Business Case - Example

Topics: SM Prime Holdings, Shopping mall, Stock market Pages: 8 (1453 words) Published: October 6, 2014
Second Half Course Requirement
Group Research Project

A. What is the name of the corporation? What is the nature of their business?

SM Prime Holdings Inc. develop, conduct, operate and maintain the business of modern commercial shopping centers and all businesses related thereto such as the conduct, operation and maintenance of shopping center spaces for rent, amusement centers, or cinema theaters within the compound of the shopping centers. Its main sources of revenues include rental income from leases in mall and food court, cinema ticket sales and amusement income from bowling and ice-skating.

B. Who are the members of the Board of Directors? Who is the chairman of the board?

Chairman of the board: Henry Sy Sr.
Members:
Jose L. Cuisia
Hans T. Sy
Henry T. Sy Jr.
Herbert T. Sy
Senen T Mendiola
Gregorio U Kilayko
Joselito H Sibayan
Teresita T Sy

C. Who is the president of the corporation?

The president of SM Prime Holdings Inc. is Mr. Hans T. Sy.

D. What types of stock are they authorized to issue? How many are the authorized shares? How much are their par values? How many shares are issued? How many shares are subscribed?

CASH DIVIDEND PER SHARE - P 0.29 in 2012, P 0.27 in 2011 and P 0.25 in 2010.

2012
2011
STOCK PRICES
HIGH
LOW
HIGH
LOW
1ST Quarter
P18.20
P13.30
P11.76
P9.96
2nd Quarter
P17.28
P12.10
P12.18
P10.90
3rd Quarter
P14.32
P12.54
P13.20
P10.94
4th Quarter
P17.02
P13.90
P13.84
P11.50

The Company’s shares of stock are traded in the Philippine Stock Exchange. As of December 31, 2012, the total number of shares owned by the public is P5, 298,041,561 or 30.49% of the issued and outstanding shares of the Company. As of February 28, 2013, the closing price of the Company’s shares of stock is P19.00/share. For the two months ending February 28, 2013, stock prices of SMPHI were at a high of P20.80 and a low of P16.10. The number of shareholders of record as of February 28, 2013 was 2,486. Capital stock issued and outstanding as of February 28, 2013 was P17, 373,677,760. As of December 31, 2012, there are no restrictions that would limit the ability of the Company to pay dividends to the common stockholders, except with respect to Note 17 of the consolidated financial statements.

E. Do they have treasury shares? How many shares are there in the treasury? How much is the cost per share? What method of recording treasury stock do they follow?

Yes, the company has treasury shares. It amounted to P18, 857,000.00. It is with a par value of P1.00 and the cost per share is at P11.50. The treasury stock is stated at acquisition cost.

F. How much is their total retained earnings? How much is free? How much is appropriated? What kind of appropriations did they make?

On April 24, 2012 and March 22, 2002, the BOD approved the appropriation of retained earnings amounting to P20, 000,000,000.00 and P7, 000,000,000.00 respectively, for future corporate expansion programs. As at December 31, 2012 and 2011, the amount of retained earnings appropriated for the continuous corporate and mall expansions amounted to P27, 000,000,000.00 and P7, 000,000,000.00 million, respectively. As at December 31, 2012, included in shopping mall complex under construction are SM Aura Premier, SM City BF Parañaque, SM Seaside City Cebu, SM Tianjin and SM Zibo, and the ongoing expansions and renovations of SM City Bacolod, SM City Clark, SM City Dasmariñas, SM City Sta. Rosa and SM Megamall.

Over the next five years, the Company expects to incur around P25, 000,000,000.00 million to P35, 000,000,000.00 million for its capital expenditures. The retained earnings account is restricted for the payment of dividends to the extent of P7, 895,000,000.00 million and P5, 214,000,000.00 million as at December 31, 2012 and 2011, respectively, representing the cost of shares held in treasury (P101, 000,000,000.00 million as at December 31, 2012 and 2011) and accumulated...
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