Korea Electric Power 6K Current report

Korea Electric Power (KEP) 6-KCurrent report (foreign)

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule13a-16 or15d-16

of the Securities Exchange Act of 1934

For the Month of September 2019

KOREA ELECTRIC POWER CORPORATION

(Translation of registrant’s name into English)

55Jeollyeok-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 Form20-F or Form40-F.

Form20-F ☒ Form40-F ☐

Indicate by check mark if the registrant is submitting the Form6-K in paper as permitted by RegulationS-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form6-K in paper as permitted by RegulationS-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 Rule12g3-2(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 Rule12g3-2(b):82- .

This Report of Foreign Private Issuer on Form6-K is deemed filed for all purposes under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.

QUARTERLY BUSINESS REPORT

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

THIS IS A SUMMARY IN ENGLISH OF THE QUARTERLY BUSINESS REPORT ORIGINALLY PREPARED IN KOREAN AND IS IN SUCH FORM AS REQUIRED BY THE FINANCIAL SERVICES COMMISSION OF KOREA.

IN THE TRANSLATION PROCESS, SOME PARTS OF THE REPORT WERE REFORMATTED, REARRANGED OR SUMMARIZED FOR THE CONVENIENCE OF READERS.NON-MATERIAL OR PREVIOUSLY DISCLOSED INFORMATION IS OMITTED OR ABRIDGED.

UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON A CONSOLIDATED BASIS IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ADOPTED FOR USE IN KOREA, ORK-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.

I. Company Overview

1. Name of the company: Korea Electric Power Corporation (KEPCO)

2. Information of the company

(Address) 55Jeollyeok-ro, Naju-si, Jeollanam-do, 58322, Korea

(Phone number)82-61-345-4213

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

3. Major businesses

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

•

development of electric power resources;

•

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

•

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

•

overseas business related to the businesses mentioned above;

•

investment or contributions related to the businesses mentioned above;

•

development and operation of certain real estate holdings; and

•

other businesses entrusted by the government.

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

4. Consolidated subsidiaries


				(As of June 30, 2019)


Domestic	Overseas	Total
39	75	114

5. Major changes in management

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

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

Issued share capital: Won 3,210 billion (Authorized capital: Won 6 trillion)

Total number of issued shares: 641,964,077

(Total number of shares authorized to for issuance: 1,200,000,000)

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

II. Business Overview

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


				(In billions of Won)


	January to June 2018				January to June 2019
	Sales		Operating profit		Sales		Operating profit
Electricity sales		28,821		-2,140		28,243		-2,152
Nuclear generation		3,924		223		4,593		801
Thermal generation		13,008		1,071		11,796		301
Others^(*)		1,613		161		1,631		181
Subtotal		47,366		-685		46,263		-869
Adjustment for related-party transactions		-18,323		-130		-17,944		-60

Total		29,043		-815		28,319		-929

•

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

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

2. Changes in unit prices of major products


				(In Won per kWh)


Business sector		Company	January to June 2018	January to June 2019
Electricity sold	Residential	KEPCO	107.09	105.90
	Commercial		125.83	126.73
	Educational		99.71	99.61
	Industrial		104.24	103.96
	Agricultural		47.95	48.05
	Street lighting		114.60	114.57
	Overnight usage		67.88	67.42

Electricity from nuclear generation	Nuclear Generation	KHNP	64.07	57.76

Electricity from thermal generation	Thermal generation	KOSEP	92.34	100.84
		KOMIPO	97.02	104.6
		KOWEPO	97.40	100.84
		KOSPO	99.10	106.87
		EWP	98.01	99.53

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


Company	Volume (GWh)		Expense (In billions of Won)
KHNP		78,202		4,507
KOSEP		27,905		2,561
KOMIPO		18,133		1,889
KOWEPO		18,953		1,906
KOSPO		23,923		2,557
EWP		24,572		2,442
Others		75,490		8,786

Total		267,178		24,648

•

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

4. Intellectual property as of June 30, 2019


	Patents				Utility models		Designs		Trademarks				Total
	Domestic		Overseas		Utility models		Designs		Domestic		Overseas		Total
KEPCO		2,236		243		60		76		103		47		2,765
Consolidated subsidiaries		4,078		487		737		132		288		26		5,748

Total		6,314		730		797		208		391		73		8,513

III. Financial Information

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

(In billions of Won)


Consolidated statements of comprehensive income							Consolidated statements of financial position
	January to June 2018		January to June 2019		Change (%)			December 31, 2018		June 30, 2019		Change (%)
Sales		29,043		28,319		-2.5	Total assets		185,249		192,691		4.0
Operating profit		-815		-929		-14.0	Total liabilities		114,156		122,900		7.7
Net income		-1,169		-1,173		-0.4	Total equity		71,093		69,791		-1.8

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

(In billions of Won)


Separate statements of comprehensive income							Separate statements of financial position
	January to June 2018		January to June 2019		Change (%)			December 31, 2018		June 30, 2019		Change (%)
Sales		28,821		28,243		-2.0	Total assets		107,486		108,338		0.8
Operating profit		-2,140		-2,152		-0.5	Total liabilities		53,404		55,865		4.6
Net income		-1,046		-1,524		-45.7	Total equity		54,082		52,473		-3.0

IV. Board of Directors (KEPCO Only)

1. The board of directors is required to consist of not more than 15 directors including the president. Under our Articles of Incorporation, there may not be more than seven standing directors including the president, and more than eightnon-standing directors. The number ofnon-standing directors must exceed the number of standing directors, including our president.

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

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

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

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 transitionnon-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


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 themid-to-long term financial management plan(2019-2023)	Approved as proposed	Resolution

	Approval of the safety management plan of 2019	Approved as proposed	Resolution

	Approval to consign contract administration of ICT Planning Department to Public Procurement Service	Approved as proposed	Resolution

June 28, 2019	Approval of amendment to the Electricity Usage Agreement	Approved as proposed	Resolution
	Approval of amendment to the electricity tariff system	Approved as proposed	Resolution

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

4. Attendance Status ofNon-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

Absent

For

Absent

For

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

For

Absent

For

Absent

For

February 22, 2019

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

For

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

For

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

For

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

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 transitionnon-permanent workers to permanent positions

For

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

For

April 12, 2019

Approval of personnel increase

For

Approval of amendment to the Rules on Employment

For

Approval of amendment to the Regulations for Employee Remuneration and Welfare

For

May 17, 2019

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

For

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

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

Approval of amendment to the Regulations Concerning the Board of Directors

For

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

For

Approval of the safety management plan of 2019

For

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

For

June 28, 2019

Approval of amendment to the Electricity Usage Agreement

—

Approval of amendment to the electricity tariff system

For

Attendance Rate

100%

85.7%

100%

85.7%

100%

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

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

Absent

Before

Appointment

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

Absent

For

Absent

February 22, 2019

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

For

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

For

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

For

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

For

Before

Appointment

Report on the annual management of commercial papers in 2018

Agenda for Report

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

Agenda for Report

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

Agenda for Report

Report on audit results for 2018

Agenda for Report

March 15, 2019

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

For

Absent

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

For

Absent

April 12, 2019

Approval of personnel increase

For

Approval of amendment to the Rules on Employment

For

Approval of amendment to the Regulations for Employee Remuneration and Welfare

For

May 17, 2019

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

For

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

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

Approval of amendment to the Regulations Concerning the Board of Directors

For

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

For

Approval of the safety management plan of 2019

For

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

For

June 28, 2019

Approval of amendment to the Electricity Usage Agreement

—

Approval of amendment to the electricity tariff system

For

Attendance Rate

85.7%

100%

85.7%

80%

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 fornon-audit service for subsidiaries by the independent auditor	Approved as proposed	Resolution
	Approval of investigation result on the agendas for the extraordinary general meeting of shareholders	Approved as proposed	Resolution
	Report on internal control over financial reporting for the fiscal year 2018	Accepted as reported	Report
	Report on the evaluation on internal control over financial reporting for the fiscal year 2018	Accepted as reported	Report
	Report on audit results for fiscal year 2018	Accepted as reported	Report
	Report on education plans for auditors in 2019	Accepted as reported	Report
March 15, 2019	Approval of investigation result on the agendas for the annual general meeting of shareholders	Approved as proposed	Resolution
	Approval of auditor’s report for the annual general meeting of shareholders	Approved as proposed	Resolution
	Approval of amendment to guidelines for internal audit regulations and guideline for practice for KEPCO executives and staff members	Approved as proposed	Resolution
	Approval of appointment of independent auditors of subsidiaries	Approved as proposed	Resolution
	Report on audit results by the independent auditor for the consolidated and separate financial statements for the fiscal year 2018	Accepted as reported	Report
April 12, 2019	Approval of appointment of independent auditors of subsidiaries	Approved as proposed	Resolution
	Prior approval fornon-audit service for subsidiaries by the independent auditor	Approved as proposed	Resolution
	Report on the Form20-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 fornon-audit service for subsidiaries by the independent auditor	Approved as proposed	Resolution
	Report on the new accounting policy according to the amendments of IFRS16 Leases	Accepted as reported	Report
	Report on audit results for the first quarter of 2019	Accepted as reported	Report
	Auditor’s review report for the first quarter of 2019	Accepted as reported	Report
June 21, 2019	Approval of amendment to the guidelines for immunity of proactive performance	Approved as proposed	Resolution
	Independent auditor’s report on the audit plans for the fiscal year 2019	Accepted as reported	Report

The audit department, organized under the supervision of the Audit Committee, conducts internal audit over the entire company and takes administrative measures as appropriate in accordance with relevant internal regulations. KEPCO’s District Divisions and Branch Offices also have separate audit teams which conduct internal inspections with respect to the relevant divisions or offices.

7. Attendance Status of the Audit Committee


Date	Agenda	Noh, Geum-Sun	Jung, Yeon-Gil	Lee, Jung-Hee
January 18, 2019	Approval of appointment of independent auditors of subsidiaries	For	For	For
February 22, 2019	Approval of amendments to the guidelines for the handling of whistleblowing report and protection of whistleblowers	For	For	For
	Approval of Audit plans for 2019	For	For	For
	Approval of amendment to the regulations on internal control over financial reporting	For	For	For
	Prior approval for non-audit service for subsidiaries by the independent auditor	For	For	For
	Approval of investigation result on the agendas for the extraordinary general meeting of shareholders	For	For	For
	Report on internal control over financial reporting for the fiscal year 2018	For	For	For
	Report on the evaluation on internal control over financial reporting for the fiscal year 2018	For	For	For
	Report on the audit result for fiscal year 2018	For	For	For
	Report on education plans for auditors in 2019	For	For	For
March 15, 2019	Approval of investigation result on the agendas for the annual general meeting of shareholders	For	For	For
	Approval of auditor’s report for the annual general meeting of shareholders	For	For	For
	Approval of amendments to guidelines for internal audit regulations and guideline for practice for KEPCO executives and staff members	For	For	For
	Approval of appointment of independent auditors of subsidiaries	For	For	For
	Report on the auditing results by the independent auditor for the consolidated and separate financial statements for the fiscal year 2018	For	For	For
April 12, 2019	Approval of appointment of independent auditors of subsidiaries	For	For	For
	Prior approval for non-audit service for subsidiaries by the independent auditor	For	For	For
	Report on the Form 20-F for the fiscal year 2018 to be filed with the U.S. Securities and Exchange Commission	For	For	For
	Auditor’s report for the fiscal year 2018 in accordance with U.S. accounting principles	For	For	For
May 17, 2019	Approval of amendment to the guidelines for disciplinary actions	For	For	For
	Prior approval for non-audit service for subsidiaries by the independent auditor	For	For	For
	Report on the new accounting policy according to the amendments of IFRS16 Leases	For	For	For
	Report on audit results for the first quarter of 2019	For	For	For
	Auditor’s review report for the first quarter of 2019	For	For	For
June 21, 2019	Approval of amendment to the guidelines for immunity of proactive performance	For	Absent	For
	Independent auditor’s report on the audit plans for the fiscal year 2019	For	Absent	For
Attendance Rate		100%	83.3%	100%

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
Public (Non-Koreans)	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 representsone-half of one share of our common stock.

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

1. Directors


				(In thousands of Won)


Type		Number of directors	Total remuneration		Average remuneration per person		Remarks
Standing director		6		668,715		111,452	Excluding the members of Audit Committee
Non-standing director		6		90,000		15,000	Excluding the members of Audit Committee
Member of Audit Committee	Standing director	1		94,714		94,714
Member of Audit Committee	Non-standing director	2		30,000		15,000

Total		15		883,429		58,895

2. Employees

(In thousands of Won)


Type	Number of employees						Average continuous service year		Total salaries		Average salaries per person
Type	Regular		Non- regular		Total		Average continuous service year		Total salaries		Average salaries per person
Male		17,708		109		17,817		16.6		780,206,836		43,790
Female		4,425		80		4,505		13.5		158,155,978		35,107

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

VII. Other Information Necessary for the Protection of Investors

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


Type	Agenda	Results
Extraordinary General Meeting held on March 4, 2019	Election of a Standing Director	Approved as proposed

Annual General Meeting held on March 22, 2019	Approval of financial statements for the fiscal year 2018	Approved as proposed
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 June 30, 2019


				(In billions of Won)


Type	Number of lawsuits		Amount claimed
Lawsuits where KEPCO and its subsidiaries are engaged as the defendants		598		606
Lawsuits where KEPCO and its subsidiaries are engaged as the plaintiffs		206		748

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


By:		/s/ Kim, Kab-soon
Name:		Kim, Kab-soon
Title:		Vice President

Date: September 11, 2019

KOREA ELECTRIC POWER CORPORATION

AND ITS SUBSIDIARIES

Consolidated Interim Financial Statements

June 30, 2019

(Unaudited)

(With Independent Auditor’s Review Report Thereon)

INDEX TO FINANCIAL STATEMENTS


		Page
Independent Auditor’s Review Report		3

Consolidated Interim Statements of Financial Position		4

Consolidated Interim Statements of Comprehensive Income (Loss)		6

Consolidated Interim Statements of Changes in Equity		8

Consolidated Interim Statements of Cash Flows		10

Notes to the Consolidated Interim Financial Statements		12

LOGO

Independent Auditor’s Review Report

Based on a report originally issued in Korean

The Board of Directors and Shareholders

Korea Electric Power Corporation:

Report on Review of Consolidated Interim Financial Statements

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

Management’s Responsibility for the Consolidated Interim Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with Korean International Financial Reporting Standards (“KIFRS”) 1034 ‘Interim Financial Reporting’ and for such internal control as management determines is necessary to enable the preparation of interim financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Review Responsibility

Our responsibility is to issue a report on these consolidated interim financial statements based on our review. We conducted our review in accordance with the Review Standards for Quarterly and Semiannual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the Republic of Korea (“KGAAS”) and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Conclusion

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

Other Matters

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

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

August 14, 2019

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Financial Position

As of June 30, 2019 and December 31, 2018

(Unaudited)


In millions of won	*Note*			June 30, 2019		December 31, 2018
Assets
Current assets
Cash and cash equivalents		5,6,7,45	W		1,308,117		1,358,345
Current financial assets, net		5,6,9,11,12,13,45			3,746,955		2,359,895
Trade and other receivables, net		5,8,15,21,45,46,47			7,072,423		7,793,592
Inventories, net		14			6,752,920		7,188,253
Income tax refund receivables					25,964		143,214
Currentnon-financial assets		16			1,204,765		878,888
Assetsheld-for-sale		17,42			5,375		22,881

Total current assets					20,116,519		19,745,068

Non-current assets
Non-current financial assets, net		5,6,9,10,11,12,13,45			2,349,918		2,113,613
Non-current trade and other receivables, net		5,8,15,45,46,47			1,754,704		1,819,845
Property, plant and equipment, net		19,25,28,49			159,165,892		152,743,194
Investment properties, net		20,28			179,337		159,559
Goodwill		17			2,582		2,582
Intangible assets other than goodwill, net		22,28,46			1,460,319		1,225,942
Investments in associates		4,18			4,102,360		4,064,820
Investments in joint ventures		4,18			1,878,086		1,813,525
Deferred tax assets					1,336,034		1,233,761
Non-currentnon-financial assets		16			345,012		327,152

Totalnon-current assets					172,574,244		165,503,993

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

(Continued)

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Financial Position, Continued

As of June 30, 2019 and December 31, 2018

(Unaudited)


In millions of won	*Note*			June 30, 2019			December 31, 2018
Liabilities
Current liabilities
Trade and other payables, net		5,23,25,45,47	W		5,767,818			6,405,395
Current financial liabilities, net		5,12,24,45,47			10,236,990			7,981,879
Income tax payables					411,449			285,420
Currentnon-financial liabilities		21,29,30			5,801,348			5,574,041
Current provisions		27,45			1,787,299			1,594,798

Total current liabilities					24,004,904			21,841,533

Non-current liabilities
Non-current trade and other payables, net		5,23,25,45,47			7,091,807			2,941,696
Non-current financial liabilities, net		5,12,24,45,47			55,462,245			53,364,911
Non-currentnon-financial liabilities		29,30			8,362,767			8,160,033
Employee benefits liabilities, net		26,45			2,138,424			1,645,069
Deferred tax liabilities					8,916,814			9,617,309
Non-current provisions		27,45			16,922,566			16,585,748

Totalnon-current liabilities					98,894,623			92,314,766

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

Equity

Contributed capital		1,31,45
Share capital			W		3,209,820			3,209,820
Share premium					843,758			843,758

					4,053,578			4,053,578

Retained earnings		32
Legal reserves					1,604,910			1,604,910
Voluntary reserves					34,785,425			35,906,267
Unappropriated retained earnings					13,717,315			14,007,942

					50,107,650			51,519,119

Other components of equity		34
Other capital surplus					1,226,825			1,234,825
Accumulated other comprehensive loss					(263,933	)		(358,570	)
Other equity					13,294,973			13,294,973

					14,257,865			14,171,228

Equity attributable to owners of the controlling company					68,419,093			69,743,925
Non-controlling interests		17, 33			1,372,143			1,348,837

Total Equity			W		69,791,236			71,092,762

Total Liabilities and Equity			W		192,690,763			185,249,061

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income (Loss)

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

(Unaudited)


In millions of won, except per share information				June 30, 2019						June 30, 2018
	*Note*			Three-month period ended			Six-month period ended			Three-month period ended			Six-month period ended
Sales		4,35,45,47
Sales of goods			W		12,551,869			27,305,880			12,654,829			27,712,806
Sales of services					85,538			180,417			73,116			147,282
Sales of construction services		21			287,661			543,715			424,433			874,594
Revenue related to transfer of assets from customers					145,906			289,366			184,780			308,521

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

Cost of sales		14,26,43,47
Cost of sales of goods					(12,293,502	)		(27,184,671	)		(12,877,486	)		(27,565,223	)
Cost of sales of services					(161,500	)		(285,223	)		(121,697	)		(234,089	)
Cost of sales of construction services					(257,356	)		(494,372	)		(380,634	)		(804,471	)

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

Gross profit (loss)					358,616			355,112			(42,659	)		439,420
Selling and administrative expenses		26,36,43,47			(657,275	)		(1,283,651	)		(644,459	)		(1,254,151	)

Operating loss		4			(298,659	)		(928,539	)		(687,118	)		(814,731	)
Othernon-operating income		37			95,454			171,157			93,826			178,652
Othernon-operating expense		37			(35,795	)		(51,138	)		(80,619	)		(97,521	)
Other gains (losses), net		38			(58,392	)		(68,676	)		(685,328	)		(631,273	)
Finance income		5,12,39			348,350			649,525			837,163			568,182
Finance expenses		5,12,40			(816,592	)		(1,514,968	)		(1,249,024	)		(1,437,685	)
Profit (loss) related to associates, joint ventures and subsidiaries		4,18
Share in profit of associates and joint ventures					61,152			266,884			91,048			352,629
Gain on disposal of investments in associates and joint ventures					2,863			9,064			—			—
Gain on disposal of investments in subsidiaries					—			—			3			3
Share in loss of associates and joint ventures					(48,517	)		(79,060	)		(19,952	)		(78,502	)
Loss on disposal of investments in associates and joint ventures					—			(2	)		—			(2,184	)

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

Loss before income tax					(750,136	)		(1,545,753	)		(1,700,001	)		(1,962,430	)
Income tax expense (benefit)		41			(337,958	)		(372,419	)		(781,410	)		(793,372	)

Loss for the period			W		(412,178	)		(1,173,334	)		(918,591	)		(1,169,058	)

(Continued)

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income (Loss), Continued

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

(Unaudited)


In millions of won, except per share information				June 30, 2019						June 30, 2018
	*Note*			Three-month period ended			Six-month period ended			Three-month period ended			Six-month period ended
Other comprehensive income (loss)		5,12,26,32,34
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit liability, net of tax		26,32	W		(88,261	)		(186,023	)		(48,458	)		(56,542	)
Share in other comprehensive income (loss) of associates and joint ventures, net of tax		34			(654	)		(448	)		3,499			8,909
Net change in fair value of equity investments at fair value through other comprehensive loss		34			(19,334	)		(463	)		(25,626	)		(6,544	)
Items that are or may be reclassified subsequently to profit or loss:
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		5,12,34			9,293			14,556			(14,040	)		(34,788	)
Foreign currency translation of foreign operations, net of tax		34			36,041			60,278			53,764			36,325
Share in other comprehensive income of associates and joint ventures, net of tax		34			8,424			35,704			43,680			93,959

Other comprehensive income (loss), net of tax					(54,491	)		(76,396	)		12,819			41,319

Total comprehensive income (loss) for the period			W		(466,669	)		(1,249,730	)		(905,772	)		(1,127,739	)

Profit (loss) attributable to:
Owners of the controlling company		44	W		(447,546	)		(1,235,344	)		(949,219	)		(1,226,489	)
Non-controlling interests					35,368			62,010			30,628			57,431

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

Total comprehensive income (loss) attributable to:
Owners of the controlling company			W		(504,129	)		(1,316,832	)		(950,697	)		(1,196,851	)
Non-controlling interests					37,460			67,102			44,925			69,112

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

Loss per share (in won)		44
Basic and diluted loss per share			W		(697	)		(1,924	)		(1,479	)		(1,911	)

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity

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

(Unaudited)


In millions of won		Equity attributable to owners of the controlling company											Non- controlling interests
		Contributed capital		Retained earnings			Other components of equity			Subtotal			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
Net profit (loss) for the period			—		(1,226,489	)		—			(1,226,489	)		57,431			(1,169,058	)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit liability, net of tax			—		(51,263	)		—			(51,263	)		(5,279	)		(56,542	)
Share in other comprehensive income of associates and joint ventures, net of tax			—		8,900			—			8,900			9			8,909
Net change in fair value of equity investments at fair value through other comprehensive loss			—		—			(6,544	)		(6,544	)		—			(6,544	)
Items that are or may be reclassified subsequently to profit or loss:
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—		—			(35,032	)		(35,032	)		244			(34,788	)
Foreign currency translation of foreign operations, net of tax			—		—			19,616			19,616			16,709			36,325
Share in other comprehensive income (loss) of associates and joint ventures, net of tax			—		—			93,961			93,961			(2	)		93,959
Transactions with owners of the Company, recognized directly in equity
Dividends paid			—		(507,152	)		—			(507,152	)		(49,637	)		(556,789	)
Issuance of shares of capital by subsidiaries and others			—		—			22			22			9,825			9,847
Changes in consolidation scope			—		—			—			—			46			46
Dividends paid (hybrid securities)			—		—			—			—			(6,692	)		(6,692	)

Balance at June 30, 2018	W		4,053,578		51,666,482			14,252,481			69,972,541			1,305,850			71,278,391

(Continued)

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity, Continued

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

(Unaudited)


In millions of won		Equity attributable to owners of the controlling company											Non- controlling interests
		Contributed capital		Retained earnings			Other components of equity			Subtotal			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			—		(1,235,344	)		—			(1,235,344	)		62,010			(1,173,334	)
Items that will not be reclassified subsequently to profit or loss:
Remeasurement of defined benefit liability, net of tax			—		(174,173	)		—			(174,173	)		(11,850	)		(186,023	)
Share in other comprehensive loss of associates and joint ventures, net of tax			—		(448	)		—			(448	)		—			(448	)
Net change in fair value of equity investments at fair value through other comprehensive loss			—		—			(463	)		(463	)		—			(463	)
Items that are or may be reclassified subsequently to profit or loss:
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—		—			14,269			14,269			287			14,556
Foreign currency translation of foreign operations, net of tax			—		—			43,626			43,626			16,652			60,278
Share in other comprehensive income of associates and joint ventures, net of tax			—		—			35,701			35,701			3			35,704
Transactions with owners of the Company, recognized directly in equity
Dividends paid			—		—			—			—			(70,152	)		(70,152	)
Issuance of shares of capital by subsidiaries and others			—		—			(7,859	)		(7,859	)		10,358			2,499
Transactions between consolidated entities			—		—			(141	)		(141	)		3,054			2,913
Changes in consolidation scope			—		—			—			—			19,636			19,636
Dividends paid (hybrid bond)			—		—			—			—			(6,692	)		(6,692	)
Others			—		(1,504	)		1,504			—			—			—

Balance at June 30, 2019	W		4,053,578		50,107,650			14,257,865			68,419,093			1,372,143			69,791,236

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Cash Flows

For thesix-month periods ended June 30, 2019 and 2018

(Unaudited)


In millions of won		June 30, 2019			June 30, 2018
Cash flows from operating activities
Loss for the period	W		(1,173,334	)		(1,169,058	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Income tax expense (benefit)			(372,419	)		(793,372	)
Depreciation			5,307,622			4,988,819
Amortization			82,395			59,688
Employee benefit expense			193,062			173,048
Bad debt expense			20,460			29,521
Interest expense			1,016,529			927,308
Loss on sale of financial assets			261			—
Loss on disposal of property, plant and equipment			26,747			13,400
Loss on abandonment of property, plant, and equipment			184,205			233,856
Loss on impairment of property, plant, and equipment			29,685			701,317
Loss on disposal of intangible assets			61,696			6
Increase to provisions			457,678			542,417
Loss on foreign currency translation, net			388,954			369,673
Gain on valuation of financial assets at fair value through profit or loss			(8,391	)		—
Loss on valuation of financial assets at fair value through profit or loss			296			3,410
Valuation and transaction loss (gain) on derivative instruments, net			(359,945	)		(300,723	)
Share in income of associates and joint ventures, net			(187,824	)		(274,127	)
Gain on sale of financial assets			(964	)		(672	)
Gain on disposal of property, plant and equipment			(29,187	)		(26,363	)
Gain on disposal of intangible assets			(97	)		(3	)
Gain on disposal of associates and joint ventures			(9,064	)		—
Loss on disposal of associates and joint ventures			2			2,184
Gain on disposal of subsidiaries			—			(3	)
Interest income			(124,579	)		(108,116	)
Dividend income			(3,740	)		(11,811	)
Others, net			4,769			9,959

			6,678,151			6,539,416

Changes in working capital:
Trade receivables			881,127			933,188
Non-trade receivables			377,035			321,307
Accrued income			208,177			150,648
Other receivables			38,972			(4,090	)
Other current assets			(245,379	)		(623,356	)
Inventories			(275,220	)		(789,441	)
Othernon-current assets			160,292			(95,683	)
Trade payables			(1,430,773	)		(468,209	)
Non-trade payables			122,495			16,023
Accrued expenses			(444,200	)		(144,505	)
Other payables			(320	)		—
Other current liabilities			252,250			302,413
Othernon-current liabilities			246,205			147,116
Investments in associates and joint ventures (dividends received)			166,267			99,744
Provisions			(836,864	)		(616,197	)
Payments of employee benefit obligations			(29,153	)		(41,533	)
Plan assets			(270	)		(234	)

			(809,359	)		(812,809	)

(Continued)

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Consolidated Interim Statements of Cash Flows, Continued

For thesix-month periods ended June 30, 2019 and 2018

(Unaudited)


In millions of won		June 30, 2019			June 30, 2018
Cash generated from operating activities	W		4,695,458			4,557,549
Dividends received (financial assets at fair value through other comprehensive income)			3,740			10,753
Interest paid			(1,001,541	)		(916,445	)
Interest received			74,784			86,117
Income taxes paid			(110,575	)		(313,566	)

Net cash provided by operating activities			3,661,866			3,424,408

Cash flows from investing activities
Acquisition of associates and joint ventures			(58,733	)		(173,329	)
Proceeds from disposals of property, plant and equipment			189,701			45,100
Acquisition of property, plant and equipment			(5,973,013	)		(6,627,788	)
Proceeds from disposals of intangible assets			261			3
Acquisition of intangible assets			(156,095	)		(46,838	)
Proceeds from disposals of financial assets			1,303,298			1,039,063
Acquisition of financial assets			(2,618,226	)		(2,234,051	)
Increase in loans			(138,622	)		(119,495	)
Collection of loans			80,497			58,879
Increase in deposits			(130,139	)		(312,832	)
Decrease in deposits			132,868			173,221
Proceeds from disposals of assetsheld-for-sale			779			17,316
Receipt of government grants			7,435			15,007
Use of government grants			(18	)		—
Net cash inflow (outflow) from changes in consolidation scope			(2,106	)		31
Other cash outflow from investing activities, net			(64,906	)		(22,497	)

Net cash used in investing activities			(7,427,019	)		(8,188,210	)

Cash flows from financing activities
Proceeds from short-term borrowings, net			849,287			2,959,867
Proceeds from long-term borrowings and debt securities			6,999,686			6,581,460
Repayment of long-term borrowings and debt securities			(3,827,361	)		(4,151,914	)
Payment of finance lease liabilities			(264,809	)		(67,687	)
Settlement of derivative instruments, net			36,252			199
Change innon-controlling interest			5,203			9,886
Dividends paid (hybrid bond)			(6,692	)		(8,829	)
Dividends paid			(70,955	)		(556,789	)
Other cash outflow from financing activities, net			—			(87	)

Net cash provided by financing activities			3,720,611			4,766,106

Net increase (decrease) in cash and cash equivalents before effect of exchange rate fluctuations			(44,542	)		2,304
Effect of exchange rate fluctuations on cash held			(5,686	)		17,621

Net increase (decrease) in cash and cash equivalents			(50,228	)		19,925
Cash and cash equivalents at January 1			1,358,345			2,369,739

Cash and cash equivalents at June 30	W		1,308,117			2,389,664

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements

For thesix-month periods ended June 30, 2019 and 2018

(Unaudited)

1.	Reporting Entity (Description of the controlling company)

Korea Electric Power Corporation (“KEPCO”), the controlling company as defined in Korean International Financial Reporting Standards (“KIFRS”) 1110 ‘Consolidated Financial Statements’, was incorporated on January 1, 1982 in accordance with the Korea Electric Power Corporation Act (the “KEPCO Act”) to engage in the generation, transmission and distribution of electricity and development of electric power resources in the Republic of Korea. KEPCO also provides power plant construction services. KEPCO’s stock was listed on the Korea Stock Exchange on August 10, 1989 and KEPCO listed its Depository Receipts (DR) on the New York Stock Exchange on October 27, 1994. KEPCO’s head office is located in Naju,Jeollanam-do.

As of June 30, 2019, KEPCO’s share capital amounts toW3,209,820 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.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

2.	Basis of Preparation, Continued

(4)

Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with KIFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

The key assumptions concerning the future, and other key sources of estimation uncertainty at the end of the reporting period, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are as follows:

(i)

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

The Group reviews the estimated useful lives of property, plant and equipment at the end of each annual reporting period. Management’s assumptions could affect the determination of estimated economic useful lives.

The Group records the fair value of estimated decommissioning costs as a liability in the period in which the Group incurs a legal obligation associated with the retirement of long-lived assets that result from acquisition, construction, development and/or normal use of the assets. The Group is required to record a liability for the dismantling (demolition) of nuclear power plants and disposal of spent fuel and low and intermediate radioactive wastes. The measurement of such liability is subject to change based on change in estimated cash flow, inflation rate, discount rate, and expected timing of decommissioning.

(ii)

Deferred tax

The Group recognizes deferred tax assets and liabilities based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities of each consolidated taxpaying entity. However, the amount of deferred tax assets may be different if the Group does not realize estimated future taxable income during the carryforward periods.

(iii)

Valuations of financial instruments at fair values

The Group’s accounting policies and disclosures require the measurement of fair values, for both financial andnon-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).

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

2.	Basis of Preparation, Continued

(4)

Use of estimates and judgments, continued

(v)

Unbilled revenue

Energy delivered but not metered nor billed is estimated at the reporting date based on consumption statistics and selling price estimates. Determination of the unbilled revenues at the end of the reporting period is sensitive to the estimated consumptions and prices based on statistics. Unbilled revenue recognized as of June 30, 2019 and 2018 areW1,189,843 million andW1,213,807 million, respectively.

(vi)

Construction contracts

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

(5)

Changes in accounting policies

(i)

KIFRS 1116 ‘Leases’

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

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

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

2.	Basis of Preparation, Continued

(5)

Changes in accounting policies, continued

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


In millions of won		Original carrying amount under KIFRS 1017		Adjustment			New carrying amount under KIFRS 1116
Assets
Current assets
Cash and cash equivalents	W		1,358,345		—			1,358,345
Current financial assets, net			2,359,895		—			2,359,895
Trade and other receivables, net			7,793,592		—			7,793,592
Inventories, net			7,188,253		—			7,188,253
Income tax refund receivables			143,214		—			143,214
Currentnon-financial assets			878,888		(5,098	)		873,790
Assetsheld-for-sale			22,881		—			22,881

Total current assets			19,745,068		(5,098	)		19,739,970

Non-current assets
Non-current financial assets, net			2,113,613		—			2,113,613
Non-current trade and other receivables, net			1,819,845		(9	)		1,819,836
Property, plant and equipment, net			152,743,194		4,633,091			157,376,285
Investment properties, net			159,559		—			159,559
Goodwill			2,582		—			2,582
Intangible assets other than goodwill, net			1,225,942		—			1,225,942
Investments in associates			4,064,820		—			4,064,820
Investments in joint ventures			1,813,525		—			1,813,525
Deferred tax assets			1,233,761		—			1,233,761
Non-currentnon-financial assets			327,152		(1,327	)		325,825

Totalnon-current assets			165,503,993		4,631,755			170,135,748

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

2.	Basis of Preparation, Continued

(5)

Changes in accounting policies, continued


In millions of won		Original carrying amount under KIFRS 1017		Adjustment		New carrying amount under KIFRS 1116
Liabilities
Current liabilities
Trade and other payables, net	W		6,405,395		513,069		6,918,464
Current financial liabilities, net			7,981,879		—		7,981,879
Income tax payables			285,420		—		285,420
Currentnon-financial liabilities			5,574,041		—		5,574,041
Current provisions			1,594,798		—		1,594,798

Total current liabilities			21,841,533		513,069		22,354,602

Non-current liabilities
Non-current trade and other payables, net			2,941,696		4,113,588		7,055,284
Non-current financial liabilities, net			53,364,911		—		53,364,911
Non-currentnon-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

Totalnon-current liabilities			92,314,766		4,113,588		96,428,354

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

Equity
Contributed capital	W		4,053,578		—		4,053,578
Retained earnings			51,519,119		—		51,519,119
Other components of equity			14,171,228		—		14,171,228

Equity attributable to owners of the controlling company			69,743,925		—		69,743,925
Non-controlling interests			1,348,837		—		1,348,837

Total Equity	W		71,092,762		—		71,092,762

Total Liabilities and Equity	W		185,249,061		4,626,657		189,875,718

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

2.	Basis of Preparation, Continued

(5)

Changes in accounting policies, continued

Before adoption of KIFRS 1116, the Group, as a lessee, classified a lease contract as a finance lease if it transferred substantially all of the risks and rewards incidental to ownership of the leased asset to the Group; otherwise as an operating lease. Upon adoption of KIFRS 1116, the Group applied a single recognition and measurement approach for all leases, except for short-term leases and leases oflow-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., theright-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 recognizedright-of-use assets and lease liabilities for those leases previously classified as operating leases, except for short-term leases and leases oflow-value assets. Theright-of-use assets were recognized based on the amount equal to the lease liabilities, adjusted for any related prepaid and accrued lease payments previously recognized. Lease liabilities were recognized based on the present value of the remaining lease payments, discounted using the incremental borrowing rate at the date of initial application.

The Group also applied the available practical expedients wherein it:

•

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

•

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

•

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

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

(ii)

Summary of new accounting policies

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

•

Right-of-use assets

The Group recognizesright-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 anyre-measurement of lease liabilities. The cost ofright-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 recognizedright-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 (includingin-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.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

2.	Basis of Preparation, Continued

(5)

Changes in accounting policies, continued

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

•

Short-term leases and leases oflow-value assets

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

Book value and changes in book value ofright-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.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

2.	Basis of Preparation, Continued

(5)

Changes in accounting policies, continued

Amendments to KIFRS 1019 : Employee Benefits

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

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

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

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

2.	Basis of Preparation, Continued

(5)

Changes in accounting policies, continued

Amendments to KIFRS 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).

