Artnature Project Profile

Name of the Company: ARTNATURE BANGLADESH LTD. Contact Person: Mr. TAKANORI HAGIWARA Designation: Managing Director Mobile No.: +639171487084 +8801322556320 Email: t-hagiwara@artnature.co.jp Website: https://www.artnature.co.jp/ Address: Lot No. C16, Bangladesh Special Economic Zone (BSEZ), Sonpara, Panchrukhi Via Rupganj, Araihazar, Narayanganj, PO : 1460, Bangladesh ARTNATURE BANGLADESH LTD. Company Profile P a g e 1 | 25 ARTNATURE BANGLADESH LTD. Table of Contents 1. Project Summary ............................................................................................................................. 2 2.Scope of work ................................................................................................................................... 2 3. Company Overview ......................................................................................................................... 3 4. Management Philosophy .................................................................................................................. 3 5. History of the company .................................................................................................................... 4 6. Share Capital with Shareholding Structure ..................................................................................... 9 7. Board of Directors ......................................................................................................................... 10 8. Details of Auditor and Bankers .......................................................................................................11 9. Project Timeline ..............................................................................................................................11 10. Project Budget ..............................................................................................................................11 11. Project Team .................................................................................................................................11 12. Business & Products .................................................................................................................... 12 15. List of Raw Materials: .................................................................................................................... 14 16. List of machineries ....................................................................................................................... 15 17. Production process ....................................................................................................................... 16 18. Risk Assessment ........................................................................................................................... 17 19. Environmental and Sustainability Impact .................................................................................... 19 20. Stakeholder Engagement ............................................................................................................. 20 21. Project Benefit ............................................................................................................................. 23 23. Global Networks .......................................................................................................................... 24 24. Contact Information .................................................................................................................... 25 P a g e 2 | 25 ARTNATURE BANGLADESH LTD. 1. Project Summary Name of the Company: ARTNATURE BANGLADESH LTD. RJSC Registration Number : No. C-193306/2024 RJSC Registration D ate: 28/01/2024 TIN No: 676216618576 Address : Lot No. C16, Bangladesh Special Economic Zone (BSEZ), Sonpara, Panchrukhi Via Rupganj Araihazar, Narayanganj Background of establishment : We had considered outsourcing the manufacturing of custom products to an existing contractor in Bangladesh. However, it would take time to reach a production level, and the estimated price would be 1.5 to 2 times that of our own factory due to an increase in manufacturing expenses. Considering the fact that the factory is located in the general commercial district of Bangladesh, and the infrastructure facilities are weak, we determined that it would be difficult to diversify the risk of custom products through outsourced production, and came to the conclusion that it would be better to establish our own factory. Future prospects : We plan to construct a factory in Bangladesh, matching the size of ARTNATURE