corporate governance - ajinomoto · corporate governance. last ... sustainable growth through the...

1

Corporate Governance Last updated: June 30, 2017

Ajinomoto Co., Inc. Representative Director, President & Chief Executive Officer: Takaaki Nishii

Direct inquiries to: Corporate Planning Dept. +81-3-5250-8157 Securities code: 2802

http://www.ajinomoto.com/en/ir/ The status of the corporate governance of Ajinomoto Co., Inc. is laid out below.

I. Basic philosophy concerning corporate governance, capital composition, and other fundamental corporate information

1. Basic philosophy

The Ajinomoto Group has passed down the commitment of its founding to improve people’s nutrition through umami seasonings that make simple foods taste better. We have achieved growth consistently since our founding through initiatives that create both social and economic value through our businesses. We call these initiatives Ajinomoto Group Shared Value (ASV). Our goal is to achieve sustainable growth through the evolution of ASV by actively contributing to solutions for the issues that are faced by 21st century human society, most notably global sustainability, food resources, and healthy living, through our businesses. Ajinomoto Co., Inc. recognizes that corporate governance represents one of the most important aspects of its management foundation for accelerating its ASV efforts and achieving its vision of becoming a genuine global specialty company. To this end, the entire Ajinomoto Group works as one under the Ajinomoto Group Principles to reinforce and enhance corporate governance through engagement and collaboration with stakeholders and through continual efforts in developing and properly implementing its internal control system.

[Reason why each principle of the Corporate Governance Code is followed]

Ajinomoto Co., Inc. is implementing each principle of the Corporate Governance Code.

[Disclosures in accordance with each principle of the Corporate Governance Code]

Principle 1.4 Cross-Shareholdings (1) Ajinomoto Co., Inc. acquires and holds shares in business partners mainly at their request in order to build positive business

relationships with these business partners and facilitate the implementation of our business. We will continue to hold the shares of business partners as long as we determine that it will strengthen our business relationships and as an extension contribute to the growth of our business. However, every year we will review cross-shareholdings through the Board of Directors and will sell the shares of companies for which there is little rationale to hold the shares, based on a careful examination of stock prices and market trends.

(2) Excluding instances of significant damage to shareholder value or serious concerns over corporate governance, we will exercise voting rights from cross-shareholdings in a way that can strengthen our business relationships with business partners.

Principle 1.7 Related Party Transactions When a director who serves concurrently as the president of a subsidiary (excluding wholly owned subsidiaries) is the counterparty in a transaction with Ajinomoto Co., Inc. and other similar instances, the details of the transaction with regard to competition or conflict of interest involving the director will be indicated and approval first sought from the Board of Directors. Transactions with major shareholders will be carried out in accordance with “Fair and Transparent Transactions” in the Ajinomoto Group Standards of Business Conduct, disclosed on the webpage at the link below, and for these transactions, we will abide by the Ajinomoto Group Basic Purchasing Policy. Ajinomoto Group Principles “3. Fair and Transparent Transactions”

http://www.ajinomoto.com/en/aboutus/vision/group/business.html

Ajinomoto Group Basic Purchasing Policy

http://www.ajinomoto.com/en/aboutus/vision/purchase/index.html

2

Principle 3.1 Full Disclosure and Transparency (1) Our philosophy and management vision are disclosed on the following website: http://www.ajinomoto.com/en/aboutus/vision/

Our FY2017-2019 Medium-Term Management Plan is disclosed on the following website: https://www.ajinomoto.com/en/ir/strategy/managementplan.html

(2) Our basic philosophy on corporate governance is the same as that found in “I.1 Basic philosophy” in this report.

(3) The policy and procedures used by the Board of Directors for determining the compensation of directors are the same as those

found in II.1 [Director compensation] Disclosure of the process for determining the compensation amount and its calculation method in this report.

(4) The election of director candidates is based on the findings of our Nominating Advisory Committee. For the election of director

candidates, Ajinomoto Co., Inc. maintains a basic policy of having its Board of Directors be composed of directors from inside the company who have specialist skills and knowledge about each business segment, corporate functions, research, and development,, among other areas. The Board of Directors also includes several outside directors who can proactively share their views and point out issues with regard to growth strategy and governance from an external independent standpoint. This enables appropriate and agile decision making to be carried out and supervisory duties fulfilled with regard to the company’s business activities by the entire Board of Directors, given the fact that they are global in nature and span many business segments, including foods and AminoScience, among others. The selection of the Audit & Supervisory Board members candidates is carried out by the Audit & Supervisory Board under a basic policy to ensure the sound and sustained growth of the Ajinomoto Group and to establish a high quality corporate governance system that can stand up to the trust placed in the company by society. Shareholder meeting proposals for the selection of the Audit & Supervisory Board members are submitted at the request of the Audit & Supervisory Board. At least one of the Audit & Supervisory Board member candidates must be an individual with considerable knowledge of finance and accounting, and three candidates for Audit & Supervisory Board members (external) are selected, while each must possess advanced expertise in laws or accounting or have advanced knowledge of corporate management. In addition, based on the recognition that it is important to reflect diverse values and approaches in business management, women are appointed to executive officer and other senior management positions. In order to respond to the globalization of our management, non-Japanese nationals are actively appointed as corporate executive officers and senior management of Ajinomoto Co., Inc. Currently, there is one female director, two female corporate executive officers, and four female corporate fellows, and there are four corporate executive officers who are non-Japanese nationals.

(5) The reason for electing director candidates is the same as that found in Proposal No. 3 “Election of 9 Directors” found in the General Meeting of Shareholders’ reference documents from the Notice of Convocation of the 139th Ordinary General Meeting of Shareholders. The Notice of Convocation of the 139th Ordinary General Meeting of Shareholders is disclosed on the following website. https://www.ajinomoto.com/en/ir/event/meeting/main/018/teaseritems1/0/linkList/0/139notice.pdf The reason for electing outside director candidates is the same as that found in II.1 [Directors] Relationship with the company (2) in this report.

The reason for the election of the Audit & Supervisory Board members is the same as that found in Proposal 2 “Selection of 5 Audit & Supervisory Board members” found in the General Meeting of Shareholders’ reference documents from the Notice of Convocation of the 138th Ordinary General Meeting of Shareholders. The Notice of Convocation of the 138th Ordinary General Meeting of Shareholders is disclosed on the following website: https://www.ajinomoto.com/jp/ir/event/meeting/main/02/teaseritems1/0/linkList/0/link/138th-notice-J.pdf The reason for electing Audit & Supervisory Board members (external) candidates is the same as that found in II.1 [Audit & Supervisory Board members ] Relationship with the company (2) in this report.

3

Supplementary Principle 4.1.1 Scope of Matters Delegated to Management The Board of Directors determines matters on its own in accordance with laws and regulations and important aspects of business execution defined in the Regulations of the company. Authority for the execution of other duties is delegated to corporate executive officers broken down into Executive Committee, senior corporate executive officer, and corporate executive officer, in accordance with company regulations. Heads of regional divisions, heads of organizations carrying out business operations, and heads of subsidiaries are also given authority for executing business operations on a daily basis. Furthermore, details are provided with regard to procedures for the delegation of authority and decision making in “II.2 Matters related to the execution of duties, audit and supervision, nominations, and determining compensation, etc. (Summary of current corporate governance system)” and “IV.2. Matters related to internal control systems.”

Principle 4.8 Effective Use of Independent Outside Directors Currently, Ajinomoto Co., Inc. has appointed three Audit & Supervisory Board members. These three directors have been reported to the Tokyo Stock Exchange as independent officers.

Principle 4.9 Independence Standards and Qualification for Independent Outside Directors The standards used by Ajinomoto Co., Inc. to determine the independence of Audit & Supervisory Board members is the same as that found in II.1 [Independent directors/auditors] Other matters concerning independent directors/auditors in this report.

Supplementary Principle 4.11.1 Approach to Diversity and Capacity of the Board of Directors Ajinomoto Co., Inc. maintains a basic policy for its Board of Directors to be composed of directors from inside the company who have specialist skills and knowledge about each business, corporate functions, and research and development, among other areas, and several outside directors who can proactively share their views and point out issues with regard to growth strategy and governance from an external independent standpoint. This ensures that appropriate and agile decision making can be carried out and supervisory duties fulfilled with regard to the company’s business activities by the entire Board of Directors, given the fact that they are global in nature and span many business segments, including foods and AminoScience, among others. The Board of Directors must comprise no more than 15 directors per the provisions of the Articles of Association. Currently, the Board of Directors comprises a total of nine directors, including three independent outside directors (one of whom is female).