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

4.	Segment, Geographic and Other Information

(1)

Segment determination and explanation of the measurements

The Group’s operating segments are its business components that generate discrete financial information that is reported to and regularly reviewed by the Group’s the chief operating decision maker, the Chief Executive Officer, for the purpose of resource allocation and assessment of segment performance. The Group’s reportable segments are ‘Transmission and distribution’, ‘Electric power generation (Nuclear)’, ‘Electric power generation(Non-nuclear)’, ‘Plant maintenance & engineering service’ and ‘Others’; others mainly represent the business unit that manages the Group’s foreign operations.

Segment operating profit (loss) is determined the same way that consolidated operating profit is determined under KIFRS without any adjustment for corporate allocations. The accounting policies used by each segment are consistent with the accounting policies used in the preparation of the consolidated financial statements. Segment assets and liabilities are determined based on separate financial statements of the entities instead of on a consolidated basis. There are various transactions between the reportable segments, including sales of property, plant and equipment and so on, that are conducted on an arms-length basis at market prices that would be applicable to an independent third-party. For subsidiaries which are in a different segment from that of its immediate parent company, their carrying amount in separate financial statements is eliminated in the consolidating adjustments in the tables below. In addition, consolidation adjustments in the table below include adjustments of the amount of investment in associates and joint ventures from the cost basis amount reflected in segment assets to that determined using equity method in the consolidated financial statements.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

4.	Segment, Geographic and Other Information, Continued

(2)

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


In millions of won
June 30, 2019
														Revenue																													Profit (loss) related
		Total												from											Depreciation																		associates, joint
		segment						Intersegment						external					Operating						and						Interest						Interest						ventures and
Segment		revenue						revenue						customers					Profit (loss)						amortization						income						expense						subsidiaries
		Three -						Three -						Three -					Three -						Three -						Three -						Three -						Three -
		month			Six-month			month			Six-month			month			Six-month		month			Six-month			month			Six-month			month			Six-month			month			Six-month			month		Six-month
		period			period			period			period			period			period		period			period			period			period			period			period			period			period			period		period
		ended			ended			ended			ended			ended			ended		ended			ended			ended			ended			ended			ended			ended			ended			ended		ended
Transmission and distribution	W		13,124,910			28,242,598			349,872			731,943			12,775,038			27,510,656		259,763			(2,151,618	)		920,147			1,803,721			17,026			36,117			195,859			381,867			7,031		152,100
Electric power generation (Nuclear)			2,036,486			4,593,449			2,056,634			4,590,868			(20,148	)		2,581		145,771			801,533			814,412			1,588,427			8,721			17,623			128,006			255,753			748		2,279
Electric power generation(Non-nuclear)			4,438,608			11,796,262			4,285,900			11,344,452			152,708			451,810		(801,897	)		301,023			976,666			1,941,134			6,220			11,560			165,046			331,323			6,456		43,081
Plant maintenance & engineering service			663,006			1,162,488			575,005			1,001,391			88,001			161,097		94,337			130,833			33,224			64,021			3,248			7,013			620			2,055			1,263		(574	)
Others			247,785			468,139			172,410			274,905			75,375			193,234		18,556			49,890			18,029			39,171			35,254			66,623			31,557			61,039			—		—
Consolidation adjustments			(7,439,821	)		(17,943,558	)		(7,439,821	)		(17,943,559	)		—			—		(15,189	)		(60,200	)		(28,534	)		(46,457	)		(7,194	)		(14,357	)		(7,936	)		(15,508	)		—		—

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

In millions of won
June 30, 2018
														Revenue																													Profit (loss) related
		Total												from											Depreciation																		associates, joint
		segment						Intersegment						external					Operating						and						Interest						Interest						ventures and
Segment		revenue						revenue						customers					Profit (loss)						amortization						income						expense						subsidiaries
		Three -						Three -						Three -					Three -						Three -						Three -						Three -						Three -
		month			Six-month			month			Six-month			month			Six-month		month			Six-month			month			Six-month			month			Six-month			month			Six-month			month		Six-month
		period			period			period			period			period			period		period			period			period			period			period			period			period			period			period		period
		ended			ended			ended			ended			ended			ended		ended			ended			ended			ended			ended			ended			ended			ended			ended		ended
Transmission and distribution	W		13,257,725			28,821,467			356,601			727,644			12,901,124			28,093,823		(698,162	)		(2,140,285	)		931,060			1,811,473			14,437			29,650			176,734			351,535			44,335		244,358
Electric power generation (Nuclear)			1,961,723			3,924,029			1,921,192			3,874,080			40,531			49,949		41,695			223,572			792,220			1,555,841			7,479			9,973			125,688			251,376			1,437		2,514
Electric power generation(Non-nuclear)			5,282,142			13,007,834			5,097,157			12,528,227			184,985			479,607		(158,274	)		1,071,356			810,040			1,624,628			8,708			14,519			142,062			282,671			23,698		23,628
Plant maintenance & engineering service			613,507			1,138,037			521,085			974,725			92,422			163,312		72,449			105,228			28,703			57,136			2,974			5,825			694			1,956			1,629		1,446
Others			215,150			475,234			97,054			218,722			118,096			256,512		18,634			55,360			14,246			27,448			23,261			62,320			28,411			54,423			—		—
Consolidation adjustments			(7,993,089	)		(18,323,398	)		(7,993,089	)		(18,323,398	)		—			—		36,540			(129,962	)		(13,909	)		(28,019	)		579			(14,171	)		(8,664	)		(14,653	)		—		—

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

4.	Segment, Geographic and Other Information, Continued

(3)

Information related to segment assets and segment liabilities as of and for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won
June 30, 2019
Segment		Segment assets			Investments in associates and joint ventures		Acquisition of non- current assets			Segment liabilities
Transmission and distribution	W		108,338,321			3,780,079		3,040,044			55,865,483
Electric power generation (Nuclear)			56,977,044			57,875		996,253			31,238,815
Electric power generation(Non-nuclear)			53,484,741			2,094,501		2,034,402			31,733,828
Plant maintenance & engineering service			3,299,177			47,991		34,081			1,109,421
Others			8,188,096			—		155,848			3,340,702
Consolidation adjustments			(37,596,616	)		—		(131,520	)		(388,722	)

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


In millions of won
December 31, 2018
Segment		Segment assets			Investments in associates and joint ventures		Acquisitionof 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 andnon-current assets is determined by the location of the customers and the assets:


In millions of won		Revenue from external customers									*Non-current assets (2)**
		June 30, 2019					June 30, 2018				June 30, 2019		December 31, 2018
Geographical unit		Three- month period ended			Six- month period ended		Three- month period ended		Six- month period ended		June 30, 2019		December 31, 2018
Domestic	W		12,702,461			27,591,897		12,827,478		27,958,871		163,686,863		157,037,428
Overseas (*1)			368,513	��		727,481		509,680		1,084,332		3,446,725		3,299,346

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

(*1)	Middle East and other Asian countries make up the majority of overseas revenue andnon-current assets. Since the overseas revenue ornon-current assets attributable to particular countries are not material, they are not disclosed individually.

(*2)	Amounts exclude financial assets and deferred tax assets.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

4.	Segment, Geographic and Other Information, Continued

(5)

Information on significant customers

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

5.	Classification of Financial Instruments

(1)

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


In millions of won		June 30, 2019
		Financial assets at fair value through profit or loss		Financial assets at fair value through other comprehensive income		Financial assets at amortized cost		Derivative assets (applying hedge accounting)		Total
Current assets
Cash and cash equivalents	W		—		—		1,308,117		—		1,308,117
Current financial assets
Current financial assets at fair value through profit or loss			1,522,187		—		—		—		1,522,187
Current financial assets at amortized costs			—		—		11,010		—		11,010
Current derivative assets			30,237		—		—		56,555		86,792
Other financial assets			—		—		2,126,966		—		2,126,966
Trade and other receivables			—		—		7,072,423		—		7,072,423

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

Non-current assets
Non-current financial assets
Non-current financial assets at fair value through profit or loss			678,308		—		—		��		678,308
Non-current financial assets at fair value through other comprehensive income			—		403,816		—		—		403,816
Non-current financial assets at amortized costs			—		—		1,340		—		1,340
Non-current derivative assets			119,314		—		—		131,775		251,089
Other financial assets			—		—		1,015,365		—		1,015,365
Trade and other receivables			—		—		1,754,704		—		1,754,704

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

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

5.	Classification of Financial Instruments, Continued

(1)

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


In millions of won		December 31, 2018
		Financial assets at fair value through profit or loss		Financial assets at fair value through other comprehensive income		Financial assets at amortized cost		Derivative assets (applying hedge accounting)		Total
Current assets
Cash and cash equivalents	W		—		—		1,358,345		—		1,358,345
Current financial assets
Current financial assets at fair value through profit or loss			313,893		—		—		—		313,893
Current financial assets at amortized costs			—		—		11,956		—		11,956
Current derivative assets			13,936		—		—		28,171		42,107
Other financial assets			—		—		1,991,939		—		1,991,939
Trade and other receivables			—		—		7,793,592		—		7,793,592

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

Non-current assets
Non-current financial assets
Non-current financial assets at fair value through profit or loss			607,042		—		—		—		607,042
Non-current financial assets at fair value through other comprehensive income			—		399,495		—		—		399,495
Non-current financial assets at amortized costs			—		—		2,086		—		2,086
Non-current derivative assets			23,695		—		—		36,533		60,228
Other financial assets			—		—		1,044,762		—		1,044,762
Trade and other receivables			—		—		1,819,845		—		1,819,845

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

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

5.	Classification of Financial Instruments, Continued

(2)

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


In millions of won		June 30, 2019
		Financial liabilities at fair value through profit or loss			Financial liabilities recognized at amortized cost		Derivative liabilities (applying hedge accounting)		Total
Current liabilities
Borrowings	W		—			2,027,795		—		2,027,795
Debt securities			—			8,195,854		—		8,195,854
Derivative liabilities			6,363			—		6,978		13,341
Trade and other payables			—			5,767,818		—		5,767,818

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

Non-current liabilities
Borrowings			—			3,479,909		—		3,479,909
Debt securities			—			51,818,400		—		51,818,400
Derivative liabilities			34,354			—		129,582		163,936
Trade and other payables			—			7,091,807		—		7,091,807

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

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


In millions of won		December 31, 2018
		Financial liabilities at fair value through profit or loss			Financial liabilities recognized at amortized cost		Derivative liabilities (applying hedge accounting)		Total
Current liabilities
Borrowings	W		—			1,172,624		—		1,172,624
Debt securities			—			6,788,824		—		6,788,824
Derivative liabilities			13,706			—		6,725		20,431
Trade and other payables			—			6,405,395		—		6,405,395

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

Non-current liabilities
Borrowings			—			3,258,015		—		3,258,015
Debt securities			—			49,815,164		—		49,815,164
Derivative liabilities			85,304			—		206,428		291,732
Trade and other payables			—			2,941,696		—		2,941,696

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

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

5.	Classification of Financial Instruments, Continued

(3)

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


In millions of won			June 30, 2019						June 30, 2018
			Three- month period ended			Six- month period ended			Three- month period ended			Six- month period ended
Cash and cash equivalents	Interest income	W		17,350			35,245			10,150			21,010
Financial assets at fair value through profit or loss	Interest income			2,569			3,255			145			290
	Gain (loss) on valuation of financial assets			3,830			8,095			(3,138	)		1,600
	Gain (loss) on disposal of financial assets			(89	)		703			672			672
Financial assets at fair value through other comprehensive income	Dividends income			2,427			3,740			3,704			11,811
Financial assets at amortized cost	Interest income			7			25			21			41
Loans and receivables	Interest income			13,364			26,038			11,112			16,796
Trade and other receivables	Interest income			22,004			41,032			18,799			43,070
Short-term financial instruments	Interest income			7,835			18,686			13,319			22,905
Long-term financial instruments	Interest income			—			1			3,892			4,004
Other financial assets	Interest income			146			297			—			—
Financial liabilities carried at amortized cost	Interest expense of borrowings and debt securities			352,919			699,869			327,418			649,794
	Interest expense of trade and other payables			2,929			31,306			10,888			22,980
	Interest expense of others			157,304			285,354			126,619			254,534
	Loss on foreign currency transactions and translations			(196,769	)		(395,619	)		(385,302	)		(382,084	)
Derivative assets (trading)	Loss on valuation of derivatives			78,944			160,854			129,884			73,158
	Loss on transaction of derivatives			18,894			31,895			13,559			22,638
Derivatives (applying hedge accounting)	Gain on valuation of derivatives (profit or loss)			76,662			150,329			220,348			204,083
	Gain (loss) on valuation of derivatives (equity, before tax)			19,529			34,163			(27,411	)		(65,956	)
	Gain (loss) on transaction of derivatives			4,386			16,867			(1,011	)		844

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

6.	Restricted Deposits

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


In millions of won			June 30, 2019		December 31, 2018
Cash and cash equivalents	Deposits for government project	W		13,305		12,747
	Collateral provided for borrowings			98,296		100,998
	Collateral provided for lawsuit			3		3
	Deposits for transmission regional support program			8,158		4,337
	Decommissioning costs of nuclear power plants			—		604
Short-term financial instruments	Restriction on withdrawal related to‘win-win growth program’ for small and medium enterprises			89,000		34,000
Current financial assets at fair value through profit or loss	Decommissioning costs of nuclear power plants			—		29,451
Non-current financial assets at fair value through profit or loss	Decommissioning costs of nuclear power plants			614,066		498,555
Long-term financial instruments	Escrow			92		69
	Guarantee deposits for banking accounts at oversea branches			326		315
	Borrowings Collateral			11,745		—
	Decommissioning costs of nuclear power plants			181,412		245,896
	Funds for developing small and medium enterprises (*)			200,000		200,000

		W		1,216,403		1,126,975

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

7.	Cash and Cash Equivalents

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


In millions of won		June 30, 2019		December 31, 2018
Cash	W		102		138
Other demand deposits			979,758		927,650
Short-term deposits classified as cash equivalents			207,332		211,424
Short-term investments classified as cash equivalents			120,925		219,133

	W		1,308,117		1,358,345

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

8.	Trade and Other Receivables

(1)

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


In millions of won		June 30, 2019
		Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets
Trade receivables	W		6,488,224		(250,123	)		—			6,238,101
Other receivables			850,669		(14,037	)		(2,310	)		834,322

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

Non-current assets
Trade receivables			381,656		(108	)		(396	)		381,152
Other receivables			1,466,100		(87,038	)		(5,510	)		1,373,552
			1,847,756		(87,146	)		(5,906	)		1,754,704
	W		9,186,649		(351,306	)		(8,216	)		8,827,127


In millions of won		December 31, 2018
		Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets
Trade receivables	W		7,303,065		(215,775	)		—			7,087,290
Other receivables			728,560		(20,231	)		(2,027	)		706,302

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

Non-current assets
Trade receivables			415,318		(93	)		(448	)		414,777
Other receivables			1,496,464		(84,495	)		(6,901	)		1,405,068

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

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

8.	Trade and Other Receivables, Continued

(2)

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


In millions of won		June 30, 2019
		Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets
Non-trade receivables	W		381,584		(13,599	)		—			367,985
Accrued income			99,017		—			—			99,017
Deposits			263,709		—			(2,310	)		261,399
Finance lease receivables			92,484		(438	)		—			92,046
Others			13,875		—			—			13,875

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

Non-current assets
Non-trade receivables			132,280		(78,801	)		—			53,479
Accrued income			91		—			—			91
Deposits			337,204		—			(5,510	)		331,694
Finance lease receivables			905,999		(859	)		—			905,140
Others			90,526		(7,378	)		—			83,148

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

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


In millions of won		December 31, 2018
		Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets
Non-trade receivables	W		298,587		(19,940	)		—			278,647
Accrued income			102,023		—			—			102,023
Deposits			228,466		—			(2,027	)		226,439
Finance lease receivables			84,688		(291	)		—			84,397
Others			14,796		—			—			14,796

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

Non-current assets
Non-trade receivables			136,432		(77,475	)		—			58,957
Deposits			376,211		—			(6,901	)		369,310
Finance lease receivables			898,658		(842	)		—			897,816
Others			85,163		(6,178	)		—			78,985

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

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

(3)

Trade and other receivables are classified as financial assets at amortized cost and are measured using the effective interest rate method. No interest is accrued for trade receivables related to electricity for the duration between the billing date and the payment due dates. But once trade receivables are overdue, the Group imposes a monthly interest rate of 1.5% on the overdue trade receivables. The Group holds deposits of three months’ expected electricity usage for customers requesting temporary usage and customers with delinquent payments.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

8.	Trade and Other Receivables, Continued

(4)

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


In millions of won		June 30, 2019			December 31, 2018
Trade receivables: (not overdue)	W		6,561,643			7,419,648

Trade receivables: (overdue, not impaired)			—			—

Less than 60 days			—			—

Trade receivables: (impairment reviewed)			308,237			298,735

Less than 60 days			7,738			2,525
60 ~ 90 days			34,551			37,266
90 ~ 120 days			12,851			16,033
120 days ~ 1 year			68,255			46,204
Over 1 year			184,842			196,707

			6,869,880			7,718,383
Less: allowance for doubtful accounts			(250,231	)		(215,868	)
Less: present value discount			(396	)		(448	)

	W		6,619,253			7,502,067

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

(5)

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


In millions of won		June 30, 2019						December 31, 2018
		Trade receivables			Other receivables			Trade receivables			Other receivables
Beginning balance	W		215,868			104,726			173,583			78,008
Effect of change in accounting policy			—			—			6,641			128
Loss allowance after adjusted under KIFRS 1109			215,868			104,726			180,224			78,136
Bad debt expense			15,745			5,629			41,498			17,817
Write-off, etc.			(3,721	)		342			(7,696	)		(244	)
Reversal			(21	)		(958	)		(1,726	)		(143	)
Others			22,360			(8,664	)		3,568			9,160

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

9.	Financial assets at fair value through profit or loss

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


In millions of won		June 30, 2019				December 31, 2018
		Current		Non-current		Current		Non-current
Financial assets at fair value through profit or loss
Listed	W		23,050		308,692		100		320,148
Unlisted			—		5,143		—		5,052
Other			1,499,137		135,690		313,793		83,586

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

Financial assets designated as at fair value through profit or loss
Debt with embedded derivatives			—		181,281		—		187,483
Other			—		47,502		—		10,773

			—		228,783		—		198,256

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

10.

Financial assets at fair value through other comprehensive income

(1)

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


In millions of won		June 30, 2019
		Beginning balance		Acquisition		Disposal			Valuation			Impairment		Others		Ending balance
Listed	W		210,056		—		—			643			—		3,499		214,198
Unlisted			189,439		—		(916	)		(47	)		—		1,142		189,618

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

Current financial assets at fair value through other comprehensive income	W		—		—		—			—			—		—		—
Non-current financial assets at fair value through other comprehensive income			399,495		—		(916	)		596			—		4,641		403,816


In millions of won		December 31, 2018
		Beginning balance		Effect of change in accounting policy		Acquisition		Disposal			Valuation			Impairment		Others			Ending balance
Listed	W		—		274,453		—		(1	)		(63,007	)		—		(1,389	)		210,056
Unlisted			—		197,450		—		—			(12,070	)		—		4,059			189,439

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

Current financial assets at fair value through other comprehensive income	W		—		—		—		—			—			—		—			—
Non-current financial assets at fair value through other comprehensive income			—		471,903		—		(1	)		(75,077	)		—		2,670			399,495

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

10.

Financial assets at fair value through other comprehensive income, Continued

(2)

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


In millions of won	June 30, 2019
	Shares		Ownership				Acquisition cost		Book value		Fair value
Listed
Korea District Heating Corp.		2,264,068		19.55	%	W		173,201		117,958		117,958
Ssangyong Motor Co., Ltd.		38,568		0.03	%			428		156		156
Korea Line Corp.		18		0.00	%			1		—		—
Namkwang Engineering & Construction Co., Ltd.		121		0.00	%			15		1		1
Bumyang Construction Co., Ltd.		35		0.00	%			2		—		—
ELCOMTEC Co., Ltd.		32,875		0.04	%			217		56		56
PAN ocean Co., Ltd.		1,492		0.00	%			14		7		7
Dongbu Corporation		955		0.02	%			12		10		10
KSP Co., Ltd.		22,539		0.08	%			24		48		48
STX Heavy Industries Co., Ltd.		5,057		0.13	%			191		34		34
Codes Combine Co., Ltd.		291		0.00	%			1		1		1
PT Adaro Energy Tbk		480,000,000		1.50	%			71,554		53,399		53,399
Energy Fuels Inc.		1,711,814		1.91	%			16,819		6,153		6,153
Baralaba Coal Company Limited		99,763		0.07	%			18,445		—		—
Denison Mines Corp.		58,284,000		10.42	%			84,134		36,029		36,029
Fission 3.0		75,000		0.14	%			—		7		7
Fission Uranium Corp.		800,000		0.16	%			785		339		339

								365,843		214,198		214,198

Unlisted(*1)
Intellectual Discovery Co., Ltd.		1,000,000		8.81	%			5,000		954		954
Smart Power Co.,Ltd.		133,333		4.35	%			200		200		200
Navanakorn Electric Co., Ltd. (*2)		4,442,800		26.93	%			17,216		17,718		17,718
PT. Kedap Sayaaq		671		10.00	%			18,540		—		—
Set Holding (*3)		1,100,220		2.50	%			229,255		161,983		161,983
PT. Cirebon Energi Prasarana		22,420		10.00	%			2,612		2,594		2,594
KODE NOVUS I LLC		—		10.00	%			—		—		—
Others (*4)								9,624		6,169		6,169

								282,447		189,618		189,618

						W		648,290		403,816		403,816

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

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

(*3)

The Group has estimated the fair value of Set Holding by using the discounted cash flow method and has recognized the difference between its fair value and book value as gain or loss on valuation of financial assets at FVOCI in other comprehensive income or loss for thesix-month period ended June 30, 2019.

(*4)	Equity securities acquired throughdebt-for-equity swaps of electricity rate bonds, etc. It consists of 199 companies including Borneo Co., Ltd..

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

10.

Financial assets at fair value through other comprehensive income, Continued

(2)

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


In millions of won	December 31, 2018
	Shares		Ownership				Acquisition cost		Book value		Fair value
Listed
Korea District Heating Corp.		2,264,068		19.55	%	W		173,201		129,051		129,051
Ssangyong Motor Co., Ltd.		38,568		0.03	%			428		153		153
Korea Line Corp.		18		0.00	%			1		—		—
Namkwang Engineering & Construction Co., Ltd.		121		0.00	%			15		1		1
Bumyang Construction Co., Ltd.		35		0.00	%			2		—		—
ELCOMTEC Co., Ltd.		32,875		0.04	%			217		61		61
PAN ocean Co., Ltd.		1,492		0.00	%			14		7		7
Dongbu Corporation		955		0.02	%			12		7		7
KSP Co., Ltd.		22,539		0.08	%			24		32		32
STX Heavy Industries Co., Ltd.		5,057		0.13	%			191		29		29
Codes Combine Co., Ltd.		291		0.00	%			1		1		1
PT Adaro Energy Tbk		480,000,000		1.50	%			71,554		44,790		44,790
Energy Fuels Inc.		1,711,814		1.91	%			16,819		5,435		5,435
Baralaba Coal Company Limited		99,763		0.07	%			18,445		—		—
Denison Mines Corp.		58,284,000		10.42	%			84,134		30,122		30,122
Fission 3.0 (*6)		75,000		0.14	%			—		13		13
Fission Uranium Corp.		800,000		0.16	%			785		354		354

								365,843		210,056		210,056

Unlisted(*1)
Intellectual Discovery Co., Ltd.		1,000,000		8.81	%			5,000		954		954
Smart Power Co.,Ltd.		133,333		4.35	%			200		200		200
DS POWER Co., Ltd.		580,000		2.34	%			2,900		916		916
Navanakorn Electric Co., Ltd. (*2)		4,442,800		26.93	%			17,216		17,126		17,126
PT. Kedap Sayaaq		671		10.00	%			18,540		—		—
Set Holding (*3)		1,100,220		2.50	%			229,255		161,983		161,983
PT. Cirebon Energi Prasarana		22,420		10.00	%			2,612		2,507		2,507
KODE NOVUS I LLC (*4)		—		10.00	%			—		—		—
Others (*5)								8,947		5,753		5,753

								284,670		189,439		189,439

						W		650,513		399,495		399,495

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

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

(*3)

(*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..

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

11.

Financial assets at amortized cost

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


In millions of won		June 30, 2019
		Financial assets at amortized cost		Government grants		Allowance for doubtful accounts		Others		Book value
Government bonds	W		1,350		—		—		—		1,350
Financial bonds			11,000		—		—		—		11,000

	W		12,350		—		—		—		12,350

Current	W		11,010		—		—		—		11,010
Non-current			1,340		—		—		—		1,340

In millions of won		December 31, 2018
		Financial assets at amortized cost		Government grants		Allowance for doubtful accounts		Others		Book value
Government bonds	W		3,042		—		—		—		3,042
Financial bonds			11,000		—		—		—		11,000

	W		14,042		—		—		—		14,042

Current	W		11,956		—		—		—		11,956
Non-current			2,086		—		—		—		2,086

12. Derivatives

(1)

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


In millions of won		June 30, 2019				December 31, 2018
		Current		Non-current		Current		Non-current
Derivative assets
Currency forward	W		1,825		39,191		2,128		12,606
Currency swap			84,967		208,635		39,979		43,436
Interest rate swap			—		3,263		—		2,342
Others (*1)			—		—		—		1,844

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

Derivative liabilities
Currency forward	W		4,209		—		1,956		—
Currency swap			—		105,571		14,881		233,690
Interest rate swap			6,978		58,365		1,439		58,042
Others (*2)			2,154		—		2,155		—

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

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

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

12.

Derivatives, Continued

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

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


Counterparty	Contract date		Maturity date			Contract amounts				Contract exchange rate (in won)
Counterparty	Contract date		Maturity date			Pay		Receive		Contract exchange rate (in won)
KEB Hana Bank		2014.04.10		2021.07.12	W		55,120	USD 52,000	W		1,060.00
KEB Hana Bank		2014.04.28		2021.07.12			50,784	USD 48,000			1,058.00
Bank of America		2014.04.29		2021.07.12			105,400	USD 100,000			1,054.00
KEB Hana Bank		2014.05.09		2021.07.12			104,600	USD 100,000			1,046.00
KEB Hana Bank		2017.12.22		2021.07.12			105,079	USD 100,000			1,050.79
Korea Development Bank		2017.12.27		2021.07.12			104,849	USD 100,000			1,048.49
Shinhan Bank		2019.06.17		2019.07.08			16,592	EUR 12,456			1,332.03
KEB Hana Bank		2019.05.30		2019.07.02			5,945	USD 5,000			1,188.90
Kookmin Bank		2019.06.03		2019.07.08			5,892	USD 5,000			1,178.30
Nonghyup Bank		2019.06.11		2019.07.16			5,892	USD 5,000			1,178.40
KEB Hana Bank		2019.06.13		2019.07.18			5,917	USD 5,000			1,183.46
Mizuho Bank		2019.06.13		2019.07.18			5,918	USD 5,000			1,183.50
Woori Bank		2019.06.13		2019.07.18			5,905	USD 5,000			1,180.90
KEB Hana Bank		2019.06.14		2019.07.19			9,462	USD 8,000			1,182.80
KEB Hana Bank		2019.06.19		2019.07.24			5,909	USD 5,000			1,181.87
Nonghyup Bank		2019.06.19		2019.07.24			5,879	USD 5,000			1,175.80
Morgan Stanley		2019.06.19		2019.07.24			5,872	USD 5,000			1,174.35
CCB		2019.06.20		2019.07.25			5,819	USD 5,000			1,163.85
KEB Hana Bank		2019.06.24		2019.07.29			9,246	USD 8,000			1,155.80
Credit Agricole		2019.06.26		2019.07.30			11,530	USD 10,000			1,153.00
KEB Hana Bank		2019.06.26		2019.07.31			5,783	USD 5,000			1,156.50
Standard Chartered		2019.06.26		2019.07.31			5,784	USD 5,000			1,156.70
Shinhan Bank		2019.06.27		2019.08.01			11,559	USD 10,000			1,155.90
Woori Bank		2019.06.11		2019.07.08			4,724	USD 4,000			1,180.90
Mizuho Bank		2019.06.11		2019.07.08			8,266	USD 7,000			1,180.85
Nova Scotia		2019.06.13		2019.07.08			4,727	USD 4,000			1,181.75
KEB Hana Bank		2019.06.17		2019.07.12			14,226	USD 12,000			1,185.50
Societe Generale		2019.06.19		2019.07.08			3,530	USD 3,000			1,176.54
BNP Paribas		2019.06.21		2019.07.12			4,065	USD 3,500			1,161.45
Societe Generale		2019.06.21		2019.07.12			8,705	USD 7,500			1,160.70
MUFG		2019.06.25		2019.07.23			9,230	USD 8,000			1,153.77
Nova Scotia		2019.06.25		2019.07.23			10,961	USD 9,500			1,153.83
Societe Generale		2019.06.26		2019.07.23			7,523	USD 6,500			1,157.40
Korea Development Bank		2019.06.27		2019.07.23			6,359	USD 5,500			1,156.20
BNP Paribas		2019.06.28		2019.07.26			12,714	USD 11,000			1,155.80
Mizuho Bank		2019.06.03		2019.07.05			5,918	USD 5,000			1,183.65
Mizuho Bank		2019.06.20		2019.07.05			5,848	USD 5,000			1,169.50
Societe Generale		2019.06.20		2019.07.05			5,810	USD 5,000			1,162.00
Credit Agricole		2019.06.20		2019.07.05			2,567	USD 2,196			1,169.00
Credit Agricole		2019.06.28		2019.07.19			5,779	USD 5,000			1,155.85
Nova Scotia		2019.06.20		2019.07.05			5,847	USD 5,000			1,169.30
Nova Scotia		2019.06.28		2019.07.19			5,780	USD 5,000			1,156.05
BNP Paribas		2019.06.20		2019.07.05			5,847	USD 5,000			1,169.40
Nonghyup Bank		2019.06.24		2019.07.19			11,551	USD 10,000			1,155.10
MUFG		2019.06.28		2019.07.19			5,779	USD 5,000			1,155.70
Nonghyup Bank		2019.06.12		2019.07.08			3,537	USD 3,000			1,179.00
KEB Hana Bank		2019.06.13		2019.07.08			9,456	USD 8,000			1,181.95

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

12.

Derivatives, Continued

(2)

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

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


						Contract amounts				Contract exchange rate (in won)
Counterparty	Contract date		Maturity date			Pay		Receive		Contract exchange rate (in won)
Mizuho Bank		2019.06.14		2019.07.08	W		3,550	USD 3,000	W		1,183.29
Busan Bank		2019.06.18		2019.07.23			7,096	USD 6,000			1,182.60
Nonghyup Bank		2019.06.18		2019.07.23			7,096	USD 6,000			1,182.60
Nova Scotia		2019.06.27		2019.07.26			5,784	USD 5,000			1,156.85
Kookmin Bank		2019.06.28		2019.07.26			21,942	USD 19,000			1,154.86
Woori Bank		2019.05.15		2019.08.16			2,506	USD 2,110			1,187.65
Standard Chartered		2019.05.30		2019.09.03			5,573	USD 4,700			1,185.80
BNP Paribas		2019.06.03		2019.07.05			1,894	USD 1,600			1,183.80
Nova Scotia		2019.06.11		2019.09.16			11,789	USD 10,000			1,178.90
Credit Agricole		2019.06.11		2019.07.12			5,892	USD 5,000			1,178.45
Shinhan Bank		2019.06.12		2019.07.12			5,895	USD 5,000			1,178.90
Shinhan Bank		2019.06.13		2019.07.15			118	USD 100			1,182.10
Nova Scotia		2019.06.17		2019.07.19			5,335	USD 4,500			1,185.65
Nova Scotia		2019.06.18		2019.07.22			4,728	USD 4,000			1,182.10
Societe Generale		2019.06.27		2019.08.01			4,050	USD 3,500			1,157.10

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

12.

Derivatives, Continued

(3)

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

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


Counterparty	Contract year			Contract amount			Contract interest rate							Contract exchange rate (in won)
Counterparty	Contract year			Pay		Receive	Pay			Receive				Contract exchange rate (in won)
Standard Chartered		2014~2029	W		102,470	USD 100,000		3.14	%		3.57	%	W		1,024.70
Societe Generale		2014~2024			105,017	USD 100,000		4.92	%		5.13	%			1,050.17
KEB Hana Bank		2015~2024			107,970	USD 100,000		4.75	%		5.13	%			1,079.70
Credit Agricole		2015~2024			94,219	USD 86,920		4.85	%		5.13	%			1,083.97
Woori Bank		2019~2027			21,708	USD 19,417		5.04	%		6.75	%			1,118.00
Woori Bank		2019~2024			296,000	USD 250,000		1.21	%		2.50	%			1,184.00
Korea Development Bank		2019~2024			177,600	USD 150,000		1.24	%		2.50	%			1,184.00
KEB Hana Bank		2019~2024			118,400	USD 100,000		1.24	%		2.50	%			1,184.00
Citibank		2012~2022			112,930	USD 100,000		2.79	%		3.00	%			1,129.30
JP Morgan		2012~2022			112,930	USD 100,000		2.79	%		3.00	%			1,129.30
Bank of America		2012~2022			112,930	USD 100,000		2.79	%		3.00	%			1,129.30
Shinhan Bank		2016~2022			112,930	USD 100,000		2.79	%		3.00	%			1,129.30
HSBC		2012~2022			111,770	USD 100,000		2.89	%		3.00	%			1,117.70
KEB Hana Bank		2012~2022			111,770	USD 100,000		2.87	%		3.00	%			1,117.70
Standard Chartered		2012~2022			111,770	USD 100,000		2.89	%		3.00	%			1,117.70
Deutsche Bank		2012~2022			55,885	USD 50,000		2.79	%		3.00	%			1,117.70
HSBC		2014~2019			105,260	USD 100,000		2.48	%		2.38	%			1,052.60
Standard Chartered		2014~2019			105,260	USD 100,000		2.48	%		2.38	%			1,052.60
Korea Development Bank		2016~2019			105,260	USD 100,000		2.48	%		2.38	%			1,052.60
Nomura		2015~2025			111,190	USD 100,000		2.60	%		3.25	%			1,111.90
Korea Development Bank		2015~2025			111,190	USD 100,000		2.62	%		3.25	%			1,111.90
Woori Bank		2015~2025			55,595	USD 50,000		2.62	%		3.25	%			1,111.90
KEB Hana Bank		2015~2025			55,595	USD 50,000		2.62	%		3.25	%			1,111.90
Woori Bank		2017~2027			111,610	USD 100,000		2.25	%		3.13	%			1,116.10
Korea Development Bank		2017~2027			111,610	USD 100,000		2.31	%		3.13	%			1,116.10
KEB Hana Bank		2017~2027			111,610	USD 100,000		2.31	%		3.13	%			1,116.10
Korea Development Bank		2018~2028			108,600	HKD 800,000		2.69	%		3.35	%			135.75
Shinhan Bank		2018~2028			115,387	HKD 850,000		2.66	%		3.35	%			135.75
Korea Development Bank		2018~2023			170,280	USD 150,000		2.15	%		3.75	%			1,135.20
Woori Bank		2018~2023			170,280	USD 150,000		2.18	%		3.75	%			1,135.20
KEB Hana Bank		2018~2023			113,520	USD 100,000		2.17	%		3.75	%			1,135.20
Shinhan Bank		2018~2023			227,040	USD 200,000		2.17	%		3.75	%			1,135.20

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

12.

