0001193125-19-242459.txt : 20190911 0001193125-19-242459.hdr.sgml : 20190911 20190911061312 ACCESSION NUMBER: 0001193125-19-242459 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20190911 FILED AS OF DATE: 20190911 DATE AS OF CHANGE: 20190911 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KOREA ELECTRIC POWER CORP CENTRAL INDEX KEY: 0000887225 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 133442428 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-13372 FILM NUMBER: 191087140 BUSINESS ADDRESS: STREET 1: 55 JEOLLYEOK-RO CITY: NAJU-SI STATE: M5 ZIP: 58322 BUSINESS PHONE: 201 482 8182 MAIL ADDRESS: STREET 1: 400 KELBY STREET STREET 2: 7TH FLOOR CITY: FORT LEE STATE: NJ ZIP: 07024 6-K 1 d790276d6k.htm FORM 6-K Form 6-K
Table of Contents

 

 

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 2019

 

 

KOREA ELECTRIC POWER CORPORATION

(Translation of registrant’s name into English)

 

 

55 Jeollyeok-ro, Naju-si, Jeollanam-do, 58322, Korea

(Address of principal executive offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ☐            No  ☒

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

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.

 

 

 

Table of Contents

QUARTERLY BUSINESS REPORT

(For the period from January 1, 2019 to June 30, 2019)

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.

Table of Contents

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, 58322, Korea

(Phone number) 82-61-345-4213

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

3. Major businesses

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

 

  •  

development of electric power resources;

 

  •  

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

 

  •  

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

 

  •  

overseas business related to the businesses mentioned above;

 

  •  

investment or contributions related to the businesses mentioned above;

 

  •  

development and operation of certain real estate holdings; and

 

  •  

other businesses entrusted by the government.

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

4. Consolidated subsidiaries

 

      (As of June 30, 2019)   

 

Domestic

  

Overseas

  

Total

39   75   114

5. Major changes in management

On March 4, 2019, Mr. Kim, Sung-Arm was appointed as a standing director in replacement of Mr. Moon, Bong-Soo, whose term of office expired.

Table of Contents

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: KEPCO did not pay any dividends for fiscal year of 2018. Dividend payments for fiscal year 2017 and 2016 were Won 790 and Won 1,980 per share respectively.

II. Business Overview

1. Consolidated financial results by segment for a six-month period ended June 30, 2019 and 2018

 

      (In billions of Won)   

 

     January to June 2018      January to June 2019  
     Sales      Operating
profit		      Sales      Operating
profit		  

Electricity sales

      28,821        -2,140        28,243        -2,152  

Nuclear generation

      3,924        223        4,593        801  

Thermal generation

      13,008        1,071        11,796        301  

Others(*)

     1,613        161        1,631        181  

Subtotal

      47,366        -685        46,263        -869  

Adjustment for related-party transactions

      -18,323        -130        -17,944        -60  
  

 

 

     

 

 

     

 

 

     

 

 

  

Total

      29,043        -815        28,319        -929  
  

 

 

     

 

 

     

 

 

     

 

 

  

 

•  

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

 

(*) 

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

Table of Contents

2. Changes in unit prices of major products

 

      (In Won per kWh)   

 

Business sector

    Company    January to June
2018		    January to June
2019
Electricity sold    Residential    KEPCO    107.09    105.90
   Commercial    125.83    126.73
   Educational    99.71    99.61
   Industrial    104.24    103.96
   Agricultural    47.95    48.05
   Street lighting    114.60    114.57
   Overnight usage    67.88    67.42
Electricity from nuclear generation    Nuclear Generation    KHNP    64.07    57.76
Electricity from thermal generation    Thermal generation    KOSEP    92.34    100.84
   KOMIPO    97.02    104.6
   KOWEPO    97.40    100.84
   KOSPO    99.10    106.87
   EWP    98.01    99.53

3. Power purchase from generation companies for a six-month period ended June 30, 2019

 

Company

    Volume
(GWh)		      Expense
(In billions of Won)		  

KHNP

      78,202        4,507  

KOSEP

      27,905        2,561  

KOMIPO

      18,133        1,889  

KOWEPO

      18,953        1,906  

KOSPO

      23,923        2,557  

EWP

      24,572        2,442  

Others

      75,490        8,786  
  

 

 

     

 

 

  

Total

      267,178        24,648  
  

 

 

     

 

 

  

 

  •  

Based on preliminary adjusted estimates and excluding expense related to the renewable portfolio standard provisions and carbon emissions.

Table of Contents

4. Intellectual property as of June 30, 2019

 

     Patents      Utility
models		      Designs      Trademarks      Total  
   Domestic      Overseas      Domestic      Overseas  

KEPCO

      2,236        243        60        76        103        47        2,765  

Consolidated subsidiaries

      4,078        487        737        132        288        26        5,748  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

      6,314        730        797        208        391        73        8,513  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

III. Financial Information

1. Condensed consolidated financial results as of and for a six-month period ended June 30, 2018 and 2019

(In billions of Won)

 

Consolidated statements of

comprehensive income

     

Consolidated statements of

financial position

  
     January to
June
2018		      January to
June
2019		      Change
(%)		           December 31,
2018		      June 30,
2019		      Change
(%)		  

Sales

      29,043        28,319        -2.5      Total assets      185,249        192,691        4.0  

Operating profit

      -815        -929        -14.0      Total liabilities      114,156        122,900        7.7  

Net income

      -1,169        -1,173        -0.4      Total equity      71,093        69,791        -1.8  

Table of Contents

2. Condensed separate financial results as of and for a six-month period ended June 30, 2018 and 2019

(In billions of Won)

 

Separate statements of

comprehensive income

     

Separate statements of

financial position

  
     January
to June
2018		      January
to June
2019		      Change
(%)		           December 31,
2018		      June 30,
2019		      Change
(%)		  

Sales

      28,821        28,243        -2.0      Total assets      107,486        108,338        0.8  

Operating profit

      -2,140        -2,152        -0.5      Total liabilities      53,404        55,865        4.6  

Net income

      -1,046        -1,524        -45.7      Total equity      54,082        52,473        -3.0  

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 Articles of Incorporation, there may not be more than seven standing directors including the president, and more than eight non-standing directors. The number of non-standing directors must exceed the number of standing directors, including our president.

 

*

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

2. Board meetings and agendas for a six-month period ended June 30, 2019

 

Number of meetings

  

Number of agendas

  

Classification

 

Resolutions

  

Reports

7   25   20   5

 

*

The audit committee held 6 meetings with 26 agendas (of which, 15 were approved as proposed and 11 were accepted as reported).

Table of Contents

3. Major activities of the Board of Directors

 

Date

   

Agenda

   

Results

   

Type

January 23, 2019    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 2019

   

 

Approved as proposed

   

 

Resolution

February 22, 2019    Approval to call for the annual general meeting of shareholders for the fiscal year 2018    Approved as proposed    Resolution
   Approval of amendment to the regulations on internal control over financial reporting    Approved as proposed    Resolution
   Approval of consolidated and separate financial statements for the fiscal year 2018    Approved as proposed    Resolution
   Approval of the maximum aggregate amount of remuneration for directors in 2019    Approved as proposed    Resolution
   Report on the annual management of commercial papers in 2018    Accepted as reported    Report
   Report on internal control over financial reporting for the fiscal year 2018    Accepted as reported    Report
   Report on the evaluation of internal control over financial reporting for the fiscal year 2018    Accepted as reported    Report
   Report on audit results for 2018    Accepted as reported    Report
March 15, 2019    Approval of establishment of and contribution to subsidiaries for meter-reading and security services to transition non-permanent workers to permanent positions    Approved as proposed    Resolution
  

 

Approval to consign contract administration regarding construction of distribution facilities to Public Procurement Service

   

 

Approved as proposed

   

 

Resolution

Table of Contents

Date

   

Agenda

   

Results

   

Type

April 12, 2019    Approval of personnel increase    Approved as proposed    Resolution
   Approval of amendment to the Rules on Employment    Approved as proposed    Resolution
   Approval of amendment to the Regulations for Employee Remuneration and Welfare    Approved as proposed    Resolution
May 17, 2019    Approval of amendment to the construction plan of the flagship electronic vehicles charging station    Approved as proposed    Resolution
  

 

Approval of liquidation of Ulleungdo Natural Energy Co., Ltd.

   

 

Approved as proposed

   

 

Resolution

  

 

Report on audit results for the first quarter of 2019

   

 

Accepted as reported

   

 

Report

June 21, 2019    Approval of amendment to the Electricity Usage Agreement    Deferred    Resolution
   Approval of amendment to the Regulations Concerning the Board of Directors    Approved as proposed    Resolution
   Approval of the mid-to-long term financial management plan (2019-2023)    Approved as proposed    Resolution
   Approval of the safety management plan of 2019    Approved as proposed    Resolution
   Approval to consign contract administration of ICT Planning Department to Public Procurement Service    Approved as proposed    Resolution
June 28, 2019    Approval of amendment to the Electricity Usage Agreement    Approved as proposed    Resolution
  

 

Approval of amendment to the electricity tariff system

   

 

Approved as proposed

   

 

Resolution

 

*

The agenda for the proposed approval of amendment to the Electricity Usage Agreement on June 21, 2019 was deferred, as the directors requested to have further discussion on this matter.

Table of Contents

4. Attendance Status of Non-standing directors

 

Date

   

Agenda

   Kim,
Chang-
Joon		   Yang,
Bong-
Ryull		   Kim,
Jwa-
Kwan		   Jung,
Yeon-
Gil		   Noh,
Geum-
Sun		   Choi,
Seung-
Kook		   Park,
Cheol-
Su		   Kim,
Tai-Yoo

January 23, 2019

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

 

Approval to call for the extraordinary general meeting of shareholders for the fiscal year 2019

  

 

For

  

 

For

  

 

Absent

  

 

For

  

 

For

  

 

Absent

  

 

For

  

 

For

 

February 22, 2019

   

 

Approval to call for the annual general meeting of shareholders for the fiscal year 2018

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Approval of amendment to the regulations on internal control over financial reporting

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Approval of consolidated and separate financial statements for the fiscal year 2018

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Approval of the maximum aggregate amount of remuneration for directors in 2019

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Report on the annual management of commercial papers in 2018

  

Agenda for Report

  

 

Report on internal control over financial reporting for the fiscal year 2018

   Agenda for Report
  

 

Report on the evaluation of internal control over financial reporting for the fiscal year 2018

   Agenda for Report
  

 

Report on audit results for 2018

   Agenda for Report

 

March 15, 2019

   

 

Approval of establishment of and contribution to subsidiaries for meter-reading and security services to transition non-permanent workers to permanent positions

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Approval to consign contract administration regarding construction of distribution facilities to Public Procurement Service

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

 

April 12, 2019

   

 

Approval of personnel increase

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Approval of amendment to the Rules on Employment

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Approval of amendment to the Regulations for Employee Remuneration and Welfare

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

 

May 17, 2019

   

 

Approval of amendment to the construction plan of the flagship electronic vehicles charging station

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Approval of liquidation of Ulleungdo Natural Energy Co., Ltd.

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Report on audit results for the first quarter of 2019

  

 

Agenda for Report

 

June 21, 2019

   

 

Approval of amendment to the Electricity Usage Agreement

  

 

deferred

  

 

deferred

  

 

deferred

  

 

deferred

  

 

deferred

  

 

deferred

  

 

deferred

  

 

deferred

  

 

Approval of amendment to the Regulations Concerning the Board of Directors

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Approval of the mid-to-long term financial management plan (2019-2023)

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Approval of the safety management plan of 2019

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Approval to consign contract administration of ICT Planning Department to Public Procurement Service

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

 

June 28, 2019

   

 

Approval of amendment to the Electricity Usage Agreement

  

 

—  

  

 

—  

  

 

—  

  

 

—  

  

 

—  

  

 

—  

  

 

—  

  

 

—  

  

 

Approval of amendment to the electricity tariff system

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Attendance Rate

  

 

100%

  

 

100%

  

 

85.7%

  

 

100%

  

 

100%

  

 

85.7%

  

 

100%

  

 

100%

 

*

Individual director’s vote results regarding the proposed approval of amendment to the Electricity Usage Agreement on June 28, 2019 are not disclosed, pending confirmation of the facts regarding a criminal complaint and a derivative lawsuit by the minority shareholders of KEPCO, alleging breach of fiduciary duty with respect to KEPCO’s amendment to the electricity tariff system.

Table of Contents

5. Attendance Status of Standing directors

 

Date

   

Agenda

    JongKap
KIM		   Lee,
Jung-Hee		   Kim,
Hoe-
Chun		   Kim,
Dong-
Sub		   Park,
Hyung-
Duck		   Lim,
Hyun-
Seung		   Kim,
Sung-
Arm		  

January 23, 2019

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

 Before

Appointment

  

 

  

 

Approval to call for the extraordinary general meeting of shareholders for the fiscal year 2019

   

 

Absent

  

 

For

  

 

For

  

 

For

  

 

For

  

 

Absent

 

February 22, 2019

   

 

Approval to call for the annual general meeting of shareholders for the fiscal year 2018

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  
  

 

Approval of amendment to the regulations on internal control over financial reporting

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  
  

 

Approval of consolidated and separate financial statements for the fiscal year 2018

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  
  

 

Approval of the maximum aggregate amount of remuneration for directors in 2019

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

    

 Before

Appointment

  

 

  

 

Report on the annual management of commercial papers in 2018

   

 

Agenda for Report

 

 

  

 

Report on internal control over financial reporting for the fiscal year 2018

   

 

Agenda for Report

 

 

  

 

Report on the evaluation of internal control over financial reporting for the fiscal year 2018

   

 

Agenda for Report

 

 

  

 

Report on audit results for 2018

   

 

Agenda for Report

 

 

 

March 15, 2019

   

 

Approval of establishment of and contribution to subsidiaries for meter-reading and security services to transition non-permanent workers to permanent positions

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

Absent

 

 

  

 

Approval to consign contract administration regarding construction of distribution facilities to Public Procurement Service

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

Absent

 

 

 

April 12, 2019

   

 

Approval of personnel increase

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

For

 

 

   Approval of amendment to the Rules on Employment   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

For

 

 

  

 

Approval of amendment to the Regulations for Employee Remuneration and Welfare

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

For

 

 

 

May 17, 2019

   

 

Approval of amendment to the construction plan of the flagship electronic vehicles charging station

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

For

 

 

  

 

Approval of liquidation of Ulleungdo Natural Energy Co., Ltd.

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

For

 

 

  

 

Report on audit results for the first quarter of 2019

   

 

Agenda for Report

 

 

 

June 21, 2019

   

 

Approval of amendment to the Electricity Usage Agreement

   

 

deferred

  

 

deferred

  

 

deferred

  

 

deferred

  

 

deferred

  

 

deferred

  

 

 

 

deferred

 

 

  

 

Approval of amendment to the Regulations Concerning the Board of Directors

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

For

 

 

  

 

Approval of the mid-to-long term financial management plan (2019-2023)

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

For

 

 

  

 

Approval of the safety management plan of 2019

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

For

 

 

  

 

Approval to consign contract administration of ICT Planning Department to Public Procurement Service

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

For

 

 

 

June 28, 2019

   

 

Approval of amendment to the Electricity Usage Agreement

   

 

—  

  

 

—  

  

 

—  

  

 

—  

  

 

—  

  

 

—  

  

 

 

 

—  

 

 

  

 

Approval of amendment to the electricity tariff system

   

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

For

  

 

 

 

For

 

 

  

 

Attendance Rate

   

 

85.7%

  

 

100%

  

 

100%

  

 

100%

  

 

100%

  

 

85.7%

  

 

 

 

80%

 

 

 

*

Individual director’s vote results regarding the proposed approval of amendment to the Electricity Usage Agreement on June 28, 2019 are not disclosed, pending confirmation of the facts regarding a criminal complaint and a derivative lawsuit by the minority shareholders of KEPCO, alleging breach of fiduciary duty with respect to KEPCO’s amendment to the electricity tariff system.

Table of Contents

6. Major activities of the Audit Committee

 

Date

   

Agenda

   

Results

   

Type

January 18, 2019    Approval of appointment of independent auditors of subsidiaries    Approved as proposed    Resolution

 

February 22, 2019

   

 

Approval of amendment to the guidelines for the handling of whistleblowing report and protection of whistleblowers

   

 

Approved as proposed

   

 

Resolution

  

 

Approval of Audit plans for 2019

   

 

Approved as proposed

   

 

Resolution

  

 

Approval of amendment to the regulations on internal control over financial reporting

   

 

Approved as proposed

   

 

Resolution

  

 

Prior approval for non-audit service for subsidiaries by the independent auditor

   

 

Approved as proposed

   

 

Resolution

  

 

Approval of investigation result on the agendas for the extraordinary general meeting of shareholders

   

 

Approved as proposed

   

 

Resolution

  

 

Report on internal control over financial reporting for the fiscal year 2018

   

 

Accepted as reported

   

 

Report

  

 

Report on the evaluation on internal control over financial reporting for the fiscal year 2018

   

 

Accepted as reported

   

 

Report

  

 

Report on audit results for fiscal year 2018

   

 

Accepted as reported

   

 

Report

  

 

Report on education plans for auditors in 2019

   

 

Accepted as reported

   

 

Report

 

March 15, 2019

   

 

Approval of investigation result on the agendas for the annual general meeting of shareholders

   

 

Approved as proposed

   

 

Resolution

  

 

Approval of auditor’s report for the annual general meeting of shareholders

   

 

Approved as proposed

   

 

Resolution

  

 

Approval of amendment to guidelines for internal audit regulations and guideline for practice for KEPCO executives and staff members

   

 

Approved as proposed

   

 

Resolution

  

 

Approval of appointment of independent auditors of subsidiaries

   

 

Approved as proposed

   

 

Resolution

  

 

Report on audit results by the independent auditor for the consolidated and separate financial statements for the fiscal year 2018

   

 

Accepted as reported

   

 

Report

 

April 12, 2019

   

 

Approval of appointment 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

  

 

Report on the Form 20-F for the fiscal year 2018 to be filed with the U.S. Securities and Exchange Commission

   

 

Accepted as reported

   

 

Report

  

 

Auditor’s report for the fiscal year 2018 in accordance with U.S. accounting principles

   

 

Accepted as reported

   

 

Report

 

May 17, 2019

   

 

Approval of amendment to the guidelines for disciplinary actions

   

 

Approved as proposed

   

 

Resolution

  

 

Prior approval for non-audit service for subsidiaries by the independent auditor

   

 

Approved as proposed

   

 

Resolution

  

 

Report on the new accounting policy according to the amendments of IFRS16 Leases

   

 

Accepted as reported

   

 

Report

  

 

Report on audit results for the first quarter of 2019

   

 

Accepted as reported

   

 

Report

  

 

Auditor’s review report for the first quarter of 2019

   

 

Accepted as reported

   

 

Report

 

June 21, 2019

   

 

Approval of amendment to the guidelines for immunity of proactive performance

   

 

Approved as proposed

   

 

Resolution

  

 

Independent auditor’s report on the audit plans for the fiscal year 2019

   

 

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.

Table of Contents

7. Attendance Status of the Audit Committee

 

Date

   

Agenda

   

Noh,
Geum-Sun

  

Jung,
Yeon-Gil

  

Lee,
Jung-Hee

January 18, 2019    Approval of appointment of independent auditors of subsidiaries    For   For   For

 

February 22, 2019

   

 

Approval of amendments to the guidelines for the handling of whistleblowing report and protection of whistleblowers

   

 

For

  

 

For

  

 

For

  

 

Approval of Audit plans for 2019

   

 

For

  

 

For

  

 

For

  

 

Approval of amendment to the regulations on internal control over financial reporting

   

 

For

  

 

For

  

 

For

  

 

Prior approval for non-audit service for subsidiaries by the independent auditor

   

 

For

  

 

For

  

 

For

  

 

Approval of investigation result on the agendas for the extraordinary general meeting of shareholders

   

 

For

  

 

For

  

 

For

  

 

Report on internal control over financial reporting for the fiscal year 2018

   

 

For

  

 

For

  

 

For

  

 

Report on the evaluation on internal control over financial reporting for the fiscal year 2018

   

 

For

  

 

For

  

 

For

  

 

Report on the audit result for fiscal year 2018

   

 

For

  

 

For

  

 

For

  

 

Report on education plans for auditors in 2019

   

 

For

  

 

For

  

 

For

 

March 15, 2019

   

 

Approval of investigation result on the agendas for the annual general meeting of shareholders

   

 

For

  

 

For

  

 

For

  

 

Approval of auditor’s report for the annual general meeting of shareholders

   

 

For

  

 

For

  

 

For

  

 

Approval of amendments to guidelines for internal audit regulations and guideline for practice for KEPCO executives and staff members

   

 

For

  

 

For

  

 

For

  

 

Approval of appointment of independent auditors of subsidiaries

   

 

For

  

 

For

  

 

For

  

 

Report on the auditing results by the independent auditor for the consolidated and separate financial statements for the fiscal year 2018

   

 

For

  

 

For

  

 

For

 

April 12, 2019

   

 

Approval of appointment of independent auditors of subsidiaries

   

 

For

  

 

For

  

 

For

  

 

Prior approval for non-audit service for subsidiaries by the independent auditor

   

 

For

  

 

For

  

 

For

  

 

Report on the Form 20-F for the fiscal year 2018 to be filed with the U.S. Securities and Exchange Commission

   

 

For

  

 

For

  

 

For

  

 

Auditor’s report for the fiscal year 2018 in accordance with U.S. accounting principles

   

 

For

  

 

For

  

 

For

 

May 17, 2019

   

 

Approval of amendment to the guidelines for disciplinary actions

   

 

For

  

 

For

  

 

For

  

 

Prior approval for non-audit service for subsidiaries by the independent auditor

   

 

For

  

 

For

  

 

For

  

 

Report on the new accounting policy according to the amendments of IFRS16 Leases

   

 

For

  

 

For

  

 

For

  

 

Report on audit results for the first quarter of 2019

   

 

For

  

 

For

  

 

For

  

 

Auditor’s review report for the first quarter of 2019

   

 

For

  

 

For

  

 

For

 

June 21, 2019

   

 

Approval of amendment to the guidelines for immunity of proactive performance

   

 

For

  

 

Absent

  

 

For

  

 

Independent auditor’s report on the audit plans for the fiscal year 2019

   

 

For

  

 

Absent

  

 

For

 

Attendance Rate

   

 

100%

  

 

83.3%

  

 

100%

Table of Contents

V. Shareholders

1. List of shareholders as of February 7, 2019

 

     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      46,063,396        7.18  

Public (Non-Koreans)

    Common Shares    1,215      151,719,934        23.63  
   American depositary shares (ADS)    1      28,144,998        4.39  

Public (Koreans)

       416,981      87,958,691        13.70  
     

 

   

 

 

     

 

 

  

Total

    418,200      641,964,077        100.00  
     

 

   

 

 

     

 

 

  

 

•  

Percentages are based on issued shares of common stock.

 

•  

All of our shareholder have equal voting rights.

 

•  

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

VI. Directors and employees as of and for a six-month period ended June 30, 2019 (KEPCO Only)

1. Directors

 

      (In thousands of Won)   

 

Type

    Number
of
directors		    Total
remuneration		      Average
remuneration
per person		     

Remarks

Standing director

    6      668,715        111,452     

Excluding the

members of Audit Committee

Non-standing director

    6      90,000        15,000  

Member of Audit Committee

    Standing director    1      94,714        94,714     
   Non-standing director    2      30,000        15,000     
     

 

   

 

 

     

 

 

     

Total

    15      883,429        58,895     
     

 

   

 

 

     

 

 

     

2. Employees

(In thousands of Won)

 

Type

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

Male

      17,708        109        17,817        16.6        780,206,836        43,790  

Female

      4,425        80        4,505        13.5        158,155,978        35,107  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Total

      22,133        189        22,322        16.0        938,362,814        42,038  
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Table of Contents

VII. Other Information Necessary for the Protection of Investors

1. Summary of shareholder’s meetings for a six-month period ended June 30, 2019

 

Type

   

Agenda

   

Results

Extraordinary General Meeting
held on March 4, 2019

    Election of a Standing Director    Approved as proposed

Annual General Meeting
held on March 22, 2019

    Approval of financial statements for the fiscal year 2018    Approved as proposed
   Approval of the maximum aggregate amount of remuneration for directors in 2019    Approved as proposed

2. Pending legal proceedings as of June 30, 2019

 

      (In billions of Won)   

 

Type

    Number of lawsuits      Amount claimed  

Lawsuits where KEPCO and its subsidiaries are engaged as the defendants

      598        606  

Lawsuits where KEPCO and its subsidiaries are engaged as the plaintiffs

      206        748  

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, Kab-soon

Name:   Kim, Kab-soon
Title:   Vice President

Date: September 11, 2019

Table of Contents

KOREA ELECTRIC POWER CORPORATION

AND ITS SUBSIDIARIES

Consolidated Interim Financial Statements

June 30, 2019

(Unaudited)

(With Independent Auditor’s Review Report Thereon)

 

1

Table of Contents

INDEX TO FINANCIAL STATEMENTS

 

     Page

Independent Auditor’s Review Report

    3

Consolidated Interim Statements of Financial Position

    4

Consolidated Interim Statements of Comprehensive Income (Loss)

    6

Consolidated Interim Statements of Changes in Equity

    8

Consolidated Interim Statements of Cash Flows

    10

Notes to the Consolidated Interim Financial Statements

    12

 

2

Table of Contents

LOGO

Independent Auditor’s Review Report

Based on a report originally issued in Korean

The Board of Directors and Shareholders

Korea Electric Power Corporation:

Report on Review of Consolidated Interim Financial Statements

We have reviewed the accompanying consolidated interim financial statements of Korea Electric Power Corporation and its subsidiaries (the “Group”), which comprise the consolidated interim statements of financial position as of June 30, 2019, the consolidated interim statements of comprehensive income (loss) for the three and six-month period ended June 30, 2019, consolidated interim statements of changes in equity and consolidated interim statements of cash flows for the six-month period ended June 30, 2019 and the notes to the accompanying consolidated interim financial statement, including a summary of significant accounting policies.

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 (“KIFRS”) 1034 ‘Interim Financial Reporting’ and for such internal control as management determines is necessary to enable the preparation of interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Review Responsibility

Our responsibility is to issue a report on these consolidated interim financial statements based on our review. We conducted our review 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 auditing standards generally accepted in the Republic of Korea (“KGAAS”) 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.

Conclusion

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

Other Matters

The consolidated interim statements of comprehensive income for the three and six-month periods ended June 30, 2018, consolidated interim statements of changes in equity and consolidated interim statements of cash flows for the six-month period ended June 30, 2018, prepared in accordance with KIFRS 1034 and presented for comparative purpose, have been reviewed by KPMG Samjong Accounting Corp. whose review report dated August 14, 2018 expressed an unqualified review conclusion.

Moreover, the consolidated statement of financial position as of December 31, 2018, and the related consolidated statement of comprehensive income (loss), consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended which have been audited by KPMG Samjong Accounting Corp., in accordance with KGAAS (not presented herein), whose report dated March 11, 2019 expressed an unqualified opinion. The accompanying consolidated statement of financial position as of December 31, 2018 presented for comparative purpose is not different, in all material respects, from the above audited consolidated statement of financial position.

August 14, 2019

 

This review report is effective as of August 14, 2019, the independent auditor’s review report date. Accordingly, certain material subsequent events or circumstances may have occurred during the period from the independent auditor’s review report date to the time this review report is used. Such events and circumstances could significantly affect the accompanying consolidated interim financial statements and may result in modification to this review report.

 

3

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Financial Position

As of June 30, 2019 and December 31, 2018

(Unaudited)

 

In millions of won    Note             June 30, 2019      December 31, 2018  

Assets

            

Current assets

            

Cash and cash equivalents

      5,6,7,45      W        1,308,117        1,358,345  

Current financial assets, net

      5,6,9,11,12,13,45           3,746,955        2,359,895  

Trade and other receivables, net

      5,8,15,21,45,46,47           7,072,423        7,793,592  

Inventories, net

      14           6,752,920        7,188,253  

Income tax refund receivables

            25,964        143,214  

Current non-financial assets

      16           1,204,765        878,888  

Assets held-for-sale

      17,42           5,375        22,881  
        

 

 

     

 

 

  

Total current assets

            20,116,519        19,745,068  
        

 

 

     

 

 

  

Non-current assets

            

Non-current financial assets, net

      5,6,9,10,11,12,13,45           2,349,918        2,113,613  

Non-current trade and other receivables, net

      5,8,15,45,46,47           1,754,704        1,819,845  

Property, plant and equipment, net

      19,25,28,49           159,165,892        152,743,194  

Investment properties, net

      20,28           179,337        159,559  

Goodwill

      17           2,582        2,582  

Intangible assets other than goodwill, net

      22,28,46           1,460,319        1,225,942  

Investments in associates

      4,18           4,102,360        4,064,820  

Investments in joint ventures

      4,18           1,878,086        1,813,525  

Deferred tax assets

            1,336,034        1,233,761  

Non-current non-financial assets

      16           345,012        327,152  
        

 

 

     

 

 

  

Total non-current assets

            172,574,244        165,503,993  
        

 

 

     

 

 

  

Total Assets

      4      W        192,690,763        185,249,061  
        

 

 

     

 

 

  

 

(Continued)

 

4

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Financial Position, Continued

As of June 30, 2019 and December 31, 2018

(Unaudited)

 

In millions of won    Note             June 30, 2019     December 31, 2018  

Liabilities

           

Current liabilities

           

Trade and other payables, net

      5,23,25,45,47      W        5,767,818       6,405,395  

Current financial liabilities, net

      5,12,24,45,47           10,236,990       7,981,879  

Income tax payables

            411,449       285,420  

Current non-financial liabilities

      21,29,30           5,801,348       5,574,041  

Current provisions

      27,45           1,787,299       1,594,798  
        

 

 

    

 

 

  

Total current liabilities

            24,004,904       21,841,533  
        

 

 

    

 

 

  

Non-current liabilities

           

Non-current trade and other payables, net

      5,23,25,45,47           7,091,807       2,941,696  

Non-current financial liabilities, net

      5,12,24,45,47           55,462,245       53,364,911  

Non-current non-financial liabilities

      29,30           8,362,767       8,160,033  

Employee benefits liabilities, net

      26,45           2,138,424       1,645,069  

Deferred tax liabilities

            8,916,814       9,617,309  

Non-current provisions

      27,45           16,922,566       16,585,748  
        

 

 

    

 

 

  

Total non-current liabilities

            98,894,623       92,314,766  
        

 

 

    

 

 

  

Total Liabilities

      4      W        122,899,527       114,156,299  
        

 

 

    

 

 

  

Equity

           

Contributed capital

      1,31,45        

Share capital

       W        3,209,820       3,209,820  

Share premium

            843,758       843,758  
        

 

 

    

 

 

  
           4,053,578       4,053,578  
        

 

 

    

 

 

  

Retained earnings

      32          

Legal reserves

            1,604,910       1,604,910  

Voluntary reserves

            34,785,425       35,906,267  

Unappropriated retained earnings

            13,717,315       14,007,942  
        

 

 

    

 

 

  
           50,107,650       51,519,119  
        

 

 

    

 

 

  

Other components of equity

      34          

Other capital surplus

            1,226,825       1,234,825  

Accumulated other comprehensive loss

            (263,933 )      (358,570 ) 

Other equity

            13,294,973       13,294,973  
        

 

 

    

 

 

  
           14,257,865       14,171,228  
        

 

 

    

 

 

  

Equity attributable to owners of the controlling company

            68,419,093       69,743,925  

Non-controlling interests

      17, 33           1,372,143       1,348,837  
        

 

 

    

 

 

  

Total Equity

       W        69,791,236       71,092,762  
        

 

 

    

 

 

  

Total Liabilities and Equity

       W        192,690,763       185,249,061  
        

 

 

    

 

 

  

The accompanying notes are an integral part of the consolidated interim financial statements.

 

5

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income (Loss)

For the three and six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

In millions of won, except per share information      June 30, 2019     June 30, 2018  
     Note             Three-month
period ended		     Six-month
period ended		     Three-month
period ended		     Six-month
period ended		  

Sales

      4,35,45,47              

Sales of goods

       W        12,551,869       27,305,880       12,654,829       27,712,806  

Sales of services

            85,538       180,417       73,116       147,282  

Sales of construction services

      21           287,661       543,715       424,433       874,594  

Revenue related to transfer of assets from customers

            145,906       289,366       184,780       308,521  
        

 

 

    

 

 

    

 

 

    

 

 

  
           13,070,974       28,319,378       13,337,158       29,043,203  
        

 

 

    

 

 

    

 

 

    

 

 

  

Cost of sales

      14,26,43,47              

Cost of sales of goods

            (12,293,502 )      (27,184,671 )      (12,877,486 )      (27,565,223 ) 

Cost of sales of services

            (161,500 )      (285,223 )      (121,697 )      (234,089 ) 

Cost of sales of construction services

            (257,356 )      (494,372 )      (380,634 )      (804,471 ) 
        

 

 

    

 

 

    

 

 

    

 

 

  
           (12,712,358 )      (27,964,266 )      (13,379,817 )      (28,603,783 ) 
        

 

 

    

 

 

    

 

 

    

 

 

  

Gross profit (loss)

            358,616       355,112       (42,659 )      439,420  

Selling and administrative expenses

      26,36,43,47           (657,275 )      (1,283,651 )      (644,459 )      (1,254,151 ) 
        

 

 

    

 

 

    

 

 

    

 

 

  

Operating loss

      4           (298,659 )      (928,539 )      (687,118 )      (814,731 ) 

Other non-operating income

      37           95,454       171,157       93,826       178,652  

Other non-operating expense

      37           (35,795 )      (51,138 )      (80,619 )      (97,521 ) 

Other gains (losses), net

      38           (58,392 )      (68,676 )      (685,328 )      (631,273 ) 

Finance income

      5,12,39           348,350       649,525       837,163       568,182  

Finance expenses

      5,12,40           (816,592 )      (1,514,968 )      (1,249,024 )      (1,437,685 ) 

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

      4,18              

Share in profit of associates and joint ventures

            61,152       266,884       91,048       352,629  

Gain on disposal of investments in associates and joint ventures

            2,863       9,064       —         —    

Gain on disposal of investments in subsidiaries

            —         —         3       3  

Share in loss of associates and joint ventures

            (48,517 )      (79,060 )      (19,952 )      (78,502 ) 

Loss on disposal of investments in associates and joint ventures

            —         (2 )      —         (2,184 ) 
        

 

 

    

 

 

    

 

 

    

 

 

  
           15,498       196,886       71,099       271,946  
        

 

 

    

 

 

    

 

 

    

 

 

  

Loss before income tax

            (750,136 )      (1,545,753 )      (1,700,001 )      (1,962,430 ) 

Income tax expense (benefit)

      41           (337,958 )      (372,419 )      (781,410 )      (793,372 ) 
        

 

 

    

 

 

    

 

 

    

 

 

  

Loss for the period

       W        (412,178 )      (1,173,334 )      (918,591 )      (1,169,058 ) 

 

(Continued)

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income (Loss), Continued

For the three and six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

In millions of won, except per share information             June 30, 2019     June 30, 2018  
     Note             Three-month
period ended		     Six-month
period ended		     Three-month
period ended		     Six-month
period ended		  

Other comprehensive income (loss)

      5,12,26,32,34              

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

               

Remeasurement of defined benefit liability, net of tax

      26,32      W        (88,261 )      (186,023 )      (48,458 )      (56,542 ) 

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

      34           (654 )      (448 )      3,499       8,909  

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

      34           (19,334 )      (463 )      (25,626 )      (6,544 ) 

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

               

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

      5,12,34           9,293       14,556       (14,040 )      (34,788 ) 

Foreign currency translation of foreign operations, net of tax

      34           36,041       60,278       53,764       36,325  

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

      34           8,424       35,704       43,680       93,959  
        

 

 

    

 

 

    

 

 

    

 

 

  

Other comprehensive income (loss), net of tax

            (54,491 )      (76,396 )      12,819       41,319  
        

 

 

    

 

 

    

 

 

    

 

 

  

Total comprehensive income (loss) for the period

       W        (466,669 )      (1,249,730 )      (905,772 )      (1,127,739 ) 
        

 

 

    

 

 

    

 

 

    

 

 

  

Profit (loss) attributable to:

               

Owners of the controlling company

      44      W        (447,546 )      (1,235,344 )      (949,219 )      (1,226,489 ) 

Non-controlling interests

            35,368       62,010       30,628       57,431  
        

 

 

    

 

 

    

 

 

    

 

 

  
      W        (412,178 )      (1,173,334 )      (918,591 )      (1,169,058 ) 
        

 

 

    

 

 

    

 

 

    

 

 

  

Total comprehensive income (loss) attributable to:

               

Owners of the controlling company

       W        (504,129 )      (1,316,832 )      (950,697 )      (1,196,851 ) 

Non-controlling interests

            37,460       67,102       44,925       69,112  
        

 

 

    

 

 

    

 

 

    

 

 

  
      W        (466,669 )      (1,249,730 )      (905,772 )      (1,127,739 ) 
        

 

 

    

 

 

    

 

 

    

 

 

  

Loss per share (in won)

      44              

Basic and diluted loss per share

       W        (697 )      (1,924 )      (1,479 )      (1,911 ) 

The accompanying notes are an integral part of the consolidated interim financial statements.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

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

Balance at January 1, 2018

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

Effect of change in accounting policy

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

Adjusted balance at January 1, 2018

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

Total comprehensive income (loss) for the period

                 

Net profit (loss) for the period

         —          (1,226,489 )      —         (1,226,489 )      57,431       (1,169,058 ) 

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

                 

Remeasurement of defined benefit liability, net of tax

         —          (51,263 )      —         (51,263 )      (5,279 )      (56,542 ) 

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

         —          8,900       —         8,900       9       8,909  

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

         —          —         (6,544 )      (6,544 )      —         (6,544 ) 

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

                 

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

         —          —         (35,032 )      (35,032 )      244       (34,788 ) 

Foreign currency translation of foreign operations, net of tax

         —          —         19,616       19,616       16,709       36,325  

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

         —          —         93,961       93,961       (2 )      93,959  

Transactions with owners of the Company, recognized directly in equity

                 

Dividends paid

         —          (507,152 )      —         (507,152 )      (49,637 )      (556,789 ) 

Issuance of shares of capital by subsidiaries and others

         —          —         22       22       9,825       9,847  

Changes in consolidation scope

         —          —         —         —         46       46  

Dividends paid (hybrid securities)

         —          —         —         —         (6,692 )      (6,692 ) 
     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at June 30, 2018

    W        4,053,578        51,666,482       14,252,481       69,972,541       1,305,850       71,278,391  
     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(Continued)

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

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

Balance at January 1, 2019

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

Total comprehensive income (loss) for the period

                 

Net profit (loss) for the period

         —          (1,235,344 )      —         (1,235,344 )      62,010       (1,173,334 ) 

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

                 

Remeasurement of defined benefit liability, net of tax

         —          (174,173 )      —         (174,173 )      (11,850 )      (186,023 ) 

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

         —          (448 )      —         (448 )      —         (448 ) 

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

         —          —         (463 )      (463 )      —         (463 ) 

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

                 

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

         —          —         14,269       14,269       287       14,556  

Foreign currency translation of foreign operations, net of tax

         —          —         43,626       43,626       16,652       60,278  

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

         —          —         35,701       35,701       3       35,704  

Transactions with owners of the Company, recognized directly in equity

                 

Dividends paid

         —          —         —         —         (70,152 )      (70,152 ) 

Issuance of shares of capital by subsidiaries and others

         —          —         (7,859 )      (7,859 )      10,358       2,499  

Transactions between consolidated entities

         —          —         (141 )      (141 )      3,054       2,913  

Changes in consolidation scope

         —          —         —         —         19,636       19,636  

Dividends paid (hybrid bond)

         —          —         —         —         (6,692 )      (6,692 ) 

Others

         —          (1,504 )      1,504       —         —         —    
     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Balance at June 30, 2019

    W        4,053,578        50,107,650       14,257,865       68,419,093       1,372,143       69,791,236  
     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

The accompanying notes are an integral part of the consolidated interim financial statements.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Cash Flows

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

In millions of won           June 30, 2019     June 30, 2018  

Cash flows from operating activities

        

Loss for the period

    W        (1,173,334 )      (1,169,058 ) 

Adjustments to reconcile net loss to net cash provided by operating activities:

        

Income tax expense (benefit)

         (372,419 )      (793,372 ) 

Depreciation

         5,307,622       4,988,819  

Amortization

         82,395       59,688  

Employee benefit expense

         193,062       173,048  

Bad debt expense

         20,460       29,521  

Interest expense

         1,016,529       927,308  

Loss on sale of financial assets

         261       —    

Loss on disposal of property, plant and equipment

         26,747       13,400  

Loss on abandonment of property, plant, and equipment

         184,205       233,856  

Loss on impairment of property, plant, and equipment

         29,685       701,317  

Loss on disposal of intangible assets

         61,696       6  

Increase to provisions

         457,678       542,417  

Loss on foreign currency translation, net

         388,954       369,673  

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

         (8,391 )      —    

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

         296       3,410  

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

         (359,945 )      (300,723 ) 

Share in income of associates and joint ventures, net

         (187,824 )      (274,127 ) 

Gain on sale of financial assets

         (964 )      (672 ) 

Gain on disposal of property, plant and equipment

         (29,187 )      (26,363 ) 

Gain on disposal of intangible assets

         (97 )      (3 ) 

Gain on disposal of associates and joint ventures

         (9,064 )      —    

Loss on disposal of associates and joint ventures

         2       2,184  

Gain on disposal of subsidiaries

         —         (3 ) 

Interest income

         (124,579 )      (108,116 ) 

Dividend income

         (3,740 )      (11,811 ) 

Others, net

         4,769       9,959  
     

 

 

    

 

 

  
        6,678,151       6,539,416  
     

 

 

    

 

 

  

Changes in working capital:

        

Trade receivables

         881,127       933,188  

Non-trade receivables

         377,035       321,307  

Accrued income

         208,177       150,648  

Other receivables

         38,972       (4,090 ) 

Other current assets

         (245,379 )      (623,356 ) 

Inventories

         (275,220 )      (789,441 ) 

Other non-current assets

         160,292       (95,683 ) 

Trade payables

         (1,430,773 )      (468,209 ) 

Non-trade payables

         122,495       16,023  

Accrued expenses

         (444,200 )      (144,505 ) 

Other payables

         (320 )      —    

Other current liabilities

         252,250       302,413  

Other non-current liabilities

         246,205       147,116  

Investments in associates and joint ventures (dividends received)

         166,267       99,744  

Provisions

         (836,864 )      (616,197 ) 

Payments of employee benefit obligations

         (29,153 )      (41,533 ) 

Plan assets

         (270 )      (234 ) 
     

 

 

    

 

 

  
        (809,359 )      (812,809 ) 
     

 

 

    

 

 

  

 

(Continued)

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Cash Flows, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

In millions of won           June 30, 2019     June 30, 2018  

Cash generated from operating activities

    W        4,695,458       4,557,549  

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

         3,740       10,753  

Interest paid

         (1,001,541 )      (916,445 ) 

Interest received

         74,784       86,117  

Income taxes paid

         (110,575 )      (313,566 ) 
     

 

 

    

 

 

  

Net cash provided by operating activities

         3,661,866       3,424,408  
     

 

 

    

 

 

  

Cash flows from investing activities

        

Acquisition of associates and joint ventures

         (58,733 )      (173,329 ) 

Proceeds from disposals of property, plant and equipment

         189,701       45,100  

Acquisition of property, plant and equipment

         (5,973,013 )      (6,627,788 ) 

Proceeds from disposals of intangible assets

         261       3  

Acquisition of intangible assets

         (156,095 )      (46,838 ) 

Proceeds from disposals of financial assets

         1,303,298       1,039,063  

Acquisition of financial assets

         (2,618,226 )      (2,234,051 ) 

Increase in loans

         (138,622 )      (119,495 ) 

Collection of loans

         80,497       58,879  

Increase in deposits

         (130,139 )      (312,832 ) 

Decrease in deposits

         132,868       173,221  

Proceeds from disposals of assets held-for-sale

         779       17,316  

Receipt of government grants

         7,435       15,007  

Use of government grants

         (18 )      —    

Net cash inflow (outflow) from changes in consolidation scope

         (2,106 )      31  

Other cash outflow from investing activities, net

         (64,906 )      (22,497 ) 
     

 

 

    

 

 

  

Net cash used in investing activities

         (7,427,019 )      (8,188,210 ) 
     

 

 

    

 

 

  

Cash flows from financing activities

        

Proceeds from short-term borrowings, net

         849,287       2,959,867  

Proceeds from long-term borrowings and debt securities

         6,999,686       6,581,460  

Repayment of long-term borrowings and debt securities

         (3,827,361 )      (4,151,914 ) 

Payment of finance lease liabilities

         (264,809 )      (67,687 ) 

Settlement of derivative instruments, net

         36,252       199  

Change in non-controlling interest

         5,203       9,886  

Dividends paid (hybrid bond)

         (6,692 )      (8,829 ) 

Dividends paid

         (70,955 )      (556,789 ) 

Other cash outflow from financing activities, net

         —         (87 ) 
     

 

 

    

 

 

  

Net cash provided by financing activities

         3,720,611       4,766,106  
     

 

 

    

 

 

  

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

         (44,542 )      2,304  

Effect of exchange rate fluctuations on cash held

         (5,686 )      17,621  
     

 

 

    

 

 

  

Net increase (decrease) in cash and cash equivalents

         (50,228 )      19,925  

Cash and cash equivalents at January 1

         1,358,345       2,369,739  
     

 

 

    

 

 

  

Cash and cash equivalents at June 30

    W        1,308,117       2,389,664  
     

 

 

    

 

 

  

The accompanying notes are an integral part of the consolidated interim financial statements.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

For the six-month periods ended June 30, 2019 and 2018

(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 (“KIFRS”) 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, 2019, KEPCO’s share capital amounts to W3,209,820 million and KEPCO’s shareholders are as follows:

 

     Number of shares      Percentage of
ownership		  

Government of the Republic of Korea

      116,841,794        18.20 % 

Korea Development Bank

      211,235,264        32.90 % 

Others (*)

      313,887,019        48.90 % 
  

 

 

     

 

 

  
     641,964,077        100.00 % 
  

 

 

     

 

 

  

 

(*)

The number of shares held by foreign shareholders are 179,864,932 shares (28.02%) as of the most recent closing date of Register of Shareholders (February 7, 2019).

