leavitt in the United States, a total overhaul of the 5” mills was completed in January of this year, and a mill (2” mill) for mechanical structure small-diameter steel tubes was installed to respond to automobile user demand. This installation was completed in February of this year, and the factory has begun shipping samples.

As mentioned above, consolidated net sales in FY2012 increased 4.2% from the previous fiscal year to ¥120,615 million, consolidated operating income decreased 5.5% from the previous fiscal year to ¥15,601 million, and consolidated net income decreased 27.0% from the previous fiscal year to ¥7,453 million.

Business StrategyLooking to the future, hopes are high for a gradual recovery of domestic steel demand, backed by investments related to Great East Japan Earthquake recovery work and measures to correct the strong yen. However, concerns regarding the debt crisis in Europe and increased crude oil prices, as well as electrical power cost hikes, power supply uncertainty due to the halting of nuclear reactors, and the hollowing out of the domestic market due to shifts to abroad by users, leave the future domestic economy’s prospects cloudy.

JAPAnWith regard to domestic business operations, because part of the Tokyo Plant’s land will be expropriated for construction of the Tokyo Outer Ring Road, we are working to aggregate Tokyo Plant functions in the Tokyo No. 2 Plant and reconstruct an efficient production system. Recovery demand in response to the Great East Japan Earthquake is expected to gain momentum in the future, primarily for building construction, so the Pole Division newly established a Sendai Pole Department, and began construction work on the Kitakami Processing Center scheduled to be completed in August 2012 for stocking, cutting, and delivery of steel tubes for automobiles, in alignment with increased production by automobile manufacturers in the Tohoku region. Meanwhile, Maruichi Kohan Ltd. will also open an office in Kitakami, Iwate Prefecture in August of this year. At the same time, it will also strengthen sales by overhauling its column inventory and cutting edge preparation system in Kanto area.

noRtH AmeRicATurning to the business in North America, the Chicago Plant of Leavitt in the United States, focusing on shale gas development in Canada and the northern United States, will use its excess pipe production capacity of the 10” square pipe line to make API (American Petroleum Institute) certified line pipe production possible as part of its investment in facility overhauls. This work is scheduled for completion in October 2012. Its goals are not merely for producing tubes and pipes for use in conventional construction applications, but also market expansion into the automobile and energy fields. Meanwhile, MAC has taken the lead in establishing Maruichimex in Aguascalientes, Mexico, a planned future production site for Japanese automobile manufacturers. Construction work has commenced and its completion is scheduled for November 2012.

ASiATurning to the business in Asia, the Vietnamese economy remains unstable, but SUNSCO plans to stabilize facility operation and strengthen sales capabilities to succeed in full-fledged API certified line pipe business development using its 16” mill, complementing demand and expansion of share for Vietnamese infrastructure and construction materials, which show promise of future growth, and launching of continuous galvanizing line (CGL) No. 2 and color steel plate line (CCL) No. 2 (the completion of these lines is scheduled for June 2013, costing a total of US$100 million). In addition to acquiring API certification, SUNSCO is enhancing its roles as a steel pipe/steel plate production and sales facility for Japanese companies by acquiring JIS certification. In Hanoi, it will invest in the establishment of an on-site production system for steel pipes for motorcycles and stainless steel tubes for automobile exhaust pipes.

Mes

sage

from

the

Man

agem

ent

4

010_9039001372408.indd 4 2012/08/01 13:57:01

Mes

sage

from

the

Man

agem

ent

At MARUICHI KUMA STEEL TUBE PRIVATE LIMITED (KUMA) in India, progress is underway in the construction of a new plant in Chennai, a city in southeastern India. Construction is scheduled to be completed during the first half of 2013. KUMA is also manufacturing ordinary automotive steel pipes and tubes, and is working to expand its business fields.

At MMP in China, under the three-plant system of the Foshan, Tianjin, and Wuhan plants, the company will handle expansion of production by Japanese auto manufacturers, while at the same time collaborate with consolidated subsidiary Alpha Metal to expand the automotive steel tube processing business.

Increasing Shareholder ValueMaruichi Steel Tube has been fully aware of the importance of dividends to shareholders and heretofore has been distributing fixed and stable dividends from profits. The results-linked dividends policy was introduced from FY2005. During the Board of Directors meeting held on August 5, 2011, we changed part of the basic policy regarding profit-sharing and decided on and announced a policy based on “assuming current tax rates, and issuing an annual dividend equivalent to 40% of expected net income for the fiscal year, which is assumed to be 60% of the ordinary income indicated in non-consolidated statements of income.” In addition, the company’s policy is to maintain an annual payout of at least 25 yen per share dividends to ensure dividends are stable at previous levels. Additionally, portions of the company’s articles of incorporation were changed at the annual shareholders meeting held in June 2006. March 31 was designated as the date-of-record for year-end dividend distribution and September 30 was designated as the date-of-record for interim dividend distribution. Furthermore, a purchase of 1.20 million of our own shares as treasury stock (¥2,352 million) was conducted during FY2012 in order to further improve earnings per share (EPS). Meanwhile, we have held plant tours for individual shareholders since May 2008, which will be held in Kanto area this year as well.

If the Maruichi Group is to achieve further business growth as an independent specialized steel tube maker, it must constantly tackle the challenge of enhancing its competitiveness by improving productivity and efficiency, and by making strategic investments that expand business operations. As upgrading and expanding production facilities and distribution networks is essential for meeting this challenge, the company has systematically made active investments directed at honing its competitive edge. We believe that securing internal reserves in preparation for pursuing strategic businesses and making strategic capital investment is critical to ensuring constant profits for our shareholders.

In FY2012, Maruichi Steel paid an interim dividend of ¥20.00 per share. The company’s Board of Directors, meeting on May 10, 2012, resolved to pay an annual dividend of ¥48.50 per share, including a term-end dividend of ¥28.50. During the Board of Directors meeting on May 10, 2012, we changed part of the basic policy regarding profit-sharing and decided on a policy based on “an annual dividend equivalent to 40% of expected net income for the fiscal year, which is assumed to be 62.2% of the ordinary income indicated in non-consolidated statements of income.” In addition, since the company’s policy is to maintain an annual payout of at least 25 yen per share to ensure dividends are stable at previous levels, the company plans to make payout for FY2013 in accordance with this policy.

We look forward to the continued support and guidance of our shareholders.

June 2012

Seiji YoshimuraChairman of the Board of Directors

Hiroyuki SuzukiPresident

5

010_9039001372408.indd 5 2012/08/01 13:57:01

2. Results of Principle measures of 2nd medium-term management Plan

■ Promotion of further streamlining of domestic businesses•Additional construction of mechanical structure steel tube mill at Tokyo No. 2 Plant•Decision to construct a cutting plant in Kitakami City, Iwate•Made Alpha Metal, an automotive parts manufacturer, a consolidated subsidiary

■ enhancement and expansion of overseas businesses•Launch of operations at the 16’’ mill of Maruichi Sun Steel Joint Stock Company (SUNSCO) of Vietnam and Hanoi Plant of Maruichi Sun Steel (Hanoi) Company Limited, and commencement of construction on the second CGL/CCL of SUNSCO of Vietnam

•Launch of operations at the Tianjin Plant, and construction of the Wuhan Plant for the Maruichi Metal Product (Foshan) Co., Ltd. (MMP) in China

■ Aggressive development in new business fields•Entry into the stainless steel pipe business through the acquisition of KUMA in India•Renovation of facilities to streamline operations, and expansion of the business into the automotive steel pipe field and API (American Petroleum Institute) certified products in North America

•Decision of entry into the automotive steel pipe business in Mexico■ Aggressive environmental action

•A focus on environmental efforts, such as reducing CO2 emissions in Japan.•Electricity-saving efforts following the earthquake.

■ Promotion of capital efficiency•Continuing the shareholder-focused capital policy.

These are major initiatives we have taken up until now.

Medium-Term Management Plan

2nd medium-term management Plan Results FY 2010 Results FY 2011 Results FY 2012 Results

Net sales 102.4 115.7 120.6Operating income 10.6 16.5 15.6Ordinary income 12.1 18.6 17.6Net income 7.3 10.2 7.4Net income per share (yen) 84.49 117.84 87.36Return on equity (%) 3.9 5.0 3.6

3rd medium-term management targets FY 2015 Targets

Net sales (foreign net sales ratio) 160.0 (35%)Operating income (foreign operating income ratio) 20.0 (20%)Ordinary income 22.0Net income 12.0

The company has been steadily implementing the principle measures of the second medium-term management plan since April 2009, but the results fell substantially short of the targets for net sales and income both in Japan and globally due to factors like the slowdown in the global economy following the Lehman Shock, the earthquake and power shortage last year and the sharp appreciation of the yen. In the midst of these difficult management circumstances, the company will launch the third medium-term management plan in April in order to solidify its position as a top steel tube company in Japan and around the world by continuing to promote further streamlining of domestic businesses, strengthening of sales and aggressive overseas operations.

1. Results of 2nd medium-term management Plan and targets of 3rd medium-term management Plan(Billions of yen)

Med

ium

-Ter

m M

anag

emen

t Pla

n

(Billions of yen)

6

010_9039001372408.indd 6 2012/08/01 13:57:01

Med

ium

-Ter

m M

anag

emen

t Pla

n

Principle Issues Measures1) Promotion of further streamlining in domestic

businesses

(1) Restructuring of domestic production system(1) Consolidation of Tokyo Plant into Tokyo No. 2 Plant(2) Relocation of excess domestic facilities to other countries(3) Assignment of the right human resources

(2) Strengthening of domestic sales system

(1) Strengthening of group sales capabilities(2) Aggressive efforts to meet reconstruction demand

Pole Division: Opening of Sendai Pole Dept. (April 2012)Maruichi Kohan: Opening of office in Kitakami City, Iwate (August 2012)Column inventory, cutting edge preparation and strengthen-ing of sales in Kanto area

(3) Development in new fields

(1) Entry into stainless steel pipe field (have stainless steel pipe line at Tokyo No. 2 Plant support overseas business as mother line)

(2) Solar power generation effortsConsideration of commercializing mega solar power genera-tion (Takuma Plant) and entry into frame fabrication/con-struction market

(3) Entry into deformed pipe field through Toyo Superior Steel Tube Works

(4) Energy savings, reduction of CO2 emissions and develop-ment of disaster-resistant system

(1) Aggressive action on energy savings and reduction of CO2 emissions, liquefaction/tsunami measures

2) expansion of foreign sales and strengthening of profitability by focusing investments on highly promising Asian region, strengthening automotive field as it shifts heavily towards overseas production and launching energy-related products

(1) Vietnam: Significant expansion of SUNSCO steel pipe and steel plate businesses

(1) Full-scale deployment of API business via 16” mill and creation of building material demand in Vietnam

(2) Successful launch of second CGL/CCL(3) Improvement of facility operation rate and expansion of

production volume through stable operation(4) Moving into the black through full scale motorcycle

operations in Hanoi and launching of local production of stainless steel pipes

(5) Fulfilling of role as steel pipe/steel plate production and sales facility for Japanese companies by acquiring JIS certification

(2) China: Expansion of MMP business

(1) Handling of production expansion at Japanese automobile manufacturers

(2) Expansion of parts processing business through collaboration with Alpha Metal

(3) United States: Development of Leavitt automobile and API businesses

New MAC business expansion

Launch of automotive business in Mexico

(1) Leavitt: Strengthening of management foundation and improvement of profitability through shift from focus on steel tubes for architecture structural purposes to automotive/API steel pipes

(1) MAC: Equipment replacement. Expansion of share on west coast

(1) Launch of operations at automotive steel pipe plant in Mexico (Maruichimex)

3. Basic Philosophy and Principle measures of 3rd medium-term management Plan

7

010_9039001372408.indd 7 2012/08/01 13:57:01

Med

ium

-Ter

m M

anag

emen

t Pla

n

(4) India: Launch of operations at Chennai Plant and launch of ordinary automotive steel pipe and tube business

(1) Maintenance of overwhelming share in automotive stainless steel pipe market

(2) Expansion of business fields by manufacturing ordinary steel pipes and tubes for Japanese automobile manufacturers

(5) Indonesia: Expansion of automotive steel pipe business(1) Handling of full-scale entry of Japanese automobile

manufacturers Proactive handling of local steel tube procurement needs

(6) Consideration of new operations to handle overseas shift by Japanese automobile manufacturers

(1) System enhancement in China, Indonesia and India, launch of production for automobiles in USA and entry into Mexican market

(2) Utilization of Alpha Metal parts processing technology in overseas businesses

(3) Unification of domestic/international sales system Securing of business deals overseas through quick ascertainment of overseas operational information and collaboration with overseas subsidiaries

(4) New development of automotive stainless steel pipe business(5) Utilization of Maruichi brand in steel pipe business:

Additional consideration of Leavitt/SUNSCO name change

(7) Strengthening of overseas business of Toyo Superior Steel Tube Works

(1) Support for and strengthening of business in China and consideration of setting up operations in other overseas regions

(8) Improvement of management of overseas subsidiaries

(1) Early completion of management system for overseas subsidiaries (SUNSCO and KUMA)

(2) Conversion of KUMA, new Mexican company into consolidated subsidiary

(3) Delivery of returns to head office through dividends and royalties from overseas subsidiaries

(9) Strengthening of alliance with Australia-based ATM3) Quick development of overseas human resources

(groundwork for globalization)

(1) Quick development of human resources corresponding to full-scale launching of overseas operations

(1) Aggressive dispatching of young human resources overseas. Overseas dispatching for language study and training

(2) Development of human resources that can perform overseas

(2) Quick development of local human resources (1) Promotion of quick development and advancement of local human resources and technology transfer

4) continuation of shareholder-focused capital policy (1) Maintenance of high shareholder return ratio

*For details of the third medium-term management plan, please refer to the press release of the Company dated March 7, 2012 posted on our website (http://www.maruichikokan.co.jp/english/).

