Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16

OF THE SECURITIES EXCHANGE ACT OF 1934

For the month of November 2021

Commission File Number 1-14926

 

 

KT Corporation

(Translation of registrant’s name into English)

 

 

90, Buljeong-ro,

Bundang-gu, Seongnam-si,

Gyeonggi-do,

Korea

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F:

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Indicate by check mark whether by furnishing the information contained in this Form, the registrant is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ☐            No  ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-             

 

 

 


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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: November 26, 2021
KT Corporation
By:  

/s/ Seunghoon Chi

Name: Seunghoon Chi
Title: Vice President
By:  

/s/ Ginah Yun

Name: Ginah Yun
Title: Director


Table of Contents

KT Corporation and Subsidiaries

Consolidated Interim Financial Statements

September 30, 2021 and 2020


Table of Contents

KT Corporation and Subsidiaries

Index

September 30, 2021 and 2020

 

 

 

     Page(s)

Report on Review of Interim Financial Statements

   1 – 2

Consolidated Interim Financial Statements

  

Consolidated Interim Statements of Financial Position

   3 – 4

Consolidated Interim Statements of Profit or Loss

   5

Consolidated Interim Statements of Comprehensive Income

   6

Consolidated Interim Statements of Changes in Equity

   7 – 8

Consolidated Interim Statements of Cash Flows

   9 – 10

Notes to the Consolidated Interim Financial Statements

   11 – 66


Table of Contents
LOGO   LOGO

Report on Review of Interim Financial Statements

(English Translation of a Report Originally Issued in Korean)

To the Shareholders and Board of Directors of

KT Corporation

Reviewed Financial Statements

We have reviewed the accompanying consolidated interim financial statements of KT Corporation and its subsidiaries (collectively referred to as the “Group”). These financial statements consist of the consolidated interim statement of financial position of the Group as at September 30, 2021, and the related consolidated interim statements of profit or loss and comprehensive income for the three-month and nine-month periods ended September 30, 2021 and 2020, and consolidated interim statements of changes in equity and cash flows for the nine-month periods ended September 30, 2021 and 2020, and a summary of significant accounting policies and other explanatory notes, expressed in Korean won.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (“Korean IFRS”) 1034 Interim Financial Reporting, and for such internal control as management determines is necessary to enable the preparation of consolidated interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to issue a report on these consolidated interim financial statements based on our review.

We conducted our review in accordance with quarterly or semi-annual review standards established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe the accompanying consolidated interim financial statements are not presented fairly, in all material respects, in accordance with Korean IFRS 1034 Interim Financial Reporting.

Samil PricewaterhouseCoopers, 100 Hangang-daero, Yongsan-gu, Seoul 04386, Korea, www.samil.com


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Other Matters

We have audited the consolidated statement of financial position of the Group as at December 31, 2020, and the related consolidated statements of profit or loss, comprehensive income, changes in equity and cash flows for the year then ended, in accordance with Korean Standards on Auditing. We expressed an unqualified opinion on those financial statements, not presented herein, in our audit report dated March 9, 2021. The consolidated statement of financial position as at December 31, 2020, presented herein for comparative purposes, is consistent, in all material respects, with the above audited statement of financial position as at December 31, 2020.

Review standards and their application in practice vary among countries. The procedures and practices used in the Republic of Korea to review such financial statements may differ from those generally accepted and applied in other countries.

 

LOGO

November 15, 2021

Seoul, Korea

 

This report is effective as of November 15, 2021, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying consolidated interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that there is a possibility that the above review report may have to be revised to reflect the impact of such subsequent events or circumstances, if any.

 

2


Table of Contents

KT Corporation and Subsidiaries

Consolidated Interim Statements of Financial Position

September 30, 2021 and December 31, 2020

 

 

(in millions of Korean won)    Notes      September 30, 2021
(Unaudited)
     December 31, 2020  

Assets

 

  

Current assets

 

  

Cash and cash equivalents

     4      W 3,088,946      W 2,634,624  

Trade and other receivables, net

     4,5        5,438,634        4,902,471  

Other financial assets

     4,6        848,418        1,202,840  

Current tax assets

        7,216        2,059  

Inventories, net

     7        406,638        534,636  

Current assets held for sale

     9        1,198        1,198  

Other current assets

     8        2,106,300        1,876,352  
     

 

 

    

 

 

 

Total current assets

        11,897,350        11,154,180  
     

 

 

    

 

 

 

Non-current assets

        

Trade and other receivables, net

     4,5        1,028,995        1,250,769  

Other financial assets

     4,6        518,592        544,347  

Property and equipment, net

     10        13,919,519        14,206,119  

Right-of-use assets, net

     17        1,255,400        1,217,179  

Investment properties, net

     10        1,691,281        1,368,453  

Intangible assets, net

     10        3,082,531        2,161,258  

Investments in associates and joint ventures

     11        1,252,714        557,881  

Deferred tax assets

        438,543        433,698  

Other non-current assets

     8        746,250        768,661  
     

 

 

    

 

 

 

Total non-current assets

        23,933,825        22,508,365  
     

 

 

    

 

 

 

Total assets

      W 35,831,175      W 33,662,545  
     

 

 

    

 

 

 

 

The above consolidated interim statements of financial position should be read in conjunction with the accompanying notes.

3


Table of Contents

KT Corporation and Subsidiaries

Consolidated Interim Statements of Financial Position

September 30, 2021 and December 31, 2020

 

 

(in millions of Korean won)    Notes      September 30, 2021
(Unaudited)
    December 31, 2020  

Liabilities

       

Current liabilities

       

Trade and other payables

     4,12      W 6,155,844   W 6,210,099  

Borrowings

     4,13        1,588,224       1,418,114  

Other financial liabilities

     4, 6        10,471       2,493  

Current tax liabilities

        368,402       232,225  

Provisions

     14        167,980       165,990  

Deferred income

        66,775       60,252  

Other current liabilities

     8        1,023,624       1,103,299  
     

 

 

   

 

 

 

Total current liabilities

        9,381,320       9,192,472  
     

 

 

   

 

 

 

Non-current liabilities

       

Trade and other payables

     4,12        1,082,714       807,540  

Borrowings

     4,13        6,807,884       5,898,184  

Other financial liabilities

     4,6        375,793       260,676  

Net defined benefit liabilities

     15        503,832       378,087  

Provisions

     14        86,335       86,202  

Deferred income

     20        172,307       149,050  

Deferred tax liabilities

        410,324       429,331  

Other non-current liabilities

     8        913,180       909,570  
     

 

 

   

 

 

 

Total non-current liabilities

        10,352,369       8,918,640  
     

 

 

   

 

 

 

Total liabilities

        19,733,689       18,111,112  
     

 

 

   

 

 

 

Equity attribute to owners of the Controlling Company

       

Share capital

        1,564,499       1,564,499  

Share premium

        1,440,258       1,440,258  

Retained earnings

     18        12,821,729       12,155,420  

Accumulated other comprehensive income

        25,996       86,051  

Other components of equity

     19        (1,351,143     (1,234,784
     

 

 

   

 

 

 
        14,501,339       14,011,444  

Non-controlling interests

        1,596,147       1,539,989  
     

 

 

   

 

 

 

Total equity

        16,097,486       15,551,433  
     

 

 

   

 

 

 

Total liabilities and equity

      W 35,831,175     W 33,662,545  
     

 

 

   

 

 

 

 

The above consolidated interim statements of financial position should be read in conjunction with the accompanying notes.

4


Table of Contents

KT Corporation and Subsidiaries

Consolidated Interim Statements of Profit or Loss

Three-Month and Nine-Month Periods Ended September 30, 2021 and 2020

 

 

            Periods Ended September 30  
            2021
(Unaudited)
     2020
(Unaudited)
 
(in millions of Korean won, except per share amounts)    Notes      Three months      Nine months      Three months      Nine months  

Operating revenue

     20      W 6,217,382      W 18,274,420      W 6,001,198      W 17,709,417  

Operating expenses

     21        5,834,986        16,971,989        5,707,153        16,687,029  
     

 

 

    

 

 

    

 

 

    

 

 

 

Operating profit

        382,396        1,302,431        294,045        1,022,388  

Other income

     22        78,240        212,023        122,458        236,122  

Other expenses

     22        82,535        198,851        99,780        236,797  

Finance income

     23        229,331        486,114        35,326        301,040  

Finance costs

     23        191,269        428,440        42,775        327,983  

Share of net profits (losses) of associates and joint ventures

     11        64,137        97,888        4,907        (3,432
     

 

 

    

 

 

    

 

 

    

 

 

 

Profit before income tax expense

        480,300        1,471,165        314,181        991,338  

Income tax expense

     24        142,554        436,156        84,248        325,138  
     

 

 

    

 

 

    

 

 

    

 

 

 

Profit for the period

      W 337,746      W 1,035,009      W 229,933      W 666,200  
     

 

 

    

 

 

    

 

 

    

 

 

 

Profit for the period attributable to:

              

Owners of the Controlling Company

      W 310,852      W 952,293      W 203,288      W 590,314  

Non-controlling interest

        26,894        82,716        26,645        75,886  

Earnings per share attributable to the equity holders of the Controlling Company during the period (in Korean won):

     25              

Basic earnings per share

      W 1,324      W 4,039      W 828      W 2,407  

Diluted earnings per share

        1,322        4,036        828        2,405  

 

The above consolidated interim statements of profit or loss should be read in conjunction with the accompanying notes.

5


Table of Contents

KT Corporation and Subsidiaries

Consolidated Interim Statements of Comprehensive Income

Three-Month and Nine-Month Periods Ended September 30, 2021 and 2020

 

 

            Periods Ended September 30  
            2021
(Unaudited)
    2020
(Unaudited)
 
(in millions of Korean won)    Notes      Three months     Nine months     Three months     Nine months  

Profit for the period

      W 337,746     W 1,035,009     W 229,933     W 666,200  
     

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income

           

Items that will not be reclassified to profit or loss:

           

Remeasurements of the net defined benefit liabilities

     15        6,562       15,706       2,573       (625

Share of remeasurement gain of associates and joint ventures

        1,084       (1,502     (86     (14

Gain (loss) on valuation of equity instruments at fair value through other comprehensive income

     6        (860     15,013       15,704       56,673  

Items that may be subsequently reclassified to profit or loss:

           

Valuation gain (loss) on cash flow hedges

     6        91,363       141,218       (34,003     40,176  

Other comprehensive income from cash flow hedges reclassified to profit or loss

        (93,735     (137,861     42,431       (34,778

Share of other comprehensive income from associates and joint ventures

        (3,155     (24,926     (4,237     (3,659

Exchange differences on translation of foreign operations

        (6,506     (1,795     10,601       694  
     

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income for the period, net of tax

        (5,247     5,853       32,983       58,467  
     

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

      W 332,499     W 1,040,862     W 262,916     W 724,667  
     

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period attributable to:

           

Owners of the Controlling Company

      W 305,661     W 953,239     W 225,627     W 640,785  

Non-controlling interests

        26,838       87,623       37,289       83,882  

The above consolidated interim statements of comprehensive income should be read in conjunction with the accompanying notes.

