NISSIN FOODS GROUP

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Basic Concept on Corporate Governance, Capital Structure, Corporate Attributes and Other Basic Information

1. Basic Concept

While providing safe and worry-free foods, and promoting businesses to maximize benefits to all stakeholders including shareholders, consumers, employees, business partners, local communities, and local residents, the Company recognizes enhanced and strengthened corporate governance as one of the top priorities for management and strives for highly objective and transparent management. To achieve this objective, the Company has already appointed more than one Outside Director and Outside Audit & Supervisory Board Member, and has proactively incorporated the opinions of outside experts in management, thereby endeavoring to invigorate management and make it transparent. In particular with regard to Directors, based on a resolution at the 68th Ordinary General Meeting of Shareholders held on June 28, 2016, we have reduced the number of Internal Directors by six, to three, and increased the number of Outside Directors by one, to five. By making Outside Directors the majority, the Company is further strengthening supervisory functions and promoting swifter decision-making.

As a company with an Audit & Supervisory Board, the Company has a system for monitoring the Directors’ execution of duties with three Audit & Supervisory Board Members (of which, two are Independent Outside Audit & Supervisory Board Members). Furthermore, the Company is striving to further enhance corporate governance by placing several staff specializing in assisting the operations of Audit & Supervisory Board Members, enhancing the Internal Auditing Office, which improves the efficiency of audits by cooperating with Audit & Supervisory Board Members, and reinforcing the internal control systems, etc.

The Company changed its trade name from “Nissin Food Products Co., Ltd.” to “NISSIN FOODS HOLDINGS CO., LTD.” on October 1, 2008, and made a transition to the holding company system effective the same date. The Company has structured a system in which the Company becomes a holding company, and instant noodle business, chilled foods business, and frozen foods business are respectively transferred to subsidiaries to be established through an incorporation-type company split to position them at the same level as other subsidiaries. The Company made this transition to the holding company system as we determined it necessary to build management structure to help further boost competitiveness of operating companies in order to lead the NISSIN FOODS Group (the “Group”) to achieve significant growth going forward. We aim to maximize corporate value of the entire Group in accordance with the Medium-Term Business Plan.

Disclosure Based on the Principles of the Japan’s Corporate Governance Code

The Company complies with all of the principles of Japan’s Corporate Governance Code revised in June 2021.

【Principle 1-4】

■ Policy on Reduction of Cross-Shareholdings in Listed Companies
In addition to obtaining dividends and capital gains, from a management strategy viewpoint, the Company holds shares in listed companies as deemed necessary for forming positive relationships with business partners and enhancing corporate value over the medium to long term by promoting smooth operations through efficient and stable transactions, business alliances, etc. Among these shares, the Company adopts a basic policy of selling shares whose grounds for holding have weakened as soon as practicable. As stated in the Corporate Governance Report released on June 25, 2020, the Company has stated that it would “reduce equivalently 20% of the number of cross-shareholdings compared with those held at the end of fiscal year ended March 31, 2019 over the next two to three years.” By the end of May 2021, the Company sold all amount of four issues and part of the amount of five issues that amounted to ¥13,765 million in total measured at the fair value as of the end of fiscal 2019, thereby reducing the cross-shareholdings by more than 20% and achieving the plan ahead of schedule.
Furthermore, at the Board of Directors meetings held annually in April, the Company comprehensively considers the economic rationality of each individual issue of shares, such as the contribution to business revenue and whether the actual returns exceed the earnings targets based on capital costs, the holding purpose, the status of transactions and other factors, and regularly verifies whether to continue holding the shares and the selling schedule. At the meeting of the Board of Directors held on April 7, 2021, the Company resolved to reduce its cross-shareholdings to approximately ¥10 billion over the next two years.
As of March 31, 2021, the Company held 59 issues of cross-shareholdings (¥87,376 million on the balance sheet) and by the end of May 2021 sold the entire amount of the one issue and part of the amount of the two issues that amounted to ¥8,155 million in total measured at the fair value as of the end of fiscal year ended March 31,2020. As a result, the ending balance of the cross-shareholdings as of the end of May 2021 that is translated at the fair value as of the end of fiscal year ended March 31, 2020 is equivalent to 18.8% of consolidated net assets of ¥421,435 million as of the end of March 2021.
■ Standards for Exercising the Voting Rights as to Cross-Holdings of Shares
In exercising voting rights of shares in listed companies held, the Company appropriately exercises them by evaluating overall factors including if such exercise contributes to enhancing its corporate value over the medium to long term and if it contributes to common interests of shareholders of the companies to be invested in.

【Principle 1-7】

■ Transactions with Related-Parties
In the event of transactions between a Director and the Company (self-transactions and indirect transactions) or transactions between a principal shareholder (with 10% or higher holding) and the Company, such transactions shall be discussed before their implementation at a meeting of the Board of Directors, and in addition, the Director who carried out said transaction shall be required to report said transaction at a meeting of the Board of Directors without delay after implementing said transaction. The Company has set forth these procedures in the Board of Directors Regulations and other internal company regulations.

