Form 6-K
Table of Contents

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 September 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-            .


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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.


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QUARTERLY BUSINESS REPORT

(For the period from January 1, 2016 to June 30, 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.


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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:

 

  l   development of electric power resources;

 

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

 

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

 

  l   overseas business related to the businesses mentioned above;

 

  l   investment or contributions related to the businesses mentioned above;

 

  l   development and operation of certain real estate holdings; and

 

  l   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 June 30, 2016)

 

Classification

   Consolidated
subsidiaries
     Associates and joint ventures      Total  

Domestic

     21         57         78   

Overseas

     60         37         97   

Total

     81         94         175   


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5. Major changes in management for the second three-month period ended June 30, 2016

A. At the extraordinary meeting of shareholders of KEPCO held on April 25, 2016, Mr. Lee, Sung-Han was appointed as a standing director and a member of the audit committee in replacement of Mr. Ahn, Hong-Ryoul, whose term of office expired. On the same date, Mr. Cho, Jeon-Hyeok was reappointed as a non-standing director and a member of the audit committee.

B. On May 16, 2016, Mr. Kim, Ji-Hong was appointed as a non-standing director in the replacement of Mr. Ahn, Hyun-Ho, who voluntarily resigned on March 17, 2016.

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 a six-month period ended June 30, 2015 and 2016

(In billions of Won)

 

     January to June 2015      January to June 2016  
   Sales      Operating
profit
     Sales      Operating
profit
 

Electricity sales

     28,498         1,930         28,819         2,175   

Nuclear generation

     4,638         1,192         5,671         2,165   

Thermal generation

     10,710         1,034         10,270         1,982   

Others(*)

     1,485         164         1,474         195   

Subtotal

     45,331         4,320         46,234         6,517   

Adjustment for related-party transactions

     -16,535         8         -17,273         - 207   

Total

     28,796         4,328         28,961         6,310   

 

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

 

(*) Others relate to 75 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.”


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2. Changes in unit prices of major products

(In Won per kWh)

 

Business sector

  

Company

  

January to March

2016

  

January to June

2016

Electricity sold

   Residential    KEPCO    129.91    124.02
   Commercial       129.40    126.48
   Educational       104.21    106.94
   Industrial       107.91    103.64
   Agricultural       47.56    47.86
   Street lighting       108.89    114.05
   Overnight usage       72.86    67.77

Electricity from nuclear generation

   Nuclear Generation    KHNP    75.93    65.08

Electricity from thermal generation

   Thermal generation    KOSEP    81.66    71.39
      KOMIPO    92.88    81.70
      KOWEPO    98.86    86.68
      KOSPO    100.14    86.14
      EWP    98.06    87.00

3. Power purchase from generation companies for the six-month period ended June 30, 2016

 

Company

   Volume
(MWh)
     Expense
(In billions of Won)
 

KHNP

     84,441,535         5,584   

KOSEP

     32,960,248         2,354   

KOMIPO

     21,022,889         1,719   

KOWEPO

     22,925,975         1,988   

KOSPO

     21,279,364         1,833   

EWP

     23,111,784         2,009   

Others

     49,724,715         4,782   

Total

     255,466,510         20,269   

 

Excludes expense related to the renewable portfolio standard provisions and emission trading system.


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4. Intellectual property as of June 30, 2016

 

   

Patents

 

Utility

models

 

Designs

 

Trademarks

 

Total

 

Domestic

 

Overseas

     

Domestic

 

Overseas

 

KEPCO

  1,804   175   96   73   125   44   2,317

Consolidated subsidiaries

  3,635   567   747   98   258   16   5,321

Total

  5,439   742   843   171   383   60   7,638

III. Financial Information

1. Condensed consolidated financial results as of and for a six-month period ended June 30, 2015 and 2016

(In billions of Won)

 

Consolidated statements of

comprehensive income

    

Consolidated statements of

financial position

 
     January
to June
2015
     January
to June
2016
     Change
(%)
          December 31,
2015
     June 30,
2016
     Change
(%)
 

Sales

     28,796         28,961         0.6      

Total assets

     175,257         175,191         0.0   

Operating profit

     4,328         6,310         45.8      

Total liabilities

     107,315         105,551         -1.6   

Net income

     2,565         3,931         53.2      

Total equity

     67,942         69,640         2.5   


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2. Condensed separate financial results as of and for the six-month period ended June 30, 2015 and 2016

(In billions of Won)

 

Separate statements of

comprehensive income

    

Separate statements of

financial position

 
     January
to June

2015
     January
to June

2016
     Change
(%)
    

 

   December 31,
2015
     June 30,
2016
     Change
(%)
 

Sales

     28,498         28,819         1.1      

Total assets

     106,306         103,638         -2.5   

Operating profit

     1,931         2,175         12.7      

Total liabilities

     53,125         50,062         -5.8   

Net income

     1,929         2,448         26.9      

Total equity

     53,181         53,576         0.7   

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 7 standing directors including president, and more than 8 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 a six-month period ended June 30, 2016

 

Number of

meetings

  

Number of

agendas

  

Classification

     

Resolutions

  

Results

  

Reports

  

Results

10

   37    31    Approved as proposed    6    Accepted as reported

 

* The audit committee held 6 meetings with 24 agendas (of which, 14 were resolved as proposed and 10 were approved as reported).


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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   
   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 contribution to a special purpose company for solar power project in Hokkaido, Japan      Approved as proposed         Resolution   
   Composition of and approval of standards for examining candidates for the Director Nomination Committee to recommend 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 the Act on the Control and Supervision on Nuclear Power Suppliers, etc. for the Prevention of Corruption in the Nuclear Power Industry      Accepted as reported         Report   


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Date

  

Agenda

   Results    Type
February 29, 2016    Approval of amendments to the Electricity Usage Agreement and Rules for Operation    Approved as proposed    Resolution
   Approval of the Statement of Appropriation of fiscal year 2015 retained earnings    Approved as proposed    Resolution
March 18, 2016    Approval of Agreement on Management Performance Assessment for the President    Approved as proposed    Resolution
   Approval of the establishment of a new organization    Approved as proposed    Resolution
   Approval of amendments to the Electricity Usage Agreement and Rules for Operation    Approved as proposed    Resolution
   Approval of liquidation of Dolphin, an associate located in Nigeria    Approved as proposed    Resolution
   Composition of and approval of standards for examining candidates for the Director Nomination Committee to recommend candidates for non-standing directors    Approved as proposed    Resolution
   Auditor’s report to the board of directors for 2015    Accepted as reported    Report
April 8, 2016    Recommendation of candidates for the Audit Committee    Approved as proposed    Resolution
   Approval to call for the extraordinary meeting of shareholders for the fiscal year 2016    Approved as proposed    Resolution
April 15, 2016    Approval of amendments to the Articles of Incorporation    Approved as proposed    Resolution
   Approval of the establishment of a new organization    Approved as proposed    Resolution
   Approval of amendments to the regulation for employee remuneration and welfare    Approved as proposed    Resolution


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Date

  

Agenda

   Results    Type

April 29, 2016

   Approval of adoption of proposal of merit-based annual salary for state-owned corporations and amendments to the regulation for remuneration and welfare    Approved as proposed    Resolution

May 20, 2016

   Approval to establish and contribute to a Special Purpose Company for solar energy business in schools, one of the Government’s top ten energy industry initiatives    Approved as proposed    Resolution
   Approval to establish electricity vehicle charging infrastructure    Approved as proposed    Resolution
   Approval of long-term plan for power transmission and distribution network    Approved as proposed    Resolution
   Approval to transfer KEPCO’s shares in KEPCO Energy Resource Nigeria, Ltd (KERNL) to ERL    Approved as proposed    Resolution
   Report on results of external and internal audits for the first quarter of 2016    Accepted as reported    Report

June 17, 2016

   Approval to establish and contribute to a Special Purpose Company for energy efficiency business, Government’s top ten energy industry initiatives    Conditional approved

as proposed

   Resolution
   Approval to finance the new energy industry fund and operating company    Deferred    -
   Approval to modify capital budget for fiscal year 2016 to finance a Special Purpose Company for the new energy industry fund and energy efficiency business    Deferred    -
   Approval of mid-to-long term financial management plan (2016-2020)    Approved as proposed    Resolution

June 24, 2016

   Approval to contribute to the new energy industry fund and operating company    Accepted as revised    Resolution
   Approval to modify capital budget for fiscal year 2016    Accepted as revised    Resolution


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

 

Date

  

Agenda

  Ahn,
Choong-

Yong
  Lee,
Kang-
Hee
  Cho,
Jeon-
Hyeok
  Choi,
Ki-
Ryun
  Sung,
Tae-
Hyun
  Koo,
Ja-
Yoon
  Ahn,
Hyun-
Ho(*)
  Kim,
Joo-
Suen
  Kim,
Ji-
Hong(*)
January 5, 2016    Approval to close the shareholders’ registry for extraordinary general meeting of shareholders   For   For   For   For   For   For   Absence   For   -
   Approval to call for the extraordinary general meeting of shareholders for the fiscal year 2016   For   For   For   For   For   For   Absence   For   -
February 19, 2016    Approval of the maximum aggregate amount of remuneration for directors in 2016   For   For   For   For   For   For   For   For   -
   Approval of consolidated and separate financial statements for the fiscal year 2015   For   For   For   For   For   For   For   For   -
   Approval to call for the annual general meeting of shareholders for the fiscal year 2015   For   For   For   For   For   For   For   For   -
   Approval of contribution to a special purpose company for solar power project in Hokkaido, Japan   For   For   For   For   For   For   For   For   -
   Composition of and approval of standards for examining candidates for the Director Nomination Committee to recommend candidates for a standing director and member of the Audit Committee   For   For   For   For   For   For   For   For   -
   Approval to close the shareholders’ registry for extraordinary general meeting of shareholders   For   For   For   For   For   For   For   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 the Act on the Control and Supervision on Nuclear Power Suppliers, etc. for the Prevention of Corruption in the Nuclear Power Industry   Agenda for Report


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Date

  

Agenda

  Ahn,
Choong-

Yong
  Lee,
Kang-
Hee
  Cho,
Jeon-
Hyeok
  Choi,
Ki-
Ryun
  Sung,
Tae-
Hyun
  Koo,
Ja-
Yoon
  Ahn,
Hyun-
Ho(*)
  Kim,
Joo-
Suen
  Kim,
Ji-
Hong(*)

February 29, 2016

   Approval of amendments to the Electricity Usage Agreement and Rules for Operation   For   For   Absence   For   Absence   For   For   For   -
   Approval of the Statement of Appropriation of fiscal year 2015 retained earnings   For   For   Absence   For   Absence   For   For   For   -

March 18, 2016

   Approval of Agreement on Management Performance Assessment for the President   For   For   Absence   For   For   Absence   Resigned   For   -
   Approval of the establishment of a new organization   For   For   Absence   For   For   Absence   -   For   -
   Approval of amendments to the Electricity Usage Agreement and Rules for Operation   For   For   Absence   For   For   Absence   -   For   -
   Approval of liquidation of Dolphin, an associate located in Nigeria   For   For   Absence   For   For   Absence   -   For   -
   Composition of and approval of standards for examining candidates for the Director Nomination Committee to recommend candidates for non-standing directors   For   For   Absence   For   For   Absence   -   For   -
   Auditor’s report to the board of directors for 2015   Agenda for Report


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Date

  

Agenda

  Ahn,
Choong-

Yong
  Lee,
Kang-
Hee
  Cho,
Jeon-
Hyeok
  Choi,
Ki-
Ryun
  Sung,
Tae-
Hyun
  Koo,
Ja-
Yoon
  Ahn,
Hyun-
Ho(*)
  Kim,
Joo-
Suen
  Kim,
Ji-
Hong(*)

April 8, 2016

   Recommendation of candidates for the Audit Committee   For   For   Absence   For   Absence   For   -   For   -
   Approval to call for the extraordinary meeting of shareholders for the fiscal year 2016   For   For   Absence   For   Absence   For   -   For   -

April 15, 2016

   Approval of amendments to the Articles of Incorporation   For   For   For   For   Absence   For   -   For   -
   Approval of the establishment of a new organization   For   For   For   For   Absence   For   -   For   -
   Approval of amendments to the regulation for employee remuneration and welfare   For   For   For   For   Absence   For   -   For   -

April 29, 2016

   Approval of adoption of proposal of merit-based annual salary for state-owned corporations and amendments to the regulation for remuneration and welfare   For   For   For   For   Absence   For   -   For   -

May 20, 2016

   Approval to establish and contribute to a Special Purpose Company for solar energy business in schools, one of the Government’s top ten energy industry initiatives   For   For   Absence   For   For   Absence   -   For   For
   Approval to establish electricity vehicle charging infrastructure   For   For   Absence   For   For   Absence   -   For   For
   Approval of long-term plan for power transmission and distribution network   For   For   Absence   For   For   Absence   -   For   For
   Approval to transfer KEPCO’s shares in KEPCO Energy Resource Nigeria, Ltd (KERNL) to ERL   For   For   Absence   For   For   Absence   -   For   For
   Report on results of external and internal audits for the first quarter of 2016   Agenda for Report


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Date

  

Agenda

  Ahn,
Choong-

Yong
  Lee,
Kang-
Hee
  Cho,
Jeon-
Hyeok
  Choi,
Ki-
Ryun
  Sung,
Tae-
Hyun
  Koo,
Ja-
Yoon
  Ahn,
Hyun-
Ho(*)
  Kim,
Joo-
Suen
  Kim,
Ji-
Hong(*)

June 17, 2016

   Approval to establish and contribute to a Special Purpose Company for energy efficiency business, Government’s top ten energy industry initiatives   For   For   For   For   For   For   -   For   For
   Approval to finance the new energy industry fund and operating company   Deferred
   Approval to modify capital budget for fiscal year 2016 to finance a Special Purpose Company for the new energy industry fund and energy efficiency business   Deferred
   Approval of mid-to-long term financial management plan (2016-2020)   For   For   For   For   For   For   -   For   For

June 24, 2016

   Approval to contribute to the new energy industry fund and operating company   For   Absence   Absence   For   Absence   For   -   For   For
   Approval to modify capital budget for fiscal year 2016   For   Absence   Absence   For   Absence   For   -   For   For
   Attendance Rate   100%   90%   50%   100%   60%   70%   66.7%   100%   100%

(*) Ahn, Hyun-Ho voluntarily resigned on March 17, 2016. Under Korean Law, Mr. Ahn had retained the rights and had been subject to obligations as a non-standing director until his successor, Kim, Ji-Hong was appointed on May 16, 2016.

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    Approved as proposed    Resolution
   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


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Date

  

Agenda

   Results    Type
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 controls over financial reporting for the fiscal year 2015    Accepted as reported    Report
   Evaluation report on internal controls 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 to 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 audit results for the consolidated and separate financial statements for the fiscal year 2015    Accepted as reported    Report


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Date

  

Agenda

   Results    Type
April 15, 2016    Auditor’s report on the agendas for the extraordinary general meeting of shareholders    Approved as proposed    Resolution
   Approval of selection of independent auditors of subsidiaries    Approved as proposed    Resolution
   Prior approval for non-audit services for consolidated subsidiaries by independent auditors    Approved as proposed    Resolution
   Report on the Form 20-F for the fiscal year 2015 to be filed with the U.S. Securities and Exchange Commission    Accepted as reported    Report
   Auditor’s report for fiscal year 2015 in accordance with U.S. accounting principles    Accepted as reported    Report
May 20, 2016    Approval to appoint the chairman of the Audit Committee    Approved as proposed    Resolution
   Prior approval for non-audit services for consolidated subsidiaries by independent auditors    Approved as proposed    Resolution
   Report on results of external and internal audits during the first quarter of 2016    Accepted as reported    Report
   Independent auditor’s report on the audit plans for the fiscal year 2016    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   
   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.


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VI. Directors and employees as of and for a six-month period ended June 30, 2016 (KEPCO Only)

1. Directors

(In thousands of Won)

 

Type

   Number of directors      Total
remuneration
     Average remuneration
per person
 

Standing director

     7         1,061,400         151,629   

Non-standing director

     8         107,704         13,463   

Total

     15         1,169,104         77,940   

2. Employees

(In thousands of Won)

 

Type

   Number of employees      Average             Average  
   Regular      Non-regular      Total      continuous
service year
     Total
salaries
     salaries
per person
 

Male

     16,727         284         17,011         19.2         694,470,640         40,825   

Female

     3,646         160         3,806         14.1         114,963,498         30,206   

Total

     20,373         444         20,817         18.3         809,434,138         38,883   


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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
     

Annual

General Meeting

held on

March 22, 2016

   Approval of financial statements for the fiscal year 2015    Approved as proposed
   Approval of the maximum aggregate amount of remuneration for directors in 2016    Approved as proposed

Extraordinary General Meeting

held on

April 25, 2016

  

Election of a standing director :

Lee, Sung-Han

   Approved as proposed
  

Election of a standing director and member of the Audit Committee :

Lee, Sung-Han

   Approved as proposed
  

Election of a non-standing director and member of the Audit Committee :

Cho, Jeon-Hyeok

   Approved as proposed

2. Pending legal proceedings as of June 30, 2016

(In billions of Won)

 

Type

   Number of lawsuits    Claim amount

Lawsuits where KEPCO and its subsidiaries are engaged as the defendants

   730    776

Lawsuits where KEPCO and its subsidiaries are engaged as the plaintiffs

   189    614

Some ongoing litigations were not included in the table above. Please refer to the contingencies and commitments part of notes to the following consolidated interim financial statements for details.


Table of Contents

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: September 9, 2016


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Financial Statements

June 30, 2016

(Unaudited)

(With Independent Auditors’ Review Report Thereon)


Table of Contents

INDEX TO FINANCIAL STATEMENTS

 

     Page  

Independent Auditors’ Review Report

     1   

Consolidated Interim Statements of Financial Position

     3   

Consolidated Interim Statements of Comprehensive Income

     5   

Consolidated Interim Statements of Changes in Equity

     7   

Consolidated Interim Statements of Cash Flows

     9   

Notes to the Consolidated Interim Financial Statements

     11   


Table of Contents

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 June 30, 2016, the consolidated interim statements of comprehensive income for the three and six-month periods ended June 30, 2016 and 2015, changes in equity and cash flows for the six-month periods ended June 30, 2016 and 2015 and notes, comprising a summary of significant accounting policies and other explanatory information.

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’.

Emphasis of Matters

Without qualifying our review report, we draw attention to the key audit matter of a build-to-order industry that was of significance in our review of the consolidated interim financial statements as of and for the six-month period ended June 30, 2016 in accordance with Practical Guide of Korean Standards on Auditing 2016-1. This matter was addressed in the context of our review of the consolidated interim financial statements as a whole, and in forming our review conclusion thereon, and we do not provide a separate conclusion on this matter.

Also, as stated above under “Auditors’ Review Responsibility”, our responsibility is to issue a report on these consolidated interim financial statements based on our reviews in accordance with the Review Standards for Quarterly and Semi-annual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. Accordingly, we have inquired primarily of persons responsible for financial and accounting matters, and applied analytical and other review procedures on the key audit matter of a build-to-order industry.

When the outcome of a construction contract can be estimated reliably, the Company recognizes contract revenue and costs based on the percentage-of-completion method at the end of the reporting period. Also, the gross amount due from customers for contract work is presented for all contracts in which costs incurred plus recognized profits exceed progress billings. The gross amount due to customers for contract work is presented for all contracts in which progress billings exceed costs incurred plus recognized profits.

Total contract revenue is measured based on an agreed contract price; however, it may fluctuate due to changes in construction during contract work. The measurement of contract revenue is affected by various uncertainties resulting unexpected future events. Total contract cost is estimated based on the future estimates such as material costs, labor costs and construction period. The uncertainty of estimated total contract costs and changes in such estimates have an impact on the completion progress and contract revenue.

 

1


Table of Contents

Considering the impacts from these uncertainty and changes in estimates on profit or loss for the current or future period, we identified the Company’s revenue recognition accounting policy utilizing the input method with uncertainty of estimated total contract costs, assessment of the percentage-of-completion and accounting for the variation of construction works as a significant risk.

We conducted the following review procedures regarding the Company’s accounting policy of revenue recognition utilizing the input method for the six-month period ended June 30, 2016:

 

  Inquiry of the accounting policy of revenue recognition and any changes, and significant changes to the contracts

 

  Analytical review of financial indicators such as contract price, estimated contract costs, cost ratio, ratio of amounts due from/to customers for contract work and others.

 

  Inquiry and analytical review of changes in major components of estimated contract costs

 

  Inquiry and analytical review of fluctuations in completion progress of contracts including contract price, accumulated contract cost and total contract cost

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

August 12, 2016

 

This report is effective as of August 12, 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.

 

2


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Financial Position

As of June 30, 2016 and December 31, 2015

(Unaudited)

 

In millions of won    Note      June 30,
2016
     December 31,
2015
 

Assets

        

Current assets

        

Cash and cash equivalents

     5,6,7,44       3,360,776         3,783,065   

Current financial assets, net

     5,10,11,12,44         2,078,484         5,335,621   

Trade and other receivables, net

     5,8,14,20,44,45,46         6,733,310         7,473,548   

Inventories, net

     13         5,029,808         4,946,413   

Income tax refund receivables

     40         10,025         9,081   

Current non-financial assets

     15         478,709         397,950   

Assets held-for-sale

     41         79,647         79,647   
     

 

 

    

 

 

 

Total current assets

        17,770,759         22,025,325   

Non-current assets

        

Non-current financial assets, net

     5,6,9,10,11,12,44         2,477,073         2,495,554   

Non-current trade and other receivables, net

     5,8,14,44,45,46         1,804,141         1,798,419   

Property, plant and equipment, net

     18,27,48         145,260,670         141,361,351   

Investment properties, net

     19,27         244,875         269,910   

Goodwill

     16         2,582         2,582   

Intangible assets other than goodwill, net

     21,27,45         906,084         855,832   

Investments in associates

     4,17         4,522,898         4,405,668   

Investments in joint ventures

     4,17         1,323,299         1,287,862   

Deferred tax assets

     40         752,896         623,623   

Non-current non-financial assets

     15         125,512         131,233   
     

 

 

    

 

 

 

Total non-current assets

        157,420,030         153,232,034   
     

 

 

    

 

 

 

Total Assets

     4         175,190,789         175,257,359   
     

 

 

    

 

 

 

 

(Continued)

 

3


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Financial Position, Continued

As of June 30, 2016 and December 31, 2015

(Unaudited)

 

In millions of won    Note      June 30,
2016
    December 31,
2015
 

Liabilities

       

Current liabilities

       

Trade and other payables, net

     5,22,24,44,46       4,617,300        4,735,697   

Current financial liabilities, net

     5,11,23,44,46         9,714,281        7,857,198   

Income tax payables

     40         1,779,908        2,218,060   

Current non-financial liabilities

     20,28,29         6,638,952        6,320,711   

Current provisions

     26,44         1,820,171        1,579,176   
     

 

 

   

 

 

 

Total current liabilities

        24,570,612        22,710,842   
     

 

 

   

 

 

 

Non-current liabilities

       

Non-current trade and other payables, net

     5,22,24,44,46         3,818,495        3,718,435   

Non-current financial liabilities, net

     5,11,23,44,46         46,227,263        51,062,811   

Non-current non-financial liabilities

     28,29         7,353,129        7,092,252   

Employee benefits liabilities, net

     25,44         1,982,272        1,503,107   

Deferred tax liabilities

     40         8,537,370        8,362,683   

Non-current provisions

     26,44         13,062,010        12,864,754   

Total non-current liabilities

        80,980,539        84,604,042   
     

 

 

   

 

 

 

Total Liabilities

     4       105,551,151        107,314,884   
     

 

 

   

 

 

 

Equity

       

Contributed capital

     1,30,44        

Share capital

      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

        16,418,167        22,862,164   
     

 

 

   

 

 

 
        49,870,351        48,187,241   
     

 

 

   

 

 

 

Other components of equity

     33        

Other capital surpluses

        1,197,128        1,197,388   

Accumulated other comprehensive loss

        (78,483     (98,713

Other equity

        13,294,973        13,294,973   
     

 

 

   

 

 

 
        14,413,618        14,393,648   
     

 

 

   

 

 

 

Equity attributable to owners of the Company

        68,337,547        66,634,467   
     

 

 

   

 

 

 

Non-controlling interests

     16, 32         1,302,091        1,308,008   
     

 

 

   

 

 

 

Total Equity

      69,639,638        67,942,475   
     

 

 

   

 

 

 

Total Liabilities and Equity

        175,190,789        175,257,359   
     

 

 

   

 

 

 

See accompanying notes to the consolidated interim financial statements.

 

4


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income

For the three and six-month periods ended June 30, 2016 and 2015

(Unaudited)

 

In millions of won, except per share information           June 30, 2016     June 30, 2015  
     Note      Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
 

Sales

     4,34,44,46            

Sales of goods

      12,155,550        26,657,484        12,264,491        26,497,475   

Sales of services

        74,098        177,728        121,583        216,371   

Sales of construction services

     20         945,481        1,927,326        1,192,576        1,897,085   

Revenue related to transfer of assets from customers

        100,295        198,213        93,176        184,754   
     

 

 

   

 

 

   

 

 

   

 

 

 
          13,275,424        28,960,751        13,671,826        28,795,685   
     

 

 

   

 

 

   

 

 

   

 

 

 

Cost of sales

     13,25,42,46            

Cost of sales of goods

        (9,005,798     (19,522,816     (9,783,228     (21,449,147

Cost of sales of services

        (111,863     (205,097     (115,545     (204,704

Cost of sales of construction services

        (861,011     (1,821,882     (1,132,526     (1,799,617
     

 

 

   

 

 

   

 

 

   

 

 

 
        (9,978,672     (21,549,795     (11,031,299     (23,453,468
     

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

        3,296,752        7,410,956        2,640,527        5,342,217   
     

 

 

   

 

 

   

 

 

   

 

 

 

Selling and administrative expenses

     25,35,42,46         (592,258     (1,101,115     (552,543     (1,014,367
     

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     4         2,704,494        6,309,841        2,087,984        4,327,850   

Other non-operating income

     36         103,010        195,312        96,330        213,695   

Other non-operating expense

     36         (31,888     (52,590     (16,980     (40,117

Other gains, net

     37         30,883        70,786        47,241        73,135   

Finance income

     5,11,38         207,714        379,446        275,466        448,373   

Finance expenses

     5,11,39         (610,604     (1,149,549     (783,041     (1,450,165

Profit related to associates, joint ventures and subsidiaries

     4,17            

Share in profit of associates and joint ventures

        28,274        214,055        38,653        246,207   

Gain on disposal of investments in associates and joint ventures

        52        52        —          —     

Gain on disposal of investments in subsidiaries

     16         —          —          —          5,866   

Share in loss of associates and joint ventures

        (27,352     (54,212     (12,170     (33,041

Loss on disposal of investments in associates and joint ventures

        (171     (171     —          —     
     

 

 

   

 

 

   

 

 

   

 

 

 
        803        159,724        26,483        219,032   
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit before income tax

        2,404,412        5,912,970        1,733,483        3,791,803   
     

 

 

   

 

 

   

 

 

   

 

 

 

Income tax expense

     40         (636,624     (1,982,349     (391,589     (1,226,802
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit for the period

      1,767,788        3,930,621        1,341,894        2,565,001   
     

 

 

   

 

 

   

 

 

   

 

 

 

 

(Continued)

 

5


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income, Continued

For the three and six-month periods ended June 30, 2016 and 2015

(Unaudited)

 

In millions of won, except per share information           June 30, 2016     June 30, 2015  
     Note      Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
 

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       (101,290     (201,861     45,646        (33,185

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

     31         (459     (643     1,472        1,230   

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         (4,694     22,476        32,552        22,905   

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

     5,11,33         43,282        30,478        (33,358     (21,360

Foreign currency translation of foreign operations, net of tax

     33         1,378        4,721        36,051        (15,962

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

     33         (43,811     (39,222     45,713        34,922   
     

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss), net of tax

        (105,594     (184,051     128,076        (11,450
     

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income for the period

      1,662,194        3,746,570        1,469,970        2,553,551   
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit or loss attributable to:

           

Owners of the Company

     43       1,726,467        3,861,917        1,305,183        2,505,266   

Non-controlling interests

        41,321        68,704        36,711        59,735   
     

 

 

   

 

 

   

 

 

   

 

 

 
      1,767,788        3,930,621        1,341,894        2,565,001   
     

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income attributable to:

           

Owners of the Company

      1,625,395        3,693,429        1,423,010        2,491,790   

Non-controlling interests

        36,799        53,141        46,960        61,761   
     

 

 

   

 

 

   

 

 

   

 

 

 
        1,662,194        3,746,570        1,469,970        2,553,551   
     

 

 

   

 

 

   

 

 

   

 

 

 

Earnings per share

     43            

Basic and diluted earnings per share

      2,689        6,016        2,034        3,903   

See accompanying notes to the consolidated interim financial statements.

