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 December 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.

 

 

 

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QUARTERLY BUSINESS REPORT

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

Domestic

  

Overseas

  

Total

38

   75    113

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.

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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 nine-month period ended September 30, 2019 and 2018

 

     (In billions of Won)  
     January to September 2018      January to September 2019  
   Sales      Operating
profit 		     Sales      Operating
profit 		 

Electricity sales

     45,139        -1,399        44,172        -1,479  

Nuclear generation

     6,307        735        6,629        779  

Thermal generation

     19,508        1,103        18,390        826  

Others(*)

     2,469        273        2,501        248  

Subtotal

     73,423        712        71,692        374  

Adjustment for related-party transactions

     -27,970        -132        -27,460        -63  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total

     45,453        580        44,232        311  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

•  

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.

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2. Changes in unit prices of major products

 

          (In Won per kWh)

Business sector

   Company    January to
September
2018 		   January to
September
2019
Electricity sold    Residential    KEPCO    108.05    105.44
   Commercial    129.98    130.81
   Educational    105.05    104.93
   Industrial    106.30    106.29
   Agricultural    47.64    47.90
   Street lighting    115.89    115.98
   Overnight usage    67.33    66.83
Electricity from nuclear generation    Nuclear Generation    KHNP    63.61    58.02
Electricity from thermal generation    Thermal generation    KOSEP    94.27    93.42
   KOMIPO    94.00    103.20
   KOWEPO    96.40    99.62
   KOSPO    98.52    103.65
   EWP    98.01    98.46

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

 

Company

   Volume
(GWh) 		     Expense
(In billions of Won) 		 

KHNP

     111,857        6,483  

KOSEP

     45,035        3,956  

KOMIPO

     30,355        3,130  

KOWEPO

     31,995        3,184  

KOSPO

     38,031        3,946  

EWP

     36,884        3,631  

Others

     112,753        12,725  
  

 

 

    

 

 

 

Total

     406,910        37,055  
  

 

 

    

 

 

 

 

•  

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

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4. Intellectual property as of September 30, 2019

 

     Patents      Utility
models 		     Designs      Trademarks      Total  
   Domestic      Overseas      Domestic      Overseas  

KEPCO

     2,355        258        62        78        106        47        2,906  

Generation subsidiaries

     2,560        377        115        44        139        23        3,258  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     4,915        635        177        122        245        70        6,164  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

III. Financial Information

 

1.

Condensed consolidated financial results as of and for a nine-month period ended September 30, 2018 and 2019

(In billions of Won)

Consolidated statements of

comprehensive income

    

Consolidated statements of

financial position

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

Sales

     45,453        44,232        -2.7      Total assets      185,249        193,875        4.7  

Operating profit

     580        311        -46.5      Total liabilities      114,156        123,850        8.5  

Net income

     -432        -932        -115.9      Total equity      71,093        70,025        -1.5  

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2.

Condensed separate financial results as of and for a nine-month period ended September 30, 2018 and 2019

(In billions of Won)

Separate statements of

comprehensive income

    

Separate statements of

financial position

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

Sales

     45,139        44,172        -2.1      Total assets      107,486        107,674        0.2  

Operating profit

     -1,399        -1,479        -5.7      Total liabilities      53,404        55,232        3.4  

Net income

     -544        -1,527        -180.9      Total equity      54,082        52,442        -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 nine-month period ended September 30, 2019

 

Number of meetings

 

Number of agendas

 

Classification

 

Resolutions

 

Reports

10   31   24   7

 

*

The audit committee held 8 meetings with 35 agendas (of which, 21 were approved as proposed and 14 were accepted as reported).

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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

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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
July 19, 2019    Approval of donation of KEPCO Energy Park exhibition    Approved as proposed    Resolution
  

 

Approval of contribution to solar power project in Mexico

  

 

Approved as proposed

  

 

Resolution

August 8, 2019    Approval of establishment of and contribution to KEPCO Tech University    Approved as proposed    Resolution
August 22, 2019    Approval of deliberation on former executive’s violation of job integrity agreement    Approved as proposed    Resolution
  

 

Report on audit results for the second quarter of 2019

  

 

Accepted as reported

  

 

Report

  

 

Report on financial statements for the first half of 2019

  

 

Accepted as reported

  

 

Report

 

*

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

Table of Contents

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
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

July 19, 2019    Approval of donation of KEPCO Energy Park exhibition    For   For   For   For   For   For   For   Absent
  

 

Approval of contribution to solar power project in Mexico

  

 

For

 

 

For

 

 

For

 

 

For

 

 

For

 

 

For

 

 

For

 

 

Absent

August 8, 2019    Approval of establishment of and contribution to KEPCO Tech University    For   For   For   For   For   For   For   Absent
August 22, 2019    Approval of deliberation on former executive’s violation of job integrity agreement    Absent   For   For   For   For   For   For   Absent
  

 

Report on audit results for the second quarter of 2019

      

 

Agenda for Report

     
  

 

Report on financial statements for the first half of 2019

      

 

Agenda for Report

     
   Attendance Rate    90%   100%   90%   100%   100%   90%   100%   70%

 

*

Individual director’s vote results regarding the proposed approval of amendment to the Electricity Usage Agreement on June 28, 2019 is 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.

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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   
  

 

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

Table of Contents

Date

  

Agenda

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

July 19, 2019    Approval of donation of KEPCO Energy Park exhibition    For   For   For   For   For   For   For
  

 

Approval of contribution to solar power project in Mexico

  

 

For

 

 

For

 

 

For

 

 

For

 

 

For

 

 

For

 

 

For

August 8, 2019    Approval of establishment of and contribution to KEPCO Tech University    For   For   For   For   For   For   For
August 22, 2019    Approval of deliberation on former executive’s violation of job integrity agreement    For   For   For   For   For   For   For
  

 

Report on audit results for the second quarter of 2019

      

 

Agenda for Report

   
  

 

Report on financial statements for the first half of 2019

      

 

Agenda for Report

   
   Attendance Rate    90%   100%   100%   100%   100%   90%   87.5%

 

*

Individual director’s vote results regarding the proposed approval of amendment to the Electricity Usage Agreement on June 28, 2019 is 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

Table of Contents

Date

  

Agenda

  

Results

   Type
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

Table of Contents

Date

  

Agenda

  

Results

   Type
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

August 22, 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
   Approval of countermeasures for a lawsuit by the minority shareholders of KEPCO    Approved as proposed    Resolution
   Amendments to Code of Conduct    Approved as proposed    Resolution
   Independent Auditor’s review report for the first half of 2019    Accepted as reported    Report
   Report for deliberation on former executive’s violation of job integrity agreement    Accepted as reported    Report
   Report on audit results for the second quarter of 2019    Accepted as reported    Report
October 22, 2019    Prior approval for non-audit service for subsidiaries by the independent auditor    Approved as proposed    Resolution
  

 

Amendments to internal audit regulations

  

 

Approved as proposed

  

 

Resolution

 

*

The audit department, organized under the supervision of the Audit Committee, conducts internal audit over the entire company ad 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

Table of Contents

Date

  

Agenda

   Noh, Geum-Sun   Jung, Yeon-Gil   Lee, Jung-Hee
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

 

August 22, 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

  

 

Approval of countermeasures for a lawsuit by the minority shareholders of KEPCO

  

 

For

 

 

For

 

 

For

  

 

Amendments to Code of Conduct

  

 

For

 

 

For

 

 

For

  

 

Independent Auditor’s review report for the first half of 2019

  

 

For

 

 

For

 

 

For

  

 

Report for deliberation on former executive’s violation of job integrity agreement

  

 

For

 

 

For

 

 

For

  

 

Report on audit results for the second quarter of 2019

   For   For   For

 

October 22, 2019

  

 

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

  

 

For

 

 

For

 

 

For

  

 

Amendments to internal audit regulations

  

 

For

 

 

For

 

 

For

  

 

Attendance Rate

  

 

100%

 

 

87.5%

 

 

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.

Table of Contents

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

1. Directors

 

 

                               (In thousands of Won)

Type

   Number
of
directors 		     Total
remuneration 		     Average
remuneration
per person 		    

Remarks

Standing director

     6        859,261        143,210      Excluding the members of Audit Committee

Non-standing director

     6        130,725        22,157  

Member of Audit Committee

   Standing director      1        125,216        125,216     
   Non-standing director      2        45,000        22,500     
     

 

 

    

 

 

    

 

 

    

Total

     15        1,160,202        77,347     
     

 

 

    

 

 

    

 

 

    

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

     17,781        90        17,871        16.1        1,181,651,412        66,121  

Female

     4,664        68        4,732        12.9        238,915,363        50,489  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total

     22,445        158        22,603        15.4        1,420,566,775        62,849  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Table of Contents

VII. Other Information Necessary for the Protection of Investors

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

 

Type

  

Agenda

  

Results

Extraordinary General Meeting held on March 4, 2019

   Election of a Standing Director    Approved as proposed
  

 

Approval of financial statements for the fiscal year 2018

  

 

Approved as proposed

Annual General Meeting held on March 22, 2019

   Approval of the maximum aggregate amount of remuneration for directors in 2019    Approved as proposed

2. Pending legal proceedings as of September 30, 2019

 

 

            (In billions of Won)  

Type

   Number of lawsuits      Amount claimed  

Lawsuits where KEPCO and its subsidiaries are engaged as the defendants

     607        640  

Lawsuits where KEPCO and its subsidiaries are engaged as the plaintiffs

     197        811  

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: December 5, 2019

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Financial Statements

September 30, 2019

(Unaudited)

(With Independent Auditor’s Review Report Thereon)

 

1

Table of Contents

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 September 30, 2019, the consolidated interim statements of comprehensive income (loss) for the three and nine-month period ended September 30, 2019, consolidated interim statements of changes in equity and consolidated interim statements of cash flows for the nine-month period ended September 30, 2019 and the notes to the accompanying consolidated interim financial statement, including a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Interim Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with Korean International Financial Reporting Standards (“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 nine-month periods ended September 30, 2018, consolidated interim statements of changes in equity and consolidated interim statements of cash flows for the nine-month period ended September 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 November 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.

 

LOGO

November 14, 2019

 

This review report is effective as of November 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.

 

1

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Financial Position

As of September 30, 2019 and December 31, 2018

(Unaudited)

 

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

Assets

        

Current assets

        

Cash and cash equivalents

     5,6,7,45      W 1,545,605        1,358,345  

Current financial assets, net

     5,6,9,11,12,13,45        4,429,372        2,359,895  

Trade and other receivables, net

     5,8,15,21,45,46,47        6,799,465        7,793,592  

Inventories, net

     14        6,662,877        7,188,253  

Income tax refund receivables

        52,130        143,214  

Current non-financial assets

     16        1,031,157        878,888  

Assets held-for-sale

     17,42        36,715        22,881  
     

 

 

    

 

 

 

Total current assets

        20,557,321        19,745,068  
     

 

 

    

 

 

 

Non-current assets

        

Non-current financial assets, net

     5,6,9,10,11,12,13,45        2,750,193        2,113,613  

Non-current trade and other receivables, net

     5,8,15,45,46,47        1,982,026        1,819,845  

Property, plant and equipment, net

     19,25,28,49        159,908,627        152,743,194  

Investment properties, net

     20,28        167,881        159,559  

Goodwill

     17        2,582        2,582  

Intangible assets other than goodwill, net

     22,28,46        995,702        1,225,942  

Investments in associates

     4,18        4,086,679        4,064,820  

Investments in joint ventures

     4,18        1,913,146        1,813,525  

Deferred tax assets

        1,345,483        1,233,761  

Non-current non-financial assets

     16        165,399        327,152  
     

 

 

    

 

 

 

Total non-current assets

        173,317,718        165,503,993  
     

 

 

    

 

 

 

Total Assets

     4      W 193,875,039        185,249,061  
     

 

 

    

 

 

 

 

(Continued)

2

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Financial Position, Continued

As of September 30, 2019 and December 31, 2018

(Unaudited)

 

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

Liabilities

       

Current liabilities

       

Trade and other payables, net

     5,23,25,45,47      W 5,357,575       6,405,395  

Current financial liabilities, net

     5,12,24,45,47        10,282,946       7,981,879  

Income tax payables

        223,495       285,420  

Current non-financial liabilities

     21,29,30        6,339,487       5,574,041  

Current provisions

     27,45        1,981,347       1,594,798  
     

 

 

   

 

 

 

Total current liabilities

        24,184,850       21,841,533  
     

 

 

   

 

 

 

Non-current liabilities

       

Non-current trade and other payables, net

     5,23,25,45,47        7,135,862       2,941,696  

Non-current financial liabilities, net

     5,12,24,45,47        55,908,606       53,364,911  

Non-current non-financial liabilities

     29,30        8,593,186       8,160,033  

Employee benefits liabilities, net

     26,45        2,318,565       1,645,069  

Deferred tax liabilities

        8,959,717       9,617,309  

Non-current provisions

     27,45        16,749,708       16,585,748  
     

 

 

   

 

 

 

Total non-current liabilities

        99,665,644       92,314,766  
     

 

 

   

 

 

 

Total Liabilities

     4      W 123,850,494       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

        13,889,386       14,007,942  
     

 

 

   

 

 

 
        50,279,721       51,519,119  
     

 

 

   

 

 

 

Other components of equity

     34       

Other capital surplus

        1,226,578       1,234,825  

Accumulated other comprehensive loss

        (224,360 )      (358,570 ) 

Other equity

        13,294,973       13,294,973  
     

 

 

   

 

 

 
        14,297,191       14,171,228  
     

 

 

   

 

 

 

Equity attributable to owners of the controlling company

        68,630,490       69,743,925  

Non-controlling interests

     17, 33        1,394,055       1,348,837  
     

 

 

   

 

 

 

Total Equity

      W 70,024,545       71,092,762  
     

 

 

   

 

 

 

Total Liabilities and Equity

      W 193,875,039       185,249,061  
     

 

 

   

 

 

 

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

 

3

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income (Loss)

For the three and nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

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

Sales

     4,35,45,47           

Sales of goods

      W 15,403,628       42,709,508       15,794,339       43,507,145  

Sales of services

        91,174       271,591       116,530       263,812  

Sales of construction services

     21        268,409       812,124       357,067       1,231,661  

Revenue related to transfer of assets from customers

        149,074       438,440       141,908       450,429  
     

 

 

   

 

 

   

 

 

   

 

 

 
        15,912,285       44,231,663       16,409,844       45,453,047  
     

 

 

   

 

 

   

 

 

   

 

 

 

Cost of sales

     14,26,43,47           

Cost of sales of goods

        (13,592,540 )      (40,777,212 )      (13,937,633 )      (41,502,856 ) 

Cost of sales of services

        (233,813 )      (519,036 )      (130,643 )      (364,732 ) 

Cost of sales of construction services

        (242,919 )      (737,290 )      (333,997 )      (1,138,468 ) 
     

 

 

   

 

 

   

 

 

   

 

 

 
        (14,069,272 )      (42,033,538 )      (14,402,273 )      (43,006,056 ) 
     

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

        1,843,013       2,198,125       2,007,571       2,446,991  

Selling and administrative expenses

     26,36,43,47        (603,747 )      (1,887,399 )      (612,356 )      (1,866,507 ) 
     

 

 

   

 

 

   

 

 

   

 

 

 

Operating profit

     4        1,239,266       310,726       1,395,215       580,484  

Other non-operating income

     37        146,520       317,677       81,274       259,923  

Other non-operating expense

     37        (27,566 )      (78,704 )      (20,912 )      (118,434 ) 

Other gains (losses), net

     38        (414,139 )      (482,815 )      83,063       (548,206 ) 

Finance income

     5,12,39        501,302       1,150,828       198,407       627,161  

Finance expenses

     5,12,40        (1,122,317 )      (2,637,285 )      (634,402 )      (1,932,660 ) 

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

     4,18           

Share in profit of associates and joint ventures

        4,687       271,571       24,068       376,696  

Gain on disposal of investments in associates and joint ventures

        —         7,131       —         —    

Gain on disposal of investments in subsidiaries

        —         —         —         3  

Share in loss of associates and joint ventures

        (19,082 )      (98,141 )      (15,430 )      (93,930 ) 

Loss on disposal of investments in associates and joint ventures

        (2,086 )      (156 )      (2,538 )      (4,722 ) 
     

 

 

   

 

 

   

 

 

   

 

 

 
        (16,481 )      180,405       6,100       278,047  
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit (loss) before income tax

        306,585       (1,239,168 )      1,108,745       (853,685 ) 

Income tax benefit (expense)

     41        (65,504 )      306,915       (371,455 )      421,917  
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit (loss) for the period

      W 241,081       (932,253 )      737,290       (431,768 ) 

 

 

(Continued)

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income (Loss), Continued

For the three and nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

In millions of won, except per share information      September 30, 2019     September 30, 2018  
     Note      Three-month
period ended 		    Nine-month
period ended 		    Three-month
period ended 		    Nine-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 (52,860 )      (238,882 )      (29,003 )      (85,544 ) 

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

     32        (39 )      (487 )      (385 )      8,523  

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

     34        (8,434 )      (8,897 )      8,028       1,483  

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        (5,494 )      9,062       7,758       (27,031 ) 

Foreign currency translation of foreign operations, net of tax

     34        62,216       122,494       (23,649 )      12,679  

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

     34        5,548       41,252       (22,558 )      71,401  
     

 

 

   

 

 

   

 

 

   

 

 

 

Other comprehensive income (loss), net of tax

        937       (75,458 )      (59,809 )      (18,489 ) 
     

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income (loss) for the period

      W 242,018       (1,007,711 )      677,481       (450,257 ) 
     

 

 

   

 

 

   

 

 

   

 

 

 

Profit (loss) attributable to:

           

Owners of the controlling company

     44      W 222,789       (1,012,555 )      708,582       (517,907 ) 

Non-controlling interests

        18,292       80,302       28,708       86,139  
     

 

 

   

 

 

   

 

 

   

 

 

 
      W 241,081       (932,253 )      737,290       (431,768 ) 
     

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income (loss) attributable to:

           

Owners of the controlling company

      W 211,643       (1,105,189 )      654,362       (542,490 ) 

Non-controlling interests

        30,375       97,478       23,119       92,233  
     

 

 

   

 

 

   

 

 

   

 

 

 
      W 242,018       (1,007,711 )      677,481       (450,257 ) 
     

 

 

   

 

 

   

 

 

   

 

 

 

Earnings (loss) per share (in won)

     44           

Basic and diluted earnings (loss) per share

      W 347       (1,577 )      1,104       (807 ) 

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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

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

             

Profit (loss) for the period

     —          (517,907 )      —         (517,907 )      86,139       (431,768 ) 

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

             

Remeasurement of defined benefit liability, net of tax

     —          (77,750 )      —         (77,750 )      (7,794 )      (85,544 ) 

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

     —          8,514       —         8,514       9       8,523  

Net change in fair value of financial assets at fair value through other comprehensive income

     —          —         1,482       1,482       1       1,483  

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

     —          —         (27,275 )      (27,275 )      244       (27,031 ) 

Foreign currency translation of foreign operations, net of tax

     —          —         (954 )      (954 )      13,633       12,679  

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

     —          —         71,400       71,400       1       71,401  

Transactions with owners of the Company, recognized directly in equity

             

Dividends paid

     —          (507,152 )      —         (507,152 )      (67,353 )      (574,505 ) 

Issuance of shares of capital by subsidiaries and others

     —          —         22       22       10,392       10,414  

Changes in consolidation scope

     —          —         —         —         2,046       2,046  

Dividends paid (hybrid bond)

     —          —         —         —         (10,039 )      (10,039 ) 
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at September 30, 2018

   W   4,053,578        52,348,191       14,225,133       70,626,902       1,310,475       71,937,377  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(Continued)

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

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

     —          (1,012,555 )      —         (1,012,555 )      80,302       (932,253 ) 

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

             

Remeasurement of defined benefit liability, net of tax

     —          (225,516 )      —         (225,516 )      (13,366 )      (238,882 ) 

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

     —          (487 )      —         (487 )      —         (487 ) 

Net change in fair value of financial assets at fair value through other comprehensive loss

     —          —         (8,897 )      (8,897 )      —         (8,897 ) 

Others

     —          (840 )      840       —         —         —    

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

     —          —         8,775       8,775       287       9,062  

Foreign currency translation of foreign operations, net of tax

     —          —         92,244       92,244       30,250       122,494  

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

     —          —         41,247       41,247       5       41,252  

Transactions with owners of the Company, recognized directly in equity

             

Dividends paid

     —          —         —         —         (82,552 )      (82,552 ) 

Issuance of shares of capital by subsidiaries and others

     —          —         —         —         18,186       18,186  

Transactions between consolidated entities

     —          —         (8,246 )      (8,246 )      2,806       (5,440 ) 

Changes in consolidation scope

     —          —         —         —         18,968       18,968  

Dividends paid (hybrid bond)

     —          —         —         —         (10,039 )      (10,039 ) 

Others

     —          —         —         —         371       371  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at September 30, 2019

   W   4,053,578        50,279,721       14,297,191       68,630,490       1,394,055       70,024,545  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

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

Cash flows from operating activities

    

Loss for the period

   W (932,253)       (431,768 ) 
  

 

 

   

 

 

 

Adjustments for:

    

Income tax benefit

     (306,915 )      (421,917 ) 

Depreciation

     7,988,982       7,462,754  

Amortization

     115,614       86,932  

Employee benefits expense

     294,755       263,171  

Bad debt expense (reversal)

     (8,136 )      30,217  

Interest expense

     1,537,845       1,407,191  

Loss on disposal of financial assets

     490       —    

Loss on disposal of property, plant and equipment

     43,287       27,874  

Loss on abandonment of property, plant and equipment

     257,569       371,129  

Loss on impairment of property, plant and equipment

     37,152       701,317  

Loss on impairment of intangible assets

     513,519       —    

Loss on disposal of intangible assets

     28       23  

Increase to provisions

     365,800       666,152  

Loss on foreign currency translation, net

     838,889       273,723  

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

     (9,161 )      (9,222 ) 

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

     1,442       4,242  

Valuation and transaction gain on derivative instruments, net

     (704,830 )      (202,721 ) 

Share in income of associates and joint ventures, net

     (173,429 )      (282,766 ) 

Gain on disposal of financial assets

     (2,584 )      (755 ) 

Gain on disposal of property, plant and equipment

     (35,765 )      (91,132 ) 

Gain on disposal of intangible assets

     (206 )      (11 ) 

Gain on disposal of associates and joint ventures

     (7,131 )      —    

Loss on disposal of associates and joint ventures

     156       4,722  

Gain on disposal of subsidiaries

     —         (3 ) 

Interest income

     (195,998 )      (175,004 ) 

Dividends income

     (6,002 )      (11,811 ) 

Others, net

     302,596       9,783  
  

 

 

   

 

 

 
     10,847,967       10,113,888  
  

 

 

   

 

 

 

Changes in:

    

Trade receivables

     1,119,726       1,021,407  

Non-trade receivables

     197,790       408,108  

Accrued income

     898,666       567,421  

Other receivables

     66,706       (770 ) 

Other current assets

     (173,524 )      (384,581 ) 

Inventories

     (349,263 )      (1,037,621 ) 

Other non-current assets

     (535,919 )      (86,162 ) 

Trade payables

     (1,409,167 )      (409,559 ) 

Non-trade payables

     (123,249 )      (331,637 ) 

Accrued expenses

     (885,076 )      (714,908 ) 

Other payables

     (1,274 )      —    

Other current liabilities

     1,050,488       747,259  

Other non-current liabilities

     427,797       227,709  

Investments in associates and joint ventures (dividends received)

     167,018       122,164  

Provisions

     (1,329,940 )      (1,108,053 ) 

Payments of employee benefit obligations

     (42,722 )      (57,652 ) 

Plan assets

     (9,564 )      (11,547 ) 
  

 

 

   

 

 

 
   W (931,507 )      (1,048,422 ) 
  

 

 

   

 

 

 

 

(Continued)

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Cash Flows, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

 

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

Cash generated from operating activities

   W 8,984,207       8,633,698  

Dividends received (available-for-sale financial assets)

     4,431       10,518  

Interest paid

     (1,546,746 )      (1,351,612 ) 

Interest received

     116,014       125,012  

Income taxes paid

     (326,135 )      (440,884 ) 
  

 

 

   

 

 

 

Net cash from operating activities

     7,231,771       6,976,732  
  

 

 

   

 

 

 

Cash flows from investing activities

    

Proceeds from disposals of associates and joint ventures

     —         1,604  

Acquisition of associates and joint ventures

     (67,268 )      (253,880 ) 

Proceeds from disposals of property, plant and equipment

     255,846       212,338  

Acquisition of property, plant and equipment

     (8,549,004 )      (9,166,460 ) 

Proceeds from disposals of intangible assets

     7,421       11  

Acquisition of intangible assets

     (143,125 )      (67,652 ) 

Proceeds from disposals of financial assets

     1,641,588       1,335,392  

Acquisition of financial assets

     (3,719,145 )      (3,868,179 ) 

Increase in loans

     (195,468 )      (120,260 ) 

Collection of loans

     119,043       81,730  

Increase in deposits

     (201,674 )      (412,960 ) 

Decrease in deposits

     202,955       180,050  

Proceeds from disposals of assets held-for-sale

     1,562       17,316  

Receipt of government grants

     11,214       23,250  

Net cash inflow from changes in consolidation scope

     (2,820 )      2,031  

Other cash outflow from investing activities, net

     (97,167 )      (39,036 ) 
  

 

 

   

 

 

 

Net cash used in investing activities

     (10,736,042 )      (12,074,705 ) 
  

 

 

   

 

 

 

Cash flows from financing activities

    

Proceeds from short-term borrowings, net

     634,535       377,007  

Proceeds from long-term borrowings and debt securities

     8,608,168       11,330,658  

Repayment of long-term borrowings and debt securities

     (5,164,783 )      (5,377,108 ) 

Payment of lease liabilities

     (405,881 )      (117,572 ) 

Settlement of derivative instruments, net

     106,224       8,405  

Change in non-controlling interest

     12,346       9,362  

Dividends paid (hybrid bond)

     (10,039 )      (13,244 ) 

Dividends paid

     (84,526 )      (574,505 ) 

Other cash outflow from financing activities, net

     —         (87 ) 
  

 

 

   

 

 

 

Net cash from financing activities

     3,696,044       5,642,916  
  

 

 

   

 

 

 

Net increase in cash and cash equivalents before

effect of exchange rate fluctuations

     191,773       544,943  

Effect of exchange rate fluctuations on cash held

     (4,513 )      10,365  
  

 

 

   

 

 

 

Net increase in cash and cash equivalents

     187,260       555,308  

Cash and cash equivalents at January 1

     1,358,345       2,369,739  
  

 

 

   

 

 

 

Cash and cash equivalents at September 30

   W 1,545,605       2,925,047  
  

 

 

   

 

 

 

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 nine-month periods ended September 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 September 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 nine-month periods ended September 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 nine-month periods ended September 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 September 30, 2019 and 2018 are W1,263,640 million and W1,131,690 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 (‘leases of low-value assets’).

