Edgar Filing: KOREA ELECTRIC POWER CORP

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 June 2016

Commission File Number: 001-13372

KOREA ELECTRIC POWER CORPORATION

(Translation of registrant’s name into English)

55 Jeollyeok-ro, Naju-si, Jeollanam-do, 58217, 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 x 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 x

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82- .

This Report of Foreign Private Issuer on Form 6-K is deemed filed for all purposes under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.

QUARTERLY BUSINESS REPORT

(For the period from January 1, 2016 to March 31, 2016)

THIS IS A SUMMARY IN ENGLISH OF THE QUARTERLY BUSINESS REPORT ORIGINALLY PREPARED IN KOREAN AND IS IN SUCH FORM AS REQUIRED BY THE FINANCIAL SERVICES COMMISSION OF KOREA.

IN THE TRANSLATION PROCESS, SOME PARTS OF THE REPORT WERE REFORMATTED, REARRANGED OR SUMMARIZED FOR THE CONVENIENCE OF READERS. NON-MATERIAL OR PREVIOUSLY DISCLOSED INFORMATION IS OMITTED OR ABRIDGED.

UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON A CONSOLIDATED BASIS IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ADOPTED FOR USE IN KOREA, OR K-IFRS, WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. WE HAVE MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES.

I. Company Overview

1. Name of the company: Korea Electric Power Corporation (KEPCO)

2. Information of the company

(Address) 55 Jeollyeok-ro, Naju-si, Jeollanam-do, 58217, Korea

(Phone number) 82-61-345-4261

(Website) http://www.kepco.co.kr

3. Major businesses

KEPCO, as the parent company, is engaged in the following activities:

development of electric power resources;

generation, transmission, transformation and distribution of electricity and other related activities;

research and development of technology related to the businesses mentioned above;

overseas business related to the businesses mentioned above;

investment or contributions related to the businesses mentioned above;

development and operation of certain real estate holdings; and

other businesses entrusted by the government.

Businesses operated by KEPCO’s major subsidiaries are as follows: nuclear power generation by Korea Hydro & Nuclear Power (KHNP), thermal power generation by Korea South-East Power (KOSEP), Korea Midland Power (KOMIPO), Korea Western Power (KOWEPO), Korea Southern Power (KOSPO) and Korea East-West Power (EWP), other businesses including engineering service by KEPCO Engineering & Construction (KEPCO E&C), maintenance and repair of power plants by KEPCO Plant Service & Engineering (KEPCO KPS), nuclear fuel processing by KEPCO Nuclear Fuel (KEPCO NF), IT service by KEPCO KDN, and other overseas businesses and related investments.

4. Subsidiaries and affiliates of KEPCO

(As of March 31, 2016)


Classification	Consolidated subsidiaries		Associates and joint ventures		Total
Domestic		19		57		76
Overseas		60		38		98
Total		79		95		174

5. Major changes in management

A. On March 25, 2016, Lee, Kang-Hee whose term of the office expired was reappointed as a non-standing director.

B. At the extraordinary meeting of shareholders of KEPCO held on February 22, 2016, Cho, Hwan-Eik whose term of the office expired was elected as the President and Chief Executive Officer.

6. Changes in major shareholders

On December 31, 2014, Korea Development Bank merged with Korea Finance Corporation, and became the largest shareholder of KEPCO.

7. Information regarding KEPCO shares

A. Issued share capital: Won 3,210 billion (Authorized capital: Won 6 trillion)

B. Total number of issued shares: 641,964,077

(Total number of shares authorized to for issuance: 1,200,000,000)

C. Dividends: Dividend payment of Won 3,100 per share for fiscal year 2015 (Won 1.99 trillion in aggregate). Dividend payments for fiscal year 2014 and 2013 were Won 500 and Won 90 per share respectively and no dividend was paid for fiscal year 2012.

II. Business Overview

1. Consolidated financial results by segment for the first three-month period ended March 31, 2015 and 2014

(In billions of Won)


	January to March 2015				January to March 2016
	Sales		Operating profit		Sales		Operating profit
Electricity sales		14,937		-194		15,566		289
Nuclear generation		2,736		1,196		3,310		1,683
Thermal generation		6,624		1,217		6,235		1,691
Others(*)		705		71		700		82
Subtotal		25,002		2,290		25,811		3,745
Adjustment for related- party transactions		-9,878		-50		-10,126		-140
Total		15,124		2,240		15,685		3,605

•	The figures may not add up to the relevant total numbers due to rounding.

(*)	Others relate to 72 subsidiaries including KEPCO E&C, KEPCO KPS, KEPCO NF and KEPCO KDN, among others.

•	Sales and operating profit reflects amendments to Korean IFRS 1001 “Presentation of Financial Statements.”

2. Changes in unit prices of major products

(In Won per kWh)


Business sector		Company	January to December 2015	January to March 2016
Electricity sold	Residential	KEPCO	123.69	129.91
	Commercial		130.46	129.40
	Educational		113.22	104.21
	Industrial		107.41	107.91
	Agricultural		47.31	47.56
	Street lighting		113.37	108.89
	Overnight usage		67.22	72.86
Electricity from nuclear generation	Nuclear Generation	KHNP	64.32	75.93
Electricity from thermal generation	Thermal generation	KOSEP	70.68	81.66
		KOMIPO	87.16	92.88
		KOWEPO	89.19	98.86
		KOSPO	90.90	100.14
		EWP	84.75	98.06

3. Power purchase from generation companies for the first three-month period ended March 31, 2016


Company	Volume (MWh)		Expense (In billions of Won)
KHNP		43,129,909		3,279
KOSEP		16,881,077		1,379
KOMIPO		11,672,007		1,085
KOWEPO		12,410,222		1,227
KOSPO		10,903,123		1,092
EWP		12,789,974		1,254
Others		26,937,303		2,907
Total		134,723,615		12,225

•	Excludes expense related to the renewable portfolio standard provisions.

4. Intellectual property as of March 31, 2016


	Patents		Utility models	Designs	Trademarks		Total
	Domestic	Overseas	Utility models	Designs	Domestic	Overseas	Total
KEPCO	1,756	172	100	73	124	44	2,269
Consolidated subsidiaries	3,584	549	750	94	254	16	5,187
Total	5,340	721	850	167	378	60	7,456

III. Financial Information

1. Condensed consolidated financial results as of and for the first three-month period ended March 31, 2016

(In billions of Won)


Consolidated statements of comprehensive income							Consolidated statements of financial position
	January to March 2015		January to March 2016		Change (%)			December 31, 2015		March 31, 2016		Change (%)
Sales		15,124		15,685		3.7	Total assets		175,257		176,793		0.9
Operating profit		2,240		3,605		61.0	Total liabilities		107,315		108,815		1.4
Net income		1,223		2,163		76.8	Total equity		67,943		67,978		0.1

2. Condensed separate financial results as of and for the first three-month period ended March 31, 2016

(In billions of Won)


Separate statements of comprehensive income							Separate statements of financial position
	January to March 2015		January to March 2016		Change (%)			December 31, 2015		March 31, 2016		Change (%)
Sales		14,937		15,566		4.2	Total assets		106,306		105,847		-0.4
Operating profit		-194		289		248.8	Total liabilities		53,125		53,629		0.9
Net income		335		1,046		212.0	Total equity		53,181		52,218		-1.8

IV. Board of Directors (KEPCO Only)

1. The board of directors is required to consist of not more than 15 directors including the president. Under our Article of Incorporation, there may not be more than seven standing directors including president, and more than eight non-standing directors. The number of non-standing directors must exceed the number of standing directors, including our president.

*	The Audit Committee consists of one standing director and two non-standing directors.

2. Board meetings and agendas for the first-three month period ended March 31, 2015


Number of meetings	Number of agendas	Classification
Number of meetings	Number of agendas	Resolutions	Results	Reports	Results
4	20	15	Approved as proposed	5	Accepted as reported

*	The audit committee held 4 meetings with 15 agendas (of which, 9 were resolved as proposed and 6 were approved as reported).

3. Major activities of the Board of Directors


Date	Agenda	Results	Type
January 5, 2016	Approval to close the shareholders’ registry for extraordinary general meeting of shareholders	Approved as proposed	Resolution
January 5, 2016	Approval to call for the extraordinary general meeting of shareholders for the fiscal year 2016	Approved as proposed	Resolution
February 19, 2016	Approval of the maximum aggregate amount of remuneration for directors in 2016	Approved as proposed	Resolution
	Approval of consolidated and separate financial statements for the fiscal year 2015	Approved as proposed	Resolution
	Approval to call for the annual general meeting of shareholders for the fiscal year 2015	Approved as proposed	Resolution
	Approval of investment to a special purpose company for solar power project in Hokkaido, Japan	Approved as proposed	Resolution
	Composition of the Director Nomination Committee to recommend candidates and approval of standards for examining candidates for a standing director and member of the Audit Committee	Approved as proposed	Resolution
	Approval to close the shareholders’ registry for extraordinary general meeting of shareholders	Approved as proposed	Resolution
	Report on the annual management of commercial papers in 2015	Accepted as reported	Report
	Report on internal control over financial reporting for the fiscal year 2015	Accepted as reported	Report
	Evaluation report on internal control over financial reporting for the fiscal year 2015	Accepted as reported	Report
	Report on operating plan of Act on the Control and Supervision on Nuclear Power Suppliers	Accepted as reported	Report
February 29, 2016	Amendments on the Electricity Usage Agreement and Rules for Operation	Approved as proposed	Resolution
February 29, 2016	Approval of the Statement of Appropriation of Retained Earnings for fiscal year 2015	Approved as proposed	Resolution
March 18, 2016	Approval of Agreement on Management Performance Assessment for Chief of Organization	Approved as proposed	Resolution
	Approval of the establishment of the new organization	Approved as proposed	Resolution
	Amendments on the Electricity Usage Agreement and Rules for Operation	Approved as proposed	Resolution
	Approval of liquidation of Dolphin, the special purpose company in Nigeria	Approved as proposed	Resolution
	Composition of the Director Nomination Committee to recommend candidates and approval of standards for examining candidates for non-standing directors	Approved as proposed	Resolution
	Auditor’s report to the board of directors for 2015	Accepted as reported	Report

4. Major Activities and Attendance Status of Non-standing directors

Date

Agenda

Lee,
Gang-
Hee

Cho,
Jeon-
Hyeok

Choi,
Ki-
Ryun

Sung,
Tae-
Hyun

Koo,
Ja-
Yoon

Ahn,
Choong-
Yong

Ahn,
Hyun-
Ho^(*)

Kim,
Joo-
Suen

January 5, 2016

Approval to close the shareholders’ registry for extraordinary general meeting of shareholders

For

Absence

For

Approval to call for the extraordinary general meeting of shareholders for the fiscal year 2016

For

Absence

For

February 19, 2016

Approval of the maximum aggregate amount of remuneration for directors in 2016

For

Approval of consolidated and separate financial statements for the fiscal year 2015

For

Approval to call for the annual general meeting of shareholders for the fiscal year 2015

For

Approval of investment to a special purpose company for solar power business in Hokkaido, Japan

For

Composition of the Director Nomination Committee to recommend candidates and approval of standards for examining candidates for a standing director and member of the Audit Committee

For

Approval to close the shareholders’ registry for extraordinary general meeting of shareholders

For

Report on the annual management of commercial papers in 2015

Agenda for Report

Report on internal control over financial reporting for the fiscal year 2015

Agenda for Report

Evaluation report on internal control over financial reporting for the fiscal year 2015

Agenda for Report

Report on operating plan of Act on the Control and Supervision on Nuclear Power Suppliers

Agenda for Report

February 29, 2016

Amendments on the Electricity Usage Agreement and Rules for Operation

For

Absence

For

Absence

For

Approval of the Statement of Appropriation of Retained Earnings for fiscal year 2015

For

Absence

For

Absence

For

March 18, 2016

Approval of Agreement on Management Performance Assessment for Chief of Organization

For

Absence

For

Absence

For

Resigned

For

Approval of the establishment of the new organization

For

Absence

For

Absence

For

Amendments on the Electricity Usage Agreement and Rules for Operation

For

Absence

For

Absence

For

Approval of liquidation of Dolphin, the special purpose company in Nigeria

For

Absence

For

Absence

For

Composition of the Director Nomination Committee to recommend candidates and approval of standards for examining candidates for a standing director and member of the Audit Committee

For

Absence

For

Absence

For

Auditor’s report to the board of directors for 2015

For

Absence

For

Absence

For

Attendance Rate

100%

50%

100%

75%

100%

66.7%

100%

(*)	Ahn, Hyun-Ho voluntarily resigned on March 17, 2016. Under Korean law, Mr. Ahn retains the rights and is subject to obligations as a non-standing director until his successor is appointed.

4. Major activities of the Audit Committee


Date	Agenda	Results	Type
January 8, 2016	Approval of selection of independent auditors of subsidiaries	Approved as proposed	Resolution
	Prior approval for non-audit service for subsidiaries by the independent auditor	Approved as proposed	Resolution
	Auditor’s report on the agendas for the extraordinary general meeting of shareholders	Accepted as reported	Report
	Evaluation report on joint selection of independent auditors for the period from fiscal year 2016 to 2018	Accepted as reported	Report
January 12, 2016	Approval of selection and remuneration for independent auditors for the period from fiscal year 2016 to 2018	Approved as proposed	Resolution
February 19, 2016	Auditor’s report on the agendas for the annual general meeting of shareholders	Approved as proposed	Resolution
	Audit plans for 2016	Approved as proposed	Resolution
	Report on internal control over financial reporting for the fiscal year 2015	Accepted as reported	Report
	Evaluation report on internal control over financial reporting for the fiscal year 2015	Accepted as reported	Report
	Education plans for auditors for 2016	Accepted as reported	Report
March 16, 2016	Approval of selection of independent auditors of subsidiaries	Approved as proposed	Resolution
	Prior approval for non-audit service for subsidiaries by the independent auditor	Approved as proposed	Resolution
	Amendments on the Charter of Ethics for KEPCO Employees and the Code of Conduct for KEPCO Executives and Staff members	Approved as proposed	Resolution
	Auditor’s report to the board of directors for 2015	Accepted as reported	Report
	Independent auditor’s report on the auditing results for the consolidated and separate financial statements for the fiscal year 2015	Accepted as reported	Report

The audit department, organized under the supervision of the Audit Committee, conducts internal audit over the entire company and takes administrative measures as appropriate in accordance with relevant internal regulations. KEPCO’s District Divisions and Branch Offices also have separate audit teams which conduct internal inspections with respect to the relevant divisions or offices.

V. Shareholders

1. List of shareholders as of March 8, 2016


		Number of shareholders		Shares owned		Percentage of total (%)
Government of the Republic of Korea			1		116,841,794		18.20
Korea Development Bank			1		211,235,264		32.90
Subtotal			2		328,077,058		51.10
National Pension Service			1		44,276,581		6.90
Public (non-Koreans)	Common shares		1,687		168,832,936		26.30
Public (non-Koreans)	American depositary shares (ADS)		1		36,199,847		5.64
Public	Corporate		1,448		47,461,707		7.39
(Koreans)	Individual		340,532		17,115,948		2.67
Total			343,671		641,964,077		100.00

•	Percentages are based on issued shares of common stock.

•	All of our shareholder have equal voting rights.

•	Citibank, N.A. is our depositary bank and each ADS represents one-half of one share of our common stock.

VI. Directors and employees as of and for the first three-month period ended March 31, 2016 (KEPCO Only)

1. Directors

(In thousands of Won)


Type	Number of directors		Total remuneration		Average remuneration per person
Standing director		7		174,190		24,884
Non-standing director		8		62,637		7,830
Total		15		236,827		15,788

2. Employees

(In thousands of Won)


Type	Number of employees						Average continuous service year		Total salaries		Average salaries per person
Type	Regular		Non- regular		Total		Average continuous service year		Total salaries		Average salaries per person
Male		16,433		266		16,699		19.4		356,721,875		21,362
Female		3,598		128		3,726		14.1		59,032,242		15,843
Total		20,031		394		20,425		18.4		415,754,117		20,355

VII. Other Information Necessary for the Protection of Investors

1. Summary of shareholder’s meetings for the first three-month period ended March 31


Type	Agenda	Results
Extraordinary General Meeting held on February 22, 2016	Election of the President and Chief Executive Officer : Cho, Hwan-Eik	Approved as proposed
Annaul General Meeting held on March 22, 2016	Approval of financial statements for the fiscal year 2015	Approved as proposed
Annaul General Meeting held on March 22, 2016	Approval of the maximum aggregate amount of remuneration for directors in 2016	Approved as proposed

2. Pending legal proceedings as of March 31, 2016

(In billions of Won)


Type	Number of lawsuits	Amount claimed
Lawsuits where KEPCO and its subsidiaries are engaged as the defendants	750	1,123
Lawsuits where KEPCO and its subsidiaries are engaged as the plaintiffs	201	1,033

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, Jong-soo
Name:		Kim, Jong-soo
Title:		Vice President

Date: June 15, 2016

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Financial Statements

March 31, 2016

(Unaudited)

(With Independent Auditors’ Review Report Thereon)

INDEX TO FINANCIAL STATEMENTS


	Page

Independent Auditors’ Review Report		1

Consolidated Interim Statements of Financial Position		2

Consolidated Interim Statements of Comprehensive Income		4

Consolidated Interim Statements of Changes in Equity		6

Consolidated Interim Statements of Cash Flows		8

Notes to the Consolidated Interim Financial Statements		10

Independent Auditors’ Review Report

Based on a report originally issued in Korean

The Board of Directors and Shareholders

Korea Electric Power Corporation:

Reviewed Financial Statements

We have reviewed the accompanying consolidated interim financial statements of Korea Electric Power Corporation and its subsidiaries (the “Company”), which comprise the consolidated interim statement of financial position as of March 31, 2016, the consolidated interim statements of comprehensive income, changes in equity and cash flows for the three-month periods ended March 31, 2016 and 2015 and notes to the interim financial statements.

Management’s Responsibility for the Consolidated Interim Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”) 1034, ‘Interim Financial Reporting’ and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Review Responsibility

Our responsibility is to issue a report on these condensed consolidated interim financial statements based on our reviews.

We conducted our reviews in accordance with the Review Standards for Quarterly and Semiannual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Review Conclusion

Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying consolidated interim financial statements referred to above are not prepared, in all material respects, in accordance with K-IFRS 1034, ‘Interim Financial Reporting’.

Other Matters

The procedures and practices utilized in the Republic of Korea to review such consolidated interim financial statements may differ from those generally accepted and applied in other countries.

We have previously audited, in accordance with Korean Standards on Auditing, the consolidated statement of financial position of the Company as of December 31, 2015, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this report, and we expressed an unqualified opinion on those consolidated financial statements in our report dated March 11, 2016. The accompanying consolidated financial position of the Company as of December 31, 2015, is consistent, in all material respects, with the audited consolidated financial statements from which it has been derived.

LOGO

KPMG Samjong Accounting Corp.

Seoul, Korea

May 13, 2016

This report is effective as of May 13, 2016, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying consolidated interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Financial Position

As of March 31, 2016 and December 31, 2015

(Unaudited)


In millions of won	*Note*		March 31, 2016		December 31, 2015
Assets

Current assets
Cash and cash equivalents		5,6,7,44	W	5,418,476		3,783,065
Current financial assets, net		5,10,11,12,44		3,871,688		5,335,621
Trade and other receivables, net		5,8,14,20,44,45,46		6,770,201		7,473,548
Inventories, net		13		5,014,272		4,946,413
Income tax refund receivables		40		7,916		9,081
Current non-financial assets		15		482,016		397,950
Assets held-for-sale		41		79,647		79,647

Total current assets				21,644,216		22,025,325
Non-current assets
Non-current financial assets, net		5,6,9,10,11,12,44		2,548,714		2,495,554
Non-current trade and other receivables, net		5,8,14,44,45,46		1,817,616		1,798,419
Property, plant and equipment, net		18,27,48		142,976,442		141,361,351
Investment properties, net		19,27		224,940		269,910
Goodwill		16		2,582		2,582
Intangible assets other than goodwill, net		21,27,45		888,504		855,832
Investments in associates		4,17		4,524,066		4,405,668
Investments in joint ventures		4,17		1,335,827		1,287,862
Deferred tax assets		40		701,713		623,623
Non-current non-financial assets		15		128,659		131,233

Total non-current assets				155,149,063		153,232,034


Total Assets		4	W	176,793,279		175,257,359

(Continued)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Financial Position, Continued

As of March 31, 2016 and December 31, 2015

(Unaudited)


In millions of won	*Note*		March 31, 2016			December 31, 2015

Liabilities

Current liabilities
Trade and other payables, net		5,22,24,44,46	W	6,436,194			4,735,697
Current financial liabilities, net		5,11,23,44,46		8,741,062			7,857,198
Income tax payables		40		2,303,607			2,218,060
Current non-financial liabilities		20,28,29		6,861,807			6,320,711
Current provisions		26,44		1,922,903			1,579,176

Total current liabilities				26,265,573			22,710,842

Non-current liabilities
Non-current trade and other payables, net		5,22,24,44,46		3,678,377			3,718,435
Non-current financial liabilities, net		5,11,23,44,46		48,406,138			51,062,811
Non-current non-financial liabilities		28,29		7,154,576			7,092,252
Employee benefits liabilities, net		25,44		1,738,044			1,503,107
Deferred tax liabilities		40		8,625,036			8,362,683
Non-current provisions		26,44		12,947,374			12,864,754

Total non-current liabilities				82,549,545			84,604,042


Total Liabilities		4	W	108,815,118			107,314,884


Equity

Contributed capital		1,30,44
Share capital			W	3,209,820			3,209,820
Share premium				843,758			843,758

				4,053,578			4,053,578
Retained earnings		31
Legal reserves				1,604,910			1,604,910
Voluntary reserves				31,847,274			23,720,167
Unappropriated retained earnings				14,785,312			22,862,164

				48,237,496			48,187,241


Other components of equity		33
Other capital surpluses				1,197,347			1,197,388
Accumulated other comprehensive loss				(71,023	)		(98,713	)
Other equity				13,294,973			13,294,973

				14,421,297			14,393,648

Equity attributable to owners of the Company				66,712,371			66,634,467


Non-controlling interests		16,32		1,265,790			1,308,008


Total Equity			W	67,978,161			67,942,475


Total Liabilities and Equity			W	176,793,279			175,257,359

See accompanying notes to the consolidated interim financial statements.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income

For the three-month periods ended March 31, 2016 and 2015

(Unaudited)


In millions of won, except per share information	*Note*		March 31, 2016			March 31, 2015

Sales		4,34,44,46
Sales of goods			W	14,501,934			14,232,984
Sales of services				103,630			94,788
Sales of construction services		20		981,845			704,509
Revenue related to transfer of assets from customers				97,918			91,578

				15,685,327			15,123,859

Cost of sales		13,25,42,46
Cost of sales of goods				(10,517,018	)		(11,665,919	)
Cost of sales of services				(93,234	)		(89,159	)
Cost of sales of construction services				(960,871	)		(667,091	)

				(11,571,123	)		(12,422,169	)


Gross profit				4,114,204			2,701,690


Selling and administrative expenses		25,35,42,46		(508,857	)		(461,824	)


Operating profit		4		3,605,347			2,239,866

Other non-operating income		36		92,302			117,365

Other non-operating expenses		36		(20,702	)		(23,137	)

Other gains, net		37		39,903			25,894

Finance income		5,11,38		352,422			187,207

Finance expenses		5,11,39		(719,635	)		(681,424	)

Profit related associates, joint ventures and subsidiaries		4,17
Share in income of associates and joint ventures				185,781			207,554
Gain on disposal of investments in subsidiaries				—			5,866
Share in loss of associates and joint ventures				(26,860	)		(20,871	)

				158,921			192,549


Profit before income tax				3,508,558			2,058,320


Income tax expense		40		(1,345,725	)		(835,213	)


Profit for the period			W	2,162,833			1,223,107

(Continued)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income, Continued

For the three-month periods ended March 31, 2016 and 2015

(Unaudited)


In millions of won, except per share information	*Note*		March 31, 2016			March 31, 2015

Other comprehensive income (loss)		5,11,25,31,33
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit liability, net of tax		25,31	W	(100,571	)		(78,831	)
Share in other comprehensive loss of associates and joint ventures, net of tax		31		(184	)		(242	)
Items that are or may be reclassified subsequently to profit or loss:
Net change in the unrealized fair value of available-for-sale financial assets, net of tax		33		27,170			(9,647	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		5,11,33		(12,804	)		11,998
Foreign currency translation of foreign operations, net of tax		33		3,343			(52,013	)
Share in other comprehensive income (loss) of associates and joint ventures, net of tax		33		4,589			(10,791	)


Other comprehensive loss, net of tax				(78,457	)		(139,526	)

Total comprehensive income for the period			W	2,084,376			1,083,581


Profit or loss attributable to:
Owners of the Company		43	W	2,135,450			1,200,083
Non-controlling interests				27,383			23,024

			W	2,162,833			1,223,107

Total comprehensive income attributable to:
Owners of the Company			W	2,068,034			1,068,780
Non-controlling interests				16,342			14,801

			W	2,084,376			1,083,581


Earnings per share		43
Basic and diluted earnings per share			W	3,326			1,869

See accompanying notes to the consolidated interim financial statements.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity

For the three-month periods ended March 31, 2016 and 2015

(Unaudited)


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

Balance at January 1, 2015	W	4,053,578		35,303,647			14,244,106			53,601,331			1,223,679			54,825,010

Total comprehensive income (loss) for the period
Profit for the period		—		1,200,083			—			1,200,083			23,024			1,223,107
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit liability, net of tax		—		(74,360	)		—			(74,360	)		(4,471	)		(78,831	)
Share in other comprehensive loss of associates and joint ventures, net of tax		—		(242	)		—			(242	)		—			(242	)
Items that may be reclassified subsequently to profit or loss:
Net changes in the unrealized fair value of available-for-sale financial assets, net of tax		—		—			(9,647	)		(9,647	)		—			(9,647	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		—		—			15,483			15,483			(3,485	)		11,998
Foreign currency translation of foreign operations, net of tax		—		—			(51,746	)		(51,746	)		(267	)		(52,013	)
Share in other comprehensive loss of associates and joint ventures, net of tax		—		—			(10,791	)		(10,791	)		—			(10,791	)
Transactions with owners of the Company, recognized directly in equity
Dividends paid		—		(320,982	)		—			(320,982	)		(55,044	)		(376,026	)
Equity transaction in consolidated scope – other than issuance of share capital		—		—			(716	)		(716	)		(1,509	)		(2,225	)
Dividends paid (hybrid securities)		—		—			—			—			(4,105	)		(4,105	)
Others		—		—			—			—			(992	)		(992	)


Balance at March 31, 2015	W	4,053,578		36,108,146			14,186,689			54,348,413			1,176,830			55,525,243

(Continued)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity, Continued

For the three-month periods ended March 31, 2016 and 2015

(Unaudited)


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

Balance at January 1, 2016	W	4,053,578		48,187,241			14,393,648			66,634,467			1,308,008			67,942,475

Total comprehensive income (loss) for the period
Profit for the period		—		2,135,450			—			2,135,450			27,383			2,162,833
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit liability, net of tax		—		(94,930	)		—			(94,930	)		(5,641	)		(100,571	)
Share in other comprehensive loss of associates and joint ventures, net of tax		—		(176	)		—			(176	)		(8	)		(184	)
Items that may be reclassified subsequently to profit or loss:
Net changes in the unrealized fair value of available-for-sale financial assets, net of tax		—		—			27,172			27,172			(2	)		27,170
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		—		—			(12,796	)		(12,796	)		(8	)		(12,804	)
Foreign currency translation of foreign operations, net of tax		—		—			8,729			8,729			(5,386	)		3,343
Share in other comprehensive income of associates and joint ventures, net of tax		—		—			4,585			4,585			4			4,589
Transactions with owners of the Company, recognized directly in equity
Dividends paid		—		(1,990,089	)		—			(1,990,089	)		(56,901	)		(2,046,990	)
Issuance of shares of capital by subsidiaries		—		—			(41	)		(41	)		2			(39	)
Changes in consolidation scope		—		—			—			—			2,453			2,453
Dividends paid (hybrid securities)		—		—			—			—			(4,114	)		(4,114	)


Balance at March 31, 2016	W	4,053,578		48,237,496			14,421,297			66,712,371			1,265,790			67,978,161

See accompanying notes to the consolidated interim financial statements.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Cash Flows

For the three-month periods ended March 31, 2016 and 2015

(Unaudited)


In millions of won	March 31, 2016			March 31, 2015

Cash flows from operating activities
Profit for the period	W	2,162,833			1,223,107


Adjustments for:
Income tax expense		1,345,725			835,213
Depreciation		2,142,242			2,001,075
Amortization		20,096			19,864
Employee benefit expense		84,611			76,860
Bad debt expense (reversal of allowance for bad debt)		7,996			(3,745	)
Interest expense		458,235			552,656
Loss on sale of financial assets		—			975
Loss on disposal of property, plant and equipment		200			516
Loss on abandonment of property, plant, and equipment		93,761			61,727
Impairment loss on property, plant and equipment		—			3,285
Loss on disposal of intangible assets		134			5
Accretion expense to provisions, net		581,749			323,680
Loss (gain) on foreign currency translation, net		(147,479	)		61,740
Valuation and transaction loss (gain) on derivative instruments, net		124,316			(62,309	)
Share in income of associates and joint ventures, net		(158,921	)		(186,683	)
Gain on sale of financial assets		(1,480	)		—
Gain on disposal of property, plant and equipment		(18,598	)		(17,915	)
Gain on disposal of investments in subsidiaries		—			(5,866	)
Interest income		(80,319	)		(49,493	)
Dividend income		(9,367	)		(5,456	)
Impairment loss on available-for-sale securities		—			5,821
Others, net		1,738			148

		4,444,639			3,612,098

Changes in:
Trade receivables		730,105			1,283,480
Non-trade receivables		(5,787	)		69,047
Accrued income		(62,069	)		(80,701	)
Other receivables		2,236			(1,615	)
Other current assets		(63,531	)		69,597
Inventories		(253,353	)		(297,068	)
Other non-current assets		(45,767	)		(19,309	)
Trade payables		(222,929	)		(863,528	)
Non-trade payables		(130,411	)		(14,846	)
Accrued expenses		23,138			(21,003	)
Other payables		—			4,046
Other current liabilities		680,661			711,990
Other non-current liabilities		126,253			(28,258	)
Investments in associates and joint ventures		17,385			16,839
Provisions		(197,898	)		(98,760	)
Payments of employee benefit obligations		(14,573	)		(4,016	)
Plan assets		(176	)		—

		583,284			725,895

(Continued)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Cash Flows, Continued

For the three-month periods ended March 31, 2016 and 2015

(Unaudited)


In millions of won	March 31, 2016			March 31, 2015

Cash generated from operating activities
Dividends received	W	8,806			678
Interest paid		(508,430	)		(593,028	)
Interest received		49,748			44,607
Income taxes paid		(1,015,948	)		(196,126	)

Net cash from operating activities		5,724,932			4,817,231


Cash flows from investing activities
Proceeds from disposals of associates and joint ventures		10,174			—
Acquisition of associates and joint ventures		(38,031	)		(31,010	)
Proceeds from disposals of property, plant and equipment		20,502			3,209,129
Acquisition of property, plant and equipment		(3,599,135	)		(3,894,434	)
Proceeds from disposals of intangible assets		142			147
Acquisition of intangible assets		(15,612	)		(5,057	)
Proceeds from disposals of financial assets		2,337,693			40,263
Acquisition of financial assets		(1,049,866	)		(946,425	)
Increase in loans		(51,997	)		(39,557	)
Collection of loans		38,847			16,748
Increase in deposits		(139,472	)		(60,846	)
Decrease in deposits		52,519			44,839
Receipt of government grants		9,559			4,739
Usage of government grants		(10,215	)		(4,434	)
Net cash inflow from business acquisitions		—			553
Other cash inflow from investing activities, net		10,833			2,588

Net cash used in investing activities		(2,424,059	)		(1,662,757	)


Cash flows from financing activities
Repayment of short-term borrowings, net		(480,293	)		(290,350	)
Proceeds from long-term borrowings and debt securities		791,808			532,900
Repayment of long-term borrowings and debt securities		(1,955,712	)		(2,105,718	)
Payment of finance lease liabilities		(30,051	)		(27,995	)
Settlement of derivative instruments, net		42,952			9,031
Change in non-controlling interest		2,445			(11	)
Dividends paid (hybrid bond)		(4,114	)		(4,105	)
Dividends paid		(56,902	)		(14,572	)

Net cash used in financing activities		(1,689,867	)		(1,900,820	)


Net increase in cash and cash equivalents before effect of exchange rate fluctuations		1,611,006			1,253,654

Effect of exchange rate fluctuations on cash held		24,405			4,422


Net increase in cash and cash equivalents		1,635,411			1,258,076

Cash and cash equivalents at January 1		3,783,065			1,796,300


Cash and cash equivalents at December 31	W	5,418,476			3,054,376

See accompanying notes to the consolidated interim financial statements.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

March 31, 2016

(Unaudited)

1.	Reporting Entity (Description of the controlling company)

Korea Electric Power Corporation (“KEPCO”), the controlling company as defined in Korean International Financial Reporting Standards (“K-IFRS”) 1110 ‘Consolidated Financial Statements’, was incorporated on January 1, 1982 in accordance with the Korea Electric Power Corporation Act (the “KEPCO Act”) to engage in the generation, transmission and distribution of electricity and development of electric power resources in the Republic of Korea. KEPCO also provides power plant construction services. KEPCO’s stock was listed on the Korea Stock Exchange on August 10, 1989 and the Company listed its Depository Receipts (DR) on the New York Stock Exchange on October 27, 1994. The Company’s head office is located in Naju, Jeollanam-do.

As of March 31, 2016, KEPCO’s share capital amounts to W3,209,820 million and KEPCO’s shareholders are as follows:


	Number of shares		Percentage of ownership
Government of the Republic of Korea		116,841,794		18.20	%
Korea Development Bank		211,235,264		32.90	%
Other (*)		313,887,019		48.90	%


		641,964,077		100.00	%

(*)	The number of shares held by foreign shareholders are 205,032,783 shares (31.94%) as of the most recent closing date of Register of Shareholders (March 8, 2016).

In accordance with the Restructuring Plan enacted on January 21, 1999 by the Ministry of Trade, Industry and Energy (the “MTIE”, formerly the Ministry of Knowledge Economy), KEPCO spun off its power generation divisions on April 2, 2001, resulting in the establishment of six power generation subsidiaries.

2.	Basis of Preparation

(1)

Statement of compliance

These consolidated interim financial statements were prepared in accordance with K-IFRS 1034, ‘Interim Financial Reporting’ as part of the period covered by KEPCO and subsidiaries’ (the “Company”) K-IFRS annual financial statements. The notes are included to explain events and transactions to give the changes in financial position and performance of the Company since the last annual consolidated financial statements as at and for the year ended December 31, 2015.

The consolidated financial statements have been prepared in accordance with K-IFRS, as prescribed in the Act on External Audits of Corporations in the Republic of Korea.

(2)

Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis, except for the following material items in the consolidated statements of financial position:

•

derivative financial instruments are measured at fair value

•

available-for-sale financial assets are measured at fair value

•

liabilities for defined benefit plans are recognized at the net of the total present value of defined benefit obligations less the fair value of plan assets

(3)

Functional and presentation currency

These consolidated financial statements are presented in Korean won (“Won”), which is KEPCO’s functional currency and the currency of the primary economic environment in which the Company operates.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

2.	Basis of Preparation, Continued

(4)

Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The followings are the key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year.

(i)

Useful lives of property, plant and equipment, estimations on provision for decommissioning costs

The Company reviews the estimated useful lives of property, plant and equipment at the end of each annual reporting period. Management’s assumptions could affect the determination of estimated economic useful lives.

The Company records the fair value of estimated decommissioning costs as a liability in the period in which the Company incurs a legal obligation associated with the retirement of long-lived assets that result from acquisition, construction, development and/or normal use of the assets. The Company is required to record a liability for the dismantling (demolition) of nuclear power plants and disposal of spent fuel and low and intermediate radioactive wastes.

(ii)

Deferred tax

The Company recognizes deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities of each consolidated taxpaying entity. However, the amount of deferred tax assets may be different if the Company does not realize estimated future taxable income during the carry forward periods.

(iii)

Valuations of financial instruments at fair values

The Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the financial officer.

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of K-IFRS including the level in the fair value hierarchy in which such valuation techniques should be classified.

When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

If the inputs used to measure the fair value of an asset or a liability might be categorized in different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

(iv)

Defined employee benefit liabilities

The Company offers its employees defined benefit plans. The cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at the end of each reporting period. For actuarial valuations, certain inputs such as discount rates and future salary increases are estimated. Defined benefit plans contain significant uncertainties in estimations due to its long-term nature.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

2.	Basis of Preparation, Continued

(4)

Use of estimates and judgments, continued

(v)

Unbilled revenue

Energy delivered but not yet metered nor billed are estimated at the reporting date based on consumption statistics and selling price estimates. Determination of the unbilled revenues at the end of the reporting period is sensitive to the estimated assumptions and prices based on statistics. Unbilled revenue recognized as of March 31, 2016 and 2015 are W1,336,987 million and W1,413,414 million, respectively.

(5)

Changes in accounting policies

(i)

Amendments to K-IFRS 1016, ‘Property, Plant and Equipment’

The Company has adopted amendments to K-IFRS 1016 ‘Property, Plant and Equipment’, since January 1, 2016. Amendments to K-IFRS 1016, ‘Property, Plant and Equipment’ specify that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate.

Upon adoption of the amendments, there is no significant impact on the Company’s consolidated financial statements

(ii)

Amendments to K- IFRS 1038, ‘Intangible Assets’

The Company has adopted amendments to K- IFRS 1038, ‘Intangible Assets’, since January 1, 2016. Amendments to K-IFRS 1038, ‘Intangible Assets’, introduce a rebuttable presumption that the use of revenue-based amortization methods for intangible assets is inappropriate. This presumption can be rebutted only when revenue and the consumption of the economic benefits of the intangible asset are highly correlated, or when the intangible asset is expressed as a measure of revenue.

Upon adoption of the amendments, there is no significant impact on the Company’s consolidated financial statements

(iii)

Amendments to K-IFRS 1111, ‘Joint Arrangement’

The Company has adopted amendments to K-IFRS 1111, ‘Joint Arrangement’, since January 1, 2016. Amendments to K-IFRS 1111, ‘Joint Arrangement’, require an investor to apply the principles of business combination accounting when it acquires an interest in a joint operation that constitutes a business as defined in K-IFRS 1103, ‘Business Combinations’.

Upon adoption of the amendments, there is no significant impact on the Company’s consolidated financial statements

(iv)

Amendments to K-IFRS 1011, ‘Construction Contracts’

The Company has adopted amendments to K-IFRS 1011, ‘Construction Contracts’, since January 1, 2016. Amendments to K-IFRS 1011, ‘Construction Contracts’, require the Company to disclose the construction contracts by each project or operating segment (refer to note 20).

(6)

New standards and amendments not yet adopted

The following new standards, interpretations and amendments to existing standards have been published for mandatory application for annual periods beginning after January 1, 2016, and the Company has not early adopted them. The management believes the impact on the consolidated financial statements upon the adoption of the amendments is immaterial.

(i)

K-IFRS 1109, ‘Financial Instruments’

K-IFRS 1109, ‘Financial Instruments’ specifies classification and measurement of financial instruments and changes the credit loss mode into an expected credit loss model from an incurred credit loss model. Additionally, this standard was aimed to align accounting more closely with risk management and expanded the types of eligible hedged item, hedging instrument, and hedged risk under new hedge accounting model. This standard is effective for annual periods beginning on or after January 1, 2018.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

2.	Basis of Preparation, Continued

(6)

New standards and interpretations not yet adopted, continued

(ii)

K-IFRS 1115, ‘Revenue from Contracts with Customers’,

K-IFRS 1115, ‘Revenue from Contracts with Customers’, as a single standard applying to all contracts with customers, provides the five-step process for revenue recognition and replaces the risk-and-reward model, which is based on the control, under the current standards. The risk-and-reward model is changed to a single indicator implicating the satisfaction of a performance obligation. This standard is effective for annual periods beginning on or after January 1, 2018.

3.	Significant Accounting Policies

The significant accounting policies applied by the Company in preparation of its financial statements are included below. Except as described in note 2.(5), the accounting policies applied by the Company in these separate financial statements are the same as those applied by the Company in its separate financial statements as of and for the year ended December 31, 2015.

(1)

Basis of consolidation

The consolidated financial statements are the financial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity. Subsidiaries are controlled by the Company. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Income and expense of a subsidiary acquired or disposed of during the year are included in the consolidated statement of comprehensive income (loss) from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those of the Company.

Transactions within the Company are eliminated during the consolidation.

Changes in the Company’s ownership interests in a subsidiary that do not result in the Company losing control over the subsidiary are accounted for as equity transactions. The carrying amounts of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Company.

When the Company loses control of a subsidiary, the income or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values and the related cumulative gain or loss has been recognized in other comprehensive income and accumulated in equity, the amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the Company had directly disposed of the relevant assets (i.e. reclassified to income or loss or transferred directly to retained earnings). The fair value of any investment retained in the former subsidiary at the date when control is lost is recognized as the fair value on initial recognition for subsequent accounting under K-IFRS 1039, ‘Financial Instruments: Recognition and Measurement’ or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(2)

Business combinations

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control.

The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Company, liabilities incurred by the Company to the former owners of the acquiree and the equity interests issued by the Company in exchange for control of the acquiree. Acquisition-related costs are generally recognized in income or loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date, except that:

•

deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognized and measured in accordance with K-IFRS 1012, ‘Income Taxes’ and K-IFRS 1019, ‘Employee Benefits’, respectively;

•

assets (or disposal groups) that are classified as held for sale in accordance with K-IFRS 1105, ‘Non-current Assets Held for Sale’ are measured in accordance with that standard.

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognized immediately in income or loss as a bargain purchase gain.

Non-controlling interest that is present on acquisition day and entitles the holder to a proportionate share of the entity’s net assets in an event of liquidation, may be initially measured either at fair value or at the non-controlling interest’s proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The choice of measurement can be elected on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in other K-IFRSs.

When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is re-measured at subsequent reporting dates in accordance with K-IFRS 1039, ‘Financial Instruments: Recognition and Measurement’, or with K-IFRS 1037, ‘Provisions’, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognized in income or loss.

When a business combination is achieved in stages, the Company’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date (i.e. the date when the Company obtains control) and the resulting gain or loss, if any, is recognized in income or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to income or loss where such treatment would be appropriate if that interest were disposed of.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(2)

Business combinations, continued

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.

The assets and liabilities acquired under business combinations under common control are recognized at the carrying amounts recognized previously in the consolidated financial statements of the ultimate parent. The difference between consideration transferred and carrying amounts of net assets acquired is recognized as part of share premium.

(3)

Investments in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting. If the investment is classified as held for sale, in which case it is accounted for in accordance with K-IFRS 1105, ‘Non-current Assets Held for Sale’, any retained portion of an investment in associates that has not been classified as held for sale shall be accounted for using the equity method until disposal of the portion that is classified as held for sale takes place. If the Company holds 20% ~ 50% of the voting power of the investee, it is presumed that the Company has significant influence.

After the disposal takes place, the Company shall account for any retained interest in associates in accordance with K-IFRS 1039, ‘Financial Instruments: Recognition and Measurement’ unless the retained interest continues to be an associates, in which case the entity uses the equity method.

Under the equity method, an investment in an associate is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the Company’s share of the income or loss and other comprehensive income of the associate. When the Company’s share of losses of an associate exceeds the Company’s interest in that associate (which includes any long-term interests that, in substance, form part of the Company’s net investment in the associate), the Company discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in income or loss. The requirements of K-IFRS 1039, ’Financial Instruments: Recognition and Measurement’, are applied to determine whether it is necessary to recognize any impairment loss with respect to the Company’s investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with K-IFRS 1036 ‘Impairment of Assets’ as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount, any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized in accordance with K-IFRS 1036 to the extent that the recoverable amount of the investment subsequently increases.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(3)

Investments in associates, continued

Upon disposal of an associate that results in the Company losing significant influence over that associate, any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset in accordance with K-IFRS 1036. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. In addition, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other comprehensive income by that associate would be reclassified to income or loss on the disposal of the related assets or liabilities, the Company reclassifies the gain or loss from equity to income or loss (as a reclassification adjustment) when it loses significant influence over that associate.

When the Company transacts with its associate, incomes and losses resulting from the transactions with the associate are recognized in the Company’s consolidated financial statements only to the extent of interests in the associate that are not related to the Company.

(4)

Joint arrangements

A joint arrangement is an arrangement of which two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Joint arrangements are classified into two types – joint operations and joint ventures. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint ventures) have rights to the net assets of the arrangement.

If the Company is a joint operator, the Company is to recognize and measure the assets and liabilities (and recognize the related revenues and expenses) in relation to its interest in the arrangement in accordance with relevant K-IFRS’ applicable to the particular assets, liabilities, revenues and expenses. If the joint arrangement is a joint venture, the Company is to account for that investment using the equity method accounting in accordance with K-IFRS 1028, ‘Investment in Associates and Joint Ventures’ (see note 3. (3)), except when the Company is applying K-IFRS 1105, ‘Non-current Assets Held for Sale’.

(5)

Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

When the Company is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Company will retain a non-controlling interest in its former subsidiary after the sale.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.

(6)

Goodwill

The Company measures goodwill which is acquired in a business combination at the amount recognized at the date on which it obtains control of the acquiree (acquisition date) less any accumulated impairment losses. Goodwill acquired in a business combination is allocated to each CGU that is expected to benefit from the synergies arising from the business acquired.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

The Company assesses at the end of each reporting period whether there is any indication that an asset may be impaired. An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(6)

Goodwill, continued

Any impairment identified at the CGU level will first reduce the carrying value of goodwill and then be used to reduce the carrying amount of the other assets in the CGU on a pro rata basis. Except for impairment losses in respect of goodwill which are never reversed, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

(7)

Revenue recognition

Revenue from the sale of goods, rendering of services or use of the Company assets is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates, which are recognized as a reduction of revenue. Revenue is recognized when the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the Company.

(i)

Sales of goods

The Korean government approves the rates charged to customers by the Company’s power transmission and distribution division. The Company’s utility rates are designed to recover the Company’s reasonable costs plus a fair investment return. The Company’s power generation rates are determined in the market.

The Company recognizes electricity sales revenue based on power sold (transferred to the customer) up to the reporting date. To determine the amount of power sold, the Company estimates daily power volumes of electricity for residential, commercial, general and etc. The differences between the current month’s estimated amount and actual (meter-read) amount, is adjusted for (trued-up) during the subsequent month.

(ii)

Sales of other services

Revenue from services rendered is recognized in profit or loss in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed or services performed to date as a percentage of total services to be performed or the proportion that costs incurred to date bear to the estimated total costs of the transaction or other methods that reliably measures the services performed.

(iii)

Dividend income and interest income

Dividend income is recognized in profit or loss on the date that the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

Interest income is recognized as it accrues in profit or loss, using the effective interest method. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

(iv)

Rental income

The Company’s policy for recognition of revenue from operating leases is described in note 3. (9) below.

(v)

Deferral of revenue – Transfer of Assets from Customers

The Company recovers a substantial amount of the cost related to its electric power distribution facilities from customers through the transfer of assets, while the remaining portion is recovered through electricity sales from such customers in the future. As such, the Company believes there exists a continued service obligation to the customers in accordance with K-IFRS 2118, ‘Transfer of Assets from Customers’, when the Company receives an item of property, equipment, or cash for constructing or acquiring an item of property or equipment, in exchange for supplying electricity to customers. The Company defers the amounts received, which are subsequently recognized as revenue over the estimated service period which does not exceed the transferred asset’s useful life.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(8)

Construction services revenue

The Company provides services related to the construction of power plants related to facilities of its customers, mostly in foreign countries.

When the outcome of a construction contract can be estimated reliably, revenue and costs are recognized based on the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized to the extent of contract costs incurred when it is probable the revenue will be realized. Contract costs are recognized as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately.

When contract costs incurred to date plus recognized income less recognized losses exceed progress billings, the surplus is shown as amounts due from customers for contract work. For contracts where progress billings exceed contract costs incurred to date plus recognized income less recognized losses, the surplus is shown as the amounts due to customers for contract work. Amounts received before the related work is performed are included in the consolidated statements of financial position, as a liability, as advances received. Amounts billed for work performed but not yet paid by the customer are included in the consolidated statements of financial position as accounts and other receivables.

(9)

Leases

The Company classifies and accounts for leases as either a finance or operating lease, depending on the terms. Leases where the Company assumes substantially all of the risks and rewards of ownership are classified as finance leases. All other leases are classified as operating leases.

(i)

The Company as lessor

Amounts due from lessees under finance leases are recognized as receivables at the amount of the Company’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Company’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term.

(ii)

The Company as lessee

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognized immediately in income or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Company’s general policy on borrowing costs. Contingent rentals are recognized as expenses in the periods in which they are incurred.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(9)

Leases, continued

Operating lease payments are recognized as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognized as a liability. The aggregate benefit of incentives is recognized as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(10)

Foreign currencies

Transactions in foreign currencies are translated to the respective functional currencies of the Company entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency using the reporting date’s exchange rate. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Exchange differences are recognized in profit or loss in the period in which they arise except for:

•

Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

•

Exchange differences on transactions entered into in order to hedge certain foreign currency risks (refer to note 3.(24) Derivative financial instruments, including hedge accounting); and

•

Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income and reclassified from equity to income or loss on disposal or partial disposal of the net investment.

For the purpose of presenting financial statements, the assets and liabilities of the Company’s foreign operations are expressed in Korean won using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity.

When a foreign operation is disposed of, the relevant amount in the translation is transferred to profit or loss as part of the profit or loss on disposal.

(11)

Borrowing costs

The Company capitalizes borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. Other borrowing costs are recognized in expense as incurred. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

All other borrowing costs are recognized in income or loss in the period in which they are incurred.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(12)

Government grants

Government grants are not recognized unless there is reasonable assurance that the Company will comply with the grant’s conditions and that the grant will be received.

Benefit from a government loan at a below-market interest rate is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

(i)

If the Company received grants related to assets

Government grants whose primary condition is that the Company purchase, construct or otherwise acquire long-term assets are deducted in calculating the carrying amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense.

(ii)

If the Company received grants related to income

Government grants which are intended to compensate the Company for expenses incurred are recognized as other income (government grants) in profit or loss over the periods in which the Company recognizes the related costs as expenses.

(13)

Employee benefits

When an employee has rendered service to the Company during a period, the Company recognizes the contribution payable to a defined contribution plan in exchange for that service as a liability (accrued expense).

For defined benefit pension plans and other post-employment benefits, the net periodic pension expense is actuarially determined by “Pension Actuarial System” developed by independent actuaries using the projected unit credit method. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related pension liability. However, if there is not a deep market, market yields on government bonds are used.

Net defined benefit liability’s measurement is composed of actuarial gains and losses, return on plan assets excluding net interest on net defined benefit liability, and any change in the effect of the asset ceiling, excluding net interest, which will immediately recognized in other comprehensive income. The actuarial gains or losses recognized in other comprehensive income which will not be reclassified into net profit or loss for later periods are immediately recognized in retained earnings. Past service cost will be recognized as expenses upon the earlier of the date of change or reduction to the plan, or the date of recognizing termination benefits.

The retirement benefit obligation recognized in the statement of financial position represents the present value of the defined benefit obligation as adjusted for unrecognized actuarial gains and losses and unrecognized past service cost, and as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to unrecognized actuarial losses and past service cost, plus the present value of available refunds and reductions in future contributions to the plan.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(14)

Income taxes

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

(i)

Current tax

Current tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the end of the reporting period and any adjustment to tax payable in respect of previous years. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit (tax loss) of future periods, and non-taxable or non-deductible items from the accounting profit.

(ii)

Deferred tax

Deferred tax is recognized, using the asset-liability method, in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. A deferred tax liability is recognized for all taxable temporary differences. A deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which they can be utilized. However, deferred tax is not recognized for the following temporary differences: taxable temporary differences arising on the initial recognition of goodwill, or the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit or loss nor taxable income.

The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets or deferred tax liabilities on investment properties measured at fair value, unless any contrary evidence exists, are measured using the assumption that the carrying amount of the property will be recovered entirely through sale.

The Company recognizes a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint ventures, except to the extent that the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The Company recognizes a deferred tax asset for all deductible temporary differences arising from investments in subsidiaries and associates, to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.

The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and reduces the carrying amount to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if there is a legally enforceable right to offset the related current tax liabilities and assets, and they relate to income taxes levied by the same tax authority and they intend to settle current tax liabilities and assets on a net basis.

