NISSIN ODYSSEY
Annual Report 2016

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GRAPHSTO ALLSTAKEHOLDERS

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IGNITION
Once we created the instant noodle business,there was no going back. The drive to be originalthat helped us get our start remains at the core of
the NISSIN FOODS Group today, and it’s been
the key to securing a dominant share of theJapanese instant noodle market. However,steady domestic market leadership is not our end
goal. Rather we see it as the launching point forwhat we will achieve next.

PERFORMANCE BY
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INFORMATIONBACK TO CONTENTSPROLOGUE

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INFORMATIONPROPULSION
Wherever we go we want to deliver an international sharedexperience. So the promotion of CUP NOODLES as a global
brand will go hand in hand with our regional strategies. We chose
CUP NOODLES because of its high profitability and its popularity
with a young and steadily growing middle class. Add to that thefact that it embodies the unbeatably high level of our technologicalknow-how and safety assurance, and we think this one little
product has what it takes to go a long way.

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PERFORMANCE BY
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INFORMATIONMISSION
While keeping our sights on the worldwide market,
we have sharpened our global strategy to concentrateon the areas with the most potential for rapid sales growth.
Our next prime locations are Brazil, Russia, India, and China(BRICs). The BRIC nations account for approximately half of theworld demand* in instant noodles, and they will likely see a future
increase in customers who want the quick, safe, affordable,delicious, and long shelf-life food options that we provide.
We plan to increase our market shares in these countries bytailoring our sales strategies to the needs of each.
*	World Instant Noodles Association (WINA)
URL: http://instantnoodles.org/en/index.html

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INFORMATIONCONNECTION
We believe the quality of our products can speak for itself. With
every new generation we simply need to find the best way tointroduce those products to consumers. To reach recent
generations, and expand our domestic market, we havesignificantly increased our presence on social media. Shifting thetarget of our brand communication has already resulted in an
increase in sales and positive reactions among the Group’s next
generation of customers.

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IMAGINATIONPERFORMANCE BY
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INFORMATION

While pursuing global status brings great opportunities, it also forces us
to constantly consider who we are and how we interact with thosearound us. We adapt to change through imagining what no one else
does, but we cannot do that in a vacuum.
Our Group philosophy, signified by “EARTH FOOD CREATOR,” calls
us to keep looking to customers to inspire products that fulfill the needsof their diverse lifestyles. It also prompts us to consider the
responsibilities of a global brand, and how to fulfill increasing
expectations in the transformative years to come.

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The challenge of space exploration

PERFORMANCE BY
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is that it compels people to think beyond what they know; it inspires those who want to test creative limits.
The Group grew from a similar scenario. In 1958, our founder’s invention of Chicken Ramen, the world’s first

SUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

instant noodles, was the unimagined solution to a problem. Next came CUP NOODLE, the world’s first cup-typeinstant noodles that could be cooked and served in their packaging. Our inventive spirit directly met the demands ofspace with Space Ram, the first instant noodles that could be consumed in orbit.
Back on earth, originality remains our starting point for any new endeavor. From the most influential decisions tothe smallest product adjustments, we are always seeking where one step further will take us.

CONTENTS
07

GRAPHS

07

FINANCIAL PERFORMANCE

19	PERFORMANCE BY
BUSINESS SEGMENT

08

NON-FINANCIAL PERFORMANCE

19

SALES AND OPERATING INCOME BY SEGMENT

09

TO ALL STAKEHOLDERS

20

DOMESTIC BUSINESS HIGHLIGHTS

21

OVERSEAS BUSINESS HIGHLIGHTS

09
13

CEO MESSAGE
CFO MESSAGE

22

SUSTAINABLE MANAGEMENT

15

FOCUS: CREATIVITY ON THE BOIL

22

BOARD OF DIRECTORS

16

01 #NISSIN
Noritaka Ando, Executive Vice President &Representative Director, COO (Chief Operating Officer)
President & Representative Director,
NISSIN FOOD PRODUCTS CO., LTD.

17	02 Variety is Spice
Fusako Znaiden, CMO (Chief Marketing Officer)
18

03 Scoring in Brazil
Takashi Asano, President of NISSIN FOODS DO BRASIL LTDA.

24	AUDIT & SUPERVISORY BOARD MEMBERS,EXECUTIVE OFFICERS AND CHIEF OFFICERS
25
CORPORATE GOVERNANCE
28

RISK MANAGEMENT31QUALITY ASSURANCE

33

HUMAN RESOURCES35ENVIRONMENTAL / SOCIAL ACTIVITIES36

FINANCIAL SECTION

36	CONSOLIDATED SIX-YEAR SUMMARY OF SELECTEDFINANCIAL DATA
37
FINANCIAL STATEMENTS

42	NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
68

INDEPENDENT AUDITOR’S REPORT69

INFORMATION

69	BUSINESS AREAS OF CONSOLIDATED SUBSIDIARIESAND ASSOCIATES
71
INVESTOR INFORMATIONBACK TO CONTENTS

FINANCIALPERFORMANCEPROLOGUE
GRAPHSTO ALLSTAKEHOLDERSNet Sales

Operating Income

Net Income Attributable to
Owners of Parent *1
Return on Equity(Billions of yen)(Billions of yen)(Billions of yen)

Net sales

Operating income

468.1
417.6 431.6(FY) 2012

2013

2014

2015

2016

(FY) 2012

2013

(Yen)

SUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

246

26.9

26.4
24.3

24.0

380.7 382.8

EPS

PERFORMANCE BY
BUSINESS SEGMENT	Net income attributable toowners of parent
Return on equity (%)

27.7

26.2

FOCUS

7.7

2014

2015

2016

18.5

18.9

6.7

6.4

(FY) 2012

2013

19.3
6.0

2014

7.4
18.5

168

171

175

168

(FY) 2012

2013

2014

2015

5.3

2015

2016

Total Assets
Equity Ratio

Cash Flows

Cash Dividends per Share
Payout Ratio

Capital Expenditures(Billions of yen)(Billions of yen)

(Yen)

(Billions of yen)

Cash flows from operating activities
Cash flows from investing activities
Cash flows from financing activities

Total assets
Equity ratio (%)

414.7
67.6

446.1
68.7

479.5

69.4

512.7

70.6

553.1
32.6

36.2

32.0

Cash dividends per share
Payout ratio (%)

75

30.4

30.2

75

75

75

43.8

42.9

(10.1)

(8.5)
(9.5)

(8.0)
(4.8)

23.0

21.6

44.7
18.9

65.1
(9.4)

32.8

80
27.5

44.7

(12.8)

2016

(3.0)

32.6

(31.3)(45.8)

2012/3 2013/3 2014/3 2015/3 2016/3(FY) 2012

2013

2014

2015

2016

(FY) 2012

2013

2014

2015

2016

(FY) 2012

2013

2014

2015

2016

*1	“Net income attributable toowners of parent” underJapanese accounting
standards, “profit attributableto owners of the parent” under
IFRS standards

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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NON-FINANCIALPERFORMANCEPROLOGUE
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FOCUS

CO2 Emissions

Water Use

(10,000 t-CO2)(10,000 m3)

Japan
Overseas

PERFORMANCE BY
BUSINESS SEGMENT

Number of Employees *1
Number of Female Employees

Japan
Overseas

SUSTAINABLE
MANAGEMENTFINANCIALSECTION

Number of employees
Number of female employees

INFORMATION

16.5

17.2
14.0

13.4

17.4
13.7

17.8

341.2

345.9

364.3

356.4

1,525 1,569

12.6

115.2

132.8

132.0

126.7
333

(FY)

2013

2014

2015

2016

(FY)

2013

2014

2015

Waste Generated
Recycling Rate (Japan)

Change in
Eco-efficiency (Japan) *2(1,000 t)

(%)

Japan
Overseas

99.4

2016

99.4

338

39.8

40.6

25.6
20.6

357

Activity days
Total number of inspections

99.5

397

374

45.3
2.94

3.10

195

2.72
127

24.4

376

329

3.09

2.45
26.0

356

2012/3 2013/3 2014/3 2015/3 2016/3

337
43.3

348

NISSIN Global Food Safety InstituteQuality Survey Activities(Worldwide)

Recycling rate (%)

99.5

1,622

1,720 1,750

143

150

160

*1	The numbers are calculated based on data fromNISSIN FOODS HOLDINGS, NISSIN FOOD
PRODUCTS, NISSIN CHILLED FOODS, NISSINFROZEN FOODS, and NISSIN BUSINESSSUPPORT PLUS.
*2	Eco-efficiency refers to the volume of businessactivity per environmental impact and is used as a
guideline for reducing environmental impacts throughimprovements in technology and economic efficiency(as defined by the Ministry of the Environment’s
Environmental Accounting Guidebook).
		 The NISSIN FOODS Group has calculated
environmental efficiency using the formula below.
Environmental-efficiency =Production weight (t)CO2 emissions (t-CO2)•	Data is from the factories of NISSIN FOOD
PRODUCTS (Kanto, Shizuoka, Shiga, Shimonoseki),
Sapporo Nissin, Ajinihon.

(FY)

2013

2014

2015

2016

(FY) 2006

2013

2014

2015

2016

(FY) 2012

2013

2014

2015

2016
NISSIN FOODS HOLDINGS ANNUAL REPORT 201608

BACK TO CONTENTSCEOMESSAGEPROLOGUE
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PERFORMANCE BY
BUSINESS SEGMENTLAYING OUR
GLOBAL PLANS
ON THE TABLESUSTAINABLE
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INFORMATION

Koki Ando
President & Representative Director
CEO (Chief Executive Officer)

One could describe as an “odyssey” our passage froma garden tool shed to ¥468.1 billion in worldwide sales
as the inventor of instant noodles, but that is nothingcompared to the course we have set before us now.
In the next phase of our journey, seeking out theopportunities and rewards of global-scale competition, we will apply the unique thinking and dedicationthat have made us the leader in Japan’s instant noodle
market. This is because we are a company that thrives
on challenges, and aiming big will once more bring out
the best in us. Here, then is a preview of our future
path to becoming a global innovator.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016
2015

09

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Previous Medium-Term Business Plan: Review of Numerical Targets
FY2013

Net sales(Overseas)¥382.8¥53.5(Billions of yen)

FY2021 KPIs and Financial Targets

FY2016
Plan¥450.0¥98.5

Results¥468.1¥100.9(Billions of yen except adjusted EPS)FY2016

ChangeResults

Reference
Japanese accounting
standards

IFRS standards

Net sales¥468.1¥600.0¥550.0Adjusted operating
income*3

¥24.7

¥40.0

¥47.5

Market capitalization*2¥570.0¥1,000.0

Net income attributableto owners of parent*1

¥26.9

¥33.0

ROE

7.4%

8% or higher

Adjusted EPS*4

¥196

¥330

+18.1
+2.4

Operating income

¥24.0

¥31.0

¥26.4

–4.6

Net income attributable toowners of parent*1

¥18.9

¥23.0

¥26.9

+3.9

Operating income margin

6.3%

6.9%

5.6%

–1.3pt

ROE

6.4%

7.2%

7.4%

+0.2ptEarning
power throughoperations

Value in
capitalmarkets

PERFORMANCE BY
BUSINESS SEGMENT

FY2021

Japanese accounting
standards

Achieved

FOCUS

Targets

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INFORMATION

Adjusted EPS: CAGR 10% or higher
Payout ratio: 40% or higher on average for the five-year period

Prologue:
Medium-Term Business Plan 2016
To achieve growth overseas, in our previous medium-term business plan, we
actively invested in order to pursue a
global position for the NISSIN FOODSGroup. Although we faced a difficult
business environment in Japan during
the three-year period of the plan (whichbegan in 2012), because of factors
such as the sharp yen depreciation andsoaring raw material prices, we decisively implemented across-the-board
price revisions and were able to absorb
cost increases.
Factors that contributed greatly tothe achievement of our strong businessresults were solid performance from theinstant noodle business in Japan, goodresults in China, where sales of CUPNOODLES were strong, and the consolidation of NISSIN FOODS DO BRASIL
LTDA. as a wholly owned subsidiary. As
a result, we achieved our targets for net
sales, the overseas sales ratio, net
income attributable to owners ofparent*1, and ROE. Net sales in particular reached a record high.
Although we achieved the targets for
key performance indicators (KPIs) that
contribute to the enhancement of “Corporate value in the capital market,” wefell short of our targets for operating
income and operating income margin,
measures of “Earning power centeredon core businesses.” There are two
major reasons for this. The first is that,for the purpose of enhancing the global
management platform support structure,

we brought forward systems investment
and invested in human resources tosupport global management. The
second is that it is taking longer than
expected to achieve profitability in the
Asia segment (which excludes China)
where we have actively invested.
Since the experience gained during
the three-year period of the previous
business plan has enabled us to moreclearly identify regions where we canleverage the Group’s strengths andexpect early profit expansion, I consider
these three years to have been a period
of investment for future breakthroughs.

Destination:
Market Capitalization of¥1 Trillion
Under Medium-Term Business Plan 2021,
positioned as a waypoint to realizing theGroup vision of embodiment of an“EARTH FOOD CREATOR,” we established a clear theme: “Gain a strong
global reputation.” We aim to realize
market capitalization*2 of ¥1 trillion byincreasing earning power centered oncore businesses and focusing on corporate value in the capital market.
Market capitalization is not something we can change by ourselves, as it
is a barometer of investor expectationsof future growth. What we can do is tocapture investor attention by deliveringon healthy KPI targets, specifically, net
NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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Key Strategy Themes to Achieve Our Targets

FOCUS

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENT

1

2

3

CUP NOODLES

BRICs

Promotingglobal branding

Focusing onpriority overseas
locations

Domestic
Instant Noodles

income attributable to owners of parentof ¥33.0 billion, adjusted operating
income*3 of ¥47.5 billion, adjusted EPS*4
of ¥330 (requiring by default a CAGR of
10% or higher), and ROE of 8% orhigher (IFRS basis). Whenever appropriate, we also intend to support theachievement of these goals with active
pursuit of M&A.

Strategy:
Globalization of CUP NOODLESThe first of five strategies for achieving
the KPIs is to promote global branding of
CUP NOODLES. We will improve overseas
profitability by selling CUP NOODLES, ahigh value-added product that enables
us to leverage our strengths, to young
people in their teens and twenties who

Stronger foundations
for profit

enjoy a certain standard of living.
The second strategy is to focus
enterprise resources on BRIC countries,
identified as priority markets in the medium-term business plan. These countries
account for approximately half of worldwide demand for instant noodles.
China is the world’s largest market for
instant noodles. Although we currently dobusiness mainly in coastal areas such as
Guangdong and Shanghai, potential forfurther growth remains through expansion of the sales area to other urban
centers and surrounding regions.
India is the world’s 8th-largest
market. Although the market has temporarily stagnated as a result of spreading
anxiety among consumers caused by asafety issue that occurred in 2015 at acompetitor, we will boost sales of CUP

4

5

Other Products

Human Resources

Establishing a secondary
pillar that generates
revenue and profits

Development
for global
management

NOODLES to the rapidly expanding
middle class, mainly in eight large cities.
We are the overwhelming market
share leader in Brazil, the world’s
10th-largest market. We intend to sellhigh value-added CUP NOODLES basedon our strong sales foundation.
In Russia, the world’s 11th-largest
market, our joint venture MAREVEN
FOOD HOLDINGS LIMITED is the market
share leader. We will seek further growthby boosting technological cooperationand strengthening the support structure.

Strategy:
Toning Up the Group’sCore Operations
The third strategy is laying stronger foundations for our domestic profit. JapanFINANCIALSECTION
INFORMATION

faces the problems of a declining birthrate and aging population; yet, I think thatNISSIN FOOD PRODUCTS, which delivered a strong performance in fiscal 2016,
can grow here, too, by continuing toappropriately target customer segments
and providing new value. To reliably
achieve growth, we will invest to bringhigher levels of sophistication to our factories in order to further strengthen foodsafety and increase productivity. In thisway, we plan to realize a profit base thatis stable over the long term.
The fourth strategy is to establish
secondary pillars of revenue and profitsin addition to instant noodles by injecting technologies cultivated in the instantnoodle business into the confectioneries
and cereals business, and the chilled
and frozen food and lactobacillus drinks
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As captain of our new odyssey I pledge
the full dedication of employees to therealization of the Group vision:
the embodiment of an“EARTH FOOD CREATOR.”
business, because there are strong
affinities between the technologies forthese businesses.
The fifth strategy is to increase andempower the management personnel
who will make it possible to execute
these strategies, and accelerate global
management. If we successfully follow
the five strategies above, we canachieve the KPIs in the business plan.

Credo:
Corporate GovernanceAppropriate for a Global Company
Global companies are required to appropriately consider and respond to ESG(environment, social, and governance)
issues. In the area of governance,
NISSIN FOODS HOLDINGS has

decreased the number of inside directors from nine to three, increased thenumber of outside directors from four tofive, and in so doing increased thenumber of independent outside directors
from two to three. In this way, we willfurther strengthen the oversight functionof management and increase the speedof decision-making while substantiallyincorporating the views of the outside
directors, who comprise a majority of
the Board of Directors.
In terms of social issues, securing
food safety is the first priority for a foodcompany, and the Group will continue
to follow the most rigorous and disciplined approach to ensuring the safetyof our products.
To address environmental issues, wehave established medium-term environ-mental targets to be achieved by fiscal
2021. In managing our business activities, we will place even greater emphasison energy conservation, global warming
mitigation measures, resource conservation and resource recycling measures,and strengthening of the environmental
management system.
As captain of our new odyssey, I
pledge the full dedication of employees
to the realization of the Group vision: theembodiment of an “EARTH FOOD CREATOR.” We will actively undertake business activities to steadily achieve ourobjectives during the period of the medium-term business plan.
Chief Executive Officer

FOCUS

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION*1	“Net income attributable to owners of parent”
under Japanese accounting standards, “profit
attributable to owners of the parent” under IFRS
standards*2	Market capitalization = Share price × Issued sharesat end of year (after deduction of treasury shares)*3	Adjusted operating income = Operating income –Impact of retirement benefit accounting*4	Adjusted EPS = Adjusted NOPAT*5 / Average
issued shares for the period (after deduction oftreasury shares)*5	Adjusted NOPAT = Adjusted operating income +Equity method gains or losses + Amortization of
goodwill (including equity-method affiliates) – Net
income attributable to non-controlling interests

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PROLOGUE

GRAPHSWEIGHING THE
INGREDIENTSFOR HIGHER
RETURNS
Achieved:
Greater Value and Efficiency
In the recently concluded Medium-Term Business Plan 2016, theGroup set a total capital expenditureand business investment budget of¥115.0 billion and established targets
of a payout ratio of 40% or higher andROE of more than 7% during the period of the plan. In actuality, the consolidation of NISSIN FOODS DO BRASIL
LTDA. as a wholly owned subsidiary,among other factors, resulted in agreater than planned total capital expenditure and a business investment of¥124.4 billion. We covered the additional expenses with bank debt financing. That investment, however, will become one of the core drivers forachieving Medium-Term Business Plan
2021, and we are confident that it willlead to enhancement of the Group’s
corporate value. We have also incorporated ERP software as a component of
our IT infrastructure.
Our dividend payout ratio in fiscal
2016 was less than 40% because of a
one-time increase in extraordinary income, but the average payout ratio
during the period of the previous medium-term business plan cleared ourgoal of 40%. In addition, we attained atotal shareholder return ratio of 85.2%
for fiscal 2016 because of share repurchases. We also achieved ROE of
7.4%, which was above our target.

TO ALLSTAKEHOLDERS

FOCUS
PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

Yukio Yokoyama
Director
CFO (Chief Financial Officer)

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A Stronger Global Base for
Future Returns
In May 2016, we announced Medium-Term Business Plan 2021. During
the coming five years, we will concentrate more than ever on boosting profitability and emphasize increasing EPS
and ROE in management, while we expand our business.
With regard to capital expenditure,
we will pursue well-balanced investments that continue to reflect appropriate consideration of the rate and timingof return on investment. To realize sustained growth in Japan, we plan capital
expenditures to further augment plantsophistication—part of a worldwide investment of approximately ¥150.0 billion.
At the same time, we anticipate investments as high as ¥100.0 billion related to mergers and acquisitions involving
companies not only in the instant noodle
business, but also ones with brand power and the potential to provide synergies
with our existing businesses.
With regard to shareholder returns,
we have set a target payout ratio of
40% or higher on average during theperiod of the new medium-term business plan and will consider making expeditious share repurchases, according
to the financial and management environment. We will look into funding any
portion of cash needed for these measures by utilizing various forms of financing, while striving for Adjusted
EPS*1 CAGR of 10% or higher and ROEof at least 8%.

An Aggressive Start
In fiscal 2017, the first year of the new
medium-term business plan, the Groupwill dash off the start line. We aim toachieve consolidated net sales of ¥500.0
billion, a record high for the Group, andto increase operating income by ¥0.6
billion to ¥27.0 billion. We expect a ¥4.9
billion decrease in net income attributable to owners of parent*3 to ¥22.0 billion mainly due to the non-recurrence ofa one-time extraordinary gain recorded
in fiscal 2016.
In the coming five years, NISSINFOODS HOLDINGS will transform as wework toward gaining a strong global
reputation. As our first step, we aremaking efforts to elevate our accounting
methods to global standards. We haveswitched to the straight-line depreciation
method, under Japanese accounting
standards, as part of adopting IFRS
within the period of the new mediumterm business plan. To help navigate theturbulent waters of change to come, I
will vigorously push ahead with further
sustained enhancement of corporate
value in my role as a business partner tothe CEO and the compass of business
management for the Group.
*1	Adjusted EPS = Adjusted NOPAT*2 / Average
issued shares for the period (after deduction oftreasury shares)*2	Adjusted NOPAT = Adjusted operating income +Equity method gains or losses + Amortization of
goodwill (including equity-method affiliates) – Net
income attributable to non-controlling interests*3	“Net income attributable to owners of parent” underJapanese accounting standards, “profit attributableto owners of the parent” under IFRS standards

Capital Expenditure and Business Investment

FOCUS
PERFORMANCE BY
BUSINESS SEGMENT

Capital Expenditure

ANTICIPATING INVESTMENT OF APPROX.
¥150.0 BILLION OVER FIVE YEARSSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

Domestic

Overseas

Investment aimed atsaving labor andstrengthening safety/
security managementin the instant noodle
business, in theinterests of sustained
growth, etc.