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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        (3,018 )       875,870  

Assets held-for-sale

     22,881        —          22,881  
  

 

 

    

 

 

    

 

 

 

Total current assets

     19,745,068        (3,018 )       19,742,050  
  

 

 

    

 

 

    

 

 

 

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        4,588,543        157,331,737  

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        4,587,207        170,091,200  
  

 

 

    

 

 

    

 

 

 

Total Assets

   W 185,249,061        4,584,189        189,833,250  
  

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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        506,968        6,912,363  

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        506,968        22,348,501  
  

 

 

    

 

 

    

 

 

 

Non-current liabilities

        

Non-current trade and other payables, net

     2,941,696        4,077,221        7,018,917  

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        4,077,221        96,391,987  
  

 

 

    

 

 

    

 

 

 

Total Liabilities

   W 114,156,299        4,584,189        118,740,488  
  

 

 

    

 

 

    

 

 

 

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        4,584,189        189,833,250  
  

 

 

    

 

 

    

 

 

 

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 nine-month periods ended September 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 incremental borrowing rate as a lessee at the date of initial application is 1.81% ~ 3.16%.

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 September 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 nine-month periods ended September 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 leases 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 leases 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 nine-month periods ended September 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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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 nine-month periods ended September 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 consolidation 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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

4.

Segment, Geographic and Other Information, Continued

 

(2)

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

 

 

In millions of won  

September 30, 2019

 

Segment

  Total
segment
revenue 		    Intersegment
revenue 		    Revenue
from
external
customers 		    Operating
Profit (loss) 		    Depreciation
and
amortization 		    Interest
income 		    Interest
expense 		    Profit (loss) related
associates, joint
ventures and
subsidiaries 		 
    Three- month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		 

Transmission and distribution

  W 15,929,809       44,172,408       295,434       1,027,377       15,634,375       43,145,031       672,729       (1,478,889 )      911,592       2,715,313       17,382       53,500       197,267       579,134       (18,789 )      133,311  

Electric power generation (Nuclear)

    2,035,375       6,628,824       2,037,944       6,628,812       (2,569 )      12       (22,944 )      778,589       800,107       2,388,534       11,487       29,110       127,890       383,643       (4,126 )      (1,847 ) 

Electric power generation (Non-nuclear)

    6,593,542       18,389,805       6,489,504       17,833,957       104,038       555,848       525,190       826,213       987,258       2,928,392       7,829       19,390       158,543       489,867       5,565       48,646  

Plant maintenance & engineering service

    593,605       1,756,093       510,385       1,511,776       83,220       244,317       73,802       204,634       30,516       94,536       3,447       10,460       441       2,496       869       295  

Others

    276,949       745,086       183,728       458,631       93,221       286,455       (6,528 )      43,362       13,144       52,316       38,659       105,281       41,924       102,963       —         —    

Consolidation adjustments

    (9,516,995 )      (27,460,553 )      (9,516,995 )      (27,460,553 )      —         —         (2,983 )      (63,183 )      (28,038 )      (74,495 )      (7,385 )      (21,743 )      (4,749 )      (20,258 )      —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  W 15,912,285       44,231,663       —         —         15,912,285       44,231,663       1,239,266       310,726       2,714,579       8,104,596       71,419       195,998       521,316       1,537,845       (16,481 )      180,405  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
In millions of won  

September 30, 2018

 

Segment

  Total
segment
revenue 		    Intersegment
revenue 		    Revenue
from
external
customers 		    Operating
Profit (loss) 		    Depreciation
and
amortization 		    Interest
income 		    Interest
expense 		    Profit (loss) related
associates, joint
ventures and
subsidiaries 		 
    Three- month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		 

Transmission and distribution

  W 16,317,886       45,139,353       257,643       985,287       16,060,243       44,154,066       741,453       (1,398,832 )      868,508       2,679,981       15,313       44,963       178,271       529,806       (13,534 )      230,824  

Electric power generation (Nuclear)

    2,382,955       6,306,984       2,383,676       6,257,756       (721 )      49,228       511,379       734,951       781,788       2,337,629       14,131       24,104       125,893       377,269       5,587       8,101  

Electric power generation (Non-nuclear)

    6,499,838       19,507,672       6,384,969       18,913,196       114,869       594,476       31,972       1,103,328       823,609       2,448,237       8,984       23,503       150,488       433,159       14,599       38,227  

Plant maintenance & engineering service

    598,982       1,737,019       516,972       1,491,697       82,010       245,322       54,306       159,534       28,467       85,603       3,336       9,161       1,078       3,034       (552 )      895  

Others

    256,790       732,024       103,347       322,069       153,443       409,955       58,119       113,479       13,855       41,303       32,987       95,307       31,133       85,556       —         —    

Consolidation adjustments

    (9,646,607 )      (27,970,005 )      (9,646,607 )      (27,970,005 )      —         —         (2,014 )      (131,976 )      (15,048 )      (43,067 )      (7,863 )      (22,034 )      (6,980 )      (21,633 )      —         —    
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
  W 16,409,844       45,453,047       —         —         16,409,844       45,453,047       1,395,215       580,484       2,501,179       7,549,686       66,888       175,004       479,883       1,407,191       6,100       278,047  
 

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

20

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won       

September 30, 2019

 

Segment

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

Transmission and distribution

   W 107,674,202        3,767,345        4,122,917        55,232,008  

Electric power generation (Nuclear)

     57,559,385        61,422        1,483,369        31,937,661  

Electric power generation (Non-nuclear)

     53,704,844        2,122,298        2,774,928        31,873,525  

Plant maintenance & engineering service

     3,376,305        48,760        47,380        1,127,621  

Others

     7,914,823        —          282,523        3,533,780  

Consolidation adjustments

     (36,354,520 )       —          (18,988 )       145,899  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   193,875,039        5,999,825        8,692,129        123,850,494  
  

 

 

    

 

 

    

 

 

    

 

 

 
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)  
     September 30, 2019      September 30, 2018      September 30,
2019 		     December 31,
2018 		 

Geographical unit

   Three-
month
period
ended 		     Nine-
month
period ended 		     Three-
month
period ended 		     Nine-
month
period ended 		 

Domestic

   W 15,557,106        43,149,004        15,903,653      43,862,524      164,377,277        157,037,428  

Overseas (*1)

     355,179        1,082,659        506,191      1,590,523      2,862,739        3,299,346  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W 15,912,285        44,231,663        16,409,844      45,453,047      167,240,016        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.

 

21

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 nine-month periods ended September 30, 2019 and 2018.

 

5.

Classification of Financial Instruments

 

(1)

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

 

In millions of won    September 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 —          —          1,545,605        —          1,545,605  

Current financial assets

              

Current financial assets at fair value through profit or loss

     2,105,295        —          —          —          2,105,295  

Current financial assets at amortized costs

     —          —          12,053        —          12,053  

Current derivative assets

     46,953        —          —          62,440        109,393  

Other financial assets

     —          —          2,202,631        —          2,202,631  

Trade and other receivables

     —          —          6,799,465        —          6,799,465  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     2,152,248        —          10,559,754        62,440        12,774,442  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Non-current assets

 

           

Non-current financial assets

              

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

     645,539        —          —          —          645,539  

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

     —          394,372        —          —          394,372  

Non-current financial assets at amortized costs

     —          —          1,220        —          1,220  

Non-current derivative assets

     265,801        —          —          229,377        495,178  

Other financial assets

     —          —          1,213,884        —          1,213,884  

Trade and other receivables

     —          —          1,982,026        —          1,982,026  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     911,340        394,372        3,197,130        229,377        4,732,219  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W   3,063,588        394,372        13,756,884        291,817        17,506,661  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

22

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

5.

Classification of Financial Instruments, Continued

 

(1)

Classification of financial assets as of September 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  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

23

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

5.

Classification of Financial Instruments, Continued

 

(2)

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

 

In millions of won    September 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 —          1,659,161        —          1,659,161  

Debt securities

     —          8,551,715        —          8,551,715  

Derivative liabilities

     2,690        —          69,380        72,070  

Trade and other payables

     —          5,357,575        —          5,357,575  
  

 

 

    

 

 

    

 

 

    

 

 

 
     2,690        15,568,451        69,380        15,640,521  
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-current liabilities

           

Borrowings

     —          3,781,895        —          3,781,895  

Debt securities

     —          52,020,093        —          52,020,093  

Derivative liabilities

     44,478        —          62,140        106,618  

Trade and other payables

     —          7,135,862        —          7,135,862  
  

 

 

    

 

 

    

 

 

    

 

 

 
     44,478        62,937,850        62,140        63,044,468  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 47,168        78,506,301        131,520        78,684,989  
  

 

 

    

 

 

    

 

 

    

 

 

 
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  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

24

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

5.

Classification of Financial Instruments, Continued

 

(3)

Classification of comprehensive income from financial instruments for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won        September 30, 2019     September 30, 2018  
         Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month period
ended 		 

Cash and cash equivalents

 

Interest income

   W 22,672       57,917       15,456       36,466  

Financial assets at fair value through profit or loss

 

Interest income

     1,358       4,613       145       435  
 

Gain (loss) on valuation of financial assets

     (376 )      7,719       3,380       4,980  
 

Gain (loss) on disposal of financial assets

     1,391       2,094       83       755  

Financial assets at fair value through other comprehensive income

 

Dividends income

     2,262       6,002       —         11,811  

Financial assets at amortized cost

 

Interest income

     6       31       22       63  

Loans and receivables

 

Interest income

     13,427       39,465       10,835       27,631  

Trade and other receivables

 

Interest income

     25,216       66,248       22,403       65,474  

Short-term financial instruments

 

Interest income

     8,644       27,330       12,262       35,166  

Long-term financial instruments

 

Interest income

     —         1       5,765       9,769  

Other financial assets

 

Interest income

     96       393       —         —    

Financial liabilities carried at amortized cost

 

Interest expense of borrowings and debt securities

     359,155       1,059,024       342,755       992,548  
 

Interest expense of trade and other payables

     17,969       49,275       10,366       33,346  
 

Interest expense of others

     144,192       429,546       126,762       381,297  
 

Loss on foreign currency transactions and translations

     (476,570 )      (872,189 )      77,901       (304,181 ) 

Derivatives (trading)

 

Loss on valuation of derivatives

     156,956       317,810       (64,496 )      8,662  
 

Loss on transaction of derivatives

     13,668       45,563       14,630       37,268  

Derivatives (applying hedge accounting)

 

Gain on valuation of derivatives (profit or loss)

     139,704       290,033       (51,914 )      152,169  
 

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

     (7,627 )      26,536       13,512       (52,444 ) 
 

Gain (loss) on transaction of derivatives

     34,557       51,424       3,778       4,622  

 

25

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

6.

Restricted Deposits

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

 

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

Cash and cash equivalents

  

Deposits for government project

   W 13,365        12,747  
  

Collateral provided for borrowings

     92,317        100,998  
  

Collateral provided for lawsuit

     3        3  
  

Deposits for transmission regional support program

     7,086        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

     570,953        498,555  

Long-term financial instruments

  

Escrow

     74        69  
  

Guarantee deposits for banking accounts at oversea branches

     338        315  
  

Collateral provided for borrowings

     11,745        —    
  

Decommissioning costs of nuclear power plants

     220,465        245,896  
  

Funds for developing small and medium enterprises (*)

     200,000        200,000  
     

 

 

    

 

 

 
      W 1,205,346        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 September 30, 2019 and December 31, 2018.

 

7.

Cash and Cash Equivalents

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

 

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

Cash

   W 87        138  

Other demand deposits

     985,201        927,650  

Short-term deposits classified as cash equivalents

     296,246        211,424  

Short-term investments classified as cash equivalents

     264,071        219,133  
  

 

 

    

 

 

 
   W 1,545,605        1,358,345  
  

 

 

    

 

 

 

 

26

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

8.

Trade and Other Receivables

 

(1)

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

 

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

Current assets

           

Trade receivables

   W 6,229,136        (216,938 )       —          6,012,198  

Other receivables

     804,900        (15,456 )       (2,177 )       787,267  
  

 

 

    

 

 

    

 

 

    

 

 

 
     7,034,036        (232,394 )       (2,177 )       6,799,465  
  

 

 

    

 

 

    

 

 

    

 

 

 

Non-current assets

           

Trade receivables

     377,299        (244 )       (418 )       376,637  

Other receivables

     1,699,638        (89,598 )       (4,651 )       1,605,389  
  

 

 

    

 

 

    

 

 

    

 

 

 
     2,076,937        (89,842 )       (5,069 )       1,982,026  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   9,110,973        (322,236 )       (7,246 )       8,781,491  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

27

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

8.

Trade and Other Receivables, Continued

 

(2)

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

 

 

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

Current assets

         

Non-trade receivables

   W   336,585        (15,102 )      —         321,483  

Accrued income

     77,328        —         —         77,328  

Deposits

     272,341        —         (2,177 )      270,164  

Finance lease receivables

     103,982        (354 )      —         103,628  

Others

     14,664        —         —         14,664  
  

 

 

    

 

 

   

 

 

   

 

 

 
     804,900        (15,456 )      (2,177 )      787,267  
  

 

 

    

 

 

   

 

 

   

 

 

 

Non-current assets

         

Non-trade receivables

     134,770        (80,338 )      —         54,432  

Accrued income

     1,386        —         —         1,386  

Deposits

     333,603        —         (4,651 )      328,952  

Finance lease receivables

     1,117,700        (563 )      —         1,117,137  

Others

     112,179        (8,697 )      —         103,482  
  

 

 

    

 

 

   

 

 

   

 

 

 
     1,699,638        (89,598 )      (4,651 )      1,605,389  
  

 

 

    

 

 

   

 

 

   

 

 

 
   W   2,504,538        (105,054 )      (6,828 )      2,392,656  
  

 

 

    

 

 

   

 

 

   

 

 

 

 

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.

 

28

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

8.

Trade and Other Receivables, Continued

 

(4)

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

 

 

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

Trade receivables: (not overdue)

   W   6,334,543        7,419,648  
  

 

 

    

 

 

 

Trade receivables: (impairment reviewed)

     271,892        298,735  
  

 

 

    

 

 

 

Less than 60 days

     11,819        2,525  

60 ~ 90 days

     28,099        37,266  

90 ~ 120 days

     21,691        16,033  

120 days ~ 1 year

     61,885        46,204  

Over 1 year

     148,398        196,707  
  

 

 

    

 

 

 
     6,606,435        7,718,383  

Less: allowance for doubtful accounts

     (217,182 )       (215,868 ) 

Less: present value discount

     (418 )       (448 ) 
  

 

 

    

 

 

 
   W   6,388,835        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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 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

     26,505        7,281        41,498        17,817  

Write-off, etc.

     (8,069 )       (550 )       (7,696 )       (244 ) 

Reversal

     (41,922 )       (36 )       (1,726 )       (143 ) 

Others

     24,800        (6,367 )       3,568        9,160  
  

 

 

    

 

 

    

 

 

    

 

 

 

Ending balance

   W   217,182        105,054        215,868        104,726  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

29

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 September 30, 2019 and December 31, 2018 are as follows:

 

 

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

Financial assets at fair value through profit or loss

           

Beneficiary Certificate

   W   23,849        245,381        100        320,148  

Cooperative

     —          5,147        —          5,052  

Other

     2,081,446        190,291        313,793        83,586  
  

 

 

    

 

 

    

 

 

    

 

 

 
     2,105,295        440,819        313,893        408,786  
  

 

 

    

 

 

    

 

 

    

 

 

 

Financial assets designated as at fair value through profit or loss

           

Debt with embedded derivatives

     —          151,544        —          187,483  

Other

     —          53,176        —          10,773  
  

 

 

    

 

 

    

 

 

    

 

 

 
     —          204,720        —          198,256  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   2,105,295        645,539        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 nine-month period ended September 30, 2019 and the year ended December 31, 2018 are as follows:

 

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

Listed

   W   210,056        —          —          (10,035 )       —          3,801        203,822  

Unlisted

     189,439        —          (916 )       22        —          2,005        190,550  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
     399,495        —          (916 )       (10,013 )       —          5,806        394,372  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

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 )       (10,013 )       —          5,806        394,372  

 

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  

 

30

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 September 30, 2019 and December 31, 2018 are as follows:

 

 

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

Listed

             

Korea District Heating Corp.

     2,264,068        19.55 %    W 173,201        112,977        112,977  

Ssangyong Motor Co., Ltd.

     38,568        0.03 %      428        111        111  

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        54        54  

PAN Ocean Co., Ltd.

     1,492        0.00 %      14        7        7  

Dongbu Corporation

     955        0.02 %      12        9        9  

KSP Co., Ltd.

     22,539        0.08 %      24        37        37  

STX Heavy Industries Co., Ltd.

     8,639        0.13 %      191        21        21  

Codes Combine Co., Ltd.

     291        0.00 %      1        1        1  

PT Adaro Energy Tbk

     480,000,000        1.50 %      71,554        52,508        52,508  

Energy Fuels Inc.

     1,711,814        1.91 %      16,819        3,977        3,977  

Baralaba Coal Company Limited

     99,763        0.07 %      18,445        —          —    

Denison Mines Corp.

     58,284,000        10.42 %      84,134        33,854        33,854  

Fission 3.0

     75,000        0.14 %      —          4        4  

Fission Uranium Corp.

     800,000        0.16 %      785        261        261  
       

 

 

    

 

 

    

 

 

 
          365,843        203,822        203,822  
       

 

 

    

 

 

    

 

 

 

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        18,400        18,400  

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        2,693        2,693  

KODE NOVUS I LLC

     —          10.00 %      —          —          —    

Others (*4)

          9,499        6,320        6,320  
       

 

 

    

 

 

    

 

 

 
          282,322        190,550        190,550  
       

 

 

    

 

 

    

 

 

 
        W   648,165        394,372        394,372  
       

 

 

    

 

 

    

 

 

 

 

(*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 nine-month period ended September 30, 2019.

(*4)

Equity securities acquired through debt-for-equity swaps of electricity rate bonds, etc. It consists of 214 companies including Borneo Co., Ltd.

 

31

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 September 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

     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.

 

32

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

11.

Financial assets at amortized cost

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

 

 

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

Government bonds

   W 1,273        —          —          —          1,273  

Financial bonds

     12,000        —          —          —          12,000  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W 13,273        —          —          —          13,273  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Current

   W   12,053        —          —          —          12,053  

Non-current

     1,220        —          —          —          1,220  
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 September 30, 2019 and December 31, 2018 are as follows:

 

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

Derivative assets

           

Currency forward

   W 4,013        61,243        2,128        12,606  

Currency swap

     105,380        430,059        39,979        43,436  

Interest rate swap

     —          3,876        —          2,342  

Others (*1)

     —          —          —          1,844  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   109,393        495,178        42,107        60,228  
  

 

 

    

 

 

    

 

 

    

 

 

 

Derivative liabilities

           

Currency forward

   W 535        —          1,956        —    

Currency swap

     59,240        30,449        14,881        233,690  

Interest rate swap

     10,139        76,169        1,439        58,042  

Others (*2)

     2,156        —          2,155        —    
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 72,070        106,618        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 the prior year. The Group sold their shares during the nine-month period ended September 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’.

