Risk Factors

Conditions that have the potential to significantly influence the decisions of investors are presented below. Any conditions with reference to the future are based on information available at the time of publication of the current annual report. The Company acknowledges the possibility that these risks can arise, and will make every effort to prevent such risks from appearing and address resulting situations if such risks do appear.

1. Food safety issues

Product reputation could be unfavorably affected if unanticipated and unusual health-related situations were to arise in the future, or could be impacted by food safety problems occurring overseas.

2. Risk derived from changes in demographic trends

Overall demand in the instant noodle market would shrink due to the declining birthrate, aging population, and declining population in Japan.

3. Risk of decline in brand value

The relative brand value of the Company’s products could decline if another company were to achieve a revolutionary breakthrough in instant noodle development.

4. Risk of product liability

In the event of a product liability accident, a product recall that cannot be covered by insurance could incur additional reparation costs.

5. Risk of increases in prices of raw materials

Material prices could increase significantly due to factors such as political unrest or international disputes occurring in the countries that produce raw materials and crop failures caused by abnormal weather associated with global warming.

6. Risk of natural disasters

If a large-scale earthquake or wind and flood damage from a typhoon were to occur and manufacturing facilities incurred damage, the Company's production infrastructure could suffer because, for example, an interruption in operations would reduce output, and repairs to facilities and equipment would raise expenses.

7. Risk related to overseas operations

Operation could become difficult due to political unrest in countries where the Company's subsidiaries and associates are located, issues threatening to undermine food safety, or legal controls in certain countries.

8. Risk related to information systems

The Company's systems could be damaged and/or data could be leaked outside the organization due to illegal system access by unauthorized individuals through technologies that the Company has not envisioned, or due to an unknown computer virus getting through established safeguards.

9. Risk of declining market values on marketable securities

Worsening market conditions that cause market values to decline or a sluggish performance by equity investments could cause impairment losses.

10. Risk related to the accounting for impairment of fixed assets

Fixed assets could face a substantial decline in fair value and future cash flows.

11. Reliance on certain business clients

Difficulty in collection of accounts receivable could occur due to deterioration of business conditions of suppliers who are on sales of products and procurement of certain raw materials. Production activities could stop if the supply of raw materials is suspended and the Company's production has to be halted.ed assets. Such circumstances could negatively affect the Company's financial position and financial performance.

12. Exchange rate fluctuations

The local financial statements in each region are translated to Japanese yen for the purpose of preparing consolidated financial statements. Hence, exchange rate fluctuations may have an effect on the Group’s consolidated results and financial position, even if there is no change in the value in local currencies.