Taiwan Stock Exchanges XBRL Project LiNing Chen Taiwan

Taiwan Stock Exchange’s XBRL Project Li-Ning Chen Taiwan Stock Exchange 2009/06/24

Agenda ■ About TWSE ■ Overview of Electronic Disclosure System ■ Why XBRL ■ Project Implementation ■ Future Issues ■ Taxonomy Development 1

About TWSE 2

About TWSE ■ Founded in 1961 ■ TWSE is the primary equities market in Taiwan ■ Products : • Stocks, Warrants, ETFs, TDRs and Corporate Bonds ■ MSCI upgraded Taiwan to its watch list for Developed Market ■ One of the world’s most active securities markets 3

About TWSE ■ Competitive edges: • Good P/E Ratio: 9. 8 x(2008), and 15. 31 x(2007) • High Share Turnover Velocity: Market turnover rate is 145. 55%(2008), ranked 11 th worldwide and 4 th in Asia • Excellent Dividend Yield: 9. 83%(2008) • Foreign Investment: Foreigners are major shareholders of many companies, such as TSMC(72. 57%)*, Delta Electronics(67. 27%)* * Data shown in parentheses were at the end of April, 2009 4

Overview of Electronic Disclosure System 5

Overview of electronic disclosure system Aim to reduce reporting burden and to enable data-sharing Listed Companies • Disclosure Requirements One-Stop Portal • MOPS – Launched in 2002 Investors • Inquiry of all disclosure information required by FSC & TWSE via MOPS 6

Requirements of disclosure • Based on the Securities and Exchange Law • Securities report , Annual report, Semi-annual report , Quarterly report Filing via PDF, word copy of financial report with account items of 3 statements: Balance sheet Income Statement Cash Flow Statement(Summary) Legal Disclosure (FSC) • Based on the rules of the Securities Exchange • Periodically: • Monthly • Revenues, Derivatives trading, Balances of Endorsements, guarantees • Non-periodically : • Important event Timely Disclosure (TWSE) 7

Why XBRL? 8

Why XBRL? XBRL will benefit the listed companies (Increase brand value) Exposure to foreign capital markets A Sound Capital Market Transparency Market Efficiency Harmonization with international standards (IFRS+XBRL ) 9

Project Implementation 10

2005/04 XBRL Feasibility Study Conducted by 2006~2007 Learning & understanding XBRL Pre-Project Milestone 2006/10 Recommendation by 2008/11 XBRL Steering Committee Established 11

Organization of XBRL Steering Committee Financial Supervisory Commission Authority XBRL Steering Committee TWSE Working Group Taxonomy Developing System and Tool Developing Regulation Training & Promotion Jurisdiction Developing 12

Road Map of XBRL Project The key is to promote wider understanding and acceptance of XBRL among investors, companies and public step by step Phase 1 2008/12 Phase 2 2010/05 Phase 3 2010/09 XBRL Demo Site Voluntary Filing Mandatory Filing Increase awareness 2009 4 th quarter Financial Statements 2010 1 st half Financial Statements 13

Introduction of XBRL Service Demo Site n Cooperation with n Number of Companies： 77 • 46 of companies from commercial & industrial industry: electronic, cement, food, plastic, textile and steel • 31 of companies from financial industry: banking and insurance n Year covered： 2001~2008 n Financial Statements： ü Balance Sheet ü Income Statement ü Cash Flow Statement n Implementation：By Converting existing data into XBRL format 14

Function- Inquiry of Statements 15

Function- Ratio Analysis 16

Function- Multiple Companies Comparison 17

Project Milestone The key is to reduce the cost and obstacles of listed companies by providing a free and user-friendly tool 2008/12 Taxonomy for Acknowledgment 2009/03 Draft Taxonomy from XII Commercial and industrial 2009/05 2009/09 Received XBRL Tool Acknowledgement Draft version from XII Released for Comment • Financial Holding • Banking • Insurance • Securities Commercial and industrial 2010/05 2010/09 Voluntary Mandatory Filing Release for Comment & Test Public Engagement • Seminar • Training course 18

Future Issues 19

Future Issues Continue to promote XBRL Create listed companies club (experience sharing) - Facilitate adoption of XBRL for internal reporting in listed companies Use XBRL data to build a more efficient supervisory system Extend XBRL to include disclosure of other relevant information, such as timely disclosure Upgrade the electronic disclosure system and to become a data exchange platform 20

Taxonomy Development 21

TW Taxonomy Development Process Design Scope of Taxonomy Collect Information Financial Report Preparing Standard Academics Interview Standardize Accounts & Account No. TW-GAAP With accounting academics Establish Taxonomy Public hearings MOPS Conferences taxonomy working group Consult with CPA Firms Other successful cases XBRL Team Feedback Finish Taxonomy 22

TW Taxonomy Framework Taiwan Taxonomy C&I Fh Basi Ins Mim Bd Taxonomy Taxonomy 23

Current Taxonomy Scope Balance Sheet multi -industry XBRL Specification v. 2. 1 & Dimension 1. 0 Income Statement multi-industry Instance documents Statement of Stockholder’s Equity multi-industry Statement of Cash Flows multi-industry 24

In the near future… § Already applying for taxonomy recognition and will be posted shortly § Footnotes – relatively simple now § Related-party transactions § Mortgaged assets § Endorsement disclosure § Accountant’s reports and other complementary disclosures § Company Extensions § Prepare for IFRS adoption in 2013

Lessons Learned (1) § Key Successful Factors: Project Continuance Education & Communication Organization & Budget Taxonomy Technology Inception Planning Elaboration Construction 2004~2006~2008~2009~2010

Lessons Learned (2) § Pros and cons of “Free tools”: § Will reduce the preparer’s adoption cost § Will reduce software company’s incentive of investing in XBRL as well § Should be considered as a short-term vehicle

Taiwan seeks for your supports… § Taiwan seeks to participate in XBRL International in order to both promote the adoption of XBRL in Taiwan and further contribute to the development of global reporting specifications and taxonomies. § We need your great supports, especially our friends from China.

Taiwan Stock Exchange http: //www. twse. com. tw/en/ For further information: Li-Ning Chen Email: 1003@twse. com. tw Chi-Chun Chou E-mail： ccchou 412@gmail. com 29

Taiwan Stock Exchange http: //www. twse. com. tw/en/ For further information: Li-Ning Chen Email: 1003@twse. com. tw CCChou E-mail： ccchou 412@gmail. com 30