COVER SHEET
5 6 9 0 9
SEC Registration Number
S M
D E V E L O P M E N T
C O R P O R A T I O N
A N D
S U B S I D I A R Y
(Company’s Full Name)
B u i l d i n g
B a y
s s
A ,
S M
C o r p o r a t e
B O u l e v a r d ,
P a r K ,
B a y
S M
C i t y ,
O f f i c e s ,
C e n t r a l
P a s a y
B u s i n E
C i t y
1 3 0
0
(Business Address: No. Street City/Town/Province)
1 2
Ms. Sheila C. Racho
831-1000 loc. 1371
(Contact Person)
(Company Telephone Number)
3 1
2 0 - I S
0 4
2 8
Day
(Form Type)
Month
Day
Month
(Fiscal Year)
(Annual Meeting)
(Secondary License Type, If Applicable)
Dept. Requiring this Doc.
Amended Articles Number/Section
Total Amount of Borrowings
3,329
Total No. of Stockholders
Domestic
Foreign
To be accomplished by SEC Personnel concerned
File Number
LCU
Document ID
Cashier
STAMPS
Remarks: Please use BLACK ink for scanning purposes.
Notice of Regular Annual Stockholders’ Meeting
April 28, 2006, 4:00 p.m.
Makati A & B Room, Makati Shangri-La Hotel
Makati City
To all Stockholders:
Please take notice that the 2006 Annual Meeting of the stockholders of SM
DEVELOPMENT CORPORATION will be held on April 28, 2006 at 4:00 p.m. at the
Makati A & B Room, Makati Shangri-la Hotel, Makati City. The proposed agenda of the
meeting is set forth below:
AGENDA
1.
2.
3.
4.
5.
6.
7.
8.
9.
Call to order.
Certification of notice and quorum.
Approval of minutes of annual meeting of stockholders held on April 26, 2005.
Annual Report.
General ratification of the acts of the Board of Directors and the management
from the date of the last annual stockholders’ meeting up to the date of this
meeting.
Election of directors for 2006-2007.
Appointment of external auditors.
Other matters.
Adjournment.
The Board of Directors has fixed the end of trading hours of the Philippine Stock
Exchange (PSE) on March 29, 2006 as the record date for the determination of
stockholders entitled to notice of and to vote at such meeting and any adjournment
thereof.
Makati City, March 8, 2006.
BY THE ORDER OF THE BOARD OF DIRECTORS
EMMANUEL C. PARAS
Corporate Secretary
SM DEVELOPMENT CORPORATION
SECURITIES AND EXCHANGE COMMISSION
SEC FORM 20 – IS
Information Statement Pursuant to Section 20 of the Securities Regulation Code
1.
Check the appropriate box:
__X__ Preliminary Information Statement
_____ Definitive Information Statement
2.
Name of Registrant as specified in its charter: SM DEVELOPMENT CORPORATION
3.
Country of incorporation:
PHILIPPINES
4.
SEC Identification Number:
56909
5.
BIR Tax Identification Code:
320-000-601-470
6.
Address of principal office:
SM Corporate Offices, Bldg. A
1000 Bay Boulevard, SM Central Business Park,
Bay City, Pasay City 1300
7.
Registrant’s Telephone Number:
8.
Date, time and place of stockholders’ meeting: 28 April, 2006, 4:00 P.M.,
Manila A & B Room, Makati Shangri-la Hotel,
Makati City, Philippines
9.
Approximate date on which Information Statement is first to be sent or given to
security holders:
April 03, 2006
10.
In case of Proxy Solicitation:
11.
Securities registered pursuant to Section 8 and 12 of the Code or Section 4 and 8 of
the RSA
Title of each class:
Common Shares Only
Number of Shares of Common Stock Outstanding: 3,079,009,094 net of
54,961,146 Treasury
Shares
Amount of Debt Outstanding: None
Common Shares:
Issued and Subscribed – 3,133,970,240 shares
12.
Are any registrant’s securities listed in the Philippine Stock Exchange?
