KT CORPORATION 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 March 2024
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 ☒ Form40-F ☐
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: March 7, 2024 | ||
| KT Corporation | ||
| By: | /s/ Youngkyoon Yun | |
| Name: | Youngkyoon Yun | |
| Title: | Vice President | |
| By: | /s/ Sanghyun Cho | |
| Name: | Sanghyun Cho | |
| Title: | Director |
Notice of the 42nd Annual General Meeting of Shareholders
CONTENTS
| 3 | ||||
| 4 | ||||
| 5 | ||||
• Report on Audit Results by the Audit Committee | * | |||
| 6 | ||||
• Report on Evaluation Results of Management Performance for the 42nd Fiscal Year | 7 | |||
• Report on Standards and Method of Payment for Remuneration of Directors | 8 | |||
• Report on Operating Status of Internal Control over Financial Reporting | * | |||
| 11 | ||||
| 12 | ||||
• Agenda No. 1 Approval of Financial Statements for the 42nd Fiscal Year | 13 | |||
| 28 | ||||
• Agenda No. 3 Approval of Ceiling Amount on Remuneration for Directors | 31 |
| * | To be presented at the meeting |
2
Notice of the Annual General Meeting of Shareholders
March 7, 2024
To our shareholders,
KT Corporation will be holding the 42nd Annual General Meeting of Shareholders ("the Meeting") on March 28th, 2024.
At the Meeting, the Company will report on its performance and relevant issues from FY2023, as listed in the "Matters to be Reported" section of this document. Shareholders will be requested to vote on agenda items, including the Amendments to the Articles of Incorporation.
Holders of KT Corporation's common stock as of December 31, 2023, will have the right to vote at the meeting, with each stock being entitled to one vote per agenda item.
KT Corporation would like to thank our shareholders for their continued investment and support. The Company understands that shareholders consider a range of matters before submitting their vote. We hope that our shareholders will find the information in this notice helpful to make an informed decision.
We invite you to attend our upcoming Annual General Meeting on March 28th, 2024. We wish you good health and look forward to your participation.
Young-Shub Kim
Chief Executive Officer
| • | Date and Time: Thursday, March 28th, 2024 at 9:00 a.m. (KST) |
| • | Place: Lecture Hall (2F) of KT Corporation's R&D Center, 151 Taebong-ro,Seocho-gu, Seoul, Korea |
| • | Record Date: December 31, 2023 |
3
General Information for Voting
| • | Number and Classification of Voting Shares |
The record date to exercise voting rights at the AGM is December 31, 2023. As of the record date, the total number of KT shares issued was 257,860,760. The number of common shares, excluding treasury shares, entitled to exercise voting rights was 246,413,422 shares.
| • | Method of Resolution |
Pursuant to the provisions of the Commercial Act, Agenda No. 1 and 3 shall be passed by the majority of votes cast by shareholders present at the meeting and at least one-fourth of total shares entitle to vote. Agenda No. 2 shall be passed by at least two-thirds of votes cast by shareholders present at the meeting and at least one-third of total shares entitled to vote.
4
Matters to be Reported
5
Business Report for the 42nd Fiscal Year
Pursuant to Article 447-2(Preparation of Business Report) and Article 449 of the Commercial Act (Approval and Public Notice of Financial statements, etc.), KT's 42nd annual business report is as follows:
In FY2023, KT has continued to generate stable profits through balanced growth in the B2C and B2B sectors. KT's Group portfolio including finance, real estate, content, and DX also continued to grow. KT plans to position itself as an 'AICT' company, integrating AI capabilities into ICT capabilities with the aim of continued robust growth based on our core competencies.
In the wireless business, revenue growth was led by the expansion of 5G and MVNO subscribers and an increase in roaming revenue. As of the end of 2023, 5G subscribers have grown to approximately 9.83 million, accounting for about 73% of the total wireless handset subscribers. In fixed-line services, there was an expansion of high-quality service demand, leading to an increase in GiGA internet and high-ARPU IPTV subscriptions.
In the B2B sector, steady revenue growth was led by constant demand for corporate lines and the growth of emerging businesses such as AI and IoT. Both the AI Contact Center (AICC) and KT's LLM 'Mi:dm' have led the AI market. In the financial sector, BC Card achieved revenue growth based on the establishment of new businesses, such as the private label credit cards and loan business, while K Bank has solidified its medium to long-term business foundation with growth in its key business indicators, including deposits, loans, and its customer base. Additionally, KT Estate's hotel business thrived, KT Cloud continued to see growth in cloud and data center revenue, and KT Studio Genie strengthened its market presence by producing and broadcasting 14 original content programs in 2023. In September 2023, Millie's Library successfully completed its IPO.
In 2023, KT achieved a standalone revenue of KRW 18.37 trillion, operating profit of KRW 1.19 trillion, and net profit of KRW 933.3 billion. As of the end of 2023, the current status of major services and subscribers is as follows:
Subscribers (Unit: 10K) | Mobile | Broadband | IPTV | PSTN | VoIP | |||||||||||||||
December 31, 2023 | 2,490 | 983 | 941 | 882 | 321 | |||||||||||||||
December 31, 2022 | 2,406 | 973 | 943 | 938 | 321 |
6
Report on Evaluation Results of Management Performance for the 42nd Fiscal Year
Pursuant to Article 34 (Execution of Employment Contract with the Representative Director), evaluations results for Representative Directors performance shall be reported at the Meeting as described below.
The Evaluation and Compensation Committee has reviewed the performance of management for FY2023. The following table summarizes the annual KPIs and evaluation results of the Representative Director's short-term performance.