Supplementary Principle 4.11.2 Other Mandates of Directors and Corporate Auditors The status of other important mandates of directors and Audit & Supervisory Board members is the same as that found in 5. [Election Status of Executive Officers] in the 139th Securities Report. The 139th Securities Report is disclosed on the following website. https://www.ajinomoto.com/en/ir/library/securitie.html

The status of other important mandates of outside directors and Audit & Supervisory Board members (external) is the same as that found in II.1 [Directors] Relationship with the company (2) and [Audit & Supervisory Board members] Relationship with the company (2) in this report.

Supplementary Principle 4.11.3 Self Evaluation of Effectiveness of the Board of Directors

(1) During fiscal 2016, the Board of Directors convened meetings on 18 occasions (12 ordinary meetings and 6 extraordinary meetings) and important matters related to the execution of business operations were decided and reported on in a timely manner without delay. Outside directors receive advanced briefings on matters to be resolved and reported at the Board of Directors meeting from the secretariat to examine proposals and other matters beforehand. Based on this, they proactively share their views at Board of Directors meetings and their views are reflected in resolutions passed by the Board of Directors and in the execution of duties by directors and executive officers. The Audit & Supervisory Board members review matters to be discussed at Board of Directors meetings in advance and when necessary they receive prior briefings from directors and other related parties. Based on this, they identify issues and proactively state their views before, during, or after Board of Directors meetings from the standpoint of compliance with laws and the Articles of Association and risk management. Their views are reflected in resolutions passed by the Board of Directors and in the execution of duties by directors and executive officers.

(2) Ajinomoto Co., Inc. engages in a wide range of business operations around the world, including foods and AminoScience, and one goal of the company is to have a Board of Directors that can execute appropriate and agile decision-making as well as carry out its role of supervising the execution of duties befitting of a genuine global specialty company. As part of these efforts, starting in fiscal 2015, directors and Audit & Supervisory Board members are asked to take self-evaluation surveys, while analysis by outside lawyers is also conducted, with the results being examined by the Board of Directors. Based on these results, the company is promoting reforms to be made to the Board of Directors.

4

(3)The self-evaluation survey concerning the effectiveness of the Board of Directors conducted for fiscal 2016 indicated generally high scores for the effectiveness of the Board of Directors, with scores even higher than the results of the survey for fiscal 2015. The company believes this indicates the positive outcome of reform efforts it has made over the previous one-year period to heighten the effectiveness of the Board of Directors. In particular, significant improvements were observed in the following three areas.

1) Increased discussions on the direction of corporate strategy and medium- to long-term policy 2) Heightened effectiveness of discussions 3) Increased opportunities for outside directors to obtain information on the company, but it was found there is still further

improvements to be made regarding the following. Based on these, the company continues to examine the best possible approaches for the Board of Directors

1. Sufficient provision of information on deliberations by the Nominating Advisory Committee to the Board of Directors 2. Increase the number of comments from internal directors 3. Further consideration of matters for resolution and matters for reporting 4. Follow up and feedback on matters resolved by the Board of Directors in the past 5. Distribute documents at an earlier stage 6. Improve the content of documents

Additionally, the summary of the evaluation of the effectiveness of the Board of Directors is disclosed at the following website.

https://www.ajinomoto.com/jp/ir/strategy/corp_ gov/main/00/teaserItems1/0/linkList/01/link/2016_ evaluation_ J.pdf

Supplementary Principle 4.14.2 Training Policy for Directors and Corporate Auditors Directors who are originally from inside the company are given necessary support by the company for self-improvement. Additionally, every year experts from outside the company are invited to exchange views, and mandatory executive officer training for all directors and corporate executive officers is held in which presentations are made on management themes and management challenges, with solutions shared and addressed by participants. The Audit & Supervisory Board members originally from inside the company participate in outside seminars to learn the knowledge that is necessary for Audit & Supervisory Board members. As necessary, some learn about auditing procedures, related laws and regulations such as the Companies Act, and necessary financial and accounting knowledge and other subjects for accounting audits. They also attend Board of Directors meetings, Executive Committee meetings, and other meetings. Through regular liaison meetings held involving Audit & Supervisory Board members serving within the Ajinomoto Group, they obtain necessary information and strive to enhance their auditing capabilities. In order to deepen their understanding of the Ajinomoto Group, outside directors and Audit & Supervisory Board members (external) receive briefings on the business and operations of each sector of the company and are given the opportunity to visit major business sites.

Principle 5.1 Policy for Constructive Dialogue with Shareholders The policy of Ajinomoto Co., Inc. on establishing a framework and initiatives for promoting constructive dialogue with shareholders is as follows. (1) The Senior Corporate Executive Officers (members of the Executive Committee) in charge of investor relations are the persons

responsible for all dialogue with shareholders. The general managers of the Corporate Planning Dept., Public Communications Dept., Legal Dept., and Finance & Accounting Dept. as well as the head of the IR Group within the Finance & Accounting Dept. serve as assistants to these persons.

(2) Persons in charge of corporate planning, public communications, and IR hold an information liaison meeting once monthly to ensure that matters requiring public disclosure are announced with certainty and without delay. Persons in charge also share future plans and the status of preparations underway for announcements.

(3) Financial results briefings, medium-term management plan briefings, and other briefings on matters requiring timely disclosure are held.

(4) The IR Group of the Finance & Accounting Dept. holds dialogue with shareholders as well as institutional investors to identify opinions and concerns of shareholders and institutional investors obtained throughout this dialogue. The IR Group reports this to senior management monthly and shares this information with persons in charge of corporate planning and public communications.

(5) Training is held for persons in charge of dialogue with shareholders with regard to the management of insider information. Additionally, in cases where executive officers and employees are involved with projects that correspond to material undisclosed information, the company and the relevant individuals conclude a confidentiality agreement in advance of each applicable matter.

2. Capital composition

5

Ratio of shares held by foreign ownership More than 20% but less than 30%

[Major shareholders]

Name Number of shares held (shares) Ratio

The Master Trust Bank of Japan, Ltd. (trust account) 50,779,500 8.88%

Japan Trustee Services Bank, Ltd. (trust account) 32,930,000 5.76%

The Dai-ichi Life Insurance Company, Limited 26,199,500 4.58%

Nippon Life Insurance Company 25,706,886 4.50%

The Bank of Tokyo-Mitsubishi UFJ, Ltd. 20,149,348 3.52%

Meiji Yasuda Life Insurance Company 12,624,505 2.21%

Mitsubishi UFJ Trust and Banking Corporation 11,548,750 2.02%

Sompo Japan Nipponkoa Insurance Inc. 10,239,494 1.79%

Mizuho Bank, Ltd. 10,045,897 1.76%

STATE STREET BANK WEST CLIENT – TREATY 505234 (permanent proxy: Settlement & Clearing Services Division, Mizuho Bank, Ltd.) 9,322,987 1.63%

Presence of controlling shareholder (excluding parent company) —

Presence of parent company None

Supplementary Explanations

○ Major Shareholders

1. The large shareholdings report provided for the inspection of the public on October 21, 2016 indicates that Mizuho Bank, Ltd. and joint owners own the number of shares in the table below as of October 14, 2016. However, the actual number of shares in the name of these corporate entities could not be confirmed by Ajinomoto Co., Inc. as of the end of the fiscal year under review, so the information appearing in “Major Shareholders” above does not include this information. Details found on the large shareholdings report “2. Matters concerning the submitter” are as follows.

Name Address Number of shares held (thousand shares)

Ratio of shares held to total issued and

outstanding shares (%) Mizuho Bank, Ltd. 1-5-5 Otemachi, Chiyoda-ku, Tokyo-to 13,028 2.28

Asset Management One Co., Ltd.

1-8-2 Marunouchi, Chiyoda-ku, Tokyo-to 21,317 3.73

2. The large shareholdings report provided for the inspection of the public on January 11, 2017 indicates that The Bank of Tokyo- Mitsubishi UFJ, Ltd. and joint owners own the number of shares in the table below as of December 29, 2016. However, the actual number of shares in the name of these corporate entities could not be confirmed by Ajinomoto Co., Inc. as of the end of the fiscal year under review, so the information appearing in “Major Shareholders” above does not include this information. Details found on the large shareholdings report

“2. Matters concerning the submitter” are as follows.



outstanding shares (%) The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2-7-1, Marunouchi, Chiyoda-ku, Tokyo-to 20,149 3.52

6

Mitsubishi UFJ Trust and Banking Corporation


Mitsubishi UFJ Kokusai Asset Management Co., Ltd.

1-12-1 Yurakucho, Chiyoda-ku, Tokyo-to 4,994 0.87

Mitsubishi UFJ Morgan Stanley Securities Co., Ltd.