 

33

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(2)

Currency forward contracts which are not designated as hedging instruments as of September 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  

Hana Bank

     2014.04.10        2021.07.12      W 55,120        USD 52,000      W   1,060.00  

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  

Hana Bank

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

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  

Korea Development Bank

     2019.09.02        2019.10.07        8,477        USD 7,000        1,211.00  

Hana Bank

     2019.09.03        2019.10.07        12,143        USD 10,000        1,214.30  

Hana Bank

     2019.09.04        2019.10.07        6,026        USD 5,000        1,205.20  

CCB

     2019.09.04        2019.10.08        6,039        USD 5,000        1,207.83  

Credit Agricole

     2019.09.05        2019.10.10        11,988        USD 10,000        1,198.80  

Nonghyup Bank

     2019.09.05        2019.10.10        5,996        USD 5,000        1,199.10  

Woori Bank

     2019.09.06        2019.10.10        11,961        USD 10,000        1,196.10  

Morgan Stanley

     2019.09.09        2019.10.11        11,915        USD 10,000        1,191.45  

Standard Chartered

     2019.09.10        2019.10.11        11,912        USD 10,000        1,191.20  

Hana Bank

     2019.09.19        2019.10.21        11,943        USD 10,000        1,194.25  

Kookmin Bank

     2019.09.20        2019.10.23        5,951        USD 5,000        1,190.20  

CCB

     2019.09.24        2019.10.25        5,959        USD 5,000        1,191.85  

Hana Bank

     2019.09.25        2019.10.02        1,846        EUR 1,399        1,319.50  

Shinhan Bank

     2019.09.27        2019.10.28        12,006        USD 10,000        1,200.57  

Nonghyup Bank

     2019.09.27        2019.10.28        6,000        USD 5,000        1,200.00  

Mizuho Bank

     2019.09.30        2019.10.30        11,985        USD 10,000        1,198.48  

BNP Paribas

     2019.09.06        2019.10.07        6,579        USD 5,500        1,196.15  

Shinhan Bank

     2019.09.10        2019.10.02        8,341        USD 7,000        1,191.50  

CCB

     2019.09.10        2019.10.07        5,361        USD 4,500        1,191.30  

Shinhan Bank

     2019.09.16        2019.10.02        1,776        USD 1,500        1,183.68  

Shinhan Bank

     2019.09.16        2019.10.07        2,959        USD 2,500        1,183.43  

Korea Development Bank

     2019.09.17        2019.10.14        14,837        USD 12,500        1,186.98  

Hana Bank

     2019.09.18        2019.10.14        10,684        USD 9,000        1,187.09  

Korea Development Bank

     2019.09.20        2019.10.14        6,547        USD 5,500        1,190.45  

Credit Agricole

     2019.09.26        2019.10.14        4,795        USD 4,000        1,198.70  

Societe Generale

     2019.09.26        2019.10.23        8,390        USD 7,000        1,198.56  

MUFG

     2019.09.27        2019.10.23        10,206        USD 8,500        1,200.75  

BNP Paribas

     2019.09.27        2019.10.23        10,206        USD 8,500        1,200.75  

BNP Paribas

     2019.09.02        2019.10.04        880        USD 727        1,209.45  

MUFG

     2019.09.02        2019.10.04        4,236        USD 3,502        1,209.40  

Societe Generale

     2019.09.02        2019.10.04        6,050        USD 5,000        1,210.00  

BNP Paribas

     2019.09.11        2019.10.17        5,939        USD 5,000        1,187.80  

Shinhan Bank

     2019.09.11        2019.10.17        8,306        USD 7,000        1,186.50  

Nova Scotia

     2019.09.11        2019.10.17        4,023        USD 3,398        1,183.90  

Morgan Stanley

     2019.09.20        2019.10.24        3,267        USD 2,745        1,190.15  

Nonghyup Bank

     2019.09.20        2019.10.24        11,883        USD 10,000        1,188.30  

BNP Paribas

     2019.09.20        2019.10.24        5,937        USD 5,000        1,187.30  

Standard Chartered

     2019.09.20        2019.10.24        5,934        USD 5,000        1,186.70  

HSBC

     2019.09.23        2019.10.10        5,959        USD 5,000        1,191.85  

MUFG

     2019.09.23        2019.10.10        5,960        USD 5,000        1,192.05  

Nonghyup Bank

     2019.09.30        2019.10.22        11,972        USD 10,000        1,197.20  

 

34

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(2)

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

 

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  

Hana Bank

     2019.09.03        2019.10.07      W 13,344        USD 11,000      W   1,213.10  

Busan Bank

     2019.09.09        2019.10.07        3,569        USD 3,000        1,189.65  

Kookmin Bank

     2019.09.10        2019.10.07        5,954        USD 5,000        1,190.88  

Nova Scotia

     2019.09.17        2019.10.23        4,754        USD 4,000        1,188.53  

Kookmin Bank

     2019.09.20        2019.10.23          13,073        USD 11,000        1,188.45  

Nova Scotia

     2019.09.25        2019.10.23        11,973        USD 10,000        1,197.25  

Hana Bank

     2019.09.26        2019.10.23        9,585        USD 8,000        1,198.08  

Societe Generale

     2019.09.05        2019.10.07        4,801        USD 4,000        1,200.20  

Nova Scotia

     2019.09.06        2019.10.10        2,092        USD 1,750        1,195.40  

Shinhan Bank

     2019.09.09        2019.10.11        5,355        USD 4,500        1,190.10  

Woori Bank

     2019.09.10        2019.10.14        4,768        USD 4,000        1,192.04  

Nova Scotia

     2019.09.10        2019.10.14        5,365        USD 4,500        1,192.30  

Nova Scotia

     2019.09.11        2019.10.17        5,948        USD 5,000        1,189.60  

Credit Agricole

     2019.09.18        2019.10.21        3,562        USD 3,000        1,187.30  

Credit Agricole

     2019.09.18        2019.10.21        1,786        USD 1,500        1,190.95  

Woori Bank

     2019.09.19        2019.10.23        2,208        USD 1,850        1,193.65  

Standard Chartered

     2019.09.25        2019.10.28        4,789        USD 4,000        1,197.30  

Shinhan Bank

     2019.09.25        2019.10.28        5,511        USD 4,600        1,197.95  

Societe Generale

     2019.09.26        2019.10.31        4,192        USD 3,500        1,197.80  

Standard Chartered

     2019.09.27        2019.11.01        6,005        USD 5,000        1,201.05  

Nova Scotia

     2019.09.27        2019.11.01        7,201        USD 6,000        1,200.10  

Hana Bank

     2019.07.31        2020.07.14        4,993        USD 4,257        1,173.00  

 

35

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(3)

Currency swap contracts which are not designated as hedging instruments as of September 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  

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  

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  

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  

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  

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  

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  

Citibank

     2019~2024        239,956        CHF 200,000        1.44 %      0.00 %      1,199.78  

Korea Development Bank

     2019~2027        119,978        CHF 100,000        1.43 %      0.05 %      1,199.78  

 

36

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(4)

Currency swap contracts which are designated as hedging instruments as of September 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  

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  

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  

Korea Development Bank

     2019~2022        117,340        USD 100,000      1.06%   2.38%     1,173.40  

Hana Bank

     2019~2022        117,340        USD 100,000      1.06%   2.38%     1,173.40  

Kookmin Bank

     2019~2022        117,340        USD 100,000      1.06%   2.38%     1,173.40  

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  

Hana Bank

     2014~2020        55,340        USD 50,000      2.16%   2.50%     1,106.80  

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  

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  

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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(5)

Interest rate swap contracts which are not designated as hedging instruments as of September 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

Hana Bank

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

Hana Bank

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

Nomura (*1)

     2017~2037        30,000      2.05%   3.08%

Hana Bank

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

Nomura (*2)

     2018~2038        30,000      2.56%   3.75%

Hana Bank

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

Hana Bank

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

Hana Bank

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

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 September 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 82,498      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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

12.

Derivatives, Continued

 

(7)

Gains and losses on valuation and transaction of derivatives for the three and nine-month periods ended September 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) (*) 		 
     September 30, 2019     September 30, 2018      September 30, 2019     September 30, 2018      September 30, 2019     September 30, 2018  
     Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		     Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		     Three-
month
period
ended 		    Nine-
month
period
ended 		    Three-
month
period
ended 		    Nine-
month
period
ended 		 

Currency forward

   W 27,848       50,381       (87,759 )      2,220        5,024       15,266       5,280       22,359        —         —         1,141       2,747  

Currency swap

     279,069       588,832       (32,770 )      151,568        44,208       83,119       13,475       19,425        (9,091 )      34,436       12,628       (55,746 ) 

Interest rate swap

     (10,257 )      (31,370 )      4,119       7,043        (1,007 )      (1,398 )      (347 )      106        1,464       (7,900 )      (257 )      555  
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
   W   296,660       607,843       (116,410 )      160,831        48,225       96,987       18,408       41,890        (7,627 )      26,536       13,512       (52,444 ) 
  

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

(*)

For the nine-month period ended September 30, 2019, the net gain on valuation of derivatives applying cash flow hedge accounting of W9,062 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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

13.

Other Financial Assets

 

(1)

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

 

 

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

Loans and receivables

   W 99,360        689,148        123,657        639,673  

Allowance for doubtful accounts

     (53 )       (4,935 )       (12 )       (4,940 ) 

Present value discount

     (1,014 )       (36,695 )       (992 )       (38,712 ) 

Long-term/short-term financial instruments

     2,104,338        566,366        1,869,286        448,741  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   2,202,631        1,213,884        1,991,939        1,044,762  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(2)

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

 

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

Short-term loans and receivables

           

Loans for tuition

   W 35,045        —          (1,014 )       34,031  

Loans for housing

     17,155        —          —          17,155  

Other loans

     47,160        (53 )       —          47,107  
  

 

 

    

 

 

    

 

 

    

 

 

 
     99,360        (53 )       (1,014 )       98,293  
  

 

 

    

 

 

    

 

 

    

 

 

 

Long-term loans and receivables

           

Loans for tuition

     428,044        —          (36,677 )       391,367  

Loans for housing

     190,252        —          —          190,252  

Loans for related parties

     66,393        (4,930 )       —          61,463  

Other loans

     4,459        (5 )       (18 )       4,436  
  

 

 

    

 

 

    

 

 

    

 

 

 
     689,148        (4,935 )       (36,695 )       647,518  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   788,508        (4,988 )       (37,709 )       745,811  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

13.

Other Financial Assets, Continued

 

(3)

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

 

 

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

Beginning balance

   W 4,952        8,948  

Bad debt expense

     36        22  

Others

     —          (4,018 ) 
  

 

 

    

 

 

 

Ending balance

   W   4,988        4,952  
  

 

 

    

 

 

 

 

(4)

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

 

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

Time deposits

   W 1,436,023        245,954        1,602,285        63,358  

ABCP

     360,563        —          —          —    

CP

     24,752        —          —          —    

CD

     30,000        —          10,000        —    

RP

     10,000        —          —          —    

Others

     243,000        320,412        257,001        385,383  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   2,104,338        566,366        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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

14.

Inventories

 

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

 

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

Raw materials

   W   3,402,552        (1,430 )       3,401,122  

Merchandises

     349        —          349  

Work-in-progress

     177,147        —          177,147  

Finished goods

     38,317        —          38,317  

Supplies

     2,118,100        (4,437 )       2,113,663  

Inventories-in-transit

     917,648        —          917,648  

Other inventories

     14,631        —          14,631  
  

 

 

    

 

 

    

 

 

 
   W   6,668,744        (5,867 )       6,662,877  
  

 

 

    

 

 

    

 

 

 

 

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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018 were W4,442 million and W3,723 million, respectively.

The amounts of loss from inventory valuation included in other gains or losses for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 were W2,765 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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

15.

Finance Lease Receivables

 

(1)

Finance lease contracts

 

The Group entered into power purchase agreements (“PPA”) with Jordan Electric Power Company to provide a 373MW level Qatrana gas combined power plant over a 25 year lease term, and with Fujeij Wind Power Company to provide an 89.1MW level wind power plant over a 20 year lease term. The Group 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 78 energy efficiency contracts as finance leases with a lease term of 1 to 8 years. Also, the Group entered into a PPA with the Comision Federal de Electricidad in Mexico to provide for 25 years (from 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 September 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    September 30, 2019     December 31, 2018  
     Minimum lease
payment 		     Present value of
minimum lease
payment 		    Minimum lease
payment 		     Present value of
minimum lease
payment 		 

Less than 1 year

   W 173,744        103,982       124,918        84,688  

1 ~ 5 years

     619,186        236,355       467,518        223,622  

More than 5 years

     1,838,071        881,345       1,333,016        675,036  
  

 

 

    

 

 

   

 

 

    

 

 

 
   W   2,631,001        1,221,682       1,925,452        983,346  
  

 

 

    

 

 

   

 

 

    

 

 

 

Less : Allowance for doubtful accounts

        (917 )         (1,133 ) 
     

 

 

      

 

 

 
      W   1,220,765          982,213  
     

 

 

      

 

 

 

 

(3)

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

 

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

Beginning balance

   W   1,133       —    

Bad debt expense

     —         1,133  

Reversal of allowance for doubtful accounts

     (216 )      —    
  

 

 

   

 

 

 

Ending balance

   W 917       1,133  
  

 

 

   

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

16.

Non-Financial Assets

 

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

 

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

Advance payment

   W     188,342        6,688        156,073        160,628  

Prepaid expenses (*1)

     410,003        77,196        290,944        90,449  

Others (*2)

     432,812        81,515        431,871        76,075  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   1,031,157        165,399        878,888        327,152  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

  (*1)

Prepaid expenses amounting to W4,345 million was transferred to right-of-assets due to change in accounting policy.

  (*2)

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

 

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

Greenhouse gas emissions rights

   W   196,715        —          93,749        —    

Other quick assets and others (*3)

     236,097        81,515        338,122        76,075  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   432,812        81,515        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 and 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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries

 

(1)

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

 

 

               Percentage of ownership  

Subsidiaries

  

Key operation activities

   Location    September 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. (*6)

  

Power generation

   KOREA      —         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 % 

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 % 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(1)

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

 

               Percentage of ownership  

Subsidiaries

  

Key operation activities

   Location    September 30,
2019 		    December 31,
2018 		 

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 % 

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 % 

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 % 

 

46

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(1)

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

 

               Percentage of ownership  

Subsidiaries

  

Key operation activities

   Location    September 30,
2019 		    December 31,
2018 		 

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 % 

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 % 

KEPCO MCS Co., Ltd.

  

Electric meter reading and others

   KOREA      100.00 %      —    

KEPCO FMS Co., Ltd.

  

Security service and others

   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%.

 

47

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(1)

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

 

(*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.

(*6)

As of September 30, 2019, Garolim Tidal Power Plant Co., Ltd. selected a liquidator to proceed liquidation, and classified as current assets held for sale.

 

(2)

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

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

 

Subsidiaries

  

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 nine-month period ended September 30, 2019>

 

Subsidiaries

  

Reason

KEPCO Singapore Holdings Pte., Ltd.

   Liquidation

Garolim Tidal Power Plant Co., Ltd.

   Under Liquidation Process

 

(3)

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

 

In millions of won                            
September 30, 2019  

Subsidiaries

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

Korea Hydro & Nuclear Power Co., Ltd.

   W   57,559,385        31,937,661        6,628,823        394,059  

Korea South-East Power Co., Ltd.

     10,859,056        5,682,730        4,158,723        155,305  

Korea Midland Power Co., Ltd.

     12,326,734        8,632,529        3,211,951        (34,094 ) 

Korea Western Power Co., Ltd.

     10,699,984        6,803,070        3,259,822        (18,953 ) 

Korea Southern Power Co., Ltd.

     10,540,950        6,182,878        4,000,254        47,221  

Korea East-West Power Co., Ltd.

     9,278,120        4,572,317        3,759,055        60,667  

KEPCO Engineering & Construction Company, Inc.

     708,854        249,637        266,516        12,598  

KEPCO Plant Service & Engineering Co., Ltd.

     1,321,071        339,208        866,546        103,838  

KEPCO Nuclear Fuel Co., Ltd.

     787,712        375,907        236,765        37,936  

KEPCO KDN Co., Ltd.

     558,669        162,869        386,265        17,960  

Garolim Tidal Power Plant Co., Ltd.

     601        —          —          339  

KEPCO International HongKong Ltd.

     143,281        1        —          3,102  

KEPCO International Philippines Inc.

     110,214        8        —          51,715  

 

48

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(3)

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

 

In millions of won                            
September 30, 2019  

Subsidiaries

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

KEPCO Gansu International Ltd.

   W 10,857        566        —          (4 ) 

KEPCO Philippines Holdings Inc.

     169,105        10,452        —          28,824  

KEPCO Philippines Corporation

     5,646        66        —          (913 ) 

KEPCO Ilijan Corporation

       404,682        55,972        71,283        31,361  

KEPCO Lebanon SARL

     1,930        10,151        —          282  

KEPCO Neimenggu International Ltd.

     208,497        —          —          (263 ) 

KEPCO Shanxi International Ltd.

     560,443        215,619        —          2,790  

KOMIPO Global Pte Ltd.

     277,798        440        —          9,490  

KEPCO Netherlands B.V.

     127,392        92        —          1,057  

KOREA Imouraren Uranium Investment Corp.

     63,469        142        —          (43 ) 

KEPCO Australia Pty., Ltd.

     344        14        —          (425,644 ) 

KOSEP Australia Pty., Ltd.

     31,179        2,426        11,668        1,578  

KOMIPO Australia Pty., Ltd.

     40,089        2,641        11,668        3,134  

KOWEPO Australia Pty., Ltd.

     40,693        2,726        11,668        2,226  

KOSPO Australia Pty., Ltd.

     34,687        2,738        11,668        2,267  

KEPCO Middle East Holding Company

     98,050        89,528        —          (226 ) 

Qatrana Electric Power Company

     516,112        334,266        15,593        15,841  

KHNP Canada Energy, Ltd.

     52,035        52        —          (5 ) 

KEPCO Bylong Australia Pty., Ltd.

     44,764        361,338        —          (35,383 ) 

Korea Waterbury Uranium Limited Partnership

     20,906        180        —          (55 ) 

Korea Electric Power Nigeria Ltd.

     100        26        361        8  

KEPCO Holdings de Mexico

     187        25        —          (14 ) 

KST Electric Power Company

     557,426        450,893        38,631        4,768  

KEPCO Energy Service Company

     2,075        1,341        4,433        210  

KEPCO Netherlands S3 B.V.

     50,616        47        —          1,058  

PT. KOMIPO Pembangkitan Jawa Bali

     14,419        5,030        14,173        6,787  

PT. Cirebon Power Service

     2,205        483        5,822        288  

KOWEPO International Corporation

     —          10        —          (2 ) 

KOSPO Jordan LLC

     17,798        1,465        7,822        2,398  

EWP Philippines Corporation

     1,721        901        —          (106 ) 

EWP America Inc. (*1)

     72,276        4,087        17,804        (4,754 ) 

KNF Canada Energy Limited

     2,011        32        —          (34 ) 

EWP Barbados 1 SRL

     291,682        697        2,179        4,553  

Gyeonggi Green Energy Co., Ltd.

     255,981        163,026        11,164        (15,802 ) 

PT. Tanggamus Electric Power

     237,756        200,494        1,649        (1,367 ) 

Gyeongju Wind Power Co., Ltd.

     111,210        74,624        10,589        1,630  

KOMIPO America Inc.

     10,166        615        207        (655 ) 

KOSEP USA, Inc.

     1        5,341        —          (118 ) 

PT. EWP Indonesia

     31,635        —          —          2,966  

KEPCO Netherlands J3 B.V.

     124,557        151        —          (110 ) 

Korea Offshore Wind Power Co., Ltd.

     249,310        78,685        —          (9,112 ) 

Global One Pioneer B.V.

     227        94        —          (65 ) 

Global Energy Pioneer B.V.

     402        86        —          (54 ) 

Mira Power Limited

     344,662        273,116        —          (699 ) 

KOSEP Material Co., Ltd.

     2,738        1,027        2,501        99  

 

49

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(3)

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

 

 

In millions of won

  

September 30, 2019

 

Subsidiaries

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

Commerce and Industry Energy Co., Ltd.

   W   90,958        43,719        25,565        (7,623 ) 

KEPCO KPS Philippines Corp.

     8,454        4,517        4,432        23  

KOSPO Chile SpA

       158,313        68,564        —          403  

PT. KOWEPO Sumsel Operation And Maintenance Services

     878        213        —          (330 ) 

HeeMang Sunlight Power Co., Ltd.

     12,219        8,529        473        126  

Fujeij Wind Power Company

     226,246        209,874        —          367  

KOSPO Youngnam Power Co., Ltd.

     396,378        305,230        234,734        3,265  

HI Carbon Professional Private Special Asset Investment Trust 1

     2,999        —          —          9  

Chitose Solar Power Plant LLC

     123,575        109,635        13,709        2,353  

KEPCO Energy Solution Co., Ltd.

     307,747        2,234        2,305        2,258  

Solar School Plant Co., Ltd.

     205,818        1,154        1,414        1,749  

KOSPO Power Services Limitada

     3,435        1,080        7,511        1,004  

Energy New Industry Specialized Investment Private Investment Trust (*2)

     92,266        487        —          (4,326 ) 

KOEN Bylong Pty., Ltd.

     2        27        —          —    

KOMIPO Bylong Pty., Ltd.

     2        27        —          —    

KOWEPO Bylong Pty., Ltd.

     2        27        —          —    

KOSPO Bylong Pty., Ltd.

     2        27        —          —    

EWP Bylong Pty., Ltd.

     2        27        —          —    

KOWEPO Lao International

     5,135        549        3,218        1,112  

KEPCO US Inc.

     17,878        —          —          —    

KEPCO Alamosa LLC

     34,664        32        92        (264 ) 

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

     68,712        51,496        6,787        (419 ) 

KEPCO-LG CNS Mangilao Holdings LLC

     27,939        30,569        —          (921 ) 

Mangilao Investment LLC

     27,937        —          —          —    

KEPCO-LG CNS Mangilao Solar, LLC

     27,463        3        —          (373 ) 

Jeju Hanlim Offshore Wind Co., Ltd.

     14,439        277        —          (2,067 ) 

PT. Siborpa Eco Power

     12,241        58        —          (921 ) 

PT. Korea Energy Indonesia

     1,601        68        1,838        283  

KOLAT SpA

     40,678        526        —          (551 ) 

KEPCO California, LLC

     45,907        975        357        (343 ) 

KEPCO Mojave Holdings, LLC

     107,716        71,055        —          (3,135 ) 

Incheon Fuel Cell Co., Ltd.

     22,639        107        —          (678 ) 

KOEN Service Co., Ltd.

     5,116        4,013        17,871        550  

KOMIPO Service Co., Ltd.

     3,864        3,108        17,673        197  

KOWEPO Service Co., Ltd.

     4,341        1,432        17,405        2,372  

KOSPO Service Co., Ltd.

     5,329        1,634        14,484        3,125  

EWP Service Co., Ltd.

     3,011        724        12,992        1,727  

PT. KOMIPO Energy Indonesia

     1,615        11        —          (789 ) 

KNF partners Co., Ltd.

     906        446        1,896        161  

KOSPO USA Inc.

     2,757        78        —          (836 ) 

Nambu USA LLC

     102        1        —          98  

Tamra Offshore Wind Power Co., Ltd.

     158,985        124,003        14,320        1,153  

KEPCO MCS Co., Ltd.

     31,776        20,625        83,679        10,201  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(3)

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

 

 

In millions of won

           

September 30, 2019

 

Subsidiaries

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

KEPCO FMS Co., Ltd.

   W 3,953        6,603        11,707        (3,150 ) 

Firstkeepers Co., Ltd.

     914        3        —          (79 ) 

Secutec Co., Ltd.

     596        3        —          (97 ) 

SE Green Energy Co., Ltd.

     135,673        108,301        —          1,080  

 

(*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.

 

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 ) 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(3)

Summary of financial information of consolidated subsidiaries as of and for the nine-month period ended September 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 		 

KEPCO Bylong Australia Pty., Ltd.

   W 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 ) 

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 ) 

Mira Power Limited

       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        —          —    

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(3)

Summary of financial information of consolidated subsidiaries as of and for the nine-month period ended September 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 		 

KOSPO Bylong Pty., Ltd.

   W 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 ) 

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 September 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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(5)

As of September 30, 2019, the Group has following entitlements in relation to its subsidiaries as per its shareholder’s agreements:

 

 

Company

  

Group’s unexercised entitlements

KOSPO Youngnam Power Co., Ltd.

