0001193125-20-071039.txt : 20200312 0001193125-20-071039.hdr.sgml : 20200312 20200312085703 ACCESSION NUMBER: 0001193125-20-071039 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20200312 FILED AS OF DATE: 20200312 DATE AS OF CHANGE: 20200312 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KOREA ELECTRIC POWER CORP CENTRAL INDEX KEY: 0000887225 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 133442428 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13372 FILM NUMBER: 20707330 BUSINESS ADDRESS: STREET 1: 55 JEOLLYEOK-RO CITY: NAJU-SI STATE: M5 ZIP: 58322 BUSINESS PHONE: 201 482 8182 MAIL ADDRESS: STREET 1: 400 KELBY STREET STREET 2: 7TH FLOOR CITY: FORT LEE STATE: NJ ZIP: 07024 6-K 1 d869551d6k.htm FORM 6-K Form 6-K

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 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 2020

 

 

KOREA ELECTRIC POWER CORPORATION

(Translation of registrant’s name into English)

 

 

55 Jeollyeok-ro, Naju-si, Jeollanam-do, 58322, 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 the registrant by furnishing the information contained in this form 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-_______.

 

 

 


Korea Electric Power Corporation (“KEPCO”) hereby calls the annual ordinary general meeting of shareholders (“AGM”) and seeks the attendance of its shareholders.

The following is an English translation of the notice given to the shareholders in connection with the AGM:

To: Shareholders

From: JongKap Kim, President & CEO of KEPCO

We hereby call the fiscal year 2019 AGM pursuant to Article 18 of the Articles of Incorporation of Korea Electric Power Corporation as follows and seek your attendance. Pursuant to Article 542-4 of the Commercial Act, this notice shall be in lieu of notices to be given to the shareholders.

 

  1.

Date / Time: March 27, 2020 / 11:00 a.m. (Seoul Time)

 

  2.

Location: 55 Jeollyeok-ro, Naju-si, Jeollanam-do, 58322

Korea Electric Power Corporation

 

  3.

Items to be Reported:

 

   

Audit report

 

   

Management report on KEPCO’s operation

 

   

Operation report on internal accounting control system

 

  4.

Agenda for Shareholder Approval:

 

  1)

Approval of financial statements for the fiscal year 2019

 

  2)

Approval of the ceiling amount of remuneration for directors in 2020

 

  3)

Approval of amendments to the Articles of Incorporation of KEPCO

Details on the proposed agenda for the AGM are attached.

 

*

KEPCO will hold its AGM on March 27, 2020, which is one of what is known in Korea as “Super AGM Days” on account of the fact that many publicly traded companies in Korea hold their AGMs toward the end of March. The Financial Services Commission of Korea (the “FSC”) encourages publicly traded companies in Korea to hold their AGMs on a day other than a Super AGM Day in order to facilitate shareholder attendance at AGMs, and under the FSC guidelines KEPCO is required to publicly disclose why it will hold its AGM on a Super AGM Day. It is necessary for KEPCO to hold this year’s AGM on a Super AGM Day mainly due to scheduling concerns related to the finalization of its consolidated financial statements, external auditor’s audit as well as management’s impending needs to approve major business and operational decisions.


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.

 

By:   /s/ Kim, Byung-in
Name:   Kim, Byung-in
Title:   Vice President

Date: March 12, 2020


Attachment

Agenda 1. Approval of Financial Statements for the Fiscal Year 2019

KEPCO seeks to obtain approval for its consolidated financial statements, separate financial statements and accompanying documents for the fiscal year 2019, pursuant to Article 449 of the Commercial Act, Article 43 of the Act on the Management of Public Institutions and Article 50 of the Articles of Incorporation of KEPCO.

Disclaimer: The financial statements for the fiscal year 2019 as presented below is in accordance with the International Financial Reporting Standard adopted in Korea (K-IFRS), and are subject to shareholders’ approval.