(iii)

Current and deferred tax for the year

Current and deferred tax are recognized in income or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(15)

Property, plant and equipment

Property, plant and equipment are initially measured at cost and after initial recognition, are carried at cost less accumulated depreciation and accumulated impairment losses. The cost of property, plant and equipment includes expenditures arising directly from the construction or acquisition of the asset, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Subsequent costs are recognized in the carrying amount of property, plant and equipment at cost or, if appropriate, as separate items if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing are recognized in profit or loss as incurred.

Property, plant and equipment, except for land, are depreciated on a straight-line basis over estimated useful lives that appropriately reflect the pattern in which the asset’s future economic benefits are expected to be consumed. For loaded nuclear fuel related to long-term raw materials and spent nuclear fuels related to asset retirement costs, the Company uses the production method to measure and recognizes as expense the economic benefits of the assets.

The estimated useful lives of the Company’s property, plant and equipment are as follows:


		Useful lives (years)

Buildings		8 ~ 40
Structures		8 ~ 50
Machinery		6 ~ 32
Vehicles		4
Loaded heavy water		30
Asset retirement costs		18, 30, 40
Finance lease assets		20
Ships		9
Others		4 ~ 9

A component that is significant compared to the total cost of property, plant and equipment is depreciated over its separate useful life. Depreciation methods, useful lives and residual values are reviewed at the end of each reporting date and adjusted, if appropriate.

Property, plant and equipment are derecognized on disposal, or when no future economic benefits are expected from its use or disposal. Gains or losses arising from derecognition of a property, plant and equipment, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in income or loss when the asset is derecognized.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(16)

Investment property

Property held for the purpose of earning rentals or benefiting from capital appreciation is classified as investment property. Investment property is initially measured at its cost. Transaction costs are included in the initial measurement. Subsequently, investment property is carried at depreciated cost less any accumulated impairment losses.

Subsequent costs are recognized in the carrying amount of investment property at cost or, if appropriate, as separate items if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing are recognized in profit or loss as incurred.

Investment property except for land, are depreciated on a straight-line basis over 8 ~ 40 years as estimated useful lives.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in income or loss in the period in which the property is derecognized.

(17)

Intangible assets

(i)

Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

(ii)

Research and development

Expenditure on research activities is recognized as an expense in the period in which it is incurred. An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognized if, and only if, all of the following have been demonstrated:

•

The technical feasibility of completing the intangible asset so that it will be available for use or sale;

•

The intention to complete the intangible asset and use or sell it;

•

The ability to use or sell the intangible asset;

•

How the intangible asset will generate probable future economic benefits;

•

The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

•

The ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognized for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. When the development expenditure does not meet the criteria listed above, an internally-generated intangible asset cannot be recognized and the expenditure is recognized in income or loss in the period in which it is incurred.

Internally-generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(17)

Intangible assets, continued

The estimated useful lives and amortization methods of the Company’s intangible assets with finite useful lives are as follows:


	Useful lives (years)	Amortization methods

Usage rights for donated assets	4 ~ 30	Straight
Software	4, 5	Straight
Industrial rights	5, 10	Straight
Development expenses	5	Straight
Others	4~20, 50	Straight
Mining right	—	Unit of production

(iii)

Intangible assets acquired in a business combination

Intangible assets that are acquired in a business combination are recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

(iv)

Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from its use or disposal. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognized in income or loss when the asset is derecognized.

(18)

Greenhouse gas emissions rights (allowances) and obligations

With Enforcement of Allocation and Trading of Greenhouse Gas Emissions Allowances, the Company applies the following accounting policies for emissions rights and obligations.

(i)

Emissions rights

Greenhouse gas emissions rights consist of the allowances received free of charge from the government and the ones purchased. The cost of the emissions rights includes expenditures arising directly from the acquisition and any other costs incurred during normal course of the acquisition.

Emissions rights are held by the Company to fulfill the legal obligation and recorded as intangible assets. To the extent that the portion to be submitted to the government within one year from the end of reporting period, the emissions rights are classified as current assets Emissions rights recorded as intangible assets are initially measured at cost and substantially remeasured at cost less accumulated impairment losses.

Greenhouse gas emission rights are derecognized on submission to the government or when no future economic benefits are expected from its use or disposal.

(ii)

Emissions obligations

Emissions obligations are the Company’s present legal obligation to submit the emissions allowances to the government and recognized when an outflow of resources is probable and a reliable estimate can be made of the amount of the obligation. Emissions obligations are measured as the sum of the carrying amount of the allocated rights that will be submitted to the government and the best estimate of expenditure required to settle the obligation at the end of the reporting period for any excess emission.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(19)

Impairment of non-financial assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets with definite useful lives to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or a cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or the cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, to the extent the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

(20)

Inventories

Inventories are measured at the lower of cost and net realizable value. Cost of inventories, except for those in transit, are measured under the weighted average method and consists of the purchase price, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realizable value, are recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs.

(21)

Provisions

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The risks and uncertainties that inevitably surround many events and circumstances are taken into account in reaching the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(21)

Provisions, continued

Where some or all of the expenditures required to settle a provision are expected to be reimbursed by another party, the reimbursement shall be recognized when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimates. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

(i)

Provision for employment benefits

The Company determines the provision for employment benefits as the incentive payments based on the results of the individual performance evaluation or management assessment.

(ii)

Provision for decommissioning costs of nuclear power plants

The Company records the fair value of estimated decommissioning costs as a liability in the period in which the Company incurs a legal obligation associated with retirement of long-lived assets that result from acquisition, construction, development and/or normal use of the assets. Accretion expense consists of period-to-period changes in the liability for decommissioning costs resulting from the passage of time and revisions to either the timing or the amount of the original estimate of undiscounted cash flows.

(iii)

Provision for disposal of spent nuclear fuel

Under the Radioactive Waste Management Act, the Company is levied to pay the spent nuclear fuel fund for the management of spent nuclear fuel. The Company recognizes the provision of present value of the payments.

(iv)

Provision for low and intermediate radioactive wastes

Under the Radioactive Waste Management Act, the Company recognizes the provision for the disposal of low and intermediate radioactive wastes in best estimate of the expenditure required to settle the present obligation.

(v)

Provision for Polychlorinated Biphenyls (“PCBs”)

Under the regulation of Persistent Organic Pollutants Management Act, enacted in 2007, the Company is required to remove PCBs, a toxin, from the insulating oil of its transformers by 2025. As a result of the enactments, the Company is required to inspect the PCBs contents of transformers and dispose of PCBs in excess of safety standards under the legally settled procedures. The Company’s estimates and assumptions used to determine fair value can be affected by many factors, such as the estimated costs of inspection and disposal, inflation rate, discount rate, regulations and the general economy.

(vi)

Provisions for power plant regional support program

Power plant regional support programs consist of scholarship programs to local students, local economy support programs, local culture support programs, environment development programs, and local welfare programs. The Company recognizes the provision in relation to power plant regional support program.

(vii)

Provisions for transmission and transformation facilities-neighboring areas support program

The Company has present obligation to conduct transmission and transformation facilities-neighboring areas support program under Act on assistance to transmission and transformation facilities-neighboring areas. The Company recognizes the provision of estimated amount to fulfill the obligation.

(viii)

Renewable Portfolio Standard (“RPS”) provisions

RPS program is recognized for the governmental regulations to require the production of energies from renewable energy sources such as solar, wind and biomass.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(22)

Non-derivative financial assets

The Company recognizes and measures non-derivative financial assets by the following four categories: financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets. The Company recognizes financial assets in the statement of financial position when the Company becomes a party to the contractual provisions of the instrument. Upon initial recognition, non-derivative financial assets are measured at their fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the asset’s acquisition or issuance.

A regular way purchase or sale of financial assets shall be recognized and derecognized, as applicable, using trade date accounting or settlement date accounting. A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

(i)

Effective interest method

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Income is recognized on an effective interest basis for debt instruments other than those financial assets classified as financial assets at fair value through profit or loss.

(ii)

Financial assets at fair value through profit or loss (FVTPL)

A financial asset is classified as financial assets are classified at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Upon initial recognition, transaction costs are recognized in profit or loss when incurred. A financial assets its acquired principally for the purpose of selling it in the near term are classified as a short-term financial assets held for trading and also all the derivatives including an embedded derivate that is not designated and effective as a hedging instrument are classified at the short-term trading financial asset as well. Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss.

A financial asset is classified as held for trading if:

•

It has been acquired principally for the purpose of selling it in the near term; or

•

On initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short term profit taking; or

•

It is derivative, including an embedded derivative that is not designated and effective as a hedging instrument.

A financial asset other than a financial asset held for trading may be designated as at financial assets at fair value through profit or loss upon initial recognition if:

•

Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

•

The financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its’ performance is evaluated on a fair value basis in accordance with the Company’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

•

It forms a part of a contract containing one or more embedded derivatives, and with K-IFRS 1039, ‘Financial Instruments: Recognition and Measurement’, permits the entire combined contract (asset or liability) to be designated as at financial assets at fair value through profit or loss.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(22)

Non-derivative financial assets, continued

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on re-measurement recognized in income or loss. The net gain or loss recognized in income or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘finance income and finance expenses’ line item in the consolidated statement of comprehensive income.

(iii)

Held-to-maturity investments

A non-derivative financial asset with a fixed or determinable payment and fixed maturity, for which the Company has the positive intention and ability to hold to maturity, are classified as held-to-maturity investments. Subsequent to initial recognition, held-to-maturity investments are measured at amortized cost using the effective interest method.

(iv)

Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified as financial assets at fair value through profit or loss, held-to-maturity investments or loans and receivables.

Gains and losses arising from changes in fair value are recognized in other comprehensive income and accumulated in the valuation reserve. However, impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets are recognized in income or loss. Unquoted equity investments which are not traded in an active market, whose fair value cannot be measured reliably are carried at cost.

When a financial asset is derecognized or impairment losses are recognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.

Dividends on an available-for-sale equity instrument are recognized in profit or loss when the Company’s right to receive payment is established.

The fair value of available-for-sale monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that are recognized in income or loss are determined based on the amortized cost of the monetary asset. Other foreign exchange gains and losses are recognized in other comprehensive income.

(v)

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method except for loans and receivables of which the effect of discounting is immaterial.

(vi)

Impairment of financial assets

Financial assets, other than those at financial assets at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For listed and unlisted equity investments classified as available-for-sale financial asset, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment in addition to the criteria mentioned below.

For all other financial assets, objective evidence of impairment could include:

•

Significant financial difficulty of the issuer or counterparty; or

•

Breach of contract, such as a default or delinquency in interest or principal payments, or

•

It becoming probable that the borrower will enter bankruptcy or financial re-organization; or

•

The disappearance of an active market for that financial asset because of financial difficulties.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(22)

Non-derivative financial assets, continued

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and, as well as observable changes in national or local economic conditions that correlate with default on receivables.

For financial assets recorded at amortized cost, the amount of the impairment loss recognized is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in income or loss.

When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to income or loss in the period.

For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

In respect of available-for-sale equity securities, impairment losses previously recognized in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. In respect of available-for-sale debt securities, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

(vii)

De-recognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset or liability. If the Company retains substantially all the risks and rewards of ownership of the transferred financial assets, the Company continues to recognize the transferred financial assets and recognizes financial liabilities for the consideration received.

On de-recognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in income or loss.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(22)

Non-derivative financial assets, continued

On de-recognition of a financial asset other than in its entirety (e.g. when the Company retains an option to repurchase part of a transferred asset), the Company allocates the previous carrying amount of the financial asset between the part it continues to recognize under continuing involvement, and the part it no longer recognizes on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is recognized in income or loss. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values of those parts.

(23)

Non-derivative financial liabilities and equity instruments issued by the Company

(i)

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

(ii)

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

Repurchase of the Company’s own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in income or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

(iii)

Financial liabilities

Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments. Financial liabilities are initially measured at fair value. Transaction cost that are directly attributable to the issue of financial liabilities are added to or deducted from the fair value of the financial liabilities, as appropriate, on initial recognition. Transaction cost directly attributable to acquisition of financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

(iv)

Financial liabilities at fair value through profit or loss (FVTPL)

Financial liabilities are classified as at financial liabilities at fair value through profit or loss when the financial liability is either held for trading or it is designated as financial liabilities at fair value through profit or loss.

A financial liability is classified as held for trading if:

•

It has been acquired principally for the purpose of repurchasing it in the near term; or

•

On initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

•

It is a derivative that is not designated and effective as a hedging instrument.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(23)

Non-derivative financial liabilities and equity instruments issued by the Company, continued

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

•

Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

•

The financial liability forms part of a Company of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

•

It forms part of a contract containing one or more embedded derivatives, and K-IFRS 1039, ‘Financial Instruments: Recognition and Measurement’, permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains or losses arising on re-measurement recognized in income or loss. The net gain or loss recognized in income or loss incorporates any interest paid on the financial liability and is included in ‘finance income and finance expenses’.

(v)

Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis. The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

(vi)

Financial guarantee contract liabilities

Financial guarantee contract liabilities are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of: (a) the amount of the obligation under the contract, as determined in accordance with K-IFRS 1037, ‘Provisions’, Contingent Liabilities and Contingent Assets; or (b) the amount initially recognized less, cumulative amortization recognized in accordance with K-IFRS 1018, ‘Revenue’.

(vii)

De-recognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in income or loss.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(24)

Derivative financial instruments, including hedge accounting

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risk, including foreign exchange forward contracts, interest rate swaps and cross currency swaps and others.

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value.

The resulting gain or loss is recognized in income or loss immediately unless the derivative is designated and effective as a hedging instrument, in such case the timing of the recognition in income or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognized as a financial asset; a derivative with a negative fair value is recognized as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

(i)

Separable embedded derivatives

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and when the host contracts are not measured at FVTPL.

An embedded derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the hybrid instrument to which the embedded derivative is part of, is more than 12 months and it is not expected to be realized or settled within 12 months. All other embedded derivatives are presented as current assets or current liabilities.

(ii)

Hedge accounting

The Company designates certain hedging instruments, which include derivatives, embedded derivatives and non-derivatives in respect of foreign currency risk, as either fair value hedges or cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.

(iii)

Fair value hedges

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in income or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The changes in the fair value of the hedging instrument and the change in the hedged item attributable to the hedged risk relating to the hedged items are recognized in the consolidated statements of comprehensive income.

Hedge accounting is discontinued when the Company revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortized as income or loss as of that date.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

3.	Significant Accounting Policies, Continued

(24)

Derivative financial instruments, including hedge accounting, continued

(iv)

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income. The gain or loss relating to the ineffective portion is recognized immediately in income or loss, and is included in the ‘finance income and expense’.

Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to income or loss in the periods when the hedged item is recognized in income or loss, in the same line of the consolidated statement of comprehensive income as the recognized hedged item. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously accumulated in equity are transferred from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability.

Hedge accounting is discontinued when the Company revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or it no longer qualifies for hedge accounting. Any gain or loss accumulated in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in income or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in income or loss.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

4.	Segment, Geographic and Other Information

(1)

Segment determination and explanation of the measurements

The Company’s operating segments are its business components that generate discrete financial information that is reported to and regularly reviewed by the Company’s the chief operating decision maker, the Chief Executive Officer, for the purpose of resource allocation and assessment of segment performance. The Company’s reportable segments are ‘Transmission and distribution’, ‘Electric power generation (Nuclear)’, ‘Electric power generation (Non-nuclear)’, ‘Plant maintenance & engineering service’ and ‘Others’; others mainly represent the business unit that manages the Company’s foreign operations.

Segment operating profit (loss) is determined the same way that consolidated operating profit is determined under K-IFRS without any adjustment for corporate allocations. The accounting policies used by each segment are consistent with the accounting policies used in the preparation of the consolidated financial statements. Segment assets and liabilities are determined based on separate financial statements of the entities instead of on a consolidated basis. There are various transactions between the reportable segments, including sales of property, plant and equipment and so on, that are conducted on an arms-length basis at market prices that would be applicable to an independent third-party. For subsidiaries which are in a different segment from that of its immediate parent company, their carrying amount in separate financial statements is eliminated in the consolidating adjustments in the tables below. In addition, consolidation adjustments in the table below include adjustments of the amount of investment in associates and joint ventures from the cost basis amount reflected in segment assets to that determined using equity method in the consolidated financial statements.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

4.	Segment, Geographic and Other Information, Continued

(2)

Financial information of the segments for the three-month periods ended March 31, 2016 and 2015, respectively, are as follows:


In millions of won
March 31, 2016
Segment	Total segment revenue			Intersegment revenue			Revenue from external customers		Operating Profit (loss)			Depreciation and amortization			Interest income			Interest expense			Profit related associates, joint ventures and subsidiaries

Transmission and distribution	W	15,566,139			279,426			15,286,713		288,823			749,643			32,694			237,527			146,111
Electric power generation (Nuclear)		3,309,676			3,304,900			4,776		1,683,326			787,288			8,198			118,521			(180	)
Electric power generation (Non-nuclear)		6,235,483			6,033,611			201,872		1,690,980			602,809			8,468			83,916			13,735
Plant maintenance & engineering service		561,254			482,035			79,219		57,902			24,682			3,373			490			(745	)
Others		138,202			25,455			112,747		23,501			8,148			33,515			23,763			—
Consolidation adjustments		(10,125,427	)		(10,125,427	)		—		(139,185	)		(10,232	)		(5,929	)		(5,982	)		—


	W	15,685,327			—			15,685,327		3,605,347			2,162,338			80,319			458,235			158,921

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

4.	Segment, Geographic and Other Information, Continued

(2)

Financial information of the segments for the three-month periods ended March 31, 2016 and 2015, respectively, are as follows, continued:


In millions of won
March 31, 2015
Segment	Total segment revenue			Intersegment revenue			Revenue from external customers		Operating profit (loss)			Depreciation and amortization			Interest income			Interest expense			Profit related associates, joint ventures and subsidiaries

Transmission and distribution	W	14,936,679			297,155			14,639,524		(194,166	)		704,160			10,570			302,116			170,032
Electric power generation (Nuclear)		2,736,160			2,733,949			2,211		1,195,543			737,316			7,008			149,586			(658	)
Electric power generation (Non-nuclear)		6,623,817			6,413,081			210,736		1,217,388			561,926			5,669			82,329			22,375
Plant maintenance & engineering service		553,716			414,213			139,503		56,615			19,898			3,024			39			800
Others		151,629			19,744			131,885		14,501			7,043			25,522			20,509			—
Consolidation adjustments		(9,878,142	)		(9,878,142	)		—		(50,015	)		(9,404	)		(2,300	)		(1,923	)		—


	W	15,123,859			—			15,123,859		2,239,866			2,020,939			49,493			552,656			192,549

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

4.	Segment, Geographic and Other Information, Continued

(3)

Information related to segment assets and segment liabilities as of and for the three-month period ended March 31, 2016 and as of and for the year ended December 31, 2015 are as follows:


In millions of won
March 31, 2016
Segment	Segment assets			Investments in associates and joint ventures		Acquisition of non-current assets		Segment liabilities

Transmission and distribution	W	105,847,101			4,473,337		2,205,380		53,628,994
Electric power generation (Nuclear)		52,449,434			16,204		497,957		28,243,723
Electric power generation (Non-nuclear)		45,604,103			1,318,073		806,166		25,786,733
Plant maintenance & engineering service		3,039,185			52,279		37,522		1,278,873
Others		5,886,185			—		32,638		2,316,351
Consolidation adjustments		(36,032,729	)		—		35,084		(2,439,556	)


Consolidated totals	W	176,793,279			5,859,893		3,614,747		108,815,118


In millions of won
December 31, 2015
Segment	Segment assets			Investments in associates and joint ventures		Acquisition of non-current assets		Segment liabilities

Transmission and distribution	W	106,306,250			4,338,888		5,885,919		53,125,589
Electric power generation (Nuclear)		51,043,890			16,385		2,647,304		27,386,113
Electric power generation (Non-nuclear)		44,453,545			1,283,432		5,063,195		25,587,071
Plant maintenance & engineering service		2,990,862			54,825		249,627		1,172,351
Others		5,962,546			—		144,846		2,312,658
Consolidation adjustments		(35,499,734	)		—		146,942		(2,268,898	)


Consolidated totals	W	175,257,359			5,693,530		14,137,833		107,314,884

(4)

Geographic information

The following information on revenue from external customers and non-current assets is determined by the location of the customers and the assets:


In millions of won
	Revenue from external customers				*Non-current assets (2)**
Geographical unit	March 31, 2016		March 31, 2015		March 31, 2016		December 31, 2015

Domestic	W	14,581,263		14,307,620		145,762,660		143,788,043
Overseas (*1)		1,104,064		816,239		4,318,360		4,526,395


	W	15,685,327		15,123,859		150,081,020		148,314,438

(*1)	Middle East and other Asian countries make up the majority of overseas revenue and non-current assets.

(*2)	Amount excludes financial assets and deferred tax assets.

(5)

Information on significant customers

There is no individual customer comprising more than 10% of the Company’s revenue for the three-month periods ended March 31, 2016 and 2015.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

5.	Classification of Financial Instruments

(1)

Classification of financial assets as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Financial assets at fair value through profit or loss		Loans and receivables		Available- for-sale financial assets		Held-to- maturity investments		Derivative assets (using hedge accounting)		Total
Current assets
Cash and cash equivalents	W	—		5,418,476		—		—		—		5,418,476
Current financial assets

Held-to-maturity investments		—		—		—		418		—		418
Derivative assets		787		—		—		—		80,678		81,465
Other financial assets		—		3,789,805		—		—		—		3,789,805

Trade and other receivables		—		6,770,201		—		—		—		6,770,201

		787		15,978,482		—		418		80,678		16,060,365

Non-current assets

Non-current financial assets

Available-for-sale financial assets		—		—		626,183		—		—		626,183

Held-to-maturity investments		—		—		—		3,217		—		3,217
Derivative assets		205,381		—		—		—		162,439		367,820
Other financial assets		—		1,551,494		—		—		—		1,551,494

Trade and other receivables		—		1,817,616		—		—		—		1,817,616

		205,381		3,369,110		626,183		3,217		162,439		4,366,330


	W	206,168		19,347,592		626,183		3,635		243,117		20,426,695


In millions of won	December 31, 2015
	Financial assets at fair value through profit or loss		Loans and receivables		Available- for-sale financial assets		Held-to- maturity investments		Derivative assets (using hedge accounting)		Total
Current assets
Cash and cash equivalents	W	—		3,783,065		—		—		—		3,783,065
Current financial assets

Held-to-maturity investments		—		—		—		381		—		381
Derivative assets		1,498		—		—		—		95,759		97,257
Other financial assets		—		5,237,983		—		—		—		5,237,983

Trade and other receivables		—		7,473,548		—		—		—		7,473,548

		1,498		16,494,596		—		381		95,759		16,592,234

Non-current assets

Non-current financial assets

Available-for-sale financial assets		—		—		584,479		—		—		584,479

Held-to-maturity investments		—		—		—		3,242		—		3,242
Derivative assets		253,510		—		—		—		266,383		519,893
Other financial assets		—		1,387,940		—		—		—		1,387,940

Trade and other receivables		—		1,798,419		—		—		—		1,798,419

		253,510		3,186,359		584,479		3,242		266,383		4,293,973


	W	255,008		19,680,955		584,479		3,623		362,142		20,886,207

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

5.	Classification of Financial Instruments, Continued

(2)

Classification of financial liabilities as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Financial liabilities at fair value through profit or loss		Financial liabilities recognized at amortized cost		Derivative liabilities (using hedge accounting)		Total
Current liabilities
Borrowings	W	—		827,983		—		827,983
Debt securities		—		7,898,037		—		7,898,037
Derivative liabilities		14,152		—		890		15,042
Trade and other payables		—		6,436,194		—		6,436,194

		14,152		15,162,214		890		15,177,256

Non-current liabilities
Borrowings		—		1,683,218		—		1,683,218
Debt securities		—		46,542,092		—		46,542,092
Derivative liabilities		32,780		—		148,048		180,828
Trade and other payables		—		3,678,377		—		3,678,377

		32,780		51,903,687		148,048		52,084,515


	W	46,932		67,065,901		148,938		67,261,771


In millions of won	December 31, 2015
	Financial liabilities at fair value through profit or loss		Financial liabilities recognized at amortized cost		Derivative liabilities (using hedge accounting)		Total
Current liabilities
Borrowings	W	—		1,144,027		—		1,144,027
Debt securities		—		6,702,926		—		6,702,926
Derivative liabilities		9,487		—		758		10,245
Trade and other payables		—		4,735,697		—		4,735,697

		9,487		12,582,650		758		12,592,895

Non-current liabilities
Borrowings		—		1,932,259		—		1,932,259
Debt securities		—		48,974,287		—		48,974,287
Derivative liabilities		39,524		—		116,741		156,265
Trade and other payables		—		3,718,435		—		3,718,435

		39,524		54,624,981		116,741		54,781,246


	W	49,011		67,207,631		117,499		67,374,141

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

5.	Classification of Financial Instruments, Continued

(3)

Classification of comprehensive income from financial instruments for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won		March 31, 2016			March 31, 2015

Cash and cash equivalents	Interest income	W	20,683			11,890
Available-for-sale financial assets	Dividends income		9,367			5,456
	Impairment loss on available-for-sale financial assets		—			(5,821	)
	Gain (loss) on disposal of available-for-sale financial assets		1,480			(975	)
	Interest income		—			29
Held-to-maturity investments	Interest income		25			25
Loans and receivables	Interest income		6,938			6,775
Trade and other receivables	Interest income		31,061			24,981
Short-term financial instruments	Interest income		19,051			2,864
Long-term financial instruments	Interest income		2,561			2,929
Financial assets at fair value through profit or loss	Gain (loss) on valuation of derivatives		(47,667	)		30,365
Financial assets at fair value through profit or loss	Gain (loss) on transaction of derivatives		(1,832	)		1,666
Derivative assets (using hedge accounting)	Gain (loss) on valuation of derivatives (profit or loss)		(46,054	)		14,199
Derivative assets (using hedge accounting)	Gain (loss) on valuation of derivatives (equity, before tax) (*)		(12,036	)		13,010
	Gain on transaction of derivatives		2,802			1,065
Financial liabilities carried at amortized cost	Interest expense of borrowings and debt securities		(321,009	)		(379,204	)
	Interest expense of trade and other payables		(16,403	)		(20,909	)
	Interest expense of others		(120,823	)		(152,543	)
	Gain (loss) on foreign currency transactions and translations		116,237			(60,337	)
Financial liabilities at fair value through profit or loss	Gain on valuation of derivatives		7,082			18,342
Financial liabilities at fair value through profit or loss	Gain (loss) on transaction of derivatives		2,131			(1,785	)
Derivative liabilities (using hedge accounting)	Gain (loss) on valuation of derivatives (profit or loss)		(40,778	)		1,857
	Gain (loss) on valuation of derivatives (equity, before tax) (*)		(10,235	)		13,737
	Loss on transaction of derivatives		—			(3,400	)

(*)	Items are included in other comprehensive income or loss. All other income and gain amounts listed above are included in finance income, and all expense and loss amounts listed above are included in finance expenses in the consolidated interim statements of comprehensive income.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

6.	Restricted Deposits

Restricted deposits as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won		March 31, 2016		December 31, 2015

Cash and cash equivalents	Escrow accounts	W	112		4,828
	Deposits for government project		5,643		5,839
	Collateral provided for borrowings		28,770		6,839
	Collateral provided for lawsuit		760		641
	Deposits for transmission regional support program		3,212		204
	Pledge		—		740
Short-term financial instruments	Restriction on withdrawal related to ‘win-win growth program’ for small and medium enterprises		18,000		18,000
Long-term financial instruments	Guarantee deposits for checking account		2		2
	Guarantee deposits for banking accounts at oversea branches		327		333
	Decommissioning costs of nuclear power plants		652,700		652,700
	Collateral provided for borrowings		—		20
	Funds for developing small and medium enterprises (*1)		100,000		100,000


		W	809,526		790,146

(*1)	Deposits for small and medium enterprise at IBK for construction of Bitgaram Energy Valley and support for the businesses as of March 31, 2016.

7.	Cash and Cash Equivalents

Cash and cash equivalents as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016		December 31, 2015

Cash	W	122		109
Other demand deposit		871,720		1,309,396
Short-term deposits classified as cash equivalents		1,107,919		374,575
Short-term investments classified as cash equivalents		3,438,715		2,098,985


	W	5,418,476		3,783,065

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

8.	Trade and Other Receivables

(1)

Trade and other receivables as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets
Trade receivables	W	6,204,752		(54,861	)		(5	)		6,149,886
Other receivables		673,502		(51,145	)		(2,042	)		620,315

		6,878,254		(106,006	)		(2,047	)		6,770,201

Non-current assets
Trade receivables		437,933		—			—			437,933
Other receivables		1,425,607		(39,481	)		(6,443	)		1,379,683

		1,863,540		(39,481	)		(6,443	)		1,817,616


	W	8,741,794		(145,487	)		(8,490	)		8,587,817


In millions of won	December 31, 2015
	Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets
Trade receivables	W	6,862,762		(51,956	)		(14	)		6,810,792
Other receivables		718,717		(52,778	)		(3,183	)		662,756

		7,581,479		(104,734	)		(3,197	)		7,473,548

Non-current assets
Trade receivables		447,010		—			—			447,010
Other receivables		1,396,107		(38,968	)		(5,730	)		1,351,409

		1,843,117		(38,968	)		(5,730	)		1,798,419


	W	9,424,596		(143,702	)		(8,927	)		9,271,967

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

8.	Trade and Other Receivables, Continued

(2)

Other receivables as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets
Non-trade receivables	W	360,135		(51,145	)		—			308,990
Accrued income		65,308		—			—			65,308
Deposits		184,935		—			(2,042	)		182,893
Finance lease receivables		12,008		—			—			12,008
Others		51,116		—			—			51,116

		673,502		(51,145	)		(2,042	)		620,315

Non-current assets
Non-trade receivables		84,860		(31,943	)		—			52,917
Accrued income		1,389		—			—			1,389
Deposits		310,478		—			(6,443	)		304,035
Finance lease receivables		925,232		—			—			925,232
Others		103,648		(7,538	)		—			96,110

		1,425,607		(39,481	)		(6,443	)		1,379,683


	W	2,099,109		(90,626	)		(8,485	)		1,999,998


In millions of won	December 31, 2015
	Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets
Non-trade receivables	W	330,669		(52,778	)		—			277,891
Accrued income		88,256		—			—			88,256
Deposits		235,745		—			(3,183	)		232,562
Finance lease receivables		12,098		—			—			12,098
Others		51,949		—			—			51,949

		718,717		(52,778	)		(3,183	)		662,756

Non-current assets
Non-trade receivables		93,782		(31,829	)		—			61,953
Accrued income		582		—			—			582
Deposits		256,745		—			(5,730	)		251,015
Finance lease receivables		941,710		—			—			941,710
Others		103,288		(7,139	)		—			96,149

		1,396,107		(38,968	)		(5,730	)		1,351,409


	W	2,114,824		(91,746	)		(8,913	)		2,014,165

Trade and other receivables are classified as loans and receivables, and are measured using the effective interest method. No interest is accrued for trade receivables related to electricity for the duration between the billing date and the payment due dates. But once trade receivables are overdue, the Company imposes a monthly interest rate of 2.0% on the overdue trade receivables. The Company holds deposits of three months’ expected electricity usage for customers requesting temporary usage and customers with past defaulted payments.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

8.	Trade and Other Receivables, Continued

(3)

Aging analysis of trade receivables as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015
Trade receivables: (not overdue, not impaired)	W	6,498,505			7,198,403

Trade receivables: (overdue, not impaired)		1,436			891

Less than 60 days		1,436			891

Trade receivables: (impairment reviewed)		142,744			110,478

60 ~ 90 days		36,341			31,973
90 ~ 120 days		34,167			11,010
120 days ~ 1 year		32,734			35,097
Over 1 year		39,502			32,398

		6,642,685			7,309,772

Less allowance for doubtful accounts		(54,861	)		(51,956	)
Less present value discount		(5	)		(14	)


	W	6,587,819			7,257,802

The Company assesses at the end of each reporting period whether there is any objective evidence that trade receivables are impaired, and provides allowances for doubtful accounts which includes impairment for trade receivables that are individually significant. The Company considers receivables as overdue if the receivables are outstanding 60 days after the maturity and sets an allowance based on past experience of collection.

(4)

Aging analysis of other receivables as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015
Other receivables: (not overdue, not impaired)	W	1,868,922			1,918,132

Other receivables: (overdue, not impaired)		72,835			20,249

Less than 60 days		72,835			20,249

Other receivables: (impairment reviewed)		157,352			176,443

60 ~ 90 days		2,747			2,409
90 ~ 120 days		8,792			10,097
120 days ~ 1 year		36,113			21,433
Over 1 year		109,700			142,504

		2,099,109			2,114,824

Less allowance for doubtful accounts		(90,626	)		(91,746	)
Less present value discount		(8,485	)		(8,913	)


	W	1,999,998			2,014,165

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

8.	Trade and Other Receivables, Continued

(5)

Changes in the allowance for doubtful accounts for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016						December 31, 2015
	Trade receivables			Other receivables			Trade receivables			Other receivables

Beginning balance	W	51,956			91,746			80,644			67,932
Bad debt expense		5,538			238			1,308			18,473
Write-off		(2,060	)		(154	)		(28,978	)		(888	)
Reversal		(500)			(987	)		(1,018	)		(413	)
Others		(73	)		(217	)		—			6,642


Ending balance	W	54,861			90,626			51,956			91,746

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets

(1)

Changes in available-for-sale financial assets for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Beginning balance		Acquisition		Disposal			Valuation			Impairment		Others			Ending Balance
Listed:
Korea District Heating Corp.	W	130,410		—		—			30,791			—		—			161,201
Kwanglim Co., Ltd. (*1)		262		—		(214	)		598			—		(646	)		—
Ssangyong Motor Co., Ltd.		299		—		—			20			—		—			319
Sungjee Construction. Co., Ltd.		5		—		—			—			—		—			5
Korea Line Corp.		—		—		—			—			—		—			—
Namkwang Engineering & Construction Co., Ltd.		1		—		—			—			—		—			1
Pumyang Construction Co., Ltd.		—		—		—			—			—		—			—
ELCOMTEC Co., Ltd.		53		—		—			16			—		—			69
PAN ocean Co., Ltd.		6		—		—			—			—		—			6
Borneo International Furniture Co., Ltd.		103		—		—			—			—		—			103
TONGYANG Inc. (*1)		217		—		(45	)		25			—		(197	)		—
TONGYANG networks Inc. (*1)		6		—		(3	)		—			—		(3	)		—
Nexolon Co., Ltd. (*1)		3,196		—		(3,138	)		569			—		(627	)		—
PT Adaro Energy Tbk		21,012		—		—			5,892			—		—			26,904
Energy Fuels Inc.		5,926		—		—			(1,757	)		—		216			4,385
Cockatoo Coal Limited		42		—		—			—			—		1			43
Denison Mines Corp.		34,457		—		—			1,531			—		1,864			37,852
Fission 3.0		30		—		—			(7	)		—		2			25
Fission Uranium Corp.		554		—		—			(112	)		—		28			470

		196,579		—		(3,400	)		37,566			—		638			231,383

Unlisted:
K&C - Gyeongnam youth job creation Investment Fund		1,207		—		—			—			—		—			1,207
Korea investment - KoreaEXIM Bank CERs Private Special Asset Investment Trust I		571		—		—			—			—		—			571
Troika Overseas Resource Development Private Equity Firm		1,553		—		—			—			—		—			1,553
IBK-AUCTUS Green Growth Private Equity firm (*1)		855		—		(621	)		—			—		—			234
Global Dynasty Overseas Resource Development Private Equity Firm		2,233		—		—			—			—		—			2,233
Intellectual Discovery, Ltd.		1,375		—		—			—			—		—			1,375
Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1 (*1)		1,069		3,685		(323	)		—			—		—			4,431
Construction Guarantee		805		—		—			(6	)		—		—			799
Plant & Mechanical Contractors Financial Cooperative of Korea		36		—		—			—			—		—			36
Fire Guarantee		20		—		—			—			—		—			20
Korea Software Financial Cooperative		301		—		—			—			—		—			301
Engineering Financial Cooperative		60		—		—			—			—		—			60
Electric Contractors Financial Cooperative		152		—		—			—			—		—			152
Korea Specialty Contractor Financial Cooperative		417		—		—			—			—		—			417
Information & Communication Financial Cooperative		10		—		—			—			—		—			10
Korea Electric Engineers Association		40		—		—			—			—		—			40
Hwan Young Steel Co., Ltd.		97		—		—			—			—		—			97
Woobang ENC Co., Ltd		22		—		—			—			—		—			22
Dongnam Co., Ltd.		72		—		—			—			—		—			72
SAMBO AUTO. Co., Ltd.		38		—		—			—			—		—			38
Mobo Co., Ltd.		14		—		—			—			—		—			14
Poonglim Industrial Co., Ltd.		93		—		—			—			—		—			93

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

(1)

Changes in available-for-sale financial assets for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows, continued:


In millions of won	March 31, 2016
	Beginning balance		Acquisition		Disposal		Valuation		Impairment		Others		Ending Balance

HANKOOK Silicon Co., Ltd.	W	7,513		—		—		—		—		—		7,513
Kun Young Engineering & Construction Co., Ltd.		5		—		—		—		—		—		5
Pumyang Asset Management Co., Ltd.		3		—		—		—		—		—		3
Dae Kwang Semiconductor Co., Ltd.		6		—		—		—		—		—		6
Sanbon Department Store		3		—		—		—		—		—		3
Woori Ascon Co., Ltd.		10		—		—		—		—		—		10
Miju Steel Mfg. Co., Ltd.		51		—		—		—		—		—		51
BnB Sungwon Co., Ltd.		15		—		—		—		—		—		15
Hana Civil Engineering Co., Ltd.		1		—		—		—		—		—		1
KC Development Co., Ltd.		6		—		—		—		—		—		6
IMHWA Corp.		5		—		—		—		—		—		5
DAIM Special Vehicle Co., Ltd.		10		—		—		—		—		—		10
ASA JEONJU Co., Ltd.		69		—		—		—		—		—		69
KYUNGWON Co., Ltd.		14		—		—		—		—		—		14
Moonkyung Silica Co., Ltd.		—		—		—		—		—		—		—
Yousung Remicon Co., Ltd.		4		—		—		—		—		—		4
Sungkwang Timber Co., Ltd.		4		—		—		—		—		—		4
Yongbo Co., Ltd.		3		—		—		—		—		—		3
HJ Steel Co., Ltd.		2		—		—		—		—		—		2
KS Remicon Co., Ltd.		3		—		—		—		—		—		3
Sewoong Heavy Industries Co., Ltd.		40		—		—		—		—		—		40
SIN-E Steel Co., Ltd.		33		—		—		—		—		—		33
Joongang Platec Co., Ltd.		72		—		—		—		—		—		72
Pyungsan SI Ltd.		9		—		—		—		—		—		9
Samgong Development Co., Ltd.		7		—		—		—		—		—		7
Joongang Development Co., Ltd.		8		—		—		—		—		—		8
AJS Co., Ltd.		32		—		—		—		—		—		32
SHIN-E B&P Co., Ltd.		10		—		—		—		—		—		10
MSE Co., Ltd.		9		—		—		—		—		—		9
Ilrim Nano Tec Co., Ltd.		15		—		—		—		—		—		15
Kwang Myeong Electronics Technology Co., Ltd.		11		—		—		—		—		—		11
Youngjin Hi-Tech Co., Ltd.		21		—		—		—		—		—		21
Dong Woo International Co., Ltd.		18		—		—		—		—		—		18
Bench Mark Construction Co., Ltd.		—		—		—		—		—		—		—
Buyoung Co., Ltd.		3		—		—		—		—		—		3
Ilsuk Co., Ltd.		10		—		—		—		—		—		10
Dongyang Telecom Co., Ltd.		11		—		—		—		—		—		11
Han Young Construction Co., Ltd.		3		—		—		—		—		—		3
Jongwon Remicon Co., Ltd.		13		—		—		—		—		—		13
Ace Heat Treating Co., Ltd.		72		—		—		—		—		—		72
Zyle Daewoo Motor Sales Co., Ltd.		—		—		—		—		—		—		—
Daewoo Development Co., Ltd.		—		—		—		—		—		—		—
Seyang Inc.		27		—		—		—		—		—		27
Seungri Enterprise Co., Ltd.		3		—		—		—		—		—		3
Onggane Food Co., Ltd		1		—		—		—		—		—		1

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

(1)

Changes in available-for-sale financial assets for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows, continued:


In millions of won	March 31, 2016
	Beginning balance		Acquisition		Disposal			Valuation			Impairment		Others			Ending Balance

Shin-E P&C Co., Ltd.	W	1		—		—			—			—		—			1
Ejung Ad Co., Ltd.		3		—		—			—			—		—			3
Solvus Co., Ltd.		3		—		—			—			—		—			3
Myung Co., Ltd.		2		—		—			—			—		—			2
Emotion Co., Ltd.		8		—		—			—			—		—			8
Youngdong Concrete Co., Ltd.		7		—		—			—			—		—			7
Shinil Engineering Co., Ltd.		3		—		—			—			—		—			3
Korea Castiron Industrial Co., Ltd.		22		—		—			—			—		—			22
FFG DMC Co., Ltd.		17		—		—			—			—		—			17
Daeseong Metal Co., Ltd.		47		—		—			—			—		—			47
Biwang Industry Co., Ltd		2		—		—			—			—		—			2
Huimun Co., Ltd.		4		—		—			—			—		—			4
Sunun IT F Co., Ltd.		8		—		—			—			—		—			8
Young Sung Co., Ltd.		27		—		—			—			—		—			27
Yuil Industrial Electronics Co., Ltd.		16		—		—			—			—		—			16
DN TEK Inc.		62		—		—			—			—		—			62
Daeyang FMS Corporation		3		—		—			—			—		—			3
Kwang Jin Structure Co., Ltd.		31		—		—			—			—		—			31
Woojin Industry Corporation		16		—		—			—			—		—			16
Kwang Sung Industry Co., Ltd.		7		—		—			—			—		—			7
Matsaeng Food Co., Ltd.		6		—		—			—			—		—			6
Futech Mold Co., Ltd.		14		—		—			—			—		—			14
Samcheonri Industrial Co., Ltd.		13		—		—			—			—		—			13
Woojoo Environment Ind. Co., Ltd.		13		—		—			—			—		—			13
Cheongatti Co., Ltd.		4		—		—			—			—		—			4
Hyungji Esquire Co., Ltd.		21		—		—			—			—		—			21
Kolmar Pharma Co., Ltd.		52		—		—			—			—		—			52
Morado Co., Ltd.		2		—		—			—			—		—			2
Myung Sung Tex Co., Ltd.		2		—		—			—			—		—			2
Kwang Sung Co., Ltd.		—		—		—			—			—		31			31
EverTechno. Co., Ltd.		—		—		—			—			—		147			147
Autowel Co., Ltd.		—		—		—			—			—		13			13
Baekseok Construction Co., Ltd.		—		—		—			—			—		4			4
Areva nc Expansion		170,118		—		—			—			—		3,573			173,691
Navanakorn Electric Co., Ltd.		17,951		—		—			—			—		(284	)		17,667
PT. Kedap Saayq		—		—		—			—			—		—			—
Set Holding		179,585		—		—			—			—		—			179,585
PT. Cirebon Energi Prasarana		635		721		—			—			—		(40	)		1,316

		387,900		4,406		(944	)		(6	)		—		3,444			394,800


	W	584,479		4,406		(4,344	)		37,560			—		4,082			626,183

(*1)

The Company recognized gain on disposal of available-for-sale financial assets amounted to W1,480 million, from the sales of shares of Kwanglim Co., Ltd., TONGYANG Inc., TONGYANG networks Inc. and Nexolon Co., Ltd. and from the certain portion sales of IBK-AUCTUS Green Growth Private Equity Firm and Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1 during the three-month period ended March 31, 2016.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

(1)

Changes in available-for-sale financial assets for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows, continued:


In millions of won	December 31, 2015
	Beginning balance		Acquisition		Disposal			Valuation			Impairment			Others			Ending Balance
Listed:
Korea District Heating Corp.	W	127,241		—		—			3,169			—			—			130,410
Kwanglim Co., Ltd.		128		—		—			134			—			—			262
Ssangyong Motor Co., Ltd.		357		—		—			(58	)		—			—			299
Sungjee Construction. Co., Ltd.		5		—		—			—			—			—			5
Korea Line Corp.		—		—		—			—			—			—			—
Namkwang Engineering & Construction Co., Ltd.		2		—		—			(3	)		—			2			1
Pumyang Construction Co., Ltd.		—		—		—			—			—			—			—
ELCOMTEC Co., Ltd.		48		—		—			5			—			—			53
PAN ocean Co., Ltd.		5		—		—			1			—			—			6
Borneo International Furniture Co., Ltd.		4		—		—			7			—			92			103
TONGYANG Inc.		66		—		—			140			—			11			217
TONGYANG networks Inc.		3		—		—			3			—			—			6
Nexolon Co., Ltd.		—		—		—			59			—			3,137			3,196
PT Adaro Energy Tbk		44,109		—		—			(23,097	)		(23,206	)		23,206			21,012
Energy Fuels Inc.		11,568		—		—			(4,866	)		(9,391	)		8,615			5,926
Cockatoo Coal Limited		628		—		—			(572	)		(572	)		558			42
Denison Mines Corp.		62,339		—		—			(22,187	)		(20,154	)		14,459			34,457
Fission 3.0 (*1)		61		—		(57	)		11			—			15			30
Fission Uranium Corp.		651		—		—			(28	)		—			(69	)		554

		247,215		—		(57	)		(47,282	)		(53,323	)		50,026			196,579

Unlisted:
K&C - Gyeongnam youth job creation Investment Fund (*1)		1,340		—		(133	)		—			—			—			1,207
Hanwha Electric Power Venture Fund (*1)		1,804		—		(1,804	)		—			—			—			—
Korea investment - KoreaEXIM Bank CERs Private Special Asset Investment Trust I (*1)		4,752		—		(3,000	)		—			(1,181	)		—			571
Troika Overseas Resource Development Private Equity Firm		13,340		—		—			—			(11,787	)		—			1,553
IBK-AUCTUS Green Growth Private Equity firm (*1)		2,325		—		(1,470	)		—			—			—			855
Global Dynasty Overseas Resource Development Private Equity Firm		2,233		—		—			—			—			—			2,233
Intellectual Discovery, Ltd.		5,000		—		—			—			(3,625	)		—			1,375
Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1 (*1)		498		802		(231	)		—			—			—			1,069
Construction Guarantee		795		—		—			10			—			—			805
Plant & Mechanical Contractors Financial Cooperative of Korea		36		—		—			—			—			—			36
Fire Guarantee		20		—		—			—			—			—			20
Korea Software Financial Cooperative		301		—		—			—			—			—			301
Engineering Financial Cooperative		60		—		—			—			—			—			60
Electric Contractors Financial Cooperative		152		—		—			—			—			—			152
Korea Specialty Contractor Financial Cooperative		417		—		—			—			—			—			417
Information & Communication Financial Cooperative		10		—		—			—			—			—			10
Korea Electric Engineers Association		40		—		—			—			—			—			40
Hwan Young Steel Co., Ltd.		97		—		—			—			—			—			97
Woobang ENC Co., Ltd		22		—		—			—			—			—			22
Dongnam Co., Ltd.		72		—		—			—			—			—			72
SAMBO AUTO. Co., Ltd.		38		—		—			—			—			—			38
Mobo Co., Ltd.		14		—		—			—			—			—			14

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

(1)

Changes in available-for-sale financial assets for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows, continued:


In millions of won	December 31, 2015
	Beginning balance		Acquisition		Disposal		Valuation		Impairment			Others		Ending Balance

Poonglim Industrial Co., Ltd.	W	78		—		—		—		—			15		93
HANKOOK Silicon Co., Ltd.		7,513		—		—		—		—			—		7,513
Kun Young Engineering & Construction Co., Ltd.		5		—		—		—		—			—		5
Pumyang Asset Management Co., Ltd.		3		—		—		—		—			—		3
Dae Kwang Semiconductor Co., Ltd.		6		—		—		—		—			—		6
Sanbon Department Store		124		—		—		—		(121	)		—		3
Woori Ascon Co., Ltd.		10		—		—		—		—			—		10
Miju Steel Mfg. Co., Ltd.		51		—		—		—		—			—		51
BnB Sungwon Co., Ltd.		15		—		—		—		—			—		15
Hana Civil Engineering Co., Ltd.		1		—		—		—		—			—		1
KC Development Co., Ltd.		6		—		—		—		—			—		6
IMHWA Corp.		5		—		—		—		—			—		5
IXELON Co., Ltd.		23		—		—		—		(23	)		—		—
DAIM Special Vehicle Co., Ltd.		10		—		—		—		—			—		10
ASA KIMJE Co., Ltd.		465		—		—		—		(465	)		—		—
ASA JEONJU Co., Ltd.		697		—		—		—		(628	)		—		69
KYUNGWON Co., Ltd.		14		—		—		—		—			—		14
Moonkyung Silica Co., Ltd.		—		—		—		—		—			—		—
Yousung Remicon Co., Ltd.		4		—		—		—		—			—		4
Sungkwang Timber Co., Ltd.		4		—		—		—		—			—		4
Yongbo Co., Ltd.		3		—		—		—		—			—		3
HJ Steel Co., Ltd.		—		—		—		—		—			2		2
Ildong Air Conditioning Co., Ltd.		—		—		—		—		(2	)		2		—
KS Remicon Co., Ltd.		—		—		—		—		—			3		3
Sewoong Heavy Industries Co., Ltd.		—		—		—		—		—			40		40
SIN-E Steel Co., Ltd.		—		—		—		—		—			33		33
Joongang Platec Co., Ltd.		—		—		—		—		—			72		72
Hangjin Steel Co., Ltd.		—		—		—		—		(116	)		116		—
Pyungsan SI Ltd.		—		—		—		—		—			9		9
Samgong Development Co., Ltd.		—		—		—		—		—			7		7
Joongang Development Co., Ltd.		—		—		—		—		—			8		8
AJS Co., Ltd.		—		—		—		—		—			32		32
SHIN-E B&P Co., Ltd.		—		—		—		—		—			10		10
MSE Co., Ltd.		—		—		—		—		—			9		9
Ilrim Nano Tec Co., Ltd.		—		—		—		—		—			15		15
Kwang Myeong Electronics Technology Co., Ltd.		—		—		—		—		—			11		11
Youngjin Hi-Tech Co., Ltd.		—		—		—		—		(105	)		126		21
Dong Woo International Co., Ltd.		—		—		—		—		—			18		18
Bench Mark Construction Co., Ltd.		—		—		—		—		—			—		—
Buyoung Co., Ltd.		—		—		—		—		—			3		3
Ilsuk Co., Ltd.		—		—		—		—		—			10		10
Dongyang Telecom Co., Ltd.		—		—		—		—		—			11		11
Han Young Construction Co., Ltd.		—		—		—		—		—			3		3
Jongwon Remicon Co., Ltd.		—		—		—		—		—			13		13
Ace Heat Treating Co., Ltd.		—		—		—		—		—			72		72
Zyle Daewoo Motor Sales Co., Ltd.		—		—		—		—		—			—		—
Daewoo Development Co., Ltd.		—		—		—		—		—			—		—
Daewoo Songdo Development Co., Ltd.		—		—		—		—		(2	)		2		—
Seyang Inc.		—		—		—		—		—			27		27
Seungri Enterprise Co., Ltd.		—		—		—		—		—			3		3

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

(1)

Changes in available-for-sale financial assets for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows, continued:


In millions of won	December 31, 2015
	Beginning balance		Acquisition		Disposal			Valuation			Impairment			Others			Ending Balance

