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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2018
Text block [abstract] |
Commitments and Contingencies |
20. | Commitments and Contingencies
As at December 31, 2018, major commitments with local financial institutions are as follows:
(In millions of Korean won and thousands of foreign currencies) |  | Financial institution |  | Currency |  |  | Limit |  |  | Used amount |
Bank overdraft |  | Kookmin Bank and others |  |  | KRW |  |  |  | 1,697,000 |  |  |  | — |
Commercial papers |  | NH Investment & Securities Co., Ltd. |  |  | KRW |  |  |  | 300,000 |  |  |  | 300,000 |
Inter-Korean Cooperation Fund |  | Export-Import Bank of Korea |  |  | KRW |  |  |  | 37,700 |  |  |  | 3,948 |
Collateralized loan on electronic accounts receivable-trade |  | Shinhan Bank and others |  |  | KRW |  |  |  | 495,560 |  |  |  | 70,759 |
Plus electronic notes payable |  | Industrial Bank of Korea |  |  | KRW |  |  |  | 50,000 |  |  |  | 960 |
Loans for working capital |  | Korea Development Bank and others |  |  | KRW |  |  |  | 254,300 |  |  |  | 158,000 |
Facility loans |  | Shinhan Bank and others |  |  | KRW |  |  |  | 10,123 |  |  |  | 8,406 |
|  | Kookmin Bank and others |  |  | USD |  |  |  | 212,000 |  |  |  | 127,024 |
Facility loans on ships |  | Shinhan Bank |  |  | USD |  |  |  | 9,000 |  |  |  | 9,000 |
Export L/C |  | Shinhan Bank |  |  | USD |  |  |  | — |  |  |  | 1,156 |
Derivatives transaction limit |  | Korea Development Bank |  |  | KRW |  |  |  | 100,000 |  |  |  | 64,622 |
FX forward trading commitment |  | Shinhan Bank |  |  | USD |  |  |  | 11,500 |  |  |  | — |
Total |  |  |  |  | KRW |  |  |  | 2,944,683 |  |  |  | 606,695 |
|  |  |  |  | USD |  |  |  | 232,500 |  |  |  | 137,180 |
As at December 31, 2018, guarantees received from financial institutions are as follows:
(In millions of Korean won and thousands of foreign currencies) |  | Financial institution |  | Currency |  |  | Limit |
Performance guarantee |  | Seoul Guarantee Insurance and others |  |  | KRW |  |  |  | 299,689 |
|  |  |  |  | USD |  |  |  | 1,200 |
Guarantee for import letters of credit |  | Industrial Bank of Korea and others |  |  | USD |  |  |  | 5,980 |
Guarantee for payment in Korean currency |  | Shinhan Bank and others |  |  | KRW |  |  |  | 5 |
Guarantee for payment in foreign currency |  | KEB Hana and others |  |  | USD |  |  |  | 51,766 |
|  |  |  |  | PLN | 1 |  |  | 23,000 |
Comprehensive credit line |  | KEB Hana Bank and others |  |  | KRW |  |  |  | 40,000 |
Comprehensive credit line |  | KEB Hana Bank |  |  | USD |  |  |  | 10,000 |
Bid guarantee |  | KEB Hana Bank |  |  | USD |  |  |  | 400 |
Bid guarantee |  |  |  |  | KRW |  |  |  | 58,992 |
Performance guarantee /Warranty Guarantee |  | Korea Software Financial Cooperative and others |  |  | KRW |  |  |  | 376,420 |
Guarantee for advances received/others |  |  |  |  | KRW |  |  |  | 124,901 |
Bid guarantee |  |  |  |  | KRW |  |  |  | 350 |
Warranty guarantee |  |  |  |  | KRW |  |  |  | 1,037 |
Guarantees for licensing |  |  |  |  | KRW |  |  |  | 4,070 |
Performance guarantee/Warranty Guarantee |  | Seoul Guarantee Insurance |  |  | KRW |  |  |  | 996 |
Guarantee for public sale |  |  |  |  | KRW |  |  |  | 120 |
Guarantee for deposits |  |  |  |  | KRW |  |  |  | 3,525 |
Total |  |  |  |  | KRW |  |  |  | 910,105 |
|  |  |  |  | USD |  |  |  | 69,346 |
|  |  |  |  | PLN | 1 |  |  | 23,000 |
1 | Polish Zloty.