【Principle 2-4 (1)】

(1) Basic concept on ensuring diversity
The NISSIN FOODS Group proactively recruits and appoints human resources with a variety of strengths and specialization in order to become a “food culture creator group” that adapts to changing times and also creates changes. Moreover, prohibition of discrimination and harassment based on race, ethnicity, nationality, religion, beliefs, place of birth, gender, sexual orientation, gender identity, age, disability, etc. is spelled out in the NISSIN FOODS Group Policy on Human Rights, which aims for a workplace where employees who hold various attributes and values can play an active role. In 2015, the NISSIN FOODS Group established the “Diversity Committee” with internal volunteer members, and promoted diversity & inclusion by working closely together with the Human Resources Division.
〈Female employees〉
The NISSIN FOODS Group puts effort into an employment system where it is easy to work while raising children as well as the reform of awareness internally in order to promote the active participation of female employees. As a result, the Group was selected as a “Platinum Kurumin (recognized in 2019)” and one of the “Semi-Nadeshiko Brands (recognized in 2019 and 2020).”
The Group promotes the expansion and training of the human resources pool with the targets of 20% for the ratio of total female generalist employees and 10% for the ratio of female managers by the end of FY2025 in order to have a comfortable work environment and increase the number of female employees actively participating in important positions. In order to achieve targets (FY2020: 13% ratio of total female generalist employees, 5% ratio of female managers), the Group promoted various aspects, such as the establishment of numerical targets for each department, implementation of a sponsor system where officers commit to training employees themselves, implementation of programs where supervisors learn management methods under an environment marked by diversity and programs where female employees develop leadership skills, and formation of networking between female employees.
  • *Figures and measures are presented for core companies (NISSIN FOODS HOLDINGS CO., LTD., Nissin Food Products Co., Ltd., NISSIN CHILLED FOODS CO., LTD., NISSIN FROZEN FOODS CO., LTD.)
〈Mid-career employees〉
The NISSIN FOODS Group proactively recruits mid-career employees who have a variety of experience, wisdom and specialization for promoting challenges in new fields, such as globalization, DX, etc. Currently, there is active participation by many mid-career employees, with a recruitment ratio of full-time mid-career employees of 75%, employment ratio of 49% and ratio of mid-career employees in management positions of 32%. The Group works on initiatives, such as the implementation of a start-up program and internal network support, so that mid-career employees can quickly demonstrate their abilities.
Going forward, the Group intends to maintain the current employment ratio and create an organization conducive to innovation through the combination of “knowledge” from new graduates and mid-career employees.
  • *Figures and measures are presented for core companies (NISSIN FOODS HOLDINGS CO., LTD., Nissin Food Products Co., Ltd., NISSIN CHILLED FOODS CO., LTD., NISSIN FROZEN FOODS CO., LTD.)
〈Foreign employees〉
The NISSIN FOODS Group continuously recruits and appoints human resources regardless of nationality with the policy of utilizing a various human resources to achieve the mid- to long-term growth strategy. Therefore, there are no numerical targets for foreign employees.
In particular, there are 33 foreign employees at core companies, and four of these employees are playing an active role in management. Moreover, out of the 11 overseas subsidiaries, three companies have Presidents from different countries playing active roles.
  • Core companies: NISSIN FOODS HOLDINGS CO., LTD., Nissin Food Products Co., Ltd., NISSIN CHILLED FOODS CO., LTD., NISSIN FROZEN FOODS CO., LTD.
(2) Human resources development policy to ensure diversity, establishment of internal environment and the situation of such
The Group has implemented implement programs that teach awareness of diversity & inclusion as well as knowledge and skills for management by launching the “DIVERSITY ACADEMY” in “NISSIN ACADEMY,” which is a human resources development group. Furthermore, the Diversity Committee, which was established in 2015, has launched multiple projects for different types of people, such as projects for female employees, members of the LGBTQ community, employees raising children and junior employees, and made internal proposals for the creation of an environment where it is easy for diverse human resources to demonstrate their abilities.
Moreover, the Group elicits a variety of individual initiatives, and creates a system even in the on-site work, which makes it is easy to realize growth through the implementation of the “challenge target system,” “1-on-1 meetings” and “growth realization meetings (human resource review meetings)” in order for on-site managers to support the growth of each and every member.

【Principle 2-6】

■ Roles of Corporate Pension Funds as Asset Owners
To ensure that beneficiaries continue to receive stable pension benefits in the future, the Group formulated the composition ratio for plan assets, keeping in mind risks and returns. The management status of plan assets is regularly monitored and the composition ratio for plan assets is reviewed as necessary by the Asset Management Committee, which is composed of members including the Company’s finance and accounting department. The pension plan management institution is comprehensively evaluated and monitored taking into consideration information such as their management performance, management policy, management structure, and management process.
Nissin Food’s Corporate Pension Fund declared that it accepted the Stewardship Code in September 2020. From the standpoint of institutional investors as asset holders, the pension plan management institution requires the fulfillment of stewardship responsibilities, the increase of corporate value for investee companies through dialogue with investee companies, and the stimulation of sustainable growth.