   The Group holds the right to purchase all shares held by the financial investors of KOSPO Youngnam Power Co., Ltd., a subsidiary of the Group, at face value of the issued shares on the 7th and 12th years from the company’s establishment date.

 

(6)

Details of non-controlling interest prior to intra-group eliminations as of and for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won

 

September 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 176,291       734,212       212,479       900,791       2,023,773  

Non-current assets

     228,391       586,859       496,375       3,168,411       4,480,036  

Current liabilities

     (7,725 )      (247,879 )      (166,501 )      (397,382 )      (819,487 ) 

Non-current liabilities

     (48,247 )      (91,329 )      (83,136 )      (2,209,749 )      (2,432,461 ) 

Net assets

     348,710       981,863       459,217       1,462,071       3,251,861  

Book value of non-controlling interest

     170,868       481,113       157,190       717,345       1,526,516  

Sales

     71,283       866,546       266,516       639,087       1,843,432  

Profit for the period

     31,361       103,838       12,598       43,759       191,556  

Profit for the period attributable to non-controlling interest

     15,367       50,881       4,312       3,950       74,510  

Cash flows from operating activities

     73,682       153,988       722       203,864       432,256  

Cash flows from investing activities

     2,757       (25,959 )      30,717       (267,789 )      (260,274 ) 

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

     (50,420 )      (43,361 )      (34,109 )      73,238       (54,652 ) 

Dividends to non-controlling interest

     (36,261 )      (39,470 )      (1,807 )      (16,934 )      (94,472 ) 

Effect of exchange rate fluctuation

     3,921       (38 )      23       7,713       11,619  

Net increase (decrease) of cash and cash equivalents

     (6,321 )      45,160       (4,454 )      92       34,477  

 

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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

17.

Consolidated Subsidiaries, Continued

 

(7)

Changes in goodwill

 

  (i)

Details of goodwill as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018.

 

(8)

Disposals of subsidiaries

The Group has completed liquidation process of KEPCO Singapore Holdings Pte., Ltd., and is in the process of liquidating Garolim Tidal Power Plant Co., Ltd., as of September 30, 2019.

 

18.

Investments in Associates and Joint Ventures

 

(1)

Investments in associates and joint ventures as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won

  

September 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        1,741,436  

Gemeng International Energy Co., Ltd.

   Power generation      CHINA        34.00 %      413,153        669,330  

PT. Bayan Resources TBK

   Resources development      INDONESIA        20.00 %      615,860        457,964  

Korea Power Exchange (*2)

  

Management of power market and others

     KOREA        100.00 %      127,839        268,394  

Hyundai Green Power Co., Ltd.

   Power generation      KOREA        29.00 %      88,885        129,834  

S-Power Co., Ltd.

   Power generation      KOREA        49.00 %      132,300        117,761  

PT. Cirebon Electric Power

   Power generation      INDONESIA        27.50 %      40,365        126,376  

Dongducheon Dream Power Co., Ltd. (*3)

   Power generation      KOREA        33.61 %      148,105        75,447  

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

   Power generation      LAOS        25.00 %      87,426        77,735  

Shin Pyeongtaek Power Co., Ltd.

   Power generation      KOREA        40.00 %      72,000        62,449  

SPC Power Corporation

   Power generation      PHILIPPINES        38.00 %      20,635        65,943  

Korea Electric Power Corporation Fund (*4)

   Developing electric enterprises      KOREA        98.09 %      51,500        45,312  

YTN Co., Ltd.

   Broadcasting      KOREA        21.43 %      59,000        38,528  

Nepal Water & Energy Development Company Private Limited (*5)

  

Construction and operation of utility plant

     NEPAL        57.67 %      35,571        32,516  

PT. Wampu Electric Power

   Power generation      INDONESIA        46.00 %      21,292        32,280  

Others (Daeryun Power Co., Ltd. and 46 others)

             316,131        145,374  
          

 

 

    

 

 

 
           W  2,324,562        4,086,679  
          

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(1)

Investments in associates and joint ventures as of September 30, 2019 and December 31, 2018 are as follows, continued:

 

In millions of won

             

September 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        250,617  

Jamaica Public Service Company Limited

   Power generation      JAMAICA        40.00 %      301,910        262,749  

KEPCO SPC Power Corporation (*6)

  

Construction and operation of utility plant

     PHILIPPINES        75.20 %      94,579        240,719  

Amman Asia Electric Power Company (*6)

   Power generation      JORDAN        60.00 %      111,476        188,888  

Datang Chifeng Renewable Power Co., Ltd.

   Power generation      CHINA        40.00 %      121,928        182,301  

Rabigh Electricity Company

   Power generation     
SAUDI
ARABIA 		 
  		     40.00 %      109,743        74,204  

Kelar S.A (*6)

   Power generation      CHILE        65.00 %      78,060        75,576  

RE Holiday Holdings LLC

   Power generation      USA        50.00 %      42,948        42,689  

Solar Philippines Calatagan Corporation

   Power generation      PHILIPPINES        38.00 %      47,903        49,734  

Daegu Green Power Co., Ltd.

   Power generation      KOREA        29.00 %      46,225        42,601  

Chun-cheon Energy Co., Ltd.

   Power generation      KOREA        29.90 %      52,700        37,619  

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

   Power generation      CHINA        40.00 %      10,858        41,695  

RE Barren Ridge 1 Holdings LLC

   Power generation      USA        50.00 %      28,021        43,951  

RE Pioneer Holdings LLC

   Power generation      USA        50.00 %      27,891        33,134  

Chile Solar JV SpA

   Power generation      CHILE        50.00 %      37,689        37,861  

PT. Tanjung Power Indonesia

   Power generation      INDONESIA        35.00 %      26,892        31,308  

Others (Shuweihat Asia Power Investment B.V.and 42 others)

             344,238        277,500  
          

 

 

    

 

 

 
             1,687,061        1,913,146  
          

 

 

    

 

 

 
             W 4,011,623        5,999,825  
          

 

 

    

 

 

 

 

(*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.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(1)

Investments in associates and joint ventures as of September 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.

(*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.

 

57

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(2)

The fair value of associates which are actively traded on an open market and have a readily available market value as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won              

Investees

   September 30, 2019      December 31, 2018  

<Associates>

     

Korea Electric Power Industrial Development Co., Ltd.

   W 32,144        33,609  

Korea Gas Corporation

     748,440        910,980  

YTN Co., Ltd.

     17,280        18,900  

SPC Power Corporation

     108,275        72,710  

PT. Bayan Resources TBK

     938,454        1,017,601  

 

(3)

Changes in investments in associates and joint ventures for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won                                                    

September 30, 2019

 

Investees

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

<Associates>

                   

Korea Gas Corporation

   W 1,701,848        —          —          (25,704 )      63,035       1,989       268       1,741,436  

Gemeng International Energy Co., Ltd.

     647,010        —          —          (11,468 )      13,856       19,932       —         669,330  

PT. Bayan Resources TBK

     511,646        —          —          (71,100 )      14,897       2,521       —         457,964  

Korea Power Exchange

     251,802        —          —          —         16,687       —         (95 )      268,394  

Hyundai Green Power Co., Ltd.

     127,160        —          —          (8,889 )      11,563       —         —         129,834  

S-Power Co., Ltd.

     114,566        —          —          —         3,195       —         —         117,761  

PT. Cirebon Electric Power

     108,628        —          —          —         10,063       (713 )      8,398       126,376  

Dongducheon Dream Power Co., Ltd.

     76,386        —          —          —         (939 )      —         —         75,447  

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

     77,165        3,052        —          —         (8,227 )      5,745       —         77,735  

Shin Pyeongtaek Power Co., Ltd.

     67,600        —          —          —         (5,271 )      120       —         62,449  

SPC Power Corporation

     57,558        —          —          (5,055 )      5,435       7,966       39       65,943  

Korea Electric Power Corporation Fund

     47,189        —          —          —         (1,615 )      (262 )      —         45,312  

YTN Co., Ltd.

     40,338        —          —          (180 )      (1,763 )      7       126       38,528  

Nepal Water & Energy Development Company Private Limited

     30,961        —          —          —         (598 )      2,153       —         32,516  

PT. Wampu Electric Power

     31,097        —          —          —         (1,094 )      2,277       —         32,280  

Others

     173,866        9,638        —          (4,295 )      (14,628 )      (1,988 )      (17,219 )      145,374  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   W 4,064,820        12,690        —          (126,691 )      104,596       39,747       (8,483 )      4,086,679  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

58

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(3)

Changes in investments in associates and joint ventures for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

In millions of won       

September 30, 2019

 

Investees

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

<Joint ventures>

                   

GS Donghae Electric Power Co., Ltd.

   W 240,591        —          —          (10,200 )      20,226       —         —         250,617  

Jamaica Public Service Company Limited

     239,632        —          —          —         5,113       18,004       —         262,749  

KEPCO SPC Power Corporation

     208,306        —          —          (17,839 )      35,841       14,398       13       240,719  

Amman Asia Electric Power Company

     177,357        —          —          —         15,203       (3,672 )      —         188,888  

Datang Chifeng Renewable Power Co., Ltd.

     166,162        —          —          —         10,156       5,983       —         182,301  

Rabigh Electricity Company

     105,328        —          —          —         (26,647 )      (3,744 )      (733 )      74,204  

Kelar S.A

     72,824        —          —          —         5,811       (8,391 )      5,332       75,576  

RE Holiday Holdings LLC

     51,094        —          —          —         (8,104 )      (302 )      1       42,689  

Solar Philippines Calatagan Corporation

     47,903        —          —          (3,026 )      3,190       1,667       —         49,734  

Daegu Green Power Co., Ltd.

     41,110        —          —          —         1,491       —         —         42,601  

Chun-cheon Energy Co., Ltd.

     42,505        —          —          —         (4,886 )      —         —         37,619  

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

     39,442        —          —          —         860       1,393       —         41,695  

RE Barren Ridge 1 Holdings LLC

     41,415        —          —          (1,020 )      2,898       657       1       43,951  

RE Pioneer Holdings LLC

     38,898        —          —          (675 )      (5,594 )      505       —         33,134  

Chile Solar JV SpA

     36,865        —          —          —         1,040       (44 )      —         37,861  

PT. Tanjung Power Indonesia

     7,081        26,146        —          —         3,249       (5,163 )      (5 )      31,308  

Others

     257,012        28,806        —          (7,570 )      8,986       (5,211 )      (4,523 )      277,500  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
     1,813,525        54,952        —          (40,330 )      68,833       16,080       86       1,913,146  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   W 5,878,345        67,642        —          (167,021 )      173,429       55,827       (8,397 )      5,999,825  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

In millions of won                                                    

December 31, 2018

 

Investees

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

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

59

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(3)

Changes in investments in associates and joint ventures for the nine-month period ended September 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
comprehensive
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.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won       

September 30, 2019

 

Investees

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

<Associates>

           

Korea Gas Corporation

     W  38,431,513        30,060,071        18,096,514        308,747  

Gemeng International Energy Co., Ltd.

     7,231,284        5,262,666        1,421,065        58,838  

PT. Bayan Resources TBK

     1,301,447        622,134        1,909,599        231,573  

Korea Power Exchange

     314,375        45,981        79,999        13,004  

Hyundai Green Power Co., Ltd.

     1,069,273        621,568        378,481        45,467  

S-Power Co., Ltd.

     790,707        547,020        440,701        6,355  

PT. Cirebon Electric Power

     865,972        406,424        219,119        35,891  

Dongducheon Dream Power Co., Ltd.

     1,456,570        1,191,790        528,413        (941 ) 

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

     1,187,612        872,363        —          (32,555 ) 

Shin Pyeongtaek Power Co., Ltd.

     835,781        674,732        —          (1,227 ) 

SPC Power Corporation

     269,814        21,727        46,543        32,086  

Korea Electric Power Corporation Fund

     46,325        134        442        (11 ) 

YTN Co., Ltd.

     272,652        92,855        84,805        (7,367 ) 

Nepal Water & Energy Development Company Private Limited

     57,044        3,122        —          (814 ) 

PT. Wampu Electric Power

     228,158        157,984        12,008        1,529  

<Joint ventures>

           

GS Donghae Electric Power Co., Ltd.

     2,236,712        1,499,602        542,972        59,489  

Jamaica Public Service Company Limited

     1,469,479        844,002        784,380        18,846  

KEPCO SPC Power Corporation

     350,361        30,256        143,199        47,925  

Amman Asia Electric Power Company

     834,208        519,249        17,186        25,348  

Datang Chifeng Renewable Power Co., Ltd.

     769,871        313,996        85,641        25,286  

Rabigh Electricity Company

     2,619,420        2,249,758        142,724        (62,118 ) 

Kelar S.A

     705,802        593,791        70,359        12,512  

RE Holiday Holdings LLC

     343,042        257,664        9,012        (3,493 ) 

Solar Philippines Calatagan Corporation

     105,760        53,025        13,932        8,395  

Daegu Green Power Co., Ltd.

     569,467        497,037        227,363        5,140  

Chun-cheon Energy Co., Ltd.

     616,621        490,818        242,600        (16,134 ) 

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

     192,972        88,734        17,909        2,152  

RE Barren Ridge 1 Holdings LLC

     219,334        131,432        6,256        4,192  

RE Pioneer Holdings LLC

     256,966        190,699        7,271        (2,080 ) 

Chile Solar JV SpA

     76,323        601        301        2,081  

PT. Tanjung Power Indonesia

     632,263        542,811        69,792        9,765  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 nine-month period ended September 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 nine-month periods ended September 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 September 30, 2019 and December 31, 2018 are as follows:

In millions of won

September 30, 2019

 

Investees

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

<Associates>

                

Korea Gas Corporation

     W    8,371,443        21.57 %      1,805,720        —         —         (64,284 )      1,741,436  

Gemeng International Energy Co., Ltd.

     1,968,618        34.00 %      669,330        —         —         —         669,330  

PT. Bayan Resources TBK

     679,313        20.00 %      135,863        398,481       —         (76,380 )      457,964  

Korea Power Exchange

     268,394        100.00 %      268,394        —         —         —         268,394  

Hyundai Green Power Co., Ltd.

     447,705        29.00 %      129,834        —         —         —         129,834  

S-Power Co., Ltd.

     243,687        49.00 %      119,407        —         (1,646 )      —         117,761  

PT. Cirebon Electric Power

     459,548        27.50 %      126,376        —         —         —         126,376  

Dongducheon Dream Power Co., Ltd.

     264,780        34.01 %      90,052        1,757       (3,779 )      (12,583 )      75,447  

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

     315,249        25.00 %      78,812        305       (1,094 )      (288 )      77,735  

Shin Pyeongtaek Power Co., Ltd.

     161,049        40.00 %      64,420        12,800       (14,771 )      —         62,449  

SPC Power Corporation

     248,087        38.00 %      94,273        —         —         (28,330 )      65,943  

Korea Electric Power Corporation Fund

     46,191        98.09 %      45,309        —         —         3       45,312  

YTN Co., Ltd.

     179,797        21.43 %      38,528        —         —         —         38,528  

Nepal Water & Energy Development Company Private Limited

     53,922        57.67 %      31,097        972       —         447       32,516  

PT. Wampu Electric Power

     70,174        46.00 %      32,280        —         —         —         32,280  

<Joint ventures>

                

GS Donghae Electric Power Co., Ltd.

     737,110        34.00 %      250,617        —         —         —         250,617  

Jamaica Public Service Company Limited

     625,477        40.00 %      250,191        (80,161 )      —         92,719       262,749  

KEPCO SPC Power Corporation

     320,105        75.20 %      240,719        —         —         —         240,719  

Amman Asia Electric Power Company

     314,959        60.00 %      188,975        —         —         (87 )      188,888  

Datang Chifeng Renewable Power Co., Ltd.

     455,875        40.00 %      182,350        —         —         (49 )      182,301  

Rabigh Electricity Company

     369,662        40.00 %      147,865        —         (70,977 )      (2,684 )      74,204  

Kelar S.A

     112,011        65.00 %      72,807        2,577       —         192       75,576  

RE Holiday Holdings LLC

     85,378        50.00 %      42,689        —         —         —         42,689  

Solar Philippines Calatagan Corporation

     52,735        38.00 %      20,039        29,695       —         —         49,734  

Daegu Green Power Co., Ltd.

     72,430        29.00 %      21,005        84       —         21,512       42,601  

Chun-cheon Energy Co., Ltd.

     125,803        29.90 %      37,615        4       —         —         37,619  

Datang KEPCO Chaoyang Renewable Power Co., Ltd.

     104,238        40.00 %      41,695        —         —         —         41,695  

RE Barren Ridge 1 Holdings LLC

     87,902        50.00 %      43,951        —         —         —         43,951  

RE Pioneer Holdings LLC

     66,267        50.00 %      33,134        —         —         —         33,134  

Chile Solar JV SpA

     75,722        50.00 %      37,861        —         —         —         37,861  

PT. Tanjung Power Indonesia

     89,452        35.00 %      31,308        —         —         —         31,308  

 

(*)

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

 

63

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 September 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.

 

64

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(6)

As of September 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    September 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

     13        192        7        179  

Gunsan Bio Energy Co., Ltd.

     895        3,097        916        2,202  

Daehan Wind Power PSC

     —          —          (412 )       —    

Hyundai Energy Co., Ltd.

     11,922        37,763        25,841        25,841  

Nghi Son 2 Power LLC

     107,381        149,040        41,659        41,659  

Samcheok Eco Materials Co., Ltd.

     (99 )       1,186        1,285        1,285  

Naepo Green Energy Co., Ltd.

     5,745        5,745        —          —    

 

(7)

As of September 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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

18.

Investments in Associates and Joint Ventures, Continued

 

(7)

As of September 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 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. In addition, other provision of this agreement, Doosan Heavy Industries & Construction Co., Ltd., as a supplier of equipment and materials, shall hold more than 7.5% of the total number of shares issued, even if some of its shares are transferred to other or third partier under this Convention, for five years after the commencement of its operation.

 

  (vii)

Hyundai Green Power Co., Ltd.

As of September 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 September 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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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 September 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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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

19.

Property, Plant and Equipment

 

(1)

Property, plant and equipment as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 30, 2019  
     Acquisition
cost 		     Government
grants 		    Accumulated
depreciation 		    Accumulated
impairment
losses 		    Book
value 		 

Land

   W 13,716,171        (21,968 )      —         (25,638 )      13,668,565  

Buildings

     19,796,252        (62,073 )      (8,088,396 )      (4,829 )      11,640,954  

Structures

     69,260,073        (187,100 )      (25,137,070 )      (9,322 )      43,926,581  

Machinery

     84,156,101        (160,852 )      (37,469,298 )      (443,031 )      46,082,920  

Ships

     3,104        —         (2,878 )      —         226  

Vehicles

     283,349        (2,763 )      (230,882 )      (117 )      49,587  

Equipment

     1,639,331        (270 )      (1,308,560 )      (42 )      330,459  

Tools

     1,084,952        (470 )      (921,520 )      (38 )      162,924  

Construction-in-progress

     31,466,639        (55,766 )      —         (171,096 )      31,239,777  

Right-of-use assets

     7,187,285        —         (2,611,986 )      —         4,575,299  

Asset retirement costs

     9,782,734        —         (4,078,888 )      (146,423 )      5,557,423  

Others

     12,824,071        —         (10,150,159 )      —         2,673,912  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
   W 251,200,062        (491,262 )      (89,999,637 )      (800,536 )      159,908,627  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
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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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

19.

Property, Plant and Equipment, Continued

 

(2)

Changes in property, plant and equipment for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 30, 2019  
     Beginning
balance 		    Effect of
change in
accounting
policy 		    Acquisition     Disposal     Depreciation     Impairment (*)     Others     Ending
balance 		 

Land

   W 13,554,292       —         87,106       (26,143 )      —         (25,623 )      100,901       13,690,533  

(Government grants)

     (21,968 )      —         —         —         —         —         —         (21,968 ) 

Buildings

     11,933,691       —         5,631       (12,461 )      (596,237 )      (1,160 )      373,563       11,703,027  

(Government grants)

     (63,189 )      —         (592 )      —         4,313       —         (2,605 )      (62,073 ) 

Structures

     42,711,795       —         201       (331,103 )      (1,732,756 )      (923 )      3,466,467       44,113,681  

(Government grants)

     (190,854 )      —         —         1,478       7,016       —         (4,740 )      (187,100 ) 

Machinery

     47,456,595       —         221,302       (181,257 )      (3,947,767 )      (5,142 )      2,700,041       46,243,772  

(Government grants)

     (173,242 )      —         —         1,059       12,904       —         (1,573 )      (160,852 ) 

Ships

     302       —         —         —         (76 )      —         —         226  

Vehicles

     72,189       —         1,499       (127 )      (23,366 )      —         2,155       52,350  

(Government grants)

     (4,220 )      —         (161 )      —         1,621       —         (3 )      (2,763 ) 

Equipment

     382,859       —         25,952       (56 )      (149,395 )      (227 )      71,596       330,729  

(Government grants)

     (418 )      —         (54 )      —         202       —         —         (270 ) 

Tools

     192,675       —         12,437       (12 )      (63,605 )      —         21,899       163,394  

(Government grants)

     (675 )      —         (7 )      —         212       —         —         (470 ) 

Construction-in-progress

     28,821,167       —         8,204,545       (2 )      —         (3,494 )      (5,726,673 )      31,295,543  

(Government grants)

     (54,740 )      —         (9,964 )      —         —         —         8,938       (55,766 ) 

Finance lease assets

     195,730       (195,730 )      —         —         —         —         —         —    

(Government grants)

     (26 )      26       —         —         —         —         —         —    

Right-of-use assets

     —         4,784,247       210,230       —         (419,178 )      —         —         4,575,299  

Asset retirement costs

     5,571,754       —         1       —         (471,567 )      —         457,235       5,557,423  

Others

     2,359,477       —         1,108       (4,236 )      (606,632 )      (583 )      924,778       2,673,912  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   W 152,743,194       4,588,543       8,759,234       (552,860 )      (7,984,311 )      (37,152 )      2,391,979       159,908,627  
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(*)

KEPCO Bylong Australia Pty., Ltd., 100% owned subsidiary, performed an impairment test over the land and others.

The Group recognized the amount of the carrying amount in excess of its recoverable amount as an impairment loss.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

19.

Property, Plant and Equipment, Continued

 

(3)

Changes in property, plant and equipment for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows, continued:

 

In millions of won    December 31, 2018  
     Beginning
balance 		    Acquisition     Disposal     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 an 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 benefit 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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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

20.

Investment Properties

 

(1)

Investment properties as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 30, 2019  
     Acquisition cost      Government grants      Accumulated
depreciation 		     Book value  

Land

   W 137,519        —          —          137,519  

Buildings

     67,464        (14 )       (37,088 )       30,362  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 204,983        (14 )       (37,088 )       167,881  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 30, 2019  
     Beginning balance      Depreciation      Others (*)      Ending balance  

Land

   W 139,940        —          (2,421 )       137,519  

Buildings

     19,669        (4,671 )       15,378        30,376  

(Government grants)

     (50 )       —          36        (14 ) 
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 159,559        (4,671 )       12,993        167,881  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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 million and W19,369 million, respectively, from assets held-for-sale to investment properties during the nine-month period ended September 30, 2019.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

20.

