Via ODiSy March 22, 2012 PHILIPPINE STOCK EXCHANGE ... - BDO

- 104 -19.02 Capital AllocationThe allocation of capital between specific operations and activities is, to a large extent,driven by optimization of the return achieved on the capital allocated. The amount ofcapital allocated to each operation or activity is based primarily upon the regulatorycapital, but in some cases the regulatory requirements do not reflect fully the varyingdegree of risk associated with different activities. In such cases the capital requirementsmay be flexed to reflect differing risk profiles subject to the overall level of capital tosupport a particular operation or activity not falling below the minimum required forregulatory purposes. The process of allocating capital to specific operations andactivities is undertaken independently of those responsible of the operation and issubject to review by the ALCO.Although maximization of the return on risk-adjusted capital is the principal basis used indetermining how capital is allocated within BDO Unibank Group to particular operationsor activities, it is not the sole basis used for decision making. Account also is taken ofsynergies with other operations and activities, the availability of management and otherresources and the fit of the activity with the longer term strategic objectives. The policiesin respect of capital management and allocation are reviewed regularly by the BOD.19.03 Capital StockCapital stock consists of the following:Number of Shares2011 2010Common shares – P10 par valueAuthorized – 4,500,000,000 sharesIssued, fully paid and outstandingBalance at beginning of year 2,607,437,907 2,339,768,510Issued during the year - 267,669,397Balance at end of year 2,607,437,907 2,607,437,907Preferred shares – P10 par valueAuthorized – 2,000,000,000 sharesIssued, fully paid and outstanding 500,000,000 500,000,000Amount2011 2010Common sharesBalance at beginning of year P 26,074 P 23,397Issued during the year - 2,677Balance at end of year P 26,074 P 26,074Preferred shares – Issued, fully paid and outstanding P 5,000 P 5,000