KSD’s Infrastructure for Cross-Listing of Foreign Companies KSD’s Infrastructure for Cross-Listing of Foreign Companies October 18, 2007 Bishkek, Kyrgyzstan Jae Woong (James) Kim

Contents 1 KSD ’ s International Services 2 3 Korean Stock Market KSD ’ s KDR Depositary Service for Foreign Co.

KDR Depositary Custodian for ADR(GDR) Underlying Shares Custodian for ADR(GDR) Underlying Shares PrimaryMarketPrimaryMarket DomesticCompaniesDomesticCompanies 국내증권시장국내증권시장 DomesticMarketDomesticMarket ForeignCompaniesForeignCompanies 국내증권시장국내증권시장 OverseasMarketOverseasMarket Domestic Securities Custody & Settlement Domestic Securities Custody & Settlement Foreign Securities Custody & Settlement Foreign Securities Custody & Settlement SecondaryMarketSecondaryMarket DomesticInvestorsDomesticInvestors ForeignInvestorsForeignInvestors 국내증권시장국내증권시장 DomesticMarketDomesticMarket 국내증권시장국내증권시장 OverseasMarketOverseasMarket One Single Gateway for International Securities Investment KSD’s International Services 1 1

KSD’s Foreign Securities Custody for Domestic Investors KSD’s International Services USD Billions Global Custody - General Investors : Mandatory - Institutional Investors : Optional Global Custody - General Investors : Mandatory - Institutional Investors : Optional Cross-border Clearing Network (32 Markets) Cross-border Clearing Network (32 Markets) Communication - SAFE21, SWIFT, - SAFE21, SWIFT, - Sub-Custodian’s Proprietary S/W - Sub-Custodian’s Proprietary S/WCommunication - SAFE21, SWIFT, - SAFE21, SWIFT, - Sub-Custodian’s Proprietary S/W - Sub-Custodian’s Proprietary S/W Custodian - Euroclear, Clearstream Bank - Euroclear, Clearstream Bank - Citibank, BNY, SSB, Pershing - Citibank, BNY, SSB, PershingCustodian - Euroclear, Clearstream Bank - Euroclear, Clearstream Bank - Citibank, BNY, SSB, Pershing - Citibank, BNY, SSB, Pershing 2 2

KSD’s Domestic Securities Custody for Foreign Investors KSD’s International Services + + Total Asset under Custody (Sep. 30, 2007) : Equity Mil. Shares for 40 Clients Core Services Securities Custody Securities Custody Cash Management Linked Cash Management Linked with FX Banks with FX Banks Added Value Services Standing Proxy Standing Proxy Securities Lending & Borrowing Securities Lending & Borrowing Tri-party Repo Tri-party Repo Communication Web-based Local Custody Web-based Local Custody System / Fax / SWIFT / Telex System / Fax / SWIFT / Telex Direct A/C Opening & Securities Custody by CSD Direct A/C Opening & Securities Custody by CSD Investment Registration to Financial Supervisory Service (FSS) Investment Registration to Financial Supervisory Service (FSS) Corporate Actions (Voting Right, Dividend, Bonus Issues, etc.) Corporate Actions (Voting Right, Dividend, Bonus Issues, etc.) Communication - SAFE21, SWIFT, Local Custody System - SAFE21, SWIFT, Local Custody SystemCommunication Benefits of Custody to KSD 3 3

KSD’s International Services For domestic companies that issue ADR or GDR Custody Agreement –Bank of New York –Citibank N.A. –Deutsche Bank Trust Company –JP Morgan Chase Korean Companies’ ADR & GDR: 43 issues Market Share of KSD in Korea: 100% Total Custody Shares: 554 million KSD’s Custody Services for Domestic Companies issuing ADR(GDR) 4 4 Mil. Shares