MANUFACTURING PHILIPPINES INC., which is a production subsidiary of the Artnature Group situated in the Republic of the Philippines. Our goal is to establish this as our group's second-largest production base. 2.Scope of work To engage in, operate, conduct and maintain the business as a manufacturer, processor, exporter, importer, wholesale and otherwise dealing with hairpieces such as toupees, wigs, wiglets, and the like including hair accessories and ornaments, all makes and kinds as well as any and all materials, including human hair and synthetic hair, supplies, machines, tools and equipment products or related to the manufacture of the said products or merchandise and to engage in the manufacture, research and development or modular hair prosthesis of high technology. To purchase, acquire, own, lease, sell and convey real properties such as buildings, factories and warehouses and machineries, equipment and other personal properties as may be necessary or incidental to the conduct of the corporate business, and to pay in cash, shares of the capital stock, debentures and other evidences of indebtedness, or other securities, as may be deemed expedient, for any business or P a g e 3 | 25 ARTNATURE BANGLADESH LTD. property acquired by the corporation. To set up a factory, mills, and manufacturing plant, for export, deemed export, and domestic sales, and to set up buying house, bonded warehouse in Bangladesh as well as to carry on the business of operating a bonded warehouse facility for as toupees, wigs, wiglets, and the like including hair accessories and ornaments. To provide warehousing services for as toupees, wigs, wiglets, and the like including hair accessories and ornaments, including storage, handling, labeling, and inventory management, in compliance with applicable laws and regulations. To offer value-added services such as blending, repackaging, and quality testing within the bonded warehouse facility. Conduct research on new and emerging technologies in the field of toupees, wigs, wiglets, hair accessories and ornaments, and all materials, including human hair and synthetic hair, hair care goods, and medicine. Establish research laboratory for R & D and innovation. Develop a new line of fashion product that meet the needs of the global market. 3. Company Overview Bangladesh has a large population (170 million people), an abundance of young workers (approximately 50% of the total population is under the age of 25), and a populace known for its serious, hardworking, and pro-Japanese national character. To leverage this pool of human resources, we aim to generate around 1,000 jobs essential for factory operations. Additionally, we have established partnerships with outsourced business associates, enabling us to foster cooperative relationships with them. Moreover, Japan will actively capitalize on the benefits of trade by leveraging its geographical advantage. 4. Management Philosophy Your best smile is what we want. Since its founding in 1965, ARTNATURE INC. has been the leader in the industry as Japan's first comprehensive hair solutions company. Today, our extensive services—including the highest-quality custom-made wigs, hair addition products, hair growth care & services, and barber and beauty services— are ready to meet all kinds of hair-related needs. ARTNATURE regards its mission as providing people of both genders with hair problems with the best possible solutions appropriate for their characteristics, thus offering more beautiful and brilliant lifestyles. Customer needs relating to hair are expected to become more diverse and sophisticated in the future. As a comprehensive hair consultancy, ARTNATURE will continue striving to create a global hair culture by P a g e 4 | 25 ARTNATURE BANGLADESH LTD. leveraging its three strengths—namely its product development capabilities, technical abilities, and customer service. We will continuously support positive ways of life for customers, in line with our motto of “Your best smile is what we want.” Management Principles • Our mission as a hair consultant is to foster a culture of hair that satisfies customers. • We provide people with opportunities to make their lives more positive, brighter and beautiful. • We provide products and services of the very best quality through our global network. • We constantly strive to enhance the status of the hair industry and become a company that is trusted by society. 