Onggane Food Co., Ltd.	W	—		—		—			—			—			1			1
Shin-E P&C Co., Ltd.		—		—		—			—			—			1			1
Montista Telecom Co., Ltd.		—		—		—			—			(3	)		3			—
Ejung Ad Co., Ltd.		—		—		—			—			—			3			3
Solvus Co., Ltd.		—		—		—			—			—			3			3
Myung Co., Ltd.		—		—		—			—			—			2			2
Emotion Co., Ltd.		—		—		—			—			—			8			8
Youngdong Concrete Co., Ltd.		—		—		—			—			—			7			7
Shinil Engineering Co., Ltd.		—		—		—			—			—			3			3
Korea Castiron Industrial Co., Ltd.		—		—		—			—			—			22			22
FFG DMC Co., Ltd.		—		—		—			—			—			17			17
Daeseong Metal Co., Ltd.		—		—		—			—			—			47			47
Biwang Industry Co., Ltd		—		—		—			—			—			2			2
Huimun Co., Ltd.		—		—		—			—			—			4			4
Sunun IT F Co., Ltd.		—		—		—			—			—			8			8
Young Sung Co., Ltd.		—		—		—			—			—			27			27
Yuil Industrial Electronics Co., Ltd.		—		—		—			—			—			16			16
DN TEK Inc.		—		—		—			—			—			62			62
Daeyang FMS Corporation		—		—		—			—			—			3			3
Kwang Jin Structure Co., Ltd.		—		—		—			—			—			31			31
Woojin Industry Corporation		—		—		—			—			—			16			16
Kwang Sung Industry Co., Ltd.		—		—		—			—			—			7			7
Matsaeng Food Co., Ltd.		—		—		—			—			—			6			6
Futech Mold Co., Ltd.		—		—		—			—			—			14			14
Samcheonri Industrial Co., Ltd.		—		—		—			—			—			13			13
Woojoo Environment Ind. Co., Ltd.		—		—		—			—			—			13			13
Cheongatti Co., Ltd.		—		—		—			—			—			4			4
Hyungji Esquire Co., Ltd.		—		—		—			—			—			21			21
Kolmar Pharma Co., Ltd.		—		—		—			—			—			52			52
Morado Co., Ltd.		—		—		—			—			—			2			2
Myung Sung Tex Co., Ltd.		—		—		—			—			—			2			2
Areva nc Expansion		227,876		—		—			—			—			(57,758	)		170,118
Navanakorn Electric Co., Ltd.		16,836		—		—			—			—			1,115			17,951
PT. Kedap Saayq		12,989		—		—			—			(12,989	)		—			—
Set Holding		167,832		—		—			11,753			—			—			179,585
PT. Cirebon Energi Prasarana		—		635		—			—			—			—			635

		467,936		1,437		(6,638	)		11,763			(31,047	)		(55,551	)		387,900


	W	715,151		1,437		(6,695	)		(35,519	)		(84,370	)		(5,525	)		584,479

(*1)

The Company recognized gain and loss on disposal of available-for-sale financial assets amounted to W4 million and W3,008 million, respectively, from the sales of shares of Fission 3.0, K&C- Gyeongnam Youth Job Creation Investment Fund, Korea Investment - Korea EXIM Bank CERs Private Special Asset Investment Trust 1, IBK-AUCTUS Green Growth Private Equity Firm and others and from the liquidation of Hanwha Electric Power Venture fund for the year ended December 31, 2015.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

(2)

Available-for-sale financial assets as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Shares		Ownership			Acquisition cost		Book value		Fair value
Listed
Korea District Heating Corp.		2,264,068		19.55	%	W	173,201		161,201		161,201
Ssangyong Motor Co., Ltd.		38,568		0.03	%		428		319		319
Sungjee Construction. Co., Ltd.		1,053		0.01	%		49		5		5
Korea Line Corp.		18		0.00	%		1		—		—
Namkwang Engineering & Construction Co., Ltd.		46		0.00	%		15		1		1
Pumyang Construction Co., Ltd.		7		0.00	%		2		—		—
ELCOMTEC Co., Ltd.		32,875		0.04	%		217		69		69
PAN ocean Co., Ltd.		1,492		0.00	%		14		6		6
Borneo International Furniture Co., Ltd.		64,037		0.28	%		97		103		103
PT Adaro Energy Tbk		480,000,000		1.50	%		71,554		26,904		26,904
Energy Fuels Inc.		1,711,814		3.79	%		16,819		4,385		4,385
Cockatoo Coal Limited		49,881,423		0.07	%		18,445		43		43
Denison Mines Corp.		58,284,000		11.24	%		84,134		37,852		37,852
Fission 3.0		300,000		0.17	%		—		25		25
Fission Uranium Corp.		800,000		0.21	%		785		470		470

							365,761		231,383		231,383

Unlisted (*1)
K&C - Gyeongnam youth job creation Investment Fund		24		10.00	%		1,207		1,207		—
Korea investment - KoreaEXIM Bank CERs Private Special Asset Investment Trust I		1,758,731,002		14.18	%		1,752		571		—
Troika Overseas Resource Development Private Equity Firm		13,340,012,100		3.66	%		13,340		1,553		—
IBK-AUCTUS Green Growth Private Equity firm		171		6.30	%		855		234		—
Global Dynasty Overseas Resource Development Private Equity Firm		2,233,407,439		7.46	%		2,233		2,233		—
Intellectual Discovery, Ltd.		1,000,000		8.81	%		5,000		1,375		—
Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1		4,279,159,433		5.00	%		4,431		4,431		—
Construction Guarantee (*2)		571		0.02	%		601		799		799
Plant & Mechanical Contractors Financial Cooperative of Korea		50		0.01	%		36		36		—
Fire Guarantee		40		0.02	%		20		20		—
Korea Software Financial Cooperative		301		0.15	%		301		301		—
Engineering Financial Cooperative		528		0.10	%		60		60		—
Electric Contractors Financial Cooperative		800		0.03	%		152		152		—
Korea Specialty Contractor Financial Cooperative		476		0.01	%		417		417		—
Information & Communication Financial Cooperative		70		0.01	%		10		10		—
Korea Electric Engineers Association		400		0.26	%		40		40		—
Hwan Young Steel Co., Ltd.		10,916		0.14	%		1,092		97		—
Woobang ENC Co., Ltd		14		0.00	%		22		22		—
Dongnam Co., Ltd.		2,070		0.46	%		72		72		—
SAMBO AUTO. Co., Ltd.		15,066		0.02	%		38		38		—
Mobo Co., Ltd.		504		0.00	%		14		14		—
Poonglim Industrial Co., Ltd.		1,915		0.01	%		93		93		—
HANKOOK Silicon Co., Ltd.		7,513,022		10.44	%		7,513		7,513		—
Kun Young Engineering & Construction Co., Ltd.		100		0.00	%		5		5		—
Pumyang Asset Management Co., Ltd.		13		0.00	%		3		3		—
Dae Kwang Semiconductor Co., Ltd.		589		0.07	%		6		6		—
Sanbon Department Store		828		0.01	%		124		3		—
Woori Ascon Co., Ltd.		25		0.34	%		10		10		—
Miju Steel Mfg. Co., Ltd.		99,804		0.23	%		51		51		—
BnB Sungwon Co., Ltd.		589		0.07	%		15		15		—

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

(2)

Available-for-sale financial assets as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won	March 31, 2016
	Shares		Ownership			Acquisition cost		Book value		Fair value

Hana Civil Engineering Co., Ltd.		23		0.00	%	W	1		1		—
KC Development Co., Ltd.		839		0.02	%		6		6		—
IMHWA Corp.		329		0.11	%		5		5		—
DAIM Special Vehicle Co., Ltd.		58		0.08	%		10		10		—
ASA JEONJU Co., Ltd.		34,846		1.34	%		697		69		—
KYUNGWON Co., Ltd.		2,812		0.17	%		14		14		—
Moonkyung Silica Co., Ltd.		42		0.56	%		—		—		—
Yousung Remicon Co., Ltd.		8		0.26	%		4		4		—
Sungkwang Timber Co., Ltd.		9		0.34	%		4		4		—
Yongbo Co., Ltd.		61		0.20	%		3		3		—
HJ Steel Co., Ltd.		218		0.07	%		2		2		—
KS Remicon Co., Ltd.		12		0.04	%		3		3		—
Sewoong Heavy Industries Co., Ltd.		7,931		0.10	%		40		40		—
SIN-E Steel Co., Ltd.		109		0.08	%		33		33		—
Joongang Platec Co., Ltd.		3,591		0.75	%		72		72		—
Pyungsan SI Ltd.		434		0.01	%		9		9		—
Samgong Development Co., Ltd.		12		0.01	%		7		7		—
Joongang Development Co., Ltd.		540		0.12	%		8		8		—
AJS Co., Ltd.		12,906		0.23	%		32		32		—
SHIN-E B&P Co., Ltd.		119		0.13	%		10		10		—
MSE Co., Ltd.		429		0.13	%		9		9		—
Ilrim Nano Tec Co., Ltd.		1,520		0.07	%		15		15		—
Kwang Myeong Electronics Technology Co., Ltd.		113		0.37	%		11		11		—
Youngjin Hi-Tech Co., Ltd.		2,512		0.25	%		126		21		—
Dong Woo International Co., Ltd.		90		0.37	%		18		18		—
Bench Mark Construction Co., Ltd.		2		0.00	%		—		—		—
Buyoung Co., Ltd.		270		0.00	%		3		3		—
Ilsuk Co., Ltd.		152		0.17	%		10		10		—
Dongyang Telecom Co., Ltd.		1,760		0.01	%		11		11		—
Han Young Construction Co., Ltd.		35		0.03	%		3		3		—
Jongwon Remicon Co., Ltd.		31		0.18	%		13		13		—
Ace Heat Treating Co., Ltd.		477		1.43	%		72		72		—
Zyle Daewoo Motor Sales Co., Ltd.		22		0.00	%		—		—		—
Daewoo Development Co., Ltd.		8		0.00	%		—		—		—
Seyang Inc.		537		0.05	%		27		27		—
Seungri Enterprise Co., Ltd.		93		0.05	%		3		3		—
Onggane Food Co., Ltd.		5		0.07	%		1		1		—
Shin-E P&C Co., Ltd.		12		0.00	%		1		1		—
Ejung Ad Co., Ltd.		132		0.09	%		3		3		—
Solvus Co., Ltd.		1,056		0.04	%		3		3		—
Myung Co., Ltd.		89		0.05	%		2		2		—
Emotion Co., Ltd.		167		0.61	%		8		8		—
Youngdong Concrete Co., Ltd.		32		0.32	%		7		7		—
Shinil Engineering Co., Ltd.		887		0.06	%		3		3		—
Korea Castiron Industrial Co., Ltd.		617		1.86	%		22		22		—
FFG DMC Co., Ltd.		12		0.00	%		17		17		—
Daeseong Metal Co., Ltd.		518		2.37	%		47		47		—
Biwang Industry Co., Ltd		406		0.04	%		2		2		—
Huimun Co., Ltd.		263		0.26	%		4		4		—
Sunun IT F Co., Ltd.		133		0.52	%		8		8		—
Young Sung Co., Ltd.		89		0.40	%		27		27		—
Yuil Industrial Electronics Co., Ltd.		804		0.32	%		16		16		—
DN TEK Inc.		12,401		0.29	%		62		62		—
Daeyang FMS Corporation		84		0.05	%		3		3		—

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

(2)

Available-for-sale financial assets as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won	March 31, 2016
	Shares		Ownership			Acquisition cost		Book value		Fair value

Kwang Jin Structure Co., Ltd.		3,072		0.60	%	W	31		31		—
Woojin Industry Corporation		3		0.00	%		16		16		—
Kwang Sung Industry Co., Ltd.		325		0.35	%		7		7		—
Matsaeng Food Co., Ltd.		277		0.56	%		6		6		—
Futech Mold Co., Ltd.		274		0.27	%		14		14		—
Samcheonri Industrial Co., Ltd.		533		0.98	%		13		13		—
Woojoo Environment Ind. Co., Ltd.		101		0.11	%		13		13		—
Cheongatti Co., Ltd.		57		0.10	%		4		4		—
Hyungji Esquire Co., Ltd.		52		0.02	%		21		21		—
Kolmar Pharma Co., Ltd.		1,426		0.01	%		52		52		—
Morado Co., Ltd.		209		0.04	%		2		2		—
Myung Sung Tex Co., Ltd.		20		0.00	%		2		2		—
Kwang Sung Co., Ltd.		610		0.53	%		31		31		—
EverTechno. Co., Ltd.		29,424		0.73	%		147		147		—
Autowel Co., Ltd.		260		0.38	%		13		13		—
Baekseok Construction Co., Ltd.		30		0.01	%		4		4		—
Areva nc Expansion		1,077,124		13.49	%		288,443		173,691		—
Navanakorn Electric Co., Ltd. (*3)		4,442,800		29.00	%		16,646		17,667		—
PT. Kedap Saayq		671		10.00	%		18,540		—		—
Set Holding (*4)		1,100,220		2.50	%		229,255		179,585		179,585
PT. Cirebon Energi Prasarana		11,420		10.00	%		1,356		1,316		—

							595,646		394,800		180,384


						W	961,407		626,183		411,767

(*1)	Book values of unlisted equity securities held by the Company were measured at cost as a quoted market price does not exist in an active market and its fair value cannot be measured reliably.

(*2)

The Company has estimated the fair value of the investment in Construction Guarantee based upon the price which would be applied when the investment is returned. The Company has recognized the difference between its fair value and book value as a gain or loss on valuation of available-for-sale financial assets in other comprehensive income or loss during the three-month period ended March 31, 2016.

(*3)	Although the Company holds more than 20% of the equity shares of these investments, the Company cannot exercise significant influence.

(*4)

The Company has estimated the fair value of Set Holding by using the discounted cash flow method and has recognized the difference between its fair value and book value as gain or loss on valuation of available-for-sale financial assets in other comprehensive income or loss during the three-month period ended March 31, 2016.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

(2)

Available-for-sale financial assets as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won	December 31, 2015
	Shares		Ownership			Acquisition cost		Book value		Fair value
Listed
Korea District Heating Corp.		2,264,068		19.55	%	W	173,201		130,410		130,410
Kwanglim Co., Ltd.		84,515		0.44	%		386		262		262
Ssangyong Motor Co., Ltd.		38,568		0.03	%		428		299		299
Sungjee Construction. Co., Ltd.		1,053		0.01	%		49		5		5
Korea Line Corp.		18		0.00	%		1		—		—
Namkwang Engineering & Construction Co., Ltd.		232		0.00	%		15		1		1
Pumyang Construction Co., Ltd.		7		0.00	%		2		—		—
ELCOMTEC Co., Ltd.		32,875		0.04	%		217		53		53
PAN ocean Co., Ltd.		1,492		0.00	%		14		6		6
Borneo International Furniture Co., Ltd.		64,037		0.28	%		97		103		103
TONGYANG Inc.		78,511		0.03	%		45		217		217
TONGYANG networks Inc.		4,422		0.01	%		3		6		6
Nexolon Co., Ltd.		3,665,367		2.59	%		3,138		3,196		3,196
PT Adaro Energy Tbk		480,000,000		1.50	%		71,554		21,012		21,012
Energy Fuels Inc.		1,711,814		3.79	%		16,819		5,926		5,926
Cockatoo Coal Limited		49,881,423		0.07	%		18,445		42		42
Denison Mines Corp.		58,284,000		11.24	%		84,134		34,457		34,457
Fission 3.0		300,000		0.17	%		—		30		30
Fission Uranium Corp.		800,000		0.21	%		785		554		554

							369,333		196,579		196,579

Unlisted (*1)
K&C - Gyeongnam youth job creation Investment Fund		24		10.00	%		1,207		1,207		—
Korea investment - KoreaEXIM Bank CERs Private Special Asset Investment Trust I		1,758,731,002		14.18	%		1,752		571		—
Troika Overseas Resource Development Private Equity Firm		13,340,012,100		3.66	%		13,340		1,553		—
IBK-AUCTUS Green Growth Private Equity firm		233		6.30	%		855		855		—
Global Dynasty Overseas Resource Development Private Equity Firm		2,233,407,439		7.46	%		2,233		2,233		—
Intellectual Discovery, Ltd.		1,000,000		8.81	%		5,000		1,375		—
Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1		1,069,432,095		5.00	%		1,069		1,069		—
Construction Guarantee (*2)		571		0.02	%		601		805		805
Plant & Mechanical Contractors Financial Cooperative of Korea		50		0.01	%		36		36		—
Fire Guarantee		40		0.02	%		20		20		—
Korea Software Financial Cooperative		301		0.15	%		301		301		—
Engineering Financial Cooperative		528		0.10	%		60		60		—
Electric Contractors Financial Cooperative		800		0.03	%		152		152		—
Korea Specialty Contractor Financial Cooperative		476		0.01	%		417		417		—
Information & Communication Financial Cooperative		70		0.01	%		10		10		—
Korea Electric Engineers Association		400		0.26	%		40		40		—
Hwan Young Steel Co., Ltd.		10,916		0.14	%		1,092		97		—
Woobang ENC Co., Ltd.		14		0.00	%		22		22		—
Dongnam Co., Ltd.		2,070		0.46	%		72		72		—
SAMBO AUTO. Co., Ltd.		15,066		0.02	%		38		38		—
Mobo Co., Ltd.		504		0.00	%		14		14		—
Poonglim Industrial Co., Ltd.		1,915		0.01	%		93		93		—
HANKOOK Silicon Co., Ltd.		7,513,022		10.44	%		7,513		7,513		—
Kun Young Engineering & Construction Co., Ltd.		100		0.00	%		5		5		—
Pumyang Asset Management Co., Ltd.		13		0.00	%		3		3		—
Dae Kwang Semiconductor Co., Ltd.		589		0.07	%		6		6		—
Sanbon Department Store		828		0.01	%		124		3		—
Woori Ascon Co., Ltd.		25		0.34	%		10		10		—
Miju Steel Mfg. Co., Ltd.		99,804		0.23	%		51		51		—
BnB Sungwon Co., Ltd.		589		0.07	%		15		15		—

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

(2)

Available-for-sale financial assets as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won	March 31, 2015
	Shares		Ownership			Acquisition cost		Book value		Fair value
Hana Civil Engineering Co., Ltd.		23		0.00	%	W	1		1		—
KC Development Co., Ltd.		839		0.02	%		6		6		—
IMHWA Corp.		329		0.11	%		5		5		—
IXELON Co., Ltd.		2,292		0.02	%		23		—		—
DAIM Special Vehicle Co., Ltd.		58		0.08	%		10		10		—
ASA KIMJE Co., Ltd.		23,245		1.11	%		465		—		—
ASA JEONJU Co., Ltd.		34,846		1.34	%		697		69		—
KYUNGWON Co., Ltd.		2,812		0.17	%		14		14		—
Moonkyung Silica Co., Ltd.		42		0.56	%		—		—		—
Yousung Remicon Co., Ltd.		8		0.26	%		4		4		—
Sungkwang Timber Co., Ltd.		9		0.34	%		4		4		—
Yongbo Co., Ltd.		61		0.20	%		3		3		—
HJ Steel Co., Ltd.		218		0.07	%		2		2		—
Ildong Air Conditioning Co., Ltd.		218		0.16	%		3		—		—
KS Remicon Co., Ltd.		12		0.04	%		3		3		—
Sewoong Heavy Industries Co., Ltd.		7,931		0.10	%		40		40		—
SIN-E Steel Co., Ltd.		109		0.08	%		33		33		—
Joongang Platec Co., Ltd.		3,591		0.75	%		72		72		—
Hangjin Steel Co., Ltd.		116		1.08	%		116		—		—
Pyungsan SI Ltd.		434		0.01	%		9		9		—
Samgong Development Co., Ltd.		12		0.01	%		7		7		—
Joongang Development Co., Ltd.		540		0.12	%		8		8		—
AJS Co., Ltd.		12,906		0.23	%		32		32		—
SHIN-E B&P Co., Ltd.		119		0.13	%		10		10		—
MSE Co., Ltd.		429		0.13	%		9		9		—
Ilrim Nano Tec Co., Ltd.		1,520		0.07	%		15		15		—
Kwang Myeong Electronics Technology Co., Ltd.		113		0.37	%		11		11		—
Youngjin Hi-Tech Co., Ltd.		2,512		0.25	%		126		21		—
Dong Woo International Co., Ltd.		90		0.37	%		18		18		—
Bench Mark Construction Co., Ltd.		2		0.00	%		—		—		—
Buyoung Co., Ltd.		270		0.00	%		3		3		—
Ilsuk Co., Ltd.		152		0.17	%		10		10		—
Dongyang Telecom Co., Ltd.		1,760		0.01	%		11		11		—
Han Young Construction Co., Ltd.		35		0.03	%		3		3		—
Jongwon Remicon Co., Ltd.		31		0.18	%		13		13		—
Ace Heat Treating Co., Ltd.		477		1.43	%		72		72		—
Zyle Daewoo Motor Sales Co., Ltd.		22		0.00	%		—		—		—
Daewoo Development Co., Ltd.		8		0.00	%		—		—		—
Daewoo Songdo Development Co., Ltd.		301		0.00	%		2		—		—
Seyang Inc.		537		0.05	%		27		27		—
Seungri Enterprise Co., Ltd.		93		0.05	%		3		3		—
Onggane Food Co., Ltd.		5		0.07	%		1		1		—
Shin-E P&C Co., Ltd.		12		0.00	%		1		1		—
Montista Telecom Co., Ltd.		5,409		0.00	%		3		—		—
Ejung Ad Co., Ltd.		132		0.09	%		3		3		—
Solvus Co., Ltd.		1,056		0.04	%		3		3		—
Myung Co., Ltd.		89		0.05	%		2		2		—
Emotion Co., Ltd.		167		0.61	%		8		8		—
Youngdong Concrete Co., Ltd.		32		0.32	%		7		7		—
Shinil Engineering Co., Ltd.		887		0.06	%		3		3		—
Korea Castiron Industrial Co., Ltd.		617		1.86	%		22		22		—
FFG DMC Co., Ltd.		12		0.00	%		17		17		—

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

(2)

Available-for-sale financial assets as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won	December 31, 2015
	Shares		Ownership			Acquisition cost		Book value		Fair value
Daeseong Metal Co., Ltd.		518		2.37	%	W	47		47		—
Biwang Industry Co., Ltd		406		0.04	%		2		2		—
Huimun Co., Ltd.		263		0.26	%		4		4		—
Sunun IT F Co., Ltd.		133		0.52	%		8		8		—
Young Sung Co., Ltd.		89		0.40	%		27		27		—
Yuil Industrial Electronics Co., Ltd.		804		0.32	%		16		16		—
DN TEK Inc.		12,401		0.29	%		62		62		—
Daeyang FMS Corporation		84		0.05	%		3		3		—
Kwang Jin Structure Co., Ltd.		3,072		0.60	%		31		31		—
Woojin Industry Corporation		3		0.00	%		16		16		—
Kwang Sung Industry Co., Ltd.		325		0.35	%		7		7		—
Matsaeng Food Co., Ltd.		277		0.56	%		6		6		—
Futech Mold Co., Ltd.		274		0.27	%		14		14		—
Samcheonri Industrial Co., Ltd.		533		0.98	%		13		13		—
Woojoo Environment Ind. Co., Ltd.		101		0.11	%		13		13		—
Cheongatti Co., Ltd.		57		0.10	%		4		4		—
Hyungji Esquire Co., Ltd.		52		0.02	%		21		21		—
Kolmar Pharma Co., Ltd.		1,426		0.01	%		52		52		—
Morado Co., Ltd.		209		0.04	%		2		2		—
Myung Sung Tex Co., Ltd.		20		0.00	%		2		2		—
Areva nc Expansion		1,077,124		13.49	%		288,443		170,118		—
Navanakorn Electric Co., Ltd. (*3)		4,442,800		29.00	%		16,646		17,951		—
PT. Kedap Saayq		671		10.00	%		18,540		—		—
Set Holding (*4)		1,100,220		2.50	%		229,255		179,585		179,585
PT. Cirebon Energi Prasarana		420		10.00	%		635		635		—

							591,980		387,900		180,390


						W	961,313		584,479		376,969

(*1)	Book values of unlisted equity securities held by the Company were measured at cost as a quoted market price does not exist in an active market and its fair value cannot be measured reliably.

(*2)

(*3)	Although the Company holds more than 20% of the equity shares of these investments, the Company cannot exercise significant influence.

(*4)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

10.

Held-to-maturity Investments

Held-to-maturity investments as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Beginning balance		Acquisition		Disposal			Impairment		Others			Ending balance
Government bonds	W	3,623		28		(16	)		—		—			3,635

	W	3,623		28		(16	)		—		—			3,635

Current	W	380		—		(15	)		—		53			418
Non-current		3,243		28		(1	)		—		(53	)		3,217

In millions of won	December 31, 2015
	Beginning balance		Acquisition		Disposal			Impairment		Others			Ending balance
Government bonds	W	3,601		432		(410	)		—		—			3,623
Municipal bonds		13		—		—			—		(13	)		—

	W	3,614		432		(410	)		—		(13	)		3,623

Current	W	265		—		(186	)		—		301			380
Non-current		3,349		432		(224	)		—		(314	)		3,243

11.

Derivatives

(1)

Derivatives as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016				December 31, 2015
	Current		Non-current		Current		Non-current
Derivative assets
Currency forward	W	787		22,538		1,498		24,896
Currency swap		80,678		341,305		95,759		491,219
Interest rate swap		—		3,977		—		3,778

	W	81,465		367,820		97,257		519,893

Derivative liabilities
Currency forward	W	8,921		2,101		1,142		—
Currency swap		890		88,455		758		66,976
Interest rate swap		5,231		90,272		8,345		89,289

	W	15,042		180,828		10,245		156,265

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

11.

Derivatives, Continued

(2)

Currency forward contracts which are not designated as hedge instruments as of March 31, 2016 are as follows:


In millions of won and thousands of foreign currencies
Counterparty	Contract Date		Maturity date	Contract amounts				Contract exchange rate
Counterparty	Contract Date		Maturity date	Pay		Receive		Contract exchange rate

KEB Hana Bank		2014.04.10	2021.07.12	W	55,120	USD	52,000	1,060.00
KEB Hana Bank		2014.04.28	2021.07.12		50,784	USD	48,000	1,058.00
KEB Hana Bank		2014.05.09	2021.07.12		104,600	USD	100,000	1,046.00
Bank of America		2014.04.29	2021.07.12		105,400	USD	100,000	1,054.00
Standard Chartered		2016.03.04	2016.04.05		2,416	USD	2,000	1,208.14
Standard Chartered		2016.03.10	2016.04.11		2,427	USD	2,000	1,213.60
Standard Chartered		2016.03.09	2016.04.08		3,650	USD	3,000	1,216.65
Nova Scotia		2016.03.08	2016.04.07		8,451	USD	7,000	1,207.35
Nova Scotia		2016.03.11	2016.04.14		9,638	USD	8,000	1,204.72
Nova Scotia		2016.03.24	2016.04.25		9,339	USD	8,000	1,167.33
Citibank		2016.03.14	2016.04.15		3,564	USD	3,000	1,187.90
Citibank		2016.03.17	2016.04.18		10,578	USD	9,000	1,175.31
Mizuho Bank		2016.03.21	2016.04.20		10,499	USD	9,000	1,166.57
Credit Suisse		2016.03.28	2016.04.27		7,023	USD	6,000	1,170.50
HSBC		2016.03.31	2016.04.29		11,458	USD	10,000	1,145.84
BNP Paribas		2016.03.03	2016.04.07		6,097	USD	5,000	1,219.48
BNP Paribas		2016.03.15	2016.04.18		1,187	USD	1,000	1,187.30
BNP Paribas		2016.03.16	2016.04.07	USD	2,000		2,439	1,219.48
BNP Paribas		2016.03.16	2016.04.18		1,192	USD	1,000	1,192.20
BNP Paribas		2016.03.18	2016.05.20		1,163	USD	1,000	1,163.00
BNP Paribas		2016.03.29	2016.04.07	USD	2,500		3,049	1,219.48
BNP Paribas		2016.03.29	2016.05.20	USD	601		699	1,163.00
BNP Paribas		2016.03.30	2016.04.07	USD	500		610	1,219.48
Mizuho Bank		2016.03.22	2016.05.24		2,318	USD	2,000	1,158.85
Mizuho Bank		2016.03.24	2016.05.31		3,502	USD	3,000	1,167.47
Mizuho Bank		2016.03.28	2016.04.29		1,168	USD	1,000	1,168.00
Mizuho Bank		2016.03.28	2016.05.31		2,334	USD	2,000	1,167.20
Mizuho Bank		2016.03.29	2016.05.31		2,329	USD	2,000	1,164.30
Mizuho Bank		2016.03.30	2016.06.01		1,153	USD	1,000	1,153.30
Mizuho Bank		2016.03.31	2016.06.07		3,437	USD	3,000	1,145.67
Nomura		2016.03.18	2016.04.22		3,498	USD	3,000	1,166.00
Nomura		2016.03.24	2016.04.22	USD	1,800		2,097	1,165.20
Standard Chartered		2016.03.07	2016.04.11		12,019	USD	10,000	1,201.85
Standard Chartered		2016.03.10	2016.04.14		3,630	USD	3,000	1,210.10
Standard Chartered		2016.03.21	2016.05.23		3,497	USD	3,000	1,165.75
Standard Chartered		2016.03.28	2016.04.29		1,169	USD	1,000	1,169.00
Standard Chartered		2016.03.30	2016.06.01		2,307	USD	2,000	1,153.50
Nova Scotia		2016.03.10	2016.05.16		11,859	USD	9,813	1,208.40
Nova Scotia		2016.03.03	2016.04.07		934	USD	769	1,214.10
Nova Scotia		2016.03.29	2016.05.31		1,163	USD	1,000	1,162.95
Nova Scotia		2016.03.09	2016.05.11		1,308	USD	1,073	1,218.40
Nova Scotia		2016.03.07	2016.04.11		10,402	USD	8,662	1,200.90
Societe Generale		2016.03.22	2016.05.24		2,323	USD	2,000	1,161.50
Mizuho Bank		2016.03.24	2016.04.06		3,034	USD	2,600	1,167.10
Standard Chartered		2016.03.28	2016.04.06		3,395	USD	2,900	1,170.82
Nova Scotia		2016.03.30	2016.10.04		5,728	USD	5,000	1,145.60
Nova Scotia		2016.03.31	2016.10.04		5,733	USD	5,000	1,146.60
Societe Generale		2016.03.31	2016.10.04		3,444	USD	3,000	1,148.10
Nova Scotia		2016.03.30	2016.10.04		5,781	USD	5,000	1,156.20
Societe Generale		2016.03.30	2016.07.01		3,466	USD	3,000	1,155.40
BNP Paribas		2016.03.22	2016.07.25		3,476	USD	3,000	1,158.50
Nova Scotia		2016.03.22	2016.09.26		3,479	USD	3,000	1,159.60
Societe Generale		2016.03.22	2016.07.25		3,478	USD	3,000	1,159.35
Citibank		2016.03.22	2016.07.25		3,481	USD	3,000	1,160.30
Societe Generale		2016.03.18	2016.07.22		5,808	USD	5,000	1,161.55
Nova Scotia		2016.03.22	2016.09.26		3,496	USD	3,000	1,165.30
Nova Scotia		2016.03.18	2016.07.22		3,495	USD	3,000	1,164.90

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

11.

Derivatives, Continued

(2)

Currency forward contracts which are not designated as hedge instruments, as of March 31, 2016 are as follows, continued:


In millions of won and thousands of foreign currencies
	Contract		Maturity	Contract amounts				Contract
Counterparty	Date		date	Pay		Receive		exchange rate

Nova Scotia		2016.03.18	2016.07.22	W	3,498	USD	3,000	1,165.90
Citibank		2016.03.17	2016.06.21		5,882	USD	5,000	1,176.40
HSBC		2016.03.17	2016.06.21		3,534	USD	3,000	1,177.90
Nova Scotia		2016.03.17	2016.06.21		4,136	USD	3,481	1,188.20
Nova Scotia		2016.03.17	2016.06.21		5,946	USD	5,000	1,189.20
HSBC		2016.03.15	2016.06.17		3,574	USD	3,000	1,191.20
Citibank		2016.03.15	2016.06.17		3,576	USD	3,000	1,191.95
Standard Chartered		2016.03.11	2016.06.15		3,591	USD	3,000	1,197.00
Nova Scotia		2016.03.11	2016.06.15		6,001	USD	5,000	1,200.10
Nova Scotia		2016.03.11	2016.06.15		6,006	USD	5,000	1,201.10
Nova Scotia		2016.03.11	2016.06.15		1,203	USD	1,000	1,203.10
Nova Scotia		2016.03.11	2016.06.15		1,204	USD	1,000	1,204.10
Nova Scotia		2016.03.11	2016.06.15		1,205	USD	1,000	1,205.10
Nova Scotia		2016.03.11	2016.06.15		1,206	USD	1,000	1,206.10
Standard Chartered		2016.03.10	2016.06.14		3,619	USD	3,000	1,206.40
Citibank		2016.03.10	2016.06.14		6,043	USD	5,000	1,208.60
Citibank		2016.03.10	2016.06.14		3,249	USD	2,686	1,209.60
Standard Chartered		2016.03.04	2016.06.08		2,891	USD	2,387	1,211.30
Nova Scotia		2016.03.09	2016.06.14		6,057	USD	5,000	1,211.30
Nova Scotia		2016.03.09	2016.06.14		6,062	USD	5,000	1,212.30
Standard Chartered		2016.03.03	2016.05.09		1,102	USD	905	1,217.20
Nova Scotia		2016.03.03	2016.05.09		5,224	USD	4,278	1,221.20
HSBC		2016.03.03	2016.05.09		6,113	USD	5,000	1,222.65
Nova Scotia		2016.03.03	2016.05.09		6,114	USD	5,000	1,222.70
Credit Agricole		2016.03.03	2016.05.09		6,118	USD	5,000	1,223.60
Nova Scotia		2016.03.03	2016.05.09		1,457	USD	1,190	1,224.20
BNP Paribas		2016.03.03	2016.05.09		882	USD	720	1,224.70
KEB Hana Bank		2015.08.26	2017.07.31	JPY	630,000		6,377	10.12
BNP Paribas		2015.02.12	2016.04.11	IDR	29,424,110	USD	2,176	13,525.00
BNP Paribas		2015.02.12	2016.05.10	IDR	27,059,672	USD	2,001	13,525.00
BNP Paribas		2015.02.12	2016.06.10	IDR	22,987,586	USD	1,700	13,525.00
BNP Paribas		2015.02.12	2016.07.11	IDR	39,735,684	USD	2,938	13,525.00
BNP Paribas		2015.02.12	2016.08.10	IDR	30,737,686	USD	2,273	13,525.00
BNP Paribas		2015.02.12	2016.09.12	IDR	27,125,351	USD	2,006	13,525.00
BNP Paribas		2015.02.12	2016.10.11	IDR	26,862,636	USD	1,986	13,525.00
BNP Paribas		2015.02.12	2016.11.10	IDR	26,074,490	USD	1,928	13,525.00
BNP Paribas		2015.02.12	2016.12.12	IDR	13,135,763	USD	971	13,525.00
BNP Paribas		2015.02.12	2017.01.10	IDR	6,567,882	USD	486	13,525.00
BNP Paribas		2015.02.12	2017.02.10	IDR	6,567,882	USD	486	13,525.00
BNP Paribas		2015.02.12	2017.03.10	IDR	6,567,882	USD	486	13,525.00
BNP Paribas		2015.02.12	2017.04.10	IDR	6,567,882	USD	486	13,525.00
BNP Paribas		2015.02.12	2017.05.10	IDR	6,567,882	USD	486	13,525.00
BNP Paribas		2015.02.12	2017.06.12	IDR	6,567,882	USD	486	13,525.00
BNP Paribas		2015.02.12	2017.07.10	IDR	6,567,882	USD	486	13,525.00
BNP Paribas		2015.02.12	2017.08.10	IDR	2,889,868	USD	214	13,525.00

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

11.

Derivatives, Continued

(3)

Currency swap contracts which are not designated as hedge instruments as of March 31, 2016 are as follows:


In millions of won and thousands of foreign currencies
Counterparty	Contract year	Contract amount				Contract interest rate				Contract exchange rate
Counterparty	Contract year	Pay		Receive		Pay (%)			Receive (%)	Contract exchange rate

Deutsche Bank	2013~2018	W	110,412	JPY	10,000,000		6.21	%	4.19%		11.04
IBK	2013~2018		111,800	USD	100,000		3.16	%	2.79%		1,118.00
Bank of America	2013~2018		103,580	JPY	10,000,000		7.05	%	4.19%		10.36
Credit Suisse	2014~2019		118,632	CHF	100,000		2.98	%	1.50%		1,186.32
Standard Chartered	2014~2019		114,903	CHF	100,000		4.00	%	1.50%		1,149.03
Standard Chartered	2014~2029		102,470	USD	100,000		3.14	%	3.57%		1,024.70
Standard Chartered	2014~2017		51,215	USD	50,000		2.24	%	3M Libor+0.55%		1,024.30
Mizuho Bank	2014~2017		153,645	USD	150,000		2.35	%	3M Libor+0.65%		1,024.30
Societe Generale	2014~2024		105,017	USD	100,000		4.92	%	5.13%		1,050.17
KEB Hana Bank	2015~2024		107,970	USD	100,000		4.75	%	5.13%		1,079.70
Credit Agricole	2015~2024		94,219	USD	86,920		4.85	%	5.13%		1,083.97
Citibank	2012~2022		112,930	USD	100,000		2.79	%	3.00%		1,129.30
JP Morgan	2012~2022		112,930	USD	100,000		2.79	%	3.00%		1,129.30
Bank of America	2012~2022		112,930	USD	100,000		2.79	%	3.00%		1,129.30
Goldman Sachs	2012~2022		112,930	USD	100,000		2.79	%	3.00%		1,129.30
HSBC	2012~2022		111,770	USD	100,000		2.89	%	3.00%		1,117.70
KEB Hana Bank	2012~2022		111,770	USD	100,000		2.87	%	3.00%		1,117.70
Standard Chartered	2012~2022		111,770	USD	100,000		2.89	%	3.00%		1,117.70
Deutsche Bank	2012~2022		55,885	USD	50,000		2.79	%	3.00%		1,117.70
DBS	2013~2018		108,140	USD	100,000		2.63	%	3M Libor+0.84%		1,081.40
DBS	2013~2018		108,140	USD	100,000		2.57	%	3M Libor+0.84%		1,081.40
DBS	2013~2018		108,140	USD	100,000		2.57	%	3M Libor+0.84%		1,081.40
HSBC	2013~2018		107,450	USD	100,000		3.41	%	2.88%		1,074.50
Standard Chartered	2013~2018		107,450	USD	100,000		3.44	%	2.88%		1,074.50
JP Morgan	2013~2018		107,450	USD	100,000		3.48	%	2.88%		1,074.50
Bank of America	2014~2018		107,450	USD	100,000		3.09	%	2.88%		1,074.50
Citibank	2014~2018		107,450	USD	100,000		3.09	%	2.88%		1,074.50
JP Morgan	2014~2017		102,670	USD	100,000		2.89	%	3M Libor+0.78%		1,026.70
Deutsche Bank	2014~2017		102,670	USD	100,000		2.89	%	3M Libor+0.78%		1,026.70
HSBC	2014~2019		105,260	USD	100,000		2.48	%	2.38%		1,052.60
Standard Chartered	2014~2019		105,260	USD	100,000		2.48	%	2.38%		1,052.60
RBS	2014~2019		105,260	USD	100,000		2.48	%	2.38%		1,052.60
Nomura	2015~2025		111,190	USD	100,000		2.60	%	3.25%		1,111.90
Korea Development Bank	2015~2025		111,190	USD	100,000		2.62	%	3.25%		1,111.90
Woori Bank	2015~2025		55,595	USD	50,000		2.62	%	3.25%		1,111.90
KEB Hana Bank	2015~2025		55,595	USD	50,000		2.62	%	3.25%		1,111.90

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

11.

Derivatives, Continued

(4)

Currency swap contracts which are designated as hedge instruments as of March 31, 2016 are as follows:


In millions of won and thousands of foreign currencies
Counterparty	Contract year	Contract amount				Contract interest rate		Contract exchange rate
Counterparty	Contract year	Pay		Receive		Pay (%)	Receive (%)	Contract exchange rate

Citibank	2006~2016	W	113,200	USD	100,000	1.05%	6.00%		1,132.00
Barclays Bank PLC	2006~2016		113,200	USD	100,000	1.05%	6.00%		1,132.00
Credit Suisse	2006~2016		113,200	USD	100,000	1.05%	6.00%		1,132.00
Goldman Sachs	2011~2017		105,260	USD	100,000	3.99%	3.63%		1,052.60
Barclays Bank PLC	2011~2017		105,260	USD	100,000	3.99%	3.63%		1,052.60
Citibank	2011~2017		105,260	USD	100,000	3.99%	3.63%		1,052.60
Citibank	2013~2018		54,570	USD	50,000	2.90%	3M Libor+1.01%		1,091.40
Standard Chartered	2013~2018		54,570	USD	50,000	2.90%	3M Libor+1.01%		1,091.40
Credit Suisse	2013~2018		111,410	USD	100,000	3.22%	3M Libor+1.50%		1,114.10
HSBC	2014~2020		99,901	AUD	100,000	3.52%	5.75%		999.01
HSBC	2014~2020		100,482	AUD	100,000	3.48%	5.75%		1,004.82
Standard Chartered	2013~2020		117	AUD	125,000	3M Libor+1.25%	5.75%		0.94
Standard Chartered	2014~2020		126,032	USD	117,250	3.55%	3M Libor+1.25%		1,074.90
JP Morgan	2014~2019		107,190	USD	100,000	3.25%+Floating rate	2.75%		1,071.90
Morgan Stanley	2014~2019		107,190	USD	100,000	3.25%+Floating rate	2.75%		1,071.90
Deutsche Bank	2014~2019		107,190	USD	100,000	3.25%+Floating rate	2.75%		1,071.90
Korea Development Bank	2016~2021		121,000	USD	100,000	2.15%	2.50%		1,210.00
Morgan Stanley	2016~2021		121,000	USD	100,000	2.10%+Floating rate	2.50%		1,210.00
BNP Paribas	2016~2021		121,000	USD	100,000	2.10%+Floating rate	2.50%		1,210.00
Barclays Bank PLC	2006~2016		71,888	USD	75,000	4.81%	5.50%		958.50
Deutsche Bank AG	2006~2016		71,888	USD	75,000	4.81%	5.50%		958.50
Barclays Bank PLC	2012~2017		142,500	USD	125,000	3.83%	3.13%		1,140.00
Morgan Stanley	2012~2017		142,500	USD	125,000	3.83%	3.13%		1,140.00
Credit Agricole	2012~2017		142,500	USD	125,000	3.83%	3.13%		1,140.00
JP Morgan	2012~2017		142,500	USD	125,000	3.83%	3.13%		1,140.00
Credit Agricole	2013~2019		118,343	CHF	100,000	3.47%	1.63%		1,183.43
Barclays Bank PLC	2013~2019		59,172	CHF	50,000	3.47%	1.63%		1,183.43
Nomura	2013~2019		59,172	CHF	50,000	3.47%	1.63%		1,183.43
Barclays Bank PLC	2013~2018		107,360	USD	100,000	3.34%	2.88%		1,073.60
Credit Agricole	2013~2018		107,360	USD	100,000	3.34%	2.88%		1,073.60
JP Morgan	2013~2018		161,040	USD	150,000	3.34%	2.88%		1,073.60
Standard Chartered	2013~2018		161,040	USD	150,000	3.34%	2.88%		1,073.60
Standard Chartered	2014~2019		104,490	USD	100,000	2.77%	2.63%		1,044.90
Credit Agricole	2014~2019		104,490	USD	100,000	2.77%	2.63%		1,044.90
Barclays Bank PLC	2014~2019		104,490	USD	100,000	2.77%	2.63%		1,044.90
Barclays Bank PLC	2013~2018		81,188	USD	75,000	2.65%	1.88%		1,082.50
Credit Agricole	2013~2018		81,188	USD	75,000	2.65%	1.88%		1,082.50
Deutsche Bank	2013~2018		81,188	USD	75,000	2.65%	1.88%		1,082.50
Citibank	2013~2018		81,188	USD	75,000	2.65%	1.88%		1,082.50
Standard Chartered	2014~2017		54,205	USD	50,000	2.93%	3M Libor+1.05%		1,084.10
Credit Agricole	2014~2017		54,205	USD	50,000	2.93%	3M Libor+1.05%		1,084.10
HSBC	2012~2017		115,140	USD	100,000	3.38%	2.50%		1,151.40
BNP Paribas	2012~2017		115,140	USD	100,000	3.38%	2.50%		1,151.40
KEB Hana Bank	2012~2017		115,140	USD	100,000	3.38%	2.50%		1,151.40
Barclays Bank PLC	2012~2017		57,570	USD	50,000	3.38%	2.50%		1,151.40
Standard Chartered	2012~2017		57,570	USD	50,000	3.38%	2.50%		1,151.40
Nomura	2012~2017		57,570	USD	50,000	3.38%	2.50%		1,151.40
Credit Agricole	2012~2017		57,570	USD	50,000	3.38%	2.50%		1,151.40
Societe Generale	2013~2018		106,190	USD	100,000	3.48%	2.63%		1,061.90
BNP Paribas	2013~2018		53,095	USD	50,000	3.48%	2.63%		1,061.90
KEB Hana Bank	2013~2018		53,095	USD	50,000	3.48%	2.63%		1,061.90

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

11.

Derivatives, Continued

(4)

Currency swap contracts which are designated as hedge instruments as of March 31, 2016 are as follows, continued:


In millions of won and thousands of foreign currencies
		Contract amount				Contract interest rate		Contract exchange rate
Counterparty	Contract year	Pay		Receive		Pay (%)	Receive (%)	Contract exchange rate

Standard Chartered	2013~2018	W	106,030	USD	100,000	3.48%	2.63%		1,060.30
Barclays Bank PLC	2013~2018		53,015	USD	50,000	3.48%	2.63%		1,060.30
KEB Hana Bank	2013~2018		31,809	USD	30,000	3.48%	2.63%		1,060.30
Societe Generale	2013~2018		21,206	USD	20,000	3.48%	2.63%		1,060.30
HSBC	2013~2018		53,015	USD	50,000	3.47%	2.63%		1,060.30
Nomura	2013~2018		53,015	USD	50,000	3.47%	2.63%		1,060.30
Credit Agricole	2014~2020		110,680	USD	100,000	2.29%	2.50%		1,106.80
Societe Generale	2014~2020		55,340	USD	50,000	2.16%	2.50%		1,106.80
KEB Hana Bank	2014~2020		55,340	USD	50,000	2.16%	2.50%		1,106.80
KEB Hana Bank	2014~2020		55,340	USD	50,000	2.21%	2.50%		1,106.80
Standard Chartered	2014~2020		55,340	USD	50,000	2.21%	2.50%		1,106.80
HSBC	2014~2020		55,340	USD	50,000	2.21%	2.50%		1,106.80
Nomura	2014~2020		55,340	USD	50,000	2.21%	2.50%		1,106.80
Barclays Bank PLC	2014~2020		55,340	USD	50,000	2.21%	2.50%		1,106.80
HSBC	2014~2020		55,340	USD	50,000	2.21%	2.50%		1,106.80

(5)

Interest rate swap contracts which are not designated as hedge instruments as of March 31, 2016 are as follows:


In millions of won
Counterparty	Contract year	Contract amount		Contract interest rate per annum
Counterparty	Contract year	Contract amount		Pay (%)	Receive (%)

Korea Development Bank	2012~2016	W	200,000	3.57%	3M CD + 0.26%
Nonghyup Bank	2012~2016		100,000	3.49%	3M CD + 0.25%
Korea Development Bank	2012~2016		50,000	3.49%	3M CD + 0.25%
HSBC	2012~2016		50,000	3.49%	3M CD + 0.25%
Standard Chartered	2012~2016		200,000	3.55%	3M CD + 0.26%
Standard Chartered	2012~2017		160,000	3.57%	3M CD + 0.32%
JP Morgan	2013~2018		150,000	3.58%	3M CD + 0.31%
KEB Hana Bank	2013~2016		200,000	2.57%	3M CD + 0.04%
KEB Hana Bank	2013~2016		100,000	2.75%	3M CD + 0.03%
Credit Suisse	2014~2018		200,000	2.98%	1Y CMT + 0.31%
Korea Development Bank (*)	2014~2029		40,000	3M CD - 0.03%	4.65%

(*)

The contract is an interest rate swap hedging on Electricity Bonds 885, and the banks would notify the Company of the early termination every year on the early termination notification date (every year on April 28, from 2017 until 2028). The contract will be terminated if the early termination is notified.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

11.

Derivatives, Continued

(6)

Interest rate swap contracts which are designated as hedge instruments, as of March 31, 2016 are as follows:


In thousands of U.S. dollars
Counterparty	Contract year	Contract amount		Contract interest rate per annum
Counterparty	Contract year	Contract amount		Pay (%)	Receive (%)

BNP Paribas	2009~2027	USD	99,920	4.16%	6M USD Libor
KFW	2009~2027	USD	99,920	4.16%	6M USD Libor
CA-CIB (Credit Agricole)	2015~2033	USD	103,012	3.98%~4.10%	6M USD Libor
SMBC	2015~2033	USD	134,708	4.05%~4.18%	6M USD Libor
The Export-Import Bank of Korea	2015~2031	USD	8,826	2.67%	6M USD Libor
ING Bank	2015~2031	USD	7,861	2.67%	6M USD Libor
BNP Paribas	2015~2031	USD	7,861	2.67%	6M USD Libor

(7)

Gains and losses on valuation and transaction of derivatives for the three-month periods ended March 31, 2016 and 2015 are as follows and included in finance income and costs in the consolidated statements of comprehensive income:


In millions of won	Net income effects of valuation gain (loss)						Net income effects of transaction gain (loss)						Accumulated other *comprehensive income (loss) ()**
	March 31, 2016			March 31, 2015			March 31, 2016			March 31, 2015			March 31, 2016			March 31, 2015
Currency forward	W	(10,575	)		2,876			1,295			3,538			—			—
Currency swap		(121,839	)		68,567			2,478			(5,349	)		(22,254	)		34,667
Interest rate swap		4,997			(6,680	)		(672	)		(643	)		(17	)		(7,920	)


	W	(127,417	)		64,763			3,101			(2,454	)		(22,271	)		26,747

(*)	As of March 31, 2016, the net gain on valuation of derivatives using cash flow hedge accounting of W12,804 million, net of tax, is included in other comprehensive income or loss.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

12.

Other Financial Assets

(1)

Other financial assets as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016						December 31, 2015
	Current			Non-current			Current			Non-current

Loans and receivables	W	108,103			699,101			106,013			678,126
Allowance for doubtful accounts		—			(3,559	)		—			—
Present value discount		(1,050	)		(47,948	)		(859	)		(48,223	)
Long-term/short-term financial instruments		3,682,752			903,900			5,132,829			758,037


	W	3,789,805			1,551,494			5,237,983			1,387,940

(2)

Loans and receivables as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Face value		Allowance for doubtful accounts			Present value discount			Book value
Short-term loans and receivables
Loans for tuition	W	29,499		—			(1,050	)		28,449
Loans for housing		11,973		—			—			11,973
Fisheries loan		6,352		—			—			6,352
Other loans		60,279		—			—			60,279

		108,103		—			(1,050	)		107,053

Long-term loans and receivables
Loans for tuition		407,555		—			(47,626	)		359,929
Loans for housing		127,297		—			—			127,297
Loans for related parties		105,474		(3,559	)		—			101,915
Fisheries loan		1,344		—			(322	)		1,022
Other loans		57,431		—			—			57,431

		699,101		(3,559	)		(47,948	)		647,594


	W	807,204		(3,559	)		(48,998	)		754,647


In millions of won	December 31, 2015
	Face value		Present value discount			Book value
Short-term loans and receivables
Loans for tuition	W	29,209		(859	)		28,350
Loans for housing		11,170		—			11,170
Fisheries loan		6,032		—			6,032
Other loans		59,602		—			59,602

		106,013		(859	)		105,154

Long-term loans and receivables
Loans for tuition		390,738		(47,822	)		342,916
Loans for housing		132,239		—			132,239
Loans for related parties		99,768		—			99,768
Fisheries loan		1,664		(401	)		1,263
Other loans		53,717		—			53,717

		678,126		(48,223	)		629,903


	W	784,139		(49,082	)		735,057

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

12.

Other Financial Assets, Continued

(3)

Changes in the allowance for doubtful accounts of Loans and receivables for the three-month period ended March 31, 2016 are as follows:


In millions of won	March 31, 2016
Beginning balance	W	—
Bad debt expense		3,707
Other		(148	)

Ending balance		3,559

(4)

Long-term and short-term financial instruments as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016				December 31, 2015
	Current		Non-current		Current		Non-current

Time deposits	W	1,586,437		2		2,131,089		3
ABCP		1,742,235		150,870		2,598,791		5,000
CP		281,070		—		48,350		—
CD		301		—		163,649		—
RP		70,000		652,700		—		652,700
Others		2,709		100,328		190,950		100,334


	W	3,682,752		903,900		5,132,829		758,037

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

13.

Inventories

Inventories as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Acquisition cost		Valuation allowance			Book value

Raw materials	W	3,365,118		(1,238	)		3,363,880
Work-in-progress		108,391		—			108,391
Finished goods		58,634		—			58,634
Supplies		1,099,775		(4,367	)		1,095,408
Inventories in transit		378,728		—			378,728
Other inventories		9,231		—			9,231


	W	5,019,877		(5,605	)		5,014,272


In millions of won	December 31, 2015
	Acquisition cost		Valuation allowance			Book value

Raw materials	W	3,304,220		(1,238	)		3,302,982
Work-in-progress		133,226		—			133,226
Finished goods		51,073		—			51,073
Supplies		1,062,307		(4,428	)		1,057,879
Inventories in transit		392,340		—			392,340
Other inventories		8,913		—			8,913


	W	4,952,079		(5,666	)		4,946,413

The reversal of the allowance for loss on inventory valuation due to increases in the net realizable value of inventory deducted from cost of sales was W156 million for the three-month period ended March 31, 2016. The allowance for loss on inventory valuation due to decreases in the net realizable value of inventory added to cost of sales was W533 million for the year ended December 31, 2015. The amounts of loss from inventory valuation included in other gains or losses were W95 million for the three-month period ended March 31, 2016 and W1,318 million for the year ended December 31, 2015, respectively.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

14.