2-5-2 Marunouchi, Chiyoda-ku, Tokyo-to 583 0.10

3. The large shareholdings report provided for the inspection of the public on March 22, 2017 indicates that Sumitomo Mitsui Trust Bank Limited and joint owners own the number of shares in the table below as of March 15, 2017. However, the actual number of shares in the name of these corporate entities could not be confirmed by Ajinomoto Co., Inc. as of the end of the fiscal year under review, so the information appearing in “Major Shareholders” above does not include this information. Details found on the large shareholdings report “2. Matters concerning the submitter” are as follows.



outstanding shares (%) Sumitomo Mitsui Trust Bank Limited


Sumitomo Mitsui Trust Asset Management Company, Ltd.

3-33-1 Shiba, Minato-ku, Tokyo-to 924 0.16

Nikko Asset Management Co., Ltd.

9-7-1 Akasaka, Minato-ku, Tokyo-to 11,344 1.98

3. Corporate information

Stock exchange of listing and market Tokyo / First Section

Fiscal year end March

Sector Foods

Number of employees (consolidated) at the end of the most recent fiscal year 1,000 or more

Net sales (consolidated) at the end of the most recent fiscal year 1 trillion yen or more

Number of consolidated subsidiaries at the end of the most recent fiscal year More than 49 but less than 100

4. Guidelines on measures for the protection of minority shareholders when engaging in business transactions with a controlling shareholder

—

5. Other special matters that may seriously affect corporate governance

—

7

II. Business management organizations related to management decision-

making, execution, and supervision, and other corporate governance structures

1. Matters related to organizational management and institution structure, etc.

Format of organization Company with a board of corporate auditors

[Board of Directors] Number of directors per the Articles of Association 15

Term of directors per the Articles of Association 2 years

Chair of the Board of Directors Chairman (excluding instances where the chairman serves concurrently as the president)

Number of directors 9

Appointment of outside directors Appointed

Number of outside directors 3

Number of outside directors designated as independent directors 3

Relationship with the company (1)

Name

Category

Relationship with the company

a b c d e f g h i j k

Sakie T. Fukushima From another company Yasuo Saito Other ○ Takashi Nawa Academic

* Items to select for relationship with the company * The box is marked with a ○ symbol if the item “currently/recently”

corresponds to the person or △ if the item corresponds to the person in the “past.” * The box is marked with a ● if the item

“currently/recently” corresponds to a family member, or with a ▲ if the item corresponds to a family member in the “past.” a. An executive officer of a listed company or its subsidiary b. An executive officer or non-executive officer director of the parent company of a listed company c. An executive officer of a fellow subsidiary of a listed company d. An individual or executive officer that undertakes major transactions with a listed company e. The main business partner of a listed company or its executive officer f. A consultant, accounting professional, or legal professional who receives large sums of monetary or other compensation from a

listed company in addition to the compensation received as an officer g. A major shareholder of a listed company (if the major shareholder is a corporation, an executive officer of the corporation) h. An executive officer (individual only) of a business partner of a listed company (in which d, e, and f above are not applicable) i. An executive officer (individual only) of a company which has a relationship of mutual appointment of outside directors j. An executive officer (individual only) of an organization receiving donations from a listed company k. Other

8


Name Independent director

Supplementary explanation of applicable items Reason for election

Sakie T. Fukushima ○ (Status of other important mandates) Representative Director and President of G&S Global Advisors Inc. Outside director of Bridgestone Corporation Outside director of J. Front Retailing Co. Ltd. Outside director of Ushio Inc.

o capitalize on her in-depth knowledge and experience concerning international corporate management and advanced understanding of human resources with a global mindset, and her experience as an outside director of other prominent listed companies. She will be able to provide various forms of guidance related to the management of Ajinomoto Co., Inc. based on her objective perspective, and the fact there is no concern a conflict of interest will arise between her and general shareholders.

Yasuo Saito ○ Ajinomoto Co., Inc. has a contractual business relationship with the Japanese Olympic Committee on which Yasuo

Saito serves as a Senior Executive Board Member. The amount paid by Ajinomoto Co., Inc. to this organization during the fiscal year ended March 31, 2017 equated to less than 0.5% of the organization’s sales for the fiscal year ended March 31, 2017, while the amount paid by the organization to Ajinomoto Co., Inc. during the fiscal year ended March 31, 2017 equated to 0.01% of Ajinomoto Co., Inc.’s sales for the fiscal year ended March 31, 2017. Therefore, Mr.SaitoFulfills the requirements of independence to serve as an outside director of Ajinomoto Co., Inc.

(Status of other important mandates) Senior Executive Board Member of the Japanese Olympic Committee

To capitalize on his in-depth knowledge and experience internationally as a diplomat for the management of Ajinomoto Co., Inc. and because there is no concern a conflict of interest will arise between him and general shareholders.

Takashi Nawa ○ (Status of other important mandates) Professor, Graduate School of International Corporate Strategy, Hitotsubashi University Representative Director of Genesis Partners, Co., Ltd. Outside Director of NEC Capital Solutions Ltd. Outside Director of Fast Retailing Co., Ltd. Outside Director of Denso Corporation

To capitalize on his advanced understanding of international business management developed from his wealth of real-world experience in consulting for non-Japanese companies, etc., and in-depth knowledge as a Professor with the Graduate School of International Corporate Strategy at Hitotsubashi University. This will enable him to fulfill an appropriate role in the supervision of the execution of business operations of Ajinomoto Co., Inc. from an independent and fair position. Furthermore, there is no concern a conflict of interest will arise between him and general shareholders.

Presence of a discretionary committee equivalent to a nomination committee or compensation committee

Yes

9

Status of discretionary committees, composition, and attribution (chairpersons)

Status of discretionary committees, composition, and attribution (chairpersons)

Name of committee

Members (persons)

Permanent members

(persons)

Directors (persons)

Outside directors

(persons)

Outside experts

(persons)

Other (persons)

Chair

Discretionary committee equivalent to nomination committee

Nominating Advisory Committee

4 0 1 3 0 0 Outside Director

Discretionary committee equivalent to compensation committee

Compensation Advisory Committee

5 0 1 3 0 1 Outside Director

Supplementary Explanations

The Nominating Advisory Committee deliberates on nomination proposals for candidates for the Board of Directors, election proposals for chairman and president, as well as election proposals for representative director based on advice from the Board of Directors. The results of these deliberations are reported to the Board of Directors.

The Compensation Advisory Committee deliberates on proposals for compensation of directors and executive officers based on advice from the Board of Directors. The results of these deliberations are reported to the Board of Directors.

[Board of Corporate Auditors] Presence of Audit & Supervisory Board Yes

Number of Audit & Supervisory Board members per the Articles of Association 5

Number of Audit & Supervisory Board members 5

Collaboration between Audit & Supervisory Board members, the accounting auditor, and the internal audit department

The Audit & Supervisory Board members and the accounting auditor regularly hold meetings together regarding audits of quarterly financial results and fiscal year-end financial results, through which they exchange information. Both also go over each other’s audit plan at the beginning of the fiscal year and meet in person to take stock of the audit at the end of the fiscal year. Both convene other meetings between them regularly as needed. The Audit & Supervisory Board members and the internal audit department (Internal Auditing Department) regularly meet on a quarterly basis to receive the report on the results of the audit carried out by the internal audit department and to exchange views. The Audit & Supervisory Board membersalso receive summary explanations of the audit plan of the Internal Auditing Department at the start of the fiscal year and explain the Audit & Supervisory Board members ’ audit plan to the Internal Auditing Department. Both convene other meetings between them regularly as needed to share views. Appointment of Audit & Supervisory Board members (external) Appointed

Number of Audit & Supervisory Board members (external) 3

10

Number of Audit & Supervisory Board members (external) designated as independent directors 3


Name Category Relationship with the company

a b c d e f g h i j k l m

Masami Hashimoto Certified Public Accountant ○ Atsushi Toki Attorney ○ Hiroshi Murakami From another company

* Items to select for relationship with the company * The box is marked with a ○ symbol if the item “currently/recently” corresponds to the person, or with a △ if the item corresponds

to the person in the “past.” * The box is marked with a ● if the item “currently/recently” corresponds to a family member, or with a ▲ if the item corresponds to

a family member in the “past.” a. An executive officer of a listed company or its subsidiary b. A non-executive officer director or accounting advisor of a listed company or its subsidiary c. An executive officer or non-executive officer director of the parent company of a listed company d. A corporate auditor for the parent company of a listed company e. An executive officer of a fellow subsidiary of a listed company f. An individual or executive officer that undertakes major transactions with a listed company g. The main business partner of a listed company or its executive officer h. A consultant, accounting professional or legal professional who receives large sums of monetary or other compensation from a

listed company in addition to the compensation received as an officer i. A major shareholder of a listed company (if the said major shareholder is a corporation, an executive officer of the said

corporation) j. An executive officer (individual only) of a business partner of a listed company (in which f, g, and h above are not applicable) k. An executive officer (individual only) of a company which has a relationship of mutual appointment of outside directors l. An executive officer (individual only) of an organization receiving donations from a listed company m. Other


Name Independent auditor

Supplementary explanation of applicable items Reason for appointment

Masami Hashimoto ○

(Status of other important mandates) Representative, Hashimoto Certified Public Accountants

To capitalize on his professional knowledge and wealth of experience as a Certified Public Accountant both in Japan and internationally, and his expertise in finance and accounting, both of which can be utilized in the execution of his duties as an Audit & Supervisory Board member (external). Also, there is no concern a conflict of interest will arise between him and general shareholders.