8

010_9039001372408.indd 8 2012/08/01 13:57:01

Product Line Cross

Section

Public Standards

JIS ASTM BS API OTHERMaruichi’s

Own SpecsAvailable Size Range

(in mm unless otherwise specified)

ERW GeneralStructural andBuilding StructuralTube

G3444 21.7x1.9~508.0x19.0

G3466 50x50x1.6~400x400x19.0

BCR 150x150x6.0~400x400x19.0

GreenHouse GH 12.7~48.6

A 500 1/2”x1/2”x0.039”~16”x16”0.625”

ERW MechanicalTube

G3445 8.0x0.6~76.2x3.5

STKMRK 11x11x1.0~70x25x2.0

STKMRR 12x12x1.0~80x40x2.0

STKMRS 25x25x2.3~90x45x3.2

ERW Pipe Piling A5525 318.5x6.9~508.0x19.0

ERW Gas / Water Pipe

G3452 6A~500A

G3454 15A~500A (Sch 40)

A53 1/8”~20”

1387 1/4”~6”

ERW OCTG andLine Pipe

5CT Casing 4-1/2”~20”Tubing 1.050”~2-7/8”"

5L Line Pipe 1/2”~20”

ERW ElectricalConduit

C8305Thick G16~G104

Thin C19~C75Threadless E19~E75

ANSI C80.1ANSI C80.3

1/2”~6” IMC 1/2”~4”EMT 1/2”~2”"

31 3/4”~2”

4568 20~32

Tapered Pole andOther FabricatedProducts

JIL 1001 4.5m~12m in height asstandard

All of the company’s steel tubes are manufactured at plants whose scrupulous quality management systems cover every phase of the transformation of raw materials into finished products.

Products are only shipped after they pass rigorous inspections to certify that they satisfy JIS and other international standards corresponding to their intended use.

Product Overview

Maruichi Product Lines at a Glance

Prod

uct O

verv

iew

9

010_9039001372408.indd 9 2012/08/01 13:57:02

The company’s strength-certified structural steel tube products fulfill vital roles in diverse fields, including architecture, civil engineering and machinery, while contributing to industrial development.

Our structural steel tubes are currently used as structural columns for buildings ranging from low-rise to high-rise, scaffolding tubes and greenhouses, as well as in other construction and civil engineering fields.

In September 2002, the company started manufacturing highly corrosion-resistant 55% aluminum-zinc plated structural steel tube products for use in agricultural facilities.

Before piping materials for steam, water, gas and oil are shipped to customers, they must undergo rigorous inspections to certify that they meet JIS and other international standards corresponding to their intended use.

The company’s electrical cable conduits undergo hotdip galvanization on both sides of the tube to ensure both the wire and the cable are protected for a long period of time.

These products are widely applied in plant construction projects and power generation plants around the world.

General Structural and Building Structural Tubes

Water Pipes, OCTGs and Electrical Conduits

Prod

uct O

verv

iew

(Left)Structural columns place(Below)Green house framing

10

010_9039001372408.indd 10 2012/08/01 13:57:02

Steel tubes are integral to automobiles, motorcycles, bicycles, medical equipment, fitness machines, office automation equipment, office and educational furniture, among other products, and the company’s high-precision products fulfill numerous useful roles for individuals and society.

In particular, cutting-edge technology is essential for steel tubes for automotive applications, including high tensile steel (440N-1470N), in view of automakers’ ever increasing demands for lighter, stronger products at lower cost. Maruichi Steel Tube rises to the challenge by deploying expertise accumulated over the past fifty years in combination with the latest technology available.

Steel structures, such as lamp posts, road signs, traffic lights and security barriers, ensure safety while creating aesthetically pleasing cityscapes or blending with the landscape. They are becoming increasingly important in contemporary society as highway networks are extended to provincial cities, high-density urban areas with numerous high-rise buildings proliferate, new towns are constructed, and environments are enriched to suit aspirational lifestyles.

Our integrated management system encompasses design, fabrication and installation of these steel-pole products. We take pride in satisfying the most exacting safety standards for this vital infrastructure that contributes to the quality of life for everyone.

Mechanical Tubes

Maruichi Poles and Other Fabricated Products

Prod

uct O

verv

iew

11

010_9039001372408.indd 11 2012/08/01 13:57:03

Domestic Network

12

234

56 7

89101112

13

14

1

345

6

7

8

1

4

2

5

3

6 7

Network Strategically Located Manufacturing Facilities and Sales NetworkN

etw

ork

8

11

9

12

10

13

14

Maruichi Steel Tube Ltd. Head Office/Maruichi Kohan Ltd. Head Office/Maruichi Investment Ltd.Sapporo OfficeTokyo OfficeNagoya OfficeOsaka OfficeHiroshima OfficeFukuoka OfficeOkinawa Maruichi Ltd. Main Office

Hokkaido Maruichi Steel Tube Ltd. Tomakomai PlantKashima Pole PlantTokyo PlantTokyo No.2 PlantNagoya PlantOsaka PlantKasuga Industry Ltd.Sakai PlantSakai Pole PlantShikoku Maruichi Steel Tube Ltd. Tachibana PlantTakuma PlantShikoku Maruichi Steel Tube Ltd. Shikoku PlantKyushu Maruichi Steel Tube Ltd. Kyushu PlantAlpha Metal Co., Ltd.

1

7

2

8

3

9

4

10

5

11

6

12

13

14

1

2

3

4

5

6

7

8

•Hokkaido Maruichi Steel Tube Ltd.Manufacture of steel tube and steel pole products (products from this company are sold by Maruichi Steel Tubes Ltd. and shipped to the Hokkaido and Tohoku regions of Japan via Maruichi Kohan Ltd., the sales subsidiary of the Group)•Kyushu Maruichi Steel Tube Ltd.Manufacture of steel tubes (products of this company are sold by Maruichi Steel Tubes Ltd. and shipped to the Okinawa, Kyushu and part of the Chugoku regions of Japan via Maruichi Kohan Ltd., the sales subsidiary of the Group)•Shikoku Maruichi Steel Tube Ltd. Manufacture of steel tube products•Kasuga Industry Ltd.Cutting of steel tubes and distribution of accessory products for electrical conduits•Maruichi Kohan Ltd.A trading division of the Maruichi Group that specializes in the sale of steel tubes manufactured by the Group•Okinawa Maruichi Ltd.Sales and distribution of steel tube products as well as materials for water and electrical systems•Maruichi Investment Co., Ltd.Operation and management of the Maruichi Business Fund•Alpha Metal Co., Ltd.Manufacturing and sales of automobile parts, etc.

12

010_9039001372408.indd 12 2012/08/01 13:57:06

Overseas Network

1

3

5

7 8 10

6

9

4

2

5

6

7

8

9

10

Maruichi American Corporation (MAC)California, U.S.AMaruichi Leavitt Pipe & Tube, LLC (Leavitt)Illinois, U.S.APT. Indonesia Steel Tube Works (ISTW)Jakarta, IndonesiaPT. Indonesia Steel Tube Works (ISTW)Semarang, IndonesiaMaruichi Metal Product (Foshan) Co., Ltd. (MMP)Guangdong, ChinaMaruichi Metal Product (Tianjin) Co., Ltd.Tianjin, ChinaMaruichi Sun Steel Joint Stock Company (SUNSCO)Binh Duong Province, VietnamMaruichi Sun Steel (Hanoi) Co., Ltd.Vinh Phuc Province, VietnamMARUICHI KUMA STEEL TUBE PRIVATE LIMITEDHaryana, IndiaJ-Spiral Steel Pipe Co., Ltd.Long Thanh, Vietnam

1

2

3

4

5

6

7

Net

wor

k

•Maruichi American Corporation (MAC)US-based subsidiary that manufactures and sells steel tube products to US West Coast markets•Maruichi Leavitt Pipe & Tube, LLC (Leavitt)Manufacture and sales of steel tube products•PT. Indonesia Steel Tube Works (ISTW)Manufacture and sales of steel tube products•Maruichi Metal Product (Foshan) Co., Ltd. (MMP)Manufacture and sales of steel tubes and steel sheets•Maruichi Metal Product (Tianjin) Co., Ltd.•Maruichi Sun Steel Joint Stock Company (SUNSCO)Manufacture and sales of steel tube and galvanized/color steel sheet•Maruichi Sun Steel (Hanoi) Co., Ltd.•MARUICHI KUMA STEEL TUBE PRIVATE LIMITEDManufacturing and sales of stainless steel tube and aluminized steel tube•J-Spiral Steel Pipe Co., Ltd.Manufacturing and sales of steel pipe pile and steel pipe sheet pile

1

4

2

3

8

9

10

13

010_9039001372408.indd 13 2012/08/01 13:57:07

Consolidated Financial ReviewCo

nsol

idat

ed F

inan

cial

Rev

iew

Results of Operations

Net Sales and Operating Income

Net sales increased 4.2% from the previous year to ¥120,615 million. Cost of sales increased 5.8% from the previous year to ¥94,136 million. Consequently, the cost of sales ratio was 78.0%.

Furthermore, selling, general and administrative expenses increased 6.0% to ¥10,878 million and this represents 9.0% on a percentage-of-sales basis. As a result, operating income decreased 5.5% to ¥15,601 million.

Operating results by region

JapanNet sales were ¥94,010 million and segment profit was ¥15,831 million.

North AmericaNet sales were ¥12,670 million and segment profit was ¥720 million.

AsiaNet sales were ¥13,935 million and segment loss was ¥943 million.

Other Income, Expense, and Net Income

Other income and expense resulted in income of ¥194 million in FY2012 (income of ¥2,347 million in the previous fiscal year). This was mainly due to interest and dividend income of ¥1,573 million, equity in earnings of affiliated companies, etc. of ¥610 million, and loss on impairment of ¥1,828 million. As a result, we posted net income of ¥7,453 million (net income of ¥10,212 million in the previous fiscal year).

Analysis of the Financial Situation

Total assets at the end of FY2012 decreased by ¥9,347 million to ¥249,225 million.Current assets increased by ¥1,582 million to ¥125,092 million. This was mainly due to a ¥3,717 million increase in cash

and bank deposits, even though short-term investments declined by ¥2,183 million.Non-current assets decreased by ¥10,929 million to ¥124,134 million. This reduction was mainly attributable to a ¥7,842

million decrease in investments in securities due to the decline in unrealized holding gains on available-for-sale securities resulting from the decrease of value in stock market, and a ¥1,829 million decrease in goodwill due to impairment of non-current assets at our Vietnamese subsidiary.