Derivatives, Continued

(4)

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


In millions of won and thousands of foreign currencies except contract exchange rate information
Counterparty	Contract year			Contract amount				Contract interest rate			Contract exchange rate (in won, USD)
Counterparty	Contract year			Pay		Receive		Pay	Receive		Contract exchange rate (in won, USD)
HSBC		2014~2020	W		99,901		AUD 100,000	3.52%	5.75%	W		999.01
HSBC		2014~2020			100,482		AUD 100,000	3.48%	5.75%			1,004.82
Standard Chartered		2013~2020			USD 117,250		AUD 125,000	3M Libor +1.25%	5.75%			USD 0.94
Standard Chartered		2014~2020			126,032		USD 117,250	3.55%	3M Libor +1.25%			1,074.90
Korea Development Bank		2017~2020			114,580		USD 100,000	1.75%	2.38%			1,145.80
KEB Hana Bank		2017~2020			114,580		USD 100,000	1.75%	2.38%			1,145.80
Export-import bank of Korea		2017~2020			114,580		USD 100,000	1.75%	2.38%			1,145.80
Korea Development Bank		2016~2021			121,000		USD 100,000	2.15%	2.50%			1,210.00
Morgan Stanley		2016~2021			121,000		USD 100,000	3M Libor+ 2.10%	2.50%			1,210.00
BNP Paribas		2016~2021			121,000		USD 100,000	3M Libor+ 2.10%	2.50%			1,210.00
Nomura		2017~2037			52,457		EUR 40,000	2.60%	1.70%			1,311.42
Nomura		2017~2037			59,423		SEK 450,000	2.62%	2.36%			132.05
Korea Development Bank		2019~2022			112,650		USD 100,000	1.80%	3.38%			1,126.50
Kookmin Bank		2019~2022			112,650		USD 100,000	1.80%	3.38%			1,126.50
Woori Bank		2019~2022			112,650		USD 100,000	1.80%	3.38%			1,126.50
Standard Chartered		2014~2019			104,490		USD 100,000	2.77%	2.63%			1,044.90
Credit Agricole		2014~2019			104,490		USD 100,000	2.77%	2.63%			1,044.90
Morgan Stanley		2014~2019			104,490		USD 100,000	2.70%	2.63%			1,044.90
Korea Development Bank		2018~2023			320,880		USD 300,000	2.03%	3.75%			1,069.60
BNP Paribas		2019~2024			111,841		CHF 100,000	1.78%	0.13%			1,118.41
Kookmin Bank		2019~2024			111,841		CHF 100,000	1.78%	0.13%			1,118.41
KEB Hana Bank		2018~2021			212,960		USD 200,000	2.10%	3.00%			1,064.80
Korea Development Bank		2018~2021			212,960		USD 200,000	2.10%	3.00%			1,064.80
Credit Agricole		2014~2020			110,680		USD 100,000	2.29%	2.50%			1,106.80
Societe Generale		2014~2020			55,340		USD 50,000	2.16%	2.50%			1,106.80
KEB Hana Bank		2014~2020			55,340		USD 50,000	2.16%	2.50%			1,106.80
KEB Hana Bank		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
Standard Chartered		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
HSBC		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
Nomura		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
BNP Paribas		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
HSBC		2014~2020			55,340		USD 50,000	2.21%	2.50%			1,106.80
KEB Hana Bank		2017~2022			226,600		USD 200,000	1.94%	2.63%			1,133.00
Korea Development Bank		2017~2022			113,300		USD 100,000	1.94%	2.63%			1,133.00
Nomura		2017~2022			113,300		USD 100,000	1.95%	2.63%			1,133.00
Woori Bank		2017~2022			56,650		USD 50,000	1.95%	2.63%			1,133.00
Kookmin Bank		2017~2022			56,650		USD 50,000	1.95%	2.63%			1,133.00
Korea Development Bank		2018~2023			169,335		USD 150,000	2.26%	3.88%			1,128.90
Woori Bank		2018~2023			169,335		USD 150,000	2.26%	3.88%			1,128.90
Credit Agricole		2018~2023			112,890		USD 100,000	2.26%	3.88%			1,128.90
KEB Hana Bank		2018~2023			56,445		USD 50,000	2.26%	3.88%			1,128.90
Kookmin Bank		2018~2023			56,445		USD 50,000	2.26%	3.88%			1,128.90

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

12.

Derivatives, Continued

(5)

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

In millions of won and thousands of USD

Counterparty

Contract year

Contract
amount

Contract interest rate per annum

Pay

Receive

KEB Hana Bank

2017~2022

100,000

2.01%

3M CD + 0.24%

KEB Hana Bank

2017~2022

100,000

2.06%

3M CD + 0.27%

Nomura (*1)

2017~2037

30,000

2.05%

3.08%

KEB Hana Bank

2017~2021

200,000

2.45%

3M CD + 0.32%

Nomura (*2)

2018~2038

30,000

2.56%

3.75%

KEB Hana Bank

2018~2023

200,000

2.15%

3M CD + 0.19%

KEB Hana Bank

2018~2023

200,000

2.17%

3M CD + 0.19%

KEB Hana Bank

2018~2023

150,000

2.03%

3M CD + 0.21%

KEB Hana Bank

2019~2024

200,000

1.87%

3M CD + 0.13%

Societe Generale

2017~2022

200,000

3M Libor+ 3.44%

3.77%

Nomura

2017~2027

52,457

3M Libor + 2.25%

2.60%

Nomura

2017~2027

59,423

3M Libor + 2.27%

2.62%

Export-import bank of Korea

2015~2031

USD 15,893

2.67%

6M USD Libor

ING Bank

2015~2031

USD 7,861

2.67%

6M USD Libor

BNP Paribas

2015~2031

USD 7,861

2.67%

6M USD Libor

(*1)	2.05% of the contract paying interest rate is applied for five years from the date of issuance, and 3M CD + 0.10% is applied thereafter.

(*2)	2.56% of the contract paying interest rate is applied for five years from the date of issuance, and 3M CD + 0.10% is applied thereafter.

(6)

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

In millions of won and thousands of USD

Counterparty

Contract year

Contract
amount

Contract interest rate per annum

Pay

Receive

BNP Paribas

2009~2027

USD 92,120

4.16%

6M USD Libor

KFW

2009~2027

USD 92,120

4.16%

6M USD Libor

Credit Agricole

2018~2033

USD 90,875

3.98%~4.10%

6M USD Libor

SMBC

2018~2033

USD 118,837

4.05%~4.18%

6M USD Libor

Export-import bank of Korea

2016~2036

USD 2,564

3.00%

4.99%

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

12.

Derivatives, Continued

(7)

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


In millions of won		Net income effects of valuation gain (loss)											Net income effects of transaction gain (loss)										Accumulated other *comprehensive income (loss) ()**
		June 30, 2019						June 30, 2018					June 30, 2019						June 30, 2018				June 30, 2019						June 30, 2018
		Three- month period ended			Six- month period ended			Three- month period ended			Six- month period ended		Three- month period ended			Six- month period ended			Three- month period ended		Six- month period ended		Three- month period ended			Six- month period ended			Three- month period ended			Six- month period ended
Currency forward	W		7,484			22,533			101,219			89,979		5,145			10,242			11,549		17,079		—			—			(1,721	)		1,606
Currency swap			162,335			309,763			250,718			184,338		18,291			38,911			225		5,950		21,935			43,527			(29,869	)		(68,374	)
Interest rate swap			(14,213	)		(21,113	)		(1,706	)		2,924		(156	)		(391	)		774		453		(2,406	)		(9,364	)		4,179			812

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

(*)	For thesix-month period ended June 30, 2019, the net gain on valuation of derivatives applying cash flow hedge accounting ofW14,556 million, net of tax, is included in other comprehensive income or loss.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

13.

Other Financial Assets

(1)

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


In millions of won		June 30, 2019						December 31, 2018
		Current			Non-current			Current			Non-current
Loans and receivables	W		113,910			657,040			123,657			639,673
Allowance for doubtful accounts			(80	)		(4,937	)		(12	)		(4,940	)
Present value discount			(891	)		(37,098	)		(992	)		(38,712	)
Long-term/short-term financial instruments			2,014,027			400,360			1,869,286			448,741

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

(2)

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


In millions of won		June 30, 2019
		Face value		Allowance for doubtful accounts			Present value discount			Book value
Short-term loans and receivables
Loans for tuition	W		35,398		—			(891	)		34,507
Loans for housing			16,631		—			—			16,631
Fisheries loan			320		—			—			320
Other loans			61,561		(80	)		—			61,481

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

Long-term loans and receivables
Loans for tuition			416,297		—			(37,073	)		379,224
Loans for housing			185,024		—			—			185,024
Loans for related parties			49,049		(4,930	)		—			44,119
Fisheries loan			320		—			(25	)		295
Other loans			6,350		(7	)		—			6,343

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

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


In millions of won		December 31, 2018
		Face value		Allowance for doubtful accounts			Present value discount			Book value
Short-term loans and receivables
Loans for tuition	W		33,333		—			(992	)		32,341
Loans for housing			15,572		—			—			15,572
Fisheries loan			320		—			—			320
Other loans			74,432		(12	)		—			74,420

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

Long-term loans and receivables
Loans for tuition			414,893		—			(38,659	)		376,234
Loans for housing			167,723		—			—			167,723
Loans for related parties			46,798		(4,930	)		—			41,868
Fisheries loan			640		—			(53	)		587
Other loans			9,619		(10	)		—			9,609

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

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

13.

Other Financial Assets, Continued

(3)

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


In millions of won		June 30, 2019		December 31, 2018
Beginning balance	W		4,952		8,948
Bad debt expense			65		22
Others			—		(4,018	)

Ending balance	W		5,017		4,952

(4)

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


In millions of won		June 30, 2019				December 31, 2018
		Current		Non-current		Current		Non-current
Time deposits	W		1,826,168		14,292		1,602,285		63,358
ABCP			105,342		—		—		—
CD			40,000		—		10,000		—
RP			517		—		—		—
Others			42,000		386,068		257,001		385,383

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

14.

Inventories

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


In millions of won		June 30, 2019
		Acquisition cost		Valuation allowance			Book value
Raw materials	W		3,547,286		(1,430	)		3,545,856
Merchandises			514		—			514
Work-in-progress			166,392		—			166,392
Finished goods			55,299		—			55,299
Supplies			2,037,620		(4,340	)		2,033,280
Inventories-in-transit			937,144		—			937,144
Other inventories			14,435		—			14,435

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


In millions of won		December 31, 2018
		Acquisition cost		Valuation allowance			Book value
Raw materials	W		3,886,739		(2,609	)		3,884,130
Work-in-progress			189,907		(1,028	)		188,879
Finished goods			50,526		—			50,526
Supplies			1,858,751		(3,907	)		1,854,844
Inventories-in-transit			1,196,113		—			1,196,113
Other inventories			13,761		—			13,761

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

The reversal of the allowance for loss on inventory valuation due to increase in the net realizable value of inventory deducted from cost of sales for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 wereW4,069 million andW3,723 million, respectively.

The amounts of loss from inventory valuation included in other gains or losses for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 wereW2,295 million andW1,953 million, respectively.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

15.

Finance Lease Receivables

(1)

Finance lease contracts

The Group entered into a power purchase agreement (“PPA”) with Jordan Electric Power Company to provide a 373MW level Qatrana gas combined power plant over a 25 year lease term, and accounts for the PPA as a finance lease. Also, the Group hasfly-ash pipe conduit finance leases with an average lease term of 7 years. In addition, the Group provides 30 energy storage system installation projects and 56 energy efficiency contracts as finance leases with a lease term of 2 to 10 years. Also, the Group entered into a PPA with the Comision Federal de Electricidad in Mexico to provide for 25 years (December 2013 to November 2038) of all electricity generated from the power plant after completion of its construction and collect rates consisting of fixed costs (to recover the capital) and variable costs during the contracted period.

(2)

Finance lease receivables as of June 30, 2019 and December 31, 2018 are as follows and included in current andnon-current trade and other receivables, net, in the consolidated statements of financial position:


In millions of won		June 30, 2019						December 31, 2018
		Minimum lease payments			Present value of minimum lease payments			Minimum lease payments		Present value of minimum lease payments
Less than 1 year	W		131,923			92,484			124,918		84,688
1 ~ 5 years			474,508			227,189			467,518		223,622
More than 5 years			1,313,711			678,810			1,333,016		675,036

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

Less : Allowance for doubtful accounts						(1,297	)				(1,133	)

				W		997,186					982,213

(3)

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


In millions of won		June 30, 2019		December 31, 2018
Beginning balance	W		1,132		—
Bad debt expense			165		1,133

Ending balance	W		1,297		1,133

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

16.

Non-Financial Assets

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


In millions of won		June 30, 2019				December 31, 2018
		Current		Non-current		Current		Non-current
Advance payment	W		157,977		186,644		156,073		160,628
Prepaid expenses (*1)			428,223		79,785		290,944		90,449
Others (*2)			618,565		78,583		431,871		76,075

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

(*1)	Prepaid expenses amounting toW6,433 million was transferred toright-of-assets due to change in accounting policy.

(*2)	Details of others as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019				December 31, 2018
		Current		Non-current		Current		Non-current
Greenhouse gas emissions rights	W		172,431		—		93,749		—
Other quick assets (*3)			446,134		78,583		338,122		76,075

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

(*3)	The Group recognized an impairment loss ofW87,023 million as it was determined that there is objective evidence of impairment related to its equity interest in loan receivables from Orano Expansion for the year ended December 31, 2018.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries

(1)

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


			Percentage of ownership
Subsidiaries	Key operation activities	Location	June 30, 2019			December 31, 2018
Korea Hydro & Nuclear Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Korea South-East Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Korea Midland Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Korea Western Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Korea Southern Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Korea East-West Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
KEPCO Engineering & Construction Company, Inc. (*1)	Architectural engineering for utility plant and others	KOREA		65.77	%		65.77	%
KEPCO Plant Service & Engineering Co., Ltd.	Utility plant maintenance and others	KOREA		51.00	%		51.00	%
KEPCO Nuclear Fuel Co., Ltd.	Nuclear fuel	KOREA		96.36	%		96.36	%
KEPCO KDN Co., Ltd.	Electric power information technology and others	KOREA		100.00	%		100.00	%
Garolim Tidal Power Plant Co., Ltd. (*2)	Power generation	KOREA		49.00	%		49.00	%
KEPCO International HongKong Ltd.	Holding company	HONG KONG		100.00	%		100.00	%
KEPCO International Philippines Inc.	Holding company	PHILIPPINES		100.00	%		100.00	%
KEPCO Gansu International Ltd.	Holding company	HONG KONG		100.00	%		100.00	%
KEPCO Philippines Holdings Inc.	Holding company	PHILIPPINES		100.00	%		100.00	%
KEPCO Philippines Corporation	Operation of utility plant	PHILIPPINES		100.00	%		100.00	%
KEPCO Ilijan Corporation	Construction and operation of utility plant	PHILIPPINES		51.00	%		51.00	%
KEPCO Lebanon SARL	Operation of utility plant	LEBANON		100.00	%		100.00	%
KEPCO Neimenggu International Ltd.	Holding company	HONG KONG		100.00	%		100.00	%
KEPCO Shanxi International Ltd.	Holding company	HONG KONG		100.00	%		100.00	%
KOMIPO Global Pte Ltd.	Holding company	SINGAPORE		100.00	%		100.00	%
KEPCO Netherlands B.V.	Holding company	NETHERLANDS		100.00	%		100.00	%
KOREA Imouraren Uranium Investment Corp.	Holding company	FRANCE		100.00	%		100.00	%
KEPCO Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
KOSEP Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
KOMIPO Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
KOWEPO Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
KOSPO Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
KEPCO Middle East Holding Company	Holding company	BAHRAIN		100.00	%		100.00	%
Qatrana Electric Power Company	Construction and operation of utility plant	JORDAN		80.00	%		80.00	%
KHNP Canada Energy, Ltd.	Holding company	CANADA		100.00	%		100.00	%
KEPCO Bylong Australia Pty., Ltd.	Resources development	AUSTRALIA		100.00	%		100.00	%
Korea Waterbury Uranium Limited Partnership	Resources development	CANADA		79.64	%		79.64	%

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries, Continued

(1)

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


Korea Electric Power Nigeria Ltd.	Operation of utility plant	NIGERIA		100.00	%		100.00	%
KEPCO Holdings de Mexico	Holding company	MEXICO		100.00	%		100.00	%
KST Electric Power Company	Construction and operation of utility plant	MEXICO		56.00	%		56.00	%
KEPCO Energy Service Company	Operation of utility plant	MEXICO		100.00	%		100.00	%
KEPCO Netherlands S3 B.V.	Holding company	NETHERLANDS		100.00	%		100.00	%
PT. KOMIPO Pembangkitan Jawa Bali	Operation of utility plant	INDONESIA		51.00	%		51.00	%
PT. Cirebon Power Service (*2)	Operation of utility plant	INDONESIA		27.50	%		27.50	%
KOWEPO International Corporation	Operation of utility plant	PHILIPPINES		99.99	%		99.99	%
KOSPO Jordan LLC	Operation of utility plant	JORDAN		100.00	%		100.00	%
EWP Philippines Corporation	Holding company	PHILIPPINES		100.00	%		100.00	%
EWP America Inc.	Holding company	USA		100.00	%		100.00	%
EWP Renewable Corporation	Holding company	USA		100.00	%		100.00	%
DG Fairhaven Power, LLC	Power generation	USA		100.00	%		100.00	%
DG Whitefield, LLC	Power generation	USA		100.00	%		100.00	%
Springfield Power, LLC	Power generation	USA		100.00	%		100.00	%
KNF Canada Energy Limited	Holding company	CANADA		96.36	%		96.36	%
EWP Barbados 1 SRL	Holding company	BARBADOS		100.00	%		100.00	%
California Power Holdings, LLC	Power generation	USA		100.00	%		100.00	%
Gyeonggi Green Energy Co., Ltd.	Power generation	KOREA		62.01	%		62.01	%
PT. Tanggamus Electric Power	Power generation	INDONESIA		52.50	%		52.50	%
Gyeongju Wind Power Co., Ltd.	Power generation	KOREA		70.00	%		70.00	%
KOMIPO America Inc.	Holding company	USA		100.00	%		100.00	%
EWPRC Biomass Holdings, LLC	Holding company	USA		100.00	%		100.00	%
KOSEP USA, INC.	Power generation	USA		100.00	%		100.00	%

			Percentage of ownership
Subsidiaries	Key operation activities	Location	June 30, 2019			December 31, 2018
PT. EWP Indonesia	Holding company	INDONESIA		99.96	%		99.96	%
KEPCO Netherlands J3 B.V.	Holding company	NETHERLANDS		100.00	%		100.00	%
Korea Offshore Wind Power Co., Ltd.	Power generation	KOREA		100.00	%		100.00	%
Global One Pioneer B.V.	Holding company	NETHERLANDS		100.00	%		100.00	%
Global Energy Pioneer B.V.	Holding company	NETHERLANDS		100.00	%		100.00	%
Mira Power Limited (*3)	Power generation	PAKISTAN		76.00	%		76.00	%
KOSEP Material Co., Ltd.	Recycling fly ashes	KOREA		86.22	%		86.22	%
Commerce and Industry Energy Co., Ltd. (*4)	Power generation	KOREA		85.00	%		59.03	%
KEPCO Singapore Holdings Pte., Ltd.	Holding company	SINGAPORE		—			100.00	%
KEPCO KPS Philippines Corp.	Utility plant maintenance and Others	PHILIPPINES		51.00	%		51.00	%
KOSPO Chile SpA	Holding company	CHILE		100.00	%		100.00	%

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries, Continued

(1)

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


PT. KOWEPO Sumsel Operation And Maintenance Services	Utility plant maintenance and others	INDONESIA	95.00	%	95.00	%
HeeMang Sunlight Power Co., Ltd.	Operation of utility plant	KOREA	100.00	%	100.00	%
Fujeij Wind Power Company	Operation of utility plant	JORDAN	100.00	%	100.00	%
KOSPO Youngnam Power Co., Ltd.	Operation of utility plant	KOREA	50.00	%	50.00	%
HI Carbon Professional Private Special Asset Investment Trust 1	Holding company	KOREA	96.67	%	96.67	%
Chitose Solar Power Plant LLC	Power generation	JAPAN	80.10	%	80.10	%
KEPCO Energy Solution Co. Ltd.	Energy service	KOREA	100.00	%	100.00	%
Solar School Plant Co., Ltd.	Power generation	KOREA	100.00	%	100.00	%
KOSPO Power Services Limitada	Utility plant maintenance and others	CHILE	65.00	%	65.00	%
Energy New Industry Specialized Investment Private Investment Trust	Holding company	KOREA	99.01	%	99.01	%
KOEN Bylong Pty., Ltd.	Resources development	AUSTRALIA	100.00	%	100.00	%
KOMIPO Bylong Pty., Ltd.	Resources development	AUSTRALIA	100.00	%	100.00	%
KOWEPO Bylong Pty., Ltd.	Resources development	AUSTRALIA	100.00	%	100.00	%
KOSPO Bylong Pty., Ltd.	Resources development	AUSTRALIA	100.00	%	100.00	%
EWP Bylong Pty., Ltd.	Resources development	AUSTRALIA	100.00	%	100.00	%
KOWEPO Lao International	Utility plant maintenance and Others	LAOS	100.00	%	100.00	%
KEPCO US Inc.	Holding company	USA	100.00	%	100.00	%
KEPCO Alamosa LLC	Holding company	USA	50.10	%	50.10	%
KEPCO Solar of Alamosa, LLC (formerly, Cogentrix of Alamosa, LLC)	Power generation	USA	50.10	%	50.10	%
KEPCO-LG CNS Mangilao Holdings LLC	Holding company	USA	70.00	%	70.00	%
Mangilao Investment LLC	Holding company	USA	70.00	%	70.00	%
KEPCO-LG CNS Mangilao Solar, LLC	Power generation	USA	70.00	%	70.00	%
Jeju Hanlim Offshore Wind Co., Ltd.	Power generation	KOREA	68.84	%	68.84	%
PT. Siborpa Eco Power	Construction and operation of utility plant	INDONESIA	55.00	%	55.00	%
BSKE-New Industry Fund VII	Holding company	KOREA	80.86	%	80.86	%
e-New Industry LB Fund 1	Holding company	KOREA	75.36	%	75.36	%
Songhyune-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	%

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries, Continued

(1)

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


KNF Partners Co., Ltd.	Facility maintenance	KOREA		100.00	%		—
KOSPO USA Inc.	Holding company	USA		100.00	%		—
Nambu USA LLC	Holding company	USA		100.00	%		—
Tamra Offshore Wind Power Co., Ltd. (*5)	Power generation	KOREA		63.00	%		27.00	%

			Percentage of ownership (%)
Subsidiaries	Key operation activities	Location	June 30, 2019			December 31, 2018
KEPCO MCS Co., Ltd.	Electric meter reading and others	KOREA		100.00	%		—
KEPCO FMS Co., Ltd.	Security service	KOREA		100.00	%		—
Firstkeepers Co., Ltd.	Facility maintenance	KOREA		100.00	%		—
Secutec Co., Ltd.	Security service	KOREA		100.00	%		—
SE Green Energy Co., Ltd. (*5)	Power generation	KOREA		84.80	%		47.76	%

(*1)	Considering treasury stocks, the effective percentage of ownership is 66.08%.

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

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

(*4)

The Group guarantees a certain return on investment related to Commerce and Industry Energy Co., Ltd. for the financial investors. The financial investors have a right to sell their shares to the Group which can be exercised 84 months after the date of investment. Accordingly, the purchase price including the return on investment is classified as a liability.

(*5)	Re-classified from an associate to a subsidiary due to additional acquisition of interest.

(2)

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


Subsidiary		Reason
KNF Partners Co., Ltd.		Newly established
KOSPO USA Inc.		Newly established
Nambu USA LLC		Newly established
Tamra Offshore Wind Power Co., Ltd.		Additional acquisition
KEPCO MCS Co., Ltd.		Newly established
KEPCO FMS Co., Ltd.		Newly established
Firstkeepers Co., Ltd.		Newly established
Secutec Co., Ltd.		Newly established
SE Green Energy Co., Ltd.		Additional acquisition


Subsidiary		Reason
KEPCO Singapore Holdings Pte., Ltd.		Under Liquidation Process

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries, Continued

(3)

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


In millions of won
June 30, 2019
Subsidiaries		Total assets		Total liabilities		Sales		Profit (loss) for the period
Korea Hydro & Nuclear Power Co., Ltd.	W		56,977,044		31,238,815		4,593,448		492,750
Korea South-East Power Co., Ltd.			11,101,489		5,980,760		2,711,439		74,363
Korea Midland Power Co., Ltd.			12,152,831		8,455,537		1,969,421		(56,078	)
Korea Western Power Co., Ltd.			10,536,788		6,724,075		1,951,551		(124,552	)
Korea Southern Power Co., Ltd.			10,492,045		6,112,305		2,612,632		45,933
Korea East-West Power Co., Ltd.			9,201,589		4,461,152		2,551,219		73,583
KEPCO Engineering & Construction Company, Inc.			705,430		243,134		184,402		14,482
KEPCO Plant Service & Engineering Co., Ltd.			1,257,660		317,192		570,519		60,283
KEPCO Nuclear Fuel Co., Ltd.			783,201		385,249		162,016		22,728
KEPCO KDN Co., Ltd.			552,886		163,846		245,550		9,467
Garolim Tidal Power Plant Co., Ltd.			601		345		—		(6	)
KEPCO International HongKong Ltd.			147,201		1		—		2,229
KEPCO International Philippines Inc.			106,137		8		—		37,535
KEPCO Gansu International Ltd.			10,444		544		—		(3	)
KEPCO Philippines Holdings Inc.			203,592		10,244		—		28,543
KEPCO Philippines Corporation			5,753		56		—		(658	)
KEPCO Ilijan Corporation			407,427		55,016		47,418		21,030
KEPCO Lebanon SARL			1,859		9,776		—		279
KEPCO Neimenggu International Ltd.			200,904		—		—		(130	)
KEPCO Shanxi International Ltd.			548,980		214,291		—		5,364
KOMIPO Global Pte Ltd.			264,659		424		—		6,672
KEPCO Netherlands B.V.			122,404		77		—		998
KOREA Imouraren Uranium Investment Corp.			63,469		121		—		(21	)
KEPCO Australia Pty., Ltd.			396,475		14		—		(7	)
KOSEP Australia Pty., Ltd.			41,335		5,018		7,540		1,113
KOMIPO Australia Pty., Ltd.			42,035		5,171		8,207		2,642
KOWEPO Australia Pty., Ltd.			42,449		5,236		8,207		1,564
KOSPO Australia Pty., Ltd.			38,597		2,940		8,207		1,773
KEPCO Middle East Holding Company			98,377		88,973		—		964
Qatrana Electric Power Company			491,443		321,982		10,237		10,022
KHNP Canada Energy, Ltd.			56,417		45		—		(3	)
KEPCO Bylong Australia Pty., Ltd.			248,824		340,040		—		(2,302	)
Korea Waterbury Uranium Limited Partnership			20,902		165		—		(31	)
Korea Electric Power Nigeria Ltd.			27		29		228		(64	)
KEPCO Holdings de Mexico			198		33		—		(9	)
KST Electric Power Company			536,817		430,304		24,642		8,592
KEPCO Energy Service Company			1,898		988		2,951		391
KEPCO Netherlands S3 B.V.			47,660		77		—		389
PT. KOMIPO Pembangkitan Jawa Bali			11,925		4,739		9,303		4,833
PT. Cirebon Power Service			2,061		481		3,902		207
KOWEPO International Corporation			—		10		—		—
KOSPO Jordan LLC			16,532		1,525		5,313		1,650
EWP Philippines Corporation			1,690		881		—		(96	)
EWP America Inc. (*1)			71,563		4,548		13,022		(3,348	)

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries, Continued

(3)

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


KNF Canada Energy Limited	1,978	29	—	(22	)
EWP Barbados 1 SRL	276,440	378	1,433	385
Gyeonggi Green Energy Co., Ltd.	273,239	166,815	17,330	(4,587	)
PT. Tanggamus Electric Power	233,839	195,468	1,298	1,118
Gyeongju Wind Power Co., Ltd.	118,323	80,171	9,838	3,197
KOMIPO America Inc.	10,121	592	192	(317	)
KOSEP USA, INC.	1	5,143	—	(117	)
PT. EWP Indonesia	31,370	—	—	1,839
KEPCO Netherlands J3 B.V.	119,989	126	—	(49	)
Korea Offshore Wind Power Co., Ltd.	233,199	60,035	—	(6,573	)
Global One Pioneer B.V.	136	86	—	(53	)
Global Energy Pioneer B.V.	304	71	—	(35	)
Mira Power Limited	335,129	269,319	—	(494	)
KOSEP Material Co., Ltd.	3,053	1,351	1,666	90
Commerce and Industry Energy Co., Ltd.	97,452	45,418	19,135	(2,828	)


In millions of won
June 30, 2019
Subsidiaries		Total assets		Total liabilities		Sales		Profit (loss) for the period
KEPCO KPS Philippines Corp.	W		7,749		555		1,438		(384	)
KOSPO Chile SpA			150,336		64,729		—		(413	)
PT. KOWEPO Sumsel Operation And Maintenance Services			861		156		—		(467	)
HeeMang Sunlight Power Co., Ltd.			12,215		8,548		323		103
Fujeij Wind Power Company			231,521		212,525		—		803
KOSPO Youngnam Power Co., Ltd.			397,990		309,686		154,229		421
HI Carbon Professional Private Special Asset Investment Trust 1			2,996		—		—		6
Chitose Solar Power Plant LLC			120,051		107,261		8,933		1,670
KEPCO Energy Solution Co. Ltd.			307,058		2,384		1,500		1,419
Solar School Plant Co., Ltd.			205,043		850		995		1,277
KOSPO Power Services Limitada			4,953		1,662		6,336		1,851
Energy New Industry Specialized Investment Private Investment Trust (*2)			66,491		1,897		—		(3,361	)
KOEN Bylong Pty., Ltd.			4,155		25		—		—
KOMIPO Bylong Pty., Ltd.			4,157		27		—		—
KOWEPO Bylong Pty., Ltd.			4,157		27		—		—
KOSPO Bylong Pty., Ltd.			4,157		27		—		—
EWP Bylong Pty., Ltd.			4,157		27		—		—
KOWEPO Lao International			4,651		720		2,111		555
KEPCO US Inc.			17,216		—		—		—
KEPCO Alamosa LLC			33,509		30		60		(132	)
KEPCO Solar of Alamosa, LLC (formerly, Cogentrix of Alamosa, LLC)			65,208		48,981		4,183		(638	)
KEPCO-LG CNS Mangilao Holdings LLC			26,665		28,357		—		(432	)
Mangilao Investment LLC			26,664		—		—		—
KEPCO-LG CNS Mangilao Solar, LLC			26,368		9		—		(225	)
Jeju Hanlim Offshore Wind Co., Ltd.			15,099		413		—		(1,543	)
PT. Siborpa Eco Power			12,193		60		—		(511	)
PT. Korea Energy Indonesia			1,426		65		1,209		162

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries, Continued

(3)

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


KOLAT SpA	39,354	718	—	(569	)
KEPCO California, LLC	43,553	21	352	(76	)
KEPCO Mojave Holdings, LLC	104,804	68,426	—	(2,027	)
Incheon Fuel Cell Co., Ltd.	22,893	84	—	(395	)
KOEN Service Co., Ltd.	4,467	2,414	11,185	1,501
KOMIPO Service Co., Ltd.	3,898	2,863	11,759	477
KOWEPO Service Co., Ltd.	3,759	1,362	11,507	1,861
KOSPO Service Co., Ltd.	2,780	2,015	7,166	194
EWP Service Co., Ltd.	1,346	588	6,743	197
PT. KOMIPO Energy Indonesia	1,793	10	—	(545	)
KNF partners Co., Ltd.	595	397	662	(102	)
KOSPO USA Inc.	3,187	86	—	(308	)
Nambu USA LLC	—	1	—	(1	)
Tamra Offshore Wind Power Co., Ltd.	162,262	126,619	10,668	1,813
KEPCO MCS Co., Ltd.	19,062	14,490	26,573	3,622
KEPCO FMS Co., Ltd.	570	364	328	(294	)
Firstkeepers Co., Ltd.	990	—	—	—
Secutec Co., Ltd.	690	—	—	—
SE Green Energy Co., Ltd.	26,348	56	—	—

(*1)	Financial information of EWP America Inc. includes that of six other subsidiaries, EWP Renewable Corporation, DG Fairhaven Power, LLC, DG Whitefield, LLC, Springfield Power, LLC, California Power Holdings, LLC, and EWPRC Biomass Holdings, LLC.

(*2)	Financial information of Energy New Industry Specialized Investment Private Investment Trust includes that of three other subsidiaries, BSKE-New Industry Fund VII,e-New Industry LB Fund 1 and Songhyune-New Industry Fund.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries, Continued

(3)

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


In millions of won
December 31, 2018
Subsidiaries		Total assets		Total liabilities		Sales		Profit (loss) for the period
Korea Hydro & Nuclear Power Co., Ltd.	W		55,792,704		30,484,104		8,858,717		(137,613	)
Korea South-East Power Co., Ltd.			9,997,758		4,948,553		5,521,038		25,736
Korea Midland Power Co., Ltd.			10,839,218		7,088,013		4,368,467		(38,142	)
Korea Western Power Co., Ltd.			9,902,752		5,965,410		4,841,261		(28,157	)
Korea Southern Power Co., Ltd.			9,810,985		5,463,721		5,539,793		55,439
Korea East-West Power Co., Ltd.			8,744,380		4,092,460		4,933,525		3,345
KEPCO Engineering & Construction Company, Inc.			771,480		310,100		433,701		12,937
KEPCO Plant Service & Engineering Co., Ltd.			1,275,365		296,428		1,239,604		160,791
KEPCO Nuclear Fuel Co., Ltd.			817,416		434,439		230,667		15,835
KEPCO KDN Co., Ltd.			566,807		159,423		622,154		60,016
Garolim Tidal Power Plant Co., Ltd.			608		345		—		(11	)
KEPCO International HongKong Ltd.			140,101		1		—		3,307
KEPCO International Philippines Inc.			107,948		1,475		—		52,539
KEPCO Gansu International Ltd.			12,047		515		—		(24	)
KEPCO Philippines Holdings Inc.			188,551		9,775		—		53,219
KEPCO Philippines Corporation			6,394		213		—		54
KEPCO Ilijan Corporation			431,444		53,413		99,844		49,631
KEPCO Lebanon SARL			1,509		9,686		—		413
KEPCO Neimenggu International Ltd.			194,336		—		—		20,829
KEPCO Shanxi International Ltd.			519,991		201,732		—		290
KOMIPO Global Pte Ltd.			250,456		961		—		11,478
KEPCO Netherlands B.V.			130,460		77		—		26,550
KOREA Imouraren Uranium Investment Corp.			63,517		171		—		(89,852	)
KEPCO Australia Pty., Ltd.			439,719		14		—		49
KOSEP Australia Pty., Ltd.			37,057		2,832		20,294		7,315
KOMIPO Australia Pty., Ltd.			39,066		4,659		20,294		7,193
KOWEPO Australia Pty., Ltd.			39,341		4,702		20,294		7,316
KOSPO Australia Pty., Ltd.			36,525		3,585		20,294		9,520
KEPCO Middle East Holding Company			101,201		92,862		—		3,043
Qatrana Electric Power Company			484,383		326,486		18,766		21,170
KHNP Canada Energy, Ltd.			49,776		35		—		(26	)
KEPCO Bylong Australia Pty., Ltd.			254,398		315,921		—		(29,573	)
Korea Waterbury Uranium Limited Partnership			20,890		142		—		(74	)
Korea Electric Power Nigeria Ltd.			112		39		727		(93	)
KEPCO Holdings de Mexico			248		57		—		(11	)
KST Electric Power Company			535,807		457,867		109,735		10,274
KEPCO Energy Service Company			1,940		1,454		5,117		(232	)
KEPCO Netherlands S3 B.V.			46,518		38		—		1,226
PT. KOMIPO Pembangkitan Jawa Bali			11,405		5,472		20,320		3,925
PT. Cirebon Power Service			1,588		273		7,228		177
KOWEPO International Corporation			—		8		—		—
KOSPO Jordan LLC			16,315		3,432		34,371		1,907
EWP Philippines Corporation			1,684		829		—		(11	)
EWP America Inc. (*1)			72,525		4,903		29,557		(4,483	)

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries, Continued

(3)

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


KNF Canada Energy Limited	1,801	20	—	(45	)
EWP Barbados 1 SRL	268,033	1,581	688	11,221
Gyeonggi Green Energy Co., Ltd.	293,812	185,043	96,442	25,121
PT. Tanggamus Electric Power	216,321	187,502	26,832	9,338
Gyeongju Wind Power Co., Ltd.	122,303	83,348	21,906	8,803
KOMIPO America Inc.	10,092	572	—	(885	)
KOSEP USA, INC.	1	4,857	—	4,341
PT. EWP Indonesia	7,444	14	—	3,138
KEPCO Netherlands J3 B.V.	115,978	77	—	(104	)
Korea Offshore Wind Power Co., Ltd.	216,114	36,377	—	(8,473	)
Global One Pioneer B.V.	162	87	—	(113	)
Global Energy Pioneer B.V.	325	74	—	(102	)


In millions of won
December 31, 2018
Subsidiaries		Total assets		Total liabilities		Sales		Profit (loss) for the period
Mira Power Limited	W		277,525		213,104		—		(980	)
KOSEP Material Co., Ltd.			2,862		1,249		3,240		377
Commerce and Industry Energy Co., Ltd.			92,872		88,009		27,937		(6,091	)
KEPCO Singapore Holdings Pte., Ltd.			582		9		—		(31	)
KEPCO KPS Philippines Corp.			7,501		358		4,815		766
KOSPO Chile SpA			139,814		57,502		—		1,016
PT. KOWEPO Sumsel Operation And Maintenance Services			1,313		394		4,343		(654	)
HeeMang Sunlight Power Co., Ltd.			10,915		7,626		146		(192	)
Fujeij Wind Power Company			217,796		212,435		—		(1,033	)
KOSPO Youngnam Power Co., Ltd.			413,472		325,589		369,669		8,155
HI Carbon Professional Private Special Asset Investment Trust 1			3,002		—		—		12
Chitose Solar Power Plant LLC			115,505		105,079		15,022		872
KEPCO Energy Solution Co. Ltd.			304,103		849		5,584		2,532
Solar School Plant Co., Ltd.			204,282		1,366		1,149		2,033
KOSPO Power Services Limitada			3,045		596		9,610		1,132
Energy New Industry Specialized Investment Private Investment Trust (*2)			66,498		1,014		—		(1,140	)
KOEN Bylong Pty., Ltd.			5,544		26		—		(10	)
KOMIPO Bylong Pty., Ltd.			5,544		26		—		(25	)
KOWEPO Bylong Pty., Ltd.			5,544		26		—		—
KOSPO Bylong Pty., Ltd.			5,544		26		—		(25	)
EWP Bylong Pty., Ltd.			5,544		16		—		(15	)
KOWEPO Lao International			3,800		1,015		2,899		895
KEPCO US Inc.			16,640		—		—		6
KEPCO Alamosa LLC			32,346		79		750		(688	)
KEPCO Solar of Alamosa, LLC (formerly, Cogentrix of Alamosa, LLC)			64,223		48,819		9,015		200
KEPCO-LG CNS Mangilao Holdings LLC			25,642		27,197		—		(1,144	)
Mangilao Investment LLC			25,641		—		—		—
KEPCO-LG CNS Mangilao Solar, LLC			25,406		146		—		(104	)
Jeju Hanlim Offshore Wind Co., Ltd.			16,557		328		—		(925	)

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries, Continued

(3)

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


PT. Siborpa Eco Power	12,363	141	—	(1,771	)
PT. Korea Energy Indonesia	1,183	60	1,459	223
KOLAT SpA	38,362	474	585	(186	)
KEPCO California, LLC	42,171	21	—	(332	)
KEPCO Mojave Holdings, LLC	103,189	65,730	—	(3,959	)
Incheon Fuel Cell Co., Ltd.	23,626	415	—	(201	)
KOEN Service Co., Ltd.	583	31	—	(48	)
KOMIPO Service Co., Ltd.	576	17	—	(41	)
KOWEPO Service Co., Ltd.	750	227	—	(77	)
KOSPO Service Co., Ltd.	576	6	—	(30	)
EWP Service Co., Ltd.	667	97	—	(30	)
PT. KOMIPO Energy Indonesia	2,236	—	—	—

(*1)

Financial information of EWP America Inc. includes that of six other subsidiaries, EWP Renewable Corporation, DG Fairhaven Power, LLC, DG Whitefield, LLC, Springfield Power, LLC, California Power Holdings, LLC, and EWPRC Biomass Holdings, LLC.