【Principle 3-1 (1)】

■ Nissin Foods Group’s CSV management

We will achieve sustainable growth while solving environmental and social issues by becoming a “EARTH FOOD CREATOR (food culture creator group)”, which keeps creating new food culture on a continuous basis.

  • ・Mission : The spirit of our founder (“食足世平 Shoku-soku Se-hei,”“食創為世 Shoku-so Isei,” “美健賢食 Bi-ken Ken-shoku,” and “食為聖職 Shoku-i Sei-shoku.”)
  • ・Vision : EARTH FOOD CREATOR
  • ・Value : 4 important thoughts (Creative Unique Happy Global)
■ NISSIN FOODS Group Growth Story for the Mid- to Long-Term

The Company has formulated the “NISSIN FOODS Group Mid- to Long-Term Growth Strategy,” a business plan that defines medium- to long-term growth strategies for FY2021 and beyond and growth targets over the next 10 years. Through the execution of this strategy, we will pursue the Company’s CSV management.

(1) Strengthen the Cash-Generating Capacity of Existing Businesses
Pursue sustainable growth while making a significant shift of profit portfolios through aggressive growth of overseas business and non-instant noodles business.
(2) EARTH FOOD CHALLENGE 2030
Aim to extend the lifecycle of existing businesses significantly by working to utilize finite resources effectively and reduce the impact of climate change
(3) Pursue New Businesses
Aim to co-create foods of the future with food science and become a company that provides food and health solutions through technology

Specific details are posted on the Company’s official website.

Mid- to Long-Term Growth Strategy

【Principle 3-1 (2)】

■ Basic Concept and Policies on Corporate Governance

While providing worry-free and safe foods, and promoting businesses to maximize benefits to all stakeholders including shareholders, consumers, employees, business partners, local communities, and local residents, the Company recognizes enhanced and strengthened corporate governance as one of the top priorities for management and strives for highly objective and transparent management. To achieve this objective, the Company has already appointed more than one Outside Director and Outside Audit & Supervisory Board Member, and has proactively incorporated the opinions of outside experts in management, thereby endeavoring to invigorate management and make it transparent. In particular, with regard to Directors, based on a resolution at the 68th Ordinary General Meeting of Shareholders held on June 28, 2016, we have reduced the number of Internal Directors by six, to three, and increased the number of Outside Directors by one, to five. By making Outside Directors the majority, the Company is further strengthening supervisory functions and promoting swifter decision-making.

As a company with an Audit & Supervisory Board, the Company has a system for monitoring the Directors’ execution of duties with three Audit & Supervisory Board Members (of which, two are Independent Outside Audit & Supervisory Board Members). Furthermore, the Company is striving to further enhance corporate governance by placing several staff specializing in assisting the operations of Audit & Supervisory Board Members, enhancing the Internal Auditing Office, which improves the efficiency of audits by cooperating with Audit & Supervisory Board Members, and reinforcing the internal control systems, etc.

【Principle 3-1 (3)】

■Policies and Procedures in Determining the Remuneration
For details, please refer to II.1【Director Remuneration】「Disclosure of Policy for Determining Remuneration Amounts or Calculation Methods Thereof」

