Edgar Filing: KOREA ELECTRIC POWER CORP

Form 20-F/A

As filed with the Securities and Exchange Commission on April 24, 2017

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F/A

Amendment No. 1

(Mark One)

☐	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

☑	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2015

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

☐	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from to

Commission File Number: 001-13372

KOREA ELECTRIC POWER CORPORATION

(Exact name of registrant as specified in its charter)


N/A		The Republic of Korea
*(Translation of registrant’s name into English)*		*(Jurisdiction of incorporation or organization)*

55 Jeollyeok-ro, Naju-si, Jeollanam-do, 58217, Korea

(Address of principal executive offices)

Yoon Hye Cho, +82 61 345 4213, yoonhye.cho@kepco.co.kr, +82 61 345 4299

(Name, telephone, e-mail and/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:


Title of each class:		Name of each exchange on which registered:
Common stock, par value Won 5,000 per share		New York Stock Exchange*
American depositary shares, each representing one-half of share of common stock		New York Stock Exchange

*	Not for trading, but only in connection with the listing of American depositary shares on the New York Stock Exchange, pursuant to the requirements of the Securities and Exchange Commission.

Securities registered or to be registered pursuant to Section 12(g) of the Act:

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

One Hundred Year 7.95% Zero-to-Full Debentures, due April 1, 2096

6% Debentures due December 1, 2026

7% Debentures due February 1, 2027

6³/₄% Debentures due August 1, 2027

Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the last full fiscal year

covered by the annual report:

641,964,077 shares of common stock, par value of Won 5,000 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes ☐ No ☑

Note—Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days: Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files): Yes ☐ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☑ Accelerated filer ☐ Non-accelerated filer ☐ Emerging growth company ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☐ International Financial Reporting Standards as issued by the International Accounting Standards Board ☑ Other ☐

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow. Item 17 ☐ Item 18 ☐

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ☐ No ☐

EXPLANATORY NOTE

This Amendment No. 1 on Form 20-F/A (the “Amendment”) amends the Annual Report on Form 20-F for the year ended December 31, 2015 of Korea Electric Power Corporation (“KEPCO”, “we”, “our” or “us”), as originally filed with the U.S. Securities and Exchange Commission on April 29, 2016 (the “Original Annual Report”). We are filing this Amendment solely for the purpose of correcting a typographical error in the following reports of KPMG Samjong Accounting Corp. attached to our financial statements included in the Original Annual Report:

•

Report of Independent Registered Public Accounting Firm on Consolidated Financial Statements on page F-2 of the Original Annual Report; and

•

Report of Independent Registered Public Accounting Firm on Internal Control over Financial Reporting on page F-3 of the Original Annual Report,

to the effect that all references to “, for the years then ended” and “for the years then ended” in such reports shall be replaced with “for each of the years in the three-year period ended December 31, 2015”.

This Amendment does not reflect events occurring after the filing of the Original Annual Report and does not modify, update or restate the disclosure therein in any way other than to reflect the amendments described above. No other changes have been made in the Original Annual Report. The filing of this Amendment should not be understood to mean that any statements contained herein are true or complete as of any date subsequent to the date of filing of the Original Annual Report.

ITEM 18. FINANCIAL STATEMENTS

Reference is made to paragraph (a) of Item 19. “Exhibits” for a list of all financial statements filed as part of this annual report.

ITEM 19. EXHIBITS

(a) Financial Statements filed as part of this Annual Report

See Index to Financial Statements on page F-1 of this annual report.

(b) Exhibits filed as part of this Annual Report

See Index of Exhibits beginning on page E-1 of this annual report.

SIGNATURES

The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this Amendment No. 1 to its Annual Report on its behalf.


KOREA ELECTRIC POWER CORPORATION
By:		/s/ Cho, Hwan-Eik
Name:		Cho, Hwan-Eik
Title:		President and Chief Executive Officer
Date:		April 24, 2017

INDEX TO FINANCIAL STATEMENTS


	Page

Report of Independent Registered Public Accounting Firm KPMG Samjong Accounting Corp. on Consolidated Financial Statements (Korea Electric Power Corporation)		F-2

Report of Independent Registered Public Accounting Firm KPMG Samjong Accounting Corp. on Internal Control Over Financial Reporting (Korea Electric Power Corporation)		F-3

Report of Independent Registered Public Accounting Firm Ernst & Young Han Young (Korea East-West Power Co., Ltd.)		F-4

Consolidated Statements of Financial Position as of December 31, 2014 and 2015		F-5

Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2013, 2014 and 2015		F-7

Consolidated Statements of Changes in Equity for the Years Ended December 31, 2013, 2014 and 2015		F-9

Consolidated Statements of Cash Flows for the Years Ended December 31, 2013, 2014 and 2015		F-12

Notes to the Consolidated Financial Statements		F-15

F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC

ACCOUNTING FIRM ON CONSOLIDATED FINANCIAL STATEMENTS

To the Shareholders and Board of Directors of

Korea Electric Power Corporation:

We have audited the accompanying consolidated statements of financial position of Korea Electric Power Corporation and subsidiaries (the “Company”) as of December 31, 2014 and 2015, and the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended December 31, 2015. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit the financial statements of Korea East-West Power Co., Ltd., a consolidated subsidiary, whose financial statements comprise 5.90 percent of consolidated revenue (prior to inter-company eliminations) for the year ended December 31, 2013. Those financial statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for Korea East-West Power Co., Ltd., is based solely on the report of the other auditors.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the report of the other auditors provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Korea Electric Power Corporation and subsidiaries as of December 31, 2014 and 2015 and of their consolidated results of their operations and their cash flows for each of the years in the three-year period ended December 31, 2015, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company’s internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated April 27, 2016 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

/s/ KPMG Samjong Accounting Corp.

KPMG Samjong Accounting Corp.

Seoul, Korea

April 27, 2016

F-2

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ON

INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Shareholders and Board of Directors of

Korea Electric Power Corporation:

We have audited Korea Electric Power Corporation and subsidiaries’ (the “Company”) internal control over financial reporting as of December 31, 2015, based on criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. The Company’s management is responsible for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Annual Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the group’s assets that could have a material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2015, based on the criteria established in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated statements of financial position of Korea Electric Power Corporation and subsidiaries as of December 31, 2014 and 2015, and the related consolidated statements of comprehensive income, changes in equity and cash flows for each of the years in the three-year period ended December 31, 2015 and our report dated April 27, 2016 expressed an unqualified opinion on those consolidated financial statements.

/s/ KPMG Samjong Accounting Corp.

KPMG Samjong Accounting Corp.

Seoul, Korea

April 27, 2016

F-3

Report of Independent Registered Public Accounting Firm

The Board of Directors and Stockholder of

Korea East-West Power Co., Ltd.

We have audited the consolidated statement of financial position of Korea East-West Power Co., Ltd. and subsidiaries (the “Company”), a wholly owned subsidiary of Korea Electric Power Corporation, as of December 31, 2013, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year ended December 31, 2013. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Korea East-West Power Co., Ltd. and subsidiaries as of December 31, 2013 and their consolidated results of operations, and cash flows for the year ended December 31, 2013, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

/s/ Ernst & Young Han Young

April 30, 2014

Seoul, Republic of Korea

F-4

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Position

As of December 31, 2014 and 2015


	Note			2014		2015
				In millions of won
Assets
Current assets
Cash and cash equivalents		5,6,7,45	￦		1,796,300		3,783,065
Current financial assets, net		5,10,11,12,45			176,428		5,335,621
Trade and other receivables, net		5,8,14,20,45,46,47			7,697,862		7,473,548
Inventories, net		13			4,537,469		4,946,413
Income tax refund receivables					18,475		9,081
Current non-financial assets		15			502,511		397,950
Assets held-for-sale		42			2,090,810		79,647

Total current assets					16,819,855		22,025,325

Non-current assets
Non-current financial assets, net		5,6,9,10,11,12,45			2,040,921		2,495,554
Non-current trade and other receivables, net		5,8,14,45,46,47			1,724,357		1,798,419
Property, plant and equipment, net		18,27,49			135,812,499		141,361,351
Investment properties, net		19,27			317,264		269,910
Goodwill		16			2,582		2,582
Intangible assets other than goodwill, net		21,27,46			821,060		855,832
Investments in associates		4,17			4,341,830		4,405,668
Investments in joint ventures		4,17			1,166,894		1,287,862
Deferred tax assets		41			526,934		623,623
Non-current non-financial assets		15			134,093		131,233

Total non-current assets					146,888,434		153,232,034

Total Assets		4	￦		163,708,289		175,257,359

Liabilities
Current liabilities
Trade and other payables, net		5,22,24,45,47	￦		6,128,604		4,735,697
Current financial liabilities, net		5,11,23,45,47			7,162,372		7,857,198
Income tax payables		41			570,550		2,218,060
Current non-financial liabilities		20,28,29			6,464,356		6,320,711
Current provisions		26,45			1,274,186		1,579,176

Total current liabilities					21,600,068		22,710,842

Non-current liabilities
Non-current trade and other payables, net		5,22,24,45,47			3,806,735		3,718,435
Non-current financial liabilities, net		5,11,23,45,47			55,999,761		51,062,811
Non-current non-financial liabilities		28,29			6,946,410		7,092,252
Employee benefits liabilities, net		25,45			1,277,415		1,503,107
Deferred tax liabilities		41			5,723,880		8,362,683
Non-current provisions		26,45			13,529,010		12,864,754

Total non-current liabilities					87,283,211		84,604,042

Total Liabilities		4	￦		108,883,279		107,314,884

(Continued)

F-5

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Financial Position—Continued

As of December 31, 2014 and 2015


	Note			2014			2015
				In millions of won
Equity
Contributed capital		1,30,45
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			1,604,910
Voluntary reserves					22,999,359			23,720,167
Unappropriated retained earnings					10,699,378			22,862,164

					35,303,647			48,187,241

Other components of equity		34
Other capital surpluses					1,151,402			1,197,388
Accumulated other comprehensive loss					(202,269	)		(98,713	)
Other equity					13,294,973			13,294,973

					14,244,106			14,393,648

Equity attributable to owners of the Company					53,601,331			66,634,467

Non-controlling interests		16, 33			1,223,679			1,308,008

Total Equity			￦		54,825,010			67,942,475

Total Liabilities and Equity			￦		163,708,289			175,257,359

See accompanying notes to the consolidated financial statements.

F-6

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2013, 2014 and 2015


	Note			2013			2014			2015
				In millions of won, except per share information
Sales		4,35,45,47
Sales of goods			￦		51,132,803			53,706,828			54,367,036
Sales of construction services		20			2,253,083			2,965,185			3,761,204
Sales of other services					326,619			451,013			453,487

					53,712,505			57,123,026			58,581,727

Cost of sales		13,25,43,47
Cost of sales of goods					(47,983,987	)		(46,509,555	)		(41,348,917	)
Cost of sales of construction services					(2,159,023	)		(2,752,610	)		(3,563,120	)
Cost of sales of other services					(452,628	)		(500,787	)		(545,692	)

					(50,595,638	)		(49,762,952	)		(45,457,729	)

Gross profit					3,116,867			7,360,074			13,123,998

Selling and administrative expenses		25,36,43,47			(1,923,192	)		(1,924,366	)		(2,153,261	)
Other income		37			725,457			754,186			808,214
Other expenses		37			(99,811	)		(88,220	)		(108,848	)
Other gains, net		38			128,514			107,396			8,610,773

Operating profit		4			1,947,835			6,209,070			20,280,876
Finance income		5,11,39			629,542			885,290			1,182,988
Finance expenses		5,11,40			(2,931,622	)		(3,140,038	)		(3,015,457	)
Equity method income (loss) of associates and joint ventures		4,17
Share in income of associates and joint ventures					170,399			319,506			280,794
Gain on disposal of investments in associates and joint ventures					266			47,072			4,731
Gain on disposal of subsidiaries					1,459			40,449			8,376
Share in loss of associates and joint ventures					(140,984	)		(78,493	)		(86,522	)
Loss on disposal of investments in associates and joint ventures					(45,178	)		(1,254	)		—
Impairment loss on investments in associates and joint ventures					(28,092	)		(52,279	)		—
Loss on disposal of subsidiaries					(113	)		(17	)		—

					(42,243	)		274,984			207,379

Profit (loss) before income tax					(396,488	)		4,229,306			18,655,786

Income tax (expense) benefit		41			570,794			(1,430,339	)		(5,239,413	)

Profit for the period			￦		174,306			2,798,967			13,416,373

(Continued)

F-7

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income—Continued

For the years ended December 31, 2013, 2014 and 2015


	Note			2013			2014			2015
				In millions of won, except per share information
Other comprehensive income (loss)		5,11,25,31,34
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit liability, net of tax		25,31	￦		132,457			(108,430	)		(87,861	)
Share in other comprehensive income (loss) of associates and joint ventures, net of tax		31			7,671			(1,899	)		(283	)
Items that are or may be reclassified subsequently to profit or loss:
Net change in the unrealized fair value of available-for-sale financial assets, net of tax		34			86,570			(97,251	)		9,648
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax		5,11,34			29,332			(84,793	)		4,409
Foreign currency translation of foreign operations, net of tax		34			(108,625	)		(70,576	)		18,535
Share in other comprehensive income of associates and joint ventures, net of tax		34			38,366			5,228			89,558

Other comprehensive income (loss), net of tax					185,771			(357,721	)		34,006

Total comprehensive income for the period			￦		360,077			2,441,246			13,450,379

Profit or loss attributable to:
Owners of the Company		44	￦		60,011			2,686,873			13,289,127
Non-controlling interests					114,295			112,094			127,246

			￦		174,306			2,798,967			13,416,373

Total comprehensive income attributable to:
Owners of the Company			￦		245,384			2,335,827			13,308,132
Non-controlling interests					114,693			105,419			142,247

			￦		360,077			2,441,246			13,450,379

Earnings per share		44
Basic and diluted earnings per share			￦		96			4,290			20,701

See accompanying notes to the consolidated financial statements.

F-8

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2013, 2014 and 2015


		Equity attributable to owners of the Company										Non- controlling Interests
		Contributed capital		Retained earnings		Other components of equity			Subtotal			Non- controlling Interests			Total equity
		In millions of won
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			—		60,011		—			60,011			114,295			174,306
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit liability, net of tax			—		134,121		—			134,121			(1,664	)		132,457
Share in other comprehensive income of associates and joint ventures, net of tax			—		7,671		—			7,671			—			7,671
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			—		—		86,543			86,543			27			86,570
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—		—		18,907			18,907			10,425			29,332
Foreign currency translation of foreign operations, net of tax			—		—		(100,572	)		(100,572	)		(8,053	)		(108,625	)
Share in other comprehensive income (loss) of associates and joint ventures, net of tax			—		—		38,703			38,703			(337	)		38,366
Transactions with owners of the Company, recognized directly in equity
Dividends paid			—		—		—			—			(41,812	)		(41,812	)
Issuance of share capital by subsidiaries			—		—		(173	)		(173	)		31,229			31,056
Equity transaction in consolidated scope—other than issuance of share capital			—		—		135,914			135,914			43,128			179,042
Changes in consolidation scope			—		—		(10,224	)		(10,224	)		(115,991	)		(126,215	)
Dividends paid (hybrid securities)			—		—		—			—			(16,455	)		(16,455	)
Others			—		—		—			—			841			841

Balance at December 31, 2013	￦		4,053,578		32,766,086		13,440,004			50,259,668			1,191,068			51,450,736

(Continued)

F-9

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity—Continued

For the years ended December 31, 2013, 2014 and 2015


		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
		In millions of won
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			—		2,686,873			—			2,686,873			112,094			2,798,967
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit liability, net of tax			—		(91,340	)		—			(91,340	)		(17,090	)		(108,430	)
Share in other comprehensive loss of associates and joint ventures, net of tax			—		(1,899	)		—			(1,899	)		—			(1,899	)
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			—		—			(97,263	)		(97,263	)		12			(97,251	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—		—			(80,218	)		(80,218	)		(4,575	)		(84,793	)
Foreign currency translation of foreign operations, net of tax			—		—			(84,962	)		(84,962	)		14,386			(70,576	)
Share in other comprehensive income of associates and joint ventures, net of tax			—		—			4,636			4,636			592			5,228
Transactions with owners of the Company, recognized directly in equity
Dividends paid			—		(56,073	)		—			(56,073	)		(130,969	)		(187,042	)
Issuance of share capital by subsidiaries			—		—			(1,235	)		(1,235	)		7,453			6,218
Equity transaction in consolidated scope—other than issuance of share capital			—		—			237,159			237,159			72,452			309,611
Disposal of treasury stocks			—		—			825,985			825,985			—			825,985
Changes in consolidation scope			—		—			—			—			(5,281	)		(5,281	)
Dividends paid (hybrid securities)			—		—			—			—			(16,463	)		(16,463	)

Balance at December 31, 2014	￦		4,053,578		35,303,647			14,244,106			53,601,331			1,223,679			54,825,010

(Continued)

F-10

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Changes in Equity—Continued

For the years ended December 31, 2013, 2014 and 2015


		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
		In millions of won
Balance at January 1, 2015	￦		4,053,578		35,303,647			14,244,106			53,601,331			1,223,679			54,825,010

Total comprehensive income for the period
Profit for the period			—		13,289,127			—			13,289,127			127,246			13,416,373
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit liability, net of tax			—		(84,271	)		—			(84,271	)		(3,590	)		(87,861	)
Share in other comprehensive loss of associates and joint ventures, net of tax			—		(280	)		—			(280	)		(3	)		(283	)
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			—		—			9,744			9,744			(96	)		9,648
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—		—			3,157			3,157			1,252			4,409
Foreign currency translation of foreign operations, net of tax			—		—			1,179			1,179			17,356			18,535
Share in other comprehensive income of associates and joint ventures, net of tax			—		—			89,476			89,476			82			89,558
Transactions with owners of the Company, recognized directly in equity
Dividends paid			—		(320,982	)		—			(320,982	)		(86,071	)		(407,053	)
Issuance of share capital by subsidiaries			—		—			2,536			2,536			12,329			14,865
Equity transaction in consolidated scope—other than issuance of share capital			—		—			44,166			44,166			9,046			53,212
Changes in consolidation scope			—		—			(716	)		(716	)		23,229			22,513
Dividends paid (hybrid securities)			—		—			—			—			(16,455	)		(16,455	)
Others, net			—		—			—			—			4			4

Balance at December 31, 2015	￦		4,053,578		48,187,241			14,393,648			66,634,467			1,308,008			67,942,475

See accompanying notes to the consolidated financial statements.

F-11

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows

For the years ended December 31, 2013, 2014 and 2015


		2013			2014			2015
		In millions of won
Cash flows from operating activities
Profit for the period	￦		174,306			2,798,967			13,416,373

Adjustments for:
Income tax expense (benefit)			(570,794	)		1,430,339			5,239,413
Depreciation			7,303,996			7,797,046			8,269,118
Amortization			88,379			76,413			72,266
Employee benefit expense			384,323			121,406			314,692
Bad debt expense			49,110			54,999			18,350
Interest expense			2,381,900			2,351,624			2,015,684
Loss on sale of financial assets			4,202			2,700			3,008
Loss on disposal of property, plant and equipment			58,852			50,152			1,933
Loss on abandonment of property, plant, and equipment			295,627			309,451			365,056
Impairment loss on property, plant and equipment			24,612			38,107			30,344
Impairment loss on intangible assets			267			42			22
Loss on disposal of intangible assets			1			18			16
Accretion expense to provisions, net			663,621			1,295,150			1,602,724
Loss (gain) on foreign currency translation, net			(195,571	)		351,660			617,224
Valuation and transaction loss (gain) on derivative instruments, net			233,484			(143,239	)		(708,120	)
Share in income of associates and joint ventures, net			(29,414	)		(241,013	)		(194,272	)
Gain on sale of financial assets			(107	)		(98,065	)		(4	)
Gain on disposal of property, plant and equipment			(59,345	)		(85,775	)		(8,637,508	)
Gain on disposal of intangible assets			(4	)		(4	)		(32	)
Gain on disposal of investments in associates and joint ventures			(266	)		(47,072	)		(4,731	)
Loss on disposal of investments in associates and joint ventures			45,178			1,254			—
Gain on disposal of investments in subsidiaries			(1,459	)		(40,449	)		(8,376	)
Loss on disposal of investments in subsidiaries			113			17			—
Impairment loss on investments in associates and joint ventures			28,091			52,279			—
Interest income			(182,161	)		(191,456	)		(241,585	)
Dividends income			(9,870	)		(14,193	)		(14,069	)
Impairment loss on available-for-sale securities			12,592			79,618			84,370
Others, net			(64,089	)		(20,303	)		(35,107	)

			10,461,268			13,130,706			8,790,416

(Continued)

F-12

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows—Continued

For the years ended December 31, 2013, 2014 and 2015


		2013			2014			2015
		In millions of won
Changes in:
Trade receivables	￦		(330,494	)		96,294			715,498
Non-trade receivables			20,853			9,063			(17,102	)
Accrued income			563			(207,155	)		17,051
Other receivables			(123	)		(906	)		(9,441	)
Other current assets			98,724			75,410			67,520
Inventories			(1,206,676	)		(1,146,221	)		(1,190,188	)
Other non-current assets			65,087			47,119			(31,465	)
Trade payables			(40,416	)		(257,614	)		(1,577,551	)
Non-trade payables			(195,191	)		(102,526	)		38,223
Accrued expenses			(240,901	)		(107,277	)		(410,744	)
Other payables			—			—			964
Other current liabilities			1,500,716			2,249,714			870,945
Other non-current liabilities			48,719			(317,437	)		377,617
Investments in associates and joint ventures			65,888			47,120			114,708
Provisions			(386,377	)		(675,569	)		(1,033,502	)
Payments of employee benefit obligations			(132,179	)		(860,179	)		(43,100	)
Plan assets			(101,720	)		(231,342	)		(214,449	)

			(833,527	)		(1,381,506	)		(2,325,016	)

Cash generated from operating activities
Dividends received			14,114			13,518			38,565
Interest paid			(2,460,247	)		(2,460,457	)		(2,176,040	)
Interest received			160,830			167,269			133,875
Income taxes paid			(632,837	)		(222,805	)		(935,068	)

Net cash from operating activities			6,883,907			12,045,692			16,943,105

(Continued)

F-13

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Statements of Cash Flows—Continued

For the years ended December 31, 2013, 2014 and 2015


		2013			2014			2015
		In millions of won
Cash flows from investing activities
Proceeds from disposals of associates and joint ventures	￦		44			232,228			22,058
Acquisition of associates and joint ventures			(321,476	)		(248,223	)		(116,114	)
Proceeds from disposals of property, plant and equipment			119,464			111,260			9,843,796
Acquisition of property, plant and equipment			(14,259,050	)		(14,547,499	)		(14,049,887	)
Proceeds from disposals of intangible assets			39			1,819			467
Acquisition of intangible assets			(69,007	)		(68,624	)		(87,946	)
Proceeds from disposals of financial assets			610,847			1,060,117			242,856
Acquisition of financial assets			(545,992	)		(975,104	)		(5,326,151	)
Increase in loans			(196,607	)		(135,001	)		(153,570	)
Collection of loans			143,935			101,037			111,714
Increase in deposits			(55,594	)		(335,518	)		(352,669	)
Decrease in deposits			51,882			227,354			185,154
Receipt of government grants			92,000			108,681			52,696
Usage of government grants			(31,027	)		(36,464	)		(13,372	)
Net cash inflow (outflow) from business acquisitions			(41,809	)		44,319			(968	)
Other cash outflow from investing activities, net			(921	)		(715	)		(132,034	)

Net cash used in investing activities			(14,503,272	)		(14,460,333	)		(9,773,970	)

Cash flows from financing activities
Proceeds (Repayment) from short-term borrowings, net			(107,748	)		59,421			(65,355	)
Proceeds from long-term borrowings and debt securities			15,233,428			9,566,625			4,178,454
Repayment of long-term borrowings and debt securities			(7,315,752	)		(8,119,325	)		(8,960,706	)
Payment of finance lease liabilities			(125,921	)		(115,532	)		(110,040	)
Settlement of derivative instruments, net			38,844			(444,243	)		73,348
Disposal of treasury stocks			—			852,962			—
Proceeds on disposal of partial interest in a subsidiary that does not involve loss of control			236,244			376,477			67,914
Change in non-controlling interest			47,019			12,595			36,105
Dividends paid (hybrid bond)			(16,455	)		(16,463	)		(16,455	)
Dividends paid			(41,812	)		(186,985	)		(409,884	)
Other cash outflow from financing activities, net			(14,715	)		(356	)		—

Net cash from (used in) financing activities			7,933,132			1,985,176			(5,206,619	)

Net increase (decrease) in cash and cash equivalents before effect of exchange rate fluctuations			313,767			(429,465	)		1,962,516
Effect of exchange rate fluctuations on cash held			(36,403	)		(6,548	)		24,249

Net increase (decrease) in cash and cash equivalents			277,364			(436,013	)		1,986,765
Cash and cash equivalents at January 1			1,954,949			2,232,313			1,796,300

Cash and cash equivalents at December 31	￦		2,232,313			1,796,300			3,783,065

See accompanying notes to the consolidated financial statements.

F-14

KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Financial Statements

December 31, 2015

1.	Reporting Entity (Description of the controlling company)

Korea Electric Power Corporation (“KEPCO”) was incorporated on January 1, 1982 in accordance with the Korea Electric Power Corporation Act (the “KEPCO Act”) to engage in the generation, transmission and distribution of electricity and development of electric power resources in the Republic of Korea. KEPCO also provides power plant construction services. KEPCO’s stock was listed on the Korea Stock Exchange on August 10, 1989 and the Company listed its Depository Receipts (DR) on the New York Stock Exchange on October 27, 1994.

As of December 31, 2015, KEPCO’s share capital amounts to ￦3,209,820 million and KEPCO’s shareholders are as follows:


	Number of shares		Percentage of ownership
Government of the Republic of Korea		135,917,118		21.17	%
Korea Development Bank		192,170,340		29.94	%
Foreign investors		184,891,161		28.80	%
Other		128,985,458		20.09	%

		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. KEPCO moved the headquarters to Naju, Jeollanam-do, in November 2014 as part of the government’s plan to relocate state-run companies for balanced national development.

2.	Basis of Preparation

The consolidated financial statements of Korea Electric Power Corporation and subsidiaries (the “Company”) were authorized for issuance by the Board of Directors on February 19, 2016, which were submitted for approval at the shareholders’ meeting held on March 22, 2016.

(1)

Statement of compliance

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standard Board (“IASB”).

(2)

Basis of measurement

The consolidated 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 is KEPCO’s functional and presentation currency.

F-15

(4)

Use of estimates and judgments

The preparation of the consolidated financial statements in conformity with 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)

Unbilled revenue

Energy delivered but not metered nor 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 December 31, 2014 and 2015 is ￦1,793,589 million and ￦1,599,592 million, respectively.

Information about critical judgments in applying accounting policies that have the most significant effect on the amounts recognized in the consolidated financial statements is included in the following notes:

•

Note 17— Investments in Associates and Joint Ventures

•

Note 18—Property, plant and equipment

•

Note 45—Risk Management

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment within the next financial year is included in the following notes:

•

Note 41—Income taxes

•

Note 25—Employment benefits

(5)

Changes in accounting policies

(i)

IAS 19, ‘Employee Benefits’—Employee contributions

The Company has adopted amendments to IAS 19, ‘Employee Benefits’—Employee contributions, since July 1, 2014. Amendments to IAS 19 introduced a practical expedient to accounting for defined benefit plan, when employees or third parties pay contributions if certain criteria are met. According to the amendments, the entity is permitted to recognize those contributions as a reduction of the service cost in the period in which the related service is rendered, instead of forecast future contributions from employees or third parties and attribute them to periods or service as negative benefits.

Upon adoption of the amendments, there is no significant impact on the Company’s consolidated financial statements.

F-16

(6)

New standards and amendments not yet adopted

The following new standards, interpretations and amendments to existing standards are effective for annual periods beginning after January 1, 2015, and the Company has not early adopted them yet. The management is in the process of evaluating the potential impact on the consolidated financial statements upon the adoption of the new standards, interpretations and the amendments.

(i)

IFRS 9, ‘Financial Instruments’

IFRS 9, published in July 2014, replaces the existing guidance in IAS 39, ‘Financial Instruments: recognition and Measurement’. IFRS 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and the new general hedge accounting requirements. It also carries forward the guidance on recognition and derecognition of financial instruments from IAS 39. IFRS 9 is effective for annual reporting periods beginning on or after January 1, 2018, with early adoption permitted.

(ii)

IFRS 15, ‘Revenue from Contracts with Customers’

IFRS 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognized. It replaces existing revenue recognition guidance, including IAS 18 ‘Revenue’, IAS 11 ‘Construction Contracts’ and IFRIC 13 ‘Customer Loyalty Programmes’. IFRS 15 is effective for annual reporting periods beginning on or after January 1, 2017, with early adoption permitted.

(iii)

IAS 16, ‘Property, Plant and Equipment’

Amendments to IAS 16, ‘Property, Plant and Equipment’ specify that the use of revenue-based methods to calculate the depreciation of an asset is not appropriate. These amendments are effective for annual periods beginning on or after January 1, 2016.

(iv)

IAS 38, ‘Intangible Assets’

Amendments to IAS 38, ‘Intangible Assets’ introduce a rebuttable presumption that the use of revenue-based amortization methods for intangible assets is inappropriate. This presumption can be rebutted only when revenue and the consumption of the economic benefits of the intangible asset are highly correlated, or when the intangible asset is expressed as a measure of revenue. These amendments are effective for annual periods beginning on or after January 1, 2016.

(v)

IFRS 11, ‘Joint Arrangement’

Amendments to IFRS 11, ‘Joint Arrangement’ require an investor to apply the principles of business combination accounting when it acquires an interest in a joint operation that constitutes a business as defined in IFRS 3, ‘Business Combinations’. These amendments are effective for annual periods beginning on or after January 1, 2016.

(vi)

IFRS 16, ‘Leases’

IFRS 16, published in January 2016, replaces existing guidance in IAS 17, ‘Leases’. It eliminates the current dual accounting model for lessees, which distinguishes between on-balance sheet finance leases and off-balance sheet operating leases. Instead, there is a single, on-balance sheet accounting model that is similar to current finance lease accounting. Lessor accounting remains similar to current practice (i.e. lessors continue to classify leases as finance and operating leases). IFRS 16 is effective for annual reporting periods beginning on or after January 1, 2019, with early adoption permitted if IFRS 15 ‘Revenue from Contracts with Customers’ has also been applied.

(vii)

IAS 12, ‘Income Taxes’—Recognition of Deferred Tax Assets for Unrealized Losses

Amendments to IAS 12, published in January 2016, clarify how to account for deferred tax assets related to debt instruments measured at fair value. These amendments clarify that the existence of a deductible temporary difference depends solely on a comparison of the carrying amount of an asset and its tax base at the end of the reporting period, and is not affected by possible future changes in the carrying amount or expected manner of recovery of the asset. Therefore, assuming that the tax base remains at the original cost of the debt instrument, there is a temporary difference. These amendments are effective for annual periods beginning on or after January 1, 2017, with early adoption permitted.

F-17

3.	Significant Accounting Policies

Except as described in note 2.(5), the Company applied the following significant accounting policies consistently for all periods presented.

(1)

Basis of consolidation

The consolidated financial statements are the financial statements of a group in which the assets, liabilities, equity, income, expenses and cash flows of the parent and its subsidiaries are presented as those of a single economic entity. Subsidiaries are controlled by the Company. The Company controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Income and expense of a subsidiary acquired or disposed of during the year are included in the consolidated statement of comprehensive income 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 within the Company 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 loses 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 IAS 39, ‘Financial Instruments’: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity.

F-18

(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 IAS 12, ‘ Income Taxes’ and IAS 19, ‘ Employee Benefits’ respectively;

•

Assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5, ‘Non-current Assets Held for Sale’ are measured in accordance with that standard.

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 IFRSs. 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 IAS 39, ‘Financial Instruments: Recognition and Measurement’, or with IAS 37, ‘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.

F-19

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.

The assets and liabilities acquired under business combinations under common control are recognized at the carrying amounts recognized previously in the consolidated financial statements of the ultimate parent. The difference between consideration transferred and carrying amounts of net assets acquired is recognized as part of share premium.

(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 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 IFRS 5 ‘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 IAS 39 ‘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 IAS 39, ‘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 IAS 36 ‘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 IAS 36 to the extent that the recoverable amount of the investment subsequently increases.

F-20

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 IAS 39. 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.

(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 ventures) 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 IAS 28, ‘Investment in Associates and Joint Ventures’ (see note 3 (3)), except when the Company is applicable to the IFRS 5, ‘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.

F-21

(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.

(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, which 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 other 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.

F-22

(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 IFRIC 18, ‘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.

(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.

F-23

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.

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.

(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;

•

Exchange differences on transactions entered into in order to hedge certain foreign currency risks; and (see note 3 (23))

•

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.

F-24

(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.

(13)

Employee benefits

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).

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 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. However, if there is not a deep market, market yields on government bonds are used.

Net defined benefit liability’s measurement is composed of actuarial gains and losses, return on plan assets excluding net interest on net defined benefit liability, and any change in the effect of the asset ceiling, excluding net interest, which are immediately recognized in other comprehensive income. The actuarial gains or losses recognized in other comprehensive income which will not be reclassified into net profit or loss for later periods are immediately recognized in retained earnings. Past service cost will be recognized as expenses upon the earlier of the date of change or reduction to the plan, or the date of recognizing termination benefits.

The retirement benefit obligation recognized in the 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.

F-25

(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.

(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.

F-26

(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.

(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.

F-27

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.

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.

F-28

(18)

Greenhouse gas emissions rights (allowance) and obligations

With Enforcement of Allocation and Trading of Greenhouse Gas Emissions Allowances, the Company applies the following accounting policies for emissions rights and obligations.

(i)

Emissions rights

Greenhouse gas emissions rights consist of the allowances received free of charge from the government and the ones purchased. The cost of the emissions rights includes expenditures arising directly from the acquisition and any other costs incurred during normal course of the acquisition.

Emissions rights are held by the Company to fulfill the legal obligation and recorded as intangible assets. To the extent that the portion to be submitted to the government within one year from the end of reporting period, the emissions rights are classified as current assets. Emissions rights recorded as intangible assets are initially measured at cost and substantially remeasured at cost less accumulated impairment losses.

Greenhouse gas emission rights are derecognized on submission to the government or when no future economic benefits are expected from its use or disposal.

(ii)

Emissions obligations

Emissions obligations are the Company’s present legal obligation to submit the emissions allowances to the government and recognized when an outflow of resources is probable and a reliable estimate can be made of the amount of the obligation. Emissions obligations are measured as the sum of the carrying amount of the allocated rights that will be submitted to the government and the best estimate of expenditure required to settle the obligation at the end of the reporting period for any excess emission.

(19)

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.

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.

(20)

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.

F-29

(21)

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 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.

(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.

F-30

(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)

Provision for Polychlorinated Biphenyls (“PCBs”)

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.

(vi)

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.

(vii)

Renewable portfolio standard (“RPS”) provisions

Renewable portfolio standard (“RPS”) program is required to generate a specified percentage of total electricity to be generated in the form of renewable energy and provisions are recognized for the governmental regulations to require the production of energies from renewable energy sources such as solar, wind and biomass.

(22)

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.

(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.

F-31

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 IAS No. 39, 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.

(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.

F-32

(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.

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.

F-33

(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.

(23)

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.

F-34

(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 IAS 39, ‘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’.

(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 IAS 37, ‘Provisions, Contingent Liabilities and Contingent Assets; or (b) the amount initially recognized less, cumulative amortization recognized in accordance with IAS 18, ‘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.

F-35

(24)

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.

(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.

F-36

(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.

F-37

4.	Segment, Geographic and Other Information

(1)

Segment determination and explanation of the measurements

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

F-38

(2)

Financial information of the segments for the years ended December 31, 2013, 2014 and 2015, respectively, are as follows:



		2013
Segment		Total segment revenue			Intersegment revenue			Revenue from external customers		Depreciation and amortization			Interest income			Interest expense			Income(loss) of associates and joint ventures			Employee benefit expense			Loss on abandonment of property, plant, and equipment		Accretion expense to provisions, net		Operating profit (loss)
		In millions of won
Transmission and distribution	￦		53,367,116			1,069,699			52,297,417		2,660,444			27,187			1,525,166			(2,521	)		206,279			273,785		253,153		549,929
Electric power generation (Nuclear)			6,378,280			6,369,715			8,565		2,724,629			20,994			557,621			(926	)		51,394			—		250,814		325,274
Electric power generation (Non-nuclear)			28,067,093			27,687,112			379,981		1,952,680			50,193			262,076			(40,976	)		73,710			21,842		154,285		735,546
Plant maintenance & engineering service			2,483,670			1,774,577			709,093		72,489			23,473			183			2,180			76,395			—		5,016		248,661
Others			365,968			48,519			317,449		14,086			75,653			50,266			—			1,498			—		32		110,841
Consolidation adjustments			(36,949,622	)		(36,949,622	)		—		(31,953	)		(15,339	)		(13,412	)		—			(24,953	)		—		321		(22,416	)

	￦		53,712,505			—			53,712,505		7,392,375			182,161			2,381,900			(42,243	)		384,323			295,627		663,621		1,947,835

Finance income																														629,542

Finance expense																														(2,931,622	)

Equity method income of associates joint ventures																														(42,243	)

Loss before income tax																													￦	(396,488	)

F-39


		2014
Segment		Total segment revenue			Intersegment revenue			Revenue from external customers		Depreciation and amortization			Interest income			Interest expense			Income of associates and joint ventures		Employee benefit expense			Loss on abandonment of property, plant, and equipment		Accretion expense to provisions, net			Operating profit (loss)
		In millions of won
Transmission and distribution	￦		56,982,583			1,445,914			55,536,669		2,717,040			28,798			1,394,131			231,502		8,408			309,442		290,444			2,050,726
Electric power generation (Nuclear)			9,379,564			9,364,451			15,113		2,905,115			21,995			582,353			1,227		42,667			—		719,794			2,544,378
Electric power generation (Non-nuclear)			25,067,653			24,680,221			387,432		2,189,202			30,528			308,731			40,260		38,417			—		147,892			1,385,687
Plant maintenance & engineering service			2,620,713			1,887,954			732,759		70,374			16,033			223			1,995		39,983			—		139,965			335,076
Others			537,578			86,525			451,053		26,983			109,427			79,175			—		1,026			9		33			95,803
Consolidation adjustments			(37,465,065	)		(37,465,065	)		—		(35,255	)		(15,325	)		(12,989	)		—		(9,095	)		—		(2,978	)		(202,600	)

	￦		57,123,026			—			57,123,026		7,873,459			191,456			2,351,624			274,984		121,406			309,451		1,295,150			6,209,070

Finance income																														885,290

Finance expense																														(3,140,038	)

Equity method income of associates joint ventures																														274,984

Loss before income tax																													￦	4,229,306

F-40


		2015
Segment		Total segment revenue			Intersegment revenue			Revenue from external customers		Depreciation and amortization			Interest income			Interest expense			Income(loss) of associates and joint ventures			Employee benefit expense			Loss on abandonment of property, plant, and equipment		Accretion expense to provisions, net		Operating profit (loss)
		In millions of won
Transmission and distribution	￦		58,164,394			1,230,975			56,933,419		2,859,037			132,809			1,092,594			220,406			135,261			359,521		872,096		13,319,310
Electric power generation (Nuclear)			10,642,352			10,596,189			46,163		3,070,828			24,612			532,490			(595	)		54,572			—		401,839		3,806,617
Electric power generation (Non-nuclear)			21,469,345			20,906,081			563,264		2,337,353			22,171			319,647			(10,686	)		74,007			5,305		148,053		2,704,260
Plant maintenance & engineering service			2,533,887			2,016,699			517,188		85,662			12,293			542			(1,746	)		74,542			—		174,912		332,531
Others			672,250			150,557			521,693		27,491			108,104			127,684			—			343			230		34		80,165
Consolidation adjustments			(34,900,501	)		(34,900,501	)		—		(38,987	)		(58,404	)		(57,273	)		—			(24,033	)		—		5,790		37,993

	￦		58,581,727			—			58,581,727		8,341,384			241,585			2,015,684			207,379			314,692			365,056		1,602,724		20,280,876

Finance income																														1,182,988

Finance expense																														(3,015,457	)

Equity method income of associates joint ventures																														207,379

Loss before income tax																													￦	18,655,786

F-41

(3)

Information related to segment assets and segment liabilities as of and for the years ended December 31, 2014 and 2015 are as follows:


		2014
Segment		Segment assets			Investments in associates and joint ventures		Acquisition of non-current assets			Segment liabilities
		In millions of won
Transmission and distribution	￦		99,719,106			4,173,139		4,979,968			56,338,038
Electric power generation (Nuclear)			49,237,136			1,929		2,211,783			27,588,281
Electric power generation (Non-nuclear)			41,413,556			1,274,761		7,071,376			24,185,126
Plant maintenance & engineering service			2,659,506			58,895		377,055			990,496
Others			5,681,070			—		120,667			2,098,115

Segment totals			198,710,374			5,508,724		14,760,849			111,200,056

Consolidation adjustments:
Elimination of inter-segment amounts			(35,819,662	)		—		(144,726	)		(5,229,275	)
Equity method adjustment			842,865			—		—			—
Deferred taxes			—			—		—			2,907,841
Others			(25,288	)		—		—			4,657

			(35,002,085	)		—		(144,726	)		(2,316,777	)

Consolidated totals	￦		163,708,289			5,508,724		14,616,123			108,883,279


		2015
Segment		Segment assets			Investments in associates and joint ventures		Acquisition of non- current assets		Segment liabilities
		In millions of won
Transmission and distribution	￦		106,306,250			4,338,888		5,885,919		53,125,589
Electric power generation (Nuclear)			51,043,890			16,385		2,647,304		27,386,113
Electric power generation (Non-nuclear)			44,453,545			1,283,432		5,063,195		25,587,071
Plant maintenance & engineering service			2,990,862			54,825		249,627		1,172,351
Others			5,962,546			—		144,846		2,312,658

Segment totals			210,757,093			5,693,530		13,990,891		109,583,782

Consolidation adjustments:
Elimination of inter-segment amounts			(36,505,833	)		—		146,942		1,339,753
Equity method adjustment			1,050,574			—		—		—
Deferred taxes			—			—		—		(3,603,808	)
Others			(44,475	)		—		—		(4,843	)

			(35,499,734	)		—		146,942		(2,268,898	)

Consolidated totals	￦		175,257,359			5,693,530		14,137,833		107,314,884

F-42

(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:


Geographical unit		Revenue from external customers						*Non-current assets (2)**
Geographical unit		2013		2014		2015		2013		2014		2015
		In millions of won
Domestic	￦		51,314,639		53,893,877		54,351,076		131,876,535		136,053,940		143,788,043
Overseas(*1)			2,397,866		3,229,149		4,230,651		4,474,900		6,542,282		4,526,395

	￦		53,712,505		57,123,026		58,581,727		136,351,435		142,596,222		148,314,438

(*1)

Middle East and other Asian countries 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 years ended December 31, 2013, 2014 and 2015.

F-43

5.	Classification of Financial Instruments

(1)

Classification of financial assets as of December 31, 2014 and 2015 are as follows:


		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
		In millions of won
Current assets
Cash and cash equivalents	￦		—		1,796,300		—		—		—		1,796,300
Current financial assets
Held-to-maturity investments			—		—		—		265		—		265
Derivative assets			6,812		—		—		—		1,409		8,221
Other financial assets			—		167,942		—		—		—		167,942
Trade and other receivables			—		7,697,862		—		—		—		7,697,862

			6,812		9,662,104		—		265		1,409		9,670,590

Non-current assets
Non-current financial assets
Available-for-sale financial assets			—		—		715,151		—		—		715,151
Held-to-maturity investments			—		—		—		3,349		—		3,349
Derivative assets			59,037		—		—		—		102,867		161,904
Other financial assets			—		1,160,517		—		—		—		1,160,517
Trade and other receivables			—		1,724,357		—		—		—		1,724,357

			59,037		2,884,874		715,151		3,349		102,867		3,765,278

	￦		65,849		12,546,978		715,151		3,614		104,276		13,435,868


		2015
		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
		In millions of won
Current assets
Cash and cash equivalents	￦		—		3,783,065		—		—		—		3,783,065
Current financial assets
Held-to-maturity investments			—		—		—		381		—		381
Derivative assets			1,498		—		—		—		95,759		97,257
Other financial assets			—		5,237,983		—		—		—		5,237,983
Trade and other receivables			—		7,473,548		—		—		—		7,473,548

			1,498		16,494,596		—		381		95,759		16,592,234

Non-current assets
Non-current financial assets
Available-for-sale financial assets			—		—		584,479		—		—		584,479
Held-to-maturity investments			—		—		—		3,242		—		3,242
Derivative assets			253,510		—		—		—		266,383		519,893
Other financial assets			—		1,387,940		—		—		—		1,387,940
Trade and other receivables			—		1,798,419		—		—		—		1,798,419

			253,510		3,186,359		584,479		3,242		266,383		4,293,973

	￦		255,008		19,680,955		584,479		3,623		362,142		20,886,207

F-44

(2)

Classification of financial liabilities as of December 31, 2014 and 2015 are as follows:


		2014
		Financial liabilities at fair value through profit or loss		Financial liabilities recognized at amortized cost		Derivative liabilities (using hedge accounting)		Total
		In millions of won
Current liabilities
Borrowings	￦		—		1,113,354		—		1,113,354
Debt securities			—		5,991,398		—		5,991,398
Derivative liabilities			56,296		—		1,324		57,620
Trade and other payables			—		6,128,604		—		6,128,604

			56,296		13,233,356		1,324		13,290,976

Non-current liabilities
Borrowings			—		3,475,206		—		3,475,206
Debt securities			—		52,244,369		—		52,244,369
Derivative liabilities			108,635		—		171,551		280,186
Trade and other payables			—		3,806,735		—		3,806,735

			108,635		59,526,310		171,551		59,806,496

	￦		164,931		72,759,666		172,875		73,097,472


		2015
		Financial liabilities at fair value through profit or loss		Financial liabilities recognized at amortized cost		Derivative liabilities (using hedge accounting)		Total
		In millions of won
Current liabilities
Borrowings	￦		—		1,144,027		—		1,144,027
Debt securities			—		6,702,926		—		6,702,926
Derivative liabilities			9,487		—		758		10,245
Trade and other payables			—		4,735,697		—		4,735,697

			9,487		12,582,650		758		12,592,895

Non-current liabilities
Borrowings			—		1,932,259		—		1,932,259
Debt securities			—		48,974,287		—		48,974,287
Derivative liabilities			39,524		—		116,741		156,265
Trade and other payables			—		3,718,435		—		3,718,435

			39,524		54,624,981		116,741		54,781,246

	￦		49,011		67,207,631		117,499		67,374,141

F-45

(3)

Classification of comprehensive income (loss) from financial instruments for the years ended December 31, 2013,

2014 and 2015 are as follows:


			2013			2014			2015
			In millions of won
Cash and cash equivalents	Interest income	￦		60,301			56,384			54,687
Available-for-sale financial assets	Dividends income			9,870			14,193			14,069
	Impairment loss on available-for-sale financial assets			(12,592	)		(79,618	)		(84,370	)
	Gain (loss) on disposal of financial assets			(4,202	)		95,365			(3,004	)
	Interest income			1,150			382			29
Held-to-maturity investments	Interest income			64			89			99
Loans and receivables	Interest income			42,418			29,507			28,586
Trade and other receivables	Interest income			60,237			99,680			100,771
Other financial assets	Interest income			1,082			—			—
Short-term financial instruments	Interest income			16,896			5,199			46,921
Long-term financial instruments	Interest income			13			215			10,492
Financial assets at fair value through profit or loss	Gain (loss) on valuation of derivatives			335			59,164			220,285
	Gain (loss) on transaction of derivatives			26,889			(24,746	)		8,605
	Gain on disposal of financial assets			196			—			—
Derivative assets (using hedge accounting)	Gain (loss) on valuation of derivatives			(13,945	)		88,809			244,020
	Loss on valuation of derivatives (equity, before tax)(*)			(27,281	)		(60,284	)		(12,572	)
	Gain on transaction of derivatives			29,662			818			2,818
Financial liabilities carried at amortized cost	Interest expense of borrowings and debt securities			(1,715,373	)		(1,664,682	)		(1,392,477	)
	Loss on retirement of financial liabilities			—			(199	)		(33	)
	Interest expense of trade and other payables			(102,388	)		(98,407	)		(84,527	)
	Interest expense of others			(564,139	)		(588,535	)		(538,680	)
	Gain (loss) on foreign currency transactions and translations			133,638			(271,953	)		(708,178	)
Financial liabilities at fair value through profit or loss	Gain (loss) on valuation of derivatives			(167,485	)		10,494			35,312
	Loss on transaction of derivatives			(46,639	)		(38,909	)		107,454
Derivative liabilities (using hedge accounting)	Gain (loss) on valuation of derivatives			(65,755	)		51,788			93,914
	Gain (loss) on valuation of derivatives (equity, before tax)(*)			50,197			(76,013	)		9,728
	Gain (loss) on transaction of derivatives			3,454			(4,180	)		(4,288	)

(*)	Items are included in other comprehensive income or loss. 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 consolidated statements of comprehensive income or loss.