GeneralInvestment instrengthening
production systems
in promising growth
areas

Investment in
improvements/
upgradesM&A

ANTICIPATING INVESTMENT OF APPROX.
¥100.0 BILLION OVER FIVE YEARSOverseas
Domestic

Advanced markets(Europe, U.S.,
Hong Kong, Singapore)

Instant
noodles

Other
products

Emerging markets(Mainly BRICs)

Projects likely to enhance value, revolving around brands

Projects to strengthen
competitiveness, revolving
around confectionery

Projects likely to generate synergy withinstant noodle business(Confectionery, soups, cereals, etc.)

Locations with technology that can be rolled out globally

NISSIN FOODS HOLDINGS ANNUAL REPORT 201614

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CREATIVITY ON
THE BOILFOCUS

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTIONI NS IDE
ST O RIE S

INFORMATIONNISSIN FOODS HOLDINGS ANNUAL REPORT 201615

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01

FOCUS

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION#NISSIN
A New Approach to a New Target
Japan’s population peaked in 2008 and has
been declining since. In this environment,
NISSIN FOOD PRODUCTS developed two
key concepts for achieving further growth.
The first is “To Become a Century Brand
Company,” which refers to maximizing thevalue of our current instant noodle business. The second is “Beyond InstantFoods,” which refers to the creation ofvalues and new core drivers that are currently non-existent.

To Become a Century Brand Company
For NISSIN FOOD PRODUCTS to become
a Century Brand Company, we must upholdour brand image as an innovator and keep
the ability to deliver high profitability—even
a full 100 years after our foundation. To
achieve these goals, we need to not only
engage with our current loyal customers,
but also win over the Millennials. Recently,
the consumption rate of our products
among Millennials has been on the rise as aresult of successful communication throughsocial media marketing to strengthen the

INFORMATION

brand’s ties with the generation considered“digital natives.” Subsequently, we will aim
for further growth in the domestic instantnoodle market by appealing also to womenand seniors, who are generally current
non-users.

Beyond Instant Foods

Noritaka Ando
Executive Vice President &Representative Director
COO (Chief Operating Officer)
President & Representative
Director, NISSIN FOOD
PRODUCTS CO., LTD.

The other key concept, “Beyond InstantFoods,” refers to products that overturnconventional notions and understanding.
Until now, we have focused on the instantnoodle category in our mission to provide
the world with new values. From now on,
we will aim to bring innovation to the foodindustry by committing to create new values
in categories, not only instant noodles. Ourdefinition of innovation is to create values
that have sufficient impact to transform theprevalent food culture and affect that offuture generations. We intend to deliver
these values globally.
NISSIN FOOD PRODUCTS will continue
to support growth overseas and contributeto enhance the Group’s corporate value bycontinuously earning stable, long-term
profits in the domestic market.
NISSIN FOODS HOLDINGS ANNUAL REPORT 201616

BACK TO CONTENTS

FOCUS: CREATIVITY ON THE BOIL

PROLOGUE
GRAPHSTO ALLSTAKEHOLDERS

02

FOCUS

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION

VARIETY IS
SPICEINFORMATION

Fusako Znaiden
Executive Officer
CMO (Chief Marketing Officer)

Zeroing in on Latent User Needs
When I joined NISSIN FOOD PRODUCTS, I
was convinced that the fact that in Japanfew women eat cup-type noodles in comparison to men represents a major opportunity to create a new market at a time whentotal domestic demand is static.
For CUP NOODLE, our leading brand,
we developed a new product line that reflects meticulous attention to calories, flavor, package design, and even noodle
length, and launched Cup Noodle Light Plus
to capture the interest of female consumers.
As we hoped, Cup Noodle Light Plus became an unprecedented hit product.

Values Diversity Gives
Rise to Innovation
Innovation to continuously create unprecedented new value is the core driver of theGroup’s growth. To take this innovation to
the next level, it is essential we haveunique global concepts that emerge fromall manner and types of values. For thisreason, in 2015 we established the Diversity Committee to promote diversity within
the Group. We believe that if we can introduce various values and points of view
through diversity, those values will lead to
new ideas and even greater innovation,and the Group’s competitiveness will increase as a result. We intend to further utilize a diverse workforce made up of people
chosen irrespective of gender, age, nationality, LGBT orientation, or disabilities; makebreakthroughs through innovation; andmove forward with globalization.

NISSIN FOODS HOLDINGS ANNUAL REPORT 201617

BACK TO CONTENTSPROLOGUE

DYSSEYNISSIN O

L 2016JOURNA

GRAPHSTO ALLSTAKEHOLDERS
FOCUS

FOCUS:

OIL

CREAT

THE B
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Note: Unit
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th
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PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

sano

Takashi A
resident,

DA.
P
BRASIL LTODS DONISSIN FODLES
CUP NOONISSIN FOODS HOLDINGS ANNUAL REPORT 201618

BACK TO CONTENTSSALES AND OPERATING INCOME
BY SEGMENT

PROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

Sales by Segment(Billions of yen)

Business

FY2015FY2016FY2016vs
FY2015FY2017
Plan

Operating Income by Segment(Billions of yen)

Business

FY2015FY2016FY2016vs
FY2015FY2017Plan

NISSIN FOOD PRODUCTS

Instant Noodles

215.8

223.6

3.6%

228.3

NISSIN FOOD PRODUCTS

Instant Noodles

23.6

24.0

1.4%

26.7

MYOJO FOODS

Instant Noodles

39.2

41.6

6.2%

42.9

MYOJO FOODS

Instant Noodles

1.4

1.4

-3.6%

2.1

56.6

59.8

5.6%

60.5

(0.2)

0.7

—

1.3

34.3

38.6

12.5%

1.3

1.3

-1.3%

—

—

—

—

—

—

3.0

3.5

19.7%

3.1

(0.1)

(0.2)

—

1.4

348.8

367.1

5.3%

383.8

26.1

27.2

4.0%

34.1

NISSIN CHILLED FOODS

ChilledNISSIN FROZEN FOODS

FrozenNISSIN CISCO *1

Confectionery

NISSIN YORK *1

Beverage
Confectionery

Bonchi *1, 2
Domestic Others *1, 2, 3

Domestic Total

49.0

NISSIN CHILLED FOODS

ChilledNISSIN FROZEN FOODS

FrozenNISSIN CISCO *1

Confectionery

NISSIN YORK *1

Beverage
Confectionery

Bonchi *1, 2
Domestic Others *1, 2, 3

Domestic Total

Instant Noodles

35.7

48.3

35.1%

60.0

The Americas *4

Instant Noodles

0.7

1.1

60.1%

2.3

China

Instant Noodles

34.5

40.9

18.5%

42.1

China

1, 5

Asia *

Instant Noodles

7.8

7.2

-8.0%

EMEA *

Instant Noodles

4.7

4.6

Overseas Total

82.8

Group Total

431.6

Instant Noodles

3.3

4.1

26.4%

3.5

8.9

1, 5

Asia *

Instant Noodles

(2.2)

(2.0)

—

(1.6)

-2.1%

5.2

EMEA *

Instant Noodles

(0.1)

(0.4)

—

0.1

100.9

22.0%

116.2

Overseas Total

1.6

2.8

76.0%

4.3

468.1

8.5%

500.0

Retirement benefit accounting *6

1.1

1.7

58.1%

(4.5)

Amortization of goodwill andelimination of intersegment transactions *6

(0.6)

(1.2)

—

(2.2)

Group expenses *6

(3.9)

(4.1)

—

(4.7)

Group Total

24.3

26.4

8.6%

27.0

1, 3

SUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

2.7

The Americas *4

1, 3

PERFORMANCE BY
BUSINESS SEGMENT*1 These are included in “Others” in “Segment Information” on page 62 and 63.
*2	Bonchi Co., Ltd. has been consolidated and included in the Confectionery and Beverage segment from the first quarter of fiscal 2017.
*3	“Domestic Others” includes NISSIN FOODS HOLDINGS and NISSIN ASSET MANAGEMENT, etc.
*4 Brazil has been consolidated and included in the Americas segment from the third quarter of fiscal 2016.
*5 Indonesia has been consolidated and included in the Asia segment from the first quarter of fiscal 2017.
*6 These are included in “Reconciliations” in Summary of Consolidated Financial Statements.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

19

BACK TO CONTENTSDOMESTIC BUSINESSHIGHLIGHTSPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

Note: Relative product sizes are not to scale.

NISSIN FOOD PRODUCTSNISSIN FOOD PRODUCTS invented
Chicken Ramen, the world’s first instantnoodles, and CUP NOODLE, the world’s
first cup-type instant noodles. As theNISSIN FOODS Group’s core operatingcompany, it is steadily contributing toGroup sales and profits until the overseas
business gains momentum. In fiscal 2016,
sales of long-selling brands such as CUPNOODLE were robust, and net sales
reached a record ¥223.6 billion, up 3.6%
from the previous year. Operating income
rose 1.4% to ¥24.0 billion. Due to higher
raw materials prices and higher expenses,
in part due to new enterprise resource
planning (ERP) software, we revised prices
and profit increased as sales stayed strong.

MYOJO FOODSMYOJO FOODS is actively advertising tobuild brand value and is developing andcultivating a reduced-carbohydrate noodle
series as a new-concept product. To securesustained growth, the company reorganized
the Saitama No. 2 Plant, improving productivity and increasing safety and security. In
fiscal 2016, sales of mainstay brands
increased significantly, and net sales
increased 6.2% year on year to ¥41.7 billion. Operating income decreased 3.6% to¥1.4 billion, reflecting factors including
higher advertising expenses, despite thecontribution from the sales increase,improvement in the cost of sales ratio, andproduction efficiency improvement resulting
from the building of a new plant.

NISSIN CHILLED FOODSNISSIN FROZEN FOODS
Amid demand contraction in Japan’s chilled
noodle market, NISSIN CHILLED FOODS
sales rose year on year as a result of focusing on high unit price chilled noodles aimed
at growing numbers of consumers whoseek genuine products.
To increase sales in the domestic frozen
noodles market, where affordable products
are prevalent, NISSIN FROZEN FOODS
strengthened mid-price frozen spaghetti
offerings and a specialty, frozen ramen,
concentrating on the convenience store
sales channel, which is currently bolsteringfrozen food offerings. As a result, sales inthis segment rose 5.6% year on year to¥59.8 billion, and operating income
increased ¥0.9 billion to ¥0.7 billion.

NISSIN CISCO
NISSIN YORKIn the confectionery business, NISSINCISCO has seen a rapid increase in salesof granola during the past few years at atime of substantial growth in total demand.
To cope with the sales increase, in July
2015 the company augmented its granola
production lines.
In the beverage business, NISSIN YORK
met the needs of health-conscious consumers with its lactobacillus drinks and increased
sales of yogurt drinks by expanding the flavor
selection and increasing store coverage.
As a result, net sales increased 12.5%
year on year to ¥38.6 billion, while operating
income declined 1.3% to ¥1.3 billion.
Bonchi Co., Ltd. will become a consolidated subsidiary in fiscal 2017.
NISSIN FOODS HOLDINGS ANNUAL REPORT 201620

BACK TO CONTENTSOVERSEAS BUSINESSHIGHLIGHTSPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

Note: Relative product sizes are not to scale.

THE AMERICASIn the U.S., we introduced high value-added
products to activate the market and worked
to secure sales and profits from existing
brands. In Mexico, sales increased year on
year as sales volume recovered following adecline in fiscal 2015 due to the impact ofhigher retail prices as a result of tax systemrevision (introduction of the Special Tax on
Production and Services).
Thanks in part to a substantial contribution from the consolidation of NISSINFOODS DO BRASIL LTDA* in the third quarter of fiscal 2016, net sales in the Americas
segment increased 35.1% year on year to¥48.3 billion, and operating income rose
60.1% to ¥1.1 billion.
* Former name: NISSIN-AJINOMOTO ALIMENTOS LTDA.

CHINA
In China, as major instant noodle manufacturers experienced declining sales in themainland market, we grew sales by targeting students and white-collar workers while
expanding our sales area, mainly along thecoast, and promoting sales of the new CUPNOODLES BIG. We also revised prices inSouth China in October 2015 and worked
to ensure penetration of the revised prices.
We maintained the sales level in the Hong
Kong area, despite economic stagnation in
Hong Kong caused by a decline in thenumber of mainland tourists.
As a result, net sales in the China segment increased 18.5% to ¥40.9 billion, partly
due to the impact of exchange rates. Operating income rose 26.4% to ¥4.1 billion.

ASIAIn Asia, operations in Singapore, Thailand,
India and Vietnam are consolidated in thefinancial statements. In response to a product recall by the leading instant noodles
manufacturer in India, we conducted a voluntary recall of Top Ramen for consumer
assurance, rather than for safety. Consequently, overall net sales decreased 8.0%
to ¥7.2 billion, and operating loss was ¥2.0
billion. Nevertheless, since sales in India areshowing signs of rapid recovery and Asia isa region where future growth can be
expected, we consider our current activities
in the region a form of upfront investment
and aim to achieve profitability in the future.
The operation in Indonesia will become aconsolidated subsidiary in fiscal 2017.

EMEA
In the EMEA region, we are engaging in
activities with a view to expand into newmarkets, mainly in the European region,
where we are building a stable earnings
base. In Turkey, which is included in thisregion, we are experiencing rough going
despite developing the MakarNeks instantpasta line with the introduction of cup-type
noodles in addition to bag-type noodles,
and by advertising. In Europe, we aremaking marketing investments in Soba
yakisoba noodles and CUP NOODLES toincrease brand value. As a result, net sales
in the EMEA segment decreased 2.1% year
on year to ¥4.6 billion, and operating loss
was ¥0.4 billion.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

21

BACK TO CONTENTS

BOARD OFDIRECTORSPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATIONNISSIN FOODS HOLDINGS ANNUAL REPORT 201622

BACK TO CONTENTS

BOARD OFDIRECTORSPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS

As of June 28, 2016

FOCUS

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

Koki Ando

Noritaka Ando

Yukio Yokoyama

President & Representative Director

Executive Vice President &Representative Director

Director

CEO (Chief Executive Officer)

COO (Chief Operating Officer)
President & Representative
Director, NISSIN FOOD
PRODUCTS CO., LTD.

CFO (Chief Financial Officer)*1	Indicates an outside director as provided
for in Article 2-15 of the Companies Act.
*2	Designated for independent director as
specified by the Tokyo Stock Exchange
and other exchanges in Japan.

Ken Kobayashi *1

Masahiro Okafuji *1

Yoko Ishikura *1 *2

Isao Karube *1 *2

Masato Mizuno *1 *2

Outside Director

Outside Director

Outside Director

Outside Director

Outside Director

Chairman of the Board,
Mitsubishi Corporation

President & Chief Executive
Officer,
ITOCHU Corporation

Professor Emeritus,
Hitotsubashi University

President, Tokyo University ofTechnology

Chairman, Mizuno Corporation

STRENGTHENING
OF THEGOVERNANCESTRUCTURE

In June 2016, NISSIN FOODS HOLDINGS put in place a governance structure in which outside directors
comprise the majority of the Board of Directors for the purpose of clearly segregating management oversightand execution, strengthening the oversight function of the Board of Directors. We also reduced the numberof directors from thirteen to eight. Furthermore, in November 2015, we established the Management Advisory
Committee, an advisory body to the Board of Directors comprising a majority of independent officers, to ensure
propriety in the nomination and remuneration of directors, and other matters.

NISSIN FOODS HOLDINGS ANNUAL REPORT 201623

BACK TO CONTENTS

AUDIT & SUPERVISORY BOARD MEMBERS,EXECUTIVE OFFICERS AND CHIEF OFFICERSPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS

As of April 11, 2017

FOCUS

PERFORMANCE BY
BUSINESS SEGMENT

Audit & Supervisory Members

SUSTAINABLE
MANAGEMENT*3	Indicates an outside corporate auditor as provided for in Article 2-16 of the Companies Act.
*4	Designated for independent director as specified by the Tokyo Stock Exchange
and other exchanges in Japan.

FINANCIALSECTION
INFORMATION

Hideki Hattori

Kazuo Kanamori *3 *4

Chisugi Mukai *3 *4

Audit & Supervisory
Board Member (Full-time)

Audit & Supervisory
Board Member (Outside / Full-time)

Audit & Supervisory
Board Member (Outside / Independent)

Senior Executive Officer

Executive Officers

Akihide Matsuo

Toshihiko Ijichi

Hitoshi Suzuki

Toshio Nakai

President & Representative Director,
MYOJO FOODS CO., LTD.

President & Representative Director,
NISSIN CHILLED FOODS CO., LTD.

General Manager,
Advertising Division

CRO (Chief Resourcing Officer)

Narihiko Uemura

Fusako Znaiden

CCO (Chief Communication Officer)

CMO (Chief Marketing Officer)

Deputy Head of
NISSIN Global Innovation Center

Tetsuro Ohba

Kazuhiro Tadokoro

Masahiro Homma

Deputy Head of
NISSIN Global Food Safety InstituteCHO (Chief Human Resources Officer)

CLO (Chief Legal Officer)

Yuji Tabeta

Kenji Maeda

CIO (Chief Information Officer)

President & Representative Director,
NISSIN FROZEN FOODS CO., LTD.

President & Representative Director,
NISSIN YORK CO., LTD.

Akira Sato

Akihiro Toyotome

Yasuhiro Yamada

President & Representative Director,
KOIKE-YA Inc.

President & Representative Director,
NISSIN CISCO CO., LTD.

CPO (Chief Production Officer),
In charge of SCM

Managing Executive Officers

Tsunao Kijima
In charge of U.S.A. and Premier Foods

Mitsuru Tanaka
CDO (Chief Development Officer)
Head of NISSIN Global Innovation Center
Head of NISSIN Global Food Safety InstituteYoshinori Miura
CBO (Chief Business Officer)
Chairperson & Representative Director,
NISSIN FOOD PRODUCTS CO., LTD.

Shigeo Kitara

Toshimichi Fujinawa

Other
Managing Officer (Non-executive)

Kiyotaka Ando

Katsuhiko Kiyofuji
CAO (Chief Administrative Officer)

The latest information about management
personnel is available on our website:

https://www.nissin.com/en_jp/about/executives/

NISSIN FOODS HOLDINGS ANNUAL REPORT 201624

BACK TO CONTENTSCORPORATEGOVERNANCE

PROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

The NISSIN FOODS Group engages in business so as to provide safe,
worry-free food products and maximize benefits to all stakeholders—
including shareholders, consumers, employees, business partners,
and local communities and residents. The Group regards theenhancement and strengthening of corporate governance as one ofits most important management priorities and strives to practicehighly objective and transparent management.

Corporate Governance Structure

Corporate Governance Structure

General Meeting of Shareholders
Selection andDismissal
Consultation/
Recommendation

Management Advisory
Committee

Internal Control System

Management Committee

Selection andDismissal

Audit and Audit Report

Board of Directors (Directors)
Consultation/
Recommendation

Pre-discussion

Report/Direction

Representative Directors
Selection/
ReportInternal
Auditing
OfficeReport/Direction

Personnel
Committee

Business Ethics Committee
Environmental Committee
Information Security Committee

Business Divisions (Includes associates in Japan and overseas)

Direction

Audit

Audit
ReportLiaison

Report/Direction

Risk Management Committee

Investment
and Loan
Strategy
Committee

Audit & Supervisory Board(Audit & Supervisory Members)

LiaisonNISSIN FOODS HOLDINGS has long
appointed multiple outside directors andoutside Audit & Supervisory Board members, and actively involved the opinionsof outside experts in management, torealize management vitalization andtransparency. Since June 1998, we have
employed an executive officer system topromote rapid decision-making andclearly separate management oversightfrom business execution.
In addition, as a company with an
Audit & Supervisory Board governancestructure, we have strengthened thesystem in which our three appointed
Audit & Supervisory Board members
monitor the execution of duties by directors. We strive to further enhance corporate governance by assigning several
full-time staff members to assist withauditing duties, by enhancing the Internal Auditing Office to collaborate with
the Audit & Supervisory Board andincrease audit efficiency, and bystrengthening internal control systems.

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

Independent Auditors
Liaison
Audit

Advice and Guidance

Lawyers,
Tax Accountants andOther Professionals

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

25

BACK TO CONTENTSCORPORATEGOVERNANCE

PROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

Holding of Board of
Directors Meetings
NISSIN FOODS HOLDINGS holds regular meetings of the Board of Directors
ten times a year and extraordinary meetings as necessary, all of which areattended by directors and Audit &Supervisory Board members. At Boardof Directors meetings, important matters
are discussed and decided in accordance with laws and regulations, theArticles of Incorporation, and the Boardof Directors Regulations.
To improve management efficiency,
the Management Committee, consistingof the inside directors, senior managing
executive officers, managing executive
officers, the managing officer and fulltime Audit & Supervisory Board members, meets twice a month to deliberate
beforehand any matters to be resolvedby the Board of Directors.

Self-Assessment of theBoard of Directors
Based on the individual assessments
and opinions of the directors and Audit &Supervisory Board members on matterssuch as the present state and operationof the Board of Directors, NISSINFOODS HOLDINGS has determined that
effectiveness of the Board of Directors
as a whole has been adequately
ensured. We came to this assessment
following a review of analyzed findings

by the Management Advisory Committee
and deliberation by the Board of Directors, and we will continuously assess theeffectiveness of the Board while making
improvements in the assessment framework and assessment method and striving to further increase effectiveness.

State of Development ofInternal Control Systems
NISSIN FOODS HOLDINGS considers
the development, construction andappropriate operation of internal control
systems to be one of its most importantmanagement priorities, and we are
implementing groupwide internal control systems initiatives. To ensure theeffectiveness of internal controls, theAudit & Supervisory Board members
audit internal control systems related tooverall business management, and the
Audit & Supervisory Board members
and Internal Audit Office conduct operational audits of the business divisions,
auditing and verifying the effectivenessof controls and providing improvement
suggestions, guidance, and instructions
as necessary.

Criteria for the Selection of
Candidates for Director
NISSIN FOODS HOLDINGS selects ascandidates for director persons who
have a wealth of experience, keen
insights, and a high level of professional
expertise for the Group’s business development in Japan and overseas. We take
into consideration the balance of knowledge, experience, and abilities of theBoard of Directors as a whole, the diversity in expertise and gender, and what is
the most appropriate number of directors for the Board.
We select candidates for insidedirector positions from among the president and CEO, executive vice president
and COO, and officers in charge ofGroup management: executive officers,
chief officers, operating company presidents, and chief representatives.
We select as candidates for outside
director persons satisfying the criteria in
the Companies Act who are corporate
executives, academics, or other persons
with keen insights and a high level ofprofessional expertise in Japanese orinternational economics, finance, andindustry, corporate strategy, marketing,advanced research, or other fields; whoare capable of checking the legality ofmanagement and the appropriateness ofdecision-making in business execution

by the Board of Directors; and who arecapable of providing advice at Board of
Directors Meetings and other occasions
that contributes to business activities
that enhance corporate value.
Candidates are determined by the
Board of Directors following deliberationand verification of their appropriatenessby the Management Advisory Committee, an advisory body to the Board of
Directors comprising a majority of independent officers.