5. History of the company ARTNATURE’s history is one of continual endeavor and continual evolution toward fulfilling our mission of making people happy through hair. It is a history of tradition and pride as a pioneer that has made repeated innovations while staying focused on hair. 1965 Founded ARTNATURE as a sole proprietorship in April. 1967 Established ARTNATURE INC. （ capitalized at １ million yen ） 1973 Launched Triple Hair Addition System, the original staged hair addition method. 1983 Developed synthetic hair Artron. 1984 Launched MRP, a ground － breaking hair addition system that uses no base material. 1987 Began foray into market for women. Announced Ladies Artnature. 1991 Established the Product Distribution Center in Murakami, Niigata as the domestic distribution base. 1995 Opened the Hair Academy hair specialist training school. 1998 Started the Little Wing Works program to provide free wigs to children with hair problems. P a g e 5 | 25 ARTNATURE BANGLADESH LTD. 2001 Started an online hair counseling service. Opened ARTNATURE Mobile, the mobile website. 2003 Launched hair revolution Hair For Life （ HFL ） . 2005 Launched Celaire, a ladies wig in a new era. Launched Scalp and Hair Care System, a hair growth system. 2007 Made an initial public offering on the JASDAQ market. 2008 Started supporting the Pink Ribbon awareness campaign for breast cancer screening. Launched the Jullia Olger brand of ready － made ladies wigs. 2009 Began operations at a new plant in the Philippines （ ANMP ） . Launched Primadonna ladies wigs. 2010 Opened online shopping site ARTNATURE Online. Launched Hair For Life Nuda men’s wigs. Launched Nudefine ladies wigs. Launched new male wig product line, Hair For Life EXE Launched new female wig brand, PREMA MOEMI Established wholly-owned subsidiary, MJO INC., offering male ready-made wig 2011 Launched new hair addition system, MARP nature Launched new female wig product line, Nude fine Plus Launched new male wig product line, Hair For Life Nuda PREMIUM P a g e 6 | 25 ARTNATURE BANGLADESH LTD. Launched new female wig product line, Nude fine Magic Launched new hair addition system, MARP cross Established wholly-owned subsidiary, ARTNATURE(SHANGHAI) INC., marketing subsidiary in China 2012 Launched ASHITABA DE TSUKUTTA OISHII AOJIRU, vegetable juice approved as Foods for Specified Health Uses Launched new hair addition system, MARP sonic Launched new female wig product line, Nude fine Clear Launched new hair growth system, Scalp Hair Care System Four Seasons Program Established wholly-owned subsidiary, ANTOMONOKAI INC., reserved fund for wig purchase Launched new female wig product line, Nude fine Catch Launched new hair addition product, REQUA Established wholly-owned subsidiary, ARTNATURE SINGAPORE PTE. LTD. (ANSG), marketing subsidiary in Singapore 2013 Launched new hair addition system, MARP mach Launched new female wig product line, Nude fine Keep Launched new scalp care product, LABOMO SCALP AROMA Launched new female wig product line, Nude fine Pitato P a g e 7 | 25 ARTNATURE BANGLADESH LTD. Launched new male wig product line, Hair For Life Seed Listed on TSE(first section) Launched new hair foundation product, ARTMICRON pluvi 2014 Established wholly-owned subsidiary, ARTNATURE(CAMBODIA) INC. (ANKH), wig manufacturer Launched new female wig brand, forte Launched new hair addition system, Mrping Launched new type of shop marie beaute, exclusive for department store channel Launched new hair care product, ASWILL HAIR COMPASS TREATMENT Launched new female wig product line, forte charm Launched new male hair addition product, RAPIDA Acquired MIKAWAYA INC., providing wigs for entertainment field Established wholly-owned subsidiary, ARTNATURE MALAYSIA SDN. BHD. (ANMY), marketing subsidiary in Malaysia 2015 Launched new male hair addition product line, RAPIDA Royal Launched new female wig line, Forte ROZA Began operations at a new plant in Cambodia (ANKH) Launched new female wig line, Forte ROZA Airy P a g e 8 | 25 ARTNATURE BANGLADESH LTD. Launched new female wig line, Forte Fuwari Nadeshiko Lunched new male hair addition product line, MRP Live Lunched new scalp care product, LABOMO SCALP AROMA HAIR COLOR TREATMENT Lunched new eyelash serum, ART LASH SERUM RICH 2016 Lunched new male hair addition product line, RAPIDA Revo Launched new female wig line, Forte Fuwari Nadeshiko La La Lunched new female hair addition product line, Beauty Up Launched new female wig line, Forte Fuwari Nadeshiko La La Beaute Launched new male hair addition system, 4DM 2017 Launched new male hair addition system, 4Dα Launched new male hair addition product line, REQUA 50 Launched new male wig product line, Hair For Life 50 Launched new female wig product line, Style La La 2018 Launched Sarara, a wig from Jullia Olger inspired by the characteristics of Japanese paper. 