F-46

6.	Restricted Deposits

Restricted deposits as of December 31, 2014 and 2015 are as follows:


			2014		2015
			In millions of won
Cash and cash equivalents	Escrow accounts	￦		100		4,828
	Deposits for government project			10,156		5,839
	Collateral provided for borrowings			12,926		6,839
	Collateral provided for lawsuit			367		641
	Deposits for transmission regional support program			—		204
	Pledge			—		740
Short-term financial instruments	Restriction on withdrawal related to ‘win-win growth program’ for small and medium enterprises			5,000		18,000
Long-term financial instruments	Guarantee deposits for checking account			3		2
	Guarantee deposits for banking accounts at oversea branches			312		333
	Pledge			740		—
	Decommissioning costs of nuclear power plants			603,306		652,700
	Collateral provided for borrowings			—		20
	Funds for developing small and medium enterprises(*1)			—		100,000

		￦		632,910		790,146

(*1)

Deposits for small and medium enterprise at IBK for construction of Bitgaram Energy Valley and support for the businesses as of December 31, 2015.

7.	Cash and Cash Equivalents

Cash and cash equivalents as of December 31, 2014 and 2015 are as follows:


		2014		2015
		In millions of won
Cash	￦		77		109
Cash equivalents			1,154,250		1,309,396
Short-term deposits classified as cash equivalents			340,119		374,575
Short-term investments classified as cash equivalents			301,854		2,098,985

	￦		1,796,300		3,783,065

8.	Trade and Other Receivables

(1)

Trade and other receivables as of December 31, 2014 and 2015 are as follows:


		2014
		Gross amount		Allowance for doubtful accounts			Present value discount			Book value
		In millions of won
Current assets
Trade receivables	￦		7,243,064		(80,644	)		(94	)		7,162,326
Other receivables			583,991		(46,245	)		(2,210	)		535,536

			7,827,055		(126,889	)		(2,304	)		7,697,862

Non-current assets
Trade receivables			412,222		—			(14	)		412,208
Other receivables			1,341,398		(21,687	)		(7,562	)		1,312,149

			1,753,620		(21,687	)		(7,576	)		1,724,357

	￦		9,580,675		(148,576	)		(9,880	)		9,422,219

F-47


		2015
		Gross amount		Allowance for doubtful accounts			Present value discount			Book value
		In millions of won
Current assets
Trade receivables	￦		6,862,762		(51,956	)		(14	)		6,810,792
Other receivables			718,717		(52,778	)		(3,183	)		662,756

			7,581,479		(104,734	)		(3,197	)		7,473,548

Non-current assets
Trade receivables			447,010		—			—			447,010
Other receivables			1,396,107		(38,968	)		(5,730	)		1,351,409

			1,843,117		(38,968	)		(5,730	)		1,798,419

	￦		9,424,596		(143,702	)		(8,927	)		9,271,967

(2)

Other receivables as of December 31, 2014 and 2015 are as follows:


		2014
		Gross amount		Allowance for doubtful accounts			Present value discount			Book value
		In millions of won
Current assets
Non-trade receivables	￦		257,260		(46,245	)		—			211,015
Accrued income			54,242		—			—			54,242
Deposits			196,537		—			(2,210	)		194,327
Finance lease receivables			8,275		—			—			8,275
Others			67,677		—			—			67,677

			583,991		(46,245	)		(2,210	)		535,536

Non-current assets
Non-trade receivables			117,604		(18,630	)		—			98,974
Accrued income			303		—			—			303
Deposits			267,397		—			(7,562	)		259,835
Finance lease receivables			877,479		—			—			877,479
Others			78,615		(3,057	)		—			75,558

			1,341,398		(21,687	)		(7,562	)		1,312,149

	￦		1,925,389		(67,932	)		(9,772	)		1,847,685


		2015
		Gross amount		Allowance for doubtful accounts			Present value discount			Book value
		In millions of won
Current assets
Non-trade receivables	￦		330,669		(52,778	)		—			277,891
Accrued income			88,256		—			—			88,256
Deposits			235,745		—			(3,183	)		232,562
Finance lease receivables			12,098		—			—			12,098
Others			51,949		—			—			51,949

			718,717		(52,778	)		(3,183	)		662,756

Non-current assets
Non-trade receivables			93,782		(31,829	)		—			61,953
Accrued income			582		—			—			582
Deposits			256,745		—			(5,730	)		251,015
Finance lease receivables			941,710		—			—			941,710
Others			103,288		(7,139	)		—			96,149

			1,396,107		(38,968	)		(5,730	)		1,351,409

	￦		2,114,824		(91,746	)		(8,913	)		2,014,165

F-48

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 related to electricity for the duration between the billing date and the payment due dates. But once trade receivables are overdue, the Company imposes a monthly interest rate of 2.0% 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.

(3)

Aging analysis of trade receivables as of December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Trade receivables: (not overdue, not impaired)	￦		7,516,233			7,198,403

Trade receivables: (overdue, not impaired)			1,061			891

Less than 60 days			1,061			891

Trade receivables: (impairment reviewed)			137,992			110,478

60 ~ 90 days			31,438			31,973
90 ~ 120 days			12,045			11,010
120 days ~ 1 year			42,736			35,097
Over 1 year			51,773			32,398

			7,655,286			7,309,772

Less allowance for doubtful accounts			(80,644	)		(51,956	)
Less present value discount			(108	)		(14	)

	￦		7,574,534			7,257,802

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 an allowance based on past experience of collection.

(4)

Aging analysis of other receivables as of December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Other receivables: (not overdue, not impaired)	￦		1,729,808			1,918,132

Other receivables: (overdue, not impaired)			58,778			20,249

Less than 60 days			58,778			20,249

Other receivables: (impairment reviewed)			136,803			176,443

60 ~ 90 days			1,132			2,409
90 ~ 120 days			2,242			10,097
120 days ~ 1 year			18,857			21,433
Over 1 year			114,572			142,504

			1,925,389			2,114,824

Less allowance for doubtful accounts			(67,932	)		(91,746	)
Less present value discount			(9,772	)		(8,913	)

	￦		1,847,685			2,014,165

F-49

(5)

Changes in the allowance for doubtful accounts for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013						2014						2015
		Trade receivables			Other receivables			Trade receivables			Other receivables			Trade receivables			Other receivables
		In millions of won
Beginning balance	￦		47,312			225,078			65,024			69,887			80,644			67,932
Bad debt expense			40,446			8,665			39,018			15,981			1,308			18,473
Write-off			(22,734	)		(4,227	)		(23,398	)		(7,534	)		(28,978	)		(888	)
Reversal			—			—			—			(241	)		(1,018	)		(413	)
Others			—			(159,629	)		—			(10,161	)		—			6,642

Ending balance	￦		65,024			69,887			80,644			67,932			51,956			91,746

F-50

9.	Available-for-sale Financial Assets

(1)

Changes in available-for-sale financial assets for the years ended December 31, 2014 and 2015 are as follows:


		2014
		Beginning balance		Acquisition		Disposal			Valuation			Impairment			Others			Ending Balance
		In millions of won
Listed:
Korea District Heating Corp.	￦		194,710		—		—			(67,469	)		(40,300	)		40,300			127,241
LG Uplus Corporation(*1)			412,901		—		(299,593	)		1,344			—			(114,652	)		—
Kwanglim Co., Ltd.			150		—		—			(22	)		(22	)		22			128
Ssangyong Motor Co., Ltd.			291		—		—			66			—			—			357
Sungjee Construction. Co., Ltd.			7		—		—			(2	)		(2	)		2			5
Korea Line Corp.			—		—		—			—			—			—			—
Namkwang Engineering & Construction Co., Ltd.			5		—		—			(3	)		(11	)		11			2
Pumyang Construction Co., Ltd.			3		—		—			(2	)		—			(1	)		—
ELCOMTEC Co., Ltd.			—		—		—			(168	)		(168	)		384			48
PAN ocean Co., Ltd.			—		—					(9	)		(9	)		23			5
Borneo International Furniture Co., Ltd.			—		—					(1	)		—			5			4
TONGYANG Inc.			—		—		—			32			—			34			66
TONGYANG networks Inc.			—		—		—			—			—			3			3
PT Adaro Energy Tbk			45,204		—		—			(1,095	)		(27,449	)		27,449			44,109
Energy Fuels Inc.			10,307		—		—			1,617			—			(356	)		11,568
Cockatoo Coal Limited			1,875		—		—			(1,241	)		(977	)		971			628
Denison Mines Corp.			74,498		—		—			(8,892	)		—			(3,267	)		62,339
Fission 3.0			—		94		—			(45	)		—			12			61
Fission Uranium Corp.			848		—		—			(160	)		—			(37	)		651

			740,799		94		(299,593	)		(76,050	)		(68,938	)		(49,097	)		247,215

Unlisted:
Byucksan Engineering & Construction Co.,Ltd.			1		—		—			—			(1	)		—			—
Dongyang Engineering & Construction Corp.			5		—		—			—			(5	)		—			—
K&C—Gyeongnam youth job creation Investment Fund			1,340		—		—			—			—			—			1,340
Women’s Venture Fund(*1)			780		—		(780	)		—			—			—			—
Hanwha Electric Power Venture Fund			1,804		—		—			—			—			—			1,804
Korea Investment—Korea EXIM Bank CERs Private Special Asset Investment Trust I(*1)			6,803		—		(2,051	)		—			—			—			4,752
Troika Overseas Resource Development Private Equity Firm			10,664		2,676		—			—			—			—			13,340
IBK-AUCTUS Green Growth Private Equity Firm(*1)			6,054		—		(126	)		—			(3,603	)		—			2,325
Global Dynasty Overseas Resource Development Private Equity Firm			1,517		716		—			—			—			—			2,233
Intellectual Discovery, Ltd.			5,000		—		—			—			—			—			5,000
Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1			—		498		—			—			—			—			498
Construction Guarantee			790		—		—			5			—			—			795
Plant & Mechanical Contractors Financial Cooperative of Korea			36		—		—			—			—			—			36
Fire Guarantee			20		—		—			—			—			—			20
Korea Software Financial Cooperative			301		—		—			—			—			—			301
Engineering Financial Cooperative			60		—		—			—			—			—			60
Electric Contractors Financial Cooperative			152		—		—			—			—			—			152
Korea Specialty Contractor Financial Cooperative			417		—		—			—			—			—			417
Information & Communication Financial Cooperative			10		—		—			—			—			—			10

F-51


		2014
		Beginning balance		Acquisition		Disposal			Valuation			Impairment			Others			Ending Balance
		In millions of won
Korea Electric Engineers Association(*1)	￦		61		—		(21	)		—			—			—			40
Hwan Young Steel Co., Ltd.			97		—		—			—			—			—			97
Woobang ENC Co., Ltd			22		—		—			—			—			—			22
Dongnam Co., Ltd.			72		—		—			—			—			—			72
SAMBO AUTO. Co., Ltd.			38		—		—			—			—			—			38
Mobo Co., Ltd.			14		—		—			—			—			—			14
Poonglim Industrial Co., Ltd.			78		—		—			—			—			—			78
HANKOOK Silicon Co., Ltd.			7,513		—		—			—			—			—			7,513
Kun Young Engineering & Construction Co.,Ltd.			5		—		—			—			—			—			5
Pumyang Asset Management Co., Ltd.			—		—		—			—			—			3			3
Dae Kwang Semiconductor Co., Ltd.			6		—		—			—			—			—			6
Sanbon Department Store			124		—		—			—			—			—			124
Woori Ascon Co., Ltd.			10		—		—			—			—			—			10
Miju Steel Mfg. Co., Ltd.			51		—		—			—			—			—			51
Ginseng K Co., Ltd.			8		—		—			—			(8	)		—			—
BnB Sungwon Co., Ltd.			—		—		—			—			—			15			15
Hana Civil Engineering Co., Ltd.			—		—		—			—			—			1			1
KC Development Co., Ltd.			—		—		—			—			—			6			6
IMHWA Corp.			—		—		—			—			—			5			5
IXELON Co., Ltd.			—		—		—			—			—			23			23
DAIM Special Vehicle Co., Ltd.			—		—		—			—			—			10			10
ASA KIMJE Co., Ltd.			—		—		—			—			—			465			465
ASA JEONJU Co., Ltd.			—		—		—			—			—			697			697
KYUNGWON Co., Ltd.			—		—		—			—			—			14			14
Moonkyung Silica Co., Ltd.			—		—		—			—			—			—			—
Yousung Remicon Co., Ltd.			—		—		—			—			—			4			4
Sungkwang Timber Co., Ltd.			—		—		—			—			—			4			4
Yongbo Co., Ltd.			—		—		—			—			—			3			3
Korea Bio Fuel Co., Ltd.(*1)			1,500		—		(1,500	)		—			—			—			—
3I Power			1,486		—		—			—			(1,482	)		(4	)		—
Areva nc Expansion			248,292		—		—			—			—			(20,416	)		227,876
Green & Sustainable Energy			13		—		—			—			(13	)		—			—
Kanan Hydroelectric			17		—		—			—			(17	)		—			—
Navanakorn Electric Co., Ltd.			16,163		—		—			—			—			673			16,836
PT. Kedap Saayq			18,540		—		—			—			(5,551	)		—			12,989
Set Holding			170,514		—		—			(2,682	)		—			—			167,832
Siam Solar Power(*1)			933		—		(933	)		—			—			—			—

			501,311		3,890		(5,411	)		(2,677	)		(10,680	)		(18,497	)		467,936

Debt security:
Ambre Energy Limited(*1)			14,655		—		(14,655	)		—			—			—			—

			14,655		—		(14,655	)		—			—			—			—

	￦		1,256,765		3,984		(319,659	)		(78,727	)		(79,618	)		(67,594	)		715,151

(*1)

The Company recognized gain and loss on disposal of available-for-sale financial assets amounting to ￦98,065 million and ￦2,700 million, respectively, from the sales of shares of LG Uplus Corp., Korea Investment—Korea EXIM Bank CERs Private Special Asset Investment Trust, Korea Bio Fuel Co., Ltd., Ambre Energy Limited and others and from the liquidation of Women’s Venture Fund for the year ended December 31, 2014.

F-52


		2015
		Beginning balance		Acquisition		Disposal			Valuation			Impairment			Others			Ending Balance
		In millions of won
Listed:
Korea District Heating Corp.	￦		127,241		—		—			3,169			—			—			130,410
Kwanglim Co., Ltd.			128		—		—			134			—			—			262
Ssangyong Motor Co., Ltd.			357		—		—			(58	)		—			—			299
Sungjee Construction. Co., Ltd.			5		—		—			—			—			—			5
Korea Line Corp.			—		—		—			—			—			—			—
Namkwang Engineering & Construction Co., Ltd.			2		—		—			(3	)		—			2			1
Pumyang Construction Co., Ltd.			—		—		—			—			—			—			—
ELCOMTEC Co., Ltd.			48		—		—			5			—			—			53
PAN ocean Co., Ltd.			5		—		—			1			—			—			6
Borneo International Furniture Co., Ltd.			4		—		—			7			—			92			103
TONGYANG Inc.			66		—		—			140			—			11			217
TONGYANG networks Inc.			3		—		—			3			—			—			6
Nexolon Co., Ltd.			—		—		—			59			—			3,137			3,196
PT Adaro Energy Tbk			44,109		—		—			(23,097	)		(23,206	)		23,206			21,012
Energy Fuels Inc.			11,568		—		—			(4,866	)		(9,391	)		8,615			5,926
Cockatoo Coal Limited			628		—		—			(572	)		(572	)		558			42
Denison Mines Corp.			62,339		—		—			(22,187	)		(20,154	)		14,459			34,457
Fission 3.0(*1)			61		—		(57	)		11			—			15			30
Fission Uranium Corp.			651		—		—			(28	)		—			(69	)		554

			247,215		—		(57	)		(47,282	)		(53,323	)		50,026			196,579

Unlisted:
K&C—Gyeongnam youth job creation Investment Fund(*1)			1,340		—		(133	)		—			—			—			1,207
Hanwha Electric Power Venture Fund(*1)			1,804		—		(1,804	)		—			—			—			—
Korea Investment—Korea EXIM Bank CERs Private Special Asset Investment Trust I(*1)			4,752		—		(3,000	)		—			(1,181	)		—			571
Troika Overseas Resource Development Private Equity Firm			13,340		—		—			—			(11,787	)		—			1,553
IBK-AUCTUS Green Growth Private Equity firm(*1)			2,325		—		(1,470	)		—			—			—			855
Global Dynasty Overseas Resource Development Private Equity Firm			2,233		—		—			—			—			—			2,233
Intellectual Discovery, Ltd.			5,000		—		—			—			(3,625	)		—			1,375
Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1(*1)			498		802		(231	)		—			—			—			1,069
Construction Guarantee			795		—		—			10			—			—			805
Plant & Mechanical Contractors Financial Cooperative of Korea			36		—		—			—			—			—			36
Fire Guarantee			20		—		—			—			—			—			20
Korea Software Financial Cooperative			301		—		—			—			—			—			301
Engineering Financial Cooperative			60		—		—			—			—			—			60
Electric Contractors Financial Cooperative			152		—		—			—			—			—			152
Korea Specialty Contractor Financial Cooperative			417		—		—			—			—			—			417
Information & Communication Financial Cooperative			10		—		—			—			—			—			10
Korea Electric Engineers Association			40		—		—			—			—			—			40
Hwan Young Steel Co., Ltd.			97		—		—			—			—			—			97
Woobang ENC Co., Ltd			22		—		—			—			—			—			22
Dongnam Co., Ltd.			72		—		—			—			—			—			72
SAMBO AUTO. Co., Ltd.			38		—		—			—			—			—			38
Mobo Co., Ltd.			14		—		—			—			—			—			14
Poonglim Industrial Co., Ltd.			78		—		—			—			—			15			93

F-53


		2015
		Beginning balance		Acquisition		Disposal		Valuation		Impairment			Others		Ending Balance
		In millions of won
HANKOOK Silicon Co., Ltd.	￦		7,513		—		—		—		—			—		7,513
Kun Young Engineering & Construction Co., Ltd.			5		—		—		—		—			—		5
Pumyang Asset Management Co., Ltd.			3		—		—		—		—			—		3
Dae Kwang Semiconductor Co., Ltd.			6		—		—		—		—			—		6
Sanbon Department Store			124		—		—		—		(121	)		—		3
Woori Ascon Co., Ltd.			10		—		—		—		—			—		10
Miju Steel Mfg. Co., Ltd.			51		—		—		—		—			—		51
BnB Sungwon Co., Ltd.			15		—		—		—		—			—		15
Hana Civil Engineering Co., Ltd.			1		—		—		—		—			—		1
KC Development Co., Ltd.			6		—		—		—		—			—		6
IMHWA Corp.			5		—		—		—		—			—		5
IXELON Co., Ltd.			23		—		—		—		(23	)		—		—
DAIM Special Vehicle Co., Ltd.			10		—		—		—		—			—		10
ASA KIMJE Co., Ltd.			465		—		—		—		(465	)		—		—
ASA JEONJU Co., Ltd.			697		—		—		—		(628	)		—		69
KYUNGWON Co., Ltd.			14		—		—		—		—			—		14
Moonkyung Silica Co., Ltd.			—		—		—		—		—			—		—
Yousung Remicon Co., Ltd.			4		—		—		—		—			—		4
Sungkwang Timber Co., Ltd.			4		—		—		—		—			—		4
Yongbo Co., Ltd.			3		—		—		—		—			—		3
HJ Steel Co., Ltd.			—		—		—		—		—			2		2
Ildong Air Conditioning Co., Ltd.			—		—		—		—		(2	)		2		—
KS Remicon Co., Ltd.			—		—		—		—		—			3		3
Sewoong Heavy Industries Co., Ltd.			—		—		—		—		—			40		40
SIN-E Steel Co., Ltd.			—		—		—		—		—			33		33
Joongang Platec Co., Ltd.			—		—		—		—		—			72		72
Hangjin Steel Co., Ltd.			—		—		—		—		(116	)		116		—
Pyungsan SI Ltd.			—		—		—		—		—			9		9
Samgong Development Co., Ltd.			—		—		—		—		—			7		7
Joongang Development Co., Ltd.			—		—		—		—		—			8		8
AJS Co., Ltd.			—		—		—		—		—			32		32
SET&C Co., Ltd.			—		—		—		—		—			10		10
MSE Co., Ltd.			—		—		—		—		—			9		9
Ilrim Nano Tec Co., Ltd.			—		—		—		—		—			15		15
Kwang Myeong Electronics Technology Co., Ltd.			—		—		—		—		—			11		11
Youngjin Hi-Tech Co., Ltd.			—		—		—		—		(105	)		126		21
Dong Woo International Co., Ltd.											—			18		18
Bench Mark Construction Co., Ltd.			—		—		—		—		—			—		—
Buyoung Co., Ltd.			—		—		—		—		—			3		3
Ilsuk Co., Ltd.			—		—		—		—		—			10		10
Dongyang Telecom Co., Ltd.			—		—		—		—		—			11		11
Han Young Construction Co., Ltd.			—		—		—		—		—			3		3
Jongwon Remicon Co., Ltd.			—		—		—		—		—			13		13
Ace Heat Treating Co., Ltd.			—		—		—		—		—			72		72
Zyle Daewoo Motor Sales Co., Ltd.			—		—		—		—		—			—		—
Daewoo Development Co., Ltd.			—		—		—		—		—			—		—
Daewoo Songdo Development Co., Ltd.			—		—		—		—		(2	)		2		—
Seyang Inc.			—		—		—		—		—			27		27
Seungri Enterprise Co., Ltd.			—		—		—		—		—			3		3
Onggane Food Co., Ltd			—		—		—		—		—			1		1

F-54


		2015
		Beginning balance		Acquisition		Disposal			Valuation			Impairment			Others			Ending Balance
		In millions of won
Shin-E P&C Co., Ltd.	￦		—		—		—			—			—			1			1
Montista Telecom Co., Ltd.			—		—		—			—			(3	)		3			—
Ejung Ad Co., Ltd.			—		—		—			—						3			3
Solvus Co., Ltd.			—		—		—			—			—			3			3
Myung Co., Ltd.			—		—		—			—			—			2			2
Emotion Co., Ltd.			—		—		—			—			—			8			8
Youngdong Concrete Co., Ltd.			—		—		—			—			—			7			7
Shinil Engineering Co., Ltd.			—		—		—			—			—			3			3
Korea Castiron Industrial Co., Ltd.			—		—		—			—			—			22			22
FFG DMC Co., Ltd.			—		—		—			—			—			17			17
Daeseong Metal Co., Ltd.			—		—		—			—			—			47			47
Biwang Industry Co., Ltd			—		—		—			—			—			2			2
Huimun Co., Ltd.			—		—		—			—			—			4			4
Sunun IT F Co., Ltd.			—		—		—			—			—			8			8
Young Sung Co., Ltd.			—		—		—			—			—			27			27
Yuil Industrial Electronics Co., Ltd.			—		—		—			—			—			16			16
DN TEK Inc.			—		—		—			—			—			62			62
Daeyang FMS Corporation			—		—		—			—			—			3			3
Kwang Jin Structure Co., Ltd.			—		—		—			—			—			31			31
Woojin Industry Corporation			—		—		—			—			—			16			16
Kwang Sung Industry Co., Ltd.			—		—		—			—			—			7			7
Matsaeng Food Co., Ltd.			—		—		—			—			—			6			6
Futech Mold Co., Ltd.			—		—		—			—			—			14			14
Samcheonri Industrial Co., Ltd.			—		—		—			—			—			13			13
Woojoo Environment Ind. Co., Ltd.			—		—		—			—			—			13			13
Cheongatti Co., Ltd.			—		—		—			—			—			4			4
Hyungji Esquire Co., Ltd.			—		—		—			—			—			21			21
Kolmar Pharma Co., Ltd.			—		—		—			—			—			52			52
Morado Co., Ltd.			—		—		—			—			—			2			2
Myung Sung Tex Co., Ltd.			—		—		—			—			—			2			2
Areva nc Expansion			227,876		—		—			—			—			(57,758	)		170,118
Navanakorn Electric Co., Ltd.			16,836		—		—			—			—			1,115			17,951
PT. Kedap Saayq			12,989		—		—			—			(12,989	)		—			—
Set Holding			167,832		—		—			11,753			—			—			179,585
PT. Cirebon Energi Prasarana			—		635		—			—			—			—			635

			467,936		1,437		(6,638	)		11,763			(31,047	)		(55,551	)		387,900

	￦		715,151		1,437		(6,695	)		(35,519	)		(84,370	)		(5,525	)		584,479

(*1)

The Company recognized gain and loss on disposal of available-for-sale financial assets amounting to ￦4 million and ￦3,008 million, respectively, from the sales of shares of Fission 3.0, K&C—Gyeongnam Youth Job Creation Investment Fund, Korea Investment—Korea EXIM Bank CERs Private Special Asset Investment Trust 1, IBK-AUCTUS Green Growth Private Equity Firm and others and from the liquidation of Hanwha Electric Power Venture fund for the year ended December 31, 2015.

F-55

(2)

Available-for-sale financial assets of December 31, 2014 and 2015 are as follows:


	2014
	Shares		Ownership				Historical cost		Book value		Fair value
	In millions of won
Listed
Korea District Heating Corp.		2,264,068		19.55	%	￦		173,201		127,241		127,241
Kwanglim Co., Ltd.		84,515		0.44	%			386		128		128
Ssangyong Motor Co., Ltd.		38,568		0.03	%			428		357		357
Sungjee Construction. Co., Ltd.		1,053		0.01	%			49		5		5
Korea Line Corp.		18		0.00	%			1		—		—
Namkwang Engineering & Construction Co., Ltd.		559		0.01	%			12		2		2
Pumyang Construction Co., Ltd.		7		0.00	%			2		—		—
ELCOMTEC Co., Ltd.		32,875		0.04	%			217		48		48
PAN ocean Co., Ltd.		1,866		0.00	%			14		5		5
Borneo International Furniture Co., Ltd.		2,607		0.01	%			5		4		4
TONGYANG Inc.		73,364		0.03	%			33		66		66
TONGYANG networks Inc.		4,422		0.01	%			3		3		3
PT Adaro Energy Tbk		480,000,000		1.50	%			71,554		44,109		44,109
Energy Fuels Inc.		1,711,814		8.70	%			16,819		11,568		11,568
Cockatoo Coal Limited		49,881,423		1.10	%			18,445		628		628
Denison Mines Corp.		58,284,000		11.52	%			84,134		62,339		62,339
Fission 3.0		800,000		0.51	%			—		61		61
Fission Uranium Corp.		800,000		0.22	%			785		651		651

								366,088		247,215		247,215

*Unlisted(1)**
Byucksan Engineering & Construction Co.,Ltd.		272		0.00	%			5		—		—
Dongyang Engineering & Construction Corp.		1,276		0.01	%			5		—		—
K&C—Gyeongnam youth job creation Investment Fund		27		10.00	%			1,340		1,340		—
Hanwha Electric Power Venture Fund		2,196		16.40	%			1,804		1,804		—
Korea Investment—Korea EXIM Bank CERs Private Special Asset Investment Trust I		4,770,837,919		14.18	%			4,752		4,752		—
Troika Overseas Resource Development Private Equity Firm		13,340,012,100		3.66	%			13,340		13,340		—
IBK-AUCTUS Green Growth Private Equity firm		703		6.30	%			5,928		2,325		—
Global Dynasty Overseas Resource Development Private Equity Firm		2,233,407,439		7.46	%			2,233		2,233		—
Intellectual Discovery, Ltd.		1,000,000		8.81	%			5,000		5,000		—
Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1		497,650,000		5.00	%			498		498		—
Construction Guarantee(*2)		571		0.02	%			601		795		795
Plant & Mechanical Contractors Financial Cooperative of Korea		50		0.01	%			36		36		—
Fire Guarantee		40		0.02	%			20		20		—
Korea Software Financial Cooperative		301		0.15	%			301		301		—
Engineering Financial Cooperative		528		0.10	%			60		60		—
Electric Contractors Financial Cooperative		800		0.03	%			152		152		—
Korea Specialty Contractor Financial Cooperative		476		0.01	%			417		417		—
Information & Communication Financial Cooperative		70		0.01	%			10		10		—
Korea Electric Engineers Association		400		0.26	%			40		40		—
Hwan Young Steel Co., Ltd.		10,916		0.14	%			1,092		97		—
Woobang ENC Co., Ltd		14		0.00	%			22		22		—
Dongnam Co., Ltd.		2,070		0.46	%			72		72		—
SAMBO AUTO. Co., Ltd.		15,066		0.02	%			38		38		—

F-56


	2014
	Shares		Ownership				Historical cost		Book value		Fair value
	In millions of won
Mobo Co., Ltd.		504		0.00	%	￦		14		14		—
Poonglim Industrial Co., Ltd.		1,555		0.01	%			78		78		—
HANKOOK Silicon Co., Ltd.		7,513,022		10.44	%			7,513		7,513		—
Kun Young Engineering & Construction Co., Ltd.		100		0.00	%			5		5		—
Pumyang Asset Management Co., Ltd.		13		0.00	%			3		3		—
Dae Kwang Semiconductor Co., Ltd.		589		0.07	%			6		6		—
Sanbon Department Store		828		0.01	%			124		124		—
Woori Ascon Co., Ltd.		25		0.34	%			10		10		—
Miju Steel Mfg. Co., Ltd.		99,804		0.23	%			51		51		—
Ginseng K Co., Ltd.		7,415		0.00	%			7		—		—
BnB Sungwon Co., Ltd.		589		0.01	%			15		15		—
Hana Civil Engineering Co., Ltd.		23		0.00	%			1		1		—
KC Development Co., Ltd.		839		0.02	%			6		6		—
IMHWA Corp.		329		0.11	%			5		5		—
IXELON Co., Ltd.		2,292		0.02	%			23		23		—
DAIM Special Vehicle Co., Ltd.		58		0.08	%			10		10		—
ASA KIMJE Co., Ltd.		23,245		1.11	%			465		465		—
ASA JEONJU Co., Ltd.		34,846		1.34	%			697		697		—
KYUNGWON Co., Ltd.		2,812		0.17	%			14		14		—
Moonkyung Silica Co., Ltd.		42		0.56	%			—		—		—
Yousung Remicon Co., Ltd.		8		0.26	%			4		4		—
Sungkwang Timber Co., Ltd.		9		0.34	%			4		4		—
Yongbo Co., Ltd.		61		0.20	%			3		3		—
3I Power		448,501		15.00	%			1,121		—		—
Areva nc Expansion		1,077,124		13.49	%			288,443		227,876		—
Green & Sustainable Energy		550		0.00	%			3		—		—
Kanan Hydroelectric		734		19.58	%			5		—		—
Navanakorn Electric Co., Ltd.(*3)		4,442,800		29.00	%			16,646		16,836		—
PT. Kedap Saayq		671		10.00	%			18,540		12,989		—
Set Holding(*4)		1,100,220		2.50	%			229,255		167,832		167,832

								600,837		467,936		168,627

						￦		966,925		715,151		415,842

(*1)	Book values of unlisted equity securities held by the Company were measured at cost as a quoted market price does not exist in an active market and its fair value cannot be measured reliably.

(*2)

The Company has estimated the fair value of the investment in Construction Guarantee based upon the price which would be applied when the investment is returned. The Company has recognized the difference between its fair value and book value as a gain or loss on valuation of available-for-sale financial assets in other comprehensive income or loss during the year ended December 31, 2014.

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

(*4)

The Company has estimated the fair value of Set Holding by using the discounted cash flow method and has recognized the difference between its fair value and book value as gain or loss on valuation of available-for-sale financial assets in other comprehensive income or loss during the year ended December 31, 2014.

F-57


	2015
	Shares		Ownership				Historical cost		Book value		Fair value
	In millions of won
Listed
Korea District Heating Corp.		2,264,068		19.55	%	￦		173,201		130,410		130,410
Kwanglim Co., Ltd.		84,515		0.44	%			386		262		262
Ssangyong Motor Co., Ltd.		38,568		0.03	%			428		299		299
Sungjee Construction. Co., Ltd.		1,053		0.01	%			49		5		5
Korea Line Corp.		18		0.00	%			1		—		—
Namkwang Engineering & Construction Co., Ltd.		232		0.00	%			15		1		1
Pumyang Construction Co., Ltd.		7		0.00	%			2		—		—
ELCOMTEC Co., Ltd.		32,875		0.04	%			217		53		53
PAN ocean Co., Ltd.		1,492		0.00	%			14		6		6
Borneo International Furniture Co., Ltd.		64,037		0.28	%			97		103		103
TONGYANG Inc.		78,511		0.03	%			45		217		217
TONGYANG networks Inc.		4,422		0.01	%			3		6		6
Nexolon Co., Ltd.		3,665,367		2.59	%			3,138		3,196		3,196
PT Adaro Energy Tbk		480,000,000		1.50	%			71,554		21,012		21,012
Energy Fuels Inc.		1,711,814		3.79	%			16,819		5,926		5,926
Cockatoo Coal Limited		49,881,423		0.07	%			18,445		42		42
Denison Mines Corp.		58,284,000		11.24	%			84,134		34,457		34,457
Fission 3.0		300,000		0.17	%			—		30		30
Fission Uranium Corp.		800,000		0.21	%			785		554		554

								369,333		196,579		196,579

*Unlisted(1)**
K&C—Gyeongnam youth job creation Investment Fund		24		10.00	%			1,207		1,207		—
Korea Investment—Korea EXIM Bank CERs Private Special Asset Investment Trust I		1,758,731,002		14.18	%			1,752		571		—
Troika Overseas Resource Development Private Equity Firm		13,340,012,100		3.66	%			13,340		1,553		—
IBK-AUCTUS Green Growth Private Equity firm		233		6.30	%			855		855		—
Global Dynasty Overseas Resource Development Private Equity Firm		2,233,407,439		7.46	%			2,233		2,233		—
Intellectual Discovery, Ltd.		1,000,000		8.81	%			5,000		1,375		—
Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1		1,069,432,095		5.00	%			1,069		1,069		—
Construction Guarantee(*2)		571		0.02	%			601		805		805
Plant & Mechanical Contractors Financial Cooperative of Korea		50		0.01	%			36		36		—
Fire Guarantee		40		0.02	%			20		20		—
Korea Software Financial Cooperative		301		0.15	%			301		301		—
Engineering Financial Cooperative		528		0.10	%			60		60		—
Electric Contractors Financial Cooperative		800		0.03	%			152		152		—
Korea Specialty Contractor Financial Cooperative		476		0.01	%			417		417		—
Information & Communication Financial Cooperative		70		0.01	%			10		10		—
Korea Electric Engineers Association		400		0.26	%			40		40		—
Hwan Young Steel Co., Ltd.		10,916		0.14	%			1,092		97		—
Woobang ENC Co., Ltd		14		0.00	%			22		22		—
Dongnam Co., Ltd.		2,070		0.46	%			72		72		—
SAMBO AUTO. Co., Ltd.		15,066		0.02	%			38		38		—
Mobo Co., Ltd.		504		0.00	%			14		14		—
Poonglim Industrial Co., Ltd.		1,915		0.01	%			93		93		—
HANKOOK Silicon Co., Ltd.		7,513,022		10.44	%			7,513		7,513		—
Kun Young Engineering & Construction Co.,Ltd.		100		0.00	%			5		5		—
Pumyang Asset Management Co., Ltd.		13		0.00	%			3		3		—
Dae Kwang Semiconductor Co., Ltd.		589		0.07	%			6		6		—
Sanbon Department Store		828		0.01	%			124		3		—

F-58


	2015
	Shares		Ownership				Historical cost		Book value		Fair value
	In millions of won
Woori Ascon Co., Ltd.		25		0.34	%	￦		10		10		—
Miju Steel Mfg. Co., Ltd.		99,804		0.23	%			51		51		—
BnB Sungwon Co., Ltd.		589		0.07	%			15		15		—
Hana Civil Engineering Co., Ltd.		23		0.00	%			1		1		—
KC Development Co., Ltd.		839		0.02	%			6		6		—
IMHWA Corp.		329		0.11	%			5		5		—
IXELON Co., Ltd.		2,292		0.02	%			23		—		—
DAIM Special Vehicle Co., Ltd.		58		0.08	%			10		10		—
ASA KIMJE Co., Ltd.		23,245		1.11	%			465		—		—
ASA JEONJU Co., Ltd.		34,846		1.34	%			697		69		—
KYUNGWON Co., Ltd.		2,812		0.17	%			14		14		—
Moonkyung Silica Co., Ltd.		42		0.56	%			—		—		—
Yousung Remicon Co., Ltd.		8		0.26	%			4		4		—
Sungkwang Timber Co., Ltd.		9		0.34	%			4		4		—
Yongbo Co., Ltd.		61		0.20	%			3		3		—
HJ Steel Co., Ltd.		218		0.07	%			2		2		—
Ildong Air Conditioning Co., Ltd.		218		0.16	%			3		—		—
KS Remicon Co., Ltd.		12		0.04	%			3		3		—
Sewoong Heavy Industries Co., Ltd.		7,931		0.10	%			40		40		—
SIN-E Steel Co., Ltd.		109		0.08	%			33		33		—
Joongang Platec Co., Ltd.		3,591		0.75	%			72		72		—
Hangjin Steel Co., Ltd.		116		1.08	%			116		—		—
Pyungsan SI Ltd.		434		0.01	%			9		9		—
Samgong Development Co., Ltd.		12		0.01	%			7		7		—
Joongang Development Co., Ltd.		540		0.12	%			8		8		—
AJS Co., Ltd.		12,906		0.23	%			32		32		—
SET&C Co., Ltd.		119		0.13	%			10		10		—
MSE Co., Ltd.		429		0.13	%			9		9		—
Ilrim Nano Tec Co., Ltd.		1,520		0.07	%			15		15		—
Kwang Myeong Electronics Technology Co., Ltd.		113		0.37	%			11		11		—
Youngjin Hi-Tech Co., Ltd.		2,512		0.25	%			126		21		—
Dong Woo International Co., Ltd.		90		0.37	%			18		18		—
Bench Mark Construction Co., Ltd.		2		0.00	%			—		—		—
Buyoung Co., Ltd.		270		0.00	%			3		3		—
Ilsuk Co., Ltd.		152		0.17	%			10		10		—
Dongyang Telecom Co., Ltd.		1,760		0.01	%			11		11		—
Han Young Construction Co., Ltd.		35		0.03	%			3		3		—
Jongwon Remicon Co., Ltd.		31		0.18	%			13		13		—
Ace Heat Treating Co., Ltd.		477		1.43	%			72		72		—
Zyle Daewoo Motor Sales Co., Ltd.		22		0.00	%			—		—		—
Daewoo Development Co., Ltd.		8		0.00	%			—		—		—
Daewoo Songdo Development Co., Ltd.		301		0.00	%			2		—		—
Seyang Inc.		537		0.05	%			27		27		—
Seungri Enterprise Co., Ltd.		93		0.05	%			3		3		—
Onggane Food Co., Ltd		5		0.07	%			1		1		—
Shin-E P&C Co., Ltd.		12		0.00	%			1		1		—
Montista Telecom Co., Ltd.		5,409		0.00	%			3		—		—
Ejung Ad Co., Ltd.		132		0.09	%			3		3		—
Solvus Co., Ltd.		1,056		0.04	%			3		3		—
Myung Co., Ltd.		89		0.05	%			2		2		—
Emotion Co., Ltd.		167		0.61	%			8		8		—
Youngdong Concrete Co., Ltd.		32		0.32	%			7		7		—
Shinil Engineering Co., Ltd.		887		0.06	%			3		3		—
Korea Castiron Industrial Co., Ltd.		617		1.86	%			22		22		—

F-59


	2015
	Shares		Ownership				Historical cost		Book value		Fair value
	In millions of won
FFG DMC Co., Ltd.		12		0.00	%	￦		17		17		—
Daeseong Metal Co., Ltd.		518		2.37	%			47		47		—
Biwang Industry Co., Ltd		406		0.04	%			2		2		—
Huimun Co., Ltd.		263		0.26	%			4		4		—
Sunun IT F Co., Ltd.		133		0.52	%			8		8		—
Young Sung Co., Ltd.		89		0.40	%			27		27		—
Yuil Industrial Electronics Co., Ltd.		804		0.32	%			16		16		—
DN TEK Inc.		12,401		0.29	%			62		62		—
Daeyang FMS Corporation		84		0.05	%			3		3		—
Kwang Jin Structure Co., Ltd.		3,072		0.60	%			31		31		—
Woojin Industry Corporation		3		0.00	%			16		16		—
Kwang Sung Industry Co., Ltd.		325		0.35	%			7		7		—
Matsaeng Food Co., Ltd.		277		0.56	%			6		6		—
Futech Mold Co., Ltd.		274		0.27	%			14		14		—
Samcheonri Industrial Co., Ltd.		533		0.98	%			13		13		—
Woojoo Environment Ind. Co., Ltd.		101		0.11	%			13		13		—
Cheongatti Co., Ltd.		57		0.10	%			4		4		—
Hyungji Esquire Co., Ltd.		52		0.02	%			21		21		—
Kolmar Pharma Co., Ltd.		1,426		0.01	%			52		52		—
Morado Co., Ltd.		209		0.04	%			2		2		—
Myung Sung Tex Co., Ltd.		20		0.00	%			2		2		—
Areva nc Expansion		1,077,124		13.49	%			288,443		170,118		—
Navanakorn Electric Co., Ltd. (*3)		4,442,800		29.00	%			16,646		17,951		—
PT. Kedap Saayq		671		10.00	%			18,540		—		—
Set Holding (*4)		1,100,220		2.50	%			229,255		179,585		179,585
PT. Cirebon Energi Prasarana		420		10.00	%			635		635		—

								591,980		387,900		180,390

						￦		961,313		584,479		376,969

(*1)	Book values of unlisted equity securities held by the Company were measured at cost as a quoted market price does not exist in an active market and its fair value cannot be measured reliably.

(*2)

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

(*4)

F-60

10.

Held-to-maturity Investments

Held-to-maturity investments as of December 31, 2014 and 2015 are as follows:


		2014
		Beginning balance		Acquisition		Disposal			Impairment		Others			Ending balance
		In millions of won
Government bonds	￦		2,268		2,351		(1,018	)		—		—			3,601
Municipal bonds			13		—		—			—		—			13

	￦		2,281		2,351		(1,018	)		—		—			3,614

Current	￦		168		—		(777	)		—		874			265
Non-current			2,113		2,351		(241	)		—		(874	)		3,349


		2015
		Beginning balance		Acquisition		Disposal			Impairment		Others			Ending balance
		In millions of won
Government bonds	￦		3,601		432		(410	)		—		—			3,623
Municipal bonds			13		—		—			—		(13	)		—

	￦		3,614		432		(410	)		—		(13	)		3,623

Current	￦		265		—		(186	)		—		301			380
Non-current			3,349		432		(224	)		—		(314	)		3,243

F-61

11.