Total liabilities at the end of FY2012 decreased by ¥5,218 million to ¥34,843 million. This decrease was mainly attributable to a ¥2,436 million decrease in trade notes and accounts payable, and a ¥2,113 million decrease in deferred tax liabilities due to the decline in stock prices.

Looking at net assets, retained earnings increased by ¥3,026 million, which comes from net income of ¥7,453 million despite payments of ¥4,427 million in dividends. However, treasury stock increased by ¥2,353 million (decrease in net assets), unrealized holding gains on available-for-sale securities decreased by ¥3,000 million due to the decline in stock prices, foreign currency translation adjustments decreased by ¥1,022 million, and minority interests declined by ¥796 million. As a result, total net assets decreased by ¥4,129 million to ¥214,382 million.

Ratio of Net Sales by Region

Asia11.6%

North America10.5%

Japan77.9%

14

011_9039001372408.indd 14 2012/07/31 10:04:31

Cons

olid

ated

Fin

anci

al R

evie

w

Cash Flows

Cash and cash equivalents (hereinafter “cash”) at the end of FY2012 decreased by ¥943 million from the previous fiscal year to ¥38,673 million. The results of the various activities and their respective causes are outlined below.

Cash Flows from Operating Activities

Cash flows provided by operating activities decreased to ¥12,626 million (¥1,722 million down from the previous fiscal year). Major cash inflows included income before income taxes and minority interests of ¥15,795 million, along with non-monetary expenditures, including depreciation and amortization of ¥5,526 million and loss on impairment of ¥1,828 million. Major cash outflows included decrease in trade payables of ¥2,315 million and income taxes paid of ¥7,098 million.

Cash Flows from Investing Activities

Cash flows used in investing activities were ¥6,486 million (¥16,679 million down from the previous fiscal year). This was mainly due to cash inflow of ¥2,189 million from proceeds from sales of investments in securities and investments in affiliated companies. Major cash outflows included ¥2,223 million from increase in time deposits with original maturities over three months and ¥5,759 million from payments for purchases of property, plant and equipment.

Cash Flows from Financing Activities

Cash flows used in financing activities were ¥6,874 million (¥2,914 million up from the previous fiscal year). This was mainly due to cash outflows of ¥4,427 million from dividends paid and ¥2,353 million from payments for purchases of treasury stock.

Cost of Sales Ratio Ratio of Selling, General and Administrative Expenses

Net Income per Share Net Assets per Share (left scale)

Equity Ratio (right scale)

2010 2011 2012 2010 2011 2012 2010 2011 2012 2010 2011 2012

(%) (%) (Yen) (Yen) (%)

75

76

77

78

79

80

8.0

8.5

9.0

9.5

10.0

0

20

40

60

80

100

120

0

500

1,000

1,500

2,000

2,500

50

60

70

80

90

100

15

011_9039001372408.indd 15 2012/07/31 10:04:31

16

Consolidated Balance SheetsMaruichi Steel Tube Ltd. and Consolidated SubsidiariesAs of March 31, 2012 and 2011

Millions of yen

Thousands ofU.S. dollars

(Note 1)

2012 2011 2012

ASSETS

Current assets:Cash and bank deposits (Notes 4 & 11) ¥ 57,983 ¥ 54,265 $ 705,472 Short-term investments (Notes 5 & 11) 13,037 15,221 158,636 Trade notes and accounts receivable (Notes 6 & 11) 29,896 29,616 363,744 Less allowance for doubtful accounts (232) (251) (2,825)Inventories (Note 7) 20,852 21,217 253,707 Deferred income taxes (Note 10) 1,064 1,240 12,949 Others 2,492 2,202 30,302

Total current assets 125,092 123,510 1,521,985

Investments and advance:Investments in securities (Notes 5 & 11) 44,716 51,903 544,052 Investments in unconsolidated subsidiaries and affiliated companies 8,128 8,782 98,892 Others 3,209 3,454 39,048 Less allowance for doubtful accounts (49) (84) (591)

Total investments and advances 56,004 64,055 681,401

Property, plant and equipment (Notes 8 & 13):Land 29,922 29,890 364,059 Buildings and structures 38,721 38,342 471,118 Machinery and equipment 78,627 77,499 956,646 Construction in progress 3,262 2,515 39,689 Leased property under finance lease 2 1 20

150,534 148,247 1,831,532 Less accumulated depreciation (85,651) (83,331) (1,042,102)

Total property, plant and equipment 64,883 64,916 789,430

Other assets:Deferred income taxes (Note 10) 1,515 2,180 18,430 Goodwill 149 1,978 1,814 Others 1,582 1,934 19,250

Total other assets 3,246 6,092 39,494

Total assets ¥249,225 ¥258,573 $3,032,310

The accompanying notes are an integral part of these financial statements.

Cons

olid

ated

Bal

ance

She

ets

012_9039001372408.indd 16 2012/08/01 13:47:24

17

Millions of yen

Thousands ofU.S. dollars

(Note 1)

2012 2011 2012

LIABILITIES AND NET ASSETS

Current liabilities:Short-term bank loans (Notes 8 & 11) ¥ 5,662 ¥ 5,617 $ 68,885 Payables

Trade notes and accounts (Note 11) 11,729 14,165 142,708 Construction 630 339 7,663 Other 874 1,586 10,640

Accrued income taxes (Note 10) 4,381 3,897 53,300 Accrued bonuses to employees 833 852 10,139 Accrued bonuses to directors and corporate auditors 67 62 811 Accrued expenses 1,599 1,579 19,459 Others 530 853 6,446

Total current liabilities 26,305 28,950 320,051

Long-term liabilities:Long-term debt (Notes 8 & 11) 4,395 4,759 53,473 Accrued retirement benefits to directors and corporate auditors 37 56 457 Accrued retirement benefits (Note 9) 3,021 3,029 36,750 Deferred income taxes (Note 10) 467 2,581 5,686 Others 618 686 7,517

Total long-term liabilities 8,538 11,111 103,883

Total liabilities 34,843 40,061 423,934

Contingencies (Note 14)

Net assets (Note 15):Shareholders’ equity

Common stockauthorized: 200,000,000 shares in 2012 and 2011issued: 94,000,000 shares in 2012 and 2011 9,595 9,595 116,744

Additional paid-in capital 15,822 15,822 192,504 Retained earnings 205,332 202,306 2,498,264 Less treasury stock at cost

8,774,775 shares in 2012 and 7,574,237 shares in 2011 (19,750) (17,397) (240,304)Total shareholders’ equity 210,999 210,326 2,567,208

Accumulated other comprehensive incomeUnrealized holding gains on available-for-sale securities (Note 5) 3,514 6,515 42,761 Foreign currency translation adjustments (7,565) (6,543) (92,044)

Total accumulated other comprehensive income (4,051) (28) (49,283)

Minority interests 7,342 8,138 89,333 Stock options (Note 16) 92 76 1,118

Total net assets 214,382 218,512 2,608,376

Total liabilities and net assets ¥249,225 ¥258,573 $3,032,310

Cons

olid

ated

Bal

ance

She

ets

012_9039001372408.indd 17 2012/08/01 13:47:24

18

Cons

olid

ated

Sta

tem

ents

of I

ncom

e

Consolidated Statements of IncomeMaruichi Steel Tube Ltd. and Consolidated SubsidiariesYears ended March 31, 2012 and 2011

Millions of yen

Thousands ofU.S. dollars

(Note 1)

2012 2011 2012

Net sales ¥120,615 ¥115,758 $1,467,515

Cost of sales (Notes 7 & 17) 94,136 88,993 1,145,341 Gross profit 26,479 26,765 322,174

Selling, general and administrative expenses (Notes 12 & 17) 10,878 10,259 132,361 Operating income 15,601 16,506 189,813

Other income (expense):Interest and dividend income 1,573 1,245 19,134 Interest expense (167) (240) (2,026)Gains on sales of property, plant and equipment, net 3 367 38 Gains on sales on investments in securities 59 99 720 Gains on sales of investments in affiliated companies 436 1 5,300 Income from investment in anonymous association 42 738 512 Gain on liquidation of anonymous association 483 1,714 5,874 Exchange gain or loss, net (385) (355) (4,686)Equity in earnings of affiliated companies, etc 610 152 7,418 Losses on sales of investments in securities – (1,120) –Losses on devaluation of investment in securities (910) (415) (11,070)Loss on impairment (Note 13) (1,828) – (22,240)Loss on casualty (24) (360) (285)Other, net 302 521 3,681

194 2,347 2,370

Income before income taxes and minority interests 15,795 18,853 192,183

Income taxes (Note 10)Current 7,457 6,851 90,730 Deferred 924 850 11,248

8,381 7,701 101,978

Income before minority interests 7,414 11,152 90,205

Minority interests (39) 940 (476)

Net income ¥ 7,453 ¥ 10,212 $ 90,681

YenU.S. dollars

(Note 1)

Per share amounts:Net income

Basic ¥87.36 ¥117.84 $1.06 Diluted ¥87.30 ¥117.78 $1.06

Cash dividends ¥48.50 ¥ 46.50 $0.59

Weighted average number of shares (thousands)Common stock 85,318 86,656 Dilutive securities (stock options) 85,372 86,698

The accompanying notes are an integral part of these financial statements.

012_9039001372408.indd 18 2012/08/01 13:47:24

19

Cons

olid

ated

Sta

tem

ents

of C

ompr

ehen

sive

Inco

me

Consolidated Statements of Comprehensive IncomeMaruichi Steel Tube Ltd. and Consolidated SubsidiariesYears ended March 31, 2012 and 2011

Millions of yen

Thousands ofU.S. dollars

(Note 1)

2012 2011 2012

Income before minority interests ¥7,414 ¥11,152 $90,205 Other comprehensive income

Unrealized holding gains (losses) on available-for-sale securities (Note 5) (2,414) (3,169) (29,368)Foreign currency translation adjustment (969) (2,661) (11,795)Share of other comprehensive income of associates (925) (127) (11,255)Total other comprehensive income (Note 18) (4,308) (5,957) (52,418)

Total comprehensive income ¥3,106 ¥ 5,195 $37,787

Total other comprehensive income attributable to:Owners of the parent ¥3,431 ¥ 5,084 $41,746Non-controlling interests (325) 111 (3,959)

The accompanying notes are an integral part of these financial statements.

012_9039001372408.indd 19 2012/08/01 13:47:24

20

Cons

olid

ated

Sta

tem

ents

of C

hang

es in

Net

Ass

ets

Consolidated Statements of Changes in Net AssetsMaruichi Steel Tube Ltd. and Consolidated SubsidiariesYears ended March 31, 2012 and 2011

Millions of yen

Thousands ofU.S. dollars

(Note 1)

2012 2011 2012

Shareholders’ equity

Common stockBalance at beginning of the year ¥ 9,595 ¥ 9,595 $ 116,744 Total changes during the year – – –Balance at end of the year 9,595 9,595 116,744 Additional paid-in capitalBalance at beginning of the year 15,822 15,822 192,504 Total changes during the year – – –Balance at end of the year 15,822 15,822 192,504 Retained earningsBalance at beginning of the year 202,306 182,148 2,461,445 Changes during the year:

Cash dividends (4,427) (3,165) (53,862)Net income 7,453 10,212 90,681 Increase due to changes of share in consolidated subsidiaries – 13,170 –Change of scope of consolidation – (57) –Sales of treasury stock (0) (2) (0)

Total changes during the year 3,026 20,158 36,819 Balance at end of the year 205,332 202,306 2,498,264 Treasury stockBalance at beginning of the year (17,397) (16,562) (211,676)Changes during the year:

Purchase of treasury stock (2,353) (847) (28,630)Sales of treasury stock 0 12 2

Total changes during the year (2,353) (835) (28,628)Balance at end of the year (19,750) (17,397) (240,304)Total shareholders’ equityBalance at beginning of the year 210,326 191,003 2,559,018 Changes during the year:

Cash dividends (4,427) (3,165) (53,862)Net income 7,453 10,212 90,681 Purchase of treasury stock (2,353) (847) (28,630)Sales of treasury stock 0 10 1 Increase due to changes of share in consolidated subsidiaries – 13,170 –Change of scope of consolidation – (57) –

Total changes during the year 673 19,323 8,190 Balance at end of the year 210,999 210,326 2,567,208

The accompanying notes are an integral part of these financial statements.