2019 Released an official ARTNATURE Online Shop app. Acquired shares of NAO-ART Co., Ltd., a manufacturer and distributor of ladies’ wigs. P a g e 9 | 25 ARTNATURE BANGLADESH LTD. Opened a flagship store on Tmall Global, a Chinese e-commerce site. Launched LABOMO Hair Grow Minoxi 5, a hair growth stimulant for men. 2020 Launched LABOMO Hair Grow Hanaminoxi, a hair growth stimulant for women. 2021 Invested in Think-Lands Co., Ltd. Began supplying hair growth products to Hairology, one of China's largest head spa salons. Launched Feelin, a custom-made wig for women that is not held in place with pins. Launched MRP Wonder, a new hair extension product with a new hair-volumizing method with binding. Introduced an AI automated response system at the customer center. 2022 Introduced the industry’s first portable 3-D scanner (head shape measurement device). Developed the world’s first automatic wig hair transplanter. Moved to the Prime Market of the Tokyo Stock Exchange. 2023 Moved to the Standard Market of the Tokyo Stock Exchange Launched. New male hair addition product line, REQUA PHANTOM. 2024 Established foreign owned subsidiary, ARTNATURE BANGLADESH LTD 6. Share Capital with Shareholding Structure Paid-up capital : BDT 266,000,000.00 Authorized capital : BDT 2,203,420,000.00 P a g e 10 | 25 ARTNATURE BANGLADESH LTD. Shareholders • ARTNATURE INC • ARTNATURE MANUFACTURING PHILIPPINES INC. Number of shares : 2,660,000 Ratio : • ARTNATURE INC 2,633,400 [99 ％ ] • ARTNATURE MANUFACTURING PHILIPPINES INC. 26,600 [1 ％ ] 7. Board of Directors Mr. Yoshikata Igarashi Japanese Chairman Mr. Hisayuki Kawazoe Japanese Director Mr. Takanori Hagiwara Japanese Managing Director Mr. Takashi Uchida Japanese Director P a g e 11 | 25 ARTNATURE BANGLADESH LTD. 8. Details of Auditor and Bankers Audit corporation : Ernst & Young Advisory Services Bangladesh Ltd Bank: Prime Bank PLC 9. Project Timeline 1. Soil Investigation Dec-18 2023 ～ Jan-31 2024 (±3 month ） 2. Building Design Mar-15 2024 ～ Jul-15 2024 (±3 month ） 3. Construction Nov-1 2024 ～ Aug-31 2025 （ ±3 month ） 4. Inspection Sep-1 2025 ～ Sep-30 2025 （ ±3 month ） 10. Project Budget 11. Project Team 1st year 2nd year 3rd year 4th year 5th year Foreign 3 4 4 4 4 Local 72 398 792 1,103 1,326 Total 75 402 796 1,107 1,330 (Unit : $1000) 1 year 2 year 3 year 4 year 5 year 1 Sales 1,475 3,067 5,259 8,581 12,754 2 Cost of Sales 3,914 5,869 7,878 9,968 11,502 3 Gross Profit -2,439 -2,802 -2,619 -1,387 1,252 4 Operating Expenses 74 153 263 429 638 5 Operating Income -2,513 -2,955 -2,882 -1,816 614 P a g e 12 | 25 ARTNATURE BANGLADESH LTD. 12. Business & Products (Current Product offered by ARTNATURE BANGLADESH LTD.) 【 Order Made Wig 】 Our primary product, Order Made Wig, are tailored to each customer's unique characteristics, including head shape, parting and curl positioning, and the proportion of gray hair. ●Products for men The general shape is a structure designed to cover thinning hair from the hairline. As for the wearing method, the graffiti method, which was inspired by professional makeup techniques, makes it possible to achieve an outstanding fit and natural appearance. ●Products for women There are various shapes. Many products make use of women's own hair, and because they are not necessarily worn all the time, many products have features such as "lightness" and "fluffiness". 【 Hair Extension Products 】 Hair extension products, which are the second most popular product after Order Made Wig, are not worn on the head like wigs, but can grow the amount of hair in the desired areas according to the individual's hair condition. P a g e 13 | 25 ARTNATURE BANGLADESH LTD. ●Product features Since the hair is increased by attaching synthetic hair to natural hair, you can choose between 2 and 10 synthetic hairs for each natural hair. In addition, each product has a variety of features, such as an adjustment function that returns the hair growth position to the root even if the tied natural hair grows out, and a part of the artificial hair that is processed to be thinner to make the knots less noticeable. ●Sales features Since this product is targeted at people who have relatively natural hair, it is easy to introduce to new users. Additionally, many of our customers are switching to Order Made Wig that can cover a wider head area. 14. Raw Material List P a g e 14 | 25 ARTNATURE BANGLADESH LTD. 15. List of Raw Materials: MODEL NAME DIRECT/ INDIREC T MATERIAL DESCRIPTION USAGE/PURPOSE UOM CONSUM PTION /PRODUC T