D-Link 2004 Annual Report Download - page 46

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18
D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Continued)
12. Long-term Debts and Lease Obligations Payable
(1) Long-term debts
Bank Credit Line and December 31, Pledged
Purpose Period and Redemption 2003 2004 Assets
Chiao
Tung
Bank
$600 million for
the redemption of
convertible bonds
Due by March 26, 2005; the
principal will be paid in 3 half-
yearly installments starting from
March 26, 2002
$ 600,000 200,000 Plant
(refer to
note 19)
Less: current portion of long-term debts 400,000 200,000
$ 200,000 -
Rate 5.20% 5.20%
The long-term debts are all secured. Certain property was pledged as collateral for long-term
debts (please see note 19).
On August 14, 2003, D-Link updated the contract with Chiao Tung Bank. In this contract, Chiao
Tung Bank agreed to cancel the pledge of plant and equipment; however, the rate of 4.95% was
increased to 5.2%. D-Link must maintain a current ratio (current assets/current liabilities) over
150% and a debt ratio (liabilities/equities) lower than 100%. These financial ratios should be
determined based on the D-Link’s audited financial statements. If D-link could not keep the
financial ratios, Chiao Tung Bank will change the rate to the prime loan rate. The long-term
debts were fully repaid in March 2005.
(2) Lease obligations payable
The components of lease obligations payable as of December 31, 2003 and 2004, are summarized
below:
December 31,
2003 , 2004
Lease obligations payable $ 29,238 25,527
Less: current portion of lease payable (5,972) (3,783)
$ 23,266 21,744