【Principle 3-1 (4)】

■ Policies and Procedures for Selection of Candidates for Directors and Audit & Supervisory Board Members
〈Composition of the Board of Directors and Criteria for Selection of Candidates for Directors〉
In order to develop the Group’s operations in Japan and overseas under its philosophy, “EARTH FOOD CREATOR,” the Group selects candidates who possess extensive experience, deep insight, and advanced specialization, while comprehensively taking into account the balance of knowledge, experience, and capabilities; diversity in fields of specialization , gender and age, as well as race, ethnicity, nationality and country of birth; appropriateness of scale of the Board of Directors as a whole and other factors.
Candidates for Internal Directors are selected from among those people who are involved in Group management, such as Executive Officers, Chief Officers, Presidents of operating companies, and Chief Representatives in each area, in addition to President & Representative Director, CEO, Executive Vice President & Representative Director, COO.
Candidates for Outside Directors are selected from those who, as well as satisfy the standards of the Companies Act, are management executives, academic experts and the like, based on their deep insight and advanced specialization with extensive experience in domestic and overseas economics, finance, industry trends, corporate strategy, marketing, advanced research, etc., and who are capable of not only checking in the Board of Directors meetings from an objective standpoint the legality of management and the appropriateness of decision-making in the execution of duties, but also, the Group expects, providing advice leading to business activities that will enhance corporate value in the Board of Directors meetings, etc.
As for the procedures for the above, candidates are decided by the Board of Directors after the appropriateness of them is deliberated and verified by the Management Advisory Committee.
Candidates for the management team (hereinafter refers to Directors with special titles and Executive Officers with special titles) are selected from among persons selected as Director as above and from among the Executive Officers in principle who have past achievements, a strong sense of purpose toward the realization of the Group’s philosophy, strong leadership, popularity inside and outside the Company, and high capabilities in management judgment from such factors as experience, knowledge and expertise, and after these selected individuals are subjected to the deliberation and verification by the Management Advisory Committee, the Board of Directors judges whether these selected individuals are suitable persons as members of the management team.
Concerning dismissal of members of the management team, in addition to the annual examination carried out by the Management Advisory Committee based on performance results, in the event of circumstances arising suggestive of the individual meeting the criteria for dismissal (through (1) an action that violates the laws and regulations, the Articles of Incorporation, or internal rules such as the Code of Conduct and that has caused or has the risk of causing a significant loss or a hindrance of business in the Group, (2) a significant difficulty in execution of duties, and (3) revelation that the individual is lacking the various requirements stated in the criteria for selecting), the grounds for the dismissal shall be examined and verified at the Management Advisory Committee and the decision of dismissal will be made by the Board of Directors.
〈Composition of the Audit & Supervisory Board and Criteria for Selection of Candidates for Audit & Supervisory Board Members〉
Based on the Companies Act and other laws and regulations, as well as the Articles of Incorporation and other regulations, the Audit & Supervisory Board audits the process of decision-making by the Directors and the status of their execution of duties.
The number of the Audit & Supervisory Board Members is four or fewer, the majority of whom are Outside Audit & Supervisory Board Members.
The criteria for selecting candidates for Audit & Supervisory Board Members (internal) is to select people who can perform auditing and ensure management soundness from a perspective based on extensive operational experience in the Group.
The criteria for selecting candidates for Outside Audit & Supervisory Board Members is to select people who satisfy the standards of the Companies Act, and who have extensive experience and advanced specialization, which are necessary for audit.
As for the procedures for the above, candidates are decided by the Board of Directors after the appropriateness of them is deliberated and verified by the Management Advisory Committee and after obtaining the approval of the Audit & Supervisory Board.
〈Criteria for Assessing Externality and Independency of Independent Outside Directors and Independent Outside Audit & Supervisory Board Members〉
The Company appoints Outside Directors and Outside Audit & Supervisory Board Members as independent officers in accordance with requirements for outside directors and outside audit & supervisory board members defined in the Companies Act and the criteria for independency defined by the Tokyo Stock Exchange.

【Principle 3-1 (5)】

■ Reasons for Nominating Each Candidate for Directors and Audit & Supervisory Board Members

Reasons for nominating each candidate for Directors and Audit & Supervisory Board Members are stated on the Notice of the 73rd Ordinary General Meeting of Shareholders posted on the Company’s website.

Shareholders' Meeting

【Supplementary Principle 3-1 (3)】

■Sustainability Initiatives, Etc.
Based on the four tenets of “(“食足世平 Shoku-soku Se-hei,” “食創為世 Shoku-so Isei,” “美健賢食 Bi-ken Ken-shoku,” and “食為聖職 Shoku-i Sei-shoku”)” stated by the founder, the NISSIN FOODS Group aims to become the embodiment of an “EARTH FOOD CREATOR,” which is the Group philosophy, by becoming a “food culture creator group” that continuously creates new food culture, and working for sustainable growth while solving environmental and social issues.
(1) Sustainability initiatives
The NISSIN FOODS Group has set forth the Group philosophy of being an “EARTH FOOD CREATOR” that contributes to society and the earth by gratifying people everywhere with the pleasures and delights “food” can provide. As the pioneer of instant ramen, the Group’s mission is to not only provide safe and delicious food to people, but to promote the development of products that will solve environmental and social issues as well.
For details regarding the Company’s initiatives, please refer to “III. Implementation of Measures for Shareholders and Other Stakeholders/3. Measures to Ensure Due Respect for Stakeholders/Implementation of Environmental Activities, CSR Activities, etc.” in this report as well as the Company’s website (https://www.nissin.com/en_jp/sustainability/).
(2) Investment, etc. into human capital and intellectual property
The NISSIN FOODS Group aims to become the embodiment of an “EARTH FOOD CREATOR,” which is the Group philosophy, by becoming a “food culture creator group” that continuously creates new food culture, and working for sustainable growth while solving environmental and social issues. With “Human Resources to Support Our Strategies/Organizational Foundation Reform” as an important theme of the mid-to long-term growth strategy, the Group aims to realize an innovative organization that continues to execute strategies and create new food culture.
Furthermore, as a general food company group, the Group aims for the realization of a “branding corporation” that is made up of the top brands through constant creation and development of top brands within each category, and works to ensure and increase corporate value and the common interests of shareholders while establishing an even more unshakable management foundation. The competitive advantage of the Company is its brand strength in marketing & innovation in addition to its competitiveness as a “Food Tech Company” based on the processing technologies cultivated over many years.
Through these initiatives, the Group will support the Company’s future growth strategy. Details concerning the mid- to long-term growth strategy as well as specific initiatives concerning human resources and R&D activities are presented in the materials below.
〇Mid- to long-term growth strategy
・The Company’s website (https://www.nissin.com/en_jp/ir/management/strategies/)
〇Human resource initiatives
・“Disclosure Based on the Principles of the Japan’s Corporate Governance Code/Supplementary Principle 2-4(1)” in this report
・The Company’s website (https://www.nissin.com/en_jp/sustainability/social/employee/)
〇R&D activities
Annual securities report
(3) Impact of risks and profit opportunities pertaining to climate change on the Company’s business activities, profit, etc.
The Company positions climate change as one of the most important management risks as the NISSIN FOODS Group, which consists of companies that create food, is affected by various factors, such as soaring raw material costs and damage to manufacturing plants due to climate change in addition to changes to consumers’ purchasing activities.
Furthermore, the Company endorsed information disclosure related to “governance,” “strategy,” “risk management” and “metrics and targets” recommended by the “Task Force on Climate-related Financial Disclosures” (TCFD) established by the Financial Stability Board, and took part in the “TCFD Consortium,” which was founded in May 2019.
For details, please refer to the Company’s website (https://www.nissin.com/en_jp/sustainability/environment/policy/risk/).