Item | Annual KPI | Weight | Score | |||||||
Quantitative KPI | - Service revenue of KT Corporation - Operating profit of KT Corporation | 65 | % | 64.27 | % | |||||
Qualitative KPI | - Management stabilization - Business innovation - Competence innovation | 35 | % | 34.00 | % | |||||
Total | 100 | % | 98.27 | % | ||||||
7
Report on Standards and Method of Payment for Remuneration of Directors
Pursuant to Article 31 (Remuneration and Severance Allowance for Directors) of the KT's Articles of Incorporation, the criteria in place to determine the remuneration for executive directors and the method of payment are reported as follows:
For clarification, the term 'executive director' refers to an inside director, whereas a 'non-executive director' represents an outside director.
| • | Summary of Executive Compensation Program |
The Company's Executive Compensation program is designed to reward management for both short-term and long-term performance. The Company believes it is critical to maintain a well-balanced incentive program that encourages the management not only to achieve short-term performance but also to strive for the Company's long-term value enhancement. The Company's Evaluation and Compensation Committee sets annual goals and conducts performance evaluations of the management on an annual basis. The Evaluation and Compensation Committee is composed entirely of outside directors in order to maintain objectivity and fairness of the program. While it's uncommon for Korean companies to disclose such standards and methods, the Company not only discloses but also reports this information to the AGM to ensure transparency in executive compensation.
| • | Components of Executive Compensation |
The remuneration for executive officers consists of annual salary, short-term performance-based incentives, long-term performance-based incentives, and severance packages.
The annual salary is further separated into two major factors - base salary and payment for the responsibility of office. Compensation is made on a monthly basis at an amount equivalent to one-twelfth of the annual salary.
Short-term performance-based incentives are paid in cash. The amount varies in accordance with each director's performance evaluation by the Evaluation and Compensation Committee. Specific payment schemes related to short-term incentives are as follows:
| • | Representative Director : 0~180% of base salary |
| • | Other Inside Directors : 0~140% of base salary |
8
Long-term performance-based incentives are paid in the form of a stock grant with a lock-up period of three years. The amount is determined based on TSR (Total Shareholder's Return), Group EBITDA and Group Revenue. Specific payment schemes related to long-term incentives are as follows:
| • | Representative Director : 0~140% of base salary |
| • | Other Inside Directors : 0~95% of base salary |
Severance payment is calculated using the following formulas:
| • | Representative Director : |
(Average monthly salary) x (number of years in service) x (5)
| • | Other Inside Directors : |
(Average monthly salary) x (number of years in service) x (3)
Fringe benefits are paid in accordance with relevant standards.
| • | Criteria for Evaluation |
The Company's performance evaluation process begins with the setting of annual goals by the Evaluation and Compensation Committee. Annual goals are established in alignment with the Company's overall operational and financial goals with an emphasis on improving shareholder value.
Short-term Performance
Short-term performance is comprised of quantitative and qualitative factors. Typically, quantitative goals are related to financial and operational performances, whereas qualitative goals are focused on achieving operational and strategic goals to further enhance long-term competitiveness. Weighted Key Performance Indicator (KPI) is in place to assess annual short-term performance. Please refer to "Report on Evaluation Results of Management Performance for the 42nd Fiscal Year" for results of the Representative Director's short-term performance for FY2023.
Long-term Performance
Long-term performance incentives are provided to reward management's contribution to long-term financial and operational competitiveness. Incentives are offered in accordance with TSR (Total Shareholder Return), Group EBITDA and Group Revenue; each factor has a weight of 20%, 40% and 40% respectively. TSR is computed by the relative performance of the Company's TSR against the TSR of KOSPI and other domestic telecommunication service providers. The following illustrates the formulas for TSR, Group EBITDA and Group Revenue:
| • | TSR : Share Price Return + Shareholders Return (Dividend and Share Retirement) |
| • | TSR Result : 100% + {KT's TSR - (Domestic Telco's TSR x 80% + KOSPI TSR x 20%)} |
| • | Group EBITDA : Operating profit + Depreciation & Amortization |
| • | Group Revenue : Consolidated revenue |
9
| • | Compensation for Outside Directors |
Until February 2010, the Company had no stock-based compensation program for outside directors. Instead, fixed amounts of compensation were paid to outside directors as allowances to execute their respective duties. However, the BoD introduced a new compensation program for outside directors in March 2010. The program consists of cash and annual stock grants which are subject to one-year lock-up period beginning at the start of the year it is awarded. The stock grant is not subject to any performance criteria and has been introduced to ensure that outside directors have "skin in the game" to align their interests with all shareholders. The total remuneration for outside directors in FY2023 was KRW 675 million.
| • | Summary of Total Compensation |
1) Compensation Paid to Directors
(KRW millions)
Year | Inside Directors | Outside Directors | Total | |||||||||||||||||
| Total | Average | Total | Average | |||||||||||||||||
2021 | 4,979 | 1,660 | 827 | 103 | 5,806 | |||||||||||||||
2021 excl. severance pay | 3,439 | 1,146 | 827 | 103 | 4,266 | |||||||||||||||
2022 | 2,994 | 1,497 | 786 | 98 | 3,780 | |||||||||||||||
2023 | 4,209 | 2,104 | 675 | 84 | 4,884 |
| * | The amount above represents actual cash payments executed each FY. |
| * | The amount includes severance pay for former-inside directors following the Severance Pay Regulations for Executives. |
| * | FY2021 severance pay for former-inside director Mr. Yoon-Young Park (13.32 years of service) was KRW 1,540 million |
| * | In FY2021, compensation was given to three inside directors and eight outside directors; In FY2022 and in FY2023, compensation was given to two inside directors and eight outside directors. |
2) Comparison between total compensation paid and ceiling amounts on remuneration approved at the Annual General Meeting of Shareholders.
(KRW millions)
Year | Total Compensation(A) |
Ceiling Amount on Remuneration(B)* |
Payment Ratio(A/B) | |||||||||
2021 | 5,806 | 5,800 | 100.1 | % | ||||||||
2021 excl. severance pay | 4,266 | 5,800 | 73.6 | % | ||||||||
2022 | 3,780 | 5,800 | 65.2 | % | ||||||||
2023 | 4,884 | 5,800 | 84.2 | % |
| * | Maximum amounts of remuneration allowed per accrual basis |
10
Report on Treasury Share Ownership and Utilization Plan
Pursuant to Article 48-2(Treasury Stock Report) of KT's Articles of Incorporation, KT shall report the purpose of treasury share ownership and utilization plan at the annual general shareholder's meetings.
Treasury Share Ownership
During FY2023, the Company acquired 9,760,946 treasury shares, and disposed or cancelled 3,382,738 treasury shares. As of December 31, 2023, the Company holds 11,447,338 treasury shares.
