KOSDAQ :

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KOSDAQ A Window into the Korean Capital Market
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(No Transcript)
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I About KOSDAQ
01. KOREA IT Industrial Development
( World Competitiveness)
2nd
12th
5th
12th
Trade Scale(2003)
Automobile
Shipbuilding
GDP(2002)
5th
1st
2nd
1st
TFT-LCD
Internet User(2003)
Mobile Phone User(2003)
Semiconductor
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I About KOSDAQ
02. KOSDAQ is
? KOSDAQ has achieved unprecedented growth along
with that of Korea's flourishing IT industry. ?
Entrepreneurial pioneers in the IT, BT, and CT
industries are making their dreams come true
through KOSDAQ and they form a vital resource for
Korea's future economic growth.
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I About KOSDAQ
02. Key Statistic - Among Asia New Markets
listed cos
Trading Value
Daily Avg. Trading Value (DEC,2003)
874
843
(Unit bil.KRW)
(Unit Cos)
1000
702
1,728
1,205
500
395
359
429
Gre Tai (Taiwan)
JASDAQ (Japan)
KOSDAQ (Korea)
4
99
97
01
02
03
99
97
01
02
03
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I About KOSDAQ
03. Key Statistic - Global Status
(US bil.)
Rank No. of Listed Companies Rank Accumulated Trading Value Rank Market Cap.
1 Mumbai(5,644) 1 NYSE (9,692) 1 NYSE (11,328)
2 TSX Group(3,616) 2 Nasdaq (7,068) 2 Tokyo (2,953)
3 Nasdaq(3,294) 3 London (3,624) 3 Nasdaq (2,844)
4 Spanish Exchange (BME)(3,223) 4 Tokyo (2,130) 4 London (2,425)
14 KOSDAQ(874) 13 KSE (459) 16 KSE (298)
17 KSE(684) 19 KOSDAQ(223) 41 KOSDAQ(31)
WFE Dec. 2003
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Mission of KOSDAQ XBRL Project
Active support of companies seeking
growth (Increase brand value)
Protect investors thru increased transparency
(Build investor confidence)
Make efforts to set global standards for a sound
capital market (Enhance market integrity)
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Pilot
Star
IRM
II Review of XBRL Pilot Project
01. Introduction - Project Goal
Establish K-GAAP Taxonomy
- Approval from XBRL International- XBRL
adoption among participating Korean Companies
Increasing Market Transparency
- Provide standardized Financial Statements
through XBRL - Empower investors by providing
enhanced analytical tools
Frontier in XBRL Technology in Korea
- KOSDAQ is the first organization in Korea to
deploy XBRL
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Pilot
Star
IRM
II Review of XBRL Pilot Project
02. Approach - Tasks Steps
Phase 2. Extended FSS Taxonomy (Commercial
Industrial)
Phase 1. K-GAAP Taxonomy (Korean Standards)
K-GAAP Taxonomy Definition/ Establishment based
on Korean Companies Accounting Principles
In actual industry accounting practices over
2,500 accounts were used, FSS Element Extension
Naming and defining down to the level of
Individual Companys User defined Accounts
(excluded in FSS Accounts Schema)

FSS Financial Supervisory Service
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Pilot
Star
IRM
II Review of XBRL Pilot Project
03. XBRL Pilot Service in KOSDAQ
Expansion
GAAP Taxonomy (815 representative accounts)
FSS Taxonomy (2,541 detail accounts)



Mapping Table
Auditors Report in Annual Report(SGML)
XBRL Instance Document
Converter

On-line Viewers (Web)
Off-line Viewers (Excel)
View/ Analyze
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Pilot
Star
IRM
II Review of XBRL Pilot Project
03. XBRL Pilot Service at KOSDAQ
Excel-based Financial Analytical Tool
KOSDAQ Web-based Financial Analytical Site
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Pilot
Star
IRM
II Review of XBRL Pilot Project
03. XBRL Pilot Service at KOSDAQ