KDR Korean Depositary Receipt KDR KSD is the only depositary that can issue KDR in Korea pursuant to the Securities Exchange Act and its Enforcement Decree KSD is the only depositary that can issue KDR in Korea pursuant to the Securities Exchange Act and its Enforcement Decree Companies3NOD Huafeng Textile Yonhap Tech. Yonhap Tech. Cowell E Holdings French ETF STX Pan Ocean Nepro IT Establishment Cayman Cayman Hong Kong Cayman France Korea Japan Issuing Country Korea Hong Kong Korea Korea France Singapore Korea Foreign Listing Non-Listing Hong Kong Non-Listing Non-Listing Euronext Singapore Non-ListingMigrationX O X X X O O Listing Type Share KDR Share Share ETF Share KDR Listing Schedule November December December December December 2008 Foreign Companies’ Listing to Korean Market Foreign Companies’ Listing to Korean Market KDR is issued by KSD based on original shares issued by foreign companies KSD’s International Services KSD’s KDR Depositary service for Foreign Companies 5 5

KDR Issuance KDR Distribution Korea Overseas Issuance of Original Shares FSS Lead Manager Subscription Handling Co. Investors Issuing Co. Custodian KRX Securities Report CustodyAgreement Deposit Agreement Listing Application Underwriting Agreement Notification of Listing Issuance of KDR KDRDepositary (Primary Market) CSD CSD (Secondary (Secondary Market) Market) KSD KSD’s KDR Depositary Service for Foreign Companies 6 6

Seller Overseas Custodian Settlement Korea Korea KSD Trading KRX * No Changes in KSD a/c KSD’s KDR Depositary Service for Foreign Companies KDR Trading & Settlement Seller Buyer Seller’s a/c Seller’s a/c Buyer’s a/c Buyer’s a/c KSD’s a/c 7 7

Share Conversion into KDR Share Conversion into KDR KDR Selling Share Price KDR 가격 KDR Price Share Selling KDR Cancellation to Shares KDR Cancellation to Shares KDR 가격 Share Price KDR Price KDR Conversion & Cancellation KSD’s KDR Depositary Service for Foreign Companies ArbitrageTrading KDR Conversion & Cancellation takes 2 ~ 3 business days KDR Conversion & Cancellation takes 2 ~ 3 business days 8 8

Custodian 2. Instruction of KDR Receipt 1. Application of KDR Conversion 6. KDR Issuance & KDR a/c Credit KDR a/c Credit 3. Share Transfer to KSD a/c & Application of KDR Conversion 5. Notification of Share Receipt & Request for KDR Issuance Overseas Agent Overseas Agent Korean Agent Korean Agent 4. Request for KDR Issuance KDR Issuance Share Conversion into KDR: KDR Price > Share Price KSD’s KDR Depositary Service for Foreign Companies Shareholder 9 9

KDR Cancellation to Share: Share Price > KDR Price KSD’s KDR Depositary Service for Foreign Companies Custodian 1. Instruction of KDR Cancellation 2. Instruction of Share Receipt Share Receipt 6. Confirmation of Share Transfer 5. Share Transfer 4. Instruction of Share Transfer Overseas Agent Overseas Agent Korean Agent Korean Agent 3. Request for KDR Cancellation KDR Cancellation KDR Holder 7. KDR a/c Debit 10

◈ Liquidity Premium of DR Issuing Companies 33% Cross-listing by listing ADRs Cross-listing by listing GDRs Non Cross-listing by listing ADRs 14%224% KSD’s KDR Depositary Service for Foreign Companies Economic Benefit of KDR Issuance Craig Doidge, G. Andrew Karolyi, & Renee M. Stulz, “Has New York become less competitive in global market? Evaluating foreign listing choices over time” (Dice Center working paper, April 23, 2007), Analysis between 1997 to