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 have been prepared in accordance with KIFRS 1034 ‘Interim Financial Reporting’ as part of the period covered by KEPCO and its subsidiaries’ (the “Group”) KIFRS annual financial statements.

 

(2)

Basis of measurement

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

 

  •  

financial assets at fair value through profit or loss

 

  •  

financial assets at fair value through other comprehensive income or loss

 

  •  

derivative financial instruments 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 Group operates.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

2.

Basis of Preparation, Continued

 

(4)

Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with KIFRS 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 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 are as follows:

 

  (i)

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

The Group 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 Group records the fair value of estimated decommissioning costs as a liability in the period in which the Group 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 Group 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. The measurement of such liability is subject to change based on change in estimated cash flow, inflation rate, discount rate, and expected timing of decommissioning.

 

  (ii)

Deferred tax

The Group 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 Group does not realize estimated future taxable income during the carryforward periods.

 

  (iii)

Valuations of financial instruments at fair values

The Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Group has established control framework with respect to the measurement of fair values. 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 KIFRS 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 Group 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 Group 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 Group 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 26).

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

2.

Basis of Preparation, Continued

 

(4)

Use of estimates and judgments, continued

 

  (v)

Unbilled revenue

Energy delivered but not metered nor billed is 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 consumptions and prices based on statistics. Unbilled revenue recognized as of June 30, 2019 and 2018 are W1,189,843 million and W1,213,807 million, respectively.

 

  (vi)

Construction contracts

For each performance obligation satisfied over time, the Group recognizes revenue over time by measuring the progress towards complete satisfaction of that performance obligation. The Group applies a single method of measuring progress for each performance obligation satisfied over time and applies that method consistently to similar performance obligations and in similar circumstances. Revenue and costs are recognized based on the progress towards complete satisfaction of a performance obligation utilizing the cost-based input method at the end of the reporting period. In applying the cost-based input method, it is necessary to use estimates and assumptions related to the Group’s efforts or inputs expected to be incurred in the future, costs incurred which are not related to the performance obligation, changes in the Group’s efforts or inputs due to change of the performance obligation, etc. Total revenue is measured based on an agreed contract price; however, it may fluctuate due to the variation of performance obligations. The measurement of revenue is affected by various uncertainties resulting from unexpected future events.

 

(5)

Changes in accounting policies

 

  (i)

KIFRS 1116 ‘Leases’

KIFRS 1116 replaces existing leases guidance, including KIFRS 1017 ‘Lease’, KIFRS 2104 ‘Determining whether an Arrangement contains a Lease’, KIFRS 2015 ‘Operating Leases – Incentives’ and KIFRS 2027 ‘Evaluating the Substance of Transactions Involving the Legal Form of a Lease’. The standard sets out the principles for the recognition, measurement, presentation and disclosure of leases and requires lessees to account for most leases under a single on-balance sheet model.

Lessor accounting under KIFRS 1116 is substantially unchanged from KIFRS 1017. Lessors will continue to classify leases as either operating or finance leases using similar principles as in KIFRS 1017.

The Group adopted KIFRS 1116 using the modified retrospective method of adoption with the date of initial application of 1 January 2019. Under this method, the standard is applied retrospectively with the cumulative effect of initially applying the standard recognized at the date of initial application. The Group elected to use the recognition exemptions for lease contracts that, at the commencement date, have a lease term of 12 months or less and do not contain a purchase option (‘short-term leases’), and lease contracts for which the underlying asset is of low value (‘low-value assets’).

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

2.

Basis of Preparation, Continued

 

(5)

Changes in accounting policies, continued

 

The impacts on the Group’s consolidated statements of financial position on the date of initial application (January 1, 2019) are as follows:

 

In millions of won           Original carrying
amount under
KIFRS 1017		      Adjustment      New carrying
amount under
KIFRS 1116		  

Assets

            

Current assets

            

Cash and cash equivalents

    W        1,358,345        —          1,358,345  

Current financial assets, net

         2,359,895        —          2,359,895  

Trade and other receivables, net

         7,793,592        —          7,793,592  

Inventories, net

         7,188,253        —          7,188,253  

Income tax refund receivables

         143,214        —          143,214  

Current non-financial assets

         878,888        (5,098 )       873,790  

Assets held-for-sale

         22,881        —          22,881  
     

 

 

     

 

 

     

 

 

  

Total current assets

         19,745,068        (5,098 )       19,739,970  
     

 

 

     

 

 

     

 

 

  

Non-current assets

            

Non-current financial assets, net

         2,113,613        —          2,113,613  

Non-current trade and other receivables, net

         1,819,845        (9 )       1,819,836  

Property, plant and equipment, net

         152,743,194        4,633,091        157,376,285  

Investment properties, net

         159,559        —          159,559  

Goodwill

         2,582        —          2,582  

Intangible assets other than goodwill, net

         1,225,942        —          1,225,942  

Investments in associates

         4,064,820        —          4,064,820  

Investments in joint ventures

         1,813,525        —          1,813,525  

Deferred tax assets

         1,233,761        —          1,233,761  

Non-current non-financial assets

         327,152        (1,327 )       325,825  
     

 

 

     

 

 

     

 

 

  

Total non-current assets

         165,503,993        4,631,755        170,135,748  
     

 

 

     

 

 

     

 

 

  

Total Assets

    W        185,249,061        4,626,657        189,875,718  
     

 

 

     

 

 

     

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

2.

Basis of Preparation, Continued

 

(5)

Changes in accounting policies, continued

 

In millions of won           Original carrying
amount under
KIFRS 1017		      Adjustment      New carrying
amount under
KIFRS 1116		  

Liabilities

            

Current liabilities

            

Trade and other payables, net

    W        6,405,395        513,069        6,918,464  

Current financial liabilities, net

         7,981,879        —          7,981,879  

Income tax payables

         285,420        —          285,420  

Current non-financial liabilities

         5,574,041        —          5,574,041  

Current provisions

         1,594,798        —          1,594,798  
     

 

 

     

 

 

     

 

 

  

Total current liabilities

         21,841,533        513,069        22,354,602  
     

 

 

     

 

 

     

 

 

  

Non-current liabilities

            

Non-current trade and other payables, net

         2,941,696        4,113,588        7,055,284  

Non-current financial liabilities, net

         53,364,911        —          53,364,911  

Non-current non-financial liabilities

         8,160,033        —          8,160,033  

Employee benefits liabilities, net

         1,645,069        —          1,645,069  

Deferred tax liabilities

         9,617,309        —          9,617,309  

Non-current provisions

         16,585,748        —          16,585,748  
     

 

 

     

 

 

     

 

 

  

Total non-current liabilities

         92,314,766        4,113,588        96,428,354  
     

 

 

     

 

 

     

 

 

  

Total Liabilities

    W        114,156,299        4,626,657        118,782,956  
     

 

 

     

 

 

     

 

 

  

Equity

            

Contributed capital

    W        4,053,578        —          4,053,578  

Retained earnings

         51,519,119        —          51,519,119  

Other components of equity

         14,171,228        —          14,171,228  
     

 

 

     

 

 

     

 

 

  

Equity attributable to owners of the controlling company

         69,743,925        —          69,743,925  

Non-controlling interests

         1,348,837        —          1,348,837  
     

 

 

     

 

 

     

 

 

  

Total Equity

    W        71,092,762        —          71,092,762  
     

 

 

     

 

 

     

 

 

  

Total Liabilities and Equity

    W        185,249,061        4,626,657        189,875,718  
     

 

 

     

 

 

     

 

 

  

The Group has lease contracts for various items such as consecutive voyage charter contracts, power purchase agreements (PPA), real estate lease contracts including buildings, switchyard, and land for electric substation, vehicles, and other equipment.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

2.

Basis of Preparation, Continued

 

(5)

Changes in accounting policies, continued

 

Before adoption of KIFRS 1116, the Group, as a lessee, classified a lease contract as a finance lease if it transferred substantially all of the risks and rewards incidental to ownership of the leased asset to the Group; otherwise as an operating lease. Upon adoption of KIFRS 1116, the Group applied a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The standard provides specific transition requirements and practical expedients, which has been applied by the Group.

 

  •  

Leases previously classified as finance leases

The Group did not change the initial carrying amounts of recognized assets and liabilities at the date of initial application for leases previously classified as finance leases (i.e., the right-of-use assets and lease liabilities equal the lease assets and liabilities recognized under KIFRS 1017). The requirements of KIFRS 1116 was applied to these leases from 1 January 2019.

 

  •  

Leases previously accounted for as operating leases

The Group recognized right-of-use assets and lease liabilities for those leases previously classified as operating leases, except for short-term leases and leases of low-value assets. The right-of-use assets were recognized based on the amount equal to the lease liabilities, adjusted for any related prepaid and accrued lease payments previously recognized. Lease liabilities were recognized based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application.

The Group also applied the available practical expedients wherein it:

 

  •  

Applied the short-term leases exemptions to leases with lease term that ends within 12 months at the date of initial application

 

  •  

Excluded the initial direct costs from the measurement of the right-of-use asset at the date of initial application

 

  •  

Used hindsight in determining the lease term where the contract contains options to extend or terminate the lease

As of June 30, 2019, the Group is reviewing the applicability of KIFRS 1116 regarding subsurface rights and the financial impact of the application.

 

  (ii)

Summary of new accounting policies

Set out below are the new accounting policies of the Group upon adoption of KIFRS 1116, which have been applied from the date of initial application:

 

  •  

Right-of-use assets

The Group recognizes right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Unless the Group is reasonably certain to obtain ownership of the leased asset at the end of the lease term, the recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.

 

  •  

Lease liabilities

At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognized as expenses in the period on which the event or condition that triggers the payment occurs.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

2.

Basis of Preparation, Continued

 

(5)

Changes in accounting policies, continued

 

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in-substance fixed lease payments or a change in the assessment of an option to purchase the underlying asset.

 

  •  

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognized as expense on a straight-line basis over the lease term.

Book value and changes in book value of right-of-use assets and lease liabilities during the period are described in Note 25.

 

  (iii)

Other changes in accounting standards effective from January 1, 2019 are as follows. The Group believes that these amendments have no significant impact on the Group’s consolidated interim financial statements.

KIFRS 2123 : Uncertainty over Income Tax Treatment

The Interpretation addresses the accounting for income taxes when tax treatments involve uncertainty that affects the application of KIFRS 1012 Income Taxes. It does not apply to taxes or levies outside the scope of KIFRS 1012, nor does it specifically include requirements relating to interest and penalties associated with uncertain tax treatments. The Interpretation specifically addresses the following:

 

  •  

Whether an entity considers uncertain tax treatments separately

 

  •  

The assumptions an entity makes about the examination of tax treatments by taxation authorities

 

  •  

How an entity determines taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates

 

  •  

How an entity considers changes in facts and circumstances

The Group determines whether to consider each uncertain tax treatment separately or together with one or more other uncertain tax treatments. The approach that better predicts the resolution of the uncertainty needs to be followed.

Amendments to KIFRS 1109 : Financial Instruments

Under KIFRS 1109, a debt instrument can be measured at amortized cost or at fair value through other comprehensive income, provided that the contractual cash flows are ‘solely payments of principal and interest on the principal amount outstanding’ (the SPPI criterion) and the instrument is held within the appropriate business model for that classification. The amendments to KIFRS 1109 clarify that a financial asset passes the SPPI criterion regardless of an event or circumstance that causes the early termination of the contract and irrespective of which party pays or receives reasonable compensation for the early termination of the contract.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

2.

Basis of Preparation, Continued

 

(5)

Changes in accounting policies, continued

 

Amendments to KIFRS 1019 : Employee Benefits

The amendments to KIFRS 1019 address the accounting when a plan amendment, curtailment or settlement occurs during a reporting period. The amendments specify that when a plan amendment, curtailment or settlement occurs during the annual reporting period, an entity is required to determine the current service cost for the remainder of the period after the plan amendment, curtailment or settlement, using the actuarial assumptions used to remeasure the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event. An entity is also required to determine the net interest for the remainder of the period after the plan amendment, curtailment or settlement using the net defined benefit liability (asset) reflecting the benefits offered under the plan and the plan assets after that event, and the discount rate used to remeasure that net defined benefit liability (asset).

Amendments to KIFRS 1028 : Long-term interests in associates and joint ventures

The amendments clarify that an entity applies KIFRS 1109 to long-term interests in an associate or joint venture to which the equity method is not applied but that, in substance, form part of the net investment in the associate or joint venture (long-term interests). This clarification is relevant because it implies that the expected credit loss model in KIFRS 1109 applies to such long-term interests.

The amendments also clarified that, in applying KIFRS 1109, an entity does not take account of any losses of the associate or joint venture, or any impairment losses on the net investment, recognized as adjustments to the net investment in the associate or joint venture that arise from applying KIFRS 1028 Investments in Associates and Joint Ventures.

Amendments to KIFRS 1103 : Business Combinations

The amendments clarify that, when an entity obtains control of a business that is a joint operation, it applies the requirements for a business combination achieved in stages, including remeasuring previously held interests in the assets and liabilities of the joint operation at fair value. In doing so, the acquirer remeasures its entire previously held interest in the joint operation.

An entity applies those amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2019 with early application permitted.

Amendments to KIFRS 1111 : Joint Arrangements

A party that participates in, but does not have joint control of, a joint operation might obtain joint control of the joint operation in which the activity of the joint operation constitutes a business as defined in KIFRS 1103. The amendments clarify that the previously held interests in that joint operation are not remeasured.

An entity applies those amendments to transactions in which it obtains joint control on or after the beginning of the first annual reporting period beginning on or after January 1, 2019 with early application permitted.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

2.

Basis of Preparation, Continued

 

(5)

Changes in accounting policies, continued

 

Amendments to KIFRS 1012 : Income Taxes

The amendments clarify that the income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity recognizes the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where it originally recognized those past transactions or events.

An entity applies the amendments for annual reporting periods beginning on or after January 1, 2019 with early application permitted. When the entity first applies those amendments, it applies them to the income tax consequences of dividends recognized on or after the beginning of the earliest comparative period.

Amendments to KIFRS 1023 : Borrowing Costs

The amendments clarify that an entity treats as part of general borrowings any borrowing originally made to develop a qualifying asset when substantially all of the activities necessary to prepare that asset for its intended use or sale are complete.

The entity applies the amendments to borrowing costs incurred on or after the beginning of the annual reporting period in which the entity first applies those amendments. An entity applies those amendments for annual reporting periods beginning on or after January 1, 2019 with early application permitted.

 

3.

Significant Accounting Policies

The significant accounting policies applied by the Group in preparation of its consolidated interim financial statements are consistent with those followed in the preparation of the Group’s consolidated financial statements as of and for the year ended December 31, 2018, except for the changes described in Note 2.(5).

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

4.

Segment, Geographic and Other Information

 

(1)

Segment determination and explanation of the measurements

The Group’s operating segments are its business components that generate discrete financial information that is reported to and regularly reviewed by the Group’s the chief operating decision maker, the Chief Executive Officer, for the purpose of resource allocation and assessment of segment performance. The Group’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 Group’s foreign operations.

Segment operating profit (loss) is determined the same way that consolidated operating profit is determined under KIFRS 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 ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

4.

Segment, Geographic and Other Information, Continued

 

(2)

Financial information of the segments for the three and six-month periods ended June 30, 2019 and 2018, respectively, are as follows:

 

In millions of won                                                                                                          

June 30, 2019

  
                                    Revenue                                                      Profit (loss) related  
            Total                 from                  Depreciation                             associates, joint  
            segment     Intersegment     external      Operating     and     Interest     Interest     ventures and  

Segment

           revenue     revenue     customers      Profit (loss)     amortization     income     expense     subsidiaries  
            Three -           Three -           Three -            Three -           Three -           Three -           Three -           Three -         
            month     Six-month     month     Six-month     month     Six-month      month     Six-month     month     Six-month     month     Six-month     month     Six-month     month      Six-month  
            period     period     period     period     period     period      period     period     period     period     period     period     period     period     period      period  
            ended     ended     ended     ended     ended     ended      ended     ended     ended     ended     ended     ended     ended     ended     ended      ended  

Transmission and distribution

    W        13,124,910       28,242,598       349,872       731,943       12,775,038       27,510,656        259,763       (2,151,618 )      920,147       1,803,721       17,026       36,117       195,859       381,867       7,031        152,100  

Electric power generation (Nuclear)

         2,036,486       4,593,449       2,056,634       4,590,868       (20,148 )      2,581        145,771       801,533       814,412       1,588,427       8,721       17,623       128,006       255,753       748        2,279  

Electric power generation (Non-nuclear)

         4,438,608       11,796,262       4,285,900       11,344,452       152,708       451,810        (801,897 )      301,023       976,666       1,941,134       6,220       11,560       165,046       331,323       6,456        43,081  

Plant maintenance & engineering service

         663,006       1,162,488       575,005       1,001,391       88,001       161,097        94,337       130,833       33,224       64,021       3,248       7,013       620       2,055       1,263        (574 ) 

Others

         247,785       468,139       172,410       274,905       75,375       193,234        18,556       49,890       18,029       39,171       35,254       66,623       31,557       61,039       —          —    

Consolidation adjustments

         (7,439,821 )      (17,943,558 )      (7,439,821 )      (17,943,559 )      —         —          (15,189 )      (60,200 )      (28,534 )      (46,457 )      (7,194 )      (14,357 )      (7,936 )      (15,508 )      —          —    
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  
   W        13,070,974       28,319,378       —         —         13,070,974       28,319,378        (298,659 )      (928,539 )      2,733,944       5,390,017       63,275       124,579       513,152       1,016,529       15,498        196,886  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  
In millions of won                                                                                                          

June 30, 2018

  
                                    Revenue                                                      Profit (loss) related  
            Total                 from                  Depreciation                             associates, joint  
            segment     Intersegment     external      Operating     and     Interest     Interest     ventures and  

Segment

           revenue     revenue     customers      Profit (loss)     amortization     income     expense     subsidiaries  
            Three -           Three -           Three -            Three -           Three -           Three -           Three -           Three -         
            month     Six-month     month     Six-month     month     Six-month      month     Six-month     month     Six-month     month     Six-month     month     Six-month     month      Six-month  
            period     period     period     period     period     period      period     period     period     period     period     period     period     period     period      period  
            ended     ended     ended     ended     ended     ended      ended     ended     ended     ended     ended     ended     ended     ended     ended      ended  

Transmission and distribution

    W        13,257,725       28,821,467       356,601       727,644       12,901,124       28,093,823        (698,162 )      (2,140,285 )      931,060       1,811,473       14,437       29,650       176,734       351,535       44,335        244,358  

Electric power generation (Nuclear)

         1,961,723       3,924,029       1,921,192       3,874,080       40,531       49,949        41,695       223,572       792,220       1,555,841       7,479       9,973       125,688       251,376       1,437        2,514  

Electric power generation (Non-nuclear)

         5,282,142       13,007,834       5,097,157       12,528,227       184,985       479,607        (158,274 )      1,071,356       810,040       1,624,628       8,708       14,519       142,062       282,671       23,698        23,628  

Plant maintenance & engineering service

         613,507       1,138,037       521,085       974,725       92,422       163,312        72,449       105,228       28,703       57,136       2,974       5,825       694       1,956       1,629        1,446  

Others

         215,150       475,234       97,054       218,722       118,096       256,512        18,634       55,360       14,246       27,448       23,261       62,320       28,411       54,423       —          —    

Consolidation adjustments

         (7,993,089 )      (18,323,398 )      (7,993,089 )      (18,323,398 )      —         —          36,540       (129,962 )      (13,909 )      (28,019 )      579       (14,171 )      (8,664 )      (14,653 )      —          —    
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  
   W        13,337,158       29,043,203       —         —         13,337,158       29,043,203        (687,118 )      (814,731 )      2,562,360       5,048,507       57,438       108,116       464,925       927,308       71,099        271,946  
     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

 

22

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(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, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won              

June 30, 2019

  

Segment

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

Transmission and distribution

    W        108,338,321        3,780,079        3,040,044        55,865,483  

Electric power generation (Nuclear)

         56,977,044        57,875        996,253        31,238,815  

Electric power generation (Non-nuclear)

         53,484,741        2,094,501        2,034,402        31,733,828  

Plant maintenance & engineering service

         3,299,177        47,991        34,081        1,109,421  

Others

         8,188,096        —          155,848        3,340,702  

Consolidation adjustments

         (37,596,616 )       —          (131,520 )       (388,722 ) 
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        192,690,763        5,980,446        6,129,108        122,899,527  
     

 

 

     

 

 

     

 

 

     

 

 

  
In millions of won              

December 31, 2018

  

Segment

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

Transmission and distribution

    W        107,486,379        3,671,897        6,323,504        53,404,610  

Electric power generation (Nuclear)

         55,792,704        43,038        2,187,077        30,484,104  

Electric power generation (Non-nuclear)

         49,296,392        2,114,203        3,435,222        27,558,156  

Plant maintenance & engineering service

         3,431,068        49,207        111,393        1,200,390  

Others

         7,816,885        —          382,978        3,165,286  

Consolidation adjustments

         (38,574,367 )       —          (62,717 )       (1,656,247 ) 
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        185,249,061        5,878,345        12,377,457        114,156,299  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

(4)

Geographic information

Electricity sales, the main operations of the Group, are conducted in the Republic of Korea where the controlling company is located. 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, 2019      June 30, 2018      June 30,
2019		      December 31,
2018		  

Geographical unit

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

Domestic

    W        12,702,461        27,591,897        12,827,478        27,958,871        163,686,863        157,037,428  

Overseas (*1)

         368,513        727,481        509,680        1,084,332        3,446,725        3,299,346  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W        13,070,974        28,319,378        13,337,158        29,043,203        167,133,588        160,336,774  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

(*1)

Middle East and other Asian countries make up the majority of overseas revenue and non-current assets. Since the overseas revenue or non-current assets attributable to particular countries are not material, they are not disclosed individually.

(*2)

Amounts exclude financial assets and deferred tax assets.

 

23

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

4.

Segment, Geographic and Other Information, Continued

 

(5)

Information on significant customers

There is no individual customer comprising more than 10% of the Group’s revenue for the six-month periods ended June 30, 2019 and 2018.

 

5.

Classification of Financial Instruments

 

(1)

Classification of financial assets as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019  
            Financial assets
at fair value
through profit or
loss		      Financial assets
at fair value
through other
comprehensive
income		      Financial assets
at amortized cost		      Derivative assets
(applying hedge
accounting)		      Total  

Current assets

                  

Cash and cash equivalents

    W        —          —          1,308,117        —          1,308,117  

Current financial assets

                  

Current financial assets at fair value through profit or loss

         1,522,187        —          —          —          1,522,187  

Current financial assets at amortized costs

         —          —          11,010        —          11,010  

Current derivative assets

         30,237        —          —          56,555        86,792  

Other financial assets

         —          —          2,126,966        —          2,126,966  

Trade and other receivables

         —          —          7,072,423        —          7,072,423  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
        1,552,424        —          10,518,516        56,555        12,127,495  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Non-current assets

                  

Non-current financial assets

                  

Non-current financial assets at fair value through profit or loss

         678,308        —          —          —          678,308  

Non-current financial assets at fair value through other comprehensive income

         —          403,816        —          —          403,816  

Non-current financial assets at amortized costs

         —          —          1,340        —          1,340  

Non-current derivative assets

         119,314        —          —          131,775        251,089  

Other financial assets

         —          —          1,015,365        —          1,015,365  

Trade and other receivables

         —          —          1,754,704        —          1,754,704  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
        797,622        403,816        2,771,409        131,775        4,104,622  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W        2,350,046        403,816        13,289,925        188,330        16,232,117  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

24

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

5.

Classification of Financial Instruments, Continued

 

(1)

Classification of financial assets as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

In millions of won           December 31, 2018  
            Financial assets
at fair value
through profit or
loss		      Financial assets
at fair value
through other
comprehensive
income		      Financial assets
at amortized cost		      Derivative assets
(applying hedge
accounting)		      Total  

Current assets

                  

Cash and cash equivalents

    W        —          —          1,358,345        —          1,358,345  

Current financial assets

                  

Current financial assets at fair value through profit or loss

         313,893        —          —          —          313,893  

Current financial assets at amortized costs

         —          —          11,956        —          11,956  

Current derivative assets

         13,936        —          —          28,171        42,107  

Other financial assets

         —          —          1,991,939        —          1,991,939  

Trade and other receivables

         —          —          7,793,592        —          7,793,592  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
        327,829        —          11,155,832        28,171        11,511,832  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Non-current assets

                  

Non-current financial assets

                  

Non-current financial assets at fair value through profit or loss

         607,042        —          —          —          607,042  

Non-current financial assets at fair value through other comprehensive income

         —          399,495        —          —          399,495  

Non-current financial assets at amortized costs

         —          —          2,086        —          2,086  

Non-current derivative assets

         23,695        —          —          36,533        60,228  

Other financial assets

         —          —          1,044,762        —          1,044,762  

Trade and other receivables

         —          —          1,819,845        —          1,819,845  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
        630,737        399,495        2,866,693        36,533        3,933,458  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W        958,566        399,495        14,022,525        64,704        15,445,290  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

25

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

5.

Classification of Financial Instruments, Continued

 

(2)

Classification of financial liabilities as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019  
            Financial liabilities at
fair value through
profit or loss		      Financial liabilities
recognized at
amortized cost		      Derivative liabilities
(applying hedge
accounting)		      Total  

Current liabilities

               

Borrowings

    W        —          2,027,795        —          2,027,795  

Debt securities

         —          8,195,854        —          8,195,854  

Derivative liabilities

         6,363        —          6,978        13,341  

Trade and other payables

         —          5,767,818        —          5,767,818  
     

 

 

     

 

 

     

 

 

     

 

 

  
        6,363        15,991,467        6,978        16,004,808  
     

 

 

     

 

 

     

 

 

     

 

 

  

Non-current liabilities

               

Borrowings

         —          3,479,909        —          3,479,909  

Debt securities

         —          51,818,400        —          51,818,400  

Derivative liabilities

         34,354        —          129,582        163,936  

Trade and other payables

         —          7,091,807        —          7,091,807  
     

 

 

     

 

 

     

 

 

     

 

 

  
        34,354        62,390,116        129,582        62,554,052  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        40,717        78,381,583        136,560        78,558,860  
     

 

 

     

 

 

     

 

 

     

 

 

  
In millions of won           December 31, 2018  
            Financial liabilities at
fair value through
profit or loss		      Financial liabilities
recognized at
amortized cost		      Derivative liabilities
(applying hedge
accounting)		      Total  

Current liabilities

               

Borrowings

    W        —          1,172,624        —          1,172,624  

Debt securities

         —          6,788,824        —          6,788,824  

Derivative liabilities

         13,706        —          6,725        20,431  

Trade and other payables

         —          6,405,395        —          6,405,395  
     

 

 

     

 

 

     

 

 

     

 

 

  
        13,706        14,366,843        6,725        14,387,274  
     

 

 

     

 

 

     

 

 

     

 

 

  

Non-current liabilities

               

Borrowings

         —          3,258,015        —          3,258,015  

Debt securities

         —          49,815,164        —          49,815,164  

Derivative liabilities

         85,304        —          206,428        291,732  

Trade and other payables

         —          2,941,696        —          2,941,696  
     

 

 

     

 

 

     

 

 

     

 

 

  
        85,304        56,014,875        206,428        56,306,607  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        99,010        70,381,718        213,153        70,693,881  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

26

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(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, 2019 and 2018 are as follows:

 

In millions of won                June 30, 2019      June 30, 2018  
                 Three-
month
period
ended		      Six-
month
period
ended		      Three-
month
period
ended		      Six-
month period
ended		  

Cash and cash equivalents

   

Interest income

    W        17,350        35,245        10,150        21,010  

Financial assets at fair value through profit or loss

   

Interest income

         2,569        3,255        145        290  
  

Gain (loss) on valuation of financial assets

         3,830        8,095        (3,138 )       1,600  
  

Gain (loss) on disposal of financial assets

         (89 )       703        672        672  

Financial assets at fair value through other comprehensive income

   

Dividends income

         2,427        3,740        3,704        11,811  

Financial assets at amortized cost

   

Interest income

         7        25        21        41  

Loans and receivables

   

Interest income

         13,364        26,038        11,112        16,796  

Trade and other receivables

   

Interest income

         22,004        41,032        18,799        43,070  

Short-term financial instruments

   

Interest income

         7,835        18,686        13,319        22,905  

Long-term financial instruments

   

Interest income

         —          1        3,892        4,004  

Other financial assets

   

Interest income

         146        297        —          —    

Financial liabilities carried at amortized cost

   

Interest expense of borrowings and debt securities

         352,919        699,869        327,418        649,794  
  

Interest expense of trade and other payables

         2,929        31,306        10,888        22,980  
  

Interest expense of others

         157,304        285,354        126,619        254,534  
  

Loss on foreign currency transactions and translations

         (196,769 )       (395,619 )       (385,302 )       (382,084 ) 

Derivative assets (trading)

   

Loss on valuation of derivatives

         78,944        160,854        129,884        73,158  
  

Loss on transaction of derivatives

         18,894        31,895        13,559        22,638  

Derivatives (applying hedge accounting)

   

Gain on valuation of derivatives (profit or loss)

         76,662        150,329        220,348        204,083  
  

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

         19,529        34,163        (27,411 )       (65,956 ) 
  

Gain (loss) on transaction of derivatives

         4,386        16,867        (1,011 )       844  

 

27

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

6.

Restricted Deposits

Restricted deposits as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won                June 30,
2019		      December 31,
2018		  

Cash and cash equivalents

   

Deposits for government project

    W        13,305        12,747  
  

Collateral provided for borrowings

         98,296        100,998  
  

Collateral provided for lawsuit

         3        3  
  

Deposits for transmission regional support program

         8,158        4,337  
  

Decommissioning costs of nuclear power plants

         —          604  

Short-term financial instruments

   

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

         89,000        34,000  

Current financial assets at fair value through profit or loss

   

Decommissioning costs of nuclear power plants

         —          29,451  

Non-current financial assets at fair value through profit or loss

   

Decommissioning costs of nuclear power plants

         614,066        498,555  

Long-term financial instruments

   

Escrow

         92        69  
  

Guarantee deposits for banking accounts at oversea branches

         326        315  
  

Borrowings Collateral

         11,745        —    
  

Decommissioning costs of nuclear power plants

         181,412        245,896  
  

Funds for developing small and medium enterprises (*)

         200,000        200,000  
        

 

 

     

 

 

  
      W        1,216,403        1,126,975  
        

 

 

     

 

 

  

 

(*)

Deposits for small and medium enterprise at IBK and others for construction of Bitgaram Energy Valley and support for high potential businesses as of June 30, 2019 and December 31, 2018.

 

7.

Cash and Cash Equivalents

Cash and cash equivalents as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019      December 31, 2018  

Cash

    W        102        138  

Other demand deposits

         979,758        927,650  

Short-term deposits classified as cash equivalents

         207,332        211,424  

Short-term investments classified as cash equivalents

         120,925        219,133  
     

 

 

     

 

 

  
   W        1,308,117        1,358,345  
     

 

 

     

 

 

  

 

28

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

8.

Trade and Other Receivables

 

(1)

Trade and other receivables as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019  
            Gross
amount		      Allowance for doubtful
accounts		      Present value
discount		      Book value  

Current assets

               

Trade receivables

    W        6,488,224        (250,123 )       —          6,238,101  

Other receivables

         850,669        (14,037 )       (2,310 )       834,322  
     

 

 

     

 

 

     

 

 

     

 

 

  
        7,338,893        (264,160 )       (2,310 )       7,072,423  
     

 

 

     

 

 

     

 

 

     

 

 

  

Non-current assets

               

Trade receivables

         381,656        (108 )       (396 )       381,152  

Other receivables

         1,466,100        (87,038 )       (5,510 )       1,373,552  
        1,847,756        (87,146 )       (5,906 )       1,754,704  
   W        9,186,649        (351,306 )       (8,216 )       8,827,127  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

In millions of won           December 31, 2018  
            Gross
amount		      Allowance for doubtful
accounts		      Present value
discount		      Book value  

Current assets

               

Trade receivables

    W        7,303,065        (215,775 )       —        7,087,290  

Other receivables

         728,560        (20,231 )       (2,027 )       706,302  
     

 

 

     

 

 

     

 

 

     

 

 

  
        8,031,625        (236,006 )       (2,027 )       7,793,592  
     

 

 

     

 

 

     

 

 

     

 

 

  

Non-current assets

               

Trade receivables

         415,318        (93 )       (448 )       414,777  

Other receivables

         1,496,464        (84,495 )       (6,901 )       1,405,068  
     

 

 

     

 

 

     

 

 

     

 

 

  
        1,911,782        (84,588 )       (7,349 )       1,819,845  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        9,943,407        (320,594 )       (9,376 )       9,613,437  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

29

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

8.

Trade and Other Receivables, Continued

 

(2)

Other receivables as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019  
            Gross
amount		      Allowance for
doubtful accounts		      Present value
discount		      Book
value		  

Current assets

               

Non-trade receivables

    W        381,584        (13,599 )       —          367,985  

Accrued income

         99,017        —          —          99,017  

Deposits

         263,709        —          (2,310 )       261,399  

Finance lease receivables

         92,484        (438 )       —          92,046  

Others

         13,875        —          —          13,875  
     

 

 

     

 

 

     

 

 

     

 

 

  
        850,669        (14,037 )       (2,310 )       834,322  
     

 

 

     

 

 

     

 

 

     

 

 

  

Non-current assets

               

Non-trade receivables

         132,280        (78,801 )       —          53,479  

Accrued income

         91        —          —          91  

Deposits

         337,204        —          (5,510 )       331,694  

Finance lease receivables

         905,999        (859 )       —          905,140  

Others

         90,526        (7,378 )       —          83,148  
     

 

 

     

 

 

     

 

 

     

 

 

  
        1,466,100        (87,038 )       (5,510 )       1,373,552  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        2,316,769        (101,075 )       (7,820 )       2,207,874  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

In millions of won           December 31, 2018  
            Gross
amount		      Allowance for
doubtful accounts		      Present value
discount		      Book
value		  

Current assets

               

Non-trade receivables

    W        298,587        (19,940 )       —          278,647  

Accrued income

         102,023        —          —          102,023  

Deposits

         228,466        —          (2,027 )       226,439  

Finance lease receivables

         84,688        (291 )       —          84,397  

Others

         14,796        —          —          14,796  
     

 

 

     

 

 

     

 

 

     

 

 

  
        728,560        (20,231 )       (2,027 )       706,302  
     

 

 

     

 

 

     

 

 

     

 

 

  

Non-current assets

               

Non-trade receivables

         136,432        (77,475 )       —          58,957  

Deposits

         376,211        —          (6,901 )       369,310  

Finance lease receivables

         898,658        (842 )       —          897,816  

Others

         85,163        (6,178 )       —          78,985  
     

 

 

     

 

 

     

 

 

     

 

 

  
        1,496,464        (84,495 )       (6,901 )       1,405,068  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        2,225,024        (104,726 )       (8,928 )       2,111,370  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

(3)

Trade and other receivables are classified as financial assets at amortized cost and are measured using the effective interest rate 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 Group imposes a monthly interest rate of 1.5% on the overdue trade receivables. The Group holds deposits of three months’ expected electricity usage for customers requesting temporary usage and customers with delinquent payments.

 

30

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

8.

Trade and Other Receivables, Continued

 

(4)

Aging analysis of trade receivables as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019      December 31, 2018  

Trade receivables: (not overdue)

    W        6,561,643        7,419,648  
     

 

 

     

 

 

  

Trade receivables: (overdue, not impaired)

         —          —    
     

 

 

     

 

 

  

Less than 60 days

         —          —    
     

 

 

     

 

 

  

Trade receivables: (impairment reviewed)

         308,237        298,735  
     

 

 

     

 

 

  

Less than 60 days

         7,738        2,525  

60 ~ 90 days

         34,551        37,266  

90 ~ 120 days

         12,851        16,033  

120 days ~ 1 year

         68,255        46,204  

Over 1 year

         184,842        196,707  
     

 

 

     

 

 

  
        6,869,880        7,718,383  

Less: allowance for doubtful accounts

         (250,231 )       (215,868 ) 

Less: present value discount

         (396 )       (448 ) 
     

 

 

     

 

 

  
   W        6,619,253        7,502,067  
     

 

 

     

 

 

  

At the end of each reporting period, the Group assesses whether the credit to trade receivables is impaired. The Group recognizes loss allowances for trade receivables individually when there is any objective evidence that trade receivables are impaired and significant, and classifies the trade receivables that are not individually assessed as the trade receivables subject to be assessed on a collective basis. Also, the Group recognizes loss allowances based on an ‘expected credit loss’ (ECL) model.

 

(5)

Changes in the allowance for doubtful accounts for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won           June 30, 2019     December 31, 2018  
            Trade receivables     Other receivables     Trade receivables     Other receivables  

Beginning balance

    W        215,868       104,726       173,583       78,008  

Effect of change in accounting policy

         —         —         6,641       128  

Loss allowance after adjusted under KIFRS 1109

         215,868       104,726       180,224       78,136  

Bad debt expense

         15,745       5,629       41,498       17,817  

Write-off, etc.

         (3,721 )      342       (7,696 )      (244 ) 

Reversal

         (21 )      (958 )      (1,726 )      (143 ) 

Others

         22,360       (8,664 )      3,568       9,160  
     

 

 

    

 

 

    

 

 

    

 

 

  

Ending balance

    W        250,231       101,075       215,868       104,726  
     

 

 

    

 

 

    

 

 

    

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

9.

Financial assets at fair value through profit or loss

Financial assets at fair value through profit or loss as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019      December 31, 2018  
            Current      Non-current      Current      Non-current  

Financial assets at fair value through profit or loss

               

Listed

    W        23,050        308,692        100        320,148  

Unlisted

         —          5,143        —          5,052  

Other

         1,499,137        135,690        313,793        83,586  
     

 

 

     

 

 

     

 

 

     

 

 

  
        1,522,187        449,525        313,893        408,786  
     

 

 

     

 

 

     

 

 

     

 

 

  

Financial assets designated as at fair value through profit or loss

               

Debt with embedded derivatives

         —          181,281        —          187,483  

Other

         —          47,502        —          10,773  
     

 

 

     

 

 

     

 

 

     

 

 

  
        —          228,783        —          198,256  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        1,522,187        678,308        313,893        607,042  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

10.

Financial assets at fair value through other comprehensive income

 

(1)

Changes in financial assets at fair value through other comprehensive income for the six-month period ended June 30, 2019 and the year ended December 31, 2018 are as follows:

 

In millions of won           June 30, 2019  
            Beginning
balance		      Acquisition      Disposal     Valuation     Impairment      Others      Ending
balance		  

Listed

    W        210,056        —          —         643       —          3,499        214,198  

Unlisted

         189,439        —          (916 )      (47 )      —          1,142        189,618  
     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  
        399,495        —          (916 )      596       —          4,641        403,816  
     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

Current financial assets at fair value through other comprehensive income

    W        —          —          —         —         —          —          —    

Non-current financial assets at fair value through other comprehensive income

         399,495        —          (916 )      596       —          4,641        403,816  

 

In millions of won           December 31, 2018  
            Beginning
balance		      Effect of
change in
accounting
policy		      Acquisition      Disposal     Valuation     Impairment      Others     Ending
balance		  

Listed

    W        —          274,453        —          (1 )      (63,007 )      —          (1,389 )      210,056  

Unlisted

         —          197,450        —          —         (12,070 )      —          4,059       189,439  
     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  
        —          471,903        —          (1 )      (75,077 )      —          2,670       399,495  
     

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

     

 

 

    

 

 

  

Current financial assets at fair value through other comprehensive income

    W        —          —          —          —         —         —          —         —    

Non-current financial assets at fair value through other comprehensive income

         —          471,903        —          (1 )      (75,077 )      —          2,670       399,495  

 

32

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

10.

Financial assets at fair value through other comprehensive income, Continued

 

(2)

Financial assets at fair value through other comprehensive income as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    June 30, 2019  
     Shares      Ownership            Acquisition cost      Book value      Fair value  

Listed

                 

Korea District Heating Corp.

      2,264,068        19.55 %    W        173,201        117,958        117,958  

Ssangyong Motor Co., Ltd.

      38,568        0.03 %         428        156        156  

Korea Line Corp.

      18        0.00 %         1        —          —    

Namkwang Engineering & Construction Co., Ltd.

      121        0.00 %         15        1        1  

Bumyang Construction Co., Ltd.

      35        0.00 %         2        —          —    

ELCOMTEC Co., Ltd.

      32,875        0.04 %         217        56        56  

PAN ocean Co., Ltd.

      1,492        0.00 %         14        7        7  

Dongbu Corporation

      955        0.02 %         12        10        10  

KSP Co., Ltd.

      22,539        0.08 %         24        48        48  

STX Heavy Industries Co., Ltd.

      5,057        0.13 %         191        34        34  

Codes Combine Co., Ltd.

      291        0.00 %         1        1        1  

PT Adaro Energy Tbk

      480,000,000        1.50 %         71,554        53,399        53,399  

Energy Fuels Inc.

      1,711,814        1.91 %         16,819        6,153        6,153  

Baralaba Coal Company Limited

      99,763        0.07 %         18,445        —          —    

Denison Mines Corp.

      58,284,000        10.42 %         84,134        36,029        36,029  

Fission 3.0

      75,000        0.14 %         —          7        7  

Fission Uranium Corp.

      800,000        0.16 %         785        339        339  
          

 

 

     

 

 

     

 

 

  
             365,843        214,198        214,198  
          

 

 

     

 

 

     

 

 

  

Unlisted (*1)

                 

Intellectual Discovery Co., Ltd.

      1,000,000        8.81 %         5,000        954        954  

Smart Power Co.,Ltd.

      133,333        4.35 %         200        200        200  

Navanakorn Electric Co., Ltd. (*2)

      4,442,800        26.93 %         17,216        17,718        17,718  

PT. Kedap Sayaaq

      671        10.00 %         18,540        —          —    

Set Holding (*3)

      1,100,220        2.50 %         229,255        161,983        161,983  

PT. Cirebon Energi Prasarana

      22,420        10.00 %         2,612        2,594        2,594  

KODE NOVUS I LLC

      —          10.00 %         —          —          —    

Others (*4)

              9,624        6,169        6,169  
          

 

 

     

 

 

     

 

 

  
             282,447        189,618        189,618  
          

 

 

     

 

 

     

 

 

  
        W        648,290        403,816        403,816  
          

 

 

     

 

 

     

 

 

  

 

(*1)

The Group used initial cost as their fair value because there was not enough information to determine fair value, and the range of the estimated fair value is wide.

 

(*2)

Although the Group holds more than 20% of the equity shares of these investments, the Group cannot exercise significant influence.

 

(*3)

The Group 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 financial assets at FVOCI in other comprehensive income or loss for the six-month period ended June 30, 2019.

 

(*4)

Equity securities acquired through debt-for-equity swaps of electricity rate bonds, etc. It consists of 199 companies including Borneo Co., Ltd..

 

33

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

10.

Financial assets at fair value through other comprehensive income, Continued

 

(2)

Financial assets at fair value through other comprehensive income as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

In millions of won    December 31, 2018  
     Shares      Ownership            Acquisition cost      Book value      Fair value  

Listed

                 

Korea District Heating Corp.

      2,264,068        19.55 %    W        173,201        129,051        129,051  

Ssangyong Motor Co., Ltd.

      38,568        0.03 %         428        153        153  

Korea Line Corp.

      18        0.00 %         1        —          —    

Namkwang Engineering & Construction Co., Ltd.

      121        0.00 %         15        1        1  

Bumyang Construction Co., Ltd.

      35        0.00 %         2        —          —    

ELCOMTEC Co., Ltd.

      32,875        0.04 %         217        61        61  

PAN ocean Co., Ltd.

      1,492        0.00 %         14        7        7  

Dongbu Corporation

      955        0.02 %         12        7        7  

KSP Co., Ltd.

      22,539        0.08 %         24        32        32  

STX Heavy Industries Co., Ltd.

      5,057        0.13 %         191        29        29  

Codes Combine Co., Ltd.

      291        0.00 %         1        1        1  

PT Adaro Energy Tbk

      480,000,000        1.50 %         71,554        44,790        44,790  

Energy Fuels Inc.

      1,711,814        1.91 %         16,819        5,435        5,435  

Baralaba Coal Company Limited

      99,763        0.07 %         18,445        —          —    

Denison Mines Corp.

      58,284,000        10.42 %         84,134        30,122        30,122  

Fission 3.0 (*6)

      75,000        0.14 %         —          13        13  

Fission Uranium Corp.

      800,000        0.16 %         785        354        354  
          

 

 

     

 

 

     

 

 

  
             365,843        210,056        210,056  
          

 

 

     

 

 

     

 

 

  

Unlisted (*1)

                 

Intellectual Discovery Co., Ltd.

      1,000,000        8.81 %         5,000        954        954  

Smart Power Co.,Ltd.

      133,333        4.35 %         200        200        200  

DS POWER Co., Ltd.

      580,000        2.34 %         2,900        916        916  

Navanakorn Electric Co., Ltd. (*2)

      4,442,800        26.93 %         17,216        17,126        17,126  

PT. Kedap Sayaaq

      671        10.00 %         18,540        —          —    

Set Holding (*3)

      1,100,220        2.50 %         229,255        161,983        161,983  

PT. Cirebon Energi Prasarana

      22,420        10.00 %         2,612        2,507        2,507  

KODE NOVUS I LLC (*4)

      —          10.00 %         —          —          —    

Others (*5)

              8,947        5,753        5,753  
          

 

 

     

 

 

     

 

 

  
             284,670        189,439        189,439  
          

 

 

     

 

 

     

 

 

  
        W        650,513        399,495        399,495  
          

 

 

     

 

 

     

 

 

  

 

(*1)

The Group used initial cost as their fair value because there was not enough information to determine fair value, and the range of the estimated fair value is wide.

(*2)

Although the Group holds more than 20% of the equity shares of these investments, the Group cannot exercise significant influence.

(*3)

The Group 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 financial assets at FVOCI in other comprehensive income or loss during the year ended December 31, 2018.

(*4)

This is reclassified to financial assets at FVOCI due to loss of significant influence of the Group during the year ended December 31, 2018.

(*5)

Equity securities acquired through debt-for-equity swaps of electricity rate bonds, etc. It consists of 180 companies including Borneo Co., Ltd..

 

34

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

11.

Financial assets at amortized cost

Financial assets at amortized cost as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019  
            Financial assets
at amortized cost		      Government
grants		      Allowance for
doubtful accounts		      Others      Book
value		  

Government bonds

    W        1,350        —          —          —          1,350  

Financial bonds

         11,000        —          —          —          11,000  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W        12,350        —          —          —          12,350  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Current

    W        11,010        —          —          —          11,010  

Non-current

         1,340        —          —          —          1,340  
In millions of won           December 31, 2018  
            Financial assets
at amortized cost		      Government
grants		      Allowance for
doubtful accounts		      Others      Book
value		  

Government bonds

    W        3,042        —          —          —          3,042  

Financial bonds

         11,000        —          —          —          11,000  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W        14,042        —          —          —          14,042  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

Current

    W        11,956        —          —          —          11,956  

Non-current

         2,086        —          —          —          2,086  

12.    Derivatives

 

(1)

Derivatives as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019      December 31, 2018  
            Current      Non-current      Current      Non-current  

Derivative assets

               

Currency forward

    W        1,825        39,191        2,128        12,606  

Currency swap

         84,967        208,635        39,979        43,436  

Interest rate swap

         —          3,263        —          2,342  

Others (*1)

         —          —          —          1,844  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        86,792        251,089        42,107        60,228  
     

 

 

     

 

 

     

 

 

     

 

 

  

Derivative liabilities

               

Currency forward

    W        4,209        —          1,956        —    

Currency swap

         —          105,571        14,881        233,690  

Interest rate swap

         6,978        58,365        1,439        58,042  

Others (*2)

         2,154        —          2,155        —    
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        13,341        163,936        20,431        291,732  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

(*1)

The Group had a put option to sell shares of DS POWER Co., Ltd. and the fair value of the option is recorded in ‘Others’ in prior year. The Group sold their shares during the six-month period ended June 30, 2019.

(*2)

The Group has an obligation to settle the convertible preferred stock to financial investors pursuant to the settlement contract with Samcheok Eco Materials Co., Ltd. and the fair value of the obligation is recorded in ‘Others’.

 

35

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(2)    Currency forward contracts which are not designated as hedging instruments as of June 30, 2019 are as follows:

In millions of won and thousands of foreign currencies except contract exchange rate information

Counterparty

   Contract
date		     Maturity
date		           Contract amounts         Contract
exchange
rate
(in won)		  
        Pay    

Receive

      

KEB Hana Bank

     2014.04.10       2021.07.12     W       55,120     USD 52,000   W       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  

KEB Hana Bank

     2017.12.22       2021.07.12         105,079     USD 100,000       1,050.79  

Korea Development Bank

     2017.12.27       2021.07.12         104,849     USD 100,000       1,048.49  

Shinhan Bank

     2019.06.17       2019.07.08         16,592     EUR 12,456       1,332.03  

KEB Hana Bank

     2019.05.30       2019.07.02         5,945     USD 5,000       1,188.90  

Kookmin Bank

     2019.06.03       2019.07.08         5,892     USD 5,000       1,178.30  

Nonghyup Bank

     2019.06.11       2019.07.16         5,892     USD 5,000       1,178.40  

KEB Hana Bank

     2019.06.13       2019.07.18         5,917     USD 5,000       1,183.46  

Mizuho Bank

     2019.06.13       2019.07.18         5,918     USD 5,000       1,183.50  

Woori Bank

     2019.06.13       2019.07.18         5,905     USD 5,000       1,180.90  

KEB Hana Bank

     2019.06.14       2019.07.19         9,462     USD 8,000       1,182.80  

KEB Hana Bank

     2019.06.19       2019.07.24         5,909     USD 5,000       1,181.87  

Nonghyup Bank

     2019.06.19       2019.07.24         5,879     USD 5,000       1,175.80  

Morgan Stanley

     2019.06.19       2019.07.24         5,872     USD 5,000       1,174.35  

CCB

     2019.06.20       2019.07.25         5,819     USD 5,000       1,163.85  

KEB Hana Bank

     2019.06.24       2019.07.29         9,246     USD 8,000       1,155.80  

Credit Agricole

     2019.06.26       2019.07.30         11,530     USD 10,000       1,153.00  

KEB Hana Bank

     2019.06.26       2019.07.31         5,783     USD 5,000       1,156.50  

Standard Chartered

     2019.06.26       2019.07.31         5,784     USD 5,000       1,156.70  

Shinhan Bank

     2019.06.27       2019.08.01         11,559     USD 10,000       1,155.90  

Woori Bank

     2019.06.11       2019.07.08         4,724     USD 4,000       1,180.90  

Mizuho Bank

     2019.06.11       2019.07.08         8,266     USD 7,000       1,180.85  

Nova Scotia

     2019.06.13       2019.07.08         4,727     USD 4,000       1,181.75  

KEB Hana Bank

     2019.06.17       2019.07.12         14,226     USD 12,000       1,185.50  

Societe Generale

     2019.06.19       2019.07.08         3,530     USD 3,000       1,176.54  

BNP Paribas

     2019.06.21       2019.07.12         4,065     USD 3,500       1,161.45  

Societe Generale

     2019.06.21       2019.07.12         8,705     USD 7,500       1,160.70  

MUFG

     2019.06.25       2019.07.23         9,230     USD 8,000       1,153.77  

Nova Scotia

     2019.06.25       2019.07.23         10,961     USD 9,500       1,153.83  

Societe Generale

     2019.06.26       2019.07.23         7,523     USD 6,500       1,157.40  

Korea Development Bank

     2019.06.27       2019.07.23         6,359     USD 5,500       1,156.20  

BNP Paribas

     2019.06.28       2019.07.26         12,714     USD 11,000       1,155.80  

Mizuho Bank

     2019.06.03       2019.07.05         5,918     USD 5,000       1,183.65  

Mizuho Bank

     2019.06.20       2019.07.05         5,848     USD 5,000       1,169.50  

Societe Generale

     2019.06.20       2019.07.05         5,810     USD 5,000       1,162.00  

Credit Agricole

     2019.06.20       2019.07.05         2,567     USD 2,196       1,169.00  

Credit Agricole

     2019.06.28       2019.07.19         5,779     USD 5,000       1,155.85  

Nova Scotia

     2019.06.20       2019.07.05         5,847     USD 5,000       1,169.30  

Nova Scotia

     2019.06.28       2019.07.19         5,780     USD 5,000       1,156.05  

BNP Paribas

     2019.06.20       2019.07.05         5,847     USD 5,000       1,169.40  

Nonghyup Bank

     2019.06.24       2019.07.19         11,551     USD 10,000       1,155.10  

MUFG

     2019.06.28       2019.07.19         5,779     USD 5,000       1,155.70  

Nonghyup Bank

     2019.06.12       2019.07.08         3,537     USD 3,000       1,179.00  

KEB Hana Bank

     2019.06.13       2019.07.08         9,456     USD 8,000       1,181.95  

 

36

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(2)

Currency forward contracts which are not designated as hedging instruments as of June 30, 2019 are as follows, continued:

 

In millions of won and thousands of foreign currencies except contract exchange rate information

                          Contract amounts           Contract
exchange
rate
(in won)		  

Counterparty

    Contract
date		      Maturity
date		             Pay     

Receive

       

Mizuho Bank

      2019.06.14        2019.07.08        W        3,550      USD 3,000      W        1,183.29  

Busan Bank

      2019.06.18        2019.07.23           7,096      USD 6,000         1,182.60  

Nonghyup Bank

      2019.06.18        2019.07.23           7,096      USD 6,000         1,182.60  

Nova Scotia

      2019.06.27        2019.07.26           5,784      USD 5,000         1,156.85  

Kookmin Bank

      2019.06.28        2019.07.26           21,942      USD 19,000         1,154.86  

Woori Bank

      2019.05.15        2019.08.16           2,506      USD 2,110         1,187.65  

Standard Chartered

      2019.05.30        2019.09.03           5,573      USD 4,700         1,185.80  

BNP Paribas

      2019.06.03        2019.07.05           1,894      USD 1,600         1,183.80  

Nova Scotia

      2019.06.11        2019.09.16           11,789      USD 10,000         1,178.90  

Credit Agricole

      2019.06.11        2019.07.12           5,892      USD 5,000         1,178.45  

Shinhan Bank

      2019.06.12        2019.07.12           5,895      USD 5,000         1,178.90  

Shinhan Bank

      2019.06.13        2019.07.15           118      USD 100         1,182.10  

Nova Scotia

      2019.06.17        2019.07.19           5,335      USD 4,500         1,185.65  

Nova Scotia

      2019.06.18        2019.07.22           4,728      USD 4,000         1,182.10  

Societe Generale

      2019.06.27        2019.08.01           4,050      USD 3,500         1,157.10  

 

37

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(3)

Currency swap contracts which are not designated as hedging instruments as of June 30, 2019 are as follows:

In millions of won and thousands of foreign currencies except contract exchange rate information

Counterparty

    Contract year             Contract amount    Contract interest rate            Contract
exchange
rate
(in won)		  
          Pay     

Receive

    Pay     Receive        

Standard Chartered

      2014~2029      W        102,470      USD 100,000      3.14 %      3.57 %    W        1,024.70  

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  

Woori Bank

      2019~2027           21,708      USD 19,417      5.04 %      6.75 %         1,118.00  

Woori Bank

      2019~2024           296,000      USD 250,000      1.21 %      2.50 %         1,184.00  

Korea Development Bank

      2019~2024           177,600      USD 150,000      1.24 %      2.50 %         1,184.00  

KEB Hana Bank

      2019~2024           118,400      USD 100,000      1.24 %      2.50 %         1,184.00  

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  

Shinhan Bank

      2016~2022           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  

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  

Korea Development Bank

      2016~2019           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  

Woori Bank

      2017~2027           111,610      USD 100,000      2.25 %      3.13 %         1,116.10  

Korea Development Bank

      2017~2027           111,610      USD 100,000      2.31 %      3.13 %         1,116.10  

KEB Hana Bank

      2017~2027           111,610      USD 100,000      2.31 %      3.13 %         1,116.10  

Korea Development Bank

      2018~2028           108,600      HKD 800,000      2.69 %      3.35 %         135.75  

Shinhan Bank

      2018~2028           115,387      HKD 850,000      2.66 %      3.35 %         135.75  

Korea Development Bank

      2018~2023           170,280      USD 150,000      2.15 %      3.75 %         1,135.20  

Woori Bank

      2018~2023           170,280      USD 150,000      2.18 %      3.75 %         1,135.20  

KEB Hana Bank

      2018~2023           113,520      USD 100,000      2.17 %      3.75 %         1,135.20  

Shinhan Bank

      2018~2023           227,040      USD 200,000      2.17 %      3.75 %         1,135.20  

 

38

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(4)

Currency swap contracts which are designated as hedging instruments as of June 30, 2019 are as follows:

 

In millions of won and thousands of foreign currencies except contract exchange rate information

 

Counterparty

    Contract year             Contract amount      Contract interest rate          Contract
exchange rate
(in won, USD)		  
          Pay      Receive      Pay   Receive      

HSBC

      2014~2020      W        99,901        AUD 100,000      3.52%   5.75%   W        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%        USD 0.94  

Standard Chartered

      2014~2020           126,032        USD 117,250      3.55%   3M Libor +1.25%        1,074.90  

Korea Development Bank

      2017~2020           114,580        USD 100,000      1.75%   2.38%        1,145.80  

KEB Hana Bank

      2017~2020           114,580        USD 100,000      1.75%   2.38%        1,145.80  

Export-import bank of Korea

      2017~2020           114,580        USD 100,000      1.75%   2.38%        1,145.80  

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      3M Libor+ 2.10%   2.50%        1,210.00  

BNP Paribas

      2016~2021           121,000        USD 100,000      3M Libor+ 2.10%   2.50%        1,210.00  

Nomura

      2017~2037           52,457        EUR 40,000      2.60%   1.70%        1,311.42  

Nomura

      2017~2037           59,423        SEK 450,000      2.62%   2.36%        132.05  

Korea Development Bank

      2019~2022           112,650        USD 100,000      1.80%   3.38%        1,126.50  

Kookmin Bank

      2019~2022           112,650        USD 100,000      1.80%   3.38%        1,126.50  

Woori Bank

      2019~2022           112,650        USD 100,000      1.80%   3.38%        1,126.50  

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  

Morgan Stanley

      2014~2019           104,490        USD 100,000      2.70%   2.63%        1,044.90  

Korea Development Bank

      2018~2023           320,880        USD 300,000      2.03%   3.75%        1,069.60  

BNP Paribas

      2019~2024           111,841        CHF 100,000      1.78%   0.13%        1,118.41  

Kookmin Bank

      2019~2024           111,841        CHF 100,000      1.78%   0.13%        1,118.41  

KEB Hana Bank

      2018~2021           212,960        USD 200,000      2.10%   3.00%        1,064.80  

Korea Development Bank

      2018~2021           212,960        USD 200,000      2.10%   3.00%        1,064.80  

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  

BNP Paribas

      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  

KEB Hana Bank

      2017~2022           226,600        USD 200,000      1.94%   2.63%        1,133.00  

Korea Development Bank

      2017~2022           113,300        USD 100,000      1.94%   2.63%        1,133.00  

Nomura

      2017~2022           113,300        USD 100,000      1.95%   2.63%        1,133.00  

Woori Bank

      2017~2022           56,650        USD 50,000      1.95%   2.63%        1,133.00  

Kookmin Bank

      2017~2022           56,650        USD 50,000      1.95%   2.63%        1,133.00  

Korea Development Bank

      2018~2023           169,335        USD 150,000      2.26%   3.88%        1,128.90  

Woori Bank

      2018~2023           169,335        USD 150,000      2.26%   3.88%        1,128.90  

Credit Agricole

      2018~2023           112,890        USD 100,000      2.26%   3.88%        1,128.90  

KEB Hana Bank

      2018~2023           56,445        USD 50,000      2.26%   3.88%        1,128.90  

Kookmin Bank

      2018~2023           56,445        USD 50,000      2.26%   3.88%        1,128.90  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(5)

Interest rate swap contracts which are not designated as hedging instruments as of June 30, 2019 are as follows:

 

In millions of won and thousands of USD

Counterparty

    Contract year             Contract
amount		      Contract interest rate per annum
          Pay   Receive

KEB Hana Bank

      2017~2022        W        100,000      2.01%   3M CD + 0.24%

KEB Hana Bank

      2017~2022           100,000      2.06%   3M CD + 0.27%

Nomura (*1)

      2017~2037           30,000      2.05%   3.08%

KEB Hana Bank

      2017~2021           200,000      2.45%   3M CD + 0.32%

Nomura (*2)

      2018~2038           30,000      2.56%   3.75%

KEB Hana Bank

      2018~2023           200,000      2.15%   3M CD + 0.19%

KEB Hana Bank

      2018~2023           200,000      2.17%   3M CD + 0.19%

KEB Hana Bank

      2018~2023           150,000      2.03%   3M CD + 0.21%

KEB Hana Bank

      2019~2024           200,000      1.87%   3M CD + 0.13%

Societe Generale

      2017~2022           200,000      3M Libor+ 3.44%   3.77%

Nomura

      2017~2027           52,457      3M Libor + 2.25%   2.60%

Nomura

      2017~2027           59,423      3M Libor + 2.27%   2.62%

Export-import bank of Korea

      2015~2031           USD 15,893      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

 

(*1)

2.05% of the contract paying interest rate is applied for five years from the date of issuance, and 3M CD + 0.10% is applied thereafter.

(*2)

2.56% of the contract paying interest rate is applied for five years from the date of issuance, and 3M CD + 0.10% is applied thereafter.

 

(6)

Interest rate swap contracts which are designated as hedging instruments as of June 30, 2019 are as follows:

 

In millions of won and thousands of USD

Counterparty

    Contract year      Contract
amount		      Contract interest rate per annum
   Pay   Receive

BNP Paribas

      2009~2027        USD 92,120      4.16%   6M USD Libor

KFW

      2009~2027        USD 92,120      4.16%   6M USD Libor

Credit Agricole

      2018~2033        USD 90,875      3.98%~4.10%   6M USD Libor

SMBC

      2018~2033        USD 118,837      4.05%~4.18%   6M USD Libor

Export-import bank of Korea

      2016~2036        USD 2,564      3.00%   4.99%

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(7)

Gains and losses on valuation and transaction of derivatives for the three and six-month periods ended June 30, 2019 and 2018 are as follows and included in finance income and expenses in the consolidated statements of comprehensive income (loss):

 

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, 2019     June 30, 2018      June 30, 2019     June 30, 2018      June 30, 2019     June 30, 2018  
            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

    W        7,484       22,533       101,219       89,979        5,145       10,242       11,549        17,079        —         —         (1,721 )      1,606  

Currency swap

         162,335       309,763       250,718       184,338        18,291       38,911       225        5,950        21,935       43,527       (29,869 )      (68,374 ) 

Interest rate swap

         (14,213 )      (21,113 )      (1,706 )      2,924        (156 )      (391 )      774        453        (2,406 )      (9,364 )      4,179       812  
     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  
   W        155,606       311,183       350,231       277,241        23,280       48,762       12,548        23,482        19,529       34,163       (27,411 )      (65,956 ) 
     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

(*)

For the six-month period ended June 30, 2019, the net gain on valuation of derivatives applying cash flow hedge accounting of W14,556 million, net of tax, is included in other comprehensive income or loss.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

13.

Other Financial Assets

 

(1)

Other financial assets as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019      December 31, 2018  
            Current      Non-current      Current      Non-current  

Loans and receivables

    W        113,910        657,040        123,657        639,673  

Allowance for doubtful accounts

         (80 )       (4,937 )       (12 )       (4,940 ) 

Present value discount

         (891 )       (37,098 )       (992 )       (38,712 ) 

Long-term/short-term financial instruments

         2,014,027        400,360        1,869,286        448,741  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        2,126,966        1,015,365        1,991,939        1,044,762  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

(2)

Loans and receivables as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019  
            Face value      Allowance for
doubtful accounts		      Present value
discount		      Book value  

Short-term loans and receivables

               

Loans for tuition

    W        35,398        —          (891 )       34,507  

Loans for housing

         16,631        —          —          16,631  

Fisheries loan

         320        —          —          320  

Other loans

         61,561        (80 )       —          61,481  
     

 

 

     

 

 

     

 

 

     

 

 

  
        113,910        (80 )       (891 )       112,939  
     

 

 

     

 

 

     

 

 

     

 

 

  

Long-term loans and receivables

               

Loans for tuition

         416,297        —          (37,073 )       379,224  

Loans for housing

         185,024        —          —          185,024  

Loans for related parties

         49,049        (4,930 )       —          44,119  

Fisheries loan

         320        —          (25 )       295  

Other loans

         6,350        (7 )       —          6,343  
     

 

 

     

 

 

     

 

 

     

 

 

  
        657,040        (4,937 )       (37,098 )       615,005  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        770,950        (5,017 )       (37,989 )       727,944  
     

 

 

     

 

 

     

 

 

     

 

 

  
In millions of won           December 31, 2018  
            Face value      Allowance for
doubtful accounts		      Present value
discount		      Book value  

Short-term loans and receivables

               

Loans for tuition

    W        33,333        —          (992 )       32,341  

Loans for housing

         15,572        —          —          15,572  

Fisheries loan

         320        —          —          320  

Other loans

         74,432        (12 )       —          74,420  
     

 

 

     

 

 

     

 

 

     

 

 

  
        123,657        (12 )       (992 )       122,653  
     

 

 

     

 

 

     

 

 

     

 

 

  

Long-term loans and receivables

               

Loans for tuition

         414,893        —          (38,659 )       376,234  

Loans for housing

         167,723        —          —          167,723  

Loans for related parties

         46,798        (4,930 )       —          41,868  

Fisheries loan

         640        —          (53 )       587  

Other loans

         9,619        (10 )       —          9,609  
     

 

 

     

 

 

     

 

 

     

 

 

  
        639,673        (4,940 )       (38,712 )       596,021  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        763,330        (4,952 )       (39,704 )       718,674  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

13.

Other Financial Assets, Continued

 

(3)

Changes in the allowance for doubtful accounts of loans and receivables for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won       June 30, 2019      December 31, 2018  

Beginning balance

   W     4,952        8,948  

Bad debt expense

       65        22  

Others

       —          (4,018 ) 
   

 

 

     

 

 

  

Ending balance

   W     5,017        4,952  
   

 

 

     

 

 

  

 

(4)

Long-term and short-term financial instruments as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won        June 30, 2019      December 31, 2018  
         Current      Non-current      Current      Non-current  

Time deposits

   W      1,826,168        14,292        1,602,285        63,358  

ABCP

        105,342        —          —          —    

CD

        40,000        —          10,000        —    

RP

        517        —          —          —    

Others

        42,000        386,068        257,001        385,383  
    

 

 

     

 

 

     

 

 

     

 

 

  
  W      2,014,027        400,360        1,869,286        448,741  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

14.

Inventories

Inventories as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019  
            Acquisition cost      Valuation allowance      Book value  

Raw materials

    W        3,547,286        (1,430 )       3,545,856  

Merchandises

         514        —          514  

Work-in-progress

         166,392        —          166,392  

Finished goods

         55,299        —          55,299  

Supplies

         2,037,620        (4,340 )       2,033,280  

Inventories-in-transit

         937,144        —          937,144  

Other inventories

         14,435        —          14,435  
     

 

 

     

 

 

     

 

 

  
   W        6,758,690        (5,770 )       6,752,920  
     

 

 

     

 

 

     

 

 

  
In millions of won           December 31, 2018  
            Acquisition cost      Valuation allowance      Book value  

Raw materials

    W        3,886,739        (2,609 )       3,884,130  

Work-in-progress

         189,907        (1,028 )       188,879  

Finished goods

         50,526        —        50,526  

Supplies

         1,858,751        (3,907 )       1,854,844  

Inventories-in-transit

         1,196,113        —        1,196,113  

Other inventories

         13,761        —        13,761  
     

 

 

     

 

 

     

 

 

  
   W        7,195,797        (7,544 )       7,188,253  
     

 

 

     

 

 

     

 

 

  

The reversal of the allowance for loss on inventory valuation due to increase in the net realizable value of inventory deducted from cost of sales for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 were W4,069 million and W3,723 million, respectively.

The amounts of loss from inventory valuation included in other gains or losses for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 were W2,295 million and W1,953 million, respectively.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

15.

Finance Lease Receivables

 

(1)

Finance lease contracts

The Group 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 Group has fly-ash pipe conduit finance leases with an average lease term of 7 years. In addition, the Group provides 30 energy storage system installation projects and 56 energy efficiency contracts as finance leases with a lease term of 2 to 10 years. Also, the Group entered into a PPA with the Comision Federal de Electricidad in Mexico to provide for 25 years (December 2013 to November 2038) 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, 2019 and December 31, 2018 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, 2019      December 31, 2018  
         Minimum lease
payments		          Present value of
minimum lease
payments		      Minimum lease
payments		      Present value of
minimum lease
payments		  

Less than 1 year

   W      131,923          92,484        124,918        84,688  

1 ~ 5 years

        474,508          227,189        467,518        223,622  

More than 5 years

        1,313,711          678,810        1,333,016        675,036  
    

 

 

       

 

 

     

 

 

     

 

 

  
  W      1,920,142          998,483        1,925,452        983,346  
    

 

 

       

 

 

     

 

 

     

 

 

  

Less : Allowance for doubtful accounts

             (1,297 )          (1,133 ) 
         

 

 

        

 

 

  
       W      997,186           982,213  
         

 

 

        

 

 

  

 

(3)

Changes in the allowance for doubtful accounts of finance lease receivables for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won        June 30, 2019      December 31, 2018  

Beginning balance

   W      1,132        —    

Bad debt expense

        165        1,133  
    

 

 

     

 

 

  

Ending balance

   W      1,297        1,133  
    

 

 

     

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

16.

Non-Financial Assets

Non-financial assets as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019      December 31, 2018  
            Current      Non-current      Current      Non-current  

Advance payment

    W        157,977        186,644        156,073        160,628  

Prepaid expenses (*1)

         428,223        79,785        290,944        90,449  

Others (*2)

         618,565        78,583        431,871        76,075  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        1,204,765        345,012        878,888        327,152  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

(*1)

Prepaid expenses amounting to W6,433 million was transferred to right-of-assets due to change in accounting policy.

 

(*2)

Details of others as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019      December 31, 2018  
            Current      Non-current      Current      Non-current  

Greenhouse gas emissions rights

    W        172,431        —          93,749        —    

Other quick assets (*3)

         446,134        78,583        338,122        76,075  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        618,565        78,583        431,871        76,075  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

(*3)

The Group recognized an impairment loss of W87,023 million as it was determined that there is objective evidence of impairment related to its equity interest in loan receivables from Orano Expansion for the year ended December 31, 2018.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries

 

(1)

Consolidated subsidiaries as of June 30, 2019 and December 31, 2018 are as follows:

 

              Percentage of ownership  

Subsidiaries

  

Key operation activities

    Location    June 30,
2019		     December 31,
2018		  

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      65.77 %      65.77 % 

KEPCO Plant Service & Engineering Co., Ltd.

   Utility plant maintenance and others    KOREA      51.00 %      51.00 % 

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

   Construction and operation of utility plant    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 Netherlands B.V.

   Holding company    NETHERLANDS      100.00 %      100.00 % 

KOREA Imouraren Uranium Investment Corp.

   Holding company    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.

   Holding company    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 % 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(1)

Consolidated subsidiaries as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

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

   Holding company    PHILIPPINES      100.00 %      100.00 % 

EWP America Inc.

   Holding company    USA      100.00 %      100.00 % 

EWP Renewable Corporation

   Holding company    USA      100.00 %      100.00 % 

DG Fairhaven Power, 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

   Holding company    CANADA      96.36 %      96.36 % 

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 % 
              Percentage of ownership  

Subsidiaries

  

Key operation activities

    Location    June 30,
2019		     December 31,
2018		  

PT. EWP Indonesia

   Holding company    INDONESIA      99.96 %      99.96 % 

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.

   Recycling fly ashes    KOREA      86.22 %      86.22 % 

Commerce and Industry Energy Co., Ltd. (*4)

   Power generation    KOREA      85.00 %      59.03 % 

KEPCO Singapore Holdings Pte., Ltd.

   Holding company    SINGAPORE      —         100.00 % 

KEPCO KPS Philippines Corp.

  

Utility plant maintenance and

Others

    PHILIPPINES      51.00 %      51.00 % 

KOSPO Chile SpA

   Holding company    CHILE      100.00 %      100.00 % 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(1)

Consolidated subsidiaries as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

PT. KOWEPO Sumsel Operation And Maintenance Services

  

Utility plant maintenance and

others

    INDONESIA      95.00 %      95.00 % 

HeeMang Sunlight Power Co., Ltd.

   Operation of utility plant    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 % 

HI Carbon Professional Private Special Asset

Investment Trust 1

   Holding company    KOREA      96.67 %      96.67 % 

Chitose Solar Power Plant LLC

   Power generation    JAPAN      80.10 %      80.10 % 

KEPCO Energy Solution Co. Ltd.

   Energy service    KOREA      100.00 %      100.00 % 

Solar School Plant Co., Ltd.

   Power generation    KOREA      100.00 %      100.00 % 

KOSPO Power Services Limitada

  

Utility plant maintenance and

others

    CHILE      65.00 %      65.00 % 

Energy New Industry Specialized Investment

Private Investment Trust

   Holding company    KOREA      99.01 %      99.01 % 

KOEN Bylong Pty., Ltd.

   Resources development    AUSTRALIA      100.00 %      100.00 % 

KOMIPO Bylong Pty., Ltd.

   Resources development    AUSTRALIA      100.00 %      100.00 % 

KOWEPO Bylong Pty., Ltd.

   Resources development    AUSTRALIA      100.00 %      100.00 % 

KOSPO Bylong Pty., Ltd.

   Resources development    AUSTRALIA      100.00 %      100.00 % 

EWP Bylong Pty., Ltd.

   Resources development    AUSTRALIA      100.00 %      100.00 % 

KOWEPO Lao International

  

Utility plant maintenance and

Others

    LAOS      100.00 %      100.00 % 

KEPCO US Inc.

   Holding company    USA      100.00 %      100.00 % 

KEPCO Alamosa LLC

   Holding company    USA      50.10 %      50.10 % 

KEPCO Solar of Alamosa, LLC (formerly, Cogentrix of Alamosa, LLC)

   Power generation    USA      50.10 %      50.10 % 

KEPCO-LG CNS Mangilao Holdings LLC

   Holding company    USA      70.00 %      70.00 % 

Mangilao Investment LLC

   Holding company    USA      70.00 %      70.00 % 

KEPCO-LG CNS Mangilao Solar, LLC

   Power generation    USA      70.00 %      70.00 % 

Jeju Hanlim Offshore Wind Co., Ltd.

   Power generation    KOREA      68.84 %      68.84 % 

PT. Siborpa Eco Power

  

Construction and operation of

utility plant

    INDONESIA      55.00 %      55.00 % 

BSK E-New Industry Fund VII

   Holding company    KOREA      80.86 %      80.86 % 

e-New Industry LB Fund 1

   Holding company    KOREA      75.36 %      75.36 % 

Songhyun e-New Industry Fund

   Holding company    KOREA      79.85 %      79.85 % 

PT. Korea Energy Indonesia

  

Utility plant maintenance and

Others

    INDONESIA      95.00 %      95.00 % 

KOLAT SpA

  

Utility plant maintenance and

Others

    CHILE      100.00 %      100.00 % 

KEPCO California, LLC

   Holding company    USA      100.00 %      100.00 % 

KEPCO Mojave Holdings, LLC

   Holding company    USA      100.00 %      100.00 % 

Incheon Fuel Cell Co., Ltd.

   Power generation    KOREA      60.00 %      60.00 % 

KOEN Service Co., Ltd.

   Facility maintenance and service    KOREA      100.00 %      100.00 % 

KOMIPO Service Co., Ltd.

   Facility maintenance and service    KOREA      100.00 %      100.00 % 

KOWEPO Service Co., Ltd.

   Facility maintenance and service    KOREA      100.00 %      100.00 % 

KOSPO Service Co., Ltd.

   Facility maintenance and service    KOREA      100.00 %      100.00 % 

EWP Service Co., Ltd.

   Facility maintenance and service    KOREA      100.00 %      100.00 % 

PT. KOMIPO Energy Indonesia

  

Utility plant maintenance and

others

    INDONESIA      95.00 %      95.00 % 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(1)

Consolidated subsidiaries as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

KNF Partners Co., Ltd.

   Facility maintenance    KOREA      100.00 %      —    

KOSPO USA Inc.

   Holding company    USA      100.00 %      —    

Nambu USA LLC

   Holding company    USA      100.00 %      —    

Tamra Offshore Wind Power Co., Ltd. (*5)

   Power generation    KOREA      63.00 %      27.00 % 
              Percentage of ownership (%)  

Subsidiaries

  

Key operation activities

    Location    June 30,
2019		     December 31,
2018		  

KEPCO MCS Co., Ltd.

   Electric meter reading and others    KOREA      100.00 %      —    

KEPCO FMS Co., Ltd.

   Security service    KOREA      100.00 %      —    

Firstkeepers Co., Ltd.

   Facility maintenance    KOREA      100.00 %      —    

Secutec Co., Ltd.

   Security service    KOREA      100.00 %      —    

SE Green Energy Co., Ltd. (*5)

   Power generation    KOREA      84.80 %      47.76 % 

 

(*1)

Considering treasury stocks, the effective percentage of ownership is 66.08%.

(*2)

The effective percentage of ownership is less than 50%. However, these subsidiaries are included in the consolidated financial statements as the Group obtained the majority of the voting power through the shareholders’ agreement.

(*3)

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

(*4)

The Group guarantees a certain return on investment related to Commerce and Industry Energy Co., Ltd. for the financial investors. The financial investors have a right to sell their shares to the Group 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.

(*5)

Re-classified from an associate to a subsidiary due to additional acquisition of interest.

 

(2)

Subsidiaries newly included in and excluded from consolidation for the six-month period ended June 30, 2019 are as follows:

<Subsidiaries newly included in consolidation during the six-month period ended June 30, 2019>

 

Subsidiary

   

Reason

KNF Partners Co., Ltd.

    Newly established

KOSPO USA Inc.

    Newly established

Nambu USA LLC

    Newly established

Tamra Offshore Wind Power Co., Ltd.

    Additional acquisition

KEPCO MCS Co., Ltd.

    Newly established

KEPCO FMS Co., Ltd.

    Newly established

Firstkeepers Co., Ltd.

    Newly established

Secutec Co., Ltd.

    Newly established

SE Green Energy Co., Ltd.

    Additional acquisition

<Subsidiaries excluded from consolidation during the six-month period ended June 30, 2019>

 

Subsidiary

   

Reason

KEPCO Singapore Holdings Pte., Ltd.

    Under Liquidation Process

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(3)

Summary of financial information of consolidated subsidiaries as of and for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won                                   

June 30, 2019

  

Subsidiaries

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

Korea Hydro & Nuclear Power Co., Ltd.

      W        56,977,044        31,238,815        4,593,448        492,750  

Korea South-East Power Co., Ltd.

         11,101,489        5,980,760        2,711,439        74,363  

Korea Midland Power Co., Ltd.

         12,152,831        8,455,537        1,969,421        (56,078 ) 

Korea Western Power Co., Ltd.

         10,536,788        6,724,075        1,951,551        (124,552 ) 

Korea Southern Power Co., Ltd.

         10,492,045        6,112,305        2,612,632        45,933  

Korea East-West Power Co., Ltd.

         9,201,589        4,461,152        2,551,219        73,583  

KEPCO Engineering & Construction Company, Inc.

         705,430        243,134        184,402        14,482  

KEPCO Plant Service & Engineering Co., Ltd.

         1,257,660        317,192        570,519        60,283  

KEPCO Nuclear Fuel Co., Ltd.

         783,201        385,249        162,016        22,728  

KEPCO KDN Co., Ltd.