Philippine Stock Exchange
All Common Stock
Name of Stock Exchange
Class of Securities
632-831-1000 local 1371
Name of Person Filing the Statement/Solicitor:
Address and Telephone No.: Not applicable
Yes
SM DEVELOPMENT CORPORATION
SEC FORM 20 – IS
INFORMATION REQUIRED IN INFORMATION STATEMENT
GENERAL INFORMATION
DATE, TIME & PLACE OF ANNUAL MEETING
The annual stockholder’s meeting of SM Development Corporation is scheduled
to be held on 28 April 2006, Friday, at 4:00 p.m. at Manila A & B Room, Makati Shangrila Hotel in Makati City. The complete mailing address of the principal office of the
registrant is SM Corporate Offices, Bldg. A, 1000 Bay Boulevard, SM Central Business
Park, Bay City, Pasay City 1300. The approximate time on which the Definitive
Information Statement is first to be sent or given to security holders will be on April 03,
2006.
STATEMENT THAT PROXIES ARE NOT SOLICITED
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED
NOT TO SEND A PROXY.
DISSENTER’S RIGHT OF APPRAISAL
There are no matters to be taken up which would require exercise of any
dissenter’s right of appraisal.
PROPERTIES
The Company owns a parcel of land located in Tagaytay City, containing an area
of 31,498 sq. meters. This vacant lot was purchased at a cost of P304,573,633. Its
Subsidiary, on the other hand, owns a parcel of land in Parañaque City with an area of
46,969 sq. meters, costing P224,598,284. This is where Chateau Elysee, a residential
condominium, is being constructed. These properties are not mortgaged or leased.
INTEREST OF CERTAIN PERSONS IN OR OPPOSITION TO MATTERS TO BE
ACTED UPON
There is no substantial interest, direct or indirect, by security holdings or
otherwise, of each person who has been a director or officer of the Company at any time
since the beginning of the last fiscal year, each nominee for election as a director of the
Company, or each associate of any of the foregoing persons.
There is no director of the Company who has informed the registrant in writing
that he intends to oppose any action to be taken by the Company at the meeting.
CONTROL AND COMPENSATION INFORMATION
VOTING SECURITIES
As of February 28, 2006, the Company had the following outstanding shares of
common stock:
Title of Class
No. of shares Outstanding
Common Stock
3,079,009,094 net of
54,961,146 Treasury Shares
The record date for the purpose of determining the stockholders entitled to vote
is March 29, 2006. Stockholders are entitled to cumulative voting in the election of the
Board of Directors, as provided by the Corporation Code.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN RECORD AND BENEFICIAL OWNERS
As of February 28, 2006, SM Development Corporation knows of no one who
beneficially owns in excess of 5% of SMDC’s common stock except as set forth in the
table below:
Title of
Class
Name & address of
record/beneficial owner
Common
SM Investments, Inc.*
c/o SM Corporate
Offices, Bldg.A, 1000
Bay Blvd., SM Central
Business Park, Bay City,
Pasy City 1300
Shoemart, Inc.*
c/o SM Corporate
Offices, Bldg.B, 1000
Bay Blvd., SM Central
Business Park, Bay City,
Pasy City 1300
Henry Sy, Sr.
c/o 3rd Floor, Makati
Stock Exchange Bldg.,
Ayala Avenue, Makati
City
PCD Nominee
Corporation **
c/o Ground. Floor,
Makati Stock Exhange
Bldg., Ayala
Avenue, Makati City
"
"
"
Amount & nature of record
"r"/beneficial "b" ownership
Citizenship
Percent of
Class
1,519,868,304
"r and b"
Filipino
48.50
488,512,169
"r and b"
Filipino
15.59
367,947,336
"b"
Filipino
11.74
220,068,803
"r"
Filipino=78%
Foreign=22%
7.02
"
Sysmart Corporation *
c/o 4th Floor, Makati
Stock Exchange Bldg.,
Ayala Avenue, Makati
City
*
**
166,521,209
"r and b"
Filipino
5.31
Mr. Henry Sy, Sr., Chairman of the SM Group of Companies, directs the
voting or disposition of the shares held by the corporation.
There is no participant who owns more than 5% of the company’s voting
securities under PCD Nominee Corporation.