 

6


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity

For the six-month periods ended June 30, 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, 2015

   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

     —           2,505,266        —          2,505,266        59,735        2,565,001   

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

             

Remeasurements of defined benefit liability, net of tax

     —           (33,575     —          (33,575     390        (33,185

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

     —           1,230        —          1,230        —          1,230   

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

     —           —          22,905        22,905        —          22,905   

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

     —           —          (17,875     (17,875     (3,485     (21,360

Foreign currency translation of foreign operations, net of tax

     —           —          (21,083     (21,083     5,121        (15,962

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

     —           —          34,922        34,922        —          34,922   

Transactions with owners of the Company, recognized directly in equity

             

Dividends paid

     —           (320,982     —          (320,982     (56,352     (377,334

Issuance of share capital by subsidiaries and others

     —           —          2,865        2,865        6,382        9,247   

Equity transaction within consolidated scope

     —           —          44,107        44,107        9,591        53,698   

Changes in consolidated scope

     —           —          —          —          (1,547     (1,547

Dividends paid (hybrid securities)

     —           —          —          —          (8,182     (8,182

Others

     —           —          —          —          (1,157     (1,157
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2015

     4,053,578         37,455,586        14,309,947        55,819,111        1,234,175        57,053,286   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(Continued)

 

7


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity, Continued

For the six-month periods ended June 30, 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

     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

     —           3,861,917        —          3,861,917        68,704        3,930,621   

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

             

Remeasurements of defined benefit liability, net of tax

     —           (188,083     —          (188,083     (13,778     (201,861

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

     —           (635     —          (635     (8     (643

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

     —           —          22,477        22,477        (1     22,476   

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

     —           —          30,486        30,486        (8     30,478   

Foreign currency translation of foreign operations, net of tax

     —           —          6,493        6,493        (1,772     4,721   

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

     —           —          (39,226     (39,226     4        (39,222

Transactions with owners of the Company, recognized directly in equity

             

Dividends paid

     —           (1,990,089     —          (1,990,089     (68,099     (2,058,188

Issuance of shares of capital by subsidiaries and others

     —           —          (260     (260     14,815        14,555   

Changes in consolidation scope

     —           —          —          —          2,453        2,453   

Dividends paid (hybrid securities)

     —           —          —          —          (8,227     (8,227
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2016

   4,053,578         49,870,351        14,413,618        68,337,547        1,302,091        69,639,638   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

See accompanying notes to the consolidated interim financial statements.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Cash Flows

For the six-month periods ended June 30, 2016 and 2015

(Unaudited)

 

In millions of won    June 30,
2016
    June 30,
2015
 

Cash flows from operating activities

    

Profit for the period

     3,930,621        2,565,001   
  

 

 

   

 

 

 

Adjustments for:

    

Income tax expense

     1,982,349        1,226,802   

Depreciation

     4,247,987        4,003,612   

Amortization

     37,421        37,647   

Employee benefit expense

     172,046        153,924   

Bad debt expense

     14,550        —     

Reversal of allowance for bad debt

     —          (4,488

Interest expense

     881,259        1,078,463   

Loss on sale of financial assets

     —          2,983   

Loss on disposal of property, plant and equipment

     3,232        1,720   

Loss on abandonment of property, plant, and equipment

     185,261        123,390   

Impairment loss on property, plant and equipment

     —          4,757   

Loss on disposal of intangible assets

     138        5   

Accretion expense to provisions, net

     701,038        796,511   

Loss (gain) on foreign currency translation, net

     (45,699     246,856   

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

     47,307        (211,224

Share in income of associates and joint ventures, net

     (159,843     (213,166

Gain on sale of financial assets

     (1,480     —     

Gain on disposal of property, plant and equipment

     (29,958     (96,769

Gain on disposal of intangible assets

     —          (32

Gain on disposal of associates and joint ventures

     (52     —     

Loss on disposal of associates and joint ventures

     171        —     

Gain on disposal of investments in subsidiaries

     —          (5,866

Interest income

     (132,521     (105,008

Dividend income

     (9,995     (13,564

Impairment loss on available-for-sale securities

     93        13,993   

Others, net

     23,973        (945
  

 

 

   

 

 

 
     7,917,277        7,039,601   
  

 

 

   

 

 

 

Changes in:

    

Trade receivables

     944,568        1,088,488   

Non-trade receivables

     (210,067     (8,699

Accrued income

     (148,170     (45,056

Other receivables

     4,631        (279

Other current assets

     (228,884     22,890   

Inventories

     (415,405     (599,374

Other non-current assets

     (25,486     (42,396

Trade payables

     (772,771     (1,700,352

Non-trade payables

     142,366        100,075   

Accrued expenses

     588,683        45,201   

Other payables

     —          22   

Other current liabilities

     577,089        963,614   

Other non-current liabilities

     399,562        127,768   

Investments in associates and joint ventures

     46,851        37,903   

Provisions

     (523,884     (414,474

Payments of employee benefit obligations

     (23,704     (14,844

Plan assets

     (2,176     305   
  

 

 

   

 

 

 
     353,203        (439,208
  

 

 

   

 

 

 

 

(Continued)

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Cash Flows, Continued

For the six-month periods ended June 30, 2016 and 2015

(Unaudited)

 

In millions of won    June 30,
2016
    June 30,
2015
 

Cash generated from operating activities

    

Dividends received

   10,681        13,564   

Interest paid

     (1,016,999     (1,120,011

Interest received

     107,571        80,705   

Income taxes paid

     (2,293,616     (514,632
  

 

 

   

 

 

 

Net cash from operating activities

     9,008,738        7,625,020   
  

 

 

   

 

 

 

Cash flows from investing activities

    

Proceeds from disposals of associates and joint ventures

     10,942        —     

Acquisition of associates and joint ventures

     (93,700     (67,886

Proceeds from disposals of property, plant and equipment

     30,490        6,589,066   

Acquisition of property, plant and equipment

     (7,458,658     (7,799,359

Proceeds from disposals of intangible assets

     134        163   

Acquisition of intangible assets

     (48,213     (33,945

Proceeds from disposals of financial assets

     4,842,813        142,562   

Acquisition of financial assets

     (1,499,610     (1,629,993

Increase in loans

     (165,654     (109,534

Collection of loans

     67,324        47,743   

Increase in deposits

     (238,624     (156,985

Decrease in deposits

     96,147        119,476   

Receipt of government grants

     17,065        10,153   

Usage of government grants

     (19,470     (18,943

Net cash inflow from business acquisitions

     2,480        553   

Other cash inflow from investing activities, net

     19,175        15,016   
  

 

 

   

 

 

 

Net cash used in investing activities

     (4,437,359     (2,891,913
  

 

 

   

 

 

 

Cash flows from financing activities

    

Proceeds from short-term borrowings, net

     29,775        323,645   

Proceeds from long-term borrowings and debt securities

     883,008        2,124,045   

Repayment of long-term borrowings and debt securities

     (3,872,266     (4,783,278

Payment of finance lease liabilities

     (59,439     (55,242

Settlement of derivative instruments, net

     56,358        3,713   

Change in non-controlling interest

     14,264        72,316   

Dividends paid (hybrid bond)

     (8,227     (8,182

Dividends paid

     (2,058,188     (377,334

Other cash outflow from financing activities, net

     (523     (2,437
  

 

 

   

 

 

 

Net cash used in financing activities

     (5,015,238     (2,702,754
  

 

 

   

 

 

 

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

     (443,859     2,030,353   

Effect of exchange rate fluctuations on cash held

     21,570        23,785   
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     (422,289     2,054,138   

Cash and cash equivalents at January 1

       3,783,065        1,796,300   
  

 

 

   

 

 

 

Cash and cash equivalents at June 30

   3,360,776        3,850,438   
  

 

 

   

 

 

 

See accompanying notes to the consolidated interim financial statements.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

June 30, 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 KEPCO listed its Depository Receipts (DR) on the New York Stock Exchange on October 27, 1994. KEPCO’s head office is located in Naju, Jeollanam-do.

As of June 30, 2016, KEPCO’s share capital amounts to ₩3,209,820 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, 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.

 

(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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 carryforward 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 (refer to note 25).

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 2016 and 2015 are ₩1,121,003 million and ₩1,302,371 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 consolidated financial statements are the same as those applied by the Company in its consolidated 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.

 

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Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

3. Significant Accounting Policies, Continued

 

(3) Investments in associates, continued

 

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’ (refer to 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.

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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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

   10 ~ 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

4. Segment, Geographic and Other Information, Continued

 

(2) Financial information of the segments for the three and six-month periods ended June 30, 2016 and 2015, respectively, are as follows:

 

In millions of won  

June 30, 2016

 

Segment

  Total
segment revenue
    Intersegment revenue     Revenue from external
customers
    Operating profit (loss)     Depreciation and
Amortization
    Interest Income     Interest expense     Profit related to associates, joint
ventures, and subsidiaries
 
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
 

Transmission and distribution

    13,252,820        28,818,959        503,673        783,099        12,749,147        28,035,860        1,886,287        2,175,110        754,787        1,504,430        15,341        48,035        210,533        448,060        15,518        161,629   

Electric power generation (Nuclear)

    2,361,674        5,671,350        2,330,565        5,635,465        31,109        35,885        481,597        2,164,923        768,880        1,556,168        9,546        17,744        118,522        237,043        (641     (821

Electric power generation (Non-Nuclear)

    4,034,310        10,269,793        3,776,853        9,810,464        257,457        459,329        291,196        1,982,176        579,222        1,182,031        7,051        15,519        76,269        160,185        (15,842     (2,107

Plant Maintenance & engineering service

    628,315        1,189,569        518,465        1,000,500        109,850        189,069        78,355        136,257        24,766        49,448        2,363        5,736        922        1,412        1,768        1,023   

Others

    146,323        284,525        18,462        43,917        127,861        240,608        35,196        58,697        6,882        15,030        21,768        55,283        23,058        46,821        —          —     

Consolidation adjustments

    (7,148,018     (17,273,445     (7,148,018     (17,273,445     —          —          (68,137     (207,322     (11,467     (21,699     (3,867     (9,796     (6,280     (12,262     —          —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  13,275,424        28,960,751        —          —          13,275,424        28,960,751        2,704,494        6,309,841        2,123,070        4,285,408        52,202        132,521        423,024        881,259        803        159,724   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
In millions of won  

June 30, 2015

 

Segment

  Total
segment revenue
    Intersegment revenue     Revenue from external
customers
    Operating profit (loss)     Depreciation and
Amortization
    Interest Income     Interest expense     Profit related to associates, joint
ventures, and subsidiaries
 
    Three-
month
period
ended
    Six-
month
period

ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
 

Transmission and distribution

    13,561,560        28,498,239        313,577        610,732        13,247,983        27,887,507        2,124,786        1,930,620        706,033        1,410,193        21,292        31,862        281,603        583,719        44,215        214,247   

Electric power generation (Nuclear)

    1,902,260        4,638,420        1,896,788        4,630,737        5,472        7,683        (3,327     1,192,216        725,525        1,462,841        6,086        13,094        149,585        299,171        (55     (713

Electric power generation (Non-Nuclear)

    4,085,679        10,709,496        3,928,265        10,341,346        157,414        368,150        (183,626     1,033,762        572,605        1,134,531        5,397        11,066        78,141        160,470        (16,831     5,544   

Plant Maintenance & engineering service

    616,499        1,170,215        479,572        893,785        136,927        276,430        74,239        130,854        20,133        40,031        2,398        5,422        32        71        (846     (46

Others

    162,603        314,232        38,573        58,317        124,030        255,915        18,398        32,899        6,493        13,536        27,616        53,138        24,557        45,066        —          —     

Consolidation adjustments

    (6,656,775     (16,534,917     (6,656,775     (16,534,917     —          —          57,514        7,499        (10,469     (19,873     (7,274     (9,574     (8,111     (10,034     —          —     
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
    13,671,826        28,795,685        —          —          13,671,826        28,795,685        2,087,984        4,327,850        2,020,320        4,041,259        55,515        105,008        525,807        1,078,463        26,483        219,032   
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

36


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

4. Segment, Geographic and Other Information, Continued

 

(3) Information related to segment assets and segment liabilities as of and for the six-month period ended June 30, 2016 and as of and for the year ended December 31, 2015 are as follows:

 

In millions of won       

June 30, 2016

 

Segment

   Segment assets      Investments in
associates and
joint ventures
     Acquisition of
non-current
assets
     Segment liabilities  

Transmission and distribution

     103,637,617         4,465,501         4,212,995         50,061,642   

Electric power generation (Nuclear)

     52,138,260         16,904         1,236,340         27,685,996   

Electric power generation (Non-nuclear)

     45,466,902         1,309,114         1,997,382         25,482,154   

Plant maintenance & engineering service

     3,043,560         54,678         84,431         1,241,987   

Others

     6,584,546         —           70,832         2,407,724   

Consolidation adjustments

     (35,680,096      —           (95,109      (1,328,352
  

 

 

    

 

 

    

 

 

    

 

 

 

Consolidated totals

   175,190,789         5,846,197         7,506,871         105,551,151   
  

 

 

    

 

 

    

 

 

    

 

 

 
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

   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

   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)  
     June 30, 2016      June 30, 2015      June 30,
2016
     December 31,
2015
 

Geographical unit

   Three-
month
period
ended
     Six-
month
period

ended
     Three-
month
period

ended
     Six-
month
period

ended
       

Domestic

   12,254,627         26,835,890         12,378,120         26,685,740         148,030,969         143,788,043   

Overseas (*1)

     1,020,797         2,124,861         1,293,706         2,109,945         4,354,951         4,526,395   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     13,275,424         28,960,751         13,671,826         28,795,685         152,385,920         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.

 

37


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

4. Segment, Geographic and Other Information, Continued

 

(5) Information on significant customers

There is no individual customer comprising more than 10% of the Company’s revenue for the six-month periods ended June 30, 2016 and 2015.

 

5. Classification of Financial Instruments

 

(1) Classification of financial assets as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 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

   —           3,360,776         —           —           —           3,360,776   

Current financial assets

                 

Held-to-maturity investments

     —           —           —           351         —           351   

Derivative assets

     26,295         —           —           —           80,645         106,940   

Other financial assets

     —           1,971,193         —           —           —           1,971,193   

Trade and other receivables

     —           6,733,310         —           —           —           6,733,310   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     26,295         12,065,279         —           351         80,645         12,172,570   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Non-current assets

                 

Non-current financial assets

                 

Available-for-sale financial assets

     —           —           1,033,110         —           —           1,033,110   

Held-to-maturity investments

     —           —           —           3,194         —           3,194   

Derivative assets

     241,050         —           —           —           216,192         457,242   

Other financial assets

     —           983,527         —           —           —           983,527   

Trade and other receivables

     —           1,804,141         —           —           —           1,804,141   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     241,050         2,787,668         1,033,110         3,194         216,192         4,281,214   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     267,345         14,852,947         1,033,110         3,545         296,837         16,453,784   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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

   —           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   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

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

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

38


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

5. Classification of Financial Instruments, Continued

 

(2) Classification of financial liabilities as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 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

   —           1,144,234         —           1,144,234   

Debt securities

     —           8,563,072         —           8,563,072   

Derivative liabilities

     6,062         —           913         6,975   

Trade and other payables

     —           4,617,300         —           4,617,300   
  

 

 

    

 

 

    

 

 

    

 

 

 
     6,062         14,324,606         913         14,331,581   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-current liabilities

           

Borrowings

     —           1,615,496         —           1,615,496   

Debt securities

     —           44,446,151         —           44,446,151   

Derivative liabilities

     16,574         —           149,042         165,616   

Trade and other payables

     —           3,818,495         —           3,818,495   
  

 

 

    

 

 

    

 

 

    

 

 

 
     16,574         49,880,142         149,042         50,045,758   
  

 

 

    

 

 

    

 

 

    

 

 

 
     22,636         64,204,748         149,955         64,377,339   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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

   —           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   
  

 

 

    

 

 

    

 

 

    

 

 

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

 

 

    

 

 

    

 

 

    

 

 

 

 

39


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

5. Classification of Financial Instruments, Continued

 

(3) Classification of comprehensive income from financial instruments for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won         June 30, 2016     June 30, 2015  
          Three-
month
period

ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
 

Cash and cash equivalents

  

Interest income

     17,856        38,539        13,297        25,188   

Available-for-sale financial assets

  

Dividends income

     628        9,995        8,107        13,564   
  

Impairment loss on available-for-sale financial assets

     (93     (93     (8,172     (13,993
  

Gain (loss) on disposal of available-for-sale financial assets

     —          1,480        (2,008     (2,983
  

Interest income

     —          —          —          29   

Held-to-maturity investments

  

Interest income

     29        54        24        48   

Loans and receivables

  

Interest income

     7,163        14,101        4,400        11,174   

Trade and other receivables

  

Interest income

     18,414        49,475        29,484        54,465   

Short-term financial instruments

  

Interest income

     6,406        25,457        5,668        8,532   

Long-term financial instruments

  

Interest income

     2,334        4,895        2,643        5,572   

Financial assets at fair value through profit or loss

  

Gain on valuation of derivatives

     86,384        38,717        30,540        60,905   
  

Gain (loss) on transaction of derivatives

     (4,338     (6,170     472        2,138   

Derivative assets (using hedge accounting)

  

Gain (loss) on valuation of derivatives (profit or loss)

     27,884        (18,170     69,806        84,005   
  

Gain (loss) on valuation of derivatives (equity, before tax) (*)

     32,543        20,507        (32,598     (19,588
  

Gain (loss) on transaction of derivatives

     (146     2,656        354        1,419   

Financial liabilities carried at amortized cost

  

Interest expense of borrowings and debt securities

     (286,005     (607,014     (350,453     (729,657
  

Interest expense of trade and other payables

     (17,103     (33,506     (24,211     (45,120
  

Interest expense of others

     (119,916     (240,739     (151,143     (303,686
  

Gain (loss) on foreign currency transactions and translations

     (106,918     9,319        (198,642     (258,978

Financial liabilities at fair value through profit or loss

  

Gain (loss) on valuation of derivatives

     (7,233     (151     12,199        30,541   
  

Gain (loss) on transaction of derivatives

     5,146        7,277        (2,424     (4,209

Derivative liabilities (using hedge accounting)

  

Gain (loss) on valuation of derivatives (profit or loss)

     20,822        (19,956     39,586        41,443   
  

Gain (loss) on valuation of derivatives (equity, before tax) (*)

     42,788        32,553        (25,460     (11,723
  

Loss on transaction of derivatives

     (51,510     (51,510     (1,618     (5,018

 

(*) 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.

 

40


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

6. Restricted Deposits

Restricted deposits as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won         June 30, 2016      December 31, 2015  

Cash and cash equivalents

  

Escrow accounts

   111         4,828   
  

Deposits for government project

     6,258         5,839   
  

Collateral provided for borrowings

     32,005         6,839   
  

Collateral provided for lawsuit

     293         641   
  

Deposits for transmission regional support program

     5,682         204   
  

Pledge

     —           740   

Non-current available-for-sale financial asset

  

Decommissioning costs of nuclear power plants

     409,581         —     

Short-term financial instruments

  

Bidding guarantees

     118         —     
  

Restriction on withdrawal related to ‘win-win growth program’ for small and medium enterprises

     33,000         18,000   

Long-term financial instruments

  

Guarantee deposits for checking account

     2         2   
  

Guarantee deposits for banking accounts at oversea branches

     330         333   
  

Decommissioning costs of nuclear power plants

     243,300         652,700   
  

Collateral provided for borrowings

     —           20   
  

Funds for developing small and medium enterprises (*1)

     100,000         100,000   
     

 

 

    

 

 

 
        830,680         790,146   
     

 

 

    

 

 

 

 

(*1) Deposits for small and medium enterprise at IBK for construction of Bitgaram Energy Valley and support for the businesses as of June 30, 2016.

 

7. Cash and Cash Equivalents

Cash and cash equivalents as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Cash

   114         109   

Other demand deposit

     1,510,021         1,309,396   

Short-term deposits classified as cash equivalents

     437,276         374,575   

Short-term investments classified as cash equivalents

     1,413,365         2,098,985   
  

 

 

    

 

 

 
     3,360,776         3,783,065   
  

 

 

    

 

 

 

 

41


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

8. Trade and Other Receivables

 

(1) Trade and other receivables as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Gross
amount
     Allowance for
doubtful accounts
     Present value
discount
     Book
value
 

Current assets

           

Trade receivables

     6,070,576         (59,016      (24      6,011,536   

Other receivables

     775,403         (51,734      (1,895      721,774   
  

 

 

    

 

 

    

 

 

    

 

 

 
     6,845,979         (110,750      (1,919      6,733,310   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-current assets

           

Trade receivables

     440,928         —           —           440,928   

Other receivables

     1,404,460         (34,911      (6,336      1,363,213   
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,845,388         (34,911      (6,336      1,804,141   
  

 

 

    

 

 

    

 

 

    

 

 

 
   8,691,367         (145,661      (8,255      8,537,451   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

In millions of won    December 31, 2015  
     Gross
amount
     Allowance for
doubtful accounts
     Present value
discount
     Book
value
 

Current assets

           

Trade receivables

   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   
  

 

 

    

 

 

    

 

 

    

 

 

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

 

 

    

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

8. Trade and Other Receivables, Continued

 

(2) Other receivables as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Gross
amount
     Allowance for
doubtful accounts
     Present value
discount
     Book
value
 

Current assets

           

Non-trade receivables

   400,192         (51,734      —           348,458   

Accrued income

     122,347         —           —           122,347   

Deposits

     188,823         —           (1,895      186,928   

Finance lease receivables

     12,486         —           —           12,486   

Others

     51,555         —           —           51,555   
  

 

 

    

 

 

    

 

 

    

 

 

 
     775,403         (51,734      (1,895      721,774   
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-current assets

           

Non-trade receivables

     84,625         (26,398      —           58,227   

Accrued income

     2,013         —           —           2,013   

Deposits

     309,694         —           (6,336      303,358   

Finance lease receivables

     930,548         —           —           930,548   

Others

     77,580         (8,513      —           69,067   
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,404,460         (34,911      (6,336      1,363,213   
  

 

 

    

 

 

    

 

 

    

 

 

 
     2,179,863         (86,645      (8,231      2,084,987   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

In millions of won    December 31, 2015  
     Gross
amount
     Allowance for
doubtful accounts
     Present value
discount
     Book
value
 

Current assets

           

Non-trade receivables

   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   
  

 

 

    

 

 

    

 

 

    

 

 

 
     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.

 

43


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

8. Trade and Other Receivables, Continued

 

(3) Aging analysis of trade receivables as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Trade receivables: (not overdue, not impaired)

   6,375,157         7,198,403   
  

 

 

    

 

 

 

Trade receivables: (overdue, not impaired)

     1,465         891   
  

 

 

    

 

 

 

Less than 60 days

     1,465         891   
  

 

 

    

 

 

 

Trade receivables: (impairment reviewed)

     134,882         110,478   
  

 

 

    

 

 

 

60 ~ 90 days

     32,995         31,973   

90 ~ 120 days

     15,758         11,010   

120 days ~ 1 year

     45,448         35,097   

Over 1 year

     40,681         32,398   
  

 

 

    

 

 

 
     6,511,504         7,309,772   

Less: allowance for doubtful accounts

     (59,016      (51,956

Less: present value discount

     (24      (14
  

 

 

    

 

 

 
     6,452,464         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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Other receivables: (not overdue, not impaired)

   1,938,787         1,918,132   
  

 

 

    

 

 

 

Other receivables: (overdue, not impaired)

     32,547         20,249   
  

 

 

    

 

 

 

Less than 60 days

     32,547         20,249   
  

 

 

    

 

 

 

Other receivables: (impairment reviewed)

     208,529         176,443   
  

 

 

    

 

 

 

60 ~ 90 days

     17,139         2,409   

90 ~ 120 days

     5,720         10,097   

120 days ~ 1 year

     33,713         21,433   

Over 1 year

     151,957         142,504   
  

 

 

    

 

 

 
     2,179,863         2,114,824   

Less: allowance for doubtful accounts

     (86,645      (91,746

Less: present value discount

     (8,231      (8,913
  

 

 

    

 

 

 
     2,084,987         2,014,165   
  

 

 

    

 

 

 

 

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Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

8. Trade and Other Receivables, Continued

 

(5) Changes in the allowance for doubtful accounts for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  
     Trade receivables      Other receivables      Trade receivables      Other receivables  

Beginning balance

   51,956         91,746         80,644         67,932   

Bad debt expense

     15,728         850         1,308         18,473   

Write-off

     (8,090      (760      (28,978      (888

Reversal

     (500)         (5,786      (1,018      (413

Others

     (78      595         —           6,642   
  

 

 

    

 

 

    

 

 

    

 

 

 

Ending balance

     59,016         86,645         51,956         91,746   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets

 

(1) Changes in available-for-sale financial assets for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Beginning
balance
     Acquisition      Disposal     Valuation     Impairment      Others     Ending
balance
 
Listed:                  

Korea District Heating Corp.

     130,410         —           —          16,981        —           —          147,391   

Kwanglim Co., Ltd. (*1)

     262         —           (214     598        —           (646     —     

Ssangyong Motor Co., Ltd.

     299         —           —          (29     —           —          270   

Sungjee Construction. Co., Ltd.

     5         —           —          25        —           —          30   

Korea Line Corp.

     —           —           —          —          —           —          —     

Namkwang Engineering & Construction Co., Ltd.

     1         —           —          —          —           —          1   

Pumyang Construction Co., Ltd.

     —           —           —          —          —           —          —     

ELCOMTEC Co., Ltd.

     53         —           —          59        —           —          112   

PAN ocean Co., Ltd.

     6         —           —          —          —           —          6   

Borneo International Furniture Co., Ltd.

     103         —           —          —          —           —          103   

TONGYANG Inc. (*1)

     217         —           (44     25        —           (198     —     

TONGYANG networks Inc. (*1)

     6         —           (3     —          —           (3     —     

Nexolon Co., Ltd. (*1)

     3,196         —           (3,137     569        —           (628     —     

PT Adaro Energy Tbk

     21,012         —           —          15,096        —           —          36,108   

Energy Fuels Inc.

     5,926         —           —          (1,720     —           275        4,481   

Cockatoo Coal Limited

     42         —           —          —          —           —          42   

Denison Mines Corp.

     34,457         —           —          518        —           2,261        37,236   

Fission 3.0

     30         —           —          (10     —           3        23   

Fission Uranium Corp.

     554         —           —          (93     —           36        497   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 
     196,579         —           (3,398     32,019        —           1,100        226,300   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Unlisted:

                 

K&C - Gyeongnam youth job creation Investment Fund

     1,207         —           —          —          —           —          1,207   

Korea investment – Korea EXIM 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         —           (814     —          —           —          41   

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         (331     —          —           —          4,423   

Construction Guarantee

     805         —           —          (1     —           —          804   

Plant & Mechanical Contractors Financial Cooperative of Korea

     36         —           —          —          —           —          36   

Fire Guarantee

     20         —           —          —          —           —          20   

Korea Software Financial Cooperative

     301         3,000         —          —          —           —          3,301   

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   

Korea investment – Investment Pool for Public funds 10

     —           142,470         —          67        —           —          142,537   

Samsung investment – Investment Pool for Public funds 2

     —           213,710         —          101        —           —          213,811   

Samsung investment – Investment Pool for Public funds 1

     —           53,220         —          13        —           —          53,233   

 

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Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(1) Changes in available-for-sale financial assets for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows, continued:

 

In millions of won    June 30, 2016  
     Beginning
balance
     Acquisition      Disposal      Valuation      Impairment     Others     Ending
balance
 

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   

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

     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   

DALIM 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   

 

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Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(1) Changes in available-for-sale financial assets for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows, continued:

 

In millions of won    June 30, 2016  
     Beginning
balance
     Acquisition      Disposal      Valuation      Impairment     Others      Ending
balance
 

Shin-E P&C Co., Ltd.

   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         —           —           —           —          1         22   

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   

Shin Pyung Co., Ltd.

     —           —           —           —           —          3         3   

JMC Heavy Industries Co., Ltd.

     —           —           —           —           —          25         25   

Najin Steel Co., Ltd.

     —           —           —           —           —          5         5   

Kunyang Food Co., Ltd.

     —           —           —           —           —          1         1   

Sinkwang Industry Co., Ltd.

     —           —           —           —           —          5         5   

Join Land Co., Ltd.

     —           —           —           —           —          1         1   

Crystal Co., Ltd.

     —           —           —           —           —          2         2   

Elephant & Friends Co., Ltd.

     —           —           —           —           —          3         3   

Mireco Co., Ltd.

     —           —           —           —           —          11         11   

L&K Industry Co., Ltd.

     —           —           —           —           —          24         24   

JO Tech Co., Ltd.

     —           —           —           —           —          25         25   

Samwoo EMC Co., Ltd.

     —           —           —           —           —          117         117   

Kendae Printing Co., Ltd.

     —           —           —           —           —          21         21   

Golden Tech Co., Ltd.

     —           —           —           —           —          114         114   

Dauning Co., Ltd.

     —           —           —           —           —          6         6   

Korea Trecision Co., Ltd.

     —           —           —           —           —          5         5   

Buhmwoo Chemical Corp.

     —           —           —           —           —          20         20   

Ace Track Co., Ltd.

     —           —           —           —           —          219         219   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(1) Changes in available-for-sale financial assets for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows, continued:

 

In millions of won    June 30, 2016  
     Beginning
balance
     Acquisition      Disposal     Valuation      Impairment     Others     Ending
balance
 

Daebok Machinery Co., Ltd.

   —           —           —          —           —          11        11   

Yooah Industry Co., Ltd.

     —           —           —          —           —          13        13   

Yoo-A Construction Co., Ltd.

     —           —           —          —           —          11        11   

Dung Hwan Co., Ltd.

     —           —           —          —           —          5        5   

Dongjin Metal Co., Ltd.

     —           —           —          —           —          27        27   

Ultra Construction and Engineering Co., Ltd.

     —           —           —          —           —          —          —     

Hurim Biocell Co., Ltd.

     —           —           —          —           —          5        5   

P. J, Trading Co., LTd.

     —           —           —          —           —          —          —     

Sunjin Power Tech Co., Ltd.

     —           —           —          —           —          247        247   

Smart Power Co.,Ltd.

     —           200         —          —           —          —          200   

Areva nc Expansion

     170,118         —           —          —           —          1,989        172,107   

Navanakorn Electric Co., Ltd.

     17,951         —           —          —           —          (112     17,839   

PT. Kedap Saayq

     —           —           —          —           —          —          —     

Set Holding

     179,585         —           —          —           —          —          179,585   

PT. Cirebon Energi Prasarana

     635         721         —          —           —          (27     1,329   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 
     387,900         417,006         (1,145     180         (93     2,962        806,810   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 
     584,479         417,006         (4,543     32,199         (93     4,062        1,033,110   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

 

(*1) The Company recognized gain on disposal of available-for-sale financial assets amounted to ₩1,480 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 six-month period ended June 30, 2016.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(1) Changes in available-for-sale financial assets for the six-month period ended June 30, 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.

     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 – Korea EXIM 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   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(1) Changes in available-for-sale financial assets for the six-month period ended June 30, 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.

   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     —           —     

DALIM 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   

 

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Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(1) Changes in available-for-sale financial assets for the six-month period ended June 30, 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.

   —           —           —          —          —          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   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     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 ₩4 million and ₩3,008 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(2) Available-for-sale financial assets as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Shares      Ownership     Acquisition cost      Book value      Fair value  

Listed

             

Korea District Heating Corp.

     2,264,068         19.55   173,201         147,391         147,391   

Ssangyong Motor Co., Ltd.

     38,568         0.03     428         270         270   

Sungjee Construction. Co., Ltd.

     1,053         0.01     49         30         30   

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         112         112   

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         36,108         36,108   

Energy Fuels Inc.

     1,711,814         3.79     16,819         4,481         4,481   

Cockatoo Coal Limited

     49,881,423         0.07     18,445         42         42   

Denison Mines Corp.

     58,284,000         11.24     84,134         37,236         37,236   

Fission 3.0

     300,000         0.17     —           23         23   

Fission Uranium Corp.

     800,000         0.21     785         497         497   
       

 

 

    

 

 

    

 

 

 
          365,761         226,300         226,300   
       

 

 

    

 

 

    

 

 

 

Unlisted (*1)

             

K&C - Gyeongnam youth job creation Investment Fund

     24         10.00     1,207         1,207         —     

Korea investment – Korea EXIM 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     41         41         —     

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     4,423         4,423         —     

Construction Guarantee (*2)

     571         0.02     601         804         804   

Plant & Mechanical Contractors Financial Cooperative of Korea

     50         0.01     36         36         —     

Fire Guarantee

     40         0.02     20         20         —     

Korea Software Financial Cooperative

     5,186         1.54     3,301         3,301         —     

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         —     

Korea investment – Investment Pool for Public funds 10

     138,458,847,197         13.12     142,470         142,537         142,537   

Samsung investment – Investment Pool for Public funds 2

     211,418,226,426         8.26     213,710         213,811         213,811   

Samsung investment – Investment Pool for Public funds 1

     53,220,000,000         8.87     53,220         53,233         53,233   

Hwan Young Steel Co., Ltd.