         552,886        163,846        245,550        9,467  

Garolim Tidal Power Plant Co., Ltd.

         601        345        —          (6 ) 

KEPCO International HongKong Ltd.

         147,201        1        —          2,229  

KEPCO International Philippines Inc.

         106,137        8        —          37,535  

KEPCO Gansu International Ltd.

         10,444        544        —          (3 ) 

KEPCO Philippines Holdings Inc.

         203,592        10,244        —          28,543  

KEPCO Philippines Corporation

         5,753        56        —          (658 ) 

KEPCO Ilijan Corporation

         407,427        55,016        47,418        21,030  

KEPCO Lebanon SARL

         1,859        9,776        —          279  

KEPCO Neimenggu International Ltd.

         200,904        —          —          (130 ) 

KEPCO Shanxi International Ltd.

         548,980        214,291        —          5,364  

KOMIPO Global Pte Ltd.

         264,659        424        —          6,672  

KEPCO Netherlands B.V.

         122,404        77        —          998  

KOREA Imouraren Uranium Investment Corp.

         63,469        121        —          (21 ) 

KEPCO Australia Pty., Ltd.

         396,475        14        —          (7 ) 

KOSEP Australia Pty., Ltd.

         41,335        5,018        7,540        1,113  

KOMIPO Australia Pty., Ltd.

         42,035        5,171        8,207        2,642  

KOWEPO Australia Pty., Ltd.

         42,449        5,236        8,207        1,564  

KOSPO Australia Pty., Ltd.

         38,597        2,940        8,207        1,773  

KEPCO Middle East Holding Company

         98,377        88,973        —          964  

Qatrana Electric Power Company

         491,443        321,982        10,237        10,022  

KHNP Canada Energy, Ltd.

         56,417        45        —          (3 ) 

KEPCO Bylong Australia Pty., Ltd.

         248,824        340,040        —          (2,302 ) 

Korea Waterbury Uranium Limited Partnership

         20,902        165        —          (31 ) 

Korea Electric Power Nigeria Ltd.

         27        29        228        (64 ) 

KEPCO Holdings de Mexico

         198        33        —          (9 ) 

KST Electric Power Company

         536,817        430,304        24,642        8,592  

KEPCO Energy Service Company

         1,898        988        2,951        391  

KEPCO Netherlands S3 B.V.

         47,660        77        —          389  

PT. KOMIPO Pembangkitan Jawa Bali

         11,925        4,739        9,303        4,833  

PT. Cirebon Power Service

         2,061        481        3,902        207  

KOWEPO International Corporation

         —          10        —          —    

KOSPO Jordan LLC

         16,532        1,525        5,313        1,650  

EWP Philippines Corporation

         1,690        881        —          (96 ) 

EWP America Inc. (*1)

         71,563        4,548        13,022        (3,348 ) 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(3)

Summary of financial information of consolidated subsidiaries as of and for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

KNF Canada Energy Limited

         1,978        29        —          (22 ) 

EWP Barbados 1 SRL

         276,440        378        1,433        385  

Gyeonggi Green Energy Co., Ltd.

         273,239        166,815        17,330        (4,587 ) 

PT. Tanggamus Electric Power

         233,839        195,468        1,298        1,118  

Gyeongju Wind Power Co., Ltd.

         118,323        80,171        9,838        3,197  

KOMIPO America Inc.

         10,121        592        192        (317 ) 

KOSEP USA, INC.

         1        5,143        —          (117 ) 

PT. EWP Indonesia

         31,370        —          —          1,839  

KEPCO Netherlands J3 B.V.

         119,989        126        —          (49 ) 

Korea Offshore Wind Power Co., Ltd.

         233,199        60,035        —          (6,573 ) 

Global One Pioneer B.V.

         136        86        —          (53 ) 

Global Energy Pioneer B.V.

         304        71        —          (35 ) 

Mira Power Limited

         335,129        269,319        —          (494 ) 

KOSEP Material Co., Ltd.

         3,053        1,351        1,666        90  

Commerce and Industry Energy Co., Ltd.

         97,452        45,418        19,135        (2,828 ) 

 

In millions of won      

June 30, 2019

  

Subsidiaries

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

KEPCO KPS Philippines Corp.

     W       7,749       555       1,438       (384 ) 

KOSPO Chile SpA

       150,336       64,729       —         (413 ) 

PT. KOWEPO Sumsel Operation And Maintenance Services

       861       156       —         (467 ) 

HeeMang Sunlight Power Co., Ltd.

       12,215       8,548       323       103  

Fujeij Wind Power Company

       231,521       212,525       —         803  

KOSPO Youngnam Power Co., Ltd.

       397,990       309,686       154,229       421  

HI Carbon Professional Private Special Asset Investment Trust 1

       2,996       —         —         6  

Chitose Solar Power Plant LLC

       120,051       107,261       8,933       1,670  

KEPCO Energy Solution Co. Ltd.

       307,058       2,384       1,500       1,419  

Solar School Plant Co., Ltd.

       205,043       850       995       1,277  

KOSPO Power Services Limitada

       4,953       1,662       6,336       1,851  

Energy New Industry Specialized Investment Private Investment Trust (*2)

       66,491       1,897       —         (3,361 ) 

KOEN Bylong Pty., Ltd.

       4,155       25       —         —    

KOMIPO Bylong Pty., Ltd.

       4,157       27       —         —    

KOWEPO Bylong Pty., Ltd.

       4,157       27       —         —    

KOSPO Bylong Pty., Ltd.

       4,157       27       —         —    

EWP Bylong Pty., Ltd.

       4,157       27       —         —    

KOWEPO Lao International

       4,651       720       2,111       555  

KEPCO US Inc.

       17,216       —         —         —    

KEPCO Alamosa LLC

       33,509       30       60       (132 ) 

KEPCO Solar of Alamosa, LLC (formerly, Cogentrix of Alamosa, LLC)

       65,208       48,981       4,183       (638 ) 

KEPCO-LG CNS Mangilao Holdings LLC

       26,665       28,357       —         (432 ) 

Mangilao Investment LLC

       26,664       —         —         —    

KEPCO-LG CNS Mangilao Solar, LLC

       26,368       9       —         (225 ) 

Jeju Hanlim Offshore Wind Co., Ltd.

       15,099       413       —         (1,543 ) 

PT. Siborpa Eco Power

       12,193       60       —         (511 ) 

PT. Korea Energy Indonesia

       1,426       65       1,209       162  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(3)

Summary of financial information of consolidated subsidiaries as of and for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

KOLAT SpA

         39,354        718        —          (569 ) 

KEPCO California, LLC

         43,553        21        352        (76 ) 

KEPCO Mojave Holdings, LLC

         104,804        68,426        —          (2,027 ) 

Incheon Fuel Cell Co., Ltd.

         22,893        84        —          (395 ) 

KOEN Service Co., Ltd.

         4,467        2,414        11,185        1,501  

KOMIPO Service Co., Ltd.

         3,898        2,863        11,759        477  

KOWEPO Service Co., Ltd.

         3,759        1,362        11,507        1,861  

KOSPO Service Co., Ltd.

         2,780        2,015        7,166        194  

EWP Service Co., Ltd.

         1,346        588        6,743        197  

PT. KOMIPO Energy Indonesia

         1,793        10        —          (545 ) 

KNF partners Co., Ltd.

         595        397        662        (102 ) 

KOSPO USA Inc.

         3,187        86        —          (308 ) 

Nambu USA LLC

         —          1        —          (1 ) 

Tamra Offshore Wind Power Co., Ltd.

         162,262        126,619        10,668        1,813  

KEPCO MCS Co., Ltd.

         19,062        14,490        26,573        3,622  

KEPCO FMS Co., Ltd.

         570        364        328        (294 ) 

Firstkeepers Co., Ltd.

         990        —          —          —    

Secutec Co., Ltd.

         690        —          —          —    

SE Green Energy Co., Ltd.

         26,348        56        —          —    

 

(*1)

Financial information of EWP America Inc. includes that of six other subsidiaries, EWP Renewable Corporation, DG Fairhaven Power, LLC, DG Whitefield, LLC, Springfield Power, LLC, California Power Holdings, LLC, and EWPRC Biomass Holdings, LLC.

(*2)

Financial information of Energy New Industry Specialized Investment Private Investment Trust includes that of three other subsidiaries, BSK E-New Industry Fund VII, e-New Industry LB Fund 1 and Songhyun e-New Industry Fund.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(3)

Summary of financial information of consolidated subsidiaries as of and for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

In millions of won  

December 31, 2018

  

Subsidiaries

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

Korea Hydro & Nuclear Power Co., Ltd.

   W      55,792,704        30,484,104        8,858,717        (137,613 ) 

Korea South-East Power Co., Ltd.

        9,997,758        4,948,553        5,521,038        25,736  

Korea Midland Power Co., Ltd.

        10,839,218        7,088,013        4,368,467        (38,142 ) 

Korea Western Power Co., Ltd.

        9,902,752        5,965,410        4,841,261        (28,157 ) 

Korea Southern Power Co., Ltd.

        9,810,985        5,463,721        5,539,793        55,439  

Korea East-West Power Co., Ltd.

        8,744,380        4,092,460        4,933,525        3,345  

KEPCO Engineering & Construction Company, Inc.

        771,480        310,100        433,701        12,937  

KEPCO Plant Service & Engineering Co., Ltd.

        1,275,365        296,428        1,239,604        160,791  

KEPCO Nuclear Fuel Co., Ltd.

        817,416        434,439        230,667        15,835  

KEPCO KDN Co., Ltd.

        566,807        159,423        622,154        60,016  

Garolim Tidal Power Plant Co., Ltd.

        608        345        —          (11 ) 

KEPCO International HongKong Ltd.

        140,101        1        —          3,307  

KEPCO International Philippines Inc.

        107,948        1,475        —          52,539  

KEPCO Gansu International Ltd.

        12,047        515        —          (24 ) 

KEPCO Philippines Holdings Inc.

        188,551        9,775        —          53,219  

KEPCO Philippines Corporation

        6,394        213        —          54  

KEPCO Ilijan Corporation

        431,444        53,413        99,844        49,631  

KEPCO Lebanon SARL

        1,509        9,686        —          413  

KEPCO Neimenggu International Ltd.

        194,336        —          —          20,829  

KEPCO Shanxi International Ltd.

        519,991        201,732        —          290  

KOMIPO Global Pte Ltd.

        250,456        961        —          11,478  

KEPCO Netherlands B.V.

        130,460        77        —          26,550  

KOREA Imouraren Uranium Investment Corp.

        63,517        171        —          (89,852 ) 

KEPCO Australia Pty., Ltd.

        439,719        14        —          49  

KOSEP Australia Pty., Ltd.

        37,057        2,832        20,294        7,315  

KOMIPO Australia Pty., Ltd.

        39,066        4,659        20,294        7,193  

KOWEPO Australia Pty., Ltd.

        39,341        4,702        20,294        7,316  

KOSPO Australia Pty., Ltd.

        36,525        3,585        20,294        9,520  

KEPCO Middle East Holding Company

        101,201        92,862        —          3,043  

Qatrana Electric Power Company

        484,383        326,486        18,766        21,170  

KHNP Canada Energy, Ltd.

        49,776        35        —          (26 ) 

KEPCO Bylong Australia Pty., Ltd.

        254,398        315,921        —          (29,573 ) 

Korea Waterbury Uranium Limited Partnership

        20,890        142        —          (74 ) 

Korea Electric Power Nigeria Ltd.

        112        39        727        (93 ) 

KEPCO Holdings de Mexico

        248        57        —          (11 ) 

KST Electric Power Company

        535,807        457,867        109,735        10,274  

KEPCO Energy Service Company

        1,940        1,454        5,117        (232 ) 

KEPCO Netherlands S3 B.V.

        46,518        38        —          1,226  

PT. KOMIPO Pembangkitan Jawa Bali

        11,405        5,472        20,320        3,925  

PT. Cirebon Power Service

        1,588        273        7,228        177  

KOWEPO International Corporation

        —          8        —          —    

KOSPO Jordan LLC

        16,315        3,432        34,371        1,907  

EWP Philippines Corporation

        1,684        829        —          (11 ) 

EWP America Inc. (*1)

        72,525        4,903        29,557        (4,483 ) 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(3)

Summary of financial information of consolidated subsidiaries as of and for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

KNF Canada Energy Limited

        1,801        20        —          (45 ) 

EWP Barbados 1 SRL

        268,033        1,581        688        11,221  

Gyeonggi Green Energy Co., Ltd.

        293,812        185,043        96,442        25,121  

PT. Tanggamus Electric Power

        216,321        187,502        26,832        9,338  

Gyeongju Wind Power Co., Ltd.

        122,303        83,348        21,906        8,803  

KOMIPO America Inc.

        10,092        572        —          (885 ) 

KOSEP USA, INC.

        1        4,857        —          4,341  

PT. EWP Indonesia

        7,444        14        —          3,138  

KEPCO Netherlands J3 B.V.

        115,978        77        —          (104 ) 

Korea Offshore Wind Power Co., Ltd.

        216,114        36,377        —          (8,473 ) 

Global One Pioneer B.V.

        162        87        —          (113 ) 

Global Energy Pioneer B.V.

        325        74        —          (102 ) 

 

In millions of won      

December 31, 2018

  

Subsidiaries

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

Mira Power Limited

   W      277,525        213,104        —          (980 ) 

KOSEP Material Co., Ltd.

        2,862        1,249        3,240        377  

Commerce and Industry Energy Co., Ltd.

        92,872        88,009        27,937        (6,091 ) 

KEPCO Singapore Holdings Pte., Ltd.

        582        9        —          (31 ) 

KEPCO KPS Philippines Corp.

        7,501        358        4,815        766  

KOSPO Chile SpA

        139,814        57,502        —          1,016  

PT. KOWEPO Sumsel Operation And Maintenance Services

        1,313        394        4,343        (654 ) 

HeeMang Sunlight Power Co., Ltd.

        10,915        7,626        146        (192 ) 

Fujeij Wind Power Company

        217,796        212,435        —          (1,033 ) 

KOSPO Youngnam Power Co., Ltd.

        413,472        325,589        369,669        8,155  

HI Carbon Professional Private Special Asset Investment Trust 1

        3,002        —          —          12  

Chitose Solar Power Plant LLC

        115,505        105,079        15,022        872  

KEPCO Energy Solution Co. Ltd.

        304,103        849        5,584        2,532  

Solar School Plant Co., Ltd.

        204,282        1,366        1,149        2,033  

KOSPO Power Services Limitada

        3,045        596        9,610        1,132  

Energy New Industry Specialized Investment Private Investment Trust (*2)

        66,498        1,014        —          (1,140 ) 

KOEN Bylong Pty., Ltd.

        5,544        26        —          (10 ) 

KOMIPO Bylong Pty., Ltd.

        5,544        26        —          (25 ) 

KOWEPO Bylong Pty., Ltd.

        5,544        26        —          —    

KOSPO Bylong Pty., Ltd.

        5,544        26        —          (25 ) 

EWP Bylong Pty., Ltd.

        5,544        16        —          (15 ) 

KOWEPO Lao International

        3,800        1,015        2,899        895  

KEPCO US Inc.

        16,640        —          —          6  

KEPCO Alamosa LLC

        32,346        79        750        (688 ) 

KEPCO Solar of Alamosa, LLC (formerly, Cogentrix of Alamosa, LLC)

        64,223        48,819        9,015        200  

KEPCO-LG CNS Mangilao Holdings LLC

        25,642        27,197        —          (1,144 ) 

Mangilao Investment LLC

        25,641        —          —          —    

KEPCO-LG CNS Mangilao Solar, LLC

        25,406        146        —          (104 ) 

Jeju Hanlim Offshore Wind Co., Ltd.

        16,557        328        —          (925 ) 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(3)

Summary of financial information of consolidated subsidiaries as of and for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

PT. Siborpa Eco Power

        12,363        141        —          (1,771 ) 

PT. Korea Energy Indonesia

        1,183        60        1,459        223  

KOLAT SpA

        38,362        474        585        (186 ) 

KEPCO California, LLC

        42,171        21        —          (332 ) 

KEPCO Mojave Holdings, LLC

        103,189        65,730        —          (3,959 ) 

Incheon Fuel Cell Co., Ltd.

        23,626        415        —          (201 ) 

KOEN Service Co., Ltd.

        583        31        —          (48 ) 

KOMIPO Service Co., Ltd.

        576        17        —          (41 ) 

KOWEPO Service Co., Ltd.

        750        227        —          (77 ) 

KOSPO Service Co., Ltd.

        576        6        —          (30 ) 

EWP Service Co., Ltd.

        667        97        —          (30 ) 

PT. KOMIPO Energy Indonesia

        2,236        —          —          —    

 

  (*1)

Financial information of EWP America Inc. includes that of six other subsidiaries, EWP Renewable Corporation, DG Fairhaven Power, LLC, DG Whitefield, LLC, Springfield Power, LLC, California Power Holdings, LLC, and EWPRC Biomass Holdings, LLC.

  (*2)

Financial information of Energy New Industry Specialized Investment Private Investment Trust includes that of three other subsidiaries, BSK E-New Industry Fund VII, e-New Industry LB Fund 1 and Songhyun e-New Industry Fund.

 

(4)

Significant restrictions on the Group’s power over the subsidiaries as of June 30, 2019 are as follows:

 

Company

   

Nature and extent of any significant restrictions

Gyeonggi Green Energy Co., Ltd.    Acquisition or disposal of assets of more than W35 billion, change in the capacity of cogeneration units (except for the change due to performance improvement of equipment, maintenance) will require unanimous consent of all directors.
KOSPO Youngnam Power Co., Ltd.    Dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained. Shares cannot be wholly or partially transferred without prior written consent of financial institutions.
Incheon Fuel Cell Co., Ltd.    Acquisition or disposal of assets of more than W20 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.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

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, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won  

June 30, 2019

  

Description

       KEPCO Ilijan
Corporation		     KEPCO Plant
Service &
Engineering
Co., Ltd.		     KEPCO
Engineering &
Construction
Company, Inc.		     Others     Total  

Percentage of ownership

       49.00 %      49.00 %      33.92 %     

Current assets

   W     167,930       674,593       214,117       908,386       1,965,026  

Non-current assets

       239,497       583,067       491,313       2,988,981       4,302,858  

Current liabilities

       (6,883 )      (241,396 )      (165,471 )      (541,198 )      (954,948 ) 

Non-current liabilities

       (48,133 )      (75,796 )      (77,663 )      (1,937,304 )      (2,138,896 ) 

Net assets

       352,411       940,468       462,296       1,418,865       3,174,040  

Book value of non-controlling interest

       172,681       460,829       156,811       717,985       1,508,306  

Sales

       47,418       570,519       184,402       442,244       1,244,583  

Profit for the period

       21,030       60,283       14,482       45,349       141,144  

Profit for the period attributable to non-controlling interest

       10,305       29,539       4,912       9,792       54,548  

Cash flows from operating activities

       43,185       33,365       8,912       156,242       241,704  

Cash flows from investing activities

       3,861       79,478       26,576       (142,886 )      (32,971 ) 

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

       (30,150 )      (42,471 )      (33,750 )      (11,036 )      (117,407 ) 

Dividends to non-controlling interest

       (28,967 )      (39,470 )      (1,807 )      (7,404 )      (77,648 ) 

Effect of exchange rate fluctuation

       1,871       (428 )      (49 )      (8,886 )      (7,492 ) 

Net increase (decrease) of cash and cash equivalents

       (10,200 )      30,474       (118 )      (13,970 )      6,186  
In millions of won  

December 31, 2018

  

Description

       KEPCO Ilijan
Corporation		     KEPCO Plant
Service &
Engineering
Co., Ltd.		     KEPCO
Engineering &
Construction
Company, Inc.		     Others     Total  

Percentage of ownership

       49.00 %      49.00 %      33.92 %     

Current assets

   W     163,622       628,725       281,390       956,928       2,030,665  

Non-current assets

       267,822       646,640       490,090       2,760,500       4,165,052  

Current liabilities

       (16,819 )      (270,097 )      (248,402 )      (559,552 )      (1,094,870 ) 

Non-current liabilities

       (36,594 )      (26,331 )      (61,698 )      (1,933,583 )      (2,058,206 ) 

Net assets

       378,031       978,937       461,380       1,224,293       3,042,641  

Book value of non-controlling interest

       185,235       479,679       156,500       680,963       1,502,377  

Sales

       99,844       1,239,604       433,701       966,037       2,739,186  

Profit for the period

       49,631       160,791       12,937       92,457       315,816  

Profit for the period attributable to non-controlling interest

       24,319       78,788       4,388       28,475       135,970  

Cash flows from operating activities

       92,822       129,700       81,042       110,448       414,012  

Cash flows from investing activities

       (4,452 )      (123,593 )      (50,569 )      35,167       (143,447 ) 

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

       (53,733 )      (33,737 )      (14,591 )      (374,669 )      (476,730 ) 

Dividends to non-controlling interest

       (51,626 )      (32,414 )      (2,839 )      (23,452 )      (110,331 ) 

Effect of exchange rate fluctuation

       2,840       (124 )      31       1,304       4,051  

Net increase (decrease) of cash and cash equivalents

       (14,149 )      (60,168 )      13,074       (251,202 )      (312,445 ) 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(6)

Changes in goodwill

(i) Details of goodwill as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019      December 31, 2018  

Acquisition cost

    W        2,582        2,582  

Accumulated impairment

         —          —    
     

 

 

     

 

 

  

Carrying book value

    W        2,582        2,582  
     

 

 

     

 

 

  

(ii) There are no changes in goodwill for the six-month period ended June 30, 2019 and for the year ended December 31, 2018.

 

(7)

Disposals of subsidiaries

The Group received W578 million as residual assets from the liquidation of its subsidiary, KEPCO Singapore Holdings Pte., Ltd., during the six-month period ended June 30, 2019, and KEPCO Singapore Holdings Pte., Ltd. is in the process of completing the registration of liquidation.

 

18.

Investments in Associates and Joint Ventures

 

(1)

Investments in associates and joint ventures as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won      

June 30, 2019

  

Investees

  

Key operation activities

   Location     Percentage of
ownership		           Acquisition
cost		     Book
value		  

<Associates>

            

Korea Gas Corporation (*1)

   Importing and wholesaling LNG     KOREA       20.47 %    W       94,500       1,784,947  

Gemeng International Energy Co., Ltd.

   Power generation     CHINA       34.00 %        413,153       664,020  

PT. Bayan Resources TBK

   Resources development     INDONESIA       20.00 %        615,860       453,190  

Korea Power Exchange (*2)

   Management of power market and others     KOREA       100.00 %        127,839       265,271  

Hyundai Green Power Co., Ltd.

   Power generation     KOREA       29.00 %        88,885       127,571  

S-Power Co., Ltd.

   Power generation     KOREA       49.00 %        132,300       116,351  

PT. Cirebon Electric Power

   Power generation     INDONESIA       27.50 %        40,365       118,019  

Dongducheon Dream Power Co., Ltd. (*3)

   Power generation     KOREA       33.61 %        148,105       71,840  

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

   Power generation     LAOS       25.00 %        87,426       72,479  

Shin Pyeongtaek Power Co., Ltd.

   Power generation     KOREA       40.00 %        72,000       64,168  

SPC Power Corporation

   Power generation     PHILIPPINES       38.00 %        20,635       63,301  

Korea Electric Power Corporation Fund (*4)

   Developing electric enterprises     KOREA       98.09 %        51,500       46,038  

YTN Co., Ltd.

   Broadcasting     KOREA       21.43 %        59,000       39,123  

Nepal Water & Energy Development Company Private Limited (*5)

   Construction and operation of utility plant     NEPAL       57.67 %        35,571       31,539  

PT Wampu Electric Power

   Power generation     INDONESIA       46.00 %        21,292       31,741  

Others (Daeryun Power Co., Ltd. and 45 others)

             316,131       152,762  
         

 

 

    

 

 

  
        W       2,324,562       4,102,360  
         

 

 

    

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(1)

Investments in associates and joint ventures as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

In millions of won  

June 30, 2019

  

Investees

    Key operation activities      Location      Percentage of
ownership		            Acquisition
cost		      Book
value		  

<Joint ventures>

                 

GS Donghae Electric Power Co., Ltd.

      Power generation        KOREA        34.00 %    W        204,000        249,461  

Jamaica Public Service Company Limited

      Power generation        JAMAICA        40.00 %         301,910        248,691  

KEPCO SPC Power Corporation (*6)

     
 Construction and operation of
utility plant		  
 		      PHILIPPINES        75.20 %         94,579        220,903  

Amman Asia Electric Power Company (*6)

      Power generation        JORDAN        60.00 %         111,476        181,649  

Datang Chifeng Renewable Power Co., Ltd.

      Power generation        CHINA        40.00 %         121,928        183,468  

Rabigh Electricity Company

      Power generation        SAUDI ARABIA        40.00 %         109,743        82,545  

Kelar S.A (*6)

      Power generation        CHILE        65.00 %         78,060        69,958  

RE Holiday Holdings LLC

      Power generation        USA        50.00 %         42,948        42,014  

Solar Philippines Calatagan Corporation

      Power generation        PHILIPPINES        38.00 %         47,903        48,456  

Daegu Green Power Co., Ltd.

      Power generation        KOREA        29.00 %         46,225        44,123  

Chun-cheon Energy Co., Ltd.

      Power generation        KOREA        29.90 %         52,700        39,317  

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

      Power generation        CHINA        40.00 %         10,858        42,530  

RE Barren Ridge 1 Holdings LLC

      Power generation        USA        50.00 %         28,021        41,835  

RE Pioneer Holdings LLC

      Power generation        USA        50.00 %         27,891        32,860  

Chile Solar JV SpA

      Power generation        CHILE        50.00 %         37,689        37,319  

PT. Tanjung Power Indonesia

      Power generation        INDONESIA        35.00 %         26,892        31,167  

Others (Shuweihat Asia Power Investment B.V.and 41 others)

                 344,238        281,790  
             

 

 

     

 

 

  
                1,687,061        1,878,086  
             

 

 

     

 

 

  
           W        4,011,623        5,980,446  
             

 

 

     

 

 

  

 

(*1)

The effective percentage of ownership is 21.57% including treasury stocks.

(*2)

The effective percentage of ownership is 100%. However, the Government regulates the Group’s ability to make operating and financial decisions over the entity, as the Government requires maintaining arms-length transactions between KPX and the Group’s other subsidiaries. The Group can exercise significant influence by its right to nominate directors to the board of directors of the entity.

(*3)

The effective percentage of ownership is 34.01% including redeemable convertible preferred stock.

(*4)

The effective percentage of ownership is more than 50% but the Group 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.

(*5)

The effective percentage of ownership is more than 50% but the Group does not hold control over the entity according to the shareholders’ agreement. For this reason, the entity is classified as an associate.

(*6)

The effective percentage of ownership is more than 50%. However, according to the shareholders’ agreement, all critical financial and operating decisions must be agreed to by all ownership parties. For this reason, the entities are classified as joint ventures.

 

59

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(1)

Investments in associates and joint ventures as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

In millions of won  

December 31, 2018

  

Investees

  

Key operation activities

   Location     Percentage of
ownership		           Acquisition
cost		     Book
value		  

<Associates>

            

Korea Gas Corporation (*1)

  

Importing and wholesaling LNG

     KOREA       20.47 %    W       94,500       1,701,848  

Gemeng International Energy Co., Ltd.

  

Power generation

     CHINA       34.00 %        413,153       647,010  

PT. Bayan Resources TBK

  

Resources development

     INDONESIA       20.00 %        615,860       511,646  

Korea Power Exchange (*2)

   Management of power market and others     KOREA       100.00 %        127,839       251,802  

Hyundai Green Power Co., Ltd.

  

Power generation

     KOREA       29.00 %        88,885       127,160  

S-Power Co., Ltd.

  

Power generation

     KOREA       49.00 %        132,300       114,566  

PT. Cirebon Electric Power

  

Power generation

     INDONESIA       27.50 %        40,365       108,628  

Dongducheon Dream Power Co., Ltd. (*3)

  

Power generation

     KOREA       33.61 %        148,105       76,386  

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

  

Power generation

     LAOS       25.00 %        84,374       77,165  

Shin Pyeongtaek Power Co., Ltd.

  

Power generation

     KOREA       40.00 %        72,000       67,600  

SPC Power Corporation

  

Power generation

     PHILIPPINES       38.00 %        20,635       57,558  

Korea Electric Power Corporation Fund (*4)

  

Developing electric enterprises

     KOREA       98.09 %        51,500       47,189  

YTN Co., Ltd.

  

Broadcasting

     KOREA       21.43 %        59,000       40,338  

Nepal Water & Energy Development Company Private Limited (*5)

  

Construction and operation of utility plant

     NEPAL       57.67 %        35,571       30,961  

PT Wampu Electric Power

  

Power generation

     INDONESIA       46.00 %        21,292       31,097  

Others (Daeryun Power Co., Ltd. and 42 others)

             333,042       173,866  
         

 

 

    

 

 

  
        W       2,338,421       4,064,820  
         

 

 

    

 

 

  

<Joint ventures>

            

GS Donghae Electric Power Co., Ltd.

   Power generation     KOREA       34.00 %    W       204,000       240,591  

Jamaica Public Service Company Limited

  

Power generation

     JAMAICA       40.00 %        301,910       239,632  

KEPCO SPC Power Corporation (*6)

   Construction and operation of utility plant     PHILIPPINES       75.20 %        94,579       208,306  

Amman Asia Electric Power Company (*6)

  

Power generation

     JORDAN       60.00 %        111,476       177,357  

Datang Chifeng Renewable Power Co., Ltd.

  

Power generation

     CHINA       40.00 %        121,928       166,162  

Rabigh Electricity Company

  

Power generation

    
 SAUDI
ARABIA		  
 		     40.00 %        109,743       105,328  

Kelar S.A (*6)

  

Power generation

     CHILE       65.00 %        78,060       72,824  

RE Holiday Holdings LLC

  

Power generation

     USA       50.00 %        42,948       51,094  

Solar Philippines Calatagan Corporation

  

Power generation

     PHILIPPINES       38.00 %        47,903       47,903  

Daegu Green Power Co., Ltd.

  

Power generation

     KOREA       29.00 %        46,225       41,110  

Chun-cheon Energy Co., Ltd.

  

Power generation

     KOREA       29.90 %        52,700       42,505  

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

  

Power generation

     CHINA       40.00 %        10,858       39,442  

RE Barren Ridge 1 Holdings LLC

  

Power generation

     USA       50.00 %        28,021       41,415  

RE Pioneer Holdings LLC

  

Power generation

     USA       50.00 %        27,891       38,898  

Chile Solar JV SpA

  

Power generation

     CHILE       50.00 %        37,689       36,865  

PT. Tanjung Power Indonesia

  

Power generation

     INDONESIA       35.00 %        746       7,081  

Others (Shuweihat Asia Power Investment B.V. and 38 others)

             330,640       257,012  
         

 

 

    

 

 

  
            1,647,317       1,813,525  
         

 

 

    

 

 

  
        W       3,985,738       5,878,345  
         

 

 

    

 

 

  
(*1)

The effective percentage of ownership is 21.57% including treasury stocks.

 

60

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(1)

Investments in associates and joint ventures as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

(*2)

The effective percentage of ownership is 100%. However, the Government regulates the Group’s ability to make operating and financial decisions over the entity, as the Government requires maintaining arms-length transactions between KPX and the Group’s other subsidiaries. The Group can exercise significant influence by its right to nominate directors to the board of directors of the entity.

(*3)

The effective percentage of ownership is 34.01% including redeemable convertible preferred stock.

(*4)

The effective percentage of ownership is more than 50% but the Group 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.

(*5)

The effective percentage of ownership is more than 50% but the Group does not hold control over the entity according to the shareholders’ agreement. For this reason, the entity is classified as an associate.

(*6)

The effective percentage of ownership is more than 50%. However, according to the shareholders’ agreement, all critical financial and operating decisions must be agreed to by all ownership parties. For this reason, the entities are classified as joint ventures.

 

(2)

The fair value of associates which are actively traded on an open market and have a readily available market value as of

June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won                     

Investees

           June 30,
2019		      December 31,
2018		  

<Associates>

         

Korea Electric Power Industrial Development Co., Ltd.

    W        34,129        33,609  

Korea Gas Corporation

         797,580        910,980  

YTN Co., Ltd.

         17,955        18,900  

SPC Power Corporation

         93,157        72,710  

PT. Bayan Resources TBK

         1,063,401        1,017,601  

 

(3)

Changes in investments in associates and joint ventures for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows :

 

In millions of won                                                      

June 30, 2019

  

Investees

         Beginning
balance		     Acquisition     Disposal     Dividends
received		     Share of
income
(loss)		     Other
comprehen-
sive income
(loss)		     Others     Ending
balance		  

<Associates>

                  

Korea Gas Corporation

   W       1,701,848       —         —         (25,704 )      109,072       506       (775 )      1,784,947  

Gemeng International Energy Co., Ltd.

       647,010       —         —         (11,468 )      7,753       20,725       —         664,020  

PT. Bayan Resources TBK

       511,646       —         —         (71,100 )      14,574       (1,930 )      —         453,190  

Korea Power Exchange

       251,802       —         —         —         13,469       —         —         265,271  

Hyundai Green Power Co., Ltd.

       127,160       —         —         (8,889 )      9,300       —         —         127,571  

S-Power Co., Ltd.

       114,566       —         —         —         1,785       —         —         116,351  

PT. Cirebon Electric Power

       108,628       —         —         —         6,419       2,972       —         118,019  

Dongducheon Dream Power Co., Ltd.

       76,386       —         —         —         (4,546 )      —         —         71,840  

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

       77,165       3,052       —         —         (10,428 )      2,690       —         72,479  

Shin Pyeongtaek Power Co., Ltd.

       67,600       —         —         —         (3,532 )      100       —         64,168  

SPC Power Corporation

       57,558       —         —         (5,055 )      3,801       6,952       45       63,301  

Korea Electric Power Corporation Fund

       47,189       —         —         —         (1,463 )      312       —         46,038  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(3)

Changes in investments in associates and joint ventures for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

YTN Co., Ltd.

       40,338       —         —         (180 )      (1,178 )      11       132       39,123  

Nepal Water & Energy Development Company Private Limited

       30,961       —         —         —         (427 )      1,005       —         31,539  

PT Wampu Electric Power

       31,097       —         —         —         (428 )      1,072       —         31,741  

Others

       173,866       2,533       —         (4,197 )      (422 )      (987 )      (18,031 )      152,762  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  W       4,064,820       5,585       —         (126,593 )      143,749       33,428       (18,629 )      4,102,360  
   

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

In millions of won             

June 30, 2019

  

Investees

          Beginning
balance		      Acquisition      Disposal      Dividends
received		     Share of
income
(loss)		     Other
comprehen-
sive income
(loss)		     Others     Ending
balance		  

<Joint ventures>

                      

GS Donghae Electric Power Co., Ltd.

   W        240,591        —          —          (10,200 )      19,070       —         —         249,461  

Jamaica Public Service Company Limited

        239,632        —          —          —         758       16,603       (8,302 )      248,691  

KEPCO SPC Power Corporation

        208,306        —          —          (17,839 )      21,347       9,077       12       220,903  

Amman Asia Electric Power Company

        177,357        —          —          —         9,915       (5,623 )      —         181,649  

Datang Chifeng Renewable Power Co., Ltd.

        166,162        —          —          —         11,912       5,394       —         183,468  

Rabigh Electricity Company

        105,328        —          —          —         (17,714 )      (4,359 )      (710 )      82,545  

Kelar S.A

        72,824        —          —          —         2,938       (5,893 )      89       69,958  

RE Holiday Holdings LLC

        51,094        —          —          —         (8,151 )      (929 )      —         42,014  

Solar Philippines Calatagan Corporation

        47,903        —          —          (3,026 )      2,341       1,238       —         48,456  

Daegu Green Power Co., Ltd.

        41,110        —          —          —         3,013       —         —         44,123  

Chun-cheon Energy Co., Ltd.

        42,505        —          —          —         (3,188 )      —         —         39,317  

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

        39,442        —          —          —         1,782       1,306       —         42,530  

RE Barren Ridge 1 Holdings LLC

        41,415        —          —          (1,020 )      1,270       170       —         41,835  

RE Pioneer Holdings LLC

        38,898        —          —          (675 )      (5,430 )      67       —         32,860  

Chile Solar JV SpA

        36,865        —          —          —         (609 )      1,063       —         37,319  

PT. Tanjung Power Indonesia

        7,081        26,146        —          —         1,995       (4,051 )      (4 )      31,167  

Others

        257,012        27,002        —          (6,917 )      2,826       (481 )      2,348       281,790  
    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
       1,813,525        53,148        —          (39,677 )      44,075       13,582       (6,567 )      1,878,086  
    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  W        5,878,345        58,733        —          (166,270 )      187,824       47,010       (25,196 )      5,980,446  
    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

62

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(3)

Changes in investments in associates and joint ventures for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

In millions of won             

December 31, 2018

  

Investees

          Beginning
balance		      Acquisition      Disposal      Dividends
received		     Share of
income
(loss)		     Other
comprehen-
sive income
(loss)		     Others     Ending
balance		  

<Associates>

                      

Korea Gas Corporation

   W        1,618,868        —          —          —         107,952       (24,843 )      (129 )      1,701,848  

Gemeng International Energy Co., Ltd.

        649,973        —          —          (11,246 )      15,156       (6,873 )      —         647,010  

PT. Bayan Resources TBK

        451,831        —          —          (33,651 )      74,776       18,690       —         511,646  

Korea Power Exchange

        237,631        —          —          —         16,031       —         (1,860 )      251,802  

Hyundai Green Power Co., Ltd.

        114,806        —          —          (8,889 )      21,243       —         —         127,160  

S-Power Co., Ltd.

        116,945        —          —          —         (2,326 )      —         (53 )      114,566  

PT. Cirebon Electric Power

        97,410        —          —          (4,432 )      9,385       6,265       —         108,628  

Dongducheon Dream Power Co., Ltd.

        53,233        36,971        —          —         (13,824 )      —         6       76,386  

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

        61,779        12,893        —          —         (479 )      2,972       —         77,165  

Shin Pyeongtaek Power Co., Ltd.

        34,903        28,080        —          —         (2,946 )      6,673       890       67,600  

SPC Power Corporation

        52,283        —          —          (9,549 )      4,235       10,578       11       57,558  

Korea Electric Power Corporation Fund

        47,974        —          —          —         (505 )      (280 )      —         47,189  

YTN Co., Ltd.

        40,606        —          —          (180 )      545       (186 )      (447 )      40,338  

Nepal Water & Energy Development Company Private Limited

        30,498        —          —          —         (770 )      1,233       —         30,961  

PT Wampu Electric Power

        29,403        —          —          —         408       1,286       —         31,097  

Others

        199,278        4,339        —          (5,102 )      (12,872 )      (1,367 )      (10,410 )      173,866  
    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  W        3,837,421        82,283        —          (73,049 )      216,009       14,148       (11,992 )      4,064,820  
    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

63

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(3)

Changes in investments in associates and joint ventures for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

In millions of won             

December 31, 2018

  

Investees

          Beginning
balance		      Acquisition      Disposal     Dividends
received		     Share of
income
(loss)		     Other
comprehen-
sive income
(loss)		     Others     Ending
balance		  

<Joint ventures>

                     

GS Donghae Electric Power Co., Ltd.

   W        220,727        —          —         —         20,061       —         (197 )      240,591  

Jamaica Public Service Company Limited

        221,153        —          —         (4,472 )      13,099       9,852       —         239,632  

KEPCO SPC Power Corporation

        217,094        —          —         (41,601 )      44,909       (12,092 )      (4 )      208,306  

Amman Asia Electric Power Company

        145,676        —          —         —         19,604       12,077       —         177,357  

Datang Chifeng Renewable Power Co., Ltd.

        171,055        —          —         (18,859 )      14,808       (842 )      —         166,162  

Rabigh Electricity Company

        99,356        —          —         (29,067 )      13,305       22,371       (637 )      105,328  

Kelar S.A

        67,233        —          —         —         2,732       2,859       —         72,824  

RE Holiday Holdings LLC

        —          42,948        —         (112 )      8,055       203       —         51,094  

Solar Philippines Calatagan Corporation

        —          47,903        —         —         —         —         —         47,903  

Daegu Green Power Co., Ltd.

        42,391        —          —         —         (1,283 )      —         2       41,110  

Chun-cheon Energy Co., Ltd.

        48,118        —          —         —         (5,613 )      —         —         42,505  

Datang KEPCO Chaoyang Renewable Power Co., Ltd.(*)

        11,060        —          —         —         582       (1,214 )      29,014       39,442  

RE Barren Ridge 1 Holdings LLC

        —          28,021        —         (1,114 )      13,994       514       —         41,415  

RE Pioneer Holdings LLC

        —          27,891        —         (979 )      11,585       401       —         38,898  

Chile Solar JV SpA

        —          36,654        —         —         4,453       (5,278 )      1,036       36,865  

PT. Tanjung Power Indonesia

        1,776        —          —         —         3,373       1,928       4       7,081  

Others

        247,636        53,725        (1,632 )      (5,922 )      (16,572 )      10,206       (30,429 )      257,012  
    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
       1,493,275        237,142        (1,632 )      (102,126 )      147,092       40,985       (1,211 )      1,813,525  
    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
  W        5,330,696        319,425        (1,632 )      (175,175 )      363,101       55,133       (13,203 )      5,878,345  
    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(*)

Datang Chaoyang Renewable Power Co., Ltd. was merged with Datang KEPCO Chaoyang Renewable Power Co., Ltd. during the year ended December 31, 2018.

 

64

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

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, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won              

June 30, 2019

  

Investees

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

<Associates>

               

Korea Gas Corporation

    W        37,327,270        28,440,165        13,644,867        511,043  

Gemeng International Energy Co., Ltd.

         6,495,428        4,542,431        939,803        40,885  

PT. Bayan Resources TBK

         1,396,890        795,631        794,128        175,773  

Korea Power Exchange

         314,078        48,807        52,622        9,785  

Hyundai Green Power Co., Ltd.

         1,117,814        677,913        240,854        37,663  

S-Power Co., Ltd.

         788,021        547,156        310,718        3,533  

PT. Cirebon Electric Power

         879,217        450,060        140,128        22,645  

Dongducheon Dream Power Co., Ltd.

         1,442,120        1,187,683        344,785        (11,283 ) 

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

         1,076,492        782,354        —          (41,448 ) 

Shin Pyeongtaek Power Co., Ltd.

         768,559        607,061        —          (726 ) 

SPC Power Corporation

         255,687        25,094        32,240        20,076  

Korea Electric Power Corporation Fund

         47,021        91        466        144  

YTN Co., Ltd.

         275,727        93,151        55,495        (4,639 ) 

Nepal Water & Energy Development Company Private Limited

         55,512        3,297        —          (514 ) 

PT Wampu Electric Power

         226,317        157,314        8,383        2,923  

<Joint ventures>

               

GS Donghae Electric Power Co., Ltd.

         2,277,858        1,544,149        371,586        56,088  

Jamaica Public Service Company Limited

         1,418,895        828,719        504,147        6,567  

KEPCO SPC Power Corporation

         325,270        31,515        91,877        28,651  

Amman Asia Electric Power Company

         818,297        515,402        11,361        16,535  

Datang Chifeng Renewable Power Co., Ltd.

         782,540        323,747        70,488        29,334  

Rabigh Electricity Company

         2,468,920        2,078,516        84,140        (39,784 ) 

Kelar S.A

         669,129        565,603        45,971        8,042  

RE Holiday Holdings LLC

         332,854        248,826        2,489        (3,538 ) 

Solar Philippines Calatagan Corporation

         100,257        50,885        9,857        6,161  

Daegu Green Power Co., Ltd.

         576,391        498,711        164,645        —    

Chun-cheon Energy Co., Ltd.

         626,450        494,968        172,246        (10,455 ) 

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

         195,919        89,594        14,141        4,456  

RE Barren Ridge 1 Holdings LLC

         215,424        131,753        2,227        924  

RE Pioneer Holdings LLC

         250,094        184,374        2,775        (1,728 ) 

Chile Solar JV SpA

         75,255        618        196        (1,219 ) 

PT. Tanjung Power Indonesia

         593,092        504,045        50,675        6,178  

 

65

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

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, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

In millions of won             

December 31, 2018

  

Investees

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

<Associates>

              

Korea Gas Corporation

   W        39,689,692        31,186,488        26,185,038        523,480  

Gemeng International Energy Co., Ltd.

        7,155,937        4,420,561        1,921,367        120,558  

PT. Bayan Resources TBK

        1,388,199        566,890        1,707,387        521,666  

Korea Power Exchange

        304,318        52,516        108,571        16,031  

Hyundai Green Power Co., Ltd.

        1,127,220        688,738        501,798        66,925  

S-Power Co., Ltd.

        825,354        588,022        551,378        (6,185 ) 

PT. Cirebon Electric Power

        876,069        481,061        274,962        33,144  

Dongducheon Dream Power Co., Ltd.

        1,512,510        1,244,178        828,430        (22,864 ) 

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

        1,015,013        702,187        —          (1,214 ) 

Shin Pyeongtaek Power Co., Ltd.

        674,100        511,582        —          682  

SPC Power Corporation

        225,599        16,819        50,317        37,355  

Korea Electric Power Corporation Fund

        48,280        176        1,315        (649 ) 

YTN Co., Ltd.

        286,964        98,682        132,382        1,587  

Nepal Water & Energy Development Company Private Limited

        55,453        4,249        —          (984 ) 

PT Wampu Electric Power

        223,009        155,406        13,463        4,624  

<Joint ventures>

              

GS Donghae Electric Power Co., Ltd.

        2,259,129        1,551,509        787,425        58,976  

Jamaica Public Service Company Limited

        1,396,421        827,837        992,677        32,507  

KEPCO SPC Power Corporation

        312,093        35,091        184,046        59,543  

Amman Asia Electric Power Company

        792,532        496,791        23,676        32,674  

Datang Chifeng Renewable Power Co., Ltd.

        751,551        336,024        117,270        37,159  

Rabigh Electricity Company

        2,448,690        2,003,050        274,184        38,789  

Kelar S.A

        626,206        518,135        87,507        8,587  

RE Holiday Holdings LLC

        334,742        232,553        9,451        1,319  

Solar Philippines Calatagan Corporation

        121,650        51,219        16,689        8,732  

Daegu Green Power Co., Ltd.

        591,263        523,972        291,734        (4,424 ) 

Chun-cheon Energy Co., Ltd.

        666,050        523,904        320,950        (19,133 ) 

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

        190,951        92,347        18,824        2,557  

RE Barren Ridge 1 Holdings LLC

        221,304        138,473        10,567        8,625  

RE Pioneer Holdings LLC

        252,512        174,717        12,364        6,544  

Chile Solar JV SpA

        73,740        10        73        8,906  

PT. Tanjung Power Indonesia

        505,551        485,321        109,029        9,717  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(5)

Financial information of associates and joint ventures reconciled to the Group’s investments in consolidated financial statements as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won  

June 30, 2019

  

Investees

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

<Associates>

                

Korea Gas Corporation

   W       8,887,105       21.57 %      1,916,949       —         —         (132,002 )      1,784,947  

Gemeng International Energy Co., Ltd.

       1,952,997       34.00 %      664,020       —         —         —         664,020  

PT. Bayan Resources TBK

       601,259       20.00 %      120,252       409,318       —         (76,380 )      453,190  

Korea Power Exchange

       265,271       100.00 %      265,271       —         —         —         265,271  

Hyundai Green Power Co., Ltd.

       439,901       29.00 %      127,571       —         —         —         127,571  

S-Power Co., Ltd.

       240,865       49.00 %      118,024       —         (1,673 )      —         116,351  

PT. Cirebon Electric Power

       429,157       27.50 %      118,019       —         —         —         118,019  

Dongducheon Dream Power Co., Ltd.

       254,437       34.01 %      86,534       1,757       (3,869 )      (12,582 )      71,840  

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

       294,138       25.00 %      73,534       305       (1,071 )      (289 )      72,479  

Shin Pyeongtaek Power Co., Ltd.

       161,498       40.00 %      64,599       12,800       (13,231 )      —         64,168  

SPC Power Corporation

       230,593       38.00 %      87,625       —         —         (24,324 )      63,301  

Korea Electric Power Corporation Fund

       46,930       98.09 %      46,034       —         —         4       46,038  

YTN Co., Ltd.

       182,576       21.43 %      39,123       —         —         —         39,123  

Nepal Water & Energy Development Company Private Limited

       52,215       57.67 %      30,112       972       —         455       31,539  

PT Wampu Electric Power

       69,003       46.00 %      31,741       —         —         —         31,741  

<Joint ventures>

                

GS Donghae Electric Power Co., Ltd.

       733,709       34.00 %      249,461       —         —         —         249,461  

Jamaica Public Service Company Limited

       590,176       40.00 %      236,070       (80,161 )      —         92,781       248,691  

KEPCO SPC Power Corporation

       293,755       75.20 %      220,903       —         —         —         220,903  

Amman Asia Electric Power Company

       302,895       60.00 %      181,737       —         —         (88 )      181,649  

Datang Chifeng Renewable Power Co., Ltd.

       458,793       40.00 %      183,517       —         —         (49 )      183,468  

Rabigh Electricity Company

       390,404       40.00 %      156,162       —         (70,977 )      (2,640 )      82,545  

Kelar S.A

       103,526       65.00 %      67,292       2,666       —         —         69,958  

RE Holiday Holdings LLC

       84,028       50.00 %      42,014       —         —         —         42,014  

Solar Philippines Calatagan Corporation

       49,372       38.00 %      18,761       29,695       —         —         48,456  

Daegu Green Power Co., Ltd.

       77,680       29.00 %      22,527       84       —         21,512       44,123  

Chun-cheon Energy Co., Ltd.

       131,482       29.90 %      39,314       3       —         —         39,317  

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

       106,325       40.00 %      42,530       —         —         —         42,530  

RE Barren Ridge 1 Holdings LLC

       83,671       50.00 %      41,835       —         —         —         41,835  

RE Pioneer Holdings LLC

       65,720       50.00 %      32,860       —         —         —         32,860  

Chile Solar JV SpA

       74,637       50.00 %      37,319       —         —         —         37,319  

PT. Tanjung Power Indonesia

       89,047       35.00 %      31,167       —         —         —         31,167  

 

(*)

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

 

67

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(5)

Financial information of associates and joint ventures reconciled to the Group’s investments in consolidated financial statements as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

In millions of won  

December 31, 2018

  

Investees

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

<Associates>

                

Korea Gas Corporation

   W       8,503,204       21.57 %      1,834,141       —         —         (132,293 )      1,701,848  

Gemeng International Energy Co., Ltd.

       2,735,376       34.00 %      930,028       —         —         (283,018 )      647,010  

PT. Bayan Resources TBK

       821,309       20.00 %      164,262       423,763       —         (76,379 )      511,646  

Korea Power Exchange

       251,802       100.00 %      251,802       —         —         —         251,802  

Hyundai Green Power Co., Ltd.

       438,482       29.00 %      127,160       —         —         —         127,160  

S-Power Co., Ltd.

       237,332       49.00 %      116,293       —         (1,727 )      —         114,566  

PT. Cirebon Electric Power

       395,008       27.50 %      108,628       —         —         —         108,628  

Dongducheon Dream Power Co., Ltd.

       268,332       34.01 %      91,260       1,757       (4,049 )      (12,582 )      76,386  

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

       312,826       25.00 %      78,207       253       (1,006 )      (289 )      77,165  

Shin Pyeongtaek Power Co., Ltd.

       162,518       40.00 %      65,007       12,800       (10,207 )      —         67,600  

SPC Power Corporation

       208,780       38.00 %      79,336       —         —         (21,778 )      57,558  

Korea Electric Power Corporation Fund

       48,104       98.09 %      47,185       —         —         4       47,189  

YTN Co., Ltd.

       188,282       21.43 %      40,346       —         (6 )      (2 )      40,338  

Nepal Water & Energy Development Company Private Limited

       51,204       57.67 %      29,529       972       —         460       30,961  

PT Wampu Electric Power

       67,603       46.00 %      31,097       —         —         —         31,097  

<Joint ventures>

                

GS Donghae Electric Power Co., Ltd.

       707,620       34.00 %      240,591       —         —         —         240,591  

Jamaica Public Service Company Limited

       568,584       40.00 %      227,434       (80,161 )      —         92,359       239,632  

KEPCO SPC Power Corporation

       277,002       75.20 %      208,306       —         —         —         208,306  

Amman Asia Electric Power Company

       295,741       60.00 %      177,445       —         —         (88 )      177,357  

Datang Chifeng Renewable Power Co., Ltd.

       415,527       40.00 %      166,211       —         —         (49 )      166,162  

Rabigh Electricity Company

       445,640       40.00 %      178,256       —         (70,977 )      (1,951 )      105,328  

Kelar S.A

       108,071       65.00 %      70,246       2,470       —         108       72,824  

RE Holiday Holdings LLC

       102,189       50.00 %      51,094       —         —         —         51,094  

Solar Philippines Calatagan Corporation

       70,431       38.00 %      26,764       21,139       —         —         47,903  

Daegu Green Power Co., Ltd.

       67,291       29.00 %      19,514       84       —         21,512       41,110  

Chun-cheon Energy Co., Ltd.

       142,146       29.90 %      42,502       3       —         —         42,505  

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

       98,604       40.00 %      39,442       —         —         —         39,442  

RE Barren Ridge 1 Holdings LLC

       82,831       50.00 %      41,415       —         —         —         41,415  

RE Pioneer Holdings LLC

       77,795       50.00 %      38,898       —         —         —         38,898  

Chile Solar JV SpA

       73,730       50.00 %      36,865       —         —         —         36,865  

PT. Tanjung Power Indonesia

       20,230       35.00 %      7,081       —         —         —         7,081  

 

(*)

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

 

68

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(6)

As of June 30, 2019 and December 31, 2018, 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, 2019      December 31, 2018  
           Unrecognized
equity interest		      Accumulated
unrecognized
equity interest		      Unrecognized
equity interest		      Accumulated
unrecognized
equity interest		  

Hadong Mineral Fiber Co., Ltd.

    W       —          2        —          2  

PT. Mutiara Jawa

        —          —          (746 )       —    

Eurasia Energy Holdings

        6        185        7        179  

Gunsan Bio Energy Co., Ltd.

        592        2,794        916        2,202  

Daehan Wind Power PSC

        —          —          (412 )       —    

Hyundai Energy Co., Ltd.

        4,805        30,646        25,841        25,841  

Nghi Son 2 Power LLC

        66,998        108,657        41,659        41,659  

Samcheok Eco Materials Co., Ltd.

        (35 )       1,250        1,285        1,285  

Naepo Green Energy Co., Ltd.

        5,171        5,171        —          —    

 

(7)

As of June 30, 2019, shareholders’ agreements on investments in associates and joint ventures that may cause future economic resource 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 Group provided a performance guarantee on this agreement.

 

  (ii)

Hyundai Energy Co., Ltd.

The Group 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 Group.

 

  (iii)

Taebaek Wind Power Co., Ltd.

In the case where 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 Group acquires 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 the case where 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 Group acquires 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.

 

  (v)

Jeongam Wind Power Co., Ltd.

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

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(7)

As of June 30, 2019, shareholders’ agreements on investments in associates and joint ventures that may cause future economic resource or cash outflows are as follows, continued:

 

  (vi)

Daejung Offshore Wind Power Co., Ltd.

In the case where Doosan 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 Group is obligated to acquire those shares after evaluating the economic feasibility of the facilities installed by Doosan Heavy Industries Co., Ltd..

 

  (vii)

Hyundai Green Power Co., Ltd.

As of June 30, 2019, Hyundai Green Power Co., Ltd., an associate of the Group, which engages in the byproduct gas power generating business, entered into a project financing agreement with a limit of W852.1 billion with Korea Development Bank and others. At a certain period in the future, the Group has call option against the financial investors (Korea Development Bank and others) and also has an obligation to purchase its shares when claimed by the financial investors. At a certain period in the future, the Group has put option against Hyundai Steel Company and a third party designated by Hyundai Steel Company (collectively, “Hyundai Steel Group”), 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 upon request from Hyundai Steel Company.

 

  (viii)

YeongGwang Yaksu Wind Electric. Co., Ltd

As of June 30, 2019, YeongGwang Yaksu Wind Electric. Co., Ltd, an associate of the Group, which engages in the wind power generating business, entered into a project financing agreement with a limit of W46 billion with IBK and others.

 

  (ix)

Daegu Green Power Co., Ltd.

In relation to the interest of Daegu Green Power Co., Ltd. held by the financial investors, the Group has rights to purchase all the shares at the yield-based transfer amount agreed upon between the shareholders after 5, 10 and 13 years from the date of the investment.

In relation to the interest of Daegu Green Power Co. Ltd. held by Lotte Engineering & Construction Co., the Group has the right to purchase all or part of the shares at the yield-based transferring amount agreed upon between the shareholders.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(8)

Significant restrictions on the Group’s power over associates or joint ventures as of June 30, 2019 are as follows:

 

Company

   

Nature and extent of any significant restrictions

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.    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. Shares cannot be wholly or partially transferred without prior written consent of financial institutions is obtained.
KNH Solar Co., Ltd.    Principal and interest, dividends to shareholders cannot be paid without written consent of financial institutions.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

19.

Property, Plant and Equipment

 

(1)

Property, plant and equipment as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Acquisition
cost		      Government
grants		     Accumulated
depreciation		     Accumulated
impairment
losses		     Book
value		  

Land

    W       13,710,003        (21,968 )      —         (27,350 )      13,660,685  

Buildings

        19,633,487        (61,014 )      (7,889,221 )      (3,669 )      11,679,583  

Structures

        67,656,684        (186,805 )      (24,601,736 )      (8,399 )      42,859,744  

Machinery

        83,663,776        (164,583 )      (36,604,839 )      (439,350 )      46,455,004  

Ships

        3,654        —         (3,403 )      —         251  

Vehicles

        282,417        (3,256 )      (224,189 )      (115 )      54,857  

Equipment

        1,603,208        (331 )      (1,267,157 )      (42 )      335,678  

Tools

        1,097,504        (532 )      (923,816 )      (39 )      173,117  

Construction-in-progress

        31,495,229        (59,532 )      —         (208,045 )      31,227,652  

Right-of-use assets

        7,173,402        —         (2,466,378 )      —         4,707,024  

Asset retirement costs

        9,458,896        —         (3,919,487 )      (146,423 )      5,392,986  

Others

        12,572,722        —         (9,953,411 )      —         2,619,311  
    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  
   W       248,350,982        (498,021 )      (87,853,637 )      (833,432 )      159,165,892  
    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

In millions of won          December 31, 2018  
           Acquisition
cost		      Government
grants		     Accumulated
depreciation		     Accumulated
impairment
losses		     Book
value		  

Land

    W       13,554,292        (21,968 )      —         —         13,532,324  

Buildings

        19,431,536        (63,189 )      (7,494,176 )      (3,669 )      11,870,502  

Structures

        66,335,506        (190,854 )      (23,615,312 )      (8,399 )      42,520,941  

Machinery

        82,047,823        (173,242 )      (34,151,878 )      (439,350 )      47,283,353  

Ships

        3,655        —         (3,353 )      —         302  

Vehicles

        287,954        (4,220 )      (215,649 )      (116 )      67,969  

Equipment

        1,558,309        (418 )      (1,175,408 )      (42 )      382,441  

Tools

        1,073,145        (675 )      (880,432 )      (38 )      192,000  

Construction-in-progress

        29,026,880        (54,740 )      —         (205,713 )      28,766,427  

Finance lease assets

        2,390,701        (26 )      (2,194,971 )      —         195,704  

Asset retirement costs

        9,424,181        —         (3,706,004 )      (146,423 )      5,571,754  

Others

        11,875,394        —         (9,515,917 )      —         2,359,477  
    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  
   W       237,009,376        (509,332 )      (82,953,100 )      (803,750 )      152,743,194  
    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

19.

Property, Plant and Equipment, Continued

 

(2)

Changes in property, plant and equipment for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Beginning
balance		     Effect of
change in
accounting
policy		     Acquisitions     Disposals     Depreciation     Impairment (*)     Others     Ending
balance		  

Land

    W       13,554,292       —         85,873       (24,014 )      —         (27,350 )      93,852       13,682,653  

(Government grants)

        (21,968 )      —         —         —         —         —         —         (21,968 ) 

Buildings

        11,933,691       —         4,453       (5,356 )      (393,414 )      —         201,223       11,740,597  

(Government grants)

        (63,189 )      —         (592 )      —         2,802       —         (35 )      (61,014 ) 

Structures

        42,711,795       —         147       (236,780 )      (1,133,177 )      —         1,704,564       43,046,549  

(Government grants)

        (190,854 )      —         —         888       4,662       —         (1,501 )      (186,805 ) 

Machinery

        47,456,595       —         124,973       (125,220 )      (2,628,079 )      —         1,791,318       46,619,587  

(Government grants)

        (173,242 )      —         —         260       8,716       —         (317 )      (164,583 ) 

Ships

        302       —         —         —         (51 )      —         —         251  

Vehicles

        72,189       —         850       (52 )      (15,812 )      —         938       58,113  

(Government grants)

        (4,220 )      —         (45 )      —         1,078       —         (69 )      (3,256 ) 

Equipment

        382,859       —         16,165       (36 )      (100,206 )      —         37,227       336,009  

(Government grants)

        (418 )      —         (54 )      —         141       —         —         (331 ) 

Tools

        192,675       —         6,459       (7 )      (42,843 )      —         17,365       173,649  

(Government grants)

        (675 )      —         —         —         143       —         —         (532 ) 

Construction-in-progress

        28,821,167       —         5,740,613       (42 )      —         (2,335 )      (3,272,219 )      31,287,184  

(Government grants)

        (54,740 )      —         (6,583 )      —         —         —         1,791       (59,532 ) 

Finance lease assets

        195,730       (195,415 )      —         —         (14 )      —         (301 )      —    

(Government grants)

        (26 )      26       —         —         —         —         —         —    

Right-of-use assets

        —         4,828,795       151,800       —         (273,570 )      —         (1 )      4,707,024  

Asset retirement costs

        5,571,754       —         —         —         (314,271 )      —         135,503       5,392,986  

Others

        2,359,477       —         754       (3,959 )      (419,436 )      —         682,475       2,619,311  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   W       152,743,194       4,633,406       6,124,813       (394,318 )      (5,303,331 )      (29,685 )      1,391,813       159,165,892  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(*)

KEPCO Bylong Australia Pty., Ltd., 100% owned subsidiary, performed an impairment test over the land and the Group recognized the amount of the carrying amount in excess of its recoverable amount as impairment loss.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

19.

Property, Plant and Equipment, Continued

 

(2)

Changes in property, plant and equipment for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

In millions of won          December 31, 2018  
           Beginning
balance		     Acquisitions     Disposals     Depreciation     Impairment (*1)     Others     Ending
balance		  

Land

    W       13,318,542       2,254       (18,240 )      —         —         251,736       13,554,292  

(Government grants)

        (21,968 )      —         —         —         —         —         (21,968 ) 

Buildings

        12,053,526       10,156       (8,545 )      (767,845 )      (1,896 )      648,295       11,933,691  

(Government grants)

        (63,539 )      (4,213 )      31       6,836       —         (2,304 )      (63,189 ) 

Structures

        44,104,778       11,123       (587,278 )      (2,476,278 )      (360 )      1,659,810       42,711,795  

(Government grants)

        (196,414 )      —         3,270       10,292       —         (8,002 )      (190,854 ) 

Machinery (*2)

        46,875,798       460,676       (250,159 )      (4,973,252 )      (393,839 )      5,737,371       47,456,595  

(Government grants)

        (183,188 )      (1,185 )      823       18,099       —         (7,791 )      (173,242 ) 

Ships

        403       —         —         (103 )      —         2       302  

Vehicles

        81,038       2,774       (402 )      (32,620 )      —         21,399       72,189  

(Government grants)

        (6,322 )      (45 )      —         2,146       —         1       (4,220 ) 

Equipment

        420,672       36,884       (265 )      (187,821 )      (36 )      113,425       382,859  

(Government grants)

        (761 )      (22 )      —         365       —         —         (418 ) 

Tools

        200,663       12,331       (268 )      (83,283 )      (6 )      63,238       192,675  

(Government grants)

        (1,027 )      (44 )      —         432       —         (36 )      (675 ) 

Construction-in-progress

        25,572,541       11,749,397       (47,463 )      —         (167,603 )      (8,285,705 )      28,821,167  

(Government grants)

        (49,084 )      (23,895 )      —         —         —         18,239       (54,740 ) 

Finance lease assets

        297,679       —         —         (101,888 )      —         (61 )      195,730  

(Government grants)

        (27 )      —         —         1       —         —         (26 ) 

Asset retirement costs

        6,039,484       1,988       —         (610,435 )      (146,424 )      287,141       5,571,754  

Others

        2,439,620       8,691       (715 )      (709,579 )      —         621,460       2,359,477  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   W       150,882,414       12,266,870       (909,211 )      (9,904,933 )      (710,164 )      1,118,218       152,743,194  
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(*1)

Korea Hydro & Nuclear Power Co., Ltd. and Korea Western Power Co., Ltd., 100% owned subsidiaries, have determined that there are impairment indicators for the shutdowns of certain power generation units and fire, and performed an impairment test over the individual assets. As a result, the Group recognized the amount of the carrying amount in excess of its recoverable amount as impairment loss in the consolidated statements of comprehensive income.

(*2)

As described in Note 27, the amount of acquisition of machinery includes W204,787 million of that the Group believes the possibility of economic outflow is probable on the request for additional construction costs of Hyundai E&C, GS Engineering & Construction Corp. and Hansol SeenTec Co., Ltd..

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

20.

Investment Properties

 

(1)

Investment properties as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Acquisition cost      Government grants      Accumulated
depreciation		      Book value  

Land

    W       144,543        —          —          144,543  

Buildings

        74,638        (14 )       (39,830 )       34,794  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       219,181        (14 )       (39,830 )       179,337  
    

 

 

     

 

 

     

 

 

     

 

 

  
In millions of won          December 31, 2018  
           Acquisition cost      Government grants      Accumulated
depreciation		      Book value  

Land

    W       139,940        —          —          139,940  

Buildings

        34,801        (50 )       (15,132 )       19,619  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       174,741        (50 )       (15,132 )       159,559  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

(2)

Changes in investment properties for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Beginning balance      Depreciation      Others (*)      Ending balance  

Land

    W       139,940        —          4,603        144,543  

Buildings

        19,669        (4,291 )       19,430        34,808  

(Government grants)

        (50 )       —          36        (14 ) 
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       159,559        (4,291 )       24,069        179,337  
    

 

 

     

 

 

     

 

 

     

 

 

  
In millions of won          December 31, 2018  
           Beginning balance      Depreciation      Others      Ending balance  

Land

    W       264,205        —          (124,265 )       139,940  

Buildings

        20,592        (924 )       1        19,669  

(Government grants)

        (83 )       1        32        (50 ) 
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       284,714        (923 )       (124,232 )       159,559  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

(*)

As described in Note 42, the Group reclassified land and buildings amounting to W2,765 and W19,396, respectively, from assets held-for-sale to investment properties during the six-month period ended June 30, 2019.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

20.

Investment Properties, Continued

 

(3)

Income and expenses related to investment properties for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019      June 30, 2018  
           Three-month
period ended		      Six-month
period ended		      Three-month
period ended		      Six-month
period ended		  

Rental income

    W       2,872        5,079        1,819        4,680  

Operating and maintenance expenses related to rental income

        (235 )       (479 )       (218 )       (508 ) 

Operating and maintenance expenses not related to rental Income

        (3,812 )       (3,812 )       —          —    
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       (1,175 )       788        1,601        4,172  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

(4)

Fair value of investment properties as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  
           Book value      Fair value      Book value      Fair value  

Land

    W       144,543        222,797        139,940        167,178  

Buildings

        34,794        44,541        19,619        23,276  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       179,337        267,338        159,559        190,454  
    

 

 

     

 

 

     

 

 

     

 

 

  

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 KIFRS transition date (January 1, 2010).

 

(5)

All of the Group’s investment property is held under freehold interests.

 

21.

Construction Contracts

 

(1)

Changes in total contract amount in which revenue is not yet recognized for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Beginning
balance		      Increase (decrease)
(*)		      Recognized as
revenue		      Ending
balance		  

Nuclear power plant construction in UAE and others

    W       3,620,787        161,174        (543,715 )       3,238,246  

 

(*)

For the six-month period ended June 30, 2019, the increased balance of contracts from new orders and foreign exchange impact is W181,774 million and the decreased balance of contracts due to changes in scope of construction work is W20,600 million.

 

In millions of won          December 31, 2018  
           Beginning
balance		      Increase (decrease)
(*)		      Recognized as
revenue		      Ending
balance		  

Nuclear power plant construction in UAE and others

    W       4,176,595        1,186,584        (1,742,391 )       3,620,788  

 

(*)

For the year ended December 31, 2018, the increased balance of contracts from new orders and foreign exchange impact is W1,207,097 million and the decreased balance of contracts due to changes in scope of construction work is W20,513 million.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

21.

Construction Contracts, Continued

 

(2)

Accumulated earned revenue, costs and others related to the Group’s construction contracts as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Accumulated
earned revenue		      Accumulated
costs		      Accumulated
profit		  

Nuclear power plant construction in UAE and others

    W       20,264,764        19,077,921        1,186,843  
In millions of won          December 31, 2018  
           Accumulated
earned revenue		      Accumulated
costs		      Accumulated
profit		  

Nuclear power plant construction in UAE and others

    W       19,801,220        18,651,188        1,150,032  

 

(3)

Gross amount due from customers recognized as assets and due to customers recognized as liabilities for contract work as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  
           Assets (*1)      Liabilities (*2)      Assets (*1)      Liabilities (*2)  

Nuclear power plant construction in UAE and others

    W       58,748        328,835        36,232        350,460  

 

(*1)

Included in trade and other receivables, net, in the consolidated statements of financial position.

(*2)

Included in non-financial liabilities in the consolidated statements of financial position.

 

(4)

The contract with BOC (purchaser) states that disclosure of information related to UAE nuclear power plant construction projects such as contract date, contractual completion date, completion progress, unbilled construction, impairment losses, etc. are not allowed without consent from the purchaser. BOC did not agree to disclose such information. Accordingly, the Group did not disclose such information based on KIFRS 1115 129.2(2) as it is probable that ENEC may file a lawsuit for breach of contract if the Group does so. Also, the Group 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 Group’s construction services for the six-month period ended June 30, 2019 are as follows:

 

In millions of won          June 30, 2019  
                                    Assets      Receivables from
construction contracts		         
           Expected
loss on
construction
contracts		      Changes in
estimates of
contract
revenue and
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		      Changes in
estimated
total
contract
costs		  

Transmission and distribution

    W       —          23,054       16,072       6,982       24,454        —          —          —          —    

Plant maintenance & engineering service

        93        (1,200 )      (233 )      (967 )      34,294        23        35,667        9,712        2,254  
    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W       93        21,854       15,839       6,015       58,748        23        35,667        9,712        2,254  
    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

22.

Intangible Assets other than Goodwill

 

(1)

Intangible assets as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Acquisition
cost		      Government
grants		     Accumulated
amortization		     Accumulated
impairment
losses		     Book
value		  

Software

    W       665,412        (308 )      (506,068 )      —         159,036  

Licenses and franchises

        3,398        —         (3,398 )      —         —    

Copyrights, patents rights and other industrial rights

        98,917        —         (35,085 )      —         63,832  

Mining rights

        603,276        —         (26,384 )      (61,696 )      515,196  

Development expenditures

        900,703        (1,690 )      (803,171 )      —         95,842  

Intangible assets under development

        54,121        (10,964 )      —         (12,845 )      30,312  

Usage rights of donated assets and others

        582,825        —         (380,287 )      —         202,538  

Leasehold rights

        25,989        —         (20,284 )      —         5,705  

Greenhouse gas emissions rights

        137,790        —         —         —         137,790  

Others

        375,585        —         (113,600 )      (11,917 )      250,068  
    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  
   W       3,448,016        (12,962 )      (1,888,277 )      (86,458 )      1,460,319  
    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  
In millions of won          December 31, 2018  
           Acquisition
cost		      Government
grants		     Accumulated
amortization		     Accumulated
impairment
losses		     Book
value		  

Software

    W       619,662        (420 )      (461,981 )      —         157,261  

Licenses and franchises

        3,398        —         (3,398 )      —         —    

Copyrights, patents rights and other industrial rights

        97,033        —         (29,921 )      —         67,112  

Mining rights

        561,945        —         (27,421 )      —         534,524  

Development expenditures

        878,462        (2,110 )      (785,976 )      —         90,376  

Intangible assets under development

        83,381        (10,564 )      —         (12,845 )      59,972  

Usage rights of donated assets and others

        459,682        —         (372,671 )      —         87,011  

Leasehold rights

        25,482        —         (19,930 )      —         5,552  

Greenhouse gas emissions rights

        7,050        —         —         —         7,050  

Others

        333,621        —         (104,486 )      (12,051 )      217,084  
    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  
   W       3,069,716        (13,094 )      (1,805,784 )      (24,896 )      1,225,942  
    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

22.

Intangible Assets other than Goodwill, Continued

 

(2)

Changes in intangible assets for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Beginning
balance		     Acquisitions      Disposals     Amortization     Impairment
(*)		     Others     Ending
balance		  

Software

    W       157,681       10,277        —         (42,570 )      —         33,956       159,344  

(Government grants)

        (420 )      —          —         112       —         —         (308 ) 

Copyrights, patents rights and other industrial rights

        67,112       88        —         (4,516 )      —         1,148       63,832  

Mining rights

        534,524       21,523        —         (5,867 )      (61,696 )      26,712       515,196  

Development expenditures

        92,486       438        —         (13,755 )      —         18,363       97,532  

(Government grants)

        (2,110 )      —          —         420       —         —         (1,690 ) 

Intangible assets under development

        70,536       14,229        —         —         —         (43,489 )      41,276  

(Government grants)

        (10,564 )      —          —         —         —         (400 )      (10,964 ) 

Usage rights of donated assets and others

        87,011       —          —         (6,936 )      —         122,463       202,538  

(Government grants)

        —         —          —         —         —         —         —    

Leasehold rights

        5,552       —          —         (354 )      —         507       5,705  

Greenhouse gas emissions rights

        7,050       63,358        —         —         —         67,382       137,790  

Others

        217,084       46,182        (164 )      (8,929 )      59       (4,164 )      250,068  

(Government grants)

        —         —          —         —         —         —         —    
    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   W       1,225,942       156,095        (164 )      (82,395 )      (61,637 )      222,478       1,460,319  
    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(*)

KEPCO Australia Pty., Ltd., 100% owned subsidiary, performed an impairment test over the mining rights and the Group recognized the amount of the carrying amount in excess of its recoverable amount as impairment loss.

 

In millions of won          December 31, 2018  
           Beginning
balance		     Acquisitions      Disposals     Amortization     Impairment
(*)		     Others     Ending
balance		  

Software

    W       125,891       10,861        (1 )      (53,755 )      —         74,685       157,681  

(Government grants)

        (486 )      —          —         254       —         (188 )      (420 ) 

Copyrights, patents rights and other industrial rights

        23,981       28        —         (8,665 )      (13 )      51,781       67,112  

Mining rights

        539,633       29,687        —         (3,186 )      —         (31,610 )      534,524  

Development expenditures

        84,518       823        —         (27,100 )      —         34,245       92,486  

(Government grants)

        (3,702 )      —          —         1,591       —         1       (2,110 ) 

Intangible assets under development

        139,910       67,383        —         —         (8,912 )      (127,845 )      70,536  

(Government grants)

        (10,540 )      —          —         —         799       (823 )      (10,564 ) 

Usage rights of donated assets and others

        101,658       —          —         (13,307 )      —         (1,340 )      87,011  

(Government grants)

        (11 )      —          —         11       —         —         —    

Leasehold rights

        5,044       —          —         (667 )      —         1,175       5,552  

Greenhouse gas emissions rights

        —         —          —         —         —         7,050       7,050  

Others

        181,225       1,805        (8 )      (14,114 )      (14 )      48,190       217,084  

(Government grants)

        —         —          —         —         —         —         —    
    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   W       1,187,121       110,587        (9 )      (118,938 )      (8,140 )      55,321       1,225,942  
    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

(*)

W8,104 million of impairment loss on the intangible assets under development in relation to the technology development of heat transfer tube owned by KEPCO Nuclear Fuel Co., Ltd., 96.36% owned subsidiary, is included.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

22.

Intangible Assets other than Goodwill, Continued

 

(3)

Significant specific intangible assets as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won and thousands of Australian dollars

June 30, 2019

Type

   

Description

    Currency      Amount     

Remaining useful lives

Software

    ERP system and others      KRW        696     

1 year and 8 months ~

1 year and 10 months

   Electricity sales information system      KRW        5,651      3 years and 6 months

Copyrights, patents rights and other industrial rights

    Smart technology verification and standard design project conducting right      KRW        8,021      3 years and 3 months
   Contributions to ARP NRC DC      KRW        45,504      8 years and 6 months

Mining rights

    Mining right of Bylong mine      AUD        330,046      —  (*)

Development expenditures

    Electricity sales information system      KRW        18,810      2 years and 9 months

Usage rights of donated assets and others

   

Sejong Haengbogdosi sharing charge

Dangjin power plant load facility usage right

     

 KRW

KRW

  

 

     

 33,654

11,018

  

 

   

7 years and 5 months

1 year and 9 months

Others

    Occupancy and use of public waters      KRW        95,152      17 years and 5 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, 2018

Type

   

Description

    Currency      Amount     

Remaining useful lives

Software

    ERP system and others      KRW        783     

2 years and 2 months ~

2 years and 4 months

   Electricity sales information system      KRW        6,477      4 years

Copyrights, patents rights and other industrial rights

    Smart technology verification and standard design project conducting right      KRW        9,256      3 years and 9 months
   Contributions to ARP NRC DC      KRW        46,594      9 years

Mining rights

    Mining right of Bylong mine      AUD        401,225      —  (*)

Development expenditures

    Electricity sales information system      KRW        22,337      3 years and 3 months

Usage rights of donated assets and others

   

Sejong Haengbogdosi sharing charge

Dangjin power plant load facility usage right

     

 KRW

KRW

  

 

     
 35,923
14,167		  
 		   

7 years and 11 months

2 years and 3 months

Others

    Occupancy and use of public waters      KRW        97,858      17 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, 2019 and 2018, the Group recognized research and development expenses of W311,088 million and W327,931 million, respectively.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

23.

Trade and Other Payables

Trade and other payables as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  
           Current      Non-current      Current      Non-current  

Trade payables

    W       2,007,616        —          3,411,830        —    

Other trade payables

        1,838,336        2,675,067        1,630,860        2,626,876  

Accrued expenses

        1,125,310        2,031        1,127,796        1,859  

Leasehold deposits received

        1,626        1,654        1,949        1,084  

Other deposits received

        165,845        70,527        169,317        72,453  

Lease liabilities

        621,587        4,329,710        57,200        226,606  

Dividends payable

        7,498        —          6,443        —    

Others (*)

        —          12,818        —          12,818  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       5,767,818        7,091,807        6,405,395        2,941,696  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

(*)

Details of others as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  
           Current      Non-current      Current      Non-current  

Advance received from local governments

    W       —          5,818        —          5,818  

Others

        —          7,000        —          7,000  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       —          12,818        —          12,818  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

24.

Borrowings and Debt Securities

 

(1)

Borrowings and debt securities as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won        June 30, 2019        December 31, 2018  

Current liabilities

        

Short-term borrowings

    W       1,710,151        860,602  

Current portion of long-term borrowings

        318,645        312,994  

Current portion of debt securities

        8,199,520        6,790,778  

Less : Current portion of discount on long-term borrowings

        (1,001 )       (972 ) 

Less : Current portion of discount on debt securities

        (3,666 )       (1,974 ) 

Add : Current portion of premium on debt securities

        —          20  
    

 

 

     

 

 

  
       10,223,649        7,961,448  
    

 

 

     

 

 

  

Non-current liabilities

        

Long-term borrowings

        3,502,838        3,280,015  

Debt securities

        51,909,309        49,905,077  

Less : Discount on long-term borrowings

        (22,929 )       (22,000 ) 

Less : Discount on debt securities

        (90,909 )       (89,913 ) 
    

 

 

     

 

 

  
       55,298,309        53,073,179  
    

 

 

     

 

 

  
   W       65,521,958        61,034,627  
    

 

 

     

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

24.

Borrowings and Debt Securities, Continued

 

(2)

Repayment schedule of borrowings and debt securities as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won                    

June 30, 2019

  

Type

          Borrowings      Debt securities  

Less than 1 year

    W       2,028,796        8,199,520  

1~5 years

        1,974,534        30,169,809  

Over 5 years

        1,528,304        21,739,500  
    

 

 

     

 

 

  
   W       5,531,634        60,108,829  
    

 

 

     

 

 

  

 

In millions of won                    

December 31, 2018

  

Type

          Borrowings      Debt securities  

Less than 1 year

    W       1,173,596        6,790,778  

1~5 years

        1,911,226        30,175,734  

Over 5 years

        1,368,789        19,729,343  
    

 

 

     

 

 

  
   W       4,453,611        56,695,855  
    

 

 

     

 

 

  

 

(3)

Short-term borrowings as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won and thousands of foreign currencies  

June 30, 2019

  

Type

   

Creditor

    Interest rate (%)      Maturity     Foreign
currency		            Local
currency		  

Local short-term borrowings

   

KTB Investment and securities and others

      1.78~1.85       

 2019.07.15

~2019.08.13

  

 

     —        W       1,650,000  

Foreign short-term borrowings

   

SCNT and others

      4.60~6.50        2019.12.03       USD 8,629          9,982  

Foreign short-term borrowings

   

BDO Unibank

      6.59        2020.12.17 (*)       PHP 450,000          10,179  

Foreign short-term borrowings

   

Mizuho Bank

      2.86~3.24       

 2019.11.15

~2019.11.18

  

 

     USD 28,445          32,905  

Foreign short-term borrowings

    China Construction Bank      2.94        2019.11.15       USD 6,124          7,085  
               

 

 

  
              W       1,710,151  
               

 

 

  

 

(*)

The contractual maturity is 2020 but is classified as short-term borrowing due to intention of early payment in 3 months after borrowing.

 

In millions of won and thousands of foreign currencies  

December 31, 2018

  

Type

   

Creditor

    Interest rate (%)      Maturity     Foreign
currency		            Local
currency		  

Local short-term borrowings

   

KTB Investment and securities and others

      2.05~2.51       

 2019.01.04

~2019.02.20

  

 

     —        W       674,000  

Foreign short-term borrowings

   

SCNT and others

      4.60~6.50        2019.12.03       USD 8,955          10,013  

Foreign short-term borrowings

   

BDO Unibank

      6.59        2020.12.17 (*)       PHP 450,000          9,581  

Local bank overdraft

   

Nonghyup Bank

      2.59~3.09       

 2019.01.10

~2019.12.31

  

 

     —            142,773  

Local bank overdraft

    Woori Bank     
 Standard overdraft
rate+1.09		  
 		      2019.02.26       —            24,235  
               

 

 

  
              W       860,602  
               

 

 

  

 

(*)

The contractual maturity is 2020 but is classified as short-term borrowing due to intention of early payment in 3 months after borrowing.

 

82

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

24.

Borrowings and Debt Securities, Continued

 

(4)

Long-term borrowings as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won and thousands of foreign currencies  

June 30, 2019

  

Type

      Interest rate (%)      Maturity      Foreign
currency		            Local
currency		  

Local long-term borrowings

 

Korea Development Bank

      Others        0.50        2019~2044        —        W       3,976  
     Facility        2.50~4.60        2023~2028        —            58,286  
     Operating funds        2.59~3.04        2020        —            35,000  
     Operating funds        1yr KoFC bond rate+0.95        2020        —            14,000  

KEB Hana Bank

      Commercial Paper        3M CD+0.13~0.32        2021~2024        —            1,150,000  
     Facility        4.60        2028        —            13,131  
     Facility        3yr KTB rate-1.25        2019~2028        —            7,386  

IBK

      PF Refinancing        CD+1.25        2030        —            10,974  

Export-Import Bank of Korea

      Project loans        1.50        2026        —            20,623  
     Operating funds        2.21        2020        —            35,000  

Korea Energy Agency

     
 Development of power
resources		  
 		      3yr KTB rate-2.25        2023~2025        —            4,954  
     Facility        3yr KTB rate-2.25        2019~2024        —            2,324  
     Project loans        —          2023        —            1,197  
     Others        KTB rate-2.25        2024~2028        —            16,522  

Shinhan Bank

      Facility        CB rate+1.10        2028        —            19,697  
     Others        3.95        2035        —            101,521  
     Others        Standard overdraft rate+1.00        2035        —            101,521  

Kookmin Bank

      Facility        3.16        2020        —            10,000  
     Facility        MOR+0.79        2023        —            27,417  

Others

      Facility        1.75~6.80        2026~2036        —            305,148  
     Facility        CB rate+1.10~1.60        2023~2036        —            56,129  
     PF Refinancing        4.10        2030        —            30,484  
     Others        4.50~7.90        2022~2039        —            102,351  
                

 

 

  
                   2,127,641  
                

 

 

  

Foreign long-term borrowings

 

              

Korea Energy Agency

      Project loans        —          2021~2023        USD 8,744          10,115  

Export-Import Bank of Korea and others

      Direct loan and others        1M Libor+1.80~3.20        2036        USD 104,402          120,772  
     Direct loan and others        3M Libor+2.75~3.70        2027        JOD 152,644          249,052  
     Commercial loan and others        3M Libor+1.50~2.50        2030~2033        USD 271,779          314,393  
     PF Loan        6M Libor+1.70~2.50        2032        USD 123,097          143,084  
     Others        3.88        2021        USD 289,388          334,359  

SCNT and others

      Shareholder’s loan        6.50~8.00        2023        USD 44,045          50,951  
     Shareholder’s loan        8.00        2031        JOD 4,853          7,918  

PT PJB

      Shareholder’s loan        12.75        2019        IDR 5,798,559          474  

Samsung Life Insurance and others

      Syndicated Loan        3.10        2032        JPY 5,000,083          53,668  

Woori Bank and others

      Syndicated Loan        JPY 6M Libor+2.00        2032        JPY 3,225,405          34,620  

SMBC and others

      Equity Bridge Loan        1M Libor+0.90        2019        —            —    

IFC and others

      Others        6M Libor+5.00        2031        PKR 36,222,900          256,458  

Federal Financing Bank and others

      PF Loan        2.39~13.00        2031~2038        USD 101,567          117,492  

Others

      Others        —          2019        USD 421          486  
                

 

 

  
                   1,693,842  
                

 

 

  
             3,821,483  

Less : Discount of long-term borrowings

 

              (23,930 ) 

Less : Current portion of long-term borrowings

 

              (318,645 ) 

Add : Current portion of discount on long-term borrowings

 

              1,001  
                

 

 

  
         W       3,479,909  
          

 

 

  

 

83

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

24.

Borrowings and Debt Securities, Continued

 

(4)

Long-term borrowings as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

In millions of won and thousands of foreign currencies  

December 31, 2018

  

Type

    Interest rate (%)    Maturity      Foreign
currency		            Local
currency		  

Local long-term borrowings

 

Korea Development Bank

    Others    0.50      2019~2044        —        W       4,154  
   Facility    2.45~4.60      2023~2028        —            66,793  
   Operating funds    2.59~3.56      2020~2021        —            67,000  
   Operating funds    1yr KoFC bond rate

+0.95

      2020        —            14,000  

KEB Hana Bank

    Commercial Paper    3M CD+0.19~0.32      2021~2023        —            950,000  
   Facility    4.60      2028        —            13,781  
   Facility    3yr KTB rate-1.25      2019~2028        —            8,072  

IBK

    PF Refinancing    CD+1.25      2030        —            22,500  

Export-Import Bank of Korea

    Project loans    1.50      2026        —            22,096  
   Operating funds    2.21      2020        —            35,000  

Korea Energy Agency

    Development of power resources    3yr KTB rate-2.25      2023~2025        —            5,558  
   Facility    3yr KTB rate-2.25      2019~2024        —            2,589  
   Project loans    —        2023        —            1,197  
   Others    KTB rate-2.25      2024~2028        —            17,347  

Shinhan Bank

    Collateral borrowing    2.32      2019        —            30,000  
   Facility    CB rate+1.10      2028        —            20,672  
   Others    3.95      2035        —            103,851  
   Others    Standard overdraft
rate+1.00		      2035        —            103,851  

Kookmin Bank

    Facility    3.16      2020        —            10,000  
   Facility    MOR+0.79      2023        —            30,333  

Others

    Facility    1.75~4.60      2026~2036        —            168,080  
   Facility    CB rate+1.10~1.60      2023~2036        —            52,810  
   PF Refinancing    4.10      2030        —            62,500  
   Others    4.50~7.90      2022~2039        —            102,347  
                

 

 

  
                   1,914,531  
                

 

 

  

Foreign long-term borrowings

 

Korea Energy Agency

    Project loans    —        2021~2023        USD 8,744          9,776  

Export-Import Bank of Korea and others

    Direct loan and others    1M Libor+1.80~3.20      2036        USD 123,909          138,542  
   Direct loan and others    3M Libor+2.75~3.70      2027        JOD 158,524          249,783  
   Commercial loan and others    3M Libor+1.50~2.50      2030~2033        USD 277,538          310,315  
   PF Loan    6M Libor+1.70~2.50      2032        USD 126,798          141,773  

SCNT and others

    Shareholder’s loan    8.00      2031        JOD 4,853          7,647  
   Shareholder’s loan    6.50~8.00      2023        USD 44,680          49,956  
   Others    3.88      2021        USD 278,105          310,427  

PT PJB

    Shareholder’s loan    12.75      2019        IDR 5,569,304          428  

Samsung Life Insurance and others

    Syndicated Loan    3.10      2032        JPY 5,286,835          53,565  

Woori Bank and others

    Syndicated Loan    JPY 6M Libor+2.00      2032        JPY 3,410,381          34,553  

SMBC and others

    Equity Bridge Loan    1M Libor+0.90      2019        USD 44,019          49,218  

IFC and others

    Others    6M Libor+5.00      2031        PKR 25,900,420          206,944  

Federal Financing Bank and others

    PF Loan    2.39~13.00      2031~2038        USD 102,322          114,406  

Others

    Others    —        2019        USD 1,025          1,145  
                

 

 

  
                   1,678,478  
                

 

 

  
                   3,593,009  

Less : Discount of long-term borrowings

              (22,972 ) 

Less : Current portion of long-term borrowings

              (312,994 ) 

Add : Current portion of discount on long-term borrowings

              972  
          

 

 

  
               W       3,258,015  
          

 

 

  

 

84

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

24.

Borrowings and Debt Securities, Continued

 

(5)

Local debt securities as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won  
     Issue date      Maturity      Interest rate (%)            June 30, 2019     December 31, 2018  

Electricity bonds

      2009.12.03~2019.06.12        2019.08.21~2048.10.29        1.66~5.45      W       26,500,000       24,480,000  

Corporate bonds (*)

      2009.07.07~2019.06.26        2019.07.07~2049.06.26        1.36~6.00          23,963,227       23,223,228  
             

 

 

    

 

 

  
       50,463,227       47,703,228  

Less : Discount on local debt securities

 

        (41,767 )      (41,247 ) 

Less : Current portion of local debt securities

 

        (6,580,000 )      (5,330,000 ) 

Add : Current portion of discount on local debt securities

 

        1,396       1,035  
    

 

 

    

 

 

  
   W       43,842,856       42,333,016  
    

 

 

    

 

 

  

 

(*)

Corporate bonds of HeeMang Sunlight Power Co., Ltd. amounting to W2,697 million can be redeemed every March 31 after five years from its issue date, March 31, 2016.

 

(6)

Foreign debt securities as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won and thousands of foreign currencies  

June 30, 2019

  

Type

    Issue date    Maturity    Interest rate (%)    Foreign
currency		            Local
currency		  

FY-96

    1996.04.01~1996.12.06    2026.12.01~2096.04.01    6.00~8.37      USD 249,074      W       288,128  

FY-97

    1997.01.31~1997.08.04    2027.02.01~2027.08.01    6.75~7.00      USD 314,717          364,065  

FY-04

    2004.04.23    2034.04.23    5.13      USD 286,920          331,909  

FY-11

    2011.07.13    2021.07.13    4.75      USD 500,000          578,400  

FY-12

    2012.09.19    2022.09.19    3.00      USD 750,000          867,600  

FY-13

    2013.09.25    2020.09.25    5.75      AUD 325,000          263,341  

FY-14

    2014.07.30~2014.12.02    2019.09.22~2029.07.30    2.38~3.57      USD 1,200,000          1,388,160  

FY-15

    2015.06.15    2025.06.15    3.25      USD 300,000          347,040  

FY-16

    2016.01.21    2021.07.21    2.50      USD 300,000          347,040  

FY-17

    2017.04.12~2017.07.25    2020.04.12~2027.07.25    2.38~3.13      USD 1,100,000          1,272,480  

FY-17

    2017.10.30    2037.10.30    1.70      EUR 40,000          52,604  

FY-17

    2017.11.16    2037.11.16    2.36      SEK 450,000          56,120  

FY-18

    2018.01.29~2018.07.25    2021.01.29~2023.07.25    3.00~3.88      USD 1,800,000          2,082,240  

FY-18

    2018.03.13    2028.03.13    3.35      HKD 1,650,000          244,217  

FY-19

    2019.01.22~2019.06.24    2022.01.22~2024.06.24    2.50~3.38      USD 800,000          925,440  

FY-19

    2019.02.27    2024.02.27    0.13      CHF 200,000          236,818  
                

 

 

  
          9,645,602  

Less : Discount on foreign debt securities

           (52,808 ) 

Add : Premium on foreign debt securities

           —    

Less : Current portion of foreign debt securities

           (1,619,520 ) 

Add : Current portion of discount on foreign debt securities

           2,270  

Less: Current portion of premium on foreign debt securities

           —    
       

 

 

  
      W       7,975,544  
       

 

 

  

 

85

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

24.

Borrowings and Debt Securities, Continued

 

(6)

Foreign debt securities as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

In millions of won and thousands of foreign currencies  

December 31, 2018

  

Type

    Issue date    Maturity    Interest rate (%)    Foreign
currency		            Local
currency		  

FY-96

    1996.04.01~1996.12.06    2026.12.01~2096.04.01    6.00~8.37      USD 249,071      W       278,488  

FY-97

    1997.01.31~1997.08.04    2027.02.01~2027.08.01    6.75~7.00      USD 314,717          351,885  

FY-04

    2004.04.23    2034.04.23    5.13      USD 286,920          320,805  

FY-11

    2011.07.13    2021.07.13    4.75      USD 500,000          559,050  

FY-12

    2012.09.19    2022.09.19    3.00      USD 750,000          838,575  

FY-13

    2013.09.26~2013.10.23    2019.03.26~2019.04.23    1.50~1.63      CHF 400,000          454,488  

FY-13

    2013.09.25    2020.09.25    5.75      AUD 325,000          256,038  

FY-14

    2014.02.11~2014.12.02    2019.02.11~2029.07.30    2.38~3.57      USD 1,500,000          1,677,150  

FY-15

    2015.06.15    2025.06.15    3.25      USD 300,000          335,430  

FY-16

    2016.01.21    2021.07.21    2.50      USD 300,000          335,430  

FY-17

    2017.04.12~2017.07.25    2020.04.12~2027.07.25    2.38~3.13      USD 1,100,000          1,229,910  

FY-17

    2017.10.30    2037.10.30    1.70      EUR 40,000          51,166  

FY-17

    2017.11.16    2037.11.16    2.36      SEK 450,000          56,061  

FY-18

    2018.01.29~2018.07.25    2021.01.29~2023.07.25    3.00~3.88      USD 1,800,000          2,012,580  

FY-18

    2018.03.13    2028.03.13    3.35      HKD 1,650,000          235,571  
                

 

 

  
          8,992,627  

Less : Discount on foreign debt securities

           (50,640 ) 

Add : Premium on foreign debt securities

           20  

Less : Current portion of foreign debt securities

           (1,460,778 ) 

Add : Current portion of discount on foreign debt securities

           939  

Less: Current portion of premium on foreign debt securities

           (20 ) 
       

 

 

  
      W       7,482,148  
       

 

 

  

 

(7)

Changes in borrowings and debt securities for the six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019      June 30, 2018  

Beginning balance

    W       61,034,627        54,747,392  

Cash flow

        4,021,612        5,389,413  

Effect of exchange rate fluctuations

        469,385        450,795  

Others

        (3,666 )       (241 ) 
    

 

 

     

 

 

  

Ending balance

    W       65,521,958        60,587,359  
    

 

 

     

 

 

  

 

86

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

25.

Lease

 

(1)

Right-of-use assets as of June 30, 2019 are as follows:

 

In millions of won          June 30, 2019  
           Acquisition
cost		      Government
grants		      Accumulated
depreciation		      Book
value		  

Land

    W       337,864        —          (8,709 )       329,155  

Buildings

        44,402        —          (9,222 )       35,180  

Structures

        21,704        —          (627 )       21,077  

Ships

        4,113,754        —          (210,233 )       3,903,521  

Vehicles

        10,928        —          (2,471 )       8,457  

Others (*)

        2,644,750        —          (2,235,116 )       409,634  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       7,173,402        —          (2,466,378 )       4,707,024  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

(*)

Including power purchase agreements (“PPA”) with GS EPS and two other providers.

 

(2)

Changes in right-of-use assets for the six-month period ended June 30, 2019 are as follows:

 

In millions of won          June 30, 2019  
           Beginning balance      Changes in
accounting policies
(*)		      Increase      Depreciation      Ending
balance		  

Land

    W       —          325,748        12,116        (8,709 )       329,155  

Buildings

        —          37,024        7,378        (9,222 )       35,180  

Structures

        —          20,840        864        (627 )       21,077  

Ships

        —          3,986,947        126,807        (210,233 )       3,903,521  

Vehicles

        —          10,344        584        (2,471 )       8,457  

Others

        —          447,892        4,050        (42,308 )       409,634  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W       —          4,828,795        151,799        (273,570 )       4,707,024  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

(*)

Including transferred amount of W195,704 million, which was classified as finance lease assets as of December 31, 2018.

 

(3)

Lease liabilities as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  
           Minimum lease
payments		      Present value of
minimum lease
payments		      Minimum lease
payments		      Present value of
minimum lease
payments		  

Less than 1 year

    W       646,693        621,587        87,709        57,200  

1 ~ 5 years

        2,188,893        1,989,915        228,783        170,676  

More than 5 years

        2,836,886        2,339,795        65,250        55,930  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       5,672,472        4,951,297        381,742        283,806  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

25.

Lease, Continued

 

(4)

Changes in lease liabilities for the six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019  
           Beginning
balance		      Changes in
accounting
policies		      Increase      Decrease     Interest
expenses		      Others (*)      Ending
balance		  

Lease liabilities

    W       283,806        4,626,657        150,579        (307,014 )      42,205        155,064        4,951,297  

 

(*)

Including translation effect of foreign currency lease liabilities and others.

 

In millions of won          June 30, 2018  
           Beginning
balance		      Acquisition      Decrease      Ending
balance		  

Finance lease liabilities

    W       418,260        —          (67,687 )       350,573  

 

(5)

Details of expense relating to lease contracts as lessee for the three and six-month periods ended June 30, 2019 are as follows:

 

In millions of won          June 30, 2019  
           Three-month
period ended		      Six-month
period ended		  

Depreciation of right-of-use assets

    W       138,430        273,570  

Interest expenses of lease liabilities

        21,824        42,205  

Leases expenses for short term leases

        2,702        7,424  

Leases expenses for low-value assets

        206        547  

Variable lease payments

        (4,361 )       (8,642 ) 
    

 

 

     

 

 

  
   W       158,801        315,105  
    

 

 

     

 

 

  

 

(6)

Minimum lease payment and contingent rent payment recognized as an expense as a lessee for the three and six-month periods ended June 30, 2018 are as follows:

 

In millions of won          June 30, 2018  
           Three-month
period ended		      Six-month
period ended		  

Minimum lease payment

    W       35,634        75,079  

Contingent rent payment

        (4,759 )       (9,354 ) 
    

 

 

     

 

 

  
   W       30,875        65,725  
    

 

 

     

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

26.

Employment Benefits

 

(1)

Employment benefit obligations as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Net defined benefit obligations

    W       2,132,153        1,638,785  

Other long-term employee benefit obligations

        6,271        6,284  
    

 

 

     

 

 

  
   W       2,138,424        1,645,069  
    

 

 

     

 

 

  

 

(2)

Principal assumptions on actuarial valuation as of June 30, 2019 and December 31, 2018 are as follows:

 

     June 30, 2019   December 31, 2018

Discount rate

    1.82%~1.97%   2.24%~2.90%

Future salary and benefit levels

    4.88%   4.88%

Weighted average duration

    13.75 years   13.71 years

 

(3)

Details of expense relating to defined benefit plans for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019      June 30, 2018  
           Three-month
period ended		      Six-month
period ended		      Three-month
period ended		      Six-month
period ended		  

Current service cost

    W       102,443        202,145        89,285        177,834  

Interest cost

        20,544        40,300        21,668        42,567  

Expected return on plan assets

        (10,203 )       (20,419 )       (10,367 )       (20,792 ) 

Loss from settlement

        (243 )       (478 )       (81 )       (277 ) 
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       112,541        221,548        100,505        199,332  
    

 

 

     

 

 

     

 

 

     

 

 

  

Expenses as described above are recognized in those items below in the financial statements.

 

In millions of won          June 30, 2019      June 30, 2018  
           Three-month
period ended		      Six-month
period ended		      Three-month
period ended		      Six-month
period ended		  

Cost of sales

    W       83,365        164,840        74,947        147,926  

Selling and administrative expenses

        14,511        28,222        9,524        25,122  

Others

              

(Construction-in-progress and others)

        14,665        28,486        16,034        26,284  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       112,541        221,548        100,505        199,332  
    

 

 

     

 

 

     

 

 

     

 

 

  

In addition, for the six-month periods ended June 30, 2019 and 2018, employee benefit obligations expenses of W38,008 million and W33,106 million, respectively, is recognized as cost of sales, and W8,579 million and W6,237 million, respectively, is recognized as selling and administrative expenses, and W7,365 million and W6,876 million, respectively, are recognized as construction-in-progress and others, relates to the Group’s defined contribution plans.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

26.

Employment Benefits, Continued

 

(4)

Details of defined benefit obligations as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Present value of defined benefit obligation from funded plans

    W       3,903,240        3,414,116  

Fair value of plan assets

        (1,771,087 )       (1,775,331 ) 
    

 

 

     

 

 

  

Net liabilities incurred from defined benefit plans

    W       2,132,153        1,638,785  
    

 

 

     

 

 

  

 

(5)

Changes in the present value of defined benefit obligations for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Beginning balance

    W       3,414,116        2,951,842  

Current service cost

        202,145        369,899  

Interest cost (*)

        40,300        87,687  

Remeasurement component

        298,787        154,939  

Loss from settlement

        (478 )       (767 ) 

Actual payments

        (51,705 )       (149,454 ) 

Others

        75        (30 ) 
    

 

 

     

 

 

  

Ending balance

    W       3,903,240        3,414,116  
    

 

 

     

 

 

  

 

(*)

Corporate bond (AAA rated) yield at year-end is applied to measure the interest cost on employee benefit obligations.

 

(6)

Changes in the fair value of plan assets for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Beginning balance

    W       1,775,331        1,475,641  

Expected return

        20,419        42,135  

Remeasurement component

        (2,381 )       (12,308 ) 

Contributions by the employers

        270        330,064  

Actual payments

        (22,552 )       (60,201 ) 
    

 

 

     

 

 

  

Ending balance

    W       1,771,087        1,775,331  
    

 

 

     

 

 

  

In addition, loss on accumulated remeasurement component amounted to W328,112 million and W219,381 million has been recognized as other comprehensive income or loss for the six-month period ended June 30, 2019 and for the year ended December 31, 2018, respectively.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

26.

Employment Benefits, Continued

 

(7)

Details of the fair value of plan assets as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Equity instruments

    W       90,256        96,823  

Debt instruments

        541,186        510,184  

Bank deposit

        294,651        275,518  

Others

        844,994        892,806  
    

 

 

     

 

 

  
   W       1,771,087        1,775,331  
    

 

 

     

 

 

  

For the six-month period ended June 30, 2019 and for the year ended December 31, 2018, actual returns on plan assets amounted to W18,038 million and W29,827 million, respectively.

 

(8)

Remeasurement component recognized in other comprehensive income (loss) for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Actuarial gain from changes in financial assumptions

    W       183,633        186,428  

Experience adjustments, etc.

        115,154        (31,489 ) 

Expected return

        2,381        12,308  
    

 

 

     

 

 

  
   W       301,168        167,247  
    

 

 

     

 

 

  

Remeasurement component recognized as other comprehensive income or loss is recorded in retained earnings.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

27.

Provisions

 

(1)

Provisions as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  
           Current      Non-current      Current      Non-current  

Employment benefits

              

Provisions for employment benefits

    W       1,102,997        —          976,347        —    

Litigation

              

Litigation provisions

        22,907        44,413        40,157        37,636  

Decommissioning cost

              

Nuclear plants

        —          13,570,017        —          13,388,134  

Spent fuel

        —          1,355,280        —          1,291,354  

Radioactive waste

        4,311        1,693,331        4,310        1,680,698  

PCBs

        —          144,527        —          147,668  

Other recovery provisions

        —          10,047        —          10,477  

Others

              

Power plant regional support program

        165,236        —          137,668        —    

Transmission regional support program

        153,219        —          151,698        —    

Provisions for tax

        25        —          6,845        —    

Provisions for financial guarantee

        55        90,643        1,320        14,266  

Provisions for RPS

        142,324        —          93,919        —    

Provisions for greenhouse gas emissions obligations

        151,885        —          136,187        —    

Others

        44,340        14,308        46,347        15,515  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       1,787,299        16,922,566        1,594,798        16,585,748  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

27.

Provisions, Continued

 

(2)

Changes in provisions for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Beginning
balance		      Increase in
provision		      Payment     Reversal     Other     Ending
balance		  

Employment benefits

                 

Provisions for employment benefits

    W       976,347        488,567        (365,081 )      —         3,164       1,102,997  

Litigation

                 

Litigation provisions

        77,793        11,061        (16,066 )      (5,468 )      —         67,320  

Decommissioning cost

                 

Nuclear plants

        13,388,134        197,402        (15,519 )      —         —         13,570,017  

Spent fuel

        1,291,354        215,758        (151,832 )      —         —         1,355,280  

Radioactive waste

        1,685,008        18,842        (6,407 )      —         199       1,697,642  

PCBs

        147,668        1,610        (4,751 )      —         —         144,527  

Other recovery provisions

        10,477        85        (861 )      —         346       10,047  

Others

                 

Power plant regional support program

        137,668        41,341        (23,287 )      —         9,514       165,236  

Transmission regional support program

        151,698        92,445        (90,924 )      —         —         153,219  

Provisions for tax

        6,845        —          —         (6,821 )      1       25  

Provisions for financial guarantee

        15,586        82,466        (6,724 )      (559 )      (71 )      90,698  

Provisions for RPS

        93,919        180,138        (131,733 )      —         —         142,324  

Provisions for greenhouse gas emissions obligations

        136,187        17,349        —         (1,651 )      —         151,885  

Others

        61,862        1,930        (3,332 )      (1,818 )      6       58,648  
    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  
   W       18,180,546        1,348,994        (816,517 )      (16,317 )      13,159       18,709,865  
    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

27.

Provisions, Continued

 

(2)

Changes in provisions for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

In millions of won          December 31, 2018  
           Beginning
balance		      Increase in
provision		      Payment     Reversal     Other     Ending
balance		  

Employment benefits

                 

Provisions for employment benefits

    W       913,787        912,440        (843,281 )      (6,599 )      —         976,347  

Litigation

                 

Litigation provisions (*)

        73,576        234,517        (216,187 )      (13,847 )      (266 )      77,793  

Decommissioning cost

                 

Nuclear plants

        13,007,228        411,316        (30,410 )      —         —         13,388,134  

Spent fuel

        1,339,046        435,007        (482,699 )      —         —         1,291,354  

Radioactive waste

        1,638,371        112,815        (66,178 )      —         —         1,685,008  

PCBs

        180,087        4,600        (13,758 )      (23,261 )      —         147,668  

Other recovery provisions

        6,659        2,125        —         —         1,693       10,477  

Others

                 

Power plant regional support program

        153,756        46,366        (71,978 )      —         9,524       137,668  

Transmission regional support program

        243,365        141,661        (233,328 )      —         —         151,698  

Provisions for tax

        61        6,821        —         —         (37 )      6,845  

Provisions for financial guarantee

        23,475        1,179        (67 )      (8,432 )      (569 )      15,586  

Provisions for RPS

        271,624        297,802        (475,507 )      —         —         93,919  

Provisions for greenhouse gas emissions obligations

        414,252        131,860        (350,356 )      (59,569 )      —         136,187  

Others

        96,925        44,732        (82,632 )      (745 )      3,582       61,862  
    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  
   W       18,362,212        2,783,241        (2,866,381 )      (112,453 )      13,927       18,180,546  
    

 

 

     

 

 

     

 

 

    

 

 

    

 

 

    

 

 

  

 

(*)

As described in Note 50.(1), the Group believes that the possibility of economic outflow is probable on the request for additional construction costs of Hyundai E&C, GS Engineering & Construction Corp. and Hansol SeenTec Co., Ltd. For this reason, the Group recognized W204,787 million of provision as addition to property, plant and equipment.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

28.

Government Grants

 

(1)

Government grants as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Land

    W       (21,968 )       (21,968 ) 

Buildings

        (61,014 )       (63,189 ) 

Structures

        (186,805 )       (190,854 ) 

Machinery

        (164,583 )       (173,242 ) 

Vehicles

        (3,256 )       (4,220 ) 

Equipment

        (331 )       (418 ) 

Tools

        (532 )       (675 ) 

Construction-in-progress

        (59,532 )       (54,740 ) 

Finance lease assets

        —        (26 ) 

Investment properties

        (14 )       (50 ) 

Software

        (308 )       (420 ) 

Development expenditures

        (1,690 )       (2,110 ) 

Intangible assets under development

        (10,964 )       (10,564 ) 
    

 

 

     

 

 

  
   W       (510,997 )       (522,476 ) 
    

 

 

     

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

28.

Government Grants, Continued

 

(2)

Changes in government grants for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Beginning
balance		     Receipt     Acquisitions      Items offset
with
depreciation
expense and
others		      Disposals      Others     Ending
balance		  

Cash

    W       —         (7,435 )      —          —          —          7,435       —    

Land

        (21,968 )      —         —          —          —          —         (21,968 ) 

Buildings

        (63,189 )      —         —          2,802        —          (627 )      (61,014 ) 

Structures

        (190,854 )      —         —          4,662        888        (1,501 )      (186,805 ) 

Machinery

        (173,242 )      —         —          8,716        260        (317 )      (164,583 ) 

Vehicles

        (4,220 )      —         —          1,078        —          (114 )      (3,256 ) 

Equipment

        (418 )      —         —          141        —          (54 )      (331 ) 

Tools

        (675 )      —         —          143        —          —         (532 ) 

Construction-in-progress

        (54,740 )      —         1,791        —          —          (6,583 )      (59,532 ) 

Finance lease assets

        (26 )      —         —          —          —          26       —    

Investment properties

        (50 )      —         —          —          —          36       (14 ) 

Software

        (420 )      —         —          112        —          —         (308 ) 

Development expenditures

        (2,110 )      —         —          420        —          —         (1,690 ) 

Intangible assets under development

        (10,564 )      —         —          —          —          (400 )      (10,964 ) 
    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  
   W       (522,476 )      (7,435 )      1,791        18,074        1,148        (2,099 )      (510,997 ) 
    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

 

In millions of won          December 31, 2018  
           Beginning
balance		     Receipt     Acquisitions      Items offset
with
depreciation
expense and
others		      Disposals      Others     Ending
balance		  

Cash

    W       —         (30,416 )      —          —          —          30,416       —    

Land

        (21,968 )      —         —          —          —          —         (21,968 ) 

Buildings

        (63,539 )      —         —          6,836        31        (6,517 )      (63,189 ) 

Structures

        (196,414 )      —         —          10,292        3,270        (8,002 )      (190,854 ) 

Machinery

        (183,188 )      —         —          18,099        823        (8,976 )      (173,242 ) 

Vehicles

        (6,322 )      —         —          2,146        —          (44 )      (4,220 ) 

Equipment

        (761 )      —         —          365        —          (22 )      (418 ) 

Tools

        (1,027 )      —         —          432        —          (80 )      (675 ) 

Construction-in-progress

        (49,084 )      —         18,239        —          —          (23,895 )      (54,740 ) 

Finance lease assets

        (27 )      —         —          1        —          —         (26 ) 

Investment properties

        (83 )      —         —          1        —          32       (50 ) 

Software

        (486 )      —         —          254        —          (188 )      (420 ) 

Development expenditures

        (3,702 )      —         —          1,591        —          1       (2,110 ) 

Intangible assets under development

        (10,540 )      —         —          —          —          (24 )      (10,564 ) 

Usage rights of donated assets and others

        (11 )      —         —          11        —          —         —    
    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  
   W       (537,152 )      (30,416 )      18,239        40,028        4,124        (17,299 )      (522,476 ) 
    

 

 

    

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

29.

Deferred Revenues

 

 

 

Deferred revenue related to the Group’s construction contracts for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows which included in current and non-current non-financial liabilities in the consolidated statements of financial position:

 

In millions of won          June 30, 2019      December 31, 2018  

Beginning balance

    W       8,606,563        8,325,181  

Increase during the current period/year

        456,715        875,930  

Recognized as revenue during the current period/year

        (289,366 )       (594,548 ) 
    

 

 

     

 

 

  

Ending balance

    W       8,773,912        8,606,563  
    

 

 

     

 

 

  

 

30.

Non-financial Liabilities

 

 

Non-financial liabilities as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  
           Current      Non-current      Current      Non-current  

Advance received

    W       3,785,481        131,636        3,724,238        80,937  

Unearned revenue

        25,353        4,345        63,038        4,690  

Deferred revenue

        570,334        8,203,578        556,072        8,050,491  

Withholdings

        284,197        9,893        172,454        10,856  

Others

        1,135,983        13,315        1,058,239        13,059  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       5,801,348        8,362,767        5,574,041        8,160,033  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

31.

Contributed Capital

 

(1)

Details of shares issued as of June 30, 2019 and December 31, 2018 are as follows:

 

 

In millions of won except share information

 

     June 30, 2019  
     Shares
authorized		      Shares issued      Par value
per share
(in won)		      Owned by
government (*)		      Owned by
others		      Total  

Common shares

      1,200,000,000        641,964,077      W 5,000        1,640,385        1,569,435        3,209,820  

 

(*)

Korea Development Bank’s interest of W1,056,176 million is included.

 

 

In millions of won except share information

 

     December 31, 2018  
     Shares
authorized		      Shares issued      Par value
per share
(in won)		      Owned by
government (*)		      Owned by
others		      Total  

Common shares

      1,200,000,000        641,964,077      W 5,000        1,640,385        1,569,435        3,209,820  

 

(*)

Korea Development Bank’s interest of W1,056,176 million is included.

 

(2)

Details in number of issued capital stock for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

Number of shares    June 30, 2019      December 31, 2018  

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, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Share premium

    W       843,758        843,758  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

32.

Retained Earnings and Dividends Paid

 

(1)

Details of retained earnings as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Legal reserve (*)

    W       1,604,910        1,604,910  

Voluntary reserves

        34,785,425        35,906,267  

Retained earnings before appropriations

        13,717,315        14,007,942  
    

 

 

     

 

 

  

Retained earnings

    W       50,107,650        51,519,119  
    

 

 

     

 

 

  

 

  (*)

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, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Reserve for investment on social overhead capital

    W       5,277,449        5,277,449  

Reserve for research and human development (*)

        330,000        330,000  

Reserve for business expansion

        28,967,976        30,088,818  

Reserve for equalizing dividends

        210,000        210,000  
    

 

 

     

 

 

  
   W       34,785,425        35,906,267  
    

 

 

     

 

 

  

 

  (*)

The reserve for research and human development is appropriated by KEPCO 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 Restriction of Special Taxation Act of Korea.

 

(3)

Changes in retained earnings for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Beginning balance

    W       51,519,119        53,370,558  

Effect of change in accounting policy

        —          71,928  

Net profit (loss) for the period attributed to owner of the Company

        (1,235,344 )       (1,314,567 ) 

Changes in equity method retained earnings

        (448 )       (1,153 ) 

Remeasurement of defined benefit liability, net of tax

        (174,173 )       (100,495 ) 

Transfer of gain (loss) on valuation of financial assets through other comprehensive income

        (1,504 )       —    

Dividends paid

        —          (507,152 ) 
    

 

 

     

 

 

  

Ending balance

    W       50,107,650        51,519,119  
    

 

 

     

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

32.

Retained Earnings and Dividends Paid, Continued

 

(4)

Dividends paid for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    June 30, 2019  
     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      W        —          —    
In millions of won    December 31, 2018  
     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      W        790        507,152  

 

(5)

Changes in retained earnings of investments in associates and joint ventures for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Beginning balance

    W       3,969        5,122  

Changes

        (448 )       (1,153 ) 
    

 

 

     

 

 

  

Ending balance

    W       3,521        3,969  
    

 

 

     

 

 

  

 

(6)

Changes in remeasurement components related to defined benefit liability for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Beginning balance

    W       (219,381 )       (43,513 ) 

Changes

        (289,318 )       (154,198 ) 

Income tax effect

        115,145        53,703  

Transfer to reserve for business expansion

        65,442        (75,373 ) 
    

 

 

     

 

 

  

Ending balance

    W       (328,112 )       (219,381 ) 
    

 

 

     

 

 

  

 

33.

Hybrid Bonds

Hybrid bonds classified as equity (non-controlling interest) as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won                                          

Issuer

    Hybrid bond      Issued date      Maturity      Yield (%)            June 30, 2019     December 31, 2018  

Korea South-East Power Co., Ltd.

      1st hybrid bond        2012.12.07        2042.12.06        4.38      W       170,000       170,000  

Korea South-East Power Co., Ltd.

      2nd hybrid bond        2012.12.07        2042.12.06        4.44          230,000       230,000  

Expense of issuance

                    (1,090 )      (1,090 ) 
                

 

 

    

 

 

  
               W       398,910       398,910  
                

 

 

    

 

 

  

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 Group decides not to pay dividends on common 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 Group’s consolidated financial statements.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

34.

Other Components of Equity

 

(1)

Other components of equity as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Other capital surplus

    W       1,226,825        1,234,825  

Accumulated other comprehensive loss

        (263,933 )       (358,570 ) 

Other equity

        13,294,973        13,294,973  
    

 

 

     

 

 

  
   W       14,257,865        14,171,228  
    

 

 

     

 

 

  

 

(2)

Changes in other capital surplus for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019     December 31, 2018  
           Gain on
disposal of
treasury
stocks		      Others     Subtotal     Gain on
disposal of
treasury
stocks		      Others      Subtotal  

Beginning balance

    W       387,524        847,301       1,234,825       387,524        846,269        1,233,793  

Issuance of share capital of subsidiary

        —          (7,859 )      (7,859 )      —          1,032        1,032  

Others

        —          (141 )      (141 )      —          —          —    
    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

Ending balance

    W       387,524        839,301       1,226,825       387,524        847,301        1,234,825  
    

 

 

     

 

 

    

 

 

    

 

 

     

 

 

     

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

34.

Other Components of Equity, Continued

 

(3)

Changes in accumulated other comprehensive income (loss) for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Financial asset at
fair value through
other
comprehensive
income
valuation reserve		     Shares in other
comprehensive
income of
investments in
associates and joint
ventures		      Reserve for
overseas operations
translation		     Reserve for
loss on
valuation of
derivatives		     Total  

Beginning balance

    W       (81,708 )      123,553        (350,245 )      (50,170 )      (358,570 ) 

Changes in the unrealized fair value of financial assets at FVOCI, net of tax

        1,041       —          —         —         1,041  

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

        —         35,701        —         —         35,701  

Foreign currency translation of foreign operations, net of tax

        —         —          43,626       —         43,626  

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

        —         —          —         14,269       14,269  
    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Ending balance

    W       (80,667 )      159,254        (306,619 )      (35,901 )      (263,933 ) 
    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

 

In millions of won          December 31, 2018  
           Financial asset at
fair value through
other
comprehensive
income
valuation reserve		     Shares in other
comprehensive
income of
investments in
associates and joint
ventures		      Reserve for
overseas operations
translation		     Reserve for
loss on
valuation of
derivatives		     Total  

Beginning balance

    W       29,268       66,464        (318,159 )      (49,030 )      (271,457 ) 

Effect of change in accounting policy

        (76,851 )      —          —         —         (76,851 ) 

Changes in the unrealized fair value of financial assets at FVOCI, net of tax

        (34,125 )      —          —         —         (34,125 ) 

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

        —         57,089        —         —         57,089  

Foreign currency translation of foreign operations, net of tax

        —         —          (32,086 )      —         (32,086 ) 

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

        —         —          —         (1,140 )      (1,140 ) 
    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

Ending balance

    W       (81,708 )      123,553        (350,245 )      (50,170 )      (358,570 ) 
    

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

 

(4)

Other equity as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Statutory revaluation reserve

    W       13,295,098        13,295,098  

Changes in other equity

        (125 )       (125 ) 
    

 

 

     

 

 

  
   W       13,294,973        13,294,973  
    

 

 

     

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

35.

Sales

Details of sales for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019  
           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		  

[Type of goods and services]

 

            

Sales of goods

    W       12,486,388        27,163,089        65,480        142,791        12,551,869        27,305,880  

Electricity

        12,384,623        26,822,148        —          —          12,384,623        26,822,148  

Heat supply

        22,376        154,974        —          —          22,376        154,974  

Others

        79,389        185,967        65,480        142,791        144,870        328,758  

Sales of service

        38,656        90,414        46,882        90,003        85,538        180,417  

Sales of construction services

        31,511        49,028        256,151        494,687        287,661        543,715  

Revenue related to transfer of assets from customers

        145,906        289,366        —          —          145,906        289,366  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W       12,702,461        27,591,897        368,513        727,481        13,070,974        28,319,378  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

[Timing of revenue recognition]

 

            

Performance obligations satisfied at a point in time

    W       12,486,388        27,163,089        65,480        142,791        12,551,869        27,305,880  

Performance obligations satisfied over time

        216,073        428,808        303,033        584,690        519,105        1,013,498  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W       12,702,461        27,591,897        368,513        727,481        13,070,974        28,319,378  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

In millions of won          June 30, 2018  
           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		  

[Type of goods and services]

 

            

Sales of goods

    W       12,568,817        27,525,572        86,012        187,234        12,654,829        27,712,806  

Electricity

        12,413,292        27,131,074        —          —          12,413,292        27,131,074  

Heat supply

        13,759        142,618        —          —          13,759        142,618  

Others

        141,766        251,880        86,012        187,234        227,778        439,114  

Sales of service

        36,093        70,120        37,023        77,162        73,116        147,282  

Sales of construction services

        37,788        54,658        386,645        819,936        424,433        874,594  

Revenue related to transfer of assets from customers

        184,780        308,521        —          —          184,780        308,521  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W       12,827,478        27,958,871        509,680        1,084,332        13,337,158        29,043,203  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

[Timing of revenue recognition]

 

            

Performance obligations satisfied at a point in time

    W       12,568,817        27,525,572        86,012        187,234        12,654,829        27,712,806  

Performance obligations satisfied over time

        258,661        433,299        423,668        897,098        682,329        1,330,397  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W       12,827,478        27,958,871        509,680        1,084,332        13,337,158        29,043,203  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

36.

Selling and Administrative Expenses

Selling and administrative expenses for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019      June 30, 2018  
           Three-
month
period
ended		      Six-
month
period
ended		      Three-
month
period
ended		      Six-
month
period
ended		  

Salaries

    W       194,997        391,652        187,024        376,145  

Retirement benefit expense

        19,598        36,801        12,788        31,359  

Welfare and benefit expense

        31,378        59,068        28,540        55,600  

Insurance expense

        3,604        6,623        2,814        7,441  

Depreciation

        56,988        116,043        50,680        106,560  

Amortization of intangible assets

        26,434        40,398        12,407        26,184  

Bad debt expense (reversal)

        10,772        15,724        (314 )       18,068  

Commission

        161,884        341,851        189,284        346,096  

Advertising expense

        6,894        13,777        6,761        13,348  

Training expense

        1,728        3,281        2,080        3,613  

Vehicle maintenance expense

        1,591        4,457        2,666        5,038  

Publishing expense

        32        1,471        726        1,528  

Business development expense

        722        1,493        740        1,540  

Rent expense

        7,277        14,159        9,404        17,348  

Telecommunication expense

        2,092        4,357        6,042        11,736  

Transportation expense

        242        453        98        225  

Taxes and dues

        37,060        41,076        30,018        34,244  

Expendable supplies expense

        1,454        3,207        1,426        2,641  

Water, light and heating expense

        2,113        6,568        3,175        6,836  

Repairs and maintenance expense

        16,386        29,117        20,991        31,863  

Ordinary development expense

        37,553        78,583        42,513        84,603  

Travel expense

        4,037        8,546        3,477        6,964  

Clothing expense

        1,693        2,136        2,178        2,771  

Survey and analysis expense

        212        429        150        335  

Membership fee

        312        746        370        669  

Others

        30,222        61,635        28,421        61,396  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       657,275        1,283,651        644,459        1,254,151  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

37.

Other Non-operating Income and Expense

 

(1)

Other non-operating income for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019      June 30, 2018  
           Three-
month
period
ended		      Six-
month
period
ended		      Three-
month
period
ended		      Six-
month
period
ended		  

Reversal of other provisions

    W       —          2,186        895        1,477  

Reversal of other allowance for bad debt

        960        960        —          —    

Gains on government grants

        67        139        67        145  

Gains on assets contributed

        2,707        2,771        394        418  

Gains on liabilities exempted

        616        719        97        7,021  

Compensation and reparations revenue

        19,822        38,664        22,945        42,755  

Revenue from research contracts

        1,427        2,577        1,750        2,844  

Rental income

        47,069        94,051        49,675        93,339  

Others

        22,786        29,090        18,003        30,653  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       95,454        171,157        93,826        178,652  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

(2)

Other non-operating expense for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019      June 30, 2018  
           Three-
month
period
ended		      Six-
month
period
ended		      Three-
month
period
ended		      Six-
month
period
ended		  

Compensation and reparations expenses

    W       77        77        19,258        19,288  

Accretion expenses of other provisions

        5,225        383        61        190  

Depreciation expenses on investment properties

        4,047        4,291        218        508  

Depreciation expenses on idle assets

        1,636        3,272        1,637        3,274  

Other bad debt expense

        4,849        5,696        8,957        11,453  

Donations

        15,578        27,563        13,671        18,958  

Others

        4,383        9,856        36,817        43,850  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       35,795        51,138        80,619        97,521  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

38.

Other Gains (Losses)

Composition of other gains (losses) for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019      June 30, 2018  
           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

    W       20,353        29,187        11,997        26,363  

Gains on disposal of intangible assets

        —          97        3        3  

Gains on foreign currency translation

        13,907        10,955        4,060        8,161  

Gains on foreign currency transaction

        10,866        17,166        9,701        23,206  

Gains on insurance proceeds

        —          13        —          —    

Others

        43,890        110,235        44,031        106,818  

Other losses

              

Losses on disposal of property, plant and equipment

        (12,755 )       (26,747 )       (9,971 )       (13,400 ) 

Losses on disposal of intangible assets

        —          —          (2 )       (6 ) 

Losses on impairment of property, plant, and equipment

        (27,406 )       (29,685 )       (701,317 )       (701,317 ) 

Losses on impairment of intangible assets

        (61,696 )       (61,696 )       —          —    

Losses on foreign currency translation

        —          (51,468 )       (12,005 )       (15,353 ) 

Losses on foreign currency transaction

        (19,055 )       (28,915 )       (18,666 )       (33,373 ) 

Others

        (26,496 )       (37,818 )       (13,159 )       (32,375 ) 
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       (58,392 )       (68,676 )       (685,328 )       (631,273 ) 
    

 

 

     

 

 

     

 

 

     

 

 

  

 

39.

Finance Income

Finance Income for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019      June 30, 2018  
           Three-
month
period
ended		      Six-
month
period
ended		      Three-
month
period
ended		      Six-
month
period
ended		  

Interest income

    W       63,275        124,579        57,438        108,116  

Dividends income

        2,427        3,740        3,704        11,811  

Gains on disposal of financial assets

        114        964        672        672  

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

        3,830        8,391        2,289        5,010  

Gains on valuation of derivatives

        181,570        346,113        700,794        301,494  

Gains on transaction of derivatives

        30,425        65,569        17,924        37,367  

Gains on foreign currency translation

        57,044        86,337        43,402        89,543  

Gains on foreign currency transaction

        9,665        13,832        10,940        14,169  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       348,350        649,525        837,163        568,182  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

40.

Finance Expenses

Finance expenses for the three and six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019      June 30, 2018  
           Three-
month
period
ended		      Six-
month
period
ended		      Three-
month
period
ended		      Six-
month
period
ended		  

Interest expense

    W       513,152        1,016,529        464,925        927,308  

Losses on sale of financial assets

        203        261        —          —    

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

        —          296        5,427        3,410  

Losses on valuation of derivatives

        25,964        34,930        350,562        24,253  

Losses on transaction of derivatives

        7,145        16,807        5,376        13,885  

Losses on foreign currency translation

        264,971        434,778        414,977        452,024  

Losses on foreign currency transaction

        4,224        8,748        7,757        16,413  

Others

        933        2,619        —          392  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       816,592        1,514,968        1,249,024        1,437,685  
    

 

 

     

 

 

     

 

 

     

 

 

  

Capitalization rates for the six-month periods ended June 30, 2019 and 2018 are 1.60%~3.85% and 2.64%~3.65% respectively.

 

41.

Income Taxes

Income tax expense (benefit) is calculated by adjusting adjustments recognized in the current period, changes in deferred tax assets and liabilities resulting from temporary differences, and income tax expense related to items recognized as other than profit or loss. The Group did not calculate the average effective tax rate for the current and previous periods, because income tax benefit occurred for the both periods.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

42.

Assets Held-for-Sale

Assets held-for-sale as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Land (*1)

    W       —          2,765  

Buildings and Structures (*1)

        —          19,369  

Investments in associates (*2)

        4,628        —    

Investments in subsidiaries (*3)

        747        747  
    

 

 

     

 

 

  
   W       5,375        22,881  
    

 

 

     

 

 

  

 

(*1)

The board of directors of KEPCO Engineering & Construction Company, Inc., a subsidiary of the Group, 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 Group 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. However, since the sale price of the office building has been expected to rise in accordance with the development plan in Yongin, Gyeonggi Province, the company has not actively carried out the procedure for the sale since April 2018. For this reason, the office building no longer satisfies the definition of assets held-for-sale by KIFRS 1105, due to the period required to complete the sale is expected more than one year under the circumstances that can be controlled by the Company. Accordingly, the Group reclassified the office building as investment properties.

(*2)

Ulleungdo Natural Energy Co., Ltd. was in the process of liquidating its business as of June 30, 2019 and has been reclassified to assets held-for-sale, accordingly.

(*3)

KOWEPO India Private Limited was in the process of liquidating its business as of June 30, 2019 and has been reclassified to assets held-for-sale, accordingly.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

43.

Expenses Classified by Nature

Expenses classified by nature for the six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019  
           Selling and
administrative expenses		      Cost of sales      Total  

Raw materials used

    W       —          8,304,989        8,304,989  

Salaries

        391,652        1,816,355        2,208,007  

Retirement benefit expense

        36,801        202,848        239,649  

Welfare and benefit expense

        59,068        208,297        267,365  

Insurance expense

        6,623        47,255        53,878  

Depreciation

        116,043        5,184,017        5,300,060  

Amortization of intangible assets

        40,398        41,997        82,395  

Bad debt expense

        15,724        —          15,724  

Commission

        341,851        174,776        516,627  

Advertising expense

        13,777        4,044        17,821  

Training expense

        3,281        6,003        9,284  

Vehicle maintenance expense

        4,457        3,606        8,063  

Publishing expense

        1,471        1,415        2,886  

Business promotion expense

        1,493        2,001        3,494  

Rent expense

        14,159        89,584        103,743  

Telecommunication expense

        4,357        4,170        8,527  

Transportation expense

        453        2,243        2,696  

Taxes and dues

        41,076        268,046        309,122  

Expendable supplies expense

        3,207        14,487        17,694  

Water, light and heating expense

        6,568        17,213        23,781  

Repairs and maintenance expense

        29,117        932,408        961,525  

Ordinary development expense

        78,583        232,505        311,088  

Travel expense

        8,546        33,900        42,446  

Clothing expense

        2,136        2,955        5,091  

Survey and analysis expense

        429        1,745        2,174  

Membership fee

        746        11,333        12,079  

Power purchase

        —          9,474,179        9,474,179  

Others

        61,635        881,895        943,530  
    

 

 

     

 

 

     

 

 

  
   W       1,283,651        27,964,266        29,247,917  
    

 

 

     

 

 

     

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

43.

Expenses Classified by Nature, Continued

 

Expenses classified by nature for the six-month periods ended June 30, 2019 and 2018 are as follows, continued:

 

In millions of won          June 30, 2018  
           Selling and
administrative expenses		      Cost of sales      Total  

Raw materials used

    W       —          9,477,774        9,477,774  

Salaries

        376,145        1,731,556        2,107,701  

Retirement benefit expense

        31,359        181,032        212,391  

Welfare and benefit expense

        55,600        202,073        257,673  

Insurance expense

        7,441        48,069        55,510  

Depreciation

        106,560        4,878,477        4,985,037  

Amortization of intangible assets

        26,184        33,504        59,688  

Bad debt expense

        18,068        —          18,068  

Commission

        346,096        203,874        549,970  

Advertising expense

        13,348        3,949        17,297  

Training expense

        3,613        5,009        8,622  

Vehicle maintenance expense

        5,038        3,610        8,648  

Publishing expense

        1,528        1,563        3,091  

Business promotion expense

        1,540        2,101        3,641  

Rent expense

        17,348        77,532        94,880  

Telecommunication expense

        11,736        39,570        51,306  

Transportation expense

        225        2,137        2,362  

Taxes and dues

        34,244        247,660        281,904  

Expendable supplies expense

        2,641        14,409        17,050  

Water, light and heating expense

        6,836        17,187        24,023  

Repairs and maintenance expense

        31,863        983,398        1,015,261  

Ordinary development expense

        84,603        243,328        327,931  

Travel expense

        6,964        33,647        40,611  

Clothing expense

        2,771        2,044        4,815  

Survey and analysis expense

        335        1,796        2,131  

Membership fee

        669        5,692        6,361  

Power purchase

        —          9,012,749        9,012,749  

Others

        61,396        1,150,043        1,211,439  
    

 

 

     

 

 

     

 

 

  
   W       1,254,151        28,603,783        29,857,934  
    

 

 

     

 

 

     

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

44.

Earnings (Loss) Per Share

 

(1)

Basic earnings (loss) per share for the six-month periods ended June 30, 2019 and 2018 are as follows:

 

In won          June 30, 2019      June 30, 2018  

Type

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

Basic earnings (loss) per share

    W       (697 )       (1,924 )       (1,479 )       (1,911 ) 

 

(2)

Net profit (loss) for the period and weighted average number of common shares used in the calculation of basic earnings (loss) per share for the six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won except number of shares          June 30, 2019      June 30, 2018  

Type

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

Net profit (loss) attributable to controlling interest

    W       (447,546 )       (1,235,344 )       (949,219 )       (1,226,489 ) 

Profit (loss) used in the calculation of total basic earnings per share

        (447,546 )       (1,235,344 )       (949,219 )       (1,226,489 ) 

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 (loss) per share for the six-month periods ended June 30, 2019 and 2018 are as follows:

 

In number of shares          June 30, 2019      June 30, 2018  

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 (loss) per share are same as basic earnings (loss) per share for the six-month periods ended June 30, 2019 and 2018.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management

 

(1)

Capital risk management

The Group manages its capital to ensure that entities in the Group 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 Group consists of net debt (offset by cash and cash equivalents) and equity. The Group’s overall capital risk management strategy remains consistent with the prior year.

Details of the Group’s capital management accounts as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019     December 31, 2018  

Total borrowings and debt securities

    W        65,521,958       61,034,627  

Cash and cash equivalents

         1,308,117       1,358,345  
     

 

 

    

 

 

  

Net borrowings and debt securities

         64,213,841       59,676,282  
     

 

 

    

 

 

  

Total shareholder’s equity

    W        69,791,236       71,092,762  
     

 

 

    

 

 

  

Debt to equity ratio

         92.01 %      83.94 % 

 

(2)

Financial risk management

The Group is exposed to various risks related to its financial instruments, such as, market risk (currency risk, interest rate risk, price risk), credit risk. The Group monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. The Group uses derivative financial instruments to hedge certain risk exposures. The Group’s overall financial risk management strategy remains consistent with the prior year.

 

  (i)

Credit risk

Credit risk is the risk of finance loss to the Group 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 Group makes transactions with are reputable financial institutions, the credit risk from them are considered limited. The Group decides credit transaction limits based on evaluation of client’s credit, through information obtained from the credit bureau and disclosed financial position at committing contracts.

 

  ①

Credit risk management

Electricity sales, the main operations of the Group are the necessity for daily life and industrial activities of Korean nationals, and have importance as one of the national key industries. The Group dominates the domestic market supplying electricity to customers. The Group is not exposed to significant credit risk as customers of the Group are diverse and are from various industries and areas. The Group uses publicly available information and its own internal data related to trade receivables, to rate its major customers and to measure the credit risk that a counter party will default on a contractual obligation. For the incurred but not recognized loss, it is measured considering overdue period.

 

  ②

Impairment and allowance account

In accordance with the Group policies, individual material financial assets are assessed on a regular basis, trade receivables that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Value of the acquired collateral (including the confirmation of feasibility) and estimated collectable amounts are included in this assessment.

Allowance for bad debts assessed on a collective basis are recognized for (i) the group of assets which individually are not material and (ii) incurred but not recognized losses that are assessed using statistical methods, judgment and past experience.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

45.

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 Group’s level of maximum exposure to credit risk as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Cash and cash equivalents

    W       1,308,117        1,358,345  

Financial assets at fair value through profit or loss

        2,200,495        920,935  

Derivative assets (trading)

        149,551        37,631  

Equity investment at fair value through other comprehensive income

        403,816        399,495  

Financial assets at amortized cost

        12,350        14,042  

Loans

        727,944        718,674  

Long-term/short-term financial instruments

        2,414,387        2,318,027  

Derivative assets (applying hedge accounting)

        188,330        64,704  

Trade and other receivables

        8,827,127        9,613,437  

Financial guarantee contracts (*)

        2,999,972        1,310,817  

 

(*)

Maximum exposure associated with the financial guarantee contracts is the maximum amounts of the obligation.

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 Group’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.

 

  (iii)

Sensitivity analysis

Significant assets and liabilities with uncertainties in underlying assumptions

 

  ①

Defined benefit obligation

A sensitivity analysis of defined benefit obligation assuming a 1% increase and decrease movements in the actuarial valuation assumptions as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019     December 31, 2018  

Type

   

Accounts

          1% Increase     1% Decrease     1% Increase     1% Decrease  

Future salary increases

   

Increase (decrease) in defined benefit obligation

    W       491,987       (427,336 )      416,956       (363,820 ) 

Discount rate

   

Increase (decrease) in defined benefit obligation

        (427,808)       506,748       (377,221 )      445,833  

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, 2019 and 2018 are W8,864 million and W7,357 million, respectively.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management, Continued

 

(2)

Financial risk management, continued

 

  ②

Provisions

Changes in provisions due to movements in underlying assumptions as of June 30, 2019 and December 31, 2018 are as follows:

 

Type

   

Accounts

    June 30, 2019     December 31, 2018  

PCBs

    Inflation rate      1.27 %      1.27 % 
   Discount rate      2.18 %      2.18 % 

Nuclear plants

    Inflation rate      1.21 %      1.21 % 
   Discount rate      2.94 %      2.94 % 

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, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Type

   

Accounts

          0.1%
Increase		      0.1%
Decrease		      0.1%
Increase		      0.1%
Decrease		  

Discount rate

    PCBs    W       (554 )       557        (623 )       627  
   Nuclear plants        (253,770 )       260,695        (256,513 )       263,595  
   Spent fuel        (51,607 )       53,621        (49,182 )       51,098  

Inflation rate

    PCBs        561        (559 )       632        (629 ) 
   Nuclear plants        299,286        (291,297 )       294,984        (287,110 ) 
   Spent fuel        54,396        (52,424 )       51,837        (49,961 ) 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management, Continued

 

(2)

Financial risk management, continued

 

Management judgment effected by uncertainties in underlying assumptions

 

  ①

Foreign currency risk

The Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities as of June 30, 2019 and December 31, 2018 are as follows:

 

In thousands of foreign currencies    Assets      Liabilities  

Type

    June 30, 2019      December 31, 2018      June 30, 2019      December 31, 2018  

AED

      10,821        10,513        26,196        5,890  

AUD

      142        143        412,646        717,712  

BDT

      81,934        71,575        910        1,175  

BWP

      1,467        1,214        —          —    

CAD

      114        96        —          4  

CHF

      —          —          200,000        400,000  

CNY

      —          —          26,140        26,140  

CZK

      —          —          1,940        —    

EUR

      1,088        337        69,100        105,673  

GBP

      —          —          28        1  

GHS

      25,879        25,794        —          —    

HKD

      —          —          1,648,753        1,650,000  

IDR

      170,814        60,568        —          206,935  

INR

      1,104,825        1,228,795        188,345        183,963  

JOD

      702        2,764        6        5  

JPY

      102,058        35,935        326,654        390,921  

KZT

      319        319        —          —    

MGA

      4,191,469        3,318,447        95,074        170,641  

MMK

      33,910        25,208        —          —    

PHP

      218,735        709,285        127,082        66,985  

PKR

      333,218        305,542        4,039        3,588  

SAR

      2,455        2,024        —          —    

SEK

      —          —          449,062        450,000  

USD

      1,610,116        1,422,510        9,646,361        8,103,602  

UYU

      112,121        39,898        3,993        4,253  

VND

      841,285        —          —          —    

ZAR

      149        170        5        4  

A sensitivity analysis on the Group’s income for the period assuming a 10% increase and decrease in currency exchange rates as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won         June 30, 2019     December 31, 2018  

Type

         10% Increase     10% Decrease     10% Increase     10% Decrease  

Increase (decrease) of profit before income tax

   W       (1,024,129 )      1,024,129       (887,561 )      887,561  

Increase (decrease) of shareholder’s equity (*)

       (1,024,129 )      1,024,129       (887,561 )      887,561  

 

(*)

The effect on the shareholders’ equity excluding the impact of income taxes.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management, Continued

 

(2)

Financial risk management, continued

 

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, 2019 and December 31, 2018. To manage its foreign currency risk related to foreign currency denominated receivables and payables, the Group has a policy to enter into cross-currency swap agreements. In addition, to manage its foreign currency risk related to foreign currency denominated expected sales transactions and purchase transactions, the Group enters into currency forward agreements.

 

  ②

Interest rate risk

The Group 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 Group’s borrowings and debt securities with floating interest rates as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won             

Type

          June 30, 2019      December 31, 2018  

Short-term borrowings

    W       —          24,235  

Long-term borrowings

        2,529,303        2,358,860  
    

 

 

     

 

 

  
   W       2,529,303        2,383,095  
    

 

 

     

 

 

  

A sensitivity analysis on the Group’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, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Type

          1% Increase      1% Decrease      1% Increase      1% Decrease  

Increase (decrease) of profit before income tax

    W       (25,293 )       25,293        (23,831 )       23,831  

Increase (decrease) of shareholder’s equity (*)

        (25,293 )       25,293        (23,831 )       23,831  

 

(*)

The effect on the shareholders’ equity excluding the impact of income taxes.

To manage its interest rate risks, the Group enters into certain interest swap agreements or maintains an appropriate mix of fixed and floating rate borrowings. These sensitivity analysis above is conducted without consideration of hedge effect of related derivatives.

 

  ③

Electricity rates risk

The Group 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 Group’s income for the period assuming a 1% increase and decrease in price of electricity for the six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won          June 30, 2019      June 30, 2018  

Type

          1% Increase      1% Decrease      1% Increase      1% Decrease  

Increase (decrease) of profit before income tax

    W       268,221        (268,221 )       271,311        (271,311 ) 

Increase (decrease) of shareholder’s equity (*)

        268,221        (268,221 )       271,311        (271,311 ) 

 

(*)

The effect on the shareholders’ equity excluding the impact of income taxes.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management, Continued

 

(2)

Financial risk management, continued

 

  (iv)

Liquidity risk

The Group has established an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group 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 Group 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 Group 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, 2019 and December 31, 2018. 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, 2019  

Type

          Less than
1 year		      1~2 Years      2~5 Years      More than
5 years		      Total  

Borrowings and debt securities

    W       12,042,740        8,182,365        29,279,409        28,667,399        78,171,913  

Lease liabilities

        646,693        547,223        1,641,670        2,836,886        5,672,472  

Trade and other payables

        5,146,231        284,317        707,342        1,770,438        7,908,328  

Financial guarantee contracts (*)

        901,573        —          35,904        2,062,495        2,999,972  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W       18,737,237        9,013,905        31,664,325        35,337,218        94,752,685  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

In millions of won          December 31, 2018  

Type

          Less than
1 year		      1~2 Years      2~5 Years      More than
5 years		      Total  

Borrowings and debt securities

    W       10,204,471        9,274,378        28,143,311        25,312,534        72,934,694  

Finance lease liabilities

        87,709        87,709        141,074        65,250        381,742  

Trade and other payables

        6,348,195        150,479        375,661        2,188,950        9,063,285  

Financial guarantee contracts (*)

        91,722        855,488        363,607        —          1,310,817  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W       16,732,097        10,368,054        29,023,653        27,566,734        83,690,538  
    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

(*)

This represents the total guarantee amounts associated with the financial guarantee contracts. Financial guarantee liabilities which are recognized as of June 30, 2019 and December 31, 2018 are W90,698 million and W15,586 million, respectively.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management, Continued

 

(2)

Financial risk management, continued

 

The expected maturities for non-derivative financial assets as of June 30, 2019 and December 31, 2018 in detail are as follows:

 

In millions of won           June 30, 2019  

Type

           Less than 1 year      1~5 Years      More than
5 years		      Other (*)      Total  

Cash and cash equivalents

    W        1,308,117        —          —          —          1,308,117  

Equity investment at fair value through other comprehensive income

         —          —          —          403,816        403,816  

Financial assets at amortized cost

         11,010        1,257        83        —          12,350  

Loans

         113,830        340,839        297,187        14,077        765,933  

Long-term/short-term financial instruments

         2,014,027        211,830        18        188,512        2,414,387  

Financial assets at fair value through profit or loss

         1,522,187        76        —          678,232        2,200,495  

Trade and other receivables

         7,074,733        955,299        753,314        51,997        8,835,343  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W        12,043,904        1,509,301        1,050,602        1,336,634        15,940,441  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

In millions of won           December 31, 2018  

Type

           Less than 1 year      1~5 Years      More than
5 years		      Other (*)      Total  

Cash and cash equivalents

    W        1,358,345        —          —          —          1,358,345  

Equity investment at fair value through other comprehensive income

         —          —          —          399,495        399,495  

Financial assets at amortized cost

         11,956        2,086        —          —          14,042  

Loans

         123,646        314,744        319,988        —          758,378  

Long-term/short-term financial instruments

         1,869,286        278,899        164,057        5,785        2,318,027  

Financial assets at fair value through profit or loss

         313,893        81,828        483,398        41,816        920,935  

Trade and other receivables

         7,795,619        1,067,800        701,743        57,651        9,622,813  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   W        11,472,745        1,745,357        1,669,186        504,747        15,392,035  
     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

(*)

The maturities cannot be presently determined.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management, Continued

 

(2)

Financial risk management, continued

 

Derivative liabilities classified by maturity periods from reporting date to maturity date of contract as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  

Type

          Less than
1 year		     1~2 Years     2~5 Years     More than
5 years		     Total  

Net settlement

             

- Trading

    W       —         —         —         —         —    

Gross settlement

             

- Trading

        (3,589 )      —         (22,550 )      (32,950 )      (59,089 ) 

- Hedging

        (1,903 )      (39,661 )      (104,574 )      (33,525 )      (179,663 ) 
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
   W       (5,492 )      (39,661 )      (127,124 )      (66,475 )      (238,752 ) 
    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

 

In millions of won          December 31, 2018  

Type

          Less than
1 year		      1~2 Years     2~5 Years      More than
5 years		     Total  

Net settlement

               

- Trading

    W       —          —         —          —         —    

Gross settlement

               

- Trading

        5,734        16,565       28,283        40,124       90,706  

- Hedging

        5,154        (43,447 )      71,840        (40,917 )      (7,370 ) 
    

 

 

     

 

 

    

 

 

     

 

 

    

 

 

  
   W       10,888        (26,882 )      100,123        (793 )      83,336  
    

 

 

     

 

 

    

 

 

     

 

 

    

 

 

  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management, Continued

 

(3)

Fair value risk

 

The fair value of the Group’s actively-traded financial instruments (i.e. FVTPL, FVOCI, etc.) is based on the traded market-price as of the reporting period end. The fair value of the Group’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 Group uses that technique.

For trade receivables and payables, the Group considers the carrying value net of impairment as fair value. While for disclosure purposes, the fair value of financial liabilities is estimated by discounting 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, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019      December 31, 2018  

Type

          Book value      Fair value      Book value      Fair value  

Assets recognized at fair value

              

Financial assets at fair value through other comprehensive income

    W       403,816        403,816        399,495        399,495  

Derivative assets (trading)

        149,551        149,551        37,631        37,631  

Derivative assets (applying hedge accounting)

        188,330        188,330        64,704        64,704  

Financial assets at fair value through profit or loss

        2,200,495        2,200,495        920,935        920,935  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       2,942,192        2,942,192        1,422,765        1,422,765  
    

 

 

     

 

 

     

 

 

     

 

 

  

Assets carried at amortized cost

              

Financial assets at amortized cost

    W       12,350        12,350        14,042        14,042  

Loans and receivables

        727,944        727,944        718,674        718,674  

Long-term financial instruments

        8,827,127        8,827,127        448,741        448,741  

Short-term financial instruments

        400,360        400,360        1,869,286        1,869,286  

Trade and other receivables

        2,014,027        2,014,027        9,613,437        9,613,437  

Cash and cash equivalents

        1,308,117        1,308,117        1,358,345        1,358,345  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       13,289,925        13,289,925        14,022,525        14,022,525  
    

 

 

     

 

 

     

 

 

     

 

 

  

Liabilities recognized at fair value

              

Derivative liabilities (trading)

    W       40,717        40,717        99,010        99,010  

Derivative liabilities (applying hedge accounting)

        136,560        136,560        213,153        213,153  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       177,277        177,277        312,163        312,163  
    

 

 

     

 

 

     

 

 

     

 

 

  

Liabilities carried at amortized cost

              

Secured borrowings

    W       238,855        238,855        741,029        741,029  

Unsecured bond

        60,014,254        62,848,636        56,603,988        58,804,070  

Lease liabilities

        4,951,297        4,951,297        283,806        283,806  

Unsecured borrowings

        5,268,849        5,281,539        3,522,602        3,950,517  

Trade and other payables (*)

        7,908,328        7,908,328        9,063,285        9,063,285  

Bank overdraft

        —          —          167,008        167,008  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       78,381,583        81,228,655        70,381,718        73,009,715  
    

 

 

     

 

 

     

 

 

     

 

 

  

 

(*)

Excludes lease liabilities

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

45.

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, 2019 and December 31, 2018 are as follows:

 

Type

    June 30, 2019   December 31, 2018

Derivatives

        0.63 % ~ 4.16%       0.02 % ~ 4.16%

Borrowings and debt securities

        0.50 % ~ 7.31%       0.51 % ~ 5.14%

Lease

        1.76 % ~ 10.83%       3.50 % ~ 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, 2019 and December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  

Type

          Level 1      Level 2      Level 3      Total  

Financial assets at fair value

              

Financial assets at fair value through other comprehensive income

    W       214,198        —          189,618        403,816  

Derivative assets

        —          337,881        —          337,881  

Financial assets at fair value through profit or loss

        —          2,195,352        5,143        2,200,495  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       214,198        2,533,233        194,761        2,942,192  
    

 

 

     

 

 

     

 

 

     

 

 

  

Financial liabilities at fair value

              

Derivative liabilities

    W       —          175,122        2,155        177,277  

 

In millions of won          December 31, 2018  

Type

          Level 1      Level 2      Level 3      Total  

Financial assets at fair value

              

Financial assets at fair value through other comprehensive income

    W       210,056        —          189,439        399,495  

Derivative assets

        —          100,490        1,845        102,335  

Financial assets at fair value through profit or loss

        106,600        809,283        5,052        920,935  
    

 

 

     

 

 

     

 

 

     

 

 

  
   W       316,656        909,773        196,336        1,422,765  
    

 

 

     

 

 

     

 

 

     

 

 

  

Financial liabilities at fair value

              

Derivative liabilities

    W       —          310,008        2,155        312,163  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management, Continued

 

(3)

Fair value risk, continued

 

The fair value of financial assets (FVTPL and FVOCI) publicly traded is measured at the closing bid price quoted at the end of the reporting period. Meanwhile, the fair value of unquoted financial assets (FVTPL and FVOCI) 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.

Changes of financial assets and liabilities which are classified as level 3 for the six-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won          June 30, 2019  
           Beginning
balance		      Effect of
change in
accounting
policy		      Acquisition      Reclassified
category		      Valuation     Disposal     Foreign
currency
translation		      Ending
balance		  

Financial assets at fair value

                        

Financial assets at fair value through profit or loss Cooperative

    W       5,052        —          40        —          51       —         —          5,143  

Financial assets at fair value through other comprehensive income Unlisted securities

        189,439        —          —          —          (47 )      (916 )      1,142        189,618  
In millions of won          December 31, 2018  
           Beginning
balance		      Effect of
change in
accounting
policy		      Acquisition      Reclassified
category		      Valuation     Disposal     Foreign
currency
translation		      Ending
balance		  

Financial assets at fair value

                        

Financial assets at fair value through profit or loss Cooperative

    W       —          5,038        —          —          14       —         —          5,052  

Financial assets at fair value through other comprehensive income Unlisted securities

        —          197,450        —          —          (11,744 )      (326 )      4,059        189,439  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

46.

Service Concession Arrangements

 

(1)

Gas Complex • Thermal Power Plant at Ilijan, Philippines (BOT)

 

  (i)

Significant terms and concession period of the arrangement

The Group has entered into a contract with National Power Corporation (the “NPC”), based in the Republic of the Philippines whereby the Group can collect the electricity rates which are composed of fixed costs and variable costs during the concession period from 2002 to 2022 after building, rehabilitating, and operating the power plant.

 

  (ii)

Rights and classification of the arrangement

The Group 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 Group has an obligation to transfer its ownership of the power plant to NPC.

 

  (iii)

The Group’s expected future collections of service concession arrangements as of June 30, 2019 are as follows:

 

In millions of won             

Type

          Amounts  

Less than 1 year

    W       120,833  

1~2 years

        120,833  

2~3 years

        110,762  
    

 

 

  
   W       352,428  
    

 

 

  

 

(2)

Hydroelectric Power Generation at Semangka, Indonesia (BOT)

 

  (i)

Significant terms and concession period of the arrangement

The Group has entered into a contract with PT. Perusahaan Listrik Negara (the “PLN”) whereby the Group 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 (2018~2048) subsequent to the completion of plant construction.

 

  (ii)

Rights and classification of the arrangement

The Group has the rights to use and own the power plant during the concession period from 2018 to 2048. At the end of the concession period, PNL has an option to take over the ownership of the power plant from the Group.

 

  (iii)

The Group’s expected future collections of service concession arrangements as of June 30, 2019 are as follows:

 

In millions of won             

Type

          Amounts  

Less than 1 year

    W       28,883  

1~2 years

        28,815  

2~3 years

        28,847  

Over 3 years

        598,867  
    

 

 

  
   W       685,412  
    

 

 

  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties

 

(1)

Related parties of the Group as of June 30, 2019 are as follows:

 

Type

   

Related party

Parent    Republic of Korea government

Subsidiaries

(114 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 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, 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 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 Whitefield, LLC, EWP Renewable Corporation, EWPRC Biomass Holdings, LLC, Springfield Power, LLC, HeeMang Sunlight Power Co., Ltd., Fujeij Wind Power Company, KOSPO Youngnam Power Co., Ltd., HI Carbon Professional Private Special Asset Investment Trust 1, Chitose Solar Power Plant LLC., Solar School Plant Co., Ltd., KEPCO Energy Solution Co. Ltd., KOSPO Power Services Limitada, KOEN Bylong Pty., Ltd., KOWEPO Bylong Pty., Ltd., KOSPO Bylong Pty., Ltd., EWP Bylong Pty., Ltd., KOWEPO Lao International, KOMIPO Bylong Pty Ltd., Energy New Industry Specialized Investment Private Investment Trust., KEPCO US Inc., KEPCO Alamosa LLC, KEPCO Solar of Alamosa, LLC (formerly, Cogentrix of Alamosa, LLC), KEPCO-LG CNS Mangilao Holdings LLC, Mangilao Investment LLC, KEPCO-LG CNS Mangilao Solar, LLC, Jeju Hanlim Offshore Wind Co., Ltd., PT, Siborpa Eco Power, e-New Industry LB Fund 1, Songhyun e-New Industry Fund, BSK E-New Industry Fund VII, PT. Korea Energy Indonesia, KOLAT SpA, KEPCO California, LLC, KEPCO Mojave Holdings, LLC, Incheon Fuel Cell Co., Ltd., KOEN Service Co., Ltd., KOMIPO Service Co., Ltd., KOWEPO Service Co., Ltd., KOSPO Service Co., Ltd., EWP Service Co., Ltd., PT. KOMIPO Energy Indonesia, KNF partners Co., Ltd., KOSPO USA Inc., Nambu USA LLC, Tamra Offshore Wind Power Co., Ltd., KEPCO MCS Co., Ltd., KEPCO FMS Co., Ltd., Firstkeepers Co., Ltd., Secutec Co., Ltd., SE Green Energy Co., Ltd.

Associates

(61 associates)

    Dongducheon Dream Power Co., Ltd., Korea Gas Corporation, Daegu Photovoltaic Co., Ltd., Jeongam Wind Power Co., Ltd., Korea Power Engineering Service Co., Ltd., Heang Bok Do Si Photovoltaic Power Co., Ltd., Korea Electric Power Industrial Development 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 Materials Co., Ltd., Gangwon Wind Power Co., Ltd., Gwangyang Green Energy Co., Ltd., Hyundai Green Power Co., Ltd., Korea Power Exchange, Hyundai Energy Co., Ltd., Ecollite Co., Ltd., Taebaek Wind Power Co., Ltd., Taeback Guinemi Wind Power Co., Ltd., Pyeongchang Wind Power Co., Ltd., Daeryun 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, Nepal Water & Energy Development Company Private Limited, 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., Gunsan Bio Energy Co., Ltd., Korea Electric Vehicle Charging Service, Korea Nuclear Partners Co., Ltd., Korea Electric Power Corporation Fund, Energy Infra Asset Management Co., Ltd., Daegu clean Energy Co., Ltd., YaksuESS Co., Ltd, PND solar., Ltd, Hyundai Eco Energy Co., Ltd., YeongGwang Yaksu Wind Electric. Co., Ltd, Green Energy Electricity Generation Co., Ltd., Korea Energy Solutions Co., Ltd, ITR Co., Ltd, Structure test network Co., Ltd., Namjeongsusang Solar Power Operatin Co., Ltd., Indeck Niles Development, LLC, Indeck Niles Asset Management, LLC

Joint ventures

(58 joint ventures)

    Daegu Green Power Co., Ltd., KEPCO SPC Power Corporation, Daejung Offshore Wind Power Co., Ltd., KAPES, 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 Co., Ltd., Datang Chifeng Renewable Power Co., Ltd., Rabigh Electricity Company, Rabigh Operation & Maintenance Company Limited, 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., Amman Asia Electric Power Company, Kelar S.A, PT. Tanjung Power Indonesia, Nghi Son 2 Power LLC, Daehan Wind Power PSC, MOMENTUM, Barakah One Company, Nawah Energy Company, Yeonggwang Wind Power Co., Ltd., Chester Solar IV SpA, Chester Solar V SpA, Diego de Almagro Solar SpA, South Jamaica Power Company Limited, Daesan Green Energy Co.,Ltd., RE Holiday Holdings LLC, RE Pioneer Holdings LLC, RE Barren Ridge 1 Holdings LLC, RE Astoria 2 LandCo LLC, RE Barren Ridge LandCo LLC, Laurel SpA, KIAMCO KOWEPO Bannerton Hold Co Pty Ltd, Chile Solar JV SpA, Taebaek Gadeoksan Wind Power Co., Ltd., Cheong-Song Noraesan Wind Power Co., Ltd., Chester Solar I SpA, Solar Philippines Calatagan Corporation, Saemangeum Solar Power Co., Ltd., Chungsongmeon BongSan wind power Co., Ltd., Jaeun Resident Wind Power Plant Co., Ltd., DE Energia SpA
Others (3 others)    Korea Development Bank, KEPCO Singapore Holdings Pte., Ltd., Ulleungdo Natural Energy Co., Ltd.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(2)

Transactions between the Company and its subsidiaries are eliminated during the consolidation and are not disclosed in the notes.

 

(3)

Related party transactions for the six-month periods ended June 30, 2019 and 2018 are as follows:

 

  

<Sales and Others>

 

In millions of won                 Sales and others  

Company name

    Transaction type            June 30, 2019      June 30, 2018  

<Associates>

           

Korea Gas Corporation

      Electricity sales    W       71,793        48,475  

Dongducheon Dream Power Co., Ltd.

      Electricity sales          3,045        3,522  

S-Power Co., Ltd.

      Service          3,388        4,403  

Hyundai Green Power Co., Ltd.

      Design service          11,436        11,684  

Korea Electric Power Industrial Development Co., Ltd.

      Service          5,867        8,459  

Daeryun Power Co., Ltd.

      Electricity sales          973        865  

Korea Power Exchange

      Service          3,459        3,100  

Samcheok Eco Materials Co., Ltd.

      Electricity sales          288        194  

Gangwon Wind Power Co., Ltd.

      Electricity sales          2,329        2,323  

Cheongna Energy Co., Ltd.

      Service          7,011        7,324  

Others (Busan Green Energy Co., Ltd. and 36 others)

      Electricity sales          112,104        59,377  

<Joint ventures>

           

GS Donghae Electric Power Co., Ltd.

      Electricity sales          13,057        5,098  

Chun-cheon Energy Co., Ltd.

      Electricity sales          807        593  

Daegu Green Power Co., Ltd.

      Electricity sales          529        471  

Nawah Energy Company

      Service          47,764        22,607  

KAPES, Inc.

      Commission          227        484  

Rabigh Electricity Company

      Service          12,219        16,250  

Seokmun Energy Co., Ltd.

      Service          584        922  

Yeonggwang Wind Power Co., Ltd.

      Electricity sales          75        —    

Others (Yeonggwangbaeksu Wind Power Co., Ltd. and 30 others)

      Electricity sales          54,029        46,724  

<Others>

           

Yeongwol Energy Station Co., Ltd.

      Service          —          373  

DS POWER Co., Ltd.

      Service          —          565  

Korea Development Bank

      Electricity sales          1,880        1,527  
     Interest income          816        2,868  

 

125

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(3)

Related party transactions for the six-month periods ended June 30, 2019 and 2018 are as follows, continued:

 

  

<Purchase and Others>

 

In millions of won                 Purchase and others  

Company name

    Transaction type            June 30, 2019      June 30, 2018  

<Associates>

           

Korea Gas Corporation

      Electricity sales      W       2,173,304        2,725,083  

Dongducheon Dream Power Co., Ltd.

      Electricity sales          344,850        408,864  

S-Power Co., Ltd.

      Service          280,002        230,253  

Hyundai Green Power Co., Ltd.

      Design service          226,596        222,951  

Korea Electric Power Industrial Development Co., Ltd.

      Service          129,167        144,966  

Daeryun Power Co., Ltd.

      Electricity sales          63,673        80,642  

Korea Power Exchange

      Service          68,748        106,553  

Samcheok Eco Materials Co., Ltd.

      Electricity sales          3,889        384  

Gangwon Wind Power Co., Ltd.

      Electricity sales          13,737        15,089  

Cheongna Energy Co., Ltd.

      Service          58,747        58  

Others (Busan Green Energy Co., Ltd. and 36 others)

      Electricity sales          40,018        40,336  

<Joint ventures>

           

GS Donghae Electric Power Co., Ltd.

      Electricity sales          370,440        387,820  

Chun-cheon Energy Co., Ltd.

      Electricity sales          172,257        174,479  

Daegu Green Power Co., Ltd.

      Electricity sales          162,207        156,390  

KAPES, Inc.

      Commission          59,062        75,047  

Seokmun Energy Co., Ltd.

      Service          14,650        11,599  

Yeonggwang Wind Power Co., Ltd.

      Electricity sales          13,660        —    

Others (Yeonggwangbaeksu Wind Power Co., Ltd. and 30 others)

      Electricity sales          13,426        14,378  

<Others>

           

DS POWER Co., Ltd.

      Service          —          4,019  

Korea Development Bank

      Interest expense          2,053        2,322  
     Dividends paid          7        166,880  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(4)

Receivables and payables arising from related party transactions as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won               Receivables      Payables  

Company name

   

Type

          June 30,
2019		      December 31,
2018		      June 30,
2019		      December 31,
2018		  

<Associates>

                 

Korea Gas Corporation

    Trade receivables    W       13,164        9,439        —          —    
   Non-trade receivables and others        394        498        —          —    
   Trade payables        —          —          246,862        601,092  
   Non-trade payables and others        —          —          168        314  

S-Power Co., Ltd.

    Trade receivables        403        922        —          —    
   Non-trade receivables and others        439        34        —          —    
   Trade payables        —          —          28,753        56,897  
   Non-trade payables and others        —          —          —          16  

Dongducheon Dream Power Co., Ltd.

    Trade receivables        638        332        —          —    
   Non-trade receivables and others        268        298        —          —    
   Trade payables        —          —          41,747        74,651  
   Non-trade payables and others        —          —          34        10  

Goseong Green Energy Co., Ltd.

    Non-trade receivables and others        2,629        —          —          —    
   Non-trade payables and others        —          —          45,623        43,020  

Hyundai Green Power Co., Ltd.

    Trade receivables        632        390        —          —    
   Trade payables        —          —          45,858        38,072  

Daeryun Power Co., Ltd.

    Trade receivables        290        178        —          —    
   Trade payables        —          —          3,751        15,845  

Hyundai Energy Co., Ltd.

    Trade receivables        160        57        —          —    
   Non-trade receivables and others        11,404        9,664        —          —    
   Trade payables        —          —          50        259  
   Non-trade payables and others        —          —          9,178        8,021  

Gunsan Bio Energy Co., Ltd.

    Non-trade receivables and others        —          3,458        —          —    

Korea Electric Power Industrial Development Co., Ltd.

    Trade receivables        806        278        —          —    
   Non-trade receivables and others        11        51        —          —    
   Trade payables        —          —          4,492        —    
   Non-trade payables and others        —          —          10,255        13,102  

Noeul Green Energy Co., Ltd.

    Trade receivables        5        3        —          —    
   Non-trade payables and others        —          —          11,307        8,774  

Busan Green Energy Co., Ltd.

    Trade receivables        3        1        —          —    
   Non-trade receivables and others        —          —          15,239        —    
   Non-trade payables and others        —          —          —          10,882  

Korea Power Exchange

    Trade receivables        947        847        —          —    
   Non-trade receivables and others        183        229        —          —    
   Trade payables        —          —          4,054        —    
   Non-trade payables and others        —          —          1,756        1,214  

Others (Gangwon Wind Power Co., Ltd. and 34 others)

    Trade receivables        2,456        721        —          —    
   Non-trade receivables and others        3,588        1,377        —          —    
   Trade payables        —          —          2,076        6,217  
   Non-trade payables and others        —          —          2,986        740  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(4)

Receivables and payables arising from related party transactions as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

In millions of won         Receivables      Payables  

Company name

   

Type

    June 30,
2019		      December 31,
2018		      June 30,
2019		      December 31,
2018		  

<Joint ventures>

               

GS Donghae Electric Power Co., Ltd.

    Trade receivables      461        245        —          —    
   Non-trade receivables and others      338        2,537        —          —    
   Trade payables      —          —          57,379        69,820  
   Non-trade payables and others      —          —          4        59  

Nawah Energy Company

    Trade receivables      41,222        29,614        —          —    
   Non-trade receivables and others      —          253        —          —    

Chun-cheon Energy Co., Ltd.

    Trade receivables      160        20        —          —    
   Non-trade receivables and others      2,119        308        —          —    
   Trade payables      —          —          18,090        33,796  

Daegu Green Power Co., Ltd.

    Trade receivables      172        110        —          —    
   Non-trade receivables and others      17        12        —          —    
   Trade payables      —          —          16,620        32,609  

Amman Asia Electric Power Company

    Non-trade payables and others      —          —          18,709        18,351  

KAPES, Inc.

    Non-trade receivables and others      118        253        —          —    
   Non-trade payables and others      —          —          26,080        338  

Honam Wind Power Co., Ltd.

    Trade payables      —          —          70        432  
   Non-trade payables and others      —          —          4,417        3,573  

Kelar S.A

    Non-trade receivables and others      15,223        —          —          —    

Others (Seokmun Energy Co., Ltd. and 16 others)

    Trade receivables      2,119        784        —          —    
   Non-trade receivables and others      3,144        839        —          —    
   Trade payables      —          —          366        911  
   Non-trade payables and others      —          —          7,076        6,577  

<Others>

               

Korea Development Bank

    Accrued interest income      466        1,147        —          —    
   Non-trade receivables and others      91,715        12,125        —          —    
   Non-trade payables and others      —          —          117        218  
   Derivatives      40,396        27,306        7,243        18,095  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(5)

Loans and others arising from related party transactions as of June 30, 2019 and December 31, 2018 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.

   

W

 

      27,634       49        —         887       28,570  
   (Allowance for doubtful accounts)         (6,065 )      —          —         (1,200 )      (7,265 ) 

Associates

    PT. Cirebon Electric Power         8,696       —          (3,419 )      604       5,881  

Associates

    Xe-Pian Xe-Namnoy Power Co., Ltd.         1,413       —          —         —         1,413  

Associates

    PT Wampu Electric Power         14,880       —          —         1,057       15,937  

Associates

    Gunsan Bio Energy Co., Ltd.         9,396       3,000        —         —         12,396  

Associates

    Hyundai Energy Co., Ltd.         2,465       —          —         —         2,465  
   (Allowance for doubtful accounts)         (2,465 )      —          —         —         (2,465 ) 

Joint ventures

    Kelar S.A         48,694       —          —         1,685       50,379  

Joint ventures

    Chester Solar IV SpA         —         1,659        —         16       1,675  

Joint ventures

    Chun-cheon Energy Co., Ltd.         616       1,232        —         —         1,848  

Joint ventures

    Chester Solar V SpA         —         526        —         5       531  

Joint ventures

    Diego de Almagro Solar SpA         —         2,065        —         20       2,085  

Joint ventures

    Dangjin Eco Power Co., Ltd.         —         2,600        —         —         2,600  

Joint ventures

    DE energia SpA         —         6,799        —         (173 )      6,626  
        

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  
      W        105,264       17,930        (3,419 )      2,901       122,676  
        

 

 

    

 

 

     

 

 

    

 

 

    

 

 

  

 

(6)

Borrowings arising from related party transactions as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won  

Related parties

    Type             Beginning
balance		      Borrowings      Repayment     Others      Ending
balance		  

Korea Development Bank

      Facility        W        66,793        —          (8,507 )      —          58,286  
     Others           4,154        —          (178 )      —          3,976  
     Operating funds           81,000        —          (32,000 )      —          49,000  
     Syndicated Loan           17,276        —          (963 )      997        17,310  

 

(7)

Guarantees provided to associates or joint ventures as of June 30, 2019 are as follows:

 

In millions of won and thousands of foreign currencies

 

Primary guarantor

   

Principal obligor

   

Type of guarantees

    Credit limit     

Guarantee

Korea Electric Power Corporation

   

Shuweihat Asia Operation & Maintenance Company

    Performance guarantees    USD  11,000      SAPCO

Korea Electric Power Corporation

   

Rabigh Operation & Maintenance Company Limited

   

Performance guarantees and others

    USD 1,386      RABEC

Korea Electric Power Corporation

    Barakah One Company    Debt guarantees    USD  900,000     

Export-Import Bank of Korea and others

     

Performance guarantees and others

    USD  3,776,561     

Export-Import Bank of Korea and others

Korea Electric Power Corporation

    RE Holiday Holdings LLC    Performance guarantees    USD 223,000     

EPS Renewables Holdings, LLC, Santander Bank and others

Korea Electric Power Corporation

    RE Pioneer Holdings LLC    Performance guarantees    USD 170,000     

EPS Renewables Holdings, LLC, Santander Bank and others

Korea Electric Power Corporation

   

RE Barren Ridge 1 Holdings LLC

    Performance guarantees    USD 149,000     

Firstar Development, LLC,
Santander Bank and others

Korea Electric Power Corporation

    Nghi Son 2 Power LLC    Performance guarantees    USD 27,930      SMBC Ho Chi Minh and others

Korea Western Power Co., Ltd.

    Cheongna Energy Co., Ltd.   

Collateralized money invested

Guarantees for supplemental funding and others (*1)

    KRW

 

 3,648

—

  

 

   

KEB Hana Bank and others

KEB Hana Bank and others

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(7)

Guarantees provided to associates or joint ventures as of June 30, 2019 are as follows, continued:

 

In millions of won and thousands of foreign currencies

 

Primary guarantor

   

Principal obligor

   

Type of guarantees

   

Credit limit

   

Guarantee

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

    KRW 72,479   

Krung Thai Bank

     

Impounding bonus guarantees

    USD 5,000    SK E&C

Korea Western Power Co., Ltd.

   

Rabigh Operation & Maintenance Company Limited

   

Performance guarantees and others

    SAR 5,600   

Saudi Arabia British Bank

Korea Western Power Co., Ltd.

   

Daegu Photovoltaic Co., Ltd.

   

Collateralized money invested

    KRW 1,950    Korea Development Bank

Korea Western Power Co., Ltd.

   

Dongducheon Dream Power Co., Ltd.

   

Collateralized money invested (*2)

    KRW 37,494   

Kookmin Bank and others

     

Debt guarantees

   

KRW 20,300

   

BNK Securities and others

Korea Western Power Co., Ltd.

    PT. Mutiara Jawa   

Collateralized money invested

    KRW 1,181   

Woori Bank

Korea Western Power Co., Ltd.

   

Heang Bok Do Si Photovoltaic Power Co., Ltd.

   

Collateralized money invested

    KRW 215    Nonghyup Bank

Korea Western Power Co., Ltd.

   

Shin Pyeongtaek Power Co., Ltd.

   

Collateralized money invested

    KRW 64,168   

Kookmin Bank

     

Guarantees for supplemental funding (*1)

    —     

Kookmin Bank

Korea East-West Power Co., Ltd.

   

Busan Shinho Solar Power Co., Ltd.

   

Collateralized money invested

    KRW 4,759   

Korea Development Bank and others

Korea East-West Power Co., Ltd.

   

Seokmun Energy Co., Ltd.

   

Collateralized money invested

    KRW 17,293    Kookmin Bank and others

Korea East-West Power Co., Ltd.

    Chun-cheon Energy Co., Ltd.   

Collateralized money invested

    KRW 39,317   

Kookmin Bank and others

     

Guarantees for supplemental funding (*1)

    KRW 20,000    Kookmin Bank and others

Korea East-West Power Co., Ltd.

   

Honam Wind Power Co., Ltd.

   

Collateralized money invested

    KRW 4,426   

Shinhan Bank and others

Korea East-West Power Co., Ltd.

   

GS Donghae Electric Power Co., Ltd.

   

Collateralized money invested

    KRW 249,461   

Korea Development Bank and others

Korea East-West Power Co., Ltd.

   

Yeonggwangbaeksu Wind Power Co., Ltd.

   

Collateralized money invested

    KRW 2,793   

Kookmin Bank and others

Korea East-West Power Co., Ltd.

   

Yeonggwang Wind Power Co., Ltd.

   

Collateralized money invested

    KRW 20,097   

KDB Capital Corporation and others

Korea East-West Power Co., Ltd.

   

Daesan Green Energy Co., Ltd.

   

Collateralized money invested

    KRW 17,281   

IBK

Korea East-West Power Co., Ltd.

   

Taebaek Gadeoksan Wind Power Co., Ltd.

   

Collateralized money invested

    KRW 8,420   

Samsung Fire & Marine Insurance Co., Ltd. and others

Korea East-West Power Co., Ltd.

    PT. Tanjung Power Indonesia    Debt guarantees    USD 24,544   

Sumitomo mitsui banking

     

Other guarantees

    USD 3,150    PT Adaro Indonesia

Korea East-West Power Co., Ltd.

   

South Jamaica Power Company Limited

    Performance guarantees    USD 14,400   

Societe Generale

EWP Barbados 1 SRL

   

South Jamaica Power Company Limited

   

Guarantees for supplemental funding (*1, 3)

    USD 13,040   

JCSD Trustee Services Limited and others

Korea Southern Power Co., Ltd.

    KNH Solar Co., Ltd.   

Collateralized money invested

    KRW 2,257   

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 26,235   

Korea Development Bank and others

     

Guarantees for supplemental funding and others (*1)

    —     

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(7)

Guarantees provided to associates or joint ventures as of June 30, 2019 are as follows, continued:

 

In millions of won and thousands of foreign currencies

 

Primary guarantor

   

Principal obligor

   

Type of guarantees

   

Credit limit

   

Guarantee

Korea Southern Power Co., Ltd.

   

Changjuk Wind Power Co., Ltd.

   

Collateralized money invested

    KRW 8,699   

Shinhan Bank

     

Guarantees for supplemental funding (*1)

    —      Shinhan Bank

Korea Southern Power Co., Ltd.

    Daegu Green Power Co., Ltd.   

Collateralized money invested

    KRW 44,123   

Shinhan Bank and others

Korea Southern Power Co., Ltd.

   

Kelar S.A

   

Performance guarantees

    USD 63,707   

KEB Hana Bank, SMBC, Mizuho Bank, MUFG, Natixis

Korea Southern Power Co., Ltd.

    Daehan Wind Power PSC    Debt guarantees    USD 18,098   

Shinhan Bank, Standard Chartered

     

Performance guarantees

    USD 3,000    Shinhan Bank
     

Guarantees for supplemental funding (*1)

    —     

Shinhan Bank

Korea Southern Power Co., Ltd.

   

Pyeongchang Wind Power Co., Ltd.

   

Collateralized money invested

    KRW 5,229   

Woori Bank and Shinhan Bank and others

      Performance guarantees    —     

Woori Bank and Shinhan Bank and others

Korea Southern Power Co., Ltd.

   

Taebaek Wind Power Co., Ltd.

   

Guarantees for supplemental funding (*1)

    —      Shinhan Bank and others

Korea Southern Power Co., Ltd.

   

Jeongam Wind Power Co., Ltd.

   

Collateralized money invested

    KRW 4,418   

IBK, SK Securities Co., Ltd. and others

     

Performance guarantees

    —     

IBK, SK Securities Co., Ltd. and others

Korea Southern Power Co., Ltd.

   

Samcheok Eco Materials Co., Ltd.

   

Payment guarantees (*7)

    —      SEM Investment Co., Ltd.

Korea Midland Power Co., Ltd.

   

Hyundai Green Power Co., Ltd.

   

Collateralized money invested

    KRW 127,571   

Korea Development Bank and others

Korea Midland Power Co., Ltd.

   

PT. Cirebon Electric Power

   

Debt guarantees

    USD 11,825    Mizuho Bank

Korea Midland Power Co., Ltd.

   

PT Wampu Electric Power

   

Debt guarantees

    USD 4,854   

SMBC

Korea Midland Power Co., Ltd.

    YaksuESS Co., Ltd.   

Collateralized money invested

    KRW 509   

IBK

Korea Midland Power Co., Ltd.

   

Namjeongsusang Solar Power Operatin Co., Ltd.

   

Collateralized money invested

    KRW 969    IBK

Korea Midland Power Co., Ltd.

   

YeongGwang Yaksu Wind

Electric. Co., Ltd.

   

Collateralized money invested

    KRW 442   

IBK and others

Korea Midland Power Co., Ltd.

   

Green Energy Electricity Generation Co., Ltd.

   

Collateralized money invested

    KRW 628   

IBK

     

Guarantees for supplemental funding and others (*1)

    —      IBK and others

Korea South-East Power Co., Ltd.

    Hyundai Energy Co., Ltd.   

Collateralized money invested (*4)

    —     

Korea Development Bank and others

     

Guarantees for supplemental funding and others (*1,5)

    KRW 78,600   

Korea Development Bank and others

Korea South-East Power Co., Ltd.

    RES Technology AD   

Collateralized money invested

    KRW 16,318   

UniCredit Bulbank and others

Korea South-East Power Co., Ltd.

   

ASM-BG Investicii AD

   

Collateralized money invested

    KRW 21,357   

UniCredit Bulbank and others

Korea South-East Power Co., Ltd.

   

Expressway Solar-light Power Generation Co., Ltd.

   

Guarantees for supplemental funding (*1,6)

    KRW 2,500   

Woori Bank

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(7)

Guarantees provided to associates or joint ventures as of June 30, 2019 are as follows, continued:

 

In millions of won and thousands of foreign currencies

 

Primary guarantor

   

Principal obligor

   

Type of guarantees

   

Credit limit

   

Guarantee

Korea South-East Power Co., Ltd.

   

S-Power Co., Ltd.

   

Collateralized money invested

    KRW 116,351   

Korea Development Bank and others

Korea South-East Power Co., Ltd.

   

Goseong Green Energy Co., Ltd.

   

Collateralized money invested

    KRW 2,410   

Kyobo Life Insurance Co., Ltd. and others

Korea South-East Power Co., Ltd.

   

Gangneung Eco Power Co., Ltd.

   

Collateralized money invested

    KRW 2,464   

Kyobo Life Insurance Co., Ltd. and others

Korea South-East Power Co., Ltd.

   

PND solar., Ltd.

   

Collateralized money invested

    KRW 1,320    IBK and others

Korea South-East Power Co., Ltd.

   

Hyundai Eco Energy Co., Ltd.

   

Collateralized money invested

    KRW 3,438   

Samsung Life Insurance and others

Korea South-East Power Co., Ltd.

   

Jaeun Resident Wind Power Plant Co., Ltd.

   

Collateralized money invested

    KRW 2,494   

IBK

Korea South-East Power Co., Ltd.

   

Cheongsong Myeonbongsan Wind Power Plant Co., Ltd.

   

Collateralized money invested

    KRW 2,736   

Kyobo Life Insurance Co., Ltd. and others

Korea Hydro & Nuclear Power Co., Ltd.

   

Noeul Green Energy Co., Ltd.

   

Collateralized money invested

    KRW 9,677   

KEB Hana Bank and others

Korea Hydro & Nuclear Power Co., Ltd.

   

Busan Green Energy Co., Ltd.

   

Collateralized money invested

    KRW 14,247   

Shinhan Bank and others

KEPCO Plant Service & Engineering Co., Ltd.

   

Incheon New Power Co., Ltd.

   

Collateralized money invested

    KRW 521    Shinhan Bank
     

Guarantees for supplemental funding and others (*1)

    —     

Shinhan Bank

 

  (*1)

The Group guarantees to provide supplemental funding for business with respect to excessive business expenses or insufficient repayment of borrowings.

  (*2)

The common stocks of Dongducheon Dream Power Co., Ltd. held by the Group were pledged as collateral.

  (*3)

This includes a guarantee for the shareholder’s capital payment in connection with the business of 190MW gas complex thermal power plant in Jamaica. EWP Barbados 1 SRL’s capital contribution amount is USD 16,560 thousand and the total amount of guarantees is USD 5,340 thousand which consists of USD 1,840 thousand of EWP Barbados 1 SRL’s contribution obligation and USD 3,500 thousand of South Jamaica Energy Holding Limited’s portion (50%) of contribution obligation.

  (*4)

The Group recognized impairment loss on all of the equity securities of Hyundai Energy Co., Ltd. in prior years, and the acquisition cost of the securities provided as collateral is W47,067 million.

  (*5)

Pursuant to the guarantee agreement, the Group recognized other provisions of W40,898 million as the possibility of economic outflow to fulfill the obligation was probable and the amount could be reasonably estimated.

  (*6)

The Group has granted the right to Hana Financial Investment Co., Ltd., as an agent for the creditors to Expressway Solar-light Power Generation Co., Ltd. (“ESPG”), to the effect that in the event of acceleration of ESPG’s payment obligations under certain borrowings to such creditors, Hana Financial may demand the Group to dispose of shares in ESPG held by the Group and apply the resulting proceeds to repayment of ESPG’s obligations.

  (*7)

The Group has the obligation 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. In relation to this guarantee, the Group has recognized W2,155 million of derivative liabilities as of June 30, 2019.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(8)

As of June 30, 2019, there is no financial guarantee contract provided by related parties.

 

(9)

Derivatives transactions with related parties as of June 30, 2019 are as follows:

(i) Currency Swap

 

In millions of won and thousands of foreign currencies  

Counterparty

    Contract year             Contract Amount      Contract interest rate
per annum		            Contract
exchange
rate (in won)		  
          Pay      Receive      Pay     Receive  

Korea Development Bank

      2019~2024      W        177,600      USD 150,000        1.24 %      2.50 %    W        1184.00  
     2016~2019           105,260      USD  100,000        2.48 %      2.38 %         1052.60  
     2015~2025           111,190      USD 100,000        2.62 %      3.25 %         1111.90  
     2017~2027           111,610      USD 100,000        2.31 %      3.13 %         1116.10  
     2018~2028           108,600      HKD 800,000        2.69 %      3.35 %         135.75  
     2018~2023           170,280      USD 150,000        2.15 %      3.75 %         1135.20  
     2017~2020           114,580      USD 100,000        1.75 %      2.38 %         1145.80  
     2016~2021           121,000      USD 100,000        2.15 %      2.50 %         1210.00  
     2019~2022           112,650      USD 100,000        1.80 %      3.38 %         1126.50  
     2018~2023           320,880      USD 300,000        2.03 %      3.75 %         1069.60  
     2018~2021           212,960      USD 200,000        2.10 %      3.00 %         1064.80  
     2017~2022           113,300      USD 100,000        1.94 %      2.63 %         1133.00  
     2018~2023           169,335      USD 150,000        2.26 %      3.88 %         1128.90  

(ii) Currency forward

 

In millions of won and thousands of foreign currencies  

Counterparty

    Contract
date		      Maturity
date		             Contract amounts             Contract
exchange
rate (in won)		  
          Pay      Receive  

Korea Development Bank

      2017.12.27        2021.07.12      W        104,849      USD  100,000      W        1,048.49  
     2019.06.27        2019.07.23           6,359      USD 5,500           1,156.20  

 

(10)

Salaries and other compensations to the key members of management of the Group for the six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won           June 30, 2019      June 30, 2018  

Type

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

Salaries

    W        639        855        579        697  

Employee benefits

         2        4        9        18  
     

 

 

     

 

 

     

 

 

     

 

 

  
   W        641        859        588        715  
     

 

 

     

 

 

     

 

 

     

 

 

  

 

48.

Non-Cash Transactions

Significant non-cash investing and financing transactions for the six-month periods ended June 30, 2019 and 2018 are as follows:

 

In millions of won                     

Transactions

           June 30, 2019      June 30, 2018  

Transfer from construction-in-progress to other assets

    W        3,903,246        3,476,094  

Recognition of asset retirement cost and related provision for decommissioning costs

         140,718        180,055  

Transfer from provision for disposal of spent nuclear fuel to accrued expenses

         151,832        248,811  

Recognition of litigation provisions as addition to property, plant and equipment

         —          185,530  

Transfer of right-of-use assets due to change in accounting policy

         4,633,091        —    

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

49.

Commitments for Expenditure

 

(1)

The commitments for acquisition of property, plant and equipment as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won           June 30, 2019      December 31, 2018  

Contracts

           Amounts      Balance      Amounts      Balance  

Purchase of cable (PVC,1C,2000SQ) 153,000M and others (Shin-Bupyung-Youngseo)

    W        56,183        31,675        56,183        37,309  

Purchase of cable (PVC, 1C, 2500SQ) 103,374M and others (Bukdangjin-Shintangjung)

         45,086        32,573        44,315        31,801  

Purchase of GIS (362KV 6300A 63KA) 23CB – YoungseoS/S

         34,500        34,500        34,500        34,500  

Purchase of GIS (362kV,6300A,63kA) 26CB – Hwasung S/S

         40,010        22,271        29,143        18,194  

Purchase of GIS (362KV 6300A 63KA) 27CB – KwangyangS/S

         37,744        10,542        37,694        10,491  

Purchase of Concrete Poles (10M, 350KGF) 121,900 and 6 others

         —          —          133,387        13,343  

Purchase of cable (TR CNCE-W/AL,1C,400SQ) 3,504,000M

         66,240        135        66,240        38,998  

Purchase of cable (FR CNCO-W,1C,325SQ) 1,400,000

         59,716        39,566        57,475        48,598  

Purchase of switch (Eco) 9,360 units

         40,631        24,031        40,631        34,797  

Construction of Shin-Kori units (#3,4)

         7,424,996        —          7,363,514        3,211  

Construction of Shin-Kori units (#5,6)

         8,625,387        5,353,509        8,625,387        5,930,099  

Construction of Shin-Hanwool units (#1,2)

         7,982,342        136,665        7,982,342        355,704  

Other 30 contracts

         376,797        229,403        269,681        161,243  

Service of designing Seoul Combined units (#1,2)

         30,778        5,527        29,996        4,744  

Purchase of main machine for construction of Seoul Combined units (#1,2)

         365,164        20,097        365,164        51,165  

Construction of Seoul Combined units (#1,2)

         291,807        3,757        285,890        27,125  

Purchase of smoke eliminating machine for construction of Shin-Boryeong units (#1,2)

         174,147        6,619        172,609        13,986  

Service of designing Shin-Boryeong units (#1,2)

         120,668        888        120,199        1,076  

Purchase of main machine for construction of Shin-Boryeong units (#1,2)

         866,065        4,981        866,065        4,981  

Purchase of furnace for construction of Shin-Seocheon thermal power plant

         305,209        56,898        305,209        74,631  

Purchase of turbine generator for construction of Shin-Seocheon thermal power plant

         104,402        25,488        104,402        57,968  

Electricity construction of Shin-Seocheon thermal power plant

         230,534        132,161        217,848        174,122  

Purchase of main machine for Jeju LNG combined

         166,287        6,249        166,287        11,272  

Purchase of coal handling machine for construction of Taean (#9,10) and IGCC units (conditional contract for installation)

         205,764        282        205,764        282  

Purchase of furnace for construction of Taean units (#9,10)

         556,206        18,040        556,504        18,502  

Service of designing Taean units (#9,10)

         112,483        13,476        112,344        13,338  

Purchase of turbine generator for construction of Taean units (#9,10)

         214,208        10,856        214,462        10,422  

Purchase of oxygen plant for construction of Taean IGCC units

         97,345        1,560        96,068        1,552  

Service of designing Taean IGCC plant units

         46,001        3,161        46,001        3,161  

Purchase of furnace for construction of Samcheok units (#1,2)

         1,092,287        11,710        1,092,287        12,215  

Purchase of coal handling machine for construction of Samcheok units (#1,2)

         311,220        48,611        307,925        48,736  

Purchase of turbine main equipment for Samcheok units (#1,2)

         212,188        125        212,188        348  

Purchase of main equipment for Namjeju

         146,594        91,812        146,594        134,949  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

49.

Commitments for Expenditure, Continued

 

(2)

As of June 30, 2019, details of contracts for inventory purchase commitment are as follows:

The Group 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 Group 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 quantity

Concentrate    2019 ~ 2030    40,330 Ton U3O8
Transformed    2019 ~ 2030    19,504 Ton U
Enrichment    2019 ~ 2030    20,733 Ton SWU
Molded (Light)    2019 ~ 2020    756 Ton U
Molded (Medium))    2019 ~ 2020    401 Ton U
Molded (Initial core)    2019 ~ 2022    415 Ton U

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

50.

Contingencies and Commitments

 

(1)

Ongoing litigations and claims related with contingent liabilities and contingent assets as of June 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    June 30, 2019      December 31, 2018  
     Number of cases            Claim amount      Number of cases            Claim amount  

As the defendant

      598      W       605,683        570      W       673,882  

As the plaintiff

      206          747,823        174          793,491  

As of June 30, 2019, among the litigations mentioned above, there are ongoing litigations of KHNP, a subsidiary of KEPCO, against KEPCO Engineering & Construction Company, Inc., a subsidiary of KEPCO, as a co-defendant (one case amounting to W65,927 million).

A group of plaintiffs (consisting of 2,167 individuals) filed a lawsuit against NSSC regarding NSSC’s approval on May 18, 2015 of extending the operation of Wolsong unit 1 nuclear power plant. The appeal was ongoing as of June 30, 2019. Also, Greenpeace and others filed an administrative litigation against NSSC requesting cancelation of the construction permit of Shin-Kori unit 5 and 6 in September 12, 2016 and lost the lawsuit in Feburary 14, 2019. They appealed the case in March 18, 2019. The Group joined these litigations as a stakeholder with the permission of the Court.

As of June 30, 2019, in connection with Shin-Hanul unit 3 & 4, the Group has received communications from a vendor for costs incurred for the preliminary work of the main equipment and associated compensation due to the discontinuation of the construction. The Group does not believe that it has a present obligation for this vendor, and that it is probable that the Group will prevail if a lawsuit is filed against the Group. In addition, the Group cannot reliably estimate the potential outflow related to the obligation as of June 30, 2019.

The long-term service contract between Gyeonggi Green Energy Co., Ltd. (Gyeonggi Green Energy) and its fuel cell supplier expired during the year ended December 31, 2018. Based on the agreement with the creditors of Gyeonggi Green Energy, as Gyeonggi Green Energy was unable to renew the fuel cell supply contract by December 31, 2018, the creditors have the right to request immediate repayment of the related borrowings from Gyeonggi Green Energy or to take over the all shares held by KHNP. Depending on the result of this negotiation, the schedule of repayment of borrowings of Gyeonggi Green Energy Co., Ltd. may be adjusted accordingly. As of June 30, 2019, Gyeonggi Green Energy Co., Ltd. is in negotiations to renew the contract.

The Group is the defendant against a number of claims. The following are potentially significant ongoing claims pertaining to the Group.

 

  ①

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 Group believes that the possibility of economic outflow is probable on the ongoing and the expected lawsuit. For this reason, the Group recognized W27,151 million of other provision in relation to the lawsuit as of June 30, 2019.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

50.

Contingencies and Commitments, Continued

 

(1)

Ongoing litigations and claims related with contingent liabilities and contingent assets as of June 30, 2019 and December 31, 2018 are as follows, continued:

Except these significant ongoing claims, there are 13 arbitration cases pertaining to the Group as of June 30, 2019 and the significant arbitration cases for the six-month period ended June 30, 2019 are as follows:

 

  ①

LS Cable & System, a construction company for undersea cable construction, filed an arbitration against the Group regarding disagreements in the test failure handling costs, but the Group has not recognized any provision because the probability of economic benefit outflow is remote and the related amount cannot be reliably estimated.

 

  ②

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 Group has not recognized any provision because the probability of economic benefit outflow is remote and the related amount cannot be reliably estimated.

 

  ③

In 2016, Hyundai E&C, GS Engineering & Construction Corp. and Hansol SeenTec Co., Ltd. filed an arbitration against the Group to the Korea Commercial Arbitration Board in relation to the request for additional construction costs. As described in Note 27.(2), the Group recognized the litigation provisions of W204,787 million in relation to this arbitration case and made the payment according to the results of this arbitration during the year ended December 31, 2018.

 

  ④

In 2016, Halla Corporation filed on arbitration against the Group to the Korea Commercial Arbitration Board in relation to the request for additional construction costs and the Group filed on arbitration against Halla Corporation to the Korea Commercial Arbitration Board in relation to the request for a penalty payment for the delayed construction work. The Group has recognized W19,754 million of provision for the best estimate of the expenditure required to fulfill its obligations in relation to this arbitration as of June 30, 2019.

 

  ⑤

In connection with the electric power IT modernization project in Kerala, India, Enzen, a subcontractor, filed an arbitration against the Group to the Indian Council of Arbitration due to disagreements in the contract, but the Group has not recognized any losses because the amount and timing of economic benefit outflow cannot be reasonably estimated.

 

(2)

Guarantees of payments and commitments provided to other companies as of June 30, 2019 are as follows:

 

  ①

In order to secure its status as a shareholder of Navanakorn Electric Co., Ltd., the Group 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 Group bears a payment obligation in proportion to its ownership.

 

  ②

The Group has outstanding borrowings with a limit of USD 275,600 thousand from its creditors such as International Finance Corporation. Regarding the borrowing contract, the Group 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 Group has provided payment guarantee up to USD 2,777 thousand, in case of construction delay or insufficient contract volume after commencement of the construction.

 

  ③

The Group has provided PT. Perusahaan Listrik Negara performance guarantee up to USD 2,293 thousand and Mizuho bank and others investment guarantee up to USD 43,500 thousand in proportion to its ownership in the electricity purchase contract with PT. Cirebon Energi Prasarana in relation to the second electric power generation business in Cirebon, Indonesia.

 

  ④

The Group has provided MUFG Bank, Ltd. (MUFG) (formerly, the Bank of Tokyo Mitsubishi UFJ. Ltd. (BTMU)) borrowing guarantee up to USD 41,258 thousand proportion to its ownership in the equity bridge loan guarantee with PT. Cirebon Energi Prasarana in relation to the second electric power generation business in Cirebon, Indonesia.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

50.

Contingencies and Commitments, Continued

 

(2)

Guarantees of payments and commitments provided to other companies as of June 30, 2019 and December 31, 2018 are as follows, continued:

 

  ⑤

The Group has provided the Export-Import Bank of Korea, BNP Paribas and ING Bank guarantee of mutual investment of USD 2,192 thousand, which is equivalent to the ownership interest of PT BS Energy and PT Nusantara Hydro Alam, in order to guarantee the expenses related to hydroelectric power business of Tanggamus, Indonesia.

 

  ⑥

The Group has provided the Export-Import Bank of Korea and SMBC guarantee of mutual investment of USD 401 thousand, which is equivalent to the ownership interest of PT Mega Power Mandiri, in order to guarantee the expenses related to hydroelectric power business of PT Wampu Electric Power, an associate of the Group.

 

  ⑦

The Group is obligated to complete the responsibility as a construction company for the construction of the waste oil refining for power generation business of Next energy Co.,Ltd (contract amount : W14,700 million). Also, the Group has made performance guarantee agreement with Next energy Co.,Ltd for 20 years after the completion of the construction, which obliges the Group to provide supplemental funding if the amount of power generated or the operation time of the power plant does not reach the agreed level.

 

(3)

Credit lines provided by financial institutions as of June 30, 2019 are as follows:

 

In millions of won and thousands of foreign currencies            

Commitments

   

Financial institutions

   

Currency

    Limited amount  

Commitments on bank-overdraft

    Nonghyup Bank and others    KRW      1,825,000  

Commitments on bank-daylight overdraft

    Nonghyup Bank    KRW      280,000  

Limit amount available for CP

    KEB Hana Bank and others    KRW      1,050,000  

Limit amount available for card

    KEB Hana Bank and others    KRW      55,154  
   Banco de Oro    PHP      5,000  

Loan limit

    Kookmin Bank and others    KRW      1,153,900  
   DBS Bank and others    USD      1,922,700  

Certification of payment on payables from foreign country

    Nonghyup Bank    USD      4,680  

Certification of payment on L/C

    Shinhan Bank    USD      7,749  
   Shinhan Bank and others         880,163  

Certification of performance guarantee on contract

    KEB Hana Bank and others    EUR      5,558  
   KEB Hana Bank and others    INR      268,353  
   Korea Development Bank and others    JPY      637,322  
   Seoul Guarantee Insurance and others    KRW      208,466  
   First Abu Dhabi Bank and others    USD      840,086  
   KEB Hana Bank    SAR      6,508  
   Bank of Kathmandu and others    NPR      36,304  
   KEB Hana Bank    CAD      464  

Certification of bidding

    KEB Hana Bank and others    USD      110,000  
   Shinhan Bank    ZAR      55,730  

Advance payment bond, Warranty bond, Retention bond and others

    Export-Import Bank of Korea and others    USD      4,306,464  

Others

    Shinhan Bank    JPY      381,210  
   Nonghyup Bank and others    KRW      317,836  
   Export-Import Bank of Korea and others    USD      1,190,844  

Inclusive credit

    Shinhan Bank    INR      70,028  
   KEB Hana Bank    KRW      258,000  
   KEB Hana Bank and others    USD      31,183  

Trade finance

    BNP Paribas and others    USD      800,000  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

50.

Contingencies and Commitments, Continued

 

(4)

As of June 30, 2019, blank check and assets provided as collaterals or pledges to financial institutions by the Group are follows:

 

In millions of won and thousands of foreign currencies               

Guarantor

   

Guarantee

   

Type of guarantee

   

Currency

    Amount   

Description

Mira Power Limited

   

International Finance Corporation and others

   

Property, plant and equipment and others

    USD    275,600   

Collateral for borrowings

(*1)

Tamra Offshore Wind Power Co., Ltd

   

Nonghyup Life Insurance Co., Ltd. and others

   

Property, plant and equipment and others

    KRW    132,000   

Collateral for borrowings

(*1)

Gyeonggi Green Energy Co., Ltd.

   

Korea Development Bank and others

   

Cash and cash equivalents

    KRW    327,080   

Collateral for borrowings

(*2)

Commerce and Industry Energy Co., Ltd.

   

IBK and others

   

Land, buildings, structures and machinery and others

    KRW    110,500   

Collateral for borrowings

(*2)

KOSPO Youngnam Power Co., Ltd.

   

Shinhan Bank and others

   

Cash and cash equivalents

    KRW    396,120   

Collateral for borrowings

(*2)

Gyeongju Wind Power Co., Ltd.

   

Samsung Fire & Marine Insurance Co., Ltd. and Others

   

Property, plant and equipment and others

    KRW    110,240   

Collateral for borrowings

(*2)

Korea Offshore Wind Power Co., Ltd

   

Woori Bank and Others

   

Utility plant and others

    KRW    293,400    Collateral for borrowings

Qatrana Electric Power Company

   

The Islamic Development Bank and others

   

Finance lease receivable and property, plant and equipment and others

    JOD    236,570   

Collateral for borrowings

(*1)

KST Electric Power Company

   

The Export – Import Bank of Korea and others

   

Finance lease receivable and property, plant and equipment and others

    USD    337,000   

Collateral for borrowings

(*1)

 

(*1)

This is based on the amount of loan commitment limit.

(*2)

As of June 30, 2019, the Group has established guarantees for pledge for transfer of rights of long-term borrowings, pledge for insurance claims, pledge for shares, etc.

The Group has W1,197 million of project loans from Korea Energy Agency as of June 30, 2019. The Group has provided a blank check as repayment guarantee.

 

(5)

The Group temporarily suspended operations of the Gangneung hydroelectric generating plant, with a carrying amount of W78,762 million as of June 30, 2019, to improve the quality of water used in generating electricity. The expenses related to the suspension of operations of W18 million and depreciation on the utility plant of W3,272 million are recorded in other expenses for the six-month period ended June 30, 2019. Regarding the improvement of water quality, the results of damages compensation for the local residents cannot be reasonably estimated, and the Group is in negotiations with Gangneung City and related stakeholders to restart the Gangneung hydroelectric generating plant as of June 30, 2019.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

50.

Contingencies and Commitments, Continued

 

(6)

Due to the Korean government’s announcement of suspension of operation in the Gaeseong Industrial District, it is uncertain if the Group can exercise the property rights for the Group’s facility in the Gaeseong Industrial District as of June 30, 2019. The book value of facility is W17,228 million and the amount of trade receivables related to the companies residing in Gaeseong industrial complex is W2,911 million. The ultimate outcome of this event cannot be reasonably estimated.

 

(7)

In connection with the electric power IT modernization project in Kerala, India, negotiations are underway due to disagreements in the contract regarding the existence and the scope of a warranty obligation. However, the Group has not recognized any losses because the amount and timing of economic benefit outflow cannot be reasonably estimated.

 

51.

Subsequent Events

 

(1)

Decision of project-promoting fund contribution

On August 8, 2019, board of directors of the Company decided to contribute W60,000 million in funds for the establishment and initial operation, including promotion of the project and campus design, of KEPCO Tech University (tentative name).

 

(2)

Issue of corporate bonds

Subsequent to June 30, 2019, Korea Hydro & Nuclear Power Co., Ltd., Korea Western Power Co., Ltd. and Korea Southern Power Co., Ltd. issued foreign bond, corporate bonds and non-guaranteed corporate bonds for funding debt repayment, operations, and foreign purchases as follows:

 

In millions of won and thousands of foreign currencies           

Company

   

Type

    Issue date    Maturity    Interest rate   Amount  

Korea Hydro & Nuclear Power Co., Ltd.

   

Foreign bond

    2019.07.19    2024.07.19    0.00%     CHF 200,000  
  

Foreign bond

    2019.07.19    2027.07.19    0.05%     CHF 100,000  

Korea Western Power Co., Ltd.

   

Corporate bond

    2019.07.22    2022.07.22    2.37%     USD 300,000  

Korea Southern Power Co., Ltd.

   

#47 non-guaranteed corporate bond

    2019.07.09    2020.07.09    1.51%     KRW 100,000  
  

#48 non-guaranteed corporate bond

    2019.07.24    2022.07.24    6.00%     KRW 350  
  

#49-1 non-guaranteed corporate bond

    2019.08.13    2039.08.13    1.33%     KRW 150,000  
  

#49-2 non-guaranteed corporate bond

    2019.08.13    2049.08.13    1.29%     KRW 50,000  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the six-month periods ended June 30, 2019 and 2018

(Unaudited)

 

52.

Adjusted Operating Profit (loss)

The operating profit (loss) in the Group’s consolidated statements of comprehensive income (loss) prepared in accordance with KIFRS included in this report differs from that in its consolidated statements of comprehensive income (loss) prepared in accordance with IFRS as issued by IASB. The table below sets forth a reconciliation of the Group’s results from operating activities as presented in the Group’s consolidated statements of comprehensive income (loss) prepared in accordance with KIFRS for each of the six-month periods ended June 30, 2019 and 2018 to the operating profit or loss as presented in the Group’s consolidated statements of comprehensive income (loss) prepared in accordance with IFRS as issued by IASB for each of the corresponding years.

 

In millions of won          June 30, 2019     June 30, 2018  
           Three-month
period ended		     Six-month
period ended		     Three-month
period ended		     Six-month
period ended		  

Operating profit (loss) on the consolidated interim
statements of comprehensive income (loss)

    W       (298,659 )      (928,539 )      (687,118 )      (814,731 ) 

Add

           

Other income

           

Reversal of other provisions

        —         2,186       895       1,477  

Reversal of other allowance for bad debt

        960       960       —         —    

Gains on government grants

        67       139       67       145  

Gains on assets contributed

        2,707       2,771       394       418  

Gains on liabilities exempted

        616       719       97       7,021  

Compensation and reparations revenue

        19,822       38,664       22,945       42,755  

Revenue from research contracts

        1,427       2,577       1,750       2,844  

Rental income

        47,069       94,051       49,675       93,339  

Others

        22,786       29,090       18,003       30,653  

Other gains

           

Gains on disposal of property, plant and equipment

        20,353       29,187       11,997       26,363  

Gains on disposal of intangible assets

        —         97       3       3  

Gains on foreign currency translation

        13,907       10,955       4,060       8,161  

Gains on foreign currency transaction

        10,866       17,166       9,701       23,206  

Gains on insurance proceeds

        —         13       —         —    

Others

        43,890       110,235       44,031       106,818  

Deduct

           

Other expenses

           

Compensation and reparations expense

        (77 )      (77 )      (19,258 )      (19,288 ) 

Accretion expenses of other provisions

        (5,225 )      (383 )      (61 )      (190 ) 

Depreciation expenses on investment properties

        (4,047 )      (4,291 )      (218 )      (508 ) 

Depreciation expenses on idle assets

        (1,636 )      (3,272 )      (1,637 )      (3,274 ) 

Other bad debt expense

        (4,849 )      (5,696 )      (8,957 )      (11,453 ) 

Donations

        (15,578 )      (27,563 )      (13,671 )      (18,958 ) 

Others

        (4,383 )      (9,856 )      (36,817 )      (43,850 ) 

Other losses

           

Losses on disposal of property, plant and equipment

        (12,755 )      (26,747 )      (9,971 )      (13,400 ) 

Losses on disposal of intangible assets

        —         —         (2 )      (6 ) 

Losses on impairment of property, plant and equipment

        (27,406 )      (29,685 )      (701,317 )      (701,317 ) 

Losses on impairment of intangible assets

        (61,696 )      (61,696 )      —         —    

Losses on foreign currency translation

        —         (51,468 )      (12,005 )      (15,353 ) 

Losses on foreign currency transaction

        (19,055 )      (28,915 )      (18,666 )      (33,373 ) 

Others

        (26,496 )      (37,818 )      (13,159 )      (32,375 ) 
    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted operating profit (loss)

    W       (297,392 )      (877,196 )      (1,359,239 )      (1,364,873 ) 
    

 

 

    

 

 

    

 

 

    

 

 

  

 

141

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