Edgar Filing: KOREA ELECTRIC POWER CORP

Form 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

Pursuant to Rule 13a-16 or 15d-16 of

the Securities Exchange Act of 1934

For the Month of June 2014

Commission File Number: 001-13372

KOREA ELECTRIC POWER CORPORATION

(Translation of registrant’s name into English)

512 Yeongdongdaero, Gangnam-gu, Seoul 135-791, Korea

(Address of principal executive offices)

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

Form 20-F x Form 40-F ¨

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

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

Indicate by check mark whether the registrant by furnishing the

information contained in this form is also thereby furnishing the

information to the Commission pursuant to Rule 12g3-2(b) under the

Securities Exchange Act of 1934.

Yes ¨ No x

If “Yes” is marked, indicate below the file number assigned to the

registrant in connection with Rule 12g3-2(b): 82- .

This Report of Foreign Private Issuer on Form 6-K is deemed filed for all purposes under the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.

QUARTERLY BUSINESS REPORT

(For the period from January 1, 2014 to March 31, 2014)

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

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

UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON A CONSOLIDATED BASIS IN ACCORDANCE WITH INTERNATIONAL FINANCIAL REPORTING STANDARDS ADOPTED FOR USE IN KOREA, OR K-IFRS, WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. WE HAVE MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES.

I. Company Overview

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

2. Information of the company

(Address) 512 Yeongdongdaero, Gangnam-Gu, Seoul 135-791, Korea

(Phone number) 82-2-3456-4217

(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. Subsidiaries and affiliates of KEPCO

(As of March 31, 2014)



Classification	Subsidiaries		Associates and joint ventures		Total
Domestic		17		56		73
Overseas		62		38		100
Total		79		94		173

5. Major changes in management

At the extraordinary general meeting of shareholders held on March 14, 2014, Mr. Koo, Bon-Woo was re-elected as a standing director of KEPCO, and Mr. Cho, Jeon-Hyeok and Mr. Choi, Gyo-Il, non-standing directors of KEPCO, were elected as members of the Audit Committee of KEPCO.

6. Changes in major shareholders

No changes in major shareholders for the past three years.

7. Information regarding KEPCO shares

A. Issued share capital: Won 3.2 trillion (Authorized capital: Won 6 trillion)

B. Total number of issued shares: 641,964,077

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

C. Dividends: Dividend payment of Won 90 per share for fiscal year 2013 (Won 56 billion in aggregate). No dividend payments for fiscal years 2012 and 2011.

II. Business Overview

1. Segment results

(In billions of Won)


	Jan. - Mar. 2014				Jan. - Mar. 2013
	Sales		Operating income(loss)		Sales		Operating income(loss)
Electricity sales		14,681		-267		13,633		-479
Nuclear generation		2,448		949		2,012		554
Thermal generation		7,429		514		7,630		593
Others*		677		89		583		67
Subtotal		25,235		1,285		23,858		735
Adjustment of related-party transactions		-10,462		-58		-10,059		-77
Total		14,773		1,227		13,799		658

*	Others relate to 75 subsidiaries including KEPCO E&C, KEPCO KPS, KEPCO NF and KEPCO KDN.

•

Sales and operating income (loss) reflects amendments to Korean IFRS 1001 “Presentation of Financial Statements.”

2. Changes in unit prices of major products

(In Won per kWh)


Business sector		Company	2014 Jan. - Mar.	2013 Jan. - Dec.
Electricity sold	Residential	KEPCO	130.20	127.02
	Commercial		129.34	121.98
	Educational		110.52	115.99
	Industrial		108.36	100.70
	Agricultural		47.17	45.51
	Street lighting		109.11	107.33
	Overnight usage		72.96	63.52
Electricity from nuclear generation	Nuclear generation	KHNP	64.03	45.32
Electricity from thermal generation	Thermal generation	KOSEP	75.66	67.50
		KOMIPO	108.83	101.40
		KOWEPO	108.40	103.06
		KOSPO	114.40	107.97
		EWP	98.11	97.39

3. Major contracts in 2014

(In billions of Won)


Party	Date of contract	Nature of contract	Contract amount		Counterparty
KEPCO	2014.02.21	Inspection of transmission lines in 2014		62	KEPCO KPS Co., Ltd.
KHNP	2014.03.27	Re-wiring of the main generators for Hanbit units 3, 4		24	Doosan Heavy Industries & Construction Co., Ltd.
KOMIPO	2014.02.06	Procurement of water treatment facilities for Shin-Boryeong units 1, 2		25	POSCO Engineering Co., Ltd.
KOWEP	2014.01.31	Procurement of desulfurization facilities for Taean units 9, 10		90	STX Heavy Industries Co., Ltd.

4. Intellectual property as of March 31, 2014

Patents

Utility
models

Designs

Trademarks

Domestic

Overseas

Domestic

Overseas

Number of registrations

4,627

507

799

146

367

III. Financial Information

1. Condensed consolidated financial results for the first three months ended March 31, 2014


								(In billions of Won)

Consolidated statements of comprehensive income							Consolidated statements of financial position
	Jan.-Mar. 2013		Jan.-Mar. 2014		Change (%)			As of Dec. 31, 2013		As of Mar. 31, 2014		Change (%)
Sales		13,799		14,773		7.1	Total assets		155,527		157,040		1.0
Operating income		658		1,227		86.5	Total liabilities		104,076		105,146		1.0
Net income		160		561		249.9	Total equity		51,451		51,894		0.9

2. Condensed separate financial results for the first three months ended March 31, 2014


								(In billions of Won)

Separate statements of comprehensive income							Separate statements of financial position
	Jan.-Mar. 2013		Jan.-Mar. 2014		Change (%)			As of Dec. 31, 2013		As of Mar. 31, 2014		Change (%)
Sales		13,633		14,681		7.7	Assets		98,250		98,081		-0.2
Operating income		-479		-267		44.2	Liabilities		56,590		56,726		0.2
Net income		-17		-204		-1,102.4	Equity		41,660		41,355		-0.7

IV. Independent Auditor’s Opinion

1. Independent auditor’s opinion on consolidated financial statements for the first three months ended March 31, 2014: Unqualified

•

KPMG Samjong Accounting Corp. has been engaged as KEPCO’s independent auditor from 2013 for a term of three years until 2015.


Jan. 1, 2014 – Mar. 31, 2014	Jan. 1, 2013 – Dec. 31, 2013	Jan. 1, 2012 – Dec. 31, 2012
KPMG Samjong Accounting Corp.	KPMG Samjong Accounting Corp.	Deloitte Anjin LLC

V. Board of Directors

1. Composition of the Board of Directors: not more than 15 directors (with standing directors comprising less than the majority of the directors)

•

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

2. Board meetings and agendas


Number of meetings	Number of agendas	Classification
Number of meetings	Number of agendas	Resolutions	Status	Reports	Status
3	12	8	Approved as proposed	4	Accepted as reported

•

Audit Committee: 2 meetings held where 12 agendas were discussed (of which, 6 were resolved as proposed and 6 were approved as reported).

3. Major activities of the Board of Directors


Date	Agenda	Status	Type
2014. 1. 14	Approval to close the shareholders’ registry	Approved as proposed	Resolution
2014. 1. 14	Research and development plans for 2014	Accepted as reported	Report
2014. 2. 20	Recommendation of candidates to become new members of the Audit Committee	Approved as proposed	Resolution
	Approval to call for the 54th extraordinary general meeting of shareholders	Approved as proposed	Resolution
	Approval of consolidated and separate financial statements for fiscal year 2013	Approved as proposed	Resolution
	Approval of aggregate ceiling on remuneration for directors in 2014	Approved as proposed	Resolution
	Approval to call for the 53rd annual general meeting of shareholders	Approved as proposed	Resolution
	Development plans for the next-generation Electricity Sales Information System	Approved as proposed	Resolution
	Auditor’s report to the Board of Directors for fiscal year 2013	Accepted as reported	Report
2014. 3. 20	Approval of ceilings on the issue amounts of commercial papers and electronic short-term bonds in 2014	Approved as proposed	Resolution
	Annual report on internal control over financial reporting for fiscal year 2013	Accepted as reported	Report
	Annual evaluation report on internal control over financial reporting for fiscal year 2013	Accepted as reported	Report

4. Major activities of the Audit Committee


Date	Agenda	Status	Type
2014. 1. 29	Auditor’s report on the agendas for the extraordinary meeting of shareholders	Approved as proposed	Resolution
	Audit plans for fiscal year 2014	Approved as proposed	Resolution
	Approval of selection of independent auditors of subsidiaries (KOSEP Material Co., Ltd. and KEPCO KPS Philippines Corp.)	Approved as proposed	Resolution
	Independent auditor’s report on audit plans for fiscal year 2013	Accepted as reported	Report
	Education plans for auditors for 2014	Accepted as reported	Report
	Auditor’s report for fiscal year 2013	Accepted as reported	Report
2014. 3. 20	Election of the chairman of the Audit Committee	Approved as proposed	Resolution
	Auditor’s report on the agendas for the annual general meeting of shareholders	Approved as proposed	Resolution
	Approval of selection of independent auditors of subsidiaries	Approved as proposed	Resolution
	Independent auditor’s report on the auditing results for the consolidated and separate financial statements for fiscal year 2013	Accepted as reported	Report
	Annual report on internal control over financial reporting for fiscal year 2013	Accepted as reported	Report
	Annual evaluation report on internal control over financial reporting for fiscal year 2013	Accepted as reported	Report

•

An audit team, organized under the supervision of the Audit Committee, conducts internal audit with respect to 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 inspection with respect to the relevant division or office.

VI. Shareholders

1. List of shareholders as of March 31, 2014


		Number of shareholders		Shares owned		Percentage (%)
Korean Government			1		135,917,118		21.17
Korea Finance Corporation			1		192,159,940		29.94
National Pension Service			1		41,775,649		6.51
KEPCO (held in the form of treasury stock)*			1		18,929,995		2.95
Public (non-Koreans)	Common shares		1,086		118,634,815		18.48
Public (non-Koreans)	American depositary shares		1		31,977,417		4.98
Public (Koreans)	Corporate		1,552		68,468,358		10.66
Public (Koreans)	Individual		383,104		34,100,785		5.31
Total			385,747		641,964,077		100.0

*	Treasury stocks do not have voting rights. Number of shares with voting rights: 623,034,082

VII. Directors and Employees

1. Remuneration for directors

A.	Aggregate ceiling on remuneration for directors approved by shareholders:

Won 1.9 billion

B.	Actual amount paid to directors

Type

Number of directors

Total remuneration

(Jan. 1, 2014 – Mar. 31, 2014)

Total

Won 250 million

C.	Stock option: None

2. Employees as of March 31, 2014


Employees			Average years of employment	Total remuneration (Jan. 1, 2014 – Mar. 31, 2014)
Regular	Contract	Total	Average years of employment	Total remuneration (Jan. 1, 2014 – Mar. 31, 2014)
19,499	369	19,868	18.5	Won 364 billion

VIII. Other Information Relating to the Protection of Investors

1. Number of shareholders’ meetings held in 2014: twice

(One annual general meeting of shareholders held on March 28, 2014 / one extraordinary general meeting of shareholders held on March 14, 2014)

2. Pending legal proceedings


Type	Number of lawsuits	Litigation value
Lawsuits where KEPCO and its subsidiaries and affiliates are engaged as the defendant	642	Won 464 billion
Lawsuits where KEPCO and its subsidiaries and affiliates are engaged as the plaintiff	137	Won 270 billion

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/ Ko, Weon-Gun
Name:		Ko, Weon-Gun
Title:		Vice President

Date: June 03, 2014

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Financial Statements

March 31, 2014

(Unaudited)

(With Independent Auditors’ Review Report Thereon)

INDEX TO FINANCIAL STATEMENTS


	Page

Independent Auditors’ Review Report		1

Consolidated Interim Statements of Financial Position		3

Consolidated Interim Statements of Comprehensive Income		5

Consolidated Interim Statements of Changes in Equity		7

Consolidated Interim Statements of Cash Flows		9

Notes to the Consolidated Interim Financial Statements		11

Independent Auditors’ Review Report

Based on a report originally issued in Korean

The Board of Directors and Shareholders

Korea Electric Power Corporation

Reviewed financial statements

We have reviewed the accompanying consolidated interim financial statements of Korea Electric Power Corporation and its subsidiaries (the “Company”), which comprise the consolidated interim statement of financial position as of March 31, 2014, the consolidated interim statements of comprehensive income, changes in equity and cash flows for the three-month periods ended March 31, 2014 and 2013 and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s responsibility

Management is responsible for the preparation and fair presentation of these consolidated interim financial statements in accordance with Korean International Financial Reporting Standards (“K-IFRS”) No. 1034 ‘Interim Financial Reporting’, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ review responsibility

Our responsibility is to issue a report on these consolidated interim financial statements based on our reviews.

We conducted our reviews 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 information 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 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 referred to above are not prepared, in all material respects, in accordance with K-IFRS 1034, ‘Interim Financial Reporting’.

Other matters

The procedures and practices utilized in the Republic of Korea to review such consolidated interim financial statements may differ from those generally accepted and applied in other countries. Accordingly, this report and the accompanying consolidated interim financial statements are for use by those knowledgeable about Korean review standards and their application in practice.

The consolidated statement of financial position of the Company as of December 31, 2013, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this report, were audited by us and our report thereon, dated March 20, 2014, expressed an unqualified opinion. The accompanying consolidated statement of financial position of the Company as of December 31, 2013, presented for comparative purposes, is not different from that audited by us in all material respects.

LOGO

KPMG Samjong Accounting Corp.

Seoul, Korea

May 14, 2014

This report is effective as of May 14, 2014, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying consolidated interim financial statements and notes thereto. Accordingly, the readers of the review report should understand that the above review report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Financial Position

As of March 31, 2014 and December 31, 2013

(Unaudited)


In millions of won	*Note*		March 31, 2014		December 31, 2013
Assets

Current assets
Cash and cash equivalents		5,6,7,43	￦	2,728,775		2,232,313
Current financial assets, net		5,10,11,12,43		316,390		436,213
Trade and other receivables, net		5,8,14,20,43,45		6,759,519		7,526,311
Inventories, net		13		4,359,764		4,279,593
Income tax receivables		40		81,970		223,803
Current non-financial assets		15		627,834		570,845

Total current assets				14,874,252		15,269,078

Non-current assets
Non-current financial assets, net		5,6,9,10,11,12,43		1,917,721		1,902,953
Non-current trade and other receivables, net		5,8,14,43,45		1,665,489		1,644,333
Property, plant and equipment, net		18,27,47		131,411,165		129,637,596
Investment properties, net		19,27		549,414		538,327
Goodwill		16		2,582		2,582
Intangible assets other than goodwill, net		21,27		836,539		810,664
Investments in associates		4,17		4,206,836		4,124,574
Investments in joint ventures		4,17		1,192,064		1,106,181
Deferred tax assets		40		255,724		359,535
Non-current non-financial assets		15		128,547		131,511

Total non-current assets				142,166,081		140,258,256


Total Assets		4	￦	157,040,333		155,527,334


Liabilities

Current liabilities
Trade and other payables, net		5,22,24,43,45	￦	5,502,731		5,892,763
Current financial liabilities, net		5,11,23,43,45		8,446,504		8,425,231
Income tax payables		40		117,784		51,407
Current non-financial liabilities		20,28,29		5,270,714		4,730,631
Current provisions		26,43		1,233,152		1,113,817

Total current liabilities				20,570,885		20,213,849


Non-current liabilities
Non-current trade and other payables, net		5,22,24,43,45		3,977,897		3,971,519
Non-current financial liabilities, net		5,11,23,43,45		53,652,247		53,163,394
Non-current non-financial liabilities		28,29		7,004,728		6,985,641
Employee benefits obligations, net		25,43		2,194,527		2,137,296
Deferred tax liabilities		40		5,019,215		5,002,585
Non-current provisions		26,43		12,726,934		12,602,314

Total non-current liabilities				84,575,548		83,862,749


Total Liabilities		4	￦	105,146,433		104,076,598

(Continued)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Position, Continued

As of March 31, 2014 and December 31, 2013

(Unaudited)


In millions of won	*Note*		March 31, 2014			December 31, 2013
Equity

Contributed capital		1,30,43
Share capital			￦	3,209,820			3,209,820
Share premium				843,758			843,758

				4,053,578			4,053,578
Retained earnings		31
Legal reserves				1,604,910			1,603,919
Voluntary reserves				22,999,359			22,753,160
Retained earnings before appropriations				8,623,100			8,409,007

				33,227,369			32,766,086


Other components of equity		33
Other capital surpluses				828,121			830,982
Accumulated other comprehensive income				34,185			55,538
Treasury stock				(741,489	)		(741,489	)
Other equity				13,294,973			13,294,973

				13,415,790			13,440,004


Equity attributable to owners of the Company				50,696,737			50,259,668


Non-controlling interests		16		1,197,163			1,191,068


Total Equity			￦	51,893,900			51,450,736


Total Liabilities and Equity			￦	157,040,333			155,527,334

See accompanying notes to the consolidated financial statements.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the three-month periods ended March 31, 2014 and 2013

(Unaudited)


In millions of won, except per share information	*Note*		March 31, 2014			March 31, 2013
Sales		4,34,43,45
Sales of goods			￦	14,073,576			13,234,359
Sales of services				64,578			80,372
Sales of construction services		20		548,748			405,780
Revenue related to transfer of assets from customers				85,745			78,587

				14,772,647			13,799,098

Cost of sales		13,25,41,45
Cost of sales of goods				(12,518,259	)		(12,264,769	)
Cost of sales of services				(88,080	)		(71,302	)
Cost of sales of construction services				(503,382	)		(363,614	)

				(13,109,721	)		(12,699,685	)


Gross profit				1,662,926			1,099,413


Selling and administrative expenses		25,35,41,45		(435,849	)		(441,644	)


Operating income		4,50		1,227,077			657,769

Other non-operating income		36		70,723			88,059

Other non-operating expenses		36		(23,059	)		(17,213	)

Other gains, net		37		41,082			31,004

Finance income		5,11,38		278,058			436,728

Finance expenses		5,11,39		(802,121	)		(1,059,543	)

Equity method income (loss) of associates and joint ventures		4,17
Share in income of associates and joint ventures				134,983			99,760
Share in loss of associates and joint ventures				(23,258	)		(28,519	)
Impairment losses on investments in associates and joint ventures				(1,558	)		—

				110,167			71,241


Profit before income taxes				901,927			208,045


Income tax expense		40		(340,656	)		(47,620	)


Profit for the period			￦	561,271			160,425

(Continued)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income, Continued

For the three-month periods ended March 31, 2014 and 2013

(Unaudited)


In millions of won, except per share information	*Note*		March 31, 2014			March 31, 2013
Other comprehensive income		5,11,25,31,33
Items that will not be reclassified subsequently to profit or loss:
Defined benefit plan actuarial losses, net of tax		25,31	￦	(15,345	)		(98,217	)
Share in other comprehensive income (loss) of associates and joint ventures, net of tax		31		(206	)		585
Items that may be reclassified subsequently to profit or loss:
Net change in the unrealized fair value of available-for-sale financial assets, net of tax		33		(16,547	)		28,620
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		5,11,33		3,325			(1,369	)
Foreign currency translation of foreign operations, net of tax		33		58,805			59,673
Share in other comprehensive income (loss) of associates and joint ventures, net of tax		33		(53,794	)		57,203


Other comprehensive income (loss), net of tax				(23,762	)		46,495

Total comprehensive income for the period			￦	537,509			206,920


Profit attributable to:
Owners of the Company		42	￦	532,262			133,300
Non-controlling interests				29,009			27,125

			￦	561,271			160,425


Total comprehensive income attributable to:
Owners of the Company			￦	496,003			167,998
Non-controlling interests				41,506			38,922

			￦	537,509			206,920


Earnings per share		42
Basic and diluted earnings per share			￦	854			214

See accompanying notes to the consolidated financial statements.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity

For the three-month periods ended March 31, 2014 and 2013

(Unaudited)


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

Balance at January 1, 2013	￦	4,053,578		32,564,283			13,270,906			49,888,767			1,175,435			51,064,202

Total comprehensive income for the period
Profit for the period		—		133,300			—			133,300			27,125			160,425
Items that will not be reclassified subsequently to profit or loss:
Defined benefit plan actuarial losses, net of tax		—		(95,415	)		—			(95,415	)		(2,802	)		(98,217	)
Share in other comprehensive income of associates and joint ventures, net of tax		—		585			—			585			—			585
Items that may be reclassified subsequently to profit or loss:
Net changes in the unrealized fair value of available-for-sale financial assets, net of tax		—		—			28,694			28,694			(74	)		28,620
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		—		—			(1,467	)		(1,467	)		98			(1,369	)
Foreign currency translation of foreign operations, net of tax		—		—			45,236			45,236			14,437			59,673
Share in other comprehensive income of associates and joint ventures, net of tax		—		—			57,065			57,065			138			57,203
Transactions with owners of the Company, recognized directly in equity
Dividends paid		—		—			—			—			(39,936	)		(39,936	)
Issuance of share capital		—		—			—			—			7,920			7,920
Changes in consolidation scope		—		—			—			—			(4,558	)		(4,558	)


Balance at March 31, 2013	￦	4,053,578		32,602,753			13,400,434			50,056,765			1,177,783			51,234,548

(Continued)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Changes in Equity, Continued

For the three-month periods ended March 31, 2014 and 2013

(Unaudited)


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

Balance at January 1, 2014	￦	4,053,578		32,766,086			13,440,004			50,259,668			1,191,068			51,450,736

Total comprehensive income for the period
Profit for the period		—		532,262			—			532,262			29,009			561,271
Items that will not be reclassified subsequently to profit or loss:
Defined benefit plan actuarial losses, net of tax		—		(14,700	)		—			(14,700	)		(645	)		(15,345	)
Share in other comprehensive loss of associates and joint ventures, net of tax		—		(206	)		—			(206	)		—			(206	)
Items that may be reclassified subsequently to profit or loss:
Net changes in the unrealized fair value of available-for-sale financial assets, net of tax		—		—			(16,545	)		(16,545	)		(2	)		(16,547	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		—		—			456			456			2,869			3,325
Foreign currency translation of foreign operations, net of tax		—		—			48,417			48,417			10,388			58,805
Share in other comprehensive loss of associates and joint ventures, net of tax		—		—			(53,681	)		(53,681	)		(113	)		(53,794	)
Transactions with owners of the Company, recognized directly in equity
Dividends paid		—		(56,073	)		—			(56,073	)		(37,753	)		(93,826	)
Issuance of share capital		—		—			(155	)		(155	)		3,440			3,285
Changes in consolidation scope		—		—			(2,706	)		(2,706	)		(1,088	)		(3,794	)
Others		—		—			—			—			(10	)		(10	)


Balance at March 31, 2014	￦	4,053,578		33,227,369			13,415,790			50,696,737			1,197,163			51,893,900

See accompanying notes to the consolidated financial statements.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Cash Flows

For the three-month periods ended March 31, 2014 and 2013

(Unaudited)


In millions of won	March 31, 2014			March 31, 2013

Cash flows from operating activities
Profit for the period	￦	561,271			160,425


Adjustments for:
Income tax expense		340,656			47,620
Depreciation		1,888,262			1,812,745
Amortization		19,862			22,082
Employee benefit expense		87,045			93,484
Bad debt expense		12,371			3,492
Interest expense		597,046			595,282
Loss on sale of financial assets		2			—
Loss on disposal of property, plant and equipment		2,944			11,222
Loss on abandonment of property, plant, and equipment		74,729			66,300
Impairment loss on property, plant and equipment		—			1,161
Impairment loss on intangible assets		—			2
Accretion expense to provisions, net		289,543			119,879
Loss on foreign currency translation, net		144,676			386,022
Valuation and transaction gain on derivative instruments, net		(155,782	)		(303,796	)
Share in income of associates and joint ventures, net		(111,724	)		(71,241	)
Impairment loss on investments in associates and joint ventures		1,558			—
Gain on sale of property, plant and equipment		(1,619	)		(12,746	)
Interest income		(48,195	)		(50,662	)
Dividends income		(12,525	)		(11,239	)
Others, net		(665	)		19,822

		3,128,184			2,729,429

Changes in:
Decrease in trade receivables		839,907			862,995
Decrease in non-trade receivables		220,792			229,816
Decrease (increase) in accrued income		(63,485	)		64,196
Decrease in other receivables		1,411			1,091
Decrease (increase) in other current assets		(103,743	)		61,363
Increase in inventories		(284,922	)		(341,324	)
Decrease (increase) in other non-current assets		(2,284	)		15,266
Decrease in trade payables		(202,389	)		(236,141	)
Increase (decrease) in non-trade payables		20,006			(98,465	)
Decrease in accrued expenses		(97,095	)		(77,971	)
Decrease in other payables		(171,938	)		—
Increase in other current liabilities		327,098			6,714
Increase in other non-current liabilities		241,112			264,591
Decrease in investments in associates and joint ventures		14,201			—
Decrease in provisions		(113,316	)		(21,841	)
Payments of employee benefit obligations		(64,805	)		(8,052	)
Increase in plan assets		(112	)		(105	)

		560,438			722,133

(Continued)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Cash Flows

For the three-month periods ended March 31, 2014 and 2013

(Unaudited)


In millions of won	March 31, 2014			March 31, 2013

Cash generated from operating activities
Dividends received	￦	644			6,651
Interest paid		(615,071	)		(610,364	)
Interest received		41,016			35,046
Income taxes paid		(19,353	)		(35,654	)

Net cash from operating activities		3,657,129			3,007,666


Cash flows investing activities
Proceeds from disposals of subsidiaries, associates and joint ventures		491			—
Acquisition of subsidiaries, associates and joint ventures		(108,576	)		(59,994	)
Proceeds from disposals of property, plant and equipment		7,169			28,088
Acquisition of property, plant and equipment		(3,580,706	)		(3,280,447	)
Acquisition of intangible assets		(12,028	)		(19,410	)
Proceeds from disposals of financial assets		242,764			79,592
Acquisition of financial assets		(120,351	)		(137,781	)
Increase in loans		(36,622	)		(130,050	)
Decrease in loans		23,578			17,765
Increase in deposits		(107,938	)		(8,473	)
Decrease in deposits		97,689			2,658
Receipt of government grants		23,852			5,454
Usage of government grants		(1,597	)		(61	)
Other cash outflow from investing activities, net		(4,317	)		(3,424	)

Net cash used in investing activities		(3,576,592	)		(3,506,083	)


Cash flows from financing activities
Increase (decrease) in short-term borrowings, net		346,444			420,504
Proceeds from long-term borrowings and debt securities		1,952,121			3,303,949
Repayment of long-term borrowings and debt securities		(1,804,376	)		(1,538,034	)
Payment of finance lease liabilities		(30,128	)		(30,244	)
Settlement of derivative instruments, net		(48,360	)		24,808
Change in non-controlling interest		(367	)		7,854
Dividends paid (hybrid bond)		(5,405	)		(5,427	)
Dividends paid		(1,442	)		(1	)
Other cash inflow (outflow) from financing activities, net		6,367			8,354

Net cash from financing activities		414,854			2,191,763


Net increase in cash and cash equivalents before effect of exchange rate fluctuations		495,391			1,693,346

Effect of exchange rate fluctuations on cash held		1,071			(9,327	)


Net increase in cash and cash equivalents		496,462			1,684,019

Cash and cash equivalents at January 1		2,232,313			1,954,949


Cash and cash equivalents at March 31, 2014	￦	2,728,775			3,638,968

See accompanying notes to the consolidated financial statements.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Interim Consolidated Financial Statements

March 31, 2014

(Unaudited)

1.	Reporting Entity (Description of the controlling company)

Korea Electric Power Corporation (the “KEPCO”), controlling company as defined in Korean International Financial Reporting Standards (“K-IFRS”) 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. The KEPCO also provides power plant construction services. The KEPCO’s stock was listed on the Korea Stock Exchange on August 10, 1989 and the Company listed its Depository Receipts (DR) on the New York Stock Exchange on October 27, 1994.

As of March 31, 2014, the KEPCO’s share capital amounts to ￦3,209,820 million and the KEPCO’s shareholders are as follows:


	Number of shares		Percentage of ownership
Government of the Republic of Korea		135,917,118		21.17	%
Korea Finance Corporation		192,159,940		29.93	%
Foreign investors		150,612,232		23.46	%
Other		163,274,787		25.44	%


		641,964,077		100.00	%

In accordance with the Restructuring Plan enacted on January 21, 1999 by the Ministry of Trade, Industry and Energy (the “MTIE”, formerly the Ministry of Knowledge Economy), 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

The consolidated interim financial statements have been prepared in accordance with K-IFRS, as prescribed in the Act on External Audits of Corporations in the Republic of Korea.

These consolidated interim financial statements were prepared in accordance with K-IFRS 1034, ‘Interim Financial Reporting’ as part of the period covered by the Group’s K-IFRS annual financial statements. The notes are included to explain events and transactions to give the changes in financial position and performance of the Group since the last annual consolidated financial statements as at and for the year ended December 31, 2013.

(2)

Basis of measurement

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

•

derivative financial instruments are measured at fair value

•

available-for-sale financial assets 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 are the KEPCO’s functional currency and the currency of the primary economic environment in which the Company operates.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

2.	Basis of Preparation, Continued

(4)

Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with K-IFRS 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 following are 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.

(i)

Continued operation of Wolseong #1 nuclear power plant

The Company owns Wolseong #1 nuclear power plant, which started its operation on November 21, 1982, and completed its operation on November 20, 2012, completing the permitted operation period of 30 years. As of March 31, 2014, the Company is in the process of obtaining safety assessments to obtain an approval from the Nuclear Safety and Security Commission to resume the plant’s operation for another term. The Company has prepared the consolidated financial statements assuming that the plant will operate for the next 10 years.

(ii)

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

The Company 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 Company records the fair value of estimated decommissioning costs as a liability in the period in which the Company 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 Company 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.

(iii)

Deferred tax

The Company 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 Company does not realize estimated future taxable income during the carry forward periods.

(iv)

Valuations of financial instruments at fair values

The Company’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the financial officer.

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 K-IFRS including the level in the fair value hierarchy in which such valuation techniques should be classified.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

2.	Basis of Preparation, Continued

(4)

Use of estimates and judgments, continued

When measuring the fair value of an asset or a liability, the Company 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 Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

(v)

Defined employee liabilities

The Company 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.

(vi)

Unbilled revenue

Energy delivered but not yet metered, and the quantities of energy delivered but not yet measured and not billed are calculated 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 assumptions and prices based on statistics. Unbilled revenue recognized as of March 31, 2014 and 2013 is ￦1,499,049 million and ￦1,226,542 million, respectively.

(5)

Changes in accounting policies

(i)

Amendments to K-IFRS 1032, ‘Financial Instruments: Disclosures’

The Company adopted the amendments of K-IFRS 1032, ‘Financial Instruments: Disclosures’ since January 1, 2014. K-IFRS 1032 requires that a financial asset and a financial liability shall be offset and the net amount presented in the statement of financial position when, and only when, an entity: (i) currently has a legally enforceable right to set off the recognized amounts; and (ii) intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

A legally enforceable right of set-off must not be contingent on a future event; and must be legally enforceable in all of the following circumstances: (i) the normal course of business; (ii) the event of default; and (iii) the event of insolvency or bankruptcy of the entity and all of the counterparties.

If the Company can settle amounts in a manner such that the outcome is, in effect, equivalent to net settlement, the Company will meet the net settlement criterion in K-IFRS 1032. This will occur if, and only if, the gross settlement mechanism has features that eliminate or result in insignificant credit and liquidity risk, and that will process receivables and payables in a single settlement process or cycle.

The Company has not applied the amendment retrospectively since management believes the impact of the amendments on the Company’s consolidated financial statements is clearly immaterial.

(ii)

K-IFRS 2121, ‘Levies’

The Company adopted K-IFRS 2121, ‘Levies’ since January 1, 2014. K-IFRS 2121 defines the obligating event that gives rise to a liability to pay a levy as the activity that triggers the payment of the levy, as identified by the legislation.

The liability to pay a levy is recognized progressively if the obligating event occurs over a period of time and if the obligating event is the reaching of a minimum activity threshold, the corresponding liability is recognised when that minimum activity threshold is reached. Meanwhile, an entity shall recognise an asset if it has prepaid a levy but does not yet have a present obligation to pay that levy.

The Company has not applied the amendment retrospectively since management believes the impact of the amendments on the Company’s consolidated financial statements is clearly immaterial.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies

(1)

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities (including special purpose entities) controlled by the Company (or one of its subsidiaries).

Income and expense of a subsidiary acquired or disposed of during the year are included in the consolidated statement of comprehensive income (loss) from the effective date of acquisition and up to the effective date of disposal, as appropriate. Total comprehensive income of subsidiaries is attributed to the owners of the Company and to the non-controlling interests even if this results in the non-controlling interests having a deficit balance.

When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those of the Company.

Transactions between the Company and its subsidiaries are eliminated during the consolidation.

Changes in the Company’s ownership interests in a subsidiary that do not result in the Company losing control over the subsidiary are accounted for as equity transactions. The carrying amounts of the Company’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiary. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Company.

When the Company losses control of a subsidiary, the income or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. When assets of the subsidiary are carried at revalued amounts or fair values and the related cumulative gain or loss has been recognized in other comprehensive income and accumulated in equity, the amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the Company had directly disposed of the relevant assets (i.e. reclassified to income or loss or transferred directly to retained earnings). The fair value of any investment retained in the former subsidiary at the date when control is lost is recognized as the fair value on initial recognition for subsequent accounting under K-IFRS 1039, ‘Financial Instruments’: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity.

(2)

Business combinations

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control.

The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Company, liabilities incurred by the Company to the former owners of the acquiree and the equity interests issued by the Company in exchange for control of the acquiree. Acquisition-related costs are generally recognized in income or loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair value at the acquisition date, except that:

•

deferred tax assets or liabilities and liabilities or assets related to employee benefit arrangements are recognized and measured in accordance with K-IFRS 1012, ‘ Income Taxes’ and K-IFRS 1019, ‘ Employee Benefits’ respectively;

•

Assets (or disposal Companys) that are classified as held for sale in accordance with K-IFRS 1105, ‘Non-current Assets Held for Sale’ are measured in accordance with that standard.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(2)

Business combinations, continued

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the excess is recognized immediately in income or loss as a bargain purchase gain.

Non-controlling interest that is present on acquisition day and entitles the holder to a proportionate share of the entity’s net assets in an event of liquidation, may be initially measured either at fair value or at the non-controlling interest’s proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The choice of measurement can be elected on a transaction-by-transaction basis. Other types of non-controlling interests are measured at fair value or, when applicable, on the basis specified in other K-IFRS.

When the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not re-measured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or a liability is re-measured at subsequent reporting dates in accordance with K-IFRS 1039, ‘Financial Instruments: Recognition and Measurement’, or with K-IFRS 1037, ‘Provisions’, Contingent Liabilities and Contingent Assets, as appropriate, with the corresponding gain or loss being recognized in income or loss.

When a business combination is achieved in stages, the Company’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date (i.e. the date when the Company obtains control) and the resulting gain or loss, if any, is recognized in income or loss. Amounts arising from interests in the acquiree prior to the acquisition date that have previously been recognized in other comprehensive income are reclassified to income or loss where such treatment would be appropriate if that interest were disposed of.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts recognized at that date.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(3)

Investments in associates

An associate is an entity over which the Company has significant influence and that is neither a subsidiary nor an interest in a joint venture. Significant influence is the power to participate in the financial and operating policy decisions of the investee but does not have control or joint control over those policies.

The results and assets and liabilities of associates are incorporated in these consolidated financial statements using the equity method of accounting. If the investment is classified as held for sale, in which case it is accounted for in accordance with K-IFRS 1105, ‘Non-current Assets Held for Sale’, any retained portion of an investment in associates that has not been classified as held for sale shall be accounted for using the equity method until disposal of the portion that is classified as held for sale takes place. If the Company holds 20% ~ 50% of the voting power of the investee, it is presumed that the Company has significant influence.

After the disposal takes place, the Company shall account for any retained interest in associates in accordance with K-IFRS 1039, ‘Financial Instruments: Recognition and Measurement’ unless the retained interest continues to be an associates, in which case the entity uses the equity method.

Under the equity method, an investment in an associate is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the Company’s share of the income or loss and other comprehensive income of the associate. When the Company’s share of losses of an associate exceeds the Company’s interest in that associate (which includes any long-term interests that, in substance, form part of the Company’s net investment in the associate), the Company discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Company has incurred legal or constructive obligations or made payments on behalf of the associate.

Any excess of the cost of acquisition over the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment. Any excess of the Company’s share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in income or loss. The requirements of K-IFRS 1039, ’Financial Instruments: Recognition and Measurement’, are applied to determine whether it is necessary to recognize any impairment loss with respect to the Company’s investment in an associate. When necessary, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with K-IFRS 1036, ‘Impairment of Assets’ as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs to sell) with its carrying amount, any impairment loss recognized forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized in accordance with K-IFRS 1036 to the extent that the recoverable amount of the investment subsequently increases.

Upon disposal of an associate that results in the Company losing significant influence over that associate, any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset in accordance with K-IFRS 1036. The difference between the previous carrying amount of the associate attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate. In addition, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that associate on the same basis as would be required if that associate had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other comprehensive income by that associate would be reclassified to income or loss on the disposal of the related assets or liabilities, the Company reclassifies the gain or loss from equity to income or loss (as a reclassification adjustment) when it loses significant influence over that associate.

When the Company transacts with its associate, incomes and losses resulting from the transactions with the associate are recognized in the Company’s consolidated financial statements only to the extent of interests in the associate that are not related to the Company.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(4)

Joint arrangements

A joint arrangement is an arrangement of which two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Joint arrangements are classified into two types—joint operations and joint ventures. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint venturers) have rights to the net assets of the arrangement.

If the Company is a joint operator, the Company is to recognize and measure the assets and liabilities (and recognize the related revenues and expenses) in relation to its interest in the arrangement in accordance with relevant IFRSs applicable to the particular assets, liabilities, revenues and expenses. If the joint arrangement is a joint venture, the Company is to account for that investment using the equity method accounting in accordance with K-IFRS 1028, ‘Investment in Associates and Joint Ventures’ (see note 3 (3)), except when the Company is applicable to the K-IFRS 1105, ‘Non-current Assets Held for Sale’.

(5)

Non-current assets held for sale

Non-current assets and disposal groups are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the non-current asset (or disposal group) is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

When the Company is committed to a sale plan involving loss of control of a subsidiary, all of the assets and liabilities of that subsidiary are classified as held for sale when the criteria described above are met, regardless of whether the Company will retain a non-controlling interest in its former subsidiary after the sale.

Non-current assets (and disposal groups) classified as held for sale are measured at the lower of their previous carrying amount and fair value less costs to sell.

(6)

Goodwill

The Company measures goodwill which acquired in a business combination at the amount recognized at the date on which it obtains control of the acquiree (acquisition date) less any accumulated impairment losses. Goodwill acquired in a business combination is allocated to each CGU that is expected to benefit from the synergies arising from the goodwill acquired.

The Company assesses at the end of each reporting period whether there is any indication that an asset may be impaired. An impairment loss is recognized if the carrying amount of an asset or a CGU exceeds its recoverable amount. Impairment losses are recognized in profit or loss.

Any impairment identified at the CGU level will first reduce the carrying value of goodwill and then be used to reduce the carrying amount of the other assets in the CGU on a pro rata basis. Except for impairment losses in respect of goodwill which are never reversed, an impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(7)

Revenue recognition

Revenue from the sale of goods, rendering of services or use of the Company assets is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates, and are recognized as a reduction of revenue. Revenue is recognized when the amount of revenue can be measured reliably and it is probable that the economic benefits associated with the transaction will flow to the Company.

(i)

Sales of goods

The Korean government approves the rates charged to customers by the Company’s power transmission and distribution division. The Company’s utility rates are designed to recover the Company’s reasonable costs plus a fair investment return. The Company’s power generation rates are determined in the market.

The Company recognizes electricity sales revenue based on power sold (transferred to the customer) up to the reporting date. To determine the amount of power sold, the Company estimates daily power volumes of electricity for residential, commercial, general and etc. The differences between the current month’s estimated amount and actual (meter-read) amount, is adjusted for (trued-up) during the next month period.

(ii)

Sales of services

Revenue from services rendered is recognized in profit or loss in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed by reference to surveys of work performed or services performed to date as a percentage of total services to be performed or the proportion that costs incurred to date bear to the estimated total costs of the transaction or other methods that reliably measures the services performed.

(iii)

Dividend income and interest income

Dividend income is recognized in profit or loss on the date that the Company’s right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

Interest income is recognized as it accrues in profit or loss, using the effective interest method. Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount on initial recognition.

(iv)

Rental income

The Company’s policy for recognition of revenue from operating leases is described in note 3 (9) below.

(v)

Deferral of revenue – Transfer of Assets from Customers

The Company recovers a substantial amount of the cost related to its electric power distribution facilities from customers through the transfer of assets, while the remaining portion is recovered through electricity sales from such customers in the future. As such, the Company believes there exists a continued service obligation to the customers in accordance with K-IFRS 2118, ‘Transfer of Assets from Customers’ when the Company receives an item of property, equipment, or cash for constructing or acquiring an item of property or equipment, in exchange for supplying electricity to customers. The Company defers the amounts received, which are then recognized as revenue over the estimated service period which does not exceed the transferred asset’s useful life.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(8)

Construction services revenue

The Company provides services related to the construction of power plants related to facilities of its customers, mostly in foreign countries.

When the outcome of a construction contract can be estimated reliably, revenue and costs are recognized based on the stage of completion of the contract activity at the end of the reporting period, measured based on the proportion of contract costs incurred for work performed to date relative to the estimated total contract costs, except where this would not be representative of the stage of completion. Variations in contract work, claims and incentive payments are included to the extent that the amount can be measured reliably and its receipt is considered probable.

When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized to the extent of contract costs incurred when it is probable the revenue will be realized. Contract costs are recognized as expenses in the period in which they are incurred. When it is probable that total contract costs will exceed total contract revenue, the expected loss is recognized as an expense immediately.

When contract costs incurred to date plus recognized income less recognized losses exceed progress billings, the surplus is shown as amounts due from customers for contract work. For contracts where progress billings exceed contract costs incurred to date plus recognized income less recognized losses, the surplus is shown as the amounts due to customers for contract work. Amounts received before the related work is performed are included in the consolidated statements of financial position, as a liability, as advances received. Amounts billed for work performed but not yet paid by the customer are included in the consolidated statements of financial position as accounts and other receivables.

(9)

Leases

The Company classifies and accounts for leases as either a finance or operating lease, depending on the terms. Leases where the Company assumes substantially all of the risks and rewards of ownership are classified as finance leases. All other leases are classified as operating leases.

(i)

The Company as lessor

Amounts due from lessees under finance leases are recognized as receivables at the amount of the Company’s net investment in the leases. Finance lease income is allocated to accounting periods so as to reflect a constant periodic rate of return on the Company’s net investment outstanding in respect of the leases.

Rental income from operating leases is recognized on a straight-line basis over the term of the relevant lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognized on a straight-line basis over the lease term.

(ii)

The Company as lessee

Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other leases are classified as operating leases.

Assets held under finance leases are initially recognized as assets of the Company at their fair value at the inception of the lease or, if lower, at the present value of the minimum lease payments. The corresponding liability to the lessor is included in the statement of financial position as a finance lease obligation.

Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognized immediately in income or loss, unless they are directly attributable to qualifying assets, in which case they are capitalized in accordance with the Company’s general policy on borrowing costs. Contingent rentals are recognized as expenses in the periods in which they are incurred.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(9)

Leases, Continued

Operating lease payments are recognized as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed. Contingent rentals arising under operating leases are recognized as an expense in the period in which they are incurred.

In the event that lease incentives are received to enter into operating leases, such incentives are recognized as a liability. The aggregate benefit of incentives is recognized as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

(iii)

Determining whether an arrangement contains a lease

Determining whether an arrangement is, or contains, a lease is based on the substance of the arrangement and requires an assessment of whether fulfillment of the arrangement is dependent on the use of a specific asset or assets (the asset) and the arrangement conveys a right to use the asset.

At inception or reassessment of the arrangement, management of the Company separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values. If management of the Company concludes for a financial lease that it is impracticable to separate the payments reliably, the Company recognizes an asset and a liability at an amount equal to the fair value of the underlying asset that was identified as the subject of the lease. Subsequently, the liability shall be reduced as payments are made and an imputed finance charge on the liability recognized using the purchaser’s incremental borrowing rate of interest.

(10)

Foreign currencies

Transactions in foreign currencies are translated to the respective functional currencies of the Company entities at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are retranslated to the functional currency using the reporting date’s exchange rate. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined.

Exchange differences are recognized in profit or loss in the period in which they arise except for:

•

Exchange differences on foreign currency borrowings relating to assets under construction for future productive use, which are included in the cost of those assets when they are regarded as an adjustment to interest costs on those foreign currency borrowings;

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(10)

Foreign currencies, continued

•

Exchange differences on transactions entered into in order to hedge certain foreign currency risks; and

•

Exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned nor likely to occur (therefore forming part of the net investment in the foreign operation), which are recognized initially in other comprehensive income and reclassified from equity to income or loss on disposal or partial disposal of the net investment.

For the purpose of presenting financial statements, the assets and liabilities of the Company’s foreign operations are expressed in Korean won using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the dates of the transactions are used. Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in equity.

When a foreign operation is disposed of, the relevant amount in the translation is transferred to profit or loss as part of the profit or loss on disposal.

(11)

Borrowing costs

The Company capitalizes borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset. Other borrowing costs are recognized in expense as incurred. A qualifying asset is an asset that requires a substantial period of time to get ready for its intended use or sale.

Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalization.

All other borrowing costs are recognized in income or loss in the period in which they are incurred.

(12)

Government grants

Government grants are not recognized unless there is reasonable assurance that the Company will comply with the grant’s conditions and that the grant will be received.

Benefit from a government loan at a below-market interest rate is treated as a government grant, measured as the difference between proceeds received and the fair value of the loan based on prevailing market interest rates.

