LR Independent Review Statement

Relating to the Protocol for Accounting and Reporting of Avoided GHG
Emissions through the Value Chain of Cement and Cement-based Products
and the Resulting Avoided GHG Emissions by CO2 absorption of the cement
produced for the fiscal year 2017
This Review Statement has been prepared for Taiheiyo Cement Corporation in accordance with our contract
but is intended for the readers of this Report.

Terms of engagement

Lloyd’s Register Quality Assurance (LR) was commissioned by Taiheiyo Cement Corporation (“the Company”)
to provide independent review of the Protocol for accounting and reporting of avoided GHG emissions throughthe value chain of cement and cement-based products (“the Protocol”) and the resulting avoided GHG
emissions by CO2 absorption of cement produced (“the Report”) for the fiscal year 2017, that is, from 01 April
2017 to 31 March 2018. LR also referred to the following international standards and industry guidelines:• GHG emissions reduction contribution quantification guideline (Ministry of Economy, Trade and Industry,Mar 2018)• GHG Protocol - Product Life Cycle Accounting and Reporting Standard (WBCSD, 2011)• Guidelines from the chemical industry for accounting for and reporting greenhouse gas (GHG) emissions
avoided along the value chain based on comparative studies (WBCSD and ICCA, Oct 2013)• Accounting and Reporting Protocol for Avoided Greenhouse Gas Emissions along the Value Chain ofCement-based Products (Lafarge Holcim, Jan 2016), and• ISO14064-2:2006 Greenhouse gases - Part 2: Specification with guidance at the project level for
quantification, monitoring and reporting of greenhouse gas emission reductions or removalenhancements.
Our review engagement specifically covered the following:• reviewing the Protocol and the CO2 absorption methodology used and developed by the Company asshown in the Appendix, and• evaluating the avoided GHG emissions for the fiscal year 2017 as calculated based on the Protocol.
LR’s responsibility is only to the Company. LR disclaims any liability or responsibility to others as explained in
the end footnote. The Company’s responsibility is for collecting, aggregating, analysing and presenting all thedata and information within the report and for maintaining effective internal controls over the systems fromwhich the report is derived. Ultimately, the report has been approved by, and remains the responsibility of theCompany.

LR’s Opinion

Based on LR’s approach nothing has come to our attention that would cause us to believe the Company has
not, in all material respects:• met the requirements of the Protocol and the Company’s own CO2 absorption methodology• referred to above-listed international standards and industry guidelines, and been consistent withavailable scientific research used by the Company, and• disclosed reliable data and information as no significant error was detected in the Report.
Note: The review engagement, unlike assurance engagements, is based upon the request of and our contract with the Company. In thisengagement, there are no existing standards for evaluating the Protocol and the calculation methodology. Therefore, whether the use of
the Protocol and the calculation methodology itself would provide an assurance on the accuracy of reported data was not assessed.

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LR’s approach

The following tasks though were undertaken as part of the evidence gathering process for this review
engagement:• confirming that there were no significant errors, omissions or mis-statements in the Report• interviewing with the key persons responsible for preparing the Protocol and the Report, and• sampling datasets and tracing activity data back to aggregated levels.

Observations••

LR observed that there were fluctuations in the calculation of avoided GHG emissions due to limited datacollection and differences in assumptions made. The Company should evaluate these fluctuations andfurther assess the conservativeness of the methodology for avoided GHG emissions.
The Report only applied the “calculation methodology for the CO2 absorption of the cement” that wasdeveloped based on the Protocol. The Company should establish a new methodology for avoided GHG
emissions using its own technology to further demonstrate the effectiveness of its future reports.

LR’s standards, competence and independence

LR implements and maintains a comprehensive management system that meets accreditation requirements
for ISO 14065 Greenhouse gases – Requirements for greenhouse gas validation and verification bodies for use
in accreditation or other forms of recognition and ISO/IEC 17021-1 Conformity assessment – Requirements forbodies providing audit and certification of management systems – Part 1: Requirements that are at least as
demanding as the requirements of the International Standard on Quality Control 1 and comply with the Codeof Ethics for Professional Accountants issued by the International Ethics Standards Board for Accountants.
LR ensures the selection of appropriately qualified individuals based on their qualifications, training andexperience. The outcome of all verification and certification assessments is then internally reviewed by senior
management to ensure that the approach applied is rigorous and transparent.
This is the only work undertaken by LR for the Company and as such does not compromise our independence
or impartiality.
SignedDated: 20 March 2019

Norihiko Kinoshita
LR Lead Verifier
On behalf of Lloyd’s Register Quality Assurance Limited
Queen’s Tower A, 10th Floor, 2-3-1, Minatomirai, Nishi-ku, Yokohama 220-6010, JapanLR reference: YKA00000352
Lloyd's Register Group Limited, its affiliates and subsidiaries, including Lloyd’s Register Quality Assurance Limited (LRQA), and theirrespective officers, employees or agents are, individually and collectively, referred to in this clause as 'Lloyd's Register'. Lloyd's Registerassumes no responsibility and shall not be liable to any person for any loss, damage or expense caused by reliance on the information oradvice in this document or howsoever provided, unless that person has signed a contract with the relevant Lloyd's Register entity for theprovision of this information or advice and in that case any responsibility or liability is exclusively on the terms and conditions set out inthat contract.
The English version of this Assurance Statement is the only valid version. Lloyd’s Register Group Limited assumes no responsibility forversions translated into other languages.
This Assurance Statement is only valid when published with the Report to which it refers. It may only be reproduced in its entirety.
Copyright © Lloyd's Register Quality Assurance Limited, 2019. A member of the Lloyd’s Register Group.

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