 

6


Table of Contents

KT Corporation and Subsidiaries

Consolidated Statements of Changes in Equity

Nine-Month Periods Ended September 30, 2021 and 2020

 

 

            Attributable to owners of the Controlling Company              
(in millions of Korean won)    Notes      Share
capital
     Share
premium
     Retained
earnings
    Accumulated
other comprehensive
income
    Other
components
of equity
    Total    

Non-controlling

interest

   

Total

equity

 

Balance at January 1, 2020

      W 1,564,499      W 1,440,258      W 11,633,780     W 194,934     W (1,170,083   W 13,663,388     W 1,520,160     W 15,183,548  

Comprehensive income

                     

Profit for the period

        —          —          590,314       —         —         590,314       75,886       666,200  

Remeasurements of net defined benefit liabilities

     15        —          —          1,410       —         —         1,410       (2,035     (625

Valuation gain (loss) on cash flow hedge

     6        —          —          —         5,471       —         5,471       (73     5,398  

Share of other comprehensive income (loss) of associates and joint ventures

        —          —          —         (3,212     —         (3,212     (447     (3,659

Share of remeasurement of the net defined benefit liabilities of associates and joint ventures

        —          —          (13     —         —         (13     (1     (14

Gain (loss) on valuation of financial instruments at fair value through other comprehensive income

        —          —          184,330       (138,461     —         45,869       10,804       56,673  

Exchange differences on translation of foreign operations

        —          —          —         946       —         946       (252     694  
     

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

        —          —          776,041       (135,256     —         640,785       83,882       724,667  
     

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
                —            

Transactions with owners

                     

Dividends paid by the Controlling Company

        —          —          (269,766     —         —         (269,766     —         (269,766

Dividends paid to non-controlling interest of subsidiaries

        —          —          —         —         —         —         (40,802     (40,802

Appropriations of loss on disposal of treasury stock

        —          —          (1,690     —         1,690       —         —         —    

Change in ownership interest in subsidiaries

        —          —          —         —         10,081       10,081       23,266       33,347  

Disposal of treasury stock

        —          —          —         —         3,640       3,640       —         3,640  

Others

        —          —          —         —         20,491       20,491       —         20,491  
     

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

        —          —          (271,456     —         35,902       (235,554     (17,536     (253,090
     

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at September 30, 2020 (Unaudited)

      W 1,564,499      W 1,440,258      W 12,138,365     W 59,678     W (1,134,181   W 14,068,619     W 1,586,506     W 15,655,125  
     

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.

 

7


Table of Contents

KT Corporation and Subsidiaries

Consolidated Statements of Changes in Equity

Nine-Month Periods Ended September 30, 2021 and 2020

 

 

            Attributable to owners of the Controlling Company              
(in millions of Korean won)    Notes      Share
capital
     Share
premium
     Retained
earnings
    Accumulated
other comprehensive
income
    Other
components
of equity
    Total    

Non-controlling

interest

   

Total

equity

 

Balance as at January 1, 2021

      W 1,564,499      W 1,440,258      W 12,155,420     W 86,051     W (1,234,784   W 14,011,444     W 1,539,989     W 15,551,433  

Comprehensive income

                     

Profit for the period

        —          —          952,293       —         —         952,293       82,716       1,035,009  

Remeasurements of net defined benefit liabilities

     15        —          —          9,410       —         —         9,410       6,296       15,706  

Valuation gain on cash flow hedge

     6        —          —          —         3,314       —         3,314       43       3,357  

Share of other comprehensive income (loss) of associates and joint ventures

        —          —          —         (19,758     —         (19,758     (5,168     (24,926

Share of remeasurement of the net defined benefit liabilities of associates and joint ventures

        —          —          (1,462     —         —         (1,462     (40     (1,502

Gain (loss) on valuation of financial instruments at fair value through other comprehensive income

        —          —          53,053       (41,109     —         11,944       3,069       15,013  

Exchange differences on translation of foreign operations

        —          —          —         (2,502     —         (2,502     707       (1,795
     

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

        —          —          1,013,294       (60,055     —         953,239       87,623       1,040,862  
     

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transactions with owners

                     

Dividends paid by the Controlling Company

        —          —          (326,487     —         —         (326,487     —         (326,487

Dividends paid to non-controlling interest of subsidiaries

        —          —          —         —         —         —         (23,762     (23,762

Appropriations of loss on disposal of treasury stock

        —          —          (20,498     —         20,498       —         —         —    

Change in consolidation scope

        —          —          —         —         —         —         781       781  

Change in ownership interest in subsidiaries

        —          —          —         —         7,581       7,581       (9,634     (2,053

Acquisition of treasury stock

        —          —          —         —         (190,105     (190,105     —         (190,105

Disposal of treasury stock

        —          —          —         —         3,056       3,056       —         3,056  

Others

        —          —          —         —         42,611       42,611       1,150       43,761  
     

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Subtotal

        —          —          (346,985     —         (116,359     (463,344     (31,465     (494,809
     

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as at September 30, 2021 (Unaudited)

      W 1,564,499      W 1,440,258      W 12,821,729     W 25,996     W (1,351,143   W 14,501,339     W 1,596,147     W 16,097,486  
     

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The above consolidated statements of changes in equity should be read in conjunction with the accompanying notes.

 

8


Table of Contents

KT Corporation and Subsidiaries

Consolidated Interim Statements of Cash Flows

Nine-Month Periods Ended September 30, 2021 and 2020

 

 

            Nine-Month Period Ended September 30  
(in millions of Korean won)    Notes      2021
(Unaudited)
    2020
(Unaudited)
 

Cash flows from operating activities

       

Cash generated from operations

     26      W 4,443,043     W 3,680,864  

Interest paid

        (196,435     (195,545

Interest received

        196,709       189,882  

Dividends received

        70,042       19,098  

Income tax paid

        (351,164     (19,168
     

 

 

   

 

 

 

Net cash inflow from operating activities

        4,162,195       3,675,131  
     

 

 

   

 

 

 

Cash flows from investing activities

       

Collection of loans

        40,116       49,505  

Disposal of financial assets at fair value through profit or loss

        378,167       282,114  

Disposal of financial assets at amortized cost

        569,150       333,387  

Disposal of financial assets at fair value through comprehensive income

        207,244       351,066  

Disposal of assets held-for-sale

        —         119,524  

Disposal of investments in associates and joint ventures

        13,103       122  

Disposal of property and equipment and investment properties

        46,312       18,241  

Disposal of intangible assets

        10,159       10,969  

Disposal of right-of-use assets

        240       211  

Acquisition of new subsidiary

        39,340       11,045  

Discontinued operations

        —         205  

Loans granted

        (43,773     (38,245

Acquisition of financial assets at fair value through profit or loss

        (314,483     (439,135

Acquisition of financial assets at amortized cost

        (406,018     (428,209

Acquisition of financial assets at fair value through other comprehensive income

        (37,019     (38

Acquisition of investments in associates and joint ventures

        (464,712     (290,911

Acquisition of property and equipment and investment properties

        (2,643,952     (2,370,338

Acquisition of intangible assets

        (571,017     (465,207

Acquisition of right-of-use assets

        (3,329     (7,118

Acquisition of derivatives

        (58     —    

Decrease in cash due to business combination, etc.

        (634,921     —    
     

 

 

   

 

 

 

Net cash outflow from investing activities

        (3,815,451     (2,862,812
     

 

 

   

 

 

 

 

The above consolidated interim statements of cash flows should be read in conjunction with the accompanying notes.

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Table of Contents

KT Corporation and Subsidiaries

Consolidated Interim Statements of Cash Flows

Nine-Month Periods Ended September 30, 2021 and 2020

 

 

            Nine-Month Period Ended September 30  
(in millions of Korean won)    Notes      2021
(Unaudited)
    2020
(Unaudited)
 

Cash flows from financing activities

       

Proceeds from borrowings

        2,503,603       1,678,326  

Settlement of derivative assets and liabilities, net

        (1,205     16,452  

Transaction with non-controlling interest

        56,847       25,052  

Cash inflow from other financing activities

        6,215       149  

Repayments of borrowings

        (1,648,654     (1,184,121

Dividends paid

        (350,249     (310,465

Decrease in finance lease liabilities

        (269,651     (338,203

Decrease in other financal liabilities

        —         (13,674

Acquisition of treasury stock

        (192,684     (935
     

 

 

   

 

 

 

Net cash inflow (outflow) from financing activities

        104,222       (127,419
     

 

 

   

 

 

 

Effect of exchange rate change on cash and cash equivalents

        3,356       152  
     

 

 

   

 

 

 

Net increase in cash and cash equivalents

        454,322       685,052  

Cash and cash equivalents

       

Beginning of the period

        2,634,624       2,305,894  
     

 

 

   

 

 

 

End of the period

      W 3,088,946     W 2,990,946  
     

 

 

   

 

 

 

 

The above consolidated interim statements of cash flows should be read in conjunction with the accompanying notes.

10


Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements    

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

1.

General Information

The consolidated financial statements include the accounts of KT Corporation, which is the controlling company as defined under Korean IFRS 1110 Consolidated Financial Statements, and its 74 controlled subsidiaries as described in Note 1.2 (collectively referred to as the “Group”).

 

  1.1

The Controlling Company

KT Corporation (the “Controlling Company”) commenced operations on January 1, 1982, when it spun off from the Korea Communications Commission (formerly the Korean Ministry of Information and Communications) to provide telephone services and to engage in the development of advanced communications services under the Act of Telecommunications of Korea. The headquarters are located in Seongnam City, Gyeonggi Province, Republic of Korea, and the address of its registered head office is 90, Buljeong-ro, Bundang-gu, Seongnam City, Gyeonggi Province.

On October 1, 1997, upon the announcement of the Government-Investment Enterprises Management Basic Act and the Privatization Law, the Controlling Company became a government-funded institution under the Commercial Code of Korea.

On December 23, 1998, the Controlling Company’s shares were listed on the Korea Stock Exchange.

On May 29, 1999, the Controlling Company issued 24,282,195 additional shares and issued American Depository Shares (ADS), which represents new shares and 20,813,311 government-owned shares, on the New York Stock Exchange. On July 2, 2001, the additional ADS representing 55,502,161 government-owned shares were issued at the New York Stock Exchange.

In 2002, the Controlling Company acquired the entire government-owned shares in accordance with the Korean government’s privatization plan. As at September 30, 2021, the Korean government does not own any shares in the Controlling Company.

 

  1.2

Consolidated Subsidiaries

The consolidated subsidiaries as at September 30, 2021 and December 31, 2020, are as follows:

 

               Controlling percentage
ownership1 (%)
     
Subsidiary    Type of business    Location   

September 30,

2021

   

December 31,

2020

    Closing
month

KT Linkus Co., Ltd.

  

Public telephone maintenance

   Korea      92.4     92.4   December

KT Submarine Co., Ltd. 2,4

  

Submarine cable construction and maintenance

   Korea      39.3     39.3   December

KT Telecop Co., Ltd.

  

Security service

   Korea      86.8     86.8   December

KT Alpha Co., Ltd. (KT Hitel Co., Ltd.)

  

Data communication

   Korea      73.0     67.1   December

KT Service Bukbu Co., Ltd.

  

Opening services of fixed line

   Korea      67.3     67.3   December

KT Service Nambu Co., Ltd.

  

Opening services of fixed line

   Korea      77.3     77.3   December

KT Commerce Inc.