012_9039001372408.indd 20 2012/08/01 13:47:25

21

Cons

olid

ated

Sta

tem

ents

of C

hang

es in

Net

Ass

ets

Millions of yen

Thousands ofU.S. dollars

(Note 1)

2012 2011 2012

Accumulated other comprehensive income

Unrealized holding gains (losses) on securitiesBalance at beginning of the year ¥ 6,515 ¥ 9,524 $ 79,262 Net changes in items other than shareholders’ equity (3,001) (3,009) (36,501)Balance at end of the year 3,514 6,515 42,761 Foreign currency translation adjustmentsBalance at beginning of the year (6,543) (4,425) (79,610)Net changes in items other than shareholders’ equity (1,022) (2,118) (12,434)Balance at end of the year (7,565) (6,543) (92,044)Total accumulated other comprehensive incomeBalance at beginning of the year (28) 5,099 (348)Net changes in items other than shareholders’ equity (4,023) (5,127) (48,935)Balance at end of the year (4,051) (28) (49,283)

Minority interestsBalance at beginning of the year 8,138 21,363 99,015 Net changes in items other than shareholders’ equity (796) (13,225) (9,682)Balance at end of the year 7,342 8,138 89,333

Stock optionsBalance at beginning of the year 76 68 929 Net changes in items other than shareholders’ equity 16 8 189 Balance at end of the year 92 76 1,118

Total net assetsBalance at beginning of the year 218,512 217,533 2,658,614 Changes during the year:

Cash dividends (4,427) (3,165) (53,862)Net income 7,453 10,212 90,681 Purchase of treasury stock (2,353) (847) (28,630)Sales of treasury stock 0 10 1 Increase due to changes of share in consolidated subsidiaries – 13,170 –Change of scope of consolidation – (57) –Net changes in items other than shareholders’ equity (4,803) (18,344) (58,428)

Total changes during the year (4,130) 979 (50,238)Balance at end of the year ¥214,382 ¥218,512 $2,608,376

012_9039001372408.indd 21 2012/08/01 13:47:25

22

Cons

olid

ated

Sta

tem

ents

of C

ash

Flow

s

Consolidated Statements of Cash FlowsMaruichi Steel Tube Ltd. and Consolidated SubsidiariesYears ended March 31, 2012 and 2011

Millions of yen

Thousands ofU.S. dollars

(Note 1)

2012 2011 2012

Cash flows from operating activities:Income before income taxes and minority interests ¥15,795 ¥18,853 $192,182 Adjustments to reconcile income before income taxes and minority

interests to net cash provided by operating activities:Depreciation and amortization 5,526 5,253 67,231 Loss on impairment 1,828 – 22,240 Decrease in allowance for doubtful accounts (43) (9) (522)(Decrease) increase in reserve for bonuses to employees (19) 74 (227)Increase in reserve for bonuses to directors and corporate auditors 5 11 57 Decrease in accrued retirement benefits to employees (8) (324) (96)Decrease in accrued retirement benefits to directors and

corporate auditors (18) (9) (221)

Interest and dividend income (1,573) (1,245) (19,134)Interest expense 167 240 2,026 Income from investment in anonymous association (42) (738) (512)Gain on liquidation of anonymous association (483) (1,714) (5,874)Equity in earnings of affiliated companies, etc (610) (152) (7,418)Losses on sales and devaluation of short-tem investments

and investments in securities 851 1,435 10,350

Gains on sales of investments in affiliated companies (436) (1) (5,300)Losses on disposal of property, plant and equipment, etc. 52 55 638 Losses (gains) on sales of property, plant and equipment 58 (365) 711 Increase in trade receivables (384) (2,070) (4,671)Decrease (increase) in inventories 37 (1,516) 452 (Decrease) increase in trade payables (2,315) 538 (28,165)Other, net (491) (280) (5,991)Subtotal 17,897 18,036 217,756

Income taxes paid (7,098) (5,838) (86,360)Dividends and interest income received 1,993 2,390 24,249 Interest paid (167) (240) (2,026)

Net cash provided by operating activities 12,625 14,348 153,619

Cash flows from investing activities:Increase in time deposits with original maturities

over three months (2,223) (10,569) (27,042)

Payments for purchases of short-term investments (14,315) (9,000) (174,174)Proceeds from sales of short-term investments 14,000 2,702 170,337 Payments for purchases of property, plant and equipment (5,759) (5,304) (70,073)Proceeds from sales of property, plant and equipment 32 387 389 Payments for purchases of investments in securities (2) (11,037) (21)Proceeds from sales of investments in securities 1,638 7,609 19,931 Proceeds from sales of investments in affiliated companies 551 307 6,703 Payments for investments in affiliated companies (951) (1,076) (11,566)Proceeds from liquidation of anonymous association 340 2,965 4,132 Other, net 203 (149) 2,468

Net cash used in investing activities (6,486) (23,165) (78,916)

The accompanying notes are an integral part of these financial statements.

012_9039001372408.indd 22 2012/08/01 13:47:25

23

Cons

olid

ated

Sta

tem

ents

of C

ash

Flow

s

Millions of yen

Thousands ofU.S. dollars

(Note 1)

2012 2011 2012

Cash flows from financing activities:Net increase (decrease) in short-term bank loans ¥ 225 ¥ (3,179) $ 2,735 Proceeds from long-term debt 205 3,922 2,499 Repayments of long-term debt (452) (543) (5,505)Payments for purchases of treasury stock (2,353) (847) (28,630)Proceeds from sales of treasury stock 0 0 2 Dividends paid (4,427) (3,165) (53,862)Dividends paid to minority shareholders (72) (86) (873)Other, net – (62) –

Net cash used in financing activities (6,874) (3,960) (83,634)

Effect of exchange rate changes on cash and cash equivalents (208) (775) (2,536)Net decrease in cash and cash equivalents (943) (13,552) (11,467)Cash and cash equivalents at beginning of year 39,616 52,939 482,000 Net increase resulting from a newly consolidated subsidiary – 229 –Cash and cash equivalents at end of year (Note 4) ¥38,673 ¥39,616 $470,533

012_9039001372408.indd 23 2012/08/01 13:47:26

24

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

Notes to the Consolidated Financial Statements

1. Basis of Presenting Consolidated Financial StatementsThe accompanying consolidated financial statements have been prepared based on the accounts maintained by Maruichi Steel Tube Ltd. (the ‘‘Company’’), its consolidated subsidiaries and affiliated companies in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law (the ‘‘Law’’) and in conformity with accounting principles and practices generally accepted in Japan which are different in certain respects from application and disclosure requirements of International Financial Reporting Standards.

Certain reclassifications have been made to the consolidated financial statements issued domestically to present them in a form more familiar to readers outside Japan. In addition, certain notes included herein are not required under accounting principles and practices generally accepted in Japan but have been presented as additional information.

The U.S. dollar amounts included herein are provided solely for convenience and are stated, as a matter of arithmetical computation only, at the rate of ¥82.19 = $1.00, the approximate rate of exchange on March 30, 2012. The translation should not be construed as representations that the Japanese yen amounts have been, could have been or could in the future be converted into U.S. dollars at this or any other rate.

2. Summary of Significant Accounting Policies(a) Principles of consolidationThe accounting policies and procedures applied to the parent company and its consolidated subsidiaries for similar transactions and events under similar circumstances are in principle unified for the preparation of the consolidated financial statements. Therefore, for the financial statements prepared by consolidated overseas subsidiaries, necessary adjustments have been made in accordance with above principle in the consolidation process. However the financial statements prepared in accordance with IFRSs or the generally accepted accounting principles in the United States (U.S. GAAP) are used with no adjustments, unless otherwise stipulated by Practical Issue Task Force (PITF) No.18, “Practical Solution on Unification of Accounting Policies to Foreign Subsidiaries for the Consolidated Financial Statements” issued by the ASBJ on May 17, 2006.

The consolidated financial statements include the accounts of the Company and its 11 (11 in 2011) consolidated subsidiaries (collectively, the ‘‘Group’’). A subsidiary is defined to be a company more than 50% of whose shares are held by the Company or 40-50% of whose shares are held by the Company and which is controlled by the Company through certain channels. All significant inter-company balances, transactions and unrealized profit thereof are eliminated in consolidation. Other subsidiaries are not consolidated as they are not significant in terms of total assets, net sales, net income or retained earnings.

Five (five in 2011) foreign consolidated subsidiaries have December year-end and two (two in 2011) domestic consolidated subsidiaries have February year-end, which are reflected in the consolidated financial statements by their own fiscal years without adjusting to that of the Company. Any material events occurred during the period between March 31 and above different closing dates are adjusted for the purpose of consolidation and reflected in the accompanying consolidated financial statements.

Four (four in 2011) affiliated companies are accounted for by the equity method.Investments in seven (six in 2011) unconsolidated subsidiaries and other four (five in 2011) affiliated companies are stated at

cost and are not accounted for by the equity method because of their immaterial impact.Differences between the cost and the underlying net equity at fair value of investments in consolidated subsidiaries and in

companies which are accounted for by the equity method have been amortized by the straight-line method over the period less than 20 years, except for immaterial differences which are fully charged to income in the year of acquisition.

(b) Translation of foreign currenciesAll assets and liabilities denominated in foreign currencies are translated into Japanese yen at current rate at year-end date and the resulting translation gains or losses are charged to income. Revenues and expenses are translated at the exchange rates prevailing when the transactions are made.

As to translation of financial statements of foreign subsidiaries, assets and liabilities are translated into Japanese yen at year-end exchange rates, shareholders’ equity accounts are translated at historical rates, and revenues and expenses are translated at average rates prevailing during the year. The resulting foreign currency translation adjustments are shown as a separate component of shareholders’ equity.

(c) Cash and cash equivalentsCash and cash equivalents in the consolidated statements of cash flows are composed of cash on hand, bank deposits on demand and short-term investments with original maturities of three months or less and insignificant risk of change in value.

012_9039001372408.indd 24 2012/08/01 13:47:26

25

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

(d) Short-term investments and investments in securities Securities, which are included in short-term investments and investments in securities, held by the Group are classified as available-for-sale securities as defined by the accounting standard for financial instruments.

Available-for-sale securities for which market quotations are available are carried at fair value at the balance sheet date. Net unrealized gains or losses on these securities are reported as a separate item in net assets, net of applicable taxes.

Unquoted equity securities are stated at cost. The cost is determined by the moving average method.In cases where the fair value of available-for-sale securities has declined significantly and the impairment of value is not

deemed temporary, those securities are written down to the fair value and the resulting losses are charged to income for the period in which the loss incurs.

(e) Investments in unconsolidated subsidiaries and affiliated companiesInvestments in unconsolidated subsidiaries and affiliated companies which are not accounted for by the equity method are stated at cost determined by the moving average method.

(f) InventoriesInventories are measured at the lower of cost or net selling value. The costs of finished goods, raw materials and supplies are determined by the gross average method, the moving average method and the last purchase cost method, respectively. The net selling value is defined as the selling price less additional estimated manufacturing costs and estimated selling expenses.

(g) Property, plant and equipmentProperty, plant and equipment are stated at cost. Depreciation is computed by the declining balance method, except for buildings acquired on or after April 1, 1998, which are depreciated by the straight-line method based on the following range of estimated useful lives of the assets.

Buildings and structures 10 - 50 yearsMachinery and equipment 5 - 14 years

The cost of property, plant and equipment retired or otherwise disposed of and the related accumulated depreciation are eliminated from the respective accounts, and the resulting gain or loss is charged to income during the applicable period. Normal repairs and maintenance including minor renewals and improvements are charged to income as incurred.

(h) Allowance for doubtful accountsAllowance for doubtful accounts is established to provide for future losses based on the historical rate of the credit loss experienced. In addition, allowances for specific customer accounts, which were deemed uncollectible, are provided.

