Investments in Associates and Joint Ventures | 12. Investments in Associates and Joint Ventures (1) Investments in associates and joint ventures accounted for using the equity method as of December 31, 2021 and 2020 are as follows: December 31, 2021 December 31, 2020 (In millions of won) Country Ownership (%) Carrying Ownership Carrying Investments in associates: SK China Company Ltd. China 27.3 ₩ 793,754 27.3 ₩ 555,133 Korea IT Fund(*1) Korea 63.3 339,976 63.3 323,294 KEB HanaCard Co., Ltd.(*2) Korea 15.0 349,866 15.0 314,930 SK Telecom CS T1 Co., Ltd.(*3) Korea — — 54.9 53,010 NanoEnTek, Inc.(*3) Korea — — 28.4 43,190 UniSK China 49.0 19,156 49.0 15,700 SK Technology Innovation Company Cayman Islands 49.0 86,301 49.0 41,579 SK MENA Investment B.V. Netherlands 32.1 15,343 32.1 14,043 SK hynix Inc.(*3) Korea — — 20.1 12,251,861 SK Latin America Investment S.A. Spain 32.1 14,004 32.1 13,930 Grab Geo Holdings PTE. LTD.(*3) Singapore — — 30.0 30,063 SK South East Asia Investment Pte. Ltd. Singapore 20.0 348,782 20.0 311,990 Pacific Telecom Inc.(*2) USA 15.0 43,789 15.0 39,723 S.M. Culture & Contents Co., Ltd.(*4) Korea 23.1 60,261 23.3 62,248 Content Wavve Co., Ltd.(*3) Korea — — 30.0 75,803 Hello Nature Co., Ltd.(*3) Korea — — 49.9 11,969 Digital Games International Pte. Ltd. Singapore 33.3 2,208 33.3 6,449 Invites Healthcare Co., Ltd.(*5) Korea 27.1 26,474 43.5 25,536 Nam Incheon Broadcasting Co., Ltd. Korea 27.3 12,525 27.3 10,902 NANO-X Israel — — 5.6 28,484 Home Choice Corp.(*2) Korea 17.8 3,052 17.8 3,585 Carrot General Insurance Co., Ltd.(*6) Korea — — 21.4 13,469 12CM JAPAN and others(*2,3,7) — — 72,605 — 65,750 2,188,096 14,312,641 Investments in joint ventures: Dogus Planet, Inc.(*3) Turkey — — 50.0 15,071 Finnq Co., Ltd.(*8) Korea 49.0 7,255 49.0 13,342 NEXTGEN BROADCAST SERVICES CO, LLC(*3) USA — — 50.0 5,850 NEXTGEN ORCHESTRATION, LLC(*3) USA — — 50.0 1,600 Techmaker GmbH(*3) Germany — — 50.0 5,609 UTC Kakao-SK Korea 48.2 2,000 — — 9,255 41,472 ₩ 2,197,351 ₩ 14,354,113 (*1) Investment in Korea IT Fund was classified as investment in associates as the Group does not have control over the investee under the contractual agreement with other shareholders. (*2) These investments were classified as investments in associates as the Group can exercise significant influence through its right to appoint the members of the Board of Directors even though the Group has less than 20% of equity interests. (*3) Investments in SK Telecom CS T1 Co., Ltd. and twenty- three spin-off (*4) The ownership interest has changed from 23.3% to 23.1% as third-party share option of S.M. Culture & Contents Co., Ltd. was exercised for the year ended December 31, 2021. (*5) The Group disposed the entire shares of SK Telecom Smart City Management Co., Ltd. to Invites Healthcare Co., Ltd. for the year ended December 31, 2020 and additionally contributed ₩ (*6) The Parent Company has entered into an agreement whereby the entire shares of Carrot General Insurance Co., Ltd. will transfer to T map Mobility Co., Ltd. In accordance with the agreement, the Parent Company reclassified the entire shares of Carrot General Insurance Co., Ltd. as non-current (*7) The Group disposed the entire shares of SK Wyverns Co., Ltd. and recognized ₩ ₩ of impairment loss for the investments in TreePay Co. Ltd., for the year ended December 31, 2021. (*8) These investments were classified as investments in joint ventures as the Group has a joint control pursuant to the agreement with the other shareholders. (*9) The Group newly invested ₩ (2) The market value of investments in listed associates as of December 31, 2021 and 2020 are as follows: (In millions of won, except for share data) December 31, 2021 December 31, 2020 Market price Number of Market value Market price per share (in won) Number of Market value NanoEnTek, Inc.(*) ₩ — — — 8,620 7,600,649 65,518 SK hynix Inc.(*) — — — 118,500 146,100,000 17,312,850 S.M. 4,485 22,033,898 98,822 1,630 22,033,898 35,915 NANO-X — — — 49,678 (USD 45.66 ) 2,607,466 129,534 (*) Investments in NanoEnTek, Inc., SK hynix Inc. and NANO-X spin-off (3) The condensed financial information of significant associates as of and for the years ended December 31, 2021, 2020 and 2019 are as follows: (In millions of won) KEB HanaCard Co., Ltd. (*) Korea IT Fund SK China Company SK South East Asia As of December 31, 2021 Current assets ₩ 9,130,044 117,172 1,124,219 133,110 Non-current 465,333 419,632 1,849,102 2,853,184 Current liabilities 1,281,783 — 53,199 412,962 Non-current 6,284,587 — 316,470 — 2021 Revenue ₩ 1,270,568 58,741 80,241 9,945 Profit (loss) for the year 250,484 50,107 933,475 (188,678 ) Other comprehensive income (loss) 909 (6,847 ) 326,661 304,700 Total comprehensive income 251,393 43,260 1,260,136 116,022 (In millions of won) SK hynix KEB HanaCard Co., Ltd. (*) Korea IT Fund SK China Company SK South East Asia As of December 31, 2020 Current assets ₩ 16,570,953 7,910,517 107,652 380,413 797,045 Non-current 54,602,900 298,438 402,812 1,706,634 1,672,412 Current liabilities 9,072,360 897,594 — 51,025 67 Non-current 10,192,396 5,531,968 — 308,606 — 2020 Revenue ₩ 31,900,418 1,231,815 52,330 107,791 — Profit (loss) for the year 4,758,914 154,521 36,615 20,369 (158,680 ) Other comprehensive income (loss) (107,378 ) (4,283 ) 9,647 42,921 (390,851 ) Total comprehensive income (loss) 4,651,536 150,238 46,262 63,290 (549,531 ) (In millions of won) SK hynix KEB HanaCard Co., Ltd. (*) Korea IT Fund SK China Company SK South East Asia As of December 31, 2019 Current assets ₩ 14,457,602 7,974,407 113,233 615,028 81,065 Non-current 50,331,892 207,284 378,691 1,442,748 1,797,239 Current liabilities 7,874,033 1,015,657 — 59,395 94 Non-current 8,972,266 5,537,850 — 215,354 — 2019 Revenue ₩ 26,990,733 1,236,678 70,565 116,269 — Profit for the year 2,016,391 56,281 53,867 23,474 1,190 Other comprehensive income (loss) 94,023 (4,458 ) 6,132 (15,093 ) 97,508 Total comprehensive income 2,110,414 51,823 59,999 8,381 98,698 (*) The financial information of SK hynix Inc., KEB HanaCard Co., Ltd., SK China Company Ltd. and SK South East Asia Investment Pte. Ltd. are consolidated financial information. In addition, the financial information of SK hynix Inc. as of and for the year ended 2019 is financial information before the change in accounting policy in connection