  

B2C, B2B service

   Korea      100.0     100.0   December

KT Strategic Investment Fund No.2

  

Investment fund

   Korea      100.0     100.0   December

 

11


Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

               Controlling percentage
ownership1 (%)
     
Subsidiary    Type of business    Location   

September 30,

2021

   

December 31,

2020

    Closing
month

KT Strategic Investment Fund No.3

  

Investment fund

   Korea      100.0     100.0   December

KT Strategic Investment Fund No.4

  

Investment fund

   Korea      100.0     100.0   December

KT Strategic Investment Fund No.5

  

Investment fund

   Korea      100.0     100.0   December

BC-VP Strategic Investment Fund No.1

  

Investment fund

   Korea      100.0     100.0   December

BC Card Co., Ltd.

  

Credit card business

   Korea      69.5     69.5   December

VP Inc.

  

Payment security service for credit card, others

   Korea      50.9     50.9   December

H&C Network

  

Call center for financial sectors

   Korea      100.0     100.0   December

BC Card China Co., Ltd.

  

Software development and data processing

   China      100.0     100.0   December

INITECH Co., Ltd. 4

  

Internet banking ASP and security solutions

   Korea      58.2     58.2   December

Smartro Co., Ltd.

  

VAN (Value Added Network) business

   Korea      64.5     64.5   December

KTDS Co., Ltd. 4

  

System integration and maintenance

   Korea      95.5     95.5   December

KT M&S Co., Ltd.

  

PCS distribution

   Korea      100.0     100.0   December

GENIE Music Corporation 2,4

  

Online music production and distribution

   Korea      36.2     36.2   December

KT MOS Bukbu Co., Ltd. 4

  

Telecommunication facility maintenance

   Korea      100.0     100.0   December

KT MOS Nambu Co., Ltd. 4

  

Telecommunication facility maintenance

   Korea      98.4     98.4   December

KT Skylife

  

Satellite TV

   Korea      50.3     50.3   December

Skylife TV Co., Ltd.

  

TV contents provider

   Korea      100.0     92.6   December

KT Estate Inc.

  

Residential building development and supply

   Korea      100.0     100.0   December

KT AMC Co., Ltd.

  

Asset management and consulting services

   Korea      100.0     100.0   December

NEXR Co., Ltd.

  

Cloud system implementation

   Korea      100.0     100.0   December

KTGDH Co., Ltd.

  

Data center development and related service

   Korea      100.0     100.0   December

KT Sat Co., Ltd.

  

Satellite communication business

   Korea      100.0     100.0   December

Nasmedia, Co., Ltd.3,4

  

Solution provider and IPTV advertisement sales business

   Korea      44.0     44.0   December

KT Sports Co., Ltd.

  

Management of sports group

   Korea      100.0     100.0   December

KT Music Contents Fund No.2

  

Music contents investment business

   Korea      100.0     100.0   December

KT-Michigan Global Content Fund

  

Content investment business

   Korea      88.6     88.6   December

Autopion Co., Ltd.

  

Information and communication service

   Korea      100.0     100.0   December

KTCS Corporation 2,4

  

Database and online information provider

   Korea      32.2     31.9   December

KTIS Corporation 2,4

  

Database and online information provider

   Korea      31.4     30.8   December

KT M Mobile Co., Ltd.

  

Special category telecommunications operator and sales of communication device

   Korea      100.0     100.0   December

KT Investment Co., Ltd.

  

Technology business finance

   Korea      100.0     100.0   December

Whowho&Company Co., Ltd.

  

Software development and supply

   Korea      100.0     100.0   December

PlayD Co., Ltd.

  

Advertising agency

   Korea      70.4     70.4   December

Next Connect PFV

  

Residential building development and supply

   Korea      100.0     100.0   December

KT Rwanda Networks Ltd.

  

Network installation and management

   Rwanda      51.0     51.0   December

AOS Ltd.

  

System integration and maintenance

   Rwanda      51.0     51.0   December

 

12


Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

               Controlling percentage
ownership1 (%)
      
Subsidiary    Type of business    Location    September 30,
2021
     December 31,
2020
     Closing
month

KT Japan Co., Ltd.

  

Foreign telecommunication business

   Japan      100.0      100.0    December

East Telecom LLC

  

Fixed line internet business

   Uzbekistan      91.6      91.6    December

KT America, Inc.

  

Foreign investment business

   USA      100.0      100.0    December

PT. BC Card Asia Pacific

  

Software development and supply

   Indonesia      99.9      99.9    December

KT Hong Kong Telecommunications Co., Ltd.

  

Fixed line telecommunication business

   Hong Kong      100.0      100.0    December

Korea Telecom Singapore Pte. Ltd.

  

Foreign investment business

   Singapore      100.0      100.0    December

Texnoprosistem LLP

  

Fixed line internet business

   Uzbekistan      100.0      100.0    December

Nasmedia Thailand Co., Ltd

  

Internet advertising solution

   Thailand      99.9      99.9    December

KT Huimangjieum

  

Manufacturing

   Korea      100.0      100.0    December

K-REALTY RENTAL HOUSING REIT 3

  

Residential building

   Korea      88.6      88.6    December

Storywiz

  

Contents and software development and supply

   Korea      100.0      100.0    December

KT Engineering Co., Ltd. (KT ENGCORE Co., Ltd.)

  

Telecommunication facility construction and maintenance

   Korea      100.0      100.0    December

KT Studio Genie Co., Ltd.

  

Data communication service and data communication construction business

   Korea      100.0      —        December

KHS Corporation

  

Operation and maintenance of facilities

   Korea      100.0      —        December

Lolab Co., Ltd.

  

Truck transportation and trucking arrangement business

   Korea      80.0      —        December

HCN Co., Ltd.

  

Cable television service

   Korea      100.0      —        December

MEDIA GENIE Co., Ltd.

  

TV contents provider

   Korea      100.0      —        December

KT Seezn Co., Ltd.

  

Movies, videos and TV contents production and distribution

   Korea      100.0      —        December

MILLIE Co., Ltd.

  

Book contents service

   Korea      38.6      —        December

KT ES Pte. Ltd.

  

Foreign investment business

   Singapore      57.6      —        December

Epsilon Global Communications PTE. Ltd.

  

Foreign investment business

   Singapore      100.0      —        December

Epsilon Telecommunications (SP) PTE. Ltd.

  

Fixed line telecommunication business

   Singapore      100.0      —        December

Epsilon Telecommunications (US) PTE. Ltd.

  

Fixed line telecommunication business

   Singapore      100.0      —        December

Epsilon Telecommunications Limited

  

Fixed line telecommunication business

   UK      100.0      —        December

7D Digital Limited

  

Software development

   UK      100.0      —        December

Epsilon Telecommunications (HK) Limited

  

Fixed line telecommunication business

   Hong kong      100.0      —        December

Epsilon US Inc.

  

Fixed line telecommunication business

   USA      100.0      —        December

Epsilon Telecommunications (BG) EOOD

  

Employee support service

   Bulgaria      100.0      —        December

Epsilon M E A General Trading LLC

  

Local counter work

   Dubai      49.0      —        December

K-REALTY RENTAL HOUSING REIT V

  

Residential building

   Korea      100.0      —        December

 

1 

Sum of the ownership interests owned by the Controlling Company and subsidiaries.

2 

Although the Controlling Company owns less than 50% ownership in this entity, this entity is consolidated as the Controlling Company can exercise the majority voting rights in its decision-making process at all times considering the historical voting pattern at the shareholders’ meetings.

3 

Although the Controlling Company owns less than 50% ownership in this entity, this entity is consolidated as the Controlling Company holds the majority of voting right based on an agreement with other investors.

4 

The number of subsidiaries’ treasury stock is deducted from the total number of shares when calculating the controlling percentage ownership.

 

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Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

  1.3

Changes in Scope of Consolidation

Subsidiaries newly included/excluded in/from the consolidation during the nine-month period ended September 30, 2021:

 

Changes   

  

Location

  

Name of subsidiary

  

Reason

Included    Korea    KT Studio Genie Co., Ltd.    Newly established
Included    Korea    Lolab    Newly established
Included    Korea    KHS Corporation    Transferred
Included    Korea    HCN Co., Ltd.    Transferred
Included    Korea    MEDIA GENIE Co., Ltd.    Transferred
Included    Korea    KT Seezn Co., Ltd.    Transferred
Included    Korea    MILLIE Co., Ltd.    Transferred
Included    Singapore    KT ES Pte. Ltd.    Newly established
Included    Singapore   

Epsilon Global Communications

PTE. Ltd.

   Transferred
Included    Singapore   

Epsilon Telecommunications

(SP) PTE. Ltd.

   Transferred
Included    Singapore   

Epsilon Telecommunications

(US) PTE. Ltd.

   Transferred
Included    UK    Epsilon Telecommunications Limited    Transferred
Included    UK    7D Digital Limited    Transferred
Included    Hong kong   

Epsilon Telecommunications

(HK) Limited

   Transferred
Included    USA    Epsilon US Inc.    Transferred
Included    Bulgaria    Epsilon Telecommunications (BG) EOOD    Transferred
Included    Dubai    Epsilon M E A General Trading L.L.C    Transferred
Included    Korea   

K-REALTY RENTAL HOUSING

REIT V

   Newly established
Excluded    Belgium    KT Belgium    Liquidated
Excluded    Korea    KT Powertel Co., Ltd.    Shares disposed
Excluded    China    Korea Telecom China Co., Ltd.    Liquidated
Excluded    Poland    KBTO Sp.z o. o.    Liquidated
Excluded    Korea    GE Premier 1st Corporate Restructuring Real Estate Investment Trust Co.    Liquidated
Excluded    Korea    KT M Hows Co., Ltd.    Merged
Excluded    Netherlands    KT Dutch B.V.    Liquidated
Excluded    Korea    KT Music Contents Fund No.1    Liquidated

 

14


Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

Summarized information for consolidated subsidiaries as at September 30, 2021 and December 31, 2020 and for the nine-month periods ended September 30, 2021 and 2020, is as follows:

 

(in millions of Korean won)    September 30, 2021  
     Total assets      Total liabilities      Operating
revenues
     Profit (loss)
for the period
 

KT Linkus Co., Ltd.

   W 54,019      W 51,333      W 59,428      W  (1,608

KT Submarine Co., Ltd.

     113,957        12,289        24,280        (472

KT Telecop Co., Ltd.

     357,571        228,492        376,244        3,990  

KT Alpha Co., Ltd. (KT Hitel Co., Ltd.)

     371,984        152,797        321,571        (10,181

KT Service Bukbu Co., Ltd.

     55,242        51,179        169,171        (208

KT Service Nambu Co., Ltd.

     65,141        58,260        200,794        158  

BC Card Co., Ltd. 1

     3,798,630        2,425,541        2,634,461        77,335  

H&C Network 1

     264,569        54,757        234,045        1,553  

Nasmedia Co., Ltd. 1

     420,981        209,000        87,827        18,618  

KTDS Co., Ltd. 1

     237,358        169,043        412,442        21,311  

KT M&S Co., Ltd.

     245,592        208,026        503,577        3,612  

GENIE Music Corporation

     279,040        119,987        181,998        8,708  

KT MOS Bukbu Co., Ltd.

     32,318        23,766        50,397        2,557  

KT MOS Nambu Co., Ltd.

     33,409        22,522        50,204        2,067  

KT Skylife Co., Ltd. 1

     1,225,415        444,279        520,374        48,122  

KT Estate Inc. 1

     2,065,999        662,395        240,729        39,351  

KTGDH Co., Ltd.

