Wedge Holdings CO., LTD. The Asian Value Innovator

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Management Policy

[ 1 ] Fundamental Policy of the Company

Our group emerged from a slump period after going public and returned to profitability in November 2008. After that, we were able to increase our business performance with the expansion of business areas overseas. Our current main business is the Finance Business and Entertainment Business. Under these circumstances, we have adopted the following policies as our fundamental management policies.

1) Business Expansion in Southeast Asia Markets

First of all, the business policy of our finance business is to aim for business expansion in the medium term by expanding business areas and conducting aggressive investments.
The expansion of finance business in Southeast Asia is steadily in progress by making Group Lease PLC, a SET listed company in Thailand, a consolidated subsidiary in July 2009 and entry into Cambodian markets with the finance business in September 2012. From now on, we will push forward in pioneering by further expanding the finance business in Thailand, Cambodia and other Southeast Asian countries while developing new businesses such as the new agricultural machinery lease business along with M&A for non-continuous expansions.

2) Improvement of Profitability in Domestic Business

Secondly, the business policy for the entertainment business is to aim for business expansion, foster pioneer spirit within the company, actively shift business policies and promote overseas expansion.
For the past 7 years, we have made reformations such as withdrawal of unprofitable businesses and profitability improvements. As results, we have ended our sole concentration on the entertainment business. The previous selection and concentration of businesses is believed to be a correct move, but at the same time, we reflect on the foster of cultures that takes contracted equilibrium in the company for granted and the loss of pioneering ethos. We also reflect on being too focused in Japan. From now on, the entertainment business, which creation is the core, will take positive business measures along with overthrowing the bureaucratic structure within the company and provide freedom for each and every staff in order to accomplish the development of unique expertise of our company. We will also actively develop the Asian markets.

3) Risk Management for All Businesses

Thirdly, we will advance with appropriate risk management by implementing diversified investments for future uncertain factors.
The affiliation of a local subsidiary in Thailand which holds and operates the luxury resort, Zeavola Resort, through the equity method as a part of the investment development business, as well as the sports business in Singapore under our group. Not only the strong performing Finance Business, but also the certain holdings of superior businesses as risk management.

4) Maintain and Strengthen Foundations for Business Pioneering

Fourthly, maintain and strengthen our core as a holdings company capable of developing and possessing diversified businesses by improving management functions, which is the foundation for listed companies. We will improve the qualities in the function of headquarters in order to provide sufficient support, especially for the expansion of both entertainment business and finance business throughout Asia.
We will continue to improve to pursue greater progress and aspire ourselves for further changes to increase corporate values.

[ 2 ] Targeted Management Index

In order to increase net income and expand net assets over the medium to long term, each business in our company is now implementing the following steps:
 a) View the present as the time for investment to “aim at expanding customer foundations”.
 b) Invest in the pioneering of business areas and regions for the expansion of customer foundations.
 c) Strengthening headquarter functions to maximize and provide appropriate support for the businesses.  

[ 3 ] Company Business Strategy for the Medium and Long Term

1)Expansion of Business Areas for Finance Business

As described in the “Fundamental Policy of the Company”, the medium to long term strategy of our group is the development of finance business centered in Southeast Asia. One of the core businesses of our group which became our consolidated subsidiary company since July 2011 and contributed over 80% of consolidated revenues in the current fiscal year is an example. The aforementioned business is a highly profitable business supported by strong demands in growth markets with repeated revenue and profit growth and after becoming our consolidated subsidiary company in 2011. Motorcycles are established as fundamental infrastructures in the formal and private sectors of emerging nations. It is also becoming a certain necessity with the expansion of the middle class and grassroots economic development progress.
The finance business in Thailand has plenty of room for expansion as the business currently covers only 20% of the country. We have managed to establish branches in two provinces in September 2013 and are anticipating future growth of business in Thailand.
In addition, we believe that the finance business has the opportunity to expand in new markets of Southeast Asia. As business opportunities are arising along with the economic development of Asian countries, our finance business entered into the Kingdom of Cambodia and progressed with the expansion throughout the country starting from Phnom Penh.
Other than that, we believe that through the operations of our strategic subsidiary, Engine Holdings Asia Pte., Ltd., a corporation in Singapore which has direct holdings of Group Lease PLC’s shares, we are capable of discovering more promising opportunities for business expansion. We will continue to increase overseas business under our group, such as Group Lease PLC, and strengthen businesses for revenue growth.

2)Maintain and Strengthen Domestic Businesses and Increase Efficiency of Indirect Departments

While the market environment changes, we have concentrated on improving profitability by making attempts to shift business models to those that are appropriate for the current operating environment and liquidize some of our unprofitable businesses. As a part of these measures, our merchandising business has been transferred during the current fiscal year. However, the segmented revenue of Entertainment Business is in a decreasing trend and we are aware of the needs of sustained improvements.
Currently, we are making mutual personnel dispatch and personal exchanges with other subsidiary companies of Showa Holdings Co., Ltd., our parent company. With the support, we are putting efforts in strengthening our businesses through the collaboration and intensive operations of high affinity businesses. Other than that, we are also promoting the enhancement of headquarter functions through effective utilization of management resources in both group companies and indirectly reduce costs.

[ 4 ] Issues to be Addressed by the Company

Issues to be addressed by our group are as follows.
 " Promotion of businesses in Southeast Asia and improvement of group control standards to adapt with globalization. "
Our group has been rapidly increasing the proportion of overseas businesses such as the owning of consolidated subsidiary, Group Lease PLC, a SET listed company operating the finance business in Thailand, in fiscal 2009 and equity method affiliated companies, P.P. Coral Resort Co., Ltd. and Engine Property Management Co., Ltd. which owns and operates a resort in the Phi Phi Islands of Thailand in fiscal 2011. In 2012, GL Finance PLC, a finance business operating company in Cambodia was decided to be owned as a subsidiary under Group Lease PLC and is consolidated beginning this consolidated fiscal year. These actions are being further accelerated according to “Acceleration Plan”, our 3 year management plan announced in June 2012. Sustainable economic growth is expected in the Southeast Asian regions. Our group possesses high expertise, human resources and organizations in these regions and will continue to expand businesses in the Southeast Asian markets.
On the other hand, the maintenance and improvement of management structure and administrative control to adapt to business environments in each region from rapid business expansion is viewed as an important issue in our group. We will continue to maintain and improve internal control systems based on fundamental policies of the internal control system structure and establish a management system that is adept in global (overseas) businesses. We will strive to improve our corporate values.  

[ 5 ] Other Important Matters Regarding the Management of the Company

None applicable.


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