NIPPON YAKIN KOGYO CO., LTD

1. Approved Matters
   1. ① The structure for ensuring that the execution of duties by directors of Nippon Yakin complies with laws, regulations and the articles of incorporation
   2. ② The structure for ensuring that the execution of duties by employees of Nippon Yakin complies with laws, regulations, and the articles of incorporation
   3. ③ The structure for retention and management of information in relation to the execution of duties by directors of Nippon Yakin
   4. ④ The regulations and other systems related to management of risk of loss of Nippon Yakin
   5. ⑤ The structure to ensure that the execution of duties by directors of Nippon Yakin is performed efficiently
   6. ⑥ The structure for ensuring the propriety of business activities at Nippon Yakin and its corporate group consisting of its subsidiaries

      a) The structure for reporting to Nippon Yakin particulars regarding the execution of duties of directors at subsidiaries of Nippon Yakin
      b) The regulations and other structures related to management of risk of loss of subsidiaries of Nippon Yakin
      c) The structure to ensure that the execution of duties by directors at subsidiaries of Nippon Yakin is performed efficiently
      d) The structure to ensure that the execution of duties by directors and employees at subsidiaries of Nippon Yakin complies with laws, regulations, and the articles of incorporation

   7. ⑦ The structure to ensure the reliability of documents regarding financial calculations and other information
   8. ⑧ In the case of Nippon Yakin’s audit & supervisory board members requesting the assignment of employees to assist with the duties of the audit & supervisory board members, particulars related to said employees
   9. ⑨ Particulars regarding the independence of the employees in the preceding item from the directors
   10. ⑩ Particulars related to ensuring the effectiveness of instructions given by Nippon Yakin’s audit & supervisory board members to employees assisting them with their duties
   11. ⑪ The structure for reporting to Nippon Yakin’s audit & supervisory board members

       a) The structure for Nippon Yakin’s directors and employees to report to Nippon Yakin’s audit & supervisory board members
       b) The structure for directors, audit & supervisory board members, and employees at subsidiaries of Nippon Yakin, or persons that have received reports from these persons, to report to Nippon Yakin’s audit & supervisory board members