Investment Properties, Continued

 

(3)

Income and expenses related to investment properties for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won    September 30, 2019      September 30, 2018  
     Three-month
period ended 		     Nine-month
period ended 		     Three-month
period ended 		     Nine-month
period ended 		 

Rental income

   W 2,341        7,420        2,411      7,091

Operating and maintenance expenses related to rental income

     (380 )       (859 )       (209 )       (717 ) 

Operating and maintenance expenses not related to rental income

     —          (3,812 )       —        —  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 1,961        2,749        2,202      6,374
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(4)

Fair value of investment properties as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 30, 2019      December 31, 2018  
     Book value      Fair value      Book value      Fair value  

Land

   W 137,519        215,690        139,940        167,178  

Buildings

     30,362        40,004        19,619        23,276  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 167,881        255,694        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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 30, 2019  
     Beginning
balance 		     Increase (decrease) (*)      Recognized as
revenue 		     Ending
balance 		 

Nuclear power plant construction in UAE and others

   W 3,620,788        328,227        (812,124 )       3,136,891  

 

(*)

For the nine-month period ended September 30, 2019, the increased balance of contracts from new orders and foreign exchange impact is W344,963 million and the decreased balance of contracts due to changes in scope of construction work is W16,736 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 nine-month periods ended September 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 September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 30, 2019  
     Accumulated
earned revenue 		     Accumulated
costs 		     Accumulated
profit 		 

Nuclear power plant construction in UAE and others

   W 20,531,507        19,318,071        1,213,436  

 

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 September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 30, 2019      December 31, 2018  
     Assets (*1)      Liabilities (*2)      Assets (*1)      Liabilities (*2)  

Nuclear power plant construction in UAE and others

   W 54,683        123,199        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 BOC 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 nine-month period ended September 30, 2019 are as follows:

 

In millions of won    September 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 —          27,882        21,591        6,291        29,770        —          —          —          —    

Plant maintenance & engineering service

     880        5,981        1,858        4,123        24,913        23        2,452        —          9,537  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W 880        33,863        23,449        10,414        54,683        23        2,452        —          9,537  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

22.

Intangible Assets other than Goodwill

 

(1)

Intangible assets as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 30, 2019  
     Acquisition cost      Government
grants 		    Accumulated
amortization 		    Accumulated
impairment
losses 		    Book
value 		 

Software

   W 678,958        (263 )      (524,607 )      —         154,088  

Licenses and franchises

     3,398        —         (3,398 )      —         —    

Copyrights, patents rights and other industrial rights

     99,211        —         (37,657 )      —         61,554  

Mining rights

     588,277        —         (27,076 )      (516,193 )      45,008  

Development expenditures

     905,223        (1,485 )      (812,190 )      —         91,548  

Intangible assets under development

     59,275        (11,039 )      —         (12,844 )      35,392  

Usage rights of donated assets and others

     582,825        —         (384,950 )      —         197,875  

Leasehold rights

     25,989        —         (20,461 )      —         5,528  

Greenhouse gas emissions rights

     148,605        —         —         —         148,605  

Others

     383,095        (80 )      (114,993 )      (11,918 )      256,104  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
   W 3,474,856        (12,867 )      (1,925,332 )      (540,955 )      995,702  
  

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

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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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

22.

Intangible Assets other than Goodwill, Continued

 

(2)

Changes in intangible assets for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 30, 2019  
     Beginning
balance 		    Acquisition      Disposal     Amortization     Impairment (*)     Others     Ending
balance 		 

Software

   W 157,681       15,091        —         (60,395 )      —         41,974       154,351  

(Government grants)

     (420 )      —          —         168       —         (11 )      (263 ) 

Copyrights, patents rights and other industrial rights

     67,112       166        (29 )      (6,801 )      —         1,106       61,554  

Mining rights

     534,524       9,663        —         (6,550 )      (513,519 )      20,890       45,008  

Development expenditures

     92,486       —          —         (20,689 )      —         21,236       93,033  

(Government grants)

     (2,110 )      —          —         625       —         —         (1,485 ) 

Intangible assets under development

     70,536       24,008        —         —         —         (48,113 )      46,431  

(Government grants)

     (10,564 )      —          —         —         —         (475 )      (11,039 ) 

Usage rights of donated assets and others

     87,011       —          —         (11,259 )      —         122,123       197,875  

(Government grants)

     —         —          —         —         —         —         —    

Leasehold rights

     5,552       —          —         (531 )      —         507       5,528  

Greenhouse gas emissions rights

     7,050       93,571        (7,050 )      —         —         55,034       148,605  

Others

     217,084       626        (164 )      (10,183 )      59       48,762       256,184  

(Government grants)

     —         —          —         1       —         (81 )      (80 ) 
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   W 1,225,942       143,125        (7,243 )      (115,614 )      (513,460 )      262,952       995,702  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

(*)

KEPCO Australia Pty., Ltd. and KEPCO Bylong Australia Pty., Ltd., 100% owned subsidiaries, 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 an impairment loss.

 

In millions of won    December 31, 2018  
     Beginning
balance 		    Acquisition      Disposal     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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

22.

Intangible Assets other than Goodwill, Continued

 

(3)

Significant specific intangible assets as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won and thousands of Australian dollars

September 30, 2019

Type

  

Description

   Currency      Amount     

Remaining useful lives

Software

   ERP system and others      KRW        520     

1 year and 5 months ~

1 year and 7 months

   Electricity sales information system      KRW        5,354      3 years and 3 months

Copyrights, patents rights and other industrial rights

  

Smart technology verification and standard design project conducting right

     KRW        7,404      3 years
   Contributions to ARP NRC DC      KRW        44,166      8 years and 3 months

Mining rights

   Mining right of Bylong mine      AUD        —        — (*)

Development expenditures

   Electricity sales information system      KRW        17,047      2 years and 6 months

Usage rights of donated assets and others

   Sejong Haengbogdosi sharing charge      KRW        32,519      7 years and 2 months
   Dangjin power plant load facility usage right      KRW        9,444      1 year and 6 months

Others

   Occupancy and use of public waters      KRW        93,799      17 years and 2 months

 

(*)

The carrying amount of mining right does not exist, because KEPCO Australia Pty., Ltd. and KEPCO Bylong Australia Pty., Ltd. recognized impairment losses in full during the nine-month period ended September 30, 2019.

 

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      KRW        35,923      7 years and 11 months
   Dangjin power plant load facility usage right      KRW        14,167      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 nine-month periods ended September 30, 2019 and 2018, the Group recognized research and development expenses of W500,269 million and W496,386 million, respectively.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

23.

Trade and Other Payables

Trade and other payables as of September 30, 2019 and December 31, 2018 are as follows:

 

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

Trade payables

   W 2,042,669        —          3,411,830        —    

Other trade payables

     1,415,656        2,696,304        1,630,860        2,626,876  

Accrued expenses

     1,087,902        2,132        1,127,796        1,859  

Leasehold deposits received

     1,630        1,654        1,949        1,084  

Other deposits received

     161,864        70,814        169,317        72,453  

Lease liabilities

     641,543        4,352,140        57,200        226,606  

Dividends payable

     6,311        —          6,443        —    

Others (*)

     —          12,818        —          12,818  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 5,357,575        7,135,862        6,405,395        2,941,696  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(*)

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

 

In millions of won    September 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 September 30, 2019 and December 31, 2018 are as follows:

 

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

Current liabilities

     

Short-term borrowings

   W 1,492,877        860,602  

Current portion of long-term borrowings

     167,281        312,994  

Current portion of debt securities

     8,555,492        6,790,778  

Less : Current portion of discount on long-term borrowings

     (997 )       (972 ) 

Less : Current portion of discount on debt securities

     (3,777 )       (1,974 ) 

Add : Current portion of premium on debt securities

     —          20  
  

 

 

    

 

 

 
     10,210,876        7,961,448  
  

 

 

    

 

 

 

Non-current liabilities

     

Long-term borrowings

     3,804,979        3,280,015  

Debt securities

     52,109,623        49,905,077  

Less : Discount on long-term borrowings

     (23,084 )       (22,000 ) 

Less : Discount on debt securities

     (91,344 )       (89,913 ) 

Add : Premium on debt securities

     1,814        —    
  

 

 

    

 

 

 
     55,801,988        53,073,179  
  

 

 

    

 

 

 
   W 66,012,864        61,034,627  
  

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

24.

Borrowings and Debt Securities, Continued

 

(2)

Repayment schedule of borrowings and debt securities as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won              

September 30, 2019

 

Type

   Borrowings      Debt securities  

Less than 1 year

   W 1,660,158        8,555,492  

1~ 5 years

     2,166,654        30,202,247  

Over 5 years

     1,638,325        21,907,376  
  

 

 

    

 

 

 
   W 5,465,137        60,665,115  
  

 

 

    

 

 

 

 

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  
  

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

24.

Borrowings and Debt Securities, Continued

 

(3)

Short-term borrowings as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won and thousands of foreign currencies  

September 30, 2019

 

Type

  

Creditor

  

Interest rate (%)

  

Maturity

   Foreign
currency 		     Local
currency 		 

Local short-term borrowings

  

DB Investment and securities and others

   1.61~1.90   

2019.10.07

~2019.11.22

     —        W 1,390,000  

Foreign short-term borrowings

   SCNT and others    4.60~6.50    2019.12.03    USD  6,725        8,078  

Foreign short-term borrowings

   BDO Unibank    5.35    2020.12.20 (*)    PHP  450,000        10,418  

Foreign short-term borrowings

   Mizuho Bank    2.86~3.24   

2019.11.15

~2019.11.18

   USD  28,445        34,170  

Foreign short-term borrowings

   China Construction Bank    2.94    2019.11.15    USD  6,124        7,357  

Foreign short-term borrowings

   Korea development Bank    2.47    2019.11.08    USD  10,120        12,157  

Foreign short-term borrowings

   DBS Bank Ltd.    2.44    2019.11.12    USD  25,553        30,697  
              

 

 

 
               W 1,492,877  
              

 

 

 

 

(*)

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 after 12-month period but is classified as short-term borrowing due to intention of early payment in 3 months after borrowing.

 

79

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

24.

Borrowings and Debt Securities, Continued

 

(4)

Long-term borrowings as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won and thousands of foreign currencies  

September 30, 2019

 

Type

   Interest rate (%)      Maturity      Foreign
currency 		     Local
currency 		 

Local long-term borrowings

           

Korea Development Bank

   Others      0.50        2019~2044        —        W 3,663  
   Facility      2.50~4.60        2023~2028        —          56,220  
   Operating funds      2.59~3.04        2020        —          35,000  
   Operating funds     
1yr KoFC bond
rate +0.95 		 
  		     2020        —          14,000  

Hana Bank

   Commercial Paper      3M CD+0.13~0.32        2021~2024        —          1,150,000  
   Facility      4.60        2028        —          12,800  
   Facility      3yr KTB rate-1.25        2019~2028        —          7,043  

IBK

   PF Refinancing      CD+1.25        2030        —          10,736  

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        —          4,652  
   Facility      3yr KTB rate-2.25        2019~2024        —          2,191  
   Project loans      —          2023        —          1,197  
   Others      KTB rate-2.25        2024~2028        —          16,109  

Shinhan Bank

   Facility      CB rate+1.10        2028        —          19,200  
   Others      3.95        2035        —          100,339  
   Others     
Standard overdraft
rate+1.00 		 
  		     2035        —          100,339  

Kookmin Bank

   Facility      3.16        2020        —          10,000  
   Facility      MOR+0.79        2023        —          25,083  

Others

   Facility      1.75~6.80        2026~2036        —          366,562  
   Facility     


CB rate+1.10~1.60

Standard overdraft
rate+2.45

 

 
 

     2023~2036        —          99,076  
   PF Refinancing      4.10        2030        —          29,821  
   Others      4.50~7.90        2022~2039        —          102,348  
              

 

 

 
                 2,222,002  
              

 

 

 

Foreign long-term borrowings

           

Korea Energy Agency

   Project loans      —          2021~2023      USD  8,744        10,504  

Export-Import Bank of Korea and others

   Direct loan      1M Libor+3.20        2036      USD  104,511        125,549  
   Direct loan and others      3M Libor+2.75~3.70        2027      JOD 152,644        258,633  
   Commercial loan and others      3M Libor+1.50~2.50        2030~2033      USD 271,779        326,488  
   PF Loan      6M Libor+1.70~2.50        2032      USD 118,684        142,575  
   Others      3.88        2021      USD 289,183        347,395  

SCNT and others

   Shareholder’s loan      6.50~8.00        2023      USD 43,910        52,749  
   Shareholder’s loan      8.00        2031      JOD 4,853        8,223  

PT PJB

   Shareholder’s loan      12.75        2019      IDR  5,782,963        490  

Samsung Life Insurance and others

   Syndicated Loan      3.10        2032      JPY  4,789,913        53,331  

Woori Bank and others

   Syndicated Loan      JPY 6M Libor+2.00        2032      JPY  3,225,405        35,912  

IFC and others

   Others      6M Libor+5.00        2031      PKR  34,505,340        266,381  

Federal Financing Bank and others

   PF Loan      2.39~13.00        2031~2038      USD 101,395        121,806  

Others

   Others      —          2019      USD 186        222  
              

 

 

 
                 1,750,258  
              

 

 

 
           3,972,260  

Less : Discount of long-term borrowings

 

           (24,081 ) 

Less : Current portion of long-term borrowings

 

           (167,281 ) 

Add : Current portion of discount on long-term borrowings

 

           997  
              

 

 

 
         W 3,781,895  
              

 

 

 

 

80

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

24.

Borrowings and Debt Securities, Continued

 

(4)

Long-term borrowings as of September 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  

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  
   Others      3.88        2021      USD 278,105        310,427  

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  

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  
              

 

 

 

 

81

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

24.

Borrowings and Debt Securities, Continued

 

(5)

Local debt securities as of September 30, 2019 and December 31, 2018 are as follows:

In millions of won

     Issue date    Maturity    Interest rate (%)      September 30, 2019     December 31, 2018  

Electricity bonds

   2009.12.03~

2019.09.09

   2019.10.09~

2048.10.29

     1.32~5.45      W 26,440,000       24,480,000  

Corporate bonds (*)

   2009.10.16~

2019.08.13

   2019.11.04~

2049.08.13

     1.29~4.32        23,863,577       23,223,228  
           

 

 

   

 

 

 
     50,303,577       47,703,228  

Less : Discount on local debt securities

 

     (40,406 )      (41,247 ) 

Less : Current portion of local debt securities

 

     (6,970,000 )      (5,330,000 ) 

Add : Current portion of discount on local debt securities

 

     1,508       1,035  
           

 

 

   

 

 

 
   W 43,294,679       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 September 30, 2019 and December 31, 2018 are as follows:

In millions of won and thousands of foreign currencies

 

September 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 299,213  

FY-97

   1997.01.31~1997.08.04    2027.02.01~2027.08.01    6.75~7.00      USD 314,717        378,069  

FY-04

   2004.04.23    2034.04.23    5.13      USD 286,920        344,677  

FY-11

   2011.07.13    2021.07.13    4.75      USD 500,000        600,650  

FY-12

   2012.09.19    2022.09.19    3.00      USD 750,000        900,975  

FY-13

   2013.09.25    2020.09.25    5.75      AUD 325,000        264,063  

FY-14

   2014.07.30~2014.12.02    2019.10.28~2029.07.30    2.38~3.57      USD 900,000        1,081,170  

FY-15

   2015.06.15    2025.06.15    3.25      USD 300,000        360,390  

FY-16

   2016.01.21    2021.07.21    2.50      USD 300,000        360,390  

FY-17

   2017.04.12~2017.07.25    2020.04.12~2027.07.25    2.38~3.13      USD 1,100,000        1,321,430  

FY-17

   2017.10.30    2037.10.30    1.70      EUR 40,000        52,586  

FY-17

   2017.11.16    2037.11.16    2.36      SEK 450,000        55,210  

FY-18

   2018.01.29~2018.07.25    2021.01.29~2023.07.25    3.00~3.88      USD 1,800,000        2,162,340  

FY-18

   2018.03.13    2028.03.13    3.35      HKD 1,650,000        252,780  

FY-19

   2019.01.22~2019.06.24    2022.01.22~2024.06.24    2.50~3.38      USD 800,000        961,040  

FY-19

   2019.02.27    2024.02.27    0.13      CHF 200,000        242,466  

FY-19

   2019.07.19    2024.07.19~2028.07.19    0.00~0.05      CHF 300,000        363,699  

FY-19

   2019.07.22    2022.07.22    2.38      USD 300,000        360,390  
              

 

 

 
        10,361,538  

Less : Discount on foreign debt securities

        (54,715 ) 

Add : Premium on foreign debt securities

        1,814  

Less : Current portion of foreign debt securities

        (1,585,492 ) 

Add : Current portion of discount on foreign debt securities

        2,269  

Less : Current portion of premium on foreign debt securities

        —    
              

 

 

 
      W  8,725,414  
              

 

 

 

 

82

Table of Contents

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

24.

Borrowings and Debt Securities, Continued

 

(6)

Foreign debt securities as of September 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 nine-month periods ended September 30, 2019 and 2018 are as follows:

 

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

Beginning balance

   W 61,034,627        54,747,392  

Cash flow

     4,077,920        6,330,557  

Effect of exchange rate fluctuations

     902,866        377,225  

Others

     (2,549 )       (6,529 ) 
  

 

 

    

 

 

 

Ending balance

   W 66,012,864        61,448,645  
  

 

 

    

 

 

 

 

83

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

25.

Lease

 

(1)

Right-of-use assets as of September 30, 2019 are as follows:

 

In millions of won    September 30, 2019  
     Acquisition
cost 		     Government
grants 		     Accumulated
depreciation 		     Book
value 		 

Land

   W 339,683        —          (13,164 )       326,519  

Buildings

     48,544        —          (14,568 )       33,976  

Structures

     24,261        —          (1,072 )       23,189  

Ships

     4,113,754        —          (317,547 )       3,796,207  

Vehicles

     17,076        —          (4,727 )       12,349  

Others (*)

     2,643,967        —          (2,260,908 )       383,059  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 7,187,285        —          (2,611,986 )       4,575,299  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(*)

Including power purchase agreements (“PPA”) with GS EPS and two other providers.

 

(2)

Changes in right-of-use assets for the nine-month period ended September 30, 2019 are as follows:

 

In millions of won    September 30, 2019  
     Beginning
balance 		     Changes in
accounting policies
(*) 		     Increase      Depreciation     Ending
balance 		 

Land

   W —          325,748        13,935        (13,164 )      326,519  

Buildings

     —          37,024        11,520        (14,568 )      33,976  

Structures

     —          20,840        3,421        (1,072 )      23,189  

Ships

     —          3,986,947        126,807        (317,547 )      3,796,207  

Vehicles

     —          10,344        6,732        (4,727 )      12,349  

Others

     —          403,344        47,815        (68,100 )      383,059  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 
   W —          4,784,247        210,230        (419,178 )      4,575,299  
  

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

(*)

Including transferred amount of W195,704 million, which was classified as finance lease assets as of December 31, 2018.

 

(3)

Lease liabilities as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 30, 2019      December 31, 2018  
     Minimum lease
payment 		     Present value of
minimum lease
payment 		     Minimum lease
payment 		     Present value of
minimum lease
payment 		 

Less than 1 year

   W 669,974        641,543        87,709        57,200  

1 ~ 5 years

     2,244,973        2,028,352        228,783        170,676  

More than 5 years

     2,798,501        2,323,788        65,250        55,930  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 5,713,448        4,993,683        381,742        283,806  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

84

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

25.

Lease, Continued

 

(4)

Changes in lease liabilities for the nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won    September 30, 2019  
     Beginning
balance 		     Changes in
accounting
policies 		     Increase      Decrease (*1)     Interest
expenses 		     Others (*2)      Ending
balance 		 

Lease liabilities

   W 283,806        4,584,189        208,698        (470,080 )      64,199        322,871        4,993,683  

 

(*1)

The total cash outflow related to the lease contract, including cash outflows due to short-term leases and leases of low-value asset leases, amounts to W 471,582 million.

(*2)

Including translation effect of foreign currency lease liabilities and others.

 

In millions of won    September 30, 2018  
     Beginning
balance 		     Acquisition      Decrease      Ending balance  

Finance lease liabilities

   W 418,260        —          (117,572 )       300,688  

 

(5)

Details of expense relating to lease contracts as lessee for the three and nine-month periods ended September 30, 2019 are as follows:

 

In millions of won    September 30, 2019  
     Three-month
period ended 		     Nine-month
period ended 		 

Depreciation of right-of-use assets

   W 145,607        419,178  

Interest expenses of lease liabilities

     21,994        64,199  

Leases expenses for short-term leases

     6,183        13,607  

Leases expenses for leases of low-value assets

     352        899  

Variable lease payments

     (4,362 )       (13,004 ) 
  

 

 

    

 

 

 
   W 169,774        484,879  
  

 

 

    

 

 

 

 

(6)

Minimum lease payment and contingent rent payment recognized as an expense as a lessee for the three and nine-month periods ended September 30, 2018 are as follows:

 

In millions of won    September 30, 2018  
     Three-month
period ended 		     Nine-month
period ended 		 

Minimum lease payment

   W 12,021        87,100  

Contingent rent payment

     (4,759 )       (14,113 ) 
  

 

 

    

 

 

 
   W 7,262        72,987  
  

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

26.

Employment Benefits

 

(1)

Employment benefit obligations as of September 30, 2019 and December 31, 2018 are as follows:

 

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

Net defined benefit obligations

   W 2,312,473        1,638,785  

Other long-term employee benefit obligations

     6,092        6,284  
  

 

 

    

 

 

 
   W 2,318,565        1,645,069  
  

 

 

    

 

 

 

 

(2)

Principal assumptions on actuarial valuation as of September 30, 2019 and December 31, 2018 are as follows:

 

     September 30, 2019   December 31, 2018

Discount rate

   1.72%~1.82%   2.24%~2.90%

Weighted future salary and benefit levels

   4.86%   4.88%

Weighted average duration

   13.74 years   13.71 years

 

(3)

Details of expense relating to defined benefit plans for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won    September 30, 2019      September 30, 2018  
     Three-month
period ended 		     Nine-month
period ended 		     Three-month
period ended 		     Nine-month
period ended 		 

Current service cost

   W 105,704        307,849        92,130        269,964  

Interest cost

     21,277        61,576        22,348        64,916  

Expected return on plan assets

     (10,305 )       (30,724 )       (10,387 )       (31,178 ) 

Loss from settlement

     (132 )       (609 )       (439 )       (716 ) 
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 116,544        338,092        103,652      302,986
  

 

 

    

 

 

    

 

 

    

 

 

 

Expenses as described above are recognized in those items below in the financial statements.

 

In millions of won    September 30, 2019      September 30, 2018  
     Three-month
period ended 		     Nine-month
period ended 		     Three-month
period ended 		     Nine-month
period ended 		 

Cost of sales

   W 86,655        251,495        77,198        225,124  

Selling and administrative expenses

     15,038        43,260        12,924        38,047  

Others (Construction-in-progress and others)

     14,851        43,337        13,530        39,815  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 116,544        338,092        103,652        302,986  
  

 

 

    

 

 

    

 

 

    

 

 

 

In addition, for the nine-month periods ended September 30, 2019 and 2018, employee benefit obligations expenses of W54,583 million and W48,540 million, respectively, are recognized as cost of sales; and W11,167 million and W9,384 million, respectively, are recognized as selling and administrative expenses; and W10,617 million and W10,191 million, respectively, are recognized as construction-in-progress and others, relates to the Group’s defined contribution plans.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

26.