KOREA ELECTRIC POWER CORPORATION

AND ITS SUBSIDIARIES

Consolidated Financial Statements

December 31, 2019


KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Statements of Financial Position

As of December 31, 2019 and 2018

 

In millions of won           2019      2018  

Assets

        

Current assets

        

Cash and cash equivalents

   W        1,810,129        1,358,345  

Current financial assets, net

        1,586,509        2,359,895  

Trade and other receivables, net

        7,701,452        7,793,592  

Inventories, net

        7,050,700        7,188,253  

Income tax refund receivables

        99,718        143,214  

Current non-financial assets

        1,206,377        878,888  

Assets held-for-sale

        28,116        22,881  
     

 

 

    

 

 

 

Total current assets

        19,483,001        19,745,068  
     

 

 

    

 

 

 

Non-current assets

        

Non-current financial assets, net

        2,563,498        2,113,613  

Non-current trade and other receivables, net

        2,002,297        1,819,845  

Property, plant and equipment, net

        164,701,827        152,743,194  

Investment properties, net

        158,580        159,559  

Goodwill

        97,977        2,582  

Intangible assets other than goodwill, net

        1,069,976        1,225,942  

Investments in associates

        4,251,802        4,064,820  

Investments in joint ventures

        1,663,029        1,813,525  

Defined benefit assets, net

        1,047     

Deferred tax assets

        1,437,829        1,233,761  

Non-current non-financial assets

        166,929        327,152  
     

 

 

    

 

 

 

Total non-current assets

        178,114,791        165,503,993  
     

 

 

    

 

 

 

Total Assets

   W        197,597,792        185,249,061  
     

 

 

    

 

 

 

(Continued)


KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Statements of Financial Position, Continued

As of December 31, 2019 and 2018

 

In millions of won           2019     2018  

Liabilities

       

Current liabilities

       

Trade and other payables, net

   W        6,649,402       6,405,395  

Current financial liabilities, net

        8,930,903       7,981,879  

Income tax payables

        358,277       285,420  

Current non-financial liabilities

        5,688,353       5,574,041  

Current provisions

        2,604,721       1,594,798  
     

 

 

   

 

 

 

Total current liabilities

        24,231,656       21,841,533  
     

 

 

   

 

 

 

Non-current liabilities

       

Non-current trade and other payables, net

        6,965,760       2,941,696  

Non-current financial liabilities, net

        59,115,598       53,364,911  

Non-current non-financial liabilities

        8,834,452       8,160,033  

Employee benefits liabilities, net

        1,929,854       1,645,069  

Deferred tax liabilities

        8,564,775       9,617,309  

Non-current provisions

        19,066,048       16,585,748  
     

 

 

   

 

 

 

Total non-current liabilities

        104,476,487       92,314,766  
     

 

 

   

 

 

 

Total Liabilities

   W        128,708,143       114,156,299  
     

 

 

   

 

 

 

Equity

       

Contributed capital

     

Share capital

   W        3,209,820       3,209,820  

Share premium

        843,758       843,758  
     

 

 

   

 

 

 
        4,053,578       4,053,578  
     

 

 

   

 

 

 

Retained earnings

       

Legal reserves

        1,604,910       1,604,910  

Voluntary reserves

        34,785,425       35,906,267  

Unappropriated retained earnings

        12,811,798       14,007,942  
     

 

 

   

 

 

 
        49,202,133       51,519,119  
     

 

 

   

 

 

 

Other components of equity

       

Other capital surplus

        1,226,364       1,234,825  

Accumulated other comprehensive loss

        (280,730     (358,570

Other equity

        13,294,973       13,294,973  
     

 

 

   

 

 

 
        14,240,607       14,171,228  
     

 

 

   

 

 

 

Equity attributable to owners of the controlling company

        67,496,318       69,743,925  

Non-controlling interests

        1,393,331       1,348,837  
     

 

 

   

 

 

 

Total Equity

   W        68,889,649       71,092,762  
     

 

 

   

 

 

 

Total Liabilities and Equity

   W        197,597,792       185,249,061  
     

 

 

   

 

