Risk Management

Policies

Of late, the business environment changes significantly and the types of risks in business activities span a broad range. The NISSIN FOODS Group properly understands all kinds of internal and external risks and works to prevent risks from manifesting and mitigate damage when they do to seek sustainable growth while protecting corporate value.
For risk management, we aim to meet the expectations of a wide range of stakeholders, and our basic policy is to build a resilient corporate foundation.

Structure

Risk Management Structure

The NISSIN FOODS Group has put in place a Comprehensive Risk Management Committee chaired by the Executive Vice President/COO to prevent, identify, manage, and address a wide variety of risks. Based on the NISSIN FOODS Group Code of Risk Management, the risk management departments take on the role as secretariat, and persons responsible for risk measures are appointed at major NISSIN FOODS HOLDINGS departments as well as at Group companies in Japan. Besides managing risks in an integrated manner, the Comprehensive Risk Management Committee instructs major NISSIN FOODS HOLDINGS departments and business corporations to identify hidden and manifested risks in our value chain and to establish mechanisms to prevent risks and minimize damage. If an event occurs and has a severe impact on the Group, the chairperson of the Comprehensive Risk Management Committee sets up a Group serious incident taskforce headed by the CEO to quickly address the incident and put forward measures to prevent a recurrence.
In addition, product accidents, business continuity planning (BCP), compliance, and information security are positioned as our four key risks, and each key risk has its own committee to study the mitigation of manifested risks and measure to prevent risks.
Major risks related to the environment and human rights are also continuously monitored by the Sustainability Committee, chaired by the President & Representative Director/CEO. Thematic working groups established under this committee discuss sustainability-related risks, such as climate change and biodiversity. Furthermore, we collaborate with the Comprehensive Risk Management Committee to monitor the processes for managing major risks across the entire Group, striving to prevent any impairment of corporate value. In the event of a serious accident, such as one relating to the environment, we respond immediately in accordance with our manual and take steps to contain and resolve the situation.

To manage Group-wide risks, the Group undertakes early discovery of risks and proper response to them based on the framework of the Three Line Model*. We identify, analyze, and evaluate Group-wide risks to understand the risks to prioritized by the Group and build systems that generate self-discipline within our organizations.

* A model that proves that the governing body, management, and the Auditing Division play three key roles in governance
First line: Business divisions (including associates in Japan and overseas)
The first line carries out daily operations based on stipulated regulations and internal procedures. Regarding risks and such accompanying the execution of duties, independent governance activities (identification, evaluation, management, and control of risks and such) are conducted as the risk owner.
Second line: Comprehensive Risk Management Committee as well as departments for risk management, compliance, and information security
The second line monitors, measures, and evaluates the independent governance activities undertaken by the first line, and at the same time, has the responsibility of formulating and promoting basic policies related to risk management and governance of compliance.
Third line: Auditing Division
The third line evaluates the activities of the first and second lines from an independent position as well as provides advice and undertakes correction to ensure effectiveness of risk governance.

Risk Management Process

The Group prepares risk assessment reports covering likelihood and impact based on the results of interviewing presidents and chief officers of the Group’s business corporations regarding the state of risk management. Furthermore, in accordance with an international risk assessment framework, we assign coefficients to the financial impact, ripple effect, and insurance coverage rate; as a Management Impact Assessment, each risk is assessed and classified into one of four stages to identify major risks. For each identified risk, specific policies are stipulated and measures are implemented in an effort to reduce the risk. In particular, for risks that have high Group-wide impact and span several departments, we establish subcommittees comprising staff from the relevant departments for monitoring of the management state and implementing responses. In addition, the management state of each risk and the effects of risk measures are reported annually at meetings of the Board of Directors.
For FY 3/2026, we have established a policy to identify the four key risks of unauthorized access (cyber-attacks), the global supply chain, human resources, and reputation, as well as to comprehensively manage the increasingly complex and interlinked risks from a company-wide perspective.