Derivatives

(1)

Derivatives as of December 31, 2014 and 2015 are as follows:


		2014				2015
		Current		Non-current		Current		Non-current
		In millions of won
Derivative assets
Currency forward	￦		182		7,233		1,498		24,896
Currency swap			8,039		151,934		95,759		491,219
Interest rate swap			—		2,737		—		3,778

	￦		8,221		161,904		97,257		519,893

Derivative liabilities
Currency forward	￦		466		—		1,142		—
Currency swap			53,697		196,273		758		66,976
Interest rate swap			3,457		83,913		8,345		89,289

	￦		57,620		280,186		10,245		156,265

(2)

Currency forward contracts which are not designated as hedge instruments, as of December 31, 2015 are as follows:


Counterparty	Contract Date		Maturity date	Contract amount						Contract exchange rate
Counterparty	Contract Date		Maturity date	Pay				Receive		Contract exchange rate
	In millions of won and thousands of foreign currencies
KEB Hana Bank		2014.04.10	2021.07.12		￦		55,120	USD	52,000		1,060.00
KEB Hana Bank		2014.04.28	2021.07.12				50,784	USD	48,000		1,058.00
KEB Hana Bank		2014.05.09	2021.07.12				104,600	USD	100,000		1,046.00
Bank of America		2014.04.29	2021.07.12				105,400	USD	100,000		1,054.00
Barclays Bank PLC		2015.12.17	2016.01.13				5,904	USD	5,000		1,180.78
Barclays Bank PLC		2015.12.28	2016.01.22				5,822	USD	5,000		1,164.30
Barclays Bank PLC		2015.12.29	2016.01.25				5,845	USD	5,000		1,168.90
Citibank		2015.12.28	2016.01.21				5,826	USD	5,000		1,165.15
HSBC		2015.12.11	2016.01.12				5,903	USD	5,000		1,180.59
Nova Scotia		2015.12.07	2016.01.11				2,332	USD	2,000		1,166.20
Nova Scotia		2015.12.07	2016.01.11				2,337	USD	2,000		1,168.70
Nova Scotia		2015.12.24	2016.01.20				5,856	USD	5,000		1,171.25
Nova Scotia		2015.12.30	2016.01.27				5,870	USD	5,000		1,173.98
Standard Chartered		2015.12.10	2016.01.08				5,913	USD	5,000		1,182.65
Standard Chartered		2015.12.24	2016.01.19				5,846	USD	5,000		1,169.12
Standard Chartered		2015.12.29	2016.01.26				5,841	USD	5,000		1,168.24
Nova Scotia		2015.11.20	2016.02.24				5,789	USD	5,000		1,157.86
Nova Scotia		2015.12.23	2016.01.28				1,171	USD	1,000		1,171.10
Nova Scotia		2015.12.18	2016.01.29				5,830	USD	5,000		1,166.00
Nova Scotia		2015.12.24	2016.01.04				7,653	USD	6,538		1,170.53
Standard Chartered		2015.11.10	2016.02.12				3,483	USD	3,000		1,160.90
Standard Chartered		2015.12.29	2016.01.05				13,042	USD	11,173		1,167.28
Barclays Bank PLC		2015.12.16	2016.03.18				3,527	USD	3,000		1,175.52
Barclays Bank PLC		2015.12.18	2016.03.22				3,562	USD	3,000		1,187.35
Societe Generale		2015.12.28	2016.01.29				5,823	USD	5,000		1,164.50
Societe Generale		2015.11.25	2016.02.29				5,746	USD	5,000		1,149.25
Societe Generale		2015.12.21	2016.02.29			USD	3,736		4,293		1,149.25
Societe Generale		2015.12.28	2016.02.29			USD	745		857		1,149.25
Societe Generale		2015.12.22	2016.03.24				5,885	USD	5,000		1,177.00
HSBC		2015.10.07	2016.01.13				5,795	USD	5,000		1,158.95

F-62


Counterparty	Contract Date		Maturity date	Contract amount						Contract exchange rate
Counterparty	Contract Date		Maturity date	Pay				Receive		Contract exchange rate
	In millions of won and thousands of foreign currencies
HSBC		2015.10.22	2016.01.13		￦	USD	2,313		2,681		1,158.95
HSBC		2015.11.04	2016.02.11				11,358	USD	10,000		1,135.80
HSBC		2015.11.16	2016.02.19				2,346	USD	2,000		1,173.20
HSBC		2015.11.19	2016.01.13			USD	2,687		3,114		1,158.95
HSBC		2015.11.24	2016.02.11			USD	797		906		1,135.80
HSBC		2015.11.24	2016.02.11			USD	9,203		10,452		1,135.80
HSBC		2015.12.29	2016.01.04				8,396	USD	7,193		1,167.25
Mizuho Bank		2015.11.04	2016.02.11				5,665	USD	5,000		1,132.91
Mizuho Bank		2015.11.17	2016.02.11			USD	4,776		5,411		1,132.91
Mizuho Bank		2015.12.08	2016.02.11			USD	224		254		1,132.91
Mizuho Bank		2015.12.22	2016.01.25				3,524	USD	3,000		1,174.75
Mizuho Bank		2015.12.24	2016.01.29				5,853	USD	5,000		1,170.54
Mizuho Bank		2015.12.29	2016.01.29				5,849	USD	5,000		1,169.80
Credit Agricole		2015.10.07	2016.01.13				4,700	USD	4,000		1,174.90
Credit Agricole		2015.10.14	2016.01.19				3,460	USD	3,000		1,153.30
Credit Agricole		2015.10.29	2016.01.13			USD	752		878		1,167.43
Credit Agricole		2015.11.02	2016.01.13			USD	1,520		1,774		1,167.40
Credit Agricole		2015.12.10	2016.01.13			USD	1,728		2,017		1,167.40
Credit Agricole		2015.12.28	2016.03.30				5,833	USD	5,000		1,166.60
HSBC		2015.12.16	2016.01.04				3,654	USD	3,100		1,178.77
Nonghyup Bank		2015.12.16	2016.01.06				5,885	USD	5,000		1,176.92
KEB Hana Bank		2015.12.18	2016.01.06				7,462	USD	6,300		1,184.37
Nova Scotia		2015.12.21	2016.01.06				1,179	USD	1,000		1,178.50
Nova Scotia		2015.12.22	2016.01.06				6,470	USD	5,500		1,176.36
Standard Chartered		2015.12.23	2016.01.06				10,316	USD	8,800		1,172.31
Nova Scotia		2015.12.30	2016.01.08				7,627	USD	6,500		1,173.45
Nova Scotia		2015.12.28	2016.01.04				466	USD	400		1,165.76
Nova Scotia		2015.12.29	2016.01.08				7,706	USD	6,600		1,167.55
Societe Generale		2015.10.12	2016.01.13				754	USD	655		1,151.15
KEB Hana Bank		2015.08.26	2017.07.31			JPY	630,000		6,377		10.12

F-63

(3)

Currency swap contracts which are not designated as hedge instruments as of December 31, 2015 are as follows:


Counterparty	Contract year			Contract amount				Contract interest rate		Contract exchange rate
Counterparty	Contract year			Pay		Receive		Pay (%)	Receive (%)	Contract exchange rate
	In millions of won and thousands of foreign currencies
Deutsche Bank		2013~2018	￦		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		2013~2018			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
Standard Chartered		2014~2019			114,903		CHF 100,000	4.00%	1.50%		1,149.03
Standard Chartered		2014~2029			102,470		USD 100,000	3.14%	3.57%		1,024.70
Standard Chartered		2014~2017			51,215		USD 50,000	2.24%	3M Libor + 0.55%		1,024.30
Societe Generale		2014~2024			105,017		USD 100,000	4.92%	5.13%		1,050.17
KEB Hana Bank		2015~2024			107,970		USD 100,000	4.75%	5.13%		1,079.70
Credit Agricole		2015~2024			94,219		USD 86,920	4.85%	5.13%		1,083.97
Mizuho Bank		2014~2017			153,645		USD 150,000	2.35%	3M Libor + 0.65%		1,024.30
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
KEB Hana Bank		2012~2022			111,770		USD 100,000	2.87%	3.00%		1,117.70
Standard Chartered		2012~2022			111,770		USD 100,000	2.89%	3.00%		1,117.70
Deutsche Bank		2012~2022			55,885		USD 50,000	2.79%	3.00%		1,117.70
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
JP Morgan		2014~2017			102,670		USD 100,000	2.89%	3M Libor+0.78%		1,026.70
Deutsche Bank		2014~2017			102,670		USD 100,000	2.89%	3M Libor+0.78%		1,026.70
HSBC		2014~2019			105,260		USD 100,000	2.48%	2.38%		1,052.60
Standard Chartered		2014~2019			105,260		USD 100,000	2.48%	2.38%		1,052.60
RBS		2014~2019			105,260		USD 100,000	2.48%	2.38%		1,052.60
Nomura		2015~2025			111,190		USD 100,000	2.60%	3.25%		1,111.90
Korea Development Bank		2015~2025			111,190		USD 100,000	2.62%	3.25%		1,111.90
KEB Hana Bank		2015~2025			55,595		USD 50,000	2.62%	3.25%		1,111.90
Woori Bank		2015~2025			55,595		USD 50,000	2.62%	3.25%		1,111.90

(4)

Currency swap contracts which are designated as hedge instruments as of December 31, 2015 are as follows:


Counterparty	Contract year			Contract amount				Contract interest rate		Contract exchange rate
Counterparty	Contract year			Pay		Receive		Pay (%)	Receive (%)	Contract exchange rate
	In millions of won and thousands of foreign currencies
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
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%		981.00
Credit Suisse		2006~2016			98,100		USD 100,000	5.48%	5.50%		981.00
JP Morgan		2014~2019			107,190		USD 100,000	3.25%+3%*n/N	2.75%		1,071.90

F-64


Counterparty	Contract year			Contract amount				Contract interest rate		Contract exchange rate
Counterparty	Contract year			Pay		Receive		Pay (%)	Receive (%)	Contract exchange rate
	In millions of won and thousands of foreign currencies
Morgan Stanley		2014~2019	￦		107,190		USD 100,000	3.25%+3%*n/N	2.75%		1,071.90
Deutsche Bank		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%		958.50
Deutsche Bank AG		2006~2016			71,888		USD 75,000	4.81%	5.50%		958.50
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
Credit Agricole		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
Credit Agricole		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
Credit Agricole		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
Standard Chartered		2014~2019			104,490		USD 100,000	2.77%	2.63%		1,044.90
Credit Agricole		2014~2019			104,490		USD 100,000	2.77%	2.63%		1,044.90
Barclays Bank PLC		2014~2019			104,490		USD 100,000	2.77%	2.63%		1,044.90
Barclays Bank PLC		2013~2018			81,188		USD 75,000	2.65%	1.88%		1,082.50
Credit Agricole		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+1.05%		1,084.10
Credit Agricole		2014~2017			54,205		USD 50,000	2.93%	3M Libor+1.05%		1,084.10
HSBC		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
KEB 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
Societe Generale		2013~2018			106,190		USD 100,000	3.48%	2.63%		1,061.90
BNP Paribas		2013~2018			53,095		USD 50,000	3.48%	2.63%		1,061.90
KEB 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
KEB 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
Credit Agricole		2014~2020			110,680		USD 100,000	2.29%	2.50%		1,106.80
Societe Generale		2014~2020			55,340		USD 50,000	2.16%	2.50%		1,106.80
KEB Hana Bank		2014~2020			55,340		USD 50,000	2.16%	2.50%		1,106.80
KEB Hana Bank		2014~2020			55,340		USD 50,000	2.21%	2.50%		1,106.80
Standard Chartered		2014~2020			55,340		USD 50,000	2.21%	2.50%		1,106.80
HSBC		2014~2020			55,340		USD 50,000	2.21%	2.50%		1,106.80
Nomura		2014~2020			55,340		USD 50,000	2.21%	2.50%		1,106.80
Barclays Bank PLC		2014~2020			55,340		USD 50,000	2.21%	2.50%		1,106.80
HSBC		2014~2020			55,340		USD 50,000	2.21%	2.50%		1,106.80

F-65

(5)

Interest rate swap contracts which are not designated as hedge instruments as of December 31, 2015 are as follows:

Counterparty

Contract
year

Contract
amount

Contract interest rate per annum

Pay (%)

Receive (%)

In millions of won

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%

KEB Hana Bank

2013~2016

100,000

2.82%

3M CD + 0.04%

KEB Hana Bank

2013~2016

200,000

2.57%

3M CD + 0.04%

KEB Hana Bank

2013~2016

100,000

2.75%

3M CD + 0.03%

Credit Suisse

2014~2018

200,000

2.98%

1Y CMT + 0.31%

Korea Development Bank (*)

2014~2029

40,000

3M CD – 0.03%

4.65%

(*)

The contract is an interest rate swap hedging on Electricity Bonds 885, and the bank would notify the Company of the early termination every year on the early termination notification date (every year on April 28, from 2017 until 2028). The contract will be terminated if the early termination is notified.

(6)

Interest rate swap contracts which are designated as hedge instruments, as of December 31, 2015 are as follows:

Counterparty

Contract
year

Contract
amount

Contract interest rate per annum

Pay (%)

Receive (%)

In thousands of U.S. dollars

BNP Paribas

2009~2027

USD 99,920

4.16%

6M USD Libor

KFW

2009~2027

USD 99,920

4.16%

6M USD Libor

CA-CIB (Credit Agricole)

2015~2033

USD 103,012

3.98% ~ 4.10%

6M USD Libor

SMBC

2015~2033

USD 134,708

4.05% ~ 4.18%

6M USD Libor

(7)

Gain and loss on valuation and transaction of derivatives for the years ended December 31, 2014 and 2015 are as follows and included in finance income and costs in the consolidated statements of comprehensive income (loss):


		Net income effects of valuation gain (loss)					Net income effects of transaction gain (loss)					Accumulated other comprehensive *income (loss) ()**
		2014			2015		2014			2015		2014			2015
		In millions of won
Currency option	￦		—			—		16,535			—		—			—
Currency forward			58,068			357		321			8,523		(30,072	)		—
Currency swap			168,987			431,565		(79,484	)		75,752		(90,990	)		(6,926	)
Interest rate swap			(16,800	)		161,609		(3,680	)		30,314		(15,235	)		4,082
Other derivatives			—			—		(709	)		—		—			—

	￦		210,255			593,531		(67,017	)		114,589		(136,297	)		(2,844	)

(*)	As of December 31, 2015, the net gain on valuation of derivatives using cash flow hedge accounting of ￦4,409 million, net of tax, is included in other comprehensive income.

F-66

12.

Other Financial Assets

(1)

Other financial assets as of December 31, 2014 and 2015 are as follows:


		2014						2015
		Current			Non-current			Current			Non-current
		In millions of won
Loans and receivables	￦		68,910			611,610			106,013			678,126
Present value discount			(1,067	)		(55,456	)		(859	)		(48,223	)
Long-term/short-term financial instruments			100,099			604,363			5,132,829			758,037

	￦		167,942			1,160,517			5,237,983			1,387,940

(2)

Loans and receivables as of December 31, 2014 and 2015 are as follows:


		2014
		Face value		Present value discount			Book value
		In millions of won
Short-term loans and receivables
Loans for tuition	￦		25,828		(1,067	)		24,761
Loans for housing			12,050		—			12,050
Fisheries loan			6,032		—			6,032
Other loans			25,000		—			25,000

			68,910		(1,067	)		67,843

Long-term loans and receivables
Loans for tuition			379,797		(54,569	)		325,228
Loans for housing			110,152		—			110,152
Loans for related parties			111,033		—			111,033
Fisheries loan			7,696		(887	)		6,809
Other loans			2,932		—			2,932

			611,610		(55,456	)		556,154

	￦		680,520		(56,523	)		623,997


		2015
		Face value		Present value discount			Book value
		In millions of won
Short-term loans and receivables
Loans for tuition	￦		29,209		(859	)		28,350
Loans for housing			11,170		—			11,170
Fisheries loan			6,032		—			6,032
Other loans			59,602		—			59,602

			106,013		(859	)		105,154

Long-term loans and receivables
Loans for tuition			390,738		(47,822	)		342,916
Loans for housing			132,239		—			132,239
Loans for related parties			99,768		—			99,768
Fisheries loan			1,664		(401	)		1,263
Other loans			53,717		—			53,717

			678,126		(48,223	)		629,903

	￦		784,139		(49,082	)		735,057

F-67

(3)

Long-term and short-term financial instruments as of December 31, 2014 and 2015 are as follows:


		2014				2015
		Current		Non-current		Current		Non-current
		In millions of won
Time deposits	￦		90,088		742		2,131,089		3
Asset-Backed Commercial Paper			10,011		—		2,598,791		5,000
CP			—		—		48,350		—
CD			—		—		163,649		—
MMDA			—		300,000		—		—
RP			—		303,306		—		652,700
Others			—		315		190,950		100,334

	￦		100,099		604,363		5,132,829		758,037

13.

Inventories

Inventories as of December 31, 2014 and 2015 are as follows:


		2014
		Acquisition cost		Valuation allowance			Book value
		In millions of won
Raw materials	￦		3,039,422		(1,130	)		3,038,292
Merchandises			212		—			212
Work-in-progress			93,498		—			93,498
Finished goods			59,222		—			59,222
Supplies			840,463		(2,685	)		837,778
Inventories in transit			500,466		—			500,466
Other inventories			8,001		—			8,001

	￦		4,541,284		(3,815	)		4,537,469


		2015
		Acquisition cost		Valuation allowance			Book value
		In millions of won
Raw materials	￦		3,304,220		(1,238	)		3,302,982
Work-in-progress			133,226		—			133,226
Finished goods			51,073		—			51,073
Supplies			1,062,307		(4,428	)		1,057,879
Inventories in transit			392,340		—			392,340
Other inventories			8,913		—			8,913

	￦		4,952,079		(5,666	)		4,946,413

The reversal of the allowance for loss on inventory valuation due to increases in the net realizable value of inventory deducted from cost of sales were ￦687 million and ￦3,029 million for the years ended December 31, 2013 and 2014, respectively. The allowance for loss on inventory valuation due to decreases in the net realizable value of inventory included in cost of sales was ￦533 million for the year ended December 31, 2015. The amounts of loss from inventory valuation included in other gains or losses for the years ended December 31, 2013, 2014 and 2015 were ￦261 million, ￦2,709 million and ￦1,318 million, respectively.

F-68

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 December 31, 2014 and 2015 are as follows and included in current and non-current trade and other receivables, net, in the consolidated statements of financial position:


		2014				2015
		Minimum lease payments		Present value of minimum lease payments		Minimum lease payments		Present value of minimum lease payments
		In millions of won
Less than 1 year	￦		88,698		8,275		98,488		12,098
1 ~ 5 years			378,703		237,062		407,426		203,699
More than 5 years			1,675,685		640,417		1,689,281		738,011

	￦		2,143,086		885,754		2,195,195		953,808

(3)

There are no impaired finance lease receivables as of December 31, 2014 and 2015.

15.

Non-Financial Assets

Non-financial assets as of December 31, 2014 and 2015 are as follows:


		2014				2015
		Current		Non-current		Current		Non- current
		In millions of won
Advance payment	￦		109,112		12,516		102,842		25,172
Prepaid expenses			154,047		97,972		159,378		85,105
Others (*)			239,352		23,605		135,730		20,956

	￦		502,511		134,093		397,950		131,233

(*)

Details of others as of December 31, 2014 and 2015 are as follows:


		2014				2015
		Current		Non-current		Current		Non- current
		In millions of won
Tax refund receivables	￦		182,564		1,037		39,158		2,658
Other quick assets and others			56,788		22,568		96,572		18,298

	￦		239,352		23,605		135,730		20,956

F-69

16.

Consolidated Subsidiaries

(1)

Consolidated subsidiaries as of December 31, 2014 and 2015 are as follows:

Percentage of ownership (%)

Subsidiaries

Key operation activities

Location

2014

2015

Korea Hydro & Nuclear Power Co., Ltd.

Power generation

KOREA

100.00%

Korea South-East Power Co., Ltd.

Power generation

KOREA

100.00%

Korea Midland Power Co., Ltd.

Power generation

KOREA

100.00%

Korea Western Power Co., Ltd.

Power generation

KOREA

100.00%

Korea Southern Power Co., Ltd.

Power generation

KOREA

100.00%

Korea East-West Power Co., Ltd.

Power generation

KOREA

100.00%

KEPCO Engineering & Construction Company, Inc.(*1)

Architectural engineering for utility plant and others

KOREA

66.32%

KEPCO Plant Service & Engineering Co., Ltd.

Utility plant maintenance and others

KOREA

54.00%

52.48%

KEPCO Nuclear Fuel Co., Ltd.

Nuclear fuel

KOREA

96.36%

KEPCO KDN Co., Ltd.

Electric power information

technology and others

KOREA

100.00%

Garolim Tidal Power Plant Co., Ltd.(*2)

Power generation

KOREA

49.00%

KEPCO International HongKong Ltd.

Holding company

HONG KONG

100.00%

KEPCO International Philippines Inc.

Holding company

PHILIPPINES

100.00%

KEPCO Gansu International Ltd.

Holding company

HONG KONG

100.00%

KEPCO Philippines Holdings Inc.

Holding company

PHILIPPINES

100.00%

KEPCO Philippines Corporation

Operation of utility plant

PHILIPPINES

100.00%

KEPCO Ilijan Corporation

Utility plant rehabilitation and operation

PHILIPPINES

51.00%

KEPCO Lebanon SARL

Operation of utility plant

LEBANON

100.00%

KEPCO Neimenggu International Ltd.

Holding company

HONG KONG

100.00%

KEPCO Shanxi International Ltd.

Holding company

HONG KONG

100.00%

KOMIPO Global Pte Ltd.

Holding company

SINGAPORE

100.00%

KEPCO Canada Energy Ltd.

Resources development

CANADA

100.00%

KEPCO Netherlands B.V.

Holding company

NETHERLANDS

100.00%

KOREA Imouraren Uranium Investment Corp.

Uranium mine development

FRANCE

100.00%

KEPCO Australia Pty., Ltd.

Resources development

AUSTRALIA

100.00%

KOSEP Australia Pty., Ltd.

Resources development

AUSTRALIA

100.00%

KOMIPO Australia Pty., Ltd.

Resources development

AUSTRALIA

100.00%

KOWEPO Australia Pty., Ltd.

Resources development

AUSTRALIA

100.00%

KOSPO Australia Pty., Ltd.

Resources development

AUSTRALIA

100.00%

KEPCO Middle East Holding Company

Holding company

BAHRAIN

100.00%

Qatrana Electric Power Company

Construction and operation of utility plant

JORDAN

80.00%

KHNP Canada Energy Ltd.

Resources development

CANADA

100.00%

KEPCO Bylong Australia Pty., Ltd.

Resources development

AUSTRALIA

100.00%

Korea Waterbury Uranium Limited Partnership

Resources development

CANADA

79.64%

KEPCO Canada Uranium Investment Limited Partnership

Resources development

CANADA

100.00%

Korea Electric Power Nigeria Ltd.

Operation of utility plant

NIGERIA

100.00%

KEPCO Holdings de Mexico

Holding company

MEXICO

100.00%

KST Electric Power Company

Construction and operation of utility plant

MEXICO

56.00%

KEPCO Energy Service Company

Operation of utility plant

MEXICO

100.00%

KEPCO Netherlands S3 B.V.

Holding company

NETHERLANDS

100.00%

PT. KOMIPO Pembangkitan Jawa Bali

Operation of utility plant

INDONESIA

51.00%

PT. Cirebon Power Service(*2)

Operation of utility plant

INDONESIA

27.50%

KOWEPO International Corporation

Operation of utility plant

PHILIPPINES

99.99%

KOSPO Jordan LLC

Operation of utility plant

JORDAN

100.00%

EWP Philippines Corporation

Operation of utility plant

PHILIPPINES

100.00%

EWP America Inc.

Holding company

USA

100.00%

EWP Renewable Co.

Holding company

USA

100.00%

F-70

Percentage of ownership (%)

Subsidiaries

Key operation activities

Location

2014

2015

DG Fairhaven Power, LLC

Power generation

USA

100.00%

DG Kings Plaza, LLC

Power generation

USA

100.00%

DG Whitefield, LLC

Power generation

USA

100.00%

Springfield Power, LLC

Power generation

USA

100.00%

KNF Canada Energy Limited

Resources development

CANADA

96.36%

PT KEPCO Resource Indonesia

Resources development

INDONESIA

100.00%

EWP Barbados 1 SRL

Holding company

BARBADOS

100.00%

California Power Holdings, LLC

Power generation

USA

100.00%

Gyeonggi Green Energy Co., Ltd.

Power generation

KOREA

62.01%

PT. Tanggamus Electric Power

Power generation

INDONESIA

60.00%

52.50%

Gyeongju Wind Power Co., Ltd.

Power generation

KOREA

70.00%

KOMIPO America Inc.

Holding company

USA

100.00%

Boulder Solar Power, LLC

Solar photovoltaic power generation

USA

82.14%

—

EWPRC Biomass Holdings, LLC

Holding company

USA

100.00%

KOSEP USA, INC.

Power generation

USA

100.00%

PT. EWP Indonesia

Holding company

INDONESIA

100.00%

KOWEPO America LLC

Solar photovoltaic power generation

USA

100.00%

—

KEPCO Netherlands J3 B.V.

Holding company

NETHERLANDS

100.00%

Korea Offshore Wind Power Co., Ltd.

Power generation

KOREA

100.00%

Global One Pioneer B.V.

Holding company

NETHERLANDS

100.00%

Global Energy Pioneer B.V.

Holding company

NETHERLANDS

100.00%

Mira Power Limited(*3)

Power generation

PAKISTAN

76.00%

KOSEP Material Co., Ltd.(*4)

Power generation

KOREA

46.22%

Commerce and Industry Energy Co., Ltd.

Power generation

KOREA

59.03%

KEPCO Singapore Holdings Pte., Ltd.

Holding company

SINGAPORE

100.00%

KOWEPO India Private Limited

Holding company

INDIA

100.00%

KEPCO KPS Philippines Corp.

Utility plant maintenance and others

PHILIPPINES

54.00%

52.48%

KOSPO Chile SpA

Holding company

CHILE

100.00%

PT. KOWEPO Sumsel Operation and

Maintenance Services

Utility plant maintenance and others

INDONESIA

95.00%

HeeMang Sunlight Power Co., Ltd.

Power generation

KOREA

—

100.00%

Fujeij Wind Power Company

Operation of utility plant

JORDAN

—

100.00%

KOSPO Youngnam Power Co., Ltd.

Operation of utility plant

KOREA

—

50.00%

(*1)	Considering treasury stocks, the effective percentage of ownership is 66.62%.

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

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

(*4)

According to the shareholders’ agreement reached in April 2014, Korea South-East Power Co., Ltd. (“KOSEP”) signed a contract with Long Lasting Value(“LLV”) to guarantee the principal and certain rate of return on LLV’s shares in KOSEP Material Co., Ltd. Moreover, LLV has put options to sell their investment to KOSEP. Therefore, the Company accounted for this agreement as KOSEP acquiring the shares of KOSEP Material from LLV. As such, the effective percentage of ownership is 86.20% as of December 31, 2015.

F-71

(2)

Subsidiaries newly included in or excluded from consolidation for the year ended December 31, 2015 are as follows:

(i)

Subsidiaries newly included in consolidation


Subsidiary		Reason
HeeMang Sunlight Power Co., Ltd.		Newly Established
Fujeij Wind Power Company		Newly Established
KOSPO Youngnam Power Co., Ltd.		Newly Established

(ii)

Subsidiaries excluded from consolidation


Subsidiary		Reason
Boulder Solar Power, LLC		Disposed
KOWEPO America LLC		Liquidation

(3)

Summary of financial information of consolidated subsidiaries as of and for the years ended December 31, 2014 and 2015 are as follows:


2014
Subsidiaries		Total assets		Total liabilities		Sales		Profit (loss) for the period
		In millions of won
Korea Hydro & Nuclear Power Co., Ltd.	￦		49,237,136		27,588,281		9,379,564		1,446,060
Korea South-East Power Co., Ltd.			9,026,146		5,068,092		4,469,415		383,233
Korea Midland Power Co., Ltd.			7,074,578		4,073,784		5,041,682		110,533
Korea Western Power Co., Ltd.			8,245,105		5,008,954		4,840,007		151,662
Korea Southern Power Co., Ltd.			8,703,362		5,229,934		6,209,536		68,481
Korea East-West Power Co., Ltd.			8,370,732		4,805,302		4,507,011		168,534
KEPCO Engineering & Construction Company, Inc.			777,612		370,482		841,917		54,759
KEPCO Plant Service & Engineering Co., Ltd.			922,843		226,774		1,078,526		166,847
KEPCO Nuclear Fuel Co., Ltd.			568,370		257,899		241,310		32,588
KEPCO KDN Co., Ltd.			390,681		135,341		458,960		20,228
Garolim Tidal Power Plant Co., Ltd.			772		387		—		(39,856	)
KEPCO International HongKong Ltd.			182,703		—		—		6,221
KEPCO International Philippines Inc.			101,864		405		—		98,878
KEPCO Gansu International Ltd.			16,330		506		—		(11	)
KEPCO Philippines Holdings Inc.			124,418		40		—		5,987
KEPCO Philippines Corporation			13,670		139		—		(959	)
KEPCO Ilijan Corporation			585,190		53,212		127,871		76,627
KEPCO Lebanon SARL			6,990		9,832		—		(164	)
KEPCO Neimenggu International Ltd.			182,140		—		—		(172	)
KEPCO Shanxi International Ltd.			523,357		245,170		—		1,935
KOMIPO Global Pte Ltd.			157,441		3,636		—		9,470
KEPCO Canada Energy Ltd.			69,507		113		—		(18	)
KEPCO Netherlands B.V.			189,121		14		—		367
KOREA Imouraren Uranium Investment Corp.			227,897		207		—		(48	)
KEPCO Australia Pty., Ltd.			539,961		2,572		4,532		799
KOSEP Australia Pty., Ltd.			19,771		935		4,786		2,413
KOMIPO Australia Pty., Ltd.			18,779		542		4,786		1,786
KOWEPO Australia Pty., Ltd.			19,990		1,004		4,786		2,434
KOSPO Australia Pty., Ltd.			18,983		932		4,439		2,007
KEPCO Middle East Holding Company			116,615		133,338		—		(1,470	)
Qatrana Electric Power Company			553,134		462,329		17,079		15,724
KHNP Canada Energy Ltd.			47,982		58		—		(17	)
KEPCO Bylong Australia Pty., Ltd.			169,209		200,443		—		(20,958	)
Korea Waterbury Uranium Limited Partnership			22,058		35		—		(59	)
KEPCO Canada Uranium Investment Limited Partnership			70,778		25		—		(30	)
Korea Electric Power Nigeria Ltd.			1,112		786		23,863		204
KEPCO Holdings de Mexico			11		21		—		(12	)

F-72


2014
Subsidiaries		Total assets		Total liabilities		Sales		Profit (loss) for the period
		In millions of won
KST Electric Power Company	￦		512,793		496,780		16,668		13,496
KEPCO Energy Service Company			374		535		5,032		40
KEPCO Netherlands S3 B.V.			62,583		30		—		812
PT. KOMIPO Pembangkitan Jawa Bali			17,282		6,034		21,276		8,929
PT. Cirebon Power Service			1,630		402		6,694		354
KOWEPO International Corporation			—		—		—		(1,861	)
KOSPO Jordan, LLC.			10,270		1,742		29,682		2,512
EWP Philippines Corporation			6,570		283		—		(848	)
EWP America Inc. (*)			104,855		76,669		57,251		(21	)
KNF Canada Energy Limited			2,118		48		—		(65	)
PT KEPCO Resource Indonesia			1,366		13		—		(267	)
EWP Barbados 1 SRL			296,278		162		2,633		322
Gyeonggi Green Energy Co., Ltd.			334,074		264,278		124,181		(4,989	)
PT. Tanggamus Electric Power			24,120		8,339		20,089		(3,125	)
Gyeongju Wind Power Co., Ltd.			48,570		30,225		7,871		2,590
KOMIPO America Inc.			10,118		7		—		—
Boulder Solar Power, LLC.			8,457		7		—		(712	)
KOSEP USA, INC.			35,062		1,581		2,315		(119	)
PT. EWP Indonesia			902		15		—		(278	)
KOWEPO America, LLC.			5,813		137		—		(1,006	)
KEPCO Netherlands J3 B.V.			113,818		44		—		(61	)
Korea Offshore Wind Power Co., Ltd.			11,762		2,287		—		(3,424	)
Global One Pioneer B.V.			40		24		—		(60	)
Global Energy Pioneer B.V.			42		29		—		(64	)
Mira Power Limited			32,977		221		—		(1,109	)
KOSEP Material Co., Ltd.			42,766		23,226		—		(2,463	)
Commerce and Industry Energy Co., Ltd.			103,346		87,047		23,645		(881	)
KEPCO Singapore Holdings Pte., Ltd.			1,012		—		—		(20	)
KOWEPO India Private Limited			997		11		—		(397	)
KEPCO KPS Philippines Corp.			5,147		2,150		9,263		1,912
KOSPO Chile SpA			3,143		4,354		—		(1,640	)
PT. KOWEPO Sumsel Operation and Maintenance Services			1,628		1,386		—		(408	)

(*)

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


2015
Subsidiaries		Total assets		Total liabilities		Sales		Profit (loss) for the period
		In millions of won
Korea Hydro & Nuclear Power Co., Ltd.	￦		51,043,890		27,386,113		10,642,352		2,465,244
Korea South-East Power Co., Ltd.			9,326,835		4,859,827		4,961,711		601,204
Korea Midland Power Co., Ltd.			7,857,199		4,648,144		3,927,443		226,244
Korea Western Power Co., Ltd.			9,225,791		5,719,032		4,214,540		294,617
Korea Southern Power Co., Ltd.			9,216,084		5,525,865		4,317,995		224,757
Korea East-West Power Co., Ltd.			8,828,603		4,836,904		4,047,655		454,942
KEPCO Engineering & Construction Company, Inc.			855,156		438,371		657,603		31,047

F-73


2015
Subsidiaries		Total assets		Total liabilities		Sales		Profit (loss) for the period
		In millions of won
KEPCO Plant Service & Engineering Co., Ltd.	￦		1,029,304		246,342		1,171,082		168,632
KEPCO Nuclear Fuel Co., Ltd.			666,677		328,364		253,524		35,115
KEPCO KDN Co., Ltd.			439,725		159,275		451,678		33,578
Garolim Tidal Power Plant Co., Ltd.			655		346		—		(76	)
KEPCO International HongKong Ltd.			172,686		18		—		4,993
KEPCO International Philippines Inc.			115,594		1,542		—		38,541
KEPCO Gansu International Ltd.			17,405		540		—		(6	)
KEPCO Philippines Holdings Inc.			132,094		26		—		24,690
KEPCO Philippines Corporation			13,998		218		—		265
KEPCO Ilijan Corporation			603,865		58,572		126,234		54,596
KEPCO Lebanon SARL			741		10,182		—		(1,541	)
KEPCO Neimenggu International Ltd.			184,860		348		—		8,027
KEPCO Shanxi International Ltd.			562,652		242,270		—		22,949
KOMIPO Global Pte Ltd.			187,885		29		—		16,572
KEPCO Canada Energy Ltd.			55,945		23		—		(64	)
KEPCO Netherlands B.V.			169,496		61		—		1,409
KOREA Imouraren Uranium Investment Corp.			224,499		263		—		5,964
KEPCO Australia Pty., Ltd.			510,892		2,541		4,510		168
KOSEP Australia Pty., Ltd.			18,180		1,581		4,729		346
KOMIPO Australia Pty., Ltd.			17,397		559		4,729		349
KOWEPO Australia Pty., Ltd.			18,320		1,578		4,729		353
KOSPO Australia Pty., Ltd.			18,358		1,567		4,729		356
KEPCO Middle East Holding Company			147,618		150,798		—		14,142
Qatrana Electric Power Company			521,206		412,587		17,844		31,767
KHNP Canada Energy Ltd.			42,731		22		—		(123	)
KEPCO Bylong Australia Pty., Ltd.			183,468		236,545		—		(23,352	)
Korea Waterbury Uranium Limited Partnership			20,370		699		—		(48	)
KEPCO Canada Uranium Investment Limited Partnership			38,804		14		—		(26,171	)
Korea Electric Power Nigeria Ltd.			1,721		1,179		55,768		309
KEPCO Holdings de Mexico			39		34		—		(13	)
KST Electric Power Company			564,358		529,439		97,879		14,631
KEPCO Energy Service Company			1,435		604		6,034		875
KEPCO Netherlands S3 B.V.			66,251		189		—		716
PT. KOMIPO Pembangkitan Jawa Bali			16,536		6,170		20,143		8,047
PT. Cirebon Power Service			2,795		1,010		6,663		459
KOWEPO International Corporation			—		—		—		—
KOSPO Jordan LLC			12,998		1,117		9,840		2,693
EWP Philippines Corporation			2,664		1,592		—		258
EWP America Inc. (*)			115,562		82,167		59,124		3,227
KNF Canada Energy Limited			1,874		18		—		(66	)
PT KEPCO Resource Indonesia			1,210		—		—		(217	)
EWP Barbados 1 SRL			260,638		370		2,829		273
Gyeonggi Green Energy Co., Ltd.			315,299		249,608		104,674		(4,111	)
PT. Tanggamus Electric Power			106,892		91,416		60,044		(7,138	)
Gyeongju Wind Power Co., Ltd.			62,600		27,822		5,993		968
KOMIPO America Inc.			13,487		2,480		—		218
KOSEP USA, INC.			40,035		4,178		4,975		153
PT. EWP Indonesia			1,039		15		—		(374	)
KEPCO Netherlands J3 B.V.			121,492		81		—		18,858
Korea Offshore Wind Power Co., Ltd.			7,579		2,317		—		(4,213	)
Global One Pioneer B.V.			40		20		—		(48	)

F-74


2015
Subsidiaries		Total assets		Total liabilities		Sales		Profit (loss) for the period
		In millions of won
Global Energy Pioneer B.V.	￦		42		20		—		(48	)
Mira Power Limited			110,918		66,963		—		(1,581	)
KOSEP Material Co., Ltd.			29,768		28,013		26,310		(17,665	)
Commerce and Industry Energy Co., Ltd.			99,638		86,727		24,774		(3,387	)
KEPCO Singapore Holdings Pte., Ltd.			1,817		—		—		(9	)
KOWEPO India Private Limited			911		10		—		(105	)
KEPCO KPS Philippines Corp.			5,688		953		14,278		1,677
KOSPO Chile SpA			133		4,642		—		(942	)
PT. KOWEPO Sumsel Operation and Maintenance Services			2,053		51		5,405		1,762
HeeMang Sunlight Power Co., Ltd.			4,711		—		—		(9	)
Fujeij Wind Power Company			83		—		—		—
KOSPO Youngnam Power Co., Ltd.			82,173		32,166		—		7

(*)

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

(4)

Significant restrictions on abilities to subsidiaries are as follows:


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

KOSPO Youngnam Power Co., Ltd.		Dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained. Shares cannot be wholly or partially transferred without written consent of financial institutions.

F-75

(5)

Details of non-controlling interest prior to intra-group eliminations as of and for the years ended December 31,

2014 and 2015 are as follows:


2014
Description		KEPCO Ilijan Corporation			KEPCO Plant Service & Engineering Co., Ltd.			KEPCO Engineering & Construction Company, Inc.			Garolim Tidal Power Plant Co., Ltd.			Others			Total
		In millions of won
Percentage of ownership			49.00	%		46.00	%		33.37	%		51.00	%
Current assets	￦		143,229			461,750			355,292			729			605,778			1,566,778
Non-current assets			441,961			461,093			422,320			43			2,301,291			3,626,708
Current liabilities			(19,022	)		(181,871	)		(315,766	)		(387	)		(391,393	)		(908,439	)
Non-current liabilities			(34,190	)		(44,903	)		(54,716	)		—			(1,765,520	)		(1,899,329	)
Net assets			531,978			696,069			407,130			385			750,156			2,385,718
Book value of non-controlling interest			260,669			320,192			135,859			197			616,443			1,333,360
Sales			127,871			1,078,526			841,917			—			531,983			2,580,297
Profit (loss) for the period			76,627			166,847			54,759			(39,856	)		54,875			313,252
Profit (loss) for the period attributable to non-controlling interest			37,547			61,734			15,853			(20,326	)		24,014			118,822
Cash flows from operating activities			111,248			183,865			16,226			(4,818	)		53,990			360,511
Cash flows from investing activities			(3,221	)		(70,186	)		(14,066	)		(1,454	)		(64,720	)		(153,647	)
Cash flows from financing activities before dividends to non-controlling interest			(116,956	)		(43,092	)		(19,258	)		—			35,825			(143,481	)
Dividends to non-controlling interest			(96,533	)		(25,308	)		(4,905	)		—			(4,224	)		(130,970	)
Effect of exchange rate fluctuation			2,456			70			(147	)		69			5,858			8,306
Net increase (decrease) of cash and cash equivalents			(103,006	)		45,349			(22,150	)		(6,203	)		26,729			(59,281	)


2015
Description		KEPCO Ilijan Corporation			KEPCO Plant Service & Engineering Co., Ltd.			KEPCO Engineering & Construction Company, Inc.			Others			Total
		In millions of won
Percentage of ownership			49.00	%		47.52	%		33.37	%
Current assets	￦		161,855			547,152			341,559			631,442			1,682,008
Non-current assets			442,010			482,152			513,597			1,976,302			3,414,061
Current liabilities			(22,522	)		(195,030	)		(342,315	)		(296,152	)		(856,019	)
Non-current liabilities			(36,050	)		(51,312	)		(96,056	)		(1,566,200	)		(1,749,618	)
Net assets			545,293			782,962			416,785			745,392			2,490,432
Book value of non-controlling interest			267,194			372,064			139,081			644,787			1,423,126
Sales			126,234			1,171,082			657,603			637,544			2,592,463
Profit for the period			54,596			168,632			31,047			61,554			315,829
Profit for the period attributable to non-controlling interest			26,752			78,852			10,360			11,802			127,766
Cash flows from operating activities			83,697			140,625			11,280			(29,888	)		205,714
Cash flows from investing activities			(16,021	)		(104,477	)		(134,874	)		(178,241	)		(433,613	)
Cash flows from financing activities before dividends to non-controlling interest			(39,730	)		(40,581	)		69,955			226,976			216,620
Dividends to non-controlling interest			(36,080	)		(34,569	)		(7,300	)		(24,577	)		(102,526	)
Effect of exchange rate fluctuation			4,123			3			(51	)		6,399			10,474
Net increase (decrease) of cash and cash equivalents			(4,011	)		(38,999	)		(60,990	)		669			(103,331	)

F-76

(6)

Changes in goodwill

(i)

Details of goodwill as of December 31, 2014 and 2015 are as follows:


		2014		2015
		In millions of won
Acquisition cost	￦		2,582		2,582
Accumulated impairment			—		—

Carrying book value	￦		2,582		2,582

(ii)

There are no changes in goodwill for the years ended December 31, 2014 and 2015

(7)

Disposals of subsidiaries

The Company disposed the shares of Boulder Solar Power, LLC and liquidated KOWEPO America LLC during the year ended December 31, 2015. The Company also disposed the shares of Korea Engineering & Power Services Co., Ltd. and liquidated EWP Philippine Holdings Corporation during the year ended December 31, 2014.

(i)

The fair value of sales price as of December 31, 2014 and 2015 are as follows:


		2014		2015
		In millions of won
Consideration received in cash	￦		46,476		10,664
Deferred consideration on disposals included in other receivables			—		13,860

Total	￦		46,476		24,524

(ii)

The carrying value of assets and liabilities of subsidiaries as at the date the Company lost its control during the years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Current assets
Cash and cash equivalents	￦		2,187			10,071
Current financial assets, net			4,781			1,077
Trade and other receivables, net			5,460			—
Current non-financial assets			232			—

Non-current assets
Non-current financial assets, net			144			—
Non-current trade and other receivables, net			351			—
Property, plant and equipment, net			934			2,460
Other			50			2,893

Current liabilities
Trade and other payables, net			(1,655	)		—
Current non-financial liabilities			(161	)		(7	)

	￦		12,323			16,494

F-77

(iii)

Gain from disposals of subsidiaries for the years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
The fair value of sale price	￦		46,476			24,524
Net assets disposed			(12,323	)		(16,494	)
Non-controlling interests			5,765			—
Realization of unrealized gain			534			—
Other comprehensive income (loss) (*1)			(20	)		346

Gain from disposals of subsidiaries (*2)	￦		40,432			8,376

(*1)	This represents the amount reclassified from other comprehensive income or loss to profit or loss when the Company lost its control of the subsidiaries.

(*2)	Gain from disposals of subsidiaries is included in the consolidated statements of comprehensive income.

(iv)

Net cash flow from sales of subsidiaries for the years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Consideration received in cash	￦		46,476			10,664
Less: Cash in disposed subsidiaries			(2,187	)		(10,071	)

Net cash flow	￦		44,289			593

(8)

Cash dividends received from subsidiaries for the years ended December 31, 2013, 2014 and 2015 respectively are as follows:


Subsidiaries		2013		2014		2015
		In millions of won
Korea Hydro & Nuclear Power Co., Ltd.	￦		63,035		—		446,399
Korea South-East Power Co., Ltd.			89,569		34,800		57,485
Korea Midland Power Co., Ltd.			66,153		12,244		16,580
Korea Western Power Co., Ltd.			59,160		32,048		22,749
Korea Southern Power Co., Ltd.			51,680		30,800		10,272
Korea East-West Power Co., Ltd.			82,200		8,100		25,280
KEPCO Engineering & Construction Company, Inc.			55,280		10,996		14,574
KEPCO Plant Service & Engineering Co., Ltd.			45,363		43,095		40,584
KEPCO Nuclear Fuel Co., Ltd.			16,346		5,936		6,280
KEPCO KDN Co., Ltd.			2,043		3,424		4,046
Korea Engineering & Power Services Co., Ltd.			1,458		1,573		—
KEPCO International HongKong Ltd.			12,132		74,927		25,826
KEPCO International Philippines Inc.			—		100,122		32,891
KEPCO Philippines Corporation			1,986		—		—
KEPCO Ilijan Corporation			—		101,647		38,128
KEPCO Philippines Holdings Inc.			6,678		2,811		19,221
KEPCO Neimenggu International Ltd.			3,629		6,308		25,338
KEPCO Netherlands B.V.			8,923		—		—
Qatrana Electric Power Company			—		—		16,857
KOSPO Jordan LLC			129		446		—
EWP Philippines Corporation			—		—		5,586
KEPCO Netherlands S3 B.V.			—		—		1,382
PT. KOMIPO Pembangkitan Jawa Bali			1,663		2,827		3,169
KEPCO Netherlands J3 B.V.			—		—		19,254
Gyeongju Wind Power Co., Ltd.			—		651		1,294

	￦		567,427		472,755		833,195

F-78

17.