(*2)

Financial information of Energy New Industry Specialized Investment Private Investment Trust includes that of three other subsidiaries, BSKE-New Industry Fund VII,e-New Industry LB Fund 1 and Songhyune-New Industry Fund.

(4)

Significant restrictions on the Group’s power over the subsidiaries as of June 30, 2019 are as follows:


Company		Nature and extent of any significant restrictions
Gyeonggi Green Energy Co., Ltd.		Acquisition or disposal of assets of more thanW35 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 thanW20 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.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries, Continued

(5)

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


In millions of won
June 30, 2019
Description		KEPCO Ilijan Corporation			KEPCO Plant Service & Engineering Co., Ltd.			KEPCO Engineering & Construction Company, Inc.			Others			Total
Percentage of ownership			49.00	%		49.00	%		33.92	%
Current assets	W		167,930			674,593			214,117			908,386			1,965,026
Non-current assets			239,497			583,067			491,313			2,988,981			4,302,858
Current liabilities			(6,883	)		(241,396	)		(165,471	)		(541,198	)		(954,948	)
Non-current liabilities			(48,133	)		(75,796	)		(77,663	)		(1,937,304	)		(2,138,896	)
Net assets			352,411			940,468			462,296			1,418,865			3,174,040
Book value ofnon-controlling interest			172,681			460,829			156,811			717,985			1,508,306
Sales			47,418			570,519			184,402			442,244			1,244,583
Profit for the period			21,030			60,283			14,482			45,349			141,144
Profit for the period attributable tonon-controlling interest			10,305			29,539			4,912			9,792			54,548
Cash flows from operating activities			43,185			33,365			8,912			156,242			241,704
Cash flows from investing activities			3,861			79,478			26,576			(142,886	)		(32,971	)
Cash flows from financing activities before dividends tonon-controlling interest			(30,150	)		(42,471	)		(33,750	)		(11,036	)		(117,407	)
Dividends tonon-controlling interest			(28,967	)		(39,470	)		(1,807	)		(7,404	)		(77,648	)
Effect of exchange rate fluctuation			1,871			(428	)		(49	)		(8,886	)		(7,492	)
Net increase (decrease) of cash and cash equivalents			(10,200	)		30,474			(118	)		(13,970	)		6,186

In millions of won
December 31, 2018
Description		KEPCO Ilijan Corporation			KEPCO Plant Service & Engineering Co., Ltd.			KEPCO Engineering & Construction Company, Inc.			Others			Total
Percentage of ownership			49.00	%		49.00	%		33.92	%
Current assets	W		163,622			628,725			281,390			956,928			2,030,665
Non-current assets			267,822			646,640			490,090			2,760,500			4,165,052
Current liabilities			(16,819	)		(270,097	)		(248,402	)		(559,552	)		(1,094,870	)
Non-current liabilities			(36,594	)		(26,331	)		(61,698	)		(1,933,583	)		(2,058,206	)
Net assets			378,031			978,937			461,380			1,224,293			3,042,641
Book value ofnon-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 tonon-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 tonon-controlling interest			(53,733	)		(33,737	)		(14,591	)		(374,669	)		(476,730	)
Dividends tonon-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	)

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

17.

Consolidated Subsidiaries, Continued

(6)

Changes in goodwill

(i) Details of goodwill as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019		December 31, 2018
Acquisition cost	W		2,582		2,582
Accumulated impairment			—		—

Carrying book value	W		2,582		2,582

(ii) There are no changes in goodwill for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018.

(7)

Disposals of subsidiaries

The Group receivedW578 million as residual assets from the liquidation of its subsidiary, KEPCO Singapore Holdings Pte., Ltd., during thesix-month period ended June 30, 2019, and KEPCO Singapore Holdings Pte., Ltd. is in the process of completing the registration of liquidation.

18.

Investments in Associates and Joint Ventures

(1)

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


In millions of won
June 30, 2019
Investees	Key operation activities	Location		Percentage of ownership				Acquisition cost		Book value
<Associates>
Korea Gas Corporation (*1)	Importing and wholesaling LNG		KOREA		20.47	%	W		94,500		1,784,947
Gemeng International Energy Co., Ltd.	Power generation		CHINA		34.00	%			413,153		664,020
PT. Bayan Resources TBK	Resources development		INDONESIA		20.00	%			615,860		453,190
Korea Power Exchange (*2)	Management of power market and others		KOREA		100.00	%			127,839		265,271
Hyundai Green Power Co., Ltd.	Power generation		KOREA		29.00	%			88,885		127,571
S-Power Co., Ltd.	Power generation		KOREA		49.00	%			132,300		116,351
PT. Cirebon Electric Power	Power generation		INDONESIA		27.50	%			40,365		118,019
Dongducheon Dream Power Co., Ltd. (*3)	Power generation		KOREA		33.61	%			148,105		71,840
Xe-PianXe-Namnoy Power Co., Ltd.	Power generation		LAOS		25.00	%			87,426		72,479
Shin Pyeongtaek Power Co., Ltd.	Power generation		KOREA		40.00	%			72,000		64,168
SPC Power Corporation	Power generation		PHILIPPINES		38.00	%			20,635		63,301
Korea Electric Power Corporation Fund (*4)	Developing electric enterprises		KOREA		98.09	%			51,500		46,038
YTN Co., Ltd.	Broadcasting		KOREA		21.43	%			59,000		39,123
Nepal Water & Energy Development Company Private Limited (*5)	Construction and operation of utility plant		NEPAL		57.67	%			35,571		31,539
PT Wampu Electric Power	Power generation		INDONESIA		46.00	%			21,292		31,741
Others (Daeryun Power Co., Ltd. and 45 others)									316,131		152,762

							W		2,324,562		4,102,360

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(1)

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


In millions of won
June 30, 2019
Investees	Key operation activities		Location		Percentage of ownership				Acquisition cost		Book value
<Joint ventures>
GS Donghae Electric Power Co., Ltd.		Power generation		KOREA		34.00	%	W		204,000		249,461
Jamaica Public Service Company Limited		Power generation		JAMAICA		40.00	%			301,910		248,691
KEPCO SPC Power Corporation (*6)		Construction and operation of utility plant		PHILIPPINES		75.20	%			94,579		220,903
Amman Asia Electric Power Company (*6)		Power generation		JORDAN		60.00	%			111,476		181,649
Datang Chifeng Renewable Power Co., Ltd.		Power generation		CHINA		40.00	%			121,928		183,468
Rabigh Electricity Company		Power generation		SAUDI ARABIA		40.00	%			109,743		82,545
Kelar S.A (*6)		Power generation		CHILE		65.00	%			78,060		69,958
RE Holiday Holdings LLC		Power generation		USA		50.00	%			42,948		42,014
Solar Philippines Calatagan Corporation		Power generation		PHILIPPINES		38.00	%			47,903		48,456
Daegu Green Power Co., Ltd.		Power generation		KOREA		29.00	%			46,225		44,123
Chun-cheon Energy Co., Ltd.		Power generation		KOREA		29.90	%			52,700		39,317
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		Power generation		CHINA		40.00	%			10,858		42,530
RE Barren Ridge 1 Holdings LLC		Power generation		USA		50.00	%			28,021		41,835
RE Pioneer Holdings LLC		Power generation		USA		50.00	%			27,891		32,860
Chile Solar JV SpA		Power generation		CHILE		50.00	%			37,689		37,319
PT. Tanjung Power Indonesia		Power generation		INDONESIA		35.00	%			26,892		31,167
Others (Shuweihat Asia Power Investment B.V.and 41 others)										344,238		281,790

										1,687,061		1,878,086

								W		4,011,623		5,980,446

(*1)	The effective percentage of ownership is 21.57% including treasury stocks.

(*2)

The effective percentage of ownership is 100%. However, the Government regulates the Group’s ability to make operating and financial decisions over the entity, as the Government requires maintaining arms-length transactions between KPX and the Group’s other subsidiaries. The Group can exercise significant influence by its right to nominate directors to the board of directors of the entity.

(*3)	The effective percentage of ownership is 34.01% including redeemable convertible preferred stock.

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

(*5)	The effective percentage of ownership is more than 50% but the Group does not hold control over the entity according to the shareholders’ agreement. For this reason, the entity is classified as an associate.

(*6)	The effective percentage of ownership is more than 50%. However, according to the shareholders’ agreement, all critical financial and operating decisions must be agreed to by all ownership parties. For this reason, the entities are classified as joint ventures.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(1)

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


In millions of won
December 31, 2018
Investees	Key operation activities	Location		Percentage of ownership				Acquisition cost		Book value
<Associates>
Korea Gas Corporation (*1)	Importing and wholesaling LNG		KOREA		20.47	%	W		94,500		1,701,848
Gemeng International Energy Co., Ltd.	Power generation		CHINA		34.00	%			413,153		647,010
PT. Bayan Resources TBK	Resources development		INDONESIA		20.00	%			615,860		511,646
Korea Power Exchange (*2)	Management of power market and others		KOREA		100.00	%			127,839		251,802
Hyundai Green Power Co., Ltd.	Power generation		KOREA		29.00	%			88,885		127,160
S-Power Co., Ltd.	Power generation		KOREA		49.00	%			132,300		114,566
PT. Cirebon Electric Power	Power generation		INDONESIA		27.50	%			40,365		108,628
Dongducheon Dream Power Co., Ltd. (*3)	Power generation		KOREA		33.61	%			148,105		76,386
Xe-PianXe-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.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(1)

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

(*2)

(*3)	The effective percentage of ownership is 34.01% including redeemable convertible preferred stock.

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

(*5)	The effective percentage of ownership is more than 50% but the Group does not hold control over the entity according to the shareholders’ agreement. For this reason, the entity is classified as an associate.

(*6)	The effective percentage of ownership is more than 50%. However, according to the shareholders’ agreement, all critical financial and operating decisions must be agreed to by all ownership parties. For this reason, the entities are classified as joint ventures.

(2)

The fair value of associates which are actively traded on an open market and have a readily available market value as of

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


In millions of won
Investees		June 30, 2019		December 31, 2018
<Associates>
Korea Electric Power Industrial Development Co., Ltd.	W		34,129		33,609
Korea Gas Corporation			797,580		910,980
YTN Co., Ltd.			17,955		18,900
SPC Power Corporation			93,157		72,710
PT. Bayan Resources TBK			1,063,401		1,017,601

(3)

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


In millions of won
June 30, 2019
Investees		Beginning balance		Acquisition		Disposal		Dividends received			Share of income (loss)			Other comprehen- sive income (loss)			Others			Ending balance
<Associates>
Korea Gas Corporation	W		1,701,848		—		—		(25,704	)		109,072			506			(775	)		1,784,947
Gemeng International Energy Co., Ltd.			647,010		—		—		(11,468	)		7,753			20,725			—			664,020
PT. Bayan Resources TBK			511,646		—		—		(71,100	)		14,574			(1,930	)		—			453,190
Korea Power Exchange			251,802		—		—		—			13,469			—			—			265,271
Hyundai Green Power Co., Ltd.			127,160		—		—		(8,889	)		9,300			—			—			127,571
S-Power Co., Ltd.			114,566		—		—		—			1,785			—			—			116,351
PT. Cirebon Electric Power			108,628		—		—		—			6,419			2,972			—			118,019
Dongducheon Dream Power Co., Ltd.			76,386		—		—		—			(4,546	)		—			—			71,840
Xe-PianXe-Namnoy Power Co., Ltd.			77,165		3,052		—		—			(10,428	)		2,690			—			72,479
Shin Pyeongtaek Power Co., Ltd.			67,600		—		—		—			(3,532	)		100			—			64,168
SPC Power Corporation			57,558		—		—		(5,055	)		3,801			6,952			45			63,301
Korea Electric Power Corporation Fund			47,189		—		—		—			(1,463	)		312			—			46,038

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(3)

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


YTN Co., Ltd.		40,338	—	—	(180	)	(1,178	)	11		132		39,123
Nepal Water & Energy Development Company Private Limited		30,961	—	—	—		(427	)	1,005		—		31,539
PT Wampu Electric Power		31,097	—	—	—		(428	)	1,072		—		31,741
Others		173,866	2,533	—	(4,197	)	(422	)	(987	)	(18,031	)	152,762

	W	4,064,820	5,585	—	(126,593	)	143,749		33,428		(18,629	)	4,102,360


In millions of won
June 30, 2019
Investees		Beginning balance		Acquisition		Disposal		Dividends received		��	Share of income (loss)			Other comprehen- sive income (loss)			Others			Ending balance
<Joint ventures>
GS Donghae Electric Power Co., Ltd.	W		240,591		—		—		(10,200	)		19,070			—			—			249,461
Jamaica Public Service Company Limited			239,632		—		—		—			758			16,603			(8,302	)		248,691
KEPCO SPC Power Corporation			208,306		—		—		(17,839	)		21,347			9,077			12			220,903
Amman Asia Electric Power Company			177,357		—		—		—			9,915			(5,623	)		—			181,649
Datang Chifeng Renewable Power Co., Ltd.			166,162		—		—		—			11,912			5,394			—			183,468
Rabigh Electricity Company			105,328		—		—		—			(17,714	)		(4,359	)		(710	)		82,545
Kelar S.A			72,824		—		—		—			2,938			(5,893	)		89			69,958
RE Holiday Holdings LLC			51,094		—		—		—			(8,151	)		(929	)		—			42,014
Solar Philippines Calatagan Corporation			47,903		—		—		(3,026	)		2,341			1,238			—			48,456
Daegu Green Power Co., Ltd.			41,110		—		—		—			3,013			—			—			44,123
Chun-cheon Energy Co., Ltd.			42,505		—		—		—			(3,188	)		—			—			39,317
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			39,442		—		—		—			1,782			1,306			—			42,530
RE Barren Ridge 1 Holdings LLC			41,415		—		—		(1,020	)		1,270			170			—			41,835
RE Pioneer Holdings LLC			38,898		—		—		(675	)		(5,430	)		67			—			32,860
Chile Solar JV SpA			36,865		—		—		—			(609	)		1,063			—			37,319
PT. Tanjung Power Indonesia			7,081		26,146		—		—			1,995			(4,051	)		(4	)		31,167
Others			257,012		27,002		—		(6,917	)		2,826			(481	)		2,348			281,790

			1,813,525		53,148		—		(39,677	)		44,075			13,582			(6,567	)		1,878,086

	W		5,878,345		58,733		—		(166,270	)		187,824			47,010			(25,196	)		5,980,446

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(3)

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



In millions of won
December 31, 2018
Investees		Beginning balance		Acquisition		Disposal		Dividends received			Share of income (loss)			Other comprehen- sive income (loss)			Others			Ending balance
<Associates>
Korea Gas Corporation	W		1,618,868		—		—		—			107,952			(24,843	)		(129	)		1,701,848
Gemeng International Energy Co., Ltd.			649,973		—		—		(11,246	)		15,156			(6,873	)		—			647,010
PT. Bayan Resources TBK			451,831		—		—		(33,651	)		74,776			18,690			—			511,646
Korea Power Exchange			237,631		—		—		—			16,031			—			(1,860	)		251,802
Hyundai Green Power Co., Ltd.			114,806		—		—		(8,889	)		21,243			—			—			127,160
S-Power Co., Ltd.			116,945		—		—		—			(2,326	)		—			(53	)		114,566
PT. Cirebon Electric Power			97,410		—		—		(4,432	)		9,385			6,265			—			108,628
Dongducheon Dream Power Co., Ltd.			53,233		36,971		—		—			(13,824	)		—			6			76,386
Xe-PianXe-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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(3)

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


In millions of won
December 31, 2018
Investees		Beginning balance		Acquisition		Disposal			Dividends received			Share of income (loss)			Other comprehen- sive income (loss)			Others			Ending balance
<Joint ventures>
GS Donghae Electric Power Co., Ltd.	W		220,727		—		—			—			20,061			—			(197	)		240,591
Jamaica Public Service Company Limited			221,153		—		—			(4,472	)		13,099			9,852			—			239,632
KEPCO SPC Power Corporation			217,094		—		—			(41,601	)		44,909			(12,092	)		(4	)		208,306
Amman Asia Electric Power Company			145,676		—		—			—			19,604			12,077			—			177,357
Datang Chifeng Renewable Power Co., Ltd.			171,055		—		—			(18,859	)		14,808			(842	)		—			166,162
Rabigh Electricity Company			99,356		—		—			(29,067	)		13,305			22,371			(637	)		105,328
Kelar S.A			67,233		—		—			—			2,732			2,859			—			72,824
RE Holiday Holdings LLC			—		42,948		—			(112	)		8,055			203			—			51,094
Solar Philippines Calatagan Corporation			—		47,903		—			—			—			—			—			47,903
Daegu Green Power Co., Ltd.			42,391		—		—			—			(1,283	)		—			2			41,110
Chun-cheon Energy Co., Ltd.			48,118		—		—			—			(5,613	)		—			—			42,505
Datang KEPCO Chaoyang Renewable Power Co., Ltd.(*)			11,060		—		—			—			582			(1,214	)		29,014			39,442
RE Barren Ridge 1 Holdings LLC			—		28,021		—			(1,114	)		13,994			514			—			41,415
RE Pioneer Holdings LLC			—		27,891		—			(979	)		11,585			401			—			38,898
Chile Solar JV SpA			—		36,654		—			—			4,453			(5,278	)		1,036			36,865
PT. Tanjung Power Indonesia			1,776		—		—			—			3,373			1,928			4			7,081
Others			247,636		53,725		(1,632	)		(5,922	)		(16,572	)		10,206			(30,429	)		257,012

			1,493,275		237,142		(1,632	)		(102,126	)		147,092			40,985			(1,211	)		1,813,525

	W		5,330,696		319,425		(1,632	)		(175,175	)		363,101			55,133			(13,203	)		5,878,345

(*)	Datang Chaoyang Renewable Power Co., Ltd. was merged with Datang KEPCO Chaoyang Renewable Power Co., Ltd. during the year ended December 31, 2018.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(4)

Summary of financial information of associates and joint ventures as of and for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won
June 30, 2019
Investees		Total assets		Total liabilities		Sales		Profit (loss) for the period
<Associates>
Korea Gas Corporation	W		37,327,270		28,440,165		13,644,867		511,043
Gemeng International Energy Co., Ltd.			6,495,428		4,542,431		939,803		40,885
PT. Bayan Resources TBK			1,396,890		795,631		794,128		175,773
Korea Power Exchange			314,078		48,807		52,622		9,785
Hyundai Green Power Co., Ltd.			1,117,814		677,913		240,854		37,663
S-Power Co., Ltd.			788,021		547,156		310,718		3,533
PT. Cirebon Electric Power			879,217		450,060		140,128		22,645
Dongducheon Dream Power Co., Ltd.			1,442,120		1,187,683		344,785		(11,283	)
Xe-PianXe-Namnoy Power Co., Ltd.			1,076,492		782,354		—		(41,448	)
Shin Pyeongtaek Power Co., Ltd.			768,559		607,061		—		(726	)
SPC Power Corporation			255,687		25,094		32,240		20,076
Korea Electric Power Corporation Fund			47,021		91		466		144
YTN Co., Ltd.			275,727		93,151		55,495		(4,639	)
Nepal Water & Energy Development Company Private Limited			55,512		3,297		—		(514	)
PT Wampu Electric Power			226,317		157,314		8,383		2,923

<Joint ventures>
GS Donghae Electric Power Co., Ltd.			2,277,858		1,544,149		371,586		56,088
Jamaica Public Service Company Limited			1,418,895		828,719		504,147		6,567
KEPCO SPC Power Corporation			325,270		31,515		91,877		28,651
Amman Asia Electric Power Company			818,297		515,402		11,361		16,535
Datang Chifeng Renewable Power Co., Ltd.			782,540		323,747		70,488		29,334
Rabigh Electricity Company			2,468,920		2,078,516		84,140		(39,784	)
Kelar S.A			669,129		565,603		45,971		8,042
RE Holiday Holdings LLC			332,854		248,826		2,489		(3,538	)
Solar Philippines Calatagan Corporation			100,257		50,885		9,857		6,161
Daegu Green Power Co., Ltd.			576,391		498,711		164,645		—
Chun-cheon Energy Co., Ltd.			626,450		494,968		172,246		(10,455	)
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			195,919		89,594		14,141		4,456
RE Barren Ridge 1 Holdings LLC			215,424		131,753		2,227		924
RE Pioneer Holdings LLC			250,094		184,374		2,775		(1,728	)
Chile Solar JV SpA			75,255		618		196		(1,219	)
PT. Tanjung Power Indonesia			593,092		504,045		50,675		6,178

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(4)

Summary of financial information of associates and joint ventures as of and for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:


In millions of won
December 31, 2018
Investees		Total assets		Total liabilities		Sales		Profit (loss) for the period
<Associates>
Korea Gas Corporation	W		39,689,692		31,186,488		26,185,038		523,480
Gemeng International Energy Co., Ltd.			7,155,937		4,420,561		1,921,367		120,558
PT. Bayan Resources TBK			1,388,199		566,890		1,707,387		521,666
Korea Power Exchange			304,318		52,516		108,571		16,031
Hyundai Green Power Co., Ltd.			1,127,220		688,738		501,798		66,925
S-Power Co., Ltd.			825,354		588,022		551,378		(6,185	)
PT. Cirebon Electric Power			876,069		481,061		274,962		33,144
Dongducheon Dream Power Co., Ltd.			1,512,510		1,244,178		828,430		(22,864	)
Xe-PianXe-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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(5)

Financial information of associates and joint ventures reconciled to the Group’s investments in consolidated financial statements as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won
June 30, 2019
Investees		Net assets		Percentage of ownership (*)			Share in net assets		Investment differential			Intercompany transaction			Others			Book value
<Associates>
Korea Gas Corporation	W		8,887,105		21.57	%		1,916,949		—			—			(132,002	)		1,784,947
Gemeng International Energy Co., Ltd.			1,952,997		34.00	%		664,020		—			—			—			664,020
PT. Bayan Resources TBK			601,259		20.00	%		120,252		409,318			—			(76,380	)		453,190
Korea Power Exchange			265,271		100.00	%		265,271		—			—			—			265,271
Hyundai Green Power Co., Ltd.			439,901		29.00	%		127,571		—			—			—			127,571
S-Power Co., Ltd.			240,865		49.00	%		118,024		—			(1,673	)		—			116,351
PT. Cirebon Electric Power			429,157		27.50	%		118,019		—			—			—			118,019
Dongducheon Dream Power Co., Ltd.			254,437		34.01	%		86,534		1,757			(3,869	)		(12,582	)		71,840
Xe-PianXe-Namnoy Power Co., Ltd.			294,138		25.00	%		73,534		305			(1,071	)		(289	)		72,479
Shin Pyeongtaek Power Co., Ltd.			161,498		40.00	%		64,599		12,800			(13,231	)		—			64,168
SPC Power Corporation			230,593		38.00	%		87,625		—			—			(24,324	)		63,301
Korea Electric Power Corporation Fund			46,930		98.09	%		46,034		—			—			4			46,038
YTN Co., Ltd.			182,576		21.43	%		39,123		—			—			—			39,123
Nepal Water & Energy Development Company Private Limited			52,215		57.67	%		30,112		972			—			455			31,539
PT Wampu Electric Power			69,003		46.00	%		31,741		—			—			—			31,741

<Joint ventures>
GS Donghae Electric Power Co., Ltd.			733,709		34.00	%		249,461		—			—			—			249,461
Jamaica Public Service Company Limited			590,176		40.00	%		236,070		(80,161	)		—			92,781			248,691
KEPCO SPC Power Corporation			293,755		75.20	%		220,903		—			—			—			220,903
Amman Asia Electric Power Company			302,895		60.00	%		181,737		—			—			(88	)		181,649
Datang Chifeng Renewable Power Co., Ltd.			458,793		40.00	%		183,517		—			—			(49	)		183,468
Rabigh Electricity Company			390,404		40.00	%		156,162		—			(70,977	)		(2,640	)		82,545
Kelar S.A			103,526		65.00	%		67,292		2,666			—			—			69,958
RE Holiday Holdings LLC			84,028		50.00	%		42,014		—			—			—			42,014
Solar Philippines Calatagan Corporation			49,372		38.00	%		18,761		29,695			—			—			48,456
Daegu Green Power Co., Ltd.			77,680		29.00	%		22,527		84			—			21,512			44,123
Chun-cheon Energy Co., Ltd.			131,482		29.90	%		39,314		3			—			—			39,317
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			106,325		40.00	%		42,530		—			—			—			42,530
RE Barren Ridge 1 Holdings LLC			83,671		50.00	%		41,835		—			—			—			41,835
RE Pioneer Holdings LLC			65,720		50.00	%		32,860		—			—			—			32,860
Chile Solar JV SpA			74,637		50.00	%		37,319		—			—			—			37,319
PT. Tanjung Power Indonesia			89,047		35.00	%		31,167		—			—			—			31,167

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

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(5)

Financial information of associates and joint ventures reconciled to the Group’s investments in consolidated financial statements as of June 30, 2019 and December 31, 2018 are as follows, continued:


In millions of won
December 31, 2018
Investees		Net assets		Percentage of ownership (*)			Share in net assets		Investment differential			Intercompany transaction			Others			Book value
<Associates>
Korea Gas Corporation	W		8,503,204		21.57	%		1,834,141		—			—			(132,293	)		1,701,848
Gemeng International Energy Co., Ltd.			2,735,376		34.00	%		930,028		—			—			(283,018	)		647,010
PT. Bayan Resources TBK			821,309		20.00	%		164,262		423,763			—			(76,379	)		511,646
Korea Power Exchange			251,802		100.00	%		251,802		—			—			—			251,802
Hyundai Green Power Co., Ltd.			438,482		29.00	%		127,160		—			—			—			127,160
S-Power Co., Ltd.			237,332		49.00	%		116,293		—			(1,727	)		—			114,566
PT. Cirebon Electric Power			395,008		27.50	%		108,628		—			—			—			108,628
Dongducheon Dream Power Co., Ltd.			268,332		34.01	%		91,260		1,757			(4,049	)		(12,582	)		76,386
Xe-PianXe-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.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(6)

As of June 30, 2019 and December 31, 2018, unrecognized equity interest in investments in associates and joint ventures whose book value has been reduced to zero due to accumulated losses are as follows:


In millions of won		June 30, 2019					December 31, 2018
		Unrecognized equity interest			Accumulated unrecognized equity interest		Unrecognized equity interest			Accumulated unrecognized equity interest
Hadong Mineral Fiber Co., Ltd.	W		—			2		—			2
PT. Mutiara Jawa			—			—		(746	)		—
Eurasia Energy Holdings			6			185		7			179
Gunsan Bio Energy Co., Ltd.			592			2,794		916			2,202
Daehan Wind Power PSC			—			—		(412	)		—
Hyundai Energy Co., Ltd.			4,805			30,646		25,841			25,841
Nghi Son 2 Power LLC			66,998			108,657		41,659			41,659
Samcheok Eco Materials Co., Ltd.			(35	)		1,250		1,285			1,285
Naepo Green Energy Co., Ltd.			5,171			5,171		—			—

(7)

As of June 30, 2019, shareholders’ agreements on investments in associates and joint ventures that may cause future economic resource or cash outflows are as follows:

(i)

Gemeng International Energy Co., Ltd.

Gemeng International Energy Co., Ltd., issued put options on 8% of its shares to its financial investors, KEPCO Woori Sprott PEF (NPSCo-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 wherenon-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 wherenon-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 wherenon-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.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(7)

As of June 30, 2019, shareholders’ agreements on investments in associates and joint ventures that may cause future economic resource or cash outflows are as follows, continued:

(vi)

Daejung Offshore Wind Power Co., Ltd.

In the case where Doosan Heavy Industries Co., Ltd., aco-participant of the joint venture agreement, decides to dispose of its shares in Daejung Offshore Wind Power Co., Ltd., the Group is obligated to acquire those shares after evaluating the economic feasibility of the facilities installed by Doosan Heavy Industries Co., Ltd..

(vii)

Hyundai Green Power Co., Ltd.

As of June 30, 2019, Hyundai Green Power Co., Ltd., an associate of the Group, which engages in the byproduct gas power generating business, entered into a project financing agreement with a limit ofW852.1 billion with Korea Development Bank and others. At a certain period in the future, the Group has call option against the financial investors (Korea Development Bank and others) and also has an obligation to purchase its shares when claimed by the financial investors. At a certain period in the future, the Group has put option against Hyundai Steel Company and a third party designated by Hyundai Steel Company (collectively, “Hyundai Steel Group”), the operating investor of Hyundai Green Power Co., Ltd., according to the conditions of the agreement and also has an obligation to sell its shares upon request from Hyundai Steel Company.

(viii)

YeongGwang Yaksu Wind Electric. Co., Ltd

As of June 30, 2019, YeongGwang Yaksu Wind Electric. Co., Ltd, an associate of the Group, which engages in the wind power generating business, entered into a project financing agreement with a limit ofW46 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.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

18.

Investments in Associates and Joint Ventures, Continued

(8)

Significant restrictions on the Group’s power over associates or joint ventures as of June 30, 2019 are as follows:


Company		Nature and extent of any significant restrictions

Daeryun Power Co., Ltd.		Principals on subordinated loans or dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained.

Changjuk Wind Power Co., Ltd.		Principals on subordinated loans or dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained.

Taebaek Wind Power Co., Ltd.		Financial institutions can reject or defer an approval with regard to the request for fund executions on subordinated loans of shareholders in order to pay senior loans based on the loan agreement.

Pyeongchang Wind Power Co., Ltd.		Principals on subordinated loans or dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained.

Daegu Green Power Co., Ltd.		Principals on subordinated loans or dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained. Shares cannot be wholly or partially transferred without prior written consent of financial institutions is obtained.

KNH Solar Co., Ltd.		Principal and interest, dividends to shareholders cannot be paid without written consent of financial institutions.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

19.

Property, Plant and Equipment

(1)

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


In millions of won		June 30, 2019
		Acquisition cost		Government grants			Accumulated depreciation			Accumulated impairment losses			Book value
Land	W		13,710,003		(21,968	)		—			(27,350	)		13,660,685
Buildings			19,633,487		(61,014	)		(7,889,221	)		(3,669	)		11,679,583
Structures			67,656,684		(186,805	)		(24,601,736	)		(8,399	)		42,859,744
Machinery			83,663,776		(164,583	)		(36,604,839	)		(439,350	)		46,455,004
Ships			3,654		—			(3,403	)		—			251
Vehicles			282,417		(3,256	)		(224,189	)		(115	)		54,857
Equipment			1,603,208		(331	)		(1,267,157	)		(42	)		335,678
Tools			1,097,504		(532	)		(923,816	)		(39	)		173,117
Construction-in-progress			31,495,229		(59,532	)		—			(208,045	)		31,227,652
Right-of-use assets			7,173,402		—			(2,466,378	)		—			4,707,024
Asset retirement costs			9,458,896		—			(3,919,487	)		(146,423	)		5,392,986
Others			12,572,722		—			(9,953,411	)		—			2,619,311

	W		248,350,982		(498,021	)		(87,853,637	)		(833,432	)		159,165,892


In millions of won		December 31, 2018
		Acquisition cost		Government grants			Accumulated depreciation			Accumulated impairment losses			Book value
Land	W		13,554,292		(21,968	)		—			—			13,532,324
Buildings			19,431,536		(63,189	)		(7,494,176	)		(3,669	)		11,870,502
Structures			66,335,506		(190,854	)		(23,615,312	)		(8,399	)		42,520,941
Machinery			82,047,823		(173,242	)		(34,151,878	)		(439,350	)		47,283,353
Ships			3,655		—			(3,353	)		—			302
Vehicles			287,954		(4,220	)		(215,649	)		(116	)		67,969
Equipment			1,558,309		(418	)		(1,175,408	)		(42	)		382,441
Tools			1,073,145		(675	)		(880,432	)		(38	)		192,000
Construction-in-progress			29,026,880		(54,740	)		—			(205,713	)		28,766,427
Finance lease assets			2,390,701		(26	)		(2,194,971	)		—			195,704
Asset retirement costs			9,424,181		—			(3,706,004	)		(146,423	)		5,571,754
Others			11,875,394		—			(9,515,917	)		—			2,359,477

	W		237,009,376		(509,332	)		(82,953,100	)		(803,750	)		152,743,194

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

19.

Property, Plant and Equipment, Continued

(2)

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


In millions of won		June 30, 2019
		Beginning balance			Effect of change in accounting policy			Acquisitions			Disposals			Depreciation			*Impairment ()**			Others			Ending balance
Land	W		13,554,292			—			85,873			(24,014	)		—			(27,350	)		93,852			13,682,653
(Government grants)			(21,968	)		—			—			—			—			—			—			(21,968	)
Buildings			11,933,691			—			4,453			(5,356	)		(393,414	)		—			201,223			11,740,597
(Government grants)			(63,189	)		—			(592	)		—			2,802			—			(35	)		(61,014	)
Structures			42,711,795			—			147			(236,780	)		(1,133,177	)		—			1,704,564			43,046,549
(Government grants)			(190,854	)		—			—			888			4,662			—			(1,501	)		(186,805	)
Machinery			47,456,595			—			124,973			(125,220	)		(2,628,079	)		—			1,791,318			46,619,587
(Government grants)			(173,242	)		—			—			260			8,716			—			(317	)		(164,583	)
Ships			302			—			—			—			(51	)		—			—			251
Vehicles			72,189			—			850			(52	)		(15,812	)		—			938			58,113
(Government grants)			(4,220	)		—			(45	)		—			1,078			—			(69	)		(3,256	)
Equipment			382,859			—			16,165			(36	)		(100,206	)		—			37,227			336,009
(Government grants)			(418	)		—			(54	)		—			141			—			—			(331	)
Tools			192,675			—			6,459			(7	)		(42,843	)		—			17,365			173,649
(Government grants)			(675	)		—			—			—			143			—			—			(532	)
Construction-in-progress			28,821,167			—			5,740,613			(42	)		—			(2,335	)		(3,272,219	)		31,287,184
(Government grants)			(54,740	)		—			(6,583	)		—			—			—			1,791			(59,532	)
Finance lease assets			195,730			(195,415	)		—			—			(14	)		—			(301	)		—
(Government grants)			(26	)		26			—			—			—			—			—			—
Right-of-use assets			—			4,828,795			151,800			—			(273,570	)		—			(1	)		4,707,024
Asset retirement costs			5,571,754			—			—			—			(314,271	)		—			135,503			5,392,986
Others			2,359,477			—			754			(3,959	)		(419,436	)		—			682,475			2,619,311

	W		152,743,194			4,633,406			6,124,813			(394,318	)		(5,303,331	)		(29,685	)		1,391,813			159,165,892

(*)	KEPCO Bylong Australia Pty., Ltd., 100% owned subsidiary, performed an impairment test over the land and the Group recognized the amount of the carrying amount in excess of its recoverable amount as impairment loss.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

19.