     11,352        1,602        3,297        416  

KT Sat Co., Ltd.

     597,981        43,289        128,620        16,110  

KT Sports Co., Ltd.

     33,364        21,095        39,284        646  

KT Music Contents Fund No.2

     14,942        204        211        2  

KT-Michigan Global Content Fund

     6,990        103        13,591        13,479  

Autopion Co., Ltd.

     4,312        3,991        2,970        (615

KT M Mobile Co., Ltd.

     130,557        38,646        150,479        (5,444

KT Investment Co., Ltd. 1

     75,959        54,726        18,180        (699

KTCS Corporation 1

     368,523        186,467        669,910        17,102  

KTIS Corporation

     349,636        172,535        346,531        12,285  

Next Connect PFV

     493,087        140,868        —          (4,778

KT Japan Co., Ltd. 1

     1,474        2,633        1,135        (142

KT America, Inc.

     4,781        49        4,798        151  

KT Rwanda Networks Ltd. 2

     128,263        232,005        17,472        (21,074

AOS Ltd. 2

     11,861        2,830        5,478        1,017  

KT Hong Kong Telecommunications Co., Ltd.

     8,681        3,799        13,824        924  

KT Huimangjieum 1

     6,418        2,931        8,297        622  

Storywiz

     19,852        10,822        13,688        (2,488

 

15


Table of Contents

KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

(in millions of Korean won)    September 30, 2021  
     Total assets      Total liabilities      Operating
revenues
     Profit (loss)
for the period
 

KT Engineering Co., Ltd. (KT ENGCORE Co., Ltd.)

     101,170        64,596        136,593        (4,572

KT Studio Genie Co., Ltd.

     236,766        13,439        98        (3,689

Lolab Co., Ltd.

     26,687        756        949        (46

East Telecom LLC

     34,400        21,780        5,705        1,291  

MEDIA GENIE Co., Ltd.

     22,186        5,157        —          —    

KT Seezn Co., Ltd.

     91,352        22,157        20,481        6,261  

KT ES Pte. Ltd.

     245,237        80,536        —          —    
           
(in millions of Korean won)    December 31, 2020      September 30, 2020  
     Total assets      Total liabilities      Operating
revenues
     Profit (loss)
for the period
 

KT Powertel Co., Ltd.

   W 119,694      W 18,833      W 46,216      W 2,574  

KT Linkus Co., Ltd.

     58,372        54,022        61,458        (3,911

KT Submarine Co., Ltd.

     116,813        14,032        47,522        8,782  

KT Telecop Co., Ltd.

     318,456        193,737        259,638        (1,128

KT Alpha Co., Ltd. (KT Hitel Co., Ltd.)

     288,949        92,599        247,207        (2,444

KT Service Bukbu Co., Ltd.

     60,825        56,554        159,167        (2,495

KT Service Nambu Co., Ltd.

     58,182        51,460        194,802        (2,906

BC Card Co., Ltd. 1

     3,084,398        1,778,751        2,529,961        73,746  

H&C Network 1

     269,651        61,365        240,521        2,352  

Nasmedia Co., Ltd. 1

     422,039        221,371        79,668        14,566  

KTDS Co., Ltd. 1

     183,297        133,129        333,369        9,984  

KT M Hows Co., Ltd.

     104,704        76,315        31,544        6,058  

KT M&S Co., Ltd.

     231,260        197,306        482,068        434  

GENIE Music Corporation

     250,538        88,488        184,330        7,458  

KT MOS Bukbu Co., Ltd.

     32,167        26,070        47,436        1,334  

KT MOS Nambu Co., Ltd.

     33,765        24,947        52,953        2,968  

KT Skylife Co., Ltd. 1

     919,476        175,039        522,194        51,061  

KT Estate Inc. 1

     1,689,601        325,429        287,264        10,752  

KTGDH Co., Ltd.

     11,003        1,669        3,151        433  

KT Sat Co., Ltd.

     630,740        92,791        127,525        10,140  

KT Sports Co., Ltd.

     26,572        14,940        35,335        1,642  

KT Music Contents Fund No.1

     4,844        1,525        280        230  

KT Music Contents Fund No.2

     15,021        285        135        (77

KT-Michigan Global Content Fund

     10,382        175        106        (38

Autopion Co., Ltd.

     4,903        4,961        4,743        (386

KT M Mobile Co., Ltd.

     129,011        27,281        123,153        (3,436

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

(in millions of Korean won)    December 31, 2020      September 30, 2020  
     Total assets      Total liabilities      Operating
revenues
     Profit (loss)
for the period
 

KT Investment Co., Ltd. 1

     115,627        93,695        2,237        767  

KTCS Corporation 1

     384,919        215,175        645,859        10,628  

KTIS Corporation

     294,289        126,894        337,536        11,466  

Next Connect PFV

     394,268        37,271        8        (1,424

KT Japan Co., Ltd.1

     2,694        2,622        1,175        (179

Korea Telecom China Co., Ltd.

     381        21        427        (111

KT Dutch B.V.1

     29,585        10,109        19,190        4,893  

KT America, Inc.

     4,498        125        4,795        265  

KT Rwanda Networks Ltd.2

     114,768        191,781        13,139        (26,726

KT Belgium

     87,608        —          —          26  

KBTO sp.zo.o.

     438        117        468        (2,698

AOS Ltd.2

     11,812        3,875        4,402        395  

KT Hong Kong Telecommunications Co., Ltd.

     6,159        2,800        12,655        1,073  

KT Huimangjieum

     3,720        2,787        2,674        201  

GE Premier 1st Corporate Restructuring Real Estate Investment Trust Co.

     5,703        1,165        91        28  

Storywiz Co., Ltd.

     21,594        10,065        11,217        (1,612

KT Engineering Co., Ltd. (KT ENGCORE Co., Ltd.)

     138,220        102,963        145,552        (1,084

 

1 

These companies are the intermediate controlling companies of other subsidiaries and the above financial information is from their consolidated financial statements.

2 

At the end of the reporting period, convertible preferred stock issued by subsidiaries is included in liabilities.

 

2.

Significant Accounting Policies

 

  2.1

Basis of Preparation

The Group maintains its accounting records in Korean won and prepares statutory financial statements in the Korean language (Hangul) in accordance with International Financial Reporting Standards as adopted by the Republic of Korea (Korean IFRS). The accompanying consolidated interim financial statements have been condensed, restructured and translated into English from the Korean language financial statements.

The consolidated interim financial statements of the Group as at and for the nine-month periods ended September 30, 2021, have been prepared in accordance with Korean IFRS 1034 Interim Financial Reporting. These consolidated interim financial statements have been prepared in accordance with Korean IFRS which is effective or has been early adopted as at September 30, 2021.

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

  2.2

Changes in Accounting Policies and Disclosures

(1) New and amended standards and interpretations adopted by the Group

The Group has applied the following standards and interpretations for the first time for their annual reporting period commencing January 1, 2021.

 

   

Amendments to Korean IFRS 1116 Lease – Practical expedient for COVID-19 Related Rent Concessions

As a practical expedient, a lessee may elect not to assess whether a rent concession occurring as a direct consequence of the COVID-19 pandemic is a lease modification, and the amounts recognized in profit or loss as a result of applying this exemption should be disclosed. The amendments do not have a significant impact on the financial statements.

 

   

Amendments to Korean IFRS 1109 Financial Instruments, Korean IFRS 1039 Financial Instruments: Recognition and Measurement, Korean IFRS 1107 Financial Instruments: Disclosure, Korean IFRS 1104 Insurance Contracts and Korean IFRS 1116 Lease – Interest Rate Benchmark Reform (Phase 2 amendments)

In relation to interest rate benchmark reform, the amendments provide exceptions including adjust effective interest rate instead of book amounts when interest rate benchmark of financial instruments at amortized costs is replaced and apply hedge accounting without discontinuance although the interest rate benchmark is replaced in hedging relationship. The Group does not expect that these amendments have a significant impact on financial statements.

(2) New standards and interpretations not yet adopted by the Group

Certain new accounting standard and interpretation that have been published but have not been early adopted by the Group, are set out below.

 

   

Amendments to Korean IFRS 1103 Business Combination – Reference to the Conceptual Framework

The amendments update a reference of definition of assets and liabilities qualify for recognition in revised Conceptual Framework for Financial Reporting. However, the amendments add an exception for the recognition of liabilities and contingent liabilities within the scope of Korea IFRS 1037 Provisions, Contingent Liabilities and Contingent Assets, and Korean IFRS 2121 Levies. The amendments also confirm that contingent assets should not be recognized at the acquisition date. The amendments should be applied for annual periods beginning on or after January 1, 2022, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

 

   

Amendments to Korean IFRS 1016 Property, Plant and Equipment – Proceeds Before Intended Use

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

The amendments prohibit an entity from deducting from the cost of an item of property, plant and equipment any proceeds from selling items produced while the entity is preparing the asset for its intended use. Instead, the entity will recognize the proceeds from selling such items, and the costs of producing those items, in profit or loss. The amendments should be applied for annual periods beginning on or after January 1, 2022, and earlier application is permitted. The Group is reviewing for the impact of these amendments on the financial statements

 

   

Amendments to Korean IFRS 1037 Provisions, Contingent Liabilities and Contingent Assets – Onerous Contracts: Cost of Fulfilling a Contract

The amendments clarify that the direct costs of fulfilling a contract include both the incremental costs of fulfilling the contract and an allocation of other costs directly related to fulfilling contracts when assessing whether the contract is onerous. The amendments should be applied for annual periods beginning on or after January 1, 2022, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

 

   

Amendments to Korean IFRS 1001 Presentation of Financial Statements – Classification of Liabilities as Current or Non-Current

The amendments clarify that liabilities are classified as either current or non-current, depending on the substantive rights that exist at the end of the reporting period. Classification is unaffected by the likelihood that an entity will exercise right to defer settlement of the liability or the expectations of management. Also, the settlement of liability include the transfer of the entity’s own equity instruments, however, it would be excluded if an option to settle them by the entity’s own equity instruments if compound financial instruments is met the definition of equity instruments and recognized separately from the liability. The amendments should be applied for annual periods beginning on or after January 1, 2023, and earlier application is permitted. The Group is reviewing for the impact of these amendments on the financial statements.

 

   

Amendments to Korean IFRS 1116 Lease – Concession on COVID-19—Related Rent Concessions Beyond June 30, 2021

The application of the practical expedient where a lessee may elect not to assess whether a rent concession occurring as a direct consequence of the COVID-19 pandemic is a lease modification is extended to lease payments originally due on or before June 30, 2022. A lessee shall apply the practical expedient consistently to eligible contracts with similar characteristics and in similar circumstances. The amendment should be applied for annual periods beginning on or after April 1, 2021, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

 

   

Annual improvements to Korean IFRS 2018-2020

Annual improvements of Korean IFRS 2018-2020 Cycle should be applied for annual periods beginning on or after January 1, 2022, and earlier application is permitted. The Group does not expect that these amendments have a significant impact on the financial statements.