Investments in Associates and Joint Ventures

(1)

Investments in associates and joint ventures as of December 31, 2014 and 2015 are as follows:


2014
Investees	Key operation activities		Location		Percentage of ownership				Acquisition cost		Book value
									In millions of won
<Associates>
Daegu Green Power Co., Ltd.		Power generation		KOREA		47.80	%	￦		76,193		71,387
Korea Gas Corporation(*1)		Importing and wholesaling LNG		KOREA		20.47	%			94,500		2,097,539
Korea Electric Power Industrial Development Co., Ltd.		Electricity metering		KOREA		29.00	%			4,727		21,622
YTN Co., Ltd.		Broadcasting		KOREA		21.43	%			59,000		39,889
Cheongna Energy Co., Ltd.		Generating and distributing vapor and hot/cold water		KOREA		43.90	%			49,607		28,771
Gangwon Wind Power Co., Ltd.(*2)		Wind power generation		KOREA		15.00	%			5,725		12,385
Hyundai Green Power Co., Ltd.		Power generation		KOREA		29.00	%			88,885		113,033
Korea Power Exchange(*6)		Management of power market		KOREA		100.00	%			127,839		198,021
AMEC Partners Korea Ltd.(*3)		Resources management		KOREA		19.00	%			707		200
Hyundai Energy Co., Ltd.(*9)		Power generation		KOREA		29.00	%			71,070		35,925
Ecollite Co., Ltd.		Artificial light-weight aggregate		KOREA		36.10	%			1,516		—
Taebaek Wind Power Co., Ltd.		Power generation		KOREA		25.00	%			3,810		5,525
Muju Wind Power Co., Ltd.		Power generation		KOREA		25.00	%			2,850		2,706
Pyeongchang Wind Power Co., Ltd.		Power generation		KOREA		25.00	%			3,876		3,693
Daeryun Power Co., Ltd.(*3, 10)		Power generation		KOREA		13.13	%			25,477		41,951
JinanJangsu Wind Power Co., Ltd.		Power generation		KOREA		25.00	%			100		77
Changjuk Wind Power Co., Ltd.		Power generation		KOREA		30.00	%			3,801		6,486
KNH Solar Co., Ltd.		Power generation		KOREA		27.00	%			1,296		1,744
SPC Power Corporation		Power generation		PHILIPPINES		38.00	%			20,635		47,799
Gemeng International Energy Co., Ltd.		Power generation		CHINA		34.00	%			413,153		667,578
PT. Cirebon Electric Power		Power generation		INDONESIA		27.50	%			40,365		43,335
KNOC Nigerian East Oil Co., Ltd.(*4)		Resources development		NIGERIA		14.63	%			12		—
KNOC Nigerian West Oil Co., Ltd.(*4)		Resources development		NIGERIA		14.63	%			12		—
Dolphin Property Limited(*4)		Rental company		NIGERIA		15.00	%			12		61
PT Wampu Electric Power		Power generation		INDONESIA		46.00	%			18,935		16,071
PT. Bayan Resources TBK		Resources development		INDONESIA		20.00	%			615,860		540,011
S-Power Co., Ltd.		Power generation		KOREA		40.00	%			108,000		104,244
Pioneer Gas Power Limited(*8)		Power generation		INDIA		40.00	%			49,831		50,668
Eurasia Energy Holdings		Power generation and resources development		RUSSIA		40.00	%			461		—
Xe-Pian Xe-Namnoy Power Co., Ltd.		Power generation		LAOS		25.00	%			23,474		22,152
Busan Solar Co., Ltd.(*3)		Power generation		KOREA		19.80	%			793		853
Hadong Mineral Fiber Co., Ltd.		Recycling fly ashes		KOREA		25.00	%			50		3
Green Biomass Co., Ltd.		Power generation		KOREA		34.00	%			714		—
PT. Mutiara Jawa		Manufacturing and operating floating coal terminal		INDONESIA		29.00	%			2,978		818
Samcheok Eco Material Co., Ltd.(*3, 11)		Recycling fly ashes		KOREA		2.67	%			686		212
Noeul Green Energy Co., Ltd.		Power generation		KOREA		20.00	%			200		189
Naepo Green Energy Co., Ltd.		Power generation		KOREA		25.00	%			29,200		28,064
Goseong Green Energy Co., Ltd.(*2)		Power generation		KOREA		9.67	%			2,900		2,586
Gangneung Eco Power Co., Ltd.(*2)		Power generation		KOREA		6.04	%			2,900		2,783
Shin Pyeongtaek Power Co., Ltd.		Power generation		KOREA		40.00	%			40		—
Heang Bok Do Si Photovoltaic Power Co., Ltd.		Power generation		KOREA		28.00	%			193		221
DS POWER Co., Ltd.(*2)		Power generation		KOREA		10.91	%			17,900		15,642
Dongducheon Dream Power Co., Ltd.		Power generation		KOREA		33.61	%			107,958		100,545
KS Solar Corp. Ltd.(*3)		Power generation		KOREA		19.00	%			637		325
Yeongwol Energy Station Co., Ltd.(*2)		Power generation		KOREA		10.00	%			1,400		1,741
Jinbhuvish Power Generation Pvt. Ltd.(*2)		Power generation		INDIA		5.16	%			9,000		8,344
SE Green Energy Co., Ltd.		Power generation support		KOREA		47.76	%			3,821		3,623
Daegu Photovoltaic Co., Ltd.		Power generation		KOREA		29.00	%			1,230		1,581
Jeongam Wind Power Co., Ltd.		Power generation		KOREA		40.00	%			800		93
Korea Power Engineering Service Co., Ltd.		Construction and service		KOREA		29.00	%			290		1,334

										2,095,419		4,341,830

F-79


2014
Investees	Key operation activities		Location		Percentage of ownership				Acquisition cost		Book value
									In millions of won
<Joint ventures>
KEPCO-Uhde Inc.(*7)		Power generation		KOREA		66.00	%	￦		11,355		9,042
Eco Biomass Energy Sdn. Bhd.(*7)		Power generation		MALAYSIA		61.53	%			9,661		—
Datang Chaoyang Renewable Power Co., Ltd.		Power generation		CHINA		40.00	%			27,660		27,514
Shuweihat Asia Power Investment B.V.		Holding company		NETHERLANDS		49.00	%			60,083		16,241
Shuweihat Asia Operation & Maintenance Company(*7)		Maintenance of utility plant		CAYMAN		55.00	%			30		345
Waterbury Lake Uranium L.P.		Resources development		CANADA		40.00	%			26,601		22,010
ASM-BG Investicii AD		Power generation		BULGARIA		50.00	%			16,101		19,608
RES Technology AD		Power generation		BULGARIA		50.00	%			15,595		14,725
KV Holdings, Inc.		Power generation		PHILIPPINES		40.00	%			2,103		1,902
KEPCO SPC Power Corporation(*7)		Construction and operation of utility plant		PHILIPPINES		75.20	%			94,579		190,519
Canada Korea Uranium Limited Partnership(*5)		Resources development		CANADA		12.50	%			5,404		—
KEPCO Energy Resource Nigeria Limited		Holding company		NIGERIA		30.00	%			8,463		—
Gansu Datang Yumen Wind Power Co., Ltd.		Power generation		CHINA		40.00	%			16,621		17,467
Datang Chifeng Renewable Power Co., Ltd.		Power generation		CHINA		40.00	%			121,928		169,496
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		Power generation		CHINA		40.00	%			10,858		10,539
Rabigh Electricity Company		Power generation		SAUDI ARABIA		40.00	%			109,743		8,121
Rabigh Operation & Maintenance Company		Maintenance of utility plant		SAUDI ARABIA		40.00	%			70		4,628
Jamaica Public Service Company Limited		Power generation		JAMAICA		40.00	%			301,910		226,892
KW Nuclear Components Co., Ltd.		R&D		KOREA		43.36	%			833		2,899
Busan Shinho Solar Power Co., Ltd.		Power generation		KOREA		25.00	%			2,100		3,284
GS Donghae Electric Power Co., Ltd.		Power generation		KOREA		34.00	%			204,000		201,409
Global Trade Of Power System Co., Ltd.		Exporting products and technology of small or medium business by proxy		KOREA		29.00	%			290		343
Expressway Solar-light Power Generation Co., Ltd.		Power generation		KOREA		29.00	%			1,856		2,087
KODE NOVUS 1 LLC.		Power generation		USA		50.00	%			19,213		12,207
KODE NOVUS 2 LLC.		Power generation		USA		49.00	%			12,498		8,248
Daejung Offshore Wind Power Co., Ltd.		Power generation		KOREA		49.90	%			4,990		3,711
Amman Asia Electric Power Company(*7)		Power generation		JORDAN		60.00	%			111,476		122,391
KEPCO-ALSTOM Power Electronics Systems, Inc.(*7)		R&D		KOREA		51.00	%			5,629		4,617
Dangjin Echo Power Co., Ltd.		Power generation		KOREA		33.10	%			40,000		37,837
Honam Wind Power Co., Ltd.		Power generation		KOREA		29.00	%			3,600		3,555
Nepal Water & Energy Development Company Pty Ltd.(*7)		Construction and operation of utility plant		NEPAL		59.61	%			18,568		17,872
Chun-cheon Energy Co., Ltd.		Power generation		KOREA		29.90	%			15		—
Yeonggwangbaeksu Wind Power Co., Ltd.(*3)		Power generation		KOREA		15.00	%			3,000		2,962
Nghi Son 2 Power Ltd.		Power generation		VIETNAM		50.00	%			350		102
Kelar S.A(*7)		Power generation		CHILE		65.00	%			4,180		3,156
PT. Tanjung Power Indonesia		Power generation		INDONESIA		35.00	%			747		700
Incheon New Power Co., Ltd.		Power generation		KOREA		29.00	%			461		465
Seokmun Energy Co., Ltd.		Integrated energy business		KOREA		34.00	%			680		—

										1,273,251		1,166,894

								￦		3,368,670		5,508,724

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

(*2)	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.

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

F-80

(*4)	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, which can affect its influence on the entity.

(*5)	The Company has joint control over 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.

(*6)

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.

(*7)	According to the shareholders’ 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.

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

(*9)

As of December 31, 2014, 17.3% 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 46.3% of ownership.

(*10)

The Company’s percentage of ownership has decreased due to the acquisitions of Daeryun Power Co., Ltd. and the effective percentage of ownership is 19.45% considering stock purchase options.

(*11)

The Company’s effective percentage of ownership excluding the redeemable convertible preferred stock is 25.54%.


2015
Investees	Key operation activities	Location	Percentage of ownership				Acquisition cost		Book value
							In millions of won
<Associates>
Daegu Green Power Co., Ltd.	Power generation	KOREA		47.80	%	￦		76,193		80,267
Korea Gas Corporation(*1)	Importing and wholesaling LNG	KOREA		20.47	%			94,500		2,102,813
Korea Electric Power Industrial Development Co., Ltd.	Electricity metering	KOREA		29.00	%			4,727		18,994
YTN Co., Ltd.	Broadcasting	KOREA		21.43	%			59,000		38,365
Cheongna Energy Co., Ltd.	Generating and distributing vapor and hot/cold water	KOREA		43.90	%			49,607		19,490
Gangwon Wind Power Co., Ltd.(*2)	Power generation	KOREA		15.00	%			5,725		12,890
Hyundai Green Power Co., Ltd.	Power generation	KOREA		29.00	%			88,885		113,664
Korea Power Exchange(*6)	Management of power market	KOREA		100.00	%			127,839		208,735
AMEC Partners Korea Ltd.(*3)	Resources management	KOREA		19.00	%			707		230
Hyundai Energy Co., Ltd.(*9)	Power generation	KOREA		29.00	%			71,070		6,990
Ecollite Co., Ltd.	Artificial light-weight aggregate	KOREA		36.10	%			1,516		—
Taebaek Wind Power Co., Ltd.	Power generation	KOREA		25.00	%			3,810		4,956
Muju Wind Power Co., Ltd.	Power generation	KOREA		25.00	%			2,850		2,587
Pyeongchang Wind Power Co., Ltd.	Power generation	KOREA		25.00	%			3,875		3,402
Daeryun Power Co., Ltd.(*3, 10)	Power generation	KOREA		13.13	%			25,477		36,156
JinanJangsu Wind Power Co., Ltd.	Power generation	KOREA		25.00	%			100		77
Changjuk Wind Power Co., Ltd.	Power generation	KOREA		30.00	%			3,801		6,143
KNH Solar Co., Ltd.	Power generation	KOREA		27.00	%			1,296		1,924
SPC Power Corporation	Power generation	PHILIPPINES		38.00	%			20,635		58,033
Gemeng International Energy Co., Ltd.	Power generation	CHINA		34.00	%			413,153		728,396
PT. Cirebon Electric Power	Power generation	INDONESIA		27.50	%			40,365		60,574
KNOC Nigerian East Oil Co., Ltd.(*4)	Resources development	NIGERIA		14.63	%			12		—
KNOC Nigerian West Oil Co., Ltd.(*4)	Resources development	NIGERIA		14.63	%			12		—
Dolphin Property Limited(*4)	Rental company	NIGERIA		15.00	%			12		61
PT Wampu Electric Power	Power generation	INDONESIA		46.00	%			21,292		18,963
PT. Bayan Resources TBK	Resources development	INDONESIA		20.00	%			615,860		525,066

F-81


2015
Investees	Key operation activities	Location	Percentage of ownership				Acquisition cost		Book value
							In millions of won
S-Power Co., Ltd.	Power generation	KOREA		49.00	%	￦		132,300		130,908
Pioneer Gas Power Limited(*8)	Power generation	INDIA		40.00	%			49,831		51,187
Eurasia Energy Holdings	Power generation and resources development	RUSSIA		40.00	%			461		—
Xe-Pian Xe-Namnoy Power Co., Ltd.	Power generation	LAOS		25.00	%			32,717		31,863
Busan Solar Co., Ltd.(*3)	Power generation	KOREA		19.80	%			793		925
Hadong Mineral Fiber Co., Ltd.	Recycling fly ashes	KOREA		25.00	%			50		—
Green Biomass Co., Ltd.(*12)	Power generation	KOREA		14.00	%			714		—
PT. Mutiara Jawa	Manufacturing and operating floating coal terminal	INDONESIA		29.00	%			2,978		—
Samcheok Eco Material Co., Ltd.(*3, 11)	Recycling fly ashes	KOREA		2.67	%			686		—
Noeul Green Energy Co., Ltd.	Power generation	KOREA		20.00	%			400		295
Naepo Green Energy Co., Ltd.	Power generation	KOREA		25.00	%			29,200		26,746
Goseong Green Energy Co., Ltd.(*2)	Power generation	KOREA		2.90	%			2,900		2,670
Gangneung Eco Power Co., Ltd.(*2)	Power generation	KOREA		3.72	%			2,900		2,688
Shin Pyeongtaek Power Co., Ltd.	Power generation	KOREA		40.00	%			40		—
Heang Bok Do Si Photovoltaic Power Co., Ltd.	Power generation	KOREA		28.00	%			194		189
DS POWER Co., Ltd.(*2)	Power generation	KOREA		10.91	%			17,900		10,960
Dongducheon Dream Power Co., Ltd.	Power generation	KOREA		33.61	%			107,958		55,667
KS Solar Corp. Ltd.(*3)	Power generation	KOREA		19.00	%			637		618
Yeongwol Energy Station Co., Ltd.(*2)	Power generation	KOREA		10.00	%			1,400		1,290
Jinbhuvish Power Generation Pvt. Ltd.(*2)	Power generation	INDIA		5.16	%			9,000		8,350
SE Green Energy Co., Ltd.	Power generation support	KOREA		47.76	%			3,821		3,575
Daegu Photovoltaic Co., Ltd.	Power generation	KOREA		29.00	%			1,230		1,886
Jeongam Wind Power Co., Ltd.	Power generation	KOREA		40.00	%			1,680		702
Korea Power Engineering Service Co., Ltd.	Construction and service	KOREA		29.00	%			290		1,805
Busan Green Energy Co., Ltd.	Power generation	KOREA		29.00	%			14,564		14,512
Jungbu Bio Energy Co., Ltd.(*2)	Power generation	KOREA		18.87	%			1,000		904
Korea Electric Vehicle Charging Service	Electric vehicle charge service	KOREA		28.00	%			1,596		1,446
Ulleungdo Natural Energy Co., Ltd.	Renewable power generation	KOREA		29.85	%			8,000		7,417
Korea Nuclear Partners Co., Ltd.	Electric material agency	KOREA		29.00	%			290		289

								2,157,849		4,405,668

<Joint ventures>
KEPCO-Uhde Inc.(*7)	Power generation	KOREA		52.80	%			11,355		8,549
Eco Biomass Energy Sdn. Bhd.(*7)	Power generation	MALAYSIA		61.53	%			9,661		—
Datang Chaoyang Renewable Power Co., Ltd.	Power generation	CHINA		40.00	%			27,660		27,640
Shuweihat Asia Power Investment B.V.	Holding company	NETHERLANDS		49.00	%			60,191		20,474
Shuweihat Asia Operation & Maintenance Company(*7)	Maintenance of utility plant	CAYMAN		55.00	%			30		486
Waterbury Lake Uranium L.P.	Resources development	CANADA		40.00	%			26,602		20,299
ASM-BG Investicii AD	Power generation	BULGARIA		50.00	%			16,101		20,203
RES Technology AD	Power generation	BULGARIA		50.00	%			15,595		13,789
KV Holdings, Inc.	Power generation	PHILIPPINES		40.00	%			2,103		2,010
KEPCO SPC Power Corporation(*7)	Construction and operation of utility plant	PHILIPPINES		75.20	%			94,579		208,524
Canada Korea Uranium Limited Partnership(*5)	Resources development	CANADA		12.50	%			5,404		—
KEPCO Energy Resource Nigeria Limited	Holding company	NIGERIA		30.00	%			8,463		—
Gansu Datang Yumen Wind Power Co., Ltd.	Power generation	CHINA		40.00	%			16,621		16,107
Datang Chifeng Renewable Power Co., Ltd.	Power generation	CHINA		40.00	%			121,928		171,224
Datang KEPCO Chaoyang Renewable Power Co., Ltd.	Power generation	CHINA		40.00	%			10,858		10,580
Rabigh Electricity Company	Power generation	SAUDI ARABIA		40.00	%			109,743		59,368
Rabigh Operation & Maintenance Company	Maintenance of utility plant	SAUDI ARABIA		40.00	%			70		3,586
Jamaica Public Service Company Limited	Power generation	JAMAICA		40.00	%			301,910		241,918
KW Nuclear Components Co., Ltd.	R&D	KOREA		43.36	%			833		4,985
Busan Shinho Solar Power Co., Ltd.	Power generation	KOREA		25.00	%			2,100		3,678
GS Donghae Electric Power Co., Ltd.	Power generation	KOREA		34.00	%			204,000		200,379
Global Trade Of Power System Co., Ltd.	Exporting products and technology of small or medium business by proxy	KOREA		29.00	%			290		426
Expressway Solar-light Power Generation Co., Ltd.	Power generation	KOREA		29.00	%			1,856		2,100
KODE NOVUS 1 LLC	Power generation	USA		50.00	%			19,213		—

F-82


2015
Investees	Key operation activities	Location	Percentage of ownership				Acquisition cost		Book value
							In millions of won
KODE NOVUS 2 LLC	Power generation	USA		49.00	%	￦		12,498		—
Daejung Offshore Wind Power Co., Ltd.	Power generation	KOREA		49.90	%			4,990		3,352
Amman Asia Electric Power Company(*7)	Power generation	JORDAN		60.00	%			111,476		137,668
KEPCO-ALSTOM Power Electronics Systems, Inc.(*7)	R&D	KOREA		51.00	%			5,629		4,501
Dangjin Echo Power Co., Ltd.	Power generation	KOREA		34.00	%			51,149		48,281
Honam Wind Power Co., Ltd.	Power generation	KOREA		29.00	%			3,600		3,926
Nepal Water & Energy Development Company Pty Ltd.(*7)	Construction and operation of utility plant	NEPAL		52.77	%			18,568		17,765
Chun-cheon Energy Co., Ltd.	Power generation	KOREA		29.90	%			32,868		31,976
Yeonggwangbaeksu Wind Power Co., Ltd.(*3)	Power generation	KOREA		15.00	%			3,000		2,668
Nghi Son 2 Power Ltd.	Power generation	VIETNAM		50.00	%			1,072		269
Kelar S.A(*7)	Power generation	CHILE		65.00	%			4,180		—
PT. Tanjung Power Indonesia	Power generation	INDONESIA		35.00	%			746		617
Incheon New Power Co., Ltd.	Power generation	KOREA		29.00	%			461		514
Seokmun Energy Co., Ltd.	Integrated energy business	KOREA		29.00	%			580		—

								1,317,983		1,287,862

						￦		3,475,832		5,693,530

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

(*2)	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.

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

(*4)	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, which can affect its influence on the entity.

(*5)	The Company has joint control over the entity 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.

(*6)

(*7)	According to the shareholders’ 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.

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

(*9)

As of December 31, 2015, 17.3% 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 46.30% of ownership.

(*10)

The effective percentage of ownership is 19.45% considering stock purchase options.

(*11)

The Company’s effective percentage of ownership excluding the redeemable convertible preferred stock is 25.54%.

(*12)

The effective percentage of ownership is less than 20% but the Company can exercise significant influence by virtue of its contractual right to appoint a director to the board of directors of the entity and the fact that the dominant portion of the investee’s sales transactions is generated from the Company.

F-83

(2)

The fair value of associates which are actively traded on the open market and have a readily available market value as of December 31, 2014 and 2015 are as follows:



Investees		2014		2015
		In millions of won
<Associates>
Korea Electric Power Industrial Development Co., Ltd.	￦		60,506		46,514
Korea Gas Corporation(*)			936,495		696,465
YTN Co., Ltd.			23,940		26,235
SPC Power Corporation			65,888		65,552
PT. Bayan Resources TBK			391,463		446,250

(*)

The carrying amount of Korea Gas Corporation (“KOGAS”) is ￦2,102,813 million as of December 31, 2015 and management has determined that there is objective evidence of impairment. As a result of the impairment test, the Company has not recognized any impairment loss as the value in use is greater than the carrying amount. The recoverable amount of KOGAS based on its value in use is calculated by considering the long-term natural gas supply and demand programs of future cash flows approved by Ministry of Trade, Industry & Energy and the discount rate of 4.55%.

(3)

Changes in investments in associates and joint ventures for the years ended December 31, 2014 and 2015 are as follows:


		2014
Investees		Beginning balance		Acquisition		Disposal			Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance
		In millions of won
<Associates>
Daegu Green Power Co., Ltd.	￦		74,878		—		—			—			(3,494	)		3			—			71,387
Korea Gas Corporation			1,926,800		—		—			—			96,457			69,489			4,793			2,097,539
Korea Electric Power Industrial Development Co., Ltd.			22,450		—		—			(1,872	)		2,275			—			(1,231	)		21,622
YTN Co., Ltd.			38,426		—		—			(90	)		2,423			(26	)		(844	)		39,889
Cheongna Energy Co., Ltd.			28,114		5,707		—			—			(5,023	)		(27	)		—			28,771
Gangwon Wind Power Co., Ltd.			13,185		—		—			(1,988	)		1,155			33			—			12,385
Hyundai Green Power Co., Ltd.			110,157		—		—			(8,889	)		11,764			—			1			113,033
Korea Power Exchange			189,544		—		—			—			13,274			—			(4,797	)		198,021
AMEC Partners Korea Ltd.			189		—		—			—			11			—			—			200
Hyundai Energy Co., Ltd.			43,386		—		—			—			(7,461	)		—			—			35,925
Ecollite Co., Ltd.			—		—		—			—			—			—			—			—
Taebaek Wind Power Co., Ltd.			5,553		—		—			(991	)		963			—			—			5,525
Alternergy Philippine Investments Corporation			1,500		—		(1,497	)		—			(7	)		228			(224	)		—
Muju Wind Power Co., Ltd.			2,707		—		—			—			—			—			(1	)		2,706
Pyeongchang Wind Power Co., Ltd.			600		3,238		—			—			(128	)		(17	)		—			3,693
Daeryun Power Co., Ltd.			24,599		—		—			—			(1,748	)		—			19,100			41,951
JinanJangsu Wind Power Co., Ltd.			77		—		—			—			—			—			—			77
Changjuk Wind Power Co., Ltd.			6,344		—		—			(1,292	)		1,434			—			—			6,486
KNH Solar Co., Ltd.			1,372		—		—			—			372			—			—			1,744
SPC Power Corporation			47,661		—		—			—			(1,800	)		335			1,603			47,799
Gemeng International Energy Co., Ltd.			608,674		—		—			(6,905	)		54,368			11,441			—			667,578

F-84


		2014
Investees		Beginning balance		Acquisition		Disposal			Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance
		In millions of won
PT. Cirebon Electric Power	￦		32,826		1,148		—			—			6,303			3,058			—			43,335
KNOC Nigerian East Oil Co., Ltd.			—		—		—			—			—			—			—			—
KNOC Nigerian West Oil Co., Ltd.			—		—		—			—			—			—			—			—
Dolphin Property Limited			—		—		—			—			184			(8	)		(115	)		61
E-Power S.A.			5,284		—		(5,041	)		(1,431	)		1,173			15			—			—
PT Wampu Electric Power			15,121		—		—			—			308			642			—			16,071
PT. Bayan Resources TBK			579,534		—		—			—			(30,565	)		(8,958	)		—			540,011
S-Power Co., Ltd.			107,264		—		—			—			(3,020	)		—			—			104,244
Pioneer Gas Power Limited			43,666		1,122		—			—			298			5,582			—			50,668
Eurasia Energy Holdings			—		—		—			—			—			—			—			—
Xe-Pian Xe-Namnoy Power Co., Ltd.			18,058		4,546		—			—			(915	)		753			(290	)		22,152
Busan Solar Co., Ltd.			741		—		—			—			112			—			—			853
Hadong Mineral Fiber Co., Ltd.			3		—		—			—			—			—			—			3
Green Biomass Co., Ltd.			171		—		—			—			(171	)		—			—			—
Gumi-ochang Photovoltaic Power Co., Ltd.			389		—		(399	)		(14	)		24			—			—			—
Chungbuk Photovoltaic Power Co., Ltd.			184		—		(192	)		—			8			—			—			—
Cheonan Photovoltaic Power Co., Ltd.			148		—		(138	)		—			(10	)		—			—			—
PT. Mutiara Jawa			1,666		—		—			—			(885	)		37			—			818
Samcheok Eco Material Co., Ltd.			—		686		—			—			(474	)		—			—			212
Noeul Green Energy Co., Ltd.			—		200		—			—			(11	)		—			—			189
Naepo Green Energy Co., Ltd.			—		29,200		—			—			(995	)		(141	)		—			28,064
Goseong Green Energy Co., Ltd.			—		2,900		—			—			(311	)		—			(3	)		2,586
Gangneung Eco Power Co., Ltd.			—		2,900		—			—			(117	)		—			—			2,783
Shin Pyeongtaek Power Co., Ltd.			—		40		—			—			(40	)		—			—			—
Hyundai Asan Solar Power Co., Ltd.			462		—		(430	)		—			(32	)		—			—			—
Heang Bok Do Si Photovoltaic Power Co., Ltd.			91		101		—			—			31			(2	)		—			221
Jeonnam Solar Co., Ltd.			696		—		(941	)		—			241			4			—			—
DS POWER Co., Ltd.			17,900		—		—			—			(2,258	)		—			—			15,642
D Solar Energy Co., Ltd.			364		—		(418	)		—			54			—			—			—
Dongducheon Dream Power Co., Ltd.			134,398		—		(29,782	)		—			(4,071	)		—			—			100,545
KS Solar Corp. Ltd.			537		—		—			—			(202	)		(10	)		—			325
KOSCON Photovoltaic Co., Ltd.			315		—		(351	)		—			36			—			—			—
Yeongwol Energy Station Co., Ltd.			908		—		(410	)		—			1,239			3			1			1,741
Yeonan Photovoltaic Co., Ltd.			123		—		(128	)		—			5			—			—			—
Q1 Solar Co., Ltd.			983		—		(1,123	)		—			140			—			—			—
Jinbhuvish Power Generation Pvt. Ltd.			8,495		—		—			—			(197	)		46			—			8,344
Best Solar Energy Co., Ltd.			898		—		(1,242	)		—			344			—			—			—
Seokcheon Solar Power Co., Ltd.			1,046		—		(1,041	)		(49	)		48			1			(5	)		—
SE Green Energy Co., Ltd.			3,745		—		—			—			(122	)		—			—			3,623
Daegu Photovoltaic Co., Ltd.			1,334		—		—			—			247			—			—			1,581
Jeongam Wind Power Co., Ltd.			324		—		—			—			(231	)		—			—			93
Korea Power Engineering Service Co., Ltd.			585		—		—			—			787			—			(38	)		1,334
Golden Route J Solar Power Co., Ltd.			99		—		(75	)		—			(24	)		—			—			—

			4,124,574		51,788		(43,208	)		(23,521	)		131,766			82,481			17,950			4,341,830

<Joint ventures>
KEPCO-Uhde Inc.			9,537		—		—			—			(493	)		—			(2	)		9,042
Eco Biomass Energy Sdn. Bhd.			—		—		—			—			—			—			—			—
Datang Chaoyang Renewable Power Co., Ltd.			28,161		—		—			(740	)		(346	)		439			—			27,514
Shuweihat Asia Power Investment B.V.			64		59,576		—			—			6,077			(49,428	)		(48	)		16,241
Shuweihat Asia Operation & Maintenance Company			29		—		—			(869	)		1,172			14			(1	)		345
Waterbury Lake Uranium L.P.			23,042		762		—			—			—			1,285			(3,079	)		22,010

F-85


		2014
Investees		Beginning balance		Acquisition		Disposal			Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance
		In millions of won
ASM-BG Investicii AD	￦		20,088		—		—			—			1,131			(1,611	)		—			19,608
RES Technology AD			16,045		—		—			—			(78	)		(1,242	)		—			14,725
KV Holdings, Inc.			1,842		—		—			—			—			60			—			1,902
KEPCO SPC Power Corporation			143,294		—		—			(8,069	)		48,623			6,640			31			190,519
Canada Korea Uranium Limited Partnership			—		—		—			—			—			—			—			—
KEPCO Energy Resource Nigeria Limited			2,202		—		—			—			(2,190	)		(12	)		—			—
Gansu Datang Yumen Wind Power Co., Ltd.			19,237		—		—			—			(2,012	)		242			—			17,467
Datang Chifeng Renewable Power Co., Ltd.			166,330		—		—			(8,951	)		9,144			2,973			—			169,496
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			10,604		—		—			(788	)		531			192			—			10,539
Rabigh Electricity Company			—		—		—			—			25,040			(18,709	)		1,790			8,121
Rabigh Operation & Maintenance Company			4,082		—		—			(2,546	)		2,945			147			—			4,628
Jamaica Public Service Company Limited(*)			268,022		—		—			—			—			—			(41,130	)		226,892
KW Nuclear Components Co., Ltd.			2,476		—		—			(1,399	)		1,821			—			1			2,899
Busan Shinho Solar Power Co., Ltd.			2,871		—		—			—			423			(10	)		—			3,284
GS Donghae Electric Power Co., Ltd.			173,915		117,600		(88,962	)		—			(580	)		(161	)		(403	)		201,409
YEONGAM Wind Power Co., Ltd.			11,424		—		(12,533	)		—			1,109			—			—			—
Global Trade Of Power System Co., Ltd.			249		—		—			—			94			—			—			343
Expressway Solar-light Power Generation Co., Ltd.			1,863		—		(1,276	)		(237	)		1,737			—			—			2,087
KODE NOVUS 1 LLC.			14,237		—		—			—			(2,324	)		294			—			12,207
KODE NOVUS 2 LLC.			9,510		—		—			—			(1,592	)		330			—			8,248
Daejung Offshore Wind Power Co., Ltd.			4,135		—		—			—			(424	)		—			—			3,711
Amman Asia Electric Power Company			111,315		6,755		—			—			23,324			(19,003	)		—			122,391
KEPCO-ALSTOM Power Electronics Systems, Inc.			4,758		—		—			—			(141	)		—			—			4,617
Dangjin Echo Power Co., Ltd.			39,102		—		—			—			(1,235	)		(35	)		5			37,837
Honam Wind Power Co., Ltd.			1,933		—		—			—			248			1,254			120			3,555
Nepal Water & Energy Development Company Pty Ltd.			10,409		8,018		—			—			(928	)		373			—			17,872
Chun-cheon Energy Co., Ltd.			—		15		—			—			(15	)		—			—			—
Yeonggwangbaeksu Wind Power Co., Ltd.			—		3,000		—			—			(33	)		—			(5	)		2,962
Nghi Son 2 Power Ltd.			—		350		—			—			(268	)		(14	)		34			102
Kelar S.A			4,180		—		—			—			(1,047	)		407			(384	)		3,156
PT. Tanjung Power Indonesia			361		359		—			—			(60	)		39			1			700
Incheon New Power Co., Ltd.			449		—		—			—			9			—			7			465
Seokmun Energy Co., Ltd.			415		—		—			—			(415	)		—			—			—

			1,106,181		196,435		(102,771	)		(23,599	)		109,247			(75,536	)		(43,063	)		1,166,894

	￦		5,230,755		248,223		(145,979	)		(47,120	)		241,013			6,945			(25,113	)		5,508,724

(*)

It has been determined that there is objective evidence of impairment as a result of one or more events including 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, 2014, as a result of the impairment test, the recoverable amount of JPS is less than its carrying amount and an impairment loss of ￦52,279 million is recognized in profit or loss. The recoverable amount of JPS is its value in use which is calculated based on the most recent financial budget of future cash flows for a period of 10 years approved by management and the discount rate used to calculate the value in use is 10.15%.

F-86


		2015
Investees		Beginning balance		Acquisition		Disposal		Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance
		In millions of won
<Associates>
Daegu Green Power Co., Ltd.	￦		71,387		—		—		—			8,902			—			(22	)		80,267
Korea Gas Corporation			2,097,539		—		—		(4,725	)		67,949			(55,453	)		(2,497	)		2,102,813
Korea Electric Power Industrial Development Co., Ltd.			21,622		—		—		(1,267	)		(1,792	)		—			431			18,994
YTN Co., Ltd.			39,889		—		—		(90	)		(188	)		(935	)		(311	)		38,365
Cheongna Energy Co., Ltd.			28,771		—		—		—			(9,281	)		—			—			19,490
Gangwon Wind Power Co., Ltd.			12,385		—		—		(852	)		1,279			78			—			12,890
Hyundai Green Power Co., Ltd.			113,033		—		—		(8,889	)		9,520			—			—			113,664
Korea Power Exchange			198,021		—		—		—			9,944			—			770			208,735
AMEC Partners Korea Ltd.			200		—		—		—			30			—			—			230
Hyundai Energy Co., Ltd.(*1)			35,925		—		—		—			(13,731	)		—			(15,204	)		6,990
Ecollite Co., Ltd.			—		—		—		—			—			—			—			—
Taebaek Wind Power Co., Ltd.			5,525		—		—		—			(569	)		—			—			4,956
Muju Wind Power Co., Ltd.			2,706		—		—		—			(119	)		—			—			2,587
Pyeongchang Wind Power Co., Ltd.			3,693		—		—		—			(291	)		—			—			3,402
Daeryun Power Co., Ltd.			41,951		—		—		—			(5,798	)		—			3			36,156
JinanJangsu Wind Power Co., Ltd.			77		—		—		—			—			—			—			77
Changjuk Wind Power Co., Ltd.			6,486		—		—		—			(343	)		—			—			6,143
KNH Solar Co., Ltd.			1,744		—		—		—			178			2			—			1,924
SPC Power Corporation			47,799		—		—		(1,349	)		5,375			381			5,827			58,033
Gemeng International Energy Co., Ltd.			667,578		—		—		(37,163	)		51,766			89,481			(43,266	)		728,396
PT. Cirebon Electric Power			43,335		—		—		—			12,210			5,029			—			60,574
KNOC Nigerian East Oil Co., Ltd.			—		—		—		—			(880	)		(641	)		1,521			—
KNOC Nigerian West Oil Co., Ltd.			—		—		—		—			(1,092	)		(599	)		1,691			—
Dolphin Property Limited			61		—		—		—			—			—			—			61
PT Wampu Electric Power			16,071		2,357		—		—			(600	)		1,135			—			18,963
PT. Bayan Resources TBK			540,011		—		—		—			(11,341	)		(3,604	)		—			525,066
S-Power Co., Ltd.			104,244		24,300		—		—			2,364			—			—			130,908
Pioneer Gas Power Limited			50,668		—		—		—			59			460			—			51,187
Eurasia Energy Holdings			—		—		—		—			—			—			—			—
Xe-Pian Xe-Namnoy Power Co., Ltd.			22,152		9,244		—		—			(749	)		1,216			—			31,863
Busan Solar Co., Ltd.			853		—		—		—			72			—			—			925
Hadong Mineral Fiber Co., Ltd.			3		—		—		—			(3	)		—			—			—
Green Biomass Co., Ltd.			—		—		—		—			—			—			—			—
PT. Mutiara Jawa			818		—		—		—			(818	)		—			—			—
Samcheok Eco Material Co., Ltd.			212		—		—		—			(178	)		(34	)		—			—
Noeul Green Energy Co., Ltd.			189		200		—		—			(91	)		(3	)		—			295
Naepo Green Energy Co., Ltd.			28,064		—		—		—			(1,318	)		—			—			26,746
Goseong Green Energy Co., Ltd.			2,586		—		—		—			84			—			—			2,670
Gangneung Eco Power Co., Ltd.			2,783		—		—		—			(95	)		—			—			2,688
Shin Pyeongtaek Power Co., Ltd.			—		—		—		—			—			—			—			—
Heang Bok Do Si Photovoltaic Power Co., Ltd.			221		—		—		—			(32	)		—			—			189
DS POWER Co., Ltd.			15,642		—		—		—			(4,671	)		—			(11	)		10,960
Dongducheon Dream Power Co., Ltd.(*2)			100,545		—		—		—			(3,412	)		—			(41,466	)		55,667
KS Solar Corp. Ltd.			325		—		—		—			293			—			—			618
Yeongwol Energy Station Co., Ltd.			1,741		—		—		—			(451	)		—			—			1,290
Jinbhuvish Power Generation Pvt. Ltd.			8,344		—		—		—			(42	)		48			—			8,350
SE Green Energy Co., Ltd.			3,623		—		—		—			(48	)		—			—			3,575
Daegu Photovoltaic Co., Ltd.			1,581		—		—		—			305			—			—			1,886
Jeongam Wind Power Co., Ltd.			93		880		—		—			(271	)		—			—			702
Korea Power Engineering Service Co., Ltd.			1,334		—		—		(44	)		542			—			(27	)		1,805
Busan Green Energy Co., Ltd.			—		14,564		—		—			(52	)		—			—			14,512
Jungbu Bio Energy Co., Ltd.			—		1,000		—		—			(96	)		—			—			904

F-87


		2015
Investees		Beginning balance		Acquisition		Disposal			Dividends received			Share of income (loss)			Other comprehensive income (loss)			Others			Ending balance
		In millions of won
Korea Electric Vehicle Charging Service	￦		—		1,596		—			—			(135	)		—			(15	)		1,446
Ulleungdo Natural Energy Co., Ltd.			—		8,000		—			—			(583	)		—			—			7,417
Korea Nuclear Partners Co., Ltd.			—		290		—			—			(1	)		—			—			289

			4,341,830		62,431		—			(54,379	)		111,801			36,561			(92,576	)		4,405,668

<Joint ventures>
KEPCO-Uhde Inc.			9,042		—		—			—			(493	)		—			—			8,549
Eco Biomass Energy Sdn. Bhd.			—		—		—			—			—			—			—			—
Datang Chaoyang Renewable Power Co., Ltd.			27,514		—		—			—			(135	)		261			—			27,640
Shuweihat Asia Power Investment B.V.			16,241		108		—			—			4,008			117			—			20,474
Shuweihat Asia Operation & Maintenance Company			345		—		—			(798	)		922			24			(7	)		486
Waterbury Lake Uranium L.P.			22,010		—		—			—			—			(2,507	)		796			20,299
ASM-BG Investicii AD			19,608		—		—			—			1,384			(789	)		—			20,203
RES Technology AD			14,725		—		—			—			(318	)		(618	)		—			13,789
KV Holdings, Inc.			1,902		—		—			—			74			34			—			2,010
KEPCO SPC Power Corporation			190,519		—		—			(28,986	)		43,801			3,190			—			208,524
Canada Korea Uranium Limited Partnership			—		—		—			—			—			—			—			—
KEPCO Energy Resource Nigeria Limited			—		—		—			—			—			—			—			—
Gansu Datang Yumen Wind Power Co., Ltd.			17,467		—		—			—			(1,546	)		186			—			16,107
Datang Chifeng Renewable Power Co., Ltd.			169,496		—		—			(8,239	)		8,512			1,464			(9	)		171,224
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			10,539		—		—			—			(33	)		74			—			10,580
Rabigh Electricity Company			8,121		—		—			—			21,582			29,703			(38	)		59,368
Rabigh Operation & Maintenance Company			4,628		—		—			(1,780	)		533			205			—			3,586
Jamaica Public Service Company Limited			226,892		—		—			—			—			15,027			(1	)		241,918
KW Nuclear Components Co., Ltd.			2,899		—		—			(1,016	)		3,065			—			37			4,985
Busan Shinho Solar Power Co., Ltd.			3,284		—		—			—			394			—			—			3,678
GS Donghae Electric Power Co., Ltd.			201,409		—		—			—			(1,064	)		—			34			200,379
Global Trade Of Power System Co., Ltd.			343		—		—			—			83			—			—			426
Expressway Solar-light Power Generation Co., Ltd.			2,087		—		—			—			13			—			—			2,100
KODE NOVUS 1 LLC			12,207		—		—			—			(11,639	)		588			(1,156	)		—
KODE NOVUS 2 LLC			8,248		—		—			—			(8,104	)		413			(557	)		—
Daejung Offshore Wind Power Co., Ltd.			3,711		—		—			—			(359	)		—			—			3,352
Amman Asia Electric Power Company			122,391		—		—			(19,510	)		25,131			10,244			(588	)		137,668
KEPCO-ALSTOM Power Electronics Systems, Inc.			4,617		—		—			—			(98	)		—			(18	)		4,501
Dangjin Echo Power Co., Ltd.			37,837		20,000		(8,851	)		—			(712	)		70			(63	)		48,281
Honam Wind Power Co., Ltd.			3,555		—		—			—			371			—			—			3,926
Nepal Water & Energy Development Company Pty Ltd.			17,872		—		—			—			(1,277	)		1,170			—			17,765
Chun-cheon Energy Co., Ltd.			—		32,853		—			—			(719	)		(158	)		—			31,976
Yeonggwangbaeksu Wind Power Co., Ltd.			2,962		—		—			—			(294	)		—			—			2,668
Nghi Son 2 Power Ltd.			102		722		—			—			(562	)		2			5			269
Kelar S.A			3,156		—		—			—			—			(407	)		(2,749	)		—
PT. Tanjung Power Indonesia			700		—		—			—			(98	)		—			15			617
Incheon New Power Co., Ltd.			465		—		—			—			49			—			—			514
Seokmun Energy Co., Ltd.			—		—		(100	)		—			—			—			100			—

			1,166,894		53,683		(8,951	)		(60,329	)		82,471			58,293			(4,199	)		1,287,862

	￦		5,508,724		116,114		(8,951	)		(114,708	)		194,272			94,854			(96,775	)		5,693,530

(*1)	‘Others’ include ￦15,204 million of assets held-for-sale (note 42).

(*2)	‘Others’ include ￦41,170 million of assets held-for-sale (note 42).