Treasury Share Utilization Plan
KT plans to utilize treasury shares as performance-based incentives for executives and employee compensation as well as stock grants for outside directors. Treasury shares will also be used to enhance corporate and shareholder value through strategic partnerships or share cancellations.
Concrete utilization plans will be disclosed after the resolution of the Board of Directors.
11
Matters Requiring Resolution
12
Agenda No. 1
Approval of Financial Statements for the 42nd Fiscal Year
Pursuant to Article 449 of the Commercial Act (Approval and Public Notice of Financial Statements), approval of the financial statements for the 42nd fiscal year is hereby requested.
Background Information
The consolidated and separate financial statements included below have not yet been audited and remain subject to the audit process of the Company's independent auditors. The Company's audit report for the 42nd fiscal year based on K-IFRS standards, including audited financial statements and the respective accompanying notes, will be uploaded on the Company's website (https://corp.kt.com/eng/html/investors/financial/audit_01.html) on March 18th, 2024.
From fiscal years 2020 to 2022, the Company has received an unqualified opinion from the Company's independent auditors.
13
KT Corporation and Subsidiaries
Consolidated Statements of Financial Position
Years Ended December 31, 2023 and 2022
| (in millions of Korean won) | December 31, 2023 | December 31, 2022 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | W | 2,879,554 | W | 2,449,062 | ||||
Trade and other receivables, net | 7,170,289 | 6,098,072 | ||||||
Other financial assets | 1,440,200 | 1,322,452 | ||||||
Current income tax assets | 3,299 | 1,543 | ||||||
Inventories, net | 912,262 | 709,191 | ||||||
Current assets held-for-sale | - | - | ||||||
Other current assets | 2,112,553 | 2,101,212 | ||||||
Total current assets | 14,518,157 | 12,681,532 | ||||||
Non-current assets | ||||||||
Trade and other receivables, net | 1,404,168 | 1,491,046 | ||||||
Other financial assets | 2,724,761 | 2,501,484 | ||||||
Property and equipment, net | 14,872,079 | 14,772,179 | ||||||
Right-of-use assets | 1,304,963 | 1,280,334 | ||||||
Investment properties, net | 2,198,135 | 1,933,358 | ||||||
Intangible assets, net | 2,533,861 | 3,129,833 | ||||||
Investments in associates and joint ventures | 1,556,889 | 1,480,722 | ||||||
Deferred income tax assets | 608,924 | 578,443 | ||||||
Net defined benefit assets | 160,748 | 311,142 | ||||||
Other non-current assets | 827,297 | 820,608 | ||||||
Total non-current assets | 28,191,825 | 28,299,149 | ||||||
Total assets | W | 42,709,982 | W | 40,980,681 | ||||
14
KT Corporation and Subsidiaries
Consolidated Statements of Financial Position
Years Ended December 31, 2023 and 2022
| (in millions of Korean won) | December 31, 2023 | December 31, 2022 | ||||||
Liabilities | ||||||||
Current liabilities | ||||||||
Trade and other payables | W | 8,054,922 | W | 7,333,165 | ||||
Borrowings | 3,058,564 | 1,827,042 | ||||||
Other financial liabilities | 322,099 | 8,791 | ||||||
Current income tax liabilities | 236,463 | 232,382 | ||||||
Other provisions | 115,209 | 109,133 | ||||||
Deferred income | 51,537 | 55,737 | ||||||
Other current liabilities | 1,308,615 | 1,133,018 | ||||||
Total current liabilities | 13,147,409 | 10,699,268 | ||||||
Non-current liabilities | ||||||||
Trade and other payables | 819,558 | 1,064,099 | ||||||
Borrowings | 7,159,601 | 8,179,643 | ||||||
Other financial liabilities | 753,739 | 412,650 | ||||||
Net defined benefit liabilities | 63,616 | 51,654 | ||||||
Other provisions | 107,014 | 91,233 | ||||||
Deferred income | 153,563 | 165,186 | ||||||
Deferred income tax liabilities | 994,330 | 967,650 | ||||||
Other non-current liabilities | 950,015 | 934,575 | ||||||
Total non-current liabilities | 11,001,436 | 11,866,690 | ||||||
Total liabilities | 24,148,845 | 22,565,958 | ||||||
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 | 14,494,430 | 14,257,343 | ||||||
Accumulated other comprehensive income | 52,407 | (77,776 | ) | |||||
Other components of equity | (802,418 | ) | (572,152 | ) | ||||
| 16,749,176 | 16,612,172 | |||||||
Non-controlling interest | 1,811,961 | 1,802,551 | ||||||
Total equity | 18,561,137 | 18,414,723 | ||||||
Total liabilities and equity | W | 42,709,982 | W | 40,980,681 | ||||
15
KT Corporation and Subsidiaries
Consolidated Statements of Profit or Loss
Years Ended December 31, 2023 and 2022
| (in millions of Korean won, except per share amounts) | 2023 | 2022 | ||||||
Operating revenue | W | 26,376,273 | W | 25,650,011 | ||||
Operating expenses | 24,726,499 | 23,959,923 | ||||||
Operating profit | 1,649,774 | 1,690,088 | ||||||
Other income | 308,044 | 595,351 | ||||||
Other expenses | 507,904 | 314,607 | ||||||
Finance income | 486,277 | 690,428 | ||||||
Finance costs | 568,682 | 749,908 | ||||||
Share of net losses of associates and joint ventures | (43,424 | ) | (17,285 | ) | ||||
Profit before income tax expense | 1,324,085 | 1,894,067 | ||||||
Income tax expense | 335,367 | 506,404 | ||||||
Profit for the year | W | 988,718 | W | 1,387,663 | ||||
Profit for the year attributable to: | ||||||||
Owners of the Controlling Company: | W | 1,009,861 | W | 1,262,498 | ||||
Non-controlling interest: | (21,143 | ) | 125,165 | |||||
Earnings per share attributable to the equity holders of the Controlling Company during the year (in Korean won): | ||||||||
Basic earnings per share | W | 4,043 | W | 5,209 | ||||