11

Atsushi Toki ○ (Status of other important mandates) Partner, Seiwa Meitetsu Law Office Outside Director and Audit & Supervisory Board Member, Maruyama MFG Co., Ltd. Outside Director, GEOSTER Corporation

To capitalize on his professional knowledge and wealth of experience as an attorney, and his particularly in-depth knowledge of the Companies Act, which can be utilized in the execution of his duties as an Audit & Supervisory Board member(external). Also, there is no concern a conflict of interest will arise between him and general shareholders.

Hiroshi Murakami ○ (Status of other important mandates) Visiting Professor, Center for Global Discovery, Sophia University

To capitalize on his extensive experience in corporate management both in Japan and internationally, and his knowledge as the head of a legal department, both of which can be utilized in the execution of his duties as an Audit & Supervisory Board member (external). Also, there is no concern a conflict of interest will arise between him and general shareholders.

[Independent directors/auditors]

Number of independent directors/auditors 6

Other matters concerning independent directors/auditors The standards of independence used by Ajinomoto Co., Inc. for outside officers are as follows.

Ajinomoto Co., Inc.’s outside directors or Audit & Supervisory Board members (external) must not fall under any of the following categories in order to be considered independent.

(1) An individual or executive officer that undertakes major transactions with Ajinomoto Co., Inc. (2) A main business partner of Ajinomoto Co, Inc. or its executive officer (3) A consultant, accounting professional, or legal professional who receives large sums of monetary or other compensation from

Ajinomoto Co., Ltd. in addition to the compensation received as an officer (if the entity receiving the said compensation is a corporation, association, or other organization, an individual that belongs to said organization)

(4) An individual who corresponded to any of (1) through (3) in the past year (5) A family member within the second degree of an individual who corresponds to any of 1 through 3 below (excluding non-

important individuals) 1. An individual who corresponds to (1) through (4) above 2. An executive officer of a subsidiary of Ajinomoto Co., Inc. (including non-executive officer directors in cases where an Audit

& Supervisory Board member (external) is designated as an independent auditor) 3. An individual who corresponded to 2 or was a corporate executive officer of Ajinomoto Co., Inc. during the past year

(including non-executive officer directors in cases where an Audit & Supervisory Board member (external) is designated as an independent auditor)

Note 1. “An individual that undertakes major transactions with Ajinomoto Co., Inc.” is defined as someone who received payments from Ajinomoto Co., Ltd. during the most recent fiscal year that was either 2% of the individual’s total annual consolidated net sales or 100 million yen, whichever is higher.

Note 2. “A main business partner of Ajinomoto Co., Inc.” is defined as someone who made payments to Ajinomoto Co., Ltd. during the most recent fiscal year that was either 2% of the total annual consolidated net sales of Ajinomoto Co., Inc. or 100 million yen, whichever is higher.

Note 3. “Receives large sums of monetary or other compensation from Ajinomoto Co., Ltd. in addition to the compensation received as an officer” refers to receiving from Ajinomoto Co., Inc. an amount or other compensation that was either 2% of the individual’s net sales or gross income, excluding compensation as an officer, or 10 million yen, whichever is higher, during the most recent fiscal year.

12

[Incentives]

Implementation of measures for the granting of incentives to directors Company performance-linked compensation system

Supplementary explanation of this item

The compensation of directors, excluding outside directors, comprises monthly compensation, short-term company performance-linked compensation, and medium-term company performance-linked stock compensation. Short-term company performance-linked compensation varies based on the evaluation of company-wide performance and the evaluation of the performance of each sector during each business year. Company-wide performance includes as evaluation criteria net sales, business profit, net income attributable to owners of the parent company, and return on equity attributable to owners of the parent company (ROE), each on a consolidated basis. Sector- based performance is based on the in-house performance system. Of the compensation paid to directors, excluding outside directors, the ratio that short-term company performance-based compensation during business years when there is no payment of medium-term company performance-linked stock compensation accounts for varies from around 0% at the very least to around 50% at the very most. Medium-term company performance-linked stock compensation involves the company placing an amount of up to 2,200 million yen in Board Benefit Trust (“Trust”) for a period of three years, and then using the funds from the Trust, the company will acquire up to 1.1 million shares of the Company’s stock and then grant the Company’s stock from the Trust and distribute money equivalent to the cash conversion amount of the Company’s stock, based on the business performance evaluation for the final fiscal year of the medium-term management plan conducted after the end of the three-year medium-term management plan that begins on April 1, 2017. The evaluation criteria for business performance are business profits and return on assets (ROA), each on a consolidated basis. Of the compensation paid to directors, excluding outside directors, during business years when the medium-term company performance-linked stock compensation is paid out, the ratio that short-term company performance-based compensation and the medium-term company performance-linked stock compensation (monetary value conversion at the time of contributing funds to the trust) accounts for varies from 0% at the very least to around 70% at the very most. Additionally, directors, excluding outside directors, contribute about 2% of their monthly compensation to the executive officer stock ownership plan, which ensures that medium- to long-term stock price trends are linked to director compensation.

Individuals eligible to receive stock options


[Director compensation]

Disclosure (of individual director compensation)

Only certain aspects are disclosed individually


The total amount of compensation for the 139th fiscal year was 709 million yen for 14 directors (comprising monthly compensation of 491 million, company performance-linked compensation of 217 million, and total compensation of 37 million yen paid to the three outside directors.

Notes)

1. Payment recipients include the one director that retired during the fiscal year under review. 2. The above total compensation amount includes the provision of reserve for bonuses for officers booked in the 139th fiscal year

for directors.

13

3. The maximum amount of director compensation was capped at no more than 1.2 billion yen per annum (not including individual pay as an employee when the director serves concurrently as an employee of the company) for directors, excluding outside directors, at the 129th Ordinary General Meeting of Shareholders held on June 28, 2007. Outside director compensation was capped at no more than 50 million yen per annum at this same meeting.

* Information concerning director compensation is disclosed on the Ajinomoto Co., Inc. website in the following documents. 1. Securities report 2. Notice of Convocation of the Ordinary General Meeting of Shareholders (found in business report attached as a supplementary

document). For executives who receive 100 million yen or more in compensation, the amount is disclosed in the securities report. The individual disclosures for the 139th fiscal year are as follows.

Takaaki Nishii, Representative Director, President & Chief Executive Officer – Total compensation: 119 million yen (of which monthly compensation was 83 million yen and company performance-linked compensation was 35 million yen)

Presence of a decision-making policy on the amount of compensation or its calculation method Yes

Disclosure of the process for determining the compensation amount or its calculation method

The Board of Directors determines the compensation amount of directors based on the report of deliberations by the Compensation Advisory Committee. The Committee is composed of four directors, including three outside directors, and one Senior Corporate Executive Officer, and evaluates and advises on the company’s performance. The performance is used as a criteria for determining the compensation amount as well as the company performance-linked component of compensation. A resolution was passed at the 139th Ordinary General Meeting of Shareholders held on June 27, 2017 approving the introduction of the medium-term company performance-linked stock compensation for executive officers with the purpose of heightening the motivation of directors excluding outside directors, executive officers, and corporate fellows (hereinafter, collectively “Executives”) to enhance corporate value and improve company performance over the medium to long term. In conjunction with the introduction of this system, a review was conducted on the compensation system to increase the percentage of company performance-linked compensation. As a result, the annualized percentage of company performance-linked compensation combining its short-term and medium-term formats versus total compensation of Executives when achieving the standard company performance targets will increase from around 35% to around 50%. The evaluation criteria used for the short-term company performance-linked compensation and medium-term company performance-linked stock compensation can be found in “II.1. [Incentives] Implementation of measures for the granting of incentives to directors.” Compensation for outside directors consists of monthly compensation only and the Board of Directors determines the compensation amount individually based on the report of the Compensation Advisory Committee.