SECURITY OWNERSHIP OF MANAGEMENT
Title of Class
Common
"
"
"
"
"
"
Name of Beneficial
Owner
Henry Sy, Sr.
Hans T. Sy
Henry T. Sy, Jr.
Octavio V. Espiritu
Ricardo J. Romulo
Rogelio R. Cabuñag
Andres G. Gatmaitan
TOTAL
Amount & nature of
beneficial ownership
367,947,336
"d"
16,570,022
"d"
1,462,500
"d"
908,341
"d"
201,510
"d"
81,561
"d"
72,392
"d"
387,243,662
Citizenship
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Percent of
Class
11.7406
0.5382
0.0475
0.0295
0.0065
0.0026
0.0024
12.3673
Note: There are no additional shares which the listed beneficial or record owner
has the right to acquire within thirty (30) days, from options, warrants, rights,
conversion privilege or similar obligations, or otherwise.
There are no voting trust holders of 5% or more and there are no
securities under Trust or Agreement.
CHANGES IN CONTROL
The company is not aware of any change in control or arrangement that may
result in a change in control of the Company since the beginning of its fiscal year.
DIRECTORS AND EXECUTIVE OFFICERS
Name
Henry Sy, Sr.
Henry T. Sy, Jr.
Rogelio R. Cabuñag
Andres G. Gatmaitan
Octavio V. Espiritu
Ricardo J. Romulo
Office
Director, Chairman of the
Board
Director, Vice-Chairman of the
Board and Chief Executive
Officer
Director, President and Chief
Operating Officer
Director and Vice President
Director
Director
Age
Citizenship
Term of
Office as a
Director
81
Filipino
1 year
52
Filipino
1 year
57
65
62
73
Filipino
Filipino
Filipino
Filipino
1 year
1 year
1 year
1 year
Hans T. Sy
Emmanuel C. Paras
Virginia A. Yap
Corazon I. Morando
Jose T. Gabionza
Julie M. Jalandoni
Director
Corporate Secretary
Treasurer
Legal Consultant
Vice President
Asst. Vice President
50
56
53
64
43
34
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
1 year
BOARD OF DIRECTORS
MR. HENRY SY, SR., Chairman of the Board, is the founder of the SM Group of
Companies. He opened the first Shoemart store in 1958 and has been to the fore in SM
Group’s diversification into shopping center, bank and financial services, tourism and
real estate industries.
Directorships Held by Mr.Henry Sy, Sr.:
Name of Corporation
Position
SM Investments Corporation
SM Prime Holdings, Inc.
Highlands Prime, Inc.
Keppel Philippines Holdings, Inc.
Keppel Philippines Marine, Inc.
Keppel Philippines Properties, Inc.
Subic Shipyard, Inc.
Chairman of the Board
Chairman of the Board
Chairman of the Board
Director
Director
Director
Director
MR. HENRY T. SY, JR., Vice Chairman and Chief Executive Officer, is responsible for
the real estate acquisitions and development activities of SM Group which includes the
identification, evaluation and negotiation for potential site as well as the input of design
ideas. He holds many key positions in the SM Group. He graduated with a management
degree from De La Salle University.
Directorships Held by Mr.Henry T. Sy, Jr.:
Name of Corporation
Position
Belle Corporation
China Banking Corporation
Highlands Prime, Inc.
San Miguel Corporation
SM Investments Corporation
SM Prime Holdings, Inc.
Vice Chairman
Director
Vice Chairman
Director
Director/Vice Chairman
Director/Executive Vice President
MR. ROGELIO R. CABUÑAG, President and Chief Operating Officer. Prior to joining the
SM Group, he held key executive positions in other financial institutions.
Directorships Held by Mr.Rogelio R. Cabuñag:
Name of Corporation
Position
Belle Corporation
BDO Capital and Investment Corp.
Highlands Prime, Incorporated
Director/Officer-in-Charge
President
Director
SM Synergy Properties Holdings Corp.
Tagaytay Highlands Community Condominium
Association Incorporated
Tagaytay Highlands International Golf
Tagaytay Midlands Golf Club, Inc.