 

   

Korean IFRS 1101 First Time Adoption of Korean International Financial Reporting Standards – Subsidiaries That Are First-Time Adopters

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

   

Korean IFRS 1109 Financial Instruments – Fees Related to the 10% Test for Derecognition of Financial Liabilities

 

   

Korean IFRS 1116 Leases – Lease Incentives

 

   

Korean IFRS 1041 Agriculture – Measuring Fair Value

 

  2.3

Significant Accounting Policies

Significant accounting policies and method of computation used in the preparation of the consolidated interim financial statements are consistent with those of the consolidated financial statements for the year ended December 31, 2020, except for the changes due to the application of amendment and enactments of standards described in Note 2.1 (1) and the one described below.

(1) Income Tax Expense

Income tax expense for the interim period is recognized based on management’s best estimate of the weighted average annual income tax rate expected for the full financial year. The estimated average annual tax rate is applied to the pre-tax income.

 

3.

Critical Accounting Estimates and Assumptions

The preparation of financial statements requires the Group to make estimates and assumptions concerning the future. The estimates and assumptions are continuously evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the current circumstances. Actual results may differ from these estimates.

The spread of COVID-19 has been a material impact on domestic and global economy. It may have a negative impact; such as, decrease in productivity, decrease or delay in sales, collection of existing receivables and others. Accordingly, it may have a negative impact on the financial position and financial performance of the Group, and the impact is expected to be continued to the consolidated annual financial statements in 2021.

Significant accounting estimates and assumptions applied in the preparation of the consolidated interim financial statements can be adjusted depending on changes in the uncertainty from COVID-19. Also, the ultimate effect of COVID-19 to the Group’s business, financial position and financial performance cannot presently determined.

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

4.

Financial Instruments by Category

Financial instruments by category as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021  
Financial assets    Financial assets
at amortized
cost
     Financial
assets at fair
value through
profit or loss
     Financial assets at
fair value through
other comprehensive
income
    

Derivatives

used for
hedging

     Total  

Cash and cash equivalents

   W 3,088,946      W —        W —        W —        W 3,088,946  

Trade and other receivables1

     5,853,396        —          539,652        —          6,393,048  

Other financial assets

     455,490        696,917        120,238        94,365        1,367,010  

 

1 

Lease receivables and others which are not applied to financial instruments by category are excluded.

 

(in millions of Korean won)    September 30, 2021  
Financial liabilities    Financial liabilities
at amortized cost
    

Financial liabilities
at fair value through

profit and loss

    

Derivatives

used for hedging

     Total  

Trade and other payables

   W  7,238,558      W —        W —        W 7,238,558  

Borrowings

     8,396,108        —          —          8,396,108  

Other financial liabilities

     154,727        220,892        10,645        386,264  

 

(in millions of Korean won)    December 31, 2020  
Financial assets    Financial assets
at amortized
cost
     Financial
assets at fair
value through
profit or loss
     Financial assets at
fair value through
other comprehensive
income
    

Derivatives

used for
hedging

     Total  

Cash and cash equivalents

   W  2,634,624      W —        W —        W —        W  2,634,624  

Trade and other receivables1

     4,976,423        —          1,118,619        —          6,095,042  

Other financial assets

     671,068        809,919        258,516        7,684        1,747,187  

 

1 

Lease receivables and others which are not applied to financial instruments by category are excluded.

 

(in millions of Korean won)    December 31, 2020  
Financial liabilities    Financial liabilities
at amortized cost
    

Financial liabilities
at fair value through

profit and loss

    

Derivatives

used for hedging

     Total  

Trade and other payables

   W 7,017,639      W —        W —        W 7,017,639  

Borrowings

     7,316,298        —          —          7,316,298  

Other financial liabilities

     132,558        2,682        127,929        263,169  

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

5.

Trade and Other Receivables

Trade and other receivables as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021  
     Total amounts      Provision for
impairment
     Present value
discount
    

Carrying

amount

 

Current assets

           

Trade receivables

   W 3,678,544      W (335,924    W (7,665    W 3,334,955  

Other receivables

     2,202,134        (95,799      (2,656      2,103,679  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 5,880,678      W (431,723    W (10,321    W 5,438,634  
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-current assets

           

Trade receivables

     583,163        (3,018      (18,288      561,857  

Other receivables

     586,962        (104,987      (14,837      467,138  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 1,170,125      W (108,005    W (33,125    W 1,028,995  
  

 

 

    

 

 

    

 

 

    

 

 

 

 


(in millions of Korean won)
   December 31, 2020  
     Total amounts      Provision for
impairment
     Present value
discount
    

Carrying

amount

 

Current assets

           

Trade receivables

   W 3,388,099      W (322,992    W (8,977    W 3,056,130  

Other receivables

     1,948,108        (101,619      (148      1,846,341  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 5,336,207      W (424,611    W (9,125    W 4,902,471  
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-current assets

           

Trade receivables

   W 892,992      W (4,323    W (34,716    W 853,953  

Other receivables

     513,926        (102,985      (14,125      396,816  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 1,406,918      W (107,308    W (48,841    W 1,250,769  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

Details of other receivables as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021      December 31, 2020  

Loans

   W 104,063      W 116,082  

Receivables 1

     1,911,599        1,699,608  

Accrued income

     17,430        6,901  

Refundable deposits

     348,998        350,180  

Loans receivable

     245,760        150,527  

Finance lease receivables

     81,743        64,047  

Others

     62,010        60,416  

Less: Provision for impairment

     (200,786      (204,604
  

 

 

    

 

 

 
     W      2,570,817      W      2,243,157  
  

 

 

    

 

 

 

 

1

As of September 30, 2021, the settlement receivables of BC Card Co., Ltd. of W1,187,568 million (December 31, 2020: W986,384 million) are included.

The maximum exposure of trade and other receivables to credit risk is the carrying amount of each class of receivables mentioned above as at September 30, 2021.

The Group classifies a certain portion of trade receivables as financial assets at fair value through other comprehensive income considering the trade receivables business model for managing the asset and the cash flow characteristics of the contract.

 

6.

Other Financial Assets and Liabilities

Details of other financial assets and liabilities as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021      December 31, 2020  

Other financial assets

     

Financial assets at amortized cost 1

   W 455,490      W 671,068  

Financial assets at fair value through profit or loss 1,2

     696,917        809,919  

Financial assets at fair value through other comprehensive income 1

     120,238        258,516  

Derivatives used for hedging

     94,365        7,684  

Less: Non-current

     (518,592      (544,347
  

 

 

    

 

 

 

Current

   W 848,418      W 1,202,840  
  

 

 

    

 

 

 

Other financial liabilities

     

Financial liabilities at amortized cost

   W 154,727      W 132,558  

Financial liabilities at fair value through profit or loss

     220,892        2,682  

Derivatives used for hedging

     10,645        127,929  

Less: Non-current

     (375,793      (260,676
  

 

 

    

 

 

 

Current

   W 10,471      W 2,493  
  

 

 

    

 

 

 

 

1

As at September 30, 2021, the Group’s other financial assets amounting to W111,874 million (December 31, 2020: W104,442 million), which consist of checking account deposits, time deposits and others, are subject to withdrawal restrictions.

2 

As at September 30, 2021, MMW(Money Market Wrap) and MMT(Money Market Trust) amounting to W306,073 million (December 31, 2020: W509,068 million) are included in other financial assets.

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

Details of financial assets at fair value through profit or loss as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021      December 31, 2020  

Equity instruments (Listed)

   W 27,521      W 46,449  

Equity instruments (Unlisted)

     50,490        83,017  

Debt securities

     618,233        680,453  

Derivative held for trading

     673        —    
  

 

 

    

 

 

 
     696,917      809,919  

Less: Non-current

     (329,576      (276,109
  

 

 

    

 

 

 

Current

   W 367,341      W 533,810  
  

 

 

    

 

 

 

The maximum exposure of debt instruments of financial assets recognized at fair value through profit or loss to credit risk is the carrying amount as at September 30, 2021.

Investment in Korea Software Financial Cooperative amounting to W5,417 million is provided as collateral.

Details of financial assets at fair value through other comprehensive income as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021      December 31, 2020  

Equity instruments (Listed)

   W 21,824      W 6,216  

Equity instruments (Unlisted)

     92,092        245,730  

Debt securities

     6,322        6,570  
  

 

 

    

 

 

 
     120,238      258,516  

Less: Non-current

     (120,238      (258,516
  

 

 

    

 

 

 

Current

   W —        W —    
  

 

 

    

 

 

 

Upon disposal of these equity instruments, any balance within the accumulated other comprehensive income for these equity instruments is not reclassified to profit or loss, but to retained earnings. Upon disposal of debt securities, remaining balance of the accumulated other comprehensive income of debt investments is reclassified to profit or loss.

During the period ended September 30, 2021, the Group sold all of Mastercard Inc. shares. The fair value of the shares sold is W206,840 million, and the cumulative amount recognized in comprehensive income after tax is W76,296 million. Of these, W53,052 million is reclassified as retained earnings attributable to owners of the Controlling Company.

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

Details of valuation of derivatives used for hedging as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021      December 31, 2020  
     Assets      Liabilities      Assets      Liabilities  

Interest rate swap 1

   W —        W 237      W —        W 1,078  

Currency swap 2

     93,541        10,408        7,684        126,189  

Currency forwards 3

     824        —          —          662  
  

 

 

    

 

 

    

 

 

    

 

 

 
     94,365        10,645        7,684        127,929  

Less: Non-current

     (60,426      (180      (2,111      (126,408
  

 

 

       

 

 

    

 

 

 

Current

   W 33,939      W 10,465      W 5,573      W 1,521  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

1

The interest rate swap contract is to hedge the risk of variability in future fair value of the borrowings.

2

The currency swap contract is to hedge the risk of variability in cash flow from the borrowings. In applying the cash flow hedge accounting, the Group hedges its exposures to cash flow fluctuation until September 7, 2034.

3

The currency forward contract is to hedge the risk of variability in cash flow from transactions in foreign currencies due to changes in foreign exchange rate.

The full value of a hedging derivative is classified as a non-current asset or liability if the remaining maturity of the hedged item is more than 12 months and, as a current asset or liability, if the maturity of the hedged item is less than 12 months.

The valuation gains and losses on the derivative contracts for the nine-month periods ended September 30, 2021 and 2020, are as follows:

 

     2021      2020  
Type of transaction    Valuation
gain
     Valuation
loss
    

Other

comprehensive
income1

     Valuation
gain
     Valuation
loss
    

Other

comprehensive
income1

 

Interest rate swap

   W —        W —        W 1      W —        W —        W (1,204

Currency swap

     200,935        10        190,001        59,398        17,153        55,796  

Currency forwards

     961        —          —          1,522        —          —    
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W 201,896      W 10      W 190,002      W 60,920      W 17,153      W 54,592  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

1 

The amounts are before adjustments of deferred income tax directly reflected in equity and allocation to the non-controlling interest.

The ineffective portion recognized in profit or loss on the cash flow hedge is valuation gain of W11,558 million for the period ended September 30, 2021 (nine-month period ended September 30, 2020: valuation gain of W3,192 million).

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

Details of financial liabilities at fair value through profit or loss at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021      December 31, 2020  

Financial liabilities at fair value through profit or loss

     

Redeemable Convertible Preferred Stock

   W 18,965      W —    

Drag-Along Right 1

     198,467        —    

Others

     3,460        2,682  
  

 

 

    

 

 

 
     W            220,892      W             2,682  
  

 

 

    

 

 

 

 

1 

The Group granted the Drag Along Right to the financial investors, who are participating in capital increase with consideration of K Bank Inc. for the nine-month period ended September 30, 2021. According to the Drag-Along Right, if K Bank inc. fails to list their stock on the public market upon the agreed terms since the date of completion of the acquisition, financial investors may exercise the Drag-Along right to the Group, and the Group may comply or exercise the right to sell. If financial investors exercise the Drag-Along Right, the Group must exercise the right to sell or guarantee the return to the financial investors upon the agreed terms.