 

 


KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss)

For the years ended December 31, 2019 and 2018

 

In millions of won, except per share information           2019     2018  

Sales

       

Sales of goods

   W        56,894,876       57,897,804  

Sales of services

        408,290       392,867  

Sales of construction services

        1,264,916       1,742,391  

Revenue related to transfer of assets from customers

        604,808       594,548  
     

 

 

   

 

 

 
        59,172,890       60,627,610  
     

 

 

   

 

 

 

Cost of sales

       

Cost of sales of goods

        (55,750,468     (55,976,628

Cost of sales of services

        (1,030,601     (592,224

Cost of sales of construction services

        (998,766     (1,638,869
     

 

 

   

 

 

 
        (57,779,835     (58,207,721
     

 

 

   

 

 

 

Gross profit

        1,393,055       2,419,889  

Selling and administrative expenses

        (2,669,576     (2,627,890
     

 

 

   

 

 

 

Operating Loss

        (1,276,521     (208,001

Other non-operating income

        393,165       375,346  

Other non-operating expense

        (241,913     (231,330

Other gains (losses), net

        (582,258     (621,124

Finance income

        1,009,706       796,870  

Finance expenses

        (2,782,156     (2,470,743

Profit (loss) related to associates, joint ventures and subsidiaries

       

Share in profit of associates and joint ventures

        257,673       473,269  

Gain on disposal of investments in associates and joint ventures

        70,094       5,079  

Gain on disposal of investments in subsidiaries

        —         73  

Share in loss of associates and joint ventures

        (90,853     (110,168

Loss on disposal of investments in associates and joint ventures

        (2     (2,183

Impairment loss on investments in associates and joint ventures

        (22,517     (7,907

Loss on disposal of investments in subsidiaries

        (256     —    
     

 

 

   

 

 

 
        214,139       358,163  
     

 

 

   

 

 

 

Loss before income tax

        (3,265,838     (2,000,819

Income tax benefit (expense)

        1,002,303       826,321  
     

 

 

   

 

 

 

Loss for the period

   W        (2,263,535     (1,174,498

(Continued)


KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Statements of Comprehensive Income (Loss), Continued

For the years ended December 31, 2019 and 2018

 

In millions of won, except per share information         2019     2018  

Other comprehensive income (loss)

     

Items that will not be reclassified subsequently to profit or loss:

     

Remeasurement of defined benefit liability, net of tax

  W       42,315       (108,169

Share in other comprehensive income (loss) of associates and joint ventures, net of tax

      (6,789     (1,153

Net change in fair value of equity investments at fair value through other comprehensive income (loss)

      (11,732     (34,185

Items that are or may be reclassified subsequently to profit or loss:

     

Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax

      19,242       211  

Foreign currency translation of foreign operations, net of tax

      72,816       (20,717

Share in other comprehensive income (loss) of associates and joint ventures, net of tax

      19,344       57,088  
   

 

 

   

 

 

 

Other comprehensive loss, net of tax

      135,196       (106,925
   

 

 

   

 

 

 

Total comprehensive Loss for the period

  W       (2,128,339     (1,281,423
   

 

 

   

 

 

 

Loss attributable to:

     

Owners of the controlling company

  W       (2,345,517     (1,314,567

Non-controlling interests

      81,982       140,069  
   

 

 

   

 

 

 
  W       (2,263,535     (1,174,498
   

 

 

   

 

 

 

Total comprehensive loss attributable to:

     

Owners of the controlling company

  W       (2,239,147     (1,426,477

Non-controlling interests

      110,808       145,054  
   

 

 

   

 

 

 
  W       (2,128,339     (1,281,423
   

 

 

   

 

 

 

Loss per share (in won)

     

Basic and diluted earnings (loss) per share

  W       (3,654     (2,048


KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2019 and 2018

 

In millions of won           Equity attributable to owners of the controlling company     Non-
controlling
interests
       
            Contributed
capital
     Retained
earnings
    Other
components
of equity
    Subtotal     Total
equity
 