(i)

If the Company received grants related to assets

Government grants whose primary condition is that the Company purchase, construct or otherwise acquire long-term assets are deducted in calculating the carrying amount of the asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced depreciation expense.

(ii)

If the Company received grants related to income

Government grants which are intended to compensate the Company for expenses incurred are recognized as other income (government grants) in profit or loss over the periods in which the Company recognizes the related costs as expenses.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(13)

Employee benefits

(i)

Retirement benefits: defined contribution plans

When an employee has rendered service to the Company during a period, the Company recognizes the contribution payable to a defined contribution plan in exchange for that service as a liability (accrued expense), after deducting any contribution already paid.

(ii)

Retirement benefits: defined benefit plans

For defined benefit pension plans and other post-employment benefits, the net periodic pension expense is actuarially determined by “Pension Actuarial System” developed by independent actuaries using the projected unit credit method.

The asset or liability recognized in the statement of financial position is the present value of the defined benefit obligation at the end of the reporting period less the fair value of plan assets, together with adjustments for unrecognized past service costs. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related pension liability.

All actuarial gains and losses that arise in calculating the present value of the defined benefit obligation and the fair value of plan assets are recognized immediately in retained earnings and included in the statement of comprehensive income.

For the purpose of calculating the expected return on plan assets, the assets are valued at fair value. Actual results will differ from results which are estimated based on assumptions. Past service cost is recognized as an expense at the earlier of the following dates: (a) when the plan amendment or curtailment occurs; (b) when the company recognizes related restructuring costs or termination benefits.

The retirement benefit obligation recognized in the consolidated statement of financial position represents the present value of the defined benefit obligation as adjusted for unrecognized actuarial gains and losses and unrecognized past service cost, and as reduced by the fair value of plan assets. Any asset resulting from this calculation is limited to unrecognized actuarial losses and past service cost, plus the present value of available refunds and reductions in future contributions to the plan.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(14)

Income taxes

Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in profit or loss except to the extent that it relates to a business combination, or items recognized directly in equity or in other comprehensive income.

(i)

Current tax

Current tax is the expected tax payable or receivable on the taxable profit or loss for the year, using tax rates enacted or substantively enacted at the end of the reporting period and any adjustment to tax payable in respect of previous years. The taxable profit is different from the accounting profit for the period since the taxable profit is calculated excluding the temporary differences, which will be taxable or deductible in determining taxable profit (tax loss) of future periods, and non-taxable or non-deductible items from the accounting profit.

(ii)

Deferred tax

Deferred tax is recognized, using the asset-liability method, in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. A deferred tax liability is recognized for all taxable temporary differences. A deferred tax asset is recognized for all deductible temporary differences to the extent that it is probable that taxable profit will be available against which they can be utilized. However, deferred tax is not recognized for the following temporary differences: taxable temporary differences arising on the initial recognition of goodwill, or the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting profit or loss nor taxable income.

The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets or deferred tax liabilities on investment properties measured at fair value, unless any contrary evidence exists, are measured using the assumption that the carrying amount of the property will be recovered entirely through sale.

The Company recognizes a deferred tax liability for all taxable temporary differences associated with investments in subsidiaries, associates, and interests in joint ventures, except to the extent that the Company is able to control the timing of the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The Company recognizes a deferred tax asset for all deductible temporary differences arising from investments in subsidiaries and associates, to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary difference can be utilized.

The carrying amount of a deferred tax asset is reviewed at the end of each reporting period and reduces the carrying amount to the extent that it is no longer probable that sufficient taxable profit will be available to allow the benefit of part or all of that deferred tax asset to be utilized.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and deferred tax assets reflects the tax consequences that would follow from the manner in which the Company expects, at the end of the reporting period to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset only if there is a legally enforceable right to offset the related current tax liabilities and assets, and they relate to income taxes levied by the same tax authority and they intend to settle current tax liabilities and assets on a net basis.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(14)

Income taxes, continued

(iii)

Current and deferred tax for the year

Current and deferred tax are recognized in income or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, in which case, the current and deferred tax are also recognized in other comprehensive income or directly in equity respectively. Where current tax or deferred tax arises from the initial accounting for a business combination, the tax effect is included in the accounting for the business combination.

(15)

Property, plant and equipment

Property, plant and equipment are initially measured at cost and after initial recognition, are carried at cost less accumulated depreciation and accumulated impairment losses. The cost of property, plant and equipment includes expenditures arising directly from the construction or acquisition of the asset, any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located.

Subsequent costs are recognized in the carrying amount of property, plant and equipment at cost or, if appropriate, as separate items if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing are recognized in profit or loss as incurred.

Property, plant and equipment, except for land, are depreciated on a straight-line basis over estimated useful lives that appropriately reflect the pattern in which the asset’s future economic benefits are expected to be consumed. For loaded nuclear fuel related to long-term raw materials and spent nuclear fuels related to asset retirement costs, the Company uses the production method to measure and recognizes as expense the economic benefits of the assets.

The estimated useful lives of the Company’s property, plant and equipment are as follows:


		Useful lives (years)
Buildings		8 ~ 40
Structures		8 ~ 50
Machinery		6 ~ 32
Vehicles		4
Loaded heavy water		30
Asset retirement costs		18, 30, 40
Finance lease assets		20
Ships		9
Others		4 ~ 9

A component that is significant compared to the total cost of property, plant and equipment is depreciated over its separate useful life. Depreciation methods, useful lives and residual values are reviewed at the end of each reporting date and adjusted, if appropriate.

Property, plant and equipment are derecognized on disposal, or when no future economic benefits are expected from its use or disposal. Gains or losses arising from derecognition of a property, plant and equipment, measured as the difference between the net disposal proceeds and the carrying amount of the asset, are recognized in income or loss when the asset is derecognized.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(16)

Investment property

Property held for the purpose of earning rentals or benefiting from capital appreciation is classified as investment property. Investment property is initially measured at its cost. Transaction costs are included in the initial measurement. Subsequently, investment property is carried at depreciated cost less any accumulated impairment losses.

Subsequent costs are recognized in the carrying amount of investment property at cost or, if appropriate, as separate items if it is probable that future economic benefits associated with the item will flow to the Company and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing are recognized in profit or loss as incurred.

Investment property except for land, are depreciated on a straight-line basis over 8 ~ 40 years as estimated useful lives.

The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

An investment property is derecognized upon disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from the disposal. Any gain or loss arising on derecognition of the property (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in income or loss in the period in which the property is derecognized.

(17)

Intangible assets

(i)

Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortization and accumulated impairment losses. Amortization is recognized on a straight-line basis over their estimated useful lives. The estimated useful life and amortization method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at cost less accumulated impairment losses.

(ii)

Research and development

Expenditure on research activities is recognized as an expense in the period in which it is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognized if, and only if, all of the following have been demonstrated:

•

The technical feasibility of completing the intangible asset so that it will be available for use or sale;

•

The intention to complete the intangible asset and use or sell it;

•

The ability to use or sell the intangible asset;

•

How the intangible asset will generate probable future economic benefits;

•

The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

•

The ability to measure reliably the expenditure attributable to the intangible asset during its development.

The amount initially recognized for internally-generated intangible assets is the sum of the expenditure incurred from the date when the intangible asset first meets the recognition criteria listed above. When the development expenditure does not meet the criteria listed above, an internally-generated intangible asset cannot be recognized and the expenditure is recognized in income or loss in the period in which it is incurred.

Internally-generated intangible assets are reported at cost less accumulated amortization and accumulated impairment losses.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(17)

Intangible assets, continued

The estimated useful lives and amortization methods of the Company’s intangible assets with finite useful lives are as follows:


	Useful lives (years)	Amortization methods
Usage rights for donated assets	4 ~ 30	Straight
Software	4, 5	Straight
Industrial rights	5, 10	Straight
Development expenses	5	Straight
Dam usage right	50	Straight
Mining right	—	Unit of production
Others	4 ~ 20, 50	Straight

(iii)

Intangible assets acquired in a business combination

Intangible assets that are acquired in a business combination are recognized separately from goodwill are initially recognized at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.

(iv)

Derecognition of intangible assets

An intangible asset is derecognized on disposal, or when no future economic benefits are expected from its use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset, and are recognized in income or loss when the asset is derecognized.

(v)

Subsequent expenditures

Subsequent expenditures are capitalized only when they increase the future economic benefits embodied in the specific asset to which they relate. All other expenditures, including expenditures on internally generated goodwill and brands, are recognized in profit or loss as incurred.

(18)

Impairment of non-financial assets other than goodwill

At the end of each reporting period, the Company reviews the carrying amounts of its tangible and intangible assets with definite useful lives to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs. Where a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(18)

Impairment of non-financial assets other than goodwill, continued

If the recoverable amount of an asset (or a cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or the cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognized immediately in income or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in income or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

(19)

Inventories

Inventories are measured at the lower of cost and net realizable value. Cost of inventories, except for those in transit, are measured under the weighted average method and consists of the purchase price, cost of conversion and other costs incurred in bringing the inventories to their present location and condition.

Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. The amount of any write-down of inventories to net realizable value and all losses of inventories are recognized as an expense in the period the write-down or loss occurs. The amount of any reversal of any write-down of inventories, arising from an increase in net realizable value, are recognized as a reduction in the amount of inventories recognized as an expense in the period in which the reversal occurs.

(20)

Provisions

Provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

The risks and uncertainties that inevitably surround many events and circumstances are taken into account in reaching the best estimate of a provision. Where the effect of the time value of money is material, provisions are determined at the present value of the expected future cash flows.

Where some or all of the expenditures required to settle a provision are expected to be reimbursed by another party, the reimbursement shall be recognized when, and only when, it is virtually certain that reimbursement will be received if the entity settles the obligation. The reimbursement shall be treated as a separate asset.

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimates. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed.

(i)

Provision for Polychlorinated Biphenyls (“PCB”)

Under the regulation of Persistent Organic Pollutants Management Act, enacted in 2007, the Company is required to remove polychlorinated biphenyls (PCBs), a toxin, from the insulating oil of its transformers by 2025. As a result of the enactments, the Company is required to inspect the PCBs contents of transformers and dispose of PCBs in excess of safety standards under the legally settled procedures. The Company’s estimates and assumptions used to determine fair value can be affected by many factors, such as the estimated costs of inspection and disposal, inflation rate, discount rate, regulations and the general economy.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(20)

Provisions, continued

(ii)

Provision for decommissioning costs of nuclear power plants

The Company records the fair value of estimated decommissioning costs as a liability in the period in which the Company incurs a legal obligation associated with retirement of long-lived assets that result from acquisition, construction, development and/or normal use of the assets. Accretion expense consists of period-to-period changes in the liability for decommissioning costs resulting from the passage of time and revisions to either the timing or the amount of the original estimate of undiscounted cash flows.

(iii)

Provision for disposal of spent nuclear fuel

Under the Radioactive Waste Management Act, the Company is levied to pay the spent nuclear fuel fund for the management of spent nuclear fuel. The Company recognizes the provision of present value of the payments.

(iv)

Provision for low and intermediate radioactive wastes

Under the Radioactive Waste Management Act, the Company recognizes the provision for the disposal of low and intermediate radioactive wastes in best estimate of the expenditure required to settle the present obligation.

(v)

Provisions for power plant regional support program

Power plant regional support programs consist of scholarship programs to local students, local economy support programs, local culture support programs, environment development programs, and local welfare programs. The Company recognizes the provision in relation to power plant regional support program.

(vi)

Provision for employment benefits

The Company determines the provision for employment benefits as the incentive payments based on the results of the individual performance evaluation or management assessment.

(21)

Non-derivative financial assets

The Company recognizes and measures non-derivative financial assets by the following four categories: financial assets at fair value through profit or loss, held-to-maturity investments, loans and receivables and available-for-sale financial assets. The Company recognizes financial assets in the statement of financial position when the Company becomes a party to the contractual provisions of the instrument. Upon initial recognition, non-derivative financial assets are measured at their fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs that are directly attributable to the asset’s acquisition or issuance.

A regular way purchase or sale of financial assets shall be recognized and derecognized, as applicable, using trade date accounting or settlement date accounting. A regular way purchase or sale is a purchase or sale of a financial asset under a contract whose terms require delivery of the asset within the time frame established generally by regulation or convention in the marketplace concerned.

(i)

Effective interest method

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition. Income is recognized on an effective interest basis for debt instruments other than those financial assets classified as financial assets at fair value through profit or loss.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(21)

Non-derivative financial assets, continued

(ii)

Financial assets at fair value through profit or loss (FVTPL)

A financial asset is classified as financial assets are classified at fair value through profit or loss if it is held for trading or is designated as such upon initial recognition. Upon initial recognition, transaction costs are recognized in profit or loss when incurred. A financial assets its acquired principally for the purpose of selling it in the near term are classified as a short-term financial assets held for trading and also all the derivatives including an embedded derivate that is not designated and effective as a hedging instrument are classified at the short-term trading financial asset as well. Financial assets at fair value through profit or loss are measured at fair value, and changes therein are recognized in profit or loss.

A financial asset is classified as held for trading if:

•

It has been acquired principally for the purpose of selling it in the near term; or

•

On initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short term profit taking; or

•

It is derivative, including an embedded derivative that is not designated and effective as a hedging instrument.

A financial asset other than a financial asset held for trading may be designated as at financial assets at fair value through profit or loss upon initial recognition if:

•

Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

•

The financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its’ performance is evaluated on a fair value basis in accordance with the Company’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

•

It forms a part of a contract containing one or more embedded derivatives, and with K-IFRS 1039, Financial Instruments; Recognition and Measurement permits the entire combined contract (asset or liability) to be designated as at financial assets at fair value through profit or loss.

Financial assets at fair value through profit or loss are stated at fair value, with any gains or losses arising on re-measurement recognized in income or loss. The net gain or loss recognized in income or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘finance income and finance expenses’ line item in the consolidated statement of comprehensive income.

(iii)

Held-to-maturity investments

A non-derivative financial asset with a fixed or determinable payment and fixed maturity, for which the Company has the positive intention and ability to hold to maturity, are classified as held-to-maturity investments. Subsequent to initial recognition, held-to-maturity investments are measured at amortized cost using the effective interest method.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(21)

Non-derivative financial assets, continued

(iv)

Available-for-sale financial assets

Available-for-sale financial assets are those non-derivative financial assets that are designated as available-for-sale or are not classified as financial assets at fair value through profit or loss, held-to-maturity investments or loans and receivables.

Gains and losses arising from changes in fair value are recognized in other comprehensive income and accumulated in the valuation reserve. However, impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets are recognized in income or loss. Unquoted equity investments which are not traded in an active market, whose fair value cannot be measured reliably are carried at cost.

When a financial asset is derecognized or impairment losses are recognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to profit or loss.

Dividends on an available-for-sale equity instrument are recognized in profit or loss when the Company’s right to receive payment is established.

The fair value of available-for-sale monetary assets denominated in a foreign currency is determined in that foreign currency and translated at the spot rate at the end of the reporting period. The foreign exchange gains and losses that are recognized in income or loss are determined based on the amortized cost of the monetary asset. Other foreign exchange gains and losses are recognized in other comprehensive income.

(v)

Loans and receivables

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method except for loans and receivables of which the effect of discounting is immaterial.

(vi)

Impairment of financial assets

Financial assets, other than those at financial assets at fair value through profit or loss, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

For listed and unlisted equity investments classified as available-for-sale financial asset, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment in addition to the criteria mentioned below .

For all other financial assets, objective evidence of impairment could include:

•

Significant financial difficulty of the issuer or counterparty; or

•

Breach of contract, such as a default or delinquency in interest or principal payments, or

•

It becoming probable that the borrower will enter bankruptcy or financial re-organization; or

•

The disappearance of an active market for that financial asset because of financial difficulties.

For certain categories of financial asset, such as trade receivables, assets that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the Company’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period and, as well as observable changes in national or local economic conditions that correlate with default on receivables.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(21)

Non-derivative financial assets, continued

For financial assets recorded at amortized cost, the amount of the impairment loss recognized is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate.

For financial assets carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods.

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in income or loss.

When an available-for-sale financial asset is considered to be impaired, cumulative gains or losses previously recognized in other comprehensive income are reclassified to income or loss in the period.

For financial assets measured at amortized cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized, the previously recognized impairment loss is reversed through income or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortized cost would have been had the impairment not been recognized.

In respect of available-for-sale equity securities, impairment losses previously recognized in income or loss are not reversed through income or loss. Any increase in fair value subsequent to an impairment loss is recognized in other comprehensive income. In respect of available-for-sale debt securities, impairment losses are subsequently reversed through income or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

(vii)

De-recognition of financial assets

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Company is recognized as a separate asset or liability. If the Company retains substantially all the risks and rewards of ownership of the transferred financial assets, the Company continues to recognize the transferred financial assets and recognizes financial liabilities for the consideration received.

On de-recognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognized in other comprehensive income and accumulated in equity is recognized in income or loss.

On de-recognition of a financial asset other than in its entirety (e.g. when the Company retains an option to repurchase part of a transferred asset), the Company allocates the previous carrying amount of the financial asset between the part it continues to recognize under continuing involvement, and the part it no longer recognizes on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognized and the sum of the consideration received for the part no longer recognized and any cumulative gain or loss allocated to it that had been recognized in other comprehensive income is recognized in income or loss. A cumulative gain or loss that had been recognized in other comprehensive income is allocated between the part that continues to be recognized and the part that is no longer recognized on the basis of the relative fair values of those parts.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(22)

Non-derivative financial liabilities and equity instruments issued by the Company

(i)

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement.

(ii)

Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Company are recognized at the proceeds received, net of direct issue costs.

Repurchase of the Company’s own equity instruments is recognized and deducted directly in equity. No gain or loss is recognized in income or loss on the purchase, sale, issue or cancellation of the Company’s own equity instruments.

(iii)

Financial liabilities

Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the instruments. Financial liabilities are initially measured at fair value. Transaction cost that are directly attributable to the issue of financial liabilities are added to or deducted from the fair value of the financial liabilities, as appropriate, on initial recognition. Transaction cost directly attributable to acquisition of financial liabilities at fair value through profit or loss are recognized immediately in profit or loss.

Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial liabilities.

(iv)

Financial liabilities at fair value through profit or loss (FVTPL)

Financial liabilities are classified as at financial liabilities at fair value through profit or loss when the financial liability is either held for trading or it is designated as financial liabilities at fair value through profit or loss.

A financial liability is classified as held for trading if:

•

It has been acquired principally for the purpose of repurchasing it in the near term; or

•

On initial recognition it is part of a portfolio of identified financial instruments that the Company manages together and has a recent actual pattern of short-term profit-taking; or

•

It is a derivative that is not designated and effective as a hedging instrument.

A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:

•

Such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or

•

The financial liability forms part of a Company of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Company’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or

•

It forms part of a contract containing one or more embedded derivatives, and K-IFRS 1039, ‘Financial Instruments: Recognition and Measurement’, permits the entire combined contract (asset or liability) to be designated as at FVTPL.

Financial liabilities at fair value through profit or loss are stated at fair value, with any gains or losses arising on re-measurement recognized in income or loss. The net gain or loss recognized in income or loss incorporates any interest paid on the financial liability and is included in ‘finance income and finance expenses’.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(22)

Non-derivative financial liabilities and equity instruments issued by the Company, continued

(v)

Other financial liabilities

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs.

Other financial liabilities are subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis. The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition.

(vi)

Financial guarantee contract liabilities

Financial guarantee contract liabilities are initially measured at their fair values and, if not designated as at FVTPL, are subsequently measured at the higher of: (a) the amount of the obligation under the contract, as determined in accordance with K-IFRS 1037, ‘ Provisions’, Contingent Liabilities and Contingent Assets; or (b) the amount initially recognized less, cumulative amortization recognized in accordance with K-IFRS 1018, ‘ Revenue’.

(vii)

De-recognition of financial liabilities

The Company derecognizes financial liabilities when, and only when, the Company’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in income or loss.

(23)

Derivative financial instruments, including hedge accounting

The Company enters into a variety of derivative financial instruments to manage its exposure to interest rate and foreign exchange rate risk, including foreign exchange forward contracts, interest rate swaps and cross currency swaps and others.

Derivatives are initially recognized at fair value. Subsequent to initial recognition, derivatives are measured at fair value.

The resulting gain or loss is recognized in income or loss immediately unless the derivative is designated and effective as a hedging instrument, in such case the timing of the recognition in income or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognized as a financial asset; a derivative with a negative fair value is recognized as a financial liability. A derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realized or settled within 12 months. Other derivatives are presented as current assets or current liabilities.

(i)

Separable embedded derivatives

Derivatives embedded in other financial instruments or other host contracts are treated as separate derivatives when their risks and characteristics are not closely related to those of the host contracts and when the host contracts are not measured at FVTPL.

An embedded derivative is presented as a non-current asset or a non-current liability if the remaining maturity of the hybrid instrument to which the embedded derivative is part of, is more than 12 months and it is not expected to be realized or settled within 12 months. All other embedded derivatives are presented as current assets or current liabilities.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

3.	Significant Accounting Policies, Continued

(23)

Derivative financial instruments, including hedge accounting, continued

(ii)

Hedge accounting

The Company designates certain hedging instruments, which include derivatives, embedded derivatives and non-derivatives in respect of foreign currency risk, as either fair value hedges or cash flow hedges. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges.

At the inception of the hedge relationship, the entity documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Company documents whether the hedging instrument is highly effective in offsetting changes in fair values or cash flows of the hedged item.

(iii)

Fair value hedges

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognized in income or loss immediately, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The changes in the fair value of the hedging instrument and the change in the hedged item attributable to the hedged risk relating to the hedged items are recognized in the consolidated statements of comprehensive income.

Hedge accounting is discontinued when the Company revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or when it no longer qualifies for hedge accounting. The fair value adjustment to the carrying amount of the hedged item arising from the hedged risk is amortized as income or loss as of that date.

(iv)

Cash flow hedges

The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other comprehensive income and accumulated under the heading of reverse for gains (loss) on valuation of derivatives. The gain or loss relating to the ineffective portion is recognized immediately in income or loss, and is included in the ‘finance income and expense’.

Amounts previously recognized in other comprehensive income and accumulated in equity are reclassified to income or loss in the periods when the hedged item is recognized in income or loss, in the same line of the consolidated statement of comprehensive income as the recognized hedged item. However, when the forecast transaction that is hedged results in the recognition of a non-financial asset or a non-financial liability, the gains and losses previously accumulated in equity are transferred from equity and included in the initial measurement of the cost of the non-financial asset or non-financial liability.

Hedge accounting is discontinued when the Company revokes the hedging relationship, when the hedging instrument expires or is sold, terminated, or exercised, or it no longer qualifies for hedge accounting. Any gain or loss accumulated in equity at that time remains in equity and is recognized when the forecast transaction is ultimately recognized in income or loss. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in equity is recognized immediately in income or loss.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

4.	Segment, Geographic and Other Information

(1)

Segment determination and explanation of the measurements

The Company’s operating segments are its business components that generates discrete financial information that is reported to and regularly revised by the Company’s the chief operating decision maker, the Chief Executive Officer, for the purpose of resource allocation and assessment of segment performance. The Company’s reportable segments, in accordance with K-IFRS 1108, 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 Company’s foreign operations.

Segment operating income (loss) is determined the same way that consolidated operating income is determined under K-IFRS 1108 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 an equity method basis in the consolidated financial statements.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

4.	Segment, Geographic and Other Information, Continued

(2)

Financial information of the segments for the three-month periods ended March 31, 2014 and 2013 respectively are as follows:


In millions of won
March 31, 2014
Segment	Total segment revenue		Intersegment revenue			Revenue from external customers		Depreciation and amortization			Interest income			Interest expense			Income(loss) of assoiates and joint ventures			Operating income (loss)

Transmission and distribution	￦	14,681,061		285,952			14,395,109		671,919			6,965			359,889			107,056			(266,967	)
Electric power generation (Nuclear)		2,448,121		2,445,463			2,658		703,211			3,952			145,797			740			948,969
Electric power generation (Non-nuclear)		7,428,668		7,301,758			126,910		517,069			8,150			74,913			3,572			514,372
Plant maintenance & engineering service		554,479		403,044			151,435		17,766			5,002			143			(1,201	)		57,658

Others		122,200		25,665			96,535		6,657			26,896			18,568			—			31,107

Consolidation adjustments		(10,461,882)		(10,461,882	)		—		(8,498	)		(2,770	)		(2,264	)		—			(58,062	)

	￦	14,772,647		—			14,772,647		1,908,124			48,195			597,046			110,167			1,227,077


Other income																					70,723

Other expenses																					(23,059	)

Other gains (losses), net																					41,082

Finance income																					278,058

Finance costs																					(802,121	)


Equity method Income of associates joint ventures																					110,167


Profit before income tax																					901,927

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

4.	Segment, Geographic and Other Information, Continued

(2)

Financial information of the segments for the three-month periods ended March 31, 2014 and 2013, respectively are as follows, continued:


In millions of won
March 31, 2013
Segment	Total segment revenue			Intersegment revenue			Revenue from external customers		Depreciation and amortization			Interest income			Interest expense			Income(loss) of assoiates and joint ventures			Operating income (loss)

Transmission and distribution	￦	13,632,974			207,370			13,425,604		653,948			7,984			386,448			80,665			(478,941	)
Electric power generation (Nuclear)		2,011,717			1,983,604			28,113		694,463			5,512			139,491			—			553,932
Electric power generation (Non-nuclear)		7,630,708			7,474,032			156,676		472,950			11,956			61,376			(8,597	)		593,417
Plant maintenance & engineering service		513,456			392,560			120,896		18,867			8,390			36			(827	)		44,822

Others		69,316			1,507			67,809		2,024			19,500			11,353			—			21,905

Consolidation adjustments		(10,059,073	)		(10,059,073	)		—		(7,425	)		(2,680	)		(3,422	)		—			(77,366	)

	￦	13,799,098			—			13,799,098		1,834,827			50,662			595,282			71,241			657,769


Other income																						88,059

Other expenses																						(17,213	)

Other gains (losses), net																						31,004

Finance income																						436,728

Finance costs																						(1,059,543	)


Equity method Income of associates joint ventures																						71,241


Profit before income tax																						208,045

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

4.	Segment, Geographic and Other Information, Continued

(3)

Total assets and liabilities of the segments as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won
March 31, 2014
Segment	Segment assets			Investments in associates and joint ventures		Acquisition of non-current assets		Segment liabilities

Transmission and distribution	￦	98,081,007			4,013,949		1,376,818		56,726,361
Electric power generation (Nuclear)		47,574,590			1,672		372,054		26,739,548
Electric power generation (Non-nuclear)		38,070,404			1,326,813		1,638,636		21,209,516
Plant maintenance & engineering service		2,488,282			56,466		39,540		1,007,671

Others		5,959,556			—		80,191		2,062,017

Consolidation adjustments		(35,133,506	)		—		85,495		(2,598,680	)


Consolidated totals	￦	157,040,333			5,398,900		3,592,734		105,146,433


In millions of won
December 31, 2013
Segment	Segment assets			Investments in associates and joint ventures		Acquisition of non-current assets			Segment liabilities

Transmission and distribution	￦	98,249,927			3,895,266		4,458,291			56,590,381
Electric power generation (Nuclear)		46,717,706			908		2,412,782			26,482,646
Electric power generation (Non-nuclear)		36,455,090			1,275,330		6,882,630			19,832,122
Plant maintenance & engineering service		2,463,204			59,251		222,547			932,485

Others		5,617,304			—		429,626			2,008,541

Consolidation adjustments		(33,975,897	)		—		(75,237	)		(1,769,577	)


Consolidated totals	￦	155,527,334			5,230,755		14,330,639			104,076,598

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

4.	Segment, Geographic and Other Information, Continued

(4)

Geographic information

The following information on revenue from external customers and non-current assets is determined by the location of the customers and of the assets:


In millions of won
	Revenue from external customers				*Non-current assets (2)**
	March 31, 2014		March 31, 2013		March 31, 2014		March 31, 2013

Domestic	￦	14,164,630		13,329,168		133,587,578		131,876,535

Overseas (*1)		608,017		469,930		4,739,569		4,474,900


	￦	14,772,647		13,799,098		138,327,147		136,351,435

(*1)	Middle East and Asia make up the majority of overseas revenue and non-current assets.

(*2)	Amount excludes financial assets and deferred tax assets

(5)

Information on significant customers

There is no individual customer comprising more than 10% of the Company’s revenue for the three-month periods ended March 31, 2014 and 2013.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

5.	Classification of Financial Instruments

(1)

Classification of financial assets as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Financial assets at fair value through profit or loss		Loans and receivables		Available- for-sale financial assets		Held-to- maturity investments		Derivative assets (using hedge accounting)		Total
Current assets

Cash and cash equivalents	￦	—		2,728,775		—		—		—		2,728,775
Current financial assets

Held-to-maturity investments		—		—		—		133		—		133
Derivative assets		3,088		—		—		—		—		3,088
Other financial assets		—		313,169		—		—		—		313,169

Trade and other receivables		—		6,759,519		—		—		—		6,759,519


		3,088		9,801,463		—		133		—		9,804,684

Non-current assets

Non- current financial assets

Available-for-sale financial assets		—		—		1,232,732		—		—		1,232,732

Held-to-maturity investments		—		—		—		2,072		—		2,072
Derivative assets		13,104		—		—		—		96,242		109,346
Other financial assets		—		573,571		—		—		—		573,571

Trade and other receivables		—		1,665,489		—		—		—		1,665,489


		13,104		2,239,060		1,232,732		2,072		96,242		3,583,210


	￦	16,192		12,040,523		1,232,732		2,205		96,242		13,387,894

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

5.	Classification of Financial Instruments, Continued

(1)

Classification of financial assets as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won	December 31, 2013
	Financial assets at fair value through profit or loss		Loans and receivables		Available- for-sale financial assets		Held-to- maturity investments		Derivative assets (using hedge accounting)		Total
Current assets

Cash and cash equivalents	￦	—		2,232,313		—		—		—		2,232,313
Current financial assets

Held-to-maturity investments		—		—		—		168		—		168
Derivative assets		1,437		—		—		—		—		1,437
Other financial assets		—		434,608		—		—		—		434,608

Trade and other receivables		—		7,526,311		—		—		—		7,526,311


		1,437		10,193,232		—		168		—		10,194,837

Non-current assets

Non- current financial assets

Available-for-sale financial assets		—		—		1,256,765		—		—		1,256,765

Held-to-maturity investments		—		—		—		2,117		—		2,117
Derivative assets		2,681		—		—		—		82,376		85,057
Other financial assets		—		559,013		—		—		—		559,013

Trade and other receivables		—		1,644,333		—		—		—		1,644,333


		2,681		2,203,346		1,256,765		2,117		82,376		3,547,285


	￦	4,118		12,396,578		1,256,765		2,285		82,376		13,742,122

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

5.	Classification of Financial Instruments, Continued

(2)

Classification of financial liabilities as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Financial liabilities at fair value through profit or loss		Financial liabilities recognized at amortized cost		Derivative liabilities (using hedge accounting)		Total
Current liabilities

Borrowings	￦	—		1,730,223		—		1,730,223

Debt securities		—		6,445,966		—		6,445,966

Derivative liabilities		241,493		—		28,822		270,315

Trade and other payables		—		5,502,731		—		5,502,731


		241,493		13,678,920		28,822		13,949,235

Non-current liabilities

Borrowings		—		4,473,227		—		4,473,227

Debt securities		—		48,922,710		—		48,922,710

Derivative liabilities		125,046		—		131,264		256,310

Trade and other payables		—		3,977,897		—		3,977,897


		125,046		57,373,834		131,264		57,630,144


	￦	366,539		71,052,754		160,086		71,579,379


In millions of won	December 31, 2013
	Financial liabilities at fair value through profit or loss		Financial liabilities recognized at amortized cost		Derivative liabilities (using hedge accounting)		Total
Current liabilities

Borrowings	￦	—		1,470,862		—		1,470,862

Debt securities		—		6,616,636		—		6,616,636

Derivative liabilities		304,699		—		33,034		337,733

Trade and other payables		—		5,892,763		—		5,892,763


		304,699		13,980,261		33,034		14,317,994

Non-current liabilities

Borrowings		—		4,538,390		—		4,538,390

Debt securities		—		48,262,262		—		48,262,262

Derivative liabilities		186,336		—		176,406		362,742

Trade and other payables		—		3,971,519		—		3,971,519


		186,336		56,772,171		176,406		57,134,913


	￦	491,035		70,752,432		209,440		71,452,907

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

5.	Classification of Financial Instruments, Continued

(3)

Classification of comprehensive income (loss) from financial instruments for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won		March 31, 2014			March 31, 2013

Cash and cash equivalents	Interest income	￦	12,242			15,889
Available-for-sale financial assets	Dividends income		12,525			11,239
	Interest income		108			527
	Loss on disposal of financial assets		(2	)		—
Held-to-maturity investments	Interest income		17			16
Loans and receivables	Interest income		6,020			12,691
Trade and other receivables	Interest income		25,466			15,412
Other financial assets	Interest income		305			7
Short-term financial instruments	Interest income		3,927			6,115
Long-term financial instruments	Interest income		110			5
Financial assets at fair value through profit or loss	Gain on valuation of derivatives		9,379			43,233
	Gain (loss) on transaction of derivatives		(9,563	)		7,431
Derivative assets (using hedge accounting)	Gain on valuation of derivatives		35,908			79,722
	Loss on valuation of derivatives (equity, before tax)*		(5,732	)		(6,407	)
	Gain (loss) on transaction of derivatives		(1,585	)		5,220
Financial liabilities carried at amortized cost	Interest expense of borrowings and debt securities		(427,547	)		(428,335	)
	Interest expense of trade and other payables		(22,376	)		(26,222	)
	Interest expense of others		(147,123	)		(140,725	)
	Loss on foreign currency transactions and translations		(145,391	)		(408,665	)
Financial liabilities at fair value through profit or loss	Gain on valuation of derivatives		68,839			116,063
	Gain on transaction of derivatives		28,595			132
Derivative liabilities (using hedge accounting)	Gain on valuation of derivatives		29,520			49,980
	Gain on valuation of derivatives (equity, before tax)*		6,690			3,662
	Gain (loss) on transaction of derivatives		(5,311	)		2,015

Items are included in other comprehensive income. All other income and gain amounts listed above are included in finance income, and all expense and loss amounts listed above are included in finance expenses in the accompanying consolidated statements of comprehensive income.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

6.	Restricted Deposits

Restricted deposits as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won		March 31, 2014		December 31, 2013

Cash and cash equivalents	Escrow accounts	￦	76,541		61,873
	Deposits for government project		16,652		17,807
	Collateral provided for lawsuit		189		—
	Collateral for borrowings		10,306		—
Short-term financial instruments	Restriction on withdrawl related to win-win growth program for small and medium enterprises		5,000		—
Long-term financial instruments	Guarantee deposits for checking account		5		5
	Guarantee deposits for banking accounts at oversea branches		304		300
	Collateral provided for lawsuit		330		330

		￦	109,327		80,315

7.	Cash and Cash Equivalents

Cash and cash equivalents as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014		December 31, 2013

Cash	￦	103		56
Cash equivalents		1,147,795		1,141,202
Short-term deposits classified as cash equivalents		1,236,497		1,073,789
Short-term investments classified as cash equivalents		344,380		17,266


	￦	2,728,775		2,232,313

8.	Trade and Other Receivables

(1)

Trade and other receivables as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets
Trade receivables	￦	6,251,671		(63,179	)		(91	)		6,188,401
Other receivables		616,916		(43,697	)		(2,101	)		571,118

		6,868,587		(106,876	)		(2,192	)		6,759,519

Non-current assets
Trade receivables		420,868		—			—			420,868
Other receivables		1,288,979		(37,472	)		(6,886	)		1,244,621

		1,709,847		(37,472	)		(6,886	)		1,665,489


	￦	8,578,434		(144,348	)		(9,078	)		8,425,008

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

8.	Trade and Other Receivables, Continued

1)	Trade and other receivables as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won	December 31, 2013
	Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets
Trade receivables	￦	7,076,303		(65,024	)		(136	)		7,011,143
Other receivables		559,958		(42,729	)		(2,061	)		515,168

		7,636,261		(107,753	)		(2,197	)		7,526,311

Non-current assets
Trade receivables		421,949		—			(8	)		421,941
Other receivables		1,255,724		(27,158	)		(6,174	)		1,222,392

		1,677,673		(27,158	)		(6,182	)		1,644,333


	￦	9,313,934		(134,911	)		(8,379	)		9,170,644

(2)

Other receivables as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets

Non-trade receivables	￦	297,097		(43,697	)		—			253,400

Accrued income		38,198		—			—			38,198

Deposits		166,431		—			(2,101	)		164,330
Finance lease receivables		5,356		—			—			5,356

Others		109,834		—			—			109,834

		616,916		(43,697	)		(2,101	)		571,118

Non-current assets

Non-trade receivables		100,091		(17,829	)		—			82,262

Accrued income		7,910		—			—			7,910

Deposits		239,212		—			(6,886	)		232,326
Finance lease receivables		853,594		—			—			853,594

Others		88,172		(19,643	)		—			68,529

		1,288,979		(37,472	)		(6,886	)		1,244,621


	￦	1,905,895		(81,169	)		(8,987	)		1,815,739

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

8.	Trade and Other Receivables, Continued

(2)

Other receivables as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won	December 31, 2013
	Gross amount		Allowance for doubtful accounts			Present value discount			Book value
Current assets
Non-trade receivables	￦	233,714		(42,729	)		—			190,985

Accrued income		47,310		—			—			47,310

Deposits		162,730		—			(2,061	)		160,669
Finance lease receivables		4,569		—			—			4,569

Others		111,635		—			—			111,635

		559,958		(42,729	)		(2,061	)		515,168

Non-current assets

Non-trade receivables		102,254		(8,608	)		—			93,646

Deposits		230,083		—			(6,174	)		223,909
Finance lease receivables		845,712		—			—			845,712

Accrued income		7,052		—			—			7,052

Others		70,623		(18,550	)		—			52,073

		1,255,724		(27,158	)		(6,174	)		1,222,392


	￦	1,815,682		(69,887	)		(8,235	)		1,737,560

Trade and other receivables are classified as loans and receivables, and are measured using the effective interest method. No interest is accrued for trade receivables for the duration between the billing date and the payment due dates. Once trade receivables are overdue, the Company imposes a 2.0% interest rate on the overdue trade receivables. The Company holds deposits of three-months’ expected electricity usage for customers requesting temporary usage and customers with past defaulted payments.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

8.	Trade and Other Receivables, Continued

(3)

Aging analysis of trade receivables as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014			December 31, 2013

Trade receivables: (not overdue, not impaired)	￦	6,476,872			7,350,705

Trade receivables: (overdue, not impaired)		972			292

Less than 60 days		972			292

Trade receivables: (impairment reviewed)		194,695			147,255
60 ~ 90 days		69,137			36,707
90 ~ 120 days		11,639			18,214
120 days ~ 1year		60,799			38,066
Over 1 year		53,120			54,268

		6,672,539			7,498,252


Less allowance for doubtful accounts		(63,179	)		(65,024	)
Less present value discount		(91	)		(144	)


	￦	6,609,269			7,433,084

The Company assesses at the end of each reporting period whether there is any objective evidence that trade receivables are impaired, and provides allowances for doubtful accounts which includes impairment for trade receivables that are individually significant.

The Company considers receivables as overdue if the receivables are outstanding 60 days after the maturity and sets allowance based on past experience of collection.

(4)

Aging analysis of other receivables as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014			December 31, 2013

Other receivables: (not overdue, not impaired)	￦	1,701,581			1,667,837

Other receivables: (overdue, not impaired)		60,009			24,878

Less than 60 days		60,009			24,878

Other receivables: (impairment reviewed)		144,305			122,967
60 ~ 90 days		11,610			17,507
90 ~ 120 days		2,745			1,880
120 days ~ 1year		42,678			23,996
Over 1 year		87,272			79,584

		1,905,895			1,815,682


Less allowance for doubtful accounts		(81,169	)		(69,887	)
Less present value discount		(8,987	)		(8,235	)


	￦	1,815,739			1,737,560

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

8.	Trade and Other Receivables, Continued

(5)

Changes in the allowance for doubtful accounts for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014						December 31, 2013
	Trade receivables			Other receivables			Trade receivables			Other receivables

Beginning balance	￦	65,024			69,887			47,312			225,078
Bad debt expense		501			11,870			40,446			8,665
Write-offs		(2,346	)		(2,091	)		(22,734	)		(4,227	)
Reversals		—			—			—			—
Others (*)		—			1,503			—			(159,629	)


Ending balance	￦	63,179			81,169			65,024			69,887

(*)	The allowance against loans to equity method investments which were reversed when the loans were converted to investment in associates.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

9.	Available-for-sale Financial Assets

Available-for-sale financial assets as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	Ownership			March 31, 2014		December 31, 2013
Equity securities

Listed

Kwanglim Co., Ltd.(*1)		0.44	%	￦	159		150
Sungjee Construction Co., Ltd.(*1)		0.01	%		8		7
Korea District Heating Corp.		19.55	%		154,183		194,710
Ssangyong Motor Co., Ltd.(*1)		0.03	%		337		291
LG Uplus Corporation		8.80	%		401,377		412,901
Fission Uranium Corp.(formerly named Fission)		0.52	%		1,300		848
Denison Mines Corp.		12.62	%		91,866		74,498
Energy Fuels INC		9.06	%		17,054		10,307
PT Adaro Energy Tbk		1.50	%		44,406		45,204
Cockatoo Coal Limited (*2)		1.20	%		1,825		1,875
Namkwang Engineering & Construction Co., Ltd		0.01	%		5		5

Byucksan Engineering & Construction Co., Ltd		0.00	%		1		1

Dongyang Engineering & Construction Corp.		0.01	%		4		5

Pumyang Construction Co., Ltd.		0.00	%		2		3

Korea Line Corp.		0.00	%		—		—

					712,527		740,805

Unlisted
Construction Guarantee		0.02	%		781		790
Global Dynasty Overseas Resource Development Private Equity Firm		7.46	%		1,681		1,517
Plant & Mechanical Contractors Financial Cooperative of Korea		0.01	%		36		36
Dongnam Co., Ltd.		0.46	%		72		72
Mobo Co., Ltd.		0.00	%		14		14
Fire Guarantee		0.02	%		20		20
Korea Software Financial Cooperative		0.18	%		301		301
Woobang ENC Co., Ltd.		0.00	%		22		22
Women’s Venture Fund		10.00	%		780		780
Engineering Financial Cooperative		0.11	%		60		60
Intellectual Discovery, Ltd.		9.13	%		5,000		5,000
Electric Contractors Financial Cooperative		0.03	%		152		152
Korea Specialty Contractor Financial Cooperative		0.01	%		417		417
Information & Communication Financial Cooperative		0.03	%		10		10
Troika Overseas Resource Development Private Equity Firm		3.66	%		11,104		10,664
Poonglim Industrial Co., Ltd.		0.01	%		78		78
Woori Ascon Co., Ltd.		0.34	%		10		10
HANKOOK Silicon Co., Ltd.		11.82	%		7,513		7,513
LIG E&C Co., Ltd.		0.00	%		5		5
Miju Steel Mfg Co., Ltd.		0.23	%		51		51

Ginseng K Co., Ltd.		0.08	%		8		8

Dae Kwang Semiconductor Co., Ltd.		0.07	%		6		6

Sanbon Department Store		0.01	%		124		124

SAMBO AUTO. Co., Ltd.		0.02	%		38		38

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

9.	Available-for-sale Financial Assets, Continued

Available-for-sale financial assets as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won	Ownership			March 31, 2014		December 31, 2013

Korea Bio Fuel Co., Ltd.		15.00	%	￦	1,500		1,500
Korea Electric Engineers Association		0.26	%		61		61
Korea Investment—Korea EXIM Bank CERs Private Special Asset Investment Trust		14.18	%		6,803		6,803

Hanwha Electric Power Venture Fund		16.40	%		1,804		1,804

Hwan Young Steel Co., Ltd.		0.14	%		97		97

IBK-AUCTUS Green Growth Private Equity Firm		6.30	%		6,054		6,054
K&C- Gyeongnam Youth Job Creation Investment Fund		10.00	%		1,340		1,340

Areva Nc Expansion		13.49	%		250,528		248,292

Green & Sustainable Energy Investment Corp.		19.58	%		13		13

Kanan Hydroelectric Power Corp.		19.58	%		18		17

Set Holding		2.50	%		170,514		170,514

Siam Solar Power		10.00	%		945		933

3i Powergen Inc.		15.00	%		1,492		1,486

PT. Kedap Saayq		10.00	%		18,540		18,540

Navanakorn Electric Co., Ltd. (*3)		29.00	%		16,370		16,163
Pumyang Assetmanagement Co. Ltd.		0.00	%		3		—
BnB Sungwon Co., Ltd		0.01	%		15		—
Hana		0.00	%		1		—

					504,381		501,305

Debt securities
Ambre Energy Limited					15,824		14,655


				￦	1,232,732		1,256,765

(*1)

It has been determined that available-for-sale financial assets were impaired because the fair values of the securities of Kwanglim Co., Ltd., Ssangyong Motor Co., Ltd. and Sungjee Construction Co., Ltd. declined below their respective acquisition costs during the prior year. As such, cumulative losses of ￦415 million previously recognized in other comprehensive loss were reclassified to impairment losses on available-for-sale financial assets for the year ended March 31, 2014.

(*2)

The fair value of Cockatoo Coal Limited securities declined significantly below the acquisition cost and the cumulative losses of ￦12,177 million previously recognized in other comprehensive loss were reclassified to impairment loss on available-for-sale financial assets for the the year ended March 31, 2014.

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

Book values of unlisted equity securities held by the Company that were measured at cost as of March 31, 2014 and December 31, 2013 are ￦333,086 million and ￦330,001 million, respectively, as a quoted market price does not exist in an active market and its fair value cannot be measured reliably.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

10.

Held-to-maturity Investments

Held-to-maturity investments as of March 31, 2014 and December 31, 2013 are as follows:

In millions of won

March 31, 2014

December 31, 2013

Current

Non-current

Current

Non-current

Government and municipal bonds and others

￦

133

2,072

168

2,117

11.