F-88

(4)

Summary of financial information of associates and joint ventures as of and for the years ended December 31, 2014 and 2015 are as follows:


		2014
Investees		Total assets		Total liabilities		Sales		Profit (loss) for the period
		In millions of won
<Associates>
Daegu Green Power Co., Ltd.	￦		666,935		517,892		43,908		(7,310	)
Korea Gas Corporation			46,772,022		37,047,686		37,273,360		447,183
Korea Electric Power Industrial Development Co., Ltd.			151,511		76,953		329,215		13,118
YTN Co., Ltd.			335,740		149,337		114,743		11,289
Cheongna Energy Co., Ltd.			443,672		384,020		47,075		(11,585	)
Gangwon Wind Power Co., Ltd.			123,242		41,002		28,829		11,708
Hyundai Green Power Co., Ltd.			1,215,849		826,080		503,197		40,797
Korea Power Exchange			223,080		25,059		86,735		13,289
AMEC Partners Korea Ltd.			1,234		180		671		60
Hyundai Energy Co., Ltd.			549,560		467,245		88,001		(16,214	)
Ecollite Co., Ltd.			2,467		443		—		39
Taebaek Wind Power Co., Ltd.			50,776		28,677		10,362		3,856
Muju Wind Power Co., Ltd.			10,826		—		—		(4	)
Pyeongchang Wind Power Co., Ltd.			14,772		2		—		(513	)
Daeryun Power Co., Ltd.			832,682		622,244		338,191		(9,213	)
JinanJangsu Wind Power Co., Ltd.			308		—		—		(1	)
Changjuk Wind Power Co., Ltd.			42,349		20,730		10,487		4,741
KNH Solar Co., Ltd.			28,451		21,992		4,913		1,315
SPC Power Corporation			174,917		49,131		63,969		30,959
Gemeng International Energy Co., Ltd.			5,690,748		3,727,276		1,497,330		183,604
PT. Cirebon Electric Power			985,975		828,393		266,963		23,363
KNOC Nigerian East Oil Co., Ltd.			247,785		310,719		—		(7,157	)
KNOC Nigerian West Oil Co., Ltd.			150,644		208,323		—		(6,395	)
Dolphin Property Limited			301		4		28		330
PT Wampu Electric Power			172,950		138,012		43,205		(5,121	)
PT. Bayan Resources TBK			1,221,538		1,032,312		872,876		(119,250	)
S-Power Co., Ltd.			944,442		678,431		56,822		(2,215	)
Pioneer Gas Power Limited			237,922		169,289		—		96
Eurasia Energy Holdings			562		1,003		—		—
Xe-Pian Xe-Namnoy Power Co., Ltd.			248,773		181,560		—		(2,326	)
Busan Solar Co., Ltd.			27,512		23,202		4,489		579
Hadong Mineral Fiber Co., Ltd.			12		2		—		(1	)
Green Biomass Co., Ltd.			9,378		9,745		2,062		(871	)
PT. Mutiara Jawa			28,407		25,827		15		(3,114	)
Samcheok Eco Material Co., Ltd.			23,831		—		—		(1,855	)
Noeul Green Energy Co., Ltd.			1,045		101		—		(56	)
Naepo Green Energy Co., Ltd.			118,202		5,944		1,283		(3,978	)
Goseong Green Energy Co., Ltd.			27,540		789		—		(3,115	)
Gangneung Eco Power Co., Ltd.			47,009		953		—		(1,756	)
Shin Pyeongtaek Power Co., Ltd.			5,075		5,794		—		(819	)
Heang Bok Do Si Photovoltaic Power Co., Ltd.			3,422		2,632		289		111
DS POWER Co., Ltd.			417,861		296,862		44,819		(2,662	)
Dongducheon Dream Power Co., Ltd.			1,516,412		1,201,566		—		615
KS Solar Corp. Ltd.			30,937		29,225		3,465		(1,149	)
Yeongwol Energy Station Co., Ltd.			146,917		129,511		14,393		4,981
Jinbhuvish Power Generation Pvt. Ltd.			77,510		21,414		—		(3,817	)
SE Green Energy Co., Ltd.			7,587		—		—		(255	)
Daegu Photovoltaic Co., Ltd.			22,340		16,887		3,633		739
Jeongam Wind Power Co., Ltd.			241		9		—		(472	)
Korea Power Engineering Service Co., Ltd.			7,410		2,809		18,859		3,171

F-89


		2014
Investees		Total assets		Total liabilities		Sales		Profit (loss) for the period
		In millions of won
<Joint ventures>
KEPCO-Uhde Inc.	￦		16,424		2,747		—		(819	)
Eco Biomass Energy Sdn. Bhd.			—		—		—		—
Datang Chaoyang Renewable Power Co., Ltd.			158,646		89,862		16,946		(540	)
Shuweihat Asia Power Investment B.V.			33,315		2		—		12,379
Shuweihat Asia Operation & Maintenance Company			639		11		2,713		2,129
Waterbury Lake Uranium L.P.			56,797		2		—		—
ASM-BG Investicii AD			91,205		51,990		13,137		2,012
RES Technology AD			82,721		53,272		8,757		(307	)
KV Holdings, Inc.			4,755		—		—		—
KEPCO SPC Power Corporation			464,305		210,956		169,615		63,005
Canada Korea Uranium Limited Partnership			35,990		132		—		(18	)
KEPCO Energy Resource Nigeria Limited			378,677		399,871		—		(29,048	)
Gansu Datang Yumen Wind Power Co., Ltd.			106,283		62,616		7,814		(4,399	)
Datang Chifeng Renewable Power Co., Ltd.			902,645		478,805		100,712		22,849
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			70,354		44,005		8,464		1,444
Rabigh Electricity Company			2,544,622		2,325,205		284,837		57,444
Rabigh Operation & Maintenance Company			16,667		5,097		22,911		7,417
Jamaica Public Service Company Limited			1,100,431		725,307		841,390		13,183
KW Nuclear Components Co., Ltd.			25,591		19,115		9,722		4,200
Busan Shinho Solar Power Co., Ltd.			53,399		40,261		8,115		1,320
GS Donghae Electric Power Co., Ltd.			975,489		383,111		—		(1,389	)
Global Trade Of Power System Co., Ltd.			1,690		509		5,037		322
Expressway Solar-light Power Generation Co., Ltd.			22,046		14,849		3,181		22
KODE NOVUS 1 LLC.			115,584		100,636		6,490		(4,648	)
KODE NOVUS 2 LLC.			57,355		40,521		3,454		(3,034	)
Daejung Offshore Wind Power Co., Ltd.			7,443		6		—		(849	)
Amman Asia Electric Power Company			840,505		636,383		74,489		38,844
KEPCO-ALSTOM Power Electronics Systems, Inc.			24,203		15,150		18,536		(277	)
Dangjin Echo Power Co., Ltd.			125,481		16,112		—		(3,710	)
Honam Wind Power Co., Ltd.			41,041		28,892		4,873		1,311
Nepal Water & Energy Development Company Pty Ltd.			37,541		9,193		—		(1,228	)
Chun-cheon Energy Co., Ltd.			63,481		63,509		—		(78	)
Yeonggwangbaeksu Wind Power CO., Ltd.			97,043		77,298		—		(218	)
Nghi Son 2 Power Ltd.			318		111		—		(536	)
Kelar S.A			222,068		221,210		—		(1,610	)
PT. Tanjung Power Indonesia			19,190		17,193		5,313		(175	)
Incheon New Power Co., Ltd.			9,950		8,346		1,299		57
Seokmun Energy Co., Ltd.			16,920		17,078		—		(1,379	)

F-90


		2015
Investees		Total assets		Total liabilities		Sales		Profit (loss) for the period
		In millions of won
<Associates>
Daegu Green Power Co., Ltd.	￦		639,118		471,497		321,273		18,625
Korea Gas Corporation			42,385,340		32,328,396		26,052,724		319,190
Korea Electric Power Industrial Development Co., Ltd.			142,835		77,340		324,162		9,855
YTN Co., Ltd.			305,799		126,561		117,418		(520	)
Cheongna Energy Co., Ltd.			458,205		419,353		48,519		(21,108	)
Gangwon Wind Power Co., Ltd.			114,600		28,994		21,941		8,529
Hyundai Green Power Co., Ltd.			1,182,352		790,407		486,435		31,011
Korea Power Exchange			236,199		27,464		87,400		9,303
AMEC Partners Korea Ltd.			1,332		123		511		155
Hyundai Energy Co., Ltd.			526,305		473,736		80,067		(29,749	)
Ecollite Co., Ltd.			2,271		345		—		(97	)
Taebaek Wind Power Co., Ltd.			48,009		26,212		6,626		(302	)
Muju Wind Power Co., Ltd.			10,349		—		—		(477	)
Pyeongchang Wind Power Co., Ltd.			62,565		48,959		—		(1,164	)
Daeryun Power Co., Ltd.			838,199		657,551		279,787		(29,806	)
JinanJangsu Wind Power Co., Ltd.			306		—		—		(1	)
Changjuk Wind Power Co., Ltd.			41,444		19,053		6,472		772
KNH Solar Co., Ltd.			27,254		20,105		4,399		861
SPC Power Corporation			182,908		30,191		68,149		37,395
Gemeng International Energy Co., Ltd.			5,956,288		3,940,455		902,008		95,064
PT. Cirebon Electric Power			1,026,729		806,458		295,788		43,968
KNOC Nigerian East Oil Co., Ltd.			264,434		337,762		—		(6,069	)
KNOC Nigerian West Oil Co., Ltd.			160,765		230,001		—		(7,386	)
Dolphin Property Limited			300		1		—		8
PT Wampu Electric Power			201,383		160,159		17,476		(2,696	)
PT. Bayan Resources TBK			1,043,143		901,952		461,349		(30,014	)
S-Power Co., Ltd.			935,870		664,523		632,073		5,336
Pioneer Gas Power Limited			310,761		240,833		—		148
Eurasia Energy Holdings			599		1,069		—		—
Xe-Pian Xe-Namnoy Power Co., Ltd.			506,970		341,261		—		2,760
Busan Solar Co., Ltd.			26,059		21,367		4,267		383
Hadong Mineral Fiber Co., Ltd.			2		21		—		(30	)
Green Biomass Co., Ltd.			10,664		9,343		4,136		(1,323	)
PT. Mutiara Jawa			25,013		29,913		1,943		(7,247	)
Samcheok Eco Material Co., Ltd.			23,119		735		—		(2,171	)
Noeul Green Energy Co., Ltd.			1,517		44		—		(446	)
Naepo Green Energy Co., Ltd.			108,167		1,184		3,126		(5,274	)
Goseong Green Energy Co., Ltd.			95,323		3,248		—		(4,312	)
Gangneung Eco Power Co., Ltd.			81,459		9,163		—		(3,610	)
Shin Pyeongtaek Power Co., Ltd.			25,875		29,190		—		(2,595	)
Heang Bok Do Si Photovoltaic Power Co., Ltd.			3,128		2,452		490		81
DS POWER Co., Ltd.			641,257		525,524		33,542		(5,759	)
Dongducheon Dream Power Co., Ltd.			1,668,235		1,397,026		1,003,346		(10,307	)
KS Solar Corp. Ltd.			29,745		26,469		4,667		278
Yeongwol Energy Station Co., Ltd.			179,852		166,953		12,068		1,831
Jinbhuvish Power Generation Pvt. Ltd.			75,429		19,199		—		(805	)
SE Green Energy Co., Ltd.			7,484		—		—		(103	)
Daegu Photovoltaic Co., Ltd.			21,039		14,535		3,977		1,051
Jeongam Wind Power Co., Ltd.			2,053		299		—		(621	)
Korea Power Engineering Service Co., Ltd.			9,194		2,968		25,925		2,296
Busan Green Energy Co., Ltd.			50,093		53		—		(180	)
Jungbu Bio Energy Co., Ltd.			5,192		400		—		(508	)

F-91


		2015
Investees		Total assets		Total liabilities		Sales		Profit (loss) for the period
		In millions of won
Korea Electric Vehicle Charging Service	￦		9,577		4,412		—		(482	)
Ulleungdo Natural Energy Co., Ltd.			27,113		2,262		—		(1,948	)
Korea Nuclear Partners Co., Ltd.			1,002		6		—		(4	)

<Joint ventures>
KEPCO-Uhde Inc.			17,535		111		—		(765	)
Eco Biomass Energy Sdn. Bhd.			—		—		—		—
Datang Chaoyang Renewable Power Co., Ltd.			150,157		81,056		16,335		(373	)
Shuweihat Asia Power Investment B.V.			41,969		17		—		8,232
Shuweihat Asia Operation & Maintenance Company			885		—		2,318		1,666
Waterbury Lake Uranium L.P.			51,302		4		—		—
ASM-BG Investicii AD			83,766		43,359		12,328		2,833
RES Technology AD			73,261		45,684		7,539		(566	)
KV Holdings, Inc.			5,025		—		—		186
KEPCO SPC Power Corporation			449,553		172,261		175,008		59,610
Canada Korea Uranium Limited Partnership			305		124		—		(19	)
KEPCO Energy Resource Nigeria Limited			380,282		416,959		—		(16,309	)
Gansu Datang Yumen Wind Power Co., Ltd.			98,298		58,030		7,280		(4,507	)
Datang Chifeng Renewable Power Co., Ltd.			882,914		454,731		103,860		21,900
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			65,110		38,661		7,880		1,216
Rabigh Electricity Company			2,644,825		2,297,194		293,184		53,384
Rabigh Operation & Maintenance Company			18,186		9,222		22,203		2,144
Jamaica Public Service Company Limited			1,086,244		657,962		859,728		3,305
KW Nuclear Components Co., Ltd.			36,065		24,777		16,217		7,687
Busan Shinho Solar Power Co., Ltd.			51,617		36,903		7,565		1,471
GS Donghae Electric Power Co., Ltd.			1,675,986		1,086,534		—		(2,823	)
Global Trade Of Power System Co., Ltd.			1,547		78		4,849		287
Expressway Solar-light Power Generation Co., Ltd.			21,154		13,913		2,981		443
KODE NOVUS 1 LLC			64,453		110,030		3,421		(59,389	)
KODE NOVUS 2 LLC			22,500		45,306		1,868		(39,345	)
Daejung Offshore Wind Power Co., Ltd.			6,795		78		—		(606	)
Amman Asia Electric Power Company			875,590		645,998		46,940		41,880
KEPCO-ALSTOM Power Electronics Systems, Inc.			50,152		41,326		18,849		(611	)
Dangjin Echo Power Co., Ltd.			136,982		945		—		(1,035	)
Honam Wind Power Co., Ltd.			41,527		28,100		5,944		1,266
Nepal Water & Energy Development Company Pty Ltd.			42,644		11,136		—		(647	)
Chun-cheon Energy Co., Ltd.			149,025		42,094		—		(2,389	)
Yeonggwangbaeksu Wind Power Co., Ltd.			104,045		86,257		4,974		(1,956	)
Nghi Son 2 Power Ltd.			771		234		—		(1,111	)
Kelar S.A			375,136		405,618		—		(3,140	)
PT. Tanjung Power Indonesia			37,948		36,185		16,476		(276	)
Incheon New Power Co., Ltd.			10,078		8,306		3,318		301
Seokmun Energy Co., Ltd.			184,051		184,759		—		(552	)

F-92

(5)

Financial information of associates and joint ventures converted to the Company’s shares in net assets as of December 31, 2014 and 2015 are as follows:



		2014
Investees		Net assets			Percentage of ownership (*)			Share in net assets			Investment differential		Intercompany transaction			Others			Book value
		In millions of won
<Associates>
Daegu Green Power Co., Ltd.	￦		149,043			47.80	%		71,242			145		—			—			71,387
Korea Gas Corporation			9,724,336			21.57	%		2,097,539			—		—			—			2,097,539
Korea Electric Power Industrial Development Co., Ltd.			74,557			29.00	%		21,622			—		—			—			21,622
YTN Co., Ltd.			186,403			21.43	%		39,946			—		(57	)		—			39,889
Cheongna Energy Co., Ltd.			59,652			43.90	%		26,187			2,584		—			—			28,771
Gangwon Wind Power Co., Ltd.			82,239			15.00	%		12,336			—		—			49			12,385
Hyundai Green Power Co., Ltd.			389,768			29.00	%		113,033			—		—			—			113,033
Korea Power Exchange			198,021			100.00	%		198,021			—		—			—			198,021
AMEC Partners Korea Ltd.			1,054			19.00	%		200			—		—			—			200
Hyundai Energy Co., Ltd.			82,315			46.30	%		38,112			—		(1,162	)		(1,025	)		35,925
Ecollite Co., Ltd.			2,024			36.10	%		731			—		—			(731	)		—
Taebaek Wind Power Co., Ltd.			22,099			25.00	%		5,525			—		—			—			5,525
Muju Wind Power Co., Ltd.			10,825			25.00	%		2,706			—		—			—			2,706
Pyeongchang Wind Power Co., Ltd.			14,770			25.00	%		3,693			—		—			—			3,693
Daeryun Power Co., Ltd.			210,438			19.45	%		40,930			1,014		—			7			41,951
JinanJangsu Wind Power Co., Ltd.			308			25.00	%		77			—		—			—			77
Changjuk Wind Power Co., Ltd.			21,619			30.00	%		6,486			—		—			—			6,486
KNH Solar Co., Ltd.			6,459			27.00	%		1,744			—		—			—			1,744
SPC Power Corporation			125,787			38.00	%		47,799			—		—			—			47,799
Gemeng International Energy Co., Ltd.			1,963,472			34.00	%		667,579			—		—			(1	)		667,578
PT. Cirebon Electric Power			157,582			27.50	%		43,335			—		—			—			43,335
KNOC Nigerian East Oil Co., Ltd.			(62,934	)		14.63	%		(9,207	)		—		—			9,207			—
KNOC Nigerian West Oil Co., Ltd.			(57,679	)		14.63	%		(8,438	)		—		—			8,438			—
Dolphin Property Limited			297			15.00	%		45			—		—			16			61
PT Wampu Electric Power			34,938			46.00	%		16,071			—		—			—			16,071
PT. Bayan Resources TBK			189,227			20.00	%		37,845			502,166		—			—			540,011
S-Power Co., Ltd.			266,011			40.00	%		106,405			—		(2,161	)		—			104,244
Pioneer Gas Power Limited			68,632			40.00	%		27,453			23,147		—			68			50,668
Eurasia Energy Holdings			(441	)		40.00	%		(176	)		—		—			176			—
Xe-Pian Xe-Namnoy Power Co., Ltd.			67,214			25.00	%		16,803			5,971		(333	)		(289	)		22,152
Busan Solar Co., Ltd.			4,311			19.80	%		853			—		—			—			853
Hadong Mineral Fiber Co., Ltd.			10			25.00	%		3			—		—			—			3
Green Biomass Co., Ltd.			(367	)		34.00	%		(125	)		—		—			125			—
PT. Mutiara Jawa			2,581			29.00	%		748			70		—			—			818
Samcheok Eco Material Co., Ltd.			23,831			2.67	%		636			—		—			(424	)		212
Noeul Green Energy Co., Ltd.			944			20.00	%		189			—		—			—			189
Naepo Green Energy Co., Ltd.			112,258			25.00	%		28,064			—		—			—			28,064
Goseong Green Energy Co., Ltd.			26,751			9.67	%		2,587			—		—			(1	)		2,586
Gangneung Eco Power Co., Ltd.			46,055			6.04	%		2,782			—		—			1			2,783
Shin Pyeongtaek Power Co., Ltd.			(719	)		40.00	%		(288	)		—		—			288			—
Heang Bok Do Si Photovoltaic Power Co., Ltd.			790			28.00	%		221			—		—			—			221
DS POWER Co., Ltd.			121,000			10.91	%		13,201			—		2,441			—			15,642
Dongducheon Dream Power Co., Ltd.			314,845			33.61	%		105,820			—		(5,275	)		—			100,545
KS Solar Corp. Ltd.			1,712			19.00	%		325			—		—			—			325
Yeongwol Energy Station Co., Ltd.			17,406			10.00	%		1,741			—		—			—			1,741
Jinbhuvish Power Generation Pvt. Ltd.			56,096			5.16	%		2,895			5,449		—			—			8,344
SE Green Energy Co., Ltd.			7,587			47.76	%		3,623			—		—			—			3,623
Daegu Photovoltaic Co., Ltd.			5,453			29.00	%		1,581			—		—			—			1,581
Jeongam Wind Power Co., Ltd.			233			40.00	%		93			—		—			—			93
Korea Power Engineering Service Co., Ltd.			4,601			29.00	%		1,334			—		—			—			1,334

F-93


		2014
Investees		Net assets			Percentage of ownership (*)			Share in net assets			Investment differential		Intercompany transaction			Others			Book value
		In millions of won
<Joint ventures>
KEPCO-Uhde Inc.	￦		13,677			64.02	%		8,756			—		—			286			9,042
Eco Biomass Energy Sdn. Bhd.			—			61.53	%		—			—		—			—			—
Datang Chaoyang Renewable Power Co., Ltd.			68,785			40.00	%		27,514			—		—			—			27,514
Shuweihat Asia Power Investment B.V.			33,312			49.00	%		16,323			—		—			(82	)		16,241
Shuweihat Asia Operation & Maintenance Company			628			55.00	%		346			—		—			(1	)		345
Waterbury Lake Uranium L.P.			56,796			40.00	%		22,718			—		—			(708	)		22,010
ASM-BG Investicii AD			39,215			50.00	%		19,608			—		—			—			19,608
RES Technology AD			29,449			50.00	%		14,725			—		—			—			14,725
KV Holdings, Inc.			4,755			40.00	%		1,902			—		—			—			1,902
KEPCO SPC Power Corporation			253,349			75.20	%		190,519			—		—			—			190,519
Canada Korea Uranium Limited Partnership			35,858			12.50	%		4,482			—		—			(4,482	)		—
KEPCO Energy Resource Nigeria Limited			(21,195	)		30.00	%		(6,358	)		—		—			6,358			—
Gansu Datang Yumen Wind Power Co., Ltd.			43,667			40.00	%		17,467			—		—			—			17,467
Datang Chifeng Renewable Power Co., Ltd.			423,839			40.00	%		169,536			—		—			(40	)		169,496
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			26,349			40.00	%		10,539			—		—			—			10,539
Rabigh Electricity Company			219,417			40.00	%		87,767			—		(79,646	)		—			8,121
Rabigh Operation & Maintenance Company			11,570			40.00	%		4,628			—		—			—			4,628
Jamaica Public Service Company Limited			375,124			40.00	%		150,050			130,726		—			(53,884	)		226,892
KW Nuclear Components Co., Ltd.			6,477			43.36	%		2,808			91		—			—			2,899
Busan Shinho Solar Power Co., Ltd.			13,138			25.00	%		3,284			—		—			—			3,284
GS Donghae Electric Power Co., Ltd.			592,379			34.00	%		201,409			—		—			—			201,409
Global Trade Of Power System Co., Ltd.			1,181			29.00	%		343			—		—			—			343
Expressway Solar-light Power Generation Co., Ltd.			7,197			29.00	%		2,087			—		—			—			2,087
KODE NOVUS 1 LLC.			14,949			50.00	%		7,474			4,733		—			—			12,207
KODE NOVUS 2 LLC.			16,833			49.00	%		8,248			—		—			—			8,248
Daejung Offshore Wind Power Co., Ltd.			7,437			49.90	%		3,711			—		—			—			3,711
Amman Asia Electric Power Company			204,122			60.00	%		122,473			—		—			(82	)		122,391
KEPCO-ALSTOM Power Electronics Systems, Inc.			9,052			51.00	%		4,617			—		—			—			4,617
Dangjin Echo Power Co., Ltd.			109,369			33.10	%		36,201			1,636		—			—			37,837
Honam Wind Power Co., Ltd.			12,149			29.00	%		3,523			32		—			—			3,555
Nepal Water & Energy Development Company Pty Ltd.			28,348			59.62	%		16,900			972		—			—			17,872
Chun-cheon Energy Co., Ltd.			(28	)		29.90	%		(8	)		—		—			8			—
Yeonggwangbaeksu Wind Power Co., Ltd.			19,745			15.00	%		2,962			—		—			—			2,962
Nghi Son 2 Power Ltd.			206			50.00	%		103			—		—			(1	)		102
Kelar S.A			858			65.00	%		558			2,424		—			174			3,156
PT. Tanjung Power Indonesia			1,996			35.00	%		699			—		—			1			700
Incheon New Power Co., Ltd.			1,604			29.00	%		465			—		—			—			465
Seokmun Energy Co., Ltd.			(158	)		34.00	%		(54	)		—		—			54			—

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

F-94



		2015
Investees		Net assets			Percentage of ownership (*)			Share in net assets			Investment differential			Intercompany transaction			Others			Book value
		In millions of won
<Associates>
Daegu Green Power Co., Ltd.	￦		167,621			47.80	%		80,123			144			—			—			80,267
Korea Gas Corporation			10,056,944			21.57	%		2,169,283			—			—			(66,470	)		2,102,813
Korea Electric Power Industrial Development Co., Ltd.			65,495			29.00	%		18,994			—			—			—			18,994
YTN Co., Ltd.			179,238			21.43	%		38,411			—			(43	)		(3	)		38,365
Cheongna Energy Co., Ltd.			38,852			43.90	%		17,056			2,584			(150	)		—			19,490
Gangwon Wind Power Co., Ltd.			85,606			15.00	%		12,841			—			—			49			12,890
Hyundai Green Power Co., Ltd.			391,945			29.00	%		113,664			—			—			—			113,664
Korea Power Exchange			208,735			100.00	%		208,735			—			—			—			208,735
AMEC Partners Korea Ltd.			1,209			19.00	%		230			—			—			—			230
Hyundai Energy Co., Ltd.			52,569			46.30	%		24,340			—			(1,120	)		(16,230	)		6,990
Ecollite Co., Ltd.			1,926			36.10	%		695			—			—			(695	)		—
Taebaek Wind Power Co., Ltd.			21,797			25.00	%		5,449			—			(493	)		—			4,956
Muju Wind Power Co., Ltd.			10,349			25.00	%		2,587			—			—			—			2,587
Pyeongchang Wind Power Co., Ltd.			13,606			25.00	%		3,402			—			—			—			3,402
Daeryun Power Co., Ltd.			180,648			19.45	%		35,136			1,014			—			6			36,156
JinanJangsu Wind Power Co., Ltd.			306			25.00	%		77			—			—			—			77
Changjuk Wind Power Co., Ltd.			22,391			30.00	%		6,717			—			(574	)		—			6,143
KNH Solar Co., Ltd.			7,149			27.00	%		1,930			—			(6	)		—			1,924
SPC Power Corporation			152,717			38.00	%		58,033			—			—			—			58,033
Gemeng International Energy Co., Ltd.			2,015,833			34.00	%		685,383			—			—			43,013			728,396
PT. Cirebon Electric Power			220,271			27.50	%		60,574			—			—			—			60,574
KNOC Nigerian East Oil Co., Ltd.			(73,328	)		14.63	%		(10,728	)		—			—			10,728			—
KNOC Nigerian West Oil Co., Ltd.			(69,236	)		14.63	%		(10,129	)		—			—			10,129			—
Dolphin Property Limited			299			15.00	%		45			—			—			16			61
PT Wampu Electric Power			41,224			46.00	%		18,963			—			—			—			18,963
PT. Bayan Resources TBK			141,191			20.00	%		28,238			498,089			—			(1,261	)		525,066
S-Power Co., Ltd.			271,347			49.00	%		132,960			—			(2,052	)		—			130,908
Pioneer Gas Power Limited			69,928			40.00	%		27,971			23,147			—			69			51,187
Eurasia Energy Holdings			(470	)		40.00	%		(188	)		—			—			188			—
Xe-Pian Xe-Namnoy Power Co., Ltd.			165,709			25.00	%		41,427			(8,796	)		(479	)		(289	)		31,863
Busan Solar Co., Ltd.			4,692			19.80	%		929			—			(4	)		—			925
Hadong Mineral Fiber Co., Ltd.			(19	)		25.00	%		(5	)		—			—			5			—
Green Biomass Co., Ltd.			1,321			14.00	%		185			—			—			(185	)		—
PT. Mutiara Jawa			(4,900	)		29.00	%		(1,421	)		70			—			1,351			—
Samcheok Eco Material Co., Ltd.			22,384			2.67	%		598			—			—			(598	)		—
Noeul Green Energy Co., Ltd.			1,473			20.00	%		295			—			—			—			295
Naepo Green Energy Co., Ltd.			106,983			25.00	%		26,746			—			—			—			26,746
Goseong Green Energy Co., Ltd.			92,075			2.90	%		2,670			—			—			—			2,670
Gangneung Eco Power Co., Ltd.			72,296			3.72	%		2,689			—			—			(1	)		2,688
Shin Pyeongtaek Power Co., Ltd.			(3,315	)		40.00	%		(1,326	)		—			(1,995	)		3,321			—
Heang Bok Do Si Photovoltaic Power Co., Ltd.			676			28.00	%		189			—			—			—			189
DS POWER Co., Ltd.			115,733			10.91	%		12,626			—			(5,940	)		4,274			10,960
Dongducheon Dream Power Co., Ltd.			271,209			33.61	%		91,153			—			5,398			(40,884	)		55,667
KS Solar Corp. Ltd.			3,276			19.00	%		622			—			(4	)		—			618
Yeongwol Energy Station Co., Ltd.			12,899			10.00	%		1,290			—			—			—			1,290
Jinbhuvish Power Generation Pvt. Ltd.			56,230			5.16	%		2,901			5,450			—			(1	)		8,350
SE Green Energy Co., Ltd.			7,484			47.76	%		3,575			—			—			—			3,575
Daegu Photovoltaic Co., Ltd.			6,504			29.00	%		1,886			—			—			—			1,886
Jeongam Wind Power Co., Ltd.			1,754			40.00	%		702			—			—			—			702
Korea Power Engineering Service Co., Ltd.			6,226			29.00	%		1,805			—			—			—			1,805
Busan Green Energy Co., Ltd.			50,040			29.00	%		14,512			—			—			—			14,512

F-95


		2015
Investees		Net assets			Percentage of ownership (*)			Share in net assets			Investment differential			Intercompany transaction			Others			Book value
		In millions of won
Jungbu Bio Energy Co., Ltd.	￦		4,792			18.87	%		904			—			—			—			904
Korea Electric Vehicle Charging Service			5,165			28.00	%		1,446			—			—			—			1,446
Ulleungdo Natural Energy Co., Ltd.			24,851			29.85	%		7,418			—			—			(1	)		7,417
Korea Nuclear Partners Co., Ltd.			996			29.00	%		289			—			—			—			289

<Joint ventures>
KEPCO-Uhde Inc.			17,424			50.85	%		8,860			—			—			(311	)		8,549
Eco Biomass Energy Sdn. Bhd.			—			61.53	%		—			—			—			—			—
Datang Chaoyang Renewable Power Co., Ltd.			69,101			40.00	%		27,640			—			—			—			27,640
Shuweihat Asia Power Investment B.V.			41,952			49.00	%		20,556			—			—			(82	)		20,474
Shuweihat Asia Operation & Maintenance Company			885			55.00	%		487			—			—			(1	)		486
Waterbury Lake Uranium L.P.			51,298			40.00	%		20,519			—			—			(220	)		20,299
ASM-BG Investicii AD			40,407			50.00	%		20,203			—			—			—			20,203
RES Technology AD			27,577			50.00	%		13,789			—			—			—			13,789
KV Holdings, Inc.			5,025			40.00	%		2,010			—			—			—			2,010
KEPCO SPC Power Corporation			277,292			75.20	%		208,524			—			—			—			208,524
Canada Korea Uranium Limited Partnership			181			12.50	%		23			—			—			(23	)		—
KEPCO Energy Resource Nigeria Limited			(36,677	)		30.00	%		(11,003	)		—			—			11,003			—
Gansu Datang Yumen Wind Power Co., Ltd.			40,268			40.00	%		16,107			—			—			—			16,107
Datang Chifeng Renewable Power Co., Ltd.			428,183			40.00	%		171,273			—			—			(49	)		171,224
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			26,449			40.00	%		10,580			—			—			—			10,580
Rabigh Electricity Company			347,631			40.00	%		139,052			—			(79,646	)		(38	)		59,368
Rabigh Operation & Maintenance Company			8,964			40.00	%		3,586			—			—			—			3,586
Jamaica Public Service Company Limited			428,282			40.00	%		171,313			(72,370	)		—			142,975			241,918
KW Nuclear Components Co., Ltd.			11,288			43.36	%		4,895			90			—			—			4,985
Busan Shinho Solar Power Co., Ltd.			14,714			25.00	%		3,678			—			—			—			3,678
GS Donghae Electric Power Co., Ltd.			589,452			34.00	%		200,414			—			—			(35	)		200,379
Global Trade Of Power System Co., Ltd.			1,469			29.00	%		426			—			—			—			426
Expressway Solar-light Power Generation Co., Ltd.			7,241			29.00	%		2,100			—			—			—			2,100
KODE NOVUS 1 LLC			(45,577	)		50.00	%		(22,789	)		4,732			—			18,057			—
KODE NOVUS 2 LLC			(22,806	)		49.00	%		(11,175	)		—			—			11,175			—
Daejung Offshore Wind Power Co., Ltd.			6,717			49.90	%		3,352			—			—			—			3,352
Amman Asia Electric Power Company			229,592			60.00	%		137,755			—			—			(87	)		137,668
KEPCO-ALSTOM Power Electronics Systems, Inc.			8,826			51.00	%		4,501			—			—			—			4,501
Dangjin Echo Power Co., Ltd.			136,037			34.00	%		46,253			2,696			—			(668	)		48,281
Honam Wind Power Co., Ltd.			13,427			29.00	%		3,894			32			—			—			3,926
Nepal Water & Energy Development Company Pty Ltd.			31,508			52.77	%		16,627			972			—			166			17,765
Chun-cheon Energy Co., Ltd.			106,931			29.90	%		31,972			3			—			1			31,976
Yeonggwangbaeksu Wind Power Co., Ltd.			17,788			15.00	%		2,668			—			—			—			2,668
Nghi Son 2 Power Ltd.			537			50.00	%		268			—			—			1			269
Kelar S.A			(30,482	)		65.00	%		(19,814	)		2,424			—			17,390			—
PT. Tanjung Power Indonesia			1,763			35.00	%		617			—			—			—			617
Incheon New Power Co., Ltd.			1,772			29.00	%		514			—			—			—			514
Seokmun Energy Co., Ltd.			(708	)		29.00	%		(205	)		—			—			205			—

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

F-96

(6)

As of December 31, 2014 and 2015, unrecognized equity interest in investments in associates and joint ventures whose book value has been reduced to zero due to accumulated losses are as follows:


		2014				2015
		Unrecognized equity interest		Accumulated unrecognized equity interest		Unrecognized equity interest			Accumulated unrecognized equity interest
		In millions of won
Green Biomass Co., Ltd.	￦		125		125		(125	)		—
Shin Pyeongtaek Power Co., Ltd.			288		288		1,038			1,326
KEPCO Energy Resource Nigeria Limited			6,358		6,358		4,645			11,003
Chun-cheon Energy Co., Ltd.			8		8		(8	)		—
Seokmun Energy Co., Ltd.			54		54		152			205
Kelar S.A			—		—		17,389			17,389
Hadong Mineral Fiber Co., Ltd.			—		—		5			5
PT. Mutiara Jawa			—		—		1,351			1,351
Eurasia Energy Holdings			—		—		188			188

(7)

As of December 31, 2015, 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.

Gemeng International Energy Co., Ltd., issued put options on 8% of its shares to its financial investors, KEPCO Woori Sprott PEF (NPS Co-Pa PEF). If the investment fund is not collected until the maturity date (December 25, 2023, two years extension is possible), PEF can exercise the option at strike price which is the same as a principal investment price (including operating fees ratio of below 1% per annum), and also, the Company provided a performance guarantee on this agreement.

(ii)

Hyundai Energy Co., Ltd.

As of December 31, 2015, Hyundai Energy Co., Ltd., an associate of the Company, which engages in the integrated energy business, entered into a project financing loan agreement with a limit of ￦450 billion with Korea Development Bank and others, and the Company guaranteed to create a certain amount of sales profit.

Related to the above project financing, NH Power II Co., Ltd. and National Agricultural Cooperative Federation (“NACF”) has entered into an agreement with Boim Energy Co., Ltd. to acquire shares in Hyundai Energy Co., Ltd. held by Boim Energy Co., Ltd. The Company had placed guarantees for a fixed return on the 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 NACF have a right, which can be exercised for 30 days starting from 2 months to 1 month prior to 17 years after the termination date of the contract to sell their shares to the Company. Also, if dividends to shareholders’ exceed annual revenue, the excessive amount shall be evenly distributed to Boim Energy Co., Ltd. and the Company.

(iii)

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 consideration of various factors such as financial status and business situation.

F-97

(iv)

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.

(v)

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.

(vi)

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.

(vii)

Dongducheon Dream Power Co., Ltd.

In case the financial investors decide to dispose of their shares in Dongducheon Dream Power Co., Ltd. within 1 year from the maturity date of subordinated loans, Dongducheon Dream Power Co., Ltd. is obligated to acquire those shares at the negotiated price.

(viii)

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.

(ix)

Samcheok Eco Material Co., Ltd.

The Company has the rights to purchase the stocks should preferred stockholders elect to sell their stocks on the expected sell date (3 years from preferred stock payment date) and is required to guarantee the promised yield when preferred stockholders sell their stocks.

(x)

Seokmun Energy Co., Ltd.

The Company has an obligation to invest an additional ￦15 billion in Seokmun Energy Co., Ltd. The obligation may be conducted through acquisition of new shares, converted shares or convertible bonds.

(xi)

Chun-cheon Energy Co., Ltd.

The Company has an obligation to acquire the converted shares up to un-invested balance when Chun-cheon Energy Co., Ltd. fails to repay the convertible bonds on the maturity date.

F-98

(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., KNOC Nigerian West Oil Co., Ltd. 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 when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained.
Changjuk Wind Power Co., Ltd.		Principals on subordinated loans or dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained.
Busan Solar Co., Ltd.		Dividends cannot be declared or paid without the prior written consent of the 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.
Pyeongchang Wind Power Co., Ltd.		Principals on subordinated loans or dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained.
Daegu Green Power Co., Ltd.		Only if the condition satisfies the terms of the loan agreements signed by financial institutions, the investors of subordinated credit facility loans can receive payments of principal and interest and dividend. KEB Hana Bank, the deputy, permits the amount of the payments and dividend.
KS Solar Corp. Ltd.		Dividends can only be paid when all conditions of a loan agreement are satisfied.
KNH Solar Co., Ltd.		Principal and interest, dividends to shareholders cannot be paid without written consent of financial institutions.
DS Power Co., Ltd.		Shares cannot be wholly or partially transferred, except as permitted by the agreement.
Hyundai Green Power Co., Ltd.		After 15 years from the completion date of facility which is financed by financial investor’s equity investment, the financial investor and the consolidated entity have appraisal right against Hyundai Steel Company (the “Operating investor”) and the Operating investor can also claim against the financial investor to sell their shares. After 5 years from the completion date of additional facility, the Operating investor has appraisal right against the consolidated entity and the financial investor when self-generating electricity is more profitable to Hyundai Steel Company’s cash flow rather than this business After 5 years from the completion date of the additional facility, if there exists an agreement among those relevant parties, the Operating investor may claim to dispose the entire shares of the consolidated entity and the shares owned by financial investor to the Operating investor or to the third parties which designated by the Operating investor. After 25 years from the completion date or when operation of electricity generation business by Hyundai Green Power Co., Ltd. is no longer feasible, the Operating investor may claim to dispose the entire the shares of the consolidated entity and shares owned by financial investor to the Operating investor or to third parties which are designated by the Operating investor. After 5 years from the completion date of additional facility, if there is no agreement reached within 60 days, even if price of fuel supply fluctuates due to statutory or other force majeure reasons so that Hyundai Green Power Co., Ltd. would face excessive gain or loss, the Operating investor (consolidated entity and financial investor) may claim against the consolidated entity and the financial investor (Operating investor) to dispose (acquire) the entire shares.

F-99

18.

Property, Plant and Equipment

(1)

Property, plant and equipment as of December 31, 2014 and 2015 are as follows:


		2014
		Acquisition cost		Government grants			Accumulated depreciation			Accumulated impairment *losses()**			Book value
		In millions of won
Land	￦		12,238,488		(3,103	)		—			—			12,235,385
Buildings			13,631,985		(67,700	)		(4,652,109	)		(853	)		8,911,323
Structures			54,734,376		(196,871	)		(16,078,416	)		(1,183	)		38,457,906
Machinery			52,242,176		(108,750	)		(16,735,238	)		(46,230	)		35,351,958
Ships			5,015		—			(3,930	)		—			1,085
Vehicles			208,337		(76	)		(157,761	)		—			50,500
Equipment			965,806		(1,002	)		(754,159	)		—			210,645
Tools			776,321		(862	)		(623,544	)		—			151,915
Construction-in-progress			32,417,619		(123,938	)		—			(38,107	)		32,255,574
Finance lease assets			2,385,251		—			(1,772,856	)		—			612,395
Asset retirement costs			7,849,712		—			(2,495,285	)		—			5,354,427
Others			8,599,484		—			(6,380,098	)		—			2,219,386

	￦		186,054,570		(502,302	)		(49,653,396	)		(86,373	)		135,812,499


		2015
		Acquisition cost		Government grants			Accumulated depreciation			Accumulated impairment *losses()**			Book value
		In millions of won
Land	￦		12,396,460		(3,147	)		—			—			12,393,313
Buildings			14,936,722		(63,932	)		(5,259,436	)		(854	)		9,612,500
Structures			58,251,296		(193,119	)		(17,991,950	)		(1,184	)		40,065,043
Machinery			57,143,211		(108,935	)		(20,242,232	)		(36,230	)		36,755,814
Ships			4,930		—			(4,144	)		—			786
Vehicles			227,733		(29	)		(167,261	)		—			60,443
Equipment			1,134,376		(1,026	)		(823,805	)		—			309,545
Tools			836,131		(691	)		(675,501	)		—			159,939
Construction-in- progress			35,305,133		(139,898	)		—			(38,107	)		35,127,128
Finance lease assets			2,389,985		—			(1,878,476	)		—			511,509
Asset retirement costs			6,888,547		—			(2,782,460	)		—			4,106,087
Others			9,438,381		—			(7,179,137	)		—			2,259,244

	￦		198,952,905		(510,777	)		(57,004,402	)		(76,375	)		141,361,351

(*)

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

F-100

(2)

Changes in property, plant and equipment for the years ended December 31, 2014 and 2015 are as follows:


		2014
		Beginning balance			Acquisition			Disposal			Depreciation			*Impairment(1)**			*Others(2)**			Ending balance
		In millions of won
Land	￦		13,784,026			69,926			(32,912	)		—			—			(1,582,552	)		12,238,488
(Government grants)			(3,137	)		—			63			—			—			(29	)		(3,103	)
Buildings			8,549,697			32,000			(10,706	)		(590,298	)		—			998,330			8,979,023
(Government grants)			(45,396	)		—			200			5,040			—			(27,544	)		(67,700	)
Structures			37,819,108			3,184			(414,659	)		(2,030,010	)		—			3,277,154			38,654,777
(Government grants)			(193,190	)		—			2,018			8,921			—			(14,620	)		(196,871	)
Machinery			33,729,539			271,073			(207,070	)		(3,633,815	)		—			5,300,981			35,460,708
(Government grants)			(101,808	)		—			423			10,102			—			(17,467	)		(108,750	)
Ships			1,422			—			—			(342	)		—			5			1,085
Vehicles			45,719			2,295			(25	)		(21,096	)		—			23,683			50,576
(Government grants)			(83	)		—			—			47			—			(40	)		(76	)
Equipment			187,158			56,214			(171	)		(85,612	)		—			54,058			211,647
(Government grants)			(708	)		—			—			376			—			(670	)		(1,002	)
Tools			139,665			30,806			(1,642	)		(61,113	)		—			45,061			152,777
(Government grants)			(313	)		—			55			144			—			(748	)		(862	)
Construction-in-progress			27,452,029			14,112,746			(1,078	)		—			(38,107	)		(9,146,078	)		32,379,512
(Government grants)			(117,725	)		(42,150	)		—			—			—			35,937			(123,938	)
Finance lease assets			735,185			—			(348	)		(122,088	)		—			(354	)		612,395
Asset retirement cost			5,654,596			—			—			(573,497	)		—			273,328			5,354,427
Others			2,001,812			11,405			(53	)		(702,985	)		—			909,207			2,219,386

	￦		129,637,596			14,547,499			(665,905	)		(7,796,226	)		(38,107	)		127,642			135,812,499

(*1)

Garolim Tidal Power Plant Co., Ltd. (“GTPP”), a 49% owned subsidiary, has not yet started its operation and it is not expected to operate based on the results of the business feasibility study. The Company has considered this to be an impairment indicator and performed an impairment test over the individual assets of GTPP. As a result, the Company recognized the amount of the carrying amount in excess of its recoverable amount as impairment loss in the consolidated statements of comprehensive income or loss.

(*2)

‘Others’ include ￦2,090,810 million of assets held for sale (note 42) comprising land, buildings, and structures and the amount is ￦2,021,445 million, ￦69,363 million, and ￦2 million, respectively.

F-101


		2015
		Beginning balance			Acquisition			Disposal			Depreciation			*Impairment(1)**			*Others(2)**			Ending balance
		In millions of won
Land	￦		12,238,488			9,370			(192,496	)		—			—			341,098			12,396,460
(Government grants)			(3,103	)		—			—			—			—			(44	)		(3,147	)
Buildings			8,979,023			12,466			(42,889	)		(633,770	)		—			1,361,602			9,676,432
(Government grants)			(67,700	)		—			—			5,064			—			(1,296	)		(63,932	)
Structures			38,654,777			1,787			(181,914	)		(2,120,749	)		—			3,904,261			40,258,162
(Government grants)			(196,871	)		—			1,816			9,178			—			(7,242	)		(193,119	)
Machinery			35,460,708			430,524			(250,915	)		(3,880,076	)		(1,205	)		5,105,713			36,864,749
(Government grants)			(108,750	)		—			1,101			11,133			—			(12,419	)		(108,935	)
Ships			1,085			—			—			(299	)		—			—			786
Vehicles			50,576			5,449			(27	)		(22,175	)		—			26,649			60,472
(Government grants)			(76	)		—			1			47			—			(1	)		(29	)
Equipment			211,647			56,004			(230	)		(103,889	)		—			147,039			310,571
(Government grants)			(1,002	)		—			—			469			—			(493	)		(1,026	)
Tools			152,777			25,940			(90	)		(67,482	)		—			49,485			160,630
(Government grants)			(862	)		—			—			268			—			(97	)		(691	)
Construction-in-progress			32,379,512			13,508,590			(13,658	)		—			(29,139	)		(10,578,279	)		35,267,026
(Government grants)			(123,938	)		(27,239	)		—			—			—			11,279			(139,898	)
Finance lease assets			612,395			1,560			(3,959	)		(110,162	)		—			11,675			511,509
Asset retirement cost			5,354,427			—			—			(551,461	)		—			(696,879	)		4,106,087
Others			2,219,386			25,436			(98	)		(804,545	)		—			819,065			2,259,244

	￦		135,812,499			14,049,887			(683,358	)		(8,268,449	)		(30,344	)		481,116			141,361,351

(*1)

Korea South-East Power Co., Ltd. and Korea East-West Power Co., Ltd, 100% owned subsidiaries, have determined that there is an impairment indicator and performed an impairment test over the individual assets. As a result, the Company recognized the amount of the carrying amount in excess of its recoverable amount as impairment loss in the consolidated statements of comprehensive income or loss.

(*2)

‘Others’ include ￦23,273 million of assets held for sale (note 42) comprising land and buildings and the amount is ￦2,907 million and ￦20,366 million, respectively.

F-102

19.

Investment Properties

(1)

Investment properties as of December 31, 2014 and 2015 are as follows:


		2014
		Acquisition cost		Government grants			Accumulated depreciation			Book value
		In millions of won
Land	￦		301,483		—			—			301,483
Buildings			26,168		(10	)		(10,377	)		15,781

	￦		327,651		(10	)		(10,377	)		317,264


		2015
		Acquisition cost		Government grants			Accumulated depreciation			Book value
		In millions of won
Land	￦		253,960		—			—			253,960
Buildings			27,655		(13	)		(11,692	)		15,950

	￦		281,615		(13	)		(11,692	)		269,910

(2)

Changes in investment properties for the years ended December 31, 2014 and 2015 are as follows:


		2014
		Beginning balance			Depreciation			Others			Ending balance
		In millions of won
Land	￦		516,440			—			(214,957	)		301,483
Buildings			21,899			(824	)		(5,284	)		15,791
(Government grants)			(12	)		4			(2	)		(10	)

	￦		538,327			(820	)		(220,243	)		317,264


		2015
		Beginning balance			Depreciation			Others			Ending balance
		In millions of won
Land	￦		301,483			—			(47,523	)		253,960
Buildings			15,791			(669	)		841			15,963
(Government grants)			(10	)		—			(3	)		(13	)

	￦		317,264			(669	)		(46,685	)		269,910

F-103

(3)

Income and expenses related to investment properties for the years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Rental income	￦		10,986			10,931
Operating and maintenance expenses related to rental income			(820	)		(669	)

	￦		10,166			10,262

(4)

Fair value of investment properties as of December 31, 2014 and 2015 are as follows:


		2014				2015
		Book value		Fair value		Book value		Fair value
		In millions of won
Land	￦		301,483		342,809		253,960		284,423
Buildings			15,781		16,523		15,950		18,263

	￦		317,264		359,332		269,910		302,686

The fair values of the investment properties as of the reporting date were determined in consideration of the fluctuation on the publicly announced individual land price after the 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 years ended December 31, 2014 and 2015 are as follows:

2014

Beginning
balance

Increase and
decrease(*)

Recognized
revenue

Ending
balance

In millions of won

Nuclear power plant construction in UAE and others

￦

19,333,416

712,843

(2,965,185

)

17,081,074

(*)

For the year ended December 31, 2014, the increased balance of contracts from new orders and other is ￦831,159 million and the decreased balance of contracts from changes in size of construction is ￦118,316 million.


		2015
		Beginning balance		Increase and decrease(*)			Recognized revenue			Ending balance
		In millions of won
Nuclear power plant construction in UAE and others	￦		17,081,074		(1,011,031	)		(3,761,204	)		12,308,839

(*)

For the year ended December 31, 2015, the increased balance of contracts from new orders and other is ￦412,617 million and the decreased balance of contracts from changes in size of construction is ￦1,423,648 million.