The Country Club at Tagaytay Highlands
Director/Executive Vice President
Director
Director
Director
Director
ATTY. ANDRES G. GATMAITAN, Director and Vice President, is connected with Sycip,
Salazar, Hernandez & Gatmaitan as Senior Counsel. He is currently serving United
Holdings and Development, Inc., Pneumatic Equipment Corporation and Gema Coco
Foods Corporation as Chairman of the Board.
MR. OCTAVIO V. ESPIRITU, Director, currently sits as director of Bank of the
Philippines Islands, International Container Terminal Services, Inc., Netvoice, Inc. and
Manila Electric Company. A three-term former President of the Bankers Association of
the Philippines(BAP) and former President and Chief Executive Officer of Far East Bank
and Trust Company. He is currently Chairman of Delphi Group, Inc., a corporate
financial advisory firm. He is also Chairman and President of MAROV Holding Company,
Inc.
ATTY. RICARDO J. ROMULO, Director, is also senior partner of Romulo, Mabanta,
Buenaventura, Sayoc & De Los Angeles law firm.
Directorships Held by Atty. Ricardo J. Romulo:
Name of Corporation
Position
Agrotex Commodities, Inc.
BASF Coatings + Inks Phils., Inc.
Beneficial-PNB Life Assurance Co., Inc.
Cargill Philippines, Inc.
Cebu Air, Inc.
Digital Telecommunications, Inc.
Federal Phoenix Assurance Co., Inc.
Goulds Pumps (Phils.), Inc.
Honda Philippines, Inc.
IBM Philippines, Inc.
Interphil Laboratories, Inc.
Johnson & Johnson (Phils.), Inc.
Kraft Foods (Phils.), Inc.
Maersk-Filipinas, Inc.
Phil. American Life & General Insurance Co.
Planters Development Bank
Sanofi Philippines, Inc.
Sime Darby Pilipinas, Inc.
Watson Wyatt (Phils.), Inc.
W.R. Grace (Philippines), Inc.
Zuellig Pharme Corporation
Chairman/Director
Chairman/Director
Director
Director
Chairman/Director
Chairman/Director
Chairman/Director
Director
Director
Director
Chairman/Director
Director
Director
Director
Director
Director
Director
Chairman
President/Director
Director
Director
MR. HANS T. SY, Director, holds many key positions in the SM Group.
Directorships Held by Mr. Hans T. Sy:
Name of Corporation
Belle Corporation
China Banking Corporation
Highlands Prime, Inc.
Keppel Land, Inc.
Macroasia Corporation
SM Investments Corporation
SM Prime Holdings, Inc.
Tagaytay Highlands International Golf Club Inc.
Position
Director
Vice Chairman
Director
Director
Director
Director/First Executive Vice
President
President/Director
Chairman
SENIOR MANAGEMENT
ATTY. EMMANUEL C. PARAS, Corporate Secretary. He is a Bachelor of laws graduate
of the Ateneo de Manila University. He is the head of the Corporate Services
Department and a senior partner of the SyCip, Salazar, Hernandez and Gatmaitan Law
Offices.
Directorships held by Atty. Emmanuel C. Paras
Name of Corporation
Ang Tian Su Sons
Associated Trading Corporation
Biyaya Corporation
Bonheur Marketing Corporation
Central Vegetable Oil
Clorox International Philippines,Inc.
Commonwealth Foods, Inc.
Connell Bros. Co. Pilipinas
Cosmopolitan Investment Co.
Export Consultants
Fornax Manufacturing Phils.
Hocheng Phils. Corp.
Hoya Glass Disk Phils.
International Construction
International Nutrition
Laguna AAA Water
Laws Textile Philippines Ltd. Inc.
Makati Chef
Manuscripts, Inc.
Mayon Industrial
Multimedia Creations
Multimedia Editorial
Multimedia Productions
Neville-Clarke Philippines
Nobile, Inc.
Position
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary/Director
Asst. Corporate Secretary
Corporate Secretary/Director
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary/Director
Corporate Secretary/Director
Corporate Secretary
Corporate Secretary/Director
Corporate Secretary
Corporate Secretary/Director
Corporate Secretary/Director
Corporate Secretary/Director
Corporate Secretary
Corporate Secretary
SM Investments Corporation
SM Prime Holdings, Inc.
