D-Link 2001 Annual Report Download - page 55

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23
D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
16. Financial Instruments
(a) Derivative Financial Instruments
D-Link used foreign currency option contracts and forward foreign currency exchange contracts to
hedge existing assets and liabilities denominated in foreign currencies. The counter-parties of the
derivative contracts are reputable financial institutions. Therefore, management believes that the
risk of default by the counter-parties is remote.
(a) Foreign currency option contracts
As of December 31, 2000 and 2001, D-Link had the following foreign currency option contracts
outstanding:
2000
Contract
Contract
Amount
(in thousands)
Carrying
Value Fair Value Maturity
Call option (sell) USD77,000 (16,006) (49,742) Jan. 2001~Sep. 2001
Call option (sell) EUR14,000 (1,276) (18,067) Jan. 2001~Mar. 2001
Put option (buy) USD14,000 2,528 1,935 Feb. 2001
Put option (buy) EUR2,000 - 225 Jan. 2001~Mar. 2001
2001
Contract
Contract
Amount
(in thousands)
Carrying
Value Fair Value Maturity
Call option (sell) USD116,900 (31,083) (84,632) Jan. 2002~Dec. 2002
Call option (sell) EUR29,000 (1,678) (2,549) Jan. 2002~Apr. 2002
Put option (buy) USD46,000 12,612 2,105 Jan. 2002~Jun. 2002
Call option (buy) USD6,000 1,901 540 Jan. 2002~Feb. 2002
Put option (buy) EUR6,000 - 2,581 Jan. 2002~May 2002