AMOUNT (USD) ANCS DIRECT #2070 NET DBR (#20) BASE NET(Body) SQM 1.58 16.81 ANCS DIRECT SJ-13 140D6NET#4 (FLS) BASE NET(NAPE/TEMPLE) SQM 0.09 0.41 ANCS DIRECT SJ-58 SUPER FINE MONO PARTING NET SQM 0.06 0.34 ANCS DIRECT SJ 66 DOUBLE SHA NET PARTING NET SQM 0.06 0.45 ANCS DIRECT SJ-110 NYLONTAPE7MMFLS METAL STRIP COVER M 0.14 0.01 ANCS DIRECT NT4 ELASTIC WED(BRN) GARTER RIBBON M 0.08 0.01 ANCS DIRECT SJ-226-1NEW"S"HOOK BLK GARTER HOLDER PC 2.00 0.01 ANCS DIRECT TAG WITH RED THREAD LABEL PC 1.00 0.08 ANCS INDIRECT HALLANATE PM-200 HARD MOLD MAKING PER CUSTOMER KG 0.40 3.62 ANCS INDIRECT HALLAPOL WM-250 HARD MOLD MAKING PER CUSTOMER KG 0.32 2.79 ANCS INDIRECT PLASTIC ACETATE RB0.50 PLASTIC MOLD USE FOR SHIPMENT PER CUSTOMER ROLL 0.004 1.16 ANCS INDIRECT PLASTIC ACETATE RB0.40 PLASTIC MOLD USE FOR INTERNAL PROCESS TRANSFER PER CUSTOMER ROLL 0.002 0.70 HFL SERGIO DIRECT AQP2359-120 - FLSA BASENET(BODY) SQM 0.11 2.50 HFL SERGIO DIRECT PE001 FLS B NET BASENET(PERIMETER) SQM 0.18 3.38 HFL SERGIO DIRECT ESMER (Z1700205) YEW FRONT DSS PC 0.12 0.45 HFL SERGIO DIRECT NETTN2370 NY100%20DFLS MT TAB SQM 0.01 0.19 HFL SERGIO INDIRECT HALLANATE PM-200 HARD MOLD MAKING PER CUSTOMER KG 0.40 3.62 HFL SERGIO INDIRECT HALLAPOL WM-250 HARD MOLD MAKING PER CUSTOMER KG 0.32 2.79 HFL SERGIO INDIRECT A-KIGATAME ACE 960G CHEMICAL OF MAKING A CONTOUR FOR NET CAN 0.01 2.02 HFL SERGIO INDIRECT PLASTIC ACETATE RB0.50 PLASTIC MOLD USE FOR SHIPMENT PER CUSTOMER ROLL 0.004 1.16 HFL SERGIO INDIRECT PLASTIC ACETATE RB0.40 PLASTIC MOLD USE FOR INTERNAL PROCESS TRANSFER PER CUSTOMER ROLL 0.002 0.70 P a g e 15 | 25 ARTNATURE BANGLADESH LTD. 16. List of machineries Description Purpose Country of origin Name of vender Value (USD) Picture GENSET For continuation of production during blackout Japan SHIMIZU CORPORATION 126,800 Oven Make a curl for fiber by heating Japan TAKAYAMARIK ASEIKI 75,000 sewing machine Use a sewing machine to join materials together Bangladesh JUKI BANGLADESH LTD 36,700 Laser printer Print a identification number to attach on product Japan KEYENCE CORPORATION 74,400 3D milling machine Make a mold of customer Japan YAMAZEN, INC 455,733 P a g e 16 | 25 ARTNATURE BANGLADESH LTD. 17. Production process 3D PPC ORDER PROCESSING Material Issuance Color Selector Mould Blending CAP WICS (Work Instruction Control Section) IR ( Issue Room) VENTILATION A P a g e 17 | 25 ARTNATURE BANGLADESH LTD. 18. Risk Assessment • As consumer needs, trends, preferences, and purchasing behavior change, market risks such as a slumpin the overall market and growth in adjacent markets are changing from moment to moment. Failure to adapt to these changes could impact our performance. • The Japanese hair care market, encompassing the hair industry, hair transplant, hair growth products, hair care products, is experiencing an increase in pharmaceutical sales, AGA clinics, etc. due to the growing demand for hair growth, coupled with increased e-commerce purchases. Other industries are increasingly entering the market. The market size of the hair industry to which our group belongs is gradually decreasing, and as a result, competition may intensify not only with other companies in the same industry but also with other industries. Furthermore, if competitors in the same or different industries release competitive new products, or if price competition becomes even more intense, the Group's business performance may be affected. Countermeasure: • Continually enhance customer satisfaction by leveraging the strengths of our integrated manufacturing and sales business model, meticulous understanding customer needs, And quickly introducing competitive new products and services to the market. A PPC-Receiving Finishing Hair Length Coating Styling Edge Final QC P a g e 18 | 25 ARTNATURE BANGLADESH LTD. • We actively monitor economic fluctuations, social conditions, market trends, consumer needs, trends at other companies, etc. in a timely and appropriate manner, and reflect them in organizational and system reviews, product development, sales strategies, sales promotional measures, etc. In particular, when periodically reviewing business plans such as medium-term management plans and annual business plans, we endeavor to formulate strategies that accurately capture the impact of the external environment. F inancial risk : • For globally operating companies, fluctuations in interest rates and foreign exchange rates can have a significant impact on business performance. • The majority of our production activities are carried out outside of Japan including our manufacturing base in the Philippines