KIKKOMAN CORPORATION

The risk that natural disasters such as earthquakes, typhoons, and droughts, or large-scale accidents, may cause the suspension of production sites or disruption of the supply chain both in Japan and overseas. Although production sites are dispersed across Japan, the Americas, Europe, and Asia, and BCPs are formulated and drilled at each site, if events exceeding expectations occur, this may affect business performance and financial condition. This risk was rated as "high" importance in this fiscal year's assessment.

The risk that fluctuations in international commodity markets for soybeans, wheat, etc. used in mainstay products such as soy sauce and soy milk, as well as crude oil price fluctuations, may affect business performance. Geopolitical risks and abnormal weather due to climate change, such as cool summers or warm winters, could cause price spikes or production shortfalls beyond assumptions. The Company responds through monthly monitoring of impact amounts and price revisions, but for a certain period, this may affect business performance and financial condition. This risk was rated as "high" importance in this fiscal year's assessment.

The risk that political upheaval, terrorism, military conflict, global pandemics, etc. may cause major disruption to the market environment and society/economy in regions where the Group operates. The Group addresses this through risk diversification via multi-regional operations based on Global Vision 2030, securing local procurement ratios, and establishing inter-regional supply support systems, but if rapid environmental changes occur, this may affect business performance and financial condition. This risk was rated as "high" importance in this fiscal year's assessment.

The risk that demand for the Group's products and services may decline if rapid environmental changes occur, such as medium-term shifts in consumer values and preferences, the emergence of new competitors, improved quality of competing products, or innovations in information technology. The Group strives to differentiate itself from competitors through enhancement of its R&D structure, company-wide DX promotion, strengthened product development and marketing, and productivity improvements, but this may affect business performance and financial condition. This risk was rated as "high" importance in this fiscal year's assessment.

While addressing "Global Environment," "Food and Health," and "People and Society" as key priorities, insufficient response to international regulations, standards, and social demands, or delays in addressing environmental and human rights issues in the supply chain, may result in brand damage, trading restrictions, or regulatory penalties. Against the backdrop of growing international concern over social issues, delays in response may affect business performance and financial condition. This risk was rated as "high" importance in this fiscal year's assessment.

While maintaining operational systems and important information for development, production, logistics, sales, etc., there is a risk of system failures, information leaks, or tampering caused by power outages, disasters, software defects, computer virus infections, unauthorized access, etc. This also includes the risk of being unable to respond to environmental changes due to delays in digital and AI utilization. The Group addresses this through strengthening information management and security systems, but this may affect business performance and financial condition. This risk was rated as "high" importance in this fiscal year's assessment.

The risk that if the Company is unable to secure highly specialized human resources required in each country and job category due to a declining working population and rising labor costs, this could hinder business operations and business development. The Group is working to improve labor productivity through capital investment and operational efficiency, and to create an environment where diverse talent can thrive, but if it is unable to secure such talent, this may affect business performance and financial condition. This risk was rated as "high" importance in this fiscal year's assessment.

While subject to legal regulations such as the Food Sanitation Act, Product Liability Act, and Antimonopoly Act both in Japan and overseas, the risk that changes in or tightening of laws and regulations may make it difficult to continue existing trading practices or product specifications, or that violations of laws or actions contrary to social expectations may damage social trust, thereby affecting business performance and financial condition. The Group addresses this through the formulation of a code of conduct, compliance training, and the establishment and operation of internal controls.

As the Group advances its global operations, the risk that foreign exchange fluctuations exceeding expectations may cause a sharp rise in foreign-currency-denominated raw materials and goods, or an apparent decrease in the yen-converted amounts of overseas subsidiaries' business results. The Group addresses this by incorporating foreign exchange fluctuation risk into its medium-term management plan, budgets, and business forecasts, and through risk hedging via forward foreign exchange contracts, but if fluctuations exceed expectations, this may affect business performance and financial condition.

The risk that in aggressive investment activities such as new businesses, capital investment, and M&A, if the expected profits or effects anticipated at the time of decision-making are not realized, the Company may be subject to impairment accounting. For investments above a certain level, the Board of Directors makes resolutions after examining investment returns based on decision-making guidelines, but if the expected effects are not realized, this may affect business performance and financial condition.