Form 6-K KT CORP For: Nov 26

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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-

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

KT Corporation and Subsidiaries

Consolidated Interim Financial Statements

September 30, 2021 and 2020

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

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

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.

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.

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.

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.

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.

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.

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.

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.

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.

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

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

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.

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

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	)

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	)

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.

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

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

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.

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

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

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.

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.

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 forwards³		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).

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

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).

KT Corporation and Subsidiaries

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).

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

11,482

15,587

Borrowings

3,073

Industrial
Bank of
Korea/Korea
Development
Bank

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

11,644

15,502

Borrowings

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

799,167

66,288

Deposits

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

790,414

62,968

Deposits

56,247

Land and Buildings

2,861

3,434

Borrowings

2,928

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

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.

KT Corporation and Subsidiaries

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

KT Corporation and Subsidiaries

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
Others¹		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

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		—		—

KT Corporation and Subsidiaries

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)

KT Corporation and Subsidiaries

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

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 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

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.

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	September 30, 2021		December 31, 2020
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

KT Corporation and Subsidiaries

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 Fund¹	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.

KT Corporation and Subsidiaries

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

KT Corporation and Subsidiaries

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