D-Link 2014 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2014 D-Link annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 92

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92

41
D-LINK CORPORATION AND SUBSIDIARIES
Notes to the consolidated financial statements
(Continued)
In order to adjust to the overall business environment, industry growth characteristics, long-term
financial planning, and corporate sustainable management, the Company adopts a residual
dividend policy. The Company will distribute capital in excess of its required capital as cash
dividends, which cannot be lower than 10 percent of total dividends.
(i) Legal reserve
According to the ROC Company Act, the Company must retain 10% of its annual income
as a legal reserve until such retention equals the amount of authorized common stock.
When the legal reserve has exceeded 25% of the Company’s paid-in capital, the excess may
be transferred to capital or distributed in cash based on the resolution of the shareholders’
meeting if there is no accumulated deficit.
(ii) Special reserve
In accordance with Ruling No. 1010012865 issued by the Financial Supervisory
commission on 6 April, 2012, a special reserve equivalent to the net debit balance of
shareholders’ equity shall be made from the current after-tax net income and the prior
unappropriated earnings pursuant to existing regulations promulgated by SFB. The
Company shall not distribute the special reserve equivalent to the net debit balance of
shareholders’ equity from the prior fiscal years made from the prior unappropriated
earnings. Any special reserve appropriated may be reversed to the extent that the net debit
balance reverses. The Company’s shareholders meetings on June 20, 2014, and June 14,
2013 approved to reverse the legal reserve amounting $162,563 thousand and recognized
$420,104 thousand, respectively.
(iii) Earning distribution
The Company measured the bonus of employees amounting to $1,532 thousand and $7,454
thousand, and measured the directors’ and supervisors’ remuneration amounting to $1,532
thousand and $7,454 thousand, which is calculated by using the net income after deducting
the legal reserve of 10% net income, provision or reversal of special reserve in 2014 and
2013, then multiplying the distribution rate of 1% of the employee bonus and the directors’
and supervisors’ remuneration. The number of shares distributed as stock dividends is
calculated based on the closing price of the shares on the day before the shareholders’
meeting, while taking into consideration the ex rights and ex dividend effects. If the
distributed amount, which is based on the resolution of the shareholders’ meeting, differs
from the estimated amount, the difference will be treated as a change in accounting
estimates and recorded as income/loss in 2015 and 2014.
The Company’s shareholders meetings on June 20, 2014, and June 14, 2013 resolved to
distribute earnings as employee bonuses and directors’ and supervisors’ remuneration in
2013 and 2012 as follows: