Investments in Associates and Joint Ventures (Tables)

12 Months Ended

Dec. 31, 2018

Text block [abstract]

Investments in associates and joint ventures accounted for using the equity method

(1) Investments in associates and joint ventures accounted for using the equity method as of December 31, 2018 and 2017 are as follows:

(In millions of won)
			December 31, 2018				December 31, 2017
	Country		Ownership (%)		Carrying amount		Ownership (%)		Carrying amount
Investments in associates:
SK China Company Ltd.		China		27.3	￦	551,548		27.3	￦	526,099
Korea IT Fund(*1)		Korea		63.3		281,684		63.3		257,003
KEB HanaCard Co., Ltd.(*2)		Korea		15.0		288,457		15.0		280,988
NanoEnTek, Inc.		Korea		28.9		40,974		28.5		38,718
SK Technology Innovation Company		Cayman Islands		49.0		42,469		49.0		42,511
HappyNarae Co., Ltd.(*3)		Korea		—		—		45.0		21,873
SK hynix Inc.		Korea		20.1		11,208,315		20.1		8,130,000
SK MENA Investment B.V.		Netherlands		32.1		14,420		32.1		13,853
S.M. Culture & Contents Co., Ltd.		Korea		23.4		63,801		23.4		64,966
Xian Tianlong Science and Technology Co., Ltd.(*3)		China		—		—		49.0		25,891
Hello Nature Ltd.(*4)		Korea		49.9		28,549		—		—
12CM Japan, Inc.(*5)		Japan		28.2		7,734		—		—
MAKEUS Corp.(*2,5)		Korea		8.9		9,193		—		—
SK South East Asia Investment Pte. Ltd.(*5)		Singapore		20.0		111,000		—		—
Pacific Telecom Inc.(*2,5)		USA		15.0		37,075		—		—
Health Connect Co., Ltd. and others		—		—		106,394		—		96,479
						12,791,613				9,498,381
Investments in joint ventures:
Dogus Planet, Inc.(*6)		Turkey		50.0		12,487		50.0		13,991
Finnq Co. Ltd.(*6)		Korea		49.0		7,671		49.0		16,474
12CM GLOBAL PTE. LTD.(*3)		Singapore		—		—		62.7		9,592
Celcom Planet(*6,7)		Malaysia		44.7		—		49.5		—
						20,158				40,057
Total					￦	12,811,771			￦	9,538,438

(*1) Investment in Korea IT Fund was classified as investment in associates as the Group does not have control over the investee under the contractual agreement with other shareholders.

(*2) These investments were classified as investments in associates as the Group can exercise significant influence through its right to appoint the members of board of directors even though the Group has less than 20% of equity interests.

(*3) During the year ended December 31, 2018, the Group disposed of the entire shares.

(*4) During the year ended December 31, 2018, Hello Nature Ltd. increased capital by allocation to third parties, which decreased the Parent Company’s ownership to 49.9% and was reclassified into the associate from the subsidiary due to the loss of the control. In addition, the Group has obligation for additional investments up to ￦20,000 million according to the agreement with the shareholders.

(*5) These investments are newly acquired during the year ended December 31, 2018.

(*6) These investments were classified as investment in joint ventures as the Group has a joint control pursuant to the agreement with the other shareholders.

(*7) During the year ended December 31, 2018, the Group invested ￦12,932 million by purchasing newly issued stocks, and the entire amount of this investment was recognized as equity losses.

Market price of investments in listed associates

(2) The market value of investments in listed associates as of December 31, 2018 and 2017 are as follows:

(In millions of won, except for share data)
	December 31, 2018						December 31, 2017
	Market price per share (in won)		Number of shares		Market value		Market price per share (in won)		Number of shares		Market value
NanoEnTek, Inc.	￦	4,235		7,600,649		32,189		5,950		6,960,445		41,415
SK hynix Inc.		60,500		146,100,000		8,839,050		76,500		146,100,000		11,176,650
S.M.Culture & Contents Co., Ltd.		2,020		22,033,898		44,508		2,700		22,033,898		59,492

Financial information of significant associates

(3) The condensed financial information of significant associates as of and for the years ended December 31, 2018, 2017 and 2016 are as follows:

(In millions of won)
	SK hynix Inc.(*)			KEB HanaCard Co., Ltd.(*)			Korea IT Fund			SK China Company Ltd.(*)
	As of December 31, 2018
Current assets	￦	19,894,146			7,781,888			118,024			677,686
Non-current assets		43,764,189			202,251			326,740			1,221,736
Current liabilities		13,031,852			1,122,538			—			71,396
Non-current liabilities		3,774,152			5,286,179			—			117,094
	2018
Revenue		40,445,066			1,642,133			57,430			117,132
Profit for the year		15,539,984			106,675			45,110			30,274
Other comprehensive loss		(67,219	)		(4,344	)		(13,422	)		(16,149	)
Total comprehensive income		15,472,765			102,331			31,688			14,125

(*) The financial information of SK hynix Inc., KEB HanaCard Co., Ltd., and SK China Company Ltd. are consolidated financial information.

(In millions of won)
	SK hynix Inc.(*)			KEB HanaCard Co., Ltd.(*)			Korea IT Fund		SK China Company Ltd.(*)
	As of December 31, 2017
Current assets	￦	17,310,444			7,339,492			144,874		729,872
Non-current assets		28,108,020			220,258			260,920		1,031,647
Current liabilities		8,116,133			1,181,746			—		81,161
Non-current liabilities		3,481,412			4,861,842			—		64,717
	2017
Revenue		30,109,434			1,519,607			11,743		69,420
Profit for the year		10,642,219			106,352			1,916		11,492
Other comprehensive income (loss)		(422,042	)		(984	)		4,108		27,190
Total comprehensive income		10,220,177			105,368			6,024		38,682

(*) The financial information of SK hynix Inc., KEB HanaCard Co., Ltd., and SK China Company Ltd. are consolidated financial information.

(In millions of won)
	SK hynix Inc.(*)		KEB HanaCard Co., Ltd.(*)
	As of December 31, 2016
Current assets	￦	9,838,982		6,868,387
Non-current assets		22,377,044		239,758
Current liabilities		4,160,849		1,219,327
Non-current liabilities		4,031,647		4,476,979
	2016
Revenue		17,197,975		1,413,077
Profit for the year		2,960,483		75,595
Other comprehensive income (loss)		28,844		(154	)
Total comprehensive income		2,989,327		75,441

(*) The financial information of SK hynix Inc. and KEB HanaCard Co., Ltd. are consolidated financial information.

Condensed financial information of joint ventures

(4) The condensed financial information of joint ventures as of and for the years ended December 31, 2018, 2017 and 2016 are as follows:

(In millions of won)
	Dogus Planet, Inc.			Finnq Co., Ltd.
	As of December 31, 2018
Current assets	￦	43,127			11,985
Cash and cash equivalents		42,416			10,434
Non-current assets		20,239			15,435
Current liabilities		37,105			5,070
Accounts payable, other payables and provision		28,432			87
Non-current liabilities		1,287			7,579
	2018
Revenue		99,770			232
Depreciation and amortization		(5,427	)		(3,490	)
Interest income		1,635			5
Interest expense		—			(301	)
Profit (Loss) for the year		642			(17,995	)
Total comprehensive income (loss)		642			(18,166	)

(In millions of won)
	Dogus Planet, Inc.			Finnq Co., Ltd.
	As of December 31, 2017
Current assets	￦	39,656			32,232
Cash and cash equivalents		25,818			4,590
Non-current assets		21,159			15,610
Current liabilities		32,622			5,685
Accounts payable, other payables and provision		2,743			2,290
Non-current liabilities		212			13,862
	2017
Revenue		82,791			—
Depreciation and amortization		(6,152	)		(1,077	)
Interest income		781			532
Interest expense		(4	)		(276	)
Loss for the year		(4,535	)		(15,699	)
Total comprehensive loss		(4,535	)		(15,699	)