Employment Benefits, Continued

 

(4)

Details of defined benefit obligations as of September 30, 2019 and December 31, 2018 are as follows:

 

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

Present value of defined benefit obligation from funded plans

   W 4,092,616        3,414,116  

Fair value of plan assets

     (1,780,143 )       (1,775,331 ) 
  

 

 

    

 

 

 

Net liabilities incurred from defined benefit plans

   W 2,312,473        1,638,785  
  

 

 

    

 

 

 

 

(5)

Changes in the present value of defined benefit obligations for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

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

Beginning balance

   W 3,414,116        2,951,842  

Current service cost

     307,849        369,899  

Interest cost (*)

     61,576        87,687  

Remeasurement component

     384,314        154,939  

Loss from settlement

     (609 )       (767 ) 

Actual payments

     (75,468 )       (149,454 ) 

Others

     838        (30 ) 
  

 

 

    

 

 

 

Ending balance

   W 4,092,616        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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

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

Beginning balance

   W 1,775,331        1,475,641  

Expected return

     30,724        42,135  

Remeasurement component

     (2,730 )       (12,308 ) 

Contributions by the employers

     9,564        330,064  

Actual payments

     (32,746 )       (60,201 ) 
  

 

 

    

 

 

 

Ending balance

   W 1,780,143        1,775,331  
  

 

 

    

 

 

 

In addition, losses on accumulated remeasurement component amounted to W379,455 million and W219,381 million have been recognized as other comprehensive income or loss for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018, respectively.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

26.

Employment Benefits, Continued

 

(7)

Details of the fair value of plan assets as of September 30, 2019 and December 31, 2018 are as follows:

 

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

Equity instruments

   W 3,898        96,823  

Debt instruments

     642,760        510,184  

Bank deposit

     241,987        275,518  

Others

     891,498        892,806  
  

 

 

    

 

 

 
   W 1,780,143        1,775,331  
  

 

 

    

 

 

 

For the nine-month period ended September 30, 2019 and for the year ended December 31, 2018, actual returns on plan assets amounted to W27,994 million and W29,827 million, respectively.

 

(8)

Remeasurement component recognized in other comprehensive income (loss) for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

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

Actuarial gain from changes in financial assumptions

   W 254,860        186,428  

Experience adjustments, etc.

     129,454        (31,489 ) 

Expected return

     2,730        12,308  
  

 

 

    

 

 

 
   W 387,044        167,247  
  

 

 

    

 

 

 

Remeasurement component recognized as other comprehensive income or loss is recorded in retained earnings.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

27.

Provisions

 

(1)

Provisions as of September 30, 2019 and December 31, 2018 are as follows:

 

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

Employment benefits

           

Provisions for employment benefits

   W 1,019,881        —          976,347        —    

Litigation

           

Litigation provisions

     18,093        51,559        40,157        37,636  

Decommissioning cost

           

Nuclear plants

     —          13,918,043        —          13,388,134  

Spent fuel

     469,076        886,205        —          1,291,354  

Radioactive waste

     65,608        1,638,418        4,310        1,680,698  

PCBs

     —          142,925        —          147,668  

Other recovery provisions

     —          11,572        —          10,477  

Others

           

Power plant regional support program

     152,694        —          137,668        —    

Transmission regional support program

     125,724        —          151,698        —    

Provisions for tax

     26        —          6,845        —    

Provisions for financial guarantee

     43        85,947        1,320        14,266  

Provisions for RPS

     85,319        —          93,919        —    

Provisions for greenhouse gas emissions obligations

     —          —          136,187        —    

Others

     44,883        15,039        46,347        15,515  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   1,981,347        16,749,708        1,594,798        16,585,748  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

27.

Provisions, Continued

 

(2)

Changes in provisions for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 30, 2019  
     Beginning
balance 		     Increase in
provision 		     Payment     Reversal     Others     Ending
balance 		 

Employment benefits

              

Provisions for employment benefits

   W 976,347        741,523        (689,413 )      (8,860 )      284       1,019,881  

Litigation

              

Litigation provisions

     77,793        20,358        (8,996 )      (19,503 )      —         69,652  

Decommissioning cost

              

Nuclear plants

     13,388,134        554,983        (25,074 )      —         —         13,918,043  

Spent fuel

     1,291,354        320,920        (256,993 )      —         —         1,355,281  

Radioactive waste

     1,685,008        25,496        (6,787 )      —         309       1,704,026  

PCBs

     147,668        2,415        (7,158 )      —         —         142,925  

Other recovery provisions

     10,477        453        —         —         642       11,572  

Others

              

Power plant regional support program

     137,668        41,341        (35,829 )      —         9,514       152,694  

Transmission regional support program

     151,698        111,136        (137,110 )      —         —         125,724  

Provisions for tax

     6,845        —          —         (6,821 )      2       26  

Provisions for financial guarantee

     15,586        83,685        (11,527 )      (1,677 )      (77 )      85,990  

Provisions for RPS

     93,919        211,238        (219,838 )      —         —         85,319  

Provisions for greenhouse gas

emissions obligations

     136,187        21,624        (139,936 )      (17,875 )      —         —    

Others

     61,862        2,579        (3,712 )      (1,659 )      852       59,922  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 
   W   18,180,546        2,137,751        (1,542,373 )      (56,395 )      11,526       18,731,055  
  

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

27.

Provisions, Continued

 

(2)

Changes in provisions for the nine-month period ended September 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     Others     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 benefit 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 in addition to property, plant and equipment.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

28.

Government Grants

 

(1)

Government grants as of September 30, 2019 and December 31, 2018 are as follows:

 

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

Land

   W (21,968 )       (21,968 ) 

Buildings

     (62,073 )       (63,189 ) 

Structures

     (187,100 )       (190,854 ) 

Machinery

     (160,852 )       (173,242 ) 

Vehicles

     (2,763 )       (4,220 ) 

Equipment

     (270 )       (418 ) 

Tools

     (470 )       (675 ) 

Construction-in-progress

     (55,766 )       (54,740 ) 

Finance lease assets

     —          (26 ) 

Investment properties

     (14 )       (50 ) 

Software

     (263 )       (420 ) 

Development expenditures

     (1,485 )       (2,110 ) 

Intangible assets under development

     (11,039 )       (10,564 ) 

Other intangible assets

     (80 )       —    
  

 

 

    

 

 

 
   W (504,143 )       (522,476 ) 
  

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

28.

Government Grants, Continued

 

(2)

Changes in government grants for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 30, 2019  
     Beginning
balance 		    Receipt     Acquisition      Items offset
with
depreciation
expense and
others 		     Disposal      Others     Ending
balance 		 

Cash

   W —         (11,214 )      —          —          —          11,214       —    

Land

     (21,968 )      —         —          —          —          —         (21,968 ) 

Buildings

     (63,189 )      —         —          4,313        —          (3,197 )      (62,073 ) 

Structures

     (190,854 )      —         —          7,016        1,478        (4,740 )      (187,100 ) 

Machinery

     (173,242 )      —         —          12,904        1,059        (1,573 )      (160,852 ) 

Vehicles

     (4,220 )      —         —          1,621        —          (164 )      (2,763 ) 

Equipment

     (418 )      —         —          202        —          (54 )      (270 ) 

Tools

     (675 )      —         —          212        —          (7 )      (470 ) 

Construction-in-progress

     (54,740 )      —         8,938        —          —          (9,964 )      (55,766 ) 

Finance lease assets

     (26 )      —         —          —          —          26       —    

Investment properties

     (50 )      —         —          —          —          36       (14 ) 

Software

     (420 )      —         —          168        —          (11 )      (263 ) 

Development expenditures

     (2,110 )      —         —          625        —          —         (1,485 ) 

Intangible assets under development

     (10,564 )      —         —          —          —          (475 )      (11,039 ) 

Other intangible assets

     —         —         —          1        —          (81 )      (80 ) 
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 
   W   (522,476 )      (11,214 )      8,938        27,062        2,537        (8,990 )      (504,143 ) 
  

 

 

   

 

 

   

 

 

    

 

 

    

 

 

    

 

 

   

 

 

 

 

In millions of won    December 31, 2018  
     Beginning
balance 		    Receipt     Acquisition      Items offset
with
depreciation
expense and
others 		     Disposal      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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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

29.

Deferred Revenues

Deferred revenue related to the Group’s construction contracts for the nine-month period ended September 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    September 30,
2019 		     December 31,
2018 		 

Beginning balance

   W  8,606,563        8,325,181  

Increase during the current period

     820,062        875,930  

Recognized as revenue during the current period

     (438,440 )       (594,548 ) 
  

 

 

    

 

 

 

Ending balance

   W  8,988,185        8,606,563  
  

 

 

    

 

 

 

 

30.

Non-financial Liabilities

Non-financial liabilities as of September 30, 2019 and December 31, 2018 are as follows:

 

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

Advance received

   W  3,965,535        157,095        3,724,238        80,937  

Unearned revenue

     19,498        4,170        63,038        4,690  

Deferred revenue

     579,493        8,408,692        556,072        8,050,491  

Withholdings

     405,553        9,908        172,454        10,856  

Others

     1,369,408        13,321        1,058,239        13,059  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W  6,339,487        8,593,186        5,574,041        8,160,033  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

31.

Contributed Capital

 

(1)

Details of shares issued as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won except share information    September 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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

Number of shares    September 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 September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

32.

Retained Earnings and Dividends Paid

 

(1)

Details of retained earnings as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 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

     13,889,386        14,007,942  
  

 

 

    

 

 

 

Retained earnings

   W  50,279,721        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 September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 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

     (1,012,555 )       (1,314,567 ) 

Changes in equity method retained earnings

     (487 )       (1,153 ) 

Remeasurement of defined benefit liability, net of tax

     (225,516 )       (100,495 ) 

Transfer of gain (loss) on valuation of financial assets through other comprehensive income

     (840 )       —    

Dividends paid

     —          (507,152 ) 
  

 

 

    

 

 

 

Ending balance

   W  50,279,721        51,519,119  
  

 

 

    

 

 

 

 

(4)

Dividends paid for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 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  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

32.

Retained Earnings and Dividends Paid, Continued

 

(5)

Changes in retained earnings of investments in associates and joint ventures for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

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

Beginning balance

   W 3,969        5,122  

Changes

     (487 )       (1,153 ) 
  

 

 

    

 

 

 

Ending balance

   W 3,482        3,969  
  

 

 

    

 

 

 

 

(6)

Changes in remeasurement components related to defined benefit liability for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

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

Beginning balance

   W (219,381 )       (43,513 ) 

Changes

     (373,678 )       (154,198 ) 

Income tax effect

     148,162        53,703  

Transfer to reserve for business expansion

     65,442        (75,373 ) 
  

 

 

    

 

 

 

Ending balance

   W (379,455 )       (219,381 ) 
  

 

 

    

 

 

 

 

33.

Hybrid Bonds

Hybrid bonds classified as equity (non-controlling interest) as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won                                       

Issuer

  

Hybrid bond

   Issued date      Maturity      Yield (%)      September 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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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

34.

Other Components of Equity

 

(1)

Other components of equity as of September 30, 2019 and December 31, 2018 are as follows:

 

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

Other capital surplus

   W 1,226,578        1,234,825  

Accumulated other comprehensive loss

     (224,360 )       (358,570 ) 

Other equity

     13,294,973        13,294,973  
  

 

 

    

 

 

 
   W 14,297,191        14,171,228  
  

 

 

    

 

 

 

 

(2)

Changes in other capital surplus for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 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 and others

     —          —         —         —          1,032        1,032  

Others

     —          (8,247 )      (8,247 )      —          —          —    
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

Ending balance

   W 387,524        839,054       1,226,578       387,524        847,301        1,234,825  
  

 

 

    

 

 

   

 

 

   

 

 

    

 

 

    

 

 

 

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

34.

Other Components of Equity, Continued

 

(3)

Changes in accumulated other comprehensive income (loss) for the nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 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

     (8,057 )      —          —         —         (8,057 ) 

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

     —         41,247        —         —         41,247  

Foreign currency translation of foreign operations, net of tax

     —         —          92,244       —         92,244  

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

     —         —          —         8,775       8,775  
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

Ending balance

   W  (89,765)       164,800        (258,001 )      (41,395 )      (224,360 ) 
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

 

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 September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

35.

Sales

Details of sales for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won    September 30, 2019  
     Domestic      Overseas      Total  
     Three-
month
period
ended 		     Nine-
month
period
ended 		     Three-
month
period
ended 		     Nine-
month
period
ended 		     Three-
month
period
ended 		     Nine-
month
period
ended 		 

[Type of goods and services]

 

              

Sales of goods

   W 15,333,341        42,496,430        70,287        213,078        15,403,628        42,709,508  

Electricity

     15,213,418        42,035,565        —          —          15,213,418        42,035,565  

Heat supply

     5,994        160,968        —          —          5,994        160,968  

Others

     113,929        299,897        70,287        213,078        184,216        512,975  

Sales of service

     46,611        137,026        44,563        134,565        91,174        271,591  

Sales of construction services

     28,080        77,108        240,329        735,016        268,409        812,124  

Revenue related to transfer of assets from customers

     149,074        438,440        —          —          149,074        438,440  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W 15,557,106        43,149,004        355,179        1,082,659        15,912,285        44,231,663  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

[Timing of revenue recognition]

 

              

Performance obligations satisfied at a point in time

   W 15,333,341        42,496,430        70,287        213,078        15,403,628        42,709,508  

Performance obligations satisfied over time

     223,765        652,574        284,892        869,581        508,657        1,522,155  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W 15,557,106        43,149,004        355,179        1,082,659        15,912,285        44,231,663  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

In millions of won    September 30, 2018  
     Domestic      Overseas      Total  
     Three-
month
period
ended 		     Nine-
month
period
ended 		     Three-
month
period
ended 		     Nine-
month
period
ended 		     Three-
month
period
ended 		     Nine-
month
period
ended 		 

[Type of goods and services]

 

              

Sales of goods

   W 15,694,683        43,220,255        99,656        286,890        15,794,339        43,507,145  

Electricity

     15,506,010        42,637,084        —          —          15,506,010        42,637,084  

Heat supply

     5,105        147,723        —          —          5,105        147,723  

Others

     183,568        435,448        99,656        286,890        283,224        722,338  

Sales of service

     44,685        114,805        71,845        149,007        116,530        263,812  

Sales of construction services

     22,377        77,035        334,690        1,154,626        357,067        1,231,661  

Revenue related to transfer of assets from customers

     141,908        450,429        —          —          141,908        450,429  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W 15,903,653        43,862,524        506,191        1,590,523        16,409,844        45,453,047  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

[Timing of revenue recognition]

 

              

Performance obligations satisfied at a point in time

   W 15,694,683        43,220,255        99,656        286,890        15,794,339        43,507,145  

Performance obligations satisfied over time

     208,970        642,269        406,535        1,303,633        615,505        1,945,902  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W 15,903,653        43,862,524        506,191        1,590,523        16,409,844        45,453,047  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

36.

Selling and Administrative Expenses

Selling and administrative expenses for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won    September 30, 2019      September 30, 2018  
     Three-
month
period
ended 		     Nine-
month
period
ended 		     Three-
month
period
ended 		     Nine-
month
period
ended 		 

Salaries

   W 190,717        582,369        182,114        558,259  

Retirement benefit expense

     17,626        54,427        16,072        47,431  

Welfare and benefit expense

     28,563        87,631        41,893        97,493  

Insurance expense

     3,156        9,779        2,443        9,884  

Depreciation

     53,943        169,986        53,040        159,600  

Amortization of intangible assets

     16,377        56,775        12,409        38,593  

Bad debt expense (reversal)

     (31,141 )       (15,417 )       8,673        26,740  

Commission

     153,831        495,682        164,670        510,765  

Advertising expense

     9,913        23,690        6,747        20,095  

Training expense

     1,746        5,027        1,500        5,112  

Vehicle maintenance expense

     2,548        7,005        2,438        7,476  

Publishing expense

     628        2,099        482        2,009  

Business development expense

     690        2,183        653        2,193  

Rent expense

     17,566        31,725        14,464        31,812  

Telecommunication expense

     2,097        6,454        5,698        17,434  

Transportation expense

     206        659        203        428  

Taxes and dues

     6,032        47,108        2,024        36,267  

Expendable supplies expense

     1,313        4,520        1,697        4,338  

Water, light and heating expense

     3,475        10,043        3,512        10,349  

Repairs and maintenance expense

     14,940        44,057        6,508        38,372  

Ordinary development expense

     58,353        136,936        49,125        133,729  

Travel expense

     3,408        11,954        3,534        10,497  

Clothing expense

     1,061        3,197        1,647        4,419  

Survey and analysis expense

     207        636        177        513  

Membership fee

     119        865        181        851  

Others

     46,373        108,009        30,452        91,848  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 603,747        1,887,399        612,356        1,866,507  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

37.

Other Non-operating Income and Expense

 

(1)

Other non-operating income for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won    September 30, 2019      September 30, 2018  
     Three-month
period ended 		     Nine-month
period ended 		     Three-month
period ended 		     Nine-month
period ended 		 

Reversal of other provisions

   W 1,331        3,517        649        2,126  

Gains on government grants

     62        201        66        211  

Gains on assets contributed

     20        2,791        3,735        4,153  

Gains on liabilities exempted

     119        838        164        7,185  

Compensation and reparations revenue

     80,860        119,524        19,997        62,751  

Revenue from research contracts

     1,952        4,529        2,667        5,511  

Rental income

     47,150        141,201        45,199        138,537  

Others

     15,026        45,076        8,797        39,449  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 146,520        317,677        81,274        259,923  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(2)

Other non-operating expense for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won    September 30, 2019      September 30, 2018  
     Three-month
period ended 		     Nine-month
period ended 		     Three-month
period ended 		     Nine-month
period ended 		 

Compensation and reparations expenses

   W 19        96        2,329        21,617  

Accretion expenses of other provisions

     2,601        2,984        64        254  

Depreciation expenses on investment properties

     380        4,671        209        717  

Depreciation expenses on idle assets

     1,634        4,906        1,637        4,911  

Other bad debt expense

     1,585        7,281        (7,976 )       3,477  

Donations

     14,239        41,802        14,480        33,438  

Others

     7,108        16,964        10,169        54,020  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 27,566        78,704        20,912        118,434  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

38.

Other Gains (Losses)

Composition of other gains (losses) for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won    September 30, 2019      September 30, 2018  
     Three-
month
period
ended 		     Nine-
month
period
ended 		     Three-
month
period
ended 		     Nine-
month
period
ended 		 

Other gains

           

Gains on disposal of property, plant and equipment

   W 6,578        35,765        64,769        91,132  

Gains on disposal of intangible assets

     109        206        8        11  

Gains on foreign currency translation

     42,953        11,108        17,128        12,925  

Gains on foreign currency transactions

     13,129        30,295        9,883        33,089  

Gains on insurance proceeds

     4,199        4,212        —          —    

Others

     46,870        157,106        38,787        145,605  

Other losses

           

Losses on disposal of property, plant and equipment

     (16,540 )       (43,287 )       (14,474 )       (27,874 ) 

Losses on disposal of intangible assets

     (28 )       (28 )       (18 )       (23 ) 

Losses on impairment of property, plant and equipment

     (7,467 )       (37,152 )       —          (701,317 ) 

Losses on impairment of intangible assets

     (451,823 )       (513,519 )       —          —    

Losses on foreign currency translation

     —          (8,669 )       (2,164 )       (5,150 ) 

Losses on foreign currency transactions

     (14,609 )       (43,524 )       (18,608 )       (51,981 ) 

Others

     (37,510 )       (75,328 )       (12,248 )       (44,623 ) 
  

 

 

    

 

 

    

 

 

    

 

 

 
   W (414,139 )       (482,815 )       83,063        (548,206 ) 
  

 

 

    

 

 

    

 

 

    

 

 

 

 

39.

Finance Income

Finance income for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won    September 30, 2019      September 30, 2018  
     Three-month
period ended 		     Nine-month
period ended 		     Three-month
period ended 		     Nine-month
period ended 		 

Interest income

   W 71,419        195,998        66,888        175,004  

Dividends income

     2,262        6,002        —          11,811  

Gains on disposal of financial assets

     1,619        2,584        83        755  

Gains on valuation of financial assets at fair

value through profit or loss

     770        9,161        4,212        9,222  

Gains on valuation of derivatives

     298,016        644,129        3,581        231,692  

Gains on transaction of derivatives

     55,985        121,554        28,171        65,538  

Gains on foreign currency translation

     68,458        154,795        92,609        116,109  

Gains on foreign currency transactions

     2,773        16,605        2,863        17,030  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 501,302        1,150,828        198,407        627,161  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

40.

Finance Expenses

Finance expenses for the three and nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won    September 30, 2019      September 30, 2018  
     Three-month
period ended 		     Nine-month
period ended 		     Three-month
period ended 		     Nine-month
period ended 		 

Interest expense

   W  521,316        1,537,845        479,883        1,407,191  

Losses on sale of financial assets

     229        490        —          —    

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

     1,146        1,442        832        4,242  

Losses on valuation of derivatives

     1,356        36,286        119,991        70,861  

Losses on transaction of derivatives

     7,760        24,567        9,763        23,648  

Losses on foreign currency translation

     561,345        996,123        11,627        397,607  

Losses on foreign currency transactions

     27,928        36,676        12,183        28,596  

Others

     1,237        3,856        123        515  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W  1,122,317        2,637,285        634,402        1,932,660  
  

 

 

    

 

 

    

 

 

    

 

 

 

Capitalization rates for the nine-month periods ended September 30, 2019 and 2018 are 2.34%~3.74% and 2.70%~3.64% 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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

42.

Assets Held-for-Sale

Assets held-for-sale as of September 30, 2019 and December 31, 2018 are as follows:

 

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

Land (*1)

   W  23,002        2,765  

Machinery

     3,536        —    

Buildings and structures (*1)

     54        19,369  

Investments in associates (*2,3)

     9,829        —    

Investments in subsidiaries (*4,5)

     294        747  
  

 

 

    

 

 

 
   W  36,715        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 Gimcheon, Gyeongsangbukdo, in August 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 May 2019. 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 September 30, 2019 and has been reclassified to assets held-for-sale, accordingly.

(*3)

Dangjin Eco Power Co., Ltd. (before the spin-off) was divided into Ulsan GPS Co., Ltd. (Old), Dangjin Eco Power Co., Ltd. (New), and Eumseong Natural Gas Power Co., Ltd. (New) on August 19, 2019. After the spin-off, the shares of Ulsan GPS Co., Ltd. were classified as assets held for sale as of September 30, 2019, due to its planned sale.

(*4)

Garolim Tidal Power Plant Co., Ltd. was in the process of liquidating its business as of September 30, 2019 and has been reclassified to assets held-for-sale, accordingly.

(*5)

KOWEPO India Private Limited was in the process of liquidating its business as of December 30, 2018 and has been reclassified to assets held-for-sale, and completed the liquidation process as of September 30, 2019.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

43.

Expenses Classified by Nature

Expenses classified by nature for the nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won    September 30, 2019  
     Selling and
administrative expenses 		     Cost of sales      Total  

Raw materials used

   W —          12,898,067        12,898,067  

Salaries

     582,369        2,778,388        3,360,757  

Retirement benefit expense

     54,427        306,078        360,505  

Welfare and benefit expense

     87,631        315,066        402,697  

Insurance expense

     9,779        69,076        78,855  

Depreciation

     169,986        7,814,325        7,984,311  

Amortization of intangible assets

     56,775        58,839        115,614  

Bad debt expense

     (15,417 )       —          (15,417 ) 

Commission

     495,682        286,471        782,153  

Advertising expense

     23,690        6,302        29,992  

Training expense

     5,027        10,562        15,589  

Vehicle maintenance expense

     7,005        5,550        12,555  

Publishing expense

     2,099        2,115        4,214  

Business promotion expense

     2,183        2,776        4,959  

Rent expense

     31,725        138,558        170,283  

Telecommunication expense

     6,454        9,570        16,024  

Transportation expense

     659        3,109        3,768  

Taxes and dues

     47,108        371,669        418,777  

Expendable supplies expense

     4,520        21,490        26,010  

Water, light and heating expense

     10,043        25,630        35,673  

Repairs and maintenance expense

     44,057        1,530,595        1,574,652  

Ordinary development expense

     136,936        363,333        500,269  

Travel expense

     11,954        50,606        62,560  

Clothing expense

     3,197        4,013        7,210  

Survey and analysis expense

     636        2,716        3,352  

Membership fee

     865        11,731        12,596  

Power purchase

     —          13,766,681        13,766,681  

Others

     108,009        1,180,222        1,288,231  
  

 

 

    

 

 

    

 

 

 
   W  1,887,399        42,033,538        43,920,937  
  

 

 

    

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

43.