Derivatives

(1)

Derivatives as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
	Current		Non-current		Current		Non-current
Derivative assets
Currency option	￦	2,402		—		963		—
Currency forward		686		30		474		206
Currency swap		—		108,096		—		83,003
Interest rate swap		—		1,220		—		1,848

	￦	3,088		109,346		1,437		85,057

Derivative liabilities
Currency option	￦	3,341		—		42,144		—
Currency forward		244		1		2,166		—
Currency swap		265,076		196,316		291,476		289,819
Interest rate swap		1,654		59,993		1,947		72,923

	￦	270,315		256,310		337,733		362,742

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

11.

Derivatives, Continued

(2)

Currency option contracts which are not designated as hedge instruments as of March 31, 2014 are as follows:

(i) Target Redemption Forward

In won and thousands of U.S. dollars

Financial institution

Contract year

Position

Contract amount

Contract
exchange rate

Target
profit

Standard Chartered

2014.01.09 ~ 2015.01.02

SELL

USD 6,000

￦

1,087.10

￦ 250

Barclays Bank PLC

2014.01.10 ~ 2015.01.02

SELL

USD 3,000

1,086.40

250

Credit Suisse

2014.01.08 ~ 2014.12.31

SELL

USD 5,000

1,086.70

250

Morgan Stanley

2013.09.11 ~ 2014.05.07

BUY

USD 10,000

1,072.90

Morgan Stanley

2013.10.21 ~ 2014.12.29

BUY

USD 3,000

1,047.00

Morgan Stanley

2013.08.19 ~ 2014.08.18

BUY

USD 3,000

1,089.40

200

The Company enters into currency option contracts to buy or sell currency at a specified exchange rate during a specified period of time to hedge currency exchange risk from flaming coal purchase payments. Every week, the Company compares the target profit to the accumulated total profit or loss from the difference between the contract exchange rate and average exchange rate. When the target profits are achieved, the contracts will be automatically terminated.

(ii) European Knock-Out


In millions of won and thousands of U.S. dollars
Financial institution	Contract year		Contract amount				Contract exchange rate		Barrier
Financial institution	Contract year		Pay		Receive		Contract exchange rate		Barrier
Barclays Bank PLC		2013.10.11 ~ 2014.04.07		9,884		USD 9,317	￦	1,060.90	￦	1,130.00
Barclays Bank PLC		2013.10.29 ~ 2014.04.24		11,250		USD 10,689		1,052.50		1,100.00
Barclays Bank PLC		2013.12.13 ~ 2014.05.08		8,472		USD 8,121		1,043.20		1,100.00
Barclays Bank PLC		2014.01.14 ~ 2014.06.11		4,309		USD 4,094		1,052.70		1,110.00
Barclays Bank PLC		2014.01.20 ~ 2014.07.02		12,780		USD 12,048		1,060.80		1,120.00
Barclays Bank PLC		2014.01.20 ~ 2014.06.12		11,180		USD 10,561		1,058.60		1,120.00
Barclays Bank PLC		2014.01.20 ~ 2014.04.15		13,129		USD 12,344		1,063.60		1,120.00
Barclays Bank PLC		2014.01.20 ~ 2014.07.02		4,644		USD 4,395		1,056.60		1,120.00
Korea Exchange Bank		2013.10.22 ~ 2014.04.17		5,816		USD 5,516		1,054.40		1,110.00
Korea Exchange Bank		2013.12.16 ~ 2014.06.11		18,335		USD 17,664		1,038.00		1,100.00
Korea Exchange Bank		2014.01.14 ~ 2014.07.10		11,661		USD 11,121		1,048.60		1,110.00
Korea Exchange Bank		2014.01.15 ~ 2014.06.11		10,906		USD 10,343		1,054.40		1,110.00
Korea Exchange Bank		2014.01.20 ~ 2014.07.16		17,392		USD 16,488		1,054.80		1,110.00
Credit Suisse		2013.10.28 ~ 2014.04.24		10,142		USD 9,619		1,054.40		1,110.00
RBS		2013.11.23 ~ 2014.04.21		5,853		USD 5,546		1,055.20		1,110.00
RBS		2014.01.21 ~ 2014.06.18		14,414		USD 13,596		1,060.20		1,120.00

Contracts are entered to hedge the currency risk arising from foreign short-term borrowings. The contracts will be automatically cancelled if the market average exchange rate at maturity date is above the barrier.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

11.

Derivatives, Continued

(3)

Currency forward contracts which are not designated as hedge instruments, as of March 31, 2014 are as follows:


In millions of won and thousands of foreign currencies
Counterparty	Contract Date	Maturity date	Contract amounts				Contract exchange rate
Counterparty	Contract Date	Maturity date	Pay		Receive		Contract exchange rate

Korea Exchange Bank	2014.03.13	2014.04.17		13,771		12,879		1,069.27
Korea Exchange Bank	2014.03.06	2014.04.10		4,059		3,803		1,067.35
The Bank of Nova Scotia	2014.03.27	2014.04.30		5,369		5,000		1,073.70
The Bank of Nova Scotia	2014.03.27	2014.04.21		10,748		10,000		1,074.75
The Bank of Nova Scotia	2014.03.31	2014.04.03		3,218,710		3,022		1,064.95
Standard Chartered	2014.03.27	2014.04.21		USD 10,000		10,747		1,074.65
RBS	2014.03.27	2014.04.21		USD 10,000		10,747		1,074.65
Barclays Bank PLC	2014.03.27	2014.04.21		USD 8,000		8,582		1,072.80
Barclays Bank PLC	2014.03.31	2014.04.01		USD 2,175		2,319		1,066.05
Citibank	2014.03.31	2014.04.21		USD 5,000		5,333		1,066.69
RBS	2014.03.28	2014.04.03		5,341		USD 5,000		1,068.21
RBS	2014.03.31	2014.04.10		5,331		USD 5,000		1,066.26
Deutsche Bank	2014.03.31	2014.04.10		5,333		USD 5,000		1,066.55
Korea Exchange Bank	2014.03.31	2014.04.18		5,330		USD 5,000		1,066.00
The Bank of Nova Scotia	2014.03.31	2014.04.03		5,328		USD 5,000		1,065.65
Barclays Bank PLC	2014.03.06	2014.04.10		5,341		USD 5,000		1,068.15
Barclays Bank PLC	2014.03.06	2014.04.10		5,338		USD 5,000		1,067.55
Barclays Bank PLC	2014.03.06	2014.04.10		1,335		USD 1,252		1,066.65
Barclays Bank PLC	2014.03.28	2014.05.02		5,341		USD 5,000		1,068.10
Barclays Bank PLC	2014.03.31	2014.05.02		4,265		USD 4,000		1,066.20
BNP Paribas	2014.03.06	2014.04.10		5,338		USD 5,000		1,067.55
BNP Paribas	2014.03.06	2014.04.10		5,333		USD 5,000		1,066.65
Credit Agricole	2014.03.06	2014.04.10		5,333		USD 5,000		1,066.65
Credit Agricole	2014.03.06	2014.04.10		5,338		USD 5,000		1,067.55
Credit Agricole	2014.03.27	2014.04.30		10,706		USD 10,000		1,070.60
Citibank	2014.03.06	2014.04.10		5,332		USD 5,000		1,066.35
Citibank	2014.03.27	2014.04.02		5,357		USD 5,000		1,071.42
Citibank	2014.03.31	2014.05.02		5,335		USD 5,000		1,067.07
Credit Suisse	2014.03.07	2014.04.11		10,629		USD 10,000		1,062.90
Credit Suisse	2014.03.31	2014.05.02		5,334		USD 5,000		1,066.70
Goldman Sachs	2014.03.31	2014.05.02		5,332		USD 5,000		1,066.35
Goldman Sachs	2014.03.28	2014.05.02		3,204		USD 3,000		1,068.10
HSBC	2014.03.31	2014.05.02		5,333		USD 5,000		1,066.55
HSBC	2014.03.31	2014.05.02		5,316		USD 5,000		1,063.10
Morgan Stanley	2014.03.06	2014.04.10		3,617		USD 3,385		1,068.35
The Bank of Nova Scotia	2014.03.06	2014.04.10		5,341		USD 5,000		1,068.15
The Bank of Nova Scotia	2014.03.06	2014.04.10		559		USD 524		1,067.65
The Bank of Nova Scotia	2014.03.27	2014.04.02		5,348		USD 5,000		1,069.50
The Bank of Nova Scotia	2014.03.31	2014.05.02		5,323		USD 5,000		1,064.60
The Bank of Nova Scotia	2014.03.31	2014.05.02		5,316		USD 5,000		1,063.10
RBS	2014.03.06	2014.04.10		5,333		USD 5,000		1,066.65
RBS	2014.03.06	2014.04.10		529		USD 495		1,068.25
Societe Generale	2014.03.28	2014.05.02		5,341		USD 5,000		1,068.10
Standard Chartered	2011.08.08	2014.04.28 ~ 2015.12.28		USD 17,593		19,339		1,093.10~1103.10
Hana Bank	2013.12.27	2014.04.07 ~ 2014.06.20		JPY 25,900		261		10.08~10.10

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

11.

Derivatives, Continued

(4)

Currency swap contracts which are not designated as hedge instruments as of March 31, 2014 are as follows:


In millions of won and thousands of foreign currencies
Counterparty	Contract year	Contract amount				Contract interest rate				Contract exchange
Counterparty	Contract year	Pay		Receive		Pay (%)			Receive (%)	rate

Shinhan Bank	2010~2014		84,615		USD 75,000		6.83	%	5.50%		1,128.20
RBS	2010~2014		141,125		USD 125,000		6.78	%	5.50%		1,129.00
Morgan Stanley	2010~2014		112,320		USD 100,000		6.71	%	5.50%		1,123.20
HSBC	2010~2014		112,320		USD 100,000		6.71	%	5.50%		1,123.20
Bank of America	2011~2014		110,310		USD 100,000		6.93	%	5.50%		1,103.10
UBS	2011~2015		220,356		USD 200,000		3.90	%	3.00%		1,101.78
RBS	2011~2015		110,110		USD 100,000		3.90	%	3.00%		1,101.10
Barclays Bank PLC	2011~2015		108,390		USD 100,000		3.78	%	3.00%		1,083.90
Credit Suisse	2011~2015		108,390		USD 100,000		3.22	%	3.00%		1,083.90
Morgan Stanley	2011~2015		63,006		USD 60,000		4.06	%	3.00%		1,050.10
Goldman Sachs	2010~2015		156,643		USD 140,000		3.92	%	3.00%		1,118.88
Deutsche Bank	2012~2018		110,412		JPY 10,000,000		6.21	%	4.19%		11.04
IBK	2013~2018		111,800		USD 100,000		3.16	%	2.79%		1,118.00
Bank of America	2012~2018		103,580		JPY 10,000,000		7.05	%	4.19%		10.36
Credit Suisse	2014~2019		118,632		CHF 100,000		2.98	%	1.50%		1,186.32
Morgan Stanley	2010~2015		118,800		USD 100,000		4.61	%	3M Libor+1.64%		1,188.00
M-UFJ	2010~2015		116,100		USD 100,000		4.00	%	3M Libor+1.00%		1,161.00
DBS	2011~2014		56,150		USD 50,000		4.21	%	3M Libor+1.00%		1,123.00
SMBC	2011~2014		56,150		USD 50,000		4.21	%	3M Libor+1.00%		1,123.00
Mizuho Corporate Bank	2011~2014		112,800		USD 100,000		3.86	%	3M Libor+0.80%		1,128.00
DBS	2011~2014		109,500		USD 100,000		3.80	%	3M Libor+0.85%		1,095.00
Deutsche Bank	2009~2014		126,610		USD 100,000		5.39	%	6.25%		1,266.10
Nomura	2009~2014		126,610		USD 100,000		5.35	%	6.25%		1,266.10
Nomura	2009~2014		126,610		USD 100,000		5.33	%	6.25%		1,266.10
Morgan Stanley	2009~2014		126,610		USD 100,000		5.32	%	6.25%		1,266.10
Morgan Stanley	2010~2014		126,610		USD 100,000		5.30	%	6.25%		1,266.10
Barclays Bank PLC	2010~2014		126,610		USD 100,000		5.29	%	6.25%		1,266.10
Citibank	2010~2014		126,610		USD 100,000		5.27	%	6.25%		1,266.10
JP Morgan	2010~2014		126,610		USD 100,000		4.93	%	6.25%		1,266.10
Deutsche Bank	2010~2014		126,610		USD 100,000		4.93	%	6.25%		1,266.10
RBS	2010~2014		126,610		USD 100,000		4.93	%	6.25%		1,266.10
Citibank	2010~2015		116,080		USD 100,000		3.97	%	3.13%		1,160.80
Deutsche Bank	2010~2015		116,080		USD 100,000		3.98	%	3.13%		1,160.80
RBS	2010~2015		116,080		USD 100,000		3.97	%	3.13%		1,160.80
HSBC	2010~2015		116,080		USD 100,000		3.23	%	3.13%		1,160.80
UBS	2010~2015		116,080		USD 100,000		3.23	%	3.13%		1,160.80
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
Goldman Sachs	2012~2022		112,930		USD 100,000		2.79	%	3.00%		1,129.30
HSBC	2012~2022		111,770		USD 100,000		2.89	%	3.00%		1,117.70
Hana Bank	2012~2022		111,770		USD 100,000		2.87	%	3.00%		1,117.70
Standard Chartered	2012~2022		111,770		USD 100,000		2.89	%	3.00%		1,117.70
Deutsche Bank	2012~2022		55,885		USD 50,000		2.79	%	3.00%		1,117.70
DBS	2013~2018		108,140		USD 100,000		2.63	%	3M Libor+0.84%		1,081.40
DBS	2013~2018		108,140		USD 100,000		2.57	%	3M Libor+0.84%		1,081.40
DBS	2013~2018		108,140		USD 100,000		2.57	%	3M Libor+0.84%		1,081.40
HSBC	2013~2018		107,450		USD 100,000		3.41	%	2.88%		1,074.50
Standard Chartered	2013~2018		107,450		USD 100,000		3.44	%	2.88%		1,074.50
JP Morgan	2013~2018		107,450		USD 100,000		3.48	%	2.88%		1,074.50
Bank of America	2014~2018		107,450		USD 100,000		3.09	%	2.88%		1,074.50
Citibank	2014~2018		107,450		USD 100,000		3.09	%	2.88%		1,074.50

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

11.

Derivatives, Continued

(5)

Currency swap contracts which are designated as hedge instruments as of March 31, 2014 are as follows:


In millions of won and thousands of foreign currencies
Counterparty	Contract year		Contract amount				Contract interest rate		Contract exchange
Counterparty	Contract year		Pay		Receive		Pay (%)	Receive (%)	rate

Citibank		2006~2016		113,200	USD	100,000	1.05%	6.00%		1,132.00
Barclays Bank PLC		2006~2016		113,200	USD	100,000	1.05%	6.00%		1,132.00
Credit Suisse		2006~2016		113,200	USD	100,000	1.05%	6.00%		1,132.00
Goldman Sachs		2011~2017		105,260	USD	100,000	3.99%	3.63%		1,052.60
Barclays Bank PLC		2011~2017		105,260	USD	100,000	3.99%	3.63%		1,052.60
Citibank		2011~2017		105,260	USD	100,000	3.99%	3.63%		1,052.60
HSBC		2012~2014		45,264	USD	40,000	3.25%	3M Libor+1.50%		1,131.60
Citibank		2012~2014		33,948	USD	30,000	3.25%	3M Libor+1.50%		1,131.60
RBS		2012~2014		22,632	USD	20,000	3.25%	3M Libor+1.50%		1,131.60
UOB		2012~2014		33,948	USD	30,000	3.25%	3M Libor+1.50%		1,131.60
DBS		2012~2014		56,580	USD	50,000	3.20%	3M Libor+1.50%		1,131.60
ANZ		2012~2014		22,632	USD	20,000	3.20%	3M Libor+1.50%		1,131.60
Citibank		2012~2014		20,369	USD	18,000	3.20%	3M Libor+1.50%		1,131.60
Credit Suisse		2012~2014		45,264	USD	40,000	2.77%	3M Libor+1.50%		1,131.60
RBS		2012~2014		58,843	USD	52,000	2.77%	3M Libor+1.50%		1,131.60
Citibank		2013~2018		54,570	USD	50,000	2.90%	3M Libor+1.01%		1,091.40
Standard Chartered		2013~2018		54,570	USD	50,000	2.90%	3M Libor+1.01%		1,091.40
Credit Suisse		2013~2018		111,410	USD	100,000	3.22%	3M Libor+1.50%		1,114.10
HSBC		2014~2020		99,901	AUD	100,000	3.52%	5.75%		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%		0.94
Standard Chartered		2014~2020		126,032	USD	117,250	3.55%	3M Libor+1.25%		1,074.90
UBS AG		2006~2016		98,100	USD	100,000	5.48%	5.50%		981
Credit Suisse		2006~2016		98,100	USD	100,000	5.48%	5.50%		981
JP Morgan		2014~2019		107,190	USD	100,000	3.25%+3%*n/N	2.75%		1,071.90
Morgan Stanley		2014~2019		107,190	USD	100,000	3.25%+3%*n/N	2.75%		1,071.90
Barclays Bank PLC		2014~2019		107,190	USD	100,000	3.25%+3%*n/N	2.75%		1,071.90
Barclays Bank PLC		2006~2016		71,888	USD	75,000	4.81%	5.50%		958.51
Deutsche Bank AG		2006~2016		71,888	USD	75,000	4.81%	5.50%		958.51
Barclays Bank PLC		2012~2017		142,500	USD	125,000	3.83%	3.13%		1,140.00
Morgan Stanley		2012~2017		142,500	USD	125,000	3.83%	3.13%		1,140.00
RBS		2012~2017		142,500	USD	125,000	3.83%	3.13%		1,140.00
JP Morgan		2012~2017		142,500	USD	125,000	3.83%	3.13%		1,140.00
RBS		2013~2019		118,343	CHF	100,000	3.47%	1.63%		1,183.43
Barclays Bank PLC		2013~2019		59,172	CHF	50,000	3.47%	1.63%		1,183.43
Nomura		2013~2019		59,172	CHF	50,000	3.47%	1.63%		1,183.43
Barclays Bank PLC		2013~2018		107,360	USD	100,000	3.34%	2.88%		1,073.60
RBS		2013~2018		107,360	USD	100,000	3.34%	2.88%		1,073.60
JP Morgan		2013~2018		161,040	USD	150,000	3.34%	2.88%		1,073.60
Standard Chartered		2013~2018		161,040	USD	150,000	3.34%	2.88%		1,073.60
Barclays Bank PLC		2004~2014		172,875	USD	150,000	5.10%	5.75%		1,152.50
Barclays Bank PLC		2013~2018		81,188	USD	75,000	2.65%	1.88%		1,082.50
RBS		2013~2018		81,188	USD	75,000	2.65%	1.88%		1,082.50
Deutsche Bank		2013~2018		81,188	USD	75,000	2.65%	1.88%		1,082.50
Citibank		2013~2018		81,188	USD	75,000	2.65%	1.88%		1,082.50
Standard Chartered		2014~2017		54,205	USD	50,000	2.93%	3M Libor+1.50%		1,084.10
Credit Agricole		2014~2017		54,205	USD	50,000	2.93%	3M Libor+1.50%		1,084.10
BTMU		2010~2015		55,900	USD	50,000	4.03%	3M Libor+1.20%		1,118.00
RBS		2012~2017		115,140	USD	100,000	3.38%	2.50%		1,151.40
BNP Paribas		2012~2017		115,140	USD	100,000	3.38%	2.50%		1,151.40
Hana Bank		2012~2017		115,140	USD	100,000	3.38%	2.50%		1,151.40
Barclays Bank PLC		2012~2017		57,570	USD	50,000	3.38%	2.50%		1,151.40
Standard Chartered		2012~2017		57,570	USD	50,000	3.38%	2.50%		1,151.40
Nomura		2012~2017		57,570	USD	50,000	3.38%	2.50%		1,151.40
Credit Agricole		2012~2017		57,570	USD	50,000	3.38%	2.50%		1,151.40

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

11.

Derivatives, Continued

(5)

Currency swap contracts which are designated as hedge instruments as of March 31, 2014 are as follows, continued:


In millions of won and thousands of foreign currencies
Counterparty	Contract		Contract amount				Contract interest rate						Contract exchange
Counterparty	year		Pay		Receive		Pay (%)			Receive (%)			rate

Societe Generale		2013~2018		106,190	USD	100,000		3.48	%		2.50	%		1,061.90
BNP Paribas		2013~2018		53,095	USD	50,000		3.48	%		2.63	%		1,061.90
Hana Bank		2013~2018		53,095	USD	50,000		3.48	%		2.63	%		1,061.90
Standard Chartered		2013~2018		106,030	USD	100,000		3.48	%		2.63	%		1,060.30
Barclays Bank PLC		2013~2018		53,015	USD	50,000		3.48	%		2.63	%		1,060.30
Hana Bank		2013~2018		31,809	USD	30,000		3.48	%		2.63	%		1,060.30
Societe Generale		2013~2018		21,206	USD	20,000		3.48	%		2.63	%		1,060.30
HSBC		2013~2018		53,015	USD	50,000		3.47	%		2.63	%		1,060.30
Nomura		2013~2018		53,015	USD	50,000		3.47	%		2.63	%		1,060.30

(6)

Interest rate swap contracts which are not designated as hedge instruments as of March 31, 2014 are as follows:


In millions of won
Counterparty	Contract year		Contract amount		Contract interest rate per annum
Counterparty	Contract year		Contract amount		Pay (%)			Receive (%)
Nonghyup Bank		2010~2015		100,000		4.90	%	3M CD+1.05%
Nonghyup Bank		2010~2015		100,000		4.83	%	3M CD+0.90%
Nonghyup Bank		2010~2015		50,000		4.77	%	3M CD+0.90%
Korea Development Bank		2012~2016		200,000		3.57	%	3M CD+0.26%
Nonghyup Bank		2012~2016		100,000		3.49	%	3M CD+0.25%
Korea Development Bank		2012~2016		50,000		3.49	%	3M CD+0.25%
HSBC		2012~2016		50,000		3.49	%	3M CD+0.25%
Standard Chartered		2012~2016		200,000		3.55	%	3M CD+0.26%
Standard Chartered		2012~2017		160,000		3.57	%	3M CD+0.32%
JP Morgan		2013~2018		150,000		3.58	%	3M CD+0.31%
Korea Exchange Bank		2011~2014		100,000		3.89	%	3M CD+0.05%
Korea Exchange Bank		2011~2014		200,000		3.66	%	3M CD+0.24%
Korea Exchange Bank		2012~2015		100,000		3.58	%	3M CD+0.15%
Korea Exchange Bank		2012~2015		200,000		3.65	%	3M CD+0.10%
Korea Exchange Bank		2012~2015		100,000		2.86	%	3M CD+0.05%
Korea Exchange Bank		2013~2016		100,000		2.82	%	3M CD+0.04%
Korea Exchange Bank		2013~2016		200,000		2.57	%	3M CD+0.04%
Korea Exchange Bank		2013~2016		100,000		2.75	%	3M CD+0.03%

(7)

Interest rate swap contracts which are designated as hedge instruments, as of of March 31, 2014 are as follows:

In thousands of U.S. dollars

Counterparty

Contract year

Contract
amount

Contract interest rate per annum

Pay (%)

Receive (%)

BNP Paribas

2009~2027

USD

108,633

4.16%

6M USD Libor

KFW

2009~2027

USD

108,633

4.16%

6M USD Libor

CA-CIB (Credit Agricole)

2013~2033

USD

106,684

3.98% ~ 4.10%

6M USD Libor

SMBC

2013~2033

USD

139,510

4.05% ~ 4.18%

6M USD Libor

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

11.

Derivatives, Continued

(8)

Gain and loss on valuation and transaction of derivatives for the three-month periods ended March 31, 2014 and 2013 are as follows and included in finance income and costs in the accompanying consolidated statements of comprehensive income:


In millions of won	Net income effects of valuation gain						Net income effects of transaction gain						Accumulated other comprehensive income (loss) (*)
	March 31, 2014			March 31, 2013			March 31, 2014			March 31, 2013			March 31, 2014			March 31, 2013
Currency option	￦	(940	)		—			22,106			—			—			—
Currency forward		42			205			1,534			7,067			—			4,004
Currency swap		147,651			292,129			(8,552	)		4,612			(5,563	)		(6,745	)
Interest rate swap		(3,107	)		(3,336	)		(1,342	)		(3,182	)		6,521			(4	)
Other derivatives		—			—			(1,610	)		6,301			—			—

	￦	143,646			288,998			12,136			14,798			958			(2,745	)

(*)	As of March 31, 2014, the accumulated net gain on valuation of derivatives using cash flow hedge accounting of ￦3,325 million, net of tax, is included in accumulated other comprehensive income.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

12.

Other Financial Assets

(1)

Other financial assets as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014						December 31, 2013
	Current			Non-current			Current			Non-current

Loans and receivables	￦	52,704			632,801			51,503			616,389
Present value discount		(1,177	)		(60,424	)		(1,094	)		(58,559	)
Long-term/short-term financial instruments		261,642			1,194			384,199			1,183


	￦	313,169			573,571			434,608			559,013

(2)

Loans and receivables as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Face value		Present value discount			Book value

Short-term loans and receivables
Loans for tuition	￦	26,868		(1,177	)		25,691
Loans for housing		12,409		—			12,409
Loans for related parties		933		—			933
Fisheries loan		11,000		—			11,000
Other loans		1,494		—			1,494

		52,704		(1,177	)		51,527

Long-term loans and receivables
Loans for tuition		372,949		(59,015	)		313,934
Loans for housing		105,519		—			105,519
Loans for related parties		140,238		—			140,238
Fisheries loan		13,760		(1,409	)		12,351
Other loans		335		—			335

		632,801		(60,424	)		572,377


	￦	685,505		(61,601	)		623,904

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

12.

Other Financial Assets, Continued

(2)

Loans and receivables as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won	December 31, 2013
	Face value		Present value discount			Book value

Short-term loans and receivables
Loans for tuition	￦	25,296		(1,094	)		24,202
Loans for housing		12,505		—			12,505
Loans for related parties		890		—			890
Fisheries loan		6,000		—			6,000
Other loans		6,812		—			6,812

		51,503		(1,094	)		50,409

Long-term loans and receivables
Loans for tuition		352,554		(56,956	)		295,598
Loans for housing		108,564		—			108,564
Loans for related parties		141,191		—			141,191
Fisheries loan		13,760		(1,603	)		12,157
Other loans		320		—			320

		616,389		(58,559	)		557,830


		￦ 667,892		(59,653	)		608,239

(3)

Long-term and short-term financial instruments as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
	Current		Non-current		Current		Non-current
Time deposits	￦	135,606		447		256,173		453
Installment deposits		—		108		—		93
Deposit for treasury stock in trust		60,779		—		64,940		—
Special money in trust		55,298		—		30,086		—
Repurchase agreement		—		—		18,000		—
CD		—		—		10,000		—
CP		4,959		—		—		—
Others		5,000		639		5,000		637


	￦	261,642		1,194		384,199		1,183

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

13.

Inventories

Inventories as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Acquisition cost		Valuation allowance			Book value

Raw materials	￦	3,066,231		(46	)		3,066,185
Merchandises		374		—			374
Work-in-progress		103,190		—			103,190
Finished goods		40,901		—			40,901
Supplies		721,113		(4,100	)		717,013
Inventories in transit		420,419		—			420,419
Other inventories		11,682		—			11,682


	￦	4,363,910		(4,146	)		4,359,764


In millions of won	December 31, 2013
	Acquisition cost		Valuation allowance			Book value

Raw materials	￦	2,904,722		(46	)		2,904,676
Merchandises		373		—			373
Work-in-progress		89,883		—			89,883
Finished goods		55,056		—			55,056
Supplies		683,699		(4,089	)		679,610
Inventories in transit		541,154		—			541,154
Other inventories		8,841		—			8,841


	￦	4,283,728		(4,135	)		4,279,593

The reversal of the allowance for loss on inventory valuation due from increases in the net realizable value of inventory and fluctuations in foreign exchange rates deducted from cost of sales were ￦228 million and ￦687 million, for the three-month period ended March 31, 2014 and for the year ended December 31, 2013, respectively. The amounts of loss from inventory valuation included in cost of sales for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 were ￦239 million and ￦261 million, respectively.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

14.

Finance Lease Receivables

(1)

Finance lease contracts

The Company 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 Company has fly-ash pipe conduit finance leases with an average lease term of 7 years. In addition the Company entered into a PPA with the Comision Federal de Electricidad in Mexico to provide for 25 years 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 March 31, 2014 and December 31, 2013 are as follows and included in current and non-current trade and other receivables, net, in the accompanying consolidated statements of financial position:


In millions of won	March 31, 2014				December 31, 2013
	Minimum lease payments		Present value of minimum lease payments		Minimum lease payments		Present value of minimum lease payments
Less than 1 year	￦	84,918		5,356		81,484		4,569
1 ~ 5 years		362,880		38,414		356,874		36,710
More than 5 years		1,698,865		815,180		1,782,639		809,002


	￦	2,146,663		858,950		2,220,997		850,281

(3)

There are no impaired finance lease receivables as of March 31, 2014 and December 31, 2013.

(4)

There are no changes in valuation allowance for finance lease receivables for the three-month period ended March 31, 2014 and for the year ended December 31, 2013.

15.

Non-Financial Assets

Non-financial assets as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
	Current		Non-current		Current		Non-current
Advance payment	￦	301,965		12,630		110,541		12,760
Prepaid expenses		173,059		103,020		150,852		102,823
Others (*)		152,810		12,897		309,452		15,928


	￦	627,834		128,547		570,845		131,511

(*)	Details of others as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
	Current		Non-current		Current		Non-current
Tax refund receivables	￦	48,521		1,366		228,857		1,349
Other quick assets and others		104,289		11,531		80,595		14,579


	￦	152,810		12,897		309,452		15,928

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

16.

Investments in Subsidiaries

(1)

Investments in subsidiaries as of March 31, 2014 and December 31, 2013 are as follows:


Subsidiaries	Key operation activities	Location	Percentage of ownership (%)
Subsidiaries	Key operation activities	Location	March 31, 2014			December 31, 2013

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		71.16	%		70.86	%
KEPCO Plant Service & Engineering Co., Ltd.	Utility plant maintenance and Others	KOREA		63.00	%		63.00	%
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	%
Garorim Tidal Power Plant Co., Ltd. (*2)	Power generation	KOREA		49.00	%		49.00	%
Korea Engineering & Power Services Co., Ltd.	Operation and maintenance of utility plant	KOREA		52.43	%		52.43	%
KEPCO International Hong Kong 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	Construction and operation of utility plant	PHILIPPINES		100.00	%		100.00	%
KEPCO Ilijan Corporation	Utility plant rehabilitation and operation	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 Canada Energy Ltd.	Resources development	CANADA		100.00	%		100.00	%
KEPCO Netherlands B.V.	Holding company	NETHERLANDS		100.00	%		100.00	%
KOREA Imouraren Uranium Investment Corp.	Uranium mine development	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.	Resources development	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	%
KEPCO Canada Uranium Investment Limited Partnership	Resources development	CANADA		100.00	%		100.00	%
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	Operation of utility plant	PHILIPPINES		100.00	%		100.00	%
EWP Philippine Holdings Corporation	Holding company	PHILIPPINES		100.00	%		100.00	%
EWP America Inc.	Holding company	USA		100.00	%		100.00	%
EWP Renewable Co.	Holding company	USA		100.00	%		100.00	%
DG Fairhaven Power, LLC	Power generation	USA		100.00	%		100.00	%
DG Kings Plaza Holdings, LLC	Holding company	USA		100.00	%		100.00	%

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

16.

Investments in Subsidiaries, Continued

(1)

Investments in subsidiaries as of March 31, 2014 and December 31, 2013 are as follows, continued:


Subsidiaries	Key operation activities	Location	Percentage of ownership (%)
Subsidiaries	Key operation activities	Location	March 31, 2014			December 31, 2013

DG Kings Plaza, LLC	Power generation	USA		100.00	%		100.00	%
DG Kings Plaza II, LLC	Holding company	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	Resources development	CANADA		96.36	%		96.36	%
PT KEPCO Resources Indonesia	Resources development	INDONESIA		100.00	%		100.00	%
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		60.00	%		60.00	%
Gyeongju Wind Power Co., Ltd.	Power generation	KOREA		70.00	%		70.00	%
KOMIPO America Inc.	Holding company	USA		100.00	%		100.00	%
Boulder Solar Power, LLC	Solar photovoltaic power generation	USA		75.00	%		75.00	%
EWPRC Biomass Holdings, LLC	Holding company	USA		100.00	%		100.00	%
KOSEP USA, INC.	Power generation	USA		100.00	%		100.00	%
PT. EWP Indonesia	Holding company	INDONESIA		100.00	%		100.00	%
KOWEPO America LLC.	Solar photovoltaic power generation	USA		100.00	%		100.00	%
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	%
KOSEP Wind Power, LLC. (*3)	Power generation	USA		—			100.00	%
Mira Power Limited (*4)	Power generation	PAKISTAN		76.00	%		76.00	%
KOSEP Material Co., Ltd.	Power generation	KOREA		77.04	%		77.04	%
Commerce and Industry Energy Co., Ltd.	Power generation	KOREA		59.03	%		59.03	%
KEPCO Singapore Holding Pte., Ltd.	Holding company	SINGAPORE		100.00	%		100.00	%
KOWEPO India Private Limited	Holding company	INDIA		100.00	%		100.00	%
KEPCO KPS Philippines Corp.	Utility plant maintenance and others	PHILIPPINES		100.00	%		100.00	%
KOSPO Chile SpA	Holding company	Chile		100.00	%		100.00	%

(*1)	The percentage of ownership has been increased due to the acquisition of treasury stocks for the three-month period ended March 31, 2014.

(*2)	These subsidiaries are included in the consolidated financial statements as the Company obtains the majority of the voting power through the shareholders’ agreement.

(*3)	KOSEP Wind Power, LLC was merged into KOSEP USA, INC. and excluded from consolidation for the three-month period ended March 31, 2014.

(*4)	As of reporting date, the reporting period end of all subsidiaries ends in December 31, except for Mira Power Limited.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

16.

Investments in Subsidiaries, Continued

(2)

Subsidiaries newly included in or excluded from consolidation for the three-month period ended March 31, 2014 are as follows:

(i)

Subsidiaries excluded from consolidation


Subsidiary		Reason

KOSEP Wind Power, LLC		Megered

(3)

Summary of financial information of consolidated subsidiaries as of and for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won
March 31, 2014
Subsidiaries	Total assets		Total liabilities		Sales		Profit (loss) for the period

Korea Hydro & Nuclear Power Co., Ltd.	￦	47,574,590		26,739,548		2,448,121		609,200
Korea South-East Power Co., Ltd.		8,762,230		4,962,659		1,202,924		179,174
Korea Midland Power Co., Ltd.		6,339,818		3,379,810		1,569,755		51,554
Korea Western Power Co., Ltd.		7,298,879		4,130,034		1,519,573		50,837
Korea Southern Power Co., Ltd.		8,034,001		4,595,954		1,823,061		15,545
Korea East-West Power Co., Ltd.		7,635,476		4,141,059		1,313,355		66,339
KEPCO Engineering & Construction Company, Inc.		770,399		391,548		177,314		13,954
KEPCO Plant Service & Engineering Co., Ltd.		863,208		285,991		219,415		27,165
KEPCO Nuclear Fuel Co., Ltd.		515,619		223,338		72,806		11,831
KEPCO KDN Co.,Co., Ltd.		339,056		106,793		84,945		(2,119	)
Garorim Tidal Power Plant Co., Ltd.		42,467		2,553		—		(327	)
Korea Engineering & Power Services Co., Ltd.		12,739		6,629		5,150		(1,663	)
KEPCO International HongKong Ltd.		203,902		—		—		1,774
KEPCO International Philippines Inc.		103,163		864		—		(6	)
KEPCO Gansu International Ltd.		15,888		492		—		(1	)
KEPCO Philippines Holdings Inc.		114,904		10		—		(13	)
KEPCO Philippines Corporation		13,974		127		—		(274	)
KEPCO Ilijan Corporation		741,344		84,094		33,123		21,091
KEPCO Lebanon SARL		6,910		9,655		—		(131	)
KEPCO Neimenggu International Ltd.		183,968		—		—		(6	)
KEPCO Shanxi International Ltd.		497,969		230,376		—		(937	)
KOMIPO Global Pte Ltd.		141,994		31		—		2,046
KEPCO Canada Energy Ltd.		91,873		11,996		—		(33	)
KEPCO Netherlands B.V.		212,274		25		—		(33	)
KOREA Imouraren Uranium Investment Corp.		250,596		232		—		(12	)
KEPCO Australia Pty., Ltd.		592,059		1,815		863		94
KOSEP Australia Pty., Ltd.		20,503		1,106		1,489		809
KOMIPO Australia Pty., Ltd.		20,505		1,117		1,489		808
KOWEPO Australia Pty., Ltd.		20,643		1,104		1,489		809
KOSPO Australia Pty., Ltd.		20,711		1,105		1,489		809
KEPCO Middle East Holding Company		110,262		102,030		—		1,024
Qatrana Electric Power Company		533,731		446,412		4,338		6,032
KHNP Canada Energy Ltd.		49,315		32		—		(7	)
KEPCO Bylong Australia Pty., Ltd.		218,261		173,408		—		2,922
Korea Waterbury Uranium Limited Partnership		22,514		24		—		(11	)
KEPCO Canada Uranium Investment Limited Partnership		104,279		15		—		(5	)
Korea Electric Power Nigeria Ltd.		442		165		1,106		(128	)
KEPCO Holdings de Mexico		10		12		—		(2	)
KST Electric Power Company		530,092		508,092		3,923		(83	)
KEPCO Energy Service Company		717		184		1,130		243
KEPCO Netherlands S3 B.V.		60,007		35		—		(27	)
PT. KOMIPO Pembangkitan Jawa Bali		18,181		5,891		8,009		5,878
PT. Cirebon Power Service		1,414		526		1,520		52
KOWEPO International Corporation		1,904		31		—		—

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

16.

Investments in Subsidiaries, Continued

(3)

Summary of financial information of consolidated subsidiaries as of and for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
March 31, 2014
Subsidiaries	Total assets		Total liabilities		Sales		Profit (loss) for the period

KOSPO Jordan, LLC.	￦	17,129		9,928		7,765		989
EWP Phillippines Corporation		7,122		269		—		(114	)
EWP Philippine Holdings Corporation		212		1		—		—
EWP America Inc. (*)		104,393		78,215		12,289		(1,250	)
KNF Canada Energy Limited		2,265		25		—		(12	)
PT KEPCO Resources Indonesia		1,562		—		1		(67	)
EWP Barbados 1 SRL		290,381		237		668		2,544
Gyeonggi Green Energy Co., Ltd.		337,479		265,787		25,949		(3,094	)
PT. Tanggamus Electric Power		17,122		379		—		(1,083	)
Gyeongju Wind Power Co., Ltd.		47,984		31,763		1,789		467
KOMIPO America Inc.		7,701		6		—		—
Boulder Solar Power, LLC.		6,697		6		—		(111	)
KOSEP USA, INC.		32,120		626		301		(113	)
PT. EWP Indonesia		703		14		—		(82	)
KOWEPO America, LLC.		5,855		31		—		(289	)
KEPCO Netherlands J3 B.V.		103,590		57		—		(23	)
Korea Offshore Wind Power Co., Ltd.		12,529		309		—		(680	)
Global One Pioneer B.V.		38		13		—		(1	)
Global Energy Pioneer B.V.		40		13		—		(1	)
Mira Power Limited		14,322		82		—		(318	)
KOSEP Material Co., Ltd		12,861		81		—		(288	)
Commerce and Industry Energy Co., Ltd.		104,491		87,015		6,779		296
KEPCO Singapore Holding Pte., Ltd.		464		—		—		(6	)
KOWEPO India Private Limited		1,292		31		—		(161	)
KEPCO KPS Philippines Corp.		5,230		3,870		1,540		370
KOSPO Chile SpA		4,044		4,234		—		(189	)

(*)

Financial information of EWP America Inc. includes that of nine other subsidiaries, EWP Renewable Co., Ltd., DG Fairhaven Power, LLC., DG Kings Plaza Holdings, LLC., DG Kings Plaza, LLC., DG Whitefield, LLC., Springfield Power, LLC., California Power Holdings, LLC., EWPRC Biomass Holdings, LLC. and DG Kings Plaza II, LLC.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

16.

Investments in Subsidiaries, Continued

(3)

Summary of financial information of consolidated subsidiaries as of and for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Subsidiaries	Total assets		Total liabilities		Sales		Profit (loss) for the period

Korea Hydro & Nuclear Power Co., Ltd.	￦	46,717,706		26,482,646		6,378,280		(180,160	)
Korea South-East Power Co., Ltd.		8,294,384		4,634,288		4,157,175		116,001
Korea Midland Power Co., Ltd.		6,189,836		3,266,269		5,658,612		40,815
Korea Western Power Co., Ltd.		7,160,956		4,010,759		5,762,386		106,829
Korea Southern Power Co., Ltd.		7,360,191		3,906,329		7,120,621		102,670
Korea East-West Power Co., Ltd.		7,449,723		4,014,477		5,368,299		27,021
KEPCO Engineering & Construction Company, Inc.		760,504		378,454		755,484		34,407
KEPCO Plant Service & Engineering Co., Ltd.		839,067		217,404		1,121,717		151,524
KEPCO Nuclear Fuel Co., Ltd.		509,057		221,023		233,638		15,401
KEPCO KDN Co., Ltd.		354,577		115,604		372,830		8,561
Garorim Tidal Power Plant Co., Ltd.		43,592		3,350		—		(2,502	)
Korea Power Engineering & Power Services Co., Ltd.		15,555		4,781		29,066		5,764
KEPCO International HongKong Ltd.		243,898		—		—		12,746
KEPCO International Philippines Inc.		101,832		819		—		705
KEPCO Gansu International Ltd.		15,689		486		—		(10	)
KEPCO Philippines Holdings Inc.		116,825		13		—		2,861
KEPCO Philippines Corporation		14,226		150		—		493
KEPCO Ilijan Corporation		705,425		76,329		140,782		71,194
KEPCO Lebanon SARL		6,836		9,417		—		(895	)
KEPCO Neimenggu International Ltd.		177,649		—		—		1,255
KEPCO Shanxi International Ltd.		491,681		226,543		—		(4,526	)
KOMIPO Global Pte Ltd.		131,874		30		—		14,423
KEPCO Canada Energy Ltd.		75,197		12,358		—		(164	)
KEPCO Netherlands B.V.		209,885		21		—		2,844
KOREA Imouraren Uranium Investment Corp.		248,300		161		—		(45	)
KEPCO Australia Pty., Ltd.		498,742		2,173		4,979		162,325
KOSEP Australia Pty., Ltd.		18,592		931		4,728		1,578
KOMIPO Australia Pty., Ltd.		18,190		537		4,728		1,574
KOWEPO Australia Pty., Ltd.		18,724		929		4,728		1,577
KOSPO Australia Pty., Ltd.		18,789		929		4,728		1,578
KEPCO Middle East Holding Company		107,802		100,742		—		4,190
Qatrana Electric Power Company		516,637		436,210		17,471		20,850
KHNP Canada Energy Ltd.		50,314		23		—		(51	)
KEPCO Bylong Australia Pty., Ltd.		145,704		169,014		—		(136,027	)
Korea Waterbury Uranium Limited Partnership		20,380		21		—		(70	)
KEPCO Canada Uranium Investment Corp. Partnership		81,945		25		—		(46	)
Korea Electric Power Nigeria Ltd.		1,859		1,449		3,602		427
KEPCO Holdings de Mexico		10		9		—		(14	)
KST Electric Power Company		498,705		483,339		456		4,616
KEPCO Energy Service Company		835		437		3,733		407
KEPCO Netherlands S3 B.V.		514		18		—		(64	)
PT. KOMIPO Pembangkitan Jawa Bali		14,884		5,548		20,162		6,143
PT. Cirebon Power Service		1,646		642		7,143		406
KOWEPO International Corporation		1,897		31		—		—
KOSPO Jordan, LLC.		15,938		9,790		7,817		2,389
EWP Philippines Corporation		7,067		290		212		(914	)
EWP Philippine Holdings Corporation		211		1		—		(2	)
EWP America Inc. (*)		104,186		77,105		53,087		(3,184	)
KNF Canada Energy Limited		2,254		19		—		(71	)
PT KEPCO Resources Indonesia		1,609		—		—		(84	)
EWP Barbados 1 SRL		284,111		145		2,738		(21,771	)
Gyeonggi Green Energy Co., Ltd.		338,394		263,608		26,944		(161	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

16.

Investments in Subsidiaries, Continued

(3)

Summary of financial information of consolidated subsidiaries as of and for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Subsidiaries	Total assets		Total liabilities		Sales		Profit (loss) for the period

PT. Tanggamus Electric Power		9,784		626		—		(3,640	)
Gyeongju Wind Power Co., Ltd.		49,264		32,580		7,440		2,507
KOMIPO America Inc.		7,604		6		—		—
Boulder Solar Power, LLC.		7,639		6		—		(2,131	)
KOSEP USA, INC.		31,121		233		—		(757	)
PT. EWP Indonesia		771		14		—		(334	)
KOWEPO America, LLC.		6,057		21		—		(1,295	)
KEPCO Netherlands J3 B.V.		102,295		31		—		(86	)
Korea Offshore Wind Power Co., Ltd.		4,052		1,598		—		(2,436	)
Global One Pioneer B.V.		46		19		—		(44	)
Global Energy Pioneer B.V.		47		19		—		(42	)
KOSEP Wind Power, LLC.		1,219		688		2,053		332
Mira Power Limited		13,607		244		—		(742	)
KOSEP Material Co., Ltd		13,349		280		—		(431	)
Commerce and Industry Energy Co., Ltd.		104,739		87,628		13,450		(2,959	)
KEPCO Singapore Holding Pte., Ltd.		—		11		—		(11	)
KOWEPO India Private Limited		1,370		4		—		(377	)
KEPCO KPS Philippines Corp.		4,396		3,409		5,923		659
KOSPO Chile SpA		4,180		4,180		—		—

(*)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

16.