     10,916         0.14     1,092         97         —     

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         —     

 

53


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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(2) Available-for-sale financial assets as of June 30, 2016 and December 31, 2015 are as follows, continued:

 

In millions of won    June 30, 2016  
     Shares      Ownership     Acquisition cost      Book value      Fair value  

HANKOOK Silicon Co., Ltd.

     3,005,208         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         —     

Miju Steel Mfg. Co., Ltd.

     99,804         0.23     51         51         —     

BnB Sungwon Co., Ltd.

     589         0.07     15         15         —     

Hana Civil Engineering Co., Ltd.

     23         0.00     1         1         —     

KC Development Co., Ltd.

     839         0.02     6         6         —     

IMHWA Corp.

     329         0.11     5         5         —     

DALIM Special Vehicle Co., Ltd.

     58         0.08     10         10         —     

ASA JEONJU Co., Ltd.

     34,846         1.34     697         69         —     

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         —     

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         —     

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(2) Available-for-sale financial assets as of June 30, 2016 and December 31, 2015 are as follows, continued:

 

In millions of won    June 30, 2016  
     Shares      Ownership     Acquisition cost      Book value      Fair value  

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         —     

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.

     54         0.02     22         22         —     

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         —     

Shin Pyung Co., Ltd.

     6         0.03     3         3         —     

JMC Heavy Industries Co., Ltd.

     2,484         0.09     25         25         —     

Najin Steel Co., Ltd.

     37         0.06     5         5         —     

Kunyang Food Co., Ltd.

     104         0.03     1         1         —     

Sinkwang Industry Co., Ltd.

     1,091         1.68     5         5         —     

Join Land Co., Ltd.

     33         0.00     1         1         —     

Crystal Co., Ltd.

     22         0.07     2         2         —     

Elephant & Friends Co., Ltd.

     563         0.61     3         3         —     

Mireco Co., Ltd.

     109         0.25     11         11         —     

L&K Industry Co., Ltd.

     1,615         0.60     24         24         —     

JO Tech Co., Ltd.

     1,263         0.62     25         25         —     

Samwoo EMC Co., Ltd.

     23,465         0.20     117         117         —     

Kendae Printing Co., Ltd.

     422         0.60     21         21         —     

Golden Tech Co., Ltd.

     1,143         3.25     114         114         —     

Dauning Co., Ltd.

     231         0.41     6         6         —     

Korea Trecision Co., Ltd.

     22         0.45     5         5         —     

Buhmwoo Chemical Corp.

     392         1.80     20         20         —     

Ace Track Co., Ltd.

     3,131         1.08     219         219         —     

Daebok Machinery Co., Ltd.

     109         1.08     11         11         —     

Yooah Industry Co., Ltd.

     130         0.02     13         13         —     

Yoo-A Construction Co., Ltd.

     105         0.20     11         11         —     

Dung Hwan Co., Ltd.

     531         0.02     5         5         —     

Dongjin Metal Co., Ltd.

     136         0.33     27         27         —     

Ultra Construction and Engineering Co., Ltd.

     13         0.00     —           —           —     

Hurim Biocell Co., Ltd.

     113         0.00     5         5         —     

P. J, Trading Co., LTd.

     12         0.04     —           —           —     

Sunjin Power Tech Co., Ltd.

     4,941         0.92     247         247         —     

Smart Power Co.,Ltd.

     133,333         5.55     200         200         —     

Areva nc Expansion

     1,077,124         13.49       288,443         172,107         —     

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(2) Available-for-sale financial assets as of June 30, 2016 and December 31, 2015 are as follows, continued:

 

In millions of won    June 30, 2016  
     Shares      Ownership     Acquisition cost      Book value      Fair value  

Navanakorn Electric Co., Ltd. (*3)

     4,442,800         29.00   16,646         17,839         —     

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         1,329         —     
       

 

 

    

 

 

    

 

 

 
          1,008,248         806,810         589,970   
       

 

 

    

 

 

    

 

 

 
          1,374,009         1,033,110         816,270   
       

 

 

    

 

 

    

 

 

 

 

(*1) Book values of unlisted equity securities held by the Company that a quoted market price does not exist in an active market and fair value cannot be measured reliably were measured at cost.
(*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 six-month period ended June 30, 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 six-month period ended June 30, 2016.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(2) Available-for-sale financial assets as of June 30, 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     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 – Korea EXIM Bank CERs Private Special Asset InvestmentTrust 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         —     

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(2) Available-for-sale financial assets as of June 30, 2016 and December 31, 2015 are as follows, continued:

 

In millions of won    December 31, 2015  
     Shares      Ownership     Acquisition cost      Book value      Fair value  

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         —     

Hana Civil Engineering Co., Ltd.

     23         0.00     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         —           —     

DALIM 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         —     

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

9. Available-for-sale Financial Assets, Continued

 

(2) Available-for-sale financial assets as of June 30, 2016 and December 31, 2015 are as follows, continued:

 

In millions of won    December 31, 2015  
     Shares      Ownership     Acquisition cost      Book value      Fair value  

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         —     

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   
       

 

 

    

 

 

    

 

 

 
          961,313         584,479         376,969   
       

 

 

    

 

 

    

 

 

 

 

(*1) Book values of unlisted equity securities held by the Company that a quoted market price does not exist in an active market and fair value cannot be measured reliably were measured at cost.
(*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 year ended December 31, 2015.
(*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 year ended December 31, 2015.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

10. Held-to-maturity Investments

Held-to-maturity investments as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Beginning balance      Acquisition      Disposal     Others     Ending
balance
 

Government bonds

     3,623         82         (160     —          3,545   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 
   3,623         82         (160     —          3,545   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Current

   380         —           (93     64        351   

Non-current

     3,243         82         (67     (64     3,194   
In millions of won    December 31, 2015  
     Beginning balance      Acquisition      Disposal     Others     Ending
balance
 

Government bonds

   3,601         432         (410     —          3,623   

Corporate bonds

     13         —           —          (13     —     
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 
   3,614         432         (410     (13     3,623   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

 

Current

   265         —           (186     301        380   

Non-current

     3,349         432         (224     (314     3,243   

 

11. Derivatives

 

(1) Derivatives as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  
     Current      Non-current      Current      Non-current  

Derivative assets

           

Currency forward

   1,085         25,992         1,498         24,896   

Currency swap

       105,855         426,922         95,759         491,219   

Interest rate swap

     —           4,328         —           3,778   
  

 

 

    

 

 

    

 

 

    

 

 

 
   106,940         457,242         97,257         519,893   
  

 

 

    

 

 

    

 

 

    

 

 

 

Derivative liabilities

           

Currency forward

   3,023         2,121         1,142         —     

Currency swap

     913         71,033         758         66,976   

Interest rate swap

     3,039         92,462         8,345         89,289   
  

 

 

    

 

 

    

 

 

    

 

 

 
   6,975         165,616         10,245         156,265   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

11. Derivatives, Continued

 

(2) Currency forward contracts which are not designated as hedge instruments as of June 30, 2016 are as follows:

 

In millions of won and thousands of foreign currencies                   

Counterparty

   Contract
Date
     Maturity
date
   Contract amounts      Contract
exchange rate
         Pay      Receive     

KEB Hana Bank

     2014.04.10       2021.07.12      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

Bank of America

     2014.04.29       2021.07.12      105,400       USD   100,000       1,054.00

KEB Hana Bank

     2014.05.09       2021.07.12      104,600       USD 100,000       1,046.00

Standard Chartered

     2016.06.07       2016.07.19      4,390       USD 3,772       1,163.78

JP Morgan

     2016.06.20       2016.07.15      27,741       USD 23,816       1,164.77

KEB Hana Bank

     2016.06.02       2016.07.26      1,224       USD 1,030       1,187.80

Woori Bank

     2016.06.07       2016.08.01      27,822       USD 23,886       1,164.77

Credit Suisse

     2016.06.02       2016.07.04      3,569       USD 3,000       1,189.60

Credit Suisse

     2016.06.24       2016.07.26      5,901       USD 5,000       1,180.20

Mizuho Bank

     2016.06.09       2016.07.11      4,637       USD 4,000       1,159.14

Mizuho Bank

     2016.06.27       2016.07.27      2,371       USD 2,000       1,185.66

Mizuho Bank

     2016.06.30       2016.07.29      11,538       USD 10,000       1,153.84

Morgan Stanley

     2016.06.22       2016.07.22      5,784       USD 5,000       1,156.88

Morgan Stanley

     2016.06.28       2016.07.28      2,367       USD 2,000       1,183.32

Nova Scotia

     2016.06.10       2016.07.11      11,637       USD 10,000       1,163.72

Nova Scotia

     2016.06.23       2016.07.25      11,519       USD 10,000       1,151.90

Standard Chartered

     2016.06.03       2016.07.05      11,874       USD 10,000       1,187.39

Standard Chartered

     2016.06.20       2016.07.19      11,646       USD 10,000       1,164.55

Standard Chartered

     2016.06.29       2016.07.29      2,338       USD 2,000       1,169.18

Mizuho Bank

     2016.06.07       2016.07.11      3,489       USD 3,000       1,163.03

Mizuho Bank

     2016.06.09       2016.07.13      463       USD 400       1,156.73

Mizuho Bank

     2016.06.16       2016.07.20      2,340       USD 2,000       1,170.05

Mizuho Bank

     2016.06.17       2016.07.11    USD 341         397       1,163.03

Mizuho Bank

     2016.06.21       2016.07.11    USD 2,000         2,326       1,163.03

Standard Chartered

     2016.06.08       2016.07.11      2,317       USD 2,000       1,158.25

Standard Chartered

     2016.06.24       2016.07.27      4,592       USD 4,000       1,148.10

Standard Chartered

     2016.06.30       2016.08.05      2,312       USD 2,000       1,156.10

Nova Scotia

     2016.06.16       2016.07.20    USD 5,000         5,862       1,172.35

Nova Scotia

     2016.06.23       2016.07.27    USD 3,000         3,455       1,151.73

Nova Scotia

     2016.06.23       2016.08.29    USD 1,000         1,152       1,152.33

Nova Scotia

     2016.06.28       2016.07.29    USD 2,000         2,347       1,173.60

Nova Scotia

     2016.06.28       2016.08.31    USD 2,000         2,348       1,174.10

BNP Paribas

     2016.06.03       2016.07.07      1,188       USD 1,000       1,187.50

BNP Paribas

     2016.06.21       2016.07.25      1,158       USD 1,000       1,158.30

BNP Paribas

     2016.06.22       2016.07.07    USD 700         831       1,187.50

BNP Paribas

     2016.06.23       2016.07.27      3,452       USD 3,000       1,150.70

BNP Paribas

     2016.06.28       2016.07.07    USD 300         356       1,187.50

Nomura

     2016.06.29       2016.08.01    USD 3,000         3,494       1,164.50

Societe Generale

     2016.06.13       2016.07.15      4,691       USD 4,000       1,172.80

Credit Agricole

     2016.06.08       2016.07.11      2,314       USD 2,000       1,156.75

Credit Agricole

     2016.06.23       2016.07.11    USD 500         578       1,156.75

Credit Agricole

     2016.06.27       2016.07.29      2,360       USD 2,000       1,180.10

Credit Agricole

     2016.06.27       2016.07.29      2,357       USD 2,000       1,178.60

Credit Agricole

     2016.06.30       2016.07.29    USD 1,334         1,575       1,180.10

Credit Agricole

     2016.06.30       2016.07.29    USD 39         46       1,180.10

JP Morgan

     2016.06.30       2016.08.05      4,609       USD 4,000       1,152.35

Nova Scotia

     2016.06.29       2016.07.04      3,614       USD 3,100       1,165.67

Standard Chartered

     2016.06.23       2016.07.06      11,518       USD 10,000       1,151.75

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

11. Derivatives, Continued

 

(2) Currency forward contracts which are not designated as hedge instruments, as of June 30, 2016 are as follows, continued:

 

In millions of won and thousands of foreign currencies                   

Counterparty

   Contract
Date
     Maturity
date
   Contract amounts      Contract
exchange rate
         Pay      Receive     

Nonghyup Bank

     2016.06.24       2016.07.06          10,844       USD 9,300       1,165.99

Nova Scotia

     2016.06.24       2016.12.28      3,432       USD 3,000       1,143.90

Nova Scotia

     2016.06.22       2016.12.27      2,300       USD 2,000       1,149.80

Nova Scotia

     2016.06.22       2016.12.27      2,302       USD 2,000       1,150.80

Nova Scotia

     2016.06.22       2016.12.27      2,304       USD 2,000       1,151.80

Societe Generale

     2016.06.30       2017.01.05      5,780       USD 5,000       1,156.05

Societe Generale

     2016.06.08       2016.12.12      634       USD 548       1,156.40

Credit Suisse

     2016.06.08       2016.12.12      744       USD 643       1,156.60

Standard Chartered

     2016.06.08       2016.12.08      5,784       USD 5,000       1,156.70

BNP Paribas

     2016.06.30       2017.01.05      5,786       USD 5,000       1,157.10

Woori Bank

     2016.06.08       2016.12.12      3,472       USD 3,000       1,157.40

BNP Paribas

     2016.06.09       2016.12.13      1,903       USD 1,643       1,158.00

Citibank

     2016.06.09       2016.12.13      5,792       USD 5,000       1,158.30

Societe Generale

     2016.06.09       2016.12.13      5,770       USD 4,981       1,158.40

Credit Agricole

     2016.06.09       2016.12.13      5,793       USD 5,000       1,158.60

Societe Generale

     2016.06.20       2016.12.22      5,822       USD 5,000       1,164.40

Nova Scotia

     2016.06.20       2016.12.22      11,647       USD 10,000       1,164.74

Nova Scotia

     2016.06.20       2016.12.22      11,670       USD 10,000       1,166.95

BNP Paribas

     2016.06.20       2016.12.22      5,835       USD 5,000       1,167.00

Nomura

     2016.06.20       2016.12.22      5,837       USD 5,000       1,167.30

Societe Generale

     2016.06.17       2016.12.21      2,359       USD 2,015       1,170.60

BNP Paribas

     2016.06.17       2016.12.19      11,708       USD   10,000       1,170.80

Nova Scotia

     2016.06.24       2016.12.29      2,343       USD 2,000       1,171.50

Standard Chartered

     2016.06.24       2016.12.29      2,343       USD 2,000       1,171.55

Nova Scotia

     2016.06.24       2016.12.29      2,345       USD 2,000       1,172.50

Standard Chartered

     2016.06.24       2016.12.29      2,345       USD 2,000       1,172.55

Standard Chartered

     2016.06.28       2016.12.29      3,518       USD 3,000       1,172.60

Nova Scotia

     2016.06.28       2016.12.29      2,346       USD 2,000       1,173.20

Nova Scotia

     2016.06.24       2016.12.29      2,347       USD 2,000       1,173.50

Standard Chartered

     2016.06.24       2016.12.29      2,348       USD 2,000       1,173.90

Woori Bank

     2016.06.28       2016.12.30      2,348       USD 2,000       1,173.90

Nova Scotia

     2016.06.28       2016.12.29      2,348       USD 2,000       1,174.20

Woori Bank

     2016.06.28       2016.12.30      2,350       USD 2,000       1,174.90

Nova Scotia

     2016.06.28       2016.12.29      2,350       USD 2,000       1,175.20

Standard Chartered

     2016.05.25       2016.11.30      6,509       USD 5,500       1,183.50

Citibank

     2016.05.25       2016.11.28      2,626       USD 2,218       1,183.65

Credit Agricole

     2016.05.26       2016.11.30      2,959       USD 2,500       1,183.70

Nova Scotia

     2016.05.25       2016.11.28      2,370       USD 2,000       1,185.10

Nova Scotia

     2016.05.23       2016.11.25      2,371       USD 2,000       1,185.40

Nomura

     2016.05.25       2016.11.28      2,371       USD 2,000       1,185.50

BNP Paribas

     2016.05.25       2016.11.28      4,742       USD 4,000       1,185.60

Nomura

     2016.05.25       2016.11.28      2,371       USD 2,000       1,185.70

Nova Scotia

     2016.05.25       2016.11.28      2,372       USD 2,000       1,186.10

Credit Agricole

     2016.05.23       2016.11.23      3,037       USD 2,561       1,186.20

Nova Scotia

     2016.05.23       2016.11.25      2,373       USD 2,000       1,186.40

Citibank

     2016.06.03       2016.12.08      5,935       USD 5,000       1,186.90

Standard Chartered

     2016.06.03       2016.12.08      5,938       USD 5,000       1,187.60

Nova Scotia

     2016.06.02       2016.12.07      3,399       USD 2,860       1,188.50

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

11. Derivatives, Continued

 

(2) Currency forward contracts which are not designated as hedge instruments, as of June 30, 2016 are as follows, continued:

 

In millions of won and thousands of foreign currencies                   

Counterparty

   Contract
Date
     Maturity
date
   Contract amounts      Contract
exchange rate
         Pay      Receive     

Standard Chartered

     2016.06.30       2017.01.05      5,751       USD 5,000       1,150.10

KEB Hana Bank

     2015.08.26       2017.07.31    JPY 630,000           6,377       10.12

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

 

(3) Currency swap contracts which are not designated as hedge instruments as of June 30, 2016 are as follows:

 

In millions of won and thousands of foreign currencies  

Counterparty

   Contract year    Contract amount      Contract interest rate    Contract
exchange
rate
 
      Pay      Receive      Pay     Receive   

Deutsche Bank

   2013~2018      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   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

11. Derivatives, Continued

 

(3) Currency swap contracts which are not designated as hedge instruments as of June 30, 2016 are as follows, continued:

 

In millions of won and thousands of foreign currencies  

Counterparty

   Contract year    Contract amount      Contract interest rate    Contract
exchange
rate
 
      Pay      Receive      Pay     Receive   

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   

 

(4) Currency swap contracts which are designated as hedge instruments as of June 30, 2016 are as follows:

 

In millions of won and thousands of foreign currencies  

Counterparty

   Contract year    Contract amount      Contract interest rate    Contract
exchange
rate
 
      Pay      Receive      Pay    Receive   

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    USD   117,250       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

   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   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

11. Derivatives, Continued

 

(4) Currency swap contracts which are designated as hedge instruments as of June 30, 2016 are as follows, continued:

 

In millions of won and thousands of foreign currencies  

Counterparty

   Contract year    Contract amount      Contract interest rate    Contract
exchange
rate
 
      Pay      Receive      Pay    Receive   

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   

Standard Chartered

   2013~2018      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 June 30, 2016 are as follows:

 

In millions of won                 

Counterparty

   Contract year    Contract
amount
     Contract interest rate per annum
         Pay    Receive

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%

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.

 

65


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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

11. Derivatives, Continued

 

(6) Interest rate swap contracts which are designated as hedge instruments as of June 30, 2016 are as follows:

 

In thousands of U.S. dollars                 

Counterparty

   Contract year    Contract
amount
     Contract interest rate per annum
         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   101,367       3.98%~4.10%    6M USD Libor

SMBC

   2015~2033    USD 132,557       4.05%~4.18%    6M USD Libor

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 and six-month periods ended June 30, 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) (*)
 
     June 30, 2016     June 30, 2015     June 30, 2016     June 30, 2015     June 30, 2016     June 30, 2015  
     Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
     Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
    Three-
month
period
ended
     Six-
month
period
ended
    Three-
month
period
ended
    Six-
month
period
ended
 

Currency forward

   9,650        (925     35,910         38,786        (958     337        (7,376     (3,838     —           —          —          —     

Currency swap

     119,701        (2,138     111,290         179,857        (52,319     (49,841     2,935        (2,414     75,331         53,077        (58,058     (23,391

Interest rate swap

     (1,494     3,503        4,931         (1,749     2,429        1,757        1,225        582        —           (17     —          (7,920
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 
     127,857        440        152,131         216,894        (50,848     (47,747     (3,216     (5,670     75,331         53,060        (58,058     (31,311
  

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

 

(*) As of June 30, 2016, the net gain on valuation of derivatives using cash flow hedge accounting of ₩30,478 million, net of tax, is included in other comprehensive income or loss.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

12. Other Financial Assets

 

(1) Other financial assets as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  
     Current      Non-current      Current      Non-current  

Loans and receivables

   198,788         684,247         106,013         678,126   

Allowance for doubtful accounts

     —           (4,195      —           —     

Present value discount

     (1,021      (45,158      (859      (48,223

Long-term/short-term financial instruments

     1,773,426         348,633         5,132,829         758,037   
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,971,193         983,527         5,237,983         1,387,940   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(2) Loans and receivables as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Face value      Allowance for
doubtful accounts
     Present value
discount
     Book value  

Short-term loans and receivables

           

Loans for tuition

   28,012         —           (1,021      26,991   

Loans for housing

     12,100         —           —           12,100   

Fisheries loan

     3,376         —           —           3,376   

Other loans

     155,300         —           —           155,300   
  

 

 

    

 

 

    

 

 

    

 

 

 
     198,788         —           (1,021      197,767   
  

 

 

    

 

 

    

 

 

    

 

 

 

Long-term loans and receivables

           

Loans for tuition

     401,035         —           (44,915      356,120   

Loans for housing

     126,387         —           —           126,387   

Loans for related parties

     96,080         (4,195      —           91,885   

Fisheries loan

     1,344         —           (243      1,101   

Other loans

     59,401         —           —           59,401   
  

 

 

    

 

 

    

 

 

    

 

 

 
     684,247         (4,195      (45,158      634,894   
  

 

 

    

 

 

    

 

 

    

 

 

 
     883,035         (4,195      (46,179      832,661   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

In millions of won    December 31, 2015  
     Face value      Present value
discount
     Book value  

Short-term loans and receivables

        

Loans for tuition

   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   
  

 

 

    

 

 

    

 

 

 
     784,139         (49,082      735,057   
  

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

12. Other Financial Assets, Continued

 

(3) Changes in the allowance for doubtful accounts of Loans and receivables for the six-month period ended June 30, 2016 are as follows:

 

In millions of won    June 30, 2016  

Beginning balance

   —     

Bad debt expense

     4,258   

Other

     (63
  

 

 

 

Ending balance

     4,195   
  

 

 

 

 

(4) Long-term and short-term financial instruments as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  
     Current      Non-current      Current      Non-current  

Time deposits

   1,106,898         30,000         2,131,089         3   

ABCP

     560,468         187,700         2,598,791         5,000   

CP

     103,360         —           48,350         —     

CD

     —           —           163,649         —     

RP

     —           30,600         —           652,700   

Others

     2,700         100,333         190,950         100,334   
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,773,426         348,633         5,132,829         758,037   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

13. Inventories

 

   Inventories as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Acquisition cost      Valuation allowance      Book value  

Raw materials

     3,300,483         (1,238      3,299,245   

Work-in-progress

     109,136         —           109,136   

Finished goods

     64,684         —           64,684   

Supplies

     1,118,285         (4,311      1,113,974   

Inventories in transit

     433,424         —           433,424   

Other inventories

     9,345         —           9,345   
  

 

 

    

 

 

    

 

 

 
   5,035,357         (5,549      5,029,808   
  

 

 

    

 

 

    

 

 

 

 

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

Raw materials

   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   
  

 

 

    

 

 

    

 

 

 
     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 ₩1,584 million for the six-month period ended June 30, 2016. The allowance for loss on inventory valuation due to decreases in the net realizable value of inventory added to cost of sales was ₩533 million for the year ended December 31, 2015. The amounts of loss from inventory valuation included in other gains or losses were ₩1,467 million for the six-month period ended June 30, 2016 and ₩1,318 million for the year ended December 31, 2015, respectively.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 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    June 30, 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

   101,345         12,486         98,488         12,098   

1 ~ 5 years

     405,055         205,304         407,426         203,699   

More than 5 years

     1,618,733         725,244         1,689,281         738,011   
  

 

 

    

 

 

    

 

 

    

 

 

 
     2,125,133         943,034         2,195,195         953,808   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(3) There are no impaired finance lease receivables as of June 30, 2016 and December 31, 2015.

 

15. Non-Financial Assets

 

  Non-financial assets as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  
   Current      Non-current      Current      Non-current  

Advance payment

     141,199         21,188         102,842         25,172   

Prepaid expenses

     217,297         83,464         159,378         85,105   

Others (*)

     120,213         20,860         135,730         20,956   
  

 

 

    

 

 

    

 

 

    

 

 

 
     478,709         125,512         397,950         131,233   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(*) Details of others as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  
   Current      Non-current      Current      Non-current  

Tax refund receivables

   26,691         2,641         39,158         2,658   

Others

     93,522         18,219         96,572         18,298   
  

 

 

    

 

 

    

 

 

    

 

 

 
     120,213           20,860         135,730           20,956   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

16. Consolidated Subsidiaries

 

(1) Consolidated subsidiaries as of June 30, 2016 and December 31, 2015 are as follows:

 

Subsidiaries

  

Key operation activities

   Location    Percentage of ownership (%)  
         June 30,
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.

  

Resources 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

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

16. Consolidated Subsidiaries, Continued

 

(1) Consolidated subsidiaries as of June 30, 2016 and December 31, 2015 are as follows, continued:

 

Subsidiaries

  

Key operation activities

   Location    Percentage of ownership (%)  
         June 30,
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 2

  

Holding company

   KOREA      96.67     —     

Chitose Solar Power Plant LLC

  

Power generation

   JAPAN      80.10     —     

KEPCO Energy Solution Co. Ltd.

  

Energy service

   KOREA      100.00     —     

Solar School Plant Co., Ltd.

  

Power generation

   KOREA      100.00     —     

 

(*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 June 30, 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

16. Consolidated Subsidiaries, Continued

 

(2) There is no subsidiary excluded from consolidation for the six-month period ended June 30, 2016 and subsidiaries newly included in consolidation for the six-month period ended June 30, 2016 are as follows:

<Subsidiaries included in consolidation for the six-month periods ended June 30, 2016>

 

Subsidiary

  

Reason

Global One Carbon Private Equity Investment Trust 2

   Newly Established

Chitose Solar Power Plant LLC

   Newly Established

KEPCO Energy Solution Co. Ltd.

   Newly Established

Solar School Plant Co., Ltd.

   Newly Established

 

(3) Summary of financial information of consolidated subsidiaries as of and for the six-month period ended June 30, 2016 and as of and for the year ended December 31, 2015 are as follows:

 

In millions of won                            

June 30, 2016

 

Subsidiaries

   Total
assets
     Total
liabilities
     Sales      Profit (loss)
for the period
 

Korea Hydro & Nuclear Power Co., Ltd.

     52,138,260         27,685,996         5,671,351         1,480,259   

Korea South-East Power Co., Ltd.

     9,116,971         4,439,051         2,453,505         321,901   

Korea Midland Power Co., Ltd.

     8,542,945         5,170,165         1,811,452         206,073   

Korea Western Power Co., Ltd.

     9,529,838         5,750,355         2,044,892         305,520   

Korea Southern Power Co., Ltd.

     9,424,359         5,545,243         1,905,015         219,412   

Korea East-West Power Co., Ltd.

     8,852,789         4,577,340         2,054,928         354,938   

KEPCO Engineering & Construction Company, Inc.

     848,215         410,223         246,011         36,154   

KEPCO Plant Service & Engineering Co., Ltd.

     1,044,364         299,283         571,915         61,485   

KEPCO Nuclear Fuel Co., Ltd.

     702,054         352,322         157,276         18,735   

KEPCO KDN Co., Ltd.

     448,927         180,159         214,367         734   

Garolim Tidal Power Plant Co., Ltd.

     650         348         —           (7

KEPCO International HongKong Ltd.

     174,000         1         —           2,443   

KEPCO International Philippines Inc.

     108,884         606         —           29,002   

KEPCO Gansu International Ltd.

     17,279         536         —           (18

KEPCO Philippines Holdings Inc.

     124,158         1         —           4,749   

KEPCO Philippines Corporation

     13,826         127         —           10   

KEPCO Ilijan Corporation

     567,032         49,480         60,150         33,220   

KEPCO Lebanon SARL

     713         10,101         —           (41

KEPCO Neimenggu International Ltd.

     183,291         346         —           7,804   

KEPCO Shanxi International Ltd.

     555,066         224,686         —           12,041   

KOMIPO Global Pte Ltd.

     193,997         30         —           8,874   

KEPCO Canada Energy Ltd.

     59,585         35         —           16   

KEPCO Netherlands B.V.

     161,284         60         —           460   

KOREA Imouraren Uranium Investment Corp.

     228,213         241         —           1,123   

KEPCO Australia Pty., Ltd.

     521,957         2,659         1,989         586   

KOSEP Australia Pty., Ltd.

     19,176         1,435         2,065         1,007   

KOMIPO Australia Pty., Ltd.

     19,285         795         2,065         1,005   

KOWEPO Australia Pty., Ltd.

     19,690         1,066         2,065         992   

KOSPO Australia Pty., Ltd.

     18,113         816         2,065         715   

KEPCO Middle East Holding Company

     148,595         153,909         —           (2,186

Qatrana Electric Power Company

     524,896         405,459         9,801         11,723   

KHNP Canada Energy Ltd.

     29,151         32         —           (16

KEPCO Bylong Australia Pty., Ltd.

     203,339         253,154         —           4,172   

Korea Waterbury Uranium Limited Partnership

     20,994         31         —           (26

KEPCO Canada Uranium Investment Limited Partnership

     40,500         21         —           (12

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

16. Consolidated Subsidiaries, Continued

 

(3) Summary of financial information of consolidated subsidiaries as of and for the six-month period ended June 30, 2016 and as of and for the year ended December 31, 2015 are as follows, continued:

 

In millions of won                            

June 30, 2016

 

Subsidiaries

   Total
Assets
     Total
liabilities
     Sales      Profit (loss)
for the period
 

Korea Electric Power Nigeria Ltd.

   846         230         11,791         571   

KEPCO Holdings de Mexico

     267         21         —           247   

KST Electric Power Company

     575,039         530,042         44,086         7,309   

KEPCO Energy Service Company

     1,714         405         3,097         853   

KEPCO Netherlands S3 B.V.

     65,631         42         —           (62

PT. KOMIPO Pembangkitan Jawa Bali

     19,465         5,543         12,304         6,837   

PT. Cirebon Power Service

     3,153         1,054         3,561         258   

KOWEPO International Corporation

     —           —           —           —     

KOSPO Jordan LLC

     11,368         597         3,669         662   

EWP Philippines Corporation

     2,014         968         —           (25

EWP America Inc. (*)

     106,824         77,948         18,853         (3,580

KNF Canada Energy Limited

     1,983         26         —           (22

PT KEPCO Resource Indonesia

     1,052         17         —           (173

EWP Barbados 1 SRL

     259,169         325         1,478         200   

Gyeonggi Green Energy Co., Ltd.

     303,223         232,575         52,534         9,786   

PT. Tanggamus Electric Power

     132,988         119,560         22,247         (1,137

Gyeongju Wind Power Co., Ltd.