Southeastern Investment & Realty Corp.
St. Agen Holdings, Inc.
Star Performance
Stolt Nielsen Transportation Group
Triumph International Philippines
XYST Corporation
Corporate Secretary
Corporate Secretary
Asst. Corporate Secretary
Corporate Secretary/Director
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary/Director
ATTY. CORAZON I. MORANDO, Legal Consultant. She is a Bachelor of Laws graduate
of the University of the Philippines and formerly the Director of the Corporate and Legal
Department of the Securities and Exchange Commissions of the Philippines.
Positions Held by Atty. Corazon I. Morando:
Name of Corporation
Premier Southern Corporation
SM Investments Corporation
SM Prime Holdings, Inc.
Primebridge Holdings, Inc.
Highlands Prime, Inc.
SM Retail Stores Corporation
Sysmart Corporation
The Highlands Prime Community Condo.
Owner’s Association, Inc.
BDO Capital & Investments Corp.
Position
Director
Senior Vice-President,
Legal & Corporate Affairs
Senior Vice-President
Legal & Corporate Affairs
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary
Corporate Secretary
MS. VIRGINIA A. YAP, Treasurer, is also the FVP-Treasury of the SM Group of
Companies.
MR. JOSE T. GABIONZA, Vice President for Credit and Research. He graduated from
the University of the East, Cum Laude, and is a Certified Public Accountant.
Directorships held by Mr. Jose T. Gabionza
Name of Corporation
Position
APC Group, Inc.
APC Cement Corporation
Aragon Power & Energy Corporation
Sinophil Corporation
SM Synergy Properties Holdings Corp.
Director
Director
Director
Director
Director
MS. JULIE M. JALANDONI, Assistant Vice President for Sales and Marketing. She is a
graduate of the University of the Philippines - Diliman and a former consultant for Belle
Corporation and Country Manager for Vanguard International, Ltd.
The directors of the Company are elected at the annual stockholders’ meeting to
hold office until the next succeeding annual meeting and until their respective
successors have been elected and qualified.
Officers are appointed or elected annually by the Board of Directors at its
organizational meeting following the Annual Meeting of Stockholders, each to hold office
until the corresponding meeting of the Board of Directors in the succeeding year or until
a successor shall have been elected, appointed or shall have been qualified.
NOMINEES FOR THE DIRECTORSHIP IN THE FORTHCOMING ANNUAL
STOCKHOLDERS’ MEETING
The Nomination Committee created by the Board under its Corporate Governance
Manual nominated the following for re-election to the Board of Directors at the Annual
Stockholders’ Meeting on April 28, 2006:
1.
2.
3.
4.
5.
6.
7.
Henry Sy, Sr.
Henry T. Sy, Jr.
Rogelio R. Cabuñag
Octavio V. Espiritu
Andres G. Gatmaitan
Ricardo J. Romulo
Hans T. Sy
Ms. Virginia A. Yap, a registrant’s stockholder, nominated through the Nomination
Committee, the following as independent directors:
1.
2.
Octavio V. Espiritu
Ricardo J. Romulo
The Nomination Committee endorsed to the Board for inclusion in the Final List of
Candidates the aforementioned persons.
The following will be nominated as officers at the Organizational meeting of the
Board of Directors:
Henry Sy, Sr.
Henry T. Sy, Jr.
Rogelio R. Cabunag
Andres G. Gatmaitan
Jose T. Gabionza
Julie M. Jalandoni
Corazon I. Morando
Virginia A. Yap
Emmanuel C. Paras
-
Chairman
Vice Chairman and CEO
President and COO
Vice President
Vice President
Asst. Vice President
Legal Consultant
Treasurer
Corporate Secretary
In approving the nominations for Independent Directors, the Nomination
Committee took into consideration the guidelines on the nomination of Independent
Directors prescribed in SRC Rule 38 as amended.
Under Section 2, Article III of the Company’s By-Laws, no person shall be
elected nor be competent to hold the office of Director of the Corporation unless he be a
citizen of the Philippines and that one thousand (1,000) shares of stock of the
Corporation shall stand in his name in the books at the time of his election.