Diluted earnings per share | 4,038 | 5,205 |
16
KT Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
Years Ended December 31, 2023 and 2022
| (in millions of Korean won) | 2023 | 2022 | ||||||
Profit for the year | W | 988,718 | W | 1,387,663 | ||||
Other comprehensive income | ||||||||
Items that will not be reclassified to profit or loss: | ||||||||
Remeasurements of net defined benefit liabilities | (137,465 | ) | 181,429 | |||||
Share of remeasurement loss of associates and joint ventures | (105 | ) | (332 | ) | ||||
Gain (loss) on valuation of equity instruments at fair value through other comprehensive income | 121,271 | (141,944 | ) | |||||
Items that may be subsequently reclassified to profit or loss: | ||||||||
Loss on valuation of debt instruments at fair value through other comprehensive income | 534 | (16,630 | ) | |||||
Valuation gain on cash flow hedge | 15,329 | 64,091 | ||||||
Other comprehensive loss from cash flow hedges reclassified to profit or loss | (37,492 | ) | (95,421 | ) | ||||
Share of other comprehensive loss from associates and joint ventures | 21,595 | (10,851 | ) | |||||
Exchange differences on translation of foreign operations | 24,230 | 17,464 | ||||||
Total comprehensive income for the year | W | 996,165 | W | 1,385,469 | ||||
Total comprehensive income for the year attributable to: | ||||||||
Owners of the Controlling Company | W | 1,013,535 | W | 1,236,679 | ||||
Non-controlling interest | (17,370 | ) | 148,790 |
17
KT Corporation and Subsidiaries
Consolidated Statements of Changes in Equity
Years Ended December 31, 2023 and 2022
| Attributable to owners of the Controlling Company | ||||||||||||||||||||||||||||||||
| (in millions of Korean won) |
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, 2022 | W | 1,564,499 | W | 1,440,258 | W | 13,287,390 | W | 117,469 | W | (1,433,080 | ) | W | 14,976,536 | W | 1,590,625 | W | 16,567,161 | |||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||||||
Profit for the year | - | - | 1,262,498 | - | - | 1,262,498 | 125,165 | 1,387,663 | ||||||||||||||||||||||||
Remeasurements of net defined benefit liabilities | - | - | 165,524 | - | - | 165,524 | 15,905 | 181,429 | ||||||||||||||||||||||||
Share of gain on remeasurements of associates and joint ventures | - | - | (189 | ) | - | - | (189 | ) | (143 | ) | (332 | ) | ||||||||||||||||||||
Share of other comprehensive loss of associates and joint ventures | - | - | - | (8,291 | ) | - | (8,291 | ) | (2,560 | ) | (10,851 | ) | ||||||||||||||||||||
Valuation gain on cash flow hedge | - | - | - | (32,140 | ) | - | (32,140 | ) | 810 | (31,330 | ) | |||||||||||||||||||||
Gain on valuation of financial instruments at fair value through other comprehensive income | - | - | 4,091 | (160,785 | ) | - | (156,694 | ) | (1,880 | ) | (158,574 | ) | ||||||||||||||||||||
Exchange differences on translation of foreign operations | - | - | - | 5,971 | - | 5,971 | 11,493 | 17,464 | ||||||||||||||||||||||||
Total comprehensive income for the year | - | - | 1,431,924 | (195,245 | ) | - | 1,236,679 | 148,790 | 1,385,469 | |||||||||||||||||||||||
Transactions with owners | ||||||||||||||||||||||||||||||||
Dividends paid by the Controlling Company | - | - | (450,394 | ) | - | - | (450,394 | ) | - | (450,394 | ) | |||||||||||||||||||||
Dividends paid to non-controlling interest of subsidiaries | - | - | - | - | - | - | (26,407 | ) | (26,407 | ) | ||||||||||||||||||||||
Effect of change in connection range | - | - | - | - | - | - | 3,152 | 3,152 | ||||||||||||||||||||||||
Change in ownership interest in subsidiaries | - | - | - | - | 88,924 | 88,924 | 32,695 | 121,619 | ||||||||||||||||||||||||
Appropriations of loss on disposal of treasury stock | - | - | (11,577 | ) | - | 11,577 | - | - | - | |||||||||||||||||||||||
Disposal of treasury stock | - | - | - | - | 763,081 | 763,081 | - | 763,081 | ||||||||||||||||||||||||
Conversion of redeemable convertible preferred shares of subsidiaries to common shares | - | - | - | - | - | - | 51,476 | 51,476 | ||||||||||||||||||||||||
Others | - | - | - | - | (2,654 | ) | (2,654 | ) | 2,220 | (434 | ) | |||||||||||||||||||||
Subtotal | - | - | (461,971 | ) | - | 860,928 | 398,957 | 63,136 | 462,093 | |||||||||||||||||||||||
Balance as at December 31, 2022 | W | 1,564,499 | W | 1,440,258 | W | 14,257,343 | W | (77,776 | ) | W | (572,152 | ) | W | 16,612,172 | W | 1,802,551 | W | 18,414,723 | ||||||||||||||
18
KT Corporation and Subsidiaries
Consolidated Statements of Changes in Equity
Years Ended December 31, 2023 and 2022
| Attributable to owners of the Controlling Company | ||||||||||||||||||||||||||||||||
| (in millions of Korean won) |
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, 2023 | W1,564,499 | W1,440,258 | W14,257,343 | W | (77,776 | ) | W | (572,152 | ) | W16,612,172 | W1,802,551 | W18,414,723 | ||||||||||||||||||||
Comprehensive income | ||||||||||||||||||||||||||||||||
Profit for the year | - | - | 1,009,861 | - | - | 1,009,861 | (21,143 | ) | 988,718 | |||||||||||||||||||||||
Remeasurements of net defined benefit liabilities | - | - | (126,613 | ) | - | - | (126,613 | ) | (10,852 | ) | (137,465 | ) | ||||||||||||||||||||
Share of gain on remeasurements of associates and joint ventures | - | - | (118 | ) | - | - | (118 | ) | 13 | (105 | ) | |||||||||||||||||||||
Share of other comprehensive loss of associates and joint ventures | - | - | - | 15,775 | - | 15,775 | 5,820 | 21,595 | ||||||||||||||||||||||||
