NISSIN FOODS HOLDINGS CO.,LTD.

If a system failure or external leakage of internal information occurs due to cyber attacks or unauthorized access to the information systems that manage production, sales, and administrative information, this could affect the financial position and business results. This has been designated as one of the most critical risk areas for FY2025, and the company is promoting enhanced ransomware countermeasures, development of AI guidelines, incident response through CSIRT, and strengthened security management across the entire supply chain. Information leakage due to employees' use of shadow AI amid the spread of generative AI, as well as copyright risks associated with AI-generated content, are also being monitored as emerging risks.

Key raw materials such as wheat flour and palm oil, as well as petroleum products, are exposed to the risk of price surges or supply disruptions due to geopolitical risks, international conflicts, and abnormal weather associated with climate change, which could affect business results. This has been designated as a most critical risk area for FY2025, and the company is promoting priority measures such as selecting multiple sourcing countries, launching a Supply Chain Risk Management Subcommittee, conducting training exercises for SCM-related system outage response, and strengthening procurement of domestically produced agricultural and livestock products. Scenarios in which geopolitical risk cascades into cyber attacks, supply chain disruption, and raw material price surges are also being considered.

Against the backdrop of a declining working-age population, greater fluidity in the labor market, and diversifying values, if it becomes difficult to secure, develop, and retain talent to drive global business, highly specialized personnel, management talent, and next-generation leaders, this could impede the execution of growth strategies and the advancement of global management, thereby affecting corporate value, financial position, and business results. This has been designated as a most critical risk area for FY2025, and the company is implementing measures such as establishing a succession framework for key global positions, formulating a medium-term talent strategy, developing talent through NISSIN ACADEMY, and promoting DE&I.

Due to the global expansion of stakeholders and diversification of values, insufficient responses to societal expectations regarding food safety, human rights, the environment, and other matters could lead to a decline in brand value and loss of trust. This has been designated as a most critical risk area for FY2025, and reputational damage caused by disinformation and impersonation using generative AI is also recognized as an emerging risk. The company is addressing this through the formulation of the

Natural disasters caused by climate change that damage manufacturing plants, rising raw material prices, the introduction of carbon pricing systems, and changes in people's behavior patterns may affect the financial position and business results. The company continues to conduct risk and opportunity assessments based on TCFD scenario analysis, and under the

As a food manufacturer, if problems arise regarding product quality or safety, the company could be held liable for product liability, potentially having a material impact on its financial position and business results. As countermeasures against foreign object contamination, the company has introduced high-performance X-ray inspection equipment, thorough hygiene management, and a raw material traceability system, and is strengthening its quality management system through a proprietary quality assurance framework centered on the Global Food Safety Research Institute and factory audits based on the Nissin Foods Safety Standards (NISFOS).

With numerous business locations and factories domestically and internationally, the risk of head office functions, factory operations, and logistics supply being halted due to large-scale earthquakes, wind and flood damage, and other natural disasters, or the outbreak of infectious diseases, is increasing. In light of the intensification of disasters due to recent abnormal weather and the rising geopolitical risks globally, the company continues to conduct training and exercises based on an all-hazard BCP to mitigate unexpected risks across the supply chain, and has established a system for the rapid establishment of a disaster response headquarters according to the extent of damage.

Fluctuations in exchange rates may affect the financial position and business results through surging foreign-currency-denominated procurement costs and the yen conversion of overseas subsidiaries' financial statements. In addition, impairment losses may be required due to a decline in fair value of held securities amid deteriorating market conditions, poor performance of investees, or reduced profitability of fixed assets. The company addresses these risks through measures to reduce foreign exchange risk via forward contracts, economic rationality reviews by the Investment Committee, and continuous monitoring of investment effectiveness.

In overseas businesses that are fundamentally based on local production and local sales, if political instability, international conflicts, tightened legal regulations, or events threatening food safety occur in the countries of operation, this could affect the financial position and business results of the relevant subsidiary or the company. Under a policy that prioritizes ensuring employee safety above all else, the company has established a specialized platform to build a support system for each overseas local subsidiary.

With the advance of the declining birthrate and aging population, the young user segment that constitutes the main purchasing base is decreasing, and the domestic instant noodle market has remained flat on a long-term basis, which could affect the company's business results. The company is working to maintain and expand its customer base through product development tailored to each target segment, including seniors, young people, and women, to create new eating occasions; the development of new businesses utilizing food technology to address health needs; and reinforced proactive approaches to young overseas consumers.