Expenses Classified by Nature, Continued

Expenses classified by nature for the nine-month periods ended September 30, 2019 and 2018 are as follows, continued:

 

In millions of won    September 30, 2018  
     Selling and
administrative expenses 		     Cost of sales      Total  

Raw materials used

   W —          14,657,641        14,657,641  

Salaries

     558,259        2,548,980        3,107,239  

Retirement benefit expense

     47,431        273,664        321,095  

Welfare and benefit expense

     97,493        349,651        447,144  

Insurance expense

     9,884        72,205        82,089  

Depreciation

     159,600        7,297,526        7,457,126  

Amortization of intangible assets

     38,593        48,339        86,932  

Bad debt expense

     26,740        —          26,740  

Commission

     510,765        324,981        835,746  

Advertising expense

     20,095        6,159        26,254  

Training expense

     5,112        8,009        13,121  

Vehicle maintenance expense

     7,476        5,558        13,034  

Publishing expense

     2,009        2,279        4,288  

Business promotion expense

     2,193        2,943        5,136  

Rent expense

     31,812        125,236        157,048  

Telecommunication expense

     17,434        61,292        78,726  

Transportation expense

     428        3,111        3,539  

Taxes and dues

     36,267        355,979        392,246  

Expendable supplies expense

     4,338        21,418        25,756  

Water, light and heating expense

     10,349        26,675        37,024  

Repairs and maintenance expense

     38,372        1,514,420        1,552,792  

Ordinary development expense

     133,729        362,657        496,386  

Travel expense

     10,497        49,874        60,371  

Clothing expense

     4,419        2,536        6,955  

Survey and analysis expense

     513        2,654        3,167  

Membership fee

     851        5,977        6,828  

Power purchase

     —          13,362,533        13,362,533  

Others

     91,848        1,513,759        1,605,607  
  

 

 

    

 

 

    

 

 

 
   W  1,866,507        43,006,056        44,872,563  
  

 

 

    

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

44.

Earnings (Loss) Per Share

 

(1)

Basic earnings (loss) per share for the nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In won    September 30, 2019      September 30, 2018  

Type

   Three-
month
period
ended 		     Nine-
month
period
ended 		     Three-
month
period
ended 		     Nine-
month
period
ended 		 

Basic earnings (loss) per share

   W  347        (1,577 )       1,104        (807 ) 

 

(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 nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won except number of shares    September 30, 2019      September 30, 2018  

Type

   Three-
month
period
ended 		     Nine-
month
period
ended 		     Three-
month
period
ended 		     Nine-
month
period
ended 		 

Net profit (loss) attributable to controlling interest

   W  222,789        (1,012,555 )       708,582        (517,907 ) 

Profit (loss) used in the calculation of total basic earnings per share

     222,789        (1,012,555 )       708,582        (517,907 ) 

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 nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In number of shares    September 30, 2019      September 30, 2018  

Type

   Three-
month
period
ended 		     Nine-
month
period
ended 		     Three-
month
period
ended 		     Nine-
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 nine-month periods ended September 30, 2019 and 2018.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 September 30, 2019 and December 31, 2018 are as follows:

 

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

Total borrowings and debt securities

   W 66,012,864       61,034,627  

Cash and cash equivalents

     1,545,605       1,358,345  
  

 

 

   

 

 

 

Net borrowings and debt securities

     64,467,259       59,676,282  
  

 

 

   

 

 

 

Total shareholder’s equity

     70,024,545       71,092,762  
  

 

 

   

 

 

 

Debt to equity ratio

     92.06 %      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 counterparty 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 nine-month periods ended September 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 September 30, 2019 and December 31, 2018 are as follows:

 

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

Cash and cash equivalents

   W 1,545,605        1,358,345  

Financial assets at fair value through profit or loss

     2,750,834        920,935  

Derivative assets (trading)

     312,754        37,631  

Financial assets at fair value through other comprehensive income

     394,372        399,495  

Financial assets at amortized cost

     13,273        14,042  

Loans

     745,811        718,674  

Long-term/short-term financial instruments

     2,670,704        2,318,027  

Derivative assets (applying hedge accounting)

     291,817        64,704  

Trade and other receivables

     8,781,491        9,613,437  

Financial guarantee contracts (*)

     3,124,219        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 September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won   September 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 521,033       (452,981 )      416,956       (363,820 ) 

Discount rate

   Increase (decrease) in

defined benefit

obligation

    (444,714 )      526,167       (377,221 )      445,833  

Changes of employee benefits assuming a 1% increase and decrease movements in discount rate on plan asset for the nine-month periods ended September 30, 2019 and 2018 are W13,288 million and W10,994 million, respectively.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 September 30, 2019 and December 31, 2018 are as follows:

 

Type

   Accounts      September 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 September 30, 2019 and December 31, 2018 are as follows:

 

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

Type

   Accounts    0.1%
Increase 		    0.1%
Decrease 		    0.1%
Increase 		    0.1%
Decrease 		 

Discount rate

   PCBs    W (519 )      522       (623 )      627  
   Nuclear plants      (288,969 )      254,858       (256,513 )      263,595  
   Spent fuel      (51,607 )      53,621       (49,182 )      51,098  

Inflation rate

   PCBs      526       (524 )      632       (629 ) 
   Nuclear plants      282,007       (330,920 )      294,984       (287,110 ) 
   Spent fuel      54,396       (52,424 )      51,837       (49,961 ) 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management, Continued

 

(2)

Financial risk management, continued

 

Management judgement affected 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 September 30, 2019 and December 31, 2018 are as follows:

 

In thousands of foreign currencies    Assets      Liabilities  

Type

   September 30, 2019      December 31, 2018      September 30, 2019      December 31, 2018  

AED

     42,686        10,513        60,655        5,890  

AUD

     142        143        757,588        717,712  

BDT

     83,198        71,575        1,138        1,175  

BWP

     1,437        1,214        —          —    

CAD

     114        96        9        4  

CHF

     —          —          501,344        400,000  

CNY

     —          —          26,140        26,140  

CZK

     —          —          1,954        —    

EUR

     694        337        19,621        105,673  

GBP

     —          —          88        1  

GHS

     —          25,794        —          —    

HKD

     —          —          1,648,784        1,650,000  

IDR

     157,617        60,568        65,249        206,935  

INR

     1,155,534        1,228,795        195,429        183,963  

JOD

     2,603        2,764        7        5  

JPY

     201,391        35,935        144,877        390,921  

KZT

     319        319        —          —    

MGA

     4,692,528        3,318,447        106,294        170,641  

MMK

     29,651        25,208        —          —    

PHP

     262,559        709,285        114,345        66,985  

PKR

     368,414        305,542        4,039        3,588  

SAR

     2,241        2,024        40        —    

SEK

     —          —          488        450,000  

USD

     984,223        1,422,510        10,395,270        8,103,602  

UYU

     145,992        39,898        4,394        4,253  

VND

     1,610,228        —          —          —    

ZAR

     318        170        103        4  

A sensitivity analysis on the Group’s income for the period assuming a 10% increase and decrease in currency exchange rates as of September 30, 2019 and December 31, 2018 are as follows:

 

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

Type

   10% Increase      10% Decrease      10% Increase     10% Decrease  

Increase (decrease) of profit before income tax

   W   (1,278,130 )       1,278,130        (887,561 )      887,561  

Increase (decrease) of shareholder’s equity (*)

     (1,278,130 )       1,278,130        (887,561 )      887,561  

 

(*)

The effect on the shareholders’ equity excluding the impact of income taxes.

The sensitivity analysis above is conducted for monetary assets and liabilities denominated in foreign currencies other than functional currency, without consideration of hedge effect of related derivatives, as of September 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.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management, Continued

 

(2)

Financial risk management, continued

 

 

  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 September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won       

Type

   September 30, 2019      December 31, 2018  

Short-term borrowings

   W —          24,235  

Long-term borrowings

     2,603,967        2,358,860  
  

 

 

    

 

 

 
   W   2,603,967        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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

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

Type

   1% Increase      1% Decrease      1% Increase     1% Decrease  

Increase (decrease) of profit before income tax

   W (19,530 )       19,530        (23,831 )      23,831  

Increase (decrease) of shareholder’s equity (*)

     (19,530 )       19,530        (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 analyses above are 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 nine-month periods ended September 30, 2019 and 2018 are as follows:

 

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

Type

   1% Increase      1% Decrease      1% Increase      1% Decrease  

Increase (decrease) of profit before income tax

   W   420,356        (420,356 )       426,371        (426,371 ) 

Increase (decrease) of shareholder’s equity (*)

     420,356        (420,356 )       426,371        (426,371 ) 

 

(*)

The effect on the shareholders’ equity excluding the impact of income taxes.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 September 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    September 30, 2019  

Type

   Less than
1 year 		     1~2 Years      2~5 Years      More than
5 years 		     Total  

Borrowings and debt securities

   W   11,971,538        9,907,911        27,728,872        28,737,660        78,345,981  

Lease liabilities

     669,974        561,243        1,683,730        2,798,501        5,713,448  

Trade and other payables

     4,716,032        372,693        917,980        1,493,049        7,499,754  

Financial guarantee contracts (*)

     948,855        —          33,529        2,141,835        3,124,219  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W 18,306,399        10,841,847        30,364,111        35,171,045        94,683,402  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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 September 30, 2019 and December 31, 2018 are W85,990 million and W15,586 million, respectively.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

45.

Risk Management, Continued

 

(2)

Financial risk management, continued

 

The expected maturities for non-derivative financial assets as of September 30, 2019 and December 31, 2018 in detail are as follows:

 

In millions of won    September 30, 2019  

Type

   Less than 1
year 		     1~5 Years      More
than
5 years 		     Other (*)      Total  

Cash and cash equivalents

   W 1,545,605        —          —          —          1,545,605  

Financial assets at fair value through other comprehensive income

     —          —          —          394,372        394,372  

Financial assets at amortized cost

     12,053        1,137        83        —          13,273  

Loans

     99,307        369,516        299,388        15,309        783,520  

Long-term/short-term financial instruments

     2,104,338        269,184        —          297,182        2,670,704  

Financial assets at fair value through profit or loss

     2,105,295        7,109        —          638,430        2,750,834  

Trade and other receivables

     6,801,642        1,824,806        4,571        157,718        8,788,737  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 
   W 12,668,240        2,471,752        304,042        1,503,011        16,947,045  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

 

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  

Financial assets 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 nine-month periods ended September 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 September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 30, 2019  

Type

   Less than
1 year 		    1~2 Years     2~5 Years     More than
5 years 		    Total  

Net settlement

          

- Trading

   W 130       —         —         —         130  

Gross settlement

          

- Trading

     (3,149 )      (5,116 )      (24,459 )      6,371       (26,353 ) 

- Hedging

     (61,715 )      16,434       18,363       (24,509 )      (51,427 ) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 
   W   (64,734 )      11,318       (6,096 )      (18,138 )      (77,650 ) 
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

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 nine-month periods ended September 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 arms-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.

In the case of trade receivables and payables, the Group considers the carrying value net of impairment as fair value. 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 September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 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 394,372        394,372        399,495        399,495  

Derivative assets (trading)

     312,754        312,754        37,631        37,631  

Derivative assets (applying hedge accounting)

     291,817        291,817        64,704        64,704  

Financial assets at fair value through

profit or loss

     2,750,834        2,750,834        920,935        920,935  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 3,749,777        3,749,777        1,422,765        1,422,765  
  

 

 

    

 

 

    

 

 

    

 

 

 

Assets carried at amortized cost

           

Financial assets at amortized cost

   W 13,273        13,273        14,042        14,042  

Loans and receivables

     745,811        745,811        718,674        718,674  

Trade and other receivables

     8,781,491        8,781,491        9,613,437        9,613,437  

Long-term financial instruments

     566,366        566,366        448,741        448,741  

Short-term financial instruments

     2,104,338        2,104,338        1,869,286        1,869,286  

Cash and cash equivalents

     1,545,605        1,545,605        1,358,345        1,358,345  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 13,756,884        13,756,884        14,022,525        14,022,525  
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities recognized at fair value

           

Derivative liabilities (trading)

   W 47,168        47,168        99,010        99,010  

Derivative liabilities (applying hedge accounting)

     131,520        131,520        213,153        213,153  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 178,688        178,688        312,163        312,163  
  

 

 

    

 

 

    

 

 

    

 

 

 

Liabilities carried at amortized cost

           

Secured borrowings

   W 161,027        161,027        741,029        741,029  

Unsecured bond

     60,571,808        64,100,818        56,603,988        58,804,070  

Lease liabilities

     4,993,683        4,993,683        283,806        283,806  

Unsecured borrowings

     5,269,605        5,294,703        3,522,602        3,950,517  

Trade and other payables (*)

     7,499,754        7,499,754        9,063,285        9,063,285  

Bank overdraft

     10,424        10,424        167,008        167,008  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   78,506,301        82,060,409        70,381,718        73,009,715  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

(*)

Excludes lease liabilities

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 September 30, 2019 and December 31, 2018 are as follows:

 

Type

   September 30, 2019      December 31, 2018  

Derivatives

     0.33% ~ 4.16%        0.02% ~ 4.16%  

Borrowings and debt securities

     0.40% ~ 4.38%        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 levels as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 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 203,822        —          190,550        394,372  

Derivative assets

     —          604,571        —          604,571  

Financial assets at fair value through profit or loss

     —          2,745,687        5,147        2,750,834  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W   203,822        3,350,258        195,697        3,749,777  
  

 

 

    

 

 

    

 

 

    

 

 

 

Financial liabilities at fair value

           

Derivative liabilities

   W —          178,688        —          178,688  

 

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 nine-month periods ended September 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 nine-month period ended September 30, 2019 and for the year ended December 31, 2018 are as follows:

 

In millions of won    September 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        —          55        —         —          5,147  

Financial assets at fair value through other comprehensive income

                      

Unlisted securities

       189,439        —          —          —          22        (916 )      2,005        190,550  

 

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 nine-month periods ended September 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 September 30, 2019 are as follows:

 

In millions of won       

Type

   Amounts  

Less than 1 year

   W 125,481  

1~2 years

     125,481  

2~3 years

     83,653  
  

 

 

 
   W   334,615  
  

 

 

 

 

(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 “PT 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, PT 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 September 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

     598,866  
  

 

 

 
   W   685,411  
  

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties

 

(1)

Related parties of the Group as of September 30, 2019 are as follows:

 

Type

  

Related party

Parent    Republic of Korea government

Subsidiaries

(113 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., 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

(62 associates)

   Dongducheon Dream Power Co., Ltd., Korea Gas Corporation, Daegu Photovoltaic Co., Ltd., Jeongam Wind Power Co., Ltd., Korea Power Engineering Service Co., Ltd., Haeng 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., Taebaek 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 Co., 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, Hanwha Corporation-linked Sunlight Power Special Private Equity Investment Trust No. 1

Joint ventures

(59 joint ventures)

   Daegu Green Power Co., Ltd., KEPCO SPC Power Corporation, Daejung Offshore Wind Power Co., Ltd., KAPES, Inc., 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, Dangjin Eco Power Co., Ltd., Eumseong Natural Gas Power Co., Ltd.
Others (4 others)    Korea Development Bank, Ulleungdo Natural Energy Co., Ltd., Garolim Tidal Power Plant Co., Ltd., Ulsan GPS Co., Ltd. (formerly, Dangjin Eco Power Co., Ltd.)

 

(2)

Transactions between the Company and its subsidiaries are eliminated during the consolidation and are not disclosed in the notes.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(3)

Related party transactions for the nine-month periods ended September 30, 2019 and 2018 are as follows:

<Sales and Others>

 

In millions of won           Sales and others  

Company name

   Transaction type      September 30, 2019      September 30, 2018  

<Associates>

        

Korea Gas Corporation

     Electricity sales      W   93,226        70,125  

Dongducheon Dream Power Co., Ltd.

     Electricity sales        4,590        4,417  

S-Power Co., Ltd.

     Service        4,869        7,077  

Hyundai Green Power Co., Ltd.

     Design service        12,627        12,873  

Korea Electric Power Industrial Development Co., Ltd.

     Service        8,608        8,665  

Daeryun Power Co., Ltd.

     Electricity sales        1,411        1,291  

Korea Power Exchange

     Service        5,303        4,918  

Samcheok Eco Materials Co., Ltd.

     Electricity sales        447        384  

Gangwon Wind Power Co., Ltd.

     Electricity sales        2,369        2,368  

Cheongna Energy Co., Ltd.

     Service        8,287        8,242  

Others (Busan Green Energy Co., Ltd. and 35 others)

     Electricity sales        129,840        82,532  

<Joint ventures>

        

GS Donghae Electric Power Co., Ltd.

     Electricity sales        14,288        5,870  

Chun-cheon Energy Co., Ltd.

     Electricity sales        1,636        989  

Daegu Green Power Co., Ltd.

     Electricity sales        852        775  

Nawah Energy Company

     Service        73,352        33,941  

KAPES, Inc.

     Commission        233        500  

Rabigh Electricity Company

     Service        146        16,250  

Seokmun Energy Co., Ltd.

     Service        1,158        694  

Yeonggwang Wind Power Co., Ltd.

     Electricity sales        526        —    

Others (Yeonggwangbaeksu Wind Power Co., Ltd. and 30 others)

     Electricity sales        66,822        88,438  

<Others>

        

Yeongwol Energy Station Co., Ltd.

     Service        —          373  

DS POWER Co., Ltd.

     Service        —          565  

Korea Development Bank

     Electricity sales        3,092        2,614  
     Interest income        1,489        3,695  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(3)

Related party transactions for the nine-month periods ended September 30, 2019 and 2018 are as follows, continued:

<Purchase and Others>

 

In millions of won   

 

     Purchase and others  

Company name

   Transaction type      September 30,
2019 		     September 30,
2018 		 

<Associates>

        

Korea Gas Corporation

     Electricity sales      W   3,034,910        3,862,981  

Dongducheon Dream Power Co., Ltd.

     Electricity sales        528,511        612,641  

S-Power Co., Ltd.

     Service        401,453        343,405  

Hyundai Green Power Co., Ltd.

     Design service        360,087        361,019  

Korea Electric Power Industrial Development Co., Ltd.

     Service        185,368        193,921  

Daeryun Power Co., Ltd.

     Electricity sales        104,593        127,596  

Korea Power Exchange

     Service        96,265        101,562  

Samcheok Eco Materials Co., Ltd.

     Electricity sales        5,821        1,311  

Gangwon Wind Power Co., Ltd.

     Electricity sales        17,891        19,199  

Cheongna Energy Co., Ltd.

     Service        58,747        58  

Others (Busan Green Energy Co., Ltd. and 35 others)

     Electricity sales        61,358        70,580  

<Joint ventures>

        

GS Donghae Electric Power Co., Ltd.

     Electricity sales        542,355        590,921  

Chun-cheon Energy Co., Ltd.

     Electricity sales        242,622        248,606  

Daegu Green Power Co., Ltd.

     Electricity sales        223,741        192,827  

KAPES, Inc.

     Commission        62,294        68,766  

Seokmun Energy Co., Ltd.

     Service        19,644        23,614  

Yeonggwang Wind Power Co., Ltd.

     Electricity sales        24,204        —    

Others (Yeonggwangbaeksu Wind Power Co., Ltd. and 30 others)

     Electricity sales        22,787        23,828  

<Others>

        

DS POWER Co., Ltd.

     Service        —          4,019  

Korea Development Bank

     Interest expense        2,987        3,971  
     Dividends paid        15        166,876  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(4)

Receivables and payables arising from related party transactions as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won         Receivables      Payables  

Company name

  

Type

   September 30,
2019 		     December 31,
2018 		     September 30,
2019 		     December 31,
2018 		 

<Associates>

              

Korea Gas Corporation

   Trade receivables    W 5,292        9,439        —          —    
   Non-trade receivables and others      331        498        —          —    
   Trade payables      —          —          261,861        601,092  
   Non-trade payables and others      —          —          816        314  

S-Power Co., Ltd.

   Trade receivables      238        922        —          —    
   Non-trade receivables and others      43        34        —          —    
   Trade payables      —          —          31,824        56,897  
   Non-trade payables and others      —          —          —          16  

Dongducheon Dream Power Co., Ltd.

   Trade receivables      356        332        —          —    
   Non-trade receivables and others      215        298        —          —    
   Trade payables      —          —          46,733        74,651  
   Non-trade payables and others      —          —          22        10  

Goseong Green Energy Co., Ltd.

   Trade receivables      200        —          —          —    
   Non-trade payables and others      —          —          66,957        43,020  

Hyundai Green Power Co., Ltd.

   Trade receivables      370        390        —          —    
   Trade payables      —          —          34,625        38,072  

Daeryun Power Co., Ltd.

   Trade receivables      137        178        —          —    
   Trade payables      —          —          9,743        15,845  

Hyundai Energy Co., Ltd.

   Trade receivables      61        57        —          —    
   Non-trade receivables and others      12,206        9,664        —          —    
   Trade payables      —          —          205        259  
   Non-trade payables and others      —          —          9,378        8,021  

Gunsan Bio Energy Co., Ltd.

   Non-trade receivables and others      —          3,458        —          —    

Korea Electric Power Industrial Development Co., Ltd.

   Trade receivables      614        278        —          —    
   Non-trade receivables and others      43        51        —          —    
   Trade payables      —          —          5,663        —    
   Non-trade payables and others      —          —          3,332        13,102  

Noeul Green Energy Co., Ltd.

   Trade receivables      3        3        —          —    
   Non-trade payables and others      —          —          1,365        8,774  

Busan Green Energy Co., Ltd.

   Trade receivables      1        1        —          —    
   Non-trade payables and others      —          —          833        10,882  

Korea Power Exchange

   Trade receivables      1,408        847        —          —    
   Non-trade receivables and others      25,522        229        —          —    
   Trade payables      —          —          4,125        —    
   Non-trade payables and others      —          —          4,788        1,214  

Others (Gangwon Wind Power Co., Ltd. and 34 others)

   Trade receivables      2,199        721        —          —    
   Non-trade receivables and others      5,649        1,377        —          —    
   Trade payables      —          —          2,528        6,217  
   Non-trade payables and others      —          —          1,647        740  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(4)

Receivables and payables arising from related party transactions as of September 30, 2019 and December 31, 2018 are as follows, continued:

 

In millions of won           Receivables      Payables  

Company name

   Type      September 30,
2019 		     December 31,
2018 		     September 30,
2019 		     December 31,
2018 		 

<Joint ventures>

              

GS Donghae Electric Power Co., Ltd.

     Trade receivables        176        245        —          —    
     Non-trade receivables and others        322        2,537        —          —    
     Trade payables        —          —          37,271        69,820  
     Non-trade payables and others        —          —          179        59  

Nawah Energy Company

     Trade receivables        47,899        29,614        —          —    
     Non-trade receivables and others        —          253        —          —    

Chun-cheon Energy Co., Ltd.

     Trade receivables        116        20        —          —    
     Non-trade receivables and others        2,755        308        —          —    
     Trade payables        —          —          21,318        33,796  

Daegu Green Power Co., Ltd.