Investments in Subsidiaries, Continued

(4)

Significant restrictions on its abilities to subsidiaries are as follows:


Company		Nature and extent of any significant restrictions
Gyeonggi Green Energy Co., Ltd.		Acquisition or disposal of assets more than ￦35 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.

(5)

Details of non-controlling interest prior to inter-group eliminations as of and for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won
March 31, 2014
Description	KEPCO Ilijan Corporation			KEPCO Plant Service & Engineering Co., Ltd.			KEPCO Engineering & Construction Company, Inc.			Garorim Tidal Power Plant Co., Ltd.			Others			Total

Percentage of ownership		49.00	%		37.00	%		28.84	%		51.00	%

Current assets	￦	286,046			453,072			476,430			5,642			542,162			1,763,352

Non-current assets		455,298			410,136			293,969			36,825			1,638,313			2,834,541

Current liabilities		(50,223	)		(240,873	)		(346,935	)		(2,475	)		(259,919	)		(900,425	)

Non-current liabilities		(33,871	)		(45,119	)		(44,614	)		(78	)		(1,320,106	)		(1,443,788	)

Net assets		657,250			577,216			378,850			39,914			600,450			2,253,680
Book value of non- controlling interest		322,053			213,570			109,261			20,356			604,865			1,270,105
Sales		33,123			219,415			177,314			—			128,820			558,672
Profit (loss) for the period		21,091			27,165			13,954			(327	)		18,266			80,149
Profit (loss) for the period attributable to non-controlling interest		10,334			10,051			4,024			(167	)		2,348			26,590
Cash flows from operating activities		46,305			16,989			5,347			(1,005	)		71,619			139,255
Cash flows from investing activities		(3,415	)		21,630			13,561			(242	)		(8,087	)		23,447
Cash flows from financing activities before dividends to non-controlling interest		—			—			(3,795	)		—			(26,063	)		(29,858	)
Dividends to non- controlling interest		—			(25,308	)		(4,905	)		—			(7,540	)		(37,753	)
Effect of exchange rate fluctuation		2,162			(220	)		(99	)		(27	)		1,103			2,919
Net increase (decrease) of cash and cash equivalents		45,052			13,091			10,109			(1,274	)		31,032			98,010

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

16.

Investments in Subsidiaries, Continued

(5)

Details of non-controlling interest prior to inter-group eliminations as of and for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Description	KEPCO Ilijan Corporation			KEPCO Plant Service & Engineering Co., Ltd.			Dongducheon Dream Power Co., Ltd.			KEPCO Engineering & Construction Company, Inc.			Garorim Tidal Power Plant Co., Ltd.			Others			Total

Percentage of ownership		49.00	%		37.00	%		51.00	%		28.95	%		51.00	%

Current assets	￦	251,147			438,272			—			478,851			7,002			476,286			1,651,558

Non-current assets		454,278			400,794			—			281,653			36,591			1,644,436			2,817,752

Current liabilities		(44,046	)		(182,871	)		—			(336,046	)		(3,272	)		(243,826	)		(810,061	)

Non-current liabilities		(32,282	)		(34,533	)		—			(42,407	)		(78	)		(1,296,242	)		(1,405,542	)

Net assets		629,097			621,662			—			382,051			40,243			580,654			2,253,707
Book value of non- controlling interest		308,257			230,015			—			110,603			20,523			599,434			1,268,832

Sales		140,782			1,121,717			—			755,484			—			361,692			2,379,675
Profit (loss) for the period		71,194			151,524			—			34,407			(2,502	)		55,763			310,386
Profit (loss) for the period attributable to non-controlling interest		34,885			45,457			—			8,650			(1,276	)		33,989			121,705
Cash flows from operating activities		57,785			40,805			—			11,367			(665	)		(4,871	)		104,421
Cash flows from investing activities		(2,524	)		(21,412	)		(20,006	)		4,854			(186	)		(126,946	)		(166,220	)
Cash flows from financing activities before dividends to non-controlling interest		(22,735	)		2,657			—			1,716			3,475			189,313			174,426
Dividends to non- controlling interest		—			(19,440	)		—			(18,564	)		—			(20,037	)		(58,041	)
Effect of exchange rate fluctuation		(1,953	)		(220	)		—			(33	)		—			(2,529	)		(4,735	)
Net increase (decrease) of cash and cash equivalents		30,573			2,390			(20,006	)		(660	)		2,624			34,930			49,851

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

16.

Investments in Subsidiaries, Continued

(6)

Business combination

On April 29, 2013, the Company has obtained control of Commerce and Industry Energy Co., Ltd. which engages in the integrated commerce and industry energy business, by acquiring an additional 29.5% of its equity shares. As a result, the Company’s ownership for Commerce and Industry Energy Co., Ltd. has increased from 29.5% to 59.0%. The acquisition was accounted for as follows:


In millions of won
	Amount

I. Fair value of consideration transferred
Carrying value of the equity method investees previously owned	￦	5,829
Fair value adjustment (*1)		(1,022	)
Cash and cash equivalents paid		2
Fair value of related commitments (*2)		4,806


		9,615


*II. Fair value of non-controlling interest (3)**		4,882


		14,497


III. Recognized amounts of identifiable assets acquired and liabilities assumed

<Assets>
Cash and cash equivalents		7,292
Trade and other receivables		1,631
Inventories		515
Property people & equipment		82,733
Other assets		3,460
<Liabilities>
Trade and other payables		(1,777	)
Borrowings		(81,752	)
Other liabilities		(187	)


Fair value of net assets		11,915


IV. Goodwill	￦	2,582

(*1)	Prior to business combination, 29.5% of the Company’s equity shares re-measured to fair value. As a result, the differences incurred from the re-measurement amounted to ￦1,022 million is recognized as a loss on the disposal of its interest in associates and joint ventures.

(*2)

The Company guarantees a certain rate of return on investment to Hana Power Co., Ltd. and one other investor, the financial investors of Commerce and Industry Energy Co., Ltd., holding 39.3% of the 2,260,000 shares of equity in Commerce and Industry Energy Co., Ltd. The investors may request the Company to purchase their investment shares after 58 months have elapsed from the date of investment. The Company has included the fair value valuation of the purchase commitment in consideration transferred.

(*3)	Non-controlling interest is measured by proportionate share of non-controlling of the identifiable net assets.

If the Company had acquired the equity shares of Commerce and Industry Energy Co., Ltd. on January 1, 2013, the sales and loss for the prior year period would have been ￦54,044,024 million and ￦182,218 million, respectively. From the date of the acquisition, the subsidiary incurred sales and loss for the period ￦13,450 million and ￦2,959 million, respectively.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

16.

Investments in Subsidiaries, Continued

The net cash outflows from the business combination are as follows:


In millions of won
Consideration paid in cash	2
Less : acquired cash and cash equivalents	(7,292	)

	(7,290	)

(7)

Goodwill

(i)

Details of goodwill as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won
	March 31, 2014		December 31, 2013

Acquisition cost	￦	2,582		2,582
Accumulated impairment		—		—


Carrying book value	￦	2,582		2,582

(ii)

Changes in goodwill for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won
	March 31, 2014		December 31, 2013

Beginning balance	￦	2,582		—
Changes		—		—


Newly recognized		—		2,582

Ending balance	￦	2,582		2,582

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures

(1)

Investments in associates and joint ventures as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won
March 31, 2014
Investees	Key operation activities	Location	Percentage of ownership			Acquisition cost		Book value

<Associates>
Daegu Green Power Co., Ltd.	Power generation	KOREA		48	%	￦	76,193		73,883
Korea Gas Corporation	Importing and wholesaling LNG	KOREA		20	%		94,500		2,019,889
Korea Electric Power Industrial Development Co., Ltd.	Electricity metering	KOREA		29	%		4,727		20,500
YTN Co., Ltd.	Broadcasting	KOREA		21	%		59,000		36,352
Cheongna Energy Co., Ltd.	Generating and distributing vapor and hot/cold water	KOREA		44	%		43,900		29,060
Gangwon Wind Power Co., Ltd. (*1)	Wind power generation	KOREA		15	%		5,725		11,315
Hyundai Green Power Co., Ltd.	Power generation	KOREA		29	%		88,885		105,236
Korea Power Exchange (*5)	Management of power market	KOREA		100	%		127,839		196,104
AMEC Partners Korea (*2)	Resources development	KOREA		19	%		707		208
Hyundai Energy Co., Ltd. (*8)	Power generation	KOREA		29	%		71,070		42,042
Ecollite Co., Ltd.	Artificial light-weight aggregate	KOREA		36	%		1,516		—
Taebaek Wind Power Co., Ltd.	Power generation	KOREA		25	%		3,810		4,998
Alternergy Philippine Investments Corporation	Power generation	PHILIPPINES		50	%		3,881		1,497
Muju Wind Power Co., Ltd.	Power generation	KOREA		25	%		2,850		2,708
Pyeongchang Wind Power Co., Ltd.	Power generation	KOREA		25	%		638		587
Daeryun Power Co., Ltd.	Power generation	KOREA		20	%		25,477		24,569
JinanJangsu Wind Power Co., Ltd.	Power generation	KOREA		25	%		100		77
Changjuk Wind Power Co., Ltd.	Power generation	KOREA		30	%		3,801		5,674
KNH Solar Co., Ltd.	Power generation	KOREA		27	%		1,296		1,326
SPC Power Corporation	Power generation	PHILIPPINES		38	%		20,635		46,322
Gemeng International Energy Co., Ltd.	Power generation	CHINA		34	%		413,153		609,016
PT. Cirebon Electric Power	Power generation	INDONESIA		28	%		39,217		36,621
KNOC Nigerian East Oil Co., Ltd. (*3)	Resources development	NIGERIA		15	%		12		—
KNOC Nigerian West Oil Co., Ltd. (*3)	Resources development	NIGERIA		15	%		12		—
Dolphin Property Limited (*3)	Rental company	NIGERIA		15	%		12		—
E-Power S.A.	Operation of utility plant and sales of electricity	HAITI		30	%		3,779		5,771
PT Wampu Electric Power	Power generation	INDONESIA		46	%		18,935		14,387
PT. Bayan Resources TBK	Resources development	INDONESIA		20	%		615,860		573,510
S-Power Co., Ltd.	Power generation	KOREA		40	%		108,000		107,138
Pioneer Gas Power Limited (*7)	Power generation	INDIA		40	%		48,709		44,814
Eurasia Energy Holdings	Power generation and resources development	RUSSIA		40	%		461		—
Xe-Pian Xe-Namnoy Power Co., Ltd.	Power generation	LAOS		25	%		18,928		18,535
Busan Solar Co., Ltd. (*2)	Power generation	KOREA		20	%		793		585
Hadong Mineral Fiber Co., Ltd.	Recycling fly ashes	KOREA		25	%		50		3
Green Biomass Co., Ltd.	Power generation	KOREA		34	%		714		76
Gumi-Ochang Photovoltaic Power Co., Ltd. (*1)	Power generation	KOREA		10	%		288		359
Chungbuk Photovoltaic Power Co., Ltd. (*1)	Power generation	KOREA		10	%		166		180
Cheonan Photovoltaic Power Co., Ltd. (*1)	Power generation	KOREA		10	%		122		132
PT. Mutiara Jawa	Manufacturing and operating floating coal terminal	INDONESIA		29	%		2,978		1,908
Hyundai Asan Solar Power Co., Ltd.(*1)	Power generation	KOREA		10	%		471		395
Heang Bok Do Si Photovoltaic Power Co., Ltd.	Power generation	KOREA		28	%		92		90
Jeonnam Solar Co., Ltd.(*1)	Power generation	KOREA		10	%		700		696

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(1)

Investments in associates and joint ventures as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won
March 31, 2014
Investees	Key operation activities	Location	Percentage of ownership			Acquisition cost		Book value

DS POWER Co., Ltd.(*1)	Power generation	KOREA		11	%	￦	17,900		17,865
D Solarenergy Co., Ltd(*1)	Power generation	KOREA		10	%		400		434
Dongducheon Dream Power Co., Ltd.	Power generation	KOREA		44	%		140,079		131,708
KS Solar Corp. Ltd.(*2)	Power generation	KOREA		19	%		637		474
KOSCON Photovoltaic Co., Ltd(*1)	Power generation	KOREA		19	%		245		351
Yeongwol Energy Station Co., Ltd(*1)	Power generation	KOREA		13	%		1,862		1,672
Yeonan Photovoltaic Co., Ltd(*1)	Power generation	KOREA		19	%		157		122
Q1 Solar Co., Ltd	Power generation	KOREA		28	%		1,005		1,006
Jinbhuvish Power Generation (*1)	Power generation	INDIA		5	%		9,000		8,632
Best Solar Energy Co., Ltd.	Power generation	KOREA		23	%		1,242		962
Seokcheon Solar Power Co., Ltd.(*1)	Power generation	KOREA		10	%		970		1,063
SE Green Energy Co., Ltd.	Power generation support	KOREA		48	%		3,821		3,686
Daegu Photovoltaic Co., Ltd.	Power generation	KOREA		29	%		1,230		1,302
Jeongam Wind Power Co., Ltd.	Power generation	KOREA		40	%		800		192
Korea Power Engineering Service Co., Ltd.	Construction and service	KOREA		29	%		290		727
Golden Route J Solar Power Co., Ltd. (*1)	Photovoltaic power generation	KOREA		10	%		82		77


						￦	2,089,722		4,206,836


<Joint ventures>
KEPCO-Uhde Inc. (*6)	Power generation	KOREA		66	%		11,355		9,392
Eco Biomass Energy Sdn. Bhd. (*6)	Power generation	MALAYSIA		62	%		9,661		—
Datang Chaoyang Renewable Power Co., Ltd.	Power generation	CHINA		40	%		27,660		27,458
Shuweihat Asia Power Investment B.V.	Holding company	NETHERLANDS		49	%		60,083		23,355
Shuweihat Asia Operation & Maintenance Company (*6)	Maintenance of utility plant	CAYMAN		55	%		30		29
Waterbury Lake Uranium L.P.	Resources development	CANADA		40	%		25,839		22,487
ASM-BG Investicii AD	Power generation	BULGARIA		50	%		16,101		20,505
RES Technology AD	Power generation	BULGARIA		50	%		15,595		16,114
KV Holdings, Inc.	Power generation	PHILIPPINES		40	%		2,103		1,849
KEPCO SPC Power Corporation (*6)	Construction and operation of utility plant	PHILIPPINES		75	%		94,579		148,993
Canada Korea Uranium Limited Partnership (*4)	Resources development	CANADA		13	%		5,404		—
KEPCO Energy Resource Nigeria Limited	Holding company	NIGERIA		30	%		8,463		—
Gansu Datang Yumen Wind Power Co., Ltd.	Power generation	CHINA		40	%		16,621		18,338
Datang Chifeng Renewable Power Co., Ltd.	Power generation	CHINA		40	%		121,928		166,458
Datang KEPCO Chaoyang Renewable Power Co., Ltd.	Power generation	CHINA		40	%		10,858		10,470
Rabigh Electricity Company	Construction of utility plant and sales of electricity	SAUDI ARABIA		40	%		109,743		—
Rabigh Operation & Maintenance Company	Maintenance of utility plant	SAUDI ARABIA		40	%		70		4,894
Jamaica Public Service Company Limited	Power generation	JAMAICA		40	%		301,910		275,824
KW Nuclear Components Co., Ltd.	R&D	KOREA		45	%		833		1,814
Busan shinho Solar power Co., Ltd.	Power generation	KOREA		25	%		2,100		3,060
GS Donghae Electric Power Co., Ltd. (Formerly, STX Electric Power Co., Ltd.)	Power generation	KOREA		49	%		225,400		222,505
YEONGAM Wind Power Co., Ltd.	Power generation	KOREA		49	%		11,584		11,513

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(1)

Investments in associates and joint ventures as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won
March 31, 2014
Investees	Key operation activities	Location	Percentage of ownership			Acquisition cost		Book value

Global Trade Of Power System Co., Ltd.	Exporting products and technology of small or medium sized business by proxy	KOREA		29	%		290		238
Expressway Solar-light Power Generation Co., Ltd.	Power generation	KOREA		29	%		3,132		3,197
KODE NOVUS 1 LLC.	Power generation	USA		50	%		19,213		14,082
KODE NOVUS 2 LLC.	Power generation	USA		49	%		12,498		9,155
Daejung Offshore Wind Power Co., Ltd.	Power generation	KOREA		50	%		4,990		4,002
Arman Asia Electric Power Company (*6)	Power generation	JORDAN		60	%		104,721		115,119
KEPCO-ALSTOM Power Electronics Systems, Inc. (*6)	R&D	KOREA		51	%		5,629		4,454
Dongbu Power Dangjin Corporation	Power generation	KOREA		40	%		40,000		38,685
Honam Wind Power Co., Ltd.	Power generation	KOREA		29	%		3,600		2,639
Nepal Water & Energy Development Company Pty Ltid.	Power generation	NEPAL		44	%		10,550		10,271
Kelar S.A (*6)	Power generation	CHILE		65	%		4,180		4,044
PT. Tanjung Power Indonesia	Power generation	INDONESIA		35	%		388		359
Incheon New Power Co., Ltd.	Power generation	KOREA		29	%		461		436
Seokmun Energy Co., Ltd.	Integrated energy business	KOREA		34	%		680		325

							1,288,252		1,192,064


						￦	3,377,974		5,398,900

(*1)	The Company can exercise significant influence by virtue of its contractual right to appoint directors to the board of directors of the entity, and by strict decision criteria of the Company’s financial and operating policy of the board of directors.

(*2)	The Company can exercise significant influence by virtue of its contractual right to appoint a director to the board of directors of the entity.

(*3)	The Company can exercise significant influence by virtue of its contractual right to appoint one out of four members of the steering committee of the entity. Moreover, the Company has significant financial transactions with the associate which can affect its influence on the entity.

(*4)	The Company has joint control on the associates by virtue of its contractual right to appoint directors to the board of directors of the entity, and by strict decision criteria of the Company’s financial and operating policy of the board of directors.

(*5)

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

(*6)	According to the shareholder agreement, all critical financial and operating decisions must be agreed to by all ownership parties. For these reasons, the entities are classified as joint ventures.

(*7)	As of reporting date, the reporting period end of all associates and joint ventures ends in December 31, except for Pioneer Gas Power Limited whose reporting period ends on March 31.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(1)

Investments in associates and joint ventures as of March 31, 2014 and December 31, 2013 are as follows, continued:

(*8)

As of March 31, 2014, 16% of ownership of Hyundai Energy Co., Ltd. is held by NH Power ll Co., Ltd. and NH Bank . According to the shareholders’ agreement reached on March 2011, not only does the Company have a call option to acquire the investment in Hyundai Energy Co., Ltd. from NH Power ll Co., Ltd. and NH Bank with a certain rate of return, NH Power ll Co., Ltd. and NH Bank also have put options to dispose of their investment to the Company. In connection with this agreement, the Company applied the equity method on the investment in Hyundai Energy Co., Ltd. with 45% of ownership.


In millions of won
December 31, 2013
Investees	Key operation activities	Location	Percentage of ownership			Acquisition cost		Book value

<Associates>
Daegu Green Power Co., Ltd.	Power generation	KOREA		48	%	￦	76,193		74,878
Korea Gas Corporation	Importing and wholesaling LNG	KOREA		20	%		94,500		1,926,800
Korea Electric Power Industrial Development Co., Ltd.	Electricity metering	KOREA		29	%		4,727		22,450
YTN Co., Ltd.	Broadcasting	KOREA		21	%		59,000		38,426
Cheongna Energy Co., Ltd.	Generating and distributing vapor and hot/cold water	KOREA		44	%		43,900		28,114
Gangwon Wind Power Co., Ltd. (*1)	Wind power generation	KOREA		15	%		5,725		13,185
Hyundai Green Power Co., Ltd.	Power generation	KOREA		29	%		88,885		110,157
Korea Power Exchange (*5)	Management of power market	KOREA		100	%		127,839		189,544
AMEC Partners Korea (*2)	Resources development	KOREA		19	%		707		189
Hyundai Energy Co., Ltd. (*8)	Power generation	KOREA		29	%		71,070		43,386
Ecollite Co., Ltd.	Artificial light-weight aggregate	KOREA		36	%		1,516		—
Taebaek Wind Power Co., Ltd.	Power generation	KOREA		25	%		3,810		5,553
Alternergy Philippine Investments Corporation	Power generation	PHILIPPINES		50	%		3,881		1,500
Muju Wind Power Co., Ltd.	Power generation	KOREA		25	%		2,850		2,707
Pyeongchang Wind Power Co., Ltd.	Power generation	KOREA		25	%		638		600
Daeryun Power Co., Ltd.	Power generation	KOREA		20	%		25,477		24,599
JinanJangsu Wind Power Co., Ltd.	Power generation	KOREA		25	%		100		77
Changjuk Wind Power Co., Ltd.	Power generation	KOREA		30	%		3,801		6,344
KNH Solar Co., Ltd.	Power generation	KOREA		27	%		1,296		1,372
SPC Power Corporation	Power generation	PHILIPPINES		38	%		20,635		47,661
Gemeng International Energy Co., Ltd.	Power generation	CHINA		34	%		413,153		608,674
PT. Cirebon Electric Power	Power generation	INDONESIA		28	%		39,217		32,826
KNOC Nigerian East Oil Co., Ltd. (*3)	Resources development	NIGERIA		15	%		12		—
KNOC Nigerian West Oil Co., Ltd. (*3)	Resources development	NIGERIA		15	%		12		—
Dolphin Property Limited (*3)	Rental company	NIGERIA		15	%		12		—
E-Power S.A.	Operation of utility plant and sales of electricity	HAITI		30	%		3,779		5,284
PT Wampu Electric Power	Power generation	INDONESIA		46	%		18,935		15,121
PT. Bayan Resources TBK	Resources development	INDONESIA		20	%		615,860		579,534
S-Power Co., Ltd.	Power generation	KOREA		40	%		108,000		107,264
Pioneer Gas Power Limited (*7)	Power generation	INDIA		40	%		48,709		43,666
Eurasia Energy Holdings	Power generation and resources development	RUSSIA		40	%		461		—
Xe-Pian Xe-Namnoy Power Co., Ltd.	Power generation	LAOS		25	%		18,928		18,058
Busan Solar Co., Ltd. (*2)	Power generation	KOREA		20	%		793		741
Hadong Mineral Fiber Co., Ltd.	Recycling fly ashes	KOREA		25	%		50		3
Green Biomass Co., Ltd.	Power generation	KOREA		34	%		714		171
Gumi-ochang Photovoltaic Power Co., Ltd. (*1)	Power generation	KOREA		10	%		288		389
Chungbuk Photovoltaic Power Co., Ltd. (*1)	Power generation	KOREA		10	%		166		184
Cheonan Photovoltaic Power Co., Ltd. (*1)	Power generation	KOREA		10	%		122		148

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(1)

Investments in associates and joint ventures as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Investees	Key operation activities	Location	Percentage of ownership			Acquisition cost		Book value

PT. Mutiara Jawa	Manufacturing and operating floating coal terminal	INDONESIA		29	%	￦	2,978		1,666
Hyundai Asan Solar Power Co., Ltd.(*1)	Power generation	KOREA		10	%		471		462
Heang Bok Do Si Photovoltaic Power Co., Ltd.	Power generation	KOREA		28	%		92		91
Jeonnam Solar Co., Ltd. (*1)	Power generation	KOREA		10	%		700		696
DS POWER Co., Ltd. (*1)	Power generation	KOREA		11	%		17,900		17,900
D Solarenergy Co., Ltd(*1)	Power generation	KOREA		10	%		400		364
Dongducheon Dream Power Co., Ltd.	Power generation	KOREA		44	%		140,079		134,398
KS Solar Corp. Ltd.(*2)	Power generation	KOREA		19	%		637		537
KOSCON Photovoltaic Co., Ltd(*1)	Power generation	KOREA		19	%		245		315
Yeongwol Energy Station Co., Ltd(*1)	Power generation	KOREA		13	%		1,862		908
Yeonan Photovoltaic Co., Ltd(*1)	Power generation	KOREA		19	%		157		123
Q1 Solar Co., Ltd	Power generation	KOREA		28	%		1,005		983
Jinbhuvish Power Generation (*1)	Power generation	INDIA		5	%		9,000		8,495
Best Solar Energy Co., Ltd.	Power generation	KOREA		23	%		1,242		898
Seokcheon Solar Power Co., Ltd.(*1)	Power generation	KOREA		10	%		970		1,046
SE Green Energy Co., Ltd.	Power generation support	KOREA		48	%		3,821		3,745
Daegu Photovoltaic Co., Ltd.	Power generation	KOREA		29	%		1,230		1,334
Jeongam Wind Power Co., Ltd.	Power generation	KOREA		40	%		800		324
Korea Power Engineering Service Co., Ltd.	Construction and service	KOREA		29	%		290		585
Golden Route J Solar Power Co., Ltd. (*1)	Photovoltaic power generation	KOREA		10	%		82		99


							2,089,722		4,124,574


<Joint ventures>
KEPCO-Uhde Inc. (*6)	Power generation	KOREA		66	%		11,355		9,537
Eco Biomass Energy Sdn. Bhd. (*6)	Power generation	MALAYSIA		62	%		9,661		—
Datang Chaoyang Renewable Power Co., Ltd.	Power generation	CHINA		40	%		27,660		28,161
Shuweihat Asia Power Investment B.V.	Holding company	NETHERLANDS		49	%		507		64
Shuweihat Asia Operation & Maintenance Company (*6)	Maintenance of utility plant	CAYMAN		55	%		30		29
Waterbury Lake Uranium L.P.	Power generation	CANADA		40	%		25,839		23,042
ASM-BG Investicii AD	Power generation	BULGARIA		50	%		16,101		20,088
RES Technology AD	Power generation	BULGARIA		50	%		15,595		16,045
KV Holdings, Inc.	Power generation	PHILIPPINES		40	%		2,103		1,842
KEPCO SPC Power Corporation (*6)	Construction and operation of utility plant	PHILIPPINES		75	%		94,579		143,294
Canada Korea Uranium Limited Partnership (*4)	Resources development	CANADA		13	%		5,404		—
KEPCO Energy Resource Nigeria Limited	Holding company	NIGERIA		30	%		8,463		2,202
Gansu Datang Yumen Wind Power Co., Ltd.	Power generation	CHINA		40	%		16,621		19,237
Datang Chifeng Renewable Power Co., Ltd.	Power generation	CHINA		40	%		121,928		166,330
Datang KEPCO Chaoyang Renewable Power Co., Ltd.	Power generation	CHINA		40	%		10,858		10,604
Rabigh Electricity Company	Sales of electricity	SAUDI ARABIA		40	%		109,743		—
Rabigh Operation & Maintenance Company	Maintenance of utility plant	SAUDI ARABIA		40	%		70		4,082

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(1)

Investments in associates and joint ventures as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Investees	Key operation activities	Location	Percentage of ownership			Acquisition cost		Book value

Jamaica Public Service Company Limited	Power generation	JAMAICA		40	%		301,910		268,022
KW Nuclear Components Co., Ltd.	R&D	KOREA		45	%		833		2,476
Busan shinho Solar power Co., Ltd.	Power generation	KOREA		25	%		2,100		2,871
GS Donghae Electric Power Co., Ltd. (Formerly, STX Electric Power Co., Ltd.)	Power generation	KOREA		49	%		176,400		173,915
YEONGAM Wind Power Co., Ltd.	Power generation	KOREA		49	%	￦	11,584		11,424
Global Trade Of Power System Co., Ltd.	Exporting products and technology of small or medium business by proxy	KOREA		29	%		290		249
Expressway Solar-light Power Generation Co., Ltd	Power generation	KOREA		29	%		3,132		1,863
KODE NOVUS 1 LLC.	Power generation	USA		50	%		19,213		14,237
KODE NOVUS 2 LLC.	Power generation	USA		49	%		12,498		9,510
Daejung Offshore Wind Power Co., Ltd.	Power generation	KOREA		50	%		4,990		4,135
Arman Asia Electric Power Company (*6)	Power generation	JORDAN		60	%		104,721		111,315
KEPCO-ALSTOM Power Electronics Systems, Inc. (*6)	R&D	KOREA		51	%		5,629		4,758
Dongbu Power Dangjin Corporation	Power generation	KOREA		40	%		40,000		39,102
Honam Wind Power Co., Ltd.	Power generation	KOREA		46	%		3,600		1,933
Nepal Water & Energy Development Company Pty Ltd.	Power generation	NEPAL		44	%		10,550		10,409
Kelar S.A (*6)	Power generation	CHILE		65	%		4,180		4,180
PT. Tanjung Power Indonesia	Power generation	INDONESIA		35	%		388		361
Incheon New Power Co., Ltd.	Power generation	KOREA		29	%		461		449
Seokmun Energy Co., Ltd.	Integrated energy business	KOREA		34	%		680		415


							1,179,676		1,106,181


						￦	3,269,398		5,230,755

(*1)	The Company can exercise significant influence by virtue of its contractual right to appoint directors to the board of directors of the entity, and by strict decision criteria of the Company’s financial and operating policy of the board of directors.

(*2)	The Company can exercise significant influence by virtue of its contractual right to appoint a director to the board of directors of the entity.

(*3)	The Company can exercise significant influence by virtue of its contractual right to appoint one out of four members of the steering committee of the entity. Moreover, the Company has significant financial transactions with the associate which can affect its influence on the entity.

(*4)	The Company has joint control on the associates by virtue of its contractual right to appoint directors to the board of directors of the entity, and by strict decision criteria of the Company’s financial and operating policy of the board of directors.

(*5)

(*6)	According to the shareholder agreement, all critical financial and operating decisions must be agreed to by all ownership parties. For these reasons, the entities are classified as joint ventures.

(*7)	As of reporting date, the reporting period end of all associates and joint ventures ends in December 31, except for Pioneer Gas Power Limited whose reporting period ends on March 31.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(1)

Investments in associates and joint ventures as of March 31, 2014 and December 31, 2013 are as follows, continued:

(*8)

As of December 31, 2013, 16% of ownership of Hyundai Energy Co., Ltd. is held by NH Power ll Co., Ltd. and NH Bank. According to the shareholders’ agreement reached on March 2011, not only does the Company have a call option to acquire the investment in Hyundai Energy Co., Ltd. from NH Power ll Co., Ltd. and NH Bank with a certain rate of return, NH Power ll Co., Ltd. and NH Bank also have put options to dispose of their investment to the Company. In connection with this agreement, the Company applied the equity method on the investment in Hyundai Energy Co., Ltd. with 45% of ownership.

(2)

The fair value of associates which are actively traded on the open market and have a readily available market value as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won
Investees	March 31, 2014		December 31, 2013

<Associates>
Korea Electric Power Industrial Development Co., Ltd.	￦	41,409		39,423
Korea Gas Corporation		1,175,580		1,258,740
YTN Co., Ltd.		31,365		25,110
PT. Bayan Resources TBK		530,097		489,600

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(3)

Changes in investments in associates and joint ventures for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won
March 31, 2014
Investees	Beginning balance		Acquisition		Disposal		Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance

<Associates>
Daegu Green Power Co., Ltd.	￦	74,878		—		—		—			(995	)		—			—			73,883
Korea Gas Corporation		1,926,800		—		—		—			91,086			1,973			30			2,019,889
Korea Electric Power Industrial Development Co., Ltd.		22,450		—		—		(1,872	)		141			—			(219	)		20,500
YTN Co., Ltd.		38,426		—		—		(90	)		(1,943	)		(17	)		(24	)		36,352
Cheongna Energy Co., Ltd.		28,114		—		—		—			946			—			—			29,060
Gang won Wind Power Co., Ltd.		13,185		—		—		(1,988	)		118			—			—			11,315
Hyundai Green Power Co., Ltd.		110,157		—		—		(8,889	)		3,968			—			—			105,236
Korea Power Exchange		189,544		—		—		—			7,228			—			(668	)		196,104
AMEC Partners Korea		189		—		—		—			19			—			—			208
Hyundai Energy Co., Ltd.		43,386		—		—		—			(1,344	)		—			—			42,042
Ecollite Co., Ltd.		—		—		—		—			—			—			—			—
Taebaek Wind Power Co., Ltd.		5,553		—		—		—			(555	)		—			—			4,998
Alternergy Philippine Investments Corporation		1,500		—		—		—			(7	)		4			—			1,497
Muju Wind Power Co., Ltd.		2,707		—		—		—			1			—			—			2,708
Pyeongchang Wind Power Co., Ltd.		600		—		—		—			(13	)		—			—			587
Daeryun Power Co., Ltd.		24,599		—		—		—			(35	)		—			5			24,569
JinanJangsu Wind Power Co., Ltd.		77		—		—		—			—			—			—			77
Changjuk Wind Power Co., Ltd.		6,344		—		—		—			(670	)		—			—			5,674
KNH Solar Co., Ltd.		1,372		—		—		—			(46	)		—			—			1,326
SPC Power Corporation		47,661		—		—		—			(1,811	)		477			(5	)		46,322
Gemeng International Energy Co., Ltd.		608,674		—		—		—			6,808			(6,466	)		—			609,016
PT. Cirebon Electric Power		32,826		—		—		—			2,255			1,381			159			36,621
KNOC Nigerian East Oil Co., Ltd.		—		—		—		—			—			—			—			—
KNOC Nigerian West Oil Co., Ltd.		—		—		—		—			—			—			—			—
Dolphin Property Limited		—		—		—		—			—			—			—			—
E-Power S.A		5,284		—		—		—			432			55			—			5,771
PT Wampu Electric Power		15,121		—		—		—			(927	)		—			193			14,387
PT. Bayan Resources TBK		579,534		—		—		—			(5,087	)		(937	)		—			573,510
S-Power Co., Ltd.		107,264		—		—		—			(126	)		—			—			107,138
Pioneer Gas Power Limited		43,666		—		—		—			(11	)		1,159			—			44,814
Eurasia Energy Holdings		—		—		—		—			—			—			—			—
Xe-Pian Xe-Namnoy Power Co., Ltd.		18,058		—		—		—			309			168			—			18,535
Busan Solar Co., Ltd.		741		—		—		—			(156	)		—			—			585
Hadong Mineral Fiber Co., Ltd.		3		—		—		—			—			—			—			3
Green Biomass Co., Ltd.		171		—		—		—			(95	)		—			—			76
Gumi-Ochang Photovoltaic Power Co., Ltd.		389		—		—		(14	)		(16	)		—			—			359
Chungbuk Photovoltaic Power Co., Ltd		184		—		—		—			(4	)		—			—			180
Cheonan Photovoltaic Power Co., Ltd i		148		—		—		—			(16	)		—			—			132
PT. Mutiara Jawa		1,666		—		—		—			96			146			—			1,908
Hyundai Asan Solar Power Co., Ltd.		462		—		—		—			(67	)		—			—			395
Heang Bok Do Si Photovoltaic Power Co., Ltd.		91		—		—		—			(1	)		—			—			90
Jeonnam Solar Co., Ltd.		696		—		—		—			—			—			—			696
DS POWER Co., Ltd.		17,900		—		—		—			(35	)		—			—			17,865

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(3)

Changes in investments in associates and joint ventures for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
March 31, 2014
Investees	Beginning balance		Acquisition		Disposal		Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance
D Solarenergy Co., Ltd.	￦	364		—		—		—			70			—			—			434
Dongducheon Dream Power Co., Ltd.		134,398		—		—		—			(2,690	)		—			—			131,708
KS Solar Corp. Ltd.		537		—		—		—			(78	)		15			—			474
KOSCON Photovoltaic Co., Ltd.		315		—		—		—			36			—			—			351
Yeongwol Energy Station Co., Ltd.		908		—		—		—			740			(33	)		57			1,672
Yeonan Photovoltaic Co., Ltd.		123		—		—		—			(1	)		—			—			122
Q1 Solar Co., Ltd.		983		—		—		—			23			—			—			1,006
Jinbhuvish Power Generation		8,495		—		—		—			—			—			137			8,632
Best Solar Energy Co., Ltd.		898		—		—		—			64			—			—			962
Seokcheon Solar Power Co., Ltd.		1,046		—		—		—			22			(5	)		—			1,063
SE Green Energy Co., Ltd.		3,745		—		—		—			(59	)		—			—			3,686
Daegu Photovoltaic Co., Ltd.		1,334		—		—		—			(32	)		—			—			1,302
Jeongam Wind Power Co., Ltd.		324		—		—		—			(132	)		—			—			192
Korea Power Engineering Service Co., Ltd.		585		—		—		—			142			—			—			727
Golden Route J Solar Power Co. , Ltd.		99		—		—		—			(22	)		—			—			77


		4,124,574		—		—		(12,853	)		97,530			(2,080	)		(335	)		4,206,836


<Joint ventures>
KEPCO-Uhde Inc.	￦	9,537		—		—		—			(145	)		—			—			9,392
Eco Biomass Energy Sdn. Bhd.		—		—		—		—			—			—			—			—
Datang Chaoyang Renewable Power Co., Ltd.		28,161		—		—		—			(422	)		(281	)		—			27,458
Shuweihat Asia Power Investment B.V.		64		59,576		—		—			(6	)		(36,045	)		(234	)		23,355
Shuweihat Asia Operation & Maintenance Company		29		—		—		—			—			—			—			29
Waterbury Lake Uranium L.P.		23,042		—		—		—			—			(441	)		(114	)		22,487
ASM-BG Investicii AD		20,088		—		—		—			180			237			—			20,505
RES Technology AD		16,045		—		—		—			(120	)		189			—			16,114
KV Holdings, Inc.		1,842		—		—		—			—			7			—			1,849
KEPCO SPC Power Corporation		143,294		—		—		—			5,314			360			25			148,993
Canada Korea Uranium Limited Partnership		—		—		—		—			—			—			—			—
KEPCO Energy Resource Nigeria Limited		2,202		—		—		—			(2,189	)		(13	)		—			—
Gansu Datang Yumen Wind Power Co., Ltd.		19,237		—		—		—			(718	)		(181	)		—			18,338
Datang Chifeng Renewable Power Co., Ltd.		166,330		—		—		—			1,867			(1,743	)		4			166,458
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		10,604		—		—		—			(26	)		(108	)		—			10,470
Rabigh Electricity Company		—		—		—		—			2,700			(9,313	)		6,613			—
Rabigh Operation & Maintenance Company		4,082		—		—		—			759			53			—			4,894
Jamaica Public Service Company Limited		268,022		—		—		—			4,419			3,383			—			275,824
KW Nuclear Components Co., Ltd.		2,476		—		—		(1,452	)		790			—			—			1,814
Busan shinho Solar power Co., Ltd.		2,871		—		—		—			189			—			—			3,060
GS Donghae Electric Power Co., Ltd. (Formerly, STX Electric Power Co., Ltd.)		173,915		49,000		—		—			(174	)		(236	)		—			222,505
YEONGAM Wind Power Co., Ltd.		11,424		—		—		—			89			—			—			11,513
Global Trade Of Power System Co., Ltd		249		—		—		—			(11	)		—			—			238

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(3)

Changes in investments in associates and joint ventures for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
March 31, 2014
Investees	Beginning balance		Acquisition		Disposal			Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance
Expressway Solar-light Power Generation Co., Ltd	￦	1,863		—		—			(237	)		1,571			—			—			3,197
KODE NOVUS 1 LLC.		14,237		—		—			—			(276	)		121			—			14,082
KODE NOVUS 2 LLC.		9,510		—		—			—			(477	)		122			—			9,155
Daejung Offshore Wind Power Co., Ltd.		4,135		—		—			—			(133	)		—			—			4,002
Arman Asia Electric Power Company		111,315		—		—			—			2,601			1,203			—			115,119
KEPCO-ALSTOM Power Electronics Systems, Inc.		4,758		—		—			—			(304	)		—			—			4,454
Dongbu Power Dangjin Corporation		39,102		—		—			—			(418	)		—			1			38,685
Honam Wind Power Co., Ltd.		1,933		—		(120	)		—			(446	)		1,272			—			2,639
Nepal Water & Energy Development Company Pty Ltd.		10,409		—		—			—			(309	)		171			—			10,271
Kelar S.A		4,180		—		—			—			—			—			(136	)		4,044
PT. Tanjung Power Indonesia		361		—		—			—			(8	)		—			6			359
Incheon New Power Co., Ltd.		449		—		—			—			(13	)		—			—			436
Seokmun Energy Co., Ltd.		415		—		—			—			(90	)		—			—			325


		1,106,181		108,576		(120	)		(1,689	)		14,194			(41,243	)		6,165			1,192,064


	￦	5,230,755		108,576		(120	)		(14,542	)		111,724			(43,323	)		5,830			5,398,900

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(3)

Changes in investments in associates and joint ventures for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Investees	Beginning balance		Acquisition		Disposal		Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance

<Associates>
Daegu Green Power Co., Ltd.	￦	56,007		18,833		—		—			160			(91	)		(31	)		74,878
Korea Gas Corporation		2,049,340		—		—		(30,996	)		(26,848	)		1,541			(66,237	)		1,926,800
Korea Electric Power Industrial Development Co., Ltd.		18,936		—		—		(255	)		3,477			—			292			22,450
YTN Co., Ltd.		37,876		—		—		(90	)		472			40			128			38,426
Cheongna Energy Co., Ltd.		33,379		—		—		—			(5,217	)		—			(48	)		28,114
Gangwon Wind Power Co., Ltd.		12,113		—		—		(1,988	)		3,005			55			—			13,185
Hyundai Green Power Co., Ltd.		110,346		—		—		(8,107	)		8,038			—			(120	)		110,157
Korea Power Exchange		176,264		—		—		—			10,283			—			2,997			189,544
AMEC Partners Korea		141		—		—		—			48			—			—			189
Hyundai Energy Co., Ltd.		49,463		13,920		—		—			(19,834	)		—			(163	)		43,386
Ecollite Co., Ltd. (*1)		1,266		1,349		—		—			(896	)		—			(1,719	)		—
Taebaek Wind Power Co., Ltd.		3,728		—		—		—			1,825			—						5,553
Alternergy Philippine Investments Corporation		1,600		569		—		—			(508	)		(161	)		—			1,500
Muju Wind Power Co., Ltd.		2,711		—		—		—			(4	)		—			—			2,707
Pyeongchang Wind Power Co., Ltd.		613		—		—		—			(13	)		—			—			600
Daeryun Power Co., Ltd.		25,017		—		—		—			(270	)		(19	)		(129	)		24,599
JinanJangsu Wind Power Co., Ltd.		78		—		—		—			(1	)		—			—			77
Changjuk Wind Power Co., Ltd.		3,926		—		—		—			2,418			—			—			6,344
Commerce and industry energy Co., Ltd		7,066		—		—		—			(1,237	)		—			(5,829	)		—
KNH Solar Co., Ltd.		1,089		—		—		—			290			—			(7	)		1,372
SPC Power Corporation		36,760		—		—		—			15,599			(4,501	)		(197	)		47,661
Gemeng International Energy Co., Ltd.		549,730		—		—		—			53,120			5,824			—			608,674
PT. Cirebon Electric Power		17,022		—		—		—			10,300			6,361			(857	)		32,826
KNOC Nigerian East Oil Co., Ltd.		—		—		—		—			(348	)		127			221			—
KNOC Nigerian West Oil Co., Ltd.		—		—		—		—			(933	)		113			820			—
Dolphin Property Limited		—		—		—		—			344			(3	)		(341	)		—
E-Power S.A.		5,646		—		—		(1,878	)		(359	)		(28	)		1,903			5,284
PT Wampu Electric Power		15,644		—		—		—			(303	)		—			(220	)		15,121
PT. Bayan Resources TBK (*2)		642,636		—		—		—			(54,399	)		(8,703	)		—			579,534
S-Power Co., Ltd.		81,679		26,000		—		—			(158	)		(125	)		(132	)		107,264
Pioneer Gas Power Limited		37,875		8,811		—		—			377			(3,316	)		(81	)		43,666
Eurasia Energy Holdings		—		—		—		—			(171	)		57			114			—
Xe-Pian Xe-Namnoy Power Co., Ltd		27		18,898		—		—			(363	)		(504	)		—			18,058
Busan Solar Co., Ltd.		546		150		—		—			45			—			—			741
Hadong Mineral Fiber Co., Ltd.		5		—		—		—			(1	)		—			(1	)		3
Green Biomass Co., Ltd.		637		—		—		—			(466	)		—			—			171
Gumi-ochang Photovoltaic Power Co., Ltd.		282		—		—		—			107			—			—			389
Chungbuk Photovoltaic Power Co., Ltd.		159		—		—		—			25			—			—			184
Cheonan Photovoltaic Power Co., Ltd.		109		—		—		—			39			—			—			148
PT. Mutiara Jawai		2,624		—		—		—			(573	)		(456	)		71			1,666
Hyundai Asan Solar Power Co., Ltd.		—		471		—		—			(9	)		—			—			462
Heang Bok Do Si Photovoltaic Power Co., Ltd.		—		92		—		—			1			(2	)		—			91
Jeonnam Solar Co., Ltd.		—		700		—		—			—			(4	)		—			696
DS POWER Co., Ltd.		—		17,900		—		—			—			—			—			17,900
D Solarenergy Co., Ltd.		—		400		—		—			(36	)		—			—			364
Dongducheon Dream Power Co., Ltd.		—		—		—		—			(5,677	)		52			140,023			134,398

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(3)

Changes in investments in associates and joint ventures for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Investees	Beginning balance		Acquisition		Disposal			Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance

KS Solar Corp. Ltd.	￦	—		637		—			—			(100	)		—			—			537
KOSCON Photovoltaic Co., Ltd.		—		245		—			—			70			—			—			315
Yeongwol Energy Station Co., Ltd.		—		1,862		—			—			(926	)		(28	)		—			908
Yeonan Photovoltaic Co., Ltd.		—		157		—			—			(34	)		—			—			123
Q1 Solar Co., Ltd.		—		1,005		—			—			(10	)		—			(12	)		983
Jinbhuvish Power Generation		—		9,000		—			—			(145	)		(360	)		—			8,495
Best Solar Energy Co., Ltd.		—		1,242		—			—			(344	)		—			—			898
Seokcheon Solar Power Co., Ltd.		—		970		—			—			76			—			—			1,046
SE Green Energy Co., Ltd.		—		3,821		—			—			(57	)		(19	)		—			3,745
Daegu Photovoltaic Co., Ltd.		—		1,230		—			—			111			(7	)		—			1,334
Jeongam Wind Power Co., Ltd.		—		800		—			—			(476	)		—			—			324
Korea Power Engineering Service Co., Ltd.		—		290		—			—			295			—			—			585
Golden Route J Solar Power Co. , Ltd.		—		82		—			—			17			—			—			99


		3,982,340		129,434		—			(43,314	)		(10,174	)		(4,157	)		70,445			4,124,574


<Joint ventures>
KEPCO-Uhde Inc.		10,269		—		—			—			(751	)		—			19			9,537
Eco Biomass Energy Sdn. Bhd.		—		—		—			—			—			—			—			—
Datang Chaoyang Renewable Power Co., Ltd.		28,705		—		—			(1,300	)		549			395			(188	)		28,161
Shuweihat Asia Power Investment B.V.		—		109		—			—			(42	)		(7	)		4			64
Shuweihat Asia Operation & Maintenance Company		29		—		—			—			—			—			—			29
Waterbury Lake Uranium L.P.		24,906		—		—			—			—			(1,374	)		(490	)		23,042
ASM-BG Investicii AD		16,024		1,371		—			—			2,301			392			—			20,088
RES Technology AD		14,637		897		—			—			157			354			—			16,045
KV Holdings, Inc.		2,023		—		—			(319	)		307			(169	)		—			1,842
KEPCO SPC Power Corporation		121,737		—		—			(2,304	)		20,196			3,665			—			143,294
Canada Korea Uranium Limited Partnership (*3)		5,083		—		—			—			—			—			(5,083	)		—
KEPCO Energy Resource Nigeria Limited		5,663		—		—			—			(3,386	)		(75	)		—			2,202
Gansu Datang Yumen Wind Power Co., Ltd.		20,381		—		—			—			(1,365	)		221			—			19,237
Datang Chifeng Renewable Power Co., Ltd.		156,449		—		—			(3,545	)		11,837			1,838			(249	)		166,330
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		10,125		—		—			(506	)		893			155			(63	)		10,604
Rabigh Electricity Company (*4)		—		108,385		—			—			15,539			41,458			(165,382	)		—
Rabigh Operation & Maintenance Company		814		—		—			(1,831	)		5,188			(89	)		—			4,082
Jamaica Public Service Company Limited (*5)		293,007		—		—			—			(2,242	)		(3,544	)		(19,199	)		268,022
KW Nuclear Components Co., Ltd.		1,222		—		—			(457	)		1,711			—			—			2,476
Busan shinho Solar power Co., Ltd.		2,056		—		—			—			815			—			—			2,871
GS Donghae Electric Power Co., Ltd. (Formerly, STX Electric Power Co., Ltd.)		96,698		78,400		—			—			(806	)		(377	)		—			173,915
YEONGAM Wind Power Co., Ltd.		11,563		—		—			—			(76	)		—			(63	)		11,424
Global Trade Of Power System Co. , Ltd		213		—		—			—			36			—			—			249
Expressway Solar-light Power Generation Co., Ltd.		3,132		—		—			—			(1,257	)		(12	)		—			1,863
Yeongam F1 Solar Power Plant		1,673		—		(2,002	)		—			329			—			—			—

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(3)

Changes in investments in associates and joint ventures for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Investees	Beginning balance		Acquisition		Disposal			Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance

KODE NOVUS 1 LLC.	￦	17,691		—		—			—			(3,661	)		(64	)		271			14,237
KODE NOVUS 2 LLC.		11,550		—		—			—			(1,940	)		(100	)		—			9,510
Daejung Offshore Wind Power Co., Ltd.		4,844		—		—			—			(709	)		—			—			4,135
Arman Asia Electric Power Company		687		103,740		—			—			(1,501	)		10,685			(2,296	)		111,315
KEPCO-ALSTOM Power Electronics Systems, Inc.		5,629		—		—			—			(871	)		—			—			4,758
Dongbu Power Dangjin Corporation		40,000		—		—			—			(980	)		—			82			39,102
Honam Wind Power Co., Ltd.		1,783		1,817		—			—			(395	)		(1,272	)		—			1,933
Nepal Water & Energy Development Company Pty Ltd.		—		—		—			—			(10	)		(131	)		10,550			10,409
Kelar S.A		—		4,180		—			—			—			—			—			4,180
PT. Tanjung Power Indonesia		—		388		—			—			(9	)		(18	)		—			361
Incheon New Power Co., Ltd.		—		461		—			—			(4	)		(23	)		15			449
Seokmun Energy Co., Ltd.		—		680		—			—			(265	)		—			—			415


		908,593		300,428		(2,002	)		(10,262	)		39,588			51,908			(182,072	)		1,106,181


	￦	4,890,933		429,862		(2,002	)		(53,576	)		29,414			47,751			(111,627	)		5,230,755

(*1)	The Company recognized the difference between the carrying amount and the recoverable amount of ￦1,719 million as impairment losses on investments in associates and joint ventures due to discontinued operation during the prior year.

