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Commitments and Contingencies | 12 Months Ended
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Dec. 31, 2019
Text block [abstract] |
Commitments and Contingencies |
20. | Commitments and Contingencies
As at December 31, 2019, 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 |  |  |  | 1,637,000 |  |  |  | — |
Inter-Korean Cooperation Fund |  | Export-Import Bank of Korea |  |  | KRW |  |  |  | 37,700 |  |  |  | 3,454 |
Collateralized loan on electronic accounts receivable-trade |  | Shinhan Bank and others |  |  | KRW |  |  |  | 467,560 |  |  |  | 29,102 |
Plus electronic notes payable |  | Industrial Bank of Korea |  |  | KRW |  |  |  | 50,000 |  |  |  | 3,138 |
Loans for working capital |  | Korea Development Bank and others |  |  | KRW |  |  |  | 254,193 |  |  |  | 154,693 |
Facility loans |  | Shinhan Bank and others |  |  | KRW |  |  |  | 102,122 |  |  |  | 79 |
|  | Kookmin Bank and others |  |  | USD |  |  |  | 212,000 |  |  |  | 87,940 |
Facility loans on ships |  | Shinhan Bank |  |  | USD |  |  |  | 3,000 |  |  |  | 3,000 |
Derivatives transaction limit |  | Korea Development Bank |  |  | KRW |  |  |  | 100,000 |  |  |  | 18,458 |
Total |  |  |  |  | KRW |  |  |  | 2,648,575 |  |  |  | 208,924 |
|  |  |  |  | USD |  |  |  | 215,000 |  |  |  | 90,940 |
As at December 31, 2019, 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 |  |  |  | 166,315 |
|  |  |  |  | USD |  |  |  | 1,200 |
Guarantee for import letters of credit |  | Industrial Bank of Korea and others |  |  | USD |  |  |  | 5,980 |
Guarantee for payment in foreign currency |  | KEB Hana and others |  |  | USD |  |  |  | 59,304 |
|  |  |  |  | PLN | 1 |  |  | 13,751 |
Comprehensive credit line |  | KEB Hana Bank and others |  |  | KRW |  |  |  | 40,000 |
|  | KEB Hana Bank |  |  | USD |  |  |  | 10,000 |
Bid guarantee |  | KEB Hana Bank |  |  | USD |  |  |  | 400 |
Bid guarantee |  |  |  |  | KRW |  |  |  | 42,581 |
Performance guarantee /Warranty Guarantee |  | Korea Software Financial Cooperative and others |  |  | KRW |  |  |  | 460,871 |
Guarantee for advances received/others |  |  |  |  | KRW |  |  |  | 218,267 |
Warranty guarantee |  |  |  |  | KRW |  |  |  | 562 |
Guarantees for licensing |  |  |  |  | KRW |  |  |  | 6,578 |
Guarantee for deposits |  | Seoul Guarantee Insurance |  |  | KRW |  |  |  | 3,586 |
Merchant business guarantee insurance |  |  |  |  | KRW |  |  |  | 169 |
Total |  |  |  |  | KRW |  |  |  | 938,929 |
|  |  |  |  | USD |  |  |  | 76,884 |
|  |  |  |  | PLN | 1 |  |  | 13,751 |
| 1 | Polish Zloty.
As at December 31, 2019, 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 |  |  |  | 4,829 |  |  |  | 4,137 |  |  |  | Nov 10, 2017 ~Oct. 31, 2020 |
KT Estate Inc. |  | Daegu Beomeo-Crossroads SeohanIDaum Buyers |  | Shinhan Bank |  |  | KRW |  |  |  | 8,028 |  |  |  | 6,985 |  |  |  | Oct 29, 2017 ~Nov. 30, 2020 |
KT Hitel Co., Ltd. |  | Shinhan Bank |  | Cash payers |  |  | KRW |  |  |  | 683 |  |  |  | — |  |  |  | Apr 19, 2019 ~Apr 17, 2020 |
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, 2019, the Controlling Company and KT Sat Co., Ltd. are jointly and severally liable for reimbursement of ￦ 2,682 million. For the year ended December 31, 2019, the Group made agreements with the Securitization Specialty Companies (2019: Giga LTE Forty third to Forty eighth Securitization Specialty Co., Ltd., 2018: Giga LTE Thirty seventh to Forty second 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, 2019, the Group is a defendant in 190 lawsuits with the total claimed amount of ￦ 214,877 million (2018: ￦ 169,246 million). As at December 31, 2019, litigation provisions of ￦ 62,241 million (2018: ￦ 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 as at December 31, 2019. 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. At the end of reporting period, the Controlling Company and its subsidiary, KT Sat Co., Ltd., requested to appeal to the U.S. Supreme Court in December 2019 in response to the second U.S. Court of Appeals, but it was finally closed in February 2020 with a dismissal of appeal decision. 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. As at December 31, 2019, the Group participates in Algerie Sidi Abdela new town development consortium (percentage of ownership: 2.5%) and has joint liability with other consortium participants. As at December 31, 2019, contract amount of property and equipment acquisition agreement made but not yet recognized amounts to ￦ 851,798 million (2018: ￦ 1,474,009 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 2019-01-01 -Paragraph 10 -Subparagraph e -URI http://eifrs.ifrs.org/eifrs/xifrs-link?type=IAS&num=1&code=ifrs-tx-2019-en-r&anchor=para_10_e&doctype=Standard -URIDate 2019-03-27 + Details
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