We believe that a company's Value is determined by two factors: first, those tangible or financial assets that are presented in the balance sheets, and second, the intangible Value (such as human resources, organizational strength and good relationships with the external partners and customer that support the business) that are not presented in the balance sheets.

Intellectual Capital is a concept that comprehensively captures this intangible Value, and its relationship to the company's tangible assets can be illustrated using the example of a tree.

When we look at a tree, we see only the parts that are above the ground - the thickness of the trunk, the colors of the leaves, and the fruit. These are the indicators that tell us whether the tree is "currently" in a state of good health. If we apply the elements from our "tree" example to a company, we could say that the sections visible above the ground are comparable to the items represented on a company's balance sheet - these are the indicators of its financial soundness. The "fruit" represents the company's performance throughout the year, although this is but a transient element.

Meanwhile, it is actually the tree's "roots" that sustain its health and guarantee the continued production of fruit into the future, and this is where Intellectual Capital, the source of Value creation, is positioned. In other words, Actcell believes that it is actually a company's intangible Value, such as its human resource strengths, organizational strengths and relationships with customers and external partners, that determines a corporation's sustainable competitive advantage, despite the fact that these elements do not appear on the Balance Sheet.

It would be no exaggeration to say that traditionally, corporate management has always focused on those elements that are easily understood and visible. However, in order to sustain the superior performance of a company, it is necessary to consider Intellectual Capital - the "roots" of the tree - as a resource for invisible Value creation and a potential source of future profit, and consequently to develop and nurture that resource in a strategic manner.