D-Link 2005 Annual Report Download - page 48
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D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Continued)
(k) Stockholders’ Equity
(1) Common stock
In 1998, D-Link issued 5 million Global Depository Receipts (“GDRs”). Each GDR
represents 5 common shares and was offered at ten U.S. dollars and thirteen cents per GDR.
The GDRs were publicly listed on the Luxembourg Stock Exchange at September 24, 1998.
Pursuant to a stockholder’s resolution on May 28, 2004, D-Link increased its common stock
by $353,484 thousand through the transfer of employees’ bonuses and capital surplus of
$100,000 thousand and $253,484 thousand, respectively. The capital increase was
registered with the government authorities in August 2004.
Pursuant to a stockholders’ resolution on June 17, 2005, D-Link increased its common stock
by $604,693 thousand through the transfer of stockholders’ bonuses, employees’ bonuses
and capital surplus of $107,339 thousand, $68,000 thousand and $604,693 thousand,
respectively. The capital increase was registered with the government authorities in August
2005.
As of December 31, 2005 and 2004, the authorized capital totaled $6,600,000 thousand
(including $1,000,000 thousand authorized for the conversion of convertible bonds and
$250,000 thousand authorized for the issuance of the employee stock options). As of
December 31, 2005 and 2004, the issued capital amounted to $6,091,618 thousand and
$5,475,211 thousand, respectively. The par value of D-Link’s common stock is ten New
Taiwan dollars per share. On February 28, 2005, because the convertible bonds had been
fully converted or redeemed, a board of directors resolution revised the amount authorized
for the conversion of convertible bonds to $0.
D-Link applied to the Securities and Futures Bureau (SFB) to issue 25,000 thousand units of
employee stock options on May 27, 2003. Each unit of employee stock options can
purchase one common share, and the total amount of common shares for employee stock
options is 25,000 thousand shares. D-Link will issue new common shares to redeem the
stock options. The application was approved by the SFB on June 6, 2003, but the employee
stock options had not been issued as of December 31, 2005.
(2) Capital surplus
Pursuant to the ROC Company Law, with the exception of capital surplus originating from
long-term equity investments accounted for by the equity method, capital surplus can only be
used to offset a deficit and cannot be used to declare cash dividends. However, capital
surplus derived from additional paid-in capital and earnings from gifts received can be used
to increase share capital if there is no accumulated deficit. According to current SFB
regulations, capitalization of capital surplus cannot exceed a rate of ten percent and can be
done only in years after the year in which such capital increase is registered with the
authorities.