• Effects on Foreign Investor
• Market Cap. Movement

XBRL Service Advertisement to Foreign Investors
XBRL Service Launch
7 Jan 2004
26 Dec 2003
22 Apr 2004
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Pilot
Star
IRM
III Star Index Project
01. Introduction Why Star index project?
Success of XBRL Pilot Service Recognition of
Value of XBRL
Star Index Selection
Increased Demand for XBRL Services by Listed
companies
Maximizing Value of XBRL thru Selection of High
Quality Companies
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Pilot
Star
IRM
III Star Index Project
01. Introduction Why Star index project?
Star Index Companies chosen based on SUPERIOR
earnings performance, financial soundness,
corporate governance, liquidity and market
cap.(37.5)
Corporate governance
Financial soundness
Earnings performance
BLUECHIP Index of KOSDAQ
NASDAQ ? Nasdaq100 KOSDAQ ? Star30
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Pilot
Star
IRM
III Star Index Project
02. Enhanced Features of Star Index Project
Phase 2 Star Index Project
Phase1 Pilot Project
15 sample companies
30 Star index Companies
(1)
FSS Taxonomy
Company Level Taxonomy
(2)
FSS Code
KOSDAQ Code
(3)
Additional Non-Financial Information
Financial Information only
(4)
Pilot Application
Advanced Application
(5)
Taxonomy Versioning
(6)
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Pilot
Star
IRM
III Star Index Project
02. Enhanced Features of Star Index Project
STAR Index Project
Pilot Project
GAAP Taxonomy
GAAP Taxonomy
Element Name
Element Name
FSS Taxonomy
B Company Taxonomy
A Company Taxonomy
C Company Taxonomy
KOSDAQ Code
FSS Code(SGML)
As Auditors Report
Bs Auditors Report
Cs Auditors Report
As Annual Report
Bs Annual Report
Cs Annual Report
Financial Information
Financial Non-Financial Information
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Pilot
Star
IRM
III Star Index Project
03. Approach (1) 30 Star Index Companies
Pilot Project
Star Index Project
Samil(PwC), UBmatrix
Contractor
15 Companies
30 Star Index Companies
Samples
15 Weeks (28 Jul 0310 Nov 03)
12 Weeks (29 Mar 0417 Jun 04)
Duration
Universal Studio Web Analyzer Oracle, JSP, Excel
UB Automator Web Analyzer Oracle, JSP, Excel
Software
Korean GAAP Taxonomy Web/Excel Analyzer
K-GAAP 30 Companies Taxonomy Web/Excel Analyzer
Deliverables
PHASE 1
PHASE 2
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Pilot
Star
IRM
III Star Index Project
03. Approach (2) Company Level Taxonomy
? Taxonomy can be detailed into Each Individual
Company Level ? Inherited from Korean GAAP
Taxonomy ? Presentation and Calculation Separated
1. Analysis of Financial Statements for 30 Listed
Companies
2. Create Taxonomy Elements inherited from Korean
GAAP Taxonomy
3. Mapping FSS Code-KOSDAQ Code to Elements
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Pilot
Star
IRM
III Star Index Project
03. Approach (3) KOSDAQ Code
? Create KOSDAQ Code and Mapping in accordance
with FSS Code ? Mapping Individual Company Level
Taxonomy Elements
Financial Reports (FSS Code)
Converting FSS code to KOSDAQ code

• FSS code
• - 14 digits
• - approx. 3,000
• accounts

• F/S code Hierarchy code FSS code
• - 21 digits

• Designed system
• environment to
• accept company
• level taxonomy
• - Meaningful user
• defined code

• Limit of FSS code
• - meaningless
• user defined
• code(approx8)
• - lack of F/S
• hierarchy

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Pilot
Star
IRM
III Star Index Project
03. Approach (4) Non-Financial Information
? Non-financial Indices from Annual Report is
Taxonomy-Structured ? Key Indices from Annual
Report
Label_Korean Label_English Name Parent Name Order
???? Employee Information EmployeeInformation Key Performance Indicator of Annual Report 1
?????? Research and Development Cost Information ResearchandDevelopmen-tCostInformation Key Performance Indicator of Annual Report 2
?????? Credit Evaluation Grade Information CreditEvaluationGrade-information Key Performance Indicator of Annual Report
. . . . . . 4
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Pilot
Star
IRM
III Star Index Project
03. Approach (5) Advanced Application
? Taxonomy Building / Instance Creation
Taxonomy was made with excel imported into
Automator to generate XSD file.
UBMatrix Automator
Microsoft Excel
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Pilot
Star
IRM
III Star Index Project
03. Approach (5) Advanced Application
? Develop Web Analyzer
Enhanced graphic display to compare annual
information from multiple companies
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Pilot
Star
IRM
III Star Index Project
03. Approach (5) Advanced Application
? Develop Excel Analyzer
Visual financial data. Simplified user interface
for easier navigation.
Visualization of financial data
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Pilot
Star
IRM
III Star Index Project
03. Approach (6) Taxonomy Versioning

• The Labels of elements in individual taxonomy
  could be changed in annual financial reports.
• Taxonomy Version Management through
  differentiation of Label in Years.
• The custom roles of label is defined for label
  versioning.