Balance at January 1, 2018

     W        4,053,578        53,370,558       14,257,309       71,681,445       1,283,196       72,964,641  

Effect of change in accounting policy

        —          71,928       (76,851     (4,923     —         (4,923
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Adjusted balance at January 1, 2018

        4,053,578        53,442,486       14,180,458       71,676,522       1,283,196       72,959,718  

Total comprehensive income (loss) for the period

                

Profit (loss) for the period

        —          (1,314,567     —         (1,314,567     140,069       (1,174,498

Items that will not be reclassified subsequently to profit or loss:

                

Remeasurement of defined benefit liability, net of tax

        —          (100,495     —         (100,495     (7,674     (108,169

Share in other comprehensive income of associates and joint ventures, net of tax

        —          (1,153     —         (1,153     —         (1,153

Net change in fair value of financial assets at fair value through other comprehensive income

        —          —         (34,125     (34,125     (60     (34,185

Items that are or may be reclassified subsequently to profit or loss:

                

Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax

        —          —         (1,140     (1,140     1,351       211  

Foreign currency translation of foreign operations, net of tax

        —          —         (32,086     (32,086     11,369       (20,717

Share in other comprehensive income of associates and joint ventures, net of tax

        —          —         57,089       57,089       (1     57,088  

Transactions with owners of the Group, recognized directly in equity

                

Dividends paid

        —          (507,152     —         (507,152     (92,741     (599,893

Issuance of shares of capital by subsidiaries and others

        —          —         1,032       1,032       17,183       18,215  

Changes in consolidation scope

        —          —         —         —         9,530       9,530  

Dividends paid (hybrid bond)

        —          —         —         —         (13,385     (13,385
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2018

     W        4,053,578        51,519,119       14,171,228       69,743,925       1,348,837       71,092,762  
     

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

(Continued)


KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Statements of Changes in Equity, Continued

For the years ended December 31, 2019 and 2018

 

In millions of won          Equity attributable to owners of the controlling company              
           Contributed
capital
     Retained
earnings
    Other
components
of equity
    Subtotal     Non-
controlling
interests
    Total
equity
 

Balance at January 1, 2019

   W       4,053,578        51,519,119       14,171,228       69,743,925       1,348,837       71,092,762  

Total comprehensive income (loss) for the period

               

Net profit (loss) for the period

       —          (2,345,517     —         (2,345,517     81,982       (2,263,535

Items that will not be reclassified subsequently to profit or loss:

               

Remeasurement of defined benefit liability, net of tax

       —          36,160       —         36,160       6,155       42,315  

Share in other comprehensive loss of associates and joint ventures, net of tax

       —          (6,789     —         (6,789     —         (6,789

Net change in fair value of financial assets at fair value through other comprehensive loss

       —          —         (11,732     (11,732     —         (11,732

Others

       —          (840     840       —         —         —    

Items that are or may be reclassified subsequently to profit or loss:

               

Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax

       —          —         14,041       14,041       5,201       19,242  

Foreign currency translation of foreign operations, net of tax

       —          —         55,347       55,347       17,469       72,816  

Share in other comprehensive income of associates and joint ventures, net of tax

       —          —         19,343       19,343       1       19,344  

Transactions with owners of the Company, recognized directly in equity

               

Dividends paid

       —          —         —         —         (99,255     (99,255

Issuance of shares of capital by subsidiaries and others

       —          —         —         —         21,071       21,071  

Transactions between consolidated entities

       —          —         (8,460     (8,460     323       (8,137

Changes in consolidation scope

       —          —         —         —         24,932       24,932  

Dividends paid (hybrid bond)

       —          —         —         —         (13,385     (13,385
    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2019

   W       4,053,578        49,202,133       14,240,607       67,496,318       1,393,331       68,889,649  
    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 


KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2019 and 2018

 

In millions of won         2019     2018  

Cash flows from operating activities

       

Loss for the period

  

W

     (2,263,535     (1,174,498
     

 

 

   

 