【Supplementary Principle 4-1 (1)】

■ Agenda for Deliberation at the Board of Directors
To implement the corporate strategy and achieve the target metrics of operating performance, the Board of Directors of the Company with attendance of Outside Directors engages in comprehensive and substantive deliberation over corporate strategy, medium- to long-term plans and business challenges. Accordingly, the Board of Directors determines certain important matters for the Company and the Group companies including M&A, organizational change, and a large amount of asset acquisition or disposal in accordance with these strategies. To ensure prompt execution of duties, the Board of Directors makes decisions based on the amount, etc. specified in the Regulations for Approval and delegates any subjects that fall below the specified amount to such subordinate functions as the Management Committee, CEO, COO, Executive Officers, Chief Officers, and regional Chief Representatives.

【Supplementary Principle 4-1 (3)】

■ Succession Plan for CEO
To develop perpetually as an EARTH FOOD CREATOR, the Group must strategically groom corporate managers who set forth a medium- and long-term mission and realize and execute the corporate philosophy.
When choosing the CEO successor, candidates are selected from among persons selected as Director and from among the Executive Officers in principal who have past achievements, a strong ownership and sense of responsibility toward realization of the Group’s philosophy, and popularity from inside and outside the Company for exceptional capabilities in decision-making, reaching breakthroughs, winning peoples’ hearts and minds, and a clear sense of morals and values, as well as having broad experience and knowledge relating to corporate management, a keen spirit to acquire cutting-edge insight, and excellent business judgement. After the selected individual is subjected to the deliberation and verification by the Management Advisory Committee, the Board of Directors judges whether the selected individual is suitable person as the successor.

【Principle 4-8】

■ Number of Independent Outside Directors and Ratio of Independent Outside Directors in the Board of Directors
The Board of Directors of the Company comprises eight Directors, of which three are Independent Outside Directors, and accordingly the ratio of Independent Outside Directors in the Board of Directors is greater than 1:3. In addition to the Independent Outside Directors, there are also two more Outside Directors. Including the three Independent Outside Directors, there are five Outside Directors in total. As a result, Outside Directors make up the majority of Directors under the existing system, and there is effective action being taken to make management more transparent and to strengthen the supervisory function.

【Principle 4-9】

■ Criteria for Externality and Independency of Independent Outside Directors
The Company appoints Outside Directors as independent officers in accordance with requirements for Outside Directors defined by the Companies Act and the independence standards set out by the Tokyo Stock Exchange.

【Principle 4-10 (1)】

■Concept, Authority and Roles Related to Voluntary Nominating Committee and Remuneration Committee and Related to Independence of Committee Structure
In 2015, the Company established the “Management Advisory Committee,” which is chaired by an Independent Outside Director and the majority of which are Independent Outside Directors, in order to strengthen the supervisory functions of the Board of Directors and at the same time ensure transparency and fairness in management. Furthermore, in internal regulations, the Board of Directors is required to consult with the Management Advisory Committee prior to its deliberation and resolution of particularly important matters concerning the Company’s corporate governance system, such as nominations, remuneration, etc. related to management, including Directors. The Management Advisory Committee, which receives consultations, contributes to discussions by the Board of Directors by reporting these deliberation results to the Board of Directors. Moreover, the Board of Directors works to ensure fairness and transparency through the need to deliberate and resolve related matters, having respect for reports from the Management Advisory Committee and taking them into full consideration.
For details related to the Management Advisory Committee, please refer to “II. Business Management Organization and Other Corporate Governance Systems regarding Decision-making, Execution of Business, and Supervision in Management/1. Organizational Composition and Operation/[Directors]/Supplementary explanation.”

