Corporate Governance Report (Form 6-K)

Corporate Governance Report

KEPCO has prepared this report in accordance with Article 24-2 of the Enforcement Rules of KOSPI Market Disclosure Regulation of Korea Exchange in order to provide investors with further information to help them better understand KEPCO's corporate governance system.

This is a summary in English of the Corporate Governance Report originally prepared in Korean. In the translation process, some parts of the report have been reformatted, rearranged or summarized for the convenience of readers. Nonmaterial or previously disclosed information may also have been omitted or abridged.

Unless expressly stated otherwise, this report reflects KEPCO's corporate governance structure as of December 31, 2020.

1. Corporate Governance Policy

(1) General Meeting of Shareholders

KEPCO regards enhancing shareholder value and protecting shareholder rights as its highest priorities, and, since becoming a public company, has continuously made efforts to uphold a system of corporate governance that reflects its corporate ethos. In that connection, KEPCO plans to further promote the interest of its shareholders through responsible management based on trust and communication and by embedding in its operations a focus on serving the shareholders.

(2) Board of Directors

In order to effect transparency in its corporate governance, anyone interested in KEPCO's corporate governance practice can access, at its corporate website, Articles of Incorporation of KEPCO, Regulations Concerning the Board of Directors, Regulations Concerning Operations of the Audit Committee and KEPCO's other internal regulations related to its corporate governance.

To ensure the transparency of its corporate governance through an independent decision-making process, KEPCO operates a majority of directors as non-standing directors. The Board of Directors is composed of seven standing directors including the CEO and eight non-standing directors. The chairperson of the Board of Directors is appointed upon among non-standing directors for fair gathering of opinions and suggestions on the overall management.

Furthermore, non-standing directors are elected from professionals with basis of finance, accounting, labor management, shared growth and energy industries, so as to fulfill ones' role of consulting and suggesting about the agenda of board meetings.

(3) Audit

The Audit Committee inspects the accounting and management issues, and also evaluates the operation of Internal Control over Financial Reporting. Moreover, it supervises the performance of directors and management to let them make rational business decisions.

The Audit Committee consists of three directors, two of who are required to be non-standing directors. The chairperson of the committee is required to be a non-standing director. One member of Audit committee is a standing director and is appointed with the recommendation of Director Nomination Committee and by the resolution of general meeting of Shareholders. Other members of the Audit Committee who are non-standing directors are appointed from among non-standing directors by the resolution of the general meeting of Shareholders.

The audit committee secures objectivity on conducting the audit, working separately from the directors and the management. If it is necessary to carry out its duties, the committee may request any related executive or employee to be present at the committee, to submit reports and to state one's opinion.

(1) Organization of the Board of Directors

The Board of Directors is composed of seven standing directors (including the CEO) and eight non-standing directors. Non-standing directors are elected from candidates with ample industrial or professional knowledge and experience so as to respond flexibly and expertly to the changing business environment. The chairperson of the Board of Directors is appointed from among non-standing directors for fair and transparent operation of the Board of Directors.

Directors are appointed in accordance with the Act on the Management of Public Institutions and the Articles of Incorporation of KEPCO. The CEO is appointed by the President of the Republic of Korea upon the motion of the Ministry of Trade, Industry and Energy following the nomination by the Director Nomination Committee, the review and resolution of the Committee for Management of Public Institutions pursuant to the Act on the Management of Public Institutions and an approval at the general meeting of shareholders. Standing directors other than the CEO or the standing director who concurrently serves as a member of the Audit Committee are appointed by the CEO with the approval at the general meeting of shareholders. The standing director who concurrently serves as a member of the Audit Committee is appointed through the same appointment process applicable to the CEO, except that the motion for appointment is made by the Minister of the Ministry of Economy and Finance instead of the Ministry of Trade, Industry and Energy. Non-standing directors must be appointed by the Minister of the Ministry of Economy and Finance following the review and resolution of the Committee for Management of Public Institutions from a pool of candidates recommended by the Director Nomination Committee. The term of the CEO is three years, while that of directors other than the CEO is two years.

(2) Subcommittees in the Board of Directors

Under the Board of Directors, there are three subcommittees, namely, Audit Committee, Director Nomination Committee and ESG Committee. In accordance with the Act on the Management of Public Institutions, 'market-type public corporations' such as KEPCO must have an Audit Committee and a Director Nomination Committee. In December 2020, KEPCO additionally established an Environment, Social and Governance ('ESG') Committee in our Board of Directors to reinforce ESG-based management system and to ensure continuous performance in this area.