Label Linkbase Presentation Linkbase Calculation
Linkbase Reference Linkbase Definition Linkbase
Custom label roles http//www.kosdaq.com/2004/role
/label1999 http//www.kosdaq.com/2004/role/label20
00 http//www.kosdaq.com/2004/role/label2001
KGAAP (XML Schema)
Instance document
Standard label role http//www.xbrl.org/2003/role/
label
Label Linkbase Presentation Linkbase Calculation
Linkbase Definition Linkbase
Individual taxonomy (XML Schema)
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Pilot
Star
IRM
III Star Index Project
04. Benefits
Structured Taxonomy Elements will be Mapped to
Each Companys Accounting System
Individual Companies Can Manage Taxonomy Elements
XBRL formatted Financial Information will be
Saved in Repository as Data Base
KOSDAQ Code acts as a Buffer Adjusting to Changes
in Companys New Transaction Accounting Terms
Key Performance Indicators from Annual
Report will be provided to Investors in XBRL
Non-Financial Information Can be Standardized
Platform Leading into Global IR Project
Expanding the number of Applied Companies
Linking Financial Statements to Non-Financial
Info. will Enhance Corporate Performance Analysis
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IV Global IR Management Project
01. Introduction Why Global IRM Projcet?

• The traditional financial reporting model is no
  longer adequate
• Declining relevance of historical data as an
  indicator of future performance
• The market wants more information about
  non-financial factors

True Value
Star Index Project
XBRL Pilot Project
Under-value
Additional Non-Financial Information
Financial Information
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Pilot
Star
GIRM
IV Global IR Management Project
01. Introduction Why Global IRM Project?
To Provide Value Embedded Corporate Management
Contents" to the market more efficiently
NOW
After Global IRM Project
Information needs
Information needs
Information Gap
Added Value Reporting
Information Gap
Analyst Corporate Reports Forecasts
Analyst Corporate Reports Forecasts
Reporting to Financial Supervisor
Reporting to Financial Supervisor
Typical Financial Information
Typical Financial Information
? Time
2000 Time
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Pilot
Star
GIRM
IV Global IR Management Project
01. Introduction Why Global IRM Project?
KOSDAQ CEO Survey (03.11.18)
Do you believe your share price accurately
reflects the true underlying value of your
company? Over 80 companies believe theyre
undervalued
Question 1.
Does the market fully reflect a companys true
valuation? What more could KOSDAQ do for the
companies to be evaluated correctly in the
market? - More IR Promotion to
domestic/overseas 81.4
Question 2.
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Pilot
Star
GIRM
IV Global IR Management Project
01. Introduction Project Goal
Capital Market Efficiency
Do the Right Thing
Do Things Right
Correct Evaluation of companies with New Global
IR Model
Integrity of Informationusing XBRL
Global IR Best practicesEstablishing Benchmarks
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Pilot
Star
GIRM
IV Global IR Management Project
02. Approach

• Analytical Review of Disclosure, Corporate
  Information
• CEO, CFO Interview/Survey

Analyze Current Status of Sample Companies
(1)

• Review of Analyst, Fund Manager reports
• Capital Market Stakeholders Interview/Survey

Review Verify Market Information
(2)

• Industry KPI to meet Global IR Standards
• Industry Standardized Investor Briefing Model

Establishment of Standardized IB Model
(3)

• Industry Standardized IB KPI Taxonomy
• Reference check for KPI validation

Industry StandardizedTaxonomy
(4)

