The Fertilizer Distribution Kodan (Public corporation) Ordinance Chapter 1 General Provisions

Art. 1. The Fertilizer Distribution Kodan shall have for its object the performance of the business relative to appropriate and equitable distribution of such fertilizers as prescribed by the order in accordance with quota programs and rationing procedures set up or to be set up by the Director-General of the Economic Stabilization Board. The Fertilizer Distribution Kodan shall be a juridical person.

Art. 2. The main office of the Fertilizer Distribution Kodan shall be established in Tokyo. The Fertilizer Distribution Kodan may with the approval of the competent Minister, establish branch offices at a place necessary for the performance of business relative to distribution.

Art. 3. The authorized fixed capital of the Fertilizer Distribution Kodan shall be ¥ 65,000,000. The authorized fixed capital prescribed in the preceding paragraph shall be subscribed exclusively by the Government. Working capital of the Fertilizer Distribution Kodan shall be obtained by loan, when necessary, from the Reconstruction Finance Bank.

Art. 4. The Fertilizer Distribution Kodan shall stipulate the following matters in its Articles of Incorporation: 1. Object 2. Firm name 3. Location of Office 4. Matters relative to capital 5. Matters relative to officers 6. Matters relative to business and its execution 7. Matters relative to accounting 8. Matters relative to public notice The Articles of Incorporation may be revised with the approval of the Director-General of the Economic Stabilization Board, and the competent Minister.

Art. 5. The Fertilizer Distribution Kodan shall register in accordance with the special provisions of an Imperial Ordinance. The matters required to be registered as provided for in the preceding paragraph shall not be valid against a third person unless they are registered.

Art. 6. The Fertilizer Distribution Kodan shall not be levied income tax and corporation tax. The prefecture, city, town, village and those corresponding to them shall not levy local taxes on the enterprise of the Fertilizer Distribution Kodan. This shall, however, not apply where the Ministers of Home Affairs and Finance have approved under a special circumstance.

Art. 7. The Fertilizer Distribution Kodan shall be dissolved by the nullification of the Temporary Demand Supply Adjustment Law or by the order of the Director-General of the Economic Stabilization Board. In addition to the matters referred to in the preceding paragraph, those necessary for dissolution of the Fertilizer Distribution Kodan shall be prescribed separately by the ordinance.

Art. 8. Any person other than the Fertilizer Distribution Kodan shall not use the words Fertilizer Distribution Kodan or similar words in his firm name.

Art. 9. The provisions of Articles 44, 50, 54 and 57 of the Civil Code and Art. 35, paragraph 1 of the non-litigant case Procedural Law shall apply correspondingly to the Fertilizer Distribution Kodan.

Chapter 2 Officers and Employees

Art. 10. The Fertilizer Distribution Kodan shall have as its officers one president, one vice-president, two or more directors and one or more auditors. The president shall represent the Fertilizer Distribution Kodan and supervise its business in accordance with the provisions of Art. 15. The vice-president shall, as prescribed in the Articles of Incorporation, represent the Fertilizer Distribution Kodan, assist the president in conducting business, act for him in case he cannot take his duty and perform his function in case his post becomes vacant. The directors shall, as prescribed in the Articles of Incorporation, represent the Fertilizer Distribution Kodan, assist the president and vice-president in control of its affairs, and act for them in case their positions become vacant. The auditors shall inspect the business of the Fertilizer Distribution Kodan.

Art. 11. The president, vice-president directors and auditors shall be appointed by the competent Minister.

Art. 12. The president, vice-president and directors may, in accordance with the provisions of the Articles of Incorporation, delegate power to employees of the Fertilizer Distribution Kodan, who shall have authority to perform all juridical and non-juridical matters in regard to the affairs of the main or subordinate offices.

Art. 13. The officers and employees shall not be permitted to be stockholders or employees or to have any beneficial interest in any company or enterprise engaged in the production, storage, purchase, sale and transport of fertilizer.