     62,308         27,123         4,071         1,375   

KOMIPO America Inc.

     12,781         2,343         —           (508

KOSEP USA, INC.

     33,433         7,527         3,140         (9,861

PT. EWP Indonesia

     1,612         —           —           686   

KEPCO Netherlands J3 B.V.

     120,672         65         —           (48

Korea Offshore Wind Power Co., Ltd.

     39,370         71         —           (1,439

Global One Pioneer B.V.

     10         20         —           (31

Global Energy Pioneer B.V.

     11         20         —           (31

Mira Power Limited

     119,943         76,705         —           (558

KOSEP Material Co., Ltd.

     22,852         23,045         99         (1,947

Commerce and Industry Energy Co., Ltd.

     99,338         86,792         14,871         (267

KEPCO Singapore Holdings Pte., Ltd.

     2,324         4         —           —     

KOWEPO India Private Limited

     893         10         —           —     

KEPCO KPS Philippines Corp.

     6,501         1,107         5,405         692   

KOSPO Chile SpA

     44         4,613         —           233   

PT. KOWEPO Sumsel Operation and Maintenance Services

     1,505         55         3,092         622   

HeeMang Sunlight Power Co., Ltd.

     7,216         3,389         2         (191

Fujeij Wind Power Company

     531         65         —           (272

KOSPO Youngnam Power Co., Ltd.

     170,585         91,308         —           (341

Global One Carbon Private Equity Investment Trust 2

     2,996         —           —           3   

Chitose Solar Power Plant LLC

     21,256         8,518         —           (45

KEPCO Energy Solution Co. Ltd.

     300,000         —           —           —     

Solar School Plant Co., Ltd.

       200,000         —           —           —     

 

(*) 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, California Power Holdings, LLC, and EWPRC Biomass Holdings, LLC.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

16. Consolidated Subsidiaries, Continued

 

(3) Summary of financial information of consolidated subsidiaries as of and for the six-month period ended June 30, 2016 and as of and for the year ended December 31, 2015 are as follows, continued:

 

In millions of won       

December 31, 2015

 

Subsidiaries

   Total
assets
     Total
liabilities
     Sales      Profit (loss)
for the period
 

Korea Hydro & Nuclear Power Co., Ltd.

     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

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

16. Consolidated Subsidiaries, Continued

 

(3) Summary of financial information of consolidated subsidiaries as of and for the six-month period ended June 30, 2016 and as of and for the year ended December 31, 2015 are as follows, continued:

 

In millions of won       

December 31, 2015

 

Subsidiaries

   Total
assets
     Total
liabilities
     Sales      Profit (loss)
for the period
 

KEPCO Netherlands J3 B.V.

     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, 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 ₩35 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 prior written consent of financial institutions.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

16. Consolidated Subsidiaries, Continued

 

(5) Details of non-controlling interest prior to intra-group eliminations as of and for the six-month period ended June 30, 2016 and as of and for the year ended December 31, 2015 are as follows:

 

In millions of won  

June 30, 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

     153,940        546,452        324,654        678,852        1,703,898   

Non-current assets

     413,092        497,912        523,561        2,115,697        3,550,262   

Current liabilities

     (13,390     (198,394     (290,684     (279,322     (781,790

Non-current liabilities

     (36,090     (100,889     (119,539     (1,682,196     (1,938,714

Net assets

     517,552        745,081        437,992        833,031        2,533,656   

Book value of non-controlling interest

     253,600        354,062        146,158        673,849        1,427,669   

Sales

     60,150        571,915        246,011        329,349        1,207,425   

Profit for the period

     33,220        61,485        36,154        52,858        183,717   

Profit for the period attributable to non-controlling interest

     16,278        29,218        12,065        12,978        70,539   

Cash flows from operating activities

     47,359        39,172        51,971        7,202        145,704   

Cash flows from investing activities

     (44     86,834        (3,794     (95,364     (12,368

Cash flows from financing activities before dividends to non-controlling interest

     (29,789     (39,911     (29,708     132,627        33,219   

Dividends to non-controlling interest

     (28,140     (36,139     (2,539     (9,508     (76,326

Effect of exchange rate fluctuation

     (234     (216     (460     (803     (1,713

Net increase (decrease) of cash and cash equivalents

     (10,848     49,740        15,470        34,154        88,516   
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

     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

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

16. Consolidated Subsidiaries, Continued

 

(6) Changes in goodwill

 

  (i) Details of goodwill as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Acquisition cost

     2,582         2,582   

Accumulated impairment

     —           —     
  

 

 

    

 

 

 

Carrying book value

   2,582         2,582   
  

 

 

    

 

 

 

 

  (ii) There are no changes in goodwill for the six-month period ended June 30, 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

   10,664   

Fair value of remaining shares after disposal

     13,860   
  

 

 

 

Total

     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

   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
  

 

 

 
     16,494   
  

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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

   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)

   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

   10,664   

Less: cash held by disposed subsidiaries

       (10,071
  

 

 

 

Net cash flow

   593   
  

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures

 

(1) Investments in associates and joint ventures as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won       

June 30, 2016

 

Investees

  

Key operation

activities

   Location      Percentage of
ownership
    Acquisition cost      Book
value
 

<Associates>

             

Daegu Green Power Co., Ltd.

  

Power generation

     KOREA         49.90   79,540         90,423   

Korea Gas Corporation (*1)

  

Importing and wholesaling LNG

     KOREA         20.47     94,500         2,181,562   

Korea Electric Power Industrial Development Co., Ltd.

  

Electricity metering

     KOREA         29.00     4,727         20,512   

YTN Co., Ltd.

  

Broadcasting

     KOREA         21.43     59,000         38,298   

Cheongna Energy Co., Ltd.

  

Generating and distributing vapor and hot/cold water

     KOREA         43.90     49,607         17,223   

Gangwon Wind Power Co., Ltd. (*2)

  

Power generation

     KOREA         15.00     5,725         12,724   

Hyundai Green Power Co., Ltd.

  

Power generation

     KOREA         29.00     88,885         111,524   

Korea Power Exchange (*6)

  

Management of power market

     KOREA         100.00     127,839         216,372   

AMEC Partners Korea Ltd. (*3)

  

Resources development

     KOREA         19.00     707         223   

Hyundai Energy Co., Ltd. (*9)

  

Power generation

     KOREA         29.00     30,118         3,700   

Ecollite Co., Ltd.

  

Artificial light-weight aggregate

     KOREA         36.10     1,516         —     

Taebaek Wind Power Co., Ltd.

  

Power generation

     KOREA         25.00     3,810         4,562   

TaebackGuinemi Wind Power Co., Ltd. (formerly, Muju Wind Power Co., Ltd.)

  

Power generation

     KOREA         25.00     3,420         3,099   

Pyeongchang Wind Power Co., Ltd.

  

Power generation

     KOREA         25.00     3,875         3,623   

Daeryun Power Co., Ltd. (*3, 10)

  

Power generation

     KOREA         13.13     25,477         32,844   

JinanJangsu Wind Power Co., Ltd.

  

Power generation

     KOREA         25.00     100         64   

Changjuk Wind Power Co., Ltd.

  

Power generation

     KOREA         30.00     3,801         6,605   

KNH Solar Co., Ltd.

  

Power generation

     KOREA         27.00     1,296         1,853   

SPC Power Corporation

  

Power generation

     PHILIPPINES         38.00     20,635         57,202   

Gemeng International Energy Co., Ltd.

  

Power generation

     CHINA         34.00     413,153         729,336   

PT. Cirebon Electric Power

  

Power generation

     INDONESIA         27.50     40,365         66,146   

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         —     

PT Wampu Electric Power

  

Power generation

     INDONESIA         46.00     21,292         19,734   

PT. Bayan Resources TBK

  

Resources development

     INDONESIA         20.00     615,860         508,511   

S-Power Co., Ltd.

  

Power generation

     KOREA         49.00     132,300         127,620   

Pioneer Gas Power Limited (*8)

  

Power generation

     INDIA         40.00     49,831         50,618   

Eurasia Energy Holdings

  

Power generation and resources development

     RUSSIA         40.00     461         —     

Xe-Pian Xe-Namnoy Power Co., Ltd.

  

Power generation

     LAOS         25.00     37,740         32,997   

Hadong Mineral Fiber Co., Ltd.

  

Recycling fly ashes

     KOREA         25.00     50         —     

Green Biomass Co., Ltd. (*12)

  

Power generation

     KOREA         14.00     714         144   

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         29.00     1,740         1,268   

Naepo Green Energy Co., Ltd.

  

Power generation

     KOREA         25.00     29,200         26,079   

Goseong Green Energy Co., Ltd. (*2)

  

Power generation

     KOREA         1.45     2,900         2,743   

Gangneung Eco Power Co., Ltd. (*2)

  

Power generation

     KOREA         3.72     2,900         2,623   

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         9,774   

Dongducheon Dream Power Co., Ltd.

  

Power generation

     KOREA         33.61     107,958         45,194   

KS Solar Co., Ltd. (*3)

  

Power generation

     KOREA         19.00     637         622   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(1) Investments in associates and joint ventures as of June 30, 2016 and December 31, 2015 are as follows, continued:

 

In millions of won       

June 30, 2016

 

Investees

  

Key operation

activities

   Location      Percentage of
ownership
    Acquisition cost      Book
value
 

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         8,242   

SE Green Energy Co., Ltd.

  

Power generation

     KOREA         47.76     3,821         3,552   

Daegu Photovoltaic Co., Ltd.

  

Power generation

     KOREA         29.00     1,230         1,662   

Jeongam Wind Power Co., Ltd.

  

Power generation

     KOREA         40.00     1,680         639   

Korea Power Engineering Service Co., Ltd.

  

Construction and service

     KOREA         29.00     290         1,950   

Busan Green Energy Co., Ltd.

  

Power generation

     KOREA         29.00     14,564         14,040   

Jungbu Bio Energy Co., Ltd. (*2)

  

Power generation

     KOREA         18.87     1,000         854   

Korea Electric Vehicle Charging Service

  

Electric vehicle charge service

     KOREA         28.00     1,596         1,249   

Ulleungdo Natural Energy Co., Ltd.

  

Renewable power generation

     KOREA         29.85     8,000         7,165   

Korea Nuclear Partners Co., Ltd.

  

Electric material agency

     KOREA         29.00     290         254   

Tamra Offshore Wind Power Co., Ltd

  

Power generation

     KOREA         27.00     8,910         7,680   

Korea Electric Power Corporation Fund (*13)

  

Developing electric enterprises

     KOREA         97.98     48,500         48,258   
          

 

 

    

 

 

 
             2,183,782         4,522,898   
          

 

 

    

 

 

 

<Joint ventures>

             

KEPCO-Uhde Inc. (*7)

  

Power generation

     KOREA         52.80     11,355         8,428   

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         28,102   

Shuweihat Asia Power Investment B.V.

  

Holding company

     NETHERLANDS         49.00     50,017         7,593   

Shuweihat Asia Operation & Maintenance Company (*7)

  

Maintenance of utility plant

     CAYMAN         55.00     30         951   

Waterbury Lake Uranium L.P.

  

Resources development

     CANADA         38.43     26,602         20,889   

ASM-BG Investicii AD

  

Power generation

     BULGARIA         50.00     16,101         21,259   

RES Technology AD

  

Power generation

     BULGARIA         50.00     15,595         14,016   

KV Holdings, Inc.

  

Power generation

     PHILIPPINES         40.00     2,103         1,923   

KEPCO SPC Power Corporation (*7)

  

Construction and operation of utility plant

     PHILIPPINES         75.20     94,579         236,278   

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         14,357   

Datang Chifeng Renewable Power Co., Ltd.

  

Power generation

     CHINA         40.00     121,928         165,452   

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

  

Power generation

     CHINA         40.00     10,858         10,565   

Rabigh Electricity Company

  

Power generation

     SAUDI ARABIA         40.00     109,743         66,956   

Rabigh Operation & Maintenance Company

  

Maintenance of utility plant

     SAUDI ARABIA         40.00     70         5,012   

Jamaica Public Service Company Limited

  

Power generation

     JAMAICA         40.00     301,910         240,411   

KW Nuclear Components Co., Ltd.

  

R&D

     KOREA         43.36     833         6,082   

Busan Shinho Solar Power Co., Ltd.

  

Power generation

     KOREA         25.00     2,100         3,697   

GS Donghae Electric Power Co., Ltd.

  

Power generation

     KOREA         34.00     204,000         200,760   

Global Trade Of Power System Co., Ltd.

  

Exporting products and technology of small or medium business by proxy

     KOREA         29.00     290         478   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(1) Investments in associates and joint ventures as of June 30, 2016 and December 31, 2015 are as follows, continued:

 

In millions of won       

June 30, 2016

 

Investees

  

Key operation

activities

   Location    Percentage of
ownership
    Acquisition cost      Book
value
 

Expressway Solar-light Power Generation Co., Ltd.

  

Power generation

   KOREA      29.00     1,856         1,997   

KODE NOVUS I LLC

  

Power generation

   USA      50.00     19,213         —     

KODE NOVUS II LLC

  

Power generation

   USA      50.00     12,756         —     

Daejung Offshore Wind Power Co., Ltd.

  

Power generation

   KOREA      49.90     4,990         3,191   

Amman Asia Electric Power Company (*7)

  

Power generation

   JORDAN      60.00     111,476         128,890   

KAPES, Inc. (formerly, KEPCO-ALSTOM Power Electronics Systems, Inc.) (*7)

  

R&D

   KOREA      51.00     5,629         4,273   

Dangjin Eco Power Co., Ltd.

  

Power generation

   KOREA      34.00     56,249         53,116   

Honam Wind Power Co., Ltd.

  

Power generation

   KOREA      29.00     3,600         4,317   

Nepal Water & Energy Development Company Pty Ltd. (*7)

  

Construction and operation of utility plant

   NEPAL      52.77     18,568         17,441   

Chun-cheon Energy Co., Ltd.

  

Power generation

   KOREA      29.90     52,700         51,172   

Yeonggwangbaeksu Wind Power Co., Ltd. (*3)

  

Power generation

   KOREA      15.00     3,000         2,771   

Nghi Son 2 Power Ltd.

  

Power generation

   VIETNAM      50.00     1,607         453   

Kelar S.A (*7)

  

Power generation

   CHILE      65.00     4,180         —     

PT. Tanjung Power Indonesia

  

Power generation

   INDONESIA      35.00     746         1,309   

Incheon New Power Co., Ltd.

  

Power generation

   KOREA      29.00     461         525   

Seokmun Energy Co., Ltd.

  

Integrated energy business

   KOREA      29.00     580         481   

Daehan Wind Power PSC

  

Power generation

   JORDAN      50.00     285         154   
          

 

 

    

 

 

 
             1,333,819         1,323,299   
          

 

 

    

 

 

 
           3,517,601         5,846,197   
          

 

 

    

 

 

 

 

(*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 June 30.
(*9) As of June 30, 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.
(*13) The effective percentage of ownership is more than 50% but the Company does not hold control over relevant business while it exercises significant influence by participating in the Investment Decision Committee. For this reason, the entity is classified as an associate.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(1) Investments in associates and joint ventures as of June 30, 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   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   

TaebackGuinemi Wind Power Co., Ltd. (formerly, 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   
       

 

 

   

 

 

 
        2,116,897        4,405,668   
       

 

 

   

 

 

 

 

83


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(1) Investments in associates and joint ventures as of June 30, 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   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 I LLC

 

Power generation

    USA        50.00     19,213        —     

KODE NOVUS II 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   

KAPES, Inc. (formerly, 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   
       

 

 

   

 

 

 
        3,434,880        5,693,530   
       

 

 

   

 

 

 

 

84


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(1) Investments in associates and joint ventures as of June 30, 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 June 30.
(*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) 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.

 

(2) The fair value of associates which are actively traded on the open market and have a readily available market value as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won              

Investees

   June 30, 2016      December 31, 2015  

<Associates>

     

Korea Electric Power Industrial Development Co., Ltd.

   57,291         46,514   

Korea Gas Corporation

       751,275         696,465   

YTN Co., Ltd.

     24,840         26,235   

SPC Power Corporation

     63,107         65,552   

PT. Bayan Resources TBK

     489,700         446,250   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(3) Changes in investments in associates and joint ventures for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won                                                   

June 30, 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.

   80,267         3,347         —          —          6,809        —          —          90,423   

Korea Gas Corporation

       2,102,813         —           —          (3,213     86,924        (4,477     (485     2,181,562   

Korea Electric Power Industrial Development Co., Ltd.

     18,994         —           —          (1,598     3,540        —          (424     20,512   

YTN Co., Ltd.

     38,365         —           —          —          (1,119     955        97        38,298   

Cheongna Energy Co., Ltd.

     19,490         —           —          —          (2,267     —          —          17,223   

Gangwon Wind Power Co., Ltd.

     12,890         —           —          (1,136     970        —          —          12,724   

Hyundai Green Power Co., Ltd.

     113,664         —           —          (8,888     6,748        —          —          111,524   

Korea Power Exchange

     208,735         —           —          —          7,637        —          —          216,372   

AMEC Partners Korea Ltd.

     230         —           —          —          (7     —          —          223   

Hyundai Energy Co., Ltd.

     6,990         —           —          —          (3,290     —          —          3,700   

Ecollite Co., Ltd.

     —           —           —          —          —          —          —          —     

Taebaek Wind Power Co., Ltd.

     4,956         —           —          —          (394     —          —          4,562   

TaebackGuinemi Wind Power Co., Ltd. (formerly, Muju Wind Power Co., Ltd.)

     2,587         570         —          —          (58     —          —          3,099   

Pyeongchang Wind Power Co., Ltd.

     3,402         —           —          —          221        —          —          3,623   

Daeryun Power Co., Ltd.

     36,156         —           —          —          (3,312     —          —          32,844   

JinanJangsu Wind Power Co., Ltd.

     77         —           —          —          (13     —          —          64   

Changjuk Wind Power Co., Ltd.

     6,143         —           —          (190     652        —          —          6,605   

KNH Solar Co., Ltd.

     1,924         —           —          —          (76     5        —          1,853   

SPC Power Corporation

     58,033         —           —          (4,298     3,407        52        8        57,202   

Gemeng International Energy Co., Ltd.

     728,396         —           —          (16,476     20,563        (3,147     —          729,336   

PT. Cirebon Electric Power

     60,574         —           —          —          7,471        (1,899     —          66,146   

KNOC Nigerian East Oil Co., Ltd.

     —           —           —          —          (987     73        914        —     

KNOC Nigerian West Oil Co., Ltd.

     —           —           —          —          (624     77        547        —     

Dolphin Property Limited

     61         —           —          (35     —          (69     43        —     

PT Wampu Electric Power

     18,963         —           —          —          902        (131     —          19,734   

PT. Bayan Resources TBK

     525,066         —           —          —          (16,045     (510     —          508,511   

S-Power Co., Ltd.

     130,908         —           —          —          (3,288     —          —          127,620   

Pioneer Gas Power Limited

     51,187         —           —          —          2        (571     —          50,618   

Eurasia Energy Holdings

     —           —           —          —          —          —          —          —     

Xe-Pian Xe-Namnoy Power Co., Ltd.

     31,863         5,023         —          —          (3,536     (353     —          32,997   

Busan Solar Co., Ltd.

     925         —           (887     —          (29     —          (9     —     

Hadong Mineral Fiber Co., Ltd.

     —           —           —          —          —          —          —          —     

Green Biomass Co., Ltd.

     —           —           —          —          144        —          —          144   

PT. Mutiara Jawa

     —           —           —          —          —          —          —          —     

Samcheok Eco Material Co., Ltd.

     —           —           —          —          —          —          —          —     

Noeul Green Energy Co., Ltd.

     295         1,340         —          —          (209     —          (158     1,268   

Naepo Green Energy Co., Ltd.

     26,746         —           —          —          (667     —          —          26,079   

Goseong Green Energy Co., Ltd.

     2,670         —           —          —          73        —          —          2,743   

Gangneung Eco Power Co., Ltd.

     2,688         —           —          —          (65     —          —          2,623   

Shin Pyeongtaek Power Co., Ltd.

     —           —           —          —          —          —          —          —     

Heang Bok Do Si Photovoltaic Power Co., Ltd.

     189         —           —          —          —          —          —          189   

DS POWER Co., Ltd.

     10,960         —           —          —          (1,155     —          (31     9,774   

Dongducheon Dream Power Co., Ltd.

     55,667         —           —          —          (10,473     —          —          45,194   

KS Solar Co., Ltd.

     618         —           —          —          4        —          —          622   

Yeongwol Energy Station Co., Ltd.

     1,290         —           —          —          52        —          —          1,342   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(3) Changes in investments in associates and joint ventures for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows, continued:

 

In millions of won                                                   

June 30, 2016

 

Investees

   Beginning
balance
     Acquisition      Disposal     Dividends
received
    Share of
income (loss)
    Other
comprehensive
income (loss)
    Others     Ending
balance
 

Jinbhuvish Power Generation Pvt. Ltd.

   8,350         —           —          —          (50     (58     —          8,242   

SE Green Energy Co., Ltd.

     3,575         —           —          —          (23     —          —          3,552   

Daegu Photovoltaic Co., Ltd.

     1,886         —           —          (411     187        —          —          1,662   

Jeongam Wind Power Co., Ltd.

     702         —           —          —          (63     —          —          639   

Korea Power Engineering Service Co., Ltd.

     1,805         —           —          —          145        —          —          1,950   

Busan Green Energy Co., Ltd.

     14,512         —           —          —          (472     —          —          14,040   

Jungbu Bio Energy Co., Ltd.

     904         —           —          —          (50     —          —          854   

Korea Electric Vehicle Charging Service

     1,446         —           —          —          (197     —          —          1,249   

Ulleungdo Natural Energy Co., Ltd.

     7,417         —           —          —          (252     —          —          7,165   

Korea Nuclear Partners Co., Ltd.

     289         —           —          —          (35     —          —          254   

Tamra Offshore Wind Power Co., Ltd

     —           8,910         —          —          (1,223     (7     —          7,680   

Korea Electric Power Corporation Fund

     —           48,500         —          —          (242     —          —          48,258   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
       4,405,668         67,690         (887     (36,245     96,230        (10,060     502        4,522,898   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

<Joint ventures>

                  

KEPCO-Uhde Inc.

     8,549         —           —          —          (121     —          —          8,428   

Eco Biomass Energy Sdn. Bhd.

     —           —           —          —          —          —          —          —     

Datang Chaoyang Renewable Power Co., Ltd.

     27,640         —           —          —          1,087        (625     —          28,102   

Shuweihat Asia Power Investment B.V.

     20,474         —           (10,174     —          7,411        (10,118     —          7,593   

Shuweihat Asia Operation & Maintenance Company

     486         —           —          —          465        —          —          951   

Waterbury Lake Uranium L.P.

     20,299         —           —          —          —          1,290        (700     20,889   

ASM-BG Investicii AD

     20,203         —           —          —          835        221        —          21,259   

RES Technology AD

     13,789         —           —          —          66        161        —          14,016   

KV Holdings, Inc.

     2,010         —           —          (302     227        (12     —          1,923   

KEPCO SPC Power Corporation

     208,524         —           —          —          29,581        (1,801     (26     236,278   

Canada Korea Uranium Limited Partnership

     —           —           —          —          —          —          —          —     

KEPCO Energy Resource Nigeria Limited

     —           —           —          —          —          —          —          —     

Gansu Datang Yumen Wind Power Co., Ltd.

     16,107         —           —          —          (1,451     (299     —          14,357   

Datang Chifeng Renewable Power Co., Ltd.

     171,224         —           —          (7,384     5,198        (3,587     1        165,452   

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

     10,580         —           —          (440     658        (233     —          10,565   

Rabigh Electricity Company

     59,368         —           —          —          5,626        1,958        4        66,956   

Rabigh Operation & Maintenance Company

     3,586         —           —          —          1,453        (27     —          5,012   

Jamaica Public Service Company Limited

     241,918         —           —          —          —          —          (1,507     240,411   

KW Nuclear Components Co., Ltd.

     4,985         —           —          (2,191     3,294        —          (6     6,082   

Busan Shinho Solar Power Co., Ltd.

     3,678         —           —          (185     204        —          —          3,697   

GS Donghae Electric Power Co., Ltd.

     200,379         —           —          —          381        —          —          200,760   

Global Trade Of Power System Co., Ltd.

     426         —           —          —          52        —          —          478   

Expressway Solar-light Power Generation Co., Ltd.

     2,100         —           —          —          (33     —          (70     1,997   

KODE NOVUS I LLC

     —           —           —          —          —          —          —          —     

KODE NOVUS II LLC

     —           258         —          —          (258     —          —          —     

Daejung Offshore Wind Power Co., Ltd.

     3,352         —           —          —          (161     —          —          3,191   

Amman Asia Electric Power Company

     137,668         —           —          —          9,754        (18,533     1        128,890   

KAPES, Inc. (formerly, KEPCO-ALSTOM Power Electronics Systems, Inc.)

     4,501         —           —          —          (232     —          4        4,273   

Dangjin Eco Power Co., Ltd.

     48,281         5,100         —          —          (242     (26     3        53,116   

Honam Wind Power Co., Ltd.

     3,926         —           —          (104     495        —          —          4,317   

Nepal Water & Energy Development Company Pty Ltd.

     17,765         —           —          —          (165     (159     —          17,441   

Chun-cheon Energy Co., Ltd.

     31,976         19,832         —          —          (541     (95     —          51,172   

Yeonggwangbaeksu Wind Power Co., Ltd.

     2,668         —           —          —          103        —          —          2,771   

Nghi Son 2 Power Ltd.

     269         535         —          —          (346     (5     —          453   

 

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Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(3) Changes in investments in associates and joint ventures for the six-month periods ended June 30, 2016 and for the year ended December 31, 2015 are as follows, continued:

 

In millions of won                                                   

June 30, 2016

 

Investees

   Beginning
balance
     Acquisition      Disposal     Dividends
received
    Share of
income (loss)
    Other
comprehensive
income (loss)
    Others     Ending
balance
 

Kelar S.A

   —           —           —          —          —          —          —          —     

PT. Tanjung Power Indonesia

     617         —           —          —          710        (18     —          1,309   

Incheon New Power Co., Ltd.

     514         —           —          —          3        4        4        525   

Seokmun Energy Co., Ltd.

     —           —           —          —          (312     793        —          481   

Daehan Wind Power PSC

     —           285         —          —          (128     (3     —          154   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     1,287,862         26,010         (10,174     (10,606     63,613        (31,114     (2,292     1,323,299   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     5,693,530         93,700         (11,061     (46,851     159,843        (41,174     (1,790     5,846,197   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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.

   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   

TaebackGuinemi Wind Power Co., Ltd. (formerly, 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   

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(3) Changes in investments in associates and joint ventures for the six-month periods ended June 30, 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

   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   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(3) Changes in investments in associates and joint ventures for the six-month period ended June 30, 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.

   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 I LLC

     12,207         —           —          —          (11,639     588        (1,156     —     

KODE NOVUS II 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   

KAPES, Inc. (formerly, 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   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

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

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(*1) ‘Others’ include ₩15,204 million of assets held-for-sale (note 41).
(*2) ‘Others’ include ₩41,170 million of assets held-for-sale (note 41).

 

90


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 six-month period ended June 30, 2016 and as of and for the year ended December 31, 2015 are as follows:

 

In millions of won                            

June 30, 2016

 

Investees

   Total assets      Total liabilities      Sales      Profit (loss) for
the period
 

<Associates>

           

Daegu Green Power Co., Ltd.

   642,174         461,255         136,263         13,299   

Korea Gas Corporation

       41,074,518         30,650,242         11,301,341         404,959   

Korea Electric Power Industrial Development Co., Ltd.

     159,474         88,744         149,161         13,906   

YTN Co., Ltd.

     300,414         121,512         55,019         (2,084

Cheongna Energy Co., Ltd.

     450,984         417,303         29,480         (5,072

Gangwon Wind Power Co., Ltd.

     107,510         23,011         13,972         6,134   

Hyundai Green Power Co., Ltd.

     1,144,873         760,306         223,996         23,316   

Korea Power Exchange

     241,619         25,247         42,776         6,876   

AMEC Partners Korea Ltd.

     1,213         37         53         (34

Hyundai Energy Co., Ltd.

     519,319         483,623         32,090         (16,874

Ecollite Co., Ltd.

     2,218         336         —           (44

Taebaek Wind Power Co., Ltd.

     44,077         25,182         3,257         (2,901

TaebackGuinemi Wind Power Co., Ltd. (formerly, Muju Wind Power Co., Ltd.)

     12,396         —           —           (232

Pyeongchang Wind Power Co., Ltd.

     76,228         61,736         1,520         915   

Daeryun Power Co., Ltd.

     793,430         629,808         123,138         (17,026

JinanJangsu Wind Power Co., Ltd.

     255         —           —           (52

Changjuk Wind Power Co., Ltd.

     38,157         15,507         3,131         908   

KNH Solar Co., Ltd.

     26,207         19,172         1,720         (6

SPC Power Corporation

     190,438         39,905         39,617         25,487   

Gemeng International Energy Co., Ltd.

     5,959,618         3,919,626         570,190         27,066   

PT. Cirebon Electric Power

     994,549         754,018         151,753         27,230   

KNOC Nigerian East Oil Co., Ltd.

     263,062         342,639         —           (4,563

KNOC Nigerian West Oil Co., Ltd.

     158,296         228,528         —           (2,086

PT Wampu Electric Power

     205,315         162,415         3,166         1,926   

PT. Bayan Resources TBK

     943,979         847,690         247,278         504   

S-Power Co., Ltd.

     886,179         621,653         233,043         (7,188

Pioneer Gas Power Limited

     318,903         250,396         —           187   

Eurasia Energy Holdings

     596         1,063         —           —     

Xe-Pian Xe-Namnoy Power Co., Ltd.

     624,955         459,139         —           (14,321

Hadong Mineral Fiber Co., Ltd.

     —           20         —           —     

Green Biomass Co., Ltd.

     11,059         10,032         1,889         (280

PT. Mutiara Jawa

     26,702         32,567         1,526         (770

Samcheok Eco Material Co., Ltd.

     21,863         603         125         (1,147

Noeul Green Energy Co., Ltd.

     5,318         947         —           (980

Naepo Green Energy Co., Ltd.

     104,961         646         2,757         (2,668

Goseong Green Energy Co., Ltd.

     190,906         1,707         —           (2,380

Gangneung Eco Power Co., Ltd.

     90,166         19,623         —           (1,753

Shin Pyeongtaek Power Co., Ltd.

     38,280         42,594         —           (1,261

Heang Bok Do Si Photovoltaic Power Co., Ltd.

     3,047         2,371         230         (12

DS POWER Co., Ltd.

     706,042         592,752         108,412         (4,654

Dongducheon Dream Power Co., Ltd.

     1,661,160         1,422,458         450,109         (32,506

KS Solar Co., Ltd.

     28,915         25,457         2,356         202   

Yeongwol Energy Station Co., Ltd.