• Web Design Application support
• Provide Information on the Web

Web Designing Mapping
(5)
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Pilot
Star
GIRM
IV Global IR Management Project
02. Approach Project Diagram
Listed Companies
Market
On-line Viewers (applet)
Taxonomy Builder Build Data Elements
Achieve Correct Corporate Evaluation Efficient
Capital Market
Value Reporting Data
F/S, Disclosure Data
Off-line Viewers (eNumerate, Excel, etc.)
Marketing Data
VR
F/S
View/Analyze
Apply inDomestic/ Overseas IR Fair Disclosure
Investor Briefing Standardized Report
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Pilot
Star
GIRM
IV Global IR Management Project
03. Benefits
BENEFITS
Market Participants
GOAL
More Financial Resources
Your Market Of Choice in N-E ASIA
Upgrades Service for Star Index Companies
Visibility (Greater Brand Value)
Correct evaluation
Transparent Information Builds
Investor Confidence
Enhanced Application Tool
Better Investment Decisions
Increase the Market Stability
Improved MarketQuality Integrity
New Biz Model
Promotion of IR Model
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Pilot
Star
GIRM
IV Global IR Management Project
03. Benefits

• Kosdaq listed companies are IT start-ups? Active
  co-operation is required for project success
• Lack of IR capability in smaller listed companies
• The critical role that Non financial data plays
  in evaluating Corporate value in certain
  industries (i.e. IT speed to Market of new
  services)

• Provide relevant material information about KPI
  of each company
• Detailed Feedback from each company to generate
  Industry KPI data by Kosdaq

During Project
Listed CompaniesActive Co-operation

• Periodical updates of KPI of each company
• Utilize of KPI information in domestic/oversea IR
  Increased reliability of the KPI information

After Project

• Assume Intermediary role of Providing New Form of
  Data in XBRL format Between consulting firms
  listed companies
• Establish New Biz Model Industry IR Tools (IB
  Template) Providing Financial Information
  services

KOSDAQ Stock Market
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Summary of KOSDAQ XBRL Project
XBRL Global Standard for Corporate Financial
Reporting, Container of Corporate Disclosure
Information,
Global IR Management Framework Contents to
analyze Corporate Management Key Performance
Indicators
KOSDAQ Stock Market Increased self-regulatory
capability enhances Financial Information Supply
Chain
eXtensible Business Reporting Language
Container
Key Performance Indicators
Contents
Enhanced Reporting Analysis Service
Business

• Create Instance Document thru Corporate
  Regulatory Reports Creation of Taxonomies

• XBRL Application to Star Index
• Financial Institutions Analysiswith KPI of
  Global IR Mgmt

• On-Line Analytical Processing Marketing of
  Financial Institutions Analysis

Application to Star Index companies
Global IR Mgmt Framework
Financial Institutions
KOSDAQ
Reports
Strategy
Market Overview
Taxonomy ( e.g. ltdepositgt100lt/depositgt)
Excel Server
Value Platform
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V Next Steps
01. KOSDQs Efforts
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Asia New Market Forum (Seoul, Taipei)
MOU with Gretai Securities (Taipei) Shenzhen
Stock Exchange (China)
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Global IR (NY, HK, London)
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5
0
00
01
02
03
Mar. 04
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V Next Steps
02. Next Steps

• Co-operate with FSS, KSE for Korea
  Standardization in Working Group
• Announce K-GAAP Taxonomy as Standard Financial
  Reporting for Korean Companies with the aid of
  FSS, KSE KASB
• Co-operation with FSS to improve e-disclosure
  infrastructure from existing SGML to XBRL XML.

XBRL Intl Approval on K-GAAP Taxonomy

• Stock Exchanges adopting XBRL (Canada, New
  Zealand, Japan, China etc.) Global Information
  Vendors (Bloomberg, Reuters etc.)
• Sharing Knowledge of XBRL Project know-how
• - XBRL Format Financial Information Exchange
• - English Disclosure Exchange

Strategic Global Alliances

• Value Reporting Enhancement
• ASP Service using XBRL
• Expand participating companies by Market
  Consolidation (2004)

After Global IR Management Project

• KSE Korea Stock Exchange KASB Korea
  Accounting Standards Board

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V Next Steps
03. Vision of KOSDAQ
Building Public Trust
Restoring growth balance between SMEs
Conglomerate
Facilitating growth in Knowledge-based industries
Enhancing competitiveness of exchange industry
COMPANIES
INVESTORS
Providing Venture Capital
Providing various investment tools
through XBRL
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Demo XBRL Website Main
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Demo Single Company
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Demo Multi-Company
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Demo Excel Analyzer Main
?
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Demo Single Company
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Demo Excel Analyzer Main
?
?
?
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Demo Multi-Company
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Thank you!
MINHEE SHINmhshin_at_kosdaq.com