Valuation loss on cash flow hedge | - | - | - | (22,252 | ) | - | (22,252 | ) | (361 | ) | (22,613 | ) | ||||||||||||||||||||
Loss on valuation of financial instruments at fair value through other comprehensive income | - | - | 222 | 126,028 | - | 126,250 | (4,445 | ) | 121,805 | |||||||||||||||||||||||
Exchange differences on translation of foreign operations | - | - | - | 10,632 | - | 10,632 | 13,598 | 24,230 | ||||||||||||||||||||||||
Total comprehensive income for the year | - | - | 883,352 | 130,183 | - | 1,013,535 | (17,370 | ) | 996,165 | |||||||||||||||||||||||
Transactions with owners | ||||||||||||||||||||||||||||||||
Dividends paid by the Controlling Company | - | - | (501,843 | ) | - | - | (501,843 | ) | - | (501,843 | ) | |||||||||||||||||||||
Dividends paid to non-controlling interest of subsidiaries | - | - | - | - | - | - | (24,964 | ) | (24,964 | ) | ||||||||||||||||||||||
Effect of change in connection range | - | - | - | - | - | - | (79,134 | ) | (79,134 | ) | ||||||||||||||||||||||
Change in ownership interest in subsidiaries | - | - | - | - | 216,841 | 216,841 | 128,526 | 345,367 | ||||||||||||||||||||||||
Appropriations of loss on disposal of treasury stock | - | - | (44,422 | ) | - | 44,422 | - | - | - | |||||||||||||||||||||||
Acquisition of treasury stock | - | - | - | - | (300,243 | ) | (300,243 | ) | - | (300,243 | ) | |||||||||||||||||||||
Disposal of treasury stock | - | - | - | - | 4,463 | 4,463 | - | 4,463 | ||||||||||||||||||||||||
Retirement of treasury stock | - | - | (100,000 | ) | - | 100,000 | - | - | - | |||||||||||||||||||||||
Accounting for Acquisitions of Interests in Joint Operations | - | - | - | - | (298,196 | ) | (298,196 | ) | - | (298,196 | ) | |||||||||||||||||||||
Others | 2,447 | 2,447 | 2,352 | 4,799 | ||||||||||||||||||||||||||||
Subtotal | - | - | (646,265 | ) | - | (230,266 | ) | (876,531 | ) | 26,780 | (849,751 | ) | ||||||||||||||||||||
Balance as at December 31, 2023 | W1,564,499 | W1,440,258 | W14,494,430 | W | 52,407 | W | (802,418 | ) | W16,749,176 | W1,811,961 | W18,561,137 | |||||||||||||||||||||
19
KT Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2023 and 2022
| (in millions of Korean won) | 2023 | 2022 | ||||||
Cash flows from operating activities | ||||||||
Cash generated from operations | W | 5,747,195 | W | 3,835,879 | ||||
Interest paid | (361,741 | ) | (263,520 | ) | ||||
Interest received | 360,614 | 307,091 | ||||||
Dividends received | 60,987 | 68,827 | ||||||
Income tax paid | (303,766 | ) | (351,212 | ) | ||||
Net cash inflow from operating activities | 5,503,289 | 3,597,065 | ||||||
Cash flows from investing activities | ||||||||
Collection of loans | 53,885 | 44,287 | ||||||
Disposal of financial assets at fair value through profit or loss | 90,487 | 1,298,621 | ||||||
Disposal of financial assets at amortized cost | 1,543,663 | 1,046,115 | ||||||
Disposal of financial assets at fair value through other comprehensive income | 306 | 97,932 | ||||||
Disposal of investments in associates and joint ventures | 6,890 | 34,828 | ||||||
Disposal of assets held-for-sale | - | 4,600 | ||||||
Disposal of property and equipment and investment properties | 100,348 | 178,063 | ||||||
Disposal of intangible assets | 7,078 | 20,088 | ||||||
Disposal of right-of-use assets | 529 | 97 | ||||||
Increase in cash due to derivatives contracts | 4,888 | - | ||||||
Increase in cash due to changes in scope of consolidation and others | 46,642 | 6,754 | ||||||
Loans granted | (37,771 | ) | (43,694 | ) | ||||
Acquisition of financial assets at fair value through profit or loss | (220,989 | ) | (1,317,175 | ) | ||||
Acquisition of financial assets at amortized cost | (1,875,525 | ) | (1,450,442 | ) | ||||
Acquisition of financial assets at fair value through other comprehensive income | (10,267 | ) | (449,504 | ) | ||||
Acquisition of investments in associates and joint ventures | (106,389 | ) | (280,988 | ) | ||||
Acquisition of property and equipment and investment properties | (3,692,972 | ) | (3,439,857 | ) | ||||
Acquisition of intangible assets | (478,685 | ) | (545,190 | ) | ||||
Acquisition of right-of-use assets | (1,065 | ) | (2,090 | ) | ||||
Decrease in cash due to changes in scope of consolidation and others | (51,561 | ) | (41,088 | ) | ||||
Net cash outflow from investing activities | (4,620,508 | ) | (4,838,643 | ) | ||||
20
KT Corporation and Subsidiaries
Consolidated Statements of Cash Flows
Years Ended December 31, 2023 and 2022
| (in millions of Korean won) | 2022 | 2021 | ||||||
Cash flows from financing activities | ||||||||
Proceeds from borrowings | 5,381,231 | 4,234,570 | ||||||
Cash inflows under derivatives contracts | 48,183 | 76,280 | ||||||
Cash intflow from consolidated equity transaction | 632,776 | 125,066 | ||||||
Cash inflow from other financing activities | 2,082 | 2,193 | ||||||
Repayments of borrowings | (5,275,113 | ) | (2,843,249 | ) | ||||
Dividends paid | (526,826 | ) | (476,800 | ) | ||||
Decrease in lease liabilities | (407,051 | ) | (378,684 | ) | ||||
Cash outflow under derivatives contracts | - | (41,197 | ) | |||||
Acquisition of treasury stock | (300,086 | ) | - | |||||
Cash outflow from consolidated equity transaction | (7,988 | ) | (28,848 | ) | ||||
Cash outflow from other financing activities | - | - | ||||||
Net cash inflow (outflow) from financing activities | (452,792 | ) | 669,331 | |||||
Effect of exchange rate change on cash and cash equivalents | 503 | 1,717 | ||||||
Net increase (decrease) in cash and cash equivalents | 430,492 | (570,530 | ) | |||||