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INFORMATION

Remuneration for
Directors and Audit &Supervisory Board Members
Remuneration for directors consists ofbasic remuneration paid according toposition and role importance within the
total amount resolved at the general
meeting of shareholders and compensation-type stock options for the purposeof increasing motivation and incentive tocontribute to sustained improvement ofbusiness performance and enhancementof corporate value over the medium tolong term. However, in view of the natureof their duties, remuneration for outside
directors is not linked to business performance and consists only of basic remuneration paid according to position.
Remuneration is determined by the
Board of Directors following deliberationand verification of its appropriateness by
the Management Advisory Committee.

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26

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PROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

The remuneration for Audit & Supervisory Board members is determinedthrough discussion by the Audit &Supervisory Board. In view of the natureof auditing work, remuneration for Audit& Supervisory Board members is not
linked to business performance and consists only of basic remuneration paid
according to position.

The Functions and Roles of
Outside Directors andOutside Audit &Supervisory Board Members in
Corporate Governance
The outside directors ask appropriatequestions and express opinions during
discussions of agenda items at meetingsof the Board of Directors and vitalize
Board meetings by expressing theirviews concerning the domestic andoverseas economic, financial, and industrial situation and perform a management oversight role. The outside Audit &Supervisory Board members regularly
attend Board of Directors meetings andmonitor the directors’ status of execution of duties by expressing opinionsfrom a fair and objective viewpoint.

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
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VIEWPOINT FROM AN
INDEPENDENTOUTSIDE DIRECTOR
Outside Director

I assumed the office of outside directorof NISSIN FOODS HOLDINGS in June
2015. Heralded in Japan as “year oneof corporate governance,” 2015 was ayear in which Japanese corporations
were expected, more than ever, tostrengthen their governance. However,continuing scandals at Japanesecompanies and other issues haveclearly shown that companies have notreached the point of winningstakeholder confidence in theeffectiveness of corporate governance.
In these circumstances, inNovember 2015, NISSIN FOODSHOLDINGS established theManagement Advisory Committee, anadvisory body to the Board of Directors
comprising a majority of independent
officers, as well as the Liaison
Conference of Independent Outside

INFORMATION

Isao Karube

Directors and Audit & Supervisory
Board Members, in order to further
strengthen information sharing withindependent outside directors. In June
2016, the number of directors overall
was decreased from thirteen to eight,
while the number of independent
outside directors was increased fromtwo to three. This resulted in an
increase of all outside directors fromfour to five, so that they make up the
majority. This attitude shows how
committed NISSIN FOODS HOLDINGS
is to further reflecting the views ofoutside directors in management andpracticing highly objective andtransparent management. In my role as
an outside director, I am called on tooffer advice that draws on my
management experience gained as auniversity president, knowledge ofadvanced research, and extensive
international experience. I constantly
and actively convey my views andadvice to executive management.
In May 2016, NISSIN FOODSHOLDINGS established a new mediumterm business plan. As the Group
accelerates its overseas businessdevelopment, they are likely to be
increasingly required to make importantmanagement decisions. In addition, forthem to reach their goal of achieving
recognition as a global company, it will
likely require even further transparency
and effectiveness. From a third-party
perspective, I will monitor the propriety
of management strategies and whether
those strategies are being appropriately
executed, and strive to contribute tomedium- and long-term increases incorporate value.

NISSIN FOODS HOLDINGS ANNUAL REPORT 201627

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FOCUS

NISSIN FOODS HOLDINGS has instituted the
Risk Management Committee, chaired by the
Executive Vice President & Representative
Director/COO, as an organization over theBusiness Ethics Committee, Environmental
Committee, and Information Security Committee.
The Risk Management Committee prevents,
discovers, manages, and responds to various
risks pertaining to NISSIN FOODS HOLDINGS
and its subsidiaries.
Risks that have the potential to significantly
influence the decisions of investors arepresented here. Forward-looking statements
provided herein represent management’s
judgment as of March 31, 2016. The Group
recognizes that risk events may occur andundertakes to prevent the occurrence of risk
events and to respond if a risk event occurs.

Risk Factors(1)	Food Safety Issues
The Company’s basic philosophy is toprovide safe foods that consumers canenjoy without worry. In the past, a highincidence of disquieting developments,
such as avian influenza, residual pesticides in foods, falsely labeled food products, radioactive contamination of foods,
and toxic substances mixed in foodproducts, threatened to undermine foodquality and safety. The needs of consumers with regard to food safety havebecome more sophisticated. To enhance
its ability to meet these needs, the Company established the Food Safety Research Institute in 1988 (and established“the WAVE” in 2014) and continues its
endeavor to enhance its research function and strengthen its quality control
system. However, the Company’s financial position and financial performance
could be unfavorably influenced were
unusual health-related situations to arisein the future that were beyond the Company’s conjecture, or if rumors were to
mar the image of the Company’s products, even though such rumors werebased on incidents not directly affecting
the Company’s products.

(2)	Risk Derived from Changes in
Demographic Trends
In Japan, the birth rate remains low, andthe population is aging rapidly. Accordingly, the number of young consumers,
who are the major customers of theCompany, has been decreasing, andtherefore the market of our products is
expected to remain unchanged or otherwise decrease over the long term. In theface of such a business climate, theCompany is making ever-greater efforts
to develop new products that closely
meet the needs of each age bracket inorder to maintain and expand our customer base. However, were the decreasein population to accelerate, the overall
demand in the instant noodle market
would shrink, negatively affecting theCompany’s financial position and financial performance.

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATIONNISSIN FOODS HOLDINGS ANNUAL REPORT 201628

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GRAPHSTO ALLSTAKEHOLDERS
FOCUS(3)	Risk of Decline in
Brand Value
The Company’s mainstay products, particularly Chicken Ramen and the CUPNOODLES series, have become familiar
household items for most consumers,
thanks to years of accumulated technical expertise and product development
activities. The Company emphasizes
the establishment and enhancement of
its brands. However, new products
flood the instant noodle market every
year, and the relative brand value of theCompany’s products could decline if
another company were to achieve a revolutionary breakthrough in instantnoodle development.

(4) Risk of Product Liability
As a food manufacturer, the Company
believes its mission is to provide safe,
worry-free products to consumers, andtherefore applies strict quality control
standards to its manufacturing activities. In addition, the Food Safety Research Institute studies ways to ensure
the safety of raw materials and strives
to reinforce quality control systems ateach manufacturing facility. The Company also endeavors to lessen the potential of product liability claims that
could affect its financial position, andtherefore is insured against product liability. However, if an accident occurs
through product liability and a situationarises wherein the Company must recall
certain products, the insurance carriedby the Company may not be sufficient
to cover all claims. A tarnished reputation in society and a weakened corporate image could erode consumers’
willingness to buy the Company’s products. This situation could hurt the Company’s financial position and financial
performance.

(5)	Risk of Increases inPrices of Raw Materials
The primary raw materials used for theCompany’s products are agriculturalcommodities such as flour and palm oil,and petroleum-based items for packaging and wrappers. The prices of these
raw materials fluctuate with changing
market conditions. Therefore, the Company’s financial performance could be
adversely impacted if the prices of raw
materials skyrocket, as there exist morefactors than ever to boost their prices,such as political unrest or international
disputes occurring in the countries that
produce these raw materials, and crop
failures caused by abnormal weather
associated with global warming.

(6) Risk of Natural Disasters
The Company has manufacturing facilities both in Japan and overseas. If a natural disaster, such as a large-scale
earthquake or flooding from a typhoon,
were to occur and manufacturing facilities incurred damage, the Company’s
production infrastructure as well as its financial position and financial performance could suffer because, forexample, an interruption in operations
would reduce output and repairs to facilities and equipment would raise expenses. Furthermore, serious accidents
at electric power plants caused by natural disasters could also negatively affect
the Company’s production infrastructure,
financial position and financial performance, through lowered electricity
supply, large-scale blackouts, and radioactive contamination.

(7)	Risk Related toOverseas Operations
The Company produces food products,
including instant noodles, based on thebasic policy of local production and local
marketing. If political unrest or international disputes arise in the regions where
the Company’s subsidiaries and associates operate, or if issues threaten to undermine food safety, or if legal controls

in certain countries create a situationthat hinders production activities, thenthe financial position and financial performance of the subsidiaries, affiliates
and/or the Company could suffer.

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
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INFORMATION(8)	Risk Related toInformation Systems
The Company uses computers to process and store information on production, sales and administration. The
Company had adopted all conceivablemeasures to safeguard these information systems from computer virus-induced crashes, damage by hackers,
and the risk of a breach in information
security. However, the Company’s financial position and financial performance
could be adversely affected if the Company’s systems were damaged and/or if
data were leaked outside the organization, due to illegal access to the systems by unauthorized individuals
through technologies that the Company
has not envisioned, or an unknown
computer virus getting through established safeguards.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

29

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GRAPHSTO ALLSTAKEHOLDERS
FOCUS(9)	Risk Related to Retirement
Benefit Accounting
Costs and obligations pertaining to retirement benefits are determined basedon discount rates and other predetermined criteria used in actuarial calculations and on the expected rate of returnon pension assets. If actual results differ
from predetermined criteria, or if predetermined criteria are amended, the actuarial difference is charged to the incomeof the fiscal year following the one inwhich the difference occurred. If a decline in discount rates and/or returns on
the pension assets persists, the Company will have to carry a higher burdenof pension-related costs, and this could
hurt the Company’s financial position
and financial performance.

(10)	Risk of Declining
Market Values on
Marketable Securities
The Company invests in marketable securities to ensure efficient application offunds, while it is the policy of the Company to maintain the integrity of principal. However, the Company’s financial
position and financial performance
could be adversely affected if worsening market conditions cause market
values to decline or sluggish performances by equity investments force theCompany to apply the accounting for
impairment.

(11)	Risk Related to
the Accounting for
Impairment of Fixed Assets
The Company owns various tangible
fixed assets for the purpose of its business. These fixed assets could face inthe future a substantial decline in theirfair value and/or future cash flows they
are to generate, and thus would havethe possibility of impairment loss recognition in conformity with the accounting
for impairment of fixed assets. Such circumstances could negatively affect theCompany’s financial position and financial performance.

(12)	Reliance on Certain
Business Clients
The Company substantially relies on
specific business parties for sales of
products and procurement of certain
raw materials. Reliance on specific trading companies for sales of products
aims at reducing the effort expended on
credit control and minimizing credit risk
through concentration of transactions
among highly creditworthy companies.
Reliance on specific vendors for procurement of certain raw materials also
aims at efficient and stable procurement. However, if the business activitiesof these sales agents were to fail andthe Company had difficulty collecting
accounts receivable, or if the supply of
raw materials were suspended and theCompany’s production had to behalted, the Company’s own financial
position and financial performance
could be negatively affected.

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION(13)	Exchange Rate Fluctuations
The Company expands its businesses
in various overseas regions. The local financial statements in each region aretranslated to Japanese yen for the purpose of preparing consolidated financial
statements. Hence, exchange rate fluctuations may have an effect on theGroup’s consolidated results and financial position, even if there is no change
in the value in local currencies.

NISSIN FOODS HOLDINGS ANNUAL REPORT 201630

BACK TO CONTENTSQUALITY
ASSURANCEPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

For a food products
company, product safety
is the foundation forbusiness growth.
To provide customers
with products they canenjoy with confidence
and peace of mind and,as a result, ensure thesustained growth of theGroup, the NISSIN Global
Food Safety Instituteplays a central role inestablishing independent
analysis and inspection
systems and a quality
assurance system.
This rock-solid quality
assurance system will
support the future global
growth of the Group.

PERFORMANCE BY
BUSINESS SEGMENT

Quality Control System

SUSTAINABLE
MANAGEMENTFINANCIALSECTION

Japan / China
Fishing grounds

Farms

Breeders

Feed plants

Inspection of the surrounding
environment, analysis of veterinary
pharmaceuticals

Inspection of the surrounding
environment, analysis of residual
agricultural chemicals

Inspection of the surrounding
environment, inspection of livestock
upkeep and fattening, analysis ofveterinary pharmaceuticals

Confirmation of feed materials
and feed manufacturing
processes, analysis of residual
agricultural chemicals

Raw materials
processing plants (Japan)

Raw materials
processing plants (China)

Inspection for residual agricultural chemicals,
veterinary pharmaceuticals, andmicroorganisms in raw materials,
confirmation of manufacturing processes

Inspection for residual agricultural chemicals,
veterinary pharmaceuticals, andmicroorganisms in raw materials,
confirmation of manufacturing processes

NISSIN Global Food Safety InstituteResourcing Division
Confirmation of raw materials andprocessing plant quality control status
and improvement guidance

INFORMATIONFOOD SAFETY EVALUATION &RESEARCH INSTITUTE CO., LTD. (Shanghai)Group production plants
Confirmation and correction of plantquality and inspection capabilities
Quality assurance: Centralized control,
dual management, internal and external
accuracy control, harmful substanceanalysis
Quality surveys: Quality audit checks ofmaterials, packaging materials andnoodle plants, NISSIN’s Inspection
Standards for Food Safety (NISFOS)
inspections, inspections of overseasmaterials plants (except in China)
R&D: Development of new analysis
methods, improvement of existing
analysis methods

Customers
Customer consultation offices
Customer Communication Center (CCC)

Quality assurance: Harmful substanceanalysis, centralized control, internal andexternal accuracy control
Quality surveys: 4M (Method, Material,
Man, Machine) control, NISFOS inspections (noodle plants)

Centralized management of customer feedback,early detection of latent risks, product andservice improvement proposals
Group operating companies
Management and R&D, marketing,production, and resourcing units

NISSIN FOODS HOLDINGS ANNUAL REPORT 201631

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ASSURANCEPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

NISSIN Global Food
Safety Institute
The NISSIN Global Food Safety Institute is responsible for quality assurance, from raw materials to finishedproducts, throughout the Group. The
institute analyzes harmful substancesthat may be contained in food (such as
residual agricultural chemicals, veterinary pharmaceuticals, carcinogens,food allergens, mycotoxins, heavy
metals, and radioactive substances)and ensures quality through quality surveys at every stage from raw materials
production and processing to final production and periodic inspections of finished products. Furthermore, the institute develops analysis methods for new
harmful substances and updates existing analysis methods and equipment aswell to shorten analysis periods andimprove accuracy. It has also set up the
Food Identification Group whose sole
responsibility is scientific testing of foreign matter and strange taste andodors reported by customers. Throughthese rigorous quality control systems,
the institute has put in place a mechanism to provide safe products to ourcustomers.
The Group has instituted a dual
quality management system in Japanconsisting of quality control of products
at each production plant and inspectionof those products at the NISSIN Global
Food Safety Institute. The institute also

inspects room-temperature products
produced overseas.
In August 2015, the Kyurito Building
opened at the NISSIN Global Food
Safety Institute. Progress in scienceand technology can lead to the discovery of new harmful substances in foodproducts. This requires a rapid
response capability, and the Kyurito
Building is a research facility whose
mission is to be first to detect scientificrisks pertaining to new food products
and contribute to customers’ peace ofmind by preparing for future eventualities. Completion of the Kyurito Building
has enabled the Group to engage inleading-edge research activities concerning food safety.

Quality Assurancein Procurement
The NISSIN FOODS HOLDINGS’
Resourcing Division conducts quality
surveys extending to raw material suppliers and manufacturing processes atcontract manufacturers, confirming thestatus of quality control and providing
guidance for improvement.
In 2015, a unit that specializes inquality control was set up within the
Resourcing Division to further strengthen
the quality control system for procured
items. The unit conducts supplierinspections using its own checklist,
offers guidance, and also regularly conducts workshops within the division. In

April 2015, the Resourcing Division
began implementation of an independently prepared Raw Materials Manufacturing Plant Checklist covering a
total of 32 items related to laws and ordinances, facilities, raw materials andwater, manufacturing processes, productinspection, hygiene management, andother quality-related matters. In March
2015, a Global Purchase Meeting
attended by procurement personnel ofoverseas operating companies was held
for the purpose of sharing the checklist
contents.

dietary fiber and nutrients. In March
2015, the Health Science Research Division was established within the NISSIN
Global Innovation Center to analyze thefunctions of food from the perspectivesof nutrition, palate, and biological regulation functions and to conduct leading-edge research that leads to the creation of delicious, original products.

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INFORMATION

Universal Design Initiatives
There are individual differences in humancolor perception, and text may be difficult to read due to text color, color combinations, or contrast. To enable customers to enjoy our products with peace ofmind regardless of age, physique, or
physical ability, the Group has adopted
the Universal Design concept to ensurethat ingredient lists, preparation methods, and other information on labels iseasy to read.

Products That Meet the Needs ofHealth-Conscious Customers
The Group is developing products thatmeet the needs of health-conscious customers, such as products with reduced
calories, reduced salt, and low carbohydrates and products containing healthy
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HUMANRESOURCESPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

PERFORMANCE BY
BUSINESS SEGMENT

The Group, which aspires to make the leap to a global company, isstrengthening and developing human resources as it accelerates overseas
business expansion. To create products that people enjoy while fulfilling our
responsibility as a company involved with food, we will provide support for
improvement of employee skills and abilities.

Developing Global Talent
The Group has made developing andstrengthening its global management
talent one of the key strategies in the
new medium-term business plan,
aimed at achieving recognition as a
global company. We will increase thenumber of management personnel andaccelerate global management througha two-fold approach involving humanresource development within the Groupand external recruiting.

Human Resource
Development Measures
The Group pursues a multi-faceted
approach, and we have instituted the following three selective training programs
specifically for the purpose of developing employees capable of succeeding in
the global business field.

Global Challenge Pass Program	This program supports the success in
the global business field of young
employees, actively assisting employees who meet certain criteria and wish
to challenge themselves in the global
business field by conferring to thempriority in internal selection of overseas
trainees.
Overseas Trainee Program	This program accelerates the acquisition of practical experience by dispatching young employees to overseas
business sites for a one-year period topromote their growth as global management personnel. In fiscal 2016, ten
young employees, internally selected,
were dispatched to fill posts (in the
U.S., Brazil, Mexico, Indonesia, India,
Shanghai, Hong Kong, and Zhuhai).

Global SAMURAI Academy	This is an in-house university thattrains the personnel who will constitute the core of the Group’s management, from young employees to managers. The program contains
management skills, logical thinking,foreign languages, cross-cultural
understanding, liberal arts, and othersubjects. In fiscal 2016, specialized
training to develop female leaders wasadded to the program.

SUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

Fair Employment Practices that
Respect Human Rights
When hiring people, the Group respects
fundamental human rights and follows
fair hiring practices in accordance with amanual that ensures that applicants areplaced at no advantage or disadvantage
because of nationality, gender, ethnicity,
marital status, or other criteria. We have
prepared interview questions to ensurethat matters relating to protected humanrights are avoided in interviews. We also
rigorously follow fair employment practices to ensure that discrimination does
not occur in subsequent promotion oradvancement.

New employee orientation

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HUMANRESOURCESPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

Promoting the Success of WomenNISSIN FOODS HOLDINGS promotes
the success of female employees and isincreasing recruitment of women. We
participate in the Keidanren’s (Japan
Business Federation) Voluntary Action
Plan on Promotion of Women to Managerial and Board Positions and aim toincrease the ratio of female managers to
15% by 2025.
We established the Diversity Committee in fiscal 2016 as one of the initiatives linked to furthering female employees in the workplace, and are creating anenvironment to make workplaces inwhich women can thrive.

Active Hiring of
Foreign Nationals
Two non-Japanese were appointed as
the presidents of INDO NISSIN FOODSPRIVATE LTD. in January 2014 andNISSIN FOODS (U.S.A.) CO., INC. in
April 2015. We actively recruit foreign-national university graduates andseek to hire talented people regardlessof nationality. We hired 31 foreign nationals in fiscal 2016.

Health Promotion andWorkplace Safety Initiatives
The Group emphasizes employee healthmanagement and promotion and implements a variety of initiatives to foster
mental and physical well-being. We
strive to prevent disease and promote
employee health by engaging in meticulous health management activities. In
conformance with the Industrial Safety
and Health Act, we endeavor to ensure
workplace safety and health and maintain an employee-friendly work environment. The Group convenes monthly
meetings of the Health and Safety Committee and is working to create a pleasant and comfortable environment for
employees.

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTOPENING OF KABUTERIA*,
AN EMPLOYEE CAFETERIA LINKED
TO THE SHARE PRICE
KABUTERIA opened at theNISSIN FOODS HOLDINGS Head
Office in March 2016 as a newstyle of employee cafeteria thatcombines a “creative garage”
interior design (inspired by theshed in which Momofuku Andocreated instant noodles) with ashare price-linked event concept
in which aspects of the cafeteria’s menu change according to
the rise or fall of the NISSINFOODS HOLDINGS stock. The

FINANCIALSECTION
INFORMATION

purpose of KABUTERIA is to promote the generation of new ideas
through creative thinking by individual employees and promoteactions that reflect awareness ofcorporate value enhancement
and the share price. The photosof corporate officers in Annual
Report 2016 were all taken at
KABUTERIA.
*	The name KABUTERIA is derived fromkabu (Japanese for stock) + cafeteria.

NISSIN FOODS HOLDINGS ANNUAL REPORT 201634

BACK TO CONTENTSENVIRONMENTAL /SOCIAL ACTIVITIESPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

The Group will continue to diligently pursue appropriate
activities for ensuring harmonious coexistence withsociety and fulfilling our corporate social responsibility,
giving due consideration to the future sustainability of
the global environment and social systems.
Establishment of Medium-Term
Environmental Targets
In 2008, the Group established theGroup Environmental Charter, which sets
forth fundamental principles and action
guidelines for green management. We
are working to reduce environmental
impacts at every stage of all businessactivities to preserve a sustainableglobal environment. In fiscal 2016, weestablished medium-term environmental
targets to be achieved by fiscal 2021. By
updating these medium-term environ-mental targets every five years, we willcontinuously review our environmental
strategy and engage in wide-ranging
environmental initiatives, including measures to curb global warming.

