The 2014/15 annual report for Dick Smith Holdings, a major electronics retailer, published in August 2015 was upbeat about the prospects for the company and yet only 5 months later it went into administration.

The administration was followed by suspension of trading in its shares via the ASX. The company's press release announcing the administration referred to disappointing sales and cash generation in the second quarter of the 2015/16 financial year. Many small investors have, collectively, lost millions of dollars because of this collapse. Many people are now asking how such positive messages in August can be followed by such disappointing results for the period October to December of the same year and whether the original messages were accurate.

The Chief Executive of the company has subsequently resigned. Many people, including the founder of the company Dick Smith, have also criticised the former owners of the business, Anchorage Capital Partners. The suggestion is that Anchorage Capital Partners misrepresented the true value and prospects of the firm when it listed the business on the ASX in 2013.

Page 2 of 4

Your assignment is to provide:

(i) a brief summary of the ownership history of the Dick Smith brand,

(ii) a critical evaluation of the valuation of DSH when DSH was acquired by Anchorage Capital Partners and at its initial public offering (IPO), and

(iii) an assessment the ethical dilemmas facing two separate sets of people: Anchorage Capital Partners in respect of the flotation of the business, and the directors and senior executives of Dick Smith Holdings in respect of statements made in the 2014/15 report and accounts.

Marking Guide

Section

Available marks

Introduction

2

A brief summary of the ownership history of the Dick Smith brand

2

a critical evaluation of the valuation of DSH when DSH was acquired by Anchorage Capital Partners and at its initial public offering (IPO)

8

an assessment the ethical dilemmas facing two separate sets of people: Anchorage Capital Partners in respect of the flotation of the business, and the directors and senior executives of Dick Smith Holdings in respect of statements made in the 2014/15 report and accounts.

8

Conclusions

2

Discretionary (e.g. spelling, grammar, presentation)

3

Total

25

Page 3 of 4

The report should comprise the following sections:

Table of contents

Introduction

Body (answers to each question)

Conclusion

Bibliography

The report must:

be typed using one-and-a half (1.5) spacing left justified.

use Arial or font size 12.

display a one inch margin on all sides.

appropriately cite reference original work, author(s) etc. Citation and referencing must conform to Harvard or APA referencing system.