May 9, 2014
To: All concerned parties
Company Name:

Taiheiyo Cement Corporation

Name of Representative:

Shuji Fukuda
President and Representative Director(Code: 5233, First Section of Tokyo Stock Exchange,Fukuoka Stock Exchange)
Contact:

Seiichi Araki, General Manager ofGeneral Affairs Department(Tel: 03-5531-7334 (Int’l: +81-3-5531-7334))

Notice of Corrections on (Unconsolidated) Financial Statements of Past Financial Years
We provide you with this notice as described below due to the fact that we found errors in ourunconsolidated financial statements released in the past and therefore it became necessary to makecorrections in our financial statements from the past financial years.
These corrections are made only for unconsolidated financial statements and do not affect thefigures in the consolidated financial statements.

1.

How the Errors Were FoundIn 1998, we came to a decision to make a complete transfer of our golf business to oursubsidiary, Kabushiki Kaisha Kiyosumi Golf Club (“Kiyosumi”), deposited the membershipdeposits to Kiyosumi, and transferred our golf course assets to Kiyosumi. We reported thedeposits which were deposited to Kiyosumi in the amount of approximately JPY13.3 billion as
security deposit and guaranty money in our balance sheet (“Deposit”).
Thereafter, due to the significant fall in the land price and downturn in golf business,
Kiyosumi’s fixed assets, such as its lands and buildings, were reported as assets, whose value
had been impaired by JPY10.3 billion, after the compulsory application of impairment
accounting in the financial year ending March 31, 2006, and thereby the book value of such
fixed assets became approximately JPY3 billion.
Although the amount of Kiyosumi’s liabilities exceeding its assets increased due to thefact mentioned above, our understanding was that the refund claim cannot be made to
Kiyosumi unless we refund the membership deposits to the golf course members and we makea claim against Kiyosumi for such refunded amount. We also did not report the allowance for
doubtful accounts relating to the Deposit until now because we believed that it was notnecessary to report the allowance for doubtful accounts relating to the Deposit regardless ofKiyosumi’s business condition. With respect to the said account processing, we explained toour accounting auditor, Ernst & Young ShinNihon LLC (“Accountant”), in each financial year,
and the Accountant did not make any notable objections to our explanations. We have also1been receiving the audit report from our Accountant that our accounting is proper at the time ofeach account settlement.
The membership deposit period (10 years) was about to expire in FY2013 under thecircumstances described above and we considered making a claim against Kiyosumi for theamount of membership deposits reduced due to refund of membership deposits made upon
members’ withdrawal of their membership, but we determined that collection of Deposit in theamount equal to the amount of said claim would be very difficult and therefore consulted with
our Accountant with a plan to report the allowance for doubtful accounts relating to the portionof Deposit which is equal to the amount of refund of membership deposits. Our Accountant,however, advised us in March 2014, when the accounting audit for 2013 was conducted, thatrather than handling the Deposit in a way described above, the allowance for doubtful accounts
relating to the Deposit in the amount of approximately JPY10.3 billion should have beenreported starting from the financial year ending March 31, 2006.
After reviewing the reasonableness and other factors of our Accountant’s advice withoutside experts, we came to a conclusion that it would be necessary to make corrections on
financial statements of past financial years and decided to correct them by our board ofdirectors meeting held as of the date of this notice.
We have also conducted an internal investigation together with 12 experts in total
comprised of attorneys of City-Yuwa Partners and certified public accountant of Sekiguchi
Certified Public Accountant Office, in order to analyze the causes which led to the errors and toestablish preventive measures. The scope of investigation was the circumstances and causes
which led to the errors as pointed out by our Accountant and the methods used forinvestigation were interviews with concerned parties within and outside the company andreview of relevant documents. As a result of such investigation, we did not find that we
intentionally made any improper account processing.

2.

Affected Amounts
Our net loss for financial year ending March 31, 2006 (unconsolidated account settlement)
will increase from JPY22.722 billion to JPY33.065 billion by reporting the allowance for
doubtful accounts against Kiyosumi in the amount of JPY10.343 billion in our unconsolidated
profit and loss statement for the financial year ending March 31, 2006. We are also expecting
to make minor adjustment to the amount of allowance for doubtful accounts in accordance withany subsequent change in the amount of Kiyosumi’s net assets.
The corrections are made only for unconsolidated financial statements and do not affectthe figures in the consolidated financial statements.
With respect to the effect on our business performance for the financial year ending March
31, 2014 (unconsolidated account settlement), we were originally planning to report theallowance for doubtful accounts relating to the Deposit for the financial year, which was equal
to the amount of refund of membership deposits made upon members’ withdrawal of theirmembership, as explained in “1. How the Errors Were Found”, but due to the fact that suchreporting of allowance for doubtful accounts becomes unnecessary by the corrections to bemade on the financial statements of past financial years, we have released as of the date of thisnotice a revised annual (unconsolidated) earnings forecast which incorporates such corrections.

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3.

OutlookDue to the corrections to be made on the financial statements of past financial years, bysetting May 13, 2014 as its target date, we are planning on filing the corrected securities reports
and to disclose the corrections made in the summaries of financial statements starting from thefinancial year ending March 31, 2009.

4.

Preventive Measures
We will implement the following measures as preventive measures by taking into accountthe circumstances leading up to the errors in question and the reasons why it occurred:(1)

Enhancing the Knowledge and Strengthening the Handling System relating to AccountSettlement, etc.
One of the reasons for the occurrence of errors in the course of account processing was
the fact that our knowledge and experience in account processing of atypical transaction
were not sufficient. In order to respond to the accounting standards which arebecoming more and more advanced and complicated year by year, we will make efforts
to enhance our knowledge by ways, such as taking planned training sessions outside thecompany, and to strengthen our handling system.

(2)

Exchanging Comments between Our Accounting Department and Accounting Auditor
With respect to new accounting-related events or unusual accounting-related events
which rarely occur, we will make sure that we do not conduct erroneous accountprocessing by exchanging comments with accounting auditor as necessary. In case ofenactment or amendment of accounting standards or practice guidelines, we will sharethem with accounting auditor and conduct account processing after gaining sufficientunderstanding.

(3)

Use of Experts
With respect to handling of unusual accounting-related events and important mattersrelating to account settlement, we will make efforts to perform strict account processing
by not only seeking advice of accounting auditor but also seeking advice of other outside
experts and analysis of relevant departments of our company other than accounting
department such as legal department.

We would like to offer our deepest apologies to our shareholders, customers and other relevant
parties for any troubles and concerns which we may have caused.

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