D-Link 2001 Annual Report Download - page 44

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12
D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2001 2001
Investee
Percentage
of
ownership
Acquisition
cost
Book
value
Investment
income
(loss)
Equity method:
D-Link India Ltd. 35 $ 32,111 256,356 126,930
Digital China Networks, Ltd.
(DCNL) 43 132,397 352,755 49,253
Cameo Communication, Inc. (CCI) 37 337,165 493,286 112,035
Abocom Systems, Inc. (ACS) 24 154,898 442,747 95,542
Dray Tek Corp. 29 125,612 136,992 15,711
Bothand Enterprise Inc. (BEI) 35 129,796 121,323 21,583
Others 331,824 284,747 (96,935)
1,243,803 2,088,206 324,119
Cost method:
Articula Corporation 309,260 309,260 -
Z-Com,Inc. (Z-Com) 104,300 104,300 -
Tamarack Micro electronics Inc. 168,838 168,838 -
Others 477,209 465,194 -
1,059,607 1,047,592 -
$ 2,303,410 3,135,798 324,119
In July 2000, in order to expand the business related to voice over Internet protocol products, D-Link
invested in a convertible promissory note issued by Articula Corp. From the date of the investment to
July 3, 2004, D-Link has the right to convert the outstanding principal of the note into preferred stock of
Articula Corp. As of December 31, 2001, the outstanding principal of the note amounted to $309,260
(US$9,000K). The convertible promissory note was guaranteed by Clarent Corporation.
During 2000 and 2001, CCI and ACS increased their capital for cash. Differences due to
disproportionate subscription totaled $72,808 and $60,031, respectively, and were recorded as an
increase and a decrease in capital surplus and retained earnings.
During 2000 and 2001, the capital surplus decreased by $1,164 and $8,563, respectively, due to the
disposal of the equity investment in ACS.
In 2001, D-Link found there was a permanent impairment in the value of its equity investment of Ehoo
Technology Holding Ltd. An investment loss equal to its carrying amount of $27,132 was recognized to
reflect such decline.