(i) Accrued retirement benefits to employeesThe Company and its domestic consolidated subsidiaries have unfunded lump-sum severance indemnity plans and corporate pension plans. The Company transferred a part of its retirement benefit plans from a tax qualified pension plan to a defined benefit corporate pension plan (cash balance plan) in June 2008. Foreign consolidated subsidiaries adopt defined contribution pension plans. Accrued retirement benefits represent mainly the estimated present value of projected benefit obligations in excess of fair value of the plan assets at the end of the fiscal year. The unrecognized actuarial differences are amortized on a straight-line basis over the period of three years from the fiscal year following the fiscal year they occur. The prior service cost is charged to income when incurred. The account includes the balance for employees and operating officers, which is calculated based on the current rate of pay, length of service and consideration of each respective position.

(j) Accrued retirement benefits for directors and corporate auditorsCertain domestic consolidated subsidiaries provide for lump-sum retirement benefits with respect to directors and corporate auditors based on the current rate of pay, length of service and consideration of each respective position. The provisions are not funded.

012_9039001372408.indd 25 2012/08/01 13:47:26

26

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

(k) Income taxesAccrued income taxes are provided at the amount currently payable. The Group has adopted the deferred tax accounting method. Income taxes are determined using the asset and liability approach, whereby deferred tax assets and liabilities are recognized in respect to temporary differences between the tax basis of assets and liabilities and those as reported in the financial statements.

(l) Consumption taxesConsumption taxes are not included in the respective accounts in the accompanying consolidated statements of income but are recorded in the consolidated balance sheet in net of taxes receivable and payable.

(m) Appropriation of retained earningsThe Company is able to appropriate retained earnings (primarily for cash dividend payments) by resolution of the Board of Directors, provided that certain criteria are met.

(n) Net income per shareBasic net income per share-basic is calculated by dividing net income by the weighted average number of shares of common stock outstanding during the year.

3. Accounting ChangeThe Company has adopted Accounting Standards Board of Japan (“ASBJ”) Statement No. 24 “Accounting Standard for Accounting Changes and Error Corrections” and ASBJ Guidance No. 24 “Guidance on Accounting Standard for Accounting Changes and Error Corrections,” which were issued by the ASBJ on December 4, 2009, for the accounting changes and corrections of prior period errors which are made on and after the beginning of the fiscal year ended March 31, 2012.

4. Cash and Cash EquivalentReconciliation of cash and cash equivalents between the consolidated statements of cash flows and the consolidated balance sheets is as follows:

Millions of yenThousands of

U.S. dollars

2012 2011 2012

Cash and bank deposits ¥57,983 ¥54,265 $705,472Time deposits with maturities over 3 months (25,093) (22,870) (305,301)Short-term investments with maturities within 3 months 5,783 8,221 70,362Cash and cash equivalents ¥38,673 ¥39,616 $470,533

5. Short-term Investments and Investments in SecuritiesShort-term investments and investments in securities held by the Group for which market quotations are available were summarized as follows:

Millions of yen

March 31, 2012Acquisition

CostGross

unrealized gainsGross

unrealized lossesCarrying amount

(fair value)

Equity securities ¥32,277 ¥5,726 ¥(2,253) ¥35,750Bonds and debentures 9,064 0 (206) 8,858Others 13,037 – (–) 13,037

¥54,378 ¥5,726 ¥(2,459) ¥57,645

012_9039001372408.indd 26 2012/08/01 13:47:26

27

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

Thousands of U.S. dollars

March 31, 2012Acquisition

CostGross

unrealized gainsGross

unrealized lossesCarrying amount

(fair value)

Equity securities $392,713 $69,669 $(27,412) $434,970Bonds and debentures 110,280 3 (2,510) 107,773Others 158,625 – (–) 158,625

$661,618 $69,672 $(29,922) $701,368

Millions of yen

March 31, 2011Acquisition

CostGross

unrealized gainsGross

unrealized lossesCarrying amount

(fair value)

Equity securities ¥33,440 ¥9,569 ¥(1,394) ¥41,615Bonds and debentures 10,388 – (207) 10,181Others 15,221 – (–) 15,221

¥59,049 ¥9,569 ¥(1,601) ¥67,017

The information of available-for-sale securities which were sold was as follows:Millions of yen

For the year ended March 31, 2012 Proceeds Realized gains Realized loss

Available-for-sale: Equity securities ¥314 ¥59 ¥ –Total ¥314 ¥59 ¥ –

Thousands of U.S. dollars

For the year ended March 31, 2012 Proceeds Realized gains Realized loss

Available-for-sale: Equity securities $3,823 $723 $ –Total $3,823 $723 $ –

Millions of yen

For the year ended March 31, 2011 Proceeds Realized gains Realized loss

Available-for-sale: Equity securities ¥1,429 ¥88 ¥ (126)Debt securities 3,122 – (878)Others 1,782 11 (116)Total ¥6,333 ¥99 ¥(1,120)

The impairment losses on available-for-sale equity securities which have a quoted market price in an active market for the years ended March 31, 2012 and 2011 were ¥910 million ($11,070 thousand) and ¥156 million, respectively.

012_9039001372408.indd 27 2012/08/01 13:47:26

28

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

6. Trade NotesTrade notes receivable due at the end of the fiscal year are treated as settled on the date of maturity.As the end of the year ended March 31, 2012 fell on a bank holiday, the following trade notes receivable due at the end of the fiscal year are treated as settled on the date of maturity.

Millions of yenThousands of

U.S. dollars

2012 2011 2012

Trade notes receivable ¥206 ¥– $2,502

7. InventoriesInventories at March 31, 2012 and 2011 consisted of the following:

Millions of yenThousands of

U.S. dollars

2012 2011 2012

Finished goods, including merchandise ¥ 7,423 ¥ 7,135 $ 90,317Raw materials and supplies 13,429 14,082 163,390

¥20,852 ¥21,217 $253,707

8. Short-term Bank Loans and Long-term DebtThe annual average interest rate applicable to the short-term bank loans was 1.20% for the year ended March 31, 2012.

Long-term debt at March 31, 2012 was as follows:

Millions of yenThousands of

U.S. dollars

Loans from banks due 2013 serially to 2020 with annual average interest rate of 1.38% ¥4,903 $59,652Less current portion with annual average interest rate of 1.87% (508) (6,179)Long-term debt, less current portion ¥4,395 $53,473

Annual maturities of long-term debt at March 31, 2012, were as follows:

Year ending March 31 Millions of yenThousands of

U.S. dollars

2013 ¥ 508 $ 6,1792014 697 8,4752015 846 10,2922016 769 9,3532017 679 8,2652018 and thereafter 1,404 17,088Total ¥4,903 $ 59,652

012_9039001372408.indd 28 2012/08/01 13:47:26

29

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

The carrying amounts of assets pledged as collateral for short-term bank loans of ¥220 million ($2,675 thousand) and long-term bank loans of ¥488 million ($5,935 thousand) at March 31, 2012 were as follows:

Millions of yenThousands of

U.S. dollars

Cash and bank deposits ¥431 $ 5,237Buildings and structures 315 3,836Land 206 2,508Total ¥952 $11,581

9. Accrued Retirement Benefits to EmployeesThe Group has lump-sum severance payment plans and contributory benefit pension plans as severance benefit plans.

The Company has a cash balance plan as a defined benefit pension plan. The foreign consolidated subsidiary has a defined contribution pension plan.

Information regarding the accrued retirement benefits to employees as of March 31, 2012 and 2011 were as follows:

Millions of yenThousands of

U.S. dollars

2012 2011 2012

Projected benefit obligations ¥(5,121) ¥(5,057) $(62,310)Fair value of plan assets 1,811 1,810 22,038Benefit obligations in excess of plan assets (3,310) (3,247) (40,272)Unrecognized actuarial differences 289 218 3,522Accrued retirement benefits ¥(3,021) ¥(3,029) $(36,750)

Net pension expense related to retirement benefits for the years ended March 31, 2012 and 2011 were as follows:

Millions of yenThousands of

U.S. dollars

2012 2011 2012

Service costs ¥410 ¥363 $4,988Interest costs 58 64 707Expected return on plan assets (40) (39) (491)Amortization of unrecognized actuarial differences 49 (140) 595Net periodic pension cost ¥477 ¥248 $5,799

Assumptions used in the calculation of the above information for the years ended March 31, 2012 and 2011 were as follows:2012 2011

Discount rate 1.4% 1.71%Expected rate of return on plan assets 2.5% 2.5%Method of attribution the projected benefits to periods of services Straight-line basis Straight-line basisAmortization period of actuarial differences 3 years 3 yearsAmortization period of prior service cost 1 year 1 year

012_9039001372408.indd 29 2012/08/01 13:47:26

30

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

10. Income TaxesThe Company is subject to a number of different taxes based on income, which in the aggregate indicate an effective tax rate of approximately 40.4% for the years ended March 31, 2012 and 2011.

The significant components of deferred tax assets and liabilities at March 31, 2012 and 2011 were as follows:

Millions of yenThousands of

U.S. dollars

2012 2011 2012

Deferred tax assets:Unrealized gain on inventories ¥ 268 ¥ 256 $ 3,260Enterprise tax payable 270 – 3,283Accrued bonuses to employees 321 344 3,900

Losses on devaluation of short-term investments and investments in securities 611 332 7,432

Accrued retirement benefits 1,076 1,208 13,087Accumulated depreciation 21 25 260Impairment loss on property, plant and equipment 263 220 3,199Unrealized holding losses on available-for-sale securities – 84 –Tax loss carryforwards 1,012 1,136 12,312Other 1,164 1,836 14,175Less valuation allowance (1,104) (431) (13,437)Total gross deferred tax assets ¥3,902 ¥5,010 $47,471

Deferred tax liabilities:Unrealized holding gains on available-for-sale securities 1,128 3,499 13,725Deferred gain on property, plant and equipment 258 294 3,143Depreciation expenses of U.S. subsidiary 107 81 1,299Other 297 297 3,611Total gross deferred tax liabilities ¥1,790 ¥4,171 $21,778Net deferred tax assets ¥2,112 ¥ 839 $25,693

The deferred tax assets and liabilities of the consolidated subsidiary in a different tax jurisdiction are presented without offset on the accompanying consolidated balance sheets in accordance with Japanese accounting practice.

A reconciliation between the statutory tax rate and the actual effective tax rate for the year ended March 31, 2012 and 2011 is as follows:

2012 2011Statutory tax rate 40.4% –%Decrease in deferred tax assets due to tax rate change 1.2% –%Impairment of goodwill 3.6% –%Amortization of goodwill 2.1% –%Increase in valuation reserve 5.6% –%Other 0.2% –%Effective tax rate 53.1% –%

Note: Since the differences between the statutory tax rate and the effective tax rate are not significant (less than 5% of the statutory tax rate) for the year ended March 31, 2011, no reconciliation of these two rates is presented in accordance with the Regulation Concerning Consolidated Financial Statements.

Following the promulgation of Act for Partial Amendment of the Income Tax Act, etc. for the Purpose of Creating a Taxation System Responding to Changes in Economic and Social Structures and Act on Special Measures for Securing Financial Resources Necessary to Implement Measures for Reconstruction following the Great East Japan Earthquake on December 2, 2011, the

012_9039001372408.indd 30 2012/08/01 13:47:27

31

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

effective statutory tax rate used to measure deferred tax assets and deferred tax liabilities for the year ended March 31, 2012 (only for those expected to be resolved from the fiscal year beginning on April 1, 2012) will change for the period during which collection or payment is expected to occur from April 1, 2012 to March 31, 2015, and for the period after April 1, 2015, from the former 40.4% to 37.8% and 35. 4%, respectively.

As a result, the amount of deferred tax assets (less the amount of deferred tax liabilities) has decreased by ¥37 million ($449 thousand), and the amounts of income taxes-deferred and unrealized holding gains (losses) on securities have increased by ¥196 million ($2,387 thousand) and ¥159 million ($1,938 thousand), respectively.

11. Financial Instruments and Related Disclosures(1) Policy for financial instrumentsRegarding fund operations, the Group invests in short-term deposits and low-risk financial assets. Derivatives are used, not for speculative purposes, but to manage exposure to foreign currency exchange risk.

(2) Nature and extent of risks arising from financial instruments and its risk managementReceivables such as trade notes and accounts receivable are exposed to customer credit risk. The Group manages its credit risk from receivables on the basis of internal credit exposure management guidelines, which include monitoring of payment term and balances of each customer to identify the default risk of customers on a routine basis.

