6-K 1 d406731d6k.htm FORM 6-K

Form 6-K

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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN PRIVATE ISSUER

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

the Securities Exchange Act of 1934

For the Month of June 2017

KOREA ELECTRIC POWER CORPORATION

(Translation of registrant’s name into English)

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

(Address of principal executive offices)

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

Form 20-F  ☒             Form 40-F  ☐

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

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

Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes  ☐            No  ☒

If “Yes” is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b): 82-            .

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

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QUARTERLY BUSINESS REPORT

(For the period from January 1, 2017 to March 31, 2017)

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

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

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

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I. Company Overview

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

2. Information of the company

(Address) 55 Jeollyeok-ro, Naju-si, Jeollanam-do, 58217, Korea

(Phone number) 82-61-345-4213

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

3. Major businesses

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

• development of electric power resources;

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

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

• overseas business related to the businesses mentioned above;

• investment or contributions related to the businesses mentioned above;

• development and operation of certain real estate holdings; and

• other businesses entrusted by the government.

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

4. Subsidiaries and affiliates of KEPCO

		(As of March 31, 2017)
Classification		Consolidated subsidiaries				Associates and joint ventures				Total
Domestic			22				59				81
Overseas			67				40				109
Total			89				99				188

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5. Major changes in management

A. At the extraordinary general meeting of shareholders of KEPCO held on January 10, 2017, Mr. Moon, Bong-Soo was appointed as a standing director and Executive Vice President & Chief Power System Officer, in replacement of Mr. Chang, Jae-Won who voluntarily resigned.

B. At the annual general meeting of shareholders of KEPCO held on March 21, 2017, Mr. Cho, Hwan-Eik whose term of the office expired was re-elected as the President and Chief Executive Officer.

6. Changes in major shareholders

On December 31, 2014, Korea Development Bank merged with Korea Finance Corporation, and became the largest shareholder of KEPCO.

7. Information regarding KEPCO shares

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

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

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

C. Dividends: Dividend payment of Won 1,980 per share for fiscal year 2016 (Won 1.27 trillion in aggregate). Dividend payments for fiscal year 2015, 2014 and 2013 were Won 3,100, Won 500 and Won 90 per share respectively.

II. Business Overview

1. Consolidated financial results by segment for the first three-month period ended March 31, 2017 and 2016

		(In billions of Won)
		January to March 2016								January to March 2017
		Sales				Operating profit				Sales				Operating profit
Electricity sales			15,566				289				15,193				-784
Nuclear generation			3,310				1,683				2,669				738
Thermal generation			6,235				1,691				6,789				1,522
Others(*)			700				81				669				65
Subtotal			25,811				3,744				25,320				1,541
Adjustment for related-party transactions			-10,126				-139				-10,173				-78
Total			15,685				3,605				15,147				1,463

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

(*) Others relate to 82 subsidiaries including KEPCO E&C, KEPCO KPS, KEPCO NF and KEPCO KDN, among others.

• Sales and operating profit reflects amendments to Korean IFRS 1001 “Presentation of Financial Statements.”

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2. Changes in unit prices of major products

		(In Won per kWh)
Business sector				Company		January to December 2016		January to March 2017
Electricity sold		Residential		KEPCO		121.52		109.40
		Commercial				130.41		130.09
		Educational				111.51		98.68
		Industrial				107.11		109.15
		Agricultural				47.41		47.82
		Street lighting				113.35		109.48
		Overnight usage				67.56		72.69
Electricity from nuclear generation		Nuclear Generation		KHNP		68.89		69.23
Electricity from thermal generation		Thermal generation		KOSEP		71.57		89.30
				KOMIPO		84.33		104.70
				KOWEPO		86.11		107.18
				KOSPO		86.47		106.21
				EWP		84.59		105.99

3. Power purchase from generation companies for the first three-month period ended March 31, 2017

Company		Volume (MWh)				Expense (In billions of Won)
KHNP			37,964,555				2,632
KOSEP			17,696,104				1,581
KOMIPO			12,838,484				1,312
KOWEPO			11,441,238				1,229
KOSPO			11,837,033				1,256
EWP			12,899,514				1,373
Others			28,441,793				3,157
Total			133,118,721				12,540

• Excludes expense related to the renewable portfolio standard provisions and carbon emissions.

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4. Intellectual property as of March 31, 2017

		Patents								Utility models				Designs				Trademarks								Total
		Domestic				Overseas												Domestic				Overseas
KEPCO			1,837				196				84				67				142				43				2,369
Consolidated subsidiaries			3,579				562				763				106				251				23				5,284
Total			5,416				758				847				173				393				66				7,653

III. Financial Information

1. Condensed consolidated financial results as of and for the first three-month period ended March 31, 2017

(In billions of Won)

Consolidated statements of comprehensive income														Consolidated statements of financial position
		January to March 2016				January to March 2017				Change (%)						December 31, 2016				March 31, 2017				Change (%)
Sales			15,685				15,147				-3.4			Total assets			177,837				177,461				-0.2
Operating profit			3,605				1,463				-59.4			Total liabilities			104,787				105,031				0.2
Net income			2,163				900				-58.4			Total equity			73,050				72,430				-0.8

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2. Condensed separate financial results as of and for the first three-month period ended March 31, 2017

(In billions of Won)

Separate statements of comprehensive income														Separate statements of financial position
		January to March 2016				January to March 2017				Change (%)						December 31, 2016				March 31, 2017				Change (%)
Sales			15,566				15,193				-2.4			Total assets			105,321				105,599				0.3
Operating profit			289				-784				-371.5			Total liabilities			49,854				51,089				2.5
Net income			1,046				318				-69.6			Total equity			55,467				54,510				-1.7

IV. Board of Directors (KEPCO Only)

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

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

2. Board meetings and agendas for the first three-month period ended March 31, 2017

Number of meetings		Number of agendas		Classification
				Resolutions		Results		Reports		Results
4		14		10		Approved as proposed		4		Accepted as reported

* The audit committee held 3 meetings with 9 agendas (of which, 4 were resolved as proposed and 5 were approved as reported).

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3. Major activities of the Board of Directors

Date		Agenda		Results		Type
January 19, 2017		Approval of contribution to KEPCO medical corporation		Conditional Approval		Resolution
		Approval of plan to establish ICT backup center		Approved as proposed		Resolution
		Approval of amendment to the rules on employment		Approved as proposed		Resolution
February 17, 2016		Approval of the maximum aggregate amount of remuneration for directors in 2017		Approved as proposed		Resolution
		Approval of consolidated and separate financial statements for the fiscal year 2016		Approved as proposed		Resolution
		Approval to call for the annual general meeting of shareholders for the fiscal year 2016		Approved as proposed		Resolution
		Approval to expand target business to invest in to secure financial resources required for the Energy Valley Dream Plan		Approved as amended		Resolution
		Report on the annual management of commercial papers in 2016		Accepted as reported		Report
		Report on internal control over financial reporting for the fiscal year 2016		Accepted as reported		Report
		Evaluation report on internal control over financial reporting for the fiscal year 2016		Accepted as reported		Report
		Report on the audit result for fiscal year 2016		Accepted as reported		Report
March 3, 2017		Approval of the Statement of Appropriation of Retained Earnings for fiscal year 2016		Approved as proposed		Resolution
March 17, 2017		Approval of guarantee for the solar energy project in Colorado, U.S.A., according to the change of business structure		Approved as proposed		Resolution
		Approval of forming Executive Recommendation Committee and evaluation standard for the candidate of non-standing directors		Approved as proposed		Resolution

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4. Major Activities and Attendance Status of Non-standing directors

Date

Agenda

Ahn, Choong- Yong

Lee, Gang- Hee

Cho, Jeon- Hyeok

Choi, Ki- Ryun

Sung, Tae- Hyun

Koo, Ja- Yoon

Kim, Joo- Suen

Kim, Ji- Hong

January 19, 2017

Approval of contribution to KEPCO medical corporation

For

For

For

For

For

For

For

Against

Approval of plan to establish ICT backup center

For

For

For

For

For

For

For

For

Approval of amendment to the rules on employment

For

For

For

For

For

For

For

For

February 17, 2017

Approval of the maximum aggregate amount of remuneration for directors in 2017

For

For

For

For

For

For

For

Absence

Approval of consolidated and separate financial statements for the fiscal year 2016

For

For

For

For

For

For

For

Absence

Approval to call for the annual general meeting of shareholders for the fiscal year 2016

For

For

For

For

For

For

For

Absence

Approval to expand target business to invest in to secure financial resources required for the Energy Valley Dream Plan