All the nominees for election to the Board of Directors have at least one thousand
(1,000) shares registered in their names.
All business experience of the above-named directors and officers cover the past
five (5) years.
SIGNIFICANT EMPLOYEES
Aside from those listed above, the Company has no other executive officers or
certain key personnel who is deemed to be of a significant contribution to the business
for the last five (5) years.
FAMILY RELATIONSHIP
Except for Messrs. Henry T. Sy, Jr. and Hans T. Sy who are sons of Mr. Henry
Sy, Sr., there are no more family relationships among the officers listed.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company retains the law firm of Sycip, Salazar, Hernandez & Gatmaitan
Law Office and is paying them legal fees which the Company believes to be reasonable
for the services rendered. There are no pending legal proceedings to which the
registrant or its subsidiary is a party.
There were no transactions with directors, officers or any principal stockholder
(owning at least 10% of the total outstanding shares of the Company) not in the ordinary
course of business.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS
The Company has no director(s) and executive officer(s) that have any claims or
lawsuit now pending or in process or which have been settled since December 31, 2005
involving damages or other claims, materially affecting the Company nor is there any
liability in connection herewith within the last five (5) years.
COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS
Information as to the aggregate compensation paid or accrued during the last two
(2) calendar years and to be paid in the ensuing calendar year to the Company’s Chief
Executive Officer and all officers and directors as a group unnamed are as follows:
Name & Principal Position
Rogelio R. Cabuñag/President and
Chief Operating Officer
Jose T. Gabionza/Vice President
Year
Salary
Bonus
Other Annual
Compensation
Julie M. Jalandoni/Asst. Vice
President
All Officers & Directors as a group
unnamed
2006
2005
2004
3,441,252*
3,128,411*
2,844,010*
237,518
215,925
196,295
100,000
97,500
95,000
*
All Directors and Executive Officers, except Messrs. Rogelio R. Cabunag;
Jose T. Gabionza and Ms. Julie M. Jalandoni, do not receive regular
annual salaries from the Company.
*
There are no actions to be taken with regard to election, any bonus, profit
sharing, pension/retirement plan granting of any extension of any option,
warrant or right to purchase any securities.
*
All directors receive a total of six thousand five hundred pesos
(P6,500.00) per diem per board meeting.
BRIEF DESCRIPTION OF THE GENERAL NATURE AND BUSINESS OF THE
COMPANY
SM Development Corporation (SMDC) is a publicly-listed firm incorporated in the
Philippines in 1974 as Ayala Fund, Inc., a closed-end investment company limited by
shares. In March 1986, when SM Group of Companies took majority ownership of the
Company, it was renamed SM Fund, Inc. Since then, SM Fund, Inc. remained as an
investment company providing investors with professionally-managed vehicle to invest in
diversified businesses in the country.
In May 1996, SM Fund, Inc. was renamed SM Development Corporation to
reflect its new business thrust of property development, whose primary objective is to
pursue opportunities in the real estate industry. In line with this, its business proposition
was initially directed toward tapping the residential property market near/beside SM
shopping malls.
Other projects being considered include tourism and entertainment related
ventures which will complement or enhance the operation of SM Group’s shopping malls
in the country. Meanwhile, the business of securities investment is retained to continue
to provide a regular flow of earnings and cash from this operation
SM Synergy Properties Holdings Corporation, a 100% owned subsidiary, was
established on November 14, 1997. It concentrates its development efforts on the 4.7
hectare mid-scale residential condominium in Dona Soledad Avenue Extension, Bicutan,
Paranaque City called Chateau Elysee. Cluster 1 was turned over last December 2004.
Construction of Cluster 2 followed on February 2005 and turnover of units is on March
2006. Meanwhile, SM Development Corporation recently launched its new project the
Mezza Residences last February 24, 2006. It is located just across SM City Sta. Mesa
along Aurora Blvd. cor. Araneta Avenue and Guirayan St., Quezon City.
The real estate market where SMDC is competing is a promising field due to the
huge housing backlog in the country and with shelter being a basic human necessity.
The Company believes that this potent combination plus the strong OFW remittances
provide a robust market for its products.