Finance Lease Receivables

(1)

Finance lease contracts

The Company entered into a power purchase agreement (“PPA”) with Jordan Electric Power Company to provide a 373MW level Qatrana gas combined power plant over a 25 year lease term, and accounts for the PPA as a finance lease. Also, the Company has fly-ash pipe conduit finance leases with an average lease term of 7 years. In addition, the Company entered into a PPA with the Comision Federal de Electricidad in Mexico to provide for 25 years of all electricity generated from the power plant after completion of its construction and collect rates consisting of fixed costs (to recover the capital) and variable costs during the contracted period.

(2)

Finance lease receivables as of March 31, 2016 and December 31, 2015 are as follows and included in current and non-current trade and other receivables, net, in the consolidated statements of financial position:


In millions of won	March 31, 2016				December 31, 2015
	Minimum lease payments		Present value of minimum lease payments		Minimum lease payments		Present value of minimum lease payments

Less than 1 year	W	98,294		12,008		98,488		12,098
1 ~ 5 years		401,453		200,140		407,426		203,699
More than 5 years		1,633,582		725,092		1,689,281		738,011


	W	2,133,329		937,240		2,195,195		953,808

(3)

There are no impaired finance lease receivables as of March 31, 2016 and December 31, 2015.

15.

Non-Financial Assets

Non-financial assets as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016				December 31, 2015
	Current		Non-current		Current		Non-current

Advance payment	W	128,571		23,567		102,842		25,172
Prepaid expenses		206,605		86,500		159,378		85,105
Others (*)		146,840		18,592		135,730		20,956


	W	482,016		128,659		397,950		131,233

(*)	Details of others as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016				December 31, 2015
	Current		Non-current		Current		Non-current

Tax refund receivables	W	10,955		2,616		39,158		2,658
Others		135,885		15,976		96,572		18,298


	W	146,840		18,592		135,730		20,956

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

16.

Consolidated Subsidiaries

(1)

Consolidated subsidiaries as of March 31, 2016 and December 31, 2015 are as follows:


Subsidiaries	Key operation activities	Location	Percentage of ownership (%)
Subsidiaries	Key operation activities	Location	March 31, 2016			December 31, 2015

Korea Hydro & Nuclear Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Korea South-East Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Korea Midland Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Korea Western Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Korea Southern Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Korea East-West Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
KEPCO Engineering & Construction Company, Inc. (*1)	Architectural engineering for utility plant and others	KOREA		66.32	%		66.32	%
KEPCO Plant Service & Engineering Co., Ltd.	Utility plant maintenance and others	KOREA		52.48	%		52.48	%
KEPCO Nuclear Fuel Co., Ltd.	Nuclear fuel	KOREA		96.36	%		96.36	%
KEPCO KDN Co., Ltd.	Electric power information technology and others	KOREA		100.00	%		100.00	%
Garolim Tidal Power Plant Co., Ltd. (*2)	Power generation	KOREA		49.00	%		49.00	%
KEPCO International HongKong Ltd.	Holding company	HONG KONG		100.00	%		100.00	%
KEPCO International Philippines Inc.	Holding company	PHILIPPINES		100.00	%		100.00	%
KEPCO Gansu International Ltd.	Holding company	HONG KONG		100.00	%		100.00	%
KEPCO Philippines Holdings Inc.	Holding company	PHILIPPINES		100.00	%		100.00	%
KEPCO Philippines Corporation	Operation of utility plant	PHILIPPINES		100.00	%		100.00	%
KEPCO Ilijan Corporation	Utility plant rehabilitation and operation	PHILIPPINES		51.00	%		51.00	%
KEPCO Lebanon SARL	Operation of utility plant	LEBANON		100.00	%		100.00	%
KEPCO Neimenggu International Ltd.	Holding company	HONG KONG		100.00	%		100.00	%
KEPCO Shanxi International Ltd.	Holding company	HONG KONG		100.00	%		100.00	%
KOMIPO Global Pte Ltd.	Holding company	SINGAPORE		100.00	%		100.00	%
KEPCO Canada Energy Ltd.	Resources development	CANADA		100.00	%		100.00	%
KEPCO Netherlands B.V.	Holding company	NETHERLANDS		100.00	%		100.00	%
KOREA Imouraren Uranium Investment Corp.	Uranium mine development	FRANCE		100.00	%		100.00	%
KEPCO Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
KOSEP Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
KOMIPO Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
KOWEPO Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
KOSPO Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
KEPCO Middle East Holding Company	Holding company	BAHRAIN		100.00	%		100.00	%
Qatrana Electric Power Company	Construction and operation of utility plant	JORDAN		80.00	%		80.00	%
KHNP Canada Energy Ltd.	Resources development	CANADA		100.00	%		100.00	%
KEPCO Bylong Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
Korea Waterbury Uranium Limited Partnership	Resources development	CANADA		79.64	%		79.64	%
KEPCO Canada Uranium Investment Limited Partnership	Resources development	CANADA		100.00	%		100.00	%
Korea Electric Power Nigeria Ltd.	Operation of utility plant	NIGERIA		100.00	%		100.00	%
KEPCO Holdings de Mexico	Holding company	MEXICO		100.00	%		100.00	%
KST Electric Power Company	Construction and operation of utility plant	MEXICO		56.00	%		56.00	%
KEPCO Energy Service Company	Operation of utility plant	MEXICO		100.00	%		100.00	%
KEPCO Netherlands S3 B.V.	Holding company	NETHERLANDS		100.00	%		100.00	%
PT. KOMIPO Pembangkitan Jawa Bali	Operation of utility plant	INDONESIA		51.00	%		51.00	%
PT. Cirebon Power Service (*2)	Operation of utility plant	INDONESIA		27.50	%		27.50	%
KOWEPO International Corporation	Operation of utility plant	PHILIPPINES		99.99	%		99.99	%
KOSPO Jordan LLC	Operation of utility plant	JORDAN		100.00	%		100.00	%
EWP Philippines Corporation	Operation of utility plant	PHILIPPINES		100.00	%		100.00	%
EWP America Inc.	Holding company	USA		100.00	%		100.00	%
EWP Renewable Co.	Holding company	USA		100.00	%		100.00	%
DG Fairhaven Power, LLC	Power generation	USA		100.00	%		100.00	%
DG Kings Plaza, LLC	Power generation	USA		100.00	%		100.00	%
DG Whitefield, LLC	Power generation	USA		100.00	%		100.00	%
Springfield Power, LLC	Power generation	USA		100.00	%		100.00	%
KNF Canada Energy Limited	Resources development	CANADA		96.36	%		96.36	%
PT KEPCO Resource Indonesia	Resources development	INDONESIA		100.00	%		100.00	%

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

16.

Consolidated Subsidiaries, Continued

(1)

Consolidated subsidiaries as of March 31, 2016 and December 31, 2015 are as follows, continued:


Subsidiaries	Key operation activities	Location	Percentage of ownership (%)
Subsidiaries	Key operation activities	Location	March 31, 2016			December 31, 2015

EWP Barbados 1 SRL	Holding company	BARBADOS		100.00	%		100.00	%
California Power Holdings, LLC	Power generation	USA		100.00	%		100.00	%
Gyeonggi Green Energy Co., Ltd.	Power generation	KOREA		62.01	%		62.01	%
PT. Tanggamus Electric Power	Power generation	INDONESIA		52.50	%		52.50	%
Gyeongju Wind Power Co., Ltd.	Power generation	KOREA		70.00	%		70.00	%
KOMIPO America Inc.	Holding company	USA		100.00	%		100.00	%
EWPRC Biomass Holdings, LLC	Holding company	USA		100.00	%		100.00	%
KOSEP USA, INC.	Power generation	USA		100.00	%		100.00	%
PT. EWP Indonesia	Holding company	INDONESIA		100.00	%		100.00	%
KEPCO Netherlands J3 B.V.	Holding company	NETHERLANDS		100.00	%		100.00	%
Korea Offshore Wind Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Global One Pioneer B.V.	Holding company	NETHERLANDS		100.00	%		100.00	%
Global Energy Pioneer B.V.	Holding company	NETHERLANDS		100.00	%		100.00	%
Mira Power Limited (*3)	Power generation	PAKISTAN		76.00	%		76.00	%
KOSEP Material Co., Ltd.(*4)	Power generation	KOREA		46.22	%		46.22	%
Commerce and Industry Energy Co., Ltd.(*5)	Power generation	KOREA		59.03	%		59.03	%
KEPCO Singapore Holdings Pte., Ltd.	Holding company	SINGAPORE		100.00	%		100.00	%
KOWEPO India Private Limited	Holding company	INDIA		100.00	%		100.00	%
KEPCO KPS Philippines Corp.	Utility plant maintenance and others	PHILIPPINES		52.48	%		52.48	%
KOSPO Chile SpA	Holding company	CHILE		100.00	%		100.00	%
PT. KOWEPO Sumsel Operation and Maintenance Services	Utility plant maintenance and others	INDONESIA		95.00	%		95.00	%
HeeMang Sunlight Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Fujeij Wind Power Company	Operation of utility plant	JORDAN		100.00	%		100.00	%
KOSPO Youngnam Power Co., Ltd.	Operation of utility plant	KOREA		50.00	%		50.00	%
Global One Carbon Private Equity Investment Trust 2nd	Holding company	KOREA		96.67	%		—
Chitose Solar Power Plant LLC	Power generation	JAPAN		80.10	%		—

(*1)	Considering treasury stocks, the effective percentage of ownership is 66.62%.

(*2)	These subsidiaries are included in the consolidated financial statements as the Company obtained the majority of the voting power through the shareholders’ agreement.

(*3)	As of reporting date, the reporting period of all subsidiaries is December 31, except for Mira Power Limited which is November 30.

(*4)

According to the shareholders’ agreement reached in April 2014, Korea South-East Power Co., Ltd. (“KOSEP”) signed a contract with Long Lasting Value(“LLV”) to guarantee the principal and certain rate of return on LLV’s shares in KOSEP Material Co., Ltd. Moreover, LLV has put options to sell their investment to KOSEP. Therefore, the Company accounted for this agreement as KOSEP acquiring the shares of KOSEP Material from LLV. As such, the effective percentage of ownership is 86.20% as of March 31, 2016.

(*5)

The Company guarantees a certain return on investment related to Commerce & Industry Energy Co., Ltd. for the financial investors. The financial investors have a right to sell their shares to the Company which can be exercised 84 months after the date of investment. Accordingly, the purchase price including the return on investment is classified as a liability.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

16.

Consolidated Subsidiaries, Continued

(2)

There is no subsidiary excluded from consolidation for the three-month period ended March 31, 2016 and subsidiaries newly included in consolidation for the three-month period ended March 31, 2016 are as follows:


Subsidiary		Reason

Global One Carbon Private Equity Investment Trust 2		Newly Established
Chitose Solar Power Plant LLC		Newly Established

(3)

Summary of financial information of consolidated subsidiaries as of and for the three-month period ended March 31, 2016 and as of and for the year ended December 31, 2015 are as follows:


In millions of won
March 31, 2016
Subsidiaries	Total assets		Total liabilities		Sales		Profit (loss) for the period

Korea Hydro & Nuclear Power Co., Ltd.	W	52,449,434		28,243,723		3,309,677		1,209,147
Korea South-East Power Co., Ltd.		9,577,544		4,954,748		1,446,397		296,110
Korea Midland Power Co., Ltd.		8,327,617		4,941,611		1,132,462		202,820
Korea Western Power Co., Ltd.		9,266,204		5,539,613		1,247,306		267,009
Korea Southern Power Co., Ltd.		9,479,628		5,612,252		1,104,542		201,765
Korea East-West Power Co., Ltd.		8,953,109		4,738,509		1,304,775		298,545
KEPCO Engineering & Construction Company, Inc.		875,554		457,117		117,984		12,743
KEPCO Plant Service & Engineering Co., Ltd.		1,056,782		335,393		247,145		23,510
KEPCO Nuclear Fuel Co., Ltd.		681,392		334,999		96,263		13,737
KEPCO KDN Co., Ltd.		425,458		151,364		99,861		1,885
Garolim Tidal Power Plant Co., Ltd.		654		350		—		(6	)
KEPCO International HongKong Ltd.		171,005		2		—		1,104
KEPCO International Philippines Inc.		108,007		884		—		18,687
KEPCO Gansu International Ltd.		17,131		531		—		—
KEPCO Philippines Holdings Inc.		121,204		43		—		140
KEPCO Philippines Corporation		13,872		148		—		(144	)
KEPCO Ilijan Corporation		575,965		56,506		31,264		19,305
KEPCO Lebanon SARL		716		9,988		—		(15	)
KEPCO Neimenggu International Ltd.		173,912		343		—		(2	)
KEPCO Shanxi International Ltd.		553,770		240,518		—		(2,158	)
KOMIPO Global Pte Ltd.		186,244		763		—		2,127
KEPCO Canada Energy Ltd.		58,890		31		—		7
KEPCO Netherlands B.V.		166,376		55		—		(25	)
KOREA Imouraren Uranium Investment Corp.		229,808		285		—		573
KEPCO Australia Pty., Ltd.		530,449		1,891		922		7
KOSEP Australia Pty., Ltd.		18,954		1,462		905		(121	)
KOMIPO Australia Pty., Ltd.		18,512		882		905		(229	)
KOWEPO Australia Pty., Ltd.		19,075		1,451		905		(137	)
KOSPO Australia Pty., Ltd.		18,415		1,453		905		263
KEPCO Middle East Holding Company		146,227		150,424		—		(1,111	)
Qatrana Electric Power Company		526,544		413,699		4,940		6,020
KHNP Canada Energy Ltd.		44,962		28		—		(8	)
KEPCO Bylong Australia Pty., Ltd.		198,923		242,300		—		11,424
Korea Waterbury Uranium Limited Partnership		20,746		27		—		(13	)
KEPCO Canada Uranium Investment Limited Partnership		41,031		18		—		(1,377	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

16.

Consolidated Subsidiaries, Continued

(3)

Summary of financial information of consolidated subsidiaries as of and for the three-month period ended March 31, 2016 and as of and for the year ended December 31, 2015 are as follows, continued:


In millions of won
March 31, 2016
Subsidiaries	Total assets		Total liabilities		Sales		Profit (loss) for the period

Korea Electric Power Nigeria Ltd.	W	1,614		118		11,121		1,257
KEPCO Holdings de Mexico		333		33		—		294
KST Electric Power Company		569,037		530,278		23,015		4,591
KEPCO Energy Service Company		1,597		647		1,583		428
KEPCO Netherlands S3 B.V.		65,027		36		—		(29	)
PT. KOMIPO Pembangkitan Jawa Bali		17,762		6,339		4,800		2,822
PT. Cirebon Power Service		3,062		1,045		1,701		197
KOWEPO International Corporation		—		—		—		—
KOSPO Jordan LLC		12,446		930		1,993		403
EWP Philippines Corporation		2,071		1,013		—		(22	)
EWP America Inc. (*)		107,824		75,183		10,656		(361	)
KNF Canada Energy Limited		1,960		23		—		(11	)
PT KEPCO Resource Indonesia		1,115		17		—		(100	)
EWP Barbados 1 SRL		256,646		375		751		116
Gyeonggi Green Energy Co., Ltd.		309,311		243,919		19,909		(300	)
PT. Tanggamus Electric Power		120,146		105,783		7,966		4,789
Gyeongju Wind Power Co., Ltd.		62,102		27,674		1,908		618
KOMIPO America Inc		13,012		2,321		—		(148	)
KOSEP USA, INC.		35,903		6,062		1,538		(5,663	)
PT. EWP Indonesia		1,347		15		—		339
KEPCO Netherlands J3 B.V.		119,532		64		—		(28	)
Korea Offshore Wind Power Co., Ltd.		5,240		415		—		(437	)
Global One Pioneer B.V.		33		31		—		(19	)
Global Energy Pioneer B.V.		34		31		—		(19	)
Mira Power Limited		108,284		65,154		—		(276	)
KOSEP Material Co., Ltd.		26,140		25,624		99		(1,238	)
Commerce and Industry Energy Co., Ltd.		98,648		86,670		6,342		(933	)
KEPCO Singapore Holdings Pte., Ltd.		2,071		4		—		—
KOWEPO India Private Limited		898		10		—		—
KEPCO KPS Philippines Corp.		5,875		885		2,494		219
KOSPO Chile SpA		101		4,569		—		231
PT. KOWEPO Sumsel Operation and Maintenance Services		2,416		1,289		1,577		323
HeeMang Sunlight Power Co., Ltd.		4,606		693		1		(105	)
Fujeij Wind Power Company		715		3		—		(17	)
KOSPO Youngnam Power Co.,Ltd.		54,878		5,017		—		(142	)
Global One Carbon Private Equity Investment Trust 2		2,993		—		1		—
Chitose Solar Power Plant LLC		9,654		—		—		(1,965	)

(*)	Financial information of EWP America Inc. includes that of seven other subsidiaries, EWP Renewable Co., DG Fairhaven Power, LLC, DG Kings Plaza, LLC, DG Whitefield, LLC, Springfield Power, LLC, and California Power Holdings, LLC, and EWPRC Biomass Holdings, LLC.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

16.

Consolidated Subsidiaries, Continued

(3)


In millions of won
December 31, 2015
Subsidiaries	Total assets		Total liabilities		Sales		Profit (loss) for the period

Korea Hydro & Nuclear Power Co., Ltd.	W	51,043,890		27,386,113		10,642,352		2,465,244
Korea South-East Power Co., Ltd.		9,326,835		4,859,827		4,961,711		601,204
Korea Midland Power Co., Ltd.		7,857,199		4,648,144		3,927,443		226,244
Korea Western Power Co., Ltd.		9,225,791		5,719,032		4,214,540		294,617
Korea Southern Power Co., Ltd.		9,216,084		5,525,865		4,317,995		224,757
Korea East-West Power Co., Ltd.		8,828,603		4,836,904		4,047,655		454,942
KEPCO Engineering & Construction Company, Inc.		855,156		438,371		657,603		31,047
KEPCO Plant Service & Engineering Co., Ltd.		1,029,304		246,342		1,171,082		168,632
KEPCO Nuclear Fuel Co., Ltd.		666,677		328,364		253,524		35,115
KEPCO KDN Co., Ltd.		439,725		159,275		451,678		33,578
Garolim Tidal Power Plant Co., Ltd.		655		346		—		(76	)
KEPCO International HongKong Ltd.		172,686		18		—		4,993
KEPCO International Philippines Inc.		115,594		1,542		—		38,541
KEPCO Gansu International Ltd.		17,405		540		—		(6	)
KEPCO Philippines Holdings Inc.		132,094		26		—		24,690
KEPCO Philippines Corporation		13,998		218		—		265
KEPCO Ilijan Corporation		603,865		58,572		126,234		54,596
KEPCO Lebanon SARL		741		10,182		—		(1,541	)
KEPCO Neimenggu International Ltd.		184,860		348		—		8,027
KEPCO Shanxi International Ltd.		562,652		242,270		—		22,949
KOMIPO Global Pte Ltd.		187,885		29		—		16,572
KEPCO Canada Energy Ltd.		55,945		23		—		(64	)
KEPCO Netherlands B.V.		169,496		61		—		1,409
KOREA Imouraren Uranium Investment Corp.		224,499		263		—		5,964
KEPCO Australia Pty., Ltd.		510,892		2,541		4,510		168
KOSEP Australia Pty., Ltd.		18,180		1,581		4,729		346
KOMIPO Australia Pty., Ltd.		17,397		559		4,729		349
KOWEPO Australia Pty., Ltd.		18,320		1,578		4,729		353
KOSPO Australia Pty., Ltd.		18,358		1,567		4,729		356
KEPCO Middle East Holding Company		147,618		150,798		—		14,142
Qatrana Electric Power Company		521,206		412,587		17,844		31,767
KHNP Canada Energy Ltd.		42,731		22		—		(123	)
KEPCO Bylong Australia Pty., Ltd.		183,468		236,545		—		(23,352	)
Korea Waterbury Uranium Limited Partnership		20,370		699		—		(48	)
KEPCO Canada Uranium Investment Limited Partnership		38,804		14		—		(26,171	)
Korea Electric Power Nigeria Ltd.		1,721		1,179		55,768		309
KEPCO Holdings de Mexico		39		34		—		(13	)
KST Electric Power Company		564,358		529,439		97,879		14,631
KEPCO Energy Service Company		1,435		604		6,034		875
KEPCO Netherlands S3 B.V.		66,251		189		—		716
PT. KOMIPO Pembangkitan Jawa Bali		16,536		6,170		20,143		8,047
PT. Cirebon Power Service		2,795		1,010		6,663		459
KOWEPO International Corporation		—		—		—		—
KOSPO Jordan LLC		12,998		1,117		9,840		2,693
EWP Philippines Corporation		2,664		1,592		—		258
EWP America Inc. (*)		115,562		82,167		59,124		3,227
KNF Canada Energy Limited		1,874		18		—		(66	)
PT KEPCO Resource Indonesia		1,210		—		—		(217	)
EWP Barbados 1 SRL		260,638		370		2,829		273
Gyeonggi Green Energy Co., Ltd.		315,299		249,608		104,674		(4,111	)
PT. Tanggamus Electric Power		106,892		91,416		60,044		(7,138	)
Gyeongju Wind Power Co., Ltd.		62,600		27,822		5,993		968
KOMIPO America Inc		13,487		2,480		—		218
KOSEP USA, INC.		40,035		4,178		4,975		153
PT. EWP Indonesia		1,039		15		—		(374	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

16.

Consolidated Subsidiaries, Continued

(3)


In millions of won
December 31, 2015
Subsidiaries	Total assets		Total liabilities		Sales		Profit (loss) for the period

KEPCO Netherlands J3 B.V.	W	121,492		81		—		18,858
Korea Offshore Wind Power Co., Ltd.		7,579		2,317		—		(4,213	)
Global One Pioneer B.V.		40		20		—		(48	)
Global Energy Pioneer B.V.		42		20		—		(48	)
Mira Power Limited		110,918		66,963		—		(1,581	)
KOSEP Material Co., Ltd.		29,768		28,013		26,310		(17,665	)
Commerce and Industry Energy Co., Ltd.		99,638		86,727		24,774		(3,387	)
KEPCO Singapore Holdings Pte., Ltd.		1,817		—		—		(9	)
KOWEPO India Private Limited		911		10		—		(105	)
KEPCO KPS Philippines Corp.		5,688		953		14,278		1,677
KOSPO Chile SpA		133		4,642		—		(942	)
PT. KOWEPO Sumsel Operation and Maintenance Services		2,053		51		5,405		1,762
HeeMang Sunlight Power Co., Ltd.		4,711		—		—		(9	)
Fujeij Wind Power Company		83		—		—		—
KOSPO Youngnam Power Co., Ltd.		82,173		32,166		—		7

(*)	Financial information of EWP America Inc. includes that of seven other subsidiaries, EWP Renewable Co., DG Fairhaven Power, LLC, DG Kings Plaza, LLC, DG Whitefield, LLC, Springfield Power, LLC, and California Power Holdings, LLC, and EWPRC Biomass Holdings, LLC.

(4)

Significant restrictions on abilities to subsidiaries are as follows:


Company		Nature and extent of any significant restrictions
Gyeonggi Green Energy Co., Ltd.		Acquisition or disposal of assets of more than W35 billion, change in the capacity of cogeneration units (except for the change due to performance improvement of equipment, maintenance) will require unanimous consent of all directors.

KOSPO Youngnam Power Co., Ltd.		Dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained. Shares cannot be wholly or partially transferred without written consent of financial institutions.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

16.

Consolidated Subsidiaries, Continued

(5)

Details of non-controlling interest prior to intra-group eliminations as of and for the three-month period ended March 31, 2016 and as of and for the year ended December 31, 2015 are as follows:


In millions of won
March 31, 2016
Description	KEPCO Ilijan Corporation			KEPCO Plant Service & Engineering Co., Ltd.			KEPCO Engineering & Construction Company, Inc.			Others			Total

Percentage of ownership		49.00	%		47.52	%		33.37	%
Current assets	W	153,275			564,177			357,944			600,648			1,676,044
Non-current assets		422,690			492,605			517,610			2,019,097			3,452,002
Current liabilities		(22,086	)		(263,086	)		(346,756	)		(261,814	)		(893,742	)
Non-current liabilities		(34,420	)		(72,307	)		(110,361	)		(1,586,963	)		(1,804,051	)
Net assets		519,459			721,389			418,437			770,968			2,430,253
Book value of non-controlling interest		254,535			342,804			139,632			649,035			1,386,006
Sales		31,264			247,145			117,984			171,016			567,409
Profit for the period		19,305			23,510			12,743			28,435			83,993
Profit for the period attributable to non-controlling interest		9,459			11,172			4,252			6,630			31,513
Cash flows from operating activities		34,686			(29,992	)		(21,340	)		(34,443	)		(51,089	)
Cash flows from investing activities		(5,195	)		(8,437	)		475			(43,781	)		(56,938	)
Cash flows from financing activities before dividends to non-controlling interest		(19,442	)		36,139			31,539			52,498			100,734
Dividends to non-controlling interest		(17,803	)		(36,139	)		(2,539	)		(4,534	)		(61,015	)
Effect of exchange rate fluctuation		(681	)		(174	)		(437	)		8,382			7,090
Net increase (decrease) of cash and cash equivalents		(8,435	)		(38,603	)		7,698			(21,878	)		(61,218	)


In millions of won
December 31, 2015
Description	KEPCO Ilijan Corporation			KEPCO Plant Service & Engineering Co., Ltd.			KEPCO Engineering & Construction Company, Inc.			Others			Total

Percentage of ownership		49.00	%		47.52	%		33.37	%
Current assets	W	161,855			547,152			341,559			631,442			1,682,008
Non-current assets		442,010			482,152			513,597			1,976,302			3,414,061
Current liabilities		(22,522	)		(195,030	)		(342,315	)		(296,152	)		(856,019	)
Non-current liabilities		(36,050	)		(51,312	)		(96,056	)		(1,566,200	)		(1,749,618	)
Net assets		545,293			782,962			416,785			745,392			2,490,432
Book value of non-controlling interest		267,194			372,064			139,081			644,787			1,423,126
Sales		126,234			1,171,082			657,603			637,544			2,592,463
Profit for the period		54,596			168,632			31,047			61,554			315,829
Profit for the period attributable to non-controlling interest		26,752			78,852			10,360			11,802			127,766
Cash flows from operating activities		83,697			140,625			11,280			(29,888	)		205,714
Cash flows from investing activities		(16,021	)		(104,477	)		(134,874	)		(178,241	)		(433,613	)
Cash flows from financing activities before dividends to non-controlling interest		(39,730	)		(40,581	)		69,955			226,976			216,620
Dividends to non-controlling interest		(36,080	)		(34,569	)		(7,300	)		(24,577	)		(102,526	)
Effect of exchange rate fluctuation		4,123			3			(51	)		6,399			10,474
Net increase (decrease) of cash and cash equivalents		(4,011	)		(38,999	)		(60,990	)		669			(103,331	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

16.

Consolidated Subsidiaries, Continued

(6)

Changes in goodwill

(i)

Details of goodwill as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won
	March 31, 2016		December 31, 2015

Acquisition cost	W	2,582		2,582
Accumulated impairment		—		—


Carrying book value	W	2,582		2,582

(ii)

There are no changes in goodwill for the three-month period ended March 31, 2016 and for the year ended December 31, 2015.

(7)

Disposals of subsidiaries

The Company disposed the shares of Boulder Solar Power, LLC and liquidated KOWEPO America LLC during the year ended December 31, 2015.

(i)

The fair value of sales price as of December 31, 2015 is as follows:


In millions of won
	December 31, 2015

Consideration received in cash	W	10,664
Fair value of remaining shares after disposal		13,860


Total	W	24,524

(ii)

The carrying value of assets and liabilities of subsidiaries as at the date the Company lost its control during the year ended December 31, 2015 is as follows:


In millions of won
	December 31, 2015
Current assets
Cash and cash equivalents	W	10,071
Current financial assets, net		1,077

Non-current assets
Property, plant and equipment, net		2,460
Other		2,893


Current liabilities
Current non-financial liabilities		(7	)


	W	16,494

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

16.

Consolidated Subsidiaries, Continued

(7)

Disposals of subsidiaries, continued

(iii)

Gain from disposals of subsidiaries for the year ended December 31, 2015 is as follows:


In millions of won
	December 31, 2015

Fair value of sale price	W	24,524
Net assets disposed		(16,494	)
Non-controlling interests		—
Realization of unrealized gain		—
Other comprehensive income (*1)		346


Gain from disposals of subsidiaries (*2)	W	8,376

(*1)	This represents the amount subsequently reclassified from other comprehensive income to profit for the period when the Company lost its control of the subsidiaries.

(*2)	Gain from disposals of subsidiaries is included in the consolidated statements of comprehensive income.

(iv)

Net cashflow from sales of subsidiaries for the year ended December 31, 2015 is as follows:


In millions of won
	December 31, 2015

Consideration received in cash	W	10,664
Less: cash held by disposed subsidiaries		(10,071	)


Net cash flow	W	593

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures

(1)

Investments in associates and joint ventures as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won
March 31, 2016
Investees	Key operation activities	Location	Percentage of ownership			Acquisition cost		Book value

<Associates>
Daegu Green Power Co., Ltd.	Power generation	KOREA		49.90	%	W	79,540		92,461
Korea Gas Corporation (*1)	Importing and wholesaling LNG	KOREA		20.47	%		94,500		2,201,779
Korea Electric Power Industrial Development Co., Ltd.	Electricity metering	KOREA		29.00	%		4,727		18,746
YTN Co., Ltd.	Broadcasting	KOREA		21.43	%		59,000		37,268
Cheongna Energy Co., Ltd.	Generating and distributing vapor and hot/cold water	KOREA		43.90	%		49,607		19,836
Gangwon Wind Power Co., Ltd. (*2)	Power generation	KOREA		15.00	%		5,725		12,574
Hyundai Green Power Co., Ltd.	Power generation	KOREA		29.00	%		88,885		108,879
Korea Power Exchange (*6)	Management of power market	KOREA		100.00	%		127,839		219,136
AMEC Partners Korea Ltd. (*3)	Resources development	KOREA		19.00	%		707		226
Hyundai Energy Co., Ltd. (*9)	Power generation	KOREA		29.00	%		30,118		5,918
Ecollite Co., Ltd.	Artificial light-weight aggregate	KOREA		36.10	%		1,516		—
Taebaek Wind Power Co., Ltd.	Power generation	KOREA		25.00	%		3,810		4,390
Muju Wind Power Co., Ltd.	Power generation	KOREA		25.00	%		2,850		2,548
Pyeongchang Wind Power Co., Ltd.	Power generation	KOREA		25.00	%		3,875		3,304
Daeryun Power Co., Ltd. (*3, 10)	Power generation	KOREA		13.13	%		25,477		35,354
JinanJangsu Wind Power Co., Ltd.	Power generation	KOREA		25.00	%		100		64
Changjuk Wind Power Co., Ltd.	Power generation	KOREA		30.00	%		3,801		6,281
KNH Solar Co., Ltd.	Power generation	KOREA		27.00	%		1,296		1,769
SPC Power Corporation	Power generation	PHILIPPINES		38.00	%		20,635		60,913
Gemeng International Energy Co., Ltd.	Power generation	CHINA		34.00	%		413,153		738,329
PT. Cirebon Electric Power	Power generation	INDONESIA		27.50	%		40,365		61,727
KNOC Nigerian East Oil Co., Ltd. (*4)	Resources development	NIGERIA		14.63	%		12		—
KNOC Nigerian West Oil Co., Ltd. (*4)	Resources development	NIGERIA		14.63	%		12		—
Dolphin Property Limited (*4)	Rental company	NIGERIA		15.00	%		12		60
PT. Wampu Electric Power	Power generation	INDONESIA		46.00	%		21,292		17,650
PT. Bayan Resources TBK	Resources development	INDONESIA		20.00	%		615,860		510,474
S-Power Co., Ltd.	Power generation	KOREA		49.00	%		132,300		131,981
Pioneer Gas Power Limited (*8)	Power generation	INDIA		40.00	%		49,831		50,796
Eurasia Energy Holdings	Power generation and resources development	RUSSIA		40.00	%		461		—
Xe-Pian Xe-Namnoy Power Co., Ltd.	Power generation	LAOS		25.00	%		32,717		29,475
Busan Solar Co., Ltd. (*3)	Power generation	KOREA		19.80	%		793		939
Hadong Mineral Fiber Co., Ltd.	Recycling fly ashes	KOREA		25.00	%		50		—
Green Biomass Co., Ltd. (*12)	Power generation	KOREA		14.00	%		714		150
PT. Mutiara Jawa	Manufacturing and operating floating coal terminal	INDONESIA		29.00	%		2,978		—
Samcheok Eco Material Co., Ltd. (*3, 11)	Recycling fly ashes	KOREA		2.67	%		686		—
Noeul Green Energy Co., Ltd.	Power generation	KOREA		20.00	%		400		257
Naepo Green Energy Co., Ltd.	Power generation	KOREA		25.00	%		29,200		26,368
Goseong Green Energy Co., Ltd. (*2)	Power generation	KOREA		2.90	%		2,900		2,632
Gangneung Eco Power Co., Ltd. (*2)	Power generation	KOREA		3.72	%		2,900		2,655
Shin Pyeongtaek Power Co., Ltd.	Power generation	KOREA		40.00	%		40		—
Heang Bok Do Si Photovoltaic Power Co., Ltd.	Power generation	KOREA		28.00	%		194		168
DS POWER Co., Ltd. (*2)	Power generation	KOREA		10.91	%		17,900		10,814
Dongducheon Dream Power Co., Ltd.	Power generation	KOREA		33.61	%		107,958		57,429
KS Solar Co., Ltd. (*3)	Power generation	KOREA		19.00	%		637		543
Yeongwol Energy Station Co., Ltd. (*2)	Power generation	KOREA		10.00	%		1,400		1,342
Jinbhuvish Power Generation Pvt. Ltd.(*2)	Power generation	INDIA		5.16	%		9,000		8,407
SE Green Energy Co., Ltd.	Power generation	KOREA		47.76	%		3,821		3,563
Daegu Photovoltaic Co., Ltd.	Power generation	KOREA		29.00	%		1,230		1,982
Jeongam Wind Power Co., Ltd.	Power generation	KOREA		40.00	%		1,680		659
Korea Power Engineering Service Co., Ltd.	Construction and service	KOREA		29.00	%		290		2,195
Busan Green Energy Co., Ltd.	Power generation	KOREA		29.00	%		14,564		14,332
Jungbu Bio Energy Co., Ltd. (*2)	Power generation	KOREA		18.87	%		1,000		872
Korea Electric Vehicle Charging Service	Electric vehicle charge service	KOREA		28.00	%		1,596		1,354
Ulleungdo Natural Energy Co., Ltd.	Renewable power generation	KOREA		29.85	%		8,000		7,347
Korea Nuclear Partners Co., Ltd.	Electric material agency	KOREA		29.00	%		290		273
Tamra Offshore Wind Power Co., Ltd	Power generation	KOREA		27.00	%		8,910		7,847


						W	2,129,154		4,524,066

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(1)

Investments in associates and joint ventures as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won
March 31, 2016
Investees	Key operation activities	Location	Percentage of ownership			Acquisition cost		Book value

<Joint ventures>
KEPCO-Uhde Inc. (*7)	Power generation	KOREA		52.80	%	W	11,355		8,473
Eco Biomass Energy Sdn. Bhd. (*7)	Power generation	MALAYSIA		61.53	%		9,661		—
Datang Chaoyang Renewable Power Co., Ltd.	Power generation	CHINA		40.00	%		27,660		27,614
Shuweihat Asia Power Investment B.V.	Holding company	NETHERLANDS		49.00	%		50,017		10,420
Shuweihat Asia Operation & Maintenance Company (*7)	Maintenance of utility plant	CAYMAN		55.00	%		30		711
Waterbury Lake Uranium L.P.	Resources development	CANADA		38.43	%		26,602		20,648
ASM-BG Investicii AD	Power generation	BULGARIA		50.00	%		16,101		20,646
RES Technology AD	Power generation	BULGARIA		50.00	%		15,595		13,842
KV Holdings, Inc.	Power generation	PHILIPPINES		40.00	%		2,103		2,023
KEPCO SPC Power Corporation (*7)	Construction and operation of utility plant	PHILIPPINES		75.20	%		94,579		226,617
Canada Korea Uranium Limited Partnership (*5)	Resources development	CANADA		12.50	%		5,404		—
KEPCO Energy Resource Nigeria Limited	Holding company	NIGERIA		30.00	%		8,463		—
Gansu Datang Yumen Wind Power Co., Ltd.	Power generation	CHINA		40.00	%		16,621		15,393
Datang Chifeng Renewable Power Co., Ltd.	Power generation	CHINA		40.00	%		121,928		172,485
Datang KEPCO Chaoyang Renewable Power Co., Ltd.	Power generation	CHINA		40.00	%		10,858		10,640
Rabigh Electricity Company	Power generation	SAUDI ARABIA		40.00	%		109,743		84,571
Rabigh Operation & Maintenance Company	Maintenance of utility plant	SAUDI ARABIA		40.00	%		70		4,175
Jamaica Public Service Company Limited	Power generation	JAMAICA		40.00	%		301,910		238,100
KW Nuclear Components Co., Ltd.	R&D	KOREA		43.36	%		833		3,668
Busan Shinho Solar Power Co., Ltd.	Power generation	KOREA		25.00	%		2,100		3,549
GS Donghae Electric Power Co., Ltd.	Power generation	KOREA		34.00	%		204,000		200,039
Global Trade Of Power System Co., Ltd.	Exporting products and technology of small or medium business by proxy	KOREA		29.00	%		290		408
Expressway Solar-light Power Generation Co., Ltd.	Power generation	KOREA		29.00	%		1,856		1,963
KODE NOVUS 1 LLC	Power generation	USA		50.00	%		19,213		—
KODE NOVUS 2 LLC	Power generation	USA		50.00	%		12,756		—
Daejung Offshore Wind Power Co., Ltd.	Power generation	KOREA		49.90	%		4,990		3,266
Amman Asia Electric Power Company (*7)	Power generation	JORDAN		60.00	%		111,476		130,587
KEPCO-ALSTOM Power Electronics Systems, Inc. (*7)	R&D	KOREA		51.00	%		5,629		4,379
Dangjin Eco Power Co., Ltd.	Power generation	KOREA		34.00	%		56,249		53,233
Honam Wind Power Co., Ltd.	Power generation	KOREA		29.00	%		3,600		4,091
Nepal Water & Energy Development Company Pty Ltd. (*7)	Construction and operation of utility plant	NEPAL		52.77	%		18,568		17,369
Chun-cheon Energy Co., Ltd.	Power generation	KOREA		29.90	%		52,700		51,432
Yeonggwangbaeksu Wind Power Co., Ltd. (*3)	Power generation	KOREA		15.00	%		3,000		2,820
Nghi Son 2 Power Ltd.	Power generation	VIETNAM		50.00	%		1,371		411
Kelar S.A (*7)	Power generation	CHILE		65.00	%		4,180		—
PT. Tanjung Power Indonesia	Power generation	INDONESIA		35.00	%		746		979
Incheon New Power Co., Ltd.	Power generation	KOREA		29.00	%		461		530
Seokmun Energy Co., Ltd.	Integrated energy business	KOREA		29.00	%		580		532
Daehan Wind Power PSC	Power generation	JORDAN		50.00	%		285		213


							1,333,583		1,335,827


						W	3,462,737		5,859,893

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(1)

Investments in associates and joint ventures as of March 31, 2016 and December 31, 2015 are as follows, continued:

(*1)	The effective percentage of ownership is 21.57% considering treasury stocks.

(*2)	The Company can exercise significant influence by virtue of its contractual right to appoint directors to the board of directors of the entity, and by strict decision criteria of the Company’s financial and operating policy of the board of directors.

(*3)	The Company can exercise significant influence by virtue of its contractual right to appoint a director to the board of directors of the entity.

(*4)	The Company can exercise significant influence by virtue of its contractual right to appoint one out of four members of the steering committee of the entity. Moreover, the Company has significant financial transactions, which can affect its influence on the entity.

(*5)	The Company has joint control over the entity by virtue of its contractual right to appoint directors to the board of directors of the entity, and by strict decision criteria of the Company’s financial and operating policy of the board of directors.

(*6)

The Government regulates the Company’s ability to make operating and financial decisions over the entity, as the Government requires maintaining arms-length transactions between KPX and the Company’s other subsidiaries. The Company can exercise significant influence by its right to nominate directors to the board of directors of the entity.

(*7)	According to the shareholders’ agreement, all critical financial and operating decisions must be agreed to by all ownership parties. For these reasons, the entities are classified as joint ventures.

(*8)	As of reporting date, the reporting period of all associates and joint ventures ends in December 31, except for Pioneer Gas Power Limited whose reporting period ends on March 31.

(*9)

As of March 31, 2016, 17.3% of ownership of Hyundai Energy Co., Ltd. is held by NH Power ll Co., Ltd. and NH Bank. According to the shareholders’ agreement reached on March 2011, not only does the Company have a call option to acquire the investment in Hyundai Energy Co., Ltd. from NH Power ll Co., Ltd. and NH Bank with a certain rate of return, NH Power ll Co., Ltd. and NH Bank also have put options to dispose of their investment to the Company. In connection with this agreement, the Company applied the equity method on the investment in Hyundai Energy Co., Ltd. with 46.3% of ownership.

(*10)

The Company’s percentage of ownership has decreased due to the acquisition of Daeryun Power Co., Ltd. and the effective percentage of ownership is 19.45% considering stock purchase options.

(*11)

The Company’s effective percentage of ownership excluding the redeemable convertible preferred stock is 25.54%.

(*12)

The effective percentage of ownership is less than 20% but the Company can exercise significant influence by virtue of its contractual right to appoint a director to the board of directors of the entity and the fact that the dominant portion of the investee’s sales transactions is generated from the Company.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(1)

Investments in associates and joint ventures as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won
December 31, 2015
Investees	Key operation activities	Location	Percentage of ownership			Acquisition cost		Book value

<Associates>
Daegu Green Power Co., Ltd.	Power generation	KOREA		47.80	%	W	76,193		80,267
Korea Gas Corporation (*1)	Importing and wholesaling LNG	KOREA		20.47	%		94,500		2,102,813
Korea Electric Power Industrial Development Co., Ltd.	Electricity metering	KOREA		29.00	%		4,727		18,994
YTN Co., Ltd.	Broadcasting	KOREA		21.43	%		59,000		38,365
Cheongna Energy Co., Ltd.	Generating and distributing vapor and hot/cold water	KOREA		43.90	%		49,607		19,490
Gangwon Wind Power Co., Ltd. (*2)	Power generation	KOREA		15.00	%		5,725		12,890
Hyundai Green Power Co., Ltd.	Power generation	KOREA		29.00	%		88,885		113,664
Korea Power Exchange (*6)	Management of power market	KOREA		100.00	%		127,839		208,735
AMEC Partners Korea Ltd. (*3)	Resources development	KOREA		19.00	%		707		230
Hyundai Energy Co., Ltd. (*9)	Power generation	KOREA		29.00	%		30,118		6,990
Ecollite Co., Ltd.	Artificial light-weight aggregate	KOREA		36.10	%		1,516		—
Taebaek Wind Power Co., Ltd.	Power generation	KOREA		25.00	%		3,810		4,956
Muju Wind Power Co., Ltd.	Power generation	KOREA		25.00	%		2,850		2,587
Pyeongchang Wind Power Co., Ltd.	Power generation	KOREA		25.00	%		3,875		3,402
Daeryun Power Co., Ltd. (*3, 10)	Power generation	KOREA		13.13	%		25,477		36,156
JinanJangsu Wind Power Co., Ltd.	Power generation	KOREA		25.00	%		100		77
Changjuk Wind Power Co., Ltd.	Power generation	KOREA		30.00	%		3,801		6,143
KNH Solar Co., Ltd.	Power generation	KOREA		27.00	%		1,296		1,924
SPC Power Corporation	Power generation	PHILIPPINES		38.00	%		20,635		58,033
Gemeng International Energy Co., Ltd.	Power generation	CHINA		34.00	%		413,153		728,396
PT. Cirebon Electric Power	Power generation	INDONESIA		27.50	%		40,365		60,574
KNOC Nigerian East Oil Co., Ltd. (*4)	Resources development	NIGERIA		14.63	%		12		—
KNOC Nigerian West Oil Co., Ltd. (*4)	Resources development	NIGERIA		14.63	%		12		—
Dolphin Property Limited (*4)	Rental company	NIGERIA		15.00	%		12		61
PT. Wampu Electric Power	Power generation	INDONESIA		46.00	%		21,292		18,963
PT. Bayan Resources TBK	Resources development	INDONESIA		20.00	%		615,860		525,066
S-Power Co., Ltd.	Power generation	KOREA		49.00	%		132,300		130,908
Pioneer Gas Power Limited (*8)	Power generation	INDIA		40.00	%		49,831		51,187
Eurasia Energy Holdings	Power generation and resources development	RUSSIA		40.00	%		461		—
Xe-Pian Xe-Namnoy Power Co., Ltd.	Power generation	LAOS		25.00	%		32,717		31,863
Busan Solar Co., Ltd. (*3)	Power generation	KOREA		19.80	%		793		925
Hadong Mineral Fiber Co., Ltd.	Recycling fly ashes	KOREA		25.00	%		50		—
Green Biomass Co., Ltd. (*12)	Power generation	KOREA		14.00	%		714		—
PT. Mutiara Jawa	Manufacturing and operating floating coal terminal	INDONESIA		29.00	%		2,978		—
Samcheok Eco Material Co., Ltd. (*3, 11)	Recycling fly ashes	KOREA		2.67	%		686		—
Noeul Green Energy Co., Ltd.	Power generation	KOREA		20.00	%		400		295
Naepo Green Energy Co., Ltd.	Power generation	KOREA		25.00	%		29,200		26,746
Goseong Green Energy Co., Ltd. (*2)	Power generation	KOREA		2.90	%		2,900		2,670
Gangneung Eco Power Co., Ltd. (*2)	Power generation	KOREA		3.72	%		2,900		2,688
Shin Pyeongtaek Power Co., Ltd.	Power generation	KOREA		40.00	%		40		—
Heang Bok Do Si Photovoltaic Power Co., Ltd.	Power generation	KOREA		28.00	%		194		189
DS POWER Co., Ltd. (*2)	Power generation	KOREA		10.91	%		17,900		10,960
Dongducheon Dream Power Co., Ltd.	Power generation	KOREA		33.61	%		107,958		55,667
KS Solar Co., Ltd. (*3)	Power generation	KOREA		19.00	%		637		618
Yeongwol Energy Station Co., Ltd. (*2)	Power generation	KOREA		10.00	%		1,400		1,290
Jinbhuvish Power Generation Pvt. Ltd. (*2)	Power generation	INDIA		5.16	%		9,000		8,350
SE Green Energy Co., Ltd.	Power generation	KOREA		47.76	%		3,821		3,575
Daegu Photovoltaic Co., Ltd.	Power generation	KOREA		29.00	%		1,230		1,886
Jeongam Wind Power Co., Ltd.	Power generation	KOREA		40.00	%		1,680		702
Korea Power Engineering Service Co., Ltd.	Construction and service	KOREA		29.00	%		290		1,805
Busan Green Energy Co., Ltd.	Power generation	KOREA		29.00	%		14,564		14,512
Jungbu Bio Energy Co., Ltd. (*2)	Power generation	KOREA		18.87	%		1,000		904
Korea Electric Vehicle Charging Service	Electric vehicle charge service	KOREA		28.00	%		1,596		1,446
Ulleungdo Natural Energy Co., Ltd.	Renewable power generation	KOREA		29.85	%		8,000		7,417
Korea Nuclear Partners Co., Ltd.	Electric material agency	KOREA		29.00	%		290		289


						W	2,116,897		4,405,668

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(1)

Investments in associates and joint ventures as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won
December 31, 2015
Investees	Key operation activities	Location	Percentage of ownership			Acquisition cost		Book value

<Joint ventures>
KEPCO-Uhde Inc. (*7)	Power generation	KOREA		52.80	%	W	11,355		8,549
Eco Biomass Energy Sdn. Bhd. (*7)	Power generation	MALAYSIA		61.53	%		9,661		—
Datang Chaoyang Renewable Power Co., Ltd.	Power generation	CHINA		40.00	%		27,660		27,640
Shuweihat Asia Power Investment B.V.	Holding company	NETHERLANDS		49.00	%		60,191		20,474
Shuweihat Asia Operation & Maintenance Company (*7)	Maintenance of utility plant	CAYMAN		55.00	%		30		486
Waterbury Lake Uranium L.P.	Resources development	CANADA		40.00	%		26,602		20,299
ASM-BG Investicii AD	Power generation	BULGARIA		50.00	%		16,101		20,203
RES Technology AD	Power generation	BULGARIA		50.00	%		15,595		13,789
KV Holdings, Inc.	Power generation	PHILIPPINES		40.00	%		2,103		2,010
KEPCO SPC Power Corporation (*7)	Construction and operation of utility plant	PHILIPPINES		75.20	%		94,579		208,524
Canada Korea Uranium Limited Partnership (*5)	Resources development	CANADA		12.50	%		5,404		—
KEPCO Energy Resource Nigeria Limited	Holding company	NIGERIA		30.00	%		8,463		—
Gansu Datang Yumen Wind Power Co., Ltd.	Power generation	CHINA		40.00	%		16,621		16,107
Datang Chifeng Renewable Power Co., Ltd.	Power generation	CHINA		40.00	%		121,928		171,224
Datang KEPCO Chaoyang Renewable Power Co., Ltd.	Power generation	CHINA		40.00	%		10,858		10,580
Rabigh Electricity Company	Power generation	SAUDI ARABIA		40.00	%		109,743		59,368
Rabigh Operation & Maintenance Company	Maintenance of utility plant	SAUDI ARABIA		40.00	%		70		3,586
Jamaica Public Service Company Limited	Power generation	JAMAICA		40.00	%		301,910		241,918
KW Nuclear Components Co., Ltd.	R&D	KOREA		43.36	%		833		4,985
Busan Shinho Solar Power Co., Ltd.	Power generation	KOREA		25.00	%		2,100		3,678
GS Donghae Electric Power Co., Ltd.	Power generation	KOREA		34.00	%		204,000		200,379
Global Trade Of Power System Co., Ltd.	Exporting products and technology of small or medium business by proxy	KOREA		29.00	%		290		426
Expressway Solar-light Power Generation Co., Ltd.	Power generation	KOREA		29.00	%		1,856		2,100
KODE NOVUS 1 LLC	Power generation	USA		50.00	%		19,213		—
KODE NOVUS 2 LLC	Power generation	USA		49.00	%		12,498		—
Daejung Offshore Wind Power Co., Ltd.	Power generation	KOREA		49.90	%		4,990		3,352
Amman Asia Electric Power Company (*7)	Power generation	JORDAN		60.00	%		111,476		137,668
KEPCO-ALSTOM Power Electronics Systems, Inc. (*7)	R&D	KOREA		51.00	%		5,629		4,501
Dangjin Eco Power Co., Ltd.	Power generation	KOREA		34.00	%		51,149		48,281
Honam Wind Power Co., Ltd.	Power generation	KOREA		29.00	%		3,600		3,926
Nepal Water & Energy Development Company Pty Ltd. (*7)	Construction and operation of utility plant	NEPAL		52.77	%		18,568		17,765
Chun-cheon Energy Co., Ltd.	Power generation	KOREA		29.90	%		32,868		31,976
Yeonggwangbaeksu Wind Power Co., Ltd. (*3)	Power generation	KOREA		15.00	%		3,000		2,668
Nghi Son 2 Power Ltd.	Power generation	VIETNAM		50.00	%		1,072		269
Kelar S.A (*7)	Power generation	CHILE		65.00	%		4,180		—
PT. Tanjung Power Indonesia	Power generation	INDONESIA		35.00	%		746		617
Incheon New Power Co., Ltd.	Power generation	KOREA		29.00	%		461		514
Seokmun Energy Co., Ltd.	Integrated energy business	KOREA		29.00	%		580		—


							1,317,983		1,287,862


						W	3,434,880		5,693,530

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(1)

Investments in associates and joint ventures as of March 31, 2016 and December 31, 2015 are as follows, continued:

(*1)	The effective percentage of ownership is 21.57% considering treasury stocks.

(*2)	The Company can exercise significant influence by virtue of its contractual right to appoint directors to the board of directors of the entity, and by strict decision criteria of the Company’s financial and operating policy of the board of directors.

(*3)	The Company can exercise significant influence by virtue of its contractual right to appoint a director to the board of directors of the entity.