For

For

For

For

For

For

For

Absence

Report on the annual management of commercial papers in 2016

Agenda for Report

Report on internal control over financial reporting for the fiscal year 2016

Agenda for Report

Evaluation report on internal control over financial reporting for the fiscal year 2016

Agenda for Report

Report on the audit result for fiscal year 2016

Agenda for Report

March 3, 2017

Approval of the Statement of Appropriation of Retained Earnings for fiscal year 2016

For

For

For

For

For

For

For

For

March 17, 2017

Approval of guarantee for the solar energy project in Colorado, U.S.A., according to the change of business structure

For

For

For

For

For

For

For

For

Approval of forming Executive Recommendation Committee and evaluation standard for the candidate of non-standing directors

For

For

For

For

For

For

For

For

Attendance Rate

100

%

100

%

100

%

100

%

100

%

100

%

100

%

75

%

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4. Major activities of the Audit Committee

Date		Agenda		Results		Type
January 19, 2017		Audit plans for 2017		Approved as proposed		Resolution
		Education plans for auditors for 2017		Approved as reported		Report
February 17, 2017		Report on the audit result for fiscal year 2016		Approved as reported		Report
		Report on internal control over financial reporting for the fiscal year 2016		Approved as reported		Report
		Evaluation report on internal control over financial reporting for the fiscal year 2016		Approved as reported		Report
March 17, 2017		Auditor’s report on the agendas for the annual general meeting of shareholders		Approved as proposed		Resolution
		Approval of selection of independent auditors of subsidiaries		Approved as proposed		Resolution
		Prior approval for non-audit service for subsidiaries by the independent auditor		Accepted as proposed		Resolution
		Independent auditor’s report on the auditing results for the consolidated and separate financial statements for the fiscal year 2016		Accepted as reported		Report

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

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V. Shareholders

1. List of shareholders as of December 31, 2016

				Number of shareholders		Shares owned				Percentage of total (%)
Government of the Republic of Korea				1			116,841,794				18.20
Korea Development Bank				1			211,235,264				32.90
Subtotal				2			328,077,058				51.10
National Pension Service				1			41,705,930				6.50
Public (non-Koreans)		Common shares		1,701			161,040,488				25.09
		American depositary shares (ADS)		1			36,267,926				5.65
Public     (Koreans)		Corporate		1,398			44,126,225				6.87
		Individual		376,643			30,746,450				4.79
Total				379,746			641,964,077				100.00

• Percentages are based on issued shares of common stock.

• All of our shareholder have equal voting rights.

• Citibank, N.A. is our depositary bank and each ADS represents one-half of one share of our common stock.

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VI. Directors and employees as of and for the first three-month period ended March 31, 2016

(KEPCO Only)

1. Directors

		(In thousands of Won)
Type		Number of directors		Total remuneration				Average remuneration per person
Standing director		6			175,919				29,320
Non-standing director		6			45,000				7,500
Member of Audit Committee		3			43,781				14,594
Total		15			264,700				17,647

2. Employees

(In thousands of Won)

Type		Number of employees												Average continuous service year				Total salaries				Average salaries per person
		Regular				Non- regular				Total
Male			16,901				453				17,354				18.5				374,701,621				21,592
Female			3,838				149				3,987				14.0				65,745,985				16,490
Total			20,739				602				21,341				17.7				440,447,606				20,639

VII. Other Information Necessary for the Protection of Investors

1. Summary of shareholder’s meetings for the first three-month period ended March 31

Type		Agenda		Results
Extraordinary General Meeting held on January 10, 2017		Election of a Standing Director: Moon, Bong-Soo		Approved as proposed
Annaul General Meeting held on March 21, 2017		Approval of financial statements for the fiscal year 2016		Approved as proposed
		Approval of the maximum aggregate amount of remuneration for directors in 2017		Approved as proposed
		Election of President and CEO: Cho, Hwan-Eik		Approved as proposed

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2. Pending legal proceedings as of March 31, 2017

		(In billions of Won)
Type		Number of lawsuits				Amount claimed
Lawsuits where KEPCO and its subsidiaries are engaged as the defendants			703				642
Lawsuits where KEPCO and its subsidiaries are engaged as the plaintiffs			201				586

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SIGNATURES

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

By:		/s/ Kim, Jong-soo
Name:		Kim, Jong-soo
Title:		Vice President

Date: June 30, 2017

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Financial Statements

March 31, 2017

(Unaudited)

(With Independent Auditors’ Review Report Thereon)

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INDEX TO FINANCIAL STATEMENTS

		Page
Independent Auditors’ Review Report			1
Consolidated Interim Statements of Financial Position			3
Consolidated Interim Statements of Comprehensive Income			5
Consolidated Interim Statements of Changes in Equity			7
Consolidated Interim Statements of Cash Flows			9
Notes to the Consolidated Interim Financial Statements			11

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Independent Auditors’ Review Report

Based on a report originally issued in Korean

The Board of Directors and Shareholders

Korea Electric Power Corporation:

Reviewed Financial Statements

We have reviewed the accompanying consolidated interim financial statements of Korea Electric Power Corporation and its subsidiaries (the “Company”), which comprise the consolidated interim statement of financial position as of March 31, 2017, the consolidated interim statements of comprehensive income, changes in equity and cash flows for the three-month periods ended March 31, 2017 and 2016 and notes, comprising a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Interim Financial Statements

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

Auditors’ Review Responsibility

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

We conducted our reviews in accordance with the Review Standards for Quarterly and Semiannual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Review Conclusion

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

Emphasis of Matters

Without qualifying our review report, we draw attention to the following key audit matters of the build-to-order industry that were of significance in our review of the consolidated financial statements as of and for the three-month period ended March 31, 2017, which determination is based on auditor’s professional judgment and communications with those charged with governance, in accordance with the Practical Guide of Korean Standards on Auditing 2016-1. These matters were addressed in the context of our review of the consolidated financial statements as a whole, and we do not issue a separate opinion on this matter.

Also, as stated above under “Auditors’ Review Responsibility”, our responsibility is to issue a report on these consolidated interim financial statements based on our reviews in accordance with the Review Standards for Quarterly and Semi-annual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. Accordingly, we have inquired primarily of persons responsible for financial and accounting matters, and applied analytical and other review procedures on the key audit matters of the build-to-order industry.

We have considered the results from review procedures for these key audit matters in forming our review conclusion on the consolidated interim financial statements as of and for the three-month period ended March 31, 2017.

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When the outcome of a construction contract can be estimated reliably, the Company recognizes contract revenue and costs based on the percentage-of-completion method at the end of the reporting period. Also, the gross amount due from customers for contract work is presented for all contracts in which costs incurred plus recognized profits exceed progress billings. The gross amount due to customers for contract work is presented for all contracts in which progress billings exceed costs incurred plus recognized profits.

Total contract revenue is measured based on an agreed contract price; however, it may fluctuate due to the variation of construction work. The measurement of contract revenue is affected by various uncertainties resulting from unexpected future events. Total contract costs are estimated based on the estimates of future costs such as material costs, labor costs and construction period. The uncertainty of estimated total contract costs and changes in such estimates has an impact on the completion progress and contract revenue.

Considering the impacts from these uncertainty and changes in estimates on profit or loss for the current or future periods, we identified the Company’s revenue recognition accounting policy utilizing the input method, uncertainty of estimated total contract costs, assessment of the percentage-of-completion and accounting for the variation of construction works as significant risks.

We conducted the following review procedures regarding those significant risks described above as of and for the three-month period ended March 31, 2017:

• Inquiry of the accounting policy of revenue recognition and any changes, and significant changes to the contracts

• Analytical review of financial indicators such as contract price, estimated contract costs, cost ratio, ratio of amounts due from/to customers for contract work and others

• Inquiry and analytical review of changes in major components of estimated contract costs

• Inquiry and analytical review of fluctuations in completion progress of contracts including contract price, accumulated contract costs and total contract costs

Other Matters

The procedures and practices utilized in the Republic of Korea to review such consolidated interim financial statements may differ from those generally accepted and applied in other countries.

We have previously audited, in accordance with Korean Standards on Auditing, the consolidated statement of financial position of the Company as of December 31, 2016, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this report, and we expressed an unqualified opinion on those consolidated financial statements in our report dated March 6, 2017. The accompanying consolidated financial position of the Company as of December 31, 2016, is consistent, in all material respects, with the audited consolidated financial statements from which it has been derived.

KPMG Samjong Accounting Corp.