FY 3/2025 Risk Map

Category	Subcategory
(1) Product liability	①	Product liability (product accident)
(1) Product liability	②	Food safety and security
(2) Business continuity plan	③	Disasters and accidents
(3) Compliance	④	Violation of laws, regulations, etc.
	⑤	Insider trading
	⑥	Personnel and labor affairs
	⑦	Infringement of intellectual property rights
(4) Information security	⑧	Information leaks and unauthorized access
(4) Information security	⑨	Information systems
(5) Environment	⑩	Environment
(6) Reputation	⑪	Loss of brand value
(6) Reputation	⑫	Damage to corporate image and bad reputation
(7) Finance and accounting	⑬	Accounting and tax affairs
	⑭	Finance
	⑮	Resignation payment accounting supplementation
(8) Corporate	⑯	Human resources
	⑰	Corporate blackmail
	⑱	Group Governance
	⑲	Corporate Governance
	⑳	Shareholders
(9) Supply chain management	㉑	Raw material procurement
	㉒	Production asset maintenance
	㉓	Logistics
	㉔	Bad debts in supply chain
(10) Other	㉕	Human Rights
(10) Other	㉖	Generative AI/AI agents

Priority of response	Risk category	Likelihood (A)	Impact (B)	Total score (C)	Management Impact Assessment (A x B x C)
1	Information leaks and unauthorized access	Medium	High	A	StageⅣ
2	Damage to corporate image and bad reputation	Medium	Medium	A
3	Human resources	Medium	Medium	A
4	Raw material procurement	Medium	Medium	A
5	Disasters and accidents	Medium	Medium	A
6	Logistics	Medium	Medium	B
7	Personnel and labor affairs	Medium	High	B
8	Violation of laws, regulations, etc.	Medium	Medium	B
9	Environment	Medium	Medium	B	StageⅢ
10	Human Rights	Medium	Medium	B
11	Production asset maintenance	Low	Medium	B
12	Shareholders	Medium	Low	B
13	Corporate Governance	Medium	Medium	C
14	Group Governance	Medium	Low	B
15	Generative AI/AI agents	Medium	Low	B
16	Product liability (product accident)	Low	Medium	C
17	Loss of brand value	Low	Low	C	StageⅡ
18	Infringement of intellectual property rights	Low	Medium	C
19	Information systems	Low	Low	B
20	Food safety and security	Low	Low	B
21	Insider trading	Low	Medium	C
22	Finance	Low	Low	C
23	Accounting and tax affairs	Low	Low	C
24	Bad debts in supply chain	Low	Low	C
25	Resignation payment accounting supplementation	Low	Low	C
26	Corporate blackmail	Low	Low	C

*Management Impact Assessment: A relative assessment used to prioritize risk assessment and response measures
Stage IV: A level requiring the strengthening of measures with the utmost vigilance
Stage III: Signs of significant impact. A level requiring ongoing measures.
Stage II: A level where continued implementation of routine measures is sufficient.
*Comprehensive coefficient
Calculated using a threshold designed to identify top-level risks that threaten the very survival of the company by pushing beyond the limits of the current risk management framework

For FY3/2026, based on an assessment of likelihood and impact, as well as results calculated using a comprehensive coefficient derived from an international risk assessment framework, we have identified four key areas: data breaches and unauthorized access (cyber-attacks), raw material procurement (global supply chain), human resources, and damage to corporate image and reputation. These risks do not occur in isolation; rather, they have the potential to develop into chain reaction scenarios—such as geopolitical risks → cyber-attacks → disruption of the global supply chain → soaring raw material prices → damage to reputation—and therefore require company-wide risk management.