Short-term investments and investment securities, mainly consisting of equity or debt securities of customers and suppliers of the Group, are exposed to the risk of market price fluctuations. The fair value of those is recognized on a routine basis and reported to Board of Directors.

Payment terms of most payables, such as trade notes and accounts receivable, are less than one year.The objectives of short-term bank loans and long-term debt are mainly to raise necessary fund for working fund and capital

expenditures, respectively. The majority of loans are short-term bank loans with low interest rate fluctuation risk or fixed rate long-term debt.

The derivative transactions are conducted and managed in accordance with a company regulation which dictates rules for items including authorities and transaction amount limitation.

While receivables and debt loan are exposed to liquidity risk, the Group manages the risk through measures such as a monthly financial planning.

(a) Fair value of financial instrumentsMillions of yen

March 31, 2012 Carrying amount Fair value Unrealized gain/loss

(1) Cash and bank deposits ¥ 57,983 ¥ 57,983 ¥ – (2) Trade notes and accounts receivable 29,896 29,896 –Less allowance for doubtful accounts (230) (230) –

29,666 29,666(3) Short-term investments and Investments in securities 57,645 57,645 –Total ¥145,294 ¥145,294 ¥ –

(1) Trade notes and accounts payable ¥ 11,729 ¥ 11,729 ¥ –(2) Short-term bank loans 5,154 5,154 –(3) Long-term debt 4,903 5,098 195 Total ¥ 21,786 ¥ 21,981 ¥195

012_9039001372408.indd 31 2012/08/01 13:47:27

32

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

Thousands of U.S. dollars

March 31, 2012 Carrying amount Fair value Unrealized gain/loss

(1) Cash and bank deposits $ 705,472 $ 705,472 $ –(2) Trade notes and accounts receivable 363,744 363,744 –Less allowance for doubtful accounts (2,799) (2,799) –

360,945 360,945 –(3) Short-term investments and Investments in securities 701,368 701,368 –Total $1,767,785 $1,767,785 $ –

(1) Trade notes and accounts payable $ 142,708 $ 142,708 $ –(2) Short-term bank loans 62,706 62,706 –(3) Long-term debt 59,652 62,024 2,372 Total $ 265,066 $ 267,438 $2,372

Millions of yen

March 31, 2011 Carrying amount Fair value Unrealized gain/loss

(1) Cash and bank deposits ¥ 54,265 ¥ 54,265 ¥ –(2) Trade notes and accounts receivable 29,616 29,616 –Less allowance for doubtful accounts (224) (224) –

29,392 29,392(3) Short-term investments and Investments in securities 67,017 67,017 –Total ¥150,674 ¥150,674 ¥ –

(1) Trade notes and accounts payable ¥ 14,165 ¥ 14,165 ¥ –(2) Short-term bank loans 5,617 5,617 –(3) Long-term debt 4,759 4,726 (33) Total ¥ 24,541 ¥ 24,508 ¥ (33)

Assets(1) Cash and bank deposits and (2) Trade notes and accounts receivableThe carrying amounts of cash and bank deposits and trade notes and accounts receivable approximate fair value because of their short maturities.

(3) Short-term investments and Investments in securitiesThe fair values of short-term investments and investments in securities are determined using the quoted price at the stock exchange for the equity instruments, and at the quoted price obtained from the financial institution for certain debt instruments. The carrying amounts of certificate of deposit approximate fair value because of their short maturities. The information of the fair value for short-term investments and investments in securities by classification is included in Note 5.

Liabilities(1) Trade notes and accounts payable and (2) Short-term bank loans The carrying amounts of trade notes and accounts payable and short-term bank loans approximate fair value because of their short maturities. (3) Long-term debt The carrying amounts of variable rate long-term debt approximate fair value because the interest payment is linked to the market interest rate. The fair values of fixed rate long-term debt were calculated by discounting the cash flows related to the amount of principal and interest at the borrowing rate assuming that the Company group receives loans under the same agreements.

DerivativesAs of March 31, 2012 and 2011, there were no derivative transactions regardless of the application of hedge accounting.

012_9039001372408.indd 32 2012/08/01 13:47:27

33

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

(b) Financial instruments whose fair value cannot be reliably determinedCarrying amount

Millions of yenThousands of

U.S. dollars

2012 2011 2012

Investments in equity instruments that do not have a quoted market pricein an active market ¥8,236 ¥8,890 $100,211

(c) Maturity analysis for financial assets and securities with contractual maturitiesMillions of yen

March 31, 2012 Due in one year or lessDue after one year through five years

Due after five years through ten years Due after ten years

Cash and bank deposits ¥ 57,983 ¥ – ¥ – ¥ –Trade notes and accounts receivable 29,896 – – –Short-term investments and investments

in securities with contractual maturitiesAvailable-for-sale:Debentures 1 310 8,231 317Others 13,037 – – –

Total ¥100,917 ¥310 ¥8,231 ¥317

Thousands of U.S. dollars

March 31, 2012 Due in one year or lessDue after one year through five years

Due after five years through ten years Due after ten years

Cash and bank deposits $ 705,472 $ – $ – $ –Trade notes and accounts receivable 363,744 – – –Short-term investments and investments

in securities with contractual maturitiesAvailable-for-sale:Debentures 10 3,770 100,141 3,851Others 158,626 – – –

Total $1,227,852 $3,770 $100,141 $3,851

Millions of yen

March 31, 2011 Due in one year or lessDue after one year through five years

Due after five years through ten years Due after ten years

Cash and bank deposits ¥54,265 ¥ – ¥ – ¥ –Trade notes and accounts receivable 29,616 – – –Short-term investments and investments

in securities with contractual maturitiesAvailable-for-sale:Debentures 1 311 9,575 294Others 15,221 – – –

Total ¥99,103 ¥311 ¥9,575 ¥294

012_9039001372408.indd 33 2012/08/01 13:47:27

34

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

12. Selling, General and Administrative Expenses Major components of selling, general and administrative expenses for the years ended March 31, 2012 and 2011 were as follows:

Millions of yenThousands of

U.S. dollars

2012 2011 2012

Shipping charges ¥4,323 ¥3,968 $52,597Salaries and allowances 1,712 1,781 20,832Retirement benefit costs 131 115 1,594Provision for retirement benefits to directors and corporate auditors 0 9 2Provision for bonuses to employees 287 222 3,489Provision for bonuses to directors 67 66 813

13. Losses on ImpairmentFor the year ended March 31, 2012The Company recorded the following losses on impairment related to the consolidated subsidiary in Vietnam, Sun Steel Joint Stock Company.

Millions of yenThousands of

U.S. dollars

Machinery and equipment ¥ 426 $ 5,183Goodwill 1,402 17,057Total ¥1,828 $22,240

The Group generally conducts grouping of assets by reportable segment unit, except for idle assets not being used for business purpose which are grouped by individual asset.

For machinery and equipment, they are idle equipment and future operation is not expected. For goodwill, excess earning power forecasted at the acquisition is not expected. As a result, losses on impairment are accounted for each asset. Recoverable amount is measured by value in use and discount rate is 9.2%.

For the year ended March 31, 2011No losses on impairment of property, plant and equipment or other assets were noted. 14. Contingencies(1) As of March 31, 2012 and 2011, the Company had the following contingent liabilities

Millions of yenThousands of

U.S. dollars

2012 2011 2012

Guarantees of bank loans to the Company’s affiliate companies ¥66 ¥ 12 $803Trade notes endorsed 80 87 976Amounts of the sale of account receivables by liquidation of receivables – 150 –

(2) As of March 31, 2012 and 2011, the Company issued letters of awareness on an affiliate’s management support to raise funds.

012_9039001372408.indd 34 2012/08/01 13:47:27

35

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

15. Net AssetsThe Company is subject to the Law.(i) DividendsThe Companies Act (the ‘‘Act’’) allows Japanese companies to pay dividends at any time during the fiscal year in addition to the yearend dividend upon resolution at the shareholders meeting. The Board of Directors may declare dividends (except for dividends in kind) if the company has prescribed so in its articles of incorporation. The Act permits Japanese companies to distribute dividends in kind (noncash assets) to shareholders subject to certain limitations and additional requirements. The Act also provides certain limitations on the amounts available for dividends and the purchase of treasury stock. The maximum amount that the Company can distribute as dividends is calculated based on the nonconsolidated financial statements of the Company in accordance with Japanese laws and regulations.

(ii) Common stock, reserve and surplusThe Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (of retained earnings) or as additional paid-in capital (of capital surplus) depending on the equity account charged upon the payment of such dividends until the total of aggregate amount of legal reserve and additional paid-in capital equals 25% of the common stock. Under the Act, the total amount of additional paid-in capital and legal reserve may be reversed without the limitation threshold that the Act provided. The Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and retained earnings can be transferred among accounts under certain conditions upon resolution of the shareholders.

(iii) Treasury stockThe Act provides for Japanese companies to repurchase/dispose of treasury stock just as the Act stipulates. The amount of treasury stock purchased cannot exceed the amount available for distribution to the shareholders, an amount which is determined by specific formula.

The movements of outstanding shares and cash dividends during the year ended March 31, 2012 are as follows:

(a) Number of outstanding shares and treasury stock

Type of sharesBalance at

beginning of the yearIncrease during

the yearDecrease during

the yearBalance at

end of the year

Issued stock: Common stock 94,000,000 – – 94,000,000

Treasury stock: Common stock 7,574,237 1,200,608 70 8,774,775

(b) Dividends paid to the shareholders during the year:

Date of resolution Resolution by Type of sharesAggregate

amountAmount per

share Date of record Effective date

May 12, 2011 Board of Directors

Common stock ¥2,722 million($33,123

thousand)

¥31.50 ($0.38) Mar. 31, 2011 Jun. 29, 2011

Nov. 8, 2011 Board of Directors

Common stock ¥1,705 million($20,739

thousand)

¥20.00 ($0.24) Sep. 30, 2011 Nov. 30, 2011

012_9039001372408.indd 35 2012/08/01 13:47:27

36

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

Dividends applicable to the year ended March 31, 2012, but not recorded in the accompanying consolidated financial statements, since the effective date is subsequent to the fiscal year:

Date of resolution Resolution by Type of sharesAggregate

amountAmount per

share Date of record Effective date

May 12, 2012 Board of Directors

Common stock ¥2,429 million($29,552

thousand)

¥28.50 ($0.35) Mar. 31, 2012 Jun. 28, 2012

Note: Above cash dividends are distributed from retained earnings.

16. Stock OptionsThe stock options outstanding as of March 31, 2012 are as follows:

Stock option Persons grantedNumber of options

granted Date of grantVesting conditions and service period Exercise period

2005 Stock option 5 directors 7,000 Jul. 7, 2005 No Jul. 8, 2005 -Jul. 7, 2025

2006 Stock option 7 directors 11,100 Nov. 9, 2006 No Nov. 10, 2006 -Nov. 9, 2026

2007 Stock option 7 directors 7,100 Sep. 10, 2007 No Sep. 11, 2007 -Sep. 10, 2027

2008 Stock option 7 directors 7,800 Sep. 10, 2008 No Sep. 11, 2008 -Sep. 10, 2028

2009 Stock option 6 directors 11,200 Sep. 8, 2009 No Sep. 9, 2009 -Sep. 8, 2029

2010 Stock option 6 directors 12,500 Sep. 8, 2010 No Sep. 9, 2010 -Sep. 8, 2030

2011 Stock option 6 directors 11,700 Sep. 8, 2011 No Sep. 9, 2011 -Sep. 8, 2031

The stock option activity is as follows:2005 Stock

option2006 Stock

option2007 Stock

option2008 Stock

option2009 Stock

option2010 Stock

option2011 Stock

option

(Non-vested)March 31, 2011 – – – – – – –Granted – – – – – – 11,700Forfeited – – – – – – –Vested – – – – – – 11,700March 31, 2012 – – – – – – –(Vested)March 31, 2011 6,000 8,400 5,300 5,700 9,500 12,500 –Vested – – – – – – 11,700Exercised – – – – – – –Forfeited – – – – – – –March 31, 2012 6,000 8,400 5,300 5,700 9,500 12,500 11,700Exercise price ¥1 ¥1 ¥1 ¥1 ¥1 ¥1 ¥1Average stock price at exercise – – – – – – –Fair value price at grant date – ¥2,281 ¥2,416 ¥2,431 ¥1,383 ¥1,391 ¥1,327

($27.75) ($29.40) ($29.58) ($16.83) ($16.92) ($16.15)

012_9039001372408.indd 36 2012/08/01 13:47:28

37

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

The assumptions used to measure fair value of 2011 Stock option are as follows:Estimation method: Black-Scholes option pricing modelVolatility of stock price: 27.4%Estimated remaining outstanding period: 10 yearsEstimated dividend: ¥46.50 ($0.57) per shareInterest rate with risk free: 1.02%

17. Research and Development CostThe amounts of costs for the research and development activities of the Group for the years ended March 31, 2012 and 2011 were ¥278 million ($3,388 thousand) and ¥107 million, respectively.