The valuation gain and loss on financial liabilities at fair value through profit or loss for the nine-month periods ended September 30, 2021 and 2020, are as follows:

 

(in millions of Korean won)    2021      2020  
    

Valuation

gain

    

Valuation

loss

    

Valuation

gain

    

Valuation

loss

 

Drag-Along Right

   W 6,856      W —        W —        W —    

Others

     3,455        —          39        4  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 10,311      W     —        W         39      W         4  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

7.

Inventories

Inventories as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021      December 31, 2020  
     Acquisition
cost
     Valuation
allowance
   

Carrying

amount

     Acquisition
cost
     Valuation
allowance
   

Carrying

amount

 

Merchandise

   W 458,580      W (93,167   W 365,413      W 650,856      W (133,224   W 517,632  

Others

     41,225        —         41,225        17,004        —         17,004  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 
   W 499,805      W (93,167   W 406,638      W 667,860      W (133,224   W 534,636  
  

 

 

    

 

 

   

 

 

    

 

 

    

 

 

   

 

 

 

Cost of inventories recognized as expenses for the nine-month period ended September 30, 2021, amounts to W2,673,172 million (nine-month period ended September 30, 2020: W2,672,684 million) and recovery of valuation loss on inventory amounts to W40,057 million for the nine-month period ended September 30, 2021 (nine-month period ended September 30, 2020: recovery of valuation loss of W 34,873 million).

 

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Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

8.

Other Assets and Liabilities

Other assets and liabilities as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021      December 31, 2020  

Other assets

     

Advance payments

   W 164,440      W 168,302  

Prepaid expenses

     141,900        66,578  

Contract cost 1

     1,764,248        1,804,948  

Contract assets 1

     713,618        586,438  

Others

     68,344        18,747  

Less: Non-current

     (746,250      (768,661
  

 

 

    

 

 

 

Current

   W  2,106,300      W  1,876,352  
  

 

 

    

 

 

 

Other liabilities

     

Advances received 1

   W 270,522      W 328,491  

Withholdings

     122,304        105,415  

Unearned revenue 1

     37,514        29,593  

Lease liabilities

     1,168,541        1,143,640  

Contract liabilities 1

     314,070        384,133  

Others

     23,853        21,597  

Less: Non-current

     (913,180      (909,570
  

 

 

    

 

 

 

Current

   W 1,023,624      W 1,103,299  
  

 

 

    

 

 

 

 

1 

The amounts include adjustments arising from adoption of Korean IFRS 1115 Revenue from Contracts with Customers (Note 20).

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

9.

Assets Held for Sale

During the third quarter, the consolidated company decided to sell some real estate and other assets and classified them as assets held for sale. The specific details of assets held for sale are as follows.

 

(in millions of Korean won)    2021  

Land

   W 172  

Building

     938  

Others

     88  
  

 

 

 

Total

   W 1,198  
  

 

 

 

The price of sale was expected to exceed the carrying amount of net assts, and as a result, no impairment was recognized for the segment classified as held for sale.

 

10.

Property and Equipment, Investment Properties, and Intangible Assets

Changes in property and equipment for the nine-month periods ended September 30, 2021 and 2020, are as follows:

 

(in millions of Korean won)    2021      2020  

Beginning, net

   W 14,206,119      W 13,785,299  

Acquisition and capital expenditure

     1,745,816        1,967,668  

Disposal and termination

     (65,211      (53,317

Depreciation

     (1,942,202      (1,924,755

Transfer to investment property

     (48,735      (1,881

Scope change

     111,370        913  

Others

     (87,638      (386
  

 

 

    

 

 

 

Ending, net

   W 13,919,519      W 13,773,541  
  

 

 

    

 

 

 

Details of property and equipment provided as collateral as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021
     Carrying
amount
     Secured
amount
     Related line
item
   Related
amount
     Secured party
Land and Buildings    W  11,482      W  15,587      Borrowings    W  3,073      Industrial
Bank of
Korea/Korea
Development
Bank

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

(in millions of Korean won)    December 31, 2020
     Carrying amount      Secured
amount
     Related line
item
   Related
amount
     Secured party

Land and Buildings

   W  11,644      W  15,502      Borrowings    W  3,072      Industrial
Bank of
Korea/Korea
Development
Bank
     4,142        249      Deposits      249      K Bank Inc.

Changes in investment properties for the nine-month periods ended September 30, 2021 and 2020, are as follows:

 

(in millions of Korean won)    2021      2020  

Beginning, net

   W 1,368,453      W  1,387,430  

Acquisition

     329,237        22,860  

Disposal

     (1,907      (654

Depreciation

     (38,350      (48,795

Transfer from (to) property and equipment

     48,735        1,881  

Scope change

     7,087        —    

Others

     (21,973      (11,244
  

 

 

    

 

 

 

Ending, net

   W 1,691,282      W 1,351,478  
  

 

 

    

 

 

 

As at September 30, 2021, the Group (Lessor) has entered into a non-cancellable operating lease contract relating to real estate lease. The future minimum lease fee under this contract is W 70,433 million for one year or less, W 135,527 million more than one year and less than five years, W 89,826 million over five years, and W 295,786 million in total.

Details of investment properties provided as collateral as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021  
     Carrying
amount
     Secured
amount
     Related
account
   Related
amount
 

Land and Buildings

   W  799,167      W  66,288      Deposits    W  57,696  

Land and Buildings

     2,796        3,513      Borrowings      2,927  

 

(in millions of Korean won)    December 31, 2020  
     Carrying
amount
     Secured
amount
     Related
account
   Related
amount
 

Land and Buildings

   W  790,414      W  62,968      Deposits    W  56,247  

Land and Buildings

     2,861        3,434      Borrowings      2,928  

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

Changes in intangible assets for the nine-month periods ended September 30, 2021 and 2020, are as follows:

 

(in millions of Korean won)    2021      2020  

Beginning, net

   W  2,161,258      W  2,834,037  

Acquisition and capital expenditure

     767,449        161,859  

Disposal and termination

     (12,676      (13,259

Amortization

     (445,341      (473,693

Scope change

     599,556        3,621  

Others

     12,285        4,855  
  

 

 

    

 

 

 

Ending, net

   W 3,082,531      W 2,517,420  
  

 

 

    

 

 

 

The carrying amount of membership rights and others, excluding goodwill, with indefinite useful life not subject to amortization is W 219,565 million as at September 30, 2021 (December 31, 2020: W 221,099 million).

In April 2021, the Group was reassigned with a portion of the 1.8GHz and 900MHz bands in accordance with Article 11 of the Radio Waves Act (frequency allocation based on consideration). The payment for the frequency use right is W 547,800 million and W 141,300 million for the 1.8GHz and 900MHz bands, respectively. The Group paid a portion of the consideration paid in a lump sum in September 2021, and plans to pay the remainder in installments every year for the next five years.

Goodwill is allocated to the Group’s cash-generating unit which is identified by operating segments. As at September 30, 2021, goodwill allocated to each cash-generating unit is as follows:

 

(In millions of Korean won)       
Operating Segment    Cash-Generating Unit    Amount  

ICT

   Mobile services1    W 65,057  

Finance

   BC Card Co., Ltd.1      41,234  

Satellite TV

   HCN Co., Ltd      275,265  

Others

   GENIE Music Corporation1      50,214  
   MILLIE Co., Ltd.      45,434  
   PlayD Co., Ltd.1      42,745  
   KT Telecop Co., Ltd. 1      15,418  
   Epsilon Global Communications PTE. Ltd.      158,654  
   MEDIA GENIE Co., Ltd.      13,782  
   KT MOS Bukbu Co., Ltd. and others      15,550  
     

 

 

 
   W  723,353  
     

 

 

 

 

1

The recoverable amounts of telecom wireless business, BC Card Co., Ltd. and KT Telecop Co., Ltd. are calculated based on value-in use calculations. The recoverable amounts of GENIE Music Corporation and PlayD Co., Ltd. are calculated based on fair value less costs to sell. These calculations use pre-tax cash flow projections for the next five years based on financial budgets. Cash flow that exceeds the period of financial budgets is projected by expected growth rate. This growth rate does not exceed the long-term average growth rate of the industry which the cash-generate unit belongs in. The Group estimated its revenue growth rate based on past performance and its expectation of future market changes. The Group determined cash flow projections based on past performance and its estimation of market growth. Specific risks of related operating segments are reflected in the discount rate.

 

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Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

11.

Investments in Associates and Joint Ventures

Details of associates as at September 30, 2021 and December 31, 2020, are as follows:

 

     Percentage of ownership (%)     Location    Closing month
  

September 30,

2021

    December 31,
2020
          

KIF Investment Fund

     33.3     33.3   Korea    December 31

KT-IBKC Future Investment Fund 1 1

     50.0     50.0   Korea    December 31

K Bank Inc.

     33.7     34.0   Korea    December 31

Hyundai Robotics Co., Ltd. 2

     10.0     10.0   Korea    December 31

IGIS Professional investors Private Investment Real Estate Investment LLC No 395

     35.3     35.3   Korea    December 31

 

1

At the end of the reporting period, although the Group has 50% ownership, the equity method of accounting has been applied as the Group, which is a limited partner of the investment fund, cannot participate in determining the operating and financial policies.

2

At the end of the reporting period, although the Group has less than 20% ownership in ordinary share, this entity is included in investments in associates as the Group has a significant influence in determining the operating and financial policies.

Changes in investments in associates and joint ventures for the nine-month periods ended September 30, 2021 and 2020, are as follows:

 

     2021  
(in millions of Korean won)    Beginning     

Acquisition

(Disposal)

    Share of net profit
(loss) from associates
and joint ventures 1
    Others     Ending  

KIF Investment Fund

   W  170,155      W —       W 6,660     W (7,194   W  169,621  

KT-IBKC Future Investment Fund 1

     16,190        (5,700     1,631       —          12,121  

K Bank Inc.

     208,272        424,957       1,703       193,917       828,849  

Hyundai Robotics Co., Ltd.

     50,936        —         (392     169       50,713  

IGIS Professional investors Private Investment Real Estate Investment LLC No 395

     17,786        —         (338     —         17,448  

Others

     94,542        32,352       88,777       (41,709     173,962  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
   W 557,881      W  451,609     W  98,041     W  145,183     W  1,252,714  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

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Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

     2020  
(in millions of Korean won)    Beginning     

Acquisition

(Disposal)

    Share of net profit
(loss) from associates
and joint ventures 1
    Others     Ending  

KIF Investment Fund

   W  163,975      W —       W 6,283     W  (11,745)     W  158,513  

KT-IBKC Future Investment Fund 1

     14,100        —         1,400       —         15,500  

KT-CKP New Media Investment Fund

     134        (134     —         —         —    

K Bank Inc.

     45,158        195,011       (17,828     (1,629     220,712  

Hyundai Robotics Co., Ltd.