(3) Diversity and Expertise of the Board of Directors

In order to enhance the expertise of its Board of Directors, KEPCO requires that personal expertise be considered when screening out director candidates and has actively recruited experts in the power industry. In addition, following the appointments, KEPCO strives to nurture and strengthen the expertise of its directors by arranging site visits and on-ground trainings at power facilities, domestic and abroad, and regularly provides them with updated information on major trends in the power industry and managerial issues.

To ensure a balanced and diverse membership for its Board of Directors, KEPCO relies on a wide range of institutions which recommend director candidates. For example, KEPCO encourages the recruitment of female directors by having the Nomination Committee to constantly monitor and seek female director candidates. Also, KEPCO seeks to maintain a balanced view within its Board of Directors by appointing directors with profound knowledge and expertise in various fields including law, finance, academics and labor relations.

(4) Independence of the Board of Directors

KEPCO ensures the independence of its Board of Directors so that the diretors can carry out their duties of 'checks and balances' in a responsible manner. KEPCO also strictly scrutinizes whether a non-standing director candidate has any related party transaction that would disqualify such candidate from his or her directorship under the Korean Commercial Act. Moreover, KEPCO has reinforced the decision-making power of its non-standing directors by requiring that a majority of the board be appointed as non-standing directors and the chairperson of the board be appointed from among the non-standing directors.

II. Shareholders

1. Shareholders' Rights

(1) General Meeting of Shareholders

KEPCO makes a public disclosure immediately after the Board of Directors resolves to hold a general meeting of shareholders and announces the time, place, agenda and other details of the meeting at least two weeks before the date of meeting.

However, the notice for the shareholders who have shares under 1% of total issued shares is announced on the Data Analysis, Retrieval and Transfer System ('DART') of the Financial Supervisory Service and Korea Investor's Network for Disclosure System ('KIND') of the Korea Exchange. KEPCO will continuously make effort to inform shareholders of the general meeting with sufficient time in advance.

Annual general meetings are held within three months after the end of each business year, and extraordinary general meetings are held at such other times as are deemed necessary.

KEPCO's general meetings of shareholders in the period from January 2020 to May 2021 were held as follows;

(2) Voting at the General Meeting of Shareholders

A list of the agenda voted at the general meetings of shareholders in the period from January 2020 to May 2021 is provided below.

(3) Proposal Right of Shareholders

KEPCO assures the proposal right of shareholders in accordance with requirements provided on the Korean Commercial Act. When a certain agenda is proposed and unless it is against the laws or the Articles of Incorporation of KEPCO, it shall be submitted to the general meeting of shareholders after the resolution by the Board of Directors.

Every shareholder who attends the general meeting of shareholders has the right to inquire and request for explanation on the agenda, unless he or she obviously intends to obstruct the proceedings of the meeting.

Shareholders may make a proposal for the general meeting of shareholders, but any shareholder proposal has not been submitted to the meetings held by May 2021. KEPCO will consistently strive to guarantee the shareholders' proposal right in accordance with the relevant laws, including establishing internal standards and procedures and providing such information through KEPCO's corporate website.

(4) Shareholder Return Policy

In accordance with provisions in the Korean Commercial Act, Articles of Incorporation of KEPCO and the KEPCO Act, KEPCO is entitled to pay out dividends. KEPCO determines dividends considering the future investment plan, cash flow and financial structure to enhance shareholder value and increase shareholder return.

KEPCO's dividend payments are finally determined at the annual general meeting of shareholders through resolutions by the Board of Directors and announced immediately and officially through the electronic disclosure system (DART). KEPCO paid Won 1,216 per share as the cash dividend for the fiscal year 2020.

(5) Dividend

Details of KEPCO's dividend payments in the past three years are as follows.

KEPCO is authorized to pay preferential dividends on shares held by holders other than the Government. However, KEPCO has not done so in the past three years as there has been no such proposal from the Government, its majority shareholder. There was no interim dividend paid in the past three years.

2. Fair and Equitable Treatment of Shareholders

(1) Issued Shares and Disclosure of Company Information

Currently, KEPCO's authorized share capital is as follows.