18. Comprehensive IncomeReclassification adjustments and tax effect amounts of other comprehensive income for the year ended March 31, 2012 were as follows:

Millions of yenThousands of

U.S. dollars

Unrealized holding gains on available-for-sale securitiesAmount for the year ¥(5,552) $(67,551)Reclassification adjustment 851 10,350

Amount before tax effect (4,701) (57,201)Tax effect amount 2,287 27,833Unrealized holding gains on available-for-sale securities (2,414) (29,368)

Foreign currency translation adjustmentsAmount for the year (969) (11,795)

Foreign currency translation adjustments (969) (11,795)Share of other comprehensive income in affiliated companies

Amount for the year (925) (11,255)Share of other comprehensive income in affiliated companies (925) (11,255)

Total other comprehensive income ¥(4,308) $(52,418)

19. Consolidated SubsidiariesThe Company’s consolidated subsidiaries are as follows:

Name Ownership Interest Country of Incorporation

Maruichi Kohan Ltd. 91.1% JapanHokkaido Maruichi Steel Tube Ltd. 100.0% JapanShikoku Maruichi Steel Tube Ltd. 100.0% JapanKyushu Maruichi Steel Tube Ltd. 100.0% JapanAlpha Metal Co., Ltd. 93.5% JapanMaruichi Investment Ltd. 100.0% JapanMaruichi American Corporation 61.0% United States of AmericaSun Steel Joint Stock Company 69.3% VietnamMKK USA Inc. 100.0% United States of AmericaLeavitt Tube Company LLC 60.0% United States of AmericaSun Steel (Hanoi) Company Limited 100.0% Vietnam

Of the above consolidated subsidiaries, Leavitt Tube Company LLC, Sun Steel Joint Stock Company and Sun Steel (Hanoi) Company Limited were renamed Maruichi Leavitt Pipe & Tube, LLC, Maruichi Sun Steel Joint Stock Company and Maruichi Sun Steel (Hanoi) Company Limited, respectively, effective on or after April 1, 2012.

012_9039001372408.indd 37 2012/08/01 13:47:28

38

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

20. Segment Information(1) Description of reportable segmentsThe Group’s reportable segments are those for which separate financial information is available and regular evaluation by the boards of directors and corporate officers is being performed in order to decide how resources are allocated among the Company’s group. The Group produces and sells mainly steel tubes, steel sheet coating, steel bars, and so forth. The Company, domestic consolidated subsidiaries and overseas subsidiaries operate those businesses based on the regional comprehensive strategy designed by each company in each location.

Therefore, the Group’s reportable segments consist of “Japan” “North America” and “Asia” based on the regional production and sales structure.

The principal products of each reportable segment are as follows.(Japan)Welded steel tubes for architecture, construction and plumbing, Gold-plated coils, Lighting poles, etc.

(North America)Welded steel tubes for architecture, construction and plumbing, etc.

(Asia)Welded steel tubes for architecture, construction and plumbing, Gold-plated coils, Color coils, Steel bars, etc.

(2) Methods of measurement for sales, profit (loss), assets, liabilities and other items of each reportable segmentMethods of measurement for sales, profit (loss), assets, liabilities and other items for each reportable segment is mainly equal to “2. Summary of Significant Accounting Policies.” Intersegment sales or transfers are based on current market prices.

(3) Information regarding sales, profit (loss), assets, liabilities and other items of each reportable segment is as follows:

Millions of yen

For the year ended March 31, 2012

Reportable segment

Reconciliations ConsolidatedJapanNorth

America Asia Total

SalesSales to external customers ¥94,010 ¥12,670 ¥13,935 ¥120,615 ¥ – ¥120,615Intersegment sales or transfers 253 – – 253 (253) –

Total 94,263 12,670 13,935 120,868 (253) 120,615Segment profit (loss) ¥15,831 ¥ 720 ¥ (943) ¥ 15,608 ¥ (7) ¥ 15,601Segment assets ¥92,237 ¥10,147 ¥16,482 ¥118,866 ¥130,359 ¥249,225Other:

Depreciation ¥ 3,133 ¥ 519 ¥ 1,059 ¥ 4,711 ¥ – ¥ 4,711Amortization of goodwill 71 – 744 815 – 815Increase in property plant and equipment

and intangible assets2,394 1,757 1,462 5,613 – 5,613

012_9039001372408.indd 38 2012/08/01 13:47:28

39

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

Thousands of U.S. dollars

For the year ended March 31, 2012

Reportable segment

Reconciliations ConsolidatedJapanNorth

America Asia Total

SalesSales to external customers $1,143,809 $154,153 $169,553 $1,467,515 $ – $1,467,515Intersegment sales or transfers 3,083 – – 3,083 (3,083) –

Total 1,146,892 154,153 169,553 1,470,598 (3,083) 1,467,515Segment profit (loss) $ 192,614 $ 8,761 $ (11,479) $ 189,896 $ (83) $ 189,813Segment assets $1,122,243 $123,457 $200,540 $1,446,240 $1,586,070 $3,032,310Other:

Depreciation $ 38,122 $ 6,315 $ 12,880 $ 57,317 $ – $ 57,317Amortization of goodwill 862 – 9,051 9,913 – 9,913Increase in property plant and equipment

and intangible assets29,123 21,373 17,795 68,291 – 68,291

Millions of yen

For the year ended March 31, 2011

Reportable segment

Reconciliations ConsolidatedJapanNorth

America Asia Total

SalesSales to external customers ¥91,777 ¥10,063 ¥13,918 ¥115,758 ¥ – ¥115,758Intersegment sales or transfers 960 – – 960 (960) –

Total 92,737 10,063 13,918 116,718 (960) 115,758Segment profit (loss) ¥16,390 ¥ 458 ¥ (310) ¥ 16,538 ¥ (32) ¥ 16,506Segment assets ¥94,046 ¥ 8,349 ¥17,016 ¥119,411 ¥139,162 ¥258,573Other:

Depreciation ¥ 3,165 ¥ 435 ¥ 923 ¥ 4,523 ¥ – ¥ 4,523Amortization of goodwill 68 – 662 730 – 730Investment in equity method affiliate 63 – 6,629 6,692 – 6,692Increase in property plant and equipment

and intangible assets2,339 1,324 1,789 5,452 – 5,452

(4) Related information(a) Information by goods and services

Millions of yen

For the year ended March 31, 2012 Steel tube Steel sheet coating Others Total

Sales to external customers ¥95,930 ¥16,687 ¥7,998 ¥120,615

Thousands of U.S. dollars

For the year ended March 31, 2012 Steel tube Steel sheet coating Others Total

Sales to external customers $1,167,170 $203,032 $97,313 $1,467,515

Millions of yen

For the year ended March 31, 2011 Steel tube Steel sheet coating Others Total

Sales to external customers ¥91,571 ¥15,334 ¥8,853 ¥115,758

012_9039001372408.indd 39 2012/08/01 13:47:28

40

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

(b) Information by regionSales

Millions of yen

For the year ended March 31, 2012 Japan North America Asia · Oceania Others Total

Sales based on customer’s location ¥94,088 ¥12,796 ¥13,593 ¥138 ¥120,615

Thousands of U.S. dollars

For the year ended March 31, 2012 Japan North America Asia · Oceania Others Total

Sales based on customer’s location $1,144,759 $155,689 $165,391 $1,676 $1,467,515

Millions of yen

For the year ended March 31, 2011 Japan North America Asia · Oceania Others Total

Sales based on customer’s location ¥88,946 ¥10,346 ¥16,192 ¥274 ¥115,758

Property, plant and equipmentMillions of yen

March 31, 2012 Japan North America Asia Total

Property, plant and equipment ¥50,425 ¥5,592 ¥8,866 ¥64,883

Thousands of U.S. dollars

March 31, 2012 Japan North America Asia Total

Property, plant and equipment $613,515 $68,039 $107,876 $789,430

Millions of yen

March 31, 2011 Japan North America Asia Total

Property, plant and equipment ¥51,066 ¥4,488 ¥9,362 ¥64,916

(c) Information by principal customersOf the sales to external customers, there are no customers to whom the sales exceed 10% of the net sales on the Consolidated Statements of Income for the year ended March 31, 2012, therefore, this information is omitted.

012_9039001372408.indd 40 2012/08/01 13:47:28

41

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

(5) Information about losses on impairment of property, plant and equipment by reportable segmentMillions of yen

March 31, 2012 Japan North America AsiaElimination/

Corporate Total

Losses on impairment ¥– ¥– ¥1,828 ¥– ¥1,828

Thousands of U.S. dollars

March 31, 2012 Japan North America AsiaElimination/

Corporate Total

Losses on impairment $– $– $22,240 $– $22,240

For the year ended March 31, 2011No losses on impairment of property, plant and equipment by reportable segment were noted.

(6) Information about amortization and unamortized balance of goodwill by reportable segmentMillions of yen

March 31, 2012 Japan North America AsiaElimination/

Corporate Total

Balance at end of the year ¥149 ¥– ¥– ¥– ¥149

Thousands of U.S. dollars

March 31, 2012 Japan North America AsiaElimination/

Corporate Total

Balance at end of the year $1,814 $– $– $– $1,814

Millions of yen

March 31, 2011 Japan North America AsiaElimination/

Corporate Total

Balance at end of the year ¥220 ¥– ¥1,758 ¥– ¥1,978

012_9039001372408.indd 41 2012/08/01 13:47:28

42

Not

es to

the

Cons

olid

ated

Fin

anci

al S

tate

men

ts

21. Subsequent Events(1) Resolution of dividendsAt the meeting of the Board of Directors of the Company held on May 10, 2012, the following appropriations were resolved:

Millions of yenThousands of

U.S. dollars

Cash dividends of ¥28.50 ($0.35) per share ¥2,429 $29,552

(2) At the meeting of the Board of Directors held on April 6, 2012, the Company resolved to assign its land, including a part of the site of its Tokyo Plant, in response to the government’s expropriation for construction of the Tokyo Outer Ring Road; consequently the Company concluded a land sales contract effective from the same date.1) Assignee of land

Metropolitan National Road Office, Kanto Regional Development Bureau of the Ministry of Land, Infrastructure, Transport and Tourism

2) Assigned property Land 2,000.77m2

Location 2-547-1, 5-14-5, 5-14-6, and 5-451-1, Tajiri, Ichikawa, Chiba

3) Proceeds from the sale of land and compensation for transfer of property

Millions of yenThousands of

U.S. dollars

Proceeds from the sale of land ¥ 359 $ 4,368Compensation for transfer of property 3,624 44,094Total ¥3,983 $48,462

4) Assignment dates(Location) (Assignment due date)5-14-5, 5-14-6, and 5-451-1, October 31, 2012Tajiri, Ichikawa, Chiba2-547-1, March 31, 2014Tajiri, Ichikawa, Chiba

As of now, the land assignment has not been completed; therefore, the Company recorded the entire amount of proceeds from the sale of land and compensation for the transfer of property as advances received in connection with land expropriation. The Company expects to record them as extraordinary gain of ¥818 million ($9,955 thousand) in the next fiscal year ending March 31, 2013, during which a part of the assignment of the above properties will be completed, followed by recording extraordinary gain of ¥3,145 million ($38,262 thousand) in the fiscal year after the next fiscal year ending March 31, 2014, when the entire assignment will be completed.