     178,537         165,120         18,280         2,349   

Jinbhuvish Power Generation Pvt. Ltd.

     68,219         14,088         —           (968

SE Green Energy Co., Ltd.

     7,437         —           —           (47

Daegu Photovoltaic Co., Ltd.

     19,391         13,659         1,837         609   

Jeongam Wind Power Co., Ltd.

     1,898         301         —           (149

Korea Power Engineering Service Co., Ltd.

     9,038         2,314         12,254         498   

Busan Green Energy Co., Ltd.

     114,335         65,921         —           (1,626

Jungbu Bio Energy Co., Ltd.

     4,929         402         —           (265

Korea Electric Vehicle Charging Service

     9,173         4,711         —           (703

Ulleungdo Natural Energy Co., Ltd.

     24,105         97         —           (844

Korea Nuclear Partners Co., Ltd.

     908         32         —           (120

Tamra Offshore Wind Power Co., Ltd

     113,847         85,402         —           (3,842

Korea Electric Power Corporation Fund

     49,367         113         100         (236

 

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Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 six-month period ended June 30, 2016 and as of and for the year ended December 31, 2015 are as follows, continued:

 

In millions of won                            

June 30, 2016

 

Investees

   Total assets      Total liabilities      Sales      Profit (loss) for the
period
 

<Joint ventures>

           

KEPCO-Uhde Inc.

   17,246         61         —           (238

Eco Biomass Energy Sdn. Bhd.

     —           —           —           —     

Datang Chaoyang Renewable Power Co., Ltd.

     149,678         79,420         10,462         2,637   

Shuweihat Asia Power Investment B.V.

     15,665         2         —           14,990   

Shuweihat Asia Operation & Maintenance Company

     1,730         —           600         430   

Waterbury Lake Uranium L.P.

     56,224         1,571         —           —     

ASM-BG Investicii AD

     83,082         40,565         6,616         1,760   

RES Technology AD

     72,584         44,552         4,444         131   

KV Holdings, Inc.

     4,808         1         1         566   

KEPCO SPC Power Corporation

     452,236         138,036         87,036         39,022   

Canada Korea Uranium Limited Partnership

     287         85         —           —     

KEPCO Energy Resource Nigeria Limited

     271,608         317,215         —           (17,999

Gansu Datang Yumen Wind Power Co., Ltd.

     93,698         57,807         2,218         (3,355

Datang Chifeng Renewable Power Co., Ltd.

     829,786         416,035         54,444         13,403   

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

     61,443         35,030         4,761         1,647   

Rabigh Electricity Company

       2,731,109         2,369,937         133,977         9,067   

Rabigh Operation & Maintenance Company

     22,657         10,128         12,634         1,252   

Jamaica Public Service Company Limited

     1,211,303         611,037         375,465         12,103   

KW Nuclear Components Co., Ltd.

     27,308         13,490         19,994         8,840   

Busan Shinho Solar Power Co., Ltd.

     49,587         34,800         3,595         779   

GS Donghae Electric Power Co., Ltd.

     1,916,128         1,325,557         3,671         1,119   

Global Trade Of Power System Co., Ltd.

     1,943         296         1,905         209   

Expressway Solar-light Power Generation Co., Ltd.

     20,321         13,433         1,125         (233

KODE NOVUS I LLC

     61,633         110,699         1,647         (3,829

KODE NOVUS II LLC

     21,383         46,348         632         (2,336

Daejung Offshore Wind Power Co., Ltd.

     6,463         67         —           (321

Amman Asia Electric Power Company

     871,884         656,922         6,012         16,258   

KAPES, Inc. (formerly, KEPCO-ALSTOM Power Electronics Systems, Inc.)

     118,482         110,103         4,179         (608

Dangjin Eco Power Co., Ltd.

     151,089         830         —           (687

Honam Wind Power Co., Ltd.

     41,398         26,623         3,957         1,708   

Nepal Water & Energy Development Company Pty Ltd.

     43,228         12,351         —           (319

Chun-cheon Energy Co., Ltd.

     366,476         195,345         —           (1,745

Yeonggwangbaeksu Wind Power Co., Ltd.

     102,741         84,271         6,163         553   

Nghi Son 2 Power Ltd.

     1,080         176         —           (687

Kelar S.A

     625,859         682,164         —           (3,918

PT. Tanjung Power Indonesia

     137,339         133,598         73,160         2,251   

Incheon New Power Co., Ltd.

     8,973         7,164         1,412         37   

Seokmun Energy Co., Ltd.

     212,544         210,885         —           (232

Daehan Wind Power PSC

     314         5         —           (254

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 six-month period ended June 30, 2016 and as of and for the year ended December 31, 2015 are as follows, continued:

 

In millions of won  

December 31, 2015

 

Investees

   Total assets      Total liabilities      Sales      Profit (loss) for the
period
 

<Associates>

           

Daegu Green Power Co., Ltd.

   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

TaebackGuinemi Wind Power Co., Ltd. (formerly, 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

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 six-month period ended June 30, 2016 and as of and for the year ended December 31, 2015 are as follows, continued:

 

In millions of won  

December 31, 2015

 

Investees

   Total assets      Total liabilities      Sales      Profit (loss) for the
period
 

<Joint ventures>

           

KEPCO-Uhde Inc.

   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 I LLC

     64,453         110,030         3,421         (59,389

KODE NOVUS II 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   

KAPES, Inc. (formerly, 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

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won  

June 30, 2016

 

Investees

   Net
assets
    Percentage
of ownership
(*)
    Share in
net assets
    Investment
differential
    Intercompany
transaction
    Others     Book
value
 

<Associates>

              

Daegu Green Power Co., Ltd.

   180,919        49.90     90,279        144        —          —          90,423   

Korea Gas Corporation

       10,424,276        21.57     2,248,516        —          —          (66,954     2,181,562   

Korea Electric Power Industrial Development Co., Ltd.

     70,730        29.00     20,512        —          —          —          20,512   

YTN Co., Ltd.

     178,902        21.43     38,339        —          (37     (4     38,298   

Cheongna Energy Co., Ltd.

     33,681        43.90     14,786        2,584        (147     —          17,223   

Gangwon Wind Power Co., Ltd.

     84,499        15.00     12,675        —          —          49        12,724   

Hyundai Green Power Co., Ltd.

     384,567        29.00     111,524        —          —          —          111,524   

Korea Power Exchange

     216,372        100.00     216,372        —          —          —          216,372   

AMEC Partners Korea Ltd.

     1,176        19.00     223        —          —          —          223   

Hyundai Energy Co., Ltd.

     35,696        46.30     16,527        —          (1,099     (11,728     3,700   

Ecollite Co., Ltd.

     1,882        36.10     679        —          —          (679     —     

Taebaek Wind Power Co., Ltd.

     18,895        25.00     4,724        —          (162     —          4,562   

TaebackGuinemi Wind Power Co., Ltd. (formerly, Muju Wind Power Co., Ltd.)

     12,396        25.00     3,099        —          —          —          3,099   

Pyeongchang Wind Power Co., Ltd.

     14,492        25.00     3,623        —          —          —          3,623   

Daeryun Power Co., Ltd.

     163,622        19.45     31,824        1,014        —          6        32,844   

JinanJangsu Wind Power Co., Ltd.

     255        25.00     64        —          —          —          64   

Changjuk Wind Power Co., Ltd.

     22,650        30.00     6,795        —          (190     —          6,605   

KNH Solar Co., Ltd.

     7,035        27.00     1,899        —          (46     —          1,853   

SPC Power Corporation

     150,533        38.00     57,202        —          —          —          57,202   

Gemeng International Energy Co., Ltd.

     2,039,992        34.00     693,597        —          —          35,739        729,336   

PT. Cirebon Electric Power

     240,531        27.50     66,146        —          —          —          66,146   

KNOC Nigerian East Oil Co., Ltd.

     (79,577     14.63     (11,642     —          —          11,642        —     

KNOC Nigerian West Oil Co., Ltd.

     (70,232     14.63     (10,275     —          —          10,275        —     

PT Wampu Electric Power

     42,900        46.00     19,734        —          —          —          19,734   

PT. Bayan Resources TBK

     96,289        20.00     19,258        489,253        —          —          508,511   

S-Power Co., Ltd.

     264,526        49.00     129,618        —          (1,998     —          127,620   

Pioneer Gas Power Limited

     68,507        40.00     27,403        23,147        —          68        50,618   

Eurasia Energy Holdings

     (467     40.00     (187     —          —          187        —     

Xe-Pian Xe-Namnoy Power Co., Ltd.

     165,816        25.00     41,454        (7,578     (590     (289     32,997   

Hadong Mineral Fiber Co., Ltd.

     (20     25.00     (5     —          —          5        —     

Green Biomass Co., Ltd.

     1,027        14.00     144        —          —          —          144   

PT. Mutiara Jawa

     (5,865     29.00     (1,701     70        —          1,631        —     

Samcheok Eco Material Co., Ltd.

     21,260        2.67     568        —          —          (568     —     

Noeul Green Energy Co., Ltd.

     4,371        29.00     1,268        —          —          —          1,268   

Naepo Green Energy Co., Ltd.

     104,315        25.00     26,079        —          —          —          26,079   

Goseong Green Energy Co., Ltd.

     189,199        1.45     2,743        —          —          —          2,743   

Gangneung Eco Power Co., Ltd.

     70,543        3.72     2,624        —          —          (1     2,623   

Shin Pyeongtaek Power Co., Ltd.

     (4,314     40.00     (1,726     —          (1,995     3,721        —     

Heang Bok Do Si Photovoltaic Power Co., Ltd.

     676        28.00     189        —          —          —          189   

DS POWER Co., Ltd.

     113,290        10.91     12,360        —          (6,830     4,244        9,774   

Dongducheon Dream Power Co., Ltd.

     238,702        33.61     80,228        —          (4,948     (30,086     45,194   

KS Solar Co., Ltd.

     3,458        19.00     657        —          (35     —          622   

Yeongwol Energy Station Co., Ltd.

     13,417        10.00     1,342        —          —          —          1,342   

Jinbhuvish Power Generation Pvt. Ltd.

     54,131        5.16     2,793        5,449        —          —          8,242   

SE Green Energy Co., Ltd.

     7,437        47.76     3,552        —          —          —          3,552   

Daegu Photovoltaic Co., Ltd.

     5,732        29.00     1,662        —          —          —          1,662   

Jeongam Wind Power Co., Ltd.

     1,597        40.00     639        —          —          —          639   

Korea Power Engineering Service Co., Ltd.

     6,724        29.00     1,950        —          —          —          1,950   

Busan Green Energy Co., Ltd.

     48,414        29.00     14,040        —          —          —          14,040   

Jungbu Bio Energy Co., Ltd.

     4,527        18.87     854        —          —          —          854   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 2016 and December 31, 2015 are as follows, continued:

 

In millions of won  

June 30, 2016

 

Investees

   Net
assets
    Percentage
of ownership
(*)
    Share in
net assets
    Investment
differential
     Intercompany
transaction
    Others     Book
value
 

Korea Electric Vehicle Charging Service

   4,462        28.00     1,249        —           —          —          1,249   

Ulleungdo Natural Energy Co., Ltd.

     24,008        29.85     7,166        —           —          (1     7,165   

Korea Nuclear Partners Co., Ltd.

     876        29.00     254        —           —          —          254   

Tamra Offshore Wind Power Co., Ltd

     28,445        27.00     7,680        —           —          —          7,680   

Korea Electric Power Corporation Fund

     49,254        97.98     48,259        —           —          (1     48,258   

<Joint ventures>

               

KEPCO-Uhde Inc.

     17,185        50.85     8,739        —           —          (311     8,428   

Eco Biomass Energy Sdn. Bhd.

     —          61.53     —          —           —          —          —     

Datang Chaoyang Renewable Power Co., Ltd.

     70,258        40.00     28,103        —           —          (1     28,102   

Shuweihat Asia Power Investment B.V.

     15,663        49.00     7,675        —           —          (82     7,593   

Shuweihat Asia Operation & Maintenance Company

     1,730        55.00     952        —           —          (1     951   

Waterbury Lake Uranium L.P.

     54,653        38.43     21,003        —           —          (114     20,889   

ASM-BG Investicii AD

     42,517        50.00     21,259        —           —          —          21,259   

RES Technology AD

     28,032        50.00     14,016        —           —          —          14,016   

KV Holdings, Inc.

     4,807        40.00     1,923        —           —          —          1,923   

KEPCO SPC Power Corporation

     314,200        75.20     236,278        —           —          —          236,278   

Canada Korea Uranium Limited Partnership

     202        12.50     25        —           —          (25     —     

KEPCO Energy Resource Nigeria Limited

     (45,607     30.00     (13,682     —           —          13,682        —     

Gansu Datang Yumen Wind Power Co., Ltd.

     35,891        40.00     14,356        —           —          1        14,357   

Datang Chifeng Renewable Power Co., Ltd.

     413,751        40.00     165,500        —           —          (48     165,452   

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

     26,413        40.00     10,565        —           —          —          10,565   

Rabigh Electricity Company

     361,172        40.00     144,469        —           (77,479     (34     66,956   

Rabigh Operation & Maintenance Company

     12,529        40.00     5,012        —           —          —          5,012   

Jamaica Public Service Company Limited

     600,266        40.00     240,106        —           —          305        240,411   

KW Nuclear Components Co., Ltd.

     13,818        43.36     5,991        90         —          1        6,082   

Busan Shinho Solar Power Co., Ltd.

     14,787        25.00     3,697        —           —          —          3,697   

GS Donghae Electric Power Co., Ltd.

     590,571        34.00     200,794        —           —          (34     200,760   

Global Trade Of Power System Co., Ltd.

     1,647        29.00     478        —           —          —          478   

Expressway Solar-light Power Generation Co., Ltd.

     6,888        29.00     1,998        —           —          (1     1,997   

KODE NOVUS I LLC

     (49,066     50.00     (24,533     4,732         —          19,801        —     

KODE NOVUS II LLC

     (24,965     50.00     (12,483     —           —          12,483        —     

Daejung Offshore Wind Power Co., Ltd.

     6,396        49.90     3,192        —           —          (1     3,191   

Amman Asia Electric Power Company

       214,962        60.00     128,977        —           —          (87     128,890   

KAPES, Inc. (formerly, KEPCO-ALSTOM Power Electronics Systems, Inc.)

     8,379        51.00     4,273        —           —          —          4,273   

Dangjin Eco Power Co., Ltd.

     150,259        34.00     51,088        2,028         —          —          53,116   

Honam Wind Power Co., Ltd.

     14,775        29.00     4,285        32         —          —          4,317   

Nepal Water & Energy Development Company Pty Ltd.

     30,877        52.77     16,294        972         —          175        17,441   

Chun-cheon Energy Co., Ltd.

     171,131        29.90     51,168        3         —          1        51,172   

Yeonggwangbaeksu Wind Power Co., Ltd.

     18,470        15.00     2,771        —           —          —          2,771   

Nghi Son 2 Power Ltd.

     904        50.00     452        —           —          1        453   

Kelar S.A

     (56,305     65.00     (36,598     2,424         —          34,174        —     

PT. Tanjung Power Indonesia

     3,741        35.00     1,309        —           —          —          1,309   

Incheon New Power Co., Ltd.

     1,809        29.00     525        —           —          —          525   

Seokmun Energy Co., Ltd.

     1,659        29.00     481        —           —          —          481   

Daehan Wind Power PSC

     309        50.00     155        —           —          (1     154   

 

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

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 2016 and December 31, 2015 are as follows, continued:

 

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.

   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   

TaebackGuinemi Wind Power Co., Ltd. (formerly, 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   

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 2016 and December 31, 2015 are as follows, continued:

 

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.

   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 I LLC

     (45,577     50.00     (22,789     4,732        —          18,057        —     

KODE NOVUS II 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   

KAPES, Inc. (formerly, 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.

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(6) As of June 30, 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    June 30, 2016      December 31, 2015  
     Unrecognized
equity interest
     Accumulated
unrecognized
equity interest
     Unrecognized
equity interest
     Accumulated
unrecognized
equity interest
 

Green Biomass Co., Ltd.

   —           —           (125      —     

Shin Pyeongtaek Power Co., Ltd.

     400         1,726         1,038         1,326   

KEPCO Energy Resource Nigeria Limited

     2,679         13,682         4,645         11,003   

Chun-cheon Energy Co., Ltd.

     —           —           (8      —     

Seokmun Energy Co., Ltd.

     (205      —           152         205   

Kelar S.A

       19,209         36,598         17,389         17,389   

Hadong Mineral Fiber Co., Ltd.

     —           5         5         5   

PT. Mutiara Jawa

     350         1,701         1,351         1,351   

Eurasia Energy Holdings

     (1      187         188         188   

KODE NOVUS I LLC

     1,744         24,533         22,789         22,789   

KODE NOVUS II LLC

     1,308         12,483         11,175         11,175   

 

(7) As of June 30, 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.

The Company had placed guarantees for a fixed return on the investment to NH Power II Co., Ltd. and National Agricultural Cooperative Federation (“NACF”) 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.

 

  (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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

17. Investments in Associates and Joint Ventures, Continued

 

(7) As of June 30, 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 ₩15 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.

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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.    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.
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 June 30, 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 ₩919.2 billion with Korea Development Bank and others.

 

At a certain period in the future, the Company 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, the Company 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

18. Property, Plant and Equipment

 

(1) Property, plant and equipment as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Acquisition
cost
     Government
grants
    Accumulated
depreciation
    Accumulated
impairment

losses (*)
    Book
value
 

Land

   12,556,031         (3,199     —          —          12,552,832   

Buildings

     15,357,169         (61,886     (5,585,268     (854     9,709,161   

Structures

     59,474,334         (193,982     (18,962,673     (1,184     40,316,495   

Machinery

     57,834,515         (114,972     (22,150,400     (36,230     35,532,913   

Ships

     4,130         —          (3,494     —          636   

Vehicles

     230,129         (24     (169,164     —          60,941   

Equipment

     1,170,754         (888     (858,484     —          311,382   

Tools

     871,976         (564     (709,927     —          161,485   

Construction-in-progress

     40,187,159         (135,502     —          (38,107     40,013,550   

Finance lease assets

     2,389,982         —          (1,939,194     —          450,788   

Asset retirement costs

     6,933,949         —          (2,960,230     —          3,973,719   

Others

     9,776,927         —          (7,600,159     —          2,176,768   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
     206,787,055         (511,017     (60,938,993     (76,375     145,260,670   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

(*) 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

   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   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
     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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

18. Property, Plant and Equipment, Continued

 

(2) Changes in property, plant and equipment for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Beginning
balance
    Acquisition     Disposal     Depreciation     Impairment      Others     Ending
balance
 

Land

   12,396,460        5,660        (10,995     —          —           164,906        12,556,031   

(Government grants)

     (3,147     —          13        —          —           (65     (3,199

Buildings

     9,676,432        2,709        (3,667     (320,336     —           415,909        9,771,047   

(Government grants)

     (63,932     —          —          2,589        —           (543     (61,886

Structures

     40,258,162        1,187        (229,789     (1,086,483     —           1,567,400        40,510,477   

(Government grants)

     (193,119     —          1,211        4,690        —           (6,764     (193,982

Machinery

     36,864,749        116,807        (111,970     (2,017,829     —           796,128        35,647,885   

(Government grants)

     (108,935     —          827        5,874        —           (12,738     (114,972

Ships

     786        —          —          (150     —           —          636   

Vehicles

     60,472        260        21        (13,554     —           13,766        60,965   

(Government grants)

     (29     —          —          5        —           —          (24

Equipment

     310,571        35,435        (104     (59,312     —           25,680        312,270   

(Government grants)

     (1,026     —          —          250        —           (112     (888

Tools

     160,630        7,708        (294     (34,458     —           28,463        162,049   

(Government grants)

     (691     —          —          145        —           (18     (564

Construction-in-progress

     35,267,026        7,299,871        —          —          —           (2,417,845     40,149,052   

(Government grants)

     (139,898     (15,074     —          —          —           19,470        (135,502

Finance lease assets

     511,509        —          —          (51,211     —           (9,510     450,788   

Asset retirement cost

     4,106,087        —          —          (260,257     —           127,889        3,973,719   

Others

     2,259,244        4,095        130        (417,621     —           330,920        2,176,768   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 
     141,361,351        7,458,658        (354,617     (4,247,658     —           1,042,936        145,260,670   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

18. Property, Plant and Equipment, Continued

 

(2) Changes in property, plant and equipment for the six-month period ended June 30, 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

   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   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     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 ₩23,273 million of assets held for sale (note 41) comprising land and buildings and the amount is ₩2,907 million and ₩20,366 million, respectively.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

19. Investment Properties

 

(1) Investment properties as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Acquisition
cost
     Government
grants
     Accumulated
depreciation
     Book
value
 

Land

   231,619         —           —           231,619   

Buildings

     23,541         (65      (10,220      13,256   
  

 

 

    

 

 

    

 

 

    

 

 

 
     255,160         (65      (10,220      244,875   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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

Land

   253,960         —           —           253,960   

Buildings

     27,655         (13      (11,692      15,950   
  

 

 

    

 

 

    

 

 

    

 

 

 
     281,615         (13      (11,692      269,910   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(2) Changes in investment properties for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Beginning
balance
     Depreciation      Others      Ending
balance
 

Land

   253,960         —           (22,341      231,619   

Buildings

     15,963         (329      (2,313      13,321   

(Government grants)

     (13      —           (52      (65
  

 

 

    

 

 

    

 

 

    

 

 

 
     269,910         (329      (24,706      244,875   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

In millions of won    December 31, 2015  
     Beginning
balance
     Depreciation      Others      Ending
balance
 

Land

   301,483         —           (47,523      253,960   

Buildings

     15,791         (669      841         15,963   

(Government grants)

     (10      —           (3      (13
  

 

 

    

 

 

    

 

 

    

 

 

 
     317,264         (669      (46,685      269,910   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

19. Investment Properties, Continued

 

(3) Income and expenses related to investment properties for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-month
period ended
     Six-month
period ended
     Three-month
period ended
     Six-month
period ended
 

Rental income

   2,949         4,845         2,651         4,843   

Operating and maintenance expenses related to rental income

     (131      (329      (185      (347
  

 

 

    

 

 

    

 

 

    

 

 

 
     2,818         4,516         2,466         4,496   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(4) Fair value of investment properties as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  
     Book value      Fair value      Book value      Fair value  

Land

   231,619         256,219         253,960         284,423   

Buildings

     13,256         15,014         15,950         18,263   
  

 

 

    

 

 

    

 

 

    

 

 

 
     244,875         271,233         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 six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Beginning balance      Increase and
decrease (*)
     Recognized
revenue
     Ending
balance
 

Nuclear power plant construction in UAE and others

     12,308,839         73,814         (1,927,326      10,455,327   

 

(*) For the six-month period ended June 30, 2016, the increased balance of contracts from new orders and other is ₩164,830 million and the decreased balance of contracts from changes in size of construction is ₩91,016 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

   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 ₩412,617 million and the decreased balance of contracts from changes in size of construction is ₩1,423,648 million.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

20. Construction Contracts, Continued

 

(2) Accumulated earned revenue, expense and others related to the Company’s construction as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Accumulated
earned revenue
     Accumulated
expense
     Accumulated
profit
     Unearned
advance
receipts
 

Nuclear power plant construction in UAE and others

     13,685,571         12,897,555         788,016         —     

 

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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  
     Assets (*1)      Liabilities (*2)      Assets (*1)      Liabilities (*2)  

Nuclear power plant construction in UAE and others

     48,205         961,986         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 and reported to the audit committee that those items will not be disclosed in the notes to the financial statements.

 

(5) Changes in estimates of contract revenues and costs related to the Company’s construction for the six-month period ended June 30, 2016 are as follows:

 

In millions of won    June 30, 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

   —           —           —          —           2,207         —           —           —     

Electric power generation (nuclear)

     —           —           —          —           1,499         —           —           —     

Plant maintenance & engineering service

     512         3,403         (3,856     453         44,499         —           114,485         4,071   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     512         3,403         (3,856     453         48,205         —           114,485         4,071   
  

 

 

    

 

 

    

 

 

   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

21. Intangible Assets other than Goodwill

 

(1) Intangible assets as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Acquisition
cost
     Government
grants
    Accumulated
amortization
    Accumulated
impairment
losses
    Book
value
 

Software

   418,722         (654     (349,874     —          68,194   

Licenses and franchises

     3,398         —          (3,398     —          —     

Copyrights, patents rights and other industrial rights

     34,605         —          (13,990     —          20,615   

Mining rights

     530,155         —          (9,757     —          520,398   

Development expenditures

     772,210         (5,988     (712,099     —          54,123   

Intangible assets under development

     97,089         (11,057     —          —          86,032   

Usage rights of donated assets and other

     375,275         (27     (331,229     —          44,019   

Leasehold rights

     23,313         —          (18,488     —          4,825   

Greenhouse gas emissions rights

     1,300         —          —          —          1,300   

Others

     204,206         (1     (85,503     (12,124     106,578   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
     2,460,273         (17,727     (1,524,338     (12,124     906,084   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

In millions of won    December 31, 2015  
     Acquisition
cost
     Government
grants
    Accumulated
amortization
    Accumulated
impairment
losses
    Book
value
 

Software

   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   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
     2,366,991         (18,050     (1,480,985     (12,124     855,832   
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

21. Intangible Assets other than Goodwill, Continued

 

(2) Changes in intangible assets for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Beginning
balance
    Acquisition     Disposal     Amortization     Impairment      Others     Ending
balance
 

Software

   57,886        4,835        —          (17,721     —           23,848        68,848   

(Government grants)

     (699     —          —          123        —           (78     (654

Copyrights, patents rights and other industrial rights

     21,875        87        (24     (1,316     —           (7     20,615   

Mining rights

     499,537        12,191        —          —          —           8,670        520,398   

Development expenditures

     51,807        577        —          (11,388     —           19,115        60,111   

(Government grants)

     (6,835     —          —          1,370        —           (523     (5,988

Intangible assets under development

     94,886        24,633        —          —          —           (22,430     97,089   

(Government grants)

     (10,483     (574     —          —          —           —          (11,057

Usage rights of donated assets and other

     48,591        —          —          (4,522     —           (23     44,046   

(Government grants)

     (32     —          —          5        —           —          (27

Leasehold rights

     745        —          —          (122     —           4,202        4,825   

Greenhouse gas emissions rights

     805        —          —          —          —           495        1,300   

Others

     97,750        6,464        (248     (3,850     —           6,463        106,579   

(Government grants)

     (1     —          —          —          —           —          (1
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 
     855,832        48,213        (272     (37,421     —           39,732        906,084   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

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

Software

   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
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     821,060        87,946        (452     (72,266     253        19,291        855,832   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

21. Intangible Assets other than Goodwill, Continued

 

(3) Significant specific intangible assets as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won and thousands of Australian dollars

June 30, 2016

Type

  

Description

   Currency    Amount      Remaining useful years

Software

  

ERP system and others

   KRW      642       1 year and 5 months ~
2 years and 5 months

Copyrights, patents rights and other industrial rights

  

Smart technology verification and standard design project conducting right

   KRW      6,500       6 years and 3 months

Mining rights

  

Mining right of Bylong mine

   AUD      401,225       —  (*)

Development expenditures

  

Development of maintenance system for utility plant

   KRW      801       1 year and 5 months
  

CHF testing for best representative of HIPER/X2-Gen Fuel and development of best explanatory CHF correlation

   KRW      9,707       4 years and 11 months

Intangible assets under development

  

Contributions to ARP NRC DC

   KRW      37,014       —  

Usage rights of donated assets

  

Songdo international business district (sector 1, 3) sharing charge

   KRW      2,031       1 year and 4 months
  

Dangjin power plant load facility usage right

   KRW      29,907       4 years and 9 months

Others

  

Sillim electricity supply facility usage right

   KRW      2,419       5 years and 5 months
  

Next generation SCADA O/S (POWERON RELIANCE)

   KRW      3,781       3 years and 7 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 year and 6 months
  

Development of maintenance system for utility plant

   KRW      1,084       1 year 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 year 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 six-month periods ended June 30, 2016 and 2015, the Company recognized research and development expenses of 286,848 million and 262,652 million, respectively.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

22. Trade and Other Payables

Trade and other payables as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  
     Current      Non-current      Current      Non-current  

Trade payables

   1,439,700         —           1,957,647         —     

Other trade payables

     1,549,079         3,225,153         1,379,035         3,048,299   

Accrued expenses

     1,305,978         2,437         1,082,880         2,373   

Leasehold deposits received

     1,427         1,008         2,451         —     

Other deposits received

     200,855         96,013         195,237         105,105   

Finance lease liabilities

     118,699         481,256         116,885         542,509   

Dividends payable

     1,562         —           1,562         —     

Others

     —           12,628         —           20,149   
  

 

 

    

 

 

    

 

 

    

 

 

 
     4,617,300         3,818,495         4,735,697         3,718,435   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

23. Borrowings and Debt Securities

 

(1) Borrowings and debt securities as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Current liabilities

     

Short-term borrowings

   877,025         603,673   

Current portion of long-term borrowings

     268,164         541,307   

Current portion of debt securities

     8,565,885         6,704,602   

Less : Current portion of discount on long-term borrowings

     (955      (953

Less : Current portion of discount on debt securities

     (2,813      (1,676
  

 

 

    

 

 

 
     9,707,306         7,846,953   
  

 

 

    

 

 

 

Non-current liabilities

     

Long-term borrowings

     1,633,709         1,951,119   

Debt securities

     44,539,940         49,077,131   

Less : Discount on long-term borrowings

     (18,213      (18,860

Less : Discount on debt securities

     (93,980      (103,067

Add : Premium on debt securities

     191         223   
  

 

 

    

 

 

 
     46,061,647         50,906,546   
  

 

 

    

 

 

 
     55,768,953         58,753,499   
  

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

23. Borrowings and Debt Securities, Continued

 

(2) Repayment schedule of borrowings and debt securities as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won              

June 30, 2016

 

Type

   Borrowings      Debt Securities  

Less than 1 year

   1,145,189         8,565,885   

1 ~ 5 years

     374,245         23,586,790   

Over 5 years

     1,259,464         20,953,150   
  

 

 

    

 

 

 
     2,778,898         53,105,825   
  

 

 

    

 

 

 

 

In millions of won              

December 31, 2015

 

Type

   Borrowings      Debt Securities  

Less than 1 year

   1,144,980         6,704,602   

1 ~ 5 years

     860,351         27,725,651   

Over 5 years

     1,090,768         21,351,480   
  

 

 

    

 

 

 
     3,096,099         55,781,733   
  

 

 

    

 

 

 

 

(3) Short-term borrowings as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won and thousands of foreign currencies  

June 30, 2016

 

Type

 

Creditor

  Interest rate (%)      Maturity      Foreign
currency
     Local
currency
 

Local short-term borrowings

 

Woori Investment Bank and others

    1.51 ~ 2.17        
 
2016.07.05 ~
2016.08.23
  
  
     —         570,000   

Foreign short-term borrowings

 