Issued common shares are all registered common shares, and each share shall have one voting right. The voting rights of the shareholders who has shares in excess of three percent of the total number of issued shares are limited to three percent when it comes to the agenda of election of members of the audit committee, under the Korean Commercial Act.

KEPCO makes its company information publicly through its corporate website and electronic disclosure systems in order to provide the information in a fair and equitable way and in a timely manner.

KEPCO holds IR meetings in relation to quarterly earnings releases in February, May, August and November. Moreover, following the relocation of its headquarters to Naju city, KEPCO holds weekly IR meetings in Seoul and conference calls with institutional investors. KEPCO announces its earnings release schedule through the electronic disclosure system (DART) of Korea Exchange as well as through public filings on the SEC website; KEPCO also posts its IR schedule on its corporate website.

IR Presentations are available on its corporate website, both in Korean and English. (http://home.kepco.co.kr/kepco/EN)

Since listing its American Depositary Receipts on the New York Stock Exchange in October 1994, KEPCO makes English disclosures available on the SEC website through the Electronic Data Gathering, Analysis and Retrieval ('EDGAR') system. The English filings KEPCO makes to the SEC is available by accessing http://www.sec.gov, clicking the 'Company Filings' button and entering 'Korea Electric Power Corp' in the 'Company Name' search field.

(2) Related Party Transactions and the Internal Monitoring System

KEPCO has put in effect several internal regulations, including the Code of Conduct and Guidelines for Practice for its executives and employees, so as to prevent related party transactions and self-dealings that promote private interests among its executives and employees. Also, KEPCO has instituted an internal monitoring system to identify and appropriately disclose related party transactions between KEPCO and its related parties.

Under the Code of Conduct, employees whose conduct harms the proper performance of his or her duties become subject to disciplinary actions. The Code of Conduct also prohibits employees from engaging in transactions based on information obtained in the course of employment.

In addition, under the Regulations Concerning the Public Disclosure, its executives and employees are prohibited from using any material nonpublic information related to its business in trading of securities or any other transaction.

III. Board of Directors

1. Functions

(1) Management Decision

The Board of Directors, which is established based on the Korean Commercial Act, makes reviews and resolutions on the matters as stipulated in the relevant laws and the Articles of Incorporation of KEPCO, including matters concerning its finance, mid- and long-term strategy and business plans.

In accordance with the Regulations Concerning the Board of Directors, the Board of Directors may delegate to the CEO to decide on matters that are subject to BOD review and resolutions to the extent that such matters are deemed to be insignificant. In addition, under the Regulations, the CEO may act on urgent matters first and then promptly request for ratification by the Board of Directors to the extent that time did not permit holding a BOD meeting or the BOD meeting otherwise could not be held. However, if the Board of Directors decides not to ratify the emergency measures undertaken by the CEO, such measures will have no further force and effect.

Matters subject to resolutions by and reporting to the Board of Directors are as follows.

a) Matters subject to review and resolutions by the Board of Directors

b) Matters subject to reporting to the Board of Directors

(2) Appointment of CEO

The President of KEPCO, who concurrently serves as a Chief Executive Officer, is appointed in accordance with the Guidelines for Personnel Management of Public Institutions and Regulations Concerning Operations of the Director Nomination Committee. The CEO is appointed by the President of the Republic of Korea upon the motion of the Ministry of Trade, Industry and Energy following the nomination by the Director Nomination Committee, the review and resolution of the Committee for Management of Public Institutions (established under the Ministry of Economy and Finance) pursuant to the Act on the Management of Public Institutions and an approval at the general meeting of shareholders.

The CEO Nomination Committee consists of five to fifteen members, and the chairperson of the committee must be selected from among non-standing directors. The CEO Nomination Committee recommends eligible candidates that meet the criteria stipulated in the Guidelines for Personnel Management of Public Institutions and Regulations Concerning Operations of the Director Nomination Committee. The eligibility criteria for a CEO candidate are as follows:

The term of President and CEO is three years in accordance with the Act on the Management of Public Institutions. However, it can be renewed by an increment of one year based on the evaluation.