(*4)	The Company can exercise significant influence by virtue of its contractual right to appoint one out of four members of the steering committee of the entity. Moreover, the Company has significant financial transactions, which can affect its influence on the entity.

(*5)	The Company has joint control over the entity by virtue of its contractual right to appoint directors to the board of directors of the entity, and by strict decision criteria of the Company’s financial and operating policy of the board of directors.

(*6)

(*7)	According to the shareholders’ agreement, all critical financial and operating decisions must be agreed to by all ownership parties. For these reasons, the entities are classified as joint ventures.

(*8)	As of reporting date, the reporting period of all associates and joint ventures ends in December 31, except for Pioneer Gas Power Limited whose reporting period ends on March 31.

(*9)

As of December 31, 2015, 17.3% of ownership of Hyundai Energy Co., Ltd. is held by NH Power ll Co., Ltd. and NH Bank. According to the shareholders’ agreement reached on March 2011, not only does the Company have a call option to acquire the investment in Hyundai Energy Co., Ltd. from NH Power ll Co., Ltd. and NH Bank with a certain rate of return, NH Power ll Co., Ltd. and NH Bank also have put options to dispose of their investment to the Company. In connection with this agreement, the Company applied the equity method on the investment in Hyundai Energy Co., Ltd. with 46.3% of ownership.

(*10)

The Company’s percentage of ownership has decreased due to the acquisition of Daeryun Power Co., Ltd. and the effective percentage of ownership is 19.45% considering stock purchase options.

(*11)

The Company’s effective percentage of ownership excluding the redeemable convertible preferred stock is 25.54%.

(*12)

(2)

The fair value of associates which are actively traded on the open market and have a readily available market value as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won
Investees	March 31, 2016		December 31, 2015

<Associates>
Korea Electric Power Industrial Development Co., Ltd.	W	49,161		46,514
Korea Gas Corporation		724,815		696,465
YTN Co., Ltd.		28,665		26,235
SPC Power Corporation		66,446		65,552
PT. Bayan Resources TBK		434,500		446,250

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(3)

Changes in investments in associates and joint ventures for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won
March 31, 2016
Investees	Beginning balance		Acquisition		Disposal		Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance

<Associates>
Daegu Green Power Co., Ltd.	W	80,267		3,347		—		—			8,847			—			—			92,461
Korea Gas Corporation		2,102,813		—		—		(3,213	)		110,057			(5,755	)		(2,123	)		2,201,779
Korea Electric Power Industrial Development Co., Ltd.		18,994		—		—		(1,598	)		1,362			—			(12	)		18,746
YTN Co., Ltd.		38,365		—		—		—			(1,518	)		321			100			37,268
Cheongna Energy Co., Ltd.		19,490		—		—		—			346			—			—			19,836
Gangwon Wind Power Co., Ltd.		12,890		—		—		(1,136	)		820			—			—			12,574
Hyundai Green Power Co., Ltd.		113,664		—		—		(8,888	)		4,103			—			—			108,879
Korea Power Exchange		208,735		—		—		—			10,401			—			—			219,136
AMEC Partners Korea Ltd.		230		—		—		—			(4	)		—			—			226
Hyundai Energy Co., Ltd.		6,990		—		—		—			(1,072	)		—			—			5,918
Ecollite Co., Ltd.		—		—		—		—			—			—			—			—
Taebaek Wind Power Co., Ltd.		4,956		—		—		—			(566	)		—			—			4,390
Muju Wind Power Co., Ltd.		2,587		—		—		—			(39	)		—			—			2,548
Pyeongchang Wind Power Co., Ltd.		3,402		—		—		—			(98	)		—			—			3,304
Daeryun Power Co., Ltd.		36,156		—		—		—			(802	)		—			—			35,354
JinanJangsu Wind Power Co., Ltd.		77		—		—		—			(13	)		—			—			64
Changjuk Wind Power Co., Ltd.		6,143		—		—		—			138			—			—			6,281
KNH Solar Co., Ltd.		1,924		—		—		—			(160	)		5			—			1,769
SPC Power Corporation		58,033		—		—		—			2,658			236			(14	)		60,913
Gemeng International Energy Co., Ltd.		728,396		—		—		—			9,933			—			—			738,329
PT. Cirebon Electric Power		60,574		—		—		—			3,658			(2,486	)		(19	)		61,727
KNOC Nigerian East Oil Co., Ltd.		—		—		—		—			(651	)		177			474			—
KNOC Nigerian West Oil Co., Ltd.		—		—		—		—			(318	)		172			146			—
Dolphin Property Limited		61		—		—		—			—			(1	)		—			60
PT. Wampu Electric Power		18,963		—		—		—			(1,056	)		(257	)		—			17,650
PT. Bayan Resources TBK		525,066		—		—		—			(13,658	)		(934	)		—			510,474
S-Power Co., Ltd.		130,908		—		—		—			1,073			—			—			131,981
Pioneer Gas Power Limited		51,187		—		—		—			6			(397	)		—			50,796
Eurasia Energy Holdings		—		—		—		—			—			—			—			—
Xe-Pian Xe-Namnoy Power Co., Ltd.		31,863		—		—		—			(1,814	)		(574	)		—			29,475
Busan Solar Co., Ltd.		925		—		—		—			14			—			—			939
Hadong Mineral Fiber Co., Ltd.		—		—		—		—			—			—			—			—
Green Biomass Co., Ltd.		—		—		—		—			150			—			—			150
PT. Mutiara Jawa		—		—		—		—			—			—			—			—
Samcheok Eco Material Co., Ltd.		—		—		—		—			—			—			—			—
Noeul Green Energy Co., Ltd.		295		—		—		—			(38	)		—			—			257
Naepo Green Energy Co., Ltd.		26,746		—		—		—			(378	)		—			—			26,368
Goseong Green Energy Co., Ltd.		2,670		—		—		—			(38	)		—			—			2,632
Gangneung Eco Power Co., Ltd.		2,688		—		—		—			(33	)		—			—			2,655
Shin Pyeongtaek Power Co., Ltd.		—		—		—		—			—			—			—			—
Heang Bok Do Si Photovoltaic Power Co., Ltd.		189		—		—		—			(21	)		—			—			168
DS POWER Co., Ltd.		10,960		—		—		—			(115	)		—			(31	)		10,814
Dongducheon Dream Power Co., Ltd.		55,667		—		—		—			1,762			—			—			57,429
KS Solar Co., Ltd.		618		—		—		—			(75	)		—			—			543
Yeongwol Energy Station Co., Ltd.		1,290		—		—		—			52			—			—			1,342

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(3)

Changes in investments in associates and joint ventures for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows, continued:


In millions of won
March 31, 2016
Investees	Beginning balance		Acquisition		Disposal			Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance

Jinbhuvish Power Generation Pvt. Ltd.	W	8,350		—		—			—			—			57			—			8,407
SE Green Energy Co., Ltd.		3,575		—		—			—			(12	)		—			—			3,563
Daegu Photovoltaic Co., Ltd.		1,886		—		—			—			96			—			—			1,982
Jeongam Wind Power Co., Ltd.		702		—		—			—			(43	)		—			—			659
Korea Power Engineering Service Co., Ltd.		1,805		—		—			—			390			—			—			2,195
Busan Green Energy Co., Ltd.		14,512		—		—			—			(180	)		—			—			14,332
Jungbu Bio Energy Co., Ltd.		904		—		—			—			(32	)		—			—			872
Korea Electric Vehicle Charging Service		1,446		—		—			—			(92	)		—			—			1,354
Ulleungdo Natural Energy Co., Ltd.		7,417		—		—			—			(70	)		—			—			7,347
Korea Nuclear Partners Co., Ltd.		289		—		—			—			(16	)		—			—			273
Tamra Offshore Wind Power Co., Ltd		—		8,910		—			—			(1,054	)		(9	)		—			7,847


		4,405,668		12,257		—			(14,835	)		131,900			(9,445	)		(1,479	)		4,524,066


<Joint ventures>
KEPCO-Uhde Inc.		8,549		—		—			—			(76	)		—			—			8,473
Eco Biomass Energy Sdn. Bhd.		—		—		—			—			—			—			—			—
Datang Chaoyang Renewable Power Co., Ltd.		27,640		—		—			—			98			(124	)		—			27,614
Shuweihat Asia Power Investment B.V.		20,474		—		(10,174	)		—			458			(338	)		—			10,420
Shuweihat Asia Operation & Maintenance Company		486		—		—			—			243			(18	)		—			711
Waterbury Lake Uranium L.P.		20,299		—		—			—			—			1,052			(703	)		20,648
ASM-BG Investicii AD		20,203		—		—			—			18			425			—			20,646
RES Technology AD		13,789		—		—			—			(239	)		292			—			13,842
KV Holdings, Inc.		2,010		—		—			—			—			13			—			2,023
KEPCO SPC Power Corporation		208,524		—		—			—			16,985			1,134			(26	)		226,617
Canada Korea Uranium Limited Partnership		—		—		—			—			—			—			—			—
KEPCO Energy Resource Nigeria Limited		—		—		—			—			—			—			—			—
Gansu Datang Yumen Wind Power Co., Ltd.		16,107		—		—			—			(660	)		(54	)		—			15,393
Datang Chifeng Renewable Power Co., Ltd.		171,224		—		—			—			2,083			(824	)		2			172,485
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		10,580		—		—			—			110			(50	)		—			10,640
Rabigh Electricity Company		59,368		—		—			—			2,628			22,565			10			84,571
Rabigh Operation & Maintenance Company		3,586		—		—			—			645			(56	)		—			4,175
Jamaica Public Service Company Limited		241,918		—		—			—			—			—			(3,818	)		238,100
KW Nuclear Components Co., Ltd.		4,985		—		—			(2,191	)		880			—			(6	)		3,668
Busan Shinho Solar Power Co., Ltd.		3,678		—		—			(185	)		56			—			—			3,549
GS Donghae Electric Power Co., Ltd.		200,379		—		—			—			(340	)		—			—			200,039
Global Trade Of Power System Co., Ltd.		426		—		—			—			(18	)		—			—			408
Expressway Solar-light Power Generation Co., Ltd.		2,100		—		—			(70	)		(67	)		—			—			1,963
KODE NOVUS 1 LLC		—		—		—			—			—			—			—			—
KODE NOVUS 2 LLC		—		258		—			—			(258	)		—			—			—
Daejung Offshore Wind Power Co., Ltd.		3,352		—		—			—			(86	)		—			—			3,266
Amman Asia Electric Power Company		137,668		—		—			—			4,895			(11,976	)		—			130,587
KEPCO-ALSTOM Power Electronics Systems, Inc.		4,501		—		—			—			(122	)		—			—			4,379
Dangjin Eco Power Co., Ltd.		48,281		5,100		—			—			(125	)		(26	)		3			53,233
Honam Wind Power Co., Ltd.		3,926		—		—			(104	)		269			—			—			4,091
Nepal Water & Energy Development Company Pty Ltd.		17,765		—		—			—			(144	)		(252	)		—			17,369
Chun-cheon Energy Co., Ltd.		31,976		19,832		—			—			(281	)		(95	)		—			51,432
Yeonggwangbaeksu Wind Power Co., Ltd.		2,668		—		—			—			152			—			—			2,820
Nghi Son 2 Power Ltd.		269		299		—			—			(150	)		(7	)		—			411

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(3)

Changes in investments in associates and joint ventures for the three-month periods ended March 31, 2016 and for the year ended December 31, 2015 are as follows, continued:


In millions of won
March 31, 2016
Investees	Beginning balance		Acquisition		Disposal			Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance

Kelar S.A	W	—		—		—			—			—			—			—			—
PT. Tanjung Power Indonesia		617		—		—			—			387			(25	)		—			979
Incheon New Power Co., Ltd.		514		—		—			—			8			4			4			530
Seokmun Energy Co., Ltd.		—		—		—			—			(261	)		793			—			532
Daehan Wind Power PSC		—		285		—			—			(67	)		(5	)		—			213

		1,287,862		25,774		(10,174	)		(2,550	)		27,021			12,428			(4,534	)		1,335,827


	W	5,693,530		38,031		(10,174	)		(17,385	)		158,921			2,983			(6,013	)		5,859,893


In millions of won
December 31, 2015
Investees	Beginning balance		Acquisition		Disposal		Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance

<Associates>
Daegu Green Power Co., Ltd.	W	71,387		—		—		—			8,902			—			(22	)		80,267
Korea Gas Corporation		2,097,539		—		—		(4,725	)		67,949			(55,453	)		(2,497	)		2,102,813
Korea Electric Power Industrial Development Co., Ltd.		21,622		—		—		(1,267	)		(1,792	)		—			431			18,994
YTN Co., Ltd.		39,889		—		—		(90	)		(188	)		(935	)		(311	)		38,365
Cheongna Energy Co., Ltd.		28,771		—		—		—			(9,281	)		—			—			19,490
Gangwon Wind Power Co., Ltd.		12,385		—		—		(852	)		1,279			78			—			12,890
Hyundai Green Power Co., Ltd.		113,033		—		—		(8,889	)		9,520			—			—			113,664
Korea Power Exchange		198,021		—		—		—			9,944			—			770			208,735
AMEC Partners Korea Ltd.		200		—		—		—			30			—			—			230
Hyundai Energy Co., Ltd. (*1)		35,925		—		—		—			(13,731	)		—			(15,204	)		6,990
Ecollite Co., Ltd.		—		—		—		—			—			—			—			—
Taebaek Wind Power Co., Ltd.		5,525		—		—		—			(569	)		—			—			4,956
Muju Wind Power Co., Ltd.		2,706		—		—		—			(119	)		—			—			2,587
Pyeongchang Wind Power Co., Ltd.		3,693		—		—		—			(291	)		—			—			3,402
Daeryun Power Co., Ltd.		41,951		—		—		—			(5,798	)		—			3			36,156
JinanJangsu Wind Power Co., Ltd.		77		—		—		—			—			—			—			77
Changjuk Wind Power Co., Ltd.		6,486		—		—		—			(343	)		—			—			6,143
KNH Solar Co., Ltd.		1,744		—		—		—			178			2			—			1,924
SPC Power Corporation		47,799		—		—		(1,349	)		5,375			381			5,827			58,033
Gemeng International Energy Co., Ltd.		667,578		—		—		(37,163	)		51,766			89,481			(43,266	)		728,396
PT. Cirebon Electric Power		43,335		—		—		—			12,210			5,029			—			60,574
KNOC Nigerian East Oil Co., Ltd.		—		—		—		—			(880	)		(641	)		1,521			—
KNOC Nigerian West Oil Co., Ltd.		—		—		—		—			(1,092	)		(599	)		1,691			—
Dolphin Property Limited		61		—		—		—			—			—			—			61
PT. Wampu Electric Power		16,071		2,357		—		—			(600	)		1,135			—			18,963
PT. Bayan Resources TBK		540,011		—		—		—			(11,341	)		(3,604	)		—			525,066
S-Power Co., Ltd.		104,244		24,300		—		—			2,364			—			—			130,908

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(3)

Changes in investments in associates and joint for the three-month periods ended March 31, 2016 and for the year ended December 31, 2015 are as follows, continued:


In millions of won
December 31, 2015
Investees	Beginning balance		Acquisition		Disposal		Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance

Pioneer Gas Power Limited	W	50,668		—		—		—			59			460			—			51,187
Eurasia Energy Holdings		—		—		—		—			—			—			—			—
Xe-Pian Xe-Namnoy Power Co., Ltd.		22,152		9,244		—		—			(749	)		1,216			—			31,863
Busan Solar Co., Ltd.		853		—		—		—			72			—			—			925
Hadong Mineral Fiber Co., Ltd.		3		—		—		—			(3	)		—			—			—
Green Biomass Co., Ltd.		—		—		—		—			—			—			—			—
PT. Mutiara Jawa		818		—		—		—			(818	)		—			—			—
Samcheok Eco Material Co., Ltd.		212		—		—		—			(178	)		(34	)		—			—
Noeul Green Energy Co., Ltd.		189		200		—		—			(91	)		(3	)		—			295
Naepo Green Energy Co., Ltd.		28,064		—		—		—			(1,318	)		—			—			26,746
Goseong Green Energy Co., Ltd.		2,586		—		—		—			84			—			—			2,670
Gangneung Eco Power Co., Ltd.		2,783		—		—		—			(95	)		—			—			2,688
Shin Pyeongtaek Power Co., Ltd.		—		—		—		—			—			—			—			—
Heang Bok Do Si Photovoltaic Power Co., Ltd.		221		—		—		—			(32	)		—			—			189
DS POWER Co., Ltd.		15,642		—		—		—			(4,671	)		—			(11	)		10,960
Dongducheon Dream Power Co., Ltd. (*2)		100,545		—		—		—			(3,412	)		—			(41,466	)		55,667
KS Solar Co., Ltd.		325		—		—		—			293			—			—			618
Yeongwol Energy Station Co., Ltd.		1,741		—		—		—			(451	)		—			—			1,290
Jinbhuvish Power Generation Pvt. Ltd.		8,344		—		—		—			(42	)		48			—			8,350
SE Green Energy Co., Ltd.		3,623		—		—		—			(48	)		—			—			3,575
Daegu Photovoltaic Co., Ltd.		1,581		—		—		—			305			—			—			1,886
Jeongam Wind Power Co., Ltd.		93		880		—		—			(271	)		—			—			702
Korea Power Engineering Service Co., Ltd.		1,334		—		—		(44	)		542			—			(27	)		1,805
Busan Green Energy Co., Ltd.		—		14,564		—		—			(52	)		—			—			14,512
Jungbu Bio Energy Co., Ltd.		—		1,000		—		—			(96	)		—			—			904
Korea Electric Vehicle Charging Service		—		1,596		—		—			(135	)		—			(15	)		1,446
Ulleungdo Natural Energy Co., Ltd.		—		8,000		—		—			(583	)		—			—			7,417
Korea Nuclear Partners Co., Ltd.		—		290		—		—			(1	)		—			—			289


		4,341,830		62,431		—		(54,379	)		111,801			36,561			(92,576	)		4,405,668


<Joint ventures>
KEPCO-Uhde Inc.		9,042		—		—		—			(493	)		—			—			8,549
Eco Biomass Energy Sdn. Bhd.		—		—		—		—			—			—			—			—
Datang Chaoyang Renewable Power Co., Ltd.		27,514		—		—		—			(135	)		261			—			27,640
Shuweihat Asia Power Investment B.V.		16,241		108		—		—			4,008			117			—			20,474
Shuweihat Asia Operation & Maintenance Company		345		—		—		(798	)		922			24			(7	)		486
Waterbury Lake Uranium L.P.		22,010		—		—		—			—			(2,507	)		796			20,299
ASM-BG Investicii AD		19,608		—		—		—			1,384			(789	)		—			20,203
RES Technology AD		14,725		—		—		—			(318	)		(618	)		—			13,789
KV Holdings, Inc.		1,902		—		—		—			74			34			—			2,010
KEPCO SPC Power Corporation		190,519		—		—		(28,986	)		43,801			3,190			—			208,524
Canada Korea Uranium Limited Partnership		—		—		—		—			—			—			—			—
KEPCO Energy Resource Nigeria Limited		—		—		—		—			—			—			—			—
Gansu Datang Yumen Wind Power Co., Ltd.		17,467		—		—		—			(1,546	)		186			—			16,107
Datang Chifeng Renewable Power Co., Ltd.		169,496		—		—		(8,239	)		8,512			1,464			(9	)		171,224
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		10,539		—		—		—			(33	)		74			—			10,580
Rabigh Electricity Company		8,121		—		—		—			21,582			29,703			(38	)		59,368
Rabigh Operation & Maintenance Company		4,628		—		—		(1,780	)		533			205			—			3,586
Jamaica Public Service Company Limited		226,892		—		—		—			—			15,027			(1	)		241,918
KW Nuclear Components Co., Ltd.		2,899		—		—		(1,016	)		3,065			—			37			4,985
Busan Shinho Solar Power Co., Ltd.		3,284		—		—		—			394			—			—			3,678

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(3)

Changes in investments in associates and joint ventures for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows, continued:


In millions of won
December 31, 2015
Investees	Beginning balance		Acquisition		Disposal			Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance
GS Donghae Electric Power Co., Ltd.	W	201,409		—		—			—			(1,064	)		—			34			200,379
Global Trade Of Power System Co., Ltd.		343		—		—			—			83			—			—			426
Expressway Solar-light Power Generation Co., Ltd.		2,087		—		—			—			13			—			—			2,100
KODE NOVUS 1 LLC		12,207		—		—			—			(11,639	)		588			(1,156	)		—
KODE NOVUS 2 LLC		8,248		—		—			—			(8,104	)		413			(557	)		—
Daejung Offshore Wind Power Co., Ltd.		3,711		—		—			—			(359	)		—			—			3,352
Amman Asia Electric Power Company		122,391		—		—			(19,510	)		25,131			10,244			(588	)		137,668
KEPCO-ALSTOM Power Electronics Systems, Inc.		4,617		—		—			—			(98	)		—			(18	)		4,501
Dangjin Eco Power Co., Ltd.		37,837		20,000		(8,851	)		—			(712	)		70			(63	)		48,281
Honam Wind Power Co., Ltd.		3,555		—		—			—			371			—			—			3,926
Nepal Water & Energy Development Company Pty Ltd.		17,872		—		—			—			(1,277	)		1,170			—			17,765
Chun-cheon Energy Co., Ltd.		—		32,853		—			—			(719	)		(158	)		—			31,976
Yeonggwangbaeksu Wind Power Co., Ltd.		2,962		—		—			—			(294	)		—			—			2,668
Nghi Son 2 Power Ltd.		102		722		—			—			(562	)		2			5			269
Kelar S.A		3,156		—		—			—			—			(407	)		(2,749	)		—
PT. Tanjung Power Indonesia		700		—		—			—			(98	)		—			15			617
Incheon New Power Co., Ltd.		465		—		—			—			49			—			—			514
Seokmun Energy Co., Ltd.		—		—		(100	)		—			—			—			100			—

		1,166,894		53,683		(8,951	)		(60,329	)		82,471			58,293			(4,199	)		1,287,862


	W	5,508,724		116,114		(8,951	)		(114,708	)		194,272			94,854			(96,775	)		5,693,530

(*1)	‘Others’ include W15,204 million of assets held-for-sale (note 41).

(*2)	‘Others’ include W41,170 million of assets held-for-sale (note 41).

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(4)

Summary of financial information of associates and joint ventures as of and for the three-month period ended March 31, 2016 and as of and for the year ended December 31, 2015 are as follows:


In millions of won
March 31, 2016
Investees	Total assets		Total liabilities		Sales		Profit (loss) for the period

<Associates>
Daegu Green Power Co., Ltd.	W	664,423		479,419		80,637		17,384
Korea Gas Corporation		41,812,309		31,294,196		7,764,577		511,256
Korea Electric Power Industrial Development Co., Ltd.		147,496		82,854		68,334		6,397
YTN Co., Ltd.		301,686		127,586		24,140		(3,933	)
Cheongna Energy Co., Ltd.		441,549		401,914		22,473		882
Gangwon Wind Power Co., Ltd.		111,372		27,870		6,853		5,139
Hyundai Green Power Co., Ltd.		1,154,849		779,404		115,770		14,193
Korea Power Exchange		244,055		24,919		26,838		9,641
AMEC Partners Korea Ltd.		1,283		94		25		(20	)
Hyundai Energy Co., Ltd.		517,721		470,668		21,505		(5,516	)
Ecollite Co., Ltd.		2,244		336		—		(18	)
Taebaek Wind Power Co., Ltd.		45,040		25,787		2,066		(2,544	)
Muju Wind Power Co., Ltd.		10,202		8		8		(155	)
Pyeongchang Wind Power Co., Ltd.		71,964		58,747		71		(360	)
Daeryun Power Co., Ltd.		811,041		634,517		67,533		(4,125	)
JinanJangsu Wind Power Co., Ltd.		311		56		—		(51	)
Changjuk Wind Power Co., Ltd.		42,155		19,576		2,023		837
KNH Solar Co., Ltd.		26,387		19,559		617		(213	)
SPC Power Corporation		206,606		46,308		18,300		12,446
Gemeng International Energy Co., Ltd.		5,959,618		3,919,626		277,030		8,077
PT. Cirebon Electric Power		1,003,310		778,849		76,734		13,366
KNOC Nigerian East Oil Co., Ltd.		260,156		336,728		—		(2,305	)
KNOC Nigerian West Oil Co., Ltd.		158,296		228,528		—		(2,086	)
Dolphin Property Limited		295		1		—		—
PT. Wampu Electric Power		199,101		160,732		1,240		(1,292	)
PT. Bayan Resources TBK		961,492		865,144		111,514		2,685
S-Power Co., Ltd.		923,708		650,225		152,948		1,769
Pioneer Gas Power Limited		311,099		242,147		—		—
Eurasia Energy Holdings		590		1,053		—		—
Xe-Pian Xe-Namnoy Power Co., Ltd.		548,239		391,881		—		(7,671	)
Busan Solar Co., Ltd.		25,376		20,898		572		(157	)
Hadong Mineral Fiber Co., Ltd.		2		21		—		—
Green Biomass Co., Ltd.		11,345		10,271		886		(233	)
PT. Mutiara Jawa		27,344		32,328		704		15
Samcheok Eco Material Co., Ltd.		23,880		2,111		48		(638	)
Noeul Green Energy Co., Ltd.		1,409		122		—		(124	)
Naepo Green Energy Co., Ltd.		106,858		1,388		2,045		(1,513	)
Goseong Green Energy Co., Ltd.		93,338		2,576		—		(1,325	)
Gangneung Eco Power Co., Ltd.		86,283		14,886		—		(898	)
Shin Pyeongtaek Power Co., Ltd.		39,283		42,885		—		(550	)
Heang Bok Do Si Photovoltaic Power Co., Ltd.		3,028		2,427		71		(87	)
DS POWER Co., Ltd.		657,754		538,812		38,775		998
Dongducheon Dream Power Co., Ltd.		1,673,016		1,397,641		300,955		4,167
KS Solar Co., Ltd.		29,111		25,938		1,040		(83	)
Yeongwol Energy Station Co., Ltd.		178,537		165,120		18,280		2,349
Jinbhuvish Power Generation Pvt. Ltd.		74,359		18,927		—		—
SE Green Energy Co., Ltd.		7,461		1		—		(25	)
Daegu Photovoltaic Co., Ltd.		20,878		14,043		911		296
Jeongam Wind Power Co., Ltd.		1,951		304		—		(98	)
Korea Power Engineering Service Co., Ltd.		9,500		1,931		5,797		1,344
Busan Green Energy Co., Ltd.		49,490		70		—		(620	)
Jungbu Bio Energy Co., Ltd.		5,026		403		—		(168	)
Korea Electric Vehicle Charging Service		9,393		4,559		—		(331	)
Ulleungdo Natural Energy Co., Ltd.		24,723		106		—		(235	)
Korea Nuclear Partners Co., Ltd.		977		34		—		(53	)
Tamra Offshore Wind Power Co., Ltd		93,904		64,843		—		(3,221	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(4)

Summary of financial information of associates and joint ventures as of and for the three-month period ended March 31, 2016 and as of and for the year ended December 31, 2015 are as follows, continued:


In millions of won
March 31, 2016
Investees	Total assets		Total liabilities		Sales		Profit (loss) for the period

<Joint ventures>
KEPCO-Uhde Inc.	W	17,368		94		—		(149	)
Eco Biomass Energy Sdn. Bhd.		—		—		—		—
Datang Chaoyang Renewable Power Co., Ltd.		150,190		81,155		3,865		165
Shuweihat Asia Power Investment B.V.		21,437		3		—		802
Shuweihat Asia Operation & Maintenance Company		1,294		—		611		453
Waterbury Lake Uranium L.P.		54,481		445		—		—
ASM-BG Investicii AD		85,645		44,354		2,498		129
RES Technology AD		74,829		47,145		1,569		(481	)
KV Holdings, Inc.		5,057		—		—		—
KEPCO SPC Power Corporation		461,647		160,296		43,605		22,271
Canada Korea Uranium Limited Partnership		284		84		—		—
KEPCO Energy Resource Nigeria Limited		379,246		442,018		—		(8,834	)
Gansu Datang Yumen Wind Power Co., Ltd.		96,785		58,302		1,574		(1,375	)
Datang Chifeng Renewable Power Co., Ltd.		855,482		424,151		26,807		5,612
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		61,732		35,132		1,634		276
Rabigh Electricity Company		2,642,611		2,234,705		67,664		4,282
Rabigh Operation & Maintenance Company		19,658		9,219		5,573		586
Jamaica Public Service Company Limited		1,074,186		643,877		178,997		7,396
KW Nuclear Components Co., Ltd.		28,571		20,320		8,575		3,273
Busan Shinho Solar Power Co., Ltd.		49,968		35,773		1,702		186
GS Donghae Electric Power Co., Ltd.		1,803,381		1,214,929		—		(1,001	)
Global Trade Of Power System Co., Ltd.		1,972		566		459		(32	)
Expressway Solar-light Power Generation Co., Ltd.		20,285		13,518		142		(352	)
KODE NOVUS 1 LLC		62,907		109,957		1,170		(2,283	)
KODE NOVUS 2 LLC		22,119		45,436		531		(907	)
Daejung Offshore Wind Power Co., Ltd.		6,612		68		1		(173	)
Amman Asia Electric Power Company		849,778		631,988		2,726		8,158
KEPCO-ALSTOM Power Electronics Systems, Inc.		81,075		72,488		1,809		(401	)
Dangjin Eco Power Co., Ltd.		151,299		697		—		(343	)
Honam Wind Power Co., Ltd.		40,394		26,399		1,970		928
Nepal Water & Energy Development Company Pty Ltd.		42,884		12,141		—		(154	)
Chun-cheon Energy Co., Ltd.		243,822		71,819		—		(873	)
Yeonggwangbaeksu Wind Power Co., Ltd.		104,233		85,433		3,683		882
Nghi Son 2 Power Ltd.		916		96		—		(300	)
Kelar S.A		606,887		707,266		—		(2,365	)
PT. Tanjung Power Indonesia		73,121		70,325		37,758		1,104
Incheon New Power Co., Ltd.		9,096		7,266		789		92
Seokmun Energy Co., Ltd.		186,821		184,986		—		(56	)
Daehan Wind Power PSC		454		28		—		(134	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(4)


In millions of won
December 31, 2015
Investees	Total assets		Total liabilities		Sales		Profit (loss) for the period

<Associates>
Daegu Green Power Co., Ltd.	W	639,118		471,497		321,273		18,625
Korea Gas Corporation		42,385,340		32,328,396		26,052,724		319,190
Korea Electric Power Industrial Development Co., Ltd.		142,835		77,340		324,162		9,855
YTN Co., Ltd.		305,799		126,561		117,418		(520	)
Cheongna Energy Co., Ltd.		458,205		419,353		48,519		(21,108	)
Gangwon Wind Power Co., Ltd.		114,600		28,994		21,941		8,529
Hyundai Green Power Co., Ltd.		1,182,352		790,407		486,435		31,011
Korea Power Exchange		236,199		27,464		87,400		9,303
AMEC Partners Korea Ltd.		1,332		123		511		155
Hyundai Energy Co., Ltd.		526,305		473,736		80,067		(29,749	)
Ecollite Co., Ltd.		2,271		345		—		(97	)
Taebaek Wind Power Co., Ltd.		48,009		26,212		6,626		(302	)
Muju Wind Power Co., Ltd.		10,349		—		—		(477	)
Pyeongchang Wind Power Co., Ltd.		62,565		48,959		—		(1,164	)
Daeryun Power Co., Ltd.		838,199		657,551		279,787		(29,806	)
JinanJangsu Wind Power Co., Ltd.		306		—		—		(1	)
Changjuk Wind Power Co., Ltd.		41,444		19,053		6,472		772
KNH Solar Co., Ltd.		27,254		20,105		4,399		861
SPC Power Corporation		182,908		30,191		68,149		37,395
Gemeng International Energy Co., Ltd.		5,956,288		3,940,455		902,008		95,064
PT. Cirebon Electric Power		1,026,729		806,458		295,788		43,968
KNOC Nigerian East Oil Co., Ltd.		264,434		337,762		—		(6,069	)
KNOC Nigerian West Oil Co., Ltd.		160,765		230,001		—		(7,386	)
Dolphin Property Limited		300		1		—		8
PT. Wampu Electric Power		201,383		160,159		17,476		(2,696	)
PT. Bayan Resources TBK		1,043,143		901,952		461,349		(30,014	)
S-Power Co., Ltd.		935,870		664,523		632,073		5,336
Pioneer Gas Power Limited		310,761		240,833		—		148
Eurasia Energy Holdings		599		1,069		—		—
Xe-Pian Xe-Namnoy Power Co., Ltd.		506,970		341,261		—		2,760
Busan Solar Co., Ltd.		26,059		21,367		4,267		383
Hadong Mineral Fiber Co., Ltd.		2		21		—		(30	)
Green Biomass Co., Ltd.		10,664		9,343		4,136		(1,323	)
PT. Mutiara Jawa		25,013		29,913		1,943		(7,247	)
Samcheok Eco Material Co., Ltd.		23,119		735		—		(2,171	)
Noeul Green Energy Co., Ltd.		1,517		44		—		(446	)
Naepo Green Energy Co., Ltd.		108,167		1,184		3,126		(5,274	)
Goseong Green Energy Co., Ltd.		95,323		3,248		—		(4,312	)
Gangneung Eco Power Co., Ltd.		81,459		9,163		—		(3,610	)
Shin Pyeongtaek Power Co., Ltd.		25,875		29,190		—		(2,595	)
Heang Bok Do Si Photovoltaic Power Co., Ltd.		3,128		2,452		490		81
DS POWER Co., Ltd.		641,257		525,524		33,542		(5,759	)
Dongducheon Dream Power Co., Ltd.		1,668,235		1,397,026		1,003,346		(10,307	)
KS Solar Co., Ltd.		29,745		26,469		4,667		278
Yeongwol Energy Station Co., Ltd.		179,852		166,953		12,068		1,831
Jinbhuvish Power Generation Pvt. Ltd.		75,429		19,199		—		(805	)
SE Green Energy Co., Ltd.		7,484		—		—		(103	)
Daegu Photovoltaic Co., Ltd.		21,039		14,535		3,977		1,051
Jeongam Wind Power Co., Ltd.		2,053		299		—		(621	)
Korea Power Engineering Service Co., Ltd.		9,194		2,968		25,925		2,296
Busan Green Energy Co., Ltd.		50,093		53		—		(180	)
Jungbu Bio Energy Co., Ltd.		5,192		400		—		(508	)
Korea Electric Vehicle Charging Service		9,577		4,412		—		(482	)
Ulleungdo Natural Energy Co., Ltd.		27,113		2,262		—		(1,948	)
Korea Nuclear Partners Co., Ltd.		1,002		6		—		(4	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(4)


In millions of won
December 31, 2015
Investees	Total assets		Total liabilities		Sales		Profit (loss) for the period

<Joint ventures>
KEPCO-Uhde Inc.	W	17,535		111		—		(765	)
Eco Biomass Energy Sdn. Bhd.		—		—		—		—
Datang Chaoyang Renewable Power Co., Ltd.		150,157		81,056		16,335		(373	)
Shuweihat Asia Power Investment B.V.		41,969		17		—		8,232
Shuweihat Asia Operation & Maintenance Company		885		—		2,318		1,666
Waterbury Lake Uranium L.P.		51,302		4		—		—
ASM-BG Investicii AD		83,766		43,359		12,328		2,833
RES Technology AD		73,261		45,684		7,539		(566	)
KV Holdings, Inc.		5,025		—		—		186
KEPCO SPC Power Corporation		449,553		172,261		175,008		59,610
Canada Korea Uranium Limited Partnership		305		124		—		(19	)
KEPCO Energy Resource Nigeria Limited		380,282		416,959		—		(16,309	)
Gansu Datang Yumen Wind Power Co., Ltd.		98,298		58,030		7,280		(4,507	)
Datang Chifeng Renewable Power Co., Ltd.		882,914		454,731		103,860		21,900
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		65,110		38,661		7,880		1,216
Rabigh Electricity Company		2,644,825		2,297,194		293,184		53,384
Rabigh Operation & Maintenance Company		18,186		9,222		22,203		2,144
Jamaica Public Service Company Limited		1,086,244		657,962		859,728		3,305
KW Nuclear Components Co., Ltd.		36,065		24,777		16,217		7,687
Busan Shinho Solar Power Co., Ltd.		51,617		36,903		7,565		1,471
GS Donghae Electric Power Co., Ltd.		1,675,986		1,086,534		—		(2,823	)
Global Trade Of Power System Co., Ltd.		1,547		78		4,849		287
Expressway Solar-light Power Generation Co., Ltd.		21,154		13,913		2,981		443
KODE NOVUS 1 LLC		64,453		110,030		3,421		(59,389	)
KODE NOVUS 2 LLC		22,500		45,306		1,868		(39,345	)
Daejung Offshore Wind Power Co., Ltd.		6,795		78		—		(606	)
Amman Asia Electric Power Company		875,590		645,998		46,940		41,880
KEPCO-ALSTOM Power Electronics Systems, Inc.		50,152		41,326		18,849		(611	)
Dangjin Eco Power Co., Ltd.		136,982		945		—		(1,035	)
Honam Wind Power Co., Ltd.		41,527		28,100		5,944		1,266
Nepal Water & Energy Development Company Pty Ltd.		42,644		11,136		—		(647	)
Chun-cheon Energy Co., Ltd.		149,025		42,094		—		(2,389	)
Yeonggwangbaeksu Wind Power Co., Ltd.		104,045		86,257		4,974		(1,956	)
Nghi Son 2 Power Ltd.		771		234		—		(1,111	)
Kelar S.A		375,136		405,618		—		(3,140	)
PT. Tanjung Power Indonesia		37,948		36,185		16,476		(276	)
Incheon New Power Co., Ltd.		10,078		8,306		3,318		301
Seokmun Energy Co., Ltd.		184,051		184,759		—		(552	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(5)

Financial information of associates and joint ventures reconciled to the Company’s investments in consolidated financial statements as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won
March 31, 2016
Investees	Net assets			Percentage of ownership (*)			Share in net assets			Investment differential			Intercompany transaction			Others			Book value

<Associates>
Daegu Green Power Co., Ltd.	W	185,004			49.90	%		92,317			144			—			—			92,461
Korea Gas Corporation		10,518,113			21.57	%		2,268,757			—			—			(66,978	)		2,201,779
Korea Electric Power Industrial Development Co., Ltd.		64,642			29.00	%		18,746			—			—			—			18,746
YTN Co., Ltd.		174,100			21.43	%		37,310			—			(40	)		(2	)		37,268
Cheongna Energy Co., Ltd.		39,635			43.90	%		17,400			2,584			(148	)		—			19,836
Gangwon Wind Power Co., Ltd.		83,502			15.00	%		12,525			—			—			49			12,574
Hyundai Green Power Co., Ltd.		375,445			29.00	%		108,879			—			—			—			108,879
Korea Power Exchange		219,136			100.00	%		219,136			—			—			—			219,136
AMEC Partners Korea Ltd.		1,189			19.00	%		226			—			—			—			226
Hyundai Energy Co., Ltd.		47,053			46.30	%		21,786			—			(1,109	)		(14,759	)		5,918
Ecollite Co., Ltd.		1,908			36.10	%		689			—			—			(689	)		—
Taebaek Wind Power Co., Ltd.		19,253			25.00	%		4,813			—			(423	)		—			4,390
Muju Wind Power Co., Ltd.		10,194			25.00	%		2,549			—			—			(1	)		2,548
Pyeongchang Wind Power Co., Ltd.		13,217			25.00	%		3,304			—			—			—			3,304
Daeryun Power Co., Ltd.		176,524			19.45	%		34,334			1,014			—			6			35,354
JinanJangsu Wind Power Co., Ltd.		255			25.00	%		64			—			—			—			64
Changjuk Wind Power Co., Ltd.		22,579			30.00	%		6,774			—			(493	)		—			6,281
KNH Solar Co., Ltd.		6,828			27.00	%		1,844			—			(75	)		—			1,769
SPC Power Corporation		160,298			38.00	%		60,913			—			—			—			60,913
Gemeng International Energy Co., Ltd.		2,039,992			34.00	%		693,597			—			—			44,732			738,329
PT. Cirebon Electric Power		224,461			27.50	%		61,727			—			—			—			61,727
KNOC Nigerian East Oil Co., Ltd.		(76,572	)		14.63	%		(11,202	)		—			—			11,202			—
KNOC Nigerian West Oil Co., Ltd.		(70,232	)		14.63	%		(10,275	)		—			—			10,275			—
Dolphin Property Limited		294			15.00	%		44			—			—			16			60
PT. Wampu Electric Power		38,369			46.00	%		17,650			—			—			—			17,650
PT. Bayan Resources TBK		96,348			20.00	%		19,270			491,204			—			—			510,474
S-Power Co., Ltd.		273,483			49.00	%		134,007			—			(2,026	)		—			131,981
Pioneer Gas Power Limited		68,952			40.00	%		27,581			23,147			—			68			50,796
Eurasia Energy Holdings		(463	)		40.00	%		(185	)		—			—			185			—
Xe-Pian Xe-Namnoy Power Co., Ltd.		156,358			25.00	%		39,090			(8,796	)		(530	)		(289	)		29,475
Busan Solar Co., Ltd.		4,478			19.80	%		887			—			52			—			939
Hadong Mineral Fiber Co., Ltd.		(19	)		25.00	%		(5	)		—			—			5			—
Green Biomass Co., Ltd.		1,074			14.00	%		150			—			—			—			150
PT. Mutiara Jawa		(4,984	)		29.00	%		(1,445	)		70			—			1,375			—
Samcheok Eco Material Co., Ltd.		21,769			2.67	%		581			—			—			(581	)		—
Noeul Green Energy Co., Ltd.		1,287			20.00	%		257			—			—			—			257
Naepo Green Energy Co., Ltd.		105,470			25.00	%		26,368			—			—			—			26,368
Goseong Green Energy Co., Ltd.		90,762			2.90	%		2,632			—			—			—			2,632
Gangneung Eco Power Co., Ltd.		71,397			3.72	%		2,656			—			—			(1	)		2,655
Shin Pyeongtaek Power Co., Ltd.		(3,602	)		40.00	%		(1,441	)		—			(1,995	)		3,436			—
Heang Bok Do Si Photovoltaic Power Co., Ltd.		601			28.00	%		168			—			—			—			168
DS POWER Co., Ltd.		118,942			10.91	%		12,977			—			(6,475	)		4,312			10,814
Dongducheon Dream Power Co., Ltd.		275,375			33.61	%		92,554			—			(5,038	)		(30,087	)		57,429
KS Solar Co., Ltd.		3,173			19.00	%		603			—			(60	)		—			543
Yeongwol Energy Station Co., Ltd.		13,417			10.00	%		1,342			—			—			—			1,342
Jinbhuvish Power Generation Pvt. Ltd.		55,432			5.16	%		2,860			5,547			—			—			8,407
SE Green Energy Co., Ltd.		7,460			47.76	%		3,563			—			—			—			3,563
Daegu Photovoltaic Co., Ltd.		6,835			29.00	%		1,982			—			—			—			1,982

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(5)

Financial information of associates and joint ventures reconciled to the Company’s investments in consolidated financial statements as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won
March 31, 2016
Investees	Net assets			Percentage of ownership (*)			Share in net assets			Investment differential			Intercompany transaction			Others			Book value

Jeongam Wind Power Co., Ltd.	W	1,647			40.00	%		659			—			—			—			659
Korea Power Engineering Service Co., Ltd.		7,569			29.00	%		2,195			—			—			—			2,195
Busan Green Energy Co., Ltd.		49,420			29.00	%		14,332			—			—			—			14,332
Jungbu Bio Energy Co., Ltd.		4,623			18.87	%		872			—			—			—			872
Korea Electric Vehicle Charging Service		4,834			28.00	%		1,354			—			—			—			1,354
Ulleungdo Natural Energy Co., Ltd.		24,617			29.85	%		7,348			—			—			(1	)		7,347
Korea Nuclear Partners Co., Ltd.		943			29.00	%		273			—			—			—			273
Tamra Offshore Wind Power Co., Ltd		29,061			27.00	%		7,846			—			—			1			7,847

<Joint ventures>
KEPCO-Uhde Inc.		17,274			50.85	%		8,784			—			—			(311	)		8,473
Eco Biomass Energy Sdn. Bhd.		—			61.53	%		—			—			—			—			—
Datang Chaoyang Renewable Power Co., Ltd.		69,035			40.00	%		27,614			—			—			—			27,614
Shuweihat Asia Power Investment B.V.		21,434			49.00	%		10,503			—			—			(83	)		10,420
Shuweihat Asia Operation & Maintenance Company		1,294			55.00	%		712			—			—			(1	)		711
Waterbury Lake Uranium L.P.		54,036			38.43	%		20,766			—			—			(118	)		20,648
ASM-BG Investicii AD		41,291			50.00	%		20,646			—			—			—			20,646
RES Technology AD		27,684			50.00	%		13,842			—			—			—			13,842
KV Holdings, Inc.		5,057			40.00	%		2,023			—			—			—			2,023
KEPCO SPC Power Corporation		301,351			75.20	%		226,616			—			—			1			226,617
Canada Korea Uranium Limited Partnership		200			12.50	%		25			—			—			(25	)		—
KEPCO Energy Resource Nigeria Limited		(62,772	)		30.00	%		(18,832	)		—			—			18,832			—
Gansu Datang Yumen Wind Power Co., Ltd.		38,483			40.00	%		15,393			—			—			—			15,393
Datang Chifeng Renewable Power Co., Ltd.		431,331			40.00	%		172,532			—			—			(47	)		172,485
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		26,600			40.00	%		10,640			—			—			—			10,640
Rabigh Electricity Company		407,906			40.00	%		163,162			—			(78,562	)		(29	)		84,571
Rabigh Operation & Maintenance Company		10,439			40.00	%		4,176			—			—			(1	)		4,175
Jamaica Public Service Company Limited		430,309			40.00	%		172,124			(80,161	)		—			146,137			238,100
KW Nuclear Components Co., Ltd.		8,251			43.36	%		3,578			90			—			—			3,668
Busan Shinho Solar Power Co., Ltd.		14,195			25.00	%		3,549			—			—			—			3,549
GS Donghae Electric Power Co., Ltd.		588,452			34.00	%		200,074			—			—			(35	)		200,039
Global Trade Of Power System Co., Ltd.		1,406			29.00	%		408			—			—			—			408
Expressway Solar-light Power Generation Co., Ltd.		6,767			29.00	%		1,962			—			—			1			1,963
KODE NOVUS 1 LLC		(47,050	)		50.00	%		(23,525	)		4,732			—			18,793			—
KODE NOVUS 2 LLC		(23,317	)		50.00	%		(11,659	)		—			—			11,659			—
Daejung Offshore Wind Power Co., Ltd.		6,544			49.90	%		3,265			—			—			1			3,266
Amman Asia Electric Power Company		217,790			60.00	%		130,674			—			—			(87	)		130,587
KEPCO-ALSTOM Power Electronics Systems, Inc.		8,587			51.00	%		4,379			—			—			—			4,379
Dangjin Eco Power Co., Ltd.		150,602			34.00	%		51,205			2,618			—			(590	)		53,233
Honam Wind Power Co., Ltd.		13,995			29.00	%		4,059			32			—			—			4,091
Nepal Water & Energy Development Company Pty Ltd.		30,743			52.77	%		16,223			972			—			174			17,369
Chun-cheon Energy Co., Ltd.		172,003			29.90	%		51,429			3			—			—			51,432
Yeonggwangbaeksu Wind Power Co., Ltd.		18,800			15.00	%		2,820			—			—			—			2,820
Nghi Son 2 Power Ltd.		820			50.00	%		410			—			—			1			411
Kelar S.A		(100,379	)		65.00	%		(65,246	)		2,424			—			62,822			—
PT. Tanjung Power Indonesia		2,796			35.00	%		979			—			—			—			979
Incheon New Power Co., Ltd.		1,830			29.00	%		531			—			—			(1	)		530
Seokmun Energy Co., Ltd.		1,835			29.00	%		532			—			—			—			532
Daehan Wind Power PSC		426			50.00	%		213			—			—			—			213

(*)	The percentage of ownership shown above is after considering the treasury stocks and others.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(5)


In millions of won
December 31, 2015
Investees	Net assets			Percentage of ownership (*)			Share in net assets			Investment differential			Intercompany transaction			Others			Book value

<Associates>
Daegu Green Power Co., Ltd.	W	167,621			47.80	%		80,123			144			—			—			80,267
Korea Gas Corporation		10,056,944			21.57	%		2,169,283			—			—			(66,470	)		2,102,813
Korea Electric Power Industrial Development Co., Ltd.		65,495			29.00	%		18,994			—			—			—			18,994
YTN Co., Ltd.		179,238			21.43	%		38,411			—			(43	)		(3	)		38,365
Cheongna Energy Co., Ltd.		38,852			43.90	%		17,056			2,584			(150	)		—			19,490
Gangwon Wind Power Co., Ltd.		85,606			15.00	%		12,841			—			—			49			12,890
Hyundai Green Power Co., Ltd.		391,945			29.00	%		113,664			—			—			—			113,664
Korea Power Exchange		208,735			100.00	%		208,735			—			—			—			208,735
AMEC Partners Korea Ltd.		1,209			19.00	%		230			—			—			—			230
Hyundai Energy Co., Ltd.		52,569			46.30	%		24,340			—			(1,120	)		(16,230	)		6,990
Ecollite Co., Ltd.		1,926			36.10	%		695			—			—			(695	)		—
Taebaek Wind Power Co., Ltd.		21,797			25.00	%		5,449			—			(493	)		—			4,956
Muju Wind Power Co., Ltd.		10,349			25.00	%		2,587			—			—			—			2,587
Pyeongchang Wind Power Co., Ltd.		13,606			25.00	%		3,402			—			—			—			3,402
Daeryun Power Co., Ltd.		180,648			19.45	%		35,136			1,014			—			6			36,156
JinanJangsu Wind Power Co., Ltd.		306			25.00	%		77			—			—			—			77
Changjuk Wind Power Co., Ltd.		22,391			30.00	%		6,717			—			(574	)		—			6,143
KNH Solar Co., Ltd.		7,149			27.00	%		1,930			—			(6	)		—			1,924
SPC Power Corporation		152,717			38.00	%		58,033			—			—			—			58,033
Gemeng International Energy Co., Ltd.		2,015,833			34.00	%		685,383			—			—			43,013			728,396
PT. Cirebon Electric Power		220,271			27.50	%		60,574			—			—			—			60,574
KNOC Nigerian East Oil Co., Ltd.		(73,328	)		14.63	%		(10,728	)		—			—			10,728			—
KNOC Nigerian West Oil Co., Ltd.		(69,236	)		14.63	%		(10,129	)		—			—			10,129			—
Dolphin Property Limited		299			15.00	%		45			—			—			16			61
PT. Wampu Electric Power		41,224			46.00	%		18,963			—			—			—			18,963
PT. Bayan Resources TBK		141,191			20.00	%		28,238			498,089			—			(1,261	)		525,066
S-Power Co., Ltd.		271,347			49.00	%		132,960			—			(2,052	)		—			130,908
Pioneer Gas Power Limited		69,928			40.00	%		27,971			23,147			—			69			51,187
Eurasia Energy Holdings		(470	)		40.00	%		(188	)		—			—			188			—
Xe-Pian Xe-Namnoy Power Co., Ltd.		165,709			25.00	%		41,427			(8,796	)		(479	)		(289	)		31,863
Busan Solar Co., Ltd.		4,692			19.80	%		929			—			(4	)		—			925
Hadong Mineral Fiber Co., Ltd.		(19	)		25.00	%		(5	)		—			—			5			—
Green Biomass Co., Ltd.		1,321			14.00	%		185			—			—			(185	)		—
PT. Mutiara Jawa		(4,900	)		29.00	%		(1,421	)		70			—			1,351			—
Samcheok Eco Material Co., Ltd.		22,384			2.67	%		598			—			—			(598	)		—
Noeul Green Energy Co., Ltd.		1,473			20.00	%		295			—			—			—			295
Naepo Green Energy Co., Ltd.		106,983			25.00	%		26,746			—			—			—			26,746
Goseong Green Energy Co., Ltd.		92,075			2.90	%		2,670			—			—			—			2,670
Gangneung Eco Power Co., Ltd.		72,296			3.72	%		2,689			—			—			(1	)		2,688
Shin Pyeongtaek Power Co., Ltd.		(3,315	)		40.00	%		(1,326	)		—			(1,995	)		3,321			—
Heang Bok Do Si Photovoltaic Power Co., Ltd.		676			28.00	%		189			—			—			—			189
DS POWER Co., Ltd.		115,733			10.91	%		12,626			—			(5,940	)		4,274			10,960
Dongducheon Dream Power Co., Ltd.		271,209			33.61	%		91,153			—			5,398			(40,884	)		55,667
KS Solar Co., Ltd.		3,276			19.00	%		622			—			(4	)		—			618
Yeongwol Energy Station Co., Ltd.		12,899			10.00	%		1,290			—			—			—			1,290
Jinbhuvish Power Generation Pvt. Ltd.		56,230			5.16	%		2,901			5,450			—			(1	)		8,350
SE Green Energy Co., Ltd.		7,484			47.76	%		3,575			—			—			—			3,575
Daegu Photovoltaic Co., Ltd.		6,504			29.00	%		1,886			—			—			—			1,886

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(5)


In millions of won
December 31, 2015
Investees	Net assets			Percentage of ownership (*)			Share in net assets			Investment differential			Intercompany transaction			Others			Book value
Jeongam Wind Power Co., Ltd.	W	1,754			40.00	%		702			—			—			—			702
Korea Power Engineering Service Co., Ltd.		6,226			29.00	%		1,805			—			—			—			1,805
Busan Green Energy Co., Ltd.		50,040			29.00	%		14,512			—			—			—			14,512
Jungbu Bio Energy Co., Ltd.		4,792			18.87	%		904			—			—			—			904
Korea Electric Vehicle Charging Service		5,165			28.00	%		1,446			—			—			—			1,446
Ulleungdo Natural Energy Co., Ltd.		24,851			29.85	%		7,418			—			—			(1	)		7,417
Korea Nuclear Partners Co., Ltd.		996			29.00	%		289			—			—			—			289

<Joint ventures>
KEPCO-Uhde Inc.		17,424			50.85	%		8,860			—			—			(311	)		8,549
Eco Biomass Energy Sdn. Bhd.		—			61.53	%		—			—			—			—			—
Datang Chaoyang Renewable Power Co., Ltd.		69,101			40.00	%		27,640			—			—			—			27,640
Shuweihat Asia Power Investment B.V.		41,952			49.00	%		20,556			—			—			(82	)		20,474
Shuweihat Asia Operation & Maintenance Company		885			55.00	%		487			—			—			(1	)		486
Waterbury Lake Uranium L.P.		51,298			40.00	%		20,519			—			—			(220	)		20,299
ASM-BG Investicii AD		40,407			50.00	%		20,203			—			—			—			20,203
RES Technology AD		27,577			50.00	%		13,789			—			—			—			13,789
KV Holdings, Inc.		5,025			40.00	%		2,010			—			—			—			2,010
KEPCO SPC Power Corporation		277,292			75.20	%		208,524			—			—			—			208,524
Canada Korea Uranium Limited Partnership		181			12.50	%		23			—			—			(23	)		—
KEPCO Energy Resource Nigeria Limited		(36,677	)		30.00	%		(11,003	)		—			—			11,003			—
Gansu Datang Yumen Wind Power Co., Ltd.		40,268			40.00	%		16,107			—			—			—			16,107
Datang Chifeng Renewable Power Co., Ltd.		428,183			40.00	%		171,273			—			—			(49	)		171,224
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		26,449			40.00	%		10,580			—			—			—			10,580
Rabigh Electricity Company		347,631			40.00	%		139,052			—			(79,646	)		(38	)		59,368
Rabigh Operation & Maintenance Company		8,964			40.00	%		3,586			—			—			—			3,586
Jamaica Public Service Company Limited		428,282			40.00	%		171,313			(72,370	)		—			142,975			241,918
KW Nuclear Components Co., Ltd.		11,288			43.36	%		4,895			90			—			—			4,985
Busan Shinho Solar Power Co., Ltd.		14,714			25.00	%		3,678			—			—			—			3,678
GS Donghae Electric Power Co., Ltd.		589,452			34.00	%		200,414			—			—			(35	)		200,379
Global Trade Of Power System Co., Ltd.		1,469			29.00	%		426			—			—			—			426
Expressway Solar-light Power Generation Co., Ltd.		7,241			29.00	%		2,100			—			—			—			2,100
KODE NOVUS 1 LLC		(45,577	)		50.00	%		(22,789	)		4,732			—			18,057			—
KODE NOVUS 2 LLC		(22,806	)		49.00	%		(11,175	)		—			—			11,175			—
Daejung Offshore Wind Power Co., Ltd.		6,717			49.90	%		3,352			—			—			—			3,352
Amman Asia Electric Power Company		229,592			60.00	%		137,755			—			—			(87	)		137,668
KEPCO-ALSTOM Power Electronics Systems, Inc.		8,826			51.00	%		4,501			—			—			—			4,501
Dangjin Eco Power Co., Ltd.		136,037			34.00	%		46,253			2,696			—			(668	)		48,281
Honam Wind Power Co., Ltd.		13,427			29.00	%		3,894			32			—			—			3,926
Nepal Water & Energy Development Company Pty Ltd.		31,508			52.77	%		16,627			972			—			166			17,765
Chun-cheon Energy Co., Ltd.		106,931			29.90	%		31,972			3			—			1			31,976
Yeonggwangbaeksu Wind Power Co., Ltd.		17,788			15.00	%		2,668			—			—			—			2,668
Nghi Son 2 Power Ltd.		537			50.00	%		268			—			—			1			269
Kelar S.A		(30,482	)		65.00	%		(19,814	)		2,424			—			17,390			—
PT. Tanjung Power Indonesia		1,763			35.00	%		617			—			—			—			617
Incheon New Power Co., Ltd.		1,772			29.00	%		514			—			—			—			514
Seokmun Energy Co., Ltd.		(708	)		29.00	%		(205	)		—			—			205			—

(*)	The percentage of ownership shown above is after considering the treasury stocks and others.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(6)

As of March 31, 2016 and December 31, 2015, unrecognized equity interest in investments in associates and joint ventures whose book value has been reduced to zero due to accumulated losses are as follows:


In millions of won	March 31, 2016					December 31, 2015
	Unrecognized equity interest			Accumulated unrecognized equity interest		Unrecognized equity interest			Accumulated unrecognized equity interest

Green Biomass Co., Ltd.	W	—			—		(125	)		—
Shin Pyeongtaek Power Co., Ltd.		2,110			3,436		1,038			1,326
KEPCO Energy Resource Nigeria Limited		7,829			18,832		4,645			11,003
Chun-cheon Energy Co., Ltd.		—			—		(8	)		—
Seokmun Energy Co., Ltd.		(205	)		—		152			205
Kelar S.A		45,433			62,822		17,389			17,389
Hadong Mineral Fiber Co., Ltd.		—			5		5			5
PT. Mutiara Jawa		24			1,375		1,351			1,351
Eurasia Energy Holdings		(3	)		185		188			188
KODE NOVUS I LLC		736			23,525		22,789			22,789
KODE NOVUS II LLC		484			11,659		11,175			11,175

(7)

As of March 31, 2016, shareholders’ agreements on investments in associates and joint ventures that may cause future economic costs or cash outflows are as follows:

(i)

Gemeng International Energy Co., Ltd.