012_9039001372408.indd 42 2012/08/01 13:47:29

43

Dire

ctor

y

Directory (As of March 31, 2012)

Maruichi Steel Tube Ltd.•Head Office:9-10, 3 Chome, Kitahorie, Nishi-ku, Osaka 550-0014, JapanTel: +81-6-6531-0101•Sapporo Office:151-5, Kyoei, Kita-hiroshima, Hokkaido 061-1112, JapanTel: +81-11-372-3136•Tokyo Office:3F Yaesu Dai Building, 1-1, 1 Chome, Kyobashi, Chuo-ku, Tokyo 104-0031, JapanTel: +81-3-3272-5331•Nagoya Office:2-4, 1 Chome, Chitose, Atsuta-ku, Nagoya 456-0054, JapanTel: +81-52-651-7221•Osaka Office:3-22, 2 Chome, Itachibori, Nishi-ku, Osaka 550-0012, JapanTel: +81-6-6532-3461•Hiroshima Office:3-72, Minami-myojinmachi, Kaita-cho, Aki-gun, Hiroshima 736-0055, JapanTel: +81-82-821-1901•Fukuoka Office:12F Nihonseimei Building, 2-1, 3 Chome, Hakata-ekimae, Hakata-ku, Fukuoka 812-0011, JapanTel: +81-92-411-1821

•Tokyo Plant:12-1, 2 Chome, Tajiri, Ichikawa, Chiba 272-0014, JapanTel: +81-47-379-1101•Tokyo No.2 Plant:11, 1 Chome, Shiohama, Ichikawa, Chiba 272-0127, JapanTel: +81-47-395-1201•Nagoya Plant:14, Kanaoka, Tobishima-mura, Ama-gun, Aichi 490-1445, JapanTel: +81-567-55-1101•Sakai Plant:16, Ishizu-nishimachi, Nishi-ku, Sakai, Osaka 592-8332, JapanTel: +81-72-241-0301•Osaka Plant:3-2, 7 Chome, Kami-higashi, Hirano-ku, Osaka 547-0002, JapanTel: +81-6-6791-5551•Takuma Plant:6883, Takuma, Takuma-cho, Mitoyo, Kagawa 769-1101, JapanTel: +81-875-83-3301•Sakai Pole Plant:125, 2 Cho, Ishihara-cho, Higashi-ku, Sakai, Osaka 599-8102, JapanTel: +81-72-258-1858•Kashima Pole Plant:3075-27, Shimasu, Itako, Ibaraki 311-2434, JapanTel: +81-299-64-6901

Hokkaido Maruichi Steel Tube Ltd.•Head Office and Tomakomai Plant:134-110, Aza Numanohata, Tomakomai, Hokkaido 059-1364, JapanTel: +81-144-55-3801

Kyushu Maruichi Steel Tube Ltd.•Head Office:12, Meishihama, Nagasu-machi, Tamana-gun, Kumamoto 869-0111, JapanTel: +81-968-78-3711

Shikoku Maruichi Steel Tube Ltd.•Head Office:2112-48, Takuma, Takuma-cho, Mitoyo, Kagawa 769-1101, JapanTel: +81-875-83-4135•Tachibana Plant:12, 2 Cho, Ishihara-cho, Higashi-ku, Sakai 599-8102, JapanTel: +81-72-257-5101

Kasuga Industry Ltd.•Head Office:3-2, 7 Chome, Kami-higashi, Hirano-ku, Osaka 547-0002, JapanTel: +81-6-6791-4912

Maruichi Kohan Ltd.•Head Office:9-10, 3 Chome, Kitahorie, Nishi-ku, Osaka 550-0014, JapanTel: +81-6-6531-8401

Alpha Metal Co., Ltd.•Head Office:850, Inamitsu, Miyawaka, Fukuoka 822-0144 JapanTel: +81-949-52-3355

Okinawa Maruichi Ltd.•Head Office:388-3, Ohira, Urazoe, Okinawa 901-2113, JapanTel: +81-98-876-1801

Maruichi American Corporation•Head Office:11529 Greenstone Avenue, Santa Fe Springs, CA 90670-4697, U.S.A.Tel: +1-562-903-8600

PT. Indonesia Steel Tube Works•Jakarta Office:JI. Rawa Sumur I/No.1, Kawasan Industri Pulogadung, Jakarta13940, IndonesiaTel: +62-21-460-0991•Semarang Office:JI. Simongan 105, Semarang, 50148, P.O.Box 1034 Jawa-Tengah, IndonesiaTel: +62-24-760-0647

Maruichi Metal Product (Foshan) Co., Ltd.•Head Office:Huabao Nan Road, Chengxi Industrial Park, Foshan National HI-TECH, Industries Zone, Chancheng District, Foshan City, Guangdong Province, P.R.ChinaTel: +86-757-8210-8558

Maruichi Metal Product (Tianjin) Co., Ltd.•Head Office:Zhongnan three street, west Tianjin economic development zone area, Tianjin City, ChinaTel: +86-22-5986-8898

Maruichi Sun Steel Joint Stock Company*•Head Office:DT743 Rd., Dong Tac Quarter, Tan Dong Hiep Ward, Di An County, Binh Duong Province, VietnamTel: +84-650-3742777

Maruichi Sun Steel (Hanoi) Company Limited*•Head Office:Binh Xuyen Industrial Zone, Binh Xuyen District, Vinh Phuc Province, VietnamTel: +84-21-13582899

Maruichi Leavitt Pipe & Tube, LLC*•Chicago Headquarters:1717 W, 115th Street, Chicago, Illinois, 60643, U.S.A.Tel: +1-773-239-7700•Jackson Plant:211 Industrial Drive North, Madison, Mississippi, 39130-1186, U.S.A.Tel: +1-601-856-9051

MARuICHI KuMA STeeL TuBe PRIvATe LIMITeD•Head Office:Plot No.27, Sector-2A, IMT Manesar, Gurgaon-122050 (Haryana), IndiaTel: +91-124-2291667-68

J-Spiral Steel Pipe Co., Ltd.•Head Office:Slope47, Highway51, Tam Phuoc, Bien Hoa City, Dong Nai Province, VietnamTel: +84-61-351-1410

* Renamed on or after April 1, 2012.

012_9039001372408.indd 43 2012/08/01 13:47:29

44

Inve

stor

Info

rmat

ion

Name of the Company Maruichi Steel Tube Ltd.Address ofRegistered Office

9-10, 3 Chome, Kitahorie, Nishi-ku, Osaka 550-0014, Japan

Capital ¥9,595,152,375Established December 18, 1947Number of Employees 1,741 (Consolidated basis)

Board of Directors & Corporate Auditors (As of June 27, 2012)

Seiji Yoshimura ChairmanHiroyuki Suzuki PresidentYoshinori Yoshimura DirectorDaiji Horikawa DirectorShozo Suzuki DirectorYoshitaka Meguro DirectorYoshifumi Takasago DirectorTakashi Matsumi Auditor (Full time)Kazuhiro Shimazu AuditorKanji Sasaki AuditorKenjiro Nakano Auditor

Managing Officers (As of June 27, 2012)

Hiroyuki Suzuki President Managing Officer

Yoshinori Yoshimura Vice President Managing Officer, Technical Dept.

Daiji Horikawa Vice President Managing Officer

Shozo Suzuki Senior Managing Officer, General Manager, Administration Dept.

Yuji WadaSenior Managing Officer, General Director of Maruichi Sun Steel Joint Stock Company

Yoshitaka Meguro Senior Managing Officer, Tokyo Office

Yoshifumi TakasagoGeneral Manager, Sakai Plant , Osaka Plant & Quality Assurance Dept.

Teruyuki Horikawa General Manager, Osaka Office

Yukio Iwasaki General Manager, Tokyo Plant & Tokyo No.2 Plant

Shinji Fuji General Manager, Business Dept.

Keito Nakano General Manager, Nagoya Office

Yasuyuki SakaiGeneral Manager, Deputy Director of Maruichi Sun Steel Joint Stock Company

Takeshi Takeuchi General Manager, Office of the President

Yoichiro Okano General Manager, MP Development & ISO Dept.

Minoru Kadono General Manager, Equipment Technology Dept.

Yasuo Kawamua General Manager, Finance Dept.

Major Shareholders

ShareholderNumber of

shares(thousand)

Percentage oftotal sharesissued (%)

JFE Steel Corporation 4,337 4.61

Yoshimura Holdings Limited 4,000 4.26

Sumitomo Mitsui Banking Corporation 3,900 4.15

The Bank of Tokyo-Mitsubishi UFJ, Ltd. 3,886 4.13

Japan Trustee Services Bank, Ltd.(Trust account) 3,050 3.25

Japan Trustee Services Bank, Ltd. (JFE Steel trust account) 3,003 3.19

The Master Trust Bank of Japan, Ltd. (Trust account) 2,847 3.03

Seiji Yoshimura 2,690 2.86

Metal One Corporation 2,069 2.20

Nippon Steel Corporation 2,000 2.13

Shareholder Reference Information

Closing Date of Accounts: March 31 Annual General Meeting: Late June •Record Date:The shareholders who should exert the right of shareholders at the Annual General Meeting of Shareholders shall be those registered as such with voting rights in the final register of shareholders as of March 31 every year.

•Stock Exchange:Tokyo Stock Exchange 1st Section &Osaka Securities Exchange 1st Section

•Place of Transfer:Transfer Agent Division

•Media of Public Notice:Electronic Public Notice at our home page, or Nihon Keizai Shimbun (daily newspaper)

Other than the above, the Company possesses 8,774 thousand shares (9.33%) of treasury stock

Investor Information (As of March 31, 2012)

013_9039001372408.indd 44 2012/07/23 11:43:44

Contents

Disclaimer Regarding Forward-Looking StatementsPlans, strategies and other forward-looking statements about corporate performance published in this report are not based on information concerning events in the past, but are projections based on assumptions and convictions of company executives in light of currently available information. It should be noted that risks and uncertainties are associated with any forward-looking statements included in this report.

1 Consolidated Financial Highlights

2 Message from the Management

6 Medium-Term Management Plan

9 Product Overview

12 Network

14 Consolidated Financial Review

16 Consolidated Balance Sheets

18 Consolidated Statements of Income

19 Consolidated Statements of Comprehensive Income

20 Consolidated Statements of Changes in Net Assets

22 Consolidated Statements of Cash Flows

24 Notes to the Consolidated Financial Statements

43 Directory

44 Investor Information

Profile

Since its establishment in 1947, Maruichi Steel Tube Ltd. has concentrated on accumulating industry-leading technological expertise as a specialist in steel tube production. The Company’s progress has been underpinned by R&D focused on enhancing this core competence.

Maruichi Steel Tube’s network in Japan comprises 20 sales offices providing nationwide coverage, including affiliated companies, and 13 manufacturing plants and logistics centers operating in close proximity based on a business model emphasizing demand-driven production systems. Overseas, the Company has been developing a global business by establishing manufacturing companies in the United States, Indonesia, China, Vietnam and India. Additionally, through persistent efforts to increase the efficiency of manufacturing and logistics, the Company is sharpening the cost competitiveness of products.

Convinced that fulfillment of corporate social responsibility is both a duty and a vital ingredient of business success, Maruichi Steel Tube has put in place corporate governance systems based on the Companies Act. Also, the Company is strengthening its internal control in view of the Financial Instruments and Exchange Act, Japan’s version of the U.S. Sarbanes-Oxley Act (SOX), which accords the prime importance to internal control of financial reporting and is applicable to accounting periods started from April 2008 onward.

Maruichi Steel Tube’s shares, listed on the first sections of the Tokyo Stock Exchange and the Osaka Securities Exchange, have been included in the Nikkei 500 Average since April 2001, underlining the Company’s importance.

005_9039001372408.indd 2 2012/07/23 9:51:36

http://www.maruichikokan.co.jp/

HEAD OFFICE9-10, 3 Chome, Kitahorie,

Nishi-ku Osaka 550-0014, JAPANTelephone: +81-6-6531-0101Facsimile: +81-6-6543-0190

Printed in Japan

ANNUAL REPORT 2012For the year ended March 31, 2012

005_9039001372408.indd 1 2012/07/23 9:51:35