KAGOME CO.,LTD.

Deterioration of profit due to divergence between plans and actual results, deterioration of business performance and loss of revenue opportunities due to failure or delay of new businesses and M&A, and deterioration of profitability and impact on financial condition due to decline in the value of held assets are recognized as key risk issues. As countermeasures, the Corporate Planning Office and Finance & Accounting Department report progress to the Board of Directors (monthly) and Management Committee (once a year), and the Investment Committee conducts regular monitoring and reviews impairment of cross-held shares and fixed assets.

Human resource shortages in expanding growth areas, new businesses and overseas business domains, shortages of personnel in specific specialized fields such as DX and finance/accounting, insufficient human resource development measures, and failure to achieve diversity, equity & inclusion targets are cited as key risk issues. The Human Resource Development Committee and Human Resources Department oversee this area, advancing HR measures such as recruitment, development, and career formation, designing and implementing management talent development plans and strategic assignment processes, and considering proposed revisions to the system regarding extension of the retirement age.

Deficiencies in the effectiveness of the Board of Directors and the Audit and Supervisory Committee, and the potential for management to override internal controls, are recognized as strategic risks, with the need to strengthen the governance structure also increasing due to a growing proportion of sales from overseas subsidiaries. A reporting structure to the Board of Directors (once a year) and the Audit and Supervisory Committee (as needed) has been established, and third-party assessments are conducted to ensure effectiveness.

Lawsuits and boycotts caused by inappropriate advertising or failures in customer service, and the spread of controversy on social media due to inadequate information disclosure or media response, are recognized as risks that could damage the brand image. The Customer Service Center and Public Relations Group oversee this area, reporting monitoring results to the Risk Management Steering Committee (bimonthly) and conducting regular media response training and reviewing/improving the risk communication structure.

A decline in sales due to economic downturn and decreased demand in Japan and delayed response to consumer needs, along with a decrease in product supply and profit due to surges in raw material and material prices, are recognized as key risk issues. The Marketing Division and Sales Division analyze the competitive environment and consumer trends, report sales trends by branch and category to the Product Planning Meeting and Management Committee, and implement medium- to long-term measures to stabilize raw material procurement.

Increased fund procurement costs and deteriorating cash flow due to foreign exchange and interest rate fluctuations are recognized as social and environmental risks. The Finance & Accounting Department oversees this area, managing financial risk by reporting hedging transactions and monitoring details to the Board of Directors (quarterly).

Natural disasters such as earthquakes, water shortages, and torrential rain, factory operation stoppages due to infectious diseases and conflicts, and disruptions to raw material procurement due to abnormal weather are recognized as key risk issues. In 2025, a tabletop exercise was conducted based on a scenario assuming a Tokyo Inland Earthquake or Nankai Trough Earthquake (seismic intensity of approximately 6-upper), establishing a PDCA cycle to verify the effectiveness of the BCP across three phases: immediately after the earthquake, three days later, and seven days later.

Operational shutdowns, data tampering, and leaks of confidential and personal information due to cyber attacks, as well as loss of social credibility due to inadequate information management, are recognized as operational risks. The Information Security Committee oversees this area, reporting monitoring data on PC virus infections, lost IT equipment, and numbers of external attacks to the Risk Management Steering Committee (bimonthly), and conducting regular employee training on information leak countermeasures.

Shipment of defective products and health damage caused by foreign object contamination, labeling errors, inadequate quality inspections, cross-contamination of seed varieties, and inadequate quality inspections for non-food items, as well as the potential occurrence of liability-related expenses, are recognized as key risk issues. The Quality Assurance Department and Production & Procurement Division oversee this area, monitoring the number and details of nonconformities and serious quality incidents at the Quality Assurance Committee (monthly) and the Risk Management Steering Committee (bimonthly).

Serious violations of laws and regulations such as the Companies Act, tax law, Financial Instruments and Exchange Act, and Tokyo Stock Exchange rules, violations of food safety-related regulations, individual misconduct and scandals at affiliated companies, as well as negative evaluations from shareholders and investors due to delayed responses to environmental issues such as GHG emission reductions, water resources, and plastics, and declining social trust due to human rights issues such as forced labor and harassment occurring at the company and its business partners, are recognized as key risk issues. The Finance & Accounting Department, Quality Assurance Department, Compliance Committee, Sustainability Group, and Legal Department oversee their respective areas, establishing a multi-layered reporting structure to the Board of Directors (quarterly), the Quality Assurance Committee, the Compliance Committee, the Sustainability Committee, and others, while also advancing human rights due diligence.