   12. ⑫ The structure to ensure that persons making reports in the preceding item are not treated disadvantageously due to making the reports
   13. ⑬ Particulars relating to policies pertaining to procedures for advance payment or reimbursement of expenses arising in the execution of duties of Nippon Yakin’s audit & supervisory board members, and other processing of expenses or obligations arising from said execution of duties
   14. ⑭ Other structures to ensure that audits by Nippon Yakin’s audit & supervisory board members are conducted effectively
2. Details of Approvals
   1. (1) Regarding ① and ② above,
      Nippon Yakin establishes a Code of Conduct for matters to be complied with by all corporate officers and employees, and in carrying out its business, Nippon Yakin complies with laws and regulations inside and outside Japan, respects social rules, and conducts company activities with sound judgment. Nippon Yakin establishes a structure to prevent acts that violate or risk violating laws and regulations through the Compliance Committee, whose chair is a full-time director.
   2. (2) Regarding ③ above,
      Nippon Yakin establishes information management regulations based on relevant laws and regulations under internal regulations for business execution, including the Board of Directors Regulations and establishes a structure to appropriately preserve and manage information, including IT security.
   3. (3) Regarding ④ above,
      Nippon Yakin establishes the Risk Management Regulations for the purpose of creating a structure for gaining an accurate understanding of the status of risks arising as part of business operations and appropriately managing those risks. Along with separate regulations pertaining to serious risks that are already being implemented and the activities of standing committees established for the purpose of smooth implementation of these regulations, these regulations are effectively implemented and risk is appropriately managed.
   4. (4) Regarding ⑤ above,
      Nippon Yakin conducts appropriate and swift decision-making in management corresponding to the importance of the matter, based on the Regulations for Dividing Roles and Responsibilities, Management Meeting Regulations, and Business Operational Regulations, to ensure uninterrupted activities by internal organizations.
      In addition, an executive officer system is instituted to activate and strengthen the function of the Board of Directors and to deal appropriately with the changes in the business environment surrounding Nippon Yakin and the intensification of global competition. The roles and responsibilities relating to the execution of business tasks are clarified, striving for faster-paced management decision-making and execution of business.
      Audits and other business tasks for the purpose of evaluating the effectiveness of and promoting improvements in internal controls are conducted through the Internal Control Office, an organization that operates directly under the representative director.
   5. (5) Regarding ⑥(a) above,
      Nippon Yakin defines the basic management matters and specific operational procedures, including approval requests, that require management and supervision for the subsidiaries and other entities that make up the corporate group (“NAS Group”), and builds a system for ensuring that important information within NAS Group is communicated to Nippon Yakin without fail.
   6. (6) Regarding ⑥(b) above,
      NAS Group companies apply the Risk Management Regulations shared in common with Nippon Yakin, establish separate regulations pertaining to important risks as necessary, and conduct appropriate risk management through their effective implementation.
   7. (7) Regarding ⑥(c) above,
      To ensure uninterrupted activities by internal organizations, each NAS Group company establishes internal regulations on standards for the segregation of duties and the execution of business tasks corresponding to the respective actual company circumstances and conducts appropriate and swift management decision-making corresponding to the importance of the matter.
      The Internal Control Office conducts audits, etc. of business tasks targeting each NAS Group company for the purpose of evaluating the effectiveness of and promoting improvements in internal controls.
   8. (8) Regarding ⑥(d) above,
      In carrying out its business, each NAS Group company complies with laws and regulations inside and outside Japan, respects social rules and conducts company activities with sound judgment. Nippon Yakin and the department in charge of compliance at each NAS Group company cooperate and establish a structure to prevent acts that violate or risk violating laws and regulations.
   9. (9) Regarding ⑦ above,
      Nippon Yakin deeply recognizes that documents regarding financial calculations and other information are extremely important in having persons inside and outside Nippon Yakin confirm the activities of Nippon Yakin’s organization, and that mistakes in such information would cause not only unforeseeable harm for many stakeholders but also a serious loss of credibility for Nippon Yakin’s organization. Nippon Yakin strives through Group-wide efforts to ensure the reliability of documents regarding financial calculations and other information.
      The representative director puts in place a structure for ensuring the reliability of documents regarding financial calculations and other information and appropriately utilizes it. In the case of discovering a material defect that should be disclosed, the representative director promptly takes measures to rectify it.
   10. (10)Regarding ⑧ , ⑨ and ⑩ above,
       If there is a request from audit & supervisory board members, Nippon Yakin shall assign employees to assist with the business tasks of the audit & supervisory board members, and shall listen to the opinions of the audit & supervisory board members regarding their personnel affairs and personnel evaluations.
       In addition, in the case of said employees concurrently performing other business tasks, Nippon Yakin shall give consideration to the independence of said employees and shall give special consideration so that said employees’ performance of business tasks relating to audit & supervisory board members are not impeded.
   11. (11)Regarding ⑪(a) and (b) above,
       When there is a request from audit & supervisory board members, Nippon Yakin shall exchange a memorandum or the like with the audit & supervisory board members that specifically lists the matters that should be reported to the audit & supervisory board members regularly and at each required instance. The aforementioned arrangements shall include matters reported by subsidiaries.
       Audit & supervisory board members shall periodically receive reports from accounting auditors or directors or other persons on the audit & supervisory board as necessary.
   12. (12)Regarding ⑫ above,
       Nippon Yakin shall treat persons making reports in the preceding item in conformance with the Whistleblower Protection System so that they are not treated disadvantageously due to making such reports.
   13. (13)Regarding ⑬ and ⑭ above,
       Nippon Yakin shall strive to pay expenses through advance payments or settlement procedures without delay, corresponding to invoices from audit & supervisory board members regarding expenses arising in the performance of audit & supervisory board member duties.
       In performing business audits deemed necessary by the audit & supervisory board, Nippon Yakin’s directors and employees cooperate with this.

Established: May 12, 2006
Sixth revision : April 28, 2015
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