Expected Risks and Mitigation Measures

NISSIN FOODS Group risk category	Type of risk and acceptable range	Response to risk
Human resources	・Risk of manpower shortage due to tighter management of working hours ・Risk of not achieving well-being due to deterioration in working environment and mental health ・Risk of being unable to secure the necessary human resources and manpower for business activities ・Risk of hindrance to business succession and business growth due to shortage of human resources for management executives ・Risk that brings about a reduction in the Group’s social confidence and trust due to being unable to meet the requirements for human capital ・Risk that brings about a reduction in the Group’s social confidence and trust due to being unable to meet the social requirements for recognizing, accepting, and applying diversity	・Promote Smart Work project as part of work style reform ・Formulate multi-stakeholder policy ・Introduce NISSIN-style job-based model ・Formalize responsibility for respecting human rights in the NISSIN FOODS Group Policy on Human Rights and NISSIN FOODS Group Ethics Regulations ・Build human rights due diligence process and conduct risk assessment ・Set up the Human Rights Working Group under the auspices of the Sustainability Committee and promote business activities that take human rights into account ・Ensure thorough awareness internally about initiatives related to diversity, equity, and inclusion, and create workplace environments where employees with diverse attributes and values can fully demonstrate their capabilities ・Strengthen human resource development by conducting Group philosophy training and establishing the in-house university NISSIN ACADEMY ・Strengthen the global human resources structure ・Formulate a health declaration and promote health initiatives with the aim of simultaneously achieving employee well-being and high performance
Information leaks and unauthorized access	・Risk that brings about a reduction in the Group’s social confidence and trust due to being unable to properly respond to rising social concern and awareness regarding the protection of personal information and privacy ・Risk that brings about a loss of customers or a reduction in the Group’s social confidence and trust due to concern or detriment brought about by errors in the management and use of personal information ・Risk that brings about loss of the Group’s social confidence and trust due to erroneous use of information assets in possession of the Group resulting in the violation of laws and regulations ・Risk of information outflow and loss as well as monetary damage and such being incurred due to unauthorized access, including intentional action or mistake by the Group’s employees and cyberattacks from a third party ・Risk that brings about a reduction in the Group’s social confidence and trust due to improper acquisition of the Group’s information, use of such information for purposes other than intended, and such by external contractors	・Manage and operate various types of information assets based on the Basic Policy on Information Security ・Stipulate a privacy policy and make it known internally ・Comply with laws and regulations regarding personal information and guidelines issued by the concerned authorities ・Establish the Information Security Committee ・Promote information security measures with reference to the international standard ISO 27001 and the Cybersecurity Management Guidelines established by the Ministry of Economy, Trade and Industry ・Establish NISSIN-CSIRT, which analyzes the cause and investigates the scope of impact, and strengthen the ability to respond to incidents through external exercises and tabletop training ・Strengthen the recruitment of human resources with specialized IT skills such as registered information security specialists ・Conduct regular e-learning-based knowledge checks and security drills ・Conduct third-party vulnerability assessments for internal infrastructure and websites operated by the Group

Annual Securities Report (Business and Other Risks) p.47 [PDF 20.3MB]

Emerging Risks

Risks that are expected to have severe long-term impact on the Group’s business activities—and which have yet to manifest but may appear in the future depending on changes in the external environment—are positioned as emerging risks. The Group evaluates medium- to long-term (three to five years or more) impact to business and responds to emerging risks.

Emerging Risks Related to Generative AI/AI Agents and Response Measures

Explanation of risk	In recent years, rapid advances in generative AI and AI agents have led to significant changes in the risk landscape surrounding corporative activities. Within the Group, while AI is a key technology underpinning the advancement of our business operations, it can also be a source of new risks. ・Reputational risks arising from the spread of disinformation and impersonation via generative AI ・Leaks of confidential information resulting from employees’ use of Shadow AI ・Legal risks relating to copyright, moral rights, and other matters concerning AI-generated content We also recognize that, as the evolution of AI brings about changes in business processes and decision-making, new risks may emerge in terms of governance and the capabilities and skills of our human resources.
Impact on the Group’s business activities	AI plays a vital role in advancing risk management; when utilized under appropriate controls, it presents opportunities to reduce risks and improve operational efficiency. ・Emergence of reputational risks ・Increased information security and compliance risks ・Intellectual property and legal risks ・Impact on human resources and business processes
Measures to address risk	Proposed measures for utilizing AI as a risk mitigation tool in the future ・Establishing an AI governance and management framework ・Strengthening information security and legal response ・Improving digital transformation literacy through employee education ・Utilizing AI as a risk management tool - Reduction of SCM risks through AI-powered demand and market forecasting - Enhancement of foreign matter detection using image recognition AI - AI-powered cyber threat detection - Utilizing AI for contract review and regulatory monitoring