Establishment ofEnvironmental Management
The Group has set up the Environmental
Committee for the purpose of promoting environmental conservation. The
committee, chaired by a representative
director of NISSIN FOODS HOLDINGS,

is developing an environmental management system for the Group by establishing a Group environmental policy
and discussing environmental targets
and important matters concerning environmental activities. Working groups
made up of divisional representatives incharge of environmental activities also
hold meetings as necessary. In addition,
the Environmental Promotion Division
plays a central role in holding the NISSINFOODS Group Environmental Activities
Promotion Conference attended byenvironmental managers of Group companies for the purpose of sharing information on matters such as the status of
implementation of environmental activities at Group plants. We also promote
the adoption of the ISO 14001 Environmental Management System and carryout environmental conservation activities
that fit the specific nature of each of ourplaces of business.

Greenhouse Gas Reduction andEnergy Conservation Initiatives
Since fiscal 2007 the Group has been
converting the boiler fuel used at plantsfrom heavy oil to natural gas. We are also
striving to reduce environmental impacts
in production by reducing energy loss in
production processes.

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

Resource Conservation andReduction of Water Use
Each Group plant works to reduce water
use in manufacturing and endeavors toreuse water by means such as cleaning
facilities with water used in cooling manufacturing processes. We have implemented initiatives to achieve zero emissions
since fiscal 2002 and strive to promote
recycling and reduce waste.

Medium-Term Environmental Targets
ENERGY CONSERVATIONAND GLOBAL WARMINGMITIGATION MEASURESGreenhouse gas (CO2) emissions
from business activities

30

RESOURCE CONSERVATION
AND RESOURCERECYCLING MEASURES
Recycling rate

ISO 14001 certification
rate at Group plants

Maintain at%

reduction*1

99.5

STRENGTHENING OF
THE ENVIRONMENTAL MANAGEMENT SYSTEM%

or higher

Upgrading of environmental
resource manager
qualifications (Eco Test pass rate)

100 100
%*

2

%*

3

*1	Reduction target per unit of output at domestic
business sites subject to reporting(fiscal 2006 comparison)*2	Certification rate at plants subject to inspection(at the time of target setting)*3	Including alternative qualifications, such asenvironmental planner certification

More information on ourenvironmental and social activities
is available at our website:

http://nissin.com/en_ jp/csr/

NISSIN FOODS HOLDINGS ANNUAL REPORT 201635

BACK TO CONTENTSCONSOLIDATED SIX-YEAR SUMMARY
OF SELECTED FINANCIAL DATAPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

Years ended March 31,

For the YearNet sales

2014

2013

2012

2011

¥ 431,575¥ 417,621¥ 382,793¥ 380,675¥ 374,932

260,496

242,916

231,310211,347

213,707203,202

Gross profit

207,588

188,659

186,311

171,446

166,968

171,730

Selling, general and administrative expenses

181,188

164,358

158,606

147,492

140,756

137,192

Operating income

26,40024,301

27,70523,954

26,212

34,538Other income (expenses)

10,579

4,714

4,020

5,439

5,408

145

Income before income taxes and noncontrolling interests

36,97929,01531,72529,39331,62034,683

Income taxes

10,092

10,296

12,436

10,195

12,887

13,597

Comprehensive income

2

214

20

343

194

330

26,88518,505

19,26918,855

18,53920,756

19,60637,95637,41034,884

18,541

13,239Net income attributable to owners of the parent per share —primary¥ 245.52¥ 167.88¥ 174.83¥ 171.12¥ 167.97¥ 187.56—diluted244.22167.10174.13170.57167.59187.30Cash dividends

80.00

75.00

75.00

75.00

75.00

70.00

Equity*1

3,332.94

3,282.02

3,018.82

2,782.25

2,545.31

2,454.67

Working capital*2¥ 60,039¥ 98,481¥ 74,652¥ 48,865¥ 60,949¥ 56,472

Property, plant and equipment, net

168,886

147,249

147,620

133,788

126,360

125,882

Total assets

553,069

512,744479,470

446,132

414,717409,749

Long-term liabilities

50,49539,86437,00133,29637,19444,499Equity*3

371,689

369,853

342,301

315,027

286,657

277,595

R&D expenses¥

Capital expenditures
Value & Performance
Indicators

2015¥ 468,084

Net income attributable to owners of the parent

At Year-End

2016

Cost of sales

Net income attributable to noncontrolling interests

Per Share

PERFORMANCE BY
BUSINESS SEGMENT

Millions of yen (except per share information)

7,183

¥

6,431

¥

5,313

¥

4,321

¥

4,385

¥

22,96027,527

21,582

18,93730,810Operating margin (%)*4

5.6

5.6

6.6

6.3

6.9

9.2

Return on assets (%)*5

5.0

3.7

4.2

4.4

4.5

5.1

Return on equity (%)*

Inventory turnover (times)*7

7.4

5.3

6.0

6.4

6.7

7.7

10.4

11.0

11.5

11.5

13.4

14.1

*1 Equity per share = (Equity - Noncontrolling interests - Stock acquisition rights) / Number of shares outstanding as of the year-end (excluding treasury stock)*2 Working capital = Total current assets - Total current liabilities*3 Equity: In compliance with the Corporate Law, from fiscal 2007, the amount of equity includes the amount of noncontrolling interests.
*4 Operating margin = Operating income / Net sales

FINANCIALSECTION
INFORMATION

4,081

32,786

6

SUSTAINABLE
MANAGEMENT*5 Return on assets = Net income attributable to owners of the parent / Average total assets*6	Return on equity = Net Income attributable to owners of the parent / (Average total equity – Average noncontrolling interests –Average stock acquisition rights)*7 Inventory turnover = Cost of sales / Average total inventory

NISSIN FOODS HOLDINGS ANNUAL REPORT 201636

BACK TO CONTENTSCONSOLIDATED BALANCE SHEETPROLOGUENISSIN FOODS HOLDINGS CO., LTD. and Consolidated Subsidiaries
As of March 31, 2016

GRAPHSTO ALLSTAKEHOLDERS
FOCUS

Thousands of
U.S. dollars(Note 1)Millions of yen

2016

2015

Marketable securities (Notes 5, 6 and 7)

2015

2016

2016

LIABILITIES AND EQUITYCurrent assets:

Cash and deposits (Notes 5 and 6)

Millions of yen

2016

ASSETS

Thousands of
U.S. dollars(Note 1)

Current liabilities:¥ 87,110¥ 94,365

3,804

19,153$773,074

Short-term borrowings (Notes 6, 13 and 15)

33,759Current portion of long-term debt (Notes 13, 14 and 15)

Receivables:¥ 18,457
2,299

¥

3,870

$

163,800

1,944

20,403

Trade (Note 6)

61,39154,491

544,826

Trade51,32444,897455,485

3,406

3,348

30,227

Other

36,20932,569321,344

Less: Allowance for doubtful receivables

(347)

(422)

(3,080)Accrued income taxes (Notes 6 and 17)

7,263

5,164

64,457

Inventories (Note 9)27,16923,068241,116

Other current liabilities (Note 21)

15,333

14,583136,076

Deferred tax assets (Note 17)

5,657

4,688

50,204130,885

103,027

1,161,565

Other current assets

2,734

2,817

24,265

190,924

201,508

1,694,391

Long-term debt (Notes 6, 13, 14 and 15)

13,498

9,893

119,791

Liability for retirement benefits (Note 16)

7,987

3,395

70,882

Deferred tax liabilities (Note 17)

24,022

21,347

213,188
18,468Property, plant and equipment:

Total current liabilities

52,69451,098467,643

Buildings and structures (Notes 8, 10, 11 and 15)

119,110

106,655

1,057,064

Deferred tax liabilities on land revaluation (Note 12)

2,081

2,455

Machinery, equipment and vehicles (Notes 10, 11 and 15)

166,171

150,877

1,474,716

Other long-term liabilities

2,907

2,774

25,798

Leased assets

2,395

2,177

21,25550,49539,864448,127

Construction in progress

12,072

5,912

107,135

Equity (Note 18):

Other

1,545

1,528

13,712353,987

318,247

3,141,525

Less: Accumulated depreciation(185,101)(170,998)(1,642,714)

25,12325,123

222,959

Property, plant and equipment, net

168,886

147,2491,498,811

Common stock:
Authorized—500,000,000 shares;
Issued—117,463,685 shares in 2016 and 2015
Capital surplus

48,17848,417427,565

Stock acquisition rights (Note 23)

1,860

1,518

16,507Retained earnings (Notes 18 and 27)

293,803273,319

2,607,410

Treasury stock,at cost—9,438,151 shares at March 31, 2016
and 7,231,787 shares at March 31, 2015

(35,836)(21,684)(318,033)

383,138

Investments and other assets:

Investments in securities (Notes 6 and 7)

113,004

99,973

1,002,875

Investments in unconsolidated subsidiaries and associates (Note 6)

32,95841,139292,492

68

9,622

603

1,236

2,004

10,969Long-term loans

Total long-term liabilities

Unrealized gain (loss) on available-for-sale securities (Note 7)

43,17235,103

Goodwill (Note 10)28,550702

253,372

Deferred gain (loss) on derivatives under hedge accounting

(262)

58

(2,325)

Other (Note 10)

13,7407,511

121,938

Land revaluation reserve (Note 12)(6,380)(5,739)(56,621)

Asset for retirement benefits (Note 16)

202

269

1,793

Foreign currency translation adjustments(4,577)

6,017(40,619)

Deferred tax assets (Note 17)

793

950

7,038

Defined retirement benefit plans(3,179)1,170(28,213)

3,082

2,139

27,353361,902363,302

3,211,768

Less: Allowance for doubtful receivables
Total investments and other assets
Total assets

INFORMATION

Accumulated other comprehensive income (loss):

Intangible assets:

Other assets

FINANCIALSECTION

Long-term liabilities:

Land (Notes 8, 10, 12 and 15)

Other investments (Note 6)

SUSTAINABLE
MANAGEMENT

Payables (Note 6):

Other

Total current assets

PERFORMANCE BY
BUSINESS SEGMENT

(374)

(322)

(3,319)193,259

163,987

1,715,114¥ 553,069¥ 512,744$ 4,908,316

Total
Noncontrolling interests
Total equity
Total liabilities and equity

9,787

6,551

86,856371,689

369,853

3,298,624¥ 553,069¥ 512,744$ 4,908,316

See accompanying notes to consolidated financial statements.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

37

BACK TO CONTENTSCONSOLIDATED STATEMENT OF INCOMECONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMENISSIN FOODS HOLDINGS CO., LTD. and Consolidated Subsidiaries
Year ended March 31, 2016NISSIN FOODS HOLDINGS CO., LTD. and Consolidated Subsidiaries
Year ended March 31, 2016

PROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

Thousands of
U.S. dollars(Note 1)Millions of yen

Millions of yen

2016

2015

2016

¥26,887¥18,719$238,614

Unrealized gain (loss) on available-for-sale securities

8,008

16,47971,069Deferred gain (loss) on derivatives under hedge accounting

(319)

20

(2,831)

46

159

408

Foreign currency translation adjustments(6,011)

8,046(53,346)

Share of other comprehensive income (loss) in associates(4,663)(6,238)(41,383)

Defined retirement benefit plans(4,342)771(38,534)

2016

2015

2016

Net sales¥468,084¥431,575$4,154,100

Net income

Cost of sales

260,496

242,916

2,311,821

Other comprehensive income (loss)

Gross profit

207,588

188,659

1,842,279

181,188

164,358

1,607,987

Selling, general and administrative expenses (Note 19)

Operating income

26,40024,301

234,292

Other income (expenses):

Interest and dividend income
Gain on sales of marketable securities (Note 7)

2,344

2,765

20,802

803

—

7,126

Equity in earnings of associates

2,782

2,929

24,689Interest expense

(343)

(247)

(3,044)

Tax and dues

—

(53)

—

(1,384)2,486(12,283)

Foreign exchange gain (loss)
Loss on investments in partnership

(394)

—

(3,497)

Gain on sales of fixed assets

228

385

2,023

Gain on sales of investments in securities (Note 7)

5,128

2,505

45,509Gain on step acquisitions (Note 27)

6,641

—

58,937

Gain on bargain purchase

206

—

1,828

Loss on disposal and sales of fixed assets

(395)

(575)

(3,506)

Loss on impairment of fixed assets (Note 10)(1,093)(5,058)(9,700)Loss on sales of investments in capital(1,317)—(11,688)

Bad debts expense

(734)

—

(6,514)

Loss on revaluation of investments in securities, unconsolidated
subsidiaries and associates, and other

(629)

(720)

(5,582)

Effect of change to the standard method of
accounting for the projected benefit obligation

(736)

—

(6,532)

Loss on cancellation of manufacturing subcontract agreement

—

(333)

—

(528)

630

(4,683)36,97929,015

328,177

Current

11,212

10,491

99,503

Deferred(1,120)(195)(9,940)10,092

10,29689,563

26,887

18,719238,614

2

214

18

¥ 26,885¥ 18,505$ 238,596

Other, net
Income before income taxes

Thousands of
U.S. dollars(Note 1)

Land revaluation reserve

Total other comprehensive income (loss)

SUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION(7,281)

19,237(64,617)

19,60637,956

173,997

Owners of the parent

19,73837,799175,168

Noncontrolling interests

(132)

157

(1,171)

Comprehensive Income

PERFORMANCE BY
BUSINESS SEGMENT

Total comprehensive income attributable to:

Income taxes (Note 17):

Net income
Net income attributable to noncontrolling interests
Net income attributable to owners of the parent

See accompanying notes to consolidated financial statements.

See accompanying notes to consolidated financial statements.

NISSIN FOODS HOLDINGS ANNUAL REPORT 201638

BACK TO CONTENTSCONSOLIDATED STATEMENT OF CHANGES IN EQUITYPROLOGUENISSIN FOODS HOLDINGS CO., LTD. and Consolidated Subsidiaries
Year ended March 31, 2016

GRAPHSTO ALLSTAKEHOLDERS
FOCUS

PERFORMANCE BY
BUSINESS SEGMENT
Millions of yen

SUSTAINABLE
MANAGEMENT

Accumulated other comprehensive income

Commonstock

CapitalsurplusStockacquisitionrights(Note 23)

Retainedearnings(Notes 18
and 27)

Treasurystock

Unrealized
gain (loss) on
available-forsale securities(Note 7)¥25,123—¥48,416—¥1,180—¥263,585(8,267)¥(21,710)—¥17,563—¥ 38—¥(5,898)—¥ 5,214————18,505

—

—

—

—

—
—
—
—

—
1
—
—

—
—
—
—

—
—
85
(726)

(10)
36
—
—

—
—
—
—

—
—
—
—

—
—
—
—

Adjustments due to change inaccounting period of
consolidated subsidiaries

—

—

—

40

—

—

—

Adjustments due to change inaccounting period of associates
accounted for by the equity method

—

—

—

128

—

—

Other
Net change in the year
Balance, March 31, 2015
Cash dividends paid——
¥25,123———¥48,417——338¥1,518—(31)—¥273,319(8,268)——¥(21,684)—

Net income attributableto owners of the parent

—

—

—

26,885

—
—
—
—

—
5
—
—

—
—
—
—

Adjustments due to change inaccounting period of
consolidated subsidiaries——

Change in equity related to transaction
with noncontrolling shareholders———¥25,123

Balance, March 31, 2014
Cash dividends paid
Net income attributableto owners of the parent
Acquisition of treasury stock
Sales of treasury stockReversal of land revaluation reserve
Change in scope of consolidation

Acquisition of treasury stock
Sales of treasury stockReversal of land revaluation reserve
Change in scope of consolidation

Other
Net change in the year
Balance, March 31, 2016

Deferredgain (loss)
on derivatives
under hedge
accountingLandrevaluation
reserve(Note 12)

Foreigncurrencytranslation
adjustments

Definedretirement
benefit
plans

¥

Total

Noncontrollinginterests

409—¥333,920(8,267)¥8,381—¥342,301(8,267)——18,505—18,505

—
—
—
—

—
—
—
—

(10)
37
85
(726)

—
—
—
—

(10)
37
85
(726)

—

—

—

40

—

40

—

—

—

—

128

—

128

—
17,540¥35,103
—

—
20
¥ 58
—

—
159
¥(5,739)——803¥ 6,017——761¥ 1,170—(31)
19,621¥363,302(8,268)—(1,830)¥6,551—(31)
17,791¥369,853(8,268)

—

—

—

—

—

—

26,885—26,885——687
22(14,180)
28
—
—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

—
—
—
—

(14,180)
33
687
22

—
—
—
—

(14,180)
33
687
22

—

1,158

—

—

—

—

—

—

1,158

—

1,158

(244)

—

—

—

—

—

—

—

—

(244)

—

(244)

—
—
¥48,178—342¥1,860——¥293,803——¥(35,836)—
8,069¥43,172—(320)¥(262)—(641)¥(6,380)—(10,594)¥ (4,577)—(4,349)¥(3,179)—(7,493)¥361,902—
3,236¥9,787—(4,257)¥371,689

Total
equityFINANCIALSECTION
INFORMATIONNISSIN FOODS HOLDINGS ANNUAL REPORT 2016

39

BACK TO CONTENTSPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

PERFORMANCE BY
BUSINESS SEGMENT
Thousands of U.S. dollars (Note 1)

SUSTAINABLE
MANAGEMENT

Accumulated other comprehensive income

Treasurystock

Deferredgain (loss)
on derivatives
under hedge
accountingLandrevaluation
reserve(Note 12)

Foreigncurrencytranslation
adjustments

Definedretirement
benefit
plans

Total

Noncontrollinginterests

Total
equity$515$(50,932)$ 53,399$ 10,383$3,224,192$58,138$3,282,330(73,376)—(73,376)

FINANCIALSECTION

Commonstock

Capitalsurplus$222,959$429,686$13,472$2,425,621$(192,439)$311,528

Cash dividends paid

—

—

—

(73,376)

—

—

—

—

—

—

Net income attributable toowners of the parent

—

—

—

238,596

—

—

—

—

—

—

238,596—

238,596

Acquisition of treasury stock

—

—

—

—

(125,842)

—

—

—

—

—

(125,842)—(125,842)

Sales of treasury stock

—

44

—

—

248

—

—

—

—

—

292

—

292

Transfer to capital surplus

—

—

—

—

—

—

—

—

—

—

—

—

—

Reversal of land revaluation reserve

—

—

—

6,097

—

—

—

—

—

—

6,097

—

6,097

Change in scope of consolidation

—

—

—

195

—

—

—

—

—

—

195

—

195

Adjustments due to change inaccounting period of
consolidated subsidiaries

—

—

—

10,277

—

—

—

—

—

—

10,277—

10,277

Change in equity related to transaction
with noncontrolling shareholders—(2,165)

—

—

—

—

—

—

—

—

(2,165)—(2,165)

Other

—

—

—

—

—

—

—

—

—

—

—

—

—

Net change in the year

—

—

3,035

—

—

71,610(2,840)(5,689)(94,018)(38,596)(66,498)

28,718(37,780)$222,959$427,565$16,507$2,607,410$(318,033)$383,138$(2,325)$(56,621)$(40,619)$(28,213)$3,211,768$86,856$3,298,624

Balance, March 31, 2015

Balance, March 31, 2016

Retainedearnings(Notes 18
and 27)

Unrealized
gain (loss) on
available-forsale securities(Note 7)

Stockacquisitionrights(Note 23)

INFORMATION

See accompanying notes to consolidated financial statements.

NISSIN FOODS HOLDINGS ANNUAL REPORT 201640

BACK TO CONTENTSCONSOLIDATED STATEMENT OF CASH FLOWSPROLOGUENISSIN FOODS HOLDINGS CO., LTD. and Consolidated Subsidiaries
Year ended March 31, 2016

GRAPHSTO ALLSTAKEHOLDERS
FOCUS

Thousands of
U.S. dollars(Note 1)Millions of yen

2016

2015

Millions of yen

2016

Net (increase) decrease in time deposits

Income before income taxes¥ 36,979¥ 29,015$ 328,177

Depreciation and amortization

17,49915,440155,298

Loss on impairment of fixed assets

1,093

5,058

9,700

Proceeds from sales and redemption of marketable securities

Increase (decrease) in allowance for doubtful receivables

(130)

41

(1,154)

Increase (decrease) in liability for retirement benefits(1,769)(1,792)(15,699)

Payments for purchases of property, plantand equipment, and other

Interest and dividend income(2,344)(2,765)(20,802)

343

247

3,044

Foreign currency exchange (gain) loss

1,642

(2,359)Equity in earnings of associates(2,782)(2,929)Gain on step acquisitions(6,641)—(58,937)

Loss on disposal and sales of property, plant and equipment
Gain on sales of marketable securities,
investments in securities and other

Payments for purchases of marketable securities

4,707(2,963)

41,773

(0)

(0)

(0)

800

8,402

7,100

(32,510)(19,951)(288,516)

Proceeds from sales of property, plantand equipment, and other

1,811

1,829

16,072(16,244)(104,375)

14,572

Proceeds from sales and redemption of investments in securities

21,816

27,579193,610(24,689)

Purchase of shares of subsidiaries resulting
in change in scope of consolidation(30,365)—(269,480)

584

—

5,183

166

190

1,473

(4,614)(2,505)(40,948)

720

9,079

(Increase) decrease in trade notes and accounts receivable(4,902)(2,588)(43,504)(Increase) decrease in inventories(2,594)(1,264)(23,021)

Increase (decrease) in trade notes and accounts payable

4,824

566

42,812

Increase (decrease) in other payables

2,275

1,751

20,190

Other, net

1,604

101

14,235

Subtotal

41,67236,927369,826

Interest and dividends received

4,550

6,087

40,380Interest paid

(343)

(247)

(3,044)(10,580)(13,641)(93,894)

Net cash provided by operating activities2016(11,761)

1,023

Income taxes refunded

2015

Payments for purchases of investment in securities

Loss on revaluation of marketable securities,
investments in securities and other

Income taxes paid

2016

Investing activities:

Operating activities:

Interest expense

Thousands of
U.S. dollars(Note 1)

885

1,228

7,854

36,18430,354

321,122

Proceeds from purchase of shares of subsidiaries resulting
in change in scope of consolidation
Net (increase) decrease in loans receivable

388

1

3,443

Other, net(1,230)(3,494)(10,916)

Net cash used in investing activities(45,760)(4,841)(406,106)131,345PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

Financing activities:

Increase in short-term borrowings, net

14,800654

Proceeds from long-term borrowings

4,491

2,366

39,856

Repayment of long-term borrowings(2,006)(2,624)(17,803)

Proceeds from share issuance to noncontrolling shareholders

1,665

—

14,776

Net (increase) decrease in treasury stock(14,180)(10)(125,843)

Cash dividends paid

(8,268)(8,267)(73,376)

(12)

(12)

(106)

Dividends paid to noncontrolling interests
Proceeds from changes in ownership interests in subsidiaries
that do not result in change in scope of consolidation

750

—

6,656

Other, net

(251)

(129)

(2,227)(26,722)(3,011)(8,022)

Effect of exchange rate changes on cash and cash equivalents(4,884)

5,063(43,344)

Net increase (decrease) in cash and cash equivalents(17,471)

22,554(155,050)

Cash and cash equivalents at beginning of the year

Net cash used in financing activities

105,897

80,201

939,803

Increase in cash and cash equivalents arisingfrom initial consolidation of subsidiaries

135

2,574

1,198

Increase in cash and cash equivalents arisingfrom change in accounting period of subsidiaries

128

568

1,136

¥ 88,689¥105,897$ 787,087

Cash and cash equivalents at end of the year (Note 5)

See accompanying notes to consolidated financial statements.