     Trade receivables        134        110        —          —    
     Non-trade receivables and others        —          12        —          —    
     Trade payables        —          —          18,369        32,609  

Amman Asia Electric Power Company

     Non-trade payables and others        —          —          18,211        18,351  

KAPES, Inc.

     Non-trade receivables and others        —          253        —          —    
     Non-trade payables and others        —          —          4        338  

Honam Wind Power Co., Ltd.

     Trade payables        —          —          134        432  
     Non-trade payables and others        —          —          1,493        3,573  

Kelar S.A

     Non-trade receivables and others        16,730        —          —          —    

Others (Seokmun Energy Co., Ltd.

and 16 others)

     Trade receivables        1,542        784        —          —    
     Non-trade receivables and others        3,140        839        —          —    
     Trade payables        —          —          417        911  
     Non-trade payables and others        —          —          6,311        6,577  

<Others>

              

Korea Development Bank

     Accrued interest income        1,151        1,147        —          —    
     Non-trade receivables and others        122,511        12,125        —          —    
     Non-trade payables and others        —          —          177        218  
     Derivatives        62,271        27,306        2,761        18,095  

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(5)

Loans and others arising from related party transactions as of September 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       95        —         1,909       29,638  
   (Allowance for doubtful accounts)      (6,065 )      —          —         (2,519 )      (8,584 ) 

Associates

   PT. Cirebon Electric Power      8,696       —          (8,873 )      761       584  

Associates

   Xe-Pian Xe-Namnoy Power Co., Ltd.      1,413       6,300        —         —         7,713  

Associates

   PT. Wampu Electric Power      14,880       —          —         1,956       16,836  

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       —          —         3,623       52,317  

Joint ventures

   Chester Solar IV SpA      —         1,683        —         56       1,739  

Joint ventures

   Chun-cheon Energy Co., Ltd.      616       1,868        —         —         2,484  

Joint ventures

   Chester Solar V SpA      —         533        —         18       551  

Joint ventures

   Diego de Almagro Solar SpA      —         2,094        —         71       2,165  

Joint ventures

   Dangjin Eco Power Co., Ltd.      —         2,600        —         —         2,600  

Joint ventures

   DE energia SpA      —         6,799        —         82       6,881  

Joint ventures

   Eumseong Natural Gas Power Co., Ltd.      —         20,000        —         —         20,000  
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 
      W   105,264       44,972        (8,873 )      5,957       147,320  
     

 

 

   

 

 

    

 

 

   

 

 

   

 

 

 

 

(6)

Borrowings arising from related party transactions as of September 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        —          (10,573 )      —         56,220  
   Others      4,154        —          (491 )      —         3,663  
   Operating funds      81,000        12,242        (32,000 )      (85 )      61,157  
   Syndicated Loan      17,276        —          (985 )      1,665       17,956  

 

(7)

Guarantees provided to associates or joint ventures as of September 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  

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

 

82

—  

 

 

   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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(7)

Guarantees provided to associates or joint ventures as of September 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  77,735      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 2,041      Korea Development Bank

Korea Western Power Co., Ltd.

  

Dongducheon Dream Power Co., Ltd.

  

Collateralized money invested (*2)

   KRW 40,588      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 1,373      Woori Bank

Korea Western Power Co., Ltd.

  

Haeng Bok Do Si Photovoltaic Power Co., Ltd.

  

Collateralized money invested

   KRW 240      Nonghyup Bank

Korea Western Power Co., Ltd.

  

Shin Pyeongtaek Power Co., Ltd.

  

Collateralized money invested

   KRW 62,449      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 4,916      Korea Development Bank and others

Korea East-West Power Co., Ltd.

  

Seokmun Energy Co., Ltd.

  

Collateralized money invested

   KRW 17,236      Kookmin Bank and others

Korea East-West Power Co., Ltd.

  

Chun-cheon Energy Co., Ltd.

  

Collateralized money invested

   KRW 37,619      Kookmin Bank and others
     

Guarantees for supplemental funding (*1)

   KRW 20,000  

Korea East-West Power Co., Ltd.

  

Honam Wind Power Co., Ltd.

  

Collateralized money invested

   KRW 4,184      Shinhan Bank and others

Korea East-West Power Co., Ltd.

  

GS Donghae Electric Power Co., Ltd.

  

Collateralized money invested

   KRW  250,617     

Korea Development Bank and others

Korea East-West Power Co., Ltd.

  

Yeonggwangbaeksu Wind Power Co., Ltd.

  

Collateralized money invested

   KRW 2,820     

Kookmin Bank and others

Korea East-West Power Co., Ltd.

  

Yeonggwang Wind Power Co., Ltd.

  

Collateralized money invested

   KRW 15,358     

KDB Capital Corporation and others

Korea East-West Power Co., Ltd.

  

Daesan Green Energy Co., Ltd.

  

Collateralized money invested

   KRW 17,291     

IBK

Korea East-West Power Co., Ltd.

  

Taebaek Gadeoksan Wind Power Co., Ltd.

  

Collateralized money invested

   KRW 8,002     

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 1,550     

JCSD Trustee Services Limited and others

Korea East-West Power Co., Ltd.

  

DE Energia SpA

  

Collateralized money invested

   KRW 8,990     

Mirae Asset Daewoo Co., Ltd. and others

Korea East-West Power Co., Ltd.

     

Debt guarantees

   KRW 6,881  

Korea Southern Power Co., Ltd.

  

KNH Solar Co., Ltd.

  

Collateralized money invested

   KRW 2,079     

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 26,291     

Korea Development Bank and others

     

Guarantees for supplemental funding and others (*1)

     —    

Korea Southern Power Co., Ltd.

  

Daegu Green Power Co., Ltd.

  

Collateralized money invested

   KRW 42,601     

Shinhan Bank and others

Korea Southern Power Co., Ltd.

  

Kelar S.A

  

Performance guarantees

   USD 63,707     

Hana Bank, SMBC, Mizuho Bank, MUFG, Natixis

Korea Southern Power Co., Ltd.

  

Daehan Wind Power PSC

  

Debt guarantees

   USD 17,898     

Shinhan Bank, Hana Bank

     

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 4,982     

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

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(7)

Guarantees provided to associates or joint ventures as of September 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.

  

Jeongam Wind Power Co., Ltd.

  

Collateralized money invested

   KRW  2,704     

IBK, SK Securities Co.,

Ltd. and others

  

Performance guarantees

     —    

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  129,834     

Korea Development Bank and others

Korea Midland Power Co., Ltd.

  

PT. Cirebon Electric Power

  

Debt guarantees

   USD 11,248     

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 448     

IBK

     

Guarantees for supplemental funding (*1)

     —       

IBK

Korea Midland Power Co., Ltd.

  

Namjeongsusang Solar Power Operatin Co., Ltd.

  

Collateralized money invested

   KRW 849     

IBK

Korea Midland Power Co., Ltd.

  

YeongGwang Yaksu Wind Electric. Co., Ltd.

  

Collateralized money invested

   KRW 397     

IBK and others

Korea Midland Power Co., Ltd.

  

Green Energy Electricity Generation Co., Ltd.

  

Collateralized money invested

   KRW 496     

IBK

     

Guarantees for supplemental funding and others (*1)

     —       

IBK and others

Korea South-East Power Co., Ltd.

  

Hyundai Energy Co., Ltd.

  

Collateralized money invested

     —       

Korea Development Bank and others

     

(*4)

Guarantees for supplemental funding and others (*1,5)

   KRW 78,600  

Korea South-East Power Co., Ltd.

  

RES Technology AD

  

Collateralized money invested

   KRW 17,086     

UniCredit Bulbank and others

Korea South-East Power Co., Ltd.

  

ASM-BG Investicii AD

  

Collateralized money invested

   KRW 22,597     

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

Korea South-East Power Co., Ltd.

  

S-Power Co., Ltd.

  

Collateralized money invested

   KRW 117,761     

Korea Development Bank and others

Korea South-East Power Co., Ltd.

  

Goseong Green Energy Co., Ltd.

  

Collateralized money invested

   KRW 2,381     

Kyobo Life Insurance Co., Ltd. and others

Korea South-East Power Co., Ltd.

  

Gangneung Eco Power Co., Ltd.

  

Collateralized money invested

   KRW 2,450     

Kyobo Life Insurance Co., Ltd. and others

Korea South-East Power Co., Ltd.

  

PND solar., Ltd.

  

Collateralized money invested

   KRW 1,304     

IBK and others

Korea South-East Power Co., Ltd.

  

Hyundai Eco Energy Co., Ltd.

  

Collateralized money invested

   KRW 3,485     

Samsung Life Insurance and others

Korea South-East Power Co., Ltd.

  

Jaeun Resident Wind Power Plant Co., Ltd.

  

Collateralized money invested

   KRW 2,313     

IBK

Korea South-East Power Co., Ltd.

  

Cheongsong Myeonbongsan Wind Power Plant Co., Ltd.

  

Collateralized money invested

   KRW 2,681     

Kyobo Life Insurance Co., Ltd. and others

Korea Hydro & Nuclear Power Co., Ltd.

  

Noeul Green Energy Co., Ltd.

  

Collateralized money invested

   KRW 7,776     

Hana Bank and others

Korea Hydro & Nuclear Power Co., Ltd.

  

Busan Green Energy Co., Ltd.

  

Collateralized money invested

   KRW 12,270     

Shinhan Bank and others

KEPCO Plant Service & Engineering Co., Ltd.

  

Incheon New Power Co., Ltd.

  

Collateralized money invested

   KRW 496     

Shinhan Bank

     

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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

(7)

Guarantees provided to associates or joint ventures as of September 30, 2019 are as follows, continued:

 

(*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 18,090 thousand and the total amount of guarantees is USD 1,550 thousand which consists of USD 310 thousand of EWP Barbados 1 SRL’s contribution obligation and USD 1,240 thousand of South Jamaica Energy Holding Limited’s portion (50%) of contribution obligation.

(*4)

The Group recognized an 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 benefit 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 September 30, 2019.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

47.

Related Parties, Continued

 

 

 

(8)

As of September 30, 2019, there is no financial guarantee contract provided by related parties.

 

(9)

Derivatives transactions with related parties as of September 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   1,184.00  
     2016~2019        105,260        USD 100,000        2.48%        2.38%        1,052.60  
     2015~2025        111,190        USD 100,000        2.62%        3.25%        1,111.90  
     2017~2027        111,610        USD 100,000        2.31%        3.13%        1,116.10  
     2018~2028        108,600        HKD 800,000        2.69%        3.35%        135.75  
     2018~2023        170,280        USD 150,000        2.15%        3.75%        1,135.20  
     2019~2027        119,978        CHF 100,000        1.43%        0.05%        1,199.78  
     2017~2020        114,580        USD 100,000        1.75%        2.38%        1,145.80  
     2016~2021        121,000        USD 100,000        2.15%        2.50%        1,210.00  
     2019~2022        112,650        USD 100,000        1.80%        3.38%        1,126.50  
     2018~2023        320,880        USD 300,000        2.03%        3.75%        1,069.60  
     2019~2022        117,340        USD 100,000        1.06%        2.38%        1,173.40  
     2018~2021        212,960        USD 200,000        2.10%        3.00%        1,064.80  
     2017~2022        113,300        USD 100,000        1.94%        2.63%        1,133.00  
     2018~2023        169,335        USD 150,000        2.26%        3.88%        1,128.90  

(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  
     2019.09.02        2019.10.07        8,477      USD   7,000        1,211.00  
     2019.09.17        2019.10.14        14,837      USD   12,500        1,186.98  
     2019.09.20        2019.10.14        6,547      USD   5,500        1,190.45  

 

(10)

Salaries and other compensations to the key members of management of the Group for the nine-month periods ended September 30, 2019 and 2018 are as follows:

 

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

Type

   Three-month
period ended 		     Nine-month
period ended 		     Three-month
period ended 		     Nine-month
period ended 		 

Salaries

   W   245        1,100        191        888  

Employee benefits

     11        15        3        21  
  

 

 

    

 

 

    

 

 

    

 

 

 
   W 256        1,115        194        909  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

 

48.

Non-Cash Transactions

Significant non-cash investing and financing transactions for the nine-month periods ended September 30, 2019 and 2018 are as follows:

 

In millions of won              

Transactions

   September 30, 2019      September 30, 2018  

Transfer from construction-in-progress to other assets

   W   6,250,122        5,435,126  

Recognition of asset retirement cost and related provision for decommissioning costs

     463,258        240,500  

Transfer from provision for disposal of spent nuclear fuel to accrued expenses

     256,994        355,310  

Recognition of litigation provisions in addition to property, plant and equipment

     —          185,530  

Transfer of right-of-use assets due to change in accounting policy

     4,994,477        —    

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

49.

Commitments for Expenditure

 

(1)

The commitments for acquisition of property, plant and equipment as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 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        27,218        56,183        37,309  

Purchase of cable (PVC, 1C, 2500SQ) 103,374M and others (Bukdangjin-Shin-Tangjung)

     45,390        32,876        44,315        31,801  

Purchase of GIS (362KV, 6300A, 63KA) 23CB – Youngseo S/S

     36,143        36,143        34,500        34,500  

Purchase of GIS (362KV, 6300A, 63KA) 26CB – Hwasung S/S

     40,010        18,088        29,143        18,194  

Purchase of GIS (362KV, 6300A, 63KA) 27CB – Kwangyang S/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        —          66,240        38,998  

Purchase of cable (FR CNCO-W, 1C, 325SQ) 1,400,000

     59,716        37,249        57,475        48,598  

Purchase of switch (Eco) 9,360 units

     40,631        24,031        40,631        34,797  

Purchase of cable (TR CNCE-W/AL, 1C, 400SQ) 2,654,400M

     36,063        24,102        —          —    

Construction of Shin-Kori units (#3,4)

     7,450,197        —          7,363,514        3,211  

Construction of Shin-Kori units (#5,6)

     8,625,387        5,132,948        8,625,387        5,930,099  

Construction of Shin-Hanul units (#1,2)

     7,982,342        49,471        7,982,342        355,704  

Other 31 contracts

     419,638        256,391        269,681        161,243  

Service of designing Seoul Combined units (#1,2)

     30,778        3,379        29,996        4,744  

Purchase of main machine for construction of Seoul Combined units (#1,2)

     365,385        20,097        365,164        51,165  

Construction of Seoul Combined units (#1,2)

     303,868        2,870        285,890        27,125  

Purchase of smoke eliminating machine for construction of Shin-Boryeong units (#1,2)

     174,467        1,006        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        50,641        305,209        74,631  

Purchase of turbine generator for construction of Shin-Seocheon thermal power plant

     104,402        15,880        104,402        57,968  

Electricity construction of Shin-Seocheon thermal power plant

     231,196        113,027        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        10,398        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

     46,101        3,261        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        42,785        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        84,982        146,594        134,949  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

49.

Commitments for Expenditure, Continued

 

(2)

As of September 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    38,990 Ton U3O8

Transformed

   2019 ~ 2030    21,969 Ton U

Enrichment

   2019 ~ 2030    17,060 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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

50.

Contingencies and Commitments

 

(1)

Ongoing litigations and claims related with contingent liabilities and contingent assets as of September 30, 2019 and December 31, 2018 are as follows:

 

In millions of won    September 30, 2019      December 31, 2018
     Number of cases      Claim amount      Number of cases     

Claim amount

As the defendant

     607      W   640,771        570      W  673,882

As the plaintiff

     197        810,973        174      793,491

As of September 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 September 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 February 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 September 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 September 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. Gyeonggi Green Energy had been in negotiations to renew the contract as the creditors requested, and, as a result, Gyeonggi Green Energy renewed the long-term service contract with fuel cell supplier as of August 30, 2019. Accordingly, the Group has obtained approval from the creditors for long-term service contracts with the fuel cell supplier.

The Group is the defendant against a number of claims. The following is potentially significant ongoing claims pertaining to the Group.

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 benefit outflow is probable on the ongoing and the expected lawsuit. For this reason, the Group recognized W26,882 million of other provision in relation to the lawsuit as of September 30, 2019.

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

50.

Contingencies and Commitments, Continued

 

(1)

Ongoing litigations and claims related with contingent liabilities and contingent assets as of September 30, 2019 and December 31, 2018 are as follows, continued:

Except these significant ongoing claims, there are 11 arbitration cases pertaining to the Group as of September 30, 2019 and the significant arbitration cases for the nine-month period ended September 30, 2019 are as follows:

 

  ①

LS Cable & System Ltd., 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 an arbitration against the Group to the Korea Commercial Arbitration Board in relation to the request for additional construction costs and the Group filed an 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 September 30, 2019.

 

  ⑤

The Group has filed for arbitration against IL KWANG E&C Co., Ltd. to the Korea Commercial Arbitration Board, in relation to damage claims received as of September 30, 2019.

 

  ⑥

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 provision 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 September 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 nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

50.

Contingencies and Commitments, Continued

 

(2)

Guarantees of payments and commitments provided to other companies as of September 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 September 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

   Hana Bank and others      KRW        1,050,000  

Limit amount available for card

   Hana Bank and others      KRW        53,904  
   Banco de Oro      PHP        5,000  

Loan limit

   Kookmin Bank and others      KRW        1,153,900  
   DBS Bank and others      USD        2,522,700  

Certification of payment on payables from foreign country

   Nonghyup Bank      USD        4,680  

Certification of payment on L/C

   Shinhan Bank      KRW        7,749  
   Shinhan Bank and others      USD        877,434  

Certification of Performance guarantee on contract

   Hana Bank and others      EUR        4,158  
   Hana Bank and others      INR        268,353  
   Korea Development Bank
and others 		     JPY        637,322  
   Seoul Guarantee Insurance
and others 		     KRW        193,150  
   First Abu Dhabi Bank and
others 		     USD        843,690  
   Hana Bank      SAR        6,508  
   Hana Bank      CAD        464  

Certification of bidding

   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        317,771  
   Export-Import Bank of
Korea and others 		     USD        1,190,844  

Inclusive credit

   Shinhan Bank      INR        70,028  
   Hana Bank      KRW        258,000  
   Hana Bank and others      USD        31,183  

Trade finance

   BNP Paribas and others      USD        700,000  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 30, 2019 and 2018

(Unaudited)

 

50.

Contingencies and Commitments, Continued

 

(4)

As of September 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.

  

Kyobo Life Insurance Co., Ltd. and others

  

Property, plant and equipment and others

   KRW      171,600     

Collateral for borrowings (*2)

SE Green Energy Co., Ltd.

  

DB Insurance Co., Ltd. and others

  

Property, plant and equipment and others

   KRW      149,500     

Collateral for borrowings (*2)

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 (*2)

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 September 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 September 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 W 77,148 million as of September 30, 2019, to improve the quality of water used in generating electricity. The expenses related to the suspension of operations of W41 million and depreciation on the utility plant of W4,906 million are recorded in other expenses for the nine-month period ended September 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 September 30, 2019.

 

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KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 September 30, 2019. The book value of facility is W16,932 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 provision because the amount and timing of economic benefit outflow cannot be reasonably estimated.

 

51.

Subsequent Events

 

(1)

Changes in investment shares

On October 21, 2019, Korea East-West Power Co., Ltd., sold off all of its shares in Ulsan GPS Co., Ltd., which was classified as assets held for sale as of September 30, 2019, and purchased shares of Eumseong Natural Gas Power Co., Ltd. to hold a 100% interest. Accordingly, Korea East-West Power Co., Ltd., signed a merger agreement with Eumseong Natural Gas Power Co., Ltd. on October 24, 2019.

 

(2)

Issue of corporate bonds

Subsequent to September 30, 2019, Korea Hydro & Nuclear Power Co., Ltd., Korea Midland Power Co., Ltd. and Korea Southern Power Co., Ltd. issued a foreign bond and corporate bonds for funding debt repayment, facility investments, and operations 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.

   #53-1 Corporate bond    2019.10.16    2024.10.16    1.53%    KRW  60,000  
   #53-2 Corporate bond    2019.10.16    2039.10.16    1.59%    KRW  100,000  
   #53-3 Corporate bond    2019.10.16    2049.10.16    1.58%    KRW  90,000  

Korea Midland Power Co., Ltd.

  

#51-1 non-guaranteed

corporate bond

   2019.10.30    2029.10.30    1.95%    KRW  50,000  
  

#51-2 non-guaranteed

corporate bond

   2019.10.30    2039.10.30    1.92%    KRW  80,000  
  

#52-1 non-guaranteed

corporate bond

   2019.11.13    2029.11.13    2.00%    KRW  140,000  
  

#52-2 non-guaranteed

corporate bond

   2019.11.13    2049.11.13    1.86%    KRW  80,000  

Korea Southern Power Co., Ltd.

   #19 Kangaroo bond    2019.10.30    2024.10.30    3M BBSW+97bp    AUD  300,000  

 

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Notes to the Consolidated Interim Financial Statements, Continued

For the nine-month periods ended September 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 nine-month periods ended September 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 periods.

 

In millions of won    September 30, 2019      September 30, 2018  
     Three-month
period ended 		     Nine-month
period ended 		     Three-month
period ended 		     Nine-month
period ended 		 

Operating profit on consolidated interim statements of comprehensive income

   W   1,239,266        310,726        1,395,215        580,484  

Add

           

Other income

           

Reversal of other provisions

     1,331        3,517        649        2,126  

Gains on government grants

     62        201        66        211  

Gains on assets contributed

     20        2,791        3,735        4,153  

Gains on liabilities exempted

     119        838        164        7,185  

Compensation and reparations revenue

     80,860        119,524        19,997        62,751  

Revenue from research contracts

     1,952        4,529        2,667        5,511  

Rental income

     47,150        141,201        45,199        138,537  

Others

     15,026        45,076        8,797        39,449  

Other gains

           

Gains on disposal of property, plant and equipment

     6,578        35,765        64,769        91,132  

Gains on disposal of intangible assets

     109        206        8        11  

Gains on foreign currency translation

     42,953        11,108        17,128        12,925  

Gains on foreign currency transaction

     13,129        30,295        9,883        33,089  

Gains on insurance proceeds

     4,199        4,212        —          —    

Others

     46,870        157,106        38,787        145,605  

Deduct

           

Other expenses

           

Compensation and reparations expense

     (19 )       (96 )       (2,329 )       (21,617 ) 

Accretion expenses of other provisions

     (2,601 )       (2,984 )       (64 )       (254 ) 

Depreciation expenses on investment properties

     (380 )       (4,671 )       (209 )       (717 ) 

Depreciation expenses on idle assets

     (1,634 )       (4,906 )       (1,637 )       (4,911 ) 

Other bad debt expense

     (1,585 )       (7,281 )       7,976        (3,477 ) 

Donations

     (14,239 )       (41,802 )       (14,480 )       (33,438 ) 

Others

     (7,108 )       (16,964 )       (10,169 )       (54,020 ) 

Other losses

           

Losses on disposal of property, plant and equipment

     (16,540 )       (43,287 )       (14,474 )       (27,874 ) 

Losses on disposal of intangible assets

     (28 )       (28 )       (18 )       (23 ) 

Losses on impairment of property, plant and
equipment

     (7,467 )       (37,152 )       —          (701,317 ) 

Losses on impairment of intangible assets

     (451,823 )       (513,519 )       —          —    

Losses on foreign currency translation

     —          (8,669 )       (2,164 )       (5,150 ) 

Losses on foreign currency transaction

     (14,609 )       (43,524 )       (18,608 )       (51,981 ) 

Others

     (37,510 )       (75,328 )       (12,248 )       (44,623 ) 
  

 

 

    

 

 

    

 

 

    

 

 

 

Adjusted operating profit

   W 944,081        66,884        1,538,640        173,767  
  

 

 

    

 

 

    

 

 

    

 

 

 

 

139

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