Seoul, Korea

May 15, 2017

This report is effective as of May 15, 2017, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the review report should understand that the above review report has not been updated to reflect the impact of such subsequent events or circumstances, if any.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Financial Position

As of March 31, 2017 and December 31, 2016

(Unaudited)

In millions of won		Note				March 31, 2017				December 31, 2016
Assets
Current assets
Cash and cash equivalents			5,6,7,44			W	3,187,640				3,051,353
Current financial assets, net			5,10,11,12,44				2,211,377				2,671,989
Trade and other receivables, net			5,8,14,20,44,45,46				6,647,239				7,788,876
Inventories, net			13				5,562,031				5,479,443
Income tax refund receivables			40				12,484				19,163
Current non-financial assets			15				785,086				631,860
Assets held-for-sale			41				64,703				65,842
Total current assets							18,470,560				19,708,526
Non-current assets
Non-current financial assets, net			5,6,9,10,11,12,44				2,210,733				2,657,494
Non-current trade and other receivables, net			5,8,14,44,45,46				1,787,840				1,903,515
Property, plant and equipment, net			18,27,48				146,998,136				145,743,056
Investment properties, net			19,27				305,336				353,680
Goodwill			16				2,582				2,582
Intangible assets other than goodwill, net			21,27,45				1,123,132				980,821
Investments in associates			4,17				4,129,020				4,092,252
Investments in joint ventures			4,17				1,492,872				1,418,196
Deferred tax assets			40				790,712				795,131
Non-current non-financial assets			15				149,793				181,789
Total non-current assets							158,990,156				158,128,516
Total Assets			4			W	177,460,716				177,837,042

(Continued)

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Financial Position, Continued

As of March 31, 2017 and December 31, 2016

(Unaudited)

In millions of won		Note				March 31, 2017				December 31, 2016
Liabilities
Current liabilities
Trade and other payables, net			5,22,24,44,46			W	6,212,744				5,585,411
Current financial liabilities, net			5,11,23,44,46				9,452,454				8,942,329
Income tax payables			40				1,164,099				1,843,288
Current non-financial liabilities			20,28,29				6,508,300				6,368,210
Current provisions			26,44				2,364,607				1,999,988
Total current liabilities							25,702,204				24,739,226
Non-current liabilities
Non-current trade and other payables, net			5,22,24,44,46				3,538,469				3,558,175
Non-current financial liabilities, net			5,11,23,44,46				43,800,097				44,835,562
Non-current non-financial liabilities			28,29				7,749,913				7,591,605
Employee benefits liabilities, net			25,44				1,760,929				1,686,258
Deferred tax liabilities			40				9,083,351				8,948,520
Non-current provisions			26,44				13,395,699				13,427,151
Total non-current liabilities							79,328,458				80,047,271
Total Liabilities			4			W	105,030,662				104,786,497
Equity
Contributed capital			1,30,44
Share capital						W	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							34,833,844				31,847,275
Unappropriated retained earnings							16,330,858				19,721,686
							52,769,612				53,173,871
Other components of equity			33
Other capital surplus							1,235,146				1,235,146
Accumulated other comprehensive loss							(234,952	)			(33,875	)
Other equity							13,294,973				13,294,973
							14,295,167				14,496,244
Equity attributable to owners of the controlling company							71,118,357				71,723,693
Non-controlling interests			16,32				1,311,697				1,326,852
Total Equity						W	72,430,054				73,050,545
Total Liabilities and Equity						W	177,460,716				177,837,042

See accompanying notes to the consolidated interim financial statements.

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Consolidated Interim Statements of Comprehensive Income

For the three-month periods ended March 31, 2017 and 2016

(Unaudited)

In millions of won, except per share information		Note				March 31, 2017				March 31, 2016
Sales			4,34,44,46
Sales of goods						W	14,299,466				14,501,934
Sales of services							71,905				103,630
Sales of construction services			20				659,092				981,845
Revenue related to transfer of assets from customers							116,146				97,918
							15,146,609				15,685,327
Cost of sales			13,25,42,46
Cost of sales of goods							(12,371,525	)			(10,517,018	)
Cost of sales of services							(96,278	)			(93,234	)
Cost of sales of construction services							(662,638	)			(960,871	)
							(13,130,441	)			(11,571,123	)
Gross profit							2,016,168				4,114,204
Selling and administrative expenses			25,35,42,46				(552,982	)			(508,857	)
Operating profit			4				1,463,186				3,605,347
Other non-operating income			36				85,416				92,302
Other non-operating expense			36				(36,434	)			(20,702	)
Other gains, net			37				129,012				39,903
Finance income			5,11,38				897,286				352,422
Finance expenses			5,11,39				(1,309,456	)			(719,635	)
Profit related to associates, joint ventures and subsidiaries			4,17
Share in profit of associates and joint ventures							176,995				185,781
Gain on disposal of investments in associates and joint ventures							68				—
Share in loss of associates and joint ventures							(16,513	)			(26,860	)
							160,550				158,921
Profit before income tax							1,389,560				3,508,558
Income tax expense			40				(489,529	)			(1,345,725	)
Profit for the period						W	900,031				2,162,833

(Continued)

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Consolidated Interim Statements of Comprehensive Income, Continued

For the three and nine-month periods ended March 31, 2017 and 2016

(Unaudited)

In millions of won, except per share information		Note				March 31, 2017				March 31, 2016
Other comprehensive income (loss)			5,11,25,31,33
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit liability, net of tax			25,31			W	3,917				(100,571	)
Share in other comprehensive loss of associates and joint ventures, net of tax			31				(1,891	)			(184	)
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			33				(1,174	)			27,170
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			5,11,33				(5,937	)			(12,804	)
Foreign currency translation of foreign operations, net of tax			33				(115,141	)			3,343
Share in other comprehensive income (loss) of associates and joint ventures, net of tax			33				(103,283	)			4,589
Other comprehensive loss, net of tax							(223,509	)			(78,457	)
Total comprehensive income for the period						W	676,522				2,084,376
Profit or loss attributable to:
Owners of the controlling company			43			W	866,913				2,135,450
Non-controlling interests							33,118				27,383
						W	900,031				2,162,833
Total comprehensive income attributable to:
Owners of the controlling company						W	665,753				2,068,034
Non-controlling interests							10,769				16,342
						W	676,522				2,084,376
Earnings per share			43
Basic and diluted earnings per share						W	1,350				3,326

See accompanying notes to the consolidated interim financial statements.

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Consolidated Interim Statements of Changes in Equity

For the three-month periods ended March 31, 2017 and 2016

(Unaudited)

In millions of won		Equity attributable to owners of the Company																Non- controlling interests				Total equity
		Contributed capital				Retained earnings				Other components of equity				Subtotal
Balance at January 1, 2016		W	4,053,578				48,187,241				14,393,648				66,634,467				1,308,008				67,942,475
Total comprehensive income (loss) for the period
Profit for the period			—				2,135,450				—				2,135,450				27,383				2,162,833
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit liability, net of tax			—				(94,930	)			—				(94,930	)			(5,641	)			(100,571	)
Share in other comprehensive loss of associates and joint ventures, net of tax			—				(176	)			—				(176	)			(8	)			(184	)
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			—				—				27,172				27,172				(2	)			27,170
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—				—				(12,796	)			(12,796	)			(8	)			(12,804	)
Foreign currency translation of foreign operations, net of tax			—				—				8,729				8,729				(5,386	)			3,343
Share in other comprehensive income of associates and joint ventures, net of tax			—				—				4,585				4,585				4				4,589
Transactions with owners of the Company, recognized directly in equity
Dividends paid			—				(1,990,089	)			—				(1,990,089	)			(56,901	)			(2,046,990	)
Equity transaction within consolidation scope – other than issuance of share capital			—				—				(41	)			(41	)			2				(39	)
Changes in consolidation scope			—				—				—				—				2,453				2,453
Dividends paid (hybrid securities)			—				—				—				—				(4,114	)			(4,114	)
Balance at March 31, 2016		W	4,053,578				48,237,496				14,421,297				66,712,371				1,265,790				67,978,161

(Continued)

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Consolidated Interim Statements of Changes in Equity, Continued

For the three-month periods ended March 31, 2017 and 2016

(Unaudited)

In millions of won		Equity attributable to owners of the controlling company																Non- controlling interests				Total equity
		Contributed capital				Retained earnings				Other components of equity				Subtotal
Balance at January 1, 2017		W	4,053,578				53,173,871				14,496,244				71,723,693				1,326,852				73,050,545
Total comprehensive income (loss) for the period
Profit for the period			—				866,913				—				866,913				33,118				900,031
Items that will not be reclassified subsequently to profit or loss:
Remeasurements of defined benefit liability, net of tax			—				1,812				—				1,812				2,105				3,917
Share in other comprehensive income (loss) of associates and joint ventures, net of tax			—				(1,895	)			—				(1,895	)			4				(1,891	)
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			—				—				(1,172	)			(1,172	)			(2	)			(1,174	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—				—				(5,937	)			(5,937	)			—				(5,937	)
Foreign currency translation of foreign operations, net of tax			—				—				(90,391	)			(90,391	)			(24,750	)			(115,141	)
Share in other comprehensive income (loss) of associates and joint ventures, net of tax			—				—				(103,577	)			(103,577	)			294				(103,283	)
Transactions with owners of the Company, recognized directly in equity
Dividends paid			—				(1,271,089	)			—				(1,271,089	)			(21,864	)			(1,292,953	)
Issuance of shares of capital by subsidiaries and others			—				—				—				—				(1	)			(1	)
Dividends paid (hybrid securities)			—				—				—				—				(4,059	)			(4,059	)
Balance at March 31, 2017		W	4,053,578				52,769,612				14,295,167				71,118,357				1,311,697				72,430,054

See accompanying notes to the consolidated interim financial statements.