NISSIN FOODS HOLDINGS ANNUAL REPORT 201641

BACK TO CONTENTSNOTES TO CONSOLIDATEDFINANCIAL STATEMENTS

PROLOGUE
GRAPHSNISSIN FOODS HOLDINGS CO., LTD. and Consolidated Subsidiaries

TO ALLSTAKEHOLDERS
FOCUS

01

BASIS OF PRESENTING CONSOLIDATEDFINANCIAL STATEMENTS

The accompanying consolidated financial statements of NISSIN FOODS HOLDINGS CO.,LTD. (the “Company”) and consolidated subsidiaries (collectively, the “Group”) are preparedon the basis of accounting principles generally accepted in Japan and related accounting
regulations prescribed in the Financial Instruments and Exchange Act of Japan, which are
different in certain respects from the application and disclosure requirements of International
Financial Reporting Standards.
In preparing the accompanying consolidated financial statements, certain reclassifications
and rearrangements have been made to the consolidated financial statements issued
domestically in order to present them in a format that is more familiar to readers outside
Japan.
Certain reclassifications of previously reported amounts have been made to conform theconsolidated financial statements for the year ended March 31, 2015 to the 2016
presentation. Such reclassifications had no effect on consolidated net income or equity.
The consolidated financial statements are stated in Japanese yen, the currency of thecountry in which the Company is incorporated and operates. The translation of yen amounts
into U.S. dollars is included solely for the convenience of readers outside Japan and has
been made at ¥112.68 = U.S.$1.00, the exchange rate prevailing on March 31, 2016. Thistranslation should not be construed as a representation that yen can be converted into U.S.
dollars at the above or any other rate.

02

SUMMARY OF SIGNIFICANTACCOUNTING POLICIES(a) Principles of consolidation and accounting for investments in unconsolidated
subsidiaries and associates
The accompanying consolidated financial statements include the accounts of the Company
and the significant companies, which it controls directly and indirectly under the control andinfluence concepts. Companies over which the Company exercises significant influence interms of their operating and financial policies have been included in the accompanying
consolidated financial statements by the equity method. The assets and liabilities of
consolidated subsidiaries are stated at fair value as of their respective dates of acquisition.
Consolidation of the remaining subsidiaries and associates would not have a material effecton the accompanying consolidated financial statements. All significant intercompany
balances, transactions and material unrealized gains from intercompany transactions havebeen eliminated in consolidation.
The number of consolidated subsidiaries has increased by five during the fiscal year
ended March 31, 2016. Due to the establishment of new companies or the increased
importance of existing companies, Zhejiang Nissin Foods Co., Ltd., Nissin Foods (H.K.) Co.,
Ltd., Nissin Foods Singapore Pte. Ltd. and Nissin Technology Alimentos Brasil Do Ltda. havebeen included in the scope of consolidation. Moreover, Bonchi Co., Ltd. and Nissin Foods
Do Brasil Ltda. (formerly “Nissin-Ajinomoto Alimentos Do Ltda.”) changed into consolidated
subsidiaries from equity method affiliates through additional stock acquisition. Nissin BusinessSupport Co., Ltd. has been excluded from the scope of consolidation because it has been
merged with the Company.
The Company’s consolidated subsidiaries outside Japan prepare their financial
statements in accordance with accounting principles generally accepted in other countries,
including accounting principles generally accepted in the United States (USGAAP) andInternational Financial Reporting Standards (IFRS).
However, certain items are adjusted in the process of consolidation based on “Practical
Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements” (Accounting Standards Board of Japan, Practical Issues
Task Force, No. 18 dated May 17, 2006).
The balance sheet date of 22 overseas consolidated subsidiaries is December 31. Any
significant differences in intercompany accounts and transactions arising from intervening
intercompany transactions during the period from January 1 through March 31 have beenadjusted as necessary.
To increase the appropriateness of consolidated accounting information, the provisional
settlement of account has been made on March 31 for 11 subsidiaries whose account closing
date is December 31, including Nissin Foods Co., Ltd. and Winner Food Products Ltd. in China
due to the change of accounting period and profit and loss which occurred from January 1,
2015 to March 31, 2015, have resulted in “adjustments due to change in accounting period of
consolidated subsidiaries” on Consolidate Statement of Changes in Equity.
The numbers of consolidated subsidiaries and associates accounted for by the equity
method for the years ended March 31, 2016 and 2015 were as follows:
2016

2015

Consolidated subsidiaries

54

49

Associates accounted for by the equity method

4

5

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATIONNISSIN FOODS HOLDINGS ANNUAL REPORT 2016

42

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FOCUS(b) Cash and cash equivalents
For the purposes of the consolidated statements of cash flows, cash and cash equivalents
comprise cash on hand, deposits held at call with banks and all highly liquid investments withan insignificant risk of changes in value and with maturities of three months or less from theacquisition date.
(c) Securities
The accounting standard for financial instruments requires that securities be classified into
three categories: trading, held-to-maturity or available-for-sale securities. Trading securities
are carried at fair value and held-to-maturity debt securities are carried at amortized cost.
Marketable securities classified as available-for-sale securities are carried at fair value withany changes in unrealized gain or loss, net of the applicable income taxes, reported in a
separate component of equity. Cost of securities sold is determined by the moving-averagemethod. Non-marketable securities classified as available-for-sale securities are carried atcost based on the moving-average method. For other than temporary declines in fair value,
investment securities are reduced to net realizable value by a charge to income.
(d) Inventories
Finished goods and merchandise are principally stated at the lower of cost or net selling
value, with cost being determined by the weighted-average method. Raw materials andsupplies are principally stated at the lower of cost or net selling value, with cost being
determined by the weighted-average method.
(e) Hedging activities
The Group manages risk of adverse fluctuations in foreign exchange and interest rates in theunderlying liabilities with derivative financial instruments (“derivatives”). The derivative
instruments are applied to forecasted and committed foreign currency transactions andlong-term debt. For foreign currency forward contracts and interest rate swaps, the gains orlosses are deferred until maturity of the hedged transactions if they meet requirements forhedge accounting, i.e., hedging purpose, high effectiveness and high correlation between thehedging instruments and the hedged items.
Foreign currency options are recognized as either assets or liabilities and measured atfair value, and gains or losses on derivative transactions are recognized in the consolidated
statements of income. An evaluation of hedge effectiveness has been omitted, since thesignificant conditions of the hedging instruments and hedged items were the same and therisk of changes in cash flows was completely avoided. The Group does not anticipate any
losses arising from credit risk, since the Group enters into these derivatives with majorinternational financial institutions with high credit ratings to reduce the risk of counterparties’
non-performance.

( f ) Property, plant and equipment (except for leased assets)
Property, plant and equipment are stated at cost. Depreciation is computed principally by the
declining-balance method. Certain consolidated subsidiaries apply the straight-line method.
The straight-line method is also applied to the head office building of the Company (inOsaka). In addition, the straight-line method is applied to buildings (except for theattachments to the buildings) acquired on or after April 1, 1998. The range of useful lives isprincipally from 15 to 50 years for buildings and 10 years for machinery and equipment.

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION(g) Intangible assets (except for leased assets)
Intangible assets are amortized by the straight-line method. Purchased software is amortizedby the straight-line method over a five-year period, which is the estimated useful life used by
the Group.
(h) Leased assets
Leased assets under finance lease contracts that do not transfer ownership to the lessee aredepreciated to a residual value of zero by the straight-line method using the term of thecontract as the useful life.
( i ) Long-lived assets
The Group reviews its long-lived assets for impairment whenever events or changes incircumstance indicate the carrying amount of an asset or asset group may not berecoverable. An impairment loss would be recognized if the carrying amount of an asset or
asset group exceeds the sum of the undiscounted future cash flows expected to result fromthe continued use and eventual disposition of the asset or asset group. The impairment loss
would be measured as the amount by which the carrying amount of the asset exceeds its
recoverable amount, which is the higher of the discounted cash flows from the continued use
and eventual disposition of the asset or the net selling price at disposition.
( j ) Liability for employees’ retirement benefits
The Company and certain consolidated subsidiaries have defined benefit pension plans. The
Company accounts for the liability for retirement benefits based on the defined benefit
obligations and plan assets at the consolidated balance sheet date. The defined benefit
obligations are attributed to periods on a benefit formula basis. Net unrecognized actuarial
gain or loss is credited or charged to income in the year following the year in which the gainor loss has incurred. Actuarial gains and losses that are yet to be recognized in profit or loss
are recognized within equity (accumulated other comprehensive income) after adjusting fortax effects, and any resulting deficit or surplus shall be recognized as a liability or asset.

NISSIN FOODS HOLDINGS ANNUAL REPORT 201643

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FOCUS(k) Allowance for doubtful receivables
The allowance for doubtful receivables is calculated based on the historical experience withbad debts and an estimate of certain uncollectible amounts determined after an analysis of
specific individual doubtful receivables.
( l ) Income taxes
The provision for income taxes is computed based on the pretax income included in the
consolidated statements of income. Deferred tax assets and liabilities are provided for
temporary differences between the balances of assets and liabilities reported for financial
reporting purposes and the corresponding balances for tax reporting purposes.
(m) Goodwill
Goodwill is amortized by the straight-line method over a certain period reasonably determinedfor each investment on a case-by-case basis, but for no longer than 20 years, or are charged
to income as incurred if the amount is deemed to be immaterial.
(n) Stock options
In accordance with “Accounting Standard for Stock Options” (ASBJ [Accounting Standards
Board of Japan] Statement No. 8, December 27, 2005), the Company and its domestic
subsidiaries accounted for stock options granted to their directors, executive officers andemployees on and after April 3, 2009 as expense on the date of grant based on the fair value
at the grant date.
(o) Per share information
Basic net income per share is computed by dividing net income attributable to commonshareholders by the weighted-average number of common shares outstanding for the period,
retroactively adjusted for stock splits. Diluted net income per share reflects the potential
dilution that could occur if stock options were exercised. Cash dividends per share presented
in the accompanying consolidated statements of income are dividends applicable to therespective years, including dividends to be paid after the end of the year.

03

PERFORMANCE BY
BUSINESS SEGMENT

CHANGES IN METHOD OF ACCOUNTING ANDDISCLOSURESSUSTAINABLE
MANAGEMENT

Changes in accounting procedures(a) Change in inventory valuation method
The Company and certain consolidated subsidiaries in Japan previously used the lastpurchase price method as the primary method for evaluating the raw materials and supplies
in its inventory. However, this has been changed to the weighted-average method from thecurrent consolidated fiscal year. The purpose of this change in the inventory evaluation
method is to realize more appropriate calculation of periodic income and loss upon the
restructuring of the Company’s enterprise system.
The new system was launched at the start of the current consolidated fiscal year, and forthis reason some of the inventory receipt and delivery records from previous consolidated
fiscal years were inaccessible. Therefore, it is impossible to calculate the cumulative impactof retrospectively applying the weighted-average method. Accordingly, the book value of raw
materials and supplies for the previous consolidated fiscal year have been used as the
beginning balance of the current consolidated fiscal year, and the weighted-average method
is applied from the current consolidated fiscal year onwards.
The impact of this change was immaterial.

FINANCIALSECTION
INFORMATION(b) Application of the Accounting Standard for Business Combination, etc.
ASBJ Statement No. 21“Accounting Standard for Business Combinations” (September 13, 2013)
ASBJ Statement No. 22“Accounting Standard for Consolidated Financial Statements” (September 13, 2013)
ASBJ Statement No. 7“Accounting Standard for Business Divestitures” (September 13, 2013)
ASBJ Statement No. 2“Accounting Standard for Earnings Per Share” (September 13, 2013)
ASBJ Guidance No. 10“Guidance on Accounting Standards for Business
Combinations and Business Divestitures” (September 13, 2013)
ASBJ Guidance No. 4“Guidance on Accounting Standard for Earnings Per Share” (September 13, 2013)
Major accounting changes are as follows:(a) Transactions with noncontrolling interest—A parent’s ownership interest in a subsidiarymight change if the parent purchases or sells ownership interests in its subsidiary. The
carrying amount of noncontrolling interest is adjusted to reflect the change in the parent’s

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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ownership interest in its subsidiary while the parent retains its controlling interest in its
subsidiary. Under the previous accounting standard, any difference between the fair valueof the consideration received or paid and the amount by which the noncontrolling interestis adjusted is accounted for as an adjustment of goodwill or as profit or loss in the
consolidated statement of income. Under the revised accounting standard, suchdifference is accounted for as capital surplus as long as the parent retains control over its
subsidiary.
(b) P resentation of the consolidated balance sheet—In the consolidated balance sheet,“minority interest” under the previous accounting standard is changed to “noncontrollinginterest” under the revised accounting standard.
(c) Presentation of the consolidated statement of income—In the consolidated statement ofincome, “income before minority interest” under the previous accounting standard ischanged to “net income” under the revised accounting standard, and “net income” under
the previous accounting standard is changed to “net income attributable to owners of theparent” under the revised accounting standard.
(d) Provisional accounting treatments for a business combination—If the initial accounting for abusiness combination is incomplete by the end of the reporting period in which thebusiness combination occurs, an acquirer shall report in its financial statements provisionalamounts for the items for which the accounting is incomplete. Under the previous
accounting standard guidance, the impact of adjustments to provisional amounts
recorded in a business combination on profit or loss is recognized as profit or loss in theyear in which the measurement is completed. Under the revised accounting standard
guidance, during the measurement period, which shall not exceed one year from theacquisition, the acquirer shall retrospectively adjust the provisional amounts recognized at
the acquisition date to reflect new information obtained about facts and circumstancesthat existed as of the acquisition date and that would have affected the measurement of
the amounts recognized as of that date. Such adjustments shall be recognized as if theaccounting for the business combination had been completed at the acquisition date.
(e) Acquisition-related costs—Acquisition-related costs are costs, such as advisory fees orprofessional fees that an acquirer incurs to effect a business combination. Under theprevious accounting standard, the acquirer accounts for acquisition-related costs by
including them in the acquisition costs of the investment. Under the revised accounting
standard, acquisition-related costs shall be accounted for as expenses in the periods inwhich the costs are incurred.
The above accounting standards and guidance for (a) transactions with noncontrollinginterest, (b) presentation of the consolidated balance sheet, (c) presentation of theconsolidated statement of income, and (e) acquisition-related costs are effective for the
beginning of annual periods beginning on or after April 1, 2015. Earlier application ispermitted from the beginning of annual periods beginning on or after April 1, 2014, except for(b) presentation of the consolidated balance sheet and (c) presentation of the consolidated
statement of income. In case of earlier application, all accounting standards and guidance
above, except for (b) presentation of the consolidated balance sheet and (c) presentation of
the consolidated statement of income, should be applied simultaneously.
Either retrospective or prospective application of the revised accounting standards andguidance for (a) transactions with noncontrolling interest and (e) acquisition-related costs ispermitted. In retrospective application of the revised standards and guidance, theaccumulated effects of retrospective adjustments for all (a) transactions with noncontrollinginterest and (e) acquisition-related costs which occurred in the past shall be reflected as
adjustments to the beginning balance of capital surplus and retained earnings for the year of
the first-time application. In prospective application, the new standards and guidance shall beapplied prospectively from the beginning of the year of the first-time application.
The revised accounting standards and guidance for (b) presentation of the consolidatedbalance sheet and (c) presentation of the consolidated statement of income shall be applied
to all periods presented in financial statements containing the first-time application of therevised standards and guidance.
The revised standards and guidance for (d) provisional accounting treatments for abusiness combination are effective for a business combination which occurs on or after the
beginning of annual periods beginning on or after April 1, 2015. Earlier application ispermitted for a business combination which occurs on or after the beginning of annual
periods beginning on or after April 1, 2014.
The Company applied the revised accounting standards and guidance for (a) transactions
with noncontrolling interest, (b) presentation of the consolidated balance sheet, (c)presentation of the consolidated statement of income, and (e) acquisition-related costs
above, effective April 1, 2015, and (d) provisional accounting treatments for a businesscombination above for a business combination which occurred on or after April 1, 2015. The
revised accounting standards and guidance for (a) transactions with noncontrolling interestand (e) acquisition-related costs were applied prospectively.
In the consolidated statement of cash flows for the year ended March 31, 2016, cash
flows for purchases or sales of ownership interests in a subsidiary without a change inconsolidation scope are presented under financing activities, and cash flows foracquisition-related costs are presented under operating activities.
As a result, operating income and income before income taxes for the year ended March
31, 2016 increased by ¥244 million (U.S.$2,165 thousand) and capital surplus at March 31,
2016 decreased by ¥244 million (U.S.$2,165 thousand).
In addition, basic net income per share and diluted net income per share for the year
ended March 31, 2016 increased by ¥2.23 (U.S.$0.02) and ¥2.22 (U.S.$0.02), respectively.

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATIONNISSIN FOODS HOLDINGS ANNUAL REPORT 201645

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04

DISCLOSURE OF NEW ACCOUNTING STANDARDSISSUED BUT NOT YET EFFECTIVE

Tax Effect Accounting—On December 28, 2015, the ASBJ issued ASBJ Guidance No. 26,“Guidance on Recoverability of Deferred Tax Assets,” which included certain revisions of theprevious accounting and auditing guidance issued by the Japanese Institute of Certified
Public Accountants.
While the new guidance continues to follow the basic framework of the previous
guidance, it provides new guidance for the application of judgment in assessing therecoverability of deferred tax assets.
The previous guidance provided a basic framework which included certain specificrestrictions on recognizing deferred tax assets depending on the company’s classification in
respect of its profitability, taxable profit and temporary differences, etc.
The new guidance does not change such basic framework but, in limited cases, allows
companies to recognize deferred tax assets even for a deductible temporary difference forwhich it was specifically prohibited to recognize a deferred tax asset under the previous
guidance, if the company can justify, with reasonable grounds, that it is probable that the
deductible temporary difference will be utilized against future taxable profit in some future
period.
The new guidance is effective for the beginning of annual periods beginning on or after
April 1, 2016. Earlier application is permitted for annual periods ending on or after March 31,
2016. The new guidance shall not be applied retrospectively and any adjustments from theapplication of the new guidance at the beginning of the reporting period shall be reflected
within retained earnings or accumulated other comprehensive income at the beginning of thereporting period.
The Company expects to apply the new guidance on recoverability of deferred tax assets
effective April 1, 2016, and is in the process of measuring the effects of applying the new
guidance in future applicable periods.

05

PERFORMANCE BY
BUSINESS SEGMENT

CASH AND CASH
EQUIVALENTSSUSTAINABLE
MANAGEMENT(a) A reconciliation of cash and deposits in the consolidated balance sheet and cash andcash equivalents in the consolidated statement of cash flows at March 31, 2016 and 2015is as follows:

2016

2015

2016

¥87,110¥ 94,365$773,074(16,170)

Time deposits with maturities exceeding three months(1,822)(6,767)

Marketable securities redeemable within three months

3,401

18,29930,183¥88,689¥105,897$787,087

Cash and cash equivalents

INFORMATION

Thousands of
U.S. dollars

Millions of yen

Cash and deposits

FINANCIALSECTION(b)	Principal assets and liabilities of a company that became a consolidated subsidiary due toacquisition of stock		 Assets and liabilities at the time Nissin Foods Do Brasil Ltda. became a consolidated
subsidiary as a result of the acquisition of stock as well as the relationship between theacquisition price paid for the stock and expenditures (net) for the acquisition are presented
below.
Millions of yen

Thousands of
U.S. dollars

Current assets¥ 5,467$ 48,518

Fixed assets

15,460137,203

Current liabilities(3,815)(33,857)

Long-term liabilities(3,015)(26,757)

Amount of goodwill

28,935

256,789

Cost of acquisition

43,032

381,896

Carrying value under the equity method(3,891)(34,531)

Gain on step acquisitions(6,641)(58,937)

Cash paid for the acquisition of additional shares

32,500288,428

155

1,375

Cash and cash equivalents(2,290)(20,323)

Expenditure for the acquisition

30,365

269,480

Foreign currency translation adjustments

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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06

FINANCIAL INSTRUMENTS AND
RELATED DISCLOSURESPERFORMANCE BY
BUSINESS SEGMENT

Thousands of U.S. dollars

March 31, 2016

The Group holds financial instruments according to its policy. Investments comprise low-risk
financial assets and borrowings that are financed by banks. The Group is exposed to financial
risks such as credit risk on trade receivables, foreign currency risk on trade payables, market
risk on securities and interest rate risk on long-term debt. The Group manages these risks
and executes derivatives in accordance with policies established and approved at a
management meeting of the Company, and no derivatives are used for trading or speculative
purposes.

Book value

Fair value¥ 87,110¥ 87,110$ 773,074$ 773,074

544,826

544,826—

Marketable securities and investments

1,146,610

1,246,610

100,000

Total$2,464,510$2,564,510$100,000

Trade payables

$

$

—

$ 455,485

163,800

163,800—

Other payables

321,344

321,344—

Accrued income taxes

64,45764,457—Long-term debt

140,194

140,796

602

Total

$1,145,280$1,145,882

$

602

—

Derivative transactions which do not qualify
for hedge accounting

$

—

$

—

$

—

Derivative transactions which qualify for hedge accounting$(3,355)$(3,355)$—

Unrealized
gain (loss)¥

Cash and deposits
Trade receivables$ 455,485

Millions of yen

Cash and deposits

Fair value

Short-term borrowings(a) Fair value of financial instruments as of March 31, 2016 and 2015 is summarized as follows:
March 31, 2016

Unrealized
gain (loss)

Book value

Trade receivables

61,391

61,391—Marketable securities and investments

129,200

140,468

11,268

Total¥277,701¥288,969¥11,268

Trade payables¥ 51,324¥ 51,324¥

Short-term borrowings

18,45718,457—

Other payables

36,20936,209—Accrued income taxes

7,263

7,263

—

Total

(3,355)SUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION—(3,355)—

Millions of yen

Long-term debt—

15,797

15,865

Total¥129,050¥129,118¥

68

Derivative transactions which do not qualify
for hedge accounting

¥

¥

¥

—

Derivative transactions which qualify for hedge accounting
Total

—
(378)

¥

(378)

—

68

(378)
¥

(378)

—
¥

—

Unrealized
gain (loss)

March 31, 2015

Book value

Fair value

Cash and deposits¥ 94,365¥ 94,365

Trade receivables

54,49154,491—Marketable securities and investments

131,148

145,148

14,000Total¥280,004¥294,004¥ 14,000

Trade payables

¥

¥

—

¥ 44,897¥ 44,897

Short-term borrowings

3,870

3,870

—

Other payables

32,56932,569—Accrued income taxes

5,164

5,164

—

Long-term debt

9,893

9,931

38

Total

¥ 96,393¥ 96,431¥

38

Derivative transactions which do not qualify
for hedge accounting

¥

—

¥

—

¥

—

¥

86

¥

86

¥

—

Derivative transactions which qualify for hedge accounting
Total

86

86

—

—

Notes:
1.	Fair value of deposits, trade receivables and payables, short-term borrowings, other payables and accrued income taxes
approximates the book value because of their short-term clearing.
2. Fair value of marketable securities and investments is quoted from market or financial institutions.
3. Fair value of long-term debt is calculated at the assumed discount rate.
4. Fair value of derivatives is quoted from financial institutions and stated as net of assets and liabilities.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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(b) M
 aturity analysis for financial assets and securities with contractual maturities as of March
31, 2016 and 2015 is summarized as follows:
Millions of yen

March 31, 2016

Due within
one year

Due after
one yearthroughfive years

Cash and deposits¥ 87,110¥Trade receivables

61,391—

Due after
five years
throughten years¥—

Due after
ten years

—

¥—

—

—

PERFORMANCE BY
BUSINESS SEGMENT

Millions of yen

March 31, 2015

Due within
one year

Due after
one yearthroughfive years

Cash and deposits¥ 94,365¥

Trade receivables

54,491——

Due after
five years
throughten years¥

SUSTAINABLE
MANAGEMENT
Due after
ten years

—

¥—

—

—

1. Bonds

Securities with maturity dates classified asavailable-for-sale securities:
National government

—

—

—

—

Corporate

803

1,364

2,581

—
—

National government

—

—

—

—

Other

—

—

—

Corporate

352

1,008

2,674

50

2. Other

18,387

1,172

—

—

Other

—

—

—

—

Total

¥168,046¥2,536¥2,581¥—

2. Other

3,453

734

—

—

¥152,306¥1,742¥2,674¥50(c) Carrying value of financial assets whose fair value cannot be reliably estimated at March
31, 2016 and 2015 is summarized as follows:

Thousands of U.S. dollars

March 31, 2016

Due within
one year

Cash and deposits$ 773,074

Trade receivables

544,826

Due after
one yearthroughfive years

Due after
five years
throughten years$$

Due after
ten years

March 31,

2016

2015

2016

Available-for-sale securities—$—

Investments in unconsolidated subsidiaries and associates¥19,186¥27,197$170,270—

Unlisted equity securities

646

749

5,733

Securities with maturity dates classified asavailable-for-sale securities:

Preferred equity securities

—

—

—

Investment in anonymous partnership

—

—

—

1. Bonds

Other

803

10,793

7,126

Corporate—

Thousands of
U.S. dollars

Millions of yen—

National government

—

—

—

—

—

3,124

8,946

23,731

44
—

Other

—

—

—

2. Other

30,644

6,514

—

—

$1,351,668$15,460$23,731

$44

Total

INFORMATION

1. Bonds

Securities with maturity dates classified asavailable-for-sale securities:

Total

FINANCIALSECTIONNISSIN FOODS HOLDINGS ANNUAL REPORT 2016

48

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07

SECURITIESMarch 31, 2016

(1) Equity securities

Acquisition
cost

Carrying
value

Unrealized
gain (loss)¥34,653¥ 95,950¥61,297———

Securities whose carrying value exceeds their acquisition cost:(2) Bonds
National government

National government
Corporate$352,432$ 897,453$545,021$ 19,711$$ (1,518)

4(1) Equity securities(3) Other

3,350

3,462

112

(2) Bonds¥39,712¥101,125¥61,413(171)(2) Bonds
National government
Corporate

—

—

—

2,393

2,370

(23)

Other

—

—

—

(3) Other

10,085

9,882

(203)

¥14,699¥ 14,302¥¥54,411¥115,427¥61,016

Subtotal
Total

National government
Corporate

¥

—
35
—

—

2,050

—
15,202995—

Securities whose carrying value
does not exceed their acquisition cost:—
15,167—

Subtotal

18,193———

21,237

21,033

(204)

Other

—

—

—

(3) Other

89,50187,700(1,801)$130,449$ 126,926$ (3,523)$482,881$1,024,379$541,498

Subtotal
Total

SUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

30,725

1,713¥$543,991——¥ 2,221$ 851,526

29,7301,709(1) Equity securities$307,535

Other

Other
Subtotal

Unrealized
gain (loss)(3) Other
Securities whose carrying value
does not exceed their acquisition cost:

Corporate

Carryingvalue(2) Bonds

Millions of yen(1) Equity securities

Acquisition
cost

Securities whose carrying value exceeds their acquisition cost:(a) Information regarding marketable securities classified as available-for-sale securities at
March 31, 2016 and 2015 is summarized as follows:
March 31, 2016

PERFORMANCE BY
BUSINESS SEGMENT

Thousands of U.S. dollars(397)

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Millions of yen

March 31, 2015

Acquisition
cost

Carrying
value

Unrealized
gain (loss)¥35,483¥ 84,571¥49,088

Securities whose carrying value exceeds their acquisition cost:(1) Equity securities(2) Bonds
National government
Corporate
Other(3) Other
Subtotal

—

—

1,651

1,660

—
9

—

—

—

5,011

6,550

1,539

¥42,145¥ 92,781¥50,636

Securities whose carrying value
does not exceed their acquisition cost:(1) Equity securities¥ 3,041

¥

2,949

¥

(92)

(2) Bonds
National government

—

—

—

3,112

3,088

(24)

Other

—

—

—

(3) Other

18,39018,387(3)¥24,543¥ 24,424¥¥66,688¥117,205¥50,517

Corporate

Subtotal
Total

(119)

The Group owns investment property such as buildings and land for rent in Tokyo and otherareas. Net operating income from these properties was ¥516 million (U.S.$4,579 thousand)and ¥470 million for the years ended March 31, 2016 and 2015, respectively. The details ofinvestment properties are as follows:
Millions of yen

Thousands of
U.S. dollars

Net book value at March 31, 2015

¥ 6,091$54,056

Net change for the year ended March 31, 2016

¥

(933)

$ (8,280)

Net book value at March 31, 2016

¥ 5,158$45,776

Fair value at March 31, 2016

¥10,334$91,711

2016

FINANCIALSECTION
INFORMATION

Notes:
1. Net book value represents net of accumulated depreciation.
2. Decrease during the fiscal year ended March 31, 2016 mainly consists of sales of land.
3. Fair value is mainly calculated by the Company based on the internal real estate appraisal standard.

2015

Millions of yen

Net book value at March 31, 2014

¥6,821

Net change for the year ended March 31, 2015

¥ (730)Net book value at March 31, 2015

¥6,091

Fair value at March 31, 2015

¥9,990Thousands of
U.S. dollars

Millions of yen

2016

2015

2016

¥12,446¥6,037$110,454

Aggregate gain

5,931

2,505

52,636Aggregate loss

—

—

—

March 31,SUSTAINABLE
MANAGEMENT

Notes:
1. Net book value represents net of accumulated depreciation.
2. Decrease during the fiscal year ended March 31, 2015 mainly consists of sales of land.
3. Fair value is mainly calculated by the Company based on the internal real estate appraisal standard.

(b) S ales of investments in securities classified as available-for-sale securities for the years
ended March 31, 2016 and 2015 are summarized as follows:

Proceeds from sales

08

PERFORMANCE BY
BUSINESS SEGMENTINVESTMENT
PROPERTIES09

INVENTORIESInventories as of March 31, 2016 and 2015 are summarized as follows:
Thousands of
U.S. dollars

Millions of yen

Merchandise and finished goods

2016

2015

2016

¥12,445¥12,015$110,446

Raw materials and supplies

14,724

11,053

130,670

Total¥27,169¥23,068$241,116NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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10

11

LOSS ON IMPAIRMENT OF
FIXED ASSETSThe Group recognized losses on impairment of fixed assets for the years ended March 31,
2016 and 2015 as follows:
Millions of yen
Location

Thousands of
U.S. dollars

Usage

Asset type

Impairment loss

¥ 138

$1,225

Idle assets

Machinery and equipment

229

2,032

Other assets

159

1,411

Machinery and equipment

555

4,926

12

$ 106

(March 31, 2016)

Buildings
Hanyu City, Saitama Prefecture

Nabari City, Mie Prefecture

Business
assetsOther assets

¥

Land

¥

(March 31, 2015)

Adachi-Ward, Tokyo Prefecture

Idle assets

548
463

Iizuka City, Fukuoka Prefecture
and other locations

Idle assets

Machinery and equipment
Other assets

59

Hong Kong—

Trademark289

Business
assetsBuildings

290

VietnamMachinery and equipment

741

ThailandTurkeyBusiness
assets—Buildings
Machinery and equipment
Other assets
Goodwill

SUSTAINABLE
MANAGEMENT

Under certain conditions such as exchanges of fixed assets of similar kinds and sales andpurchases resulting from expropriation, Japanese tax laws permit companies to defer the
profit arising from such transactions by reducing the cost of the assets acquired or byproviding a special reserve in the equity section. The deferred gain on property, plant andequipment taxable for tax purposes in the future was ¥994 million (U.S.$8,821 thousand) and¥1,003 million as of March 31, 2016 and 2015, respectively.

12

FINANCIALSECTION
INFORMATIONLAND REVALUATIONRESERVE

65

Buildings

Other assets

PERFORMANCE BY
BUSINESS SEGMENT

PROPERTY,
PLANT AND EQUIPMENT

52
1,059

Based on the Land Revaluation Law and the Amended Land Revaluation Law, the Company
revalued the land it holds for use in the course of ongoing operations at March 31, 2002. The
resulting land revaluation difference represents an unrealized devaluation of land and has
been debited directly, net of income taxes, under “Land revaluation reserve” in equity.
The market value of the land as of March 31, 2016 and 2015 declined by ¥5,950 million(U.S.$52,804 thousand) and ¥5,882 million, respectively, compared with the carrying value ofthe land revalued as of March 31, 2002 except for a part that was impaired after therevaluation.

966
61
¥ 465

The Group’s business assets are grouped according to manufacturing unit or usage, and theGroup’s idle assets are valued on an individual asset basis.
The book values of the relevant assets were reduced to their net realizable values when it
was determined that it was not possible that the book values of such assets would berecovered due to a downturn in profitability.
As a result, the Group recorded loss on impairment of fixed assets of ¥1,093 million(U.S.$9,700 thousand) and ¥5,058 million in the accompanying consolidated statement ofincome for the years ended March 31, 2016 and 2015, respectively.
The recoverable value of said assets is valuated by memorandum value.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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13

SHORT-TERM BORROWINGS AND
LONG-TERM DEBT

Long-term debt at March 31, 2015 is as follows:
Millions of yen

Long-term borrowings at interest rates ranging from 0.48% to 9.65%

Short-term borrowings, which amounted to ¥18,457 million (U.S.$163,800 thousand) and¥3,870 million as of March 31, 2016 and 2015, respectively, generally represent notes
payable to banks. Long-term debt (excluding the current portion thereof amounted to¥13,498 million (U.S.$119,791 thousand) and ¥9,893 million as of March 31, 2016 and 2015,
respectively.
The average interest rates on short-term borrowings were 1.09% and 3.51% at March
31, 2016 and 2015, respectively. The average interest rates on long-term borrowings were0.92% and 1.10% at March 31, 2016 and 2015, respectively.
Long-term debt at March 31, 2016 is as follows:

Lease obligations
Current portion of long-term debt

Millions of yen

Thousands of
U.S. dollars¥15,153$134,478

644

5,716

¥15,797$140,194(2,299)(20,403)¥13,498$119,791¥11,251

Lease obligations

586¥11,837

Current portion of long-term debt

SUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION(1,944)¥ 9,893

The aggregate annual maturities of long-term debt subsequent to March 31, 2015 aresummarized as follows:
Years ending March 31,

Long-term borrowings at interest rates ranging from 0.30% to 11.77%

PERFORMANCE BY
BUSINESS SEGMENT

Millions of yen

2016¥ 1,944

2017

2,128

2018

2,007

2019

3,485

2020

1,376

2021 and thereafter

897¥11,837

The aggregate annual maturities of long-term debt subsequent to March 31, 2016 aresummarized as follows:
Millions of yen

Thousands of
U.S. dollars

2017¥ 2,299$ 20,403

2018

5,569

49,423

2019

2,372

21,051

2020

2,211

19,622Years ending March 31,

2021

1,073

9,523

2022 and thereafter

2,273

20,172¥15,797$140,194

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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14

16

FINANCIAL
COVENANTS

A subsidiary of the Company entered into a syndicated loan agreement with three financial
institutions for which Mizuho Bank, Ltd. is the arranger. The debt amounting to ¥3,600 million(U.S.$31,949 thousand) and ¥3,900 million as of March 31, 2016 and 2015, respectively,
includes the following nonconsolidated financial covenants.
As of March 31, 2016

1.	The amount of equity on the balance sheet is required to be equal to or larger than 75% of
equity on the balance sheet as of March 31, 2013 or as of the previous fiscal year,
whichever is larger.
2. Ordinary loss for two consecutive years is not allowed.

PERFORMANCE BY
BUSINESS SEGMENTEMPLOYEES’ RETIREMENTBENEFITSSUSTAINABLE
MANAGEMENTThe Company and domestic consolidated subsidiaries have defined benefit pension plans,
including corporate certain pension fund plans, employees’ pension fund plans andlump-sum payment plans.
Some of the Company’s consolidated subsidiaries adopt the simplified valuation method
to evaluate projected benefit obligations.
Some foreign subsidiaries have defined benefit pension fund plans and defined
contribution pension fund plans.
The following tables set forth the funded and accrued status of the plans and theamounts recognized in the accompanying consolidated balance sheets as of March 31, 2016
and 2015 for the Company’s and the consolidated subsidiaries’ defined benefit pension
plans.

FINANCIALSECTION
INFORMATIONAs of March 31, 2015

1.	The amount of equity on the balance sheet is required to be equal to or larger than 75% of
equity on the balance sheet as of March 31, 2013 or as of the previous fiscal year,
whichever is larger.
2. Ordinary loss for two consecutive years is not allowed.

(1) The changes in defined benefit obligation for the years ended March 31, 2016 and 2015,
except (3), are as follows:
2016

2015

2016

¥33,637¥33,766$298,518

Service cost

1,260

1,222

11,182

Interest cost

366

368

3,248

Actuarial losses

4,031

(55)

35,774

Benefits paid

(1,615)(1,664)(14,332)

Balance at beginning of the year

15

PLEDGEDASSETS

Assets were pledged as collateral for short-term borrowings of ¥1,250 million (U.S.$11,093
thousand), long-term debt of ¥8,270 million (U.S.$73,394 thousand) and the current portionof long-term debt of ¥1,212 million (U.S.$10,756 thousand) as of March 31, 2016 and forshort-term borrowings of ¥1,200 million, long-term debt of ¥5,112 million and the current
portion of long-term debt of ¥622 million as of March 31, 2015. The assets pledged aresummarized as follows:

The amount of transfer with the changes
from simplified method to the standard method
Balance at end of the year

1,696

—

15,051¥39,375¥33,637$349,441

Thousands of
U.S. dollars

Millions of yen

2016

2015

2016

Land

¥1,903¥916$16,889

Buildings and structures

1,526

996

13,543

443

590

3,931

Machinery, equipment and vehicles

Thousands of
U.S. dollars

Millions of yen

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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GRAPHSTO ALLSTAKEHOLDERS
FOCUS(2) The changes in plan assets for the years ended March 31, 2016 and 2015, except for (3),are as follows:
Thousands of
U.S. dollars

Millions of yen

Balance at beginning of the year

2016

2015

2016

¥30,900¥28,283$274,228(4) Reconciliation between the liability recorded in the consolidated balance sheet and thebalances of defined benefit obligation and plan assets as of March 31, 2016 and 2015 is
as follows:
Thousands of
U.S. dollars

Millions of yen

2016

2015

2016

$ 349,184

Expected return on plan assets

618

566

5,485

Funded defined benefit obligation¥ 39,346¥ 34,380

Actuarial gains (losses)

(593)

1,682

(5,263)

Plan assets(34,045)(33,911)(302,139)

Contributions from the employer

1,598

1,755

14,182469$ 47,045

Benefits paid

(1,397)(1,386)(12,398)

The amount of transfer with the changes
from simplified method to the standard method
Balance at end of the year

913

—

8,102

¥32,039¥30,900$284,336¥ 5,301
Unfunded defined benefit obligation

2,484

2,657

22,044

Net liability for defined benefit obligation

7,785

3,126

69,089Liability for retirement benefit

7,987

3,395

70,882

Asset for retirement benefit

(202)

(269)

(1,793)¥ 7,785¥ 3,126$ 69,089

Net liability for defined benefit obligation(3) The changes in liability and asset under the simplified method for the years ended March
31, 2016 and 2015 are as follows:
Thousands of
U.S. dollars

Millions of yen

2016

2015

2016

¥ 390

¥ 746

$ 3,461

Net periodic benefit costs

278

(28)

2,467

Benefits paid

(206)

(328)

(1,828)The amount of transfer with the changes
from simplified method to the standard method

(46)

—

(408)

Balance at beginning of the year (net)

Changes in the scope of consolidation
Balance at end of the year (net)

34

—

302

¥ 450

¥ 390

$ 3,994¥

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION(5) The components of net periodic benefit costs for the years ended March 31, 2016 and2015 are as follows:
Thousands of
U.S. dollars

Millions of yen

Service cost

2016

2015

2016

¥ 1,260¥1,222$ 11,182

Interest cost

366

368

3,248

Expected return on plan assets

(618)

(566)

(5,485)(1,736)(633)(15,406)

275

(28)

2,441

¥ (453)¥ 363$ (4,020)

Recognized actuarial (gains) losses
Net periodic pension cost calculated by the simplified method
Net periodic benefit costs(6) Amounts recognized in other comprehensive income (before income tax effect) in respectof defined retirement benefit plans for the years ended March 31, 2016 and 2015 are as
follows:
Thousands of
U.S. dollars

Millions of yen

2016

2015

2016

Actuarial (gains) losses¥6,362¥(1,104)$56,461

Total¥6,362¥(1,104)$56,461NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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GRAPHSTO ALLSTAKEHOLDERS
FOCUS(7) Amounts recognized in accumulated other comprehensive income (before income tax
effect) in respect of defined retirement benefit plans for the years ended March 31, 2016
and 2015 are as follows:
Thousands of
U.S. dollars

Millions of yen

2016

2015

2016

Unrecognized actuarial (gains) losses¥4,625¥(1,737)$41,045

Total¥4,625¥(1,737)$41,045(8) Plan assets(a) Components of plan assets as of March 31, 2016 and 2015 are as follows:

17

PERFORMANCE BY
BUSINESS SEGMENT

INCOME TAXESSUSTAINABLE
MANAGEMENT

Income taxes applicable to the Company and its domestic consolidated subsidiaries
comprise corporate taxes, inhabitants’ taxes and enterprise taxes which, in the aggregate,
resulted in a statutory tax rate of 33.06% in 2016 and 35.31% in 2015.
Overseas consolidated subsidiaries are subject to the income taxes of the respective
countries in which they operate.

FINANCIALSECTION
INFORMATION

Reconciliation of the statutory tax rate and the effective tax rate for the period ended March
31, 2016 is as follows:

2016

2015

Debt investments

41%

51%

Statutory tax rate

Equity investments

21%

17%

Amortization of goodwill

0.84

General accounts with life insurance companies

19%

17%

Equity in earnings of associates(2.49)(5.94)

2016

33.06%

Other

19%

15%

Gain on step acquisitions

Total

100%

100%

Changes in valuation allowance

3.35

Corporate tax credit(2.69)

Difference in consolidated subsidiaries’ applicable tax rates(0.43)

Effect of tax rate reduction

0.37(b) Method for determining the expected rate of return on plan assets:
The expected rate of return on plan assets is determined considering the long-term rates ofreturn which are expected currently and in the future from the various components of theplan assets.
(9) The assumptions used for the years ended March 31, 2016 and 2015 are as follows:
2016

2015

Discount rate

Principally 0.2%

Principally 1.1%

Expected rate of return on plan assets

Principally 2.0%

2.0%

Other

1.22

Effective tax rates

27.29%The difference between the Company’s statutory tax rate and the effective tax rate for theyear ended March 31, 2015 is not disclosed as the difference is less than 5% of the statutory
tax rate.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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The tax effects of temporary differences that gave rise to significant portions of the deferred
tax assets and liabilities at March 31, 2016 and 2015 are as follows:
Thousands of
U.S. dollars

Millions of yen

2016

2015

2016

Deferred tax assets:

Unrealized losses on securities835¥ 1,191

Liability for retirement benefits

2,650

1,067

23,518

Accounts payable

2,520

2,204

22,364

721

633

6,399

Accrued bonuses

1,457

1,145

12,930

Other long-term payables

1,186

1,160

10,525

856

739

7,597

9,203

9,417

81,674

Loss on impairment of fixed assets

Depreciation and amortization
Tax loss carryforwards of consolidated subsidiaries
Other

¥

$

7,410

3,914

2,556

34,736Gross deferred tax assets

23,342

20,112

207,153

Less: Valuation allowance(12,947)(13,259)(114,901)

Total deferred tax assets

10,395

6,853

92,252

Deferred capital gain on properties(1,601)(1,583)(14,208)

Unrealized gain (loss) on available-for-sale securities(18,140)(15,805)(160,987)

Deferred tax liabilities:

Revaluation gain recognized upon consolidation(7,198)(4,789)(63,880)

Other(1,028)(384)(9,123)

Total deferred tax liabilities(27,967)(22,561)(248,198)

Net deferred tax (liabilities) assets¥(17,572)¥(15,708)$(155,946)

New tax reform laws enacted in 2016 in Japan changed the normal effective statutory tax rate
for the fiscal year beginning on or after April 1, 2016, to approximately 30.86% and for the
fiscal year beginning on or after April 1, 2018, to approximately 30.62%.
The effect of these changes was to increase deferred tax assets, net of deferred tax
liabilities, by ¥793 million (U.S.$7,038 thousand), unrealized gain on available-for-salesecurities by ¥1,016 million (U.S.$9,017 thousand), deferred gain on derivatives under hedge
accounting by ¥8 million (U.S.$71 thousand), remeasurement of defined retirement benefit
plans by ¥76 million (U.S.$674 thousand) and land revaluation reserve by ¥46 million(U.S.$408 thousand), with a decrease by the same amount in related deferred tax liability inthe consolidated balance sheet as of March 31, 2016, and to decrease income
taxes—deferred in the consolidated statement of income for the year then ended by ¥138
million (U.S.$1,225 thousand).