Cash and cash equivalents | ||||||||
Beginning of the year | 2,449,062 | 3,019,592 | ||||||
End of the year | W | 2,879,554 | W | 2,449,062 | ||||
21
December 31, 2023 and 2022
Separate Statements of Financial Position
December 31, 2023 and 2022
| (in millions of Korean won) | December 31, 2023 | December 31, 2022 | ||||||
Assets | ||||||||
Current assets | ||||||||
Cash and cash equivalents | W | 1,242,005 | W | 966,307 | ||||
Trade and other receivables, net | 3,190,269 | 3,055,649 | ||||||
Other financial assets | 279,451 | 232,837 | ||||||
Inventories, net | 368,117 | 349,870 | ||||||
Other current assets | 2,008,723 | 1,998,825 | ||||||
Total current assets | 7,088,565 | 6,603,488 | ||||||
Non-current assets | ||||||||
Trade and other receivables, net | 370,717 | 526,988 | ||||||
Other financial assets | 2,134,324 | 1,993,893 | ||||||
Property and equipment, net | 11,492,776 | 11,540,162 | ||||||
Right-of-use assets | 976,625 | 983,049 | ||||||
Investment properties, net | 1,191,592 | 1,137,489 | ||||||
Intangible assets, net | 1,487,848 | 1,855,679 | ||||||
Investments in subsidiaries, associates and joint ventures | 4,796,606 | 4,879,219 | ||||||
Net defined benefit assets | 60,590 | 180,689 | ||||||
Other non-current assets | 709,276 | 717,118 | ||||||
Total non-current assets | 23,220,354 | 23,814,286 | ||||||
Total assets | W | 30,308,919 | W | 30,417,774 | ||||
22
KT Corporation
Separate Statements of Financial Position
December 31, 2023 and 2022
| (in millions of Korean won) | December 31, 2023 | December 31, 2022 | ||||||
Liabilities | ||||||||
Current liabilities | ||||||||
Trade and other payables | W | 4,232,377 | W | 4,411,056 | ||||
Borrowings | 1,725,234 | 984,720 | ||||||
Other financial liabilities | 660 | - | ||||||
Current income tax liabilities | 148,136 | 127,944 | ||||||
Provisions | 91,861 | 87,720 | ||||||
Deferred income | 39,618 | 44,042 | ||||||
Other current liabilities | 719,605 | 665,968 | ||||||
Total current liabilities | 6,957,491 | 6,321,450 | ||||||
Non-current liabilities | ||||||||
Trade and other payables | 739,766 | 979,050 | ||||||
Borrowings | 5,834,699 | 6,510,841 | ||||||
Other financial liabilities | 23,819 | 37,566 | ||||||
Net defined benefit liabilities | - | - | ||||||
Provisions | 90,493 | 79,374 | ||||||
Deferred income | 145,334 | 158,161 | ||||||
Deferred income tax liabilities | 796,087 | 763,113 | ||||||
Other non-current liabilities | 677,691 | 710,139 | ||||||
Total non-current liabilities | 8,307,889 | 9,238,244 | ||||||
Total liabilities | 15,265,380 | 15,559,694 | ||||||
Equity | ||||||||
Share capital | 1,564,499 | 1,564,499 | ||||||
Share premium | 1,440,258 | 1,440,258 | ||||||
Retained earnings | 12,544,425 | 12,347,403 | ||||||
Accumulated other comprehensive income | 64,229 | (72,672 | ) | |||||
Other components of equity | (569,872 | ) | (421,408 | ) | ||||
Total equity | 15,043,539 | 14,858,080 | ||||||
Total liabilities and equity | W | 30,308,919 | W | 30,417,774 | ||||
23
KT Corporation
Separate Statements of Profit or Loss
Years Ended December 31, 2023 and 2022
| (in millions of Korean won, except per share amounts) | 2023 | 2022 | ||||||
Operating revenue | W | 18,371,437 | W | 18,289,243 | ||||
Operating expenses | 17,186,045 | 17,121,140 | ||||||
Operating profit | 1,185,392 | 1,168,103 | ||||||
Other income | 327,527 | 408,025 | ||||||
Other expenses | 319,586 | 228,723 | ||||||
Finance income | 381,151 | 577,334 | ||||||
Finance costs | 419,210 | 653,996 | ||||||
Profit before income tax | 1,155,274 | 1,270,743 | ||||||
Income tax expense | 221,937 | 506,993 | ||||||
Profit for the year | W | 933,337 | W | 763,750 | ||||
Earnings per share | ||||||||
Basic earnings per share | W | 3,741 | W | 3,153 | ||||
Diluted earnings per share | 3,739 | 3,152 |
24
KT Corporation
Separate Statements of Comprehensive Income
Years Ended December 31, 2023 and 2022
| (in millions of Korean won) | 2023 | 2022 | ||||||
Profit for the year | W | 933,337 | W | 763,750 | ||||
Other comprehensive income (loss) | ||||||||
Items that will not be reclassified to profit or loss: | ||||||||
Remeasurements of net defined benefit liabilities | (90,272 | ) | 114,154 | |||||
Gain (loss) on valuation of equity instruments at fair value through other comprehensive income | 158,245 | (149,638 | ) | |||||
Items that may be subsequently reclassified to profit or loss: | ||||||||
Loss on valuation of debt instruments at fair value through other comprehensive income | (26 | ) | (13,902 | ) | ||||
Valuation gain on cash flow hedges | 16,030 | 56,259 | ||||||
Other comprehensive loss from cash flow hedges reclassified to profit or loss | (37,126 | ) | (91,012 | ) | ||||
Total other comprehensive income (loss) | W | 46,851 | W | (84,139 | ) | |||
Total comprehensive income for the year | W | 980,188 | W | 679,611 | ||||
25
KT Corporation
Separate Statements of Changes in Equity
Years Ended December 31, 2023 and 2022
| (in millions of Korean won) | Share capital |
Share premium |
Retained earnings |
Accumulated other comprehensive income |
Other components of equity | Total | ||||||||||||||||||
Balance at January 1, 2022 | W | 1,564,499 | W | 1,440,258 | W | 11,931,481 | W | 125,610 | W | (1,196,954 | ) | W | 13,864,894 | |||||||||||
Comprehensive income | ||||||||||||||||||||||||
Profit for the year | - | - | 763,750 | - | - | 763,750 | ||||||||||||||||||
Gain on valuation of financial assets at fair value through other comprehensive income | - | - | (11 | ) | (163,529 | ) | - | (163,540 | ) | |||||||||||||||