Property, Plant and Equipment, Continued

(2)

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


In millions of won		December 31, 2018
		Beginning balance			Acquisitions			Disposals			Depreciation			*Impairment (1)**			Others			Ending balance
Land	W		13,318,542			2,254			(18,240	)		—			—			251,736			13,554,292
(Government grants)			(21,968	)		—			—			—			—			—			(21,968	)
Buildings			12,053,526			10,156			(8,545	)		(767,845	)		(1,896	)		648,295			11,933,691
(Government grants)			(63,539	)		(4,213	)		31			6,836			—			(2,304	)		(63,189	)
Structures			44,104,778			11,123			(587,278	)		(2,476,278	)		(360	)		1,659,810			42,711,795
(Government grants)			(196,414	)		—			3,270			10,292			—			(8,002	)		(190,854	)
Machinery (*2)			46,875,798			460,676			(250,159	)		(4,973,252	)		(393,839	)		5,737,371			47,456,595
(Government grants)			(183,188	)		(1,185	)		823			18,099			—			(7,791	)		(173,242	)
Ships			403			—			—			(103	)		—			2			302
Vehicles			81,038			2,774			(402	)		(32,620	)		—			21,399			72,189
(Government grants)			(6,322	)		(45	)		—			2,146			—			1			(4,220	)
Equipment			420,672			36,884			(265	)		(187,821	)		(36	)		113,425			382,859
(Government grants)			(761	)		(22	)		—			365			—			—			(418	)
Tools			200,663			12,331			(268	)		(83,283	)		(6	)		63,238			192,675
(Government grants)			(1,027	)		(44	)		—			432			—			(36	)		(675	)
Construction-in-progress			25,572,541			11,749,397			(47,463	)		—			(167,603	)		(8,285,705	)		28,821,167
(Government grants)			(49,084	)		(23,895	)		—			—			—			18,239			(54,740	)
Finance lease assets			297,679			—			—			(101,888	)		—			(61	)		195,730
(Government grants)			(27	)		—			—			1			—			—			(26	)
Asset retirement costs			6,039,484			1,988			—			(610,435	)		(146,424	)		287,141			5,571,754
Others			2,439,620			8,691			(715	)		(709,579	)		—			621,460			2,359,477

	W		150,882,414			12,266,870			(909,211	)		(9,904,933	)		(710,164	)		1,118,218			152,743,194

(*1)

Korea Hydro & Nuclear Power Co., Ltd. and Korea Western Power Co., Ltd., 100% owned subsidiaries, have determined that there are impairment indicators for the shutdowns of certain power generation units and fire, and performed an impairment test over the individual assets. As a result, the Group recognized the amount of the carrying amount in excess of its recoverable amount as impairment loss in the consolidated statements of comprehensive income.

(*2)	As described in Note 27, the amount of acquisition of machinery includesW204,787 million of that the Group believes the possibility of economic outflow is probable on the request for additional construction costs of Hyundai E&C, GS Engineering & Construction Corp. and Hansol SeenTec Co., Ltd..

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

20.

Investment Properties

(1)

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


In millions of won		June 30, 2019
		Acquisition cost		Government grants			Accumulated depreciation			Book value
Land	W		144,543		—			—			144,543
Buildings			74,638		(14	)		(39,830	)		34,794

	W		219,181		(14	)		(39,830	)		179,337


In millions of won		December 31, 2018
		Acquisition cost		Government grants			Accumulated depreciation			Book value
Land	W		139,940		—			—			139,940
Buildings			34,801		(50	)		(15,132	)		19,619

	W		174,741		(50	)		(15,132	)		159,559

(2)

Changes in investment properties for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019
		Beginning balance			Depreciation			*Others ()**			Ending balance
Land	W		139,940			—			4,603			144,543
Buildings			19,669			(4,291	)		19,430			34,808
(Government grants)			(50	)		—			36			(14	)

	W		159,559			(4,291	)		24,069			179,337


In millions of won		December 31, 2018
		Beginning balance			Depreciation			Others			Ending balance
Land	W		264,205			—			(124,265	)		139,940
Buildings			20,592			(924	)		1			19,669
(Government grants)			(83	)		1			32			(50	)

	W		284,714			(923	)		(124,232	)		159,559

(*)	As described in Note 42, the Group reclassified land and buildings amounting toW2,765 andW19,396, respectively, from assetsheld-for-sale to investment properties during thesix-month period ended June 30, 2019.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

20.

Investment Properties, Continued

(3)

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


In millions of won		June 30, 2019						June 30, 2018
		Three-month period ended			Six-month period ended			Three-month period ended			Six-month period ended
Rental income	W		2,872			5,079			1,819			4,680
Operating and maintenance expenses related to rental income			(235	)		(479	)		(218	)		(508	)
Operating and maintenance expenses not related to rental Income			(3,812	)		(3,812	)		—			—

	W		(1,175	)		788			1,601			4,172

(4)

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


In millions of won		June 30, 2019				December 31, 2018
		Book value		Fair value		Book value		Fair value
Land	W		144,543		222,797		139,940		167,178
Buildings			34,794		44,541		19,619		23,276

	W		179,337		267,338		159,559		190,454

The fair values of the investment properties as of the reporting date were determined in consideration of the fluctuation on the publicly announced individual land price after the KIFRS transition date (January 1, 2010).

(5)

All of the Group’s investment property is held under freehold interests.

21.

Construction Contracts

(1)

Changes in total contract amount in which revenue is not yet recognized for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

In millions of won

June 30, 2019

Beginning
balance

Increase (decrease)
(*)

Recognized as
revenue

Ending
balance

Nuclear power plant construction in UAE and others

3,620,787

161,174

(543,715

)

3,238,246

(*)	For thesix-month period ended June 30, 2019, the increased balance of contracts from new orders and foreign exchange impact isW181,774 million and the decreased balance of contracts due to changes in scope of construction work isW20,600 million.

In millions of won

December 31, 2018

Beginning
balance

Increase (decrease)
(*)

Recognized as
revenue

Ending
balance

Nuclear power plant construction in UAE and others

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 isW1,207,097 million and the decreased balance of contracts due to changes in scope of construction work isW20,513 million.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

21.

Construction Contracts, Continued

(2)

Accumulated earned revenue, costs and others related to the Group’s construction contracts as of June 30, 2019 and December 31, 2018 are as follows:

In millions of won

June 30, 2019

Accumulated
earned revenue

Accumulated
costs

Accumulated
profit

Nuclear power plant construction in UAE and others

20,264,764

19,077,921

1,186,843

In millions of won

December 31, 2018

Accumulated
earned revenue

Accumulated
costs

Accumulated
profit

Nuclear power plant construction in UAE and others

19,801,220

18,651,188

1,150,032

(3)

Gross amount due from customers recognized as assets and due to customers recognized as liabilities for contract work as of June 30, 2019 and December 31, 2018 are as follows:

In millions of won

June 30, 2019

December 31, 2018

Assets (*1)

Liabilities (*2)

Assets (*1)

Liabilities (*2)

Nuclear power plant construction in UAE and others

58,748

328,835

36,232

350,460

(*1)	Included in trade and other receivables, net, in the consolidated statements of financial position.

(*2)	Included innon-financial liabilities in the consolidated statements of financial position.

(4)

The contract with BOC (purchaser) states that disclosure of information related to UAE nuclear power plant construction projects such as contract date, contractual completion date, completion progress, unbilled construction, impairment losses, etc. are not allowed without consent from the purchaser. BOC did not agree to disclose such information. Accordingly, the Group did not disclose such information based on KIFRS 1115 129.2(2) as it is probable that ENEC may file a lawsuit for breach of contract if the Group does so. Also, the Group reported to the audit committee that those items will not be disclosed in the notes to the financial statements.

(5)

Changes in estimates of contract revenues and costs related to the Group’s construction services for thesix-month period ended June 30, 2019 are as follows:


In millions of won		June 30, 2019
													Assets				Receivables from construction contracts
		Expected loss on construction contracts		Changes in estimates of contract revenue and costs			Amounts recognized in current profit or loss			Amounts recognized in future profit or loss			Gross		Allowance for doubtful accounts		Gross		Allowance for doubtful accounts		Changes in estimated total contract costs
Transmission and distribution	W		—		23,054			16,072			6,982			24,454		—		—		—		—
Plant maintenance & engineering service			93		(1,200	)		(233	)		(967	)		34,294		23		35,667		9,712		2,254

	W		93		21,854			15,839			6,015			58,748		23		35,667		9,712		2,254

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

22.

Intangible Assets other than Goodwill

(1)

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


In millions of won		June 30, 2019
		Acquisition cost		Government grants			Accumulated amortization			Accumulated impairment losses			Book value
Software	W		665,412		(308	)		(506,068	)		—			159,036
Licenses and franchises			3,398		—			(3,398	)		—			—
Copyrights, patents rights and other industrial rights			98,917		—			(35,085	)		—			63,832
Mining rights			603,276		—			(26,384	)		(61,696	)		515,196
Development expenditures			900,703		(1,690	)		(803,171	)		—			95,842
Intangible assets under development			54,121		(10,964	)		—			(12,845	)		30,312
Usage rights of donated assets and others			582,825		—			(380,287	)		—			202,538
Leasehold rights			25,989		—			(20,284	)		—			5,705
Greenhouse gas emissions rights			137,790		—			—			—			137,790
Others			375,585		—			(113,600	)		(11,917	)		250,068

	W		3,448,016		(12,962	)		(1,888,277	)		(86,458	)		1,460,319


In millions of won		December 31, 2018
		Acquisition cost		Government grants			Accumulated amortization			Accumulated impairment losses			Book value
Software	W		619,662		(420	)		(461,981	)		—			157,261
Licenses and franchises			3,398		—			(3,398	)		—			—
Copyrights, patents rights and other industrial rights			97,033		—			(29,921	)		—			67,112
Mining rights			561,945		—			(27,421	)		—			534,524
Development expenditures			878,462		(2,110	)		(785,976	)		—			90,376
Intangible assets under development			83,381		(10,564	)		—			(12,845	)		59,972
Usage rights of donated assets and others			459,682		—			(372,671	)		—			87,011
Leasehold rights			25,482		—			(19,930	)		—			5,552
Greenhouse gas emissions rights			7,050		—			—			—			7,050
Others			333,621		—			(104,486	)		(12,051	)		217,084

	W		3,069,716		(13,094	)		(1,805,784	)		(24,896	)		1,225,942

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

22.

Intangible Assets other than Goodwill, Continued

(2)

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


In millions of won		June 30, 2019
		Beginning balance			Acquisitions		Disposals			Amortization			Impairment *()**			Others			Ending balance
Software	W		157,681			10,277		—			(42,570	)		—			33,956			159,344
(Government grants)			(420	)		—		—			112			—			—			(308	)
Copyrights, patents rights and other industrial rights			67,112			88		—			(4,516	)		—			1,148			63,832
Mining rights			534,524			21,523		—			(5,867	)		(61,696	)		26,712			515,196
Development expenditures			92,486			438		—			(13,755	)		—			18,363			97,532
(Government grants)			(2,110	)		—		—			420			—			—			(1,690	)
Intangible assets under development			70,536			14,229		—			—			—			(43,489	)		41,276
(Government grants)			(10,564	)		—		—			—			—			(400	)		(10,964	)
Usage rights of donated assets and others			87,011			—		—			(6,936	)		—			122,463			202,538
(Government grants)			—			—		—			—			—			—			—
Leasehold rights			5,552			—		—			(354	)		—			507			5,705
Greenhouse gas emissions rights			7,050			63,358		—			—			—			67,382			137,790
Others			217,084			46,182		(164	)		(8,929	)		59			(4,164	)		250,068
(Government grants)			—			—		—			—			—			—			—

	W		1,225,942			156,095		(164	)		(82,395	)		(61,637	)		222,478			1,460,319

(*)	KEPCO Australia Pty., Ltd., 100% owned subsidiary, performed an impairment test over the mining rights and the Group recognized the amount of the carrying amount in excess of its recoverable amount as impairment loss.


In millions of won		December 31, 2018
		Beginning balance			Acquisitions		Disposals			Amortization			Impairment *()**			Others			Ending balance
Software	W		125,891			10,861		(1	)		(53,755	)		—			74,685			157,681
(Government grants)			(486	)		—		—			254			—			(188	)		(420	)
Copyrights, patents rights and other industrial rights			23,981			28		—			(8,665	)		(13	)		51,781			67,112
Mining rights			539,633			29,687		—			(3,186	)		—			(31,610	)		534,524
Development expenditures			84,518			823		—			(27,100	)		—			34,245			92,486
(Government grants)			(3,702	)		—		—			1,591			—			1			(2,110	)
Intangible assets under development			139,910			67,383		—			—			(8,912	)		(127,845	)		70,536
(Government grants)			(10,540	)		—		—			—			799			(823	)		(10,564	)
Usage rights of donated assets and others			101,658			—		—			(13,307	)		—			(1,340	)		87,011
(Government grants)			(11	)		—		—			11			—			—			—
Leasehold rights			5,044			—		—			(667	)		—			1,175			5,552
Greenhouse gas emissions rights			—			—		—			—			—			7,050			7,050
Others			181,225			1,805		(8	)		(14,114	)		(14	)		48,190			217,084
(Government grants)			—			—		—			—			—			—			—

	W		1,187,121			110,587		(9	)		(118,938	)		(8,140	)		55,321			1,225,942

(*)	W8,104 million of impairment loss on the intangible assets under development in relation to the technology development of heat transfer tube owned by KEPCO Nuclear Fuel Co., Ltd., 96.36% owned subsidiary, is included.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

22.

Intangible Assets other than Goodwill, Continued

(3)

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

In millions of won and thousands of Australian dollars

June 30, 2019

Type

Description

Currency

Amount

Remaining useful lives

Software

ERP system and others

KRW

696

1 year and 8 months ~

1 year and 10 months

Electricity sales information system

KRW

5,651

3 years and 6 months

Copyrights, patents rights and other industrial rights

Smart technology verification and standard design project conducting right

KRW

8,021

3 years and 3 months

Contributions to ARP NRC DC

KRW

45,504

8 years and 6 months

Mining rights

Mining right of Bylong mine

AUD

330,046

— (*)

Development expenditures

Electricity sales information system

KRW

18,810

2 years and 9 months

Usage rights of donated assets and others

Sejong Haengbogdosi sharing charge

Dangjin power plant load facility usage right

KRW

33,654

11,018

7 years and 5 months

1 year and 9 months

Others

Occupancy and use of public waters

KRW

95,152

17 years and 5 months

(*)	Mining rights are amortized using theunits-of-production method and the amortization has not commenced yet.

In millions of won and thousands of Australian dollars

December 31, 2018

Type

Description

Currency

Amount

Remaining useful lives

Software

ERP system and others

KRW

783

2 years and 2 months ~

2 years and 4 months

Electricity sales information system

KRW

6,477

4 years

Copyrights, patents rights and other industrial rights

Smart technology verification and standard design project conducting right

KRW

9,256

3 years and 9 months

Contributions to ARP NRC DC

KRW

46,594

9 years

Mining rights

Mining right of Bylong mine

AUD

401,225

— (*)

Development expenditures

Electricity sales information system

KRW

22,337

3 years and 3 months

Usage rights of donated assets and others

Sejong Haengbogdosi sharing charge

Dangjin power plant load facility usage right

KRW

35,923
14,167

7 years and 11 months

2 years and 3 months

Others

Occupancy and use of public waters

KRW

97,858

17 years and 11 months

(*)	Mining rights are amortized using theunits-of-production method and the amortization has not commenced yet.

(4)

For thesix-month periods ended June 30, 2019 and 2018, the Group recognized research and development expenses ofW311,088 million andW327,931 million, respectively.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

23.

Trade and Other Payables

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


In millions of won		June 30, 2019				December 31, 2018
		Current		Non-current		Current		Non-current
Trade payables	W		2,007,616		—		3,411,830		—
Other trade payables			1,838,336		2,675,067		1,630,860		2,626,876
Accrued expenses			1,125,310		2,031		1,127,796		1,859
Leasehold deposits received			1,626		1,654		1,949		1,084
Other deposits received			165,845		70,527		169,317		72,453
Lease liabilities			621,587		4,329,710		57,200		226,606
Dividends payable			7,498		—		6,443		—
Others (*)			—		12,818		—		12,818

	W		5,767,818		7,091,807		6,405,395		2,941,696

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


In millions of won		June 30, 2019				December 31, 2018
		Current		Non-current		Current		Non-current
Advance received from local governments	W		—		5,818		—		5,818
Others			—		7,000		—		7,000

	W		—		12,818		—		12,818

24.

Borrowings and Debt Securities

(1)

Borrowings and debt securities as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019		December 31, 2018
Current liabilities
Short-term borrowings	W	1,710,151		860,602
Current portion of long-term borrowings		318,645		312,994
Current portion of debt securities		8,199,520		6,790,778
Less : Current portion of discount on long-term borrowings		(1,001	)	(972	)
Less : Current portion of discount on debt securities		(3,666	)	(1,974	)
Add : Current portion of premium on debt securities		—		20

		10,223,649		7,961,448

Non-current liabilities
Long-term borrowings		3,502,838		3,280,015
Debt securities		51,909,309		49,905,077
Less : Discount on long-term borrowings		(22,929	)	(22,000	)
Less : Discount on debt securities		(90,909	)	(89,913	)

		55,298,309		53,073,179

	W	65,521,958		61,034,627

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

24.

Borrowings and Debt Securities, Continued

(2)

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


In millions of won
June 30, 2019
Type		Borrowings		Debt securities
Less than 1 year	W		2,028,796		8,199,520
1~5 years			1,974,534		30,169,809
Over 5 years			1,528,304		21,739,500

	W		5,531,634		60,108,829


In millions of won
December 31, 2018
Type		Borrowings		Debt securities
Less than 1 year	W		1,173,596		6,790,778
1~5 years			1,911,226		30,175,734
Over 5 years			1,368,789		19,729,343

	W		4,453,611		56,695,855

(3)

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

In millions of won and thousands of foreign currencies

June 30, 2019

Type

Creditor

Interest rate (%)

Maturity

Foreign
currency

Local
currency

Local short-term borrowings

KTB Investment and securities and others

1.78~1.85

2019.07.15

~2019.08.13

—

1,650,000

Foreign short-term borrowings

SCNT and others

4.60~6.50

2019.12.03

USD 8,629

9,982

Foreign short-term borrowings

BDO Unibank

6.59

2020.12.17 (*)

PHP 450,000

10,179

Foreign short-term borrowings

Mizuho Bank

2.86~3.24

2019.11.15

~2019.11.18

USD 28,445

32,905

Foreign short-term borrowings

China Construction Bank

2.94

2019.11.15

USD 6,124

7,085

1,710,151

(*)	The contractual maturity is 2020 but is classified as short-term borrowing due to intention of early payment in 3 months after borrowing.

In millions of won and thousands of foreign currencies

December 31, 2018

Type

Creditor

Interest rate (%)

Maturity

Foreign
currency

Local
currency

Local short-term borrowings

KTB Investment and securities and others

2.05~2.51

2019.01.04

~2019.02.20

—

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

860,602

(*)	The contractual maturity is 2020 but is classified as short-term borrowing due to intention of early payment in 3 months after borrowing.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

24.

Borrowings and Debt Securities, Continued

(4)

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


In millions of won and thousands of foreign currencies
June 30, 2019
Type		Interest rate (%)		Maturity		Foreign currency			Local currency
Local long-term borrowings
Korea Development Bank	Others		0.50		2019~2044		—	W		3,976
	Facility		2.50~4.60		2023~2028		—			58,286
	Operating funds		2.59~3.04		2020		—			35,000
	Operating funds		1yr KoFC bond rate+0.95		2020		—			14,000
KEB Hana Bank	Commercial Paper		3M CD+0.13~0.32		2021~2024		—			1,150,000
	Facility		4.60		2028		—			13,131
	Facility		3yr KTBrate-1.25		2019~2028		—			7,386
IBK	PF Refinancing		CD+1.25		2030		—			10,974
Export-Import Bank of Korea	Project loans		1.50		2026		—			20,623
	Operating funds		2.21		2020		—			35,000
Korea Energy Agency	Development of power resources		3yr KTB rate-2.25		2023~2025		—			4,954
	Facility		3yr KTB rate-2.25		2019~2024		—			2,324
	Project loans		—		2023		—			1,197
	Others		KTB rate-2.25		2024~2028		—			16,522
Shinhan Bank	Facility		CB rate+1.10		2028		—			19,697
	Others		3.95		2035		—			101,521
	Others		Standard overdraft rate+1.00		2035		—			101,521
Kookmin Bank	Facility		3.16		2020		—			10,000
	Facility		MOR+0.79		2023		—			27,417
Others	Facility		1.75~6.80		2026~2036		—			305,148
	Facility		CB rate+1.10~1.60		2023~2036		—			56,129
	PF Refinancing		4.10		2030		—			30,484
	Others		4.50~7.90		2022~2039		—			102,351

										2,127,641

Foreign long-term borrowings
Korea Energy Agency	Project loans		—		2021~2023		USD 8,744			10,115
Export-Import Bank of Korea and others	Direct loan and others		1M Libor+1.80~3.20		2036		USD 104,402			120,772
	Direct loan and others		3M Libor+2.75~3.70		2027		JOD 152,644			249,052
	Commercial loan and others		3M Libor+1.50~2.50		2030~2033		USD 271,779			314,393
	PF Loan		6M Libor+1.70~2.50		2032		USD 123,097			143,084
	Others		3.88		2021		USD 289,388			334,359
SCNT and others	Shareholder’s loan		6.50~8.00		2023		USD 44,045			50,951
	Shareholder’s loan		8.00		2031		JOD 4,853			7,918
PT PJB	Shareholder’s loan		12.75		2019		IDR 5,798,559			474
Samsung Life Insurance and others	Syndicated Loan		3.10		2032		JPY 5,000,083			53,668
Woori Bank and others	Syndicated Loan		JPY 6M Libor+2.00		2032		JPY 3,225,405			34,620
SMBC and others	Equity Bridge Loan		1M Libor+0.90		2019		—			—
IFC and others	Others		6M Libor+5.00		2031		PKR 36,222,900			256,458
Federal Financing Bank and others	PF Loan		2.39~13.00		2031~2038		USD 101,567			117,492
Others	Others		—		2019		USD 421			486

										1,693,842

										3,821,483
Less : Discount of long-term borrowings										(23,930	)
Less : Current portion of long-term borrowings										(318,645	)
Add : Current portion of discount on long-term borrowings										1,001

								W		3,479,909

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

24.

Borrowings and Debt Securities, Continued

(4)

Long-term borrowings as of June 30, 2019 and December 31, 2018 are as follows, continued:


In millions of won and thousands of foreign currencies
December 31, 2018
Type		Interest rate (%)	Maturity		Foreign currency			Local currency
Local long-term borrowings
Korea Development Bank	Others	0.50		2019~2044		—	W		4,154
	Facility	2.45~4.60		2023~2028		—			66,793
	Operating funds	2.59~3.56		2020~2021		—			67,000
	Operating funds	1yr KoFC bond rate +0.95		2020		—			14,000
KEB Hana Bank	Commercial Paper	3M CD+0.19~0.32		2021~2023		—			950,000
	Facility	4.60		2028		—			13,781
	Facility	3yr KTB rate-1.25		2019~2028		—			8,072
IBK	PF Refinancing	CD+1.25		2030		—			22,500
Export-Import Bank of Korea	Project loans	1.50		2026		—			22,096
	Operating funds	2.21		2020		—			35,000
Korea Energy Agency	Development of power resources	3yr KTB rate-2.25		2023~2025		—			5,558
	Facility	3yr KTB rate-2.25		2019~2024		—			2,589
	Project loans	—		2023		—			1,197
	Others	KTB rate-2.25		2024~2028		—			17,347
Shinhan Bank	Collateral borrowing	2.32		2019		—			30,000
	Facility	CB rate+1.10		2028		—			20,672
	Others	3.95		2035		—			103,851
	Others	Standard overdraft rate+1.00		2035		—			103,851
Kookmin Bank	Facility	3.16		2020		—			10,000
	Facility	MOR+0.79		2023		—			30,333
Others	Facility	1.75~4.60		2026~2036		—			168,080
	Facility	CB rate+1.10~1.60		2023~2036		—			52,810
	PF Refinancing	4.10		2030		—			62,500
	Others	4.50~7.90		2022~2039		—			102,347

									1,914,531


Foreign long-term borrowings
Korea Energy Agency	Project loans	—		2021~2023		USD 8,744			9,776
Export-Import Bank of Korea and others	Direct loan and others	1M Libor+1.80~3.20		2036		USD 123,909			138,542
	Direct loan and others	3M Libor+2.75~3.70		2027		JOD 158,524			249,783
	Commercial loan and others	3M Libor+1.50~2.50		2030~2033		USD 277,538			310,315
	PF Loan	6M Libor+1.70~2.50		2032		USD 126,798			141,773
SCNT and others	Shareholder’s loan	8.00		2031		JOD 4,853			7,647
	Shareholder’s loan	6.50~8.00		2023		USD 44,680			49,956
	Others	3.88		2021		USD 278,105			310,427
PT PJB	Shareholder’s loan	12.75		2019		IDR 5,569,304			428
Samsung Life Insurance and others	Syndicated Loan	3.10		2032		JPY 5,286,835			53,565
Woori Bank and others	Syndicated Loan	JPY 6M Libor+2.00		2032		JPY 3,410,381			34,553
SMBC and others	Equity Bridge Loan	1M Libor+0.90		2019		USD 44,019			49,218
IFC and others	Others	6M Libor+5.00		2031		PKR 25,900,420			206,944
Federal Financing Bank and others	PF Loan	2.39~13.00		2031~2038		USD 102,322			114,406
Others	Others	—		2019		USD 1,025			1,145

									1,678,478

									3,593,009
Less : Discount of long-term borrowings									(22,972	)
Less : Current portion of long-term borrowings									(312,994	)
Add : Current portion of discount on long-term borrowings									972

							W		3,258,015

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

24.

Borrowings and Debt Securities, Continued

(5)

Local debt securities as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won
	Issue date		Maturity		Interest rate (%)			June 30, 2019			December 31, 2018
Electricity bonds		2009.12.03~2019.06.12		2019.08.21~2048.10.29		1.66~5.45	W		26,500,000			24,480,000
Corporate bonds (*)		2009.07.07~2019.06.26		2019.07.07~2049.06.26		1.36~6.00			23,963,227			23,223,228

									50,463,227			47,703,228
Less : Discount on local debt securities									(41,767	)		(41,247	)
Less : Current portion of local debt securities									(6,580,000	)		(5,330,000	)
Add : Current portion of discount on local debt securities									1,396			1,035

							W		43,842,856			42,333,016

(*)	Corporate bonds of HeeMang Sunlight Power Co., Ltd. amounting toW2,697 million can be redeemed every March 31 after five years from its issue date, March 31, 2016.

(6)

Foreign debt securities as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won and thousands of foreign currencies
June 30, 2019
Type	Issue date	Maturity	Interest rate (%)	Foreign currency			Local currency
FY-96	1996.04.01~1996.12.06	2026.12.01~2096.04.01	6.00~8.37		USD 249,074	W		288,128
FY-97	1997.01.31~1997.08.04	2027.02.01~2027.08.01	6.75~7.00		USD 314,717			364,065
FY-04	2004.04.23	2034.04.23	5.13		USD 286,920			331,909
FY-11	2011.07.13	2021.07.13	4.75		USD 500,000			578,400
FY-12	2012.09.19	2022.09.19	3.00		USD 750,000			867,600
FY-13	2013.09.25	2020.09.25	5.75		AUD 325,000			263,341
FY-14	2014.07.30~2014.12.02	2019.09.22~2029.07.30	2.38~3.57		USD 1,200,000			1,388,160
FY-15	2015.06.15	2025.06.15	3.25		USD 300,000			347,040
FY-16	2016.01.21	2021.07.21	2.50		USD 300,000			347,040
FY-17	2017.04.12~2017.07.25	2020.04.12~2027.07.25	2.38~3.13		USD 1,100,000			1,272,480
FY-17	2017.10.30	2037.10.30	1.70		EUR 40,000			52,604
FY-17	2017.11.16	2037.11.16	2.36		SEK 450,000			56,120
FY-18	2018.01.29~2018.07.25	2021.01.29~2023.07.25	3.00~3.88		USD 1,800,000			2,082,240
FY-18	2018.03.13	2028.03.13	3.35		HKD 1,650,000			244,217
FY-19	2019.01.22~2019.06.24	2022.01.22~2024.06.24	2.50~3.38		USD 800,000			925,440
FY-19	2019.02.27	2024.02.27	0.13		CHF 200,000			236,818

								9,645,602
Less : Discount on foreign debt securities								(52,808	)
Add : Premium on foreign debt securities								—
Less : Current portion of foreign debt securities								(1,619,520	)
Add : Current portion of discount on foreign debt securities								2,270
Less: Current portion of premium on foreign debt securities								—

						W		7,975,544

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

24.

Borrowings and Debt Securities, Continued

(6)

Foreign debt securities as of June 30, 2019 and December 31, 2018 are as follows, continued:


In millions of won and thousands of foreign currencies
December 31, 2018
Type	Issue date	Maturity	Interest rate (%)	Foreign currency			Local currency
FY-96	1996.04.01~1996.12.06	2026.12.01~2096.04.01	6.00~8.37		USD 249,071	W		278,488
FY-97	1997.01.31~1997.08.04	2027.02.01~2027.08.01	6.75~7.00		USD 314,717			351,885
FY-04	2004.04.23	2034.04.23	5.13		USD 286,920			320,805
FY-11	2011.07.13	2021.07.13	4.75		USD 500,000			559,050
FY-12	2012.09.19	2022.09.19	3.00		USD 750,000			838,575
FY-13	2013.09.26~2013.10.23	2019.03.26~2019.04.23	1.50~1.63		CHF 400,000			454,488
FY-13	2013.09.25	2020.09.25	5.75		AUD 325,000			256,038
FY-14	2014.02.11~2014.12.02	2019.02.11~2029.07.30	2.38~3.57		USD 1,500,000			1,677,150
FY-15	2015.06.15	2025.06.15	3.25		USD 300,000			335,430
FY-16	2016.01.21	2021.07.21	2.50		USD 300,000			335,430
FY-17	2017.04.12~2017.07.25	2020.04.12~2027.07.25	2.38~3.13		USD 1,100,000			1,229,910
FY-17	2017.10.30	2037.10.30	1.70		EUR 40,000			51,166
FY-17	2017.11.16	2037.11.16	2.36		SEK 450,000			56,061
FY-18	2018.01.29~2018.07.25	2021.01.29~2023.07.25	3.00~3.88		USD 1,800,000			2,012,580
FY-18	2018.03.13	2028.03.13	3.35		HKD 1,650,000			235,571

								8,992,627
Less : Discount on foreign debt securities								(50,640	)
Add : Premium on foreign debt securities								20
Less : Current portion of foreign debt securities								(1,460,778	)
Add : Current portion of discount on foreign debt securities								939
Less: Current portion of premium on foreign debt securities								(20	)

						W		7,482,148

(7)

Changes in borrowings and debt securities for thesix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019			June 30, 2018
Beginning balance	W		61,034,627			54,747,392
Cash flow			4,021,612			5,389,413
Effect of exchange rate fluctuations			469,385			450,795
Others			(3,666	)		(241	)

Ending balance	W		65,521,958			60,587,359

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

25.

Lease

(1)

Right-of-use assets as of June 30, 2019 are as follows:


In millions of won		June 30, 2019
		Acquisition cost		Government grants		Accumulated depreciation			Book value
Land	W		337,864		—		(8,709	)		329,155
Buildings			44,402		—		(9,222	)		35,180
Structures			21,704		—		(627	)		21,077
Ships			4,113,754		—		(210,233	)		3,903,521
Vehicles			10,928		—		(2,471	)		8,457
Others (*)			2,644,750		—		(2,235,116	)		409,634

	W		7,173,402		—		(2,466,378	)		4,707,024

(*)	Including power purchase agreements (“PPA”) with GS EPS and two other providers.

(2)

Changes inright-of-use assets for thesix-month period ended June 30, 2019 are as follows:


In millions of won		June 30, 2019
		Beginning balance		Changes in accounting policies *()**		Increase		Depreciation			Ending balance
Land	W		—		325,748		12,116		(8,709	)		329,155
Buildings			—		37,024		7,378		(9,222	)		35,180
Structures			—		20,840		864		(627	)		21,077
Ships			—		3,986,947		126,807		(210,233	)		3,903,521
Vehicles			—		10,344		584		(2,471	)		8,457
Others			—		447,892		4,050		(42,308	)		409,634

	W		—		4,828,795		151,799		(273,570	)		4,707,024

(*)	Including transferred amount ofW195,704 million, which was classified as finance lease assets as of December 31, 2018.

(3)

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


In millions of won		June 30, 2019				December 31, 2018
		Minimum lease payments		Present value of minimum lease payments		Minimum lease payments		Present value of minimum lease payments
Less than 1 year	W		646,693		621,587		87,709		57,200
1 ~ 5 years			2,188,893		1,989,915		228,783		170,676
More than 5 years			2,836,886		2,339,795		65,250		55,930

	W		5,672,472		4,951,297		381,742		283,806

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

25.

Lease, Continued

(4)

Changes in lease liabilities for thesix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019
		Beginning balance		Changes in accounting policies		Increase		Decrease			Interest expenses		*Others ()**		Ending balance
Leaseliabilities	W		283,806		4,626,657		150,579		(307,014	)		42,205		155,064		4,951,297

(*)	Including translation effect of foreign currency lease liabilities and others.

In millions of won

June 30, 2018

Beginning
balance

Acquisition

Decrease

Ending
balance

Finance lease liabilities

418,260

—

(67,687

)

350,573

(5)

Details of expense relating to lease contracts as lessee for the three andsix-month periods ended June 30, 2019 are as follows:


In millions of won		June 30, 2019
		Three-month period ended			Six-month period ended
Depreciation ofright-of-use assets	W		138,430			273,570
Interest expenses of lease liabilities			21,824			42,205
Leases expenses for short term leases			2,702			7,424
Leases expenses forlow-value assets			206			547
Variable lease payments			(4,361	)		(8,642	)

	W		158,801			315,105

(6)

Minimum lease payment and contingent rent payment recognized as an expense as a lessee for the three andsix-month periods ended June 30, 2018 are as follows:


In millions of won		June 30, 2018
		Three-month period ended			Six-month period ended
Minimum lease payment	W		35,634			75,079
Contingent rent payment			(4,759	)		(9,354	)

	W		30,875			65,725

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

26.

Employment Benefits

(1)

Employment benefit obligations as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019		December 31, 2018
Net defined benefit obligations	W		2,132,153		1,638,785
Other long-term employee benefit obligations			6,271		6,284

	W		2,138,424		1,645,069

(2)

Principal assumptions on actuarial valuation as of June 30, 2019 and December 31, 2018 are as follows:


	June 30, 2019	December 31, 2018
Discount rate	1.82%~1.97%	2.24%~2.90%
Future salary and benefit levels	4.88%	4.88%
Weighted average duration	13.75 years	13.71 years

(3)

Details of expense relating to defined benefit plans for the three andsix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019						June 30, 2018
		Three-month period ended			Six-month period ended			Three-month period ended			Six-month period ended
Current service cost	W		102,443			202,145			89,285			177,834
Interest cost			20,544			40,300			21,668			42,567
Expected return on plan assets			(10,203	)		(20,419	)		(10,367	)		(20,792	)
Loss from settlement			(243	)		(478	)		(81	)		(277	)

	W		112,541			221,548			100,505			199,332

Expenses as described above are recognized in those items below in the financial statements.


In millions of won		June 30, 2019				June 30, 2018
		Three-month period ended		Six-month period ended		Three-month period ended		Six-month period ended
Cost of sales	W		83,365		164,840		74,947		147,926
Selling and administrative expenses			14,511		28,222		9,524		25,122
Others
(Construction-in-progress and others)			14,665		28,486		16,034		26,284

	W		112,541		221,548		100,505		199,332

In addition, for thesix-month periods ended June 30, 2019 and 2018, employee benefit obligations expenses ofW38,008 million andW33,106 million, respectively, is recognized as cost of sales, andW8,579 million andW6,237 million, respectively, is recognized as selling and administrative expenses, andW7,365 million andW6,876 million, respectively, are recognized asconstruction-in-progress and others, relates to the Group’s defined contribution plans.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

26.

Employment Benefits, Continued

(4)

Details of defined benefit obligations as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019			December 31, 2018
Present value of defined benefit obligation from funded plans	W		3,903,240			3,414,116
Fair value of plan assets			(1,771,087	)		(1,775,331	)

Net liabilities incurred from defined benefit plans	W		2,132,153			1,638,785

(5)

Changes in the present value of defined benefit obligations for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019			December 31, 2018
Beginning balance	W		3,414,116			2,951,842
Current service cost			202,145			369,899
Interest cost (*)			40,300			87,687
Remeasurement component			298,787			154,939
Loss from settlement			(478	)		(767	)
Actual payments			(51,705	)		(149,454	)
Others			75			(30	)

Ending balance	W		3,903,240			3,414,116

(*)	Corporate bond (AAA rated) yield atyear-end is applied to measure the interest cost on employee benefit obligations.