Explanation of risk

In recent years, rapid advances in generative AI and AI agents have led to significant changes in the risk landscape surrounding corporative activities. Within the Group, while AI is a key technology underpinning the advancement of our business operations, it can also be a source of new risks.

・Reputational risks arising from the spread of disinformation and impersonation via generative AI
・Leaks of confidential information resulting from employees’ use of Shadow AI
・Legal risks relating to copyright, moral rights, and other matters concerning AI-generated content

We also recognize that, as the evolution of AI brings about changes in business processes and decision-making, new risks may emerge in terms of governance and the capabilities and skills of our human resources.

Impact on the Group’s business activities

AI plays a vital role in advancing risk management; when utilized under appropriate controls, it presents opportunities to reduce risks and improve operational efficiency.

・Emergence of reputational risks
・Increased information security and compliance risks
・Intellectual property and legal risks
・Impact on human resources and business processes

Measures to address risk

Proposed measures for utilizing AI as a risk mitigation tool in the future

・Establishing an AI governance and management framework
・Strengthening information security and legal response
・Improving digital transformation literacy through employee education
・Utilizing AI as a risk management tool
- Reduction of SCM risks through AI-powered demand and market forecasting
- Enhancement of foreign matter detection using image recognition AI
- AI-powered cyber threat detection
- Utilizing AI for contract review and regulatory monitoring

Emerging Risks Related to the International Situation and Their Countermeasures

Explanation of risks	The worsening of relations and heightening of tension between countries—against a backdrop of political, social, military, and cultural factors around the world—may impact companies’ business continuity. In particular, the risks related to the international situation in the regions listed below may have severe impact on business continuity by disrupting the Group’s supply chains (paralyzing commercial logistics) and causing delays in procurement and the implementation of production strategies. They are therefore recognized as emerging risks. The Americas ・Expansion of China decoupling measures by the United States ・Economic recession due to stagnant economy and political turmoil in Central and South America China ・China’s interference in Taiwan’s politics and worsening of relations between the United States, China, and Taiwan Asia ・China’s interference in Taiwan’s politics and worsening of relations between the United States, China, and Taiwan Europe ・Prolongation of conflict between Russia and Ukraine
Impact to the Group’s business activities	・Procurement delays and increase in procurement prices due to changes in raw material transport routes in Japan and overseas, as well as difficulty in supplying products caused by inability to procure raw materials ・Delays in product supply due to delays or difficulty in procurement of development materials in Japan and overseas ・Malfunction of communication systems when cyberattacks occur due to worsening of relations between countries ・Malfunction of communication systems when cyberattacks occur due to worsening of relations between countries ・Worsening of relations between countries leading to exclusion or restriction (boycott) of Japanese companies (foreign products) and difficulty in business continuity (safety of local employees, paralysis of commercial logistics, communication disruptions) of business corporations at overseas locations
Risk countermeasures	・Monitor and collect information regarding legal systems and regulations of countries where overseas Group companies are located ・Obtain advice from external consultants ・Promote supplier distribution and diversification toward strengthening of supply chains ・Collaborate with external agencies, industrial groups, and such, as well as study the reduction of risks related to the international situation, including geopolitical risks

Explanation of risks

The worsening of relations and heightening of tension between countries—against a backdrop of political, social, military, and cultural factors around the world—may impact companies’ business continuity. In particular, the risks related to the international situation in the regions listed below may have severe impact on business continuity by disrupting the Group’s supply chains (paralyzing commercial logistics) and causing delays in procurement and the implementation of production strategies. They are therefore recognized as emerging risks.