In the event that the President and CEO cannot perform his or her duties due to an unavoidable reason, one of the standing directors shall act for the President and CEO in such order of priority as shall be specified in the Articles of Incorporation of KEPCO. However, if none of the standing directors is able to serve as the President and CEO, the senior non-standing director, the most senior non-standing director (based on the date of appointment if the senior non-standing director is unable to serve) and the eldest non-standing director (based on age if there are more than one such most senior non-standing director) shall serve as the President and CEO, in that order of priority.

(3) Internal Control over Financial Reporting

The Audit Committee takes an important role in the risk management. The Audit Committee sets internal audit plans and conducts an audit on KEPCO's business and accounting. The Audit Committee regularly receives reports from the external auditor on the audit results, auditing activities and the soundness of financial activities, and provides its opinion.

KEPCO also has put in effect the Regulations Concerning Public Disclosure to make sure that all information be disclosed in a fair, accurate and timely manner. The Corporate Senior Executive Vice President & Chief Financial (Strategy) Officer is responsible for establishing and maintaining disclosure management system and the Finance & Accounting Settlement Team is gathering and reviewing the information to be disclosed from business operating department, periodically and frequently as needed.

Pursuant to the Act on External Audit of Stock Companies, etc., KEPCO made Regulations Concerning Internal Control over Financial Reporting and established the internal accounting control system. In order to enhance the reliability of financial information and share the importance of Internal Control over Financial Reporting companywide, KEPCO defines control activities in detail and conducts an annual evaluation of the effectiveness of its Internal Control over Financial Reporting.

The President and CEO of KEPCO, who is responsible for the company's Internal Control over Financial Reporting, examines the effectiveness of the company's Internal Control over Financial Reporting after the end of every fiscal year and reports the results to the general meeting of shareholders, the Board of Directors, and the Audit Committee. The Audit Committee evaluates the operation of Internal Control over Financial Reporting and reports the results to the Board of Directors.

KEPCO is in compliance with the related laws and Regulation concerning Internal Control over Financial Reporting, as it amends internal regulations in accordance with any amendment to the Act on the External Audit of Stock Companies, etc.

2. Composition of the Board of Directors

(1) Current state of Composition

The organizational chart of the board of directors is as follows;

The Board of Directors as of May 31, 2021 is listed as follows;

Under the Board of Directors, there are three subcommittees, namely, Audit Committee, Director Nomination Committee and ESG Committee as follows;

Pursuant to the Act on the Management of Public Institutions and Articles of Incorporation of KEPCO, KEPCO's Board of Directors consists of not more than 15 directors. Of such directors, no more than seven can be standing directors (including the CEO), and no more than eight can be non-standing directors. Since the standing directors (including the CEO) cannot constitute the majority of the Board of Directors, the board can perform independently from the management and the dominant shareholder.

Under Regulations Concerning the Board of Directors and Act on the Management of Public Institutions, the senior non-standing director is appointed as the chairperson of the board. However, in circumstance where the chairperson cannot serve his or her duties inevitably, the most senior non-standing director (based on the date of appointment) or the eldest non-standing director (based on age if there are more than one such most senior non-standing director) shall serve as the chairperson of the Board of Directors.

(2) Director Eligibility Requirements and Appointment Process

KEPCO's directors satisfy all statutory eligibility requirements, including under the Act on the Management of Public Institutions, the Public Service Ethics Act and the Korean Commercial Act. In addition, following appointment of directors, KEPCO periodically monitors whether the directors are compliant with the eligibility criteria, including in relation to the eligibility criteria applicable to non-standing directors under the Korean Commercial Act.

A. Eligibility

KEPCO considers the qualification requirements under the Guidelines for Personnel Management of Public Institutions and selects qualified candidates with practical abilities and competence. The qualifications required of directors include knowledge and experience in the relevant field, leadership and organizational management capabilities, ethical behavior based on integrity and morality and other qualifications required in light of KEPCO's special characteristics and environment.

B. Director Appointment Process

Pursuant to the Act on the Management of Public Institutions, the KEPCO Act and the Articles of Incorporation of KEPCO, standing directors other than the CEO or the standing director who concurrently serves as a member of the Audit Committee are appointed by the CEO with the approval at the general meeting of shareholders.

In the case of standing directors other than the CEO or those who concurrently serve as members of the audit committee, the appointment process does not involve the Director Nomination Committee in accordance with the Act on the Management of Public Institutions; however, such directors are appointed from among candidates who pass the evaluation under Instructions Concerning Evaluation of Standing Director Candidates for Public Institutions issued by the Ministry of Trade, Industry and Energy.