[Support system for outside directors (outside corporate auditors)]

As the Secretariat for Board of Directors meetings, the Corporate Planning Dept. provides outside directors with briefings on resolutions and reports and provides general support for the execution of their duties. The Secretariat Department serves as the liaison between outside directors and other directors. For Audit & Supervisory Board members (external), the Audit & Supervisory Board examines proposals for the Board of Directors in advance and receives briefings from the directors in charge of important matters or from Audit & Supervisory Board members that attended the Executive Committee. In addition, staff assigned specifically to aid the duties of Audit & Supervisory Board members provide general support for Audit & Supervisory Board members (external) to perform their duties, and these staff members serve as the liaison between Audit & Supervisory Board members (external) and Audit & Supervisory Board members or directors.

14

2. Matters related to the execution of duties, audit and supervision, nominations, and determining compensation, etc. (Summary of current corporate governance system)

○ Management, audits, supervision The Board of Directors comprises nine directors, including three outside directors. As the highest decision-making body within the management structure, the Board of Directors decides matters stipulated in laws or the Articles of Association and other important matters, and also supervises the execution of duties by directors and executive officers. The number of directors is kept at below 15 per the provisions of the Articles of Association. The Board of Directors decides upon candidates for director, executive officer and representative director based on the report of the Nominating Advisory Committee comprising four directors, including three outside directors, and decides upon compensation for directors and executive officers based on the report of the Compensation Advisory Committee comprising four directors, including three outside directors, and one Senior Corporate Executive Officer. The Audit & Supervisory Board members conduct audits involving five Audit & Supervisory Board members, including three Audit & Supervisory Board members (external). The Audit & Supervisory Board members screens proposals for the Board of Directors in advance as well as shares, and discusses the status of activities and reports on the activities of each Audit & Supervisory Board members. The Internal Auditing Dept., following the Internal Auditing Regulations and audit plan, carries out operational audits of business management organizations and management audits / operational audits of affiliated companies.

Ajinomoto Co., Inc. has established the Corporate Governance Committee, comprising five directors, including three outside directors, and one Audit & Supervisory Board members (external), as a discretionary committee of the Board of Directors for maintaining and improving management soundness as well as corporate governance. This committee deliberates on basic policies concerning corporate governance, material matters concerning the establishment, development and operation of the corporate governance system, and matters concerning corporate governance on approaches to the constitution of the Board of Directors, operation of the Board of Directors, and methods of evaluating the effectiveness of the Board of Directors, based on the advice of the Board of Directors. The results of these deliberations are reported to the Board of Directors.

○ Execution of duties Ajinomoto Co., Inc. adopts the executive officer system in which management and execution are separated using a structure where directors make decisions pertaining to management and executive officers are in charge of carrying out these decisions and other duties. As the Chief Executive Officer, the President of Ajinomoto Co., Inc. implements resolutions passed by the Board of Directors and is in charge of all of the company’s business operations. Other standing directors also serve concurrently as executive officers, excluding Chairman of the Board and directors primarily responsible for supervising the execution of duties by executive officers. Executive officers carry out the business operations of the company separately in accordance with the authorization of the Board of Directors. The Executive Committee comprises all directors who serve concurrently as Senior Corporate Executive Officer (including the Chief Executive Officer [President]) as well as other Senior Corporate Executive Officers nominated by the Chief Executive Officer and deliberates on basic policies concerning the management of the company and determines important matters concerning the execution of the company’s business operations. Business management organizations are separated into the Global Corporate, Japan Corporate Division, and each business sector and each business management organization carries out the operations for which it is delegated under the directions and supervision of the executive officer in charge. Members of the Executive Committee are in charge of all operations related to the organization they are in charge of as the lead representative to the Executive Committee.

In addition, company regulations on decision-making procedures by the Group (Global Governance Regulations; for details, see Note 1 and Note 2 of “IV. 2. Matters related to internal control systems”) categorize each business management organization of the Group (including Group companies) into “governing HQ (Tier 1)” and “delegated front (Tier 2)” from the standpoint of their roles, in order to clarify approval criteria. In this manner, Ajinomoto Co., Inc. is working to speed up decision making and raise the efficiencies of its organizational management as well as streamline operations across the entire Group by reinforcing the management functions of the former and further delegating authority to the latter. For further details, see “IV. 2. Matters related to internal control systems.”

○ Internal control and risk management Ajinomoto Co., Inc. is working to reinforce its internal control and risk management through the following committees it has established.

15

The Business Conduct Committee works to make the Ajinomoto Group Principles known to all and checks to make sure that management and corporate activities are carried out in compliance with these standards. It also carries out measures that address issues. The Risk Management Committee carries out measures that make the Ajinomoto Group’s corporate structure more resilient against risk and crises through strategic risk management. The Investment, Loan, and Business Scrutiny Committee carries out multifaceted reviews of investment and loan decisions, revitalization of unprofitable businesses, and exits from unprofitable businesses, prior to deliberations by the Executive Committee. The M&A Committee carries out multifaceted reviews of M&A deals prior to deliberations by the Executive Committee.

3. Reason why the current corporate governance system was selected

Ajinomoto Co., Ltd. has selected the current Audit & Supervisory Board system because it ensures the appropriate execution of business operations using a two-level check system. The system includes the Board of Directors, which consists of nine directors, including three outside directors, and makes decisions on important business matters and supervises the duties of directors and executive officers. The system also includes the Audit & Supervisory Board, consisting of five Audit & Supervisory Board members , including three Audit & Supervisory Board members (external), that is independent from executive officers and works together with the accounting auditor and internal audit department to conduct audits on the execution of duties by directors.

16

III. Implementation status of measures concerning shareholders and other stakeholders

1. Status of initiatives to revitalize the General Meeting of Shareholders and facilitate the exercise of voting rights

Supplementary explanation

Early issuance of the Notice of Convocation of the Ordinary General Meeting of Shareholders

The Notice of Convocation of the Ordinary General Meeting of Shareholders has been sent out at least three weeks prior to the date of the meeting since 2001.

Setting the date of the General Meeting of Shareholders to avoid dates when many other companies hold their General Meeting of Shareholders

Ajinomoto Co., Ltd. determines the date on which the General Meeting of Shareholders is held in consideration of securing a venue that can accommodate a large number of shareholders and prepares the accounts settlement schedule in consideration of the time required for accounts settlement operations and for performing audits by the accounting auditor and Audit & Supervisory Board members.

Exercise of voting rights using electronic means Shareholders have been given the opportunity to exercise their voting rights online starting from the General Meeting of Shareholders held in June 2006.

Initiatives for participating in the electronic voting rights platform and improving the environment for the exercise of voting rights by institutional investors

Ajinomoto Co., Inc. participates in the Tokyo Stock Exchange’s electronic voting rights platform to provide non-resident investors and institutional investors with the opportunity to optimally exercise their voting rights.

Provision of the Notice of Convocation of the Ordinary General Meeting of Shareholders in English

Ajinomoto Co., Inc. prepares an English language version of the Notice of Convocation of the Ordinary General Meeting of Shareholders and publishes it on its corporate website. This fiscal year, the English language version of the Notice of Convocation of the Ordinary General Meeting of Shareholders was published on the company’s corporate website three days prior to it being sent out by postal mail.

Other

To enhance the convenience of shareholders, Ajinomoto Co., Inc. provides opportunities for shareholders to exercise their voting rights online. Starting in 2015, the Notice of Convocation of the Ordinary General Meeting of Shareholders will be published on the company’s corporate website the day prior to it being sent by postal mail. It was published in order to provide sufficient time for shareholders to review matters for the exercising of their voting rights.

2. Status of investor relations activities

Supplementary explanation Explanation by the

representative

Preparation and announcement of disclosure policy

Ajinomoto Co., Ltd. has established a disclosure policy and publishes it on its corporate website. This policy states the company will disclose information in a timely and fair manner, including information set out in the Financial Instruments and Exchange Act, other laws and regulations, and the timely disclosure regulations of the financial instruments exchange where its securities are listed. It also deems information believed to affect the investment decisions of investors, even if such information is not applicable to disclosure rules, as important company information and the company will make efforts to disclose this information in a timely and fair manner.

Regular briefing sessions for analysts and institutional investors

Briefings are held for the interim financial results and fiscal year-end financial results, with presentations made by the president and executive officer in charge of finance.

Yes

17

Publication of investor relations documents on the corporate website

Ajinomoto Co., Inc. publishes its securities report, shareholders’ newsletter, integrated report, investors guide, factsheet, intellectual property report, corporate governance report, summary of the evaluation of the effectiveness of the Board of Directors, financial results information, convocation notices, various press releases, and other documents on its corporate website.

Establishment of department for (person in charge of) investor relations

The IR Group has been established within the Finance & Accounting Dept.

3. Status of initiatives related to respect for the standing of stakeholders

Supplementary explanation

Rules on respecting the standing of stakeholders set out in company regulations, etc.