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Consolidated Interim Statements of Cash Flows, Continued

For the three-month periods ended March 31, 2017 and 2016

(Unaudited)

In millions of won		March 31, 2017				March 31, 2016
Cash flows from operating activities
Profit for the period		W	900,031				2,162,833
Adjustments for:
Income tax expense			489,529				1,345,725
Depreciation			2,369,838				2,142,242
Amortization			34,023				20,096
Employee benefit expense			90,580				84,611
Bad debt expense			7,955				7,996
Interest expense			440,954				458,235
Loss on sale of financial assets			1,038				—
Loss on disposal of property, plant and equipment			3,675				200
Loss on abandonment of property, plant, and equipment			94,305				93,761
Loss on disposal of intangible assets			—				134
Increase to provisions			510,013				581,749
Gain on foreign currency translation, net			(700,819	)			(147,479	)
Valuation and transaction gain on derivative instruments, net			743,089				124,316
Share in income of associates and joint ventures, net			(160,482	)			(158,921	)
Gain on sale of financial assets			(494	)			(1,480	)
Gain on disposal of property, plant and equipment			(11,029	)			(18,598	)
Gain on disposal of intangible assets			(463	)			—
Gain on disposal of investments in associates and joint ventures			(68	)			—
Interest income			(54,457	)			(80,319	)
Dividend income			(9,677	)			(9,367	)
Others, net			6,610				1,738
			3,854,120				4,444,639
Changes in:
Trade receivables			1,112,414				730,105
Non-trade receivables			41,927				(5,787	)
Accrued income			(50,930	)			(62,069	)
Other receivables			3,729				2,236
Other current assets			(120,754	)			(63,531	)
Inventories			(302,233	)			(253,353	)
Other non-current assets			(13,048	)			(45,767	)
Trade payables			(516,617	)			(222,929	)
Non-trade payables			(164,995	)			(130,411	)
Accrued expenses			(61,172	)			23,138
Other current liabilities			148,256				680,661
Other non-current liabilities			227,729				126,253
Investments in associates and joint ventures			13,260				17,385
Provisions			(248,582	)			(197,898	)
Payments of employee benefit obligations			(23,265	)			(14,573	)
Plan assets			—				(176	)
			45,719				583,284

(Continued)

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Consolidated Interim Statements of Cash Flows, Continued

For the three-month periods ended March 31, 2017 and 2016

(Unaudited)

In millions of won		March 31, 2017				March 31, 2016
Cash generated from operating activities		W	4,799,870				7,190,756
Dividends received			1,323				8,806
Interest paid			(470,114	)			(508,430	)
Interest received			44,329				49,748
Income taxes paid			(989,289	)			(1,015,948	)
Net cash from operating activities			3,386,119				5,724,932
Cash flows from investing activities
Proceeds from disposals of associates and joint ventures			681				10,174
Acquisition of associates and joint ventures			(116,618	)			(38,031	)
Proceeds from disposals of property, plant and equipment			37,155				20,502
Acquisition of property, plant and equipment			(3,569,106	)			(3,599,135	)
Proceeds from disposals of intangible assets			2,689				142
Acquisition of intangible assets			(16,375	)			(15,612	)
Proceeds from disposals of financial assets			1,713,211				2,337,693
Acquisition of financial assets			(1,384,357	)			(1,049,866	)
Increase in loans			(190,519	)			(51,997	)
Collection of loans			25,931				38,847
Increase in deposits			(80,028	)			(139,472	)
Decrease in deposits			28,107				52,519
Receipt of government grants			24,640				9,559
Usage of government grants			(19,785	)			(10,215	)
Other cash inflow from investing activities, net			19,207				10,833
Net cash used in investing activities			(3,525,167	)			(2,424,059	)
Cash flows from financing activities
Proceeds from (repayment of) short-term borrowings, net			1,642,339				(480,293	)
Proceeds from long-term borrowings and debt securities			1,860,683				791,808
Repayment of long-term borrowings and debt securities			(3,166,110	)			(1,955,712	)
Payment of finance lease liabilities			(31,039	)			(30,051	)
Settlement of derivative instruments, net			18,898				42,952
Change in non-controlling interest			6				2,445
Dividends paid (hybrid bond)			(4,059	)			(4,114	)
Dividends paid			(5,116	)			(56,902	)
Net cash from (used in) financing activities			315,602				(1,689,867	)
Net increase in cash and cash equivalents before effect of exchange rate fluctuations			176,554				1,611,006
Effect of exchange rate fluctuations on cash held			(40,267	)			24,405
Net increase in cash and cash equivalents			136,287				1,635,411
Cash and cash equivalents at January 1			3,051,353				3,783,065
Cash and cash equivalents at March 31		W	3,187,640				5,418,476

See accompanying notes to the consolidated interim financial statements.

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Notes to the Consolidated Interim Financial Statements

March 31, 2017

(Unaudited)

1. Reporting Entity (Description of the controlling company)

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

As of March 31, 2017, KEPCO’s share capital amounts to W3,209,820 million and KEPCO’s shareholders are as follows:

		Number of shares				Percentage of ownership
Government of the Republic of Korea			116,841,794				18.20	%
Korea Development Bank			211,235,264				32.90	%
Other (*)			313,887,019				48.90	%
			641,964,077				100.00	%

(*) The number of shares held by foreign shareholders are 197,308,414 shares (30.74%) as of the most recent closing date of Register of Shareholders (December 31, 2016).

In accordance with the Restructuring Plan enacted on January 21, 1999 by the Ministry of Trade, Industry and Energy, KEPCO spun off its power generation divisions on April 2, 2001, resulting in the establishment of six power generation subsidiaries.

2. Basis of Preparation

(1) Statement of compliance

These consolidated interim financial statements have been prepared in accordance with K-IFRS 1034, ‘Interim Financial Reporting’ as part of the period covered by KEPCO and subsidiaries’ (the “Company”) K-IFRS annual financial statements.

(2) Basis of measurement

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

• 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 currency and the currency of the primary economic environment in which the Company operates.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

2. Basis of Preparation, Continued

(4) Use of estimates and judgments

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

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

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

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

The Company records the fair value of estimated decommissioning costs as a liability in the period in which the Company incurs a legal obligation associated with the retirement of long-lived assets that result from acquisition, construction, development and/or normal use of the assets. The Company is required to record a liability for the dismantling (demolition) of nuclear power plants and disposal of spent fuel and low and intermediate radioactive wastes.

(ii) Deferred tax

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

(iii) Valuations of financial instruments at fair values

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

The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of K-IFRS including the level in the fair value hierarchy in which such valuation techniques should be classified.

When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.

If the inputs used to measure the fair value of an asset or a liability might be categorized in different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.

(iv) Defined employee benefit liabilities

The Company offers its employees defined benefit plans. The cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at the end of each reporting period. For actuarial valuations, certain inputs such as discount rates and future salary increases are estimated. Defined benefit plans contain significant uncertainties in estimations due to its long-term nature (refer to note 25).

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

2. Basis of Preparation, Continued

(4) Use of estimates and judgments, continued

(v) Unbilled revenue

Energy delivered but not metered nor billed are calculated at the reporting date are estimated based on consumption statistics and selling price estimates. Determination of the unbilled revenues at the end of the reporting period is sensitive to the estimated consumptions and prices based on statistics. Unbilled revenue recognized as of March 31, 2017 and 2016 are W1,347,431 million and W1,336,987 million, respectively.

(vi) Construction contracts

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 utilizing the cost-based input method at the end of the reporting period. In applying the cost-based input method, it is necessary to use estimates and assumptions related to the total estimated costs expected to be incurred in the future, costs incurred which are not related to construction progress, changes in costs due to change of contract or design, etc. Total contract revenue is measured based on an agreed contract price; however, it may fluctuate due to the variation of construction work. The measurement of contract revenue is affected by various uncertainties resulting from unexpected future events.