and at manufacturing subcontractors in China and other Asian regions, so manufacturing costs and product procurement prices are affected by exchange rate fluctuations in our business operations. • The local currency denominated business results and property status of overseas manufacturing bases are affected by exchange rate fluctuations in each fiscal year. Products procured from manufacturing subcontractors in Asia, such as China, are denominated in foreign currencies, and product purchasing prices are affected by exchange rate fluctuations. C ountermeasure: • The head office comprehends and manages the conversion effects on manufacturing costs due to exchange rate fluctuations in imports and exports with overseas manufacturing bases. • Additionally, when purchasing from manufacturing subcontractors, rather than making spot payments, we continually purchase foreign currency equivalent to several months' worth of payments in advance to mitigate the impact of sudden exchange rate fluctuation risks. S upply chain risk : • For globally operating companies, environmental factors such as natural disasters and infectious diseases, geopolitical factors such as terrorism, war and political instability, and technological factors such as cyber attacks and system failures can lead to challenges in each country. Logistics issues related to purchasing, procurement, inventory, production, and sales in each region may occur, which may affect business results. • The supply chain for our group's main products is global, but if a logistics problem occurs for some reason, there may be delays or stagnation in product shipments, which may affect business results. P a g e 19 | 25 ARTNATURE BANGLADESH LTD. C ountermeasure • We consistently monitor the status of purchasing, procurement, inventory, and production, sharing this information with our suppliers. Moreover, we have a policy of purchasing raw materials for our main product, custom-made wigs, from multiple domestic suppliers, which not only maintains quality but also ensures stable procurement. • Additionally, we are constantly carrying out various management related to logistics, but in order to further stabilize the supply system, we have developed the world's first "Wig Automatic Hair Implantation Machine" that Mechanizes a part of the production process. We aim to fully implement this innovation in the production process in the near future. Production risk • For companies that conduct business globally, there are various risks associated with production, such as challenges in securing raw materials, volatile prices, aging equipment, and declines in production efficiency and operation rates, which may affect business performance. . • Within our group, if raw material procurement costs fluctuate due to the impact of exchange rates, or manufacturing costs fluctuate due to increasing labor costs and commodity prices at manufacturing sites, manufacturing costs will rise, putting pressure on profits, etc. may have a negative impact. C ountermeasure • In order to prepare for increases in costs related to raw material procurement and manufacturing, we are working to reduce risks by establishing manufacturing bases and manufacturing subcontractors in multiple countries and monitoring the situation in each country. • Additionally, our goal is to establish a production system that balances productivity and quality improvements, such as searching for alternative raw materials that can be purchased and procured more cheaply and stably, and working toward full-scale introduction of partial mechanization of production processes. • In the event that manufacturing costs exert significant pressure on profits, we will consider adjusting the prices of products, etc. in order to ensure appropriate profits. 19. Environmental and Sustainability Impact We have officially endorsed the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) ※ 1 regarding climate change risks, encompassing natural disaster risks. We will face climate change seriously, deepen our understanding of the opportunities and risks that affect our business, and strive to proactively disclose climate change-related information based on the TCFD P a g e 20 | 25 ARTNATURE BANGLADESH LTD. recommendations. The TCFD recommendations aim to accurately understand how risks and opportunities associated with climate change will affect company management, including finance. We recommend that information be disclosed in accordance with the four disclosure elements of "governance" , "strategy" , "risk management" and "indicators and targets". We will work to further expand information disclosure based on the four information disclosure items required by the TCFD recommendations. ※1Task Force on Climate-related Financial Disclosures ： An international initiative established by the Financial Stability Board (FSB) in 2015 to encourage companies to disclose information about the financial impact of risks and opportunities posed by climate change to their businesses. 