The Ajinomoto Group Principles contain provisions on respect for the standing of each stakeholder, including customers, communities, shareholders, investors, business partners, and employees. Specifically, these stipulations include providing safe, high-quality products and services for customers, making social contributions through business activities and respecting the local culture for communities, conducting appropriate information disclosures and meeting expectations by always working to increase corporate value for shareholders and investors, and promising to engage in fair and transparent transactions for business partners.

Implementation of environmental conservation activities and CSR activities, etc.

Based on the Ajinomoto Group Philosophy, the CSR of Ajinomoto Group involves addressing the three issues of global sustainability, food resources, and healthy living, from among those many issues that people face, through its business activities. These issues were selected because they can contribute to our business domains of foods and AminoScience. The CSR Group within the Global Communications Dept. has been established as an organization for promoting CSR within the company. This department works alongside the General Affairs & Risk Management Dept., Global Human Resources Dept., Quality Assurance & External Scientific Affairs Dept., Production Management Dept., and Group Procurement Center. Additionally, in accordance with Environmental Regulations and Quality Assurance Regulations, Ajinomoto Co., Inc. has established and operates a company-wide environmental management system that is in compliance with ISO 14001 and the Ajinomoto Group Quality Assurance System that is in compliance with ISO 9001.

Establishment of a policy on the provision of information to stakeholders

The Ajinomoto Group Principles stipulate basic policies on information provision and information management appropriate for each stakeholder, including customers, communities, shareholders and investors, business partners, and employees. In addition, starting from 2016, Ajinomoto Co., Inc. has published an integrated report containing financial and non-financial information in story form, while the Ajinomoto Group’s initiatives are presented in reports linked to the integrated report, including the Sustainability Book, Investors Guide, Medium-Term Management Plan, Securities Report, and Corporate Governance Report, among others. Ajinomoto Co., Inc. also engages stakeholders through forums and dialogue sessions.

18

Other

In terms of workstyle innovation, Ajinomoto Co., Inc. reduced its daily working hours from 7 hours, 35 minutes to 7 hours, 15 minutes in April 2017, and changed the start time of work from 8:45am to 8:15am and its end time from 5:20pm to 4:30pm. Also, Ajinomoto Co., Inc. introduced an hourly paid leave system, a flex time system without core time, and telework system where employees work from home or a satellite office. As a result, total work hours were reduced by 3% and overtime hours by 15% during fiscal 2016. Through these initiatives, Ajinomoto Co., Inc. will develop an environment to provide a new sense of vitality by making it easier for each and every employee to balance their diverse life-style with their professional life. In February 2017, Ajinomoto Co., Inc. was recognized as a 2017 Health Management Firm by the Ministry of Economy, Trade and Industry and the Tokyo Stock Exchange for its strategic approach to managing the health of its employees from a management perspective. Ajinomoto Co., Inc. was also certified as an Excellent Health Management Corporation (White 500) by the Ministry of Economy, Trade and Industry. Furthermore, Ajinomoto Co., Inc. is working on initiatives such as the open recruitment system for specified jobs and Group-wide training programs, in addition to its normal personnel assignment, to ensure that its diverse human resources results in more dynamic company growth. As of the end of March 2017, the ratio of non-Japanese executives at Ajinomoto Co., Inc.’s overseas subsidiaries totaled approximately 43,9%, while the ratio of female managers was about 6.9% at Ajinomoto Co., Inc. and about 16% for the entire Ajinomoto Group. In autumn 2016, Ajinomoto Mirai Co., Ltd. was established for the purpose of promoting the hiring of persons with disabilities. Ajinomoto Co., Inc. aims to be a company with expanded opportunities for employees to contribute and develop their skill sets, a company that is employee-friendly, and a great place to work where employees feel like they are giving back to society and the company.

IV. Matters related to internal control systems

1. Basic approach to internal control systems and the status of internal control system development

1. Basic approach Ajinomoto Co., Inc. is striving to develop and enhance internal control systems as the important task of corporate management. As the verification of the status of operations and the effectiveness of the “Basic Policy Concerning the Development of the System for Ensuring Appropriate Business Operations,” we confirm the status of operations and activities of the Business Conduct Committee, auditing by the Internal Auditing Dept., Global Governance Policy and other relevant regulations, and the Risk Management Committee. We confirm whether issues and problems are being dealt with appropriately and whether continuous improvements are being made. The verification results are reported to the Board of Directors.

2. Status of the development of internal control systems The “Basic Policy Concerning the Development of the System for Ensuring Appropriate Business Operations” decided by the Board of Directors is described below: (1) System to ensure that the execution of duties of directors and employees of the company complies with laws and regulations

as well as the Articles of Incorporation

19

i. Compliance with laws and regulations as well as the Ajinomoto Group Principles shall be thoroughly ensured by enhancing education and training of directors and employees and distributing manuals to them. The Chief Executive Officer or the Business Conduct Committee chaired by a Senior Corporate Executive Officer who is a director designated by the Chief Executive Officer shall be responsible for company-wide issues. The issues include the implementation of education and training for thorough compliance with laws and regulations as well as the Standards of Business Conduct, confirmation of the status of compliance, investigation and discovery of violations of laws and regulations and other problems, and formulation and implementation of remedial actions and improvement plans. Individual issues shall be handled by the General Affairs & Risk Management Dept., the Legal Dept., or other operational units under the supervision of responsible Corporate Executive Officers in accordance with internal regulations.

ii. Members and the Secretariat of the Business Conduct Committee shall check the status of compliance with laws and

regulations as well as the Ajinomoto Group Principles and investigate and discover problems by regularly attending workplace meetings on the review of the Ajinomoto Group Principles. They shall directly receive the presentation of problems by employees and listen to their requests.

iii. The Secretariat of the Business Conduct Committee shall serve as the primary contact point for warnings given in

accordance with the Whistleblower Protection Act and promptly respond to such received warnings. When violations of laws or regulations are revealed, responsible operational units shall develop and implement remedial measures and recurrence prevention measures.

iv. The Internal Auditing Dept. shall conduct business operations audits of operational units in accordance with Internal

Auditing Regulations and audit plans. The General Manager of the Internal Auditing Dept. shall submit auditing reports to the President & Chief Executive Officer, send their copies to Audit & Supervisory Board members (standing) and operational units subject to auditing, ask operational units subject to auditing to provide replies on matters pointed out and remedy other problems, and confirm the status of remedial actions. In order to ensure the reliability of financial reporting, the Internal Auditing Dept. shall evaluate internal control related to financial reporting; report the evaluation results to the President & Chief Executive Officer, the Executive Committee, the Board of Directors, and the Audit & Supervisory Board; and notify the evaluated operational units of the evaluation results. If inadequacies are found, the units should be instructed on correcting the issues.

v. The Audit & Supervisory Board members shall be appointed, and auditing shall be conducted by five Audit &

Supervisory Board members, including three Audit & Supervisory Board members (external). Directors shall give heed to ensuring the effectiveness of auditing by corporate auditors, including the enhancement of support staff for corporate auditors, securing the independence of corporate auditors, and facilitation of cooperation with the Internal Auditing Dept. and operational units.

vi. Outside directors who are well-versed in corporate management and supervise the execution of business of the company

from an independent and fair standpoint shall be appointed in order to enhance the supervision function of the Board of Directors and also to make decision-making on the execution of business more appropriate.

vii. The Nominating Advisory Committee and the Compensation Advisory Committee, whose majority of members consist of

outside directors, shall be established as a discretionary committee of the Board of Directors to enhance the transparency and objectivity concerning the appointment of directors and decisions on compensation of directors and Corporate Executive Officers.

ⅷ. The Corporate Governance Committee, whose majority of members consists of outside directors or Audit & Supervisory

Board members (external), shall be established as a discretionary committee of the Board of Directors to maintain and enhance the soundness of management and corporate governance.

(2) System for storing and managing information related to the execution of duties by Directors

Documents and electronic records, such as minutes of meetings of the Board of Directors, GGP proposals (Note 1), and minutes of various meetings which record information concerning the execution of duties by directors, shall be stored and managed in

20

accordance with laws and regulations, the Articles of Incorporation, Regulations of the company, Regulations of the Board of Directors, Global Governance Policy (Note 2), Document Management Regulations, and other internal regulations.