The Americas

・Expansion of China decoupling measures by the United States
・Economic recession due to stagnant economy and political turmoil in Central and South America

China

・China’s interference in Taiwan’s politics and worsening of relations between the United States, China, and Taiwan

Asia

・China’s interference in Taiwan’s politics and worsening of relations between the United States, China, and Taiwan

Europe

・Prolongation of conflict between Russia and Ukraine

Impact to the Group’s business activities

・Procurement delays and increase in procurement prices due to changes in raw material transport routes in Japan and overseas, as well as difficulty in supplying products caused by inability to procure raw materials
・Delays in product supply due to delays or difficulty in procurement of development materials in Japan and overseas
・Malfunction of communication systems when cyberattacks occur due to worsening of relations between countries
・Malfunction of communication systems when cyberattacks occur due to worsening of relations between countries
・Worsening of relations between countries leading to exclusion or restriction (boycott) of Japanese companies (foreign products) and difficulty in business continuity (safety of local employees, paralysis of commercial logistics, communication disruptions) of business corporations at overseas locations

Risk countermeasures

・Monitor and collect information regarding legal systems and regulations of countries where overseas Group companies are located
・Obtain advice from external consultants
・Promote supplier distribution and diversification toward strengthening of supply chains
・Collaborate with external agencies, industrial groups, and such, as well as study the reduction of risks related to the international situation, including geopolitical risks

Emerging Risks Related to Packaging Regulations and Countermeasures

Explanation of risks	Intergovernmental negotiations*1 are ongoing worldwide to formulate a legally binding international instrument (treaty) to prevent environmental pollution caused by plastics. In addition, multiple countries and regions are advancing measures such as bans or reductions on single-use plastics, adoption of circular designs (monomaterialization, design for recyclability), mandatory or encouraged use of recycled materials, strengthening of EPR (Extended Producer Responsibility), introduction of deposit systems, and stricter labeling requirements. These developments could affect packaging design for products that serve as both containers and packaging, which the Group supplies globally. They are therefore recognized as emerging risks.
Impact to the Group’s business activities	・Delays in addressing regional container and packaging regulations or labeling requirements may lead to delayed product launches and reduced competitiveness ・Rising procurement costs for container and packaging raw materials, and purchasing constraints due to export restrictions or domestic production limitations at suppliers of specific raw materials, could result in unstable product supply ・Tight supply of alternative container/packaging raw materials and longer lead times (the period from order placement to delivery or receipt) could cause delivery delays
Risk countermeasures	・Conducting policy proposals and exchanging opinions through participation in meetings of organizations promoting a circular economy, such as the Ellen MacArthur Foundation2, Circular Partners3, and CLOMA*4 ・Strengthening collaboration within the value chain (suppliers, recyclers, and retailers) ・Reinforcing raw material procurement strategies for containers and packaging ・Enhancing packaging design strategies ・Seeking advice from external consultants

*1At the United Nations Environment Assembly in March 2022, an Intergovernmental Negotiating Committee (INC) was established to develop a legally binding international instrument (treaty) aimed at ending plastic pollution. As of October 2025, no document has yet been agreed upon, but ongoing discussions are planned.
*2NISSIN FOODS HOLDINGS joined the UK-based nonprofit organization established to realize a circular economy, in 2024.
*3NISSIN FOODS HOLDINGS has participated in Circular Partners since its establishment in 2023, which aims to study measures for achieving a circular economy in Japan.
*4NISSIN FOODS HOLDINGS has participated as a steering company in CLOMA (Clean Ocean Material Alliance), a public-private partnership working toward the sustainable use of plastic products and the development of alternative materials, since January 2019.