(*2)

In accordance with the interpretation, the Company has applied it prospectively beginning January 1, 2013. However PT Bayan Resources TBK (PT Bayan), one of the equity method investments of the Company, has retrospectively applied the interpretation and has restated its comparative financial statements to adjust the stripping activity costs that do not meet the criteria for asset recognition in the interpretation. The Company reflected this adjustment of W31,529 million due to the change in accounting policy as a loss on its equity method investment during the prior year.

(*3)

Canada Korea Uranium Limited Partnership could not find a mining area in which the economic feasibility was proven and seeks an exit strategy. As a result, the Company recognizes impairment losses on investments in associates and joint ventures of ￦4,680 million as profit or loss during the prior year.

(*4)	During the prior year, partial of the loans to Rabigh Electricity Company was converted to equity, causing the investment to increase by ￦108,385 million.

(*5)

It has been determined that there is objective evidence of impairment as a result of one or more events that a financial institution granted Jamaica Public Service Company Limited (“JPS”) a concession that the financial institution would not otherwise consider. As of December 31, 2013, as a result of the impairment test, the recoverable amount of JPS is less than its carrying amount and an impairment loss of ￦19,199 million is recognized as profit or loss. The recoverable amount of JPS is based on value in use calculated based on the most recent financial budget of future cash flow for a period of 9 years approved by management and the discount rate used to calculate the value in use is 10.27%.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(4)

Summary of financial information of associates and joint ventures as of and for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won
March 31, 2014
Investees	Total assets		Total liabilities		Sales		Profit (loss) for the period

<Associates>
Daegu Green Power Co., Ltd.	￦	515,601		361,336		364		(2,080	)
Korea Gas Corporation		45,764,827		36,400,484		12,548,577		422,280
Korea Electric Power Industrial Development Co., Ltd.		142,587		71,899		72,517		5,759
YTN Co., Ltd.		413,697		243,968		22,908		(9,252	)
Cheongna Energy Co., Ltd.		442,210		381,900		20,763		2,060
Gangwon Wind Power Co., Ltd.		129,359		54,250		8,197		4,793
Hyundai Green Power Co., Ltd.		1,184,069		821,188		121,714		13,910
Korea Power Exchange		216,643		20,539		22,178		7,243
AMEC Partners Korea		1,443		347		253		102
Hyundai Energy Co., Ltd.		548,535		452,941		24,859		(2,924	)
Ecollite Co., Ltd.		4,983		3,098		—		(99	)
Taebaek Wind Power Co., Ltd.		60,895		40,241		4,518		2,411
Alternergy Philippine Investments Corporation		3,136		143		—		(67	)
Muju Wind Power Co., Ltd.		10,832		—		6		2
Pyeongchang Wind Power Co., Ltd.		2,357		8		5		(50	)
Daeryun Power Co., Ltd.		632,281		508,194		199		(152	)
JinanJangsu Wind Power Co., Ltd.		309		—		—		—
Changjuk Wind Power Co., Ltd.		54,203		34,644		4,644		2,681
KNH Solar Co., Ltd.		28,581		23,468		904		(31	)
SPC Power Corporation		134,030		12,444		10,758		5,013
Gemeng International Energy Co., Ltd.		5,756,199		3,964,975		389,881		35,196
PT. Cirebon Electric Power		1,020,005		886,342		62,876		8,200
KNOC Nigerian East Oil Co., Ltd.		240,875		296,552		—		(1,730	)
KNOC Nigerian West Oil Co., Ltd.		146,397		197,546		—		(1,542	)
Dolphin Property Limited		7,012		7,160		29		(133	)
E-Power S.A.		68,725		52,791		8,468		1,419
PT Wampu Electric Power		132,790		101,513		416		(2,015	)
PT. Bayan Resources TBK		1,532,197		1,213,883		243,307		11,557
S-Power Co., Ltd.		713,870		446,024		—		(315	)
Pioneer Gas Power Limited		211,181		144,183		135		38
Eurasia Energy Holdings		547		975		—		—
Xe-Pian Xe-Namnoy Power Co., Ltd.		178,250		123,620		15		1,236
Busan Solar Co., Ltd.		29,423		26,054		836		(362	)
Hadong Mineral Fiber Co., Ltd.		12		1		—		—
Green Biomass Co., Ltd.		7,058		6,836		—		(282	)
Gumi-ochang Photovoltaic Power Co., Ltd.		19,411		15,825		707		(62	)
Chungbuk Photovoltaic Power Co., Ltd.		6,907		5,110		175		(84	)
Cheonan Photovoltaic Power Co., Ltd.		5,361		4,041		115		(72	)
PT. Mutiara Jawa		18,078		11,739		—		332
Hyundai Asan Solar Power Co., Ltd.		23,238		19,778		—		(377	)
Heang Bok Do Si Photovoltaic Power Co., Ltd.		1,105		784		—		(3	)
Jeonnam Solar Co., Ltd.		7,591		632		—		—
DS POWER Co., Ltd.		223,850		100,474		12,654		(287	)
D Solar Energy Co., Ltd		27,844		23,513		900		515
Dongducheon Dream Power Co., Ltd.		1,225,669		913,328		—		(2,239	)
KS Solar Corp. Ltd.		26,009		23,641		496		(493	)
KOSCON Photovoltaic Co., Ltd.		13,064		11,216		423		76
Yeongwol Energy Station Co., Ltd.		101,768		89,345		86		5,567
Yeonan Photovoltaic Co., Ltd.		7,912		7,271		206		(7	)
Q1 Solar Co., Ltd		25,691		22,097		925		40
Jinbhuvish Power Generation		66,708		5,015		—		—
Best Solar Energy Co., Ltd.		25,812		21,629		816		278
Seokcheon Solar Power Co., Ltd.		14,618		3,685		367		8
SE Green Energy Co., Ltd.		7,726		8		—		(123	)
Daegu Photovoltaic Co., Ltd.		22,127		17,639		616		(225	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(4)

Summary of financial information of associates and joint ventures as of and for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
March 31, 2014
Investees	Total assets		Total liabilities		Sales		Profit (loss) for the period

Jeongam Wind Power Co., Ltd.		483		3		2		(225	)
Korea Power Engineering Service Co., Ltd.		3,044		536		2,592		946
Golden Route J Solar Power Co., Ltd.		5,398		4,631		129		(63	)

<Joint ventures>
KEPCO-Uhde Inc.	￦	16,277		2,047		—		(268	)
Eco Biomass Energy Sdn. Bhd.		—		—		—		—
Datang Chaoyang Renewable Power Co., Ltd.		164,847		96,203		3,568		(841	)
Shuweihat Asia Power Investment B.V.		47,679		16		—		(12	)
Shuweihat Asia Operation & Maintenance Company		255		201		—		—
Waterbury Lake Uranium L.P.		56,212		127		—		—
ASM-BG Investicii AD		105,853		64,844		2,649		108
RES Technology AD		96,599		64,370		1,858		(392	)
KV Holdings, Inc.		4,623		—		—		—
KEPCO SPC Power Corporation		507,224		307,175		36,451		7,203
Canada Korea Uranium Limited Partnership		41,636		42		—		—
KEPCO Energy Resource Nigeria Limited		405,864		406,830		—		(8,265	)
Gansu Datang Yumen Wind Power Co., Ltd.		111,215		65,371		2,130		(1,164	)
Datang Chifeng Renewable Power Co., Ltd.		915,867		499,647		26,325		4,657
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		69,494		43,319		1,690		(64	)
Rabigh Electricity Company		2,661,956		2,469,237		68,723		10,097
Rabigh Operation & Maintenance Company		16,607		4,372		5,281		1,954
Jamaica Public Service Company Limited		1,212,409		744,320		280,718		7,620
KW Nuclear Components Co., Ltd.		22,907		18,876		4,384		1,754
Busan shinho Solar power Co., Ltd.		55,146		42,947		1,981		382
GS Donghae Electric Power Co., Ltd. (Formerly, STX Electric Power Co., Ltd.)		474,707		20,614		—		(347	)
YEONGAM Wind Power Co., Ltd.		126,186		102,689		3,230		2,736
Global Trade Of Power System Co., Ltd.		1,156		336		736		(40	)
Expressway Solar-light Power Generation Co., Ltd.		24,994		13,968		233		(549	)
KODE NOVUS 1 LLC.		116,009		97,308		2,385		(552	)
KODE NOVUS 2 LLC.		57,292		38,609		769		(974	)
Daejung Offshore Wind Power Co., Ltd.		8,044		25		1		(267	)
Arman Asia Electric Power Company		657,978		466,114		—		4,306
KEPCO-ALSTOM Power Electronics Systems, Inc.		9,384		650		—		(595	)
Dongbu Power Dangjin Corporation		93,586		2,439		—		(1,024	)
Honam Wind Power Co., Ltd.i		38,229		29,239		—		(1,618	)
Nepal Water & Energy Development Company Pty Ltd.		32,111		11,529		—		(589	)
Kelar S.A		66,395		65,409		—		—
PT. Tanjung Power Indonesia		1,052		27		—		(22	)
Incheon New Power Co., Ltd.		4,474		2,971		—		(44	)
Seokmun Energy Co., Ltd.		1,381		426		—		(266	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(4)

Summary of financial information of associates and joint ventures as of and for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Investees	Total assets		Total liabilities		Sales		Profit (loss) for the period

<Associates>
Daegu Green Power Co., Ltd.	￦	461,503		305,157		295		(52	)
Korea Gas Corporation		43,666,375		34,733,597		37,458,950		(200,707	)
Korea Electric Power Industrial Development Co., Ltd.		139,764		62,350		289,085		12,658
YTN Co., Ltd.		410,384		230,977		120,124		3,090
Cheongna Energy Co., Ltd.		429,095		370,940		44,455		(11,278	)
Gangwon Wind Power Co., Ltd.		141,572		54,000		38,973		20,035
Hyundai Green Power Co., Ltd.		1,217,193		837,339		339,567		29,580
Korea Power Exchange		214,012		24,469		84,257		13,592
AMEC Partners Korea		1,594		600		1,650		251
Hyundai Energy Co., Ltd.		548,467		449,949		33,010		(41,604	)
Ecollite Co., Ltd.		5,085		2,005		—		(2,663	)
Taebaek Wind Power Co., Ltd.		58,705		36,495		11,595		6,986
Alternergy Philippine Investments Corporation		3,088		89		—		(664	)
Muju Wind Power Co., Ltd.		10,830		—		—		(13	)
Pyeongchang Wind Power Co., Ltd.		2,400		1		—		(55	)
Daeryun Power Co., Ltd.		608,267		484,032		—		(1,321	)
JinanJangsu Wind Power Co., Ltd.		310		—		—		(1	)
Changjuk Wind Power Co., Ltd.		51,653		30,506		11,818		7,635
KNH Solar Co., Ltd.		29,530		24,449		4,940		1,073
SPC Power Corporation		140,236		15,138		53,862		29,730
Gemeng International Energy Co., Ltd.		5,758,480		3,968,262		1,642,121		102,631
PT. Cirebon Electric Power		1,004,891		885,522		300,011		37,466
KNOC Nigerian East Oil Co., Ltd.		237,211		290,240		—		(7,445	)
KNOC Nigerian West Oil Co., Ltd.		143,874		191,302		—		(5,363	)
Dolphin Property Limited		6,173		7,053		558		(159	)
E-Power S.A.		66,262		51,951		35,601		5,218
PT Wampu Electric Power		122,733		89,862		27,048		(659	)
PT. Bayan Resources TBK		1,525,745		1,194,968		1,256,526		(19,401	)
S-Power Co., Ltd.		614,591		346,429		—		(388	)
Pioneer Gas Power Limited		199,974		135,845		135		65
Eurasia Energy Holdings		540		963		3,414		(297	)
Xe-Pian Xe-Namnoy Power Co., Ltd.		127,858		75,138		70		(1,239	)
Busan Solar Co., Ltd.		25,244		21,501		2,666		256
Hadong Mineral Fiber Co., Ltd.		12		—		—		(4	)
Green Biomass Co., Ltd.		6,962		6,458		—		(1,298	)
Gumi-ochang Photovoltaic Power Co., Ltd.		20,091		16,197		3,885		1,068
Chungbuk Photovoltaic Power Co., Ltd.		7,553		5,709		1,133		20
Cheonan Photovoltaic Power Co., Ltd.		6,032		4,554		1,024		228
PT. Mutiara Jawa		13,939		8,435		—		(1,987	)
Hyundai Asan Solar Power Co., Ltd.		26,298		22,169		—		(90	)
Heang Bok Do Si Photovoltaic Power Co., Ltd.		324		—		—		—
Jeonnam Solar Co., Ltd.		7,591		632		—		(2	)
DS POWER Co., Ltd.		184,783		61,135		6,831		(352	)
D Solar Energy Co., Ltd.		29,537		25,909		29		(361	)
Dongducheon Dream Power Co., Ltd.		1,159,917		845,337		—		(9,713	)
KS Solar Corp. Ltd.		22,433		19,756		188		(524	)
KOSCON Photovoltaic Co., Ltd.		13,213		11,556		1,411		367
Yeongwol Energy Station Co., Ltd.		89,122		82,292		—		(6,747	)
Yeonan Photovoltaic Co., Ltd.		8,111		7,463		411		(178	)
Q1 Solar Co., Ltd.		25,771		22,259		1,906		(36	)
Jinbhuvish Power Generation		63,830		4,798		—		—
Best Solar Energy Co., Ltd.		25,490		21,583		86		(1,495	)
Seokcheon Solar Power Co., Ltd.		14,602		3,847		1,873		786
SE Green Energy Co., Ltd.		8,148		307		—		(119	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(4)

Summary of financial information of associates and joint ventures as of and for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Investees	Total assets		Total liabilities		Sales		Profit (loss) for the period

Daegu Photovoltaic Co., Ltd.	￦	22,580		17,980		1,829		439
Jeongam Wind Power Co., Ltd.		855		44		—		(1,189	)
Korea Power Engineering Service Co., Ltd.		2,123		107		4,658		1,016
Golden Route J Solar Power Co., Ltd.		5,623		4,637		711		171

<Joint ventures>
KEPCO-Uhde Inc.		16,136		1,686		—		(1,137	)
Eco Biomass Energy Sdn. Bhd.		—		—		—		—
Datang Chaoyang Renewable Power Co., Ltd.		168,058		97,656		21,013		2,392
Shuweihat Asia Power Investment B.V.		152		23		—		(70	)
Shuweihat Asia Operation & Maintenance Company		181		128		—		—
Waterbury Lake Uranium L.P.		57,600		131		—		—
ASM-BG Investicii AD		108,869		68,692		15,364		5,249
RES Technology AD		100,140		68,050		10,110		699
KV Holdings, Inc.		4,606		—		—		768
KEPCO SPC Power Corporation		499,241		308,691		170,681		26,856
Canada Korea Uranium Limited Partnership		41,636		42		—		—
KEPCO Energy Resource Nigeria Limited		416,632		409,294		—		(11,328	)
Gansu Datang Yumen Wind Power Co., Ltd.		113,565		65,472		10,397		(3,245	)
Datang Chifeng Renewable Power Co., Ltd.		932,146		516,236		115,588		26,302
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		71,338		44,827		9,755		2,316
Rabigh Electricity Company		2,684,208		2,486,086		237,775		34,116
Rabigh Operation & Maintenance Company		17,857		7,651		25,636		13,243
Jamaica Public Service Company Limited		1,270,886		762,970		1,194,263		(784	)
KW Nuclear Components Co., Ltd.		24,401		18,898		9,785		3,551
Busan shinho Solar power Co., Ltd.		56,191		44,746		8,944		3,025
STX Electric Power Co., Ltd.		367,307		12,378		—		(1,646	)
YEONGAM Wind Power Co., Ltd.		94,823		71,509		939		(144	)
Global Trade Of Power System Co., Ltd.		866		6		2,393		148
Expressway Solar-light Power Generation Co., Ltd.		21,435		15,009		2,804		(4,293	)
KODE NOVUS 1 LLC.		115,450		96,442		2,819		(7,416	)
KODE NOVUS 2 LLC.		57,931		38,523		1,530		(3,959	)
Daejung Offshore Wind Power Co., Ltd.		8,299		12		—		(1,017	)
Arman Asia Electric Power Company		669,925		484,400		—		(1,506	)
KEPCO-ALSTOM Power Electronics Systems, Inc.		9,972		643		387		(1,649	)
Dongbu Power Dangjin Corporation		94,768		2,578		—		(3,235	)
Honam Wind Power Co., Ltd.		25,887		19,519		—		(1,310	)
Nepal Water & Energy Development Company Pty Ltd.		36,040		14,382		—		(1,572	)
Kelar S.A		1,019		—		—		(1,573	)
PT. Tanjung Power Indonesia		1,061		27		—		(22	)
Incheon New Power Co., Ltd.		4,531		2,984		—		(13	)
Seokmun Energy Co., Ltd.		1,647		426		—		(779	)

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(5)

Financial information of associates and joint ventures converted to the Company’s shares in net assets as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won
March 31, 2014
Investees	Net assets			Percentage of ownership			Share in net assets			Investment differential		Intercompany transaction			Others			Book value

<Associates>
Daegu Green Power Co., Ltd.	￦	154,266			47.80	%		73,739			144		—			—			73,883
Korea Gas Corporation		9,364,343			21.57	%		2,019,889			—		—			—			2,019,889
Korea Electric Power Industrial Development Co., Ltd.		70,688			29.00	%		20,500			—		—			—			20,500
YTN Co., Ltd.		169,729			21.43	%		36,373			—		(21	)		—			36,352
Cheongna Energy Co., Ltd.		60,310			43.90	%		26,476			2,584		—			—			29,060
Gangwon Wind Power Co., Ltd.		75,108			15.00	%		11,266			—		—			49			11,315
Hyundai Green Power Co., Ltd.		362,882			29.00	%		105,236			—		—			—			105,236
Korea Power Exchange		196,104			100.00	%		196,104			—		—			—			196,104
AMEC Partners Korea		1,096			19.00	%		208			—		—			—			208
Hyundai Energy Co., Ltd.		95,595			45.23	%		43,237			—		(1,195	)		—			42,042
Ecollite Co., Ltd.		1,885			36.10	%		680			—		—			(680	)		—
Taebaek Wind Power Co., Ltd.		20,654			25.00	%		5,163			—		(165	)		—			4,998
Alternergy Philippine Investments Corporation		2,994			50.00	%		1,497			—		—			—			1,497
Muju Wind Power Co., Ltd.		10,832			25.00	%		2,708			—		—			—			2,708
Pyeongchang Wind Power Co., Ltd.		2,349			25.00	%		587			—		—			—			587
Daeryun Power Co., Ltd.		124,086			19.80	%		24,569			—		—			—			24,569
JinanJangsu Wind Power Co., Ltd.		309			25.00	%		77			—		—			—			77
Changjuk Wind Power Co., Ltd.		19,559			30.00	%		5,868			—		(194	)		—			5,674
KNH Solar Co., Ltd.		5,113			27.00	%		1,380			—		(54	)		—			1,326
SPC Power Corporation		121,586			38.00	%		46,203			—		—			119			46,322
Gemeng International Energy Co., Ltd.		1,791,224			34.00	%		609,016			—		—			—			609,016
PT. Cirebon Electric Power		133,663			27.50	%		36,757			—		—			(136	)		36,621
KNOC Nigerian East Oil Co., Ltd.		(55,676	)		14.63	%		(8,145	)		—		—			8,145			—
KNOC Nigerian West Oil Co., Ltd.		(51,149	)		14.63	%		(7,483	)		—		—			7,483			—
Dolphin Property Limited		(148	)		15.00	%		(22	)		—		—			22			—
E-Power S.A.		15,934			30.00	%		4,780			991		—			—			5,771
PT Wampu Electric Power		31,276			46.00	%		14,387			—		—			—			14,387
PT. Bayan Resources TBK		318,314			20.00	%		63,663			509,847		—			—			573,510
S-Power Co., Ltd.		267,846			40.00	%		107,138			—		—			—			107,138
Pioneer Gas Power Limited		66,998			40.00	%		26,799			18,015		—			—			44,814
Eurasia Energy Holdings		(429	)		40.00	%		(171	)		—		—			171			—
Xe-Pian Xe-Namnoy Power Co., Ltd.		54,630			25.00	%		13,658			4,877		—			—			18,535
Busan Solar Co., Ltd.		3,369			19.80	%		667			—		(82	)		—			585
Hadong Mineral Fiber Co., Ltd.		11			25.00	%		3			—		—			—			3
Green Biomass Co., Ltd.		222			34.00	%		76			—		—			—			76
Gumi-ochang Photovoltaic Power Co., Ltd.		3,587			10.00	%		359			—		—			—			359
Chungbuk Photovoltaic Power Co., Ltd.		1,796			10.00	%		180			—		—			—			180
Cheonan Photovoltaic Power Co., Ltd.		1,320			10.00	%		132			—		—			—			132
PT. Mutiara Jawa		6,339			29.00	%		1,838			70		—			—			1,908
Hyundai Asan Solar Power Co., Ltd.		3,460			10.00	%		346			49		—			—			395
Heang Bok Do Si Photovoltaic Power Co., Ltd.		321			28.00	%		90			—		—			—			90
Jeonnam Solar Co., Ltd.		6,960			10.00	%		696			—		—			—			696
DS POWER Co., Ltd.		123,375			10.91	%		13,465			—		—			4,400			17,865
D Solar Energy Co., Ltd		4,331			10.00	%		433			1		—			—			434
Dongducheon Dream Power Co., Ltd.		312,341			43.61	%		136,212			—		(4,504	)		—			131,708
KS Solar Corp. Ltd.		2,368			19.00	%		450			24		—			—			474
KOSCON Photovoltaic Co., Ltd.		1,849			19.00	%		351			—		—			—			351
Yeongwol Energy Station Co., Ltd.		12,423			13.30	%		1,652			—		—			20			1,672
Yeonan Photovoltaic Co., Ltd.		641			19.00	%		122			—		—			—			122
Q1 Solar Co., Ltd		3,594			28.00	%		1,006			—		—			—			1,006
Jinbhuvish Power Generation		61,693			5.16	%		3,183			5,449		—			—			8,632
Best Solar Energy Co., Ltd.		4,184			23.00	%		962			—		—			—			962
Seokcheon Solar Power Co., Ltd.		10,933			9.73	%		1,063			—		—			—			1,063

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(5)

Financial information of associates and joint ventures converted to the Company’s shares in net assets as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won
March 31, 2014
Investees	Net assets			Percentage of ownership			Share in net assets			Investment differential		Intercompany transaction			Others			Book value

SE Green Energy Co., Ltd.	￦	7,718			47.76	%		3,686			—		—			—			3,686
Daegu Photovoltaic Co., Ltd.		4,488			29.00	%		1,302			—		—			—			1,302
Jeongam Wind Power Co., Ltd.		479			40.00	%		192			—		—			—			192
Korea Power Engineering Service Co., Ltd.		2,508			29.00	%		727			—		—			—			727
Golden Route J Solar Power Co., Ltd.		767			10.00	%		77			—		—			—			77

<Joint ventures>
KEPCO-Uhde Inc.		14,231			66.00	%		9,392			—		—			—			9,392
Eco Biomass Energy Sdn. Bhd.		—			61.53	%		—			—		—			—			—
Datang Chaoyang Renewable Power Co., Ltd.		68,644			40.00	%		27,458			—		—			—			27,458
Shuweihat Asia Power Investment B.V.		47,663			49.00	%		23,355			—		—			—			23,355
Shuweihat Asia Operation & Maintenance Company		53			55.00	%		29			—		—			—			29
Waterbury Lake Uranium L.P.		56,085			40.00	%		22,434			—		—			53			22,487
ASM-BG Investicii AD		41,009			50.00	%		20,505			—		—			—			20,505
RES Technology AD		32,229			50.00	%		16,114			—		—			—			16,114
KV Holdings, Inc.		4,623			40.00	%		1,849			—		—			—			1,849
KEPCO SPC Power Corporation		200,049			75.20	%		150,437			—		—			(1,444	)		148,993
Canada Korea Uranium Limited Partnership		41,594			12.50	%		5,199			—		—			(5,199	)		—
KEPCO Energy Resource Nigeria Limited		(967	)		30.00	%		(290	)		—		—			290			—
Gansu Datang Yumen Wind Power Co., Ltd.		45,844			40.00	%		18,338			—		—			—			18,338
Datang Chifeng Renewable Power Co., Ltd.		416,220			40.00	%		166,488			—		—			(30	)		166,458
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		26,175			40.00	%		10,470			—		—			—			10,470
Rabigh Electricity Company		192,719			40.00	%		77,087			—		(77,087	)		—			—
Rabigh Operation & Maintenance Company		12,235			40.00	%		4,894			—		—			—			4,894
Jamaica Public Service Company Limited		468,089			40.00	%		187,236			130,726		—			(42,138	)		275,824
KW Nuclear Components Co., Ltd.		4,031			45.00	%		1,814			—		—			—			1,814
Busan shinho Solar power Co., Ltd.		12,199			25.00	%		3,050			—		—			10			3,060
GS Donghae Electric Power Co., Ltd. (Formerly, STX Electric Power Co., Ltd.)		454,093			49.00	%		222,505			—		—			—			222,505
YEONGAM Wind Power Co., Ltd.		23,497			49.00	%		11,513			—		—			—			11,513
Global Trade Of Power System Co., Ltd.		820			29.00	%		238			—		—			—			238
Expressway Solar-light Power Generation Co., Ltd.		11,026			29.00	%		3,197			—		—			—			3,197
KODE NOVUS 1 LLC.		18,700			50.00	%		9,350			4,732		—			—			14,082
KODE NOVUS 2 LLC.		18,683			49.00	%		9,155			—		—			—			9,155
Daejung Offshore Wind Power Co., Ltd.		8,019			49.90	%		4,002			—		—			—			4,002
Arman Asia Electric Power Company		191,864			60.00	%		115,119			—		—			—			115,119
KEPCO-ALSTOM Power Electronics Systems, Inc.		8,734			51.00	%		4,454			—		—			—			4,454
Dongbu Power Dangjin Corporation		91,148			40.00	%		36,459			2,226		—			—			38,685
Honam Wind Power Co., Ltd.		8,990			29.00	%		2,607			32		—			—			2,639
Nepal Water & Energy Development Company Pty Ltd.		20,582			45.18	%		9,299			972		—			—			10,271
Kelar S.A		986			65.00	%		641			3,517		—			(114	)		4,044
PT. Tanjung Power Indonesia		1,025			35.00	%		359			—		—			—			359
Incheon New Power Co., Ltd.		1,503			29.00	%		436			—		—			—			436
Seokmun Energy Co., Ltd.		955			34.00	%		325			—		—			—			325

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(5)

Financial information of associates and joint ventures converted to the Company’s shares in net assets as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Investees	Net assets			Percentage of ownership			Share in net assets			Investment differential			Intercompany transaction			Others			Book value

<Associates>
Daegu Green Power Co., Ltd.	￦	156,346			47.80	%		74,733			145			—			—			74,878
Korea Gas Corporation		8,932,779			21.57	%		1,926,800			—			—			—			1,926,800
Korea Electric Power Industrial Development Co., Ltd.		77,414			29.00	%		22,450			—			—			—			22,450
YTN Co., Ltd.		179,407			21.43	%		38,447			—			(21	)		—			38,426
Cheongna Energy Co., Ltd.		58,155			43.90	%		25,530			2,584			—			—			28,114
Gangwon Wind Power Co., Ltd.		87,572			15.00	%		13,136			—			—			49			13,185
Hyundai Green Power Co., Ltd.		379,853			29.00	%		110,157			—			—			—			110,157
Korea Power Exchange		189,544			100.00	%		189,544			—			—			—			189,544
AMEC Partners Korea		994			19.00	%		189			—			—			—			189
Hyundai Energy Co., Ltd.		98,518			45.26	%		44,589			—			(1,203	)		—			43,386
Ecollite Co., Ltd.		3,080			36.10	%		1,112			—			—			(1,112	)		—
Taebaek Wind Power Co., Ltd.		22,210			25.00	%		5,553			—			—			—			5,553
Alternergy Philippine Investments Corporation		3,000			50.00	%		1,500			—			—			—			1,500
Muju Wind Power Co., Ltd.		10,830			25.00	%		2,707			—			—			—			2,707
Pyeongchang Wind Power Co., Ltd.		2,399			25.00	%		600			—			—			—			600
Daeryun Power Co., Ltd.		124,235			19.80	%		24,599			—			—			—			24,599
JinanJangsu Wind Power Co., Ltd.		309			25.00	%		77			—			—			—			77
Changjuk Wind Power Co., Ltd.		21,147			30.00	%		6,344			—			—			—			6,344
KNH Solar Co., Ltd.		5,081			27.00	%		1,372			—			—			—			1,372
SPC Power Corporation		125,098			38.00	%		47,537			—			—			124			47,661
Gemeng International Energy Co., Ltd.		1,790,218			34.00	%		608,674			—			—			—			608,674
PT. Cirebon Electric Power		119,369			27.50	%		32,826			—			—			—			32,826
KNOC Nigerian East Oil Co., Ltd.		(53,029	)		14.63	%		(7,758	)		—			—			7,758			—
KNOC Nigerian West Oil Co., Ltd.		(47,429	)		14.63	%		(6,939	)		—			—			6,939			—
Dolphin Property Limited		(880	)		15.00	%		(132	)		—			—			132			—
E-Power S.A.		14,311			30.00	%		4,293			991			—			—			5,284
PT Wampu Electric Power		32,871			46.00	%		15,121			—			—			—			15,121
PT. Bayan Resources TBK		330,776			20.00	%		66,155			513,379			—			—			579,534
S-Power Co., Ltd.		268,161			40.00	%		107,264			—			—			—			107,264
Pioneer Gas Power Limited		64,129			40.00	%		25,652			18,014			—			—			43,666
Eurasia Energy Holdings		(423	)		40.00	%		(169	)		—			—			169			—
Xe-Pian Xe-Namnoy Power Co., Ltd.		52,720			25.00	%		13,180			4,878			—			—			18,058
Busan Solar Co., Ltd.		3,743			19.80	%		741			—			—			—			741
Hadong Mineral Fiber Co., Ltd.		12			25.00	%		3			—			—			—			3
Green Biomass Co., Ltd.		504			34.00	%		171			—			—			—			171
Gumi-ochang Photovoltaic Power Co., Ltd.		3,894			10.00	%		389			—			—			—			389
Chungbuk Photovoltaic Power Co., Ltd.		1,844			10.00	%		184			—			—			—			184
Cheonan Photovoltaic Power Co., Ltd.		1,478			10.00	%		148			—			—			—			148
PT. Mutiara Jawa		5,504			29.00	%		1,596			70			—			—			1,666
Hyundai Asan Solar Power Co., Ltd.		4,129			10.00	%		413			49			—			—			462
Heang Bok Do Si Photovoltaic Power Co., Ltd.		324			28.00	%		91			—			—			—			91
Jeonnam Solar Co., Ltd.		6,960			10.00	%		696			—			—			—			696
DS POWER Co., Ltd.		123,648			10.91	%		13,495			—			—			4,405			17,900
D Solar Energy Co., Ltd.		3,627			10.00	%		363			1			—			—			364
Dongducheon Dream Power Co., Ltd.		314,580			43.61	%		137,188			(2,790	)		—			—			134,398
KS Solar Corp. Ltd.		2,677			19.00	%		509			28			—			—			537
KOSCON Photovoltaic Co., Ltd.		1,657			19.00	%		315			—			—			—			315
Yeongwol Energy Station Co., Ltd.		6,829			13.30	%		908			—			—			—			908
Yeonan Photovoltaic Co., Ltd.		648			19.00	%		123			—			—			—			123
Q1 Solar Co., Ltd.		3,512			28.00	%		983			—			—			—			983
Jinbhuvish Power Generation		59,032			5.16	%		3,046			5,449			—			—			8,495

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(5)

Financial information of associates and joint ventures converted to the Company’s shares in net assets as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won
December 31, 2013
Investees	Net assets		Percentage of ownership			Share in net assets		Investment differential		Intercompany transaction			Others			Book value

Best Solar Energy Co., Ltd.	￦	3,906		23.00	%		898		—		—			—			898
Seokcheon Solar Power Co., Ltd.		10,755		9.73	%		1,046		—		—			—			1,046
SE Green Energy Co., Ltd.		7,841		47.76	%		3,745		—		—			—			3,745
Daegu Photovoltaic Co., Ltd.		4,600		29.00	%		1,334		—		—			—			1,334
Jeongam Wind Power Co., Ltd.		811		40.00	%		324		—		—			—			324
Korea Power Engineering Service Co., Ltd.		2,016		29.00	%		585		—		—			—			585
Golden Route J Solar Power Co., Ltd.		987		10.00	%		99		—		—			—			99

<Joint ventures>
KEPCO-Uhde Inc.		14,450		66.00	%		9,537		—		—			—			9,537
Eco Biomass Energy Sdn. Bhd.		—		61.53	%		—		—		—			—			—
Datang Chaoyang Renewable Power Co., Ltd.		70,402		40.00	%		28,161		—		—			—			28,161
Shuweihat Asia Power Investment B.V.		129		49.00	%		63		—		—			—			63
Shuweihat Asia Operation & Maintenance Company		53		55.00	%		29		—		—			—			29
Waterbury Lake Uranium L.P.		57,469		40.00	%		22,988		—		—			54			23,042
ASM-BG Investicii AD		40,177		50.00	%		20,088		—		—			—			20,088
RES Technology AD		32,090		50.00	%		16,045		—		—			—			16,045
KV Holdings, Inc.		4,606		40.00	%		1,842		—		—			—			1,842
KEPCO SPC Power Corporation		190,551		75.20	%		143,294		—		—			—			143,294
Canada Korea Uranium Limited Partnership		41,594		12.50	%		5,199		—		—			(5,199	)		—
KEPCO Energy Resource Nigeria Limited		7,338		30.00	%		2,202		—		—			—			2,202
Gansu Datang Yumen Wind Power Co., Ltd.		48,093		40.00	%		19,237		—		—			—			19,237
Datang Chifeng Renewable Power Co., Ltd.		415,910		40.00	%		166,364		—		—			(34	)		166,330
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		26,510		40.00	%		10,604		—		—			—			10,604
Rabigh Electricity Company		198,123		40.00	%		79,249		—		(79,249	)		—			—
Rabigh Operation & Maintenance Company		10,206		40.00	%		4,082		—		—			—			4,082
Jamaica Public Service Company Limited		507,916		40.00	%		203,166		130,726		—			(65,870	)		268,022
KW Nuclear Components Co., Ltd.		5,503		45.00	%		2,476		—		—			—			2,476
Busan shinho Solar power Co., Ltd.		11,445		25.00	%		2,861		—		—			10			2,871
STX Electric Power Co., Ltd.		354,929		49.00	%		173,915		—		—			—			173,915
YEONGAM Wind Power Co., Ltd.		23,315		49.00	%		11,424		—		—			—			11,424
Global Trade Of Power System Co., Ltd.		860		29.00	%		249		—		—			—			249
Expressway Solar-light Power Generation Co., Ltd.		6,426		29.00	%		1,863		—		—			—			1,863
KODE NOVUS 1 LLC.		19,009		50.00	%		9,504		4,733		—			—			14,237
KODE NOVUS 2 LLC.		19,408		49.00	%		9,510		—		—			—			9,510
Daejung Offshore Wind Power Co., Ltd.		8,287		49.90	%		4,135		—		—			—			4,135
Arman Asia Electric Power Company		185,525		60.00	%		111,315		—		—			—			111,315
KEPCO-ALSTOM Power Electronics Systems, Inc.		9,329		51.00	%		4,758		—		—			—			4,758
Dongbu Power Dangjin Corporation		92,190		40.00	%		36,876		2,226		—			—			39,102
Honam Wind Power Co., Ltd.		6,368		30.00	%		1,910		23		—			—			1,933
Nepal Water & Energy Development Company Pty Ltd.		21,659		43.57	%		9,437		972		—			—			10,409
Kelar S.A		1,019		65.00	%		663		3,517		—			—			4,180
PT. Tanjung Power Indonesia		1,034		35.00	%		361		—		—			—			361
Incheon New Power Co., Ltd.		1,548		29.00	%		449		—		—			—			449
Seokmun Energy Co., Ltd.		1,221		34.00	%		415		—		—			—			415

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(6)

As of March 31, 2014, there is no unrecognized equity interest in investments in associates and joint ventures whose book value has been reduced to zero due to accumulated losses.

(7)

As of March 31, 2014, shareholders’ agreements on investments in associates and joint ventures that may cause future economic costs or cash outflows are as follows:

(i)

Gemeng International Energy Co., Ltd.

KEPCO Shanxi International Ltd., a consolidated subsidiary of the Company, established a consortium with two other investors, Deutche Capital Hongkong Ltd. and Shanxi International Energy Company Co., Ltd. with the Company’s percentage of ownership of the consortium being 34%. This consortium, in order for business in Chinese power generating industry, established Gemeng International Energy Co., Ltd., which is an associate of the Company with the Company’s percentage of ownership being 34%. KEPCO Shanxi International Ltd. has entered into an agreement(“Put Option”) that if Gemeng International Co., Ltd. fails to be listed within 5 years after the initial capital paid in, Deutche Capital HongKong Ltd can require KEPCO Shanxi International Ltd. to acquire or recommend 3rd party to acquire its own investment in Gemeng International Co., Ltd. at the investment principal of USD 106,861,924 with an interest of 3M Libor-0.25% during the period from July 10, 2012 to July 9, 2014. However, Put Option Extension Agreement has changed this period; June 19, 2014 to July 9, 2014, and as of March 31, 2014, the Company guarantees this Put Option Agreement.

(ii)

Eco Biomass Energy Sdn. Bhd.

Eco Biomass Energy Sdn. Bhd., issued put options on preferred stock to its financial investors. An agreement was made between financial investors and shareholders that if Eco Biomass Energy Sdn. Bhd., the first obligator, fails to accept the put options when exercised, all shareholders of Eco Biomass Energy Sdn. Bhd., should fulfill their obligation as the second obligators and acquire the preferred stock from financial investors in proportion to each shareholder’s percentage of ownership up to ￦4,050 million.

(iii)

Hyundai Energy Co., Ltd.

As of March 31, 2014, Hyundai Energy Co., Ltd., an associate of the Company, which engages in the integrated energy business, carries long-term borrowings for project financing amounting to ￦450 billion from Korea Development Bank and others.

Related to the above project financing, NH Power II Co., Ltd. and Daewoo Securities Co., Ltd., has entered into an agreement with Yeocheon TPL Co., Ltd. to acquire shares in Hyundai Energy Co., Ltd. held by Yeocheon TPL Co., Ltd. The Company had placed guarantees for a fixed return on investment to the financial institutions and had obtained the rights to acquire the investment securities in return preferentially.

In addition, NH Power II Co., Ltd. and Daewoo Securities Co., Ltd. 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 contract to sell their shares to the Company. If dividends to shareholders exceed annual revenue, the exceeding amount shall be evenly distributed to Yeocheon TPL Co., Ltd. and the Company.

(iv)

Taebaek Wind Power Co., Ltd.

In case non-controlling shareholders decide to dispose of their shares in Taebaek Wind Power Co., Ltd. after the warrant period of defect repair for wind power generator has expired, the Company is obligated to acquire 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)

Pyeongchang Wind Power Co., Ltd.

In case non-controlling shareholders decide to dispose of their shares in Pyeongchang Wind Power Co., Ltd. after commercial operation of the power plant has started, the Company is obligated to acquire 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.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(7)

As of March 31, 2014, shareholders’ agreements on investments in associates and joint ventures that may cause future economic costs or cash outflows are as follows, continued:

(vi)

Daeryun Power Co., Ltd.

All shareholders of Daeryun Power Co., Ltd. except for POSCO Construction Co., Ltd., have agreed to acquire the shares held by POSCO Construction Co., Ltd. This acquisition shall be made at issuance price of the share in proportion to each shareholder’s percentage of ownership within two months after the completion of EPC construction. In connection with this agreement, the company, one of the shareholders of Daeryun Power Co., Ltd., is obligated to acquire 1,210,772 shares of POSCO Construction Co., Ltd.’s investment, which amounts to ￦6,054 million. In case of a merger of Daeryun Power Co., Ltd., remaining shareholders are obligated to pay the dissident shareholders’ share for their purchased price.

(vii)

Jeongam Wind Power Co., Ltd.

In case non-controlling shareholders except for financial investors decide to dispose of their shares in Jeongam Wind Power Co., Ltd. after the construction of the power plant has been completed, the Company is obligated to acquire those shares at fair value.

(viii)

Daejung Offshore Wind Power Co., Ltd.

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

(Ix)

Dongducheon Dream Power Co., Ltd.

In case financial investors decide to dispose of their shares in Dongducheon Dream Power Co., Ltd. 5 years after the commencement of commercial operation of the power plant, the Company is obligated to acquire those shares at fair value.

(X)

DS Power Co., Ltd.