 

 

Adjustments for:

       

Income tax expense (benefit)

        (1,002,303     (826,321

Depreciation

        10,971,825       9,905,856  

Amortization

        156,915       118,938  

Employee benefit expense

        712,460       360,575  

Bad debt expense

        16,629       57,468  

Interest expense

        2,046,811       1,868,458  

Loss on sale of financial assets

        2,106       1  

Loss on disposal of property, plant and equipment

        72,508       60,704  

Loss on abandonment of property, plant, and equipment

        364,233       481,176  

Loss on impairment of property, plant, and equipment

        50,034       710,162  

Loss on impairment of intangible assets

        513,609       8,112  

Loss on disposal of intangible assets

        827       43  

Increase to provisions

        2,317,972       1,056,994  

Loss (gain) on foreign currency translation, net

        370,309       243,378  

Gain on valuation of financial assets at fair value through profit or loss

        (5,575     (8,495

Loss on valuation of financial assets at fair value through profit or loss

        4,513       6,616  

Valuation and transaction loss (gain) on derivative instruments, net

        (403,765     (300,500

Share in loss (income) of associates and joint ventures, net

        (166,820     (363,101

Gain on sale of financial assets

        (3,866     (1,838

Gain on disposal of property, plant and equipment

        (43,784     (98,077

Gain on disposal of intangible assets

        (206     (12

Gain on disposal of associates and joint ventures

        (70,094     (5,079

Loss on disposal of associates and joint ventures

        2       2,183  

Impairment loss on associates and joint ventures

        22,517       7,907  

Gain on disposal of subsidiaries

        —         (72

Loss on disposal of subsidiaries

        256       —    

Interest income

        (268,118     (223,767

Dividend income

        (13,838     (12,777

Others, net

        64,535       81,317  
     

 

 

   

 

 

 
        15,709,692       13,129,849  
     

 

 

   

 

 

 

Changes in:

       

Trade receivables

        95,345       246,755  

Non-trade receivables

        64,027       154,580  

Accrued income

        83,589       (484,718

Other receivables

        (116,583     (61,961

Other current assets

        (271,986     (148,509

Inventories

        (980,216     (1,771,550

Other non-current assets

        (575,675     (54,148

Trade payables

        (546,159     478,744  

Non-trade payables

        281,904       (292,912

Accrued expenses

        (486,547     (361,204

Other current liabilities

        418,668       250,112  

Other non-current liabilities

        890,976       287,488  

Investments in associates and joint ventures (dividends received)

        215,612       175,175  

Provisions

        (1,513,860     (1,132,969

Payments of employee benefit obligations

        (65,242     (89,253

Plan assets

        (348,386     (330,064
     

 

 

   

 

 

 
   W      (2,854,533     (3,134,434
     

 

 

   

 

 

 

(Continued)


KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Financial Statements, Continued

December 31, 2019

 

In millions of won           2019     2018  

Cash generated from operating activities

   W        10,516,178       8,820,917  

Dividends received (financial assets at fair value through other comprehensive income)

        24,255       11,182  

Interest paid

        (2,027,850     (1,895,898

Interest received

        186,122       194,221  

Income taxes paid

        (295,430     (450,290
     

 

 

   

 

 

 

Net cash from operating activities

        8,478,721       6,680,132  
     

 

 

   

 

 

 

Cash flows from investing activities

       

Proceeds from disposals of associates and joint ventures

        —         1,617  

Acquisition of associates and joint ventures

        (107,924     (319,425

Proceeds from disposals of property, plant and equipment

        293,725       234,138  

Acquisition of property, plant and equipment

        (14,000,359     (12,266,870

Proceeds from disposals of intangible assets

        6,807       13  

Acquisition of intangible assets

        (229,426     (110,587

Proceeds from disposals of financial assets

        2,783,474       2,419,259  

Acquisition of financial assets

        (2,165,342     (2,841,651

Increase in loans

        (324,407     (188,675

Collection of loans

        246,863       100,010  

Increase in deposits

        (280,637     (299,564

Decrease in deposits

        275,314       259,930  

Proceeds from disposals of assets held-for-sale

        30,662       18,716  

Receipt of government grants

        21,705       30,416  

Cash outflow from merger

        (154,311     —    

Net cash inflow (outflow) from changes in consolidation scope

        (2,917     2,141  

Other cash inflow (outflow) from investing activities, net

        (156,120     (53,769
     

 