Gemeng International Energy Co., Ltd., issued put options on 8% of its shares to its financial investors, KEPCO Woori Sprott PEF (NPS Co-Pa PEF). If the investment fund is not collected until the maturity date (December 25, 2023, two years extension is possible), PEF can exercise the option at strike price which is the same as a principal investment price (including operating fees ratio of below 1% per annum), and also, the Company provided a performance guarantee on this agreement.

(ii)

Hyundai Energy Co., Ltd.

As of March 31, 2016, Hyundai Energy Co., Ltd., an associate of the Company, which engages in the integrated energy business, entered into a project financing loan agreement with a limit of W450 billion with Korea Development Bank and others, and the Company guaranteed to create a certain amount of sales profit.

Related to the above project financing, NH Power II Co., Ltd. and National Agricultural Cooperative Federation (“NACF”) has entered into an agreement with Boim Energy Co., Ltd. to acquire shares in Hyundai Energy Co., Ltd. held by Boim Energy Co., Ltd. The Company had placed guarantees for a fixed return on the investment to the financial institutions and had obtained the rights to acquire the investment securities in return preferentially.

In addition, NH Power II Co., Ltd. and NACF have a right, which can be exercised for 30 days starting from 2 months to 1 month prior to 17 years after the termination date of the contract to sell their shares to the Company. Also, if dividends to shareholders’ exceed annual revenue, the excessive amount shall be evenly distributed to Boim Energy Co., Ltd. and the Company.

(iii)

Taebaek Wind Power Co., Ltd.

In case non-controlling shareholders decide to dispose of their shares in Taebaek Wind Power Co., Ltd. after the warrant period of defect repair for wind power generator has expired, the Company is obligated to acquire those shares at fair value. The acquisition is to be made after the conditions of the acquisition are discussed among the parties involved, with consideration of various factors such as financial status and business situation.

(iv)

Pyeongchang Wind Power Co., Ltd.

In case non-controlling shareholders decide to dispose of their shares in Pyeongchang Wind Power Co., Ltd. after commercial operation of the power plant has started, the Company is obligated to acquire those shares at fair value. The acquisition is to be made after the conditions of the acquisition are discussed among the parties involved, with the careful consideration of various factors such as financial status and business situation.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(7)

As of March 31, 2016, shareholders’ agreements on investments in associates and joint ventures that may cause future economic costs or cash outflows are as follows, continued:

(v)

Jeongam Wind Power Co., Ltd.

In case non-controlling shareholders, except for financial investors, decide to dispose of their shares in Jeongam Wind Power Co., Ltd. after the construction of the power plant has been completed, the Company is obligated to acquire those shares at fair value.

(vi)

Daejung Offshore Wind Power Co., Ltd.

In case Samsung Heavy Industries Co., Ltd., a co-participant of the joint venture agreement, decides to dispose of its shares in Daejung Offshore Wind Power Co., Ltd., the Company is obligated to acquire those shares after evaluating the economic feasibility of the facilities installed by Samsung Heavy Industries Co., Ltd.

(vii)

DS Power Co., Ltd.

The Company has a right to sell all shares and bonds of DS POWER Co., Ltd. to Daesung Industrial Co., Ltd. and Daesung Industrial Co., Ltd. or an authoritative person appointed by Daesung Industrial Co., Ltd.

(viii)

Samcheok Eco Material Co., Ltd.

The Company has the rights to purchase the stocks should preferred stockholders elect to sell their stocks on the expected sell date (3 years from preferred stock payment date) and is required to guarantee the promised yield when preferred stockholders sell their stocks.

(ix)

Seokmun Energy Co., Ltd.

The Company has an obligation to invest an additional W15 billion in Seokmun Energy Co., Ltd. The obligation may be conducted through acquisition of new shares, converted shares or convertible bonds.

(x)

Chun-cheon Energy Co., Ltd.

The Company has an obligation to acquire the converted shares up to un-invested balance when Chun-cheon Energy Co., Ltd. fails to repay the convertible bonds on the maturity date.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(8)

Significant restrictions on its abilities to associates or joint ventures are as follows:


Company		Nature and extent of any significant restrictions

KNOC Nigerian East Oil Co., Ltd., KNOC Nigerian West Oil Co., Ltd. Dolphin Property Limited		The Company has stopped its operation in Nigeria due to an ongoing litigation and payment or retrieval of investments, loans and advances are restricted until the legal dispute is resolved.

Daeryun Power Co., Ltd.		Principals on subordinated loans or dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained.

Changjuk Wind Power Co., Ltd.		Principals on subordinated loans or dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained.

Busan Solar Co., Ltd.		Dividends cannot be declared or paid without the prior written consent of the agency, Consus Asset Management Co., Ltd. based on the loan agreement until the principal of a loan is paid off in full.

Taebaek Wind Power Co., Ltd.		Financial institutions can reject or defer an approval with regard to the request for fund executions on subordinated loans of shareholders in order to pay senior loans based on the loan agreement.

Pyeongchang Wind Power Co., Ltd.		Principals on subordinated loans or dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained.

Daegu Green Power Co., Ltd.		Only if the condition satisfies the terms of the loan agreements signed by financial institutions, the investors of subordinated credit facility loans can receive payments of principal and interest and dividend. KEB Hana Bank, the deputy, permits the amount of the payments and dividend.

KS Solar Co., Ltd.		Dividends can only be paid when all conditions of a loan agreement are satisfied.

KNH Solar Co., Ltd.		Principal and interest, dividends to shareholders cannot be paid without written consent of financial institutions.

DS Power Co., Ltd.		Shares cannot be wholly or partially transferred, except as permitted by the agreement.

Hyundai Green Power Co., Ltd.		As of March 31, 2016, Hyundai Green Power Co., Ltd., an associate of the Company, which engages in the byproduct gas power generating business, entered into a project financing agreement with a limit of W919.2 billion with Korea Development Bank and others. At a certain period in the future, KEPCO has an appraisal right against the financial investors (Korea Development Bank and others) and also has an obligation to sell its shares when claimed by the financial investors. At a certain period in the future, KEPCO has an appraisal right against Hyundai Steel Company and a third party designated by Hyundai Steel Company (collectively, “Hyundai Steel Company”), the operating investor of Hyundai Green Power Co., Ltd., according to the conditions of the agreement and also has an obligation to sell its shares when claimed by Hyundai Steel Company.

100

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

18.

Property, Plant and Equipment

(1)

Property, plant and equipment as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Acquisition cost		Government grants			Accumulated depreciation			Accumulated impairment *losses ()**			Book value
Land	W	12,522,345		(3,194	)		—			—			12,519,151
Buildings		15,287,036		(62,952	)		(5,418,763	)		(854	)		9,804,467
Structures		58,865,507		(194,630	)		(18,482,953	)		(1,184	)		40,186,740
Machinery		57,523,908		(111,172	)		(21,223,006	)		(36,230	)		36,153,500
Ships		4,930		—			(4,219	)		—			711
Vehicles		233,617		(27	)		(167,738	)		—			65,852
Equipment		1,154,878		(940	)		(845,594	)		—			308,344
Tools		860,508		(636	)		(692,683	)		—			167,189
Construction-in-progress		37,210,793		(139,027	)		—			(38,107	)		37,033,659
Finance lease assets		2,389,977		—			(1,904,959	)		—			485,018
Asset retirement costs		6,890,161		—			(2,873,122	)		—			4,017,039
Others		9,630,144		—			(7,395,372	)		—			2,234,772


	W	202,573,804		(512,578	)		(59,008,409	)		(76,375	)		142,976,442

(*)	The Company separately recognizes impairment loss on each asset, reflecting various factors such as physical impairment and others during the replacement.


In millions of won	December 31, 2015
	Acquisition cost		Government grants			Accumulated depreciation			Accumulated impairment *losses ()**			Book value
Land	W	12,396,460		(3,147	)		—			—			12,393,313
Buildings		14,936,722		(63,932	)		(5,259,436	)		(854	)		9,612,500
Structures		58,251,296		(193,119	)		(17,991,950	)		(1,184	)		40,065,043
Machinery		57,143,211		(108,935	)		(20,242,232	)		(36,230	)		36,755,814
Ships		4,930		—			(4,144	)		—			786
Vehicles		227,733		(29	)		(167,261	)		—			60,443
Equipment		1,134,376		(1,026	)		(823,805	)		—			309,545
Tools		836,131		(691	)		(675,501	)		—			159,939
Construction-in-progress		35,305,133		(139,898	)		—			(38,107	)		35,127,128
Finance lease assets		2,389,985		—			(1,878,476	)		—			511,509
Asset retirement costs		6,888,547		—			(2,782,460	)		—			4,106,087
Others		9,438,381		—			(7,179,137	)		—			2,259,244


	W	198,952,905		(510,777	)		(57,004,402	)		(76,375	)		141,361,351

(*)	The Company separately recognizes impairment loss on each asset, reflecting various factors such as physical impairment and others during the replacement.

101

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

18.

Property, Plant and Equipment, Continued

(2)

Changes in property, plant and equipment for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Beginning balance			Acquisition			Disposal			Depreciation			Impairment		Others			Ending balance

Land	W	12,396,460			3,396			(8,249	)		—			—		130,738			12,522,345
(Government grants)		(3,147	)		—			—			—			—		(47	)		(3,194	)
Buildings		9,676,432			76			(1,631	)		(161,580	)		—		354,122			9,867,419
(Government grants)		(63,932	)		—			—			1,279			—		(299	)		(62,952	)
Structures		40,258,162			883			(116,930	)		(550,331	)		—		789,586			40,381,370
(Government grants)		(193,119	)		—			728			2,331			—		(4,570	)		(194,630	)
Machinery		36,864,749			61,450			(48,161	)		(1,012,944	)		—		399,578			36,264,672
(Government grants)		(108,935	)		—			502			2,887			—		(5,626	)		(111,172	)
Ships		786			—			—			(75	)		—		—			711
Vehicles		60,472			103			(11	)		(6,612	)		—		11,927			65,879
(Government grants)		(29	)		—			—			2			—		—			(27	)
Equipment		310,571			17,148			(9	)		(28,921	)		—		10,495			309,284
(Government grants)		(1,026	)		—			—			136			—		(50	)		(940	)
Tools		160,630			2,839			(5	)		(17,005	)		—		21,366			167,825
(Government grants)		(691	)		—			—			72			—		(17	)		(636	)
Construction-in-progress		35,267,026			3,514,457			—			—			—		(1,608,797	)		37,172,686
(Government grants)		(139,898	)		(9,344	)		—			—			—		10,215			(139,027	)
Finance lease assets		511,509			—			—			(21,973	)		—		(4,518	)		485,018
Asset retirement cost		4,106,087			—			—			(132,895	)		—		43,847			4,017,039
Others		2,259,244			8,127			(98	)		(216,415	)		—		183,914			2,234,772


	W	141,361,351			3,599,135			(173,864	)		(2,142,044	)		—		331,864			142,976,442

102

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

18.

Property, Plant and Equipment, Continued

(2)

Changes in property, plant and equipment for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows, continued:


In millions of won	December 31, 2015
	Beginning balance			Acquisition			Disposal			Depreciation			Impairment (*1)			Others (*2)			Ending balance

Land	W	12,238,488			9,370			(192,496	)		—			—			341,098			12,396,460
(Government grants)		(3,103	)		—			—			—			—			(44	)		(3,147	)
Buildings		8,979,023			12,466			(42,889	)		(633,770	)		—			1,361,602			9,676,432
(Government grants)		(67,700	)		—			—			5,064			—			(1,296	)		(63,932	)
Structures		38,654,777			1,787			(181,914	)		(2,120,749	)		—			3,904,261			40,258,162
(Government grants)		(196,871	)		—			1,816			9,178			—			(7,242	)		(193,119	)
Machinery		35,460,708			430,524			(250,915	)		(3,880,076	)		(1,205	)		5,105,713			36,864,749
(Government grants)		(108,750	)		—			1,101			11,133			—			(12,419	)		(108,935	)
Ships		1,085			—			—			(299	)		—			—			786
Vehicles		50,576			5,449			(27	)		(22,175	)		—			26,649			60,472
(Government grants)		(76	)		—			1			47			—			(1	)		(29	)
Equipment		211,647			56,004			(230	)		(103,889	)		—			147,039			310,571
(Government grants)		(1,002	)		—			—			469			—			(493	)		(1,026	)
Tools		152,777			25,940			(90	)		(67,482	)		—			49,485			160,630
(Government grants)		(862	)		—			—			268			—			(97	)		(691	)
Construction-in-progress		32,379,512			13,508,590			(13,658	)		—			(29,139	)		(10,578,279	)		35,267,026
(Government grants)		(123,938	)		(27,239	)		—			—			—			11,279			(139,898	)
Finance lease assets		612,395			1,560			(3,959	)		(110,162	)		—			11,675			511,509
Asset retirement cost		5,354,427			—			—			(551,461	)		—			(696,879	)		4,106,087
Others		2,219,386			25,436			(98	)		(804,545	)		—			819,065			2,259,244


	W	135,812,499			14,049,887			(683,358	)		(8,268,449	)		(30,344	)		481,116			141,361,351

(*1)

Korea South-East Power Co., Ltd. and Korea East-West Power Co., Ltd, 100% owned subsidiaries, have determined that there is an impairment indicator and performed an impairment test over the individual assets. As a result, the Company recognized the amount of the carrying amount in excess of its recoverable amount as impairment loss in the consolidated statements of comprehensive income.

(*2)	‘Others’ include W23,273 million of assets held for sale (note 41) comprising land and buildings and the amount is W2,907 million and W20,366 million, respectively.

103

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

19.

Investment Properties

(1)

Investment properties as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Acquisition cost		Government grants			Accumulated depreciation			Book value

Land	W	209,935		—			—			209,935
Buildings		27,812		(17	)		(12,790	)		15,005


	W	237,747		(17	)		(12,790	)		224,940


In millions of won	December 31, 2015
	Acquisition cost		Government grants			Accumulated depreciation			Book value

Land	W	253,960		—			—			253,960
Buildings		27,655		(13	)		(11,692	)		15,950


	W	281,615		(13	)		(11,692	)		269,910

(2)

Changes in investment properties for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Beginning balance			Depreciation			Others			Ending balance

Land	W	253,960			—			(44,025	)		209,935
Buildings		15,963			(198	)		(743	)		15,022
(Government grants)		(13	)		—			(4	)		(17	)


	W	269,910			(198	)		(44,772	)		224,940


In millions of won	December 31, 2015
	Beginning balance			Depreciation			Others			Ending balance

Land	W	301,483			—			(47,523	)		253,960
Buildings		15,791			(669	)		841			15,963
(Government grants)		(10	)		—			(3	)		(13	)


	W	317,264			(669	)		(46,685	)		269,910

104

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

19.

Investment Properties, Continued

(3)

Income and expenses related to investment properties for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016			March 31, 2015

Rental income	W	1,896			2,192
Operating and maintenance expenses related to rental income		(198	)		(162	)


	W	1,698			2,030

(4)

Fair value of investment properties as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016				December 31, 2015
	Book value		Fair value		Book value		Fair value

Land	W	209,935		243,152		253,960		284,423
Buildings		15,005		16,636		15,950		18,263


	W	224,940		259,788		269,910		302,686

The fair values of the investment properties as of the reporting date were determined in consideration of the fluctuation on the publicly announced individual land price after the K-IFRS transition date.

(5)

All of the Company’s investment property is held under freehold interests.

20.

Construction Contracts

(1)

Changes in balance of construction service contracts for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Beginning balance		Increase and decrease (*)			Recognized revenue			Ending balance

Nuclear power plant construction in UAE and others	W	12,308,839		(429,135	)		(981,845	)		10,897,859

(*)	For the three-month period ended March 31, 2016, the increased balance of contracts from new orders and other is W59,671 million and the decreased balance of contracts from changes in size of construction is W488,806 million.


In millions of won	December 31, 2015
	Beginning Balance		Increase and decrease (*)			Recognized revenue			Ending balance

Nuclear power plant construction in UAE and others	W	17,081,074		(1,011,031	)		(3,761,204	)		12,308,839

(*)	For the year ended December 31, 2015, the increased balance of contracts from new orders and other is W412,617 million and the decreased balance of contracts from changes in size of construction is W1,423,648 million.

105

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

20.

Construction Contracts, Continued

(2)

Accumulated earned revenue, expense and others related to the Company’s construction as of March 31, 2016 and December 31, 2015 are as follows:

In millions of won

March 31, 2016

Accumulated
earned revenue

Accumulated
expense

Accumulated
profit

Unearned
advance
receipts

Nuclear power plant construction in UAE and others

12,825,247

12,131,111

694,136

—

In millions of won

December 31, 2015

Accumulated
earned revenue

Accumulated
expense

Accumulated
profit

Unearned
advance
receipts

Nuclear power plant construction in UAE and others

12,224,934

11,573,516

651,418

—

(3)

Gross amount due from customers recognized as assets and due to customers recognized as liabilities for contract work as of March 31, 2016 and December 31, 2015 are as follows:

In millions of won

March 31, 2016

December 31, 2015

Assets (*1)

Liabilities (*2)

Assets (*1)

Liabilities (*2)

Nuclear power plant construction in UAE and others

61,840

980,514

55,317

893,992

(*1)	Included in trade and other receivables, net, in the consolidated interim statements of financial position.

(*2)	Included in non-financial liabilities in the consolidated interim statements of financial position.

(4)

The contract between the Company and ENEC (purchaser) states that disclosure of information related to UAE nuclear power plant construction projects such as a contract date, a contractual completion date, completion progress, unbilled construction, impairment losses, etc. is not allowed without agreement of the purchaser. ENEC did not agree to disclose such information. Accordingly, the Company did not disclose such information based on K-IFRS 1011 45.2(2) as it is probable that ENEC may file a lawsuit for breach of contract if the Company discloses. Also, the Company has not disclosed such information in a registration statement, investment prospectus or annual report.

(5)

Changes in estimates of contract revenues and costs related to the Company’s construction for the three-month period ended March 31, 2016 are as follows:


In millions of won	March 31, 2016
											Assets					Receivables from construction contracts
	Provision for construction losses		Changes in estimates of contract costs		Amounts recognized in current profit or loss			Amounts recognized in future profit or loss			Gross		Allowance for doubtful accounts			Gross		Allowance for doubtful accounts

Transmission and distribution	W	—		—		—			—			2,588		—			—		—
Electric power generation (nuclear)		—		—		—			—			1,414		—			—		—
Plant maintenance & engineering service		1,615		10,577		(6,882	)		(3,695	)		57,838		(75	)		24,733		(4,071	)


	W	1,615		10,577		(6,882	)		(3,695	)		61,840		(75	)		24,733		(4,071	)

106

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

21.

Intangible Assets other than Goodwill

(1)

Intangible assets as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Acquisition cost		Government grants			Accumulated amortization			Accumulated impairment losses			Book value

Software	W	408,330		(672	)		(341,725	)		—			65,933
Licenses and franchises		3,398		—			(3,398	)		—			—
Copyrights, patents rights and other industrial rights		34,343		—			(13,144	)		—			21,199
Mining rights		533,725		—			(9,579	)		—			524,146
Development expenditures		758,641		(6,376	)		(705,853	)		—			46,412
Intangible assets under development		96,029		(10,623	)		—			—			85,406
Usage rights of donated assets and other		375,275		(29	)		(328,958	)		—			46,288
Leasehold rights		19,112		—			(18,375	)		—			737
Others		193,885		(1	)		(83,376	)		(12,125	)		98,383


	W	2,422,738		(17,701	)		(1,504,408	)		(12,125	)		888,504


In millions of won	December 31, 2015
	Acquisition cost		Government grants			Accumulated amortization			Accumulated impairment losses			Book value

Software	W	389,220		(699	)		(331,334	)		—			57,187
Licenses and franchises		3,398		—			(3,398	)		—			—
Copyrights, patents rights and other industrial rights		34,178		—			(12,303	)		—			21,875
Mining rights		508,392		—			(8,855	)		—			499,537
Development expenditures		751,784		(6,835	)		(699,977	)		—			44,972
Intangible assets under development		94,886		(10,483	)		—			—			84,403
Usage rights of donated assets and other		375,275		(32	)		(326,684	)		—			48,559
Leasehold rights		19,112		—			(18,367	)		—			745
Greenhouse gas emissions rights		805		—			—			—			805
Others		189,941		(1	)		(80,067	)		(12,124	)		97,749


	W	2,366,991		(18,050	)		(1,480,985	)		(12,124	)		855,832

107

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

21.

Intangible Assets other than Goodwill, Continued

(2)

Changes in intangible assets for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Beginning balance			Acquisition			Disposal			Amortization			Impairment			Others			Ending balance

Software	W	57,886			3,435			—			(9,913	)		—			15,197			66,605
(Government grants)		(699	)		—			—			61			—			(34	)		(672	)
Copyrights, patents rights and other industrial rights		21,875			2			(24	)		(673	)		—			19			21,199
Mining rights		499,537			6,352			(10	)		—			—			18,267			524,146
Development expenditures		51,807			37			—			(5,768	)		—			6,712			52,788
(Government grants)		(6,835	)		—			—			759			—			(300	)		(6,376	)
Intangible assets under development		94,886			5,714			—			—			—			(4,571	)		96,029
(Government grants)		(10,483	)		—			—			—			—			(140	)		(10,623	)
Usage rights of donated assets and other		48,591			—			—			(2,262	)		—			(12	)		46,317
(Government grants)		(32	)		—			—			3			—			—			(29	)
Leasehold rights		745			—			—			(8	)		—			—			737
Greenhouse gas emissions rights		805			—			—			—			—			(805	)		—
Others		97,750			72			(242	)		(2,295	)		—			3,099			98,384
(Government grants)		(1	)		—			—			—			—			—			(1	)


	W	855,832			15,612			(276	)		(20,096	)		—			37,432			888,504


In millions of won	December 31, 2015
	Beginning balance			Acquisition			Disposal			Amortization			Impairment			Others			Ending balance

Software	W	52,556			10,477			(2	)		(29,795	)		187			24,463			57,886
(Government grants)		(488	)		—			—			177			—			(388	)		(699	)
Licenses and franchises		54			—			—			(54	)		—			—			—
Copyrights, patents rights and other industrial rights		22,677			129			(2	)		(2,866	)		—			1,937			21,875
Mining rights		504,214			23,151			—			(228	)		—			(27,600	)		499,537
Development expenditures		55,857			8,096			(5	)		(24,862	)		—			12,721			51,807
(Government grants)		(8,183	)		—			—			2,937			—			(1,589	)		(6,835	)
Intangible assets under development		74,909			40,300			—			—			(22	)		(20,301	)		94,886
(Government grants)		(10,692	)		(1,884	)		—			—			—			2,093			(10,483	)
Usage rights of donated assets and other		57,687			—			—			(9,096	)		—			—			48,591
(Government grants)		(43	)		—			—			11			—			—			(32	)
Leasehold rights		779			—			—			(34	)		—			—			745
Greenhouse gas emissions rights		—			805			—			—			—			—			805
Others		71,734			6,872			(443	)		(8,456	)		88			27,955			97,750
(Government grants)		(1	)		—			—			—			—			—			(1	)


	W	821,060			87,946			(452	)		(72,266	)		253			19,291			855,832

108

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

21.

Intangible Assets other than Goodwill, Continued

(3)

Significant specific intangible assets as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won and thousands of Australian dollars
March 31, 2016
Type	Description	Currency	Amount		Remaining useful years

Software	ERP system and others	KRW		716	1 years and 8 months ~ 2 years and 8 months
Copyrights, patents rights and other industrial rights	Smart technology verification and standard design project conducting right	KRW		6,500	6 years and 6 months
Mining rights	Mining right of Bylong mine	AUD		401,225	— (*)
Development expenditures	KOSPO Evolutionary Efficient & Powerful System(KEEPS)	KRW		1,052	1 years and 3 months
	Development of maintenance system for utility plant	KRW		942	1 years and 8 months
Intangible assets under development	Contributions to ARP NRC DC	KRW		29,358	—
	CHF testing for best representative of HIPER/X2-Gen Fuel and development of best explanatory CHF correlation	KRW		9,872	—
Usage rights of donated assets	Songdo international business district(sector 1, 3) sharing charge	KRW		2,412	1 years and 7 months
	Dangjin power plant load facility usage right	KRW		31,481	5 years
Others	Sillim electricity supply facility usage right	KRW		2,531	5 years and 8 months
	Next generation SCADA O/S(POWERON RELIANCE)	KRW		4,156	3 years and 10 months
(*) Mining rights are amortized using the units-of-production method and the amortization has not commenced yet.


In millions of won and thousands of Australian dollars
December 31, 2015
Type	Description	Currency	Amount		Remaining useful years

Software	ERP system and others	KRW		1,293	2 months ~ 2 years and 11 months
Copyrights, patents rights and other industrial rights	Smart technology verification and standard design project conducting right	KRW		6,750	6 years and 9 months
Mining rights	Mining right of Bylong mine	AUD		401,225	— (*)
Development expenditures	KOSPO Evolutionary Efficient & Powerful System(KEEPS)	KRW		2,104	1 years and 6 months
	Development of maintenance system for utility plant	KRW		1,084	1 years and 11 months
Intangible assets under development	Contributions to ARP NRC DC	KRW		29,148	—
	CHF testing for best representative of HIPER/X2-Gen Fuel and development of best explanatory CHF correlation	KRW		9,871	—
Usage rights of donated assets	Songdo international business district(sector 1, 3) sharing charge	KRW		2,793	1 years and 10 months
	Dangjin power plant load facility usage right	KRW		33,055	5 years and 3 months
Others	Shingwangju electricity supply facility usage right	KRW		2,297	3 years and 5 months
	Sillim electricity supply facility usage right	KRW		2,642	5 years and 11 months

(*)	Mining rights are amortized using the units-of-production method and the amortization has not commenced yet.

(4)

For the three-month periods ended March 31, 2016 and 2015, the Company recognized research and development expenses of W124,784 million and W110,520 million, respectively.

109

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

22.

Trade and Other Payables

Trade and other payables as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016				December 31, 2015
	Current		Non-current		Current		Non-current

Trade payables	W	1,788,765		—		1,957,647		—
Other trade payables		1,253,282		3,044,621		1,379,035		3,048,299
Accrued expenses		1,055,595		2,534		1,082,880		2,373
Leasehold deposits received		1,484		1,008		2,451		—
Other deposits received		188,859		105,676		195,237		105,105
Finance lease liabilities		117,461		511,882		116,885		542,509
Dividends payable		2,030,748		—		1,562		—
Others		—		12,656		—		20,149


	W	6,436,194		3,678,377		4,735,697		3,718,435

23.

Borrowings and Debt Securities

(1)

Borrowings and debt securities as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015
Current liabilities
Short-term borrowings	W	362,572			603,673
Current portion of long-term borrowings		466,327			541,307
Current portion of debt securities		7,900,557			6,704,602
Less : Current portion of discount on long-term borrowings		(916	)		(953	)
Less : Current portion of discount on debt securities		(2,520	)		(1,676	)

		8,726,020			7,846,953


Non-current liabilities
Long-term borrowings		1,701,403			1,951,119
Debt securities		46,642,111			49,077,131
Less : Discount on long-term borrowings		(18,185	)		(18,860	)
Less : Discount on debt securities		(100,227	)		(103,067	)
Add : Premium on debt securities		208			223

		48,225,310			50,906,546


	W	56,951,330			58,753,499

110

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(2)

Repayment schedule of borrowings and debt securities as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won
March 31, 2016
Type	Borrowings		Debt Securities

Less than 1 year	W	828,899		7,900,557
1~ 5 years		480,925		24,276,100
Over 5 years		1,220,478		22,366,011


	W	2,530,302		54,542,668


In millions of won
December 31, 2015
Type	Borrowings		Debt Securities

Less than 1 year	W	1,144,980		6,704,602
1~ 5 years		860,351		27,725,651
Over 5 years		1,090,768		21,351,480


	W	3,096,099		55,781,733

(3)

Short-term borrowings as of March 31, 2016 and December 31, 2015 are as follows:

In millions of won and thousands of U.S. dollars

March 31, 2016

Type

Creditor

Interest rate (%)

Maturity

Foreign
currency

Local
currency

Local short-term borrowings

Kookmin Bank and others

2.17 ~ 2.69

2016.04.15 ~

2016.09.13

—

83,530

Foreign short-term borrowings

SCNT and others

6.50

2016.12.03

USD

2,163

2,495

Foreign short-term borrowings

Export-Import Bank of Korea

3M Libor + 0.65

2016.12.19

AUD

269,706

238,463

Local bank overdraft

Woori Bank

Standard overdraft rate + 1.12

2017.02.25

—

38,084

362,572

In millions of won and thousands of U.S. dollars

December 31, 2015

Type

Creditor

Interest rate (%)

Maturity

Foreign
currency

Local
currency

Local short-term borrowings

Woori Investment Bank and others

1.8 ~ 2.46

2016.01.04 ~

2016.09.13

—

559,530

Foreign short-term borrowings

ING and others

6.50

2016.12.03

USD

2,163

2,535

Foreign short-term borrowings

Citi Bank and others

3M Libor + 0.35

2016.03.22

USD

12,265

14,375

Local bank overdraft

Woori Bank

Standard overdraft rate + 1.12

2016.02.25

—

27,233

603,673

111

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(4)

Long-term borrowings as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won and thousands of foreign currencies
March 31, 2016
Type		Interest rate (%)	Maturity	Foreign currency		Local currency
Local long-term borrowings
Korea Development Bank	Others	0.50	2018 ~ 2044		—	W	6,229
	Facility	2.67 ~ 4.60	2023 ~ 2028		—		58,022
	Facility	3yr KTB rate – 1.25	2027		—		9,000
	Facility	1yr KoFC bond rate + 0.31	2018		—		200,000
	Operating funds	2.75	2018		—		12,000
KEB Hana Bank	Commercial Paper	3M CD + 0.03 ~ 0.54	2016 ~ 2017		—		400,000
	Facility	3yr KTB rate – 1.25	2016 ~ 2028		—		10,186
	Facility	4.60	2028		—		18,130
	Energy rationalization	3yr KTB rate – 1.25	2019		—		600
	Energy rationalization	3.20 ~ 3.70	2021 ~ 2022		—		3,835
Korea Industrial Bank	PF Refinancing	CD + 1.25	2030		—		22,500
	Others	3yr KTB rate – 1.25	2016		—		4,000
Export-Import Bank of Korea	Project loans	2.00	2026		—		30,935
Korea Resources Corporation	Development of power resources	3yr KTB rate – 2.25	2022 ~ 2027		—		43,408
	Facility	3yr KTB rate – 2.25	2016 ~ 2024		—		4,260
	Project loans	—	2022 ~ 2027		—		8,669
	Others	3yr KTB rate – 2.25	2024 ~ 2025		—		12,826
Shinhan Bank and others	Collateral borrowing	2.22	2017		—		30,000
	Facility	3yr AA- CB rate + 1.10	2028		—		27,194
	Operating funds	2.70 ~ 2.86	2017 ~ 2018		—		25,000
Kookmin Bank	Facility	MOR + 0.62 ~ 0.79	2017 ~ 2023		—		36,300
Others	Facility	4.60 ~ 5.80	2025 ~ 2028		—		141,374
	Facility	3yr AA- CB rate + 1.10	2028		—		18,130
	PF Refinancing	4.10	2030		—		62,500
	Others	4.32 ~ 8.00	2020 ~ 2036		—		45,847
	Others	—	2028		—		7,250

							1,238,195

Foreign long-term borrowings
Korea National Oil Corporation	Project loans	—	2021 ~ 2023	USD	8,744		10,086
Export-Import Bank of Korea and others	Direct loan and others	3M Libor + 2.75 ~ 3.70	2027	JOD	188,580		307,611
	Commercial loan and others	3M Libor + 1.50 ~ 2.50	2030 ~ 2033	USD	309,546		357,061
	PF Loan	6M Libor + 2.50 ~ 2.70	2032	USD	75,791		87,425
SCNT and others	Shareholder’s loan	6.50 ~ 8.00	2023	USD	37,848		43,658
	Shareholder’s loan	8.00	2031	JOD	7,128		11,627
PT PJB and others	Shareholder’s loan	12.75	2017	IDR	23,658,161		2,056
HSBC and others	Syndicated loan	3M Libor + 0.30 ~ 0.50	2017 ~ 2019	USD	31,774		36,651
IFC and others	Others	6M Libor + 5.00	2031	PKR	5,891,200		64,921
Others	Others	—	2019	USD	7,317		8,439

							929,535

							2,167,730
Less : Discount of long-term borrowings							(19,101	)
Less : Current portion of long-term borrowings							(466,327	)
Add : Current portion of discount of long-term borrowings							916


						W	1,683,218

112

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(4)

Long-term borrowings as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won and thousands of foreign currencies
December 31, 2015
Type		Interest rate (%)	Maturity	Foreign currency		Local currency
Local long-term borrowings
Korea Development Bank	Others	0.50	2018 ~ 2044		—	W	6,418
	Facility	2.67 ~ 4.60	2023 ~ 2028		—		52,437
	Facility	3yr KTB rate – 1.25	2027		—		9,000
	Facility	1yr KoFC bond rate + 0.31	2018		—		200,000
	Operating funds	2.75	2018		—		12,000
KEB Hana Bank	Commercial Paper	3M CD + 0.03 ~ 0.54	2016 ~ 2017		—		500,000
	Facility	3yr KTB rate – 1.25	2021 ~ 2028		—		10,363
	Facility	4.60	2028		—		18,411
	Energy rationalization	3yr KTB rate – 1.25	2019		—		650
	Energy rationalization	3.20 ~ 3.70	2021 ~ 2022		—		3,835
Korea Industrial Bank	PF Refinancing	CD + 1.25	2030		—		22,500
	Others	3yr KTB rate – 1.25	2016		—		4,000
Export-Import Bank of Korea	Project loans	2.00	2026		—		30,935
Korea Resources Corporation	Development of power resources	3yr KTB rate – 2.25	2022 ~ 2027		—		44,674
	Facility	3yr KTB rate – 2.25	2023 ~ 2024		—		4,400
	Project loans	—	2022 ~ 2027		—		8,677
	Others	3yr KTB rate – 2.25	2024 ~ 2025		—		13,057
Shinhan Bank and others	Collateral borrowing	2.22	2017		—		30,000
	Facility	3yr AA- CB rate + 1.10	2028		—		27,617
	Operating funds	2.70 ~ 3.35	2017 ~ 2018		—		25,000
Kookmin Bank	Facility	MOR + 0.62 ~ 0.79	2017 ~ 2023		—		25,300
Others	Facility	4.60 ~ 5.80	2025 ~ 2028		—		144,359
	Facility	3yr AA- CB rate + 1.10	2028		—		18,411
	PF Refinancing	4.10	2030		—		62,500
	Others	—	2020 ~ 2036		—		45,847
	Others	—	2028		—		7,250

							1,327,641

Foreign long-term borrowings
Korea National Oil Corporation	Project loans	—	2021 ~ 2023	USD	8,744		10,248
Export-Import Bank of Korea and others	Direct loan and others	3M Libor + 2.75 ~ 3.70	2027	JOD	188,580		312,104
	Commercial loan and others	3M Libor + 1.50 ~ 2.50	2030 ~ 2033	USD	312,601		366,368
	PF Loan	6M Libor + 2.50 ~ 2.70	2032	USD	64,389		75,464
SCNT and others	Shareholder’s loan	6.50 ~ 8.00	2023	USD	34,924		40,931
	Shareholder’s loan	8.00	2031	JOD	7,128		11,797
PT PJB and others	Shareholder’s loan	12.75	2017	IDR	22,346,550		1,899
HSBC and others	Syndicated loan	3M Libor + 0.30 ~ 0.50	2017 ~ 2019	USD	31,774		37,239
IFC and others	Others	6M Libor + 5.00	2031	PKR	5,891,200		65,805
Others	Others	3M Libor + 0.65	2017	USD	199,269		233,543
	Others	—	2019	USD	8,010		9,387

							1,164,785

							2,492,426
Less : Discount of long-term borrowings							(19,813	)
Less : Current portion of long-term borrowings							(541,307	)
Add : Current portion of discount of long-term borrowings							953


						W	1,932,259

113

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(5)

Local debt securities as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won
	Issue date	Maturity	Interest rate (%)	March 31, 2016			December 31, 2015

Electricity Bonds (*1)	2009.04.10 ~ 2014.08.27	2016.04.10 ~ 2033.08.06	2.73 ~ 5.51	W	21,610,000			22,960,000
Electricity Bonds	2012.05.29 ~ 2013.06.25	2016.05.29 ~ 2018.06.25	3M CD + 0.25 ~ 0.32		910,000			910,000
Corporate Bonds (*2)	2009.05.04 ~ 2016.03.31	2016.04.15 ~ 2040.12.10	1.90 ~ 5.84		20,842,708			20,710,010

					43,362,708			44,580,010


Less : Discount on local debt securities					(38,932	)		(40,228	)
Less : Current portion of local debt securities					(6,920,000	)		(5,730,000	)
Add : Current portion of discount on local debt securities					1,507			1,187


				W	36,405,283			38,810,969

(*1)	Electricity Bonds 885 (W40,000 million) can be redeemed every April 28 after three years from its issue date, April 28, 2014.

(*2)	Corporate Bonds of HeeMang Sunlight Power Co., Ltd (W2,697 million) can be redeemed every March 31 after five years from its issue date, March 31, 2016.

(6)

Foreign debt securities as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won and thousands of foreign currencies
March 31, 2016
Type	Issue date	Maturity	Interest rate (%)	Foreign currency		Local currency

FY-96	1996.04.01 ~ 1996.12.06	2026.12.06 ~ 2096.04.01	6.00 ~ 8.37	USD	249,137	W	287,380
FY-97	1997.01.31 ~ 1997.08.04	2027.02.01 ~ 2027.08.01	6.75 ~ 7.00	USD	314,717		363,026
FY-04	2004.04.23	2034.04.23	5.13	USD	286,920		330,962
FY-06	2006.05.26 ~ 2006.09.29	2016.05.25 ~ 2016.09.29	5.50 ~ 6.00	USD	450,000		519,075
FY-08	2008.11.27	2018.11.27	4.19	JPY	20,000,000		205,204
FY-11	2011.07.13 ~ 2011.07.29	2017.01.30 ~ 2021.07.13	3.63 ~ 4.75	USD	800,000		922,800
FY-12	2012.05.10 ~ 2012.09.19	2017.05.10 ~ 2022.09.19	2.50 ~ 3.13	USD	1,750,000		2,018,625
FY-13	2013.02.05 ~ 2013.11.27	2018.02.05 ~ 2018.11.27	1.88 ~ 2.88	USD	1,900,000		2,191,650
FY-13	2013.09.26 ~ 2013.10.23	2019.03.26 ~ 2019.04.23	1.50 ~ 1.63	CHF	400,000		478,036
FY-13	2013.09.25	2020.09.25	5.75	AUD	325,000		287,352
FY-13	2013.02.20 ~ 2013.07.25	2018.02.20 ~ 2018.07.25	3M Libor + 0.84 ~ 1.50	USD	500,000		576,750
FY-14	2014.02.11 ~ 2014.12.02	2019.02.11 ~ 2029.07.30	2.38 ~ 3.57	USD	1,500,000		1,730,250
FY-14	2014.01.28 ~ 2014.07.31	2017.01.28 ~ 2017.07.31	3M Libor + 0.55 ~ 1.05	USD	500,000		576,750
FY-15	2015.06.15	2025.06.15	3.25	USD	300,000		346,050
FY-16	2016.01.21	2021.07.21	2.50	USD	300,000		346,050

							11,179,960

Less : Discount on foreign debt securities							(63,815	)
Add : Premium on debt securities							208
Less : Current portion of foreign debt securities							(980,557	)
Add : Current portion of discount on foreign debt securities							1,013


						W	10,136,809

114

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(6)

Foreign debt securities as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won and thousands of foreign currencies
December 31, 2015
Type	Issue date	Maturity	Interest rate (%)	Foreign currency		Local currency

FY-96	1996.04.01 ~ 1996.12.06	2026.12.06 ~ 2096.04.01	6.00 ~ 8.37	USD	249,136	W	291,990
FY-97	1997.01.31 ~ 1997.08.04	2027.02.01 ~ 2027.08.01	6.75 ~ 7.00	USD	314,717		368,848
FY-04	2004.04.23	2034.04.23	5.13	USD	286,920		336,270
FY-06	2006.03.14 ~ 2006.09.29	2016.03.14 ~ 2016.09.29	5.50 ~ 6.00	USD	650,000		761,800
FY-08	2008.11.27	2018.11.27	4.19	JPY	20,000,000		194,401
FY-11	2011.07.13 ~ 2011.07.29	2017.01.30 ~ 2021.07.13	3.63 ~ 4.75	USD	800,000		937,600
FY-12	2012.05.10 ~ 2012.09.19	2017.05.10 ~ 2022.09.19	2.50 ~ 3.13	USD	1,750,000		2,051,000
FY-13	2013.02.05 ~ 2013.11.27	2018.02.05 ~ 2018.11.27	1.88 ~ 2.88	USD	1,900,000		2,226,800
FY-13	2013.09.26 ~ 2013.10.23	2019.03.26 ~ 2019.04.23	1.50 ~ 1.63	CHF	400,000		474,156
FY-13	2013.09.25	2020.09.25	5.75	AUD	325,000		277,258
FY-13	2013.02.20 ~ 2013.07.25	2018.02.20 ~ 2018.07.25	3M Libor + 0.84 ~ 1.50	USD	500,000		586,000
FY-14	2014.02.11 ~ 2014.12.02	2019.02.11 ~ 2029.07.30	2.38 ~ 3.57	USD	1,500,000		1,758,000
FY-14	2014.01.28 ~ 2014.07.31	2017.01.28 ~ 2017.07.31	3M Libor + 0.55 ~ 1.05	USD	500,000		586,000
FY-15	2015.06.15	2025.06.15	3.25	USD	300,000		351,600

							11,201,723

Less : Discount on foreign debt securities							(64,515	)
Add : Premium on debt securities							223
Less : Current portion of foreign debt securities							(974,602	)
Add : Current portion of discount on foreign debt securities							489


						W	10,163,318

115

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

24.

Finance Lease Liabilities

(1)

Lease contracts

The Company enters into a power purchase agreements (“PPA”) with GS EPS and three other providers. The Company recognizes these PPAs as finance leases; under the PPAs, there is no transfer of ownership or bargain purchase option of the plants at the end of the agreement, however, the present value of the future minimum power purchase payments equals substantially all of the plants’ respective fair values over a twenty-year period which makes up the major part of the respective plants’ economic life.

(2)

Finance lease liabilities as of March 31, 2016 and December 31, 2015 are as follows and are included in current and non-current trade and other payables, net, in the consolidated statements of financial position:


In millions of won	March 31, 2016				December 31, 2015
	Minimum lease payments		Present value of minimum lease payments		Minimum lease payments		Present value of minimum lease payments

Less than 1 year	W	180,432		117,461		182,072		116,885
1 ~ 5 years		495,106		372,039		525,465		393,957
More than 5 years		192,804		139,843		206,323		148,552


	W	868,342		629,343		913,860		659,394

(3)

Current and non-current portion of finance lease liabilities as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016		December 31, 2015

Current finance lease liabilities	W	117,461		116,885
Non-current finance lease liabilities		511,882		542,509


	W	629,343		659,394

(4)

Lease payments recognized as an expense as a lessee for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016			March 31, 2015

Minimum lease payment	W	46,691			50,158
Contingent rent payment		(5,433	)		(4,488	)

(5)

The Company does not have any irrevocable operating lease contracts as of March 31, 2016 and December 31, 2015.

116

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

25.

Employment Benefits

(1)

Employment benefit obligations as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016		December 31, 2015

Net defined benefit obligations	W	1,730,155		1,495,782
Other long-term employee benefit obligations		7,889		7,325


	W	1,738,044		1,503,107

(2)

Principal assumptions on actuarial valuation as of March 31, 2016 and December 31, 2015 are as follows:


	March 31, 2016	December 31, 2015

Discount rate	2.07% ~ 2.57%	2.39% ~ 2.58%
Future salary and benefit levels	5.45%	5.43%
Weighted average duration	13.27 years	13.21 years

(3)

Details of expense relating to defined benefit plans for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016			March 31, 2015

Current service cost	W	85,761			76,849
Interest cost		15,862			15,125
Expected return on plan assets		(5,768	)		(5,424	)
Loss from settlement		(35	)		—


	W	95,820			86,550

Expenses as described above are recognized in those items below in the financial statements.


In millions of won	March 31, 2016		March 31, 2015

Cost of sales	W	71,212		64,263
Selling and administrative expenses		13,399		12,597
Others (Construction-in-progress and others)		11,209		9,690


	W	95,820		86,550

In addition, for the three-month periods ended March 31, 2016 and 2015, employee benefit obligations expenses of W13,962 million and W14,751 million, respectively, is recognized as cost of sales, and W2,674 million and W2,471 million, respectively, is recognized as selling and administrative expenses, and W3,338 million and W3,161 million, respectively, are recognized as construction-in-progress and others, relates to the Company’s defined contribution plans.

117

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

25.

Employment Benefits, Continued

(4)

Details of defined benefit obligations as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015

Present value of defined benefit obligation from funded plans	W	2,641,711			2,426,414
Fair value of plan assets		(911,556	)		(930,632	)

		1,730,155			1,495,782
Present value of defined benefit obligation from unfunded plans		—			—


Net liabilities incurred from defined benefit plans	W	1,730,155			1,495,782

(5)

Changes in the present value of defined benefit obligations for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015

Beginning balance	W	2,426,414			1,992,447
Current service cost		85,761			315,811
Interest cost (*)		15,862			63,808
Remeasurement component		152,585			122,825
Loss from settlement		(35	)		(641	)
Actual payments		(39,220	)		(67,291	)
Others		344			(545	)


Ending balance	W	2,641,711			2,426,414

(*)	Corporate bond (AAA rated) yield at year-end is applied to the interest cost on employee benefit obligations.

(6)

Changes in the fair value of plan assets for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015

Beginning balance	W	930,632			724,250
Expected return		5,768			22,557
Remeasurement component		(373	)		(5,924	)
Contributions by the employers		176			214,449
Actual payments		(24,647	)		(24,191	)
Others		—			(509	)


Ending balance	W	911,556			930,632

In addition, loss on accumulated remeasurement component amounted to W92,302 million and W202,878 million has been recognized as other comprehensive loss for the three-month period ended March 31, 2016 and for the year ended December 31, 2015, respectively.