【Supplementary Principle 4-11 (1)】

■Views on the Balance of Knowledge, Experience and Capabilities, Diversity and Scale of the Board of Directors as a Whole
In order to develop the Group’s operations in Japan and overseas under its philosophy, “EARTH FOOD CREATOR,” the Group selects candidates who possess extensive experience, deep insight, and advanced specialization, while comprehensively taking into account the balance of knowledge, experience and capabilities; diversity in fields of specialization, gender and age, as well as race, ethnicity, nationality and country of birth; appropriateness of scale of the Board of Directors as a whole and other factors.
Based on the above policy, the Company clarifies the requirements, such as knowledge, experience, capabilities, etc., needed by officers of the Company in order to realize the management strategy, such as the mid- to long-term growth strategy. Furthermore, the “skill matrix,” which lists the reasons for selecting each of these requirements and the roles that each officer is particularly expected to play is described below.
Roles particularly expected of Directors and Audit & Supervisory Board Members
The Board of Directors of the Company shall be composed of persons suitably qualified as officers of the Company who have the extensive experience, deep insight, advanced specialization and capabilities needed by the Company. Furthermore, in light of the “skill matrix,” which clarifies the requirements for officers and was derived from management strategies, such as the mid- to long-term growth strategy, the Company selects a good balance of members to make up the Board of Directors so that there are neither too many or too few members in each field.
The “skill matrix” presents the roles particularly expected in order to make the most of the skills possessed by each officer, and does not indicate all of the skills possessed by each officer.
〈Skill matrix〉
Name Positions and responsibilities Corporate management Brand strategy Food Tech Sustainability Structural reform Finance and accounting Risks and Legal affairs
Koki Ando President & Representative Director, CEO
Noritaka Ando Executive Vice President & Representative Director, COO
Yukio Yokoyama Director, CSO, and Managing Executive Officer
Ken Kobayashi Outside Director
Masahiro Okafuji Outside Director
Masato Mizuno Outside Director (Independent Officer)
Yukiko Nakagawa Outside Director (Independent Officer)
Eietsu Sakuraba Outside Director (Independent Officer)
Masahiko Sawai Audit & Supervisory Board Member
Naohiro Kamei Outside Audit & Supervisory Board Member (Independent Officer)
Chisugi Mukai Outside Audit & Supervisory Board Member (Independent Officer)
〈Details of each skill and reasons for selection〉
Skill Details and reasons for selection
Corporate management In order to formulate and execute a medium- to long-term sustainable growth strategy amid a dramatically changing business environment, it is necessary to have a solid knowledge, experience, and achievements in overall corporate management.
Brand strategy In order to further clarify and establish the core values of “CUP NOODLES,” which has reached the stage that it can be called a global brand, and the competitive advantage of each overseas region, and to continue to grow over the medium to long term by steadily increasing sales and profits even in mature markets such as Japan, it is necessary to have a wealth of knowledge and experience regarding brand strategy.
Food Tech In order to achieve
(i) further advancement and development of the Company’s high technological capabilities;
(ii) the realization of a stable supply of safe, secure, and high-quality products incorporating advanced technologies; and
(iii) the creation of a new food culture that makes full use of creativity and food tech and the realization of the development of a complete food business as a FUTURE FOOD CREATOR,
it is necessary to have knowledge that can make various innovations in the food field, and solid knowledge and experience in each field of quality, production, and technology development.
Sustainability In order to promote CSV management for the realization of the Vision and sustainable growth, and to realize the challenge of effective utilization of limited resources and mitigation of climate change impact (EARTH FOOD CHALLENGE 2030), a wealth of knowledge and experience in the field of sustainability is necessary.
Structural reform Human resources and organizations In order to realize an innovative organization that continues to implement strategies and create a new food culture, and to define and implement the NISSIN-style transformation roadmap, a wealth of knowledge and experience in the human resources and organizational fields is necessary.
IT In an environment where IT technology is changing rapidly, a wealth of knowledge and experience in the digital field is required to promote the company-wide activity theme NBX (NISSIN Business Transformation) aiming to transform the business model itself not limited to pure digitalization.
Finance and accounting In addition to accurate financial reporting, solid knowledge and experience in the financial and accounting fields are necessary to build a strong financial base, promote growth investments to achieve sustainable enhancement of corporate value, and formulate financial strategies that enhance shareholder returns.
Risks and Legal affairs In order to establish an appropriate governance system that is the foundation of sustainable enhancement of corporate value and realize a stable supply of food, which is our mission, it is necessary to have solid knowledge and experience in the fields of risk management, corporate governance, and law.
The policies and procedures for the selection of candidates for Directors are explained in 【Principle 3-1 (4)】.

【Supplementary Principle 4-11 (2)】

■ Status of Concurrent Positions of Directors and Audit & Supervisory Board Members with Other Listed Companies’ Officers
The Company posts the status of concurrent positions of Directors and Audit & Supervisory Board Members every year in the Notice of Ordinary General Meeting of Shareholders.
Shareholders' Meeting