with the application of interpretations published by International Financial Reporting Interpretations Committee on determining lease term, as the impact on the Group’s consolidated financial statements is immaterial. (4) There are no significant joint ventures as of December 31, 2021, the condensed financial information of significant joint ventures as of and for the years ended December 31, 2020 and 2019 are as follows: (In millions of won) Dogus Planet, Inc. Finnq Co., Ltd. As of December 31, 2020 Current assets ₩ 55,951 26,781 Cash and cash equivalents 9,083 23,936 Non-current 30,408 8,530 Current liabilities 46,186 7,367 Accounts payable, other payables and provisions 28,145 5,094 Non-current 10,031 879 2020 Revenue ₩ 177,084 3,937 Depreciation and amortization (4,642 ) (4,417 ) Interest income 1,878 29 Interest expense (555 ) (51 ) Profit (loss) for the year 7,030 (19,426 ) Total comprehensive loss (1,659 ) (19,426 ) (In millions of won) Dogus Planet, Inc. Finnq Co., Ltd. As of December 31, 2019 Current assets ₩ 59,632 42,995 Cash and cash equivalents 13,422 40,619 Non-current 25,247 11,389 Current liabilities 52,238 6,756 Accounts payable, other payables and provisions 35,459 5,062 Non-current 800 1,099 2019 Revenue ₩ 136,777 1,968 Depreciation and amortization (5,487 ) (4,769 ) Interest income 1,455 12 Interest expense (92 ) (198 ) Profit (loss) for the year 9,294 (17,079 ) Total comprehensive income (loss) 9,294 (17,361 ) (5) Reconciliations of financial information of significant associates to carrying amounts of investments in associates in the consolidated financial statements as of December 31, 2021 and 2020 are as follows: (In millions of won) December 31, 2021 Net assets Ownership Net assets Cost-book Carrying KEB HanaCard Co., Ltd. ₩ 2,029,007 15.0 304,351 45,515 349,866 Korea IT Fund 536,804 63.3 339,976 — 339,976 SK China Company Ltd.(*1) 2,603,336 27.3 709,961 83,793 793,754 SK South East Asia Investment Pte. Ltd.(*1) 1,743,908 20.0 348,782 — 348,782 (In millions of won) December 31, 2020 Net assets Ownership Net assets Cost-book Carrying SK hynix Inc.(*1,2) ₩ 51,883,236 20.1 11,082,048 1,169,813 12,251,861 KEB HanaCard Co., Ltd. 1,779,393 15.0 266,909 48,021 314,930 Korea IT Fund 510,464 63.3 323,294 — 323,294 SK China Company Ltd.(*1) 1,725,949 27.3 470,687 84,446 555,133 SK South East Asia Investment Pte. Ltd.(*1) 1,559,951 20.0 311,990 — 311,990 (*1) Net assets of these entities represent net assets excluding those attributable to their non-controlling (*2) The ownership interest is based on the number of shares owned by the Parent Company divided by the total shares issued by the investee company. The Group applied the equity method using the effective ownership interest which is based on the number of shares owned by the Parent Company and the investee’s total shares outstanding. The effective ownership interest applied for the equity method is 21.36%. (6) Details of the changes in investments in associates and joint ventures accounted for using the equity method for the years ended December 31, 2021 and 2020 are as follows: 2021 (In millions of won) Beginning Acquisition Share of (losses) Other compre- income Other Spin-off Ending Investments in associates: SK China Company Ltd.