20. Stakeholder Engagement With employees : ●Striving for a diverse workplace environment We regularly recruits young talent, both college graduates and vocational school alumni. Simultaneously, we continue to work on mid-career hiring, extending retirement age, and proactively recruiting people with disabilities. As our business expands, we are expanding the number of positions where women can demonstrate their unique abilities, and we are practicing diversity management in various ways, including appointing female employees to important positions. ●Promoting improvement in employees' technical skills and motivation through comprehensive education system and various schemes As hair professionals, our staff members need to have the technical ability to set natural hair and wigs, as well as customer service and product presentation skills. In order to hone these skills, we have established a variety of training programs for different roles and levels. In addition, to ensure that our staff can work with enthusiasm, we not only provide comprehensive welfare benefits, but also provide support for acquiring various qualifications and operate an award system to increase staff motivation. ●Promoting for work-style reforms and emphasizing work-life balance by actively implementing initiatives In order to support the health of our employees, we are working to improve the workplace environment so that they can continue to work with peace of mind, including improving their lifestyle habits and eliminating overtime work. We are also promoting the creation of systems to support a balance between work and family, such as encouraging men to take paternity leave. P a g e 21 | 25 ARTNATURE BANGLADESH LTD. ●Supporting employees in balancing work and cancer treatment We strive to provide an environment where employees can work with peace of mind by enhancing support systems and systems that allow them to continue working while receiving treatment for their illness. With customers: ●Establishing a mechaniam to utilize customer feedback into the development and improvement of products and services Our "Customer Service Center" promptly and seriously responds to customer opinions and suggestions, and at the same time has adopted a system that allows us to collect valuable information. We are building a system to share this information with relevant departments, thoroughly utilize it in the development and improvement of products and services, and enhances customer satisfaction. ● Gaining customer trust through rigorous quality management What supports the high quality level of custom-made wigs is the handmade hair transplantation performed by skilled staff. At each store, the shape of the customer's head is measured and converted into data using a state-of-the-art “3D molding system”, and the data is transferred to our in-house factory in the Philippines. Based on this data, we are training national staff and building advanced production technology and thorough quality control. With shareholders and investors: ●For institutional investors and analysts Once every six months, we hold a financial results briefing session for institutional investors and analysts. At financial results briefings, top management and other executives provide an overview of financial results and the progress of the mid-term management plan, followed by a question-and-answer session. In addition, we are posting videos and transcripts of the briefing sessions on our website in an effort to engage in dialogue with the market. ●For individual investors To foster long-term fans among individual investors as shareholders,, we regularly hold online seminars.. The online seminars promote understanding of our company by providing timely information such as financial results information, as well as product and service information and live Q&A sessions. In addition, we are working on ongoing dialogue by publishing archived videos of the event. With the local community: In addition to contributing to society through our business activities, as a corporate citizen we work to P a g e 22 | 25 ARTNATURE BANGLADESH LTD. realize a better society by participating in various