SCNT and others

    6.50         2016.12.03       USD 2,163         2,519   

Foreign short-term borrowings

 

Export-Import Bank of Korea

    3M Libor + 0.54 ~ 0.65         2016.12.19       AUD   287,646         249,591   

Local bank overdraft

 

Nonghyup Bank

    2.71         2016.07.06         —           30,000   

Local bank overdraft

 

Woori Bank

    Standard overdraft rate + 1.12         2017.02.25         —           24,915   
            

 

 

 
               877,025   
            

 

 

 

 

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   
            

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

23. Borrowings and Debt Securities, Continued

 

(4) Long-term borrowings as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won and thousands of foreign currencies  

June 30, 2016

 

Type

   Interest rate
(%)
     Maturity      Foreign
currency
     Local
currency
 

Local long-term borrowings

              

Korea Development Bank

  

Others

     0.50         2018 ~ 2044         —         6,040   
  

Facility

     2.39 ~ 4.60         2023 ~ 2028         —           60,701   
  

Facility

     3yr KTB rate – 1.25         2027         —           9,000   
  

Facility

    

 

1yr KoFC bond rate

+ 0.31

  

  

     2018         —           175,000   
  

Operating funds

     2.75         2018         —           12,000   

KEB Hana Bank

  

Commercial Paper

     3M CD + 0.14         2017         —           100,000   
  

Facility

     3yr KTB rate – 1.25         2016 ~ 2028         —           10,009   
  

Facility

     4.60         2028         —           17,844   
  

Energy rationalization

     3yr KTB rate – 1.25         2019         —           550   
  

Energy rationalization

     3.20 ~ 3.70         2021 ~ 2022         —           3,726   

Korea Industrial Bank

  

PF Refinancing

     CD + 1.25         2030         —           22,500   

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         —           42,142   
  

Facility

     3yr KTB rate – 2.25         2016 ~ 2024         —           4,121   
  

Project loans

     —           2022 ~ 2027         —           8,669   
  

Others

     KTB rate – 2.25         2024 ~ 2025         —           12,594   

Shinhan Bank and others

  

Collateral borrowing

     2.22         2017         —           30,000   
  

Facility

    

 

3yr AA- CB rate

+ 1.10

  

  

     2028         —           26,767   
  

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         —           139,407   
  

Facility

     CB rate + 1.10         2028         —           17,844   
  

PF Refinancing

     4.10         2030         —           62,500   
  

Others

     4.32 ~ 8.00         2020 ~ 2036         —           123,847   
  

Others

     —           2028         —           7,250   
              

 

 

 
                 984,746   
              

 

 

 

Foreign long-term borrowings

              

Korea National Oil Corporation

  

Project loans

     —           2021 ~ 2023       USD 8,744         10,184   

Export-Import Bank of Korea and others

  

Direct loan and others

    
 
3M Libor +
2.75 ~ 3.70
  
  
     2027       JOD 183,803         302,154   
  

Commercial loan and others

    
 
3M Libor +
1.50 ~ 2.50
  
  
     2030 ~ 2033       USD 305,196         355,462   
  

PF Loan

    
 
6M Libor + 2.50 ~
2.70
  
  
     2032       USD 80,029         93,210   

SCNT and others

  

Shareholder’s loan

     6.50 ~ 8.00         2023       USD 38,084         44,356   
  

Shareholder’s loan

     8.00         2031       JOD 7,128         11,717   

PT PJB and others

  

Shareholder’s loan

     12.75         2017       IDR   23,947,397         2,119   

HSBC and others

  

Syndicated loan

    
 
3M Libor + 0.30 ~
0.50
  
  
     2017 ~ 2019       USD 21,186         24,675   

IFC and others

  

Others

     6M Libor + 5.00         2031       PKR   5,863,200         65,199   

Others

  

Others

     —           2019       USD 6,912         8,051   
              

 

 

 
                 917,127   
              

 

 

 
                 1,901,873   

Less : Discount of long-term borrowings

  

           (19,168

Less : Current portion of long-term borrowings

  

           (268,164

Add : Current portion of discount on long-term borrowings

  

           955   
              

 

 

 
                 1,615,496   
              

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

23. Borrowings and Debt Securities, Continued

 

(4) Long-term borrowings as of June 30, 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         —         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

     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 on long-term borrowings

  

           953   
              

 

 

 
                 1,932,259   
              

 

 

 

 

114


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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

23. Borrowings and Debt Securities, Continued

 

(5) Local debt securities as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won                                  
     Issue date      Maturity      Interest rate
(%)
     June 30, 2016     December 31, 2015  

Electricity Bonds (*1)

     2009.11.03 ~ 2014.08.27         2016.07.20 ~ 2033.08.06         2.73 ~ 5.51       20,960,000        22,960,000   

Electricity Bonds

     2012.06.11 ~ 2013.06.25         2016.09.11 ~ 2018.06.25        

 

3M CD +

0.25 ~ 0.32

  

  

     710,000        910,000   

Corporate Bonds (*2)

     2009.05.04 ~ 2016.03.31         2016.07.07 ~ 2040.12.10         1.88 ~ 5.84         20,492,708        20,710,010   
           

 

 

   

 

 

 
              42,162,708        44,580,010   
           

 

 

   

 

 

 

Less : Discount on local debt securities

  

        (36,646     (40,228

Less : Current portion of local debt securities

  

        (7,110,010     (5,730,000

Add : Current portion of discount on local debt securities

  

        1,380        1,187   
           

 

 

   

 

 

 
              35,017,432        38,810,969   
           

 

 

   

 

 

 

 

(*1) Electricity Bonds 885 (₩40,000 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 (₩2,697 million) can be redeemed every March 31 after five years from its issue date, March 31, 2016.

 

(6) Foreign debt securities as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won and thousands of foreign currencies  

June 30, 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 249,067       290,088   

FY-97

   1997.01.31 ~ 1997.08.04    2027.02.01 ~ 2027.08.01    6.75 ~ 7.00    USD 314,717         366,550   

FY-04

   2004.04.23    2034.04.23    5.13    USD 286,920         334,176   

FY-06

   2006.09.29    2016.09.29    5.5    USD 150,000         174,705   

FY-08

   2008.11.27    2018.11.27    4.19    JPY   20,000,000         226,430   

FY-11

   2011.07.13 ~ 2011.07.29    2017.01.30 ~ 2021.07.13    3.63 ~ 4.75    USD 800,000         931,760   

FY-12

   2012.05.10 ~ 2012.09.19    2017.05.10 ~ 2022.09.19    2.50 ~ 3.13    USD 1,750,000         2,038,225   

FY-13

   2013.02.05 ~ 2013.11.27    2018.02.05 ~ 2018.11.27    1.88 ~ 2.88    USD 1,900,000         2,212,930   

FY-13

   2013.09.26 ~ 2013.10.23    2019.03.26 ~ 2019.04.23    1.50 ~ 1.63    CHF 400,000         475,680   

FY-13

   2013.09.25    2020.09.25    5.75    AUD 325,000         282,003   

FY-13

   2013.02.20 ~ 2013.07.25    2018.02.20 ~ 2018.07.25    3M Libor + 0.84 ~ 1.50    USD 500,000         582,350   

FY-14

   2014.02.11 ~ 2014.12.02    2019.02.11 ~ 2029.07.30    2.38 ~ 3.57    USD 1,500,000         1,747,050   

FY-14

   2014.01.28 ~ 2014.07.31    2017.01.28 ~ 2017.07.31    3M Libor + 0.55 ~ 1.05    USD 500,000         582,350   

FY-15

   2015.06.15    2025.06.15    3.25    USD 300,000         349,410   

FY-16

   2016.01.21    2021.07.21    2.5    USD 300,000         349,410   
              

 

 

 
       10,943,117   

Less : Discount on foreign debt securities

        (60,147

Add : Premium on foreign debt securities

        191   

Less : Current portion of foreign debt securities

        (1,455,875

Add : Current portion of discount on foreign debt securities

        1,433   
              

 

 

 
   9,428,719   
              

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

23. Borrowings and Debt Securities, Continued

 

(6) Foreign debt securities as of June 30, 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       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 foreign debt securities

  

           223   

Less : Current portion of foreign debt securities

  

           (974,602

Add : Current portion of discount on foreign debt securities

  

           489   
              

 

 

 
     10,163,318   
              

 

 

 

 

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Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 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    June 30, 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

   178,792         118,699         182,072         116,885   

1 ~ 5 years

     464,747         350,120         525,465         393,957   

More than 5 years

     179,285         131,136         206,323         148,552   
  

 

 

    

 

 

    

 

 

    

 

 

 
     822,824         599,955         913,860         659,394   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(3) Current and non-current portion of finance lease liabilities as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Current finance lease liabilities

   118,699         116,885   

Non-current finance lease liabilities

     481,256         542,509   
  

 

 

    

 

 

 
     599,955         659,394   
  

 

 

    

 

 

 

 

(4) Lease payments recognized as an expense as a lessee for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-month
period ended
     Six-month
period ended
     Three-month
period ended
     Six-month
period ended
 

Minimum lease payment

     42,560         89,251         48,213         98,371   

Contingent rent payment

     (5,174      (10,607      (4,398      (8,886

 

(5) The Company does not have any irrevocable operating lease contracts as of June 30, 2016 and December 31, 2015.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

25. Employment Benefits

 

(1) Employment benefit obligations as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Net defined benefit obligations

   1,974,501         1,495,782   

Other long-term employee benefit obligations

     7,771         7,325   
  

 

 

    

 

 

 
     1,982,272         1,503,107   
  

 

 

    

 

 

 

 

(2) Principal assumptions on actuarial valuation as of June 30, 2016 and December 31, 2015 are as follows:

 

     June 30, 2016    December 31, 2015

Discount rate

   1.74% ~ 1.95%    2.39% ~ 2.58%

Future salary and benefit levels

   5.51%    5.43%

Weighted average duration

   13.29 years    13.21 years

 

(3) Details of expense relating to defined benefit plans for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-month
period ended
     Six-month
period ended
     Three-month
period ended
     Six-month
period ended
 

Current service cost

   88,609         174,369         77,322         154,171   

Interest cost

     16,195         32,057         15,767         30,892   

Expected return on plan assets

     (5,656      (11,424      (5,412      (10,836

Loss from settlement

     (13      (48      (239      (239
  

 

 

    

 

 

    

 

 

    

 

 

 
     99,135         194,954         87,438         173,988   
  

 

 

    

 

 

    

 

 

    

 

 

 

Expenses as described above are recognized in those items below in the financial statements.

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-month
period ended
     Six-month
period ended
     Three-month
period ended
     Six-month
period ended
 

Cost of sales

   73,266         144,478         59,298         123,561   

Selling and administrative expenses

     14,169         27,568         17,991         30,588   

Others (Construction-in-progress and others)

     11,700         22,908         10,149         19,839   
  

 

 

    

 

 

    

 

 

    

 

 

 
     99,135         194,954         87,438         173,988   
  

 

 

    

 

 

    

 

 

    

 

 

 

In addition, for the six-month periods ended June 30, 2016 and 2015, employee benefit obligations expenses of ₩29,717 million and ₩27,892 million, respectively, is recognized as cost of sales, and ₩5,495 million and ₩6,421 million, respectively, is recognized as selling and administrative expenses, and ₩6,879 million and ₩6,808 million, respectively, are recognized as construction-in-progress and others, relates to the Company’s defined contribution plans.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

25. Employment Benefits, Continued

 

(4) Details of defined benefit obligations as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Present value of defined benefit obligation from funded plans

   2,868,999         2,426,414   

Fair value of plan assets

     (894,498      (930,632
  

 

 

    

 

 

 
     1,974,501         1,495,782   

Present value of defined benefit obligation from unfunded plans

     —           —     
  

 

 

    

 

 

 

Net liabilities incurred from defined benefit plans

     1,974,501         1,495,782   
  

 

 

    

 

 

 

 

(5) Changes in the present value of defined benefit obligations for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Beginning balance

   2,426,414         1,992,447   

Current service cost

     174,369         315,811   

Interest cost (*)

     32,057         63,808   

Remeasurement component

     307,942         122,825   

Loss from settlement

     (48      (641

Actual payments

     (72,086      (67,291

Others

     351         (545
  

 

 

    

 

 

 

Ending balance

     2,868,999         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 six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Beginning balance

   930,632         724,250   

Expected return

     11,424         22,557   

Remeasurement component

     (1,352      (5,924

Contributions by the employers

     2,176         214,449   

Actual payments

     (48,382      (24,191

Others

     —           (509
  

 

 

    

 

 

 

Ending balance

     894,498         930,632   
  

 

 

    

 

 

 

In addition, loss on accumulated remeasurement component amounted to ₩341,750 million and ₩202,878 million has been recognized as other comprehensive loss for the six-month period ended June 30, 2016 and for the year ended December 31, 2015, respectively.

 

119


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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

25. Employment Benefits, Continued

 

(7) Details of the fair value of plan assets as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Equity instruments

   21,654         12,791   

Debt instruments

     304,524         243,372   

Bank deposit

     265,561         129,350   

Others

     302,759         545,119   
  

 

 

    

 

 

 
     894,498         930,632   
  

 

 

    

 

 

 

For the six-month period ended June 30, 2016 and for the year ended December 31, 2015, actual returns on plan assets amounted to ₩10,072 million and ₩16,633 million, respectively.

 

(8) Remeasurement component recognized in other comprehensive income (loss) for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Actuarial gain from changes in financial assumptions

   224,885         140,411   

Experience adjustments

     83,057         (17,586

Expected return

     1,352         5,924   
  

 

 

    

 

 

 
     309,294         128,749   
  

 

 

    

 

 

 

Remeasurement component recognized as other comprehensive income or loss is recorded in retained earnings.

 

120


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

26. Provisions

 

(1) Provisions as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  
     Current      Non-current      Current      Non-current  

Employment benefits

   727,448         —           718,365         —     

Provisions for employment benefits

     727,448         —           718,365         —     

Litigation

     53,972         152,559         57,737         110,228   

Litigation provisions

     53,972         152,559         57,737         110,228   

Decommissioning cost

     —           12,896,928         —           12,744,873   

Nuclear plants

     —           9,856,038         —           9,684,286   

Spent fuel

     —           1,375,185         —           1,375,185   

Waste

     —           1,491,897         —           1,502,140   

PCBs

     —           173,266         —           182,400   

Other recovery provisions

     —           542         —           862   

Others

     1,038,751         12,523         803,074         9,653   

Power plant regional support program

     172,231         —           129,655         —     

Transmission regional support program

     371,580         —           228,785         —     

Provisions for tax

     31         136         —           136   

Provisions for financial guarantee

     1,045         3,957         1,839         2,449   

Provisions for RPS

     449,633         —           363,178         —     

Provisions for greenhouse gas emissions obligations

     43,431         —           78,829         —     

Others

     800         8,430         788         7,068   
  

 

 

    

 

 

    

 

 

    

 

 

 
     1,820,171         13,062,010         1,579,176         12,864,754   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(2) Changes in provisions for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Beginning
balance
     Accretion
expenses
     Payment     Reversal     Other     Ending
balance
 

Employment benefits

   718,365         414,309         (405,226     —          —          727,448   

Provisions for employment benefits

     718,365         414,309         (405,226     —          —          727,448   

Litigation

     167,965         52,518         (7,925     (6,027     —          206,531   

Litigation provisions

     167,965         52,518         (7,925     (6,027     —          206,531   

Decommissioning cost

       12,744,873         434,705         (282,368     —          (282     12,896,928   

Nuclear plants

     9,684,286         171,926         (174     —          —          9,856,038   

Spent fuel

     1,375,185         248,451         (248,451     —          —          1,375,185   

Waste

     1,502,140         11,385         (21,681     —          53        1,491,897   

PCBs

     182,400         2,928         (12,062     —          —          173,266   

Other recovery provisions

     862         15         —          —          (335     542   

Others

     812,727         600,770         (351,160     (29,084     18,021        1,051,274   

Power plant regional support program

     129,655         44,874         (16,158     —          13,860        172,231   

Transmission regional support program

     228,785         233,165         (90,370     —          —          371,580   

Provisions for tax

     136         44         —          —          (13     167   

Provisions for financial guarantee

     4,288         2,567         —          (1,787     (66     5,002   

Provisions for RPS

     363,178         241,661         (143,231     (16,249     4,274        449,633   

Provisions for greenhouse gas emissions obligations

     78,829         75,991         (100,355     (11,034     —          43,431   

Others

     7,856         2,468         (1,046     (14     (34     9,230   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
   14,443,930         1,502,302         (1,046,679     (35,111     17,739        14,882,181   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

26. Provisions, Continued

 

(2) Changes in provisions for the six-month period ended June 30, 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

   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   
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

    

 

 

 
     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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Land

   (3,199      (3,147

Buildings

     (61,886      (63,932

Structures

     (193,982      (193,119

Machinery

     (114,972      (108,935

Vehicles

     (24      (29

Equipment

     (888      (1,026

Tools

     (564      (691

Construction-in-progress

       (135,502      (139,898

Investment properties

     (65      (13

Software

     (654      (699

Development expenditures

     (5,988      (6,835

Intangible assets under development

     (11,057      (10,483

Usage rights of donated assets and other

     (27      (32

Others

     (1      (1
  

 

 

    

 

 

 
   (528,809      (528,840
  

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

27. Government Grants, Continued

 

(2) Changes in government grants for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Beginning
balance
    Receipt     Acquisition      Offset the
items of
depreciation
expense and
others
     Disposal      Others     Ending
balance
 

Cash

   —          (17,065     —           —           —           17,065        —     

Land

     (3,147     —          —           —           13         (65     (3,199

Buildings

     (63,932     —          —           2,589         —           (543     (61,886

Structures

     (193,119     —          —           4,690         1,211         (6,764     (193,982

Machinery

     (108,935     —          —           5,874         827         (12,738     (114,972

Vehicles

     (29     —          —           5         —           —          (24

Equipment

     (1,026     —          —           250         —           (112     (888

Tools

     (691     —          —           145         —           (18     (564

Construction-in-progress

     (139,898)        —          19,470         —           —           (15,074     (135,502

Investment properties

     (13     —          —           —           —           (52     (65

Software

     (699     —          —           123         —           (78     (654

Development expenditures

     (6,835     —          —           1,370         —           (523     (5,988

Intangible assets under development

     (10,483     —          —           —           —           (574     (11,057

Usage rights of donated assets and other

     (32     —          —           5         —           —          (27

Others

     (1     —          —           —           —           —          (1
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 
   (528,840     (17,065     19,470         15,051         2,051         (19,476     (528,809
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 
In millions of won    December 31, 2015  
     Beginning
balance
    Receipt     Acquisition      Offset the
items of
depreciation
expense and
others
     Disposal      Others     Ending
balance
 

Cash

   —          (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
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 
   (521,719     (52,696     13,372         29,284         2,918         1        (528,840
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

28. Deferred Revenues

Deferred revenue related to the Company’s construction contracts as of June 30, 2016 and December 31, 2015 are as follows and included in current and non-current non-financial liabilities in the consolidated interim statements of financial position:

 

In millions of won    June 30, 2016      December 31, 2015  

Beginning balance

   7,165,297         6,850,016   

Increase during the current year / period

     513,313         691,276   

Recognized as revenue during the current year / period

     (198,213      (375,995
  

 

 

    

 

 

 

Ending balance

     7,480,397         7,165,297   
  

 

 

    

 

 

 

 

29. Non-financial Liabilities

Non-financial liabilities as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  
     Current      Non-current      Current      Non-current  

Advance received

   5,079,412         189,711         5,017,735         215,096   

Unearned revenue

     24,367         52,430         21,810         63,850   

Deferred revenue

     393,874         7,086,523         372,157         6,793,140   

Withholdings

     265,408         6,700         146,258         6,731   

Others

     875,891         17,765         762,751         13,435   
  

 

 

    

 

 

    

 

 

    

 

 

 
     6,638,952         7,353,129         6,320,711         7,092,252   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

30. Contributed Capital

 

(1) Details of shares issued as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won except share information  
     June 30, 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 ₩1,056,176 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 ₩1,056,176 million is included.

 

(2) Details in number of outstanding capital stock for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

Number of shares    June 30, 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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Share premium

     843,758         843,758   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

31. Retained Earnings and Dividends Paid

 

(1) Details of retained earnings as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Legal reserve (*)

   1,604,910         1,604,910   

Voluntary reserves

       31,847,274         23,720,167   

Retained earnings before appropriations

     16,418,167         22,862,164   
  

 

 

    

 

 

 

Retained earnings

   49,870,351         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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Reserve for investment on social overhead capital

   5,277,449         5,277,449   

Reserve for research and human development (*)

     330,000         330,000   

Reserve for business expansion

     26,029,825         17,902,718   

Reserve for equalizing dividends

     210,000         210,000   
  

 

 

    

 

 

 
     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 six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Beginning balance

     48,187,241         35,303,647   

Net profit for the period attributed to owner of the Company

     3,861,917         13,289,127   

Changes in equity method retained earnings

     (635      (280

Remeasurement of defined benefit liability, net of tax

     (188,083      (84,271

Dividend paid

     (1,990,089      (320,982
  

 

 

    

 

 

 

Ending balance

   49,870,351         48,187,241   
  

 

 

    

 

 

 

 

(4) Dividends paid for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won except share information    June 30, 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 except share information    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   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

31. Retained Earnings and Dividends Paid, Continued

 

(5) Changes in retained earnings of investments in associates and joint ventures for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Beginning balance

     (2,411      (2,131

Changes

     (635      (280
  

 

 

    

 

 

 

Ending balance

   (3,046      (2,411
  

 

 

    

 

 

 

 

(6) Changes in remeasurement components related to defined benefit liability for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Beginning balance

     (202,878      (116,705

Changes

     (295,895      (127,184

Income tax effect

     107,812         42,913   

Transfer to reserve for business expansion

     49,211         (1,902
  

 

 

    

 

 

 

Ending balance

   (341,750      (202,878
  

 

 

    

 

 

 

 

32. Hybrid Bonds

Bond-type hybrid securities classified as equity (non-controlling interest) as of June 30, 2016 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
  
  
   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
              

 

 

 
                 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

33. Other Components of Equity

 

(1) Other components of equity as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Other capital surpluses

   1,197,128         1,197,388   

Accumulated other comprehensive loss

     (78,483      (98,713

Other equity

     13,294,973         13,294,973   
  

 

 

    

 

 

 
     14,413,618         14,393,648   
  

 

 

    

 

 

 

 

(2) Changes in other capital surpluses for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016     December 31, 2015  
     Gain on
disposal of
treasury stocks
     Others     Subtotal     Gain on
disposal of
treasury stocks
     Others     Subtotal  

Beginning balance

   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

     —           (260     (260     —           2,536        2,536   

Income tax effect

     —           —          —          —           (14,144     (14,144
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

Ending balance

     387,524         809,604        1,197,128        387,524         809,864        1,197,388   
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

   

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

33. Other Components of Equity, Continued

 

(3) Changes in accumulated other comprehensive loss for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 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
gain (loss)
on valuation of

derivatives
    Total  

Beginning balance

   (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

     22,477        —          —          —          22,477   

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

     —          (39,226     —          —          (39,226

Foreign currency translation of foreign operations, net of tax

     —          —          6,493        —          6,493   

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

     —          —          —          30,486        30,486   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Ending balance

   (2,428     237,147        (247,969     (65,233     (78,483
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
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

   (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

   (24,905     276,373        (254,462     (95,719     (98,713
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(4) Details of other equity as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Statutory revaluation reserve

   13,295,098         13,295,098   

Changes in other equity

     (125      (125
  

 

 

    

 

 

 
     13,294,973         13,294,973   
  

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

34. Sales

Details of sales for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016  
     Domestic      Overseas      Total  
     Three-month
period ended
     Six-month
period ended
     Three-month
period ended
     Six-month
period ended
     Three-month
period ended
     Six-month
period ended
 

Sales of goods

     12,064,001         26,480,221         91,549         177,263         12,155,550         26,657,484   

Electricity

     11,901,887         26,084,082         —           —           11,901,887         26,084,082   

Heat supply

     11,119         124,083         —           —           11,119         124,083   

Others

     150,995         272,056         91,549         177,263         242,544         449,319   

Sales of service

     52,824         93,612         21,274         84,116         74,098         177,728   

Sales of construction services

     37,507         63,844         907,974         1,863,482         945,481         1,927,326   

Revenue related to transfer of assets from customers

     100,295         198,213         —           —           100,295         198,213   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     12,254,627         26,835,890         1,020,797         2,124,861         13,275,424         28,960,751   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
In millions of won    June 30, 2015  
     Domestic      Overseas      Total  
     Three-month
period ended
     Six-month
period ended
     Three-month
period ended
     Six-month
period ended
     Three-month
period ended
     Six-month
period ended
 

Sales of goods

   12,182,113         26,312,234         82,378         185,241         12,264,491         26,497,475   

Electricity

     12,029,496         25,893,559         —           —           12,029,496         25,893,559   

Heat supply

     15,726         144,286         —           —           15,726         144,286   

Others

     136,891         274,389         82,378         185,241         219,269         459,630   

Sales of service

     51,458         96,396         70,125         119,975         121,583         216,371   

Sales of construction services

     51,373         92,356         1,141,203         1,804,729         1,192,576         1,897,085   

Revenue related to transfer of assets from customers

     93,176         184,754         —           —           93,176         184,754   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   12,378,120         26,685,740         1,293,706         2,109,945         13,671,826         28,795,685   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

35. Selling and Administrative Expenses

Selling and administrative expenses for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-
month
period
ended
     Six-
month
period
ended
     Three-
month
period
ended
     Six-
month period
ended
 

Salaries

     168,355         336,662         149,536         310,148   

Retirement benefit expense

     16,990         33,063         15,170         30,238   

Welfare and benefit expense

     27,052         50,729         34,390         57,425   

Insurance expense

     2,662         5,642         2,722         5,385   

Depreciation

     36,928         73,455         24,075         47,861   

Amortization of intangible assets

     8,976         17,959         10,218         21,826   

Bad debt expense

     10,190         15,228         —           —     

Reversal of allowance for bad debt

     —           —           (5,893      (17,471

Commission

     164,691         300,178         166,025         300,868   

Advertising expense

     10,287         16,956         8,199         13,779   

Training expense

     1,249         2,145         1,048         2,158   

Vehicle maintenance expense

     2,506         4,625         2,760         5,114   

Publishing expense

     1,134         1,903         686         1,236   

Business promotion expense

     867         1,756         963         1,719   

Rent expense

     10,571         19,143         9,224         19,356   

Telecommunication expense

     6,938         13,537         5,907         11,933   

Transportation expense

     163         288         159         300   

Taxes and dues

     28,694         32,550         36,978         39,565   

Expendable supplies expense

     1,354         2,628         1,250         3,261   

Water, light and heating expense

     1,990         5,039         2,118         5,567   

Repairs and maintenance expense

     20,820         28,781         10,476         15,379   

Ordinary development expense

     35,022         70,192         40,163         73,704   

Travel expense

     4,661         9,009         3,497         7,503   

Clothing expense

     776         1,016         1,151         1,208   

Survey and analysis expense

     155         311         140         283   

Membership fee

     163         762         247         670   

Others

     29,064         57,558         31,334         55,352   
  

 

 

    

 

 

    

 

 

    

 

 

 
   592,258         1,101,115         552,543         1,014,367   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

36. Other Non-operating Income and Expense

 

(1) Other non-operating income for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-
month
period
ended
     Six-
month
period
ended
     Three-
month
period
ended
     Six-
month
period
ended
 

Reversal of other provisions

   1,075         5,612         5,076         6,734   

Reversal of other allowance for bad debt

     4,799         5,786         —           —     

Gains on government grants

     —           36         —           —     

Gains on assets contributed

     188         1,516         880         3,092   

Gains on liabilities exempted

     302         305         34         2,371   

Compensation and reparations revenue

     39,814         63,944         34,319         86,856   

Gains on electricity infrastructure development fund

     —           —           220         363   

Revenue from research contracts

     1,593         2,427         1,394         4,531   

Rental income

     47,757         101,941         47,528         95,786   

Others

     7,482         13,745         6,879         13,962   
  

 

 

    

 

 

    

 

 

    

 

 

 
     103,010         195,312         96,330         213,695   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(2) Other non-operating expense for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-
month
period
ended
     Six-
month
period
ended
     Three-
month
period
ended
     Six-
month
period
ended
 

Accretion expenses of other provisions

   70         119         272         316   

Depreciation expenses on investment properties

     131         329         185         347   

Depreciation expenses on idle assets

     1,641         3,311         1,666         3,332   

Other bad debt expense

     1,163         5,108         5,168         12,983   

Donations

     23,726         35,387         4,742         17,162   

Others

     5,157         8,336         4,947         5,977   
  

 

 

    

 

 

    

 

 

    

 

 

 
     31,888         52,590         16,980         40,117   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

37. Other Gains (Losses)

Composition of other gains (losses) for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-
month
period
ended
     Six-
month
period
ended
     Three-
month
period
ended
     Six-
month
period
ended
 

Other gains

           

Gains on disposal of property plant, and equipment

   11,360         29,958         78,854         96,769   

Gains on disposal of intangible assets

     —           —           32         32   

Gains on foreign currency translation

     4,246         8,653         1,823         2,984   

Gains on foreign currency transaction

     12,573         23,789         10,999         19,798   

Gains on insurance proceeds

     —           —           25         25   

Others

     44,319         93,731         26,786         78,513   

Other losses

           

Losses on disposal of property plant and equipment

     (16,871      (21,131      (28,689      (41,044

Losses on disposal of intangible assets

     (4      (138      —           (5

Impairment loss on property, plant and equipment

     —           —           (1,205      (1,205

Losses on foreign currency translation

     (544      (4,275      (3,472      (9,978

Losses on foreign currency transaction

     (13,731      (33,666      (23,864      (35,632

Others

     (10,465      (26,135      (14,048      (37,122
  

 

 

    

 

 

    

 

 

    

 

 

 
     30,883         70,786         47,241         73,135   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

38. Finance Income

 

(1) Finance income for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-
month period
ended
     Six-
month period
ended
     Three-
month period
ended
     Six-
month period
ended
 

Interest income

   52,202         132,521         55,515         105,008   

Dividends income

     628         9,995         8,107         13,564   

Gains on disposal of financial assets

     —           1,480         —           —     

Gains on valuation of derivatives

     128,487         53,758         160,714         239,814   

Gains on transaction of derivatives

     9,085         23,040         6,693         13,653   

Gains on foreign currency translation

     6,517         142,766         39,297         64,084   

Gains on foreign currency transaction

     10,795         15,885         5,099         12,186   

Others

     —           1         41         64   
  

 

 

    

 

 

    

 

 

    

 

 

 
     207,714         379,446         275,466         448,373   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

38. Finance Income, Continued

 

(2) Interest income included in finance income for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-
month period
ended
     Six-
month period
ended
     Three-
month period
ended
     Six-
month period
ended
 