     —          50,000       101       176       50,277  

Others 1

     44,293        10,400       6,799       (8,518     52,974  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
   W 267,660      W  255,277     W  (3,245   W (21,716   W 497,976  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

1

KT Investment Co., Ltd., a subsidiary of the Group, recognized its share in net profit (loss) from associates and joint ventures as operating revenue and expense. These include its share in net loss from associates and joint ventures of W 153 million (nine-month period ended September 30, 2020: net profit of W 187 million) recognized as operating revenue and expense during the period.

Summarized financial information of associates and joint ventures as at September 30, 2021 and December 31, 2020 and for the nine-month periods ended September 30, 2021 and 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021  
     Assets      Liabilities      Operating
revenue
    

Profit (loss)

for the period

 

KIF Investment Fund

   W 508,862      W —        W —        W  19,979  

KT-IBKC Future Investment Fund 1

     24,243        —          4,614        3,263  

K Bank Inc.

     14,343,610        12,561,007        190,153        8,446  

Hyundai Robotics Co., Ltd.

     417,829        118,487        146,362        (3,921

IGIS Professional investors Private Investment Real Estate Investment LLC No 395

     115,628        66,192        —          (235

 

(in millions of Korean won)    December 31, 2020      September 30, 2020  
     Assets      Liabilities      Operating
revenue
    

Profit (loss)

for the period

 

KIF Investment Fund

   W 510,464      W —        W —        W 18,852  

KT-IBKC Future Investment Fund 1

     32,379        —          4,499        2,801  

K Bank Inc

     4,329,813        3,840,993        52,686        (70,324

Hyundai Robotics Co., Ltd.

     441,505        139,939        56,683        1,008  

IGIS Professional investors Private Investment Real Estate Investment LLC No 395

     116,853        66,459        —          —    

 

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Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

Due to the discontinuance of equity method accounting, the Group has not recognized loss from associates and joint ventures of W 708 million for the nine-month period ended September 30, 2021 (nine-month period ended September 30, 2020: loss of W 595 million). The accumulated comprehensive loss of associates and joint ventures as at September 30, 2021, which was not recognized by the Group, is W 8,935 million (December 31, 2020: W 8,228 million).

 

12.

Trade and Other Payables

Details of trade and other payables as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021      December 31, 2020  

Current liabilities

     

Trade payables

   W  1,309,655      W  1,239,717  

Other payables

     4,846,189        4,970,382  
  

 

 

    

 

 

 
   W  6,155,844      W 6,210,099  
  

 

 

    

 

 

 

Non-current liabilities

     

Trade payables

   W  1,473      W  1,528  

Other payables1

     1,081,241        806,012  
  

 

 

    

 

 

 
   W  1,082,714      W  807,540  
  

 

 

    

 

 

 

 

1

As at September 30, 2021, other payables include residual considerations related to new frequency acquisitions (Note 10).

Details of other payables as at September 30, 2021 and December 31, 2020, are as follows:

 

(in millions of Korean won)    September 30, 2021      December 31, 2020  

Non-trade payables 1

   W  3,710,366      W  3,841,227  

Accrued expenses

     1,225,239        933,978  

Operating deposits

     780,146        803,904  

Others

     211,679        197,285  

Less: Non-current

     (1,081,241      (806,012
  

 

 

    

 

 

 

Current

   W  4,846,189      W  4,970,382  
  

 

 

    

 

 

 

 

1

Settlement payables of BC Card Co., Ltd., a subsidiary of the Group, of W 1,270,843 million related to credit card transactions are included as at September 30, 2021 (December 31, 2020: W 1,007,171 million)

 

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Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

13.

Borrowings

Details of borrowings as at September 30, 2021 and December 31, 2020, are as follows:

Debentures

 

(in millions of Korean won and foreign currencies in thousands)   September 30, 2021      December 31, 2020  
Type    Maturity    Annual interest
rates
 

Foreign

currency

    

Korean

won

    

Foreign

currency

    

Korean

won

 

MTNP notes 1

   Sep. 7, 2034    6.500%     USD 100,000        118,490        USD 100,000      W  108,800  

MTNP notes

   Jul. 18, 2026    2.500%     USD 400,000        473,960        USD 400,000        435,200  

MTNP notes

   Aug. 7, 2022    2.625%     USD 400,000        473,960        USD 400,000        435,200  

FR notes 2

   Aug. 23, 2023    LIBOR(3M)+0.900%     USD 100,000        118,490        USD 100,000        108,800  

MTNP notes

   Jul. 6, 2021    —       —          —          JPY 16,000,000        168,682  

MTNP notes

   Jul. 19, 2022    0.220%     JPY 29,600,000        313,221        JPY 29,600,000        312,061  

MTNP notes

   Jul. 19, 2024    0.330%     JPY 400,000        4,233        JPY 400,000        4,217  

MTNP notes

   Sep. 1, 2025    1.000%     USD 400,000        473,960        USD 400,000        435,200  

FR notes 2

   Nov. 1, 2024    LIBOR(3M)+0.980%     USD 350,000        414,715        USD 350,000        380,800  

FR notes 2

   Jun. 19, 2023    SOR(6M)+0.500%     SGD 284,000        247,117        SGD 284,000        233,510  

MTNP notes

   Jan. 21, 2027    1.375%     USD 300,000        355,470        —          —    

The 180-2nd Public bond

   Apr. 26, 2021    —       —          —          —          380,000  

The 181-3rd Public bond

   Aug. 26, 2021    —       —          —          —          250,000  

The 182-2nd Public bond

   Oct. 28, 2021    4.310%     —          100,000        —          100,000  

The 183-2nd Public bond

   Dec. 22, 2021    4.090%     —          90,000        —          90,000  

The 183-3rd Public bond

   Dec. 22, 2031    4.270%     —          160,000        —          160,000  

The 184-2nd Public bond

   Apr. 10, 2023    2.950%     —          190,000        —          190,000  

The 184-3rd Public bond

   Apr. 11, 2033    3.170%     —          100,000        —          100,000  

The 186-3rd Public bond

   Jun. 26, 2024    3.418%     —          110,000        —          110,000  

The 186-4th Public bond

   Jun. 26, 2034    3.695%     —          100,000        —          100,000  

The 187-3rd Public bond

   Sep. 2, 2024    3.314%     —          170,000        —          170,000  

The 187-4th Public bond

   Sep. 2, 2034    3.546%     —          100,000        —          100,000  

The 188-2nd Public bond

   Jan. 29, 2025    2.454%     —          240,000        —          240,000  

The 188-3rd Public bond

   Jan. 29, 2035    2.706%     —          50,000        —          50,000  

The 189-2nd Public bond

   Jan. 28, 2021    —       —          —          —          130,000  

The 189-3rd Public bond

   Jan. 28, 2026    2.203%     —          100,000        —          100,000  

The 189-4rd Public bond

   Jan. 28, 2036    2.351%     —          70,000        —          70,000  

The 190-1st Public bond

   Jan. 29, 2021    —       —          —          —          110,000  

The 190-2nd Public bond

   Jan. 30, 2023    2.749%     —          150,000        —          150,000  

The 190-3rd Public bond

   Jan. 30, 2028    2.947%     —          170,000        —          170,000  

The 190-4th Public bond

   Jan. 30, 2038    2.931%     —          70,000        —          70,000  

The 191-1st Public bond

   Jan. 14, 2022    2.048%     —          220,000        —          220,000  

The 191-2nd Public bond

   Jan. 15, 2024    2.088%     —          80,000        —          80,000  

The 191-3rd Public bond

   Jan. 15, 2029    2.160%     —          110,000        —          110,000  

The 191-4th Public bond

   Jan. 14, 2039    2.213%     —          90,000        —          90,000  

The 192-1st Public bond

   Oct. 11, 2022    1.550%     —          340,000        —          340,000  

The 192-2nd Public bond

   Oct. 11, 2024    1.578%     —          100,000        —          100,000  

 

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Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

(in millions of Korean won and foreign currencies in thousands)    September 30, 2021      December 31, 2020  
Type    Maturity    Annual interest
rates
  

Foreign

currency

    

Korean

won

    

Foreign

currency

    

Korean

won

 

The 192-3rd Public bond

   Oct. 11, 2029    1.622%      —          50,000        —          50,000  

The 192-4th Public bond

   Oct. 11, 2039    1.674%      —          110,000        —          110,000  

The 193-1st Public bond

   Jun. 16, 2023    1.174%      —          150,000        —          150,000  

The 193-2nd Public bond

   Jun. 17, 2025    1.434%      —          70,000        —          70,000  

The 193-3rd Public bond

   Jun. 17, 2030    1.608%      —          20,000        —          20,000  

The 193-4th Public bond

   Jun. 15, 2040    1.713%      —          60,000        —          60,000  

The 194-1st Public bond

   Jan. 26, 2024    1.127%      —          130,000        —          —    

The 194-2nd Public bond

   Jan. 27, 2026    1.452%      —          140,000        —          —    

The 194-3rd Public bond

   Jan. 27, 2031    1.849%      —          50,000        —          —    

The 194-4th Public bond

   Jan. 25, 2041    1.976%      —          80,000        —          —    

The 195-1st Public bond

   Jun. 10, 2024    1.387%      —          180,000        —          —    

The 195-2nd Public bond

   Jun. 10, 2026    1.806%      —          80,000        —          —    

The 195-3rd Public bond

   Jun. 10, 2031    2.168%      —          40,000        —          —    

The 148th MTN

   Jun. 23, 2023    1.513%      —          100,000        —          100,000  

The 149-1st MTN

   Mar. 08, 2024    1.440%      —          70,000        —          —    

The 149-2nd MTN

   Mar. 10, 2026    1.756%      —          30,000        —          —    

The 150-1st MTN

   Apr. 7, 2023    1.154%      —          20,000        —          —    

The 150-2nd MTN

   Apr. 8, 2024    1.462%      —          30,000        —          —    

The 151-1st MTN

   May. 12, 2023    1.191%      —          10,000        —          —    

The 151-2nd MTN

   May. 14, 2024    1.432%      —          40,000        —          —    

The 152-1st MTN

   Aug. 30, 2024    1.813%      —          80,000        —          —    

The 152-2nd MTN

   Aug. 28, 2026    1.982%      —          20,000        —          —    

The 18-1st MTN

   Jul. 2, 2024    1.844%      —          100,000        —          —    

The 18-2nd MTN

   Jul. 2, 2026    2.224%      —          50,000        —          —    
           

 

 

       

 

 

 

Subtotal

        7,613,616           6,962,470  

Less: Current portion

        (1,195,475         (1,228,283

Discount on bonds

        (23,735         (19,847
     

 

 

       

 

 

 

Total

      W 6,394,406         W 5,714,340  
     

 

 

       

 

 

 

 

1 

As at September 30, 2021, the Group has outstanding notes in the amount of USD 100 million with fixed interest rates under Medium Term Note Program (“MTNP”) registered in the Singapore Stock Exchange, which allowed issuance of notes of up to USD 2,000 million. However, the MTNP has been terminated since 2007.

2 

The Libor (3M) and SOR (6M) is approximately 0.130% and 0.229% as at September 30, 2021.