social contribution activities in order to develop together with local communities. ●Key initiatives Realizing an equal society Pink Ribbon Movement Little Wing Works Multi-stakeholder policy Based on the importance of co-creating value with a variety of stakeholders in corporate management, including shareholders,beyond shareholders, including employees, business partners, customers, creditors, and local communities, we aim to collaborate with multiple stakeholders. We actively strive for appropriate collaboration. Based on this, from the perspective that appropriately distributing profits and results generated through value collaboration and productivity improvement to multiple stakeholders will lead to maintaining the momentum of wage increases and sustainable economic development. Based on the importance of giving benifits to employees and being considerate to business partners, we will proceed with the following initiatives. i. Return to employees Our company will focus on maximizing added value by focusing on investing management resources in growth fields, developing employees' abilities and improving their skills, and other means to achieve sustainable growth and improve productivity. Based on the profits and results generated, wages will be raised in an appropriate manner based on the company's situation in accordance with the "Basic Principles of Wage Determination," and other comprehensive treatment improvements will also be made. We aim to provide sustainable returns to our employees by proactively focusing on investing in human resources to help improve employee engagement and further improve productivity. Specifically, with regard to raising wages, we will work to review the standards of treatment based on internal and external trends in order to reward the contributions of employees. Regarding the investment in human resources, we will strengthen recruitment activities to secure excellent human resources. We will work to establish a training environment where each employee can develop their specialized skills, and to strengthen our ability to respond to the diversification of human resources. ii. Consideration for business partners Continuing efforts to strive to comply with the contents of the Partnership Building Declaration. • Date of registration of partnership building declaration; December 21, 2023 P a g e 23 | 25 ARTNATURE BANGLADESH LTD. 21. Project Benefit Increase in employment opportunities : Our expansion plans aim to create job opportunities for Bangladeshi workers, anticipating an increasing in employment of approximately 1,000 individuals required to operate the factory. Introduction of technology and know-how : By conveying our wig manufacturing technology and business expertise, we aspire to enhance the skills of Bangladeshi companies and workers and contributing to the growth of the local wig market. Economic development : Direct investment from Japan will stimulate Bangladesh's economy and promote growth. Trade promotion : Our company's entry into the country is anticipated to boost trade between Bangladesh and Japan, and expand mutual markets by importing the raw materials necessary for wig manufacturing and exporting finished products to Japan. Collaboration with the Bangladesh government and local communities is crucial, with the hope of establishing sustainable partnerships. P a g e 24 | 25 ARTNATURE BANGLADESH LTD. 23. Global Networks 【Ｆ】 ARTNATURE PHILIPPINES INC. Address: km 32 Brgy Nueva, National Highway,San Pedro,Laguna Philippine 【Ｇ】 ARTNATURE MANUFACTURING PHILIPPINES INC. Address: First Philippine Industrial Park Bgy. Sta. Anastacia, Sto.Tomas Batangas, Philippines 【Ｈ】 瑷 特 丽发 （上海）貿易有限公司 Address: 1005B FINANCIAL BLD 333 JIUJIANG RD. HUANG PU, SHANGHAI, CHINA P a g e 25 | 25 ARTNATURE BANGLADESH LTD. 【Ｉ】 ARTNATURE SINGAPORE PTE. LTD. Address: 1 Scotts Road, #24-05 Shaw Centre, Singapore 228208 【Ｊ】 ARTNATURE (Thailand) Co., Ltd Address: 4,4/5 Level3 Central World Building, Rajdamri Road Pathumwan, Bangkok 1033 【Ｋ】 ARTNATURE MALAYSIA Sdn. Bhd. Address: Jullia Olger, Ground Floor, Isetan Gardens, The Gardens Mall, Mid Valley City, Lingkaran Syed Putra, 59200 Kuala Lumpur, Malaysia 24. Contact Information Address: Lot No. C16, Bangladesh Special Economic Zone (BSEZ), Sonpara, Panchrukhi Via Rupganj Araihazar, Narayanganj-1460 Telephone number: +639171487084 Representative : Mr. TAKANORI HAGIWARA E-mail: t-hagiwara@artnature.co.jp artnaturebangladeshinc@gmail.com For and on behalf of, ARTNATURE BANGLADESH LTD. √ _______________________ TAKANORI HAGIWARA Managing Director of the Company