(3) Recommendation of Director Candidates

In accordance with the Act on the Management of Public Institutions, KEPCO must have a Director Nomination Committee to recommend candidates for the positions of the CEO, the standing director who concurrently serves as a member of the Audit Committee and non-standing directors. We manage details with Regulations Concerning Operations of the Director Nomination Committee.

The Director Nomination Committee is convened on an ad-hoc basis depending on the need for new appointment of directors. The committee members consist of non-standing directors and others selected by the Board of Directors and must be not less than five and not more than fifteen persons, of which the Board of Directors elects less than one-half of the members. The committee members selected by the Board of Directors are from various fields, such as law, economics, academia, media and labor relations, and are required under the applicable regulations to include one person who acts as a spokesperson for KEPCO. The chairperson of the Director Nomination committee is elected from among the committee members who are non-standing directors by the vote of the members of the Director Nomination Committee.

In order to ensure transparency and fairness in the director nomination process, KEPCO strictly adheres to its internal regulations and relevant laws regarding the eligibility criteria and appointment process for directors. Moreover, KEPCO verifies the eligibility criteria of each director candidates, as required by the Act on the Management of Public Institutions, the Public Service Ethics Act and the Korean Commercial Act. In addition, KEPCO enlists the assistance of the Ministry of Gender Equality and Family and other organizations to recruit women candidates and thereby foster a more gender-balanced representation in its Board of Directors.

KEPCO provides detailed information with director appointment process to shareholders at least two weeks before the general meeting of shareholders, to review thoroughly on director candidates. Also, KEPCO persistently makes efforts to reflect minority shareholders' opinions.

We do not exclude concentrated voting under Articles of Incorporation of KEPCO. If concentrated voting is claimed by a shareholder who has more than 1% of the issued shares, in a general meeting of shareholders subjects to the appointment of more than two directors, we can adopt concentrated voting in accordance with the Korea Commercial Act.

3. Non-Standing Directors

In order to ensure fairness and transparency in the appointment of non-standing directors, KEPCO carries out such appointments in strict compliance with the specified procedures set out in Regulations Concerning Operations of the Director Nomination Committee for nomination of non-standing director candidates and after a careful scrutiny for any statutory reason for disqualification, including under the Korean Commercial Act.

The following tables sets forth the non-standing directors' term and significant interests with KEPCO and its subsidiaries as of May 31, 2021;

As of May 31, 2021, none of KEPCO's non-standing directors concurrently holds any position in other company.

4. Evaluation of Non-Standing Directors

(1) Evaluation

Evaluation of the non-standing directors is conducted in accordance with the Act on the Management of Public Institutions. Evaluation is done regularly once every six months and two months prior to the expiry of the director's term. Evaluation includes the attendance rates in the board meetings, performance in the board and contribution to KEPCO.

If the evaluation result of a non-standing director's performance is poor, the Minister of the Ministry of Economy and Finance may dismiss the non-standing director through the resolution by the Committee for Management of Public Institutions or propose the dismissal of the non-standing director to the person who has the right to appoint the non-standing director. The term of office for non-standing directors is two years, and it can be renewed by an increment of one year based on the evaluation results, at the discretion of the Minister of Ministry of Economy and Finance.

(2) Compensation

Compensation for a non-standing director does not exceed Won 30 million for a year including fixed monthly payment and extra payment for attending meetings, in accordance with the Guidelines for Director Compensation of Public Institutions.

The following table sets forth compensations for non-standing directors in 2020;

In thousands of Korean Won

As of May 31, 2021, KEPCO does not grant stock options to the non-standing directors.

5. BOD Operation

(1) Outline of BOD Operation

KEPCO has operational details of the Board of Directors on the Articles of Incorporations of KEPCO and Regulations Concerning the Board of Directors. The Board of Directors is required to hold regular meetings on a monthly basis and non-regular meetings as needed. Meetings of the Board of Directors are convened upon the request of the chairperson or of more than one third of the Directors. Notice of the meeting is required at least seven days before the meeting. The Korean Commercial Act permits attendance by teleconference or video conference.

The following table sets forth the details of the board meetings held from January 2020 to May 31, 2021.