18

PERFORMANCE BY
BUSINESS SEGMENT

SHAREHOLDERS’
EQUITYSUSTAINABLE
MANAGEMENTThe Companies Act of Japan (the “Companies Act”) provides that an amount equal to 10%of the amount to be disbursed as distributions of capital surplus (other than the capitalreserve) and retained earnings (other than the legal reserve) be transferred to the capitalreserve or the legal reserve, until the sum of the capital reserve or the legal reserve equals
25% of the capital stock account. Such distributions can be made at any time by resolutionof the shareholders, or by the Board of Directors if certain conditions are met.
The Company’s legal reserve included in retained earnings at March 31, 2016 and 2015
amounted to ¥6,280 million (U.S.$55,733 thousand).
Under the Companies Act, upon the issuance and sale of new shares of capital stock,
the entire amount of the proceeds is required to be accounted for as capital stock, although a
company may, by resolution of the Board of Directors, account for an amount not exceeding
one-half of the proceeds of the sale of new shares as additional paid-in capital included incapital surplus.

FINANCIALSECTION
INFORMATION

Movements in issued common stock and treasury stock for the years ended
March 31, 2016 and 2015 are summarized as follows:
Number of shares

2016
March 31, 2015

Increase

Decrease

March 31, 2016

Common stock and treasury stock:

Common stock

117,463,685——

117,463,685

Treasury stock

7,231,787

2,215,791

9,427

9,438,151

Decrease

March 31, 2015

Number of shares

2015
March 31, 2014

Increase

Common stock and treasury stock:

Common stock

117,463,685——

117,463,685

Treasury stock

7,242,013

1,776

12,0027,231,787

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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Dividend payments on common stock approved during the years ended March 31, 2016 and2015 are as follows:
Millions of yen(Thousands of
U.S. dollars)

Yen(U.S. dollars)

Total amountof dividend

Dividend
per share

Recorddate

Effective
date

General meeting of shareholders heldon June 25, 2015

¥ 3,858($34,239)¥ 35($0.31)March
31, 2015

June
26, 2015

Board of Directors’ meeting held
on November 12, 2015

¥ 4,410($39,137)¥ 40($0.35)September
30, 2015

November26, 2015

Millions of yen

Yen

2015
Total amountof dividend

Dividend
per share

Recorddate

Effective
date

General meeting of shareholders heldon June 26, 2014

¥3,858¥35March
31, 2014

June
27, 2014

Board of Directors’ meeting heldon October 30, 2014

¥4,409¥40

September
30, 2014

November26, 2014

2016

20

PERFORMANCE BY
BUSINESS SEGMENT

LEASESSUSTAINABLE
MANAGEMENT(a) Finance leases
Leased assets presented in the accompanying consolidated balance sheet as of March 31,
2016 consisted of those under finance lease contracts that do not transfer ownership to thelessee and that were principally for vending machines for the instant noodle business.

FINANCIALSECTION
INFORMATION

Approved by:Thousands of
U.S. dollars

Millions of yen

2016

2015

2016

Due within one year

¥145

¥125

$1,287Due over one year

313

458

2,778

Total

¥458

¥583

$4,065

As a lessee

Approved by:

19(b) Operating leases
The Group has lease commitments under non-cancelable operating leases as follows:

Thousands of
U.S. dollars

Millions of yen

2015

2016

2016

As a lessor
Due within one year¥

Due over one year

1,464

1,498

12,992

Total¥1,498¥1,532$13,294

34

¥

34

$

302

RESEARCH AND
DEVELOPMENT COSTS

Costs relating to research and development activities are charged to income as incurred.
Research and development costs included in cost of sales and selling, general andadministrative expenses totaled ¥7,183 million (U.S.$63,747 thousand) and ¥6,431 million forthe years ended March 31, 2016 and 2015, respectively.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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21

DERIVATIVE FINANCIAL
INSTRUMENTS

As described in Note 2 (e), the Group utilizes derivatives to hedge the risk of fluctuations inforeign exchange rate and interest rate on certain liabilities.
Contract amounts of outstanding derivative positions accounted for by hedge accounting
as of March 31, 2016 and 2015 are ¥930 million (U.S.$8,253 thousand) and ¥1,016 million,
respectively, for interest rate swaps and ¥8,403 million (U.S.$74,574 thousand) and ¥4,579
million, respectively, for forward foreign exchange contracts.
There was no outstanding balance of derivative contracts that do not qualify for hedge
accounting at March 31, 2016 and 2015.
Disclosure of fair value information related to interest rate swaps has been omitted,
because interest rate swap contracts are treated as part of the hedged long-term debt; thus,
their fair values are integrally computed with those of the hedged long-term debt.
Fair value of forward foreign exchange contracts as of March 31, 2016 and 2015 isnegative ¥378 million (negative U.S.$3,355 thousand) and ¥86 million, respectively, which ismeasured at the quoted price obtained from financial institutions.

22

PERFORMANCE BY
BUSINESS SEGMENTAMOUNTSPER SHARESUSTAINABLE
MANAGEMENTFINANCIALSECTION

Amounts per share for the years ended March 31, 2016 and 2015 are as follows:
Yen

EquityCash dividends applicable to the year

Net income—basic
Stock options
Net income—diluted

U.S. dollars

2016

2015

2016

¥3,332.94¥3,282.02$29.58

80.00

75.00

0.71

2016

2015

Net income(Millions of yen)

Weightedaverage
number ofshares(Thousandsof shares)

Per share(Yen)

Per share(U.S. dollars)

Per share(Yen)¥26,885

109,500¥245.52$2.18¥167.88

—

583

—

—

—

¥26,885

110,083¥244.22$2.17¥167.10INFORMATION

The amounts per share of equity have been computed based on the number of shares ofcommon stock outstanding at the year-end.
Basic net income per share has been computed based on the net income available for
distribution to shareholders of common stock and the weighted-average number of shares ofcommon stock outstanding during the year.
Cash dividends per share represent the cash dividends proposed by the Board of Directors
as applicable to the respective fiscal years together with the interim cash dividends paid.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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23

PERFORMANCE BY
BUSINESS SEGMENT

STOCK OPTIONSSUSTAINABLE
MANAGEMENT

Stock options as of March 31, 2016 are as follows:
Number of sharesfor options
No.

Date of
grant

Persons
grantedYen(U.S. dollars)
Fair value
at grant dateMillions of yen(Thousands of U.S. dollars)

Granted andvestedAverage stock priceat exercise

Exercised

Outstanding

74,30017,10057,200¥2,325 ($21)—

FINANCIALSECTION
INFORMATION

Book value

2

June 26, 200912 Directors¥133 ($1,180)3

June 26, 2009

9 Executive Officers and Employees

3,155

1,752

1,403

¥2,677 ($24)¥5,590 ($50)¥

4June 26, 200932 Directors of subsidiaries

11,284

5,621

5,663

¥2,677 ($24)¥5,440 ($48)¥ 15 ($ 133)

6

June 29, 201011 Directors

73,20014,90058,300¥2,616 ($23)—¥153 ($1,358)

7

June 29, 2010

10 Executive Officers and Employees

5,710

2,878

2,832

¥3,003 ($27)¥5,590 ($50)¥

8June 29, 2010

31 Directors of subsidiaries

21,3298,035

13,294¥3,003 ($27)¥5,440 ($48)¥ 40 ($ 355)

4 ($

9 ($

35)

80)

9

June 29, 2011

8 Directors

73,2006,300

66,900¥2,141 ($19)—¥143 ($1,269)

10

June 29, 2011

13 Executive Officers

11,049

5,403

5,646

¥2,614 ($23)¥5,590 ($50)¥ 15 ($ 133)

11

June 29, 201135 Directors of subsidiaries

22,677

6,007

16,670¥2,614 ($23)¥5,437 ($48)¥ 44 ($ 390)

13

June 28, 2012

8 Directors

85,9007,500

78,400¥2,244 ($20)—¥176 ($1,562)

14

June 28, 2012

10 Executive Officers

8,666

3,890

4,776

¥2,709 ($24)¥5,590 ($50)¥ 13 ($ 115)

15

June 28, 201236 Directors of subsidiaries

26,477

5,190

21,287¥2,709 ($24)¥5,443 ($48)¥ 58 ($ 515)

17

June 26, 2013

7 Directors

80,0004,300

75,700¥3,003 ($27)—¥227 ($2,015)

18

June 26, 2013

12 Executive Officers

7,990

2,741

5,249

¥3,461 ($31)¥5,590 ($50)¥ 18 ($ 160)

19

June 26, 201336 Directors of subsidiaries

26,914

2,991

23,923¥3,461 ($31)¥5,439 ($48)¥ 83 ($ 737)

21

June 26, 2014

7 Directors

56,500—56,500¥4,323 ($38)—¥244 ($2,165)

22

June 26, 2014

14 Executive Officers and Employees

7,179

1,655

5,524

¥4,805 ($43)¥5,590 ($50)¥ 27 ($ 240)

23

June 26, 201437 Directors of subsidiaries

19,837984

18,853¥4,805 ($43)¥5,402 ($48)¥ 91 ($ 808)24

June 25, 2015

8 Directors

52,300—52,300¥4,692 ($42)—¥245 ($2,174)

25

June 25, 2015

16 Executive Officers and Employees

7,284

494

6,790

¥5,162 ($46)¥5,590 ($50)¥ 35 ($ 311)

26

June 25, 201543 Directors of subsidiaries

17,141

562

16,579¥5,162 ($46)¥5,402 ($48)¥ 86 ($ 763)

27

March 31, 2016

1 Executive Officer

621

—

621

¥5,289 ($47)

—

¥

3 ($

27)

Notes:
1. All stock options granted were vested.
2. The exercise period is 40 years from the grant date of each option.
3. The exercise price is ¥1 for each option.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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PERFORMANCE BY
BUSINESS SEGMENT

Stock options as of March 31, 2015 are as follows:
Number of shares for options
No.

Date of
grant

Persons
grantedYen

SUSTAINABLE
MANAGEMENT

Millions of yen

Granted andvestedExercised

Outstanding

Fair value
at grant date

Average stock priceat exercise

Book value

¥133

2

June 26, 200912 Directors

74,30017,10057,200¥2,325—3

June 26, 2009

9 Executive Officers and Employees

3,155

1,361

1,794

¥2,677¥5,378¥4

June 26, 200932 Directors of subsidiaries

11,284

5,422

5,862

¥2,677¥5,766¥ 16

6June 29, 201011 Directors

73,20014,90058,300¥2,616—¥153

7

June 29, 2010

10 Executive Officers and Employees

5,710

2,160

3,550

¥3,003¥5,379¥ 11

8June 29, 2010

31 Directors of subsidiaries

21,3297,626

13,703¥3,003¥5,767¥ 41

9June 29, 2011

8 Directors

73,2006,300

66,900¥2,141

—

¥143

10

June 29, 2011

13 Executive Officers

11,049

4,708

6,341

¥2,614¥5,230¥ 17

11June 29, 201135 Directors of subsidiaries

22,677

5,428

17,249¥2,614¥5,100¥ 45

13June 28, 2012

8 Directors

85,9007,500

78,400¥2,244

—

¥176

14

June 28, 2012

10 Executive Officers

8,666

3,055

5,611

¥2,709¥5,273¥ 15

15June 28, 201236 Directors of subsidiaries

26,477

4,373

22,104¥2,709¥5,100¥ 60

17June 26, 2013

7 Directors

80,0004,300

75,700¥3,003

—

¥227

18

June 26, 2013

12 Executive Officers

7,990

1,936

6,054

¥3,461¥5,378¥ 21

19

June 26, 201336 Directors of subsidiaries

26,914

1,599

25,315¥3,461¥5,100¥ 88

21June 26, 2014

7 Directors

56,500—56,500¥4,323

—

¥244

22

June 26, 2014

14 Executive Officers and Employees

7,179

1,059

6,120

¥4,805¥5,380¥ 29

23June 26, 201437 Directors of subsidiaries

19,837120

19,717¥4,805¥5,100¥ 95

5

FINANCIALSECTION
INFORMATION

Notes:
1. All stock options granted were vested.
2. The exercise period is 40 years from the grant date of each option.
3. The exercise price is ¥1 for each option.

The fair value of options granted as of the grant date was estimated using the Black-Scholes option-pricing model basedon the following assumptions:
Volatility of stock price
Estimated remaining outstanding period
Estimated dividend
Risk-free interest rate

No. 24

No. 25

No. 26

No. 2722.62%

19.35%

19.35%

10.83%

10.5 years

3.5 years

3.5 years

0.0 years¥75 per share¥75 per share¥75 per share¥75 per share

0.48%

0.03%

0.03%

(0.05)%NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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24

PERFORMANCE BY
BUSINESS SEGMENT

OTHER COMPREHENSIVEINCOMESUSTAINABLE
MANAGEMENTOther comprehensive income for the years ended March 31, 2016 and 2015 is as follows.
Thousands of
U.S. dollars

Millions of yen

2016

2015

2016

¥16,335¥25,264$144,968(5,919)(2,364)(52,529)

Amount before income tax effect

10,41622,90092,439

Income tax effect(2,408)(6,421)(21,370)¥ 8,008¥16,479$ 71,069¥¥

FINANCIALSECTION
INFORMATION

Unrealized gain (loss) on available-for-sale securities
Gain (loss) arising during the year
Reclassification adjustments to profit or loss for the year

Total
Deferred gain (loss) on derivatives under hedge accounting
Gain (loss) arising during the year86

$ (3,053)

(121)

(58)

(1,074)

Amount before income tax effect

(465)

28

(4,127)

Income tax effect

146

(8)

1,296

20

$ (2,831)

Reclassification adjustments to profit or loss for the year

Total

¥

(344)

(319)

¥

Land revaluation reserve
Income tax effect
Total

159

46
¥

46

¥

159

408
$

408

Foreign currency translation adjustments
Gain (loss) arising during the year

¥ (6,011)¥ 8,046$ (53,346)¥ (6,011)¥ 8,046$ (53,346)¥ (4,663)¥ (6,238)$ (41,383)¥ (4,663)¥ (6,238)$ (41,383)¥ (4,625)¥ 1,737$ (41,045)(1,737)(633)(15,416)

Amount before income tax effect(6,362)

1,104(56,461)

Income tax effect

2,020

(333)

17,927

Total
Share of other comprehensive income (loss) in associates
Gain (loss) arising during the year
Total
Defined retirement benefit plans
Gain (loss) arising during the year
Reclassification adjustments to profit or loss for the year

Total
Total other comprehensive income (loss)¥ (4,342)¥

771$ (38,534)¥ (7,281)¥19,237$ (64,617)

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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25

PERFORMANCE BY
BUSINESS SEGMENT

SEGMENTINFORMATIONSUSTAINABLE
MANAGEMENT(a) Overview of reportable segments
The Group’s reportable segments are those for which
separate financial information is available and regular
evaluation by the Board of Directors is being performed inorder to decide how resources are allocated among theGroup. According to the operating unit strategy of the six
operating companies in Japan and four overseas businessregions, the reportable segments consist of “Nissin Food
Products,” “Myojo Foods,” “Chilled and frozen foods,” “TheAmericas” and “China.” The segments of “Nissin Food

Products,” “Myojo Foods,” “The Americas” and “China” areoperating the business of manufacturing and sellingcup- and bag-type noodles. The “Chilled and frozen foods”
segment is operating the business of manufacturing andselling chilled and frozen foods.

FINANCIALSECTION
INFORMATION(b) Net sales, income or loss, assets and other items by reportable segments
Millions of yen

Year ended March 31, 2016

Net sales
Sales to third party
Intersegment sales
Total
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Investments in associates
Capital investment

Nissin Food
Products

Myojo
Foods

Chilled andfrozen foods

The
Americas

China

Subtotal

Others

Total

Reconciliations

Consolidated¥223,612
1,899
225,51123,967
157,075¥41,609
6,155
47,764
1,373
48,907¥59,810
1,555
61,365716
28,714¥48,2812
48,283
1,060
39,245¥40,884
106
40,9904,143
56,993¥414,196
9,717
423,913
31,259330,934¥53,888
26,80680,694(1,272)
117,140¥468,084
36,523504,607
29,987448,074—(36,523)(36,523)(3,587)104,995¥468,084—
468,084
26,400553,069

6,739
—
9,599

1,908
—
4,724

1,057
—
1,192

1,968
—
2,520

1,238
—
7,560

12,910—25,595

4,589
28,2507,213

17,49928,25032,808——(22)

17,49928,25032,786

Nissin Food
Products

Myojo
Foods

Chilled andfrozen foods

The
Americas

China

Subtotal

Others

Total

Reconciliations

Consolidated$1,984,487
16,8532,001,340
212,700
1,393,992$369,267
54,624
423,891
12,185434,034$530,795
13,800544,595
6,354
254,828$428,479
18
428,497
9,407
348,287$362,833
941
363,774
36,768505,795$3,675,861
86,236
3,762,097
277,4142,936,936$ 478,239
237,895
716,134(11,289)
1,039,582$4,154,100
324,1314,478,231
266,125
3,976,518$—(324,131)(324,131)(31,833)
931,798$4,154,100—
4,154,100
234,292
4,908,316

59,806—85,18816,933—
41,924

9,381—
10,57917,465—22,364

10,987—67,093

114,572—
227,148

40,726
250,71064,013

155,298
250,710291,161——(195)

155,298
250,710
290,966¥

Thousands of U.S. dollars

Year ended March 31, 2016

Net sales
Sales to third party
Intersegment sales
Total
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Investments in associates
Capital investment

Notes:
1. “Others” consists of the operating segments not included in reportable segments. It includes domestic confectionery, beverages and overseas business in Europe and Asia.
2.	Segment loss under “Reconciliations” amounted to ¥3,587 million (U.S.$31,833 thousand), consisting of ¥1,737 million (U.S.$15,415 thousand) from retirement benefit expenses, negative ¥1,144 million (U.S.$10,153 thousand) from the amortization of goodwill, negative¥4,104 million (U.S.$36,422 thousand) from group expenses and negative ¥76 million (U.S.$673 thousand) from elimination of intersegment transactions.
3. Segment income is reconciled to operating income of consolidated statements of income.
4.	Segment assets under “Reconciliations” include assets that cannot be allocated to any particular segment amounting to ¥104,995 million (U.S.$931,798 thousand). The amount mainly consists of ¥74,057 million (U.S.$657,233 thousand) of surplus investment funds,¥28,550 million (U.S.$253,372 thousand) of goodwill, and ¥2,388 million (U.S.$21,193 thousand) of other investments.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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PERFORMANCE BY
BUSINESS SEGMENT

Millions of yen

Year ended March 31, 2015

Net sales
Sales to third party
Intersegment sales
Total
Segment income (loss)
Segment assets
Other items
Depreciation and amortization
Investments in associates
Capital investment

Nissin Food
Products

Myojo
Foods

Chilled andfrozen foods

The
Americas

China

Subtotal

OthersTotal¥215,761
3,017
218,778
23,637
147,221¥39,191
4,758
43,9491,425
48,724¥56,627
1,594
58,221(204)
29,004¥35,7452
35,747662
18,334¥34,509107
34,616
3,277
52,869¥381,833
9,478
391,31128,797296,152¥ 49,742
20,50870,250(1,091)
116,303¥431,575
29,986
461,561
27,706412,455

6,734
—
6,880

1,558
—
3,289

1,174
—
828

1,431
—
1,575

1,090
—
2,966

11,987—
15,5383,453
34,0197,436

15,44034,01922,974¥

Reconciliations

Consolidated—(29,986)(29,986)(3,405)100,289¥431,575—
431,575
24,301
512,744——(14)

15,44034,01922,960SUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

Notes:
1. “Others” consists of the operating segments not included in reportable segments. It includes domestic confectionery, beverages and overseas business in Europe and Asia.
2.	Segment loss under “Reconciliations” amounted to ¥3,405 million, consisting of ¥1,099 million from retirement benefit expenses, negative ¥666 million from the amortization of goodwill, negative ¥3,901 million from group expenses and ¥63 million from elimination ofintersegment transactions.
3. Segment income is reconciled to operating income of consolidated statements of income.
4.	Segment assets under “Reconciliations” include assets that cannot be allocated to any particular segment amounting to ¥100,289 million. The amount mainly consists of ¥94,832 million of surplus investment funds, ¥702 million of goodwill, and ¥4,755 million of otherinvestments.

(c) Supplemental information
Information by product or service group
Millions of yen(Thousands of U.S. dollars)Year ended March 31, 2016

Sales to third party

Instant noodle andassociated business

Otherbusiness

Consolidated¥ 410,449($3,642,607)¥ 57,635($511,493)¥ 468,084($4,154,100)

Millions of yen

Year ended March 31, 2015

Sales to third party

Instant noodle andassociated business

Otherbusiness

Consolidated¥380,045¥51,530¥431,575

Notes:
1. Classification of the businesses is based on product types and characteristics.
2. Major products of each business:(1) Instant noodle and associated business: bag-type instant noodles, cup-type instant noodles, chilled foods and frozen foods(2) Other business: confectioneries and beverages business

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Geographical information

SUSTAINABLE
MANAGEMENT

Millions of yen(Thousands of U.S. dollars)Year ended March 31, 2016

Japan

North America

Other areas

Consolidated

Sales to third party¥ 366,724($3,254,562)¥ 48,299($428,639)¥ 53,061($470,899)¥ 468,084($4,154,100)

Property, plant and equipment¥ 129,318($1,147,657)¥ 16,775($148,873)¥ 22,793($202,281)¥ 168,886($1,498,811)

Japan

North America

Other areas

Consolidated

Sales to third party¥348,181¥35,805¥47,589¥431,575

Property, plant and equipment¥120,241¥ 8,810¥18,198¥147,249

FINANCIALSECTION
INFORMATION

Millions of yen

Year ended March 31, 2015

Note: Classification of the countries or regions is based on geographical proximity.