118

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

25.

Employment Benefits, Continued

(7)

Details of the fair value of plan assets as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016		December 31, 2015

Equity instruments	W	17,898		12,791
Debt instruments		229,571		243,372
Bank deposit		124,669		129,350
Others		539,418		545,119


	W	911,556		930,632

For the three-month period ended March 31, 2016 and for the year ended December 31, 2015, actual returns on plan assets amounted to W5,395 million and W16,633 million, respectively.

(8)

Remeasurement component recognized in other comprehensive income (loss) for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016		December 31, 2015

Actuarial gain from changes in financial assumptions	W	117,926		140,411
Experience adjustments		34,659		(17,586	)
Expected return		373		5,924


	W	152,958		128,749

Remeasurement component recognized as other comprehensive income or loss is recorded in retained earnings.

119

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

26.

Provisions

(1)

Provisions as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016				December 31, 2015
	Current		Non-current		Current		Non-current

Employment benefits	W	781,424		—		718,365		—
Provisions for employment benefits		781,424		—		718,365		—

Litigation		54,192		116,280		57,737		110,228
Litigation provisions		54,192		116,280		57,737		110,228

Decommissioning cost		—		12,817,272		—		12,744,873
Nuclear plants		—		9,770,208		—		9,684,286
Spent fuel		—		1,375,185		—		1,375,185
Waste		—		1,493,819		—		1,502,140
PCBs		—		177,189		—		182,400
Other recovery provisions		—		871		—		862

Others		1,087,287		13,822		803,074		9,653
Power plant regional support program		182,499		—		129,655		—
Transmission regional support program		408,450		—		228,785		—
Provisions for tax		49		136		—		136
Provisions for financial guarantee		1,495		4,641		1,839		2,449
Provisions for RPS		387,270		—		363,178		—
Provisions for greenhouse gas emissions obligations		106,744		—		78,829		—
Others		780		9,045		788		7,068


	W	1,922,903		12,947,374		1,579,176		12,864,754

(2)

Changes in provisions for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Beginning balance		Accretion expenses		Payment			Reversal			Other			Ending balance

Employment benefits	W	718,365		215,293		(152,234	)		—			—			781,424
Provisions for employment benefits		718,365		215,293		(152,234	)		—			—			781,424

Litigation		167,965		12,880		(5,571	)		(4,802	)		—			170,472
Litigation provisions		167,965		12,880		(5,571	)		(4,802	)		—			170,472

Decommissioning cost		12,744,873		194,054		(121,655	)		—			—			12,817,272
Nuclear plants		9,684,286		85,963		(41	)		—			—			9,770,208
Spent fuel		1,375,185		101,273		(101,273	)		—			—			1,375,185
Waste		1,502,140		5,345		(13,666	)		—			—			1,493,819
PCBs		182,400		1,464		(6,675	)		—			—			177,189
Other recovery provisions		862		9		—			—			—			871

Others		812,727		403,413		(123,584	)		(9,444	)		17,997			1,101,109
Power plant regional support program		129,655		44,874		(5,890	)		—			13,860			182,499
Transmission regional support program		228,785		213,730		(34,065	)		—			—			408,450
Provisions for tax		136		49		—			—			—			185
Provisions for financial guarantee		4,288		2,782		—			(868	)		(66	)		6,136
Provisions for RPS		363,178		108,498		(83,304	)		(5,376	)		4,274			387,270
Provisions for greenhouse gas emissions obligations		78,829		31,112		—			(3,197	)		—			106,744
Others		7,856		2,368		(325	)		(3	)		(71	)		9,825


	W	14,443,930		825,640		(403,044	)		(14,246	)		17,997			14,870,277

120

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

26.

Provisions, Continued

(2)

Changes in provisions for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows, continued:


In millions of won	December 31, 2015
	Beginning balance		Accretion expenses		Payment			Reversal			Other		Ending balance

Employment benefits	W	707,310		727,079		(715,850	)		(174	)		—		718,365
Provisions for employment benefits		707,310		727,079		(715,850	)		(174	)		—		718,365

Litigation		200,289		111,301		(85,819	)		(58,306	)		500		167,965
Litigation provisions		200,289		111,301		(85,819	)		(58,306	)		500		167,965

Decommissioning cost		13,434,606		1,287,095		(680,552	)		(1,296,580	)		304		12,744,873
Nuclear plants		10,331,270		650,218		(622	)		(1,296,580	)		—		9,684,286
Spent fuel		1,298,749		568,190		(491,754	)		—			—		1,375,185
Waste		1,604,241		58,294		(160,699	)		—			304		1,502,140
PCBs		199,518		10,359		(27,477	)		—			—		182,400
Other recovery provisions		828		34		—			—			—		862

Others		460,991		774,760		(368,172	)		(64,494	)		9,642		812,727
Power plant regional support program		120,093		37,569		(37,648	)		—			9,641		129,655
Transmission regional support program		—		393,460		(164,675	)		—			—		228,785
Provisions for tax		649		—		—			(513	)		—		136
Provisions for financial guarantee		3,695		3,528		—			(2,936	)		1		4,288
Provisions for RPS		329,562		259,964		(165,259	)		(61,089	)		—		363,178
Provisions for greenhouse gas emissions obligations		—		78,829		—			—			—		78,829
Others		6,992		1,410		(590	)		44			—		7,856


	W	14,803,196		2,900,235		(1,850,393	)		(1,419,554	)		10,446		14,443,930

27.

Government Grants

(1)

Government grants as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015

Land	W	(3,194	)		(3,147	)
Buildings		(62,952	)		(63,932	)
Structures		(194,630	)		(193,119	)
Machinery		(111,172	)		(108,935	)
Vehicles		(27	)		(29	)
Equipment		(940	)		(1,026	)
Tools		(636	)		(691	)
Construction-in-progress		(139,027	)		(139,898	)
Investment properties		(17	)		(13	)
Software		(672	)		(699	)
Development expenditures		(6,376	)		(6,835	)
Intangible assets under development		(10,623	)		(10,483	)
Usage rights of donated assets and other		(29	)		(32	)
Others		(1	)		(1	)


	W	(530,296	)		(528,840	)

121

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

27.

Government Grants, Continued

(2)

Changes in government grants for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Beginning balance			Receipt			Acquisition		Offset the items of depreciation expense and others		Disposal		Others			Ending balance

Cash	W	—			(9,559	)		—		—		—		9,559			—
Land		(3,147	)		—			—		—		—		(47	)		(3,194	)
Buildings		(63,932	)		—			—		1,279		—		(299	)		(62,952	)
Structures		(193,119	)		—			—		2,331		728		(4,570	)		(194,630	)
Machinery		(108,935	)		—			—		2,887		502		(5,626	)		(111,172	)
Vehicles		(29	)		—			—		2		—		—			(27	)
Equipment		(1,026	)		—			—		136		—		(50	)		(940	)
Tools		(691	)		—			—		72		—		(17	)		(636	)
Construction-in-progress		(139,898	)		—			10,215		—		—		(9,344	)		(139,027	)
Investment properties		(13	)		—			—		—		—		(4	)		(17	)
Software		(699	)		—			—		61		—		(34	)		(672	)
Development expenditures		(6,835	)		—			—		759		—		(300	)		(6,376	)
Intangible assets under development		(10,483	)		—			—		—		—		(140	)		(10,623	)
Usage rights of donated assets and other		(32	)		—			—		3		—		—			(29	)
Others		(1	)		—			—		—		—		—			(1	)


	W	(528,840	)		(9,559	)		10,215		7,530		1,230		(10,872	)		(530,296	)


In millions of won	December 31, 2015
	Beginning balance			Receipt			Acquisition		Offset the items of depreciation expense and others		Disposal		Others			Ending balance

Cash	W	—			(52,696	)		—		—		—		52,696			—
Land		(3,103	)		—			—		—		—		(44	)		(3,147	)
Buildings		(67,700	)		—			—		5,064		—		(1,296	)		(63,932	)
Structures		(196,871	)		—			—		9,178		1,816		(7,242	)		(193,119	)
Machinery		(108,750	)		—			—		11,133		1,101		(12,419	)		(108,935	)
Vehicles		(76	)		—			—		47		1		(1	)		(29	)
Equipment		(1,002	)		—			—		469		—		(493	)		(1,026	)
Tools		(862	)		—			—		268		—		(97	)		(691	)
Construction-in-progress		(123,938	)		—			11,279		—		—		(27,239	)		(139,898	)
Investment properties		(10	)		—			—		—		—		(3	)		(13	)
Software		(488	)		—			—		177		—		(388	)		(699	)
Development expenditures		(8,183	)		—			—		2,937		—		(1,589	)		(6,835	)
Intangible assets under development		(10,692	)		—			2,093		—		—		(1,884	)		(10,483	)
Usage rights of donated assets and other		(43	)		—			—		11		—		—			(32	)
Others		(1	)		—			—		—		—		—			(1	)


	W	(521,719	)		(52,696	)		13,372		29,284		2,918		1			(528,840	)

122

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

28.

Deferred Revenues

Deferred revenue related to the Company’s construction contracts as of March 31, 2016 and December 31, 2015 are as follows and included in current and non-current non-financial liabilities in the consolidated statements of financial position:


In millions of won	March 31, 2016			December 31, 2015

Beginning balance	W	7,165,297			6,850,016
Increase during the current year / period		172,371			691,276
Recognized as revenue during the current year / period		(97,918	)		(375,995	)


Ending balance	W	7,239,750			7,165,297

29.

Non-financial Liabilities

Non-financial liabilities as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016				December 31, 2015
	Current		Non-current		Current		Non-current

Advance received	W	5,174,626		214,050		5,017,735		215,096
Unearned revenue		30,146		58,300		21,810		63,850
Deferred revenue		377,928		6,861,822		372,157		6,793,140
Withholdings		266,936		6,731		146,258		6,731
Others		1,012,171		13,673		762,751		13,435


	W	6,861,807		7,154,576		6,320,711		7,092,252

123

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

30.

Contributed Capital

(1)

Details of shares issued as of March 31, 2016 and December 31, 2015 are as follows:

In millions of won except share information

March 31, 2016

Shares
authorized

Shares issued

Par value
per share

Owned by
government(*)

Owned by
others

Total

Common shares

1,200,000,000

641,964,077

5,000

1,640,385

1,569,435

3,209,820

(*)	Korea Development Bank’s ownership of W1,056,176 million is included.

In millions of won except share information

December 31, 2015

Shares
authorized

Shares issued

Par value
per share

Owned by
government(*)

Owned by
others

Total

Common shares

1,200,000,000

641,964,077

5,000

1,640,385

1,569,435

3,209,820

(*)	Korea Development Bank’s ownership of W1,056,176 million is included.

(2)

Details in number of outstanding capital stock for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


Number of shares	March 31, 2016		December 31, 2015

Beginning balance		641,964,077		641,964,077


Ending balance		641,964,077		641,964,077

(3)

Details of share premium as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016		December 31, 2015

Share premium	W	843,758		843,758

124

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

31.

Retained Earnings and Dividends Paid

(1)

Details of retained earnings as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016		December 31, 2015

Legal reserve (*)	W	1,604,910		1,604,910
Voluntary reserves		31,847,274		23,720,167
Retained earnings before appropriations		14,785,312		22,862,164


Retained earnings	W	48,237,496		48,187,241

(*)

The KEPCO Act requires KEPCO to appropriate a legal reserve equal to at least 20 percent of net income for each accounting period until the reserve equals 50 percent of KEPCO’s common stock. The legal reserve is not available for cash dividends; however, this reserve may be credited to paid-in capital or offset against accumulated deficit by the resolution of the shareholders.

(2)

Details of voluntary reserves as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016		December 31, 2015

Reserve for investment on social overhead capital	W	330,000		5,277,449
Reserve for research and human development (*)		5,277,449		330,000
Reserve for business expansion		26,029,825		17,902,718
Reserve for equalizing dividends		210,000		210,000


	W	31,847,274		23,720,167

(*)	The reserve for research and human development is appropriated by the Company to use as qualified tax credits to reduce corporate tax liabilities. The reserve is available for cash dividends for a certain period as defined by the Tax Incentive Control Law of Korea.

(3)

Changes in retained earnings for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015

Beginning balance	W	48,187,241			35,303,647
Net profit for the period attributed to owner of the Company		2,135,450			13,289,127
Changes in equity method retained earnings		(176	)		(280	)
Remeasurement of defined benefit liability, net of tax		(94,930	)		(84,271	)
Dividend paid		(1,990,089	)		(320,982	)


Ending balance	W	48,237,496			48,187,241

(4)

Dividends paid for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:

In millions of won

March 31, 2016

Number of
shares issued

Number of
treasury stocks

Number of
shares eligible for
dividends

Dividends paid
per share
(In won)

Dividends
paid

Common shares

641,964,077

—

641,964,077

3,100

1,990,089

In millions of won

December 31, 2015

Number of
shares issued

Number of
treasury stocks

Number of
shares eligible for
dividends

Dividends paid
per share
(In won)

Dividends
paid

Common shares

641,964,077

—

641,964,077

500

320,982

125

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

31.

Retained Earnings and Dividends Paid, Continued

(5)

Changes in retained earnings of investments in associates and joint ventures for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015

Beginning balance	W	(2,411	)		(2,131	)
Changes		(176	)		(280	)


Ending balance	W	(2,587	)		(2,411	)

(6)

Changes in remeasurement components related to defined benefit liability for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015

Beginning balance	W	(202,878	)		(116,705	)
Changes		(147,628	)		(127,184	)
Income tax effect		52,698			42,913
Transfer to reserve for business expansion		49,211			(1,902	)


Ending balance	W	(248,597	)		(202,878	)

32.

Hybrid Bonds

Bond-type hybrid securities classified as equity (non-controlling interest) as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won
Issuer	Hybrid bond	Issued date		Maturity		Yield (%)	Amount

Korea Western Power Co., Ltd.	1st bond-type hybrid bond		2012.10.18		2042.10.18	5yr government bond rate + 1.20	W	100,000
Korea South-East Power Co., Ltd.	1st bond-type hybrid bond		2012.12.07		2042.12.06	4.38		170,000
Korea South-East Power Co., Ltd.	2nd bond-type hybrid bond		2012.12.07		2042.12.06	4.44		230,000
Expense of Issuance								(1,340	)


							W	498,660

Although these instruments have contractual maturity dates, the contractual agreements allow these subsidiaries to indefinitely extend the maturity dates and defer the payment of interest without modification to the other terms of the instruments. When the Company decides to not pay dividends on ordinary shares, they are not required to pay interest on the hybrid bonds.

Substantially, as these instruments have no contractual obligation to pay principal and interest, these instruments have been classified as equity (non-controlling interest) in the Company’s consolidated financial statements.

126

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

33.

Other Components of Equity

(1)

Other components of equity as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015

Other capital surpluses	W	1,197,347			1,197,388
Accumulated other comprehensive loss		(71,023	)		(98,713	)
Other equity		13,294,973			13,294,973


	W	14,421,297			14,393,648

(2)

Changes in other capital surpluses for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016								December 31, 2015
	Gain on disposal of treasury stocks		Others			Subtotal			Gain on disposal of treasury stocks		Others			Subtotal

Beginning balance	W	387,524		809,864			1,197,388			387,524		763,878			1,151,402
Disposal of subsidiary		—		—			—			—		58,310			58,310
Change in consolidation scope		—		—			—			—		(716	)		(716	)
Issuance of share capital of subsidiary		—		(41	)		(41	)		—		2,536			2,536
Income tax effect		—		—			—			—		(14,144	)		(14,144	)


Ending balance	W	387,524		809,823			1,197,347			387,524		809,864			1,197,388

127

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

33.

Other Components of Equity, Continued

(3)

Changes in accumulated other comprehensive loss for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Available-for-sale financial asset valuation reserve			Shares in other comprehensive income of investments in associates and joint ventures		Reserve for overseas operations translation credit			Reserve for loss on valuation of derivatives			Total

Beginning balance	W	(24,905	)		276,373		(254,462	)		(95,719	)		(98,713	)
Changes in the unrealized fair value of available-for-sale financial assets, net of tax		27,172			—		—			—			27,172
Shares in other comprehensive income of associates and joint ventures, net of tax		—			4,585		—			—			4,585
Foreign currency translation of foreign operations, net of tax		—			—		8,729			—			8,729
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		—			—		—			(12,796	)		(12,796	)


Ending balance	W	2,267			280,958		(245,733	)		(108,515	)		(71,023	)


In millions of won	December 31, 2015
	Available-for-sale financial asset valuation reserve			Shares in other comprehensive income of investments in associates and joint ventures		Reserve for overseas operations translation credit			Reserve for gain (loss) on valuation of derivatives			Total

Beginning balance	W	(34,649	)		186,897		(255,641	)		(98,876	)		(202,269	)
Changes in the unrealized fair value of available-for-sale financial assets, net of tax		9,744			—		—			—			9,744
Shares in other comprehensive income of associates and joint ventures, net of tax		—			89,476		—			—			89,476
Foreign currency translation of foreign operations, net of tax		—			—		1,179			—			1,179
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		—			—		—			3,157			3,157


Ending balance	W	(24,905	)		276,373		(254,462	)		(95,719	)		(98,713	)

(4)

Details of other equity for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015

Statutory revaluation reserve	W	13,295,098			13,295,098
Changes in other equity		(125	)		(125	)


	W	13,294,973			13,294,973

128

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

34.

Sales

Details of sales for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016				March 31, 2015
	Domestic		Overseas		Domestic		Overseas

Sales of goods	W	14,416,220		85,714		14,130,121		102,863
Electricity		14,182,195		—		13,864,063		—
Heat supply		112,964		—		128,560		—
Others		121,061		85,714		137,498		102,863
Sales of service		40,788		62,842		44,938		49,850
Sales of construction services		26,337		955,508		40,983		663,526
Revenue related to transfer of assets from customers		97,918		—		91,578		—


	W	14,581,263		1,104,064		14,307,620		816,239

35.

Selling and Administrative Expenses

(1)

Selling and administrative expenses for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016		March 31, 2015

Salaries	W	168,307		160,612
Retirement benefit expense		16,073		15,068
Welfare and benefit expense		23,677		23,035
Insurance expense		2,980		2,663
Depreciation		36,527		23,786
Amortization of intangible assets		8,983		11,608
Bad debt expense (reversal of allowance for bad debt)		5,038		(11,578	)
Commission		135,487		134,843
Advertising expense		6,669		5,580
Training expense		896		1,110
Vehicle maintenance expense		2,119		2,354
Publishing expense		769		550
Business promotion expense		889		756
Rent expense		8,572		10,132
Telecommunication expense		6,599		6,026
Transportation expense		125		141
Taxes and dues		3,856		2,587
Expendable supplies expense		1,274		2,011
Water, light and heating expense		3,049		3,449
Repairs and maintenance expense		7,961		4,903
Ordinary development expense		35,170		33,541
Travel expense		4,348		4,006
Clothing expense		240		57
Survey and analysis expense		156		143
Membership fee		599		423
Others		28,494		24,018


	W	508,857		461,824

129

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

36.

Other Non-operating Income and Expense

(1)

Other non-operating income for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016		March 31, 2015

Reversal of other provisions	W	4,537		1,658
Reversal of other allowance for doubtful accounts		987		—
Government grants		36		10
Gains on assets contributed		1,328		2,212
Gains on liabilities exempted		3		2,337
Compensation and reparations revenue		24,130		52,537
Gains on electricity infrastructure development fund		—		143
Revenue from research contracts		834		3,137
Rental income		54,184		48,258
Others		6,263		7,073


	W	92,302		117,365

(2)

Other non-operating expense for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016		March 31, 2015

Accretion expenses of other provisions	W	49		44
Depreciation expenses on investment properties		198		162
Depreciation expenses on idle assets		1,670		1,666
Other bad debt expense		3,945		7,833
Donations		11,661		12,420
Others		3,179		1,012


	W	20,702		23,137

37.

Other Gains (Losses)

Composition of other gains (losses) for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016			March 31, 2015

Other gains
Gains on disposal of property plant, and equipment	W	18,598			17,915
Gains on foreign currency translation		8,791			3,933
Gains on foreign currency transaction		11,216			8,799
Others		49,412			51,727

Other losses
Losses on disposal of property plant and equipment		(4,260	)		(12,355	)
Losses on disposal of intangible assets		(134	)		(5	)
Losses on foreign currency translation		(8,115	)		(9,278	)
Losses on foreign currency transaction		(19,935	)		(11,768	)
Others		(15,670	)		(23,074	)


	W	39,903			25,894

130

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

38.

Finance Income

(1)

Finance income for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016		March 31, 2015

Interest income	W	80,319		49,493
Dividends income		9,367		5,456
Gains on disposal of financial assets		1,480		—
Gains on valuation of derivatives		28,864		93,401
Gains on transaction of derivatives		13,955		6,960
Gains on foreign currency translation		213,346		24,788
Gains on foreign currency transaction		5,090		7,087
Other finance income		1		22


	W	352,422		187,207

(2)

Interest income included in finance income for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016		March 31, 2015

Cash and cash equivalents	W	20,683		11,890
Available-for-sale financial assets		—		29
Held-to-maturity investments		25		25
Loans and receivables		6,938		6,775
Short-term financial instrument		19,051		2,864
Long-term financial instrument		2,561		2,929
Trade and other receivables		31,061		24,981


	W	80,319		49,493

131

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

39.

Finance Expenses

(1)

Finance expenses for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016		March 31, 2015

Interest expense	W	458,235		552,656
Losses on sale of financial assets		—		975
Impairment of available-for-sale financial assets		—		5,821
Losses on valuation of derivatives		156,281		28,638
Losses on transaction of derivatives		10,854		9,414
Losses on foreign currency translation		66,543		81,183
Losses on foreign currency transaction		27,613		2,714
Other		109		23


	W	719,635		681,424

(2)

Interest expense included in finance expenses for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016			March 31, 2015

Trade and other payables	W	16,403			20,909
Short-term borrowings		1,480			3,289
Long-term borrowings		22,570			32,453
Debt securities		499,298			555,052
Other financial liabilities		120,823			152,543

		660,574			764,246


Less: Capitalized borrowing costs		(202,339	)		(211,590	)


	W	458,235			552,656

Capitalization rates for the three-month periods ended March 31, 2016 and 2015 are 2.25% ~ 4.00% and 3.02% ~ 4.20%, respectively.

132

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

40.

Income Taxes

(1)

Income tax expense for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016			March 31, 2015
Current income tax expense
Payment of income tax	W	1,063,284			576,206
Adjustment due to changes in estimates related to prior years		40,548			(67,534	)
Current income tax directly recognized in equity		57,630			30,341

		1,161,462			539,013

Deferred income tax expense
Generation and realization of temporary differences		190,085			201,789
Changes of unrecognized tax losses, tax credit and temporary differences for prior periods		(8,082	)		65,956
Changes in deferred tax on tax losses carryforwards		—			21,468
Tax credit carry forwards		2,260			6,987

		184,263			296,200


Income tax expense	W	1,345,725			835,213

(2)

Reconciliation between actual income tax expense and amount computed by applying the statutory tax rate of 24.2% to income before income taxes for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016			March 31, 2015

Income before income tax	W	3,508,558			2,058,320

Income tax expense computed at applicable tax rate of 24.2%		849,071			498,113

Adjustments
Additional payment of income taxes or receipt of income tax refunds		(545	)		(4,719	)
Effect of applying gradual tax rate		(2,538	)		(932	)
Effect of non-taxable income		(4,614	)		(1,790	)
Effect of non-deductible expenses		9,337			1,028
Effects of tax credits and deduction		(18,290	)		(13,415	)
Recognition (reversal) of unrecognized deferred tax asset, net		(8,082	)		52,021
Deferred income tax related to investments in subsidiaries and associates		486,209			334,410
Others, net		(5,916	)		(29,503	)

		455,561			337,100
Adjustment in respect of prior years		41,093			—


Income tax expense	W	1,345,725			835,213


Effective tax rate		38.4	%		40.6	%

(3)

Income tax directly adjusted to shareholders’ equity (except for accumulated other comprehensive loss) for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016		March 31, 2015

Dividends of hybrid securities	W	1,313		1,311


	W	1,313		1,311

133

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

40.

Income Taxes, Continued

(4)

Income tax recognized as other comprehensive income (loss) for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016			March 31, 2015

Income tax recognized as other comprehensive income (loss)
Gain (loss) on valuation of available-for-sale financial assets	W	(8,938	)		1,791
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		9,468			(14,749	)
Remeasurements of defined benefit obligations		52,698			42,062
Investments in associates		1,767			562
Others		1,322			(636	)


	W	56,317			29,030

(5)

Changes in deferred income tax assets (liabilities) recognized in the statements of financial position for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:


In millions of won	March 31, 2016
	Beginning balance			Amounts recognized in profit or loss			Amount recognized in other comprehensive income (loss)			Amounts recognized directly in equity		Ending balance
Deferred income tax on temporary differences
Employee benefits	W	407,342			16,906			52,698			—		476,946
Cash flow hedge		(29,013	)		31,050			9,468			—		11,505
Investments in associates or subsidiaries		(6,449,998	)		(436,296	)		1,767			—		(6,884,527	)
Property, plant and equipment		(5,495,786	)		25,777			—			—		(5,470,009	)
Finance lease		(272,430	)		(3,002	)		—			—		(275,432	)
Intangible assets		9,420			47			—			—		9,467
Financial assets at fair value through profit or loss		(4	)		1,030			—			—		1,026
Available-for-sale financial assets		(49,199	)		3,504			(8,938	)		—		(54,633	)
Deferred revenue		215,361			(2,921	)		—			—		212,440
Provisions		3,372,423			74,201			—			—		3,446,624
Doubtful receivables		1,405			1,291			—			—		2,696
Other finance liabilities		26,298			244			—			1,068		27,610
Losses (gains) on foreign exchange translation		128,714			(15,935	)		—			—		112,779
Allowance for doubtful accounts		18,976			(3,727	)		—			—		15,249
Accrued income		(11,231	)		1,041			—			—		(10,190	)
Special deduction for property, plant and equipment		(194,347	)		(85	)		—			—		(194,432	)
Reserve for research and human development		(20,688	)		884			—			—		(19,804	)
Others		576,585			66,355			1,322			245		644,507

		(7,766,172	)		(239,636	)		56,317			1,313		(7,948,178	)

Deferred income tax on unused tax losses and tax credit
Tax losses		(3	)		3			—			—		—
Tax credit		27,115			(2,260	)		—			—		24,855

		27,112			(2,257	)		—			—		24,855


	W	(7,739,060)			(241,893	)		56,317			1,313		(7,923,323	)

134

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

40.

Income Taxes, Continued

(5)


In millions of won	December 31, 2015
	Beginning balance			Amounts recognized in profit or loss			Amount recognized in other comprehensive income (loss)			Amounts recognized directly in equity			Ending balance
Deferred income tax on temporary differences
Employee benefits	W	352,934			11,495			42,913			—			407,342
Cash flow hedge		51,354			(87,620	)		7,253			—			(29,013	)
Investments in associates or subsidiaries		(5,769,627	)		(669,035	)		2,808			(14,144	)		(6,449,998	)
Property, plant and equipment		(5,979,863	)		484,077			—			—			(5,495,786	)
Finance lease		(197,097	)		(75,333	)		—			—			(272,430	)
Intangible assets		12,309			(2,889	)		—			—			9,420
Financial assets at fair value through profit or loss		2,840			(2,844	)		—			—			(4	)
Available-for-sale financial assets		(41,836	)		(1,048	)		(6,315	)		—			(49,199	)
Deferred revenue		230,644			(15,283	)		—			—			215,361
Provisions		3,459,775			(87,352	)		—			—			3,372,423
Doubtful receivables		1,356			49			—			—			1,405
Other finance liabilities		23,237			(2,192	)		—			5,253			26,298
Losses on foreign exchange translation		53,794			74,920			—			—			128,714
Allowance for doubtful accounts		15,452			3,524			—			—			18,976
Accrued income		(3,245	)		(7,986	)		—			—			(11,231	)
Special deduction for property, plant and equipment		(194,674	)		327			—			—			(194,347	)
Impairment of non-current assets		86,720			(86,720	)		—			—			—
Reserve for research and human development		(35,499	)		14,811			—			—			(20,688	)
Others		460,019			116,566			—			—			576,585

		(7,471,407	)		(332,533	)		46,659			(8,891	)		(7,766,172	)

Deferred income tax on unused tax losses and tax credit
Tax losses		2,176,175			(2,176,178	)		—			—			(3	)
Tax credit		98,286			(71,171	)		—			—			27,115

		2,274,461			(2,247,349	)		—			—			27,112


	W	(5,196,946)			(2,579,882	)		46,659			(8,891	)		(7,739,060	)

(6)

Deferred income tax assets (liabilities) recognized in the statements of financial position as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015

Deferred income tax assets	W	701,713			623,623
Deferred income tax liabilities		(8,625,036	)		(8,362,683	)


	W	(7,923,323	)		(7,739,060	)

135

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

40.

Income Taxes, Continued

(7)

Details of deductible temporary differences, tax losses and unused tax credits not recognized in the deferred income tax assets as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016		December 31, 2015

Deductible temporary differences	W	426,640		441,704


	W	426,640		441,704

41.

Assets Held-for-Sale

Assets held-for-sale as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016		December 31, 2015

Land (*1)	W	2,907		2,907
Building (*1)		20,366		20,366
Investments in associates (*2,3)		56,374		56,374


	W	79,647		79,647

(*1)

The board of directors of KEPCO Engineering & Construction Company, Inc., a subsidiary of the Company, determined to dispose the office building in Yongin as part of the government’s plan to relocate state-run companies for balanced national development and moved the head office to Kimchun, Kyungsangbukdo, in 2015. As the Company believes the book value of Yongin office will be recovered by a disposal transaction rather than continuous operation, it reclassified buildings, land and structures as assets held-for-sale.

(*2)	Korea Western Power Co., Ltd., a subsidiary of the Company, plans to dispose certain portion of its investment in Dongducheon Dream Power Co., Ltd. and reclassified the relevant book value to non-current assets held-for-sale.

(*3)	Korea South-East Power Co., Ltd., a subsidiary of the Company, plans to dispose certain portion of its investment in Hyundai Energy Co., Ltd. and reclassified the relevant book value to non-current assets held-for-sale.

136

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

42.

Expenses Classified by Nature

Expenses classified by nature for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016
	Selling and administrative expenses		Cost of sales		Total

Raw materials used	W	—		3,422,209		3,422,209
Salaries		168,307		741,259		909,566
Retirement benefit expense		16,073		85,174		101,247
Welfare and benefit expense		23,677		82,301		105,978
Insurance expense		2,980		22,087		25,067
Depreciation		36,527		2,103,847		2,140,374
Amortization of intangible assets		8,983		11,113		20,096
Bad debt expense		5,038		—		5,038
Commission		135,487		100,069		235,556
Advertising expense		6,669		1,589		8,258
Training expense		896		2,259		3,155
Vehicle maintenance expense		2,119		1,597		3,716
Publishing expense		769		814		1,583
Business promotion expense		889		1,179		2,068
Rent expense		8,572		29,496		38,068
Telecommunication expense		6,599		20,219		26,818
Transportation expense		125		1,090		1,215
Taxes and dues		3,856		89,565		93,421
Expendable supplies expense		1,274		6,530		7,804
Water, light and heating expense		3,049		8,027		11,076
Repairs and maintenance expense		7,961		353,926		361,887
Ordinary development expense		35,170		89,614		124,784
Travel expense		4,348		15,630		19,978
Clothing expense		240		171		411
Survey and analysis expense		156		691		847
Membership fee		599		2,096		2,695
Power purchase		—		3,098,695		3,098,695
Others		28,494		1,279,876		1,308,370


	W	508,857		11,571,123		12,079,980

137

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

42.

Expenses Classified by Nature, Continued

Expenses classified by nature for the three-month periods ended March 31, 2016 and 2015 are as follows, continued:


In millions of won	March 31, 2015
	Selling and administrative expenses			Cost of sales		Total

Raw materials used	W	—			4,518,272		4,518,272
Salaries		160,612			702,753		863,365
Retirement benefit expense		15,068			79,014		94,082
Welfare and benefit expense		23,035			80,096		103,131
Insurance expense		2,663			21,230		23,893
Depreciation		23,786			1,975,461		1,999,247
Amortization of intangible assets		11,608			8,257		19,865
Bad debt expense (reversal of allowance for bad debt)		(11,578	)		—		(11,578	)
Commission		134,843			84,381		219,224
Advertising expense		5,580			1,259		6,839
Training expense		1,110			1,693		2,803
Vehicle maintenance expense		2,354			2,051		4,405
Publishing expense		550			906		1,456
Business promotion expense		756			997		1,753
Rent expense		10,132			31,368		41,500
Telecommunication expense		6,026			18,053		24,079
Transportation expense		141			1,009		1,150
Taxes and dues		2,587			74,252		76,839
Expendable supplies expense		2,011			5,374		7,385
Water, light and heating expense		3,449			8,651		12,100
Repairs and maintenance expense		4,903			325,212		330,115
Ordinary development expense		33,541			76,979		110,520
Travel expense		4,006			11,954		15,960
Clothing expense		57			184		241
Survey and analysis expense		143			518		661
Membership fee		423			2,071		2,494
Power purchase		—			3,659,867		3,659,867
Others		24,018			730,307		754,325


	W	461,824			12,422,169		12,883,993

138

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

43.

Earnings Per Share

(1)

Basic earnings per share for the three-month periods ended March 31, 2016 and 2015 are as follows:


In won
Type	March 31, 2016		March 31, 2015

Basic earnings per share	W	3,326		1,869

(2)

Basic earnings per share

Net profit for the period and weighted average number of common shares used in the calculation of basic earnings per share for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won except number of shares
Type	March 31, 2016		March 31, 2015

Controlling interest in net income	W	2,135,450		1,200,083
Income used in the calculation of total basic earnings per share		2,135,450		1,200,083
Weighted average number of common shares		641,964,077		641,964,077

(3)

Weighted average common shares used in calculating basic earnings per share. Detailed information of the adjustment for the three-month periods ended March 31, 2016 and 2015 are as follows:


In number of shares
Type	March 31, 2016		March 31, 2015

Weighted average number of common shares		641,964,077		641,964,077
Diluted weighted average number of shares		641,964,077		641,964,077

(4)

There are no potential dilutive instruments and diluted earnings per shares are same as basic earnings per share for the three-month periods ended March 31, 2016 and 2015.

139

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

44.

Risk Management

(1)

Capital risk management

The Company manages its capital to ensure that entities in the Company will be able to continue while maximizing the return to shareholder through the optimization of the debt and equity balance. The capital structure of the Company consists of net debt (offset by cash and cash equivalents) and equity. The Company’s overall capital risk management strategy remains unchanged from that of the prior year.

Details of the Company’s capital management accounts as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016			December 31, 2015

Total borrowings and debt securities	W	56,951,330			58,753,499
Cash and cash equivalents		5,418,476			3,783,065

Net borrowings and debt securities		51,532,854			54,970,434

Total shareholder’s equity		67,978,161			67,942,475

Debt to equity ratio		75.81	%		80.91	%

(2)

Financial risk management

The Company is exposed to various risks related to its financial instruments, such as, market risk (currency risk, interest rate risk, price risk), credit risk. The Company monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. The Company uses derivative financial instruments to hedge certain risk exposures. The Company’s overall financial risk management strategy remains unchanged from that of the prior year.

(i)

Credit risk

Credit risk is the risk of finance loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises primarily from the sales activities, securities and derivatives. In addition, credit risk exposure may exist within financial guarantees and unused line of credits. As these financial institutions the Company makes transactions with are reputable financial institutions, the credit risk from them are considered limited. The Company decides credit transaction limits based on evaluation of client’s credit, through information obtained from the credit bureau and disclosed financial position at committing contracts.

①

Credit risk management

Electricity sales, the main operations of the Company are the necessity for daily life and industrial activities of Korean nationals, and have importance as one of the national key industries. The Company dominates the domestic market supplying electricity to customers. The Company is not exposed to credit risk as customers of the Company are from various industries and areas. The Company uses publicly available information and its own internal data related to trade receivables, to rate its major customers and to measure the credit risk that a counter party will default on a contractual obligation. For the incurred but not recognized loss, it is measured considering overdue period.

②

Impairment and allowance account

In accordance with the Company policies, individual material financial assets are assessed on a regular basis, trade receivables that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Value of the acquired collateral (including the confirmation of feasibility) and estimated collectable amounts are included in this assessment.

Allowance for bad debts assessed on a collective basis are recognized for (i) the group of assets which individually are not material and (ii) incurred but not recognized losses that are assessed using statistical methods, judgment and past experience.

140

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

44.

Risk Management, Continued

(2)

Financial risk management, continued

Book values of the financial assets represent the maximum exposed amounts of the credit risk. Details of the Company’s level of maximum exposure to credit risk as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016		December 31, 2015

Cash and cash equivalents	W	5,418,476		3,783,065
Derivative assets (trading)		206,168		255,008
Available-for-sale financial assets		626,183		584,479
Held-to-maturity investments		3,635		3,623
Loans and receivables		754,647		735,057
Long-term/short-term financial instruments		4,586,652		5,890,866
Derivative assets (using hedge accounting)		243,117		362,142
Trade and other receivables		8,587,817		9,271,967
Financial guarantee contracts (*)		294,993		271,010

(*)	Maximum exposure associated with the financial guarantee contracts is the maximum amounts of the obligation.

Financial guarantee contracts as of March 31, 2016 are as follows:


In millions of won and thousands of U.S. dollars
Type	Company	Foreign currency		Local currency

Joint ventures	KEPCO SPC Power Corporation	USD	88,138	W	101,667
Joint ventures	PT. Tanjung Power Indonesia	USD	35,000		40,372
Joint ventures	Kelar S.A	USD	132,600		152,954


		USD	255,738	W	294,993

As of the reporting date, there are no financial assets and non-financial assets that were acquired through the exercise of the right of collateralized assets and reinforcement of credit arrangement.

(ii)

Market risk

Market risk is the risk that the Company’s fair values of the financial instruments or future cash flows are affected by the changes in the market. Market risk consists of interest rate risk, currency risk and other price risk.

141

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

44.

Risk Management, Continued

(2)

Financial risk management, continued

(iii)

Sensitivity analysis

Significant assets and liabilities with uncertainties in underlying assumptions

①

Defined benefit obligation

A sensitivity analysis of defined benefit obligation assuming a 1% increase and decrease movements in the actuarial valuation assumptions as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won		March 31, 2016						December 31, 2015
Type	Accounts	1% Increase			1% Decrease			1% Increase			1% Decrease

Future salary increases	Increase (decrease) in defined benefit obligation	W	331,866			(299,152	)		293,205			(271,758	)
Discount rate	Increase (decrease) in defined benefit obligation		(296,252	)		351,064			(267,648	)		315,870

Changes of employee benefits assuming a 1% increase and decrease movements in discount rate on plan asset for the three-month periods ended March 31, 2016 and 2015 are W2,312 million and W1,809 million, respectively.

②

Provisions

Changes in provisions due to movements in underlying assumptions as of March 31, 2016 and December 31, 2015 are as follows:


Type	Accounts	March 31, 2016			December 31, 2015

PCBs	Inflation rate		2.65	%		2.65	%
	Discount rate		3.21	%		3.21	%
Nuclear plants	Inflation rate		1.40	%		1.40	%
	Discount rate		3.55	%		3.55	%
Spent fuel	Inflation rate		2.93	%		2.93	%
	Discount rate		4.49	%		4.49	%

A sensitivity analysis of provisions assuming a 0.1% increase and decrease movements in the underlying assumptions as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won		March 31, 2016						December 31, 2015
Type	Accounts	0.1% Increase			0.1% Decrease			0.1% Increase			0.1% Decrease

Discount rate	PCBs	W	(837	)		843			(875	)		881
	Nuclear plants		(200,772	)		206,121			(201,318	)		206,720
	Spent fuel		(52,390	)		54,425			(52,390	)		54,425
Inflation rate	PCBs		892			(888	)		885			(881	)
	Nuclear plants		222,653			(216,969	)		220,720			(215,086	)
	Spent fuel		55,212			(53,219	)		55,212			(53,219	)

142

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

44.

Risk Management, Continued

(2)

Financial risk management, continued

Management judgment effected by uncertainties in underlying assumptions

①

Foreign currency risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities as of March 31, 2016 and December 31, 2015 are as follows:


In thousands of foreign currencies	Assets				Liabilities
Type	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015

AUD		157		158		325,000		595,284
BWP		246		301		—		—
CAD		—		—		—		858
CNY		—		—		26,140		26,140
EUR		13,905		6,141		13,370		33,552
MXN		7,703		7,704		869		—
PHP		543,540		489,309		31,578		77,337
SAR		1,172		1,083		66		—
USD		1,144,683		1,260,094		9,333,219		9,331,854
INR		926,526		972,175		144,164		206,159
PKR		225,127		211,212		2,326		12,928
MGA		2,619,400		2,768,360		87,215		151,729
JPY		1,206,810		1,425,163		20,038,566		20,325,211
KZT		47,808		47,177		—		—
GBP		3		—		11		99
CHF		—		—		400,029		400,029
AED		3,109		1,481		919		1,705
ZAR		440		238		—		—
JOD		1,155		2,972		—		—
BDT		46,667		43,332		1,355		889
TWD		—		—		—		30
SGD		—		—		59		—

A sensitivity analysis on the Company’s income for the period assuming a 10% increase and decrease in currency exchange rates as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016					December 31, 2015
Type	10% Increase			10% Decrease		10% Increase			10% Decrease

Increase (decrease) of income before income tax		W (1,037,389	)		1,037,389		(1,063,285	)		1,063,285
Increase (decrease) of shareholder’s equity (*)		(1,037,389	)		1,037,389		(1,063,285	)		1,063,285

(*)	The effect on the shareholders’ equity excluding the impact of income taxes.

The sensitivity analysis above is conducted for monetary assets and liabilities denominated in foreign currencies other than functional currency, without consideration of hedge effect of related derivatives, as of March 31, 2016 and December 31, 2015.

To manage its foreign currency risk related to foreign currency denominated receivables and payables, the Company has a policy to enter into currency forward agreements. In addition, to manage its foreign currency risk related to foreign currency denominated expected sales transactions and purchase transactions, the Company enters into cross-currency swap agreements.

143

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

44.

Risk Management, Continued

(2)

Financial risk management, continued

②

Interest rate risk

The Company is exposed to interest rate risk due to its borrowing with floating interest rates. A 1% increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

The Company’s borrowings and debt securities with floating interest rates as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won
Type	March 31, 2016		December 31, 2015

Short-term borrowings	W	276,547		41,608
Long-term borrowings		1,649,323		1,977,745
Debt securities		2,063,500		2,082,000


	W	3,989,370		4,101,353

A sensitivity analysis on the Company’s long-term borrowings and debt securities assuming a 1% increase and decrease in interest rates, without consideration of hedge effect of related derivatives for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows


In millions of won	March 31, 2016					December 31, 2015
Type	1% Increase			1% Decrease		1% Increase			1% Decrease

Increase (decrease) of profit before income tax	W	(39,894	)		39,894		(41,014	)		41,014
Increase (decrease) of shareholder’s equity (*)		(39,894	)		39,894		(41,014	)		41,014

(*)	The effect on the shareholders’ equity excluding the impact of income taxes.

To manage its interest rate risks, the Company enters into certain interest swap agreements or maintains an appropriate mix of fixed and floating rate borrowings.

③

Electricity rates risk

The Company is exposed to electricity rates risk due to the rate regulation of the government which considers the effect of electricity rate on the national economy.

A sensitivity analysis on the Company’s income for the period assuming a 1% increase and decrease in price of electricity for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won	March 31, 2016					March 31, 2015
Type	1% Increase		1% Decrease			1% Increase		1% Decrease

Increase (decrease) of profit before income tax	W	141,822		(141,822	)		138,641		(138,641	)
Increase (decrease) of shareholder’s equity (*)		141,822		(141,822	)		138,641		(138,641	)

(*)	The effect on the shareholders’ equity excluding the impact of income taxes.

144

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

44.

Risk Management, Continued

(2)

Financial risk management, continued

(iv)

Liquidity risk

The Company has established an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by continuously monitoring forecasted and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

In addition, the Company has established credit lines on its trade financing and bank overdrafts, and through payment guarantees it has received, it maintains an adequate credit (borrowing) line. In addition, the Company has the ability to utilize excess cash or long-term borrowings for major construction investments.

The following table shows the details of maturities of non-derivative financial liabilities as of March 31, 2016 and December 31, 2015. This table, based on the undiscounted cash flows of the non-derivative financial liabilities including estimated interests, has been prepared based on the respective liabilities’ earliest maturity date.


In millions of won	March 31, 2016
Type	Less than 1 year		1~2 Years		2~5 Years		More than 5 years		Total

Borrowings and debt securities	W	10,450,280		8,972,941		21,454,384		27,763,212		68,640,817
Finance lease liabilities		180,432		175,268		319,838		192,804		868,342
Trade and other payables		6,318,733		303,889		621,469		2,241,137		9,485,228
Financial guarantee contracts (*)		194,479		61,136		39,378		—		294,993


	W	17,143,924		9,513,234		22,435,069		30,197,153		79,289,380


In millions of won	December 31, 2015
Type	Less than 1 year		1~2 Years		2~5 Years		More than 5 years		Total

Borrowings and debt securities	W	9,862,441		11,252,946		23,642,523		28,566,566		73,324,476
Finance lease liabilities		182,072		175,512		349,953		206,323		913,860
Trade and other payables		4,618,812		314,361		617,120		2,244,445		7,794,738
Financial guarantee contracts (*)		168,885		62,116		40,009		—		271,010


	W	14,832,210		11,804,935		24,649,605		31,017,334		82,304,084

(*)	Total guarantee amounts associated with the financial guarantee contracts. Financial guarantee liabilities which are recognized as of March 31, 2016 and December 31, 2015 are W6,136 million and W4,288 million, respectively.

145

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

44.

Risk Management, Continued

(2)

Financial risk management, continued

The expected maturities for non-derivative financial assets as of March 31, 2016 and December 31, 2015 in detail are as follows:


In millions of won	March 31, 2016
Type	Less than 1 year		1~5 Years		More than 5 years		*Other ()**		Total

Cash and cash equivalents	W	5,418,476		—		—		—		5,418,476
Available-for-sale financial assets		—		—		—		626,183		626,183
Held-to-maturity investments		418		3,217		—		—		3,635
Loans and receivables		108,103		360,861		320,804		13,877		803,645
Long-term/short-term financial instruments		3,682,752		150,925		752,975		—		4,586,652
Trade and other receivables		6,772,248		837,047		910,728		76,284		8,596,307


	W	15,981,997		1,352,050		1,984,507		716,344		20,034,898


In millions of won	December 31, 2015
Type	Less than 1 year		1~5 Years		More than 5 years		*Other ()**		Total

Cash and cash equivalents	W	3,783,065		—		—		—		3,783,065
Available-for-sale financial assets		—		—		—		584,479		584,479
Held-to-maturity investments		381		3,242		—		—		3,623
Loans and receivables		106,013		268,820		397,976		11,330		784,139
Long-term/short-term financial instruments		5,132,829		5,000		752,703		334		5,890,866
Trade and other receivables		7,476,745		765,979		958,968		79,202		9,280,894


	W	16,499,033		1,043,041		2,109,647		675,345		20,327,066

(*)	The maturities cannot be presently determined.

Derivative liabilities classified by maturity periods which from reporting date to maturity date of contract as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
Type	Less than 1 year			1~2 Years			2~5 Years			More than 5 years			Total

Gross settlement
- Trading	W	(16,403	)		(9,267	)		(66,581	)		(3,805	)		(96,056	)
- Hedging		(3,419	)		(10,696	)		(41,432	)		(60,889	)		(116,436	)


	W	(19,822	)		(19,963	)		(108,013	)		(64,694	)		(212,492	)


In millions of won	December 31, 2015
Type	Less than 1 year			1~2 Years			2~5 Years			More than 5 years			Total

Gross settlement
- Trading	W	(9,552	)		(4,627	)		(47,971	)		—			(62,150	)
- Hedging		1,260			2,032			(44,233	)		(62,534	)		(103,475	)


	W	(8,292	)		(2,595	)		(92,204	)		(62,534	)		(165,625	)

146

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

44.

Risk Management, Continued

(3)

Fair value risk

The fair value of the Company’s actively-traded financial instruments (i.e. short-term financial assets held for trading, available-for-sale financial assets, etc.) is based on the traded market-price as of the reporting period end. The fair value of the Company’s financial assets is the amount which the asset could be exchanged for or the amount a liability could be settled for.

The fair values of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. If there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, the Company uses that technique.

For trade receivables and payables, the Company considers the carrying value net of impairment as fair value. While for disclosure purposes, the fair value of financial liabilities is estimated by discounting a financial instruments with similar contractual cash flows based on the effective interest method.

(i)

Fair value and book value of financial assets and liabilities as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016				December 31, 2015
Type	Book value		Fair value		Book value		Fair value

Assets recognized at fair value
Available-for-sale financial assets (*1)	W	626,183		626,183		584,479		584,479
Derivative assets (trading)		206,168		206,168		255,008		255,008
Derivative assets (using hedge accounting)		243,117		243,117		362,142		362,142
Long-term financial instruments		903,900		903,900		758,037		758,037
Short-term financial instruments		3,682,752		3,682,752		5,132,829		5,132,829

		5,662,120		5,662,120		7,092,495		7,092,495

Assets carried at amortized cost
Held-to-maturity investments		3,635		3,635		3,623		3,623
Loans and receivables		754,647		754,647		735,057		735,057
Trade and other receivables		8,587,817		8,587,817		9,271,967		9,271,967
Cash and cash equivalents		5,418,476		5,418,476		3,783,065		3,783,065

		14,764,575		14,764,575		13,793,712		13,793,712

Liabilities recognized at fair value
Derivative liabilities (trading)		46,932		46,932		49,011		49,011
Derivative liabilities (using hedge accounting)		148,938		148,938		117,499		117,499

		195,870		195,870		166,510		166,510

Liabilities carried at amortized cost
Secured borrowings		644,040		644,040		641,363		641,363
Unsecured bond		54,440,129		59,286,177		55,677,213		59,619,941
Finance lease liabilities		629,343		629,343		659,394		659,394
Unsecured borrowings		1,829,077		1,849,490		2,407,690		2,427,847
Trade and other payables (*2)		9,485,228		9,485,228		7,794,738		7,794,738
Bank overdraft		38,084		38,084		27,233		27,233

	W	67,065,901		71,932,362		67,207,631		71,170,516

(*1)	Book values of equity securities held by the Company that were measured at cost as of March 31, 2016 and December 31, 2015 are W214,416 million and W207,508 million, respectively, as a quoted market price does not exist in an active market and its fair value cannot be measured reliably.

(*2)	Excludes finance lease liabilities.

147

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

44.

Risk Management, Continued

(3)

Fair value risk, continued

(ii)

Interest rates used for determining fair value

The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting date plus an adequate credit spread.

The discount rate used for calculating fair value as of March 31, 2016 and December 31, 2015 are as follows:


Type	March 31, 2016	December 31, 2015

Derivatives	0.50% ~ 4.16%	0.28% ~ 4.16%
Borrowings and debt securities	0.13% ~ 5.80%	0.15% ~ 5.80%
Finance lease	9.00% ~ 10.83%	9.00% ~ 10.83%

(iii)

Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, classified as Level 1, 2 or 3, based on the degree to which the fair value is observable.


Level 1:		Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2:		Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3:		Inputs that are not based on observable market data.

Fair values of financial instruments by hierarchy level as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016
Type	Level 1		Level 2		Level 3		Total

Financial assets at fair value
Available-for-sale financial assets	W	231,383		—		180,384		411,767
Derivative assets		—		449,285		—		449,285

		231,383		449,285		180,384		861,052

Financial liabilities at fair value
Derivative liabilities		—		195,870		—		195,870


In millions of won	December 31, 2015
Type	Level 1		Level 2		Level 3		Total

Financial assets at fair value
Available-for-sale financial assets	W	196,579		—		180,390		376,969
Derivative assets		—		617,150		—		617,150

		196,579		617,150		180,390		994,119


Financial liabilities at fair value
Derivative liabilities		—		166,510		—		166,510

The fair value of available-for-sale financial assets publicly traded is measured at the closing bid price quoted at the end of the reporting period. Meanwhile, the fair value of unquoted available-for-sale financial assets is calculated using the valuation results from an external pricing service in which weighted average borrowing rates of interest of evaluated companies are used as a discount rate. The fair value of derivatives is measured using valuation model which is determined at the present value of estimated future cash flows discounted at current market interest rate.

148

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

44.