(2) Performance of Directors

KEPCO prepares minutes and depositions for each board meeting, specifying the time, place, attendees' list, comments of attendees at the meeting and results of the resolutions. We note the opposing directors to the agenda and reasons for his or her opposition; such minutes are signed by each director presents at the meeting and made publicly available through KEPCO's corporate website and All Public Information In-One ('ALIO') website of the Ministry of Economy and Finance except confidential information of the company. The minutes also are preserved at the headquarters after reports and confirmation at the following board meeting.

The following table sets forth the attendance and approval rates of the directors as of May 31, 2021, for the board meetings in the fiscal year of 2020;

6. Subcommittees

Under the Board of Directors, there are three subcommittees, namely, Audit Committee, Director Nomination Committee and ESG Committee.

(1) Audit Committee

KEPCO maintains an Audit Committee pursuant to the Korean Commercial Act. The Audit Committee consists of three members, two of who are required to be non-standing directors. The details of the Audit Committee are provided in 'IV. Audit' section.

(2) Director Nomination Committee

The Director Nomination Committee is convened on an ad-hoc basis depending on the need for new appointment of directors, in accordance with the Act on the Management of Public Institutions. The committee members consist of non-standing directors and others selected by the Board of Directors and must be not less than five and not more than fifteen persons, of which the Board of Directors elects less than one-half of the members. The chairperson of the committee is elected among its members who are non-standing directors by the vote of the members.

The Director Nomination Committee from January 2020 to May 31, 2021 were held as follows;

(3) ESG Committee

In December 2020, KEPCO established an Environment, Social and Governance ('ESG') Committee under the Board of Directors to reinforce ESG-based management system and to ensure continuous performance in this area. The ESG Committee consists of three non-standing directors. ESG Committee is charged with resolving major management issues related to ESG, establishing ESG management strategies and business plans, checking on the overall direction of sustainable management and monitoring achievements and problems within such performances.

1. Internal Audit

(1) Responsibilities and Authorities of the Audit Committee

KEPCO maintains an Audit Committee pursuant to the Act on the Management of Public Institutions, and the composition, responsibilities and authorities of the Audit Committee are provided in the Regulations Concerning Operations of the Audit Committee.

The Audit Committee consists of three directors, two of who are required to be non-standing directors. The chairperson of the committee is required to be a non-standing director. At least one member of the committee must be an accounting or financial expert pursuant to the Enforcement Decree of the Korean Commercial Act.

One member of Audit committee is a standing director who is also non-executive, and such director is appointed based on the recommendation of Director Nomination Committee and by the resolution of general meeting of shareholders. The other members of the Audit Committee who are non-standing directors are appointed from among the non-standing directors by the resolution of general meeting of shareholders; the members of the Audit Committee independently and separately conduct an audit on management. The standing director of the Audit Committee shall not concurrently hold the post of public official, executive or employee of the institution subject to self-audit, and engage in duties for the purposes of financial gain other than public duties pursuant to the Act on Public Sector Audits.

The following table sets forth the members of the Audit Committee as of May 31, 2021;

The Audit Committee conducts an audit on KEPCO's business and accounting, inspect the business and assets of the company, evaluate the Internal Control over Financial Reporting of the company and examine internal monitoring system. The committee carries out its duties independently of the Board of Directors and managements to secure objectivity.

The Audit Committee, if necessary in carrying out its duties, may request attendance of employees of the company or the external auditor, submission of related materials and statements of opinions and consultation from external experts.

Matters subject to the review and resolutions by the Audit Committee are as follows:

The Audit Committee shall receive reports on the following:

The breach of the law and the Articles of Incorporation of KEPCO by the management will be reviewed and resolved by the Audit Committee and be reported to the Board of Directors. The Committee receives reports from the external auditor on a director's illegal act or any improper behavior in the course of performance of his or her duties. Any illegal acts or breaches of the management will be scrutinized in accordance with the internal audit plans and materiality of the matter and when such breaches and acts are of great importance, they will be reported to investigative authorities.

KEPCO has established an internal audit body, which directly reports to the Audit Committee, which has an independent audit support team located at KEPCO headquarters, separate from the other executive teams. KEPCO also has installed internal audit teams in fifteen regional headquarters, three regional construction headquarters and seven specialized business departments.