F-104

(2)

Accumulated earned revenue, expense and others related to the Company’s construction as of December 31, 2014 and 2015 are as follows:

2014

Accumulated
earned revenue

Accumulated
expense

Accumulated
profit

Unearned
advance receipts

In millions of won

Nuclear power plant construction in UAE and others

￦

8,750,886

8,261,084

489,802

—

2015

Accumulated
earned revenue

Accumulated
expense

Accumulated
profit

Unearned
advance receipts

In millions of won

Nuclear power plant construction in UAE and others

￦

12,224,934

11,573,516

651,418

—

(3)

Gross amount due from customers recognized as assets and due to customers recognized as liabilities for contract work as of December 31, 2014 and 2015 are as follows:

2014

2015

Assets(*1)

Liabilities
(*2)

Assets
(*1)

Liabilities
(*2)

In millions of won

Nuclear power plant construction in UAE and others

￦

149,876

935,832

55,317

893,992

(*1)

Included in trade and other receivables, net, in the consolidated statements of financial position.

(*2)

Included in non-financial liabilities in the consolidated statements of financial position.

F-105

21.

Intangible Assets other than Goodwill

(1)

Intangible assets as of December 31, 2014 and 2015 are as follows:


		2014
		Acquisition cost		Government grants			Accumulated amortization			Accumulated impairment losses			Book value
		In millions of won
Software	￦		354,443		(488	)		(301,887	)		—			52,068
Licenses and franchises			3,398		—			(3,344	)		—			54
Copyrights, patents rights and other industrial rights			31,929		—			(9,252	)		—			22,677
Mining rights			510,869		—			(6,655	)		—			504,214
Development expenditures			730,401		(8,183	)		(674,544	)		—			47,674
Intangible assets under development			74,909		(10,692	)		—			—			64,217
Usage rights of donated assets and other			375,275		(43	)		(317,588	)		—			57,644
Leasehold rights			19,112		—			(18,333	)		—			779
Others			156,503		(1	)		(72,180	)		(12,589	)		71,733

	￦		2,256,839		(19,407	)		(1,403,783	)		(12,589	)		821,060


		2015
		Acquisition cost		Government grants			Accumulated amortization			Accumulated impairment losses			Book value
		In millions of won
Software	￦		389,220		(699	)		(331,334	)		—			57,187
Licenses and franchises			3,398		—			(3,398	)		—			—
Copyrights, patents rights and other industrial rights			34,178		—			(12,303	)		—			21,875
Mining rights			508,392		—			(8,855	)		—			499,537
Development expenditures			751,784		(6,835	)		(699,977	)		—			44,972
Intangible assets under development			94,886		(10,483	)		—			—			84,403
Usage rights of donated assets and other			375,275		(32	)		(326,684	)		—			48,559
Leasehold rights			19,112		—			(18,367	)		—			745
Greenhouse gas emissions rights			805		—			—			—			805
Others			189,941		(1	)		(80,067	)		(12,124	)		97,749

	￦		2,366,991		(18,050	)		(1,480,985	)		(12,124	)		855,832

F-106

(2)

Changes in intangible assets for as of December 31, 2014 and 2015 are as follows:


		2014
		Beginning balance			Acquisition			Disposal			Amortization			Impairment			Others			Ending balance
		In millions of won
Software	￦		65,751			7,135			—			(32,423	)		—			12,093			52,556
(Government grants)			(430	)		—			—			154			—			(212	)		(488	)
Licenses and franchises			208			—			—			(154	)		—			—			54
Copyrights, patents rights and other industrial rights			24,953			451			—			(2,965	)		—			238			22,677
Mining rights			470,558			28,472			—			(1,945	)		—			7,129			504,214
Development expenditures			76,154			47			(1,810	)		(28,555	)		—			10,021			55,857
(Government grants)			(11,705	)		—			—			4,125			—			(603	)		(8,183	)
Intangible assets under development			52,050			33,202			(170	)		—			(11	)		(10,162	)		74,909
(Government grants)			(7,792	)		(3,597	)		170			—			—			527			(10,692	)
Usage rights of donated assets and other			64,710			—			—			(8,875	)		—			1,852			57,687
(Government grants)			(53	)		—			—			10			—			—			(43	)
Leasehold rights			812			—			—			(33	)		—			—			779
Others			75,449			2,914			(5	)		(5,752	)		(31	)		(841	)		71,734
(Government grants)			(1	)		—			—			—			—			—			(1	)

	￦		810,664			68,624			(1,815	)		(76,413	)		(42	)		20,042			821,060


		2015
		Beginning balance			Acquisition			Disposal			Amortization			Impairment			Others			Ending balance
		In millions of won
Software	￦		52,556			10,477			(2	)		(29,795	)		187			24,463			57,886
(Government grants)			(488	)		—			—			177			—			(388	)		(699	)
Licenses and franchises			54			—			—			(54	)		—			—			—
Copyrights, patents rights and other industrial rights			22,677			129			(2	)		(2,866	)		—			1,937			21,875
Mining rights			504,214			23,151			—			(228	)		—			(27,600	)		499,537
Development expenditures			55,857			8,096			(5	)		(24,862	)		—			12,721			51,807
(Government grants)			(8,183	)		—			—			2,937			—			(1,589	)		(6,835	)
Intangible assets under development			74,909			40,300			—			—			(22	)		(20,301	)		94,886
(Government grants)			(10,692	)		(1,884	)		—			—			—			2,093			(10,483	)
Usage rights of donated assets and other			57,687			—			—			(9,096	)		—			—			48,591
(Government grants)			(43	)		—			—			11			—			—			(32	)
Leasehold rights			779			—			—			(34	)		—			—			745
Greenhouse gas emissions rights			—			805			—			—			—			—			805
Others			71,734			6,872			(443	)		(8,456	)		88			27,955			97,750
(Government grants)			(1	)		—			—			—			—			—			(1	)

	￦		821,060			87,946			(452	)		(72,266	)		253			19,291			855,832

F-107

(3)

Significant specific intangible assets as of December 31, 2014 and 2015 are as follows:


2014
Type	Description	Currency	Amount		Remaining useful years
	In millions of won and thousands of Australian dollars
Software	ERP system and others	KRW		6,583	6 months ~ 1 years and 2 months
Copyrights, patents rights and other industrial rights	Smart technology verification and standard design project conducting right	KRW		7,750	7 years and 9months
Mining rights	Mining right of Bylong mine	AUD		401,225	— (*)
Development expenditures	KOSPO Evolutionary Efficient & Powerful System(KEEPS)	KRW		5,381	2 years and 6months
Development expenditures	Development of maintenance system for utility plant	KRW		1,649	2 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		8,396	—
Usage rights of donated assets	Songdo international business district(sector 1, 3) sharing charge	KRW		4,316	2 years and 10 months
Usage rights of donated assets	Dangjin power plant load facility usage right	KRW		39,352	6 years and 3 months
Others	Shingwangju electricity supply facility usage right	KRW		2,969	4 years and 5 months
Others	Sillim electricity supply facility usage right	KRW		3,089	6 years and 11 months

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


2015
Type	Description	Currency	Amount		Remaining useful years
	In millions of won and thousands of Australian dollars
Software	ERP system and others	KRW		1,293	2 months ~ 2 years and 11 months
Copyrights, patents rights and other industrial rights	Smart technology verification and standard design project conducting right	KRW		6,750	6 years and 9 months
Mining rights	Mining right of Bylong mine	AUD		401,225	— (*)
Development expenditures	KOSPO Evolutionary Efficient & Powerful System(KEEPS)	KRW		2,104	1 years and 6 months
Development expenditures	Development of maintenance system for utility plant	KRW		1,084	1 years and 11 months
Intangible assets under development	Contributions to APR NRC DC	KRW		29,148	—
Intangible assets under development	CHF testing for best representative of HIPER/X2-Gen Fuel and development of best explanatory CHF correlation	KRW		9,871	—
Usage rights of donated assets	Songdo international business district(sector 1, 3) sharing charge	KRW		2,793	1 years and 10 months
Usage rights of donated assets	Dangjin power plant load facility usage right	KRW		33,055	5 years and 3 months
Others	Shingwangju electricity supply facility usage right	KRW		2,297	3 years and 5 months
Others	Sillim electricity supply facility usage right	KRW		2,642	5 years and 11 months

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

(4)

For the years ended December 31, 2014 and 2015, the Company recognized research and development expenses of ￦545,735 million and ￦611,220 million, respectively.

F-108

22.

Trade and Other Payables

Trade and other payables as of December 31, 2014 and 2015 are as follows:


		2014				2015
		Current		Non-current		Current		Non-current
		In millions of won
Trade payables	￦		3,123,341		—		1,957,647		—
Other trade payables			1,600,102		3,017,428		1,379,035		3,048,299
Accrued expenses			1,126,357		2,411		1,082,880		2,373
Leasehold deposits received			2,020		—		2,451		—
Other deposits received			166,143		96,531		195,237		105,105
Finance lease liabilities			109,374		660,061		116,885		542,509
Dividends payable			1,267		—		1,562		—
Others (*)			—		30,304		—		20,149

	￦		6,128,604		3,806,735		4,735,697		3,718,435

(*)

Details of others as of December 31, 2014 and 2015 are as follows:


		2014				2015
		Current		Non- current		Current		Non- current
		In millions of won
Advance received from local governments	￦		—		30,304		—		20,149

	￦		—		30,304		—		20,149

F-109

23.

Borrowings and Debt Securities

(1)

Borrowings and debt securities as of December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Current liabilities
Short-term borrowings	￦		658,778			603,673
Current portion of long-term borrowings			455,484			541,307
Current portion of debt securities			5,994,205			6,704,602
Less : Current portion of discount on long-term borrowings			(908	)		(953	)
Less : Current portion of discount on debt securities			(2,807	)		(1,676	)

			7,104,752			7,846,953

Non-current liabilities
Long-term borrowings			3,490,700			1,951,119
Debt securities			52,359,905			49,077,131
Less : Discount on long-term borrowings			(15,494	)		(18,860	)
Less : Discount on debt securities			(115,807	)		(103,067	)
Add: Premium on debt securities			271			223

			55,719,575			50,906,546

	￦		62,824,327			58,753,499

(2)

Repayment schedule of borrowings and debt securities as of December 31, 2014 and 2015 are as follows:


2014
Type		Borrowings		Debt Securities
		In millions of won
Less than 1 year	￦		1,114,262		5,994,205
1~ 5 years			2,259,172		27,748,466
Over 5 years			1,231,528		24,611,439

	￦		4,604,962		58,354,110


2015
Type		Borrowings		Debt Securities
		In millions of won
Less than 1 year	￦		1,144,980		6,704,602
1~ 5 years			860,351		27,725,651
Over 5 years			1,090,768		21,351,480

	￦		3,096,099		55,781,733

F-110

(3)

Short-term borrowings as of December 31, 2014 and 2015 are as follows:

2014

Type

Creditor

Interest rate (%)

Maturity

Foreign
currency

Local
currency

In millions of won and thousands of U.S. dollars

Local short-term borrowings

KTB Investment Bank

2.12

2015.01.02

—

￦

310,000

Local commercial paper

Shinhan Bank and others

2.12~2.20

2015.01.26

—

310,000

Foreign short-term borrowings

Mizuho Bank and others

0.47~6.50

2015.01.02~

2015.12.03

USD 16,366

17,990

Local bank overdraft

Woori Bank

Standard overdraft
rate+1.27

2015.02.25

—

20,788

￦

658,778

2015

Type

Creditor

Interest rate (%)

Maturity

Foreign
currency

Local
currency

In millions of won and thousands of U.S. dollars

Local short-term borrowings

Woori Investment Bank and others

1.8~2.46

2016.01.04~

2016.09.13

—

￦

559,530

Foreign short-term borrowings

ING and others

6.50

2016.12.03

USD 2,163

2,535

Foreign short-term borrowings

Citi Bank and others

3M Libor+0.35

2016.03.22

USD 12,265

14,375

Local bank overdraft

Woori Bank

Standard overdraft
rate+1.12

2016.02.25

—

27,233

￦

603,673

F-111

(4)

Long-term borrowings as of December 31, 2014 and 2015 are as follows:


2014
Type		Interest rate (%)	Maturity	Foreign currency	Local currency
		In millions of won and thousands of foreign currencies
Local long-term borrowings
Korea Development Bank	Others	0.50	2015~2044	—	￦	7,178
	Facility	4.60	2028	—		43,600
	Facility	3yr KTB rate-1.25	2027	—		9,000
	Facility	1yr KoFC bond rate+ 0.20~0.31	2018~2019	—		1,500,000
KEB Hana Bank	Commercial Paper	3M CD+0.03~0.54	2015~2017	—		900,000
	Facility	3yr KTB rate-1.25	2021~2028	—		11,071
	Facility	4.60	2028	—		20,000
	Energy rationalization	3yr KTB rate-1.25	2019	—		850
	Energy rationalization	3.20~3.70	2016	—		3,835
Korea Industrial Bank	Others	3yr KTB rate-1.25	2016	—		8,000
KEB Hana Bank	PF Refinancing	CD+1.70	2026	—		21,613
	PF Refinancing	4.80	2026	—		11,992
Export-Import Bank of Korea	Project loans	2.00	2026	—		33,881
Korea Resources Corporation	Development of power resources	3yr KTB rate-2.25	2022~2027	—		48,167
	Facility	3yr KTB rate-2.25	2023~2024	—		4,958
	Project loans	—	2022~2027	—		8,677
	Others	3yr KTB rate-2.25	2024~2025	—		13,661
Shinhan Bank and others	Facility	3yr AA- CB rate+ 1.10	2028	—		30,000
	Operating	3.35	2017	—		10,000
Woori Bank	PF Refinancing	CD+1.70	2023~2026	—		21,613
	PF Refinancing	4.80	2026	—		11,991
Kookmin Bank	Facility	MOR+0.62	2017	—		6,600
Others	Facility	4.60~5.80	2025~2028	—		157,320
	Facility	3yr AA- CB rate+ 1.10	2028	—		20,000
	PF Refinancing	4.80	2026	—		17,267
	PF Refinancing	CD+1.70	2026	—		523
	Others	—	—	—		38,981
	Others	—	2028	—		7,250

						2,968,028

Foreign long-term borrowings
Korea National Oil Corporation	Project loans	—	2021~2023	USD 8,784		9,656
Export-Import Bank of Korea and others	Direct loan and others	3M Libor+2.60~3.70	2027	JOD 197,907		307,324
SCNT and others	Commercial loan and others	3M Libor+1.50~2.50	2015~2033	USD 308,697		339,320
	Shareholder’s loan	6.50~8.00	2033~2034	USD 35,165		38,654
	Shareholder’s loan	8.00	2031	JOD 8,498		13,197
PT PJB and others	Shareholder’s loan	12.75	2017	IDR 22,307,699		1,970
HSBC and others	Syndicated loan	3M Libor+0.27~1.50	2017~2019	USD 52,949		58,201
Others	Others	3M Libor+0.95	2016	USD 180,893		198,838
	Others	—	2019	USD 10,004		10,996

						978,156

						3,946,184

Less : Discount of long-term borrowings						(16,402)
Less : Current portion of long-term borrowings						(455,484)
Add : Current portion of discount of long-term borrowings						908

					￦	3,475,206

F-112


2015
Type		Interest rate (%)	Maturity	Foreign currency	Local currency
		In millions of won and thousands of foreign currencies
Local long-term borrowings
Korea Development Bank	Others	0.50	2018~2044	—		￦6,418
	Facility	2.67~4.60	2023~2028	—		52,437
	Facility	3yr KTB rate-1.25	2027	—		9,000
	Facility	1yr KoFC bond rate +0.31	2018	—		200,000
	Operating funds	2.75	2018	—		12,000
KEB Hana Bank	Commercial Paper	3M CD+0.03~0.54	2016~2017	—		500,000
	Facility	3yr KTB rate-1.25	2021~2028	—		10,363
	Facility	4.60	2028	—		18,411
	Energy rationalization	3yr KTB rate-1.25	2019	—		650
	Energy rationalization	3.20~3.70	2021~2022	—		3,835
Korea Industrial Bank	PF Refinancing	CD+1.25	2030	—		22,500
	Others	3yr KTB rate-1.25	2016	—		4,000
Export-Import Bank of Korea	Project loans	2.00	2026	—		30,935
Korea Resources Corporation	Development of power resources	3yr KTB rate-2.25	2022~2027	—		44,674
	Facility	3yr KTB rate-2.25	2023~2024	—		4,400
	Project loans	—	2022~2027	—		8,677
	Others	3yr KTB rate-2.25	2024~2025	—		13,057
Shinhan Bank and others	Collateral borrowing	2.22	2017	—		30,000
	Facility	3yr AA- CB rate+1.10	2028	—		27,617
	Operating funds	2.70~3.35	2017~2018	—		25,000
Kookmin Bank	Facility	MOR+0.62~0.79	2017~2023	—		25,300
Others	Facility	4.60~5.80	2025~2028	—		144,359
	Facility	3yr AA- CB rate+1.10	2028	—		18,411
	PF Refinancing	4.10	2030	—		62,500
	Others	—	2020~2036	—		45,847
	Others	—	2028	—		7,250

						1,327,641

Foreign long-term borrowings
Korea National Oil Corporation	Project loans	—	2021~2023	USD 8,744		10,248
Export-Import Bank of Korea and others	Direct loan and others	3M Libor+ 2.75~3.70	2027	JOD 188,580		312,104
	Commercial loan and others	3M Libor+1.50~2.50	2030~2033	USD 312,601		366,368
	PF Loan	6M Libor+2.50~2.70	2032	USD 64,389		75,464
SCNT and others	Shareholder’s loan	6.50~8.00	2023	USD 34,924		40,931
	Shareholder’s loan	8.00	2031	JOD 7,128		11,797
PT PJB and others	Shareholder’s loan	12.75	2017	IDR 22,346,550		1,899
HSBC and others	Syndicated loan	3M Libor+0.30~0.50	2017~2019	USD 31,774		37,239
IFC and others	Others	6M Libor+5.00	2031	PKR 5,891,200		65,805
Others	Others	3M Libor+0.65	2017	USD 199,269		233,543
	Others	—	2019	USD 8,010		9,387

						1,164,785

						2,492,426

Less : Discount of long-term borrowings						(19,813)
Less : Current portion of long-term borrowings						(541,307)
Add : Current portion of discount of long-term borrowings						953

						￦ 1,932,259

F-113

(5)

Local debt securities as of December 31, 2014 and 2015 are as follows:


	Issue date		Maturity		Interest rate (%)		2014			2015
	In millions of won
Electricity Bonds(*)		2009.02.06~ 2014.08.27		2016.01.27~ 2033.08.06	2.73~5.80	￦		25,820,000			22,960,000
Electricity Bonds		2012.05.29 ~ 2013.06.25		2016.05.29 ~ 2018.06.25	3M CD +0.25~0.32			1,160,000			910,000
Corporate Bonds		2009.05.04~ 2015.11.11		2016.03.13~ 2040.12.10	1.90~5.84			19,570,010			20,710,010

								46,550,010			44,580,010

Less : Discount on local debt securities								(43,517	)		(40,228	)
Less : Current portion of local debt securities								(4,400,000	)		(5,730,000	)
Add : Current portion of discount on local debt securities								611			1,187

						￦		42,107,104			38,810,969

(*)	Electricity Bonds 885 (￦40,000 million) can be redeemed every April 28 after three years from its issue date, April 28, 2014.

(6)

Foreign debt securities as of December 31, 2014 and 2015 are as follows:

2014

Type

Issue date

Maturity

Interest rate (%)

Foreign currency

Local currency

In millions of won and thousands of foreign currencies

FY-96(*1)

1996.04.01~

1996.12.06

2026.12.06~

2096.04.01

6.00~8.37

USD 249,470

￦

274,217

FY-97

1997.01.31~

1997.08.04

2027.01.31~

2027.08.04

6.75~7.00

USD 314,717

345,937

FY-04(*2)

2004.04.21

2034.04.21

5.13

USD 286,920

315,382

FY-06

2006.03.14~

2006.09.29

2016.03.14~

2016.09.29

5.50~6.00

USD 650,000

714,480

FY-08

2008.11.27

2018.11.27

4.19

JPY 20,000,000

184,028

FY-10

2010.09.16~

2010.10.05

2015.09.16~

2015.10.05

3.00~3.13

USD 1,200,000

1,319,040

FY-10

2010.07.29~

2010.11.18

2015.07.29~

2015.11.18

3M Libor+1.00~1.64

USD 250,000

274,800

FY-11

2011.07.13~

2011.07.29

2017.01.30~

2021.07.13

3.63~4.75

USD 800,000

879,360

FY-12

2012.05.10~

2012.09.19

2017.05.10~

2022.09.19

2.50~3.13

USD 1,750,000

1,923,600

FY-13

2013.02.05~

2013.11.27

2018.02.05~

2018.11.27

1.88~2.88

USD 1,900,000

2,088,480

FY-13

2013.09.26~

2013.10.23

2018.04.23~

2019.03.26

1.50~1.63

CHF 400,000

444,572

FY-13

2013.09.25

2020.09.25

5.75

AUD 325,000

292,204

FY-13

2013.02.20~

2013.07.25

2018.02.20~

2018.07.25

3M Libor+0.84~1.50

USD 500,000

549,600

FY-14

2014.02.11~

2014.12.02

2019.02.11~

2029.07.30

2.38~2.75

USD 1,500,000

1,648,800

FY-14

2014.01.28~

2014.07.31

2017.01.28~

2017.07.31

3M Libor+0.55~1.50

USD 500,000

549,600

11,804,100

Less : Discount on foreign debt securities

(75,097

)

Add : Premium on debt securities

271

Less : Current portion of foreign debt securities

(1,594,205

)

Add : Current portion of discount on foreign debt securities

2,196

￦

10,137,265

F-114


	2015
Type	Issue date		Maturity		Interest rate (%)	Foreign currency			Local currency
	In millions of won and thousands of foreign currencies
FY-96(*1)		1996.04.01~ 1996.12.06		2026.12.06~ 2096.04.01	6.00~8.37	USD	249,136	￦		291,990
FY-97		1997.01.31~ 1997.08.04		2027.02.01~ 2027.08.01	6.75~7.00	USD	314,717			368,848
FY-04(*2)		2004.04.23		2034.04.23	5.13	USD	286,920			336,270
FY-06		2006.03.14~ 2006.09.29		2016.03.14~ 2016.09.29	5.50~6.00	USD	650,000			761,800
FY-08		2008.11.27		2018.11.27	4.19	JPY	20,000,000			194,401
FY-11		2011.07.13~ 2011.07.29		2017.01.30~ 2021.07.13	3.63~4.75	USD	800,000			937,600
FY-12		2012.05.10~ 2012.09.19		2017.05.10~ 2022.09.19	2.50~3.13	USD	1,750,000			2,051,000
FY-13		2013.02.05~ 2013.11.27		2018.02.05~ 2018.11.27	1.88~2.88	USD	1,900,000			2,226,800
FY-13		2013.09.26~ 2013.10.23		2019.03.26~ 2019.04.23	1.50~1.63	CHF	400,000			474,156
FY-13		2013.09.25		2020.09.25	5.75	AUD	325,000			277,258
FY-13		2013.02.20~ 2013.07.25		2018.02.20~ 2018.07.25	3M Libor+0.84~1.50	USD	500,000			586,000
FY-14		2014.02.11~ 2014.12.02		2019.02.11~ 2029.07.30	2.38~3.57	USD	1,500,000			1,758,000
FY-14		2014.01.28~ 2014.07.31		2017.01.28~ 2017.07.31	3M Libor+0.55~1.50	USD	500,000			586,000
FY-15		2015.06.15		2025.06.15	3.25	USD	300,000			351,600

										11,201,723

Less : Discount on foreign debt securities										(64,515	)
Add : Premium on debt securities										223
Less : Current portion of foreign debt securities										(974,602	)
Add : Current portion of discount on foreign debt securities										489

								￦		10,163,318

(*1)

For Yankee 3 in FY-96, early redemption would be executed when the debt security holder requests early redemption between February 1, 2016 (60 days before April 1, 2016) and March 1, 2016 (30 days before April 1, 2016).

(*2)

For Global 4 in FY-04, early redemption of USD 13,080,000 was requested during the year ended December 31, 2014 and the remaining amount is USD 286,920,000 as of December 31, 2015.

F-115

24.

Finance Lease Liabilities

(1)

Lease contracts

The Company entered into a power purchase agreements (“PPA”) with 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 December 31, 2014 and 2015 are as follows and are included in current and non-current trade and other payables, net, in the consolidated statements of financial position:


		2014				2015
		Minimum lease payments		Present value of minimum lease payments		Minimum lease payments		Present value of minimum lease payments
		In millions of won
Less than 1 year	￦		184,809		109,374		182,072		116,885
1 ~ 5 years			619,828		459,302		525,465		393,957
More than 5 years			294,032		200,759		206,323		148,552

	￦		1,098,669		769,435		913,860		659,394

(3)

Current and non-current portion of financial lease liabilities as of December 31, 2014 and 2015 are as follows:


		2014		2015
		In millions of won
Current finance lease liabilities	￦		109,374		116,885
Non-current finance lease liabilities			660,061		542,509

	￦		769,435		659,394

(4)

Lease payments recognized as an expense from a lessee position for the years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Minimum lease payment	￦		240,230			194,960
Contingent rent payment			(17,402	)		(17,682	)

(5)

The Company does not have any irrevocable operating lease contracts as of December 31, 2014 and 2015.

F-116

25.

Employment Benefits

(1)

Employment benefit obligations as of December 31, 2014 and 2015 are as follows:


		2014		2015
		In millions of won
Defined benefit obligations	￦		1,268,197		1,495,782
Other long-term employee benefit obligations			9,218		7,325

	￦		1,277,415		1,503,107

(2)

Principal assumptions on actuarial valuation as of December 31, 2014 and 2015 are as follows:


	2014	2015
Discount rate	2.86%~4.07%	2.39%~2.58%
Future salary and benefit levels	5.42%	5.43%
Weighted average duration	13.24 years	13.21 years

(3)

Details of expense relating to defined benefit plans for the years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Current service cost	￦		291,115			315,811
Interest cost			97,603			63,808
Expected return on plan assets			(22,291	)		(22,557	)
Past service cost			(167,998	)		—
Loss from settlement			(62,292	)		(641	)

	￦		136,137			356,421

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


		2014		2015
		In millions of won
Cost of sales	￦		114,143		262,760
Selling and administrative expenses			7,263		51,932
Others (Construction-in-progress and others)			14,731		41,729

	￦		136,137		356,421

In addition, for the years ended December 31, 2014 and 2015, employee benefit obligations expenses of ￦33,700 million and ￦57,940 million, respectively, are recognized as cost of sales, and ￦5,154 million and ￦9,971 million, respectively, are recognized as selling and administrative expenses, and ￦8,631 million and ￦14,195 million, respectively, are recognized as construction-in-progress and others, related to the Company’s defined contribution plans.

F-117

(4)

Details of defined benefit obligations as of December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Present value of defined benefit obligation from funded plans	￦		1,992,447			2,426,414
Fair value of plan assets			(724,250	)		(930,632	)

			1,268,197			1,495,782

Present value of defined benefit obligation from unfunded plans			—			—

Net liabilities incurred from defined benefit plans	￦		1,268,197			1,495,782

(5)

Changes in the present value of defined benefit obligations for the years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Beginning balance	￦		2,629,057			1,992,447
Current service cost			291,115			315,811
Interest cost(*)			97,603			63,808
Remeasurement component			145,648			122,825
Past service cost			(167,998	)		—
Loss from settlement			(62,292	)		(641	)
Actual payments			(941,208	)		(67,291	)
Others			522			(545	)

Ending balance	￦		1,992,447			2,426,414

(*)

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

(6)

Changes in the fair value of plan assets for the years ended 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Beginning balance	￦		564,552			724,250
Expected return			22,291			22,557
Remeasurement component			(6,602	)		(5,924	)
Contributions by the employers			231,342			214,449
Actual payments			(81,029	)		(24,191	)
Assets decreased through settlement			(6,572	)		—
Others			268			(509	)

Ending balance	￦		724,250			930,632

In addition, loss on accumulated remeasurement component amounting to ￦116,707 million and ￦202,878 million has been recognized as other comprehensive income or loss for the years ended December 31, 2014 and 2015, respectively.

F-118

(7)

Details of the fair value of plan assets as of December 31, 2014 and 2015 are as follows:


		2014		2015
		In millions of won
Equity instruments	￦		41,298		12,791
Debt instruments			163,528		243,372
Bank deposit			108,234		129,350
Others			411,190		545,119

	￦		724,250		930,632

For the years ended December 31, 2014 and 2015, actual returns on plan assets amounted to ￦15,669 million and ￦16,633 million, respectively.

(8)

Remeasurement component recognized in other comprehensive income (loss) for the years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Actuarial gain (loss) from changes in financial assumptions	￦		218,859			140,411
Experience adjustments			(73,211	)		(17,586	)
Expected return			6,602			5,924

	￦		152,250			128,749

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

F-119

26.

Provisions

(1)

Provisions as of December 31, 2014 and 2015 are as follows:


		2014				2015
		Current		Non-current		Current		Non-current
		In millions of won
Employment benefits	￦		707,310		—		718,365		—
Provision for employment benefits			707,310		—		718,365		—

Litigation			116,395		83,894		57,737		110,228
Litigation provisions			116,395		83,894		57,737		110,228

Decommissioning cost			—		13,434,606		—		12,744,873
Nuclear plants			—		10,331,270		—		9,684,286
Spent fuel			—		1,298,749		—		1,375,185
Waste			—		1,604,241		—		1,502,140
PCBs			—		199,518		—		182,400
Other recovery provisions			—		828		—		862

Others			450,481		10,510		803,074		9,653
Power plant regional support program			120,093		—		129,655		—
Transmission regional support program			—		—		228,785		—
Provisions for tax			—		649		—		136
Provisions for financial guarantee			74		3,621		1,839		2,449
Provisions for RPS			329,562		—		363,178		—
Provisions for greenhouse gas emissions obligations			—		—		78,829		—
Others			752		6,240		788		7,068

	￦		1,274,186		13,529,010		1,579,176		12,864,754

(2)

Changes in provisions for the years ended December 31, 2014 and 2015 are as follows:


		2014
		Beginning balance		Accretion expenses		Payment			Reversal			Other		Ending balance
		In millions of won
Employment benefits	￦		777,419		650,788		(615,230	)		(105,667	)		—		707,310
Provision for employment benefits			777,419		650,788		(615,230	)		(105,667	)		—		707,310

Litigation			23,720		200,593		(18,371	)		(5,653	)		—		200,289
Litigation provisions			23,720		200,593		(18,371	)		(5,653	)		—		200,289

Decommissioning cost			12,568,622		1,270,397		(398,600	)		(9,067	)		3,254		13,434,606
Nuclear plants			9,887,621		443,987		(338	)		—			—		10,331,270
Spent fuel			1,211,440		465,006		(377,697	)		—			—		1,298,749
Waste			1,249,062		351,935		(10	)		—			3,254		1,604,241
PCBs			219,704		9,436		(20,555	)		(9,067	)		—		199,518
Other recovery provisions			795		33		—			—			—		828

Others			346,371		350,049		(186,388	)		(65,264	)		16,223		460,991
Power plant regional support program			112,498		39,943		(44,242	)		—			11,894		120,093
Provisions for tax			649		—		—			—			—		649
Provisions for financial guarantee			8,789		476		(32	)		(5,538	)		—		3,695
Provisions for RPS			223,260		308,088		(142,096	)		(59,690	)		—		329,562
Others			1,175		1,542		(18	)		(36	)		4,329		6,992

	￦		13,716,132		2,471,827		(1,218,589	)		(185,651	)		19,477		14,803,196

F-120


		2015
		Beginning balance		Accretion expenses		Payment			Reversal			Other		Ending balance
		In millions of won
Employment benefits	￦		707,310		727,079		(715,850	)		(174	)		—		718,365
Provision for employment benefits			707,310		727,079		(715,850	)		(174	)		—		718,365

Litigation			200,289		111,301		(85,819	)		(58,306	)		500		167,965
Litigation provisions			200,289		111,301		(85,819	)		(58,306	)		500		167,965

Decommissioning cost			13,434,606		1,287,095		(680,552	)		(1,296,580	)		304		12,744,873
Nuclear plants			10,331,270		650,218		(622	)		(1,296,580	)		—		9,684,286
Spent fuel			1,298,749		568,190		(491,754	)		—			—		1,375,185
Waste			1,604,241		58,294		(160,699	)		—			304		1,502,140
PCBs			199,518		10,359		(27,477	)		—			—		182,400
Other recovery provisions			828		34		—			—			—		862

Others			460,991		774,760		(368,172	)		(64,494	)		9,642		812,727
Power plant regional support program			120,093		37,569		(37,648	)		—			9,641		129,655
Transmission regional support program			—		393,460		(164,675	)		—			—		228,785
Provisions for tax			649		—		—			(513	)		—		136
Provisions for financial guarantee			3,695		3,528		—			(2,936	)		1		4,288
Provisions for RPS			329,562		259,964		(165,259	)		(61,089	)		—		363,178
Provisions for greenhouse gas emissions obligations			—		78,829		—			—			—		78,829
Others			6,992		1,410		(590	)		44			—		7,856

	￦		14,803,196		2,900,235		(1,850,393	)		(1,419,554	)		10,446		14,443,930

27.

Government Grants

(1)

Government grants as of December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Land	￦		(3,103	)		(3,147	)
Buildings			(67,700	)		(63,932	)
Structures			(196,871	)		(193,119	)
Machinery			(108,750	)		(108,935	)
Vehicles			(76	)		(29	)
Equipment			(1,002	)		(1,026	)
Tools			(862	)		(691	)
Construction-in-progress			(123,938	)		(139,898	)
Investment properties			(10	)		(13	)
Software			(488	)		(699	)
Development expenditures			(8,183	)		(6,835	)
Intangible assets under development			(10,692	)		(10,483	)
Usage rights of donated assets and other			(43	)		(32	)
Others			(1	)		(1	)

	￦		(521,719	)		(528,840	)

F-121

(2)

Changes in government grants for the years ended December 31, 2014 and 2015 are as follows:


		2014
		Beginning balance			Receipt			Acquisition		Offset the items of depreciation expense and others		Disposal		Others			Ending balance
		In millions of won
Cash	￦		—			(108,681	)		—		—		—		108,681			—
Land			(3,137	)		—			—		—		63		(29	)		(3,103	)
Buildings			(45,396	)		—			—		5,040		200		(27,544	)		(67,700	)
Structures			(193,189	)		—			—		8,921		2,018		(14,621	)		(196,871	)
Machinery			(101,808	)		—			—		10,102		423		(17,467	)		(108,750	)
Vehicles			(83	)		—			—		47		—		(40	)		(76	)
Equipment			(707	)		—			—		376		—		(671	)		(1,002	)
Tools			(312	)		—			—		144		55		(749	)		(862	)
Construction-in-progress			(117,728	)		—			35,937		—		—		(42,147	)		(123,938	)
Investment properties			(13	)		—			—		4		—		(1	)		(10	)
Software			(428	)		—			—		154		—		(214	)		(488	)
Development expenditures			(11,705	)		—			—		4,125		—		(603	)		(8,183	)
Intangible assets under development			(7,792	)		—			527		—		170		(3,597	)		(10,692	)
Usage rights of donated assets and other			(53	)		—			—		10		—		—			(43	)
Others			(1	)		—			—		—		—		—			(1	)

	￦		(482,352)			(108,681	)		36,464		28,923		2,929		998			(521,719	)


		2015
		Beginning balance			Receipt			Acquisition		Offset the items of depreciation expense and others		Disposal		Others			Ending balance
		In millions of won
Cash	￦		—			(52,696	)		—		—		—		52,696			—
Land			(3,103	)		—			—		—		—		(44	)		(3,147	)
Buildings			(67,700	)		—			—		5,064		—		(1,296	)		(63,932	)
Structures			(196,871	)		—			—		9,178		1,816		(7,242	)		(193,119	)
Machinery			(108,750	)		—			—		11,133		1,101		(12,419	)		(108,935	)
Vehicles			(76	)		—			—		47		1		(1	)		(29	)
Equipment			(1,002	)		—			—		469		—		(493	)		(1,026	)
Tools			(862	)		—			—		268		—		(97	)		(691	)
Construction-in-progress			(123,938	)		—			11,279		—		—		(27,239	)		(139,898	)
Investment properties			(10	)		—			—		—		—		(3	)		(13	)
Software			(488	)		—			—		177		—		(388	)		(699	)
Development expenditures			(8,183	)		—			—		2,937		—		(1,589	)		(6,835	)
Intangible assets under development			(10,692	)		—			2,093		—		—		(1,884	)		(10,483	)
Usage rights of donated assets and other			(43	)		—			—		11		—		—			(32	)
Others			(1	)		—			—		—		—		—			(1	)

	￦		(521,719)			(52,696	)		13,372		29,284		2,918		1			(528,840	)

F-122

28.

Deferred Revenues

Deferred revenue related to the Company’s construction contracts as of December 31, 2014 and 2015 are as follows and included in current and non-current non-financial liabilities in the consolidated statements of financial position:


		2014			2015
		In millions of won
Beginning balance	￦		6,506,639			6,850,016
Increase during the current year / period			695,235			691,276
Recognized as revenue during the current year / period			(351,858	)		(375,995	)

Ending balance	￦		6,850,016			7,165,297

29.

Non-financial Liabilities

Non-financial liabilities as of December 31, 2014 and 2015 are as follows:


		2014				2015
		Current		Non-current		Current		Non-current
		In millions of won
Advance received	￦		5,320,722		294,151		5,017,735		215,096
Unearned revenue			41,822		86,061		21,810		63,850
Deferred revenue			347,362		6,502,654		372,157		6,793,140
Withholdings			258,258		45,221		146,258		6,731
Others			496,192		18,323		762,751		13,435

	￦		6,464,356		6,946,410		6,320,711		7,092,252

F-123

30.

Contributed Capital

(1)

Details of shares issued as of December 31, 2014 and 2015 are as follows:

2014

Shares
authorized

Shares issued

Par value
per share

Owned by
government(*)

Owned by
others

Total

In millions of won except share information

Common shares

1,200,000,000

641,964,077

￦

5,000

1,640,437

1,569,383

3,209,820

(*)

Korea Development Bank’s ownership of ￦960,802 million are included.

2015

Shares
authorized

Shares issued

Par value
per share

Owned by
government(*)

Owned by
others

Total

In millions of won except share information

Common shares

1,200,000,000

641,964,077

￦

5,000

1,640,385

1,569,435

3,209,820

(*)

Korea Development Bank’s ownership of ￦1,056,176 million are included.

(2)

Details in number of outstanding capital stock for the years ended December 31, 2014 and 2015 are as follows.


	2014		2015
	Number of shares
Beginning balance		623,034,082		641,964,077
Disposal of treasury stocks		18,929,995		—

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

(3)

Details of share premium as of December 31, 2014 and 2015 are as follows:

2014

2015

In millions of won

Share premium

￦

843,758

F-124

31.

Retained Earnings and Dividends Paid

(1)

Details of retained earnings as of December 31, 2014 and 2015 are as follows:


		2014		2015
		In millions of won
Legal reserve(*)	￦		1,604,910		1,604,910
Voluntary reserves			22,999,359		23,720,167
Retained earnings before appropriations			10,699,378		22,862,164

Retained earnings	￦		35,303,647		48,187,241

(*)

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

(2)

Details of voluntary reserves as of December 31, 2014 and 2015 are as follows:


		2014		2015
		In millions of won
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		17,902,718
Reserve for equalizing dividends			210,000		210,000

	￦		22,999,359		23,720,167

(*)

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 years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Beginning balance	￦		32,766,086			35,303,647
Net profit for the period attributed to owner of the Company			2,686,873			13,289,127
Changes in equity method retained earnings			(1,899	)		(280	)
Remeasurements of defined benefit liability, net of tax			(91,340	)		(84,271	)
Dividend paid			(56,073	)		(320,982	)

Ending balance	￦		35,303,647			48,187,241

(4)

Dividends paid for the years ended December 31, 2014 and 2015 are as follows:

2014

Number of
shares issued

Number of
treasury stocks

Number of
shares eligible for
dividends

Dividends
paid

Dividends paid
per share

In millions of won

(In won)

Common shares

641,964,077

18,929,995

623,034,082

￦

56,073

2015

Number of
shares issued

Number of
treasury stocks

Number of
shares eligible for
dividends

Dividends
paid

Dividends paid
per share

In millions of won

(In won)

Common shares

641,964,077

—

641,964,077

￦

320,982

500

F-125

(5)

Changes in retained earnings of investments in associates and joint ventures for the years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Beginning balance	￦		(232	)		(2,131	)
Changes			(1,899	)		(280	)

Ending balance	￦		(2,131	)		(2,411	)

(6)

Changes in remeasurement components for the years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Beginning balance	￦		39,591			(116,705	)
Changes			(151,610	)		(127,184	)
Income tax effect			60,270			42,913
Transfer to reserve for business expansion			(64,956	)		(1,902	)

Ending balance	￦		(116,705	)		(202,878	)

32.

Statement of Appropriation of Retained Earnings

For the year ended December 31, 2014, the Company’s retained earnings were appropriated on March 31, 2015. For the year ended December 31, 2015, the Company’s retained earnings were appropriated on March 22, 2016. Statements of appropriation of retained earnings of KEPCO, the controlling company, for the years ended December 31, 2014 and 2015 are as follows:


			2014			2015
			In millions of won except for dividends per share
I. Retained earnings before appropriations
Unappropriated retained earnings carried over from prior years		￦		—			—
Net income				1,039,887			10,165,653
Remeasurements of the defined benefit plan				1,902			(48,457	)

				1,041,789			10,117,196

II. Transfer from voluntary reserves				—			—

III. Subtotal (I+II)				1,041,789			10,117,196

IV. Appropriations of retained earnings				(1,041,789	)		(10,117,196	)
Legal reserve				—			—
Dividends (government, individual)
(Amount of dividends per share (%):	Current year—￦3,100 (62.0%)
	Prior year—￦500 (10.0%)			(320,982	)		(1,990,089	)
Reserve for business expansion				(720,807	)		(8,127,107	)
V. Unappropriated retained earnings to be carried over forward to subsequent year				—			—

F-126

33.

Hybrid Bonds

Bond-type hybrid securities classified as equity (non-controlling interest) as of December 31, 2015 are as follows:


Issuer	Hybrid Bond	Issued date		Maturity		Yield (%)		Amount
	In millions of won
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 these subsidiaries to indefinitely extend the maturity dates and defer the payment of interest without modification to the other terms of the instruments. When the Company decides to not pay dividends on ordinary shares, they are not required to pay interest on the hybrid bonds.

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

34.

Other Components of Equity

(1)

Other components of equity of the parent as of December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Other capital surpluses	￦		1,151,402			1,197,388
Accumulated other comprehensive loss			(202,269	)		(98,713	)
Other equity			13,294,973			13,294,973

	￦		14,244,106			14,393,648

(2)

Changes in other capital surpluses for the years ended December 31, 2014 and 2015 are as follows:


		2014									2015
		Gains on disposal of treasury stocks			Others			Subtotal			Gains on disposal of treasury stocks		Others			Subtotal
		In millions of won
Beginning balance	￦		303,028			527,954			830,982			387,524		763,878			1,151,402
Disposal of subsidiary			—			313,117			313,117			—		58,310			58,310
Disposal of treasury stocks			111,473			—			111,473			—		—			—
Issuance of share capital of subsidiary			—			(1,235	)		(1,235	)		—		2,536			2,536
Change in consolidation scope			—			—			—			—		(716	)		(716	)
Income tax effect			(26,977	)		(75,958	)		(102,935	)		—		(14,144	)		(14,144	)

Ending balance	￦		387,524			763,878			1,151,402			387,524		809,864			1,197,388

F-127

(3)

Changes in accumulated other comprehensive income (loss) for the years ended December 31, 2014 and 2015 are as follows:


		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
		In millions of won
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			(97,263	)		—		—			—			(97,263	)
Shares in other comprehensive income of associates and joint ventures, net of tax			—			4,636		—			—			4,636
Foreign currency translation of foreign operations, net of tax			—			—		(84,962	)		—			(84,962	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—			—		—			(80,218	)		(80,218	)

Ending balance	￦		(34,649	)		186,897		(255,641	)		(98,876	)		(202,269	)


		2015
		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
		In millions of won
Beginning balance	￦		(34,649	)		186,897		(255,641	)		(98,876	)		(202,269	)
Changes in the unrealized fair value of available-for-sale financial assets, net of tax			9,744			—		—			—			9,744
Shares in other comprehensive income of associates and joint ventures, net of tax			—			89,476		—			—			89,476
Foreign currency translation of foreign operations, net of tax			—			—		1,179			—			1,179
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—			—		—			3,157			3,157

Ending balance	￦		(24,905	)		276,373		(254,462	)		(95,719	)		(98,713	)

(4)

Changes in treasury stocks for the years ended December 31, 2014 and 2015 are as follows.


		2014						2015
		Shares			Amount			Shares		Amount
		In millions of won except for share information
Beginning balance	￦		18,929,995			(741,489	)		—		—
Disposal of treasury stocks			(18,929,995	)		741,489			—		—

Ending balance	￦		—			—			—		—

(5)

Details of other equity for the years ended December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Statutory revaluation reserve	￦		13,295,098			13,295,098
Changes in other equity			(125	)		(125	)

	￦		13,294,973			13,294,973

F-128

35.

Sales

Details of sales for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013				2014				2015
		Domestic		Overseas		Domestic		Overseas		Domestic		Overseas
		In millions of won
Sales of goods	￦		50,876,783		256,020		53,408,869		297,959		53,961,463		405,573
Electricity			50,170,178		—		52,625,226		—		53,229,470		—
Heat supply			244,455		—		258,492		—		204,987		—
Others			462,150		256,020		525,151		297,959		527,006		405,573
Sales of service			198,932		127,687		222,973		228,040		209,189		244,298
Sales of construction services			238,924		2,014,159		262,035		2,703,150		180,424		3,580,780

	￦		51,314,639		2,397,866		53,893,877		3,229,149		54,351,076		4,230,651

36.