(6)

Changes in the fair value of plan assets for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019			December 31, 2018
Beginning balance	W		1,775,331			1,475,641
Expected return			20,419			42,135
Remeasurement component			(2,381	)		(12,308	)
Contributions by the employers			270			330,064
Actual payments			(22,552	)		(60,201	)

Ending balance	W		1,771,087			1,775,331

In addition, loss on accumulated remeasurement component amounted toW328,112 million andW219,381 million has been recognized as other comprehensive income or loss for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018, respectively.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

26.

Employment Benefits, Continued

(7)

Details of the fair value of plan assets as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019		December 31, 2018
Equity instruments	W		90,256		96,823
Debt instruments			541,186		510,184
Bank deposit			294,651		275,518
Others			844,994		892,806

	W		1,771,087		1,775,331

For thesix-month period ended June 30, 2019 and for the year ended December 31, 2018, actual returns on plan assets amounted toW18,038 million andW29,827 million, respectively.

(8)

Remeasurement component recognized in other comprehensive income (loss) for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019		December 31, 2018
Actuarial gain from changes in financial assumptions	W		183,633		186,428
Experience adjustments, etc.			115,154		(31,489	)
Expected return			2,381		12,308

	W		301,168		167,247

Remeasurement component recognized as other comprehensive income or loss is recorded in retained earnings.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

27.

Provisions

(1)

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


In millions of won		June 30, 2019				December 31, 2018
		Current		Non-current		Current		Non-current
Employment benefits
Provisions for employment benefits	W		1,102,997		—		976,347		—
Litigation
Litigation provisions			22,907		44,413		40,157		37,636
Decommissioning cost
Nuclear plants			—		13,570,017		—		13,388,134
Spent fuel			—		1,355,280		—		1,291,354
Radioactive waste			4,311		1,693,331		4,310		1,680,698
PCBs			—		144,527		—		147,668
Other recovery provisions			—		10,047		—		10,477
Others
Power plant regional support program			165,236		—		137,668		—
Transmission regional support program			153,219		—		151,698		—
Provisions for tax			25		—		6,845		—
Provisions for financial guarantee			55		90,643		1,320		14,266
Provisions for RPS			142,324		—		93,919		—
Provisions for greenhouse gas emissions obligations			151,885		—		136,187		—
Others			44,340		14,308		46,347		15,515

	W		1,787,299		16,922,566		1,594,798		16,585,748

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

27.

Provisions, Continued

(2)

Changes in provisions for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019
		Beginning balance		Increase in provision		Payment			Reversal			Other			Ending balance
Employment benefits
Provisions for employment benefits	W		976,347		488,567		(365,081	)		—			3,164			1,102,997
Litigation
Litigation provisions			77,793		11,061		(16,066	)		(5,468	)		—			67,320
Decommissioning cost
Nuclear plants			13,388,134		197,402		(15,519	)		—			—			13,570,017
Spent fuel			1,291,354		215,758		(151,832	)		—			—			1,355,280
Radioactive waste			1,685,008		18,842		(6,407	)		—			199			1,697,642
PCBs			147,668		1,610		(4,751	)		—			—			144,527
Other recovery provisions			10,477		85		(861	)		—			346			10,047
Others
Power plant regional support program			137,668		41,341		(23,287	)		—			9,514			165,236
Transmission regional support program			151,698		92,445		(90,924	)		—			—			153,219
Provisions for tax			6,845		—		—			(6,821	)		1			25
Provisions for financial guarantee			15,586		82,466		(6,724	)		(559	)		(71	)		90,698
Provisions for RPS			93,919		180,138		(131,733	)		—			—			142,324
Provisions for greenhouse gas emissions obligations			136,187		17,349		—			(1,651	)		—			151,885
Others			61,862		1,930		(3,332	)		(1,818	)		6			58,648

	W		18,180,546		1,348,994		(816,517	)		(16,317	)		13,159			18,709,865

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

27.

Provisions, Continued

(2)

Changes in provisions for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows, continued:


In millions of won		December 31, 2018
		Beginning balance		Increase in provision		Payment			Reversal			Other			Ending balance
Employment benefits
Provisions for employment benefits	W		913,787		912,440		(843,281	)		(6,599	)		—			976,347
Litigation
Litigation provisions (*)			73,576		234,517		(216,187	)		(13,847	)		(266	)		77,793
Decommissioning cost
Nuclear plants			13,007,228		411,316		(30,410	)		—			—			13,388,134
Spent fuel			1,339,046		435,007		(482,699	)		—			—			1,291,354
Radioactive waste			1,638,371		112,815		(66,178	)		—			—			1,685,008
PCBs			180,087		4,600		(13,758	)		(23,261	)		—			147,668
Other recovery provisions			6,659		2,125		—			—			1,693			10,477
Others
Power plant regional support program			153,756		46,366		(71,978	)		—			9,524			137,668
Transmission regional support program			243,365		141,661		(233,328	)		—			—			151,698
Provisions for tax			61		6,821		—			—			(37	)		6,845
Provisions for financial guarantee			23,475		1,179		(67	)		(8,432	)		(569	)		15,586
Provisions for RPS			271,624		297,802		(475,507	)		—			—			93,919
Provisions for greenhouse gas emissions obligations			414,252		131,860		(350,356	)		(59,569	)		—			136,187
Others			96,925		44,732		(82,632	)		(745	)		3,582			61,862

	W		18,362,212		2,783,241		(2,866,381	)		(112,453	)		13,927			18,180,546

(*)

As described in Note 50.(1), the Group believes that the possibility of economic outflow is probable on the request for additional construction costs of Hyundai E&C, GS Engineering & Construction Corp. and Hansol SeenTec Co., Ltd. For this reason, the Group recognizedW204,787 million of provision as addition to property, plant and equipment.

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

28.

Government Grants

(1)

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


In millions of won		June 30, 2019			December 31, 2018
Land	W		(21,968	)		(21,968	)
Buildings			(61,014	)		(63,189	)
Structures			(186,805	)		(190,854	)
Machinery			(164,583	)		(173,242	)
Vehicles			(3,256	)		(4,220	)
Equipment			(331	)		(418	)
Tools			(532	)		(675	)
Construction-in-progress			(59,532	)		(54,740	)
Finance lease assets			—			(26	)
Investment properties			(14	)		(50	)
Software			(308	)		(420	)
Development expenditures			(1,690	)		(2,110	)
Intangible assets under development			(10,964	)		(10,564	)

	W		(510,997	)		(522,476	)

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

28.

Government Grants, Continued

(2)

Changes in government grants for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019
		Beginning balance			Receipt			Acquisitions		Items offset with depreciation expense and others		Disposals		Others			Ending balance
Cash	W		—			(7,435	)		—		—		—		7,435			—
Land			(21,968	)		—			—		—		—		—			(21,968	)
Buildings			(63,189	)		—			—		2,802		—		(627	)		(61,014	)
Structures			(190,854	)		—			—		4,662		888		(1,501	)		(186,805	)
Machinery			(173,242	)		—			—		8,716		260		(317	)		(164,583	)
Vehicles			(4,220	)		—			—		1,078		—		(114	)		(3,256	)
Equipment			(418	)		—			—		141		—		(54	)		(331	)
Tools			(675	)		—			—		143		—		—			(532	)
Construction-in-progress			(54,740	)		—			1,791		—		—		(6,583	)		(59,532	)
Finance lease assets			(26	)		—			—		—		—		26			—
Investment properties			(50	)		—			—		—		—		36			(14	)
Software			(420	)		—			—		112		—		—			(308	)
Development expenditures			(2,110	)		—			—		420		—		—			(1,690	)
Intangible assets under development			(10,564	)		—			—		—		—		(400	)		(10,964	)

	W		(522,476	)		(7,435	)		1,791		18,074		1,148		(2,099	)		(510,997	)


In millions of won		December 31, 2018
		Beginning balance			Receipt			Acquisitions		Items offset with depreciation expense and others		Disposals		Others			Ending balance
Cash	W		—			(30,416	)		—		—		—		30,416			—
Land			(21,968	)		—			—		—		—		—			(21,968	)
Buildings			(63,539	)		—			—		6,836		31		(6,517	)		(63,189	)
Structures			(196,414	)		—			—		10,292		3,270		(8,002	)		(190,854	)
Machinery			(183,188	)		—			—		18,099		823		(8,976	)		(173,242	)
Vehicles			(6,322	)		—			—		2,146		—		(44	)		(4,220	)
Equipment			(761	)		—			—		365		—		(22	)		(418	)
Tools			(1,027	)		—			—		432		—		(80	)		(675	)
Construction-in-progress			(49,084	)		—			18,239		—		—		(23,895	)		(54,740	)
Finance lease assets			(27	)		—			—		1		—		—			(26	)
Investment properties			(83	)		—			—		1		—		32			(50	)
Software			(486	)		—			—		254		—		(188	)		(420	)
Development expenditures			(3,702	)		—			—		1,591		—		1			(2,110	)
Intangible assets under development			(10,540	)		—			—		—		—		(24	)		(10,564	)
Usage rights of donated assets and others			(11	)		—			—		11		—		—			—

	W		(537,152	)		(30,416	)		18,239		40,028		4,124		(17,299	)		(522,476	)

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

29.

Deferred Revenues

Deferred revenue related to the Group’s construction contracts for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows which included in current andnon-currentnon-financial liabilities in the consolidated statements of financial position:


In millions of won		June 30, 2019			December 31, 2018
Beginning balance	W		8,606,563			8,325,181
Increase during the current period/year			456,715			875,930
Recognized as revenue during the current period/year			(289,366	)		(594,548	)

Ending balance	W		8,773,912			8,606,563

30.

Non-financial Liabilities

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


In millions of won		June 30, 2019				December 31, 2018
		Current		Non-current		Current		Non-current
Advance received	W		3,785,481		131,636		3,724,238		80,937
Unearned revenue			25,353		4,345		63,038		4,690
Deferred revenue			570,334		8,203,578		556,072		8,050,491
Withholdings			284,197		9,893		172,454		10,856
Others			1,135,983		13,315		1,058,239		13,059

	W		5,801,348		8,362,767		5,574,041		8,160,033

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

31.

Contributed Capital

(1)

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

In millions of won except share information


	June 30, 2019
	Shares authorized		Shares issued		Par value per share (in won)		Owned by government (*)		Owned by others		Total
Common shares		1,200,000,000		641,964,077	W	5,000		1,640,385		1,569,435		3,209,820

(*)	Korea Development Bank’s interest ofW1,056,176 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 ofW1,056,176 million is included.

(2)

Details in number of issued capital stock for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


Number of shares	June 30, 2019		December 31, 2018
Beginning balance		641,964,077		641,964,077

Ending balance		641,964,077		641,964,077

(3)

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

In millions of won

June 30, 2019

December 31, 2018

Share premium

843,758

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

32.

Retained Earnings and Dividends Paid

(1)

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


In millions of won		June 30, 2019		December 31, 2018
Legal reserve (*)	W		1,604,910		1,604,910
Voluntary reserves			34,785,425		35,906,267
Retained earnings before appropriations			13,717,315		14,007,942

Retained earnings	W		50,107,650		51,519,119

(*)

The KEPCO Act requires KEPCO to appropriate a legal reserve equal to at least 20 percent of net income for each accounting period until the reserve equals 50 percent of KEPCO’s common stock. The legal reserve is not available for cash dividends; however, this reserve may be credited topaid-in capital or offset against accumulated deficit by the resolution of the shareholders.

(2)

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


In millions of won		June 30, 2019		December 31, 2018
Reserve for investment on social overhead capital	W		5,277,449		5,277,449
Reserve for research and human development (*)			330,000		330,000
Reserve for business expansion			28,967,976		30,088,818
Reserve for equalizing dividends			210,000		210,000

	W		34,785,425		35,906,267

(*)

The reserve for research and human development is appropriated by KEPCO to use as qualified tax credits to reduce corporate tax liabilities. The reserve is available for cash dividends for a certain period as defined by the Restriction of Special Taxation Act of Korea.

(3)

Changes in retained earnings for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019			December 31, 2018
Beginning balance	W		51,519,119			53,370,558
Effect of change in accounting policy			—			71,928
Net profit (loss) for the period attributed to owner of the Company			(1,235,344	)		(1,314,567	)
Changes in equity method retained earnings			(448	)		(1,153	)
Remeasurement of defined benefit liability, net of tax			(174,173	)		(100,495	)
Transfer of gain (loss) on valuation of financial assets through other comprehensive income			(1,504	)		—
Dividends paid			—			(507,152	)

Ending balance	W		50,107,650			51,519,119

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

32.

Retained Earnings and Dividends Paid, Continued

(4)

Dividends paid for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:

In millions of won

June 30, 2019

Number of
shares issued

Number of
treasury stocks

Number of
shares eligible for
dividends

Dividends paid
per share
(in won)

Dividends
paid

Common shares

641,964,077

—

641,964,077

—

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

790

507,152

(5)

Changes in retained earnings of investments in associates and joint ventures for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019			December 31, 2018
Beginning balance	W		3,969			5,122
Changes			(448	)		(1,153	)

Ending balance	W		3,521			3,969

(6)

Changes in remeasurement components related to defined benefit liability for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019			December 31, 2018
Beginning balance	W		(219,381	)		(43,513	)
Changes			(289,318	)		(154,198	)
Income tax effect			115,145			53,703
Transfer to reserve for business expansion			65,442			(75,373	)

Ending balance	W		(328,112	)		(219,381	)

33.

Hybrid Bonds

Hybrid bonds classified as equity(non-controlling interest) as of June 30, 2019and December 31, 2018are as follows:


In millions of won
Issuer	Hybrid bond		Issued date		Maturity		Yield (%)			June 30, 2019			December 31, 2018
Korea South-East Power Co., Ltd.		1st hybrid bond		2012.12.07		2042.12.06		4.38	W		170,000			170,000
Korea South-East Power Co., Ltd.		2nd hybrid bond		2012.12.07		2042.12.06		4.44			230,000			230,000
Expense of issuance											(1,090	)		(1,090	)

									W		398,910			398,910

Although these instruments have contractual maturity dates, the contractual agreements allow these subsidiaries to indefinitely extend the maturity dates and defer the payment of interest without modification to the other terms of the instruments. When the Group decides not to pay dividends on common shares, they are not required to pay interest on the hybrid bonds.

Substantially, as these instruments have no contractual obligation to pay principal and interest, these instruments have been classified as equity(non-controlling interest) in the Group’s consolidated financial statements.

100

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

34.

Other Components of Equity

(1)

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


In millions of won		June 30, 2019			December 31, 2018
Other capital surplus	W		1,226,825			1,234,825
Accumulated other comprehensive loss			(263,933	)		(358,570	)
Other equity			13,294,973			13,294,973

	W		14,257,865			14,171,228

(2)

Changes in other capital surplus for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019								December 31, 2018
		Gain on disposal of treasury stocks		Others			Subtotal			Gain on disposal of treasury stocks		Others		Subtotal
Beginning balance	W		387,524		847,301			1,234,825			387,524		846,269		1,233,793
Issuance of share capital of subsidiary			—		(7,859	)		(7,859	)		—		1,032		1,032
Others			—		(141	)		(141	)		—		—		—

Ending balance	W		387,524		839,301			1,226,825			387,524		847,301		1,234,825

101

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

34.

Other Components of Equity, Continued

(3)

Changes in accumulated other comprehensive income (loss) for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019
		Financial asset at fair value through other comprehensive income valuation reserve			Shares in other comprehensive income of investments in associates and joint ventures		Reserve for overseas operations translation			Reserve for loss on valuation of derivatives			Total
Beginning balance	W		(81,708	)		123,553		(350,245	)		(50,170	)		(358,570	)
Changes in the unrealized fair value of financial assets at FVOCI, net of tax			1,041			—		—			—			1,041
Shares in other comprehensive income of associates and joint ventures, net of tax			—			35,701		—			—			35,701
Foreign currency translation of foreign operations, net of tax			—			—		43,626			—			43,626
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—			—		—			14,269			14,269

Ending balance	W		(80,667	)		159,254		(306,619	)		(35,901	)		(263,933	)


In millions of won		December 31, 2018
		Financial asset at fair value through other comprehensive income valuation reserve			Shares in other comprehensive income of investments in associates and joint ventures		Reserve for overseas operations translation			Reserve for loss on valuation of derivatives			Total
Beginning balance	W		29,268			66,464		(318,159	)		(49,030	)		(271,457	)
Effect of change in accounting policy			(76,851	)		—		—			—			(76,851	)
Changes in the unrealized fair value of financial assets at FVOCI, net of tax			(34,125	)		—		—			—			(34,125	)
Shares in other comprehensive income of associates and joint ventures, net of tax			—			57,089		—			—			57,089
Foreign currency translation of foreign operations, net of tax			—			—		(32,086	)		—			(32,086	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—			—		—			(1,140	)		(1,140	)

Ending balance	W		(81,708	)		123,553		(350,245	)		(50,170	)		(358,570	)

(4)

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


In millions of won		June 30, 2019			December 31, 2018
Statutory revaluation reserve	W		13,295,098			13,295,098
Changes in other equity			(125	)		(125	)

	W		13,294,973			13,294,973

102

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

35.

Sales

Details of sales for the three andsix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019
		Domestic				Overseas				Total
		Three- month period ended		Six- month period ended		Three- month period ended		Six- month period ended		Three- month period ended		Six- month period ended
[Type of goods and services]
Sales of goods	W		12,486,388		27,163,089		65,480		142,791		12,551,869		27,305,880
Electricity			12,384,623		26,822,148		—		—		12,384,623		26,822,148
Heat supply			22,376		154,974		—		—		22,376		154,974
Others			79,389		185,967		65,480		142,791		144,870		328,758
Sales of service			38,656		90,414		46,882		90,003		85,538		180,417
Sales of construction services			31,511		49,028		256,151		494,687		287,661		543,715
Revenue related to transfer of assets from customers			145,906		289,366		—		—		145,906		289,366

	W		12,702,461		27,591,897		368,513		727,481		13,070,974		28,319,378

[Timing of revenue recognition]
Performance obligations satisfied at a point in time	W		12,486,388		27,163,089		65,480		142,791		12,551,869		27,305,880
Performance obligations satisfied over time			216,073		428,808		303,033		584,690		519,105		1,013,498

	W		12,702,461		27,591,897		368,513		727,481		13,070,974		28,319,378


In millions of won		June 30, 2018
		Domestic				Overseas				Total
		Three- month period ended		Six- month period ended		Three- month period ended		Six- month period ended		Three- month period ended		Six- month period ended
[Type of goods and services]
Sales of goods	W		12,568,817		27,525,572		86,012		187,234		12,654,829		27,712,806
Electricity			12,413,292		27,131,074		—		—		12,413,292		27,131,074
Heat supply			13,759		142,618		—		—		13,759		142,618
Others			141,766		251,880		86,012		187,234		227,778		439,114
Sales of service			36,093		70,120		37,023		77,162		73,116		147,282
Sales of construction services			37,788		54,658		386,645		819,936		424,433		874,594
Revenue related to transfer of assets from customers			184,780		308,521		—		—		184,780		308,521

	W		12,827,478		27,958,871		509,680		1,084,332		13,337,158		29,043,203

[Timing of revenue recognition]
Performance obligations satisfied at a point in time	W		12,568,817		27,525,572		86,012		187,234		12,654,829		27,712,806
Performance obligations satisfied over time			258,661		433,299		423,668		897,098		682,329		1,330,397

	W		12,827,478		27,958,871		509,680		1,084,332		13,337,158		29,043,203

103

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

36.

Selling and Administrative Expenses

Selling and administrative expenses for the three andsix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019				June 30, 2018
		Three- month period ended		Six- month period ended		Three- month period ended			Six- month period ended
Salaries	W		194,997		391,652		187,024			376,145
Retirement benefit expense			19,598		36,801		12,788			31,359
Welfare and benefit expense			31,378		59,068		28,540			55,600
Insurance expense			3,604		6,623		2,814			7,441
Depreciation			56,988		116,043		50,680			106,560
Amortization of intangible assets			26,434		40,398		12,407			26,184
Bad debt expense (reversal)			10,772		15,724		(314	)		18,068
Commission			161,884		341,851		189,284			346,096
Advertising expense			6,894		13,777		6,761			13,348
Training expense			1,728		3,281		2,080			3,613
Vehicle maintenance expense			1,591		4,457		2,666			5,038
Publishing expense			32		1,471		726			1,528
Business development expense			722		1,493		740			1,540
Rent expense			7,277		14,159		9,404			17,348
Telecommunication expense			2,092		4,357		6,042			11,736
Transportation expense			242		453		98			225
Taxes and dues			37,060		41,076		30,018			34,244
Expendable supplies expense			1,454		3,207		1,426			2,641
Water, light and heating expense			2,113		6,568		3,175			6,836
Repairs and maintenance expense			16,386		29,117		20,991			31,863
Ordinary development expense			37,553		78,583		42,513			84,603
Travel expense			4,037		8,546		3,477			6,964
Clothing expense			1,693		2,136		2,178			2,771
Survey and analysis expense			212		429		150			335
Membership fee			312		746		370			669
Others			30,222		61,635		28,421			61,396

	W		657,275		1,283,651		644,459			1,254,151

104

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

37.

OtherNon-operating Income and Expense

(1)

Othernon-operating income for the three andsix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019				June 30, 2018
		Three- month period ended		Six- month period ended		Three- month period ended		Six- month period ended
Reversal of other provisions	W		—		2,186		895		1,477
Reversal of other allowance for bad debt			960		960		—		—
Gains on government grants			67		139		67		145
Gains on assets contributed			2,707		2,771		394		418
Gains on liabilities exempted			616		719		97		7,021
Compensation and reparations revenue			19,822		38,664		22,945		42,755
Revenue from research contracts			1,427		2,577		1,750		2,844
Rental income			47,069		94,051		49,675		93,339
Others			22,786		29,090		18,003		30,653

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

(2)

Othernon-operating expense for the three andsix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019				June 30, 2018
		Three- month period ended		Six- month period ended		Three- month period ended		Six- month period ended
Compensation and reparations expenses	W		77		77		19,258		19,288
Accretion expenses of other provisions			5,225		383		61		190
Depreciation expenses on investment properties			4,047		4,291		218		508
Depreciation expenses on idle assets			1,636		3,272		1,637		3,274
Other bad debt expense			4,849		5,696		8,957		11,453
Donations			15,578		27,563		13,671		18,958
Others			4,383		9,856		36,817		43,850

	W		35,795		51,138		80,619		97,521

105

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

38.

Other Gains (Losses)

Composition of other gains (losses) for the three andsix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019						June 30, 2018
		Three- month period ended			Six- month period ended			Three- month period ended			Six- month period ended
Other gains
Gains on disposal of property, plant and equipment	W		20,353			29,187			11,997			26,363
Gains on disposal of intangible assets			—			97			3			3
Gains on foreign currency translation			13,907			10,955			4,060			8,161
Gains on foreign currency transaction			10,866			17,166			9,701			23,206
Gains on insurance proceeds			—			13			—			—
Others			43,890			110,235			44,031			106,818

Other losses
Losses on disposal of property, plant and equipment			(12,755	)		(26,747	)		(9,971	)		(13,400	)
Losses on disposal of intangible assets			—			—			(2	)		(6	)
Losses on impairment of property, plant, and equipment			(27,406	)		(29,685	)		(701,317	)		(701,317	)
Losses on impairment of intangible assets			(61,696	)		(61,696	)		—			—
Losses on foreign currency translation			—			(51,468	)		(12,005	)		(15,353	)
Losses on foreign currency transaction			(19,055	)		(28,915	)		(18,666	)		(33,373	)
Others			(26,496	)		(37,818	)		(13,159	)		(32,375	)

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

39.

Finance Income

Finance Income for the three andsix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019				June 30, 2018
		Three- month period ended		Six- month period ended		Three- month period ended		Six- month period ended
Interest income	W		63,275		124,579		57,438		108,116
Dividends income			2,427		3,740		3,704		11,811
Gains on disposal of financial assets			114		964		672		672
Gains on valuation of financial assets at fair value through profit or loss			3,830		8,391		2,289		5,010
Gains on valuation of derivatives			181,570		346,113		700,794		301,494
Gains on transaction of derivatives			30,425		65,569		17,924		37,367
Gains on foreign currency translation			57,044		86,337		43,402		89,543
Gains on foreign currency transaction			9,665		13,832		10,940		14,169

	W		348,350		649,525		837,163		568,182

106

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

40.

Finance Expenses

Finance expenses for the three andsix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019				June 30, 2018
		Three- month period ended		Six- month period ended		Three- month period ended		Six- month period ended
Interest expense	W		513,152		1,016,529		464,925		927,308
Losses on sale of financial assets			203		261		—		—
Losses on valuation of financial assets at fair value through profit or loss			—		296		5,427		3,410
Losses on valuation of derivatives			25,964		34,930		350,562		24,253
Losses on transaction of derivatives			7,145		16,807		5,376		13,885
Losses on foreign currency translation			264,971		434,778		414,977		452,024
Losses on foreign currency transaction			4,224		8,748		7,757		16,413
Others			933		2,619		—		392

	W		816,592		1,514,968		1,249,024		1,437,685

Capitalization rates for thesix-month periods ended June 30, 2019 and 2018 are 1.60%~3.85% and 2.64%~3.65% respectively.

41.

Income Taxes

Income tax expense (benefit) is calculated by adjusting adjustments recognized in the current period, changes in deferred tax assets and liabilities resulting from temporary differences, and income tax expense related to items recognized as other than profit or loss. The Group did not calculate the average effective tax rate for the current and previous periods, because income tax benefit occurred for the both periods.

107

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

42.

AssetsHeld-for-Sale

Assetsheld-for-sale as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019		December 31, 2018
Land (*1)	W		—		2,765
Buildings and Structures (*1)			—		19,369
Investments in associates (*2)			4,628		—
Investments in subsidiaries (*3)			747		747

	W		5,375		22,881

(*1)

The board of directors of KEPCO Engineering & Construction Company, Inc., a subsidiary of the Group, determined to dispose the office building in Yongin as part of the government’s plan to relocatestate-run companies for balanced national development and moved the head office to Kimchun, Kyungsangbukdo, in 2015. As the Group believes the book value of Yongin office will be recovered by a disposal transaction rather than continuous operation, it reclassified buildings, land and structures as assetsheld-for-sale. However, since the sale price of the office building has been expected to rise in accordance with the development plan in Yongin, Gyeonggi Province, the company has not actively carried out the procedure for the sale since April 2018. For this reason, the office building no longer satisfies the definition of assetsheld-for-sale by KIFRS 1105, due to the period required to complete the sale is expected more than one year under the circumstances that can be controlled by the Company. Accordingly, the Group reclassified the office building as investment properties.

(*2)	Ulleungdo Natural Energy Co., Ltd. was in the process of liquidating its business as of June 30, 2019 and has been reclassified to assetsheld-for-sale, accordingly.

(*3)	KOWEPO India Private Limited was in the process of liquidating its business as of June 30, 2019 and has been reclassified to assetsheld-for-sale, accordingly.

108

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

43.

Expenses Classified by Nature

Expenses classified by nature for thesix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019
		Selling and administrative expenses		Cost of sales		Total
Raw materials used	W		—		8,304,989		8,304,989
Salaries			391,652		1,816,355		2,208,007
Retirement benefit expense			36,801		202,848		239,649
Welfare and benefit expense			59,068		208,297		267,365
Insurance expense			6,623		47,255		53,878
Depreciation			116,043		5,184,017		5,300,060
Amortization of intangible assets			40,398		41,997		82,395
Bad debt expense			15,724		—		15,724
Commission			341,851		174,776		516,627
Advertising expense			13,777		4,044		17,821
Training expense			3,281		6,003		9,284
Vehicle maintenance expense			4,457		3,606		8,063
Publishing expense			1,471		1,415		2,886
Business promotion expense			1,493		2,001		3,494
Rent expense			14,159		89,584		103,743
Telecommunication expense			4,357		4,170		8,527
Transportation expense			453		2,243		2,696
Taxes and dues			41,076		268,046		309,122
Expendable supplies expense			3,207		14,487		17,694
Water, light and heating expense			6,568		17,213		23,781
Repairs and maintenance expense			29,117		932,408		961,525
Ordinary development expense			78,583		232,505		311,088
Travel expense			8,546		33,900		42,446
Clothing expense			2,136		2,955		5,091
Survey and analysis expense			429		1,745		2,174
Membership fee			746		11,333		12,079
Power purchase			—		9,474,179		9,474,179
Others			61,635		881,895		943,530

	W		1,283,651		27,964,266		29,247,917

109

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

43.

Expenses Classified by Nature, Continued

Expenses classified by nature for thesix-month periods ended June 30, 2019 and 2018 are as follows, continued:


In millions of won		June 30, 2018
		Selling and administrative expenses		Cost of sales		Total
Raw materials used	W		—		9,477,774		9,477,774
Salaries			376,145		1,731,556		2,107,701
Retirement benefit expense			31,359		181,032		212,391
Welfare and benefit expense			55,600		202,073		257,673
Insurance expense			7,441		48,069		55,510
Depreciation			106,560		4,878,477		4,985,037
Amortization of intangible assets			26,184		33,504		59,688
Bad debt expense			18,068		—		18,068
Commission			346,096		203,874		549,970
Advertising expense			13,348		3,949		17,297
Training expense			3,613		5,009		8,622
Vehicle maintenance expense			5,038		3,610		8,648
Publishing expense			1,528		1,563		3,091
Business promotion expense			1,540		2,101		3,641
Rent expense			17,348		77,532		94,880
Telecommunication expense			11,736		39,570		51,306
Transportation expense			225		2,137		2,362
Taxes and dues			34,244		247,660		281,904
Expendable supplies expense			2,641		14,409		17,050
Water, light and heating expense			6,836		17,187		24,023
Repairs and maintenance expense			31,863		983,398		1,015,261
Ordinary development expense			84,603		243,328		327,931
Travel expense			6,964		33,647		40,611
Clothing expense			2,771		2,044		4,815
Survey and analysis expense			335		1,796		2,131
Membership fee			669		5,692		6,361
Power purchase			—		9,012,749		9,012,749
Others			61,396		1,150,043		1,211,439

	W		1,254,151		28,603,783		29,857,934

110

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

44.

Earnings (Loss) Per Share

(1)

Basic earnings (loss) per share for thesix-month periods ended June 30, 2019 and 2018 are as follows:


In won		June 30, 2019						June 30, 2018
Type		Three- month period ended			Six- month period ended			Three- month period ended			Six- month period ended
Basic earnings (loss) per share	W		(697	)		(1,924	)		(1,479	)		(1,911	)

(2)

Net profit (loss) for the period and weighted average number of common shares used in the calculation of basic earnings (loss) per share for thesix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won except number of shares		June 30, 2019						June 30, 2018
Type		Three- month period ended			Six- month period ended			Three- month period ended			Six- month period ended
Net profit (loss) attributable to controlling interest	W		(447,546	)		(1,235,344	)		(949,219	)		(1,226,489	)
Profit (loss) used in the calculation of total basic earnings per share			(447,546	)		(1,235,344	)		(949,219	)		(1,226,489	)
Weighted average number of common shares			641,964,077			641,964,077			641,964,077			641,964,077

(3)

Weighted average number of common shares used in the calculation of basic earnings (loss) per share for thesix-month periods ended June 30, 2019 and 2018 are as follows:


In number of shares	June 30, 2019				June 30, 2018
Type	Three- month period ended		Six- month period ended		Three- month period ended		Six- month period ended
The number of common shares issued at beginning of the year		641,964,077		641,964,077		641,964,077		641,964,077
Weighted average number of common shares		641,964,077		641,964,077		641,964,077		641,964,077

(4)

There are no potential dilutive instruments and diluted earnings (loss) per share are same as basic earnings (loss) per share for thesix-month periods ended June 30, 2019 and 2018.

111

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

45.

Risk Management

(1)

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue while maximizing the return to shareholder through the optimization of the debt and equity balance. The capital structure of the Group consists of net debt (offset by cash and cash equivalents) and equity. The Group’s overall capital risk management strategy remains consistent with the prior year.

Details of the Group’s capital management accounts as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019			December 31, 2018
Total borrowings and debt securities	W		65,521,958			61,034,627
Cash and cash equivalents			1,308,117			1,358,345

Net borrowings and debt securities			64,213,841			59,676,282

Total shareholder’s equity	W		69,791,236			71,092,762

Debt to equity ratio			92.01	%		83.94	%

(2)

Financial risk management

The Group is exposed to various risks related to its financial instruments, such as, market risk (currency risk, interest rate risk, price risk), credit risk. The Group monitors and manages the financial risks relating to the operations of the Group through internal risk reports which analyze exposures by degree and magnitude of risks. The Group uses derivative financial instruments to hedge certain risk exposures. The Group’s overall financial risk management strategy remains consistent with the prior year.

(i)

Credit risk

Credit risk is the risk of finance loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises primarily from the sales activities, securities and derivatives. In addition, credit risk exposure may exist within financial guarantees and unused line of credits. As these financial institutions the Group makes transactions with are reputable financial institutions, the credit risk from them are considered limited. The Group decides credit transaction limits based on evaluation of client’s credit, through information obtained from the credit bureau and disclosed financial position at committing contracts.

①

Credit risk management

Electricity sales, the main operations of the Group are the necessity for daily life and industrial activities of Korean nationals, and have importance as one of the national key industries. The Group dominates the domestic market supplying electricity to customers. The Group is not exposed to significant credit risk as customers of the Group are diverse and are from various industries and areas. The Group uses publicly available information and its own internal data related to trade receivables, to rate its major customers and to measure the credit risk that a counter party will default on a contractual obligation. For the incurred but not recognized loss, it is measured considering overdue period.

②

Impairment and allowance account

In accordance with the Group policies, individual material financial assets are assessed on a regular basis, trade receivables that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Value of the acquired collateral (including the confirmation of feasibility) and estimated collectable amounts are included in this assessment.

Allowance for bad debts assessed on a collective basis are recognized for (i) the group of assets which individually are not material and (ii) incurred but not recognized losses that are assessed using statistical methods, judgment and past experience.

112

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

45.

Risk Management, Continued

(2)

Financial risk management, continued

Book values of the financial assets represent the maximum exposed amounts of the credit risk. Details of the Group’s level of maximum exposure to credit risk as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019		December 31, 2018
Cash and cash equivalents	W		1,308,117		1,358,345
Financial assets at fair value through profit or loss			2,200,495		920,935
Derivative assets (trading)			149,551		37,631
Equity investment at fair value through other comprehensive income			403,816		399,495
Financial assets at amortized cost			12,350		14,042
Loans			727,944		718,674
Long-term/short-term financial instruments			2,414,387		2,318,027
Derivative assets (applying hedge accounting)			188,330		64,704
Trade and other receivables			8,827,127		9,613,437
Financial guarantee contracts (*)			2,999,972		1,310,817

(*)	Maximum exposure associated with the financial guarantee contracts is the maximum amounts of the obligation.

As of the reporting date, there are no financial assets andnon-financial assets that were acquired through the exercise of the right of collateralized assets and reinforcement of credit arrangement.

(ii)

Market risk

Market risk is the risk that the Group’s fair values of the financial instruments or future cash flows are affected by the changes in the market. Market risk consists of interest rate risk, currency risk and other price risk.

(iii)

Sensitivity analysis

Significant assets and liabilities with uncertainties in underlying assumptions

①

Defined benefit obligation

A sensitivity analysis of defined benefit obligation assuming a 1% increase and decrease movements in the actuarial valuation assumptions as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won			June 30, 2019					December 31, 2018
Type	Accounts		1% Increase		1% Decrease			1% Increase			1% Decrease
Future salary increases	Increase (decrease) in defined benefit obligation	W		491,987		(427,336	)		416,956			(363,820	)
Discount rate	Increase (decrease) in defined benefit obligation			(427,808)		506,748			(377,221	)		445,833

Changes of employee benefits assuming a 1% increase and decrease movements in discount rate on plan asset for thesix-month periods ended June 30, 2019 and 2018 areW8,864 million andW7,357 million, respectively.

113

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

45.

Risk Management, Continued

(2)

Financial risk management, continued

②

Provisions

Changes in provisions due to movements in underlying assumptions as of June 30, 2019 and December 31, 2018 are as follows:


Type	Accounts	June 30, 2019			December 31, 2018
PCBs	Inflation rate		1.27	%		1.27	%
	Discount rate		2.18	%		2.18	%
Nuclear plants	Inflation rate		1.21	%		1.21	%
	Discount rate		2.94	%		2.94	%
Spent fuel	Inflation rate		2.93	%		2.93	%
	Discount rate		4.49	%		4.49	%

A sensitivity analysis of provisions assuming a 0.1% increase and decrease movements in the underlying assumptions as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won			June 30, 2019						December 31, 2018
Type	Accounts		0.1% Increase			0.1% Decrease			0.1% Increase			0.1% Decrease
Discount rate	PCBs	W		(554	)		557			(623	)		627
	Nuclear plants			(253,770	)		260,695			(256,513	)		263,595
	Spent fuel			(51,607	)		53,621			(49,182	)		51,098
Inflation rate	PCBs			561			(559	)		632			(629	)
	Nuclear plants			299,286			(291,297	)		294,984			(287,110	)
	Spent fuel			54,396			(52,424	)		51,837			(49,961	)

114

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

45.