(*1) ₩ 555,133 — 274,066 95,696 (131,141 ) — 793,754 Korea IT Fund(*1) 323,294 — 31,734 (4,336 ) (10,716 ) — 339,976 KEB HanaCard Co., Ltd. 314,930 — 35,057 (121 ) — — 349,866 SK Telecom CS T1 Co., Ltd.(*2) 53,010 4,888 (8,769 ) (575 ) — (48,554 ) — NanoEnTek, Inc.(*2) 43,190 — 1,836 (86 ) — (44,940 ) — UniSK 15,700 — 1,475 1,981 — — 19,156 SK Technology Innovation Company 41,579 — 39,256 5,466 — — 86,301 SK MENA Investment B.V. 14,043 — 2 1,298 — — 15,343 SK hynix Inc.(*1,2) 12,251,861 19,482 1,542,757 197,473 (170,937 ) (13,840,636 ) — SK Latin America Investment S.A. 13,930 — (49 ) 123 — — 14,004 Grab Geo Holdings PTE. LTD.(*2) 30,063 — — — — (30,063 ) — SK South East Asia Investment Pte. Ltd. 311,990 — (18,218 ) 55,010 — — 348,782 Pacific Telecom Inc. 39,723 — 1,598 2,468 — — 43,789 S.M. Culture & Contents Co., Ltd. 62,248 144 (2,484 ) 353 — — 60,261 Contents Wavve Co., Ltd.(*2) 75,803 100,000 (20,716 ) — — (155,087 ) — Hello Nature Co., Ltd.(*2,3) 11,969 9,980 (10,899 ) (1 ) (1,730 ) (9,319 ) — Digital Games International Pte. Ltd. 6,449 — (4,529 ) 288 — — 2,208 Invites Healthcare Co., Ltd. 25,536 7,000 (5,968 ) (94 ) — — 26,474 Nam Incheon Broadcasting Co., Ltd.(*1) 10,902 — 1,759 — (136 ) — 12,525 NANO-X 28,484 (47 ) (2,049 ) — 2,437 (28,825 ) — Home Choice Corp. 3,585 — (533 ) — — — 3,052 Carrot General Insurance Co., Ltd.(*4) 13,469 12,289 (6,666 ) (358 ) (8,734 ) (10,000 ) — Bertis Inc.(*2) — 15,739 (423 ) — — (15,316 ) — UT LLC(*2) — 86,319 (7,773 ) — — (78,546 ) — SPARKPLUS Co., Ltd.(*2) — 34,166 — — — (34,166 ) — 12CM JAPAN and others(*2,5) 65,750 9,038 (2,869 ) 7,693 (1,624 ) (5,383 ) 72,605 14,312,641 298,998 1,837,595 362,278 (322,581 ) (14,300,835 ) 2,188,096 2021 (In millions of won) Beginning Acquisition Share of (losses) Other compre- income Other Spin-off Ending Investments in joint ventures: Dogus Planet, Inc.(*2) ₩ 15,071 — (6,990 ) (1,447 ) — (6,634 ) — Finnq Co., Ltd. 13,342 — (5,969 ) (118 ) — — 7,255 NEXTGEN BROADCAST SERVICES CO, LLC(*2) 5,850 9,048 (1,276 ) — 892 (14,514 ) — NEXTGEN ORCHESTRATION, LLC(*2) 1,600 — — — 142 (1,742 ) — Techmaker GmbH(*2) 5,609 — (94 ) 145 — (5,660 ) — WAVVE Americas Inc. (Formerly, Korea Content Platform, Inc.)(*2) — 30,191 (14 ) — 598 (30,775 ) — UTC Kakao-SK — 2,000 — — — — 2,000 41,472 41,239 (14,343 ) (1,420 ) 1,632 (59,325 ) 9,255 ₩ 14,354,113 340,237 1,823,252 360,858 (320,949 ) (14,360,160 ) 2,197,351 (*1) Dividends received from the associates are deducted from the carrying amount for the year ended December 31, 2021. (*2) Investment in SK Telecom CS T1 Co., Ltd. and twenty- three spin-off spin-off (*3) The Group recognized ₩ (*4) The Parent Company has entered into an agreement whereby the entire shares of Carrot General Insurance Co., Ltd. will transfer to T map Mobility Co., Ltd. In accordance with the agreement, the Parent Company reclassified the investments in Carrot General Insurance Co., Ltd. amounting to ₩ ₩ (*5) The acquisition for the year ended December 31, 2021 includes ₩ ₩ ₩ ₩ ₩ ₩ 2020 (In millions of won) Beginning Acquisition Share of (losses) Other compre- income Other Business Ending Investments in associates: SK China Company Ltd. ₩ 568,459 — 3,752 (17,078 ) — — 555,133 Korea IT Fund(*1) 311,552 — 23,189 6,110 (17,557 ) — 323,294 KEB HanaCard Co., Ltd. 294,756 — 20,671 (497 ) — — 314,930 SK Telecom CS T1 Co., Ltd.