(vii) Continuing operation of Wolsong Unit 1 nuclear power plant

Wolsong unit 1 nuclear power plant of the Company commenced operations on November 21, 1982 and ended its operations on November 20, 2012 pursuant to its 30-year operating license. On February 27, 2015, the Nuclear Safety and Security Commission (NSSC) evaluated the safety of operation on the Wolsong Unit 1 nuclear power plant and approved to continue its operation until November 20, 2022. As described in note 49, the lawsuit related to the validity of the approval of NSSC is currently ongoing. The consolidated interim financial statements were prepared based on the judgment of the Company that the approval of NSSC is valid and Wolsong Unit 1 nuclear power plant will be operating until 2022.

(5) Changes in accounting policies

The significant accounting policies followed by the Company in the preparation of its consolidated interim financial statements are the same as those followed by the Company in its preparation of the consolidated financial statements as of and for the year ended December 31, 2016, except for the application of K-IFRS 1034, Interim Financial Reporting, and the amended accounting standards explained below:

(i) Amendments to K-IFRS 1007, ‘Statement of Cash Flows’

The Company has adopted the amendments to K-IFRS 1007, Statement of Cash Flows, since January 1, 2017. The amendments require changes in liabilities arising from financing activities to be disclosed. Information about changes in liabilities arising from financing activities is included in note 23 and note 24.

(ii) Amendments to K-IFRS 1012, ‘Income Taxes’

The Company has adopted the amendments to K-IFRS 1012, Income Taxes, since January 1, 2017. The amendments clarify that unrealized losses on fixed-rate debt instruments measured at fair value and measured at cost for tax purposes give rise to a deductible temporary difference regardless of whether the holder expects to recover the carrying amount of the debt instrument by sale or by use and that the estimate of probable future taxable profit may include the recovery of some of assets for more than their carrying amount. When the Company assesses whether there will be sufficient taxable profit, the Company should compare the deductible temporary differences with future taxable profit that excludes tax deductions resulting from the reversal of those deductible temporary differences.

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

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

2. Basis of Preparation, Continued

(6) New standards and amendments not yet adopted

The following new standards, interpretations and amendments to existing standards have been published for mandatory application for annual periods beginning after January 1, 2017.

(i) K-IFRS 1109, ‘Financial Instruments’

K-IFRS 1109, published on September 25, 2015, is effective for annual periods beginning on or after January 1, 2018, with earlier adoption permitted. It replaces existing guidance in K-IFRS 1039, ‘Financial Instruments: Recognition and Measurement’. The Company plans to adopt K-IFRS 1109 for the year beginning on January 1, 2018. K-IFRS 1109 will generally be applied retrospectively; however the Company plans to take advantage of the exemption allowing it not to restate the comparative information for prior periods with respect to classification and measurement including impairment changes. New hedge accounting requirements will generally be applied prospectively except for certain exemptions including the accounting for the time value of options.

Key features of the new standard, K-IFRS 1109, are 1) classification and measurement of financial assets that reflects the business model in which the assets are managed and their cash flow characteristics, 2) impairment methodology that reflects ‘expected credit loss’ (ECL) model for financial assets, and 3) expanded scope of hedged items and hedging instruments which qualify for hedge accounting and changes in assessment method for effect of hedging relationships.

K-IFRS 1109 will require the Company to assess the financial impact from application of K-IFRS 1109 and revise its accounting processes and internal controls related to financial instruments. Actual impact of adopting K-IFRS 1109 will be dependent on the financial instruments the Company holds and economic conditions at that time as well as accounting policy elections and judgment that it will make in the future.

The Company has not initiated any changes in internal controls processes or accounting processing systems, and has not performed an assessment of the impact resulting from the application of K-IFRS 1109. The Company is currently performing a detailed assessment of the potential impact from the application of K-IFRS 1109 and plans to complete the assessment in advance of its effective date. Expected impacts on the consolidated financial statements are generally categorized as follows:

① Classification and measurement of financial assets

Under K-IFRS 1109, financial assets are classified into three principal categories; measured at amortized cost, fair value through other comprehensive income (FVOCI) and fair value through profit or loss (FVTPL) based on the business model in which assets are managed and their cash flow characteristics. Under K-IFRS 1109, derivatives embedded in hybrid contracts where the host is a financial asset are not bifurcated. Instead, the hybrid financial instrument as a whole is assessed for classification.

As there are additional requirements for a financial asset to be classified as measured at amortized costs or FVOCI under K-IFRS 1109 compared to the existing guidance in K-IFRS 1039, the adoption of K-IFRS 1109 would potentially increase the proportion of financial assets that are measured at FVTPL, increasing volatility in the Company’s profit or loss.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

2. Basis of Preparation, Continued

(6) New standards and amendments not yet adopted, continued

The criteria for classification and measurement of financial assets under K-IFRS 1109 are as follows:

• A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as at FVTPL: 1) the asset is held within a business model whose objective is to hold assets to collect contractual cash flows; and 2) the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

• A financial asset is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL: 1) the asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and 2) the contractual terms of the financial asset give rise on specified dates to cash flow that are solely payments of principal and interest on the principal amount outstanding.

• On initial recognition of equity investment that is not held for trading, the Company may irrevocably elect to present subsequent changes in fair value in OCI, and will not reclassify(recycle) the those items in OCI to profit or loss subsequently.

• A financial asset is measured at FVTPL if the contractual terms of the financial asset give rise to specified dates to cash flows that are not solely payments of principal and interest on the principal amount outstanding, the debt instrument is held within a business model whose objective is to sell the asset, or the equity instruments that are not elected to be designated as measured at FVOCI.

As of March 31, 2017, the Company has loans and receivables amounting to W14,982,333 million, held-to-maturity investments amounting to W3,126 million, available-for-sale financial assets amounting to W908,374 million, and financial assets at fair value through profit or loss amounting to W99,317 million.

② Classification and measurement of financial liabilities

Under K-IFRS 1109, the amount of change in the fair value attributable to the changes in the credit risk of the financial liabilities is presented in OCI, not recognized in profit or loss, and the OCI amount will not be reclassified (recycled) to profit or loss. However, if doing so creates or increase an accounting mismatch, the amount of change in the fair value is recognized in profit or loss.

As a portion of fair value change which was recognized in profit or loss under the existing standard, K-IFRS 1039, will be presented in OCI under K-IFRS 1109, profit or loss related to valuation of the same financial liabilities is likely to decrease.

The Company does not have any financial liability designated as at FVTPL as of March 31, 2017.

③ Impairment: Financial assets and contract assets

K-IFRS 1109 replaces the ‘incurred loss’ model in the existing standard with a forward-looking ‘expected credit loss’ (ECL) model for debt instruments, lease receivables, contractual assets, loan commitments, financial guarantee contracts.

Under K-IFRS 1109, impairment losses are likely to be recognized earlier than using the incurred loss model under the existing guidance in K-IFRS 1039 as loss allowances will be measured on either of the 12-month or lifetime ECL based on the extent of increase in credit risk since inception as shown in the below table.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

2. Basis of Preparation, Continued

(6) New standards and amendments not yet adopted, continued

Classification				Loss allowances
Stage 1		Credit risk has not increased significantly since the initial recognition		12-month ECL: ECLs that resulted from possible default events within the 12 months after the reporting date
Stage 2		Credit risk has increase significantly since the initial recognition		Lifetime ECL: ECL that resulted from all possible default events over the expected life of a financial instrument
Stage 3		Credit-impaired

Under K-IFRS 1109, financial assets of which the credit was impaired at the initial recognition, cumulative changes in lifetime ECL since the initial recognition are recognized as loss allowances.

As of March 31, 2017, the Company has debt instruments in financial assets measured at amortized cost amounting to W15,145,249 million (loans and receivables) and has recognized loss allowances of W162,916 million.

④ Hedge accounting

K-IFRS 1109 retains the mechanics of hedge accounting (fair value hedge, cash flow hedge, hedging on net investment in a foreign operation) which was defined in the existing guidance in K-IFRS 1109, but provides principle-based and less complex guidance in hedging which focuses on the risk management activities. More hedged items and hedging instruments would qualify for hedge accounting, more qualitative and forward-looking approach will be taken to assessing hedge effectiveness, and qualitative threshold (80~125%) is removed under K-IFRS 1109.

Certain transactions which were not qualified for hedge accounting under the existing standard will likely quality for hedge accounting under K-IFRS 1109, decreasing volatility in the Company’s profits or loss.