(In millions of won)
	Dogus Planet, Inc.			PT XL Planet Digital			Finnq Co., Ltd
	As of December 31, 2016
Current assets	￦	46,433			20,077			48,699
Cash and cash equivalents		45,839			14,985			48,408
Non-current assets		20,218			50,765			673
Current liabilities		26,417			14,513			138
Accounts payable, other payables and provision		1,971			10,306			15
Non-current liabilities		72			1,305			784
	2016
Revenue		53,864			9,492			—
Depreciation and amortization		(5,299	)		(940	)		(12	)
Interest income		394			267			182
Interest expense		(2,139	)		—			—
Income tax benefit		—			51			—
Loss for the year		(22,017	)		(49,438	)		(829	)
Total comprehensive loss		(22,017	)		(49,438	)		(829	)

Reconciliations of financial information of significant associates to carrying amounts of investments in associates in the consolidated financial statements

(5) Reconciliation of financial information of significant associates to carrying amounts of investments in associates in the consolidated financial statements as of December 31, 2018 and 2017 are as follows:

(In millions of won)
	December 31, 2018
	Net assets		Ownership interests (%)		Net assets attributable to the ownership interests		Cost-book value differentials		Carrying amount
Associates:
SK hynix Inc.(*1,2)	￦	46,843,742		20.1		10,005,624		1,202,691		11,208,315
KEB HanaCard Co., Ltd.		1,575,422		15.0		236,313		52,144		288,457
Korea IT Fund		444,764		63.3		281,684		—		281,684
SK China Company Ltd.(*1)		1,708,612		27.3		465,959		85,589		551,548

(In millions of won)
	December 31, 2017
	Net assets		Ownership interests (%)		Net assets attributable to the ownership interests		Cost-book value differentials		Carrying amount
Associates:
SK hynix Inc.(*1,2)	￦	33,814,467		20.1		6,997,560		1,132,440		8,130,000
KEB HanaCard Co., Ltd.		1,516,162		15.0		227,424		53,564		280,988
Korea IT Fund		405,794		63.3		257,003		—		257,003
SK China Company Ltd.(*1)		1,612,899		27.3		439,857		86,242		526,099

(*1) Net assets of these entities represent net assets excluding those attributable to their non-controlling interests.

(*2) The ownership interest is based on the number of shares owned by the Parent Company as divided by the total shares issued by the investee company. The Group applied the equity method using the effective ownership interest which is based on the number of shares owned by the Parent Company and the investee’s total shares outstanding. The effective ownership interest changed from 20.69% to 21.36% due to the investee company’s acquisition of treasury shares.

Details of the changes in investments in associates and joint ventures accounted for using the equity method

(6) Details of the changes in investments in associates and joint ventures accounted for using the equity method for the years ended December 31, 2018 and 2017 are as follows:

(In millions of won)
	2018
	Beginning balance		Acquisition and Disposal			Share of profits (losses)			Other compre- hensive income (loss)			Other increase (decrease)			Ending balance
Investments in associates:
SK China Company Ltd.	￦	526,099		—			7,618			17,831			—			551,548
Korea IT Fund(*)		257,003		—			38,099			(9,919	)		(3,499	)		281,684
KEB HanaCard Co., Ltd.		280,988		—			14,581			(7,112	)		—			288,457
NanoEnTek, Inc.		38,718		3,180			(116	)		(808	)		—			40,974
SK Technology Innovation Company		42,511		—			(1,880	)		1,838			—			42,469
HappyNarae Co., Ltd.		21,873		(29,325	)		7,479			(27	)		—			—
SK hynix Inc.(*)		8,130,000		—			3,238,054			(13,639	)		(146,100	)		11,208,315
SK MENA Investment B.V.		13,853		—			(24	)		591			—			14,420
S.M.Culture & Contents Co., Ltd.		64,966		—			(909	)		(256	)		—			63,801
Xian Tianlong Science and Technology Co., Ltd.		25,891		(25,553	)		(338	)		—			—			—
Hello Nature Ltd.		—		—			(959	)		—			29,508			28,549
12CM Japan, Inc.		—		7,697			(43	)		80			—			7,734
MAKEUS Corp.		—		9,773			(574	)		—			(6	)		9,193
SK South East Asia Investment Pte. Ltd.		—		111,000			—			—			—			111,000
Pacific Telecom Inc.		—		36,487			473			115			—			37,075
Health Connect Co., Ltd. and others(*)		96,479		22,902			(6,474	)		197			(6,710	)		106,394
		9,498,381		136,161			3,294,987			(11,109	)		(126,807	)		12,791,613
Investments in joint ventures:
Dogus Planet, Inc.		13,991		1,537			563			(3,604	)		—			12,487
Finnq Co., Ltd.		16,474		—			(8,728	)		(75	)		—			7,671
12CM GLOBAL PTE. LTD.		9,592		(9,631	)		42			(3	)		—			—
Celcom Planet		—		12,932			(12,932	)		—			—			—
		40,057		4,838			(21,055	)		(3,682	)		—			20,158
	￦	9,538,438		140,999			3,273,932			(14,791	)		(126,807	)		12,811,771