【Supplementary Principle 4-11 (3)】

■ Analysis and evaluation of Effectiveness of the Board of Directors
In order to achieve the sustainable growth of the NISSIN FOODS Group and enhancement of its corporate value over the medium to long term, the Company confirms whether the Board of Directors is fulfilling its role and evaluates its effectiveness annually to enhance the effectiveness of the Board of Directors.
The evaluation method was determined based on the deliberations of the Management Advisory Committee and the Board of Directors, and evaluations were regularly carried out by a third party. At the Management Advisory Committee meeting held in November 2020, as a result of deliberations regarding the method to carry out evaluations of the effectiveness of the Board of Directors in the fiscal year ended March 31, 2021, the Company decided to carry out self-evaluations by way of questionnaires.
The summary of the analysis and evaluation results of the questionnaire conducted for the fiscal year ended March 31, 2021 are as follows. In addition, the Independent Outside Directors have expressed the opinion that the assessment process performed for the fiscal year ended March 31, 2021 is appropriate.
(1) Assessment process
  • (i)The Management Advisory Committee deliberated the evaluation process and items to be evaluated, which were reported to the Board of Directors. Based on the details of the Management Advisory Committee’s report, the Board of Directors deliberated and determined the method of evaluating effectiveness.
  • (ii)The questionnaire was delivered to all Directors and Audit & Supervisory Board Members on a named basis, and the office for the Board of Directors aggregated and analyzed the answers.
  • (iii)The Management Advisory Committee assessed effectiveness of the Board of Directors based on the analysis results, deliberated any issues and reported the results to the Board of Directors.
  • (iv)The Board of Directors shared the assessment results and confirmed any issues to be addressed for the coming fiscal year.
(2) Structure of the questions
The questionnaire is comprised of 29 questions in the following five categories. The response for each question has a five-level scale and there is a box to freely add comments for the applicable items.
  • (i)Role of the Board of Directors
  • (ii)Composition of the Board of Directors and the systems for nomination and remuneration of the members of management team
  • (iii)Systems to support the Board of Directors
  • (iv)Management of the Board of Directors
  • (ⅴ)Management Advisory Committee
(3) Overview of the questionnaire results
The Company confirmed that both the supervisory functions and the decision-making functions expected to the Board of Directors were properly working and the effectiveness was being ensured.
(i) Items for which the evaluation result notably improved
While generally high evaluations had already been received since before regarding the effectiveness of the Board of Directors because an appropriate PDCA cycle had been established based on the effectiveness evaluations, in comparison with the previous fiscal year, it was confirmed that further improvements had been made in relation to the enhancement of disclosure on cross-holdings of shares, which was an issue last year in particular.
(ii) Efforts based on the evaluation result for the fiscal year ended March 31, 2020, and evaluation of results
In the evaluation of effectiveness for the fiscal year ended March 31, 2020, the Company decided that the “enhancement of disclosure on cross-holdings of shares” and the “further strengthening of cooperation between Outside Directors and Internal Audit Department” are necessary. In response to this, the Board of Directors of the Company took the following measures:
  • - Initiatives for the “enhancement of disclosure on cross-holdings of shares”
    The Company resolved the future policy concerning capital policy (including cross-holdings of shares), and externally, enhanced disclosure details, such as by clarifying quantitative targets in the corporate governance reports, and presented the plan to reduce cross-holdings of shares with even more specificity.
  • - Initiatives for the “further strengthening of cooperation between Outside Directors and Internal Audit Department”
    The Company strengthened cooperation between Outside Directors and the Internal Audit Department, such as by securing opportunities for the Board of Directors to report and discuss the status of activities of the Internal Auditing Office, and with regular activity reports on the Board of Directors by the Internal Auditing Office.
As a result of the foregoing, it was confirmed at the time of the self-evaluations conducted in the fiscal year ended March 31, 2021 that improvements had been made concerning the “enhancement of disclosure on cross-holdings of shares.” On the other hand, the “further strengthening of cooperation between Outside Directors and Internal Audit Department” is recognized as “currently under improvement,” and continues to be identified as an issue to be worked on.
(iii) Issues to be addressed for further improvement of the effectiveness
While efforts had already been initiated, in order to further improve the effectiveness of the Board of Directors, the need to further strengthen cooperation between Outside Directors and the Internal Audit Department, strengthen the involvement of the Board of Directors in the appointment of executives, including executive officers, and enhance deliberations on important matters to be discussed was indicated.
We are committed to mounting efforts to increase effectiveness of the Board of Directors by making improvements on a continuous basis.

【Supplementary Principle 4-14 (2)】

■ Policy on Training Directors and Audit & Supervisory Board Members
To ensure that management supervision and auditing functions are sufficiently conducted by the Directors and Audit & Supervisory Board Members, the Company provides information necessary to the execution of duties in an appropriate and timely manner. Furthermore, to ensure sufficient deliberation at Board of Directors meetings, Outside Directors and Outside Audit & Supervisory Board Members are provided in advance with Board of Directors meeting materials, explanations, and related information. In addition, when such Outside Directors and Outside Audit & Supervisory Board Members assume office, they are provided with orientations, dialogues with the management team, and other ongoing opportunities for understanding the Company’s operations. Furthermore, the Company provides Directors and Audit & Supervisory Board Members with opportunities for training by third-party institutions, with the Company bearing the costs of such training.