The Company has a right to sell all shares and bonds of DS POWER Co., Ltd to Daesung Industrial Co., Ltd and Daesung Industrial Co., Ltd. or an authoritative person appointed by Daesung Industrial Co., Ltd.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

17.

Investments in Associates and Joint Ventures, Continued

(8)

Significant restrictions on its abilities to associates or joint ventures are as follows:


Company		Nature and extent of any significant restrictions

KNOC Nigerian East Oil Co., Ltd.		The company has stopped its operation in Nigeria due to an ongoing litigation and payment or retrieval of investments, loans and advances are restricted until the legal dispute is resolved.

KNOC Nigerian West Oil Co., Ltd.		The company has stopped its operation in Nigeria due to an ongoing litigation and payment or retrieval of investments, loans and advances are restricted until the legal dispute is resolved.

Dolphin Property Limited		The company has stopped its operation in Nigeria due to an ongoing litigation and payment or retrieval of investments, loans and advances are restricted until the legal dispute is resolved.

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

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

Busan Solar Co., Ltd.		Dividends cannot be declared or paid without the prior written consent of an agency, Consus Asset Management Co., Ltd. based on the loan agreement until the principal of a loan is paid off in full.

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.

Daegu Green Power Co., Ltd.		Only if the condition is met with the loan agreement signed by financial institutions, the investors of subordinated credit facility loans can receive payments of principal and interest and dividend. Korea Exchange Bank, the deputy, permits the amount of the payments and dividend.

KS Solar Corp. Ltd.		Dividends can only be paid to shareholders when all conditions of a loan agreement are satisfied.

Jeonnam Solar Co., Ltd.		Dividends can only be paid to shareholders when all conditions of a loan agreement are satisfied.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

18.

Property, Plant and Equipment

(1)

Property, plant and equipment as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Acquisition cost		Government grants			Accumulated depreciation			Accumulated impairment *losses ()**			Book value

Land	￦	13,849,730		(3,085	)		—			—			13,846,645
Buildings		12,713,269		(45,354	)		(4,264,319	)		(852	)		8,402,744
Structures		52,627,167		(196,052	)		(14,712,223	)		(1,183	)		37,717,709
Machinery		47,632,880		(100,061	)		(14,167,731	)		(46,231	)		33,318,857
Ships		5,014		—			(3,682	)		—			1,332
Vehicles		195,910		(72	)		(150,643	)		—			45,195
Equipment		875,348		(902	)		(701,026	)		—			173,420
Tools		718,657		(262	)		(588,486	)		—			129,909
Construction-in- progress		29,557,338		(131,665	)		—			—			29,425,673
Finance lease assets		2,385,237		—			(1,682,822	)		—			702,415
Asset retirement costs		7,766,544		—			(2,179,686	)		—			5,586,858
Others		7,897,281		—			(5,836,873	)		—			2,060,408


	￦	176,224,375		(477,453	)		(44,287,491	)		(48,266	)		131,411,165


In millions of won	December 31, 2013
	Acquisition cost		Government grants			Accumulated depreciation			Accumulated impairment *losses ()**			Book value

Land	￦	13,784,026		(3,137	)		—			—			13,780,889
Buildings		12,672,055		(45,396	)		(4,121,506	)		(852	)		8,504,301
Structures		52,080,007		(193,189	)		(14,259,717	)		(1,183	)		37,625,918
Machinery		47,073,366		(101,808	)		(13,297,596	)		(46,231	)		33,627,731
Ships		5,014		—			(3,592	)		—			1,422
Vehicles		195,045		(83	)		(149,326	)		—			45,636
Equipment		866,999		(707	)		(679,842	)		—			186,450
Tools		716,749		(312	)		(577,085	)		—			139,352
Construction-in- progress		27,452,032		(117,728	)		—			—			27,334,304
Finance lease assets		2,385,231		—			(1,650,046	)		—			735,185
Asset retirement costs		7,787,832		—			(2,133,236	)		—			5,654,596
Others		7,679,146		—			(5,677,334	)		—			2,001,812


	￦	172,697,502		(462,360	)		(42,549,280	)		(48,266	)		129,637,596

(*)	The Company separately recognizes impairment loss on each asset, reflecting various factors such as physical impairment during the replacement.

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

18.

Property, Plant and Equipment, Continued

(2)

Changes in property, plant and equipment for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Beginning balance			Acquisition			Disposal			Depreciation			Others			Ending balance

Land	￦	13,784,026			61,216			(2,031	)		—			6,519			13,849,730
(Government grants)		(3,137	)		—			53			—			(1	)		(3,085	)
Buildings		8,549,697			266			(423	)		(140,606	)		39,164			8,448,098
(Government grants)		(45,396	)		—			—			831			(789	)		(45,354	)
Structures		37,819,108			51			(51,624	)		(499,670	)		645,896			37,913,761
(Government grants)		(193,190	)		—			192			2,205			(5,259	)		(196,052	)
Machinery		33,729,539			55,004			(17,450	)		(880,943	)		532,768			33,418,918
(Government grants)		(101,808	)		—			103			2,422			(778	)		(100,061	)
Ships		1,422			—			—			(90	)		—			1,332
Vehicles		45,719			565			106			(5,164	)		4,041			45,267
(Government grants)		(83	)		—			—			11			—			(72	)
Equipment		187,158			5,487			(25	)		(20,499	)		2,201			174,322
(Government grants)		(708	)		—			—			95			(289	)		(902	)
Tools		139,665			1,800			(1,290	)		(14,516	)		4,512			130,171
(Government grants)		(313	)		—			—			51			—			(262	)
Construction-in-progress		27,452,029			3,467,991			(588	)		—			(1,362,094	)		29,557,338
(Government grants)		(117,725	)		(15,518	)		—			—			1,578			(131,665	)
Finance lease assets		735,185			—			—			(32,775	)		5			702,415
Asset retirement cost		5,654,596			—			—			(139,879	)		72,141			5,586,858
Others		2,001,812			3,844			(119	)		(159,552	)		214,423			2,060,408


	￦	129,637,596			3,580,706			(73,096	)		(1,888,079	)		154,038			131,411,165

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

18.

Property, Plant and Equipment, Continued

(2)

Changes in property, plant and equipment for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won	December 31, 2013
	Beginning balance			Acquisition			Disposal			Depreciation			Others			Ending balance

Land	￦	13,504,739			23,651			(60,971	)		—			316,607			13,784,026
(Government grants)		(3,106	)		—			—			—			(31	)		(3,137	)
Buildings		8,554,893			10,009			(21,296	)		(583,106	)		589,197			8,549,697
(Government grants)		(44,387	)		—			—			3,943			(4,952	)		(45,396	)
Structures		37,413,557			2,645			(194,106	)		(1,967,475	)		2,564,487			37,819,108
(Government grants)		(177,174	)		—			1,733			8,389			(26,138	)		(193,190	)
Machinery		32,684,326			343,445			(135,269	)		(3,334,480	)		4,171,517			33,729,539
(Government grants)		(105,112	)		—			376			9,507			(6,579	)		(101,808	)
Ships		1,786			—			—			(367	)		3			1,422
Vehicles		37,245			2,579			(111	)		(18,653	)		24,659			45,719
(Government grants)		(128	)		—			—			45			—			(83	)
Equipment		183,156			45,087			(200	)		(87,040	)		46,155			187,158
(Government grants)		(923	)		—			—			311			(96	)		(708	)
Tools		122,132			31,234			(226	)		(56,143	)		42,668			139,665
(Government grants)		(193	)		—			—			155			(275	)		(313	)
Construction-in-progress		21,279,059			13,888,637			(1,515	)		—			(7,714,152	)		27,452,029
(Government grants)		(94,673	)		(48,721	)		—			—			25,669			(117,725	)
Finance lease assets		863,677			—			(7,456	)		(133,133	)		12,097			735,185
Asset retirement cost		5,963,166			—			—			(559,624	)		251,054			5,654,596
Others		2,194,100			7,531			(128	)		(585,418	)		385,727			2,001,812

	￦	122,376,140			14,306,097			(419,169	)		(7,303,089	)		677,617			129,637,596

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

19.

Investment Properties

(1)

Investment properties as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Acquisition cost		Government grants			Accumulated depreciation			Accumulated impairment losses		Book value

Land	￦	527,491		—			—			—		527,491
Buildings		37,176		(10	)		(15,243	)		—		21,923


	￦	564,667		(10	)		(15,243	)		—		549,414


In millions of won	December 31, 2013
	Acquisition cost		Government grants			Accumulated depreciation			Accumulated impairment losses		Book value

Land	￦	516,440		—			—			—		516,440
Buildings		37,120		(13	)		(15,220	)		—		21,887


	￦	553,560		(13	)		(15,220	)		—		538,327

(2)

Changes in investment properties for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Beginning balance			Acquisition		Disposal		Depreciation			Impairment		Others		Ending balance

Land	￦	516,440			—		—		—			—		11,051		527,491
Buildings		21,899			—		—		(183	)		—		217		21,933
(Government grants)		(12	)		—		—		—			—		2		(10	)

	￦	538,327			—		—		(183	)		—		11,270		549,414


In millions of won	December 31, 2013
	Beginning balance			Acquisition		Disposal		Depreciation			Impairment		Others			Ending balance

Land	￦	564,195			—		—		—			—		(47,755	)		516,440
Buildings		26,270			—		—		(911	)		—		(3,460	)		21,899
(Government grants)		(242	)		—		—		3			—		227			(12	)

	￦	590,223			—		—		(908	)		—		(50,988	)		538,327

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

19.

Investment Properties, Continued

(3)

Income and expenses related to investment properties for the three-month period ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014			March 31, 2013

Rental income	￦	2,735			1,960
Operating and maintenance expenses		(183	)		(226	)

	￦	2,552			1,734

(4)

Fair value of investment properties as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
	Book value		Fair value		Book value		Fair value

Land	￦	527,491		556,926		516,440		541,564
Buildings		21,923		22,645		21,887		22,680


	￦	549,414		579,571		538,327		564,244

The fair values of the investment properties as of the reporting date were determined in consideration of the fluctuation on the publicly notified individual land price after the K-IFRS adoption date.

(5)

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

20.

Construction Services Contracts

(1)

Changes in balance of construction service contracts for the three-month period ended March 31, 2014 and for the year ended December 31 are as follows:


In millions of won	March 31, 2014
	Beginning balance		Increase and decrease(*)		Recognized revenue			Ending balance

Nuclear power plant construction in UAE	￦	18,522,411		194,566		(428,147	)		18,288,830
Kazakhstan EPC and others		811,005		173,504		(120,601	)		863,908


	￦	19,333,416		368,070		(548,748	)		19,152,738

(*)	For the three-month period ended March 31, 2014, the increased balance of contracts from new orders and others is ￦395,569 million and the decreased balance of contracts from modifications of construction contracts and others is ￦27,499 million.

100

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

20.

Construction Service Contracts, Continued

(1)

Changes in balance of construction service contracts for the three-month period ended March 31, 2014 and for the year ended December 31 are as follows, continued:


In millions of won	December 31, 2013
	Beginning balance		Increase and decrease(*)			Recognized revenue			Ending balance

Nuclear power plant construction in UAE	￦	20,359,685		(135,311	)		(1,701,963	)		18,522,411
Kazakhstan EPC and others		607,230		754,895			(551,120	)		811,005

	￦	20,966,915		619,584			(2,253,083	)		19,333,416

(*)	For the year ended December 31, 2013, the increased balance of contracts from new orders and other is ￦777,955 million and the increased balance of contracts from changes in size of construction is ￦158,371 million.

(2)

Accumulated earned revenue, expense and others related to the Company’s construction as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Accumulated earned revenue		Accumulated expense		Accumulated profit		Unearned advance receipts

Nuclear power plant construction in UAE	￦	5,388,967		5,107,641		281,326		—
Kazakhstan EPC and others		892,288		859,001		33,287		—

	￦	6,281,255		5,966,642		314,613		—


In millions of won	December 31, 2013
	Accumulated earned revenue		Accumulated expense		Accumulated profit		Unearned advance receipts

Nuclear power plant construction in UAE	￦	4,960,820		4,708,008		252,812		—
Kazakhstan EPC and others		1,087,779		1,024,156		63,623		—

	￦	6,048,599		5,732,164		316,435		—

(3)

Gross amount due from customers recognized as assets and due to customers recognized as liabilities for contract work as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
	*Assets (1)**		*Liabilities (2)**		*Assets (1)**		*Liabilities (2)**

Nuclear power plant construction in UAE	￦	—		1,041,002		—		812,642
Kazakhstan EPC and others		105,802		8,229		98,726		30,907


	￦	105,802		1,049,231		98,726		843,549

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

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

101

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

21.

Intangible Assets other than Goodwill

(1)

Intangible assets as of of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Acquisition cost		Government grants			Accumulated amortization			Accumulated impairment losses			Book value

Software	￦	341,587		(447	)		(278,688	)		—			62,452
Licenses and franchises		3,398		—			(3,289	)		—			109
Copyrights, patents rights and other industrial rights		31,258		—			(7,010	)		—			24,248
Mining rights		505,831		—			(6,823	)		—			499,008
Development expenditures		724,744		(11,181	)		(653,080	)		—			60,483
Intangible assets under development		54,542		(8,190	)		—			—			46,352
Usage rights of donated assets and other		373,376		(51	)		(310,892	)		—			62,433
Leasehold rights		19,112		—			(18,308	)		—			804
Others		160,097		—			(66,868	)		(12,579	)		80,650


	￦	2,213,945		(19,869	)		(1,344,958	)		(12,579	)		836,539


In millions of won	December 31, 2013
	Acquisition cost		Government grants			Accumulated amortization			Accumulated impairment losses			Book value

Software	￦	335,489		(428	)		(269,740	)		—			65,321
Licenses and franchises		3,398		—			(3,190	)		—			208
Copyrights, patents rights and other industrial rights		31,218		—			(6,265	)		—			24,953
Mining rights		476,844		—			(6,286	)		—			470,558
Development expenditures		722,082		(11,705	)		(645,928	)		—			64,449
Intangible assets under development		52,050		(7,792	)		—			—			44,258
Usage rights of donated assets and other		373,376		(53	)		(308,666	)		—			64,657
Leasehold rights		19,112		—			(18,300	)		—			812
Others		152,917		(1	)		(64,889	)		(12,579	)		75,448


	￦	2,166,486		(19,979	)		(1,323,264	)		(12,579	)		810,664

102

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

21.

Intangible Assets other than Goodwill, Continued

(2)

Changes in intangible assets for the three-month period ended March 31, 2014 and for the year ended December 31 are as follows:


In millions of won	March 31, 2014
	Beginning balance			Acquisition			Disposal		Amortization			Impairment		Others			Ending balance

Software	￦	65,751			163			—		(8,882	)		—		5,867			62,899
(Government grants)		(430	)		—			—		43			—		(60	)		(447	)
Licenses and franchises		208			—			—		(99	)		—		—			109
Copyrights, patents rights and other industrial rights		24,953			23			—		(736	)		—		8			24,248
Mining rights		470,558			7,989			—		(403	)		—		20,864			499,008
Development expenditures		76,154			3			—		(7,127	)		—		2,634			71,664
(Government grants)		(11,705	)		—			—		1,051			—		(527	)		(11,181	)
Intangible assets under development		52,050			4,776			—		—			—		(2,284	)		54,542
(Government grants)		(7,792	)		(1,064	)		—		—			—		666			(8,190	)
Usage rights of donated assets and other		64,710			—			—		(2,226	)		—		—			62,484
(Government grants)		(53	)		—			—		2			—		—			(51	)
Leasehold rights		812			—			—		(8	)		—		—			804
Others		75,449			138			—		(1,478	)		—		6,541			80,650
(Government grants)		(1	)		—			—		1			—		—			—


	￦	810,664			12,028			—		(19,862	)		—		33,709			836,539


In millions of won	December 31, 2013
	Beginning balance			Acquisition			Disposal			Amortization			Impairment			Others			Ending balance

Software	￦	83,370			12,311			—			(39,419	)		—			9,489			65,751
(Government grants)		(199	)		—			—			160			—			(391	)		(430	)
Licences and franchises		844			—			—			(636	)		—			—			208
Copyrights, patents rights and other industrial rights		16,481			587			(1	)		(2,130	)		—			10,016			24,953
Mining rights		525,806			27,429			—			(1,698	)		—			(80,979	)		470,558
Development expenditures		80,689			651			—			(34,892	)		—			29,706			76,154
(Government grants)		(12,371	)		—			—			5,686			—			(5,020	)		(11,705	)
Intangible assets under development		44,316			30,608			—			—			(4	)		(22,870	)		52,050
(Government grants)		(7,305	)		(5,845	)		—			—			—			5,358			(7,792	)
Usage rights of donated assets and other		72,343			—			—			(8,798	)		—			1,165			64,710
(Government grants)		(64	)		—			—			11			—			—			(53	)
Leasehold rights		847			—			—			(35	)		—			—			812
Others		79,058			3,266			(35	)		(6,628	)		(263	)		51			75,449
(Government grants)		(1	)		—			—			—			—			—			(1	)


	￦	883,814			69,007			(36	)		(88,379	)		(267	)		(53,475	)		810,664

103

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

21.

Intangible Assets other than Goodwill, Continued

(3)

Significant specific intangible assets as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won and thousands of Australian dollars
March 31, 2014
Type	Description	Currency	Amount		Remaining useful years

Software	ERP system and others	KRW		7,197	1 year and 8 months ~ 1 years and 11 months
Copyrights, patents rights and other industrial rights	Smart technology verification and standard design project conducting right	KRW		8,500	8 years and 6 months
Mining rights	Mining right of Bylong mine	AUD		401,225	— (*)
Development expenditures	KOSPO Evolutionary Efficient & Powerful System(KEEPS)	KRW		7,766	3 years and 3 months
Development expenditures	Development of maintenance system for utility plant	KRW		2,071	3 years and 8 months
Intangible assets under development	Contributions to APR NRC DC	KRW		18,252	—
Intangible assets under development	CHF testing for best representative of HIPER/X2-Gen Fuel and development of best explanatory CHF correlation	KRW		7,475	—
Usage rights of donated assets	Songdo international business district(sector 1, 3) sharing charge	KRW		5,459	3 years and 7 months
Usage rights of donated assets	Dangjin power plant load facility usage right	KRW		44,074	7 years
Others	Shingwangju electricity supply facility usage right	KRW		3,473	5 years and 2 months
Others	Sillim electricity supply facility usage right	KRW		3,424	7 years and 8 months

(*)	Mining rights are amortized using the production method.

104

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

21.

Intangible Assets other than Goodwill, Continued

(3)

Significant specific intangible assets as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won and thousands of Australian dollars
December 31, 2013
Type	Description	Currency	Amount		Remaining useful years

Software	ERP system and others	KRW		8,163	1 year and 11 months ~ 2 years and 2 months
Copyrights, patents rights and other industrial rights	Smart technology verification and standard design project conducting right	KRW		8,750	8 years and 9 months
Mining rights	Mining right of Bylong mine	AUD		401,225	— (*)
Development expenditures	KOSPO Evolutionary Efficient & Powerful System(KEEPS)	KRW		8,629	3 years and 6 months
Development expenditures	Development of maintenance system for utility plant	KRW		2,212	3 years and 11 months
Intangible assets under development	Contributions to APR NRC DC	KRW		18,252	—
Intangible assets under development	CHF testing for best representative of HIPER/X2-Gen Fuel and development of best explanatory CHF correlation	KRW		7,448	—
Usage rights of donated assets	Songdo international business district(sector 1, 3) sharing charge	KRW		5,840	3 years and 10 months
Usage rights of donated assets	Dangjin power plant load facility usage right	KRW		45,648	7 years and 3 months
Others	Shingwangju electricity supply facility usage right	KRW		3,641	5 years and 5 months
Others	Sillim electricity supply facility usage right	KRW		3,536	7 years and 11 months

(*)	Mining rights are amortized using the production method.

(4)

For the three-month periods ended March 31, 2014 and 2013, the Company recognized research and development expenses of ￦112,005 million and ￦118,551 million, respectively.

105

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

22.

Trade and Other Payables

Trade and other payables as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
	Current		Non-current		Current		Non-current
Trade payables	￦	2,906,187		—		3,107,082		—
Other trade payables		1,213,461		3,107,075		1,475,048		3,068,631
Accrued expenses		1,026,924		2,333		1,076,868		2,318
Leasehold deposits received		1,627		—		1,636		—
Other deposits received		140,648		89,246		115,216		90,055
Finance lease liabilities		112,756		742,259		115,308		769,658
Dividends payable		101,128		—		1,605		—
Others		—		36,984		—		40,857


	￦	5,502,731		3,977,897		5,892,763		3,971,519

23.

Borrowings and Debt Securities

(1)

Borrowings and debt securities as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014			December 31, 2013
Current liabilities
Short-term borrowings	￦	926,780			579,327
Current portion of long-term borrowings		805,046			893,532
Current portion of debt securities		6,448,729			6,625,007
Less: Current portion of discount on long-term borrowings		(1,603	)		(1,997	)
Less: Current portion of discount on debt securities		(2,763	)		(8,371	)

		8,176,189			8,087,498

Non-current liabilities
Long-term borrowings		4,490,154			4,555,769
Debt securities		49,033,143			48,367,149
Less : Discount on long-term borrowings		(16,927	)		(17,379	)
Less : Discount on debt securities		(110,753	)		(105,240	)
Add: Premium on debt securities		320			353

		53,395,937			52,800,652


	￦	61,572,126			60,888,150

106

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(2)

Short-term borrowings as of March 31, 2014 and December 31, 2013 are as follows:

In millions of won

March 31, 2014

Type

Creditor

Interest rate (%)

Foreign
currency

Local
currency

Local short-term borrowings

Korea Exchange Bank and others

2.56 ~ 2.76

—

￦

245,000

Local commercial paper

Samsung Securities and others

0.65 ~ 2.76

—

240,500

Foreign short-term borrowings

RBS and others

0.16 ~ 1.11

USD

37,449

400,258

Credit Agricole

3M Libor+0.35

USD

3,471

37,103

Local bank overdraft

Woori Bank

Standard overdraft
rate + 1.27

—

3,919

￦

926,780

In millions of won

December 31, 2013

Type

Creditor

Interest rate (%)

Foreign
currency

Local
currency

Local short-term borrowings

Shinhan Bank and others

2.78

—

￦

70,000

Local commercial paper

Korea Exchange Bank and others

2.80 ~ 2.85

—

297,500

Foreign short-term borrowings

ANZ and others

0.67 ~ 6.50

USD

154,313

162,846

Foreign short-term borrowings

Scotia Bank

TIIE + 1.25

USD

5,447

5,748

Local bank overdraft

Woori Bank

Standard overdraft
rate + 1.27

—

43,233

￦

579,327

107

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(3)

Long-term borrowings as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won and thousands of foreign currencies
March 31, 2014
Type		Interest rate (%)	Maturity	Foreign currency		Local currency
Local long-term borrowings
Korea Development Bank	Others	0.5	2014 ~ 2044		—	￦	7,834
	Facility	4.60	2028		—		43,600
	Facility	3yr KTB rate –1.25	2027		—		9,000
Korea Exchange Bank	Commercial Paper	3M CD+ 0.03~0.54	2014 ~ 2016		—		1,100,000
	Facility	3yr KTB rate –1.25	2021 ~ 2028		—		11,602
	Facility	4.60	2028		—		20,000
	Energy rationalization	3yr KTB rate – 1.25	2019		—		1,000
	Energy rationalization	2.75~3.20	2015~2016		—		7,381
Korea Industrial Bank	Development of power resources	4.00	2016		—		14,200
	Others	KTB rate–1.25	2016		—		12,000
Kookmin Bank	Development of power resources	4.00	2015		—		12,540
Hana Bank	Development of power resources	4.00	2014		—		8,000
	Others	KTB rate–1.25	2014		—		12,300
	PF Refinancing	CD+1.70	2026		—		21,613
	PF Refinancing	4.80	2026		—		11,991
Export-Import Bank of Korea	Project loans	2.00	2026		—		36,827
Korea Finance Corporation	Facility	1yr KoFC bond rate + 0.20 ~ 0.31	2018 ~ 2019		—		2,300,000
Korea Resources Corporation	Development of power resources	3yr KTB rate –2.25	2022 ~ 2027		—		40,741
	Facility	3yr KTB rate –2.25	2023 ~ 2024		—		5,270
	Project loans	—	2022 ~ 2027		—		8,677
	Others	KTB rate-2.25	2022 ~ 2025		—		19,554
Shinhan Bank	Facility	3yr Corporate bond AA-+1.10	2028		—		30,000
Woori Bank	PF Refinancing	CD+1.70	2023 ~ 2026		—		21,613
	PF Refinancing	4.80	2026		—		11,991
Others	Facility	4.60~5.80	2025 ~ 2028		—		158,260
	PF Refinancing	4.80	2026		—		17,267
	PF Refinancing	CD+1.70	2026		—		523
	Others	9.00	2015		—		16,427
	Others	—	2023~2028		—		30,689


					—		3,990,900

108

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(3)

Long-term borrowings as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won and thousands of foreign currencies
March 31, 2014
Type		Interest rate (%)	Maturity	Foreign currency		Local currency
Foreign long-term borrowings
Korea National Oil Corporation	Project loans	—	2021 ~ 2023	USD	8,784	￦	9,388
Export-Import Bank of US and others	Project loans	4.48 ~ 8.28	2014	USD	14,662		15,672
JBIC	Project loans	6M Libor + 1.20	2014	USD	4,040		4,318
Export-Import Bank of Korea and others	Direct loans and others	3M Libor + 2.60~3.70	2027	JOD	205,072		309,511
	Commercial Loan and others	3M Libor+ 1.50~2.50	2030~2033	USD	300,754		321,446
SCNT and others	Shareholder’s loan	6.50	2033	USD	41,142		43,973
	Shareholder’s loan	8.00	2031	JOD	8,498		12,826
PT PJB and others	Shareholder’s loan	12.75	2017	IDR	23,362,297		2,198
HSBC and others	Syndicated loan	3M Libor + 0.27~1.50	2014 ~ 2017	USD	374,124		399,865
Others	Others	3M Libor+0.95	2017	USD	162,092		173,245
	Others	—	2019	USD	11,041		11,802
	Others	3M Euribor + 4.5%	2018	EUR	38		56

							1,304,300

							5,295,200

Less : Discount of long-term borrowings							(18,530	)
Less : Current portion of long-term borrowings							(805,046	)
Add : Current portion of discount of long-term borrowings							1,603

						￦	4,473,227

109

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(3)

Long-term borrowings as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won and thousands of foreign currencies
December 31, 2013
Type		Interest rate (%)	Maturity	Foreign currency		Local currency
Local long-term borrowings
Korea Development Bank	Others	0.50	2014~2044		—	￦	8,109
	Facility	4.60	2028		—		43,600
	Facility	3yr KTB rate – 1.25	2027		—		9,000
Korea Exchange Bank	Commercial Paper	3M CD + 0.03~0.54	2014~2016		—		1,300,000
	Facility	3yr KTB rate – 1.75	2021		—		11,779
	Facility	4.60	2028		—		20,000
	Energy rationalization	3yr KTB rate – 1.75	2015~2019		—		1,050
	Energy rationalization	2.75 ~ 3.20	2015~2016		—		7,381
Korea Industrial Bank	Development of power resources	4.00	2016		—		14,200
	Others	3yr KTB rate – 1.25	2016		—		12,000
Kookmin Bank	Development of power resources	4.00	2015		—		12,540
Hana Bank	Development of power resources	4.00	2014		—		8,000
	Others	3yr KTB rate – 1.25	2024~2025		—		12,300
	PF Refinancing	CD+1.7%	2026		—		21,613
	PF Refinancing	4.80	2026		—		11,991
Export-Import Bank of Korea	Project loans	2.00	2026		—		36,827
Korea Finance Corporation	Facility	1yr KoFC bond rate + 0.20 ~ 0.31	2018~2019		—		2,300,000
Korea Resources Corporation	Development of power resources	3yr KTB rate – 2.25	2014~2027		—		64,202
	Facility	0.75 ~ 1.75	2023		—		5,355
Project loans		—	—		—		8,677
	Others	3yr KTB rate – 2.25	2024~2025		—		13,707
Shinhan Bank and others	Facility	3yr AA-CB rate + 1.10	2028		—		30,000
Woori Bank	PF Refinancing	CD+1.7%	2026		—		21,613
	PF Refinancing	4.80	2026		—		11,991
Others	Facility	4.60~5.80	2025~2028		—		159,200
	PF Refinancing	4.80	2026		—		17,267
	PF Refinancing	CD+1.7%	2026				524
	Others	3yr KTB rate – 2.25	2023~2028		—		30,774


							4,193,700

110

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(3)

Long-term borrowings as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won and thousands of foreign currencies
December 31, 2013
Type		Interest rate (%)	Maturity	Foreign currency		Local currency
Foreign long-term borrowings
Korea National Oil Corporation	Project loans	3yr KTB rate –2.25	—	USD	8,784	￦	9,270
Export-Import Bank of US	Project loans	4.48	2014	USD	5,598		5,908
JBIC	Project loans	6M Libor +1.2	2014	USD	10,301		10,870
Export-Import Bank of Korea and others	Project loans	7.20	2014	USD	2,803		2,958
	Term loan	LIBOR + 2.25	2033	USD	151,921		160,322
	Direct loan and others	LIBOR + 2.6~3.7	2027	JOD	129,975		194,062
Proparco and others	Shareholder’s loan	LIBOR + 3.7	2027	USD	106,249		112,125
PT PJB	Shareholder’s loan	8.00	2031	JOD	8,498		12,688
	Shareholder’s loan	6.50	—	USD	31,876		33,639
	Shareholder’s loan	12.75	2017	IDR	22,446,293		1,939
SMBC and others	Commercial loan and others	LIBOR + 1.5~2.5	2030~2033	USD	131,603		138,881
HSBC and others	Syndicated loan	3M Libor+0.27~ 1.50	2014~2017	USD	374,124		394,813
Others	Others	—	2019~2031	USD	11,276		11,900
	Others	LIBOR + 0.95	—	USD	157,516		166,226

							1,255,601

							5,449,301

Less : Discount of long-term borrowings							(19,376	)
Less : Current portion of long-term borrowings							(893,532	)
Add : Current portion of discount of long-term borrowings							1,997


						￦	4,538,390

111

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(4)

Local debt securities as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won
	Issue date		Maturity		Interest rate (%)	March 31, 2014			December 31, 2013

Electricity Bonds		2008.06.05 ~ 2013.06.28		2014.04.28 ~ 2032.08.06	2.77 ~ 7.19	￦	26,310,000			27,290,000
Electricity Bonds		2010.05.28 ~ 2013.06.25		2015.05.28~ 2018.06.25	3M CD + 0.25 ~ 1.05		1,160,000			1,160,000
Corporate Bonds		2008.11.13 ~ 2014.03.26		2014.04.19~ 2040.12.10	2.60 ~ 7.18		16,030,010			15,150,010

							43,500,010			43,600,010

Less : Discount on local debt securities							(39,637	)		(37,675	)
Less : Current portion of local debt securities							(4,350,000	)		(4,250,000	)
Add : Current portion of discount on local debt securities							1,012			679


						￦	39,111,385			39,313,014

(5)

Foreign debt securities as of March 31, 2014 and December 31, 2013 are as follows:

In millions of won

March 31, 2014

Type

Issue date

Maturity

Interest rate (%)

Foreign currency

Local
currency

FY-96

1996.04.01~1996.12.06

2026.12.06~2096.04.01

6.00~8.37

USD

250,022

￦

267,223

FY-97

1997.01.31~2027.01.31

2027.01.31~2027.08.04

6.75~7.00

USD

314,717

336,370

FY-04(*)

2004.04.21~2004.07.21

2014.07.21~2034.04.21

5.13~5.75

USD

450,000

480,960

FY-06

2006.03.14~2006.09.29

2016.03.14~2016.09.29

5.50~6.00

USD

650,000

694,720

FY-08

2008.11.27

2018.11.27

4.19

JPY

20,000,000

207,746

FY-09

2009.06.17~2009.07.21

2014.06.17~2014.07.21

5.50~6.25

USD

1,500,000

1,603,200

FY-10

2010.09.16~2010.10.05

2015.09.16~2015.10.05

3.00~3.13

USD

1,200,000

1,282,560

FY-10

2010.07.29~2010.11.18

2015.07.29~2015.11.18

3M Libor+1.00~1.64

USD

250,000

267,200

FY-11

2011.07.13~2011.07.29

2017.01.30~2021.07.13

3.63~4.75

USD

800,000

855,040

FY-11

2011.02.18~2011.04.15

2014.04.15~2011.04.15

3M USD Libor+0.80~1.00

USD

300,000

320,640

FY-12

2012.05.10~2012.09.19

2017.05.10~2022.09.19

2.50~3.13

USD

1,750,000

1,870,400

FY-13

2013.02.05~2013.11.27

2018.02.05~2018.11.27

1.88~3.16

USD

1,900,000

2,030,720

FY-13

2013.09.26~2013.10.23

2019.03.26~2019.04.23

1.50 ~ 1.63

CHF

400,000

481,820

FY-13

2013.09.25

2020.09.25

5.75

AUD

325,000

321,344

FY-13

2013.02.20~2013.07.25

2018.02.20~2018.07.25

3M Libor+0.84~1.50

USD

500,000

534,400

FY-14

2014.02.11

2019.02.11

2.75

USD

300,000

320,640

FY-14

2014.01.28

2017.01.28

3M Libor+105bp

USD

100,000

106,879

11,981,862

Less : Discount on foreign debt securities

(73,879

)

Add : Premium on foreign debt securities

320

Less : Current portion of foreign debt securities

(2,098,729

)

Add : Current portion of discount on foreign debt securities

1,751

￦

9,811,325

(*)	For Global 4 in FY-04, early redemption of USD 13,080,000 was requested during the three-month period ended March 31, 2014 and remaining amount has been converted to non-current portion based on the redemption date (April 23, 2014).

112

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

23.

Borrowings and Debt Securities, Continued

(5)

Foreign debt securities as of March 31, 2014 and December 31, 2013 are as follows, continued:

In millions of won

December 31, 2013

Type

Issue date

Maturity

Interest rate (%)

Foreign currency

Local
currency

FY-96

1996.04.01~1996.12.06

2026.12.06~2096.04.01

6.00~8.37

USD

250,022

￦

263,848

FY-97

1997.01.31~1997.08.04

2027.01.31~2027.08.04

6.75~7.00

USD

314,717

332,121

FY-04(*)

2004.04.21~2004.07.21

2014.07.21~2034.04.21

5.13~5.75

USD

450,000

474,885

FY-06

2006.03.14~2006.09.29

2016.03.14~2016.09.29

5.50~6.00

USD

650,000

685,945

FY-08

2008.11.27

2018.11.27

4.19

JPY

20,000,000

200,932

FY-09

2009.06.17~2009.07.21

2014.06.17~2014.07.21

5.50~6.25

USD

1,500,000

1,582,950

FY-10

2010.09.16~2010.10.05

2015.09.16~2015.10.05

3.00~3.13

USD

1,200,000

1,266,360

FY-10

2010.07.29~2010.11.18

2015.07.29~2015.11.18

3M USD Libor+1.00~1.64

USD

250,000

263,825

FY-11

2011.07.13~2011.07.29

2017.01.29~2021.07.13

3.63~4.75

USD

800,000

844,240

FY-11

2011.02.18~2011.04.15

2014.04.15~2014.09.17

3M USD Libor+0.80~1.00

USD

300,000

316,590

FY-12

2012.05.10~2012.09.19

2017.05.10~2022.09.19

2.50~3.00

USD

1,750,000

1,846,775

FY-13

2013.02.20~2013.07.25

2018.02.20~2018.07.25

3M USD Libor+0.84~1.5

USD

500,000

527,650

FY-13

2013.09.25

2020.09.25

5.75

AUD

325,000

305,487

FY-13

2013.09.26~2013.10.23

2019.03.26~2019.04.23

1.50~1.63

CHF

400,000

475,468

FY-13

2013.02.05~2013.11.27

2018.02.05~2018.11.27

1.88~3.16

USD

1,900,000

2,005,070

11,392,146

Less : Discount on foreign debt securities

(75,936

)

Add : Premium on foreign debt securities

353

Less : Current portion of foreign debt securities

(2,375,007

)

Add : Current portion of discount on foreign debt securities

7,692

￦

8,949,248

(*)	Global 4 in FY-04 can be redeemed on April 23, 2014 if bond holders claim the redemption from February 7, 2014 (75 days) to February 22, 2014 (60 days).

113

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

24.

Finance Lease Liabilities

(1)

Lease contracts

The Company enters into a power purchase agreements (“PPA”) under which the Company is committed to purchase an aggregate capacity of 3,770 megawatts for approximately twenty years from independent power producers, such as, GS EPS and three other providers. The Company recognizes these PPAs as finance leases; under the PPAs, there is no transfer of ownership or bargain purchase option of the plants at the end of the agreement, however, the present value of the future minimum power purchase payments equals substantially all of the plants’ respective fair values over a twenty-year period which makes up the major part of the respective plants’ economic life.

(2)

Finance lease liabilities as of March 31, 2014 and December 31, 2013 are as follows and are included in current and non-current trade and other payables, net, in the accompanying consolidated statements of financial position:


In millions of won	March 31, 2014				December 31, 2013
	Minimum lease payments		Present value of minimum lease payments		Minimum lease payments		Present value of minimum lease payments

Less than 1 year	￦	196,604		112,756		202,309		115,308
1 ~ 5 years		692,653		505,599		716,928		521,031
More than 5 years		359,814		236,660		381,742		248,627


	￦	1,249,071		855,015		1,300,979		884,966

(3)

Current and non-current portion of financial lease liabilities as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014		December 31, 2013

Current finance lease liabilities	￦	112,756		115,308
Non-current finance lease liabilities		742,259		769,658


	￦	855,015		884,966

(4)

Lease payments recognized as an expense from a lessee position for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014			March 31, 2013

Minimum lease payment	￦	63,080			69,720
Contingent rent payment		(4,607	)		(4,054	)

(5)

The Company does not have any irrevocable operating lease contracts as of March 31, 2014 and December 31, 2013.

114

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

25.

Employment Benefits

(1)

Employment benefit obligations as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014		December 31, 2013

Defined benefit obligations	￦	2,120,216		2,064,505
Other long-term employee benefit obligations		74,311		72,791


	￦	2,194,527		2,137,296

(2)

Principal assumptions on actuarial valuation as of March 31, 2014 and December 31, 2013 are as follows:


	March 31, 2014		December 31, 2013

Discount rate		3.70% ~ 4.00%		3.72% ~ 4.12%
Future salary and benefit levels		5.45%		4.80%
Weighted average duration		13.08 years		12.90 years

(3)

Details of expense relating to defined benefit plans for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014			March 31, 2013

Current service cost	￦	76,307			84,160
Interest cost		25,807			24,292
Expected return on plan assets		(5,603	)		(3,430	)
Others		—			—


	￦	96,511			105,022

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


In millions of won	March 31, 2014		March 31, 2013
Cost of sales	￦	69,316		74,898
Selling and administrative expenses		17,729		18,586
Others (Construction-in-progress and others)		9,466		11,538


	￦	96,511		105,022

In addition, for the three-month period ended March 31, 2014 and 2013, employee benefit obligations expenses of ￦11,411 million and ￦10,415 million, respectively, is recognized as cost of sales, and ￦967 million and ￦1,449 million, respectively, is recognized as selling and administrative expenses, and ￦3,384 million and ￦2,544 million, respectively relates to the Company’s defined contribution plans.

115

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

25.

Employment Benefits, Continued

(4)

Details of defined benefit obligations as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014			December 31, 2013

Present value of defined benefit obligation from funded plans	￦	2,686,679			2,629,057
Fair value of plan assets		(566,461	)		(564,552	)

		2,120,218			2,064,505

Present value of defined benefit obligation from unfunded plans		—			—


Net liabilities incurred from defined benefit plans	￦	2,120,218			2,064,505

(5)

Changes in the present value of defined benefit obligations for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014			December 31, 2013

Beginning balance	￦	2,629,057			2,542,207
Current service cost		76,307			348,945
Interest cost (*)		25,807			100,315
Remeasurement component		22,115			(204,478	)
Actual payments		(67,574	)		(157,711	)
Others		967			(221	)


Ending balance	￦	2,686,679			2,629,057

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

116

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

25.

Employment Benefits, Continued

(6)

Changes in the fair value of plan assets for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014			December 31, 2013

Beginning balance	￦	564,552			472,342
Expected return		5,603			15,975
Remeasurement component		(1,180	)		243
Contributions by the employers		113			90,011
Contributions by the employees		—			11,709
Actual payments		(2,769	)		(25,532	)
Others		142			(196	)


Ending balance	￦	566,461			564,552

In addition, gain or loss on accumulated remeasurement component amounted to ￦(40,065) million and ￦39,591 million and has been recognized as other comprehensive income for the three-month period ended March 31, 2014 and December 31, 2013, respectively.

(7)

Details of the fair value of plan assets as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014		December 31, 2013

Equity instruments	￦	28,525		35,463
Debt instruments		133,392		124,056
Bank deposit		109,191		117,626
Others		295,353		287,407


	￦	566,461		564,552

For the three-month period ended March 31, 2014 and the year ended December 31, 2013, actual returns on plan assets are amounted to ￦4,423 million and ￦16,218 million, respectively.

(8)

Remeasurement component recognized in other comprehensive income for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014		December 31, 2013

Actuarial gain from changes in demographic assumptions	￦	—		100,715
Actuarial gain (loss) from changes in financial assumptions		13,804		(351,257	)
Experience adjustments		8,311		46,064
Expected return		1,180		(243	)


	￦	23,295		(204,721	)

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

117

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

26.

Provisions

(1)

Provisions as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
	Current		Non-current		Current		Non-current

Employment benefits	￦	858,530		—		777,419		—
Provision for employment benefits		858,530		—		777,419		—
Litigation		—		23,161		—		23,720
Litigation provisions		—		23,161		—		23,720
Decommissioning cost		—		12,695,307		—		12,568,622
Nuclear plants		—		9,998,618		—		9,887,621
Spent fuel		—		1,228,390		—		1,211,440
Waste		—		1,254,365		—		1,249,062
PCBs		—		213,131		—		219,704
Other recovery provisions		—		803		—		795
Others		374,622		8,466		336,398		9,972
Power plant regional support program		116,766		—		112,498		—
Provisions for tax		—		649		—		649
Provisions for financial guarantee		—		7,023		—		8,789
Provisions for RPS		257,114		—		223,259		—
Others		742		794		641		534

	￦	1,233,152		12,726,934		1,113,817		12,602,314

118

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

26.

Provisions, Continued

(2)

Changes in provisions for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Beginning balance		Accretion expenses		Payment			Reversal			Other			Ending balance

Employment benefits	￦	777,419		185,524		(104,413	)		—			—			858,530
Provision for employment benefits		777,419		185,524		(104,413	)		—			—			858,530
Litigation		23,720		7,437		(5,937	)		(2,059	)		—			23,161
Litigation provisions		23,720		7,437		(5,937	)		(2,059	)		—			23,161
Decommissioning cost		12,568,622		243,923		(115,083	)		(4,614	)		92			12,695,307
Nuclear plants		9,887,621		110,997		—			—			—			9,998,618
Spent fuel		1,211,440		127,715		(110,765	)		—			—			1,228,390
Waste		1,249,062		5,211		—			—			92			1,254,365
PCBs		219,704		2,359		(4,318	)		(4,614	)		—			213,131
Other recovery provisions		795		8		—			—			—			803
Others		346,371		101,022		(38,982	)		(19,376	)		(5,947	)		383,088
Power plant regional support program		112,498		9,462		(8,400	)		—			3,206			116,766
Provisions for tax		649		—		—			—			—			649
Provisions for financial guarantee		8,789		—		—			(673	)		(1,093	)		7,023
Provisions for RPS		223,260		91,173		(30,576	)		(18,685	)		(8,058	)		257,114
Others		1,175		387		(6	)		(18	)		(2	)		1,536


	￦	13,716,132		540,273		(264,415	)		(26,049	)		(5,855	)		13,960,086

119

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

26.

Provisions, Continued

(2)

Changes in provisions for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows, continued:


In millions of won	December 31, 2013
	Beginning balance		Accretion expenses		Payment			Reversal			Other			Ending balance

Employment benefits	￦	816,612		625,921		(574,900	)		(90,214	)		—			777,419
Provision for employment benefits		816,612		625,921		(574,900	)		(90,214	)		—			777,419

Litigation		26,697		17,610		(8,874	)		(11,713	)		—			23,720
Litigation provisions		26,697		17,610		(8,874	)		(11,713	)		—			23,720

Decommissioning cost		12,133,393		872,465		(437,859	)					623			12,568,622
Nuclear plants		9,462,723		424,910		(12	)		—			—			9,887,621
Spent fuel		1,207,842		407,236		(403,638	)		—			—			1,211,440
Waste		1,242,396		29,490		(23,447	)		—			623			1,249,062
PCBs		219,669		10,797		(10,762	)		—			—			219,704
Other recovery provisions		763		32		—			—			—			795

Others		169,019		261,076		(97,788	)		(3,153	)		17,217			346,371
Power plant regional support program		106,763		35,952		(43,325	)		—			13,108			112,498
Provisions for tax		3,900		—		(3,251	)		—			—			649
Provisions for financial guarantee		9,086		1,667		—			(1,964	)		—			8,789
Provisions for RPS		48,795		222,824		(51,451	)		(1,130	)		4,222			223,260
Others		475		633		239			(59	)		(113	)		1,175

	￦	13,145,721		1,777,072		(1,119,421	)		(105,080	)		17,840			13,716,132

27.

Government Grants

(1)

Government grants as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014			December 31, 2013
Land	￦	(3,085	)		(3,137	)
Buildings		(45,354	)		(45,396	)
Structures		(196,052	)		(193,189	)
Machinery		(100,061	)		(101,808	)
Vehicles		(72	)		(83	)
Equipment		(902	)		(707	)
Tools		(262	)		(312	)
Construction-in-progress		(131,665	)		(117,728	)
Investment properties		(10	)		(13	)
Software		(447	)		(428	)
Development expenditures		(11,181	)		(11,705	)
Intangible assets under development		(8,190	)		(7,792	)
Usage rights of donated assets and other		(51	)		(53	)
Others		—			(1	)

	￦	(497,332	)		(482,352	)

120

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

27.