Cash and cash equivalents

   17,856         38,539         13,297         25,188   

Available-for-sale financial assets

     —           —           —           29   

Held-to-maturity investments

     29         54         24         48   

Loans and receivables

     7,163         14,101         4,400         11,174   

Short-term financial instrument

     6,406         25,457         5,668         8,532   

Long-term financial instrument

     2,334         4,895         2,643         5,572   

Trade and other receivables

     18,414         49,475         29,483         54,465   
  

 

 

    

 

 

    

 

 

    

 

 

 
       52,202         132,521           55,515         105,008   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

39. Finance Expenses

 

(1) Finance expenses for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-
month
period
ended
     Six-
month period
ended
     Three-
month period
ended
     Six-
month
period
ended
 

Interest expense

   423,024         881,259         525,807         1,078,463   

Losses on sale of financial assets

     —           —           2,008         2,983   

Impairment of available-for-sale financial assets

     93         93         8,172         13,993   

Losses on valuation of derivatives

     630         53,318         8,583         22,920   

Losses on transaction of derivatives

     59,933         70,787         9,909         19,323   

Losses on foreign currency translation

     111,999         101,445         222,763         303,946   

Losses on foreign currency transaction

     14,775         42,388         5,760         8,474   

Others

     150         259         39         63   
  

 

 

    

 

 

    

 

 

    

 

 

 
     610,604         1,149,549         783,041         1,450,165   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(2) Interest expense included in finance expenses for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  
     Three-
month
period
ended
     Six-
month period
ended
     Three-
month period
ended
     Six-
month
period
ended
 

Trade and other payables

   17,103         33,506         24,211         45,120   

Short-term borrowings

     1,339         2,819         4,647         7,937   

Long-term borrowings

     19,879         42,449         23,463         55,914   

Debt securities

     488,866         988,164         540,967         1,096,019   

Other financial liabilities

     119,916         240,739         151,143         303,686   
  

 

 

    

 

 

    

 

 

    

 

 

 
     647,103         1,307,677         744,431         1,508,676   
  

 

 

    

 

 

    

 

 

    

 

 

 

Less: capitalized borrowing costs

     (224,079      (426,418      (218,624      (430,213
  

 

 

    

 

 

    

 

 

    

 

 

 
     423,024         881,259         525,807         1,078,463   
  

 

 

    

 

 

    

 

 

    

 

 

 

Capitalization rates for the six-month periods ended June 30, 2016 and 2015 are 2.31% ~ 4.12% and 2.71% ~ 4.22%, respectively.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

40. Income Taxes

 

(1) Income tax expense for the six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won              
     June 30, 2016      June 30, 2015  

Current income tax expense

     

Payment of income tax

   1,815,868         566,854   

Adjustment due to changes in estimates related to prior years

     40,194         (33,971

Current income tax directly recognized in equity

     80,873         3,440   
  

 

 

    

 

 

 
     1,936,935         536,323   
  

 

 

    

 

 

 

Deferred income tax expense

     

Generation and realization of temporary differences

     50,687         9,105   

Changes of unrecognized tax losses, tax credit and temporary differences for prior periods

     (7,533      65,138   

Changes in deferred tax on tax losses carryforwards

     —           612,970   

Tax credit carryforwards

     2,260         3,266   
  

 

 

    

 

 

 
     45,414         690,479   
  

 

 

    

 

 

 

Income tax expense

     1,982,349         1,226,802   
  

 

 

    

 

 

 

 

(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 six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won             
     June 30, 2016     June 30, 2015  

Income before income tax

     5,912,970        3,791,803   
  

 

 

   

 

 

 

Income tax expense computed at applicable tax rate of 24.2%

     1,430,939        917,616   
  

 

 

   

 

 

 

Adjustments

    

Additional payment of income taxes or receipt of income tax refunds

     (518     (6,308

Effect of applying gradual tax rate

     (2,293     (1,397

Effect of non-taxable income

     (9,476     (74,841

Effect of non-deductible expenses

     5,838        84,491   

Effects of tax credits and deduction

     (26,052     (5,351

Recognition (reversal) of unrecognized deferred tax asset, net

     (7,533     64,448   

Deferred income tax related to investments in subsidiaries and associates

     542,254        272,782   

Others, net

     8,478        (24,638
  

 

 

   

 

 

 
     510,698        309,186   

Adjustment in respect of prior years

     40,712        —     
  

 

 

   

 

 

 

Income tax expense

   1,982,349        1,226,802   
  

 

 

   

 

 

 

Effective tax rate

     33.50     32.40

 

(3) Income tax directly adjusted to shareholders’ equity (except for accumulated other comprehensive loss) for the six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  

Dividends of hybrid securities

   2,627         2,612   

Gain on disposal of investments in subsidiaries

     —           (14,065
  

 

 

    

 

 

 
   2,627         (11,453
  

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

40. Income Taxes, Continued

 

(4) Income tax recognized as other comprehensive income (loss) for the six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  

Income tax recognized as other comprehensive income (loss)

     

Loss on valuation of available-for-sale financial assets

   (8,916      (11,763

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

     (22,581      9,951   

Remeasurements of defined benefit obligations

       107,812         18,933   

Investments in associates

     1,526         (559

Others

     405         (1,669
  

 

 

    

 

 

 
   78,246         14,893   
  

 

 

    

 

 

 

 

(5) Changes in deferred income tax assets (liabilities) recognized in the statements of financial position for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  
     Beginning
balance
    Amounts
recognized in
profit or loss
    Amount
recognized in
other
comprehensive
income or loss
    Amounts
recognized
directly
in equity
     Ending
balance
 

Deferred income tax on temporary differences

           

Employee benefits

   407,342        41,123        107,812        —           556,277   

Cash flow hedge

     (29,013     34,503        (22,581     —           (17,091

Investments in associates or subsidiaries

     (6,449,998     (491,618     1,526        —           (6,940,090

Property, plant and equipment

     (5,495,786     14,245        —          —           (5,481,541

Finance lease

     (272,430     (5,870     —          —           (278,300

Intangible assets

     9,420        (60     —          —           9,360   

Financial assets at fair value through profit or loss

     (4     107        —          —           103   

Available-for-sale financial assets

     (49,199     679        (8,916     —           (57,436

Deferred revenue

     215,361        (7,439     —          —           207,922   

Provisions

     3,372,423        118,553        —          —           3,490,976   

Doubtful receivables

     1,405        1,291        —          —           2,696   

Other finance liabilities

     26,298        (1,034     —          2,627         27,891   

Gains or losses on foreign exchange translation

     128,714        (4,983     —          —           123,731   

Allowance for doubtful accounts

     18,976        (1,989     —          —           16,987   

Accrued income

     (11,231     2,930        —          —           (8,301

Special deduction for property, plant and equipment

     (194,347     (57     —          —           (194,404

Reserve for research and human development

     (20,688     3,059        —          —           (17,629

Others

     576,585        172,530        405        —           749,520   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 
     (7,766,172     (124,030     78,246        2,627         (7,809,329
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

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   
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 
     (7,739,060     (126,287     78,246        2,627         (7,784,474
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

40. Income Taxes, Continued

 

(5) Changes in deferred income tax assets (liabilities) recognized in the statements of financial position for the six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows, continued:

 

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

   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   

Gains or 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   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     (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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Deferred income tax assets

   752,896         623,623   

Deferred income tax liabilities

     (8,537,370      (8,362,683
  

 

 

    

 

 

 
     (7,784,474      (7,739,060
  

 

 

    

 

 

 

 

(7) Details of deductible temporary differences, tax losses and unused tax credits not recognized in the deferred income tax assets as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Deductible temporary differences

     426,162         441,704   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

41. Assets Held-for-Sale

Assets held-for-sale as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Land (*1)

   2,907         2,907   

Building (*1)

     20,366         20,366   

Investments in associates (*2,3)

     56,374         56,374   
  

 

 

    

 

 

 
     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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

42. Expenses Classified by Nature

Expenses classified by nature for the six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016  
     Selling and
administrative expenses
     Cost of sales      Total  

Raw materials used

   —           6,215,759         6,215,759   

Salaries

     336,662         1,559,841         1,896,503   

Retirement benefit expense

     33,063         174,195         207,258   

Welfare and benefit expense

     50,729         180,174         230,903   

Insurance expense

     5,642         43,159         48,801   

Depreciation

     73,455         4,170,892         4,244,347   

Amortization of intangible assets

     17,959         19,462         37,421   

Bad debt expense

     15,228         —           15,228   

Commission

     300,178         203,621         503,799   

Advertising expense

     16,956         3,911         20,867   

Training expense

     2,145         5,010         7,155   

Vehicle maintenance expense

     4,625         3,210         7,835   

Publishing expense

     1,903         1,882         3,785   

Business promotion expense

     1,756         2,300         4,056   

Rent expense

     19,143         63,680         82,823   

Telecommunication expense

     13,537         38,626         52,163   

Transportation expense

     288         2,433         2,721   

Taxes and dues

     32,550         241,027         273,577   

Expendable supplies expense

     2,628         14,319         16,947   

Water, light and heating expense

     5,039         9,497         14,536   

Repairs and maintenance expense

     28,781         828,078         856,859   

Ordinary development expense

     70,192         216,656         286,848   

Travel expense

     9,009         33,123         42,132   

Clothing expense

     1,016         1,362         2,378   

Survey and analysis expense

     311         1,395         1,706   

Membership fee

     762         7,736         8,498   

Power purchase

     —           5,240,815         5,240,815   

Others

     57,558         2,267,632         2,325,190   
  

 

 

    

 

 

    

 

 

 
     1,101,115         21,549,795         22,650,910   
  

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

42. Expenses Classified by Nature, Continued

 

Expenses classified by nature for the six-month periods ended June 30, 2016 and 2015 are as follows, continued:

 

In millions of won    June 30, 2015  
     Selling and
administrative expenses
     Cost of sales      Total  

Raw materials used

   —           7,768,317         7,768,317   

Salaries

     310,148         1,396,119         1,706,267   

Retirement benefit expense

     30,238         158,224         188,462   

Welfare and benefit expense

     57,425         231,502         288,927   

Insurance expense

     5,385         41,454         46,839   

Depreciation

     47,861         3,952,072         3,999,933   

Amortization of intangible assets

     21,826         15,821         37,647   

Reversal of allowance for bad debt

     (17,471      —           (17,471

Commission

     300,868         164,648         465,516   

Advertising expense

     13,779         3,074         16,853   

Training expense

     2,158         3,807         5,965   

Vehicle maintenance expense

     5,114         4,200         9,314   

Publishing expense

     1,236         1,748         2,984   

Business promotion expense

     1,719         1,953         3,672   

Rent expense

     19,356         65,416         84,772   

Telecommunication expense

     11,933         36,859         48,792   

Transportation expense

     300         2,704         3,004   

Taxes and dues

     39,565         214,914         254,479   

Expendable supplies expense

     3,261         12,903         16,164   

Water, light and heating expense

     5,567         13,359         18,926   

Repairs and maintenance expense

     15,379         808,114         823,493   

Ordinary development expense

     73,704         188,948         262,652   

Travel expense

     7,503         25,957         33,460   

Clothing expense

     1,208         1,509         2,717   

Survey and analysis expense

     283         1,178         1,461   

Membership fee

     670         5,847         6,517   

Power purchase

     —           6,186,371         6,186,371   

Others

     55,352         2,146,450         2,201,802   
  

 

 

    

 

 

    

 

 

 
     1,014,367         23,453,468         24,467,835   
  

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

43. Earnings Per Share

 

(1) Basic earnings per share for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In won              

Type

   June 30, 2016      June 30, 2015  
   Three-
month
period
ended
     Six-
month
period
ended
     Three-
month
period
ended
     Six-
month
period
ended
 

Basic earnings per share

     2,689         6,016         2,034         3,903   

 

(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 and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won except number of shares              

Type

   June 30, 2016      June 30, 2015  
   Three-
month
period
ended
     Six-
month
period
ended
     Three-
month
period
ended
     Six-
month
period
ended
 

Controlling interest in net income

   1,726,467         3,861,917         1,305,183         2,505,266   

Profit used in the calculation of total basic earnings per share

     1,726,467         3,861,917         1,305,183         2,505,266   

Weighted average number of common shares

     641,964,077         641,964,077         641,964,077         641,964,077   

 

(3) Weighted average number of common shares used in the calculation of basic earnings per share for the three and six-month periods ended June 30, 2016 and 2015 are as follows:

 

In number of shares              
     June 30, 2016      June 30, 2015  

Type

   Three-
month
period
ended
     Six-
month
period
ended
     Three-
month
period
ended
     Six-
month
period
ended
 

The number of common shares issued at beginning of the year

     641,964,077         641,964,077         641,964,077         641,964,077   

Weighted average number of common shares

     641,964,077         641,964,077         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 six-month periods ended June 30, 2016 and 2015.

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016     December 31, 2015  

Total borrowings and debt securities

     55,768,953        58,753,499   

Cash and cash equivalents

     3,360,776        3,783,065   
  

 

 

   

 

 

 

Net borrowings and debt securities

     52,408,177        54,970,434   
  

 

 

   

 

 

 

Total shareholder’s equity

     69,639,638        67,942,475   
  

 

 

   

 

 

 

Debt to equity ratio

     75.26     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.

 

  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.

 

  Impairment and allowance account

In accordance with the Company policies, individually 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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Cash and cash equivalents

     3,360,776         3,783,065   

Derivative assets (trading)

     267,345         255,008   

Available-for-sale financial assets

     1,033,110         584,479   

Held-to-maturity investments

     3,545         3,623   

Loans and receivables

     832,661         735,057   

Long-term/short-term financial instruments

     2,122,059         5,890,866   

Derivative assets (using hedge accounting)

     296,837         362,142   

Trade and other receivables

     8,537,451         9,271,967   

Financial guarantee contracts (*)

     282,134         271,010   

 

(*) Maximum exposure associated with the financial guarantee contracts is the maximum amounts of the obligation.

Financial guarantee contracts as of June 30, 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 74,638       86,930   

Joint ventures

   PT. Tanjung Power Indonesia    USD 35,000         40,765   

Joint ventures

   Kelar S.A    USD  132,600         154,439   
     

 

 

    

 

 

 
      USD 242,238         282,134   
     

 

 

    

 

 

 

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.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

44. Risk Management, Continued

 

(2) Financial risk management, continued

 

  (iii) Sensitivity analysis

Significant assets and liabilities with uncertainties in underlying assumptions

 

  Defined benefit obligation

A sensitivity analysis of defined benefit obligation assuming a 1% increase and decrease movements in the actuarial valuation assumptions as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016     December 31, 2015  

Type

  

Accounts

   1% Increase     1% Decrease     1% Increase     1% Decrease  

Future salary increases

   Increase (decrease) in defined benefit obligation    373,366        (332,146     293,205        (271,758

Discount rate

   Increase (decrease) in defined benefit obligation        (325,956     388,073        (267,648     315,870   

Changes of employee benefits assuming a 1% increase and decrease movements in discount rate on plan asset for the six-month periods ended June 30, 2016 and 2015 are ₩3,026 million and ₩3,620 million, respectively.

 

  Provisions

Changes in provisions due to movements in underlying assumptions as of June 30, 2016 and December 31, 2015 are as follows:

 

Type

  

Accounts

   June 30, 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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won         June 30, 2016     December 31, 2015  

Type

  

Accounts

   0.1% Increase     0.1% Decrease     0.1% Increase     0.1% Decrease  

Discount rate

   PCBs    (798     804        (875     881   
  

Nuclear plants

       (200,202     205,497        (201,318     206,720   
  

Spent fuel

     (52,390     54,425        (52,390     54,425   

Inflation rate

   PCBs      899        (895     885        (881
  

Nuclear plants

     224,600        (218,867     220,720        (215,086
  

Spent fuel

     55,212        (53,219     55,212        (53,219

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

44. Risk Management, Continued

 

(2) Financial risk management, continued

 

Management judgment effected by uncertainties in underlying assumptions

 

  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 June 30, 2016 and December 31, 2015 are as follows:

 

In thousands of foreign currencies    Assets      Liabilities  

Type

   June 30,
2016
     December 31,
2015
     June 30,
2016
     December 31,
2015
 

AUD

     157         158         321,986         595,284   

BWP

     983         301         314         —     

CAD

     —           —           —           858   

CNY

     —           —           26,140         26,140   

EUR

     11,619         6,141         13,059         33,552   

MXN

     7,702         7,704         869         —     

PHP

     678,766         489,309         43,626         77,337   

SAR

     1,205         1,083         —           —     

USD

     1,166,391         1,260,094         9,181,721         9,331,854   

INR

     745,100         972,175         123,114         206,159   

PKR

     250,038         211,212         2,952         12,928   

MGA

     3,562,024         2,768,360         86,088         151,729   

JPY

     731,847         1,425,163         733,989         20,325,211   

KZT

     48         47,177         —           —     

GBP

     —           —           11         99   

CHF

     68         —           200,304         400,029   

AED

     4,294         1,481         761         1,705   

ZAR

     438         238         4         —     

JOD

     2,383         2,972         6         —     

BDT

     41,385         43,332         539         889   

TWD

     —           —           —           30   

SEK

     —           —           1,183         —     

A sensitivity analysis on the Company’s income for the period assuming a 10% increase and decrease in currency exchange rates as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Type

   10% Increase      10% Decrease      10% Increase      10% Decrease  

Increase (decrease) of income before income tax

     (982,478      982,478         (1,063,285      1,063,285   

Increase (decrease) of shareholder’s equity (*)

     (982,478      982,478         (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 June 30, 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.

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

44. Risk Management, Continued

 

(2) Financial risk management, continued

 

  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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won              

Type

   June 30, 2016      December 31, 2015  

Short-term borrowings

   274,506         41,608   

Long-term borrowings

     1,304,777         1,977,745   

Debt securities

     1,874,700         2,082,000   
  

 

 

    

 

 

 
     3,453,983         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 six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows

 

In millions of won    June 30, 2016      December 31, 2015  

Type

   1% Increase      1% Decrease      1% Increase      1% Decrease  

Increase (decrease) of profit before income tax

     (34,540      34,540         (41,014      41,014   

Increase (decrease) of shareholder’s equity (*)

     (34,540      34,540         (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.

 

  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 six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won    June 30, 2016      June 30, 2015  

Type

   1% Increase      1% Decrease      1% Increase      1% Decrease  

Increase (decrease) of profit before income tax

     260,841         (260,841      258,936         (258,936

Increase (decrease) of shareholder’s equity (*)

     260,841         (260,841      258,936         (258,936

 

(*) The effect on the shareholders’ equity excluding the impact of income taxes.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 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    June 30, 2016  

Type

   Less than
1 year
     1~2 Years      2~5 Years      More than
5 years
     Total  

Borrowings and debt securities

   11,561,691         8,495,493         21,162,506         26,861,556         68,081,246   

Finance lease liabilities

     178,792         175,023         289,724         179,285         822,824   

Trade and other payables

     4,498,601         301,492         631,447         2,404,300         7,835,840   

Financial guarantee contracts (*)

     196,368         61,729         24,037         —           282,134   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     16,435,452         9,033,737         22,107,714         29,445,141         77,022,044   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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

   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   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     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 June 30, 2016 and December 31, 2015 are ₩5,002 million and ₩4,288 million, respectively.

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

44. Risk Management, Continued

 

(2) Financial risk management, continued

 

The expected maturities for non-derivative financial assets as of June 30, 2016 and December 31, 2015 in detail are as follows:

 

In millions of won    June 30, 2016  

Type

   Less than
1 year
     1~5 Years      More than
5 years
     Other (*)      Total  

Cash and cash equivalents

     3,360,776         —           —           —           3,360,776   

Available-for-sale financial assets

     —           —           —           1,033,110         1,033,110   

Held-to-maturity investments

     351         3,194         —           —           3,545   

Loans and receivables

     198,788         395,309         276,254         8,489         878,840   

Long-term/short-term financial instruments

     1,773,426         5,000         343,301         332         2,122,059   

Trade and other receivables

     6,735,229         869,018         866,787         74,672         8,545,706   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     12,068,570         1,272,521         1,486,342         1,116,603         15,944,036   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
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

     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   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  

Type

   Less than
1 year
    1~2 Years     2~5 Years     More than
5 years
    Total  

Gross settlement

          

- Trading

     ₩    (7,230     (15,613     (39,204     (3,842     (65,889

- Hedging

     (3,465     (3,686     (8,094     (93,281     (108,526
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     ₩  (10,695     (19,299     (47,298     (97,123     (174,415
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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

     ₩    (9,552     (4,627     (47,971     —          (62,150

- Hedging

     1,260        2,032        (44,233     (62,534     (103,475
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     ₩    (8,292     (2,595     (92,204     (62,534     (165,625
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Type

   Book value      Fair value      Book value      Fair value  

Assets recognized at fair value

           

Available-for-sale financial assets (*1)

   1,033,110         1,033,110         584,479         584,479   

Derivative assets (trading)

     267,345         267,345         255,008         255,008   

Derivative assets (using hedge accounting)

     296,837         296,837         362,142         362,142   

Long-term financial instruments

     348,633         348,633         758,037         758,037   

Short-term financial instruments

     1,773,426         1,773,426         5,132,829         5,132,829   
  

 

 

    

 

 

    

 

 

    

 

 

 
     3,719,351         3,719,351         7,092,495         7,092,495   
  

 

 

    

 

 

    

 

 

    

 

 

 

Assets carried at amortized cost

           

Held-to-maturity investments

     3,545         3,545         3,623         3,623   

Loans and receivables

     832,661         832,661         735,057         735,057   

Trade and other receivables

     8,537,451         8,537,451         9,271,967         9,271,967   

Cash and cash equivalents

     3,360,776         3,360,776         3,783,065         3,783,065   
  

 

 

    

 

 

    

 

 

    

 

 

 
     12,734,433         12,734,433         13,793,712         13,793,712   
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities recognized at fair value

           

Derivative liabilities (trading)

     22,636         22,636         49,011         49,011   

Derivative liabilities (using hedge accounting)

     149,955         149,955         117,499         117,499   
  

 

 

    

 

 

    

 

 

    

 

 

 
     172,591         172,591         166,510         166,510   
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities carried at amortized cost

           

Secured borrowings

     652,027         652,027         641,363         641,363   

Unsecured bond

     53,009,223         58,278,597         55,677,213         59,619,941   

Finance lease liabilities

     599,955         599,955         659,394         659,394   

Unsecured borrowings

     2,052,788         2,070,795         2,407,690         2,427,847   

Trade and other payables (*2)

     7,835,840         7,835,840         7,794,738         7,794,738   

Bank overdraft

     54,915         54,915         27,233         27,233   
  

 

 

    

 

 

    

 

 

    

 

 

 
     64,204,748         69,492,129         67,207,631         71,170,516   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(*1) Book values of equity securities held by the Company that were measured at cost as of June 30, 2016 and December 31, 2015 are ₩216,840 million and ₩207,508 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.

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 2016 and December 31, 2015 are as follows:

 

Type

   June 30, 2016    December 31, 2015

Derivatives

   0.46% ~ 4.16%    0.28% ~ 4.16%

Borrowings and debt securities

   0.15% ~ 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 June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016  

Type

   Level 1      Level 2      Level 3      Total  

Financial assets at fair value

           

Available-for-sale financial assets

     226,300         409,581         180,389         816,270   

Derivative assets

     —           564,182         —           564,182   
  

 

 

    

 

 

    

 

 

    

 

 

 
     226,300         973,763         180,389         1,380,452   
  

 

 

    

 

 

    

 

 

    

 

 

 

Financial liabilities at fair value

           

Derivative liabilities

     —           172,591         —           172,591   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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

     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.

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 six-month period ended June 30, 2016 and for the year ended December 31, 2015 are as follows:

 

In millions of won    June 30, 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         —           —           (1     —           —           180,389   

 

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   

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 June 30, 2016 are as follows:

 

In millions of won       

Type

   Amounts  

Less than 1 year

     121,658   

1 ~ 2 years

     121,658   

2 ~ 3 years

     121,658   

Over 3 years

     354,834   
  

 

 

 
   719,808   
  

 

 

 

 

(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, water usage cost, 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 June 30, 2016 are as follows:

 

In millions of won       

Type

   Amounts  

Less than 1 year

   —     

1 ~ 2 years

     26,797   

2 ~ 3 years

     29,224   

Over 3 years

     669,912   
  

 

 

 
     725,933   
  

 

 

 

 

  (iv) Accumulated contract costs and profits related to the Company’s contract in process as of June 30, 2016 were ₩96,009 million and ₩6,042 million, respectively. There are no amount due from customers and advance receipts in progress.

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties

 

(1) Related parties of the Company as of June 30, 2016 are as follows:

 

Type

 

Related party

Parent   Republic of Korea government

Subsidiaries

(81 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, 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., Solar School Plant Co., Ltd., KEPCO Energy Solution Co. Ltd.

Associates

(55 associates)

  Daegu Green Power Co., Ltd., Dongducheon Dream Power Co., Ltd., Korea Gas Corporation, SE Green Energy Co., Ltd., Daegu Photovoltaic Co., Ltd., Jeongam Wind Power Co., Ltd., 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., Taeback Guinemi Wind Power Co., Ltd. (formerly, 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., 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., 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., Korea Electric Power Corporation Fund

Joint ventures

(39 joint ventures)

  KEPCO SPC Power Corporation, Daejung Offshore Wind Power Co., Ltd., KAPES, Inc. (formerly, KEPCO-ALSTOM Power Electronics Systems, Inc.), Dangjin Eco Power Co., Ltd., 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 I LLC, KODE NOVUS II 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.

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties, Continued

 

(3) Related party transactions for the six-month periods ended June 30, 2016 and 2015 are as follows:

<Sales and Others>

 

In millions of won         Sales and others  

Company name

  

Transaction type

   June 30,
2016
     June 30,
2015
 

<Associates>

        

Daegu Green Power Co., Ltd.

  

Electricity sales

   369         521   

Dongducheon Dream Power Co., Ltd.

  

Electricity sales

     8,330         7,317   

Korea Gas Corporation

  

Electricity sales

     45,071         44,730   

Jeongam Wind Power Co., Ltd.

  

Electricity sales

     5         5   

Korea Power Engineering Service Co., Ltd.

  

Service

     615         1,138   

Yeongwol Energy Station Co., Ltd.

  

Service

     448         407   

KS Solar Co., Ltd.

  

Electricity sales

     10         10   

Heang Bok Do Si Photovoltaic Power Co., Ltd.

  

Service

     1         1   

Korea Electric Power Industrial Development Co., Ltd.

  

Service

     6,082         7,421   

DS POWER Co., Ltd.

  

Service

     26,629         57,754   

Goseong Green Energy Co., Ltd.

  

Electricity sales

     2,550         3,369   

Gangneung Eco Power Co., Ltd.

  

Service

     1,196         2,113   

Shin Pyeongtaek Power Co., Ltd.

  

Electricity sales

     76         1,048   

Naepo Green Energy Co., Ltd.

  

Electricity sales

     49         33   

YTN Co., Ltd.

  

Electricity sales

     847         932   

Busan Green Energy Co., Ltd.

  

Service

     117         1   

Korea Electric Vehicle Charge Service

  

Service

     30         —     

Ulleungdo Natural Energy Co., Ltd.

  

Service

     154         —     

Cheongna Energy Co., Ltd.

  

Service

     4,209         17,797   

Gangwon Wind Power Co., Ltd.

  

Electricity sales

     1,194         929   

Hyundai Green Power Co., Ltd.

  

Design service

     12,074         12,068   

Korea Power Exchange

  

Service

     2,597         1,773   

Hyundai Energy Co., Ltd.

  

Service

     11,718         11,809   

Taebaek Wind Power Co., Ltd.

  

Service

     448         455   

Pyeongchang Wind Power Co., Ltd.

  

Design service

     20         57   

Daeryun Power Co., Ltd.

  

Electricity sales

     793         921   

Changjuk Wind Power Co., Ltd.

  

Electricity sales

     760         342   

KNH Solar Co., Ltd.

  

Electricity sales

     9         9   

S-Power Co., Ltd.

  

Service

     2,796         3,735   

Busan Solar Co., Ltd.

  

Electricity sales

     8         8   

Green Biomass Co., Ltd.

  

Electricity sales

     2         36   

SPC Power Corporation

  

Dividend income

     4,298         1,360   

Gemeng International Energy Co., Ltd.

  

Dividend income

     16,476         —     

Dolphin Property Limited

  

Dividend income

     35         —     

PT. Bayan Resources TBK

  

Service

     120         73   

Pioneer Gas Power Limited

  

Service

     26         —     

Xe-Pian Xe-Namnoy Power Co., Ltd.

  

Service

     443         266   

<Joint ventures>

        

KEPCO SPC Power Corporation

  

Service

     3,817         14,366   

Daejung Offshore Wind Power Co., Ltd.

  

Electricity sales

     —           1   

KAPES, Inc. (formerly, KEPCO-ALSTOM Power Electronics Systems, Inc.)

  

Commission

     530         597   

Dangjin Eco Power Co., Ltd.

  

Technical fee

     532         10   

Honam Wind Power Co., Ltd.

  

Electricity sales

     135         28   

Seokmun Energy Co., Ltd.

  

Technical fee

     518         496   

Incheon New Power Co., Ltd.

  

Construction revenue

     260         128   

Chun-cheon Energy Co., Ltd.

  

Service

     1,820         672   

Yeonggwangbaeksu Wind Power Co., Ltd.

  

Electricity sales

     788         143   

KW Nuclear Components Co., Ltd.

  

Service

     2,665         1,582   

GS Donghae Electric Power Co., Ltd.

  

Electricity sales

     7,178         1,865   

Busan Shinho Solar Power Co., Ltd.

  

Electricity sales

     197         12   

Datang Chifeng Renewable Power Co., Ltd.

  

Interest income

     7,845         9,056   

Rabigh Electricity Company

  

Interest income

     374         259   

Shuweihat Asia Operation & Maintenance Company

  

Service

     101         102   

 

154


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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties, Continued

 

(3) Related party transactions for the six-month periods ended June 30, 2016 and 2015 are as follows, continued:

 

In millions of won         Sales and others  

Company name

  

Transaction type

   June 30,
2016
     June 30,
2015
 

ASM-BG Investicii AD

  

Service

   252         —     

Jamaica Public Service Company Limited

  

Service

     1,606         1,494   

KV Holdings, Inc.

  

Dividend income

     302         —     

Datang KEPCO Chaoyang Renewable Co., Ltd.

  

Dividend income

     440         —     

Nepal Water & Energy Development Pty Ltd.

  

Service

     159         —     

Amman Asia Electric Power Company

  

Service

     3,559         26,692   

Kelar S.A

  

Service

     1,045         5,122   

<Others>

        

Korea Development Bank

  

Electricity sales

     1,399         1,368   
  

Interest income

     235         899   

 

     <Purchase and Others>

 

In millions of won         Purchase and others  

Company name

  

Transaction type

   June 30,
2016
     June 30,
2015
 

<Associates>

        

Daegu Green Power Co., Ltd.

  

Electricity purchase

   136,515         178,341   

Dongducheon Dream Power Co., Ltd.