【Principle 5-1】

■ Policy on Constructive Dialogue with Shareholders
For dialogues with our shareholders, the Company has assigned the General Affairs Division as contact point for individual investors and the IR Office for institutional investors.
For dialogues (interviews) with our shareholders, IR Office studies how to handle them with Representative Directors, the Director and CSO, CFO and other personnel, and takes appropriate actions.
The Company has the Finance Platform lead to work closely with PR Platform, General Affairs Platform, Legal Platform and other to exchange opinions based on their respective expertise in each division concerning disclosure and accountability of financial results, items subject to timely disclosure and the like.
The Company holds financial results meetings for institutional investors twice a year (the first half and the full year) and mainly President & Representative Director, CEO provides briefing. In addition, the Company arranges telephone conferences twice a year (the first quarter and the third quarter) where Directors and CFO provide briefing on the financial results. Furthermore, IR Office serves as a contact point for interviews with institutional investors. Other than this, the IR Office arranged opportunities to enhance dialogue by serving as a contact point for the appropriate carrying out of interviews with analysts and institutional investors, small meetings, etc.
For individual investors, the General Affairs Division takes the initiative in disclosing information on the Company’s website. Additionally, the Company often holds presentation meeting for individual investors as necessary. There is a dedicated point of contact in the General Affairs Division.
The IR Office and the General Affairs Division regularly collect opinions received from institutional investors and shareholders and share this information with the Representative Directors, officers, presidents of the Group companies, and other relevant divisions. In addition, this information is reported to the Board of Directors and at other meetings.
The Company obtains updated information on the shareholder composition from the register of shareholders as of March 31 and September 30 of every year, and performs research on effective owners of the shares.
When engaging in dialogues with our shareholders and investors, the Company never communicates insider information (undisclosed material facts). The Company maintains “silent periods” from the date following the end of each quarter to the announcement of results, during which the Company refrains from communicating with our shareholders and investors concerning financial information.

2. Capital Structure

Foreign Shareholding Ratio From 10% to less than 20%

Status of Major Shareholders

Name Number of Shares Owned (Shares) Shareholding Ratio (%)
The Master Trust Bank of Japan, Ltd. (Account in Trust) 10,603,200 10.28
Ando Foundation 7,904,300 7.67
Mitsubishi Corp. 7,800,028 7.56
ITOCHU Corp. 5,400,000 5.23
Ando International Y.K. 3,945,500 3.82
Custody Bank of Japan, Ltd. (Account in Trust) 3,602,000 3.49
Mizuho Bank, Ltd. 1,687,000 1.63
Nissin KYOEI-KAI 1,540,600 1.49
MUFG Bank, Ltd. 1,483,598 1.43
Custody Bank of Japan, Ltd. (as trustee for Retirement Benefit Trust of Mizuho Trust & Banking Co., Ltd.) 1,483,000 1.43
Controlling Shareholder (except for Parent Company) ―――
Parent Company N/A

Supplementary Explanation

The Company has neither parent company nor listed subsidiaries.

3. Corporate Attributes

Listed Stock Market and Market Section Tokyo Stock Exchange First Section
Fiscal Year-End March
Type of Business Foods
Number of Employees (Consolidated) at End of the Previous Fiscal Year 1,000 or more
Net Sales (Consolidated) for the Previous Fiscal Year From ¥100 billion to less than ¥1 trillion
Number of Consolidated Subsidiaries at End of the Previous Fiscal Year From 50 to less than 100

4. Policy for Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder

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5. Special Circumstances Which May Have Material Impact on Corporate Governance

NISSIN FOODS CO., LTD. (listed on the Main Board of the Hong Kong Exchanges and Clearing; hereinafter referred to as “Hong Kong Nissin”) and KOIKE-YA Inc. (hereinafter referred to as “KOIKE-YA”) are listed subsidiaries of the Company.
The Group is focusing on growing and expanding its overseas business to become an “EARTH FOOD CREATOR,” as set out in the Group Philosophy, and contribute to society and the earth by exploring various possibilities for food, creating dream-inspiring delicious tastes and providing the pleasures and delights of food globally. Based on this policy, Hong Kong Nissin has strengthened its corporate structure to speed up its decision-making capability and better respond to change, and in order to expand its presence in the Chinese market, it was listed on the Main Board of the Hong Kong Exchanges and Clearing on December 11, 2017.
Furthermore, after beginning a business and capital alliance in May 2011, the Company continually strengthened its relationship with KOIKE-YA, such as by acquiring shares in KOIKE-YA. The Company realized synergy through the establishment of specific collaborative relationships, such as collaboration in the product development and marketing field and the sales, logistics and material procurement field on the business front, and the starting up of joint ventures in overseas business. The corporate value of both the NISSIN FOODS Group and KOIKE-YA will increase due to KOIKE-YA becoming a consolidated subsidiary in November 2020 and the further promotion of initiatives carried out thus far. KOIKE-YA is working to ensure an effective governance system, such as by increasing the transparency and objectivity of management as a company with an audit and supervisory committee where the supervisory function is executed by the audit and supervisory committee, a majority of which are Outside Directors.
Since Hong Kong Nissin and KOIKE-YA are listed subsidiaries, the Company respects the independence of the listed subsidiaries based on the understanding that properly protecting the interests of the listed subsidiaries and the shareholders of the listed subsidiaries other than the Company and other stakeholders will contribute to increasing the corporate value of the subsidiaries.
The Company intends to maximize the corporate value of the entire Group by establishing a group governance system for the Group, including the listed subsidiaries, based on the “Basic Policy on Construction of Internal Control Systems,” etc. determined by the Company while ensuring the independence of the listed subsidiaries’ management based on the above policy.

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