(3) Regulations and other systems concerning management of the risk of loss i. As regulations concerning the management of the risk of loss, we shall develop and appropriately operate the Global

Governance Policy; Risk Management Committee Regulations; Investment, Loan, and Business Scrutiny Committee Regulations; Quality Assurance Regulations; Environmental Regulations; Information Management Regulations; Disaster Prevention and Safety Management Regulations; Regulations Concerning Financial Transactions; Regulations Concerning the Ajinomoto Global Tax Policy; and M&A Committee Regulations.

ii. Concerning important matters, such as important investment projects, revival of unprofitable projects, and withdrawals

from unprofitable projects, the Investment, Loan and Business Scrutiny Committee shall hold broad-ranging deliberations, and investigate the necessity of investment, problems, and the risks involved in order to contribute to subsequent deliberations by the Executive Committee.

iii. The Risk Management Committee shall be established under the Executive Committee in order to make the corporate

structure of the company and group companies (which mean affiliated companies of the company; the same hereinafter) resilient to risks as well as crises when risks come to a head. The Risk Management Committee shall decide and implement a variety of measures to promptly and appropriately respond to risks and crises that may cause serious damage to products, assets, credit, and the life and bodies of parties concerned, and otherwise bring adverse impacts on the corporate value. The Committee will also follow and check the status of implementation of such measures.

iv. Each operating unit shall identify risks periodically and develop treatment plans for important risks to avoid, transfer, or

lessen damage in preparation for the actualization of such risks.

v. In the event of a crisis within Japan, the operational units concerned, the General Affairs & Risk Management Dept., and

other risk-related organizations shall establish a control center as necessary in order to smoothly and promptly respond to the crisis and seek to resolve it appropriately, including maintaining the appropriate flow of information in and out of the company.

vi. In the event of a crisis outside of Japan, a system shall be established whereby regional divisions take the lead in

initiating a response that is swift and tailored to the local situation, and regional divisions determine the situation and

work with relevant departments of the head office to address this situation.

(4) System for ensuring the efficient execution of duties by Directors

i. The Board of Directors, as the highest decision-making body of management, shall make decisions on matters prescribed by laws and regulations as well as the Articles of Incorporation and other important matters, and also supervise the operations of Directors and Corporate Executive Officers.

ii. The President, as the Chief Executive Officer, shall execute decisions of the Board of Directors and supervise the

operations of the company. Other standing directors shall serve concurrently as Corporate Executive Officers, excluding the Chairman of the Board and the director whose main responsibility is to oversee the Corporate Executive Officers in the execution of their duties. Corporate Executive Officers shall divide the execution of operations of the company based on the authorization of the Board of Directors.

iii. Consisting of all Senior Corporate Executive Officers who are directors and other Senior Corporate Executive Officers

appointed by the Chief Executive Officer, the Executive Committee shall consult on the basic policy concerning the management of the company and decide on important matters concerning the execution of the company’s operations.

iv. Operational units shall be divided into the Global Corporate, Japan Corporate Division, and Business Departments, and

each shall have departments and other units under them. Each operational unit shall handle its business operations under the supervision of a Corporate Executive Officer in charge. Senior Corporate Executive Officers who are directors and other Senior Corporate Executive Officers appointed by the Chief Executive Officer, as representatives of the Executive Committee, shall manage all units concerning the execution of operations by operational units for which they are responsible.

21

v. Through the development and operation of the Global Governance Policy, we shall strive to transfer authority by clearly delineating the scope of decisions made by the Executive Committee, Corporate Executive Officers and specific group companies.

(5) System for ensuring appropriate business operations at group companies

i. Basic policy for ensuring appropriate business operations at group companies a. The Global Governance Policy shall clarify the basic policy related to the supervision of group companies and the

transfer of authority to specific group companies in order to ensure appropriate business operations and the effective execution of duties at the group companies.

b. For subsidiaries from among group companies, it shall be our principle to supervise all matters related to areas that have an impact on the company’s influence on management, areas that have a direct impact on the company’s financial conditions, and areas that have an impact on the basis of the corporate group’s competitiveness.

ii. System concerning reporting to the company on matters related to the execution of duties of directors of group companies.

a. Operating units responsible for the management of group companies shall supervise the management of those companies in accordance with the Global Governance Policy depending on the equity share in them and whether “Ajinomoto” is used in their trade names, require those companies to report on important matters, and report to the Executive Committee and the Board of Directors to obtain approval as necessary.

iii. Regulations concerning the management of the risk of loss at group companies and other systems

a. As regulations concerning the management of the risk of loss at group companies, group companies, depending on the details of their business operations and management conditions, shall be required to implement the Global Governance Policy, Quality Assurance Regulations, Environmental Regulations, Information Management Regulations, Disaster Prevention and Safety Management Regulations, Regulations Concerning Financial Transactions, and Regulations Concerning the Ajinomoto Global Tax Policy.

b. Deliberations by the Investment, Loan and Business Scrutiny Committee and the Risk Management Committee shall include matters concerning group companies.

c. Group companies shall be required to identify risks periodically and develop contingency plans for important risks to avoid, transfer or lessen damages, in preparation for the actualization of such risks.

d. In the event of a crisis, a countermeasures headquarters shall be established as needed and necessary support shall be provided for appropriate resolution of the crisis, including the appropriate flow of information in and out of the company.

e. Group companies shall be required to promptly report their potential or realized important risks to the company.

iv. System for ensuring the efficient execution of duties of directors at group companies

Group companies, depending on the details of their business operations and management conditions, shall be required to implement a set of company regulations set forth by the company, i.e., establish a set of their own regulations to the same effect, have a set of these company regulations well understood within group companies, and put conditions in place where the set of these company regulations is operated with effectiveness.

v. System for ensuring that the execution of duties of directors and employees of group companies complies with laws and

regulations as well as the Articles of Incorporation a. Group companies, depending on the details of their business operations and management conditions, shall be required

to implement the Ajinomoto Group Principles, and directors and employees of group companies shall be required to thoroughly comply with laws and regulations as well as the Ajinomoto Group Principles.

b. Directors and employees of group companies shall be allowed to have access to the company’s contact point for warnings under the Whistleblower Protection Act.

c. The Internal Auditing Dept. shall conduct management auditing and operational auditing on group companies. Evaluation of internal control related to financial reporting shall be conducted, including internal control related to group companies.

d. Audit & Supervisory Board members (standing) shall be appointed at important group companies as necessary, even when they do not fall under the category of large companies under the Companies Act, in order to enhance the audit function at subject group companies.

22

(6) System for ensuring that auditing by corporate auditors of the company is conducted effectively i. Matters concerning employees who are to support the duties of Audit & Supervisory Board members

a. Staff necessary to support the duties of Audit & Supervisory Board members shall be deployed based on consultations with Audit & Supervisory Board members.

b. Staff for Audit & Supervisory Board members shall be deployed under the direct supervision of the Audit & Supervisory Board and their independence from directors shall be ensured by making them dedicated staff who do not take on concurrent business operations.

c. The authority of staff for Audit & Supervisory Board members shall be clarified by regulations set forth by the Audit & Supervisory Board, and Audit & Supervisory Board members (standing) shall evaluate the performance of these staff members. Personnel transfers, as well as reward and punishment, shall require the consent of Audit & Supervisory Board members (standing), thereby enhancing the independence from directors and ensuring the effectiveness of instructions by Audit & Supervisory Board members to the staff for Audit & Supervisory Board members.

ii. System concerning reporting to Corporate Auditors

a. Directors shall, when they find facts that may cause significant loss to Ajinomoto Co., Inc. or any group companies, immediately report them to the Audit & Supervisory Board.

b. Employees, as well as directors, Audit & Supervisory Board members, and employees of group companies, shall respond to regular and non- regular requests for reporting by Audit & Supervisory Board members of Ajinomoto Co., Inc. When they find facts that may cause significant loss to Ajinomoto Co., Inc. or any group companies, as well as in cases of emergency, they may report such facts directly to Audit & Supervisory Board members of Ajinomoto Co., Inc.

c. Those who made reports explained in a. or b. above shall not be subjected to unfair treatment for having made such reports, and this shall be strictly followed at group companies as well.

iii. Policy related to the disposal of auditing expenses

a. Ajinomoto Co., Inc. shall bear the expenses necessary for the execution of duties of Audit & Supervisory Board members. The expenses shall include expenses necessary for going out for auditing as well as expenses associated with the outsourcing of clerical work to lawyers and other outside professionals for the development of audit opinions.

b. Payments of expenses shall be made in advance based on audit plans in principle. Expenses paid by Audit & Supervisory Board members in urgent cases or on a temporary basis shall be redeemed ex post facto upon request from Audit & Supervisory Board members.

iv. Other systems for ensuring effective auditing by Audit & Supervisory Board members

a. Directors shall give extra consideration to enable Audit & Supervisory Board members to attend important meetings of operational units, and offer the cooperation necessary for the execution of duties of Audit & Supervisory Board members, including the submission of meeting minutes.

b. The President & Chief Executive Officer and other directors and Audit & Supervisory Board members shall have an exchange of information, whether regular or non-regular, on the status of compliance and risk management and other management issues at Ajinomoto Co., Inc. and group companies in order to foster communication between directors and Audit & Supervisory Board members.