Art 14. The officers and employees of the Fertilizer Distribution Kodan shall be Government officials or other Government employees. The president shall be of the same class or rank with Vice-Minister of Agriculture and Forestry, and the officials other than the president shall be of first class officials. Other employees shall be of first, second or third class officials. The Competent Minister shall fix the number of the above staff. The officials and employees of the Fertilizer Distribution Kodan shall be governed by all laws and ordinances relating to the Government employees, provided the cases that the special exception concerning the amount of salaries, service rules, and any other necessary matters with approval of the Director-General of Economic Stabilization Board, may be exempted.

Chapter 3 Business

Art. 15. The Fertilizer Distribution Kodan shall perform the following business under the supervision of the competent Minister in accordance with the quota programs, rationing procedures and directions relating thereto set up and issued by the Director-General of the Economic Stabilization Board: 1. Sale purchase and sale of domestic and imported fertilizers at prices established by the Price Board. 2. Storage of fertilizers 3. Necessary arrangement for adequate transportation of fertilizers in accordance with laws and regulations governing the allocation and use of transportation facilities. 4. Appointment of authorized dealers of fertilizers. 5. Assist in the enforcement of law and ordinances governing the distribution and price of fertilizer set by the Economic Stabilization Board and Ministry of Agriculture and Forestry. 6. Enterprises in pursuance with item 1 and item 2. The appointment of item 4 of the preceding paragraph shall be made with the approval of the competent Minister and within terms and conditions set forth by the Director-General of the Economic Stabilization Board.

Art. 16. The Fertilizer Distribution Kodan shall at the commencement of its functioning establish its method of doing business and submit same to the Director-General of the Economic Stabilization Board for his approval. This shall also apply to where a change is to be made thereto. The Director-General of the Economic Stabilization Board shall inquire to the competent Minister and Minister of Finance, in case he approves by the preceding paragraph. In this case the final responsibility for approval shall lay with the Director-General of the Economic Stabilization Board.

Art. 17. The Fertilizer Distribution Kodan shall, at the beginning of the first term and the second term of each business year, establish a business programs and a financial program for every six months and submit same to the Director-General of the Economic Stabilization Board for his approval. This shall also apply where a change is to be made thereto. The Director-General of the Economic Stabilization Board shall inquire to the competent Minister and the Minister of Finance, in case he approves by the preceding paragraph. In this case, the final responsibility for approval shall lay with the Director-General of the Economic Stabilization Board.

Chapter 4 Accounting

Art. 18. The business year of the Fertilizer Distribution Kodan shall be from 1 April each year to 31 March of the following year, and divided into the first term and the second term.

Art. 19. The Fertilizer Distribution Kodan shall prepare a statement of assets, a balance sheet, and a statement of profit and loss for each term of the preceding Article and submit them to the Director-General of the Economic Stabilization Board for his approval within three months after the conclusion of the business year. The Director-General of the Economic Stabilization Board shall inquire to the competent Minister and the Minister of Finance in case he approves by the preceding paragraph. In this case the final responsibility for approval shall lay with the Director-General of the Economic Stabilization Board. The Fertilizer Distribution Kodan shall, when it has obtained the approval of the Director-General of the Economic Stabilization Board prescribed in the first paragraph, make a public notice of the statement of assets, balance sheet, and a statement of profit and loss and keep them together with the Articles of Incorporation in each office. The statement of assets, balance sheet, and statement of profit and loss of the preceding paragraph shall be audited and approved by the Board of Audit. The Fertilizer Distribution Kodan shall, when it has obtained the approval of the Director-General of the Economic Stabilization Board, pay to the National Treasury, the entire profit as determined by stipulations of Ordinance. All books, documents and records of the Fertilizer Distribution Kodan shall be clearly written and available for inspection by the Board of Audit, the Economic Stabilization Board and the competent Ministry The Board of Audit shall make a continual and accurate audit of the preceding paragraph