The real estate industry in the country in now dominated by Ayala Land, Inc.,
Filinvest Land, Inc., Megaworld, C&P homes, Fil-estate which have had the luxury of
recognizing this opportunity early. Despite their relative successes in their respective
market niches, the demand for housing/residences in the country continues to grow and
remains unmet.
“SM” is a leading brand in the country today, particularly in the area of
commercial development. As a group, it has accumulated significant land bank within the
areas near Metro Manila that could be utilized into residential developments to serve this
housing backlog. The key factors combined with our strong financial base will serve as
our strength in competing with the other players.
SMDC
closely
coordinates
its
efforts
with
various
government
agencies/instrumentalities before any of its projects are implemented. At this stage,
however, it will still be relatively difficult to determine the costs and effects of existing or
probable governmental regulations and environmental laws of the Company. We will
report them as soon as they become determinable and quantifiable.
In the meantime, SMDC is not involved in any way to any patents, trademarks,
licenses, franchises, concessions, royalty agreements and labor contracts.
EMPLOYEES
SMDC has eleven (11) regular employees for the year ended December 31,
2005. It is composed of three (3) clerical staff, two (2) administrative staff and six (6) in
operations. There is no collective bargaining agreement (CBA) involved between the
Company and employees.
PLAN OF OPERATIONS
SM Development Corporation through its 100%-owned subsidiary SM Synergy
Properties Holdings Corporation continues to develop in Bicutan, Parañaque City
“Chateau Elysee”, a six-storey residential condominium intended to cater to the huge
unserved mid-income market. Phase 1 of Chateau Elysee is now ready for occupancy
and has about 186 residents. Phase 2, on the other hand is 94.2% completed as of end2005 and will be delivered to unit owners on March 2006. The amenities like the
Clubhouse and pools are now being enjoyed by the residents. Phase 3 will soon start
construction.
Mezza Residences, a four Tower; 38-storey mixed use condominium
development located along Araneta Ave. cor. Aurora Blvd.,Quezon City is the second
project of the company. This is a joint venture with Banco de Oro Universal Bank (the
landowner). This project was launched last February 24, 2006. Construction of Tower 1
& 2, the podium and the other amenities is targeted on September 2006. In addition to
this, SMDC will also pursue development this year of about 400 subdivision lots in
Susana Heights, Muntinlupa City called “Susana Hills”. The joint venture with GSIS
regarding development of the Baguio property, will also be pursued this year. Plans are
now being finalized to facilitate the development of Hacienda Looc in Nasugbu,
Batangas. Meanwhile, the business of securities investment is retained to continue to
provide a regular cash flow of earnings and cash from this operation.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE
There are no changes in and disagreements with accountants on accounting and
financial disclosures.
MARKET PRICE AND DIVIDENDS OF REGISTRANT’S COMMON STOCK
The Company’s common shares have been publicly traded through the
Philippine Stock Exchange (PSE) and have not sold any unregistered securities within
the last three (3) years.
The Company’s high and low closing prices for each quarter of the last 2 fiscal
years are as follows:
Quarter
1st
2nd
3rd
4th
2005
High
2.00
1.88
1.80
1.56
2004
Low
1.36
1.36
1.30
1.30
High
1.22
1.16
1.08
1.52
Low
1.00
1.00
0.99
0.98
The closing price of the Company as of February 28, 2006 is at P1.50 per share.
The number of stockholders of record as of December 31, 2005 was 3,329.
Common shares issued and outstanding as of December 31, 2005 net of 54,961,146
treasury shares were 3,079,009,094 shares.
The top 20 stockholders as of December 31, 2005 are as follows:
Rank
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
Name of Stockholder
SM Investments Corporation
Shoemart, Inc.
Henry Sy, Sr.
PCD Nominee Corporation(Filipino)
Sysmart Corporation
PCD Nominee Corporation(Non-Filipino)
Harley Sy
Macario L. Gaw, Jr.
Hans T. Sy
Senen T. Mendiola
Dioceldo S. Sy
Regina Capital Development Corp.
Anita N. Ty
Lucky Securites, Inc.
Makati Supermarket Corporation
Vicente Yu, Sr.