Risk Management, Continued

(3)

Fair value risk, continued

Changes of financial assets and liabilities which are classified as level 3 for the three-month period ended March 31, 2016 and for the year ended December 31, 2015 are as follows:

In millions of won

March 31, 2016

Beginning
balance

Acquisition

Reclassified
category

Valuation

Disposal

Foreign
currency
translation

Ending
balance

Financial assets at fair value

Available-for-sale financial assets

Unlisted securities

180,390

—

)

—

180,384

In millions of won

December 31, 2015

Beginning
balance

Acquisition

Reclassified
category

Valuation

Disposal

Foreign
currency
translation

Ending
balance

Financial assets at fair value

Available-for-sale financial assets

Unlisted securities

168,627

—

11,763

—

180,390

149

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

45.

Service Concession Arrangements

(1)

Gas Complex • Thermal Power Plant at Ilijan, Philippines (BOT)

(i)

Significant terms and concession period of the arrangement

The Company has entered into a contract with National Power Corporation (the “NPC”), based in the Republic of the Philippines whereby the Company can collect the electricity rates which are composed of fixed costs and variable costs during the concession period after building, rehabilitating, and operating the power plant.

(ii)

Rights and classification of the arrangement

The Company has the rights to use and own the power plant during the concession period from 2002 to 2022. At the end of the concession period, the Company has an obligation to transfer its ownership of the power plant to NPC.

(iii)

The Company’s expected future collections of service concession arrangements as of March 31, 2016 are as follows:


In millions of won
Type	Amounts

Less than 1 year	W	120,488
1 ~ 2 years		120,488
2 ~ 3 years		120,488
Over 3 years		351,422

	W	712,886

(2)

Hydroelectric Power Generation at Semangka, Indonesia (BOT)

(i)

Significant terms and concession period of the arrangement

The Company has entered into a contract with PT. Perusahaan Listrik Negara (the “PLN”) whereby the Company provides electricity generated and charge tariff rates designed to recover capital cost, fixed O&M cost, tax on water usage, variable O&M cost and special facilities cost during the concession period after building, rehabilitating, and operating the power plant for approximately 30 years (2017~2047) subsequent to the completion of plant construction.

(ii)

Rights and classification of the arrangement

The Company has the rights to use and own the power plant during the concession period from 2017 to 2047. At the end of the concession period, PNL has an option to take over the ownership of the power plant from the Company.

(iii)

The Company’s expected future collections of service concession arrangements as of March 31, 2016 are as follows:


In millions of won
Type	Amounts

Less than 1 year	W	—
1 ~ 2 years		18,247
2 ~ 3 years		29,128
Over 3 years		671,577

	W	718,952

(iv)

Accumulated contract costs and profits related to the Company’s contract in process as of March 31, 2016 were W79,783 million and W5,019 million, respectively. There are no amount due from customers and advance receipts in progress.

150

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

46.

Related Parties

(1)

Related parties of the Company as of March 31, 2016 are as follows:


Type		Related party

Parent		Republic of Korea government

Subsidiaries (79 subsidiaries)		Korea Hydro & Nuclear Power Co., Ltd., Korea South-East Power Co., Ltd., Korea Midland Power Co., Ltd., Korea Western Power Co., Ltd., Korea Southern Power Co., Ltd., Korea East-West Power Co., Ltd., KEPCO Engineering & Construction Company, Inc., KEPCO Plant Service & Engineering Co., Ltd., KEPCO Nuclear Fuel Co., Ltd., KEPCO KDN Co., Ltd., Garolim Tidal Power Plant Co., Ltd., Gyeonggi Green Energy Co., Ltd., Korea Offshore Wind Power Co., Ltd., KOSEP Material Co., Ltd., KEPCO International HongKong Ltd., KEPCO International Philippines Inc., KEPCO Philippines Corporation, KEPCO Ilijan Corporation, KEPCO Gansu International Ltd., KEPCO Philippines Holdings Inc., KEPCO Lebanon SARL, KEPCO Neimenggu International Ltd., KEPCO Australia Pty., Ltd., KEPCO Shanxi International Ltd., KOMIPO Global Pte Ltd., KOSEP Australia Pty., Ltd., KOMIPO Australia Pty., Ltd., KOWEPO Australia Pty., Ltd., KOSPO Australia Pty., Ltd., KEPCO Canada Energy Ltd., KEPCO Canada Uranium Investment Limited Partnership, KEPCO Netherlands B.V., KOREA Imouraren Uranium Investment Corp., KEPCO Middle East Holding Company, Qatrana Electric Power Company, Korea Electric Power Nigeria Ltd., KOWEPO International Corporation, KOSPO Jordan LLC, Korea Waterbury Uranium Limited Partnership, PT. Cirebon Power Service, EWP America Inc., KHNP Canada Energy., Ltd., KEPCO Bylong Australia Pty., Ltd., KNF Canada Energy Limited, KEPCO Holdings de Mexico, KST Electric Power Company, KEPCO Energy Service Company, KEPCO Netherlands S3 B.V., PT. KOMIPO Pembangkitan Jawa Bali, PT KEPCO Resource Indonesia, EWP Barbados 1 SRL, PT. Tanggamus Electric Power, KOMIPO America Inc, KOSEP USA, INC., PT. EWP Indonesia, KEPCO Netherlands J3 B.V., Global One Pioneer B.V., Global Energy Pioneer B.V., Mira Power Limited, EWP Philippines Corporation, LLC, KEPCO Singapore Holdings Pte., Ltd., KOWEPO India Private Limited, KEPCO KPS Philippines Corp., KOSPO Chile SpA, PT. KOWEPO Sumsel Operation And Maintenance Services, Commerce and Industry Energy Co., Ltd., Gyeongju Wind Power Co., Ltd., California Power Holdings, LLC, DG Fairhaven Power, LLC, DG Kings Plaza, LLC, DG Whitefield, LLC, EWP Renewable Co., EWPRC Biomass Holdings, LLC, Springfield Power, LLC, HeeMang Sunlight Power Co., Ltd., Fujeij Wind Power Company, KOSPO Youngnam Power Co., Ltd., Global One Carbon Private Equity Investment Trust 2., Chitose Solar Power Plant LLC.

Associates (56 associates)		Daegu Green Power Co., Ltd., Dongducheon Dream Power Co., Ltd., Korea Gas Corporation, SE Green Energy Co., Daegu Photovoltaic Co., Ltd., Jeongam Wind Power Co., Korea Power Engineering Service Co., Ltd., Yeongwol Energy Station Co., Ltd., KS Solar Co., Ltd., Heang Bok Do Si Photovoltaic Power Co., Ltd., Korea Electric Power Industrial Development Co., Ltd., DS POWER Co., Ltd., Goseong Green Energy Co. Ltd., Gangneung Eco Power Co., Ltd., Shin Pyeongtaek Power Co., Ltd., Naepo Green Energy Co., Ltd., Noeul Green Energy Co., Ltd., YTN Co., Ltd., Cheongna Energy Co., Ltd., Samcheok Eco Material Co., Ltd., Gangwon Wind Power Co., Ltd., Hyundai Green Power Co., Ltd., Korea Power Exchange, AMEC Partners Korea Ltd., Hyundai Energy Co., Ltd., Ecollite Co., Ltd., Taebaek Wind Power Co., Ltd., Muju Wind Power Co., Ltd., Pyeongchang Wind Power Co., Ltd., Daeryun Power Co., Ltd., JinanJangsu Wind Power Co., Ltd., Changjuk Wind Power Co., Ltd., KNH Solar Co., Ltd., S-Power Co., Ltd., Busan Solar Co., Ltd., Hadong Mineral Fiber Co., Ltd., Green Biomass Co., Ltd., SPC Power Corporation, Gemeng International Energy Co., Ltd., PT. Cirebon Electric Power, KNOC Nigerian East Oil Co., Ltd., KNOC Nigerian West Oil Co., Ltd., Dolphin Property Limited, PT. Wampu Electric Power, PT. Bayan Resources TBK, Pioneer Gas Power Limited, Eurasia Energy Holdings, Xe-Pian Xe-Namnoy Power Co., Ltd., PT. Mutiara Jawa, Jinbhuvish Power Generation Pvt. Ltd., Busan Green Energy Co., Ltd., Jungbu Bio Energy Co., Ltd., Korea Electric Vehicle Charge Service, Ulleungdo Natural Energy Co., Ltd., Korea Nuclear Partners Co., Ltd., Tamra Offshore Wind Power Co., Ltd

Joint ventures (39 joint ventures)		KEPCO SPC Power Corporation, Daejung Offshore Wind Power Co., Ltd., KEPCO-ALSTOM Power Electronics Systems, Inc., Dangjin Eco Power Co., Ltd.(Formerly, Dongbu Power Dangjin Corporation), Honam Wind Power Co., Ltd., Seokmun Energy Co., Ltd., Incheon New Power Co., Ltd., Chun-cheon Energy Co., Ltd., Yeonggwangbaeksu Wind Power Co., Ltd., KW Nuclear Components Co., Ltd., KEPCO-Uhde Inc., GS Donghae Electric Power Co., Ltd., Busan Shinho Solar Power Co., Ltd., Global Trade Of Power System Co., Ltd., Expressway Solar-light Power Generation Co., Ltd., Gansu Datang Yumen Wind Power Company Ltd., Datang Chifeng Renewable Power Co., Ltd., KEPCO Energy Resource Nigeria Limited, Rabigh Electricity Company, Eco Biomass Energy Sdn. Bhd., Rabigh Operation & Maintenance Company, Datang KEPCO Chaoyang Renewable Power Co., LTD., Shuweihat Asia Power Investment B.V., Shuweihat Asia Operation & Maintenance Company, Waterbury Lake Uranium L.P., ASM-BG Investicii AD, RES Technology AD, Jamaica Public Service Company Limited, KV Holdings, Inc., Datang Chaoyang Renewable Power Co., Ltd., Nepal Water & Energy Development Company Pty Ltd., KODE NOVUS 1 LLC, KODE NOVUS 2 LLC, Amman Asia Electric Power Company, Kelar S.A, PT. Tanjung Power Indonesia, Nghi Son 2 Power Ltd., Canada Korea Uranium Limited Partnership, Daehan Wind Power PSC

Others		Korea Development Bank

(2)

Transactions between the Company and its subsidiaries are eliminated during the consolidation and will not be shown as notes.

151

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

46.

Related Parties, Continued

(3)

Related party transactions for the three-month periods ended March 31, 2016 and 2015 are as follows:

<Sales and Others>


In millions of won		Sales and others
Company name	Transaction type	March 31, 2016		March 31, 2015

<Associates>
Daegu Green Power Co., Ltd.	Electricity sales	W	195		227
Dongducheon Dream Power Co., Ltd.	Rental income and others		3,910		3,844
Korea Gas Corporation	Electricity sales		27,431		27,178
Jeongam Wind Power Co., Ltd.	Electricity sales		4		4
Korea Power Engineering Service Co., Ltd	Service		8		—
Yeongwol Energy Station Co., Ltd.	Service		244		208
KS Solar Co., Ltd.	Electricity sales		5		6
Korea Electric Power Industrial Development Co., Ltd.	Service		4,135		4,426
DS POWER Co., Ltd.	Service		15,688		27,886
Goseong Green Energy Co. Ltd.	Property sales		1		1
Gangneung Eco Power Co., Ltd.	Service		62		2,112
Shin Pyeongtaek Power Co., Ltd.	Service		69		1
Naepo Green Energy Co., Ltd.	Electricity sales		33		22
YTN Co., Ltd.	Electricity sales		453		505
Busan Green Energy Co., Ltd,	Service		117		—
Korea Electric Vehicle Charge Service	Service		8		—
Cheongna Energy Co., Ltd.	Service		3,311		16,702
Gangwon Wind Power Co., Ltd.	Electricity sales		1,160		889
Hyundai Green Power Co., Ltd.	Design Service		10,394		10,625
Korea Power Exchange	Service		1,386		1,086
Hyundai Energy Co., Ltd.	Service		5,916		10,955
Taebaek Wind Power Co., Ltd.	Service		212		179
Pyeongchang Wind Power Co., Ltd.	Design Service		9		37
Daeryun Power Co., Ltd.	Electricity sales		448		457
Changjuk Wind Power Co., Ltd.	Electricity sales		193		156
KNH Solar Co., Ltd.	Electricity sales		5		5
S-Power Co., Ltd.	Service		1,183		2,030
Busan Solar Co., Ltd.	Electricity sales		4		4
Green Biomass Co., Ltd.	Woodchip purchase		1		3
SPC Power Corporation	Commission		—		6
PT. Bayan Resources TBK	Service		57		—
Xe-Pian Xe-Namnoy Power Co., Ltd.	Service		201		101

<Joint ventures>
KEPCO SPC Power Corporation	Service / Dividend income		1,202		1,103
KEPCO-ALSTOM Power Electronics Systems, Inc	Commission		275		—
Dangjin Eco Power Co., Ltd.	Technical fee		447		10
Honam Wind Power Co., Ltd.	Electricity sales		119		12
Seokmun Energy Co., Ltd.	Technical fee		311		354
Incheon New Power Co., Ltd.	Construction Revenue		129		5
Chun-cheon Energy Co., Ltd	Service		873		—
Yeonggwangbaeksu Wind Power Co., Ltd	Electricity sales		394		—
KW Nuclear Components Co., Ltd.	Service		2,665		1,341
GS Donghae Electric Power Co., Ltd.	Service		3,602		1,342
Busan Shinho Solar Power Co., Ltd.	Electricity sales		191		7
Datang Chifeng Renewable Power Co., Ltd.	Interest income		230		430
Rabigh Electricity Company	Interest income		54		—
Shuweihat Asia Operation & Maintenance Company	Service		37		—
Jamaica Public Service Company Limited	Service		815		747
Amman Asia Electric Power Company	Service		2,396		14,532
Kelar S.A	Service		504		1,099

<Others>
Korea Development Bank	Electricity sales		952		953
	Interest income		169		555

152

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

46.

Related Parties, Continued

(3)

Related party transactions for the three-month periods ended March 31, 2016 and 2015 are as follows, continued:

<Purchase and Others>


In millions of won		Purchase and others
Company name	Transaction type	March 31, 2016		March 31, 2015

<Associates>
Daegu Green Power Co., Ltd.	Electricity sales	W	81,614		109,189
Dongducheon Dream Power Co., Ltd.	Rental income and others		300,955		158,439
Korea Gas Corporation	Purchase of power generation fuel		1,036,464		1,756,236
Daegu Photovoltaic Co., Ltd.	REC Purchase		521		914
Korea Power Engineering Service Co., Ltd.	Service		224		839
Yeongwol Energy Station Co., Ltd.	REC Purchase		7,738		1,069
KS Solar Energy Co., Ltd.	REC Purchase		767		2,168
Heang Bok Do Si Photovoltaic Power Co., Ltd.	Rental Fee and others		71		93
Korea Electric Power Industrial Development Co., Ltd.	Electricity metering service fee		51,365		55,176
YTN Co., Ltd.	Advertisement fee		18		18
Cheongna Energy Co., Ltd.	Service		73		—
Gangwon Wind Power Co., Ltd.	Electricity purchase		6,853		9,003
Hyundai Green Power Co., Ltd.	Electricity purchase		115,770		110,044
Korea Power Exchange	Trading Fees		24,262		23,318
Hyundai Energy Co., Ltd.	Electricity purchase		352		781
Taebaek Wind Power Co., Ltd.	REC Purchase		2,088		2,720
Daeryun Power Co., Ltd.	Electricity sales		65,438		98,743
Changjuk Wind Power Co., Ltd.	Electricity purchase		2,027		2,741
KNH Solar Co., Ltd.	Electricity sales		614		824
S-Power Co., Ltd.	Service		146,213		228,759
Busan Solar Co., Ltd.	Electricity sales		794		1,072
Green Biomass Co., Ltd.	Woodchip purchase		816		809

<Joint ventures>
KEPCO-ALSTOM Power Electronics Systems, Inc.	Service		30,181		12,040
Honam Wind Power Co., Ltd.	Electricity purchase		1,970		3,183
Yeonggwangbaeksu Wind Power Co., Ltd	Electricity purchase		3,683		—
Busan Shinho Solar Power Co., Ltd.	REC Purchase		1,702		2,133
Expressway Solar-light Power Co., Ltd.	Electricity purchase		586		1,065
Jamaica Public Service Company Limited	Service		35		233

<Others>
Korea Development Bank	Interest expense		2,164		8,053
	Provision of dividends		654,829		96,087

153

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

46.

Related Parties, Continued

(4)

Receivables and payables arising from related party transactions as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won		Receivables				Payables
Company name	Type	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015

<Associates>
Daegu Green Power Co., Ltd.	Trade receivables	W	57		95		—		—
	Trade payables		—		—		24,672		22,200
	Non-trade payables and others		—		—		2,427		—
Dongducheon Dream Power Co., Ltd.	Trade receivables		2,088		1,206		—		—
	Trade payables		—		—		87,155		100,396
Korea Gas Corporation	Trade receivables		6,278		7,931		—		—
	Non-trade receivables and others		3,247		255		—		—
	Trade payables		—		—		275,484		302,752
	Non-trade payables and others		—		—		64,433		—
Daegu Photovoltaic Co., Ltd.	Trade payables		—		—		80		—
Jeongam Wind Power Co., Ltd.	Non-trade payables and others		—		—		—		1
Korea Power Engineering Services Co., Ltd.	Non-trade payables and others		—		—		11		—
Yeongwol Energy Station Co., Ltd.	Trade receivables		243		7,063		—		—
	Trade payables		—		—		229		229
KS Solar Co., Ltd.	Trade receivables		2		2		—		—
	Trade payables		—		—		90		68
	Non-trade payables and others		—		—		421		281
Korea Electric Power Industrial Development Co., Ltd.	Trade receivables		640		469		—		—
	Non-trade receivables and others		1,609		27		—		—
	Non-trade payables and others		—		—		13,555		27,569
DS Power Co., Ltd.	Trade receivables		442		260		—		—
	Non-trade receivables and others		707		—		—		—
	Non-trade payables and others		—		—		1		135
Goseong Green Energy Co., Ltd.	Non-trade payables and others		—		—		3,900		3,900
Gangneung Eco Power Co., Ltd.	Trade receivables		1		1		—		—
	Non-trade receivables and others		1,760		1,701		—		—
Shin Pyeongtaek Power Co., Ltd.	Non-trade receivables and others		27		272		—		—
Naepo Green Energy Co., Ltd.	Trade receivables		8		9		—		—
YTN Co., Ltd.	Trade receivables		75		93		—		—
	Non-trade payables and others		—		—		—		154
Korea Electric Vehicle Charge Service	Trade receivables		3		—		—		—
Cheongna Energy Co., Ltd.	Trade receivables		126		157		—		—
	Non-trade receivables and others		—		375		—		—
	Non-trade payables and others		—		—		580		—
Gangwon Wind Power Co., Ltd.	Trade receivables		9		12		—		—
	Trade payables		—		—		1,433		1,753
Hyundai Green Power Co., Ltd.	Trade receivables		433		962		—		—
	Trade payables		—		—		36,434		36,079
Korea Power Exchange	Trade receivables		792		1,452		—		—
	Non-trade receivables and others		—		112		—		—
	Trade payables		—		—		—		3,529
	Non-trade payables and others		—		—		1,339		1,529

154

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

46.

Related Parties, Continued

(4)

Receivables and payables arising from related party transactions as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won		Receivables				Payables
Company name	Type	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015

Hyundai Energy Co., Ltd.	Trade receivables	W	51		44,510		—		—
	Non-trade receivables and others		49,441		—		—		—
	Trade payables		—		—		73		178
	Non-trade payables and others		—		—		8,240		8,030
Ecollite Co., Ltd.	Non-trade receivables and others		210		210		—		—
Taebaek Wind Power Co., Ltd.	Trade receivables		106		—		—		—
	Non-trade receivables and others		—		147		—		—
	Trade payables		—		—		217		349
	Non-trade payables and others		—		—		370		—
Pyeongchang Wind Power Co., Ltd.	Trade receivables		3		—		—		—
	Non-trade receivables and others		—		170		—		—
Daeryun Power Co., Ltd.	Trade receivables		145		117		—		—
	Trade payables		—		—		13,381		27,374
Changjuk Wind Power Co., Ltd.	Trade receivables		99		—		—		—
	Non-trade receivables and others		—		153		—		—
	Trade payables		—		—		201		—
	Non-trade payables and others		—		—		360		330
KNH Solar Co., Ltd.	Trade receivables		1		2		—		—
S-Power Co., Ltd.	Trade receivables		146		121		—		—
	Trade payables		—		—		42,186		54,141
Busan Solar Co., Ltd.	Trade receivables		1		1		—		—
	Trade payables		—		—		1		1
	Non-trade payables and others		—		—		—		208
Green Biomass Co., Ltd.	Non-trade receivables and others		94		109		—		—
	Non-trade payables and others		—		—		391		152
Pioneer Gas Power Limited	Non-trade receivables and others		—		26		—		—

<Joint ventures>
KEPCO SPC Power Corporation	Trade receivables		664		—		—		—
	Non-trade receivables and others		—		252		—		—
KEPCO-ALSTOM Power Electronics Systems, Inc.	Non-trade receivables and others Non-trade payables and others		216 —		251 —		— 10		— 61
Dangjin Eco Power Co., Ltd.	Non-trade receivables and others		746		300		—		—
Honam Wind Power Co., Ltd.	Trade payables		—		—		288		342
	Non-trade payables and others		—		—		2,931		2,124
Seokmun Energy Co., Ltd.	Trade receivables		1		—		—		—
	Non-trade receivables and others		1,920		2,086		—		—
Incheon New Power Co., Ltd.	Trade receivables		127		128		—		—

155

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

46.

Related Parties, Continued


In millions of won		Receivables				Payables
Company name	Type	March 31, 2016		December 31, 2015		March 31, 2016		December 31, 2015

Chun-cheon Energy Co., Ltd.	Non-trade receivables and others	W	118		112		—		—
Yeonggwangbaeksu Wind Power Co., Ltd.	Trade receivables		6		7		—		—
	Non-trade receivables and others		143		136		—		—
	Trade payables		—		—		542		627
	Non-trade payables and others		—		—		1,469		2,000
GS Donghae Electric Power Co., Ltd.	Trade receivables		1,089		970		—		—
	Non-trade receivables and others		825		1,216		—		—
Busan Shinho Solar Power Co., Ltd.	Trade receivables		2		2		—		—
	Trade payables		—		—		166		272
	Non-trade payables and others		—		—		857		970
Datang Chifeng Renewable Power Co., Ltd.	Non-trade receivables and others		35		368		—		—
Rabigh Operation & Maintenance Company	Non-trade receivables and others		—		1,780		—		—
Jamaica Public Service Company Limited	Trade receivables		588		1,193		—		—
	Non-trade receivables and others		633		581		—		—
Amman Asia Electric Power Company	Trade receivables		1,769		739		—		—

<Others>
Korea Development Bank	Accrued interest income		54		212		—		—
	Non-trade receivables and others		255,673		45,623		—		—
	Non-trade payables and others		—		—		471		493
	Derivatives		7,528		3,777		6,875		2,313

(5)

Loans and others arising from related party transactions as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won
Type	Company name	Beginning balance			Loans		Collection			Others			Ending balance

Joint ventures	KEPCO SPC Power Corporation	W	29,651			—		—			(468	)		29,183
Joint ventures	Datang Chifeng Renewable Power Co., Ltd.		23,775			—		(4,062	)		(213	)		19,500
Joint ventures	Jamaica Public Service Company Limited		2,345			—		—			(37	)		2,308
Joint ventures	Rabigh Electricity Company		45,552			—		—			(699	)		44,853
Associates	KNOC Nigerian East Oil Co., Ltd. KNOC Nigerian West Oil Co., Ltd.		28,296			—		—			(417	)		27,879
	Allowance for doubtful accounts		(17,755	)		—		—			221			(17,534	)
Associates	PT. Cirebon Electric Power		40,979			998		—			(690	)		41,287
Associates	PT. Mutiara Jawa		450			—		(450	)		—			—
Associates	Xe-Pian Xe-Namnoy Power Co., Ltd.		1,413			—		—			—			1,413
Associates	PT. Wampu Electric Power		—			9,638		—			—			9,638
Associates	Jungbu Bio Energy Co., Ltd.		—			—		—			396			396

		W	154,706			10,636		(4,512	)		(1,907	)		158,923

156

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

46.

Related Parties, Continued

(6)

Borrowings arising from related party transactions as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won
Related parties	Type	Beginning balance		Borrowings		Repayment			Ending balance

Korea Development Bank	Facility	W	261,437		6,200		(615	)		267,022
	Others		6,418		—		(189	)		6,229
	Operating funds		12,000		—		—			12,000

(7)

Guarantees provided to associates or joint ventures as of March 31, 2016 are as follows:


In millions of won and thousands of foreign currencies
Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit		Guarantee

Korea Electric Power Corporation	KEPCO SPC Power Corporation	Debt guarantees	USD	88,138	SMBC, The Export-Import Bank of Korea and ADB
Korea Electric Power Corporation	Shuweihat Asia O&M Co., Ltd.	Performance guarantees	USD	11,000	SAPCO
Korea Electric Power Corporation	KNOC Nigerian East Oil Co., Ltd. and KNOC Nigerian West Oil Co., Ltd.	Performance guarantees	USD	34,650	Korea National Oil Corporation (Nigerian government)
Korea Electric Power Corporation	Rabigh Operation & Maintenance Company	Performance guarantees and others	USD	1,387	Rabigh Electricity Company
Korea Electric Power Corporation	Nghi Son 2 Power Ltd.	Bidding guarantees	USD	10,000	SMBC Ho Chi Minh
Korea Western Power Co., Ltd.	Cheongna Energy Co., Ltd.	Collateralized money invested	KRW	27,211	KEB Hana Bank and others
Korea Western Power Co., Ltd.	Cheongna Energy Co., Ltd.	Guarantees for supplemental funding (*1)		—	KEB Hana Bank and others
Korea Western Power Co., Ltd.	Xe-Pian Xe-Namnoy Power Co., Ltd.	Payment guarantees for business reserve	USD	2,500	Krung Thai Bank
		Collateralized money invested	USD	29,357
		Impounding bonus guarantees	USD	5,000	SK E&C
Korea Western Power Co., Ltd.	Rabigh Operation & Maintenance Company	Performance guarantees	SAR	5,600	Saudi Arabia British Bank
Korea Western Power Co., Ltd.	Daegu Photovoltaic Co., Ltd.	Collateralized money invested	KRW	1,230	IBK
Korea Western Power Co., Ltd.	Dongducheon Dream Power Co., Ltd. (*2)	Collateralized money invested	KRW	111,134	Woori Bank and others
Korea Western Power Co., Ltd.	PT. Mutiara Jawa	Collateralized money invested	USD	2,610	Shinhan Bank Singapore
Korea Western Power Co., Ltd.	Heangbok Do Si Photovoltaic Power Co., Ltd.	Collateralized money invested	KRW	194	Nonghyup Bank
Korea Western Power Co., Ltd.	Shin Pyeongtaek Power Co., Ltd.	Collateralized money invested	KRW	40	Kookmin Bank
Korea East-West Power Co., Ltd.	Busan Shinho Solar Power Co., Ltd.	Collateralized money invested	KRW	2,100	Heungkuk Life Insurance Co., Ltd. and others

157

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

46.

Related Parties, Continued

(7)

Guarantees provided to associates or joint ventures as of March 31, 2016 are as follows, continued:


In millions of won and thousands of foreign currencies
Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit		Guarantee

Korea East-West Power Co., Ltd.	Seokmun Energy Co., Ltd.	Collateralized money invested	KRW	580	KEB Hana Bank and others
Korea East-West Power Co., Ltd.	Seokmun Energy Co., Ltd.	Guarantees for supplemental funding (*1)	KRW	15,370	KEB Hana Bank and others
Korea East-West Power Co., Ltd.	Chun-cheon Energy Co., Ltd.	Collateralized money invested	KRW	52,700	Kookmin Bank and others
	Chun-cheon Energy Co., Ltd.	Guarantees for supplemental funding (*1)		—	Kookmin Bank and others
Korea East-West Power Co., Ltd.	Honam Wind Power Co., Ltd.	Collateralized money invested	KRW	3,480	Shinhan Bank
Korea East-West Power Co., Ltd.	GS-Donghae Electric Power Co., Ltd.	Collateralized money invested	KRW	204,000	Korea Development Bank and others
Korea East-West Power Co., Ltd.	Yeonggwangbaeksu Wind Power Co., Ltd.	Collateralized money invested	KRW	3,000	Hyundai Marine & Fire Insurance Co., Ltd. and others
Korea East-West Power Co., Ltd.	PT. Tanjung Power Indonesia	Debt guarantees	USD	35,000	The Bank of Tokyo-Mitsubishi and others
Korea Southern Power Co., Ltd.	KNH Solar Co., Ltd.	Collateralized money invested	KRW	1,296	Shinhan Bank and Kyobo Life Insurance Co., Ltd.
Korea Southern Power Co., Ltd.	KNH Solar Co., Ltd.	Performance guarantees and guarantees for supplemental funding (*1)		—	Shinhan Bank and Kyobo Life Insurance Co., Ltd.
Korea Southern Power Co., Ltd.	Daeryun Power Co., Ltd.	Collateralized money invested	KRW	25,477	Korea Development Bank, Daewoo Securities Co., Ltd. and others
Korea Southern Power Co., Ltd.	Daeryun Power Co., Ltd.	Guarantees for supplemental funding (*1)		—
Korea Southern Power Co., Ltd.	Changjuk Wind Power Co., Ltd.	Collateralized money invested	KRW	3,801	Shinhan Bank and Woori Bank
Korea Southern Power Co., Ltd.	Changjuk Wind Power Co., Ltd.	Guarantees for supplemental funding (*1)		—	Shinhan Bank and Woori Bank
Korea Southern Power Co., Ltd.	Busan Solar Co., Ltd.	Collateralized money invested	KRW	793	Consus Asset Management Co., Ltd
Korea Southern Power Co., Ltd.	Daegu Green Power Co., Ltd.	Collateralized money invested	KRW	79,540	KEB Hana Bank and Kookmin Bank
Korea Southern Power Co., Ltd.	Daegu Green Power Co., Ltd.	Performance guarantees and guarantees for supplemental funding (*1)		—	KEB Hana Bank and Kookmin Bank
Korea Southern Power Co., Ltd.	KS Solar Co., Ltd.	Collateralized money invested	KRW	637	Shinhan Capital Co., Ltd.

158

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

46.

Related Parties, Continued

(7)

Guarantees provided to associates or joint ventures as of March 31, 2016 are as follows, continued:


In millions of won and thousands of foreign currencies
Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit		Guarantee

Korea Southern Power Co., Ltd.	Kelar S.A	Performance guarantees (*1)	USD	52,000	KEB Hana Bank, SMBC and others
	Kelar S.A	Debt guarantees	USD	132,600	SMBC, MIZUHO Bank and others
Korea Southern Power Co., Ltd.	DS Power Co., Ltd.	Collateralized money invested	KRW	2,900	Korea Development Bank and Daewoo Securities Co., Ltd.
Korea Southern Power Co., Ltd.	DS Power Co., Ltd.	Guarantees for supplemental funding (*1)		—	Korea Development Bank and Daewoo Securities Co., Ltd.
Korea Southern Power Co., Ltd.	Pyeongchang Wind Power Co., Ltd.	Collateralized money invested	KRW	3,875	Woori Bank and Shinhan Bank
Korea Southern Power Co., Ltd.	Pyeongchang Wind Power Co., Ltd.	Performance guarantees and guarantees for supplemental funding (*1)		—	Woori Bank and Shinhan Bank
Korea Southern Power Co., Ltd.	Taebaek Wind Power Co., Ltd.	Guarantees for supplemental funding (*1)		—	Shinhan Bank and Cheju Bank
KEPCO Engineering & Construction Company, Inc.	DS Power Co., Ltd.	Collateralized money invested	KRW	15,000	Korea Development Bank and Daewoo Securities Co., Ltd.
KEPCO Engineering & Construction Company, Inc.	DS Power Co., Ltd.	Performance guarantees and guarantees for supplemental funding (*1)		—	Korea Development Bank and Daewoo Securities Co., Ltd.
Korea Midland Power Co., Ltd.	Hyundai Green Power Co., Ltd.	Collateralized money invested	KRW	88,885	Korea Development Bank and others
Korea Midland Power Co., Ltd.	Hyundai Green Power Co., Ltd.	Guarantees for supplemental funding (*1)		—	Korea Development Bank and others
Korea Midland Power Co., Ltd.	PT. Cirebon Electric Power	Debt guarantees	USD	9,653	Nonghyup Bank
Korea Midland Power Co., Ltd.	PT. Wampu Electric Power	Performance guarantees (*1)	USD	8,803	Woori Bank
Korea Midland Power Co., Ltd.	Gangwon Wind Power Co., Ltd.	Collateralized money invested	KRW	7,410	IBK and others
Korea South-East Power Co., Ltd.	Hyundai Energy Co., Ltd.	Collateralized money invested	KRW	35,498	Korea Development Bank and others
	Hyundai Energy Co., Ltd.	Performance guarantees and guarantees for supplemental funding (*1)		—	Korea Development Bank and others
Korea South-East Power Co., Ltd.	RES Technology AD	Collateralized money invested	KRW	15,595	Korea Development Bank and others
Korea South-East Power Co., Ltd.	RES Technology AD	Debt guarantees	EUR	4,271	Korea Development Bank and others

159

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

46.

Related Parties, Continued

(7)

Guarantees provided to associates or joint ventures as of March 31, 2016 are as follows, continued:


In millions of won and thousands of foreign currencies
Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit		Guarantee

Korea South-East Power Co., Ltd.	ASM-BG Investicii AD	Collateralized money invested	KRW	16,101	Korea Development Bank and others
Korea South-East Power Co., Ltd.	ASM-BG Investicii AD	Debt guarantees	EUR	4,175	Korea Development Bank and others
Korea South-East Power Co., Ltd.	Express Solar-light Power Generation Co., Ltd.	Guarantees for supplemental funding (*1)	KRW	2,500	Woori Bank
Korea South-East Power Co., Ltd.	S-Power Co., Ltd.	Collateralized money invested	KRW	132,300	Korea Development Bank and others
	S-Power Co., Ltd.	Performance guarantees and guarantees for supplemental funding (*1)	USD	52,000	Korea Development Bank and others
KOSEP USA, INC.	KODE NOVUS II LLC	Guarantees for supplemental funding (*1)	USD	3,750	Korea Development Bank and others
KOSEP USA, INC.	KODE NOVUS I LLC	Guarantees for supplemental funding (*1)		—	The Export-Import Bank of Korea and others
Korea Hydro & Nuclear Power Co., Ltd.	Yeongwol Energy Station Co., Ltd.	Collateralized money invested	KRW	1,400	Meritz Fire & Marine Insurance Co., Ltd.
KEPCO Plant Service & Engineering Co., Ltd.	Incheon New Power Co., Ltd.	Collateralized money invested	KRW	6,800	Shinhan Bank
		Guarantees for supplemental funding (*1)		—

(*1)	The Company guarantees to provide supplemental funding for business with respect to excessive business expenses or insufficient repayment of borrowings.

(*2)	According to the Project Financing Agreement (“Agreement”), if there is any capital increase in Dongducheon Dream Power Co., Ltd. by issuance of new stock after the date of the Agreement, the newly issued shares owned by the Company shall also be provided as a collateral for the Project Financing.

(8)

Guarantees provided from related parties as of March 31, 2016 are as follows:


In thousands of U.S. dollars
Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit

Korea Development Bank	Korea Electric Power Corporation	Debt guarantees		USD 195,175

160

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

46.

Related Parties, Continued

(9)

Derivatives transactions with related parties as of March 31, 2016 are as follows:

(i)

Currency Swap

In millions of won and thousands of U.S. dollars

Counterparty

Contract year

Contract Amount

Contract interest rate per annum

Contract
exchange
rate

Pay

Receive

Pay(%)

Receive(%)

Korea Development Bank

2015~2025

111,190

USD 100,000

2.62

3.25

1,111.90

(ii)

Interest Rate Swap

In millions of won

Counterparty

Contract year

Contract
amount

Contract interest rate per annum

Pay (%)

Receive (%)

Korea Development Bank

2012~2016

200,000

3.57%

3M CD + 0.26%

Korea Development Bank

2012~2016

50,000

3.49%

3M CD + 0.25%

Korea Development Bank (*)

2014~2029

40,000

3M CD – 0.03%

4.65%

(*)

(10)

Salaries and other compensations to the key members of management of the Company for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won
Type	March 31, 2016		March 31, 2015

Salaries	W	174		195
Employee benefits		5		16

	W	179		211

47.

Non-Cash Transactions

Significant non-cash investing and financing transactions for the three-month periods ended March 31, 2016 and 2015 are as follows:


In millions of won
Transactions	March 31, 2016		March 31, 2015

Transfer from construction-in-progress to other assets	W	1,634,384		1,350,071
Recognition of asset retirement cost and related provision for decommissioning costs		44,134		82,512
Transfer from provision for disposal of spent nuclear fuel to accrued expenses		101,273		133,105

161

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

48.

Commitments for Expenditure

(1)

The agreements for acquisition of property, plant and equipment as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won	March 31, 2016				December 31, 2015
Contracts	Amounts		Balance		Amounts		Balance

Purchase of cable (TR CNCE-W,1C,600MM2,13.2KV)	W	50,581		50,581		50,581		50,581
Purchase of Kerosene (higher than 40DEG)		26,163		—		26,163		8,482
Purchase of Concrete Poles(10M, 350KGF)		106,037		41,285		106,037		74,549
Purchase of Ground Switch(44-D-A125, 600AX4)		43,624		18,759		43,624		42,912
Construction of New Kori units(#3,4)		6,856,150		118,039		6,856,150		214,678
Construction of New Kori units(#5,6)		8,625,387		7,788,501		8,625,387		7,899,368
Construction of New Hanwool units(#1,2)		7,982,343		2,368,474		7,982,343		2,578,707
Construction of New Hanwool units(#3,4)		8,261,817		8,207,692		8,261,817		8,238,651
Construction of New Cheonji units(#1,2)		12,555,724		12,555,558		—		—
Construction of Yeosu Thermal Power units(#1)		496,317		14,224		489,440		30,853
Other contracts		150,781		104,848		300,088		231,079
Construction of Seoul Combined units (#1,2)		227,000		190,289		227,000		182,630
Purchase of main machine for construction of new Boryeong units (#1,2)		851,132		33,906		851,132		137,744
Purchase of main machine for construction of Seoul Combined units (#1,2)		360,500		325,422		360,500		328,210
Service of designing New Boryeong units (#1,2)		126,038		32,910		126,038		32,910
Construction of New Boryeong units (#1,2)		246,964		3,546		246,964		10,859
Purchase of coal handling machine for construction of New Boryeong units (#1,2)		146,353		25,044		146,353		25,266
Purchase of smoke eliminating machine for construction of New Boryeong units (#1,2)		118,058		6,231		118,058		8,775
Electricity construction of New Boryeong units (#1,2)		245,357		10,945		245,357		36,893
Service of designing Taean IGCC plant units		44,374		5,520		44,374		5,520
Purchase of gas plant machine for construction of Taean IGCC units		458,187		3,316		457,423		4,541
Purchase of combined generating machine for construction of Taean IGCC units		202,255		8,037		204,514		25,808
Purchase of oxygen plant for construction of Taean IGCC units		97,208		3,920		97,804		4,252
Service of designing Taean units (#9,10)		109,700		28,617		107,516		26,437
Purchase of coal handling machine for construction of Taean (#9,10) and IGCC units (conditional contract for installation)		147,829		6,710		146,634		9,943
Purchase of desulfurization machine for construction of Taean units (#9,10) (conditional contract for installation)		92,086		6,669		91,592		6,175
Purchase of furnace for construction of Taean units (#9,10)		542,679		43,342		546,637		66,271
Purchase of turbine generator for construction of Taean units (#9,10)		218,427		17,371		426,139		103,146
Purchase of coal handling machine for construction of Samcheok units (#1,2)		300,247		71,547		290,417		23,795
Construction of Samcheok units (#1,2)		376,582		21,715		384,716		27,018
Construction of breakwater for Samcheok units (#1,2)		85,929		20,449		84,893		18,096

162

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

48.

Commitments for Expenditure, Continued

(1)	The agreements for acquisition of property, plant and equipment as of March 31, 2016 and December 31, 2015 are as follows, continued:


In millions of won	March 31, 2016				December 31, 2015
Contracts	Amounts		Balance		Amounts		Balance

Purchase of furnace for construction of Samcheok units (#1,2)	W	1,091,303		73,689		1,091,303		115,896
Purchase of turbine generator for construction of Samcheok units (#1,2)		213,761		2,537		213,761		4,040
Service of designing Samcheok units (#1,2)		112,949		42,631		112,949		42,631
Construction of yard for Andong natural gas power plant		40,960		2,158		40,960		2,528
Purchase of ash disposing facility for construction of Samcheok units (#1,2)		46,952		2,462		46,970		2,857
Service of designing Dangjin units (#9,10)		110,188		7,801		109,340		16,261
Construction of Dangjin units (#9,10)		429,098		7,229		388,559		6,054
Electricity construction of Dangjin units (#9,10)		331,083		17,311		294,099		16,812


	W	52,528,123		32,289,285		40,243,632		20,661,228

(2)

As of March 31, 2016, details of contracts for inventory purchase are as follows:

The Company imports all of its uranium ore concentrates from sources outside Korea (including the United States, United Kingdom, Kazakhstan, France, Russia, South Africa, Canada and Australia) which are paid for with currencies other than Won, primarily in U.S. dollars. In order to ensure stable supply, the Company entered into long-term and medium-term contracts with various suppliers, and supplements such supplies with purchases of fuels on spot markets. The long-term and medium-term contract periods vary among contractors and the stages of fuel manufacturing process. Contract prices for processing of uranium are generally based on market prices. Contract periods for ore concentrates, conversion, enrichment and design and fabrication are as follows:


Type	Periods	Contracted amounts
Concentrate	2016 ~ 2030	34,719 Ton U3O8
Transformed	2016 ~ 2022	18,738 Ton U
Enrichment	2016 ~ 2029	34,879 Ton SWU
Molded	2016 ~ 2022	1,852 Ton U

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

49.

Contingencies and Commitments

(1)

Ongoing litigations related with contingent liabilities and assets as of March 31, 2016 and December 31, 2015 are as follows:


In millions of won
	March 31, 2016				December 31, 2015
	Number of cases		Claim amount		Number of cases		Claim amount

As the defendant		750	W	1,123,018		750	W	1,052,301
As the plaintiff		201		1,033,127		202		580,987

(i) The Company is the defendant against a number of claims. The following are potentially significant claims pertaining to the Company:

Hyundai Engineering & Construction Co., Ltd.(“Hyundai E&C”), SK Engineering & Construction Co., Ltd. and GS Engineering & Construction Co., Ltd. filed a law suit for increase in contract bill (formerly, amounted to W1,000 million) against Korea Hydro & Nuclear Co., Ltd.(“KHNP”) in September 2013, in relation to the design changes on the plant construction of New Hanwool 1 & 2. Hyundai Engineering & Construction Co., Ltd. and two other companies increased the contract bill to W133,426 million in October 2014 and W204,040 million in November 2015, respectively, and submitted an application to demand extra contract payments due to the design changes.

Due to the inherent uncertainties, the Company is not able to reliably estimate the amount of compensation and timing if any, that might be awarded to Hyundai E&C and two other companies. Consequently, it is not possible for the Company to make an estimate of the expected financial effect that will result from the ultimate resolution of a lawsuit. Therefore, the Company has not recognized any provision for the lawsuit.

(ii) In December 2013, the Supreme Court of Korea ruled that regular bonuses also fall under the category of ordinary wages on the condition that those bonuses are paid regularly and uniformly. Also, the Supreme Court ruled that employees are entitled to retroactively demand certain wages based on the new ordinary wages that include regular bonuses as additional wages. However, the request may be limited to the extent of the principle of good faith.

The Company believes that the possibility of economic outflow is probable on the ongoing and the expected lawsuit. For this reason, the Company recognized W146,386 million of other provision in relation to the lawsuit.

(2)

Guarantees of borrowings provided to other companies as of March 31, 2016 and December 31, 2015 are as follows:

•

The Company has a borrowing of W22,500 million from Long Lasting Value (“LLV”) as of December 31, 2015. LLV obtains loans from major stockholders, such as Samsung Life Insurance, and lends the money to other third parties. The Company guarantees secured payments to the major stockholders of LLV, such as payment of principal, tax, commissions, etc., with a limit of W23,900 million.

•

In order to secure its status as a shareholder of Navanakom Electric Co., Ltd., the Company has signed a fund supplement contract. According to the contract, in case Navanakom Electric Co., Ltd. does not have sufficient funds for its operation or repayment of borrowings, the Company bears a payment obligation in proportion to its ownership.

•

The Company has outstanding borrowings with a limit of USD 275,600,000 from its creditors such as International Finance Corporation. Regarding the borrowing contract, the Company has guaranteed capital contribution of USD 69,808,000 and additional contribution up to USD 19,000,000 for contingencies, if any. Moreover, for one of the electricity purchasers, Central Power Purchasing Agency Guarantee Ltd., the Company has provided payment guarantee up to USD 2,777,000, in case of construction delay or insufficient contract volume after commencement of the construction.

•

The Company has provided performance guarantee up to USD 917,000 in proportion to its ownership in the electricity purchase contract with PT. Cirebon Energi Prasarana in relation to the second electirc power generation business in Cirebon, Indonesia.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

49.

Contingencies and Commitments, Continued

(3)

Credit lines provided by financial institutions as of March 31, 2016 are as follows:


In millions of won and thousands of foreign currencies
Commitments	Financial institutions	Currency	Amount

Commitments on bank-overdraft	Nonghyup Bank and others	KRW		1,915,000
Commitments on bank-daylight overdraft	Nonghyup Bank	KRW		280,000
Limit amount available for CP	Shinhan Bank and others	KRW		700,000
Limit amount available for card	KEB Hana Bank and others	KRW		56,278
	Banco de Oro	PHP		5,000
Loan limit	Kookmin Bank and others	KRW		686,584
	BNP Paribas and others	USD		2,228,059
Certification of payment on L/C	KEB Hana Bank	GBP		61,169
	Woori Bank and others	USD		1,260,775
Certification of performance guarantee on contract	Kookmin Bank	EUR		14,833
	KEB Hana Bank and others	INR		236,443
	Seoul Guarantee Insurance and others	KRW		127,998
	Bank of Kathmandu	NPR		32,633
	KEB Hana Bank and others	USD		3,222,676
Certification of bidding	SMBC and others	USD		15,000
	ABSA Bank	ZAR		45,000
Advance payment bond, Warranty bond, Retention bond and others	KEB Hana Bank and others	NPR		36,309
	HSBC and others	USD		566,350
Others	KEB Hana Bank	INR		157,830
	KEB Hana Bank and others	JPY		2,245,843
	KEB Hana Bank and others	KRW		87,250
	KEB Hana Bank	SAR		2,240
	Shinhan Bank and others	USD		1,112,805
Inclusive credit	Shinhan Bank	INR		47,489
	KEB Hana Bank	KRW		406,500
	HSBC and others	KRW		784,510
Trade finance	BNP Paribas and others	USD		800,000

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

49.

Contingencies and Commitments, Continued

(4)	As of March 31, 2016, the blank check and assets provided as collaterals or pledges to financial institutions by the Company are follows:

In millions of won and thousands of foreign currencies

Guarantor

Guarantee

Type of guarantee

Currency

Amount

Description

Korea East-West Power Co., Ltd.

Korea Development Bank and others

All shareholdings of Gyeongju Wind Power Co., Ltd.

KRW

9,240

Collateral for borrowings

Korea Midland Power Co., Ltd

IBK and others

Shareholdings of Commerce and Industry Energy Co., Ltd.

KRW

13,605

Collateral for borrowings

Korea Southern Power Co., Ltd

Shinhan Bank

Shareholdings of KOSPO Youngnam Power Co., Ltd

KRW

25,000

Collateral for borrowings

Korea South-East Power Co., Ltd.

International Finance Corporation and others

Shareholdings of Mira Power Limited

KRW

38,206

Collateral for borrowings

Korea Hydro & Nuclear Power Co., Ltd.

Korea Development Bank and others

All shareholdings of Gyeonggi Green Energy Co., Ltd.

KRW

47,000

Collateral for borrowings

Gyeonggi Green Energy Co., Ltd.

Korea Development Bank and others

Factory estate and others

KRW

327,080

Providing guarantees (*)

Commerce and Industry Energy Co., Ltd.

IBK and others

Land, buildings, structures and machinery

KRW

87,257

Collateral for borrowings

Cash and cash equivalents

KRW

6,890

Gyeongju Wind Power Co., Ltd.

Korea Development Bank and others

Property, plant and equipment and others

KRW

33,764

Collateral for borrowings

Existing or expected trade receivables and others

KRW

3,100

Cash and cash equivalents

KRW

3,945

Qatrana Electric Power Company

The Islamic Development Bank and others

Finance Lease receivable and property, plant and equipment and others

JOD

53,311

Collateral for borrowings

KST Electric Power Company

Scotiabank Inverlat, S.A

Finance Lease receivable and others

USD

332,850

Collateral for borrowings

(*)

The Company provided the financial institutions with shares of Gyeonggi Green Energy Co., Ltd., one of its subsidiaries, as collateral related to long-term borrowings. Additionally, pledge for shares, pledge for transfer of rights of long-term borrowings, pledge for insurance claims and other pledges were established.

The Company has W1,200 million of project loans from Korea Resource Corporation as of March 31, 2016. The Company has provided a blank check as repayment guarantee.

(5)

The Company temporarily suspended operations of the Gangneung hydroelectric generating plant, with a carrying amount of W99,702 million, to improve the quality of water used in generating electricity. The expenses related to the suspension of operations of W106 million and depreciation on the utility plant of W1,670 million are recorded to other expenses for the three-month period ended March 31, 2016.

166

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

(6)

Due to the Korean government’s announcement of suspension of operation in the Gaeseong Industrial District, it is uncertain if the Company can exercise the property rights for the Company’s facility in the Gaeseong Industrial District as of March 31, 2016. The book value of facility is W21,147 million and the amount of trade receivables related to the companies residing in Gaeseong industrial complex is W4,886 million. The Company has entered into an insurance agreement covering up to W7,000 million with the Export-Import Bank of Korea related to Gaeseong industrial complex. The ultimate outcome of this event cannot be reasonably estimated.

50.

Subsequent Events

Subsequent to March 31, 2016, Korea Western Power Co., Ltd., a subsidiary of the Company, issued new debt securities for funding facilities and operations as follows:


In millions of won
Company Name	Type	Interest rate			Issued date		Maturity		Amounts

Korea Western Power Co., Ltd.	Short-term borrowings		1.64	%		2016.05.02		2016.07.22	W	20,000
			1.64	%		2016.05.02		2016.07.22		60,000
			1.64	%		2016.05.02		2016.07.22		30,000
			1.64	%		2016.05.02		2016.07.22		40,000

167

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2016

(Unaudited)

51.

Adjusted Operating Profit

The operating profit in the Company’s consolidated interim statements of comprehensive income prepared in accordance with K-IFRS included in this report differs from that in its consolidated interim statements of comprehensive income prepared in accordance with IFRS as issued by IASB. The table below sets forth a reconciliation of the Company’s results from operating activities as presented in the Company’s consolidated interim statements of comprehensive income prepared in accordance with K-IFRS for each of the three-month periods ended March 31, 2016 and 2015 to the operating profit or loss as presented in the Company’s consolidated interim statements of comprehensive income prepared in accordance with IFRS as issued by IASB for each of the corresponding years.


In millions of won	March 31, 2016			March 31, 2015
Operating profit on the consolidated interim statements of comprehensive income	W	3,605,347			2,239,866
Add
Other income
Reversal of other provisions		4,537			1,658
Reversal of other allowance for doubtful accounts		987			—
Government grants		36			10
Gains on assets contributed		1,328			2,212
Gains on liabilities exempted		3			2,337
Compensation and reparations revenue		24,130			52,537
Gains on electricity infrastructure development fund		—			143
Revenue from research contracts		834			3,137
Rental income		54,184			48,258
Others		6,263			7,073
Other gains
Gains on disposal of property, plant and equipment		18,598			17,915
Gains on foreign currency translation		8,791			3,933
Gains on foreign currency transaction		11,216			8,799
Others		49,412			51,727
Deduct
Other expenses
Accretion expenses of other provisions		(49	)		(44	)
Depreciation expenses on investment properties		(198	)		(162	)
Depreciation expenses on idle assets		(1,670	)		(1,666	)
Other bad debt expense		(3,945	)		(7,833	)
Donations		(11,661	)		(12,420	)
Others		(3,179	)		(1,012	)
Other losses
Losses on disposal of property, plant and equipment		(4,260	)		(12,355	)
Losses on disposal of intangible assets		(134	)		(5	)
Losses on foreign currency translation		(8,115	)		(9,278	)
Losses on foreign currency transaction		(19,935	)		(11,768	)
Others		(15,670	)		(23,074	)


Adjusted operating profit	W	3,716,850			2,359,988

168