Chapter 5 Supervision and Fostering

Art. 20. The Director-General of the Economic Stabilization Board shall direct and supervise the Fertilizer Distribution Kodan in regard to quota program and rationing procedures. The Director-General of the Economic Stabilization Board may, when deemed necessary to secure appropriate distribution of fertilizer, issue for supervision a necessary order to the Fertilizer Distribution Kodan. The competent Minister may, when deemed necessary to secure appropriate distribution of fertilizers, issue for supervision a necessary order to the Fertilizer Distribution Kodan within the quota program and rationing procedures set up or to be set up by the Director General of the Economic Stabilization Board. The competent Minister or the Director-General of the Economic Stabilization Board may, when deemed necessary, have the Fertilizer Distribution Kodan submit a report or have an official concerned inspect a place deemed necessary to examine the state of business, books, documents or any other necessary matters. In case the official concerned is sent for inspection and examination in accordance with the provisions of the preceding paragraph, he shall carry an identification certificate to prove his post as prescribed by orders.

Art. 21. The Fertilizer Distribution Kodan shall prepare rules on remuneration for its officers and employees, when deemed necessary to pay special payment to them, and submit to the Director General of the Economic Stabilization Board for his approval. This shall be applied to where a change is to be made thereto. The Director General of the Economic Stabilization Board shall inquire to the competent Minister and the Finance Minister, when he approves by the preceding paragraph. In this case, the final responsibility for approval shall lay with the Director General of the Economic Stabilization Board.

Art. 22. The competent Minister may remove an officer of the Fertilizer Distribution Kodan in case he violates laws and ordinances, Articles of Incorporaion or orders issued on the basis of this Imperial Ordinance. The Director General of the Economic Stabilization Board may remove an officer of the Fertilizer Distribution Kodan, if he considers that he is not suitable or preperly carrying out his duties in connection with the objects and business of the Fertilizer Distribution Kodan

Art. 23. The competent Minister may, when deemed necessary for the operation of the Fertilizer Distribution Kodan, order the liquidater of the Japan Fertilizer Company Ltd. to lease any or all facilities owned by the Company to the Fertilizer Distribution Kodan. The competent Minister may, when deemed necessary for the operation of the Fertilizer Distribution Kodan, order owners, exclusive holders or persons having custody, including the Minister of Finance, of facilities requireed by the Fertilizer Distribution Kodan to lease them to the Fertilizer Distribution Kodan. A fair and adequate rental for the use of such facilities prescribed in the preceding two paragraphs shall be determined by the Director General of the Economic Stabilization Board based on policies established by him. When the rental is determined in accordance with the provisions of the preceding paragraph, the Fertilizer Distribution Kodan shall lease the facilities referred to in the 1st or 2nd paragraph for period of time not exceeding its life, prescribed in Art. 7, paragraph 1, with approval of the Director General of the Economic Stabilization Board. The competent Minister may, when deemed necessary for the operation of the Fertilizer Distribution Kodan, order the liquidator of the Japan Fertilizen Company Ltd. to hand over to the Fertilizer Distribution Kodan any or all materials owned by or in possession of the Japan Fertilizer Company. In case the order of the preceding paragraph is issued the Fertilizer Distribution Kodan shall pay fair compensations to the parties concerned within one month of the materials, referred to in the preceding paragraph, being taken over by the Fertilizer Distribution Kodan. The competent Minister shall not issue the order of the 5th paragraph, unless necessary rules are made for compensation of the preceding paragraph with the approval of the Director General of the Economic Stabilization Board. The competent Minister may, when deemed necessary for the operation of the Fertilizer Distribution Kodan, in accordance with policies established by the Director General of the Economic Stabilization Board and with the approval of the Minister of Transportation, order owners, exclusive holders or persons having custody, including the Minister of Transportation of transportation facilities to make them available for use by the Fertilizer Distribution Kodan. In case of the preceding paragraph, the Fertilizer Distribution Kodan shall pay fair compensation to the parties concerned. The competent Minister shall not issue the order of the 8th paragraph, unless necessry rules are made for compensation of the preceding paragraph with the approval of the Director General of the Economic Stabilization Board. The competent minister shall be responsible to have the Fertilizer Distribution Kodan arrange for care and where deemed necessary, for insurance of all facilities leased by it. The competent Minister may order the Fertilizer Distribution Kodan or other parties concerned, including any Minister, to make prompt arrangements for execution of the preceding paragraph.

