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

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

About TWSE 2

■Founded in 1961 ■TWSE is the primary equities market in Taiwan ■Products : Stocks, Warrants, ETFs, TDRs and Corporate BondsStocks, 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: 9.8x(2008), and 15.31x(2007) Good P/E Ratio: 9.8x(2008), and 15.31x(2007) High Share Turnover Velocity: Market turnover rate is %(2008), ranked 11 th worldwide and 4 th in Asia High Share Turnover Velocity: Market turnover rate is %(2008), ranked 11 th worldwide and 4 th in Asia Excellent Dividend Yield: 9.83%(2008) Excellent Dividend Yield: 9.83%(2008) Foreign Investment: Foreigners are major shareholders of many companies, such as TSMC(72.57%)*, Delta Electronics(67.27%)* Foreign Investment: Foreigners are major shareholders of many companies, such as TSMC(72.57%)*, Delta Electronics(67.27%)* 4 * Data shown in parentheses were at the end of April, 2009

Overview of Electronic Disclosure System 5

Overview of electronic disclosure system Disclosure Requirements Statutory Disclosure ( FSC ) Timely Disclosure (TWSE) MOPS – Launched in 2002 Operated by TWSE Data shared with Financial Supervisory Commission Inquiry of all disclosure information required by FSC & TWSE via MOPS 6 Listed Companies One-Stop PortalInvestors Aim to reduce reporting burden and to enable data-sharing

Requirements of disclosure 7 Based on the Securities and Exchange Law Securities report, Annual report, Semi-annual report, Quarterly report 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) Filing via PDF, word copy of financial report with account items of 3 statements: Balance sheet Income Statement Cash Flow Statement(Summary)

Why XBRL? 8

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

Project Implementation 10

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

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

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

Introduction of XBRL Service Demo Site 14 Cooperation with Cooperation with Number of Companies ： 77 Number of Companies ： of companies from commercial & industrial industry: electronic, cement, food, plastic, textile and steel46 of companies from commercial & industrial industry: electronic, cement, food, plastic, textile and steel 31 of companies from financial industry: banking and insurance31 of companies from financial industry: banking and insurance Year covered ： 2001~2008 Year covered ： 2001~2008 Financial Statements ： Financial Statements ： Balance Sheet Balance Sheet Income Statement Income Statement Cash Flow Statement Cash Flow Statement Implementation ： By Converting existing data into XBRL format Implementation ： By Converting existing data into XBRL format

Function- Inquiry of Statements 15

Function- Ratio Analysis 16

Function- Multiple Companies Comparison 17

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

Future Issues 19

Future Issues 20 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

Taxonomy Development 21

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

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

Current Taxonomy Scope Instance documents Balance Sheet multi-industry Income Statement multi-industry Statement of Stockholder’s Equity multi-industry Statement of Cash Flows multi-industry XBRL Specification v.2.1 & Dimension

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: Education & Communication Communication Project Continuance TechnologyTechnology Organization & Budget BudgetTaxonomyTaxonomy Inception ConstructionPlanningElaboration 2004~ ~ ~ ~2010

 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 Lessons Learned (2)

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.

Li-Ning Chen Chi-Chun Chou ： 29 Taiwan Stock Exchange For further information:

30 Taiwan Stock Exchange For further information: Li-Ning Chen CCChou ：