D-Link 2005 Annual Report Download - page 24

The accompanying consolidated financial statements are not intended to present the financial position and
results of operations and cash flows in accordance with accounting principles and practices generally accepted
in countries and jurisdictions other than the Republic of China. The standards, procedures and practices to
audit such financial statements are those generally accepted and applied in the Republic of China.
Independent Auditors’ Report
The Board of Directors
D-Link Corporation:
We have audited the consolidated balance sheets of D-Link Corporation and subsidiaries as of
December 31, 2005 and 2004, and the related consolidated statements of income, changes in
stockholders’ equity, and cash flows for the years then ended. These consolidated financial
statements are the responsibility of the company’s management. Our responsibility is to express an
opinion on these consolidated financial statements based on our audits. We did not audit the
financial statements of certain consolidated subsidiaries included in the consolidated financial
statements. The total assets of these subsidiaries were $1,761,366 thousand and $1,415,984
thousand as of December 31, 2005 and 2004, respectively, and their total revenue was $4,112,339
thousand and $3,018,760 thousand for the years ended December 31, 2005 and 2004, respectively.
Those financial statements were audited by other auditors, whose reports have been furnished to us,
and our opinion, insofar as it relates to the amounts included for those subsidiaries, is based solely on
the reports of the other auditors.
We conducted our audits in accordance with Republic of China generally accepted auditing standards
and the Rules Governing Auditing and Certification of Financial Statements by Certified Public
Accountants. Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial statement presentation.
We believe that our audits and the reports of the other auditors provide a reasonable basis for our
opinion.
In our opinion, based on our audits and the reports of the other auditors, the consolidated financial
statements referred to above present fairly, in all material respects, the financial position of D-Link
Corporation and subsidiaries as of December 31, 2005 and 2004, and the results of their operations
and their cash flows for the years then ended, in conformity with accounting principles generally
accepted in the Republic of China.
As discussed in Notes 3 and 4(6) to the financial statements, D-Link Corporation and subsidiaries
have adopted Republic of China Statement of Financial Accounting Standards No. 35 “Accounting
for Asset Impairment” starting from January 1, 2005, and recognized impairment loss amounting to
$84,500 thousand for the year ended December 31, 2005. Net income and net income per share
decreased by $84,500 thousand and $0.14 New Taiwan dollars, respectively.
Taipei, Taiwan (the Republic of China)
April 14, 2006