Risk Management, Continued

(2)

Financial risk management, continued

Management judgment effected by uncertainties in underlying assumptions

①

Foreign currency risk

The Group undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary liabilities as of June 30, 2019 and December 31, 2018 are as follows:


In thousands of foreign currencies	Assets				Liabilities
Type	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
AED		10,821		10,513		26,196		5,890
AUD		142		143		412,646		717,712
BDT		81,934		71,575		910		1,175
BWP		1,467		1,214		—		—
CAD		114		96		—		4
CHF		—		—		200,000		400,000
CNY		—		—		26,140		26,140
CZK		—		—		1,940		—
EUR		1,088		337		69,100		105,673
GBP		—		—		28		1
GHS		25,879		25,794		—		—
HKD		—		—		1,648,753		1,650,000
IDR		170,814		60,568		—		206,935
INR		1,104,825		1,228,795		188,345		183,963
JOD		702		2,764		6		5
JPY		102,058		35,935		326,654		390,921
KZT		319		319		—		—
MGA		4,191,469		3,318,447		95,074		170,641
MMK		33,910		25,208		—		—
PHP		218,735		709,285		127,082		66,985
PKR		333,218		305,542		4,039		3,588
SAR		2,455		2,024		—		—
SEK		—		—		449,062		450,000
USD		1,610,116		1,422,510		9,646,361		8,103,602
UYU		112,121		39,898		3,993		4,253
VND		841,285		—		—		—
ZAR		149		170		5		4

A sensitivity analysis on the Group’s income for the period assuming a 10% increase and decrease in currency exchange rates as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019					December 31, 2018
Type		10% Increase			10% Decrease		10% Increase			10% Decrease
Increase (decrease) of profit before income tax	W		(1,024,129	)		1,024,129		(887,561	)		887,561
Increase (decrease) of shareholder’s equity (*)			(1,024,129	)		1,024,129		(887,561	)		887,561

(*)	The effect on the shareholders’ equity excluding the impact of income taxes.

115

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

45.

Risk Management, Continued

(2)

Financial risk management, continued

The sensitivity analysis above is conducted for monetary assets and liabilities denominated in foreign currencies other than functional currency, without consideration of hedge effect of related derivatives, as of June 30, 2019 and December 31, 2018. To manage its foreign currency risk related to foreign currency denominated receivables and payables, the Group has a policy to enter into cross-currency swap agreements. In addition, to manage its foreign currency risk related to foreign currency denominated expected sales transactions and purchase transactions, the Group enters into currency forward agreements.

②

Interest rate risk

The Group is exposed to interest rate risk due to its borrowing with floating interest rates. A 1% increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the reasonably possible change in interest rates.

The Group’s borrowings and debt securities with floating interest rates as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won
Type		June 30, 2019		December 31, 2018
Short-term borrowings	W		—		24,235
Long-term borrowings			2,529,303		2,358,860

	W		2,529,303		2,383,095

A sensitivity analysis on the Group’s long-term borrowings and debt securities assuming a 1% increase and decrease in interest rates, without consideration of hedge effect of related derivatives for thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019					December 31, 2018
Type		1% Increase			1% Decrease		1% Increase			1% Decrease
Increase (decrease) of profit before income tax	W		(25,293	)		25,293		(23,831	)		23,831
Increase (decrease) of shareholder’s equity (*)			(25,293	)		25,293		(23,831	)		23,831

(*)	The effect on the shareholders’ equity excluding the impact of income taxes.

To manage its interest rate risks, the Group enters into certain interest swap agreements or maintains an appropriate mix of fixed and floating rate borrowings. These sensitivity analysis above is conducted without consideration of hedge effect of related derivatives.

③

Electricity rates risk

The Group is exposed to electricity rates risk due to the rate regulation of the government which considers the effect of electricity rate on the national economy.

A sensitivity analysis on the Group’s income for the period assuming a 1% increase and decrease in price of electricity for thesix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019					June 30, 2018
Type		1% Increase		1% Decrease			1% Increase		1% Decrease
Increase (decrease) of profit before income tax	W		268,221		(268,221	)		271,311		(271,311	)
Increase (decrease) of shareholder’s equity (*)			268,221		(268,221	)		271,311		(271,311	)

(*)	The effect on the shareholders’ equity excluding the impact of income taxes.

116

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

45.

Risk Management, Continued

(2)

Financial risk management, continued

(iv)

Liquidity risk

The Group has established an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by continuously monitoring forecasted and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

In addition, the Group has established credit lines on its trade financing and bank overdrafts, and through payment guarantees it has received, it maintains an adequate credit (borrowing) line. In addition, the Group has the ability to utilize excess cash or long-term borrowings for major construction investments.

The following table shows the details of maturities ofnon-derivative financial liabilities as of June 30, 2019 and December 31, 2018. This table, based on the undiscounted cash flows of thenon-derivative financial liabilities including estimated interests, has been prepared based on the respective liabilities’ earliest maturity date.


In millions of won		June 30, 2019
Type		Less than 1 year		1~2 Years		2~5 Years		More than 5 years		Total
Borrowings and debt securities	W		12,042,740		8,182,365		29,279,409		28,667,399		78,171,913
Lease liabilities			646,693		547,223		1,641,670		2,836,886		5,672,472
Trade and other payables			5,146,231		284,317		707,342		1,770,438		7,908,328
Financial guarantee contracts (*)			901,573		—		35,904		2,062,495		2,999,972

	W		18,737,237		9,013,905		31,664,325		35,337,218		94,752,685


In millions of won		December 31, 2018
Type		Less than 1 year		1~2 Years		2~5 Years		More than 5 years		Total
Borrowings and debt securities	W		10,204,471		9,274,378		28,143,311		25,312,534		72,934,694
Finance lease liabilities			87,709		87,709		141,074		65,250		381,742
Trade and other payables			6,348,195		150,479		375,661		2,188,950		9,063,285
Financial guarantee contracts (*)			91,722		855,488		363,607		—		1,310,817

	W		16,732,097		10,368,054		29,023,653		27,566,734		83,690,538

(*)	This represents the total guarantee amounts associated with the financial guarantee contracts. Financial guarantee liabilities which are recognized as of June 30, 2019 and December 31, 2018 areW90,698 million andW15,586 million, respectively.

117

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

45.

Risk Management, Continued

(2)

Financial risk management, continued

The expected maturities fornon-derivative financial assets as of June 30, 2019 and December 31, 2018 in detail are as follows:


In millions of won		June 30, 2019
Type		Less than 1 year		1~5 Years		More than 5 years		*Other ()**		Total
Cash and cash equivalents	W		1,308,117		—		—		—		1,308,117
Equity investment at fair value through other comprehensive income			—		—		—		403,816		403,816
Financial assets at amortized cost			11,010		1,257		83		—		12,350
Loans			113,830		340,839		297,187		14,077		765,933
Long-term/short-term financial instruments			2,014,027		211,830		18		188,512		2,414,387
Financial assets at fair value through profit or loss			1,522,187		76		—		678,232		2,200,495
Trade and other receivables			7,074,733		955,299		753,314		51,997		8,835,343

	W		12,043,904		1,509,301		1,050,602		1,336,634		15,940,441


In millions of won		December 31, 2018
Type		Less than 1 year		1~5 Years		More than 5 years		*Other ()**		Total
Cash and cash equivalents	W		1,358,345		—		—		—		1,358,345
Equity investment at fair value through other comprehensive income			—		—		—		399,495		399,495
Financial assets at amortized cost			11,956		2,086		—		—		14,042
Loans			123,646		314,744		319,988		—		758,378
Long-term/short-term financial instruments			1,869,286		278,899		164,057		5,785		2,318,027
Financial assets at fair value through profit or loss			313,893		81,828		483,398		41,816		920,935
Trade and other receivables			7,795,619		1,067,800		701,743		57,651		9,622,813

	W		11,472,745		1,745,357		1,669,186		504,747		15,392,035

(*)	The maturities cannot be presently determined.

118

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

45.

Risk Management, Continued

(2)

Financial risk management, continued

Derivative liabilities classified by maturity periods from reporting date to maturity date of contract as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019
Type		Less than 1 year			1~2 Years			2~5 Years			More than 5 years			Total
Net settlement
- Trading	W		—			—			—			—			—
Gross settlement
- Trading			(3,589	)		—			(22,550	)		(32,950	)		(59,089	)
- Hedging			(1,903	)		(39,661	)		(104,574	)		(33,525	)		(179,663	)

	W		(5,492	)		(39,661	)		(127,124	)		(66,475	)		(238,752	)


In millions of won		December 31, 2018
Type		Less than 1 year		1~2 Years			2~5 Years		More than 5 years			Total
Net settlement
- Trading	W		—		—			—		—			—
Gross settlement
- Trading			5,734		16,565			28,283		40,124			90,706
- Hedging			5,154		(43,447	)		71,840		(40,917	)		(7,370	)

	W		10,888		(26,882	)		100,123		(793	)		83,336

119

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

45.

Risk Management, Continued

(3)

Fair value risk

The fair value of the Group’s actively-traded financial instruments (i.e. FVTPL, FVOCI, etc.) is based on the traded market-price as of the reporting period end. The fair value of the Group’s financial assets is the amount which the asset could be exchanged for or the amount a liability could be settled for.

The fair values of financial instruments where no active market exists or where quoted prices are not otherwise available are determined by using valuation techniques. Valuation techniques include using recent arm’s length market transactions between knowledgeable, willing parties, if available, reference to the current fair value of another instrument that is substantially the same, discounted cash flow analysis and option pricing models. If there is a valuation technique commonly used by market participants to price the instrument and that technique has been demonstrated to provide reliable estimates of prices obtained in actual market transactions, the Group uses that technique.

For trade receivables and payables, the Group considers the carrying value net of impairment as fair value. While for disclosure purposes, the fair value of financial liabilities is estimated by discounting financial instruments with similar contractual cash flows based on the effective interest method.

(i) Fair value and book value of financial assets and liabilities as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019				December 31, 2018
Type		Book value		Fair value		Book value		Fair value
Assets recognized at fair value
Financial assets at fair value through other comprehensive income	W		403,816		403,816		399,495		399,495
Derivative assets (trading)			149,551		149,551		37,631		37,631
Derivative assets (applying hedge accounting)			188,330		188,330		64,704		64,704
Financial assets at fair value through profit or loss			2,200,495		2,200,495		920,935		920,935

	W		2,942,192		2,942,192		1,422,765		1,422,765

Assets carried at amortized cost
Financial assets at amortized cost	W		12,350		12,350		14,042		14,042
Loans and receivables			727,944		727,944		718,674		718,674
Long-term financial instruments			8,827,127		8,827,127		448,741		448,741
Short-term financial instruments			400,360		400,360		1,869,286		1,869,286
Trade and other receivables			2,014,027		2,014,027		9,613,437		9,613,437
Cash and cash equivalents			1,308,117		1,308,117		1,358,345		1,358,345

	W		13,289,925		13,289,925		14,022,525		14,022,525

Liabilities recognized at fair value
Derivative liabilities (trading)	W		40,717		40,717		99,010		99,010
Derivative liabilities (applying hedge accounting)			136,560		136,560		213,153		213,153

	W		177,277		177,277		312,163		312,163

Liabilities carried at amortized cost
Secured borrowings	W		238,855		238,855		741,029		741,029
Unsecured bond			60,014,254		62,848,636		56,603,988		58,804,070
Lease liabilities			4,951,297		4,951,297		283,806		283,806
Unsecured borrowings			5,268,849		5,281,539		3,522,602		3,950,517
Trade and other payables (*)			7,908,328		7,908,328		9,063,285		9,063,285
Bank overdraft			—		—		167,008		167,008

	W		78,381,583		81,228,655		70,381,718		73,009,715

(*)	Excludes lease liabilities

120

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

45.

Risk Management, Continued

(3)

Fair value risk, continued

(ii)

Interest rates used for determining fair value

The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting date plus an adequate credit spread.

The discount rate used for calculating fair value as of June 30, 2019 and December 31, 2018 are as follows:


Type	June 30, 2019			December 31, 2018
Derivatives		0.63	% ~ 4.16%		0.02	% ~ 4.16%
Borrowings and debt securities		0.50	% ~ 7.31%		0.51	% ~ 5.14%
Lease		1.76	% ~ 10.83%		3.50	% ~ 10.83%

(iii)

Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, classified as Level 1, 2 or 3, based on the degree to which the fair value is observable.

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2: Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3: Inputs that are not based on observable market data.

Fair values of financial instruments by hierarchy level as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019
Type		Level 1		Level 2		Level 3		Total
Financial assets at fair value
Financial assets at fair value through other comprehensive income	W		214,198		—		189,618		403,816
Derivative assets			—		337,881		—		337,881
Financial assets at fair value through profit or loss			—		2,195,352		5,143		2,200,495

	W		214,198		2,533,233		194,761		2,942,192

Financial liabilities at fair value
Derivative liabilities	W		—		175,122		2,155		177,277


In millions of won		December 31, 2018
Type		Level 1		Level 2		Level 3		Total
Financial assets at fair value
Financial assets at fair value through other comprehensive income	W		210,056		—		189,439		399,495
Derivative assets			—		100,490		1,845		102,335
Financial assets at fair value through profit or loss			106,600		809,283		5,052		920,935

	W		316,656		909,773		196,336		1,422,765

Financial liabilities at fair value
Derivative liabilities	W		—		310,008		2,155		312,163

121

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

45.

Risk Management, Continued

(3)

Fair value risk, 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 thesix-month period ended June 30, 2019 and for the year ended December 31, 2018 are as follows:


In millions of won		June 30, 2019
		Beginning balance		Effect of change in accounting policy		Acquisition		Reclassified category		Valuation			Disposal			Foreign currency translation		Ending balance

Financial assets at fair value
Financial assets at fair value through profit or loss Cooperative	W		5,052		—		40		—		51			—			—		5,143
Financial assets at fair value through other comprehensive income Unlisted securities			189,439		—		—		—		(47	)		(916	)		1,142		189,618

In millions of won		December 31, 2018
		Beginning balance		Effect of change in accounting policy		Acquisition		Reclassified category		Valuation			Disposal			Foreign currency translation		Ending balance

Financial assets at fair value
Financial assets at fair value through profit or loss Cooperative	W		—		5,038		—		—		14			—			—		5,052
Financial assets at fair value through other comprehensive income Unlisted securities			—		197,450		—		—		(11,744	)		(326	)		4,059		189,439

122

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

46.

Service Concession Arrangements

(1)

Gas Complex • Thermal Power Plant at Ilijan, Philippines (BOT)

(i)

Significant terms and concession period of the arrangement

The Group has entered into a contract with National Power Corporation (the “NPC”), based in the Republic of the Philippines whereby the Group can collect the electricity rates which are composed of fixed costs and variable costs during the concession period from 2002 to 2022 after building, rehabilitating, and operating the power plant.

(ii)

Rights and classification of the arrangement

The Group has the rights to use and own the power plant during the concession period from 2002 to 2022. At the end of the concession period, the Group has an obligation to transfer its ownership of the power plant to NPC.

(iii)

The Group’s expected future collections of service concession arrangements as of June 30, 2019 are as follows:


In millions of won

Type		Amounts
Less than 1 year	W		120,833
1~2 years			120,833
2~3 years			110,762

	W		352,428

(2)

Hydroelectric Power Generation at Semangka, Indonesia (BOT)

(i)

Significant terms and concession period of the arrangement

The Group has entered into a contract with PT. Perusahaan Listrik Negara (the “PLN”) whereby the Group provides electricity generated and charge tariff rates designed to recover capital cost, fixed O&M cost, water usage cost, variable O&M cost and special facilities cost during the concession period after building, rehabilitating, and operating the power plant for approximately 30 years (2018~2048) subsequent to the completion of plant construction.

(ii)

Rights and classification of the arrangement

The Group has the rights to use and own the power plant during the concession period from 2018 to 2048. At the end of the concession period, PNL has an option to take over the ownership of the power plant from the Group.

(iii)

The Group’s expected future collections of service concession arrangements as of June 30, 2019 are as follows:


In millions of won

Type		Amounts
Less than 1 year	W		28,883
1~2 years			28,815
2~3 years			28,847
Over 3 years			598,867

	W		685,412

123

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

47.

Related Parties

(1)

Related parties of the Group as of June 30, 2019 are as follows:


Type		Related party
Parent		Republic of Korea government

Subsidiaries (114 subsidiaries)		Korea Hydro & Nuclear Power Co., Ltd., Korea South-East Power Co., Ltd., Korea Midland Power Co., Ltd., Korea Western Power Co., Ltd., Korea Southern Power Co., Ltd., Korea East-West Power Co., Ltd., KEPCO Engineering & Construction Company, Inc., KEPCO Plant Service & Engineering Co., Ltd., KEPCO Nuclear Fuel Co., Ltd., KEPCO KDN Co., Ltd., Garolim Tidal Power Plant Co., Ltd., Gyeonggi Green Energy Co., Ltd., Korea Offshore Wind Power Co., Ltd., KOSEP Material Co., Ltd., KEPCO International HongKong Ltd., KEPCO International Philippines Inc., KEPCO Philippines Corporation, KEPCO Ilijan Corporation, KEPCO Gansu International Ltd., KEPCO Philippines Holdings Inc., KEPCO Lebanon SARL, KEPCO Neimenggu International Ltd., KEPCO Australia Pty., Ltd., KEPCO Shanxi International Ltd., KOMIPO Global Pte Ltd., KOSEP Australia Pty., Ltd., KOMIPO Australia Pty., Ltd., KOWEPO Australia Pty., Ltd.,KOSPO Australia Pty., Ltd., KEPCO Netherlands B.V., KOREA Imouraren Uranium Investment Corp., KEPCO Middle East Holding Company, Qatrana Electric Power Company, Korea Electric Power Nigeria Ltd., KOWEPO International Corporation, KOSPO Jordan LLC, Korea Waterbury Uranium Limited Partnership, PT. Cirebon Power Service, EWP America Inc., KHNP Canada Energy, Ltd., KEPCO Bylong Australia Pty., Ltd., KNF Canada Energy Limited, KEPCO Holdings de Mexico, KST Electric Power Company, KEPCO Energy Service Company, KEPCO Netherlands S3 B.V., PT. KOMIPO Pembangkitan Jawa Bali, EWP Barbados 1 SRL, PT. Tanggamus Electric Power, KOMIPO America Inc, KOSEP USA, INC., PT. EWP Indonesia, KEPCO Netherlands J3 B.V., Global One Pioneer B.V., Global Energy Pioneer B.V., Mira Power Limited, EWP Philippines Corporation, KEPCO KPS Philippines Corp., KOSPO Chile SpA, PT. KOWEPO Sumsel Operation And Maintenance Services, Commerce and Industry Energy Co., Ltd., Gyeongju Wind Power Co., Ltd., California Power Holdings, LLC, DG Fairhaven Power, LLC, DG Whitefield, LLC, EWP Renewable Corporation, EWPRC Biomass Holdings, LLC, Springfield Power, LLC, HeeMang Sunlight Power Co., Ltd., Fujeij Wind Power Company, KOSPO Youngnam Power Co., Ltd., HI Carbon Professional Private Special Asset Investment Trust 1, Chitose Solar Power Plant LLC., Solar School Plant Co., Ltd., KEPCO Energy Solution Co. Ltd., KOSPO Power Services Limitada, KOEN Bylong Pty., Ltd., KOWEPO Bylong Pty., Ltd., KOSPO Bylong Pty., Ltd., EWP Bylong Pty., Ltd., KOWEPO Lao International, KOMIPO Bylong Pty Ltd., Energy New Industry Specialized Investment Private Investment Trust., KEPCO US Inc., KEPCO Alamosa LLC, KEPCO Solar of Alamosa, LLC (formerly, Cogentrix of Alamosa, LLC),KEPCO-LG CNS Mangilao Holdings LLC, Mangilao Investment LLC,KEPCO-LG CNS Mangilao Solar, LLC, Jeju Hanlim Offshore Wind Co., Ltd., PT, Siborpa Eco Power,e-New Industry LB Fund 1, Songhyune-New Industry Fund, BSKE-New Industry Fund VII, PT. Korea Energy Indonesia, KOLAT SpA, KEPCO California, LLC, KEPCO Mojave Holdings, LLC, Incheon Fuel Cell Co., Ltd., KOEN Service Co., Ltd., KOMIPO Service Co., Ltd., KOWEPO Service Co., Ltd., KOSPO Service Co., Ltd., EWP Service Co., Ltd., PT. KOMIPO Energy Indonesia, KNF partners Co., Ltd., KOSPO USA Inc., Nambu USA LLC, Tamra Offshore Wind Power Co., Ltd., KEPCO MCS Co., Ltd., KEPCO FMS Co., Ltd., Firstkeepers Co., Ltd., Secutec Co., Ltd., SE Green Energy Co., Ltd.

Associates (61 associates)		Dongducheon Dream Power Co., Ltd., Korea Gas Corporation, Daegu Photovoltaic Co., Ltd., Jeongam Wind Power Co., Ltd., Korea Power Engineering Service Co., Ltd., Heang Bok Do Si Photovoltaic Power Co., Ltd., Korea Electric Power Industrial Development Co., Ltd., Goseong Green Energy Co., Ltd., Gangneung Eco Power Co., Ltd., Shin Pyeongtaek Power Co., Ltd., Naepo Green Energy Co., Ltd., Noeul Green Energy Co., Ltd., YTN Co., Ltd., Cheongna Energy Co., Ltd., Samcheok Eco Materials Co., Ltd., Gangwon Wind Power Co., Ltd., Gwangyang Green Energy Co., Ltd., Hyundai Green Power Co., Ltd., Korea Power Exchange, Hyundai Energy Co., Ltd., Ecollite Co., Ltd., Taebaek Wind Power Co., Ltd., Taeback Guinemi Wind Power Co., Ltd., Pyeongchang Wind Power Co., Ltd., Daeryun Power Co., Ltd., Changjuk Wind Power Co., Ltd., KNH Solar Co., Ltd.,S-Power Co., Ltd., Hadong Mineral Fiber Co., Ltd., Green Biomass Co., Ltd., SPC Power Corporation, Gemeng International Energy Co., Ltd., PT. Cirebon Electric Power, KNOC Nigerian East Oil Co., Ltd., KNOC Nigerian West Oil Co., Ltd., PT Wampu Electric Power, PT. Bayan Resources TBK, Nepal Water & Energy Development Company Private Limited, Pioneer Gas Power Limited, Eurasia Energy Holdings,Xe-PianXe-Namnoy Power Co., Ltd., PT. Mutiara Jawa, Jinbhuvish Power Generation Pvt. Ltd., Busan Green Energy Co., Ltd., Gunsan Bio Energy Co., Ltd., Korea Electric Vehicle Charging Service, Korea Nuclear Partners Co., Ltd., Korea Electric Power Corporation Fund, Energy Infra Asset Management Co., Ltd., Daegu clean Energy Co., Ltd., YaksuESS Co., Ltd, PND solar., Ltd, Hyundai Eco Energy Co., Ltd., YeongGwang Yaksu Wind Electric. Co., Ltd, Green Energy Electricity Generation Co., Ltd., Korea Energy Solutions Co., Ltd, ITR Co., Ltd, Structure test network Co., Ltd., Namjeongsusang Solar Power Operatin Co., Ltd., Indeck Niles Development, LLC, Indeck Niles Asset Management, LLC

Joint ventures (58 joint ventures)		Daegu Green Power Co., Ltd., KEPCO SPC Power Corporation, Daejung Offshore Wind Power Co., Ltd., KAPES, Inc., Dangjin Eco Power Co., Ltd., Honam Wind Power Co., Ltd., Seokmun Energy Co., Ltd., Incheon New Power Co., Ltd., Chun-cheon Energy Co., Ltd., Yeonggwangbaeksu Wind Power Co., Ltd., KW Nuclear Components Co., Ltd., KEPCO-Uhde Inc., GS Donghae Electric Power Co., Ltd., Busan Shinho Solar Power Co., Ltd., Global Trade Of Power System Co., Ltd., Expressway Solar-light Power Generation Co., Ltd., Gansu Datang Yumen Wind Power Co., Ltd., Datang Chifeng Renewable Power Co., Ltd., Rabigh Electricity Company, Rabigh Operation & Maintenance Company Limited, Datang KEPCO Chaoyang Renewable Power Co., Ltd., Shuweihat Asia Power Investment B.V., Shuweihat Asia Operation & Maintenance Company, Waterbury Lake Uranium L.P.,ASM-BG Investicii AD, RES Technology AD, Jamaica Public Service Company Limited, KV Holdings, Inc., Amman Asia Electric Power Company, Kelar S.A, PT. Tanjung Power Indonesia, Nghi Son 2 Power LLC, Daehan Wind Power PSC, MOMENTUM, Barakah One Company, Nawah Energy Company, Yeonggwang Wind Power Co., Ltd., Chester Solar IV SpA, Chester Solar V SpA, Diego de Almagro Solar SpA, South Jamaica Power Company Limited, Daesan Green Energy Co.,Ltd., RE Holiday Holdings LLC, RE Pioneer Holdings LLC, RE Barren Ridge 1 Holdings LLC, RE Astoria 2 LandCo LLC, RE Barren Ridge LandCo LLC, Laurel SpA, KIAMCO KOWEPO Bannerton Hold Co Pty Ltd, Chile Solar JV SpA, Taebaek Gadeoksan Wind Power Co., Ltd., Cheong-Song Noraesan Wind Power Co., Ltd., Chester Solar I SpA, Solar Philippines Calatagan Corporation, Saemangeum Solar Power Co., Ltd., Chungsongmeon BongSan wind power Co., Ltd., Jaeun Resident Wind Power Plant Co., Ltd., DE Energia SpA

Others (3 others)		Korea Development Bank, KEPCO Singapore Holdings Pte., Ltd., Ulleungdo Natural Energy Co., Ltd.

124

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

47.

Related Parties, Continued

(2)

Transactions between the Company and its subsidiaries are eliminated during the consolidation and are not disclosed in the notes.

(3)

Related party transactions for thesix-month periods ended June 30, 2019 and 2018 are as follows:

<Sales and Others>


In millions of won				Sales and others
Company name	Transaction type			June 30, 2019		June 30, 2018
<Associates>
Korea Gas Corporation		Electricity sales	W		71,793		48,475
Dongducheon Dream Power Co., Ltd.		Electricity sales			3,045		3,522
S-Power Co., Ltd.		Service			3,388		4,403
Hyundai Green Power Co., Ltd.		Design service			11,436		11,684
Korea Electric Power Industrial Development Co., Ltd.		Service			5,867		8,459
Daeryun Power Co., Ltd.		Electricity sales			973		865
Korea Power Exchange		Service			3,459		3,100
Samcheok Eco Materials Co., Ltd.		Electricity sales			288		194
Gangwon Wind Power Co., Ltd.		Electricity sales			2,329		2,323
Cheongna Energy Co., Ltd.		Service			7,011		7,324
Others (Busan Green Energy Co., Ltd. and 36 others)		Electricity sales			112,104		59,377

<Joint ventures>
GS Donghae Electric Power Co., Ltd.		Electricity sales			13,057		5,098
Chun-cheon Energy Co., Ltd.		Electricity sales			807		593
Daegu Green Power Co., Ltd.		Electricity sales			529		471
Nawah Energy Company		Service			47,764		22,607
KAPES, Inc.		Commission			227		484
Rabigh Electricity Company		Service			12,219		16,250
Seokmun Energy Co., Ltd.		Service			584		922
Yeonggwang Wind Power Co., Ltd.		Electricity sales			75		—
Others (Yeonggwangbaeksu Wind Power Co., Ltd. and 30 others)		Electricity sales			54,029		46,724

<Others>
Yeongwol Energy Station Co., Ltd.		Service			—		373
DS POWER Co., Ltd.		Service			—		565
Korea Development Bank		Electricity sales			1,880		1,527
		Interest income			816		2,868

125

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

47.

Related Parties, Continued

(3)

Related party transactions for thesix-month periods ended June 30, 2019 and 2018 are as follows, continued:

<Purchase and Others>


In millions of won				Purchase and others
Company name	Transaction type			June 30, 2019		June 30, 2018
<Associates>
Korea Gas Corporation		Electricity sales	W		2,173,304		2,725,083
Dongducheon Dream Power Co., Ltd.		Electricity sales			344,850		408,864
S-Power Co., Ltd.		Service			280,002		230,253
Hyundai Green Power Co., Ltd.		Design service			226,596		222,951
Korea Electric Power Industrial Development Co., Ltd.		Service			129,167		144,966
Daeryun Power Co., Ltd.		Electricity sales			63,673		80,642
Korea Power Exchange		Service			68,748		106,553
Samcheok Eco Materials Co., Ltd.		Electricity sales			3,889		384
Gangwon Wind Power Co., Ltd.		Electricity sales			13,737		15,089
Cheongna Energy Co., Ltd.		Service			58,747		58
Others (Busan Green Energy Co., Ltd. and 36 others)		Electricity sales			40,018		40,336

<Joint ventures>
GS Donghae Electric Power Co., Ltd.		Electricity sales			370,440		387,820
Chun-cheon Energy Co., Ltd.		Electricity sales			172,257		174,479
Daegu Green Power Co., Ltd.		Electricity sales			162,207		156,390
KAPES, Inc.		Commission			59,062		75,047
Seokmun Energy Co., Ltd.		Service			14,650		11,599
Yeonggwang Wind Power Co., Ltd.		Electricity sales			13,660		—
Others (Yeonggwangbaeksu Wind Power Co., Ltd. and 30 others)		Electricity sales			13,426		14,378

<Others>
DS POWER Co., Ltd.		Service			—		4,019
Korea Development Bank		Interest expense			2,053		2,322
		Dividends paid			7		166,880

126

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

47.

Related Parties, Continued

(4)

Receivables and payables arising from related party transactions as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won			Receivables				Payables
Company name	Type		June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
<Associates>
Korea Gas Corporation	Trade receivables	W		13,164		9,439		—		—
	Non-trade receivables and others			394		498		—		—
	Trade payables			—		—		246,862		601,092
	Non-trade payables and others			—		—		168		314
S-Power Co., Ltd.	Trade receivables			403		922		—		—
	Non-trade receivables and others			439		34		—		—
	Trade payables			—		—		28,753		56,897
	Non-trade payables and others			—		—		—		16
Dongducheon Dream Power Co., Ltd.	Trade receivables			638		332		—		—
	Non-trade receivables and others			268		298		—		—
	Trade payables			—		—		41,747		74,651
	Non-trade payables and others			—		—		34		10
Goseong Green Energy Co., Ltd.	Non-trade receivables and others			2,629		—		—		—
	Non-trade payables and others			—		—		45,623		43,020
Hyundai Green Power Co., Ltd.	Trade receivables			632		390		—		—
	Trade payables			—		—		45,858		38,072
Daeryun Power Co., Ltd.	Trade receivables			290		178		—		—
	Trade payables			—		—		3,751		15,845
Hyundai Energy Co., Ltd.	Trade receivables			160		57		—		—
	Non-trade receivables and others			11,404		9,664		—		—
	Trade payables			—		—		50		259
	Non-trade payables and others			—		—		9,178		8,021
Gunsan Bio Energy Co., Ltd.	Non-trade receivables and others			—		3,458		—		—
Korea Electric Power Industrial Development Co., Ltd.	Trade receivables			806		278		—		—
	Non-trade receivables and others			11		51		—		—
	Trade payables			—		—		4,492		—
	Non-trade payables and others			—		—		10,255		13,102
Noeul Green Energy Co., Ltd.	Trade receivables			5		3		—		—
	Non-trade payables and others			—		—		11,307		8,774
Busan Green Energy Co., Ltd.	Trade receivables			3		1		—		—
	Non-trade receivables and others			—		—		15,239		—
	Non-trade payables and others			—		—		—		10,882
Korea Power Exchange	Trade receivables			947		847		—		—
	Non-trade receivables and others			183		229		—		—
	Trade payables			—		—		4,054		—
	Non-trade payables and others			—		—		1,756		1,214
Others (Gangwon Wind Power Co., Ltd. and 34 others)	Trade receivables			2,456		721		—		—
	Non-trade receivables and others			3,588		1,377		—		—
	Trade payables			—		—		2,076		6,217
	Non-trade payables and others			—		—		2,986		740

127

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

47.

Related Parties, Continued

(4)

Receivables and payables arising from related party transactions as of June 30, 2019 and December 31, 2018 are as follows, continued:


In millions of won		Receivables				Payables
Company name	Type	June 30, 2019		December 31, 2018		June 30, 2019		December 31, 2018
<Joint ventures>
GS Donghae Electric Power Co., Ltd.	Trade receivables		461		245		—		—
	Non-trade receivables and others		338		2,537		—		—
	Trade payables		—		—		57,379		69,820
	Non-trade payables and others		—		—		4		59
Nawah Energy Company	Trade receivables		41,222		29,614		—		—
	Non-trade receivables and others		—		253		—		—
Chun-cheon Energy Co., Ltd.	Trade receivables		160		20		—		—
	Non-trade receivables and others		2,119		308		—		—
	Trade payables		—		—		18,090		33,796
Daegu Green Power Co., Ltd.	Trade receivables		172		110		—		—
	Non-trade receivables and others		17		12		—		—
	Trade payables		—		—		16,620		32,609
Amman Asia Electric Power Company	Non-trade payables and others		—		—		18,709		18,351
KAPES, Inc.	Non-trade receivables and others		118		253		—		—
	Non-trade payables and others		—		—		26,080		338
Honam Wind Power Co., Ltd.	Trade payables		—		—		70		432
	Non-trade payables and others		—		—		4,417		3,573
Kelar S.A	Non-trade receivables and others		15,223		—		—		—
Others (Seokmun Energy Co., Ltd. and 16 others)	Trade receivables		2,119		784		—		—
	Non-trade receivables and others		3,144		839		—		—
	Trade payables		—		—		366		911
	Non-trade payables and others		—		—		7,076		6,577

<Others>
Korea Development Bank	Accrued interest income		466		1,147		—		—
	Non-trade receivables and others		91,715		12,125		—		—
	Non-trade payables and others		—		—		117		218
	Derivatives		40,396		27,306		7,243		18,095

128

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

47.

Related Parties, Continued

(5)

Loans and others arising from related party transactions as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won
Type	Company name		Beginning balance			Loans		Collection			Others			Ending balance
Associates	KNOC Nigerian East Oil Co., Ltd., KNOC Nigerian West Oil Co., Ltd.	W		27,634			49		—			887			28,570
	(Allowance for doubtful accounts)			(6,065	)		—		—			(1,200	)		(7,265	)
Associates	PT. Cirebon Electric Power			8,696			—		(3,419	)		604			5,881
Associates	Xe-PianXe-Namnoy Power Co., Ltd.			1,413			—		—			—			1,413
Associates	PT Wampu Electric Power			14,880			—		—			1,057			15,937
Associates	Gunsan Bio Energy Co., Ltd.			9,396			3,000		—			—			12,396
Associates	Hyundai Energy Co., Ltd.			2,465			—		—			—			2,465
	(Allowance for doubtful accounts)			(2,465	)		—		—			—			(2,465	)
Joint ventures	Kelar S.A			48,694			—		—			1,685			50,379
Joint ventures	Chester Solar IV SpA			—			1,659		—			16			1,675
Joint ventures	Chun-cheon Energy Co., Ltd.			616			1,232		—			—			1,848
Joint ventures	Chester Solar V SpA			—			526		—			5			531
Joint ventures	Diego de Almagro Solar SpA			—			2,065		—			20			2,085
Joint ventures	Dangjin Eco Power Co., Ltd.			—			2,600		—			—			2,600
Joint ventures	DE energia SpA			—			6,799		—			(173	)		6,626

		W		105,264			17,930		(3,419	)		2,901			122,676

(6)

Borrowings arising from related party transactions as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won
Related parties	Type			Beginning balance		Borrowings		Repayment			Others		Ending balance
Korea Development Bank		Facility	W		66,793		—		(8,507	)		—		58,286
		Others			4,154		—		(178	)		—		3,976
		Operating funds			81,000		—		(32,000	)		—		49,000
		Syndicated Loan			17,276		—		(963	)		997		17,310

(7)

Guarantees provided to associates or joint ventures as of June 30, 2019 are as follows:


In millions of won and thousands of foreign currencies
Primary guarantor	Principal obligor	Type of guarantees	Credit limit		Guarantee
Korea Electric Power Corporation	Shuweihat Asia Operation & Maintenance Company	Performance guarantees	USD	11,000	SAPCO
Korea Electric Power Corporation	Rabigh Operation & Maintenance Company Limited	Performance guarantees and others	USD	1,386	RABEC
Korea Electric Power Corporation	Barakah One Company	Debt guarantees	USD	900,000	Export-Import Bank of Korea and others
		Performance guarantees and others	USD	3,776,561	Export-Import Bank of Korea and others
Korea Electric Power Corporation	RE Holiday Holdings LLC	Performance guarantees	USD	223,000	EPS Renewables Holdings, LLC, Santander Bank and others
Korea Electric Power Corporation	RE Pioneer Holdings LLC	Performance guarantees	USD	170,000	EPS Renewables Holdings, LLC, Santander Bank and others
Korea Electric Power Corporation	RE Barren Ridge 1 Holdings LLC	Performance guarantees	USD	149,000	Firstar Development, LLC, Santander Bank and others
Korea Electric Power Corporation	Nghi Son 2 Power LLC	Performance guarantees	USD	27,930	SMBC Ho Chi Minh and others
Korea Western Power Co., Ltd.	Cheongna Energy Co., Ltd.	Collateralized money invested Guarantees for supplemental funding and others (*1)	KRW	3,648 —	KEB Hana Bank and others KEB Hana Bank and others

129

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

47.