4. Right Exercise 1. Notification of Record Date, etc Record Date, etc 5. Right Exercise 2-1. Notification of Record Date, etc. 6. Right Exercise Exercise KDR Holders can exercise rights only through KSD (Depositary) - KDR Holder → Participant → CSD → Depositary → Custodian → Issuing Co. KDR Holders can exercise rights only through KSD (Depositary) - KDR Holder → Participant → CSD → Depositary → Custodian → Issuing Co. Right Exercise of KDR Indirect Right Exercise Direct KDR Holders need to cancel KDRs to shares and exercise as shareholders - Minority Shareholders Right (Shareholder’s right to proposal, etc) KDR Holders need to cancel KDRs to shares and exercise as shareholders - Minority Shareholders Right (Shareholder’s right to proposal, etc) Custodian Issuing Co. Disclosure Agent Disclosure Agent KDR Holder 2. Notification of Record Date, etc Record Date, etc 3. Notification of Right Exercise Right Exercise KSD’s KDR Depositary Service for Foreign Companies 12

Korean Stock Market P 2, P (Oct. 2) KOSPI Daily Turnover 55.1% up from 2005 to 2006 year-end KOSPI breaks previous record highs in October 2, 2007, 2,014.09P US$ Bil Index Performance 13

Korean Stock Market (US$ Bil) Market Cap. ASX SGX 22 TSE 2 4,614 1, HKEX TSE5,824 Trading Value TSE2,416 HKEX 1,173 ASX1,829 SGX709 Listed Companies HKEX 7 1,714 ASX 8 1,689 KRX KRX ,339 KRX SGX Source: World Federation of Exchanges Position among World Exchanges (2006) 14

Korean Stock Market High Investment Demand High Investment Demand - Korean investors’ foreign equity investment increased dramatically Efficient Financing Efficient Financing KoreaHong KongSingapore Market Cap. (Dec.’06)834(16th) 1,715(7th)384(22th) Trading Value (Jan.~Dec ’06)1,339(10th) 832(14th)180(26th) Turnover Velocity (Dec.’06)171%(4th) 62%(24th)58%(26th) - High Liquidity Source: World Federation of Exchanges (Dec. 2006) (US$ Bil, %) Abundant Liquid Capital Abundant Liquid Capital - Over 580 bil. US$ of short-term deposits looking for investment opportunities - KRX enjoys high liquidity compared to other competing exchanges - Can raise more capital by issuing additional shares in the market easily Listing Benefits of Korean Stock Market 15

Korean Stock Market Criteria Main Board KOSDAQ Operating History Continuous Operation for 3 years or more since establishment Equity Capital 10 Mil USD or more 3 Mil USD or more Total Shares Issued 1 Mil or more - Share Ownership (Primary) - 1,000 or more minority shareholders & - 30% or more shares held by minority shareholders * (10% or more for large companies) - 10% or more public offering in Korea * or more minority shareholders & - 30% or more shares held by minority shareholders ** - 10% or more public offering in Korea** * Exempted for secondary listings on main board ** For secondary listings on KOSDAQ, 500 or more minority shareholders & public offering in Korea of 300,000 shares or more Listing Requirements Listing Requirements Listing Criteria & Procedure 16

Korean Stock Market Criteria Main Board KOSDAQ Sales - 30 Mil. USD or more (latest year) & 20 Mil. USD or more (3 year average) - Profit (Either one) Mil. USD or more (latest year) & 5 Mil. USD or more (3-year total) * - Ordinary income & no capital impairment (Latest year) - ROE 10% or more - 5% or more (Latest year ROE) & 10% or more(3 year ROE total) ** - Net profit of USD 2 Mil. Or more Audit Opinion - Unqualified & previous 2 fiscal years’ unqualified or qualified opinion (Latest year) - Unqualified opinion (Latest year) Others - No pending lawsuits, M&A or dishonor, no restrictions on share transferring, etc. * No losses in operating, ordinary, net income ** For large companies, operating cash flow surplus & either ROE 3% or profit of USD 5 Mil Listing Requirements Listing Requirements Listing Criteria & Procedure 17

Thank You! Contact: Jae Woong KIM (James) Tel: Fax: ~