 

   

 

 

 

Net cash used in investing activities

        (13,762,893     (13,014,301
     

 

 

   

 

 

 

Cash flows from financing activities

       

Proceeds from (repayment of) short-term borrowings, net

        188,957       (183,660

Proceeds from long-term borrowings and debt securities

        13,221,407       14,251,586  

Repayment of long-term borrowings and debt securities

        (7,068,290     (8,095,590

Payment of finance lease liabilities

        (575,198     (134,454

Settlement of derivative instruments, net

        102,146       60,907  

Change in non-controlling interest

        17,365       20,113  

Dividends paid (hybrid bond)

        (13,385     (17,658

Dividends paid

        (99,356     (599,391

Other cash outflow from financing activities, net

        —         (175
     

 

 

   

 

 

 

Net cash from financing activities

        5,773,646       5,301,678  
     

 

 

   

 

 

 

Net decrease in cash and cash equivalents before effect of exchange rate fluctuations

        489,474       (1,032,491

Effect of exchange rate fluctuations on cash held

        (37,690     21,097  
     

 

 

   

 

 

 

Net decrease in cash and cash equivalents

        451,784       (1,011,394

Cash and cash equivalents at January 1

        1,358,345       2,369,739  
     

 

 

   

 

 

 

Cash and cash equivalents at December 31

   W        1,810,129       1,358,345  
     

 

 

   

 

 

 


Agenda 2. Approval of the ceiling amount of remuneration for directors

KEPCO seeks to obtain approval regarding the ceiling amount of remuneration for directors for the fiscal year 2020, pursuant to Article 388 of the Commercial Act and Article 35 of the Articles of Incorporation of KEPCO.

 

   

Proposed aggregate ceiling on remuneration for directors:

 

   

2,247,869 thousand won in fiscal year 2020 (total number of directors: 15; number of non-standing directors: 8)

 

   

2,174,564 thousand won in fiscal year 2019 (total number of directors: 15; number of non-standing directors: 8)

 

   

The actual remuneration for directors in the fiscal year 2019 was 1,586,595 thousand won.

 

   

We proposed to increase the maximum aggregate amount of remuneration for directors in 2020 by 3.37% compared to 2019 as a result of (i) the notification by the Government to increase the remuneration for directors of government controlled entities by 2.8% and (ii) the increased performance-based compensation by 16,381 thousand won as a result of the increased remuneration for directors and (iii) the increased severance payments due to the increase in the average incumbency of our directors from 20 months to 25 months.


Agenda 3. Approval of amendments to the Articles of Incorporation of KEPCO (the “Articles of Incorporation”)

 

  1)

KEPCO proposes to amend the Articles of Incorporation pursuant to Article 433 of the Commercial Act and Article 4 of the Articles of Incorporation.

 

  2)

KEPCO proposes to amend the Articles of Incorporation in light of the enactment and enforcement of the Act on Electronic Registration of Stocks, Bonds, etc. (the “Electronic Registration Act”) and to comply with the Act on the Management of Public Institutions.

 

   

The Electronic Registration Act governs the rules regarding the registration of rights represented by securities certificates via electronic means without requiring physical securities certificates.

 

   

KEPCO proposes to make the following amendments to the Articles of Incorporation:

 

   

Delete references to specific types of share certificates issued and introduce a new clause providing for the electrionic registration of rights that would be presented by share certificates and preemptive right certificates (Article 7, Section 2 of the Articles of Incorporation).

 

   

Remove a clause related to issuance of share certificates that is no longer applicable due to the electronic registration requirements under the Electronic Registration Act (Article 9).