As of March 31, 2017, the Company has asset and liabilities designated as hedged items amounting to W51,679 million and W197,693 million, respectively.

When initially applying K-IFRS 1109, the Company may choose as its accounting policy to continue to apply the hedge accounting requirements of K-IFRS 1039.

(ii) K-IFRS 1115, ‘Revenue from Contracts with Customers’

K-IFRS 1115, ‘Revenue from Contracts from Customers’, published on November 6, 2015, is effective for annual periods beginning on or after January 1, 2018, with earlier adoption permitted.

It replaces existing revenue recognition guidance, including K-IFRS 1018, ‘Revenue’, K-IFRS 1011, ‘Construction Contracts’, K-IFRS 2031, ‘Revenue-Barter transactions involving advertising services’, K-IFRS, ‘2113 Customer Loyalty Programs’, K-IFRS 2115, ‘Agreements for the construction of real estate’, K-IFRS 2118, ‘Transfers of assets from customers’.

Existing K-IFRS standards and interpretations including K-IFRS 1018 provide revenue recognition guidance by transaction types such as sales of goods, rendering of services, interest income, royalty income, dividend income and construction revenue; however, under the new standard, K-IFRS 1115, the five-step approach (Step 1: Identify the contract(s) with a customer, Step 2: Identify the performance obligations in the contract, Step 3: Determine the transaction price, Step 4: Allocate the transaction price to the performance obligations in the contract, Step 5: Recognize revenue when the entity satisfied a performance obligation) is applied for all types of contracts or agreements.

The Company is currently performing a detailed assessment of the impact resulting from the application of K-IFRS 1115 and plans to complete the assessment in advance of its effective date.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

2. Basis of Preparation, Continued

(6) New standards and amendments not yet adopted, continued

(iii) Amendments to K-IFRS 1102, ‘Share-based Payment’

The amendments include: 1) when measuring the fair value of share-based payment, the effects of vesting and non-vesting conditions on the measurement of cash-settled share-based payment should be consistent with the measurement of equity-settled share-based payment, 2) Share-based payment transaction in which the company settles the share-based payment arrangement net by withholding a specified portion of the equity instruments per statutory tax withholding requirements would be classified as equity-settled in its entirety, if otherwise would be classified as equity-settled without the net settlement feature, and 3) when a cash-settled share-based payment changes to an equity-settled share-based payment because of modifications of the terms and conditions, the original liability recognized is derecognized and the equity-settled share-based payment is recognized at the modification date fair value. Any difference between the carrying amount of the liability at the modification date and the amount recognized in equity at the same date would be recognized in profit and loss immediately. The amendments are effective for annual periods beginning on or after January 1, 2018.

The adoption of the amendments is not expected to have a significant impact on the Company’s consolidated financial statements.

3. Significant Accounting Policies

The significant accounting policies applied by the Company in preparation of its consolidated financial statements are included below. Except as described in note 2.(5), the accounting policies applied by the Company in these consolidated financial statements are the same as those applied by the Company in its consolidated financial statements as of and for the year ended December 31, 2016.

(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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(1) Basis of consolidation, continued

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 K-IFRS 1039, ‘Financial Instruments: Recognition and Measurement’ or, when applicable, the cost on initial recognition of an investment in an associate or a jointly controlled entity.

(2) Business combinations

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

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

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

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

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

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

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

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(2) Business combinations, continued

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

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

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

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

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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(3) Investments in associates

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

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

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

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

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

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

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

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(4) Joint arrangements

A joint arrangement is an arrangement of which two or more parties have joint control. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require the unanimous consent of the parties sharing control. Joint arrangements are classified into two types—joint operations and joint ventures. A joint operation is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint operators) have rights to the assets, and obligations for the liabilities, relating to the arrangement. A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint 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 K-IFRSs applicable to the particular assets, liabilities, revenues and expenses. If the joint arrangement is a joint venture, the Company is to account for that investment using the equity method accounting in accordance with K-IFRS 1028, ‘Investment in Associates and Joint Ventures’ (refer to note 3.(3)), except when the Company is applicable to the K-IFRS 1105, ‘Non-current Assets Held for Sale’.

(5) Non-current assets held for sale

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

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

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

(6) Goodwill

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

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(7) Revenue recognition

Revenue from the sale of goods, rendering of services or use of the Company assets is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates, 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 utility 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 recognize revenue from 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, etc. The differences between the current month’s estimated amount and actual (meter-read) amount, is adjusted for (trued-up) during the subsequent month.

(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.

(v) Deferral of revenue – Transfer of Assets from Customers

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

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(8) Construction services revenue

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

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

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

When contract costs incurred to date plus recognized income less recognized losses exceed progress billings, the surplus is presented 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 presented 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 advance received. Amounts billed for work performed but not yet paid by the customer are included in the consolidated statements of financial position as accounts and other receivables.

(9) Leases

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

(i) The Company as lessor

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

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

(ii) The Company as lessee

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

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

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

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(9) Leases, continued

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

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

(iii) Determining whether an arrangement contains a lease

At inception of an arrangement, the Company determines whether the arrangement is or contains a lease.

At inception or on reassessment of an arrangement that contains a lease, the Company separates payments and other consideration required by the arrangement into those for the lease and those for other elements on the basis of their relative fair values. If the Company concludes for a finance lease that it is impracticable to separate the payments reliably, then an asset and a liability are recognized at an amount equal to the fair value of the underlying asset.

(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 (refer to note 3.(25) Derivative financial instruments, including hedge accounting); and

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

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

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

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(11) Borrowing costs

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

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

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

(12) Government grants

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

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

(i) If the Company received grants related to assets

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

(ii) If the Company received grants related to income

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

(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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(14) Income taxes

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

(i) Current tax

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

(ii) Deferred tax

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

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

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

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

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

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

(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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(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		2 ~ 32
Vehicles		3 ~ 8
Loaded heavy water		30
Asset retirement costs		18, 30, 40, 60
Finance lease assets		6 ~ 32
Ships		9
Others		4 ~ 15

A component that is significant compared to the total cost of property, plant and equipment is depreciated over its separate useful life.

Depreciation methods, residual values and useful lives of property, plant and equipment are reviewed at the end of each reporting period and if change is deemed appropriate, it is treated as a change in accounting estimate. As a result of such annual review, useful lives of certain machinery were changed during 2016. Depreciation expenses increased by W160,985 million for the year ended December 31, 2016. Depreciation expenses are expected to increase by W130,514 million and W91,197 million for the years ending December 31, 2017 and 2018, respectively, and to decrease by W382,696 million for the years after December 31, 2018.

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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(16) Investment property

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

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

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

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

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

(17) Intangible assets

(i) Intangible assets acquired separately

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

(ii) Research and development

Expenditure on research activities is recognized as an expense in the period in which it is incurred. An internally-generated intangible asset arising from development (or from the development phase of an internal project) is recognized if, and only if, all of the following have been demonstrated:

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

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

• The ability to use or sell the intangible asset;

• How the intangible asset will generate probable future economic benefits;

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

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

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

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

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(17) Intangible assets, continued

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

		Useful lives (years)		Amortization methods
Usage rights for donated assets		10 ~ 20		Straight line
Software		4, 5		Straight line
Industrial rights		5 ~ 10		Straight line
Development expenses		5		Straight line
Leasehold rights		10		Straight line
Others		3 ~ 50 or Indefinite		Straight line
Mining right		-		Unit of production

(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 are 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.

(18) Greenhouse gas emissions rights (allowances) and obligations

In connection with Enforcement of Allocation and Trading of Greenhouse Gas Emissions Allowances, the Company applies the following accounting policies for greenhouse gas emissions rights and obligations.

(i) Greenhouse gas 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 greenhouse gas emissions rights includes expenditures arising directly from the acquisition and any other costs incurred during normal course of the acquisition.

Greenhouse gas 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 greenhouse gas emissions rights are classified as current assets. Greenhouse gas emissions rights recorded as intangible assets are initially measured at cost and substantially remeasured at cost less accumulated impairment losses.

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

(ii) Greenhouse gas emissions obligations

Greenhouse gas emissions obligations are the Company’s present legal obligation to submit the greenhouse gas 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. Greenhouse gas 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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(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 profit 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, to the extent 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 profit 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 for inventories in transit are measured by using specific identification method. 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.

(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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(21) Provisions, continued

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.

(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 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) Provisions for transmission and transformation facilities-neighboring areas support program

The Company has present obligation to conduct transmission and transformation facilities-neighboring areas support program under Act on assistance to transmission and transformation facilities-neighboring areas. The Company recognizes the provision of estimated amount to fulfill the obligation.