As at December 31, 2018, guarantees provided by the Group to a third party, are as follows:
(In millions of Korean won and thousands of foreign currencies) |  | Subject to payment guarantees |  | Creditor |  | Currency |  |  | Limit |  |  | Used amount |  |  | Period |
KT Estate Inc. |  | Busan Gaya Centreville Buyers |  | Shinhan Bank |  |  | KRW |  |  |  | 4,854 |  |  |  | 2,503 |  |  |  | Nov 10, 2017 ~Oct. 31, 2020 |
KT Estate Inc. |  | Daegu Beomeo-Crossroads SeohanIDaum Buyers |  | Shinhan Bank |  |  | KRW |  |  |  | 8,172 |  |  |  | 4,271 |  |  |  | Oct 29, 2017 ~Nov. 30, 2020 |
KT Hitel Co., Ltd. |  | Shinhan Bank |  | Cash payers |  |  | KRW |  |  |  | 538 |  |  |  | — |  |  |  | Apr 19, 2018 ~Apr 19, 2019 |
KT Hitel Co., Ltd. |  | Korea Software Financial Cooperative |  | Yonsei University and others |  |  | KRW |  |  |  | 34,715 |  |  |  | 1,616 |  |  |  | Oct 22, 2018 ~Oct 22, 2021 |
BC Card Co., Ltd |  | PT BCcard Asia Pacific |  | Shinhan Bank, Indonesia |  |  | IDR |  |  |  | 8,000,000 |  |  |  | 8,000,000 |  |  |  | Sep 18, 2018 ~Sep 17, 2019 |
The Controlling Company is jointly and severally obligated with KT Sat Co., Ltd. to pay KT Sat Co., Ltd.’s liabilities incurred prior to spin-off. As at December 31, 2018, the Controlling Company and KT Sat Co., Ltd. are jointly and severally liable for reimbursement of ￦3,480 million. For the year ended December 31, 2018, the Group made agreements with the Securitization Specialty Companies (2018: Giga LTE Thirty seventh to Forty second Securitization Specialty Co., Ltd., 2017: Giga LTE Thirty first to Thirty sixth Securitization Specialty Co., Ltd.), and disposed of its trade receivables related to handset sales. The Group also made asset management agreements with each securitization specialty company and in accordance with the agreement the Group will receive asset management fees upon liquidation of securitization specialty company. As at December 31, 2018, the Group is a defendant in 172 lawsuits with the total claimed amount of ￦169,246 million (2017: ￦112,639 million). As at December 31, 2018, litigation provisions of ￦58,776 million for pending lawsuits and unasserted claims are recorded as liabilities for potential loss in the ordinary course of business. The final outcomes of the cases cannot be estimated at the end of the reporting period. In December 2013, Asia Broadcast Satellite Holdings Ltd. (“ABS”) filed a request for meditation to the International Chamber of Commerce (“ICC”) for the compensation of damages from the ownership of the satellite Koreasat-3 (“K3”) and the alleged breach of the entrustment control contract related to K3, which was made and entered into with the Controlling Company and its subsidiary, KT Sat Co., Ltd. In July 2017, the ICC issued a partial ruling that ABS has the ownership of K3, and in March 2018, the final ruling was issued that KT Sat co., Ltd. should pay compensation for damages to ABS. However, in October 2017, the Controlling Company and its subsidiary, KT Sat Co., Ltd. filed a lawsuit seeking the cancellation of the partial ruling in the Federal Court of New York, and filed the other lawsuit in May 2018 seeking the cancellation of the final ruling. The Federal Court of New York dismissed the first case in April and the second case in July 2018. The Controlling Company and its subsidiary, KT Sat Co., Ltd. filed an appeal to the US Court of Appeals for the Second Circuit in August 2018. The outcome of the appeal cannot be reasonably estimated at the end of the reporting period. According to the financial and other covenants included in certain debentures and borrowings, the Group is required to maintain certain financial ratios such as debt-to-equity ratio, use the funds for the designated purpose and report to the creditors periodically. The covenant also contains restriction on provision of additional collateral and disposal of certain assets. At the end of the reporting period, the Group is offering construction completion guarantee agreement to development of Nonsan Hwagidong apartment complex. If a contingent event occurs in between November 24, 2017 and to August 9, 2019, the Group collaterally guarantees the debt of AbleNS 1st Co. up to ￦6,000 million. At the end of the reporting period, the Group participates in Algerie Sidi Abdela new town development consortium (percentage of ownership: 2.5%) and has joint liability with other consortium participants. At the end of the reporting period, contract amount of property and equipment acquisition agreement made but not yet recognized amounts to ￦1,474,009 million (2017: ￦622,059 million).

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- Definition The disclosure of commitments and contingent liabilities. [Refer: Contingent liabilities [member]] + References Reference 1: http://www.xbrl.org/2009/role/commonPracticeRef -Name IAS -Number 1 -IssueDate 2018-01-01 -Paragraph 10 -Subparagraph e -URI http://eifrs.ifrs.org/eifrs/XBRL?type=IAS&num=1&date=2018-03-01&anchor=para_10_e&doctype=Standard -URIDate 2018-03-16 + Details
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