  

Electricity purchase

     450,109         474,837   

Korea Gas Corporation

  

Purchase of power generation fuel

     1,580,827         2,655,013   

Daegu Photovoltaic Co., Ltd.

  

REC purchase

     1,628         1,229   

Korea Power Engineering Service Co., Ltd.

  

Services

     325         2,221   

Yeongwol Energy Station Co., Ltd.

  

REC purchase

     9,236         5,253   

KS Solar Co., Ltd.

  

REC purchase

     2,028         3,639   

Heang Bok Do Si Photovoltaic Power Co., Ltd.

  

Rental Fee and others

     163         226   

Korea Electric Power Industrial Development Co., Ltd.

  

Electricity metering service fee

     120,254         133,411   

DS POWER Co., Ltd.

  

Services

     3         —     

YTN Co., Ltd.

  

Advertisement fee

     67         162   

Ulleungdo Natural Energy Co., Ltd.

  

Electricity purchase

     30         —     

Cheongna Energy Co., Ltd.

  

Services

     73         —     

Gangwon Wind Power Co., Ltd.

  

Electricity purchase

     13,977         13,451   

Hyundai Green Power Co., Ltd.

  

Electricity purchase

     223,996         223,476   

Korea Power Exchange

  

Trading fees

     46,310         43,152   

Hyundai Energy Co., Ltd.

  

Electricity purchase

     452         1,117   

Taebaek Wind Power Co., Ltd.

  

REC purchase

     3,410         4,276   

Daeryun Power Co., Ltd.

  

Electricity purchase

     119,644         128,792   

Changjuk Wind Power Co., Ltd.

  

Electricity purchase

     3,281         4,230   

KNH Solar Co., Ltd.

  

Electricity purchase

     2,655         3,445   

S-Power Co., Ltd.

  

Services

     223,016         345,482   

Busan Solar Co., Ltd.

  

Electricity purchase

     1,079         2,324   

Green Biomass Co., Ltd.

  

Woodchip purchase

     1,586         2,267   

<Joint ventures>

        

KAPES, Inc. (formerly, KEPCO-ALSTOM Power Electronics Systems, Inc.)

  

Service

     68,611         41,976   

 

155


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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties, Continued

 

(3) Related party transactions for the six-month periods ended June 30, 2016 and 2015 are as follows, continued:

 

In millions of won         Purchase and others  

Company name

  

Transaction type

   June 30,
2016
     June 30,
2015
 

Honam Wind Power Co., Ltd.

  

Electricity purchase

   3,168         3,618   

Yeonggwangbaeksu Wind Power Co., Ltd.

  

Electricity purchase

     5,560         334   

Busan Shinho Solar Power Co., Ltd.

  

REC Purchase

     3,595         4,262   

Global Trade Of Power System Co., Ltd.

  

Service

     289         1   

Expressway Solar-light Power Generation Co., Ltd.

  

Electricity purchase

     1,570         1,880   

Jamaica Public Service Company Limited

  

Service

     79         46   

<Others>

        

Korea Development Bank

  

Interest expense

     4,370         13,503   
  

Provision of dividends

     654,829         96,087   

 

156


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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties, Continued

 

(4) Receivables and payables arising from related party transactions as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won         Receivables      Payables  

Company name

  

Type

   June 30,
2016
     December 31,
2015
     June 30,
2016
     December 31,
2015
 

<Associates>

              

Daegu Green Power Co., Ltd.

  

Trade receivables

   52         95         —           —     
  

Trade payables

     —           —           16,262         22,200   

Dongducheon Dream Power Co., Ltd.

  

Trade receivables

     2,702         1,206         —           —     
  

Trade payables

     —           —           53,555         100,396   

Korea Gas Corporation

  

Trade receivables

     6,703         7,931         —           —     
  

Non-trade receivables and others

     96         255         —           —     
  

Trade payables

     —           —           250,860         302,752   
  

Non-trade payables and others

     —           —           61         —     

Daegu Photovoltaic Co., Ltd.

  

Trade payables

     —           —           50         —     

Jeongam Wind Power Co., Ltd.

  

Non-trade payables and others

     —           —           5         1   

Korea Power Engineering Service Co., Ltd.

  

Non-trade receivables and others

     614         —           —           —     

Yeongwol Energy Station Co., Ltd.

  

Trade receivables

     7,044         7,063         —           —     
  

Trade payables

     —           —           229         229   

KS Solar Co., Ltd.

  

Trade receivables

     1         2         —           —     
  

Trade payables

     —           —           86         68   
  

Non-trade payables and others

     —           —           —           281   

Korea Electric Power Industrial Development Co., Ltd.

  

Trade receivables

     431         469         —           —     
  

Non-trade receivables and others

     16         27         —           —     
  

Non-trade payables and others

     —           —           15,227         27,569   

DS Power Co., Ltd.

  

Trade receivables

     175         260         —           —     
  

Non-trade payables and others

     —           —           180         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

     3,000         1,701         —           —     

Shin Pyeongtaek Power Co., Ltd.

  

Non-trade receivables and others

     8         272         —           —     

Naepo Green Energy Co., Ltd.

  

Trade receivables

     6         9         —           —     

YTN Co., Ltd.

  

Trade receivables

     98         93         —           —     
  

Non-trade payables and others

     —           —           17         154   

Korea Electric Vehicle Charge Service

  

Trade receivables

     5         —           —           —     

Cheongna Energy Co., Ltd.

  

Trade receivables

     109         157         —           —     
  

Non-trade receivables and others

     —           375         —           —     
  

Non-trade payables and others

     —           —           388         —     

Gangwon Wind Power Co., Ltd.

  

Trade receivables

     17         12         —           —     
  

Trade payables

     —           —           568         1,753   

Hyundai Green Power Co., Ltd.

  

Trade receivables

     753         962         —           —     
  

Trade payables

     —           —           31,118         36,079   

Korea Power Exchange

  

Trade receivables

     615         1,452         —           —     
  

Non-trade receivables and others

     —           112         —           —     
  

Trade payables

     —           —           —           3,529   
  

Non-trade payables and others

     —           —           1,169         1,529   

Hyundai Energy Co., Ltd.

  

Trade receivables

     66         44,510         —           —     
  

Non-trade receivables and others

     55,376         —           —           —     
  

Trade payables

     —           —           47         178   
  

Non-trade payables and others

     —           —           8,217         8,030   

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties, Continued

 

(4) Receivables and payables arising from related party transactions as of June 30, 2016 and December 31, 2015 are as follows, continued:

 

In millions of won         Receivables      Payables  

Company name

  

Type

   June 30,
2016
     December 31,
2015
     June 30,
2016
     December 31,
2015
 

Ecollite Co., Ltd.

  

Non-trade receivables and others

   210         210         —           —     

Taebaek Wind Power Co., Ltd.

  

Non-trade receivables and others

     100         147         —           —     
  

Trade payables

     —           —           83         349   
  

Non-trade payables and others

     —           —           220         —     

Pyeongchang Wind Power Co., Ltd.

  

Trade receivables

     5         —           —           —     
  

Non-trade receivables and others

     —           170         —           —     

Daeryun Power Co., Ltd.

  

Trade receivables

     151         117         —           —     
  

Trade payables

     —           —           10,391         27,374   

Changjuk Wind Power Co., Ltd.

  

Non-trade receivables and others

     93         153         —           —     
  

Trade payables

     —           —           97         —     
  

Non-trade payables and others

     —           —           201         330   

KNH Solar Co., Ltd.

  

Trade receivables

     1         2         —           —     

S-Power Co., Ltd.

  

Trade receivables

     186         121         —           —     
  

Trade payables

     —           —           23,931         54,141   
  

Non-trade payables and others

     —           —           3,761         —     

Green Biomass Co., Ltd.

  

Non-trade receivables and others

     61         109         —           —     
  

Non-trade payables and others

     —           —           384         152   

Pioneer Gas Power Limited

  

Non-trade receivables and others

     —           26         —           —     

Xe-Pian Xe-Namnoy Power Co., Ltd.

  

Non-trade receivables and others

     56         —           —           —     

<Joint ventures>

              

KEPCO SPC Power Corporation

  

Trade receivables

     201         —           —           —     
  

Non-trade receivables and others

     —           252         —           —     

KAPES, Inc. (formerly, KEPCO-ALSTOM Power Electronics Systems, Inc.)

  

Non-trade receivables and others

     178         251         —           —     
  

Non-trade payables and others

     —           —           53         61   

Dangjin Eco Power Co., Ltd.

  

Non-trade receivables and others

     832         300         —           —     

Honam Wind Power Co., Ltd.

  

Trade payables

     —           —           83         342   
  

Non-trade payables and others

     —           —           1,600         2,124   

Seokmun Energy Co., Ltd.

  

Trade receivables

     33         —           —           —     
  

Non-trade receivables and others

     1,233         2,086         —           —     

Incheon New Power Co., Ltd.

  

Trade receivables

     127         128         —           —     

Chun-cheon Energy Co., Ltd.

  

Non-trade receivables and others

     150         112         —           —     

Yeonggwangbaeksu Wind Power Co., Ltd.

  

Trade receivables

     7         7         —           —     
  

Non-trade receivables and others

     137         136         —           —     
  

Trade payables

     —           —           143         627   
  

Non-trade payables and others

     —           —           692         2,000   

GS Donghae Electric Power Co., Ltd.

  

Trade receivables

     884         970         —           —     
  

Non-trade receivables and others

     1,390         1,216         —           —     

Busan Shinho Solar Power Co., Ltd.

  

Trade receivables

     2         2         —           —     
  

Trade payables

     —           —           115         272   
  

Non-trade payables and others

     —           —           956         970   

Datang Chifeng Renewable Power Co., Ltd.

  

Non-trade receivables and others

     231         368         —           —     

Rabigh Operation & Maintenance Company

  

Non-trade receivables and others

     1,780         1,780         —           —     

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties, Continued

 

(4) Receivables and payables arising from related party transactions as of June 30, 2016 and December 31, 2015 are as follows, continued:

 

In millions of won         Receivables      Payables  

Company name

  

Type

   June 30,
2016
     December 31,
2015
     June 30,
2016
     December 31,
2015
 

ASM-BG Investicii AD

  

Non-trade receivables and others

   116         —           —           —     

Nepal Water & Energy Development Company Pty Ltd.

  

Non-trade receivables and others

     692         —           —           —     

Jamaica Public Service Company Limited

  

Trade receivables

     1,169         1,193         —           —     
  

Non-trade receivables and others

     703         581         —           —     

Amman Asia Electric Power Company

  

Trade receivables

     1,305         739         —           —     

<Others>

              

Korea Development Bank

  

Accrued interest income

     —           212         —           —     
  

Non-trade receivables and others

     125,683         45,623         —           —     
  

Non-trade payables and others

     —           —           408         493   
  

Derivatives

     10,111         3,777         6,253         2,313   

 

159


Table of Contents

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties, Continued

 

(5) Loans and others arising from related party transactions as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won                          

Type

  

Company name

   Beginning
balance
    Loans     Collection     Others     Ending
balance
 

Associates

  

KNOC Nigerian East Oil Co., Ltd.

KNOC Nigerian West Oil Co., Ltd.

   28,296        —          —          (134     28,162   
  

Allowance for doubtful accounts

     (17,755     —          —          88        (17,667

Associates

  

PT. Cirebon Electric Power

     40,979        1,930        (9,707     (250     32,952   

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        —          264        9,902   

Associates

  

Jungbu Bio Energy Co., Ltd.

     —          —          —          396        396   

Associates

  

Hyundai Energy Co., Ltd.

     —          2,465        —          —          2,465   

Joint ventures

  

KEPCO SPC Power Corporation

     29,651        —          (2,719     (144     26,788   

Joint ventures

  

Datang Chifeng Renewable Power Co., Ltd.

     23,775        —          (3,997     (89     19,689   

Joint ventures

  

Jamaica Public Service Company Limited

     2,345        —          —          (15     2,330   

Joint ventures

  

Rabigh Electricity Company

     45,552        —          —          (262     45,290   

Joint ventures

  

KODE NOVUS II LLC

     —          1,193        —          3,002        4,195   
  

Allowance for doubtful accounts

     —          (4,258     —          63        (4,195
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
        154,706        10,968        (16,873     2,919        151,720   
     

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(6) Borrowings arising from related party transactions as of June 30, 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

     261,437         9,500         (26,236     244,701   
  

Others

     6,418         —           (378     6,040   
  

Operating funds

     12,000         —           —          12,000   

 

(7) Guarantees provided to associates or joint ventures as of June 30, 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 74,638      

SMBC, Export-Import Bank of Korea and ADB

Korea Electric Power Corporation

  

Shuweihat Asia Operation & Maintenance Company

  

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

 

160


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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties, Continued

 

(7) Guarantees provided to associates or joint ventures as of June 30, 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 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

     

Guarantees for supplemental funding (*1)

     —        

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 33,497      
     

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      

Kookmin 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.

  

Heang Bok 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

Korea East-West Power Co., Ltd.

  

Seokmun Energy Co., Ltd.

  

Collateralized money invested

   KRW 580      

KEB Hana Bank and others

     

Guarantees for supplemental funding (*1)

   KRW 15,370      

Korea East-West Power Co., Ltd.

  

Chun-cheon Energy Co., Ltd.

  

Collateralized money invested

   KRW 52,700      

Kookmin Bank and others

     

Guarantees for supplemental funding (*1)

     —        

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

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties, Continued

 

(7) Guarantees provided to associates or joint ventures as of June 30, 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.

  

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.

     

Performance guarantees and guarantees for supplemental funding (*1)

     —        

Korea Southern Power Co., Ltd.

  

Daeryun Power Co., Ltd.

  

Collateralized money invested

   KRW 25,477      

Korea Development Bank and others

     

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

     

Guarantees for supplemental funding (*1)

     —        

Korea Southern Power Co., Ltd.

  

Daegu Green Power Co., Ltd.

  

Collateralized money invested

   KRW 79,540      

KEB Hana Bank and Kookmin Bank

     

Performance guarantees and guarantees for supplemental funding (*1)

     —        

Korea Southern Power Co., Ltd.

  

KS Solar Co., Ltd.

  

Collateralized money invested

   KRW 637      

Shinhan Capital Co., Ltd.

Korea Southern Power Co., Ltd.

  

Kelar S.A

  

Performance guarantees (*1)

   USD 52,000      

KEB Hana Bank, SMBC and others

     

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.

     

Guarantees for supplemental funding (*1)

     —        

Korea Southern Power Co., Ltd.

  

Pyeongchang Wind Power Co., Ltd.

  

Collateralized money invested

   KRW 3,875      

Woori Bank and Shinhan Bank

     

Performance guarantees and guarantees for supplemental funding (*1)

     —        

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.

     

Performance guarantees and guarantees for supplemental funding (*1)

     —        

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties, Continued

 

(7) Guarantees provided to associates or joint ventures as of June 30, 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 Midland Power Co., Ltd.

  

Hyundai Green Power Co., Ltd.

  

Collateralized money invested

   KRW 87,003      

Korea Development Bank and others

     

Guarantees for supplemental funding (*1)

     —        

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      

KEB Hana 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

     

Performance guarantees and guarantees for supplemental funding (*1)

     —        

Korea South-East Power Co., Ltd.

  

RES Technology AD

  

Collateralized money invested

   KRW 15,595      

Korea Development Bank and others

     

Debt guarantees

   EUR 4,271      

Korea South-East Power Co., Ltd.

  

ASM-BG Investicii AD

  

Collateralized money invested

   KRW 16,101      

Korea Development Bank and others

     

Debt guarantees

   EUR 4,175      

Korea South-East Power Co., Ltd.

  

Express Solar-light Power Generation Co., Ltd.

  

Guarantees for supplemental funding (*1, 3)

   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

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)

     —        

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.

Korea Hydro & Nuclear Power Co., Ltd.

  

Noeul Green Energy Co., Ltd.,

  

Collateralized money invested

   KRW 1,740      

KEB Hana Bank and others

Korea Hydro & Nuclear Power Co., Ltd.

  

Busan Green Energy Co., Ltd.

  

Collateralized money invested

   KRW 14,564      

Shinhan Bank and others

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.
(*3) The Group has provided rights to Hana Financial Investment Co.,Ltd., an agent financial institution of the majority stockholders, that it can dispose the stocks of Express Solar-light Power Generation Co., Ltd. that the Group owns to repay the borrowings when Express Solar-light Power Generation Co., Ltd.triggers clauses related to its borrowings.

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

46. Related Parties, Continued

 

(8) As of June 30, 2016, there is no financial guarantee contract provided by related parties.

 

(9) Derivatives transactions with related parties as of June 30, 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   
     2016~2021         121,000         USD 100,000         2.15     2.50     1,210.00   

 

  (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         50,000       3.49%   3M CD + 0.25%

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.

 

(10) Salaries and other compensations to the key members of management of the Company for the six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won              

Type

   June 30, 2016      June 30, 2015  
   Three-month
period ended
     Six-month
period ended
     Three-month
period ended
     Six-month
period ended
 

Salaries

   887         1,061         499         694   

Employee benefits

     5         10         15         31   
  

 

 

    

 

 

    

 

 

    

 

 

 
     892         1,071         514         725   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

47. Non-Cash Transactions

Significant non-cash investing and financing transactions for the six-month periods ended June 30, 2016 and 2015 are as follows:

 

In millions of won              

Transactions

   June 30, 2016      June 30, 2015  

Transfer from construction-in-progress to other assets

     2,943,544         2,668,281   

Recognition of asset retirement cost and related provision for decommissioning costs

     129,844         1,139,232   

Transfer from provision for disposal of spent nuclear fuel to accrued expenses

     248,451         262,654   

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

48. Commitments for Expenditure

 

(1) The agreements for acquisition of property, plant and equipment as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won    June 30, 2016      December 31, 2015  

Contracts

   Amounts      Balance      Amounts      Balance  

Purchase of GIS(800KV 8000A 50KA)

   63,730         63,730         —           —     

Other 41 contracts

     140,470         73,747         199,846         140,563   

Electricity construction of Dangjin units (#9,10)

     331,083         17,311         294,099         16,812   

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   

Construction of Samcheok units (#1,2)

     399,114         19,325         384,716         27,018   

Construction of breakwater for Samcheok units (#1,2)

     85,929         —           84,893         18,096   

Purchase of furnace for construction of Samcheok units (#1,2)

     1,091,303         62,062         1,091,303         115,896   

Purchase of coal handling machine for construction of Samcheok units (#1,2)

     300,670         49,106         290,417         23,795   

Purchase of turbine generator for construction of Samcheok units (#1,2)

     213,761         2,166         213,761         4,040   

Purchase of ash disposing facility for construction of Samcheok units (#1,2)

     46,952         2,462         46,970         2,857   

Service of designing Samcheok units (#1,2)

     114,047         38,899         112,949         42,631   

Purchase of main machine for construction of Seoul Combined units (#1,2)

     360,500         310,037         360,500         328,210   

Construction of Seoul Combined units (#1,2)

     225,205         138,828         227,000         182,630   

Construction of New Kori units (#3,4)

     6,856,150         —           6,856,150         214,678   

Construction of New Kori units (#5,6)

     8,625,387         7,617,746         8,625,387         7,899,368   

Electricity construction of New Boryeong units (#1,2)

     352,013         56,399         245,357         36,893   

Purchase of smoke eliminating machine for construction of New Boryeong units (#1,2)

     118,058         2,249         118,058         8,775   

Purchase of coal handling machine for construction of New Boryeong units (#1,2)

     146,353         3,543         146,353         25,266   

Service of designing New Boryeong units (#1,2)

     126,038         32,281         126,038         32,910   

Purchase of main machine for construction of new Boryeong units (#1,2)

     851,132         21,939         851,132         137,744   

Construction of New Boryeong units (#1,2)

     284,749         26,505         246,964         10,859   

Construction of port facilities for New Boryeong units (#1,2)

     78,166         —           78,166         —     

Construction of New Hanwool units (#1,2)

     7,982,342         2,263,982         7,982,343         2,578,707   

Construction of New Hanwool units (#3,4)

     8,261,818         8,192,783         8,261,817         8,238,651   

Construction of yard for Andong natural gas power plant

     41,961         2,600         40,960         2,528   

Construction of Yeosu Thermal Power units (#1)

     477,281         10,719         489,440         30,853   

Purchase of generator for Wonju RDF combined&heat power plant

     52,877         —           52,877         —     

Purchase of cable (TR CNCE-W/AL 1C 400SQ)

     40,647         40,647         —           —     

Purchase of cable (TR CNCE-W,1C,600MM2,13.2KV)

     50,581         —           50,581         50,581   

Construction of Chunji units (#1,2)

     12,555,724         12,530,360         —           —     

Purchase of Concrete Poles (10M, 350KGF)

     81,419         5,602         106,037         74,549   

Purchase of coal handling machine for construction of Taean (#9,10) and IGCC units(conditional contract for installation)

     192,945         45,518         146,634         9,943   

Purchase of furnace for construction of Taean units (#9,10)

     574,879         54,296         546,637         66,271   

Service of designing Taean units (#9,10)

     109,700         20,162         107,516         26,437   

Purchase of desulfurization machine for construction of Taean units (#9,10)

     92,086         3,450         91,592         6,175   

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

48. Commitments for Expenditure, Continued

 

(1) The agreements for acquisition of property, plant and equipment as of June 30, 2016 and December 31, 2015 are as follows. continued:

 

In millions of won    June 30, 2016      December 31, 2015  

Contracts

   Amounts      Balance      Amounts      Balance  

Purchase of turbine generator for construction of Taean units (#9,10)

   220,538         14,594         426,139         103,146   

Purchase of gas plant machine for construction of Taean IGCC units

     457,903         2,793         457,423         4,541   

Purchase of combined generating machine for construction of Taean IGCC units

     203,623         7,009         204,514         25,808   

Purchase of oxygen plant for construction of Taean IGCC units

     97,569         2,159         97,804         4,252   

Service of designing Taean IGCC plant units

     44,374         4,873         44,374         5,520   

Purchase of main machine for Heang Bok do si combined&heat power plant

     337,283         —           337,283         —     
  

 

 

    

 

 

    

 

 

    

 

 

 
     53,225,646         31,754,912         40,541,929         20,519,318   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(2) As of June 30, 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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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

49. Contingencies and Commitments

 

(1) Ongoing litigations related with contingent liabilities and assets as of June 30, 2016 and December 31, 2015 are as follows:

 

In millions of won                            
     June 30, 2016      December 31, 2015  
   Number of cases      Claim amount      Number of cases      Claim amount  

As the defendant

     730       775,845         750         1,052,301   

As the plaintiff

     189         613,982         202         580,987   

As of June 30, 2016, in addition to the litigations mentioned above, there are ongoing litigations of Korea Hydro & Nuclear Power Co., Ltd. (“KHNP”), a subsidiary of KEPCO, against KEPCO Engineering & Construction Company, Inc., a subsidiary of KEPCO, as a co-defendant (one case amounting to ₩496,681 million) and KEPCO Plant Service & Engineering Co., Ltd., a subsidiary of KEPCO, as a co-defendant (three cases amounting to ₩1,593 million).

The Company is the defendant against a number of claims. The followings 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 ₩1,000 million) against 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 ₩133,426 million in October 2014 and ₩204,040 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.

 

  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 ₩144,152 million of other provision in relation to the lawsuit.

 

  KEPCO and KEPCO KDN Co., Ltd., a subsidiary of KEPCO, have been accused of breach of contract in relation to ERP software, which is provided by SAP Korea Ltd. The litigation was filed in the International Chamber of Commerce International Court of Arbitration but the Company has not recognized any provision because the probability of economic benefit outflow is remote and the related amount cannot be reliably estimated.

 

(2) Guarantees of borrowings provided to other companies as of June 30, 2016 and December 31, 2015 are as follows:

The Company has a borrowing of ₩21,500 million from Long Lasting Value (“LLV”) as of June 30, 2016. 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 ₩23,900 million.

In order to secure its status as a shareholder of Navanakorn Electric Co., Ltd., the Company has signed a fund supplement contract. According to the contract, in case Navanakorn 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.

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

49. Contingencies and Commitments, Continued

 

(2) Guarantees of borrowings provided to other companies as of June 30, 2016 and December 31, 2015 are as follows, continued:

The Company has outstanding borrowings with a limit of USD 275,600 thousand from its creditors such as International Finance Corporation. Regarding the borrowing contract, the Company has guaranteed capital contribution of USD 69,808 thousand and additional contribution up to USD 19,000 thousand for contingencies, if any. Moreover, for one of the electricity purchasers, Central Power Purchasing Agency Guarantee Ltd., the Company has provided performance guarantee up to USD 2,777 thousand, in case of construction delay or insufficient contract volume after commencement of the construction.

The Company has provided performance guarantee up to USD 917 thousand 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. Also, in relation to the business, the Company has provided LNTP Offshore performance payment guarantee amounting to USD 401 thousand to Toshiba Corporation and MHPS, and LNTP Onshore performance payment guarantee amounting to USD 600 thousand to Hyundai E&C based on the interest owned by the Company to progress the construction.

 

(3) Credit lines provided by financial institutions as of June 30, 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      1,815,000   

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      56,333   
  

Banco de Oro

   PHP      5,000   

Loan limit

  

Kookmin Bank and others

   KRW      661,887   
  

BNP Paribas and others

   USD      2,460,000   

Certification of payment on L/C

  

KEB Hana Bank

   GBP      61,169   
  

Woori Bank and others

   USD      1,086,377   

Certification of performance guarantee on contract

  

Kookmin Bank

   EUR      19,333   
  

KEB Hana Bank and others

   INR      236,443   
  

Seoul Guarantee Insurance and others

   KRW      82,589   
  

Bank of Kathmandu

   NPR      32,633   
  

KEB Hana Bank and others

   USD      769,715   

Certification of bidding

  

SMBC and others

   USD      10,000   
  

ABSA Bank

   ZAR      45,000   

Advance payment bond, Warranty bond, Retention bond and others

  

HSBC and others

   USD      532,250   
  

Bank of Kathmandu

   NPR      36,309   

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      812,805   

Inclusive credit

  

Shinhan Bank

   INR      47,489   
  

KEB Hana Bank

   KRW      258,000   
  

HSBC and others

   USD      484,510   

Trade finance

  

BNP Paribas and others

   USD      800,000   

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

49. Contingencies and Commitments, Continued

 

(4) As of June 30, 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      40,000      

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      86,214      

Collateral for borrowings

     

Cash and cash equivalents

   KRW      8,868      

Gyeongju Wind Power Co., Ltd.

  

Korea Development Bank and others

  

Property, plant and equipment and others

   KRW      32,931      

Collateral for borrowings

     

Existing or expected trade receivables

   KRW      1,731      
     

Cash and cash equivalents

   KRW      6,249      

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 ₩1,200 million of project loans from Korea Resource Corporation as of June 30, 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 ₩98,068 million, to improve the quality of water used in generating electricity. The expenses related to the suspension of operations of ₩214 million and depreciation on the utility plant of ₩3,311 million are recorded to other expenses for the six-month period ended June 30, 2016.

 

(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 June 30, 2016. The book value of facility is ₩20,082 million and the amount of trade receivables related to the companies residing in Gaeseong industrial complex is ₩4,783 million. The Company has entered into an insurance agreement covering up to ₩7,000 million with the Export-Import Bank of Korea related to Gaeseong industrial complex. The ultimate outcome of this event cannot be reasonably estimated.

 

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

June 30, 2016

(Unaudited)

 

50. Subsequent Events

Subsequent to June 30, 2016, Korea Western Power Co., Ltd. and Korea Midland Power Co., Ltd., subsidiaries 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      1.40     2016.07.07         2016.09.23       10,000   
        1.40     2016.07.07         2016.09.23         40,000   
        1.34     2016.07.21         2016.09.23         20,000   
        1.36     2016.07.25         2016.10.21         10,000   
        1.36     2016.07.25         2016.10.21         20,000   
        1.35     2016.07.29         2016.10.21         60,000   
   Corporate bond #31      1.36     2016.07.05         2021.07.05         100,000   

Korea Midland Power Co., Ltd.

   Short-term borrowings      1.31     2016.07.01         2016.07.11         50,000   
        1.33     2016.07.22         2016.08.23         70,000   
        1.28     2016.07.29         2016.08.23         70,000   
        1.36     2016.08.11         2016.09.23         80,000   
   The 35-1st non-guaranteed bond      1.60     2016.07.06         2026.07.06         160,000   
   The 35-2nd non-guaranteed bond      1.62     2016.07.06         2031.07.06         90,000   

 

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Notes to the Consolidated Interim Financial Statements, Continued

June 30, 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 and six-month periods ended June 30, 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    June 30, 2016      June 30, 2015  
     Three-month
period ended
     Six-month
period ended
     Three-month
period ended
     Six-month
period ended
 

Operating profit on consolidated interim statements of comprehensive income

   2,704,494         6,309,841         2,087,984         4,327,850   

Add

           

Other income

           

Reversal of other provisions

     1,075         5,612         5,076         6,734   

Reversal of other allowance for bad debt

     4,799         5,786         —           —     

Gains on government grants

     —           36         —           —     

Gains on assets contributed

     188         1,516         880         3,092   

Gains on liabilities exempted

     302         305         34         2,371   

Compensation and reparations revenue

     39,814         63,944         34,319         86,856   

Gains on electricity infrastructure development fund

     —           —           220         363   

Revenue from research contracts

     1,593         2,427         1,394         4,531   

Rental income

     47,757         101,941         47,528         95,786   

Others

     7,482         13,745         6,879         13,962   

Other gains

           

Gains on disposal of property, plant and equipment

     11,360         29,958         78,854         96,769   

Gains on disposal of intangible assets

     —           —           32         32   

Gains on foreign currency translation

     4,246         8,653         1,823         2,984   

Gains on foreign currency transaction

     12,573         23,789         10,999         19,798   

Gains on insurance proceeds

     —           —           25         25   

Others

     44,319         93,731         26,786         78,513   

Deduct

           

Other expenses

           

Accretion expenses of other provisions

     (70      (119      (272      (316

Depreciation expenses on investment properties

     (131      (329      (185      (347

Depreciation expense on idle assets

     (1,641      (3,311      (1,666      (3,332

Other bad debt expense

     (1,163      (5,108      (5,168      (12,983

Donations

     (23,726      (35,387      (4,742      (17,162

Others

     (5,157      (8,336      (4,947      (5,977

Other losses

           

Losses on disposal of property, plant and equipment

     (16,871      (21,131      (28,689      (41,044

Losses on disposal of intangible assets

     (4      (138      —           (5

Impairment loss on property, plant and equipment

     —           —           (1,205      (1,205

Losses on foreign currency translation

     (544      (4,275      (3,472      (9,978

Losses on foreign currency transaction

     (13,731      (33,666      (23,864      (35,632

Others

     (10,465      (26,135      (14,048      (37,122
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted operating profit

     2,806,499         6,523,349         2,214,575         4,574,563   
  

 

 

    

 

 

    

 

 

    

 

 

 

 

171