(*2) 60,305 — (7,282 ) (13 ) — — 53,010 NanoEnTek, Inc.(*2) 42,127 143 830 90 — — 43,190 UniSK(*1) 14,342 — 1,403 168 (213 ) — 15,700 SK Technology Innovation Company 43,997 — 184 (2,602 ) — — 41,579 SK MENA Investment B.V. 14,904 — — (861 ) — — 14,043 SK hynix Inc.(*1,2) 11,425,325 — 995,117 (22,481 ) (146,100 ) — 12,251,861 SK Latin America Investment S.A. 13,698 — (40 ) 272 — — 13,930 Grab Geo Holdings PTE. LTD.(*2) 31,269 — (425 ) (781 ) — — 30,063 SK South East Asia Investment Pte. Ltd. 250,034 119,770 11,250 (69,064 ) — — 311,990 Pacific Telecom Inc.(*1) 40,016 — 2,307 (1,621 ) (979 ) — 39,723 S.M. Culture & Contents Co., Ltd. 63,469 (162 ) (813 ) (246 ) — — 62,248 Contents Wavve Co., Ltd.(*2) 83,640 — (7,837 ) — — — 75,803 Hello Nature Co., Ltd.(*2,3) 13,620 9,980 (11,118 ) (79 ) (434 ) — 11,969 Digital Games International Pte. Ltd. — 8,810 (2,038 ) (323 ) — — 6,449 Invites Healthcare Co., Ltd. — 28,000 (2,645 ) 181 — — 25,536 Nam Incheon Broadcasting Co., Ltd. — — 676 — — 10,226 10,902 NANO-X — 28,515 (747 ) — 716 — 28,484 Home Choice Corp. — — 174 — — 3,411 3,585 Carrot General Insurance Co., Ltd. (*5) 6,459 31 (6,188 ) (33 ) 13,200 — 13,469 12CM JAPAN and others(*2,6) 58,884 (1,508 ) (2,134 ) (2,302 ) 12,810 — 65,750 13,336,856 193,579 1,018,286 (111,160 ) (138,557 ) 13,637 14,312,641 2020 (In millions of won) Beginning Acquisition Share of (losses) Other compre- income Other Business Ending Investments in joint ventures: Dogus Planet, Inc.(*2) ₩ 15,921 — 3,453 (4,303 ) — — 15,071 Finnq Co., Ltd. 22,880 — (9,538 ) — — — 13,342 NEXTGEN BROADCAST SERVICES CO, LLC(*2) 7,961 — (1,769 ) — (342 ) — 5,850 NEXTGEN ORCHESTRATION, LLC(*2) 1,646 — 57 — (103 ) — 1,600 Techmaker GmbH(*2) — 5,609 — — — — 5,609 48,408 5,609 (7,797 ) (4,303 ) (445 ) — 41,472 ₩ 13,385,264 199,188 1,010,489 (115,463 ) (139,002 ) 13,637 14,354,113 (*1) Dividends received from the associates are deducted from the carrying amount for the year ended December 31, 2020. (*2) Profit and loss related to investments in associates and joint ventures, which are transferred to the spin-off (*3) The Group recognized ₩ (*4) As the Group obtained significant influence, ₩ (*5) ₩ million of preferred shares of Carrot General Insurance Co., Ltd. were converted to common shares for the year ended December 31, 2020. (*6) The acquisitions for the year ended December 31, 2020 include ₩ ₩ ₩ ₩ ₩ KIF-Stonebridge ₩ (7) The Group discontinued the application of equity method to the following investees due to their carrying amounts being reduced to zero. The details of cumulative unrecognized equity method losses as of December 31, 2021 are as follows: (In millions of won) Unrecognized loss Unrecognized change in equity 2021 Cumulative loss 2021 Cumulative loss Wave City Development Co., Ltd. ₩ 6,143 8,543 — — Daehan Kanggun BcN Co., Ltd. and others (5,167 ) 5,780 — (124 ) ₩ 976 14,323 — (124 ) |