The internal audit teams carry out comprehensive audits, ordinary audits and extraordinary audits based on the annual audit plan approved by the Audit Committee at the beginning of the year and regularly report the results of these audits to the Audit Committee and the Board of Directors. The entirety of these audit results are accessible from KEPCO's corporate website.

The Audit Committee members attend Board of Directors meetings and receive reports on business management that are of great importance. The committee members can easily have access to important information as it is stipulated in the internal audit plans that the committee members may receive reports on matters of great importance when it is required by the committee.

The audit committee members are trained by external professionals to foster their expertise in audit.

The following table sets forth the trainings took by the Audit Committee members in 2020;

(2) Operation of the Audit Committee and the Performance of the members

Under the Regulations Concerning Operations of the Audit Committee, the committee holds regular meetings on a quarterly basis and also on an as-needed basis. Notice of the meeting specifying the time, place, purpose and agenda must be provided to the members of the committee at least seven days prior to the date of the meeting. The quorum for the committee meeting is a simple majority, and resolutions are made by the majority of the members present.

The following table sets forth the details of the meetings of the Audit Committee from January 2020 to May 31, 2021;

The following table sets forth the attendance rates of the current directors in the fiscal year of 2020;

Audit procedures are conducted in accordance with the audit plans that pursuant to the Act on Public Sector Audits. Details of meetings of the Audit Committee including meeting date, venue, agenda, statements made and results are documented and signed by the attended members. The Audit Committee makes reports at general meetings of shareholders regarding the meeting agenda, investigation results and audit reports statements in accordance with Regulations Concerning Operations of the Audit Committee and the Korean Commercial Act.

The internal audit teams carry out their duties faithfully.

2. External Auditor

(1) Appointment of External Auditors

As a listed company, KEPCO appoints the external auditor for three consecutive fiscal years subject to approval by the Audit committee in compliance with the Act on External Audit of Stock Companies, etc.

The external auditor appointment process involves a general competitive bidding, followed by negotiation of the engagement agreement. In order to be an eligible bidder, the external auditor must be a domestic accounting firm registered with the U.S. PCAOB and is thoroughly knowledgeable about U.S. accounting standards, or a domestic accounting firm affiliated with a professional organization, and must be a firm with no issues regarding independence.

The Audit Committee comprehensively considers the following qualities when approving the appointment of the external auditor: auditing period, proper number of skilled manpower, compensations, appropriateness of audit plans, independence and expertise. Moreover, by organizing a bidding evaluation committee, the audit committee evaluates each bidder with the criteria of financial condition, understanding of KEPCO, allocation and proposed management of professionals, project implementation plan, audit quality and the availability of other accounting services.

Accordingly, on November 16, 2018, the Audit Committee approved the appointment of Ernst & Young Han Young as KEPCO's external auditor for the fiscal years from 2019 to 2021.

The Audit committee evaluates annually the audit performance of the external auditor based on the compliance with the matters determined at the appointment, the adequacy of audit procedures, cooperation with the internal audit teams, and any sanctions by the regulatory authorities.

In limited circumstances, the Audit Committee may selectively authorize the external auditor to engage in non-audit services (such as tax adjustment services) that external auditor must perform as required under relevant laws, but only after finding that there are no significant independence issues as well as confirming full compliance with Section 201 of U.S. Sarbanes-Oxley Act, the Code of Ethics for Korean Certified Public Accountants and Regulations Concerning Operations of the Audit Committee. The Audit Committee also considers any detriment to independence caused by such engagement, the need for a separate engagement agreement and the appropriateness of the fees being paid.

The external auditor provided non-audit services to KEPCO and its subsidiaries in 2020 as follows;

In thousands of Korean Won

(2) Communications between the Audit Committee and the external auditor

The face-to-face meetings of the audit committee and the external auditor in the fiscal year of 2020 to May 31, 2021 is listed as follows;

The Audit committee receives direct reporting from, and exchanges views with the external auditor at least on a semi-annual basis as to KEPCO's critical accounting policy, review of the half-year financial statements, annual audit results and any illegal or improper act of KEPCO employees in the course of employment.

The external auditor reports to the Audit committee on important matters discovered during audit procedure through various methods including face-to-face meeting, e-mail and phone calls. The Audit Committee gives full support to the external auditor in conducting audit procedures. The communications between the external and internal audit teams and important matters found by the external auditors are reflected in internal audit procedures after reviewed by the internal audit teams.