Government Grants, Continued

(2)

Changes in government grants for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:



In millions of won	March 31, 2014
	Beginning balance			Receipt			Acquisition		Offset the items of depreciation expense and others		Disposal		Others			Ending balance
Land	￦	(3,137	)		—			—		—		53		(1	)		(3,085	)
Buildings		(45,396	)		—			—		831		—		(789	)		(45,354	)
Structures		(193,189	)		—			—		2,205		192		(5,260	)		(196,052	)
Machinery		(101,808	)		—			—		2,422		103		(778	)		(100,061	)
Vehicles		(83	)		—			—		11		—		—			(72	)
Equipment		(707	)		—			—		95		—		(290	)		(902	)
Tools		(312	)		—			—		50		—		—			(262	)
Construction-in-progress		(117,728	)		—			1,578		—		—		(15,515	)		(131,665	)
Investment properties		(13	)		—			—		—		—		3			(10	)
Software		(428	)		—			—		43		—		(62	)		(447	)
Development expenditures		(11,705	)		—			—		1,051		—		(527	)		(11,181	)
Intangible assets under development		(7,792	)		—			666		—		—		(1,064	)		(8,190	)
Usage rights of donated assets and other		(53	)		—			—		2		—		—			(51	)
Others		(1	)		—			—		1		—		—			—

	￦	(482,352	)		—			2,244		6,711		348		(24,283	)		(497,332	)


In millions of won	December 31, 2013
	Beginning balance			Receipt			Acquisition		Offset the items of depreciation expense and others		Disposal		Others			Ending balance
Cash	￦	(29,741	)		(92,000	)		—		—		—		121,741			—
Land		(3,106	)		—			—		—		—		(31	)		(3,137	)
Buildings		(44,387	)		—			—		3,943		—		(4,952	)		(45,396	)
Structures		(177,173	)		—			—		8,389		1,733		(26,138	)		(193,189	)
Machinery		(105,112	)		—			—		9,507		376		(6,579	)		(101,808	)
Vehicles		(128	)		—			—		45		—		—			(83	)
Equipment		(922	)		—			—		311		—		(96	)		(707	)
Tools		(192	)		—			—		155		—		(275	)		(312	)
Construction-in-progress		(94,676	)		—			25,669		—		—		(48,721	)		(117,728	)
Investment properties		(243	)		—			—		3		—		227			(13	)
Software		(198	)		—			—		160		—		(390	)		(428	)
Development expenditures		(12,371	)		—			—		5,686		—		(5,020	)		(11,705	)
Intangible assets under development		(7,305	)		—			5,358		—		—		(5,845	)		(7,792	)
Usage rights of donated assets and other		(64	)		—			—		11		—		—			(53	)
Others		(1	)		—			—		—		—		—			(1	)

		￦(475,619)			(92,000	)		31,027		28,210		2,109		23,921			(482,352	)

121

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

28.

Deferred Revenues

Deferred revenue related to the Company’s construction contracts as of March 31, 2014 and December 31, 2013 are as follows and included in current and non-current non-financial liabilities in the accompanying consolidated statements of financial position:


In millions of won	March 31, 2014			December 31, 2013

Beginning balance	￦	6,506,639			6,031,311
Increase during the current year		147,492			800,618
Offset during the current year		(85,745	)		(325,290	)


Ending balance	￦	6,568,386			6,506,639

29.

Non-financial Liabilities

Non-financial liabilities as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
	Current		Non-current		Current		Non-current

Advance received	￦	4,033,043		599,977		3,533,965		632,661
Unearned revenue		53,186		102,659		46,546		108,222
Deferred revenue		328,386		6,240,000		323,463		6,183,176
Withholdings		233,838		43,708		257,365		43,280
Others		622,261		18,384		569,292		18,302


	￦	5,270,714		7,004,728		4,730,631		6,985,641

30.

Contributed Capital

(1)

Details of shares issued as of March 31, 2014 and December 31, 2013 are as follows:

In millions of won except share information

March 31, 2014

Shares
authorized

Shares
issued

Par value
per share

Owned by
government(*)

Owned by
others

Total

Common shares

1,200,000,000

641,964,077

￦

5,000

1,640,385

1,569,435

3,209,820

(*) Korea Finance Coporation ownership of ￦960,800 million are included.

In millions of won except share information

December 31, 2013

Shares
authorized

Shares
issued

Par value
per share

Owned by
government(*)

Owned by
others

Total

Common shares

1,200,000,000

641,964,077

￦

5,000

1,640,385

1,569,435

3,209,820

(2)

There were no changes in number of outstanding capital stock for the three-month period ended March 31, 2014 and for the year ended December 31, 2013.

122

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

30.

Contributed Capital, Continued

(3)

Details of share premium as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014		December 31, 2013

Share premium	￦	843,758		843,758

31.

Retained Earnings and Dividends Paid

(1)

Details of retained earnings as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014		December 31, 2013

Legal reserve (*)	￦	1,604,910		1,603,919
Voluntary reserves		22,999,359		22,753,160
Retained earnings before appropriations		8,623,100		8,409,007


Retained earnings	￦	33,227,369		32,766,086

(*)

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 the Company’s common stock. The legal reserve is not available for cash dividends; however, this reserve may be credited to paid-in capital or offset against accumulated deficit by the resolution of the shareholders.

(2)

Details of voluntary reserves as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014		December 31, 2013

Reserve for investment on social overhead capital	￦	5,277,449		5,277,449
Reserve for research and human development(*)		330,000		330,000
Reserve for business expansion		17,181,910		16,935,711
Reserve for equalizing dividends		210,000		210,000


	￦	22,999,359		22,753,160

(*)	The reserve for research and human development is appropriated by the Company 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 Tax Incentive Control Law of Korea.

(3)

Changes in retained earnings for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014			December 31, 2013

Beginning balance	￦	32,766,086			32,564,283
Net loss for the period attributed to owner of the Company		532,262			60,011
Changes in equity method retained earnings		(206	)		7,671
Actuarial profits(losses)		(14,700	)		134,121
Dividend paid		(56,073	)		—


Ending balance	￦	33,227,369			32,766,086

123

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

31.

Retained Earnings and Dividends Paid, Continued

(4)

Dividends paid for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:

In millions of won except share information

March 31, 2014

Number of
shares issued

Number of
treasury stocks

Number of
shares eligible for
dividends

Dividends
Paid

Dividends paid
per share

Common shares

641,964,077

18,929,995

623,034,082

￦

56,073

In millions of won except share information

December 31, 2013

Number of
shares issued

Number of
treasury stocks

Number of
shares eligible for
dividends

Dividends
Paid

Dividends paid
per share

Common shares

641,964,077

18,929,995

623,034,082

—

(5)

Changes in retained earnings of investments in associates and joint ventures for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follow:


In millions of won	March 31, 2014			December 31, 2013

Beginning balance	￦	(233	)		(7,904	)
Changes		(688	)		7,671
Income tax effect		482			—


Ending balance	￦	(439	)		(233	)

(6)

Changes in remeasurement components for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follow:


In millions of won	March 31, 2014			December 31, 2013

Beginning balance	￦	39,591			(76,088	)
Changes		(23,115	)		207,761
Income tax effect		8,415			(73,640	)
Transfer to reserve for business expansion		(64,956	)		(18,442	)


Ending balance	￦	(40,065	)		39,591

124

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

32.

Hybrid Bonds

Korea Western Power Co., Ltd. and Korea South-East Power Co., Ltd. which are wholly owned subsidiaries of the Company, issued bond-type hybrid bonds for the three-month period ended March 31, 2014. Bond-type hybrid securities classified as equity (non-controlling interest) as of March 31, 2014 are as follows:


In millions of won
Issuer	Hybrid Bond	Issued date	Maturity	Yield (%)	Amount

Korea Western Power Co., Ltd.	1st bond-type hybrid bond	2012.10.18	2042.10.18	5yr government bond rate+1.20	￦	100,000
Korea South-East Power Co., Ltd.	1st bond-type hybrid bond	2012.12.07	2042.12.06	4.38		170,000
Korea South-East Power Co., Ltd.	2nd bond-type hybrid bond	2012.12.07	2042.12.06	4.44		230,000


Expense of Issuance						(1,340	)


					￦	498,660

Although these instruments have contractual maturity dates, the contractual agreements allow the Company to indefinitely extend the maturity dates and defer the payment of interest without modification to the other terms of the instruments. When the Company decides to not pay dividends on ordinary shares, the Company is 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).

33.

Other Components of Equity

(1)

Other components of equity of the parent as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014			December 31, 2013

Other capital surpluses	￦	828,121			830,982
Accumulated other comprehensive income		34,185			55,538
Treasury stocks		(741,489	)		(741,489	)
Other equity		13,294,973			13,294,973


	￦	13,415,790			13,440,004

(2)

Changes in other capital surpluses for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014								December 31, 2013
	Gains on disposal of treasury stocks		Others			Subtotal			Gains on disposal of treasury stocks		Others			Subtotal

Beginning balance	￦	303,028		527,954			830,982			303,028		402,420			705,448
Disposal of subsidiary		—		—			—			—		183,522			183,522
Issuance of share capital of subsidiary		—		(2,861	)		(2,861	)		—		(155	)		(155	)
Change in consolidation scope		—		—			—			—		(10,224	)		(10,224	)
Income tax effect		—		—			—			—		(47,609	)		(47,609	)


Ending balance	￦	303,028		525,093			828,121			303,028		527,954			830,982

125

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

33.

Other Components of Equity, Continued

(3)

Changes in accumulated other comprehensive income for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Available-for-sale financial asset valuation reserve			Shares in other comprehensive income of investments in associates and joint ventures			Reserve for overseas operations translation credit			Reserve for gain (loss) on valuation of derivatives			Total

Beginning balance	￦	62,614			182,261			(170,679	)		(18,658	)		55,538
Changes in the unrealized fair value of available- for-sale financial assets, net of tax		(16,545	)		—			—			—			(16,545	)
Shares in other comprehensive income of associates and joint ventures, net of tax		—			(53,681	)		—			—			(53,681	)
Foreign currency translation of foreign operations, net of tax		—			—			48,417			—			48,417
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		—			—			—			456			456


Ending balance	￦	46,069			128,580			(122,262	)		(18,202	)		34,185


In millions of won	December 31, 2013
	Available-for-sale financial asset valuation reserve			Shares in other comprehensive income of investments in associates and joint ventures			Reserve for overseas operations translation credit			Reserve for gain (loss) on valuation of derivatives			Total

Beginning balance	￦	(23,929	)		143,558			(70,107	)		(37,565	)		11,957
Changes in the unrealized fair value of available- for-sale financial assets, net of tax		86,543			—			—			—			86,543
Shares in other comprehensive income of associates and joint ventures, net of tax		—			38,703			—			—			38,703
Foreign currency translation of foreign operations, net of tax		—			—			(100,572	)		—			(100,572	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		—			—			—			18,907			18,907


Ending balance	￦	62,614			182,261			(170,679	)		(18,658	)		55,538

(4)

There were no changes in treasury stocks for the three-month period ended March 31, 2014 and for the year ended December 31, 2013.

(5)

Changes in other equity for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014		December 31, 2013

Statutory revaluation reserve	￦	13,294,973		13,295,098
Changes in other equity		—		(125	)


	￦	13,294,973		13,294,973

126

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

34.

Sales

Details of sales for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014				March 31, 2013
	Domestic		Overseas		Domestic		Overseas

Sales of goods	￦	14,011,418		62,158		13,179,178		55,181
Electricity		13,746,527		—		12,921,178		—
Heat supply		129,575		—		128,641		—
Others		135,316		62,158		129,359		55,181
Sales of service		28,822		35,756		47,316		33,056
Sales of construction Services		38,645		510,103		24,087		381,693
Revenue related to transfer of assets from customers		85,745		—		78,587		—


	￦	14,164,630		608,017		13,329,168		469,930

35.

Selling and Administrative Expenses

(1)

Composition of selling and administrative expenses for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014		March 31, 2013

Salaries	￦	140,883		156,628
Retirement benefit expense		18,632		20,035
Welfare and benefit expense		23,224		23,085
Insurance expense		2,880		1,895
Depreciation		16,467		16,613
Amortization of intangible assets		10,709		12,635
Bad debt expense (Reversal of allowance for bad debts)		501		(2,308	)
Commission		122,514		113,085
Advertising expense		4,486		6,956
Training expense		1,173		1,474
Vehicle maintenance expense		2,834		3,086
Publishing expense		681		773
Business promotion expense		793		915
Rent expense		8,434		8,640
Telecommunication expense		6,288		6,305
Transportation expense		84		93
Taxes and dues		7,000		4,497
Expendable supplies expense		901		1,006
Water, light and heating expense		2,694		2,870
Repairs and maintenance expense		6,959		2,394
Ordinary development expense		34,830		36,876
Travel expense		3,211		3,595
Clothing expense		102		21
Survey and analysis expense		147		119
Membership fee		351		302
Sales promotional expense		1		—
Others		19,070		20,054


	￦	435,849		441,644

127

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

36.

Other Non-operating Income and Expense

(1)

Other income for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014		March 31, 2013

Reversal of other provisions	￦	2,060		152
Gains on assets contributed		20		34
Gains on liabilities exempted		782		—
Compensation and reparations revenue		10,916		23,372
Gains on electricity infrastructure development fund		1,958		10,464
Revenue from research contracts		375		994
Rental income		48,481		47,414
Others		6,131		5,629


	￦	70,723		88,059

(2)

Other expense for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014		March 31, 2013

Accretion expenses of other provisions	￦	105		35
Depreciation expenses on investment properties		183		226
Depreciation expenses on idle assets		1,663		1,658
Other bad debt expense		11,870		5,800
Donations		7,027		7,323
Others		2,211		2,171


	￦	23,059		17,213

128

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

37.

Other Gains (Losses)

(1)

Composition of other gains (losses) for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014			March 31, 2013

Gains on disposal of property, plant and equipment	￦	7,416			12,746
Gains on foreign currency translation		2,507			1,350
Gains on foreign currency transaction		10,914			11,135
Others		52,906			54,490
Losses on disposal of property, plant and equipment		(2,944	)		(11,222	)
Impairment loss on property, plant and equipment		—			(1,161	)
Impairment loss on intangible assets		—			(2	)
Losses on foreign currency translation		(1,619	)		(5,465	)
Losses on foreign currency transaction		(13,676	)		(22,457	)
Others		(14,422	)		(8,410	)


	￦	41,082			31,004

38.

Finance Income

(1)

Finance income for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014		March 31, 2013

Interest income	￦	48,195		50,662
Dividends income		12,525		11,239
Gains on valuation of derivatives		153,465		304,251
Gains on transaction of derivatives		37,415		39,695
Gains on foreign currency translation		19,483		23,642
Gains on foreign currency transaction		6,975		7,239


	￦	278,058		436,728

(2)

Interest income included in finance income for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014		March 31, 2013

Cash and cash equivalents	￦	12,242		15,889
Available-for-sale financial assets		108		527
Held-to-maturity investments		17		16
Loans and receivables		6,020		12,691
Short-term financial instrument		3,927		6,115
Long-term financial instrument		110		5
Other financial assets		305		7
Trade and other receivables		25,466		15,412


	￦	48,195		50,662

129

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

39.

Finance expenses

(1)

Finance expenses for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014		March 31, 2013

Interest expense	￦	597,046		595,282
Losses on sale of financial assets		2		—
Losses on valuation of derivatives		9,819		15,254
Losses on transaction of derivatives		25,279		24,897
Losses on foreign currency translation		165,047		405,549
Losses on foreign currency transaction		4,928		18,561


	￦	802,121		1,059,543

(2)

Interest expense included in finance expenses for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014			March 31, 2013

Trade and other payables	￦	22,376			26,222
Short-term borrowings		4,522			7,810
Long-term borrowings		44,424			54,656
Debt securities		589,852			535,328
Other financial liabilities		147,123			140,725

		808,297			764,741


Less: Capitalized borrowing costs		(211,251	)		(169,459	)


	￦	597,046			595,282

Capitalization rates for the three-month periods ended March 31, 2014 and 2013 are 3.43% ~ 4.44% and 2.41% ~ 4.94%, respectively.

130

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

40.

Income Taxes

(1)

Income tax expense for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won
	March 31, 2014			March 31, 2013

Current income tax expense
Payment of income tax	￦	204,100			270,549
Adjustment recognized in the period for current tax of prior period		(6,760	)		79,270
Current income tax directly recognized in equity		22,875			42,109

		220,215			391,928


Deferred income tax expense
Generation and realization of temporary differences		158,161			(156,997	)
Recognition of unrecognized tax losses in the past, tax credit and temporary differences before prior year		(1,741	)		(32,817	)
Changes in deferred tax on tax losses incurred in the period		(50,008	)		(154,494	)
Tax credit carry forwards		14,029			—

		120,441			(344,308	)


Income tax expense	￦	340,656			47,620

(2)

Reconciliation between actual income tax expense (benefit) and amount computed by applying the statutory tax rate of 24.2% to income before income taxes for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won
	March 31, 2014			March 31, 2013
Income before income tax expense	￦	901,927			208,045

Income tax benefit computed at applicable tax rate of 24.2%		218,266			50,347

Adjustments
Additional payment of income taxes or receipt of income tax refunds		1,522			3,549
Effect of applying gradual tax rate		1,724			(652	)
Effect of non-taxable revenue		(32,725	)		(106,233	)
Effect of non-deductible expenses		4,779			4,345
Effects of tax credits and deduction		(12,378	)		(12,816	)
Recognition of unrecognized tax losses in the past, tax credit, and temporary differences before prior year		(1,988	)		(36,785	)
Consolidated deferred income tax		162,778			141,683
Others, net		(1,322	)		4,182

		122,390			(2,727	)


Income tax expense	￦	340,656			47,620


Effective tax rate		37.8	%		22.8	%

131

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

40.

Income Taxes, Continued

(3)

Deferred income tax directly adjusted to shareholders’ equity (except for accumulated other comprehensive income) for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014		March 31, 2013

Dividends of hybrid securities	￦	1,308		1,139


	￦	1,308		1,139

(4)

Income tax recognized as accumulated other comprehensive income for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014			March 31, 2013

Income tax recognized as accumulated other comprehensive income
Gain (loss) on valuation of available-for-sale financial assets	￦	10,342			2,781
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		2,367			(1,277	)
Actuarial losses on employee benefit obligations		8,415			48,304
Investments in associates		482			(8,838	)
Others		(39	)		—


	￦	21,567			40,970

132

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

40.

Income Taxes, Continued

(5)

Changes in deferred income tax assets (liabilities) recognized in the statements of financial position for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Beginning balance			Amounts recognized in profit or loss			Amount recognized in other comprehensive income			Amounts recognized directly in equity			Ending balance
Deferred income tax on temporary differences
Employee benefits	￦	518,681			18,851			8,415			—			545,947
Cash flow hedge		51,991			(26,477	)		2,367			—			27,881
Investments in associates or subsidiaries		(5,227,034	)		84,684			482			—			(5,141,868	)
Property, plant and equipment		(6,061,613	)		(52,170	)		—			—			(6,113,783	)
Finance lease		(142,081	)		(6,177	)		—			—			(148,258	)
Intangible assets		10,242			2,104			—			—			12,346
Financial assets at fair value through profit or loss		83,645			(20,848	)		—			—			62,797
Available-for-sale financial assets		(101,088	)		5,291			10,342			—			(85,455	)
Deferred revenue		244,806			(8,078	)		—			—			236,728
Provisions		3,150,908			31,311			—			—			3,182,219
Doubtful receivables		59			—			—			—			59
Other finance liabilities		25,856			2,458			—			1,308			29,622
Gain (loss) on foreign exchange translation		(19,164	)		930			—			—			(18,234	)
Allowance for doubtful accounts		7,314			7,330			—			—			14,644
Accrued income		(1,248	)		(2,600	)		—			—			(3,848	)
Special deduction		(194,785	)		34			—			—			(194,751	)
Impairment of non-current assets		86,720			—			—			—			86,720
Reserve for research and human development		(43,143	)		(2,009	)		—			—			(45,152	)
Others		409,436			(206,527	)		(39	)		—			202,870

		(7,200,498	)		(171,893	)		21,567			1,308			(7,349,516	)

Deferred income tax on unused tax losses and tax credit
Tax losses		2,501,349			42,247			—			—			2,543,596
Tax credit		56,099			(13,670	)		—			—			42,429

		2,557,448			28,577			—			—			2,586,025


	￦	(4,643,050	)		(143,316	)		21,567			1,308	)		(4,763,491	)

133

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

40.

Income Taxes, Continued

(5)


In millions of won	December 31, 2013
	Beginning balance			Amounts recognized in profit or loss			Amount recognized in other comprehensive income			Amounts recognized directly in equity			Ending balance
Deferred income tax on temporary differences
Employee benefits	￦	547,115			45,213			(73,647	)		—			518,681
Cash flow hedge		(11,364	)		56,939			6,416			—			51,991
Investments in associates or subsidiaries		(5,273,904	)		104,803			(10,324	)		(47,609	)		(5,227,034	)
Property, plant and equipment		(6,326,201	)		264,588			—			—			(6,061,613	)
Finance lease		(159,957	)		17,876			—			—			(142,081	)
Intangible assets		8,534			1,708			—			—			10,242
Financial assets at fair value through profit or loss		30,148			53,497			—			—			83,645
Available-for-sale financial assets		(73,867	)		4,146			(31,367	)		—			(101,088	)
Deferred revenue		43,752			201,054			—			—			244,806
Provisions		3,003,489			147,419			—			—			3,150,908
Doubtful receivables		59			—			—			—			59
Other finance liabilities		10,794			9,607			—			5,455			25,856
Gains (losses) on foreign exchange translation		6,017			(25,181	)		—			—			(19,164	)
Allowance for doubtful accounts		(85	)		7,399			—			—			7,314
Accrued income		(1,341	)		93			—			—			(1,248	)
Special deduction		(194,925	)		140			—			—			(194,785	)
Impairment of non-current assets		—			86,720			—			—			86,720
Reserve for research and human development		(40,485	)		(2,658	)		—			—			(43,143	)
Others		398,870			10,566			—			—			409,436

		(8,033,351	)		983,929			(108,922	)		(42,154	)		(7,200,498	)

Deferred income tax on unused tax losses and tax credit
Tax losses		2,696,165			(194,816	)		—			—			2,501,349
Tax credit		97,196			(41,097	)		—			—			56,099
Others		16,481			(16,481	)		—			—			—

		2,809,842			(252,394	)		—			—			2,557,448


	￦	(5,223,509	)		731,535			(108,922	)		(42,154	)		(4,643,050	)

(6)

Deferred income tax assets (liabilities) recognized in the statements of financial position as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014			December 31, 2013

Deferred income tax assets	￦	255,724			359,535
Deferred income tax liabilities		(5,019,215	)		(5,002,585	)

	￦	(4,763,491	)		(4,643,050	)

134

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

40.

Income Taxes, Continued

(7)

Details of deductible temporary differences, tax losses and unused tax credits not recognized in the deferred income tax assets as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014		December 31, 2013

Deductible temporary differences	￦	444,029		441,955
Tax losses and tax credits carryback		29,775		29,775


	￦	473,804		471,730

(8)

Expiration dates of deductible temporary differences, tax losses and unused tax credits not recognized in the deferred income tax assets as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
	Tax losses		Tax credits carryback		Tax losses		Tax credits carryback

Less than 1 year	￦	—		4,484		—		4,484
1~ 2 years		—		5,134		—		5,134
2~ 3 years		—		16,945		—		16,945
More than 3 years		—		3,212		—		3,212

	￦	—		29,775		—		29,775

135

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

41.

Expenses Classified by Nature

Expenses classified by nature for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014
	Selling and administrative expenses		Cost of sales		Total

Raw materials used	￦	—		6,023,195		6,023,195
Salaries		140,883		671,520		812,403
Retirement benefit expense		18,632		80,822		99,454
Welfare and benefit expense		23,224		84,847		108,071
Insurance expense		2,880		16,878		19,758
Depreciation		16,467		1,869,949		1,886,416
Amortization of intangible assets		10,709		9,153		19,862
Bad debt expense		501		—		501
Commission		122,514		72,292		194,806
Advertising expense		4,486		1,111		5,597
Training expense		1,173		1,642		2,815
Vehicle maintenance expense		2,834		2,259		5,093
Publishing expense		681		746		1,427
Business promotion expense		793		1,028		1,821
Rent expense		8,434		26,417		34,851
Telecommunication expense		6,288		16,586		22,874
Transportation expense		84		822		906
Taxes and dues		7,000		48,918		55,918
Expendable supplies expense		901		4,932		5,833
Water, light and heating expense		2,694		8,380		11,074
Repairs and maintenance expense		6,959		291,606		298,565
Ordinary development expense		34,830		77,175		112,005
Travel expense		3,211		11,200		14,411
Clothing expense		102		169		271
Survey and analysis expense		147		493		640
Membership fee		351		1,919		2,270
Power purchase		—		3,280,763		3,280,763
Others		19,071		504,899		523,970

	￦	435,849		13,109,721		13,545,570

136

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

41.

Expenses Classified by Nature, Continued

Expenses classified by nature for the three-month periods ended March 31, 2014 and 2013 are as follows, continued:


In millions of won	March 31, 2013
	Selling and administrative expenses			Cost of sales		Total

Raw materials used	￦	—			6,200,325		6,200,325
Salaries		156,628			679,425		836,053
Retirement benefit expense		20,035			85,312		105,347
Welfare and benefit expense		23,085			87,482		110,567
Insurance expense		1,895			14,552		16,447
Depreciation		16,613			1,794,248		1,810,861
Amortization of intangible assets		12,635			9,447		22,082
Bad debt expense		(2,308	)		—		(2,308	)
Commission		113,085			74,238		187,323
Advertising expense		6,956			1,284		8,240
Training expense		1,474			1,529		3,003
Vehicle maintenance expense		3,086			2,248		5,334
Publishing expense		773			850		1,623
Business promotion expense		915			1,073		1,988
Rent expense		8,640			24,960		33,600
Telecommunication expense		6,305			15,266		21,571
Transportation expense		93			739		832
Taxes and dues		4,497			39,875		44,372
Expendable supplies expense		1,006			4,517		5,523
Water, light and heating expense		2,870			7,579		10,449
Repairs and maintenance expense		2,394			334,254		336,648
Ordinary development expense		36,876			81,675		118,551
Travel expense		3,595			10,458		14,053
Clothing expense		21			93		114
Survey and analysis expense		119			505		624
Membership fee		302			1,853		2,155
Power purchase		—			2,839,038		2,839,038
Others		20,054			386,860		406,914

	￦	441,644			12,699,685		13,141,329

137

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

42.

Earnings Per Share

(1)

Basic earnings per share for the three-month periods ended March 31, 2014 and 2013 are as follows:


In won
Type	March 31, 2014		March 31, 2013

Basic earnings per share	￦	854		214

(2)

Basic earnings per share

Net income and weighted average number of common shares used in the calculation of basic earnings per share for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won except number of shares
Type	March 31, 2014		March 31, 2013

Controlling interest in net income	￦	532,262		133,300
Profit used in the calculation of total basic earnings per share		532,262		133,300
Weighted average number of common shares		623,034,082		623,034,082

(3)

There are no potential common shares and diluted earnings per shares are same as basic earnings (loss) per share for the years ended December 31, 2013 and 2012.

43.

Risk Management

(1)

Capital risk management

The Company manages its capital to ensure that entities in the Company 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 Company consists of net debt (offset by cash and cash equivalents) and equity. The Company’s overall capital risk management strategy remains unchanged from that of the prior year.

Details of the Company’s capital management accounts as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014			December 31, 2013

Total borrowings and debt securities		￦ 61,572,126			60,888,150
Cash and cash equivalents		(2,728,775	)		(2,232,313	)

Net borrowings and debt securities		58,843,351			58,655,837

Total shareholder’s equity		51,893,900			51,450,736

Debt to equity ratio		113.39	%		114.00	%

138

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

43.

Risk Management, Continued

(2)

Financial risk management

The Company is exposed to various risks related to its financial instruments, such as, market risk (currency risk, interest rate risk, price risk), credit risk. The Company monitors and manages the financial risks relating to the operations of the Company through internal risk reports which analyze exposures by degree and magnitude of risks. The Company uses derivative financial instruments to certain hedge risk exposures. The Company’s overall financial risk management strategy remains unchanged from that of the prior year.

(i)

Credit risk

Credit risk is the risk of finance loss to the Company 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 Company makes transactions with are reputable financial institutions, the credit risk from them are considered limited. The Company 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.

Credit risk management

Electricity sales, the main operations of the Company are the necessity for daily life and industrial activities of Korean nationals, and have importance as one of the national key industries. The Company dominates the domestic market supplying electricity to customers. The Company is not exposed to credit risk as customers of the Company are from various industries and areas. The Company 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.

‚

Impairment and allowance account

In accordance with the Company 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 Company of assets which individually are not material and (ii) incurred but not recognized losses that are assessed using statistical methods, judgment and past experience.

139

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

43.

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 Company’s level of maximum exposure to credit risk as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014		December 31, 2013

Cash and cash equivalents	￦	2,728,775		2,232,313
Derivative assets (trading)		16,192		4,118
Available-for-sale financial assets		1,232,732		1,256,765
Held-to-maturity investments		2,205		2,285
Loans and receivables		623,904		608,239
Long-term/short-term financial instruments		262,836		385,382
Derivative assets (using hedge accounting)		96,242		82,376
Trade and other receivables		8,425,008		9,170,644
Financial guarantee contracts (*)		202,607		261,565

(*)	Maximum exposure associated with the financial guarantee contracts is the maximum amounts of the obligation.

Financial guarantee contracts as of March 31, 2014 are as follows:


In thousands of U.S. dollars
Type	Company	Currency	Amounts

Joint ventures	KEPCO SPC Power Corporation	USD		189,565

				189,565

As of the reporting date, there are no financial assets and non-financial assets that were acquired through the exercise of the right of collateralized assets and reinforcement of credit arrangement.

(ii)

Market risk

Market risk is the risk that the Company’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.

140

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

43.

Risk Management, Continued

(2)

Financial risk management, continued

(iii)

Sensitivity analysis

Significant assets and liabilities with uncertainties in underlying assumptions

Defined benefit obligation

The following is a sensitivity analysis of defined benefit obligation assuming a 1% increase and decrease movements in the actuarial valuation assumptions as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won		March 31, 2014						December 31, 2013
Type	Accounts	1% Increase			1% Decrease			1% Increase			1% Decrease

Future salary increases	Defined benefit obligation	￦	271,585			(340,184	)		257,512			(316,563	)
Discount rate	Defined benefit obligation		(243,898	)		282,724			(236,761	)		274,619

Changes of employee benefits assuming a 1% increase and decrease movements in discount rate on plan asset for the three-month period ended March 31, 2014 and the year ended December 31, 2013 are ￦1,411 million and ￦1,181million, respectively.

‚

Provisions

Changes in provisions due to movements in underlying assumptions as of March 31, 2014 and December 31, 2013 are as follows:


Type	Accounts	March 31, 2014			December 31, 2013

PCBs	Inflation rate		3.04	%		3.10	%
	Discount rate		4.39	%		4.92	%
Nuclear plants	Inflation rate		2.93	%		2.93	%
	Discount rate		4.49	%		4.49	%
Spent fuel	Inflation rate		2.93	%		2.93	%
	Discount rate		4.49	%		4.49	%

The following is a sensitivity analysis of provisions assuming a 0.1% increase and decrease movements in the underlying assumptions as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won		March 31, 2014				December 31, 2013
Type	Accounts	0.1% Increase		0.1% Decrease		0.1% Increase		0.1% Decrease
Discount rate	PCBs	￦	(1,128)		1,061		(1,086)		1,095
	Nuclear plants		(221,624)		227,733		(221,516)		227,667
	Spent fuel		(46,808)		48,623		(46,164)		47,953
Inflation rate	PCBs		1,128		(1,196)		1,113		(1,106)
	Nuclear plants		243,435		(237,026)		240,778		(234,438)
	Spent fuel		49,325		(47,550)		48,646		(46,895)

141

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

43.

Risk Management, Continued

(2)

Financial risk management, continued

Management judgment effected by uncertainties in underlying assumptions

Foreign currency risk

The Company undertakes transactions denominated in foreign currencies; consequently, exposures to exchange rate fluctuations arise. The carrying amounts of the Company’s foreign currency denominated monetary assets and monetary liabilities as of March 31, 2014 and December 31, 2013 are as follows:


In thousands of foreign currencies	Assets				Liabilities
Type	March 31, 2014		December 31, 2013		March 31, 2014		December 31, 2013

AUD		11,605		1,460		320,368		321,444
CAD		4		4		—		611
CNY		1		1		—		—
EUR		21,302		27,946		15,080		33,398
IDR		316,877		546,902		15,465		2,973
MXN		5,063		5,064		129		426
PHP		301,646		248,623		21,444		22,954
SAR		1,522		1,565		—		—
USD		978,902		627,504		11,304,797		11,207,483
INR		698,745		362,996		407,257		500,933
PKR		130,800		116,847		100		650
MGA		2,559,962		2,124,218		62,285		101,503
JPY		144,061		176,921		23,619,174		22,521,580
KZT		126,671		164,790		—		16,517
GBP		—		—		—		4
CHF		4,940		143,120		400,012		400,012
AED		1,703		288		1,078		809
ZAR		112		—		—		—
SEK		—		—		189		—
JOD		206		132		3		1
BDT		36,349		34,753		3,528		2,977
CLP		—		93		—		—

A sensitivity analysis on the Company’s income for the period assuming a 10% increase and decrease in currency exchange rates as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014					December 31, 2013
Type	10% Increase			10% Decrease		10% Increase			10% Decrease

Increase (decrease) of income before income tax	￦	(1,203,519)			1,203,519		(1,199,673	)		1,199,673
Increase (decrease) of shareholder’s equity(*)		(1,203,519	)		1,203,519		(1,199,673	)		1,199,673

(*)	The effect on the shareholders’ equity excluding the impact of income taxes.

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 March 31, 2014 and December 31, 2013.

To manage its foreign currency risk related to foreign currency denominated receivables and payables, the Company has a policy to enter into currency forward agreements. In addition, to manage its foreign currency risk related to foreign currency denominated expected sales transactions and purchase transactions, the Company enters into cross-currency swap agreements.

142

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

43.

Risk Management, Continued

(2)

Financial risk management, continued

‚

Interest rate risk

The Company 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 Company’s borrowings and debt securities with floating interest rates as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won
Type	March 31, 2014		December 31, 2013

Short-term borrowings	￦	41,022		48,981
Long-term borrowings		4,842,355		5,029,163
Debt securities		2,389,120		2,268,065


	￦	7,272,497		7,346,209

A sensitivity analysis on the Company’s long-term borrowings and debt securities assuming a 1% increase and decrease in interest rates, without consideration of hedge effect of related derivatives for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014					December 31, 2013
Type	1% Increase			1% Decrease		1% Increase			1% Decrease

Increase (decrease) of profit before income tax	￦	(72,725)			72,725		(73,462	)		73,462
Increase (decrease) of shareholder’s equity (*)		(72,725	)		72,725		(73,462	)		73,462

(*)	The effect on the shareholders’ equity excluding the impact of income taxes.

To manage its interest rate risks, the Company enters into certain interest swap agreements or maintains an appropriate mix of fixed and floating rate borrowings.

Electricity rates risk

The Company 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 Company’s income for the period assuming a 1% increase and decrease in price of electricity for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won	March 31, 2014					March 31, 2013
Type	1% Increase		1% Decrease			1% Increase		1% Decrease

Increase (decrease) of profit before income tax	￦	137,465		(137,465	)		129,212		(129,212	)
Increase (decrease) of shareholder’s equity (*)		137,465		(137,465	)		129,212		(129,212	)

(*)	The effect on the shareholders’ equity excluding the impact of income taxes.

143

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

43.

Risk Management, Continued

(2)

Financial risk management, continued

(iv)

Liquidity risk

The Company has established an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company 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 Company 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 Company has the ability to utilize excess cash or long-term borrowings for major construction investments.

The following table shows the details of maturities of non-derivative financial liabilities as of March 31, 2014 and December 31, 2013. This table, based on the undiscounted cash flows of the non-derivative financial liabilities, has been completed based on the respective liabilities’ earliest maturity date.


In millions of won	March 31, 2014
Type	Less than 1 year		1~2 Years		2~5 Years		More than 5 years		Total

Borrowings and debt securities	￦	10,451,641		8,191,983		26,656,130		29,912,645		75,212,399
Finance lease liabilities		196,604		184,125		508,528		359,814		1,249,071
Trade and other payables		5,389,975		273,645		534,660		2,427,333		8,625,613
Financial guarantee contracts (*)		27,014		27,014		81,043		67,536		202,607


	￦	16,065,234		8,676,767		27,780,361		32,767,328		85,289,690


In millions of won	December 31, 2013
Type	Less than 1 year		1~2 Years		2~5 Years		More than 5 years		Total

Borrowings and debt securities	￦	9,676,694		8,052,432		25,845,951		29,021,954		72,597,031
Finance lease liabilities		202,309		184,809		532,119		381,742		1,300,979
Trade and other payables		5,777,455		397,279		751,577		2,053,005		8,979,316
Financial guarantee contracts (*)		88,190		26,673		80,019		66,683		261,565


	￦	15,744,648		8,661,193		27,209,666		31,523,384		83,138,891

(*)	Total guarantee amounts associated with the financial guarantee contracts. Financial guarantee liabilities which are recognized as of March 31, 2014 and December 31, 2013 are ￦7,023 million and ￦8,789 million, respectively.

144

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

43.

Risk Management, Continued

(2)

Financial risk management, continued

The expected maturities for non-derivative financial assets as of March 31, 2014 and December 31, 2013 in detail are as follows:


In millions of won	March 31, 2014
Type	Less than 1 year		1~5 Years		More than 5 years		*Other ()**		Total

Cash and cash equivalents	￦	2,728,775		—		—		—		2,728,775
Available-for-sale financial assets		—		—		—		1,232,732		1,232,732
Held-to-maturity investments		133		2,059		13		—		2,205
Loans and receivables		52,704		190,123		431,098		11,580		685,505
Long-term/short-term financial instruments		261,642		—		—		1,194		262,836
Trade and other receivables		6,761,711		819,575		769,612		83,188		8,434,086

	￦	9,804,965		1,011,757		1,200,723		1,328,694		13,346,139


In millions of won	December 31, 2013
Type	Less than 1 year		1~5 Years		More than 5 years		*Other ()**		Total

Cash and cash equivalents	￦	2,232,313		—		—		—		2,232,313
Available-for-sale financial assets		—		76		—		1,256,689		1,256,765
Held-to-maturity investments		168		2,105		12		—		2,285
Loans and receivables		51,503		242,827		298,397		75,165		667,892
Long-term/short-term financial instruments		384,199		—		615		568		385,382
Trade and other receivables		7,528,508		731,914		802,752		115,849		9,179,023

	￦	10,196,691		976,922		1,101,776		1,448,271		13,723,660

(*)	Amount represents available-for-sale assets whose maturities cannot be presently determined.

Derivative liabilities classified by maturity periods which from reporting date to maturity date of contract as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
Type	Less than 1 year			1~2 Years			2~5 Years			More than 5 years			Total

Net settlement
- Trading	￦	(8	)		—			—			—			(8	)
Gross settlement
- Trading		(259,562)			(139,467	)		(138,403	)		(40,586	)		(578,018	)
- Hedging		(50,715	)		(18,552	)		(168,810	)		(39,384	)		(277,461	)


	￦	(310,285	)		(158,019	)		(307,213	)		(79,970	)		(855,487	)

145

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

43.

Risk Management, Continued

(2)

Financial risk management, continued


In millions of won	December 31, 2013
Type	Less than 1 year			1~2 Years			2~5 Years			More than 5 years			Total

Gross settlement
- Trading	￦	(314,891	)		(134,050	)		(33,831	)		(44,343	)		(527,115	)
- Hedging		(64,794	)		(26,409	)		(187,689	)		(49,071	)		(327,963	)

	￦	(379,685)			(160,459	)		(221,520	)		(93,414	)		(855,078	)

(3)

Fair value risk

The fair value of the Company’s actively-traded financial instruments (i.e. short-term financial assets held for trading, available-for-sale financial assets, etc.) is based on the traded market-price as of the reporting period end. The fair value of the Company’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 Company uses that technique.

For trade receivables and payables, the Company considers the carrying value net of impairment as fair value. While for disclosure purposes, the fair value of financial liabilities is estimated by discounting a financial instruments with similar contractual cashflows based on the effective interest method.

146

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

43.

Risk Management, Continued

(3)

Fair value risk, continued

(i)

Fair value and book value of financial assets and liabilities as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
Type	Book value		Fair value		Book value		Fair value

Assets recognized at fair value
Available-for-sale financial assets (*1)	￦	1,232,731		1,232,731		1,256,765		1,256,765
Derivative assets (trading)		16,192		16,192		4,118		4,118
Derivative assets (using hedge accounting)		96,242		96,242		82,376		82,376
Long-term financial instruments		1,194		1,194		1,183		1,183
Short-term financial instruments		261,642		261,642		384,199		384,199

		1,608,001		1,608,001		1,728,641		1,728,641


Assets carried at amortized cost
Held-to-maturity investments		2,205		2,205		2,285		2,285
Loans and receivables		623,904		623,904		608,239		608,239
Trade and other receivables		8,425,008		8,425,008		9,170,644		9,170,644
Cash and cash equivalents		2,728,775		2,728,775		2,232,313		2,232,313

		11,779,892		11,779,892		12,013,481		12,013,481


Liabilities recognized at fair value
Derivative liabilities (trading)		366,539		366,539		491,035		491,035
Derivative assets (using hedge accounting)		160,086		160,086		209,440		209,440

		526,625		526,625		700,475		700,475


Liabilities carried at amortized cost
Secured borrowings		707,334		707,334		582,053		579,111
Unsecured bond		55,368,677		57,890,099		54,878,897		57,226,079
Finance lease liabilities		855,015		855,015		884,966		884,966
Unsecured borrowings		5,492,197		5,609,101		5,383,966		5,493,786
Trade and other payables(*2)		8,625,613		8,625,613		8,979,316		8,979,316
Bank overdraft		3,919		3,919		43,233		43,233

	￦	71,052,755		73,691,081		70,752,431		73,206,491

(*1)	Book values of equity securities held by the Company that were measured at cost as of March 31, 2014 and December 31, 2013 are ￦333,086 million and ￦330,001 million, respectively, as a quoted market price does not exist in an active market and its fair value cannot be measured reliably.

(*2)	Excludes finance lease liabilities.

147

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

43.

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 March 31, 2014 and December 31, 2013 are as follows:


Type	March 31, 2014	December 31, 2013

Derivatives	0.11% ~ 3.92%	0.17% ~ 4.34%
Borrowings and debt securities	1.14% ~ 4.05%	1.40% ~ 4.11%
Finance lease	9.00% ~ 10.80%	9.00% ~ 10.80%

(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 March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014
Type	Level 1		Level 2		Level 3		Total

Financial assets at fair value
Available-for-sale financial assets	￦	712,527		—		187,119		899,646
Derivative assets		—		112,434		—		112,434

		712,527		112,434		187,119		1,012,080


Financial liabilities at fair value
Derivative liabilities		—		526,625		—		526,625


In millions of won	December 31, 2013
Type	Level 1		Level 2		Level 3		Total

Financial assets at fair value
Available-for-sale financial assets	￦	740,805		—		185,959		926,764
Derivative assets		—		86,494		—		86,494

		740,805		86,494		185,959		1,013,258


Financial liabilities at fair value
Derivative liabilities		—		700,475		—		700,475

148

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

43.

Risk Management, Continued

(3)

Fair value risk, continued

Changes of financial assets and liabilities which are classified as level 3 for the three-month period ended March 31, 2014 and for the year ended December 31, 2013 are as follows:


In millions of won	March 31, 2014
	Beginning balance		Acquisition		Valuation			Disposal		*Other()**		Ending balance

Financial assets at fair value
Available-for-sale financial assets
Unlisted securities	￦	171,304		—		(9	)		—		—		171,295
Debt securities		14,655		—		—			—		1,169		15,824

(*)	Amount due to foreign currency translation.


In millions of won	December 31, 2013
	Beginning balance		Acquisition		Reclassified category		Valuation		Disposal			*Other()**			Ending balance
Financial assets at fair value
Available-for-sale financial assets
Unlisted securities	￦	169,637		—		784		883		—			—			171,304
Debt securities		22,518		—		—		—		—			(7,863	)		14,655
Financial liabilities at fair value
Derivative liabilities
Derivative liabilities (trading)		9,491		—		—		—		(9,491	)		—			—

44.

Service Concession Arrangements

(1)

Significant terms and concession period of the arrangement

The Company has entered into a contract with National Power Corporation (the “NPC”), based in the Republic of the Philippines whereby the Company can collect the electricity rates which are composed of fixed costs and variable costs during the concession period after building, rehabilitating, and operating the power plant.

(2)

Rights and classification of the arrangement

The Company 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 Company has an obligation to transfer its ownership of the power plant to NPC.

(3)

The Company’s expected future collections of service concession arrangements as of March 31, 2014 are as follows:


In millions of won
Type	Amounts
Less than 1 year	￦	223,281
1~ 2 years		223,281
2~ 3 years		223,281
Each year thereafter through 2022		241,888

149

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

45.