(viii) Renewable Portfolio Standard (“RPS”) provisions

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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(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.

A financial asset is classified as held for trading if:

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

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

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

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

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

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

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

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(22) Non-derivative financial assets, continued

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.

(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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(22) Non-derivative financial assets, continued

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 profit 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 profit or loss are not reversed through profit 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 profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

(vii) De-recognition of financial assets

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

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

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(22) Non-derivative financial assets, continued

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.

(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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

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

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

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

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

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

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

(v) Other financial liabilities

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

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

(vi) Financial guarantee contract liabilities

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

(vii) De-recognition of financial liabilities

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

(24) Service Concession Arrangements

The Company recognizes revenues from construction services and operating services related to service concession arrangements in accordance with K-IFRS 1011, ’Construction Contracts’ and K-IFRS 1018, ‘Revenue’, respectively. If the Company performs more than one service under a single contract or arrangement, consideration received or receivable is allocated by reference to the relative fair values of the services delivered, when the amounts are separately identifiable.

The Company recognizes a financial asset to the extent that it has an unconditional contractual right to receive cash or another financial asset for the construction services and an intangible asset to the extent that it receives a right (license) to charge users of the public service. Borrowing costs attributable to the arrangement are recognized as an expense in the period in which they are incurred unless the Company has a contractual right to receive an intangible asset (a right to charge users of the public service). In this case, borrowing costs attributable to the arrangement are capitalized during the construction phase of the arrangement.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(25) 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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

3. Significant Accounting Policies, Continued

(25) Derivative financial instruments, including hedge accounting, continued

(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. 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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

4. Segment, Geographic and Other Information

(1) Segment determination and explanation of the measurements

The Company’s operating segments are its business components that 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 K-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.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

4. Segment, Geographic and Other Information, Continued

(2) Financial information of the segments for the three-month periods ended March 31, 2017 and 2016, respectively, are as follows:

In millions of won
March 31, 2017
Segment		Total segment revenue				Intersegment revenue				Revenue from external customers				Operating profit (loss)				Depreciation and amortization				Interest income				Interest expense				Profit (loss) related associates and joint ventures
Transmission and distribution		W	15,193,328				497,725				14,695,603				(783,980	)			842,622				11,561				188,846				152,071
Electric power generation (Nuclear)			2,668,468				2,658,386				10,082				738,402				852,147				3,908				121,876				(246	)
Electric power generation (Non-nuclear)			6,789,103				6,559,467				229,636				1,521,498				688,657				3,581				110,766				9,292
Plant maintenance & engineering service			533,405				437,985				95,420				45,326				27,181				2,761				781				(567	)
Others			135,240				19,372				115,868				19,919				6,519				38,707				22,606				—
Consolidation adjustments			(10,172,935	)			(10,172,935	)			—				(77,979	)			(13,265	)			(6,061	)			(3,921	)			—
		W	15,146,609				—				15,146,609				1,463,186				2,403,861				54,457				440,954				160,550

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

4. Segment, Geographic and Other Information, Continued

(2) Financial information of the segments for the three-month periods ended March 31, 2017 and 2016, respectively, are as follows, continued:

In millions of won
March 31, 2016
Segment		Total segment revenue				Intersegment revenue				Revenue from external customers				Operating profit (loss)				Depreciation and amortization				Interest income				Interest expense				Profit (loss) related associates and joint ventures
Transmission and distribution		W	15,566,139				279,426				15,286,713				288,823				749,643				32,694				237,527				146,111
Electric power generation (Nuclear)			3,309,676				3,304,900				4,776				1,683,326				787,288				8,198				118,521				(180	)
Electric power generation (Non-nuclear)			6,235,483				6,033,611				201,872				1,690,980				602,809				8,468				83,916				13,735
Plant maintenance & engineering service			561,254				482,035				79,219				57,902				24,682				3,373				490				(745	)
Others			138,202				25,455				112,747				23,501				8,148				33,515				23,763				—
Consolidation adjustments			(10,125,427	)			(10,125,427	)			—				(139,185	)			(10,232	)			(5,929	)			(5,982	)			—
		W	15,685,327				—				15,685,327				3,605,347				2,162,338				80,319				458,235				158,921

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

4. Segment, Geographic and Other Information, Continued

(3) Information related to segment assets and segment liabilities as of and for the three-month period ended March 31, 2017 and as of and for the year ended December 31, 2016 are as follows:

In millions of won
March 31, 2017
Segment		Segment assets				Investments in associates and joint ventures				Acquisition of non- current assets				Segment liabilities
Transmission and distribution		W	105,598,881				4,160,568				2,259,522				51,089,250
Electric power generation (Nuclear)			52,449,647				17,132				427,497				27,009,579
Electric power generation (Non-nuclear)			47,482,348				1,390,954				648,507				25,520,802
Plant maintenance & engineering service			3,106,750				53,238				15,216				1,222,913
Others			7,304,314				—				136,147				2,745,641
Consolidation adjustments			(38,481,224	)			—				98,592				(2,557,523	)
Consolidated totals		W	177,460,716				5,621,892				3,585,481				105,030,662

In millions of won
Decembr 31, 2016
Segment		Segment assets				Investments in associates and joint ventures				Acquisition of non- current assets				Segment liabilities
Transmission and distribution		W	105,321,129				4,121,462				6,345,004				49,854,420
Electric power generation (Nuclear)			52,782,915				15,384				1,945,610				27,366,938
Electric power generation (Non-nuclear)			47,427,642				1,320,203				3,508,313				26,205,049
Plant maintenance & engineering service			3,106,909				53,399				180,715				1,218,047
Others			7,423,132				—				365,470				2,761,262
Consolidation adjustments			(38,224,685	)			—				(191,901	)			(2,619,219	)
Consolidated totals		W	177,837,042				5,510,448				12,153,211				104,786,497

(4) Geographic information

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

In millions of won		Revenue from external customers								Non-current assets (*2)
Geographical unit		March 31, 2017				March 31, 2016				March 31, 2017				March 31, 2016
Domestic		W	14,375,352				14,581,263				149,886,479				148,297,677
Overseas (*1)			771,257				1,104,064				4,314,392				4,474,699
		W	15,146,609				15,685,327				154,200,871				152,772,376

(*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 three-month periods ended March 31, 2017 and 2016.

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

5. Classification of Financial Instruments

(1) Classification of financial assets as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Financial assets at fair value through profit or loss				Loans and receivables				Available- for-sale financial assets				Held-to- maturity investments				Derivative assets (using hedge accounting)				Total
Current assets
Cash and cash equivalents		W	—				3,187,640				—				—				—				3,187,640
Current financial assets
Held-to-maturity investments			—				—				—				64				—				64
Derivative assets			43,369				—				—				—				7,730				51,099
Other financial assets			—				2,160,214				—				—				—				2,160,214
Trade and other receivables			—				6,647,239				—				—				—				6,647,239
			43,369				11,995,093				—				64				7,730				12,046,256
Non-current assets
Non-current financial assets
Available-for-sale financial assets			—				—				908,374				—				—				908,374
Held-to-maturity investments			—				—				—				3,062				—				3,062
Derivative assets			55,948				—				—				—				43,949				99,897
Other financial assets			—				1,199,400				—				—				—				1,199,400
Trade and other receivables			—				1,787,840				—				—				—				1,787,840
			55,948				2,987,240				908,374				3,062				43,949				3,998,573
		W	99,317				14,982,333				908,374				3,126				51,679				16,044,829
In millions of won		December 31, 2016
		Financial assets at fair value through profit or loss				Loans and receivables				Available- for-sale financial assets				Held-to- maturity investments				Derivative assets (using hedge accounting)				Total
Current assets
Cash and cash equivalents		W	—				3,051,353				—				—				—				3,051,353
Current financial assets
Held-to-maturity investments			—				—				—				114				—				114
Derivative assets			79,709				—				—				—				113,574				193,283
Other financial assets			—				2,478,592				—				—				—				2,478,592
Trade and other receivables			—				7,788,876				—				—				—				7,788,876
			79,709				13,318,821				—				114				113,574				13,512,218
Non-current assets
Non-current financial assets
Available-for-sale financial assets			—				—				1,014,732				—				—				1,014,732
Held-to-maturity investments			—				—				—				3,130				—				3,130
Derivative assets			287,768				—				—				—				300,323				588,091
Other financial assets			—				1,051,541				—				—				—				1,051,541
Trade and other receivables			—				1,903,515				—				—				—				1,903,515
			287,768				2,955,056				1,014,732				3,130				300,323				4,561,009
		W	367,477				16,273,877				1,014,732				3,244				413,897				18,073,227