(*) Dividends received from the associates are deducted from the carrying amount during the year ended December 31, 2018.

(In millions of won)
	2017
	Beginning balance		Acquisition and disposition			Share of profit (loss)			Other compre- hensive income (loss)			Impair- ment loss			Other increase (decrease)			Ending balance
Investments in associates:
SK China Company Ltd.(*1)	￦	46,354		113,803			2,707			(36,783	)		—			400,018			526,099
Korea IT Fund(*2)		263,850		—			(8,815	)		3,371			—			(1,403	)		257,003
KEB HanaCard Co., Ltd.		265,798		—			15,494			(304	)		—			—			280,988
NanoEnTek, Inc.		39,514		—			(733	)		(63	)		—			—			38,718
SK Industrial Development China Co., Ltd.(*1)		74,717		—			5,154			(1,092	)		—			(78,779	)		—
SK Technology Innovation Company		47,488		—			433			(5,410	)		—			—			42,511
HappyNarae Co., Ltd.		17,236		688			3,929			20			—			—			21,873
SK hynix Inc.(*2)		6,132,122		—			2,175,887			(90,349	)		—			(87,660	)		8,130,000
SK MENA Investment B.V.		15,451		—			131			(1,729	)		—			—			13,853
SKY Property Mgmt. Ltd.(*1)		263,225		—			2,362			1,141			—			(266,728	)		—
S.M. Culture & Contents Co., Ltd.		—		65,341			(375	)		—			—			—			64,966
Xian Tianlong Science and Technology Co., Ltd.		25,880		—			11			—			—			—			25,891
Health Connect Co., Ltd. and others(*2)		115,181		(1,306	)		(6,924	)		(2,723	)		(1,311	)		(6,438	)		96,479
		7,306,816		178,526			2,189,261			(133,921	)		(1,311	)		(40,990	)		9,498,381
Investments in joint ventures:
Dogus Planet, Inc.		20,081		2,162			(2,267	)		(5,985	)		—			—			13,991
PT XL Planet Digital(*3)		27,512		(18,864	)		(8,648	)		—			—			—			—
Finnq Co., Ltd		24,174		—			(7,691	)		(9	)		—			—			16,474
Celcom Planet and others		25,740		—			(6,228	)		(833	)		—			(9,087	)		9,592
		97,507		(16,702	)		(24,834	)		(6,827	)		—			(9,087	)		40,057
	￦	7,404,323		161,824			2,164,427			(140,748	)		(1,311	)		(50,077	)		9,538,438

(*1) Other increase (decrease) is due to merger of SK China Company Ltd., SK Industrial Development China Co., Ltd. and SKY Property Mgmt. Ltd.

(*2) Dividends received from the associates are deducted from the carrying amount during the year ended December 31, 2017.

(*3) During the year ended December 31, 2017, the Group disposed the shares of PT XL Planet Digital and recognized loss on disposal of ￦27,900 million.

Details of cumulative unrecognized equity method losses

(7) The Group discontinued the application of equity method to the following investees due to their carrying amounts being reduced to zero. The details of cumulative unrecognized equity method losses as of December 31, 2018 are as follows:

(In millions of won)
	Unrecognized loss				Unrecognized change in equity
	2018		Cumulative loss		2018		Cumulative loss
Wave City Development Co., Ltd.	￦	4,434		6,534		—		—
Daehan Kanggun BcN Co., Ltd. and others		10,094		15,410		—		365
	￦	14,528		21,944		—		365