Information by major customer
Millions of yen(Thousands of U.S. dollars)
Sales

Main reportablesegment

Mitsubishi Corporation¥ 182,076($1,615,868)

Nissin Food
Products

ITOCHU Corporation¥ 141,735($1,257,854)

Nissin Food
Products

Year ended March 31, 2016

Millions of yen

Year ended March 31, 2015

Sales

Main reportablesegment

Mitsubishi Corporation¥168,180

Nissin Food
Products

ITOCHU Corporation¥123,594

Nissin Food
Products

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PERFORMANCE BY
BUSINESS SEGMENT

Information on loss on impairment of fixed assets by reportable segment

SUSTAINABLE
MANAGEMENT

Millions of yen(Thousands of U.S. dollars)Year ended March 31, 2016

Loss on impairment of fixed assets

Nissin Food
Products

Myojo
Foods

Chilled andfrozen foods

The
Americas

China

OthersEliminations or
corporate

Consolidated¥ 152($1,349)¥ 169($1,500)¥ 567($5,032)

¥—
($—)

¥—
($—)

¥ 205
($1,819)¥—($—)¥1,093($9,700)

FINANCIALSECTION
INFORMATION

Note: “Others” consists of the operating segments not included in reportable segments. It includes domestic confectionery, beverages and overseas business in Europe and Asia.

Millions of yen

Year ended March 31, 2015

Loss on impairment of fixed assets

Nissin Food
Products

Myojo
Foods

Chilled andfrozen foods

The
Americas

China

OthersEliminations or
corporate

Consolidated

¥137

¥658

¥141

¥—

¥405

¥3,717¥—¥5,058

Note: “Others” consists of the operating segments not included in reportable segments. It includes domestic confectionery, beverages and food service business and overseas business in Europe and Asia.

Information on goodwill by reportable segment
Millions of yen(Thousands of U.S. dollars)Nissin Food
Products

Myojo
Foods

Chilled andfrozen foods

Amortization of goodwill

¥—
($—)

¥ 398
($3,532)

¥—
($—)

¥
($

Balance of goodwill

¥—
($—)

¥ 213
($1,890)¥—($—)

Year ended March 31, 2016

The
Americas

China

OthersEliminations or
corporate

Consolidated

746
6,621)

¥—
($—)

¥—
($—)

¥—
($—)

¥ 1,144($ 10,153)¥ 28,337($251,482)

¥—
($—)

¥—
($—)

¥—
($—)

¥ 28,550($253,372)

Note: “Others” consists of the operating segments not included in reportable segments. It includes domestic confectionery, beverages and overseas business in Europe and Asia.
Millions of yen

Year ended March 31, 2015

Nissin Food
Products

Myojo
Foods

Chilled andfrozen foods

The
Americas

China

OthersEliminations or
corporate

Consolidated

Amortization of goodwill

¥—

¥398

¥—

¥45

¥—

¥223

¥—

¥666

Balance of goodwill

¥—

¥611

¥—

¥91

¥—

¥ —

¥—

¥702

Note: “Others” consists of the operating segments not included in reportable segments. It includes domestic confectionery, beverages and food service business and overseas business in Europe and Asia.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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26

RELATED PARTY
TRANSACTIONSThe Group concluded lease contracts with related parties, whose shares are wholly owned
by certain directors of the Company and their relatives. The amount of lease payments tothese companies for the years ended March 31, 2016 and 2015 was ¥417 million(U.S.$3,701 thousand) and ¥374 million, respectively, and the outstanding balance of leaseobligations and other liabilities at March 31, 2016 and 2015 was ¥76 million (U.S.$674
thousand) and ¥75 million, respectively.
The Group's subsidiary, Nissin Foods Company Limited, agrees to issue new ordinary
shares to related parties, whose shares are subscribed to Mr. Kiyotaka Ando, director of theCompany and his relatives.
The amount of subscription payments to the companies at March 31, 2016 was ¥639
million (U.S.$5,671 thousand).

27

BUSINESSCOMBINATIONSBusiness combination by acquisition
1. Summary of transaction(1) Name of acquired entity: Nissin-Ajinomoto Alimentos Do Ltda.
		 Major business of the acquired entity: Manufacture and sale of instant noodles(2) Business combination date: October 30, 2015(3) Legal form of business combination: Acquisition of entity for cash(4) Name of the entity after business combination: Nissin Foods Do Brasil Ltda.
(5)	Overview of transaction: The business combination was conducted to promote thefurther growth of business in Brazil, South America and to strengthen the operatingbase in Brazil.
(6) Change in the ratio of voting rights after the acquisition:
		 Ratio of voting rights held before the business combination: 50%
		 Ratio of additional voting rights acquired on the date of the business combination: 50%
		 Ratio of voting rights after the acquisition: 100%(7)	Basis for determining the acquirer: It is based on the fact that a subsidiary of theCompany acquired the outstanding equity not previously held by the Company forcash.

2.	The consolidated financial statements include the results of the acquired company for theperiod from October 1, 2015 to March 31, 2016. However, the results of the acquiredcompany as an equity method affiliate for the period from April 1 to September 30 were
included in the consolidated financial statements.

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

3. Cost of acquisition of the acquired company and breakdown of the consideration
Millions of yen

Thousands of
U.S. dollars

Market value of the equity held before the business combination
at the date of the business combination¥10,532$ 93,468

Cash paid for the acquisition of additional shares

32,500288,428

Cost of acquisition

43,032

381,896

4.	Difference between the cost of the acquisition of the acquired company and the sum of
the acquisition costs for transactions that have led to the acquisition of the company
Gain on step acquisitions: ¥6,641 million (U.S.$58,937 thousand)5. Content and amount of major acquisition-related expenses
Compensation and fees, etc. for financial advisory: ¥7 million (U.S.$62 thousand)Compensation and fees, etc. to the lawyer: ¥13 million (U.S.$115 thousand)
6.	Goodwill incurred, the reasons for the goodwill, the method for amortizing goodwill, andthe period for the amortization of goodwill(1) Amount of goodwill:		 917 million Brazilian real (¥28,935 million/U.S.$256,789 thousand)		The tentative amount stated in the previous financial statements was revised due to thesettlement of accounting transactions.
(2) Reason for goodwill:		Goodwill was incurred in association with the expected excess earnings power after
the business combination.
(3) Method and period for the amortization of goodwill
		 Straight-line method over 20 years

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7.	Amount and breakdown of assets acquired and liabilities assumed on the date of thebusiness combination
Millions of yen

Thousands of
U.S. dollars

Current assets¥ 5,467$ 48,518

Fixed assets

15,460137,203

Total assets

20,927

185,721

Current liabilities

3,815

33,857Long-term liabilities

3,015

26,757

Total liabilities

6,830

60,614PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATION

8.	Estimated amount of the impact of the business combination on the consolidated
statement of income on the assumption that it has been completed on thecommencement date of the consolidated fiscal year and its calculation method (unaudited)
Net sales: ¥13,442 million (U.S.$119,294 thousand)Operating income: ¥25 million (U.S.$222 thousand)Ordinary loss: ¥250 million (U.S.$2,219 thousand)Net loss attributable to owners of the parent: ¥584 million (U.S.$5,183 thousand)(Calculation method of amount of impact)
The difference between the following matters is regarded as the estimated amount of the
impact.
- Net sales and profits and losses calculated on the assumption that the business combination
has been completed on the commencement date of the consolidated fiscal year.
- Net sales and profits and losses on the consolidated statement of income of the acquiredcompany.

28

SUBSEQUENTEVENTS

The following distribution of retained earnings of the Company, which has not been reflectedin the accompanying consolidated financial statements for the year ended March 31, 2016,
was approved at the meeting of the shareholders of the Company held on June 28, 2016:

Cash dividends (¥40=U.S.$0.35 per share)

Millions of yen

Thousands of
U.S. dollars¥4,321$38,348NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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BUSINESS SEGMENTSUSTAINABLE
MANAGEMENTFINANCIALSECTION
INFORMATIONNISSIN FOODS HOLDINGS ANNUAL REPORT 2016

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BUSINESS SEGMENT

BUSINESS AREAS OF CONSOLIDATED SUBSIDIARIES AND ASSOCIATES
As of March 31, 2016SUSTAINABLE
MANAGEMENT
Company

CapitalBusiness Area

Equity Ownership (%)

CONSOLIDATED SUBSIDIARIESINFORMATIONNISSIN FOOD PRODUCTS CO., LTD.

¥5,000 million

Instant noodle manufacturing and marketing

100.0

MYOJO FOODS CO., LTD.

¥3,143 million

Instant noodle manufacturing and marketing

100.0

NISSIN CHILLED FOODS CO., LTD.

¥100 million

Chilled food manufacturing and marketing

100.0

NISSIN FROZEN FOODS CO., LTD.

¥100 million

Frozen food manufacturing and marketing

100.0

NISSIN CISCO CO., LTD.

¥2,600 million

Confectionery manufacturing and marketing

100.0

NISSIN YORK CO., LTD.

¥870 million

Beverage and dairy product manufacturing and marketing

100.0

NISSIN ASSET MANAGEMENT CO., LTD.

¥50 million

Real estate and leasing management

100.0

Sapporo Nissin Co., Ltd.

¥250 million

Instant noodle manufacturing and marketing

100.0 (100.0)

Nissin Plastics Co., Ltd.

¥450 million

Container manufacturing and marketing

100.0 (100.0)

NISSIN F.D. FOODS CO., LTD.

¥100 million

Ingredient manufacturing and marketing

100.0 (100.0)

Kagawa Nissin Food Products Co., Ltd.

¥100 million

Ingredient manufacturing and marketing

100.0 (100.0)

Nissin Enterprise Corporation¥300 million

Shipping and warehousing

100.0 (100.0)

AJINIHON CO., LTD.

¥95 million

Soup manufacturing and marketing

47.5 (47.5)

NISHINIHON MYOJO CO., LTD.

¥90 million

Instant noodle manufacturing and marketing

100.0 (100.0)

UNI-STAR CO., LTD.

¥150 million

Soup manufacturing and marketing

100.0 (100.0)

HIGASHINIHON MYOJO CO., LTD.

¥90 million

Instant noodle manufacturing and marketing

100.0 (100.0)

Saitama Nissin Food Products Co., Ltd.

¥30 million

Chilled and frozen food manufacturing and marketing

100.0 (100.0)

SAGAMI FRESH CO., LTD.

¥400 million

Chilled food manufacturing and marketing

100.0 (100.0)

Shikoku Nissin Food Products Co., Ltd.

¥98 million

Frozen food manufacturing and marketing

100.0 (100.0)

Takamatsu Nissin Food Products Co., Ltd.

¥80 million

Frozen food manufacturing and marketing

100.0 (100.0)

Mie Nissin Food Products Co., Ltd.

¥100 million

Frozen food manufacturing and marketing

100.0 (100.0)

Circle Liners Co., Ltd.

¥50 million

Shipping and warehousing

100.0 (100.0)

NICKY FOODS CO., LTD.

¥60 million

Frozen food manufacturing and marketing

100.0 (100.0)

UJI KAIHATSU DEVELOPMENT CO., LTD.

¥100 million

Golf course management

98.3

NISSIN NETCOM CO., LTD.

¥24 million

Real estate and restaurant management

100.0

Bonchi Co., Ltd.
NISSIN FOODS (U.S.A.) CO., INC.
MYOJO U.S.A., INC.
NISSIN FOODS DE MEXICO S.A. DE C.V.
NISSIN FOODS DE COLOMBIA S.A.S.
NISSIN TECHNOLOGY ALIMENTOS DO BRASIL LTDA.
NISSIN FOODS DO BRASIL LTDA.

FINANCIALSECTION¥160 million

Confectionery manufacturing and marketing

50.1

U.S.$149,706 thousand

Instant noodle manufacturing and marketing

94.4

U.S.$5,000 thousand

Chilled food manufacturing and marketing

96.0

MXN 215,191 thousand

Instant noodle manufacturing and marketing

100.0

COP 5,748 million(0.4)

Instant noodle marketing

100.0

BRL 1,038,577 thousand

Technological support of food manufacturing

100.0

BRL 12,688 thousand

Instant noodle manufacturing and marketing

100.0 (50.0)

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

69

BACK TO CONTENTSPROLOGUE
GRAPHSTO ALLSTAKEHOLDERS
FOCUS

PERFORMANCE BY
BUSINESS SEGMENTSUSTAINABLE
MANAGEMENT
Company

CapitalBusiness Area

Equity Ownership (%)

CONSOLIDATED SUBSIDIARIESNISSIN FOODS CO., LTD.
WINNER FOOD PRODUCTS LTD.
NISSIN FOODS (HK) MANAGEMENT CO., LTD.
NISSIN FOODS (CHINA) HOLDING CO., LTD.

INFORMATION

HK$2,030,685 thousand
HK$29,975 thousand
HK$200
CNY 1,443,797 thousand

Instant noodle manufacturing and marketing

98.5

Instant noodle and frozen food manufacturing and marketing

98.5 (98.5)

Intergroup business support

98.5 (98.5)

Invests in businesses in China

98.5 (98.5)

SHANGHAI NISSIN FOODS CO., LTD.

U.S.$44,000 thousand

Instant noodle manufacturing and marketing

98.5 (98.5)

GUANGDONG SHUNDE NISSIN FOODS CO., LTD.

HK$130,000 thousand

Instant noodle manufacturing and marketing

98.5 (98.5)

DONGGUAN NISSIN PACKAGE CO., LTD.

CNY 147,000 thousand

Instant noodle package manufacturing

98.5 (98.5)

Nissin Koikeya Foods (China & HK) Co., Ltd.

HK$10,000 thousand

Confectionery marketing

65.0 (65.0)

CNY 235,000 thousand

Instant noodle manufacturing and marketing

98.5 (98.5)

ZHUHAI GOLDEN COAST WINNER FOOD PRODUCTS LTD.

HK$84,000 thousand

Instant noodle manufacturing and marketing

69.4 (69.4)

GUANGYOUGNAN FOOD PRODUCTS (SHENZHEN) CO., LTD.

HK$11,000 thousand

Frozen food manufacturing and marketing

98.5 (98.5)

CNY 245,000 thousand

Instant noodle manufacturing and marketing

98.5 (98.5)

FUJIAN NISSIN FOODS CO., LTD.

ZHEJIANG NISSIN FOODS CO., LTD.
NISSIN FOODS (H.K.) CO., LTD.

HK$10,000 thousand

Instant noodle marketing

98.5 (98.5)

NISSIN FOODS (ASIA) PTE. LTD.

SG$272,959 thousand

Supervising Asian business

100.0
66.0 (66.0)

NISSIN FOODS SINGAPORE PTE, LTD.

SG$20,989 thousand

Instant noodle manufacturing and marketing

INDO NISSIN FOODS PRIVATE LTD.

INR 2,650,000 thousand

Instant noodle manufacturing and marketing

99.4 (99.4)

Instant noodle marketing

100.0 (100.0)

Instant noodle manufacturing and marketing

100.0

Instant noodle marketing

100.0 (99.0)

NISSIN FOODS INDIA LTD.
Nissin Foods Kft.

INR 500 thousand
HUF 1,000,000 thousand

Nissin Foods GmbHFINANCIALSECTIONEUR 25 thousand

NISSIN YILDIZ GIDA SANAYI VE TICARET A.S.

TRY 99,625 thousand

Pasta and instant noodle manufacturing and marketing

50.0

NISSIN FOODS VIETNAM CO., LTD.

U.S.$54,330 thousand

Instant noodle manufacturing and marketing

100.0 (100.0)

NISSIN FOODS (THAILAND) CO., LTD.

THB 2,618,672 thousand

Instant noodle manufacturing and marketing

66.0 (66.0)

THB 180,000 thousand

Instant noodle manufacturing and marketing

21.1

Holding company of instant noodle businesses

33.5

PHP 189,000 thousand

Instant noodle manufacturing and marketing

49.0¥2,269 million

Confectionery manufacturing and marketing

34.5

ASSOCIATES ACCOUNTED FOR BY THE EQUITY METHODTHAI PRESIDENT FOODS PUBLIC COMPANY LIMITEDMAREVEN FOOD HOLDINGS LIMITEDNISSIN-UNIVERSAL ROBINA CORP.
Frente Co., Ltd.
Note: The figures in (RUB 398 thousand) of equity ownership show percentage of indirect ownership.

NISSIN FOODS HOLDINGS ANNUAL REPORT 2016

70

BACK TO CONTENTSINVESTOR INFORMATIONPROLOGUENISSIN FOODS HOLDINGS CO., LTD.
As of March 31, 2016 (U.S.$1=¥112.68)

GRAPHSTO ALLSTAKEHOLDERS
FOCUS

PERFORMANCE BY
BUSINESS SEGMENT

DISTRIBUTION OF OWNERSHIP AMONG SHAREHOLDERS
Date of Establishment

September 1948

Number of Employees

681 (parent company)
11,200 (consolidated basis)

Common Stock

Authorized: 500,000,000 shares
Issued: 117,463,685 shares
Number of Shareholders: 49,824 (Excluding owners of odd-lot shares)

Paid-in Capital¥25,123 million ($223 million)

Stock Listings

Tokyo Stock Exchange (Ticker Code: 2897)

Independent Auditors

Deloitte Touche Tohmatsu LLC

Transfer Agent

Mizuho Trust & Banking Co., Ltd.
2-1, Yaesu 1-chome, Chuo-ku, Tokyo, Japann Financial Institutions

25.97%n Foreign Corporations

17.19%FINANCIALSECTIONn Individuals and Other

12.12%INFORMATIONn Treasury Stock

8.04%

Number of Shares Held(Thousands)

Name

2012

2013

2014

2015

2016

Net income attributable to owners ofparent per share (EPS)¥167.97¥171.12¥174.83¥167.88¥245.52

Equity (book-value) per share (BPS)¥2,545.31¥2,782.25¥3,018.82¥3,282.02¥3,332.94

Price earnings ratio (PER) (Times)

18.4

25.6

26.6

35.2

21.5

Price-to-book ratio (PBR) (Times)

1.2

1.6

1.5

1.8

1.6

¥75.00¥75.00¥75.00¥75.00¥80.00

Dividend

36.68%

PRINCIPAL SHAREHOLDERSCONSOLIDATED PER SHARE DATA
Years ended March 31,

SUSTAINABLE
MANAGEMENTn Other Corporations

Payout ratio (%)

44.70

43.80

42.90

44.67

32.58

Share price: High¥3,195¥4,385¥4,735¥6,620¥6,620Low¥2,812¥2,824¥3,550¥4,510¥5,110Notes: 1.	From the fiscal year ended March 31, 2008, number of issued shares excludes the numbers of treasury stocks at
term-end.
2.	Equity per share = (Equity - Minority interests - Stock acquisition rights) / Number of shares outstanding as of theyear-end (excluding treasury stock)
3. Price-to-book ratio are calculated based on the share price at year-end.

Percentage of Total
Shares Outstanding

Ando Foundation

7,904

6.72%

Mitsubishi Corporation

7,800

6.64

ITOCHU Corporation

5,400

4.59

State Street Bank and Trust Company

4,445

3.78

Ando International Y.K.

3,946

3.35

Mizuho Bank, Ltd.

3,375

2.87

Japan Trustee Services Bank, Ltd. (Account in Trust)

3,080

2.62

The Bank of Tokyo-Mitsubishi UFJ, Ltd.

2,629

2.23

The Master Trust Bank of Japan, Ltd. (Account in Trust)

2,560

2.17

ONO PHARMACEUTICAL CO., LTD.

2,460

2.09

Total

43,59937.11

Note: In addition to the above, the Company holds 9,438,151 shares of treasury stock.

SHARE PRICE RANGE AND TRADING VOLUME ON TSE
7,000

(Yen)

(Thousands of share)

12,000Share Price (Left)
5,250

9,000

Trading Volume (Right)

3,500

6,000

1,750

3,000

FURTHER INFORMATION
For further information, please contact: IR OFFICE, Finance Platform
Tel: 81-3-3205-5027 Fax: 81-3-3205-5179
Regularly updated IR information in English is also available on NISSIN FOODS HOLDINGS website at
http://nissin.com/en_jp/ir/

0

4
2015

5

6

7

8

9

10

11

12

1
2016

2

3

4

5

6

0

NISSIN FOODS HOLDINGS ANNUAL REPORT 201671

About this Report
In keeping with the “integrated thinking” concept advocated by the International Integrated Reporting
Committee (IIRC), to give shareholders, investors, andall other stakeholders a comprehensive picture of theNISSIN FOODS Group and our vision for the future, in
ANNUAL REPORT 2016 we report not only the Group’sbusiness results and other financial information, butalso non-financial information such as the Group philosophy, governance, risk information, food safety measures, human resource initiatives, and environmental andsocial activities.
We have also tried to express in this report four
attributes that we traditionally value as a Group: unique,happy, global, and creative.

Forward-looking Statement
This report contains forward-looking statements regarding the Company’s plans, outlook, strategies and results
for the future that are based on management’s estimates, assumptions and projections at the time of publication. Certain risks and uncertainties could cause theCompany’s actual results to differ materially from any
projections presented in this report. These risks anduncertainties include, but are not limited to, the domestic and international economic circumstances surrounding the Company’s businesses, competitive activity,
related laws and regulations, product development programs and exchange fluctuations.

NISSIN FOODS HOLDINGS CO., LTD.
Head OfficeOsaka Head Office

WebsiteResearch Institutes

28-1, 6-chome, Shinjuku, Shinjuku-ku

1-1, 4-chome, Nishinakajima, Yodogawa-ku

http://nissin.com/en_jp/

NISSIN Global Innovation CenterTokyo 160-8524, Japan

Osaka 532-8524, JapanNISSIN Global Food Safety InstituteTelephone: 81-3-3205-5111

Telephone: 81-6-6305-7711

FOOD SAFETY EVALUATION RESEARCH INSTITUTE CO., LTD. (Shanghai)

Fax: 81-3-3205-5059

Fax: 81-6-6304-1288
Original Release: September 2016

Updated: April 2017