Total No. of Shares
1,519,868,304
488,512,169
367,947,336
170,284,202
166,521,209
49,044,408
20,741,941
18,043,025
16,570,022
16,000,000
14,000,000
12,310,343
8,419,879
7,799,500
7,078,122
5,429,530
% of Total O/S
48.50%
15.59%
11.74%
5.43%
5.31%
1.56%
0.66%
0.58%
0.53%
0.51%
0.45%
0.39%
0.27%
0.25%
0.23%
0.17%
17
18
19
20
Macario L. Gaw, Jr.
William T. Gabaldon
Herbert Sy
Peter Lee
4,554,000
3,965,956
3,316,620
3,273,769
0.15%
0.13%
0.11%
0.10%
Cash dividends per share amounted to P0.08 in 2005 and P0.05 in 2004 and
2003.
The Company has not distributed any stock dividends from 2003 to 2005.
DISCUSSION OF COMPLIANCE WITH LEADING PRACTICE ON CORPORATE
GOVERNANCE
The Company, its directors, officers and employees complied with all the leading
practices and principles on good governance as embodied in the Company’s Corporate
Governance Manual.
INDEPENDENT PUBLIC ACCOUNTANTS
The auditing firm of Sycip, Gorres, Velayo & Company served as the Company’s
external auditors for the last fiscal year. They will be recommended again to security
holders for re-appointment as external auditor for the current year.
Representatives of the said firm are expected to be present at the stockholders’
meeting and they will have the opportunity to make a statement if they desire to do so
and are expected to be available to respond to appropriate questions.
As of December 31, 2005, SGV has been the Company’s external auditors for
the last five (5) years. In compliance with SEC Memorandum Circular No. 8, Series of
2003, changes were made in the assignment of SGV’s engagement partners for the
Company during the five (5)-year period.
OTHER MATTERS
ACTION WITH RESPECT TO REPORTS
The approval of the following will be considered and acted upon at the meeting:
1.
Annual Report of the Company for the year ended December 31, 2005;
2.
Minutes of the 2005 Annual Stockholders’ Meeting with the following items;
a. Approval of the Minutes of the 2005 Annual Stockholders’ Meeting held
on April 26, 2005;
b. Approval of annual report;
c. Ratification of the acts of the Board of Directors since the 2005 Annual
Stockholders’ Meeting;
d. Election of the Board of Directors; and
e. Appointment of External Auditors.
3.
Ratification of all acts of the Board of Directors and Officers as such:
a.
b.
c.
d.
Approval of investments and divestments;
Declaration of Cash Dividends;
Appointment of Officers; and
Approval of signing authorities and limits.
Minutes of the 2005 Annual Stockholders’ Meeting and resolutions of the Board
of Directors since the date of 2004 Annual Stockholders’ Meeting will be available for
examination during office hours at the office of the Corporate Secretary.
VOTING PROCEDURES
VOTE REQUIRED FOR APPROVAL
The vote required for election of directors is majority of the outstanding capital stock.
METHODS BY WHICH VOTERS WILL BE COUNTED
All matters subject to vote, except in cases when the law provides otherwise,
shall be decided by the plurality vote of stockholders present in person or by proxy and
entitled to vote thereat, a quorum being present.
Unless, required by law, or demanded by a stockholder present in person or
proxy at any meeting, and entitled to vote thereat, the vote on any question need not be
by ballot. On a vote by ballot, each ballot shall be signed by the stockholder voting in his
name or by his proxy, if there be such proxy, and shall state the number of shares voted
by him.
COPIES OF REGISTRANTS ANNUAL REPORT
SMDC is providing, without charge, copies of its Annual Report, SEC Form 17-A,
to its stockholders upon request.
Contact person:
Maria Sheila C. Racho
SM Corporate Offices, Bldg. A, 1000 Bay Boulevard
SM Central Business Park, Bay City, Pasay City 1300
SIGNATURES
After reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this report is true, complete and correct. This report is signed
in the City of Pasay on March 21, 2006.
SM DEVELOPMENT CORPORATION
Issuer
ROGELIO R. CABUÑAG
President & Chief Operating Officer
Signature & Title