Remeasurements of net defined benefit liabilities | - | - | 114,154 | - | - | 114,154 | ||||||||||||||||||
Valuation gain on cash flow hedge | - | - | - | (34,753 | ) | - | (34,753 | ) | ||||||||||||||||
Total comprehensive income for the year | - | - | 877,893 | (198,282 | ) | - | 679,611 | |||||||||||||||||
Transactions with equity holders | - | - | ||||||||||||||||||||||
Dividends paid | - | - | (450,394 | ) | - | - | (450,394 | ) | ||||||||||||||||
Appropriation of retained earnings related to loss on disposal of treasury stock | - | - | (11,577 | ) | - | 11,577 | - | |||||||||||||||||
Disposal of treasury stock | - | - | - | 763,081 | 763,081 | |||||||||||||||||||
Others | - | - | - | - | 888 | 888 | ||||||||||||||||||
Balance at December 31, 2022 | W | 1,564,499 | W | 1,440,258 | W | 12,347,403 | W | (72,672 | ) | W | (421,408 | ) | W | 14,858,080 | ||||||||||
Balance at January 1, 2023 | W | 1,564,499 | W | 1,440,258 | W | 12,347,403 | W | (72,672 | ) | W | (421,408 | ) | W | 14,858,080 | ||||||||||
Comprehensive income | ||||||||||||||||||||||||
Profit for the year | - | - | 933,337 | - | - | 933,337 | ||||||||||||||||||
Loss on valuation of financial assets at fair value through other comprehensive income | - | - | 222 | 157,997 | - | 158,219 | ||||||||||||||||||
Remeasurements of net defined benefit liabilities | - | - | (90,272 | ) | - | - | (90,272 | ) | ||||||||||||||||
Valuation loss on cash flow hedge | - | - | - | (21,096 | ) | - | (21,096 | ) | ||||||||||||||||
Total comprehensive income for the year | - | - | 843,287 | 136,901 | - | 980,188 | ||||||||||||||||||
Transactions with equity holders | - | |||||||||||||||||||||||
Dividends paid | - | - | (501,843 | ) | - | - | (501,843 | ) | ||||||||||||||||
Appropriation of retained earnings related to loss on disposal of treasury stock | - | - | (44,422 | ) | - | 44,422 | - | |||||||||||||||||
Acquisition of treasury stock | - | - | - | - | (300,243 | ) | (300,243 | ) | ||||||||||||||||
Disposal of treasury stock | - | - | - | - | 4,463 | 4,463 | ||||||||||||||||||
Retirement of treasury stock | - | - | (100,000 | ) | - | 100,000 | - | |||||||||||||||||
Others | - | - | - | - | 2,894 | 2,894 | ||||||||||||||||||
Balance at December 31, 2023 | W | 1,564,499 | W | 1,440,258 | W | 12,544,425 | W | 64,229 | W | (569,872 | ) | W | 15,043,539 | |||||||||||
26
KT Corporation
Separate Statements of Cash Flows
Years Ended December 31, 2023 and 2022
| (in millions of Korean won) | 2023 | 2022 | ||||||
Cash flows from operating activities | ||||||||
Cash generated from operations | W | 4,657,805 | W | 4,128,185 | ||||
Interest paid | (246,516 | ) | (202,579 | ) | ||||
Interest received | 191,289 | 211,170 | ||||||
Dividends received | 115,324 | 98,874 | ||||||
Income tax paid | (165,648 | ) | (173,297 | ) | ||||
Net cash inflow from operating activities | 4,552,254 | 4,062,353 | ||||||
Cash flows from investing activities | ||||||||
Collection of loans | 36,724 | 133,864 | ||||||
Disposal of current financial instruments at amortized cost | 343,231 | 900 | ||||||
Disposal of financial assets at fair value through profit or loss | 4,155 | 1,695 | ||||||
Disposal of financial assets at fair value through other comprehensive income | 306 | - | ||||||
Disposal of investments in subsidiaries, associates and joint ventures | 73,556 | 36,028 | ||||||
Disposal of property and equipment | 30,010 | 60,619 | ||||||
Disposal of intangible assets | 2,860 | 17,047 | ||||||
Disposal of right-of-use assets | 458 | 96 | ||||||
Loans granted | (30,107 | ) | (125,146 | ) | ||||
Acquisition of current financial instruments at amortized cost | (304,450 | ) | (117,764 | ) | ||||
Acquisition of non-current financial instruments at amortized cost | - | (226,030 | ) | |||||
Acquisition of financial assets at fair value through profit or loss | (46,437 | ) | (115,415 | ) | ||||
Acquisition of financial assets at fair value through other comprehensive income | (10,267 | ) | (442,176 | ) | ||||
Acquisition of investments in subsidiaries, associates and joint ventures | (49,032 | ) | (348,607 | ) | ||||
Acquisition of property and equipment | (2,928,008 | ) | (2,980,008 | ) | ||||
Acquisition of intangible assets | (311,317 | ) | (307,689 | ) | ||||
Acquisition of right-of-use assets | (926 | ) | (1,984 | ) | ||||
Net cash outflow from in investing activities | (3,189,244 | ) | (4,414,570 | ) | ||||
Cash flows from financing activities | ||||||||
Proceeds from borrowings and bonds | 2,207,827 | 1,741,962 | ||||||
Settlement of derivative instruments (inflow) | 46,525 | 76,280 | ||||||
Dividend paid | (501,843 | ) | (450,394 | ) | ||||
Repayments of borrowings and debentures | (2,206,730 | ) | (1,359,117 | ) | ||||
Settlement of derivative instruments (outflow) | (300,086 | ) | (41,197 | ) | ||||
Acquisition of treasury stock | - | - | ||||||
Decrease in lease liabilities | (333,042 | ) | (357,337 | ) | ||||
Net cash outflow from financing activities | (1,087,349 | ) | (389,803 | ) | ||||
Effect of exchange rate change on cash and cash equivalents | 37 | (387 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 275,698 | (742,407 | ) | |||||
Cash and cash equivalents | ||||||||
Beginning of the year | 966,307 | 1,708,714 | ||||||
End of the year | W | 1,242,005 | W | 966,307 | ||||
27
Agenda No. 2
Amendment to the Articles of Incorporation
In order to introduce quarterly dividends and to improve the dividend payment procedure, approval of the following changes to the Articles of Incorporation is requested.