(Note 1)

A “GGP proposal” is a procedural document for approvals used for the decision-making process in accordance with the Global Governance Policy. It replaces the Ringi approval document used in the Ringi (approval system) Regulations.

(Note 2) The Global Governance Policy represents in regulation form the basic policy on governance that must be fulfilled by regional divisions, Business Departments, the Japan Corporate Division and specific group companies, which represent “local operations that can run on their own,” under functions and the authority/responsibility of the Company’s Board of Directors, Executive Committee, the heads of business divisions, and the heads of organizations belonging to Global Corporate, which represent “an HQ that leads” (This regulation is referred to as the Global Governance Policy or GGP within the Ajinomoto Group). The Global Governance Policy will replace the previous Ringi (approval system) Regulations and the Affiliated Companies Supervisory Regulations. By transferring authority to “local operations that can

23

run on their own,” we will seek to establish a system that enhances the flexibility and efficiency of the frontlines, which will contribute to dramatic growth overseas and expanded group management.

2. Basic approach to the exclusion of antisocial forces and the current status

1. Basic approach to the exclusion of antisocial forces Ajinomoto Co., Inc. believes that dealing with antisocial forces and giving in to unreasonable demands of antisocial forces result in providing the underlying support for the survival and strengthening of antisocial forces and lead to the infiltration of antisocial forces in the company and the spread of related damage. Consequently, we have a basic principle to (1) absolutely not have any dealings with antisocial forces, (2) take a resolute stance against anti-social forces and reject all unreasonable demands from antisocial forces; and (3) work with relevant organizations on the exclusion of anti-social forces, while seeking the guidance and support of the police, lawyers, and other external professional organizations. This basic principle is made known inside and outside the company through the Ajinomoto Group Principles.

2. Status of the exclusion of antisocial forces (1) The General Affairs & Risk Management Dept., the supervisory division in dealing with antisocial forces, and general affairs sections responsible for dealing with antisocial forces in each office play the central role in ensuring that there is absolutely no contact with antisocial forces as part of risk management efforts. They seek the guidance of the police as needed and work in close cooperation with business operating units and subsidiaries and related companies.

(2) We have a structure in place to handle unreasonable demands related to product claims with the coordination of the General Affairs & Risk Management Dept., the Legal Dept., and other internal organizations, instead of leaving them to a single contact point. We also seek the guidance and support of lawyers and the police as necessary.

(3) If it is discovered that the company has unknowingly entered into business transactions with antisocial forces, the top priority is given to immediately terminate all business transactions with them. We are moving forward with measures to include anti- organized crime clauses in all contracts to minimize the damage related to contract termination.

24

V. Other

1. Introduction of anti-takeover measures

Introduction of anti-takeover measures None


――― 2. Other matters concerning the corporate governance structure

Our internal structure concerning the timely disclosure of corporate information is set out below:

We have set forth Information Management Regulations as internal regulations. These regulations are designed to prevent information leaks and unauthorized use of information, and ensure the appropriate handling of personal information through the clarification of the company’s information-related policies and establishment of basic rules for the handling of information. Regarding the disclosure of corporate information in particular, we have Detailed Regulations Concerning Disclosure of Corporate Information as bylaws of the above regulations. The Regulations bind the company to provide information on the management philosophy, financial results, and future earnings potential of Ajinomoto Co., Inc. and its group companies in a timely manner, and thereby obtain investors’ confidence in and their fair evaluation of the company. The above detailed regulations provide for the internal structure for the timely disclosure of corporate information, which is explained below.

1. Basic principles for the disclosure of corporate information Disclosure of corporate information by Ajinomoto Co., Inc. takes place according to the following basic principles. ・Timely disclosure ・Appropriate disclosure ・Accurate disclosure ・Fair disclosure ・Voluntary disclosure ・Continuous disclosure

2. Internal structure Directors and employees of Ajinomoto Co., Inc. strive to be well-versed in the Detailed Regulations Concerning Disclosure of

Corporate Information; abide by laws and regulations as well as company regulations, instructions, and directions; and disclose corporate information in accordance with these basic principles.

(1) Establishment of disclosure executives A number of Disclosure Executives have been designated as officials responsible for the disclosure of corporate information.

1) Disclosure Executives All directors in charge of information disclosure serving concurrently as Senior Corporate Executive Officers (including the President & Chief Executive Officer) and other Senior Corporate Executive Officers appointed by the Chief Executive Officer (members of the Executive Committee), General Manager of the Corporate Planning Dept., General Manager of the Finance & Accounting Dept., General Manager of the Legal Dept., General Manager of the Public Communications Dept., and Manager in charge of IR within the Finance & Accounting Dept. designated by the General Manager of the Finance & Accounting Dept.

2) Role of Disclosure Executives Disclosure Executives are responsible for the timely disclosure of corporate information. Their responsibilities include:

・Determining which corporate information should be made public and which should not, and deciding on the details of disclosure. Reports to the Executive Committee and the Board of Directors must also be conducted and approval received when necessary.

・Providing revisions to previously disclosed corporate information and additional information when conditions change, as well as monitoring and supervising the status of the disclosure of corporate information.

・Deciding on countermeasures to deal with rumors that may affect the investment decisions of investors.

25

(2) Establishment of Liaison Managers Liaison Managers are designated in necessary organizations to cooperate with Disclosure Executives concerning the provision and disclosure of corporation information.

Role of Liaison Managers Liaison Managers promote the timely disclosure of corporate information by providing Disclosure Executives with corporate information from the respective organizations in a timely and appropriate manner. ・Collection of corporate information from the covered respective organizations and coordination with Disclosure Executives

concerning the details of disclosure ・Contact with Disclosure Executives on significant undisclosed information or facts that may prove to be significant at the time of

their occurrence. ・Responses to other matters when instructed or requested by Disclosure Executives for cooperation concerning disclosure of

corporate information.

Ajinomoto Co., Inc. provides for the treatment of significant undisclosed corporate information in Regulations Concerning Prevention of Insider Trading (internal regulations). These regulations set forth basic matters necessary for the management of information directors and employees acquire in the course of their business activities in order to prevent insider trading and fulfill the company’s corporate social responsibilities with appropriate disclosure of corporate information.

　【Auditing】【Management/Supervision】

【Business Execution】

【Tier１】Global HQ

【Tier２】Local Operations that can run on their own

【Tier３】Group Companies

Decisions on FundamentalManagement PoliciesTransfer of Authority

Audit & Supervisory Board

General Meeting of Shareholders

Board of Directors

Accounting Auditors

Executive CommitteePresident & Chief Executive Officer

Members of the Board & Corporate (Senior) Vice presidents

Other Coporate Vice Presidents Nominated by Presoident &

Nominating Advisory Committee

Compensation Advisory Committee

Subsidiaries

Business Conduct Committee

Risk Management Committee

Investment,LoanandBusinessScrunityCommittee

M&A Committee

Internal Auditing Dept.

GlobalCorporate

Audit&Supervisory Board Members (Standing) (2)

Outside Directors(3) Directors(6)

Audit&Supervisory Board Members (External) (3)

Auditing

Supervisions

Internal Control

Risk Management

Food Products Division

Appointment/Dismissal of Directors

Recommendations

Cooperation

Support

Determinationofappointment/Dismissalproposals

Appointment/Dismissal of Auditors

Cooperation

Reporting

Reporting/Preliminary Review

Delegation of Authority/Control

Audit & Supervisory Board' Office

Appointment/Dismissal

Subsidiaries

Corporate Governance Committee

JapanCorporateDivision

AminoScience Division

Subsidiaries Subsidiaries

Subsidiaries Subsidiaries Subsidiaries

26

【Schematic of the　Internal Structure for Timely Disclosure of Corporate Information 】

Internal regulations regarding disclosure of corporate informationBoard of Direvtors

Executive Committee ・Approval for disclosure of corporate information Regulations Detailed Informationconcerning the regulations managementprevention of concerning regulationsinsider trading disclosure of

corporate The regulationsThe regulations set information aim to prevent

・Determination on disclosure of corporate information forth basic matters information leaksnecessary for the The objectives of and unauthorized

・Reporting to the Board of Directors and the management of the regulations are use of information,Disclosure Executives Executive Committee information to provide and ensure the

directors and information on our appropriate・Monitoring and supervision of disclosure of employees acquire management handling ofcorporate information in the course of their philosophy, personal

business activities in financial results, information・Decisions on disclosure details order to prevent and future through the

insider trading and carnings potential clarification of ourfulfill our corporate and to thereby information-related

・Support for Disclosure Executives social obtain investors' basic policies and(Collection of informations, reporting, consideration responsibilities with confidence in and the establishment

Liaison Managers of disclosure details, etc.) appropriate their fair of basic rules fordisclosure of evaluation of the handling ofcorporate information. Ajinomoto Co., Inc. information.

27