 

   

Revise to reflect the fact that under the Electronic Registration Act, an appointment of transfer agent would in fact be required (Article 13).

 

   

Remove a clause related to the reporting of addresses, names and seals of the shareholders to the transfer agent, as this is no longer applicable under the Electronic Registration Act (Article 14).

 

   

Introduce a new clause providing for the electronic registration of rights that would be represented by bond certificates and subscription warrant certificates (Article 17-4).

 

   

Delete the references to specific articles in the Act on the Management of Public Institution (Article 26-2).

 

   

The table below compares the current provisions in the Articles of Incorporation with the proposed amendments.

 

Current provision

  

Proposed amendment

  

Rationale

Article 7 (Par Value and Types of Shares and Denominations of Share Certificates)

(2) Share certificates shall be issued in eight (8) denominations of one (1), five (5), ten (10), fifty (50), one-hundred (100), five-hundred (500), one-thousand (1,000) and ten-thousand (10,000) shares.

  

Article 7 (Par Value and Electronic Registration of Rights that would be Represented by Share Certificates and Preemptive Rights Certificates)

(2) The Corporation shall electronically register rights that would be represented by its share certificates and preemptive right certificates on the electronic registry maintained by the electronic registrar, in lieu of issuing share certificates and preemptive right certificates.

   To delete types of share certificates issued and to introduce a new clause providing for the electronic registration of rights that would be presented by share certificates and preemptive right certificates


Article 9 (Non-Issuance of Share Certificates)

Upon request from the shareholders, the Corporation shall not issue share certificates for all or a portion of the shares.

  

Article 9 (Deleted)

(Deleted)

   Share certificates shall not be issued in accordance with the Electronic Registration Act.

Article 13 (Changes in Entries in the Register of Shareholders)

(1) The Corporation may appoint a transfer agent.

  

Article 13 (Changes in Entries in the Register of Shareholders)

(1) The Corporation shall appoint a transfer agent.

   Appointment of transfer agent is de facto mandatory under the Electronic Registration Act.

Article 14 (Report of Addresses, Names and Seals of Shareholders)

(1) Shareholders and registered pledgees shall report to the transfer agent mentioned in Article 13 their respective names, addresses and seals.

(2) Shareholders and registered pledgees who reside in foreign countries shall report their respective addresses to which and agents to whom notices may be given in Korea.

(3) Any changes in the items stated in Paragraphs (1) and (2) shall also be reported.

  

Article 14 (Deleted)

(Deleted)

   To remove requirement to report addresses, names and seals of shareholders to the transfer agent, as such information is not required to be reported if the rights that would be presented by share certificates are electronically registered.
(New Provision)   

Article 17-4 (Electronic Registration of Rights that would be Represented by Bond Certificates and Subscription Warrant Certificates)

The Corporation shall electronically register rights that would be represented by bond certificates and subscription warrant certificates on the electronic registry maintained by the electronic registrar, in lieu of issuing bond certificates and subscription warrant certificates.

   To introduce a new clause for the electronic registration of rights that would be represented by bond certificates and subscription warrant certificates.

Article 26-2 (Appointment of Officers)

(6) The President shall not be dismissed from office unless the person who appointed the President dismissed the President pursuant to Article 22 Paragraph (1), Article 35 Paragraph (3), and Article 48 Paragraph (6) of the Public Agencies Management Act.

  

Article 26-2 (Appointment of Officers, etc.)

(6) The President shall not be dismissed from office unless the authorized person to appoint the President dismisses the President pursuant to Article 22 Paragraph (1), Article 35 Paragraph (3), and Article 48 Paragraph (6) of the Public Agencies Management Act (a.k.a. Act on the Management of Public Institutions).

  

To delete the reference to specific articles of the Act on the Management of Public Institution

(to avoid any discrepancy with, and in preparation of any future amendment to, the Act on the Management of Public Institutions)

All amendments to the Articles of Incorporation shall be effective on and from the date in which the amendments have been promulgated.