Chapter 6 Penalties

Art. 24. Those who violate the provisions prescribed in paragraph 1, 2, 5 or 8 of the preceding Article shall be liable to penal servitude not exceeding five years and, or a fine not exceeding ¥ 50,000.

Art. 25 The Fertilizer Distribution officers and employees who come under and commits an act contrary to one of the following items shall be liable to penal servitude not exceeding 5 years and, or a fine not exceeding 50,000 yen. 1. Those who perform business which is not prescribed in Art. 15. 2. Those who violate an order relative to supervision of the Director General of the Fconomic Stabilization Board or the competent Minister, prescribed in Art 20, paragraph 2 or 3.

Art. 26. Those who fail to report as required under Imperial Ordinance or submit a falsified report or refuse, interfere, or evade inspections shall be liable to a penal servitude not exceeding one year and, or a fine not exceeding ¥ 10,000.

Art. 27. Those who violate the provisions of the preceding three paragraphs may, according to cireumstances, be liable concurrently to a penal servitude and a fine

Art. 28. In case representative of a juridical person or an agent, employee or any other person except the Fertilizer Distribution Kodan engaged by juridical person or a person commits the violation mentioned in Art. 24, with regard to the business of the respective juridical person or the person, the respective juridical person or the person shall be liable to fine of Art. 24, in addition that the offender shall be punished.

Art. 29. Those who used the name of the Fertilizer Distribution Kodan or any other similar name in violation of the provisions of Art. 8 shall be liable to a fine not exceeding 10,000 yen.

Supplementary Provisions:

Art. 30. The date of the enforcement of this Imperial Ordinance shall be set forth separately by an Imperial Ordinance.

Art. 31. The Japan Fertilizer Company Ltd. Law and Special Fertilizer Distribution Control Law shall become null and void at the date of the establishment of the Fertilizer Distribution Kodan. However, as for the application of penalties to acts done by that date, these Laws shall be effective after that date

Art. 32. This Imperial Ordinance shall become null and void as of April 1, 1948, or at the time of the dissolution of the Economic Stabilization Board, whichever the earlier date. The Fertilizer Distribution Kodan shall be dissolved at the time prescribed in the preceding paragraph. In so far as the application of penal regulations for commitments done up to that time and liquidation of the Fertilizer Distribution Kodan are concerned, however, this Imperial Ordinance shall hold good even after that date.

Art. 33. When the Fertilizer Distribution Kodan is established, the Japan Fertilizer Company shall be dissolved. The liquidation of the Japan Fertilizer Company Ltd., in accordance with the provisions of the preceding paragraph shall be finished by the 1st of April, 1948.

Art. 34. The government shall appoint an organizing committee to take charge of works relative to the establishment of the Fertilizer Distribution Kodan.

Art. 35. The organizing committee shall prepare Articles of Incorporation and obtain the approval of the competent Minister and the Director General of the Economic Stabilization Board. The organizing committee shall, when the approval referred to in the preceding paragraph has been given, demand payment of the authorized fixed capital without delay.

Art. 36. The organizing committee, shall when payment of the authorized fixed capital has heen made, transfer its work to the President of the Fertilizer Distribution Kodan without delay. When the President has taken over the work referred to in the preceding paragraph, all of the President, Vice-President, Directors and Auditors shall effect the registration of the establishment without delay. The Fertilizer Distribution Kodan shall come into being upon the registration of the establishment.

Art. 37. The provisions of Art. 8 shall not apply for 6 mcnths from the date of the enforcement of this Imperial Ordinance to those other than the Fertilizer Distribution Kodan who use the name of Fertilizer Distribution Kodan or similar names at the time this Imperial Ordinance is put into effect.

Art. 38. Part of Registration Tax law shall be amended as follows: In Art. 6, par. 1, item 11, "Fertilizer Bond" shall be beleted.