Selling and Administrative Expenses

(1)

Selling and administrative expenses for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013		2014		2015
		In millions of won
Salaries	￦		566,748		556,808		655,432
Retirement benefit expense			81,051		12,418		61,903
Welfare and benefit expense			107,342		89,804		119,866
Insurance expense			7,408		10,619		10,636
Depreciation			68,222		69,182		102,867
Amortization of intangible assets			50,266		40,260		40,465
Bad debt expense			40,446		39,018		290
Commission			510,309		550,335		562,171
Advertising expense			28,127		27,236		30,085
Training expense			5,332		5,664		4,988
Vehicle maintenance expense			12,358		12,015		10,529
Publishing expense			3,190		3,109		3,124
Business promotion expense			3,707		3,053		3,338
Rent expense			39,652		34,914		44,905
Telecommunication expense			24,468		21,586		22,678
Transportation expense			347		1,907		753
Taxes and dues			43,648		42,894		55,970
Expendable supplies expense			4,453		6,009		7,272
Water, light and heating expense			9,669		9,758		9,558
Repairs and maintenance expense			25,512		40,397		74,330
Ordinary development expense			166,106		154,244		178,472
Travel expense			13,146		13,025		14,388
Clothing expense			4,374		7,577		5,751
Survey and analysis expense			623		526		590
Membership fee			774		798		1,040
Others			105,914		171,210		131,860

	￦		1,923,192		1,924,366		2,153,261

F-129

(2)

Other selling and administrative expenses for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013		2014		2015
		In millions of won
Accommodation development expenses	￦		22,601		22,530		28,134
Miscellaneous wages			34,284		30,397		43,109
Litigation and filing expenses			9,501		9,222		10,670
Compensation for damages			2,289		46,946		9,032
Outsourcing expenses			4,002		1,377		2,865
Reward expenses			2,507		2,094		2,472
Overseas market development expenses			—		—		1,541
Others			30,730		58,644		34,037

	￦		105,914		171,210		131,860

37.

Other Income and Expense

(1)

Other income for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013		2014		2015
		In millions of won
Reversal of other provisions	￦		11,743		5,271		6,355
Reversal of allowance for doubtful accounts			—		241		413
Gains on assets contributed			14,392		2,418		9,004
Gains on liabilities exempted			2,425		858		2,588
Compensation and reparations revenue			94,064		156,019		166,355
Gains on electricity infrastructure development fund			50,808		18,888		—
Revenue from research contracts			10,815		9,615		5,342
Revenue related to transfer of assets from customers			325,290		351,857		375,995
Rental income			187,351		182,511		196,406
Others			28,569		26,508		45,756

	￦		725,457		754,186		808,214

(2)

Details of others of other income for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013		2014		2015
		In millions of won
Refund of claim for rectification	￦		9,796		9,996		7,623
Adjustment of research project			3,891		4,003		4,090
Maintenance expenses on lease building			2,320		1,282		324
Training expenses			3,657		2,916		4,774
Deposit redemption			142		2,235		430
Reversal of expenses on litigation			2,340		521		219
Revenue on royalty fee			2,471		897		2,739
Reimbursement of insurance fee			—		310		11,797
Gains on guarantee contracts			—		—		4,523
Others			3,952		4,348		9,237

	￦		28,569		26,508		45,756

F-130

(3)

Other expense for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013		2014		2015
		In millions of won
Compensation and indemnification expense	￦		—		—		16,959
Accretion expenses of other provisions			443		1,052		4,575
Depreciation expenses on investment properties			908		821		669
Depreciation expenses on idle assets			6,661		6,658		6,698
Other bad debt expense			8,665		15,981		18,473
Donations			57,970		37,889		34,134
Others			25,164		25,819		27,340

	￦		99,811		88,220		108,848

(4)

Details of others of other expense for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013		2014		2015
		In millions of won
Operating expenses related to the idle assets	￦		1,034		985		779
Research grants			551		617		1,392
Supporting expenses on farming and fishing village			16,162		14,211		14,626
Operating expenses on fitness center			2,382		1,928		2,912
Expenses on adjustment of research and development grants			1,272		—		709
Forfeit of taxes and dues			2,442		—		1,105
Movement expense			—		2,262		3,191
Others			1,321		5,816		2,626

	￦		25,164		25,819		27,340

F-131

38.

Other Gains (Losses)

(1)

Composition of other gains (losses) for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013			2014			2015
		In millions of won
Other gains
Gains on disposal of property plant, and equipment	￦		59,345			85,775			8,637,508
Gains on disposal of intangible assets			4			4			32
Reversal of impairment loss on intangible assets			121			18			275
Gains on foreign currency translation			2,835			5,152			13,784
Gains on foreign currency transaction			62,817			56,368			61,007
Insurance proceeds			1,700			3,046			30
Others			208,554			194,888			162,128

Other losses
Losses on disposal of property plant and equipment			(58,852	)		(50,152	)		(73,073	)
Losses on disposal of intangible assets			(1	)		(18	)		(16	)
Impairment loss on property, plant and equipment			(1,161	)		(38,107	)		(30,344	)
Impairment loss on intangible assets			(267	)		(42	)		(22	)
Losses on foreign currency translation			(9,978	)		(12,663	)		(15,097	)
Losses on foreign currency transaction			(59,907	)		(53,252	)		(75,615	)
Others			(76,696	)		(83,621	)		(69,824	)

	￦		128,514			107,396			8,610,773

(2)

Details of others of other gains for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013		2014		2015
		In millions of won
Gains on disposal of inventories	￦		11,387		12,127		10,758
Gains on valuation of inventories			903		2,756		7
Gains on proxy collection of TV license fee			36,706		37,433		38,529
Gains on compensation of impaired electric poles			5,407		2,319		—
Gains on compensation for infringement on contract			4,311		7,824		7,414
Gains on harbor facilities dues			4,745		5,935		5,943
Technical fees			3,940		1,121		1,258
Reversal of occupation development training fees			2,369		1,850		1,878
Gains on disposal of waste			9,979		2,467		2,880
Gains on insurance			12,828		2,748		11,865
Gains on litigation			5,813		1,954		600
Interests on tax rebate			9,258		2,388		1,661
Gains on other commission			14,288		8,672		2,177
Gains on research tasks			—		28,599		1,446
Gains on settlement and others			11,205		—		2,803
Gains on sales of greenhouse gas emissions rights			—		—		52
Others			75,415		76,695		72,857

	￦		208,554		194,888		162,128

F-132

(3)

Details of others of other losses for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013		2014		2015
		In millions of won
Losses on valuation of inventories	￦		1,604		3,231		1,318
Losses on disposal of inventories			1,778		1,996		13,469
Losses due to disaster			4,456		2,404		263
Losses on rounding adjustment of electric charge surtax			1,174		1,236		1,251
Losses on adjustments of levies			41,176		5,091		13,928
Losses on write-off			3,627		4,297		—
Penalty on taxes and dues			2,116		6,825		190
Commission and others			821		139		—
Losses on litigation			—		22,999		488
Others			19,944		35,403		38,917

	￦		76,696		83,621		69,824

39.

Finance Income

(1)

Finance income for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013		2014		2015
		In millions of won
Interest income	￦		182,161		191,456		241,585
Dividends income			9,870		14,193		14,069
Gains on disposal of financial assets			196		98,065		4
Gains on valuation of derivatives			16,927		312,347		610,582
Gains on transaction of derivatives			120,948		52,618		151,851
Gains on foreign currency translation			263,311		121,177		127,372
Gains on foreign currency transaction			36,129		95,418		37,377
Other finance income			—		16		148

	￦		629,542		885,290		1,182,988

(2)

Interest income included in finance income for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013		2014		2015
		In millions of won
Cash and cash equivalents	￦		60,301		56,384		54,687
Available-for-sale financial assets			1,150		382		29
Held-to-maturity investments			64		89		99
Loans and receivables			42,418		29,507		28,586
Short-term financial instrument			16,896		5,199		46,921
Long-term financial instrument			13		215		10,492
Other financial assets			1,082		—		—
Trade and other receivables			60,237		99,680		100,771

	￦		182,161		191,456		241,585

F-133

40.

Finance Expenses

(1)

Finance expenses for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013		2014		2015
		In millions of won
Interest expense	￦		2,381,900		2,351,624		2,015,684
Losses on sale of financial assets			4,202		2,700		3,008
Impairment of available-for-sale financial assets			12,592		79,618		84,370
Losses on valuation of derivatives			263,777		102,091		17,051
Losses on transaction of derivatives			107,582		119,635		37,262
Losses on foreign currency translation			60,597		465,326		743,283
Losses on foreign currency transaction			100,972		18,827		113,723
Losses on repayment of financial liabilities			—		199		33
Other			—		18		1,043

	￦		2,931,622		3,140,038		3,015,457

(2)

Interest expense included in finance expenses for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013			2014			2015
		In millions of won
Trade and other payables	￦		102,388			98,407			84,527
Short-term borrowings			32,928			27,038			14,627
Long-term borrowings			191,638			167,781			103,503
Debt securities			2,234,148			2,306,330			2,177,855
Other financial liabilities			564,139			588,535			538,680

			3,125,241			3,188,091			2,919,192

Less: Capitalized borrowing costs			(743,341	)		(836,467	)		(903,508	)

	￦		2,381,900			2,351,624			2,015,684

Capitalization rates for the years ended December 31, 2013, 2014 and 2015 are 3.71% ~ 4.33%, 3.28% ~ 4.35% and 2.36% ~ 4.25%, respectively.

F-134

41.

Income Taxes

(1)

Income tax expense for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013			2014			2015
		In millions of won
Current income tax expense
Payment of income tax	￦		172,574			897,129			2,682,779
Adjustment due to changes in estimates related to prior years			(11,833	)		(29,823	)		(23,248	)
Current income tax directly recognized in equity			(151,076	)		9,137			37,768

			9,665			876,443			2,697,299

Deferred income tax expense
Generation and realization of temporary differences			(532,604	)		248,796			48,878
Changes of unrecognized tax losses, tax credit and temporary differences for prior periods			(201,420	)		(26,067	)		71,999
Changes in deferred tax on tax losses carryforwards			93,668			345,887			2,374,237
Unrecognized deferred tax assets			103,555			—			—
Tax credit carry forwards			(43,658	)		(14,720	)		47,000

			(580,459	)		553,896			2,542,114

Income tax expense (benefit)	￦		(570,794	)		1,430,339			5,239,413

(2)

Reconciliation between actual income tax expense (benefit) and amount computed by applying the statutory tax rate of 24.2% to loss (income) before income taxes for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013			2014			2015
		In millions of won
Income (Loss) before income tax	￦		(396,488	)		4,229,306			18,655,786

Income tax (expense) benefit computed at applicable tax rate of 24.2%			95,950			(1,023,492	)		(4,514,700	)

Adjustments
Additional payment of income taxes or receipt of income tax refunds			36,003			13,574			14,130
Effect of applying gradual tax rate			2,357			1,503			4,147
Effect of non-taxable revenue			82,810			50,728			8,047
Effect of non-deductible expenses			(13,698	)		(43,152	)		(17,734	)
Effects of tax credits and deduction			335,710			75,804			103,435
Recognition of unrecognized deferred tax asset, net			179,147			26,067			(71,999	)
Unrecognized deferred tax assets			(123,227	)		—			—
Deferred income tax related to investments in subsidiaries and associates			(93,984	)		(516,557	)		(784,793	)
Others, net			69,726			(14,814	)		20,054

			474,844			(406,847	)		(724,713	)

Income tax (expense) benefit	￦		570,794			(1,430,339	)		(5,239,413	)

Effective tax rate			144	%		34	%		28	%

F-135

(3)

Income tax directly adjusted to shareholders’ equity (except for accumulated other comprehensive income (loss)) for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013			2014			2015
		In millions of won
Dividends of hybrid securities	￦		5,455			5,256			5,253
Gain on disposal of subsidiaries			(47,609	)		(75,958	)		(14,144	)
Gain on disposal of treasury stocks			—			(26,976	)		—

	￦		(42,154	)		(97,678	)		(8,891	)

(4)

Income tax recognized as other comprehensive income (loss) for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013			2014			2015
		In millions of won
Income tax recognized as other comprehensive income (loss)
Gain (loss) on valuation of available-for-sale financial assets	￦		(31,367	)		26,149			(6,315	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			6,416			51,504			7,253
Remeasurements of defined benefit obligations			(73,647	)		60,270			42,913
Investments in associates			(10,324	)		(16,813	)		13,648
Others			—			(14,295	)		(10,840	)

	￦		(108,922	)		106,815			46,659

F-136

(5)

Changes in deferred income tax assets (liabilities) recognized in the statements of financial position for the years ended December 31, 2014 and 2015 are as follows:


		2014
		Beginning balance			Amounts recognized in profit or loss			Amount recognized in other comprehensive income (loss)			Amounts recognized directly in equity			Ending balance
		In millions of won
Deferred income tax on temporary differences
Employee benefits	￦		518,681			(218,342	)		52,595			—			352,934
Cash flow hedge			51,991			(51,674	)		51,038			—			51,355
Investments in associates or subsidiaries			(5,227,034	)		(435,528	)		(31,107	)		(75,958	)		(5,769,627	)
Property, plant and equipment			(6,061,613	)		81,751			—			—			(5,979,862	)
Finance lease			(142,081	)		(55,016	)		—			—			(197,097	)
Intangible assets			10,242			2,067			—			—			12,309
Financial assets at fair value through profit or loss			83,645			(80,805	)		—			—			2,840
Available-for-sale financial assets			(101,088	)		33,104			26,148			—			(41,836	)
Deferred revenue			244,806			(14,162	)		—			—			230,644
Provisions			3,150,908			308,867			—			—			3,459,775
Doubtful receivables			59			1,297			—			—			1,356
Other finance liabilities			25,856			(7,876	)		—			5,256			23,236
Losses (gains) on foreign exchange translation			(19,164	)		72,958			—			—			53,794
Allowance for doubtful accounts			7,314			8,138			—			—			15,452
Accrued income			(1,248	)		(1,998	)		—			—			(3,246	)
Special deduction for property, plant and equipment			(194,785	)		111			—			—			(194,674	)
Impairment of non-current assets			86,720			—			—			—			86,720
Treasury stocks			—			26,976			—			(26,976	)		—
Reserve for research and human development			(43,143	)		7,644			—			—			(35,499	)
Others			409,436			42,442			8,141			—			460,019

			(7,200,498	)		(280,046	)		106,815			(97,678	)		(7,471,407	)

Deferred income tax on unused tax losses and tax credit
Tax losses			2,501,349			(325,174	)		—			—			2,176,175
Tax credit			56,099			42,187			—			—			98,286

			2,557,448			(282,987	)		—			—			2,274,461

	￦		(4,643,050	)		(563,033	)		106,815			(97,678	)		(5,196,946	)

F-137


		2015
		Beginning balance			Amounts recognized in profit or loss			Amount recognized in other comprehensive income (loss)			Amounts recognized directly in equity			Ending balance
		In millions of won
Deferred income tax on temporary differences
Employee benefits	￦		352,934			11,495			42,913			—			407,342
Cash flow hedge			51,354			(87,620	)		7,253			—			(29,013	)
Investments in associates or subsidiaries			(5,769,627	)		(669,035	)		2,808			(14,144	)		(6,449,998	)
Property, plant and equipment			(5,979,863	)		484,077			—			—			(5,495,786	)
Finance lease			(197,097	)		(75,333	)		—			—			(272,430	)
Intangible assets			12,309			(2,889	)		—			—			9,420
Financial assets at fair value through profit or loss			2,840			(2,844	)		—			—			(4	)
Available-for-sale financial assets			(41,836	)		(1,048	)		(6,315	)		—			(49,199	)
Deferred revenue			230,644			(15,283	)		—			—			215,361
Provisions			3,459,775			(87,352	)		—			—			3,372,423
Doubtful receivables			1,356			49			—			—			1,405
Other finance liabilities			23,237			(2,192	)		—			5,253			26,298
Losses on foreign exchange translation			53,794			74,920			—			—			128,714
Allowance for doubtful accounts			15,452			3,524			—			—			18,976
Accrued income			(3,245	)		(7,986	)		—			—			(11,231	)
Special deduction for property, plant and equipment			(194,674	)		327			—			—			(194,347	)
Impairment of non-current assets			86,720			(86,720	)		—			—			—
Reserve for research and human development			(35,499	)		14,811			—			—			(20,688	)
Others			460,019			116,566			—			—			576,585

			(7,471,407	)		(332,533	)		46,659			(8,891	)		(7,766,172	)

Deferred income tax on unused tax losses and tax credit
Tax losses			2,176,175			(2,176,178	)		—			—			(3	)
Tax credit			98,286			(71,171	)		—			—			27,115

			2,274,461			(2,247,349	)		—			—			27,112

	￦		(5,196,946	)		(2,579,882	)		46,659			(8,891	)		(7,739,060	)

F-138

(6)

Deferred income tax assets (liabilities) recognized in the statements of financial position as of December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Deferred income tax assets	￦		526,934			623,623
Deferred income tax liabilities			(5,723,880	)		(8,362,683	)

	￦		(5,196,946	)		(7,739,060	)

(7)

Details of deductible temporary differences, tax losses and unused tax credits not recognized in the deferred income tax assets as of December 31, 2014 and 2015 are as follows:


		2014		2015
		In millions of won
Deductible temporary differences	￦		448,402		441,704

	￦		448,402		441,704

F-139

42.

Assets Held-for-Sale

Assets held-for-sale as of December 31, 2014 and 2015 are as follows:


		2014		2015
		In millions of won
Land(*1,2,3)	￦		2,021,445		2,907
Building(*1,2,3)			69,363		20,366
Structures(*2,3)			2		—
Investments in associates(*4,5)			—		56,374

	￦		2,090,810		79,647

(*1)

The Company moved its headquarters to Naju, Jeollanam-do, in November 2014 as part of the government’s plan to relocate state-run companies for balanced national development and entered into a contract with Hyundai Motor and two of its affiliates to sell the buildings and land of the Company’s headquarters in Seoul on September 26, 2014. The Company reclassified the buildings and land as held-for-sales assets when the construction of the Naju headquarters was completed in 2014. The total sales value amounted to ￦10.55 trillion and the ownership has transferred on September 25, 2015.

(*2)

KEPCO Plant Service & Engineering Co., Ltd., a subsidiary of the Company, moved its headquarters to Naju, Jeollanam-do, in November 2014 as part of the government’s plan to relocate state-run companies for balanced national development and entered in to a contract with TmaxSoft Co., Ltd. to sell its head office in Seongnam on March 11, 2015. The total sales value amounted to ￦71 billion and the ownership has transferred on August 27, 2015. The Company recognized a gain of ￦36,407 million on disposal of assets held-for-sale for the year ended December 31, 2015.

(*3)

The board of directors of KEPCO Engineering & Construction Company, Inc., a subsidiary of the Company, determined to dispose the office building in Yongin as part of the government’s plan to relocate state-run companies for balanced national development and moved the head office to Kimchun, Kyungsangbukdo, in 2015. As the Company believes the book value of Yongin office will be recovered by a disposal transaction rather than continuous operation, it reclassified buildings, land and structures as assets held-for-sale.

(*4)

Korea Western Power Co., Ltd., a subsidiary of the Company, plans to dispose certain portion of its investment in Dongducheon Dream Power Co., Ltd. and reclassified the relevant book value to non-current assets held-for-sale.

(*5)

Korea South-East Power Co., Ltd., a subsidiary of the Company, plans to dispose certain portion of its investment in Hyundai Energy Co., Ltd. and reclassified the relevant book value to non-current assets held-for-sale.

F-140

43.

Expenses Classified by Nature

Expenses classified by nature for the years ended December 31, 2013, 2014 and 2015 are as follows:


		2013
		Selling and administrative expenses		Cost of sales		Total
		In millions of won
Raw materials used	￦		—		23,778,430		23,778,430
Salaries			566,748		2,583,032		3,149,780
Retirement benefit expense			81,051		349,931		430,982
Welfare and benefit expense			107,342		366,234		473,576
Insurance expense			7,408		63,125		70,533
Depreciation			68,222		7,228,205		7,296,427
Amortization of intangible assets			50,266		38,113		88,379
Bad debt expense			40,446		—		40,446
Commission			510,309		359,879		870,188
Advertising expense			28,127		7,133		35,260
Training expense			5,332		10,146		15,478
Vehicle maintenance expense			12,358		9,683		22,041
Publishing expense			3,190		4,088		7,278
Business promotion expense			3,707		4,340		8,047
Rent expense			39,652		93,001		132,653
Telecommunication expense			24,468		69,885		94,353
Transportation expense			347		4,139		4,486
Taxes and dues			43,648		195,076		238,724
Expendable supplies expense			4,453		25,554		30,007
Water, light and heating expense			9,669		27,879		37,548
Repairs and maintenance expense			25,512		1,431,441		1,456,953
Ordinary development expense			166,106		411,027		577,133
Travel expense			13,145		45,928		59,073
Clothing expense			4,374		4,207		8,581
Survey and analysis expense			623		3,471		4,094
Membership fee			774		5,478		6,252
Power purchase			—		11,328,898		11,328,898
Others			105,915		2,147,315		2,253,230

	￦		1,923,192		50,595,638		52,518,830

F-141


		2014
		Selling and administrative expenses		Cost of sales		Total
		In millions of won
Raw materials used	￦		—		20,150,934		20,150,934
Salaries			556,808		2,633,641		3,190,449
Retirement benefit expense			12,418		147,843		160,261
Welfare and benefit expense			89,804		313,483		403,287
Insurance expense			10,619		65,322		75,941
Depreciation			69,182		7,720,386		7,789,568
Amortization of intangible assets			40,260		36,153		76,413
Bad debt expense			39,018		—		39,018
Commission			550,335		355,263		905,598
Advertising expense			27,236		7,414		34,650
Training expense			5,664		9,387		15,051
Vehicle maintenance expense			12,015		9,297		21,312
Publishing expense			3,109		3,917		7,026
Business promotion expense			3,053		3,960		7,013
Rent expense			34,914		98,321		133,235
Telecommunication expense			21,586		70,140		91,726
Transportation expense			1,907		3,638		5,545
Taxes and dues			42,894		250,722		293,616
Expendable supplies expense			6,009		26,279		32,288
Water, light and heating expense			9,758		26,910		36,668
Repairs and maintenance expense			40,397		1,388,975		1,429,372
Ordinary development expense			154,244		391,491		545,735
Travel expense			13,025		46,792		59,817
Clothing expense			7,577		5,039		12,616
Survey and analysis expense			526		2,391		2,917
Membership fee			798		6,047		6,845
Power purchase			—		12,601,686		12,601,686
Others			171,210		3,387,521		3,558,731

	￦		1,924,366		49,762,952		51,687,318

F-142


		2015
		Selling and administrative expenses		Cost of sales		Total
		In millions of won
Raw materials used	￦		—		14,626,933		14,626,933
Salaries			655,432		2,962,476		3,617,908
Retirement benefit expense			61,903		320,700		382,603
Welfare and benefit expense			119,866		426,186		546,052
Insurance expense			10,636		83,910		94,546
Depreciation			102,867		8,158,884		8,261,751
Amortization of intangible assets			40,465		31,801		72,266
Bad debt expense			290		—		290
Commission			562,171		353,703		915,874
Advertising expense			30,085		8,498		38,583
Training expense			4,988		11,186		16,174
Vehicle maintenance expense			10,529		8,323		18,852
Publishing expense			3,124		3,981		7,105
Business promotion expense			3,338		4,312		7,650
Rent expense			44,905		142,054		186,959
Telecommunication expense			22,678		73,180		95,858
Transportation expense			753		5,336		6,089
Taxes and dues			55,970		397,161		453,131
Expendable supplies expense			7,272		29,874		37,146
Water, light and heating expense			9,558		26,870		36,428
Repairs and maintenance expense			74,330		1,771,760		1,846,090
Ordinary development expense			178,472		432,748		611,220
Travel expense			14,388		52,910		67,298
Clothing expense			5,751		4,135		9,886
Survey and analysis expense			590		3,071		3,661
Membership fee			1,040		6,401		7,441
Power purchase			—		11,428,027		11,428,027
Others			131,860		4,083,309		4,215,169

	￦		2,153,261		45,457,729		47,610,990

F-143

44.

Earnings Per Share

(1)

Basic earnings per share for the years ended December 31, 2013, 2014 and 2015 are as follows:

Type

2013

2014

2015

In won

Basic earnings per share

￦

4,290

20,701

(2)

Diluted earnings per share for the years ended December 31, 2013, 2014 and 2015 are as follows:

Type

2013

2014

2015

In won

Diluted earnings per share

￦

4,290

20,701

(3)

Basic earnings per share

Net profit for the period and weighted average number of common shares used in the calculation of basic earnings per share for the years ended December 31, 2013, 2014 and 2015 are as follows:


Type		2013		2014		2015
		In millions of won except number of shares
Controlling interest in net profit	￦		60,011		2,686,873		13,289,127
Profit used in the calculation of total basic earnings per share			60,011		2,686,873		13,289,127
Weighted average number of common shares			623,034,082		626,353,314		641,964,077

(4)

Diluted earnings per share

Diluted earnings per share is calculated by applying adjusted weighted average number of common shares under the assumption that all dilutive potential common shares are converted to common shares.

Earnings used in the calculation of total diluted earnings per share for the years ended December 31, 2013, 2014 and 2015 are as follows:

Type

2013

2014

2015

In millions of won

Profit used in the calculation of total diluted earnings per share

￦

60,011

2,686,873

13,289,127

Weighted average common shares used in calculating diluted earnings per share are adjusted from weighted average common shares used in calculating basic earnings per share. Detailed information of the adjustment for the years ended December 31, 2013, 2014 and 2015 are as follows:


Type	2013		2014		2015
	In number of shares
Weighted average number of common shares		623,034,082		626,353,314		641,964,077
Diluted weighted average number of shares		623,034,082		626,353,314		641,964,077

(5)

There are no potential dilutive instruments and diluted earnings per shares are same as basic earnings per share for the years ended December 31, 2013, 2014 and 2015.

F-144

45.

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 December 31, 2014 and 2015 are as follows:


		2014			2015
		In millions of won
Total borrowings and debt securities	￦		62,824,327			58,753,499
Cash and cash equivalents			1,796,300			3,783,065

Net borrowings and debt securities			61,028,027			54,970,434

Total shareholder’s equity			54,825,010			67,942,475

Debt to equity ratio			111.31	%		80.91	%

(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 hedge certain 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.

①

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.

②

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.

F-145

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 December 31, 2014 and 2015 are as follows:


		2014		2015
		In millions of won
Cash and cash equivalents	￦		1,796,300		3,783,065
Derivative assets (trading)			65,849		255,008
Available-for-sale financial assets			715,151		584,479
Held-to-maturity investments			3,614		3,623
Loans and receivables			623,997		735,057
Long-term/short-term financial instruments			704,462		5,890,866
Derivative assets (using hedge accounting)			104,276		362,142
Trade and other receivables			9,422,219		9,271,967
Financial guarantee contracts(*)			148,522		271,010

(*)

Maximum exposure associated with the financial guarantee contracts is the maximum amounts of the obligation.

Financial guarantee contracts as of December 31, 2015 are as follows:

Type

Company

Currency

Amounts

In thousands of U.S. dollars

Joint ventures

KEPCO SPC Power Corporation

USD

88,138

Joint ventures

PT. Tanjung Power Indonesia

USD

10,500

Joint ventures

Kelar S.A

USD

132,600

231,238

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.

F-146

(iii)

Sensitivity analysis

Significant assets and liabilities with uncertainties in underlying assumptions

①

Defined benefit obligation

A sensitivity analysis of defined benefit obligation assuming a 1% increase and decrease movements in the actuarial valuation assumptions as of December 31, 2014 and 2015 are as follows:


			2014						2015
Type	Accounts		1% Increase			1% Decrease			1% Increase			1% Decrease
	In millions of won
Future salary increases	Increase (decrease) in defined benefit obligation	￦		244,516			(222,706	)		293,205			(271,758	)
Discount rate	Increase (decrease) in defined benefit obligation			(221,728	)		260,991			(267,648	)		315,870

Changes of employee benefits assuming a 1% increase and decrease movements in discount rate on plan asset for the years ended December 31, 2014 and 2015 are ￦5,699 million and ￦7,265 million, respectively.

②

Provisions

Changes in provisions due to movements in underlying assumptions as of December 31, 2014 and 2015 are as follows:


Type	Accounts	2014			2015
PCBs	Inflation rate		2.79	%		2.65	%
	Discount rate		3.78	%		3.21	%
Nuclear plants	Inflation rate		2.93	%		1.40	%
	Discount rate		4.49	%		3.55	%
Spent fuel	Inflation rate		2.93	%		2.93	%
	Discount rate		4.49	%		4.49	%

A sensitivity analysis of provisions assuming a 0.1% increase and decrease movements in the underlying assumptions as of December 31, 2014 and 2015 are as follows:


			2014						2015
Type	Accounts		0.1% Increase			0.1% Decrease			0.1% Increase			0.1% Decrease
	In millions of won
Discount rate	PCBs	￦		(1,058	)		1,066			(875	)		881
	Nuclear plants			(221,795	)		227,773			(201,318	)		206,720
	Spent fuel			(49,483	)		51,404			(52,390	)		54,425
Inflation rate	PCBs			1,076			(1,069	)		885			(881	)
	Nuclear plants			251,588			(244,964	)		220,720			(215,086	)
	Spent fuel			52,147			(50,267	)		55,212			(53,219	)

F-147

Management judgment effected by uncertainties in underlying assumptions

①

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 December 31, 2014 and 2015 are as follows:


	Assets				Liabilities
Type	2014		2015		2014		2015
	In thousands of foreign currencies
AUD		196		158		542,292		595,284
BWP		—		301		—		—
CAD		1		—		244		858
CNY		—		—		—		26,140
EUR		2,097		6,141		4,087		33,552
IDR		273,738		—		17,288		—
MXN		7,637		7,704		122		—
PHP		196,696		489,309		17,962		77,337
SAR		1,044		1,083		—		—
USD		1,211,513		1,260,094		7,415,050		9,331,854
INR		683,074		972,175		173,753		206,159
PKR		167,747		211,212		2,037		12,928
MGA		2,183,910		2,768,360		69,199		151,729
JPY		1,048,413		1,425,163		20,023,572		20,325,211
KZT		551,684		47,177		—		—
GBP		—		—		90		99
CHF		—		—		399,634		400,029
AED		3,965		1,481		1,136		1,705
ZAR		146		238		—		—
JOD		1,080		2,972		1		—
BDT		47,167		43,332		314		889
TWD		—		—		—		30
SEK		—		—		196		—

A sensitivity analysis on the Company’s income for the period assuming a 10% increase and decrease in currency exchange rates as of December 31, 2014 and 2015 are as follows:


		2014					2015
Type		10% Increase			10% Decrease		10% Increase			10% Decrease
		In millions of won
Increase (decrease) of income before income tax	￦		(790,483	)		790,483		(1,063,285	)		1,063,285
Increase (decrease) of shareholder’s equity(*)			(790,483	)		790,483		(1,063,285	)		1,063,285

(*)

The effect on the shareholders’ equity excluding the impact of income taxes.

The sensitivity analysis above is conducted for monetary assets and liabilities denominated in foreign currencies other than functional currency, without consideration of hedge effect of related derivatives, as of December 31, 2014 and 2015.

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.

F-148

②

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 December 31, 2014 and 2015 are as follows:


Type		2014		2015
		In millions of won
Short-term borrowings	￦		20,788		41,608
Long-term borrowings			3,506,989		1,977,745
Debt securities			2,534,000		2,082,000

	￦		6,061,777		4,101,353

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 years ended December 31, 2014 and 2015 are as follows:


		2014					2015
Type		1% Increase			1% Decrease		1% Increase			1% Decrease
		In millions of won
Increase (decrease) of profit before income tax	￦		(60,618	)		60,618		(41,014	)		41,014
Increase (decrease) of shareholder’s equity(*)			(60,618	)		60,618		(41,014	)		41,014

(*) 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.

③

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 years ended December 31, 2014 and 2015 are as follows:


		2014					2015
Type		1% Increase		1% Decrease			1% Increase		1% Decrease
		In millions of won
Increase (decrease) of profit before income tax	￦		526,252		(526,252	)		532,295		(532,295	)
Increase (decrease) of shareholder’s equity(*)			526,252		(526,252	)		532,295		(532,295	)

(*) The effect on the shareholders’ equity excluding the impact of income taxes.

F-149

(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 December 31, 2014 and 2015. 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.


		2014
Type		Less than 1 year		1~2 Years		2~5 Years		More than 5 years		Total
		In millions of won
Borrowings and debt securities	￦		9,219,013		8,888,723		27,584,208		30,253,070		75,945,014
Finance lease liabilities			184,809		182,072		437,756		294,032		1,098,669
Trade and other payables			6,019,230		318,466		570,988		2,257,220		9,165,904
Financial guarantee contracts(*)			35,449		29,678		83,395		—		148,522

	￦		15,458,501		9,418,939		28,676,347		32,804,322		86,358,109


		2015
Type		Less than 1 year		1~2 Years		2~5 Years		More than 5 years		Total
		In millions of won
Borrowings and debt securities	￦		9,862,441		11,252,946		23,642,523		28,566,566		73,324,476
Finance lease liabilities			182,072		175,512		349,953		206,323		913,860
Trade and other payables			4,618,812		314,361		617,120		2,244,445		7,794,738
Financial guarantee contracts(*)			168,885		62,116		40,009		—		271,010

	￦		14,832,210		11,804,935		24,649,605		31,017,334		82,304,084

(*)

Total guarantee amounts associated with the financial guarantee contracts. Financial guarantee liabilities which are recognized as of December 31, 2014 and 2015 are ￦3,695 million and ￦4,288 million, respectively.

F-150

The expected maturities for non-derivative financial assets as of December 31, 2014 and 2015 in detail are as follows:


		2014
Type		Less than 1 year		1~5 Years		More than 5 years		*Other()**		Total
		In millions of won
Cash and cash equivalents	￦		1,796,300		—		—		—		1,796,300
Available-for-sale financial assets			—		—		—		715,151		715,151
Held-to-maturity investments			265		3,336		13		—		3,614
Loans and receivables			68,911		176,600		425,082		9,927		680,520
Long-term/short-term financial instruments			100,099		740		603,308		315		704,462
Trade and other receivables			7,700,166		830,863		824,966		76,104		9,432,099

	￦		9,665,741		1,011,539		1,853,369		801,497		13,332,146


		2015
Type		Less than 1 year		1~5 Years		More than 5 years		*Other()**		Total
		In millions of won
Cash and cash equivalents	￦		3,783,065		—		—		—		3,783,065
Available-for-sale financial assets			—		—		—		584,479		584,479
Held-to-maturity investments			381		3,242		—		—		3,623
Loans and receivables			106,013		268,820		397,976		11,330		784,139
Long-term/short-term financial instruments			5,132,829		5,000		752,703		334		5,890,866
Trade and other receivables			7,476,745		765,979		958,968		79,202		9,280,894

	￦		16,499,033		1,043,041		2,109,647		675,345		20,327,066

(*)

The maturities cannot be presently determined.

Derivative liabilities classified by maturity periods which from reporting date to maturity date of contract as of December 31, 2014 and 2015 are as follows:


		2014
Type		Less than 1 year			1~2 Years			2~5 Years			More than 5 years			Total
		In millions of won
Gross settlement
—Trading	￦		(66,580	)		(15,289	)		(108,717	)		(11,301	)		(201,887	)
—Hedging			(3,070	)		(31,441	)		(70,384	)		(84,815	)		(189,710	)

	￦		(69,650	)		(46,730	)		(179,101	)		(96,116	)		(391,597	)


		2015
Type		Less than 1 year			1~2 Years			2~5 Years			More than 5 years			Total
		In millions of won
Gross settlement
—Trading	￦		(9,552	)		(4,627	)		(47,971	)		—			(62,150	)
—Hedging			1,260			2,032			(44,233	)		(62,534	)		(103,475	)

	￦		(8,292	)		(2,595	)		(92,204	)		(62,534	)		(165,625	)

F-151

(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 cash flows based on the effective interest method.

(i)

Fair value and book value of financial assets and liabilities as of December 31, 2014 and 2015 are as follows:


		2014				2015
Type		Book value		Fair value		Book value		Fair value
		In millions of won
Assets recognized at fair value
Available-for-sale financial assets(*1)	￦		715,151		715,151		584,479		584,479
Derivative assets (trading)			65,849		65,849		255,008		255,008
Derivative assets (using hedge accounting)			104,276		104,276		362,142		362,142
Long-term financial instruments			604,363		604,363		758,037		758,037
Short-term financial instruments			100,099		100,099		5,132,829		5,132,829

			1,589,738		1,589,738		7,092,495		7,092,495

Assets carried at amortized cost
Held-to-maturity investments			3,614		3,614		3,623		3,623
Loans and receivables			623,997		623,997		735,057		735,057
Trade and other receivables			9,422,219		9,422,219		9,271,967		9,271,967
Cash and cash equivalents			1,796,300		1,796,300		3,783,065		3,783,065

			11,846,130		11,846,130		13,793,712		13,793,712

Liabilities recognized at fair value
Derivative liabilities (trading)			164,931		164,931		49,011		49,011
Derivative assets (using hedge accounting)			172,877		172,877		117,499		117,499

			337,808		337,808		166,510		166,510

Liabilities carried at amortized cost
Secured borrowings			941,823		941,823		641,363		641,363
Unsecured bond			58,235,767		61,816,897		55,677,213		59,619,941
Finance lease liabilities			769,435		769,435		659,394		659,394
Unsecured borrowings			3,625,949		3,731,331		2,407,690		2,427,847
Trade and other payables(*2)			9,165,904		9,165,904		7,794,738		7,794,738
Bank overdraft			20,788		20,788		27,233		27,233

	￦		72,759,666		76,446,178		67,207,631		71,170,516

(*1)

Book values of equity securities held by the Company that were measured at cost as of December 31, 2014 and 2015 are ￦299,308 million and ￦207,508 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.

F-152

(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 December 31, 2014 and 2015 are as follows:


Type	2014		2015
Derivatives		0.04%~2.78%		0.28%~4.16%
Borrowings and debt securities		0.16%~5.80%		0.15%~5.80%
Finance lease		9.00%~10.83%		9.00%~10.83%

(iii)

Fair value hierarchy

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, classified as Level 1, 2 or 3, based on the degree to which the fair value is observable.

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2: Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3: Inputs that are not based on observable market data.

Fair values of financial instruments by hierarchy level as of December 31, 2014 and 2015 are as follows:


		2014
Type		Level 1		Level 2		Level 3		Total
		In millions of won
Financial assets at fair value
Available-for-sale financial assets	￦		247,215		—		168,627		415,842
Derivative assets			—		170,125		—		170,125

			247,215		170,125		168,627		585,967

Financial liabilities at fair value
Derivative liabilities			—		337,806		—		337,806


		2015
Type		Level 1		Level 2		Level 3		Total
		In millions of won
Financial assets at fair value
Available-for-sale financial assets	￦		196,579		—		180,390		376,969
Derivative assets			—		617,150		—		617,150

			196,579		617,150		180,390		994,119

Financial liabilities at fair value
Derivative liabilities			—		166,510		—		166,510

The fair value of available-for-sale financial assets publicly traded is measured at the closing bid price quoted at the end of the reporting period. Meanwhile, the fair value of unquoted available-for-sale financial assets is calculated using the valuation results from an external pricing service in which weighted average borrowing rates of interest of evaluated companies are used as a discount rate. The fair value of derivatives is measured using valuation model which is determined at the present value of estimated future cash flows discounted at current market interest rate.

F-153

Changes of financial assets and liabilities which are classified as level 3 for the years ended December 31, 2014 and 2015 are as follows:


		2014
		Beginning balance		Acquisition		Reclassified category		Valuation			Disposal			Foreign currency translation		Ending balance
		In millions of won
Financial assets at fair value
Available-for-sale financial assets
Unlisted securities	￦		171,304		—		—		(2,677	)		—			—		168,627
Debt securities			14,655		—		—		—			(14,655	)		—		—

		2015
		Beginning balance		Acquisition		Reclassified category		Valuation			Disposal			Foreign currency translation		Ending balance
		In millions of won
Financial assets at fair value
Available-for-sale financial assets
Unlisted securities	￦		168,627		—		—		11,763			—			—		180,390

F-154

46.

Service Concession Arrangements

(1)

Gas complex thermal power plant at Ilijan, Philippines (BOT)

(i)

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.

(ii)

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.

(iii)

The Company’s expected future collections of service concession arrangements as of December 31, 2015 are as follows:


Type	Amounts
	In millions of won
Less than 1 year	￦	122,420
1~ 2 years		122,420
2~ 3 years		122,420
Over 3 years		418,270

	￦	785,530

(2)

Hydroelectric power generation at Semangka, Indonesia (BOT)

(i)

Significant terms and concession period of the arrangement

The Company has entered into a contract with PT. Perusahaan Listrik Negara (the “PLN”) whereby the Company provides electricity generated and charge tariff rates designed to recover capital cost, fixed O&M cost, tax on water usage, variable O&M cost and special facilities cost during the concession period after building, rehabilitating, and operating the power plant for approximately 30 years (2017~2047) subsequent to the completion of plant construction.

(ii)

Rights and classification of the arrangement

The Company has the rights to use and own the power plant during the concession period from 2017 to 2047. At the end of the concession period, PNL has an option to take over the ownership of the power plant from the Company.

(iii)

The Company’s expected future collections of service concession arrangements as of December 31, 2015 are as follows:


Type	Amounts
	In millions of won
Less than 1 year	￦	—
1~ 2 years		8,932
2~ 3 years		29,811
Over 3 years		691,740

	￦	730,483

F-155

47.

Related Parties

(1)

Related parties of the Company as of December 31, 2015 are as follows:


Type		Related party
Parent		Republic of Korea government

Subsidiaries (77 subsidiaries)		Korea Hydro & Nuclear Power Co., Ltd., Korea South-East Power Co., Ltd., Korea Midland Power Co., Ltd., Korea Western Power Co., Ltd., Korea Southern Power Co., Ltd., Korea East-West Power Co., Ltd., KEPCO Engineering & Construction Company, Inc., KEPCO Plant Service & Engineering Co., Ltd., KEPCO Nuclear Fuel Co., Ltd., KEPCO KDN Co., Ltd., Garolim Tidal Power Plant Co., Ltd., Gyeonggi Green Energy Co., Ltd., Korea Offshore Wind Power Co., Ltd., KOSEP Material Co., Ltd., KEPCO International HongKong Ltd., KEPCO International Philippines Inc., KEPCO Philippines Corporation, KEPCO Ilijan Corporation, KEPCO Gansu International Ltd., KEPCO Philippines Holdings Inc., KEPCO Lebanon SARL, KEPCO Neimenggu International Ltd., KEPCO Australia Pty., Ltd., KEPCO Shanxi International Ltd., KOMIPO Global Pte Ltd., KOSEP Australia Pty., Ltd., KOMIPO Australia Pty., Ltd., KOWEPO Australia Pty., Ltd., KOSPO Australia Pty., Ltd., KEPCO Canada Energy Ltd., KEPCO Canada Uranium Investment Limited Partnership, KEPCO Netherlands B.V., KOREA Imouraren Uranium Investment Corp., KEPCO Middle East Holding Company, Qatrana Electric Power Company, Korea Electric Power Nigeria Ltd., KOWEPO International Corporation, KOSPO Jordan LLC, Korea Waterbury Uranium Limited Partnership, PT. Cirebon Power Service, EWP America Inc., KHNP Canada Energy., Ltd., KEPCO Bylong Australia Pty., Ltd., KNF Canada Energy Limited, KEPCO Holdings de Mexico, KST Electric Power Company, KEPCO Energy Service Company, KEPCO Netherlands S3 B.V., PT. KOMIPO Pembangkitan Jawa Bali, PT KEPCO Resource Indonesia, EWP Barbados 1 SRL, PT. Tanggamus Electric Power, KOMIPO America Inc, KOSEP USA, INC., PT. EWP Indonesia, KEPCO Netherlands J3 B.V., Global One Pioneer B.V., Global Energy Pioneer B.V., Mira Power Limited, EWP Philippines Corporation, LLC, KEPCO Singapore Holdings Pte., Ltd., KOWEPO India Private Limited, KEPCO KPS Philippines Corp., KOSPO Chile SpA, PT. KOWEPO Sumsel Operation and Maintenance Services, Commerce and Industry Energy Co., Ltd., Gyeongju Wind Power Co., Ltd., California Power Holdings, LLC, DG Fairhaven Power, LLC, DG Kings Plaza, LLC, DG Whitefield, LLC, EWP Renewable Co., EWPRC Biomass Holdings, LLC, Springfield Power, LLC, HeeMang Sunlight Power Co., Ltd., Fujeij Wind Power Company, KOSPO Youngnam Power Co., Ltd.

Associates (55 associates)		Daegu Green Power Co., Ltd., Dongducheon Dream Power Co., Ltd., Korea Gas Corporation, SE Green Energy Co., Ltd., Daegu Photovoltaic Co., Ltd., Jeongam Wind Power Co., Ltd., Korea Power Engineering Service Co., Ltd., Yeongwol Energy Station Co., Ltd., KS Solar Corp. Ltd., Heang Bok Do Si Photovoltaic Power Co., Ltd., Korea Electric Power Industrial Development Co., Ltd., DS POWER Co., Ltd., Goseong Green Energy Co. Ltd., Gangneung Eco Power Co., Ltd., Shin Pyeongtaek Power Co., Ltd., Naepo Green Energy Co., Ltd., Noeul Green Energy Co., Ltd., YTN Co., Ltd., Cheongna Energy Co., Ltd., Samcheok Eco Material Co., Ltd., Gangwon Wind Power Co., Ltd., Hyundai Green Power Co., Ltd., Korea Power Exchange, AMEC Partners Korea Ltd., Hyundai Energy Co., Ltd., Ecollite Co., Ltd., Taebaek Wind Power Co., Ltd., 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., S-Power Co., Ltd., Busan Solar Co., Ltd., Hadong Mineral Fiber Co., Ltd., Green Biomass Co., Ltd., SPC Power Corporation, Gemeng International Energy Co., Ltd., PT. Cirebon Electric Power, KNOC Nigerian East Oil Co., Ltd., KNOC Nigerian West Oil Co., Ltd., Dolphin Property Limited, PT Wampu Electric Power, PT. Bayan Resources TBK, Pioneer Gas Power Limited, Eurasia Energy Holdings, Xe-Pian Xe-Namnoy Power Co., Ltd., PT Mutiara Jawa, Jinbhuvish Power Generation Pvt. Ltd., Busan Green Energy Co., Ltd., Jungbu Bio Energy Co., Ltd., Korea Electric Vehicle Charge Service, Ulleungdo Natural Energy Co., Ltd., Korea Nuclear Partners Co., Ltd.