Related Parties, Continued

(7)

Guarantees provided to associates or joint ventures as of June 30, 2019 are as follows, continued:


In millions of won and thousands of foreign currencies
Primary guarantor	Principal obligor	Type of guarantees	Credit limit	Guarantee
Korea Western Power Co., Ltd.	Xe-PianXe-Namnoy Power Co., Ltd.	Payment guarantees for business reserve	USD 2,500	Krung Thai Bank
		Collateralized money invested	KRW 72,479	Krung Thai Bank
		Impounding bonus guarantees	USD 5,000	SK E&C
Korea Western Power Co., Ltd.	Rabigh Operation & Maintenance Company Limited	Performance guarantees and others	SAR 5,600	Saudi Arabia British Bank
Korea Western Power Co., Ltd.	Daegu Photovoltaic Co., Ltd.	Collateralized money invested	KRW 1,950	Korea Development Bank
Korea Western Power Co., Ltd.	Dongducheon Dream Power Co., Ltd.	Collateralized money invested (*2)	KRW 37,494	Kookmin Bank and others
		Debt guarantees	KRW 20,300	BNK Securities and others
Korea Western Power Co., Ltd.	PT. Mutiara Jawa	Collateralized money invested	KRW 1,181	Woori Bank
Korea Western Power Co., Ltd.	Heang Bok Do Si Photovoltaic Power Co., Ltd.	Collateralized money invested	KRW 215	Nonghyup Bank
Korea Western Power Co., Ltd.	Shin Pyeongtaek Power Co., Ltd.	Collateralized money invested	KRW 64,168	Kookmin Bank
		Guarantees for supplemental funding (*1)	—	Kookmin Bank
Korea East-West Power Co., Ltd.	Busan Shinho Solar Power Co., Ltd.	Collateralized money invested	KRW 4,759	Korea Development Bank and others
Korea East-West Power Co., Ltd.	Seokmun Energy Co., Ltd.	Collateralized money invested	KRW 17,293	Kookmin Bank and others
Korea East-West Power Co., Ltd.	Chun-cheon Energy Co., Ltd.	Collateralized money invested	KRW 39,317	Kookmin Bank and others
		Guarantees for supplemental funding (*1)	KRW 20,000	Kookmin Bank and others
Korea East-West Power Co., Ltd.	Honam Wind Power Co., Ltd.	Collateralized money invested	KRW 4,426	Shinhan Bank and others
Korea East-West Power Co., Ltd.	GS Donghae Electric Power Co., Ltd.	Collateralized money invested	KRW 249,461	Korea Development Bank and others
Korea East-West Power Co., Ltd.	Yeonggwangbaeksu Wind Power Co., Ltd.	Collateralized money invested	KRW 2,793	Kookmin Bank and others
Korea East-West Power Co., Ltd.	Yeonggwang Wind Power Co., Ltd.	Collateralized money invested	KRW 20,097	KDB Capital Corporation and others
Korea East-West Power Co., Ltd.	Daesan Green Energy Co., Ltd.	Collateralized money invested	KRW 17,281	IBK
Korea East-West Power Co., Ltd.	Taebaek Gadeoksan Wind Power Co., Ltd.	Collateralized money invested	KRW 8,420	Samsung Fire & Marine Insurance Co., Ltd. and others
Korea East-West Power Co., Ltd.	PT. Tanjung Power Indonesia	Debt guarantees	USD 24,544	Sumitomo mitsui banking
		Other guarantees	USD 3,150	PT Adaro Indonesia
Korea East-West Power Co., Ltd.	South Jamaica Power Company Limited	Performance guarantees	USD 14,400	Societe Generale
EWP Barbados 1 SRL	South Jamaica Power Company Limited	Guarantees for supplemental funding (*1, 3)	USD 13,040	JCSD Trustee Services Limited and others
Korea Southern Power Co., Ltd.	KNH Solar Co., Ltd.	Collateralized money invested	KRW 2,257	Shinhan Bank and Kyobo Life Insurance Co., Ltd.
		Performance guarantees and guarantees for supplemental funding (*1)	—
Korea Southern Power Co., Ltd.	Daeryun Power Co., Ltd.	Collateralized money invested	KRW 26,235	Korea Development Bank and others
		Guarantees for supplemental funding and others (*1)	—

130

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

47.

Related Parties, Continued

(7)

Guarantees provided to associates or joint ventures as of June 30, 2019 are as follows, continued:


In millions of won and thousands of foreign currencies
Primary guarantor	Principal obligor		Type of guarantees	Credit limit	Guarantee
Korea Southern Power Co., Ltd.	Changjuk Wind Power Co., Ltd.		Collateralized money invested	KRW 8,699	Shinhan Bank
			Guarantees for supplemental funding (*1)	—	Shinhan Bank
Korea Southern Power Co., Ltd.	Daegu Green Power Co., Ltd.	��	Collateralized money invested	KRW 44,123	Shinhan Bank and others
Korea Southern Power Co., Ltd.	Kelar S.A		Performance guarantees	USD 63,707	KEB Hana Bank, SMBC, Mizuho Bank, MUFG, Natixis
Korea Southern Power Co., Ltd.	Daehan Wind Power PSC		Debt guarantees	USD 18,098	Shinhan Bank, Standard Chartered
			Performance guarantees	USD 3,000	Shinhan Bank
			Guarantees for supplemental funding (*1)	—	Shinhan Bank
Korea Southern Power Co., Ltd.	Pyeongchang Wind Power Co., Ltd.		Collateralized money invested	KRW 5,229	Woori Bank and Shinhan Bank and others
			Performance guarantees	—	Woori Bank and Shinhan Bank and others
Korea Southern Power Co., Ltd.	Taebaek Wind Power Co., Ltd.		Guarantees for supplemental funding (*1)	—	Shinhan Bank and others
Korea Southern Power Co., Ltd.	Jeongam Wind Power Co., Ltd.		Collateralized money invested	KRW 4,418	IBK, SK Securities Co., Ltd. and others
			Performance guarantees	—	IBK, SK Securities Co., Ltd. and others
Korea Southern Power Co., Ltd.	Samcheok Eco Materials Co., Ltd.		Payment guarantees (*7)	—	SEM Investment Co., Ltd.
Korea Midland Power Co., Ltd.	Hyundai Green Power Co., Ltd.		Collateralized money invested	KRW 127,571	Korea Development Bank and others
Korea Midland Power Co., Ltd.	PT. Cirebon Electric Power		Debt guarantees	USD 11,825	Mizuho Bank
Korea Midland Power Co., Ltd.	PT Wampu Electric Power		Debt guarantees	USD 4,854	SMBC
Korea Midland Power Co., Ltd.	YaksuESS Co., Ltd.		Collateralized money invested	KRW 509	IBK
Korea Midland Power Co., Ltd.	Namjeongsusang Solar Power Operatin Co., Ltd.		Collateralized money invested	KRW 969	IBK
Korea Midland Power Co., Ltd.	YeongGwang Yaksu Wind Electric. Co., Ltd.		Collateralized money invested	KRW 442	IBK and others
Korea Midland Power Co., Ltd.	Green Energy Electricity Generation Co., Ltd.		Collateralized money invested	KRW 628	IBK
			Guarantees for supplemental funding and others (*1)	—	IBK and others
Korea South-East Power Co., Ltd.	Hyundai Energy Co., Ltd.		Collateralized money invested (*4)	—	Korea Development Bank and others
			Guarantees for supplemental funding and others (*1,5)	KRW 78,600	Korea Development Bank and others
Korea South-East Power Co., Ltd.	RES Technology AD		Collateralized money invested	KRW 16,318	UniCredit Bulbank and others
Korea South-East Power Co., Ltd.	ASM-BG Investicii AD		Collateralized money invested	KRW 21,357	UniCredit Bulbank and others
Korea South-East Power Co., Ltd.	Expressway Solar-light Power Generation Co., Ltd.		Guarantees for supplemental funding (*1,6)	KRW 2,500	Woori Bank

131

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

47.

Related Parties, Continued

(7)

Guarantees provided to associates or joint ventures as of June 30, 2019 are as follows, continued:


In millions of won and thousands of foreign currencies
Primary guarantor	Principal obligor	Type of guarantees	Credit limit	Guarantee
Korea South-East Power Co., Ltd.	S-Power Co., Ltd.	Collateralized money invested	KRW 116,351	Korea Development Bank and others
Korea South-East Power Co., Ltd.	Goseong Green Energy Co., Ltd.	Collateralized money invested	KRW 2,410	Kyobo Life Insurance Co., Ltd. and others
Korea South-East Power Co., Ltd.	Gangneung Eco Power Co., Ltd.	Collateralized money invested	KRW 2,464	Kyobo Life Insurance Co., Ltd. and others
Korea South-East Power Co., Ltd.	PND solar., Ltd.	Collateralized money invested	KRW 1,320	IBK and others
Korea South-East Power Co., Ltd.	Hyundai Eco Energy Co., Ltd.	Collateralized money invested	KRW 3,438	Samsung Life Insurance and others
Korea South-East Power Co., Ltd.	Jaeun Resident Wind Power Plant Co., Ltd.	Collateralized money invested	KRW 2,494	IBK
Korea South-East Power Co., Ltd.	Cheongsong Myeonbongsan Wind Power Plant Co., Ltd.	Collateralized money invested	KRW 2,736	Kyobo Life Insurance Co., Ltd. and others
Korea Hydro & Nuclear Power Co., Ltd.	Noeul Green Energy Co., Ltd.	Collateralized money invested	KRW 9,677	KEB Hana Bank and others
Korea Hydro & Nuclear Power Co., Ltd.	Busan Green Energy Co., Ltd.	Collateralized money invested	KRW 14,247	Shinhan Bank and others
KEPCO Plant Service & Engineering Co., Ltd.	Incheon New Power Co., Ltd.	Collateralized money invested	KRW 521	Shinhan Bank
		Guarantees for supplemental funding and others (*1)	—	Shinhan Bank

(*1)

The Group guarantees to provide supplemental funding for business with respect to excessive business expenses or insufficient repayment of borrowings.

(*2)

The common stocks of Dongducheon Dream Power Co., Ltd. held by the Group were pledged as collateral.

(*3)

This includes a guarantee for the shareholder’s capital payment in connection with the business of 190MW gas complex thermal power plant in Jamaica. EWP Barbados 1 SRL’s capital contribution amount is USD 16,560 thousand and the total amount of guarantees is USD 5,340 thousand which consists of USD 1,840 thousand of EWP Barbados 1 SRL’s contribution obligation and USD 3,500 thousand of South Jamaica Energy Holding Limited’s portion (50%) of contribution obligation.

(*4)

The Group recognized impairment loss on all of the equity securities of Hyundai Energy Co., Ltd. in prior years, and the acquisition cost of the securities provided as collateral isW47,067 million.

(*5)

Pursuant to the guarantee agreement, the Group recognized other provisions ofW40,898 million as the possibility of economic outflow to fulfill the obligation was probable and the amount could be reasonably estimated.

(*6)

The Group has granted the right to Hana Financial Investment Co., Ltd., as an agent for the creditors to Expressway Solar-light Power Generation Co., Ltd. (“ESPG”), to the effect that in the event of acceleration of ESPG’s payment obligations under certain borrowings to such creditors, Hana Financial may demand the Group to dispose of shares in ESPG held by the Group and apply the resulting proceeds to repayment of ESPG’s obligations.

(*7)

The Group has the obligation to purchase the stocks should preferred stockholders elect to sell their stocks on the expected sell date (3 years from preferred stock payment date) and is required to guarantee the promised yield when preferred stockholders sell their stocks. In relation to this guarantee, the Group has recognizedW2,155 million of derivative liabilities as of June 30, 2019.

132

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

47.

Related Parties, Continued

(8)

As of June 30, 2019, there is no financial guarantee contract provided by related parties.

(9)

Derivatives transactions with related parties as of June 30, 2019 are as follows:

(i) Currency Swap


In millions of won and thousands of foreign currencies
Counterparty	Contract year			Contract Amount				Contract interest rate per annum							Contract exchange rate (in won)
Counterparty	Contract year			Pay		Receive		Pay			Receive				Contract exchange rate (in won)
Korea Development Bank		2019~2024	W		177,600	USD	150,000		1.24	%		2.50	%	W		1184.00
		2016~2019			105,260	USD	100,000		2.48	%		2.38	%			1052.60
		2015~2025			111,190	USD	100,000		2.62	%		3.25	%			1111.90
		2017~2027			111,610	USD	100,000		2.31	%		3.13	%			1116.10
		2018~2028			108,600	HKD	800,000		2.69	%		3.35	%			135.75
		2018~2023			170,280	USD	150,000		2.15	%		3.75	%			1135.20
		2017~2020			114,580	USD	100,000		1.75	%		2.38	%			1145.80
		2016~2021			121,000	USD	100,000		2.15	%		2.50	%			1210.00
		2019~2022			112,650	USD	100,000		1.80	%		3.38	%			1126.50
		2018~2023			320,880	USD	300,000		2.03	%		3.75	%			1069.60
		2018~2021			212,960	USD	200,000		2.10	%		3.00	%			1064.80
		2017~2022			113,300	USD	100,000		1.94	%		2.63	%			1133.00
		2018~2023			169,335	USD	150,000		2.26	%		3.88	%			1128.90

(ii) Currency forward

In millions of won and thousands of foreign currencies

Counterparty

Contract
date

Maturity
date

Contract amounts

Contract
exchange
rate (in won)

Pay

Receive

Korea Development Bank

2017.12.27

2021.07.12

104,849

USD

100,000

1,048.49

2019.06.27

2019.07.23

6,359

USD

5,500

1,156.20

(10)

Salaries and other compensations to the key members of management of the Group for thesix-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won		June 30, 2019				June 30, 2018
Type		Three-month period ended		Six-month period ended		Three-month period ended		Six-month period ended
Salaries	W		639		855		579		697
Employee benefits			2		4		9		18

	W		641		859		588		715

48.

Non-Cash Transactions

Significantnon-cash investing and financing transactions for the six-month periods ended June 30, 2019 and 2018 are as follows:


In millions of won
Transactions		June 30, 2019		June 30, 2018
Transfer fromconstruction-in-progress to other assets	W		3,903,246		3,476,094
Recognition of asset retirement cost and related provision for decommissioning costs			140,718		180,055
Transfer from provision for disposal of spent nuclear fuel to accrued expenses			151,832		248,811
Recognition of litigation provisions as addition to property, plant and equipment			—		185,530
Transfer ofright-of-use assets due to change in accounting policy			4,633,091		—

133

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

49.

Commitments for Expenditure

(1)

The commitments for acquisition of property, plant and equipment as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won		June 30, 2019				December 31, 2018
Contracts		Amounts		Balance		Amounts		Balance
Purchase of cable (PVC,1C,2000SQ) 153,000M and others(Shin-Bupyung-Youngseo)	W		56,183		31,675		56,183		37,309
Purchase of cable (PVC, 1C, 2500SQ) 103,374M and others(Bukdangjin-Shintangjung)			45,086		32,573		44,315		31,801
Purchase of GIS (362KV 6300A 63KA) 23CB – YoungseoS/S			34,500		34,500		34,500		34,500
Purchase of GIS (362kV,6300A,63kA) 26CB – Hwasung S/S			40,010		22,271		29,143		18,194
Purchase of GIS (362KV 6300A 63KA) 27CB – KwangyangS/S			37,744		10,542		37,694		10,491
Purchase of Concrete Poles (10M, 350KGF) 121,900 and 6 others			—		—		133,387		13,343
Purchase of cable (TRCNCE-W/AL,1C,400SQ) 3,504,000M			66,240		135		66,240		38,998
Purchase of cable (FRCNCO-W,1C,325SQ) 1,400,000			59,716		39,566		57,475		48,598
Purchase of switch (Eco) 9,360 units			40,631		24,031		40,631		34,797
Construction of Shin-Kori units (#3,4)			7,424,996		—		7,363,514		3,211
Construction of Shin-Kori units (#5,6)			8,625,387		5,353,509		8,625,387		5,930,099
Construction of Shin-Hanwool units (#1,2)			7,982,342		136,665		7,982,342		355,704
Other 30 contracts			376,797		229,403		269,681		161,243
Service of designing Seoul Combined units (#1,2)			30,778		5,527		29,996		4,744
Purchase of main machine for construction of Seoul Combined units (#1,2)			365,164		20,097		365,164		51,165
Construction of Seoul Combined units (#1,2)			291,807		3,757		285,890		27,125
Purchase of smoke eliminating machine for construction of Shin-Boryeong units (#1,2)			174,147		6,619		172,609		13,986
Service of designing Shin-Boryeong units (#1,2)			120,668		888		120,199		1,076
Purchase of main machine for construction of Shin-Boryeong units (#1,2)			866,065		4,981		866,065		4,981
Purchase of furnace for construction of Shin-Seocheon thermal power plant			305,209		56,898		305,209		74,631
Purchase of turbine generator for construction of Shin-Seocheon thermal power plant			104,402		25,488		104,402		57,968
Electricity construction of Shin-Seocheon thermal power plant			230,534		132,161		217,848		174,122
Purchase of main machine for Jeju LNG combined			166,287		6,249		166,287		11,272
Purchase of coal handling machine for construction of Taean (#9,10) and IGCC units (conditional contract for installation)			205,764		282		205,764		282
Purchase of furnace for construction of Taean units (#9,10)			556,206		18,040		556,504		18,502
Service of designing Taean units (#9,10)			112,483		13,476		112,344		13,338
Purchase of turbine generator for construction of Taean units (#9,10)			214,208		10,856		214,462		10,422
Purchase of oxygen plant for construction of Taean IGCC units			97,345		1,560		96,068		1,552
Service of designing Taean IGCC plant units			46,001		3,161		46,001		3,161
Purchase of furnace for construction of Samcheok units (#1,2)			1,092,287		11,710		1,092,287		12,215
Purchase of coal handling machine for construction of Samcheok units (#1,2)			311,220		48,611		307,925		48,736
Purchase of turbine main equipment for Samcheok units (#1,2)			212,188		125		212,188		348
Purchase of main equipment for Namjeju			146,594		91,812		146,594		134,949

134

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

49.

Commitments for Expenditure, Continued

(2)

As of June 30, 2019, details of contracts for inventory purchase commitment are as follows:

The Group imports all of its uranium ore concentrates from sources outside Korea (including the United States, United Kingdom, Kazakhstan, France, Russia, South Africa, Canada and Australia) which are paid for with currencies other than Won, primarily in U.S. dollars. In order to ensure stable supply, the Group entered into long-term and medium-term contracts with various suppliers, and supplements such supplies with purchases of fuels on spot markets. The long-term and medium-term contract periods vary among contractors and the stages of fuel manufacturing process. Contract prices for processing of uranium are generally based on market prices. Contract periods for ore concentrates, conversion, enrichment and design and fabrication are as follows:


Type	Periods	Contracted quantity
Concentrate	2019 ~ 2030	40,330 Ton U3O8
Transformed	2019 ~ 2030	19,504 Ton U
Enrichment	2019 ~ 2030	20,733 Ton SWU
Molded (Light)	2019 ~ 2020	756 Ton U
Molded (Medium))	2019 ~ 2020	401 Ton U
Molded (Initial core)	2019 ~ 2022	415 Ton U

135

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

50.

Contingencies and Commitments

(1)

Ongoing litigations and claims related with contingent liabilities and contingent assets as of June 30, 2019 and December 31, 2018 are as follows:


In millions of won	June 30, 2019					December 31, 2018
	Number of cases			Claim amount		Number of cases			Claim amount
As the defendant		598	W		605,683		570	W		673,882
As the plaintiff		206			747,823		174			793,491

As of June 30, 2019, among the litigations mentioned above, there are ongoing litigations of KHNP, a subsidiary of KEPCO, against KEPCO Engineering & Construction Company, Inc., a subsidiary of KEPCO, as aco-defendant (one case amounting toW65,927 million).

A group of plaintiffs (consisting of 2,167 individuals) filed a lawsuit against NSSC regarding NSSC’s approval on May 18, 2015 of extending the operation of Wolsong unit 1 nuclear power plant. The appeal was ongoing as of June 30, 2019. Also, Greenpeace and others filed an administrative litigation against NSSC requesting cancelation of the construction permit of Shin-Kori unit 5 and 6 in September 12, 2016 and lost the lawsuit in Feburary 14, 2019. They appealed the case in March 18, 2019. The Group joined these litigations as a stakeholder with the permission of the Court.

As of June 30, 2019, in connection with Shin-Hanul unit 3 & 4, the Group has received communications from a vendor for costs incurred for the preliminary work of the main equipment and associated compensation due to the discontinuation of the construction. The Group does not believe that it has a present obligation for this vendor, and that it is probable that the Group will prevail if a lawsuit is filed against the Group. In addition, the Group cannot reliably estimate the potential outflow related to the obligation as of June 30, 2019.

The long-term service contract between Gyeonggi Green Energy Co., Ltd. (Gyeonggi Green Energy) and its fuel cell supplier expired during the year ended December 31, 2018. Based on the agreement with the creditors of Gyeonggi Green Energy, as Gyeonggi Green Energy was unable to renew the fuel cell supply contract by December 31, 2018, the creditors have the right to request immediate repayment of the related borrowings from Gyeonggi Green Energy or to take over the all shares held by KHNP. Depending on the result of this negotiation, the schedule of repayment of borrowings of Gyeonggi Green Energy Co., Ltd. may be adjusted accordingly. As of June 30, 2019, Gyeonggi Green Energy Co., Ltd. is in negotiations to renew the contract.

The Group is the defendant against a number of claims. The following are potentially significant ongoing claims pertaining to the Group.

①

In December 2013, the Supreme Court of Korea ruled that regular bonuses also fall under the category of ordinary wages on the condition that those bonuses are paid regularly and uniformly. Also, the Supreme Court ruled that employees are entitled to retroactively demand certain wages based on the new ordinary wages that include regular bonuses as additional wages. However, the request may be limited to the extent of the principle of good faith.

The Group believes that the possibility of economic outflow is probable on the ongoing and the expected lawsuit. For this reason, the Group recognizedW27,151 million of other provision in relation to the lawsuit as of June 30, 2019.

136

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

50.

Contingencies and Commitments, Continued

(1)

Ongoing litigations and claims related with contingent liabilities and contingent assets as of June 30, 2019 and December 31, 2018 are as follows, continued:

Except these significant ongoing claims, there are 13 arbitration cases pertaining to the Group as of June 30, 2019 and the significant arbitration cases for thesix-month period ended June 30, 2019 are as follows:

①

LS Cable & System, a construction company for undersea cable construction, filed an arbitration against the Group regarding disagreements in the test failure handling costs, but the Group has not recognized any provision because the probability of economic benefit outflow is remote and the related amount cannot be reliably estimated.

②

KEPCO and KEPCO KDN Co., Ltd., a subsidiary of KEPCO, have been accused of breach of contract in relation to ERP software, which is provided by SAP Korea Ltd. The litigation was filed in the International Chamber of Commerce International Court of Arbitration but the Group has not recognized any provision because the probability of economic benefit outflow is remote and the related amount cannot be reliably estimated.

③

In 2016, Hyundai E&C, GS Engineering & Construction Corp. and Hansol SeenTec Co., Ltd. filed an arbitration against the Group to the Korea Commercial Arbitration Board in relation to the request for additional construction costs. As described in Note 27.(2), the Group recognized the litigation provisions ofW204,787 million in relation to this arbitration case and made the payment according to the results of this arbitration during the year ended December 31, 2018.

④

In 2016, Halla Corporation filed on arbitration against the Group to the Korea Commercial Arbitration Board in relation to the request for additional construction costs and the Group filed on arbitration against Halla Corporation to the Korea Commercial Arbitration Board in relation to the request for a penalty payment for the delayed construction work. The Group has recognizedW19,754 million of provision for the best estimate of the expenditure required to fulfill its obligations in relation to this arbitration as of June 30, 2019.

⑤

In connection with the electric power IT modernization project in Kerala, India, Enzen, a subcontractor, filed an arbitration against the Group to the Indian Council of Arbitration due to disagreements in the contract, but the Group has not recognized any losses because the amount and timing of economic benefit outflow cannot be reasonably estimated.

(2)

Guarantees of payments and commitments provided to other companies as of June 30, 2019 are as follows:

①

In order to secure its status as a shareholder of Navanakorn Electric Co., Ltd., the Group has signed a fund supplement contract. According to the contract, in case Navanakorn Electric Co., Ltd. does not have sufficient funds for its operation or repayment of borrowings, the Group bears a payment obligation in proportion to its ownership.

②

The Group has outstanding borrowings with a limit of USD 275,600 thousand from its creditors such as International Finance Corporation. Regarding the borrowing contract, the Group has guaranteed capital contribution of USD 69,808 thousand and additional contribution up to USD 19,000 thousand for contingencies, if any. Moreover, for one of the electricity purchasers, Central Power Purchasing Agency Guarantee Ltd., the Group has provided payment guarantee up to USD 2,777 thousand, in case of construction delay or insufficient contract volume after commencement of the construction.

③

The Group has provided PT. Perusahaan Listrik Negara performance guarantee up to USD 2,293 thousand and Mizuho bank and others investment guarantee up to USD 43,500 thousand in proportion to its ownership in the electricity purchase contract with PT. Cirebon Energi Prasarana in relation to the second electric power generation business in Cirebon, Indonesia.

④

The Group has provided MUFG Bank, Ltd. (MUFG) (formerly, the Bank of Tokyo Mitsubishi UFJ. Ltd. (BTMU)) borrowing guarantee up to USD 41,258 thousand proportion to its ownership in the equity bridge loan guarantee with PT. Cirebon Energi Prasarana in relation to the second electric power generation business in Cirebon, Indonesia.

137

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

50.

Contingencies and Commitments, Continued

(2)

Guarantees of payments and commitments provided to other companies as of June 30, 2019 and December 31, 2018 are as follows, continued:

⑤

The Group has provided the Export-Import Bank of Korea, BNP Paribas and ING Bank guarantee of mutual investment of USD 2,192 thousand, which is equivalent to the ownership interest of PT BS Energy and PT Nusantara Hydro Alam, in order to guarantee the expenses related to hydroelectric power business of Tanggamus, Indonesia.

⑥

The Group has provided the Export-Import Bank of Korea and SMBC guarantee of mutual investment of USD 401 thousand, which is equivalent to the ownership interest of PT Mega Power Mandiri, in order to guarantee the expenses related to hydroelectric power business of PT Wampu Electric Power, an associate of the Group.

⑦

The Group is obligated to complete the responsibility as a construction company for the construction of the waste oil refining for power generation business of Next energy Co.,Ltd (contract amount :W14,700 million). Also, the Group has made performance guarantee agreement with Next energy Co.,Ltd for 20 years after the completion of the construction, which obliges the Group to provide supplemental funding if the amount of power generated or the operation time of the power plant does not reach the agreed level.

(3)

Credit lines provided by financial institutions as of June 30, 2019 are as follows:


In millions of won and thousands of foreign currencies

Commitments	Financial institutions	Currency	Limited amount
Commitments on bank-overdraft	Nonghyup Bank and others	KRW		1,825,000
Commitments on bank-daylight overdraft	Nonghyup Bank	KRW		280,000
Limit amount available for CP	KEB Hana Bank and others	KRW		1,050,000
Limit amount available for card	KEB Hana Bank and others	KRW		55,154
	Banco de Oro	PHP		5,000
Loan limit	Kookmin Bank and others	KRW		1,153,900
Loan limit	DBS Bank and others	USD		1,922,700
Certification of payment on payables from foreign country	Nonghyup Bank	USD		4,680
Certification of payment on L/C	Shinhan Bank	USD		7,749
	Shinhan Bank and others			880,163
Certification of performance guarantee on contract	KEB Hana Bank and others	EUR		5,558
	KEB Hana Bank and others	INR		268,353
	Korea Development Bank and others	JPY		637,322
	Seoul Guarantee Insurance and others	KRW		208,466
	First Abu Dhabi Bank and others	USD		840,086
	KEB Hana Bank	SAR		6,508
	Bank of Kathmandu and others	NPR		36,304
	KEB Hana Bank	CAD		464
Certification of bidding	KEB Hana Bank and others	USD		110,000
	Shinhan Bank	ZAR		55,730
Advance payment bond, Warranty bond, Retention bond and others	Export-Import Bank of Korea and others	USD		4,306,464
Others	Shinhan Bank	JPY		381,210
	Nonghyup Bank and others	KRW		317,836
	Export-Import Bank of Korea and others	USD		1,190,844
Inclusive credit	Shinhan Bank	INR		70,028
	KEB Hana Bank	KRW		258,000
	KEB Hana Bank and others	USD		31,183
Trade finance	BNP Paribas and others	USD		800,000

138

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

50.

Contingencies and Commitments, Continued

(4)

As of June 30, 2019, blank check and assets provided as collaterals or pledges to financial institutions by the Group are follows:


In millions of won and thousands of foreign currencies

Guarantor	Guarantee	Type of guarantee	Currency	Amount	Description
Mira Power Limited	International Finance Corporation and others	Property, plant and equipment and others	USD	275,600	Collateral for borrowings (*1)
Tamra Offshore Wind Power Co., Ltd	Nonghyup Life Insurance Co., Ltd. and others	Property, plant and equipment and others	KRW	132,000	Collateral for borrowings (*1)
Gyeonggi Green Energy Co., Ltd.	Korea Development Bank and others	Cash and cash equivalents	KRW	327,080	Collateral for borrowings (*2)
Commerce and Industry Energy Co., Ltd.	IBK and others	Land, buildings, structures and machinery and others	KRW	110,500	Collateral for borrowings (*2)
KOSPO Youngnam Power Co., Ltd.	Shinhan Bank and others	Cash and cash equivalents	KRW	396,120	Collateral for borrowings (*2)
Gyeongju Wind Power Co., Ltd.	Samsung Fire & Marine Insurance Co., Ltd. and Others	Property, plant and equipment and others	KRW	110,240	Collateral for borrowings (*2)
Korea Offshore Wind Power Co., Ltd	Woori Bank and Others	Utility plant and others	KRW	293,400	Collateral for borrowings
Qatrana Electric Power Company	The Islamic Development Bank and others	Finance lease receivable and property, plant and equipment and others	JOD	236,570	Collateral for borrowings (*1)
KST Electric Power Company	The Export – Import Bank of Korea and others	Finance lease receivable and property, plant and equipment and others	USD	337,000	Collateral for borrowings (*1)

(*1)	This is based on the amount of loan commitment limit.

(*2)	As of June 30, 2019, the Group has established guarantees for pledge for transfer of rights of long-term borrowings, pledge for insurance claims, pledge for shares, etc.

The Group hasW1,197 million of project loans from Korea Energy Agency as of June 30, 2019. The Group has provided a blank check as repayment guarantee.

(5)

The Group temporarily suspended operations of the Gangneung hydroelectric generating plant, with a carrying amount ofW78,762 million as of June 30, 2019, to improve the quality of water used in generating electricity. The expenses related to the suspension of operations ofW18 million and depreciation on the utility plant ofW3,272 million are recorded in other expenses for thesix-month period ended June 30, 2019. Regarding the improvement of water quality, the results of damages compensation for the local residents cannot be reasonably estimated, and the Group is in negotiations with Gangneung City and related stakeholders to restart the Gangneung hydroelectric generating plant as of June 30, 2019.

139

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

50.

Contingencies and Commitments, Continued

(6)

Due to the Korean government’s announcement of suspension of operation in the Gaeseong Industrial District, it is uncertain if the Group can exercise the property rights for the Group’s facility in the Gaeseong Industrial District as of June 30, 2019. The book value of facility isW17,228 million and the amount of trade receivables related to the companies residing in Gaeseong industrial complex isW2,911 million. The ultimate outcome of this event cannot be reasonably estimated.

(7)

In connection with the electric power IT modernization project in Kerala, India, negotiations are underway due to disagreements in the contract regarding the existence and the scope of a warranty obligation. However, the Group has not recognized any losses because the amount and timing of economic benefit outflow cannot be reasonably estimated.

51.

Subsequent Events

(1)

Decision of project-promoting fund contribution

On August 8, 2019, board of directors of the Company decided to contributeW60,000 million in funds for the establishment and initial operation, including promotion of the project and campus design, of KEPCO Tech University (tentative name).

(2)

Issue of corporate bonds

Subsequent to June 30, 2019, Korea Hydro & Nuclear Power Co., Ltd., Korea Western Power Co., Ltd. and Korea Southern Power Co., Ltd. issued foreign bond, corporate bonds andnon-guaranteed corporate bonds for funding debt repayment, operations, and foreign purchases as follows:


In millions of won and thousands of foreign currencies

Company	Type	Issue date	Maturity	Interest rate	Amount
Korea Hydro & Nuclear Power Co., Ltd.	Foreign bond	2019.07.19	2024.07.19	0.00%		CHF 200,000
	Foreign bond	2019.07.19	2027.07.19	0.05%		CHF 100,000
Korea Western Power Co., Ltd.	Corporate bond	2019.07.22	2022.07.22	2.37%		USD 300,000
Korea Southern Power Co., Ltd.	#47 non-guaranteed corporate bond	2019.07.09	2020.07.09	1.51%		KRW 100,000
	#48non-guaranteed corporate bond	2019.07.24	2022.07.24	6.00%		KRW 350
	#49-1 non-guaranteed corporate bond	2019.08.13	2039.08.13	1.33%		KRW 150,000
	#49-2non-guaranteed corporate bond	2019.08.13	2049.08.13	1.29%		KRW 50,000

140

KOREA ELECTRIC POWER CORPORATION AND ITS SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

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

(Unaudited)

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 thesix-month periods ended June 30, 2019 and 2018 to the operating profit or loss as presented in the Group’s consolidated statements of comprehensive income (loss) prepared in accordance with IFRS as issued by IASB for each of the corresponding years.


In millions of won		June 30, 2019						June 30, 2018
		Three-month period ended			Six-month period ended			Three-month period ended			Six-month period ended
Operating profit (loss) on the consolidated interim statements of comprehensive income (loss)	W		(298,659	)		(928,539	)		(687,118	)		(814,731	)
Add
Other income
Reversal of other provisions			—			2,186			895			1,477
Reversal of other allowance for bad debt			960			960			—			—
Gains on government grants			67			139			67			145
Gains on assets contributed			2,707			2,771			394			418
Gains on liabilities exempted			616			719			97			7,021
Compensation and reparations revenue			19,822			38,664			22,945			42,755
Revenue from research contracts			1,427			2,577			1,750			2,844
Rental income			47,069			94,051			49,675			93,339
Others			22,786			29,090			18,003			30,653
Other gains
Gains on disposal of property, plant and equipment			20,353			29,187			11,997			26,363
Gains on disposal of intangible assets			—			97			3			3
Gains on foreign currency translation			13,907			10,955			4,060			8,161
Gains on foreign currency transaction			10,866			17,166			9,701			23,206
Gains on insurance proceeds			—			13			—			—
Others			43,890			110,235			44,031			106,818
Deduct
Other expenses
Compensation and reparations expense			(77	)		(77	)		(19,258	)		(19,288	)
Accretion expenses of other provisions			(5,225	)		(383	)		(61	)		(190	)
Depreciation expenses on investment properties			(4,047	)		(4,291	)		(218	)		(508	)
Depreciation expenses on idle assets			(1,636	)		(3,272	)		(1,637	)		(3,274	)
Other bad debt expense			(4,849	)		(5,696	)		(8,957	)		(11,453	)
Donations			(15,578	)		(27,563	)		(13,671	)		(18,958	)
Others			(4,383	)		(9,856	)		(36,817	)		(43,850	)
Other losses
Losses on disposal of property, plant and equipment			(12,755	)		(26,747	)		(9,971	)		(13,400	)
Losses on disposal of intangible assets			—			—			(2	)		(6	)
Losses on impairment of property, plant and equipment			(27,406	)		(29,685	)		(701,317	)		(701,317	)
Losses on impairment of intangible assets			(61,696	)		(61,696	)		—			—
Losses on foreign currency translation			—			(51,468	)		(12,005	)		(15,353	)
Losses on foreign currency transaction			(19,055	)		(28,915	)		(18,666	)		(33,373	)
Others			(26,496	)		(37,818	)		(13,159	)		(32,375	)

Adjusted operating profit (loss)	W		(297,392	)		(877,196	)		(1,359,239	)		(1,364,873	)

141

Number of meetings

Number of agendas

Classification

Number of meetings

Number of agendas

Resolutions

Reports