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

Convertible bonds

 

(in millions of Korean won)  
Type    Issuance Date      Maturity     

Annual

Interest Rate

    September 30, 2021     December 31, 2020  

The 1st CB(Private) 1,2

     Jun. 5, 2020        Jun. 5, 2025        0.000   W 8,000     W 8,000  

Redemption premium

             2,267       2,267  

Bond discount issuance

             (4,042     (4,644
          

 

 

   

 

 

 

Subtotal

             6,225       5,623  

Current portion

             —         —    
          

 

 

   

 

 

 

Total

           W 6,225     W 5,623  
          

 

 

   

 

 

 

 

1 

Common shares of Storywiz are subject to conversion (appraisal period: June 5, 2021~ May 4, 2025).

2 

Nominal interest rate and maturity yield is approximately 0% and 5%, respectively, and will be settled on maturity.

Short-term borrowings

 

(in millions of Korean won)         September 30, 2021      December 31, 2020  
Type    Financial institution    Annual interest rates

Operational

   NongHyup Bank    2.060%    W 11,032      W 40,189  
   Shinhan Bank    2.740%      4,000        —    
   Shinhan Bank    —        —          22,500  
   Shinhan Bank    —        —          10,000  
   Woori Bank    —        —          1,900  
   Woori Bank    CD(3M) + 1.900%~1.970%      20,000        —    
   Korea Development Bank    1.890%~3.680%      26,000        10,000  
   Industrial Bank of Korea    2.550%      6,000        200  
   Hana Bank    —        —          11,000  
   Hana Bank    1.020%~2.530%      6,455        —    
   KB Securities Co., Ltd    0.890%~1.380%      111,000        —    
   Kiwoom Securities Co., Ltd    1.380%      23,000        —    
   NH Investment & Securities Co., Ltd    0.890%~1.380%      83,000        —    
   Korea Investment & Securiies Co., Ltd    1.240%      10,000        —    
   Shinhan Investment Corp.    1.240%~1.380%      43,000        —    
   HSBC    2.075%      16,589        —    
        

 

 

    

 

 

 
   W 360,076      W 95,789  
  

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

Long-term borrowings

 

(in millions of Korean won and thousands of
foreign currencies)
            

September 30, 2021

    December 31, 2020  
Financial institution    Type   

Annual interest

rates

  

Foreign

currency

  

Korean

won

   

Foreign

currency

    

Korean

won

 

Export-Import Bank of Korea

  

Inter-Korean

Cooperation Fund 1

   1.000%    —      W 2,467       —        W 2,961  

Industrial Bank of Korea

   General loans    —      —        —         —          6,000  

CA-CIB

   Long-term CP    1.260%    —        100,000       —          100,000  

Shinhan Bank

   General loans    3.230%    USD 7,002      8,297       —          —    
   General loans    —      —        —         —          5,000  
   General loans    1.900%    USD 4,470      5,297       —          —    
   General loans    2.630%    USD 20,000      23,698       —          —    
   General loans 2    LIBOR(3M)+1.650%    USD 8,910      10,557       USD 8,910        9,694  
   General loans 2    LIBOR(3M)+2.130%    USD 25,000      29,623       USD 25,000        27,200  
   General loans 2    LIBOR(3M)+1.847%    USD 13,000      15,404       —          —    
   Facility loans 2    LIBOR(3M)+1.340%    USD 25,918      30,710       USD 25,918        28,199  

NongHyup Bank

   PF loans    1.852%    —        117,500       —          —    
   Facility loans    2.000%    —        36       —          54  

Korea Development Bank

   General loans    —      —        —         —          30,000  
   General loans    —      —        —         —          10,000  
   General loans    3.000%    —        30,000       —          —    
   General loans    1.920%    —        9,000       —          —    

Woori Bank

   General loans    3.320%    —        15,000       —          —    
   PF loans    2.480%    —        14,069       —          —    
   PF loans    2.000%    —        5,113       —          —    

Kookmin Bank and others2

   Facility loans2    LIBOR(3M)+1.850%    USD 19,542      23,155       USD 48,855        53,155  
        

 

  

 

 

   

 

 

    

 

 

 

Subtotal

              439,926          272,263  

Less: Current portion

              (32,673        (94,042
           

 

 

      

 

 

 
            W 407,253        W 178,221  
           

 

 

      

 

 

 

 

1 

The above Inter-Korean Cooperation Fund is repayable in installments over 13 years after a seven-year grace period.

2 

LIBOR(3M) is approximately 0.130% as at September 30, 2021.

 

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Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

Repayment schedule of the Group’s debentures and borrowings including the portion of current liabilities as at September 30, 2021, is as follows:

 

(in millions of Korean won)    Debentures      Borrowings      Total  
     In local
currency
     In foreign
currency
     Sub-total      In local
currency
     In foreign
currency
     Sub-total         

Oct. 1, 2021~ Sep. 30, 2022

   W 410,000      W 787,181      W 1,197,181      W 353,005      W 39,744      W 392,749      W 1,589,929  

Oct. 1, 2022~ Sep. 30, 2023

     960,000        365,607        1,325,607        233,006        86,294        319,300        1,644,907  

Oct. 1, 2023~ Sep. 30, 2024

     990,000        4,233        994,233        35,494        13,593        49,087        1,043,319  

Oct. 1, 2024~ Sep. 30, 2025

     410,000        888,675        1,298,675        5,494        —          5,493        1,304,168  

After Oct. 1, 2025

     1,858,000        947,920        2,805,920        9,675        23,698        33,373        2,839,293  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W 4,628,000      W 2,993,616      W 7,621,616      W 636,673      W 163,329      W 800,002      W 8,421,618  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

14.

Provisions

Changes in provisions for the nine-month periods ended September 30, 2021 and 2020, are as follows:

 

(in millions of Korean won)    2021  
     Litigation      Restoration cost      Others      Total  

Beginning balance

   W 76,500      W 105,767      W 69,925      W 252,192  

Increase (transfer)

     1,509        8,556        14,457        24,522  

Usage

     (2,590      (2,487      (1,802      (6,879

Reversal

     —          (1,299      (14,073      (15,372

Change in consolidation scope

     —          (586      438        (148
  

 

 

    

 

 

    

 

 

    

 

 

 

Ending balance

   W 75,419      W 109,951      W 68,945      W 254,315  
  

 

 

    

 

 

    

 

 

    

 

 

 

Current

   W 75,419      W 28,148      W 64,413      W 167,980  

Non-current

     —          81,803        4,532        86,335  

 

(in millions of Korean won)    2020  
     Litigation      Restoration cost      Others      Total  

Beginning balance

   W 64,241      W 113,289      W 76,631      W 254,161  

Increase (transfer)

     1,683        (1,294      26,710        27,099  

Usage

     (1,769      (1,849      (5,939      (9,557

Reversal

     (60      (652      (20,645      (21,357

Change in consolidation scope

     7        227        54,161        54,395  
  

 

 

    

 

 

    

 

 

    

 

 

 

Ending balance

   W 64,102      W 109,721      W 130,918      W 304,741  
  

 

 

    

 

 

    

 

 

    

 

 

 

Current

   W 64,102      W 19,628      W 97,047      W 180,777  

Non-current

     —          90,093        33,871        123,964  

 

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Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

15.

Net Defined Benefit Liabilities

The amounts recognized in the statements of financial position as at September 30, 2021 and December 31, 2020, are determined as follows:

 

(in millions of Korean won)    September 30, 2021      December 31, 2020  

Present value of defined benefit obligations

   W 2,647,581      W 2,556,712  

Fair value of plan assets

     (2,143,749      (2,189,375
  

 

 

    

 

 

 

Liabilities

   W 503,832      W 378,087  
  

 

 

    

 

 

 

Assets

   W —        W 10,750  
  

 

 

    

 

 

 

Changes in the defined benefit obligations for the nine-month periods ended September 30, 2021 and 2020, are as follows:

 

(in millions of Korean won)    2021      2020  

Beginning

   W 2,556,712      W 2,427,351  

Current service cost

     186,130        185,391  

Interest expense

     32,516        32,720  

Past service cost

     —          1,353  

Benefits paid

     (136,273      (155,070

Remeasurements

     (16,312      2,652  

Change in consolidation scope

     24,130        9,415  

Others

     678        1,692  
  

 

 

    

 

 

 

Ending

   W 2,647,581      W 2,505,504  
  

 

 

    

 

 

 

Changes in the fair value of plan assets for the nine-month periods ended September 30, 2021 and 2020, are as follows:

 

(in millions of Korean won)    2021      2020  

Beginning

   W 2,189,375      W 2,069,710  

Interest income

     28,673        28,112  

Remeasurements on plan assets

     547        3,233  

Employer contributions

     16,362        13,774  

Benefits paid

     (112,281      (139,108

Change in consolidation scope

     19,638        8,264  

Others

     1,435        (1,517
  

 

 

    

 

 

 

Ending

   W 2,143,749      W 1,982,468  
  

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

Amounts recognized in the consolidated statement of profit or loss for the nine-month periods ended September 30, 2021 and 2020, are as follows:

 

(in millions of Korean won)    2021      2020  

Current service cost

   W 186,130      W 185,391  

Net interest cost

     3,843        4,608  

Past service cost

     —          1,353  

Account transfers

     (11,424      (12,308
  

 

 

    

 

 

 

Total expenses

   W 178,549      W 179,044  
  

 

 

    

 

 

 

 

16.

Commitments and Contingencies

As at September 30, 2021, major commitments with local financial institutions are as follows:

 

(in millions of Korean won and foreign currencies
in thousands)
   Financial institution    Currency    Limit      Used amount  

Bank overdraft

   Kookmin Bank and others    KRW      1,442,600        4,000  

Inter-Korean Cooperation Fund

   Export-Import Bank of Korea    KRW      37,700        2,467  

Insurance for Economic Cooperation project

   Export-Import Bank of Korea    KRW      3,240        1,732  

Collateralized loan on electronic accounts receivable-trade

   Kookmin Bank and others    KRW      411,135        24,017  

Plus electronic notes payable

   Industrial Bank of Korea    KRW      50,000        275  

Loans for working capital

  

Korea Development Bank and others

   KRW
    
200,426
 
    
132,426
 
   Shinhan Bank    USD      258,300        65,842  

Facility loans

   Shinhan Bank and others    KRW      209,123        19,219  

Derivatives transaction limit

   Korea Development Bank    KRW      100,000        8,043  
   Woori Bank and others    USD      69,054        21,210  
        

 

 

    

 

 

 
      KRW      2,454,224        192,179  

Total

      USD      327,354        87,052  
        

 

 

    

 

 

 

 

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KT Corporation and Subsidiaries

Notes to the Consolidated Interim Financial Statements

September 30, 2021 and 2020 (Unaudited), and December 31, 2020

 

 

As at September 30, 2021, guarantees received from financial institutions are as follows:

 

(in millions of Korean won and foreign currencies in
thousands)
   Financial institution    Currency      Limit  

Performance guarantee

   Seoul Guarantee Insurance and others      KRW        153,914  
   Hana Bank      USD        1,200  

Guarantee for payment in foreign currency

   Kookmin Bank and others      USD        31,484  

Guarantee for payment in Korean currency

   Shinhan Bank      KRW        48,159  

Refund guarantee for advances received

   Korea Development Bank and others      USD        8,536  

Comprehensive credit line

   Hana Bank      KRW        44,100  
        USD        8,700  

Bid guarantee

   Hana Bank and others      USD        688,380  

Bid guarantee

   Korea Software Financial Cooperative and others      KRW        50,028  

Performance guarantee / warranty guarantee

        KRW        465,627  

Guarantee for advance payments / others

        KRW