Background Information
Proposed changes to the Articles of Incorporation have been drafted following a resolution by the Board of Directors. The amendment includes:
| 1) | Introduction of quarterly dividends; |
| 2) | Change of record date for dividend payment; and |
| 3) | Clarification of terminology (only applicable to the Korean Articles of Incorporation) |
The information above is drafted to improve shareholder's understanding. For more accurate excerpts, please refer to subsequent pages. If any potential conflict exists, the following information shall prevail.
No. 2-1, Introduction of Quarterly Dividends>
Before Amendment | After Amendment | Purpose | ||
Article 49. (Payment of Dividends) (4) Pursuant to a resolution of the Board of Directors, KT may pay interim dividends once during a fiscal year with June 30 as a base date (referred to as the fixed interim dividend date). | Article 49. (Payment of Dividends) (4) (Deleted) | To delete the Article regarding interim dividends for the introduction of quarterly dividends | ||
(Omitted) (6) The rights to dividends shall be extinguished if it is not exercised within five (5) years from the date when the relevant dividend was declared, and such unclaimed dividends shall belong to KT. | (Omitted) (6) (Unchanged) |
28
Before Amendment | After Amendment | Purpose | ||
| (New) | Article 49-2. (Quarterly Dividends) (1) The Company may pay quarterly dividends in cash to the Shareholders who hold the shares at the end of March, June or September from the commencement of the fiscal year by a resolution of the Board of Directors. (2) The dividends referred to in Paragraph (1) shall be paid to the shareholders or registered pledgees who are registered in the registry of shareholders. (3) All matters, including the limitation on the amount and specific method of the quarterly dividends referred to in Paragraph(1), shall comply with relevant laws including Financial Investment Services and Capital Markets Act. (4) The dividends referred to in Paragraph(1) shall be subject to Paragraph (6) of Article 49. | To introduce quarterly dividends |
No. 2-2, Change of Record Date for Dividend Payment>
Before Amendment | After Amendment | Purpose | ||
Article 49. (Payment of Dividends) (1) Dividends may be paid either in cash, in shares or in other property. | Article 49. (Payment of Dividends) (1) (Unchanged) | To change the record date for dividend payment | ||
(Omitted) (5) The dividends referred to in Paragraphs (1) and (4) shall be paid to the shareholders or registered pledgees who are registered in the registry of shareholders as of the date referred to paragraph (1) of Article 14 or as of the fixed interim dividend date. | (Omitted) (5) The dividends referred to in Paragraph (1) shall be paid to the shareholders or registered pledgees registered in the registry of shareholders as of the date determined by the resolution of the Board of Directors. When the Company decides the date for determining the shareholders eligible for dividends, it shall make announcement two weeks before the record date. |
29
No. 2-3, Clarification of Terminology>
* Change in terminology is applicable only to the Korean Articles of Incorporation. Therefore, Article 34 will remain unchanged in English.
Before Amendment | After Amendment | Purpose | ||
Article 34. (Execution of Employment Contract with the Candidate for Representative Director) (4) The management goal shall include revenue increase, profitability improvement, investment plan and other related business objectives and shall be determined, on a yearly basis, at the Board of Directors' Meeting in order to achieve the goal of management plans during the term of Representative Director's office approved by the Board of Directors. Such management goal may be established on a numerical basis, if possible. | Article 34. (Execution of Employment Contract with the Candidate for Representative Director) (4) (Unchanged) | N/A |
Addendum
Before Amendment | After Amendment | Purpose | ||
| (New) | ADDENDUM (March 28, 2024) Article 1. (Enforcement Date) These Articles of Incorporation shall become effective from the date on which a resolution on the foregoing amendments is adopted at the General Meeting of Shareholders. Article 2. (Transitional Measure on the record date to determine the shareholders who will receive the Dividends) The paragraph (5) of Article 49 does not apply to dividends for the fiscal year prior to the enforcement of these Articles of Incorporation. | To add effective date of amended Articles of Incorporation as of date of the resolution at the Annual General Meeting of Shareholders |
30
Agenda No. 3
Approval of Ceiling Amount on Remuneration for Directors
Pursuant to Article 388 (Remuneration of Directors) of the Commercial Act and Article 31 (Remuneration and Severance Payment for Directors) of Articles of Incorporation of KT, approval of a ceiling amount on remuneration for directors is hereby requested.
The compensation of all directors is deliberated by the Evaluation and Compensation Committee, which consists of outside directors only. The committee also is responsible for evaluating the performance of the Representative Director and proposing the ceiling amount on the directors' remuneration for shareholders' approval.
In determining the ceiling amount on remuneration for directors, the following factors are considered: annual salary, short-term and long-term performance-based incentives as well as provisions for severances and allowances. Actual amounts paid for the recent three years are disclosed in the "Report on Standards and Method of Payment for Remuneration of Directors." Included herein.
For FY2024, the ceiling amount, proposed by the BoD, on remuneration for directors is KRW 5.8 billion.
31
Attachments
- Original Link
- Permalink
Disclaimer
KT Corporation published this content on 07 March 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 07 March 2024 15:07:04 UTC.