F-156



Joint ventures (38 joint ventures)		KEPCO SPC Power Corporation, Daejung Offshore Wind Power Co., Ltd., KEPCO-ALSTOM Power Electronics Systems, Inc., Dangjin Echo Power Co., Ltd.(Formerly, Dongbu Power Dangjin Corporation), Honam Wind Power Co., Ltd., Seokmun Energy Co., Ltd., Incheon New Power Co., Ltd., Chun-cheon Energy Co., Ltd., Yeonggwangbaeksu Wind Power Co., Ltd., KW Nuclear Components Co., Ltd., KEPCO-Uhde Inc., GS Donghae Electric Power Co., Ltd., Busan Shinho Solar Power Co., Ltd., Global Trade Of Power System Co., Ltd., Expressway Solar-light Power Generation Co., Ltd., Gansu Datang Yumen Wind Power Company Ltd., Datang Chifeng Renewable Power Co., Ltd., KEPCO Energy Resource Nigeria Limited, Rabigh Electricity Company, Eco Biomass Energy Sdn. Bhd., Rabigh Operation & Maintenance Company, Datang KEPCO Chaoyang Renewable Power Co., LTD., Shuweihat Asia Power Investment B.V., Shuweihat Asia Operation & Maintenance Company, Waterbury Lake Uranium L.P., ASM-BG Investicii AD, RES Technology AD, Jamaica Public Service Company Limited, KV Holdings, Inc., Datang Chaoyang Renewable Power Co., Ltd., Nepal Water & Energy Development Company Pty Ltd., KODE NOVUS 1 LLC, KODE NOVUS 2 LLC, Amman Asia Electric Power Company, Kelar S.A, PT. Tanjung Power Indonesia, Nghi Son 2 Power Ltd., Canada Korea Uranium Limited Partnership

Others		Korea Development Bank

(2)

Transactions between the Company and its subsidiaries are eliminated during the consolidation and will not be shown as notes.

(3)

Related party transactions for the years ended December 31, 2013, 2014 and 2015 are as follows:

<Sales and Others>


				Sales and others
Company name	Transaction type			2013		2014		2015
				In millions of won
<Associates>
Daegu Green Power Co., Ltd.		Electricity sales	￦		121		1,320		1,055
Dongducheon Dream Power Co., Ltd.		Service			11,603		12,446		14,811
Korea Gas Corporation		Electricity sales			124,244		82,117		90,480
Gumi-ochang Photovoltaic Power Co., Ltd.		Electricity sales			—		14		—
Chungbuk Photovoltaic Power Co., Ltd		Electricity sales			—		6		—
Cheonan Photovoltaic Power Co., Ltd.		Electricity sales			—		2		—
SE Green Energy Co., Ltd.		Electricity sales			1		—		—
Daegu Photovoltaic Co., Ltd.		Electricity sales			5		—		—
Jeongam Wind Power Co., Ltd.		Electricity sales			3		8		8
Korea Power Engineering Service Co., Ltd.		Service			—		1,239		1,743
Golden Route J Solar Power Co., Ltd.		Electricity sales			—		1		—
Yeongwol Energy Station Co., Ltd.		Service			27,900		3,676		814
KOSCON Photovoltaic Co., Ltd.		Electricity sales			1		5		—
Yeonan Photovoltaic Co., Ltd.		Electricity sales			52		4		—
Q1 Solar Co., Ltd.		Electricity sales			262		13		—
Best Solar Energy Co., Ltd.		Electricity sales			39		16		—
Seokcheon Solar Power Co., Ltd.		Electricity sales			—		54		—
D Solar Energy Co., Ltd.		Electricity sales			—		8		—
KS Solar Corp., Ltd.		Electricity sales			—		15		21
Hyundai Asan Solar Power Co., Ltd.		Electricity sales			—		8		—
Heang Bok Do Si Photovoltaic Power Co., Ltd.		Rental income and others			—		1		1
Jeonnam Solar Co., Ltd.		Electricity sales			—		16		—
Korea Electric Power Industrial Development Co., Ltd.		Service			13,014		15,852		12,361
DS POWER Co., Ltd.		Service			—		152,025		106,183
Goseong Green Energy Co., Ltd.		Property sales			—		4,004		9,306
Gangneung Eco Power Co., Ltd.		Service			—		6,446		9,761
Shin Pyeongtaek Power Co., Ltd.		Service			—		174		11,344
Naepo Green Energy Co., Ltd.		Electricity sales			—		8		66
Noeul Green Energy Co., Ltd		Electricity sales			—		—		45

F-157


			Sales and others
Company name	Transaction type		2013		2014		2015
			In millions of won
YTN Co., Ltd.	Electricity sales	￦		4,070		7,446		1,753
Busan Green Energy Co., Ltd.	Electricity sales			—		—		1
Korea Electric Vehicle Charge Service	Electricity sales			—		—		2
Ulleungdo Natural Energy Co., Ltd.	Electricity sales			—		—		229
Cheongna Energy Co., Ltd.	Service			13,117		14,153		21,081
Gangwon Wind Power Co., Ltd.	Electricity sales			2,133		2,152		1,046
Hyundai Green Power Co., Ltd.	Electricity sales and design service			15,896		14,943		15,401
Korea Power Exchange	Service			26,710		16,300		4,272
Hyundai Energy Co., Ltd.	Service			21,535		58,566		25,402
Ecollite Co., Ltd.	Interest income			866		—		—
Taebaek Wind Power Co., Ltd.	Service			626		1,653		872
Pyeongchang Wind Power Co., Ltd.	Design service			65		120		72
Daeryun Power Co., Ltd.	Electricity sales			780		1,611		1,731
Changjuk Wind Power Co., Ltd.	Electricity sales			751		1,848		754
KNH Solar Co., Ltd.	Electricity sales			19		17		17
S-Power Co., Ltd.	Service and electricity sales			—		7,564		7,278
Busan Solar Co., Ltd.	Electricity sales			2		17		16
Green Biomass Co., Ltd.	Service			—		—		51
SPC Power Corporation	Interest income			—		—		1,433
PT. Bayan Resources TBK	Electricity sales			—		—		164
Gemeng International Energy Co., Ltd.	Dividend income			—		6,905		37,163
Dolphin Property Limited	Service			32		—		—
E-POWER S.A.	Dividend income			1,902		1,456		—
Pioneer Gas Power Limited	Service			—		214		274
Xe-Pian Xe-Namnoy Power Co., Ltd.	Service			—		1,333		584

F-158


				Sales and others
Company name	Transaction type			2013		2014		2015
				In millions of won
<Joint ventures>
KEPCO SPC Power Corporation		Service and dividend income	￦		15,921		17,243		29,572
Daejung Offshore Wind Power Co., Ltd.		Electricity sales			—		—		1
KEPCO-ALSTOM Power Electronics Systems, Inc.		Service			796		1,129		1,315
Dangjin Echo Power Co., Ltd.		Technical fee			1,431		352		334
Honam Wind Power Co., Ltd.		Electricity sales			—		73		65
Seokmun Energy Co., Ltd.		Technical fee			1,138		1,910		2,395
Incheon New Power Co., Ltd.		Construction revenue			1,435		6,637		388
KW Nuclear Components Co., Ltd.		Service			829		2,307		1,948
Chun-cheon Energy Co., Ltd.		Technical fee			—		—		2,201
Yeonggwangbaeksu Wind Power Co., Ltd.		Electricity sales			—		—		927
GS Donghae Electric Power Co., Ltd.		Service			3,484		4,053		5,614
Busan Shinho Solar Power Co., Ltd.		Electricity sales			—		24		24
Yeongam Wind Power Co., Ltd.		Electricity sales			255		47		—
Global Trade Of Power System Co., Ltd.		Electricity sales			—		39		—
Expressway Solar-light Power Generation Co., Ltd		Electricity sales			215		—		—
Datang Chifeng Renewable Power Co., Ltd.		Interest income			2,460		10,849		9,702
Rabigh Electricity Company		Service			676		38,954		565
Rabigh Operation & Maintenance Company		Service			2,091		2,822		1,780
Datang Chaoyang Renewable Power Co., Ltd.		Dividend income			—		740		—
Shuweihat Asia Operation & Maintenance Company		Dividend income			—		869		1,006
Jamaica Public Service Company Limited		Repair service			2,798		2,865		3,077
KV Holdings, Inc.		Dividend income			319		—		—
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		Dividend income			—		788		—
Amman Asia Electric Power Company		Service			18,092		26,838		48,968
Kelar S.A		Service			—		2,041		6,229

<Others>
Korea Development Bank		Electricity sales			1,057		1,141		4,039
		Interest income			—		—		2,402

F-159

<Purchase and Others>


				Purchase and others
Company name	Transaction type			2013		2014		2015
				In millions of won
<Associates>
Daegu Green Power Co., Ltd.		Electricity purchase	￦		—		—		318,221
Korea Gas Corporation		Purchase of power generation fuel			12,450,325		10,134,526		4,598,763
Dongducheon Dream Power Co., Ltd.		Service			—		—		1,003,346
Gumi-ochang Photovoltaic Power Co., Ltd.		REC purchase			6,498		1,789		—
Chungbuk Photovoltaic Power Co., Ltd.		REC purchase			1,214		575		—
Cheonan Photovoltaic Power Co., Ltd.		REC purchase			1,039		435		—
Daegu Photovoltaic Co., Ltd.		REC purchase			1,943		3,552		3,978
Korea Power Engineering Service Co., Ltd.		Service			—		2,320		3,241
Golden Route J Solar Power Co., Ltd.		REC purchase			983		518		—
Yeongwol Energy Station Co., Ltd.		REC purchase			—		8,640		16,408
KOSCON Photovoltaic Co., Ltd.		REC purchase			549		243		—
Yeonan Photovoltaic Co., Ltd.		REC purchase			162		635		—
Q1 Solar Co., Ltd.		REC purchase			904		2,501		—
Best Solar Energy Co., Ltd.		REC purchase			86		4,882		—
Seokcheon Solar Power Co., Ltd.		REC purchase			2,003		1,193		—
D Solar Energy Co., Ltd.		REC purchase			29		1,163		—
Daeryun Power Co., Ltd.		Electricity purchase			—		—		274,379
KS Solar Corp., Ltd.		REC purchase			—		3,496		6,211
Hyundai Asan Solar Power Co., Ltd.		REC purchase			—		606		—
Heang Bok Do Si Photovoltaic Power Co., Ltd.		Rental fee and others			—		119		479
Korea Electric Power Industrial Development Co., Ltd.		Electricity metering service fee			188,551		240,416		273,057
YTN Co., Ltd.		Advertisement fee			785		410		440
Gangwon Wind Power Co., Ltd.		Electricity purchase			38,980		28,836		21,946
Hyundai Green Power Co., Ltd.		Electricity purchase			313,164		477,642		486,443
Korea Power Exchange		Trading Fees			80,279		74,861		79,283
Hyundai Energy Co., Ltd.		Electricity purchase			1,643		2,961		1,684
Taebaek Wind Power Co., Ltd.		REC purchase			11,680		10,362		6,626
Changjuk Wind Power Co., Ltd.		Electricity purchase			11,893		15,549		6,472
KNH Solar Co., Ltd.		Electricity purchase			5,406		4,914		4,598
S-Power Co., Ltd.		Service			—		105,107		614,658
Busan Solar Co., Ltd.		Electricity purchase			4,433		4,910		4,055
Green Biomass Co., Ltd.		Woodchip purchase			869		1,690		3,782

<Joint ventures>
KEPCO-ALSTOM Power Electronics Systems, Inc.		Service			143		383		47,130
Honam Wind Power Co., Ltd.		Electricity purchase			—		5,304		5,944
Yeonggwangbaeksu Wind Power Co., Ltd.		Electricity purchase			—		—		4,974
Busan Shinho Solar Power Co., Ltd.		REC purchase			8,944		8,115		7,565
Yeongam Wind Power Co., Ltd.		REC purchase			—		7,080		—
Global Trade Of Power System Co., Ltd.		Plant facility purchase			574		79		192
Expressway Solar-light Power Co., Ltd.		Electricity purchase			1,319		3,205		3,451
Jamaica Public Service Company Limited		Service			104		96		106
Amman Asia Electric Power Company		Service			—		—		125

<Others>
Korea Development Bank		Interest expense			71,913		60,631		21,719
		Dividend paid			—		17,294		96,087

F-160

(4)

Receivables and payables arising from related party transactions as of December 31, 2014 and 2015 are as follows:


				Receivables				Payables
Company name	Type			2014		2015		2014		2015
				In millions of won
<Associates>
Daegu Green Power Co., Ltd.		Trade receivables	￦		90		95		—		—
		Trade payables			—		—		—		22,200
Dongducheon Dream Power Co., Ltd.		Trade receivables			1,124		1,206		—		—
		Trade payables			—		—		—		100,396
Korea Gas Corporation		Trade receivables			8,746		7,931		—		—
		Non-trade receivables and others			152		255		—		—
		Trade payables			—		—		1,104,075		302,752
Jeongam Wind Power Co., Ltd.		Trade receivables			—		—		—		—
		Non-trade payables and others			—		—		1		1
Korea Power Engineering Services Co., Ltd.		Non-trade payables and others			—		—		447		—
Yeongwol Energy Station Co., Ltd.		Trade receivables			7,060		7,063		—		—
		Trade payables			—		—		—		229
KS Solar Corp., Ltd.		Trade receivables			2		2		—		—
		Trade payables			—		—		—		68
		Non-trade payables and others			—		—		113		281
Heang Bok Do Si Photovoltaic Power Co., Ltd.		Trade receivables			—		—		—		—
Korea Electric Power Industrial Development Co., Ltd.		Trade receivables			692		469		—		—
		Non-trade receivables and others			23		27		—		—
		Non-trade payables and others			—		—		28,195		27,569
DS Power Co., Ltd.		Trade receivables			46		260		—		—
		Non-trade receivables and others			35,909		—		—		—
		Non-trade payables and others			—		—		1		135
Goseong Green Energy Co., Ltd.		Non-trade payables and others			—		—		3,900		3,900
Gangneung Eco Power Co., Ltd.		Trade receivables			—		1		—		—
		Non-trade receivables and others			—		1,701		—		—
Shin Pyeongtaek Power Co., Ltd.		Trade receivables			—		—		—		—
		Non-trade receivables and others			191		272		—		—
Naepo Green Energy Co., Ltd.		Trade receivables			8		9		—		—
YTN Co., Ltd.		Trade receivables			91		93		—		—
		Non-trade payables and others			—		—		44		154
Cheongna Energy Co., Ltd.		Trade receivables			148		157		—		—
		Non-trade receivables and others			5,073		375		—		—
Gangwon Wind Power Co., Ltd.		Trade receivables			6		12		—		—
		Trade payables			—		—		—		1,753
		Non-trade payables and others			—		—		4,982		—
Hyundai Green Power Co., Ltd.		Trade receivables			837		962		—		—
		Trade payables			—		—		—		36,079
		Non-trade payables and others			—		—		43,417		—
Korea Power Exchange		Trade receivables			611		1,452		—		—
		Non-trade receivables and others			—		112		—		—
		Trade payables			—		—		3,676		3,529
		Non-trade payables and others			—		—		1,360		1,529
Hyundai Energy Co., Ltd.		Trade receivables			30,186		44,510		—		—
		Trade payables			—		—		—		178
		Non-trade payables and others			—		—		8,649		8,030
Ecollite Co., Ltd.		Non-trade receivables and others			—		210		—		—
Taebaek Wind Power Co., Ltd.		Non-trade receivables and others			104		147		—		—
		Trade payables			—		—		862		349
Pyeongchang Wind Power Co., Ltd.		Non-trade receivables and others			306		170		—		—
Daeryun Power Co., Ltd.		Trade receivables			150		117		—		—
		Trade payables			—		—		—		27,374
Changjuk Wind Power Co., Ltd.		Non-trade receivables and others			93		153		—		—
		Non-trade payables and others			—		—		867		330

F-161


			Receivables				Payables
Company name	Type		2014		2015		2014		2015
			In millions of won
Busan Solar Co., Ltd.	Trade receivables	￦		1		1		—		—
	Trade payables			—		—		—		1
	Non-trade payables and others			—		—		127		208
KNH Solar Co., Ltd.	Trade receivables			1		2		—		—
S-Power Co., Ltd.	Trade receivables			213		121		—		—
	Non-trade receivables and others			1,203		—		—		—
	Trade payables			—		—		—		54,141
	Non-trade payables and others			—		—		55,238		—
Green Biomass Co., Ltd.	Non-trade receivables and others			—		109		—		—
	Non-trade payables and others			—		—		—		152
SPC Power Corporation	Non-trade receivables and others			64		—		—		—
Pioneer Gas Power Limited	Non-trade receivables and others			214		26		—		—
Xe-Pian Xe-Namnoy Power Co., Ltd.	Non-trade receivables and others			547		—		—		—

<Joint ventures>
KEPCO SPC Power Corporation	Trade receivables			2,519		—		—		—
	Non-trade receivables and others			1,736		252		—		—
KEPCO-ALSTOM Power	Non-trade receivables and others			668		251		—		—
Electronics Systems, Inc.	Non-trade payables and others			—		—		—		61
Dangjin Echo Power Co., Ltd.	Trade receivables			—		—		—		—
	Non-trade receivables and others			1,955		300		—		—
Honam Wind Power Co., Ltd.	Trade payables			—		—		—		342
	Non-trade payables and others			—		—		2,481		2,124
Seokmun Energy Co., Ltd.	Non-trade receivables and others			1,101		2,086		—		—
Incheon New Power Co., Ltd.	Trade receivables			1,383		128		—		—
Chun-cheon Energy Co., Ltd.	Non-trade receivables and others			—		112		—		—
	Trade receivables			—		7		—		—
Yeonggwangbaeksu Wind Power Co., Ltd.	Non-trade receivables and others			—		136		—		—
	Trade payables			—		—		—		627
	Non-trade payables and others			—		—		—		2,000
KW Nuclear Components Co., Ltd.	Non-trade receivables and others			57		—		—		—
GS Donghae Electric Power Co., Ltd.	Trade receivables			—		970		—		—
	Non-trade receivables and others			14,626		1,216		—		—
Busan Shinho Solar Power Co., Ltd.	Trade receivables			2		2		—		—
	Trade payables			—		—		—		272
	Non-trade payables and others			—		—		1,516		970
Datang Chifeng Renewable Power Co., Ltd.	Non-trade receivables and others			511		368		—		—
Rabigh Operation & Maintenance Company	Non-trade receivables and others			—		1,780		—		—
Jamaica Public Service Company Limited	Trade receivables			1,121		1,193		—		—
	Non-trade receivables and others			303		581		—		—
Amman Asia Electric Power Company	Trade receivables			11,171		739		—		—

<Others>
Korea Development Bank	Accrued interest income			—		212		—		—
	Non-trade receivables and others			—		45,623		—		—
	Non-trade payables and others			—		—		4,069		493
	Derivatives			2,737		3,777		4,620		2,313

F-162

(5)

Loans and others arising from related party transactions as of December 31, 2014 and 2015 are as follows:


Type	Company name		Beginning balance		Loans		Collection		Others		Ending balance
			In millions of won
Joint ventures	KEPCO SPC Power Corporation	￦		32,866		—		(5,205)		1,990		29,651
Joint ventures	Datang Chifeng Renewable Power Co., Ltd.			29,731		—		(7,651)		1,695		23,775
Joint ventures	Jamaica Public Service Company Limited			2,199		—		—		146		2,345
Associates	KNOC Nigerian East Oil Co., Ltd. KNOC Nigerian West Oil Co., Ltd.			26,544		117		—		1,635		28,296
	Allowance for doubtful accounts			(16,884)		—		—		(871)		(17,755)
Associates	Rabigh Electricity Company			62,713		—		(20,578)		3,417		45,552
Associates	PT. Cirebon Electric Power			45,136		4,260		(9,412)		995		40,979
Associates	PT Mutiara Jawa			—		450		—		—		450
Associates	Xe-Pian Xe-Namnoy Power Co., Ltd.			1,413		—		—		—		1,413

		￦		183,718		4,827		(42,846)		9,007		154,706

(6)

Borrowings arising from related party transactions as of December 31, 2014 and 2015 are as follows:


Related parties	Type		Beginning balance		Borrowings		Repayment			Ending balance
			In millions of won
Korea Development Bank	Facility	￦		1,552,600		12,300		(1,303,463	)		261,437
	Others			7,178		—		(760	)		6,418
	Operating funds			8,618		12,000		(8,618	)		12,000

(7)

Guarantees provided to associates or joint ventures as of December 31, 2015 are as follows:


Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit		Guarantee
In millions of won and thousands of foreign currencies
Korea Electric Power Corporation	KEPCO SPC Power Corporation	Debt guarantees		USD 88,138	SMBC, The Export-import Bank of Korea and ADB
Korea Electric Power Corporation	Shuweihat Asia O&M Co., Ltd.	Performance guarantees		USD 11,000	SAPCO
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	Rabigh Operation & Maintenance Company.	Performance guarantees and others		USD 1,387	Rabigh Electricity Company
Korea Electric Power Corporation	Nghi Son 2 Power Ltd.	Bidding guarantees		USD 10,000	SMBC Ho Chi Minh
Korea Western Power Co., Ltd.	Cheongna Energy Co., Ltd.	Collateralized money invested		KRW 48,353	KEB Hana Bank and others
		Guarantees for supplemental funding(*1)		-
Korea Western Power Co., Ltd.	Xe-Pian Xe-Namnoy Power Co., Ltd.	Payment guarantees for business reserve		USD 2,500	Krung Thai Bank
		Collateralized money invested		USD 29,357
		Guarantees for supplemental funding(*1)		-
		Impounding bonus guarantees		USD 5,000	SK E&C

F-163


Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit		Guarantee
In millions of won and thousands of foreign currencies
Korea Western Power Co., Ltd.	Rabigh Operation & Maintenance Company.	Performance guarantees		SAR 4,800	Saudi Arabia British Bank
Korea Western Power Co., Ltd.	Daegu Photovoltaic Co., Ltd.	Collateralized money invested		KRW 1,230	IBK
Korea Western Power Co., Ltd.	Dongducheon Dream Power Co., Ltd.(*2)	Collateralized money invested		KRW 111,134	Kookmin Bank
Korea Western Power Co., Ltd.	PT. Mutiara Jawa	Collateralized money invested		USD 2,610	Shinhan Bank Singapore
Korea Western Power Co., Ltd.	Heangbok Do Si Photovoltaic Power Co., Ltd.	Collateralized money invested		KRW 194	Nonghyup Bank
Korea Western Power Co., Ltd.	Shin Pyeongtaek Power Co., Ltd.	Collateralized money invested		KRW 40	Kookmin Bank
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.	Seokmun Energy Co., Ltd.	Collateralized money invested Guarantees for supplemental funding(*1)		KRW 580 —	KEB Hana Bank and others
Korea East-West Power Co., Ltd.	Chun-cheon Energy Co., Ltd.	Collateralized money invested Guarantees for supplemental funding(*1)		KRW 32,868 —	Kookmin Bank and others
Korea East-West Power Co., Ltd.	Honam Wind Power Co., Ltd.	Collateralized money invested Guarantees for supplemental funding(*1)		KRW 3,480 —	Shinhan Bank and others
Korea East-West Power Co., Ltd.	GS-Donghae Electric Power Co., Ltd.	Collateralized money invested Guarantees for supplemental funding(*1)		KRW 204,000 —	Korea Development Bank and others
Korea East-West Power Co., Ltd.	Yeonggwangbaeksu Wind Power Co., Ltd.	Collateralized money invested Guarantees for supplemental funding(*1)		KRW 3,000 —	Hyundai Marine & Fire Insurance Co., Ltd. and others
Korea East-West Power Co., Ltd.	PT. Tanjung Power Indonesia	Debt guarantees		USD 10,500	The Bank of Tokyo-Mitsubishi
Korea Southern Power Co., Ltd.	KNH Solar Co., Ltd.	Collateralized money invested Performance guarantees and guarantees for supplemental funding(*1)		KRW 1,296 —	Shinhan Bank and Kyobo Life Insurance Co., Ltd.

F-164


Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit		Guarantee
In millions of won and thousands of foreign currencies
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(*1)		—
Korea Southern Power Co., Ltd.	Changjuk Wind Power Co., Ltd.	Collateralized money invested		KRW 3,801	Shinhan Bank and Woori Bank
		Guarantees for supplemental funding(*1)		—
Korea Southern Power Co., Ltd.	Busan Solar Co., Ltd.	Collateralized money invested		KRW 793	Consus Asset Management Co., Ltd
Korea Southern Power Co., Ltd.	Daegu Green Power Co., Ltd.	Collateralized money invested Performance guarantees and guarantees for supplemental funding(*1)		KRW 76,193	KEB Hana Bank and Kookmin Bank
Korea Southern Power Co., Ltd.	KS Solar Corp. Ltd.	Collateralized money invested		KRW 637	Shinhan Capital Co., Ltd.
Korea Southern Power Co., Ltd.	Kelar S.A	Performance guarantees(*1)		—	KEB Hana Bank, SMBC and others
		Debt guarantees		USD 132,600	SMBC, MIZUHO Bank and others
Korea Southern Power Co., Ltd.	DS Power Co., Ltd.	Collateralized money invested		KRW 2,900	Korea Development Bank and Daewoo Securities Co., Ltd.
		Guarantees for supplemental funding(*1)		—
Korea Southern Power Co., Ltd.	Pyoungchang Wind Power Co., Ltd.	Collateralized money invested		KRW 3,875	Woori Bank and Shinhan Bank
		Performance guarantees and guarantees for supplemental funding(*1)		—
Korea Southern Power Co., Ltd.	Taebaek Wind Power Co., Ltd.	Guarantees for supplemental funding(*1)		—	Shinhan Bank and Cheju Bank
KEPCO Engineering & Construction Company, Inc.	DS Power Co., Ltd.	Collateralized money invested		KRW 15,000	Korea Development Bank and Daewoo Securities Co., Ltd.
		Performance guarantees and guarantees for supplemental funding(*1)		—
Korea Midland Power Co., Ltd.	Hyundai Green Power Co., Ltd.	Collateralized money invested		KRW 87,003	Korea Development Bank and others
		Guarantees for supplemental funding(*1)		—

F-165


Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit		Guarantee
In millions of won and thousands of foreign currencies
Korea Midland Power Co., Ltd.	PT. Cirebon Electric Power	Debt guarantees		USD 9,653	Nonghyup Bank
Korea Midland Power Co., Ltd.	PT Wampu Electric Power	Performance guarantees(*1)		—	KEB Hana Bank
Korea Midland Power Co., Ltd.	Gangwon Wind Power Co., Ltd.	Collateralized money invested		KRW 7,410	IBK and others
Korea South-East Power Co., Ltd.	Hyundai Energy Co., Ltd.	Collateralized money invested Performance guarantees and guarantees for supplemental funding(*1)		KRW 71,070 —	Korea Development Bank and others
Korea South-East Power Co., Ltd.	RES Technology AD	Collateralized money invested Debt guarantees		KRW 15,595 EUR 4,271	Korea Development Bank and others
Korea South-East Power Co., Ltd.	ASM-BG Investicii AD	Collateralized money invested Debt guarantees		KRW 16,101 EUR 4,175	Korea Development Bank and others
Korea South-East Power Co., Ltd.	Express Solar-light Power Generation Co., Ltd.	Guarantees for supplemental funding(*1)		—	Woori Bank
Korea South-East Power Co., Ltd.	S-Power Co., Ltd.	Collateralized money invested Performance guarantees and guarantees for supplemental funding(*1)		KRW 132,300 —	Korea Development Bank and others
KOSEP USA, INC.	KODE NOVUS II LLC	Guarantees for supplemental funding(*1)		—	Korea Development Bank and others
KOSEP USA, INC.	KODE NOVUS I LLC	Guarantees for supplemental funding(*1)		—	The Export-Import Bank of Korea and others
Korea Hydro & Nuclear Power Co., Ltd.	Yeongwol Energy Station Co., Ltd.	Collateralized money invested		KRW 1,400	Meritz Fire & Marine Insurance Co., Ltd.
KEPCO Plant Service & Engineering Co., Ltd.	Incheon New Power Co., Ltd.	Collateralized money invested Guarantees for supplemental funding(*1)		KRW 6,800 —	Shinhan Bank

(*1)	The Company guarantees to provide supplemental funding for business with respect to excessive business expenses or insufficient repayment of borrowings.

(*2)	According to the Project Financing Agreement (“Agreement”), if there is any capital increase in Dongducheon Dream Power Co., Ltd. by issuance of new stock after the date of the Agreement, the newly issued shares owned by the Company shall also be provided as a collateral for the Project Financing.

(8)

Guarantees provided from related parties as of December 31, 2015 are as follows:


Primary guarantor	Secondary guarantor	Type of guarantees	Credit limit
	In thousands of U.S. dollars
Korea Development Bank	Korea Electric Power Corporation	Debt guarantees		USD 195,175

F-166

(9)

Derivatives transactions with related parties as of December 31, 2015 are as follows:

(i)

Currency Swap

Counterparty

Contract
year

Contract
Amount

Contract interest rate
per annum

Contract
exchange
rate

Pay

Receive

Pay
(%)

Receive
(%)

In millions of won and thousands of U.S. dollars

Korea Development Bank

2015~2025

￦

111,190

USD 100,000

2.62

3.25

￦

1,111.90

(ii)

Interest Rate Swap

Counterparty

Contract
year

Contract
amount

Contract interest rate per annum

Pay (%)

Receive (%)

In millions of won

Korea Development Bank

2012~2016

￦

200,000

3.57%

3M CD + 0.26

Korea Development Bank

2012~2016

50,000

3.49%

3M CD + 0.25

Korea Development Bank(*)

2014~2029

40,000

3M CD – 0.03%

4.65%

(*)

The contract is an interest rate swap hedging on Electricity Bonds 885, and the banks would notify the Company of the early termination every year on the early termination notification date (every year on April 28, from 2017 until 2028). The contract will be terminated if the early termination is notified.

(10)

Salaries and other compensations to the key members of management of the Company for the years ended December 31, 2013, 2014 and 2015 are as follows:


Type		2013		2014		2015
		In millions of won
Salaries	￦		1,114		993		1,271
Employee benefits			63		44		59

	￦		1,177		1,037		1,330

F-167

48.

Non-Cash Transactions

Significant non-cash investing and financing transactions for the years ended December 31, 2013, 2014 and 2015 are as follows:


Transactions		2013		2014		2015
		In millions of won
Transfer from construction-in-progress to other assets	￦		6,507,426		9,465,204		10,491,054
Recognition of asset retirement cost and related provision for decommissioning costs			251,054		282,396		699,673
Transfer from provision for disposal of spent nuclear fuel to accrued expenses			403,638		377,697		491,755
Transfer from property, plant and equipment to finance lease receivables			470,867		—		—

F-168

49.

Commitments for Expenditure

(1)

The agreements for acquisition of property, plant and equipment as of December 31, 2014 and 2015 are as follows:


		2014				2015
Contracts		Amounts		Balance		Amounts		Balance
		In millions of won
Purchase of cable(TR CNCE-W/AL,1C,400SQ) (unit price contract)	￦		105,588		63,375		105,588		—
Purchase of cable(TR CNCE-W,1C,600SQ) (unit price contract)			43,495		35,772		43,495		—
Purchase of GIS(362kV 4000A 60KA)			40,630		37,048		40,630		—
Purchase of Concrete Poles(10M, 350KGF)			123,888		97,944		123,888		—
Purchase of G-type low pressure electronic Watt-hour meter (3P4W, 100(10)A) (unit price contract)			48,962		21,744		48,962		—
Purchase of 345kV cable(PVC, 1C, 2500SQ, 200KV) and 17 other types			40,450		7,045		40,450		—
Purchase of Kerosene (higher than 40DEG)			—		—		26,163		8,482
Construction of New Kori units (#3,4)			6,481,107		312,081		6,856,150		214,678
Construction of New Kori units (#5,6)			8,625,387		8,281,741		8,625,387		7,899,368
Construction of New Hanwool units (#1,2)			7,982,343		4,039,178		7,982,343		2,578,707
Construction of New Hanwool units (#3,4)			8,261,817		8,247,541		8,261,817		8,238,651
Construction of New Wolseong units (#1,2)			5,310,003		171,367		5,310,003		—
Construction of Yeosu Thermal Power units (#1)			495,368		255,973		489,440		30,853
Construction of Yeongheung Thermal Power units (#5,6)			836,708		46,962		576,187		—
Other contracts			75,326		27,341		199,846		140,563
Service of designing New Boryeong units (#1,2)			124,082		43,606		126,038		32,910
Construction of New Boryeong units (#1,2)			246,964		66,982		246,964		10,859
Purchase of Haengbokdosi cogeneration units			305,360		46,007		337,283		—
Purchase of Wonju RDF cogeneration units			50,220		17,526		52,877		—
Purchase of coal handling machine for construction of New Boryeong units (#1,2)			144,122		72,967		146,353		25,266
Construction of Seoul Combined units (#1,2)			225,993		215,265		227,000		182,630
Purchase of smoke eliminating machine for construction of New Boryeong units (#1,2)			118,058		46,873		118,058		8,775
Electricity construction of New Boryeong units (#1,2)			245,357		170,029		245,357		36,893
Purchase of main machine for construction of Seoul Combined units (#1,2)			360,500		328,210		360,500		328,210
Purchase of main machine for construction of New Boryeong units (#1,2)			851,132		412,758		851,132		137,744
Construction of harbor facility for New Boryeong units (#1,2)			73,702		35,672		78,166		—
Purchase of furnace for construction of Taean units (#9,10)			561,071		318,017		546,637		66,271
Service of designing Taean units (#9,10)			107,516		39,247		107,516		26,437
Purchase of desulfurization machine for construction of Taean units (#9,10) (conditional contract for installation)			90,490		46,808		91,592		6,175
Purchase of turbine generator for construction of Taean units (#9,10)			207,603		132,604		426,139		103,146
Purchase of coal handling machine for construction of Taean (#9,10) and IGCC units (conditional contract for installation)			139,200		35,688		146,634		9,943
Purchase of gas plant machine for construction of Taean IGCC units			458,388		37,773		457,423		4,541
Purchase of combined generating machine for construction of Taean IGCC units			190,207		17,900		204,514		25,808
Purchase of oxygen plant for construction of Taean IGCC units			95,459		12,611		97,804		4,252

F-169


		2014				2015
Contracts		Amounts		Balance		Amounts		Balance
		In millions of won
Service of designing Taean IGCC plant units	￦		44,374		9,653		44,374		5,520
Purchase of coal handling machine for construction of Samcheok units (#1,2)			290,417		111,090		290,417		23,795
Construction of Samcheok units (#1,2)			384,716		82,705		384,716		27,018
Construction of breakwater for Samcheok units (#1,2)			84,893		30,328		84,893		18,096
Purchase of furnace for construction of Samcheok units (#1,2)			1,087,301		230,298		1,091,303		115,896
Purchase of electric precipitator for construction of Samcheok units (#1,2)			53,705		12,036		53,705		—
Purchase of turbine generator for construction of Samcheok units (#1,2)			223,407		14,633		213,761		4,040
Service of designing Samcheok units (#1,2)			113,161		47,523		112,949		42,631
Purchase of ash disposing facility for construction of Samcheok units (#1,2)			—		—		46,970		2,857
Purchase of Andong main machine			234,601		11,730		234,601		—
Construction of yard for Andong natural gas power plant			—		—		40,960		2,528
Service of designing Dangjin units (#9,10)			108,677		22,915		109,340		16,261
Purchase of main machine for construction of Dangjin units (#9,10)			297,989		12,724		561,586		4,694
Construction of Dangjin units (#9,10)			355,285		22,179		388,559		6,054
Purchase of Ulsan combined cycle power units (#4) (conditional contract for installation)			286,755		8,355		595,223		—
Electicity construction of Dangjin units (#9,10)			223,085		80,891		294,099		16,812
Construction of office building (KOPEC)			213,216		45,694		215,395		—
Purchase of cable(TR CNCE-W,600MM2, 13, 2KV)			—		—		50,581		50,581
Purchase of Concrete Poles(10M, 350KGF)			—		—		106,037		74,549
Purchase of Ground Switch(44-D-A125, 600AX4)			—		—		43,624		42,912

	￦		47,068,078		24,484,409		48,561,429		20,575,406

F-170

(2)

As of December 31, 2015, 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	2015 ~ 2030	34,719 Ton U3O8
Transformed	2015 ~ 2022	17,238 Ton U
Enrichment	2015 ~ 2029	34,879 Ton SWU
Molded	2015 ~ 2022	1,852 Ton U

F-171

50.

Contingencies and Commitments

(1)

Ongoing litigations related with contingent liabilities and assets as of December 31, 2014 and 2015 are as follows:


	2014					2015
	Number of cases			Claim amount		Number of cases			Claim amount
	In millions of won
As the defendant		669	￦		637,749		750	￦		1,052,301
As the plaintiff		164			460,965		170			436,490

The Company is the defendant against a number of claims. The following are potentially significant claims pertaining to the Company:

①

Hyundai Engineering & Construction Co., Ltd.(“Hyundai E&C”), SK Engineering & Construction Co., Ltd. and GS Engineering & Construction Co., Ltd. filed a law suit for increase in contract bill (formerly, amounted to ￦1,000 million) against Korea Hydro & Nuclear Co., Ltd.(“KHNP”) in September 2013, in relation to the design changes on the plant construction of New Hanwool 1 & 2. Hyundai Engineering & Construction Co., Ltd. and two other companies increased the contract bill to ￦133,426 million in October 2014 and ￦204,040 million in November 2015, respectively, and submitted an application to demand extra contract payments due to the design changes.

Due to the inherent uncertainties, the Company is not able to reliably estimate the amount of compensation and timing if any, that might be awarded to Hyundai E&C and two other companies. Consequently, it is not possible for the Company to make an estimate of the expected financial effect that will result from the ultimate resolution of a lawsuit. Therefore, the Company has not recognized any provision for the lawsuit.

②

In December 2013, the Supreme Court of Korea ruled that regular bonuses also fall under the category of ordinary wages on the condition that those bonuses are paid regularly and uniformly. Also, the Supreme Court ruled that employees shall retroactively demand certain wages based on the new ordinary wages that include regular bonuses as additional wages. However, the request may be limited to the extent of the principle of good faith.

The Company believes that the possibility of economic outflow is probable on the ongoing and the expected lawsuit. For this reason, the Company recognized ￦145,522 million of other provision in relation to the lawsuit.

③

KHNP, a subsidiary of the Company, adopted amendments to remuneration regulations and bylaws regarding basic bonuses in the year 2012. With respect to this, a lawsuit was filed in January 2015 (claim amount: ￦11,838 million) by employees against KHNP for what they claim to be unpaid bonuses, which is derived from different interpretations of the remuneration regulations and bylaws applied to the three-month working period from September to December 2011.

F-172

(2)

Guarantees of borrowings provided to other companies as of December 31, 2014 and 2015 are as follows:

①

The Company has a borrowing of ￦22,500 million from Long Lasting Value (“LLV”) as of December 31, 2015. LLV obtains loans from major stockholders, such as Samsung Life Insurance, and lends the money to other third parties. The Company guarantees secured payments to the major stockholders of LLV, such as payment of principal, tax, commissions, etc., with a limit of ￦23,900 million.

②

In order to secure its status as a shareholder of Navanakom Electric Co., Ltd., the Company has signed a fund supplement contract. According to the contract, in case Navanakom Electric Co., Ltd. does not have sufficient funds for its operation or repayment of borrowings, the Company bears a payment obligation in proportion to its ownership.

③

The Company has outstanding borrowings with a limit of USD 275,600,000 from its creditors such as International Finance Corporation. Regarding the borrowing contract, the Company has guaranteed capital contribution of USD 69,808,000 and additional contribution up to USD 19,000,000 for contingencies, if any. Moreover, for one of the electricity purchasers, Central Power Purchasing Agency Guarantee Ltd., the Company has provided payment guarantee up to USD 2,777,000, in case of construction delay or insufficient contract volume after commencement of the construction.

(3)

Credit lines provided by financial institutions as of December 31, 2015 are as follows:


Commitments	Financial institutions	Currency	Amount
		In millions of won and thousands of foreign currencies
Commitments on bank-overdraft	Nonghyup Bank and others	KRW		1,915,000
Commitments on bank-daylight overdraft	Nonghyup Bank and others	KRW		280,000
Limit amount available for CP	Shinhan Bank and others	KRW		800,000
Limit amount available for card	KEB Hana Bank and others	KRW		55,578
	Banco de Oro	PHP		5,000
Certification of payment on payables from foreign country	Korea Development Bank and others	USD		198,175
Loan limit	Kookmin Bank and others	KRW		705,584
	BNP Paribas and others	USD		2,228,059
Certification of payment on L/C	KEB Hana Bank	EUR		260
	KEB Hana Bank	GBP		61,169
	Woori Bank and others	USD		1,229,049
Certification of performance guarantee on contract	Kookmin Bank	EUR		14,833
	KEB Hana Bank	INR		236,443
	Seoul Guarantee Insurance and others	KRW		264,538
	Bank of Kathmandu	NPR		32,633
	First Gulf Bank and others	USD		767,485
Certification of bidding	The Export-Import Bank of Korea and others	USD		10,450
Advance payment bond, Warranty bond, Retention bond and others	KEB Hana Bank	INR		157,830
	KEB Hana Bank and others	NPR		36,309
	HSBC and others	USD		571,349
Others	Shinhan Bank and others	JPY		2,245,843
	KEB Hana Bank and others	KRW		57,300
	KEB Hana Bank	SAR		2,240
	HSBC and others	USD		1,085,305
Inclusive credit	Shinhan Bank	INR		47,489
	KEB Hana Bank	KRW		501,500
	HSBC and others	USD		774,510
Trade finance	BNP Paribas and others	USD		800,000

(4)

The Company voluntarily suspended operations of the Gangneung hydroelectric generating plant, with a carrying amount of ￦101,371 million, to improve the quality of water used in generating electricity. The expenses related to the suspension of operations of ￦779 million and depreciation on the utility plant of ￦6,699 million are charged to other expenses for the year ended December 31, 2015.

F-173

(5)

As of December 31, 2015, the blank check and assets provided as collaterals or pledges to financial institutions by the Company are follows:

Guarantor

Guarantee

Type of guarantee

Currency

Amount

Description

In millions of won and thousands of foreign currencies

KEPCO Nuclear Fuel Co., Ltd.

Korea Resources

Corporation

Blank check

KRW

—

Collateral for project loan

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 Midland Power Co.,Ltd.

IBK and others

All shareholdings of

Commerce and

Industry Energy Co., Ltd.

KRW

13,605

Collateral for borrowings

Korea Southern Power Co., Ltd.

Shinhan Bank

All shareholdings of

KOSPO Youngnam

Power Co., Ltd.

KRW

25,000

Collateral for borrowings

Korea South-East Power Co., Ltd.

International Finance Corporation

and others

Shareholdings of

Mira Power Limited

KRW

38,206

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

KEPCO KDN Co., Ltd.

KEB Hana Bank

Cash and cash

equivalents

KRW

740

Establishment the right of pledge for lending

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.

IBK and others

Land, buildings,

structures and

machinery

KRW

88,300

Collateral for borrowings

Cash and cash equivalents

KRW

6,839

Gyeongju Wind Power Co., Ltd.

Korea

Development

Bank and others

Property, plant and

equipment and others

KRW

35,386

Collateral for borrowings

Existing or expected trade receivables and others

KRW

2,469

Cash and cash equivalents

KRW

4,757

Qatrana Electric Power Company

The Islamic

Development

Bank and others

Finance Lease receivable

and property, plant and equipment and others

JOD

44,599

Collateral for borrowings

KST Electric Power Company

Scotiabank Inverlat, S.A

Finance Lease receivable

and others

USD

330,000

Collateral for borrowings

(*)

The Company provided the financial institutions with shares of Gyeonggi Green Energy Co., Ltd., one of its subsidiaries, as collateral related to long-term borrowings. Additionally, pledge for shares, pledge for transfer of rights of long-term borrowings, pledge for insurance claims and other pledges were established.

F-174

51.

Subsequent Events

Subsequent to the December 31, 2015, the subsidiaries of the Company, Korea Western Power Co. Ltd., and Korea Midland Power Co., Ltd., have issued new debt securities for funding facilities and operation as follows:


Company Name	Type	Interest rate			Issued date		Maturity		Amounts
	In millions of won
Korea Western Power Co., Ltd.	Short-term borrowings		1.71	%		2016.01.05		2016.03.23	￦	20,000
			1.71	%		2016.01.05		2016.03.23		20,000
			1.71	%		2016.01.05		2016.03.23		20,000
			1.71	%		2016.01.05		2016.03.23		20,000
			1.46	%		2016.01.21		2016.01.22		70,000
			1.46	%		2016.01.21		2016.01.22		30,000
			1.52	%		2016.01.21		2016.01.28		100,000
	Corporate Bonds #30-1		1.88	%		2016.01.28		2021.01.28		90,000
	Corporate Bonds #30-2		2.10	%		2016.01.28		2026.01.28		110,000
Korea Midland Power Co., Ltd.	The 5th Global Bond (Reg S only)		2.50	%		2016.01.21		2021.07.21		363,000
	Corporate Bonds #34-1		1.94	%		2016.03.11		2026.03.11		60,000
	Corporate Bonds #34-2		2.01	%		2016.03.11		2031.03.11		130,000

F-175

INDEX OF EXHIBITS



1.1		Articles of Incorporation, as last amended on November 20, 2014 (in English)*

2.1		Form of Deposit Agreement**

8.1		List of Subsidiaries****

12.1		Certifications of our Chief Executive Officer required by Rule 13a-14(a) of the Exchange Act (Certifications under Section 302 of the Sarbanes-Oxley Act of 2002)

12.2		Certifications of our Chief Financial Officer required by Rule 13a-14(a) of the Exchange Act (Certifications under Section 302 of the Sarbanes-Oxley Act of 2002)

13.1		Certifications of our Chief Executive Officer required by Rule 13a-14(b) and Section 1350 of Chapter 63 of the United States Code (18 U.S.C. 1350) (Certifications under Section 906 of the Sarbanes-Oxley Act of 2002)

13.2		Certifications of our Chief Financial Officer required by Rule 13a-14(b) and Section 1350 of Chapter 63 of the United States Code (18 U.S.C. 1350) (Certifications under Section 906 of the Sarbanes-Oxley Act of 2002)

15.1		The Korea Electric Power Corporation Act, as amended on December 31, 2014 (in English)*

15.2		Enforcement Decree of the Korea Electric Power Corporation Act, as amended on March 23, 2013 (in English)***

15.3		The Public Agencies Management Act, as amended on May 28, 2014 (in English)*

15.4		Enforcement Decree of the Public Agencies Management Act, as amended on March 31, 2016 (in English)****

*	Incorporated by reference to the Registrant’s annual report on Form 20-F (No. 001-13372) previously filed on April 30, 2015.

**	Incorporated by reference to the Registrant’s Registration Statement on Form F-6 with respect to the ADSs, registered under Registration No. 333-196703.

***	Incorporated by reference to the Registrant’s annual report on Form 20-F (No. 001-13372) previously filed on April 30, 2013.

****	Incorporated by reference to the Registrant’s annual report on Form 20-F (No. 001-13372) previously filed on April 29, 2016.

E-1