Related Parties

(1)

Related parties of the Company as of March 31, 2014 are as follows:


Type		Related party

Parent		Korean Government

Subsidiaries (79 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., Garorim Tidal Power Plant Co., Ltd., Korea Power Engineering & Power Services Co., Ltd., KEPCO International HongKong Ltd., KEPCO International Philippines Inc., KEPCO Gansu International Ltd., KEPCO Philippines Holdings Inc., KEPCO Philippines Corporation, KEPCO Ilijan Corporation, KEPCO Lebanon SARL, KEPCO Neimenggu International Ltd., KEPCO Shanxi International Ltd., KOMIPO Global Pte Ltd., KEPCO Canada Energy Ltd., KEPCO Netherlands B.V., KOREA Imouraren Uranium Investment Corp., KEPCO Australia Pty., Ltd., KOSEP Australia Pty., Ltd., KOMIPO Australia Pty., Ltd., KOWEPO Australia Pty., Ltd., KOSPO Australia Pty., Ltd. KEPCO Middle East Holding Company, Qatrana Electric Power Company, KHNP Canada Energy Ltd., KEPCO Bylong Australia Pty., Ltd., Korea Waterbury Uranium Limited Partnership, KEPCO Canada Uranium Investment Limited Partnership, Korea Electric Power Nigeria Ltd., KEPCO Holdings de Mexico, KST Electric Power Company, KEPCO Energy Service Company, KEPCO Netherlands S3 B.V., PT. KOMIPO Pembangkitan Jawa Bali, PT. Cirebon Power Service, KOWEPO International Corporation, KOSPO Jordan LLC, EWP Phillippines Corporation (Formely, EWP Cebu Corporation), EWP Philippine Holdings Corporation, EWP America Inc., EWP Renewable Co., DG Fairhaven Power, LLC, DG Kings Plaza Holdings, LLC, DG Kings Plaza, LLC, DG Kings Plaza II, LLC, DG Whitefield, LLC, Springfield Power, LLC, KNF Canada Energy Limited, PT KEPCO Resource Indonesia, EWP Barbados 1 SRL, California Power Holdings, LLC, Gyeonggi Green Energy Co., Ltd., PT. Tanggamus Electric Power, Gyeongju Wind Power Co., Ltd., KOMIPO America Inc., Boulder Solar Power, LLC, EWPRC Biomass Holdings, LLC, KOSEP USA, INC., PT. EWP Indonesia, KOWEPO America LLC., KEPCO Netherlands J3 B.V., Korea Offshore Wind Power Co., Ltd., Global One Pioneer B.V., Global Energy Pioneer B.V., Mira Power Limited, KOSEP Material Co., Ltd., Commerce and Industry Energy Co., Ltd., KEPCO Singapore Holding Pte., Ltd., KOWEPO India Private Limited, KEPCO KPS Philippines Corp., KOSPO Chile SpA.

Associates (58 associates)		Daegu Green Power Co., Ltd., Korea Gas Corporation, Korea Electric Power Industrial Development Co., Ltd., YTN Co., Ltd., Cheongna Energy Co., Ltd., Gangwon Wind Power Co., Ltd., Hyundai Green Power Co., Ltd., Korea Power Exchange, AMEC Partners Korea, Hyundai Energy Co., Ltd., Ecollite Co., Ltd., Taebaek Wind Power Co., Ltd., Alternergy Philippine Investments Corporation, Muju Wind Power Co., Ltd., Pyeongchang Wind Power Co., Ltd., Daeryun Power Co., Ltd., JinanJangsu Wind Power Co., Ltd., Changjuk Wind Power Co., Ltd., KNH Solar 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., Dolphin Property Limited, E-Power S.A., PT Wampu Electric Power, PT. Bayan Resources TBK, S-Power Co., Ltd., Pioneer Gas Power Limited, Eurasia Energy Holdings, Xe-Pian Xe-Namnoy Power Co., Ltd., Busan Solar Co., Ltd., Hadong Mineral Fiber Co., Ltd., Green Biomass Co., Ltd., Gumi-ochang Photovoltaic Power Co., Ltd., Chungbuk Photovoltaic Power Co., Ltd., Cheonan Photovoltaic Power Co., Ltd., PT. Mutiara Jawa, Hyundai Asan Solar Power Co., Ltd., Heang Bok Do Si Photovoltaic Power Co., Ltd., Jeonnam Solar Co., Ltd., DS POWER Co., Ltd., D Solar Energy Co., Ltd., Dongducheon Dream Power Co., Ltd., KS Solar Corp. Ltd., KOSCON Photovoltaic Co., Ltd., Yeongwol Energy Station Co., Ltd., Yeonan Photovoltaic Co., Ltd., Q1 Solar Co., Ltd., Jinbhuvish Power Generation, Best Solar Energy Co., Ltd., Seokcheon Solar Power Co., Ltd., SE Green Energy Co., Ltd., Daegu Photovoltaic Co., Ltd., Jeongam Wind Power Co., Ltd., Korea Power Engineering Service Co., Ltd., Golden Route J Solar Power Co., Ltd.

150

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

45.

Related Parties, Continued


Type		Related party

Joint ventures (36 joint ventures)		KEPCO-Uhde Inc., Eco Biomass Energy Sdn. Bhd., Datang 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, KV Holdings, Inc., KEPCO SPC Power Corporation, Canada Korea Uranium Limited Partnership, KEPCO Energy Resource Nigeria Limited, Gansu Datang Yumen Wind Power Co., Ltd., Datang Chifeng Renewable Power Co., Ltd., Datang KEPCO Chaoyang Renewable Power Co., Ltd., Rabigh Electricity Company, Rabigh Operation & Maintenance Company, Jamaica Public Service Company Limited, KW Nuclear Components Co., Ltd., Busan shinho Solar power Co., Ltd., GS Donghae Electric Power Co., Ltd., YEONGAM Wind Power Co., Ltd., Global Trade Of Power System Co., Ltd., Expressway Solar-light Power Generation Co., Ltd, KODE NOVUS 1 LLC., KODE NOVUS 2 LLC., Daejung Offshore Wind Power Co., Ltd., Arman Asia Electric Power Company, KEPCO-ALSTOM Power Electronics Systems, Inc., Dongbu Power Dangjin Corporation, Honam Wind Power Co., Ltd., Nepal Water & Energy Development Company Pty Ltd., Kelar S.A, PT. Tanjung Power Indonesia, Incheon New Power Co., Ltd., Seokmun Energy Co., Ltd.

Others		Korea Finance Corporation

(2)

Transactions between KEPCO and its subsidiaries are eliminated in the consolidation and will not be shown as notes.

(3)

Related party transactions for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won		Sales and others
Company name	Transaction type	March 31, 2014		March 31, 2013

<Associates>
Daegu Green Power Co., Ltd.	Electricity sales	￦	206		9
Dongducheon Dream Power Co., Ltd.	Rental income and others		3,929		—
Korea Gas Corporation	Electricity sales		22,532		52104
Chungbuk Photovoltaic Power Co., Ltd.	Electricity sales		2		—
Cheonan Photovoltaic Power Co., Ltd.	Electricity sales		1		—
Daegu Photovoltaic Co., Ltd.	Service		—		5
Jeongam Wind Power Co., Ltd.	Service		4		—
Yeongwol Energy Station Co., Ltd.	Service		2,323		—
KOSCON Photovoltaic Co., Ltd.	Service		2		—
Yeonan Photovoltaic Co., Ltd.	Service		2		—
Q1 Solar Co., Ltd.	Service		5		—
Best Solar Energy Co., Ltd.	Service		5		—
Seokcheon Solar Power Co., Ltd.	Electricity sales		2		—
D Solar Energy Co., Ltd.	Electricity sales		3		—
KS Solar Co., Ltd	Electricity sales		2		—
Incheon New Power Co., Ltd.	Construction revenue		2,219		—
Hyundai Asan Solar Power Co., Ltd.	Electricity sales		3		—
Korea Electric Power Industrial Development Co., Ltd.	Service		5,255		1,303
DS POWER Co., Ltd.	Construction revenue		20,106		—
YTN Co., Ltd.	Electricity sales		596		282
Cheongna Energy Co., Ltd.	Rental income and others		6,331		607
Gangwon Wind Power Co., Ltd.	Dividend income		2,020		2,013
Hyundai Green Power Co., Ltd.	Dividend income		10,430		9,727
Korea Power Exchange	Service		2,907		3,498
Hyundai Energy Co., Ltd.	Service		14,259		5,358
Ecollite Co., Ltd.	Interest income		—		449

151

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

45.

Related Parties, Continued

(3)

Related party transactions for the three-month periods ended March 31, 2014 and 2013 are as follows, continued:


In millions of won		Sales and others
Company name	Transaction type	March 31, 2014		March 31, 2013
Taebaek Wind Power Co., Ltd.	Service	￦	183		168
Daeryun Power Co., Ltd.	Electricity sales		478		30
Changjuk Wind Power Co., Ltd.	Electricity sales		160		156
KNH Solar Co., Ltd.	Electricity sales		5		6
S-Power Co., Ltd.	Electricity sales		154		—
Busan Solar Co., Ltd.	Electricity sales		5		—
Dolphin Property Limited	Service		—		32
E-POWER S.A.	Service		4		1,883
<Joint ventures>
KEPCO SPC Power Corporation	Interest income		1,426		2,546
Dongbu Power Dangjin Corporation	Technical fee		5		—
Honam Wind Power Co., Ltd.	Electricity sales		19		—
KW Nuclear Components Co., Ltd.	Service		128		267
STX Electric Power Co., Ltd.	Architectural engineering		1,101		684
Busan shinho Solar power Co., Ltd.	Electricity sales		6		—
YEONGAM Wind Power Co., Ltd.	Service		29		—
Global Trade Of Power System Co., Ltd.	Service		39		—
Datang Chifeng Renewable Power Co., Ltd.	Interest income		601		683
Rabigh Operation & Maintenance Company	Rental income and others		275		524
Shuweihat Asia Power Investment B.V.	Service		—		30
Jamaica Public Service Company Limited	Service		726		678
KV Holdings, Inc.	Dividend income		—		319
Arman Asia Electric Power Company	Service		4,903		9,989

In millions of won		Purchase and others
Company name	Transaction type	March 31, 2014		March 31, 2013

<Associates>
Korea Gas Corporation	Purchase of power generation fuel	￦	3,546,368		3,421,045
Gumi-ochang Photovoltaic Power Co., Ltd.	REC Purchase		528		676
Chungbuk Photovoltaic Power Co., Ltd.	REC Purchase		115		224
Cheonan Photovoltaic Power Co., Ltd.	REC Purchase		65		116
Daegu Photovoltaic Co., Ltd.	Electricity purchase		409		—
Golden Route J Solar Power Co., Ltd.	Service		127		93
KOSCON Photovoltaic Co., Ltd.	Electricity purchase		486		—
Yeonan Photovoltaic Co., Ltd.	Electricity purchase		236		—
Q1 Solar Co., Ltd.	Electricity purchase		925		—
Best Solar Energy Co., Ltd.	Electricity purchase		816		—
Seokcheon Solar Power Co., Ltd.	Service		270		85
D Solar Energy Co., Ltd.	REC Purchase		481		—
KS Solar Co., Ltd	REC Purchase		215		—
Hyundai Asan Solar Power Co., Ltd.	Electricity purchase		418		—

152

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

45.

Related Parties, Continued

(3)

Related party transactions for the three-month periods ended March 31, 2014 and 2013 are as follows, continued:



In millions of won		Purchase and others
Company name	Transaction type	March 31, 2014		March 31, 2013
Korea Electric Power Industrial Development Co., Ltd.	Electricity metering	￦	52,400		42,874
YTN Co., Ltd.	Service		—		125
Gangwon Wind Power Co., Ltd.	Electricity purchase		8,197		11,468
Hyundai Green Power Co., Ltd.	Electricity purchase		121,714		82,089
Korea Power Exchange	Electricity purchase		23,862		20,218
Hyundai Energy Co., Ltd.	Electricity purchase		—		231
Taebaek Wind Power Co., Ltd.	REC Purchase		4,485		3,474
Changjuk Wind Power Co., Ltd.	Electricity purchase		4,634		2,801
KNH Solar Co., Ltd.	REC Purchase		1,454		1,024
Busan Solar Co., Ltd.	Electricity purchase		972		307
Green Biomass Co., Ltd.	Woodchip purchase		442		—

<Joint ventures>
KEPCO-ALSTOM Power Electronics Systems, Inc	Service		176		—
Busan shinho Solar power Co., Ltd.	Electricity purchase		2,794		683
YEONGAM Wind Power Co., Ltd.	Electricity purchase		3,230		—
Expressway Solar-light Power	Electricity purchase		233		171
Jamaica Public Service Company Limited	Service		28		—

(4)

Receivables and payables arising from related party transactions as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won		Receivables				Payables
Company name	Type	March 31, 2014		December 31, 2013		March 31, 2014		December 31, 2013

<Associates>
Korea Gas Corporation	Trade receivables	￦	5,546		8,237		—		—
	Non-trade receivables and others		274		1,507		—		—
	Trade payables		—		—		1,225,850		1,208,072
	Non-trade payables and others		—		—		1		101
Chungbuk Photovoltaic Power Co., Ltd.	Trade receivables		1		—		—		—
	Non-trade payables and others		—		—		67		57
Cheonan Photovoltaic Power Co., Ltd	Non-trade payables and others		—		—		54		—
Daegu Photovoltaic Co., Ltd.	Non-trade payables and others		—		—		171		212
Jeongam Wind Power Co., Ltd.	Non-trade payables and others		—		—		—		6
Golden Route J Solar Power Co., Ltd.	Non-trade payables and others		—		—		35		48
Yeongwol Energy Station Co., Ltd.	Trade receivables		8,075		11,413		—		—
KOSCON Photovoltaic Co., Ltd.	Non-trade payables and others		—		—		311		45
Yeonan Photovoltaic Co., Ltd.	Trade receivables		—		23		—		—
	Non-trade payables and others		—		—		101		20
Q1 Solar Co., Ltd.	Trade receivables		1		—		—		—
Best Solar Energy Co., Ltd.	Trade receivables		2		—		—		—
	Non-trade payables and others		—		—		—		21
Seokcheon Solar Power Co., Ltd.	Non-trade payables and others		—		—		120		154
D Solar Energy Co., Ltd. KS Solar Co., Ltd Incheon New Power Co., Ltd.	Non-trade payables and others		—		—		228		29
	Trade receivables		1		—		—		—
	Trade receivables		706		—		—		—
	Non-trade payables and others		—		—		—		1,483
Hyundai Asan Solar Power Co., Ltd.	Trade receivables		3		—		—		—
	Non-trade payables and others		—		—		112		—
Korea Electric Power Industrial Development Co., Ltd.	Trade receivables		1,345		590		—		—

153

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

45.

Related Parties, Continued

(4)

Receivables and payables arising from related party transactions as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won		Receivables				Payables
Company name	Type	March 31, 2014		December 31, 2013		March 31, 2014		December 31, 2013
	Non-trade receivables and others	￦	210		129		—		—
	trade payables		—		—		12		—
	Non-trade payables and others		—		—		11,156		24,357
DS Power Co., Ltd.	Trade receivables		1,610		—		—		—
	Non-trade receivables and others		17,949		—		—		—
YTN Co., Ltd.	Non-trade payables and others		—		—		—		1
	Trade receivables		51		51		—		—
	Non-trade payables and others		—		—		—		110
Cheongna Energy Co., Ltd.	Trade receivables		103		133		—		—
	Non-trade receivables and others		810		1,805		—		—
	Non-trade payables and others		—		—		1		—
Gangwon Wind Power Co., Ltd.	Trade receivables		8		7		—		—
	Non-trade payables and others		—		—		3,769		3,720
Hyundai Green Power Co., Ltd.	Trade receivables		877		1,311		—		—
	Non-trade payables and others		—		—		39,836		28,427
Korea Power Exchange	Trade receivables		68,111		3,810		—		—
	Non-trade receivables and others		8		147		—		—
	Trade payables		—		—		3,317		3,497
	Non-trade payables and others		—		—		2,680		6,709
Hyundai Energy Co., Ltd.	Trade receivables		80		60		—		—
	Non-trade receivables and others		24,211		17,936		—		—
	Non-trade payables and others		—		—		9,116		8,823
Taebaek Wind Power Co., Ltd.	Trade receivables		99		129		—		—
	Non-trade payables and others		—		—		653		703
Pyeongchang Wind Power Co., Ltd.	Trade receivables		—		186		—		—
	Non-trade receivables and others		186		—		—		—
Daeryun Power Co., Ltd.	Trade receivables		150		208		—		—
Changjuk Wind Power Co., Ltd.	Trade receivables		87		92		—		—
	Non-trade payables and others		—		—		639		797
Busan Solar Co., Ltd.	Trade receivables		1		—		—		—
	Trade payables		—		—		266		—
	Non-trade payables and others		—		—		77		3
KNH Solar Co., Ltd.	Trade receivables		1		1		—		—
	Non-trade payables and others		—		—		14		—
S-Power Co., Ltd.	Trade receivables		65		—		—		—
Green Biomass Co., Ltd.	Non-trade receivables and others		120		258		—		—
	Non-trade payables and others		—		—		—		45
SPC Power Corporation	Non-trade receivables and others		—		6		—		—
E-POWER S.A.	Non-trade receivables and others		—		2		—		—

154

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

45.

Related Parties, Continued

(4)

Receivables and payables arising from related party transactions as of March 31, 2014 and December 31, 2013 are as follows, continued:


In millions of won		Receivables Payables
Company name	Type	March 31, 2014		December 31, 2013		March 31, 2014		December 31, 2013
<Joint venture>
KEPCO SPC Power Corporation	Trade receivables	￦	15,336		10,237		—		—
	Non-trade receivables and others		1,688		—		—		—
KEPCO-ALSTOM Power Electronics Systems, Inc	Non-trade receivables and others		—		473		—		—
Dongbu Power Dangjin Corporation	Non-trade receivables and others		5		1,575		—		—
Seokmun Energy Co., Ltd.	Non-trade receivables and others		196		196		—		—
KW Nuclear Components Co., Ltd.	Non-trade receivables and others		41		—		—		—
GS Donghae Electric Power Co., Ltd.	Trade receivables		4		323		—		—
	Non-trade receivables and others		229		100		—		—
Busan Shinho Solar power Co., Ltd.	Trade receivables		2		—		—		—
	Non-trade payables and others		—		—		1,078		1,132
YEONGAM Wind Power Co., Ltd.	Trade receivables		3		252		—		—
	Non-trade receivables and others		2		—		—		—
Datang Chifeng Renewable Power Co., Ltd.	Trade receivables		75		613		—		—
Jamaica Public Service Company Limited	Trade receivables		537		537		—		—
	Non-trade receivables and others		117		59		—		—
Arman Asia Electric Power Company	Trade receivables		2,854		—		—		—

155

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

45.

Related Parties, Continued

(5)

Loans and others arising from related party transactions as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won
Type	Company name	Beginning balance		Loans		Collection			Allowance for doubtful accounts			Others		Ending balance
Joint ventures	KEPCO SPC Power Corporation	￦	48,544		—		—			—			621		49,165
Joint ventures	Datang Chifeng Renewable Power Co., Ltd.		35,679		—		(3,614	)		—			456		32,521
Joint ventures	Jamaica Public Service Company Limited		2,111		—		—			—			27		2,138
Associates	KNOC Nigerian East Oil Co., Ltd. KNOC Nigerian West Oil Co., Ltd.		25,353		189		—			(20,228	)		300		5,614
Associates	Dolphin Property Limited		953		—		—			(354	)		6		605
Associates	Rabigh Electricity Company		103,421		—		—			—			1,323		104,744
Associates	PT. Cirebon Electric Power		55,741		—		—			—			1,591		57,332

		￦	271,802		189		(3,614	)		(20,582	)		4,324		252,119

(6)

Borrowings arising from related party transactions as of March 31, 2014 and December 31, 2013 are as follows:

In millions of won

Type

Company name

Transaction type

Beginning balance

Borrowings

Repayment

Others

Ending
balance

Other related parties

Korea Finance

Corporation

￦

Facility

2,300,000

—

2,300,000

156

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

45.

Related Parties, Continued

(7)

Guarantees provided to an associates or joint ventures as of March 31, 2014 are as follows:


In millions of won and thousands of foreign currencies
Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit		Guarantee

Korea Electric Power Corporation	KEPCO SPC Power Corporation	Debt guarantees	USD	189,565	SMBC and others
Korea Electric Power Corporation	Shuweihat Asia Power Investment B.V.	Performance guarantees	USD	17,900	ADWEA
Korea Electric Power Corporation	Shuweihat Asia O&M Co, Ltd.	Performance guarantees	USD	11,000	ADWEA
Korea Electric Power Corporation	KNOC Nigerian East Oil Co., Ltd. and KNOC Nigerian West Oil Co., Ltd.	Performance guarantees	USD	34,650	Korea National Oil Corporation (Nigerian government)
Korea Electric Power Corporation	Amman Asia Electric Power Company	Performance guarantees	USD	19,800	Standard Chartered Bank
Korea Western Power Co., Ltd.	Cheongna Energy Co., Ltd.	Collateralized money invested	KRW	42,646	Hana Bank, Korea Exchange Bank
		Guarantees for supplemental funding (*)		—
Korea Western Power Co., Ltd.	Xe-Pian Xe-Namnoy Power Co., Ltd.	Payment guarantees for business reserve	USD	2,500	Krung Thai Bank and others
		Collateralized money invested	USD	16,934
		Guarantees for supplemental funding (*)		—
Korea Western Power Co., Ltd.	Rabigh O&M Co., Ltd.	Performance guarantees	SAR	4,800	Saudi Arabia British Bank
Korea Western Power Co., Ltd.	Deagu Photovoltaic Co., Ltd.	Collateralized money invested	KRW	1,229	Shinhan Capital Co., Ltd.
Korea Western Power Co., Ltd.	Dongducheon Dream Power Co., Ltd.	Collateralized money invested	KRW	144,200	Kookmin Bank and others
Korea Western Power Co., Ltd.	PT Mutiara Jawa	Collateralized money invested	USD	2,610	Shinhan Bank Singapore
Korea East-West Power Co., Ltd.	Busan shinho Solar power Co., Ltd.	Collateralized money invested	KRW	2,100	KT Capital Co., Ltd.
Korea East-West Power Co., Ltd.	GS-Donghae Electric Power Co., Ltd. (formerly named STX Electric Power Co., Ltd.)	Collateralized money invested	KRW	225,400	Korea Development Bank
Korea East-West Power Co., Ltd.	Honam Wind Power Co., Ltd.	Collateralized money invested	KRW	3,480	Shinhan Bank and others
Korea Southern Power Co., Ltd.	KNH Solar Co., Ltd.	Collateralized money invested	KRW	1,296	Shinhan Bank, Kyobo Life Insurance Co., Ltd.
		Performance guarantees and guarantees for supplemental funding (*)		—
Korea Southern Power Co., Ltd.	Daeryun Power Co., Ltd.	Collateralized money invested	KRW	25,477	Korea Development Bank, Daewoo Securities Co., Ltd. and others
		Guarantees for supplemental funding (*)		—
Korea Southern Power Co., Ltd.	Changjuk Wind Power Co., Ltd.	Collateralized money invested	KRW	3,801	Shinhan Bank, Woori Bank
		Guarantees for supplemental funding (*)		—
Korea Southern Power Co., Ltd.	Busan Solar Co., Ltd.	Collateralized money invested	KRW	793	Consus Asset Management Co., Ltd
Korea Southern Power Co., Ltd.	Taebaek Wind Power Co., Ltd.	Guarantees for supplemental funding (*)		—	Shinhan Bank, Bank of Cheju
Korea Southern Power Co., Ltd.	Daegu Green Power Co., Ltd.	Collateralized money invested	KRW	76,193	Korea Exchange Bank and others
		Performance guarantees and guarantees for supplemental funding (*)		—
Korea Southern Power Co., Ltd.	KS Solar Corp. Ltd.	Collateralized money invested	KRW	637	Shinhan Capital Co., Ltd.
Korea Southern Power Co., Ltd.	Jeonnam Solar Co., Ltd.	Collateralized money invested	KRW	700	Shinhan Capital Co., Ltd.

157

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

45.

Related Parties, Continued

(7)

Guarantees provided to an associates or joint ventures as of March 31, 2014 are as follows, continued:


In millions of won and thousands of foreign currencies
Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit		Guarantee
Korea Southern Power Co., Ltd.	Kelar S.A.	Performance guarantees	USD	13,000	Korea Exchange Bank
		Debt guarantees	USD	106,600	SMBC, MIZUHO
KEPCO Engineering & Construction Company, Inc.	DS Power Co., Ltd.	Collateralized money invested	KRW	2,900	Korea Development Bank and Daewoo Securities Co., Ltd.
Korea Southern Power Co., Ltd.			KRW	15,000
KEPCO Engineering & Construction Company, Inc.		Performance guarantees and guarantees for supplemental funding (*)		—
Korea Southern Power Co., Ltd.				—
Korea Midland Power Co., Ltd.	Hyundai Green Power Co.	Collateralized money invested	KRW	87,003	Korea Development Bank and others
		Guarantees for supplemental funding (*)		—
Korea Midland Power Co., Ltd.	Gangwon Wind Power Co., Ltd.	Collateralized money invested	KRW	7,410	Industrial Bank of Korea
Korea Midland Power Co., Ltd.	Cheonan Photovoltaic Power Co., Ltd.	Collateralized money invested	KRW	122	KT Capital Corporation
Korea Midland Power Co., Ltd.	Gumi-ochang Photovoltaic Power Co., Ltd.	Collateralized money invested	KRW	288	Shinhan Capital Co., Ltd.
Korea Midland Power Co., Ltd.	Chungbuk Photovoltaic Power Co., Ltd.	Collateralized money invested	KRW	166	KT Capital Corporation
Korea Midland Power Co., Ltd.	Golden Route J Solar Power Co., Ltd.	Collateralized money invested	KRW	82	Shinhan Capital Co., Ltd.
Korea Midland Power Co., Ltd.	D Solar Energy Co., Ltd.	Collateralized money invested	KRW	400	Shinhan Capital Co., Ltd.
Korea Midland Power Co., Ltd.	Hyundai Asan Solar Power Co., Ltd.	Collateralized money invested	KRW	471	Shinhan Capital Co., Ltd.
Korea South-East Power Co., Ltd.	Hyundai Energy Co., Ltd.	Collateralized money invested	KRW	71,070	Korea Development Bank and others
		Performance guarantees and guarantees for supplemental funding (*)		—
Korea South-East Power Co., Ltd.	RES Technology AD	Collateralized money invested	KRW	15,595	Korea Development Bank and others
		Debt guarantees	EUR	4,271
Korea South-East Power Co., Ltd.	ASM-BG investicii AD	Collateralized money invested	KRW	16,101	Korea Development Bank and others
		Debt guarantees	EUR	4,175
Korea South-East Power Co., Ltd.	Express solar-light Power Generation Co., Ltd.	Collateralized money invested	KRW	3,132	Woori Bank and others
		Guarantees for supplemental funding (*)		—
Korea South-East Power Co., Ltd.	S-Power Co., Ltd.	Collateralized money invested	KRW	108,000	Korea Development Bank and others
		Performance guarantees and guarantees for supplemental funding (*)		—
Korea South-East Power Co., Ltd.	YEONGAM Wind Power Co., Ltd.	Collateralized money invested	KRW	11,584	Kookmin Bank and others
		Guarantees for supplemental funding (*)		—
Korea South-East Power Co., Ltd.	Coscon Photovoltaic Co., Ltd.	Collateralized money invested	KRW	245	Shinhan Capital Co., Ltd.
Korea South-East Power Co., Ltd.	Yeonan Solar Co., Ltd.	Collateralized money invested	KRW	157	Shinhan Capital Co., Ltd.

158

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

45.

Related Parties, Continued

(7)

Guarantees provided to an associates or joint ventures as of March 31, 2014 are as follows, continued:


In millions of won and thousands of foreign currencies
Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit		Guarantee
Korea South-East Power Co., Ltd.	Q1 Solar Energy Co., Ltd.	Collateralized money invested	KRW	1,005	Shinhan Bank and others
Korea South-East Power Co., Ltd.	Best Solar Energy Co., Ltd.	Collateralized money invested	KRW	1,242	Shinhan Bank and others
KOSEP USA, INC.	KODE NOVUS II LLC	Guarantees for supplemental funding (*)		—	Korea Development Bank and others
KOSEP USA, INC.	KODE NOVUS I LLC	Guarantees for supplemental funding (*)		—	Daewoo Shipbuilding & Marine Engineering Co., Ltd. and others
Korea South-East Power Co., Ltd.	Yeong Wol Energy Station Co., Ltd.	Collateralized money invested	KRW	462	Daewoo Securities Co., Ltd. and others
Korea Hydro & Nuclear Power Co., Ltd.			KRW	1,400
Korea Plant Service & Engineering Co., Ltd.	Incheon New Power Co., Ltd.	Collateralized money invested	KRW	461	Shinhan Bank
		Guarantees for supplemental funding (*)		—

(*)	The Company guarantees to provide supplemental funding for business with respect to excessive business expenses or insufficient repayment of borrowings.

(8)

As of March 31, 2014, there are no guarantees provided by related parties.

(9)

Salaries and other compensations to the key members of management of the Company for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won
Type	March 31, 2014		March 31, 2013
Salaries	￦	193		242
Retirement and severance benefits		5		16

	￦	198		258

46.

Non-Cash Transactions

Significant non-cash investment and finance transactions excluded from statements of cash flows for the three-month periods ended March 31, 2014 and 2013 are as follows:


In millions of won
Transactions	March 31, 2014		March 31, 2013
Transfer of long-term borrowings and debt securities from non-current to current	￦	1,412,219		2,049,196
Conversion of investments in joint ventures from debt to equity		—		108,385
Transfer of finance lease receiva		—		23,575

159

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

47.

Commitments for Expenditure

(1)

The agreements for acquisition of property, plant and equipment as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won	March 31, 2014				December 31, 2013
Contracts	Amounts		Balance		Amounts		Balance
Construction of New Uljin units	￦	14,559,941		11,476,920		14,559,941		11,756,580
Construction of New Kori units		14,097,914		8,236,185		14,097,914		8,306,938
Construction of New Wolseong units		5,310,003		348,101		5,310,003		449,958
Construction of Dangjin units		957,216		376,624		952,729		486,809
Construction of New Boryeong units		1,801,718		1,456,944		1,801,718		1,613,529
Construction of Samcheok units		2,273,156		1,402,238		2,273,156		1,772,954
Construction of Taean IGCC units		927,974		452,498		925,173		521,439
Construction of Taean units		937,954		840,363		937,954		852,254
Construction of Incheon units		—		—		167,566		—
Construction of office building (KDN)		106,493		60,707		106,493		68,283
Construction of office building (KOPEC)		210,021		155,886		210,021		167,563
Construction of Sejong city cogeneration units		305,360		46,007		468,153		63,485
Purchase of Wonju cogeneration units		50,220		39,333		50,400		50,241
Purchase of Ulsan combined cycle power units		256,760		117,491		256,760		63,514
Purchase of Pyeongtaek combined cycle power units		361,950		56,205		354,976		75,048
Purchase of Andong main machine		234,601		13,305		685,335		28,194
Purchase of diesel for generation		54,177		—		54,177		54,177
Construction of New Yeongheung units		1,633,116		242,674		1,639,047		286,727
Construction of New Yeosu units		452,932		354,495		417,733		337,926
Construction of New Seoul units		586,493		550,493		586,493		550,493
Purchase of Concrete Poles (10M,350KGF)		77,209		40,827		77,209		71,111
Other purchase contracks		131,849		58,831		135,761		65,394

(2)

As of March 31, 2014, details of contracts for inventory purchase are as follows:

The Company 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 Company 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 amounts
Concentrate	2014 ~ 2030	36,288 Ton U3O8
Transformed	2014 ~ 2022	19,511 Ton U
Enrichment	2014 ~ 2029	39,058 Ton SWU
Molded	2014	999 Ton U

160

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

48.

Contingencies and Commitments

(1)

Ongoing litigations related with contingent liabilities and assets as of March 31, 2014 and December 31, 2013 are as follows:


In millions of won
Company	March 31, 2014				Decemcer 31, 2013
Company	Number of cases		Claim amount		Number of cases		Claim amount
<As the defendant>
Korea Electric Power Corporation		517	￦	319,845		490	￦	317,466
Korea Hydro & Nuclear Power Co., Ltd.		47		36,828		38		35,806
Korea South-East Power Co., Ltd.		12		5,846		13		6,956
Korea Midland Power Co., Ltd.		10		5,767		14		8,174
Korea Western Power Co., Ltd.		12		4,304		11		4,307
Korea Southern Power Co., Ltd.		18		25,318		19		25,318
Korea East-West Power Co., Ltd.		11		3,705		12		3,814
KEPCO Engineering & Construction Company, Inc.		2		399		1		219
Korea Plant Service & Engineering Co., Ltd.		5		1,188		6		3,164
Korea Nuclear Fuel Co., Ltd.		3		368		1		40
Korea Electric Power Data Network Co., Ltd.		2		150		2		150
KEPCO Ilijan Corporation		1		2,496		1		2,496

		640		406,214		608		407,910

<As the plaintiff>
Korea Electric Power Corporation		108		78,957		109		104,104
Korea Hydro & Nuclear Power Co., Ltd.		20		141,658		—		—
Korea South-East Power Co., Ltd.		3		3,297		5		3,357
Korea Midland Power Co., Ltd.		—		—		3		1,388
Korea Western Power Co., Ltd.		2		180		2		180
KEPCO Lebanon SARL		3		6,413		3		8,625
Qatrana Electric Power Company		1		39,878		1		39,450

		137		270,383		123		157,104

The Company is the defendant against a number of claims. The following are potentially significant claims pertaining to the Company:

Korea Electric Power Corporation (KEPCO) contracted with LS Cable & System Ltd. for 250kv submarine cables installed in the 105km section between Jindo (Mainland) and Jeju Island in September 2009. LS Cable & System Ltd. notified KEPCO of the completion of construction and requested the issuance of a certificate of completion, however KEPCO disagreed that LS Cable & System Ltd. had completed construction in accordance with the conditions of their contract. As a result, KEPCO rejected the goods (submarine cables installed) delivered and refused to pay LS Cable & System Ltd.

LS Cable & System Ltd. filed for arbitration (seeking a total amount of ￦194 billion from KEPCO) with the The Korean Commercial Arbitration Board in April 2013 in order to demand unpaid invoices and extra payments relating to claims of rejection ofthe test on completion and goods (submarine cables installed) delivered.

At this time, management believes the Company does not have a present obligation for this matter and has not recognized any provision as of March 31, 2014 due to the fact that LS Cable & System did not fully perform its obligations according to the contract terms. It is not possible to estimate an amount of potential loss because the Korean Commercial Arbitration Board is in the early stage of the process of examining the factual accuracy of the claims of each party by hiring third party experts.

161

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

48.

Contingencies and Commitments, Continued

(1)

Ongoing litigations related with contingent liabilities and assets as of March 31, 2014 and December 31, 2013 are as follows, continued

‚

Korea Nuclear Technology Co., Ltd. was qualified to supply Korea Hydro & Nuclear Power Co., Ltd., a subsidiary of KEPCO, Passive Autocatalytic Recombiners(PAR) which had been developed under a cooperative research and development agreement and designated as items to be developed over a period of three years through a negotiated contract. Korea Nuclear Technology Co., Ltd. filed a lawsuit for damages and compensation against Korea Hydro & Nuclear Power Co., Ltd. relating to claims of contracting with another company through open bid.

The lower court ruled against the plaintiff based on the principle of freedom of contract and principle of competitive bid preference in October 2013. The plaintiff has filed an appeal as of March 31, 2014.

At this time, management believes the Company does not have a present obligation for this matter and has not recognized any provision as of March 31, 2014 since the Company does not have any legal obligation to have a contract with the plaintiff which is supported decesion of the lower court.

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. The Supreme Court ruled, that “employees shall not retroactively demand the difference in overtime pay as additional wages, in the event that the demand itself causes an unexpected increase in spending for their company, and thus lead the company to financial difficulty. In that case, the request is not acceptable, since it is unjust, and it is in breach of the principle of good faith.”

Prior to the ruling of the Supreme Court, the Company determined wages in accordance with budget instructions from the Ministry of Strategy and Finance, which excluded bonuses from ordinary wages and was with the consent of the Company’s labor unions. Any request for the retroactive demand for the difference in overtime pay as additional wages may be limited based on the principle of good faith.

At this time, management believes that the Company does not have a present obligation for this matter and has not recognized any provision as of March 31, 2014 becasue the application of the Supreme Court’s ruling is not clear and it is highly unpredictable to estimate the timing of payment and the amount since the Company is required to follow the Korean government’s guidance, as a government entity. It is not possible to estimate the amount of potential loss because it will be dependant upon the future agreement between the management of the Company and the labor unions or the outcome of any similar lawsuits.

In addition, Korean Power Plant Industry Union and others filed lawsuits (worth ￦44.6 billion) against six generation units including Korea Western Power Co., Ltd., and subsidiaries of KEPCO relating to claims that ordinary wages have been paid without including certain items of wages that should have been included in ordinary wages.

162

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

48.

Contingencies and Commitments, Continued

(2)

Guarantees of borrowings provided to other companies as of March 31, 2014 and December 31, 2013 are as follows:

In thousands of U.S. dollars

Guarantees

Financial or non-financial
institution

Date of
contract

Period of contract

March 31,
2014

December 31,
2013

Repayment guarantees for UAE Shuweihat S3 borrowings

Mizuho, SMBC, HSBC

2011-05-16

2011-05-16 ~ 2014-02-28

—

USD

58,294

Guarantee of UAE Shuweihat S3 interest swap agreement

SMBC

2011-05-16

2011-05-16 ~ 2014-02-28

—

USD

1,500

The Company provides performance guarantee related to construction completion to Kookmin Bank. As such performance guarantee does not meet the definition of financial guarantee contract in K-IFRS 1039 ‘Financial Instruments; Recognition and Measurement’, no related liability is recognized.

163

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

48.

Contingencies and Commitments, Continued

(3)

Credit lines provided by financial institutions as of March 31, 2014 are as follows:


In millions of won and thousands of foreign currencies
Commitments	Financial institutions	Currency	Gaurantee limit

Commitments on Bank-overdraft	Nonghyup Bank and others	KRW		1,845,240
Commitments on Bank-daylight overdraft	Nonghyup Bank and others	KRW		280,000
Limit amount available for CP	Korea Exchange Bank and others	KRW		1,129,000
Limit amount available for card	Hana Bank and others	KRW		77,023
Certification of payment on payables from foreign country	Korea Development Bank	USD		420,009
Loan limit	Export-Import Bank of Korea	KRW		138,330
	BNP Paribas and others	USD		2,796,059
Certification of payment on L/C	Woori Bank and others	USD		2,228,954
	Korea Exchange Bank	GBP		183,507
	Korea Exchange Bank and others	EUR		3,100
	Kookmin Bank and others	JPY		8,677,652
Certification of performance guarantee on contract	Shinhan Bank and others	KRW		144,007
	Korea Exchange Bank	AED		54,880
	Standard Chartered Bank and others	USD		843,602
	Kookmin Bank	EUR		37,082
	Hana Bank and others	INR		185,077
Certification of bidding	SMBC and others	USD		14,116
Advance payment bond, Warranty bond, Retention bond and others	Shinhan Bank	EUR		5,438
	Standard Chartered Bank and others	USD		252,264
	Katumandu Bank and others	NPR		85,289
Others	Korea Exchange Bank	KRW		4,000
	Export-Import Bank of Korea and others	USD		1,407,500
	Hana Bank and others	INR		157,830
Inclusive credit	Korea Exchange Bank	KRW		925,000
	HSBC and others	USD		354,003
	Shinhan Bank and others	INR		47,489

164

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

48.

Contingencies and Commitments, Continued

(4)

As of March 31, 2014, the blank check and assets provided as collaterals or pledges to financial institutions by the Company are follows:

In millions of won and thousands of U.S. dollars

Guarantor

Guarantee

Type of guarantee

Currency

Amount

Description

Korea Nuclear Fuel Co., Ltd.

Korea Resources Corporation

Blank check

KRW

—

Collateral for borrowings

KEPCO International Philippines Inc.

Citibank New York

All shareholdings of KEPCO llijan Corporation

USD

90,623

Required pursuant to Pledge Agreement between KIPI, KEILCO and Citibank New York re: KEILCO Project Financing in Nov. 2000

Korea East-West Power Co., Ltd.

Korea Development Bank and others

All shareholdings of Gyeongju Wind Power Co., Ltd.

KRW

9,240

Collateral for borrowings

Korea Hydro & Nuclear Power Co., Ltd.

Korea Development Bank and others

All shareholdings of Gyeonggi Green Energy Co., Ltd.

KRW

47,000

Collateral for borrowings

Korea Midland Power Co., Ltd.

Hana Bank and others

All shareholdings of Commerce and Industry Energy Co., Ltd.

KRW

13,570

Collateral for borrowings

Gyeonggi Green Energy Co., Ltd.

Korea Development Bank and others

Factory estate and others

KRW

327,080

Providing Guarantees

Commerce and Industry Energy Co., Ltd.

Hana Bank and others

Land, buildings, structures and machinery

KRW

111,800

Collateral for borrowings

Gyeongju Wind Power Co., Ltd.

Korea Development Bank and others

Existing or expected trade receivables

KRW

2,085

Collateral for borrowings

Land

168

Qatrana Electric Power Company

The Islamic Development Bank

Finance Lease receivable and Property, Plant and Equipment and others

JOD

46,213

Collateral for borrowings

(*)

As of March 31, 2014, the Group was provided with shares of Gyeonggi Green Energy Co., Ltd., one of its subsidiary, as collateral related to long-term borrowings above from shareholders of the subsidiary including the Controlling Company. Additionally, pledge for transfer of rights of long-term borrowings, pledge for insurance claims related long-term borrowings and other pledges were established.

(5)

Fuel cost adjustment, a new electric tariff system was enacted by the Ministry of Knowledge Economy (newly named the Ministry of Trade Industry and Energy), which went into effect on July 2011. Adjusted unit fuel rate, which is multiplies fuel price variance, which is the deduction of base fuel rate from actual fuel rate with conversion coefficient. However, due to inflationary and other policy considerations relating to protecting the consumers from sudden and substantial rises in electricity tariff, the Ministry of Knowledge Ecnomoy issued a hold order on July 29, 2011 to suspending billing and collecting the amounts.

The accumulated difference as of March 31, 2014 is ￦350,050 million, which has decreased by ￦1,527,321 million from ￦1,877,371 million as of December 31, 2013.

There is no assurance as to when the Government will lift the hold order and allow the Company to bill and collect the FCPTA amounts. The Company concluded that, in consideration of the prolonged unbilled period and consultation with, and information from, the Ministry, the Company would not be able to bill and collect the unbilled FCPTA amounts for the foreseeable future. As a result, there were no FCPTA amounts remaining in the consolidated statement of financial position as of March 31, 2014.

165

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

48.

Contingencies and Commitments, Continued:

(6)

The Company has a potential obligation to reimburse approximately ￦8.3 billion to KEPCO SPC Power Corporation, one of its joint ventures of the Company, for the turbine accident on Phillippine Unit 2 power plant. Due to the uncertainties of who’s responsible party for the accident, the Company has not recognized for the expected financial effect in the consolidated statement of financial position as of March 31, 2014.

49.

Subsequent Events

Subsequent to the reporting date, the subsidiaries of the KEPCO, Korea Hydro & Nuclear Power Co., Ltd., Korea Midland Power Co., Ltd. and Korea Southern Power Co., Ltd. have issued new debt securities for funds of facilities and operation as follows:


In millions of won
Company name	Type	Interest rate			Issue date		Maturity		Currency	Amounts

Korea Hydro & Nuclear Power Co., Ltd.	42-1^st Unsecured bond		3.30	%		2014.04.25		2019.04.25	KRW		60,000
	42-2^nd Unsecured bond		3.68	%		2014.04.25		2024.04.25	KRW		100,000
	42-3^rd Unsecured bond		3.89	%		2014.04.25		2034.04.25	KRW		100,000
Korea Midland Power Co., Ltd.	26-1^st Unsecured bond		3.49	%		2014.04.18		2021.04.18	KRW		110,000
	26-2^nd Unsecured bond		3.67	%		2014.04.18		2024.04.18	KRW		190,000
Korea Southern Power Co., Ltd.	27-1^st Unsecured bond		3.24	%		2014.05.13		2019.05.13	KRW		70,000
	27-2^nd Unsecured bond		3.58	%		2014.05.13		2024.05.13	KRW		260,000
	27-3^rd Unsecured bond		3.73	%		2014.05.13		2029.05.13	KRW		60,000

166

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2014

(Unaudited)

50.

Adjusted Operating Income

The operating profit or loss in the Company’s consolidated statements of comprehensive income prepared in accordance with K-IFRS included in this report differs from that in its consolidated statements of comprehensive income prepared in accordance with IFRS as issued by IASB. The table below sets forth a reconciliation of our results from operating activities as presented in our consolidated statements of comprehensive income prepared in accordance with K-IFRS for each of the three-month period ended March 31, 2014 and 2013 to the operating profit or loss as presented in our consolidated statements of comprehensive income prepared in accordance with IFRS as issued by IASB for each of the corresponding years.


In millions of won	2014			2013
Operating income on the statement of comprehensive income	￦	1,227,077			657,769
Add
Other income
Reversal of other provisions		2,060			152
Gains on assets contributed		20			34
Gains on liabilities exempted		782			—
Compensation and reparations revenue		10,916			23,372
Electricity infrastructure development fund		1,958			10,464
Revenue from research contracts		375			994
Rental income		48,481			47,414
Others		6,131			5,629
Other profit
Gains on disposal of property, plant and equipment		7,416			12,746
Gains on foreign currency translation		2,507			1,350
Gains on foreign currency transaction		10,914			11,135
Other profits		52,906			54,490
Deduct
Other expense
Accretion expenses of other provisions		(105	)		(35	)
Depreciation expenses on investment properties		(183	)		(226	)
Depreciation expenses on assets not in use		(1,663	)		(1,658	)
Other bad debt expense		(11,870	)		(5,800	)
Donations		(7,027	)		(7,323	)
Others		(2,211	)		(2,171	)
Other loss
Losses on disposal of property, plant and equipment		(2,944	)		(11,222	)
Impairment loss on property, plant and equipment		—			(1,161	)
Impairment loss on intangible assets		—			(2	)
Losses on foreign currency translation		(1,619	)		(5,465	)
Losses on foreign currency transaction		(13,676	)		(22,457	)
Other losses		(14,422	)		(8,410	)


Adjusted operating income	￦	1,315,823			759,619

167