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

5. Classification of Financial Instruments, Continued

(2) Classification of financial liabilities as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Financial liabilities at fair value through profit or loss				Financial liabilities recognized at amortized cost				Derivative liabilities (applying hedge accounting)				Total
Current liabilities
Borrowings		W	—				2,737,313				—				2,737,313
Debt securities			—				6,671,980				—				6,671,980
Derivative liabilities			7,378				—				35,783				43,161
Trade and other payables			—				6,212,744				—				6,212,744
			7,378				15,622,037				35,783				15,665,198
Non-current liabilities
Borrowings			—				1,817,602				—				1,817,602
Debt securities			—				41,742,697				—				41,742,697
Derivative liabilities			77,888				—				161,910				239,798
Trade and other payables			—				3,538,469				—				3,538,469
			77,888				47,098,768				161,910				47,338,566
		W	85,266				62,720,805				197,693				63,003,764
In millions of won		December 31, 2016
		Financial liabilities at fair value through profit or loss				Financial liabilities recognized at amortized cost				Derivative liabilities (applying hedge accounting)				Total
Current liabilities
Borrowings		W	—				1,115,521				—				1,115,521
Debt securities			—				7,823,557				—				7,823,557
Derivative liabilities			3,251				—				—				3,251
Trade and other payables			—				5,585,411				—				5,585,411
			3,251				14,524,489				—				14,527,740
Non-current liabilities
Borrowings			—				1,773,891				—				1,773,891
Debt securities			—				42,926,236				—				42,926,236
Derivative liabilities			18,278				—				117,157				135,435
Trade and other payables			—				3,558,175				—				3,558,175
			18,278				48,258,302				117,157				48,393,737
		W	21,529				62,782,791				117,157				62,921,477

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KOREA ELECTRIC POWER CORPORATION AND SUBSIDIARIES

Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

5. Classification of Financial Instruments, Continued

(3) Classification of comprehensive income from financial instruments for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won				March 31, 2017				March 31, 2016
Cash and cash equivalents		Interest income		W	8,372				20,683
Available-for-sale financial assets		Dividends income			9,677				9,367
		Gain (loss) on disposal of available-for-sale financial assets			(544	)			1,480
Held-to-maturity investments		Interest income			29				25
Loans and receivables		Interest income			5,545				6,938
Trade and other receivables		Interest income			33,489				31,061
Short-term financial instruments		Interest income			6,234				19,051
Long-term financial instruments		Interest income			788				2,561
Financial assets at fair value through profit or loss		Loss on valuation of derivatives			(186,839	)			(47,667	)
		Loss on transaction of derivatives			(9,732	)			(1,832	)
Derivative assets (using hedge accounting)		Loss on valuation of derivatives (profit or loss)			(234,674	)			(46,054	)
		Loss on valuation of derivatives (equity, before tax) (*)			(11,139	)			(12,036	)
		Gain (loss) on transaction of derivatives			(19,230	)			2,802
Financial liabilities carried at amortized cost		Interest expense of borrowings and debt securities			(303,889	)			(321,009	)
		Interest expense of trade and other payables			(13,449	)			(16,403	)
		Interest expense of others			(123,616	)			(120,823	)
		Gain on foreign currency transactions and translations			744,334				116,237
Financial liabilities at fair value through profit or loss		Gain (loss) on valuation of derivatives			(138,031	)			7,082
		Gain (loss) on transaction of derivatives			(10,633	)			2,131
Derivative liabilities (using hedge accounting)		Loss on valuation of derivatives (profit or loss)			(143,931	)			(40,778	)
		Gain (loss) on valuation of derivatives (equity, before tax) (*)			806				(10,235	)
		Loss on transaction of derivatives			(19	)			—

(*) Items are included in other comprehensive income or loss. All other income and gain listed above are included in finance income, and all expense and losses listed above are included in finance expenses in the consolidated statements of comprehensive income.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

6. Restricted Deposits

Restricted deposits as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won				March 31, 2017				December 31, 2016
Cash and cash equivalents		Escrow accounts		W	98				91
		Deposits for government project			17,533				16,457
		Collateral provided for borrowings			96,754				80,327
		Collateral provided for lawsuit			173				241
		Deposits for transmission regional support program			6,167				2,137
Non-current available-for-sale financial asset		Decommissioning costs of nuclear power plants			342,879				437,015
Short-term financial instruments		Bidding guarantees			118				118
		Restriction on withdrawal related to ‘win-win growth program’ for small and medium enterprises			33,000				33,000
Other current receivables		Deposit for lawsuit			—				16,000
Long-term financial instruments		Guarantee deposits for checking account			2				2
		Guarantee deposits for banking accounts at oversea branches			316				342
		Decommissioning costs of nuclear power plants			310,445				214,121
		Funds for developing small and medium enterprises (*)			200,000				200,000
				W	1,007,485				999,851

(*) Deposits for small and medium enterprise at IBK for construction of Bitgaram Energy Valley and support for high potential businesses as of March 31, 2017.

7. Cash and Cash Equivalents

Cash and cash equivalents as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Cash		W	609				119
Other demand deposits			1,363,861				1,725,785
Short-term deposits classified as cash equivalents			665,698				120,594
Short-term investments classified as cash equivalents			1,157,472				1,204,855
		W	3,187,640				3,051,353

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

8. Trade and Other Receivables

(1) Trade and other receivables as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Gross amount				Allowance for doubtful accounts				Present value discount				Book value
Current assets
Trade receivables		W	6,109,958				(73,738	)			—				6,036,220
Other receivables			662,969				(49,811	)			(2,139	)			611,019
			6,772,927				(123,549	)			(2,139	)			6,647,239
Non-current assets
Trade receivables			463,431				—				—				463,431
Other receivables			1,365,301				(35,182	)			(5,710	)			1,324,409
			1,828,732				(35,182	)			(5,710	)			1,787,840
		W	8,601,659				(158,731	)			(7,849	)			8,435,079

In millions of won		December 31, 2016
		Gross amount				Allowance for doubtful accounts				Present value discount				Book value
Current assets
Trade receivables		W	7,260,227				(71,985	)			—				7,188,242
Other receivables			652,782				(50,071	)			(2,077	)			600,634
			7,913,009				(122,056	)			(2,077	)			7,788,876
Non-current assets
Trade receivables			491,509				—				—				491,509
Other receivables			1,455,860				(37,590	)			(6,264	)			1,412,006
			1,947,369				(37,590	)			(6,264	)			1,903,515
		W	9,860,378				(159,646	)			(8,341	)			9,692,391

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

8. Trade and Other Receivables, Continued

(2) Other receivables as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Gross amount				Allowance for doubtful accounts				Present value discount				Book value
Current assets
Non-trade receivables		W	373,607				(49,811	)			—				323,796
Accrued income			52,230				—				—				52,230
Deposits			219,968				—				(2,139	)			217,829
Finance lease receivables			8,777				—				—				8,777
Others			8,387				—				—				8,387
			662,969				(49,811	)			(2,139	)			611,019
Non-current assets
Non-trade receivables			77,940				(27,334	)			—				50,606
Accrued income			688				—				—				688
Deposits			308,362				—				(5,710	)			302,652
Finance lease receivables			885,090				—				—				885,090
Others			93,221				(7,848	)			—				85,373
			1,365,301				(35,182	)			(5,710	)			1,324,409
		W	2,028,270				(84,993	)			(7,849	)			1,935,428

In millions of won		December 31, 2016
		Gross amount				Allowance for doubtful accounts				Present value discount				Book value
Current assets
Non-trade receivables		W	360,021				(50,071	)			—				309,950
Accrued income			62,063				—				—				62,063
Deposits			193,720				—				(2,077	)			191,643
Finance lease receivables			12,225				—				—				12,225
Others			24,753				—				—				24,753
			652,782				(50,071	)			(2,077	)			600,634
Non-current assets
Non-trade receivables			80,393				(26,942	)			—				53,451
Accrued income			174				—				—				174
Deposits			320,935				—				(6,264	)			314,671
Finance lease receivables			960,649				—				—				960,649
Others			93,709				(10,648	)			—				83,061
			1,455,860				(37,590	)			(6,264	)			1,412,006
		W	2,108,642				(87,661	)			(8,341	)			2,012,640

(3) 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 1.5% 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.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

8. Trade and Other Receivables, Continued

(4) Aging analysis of trade receivables as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Trade receivables: (not overdue, not impaired)		W	6,429,763				7,592,363
Trade receivables: (overdue, not impaired)			366				820
Less than 60 days			366				820
Trade receivables: (impairment reviewed)			143,260				158,553
60 ~ 90 days			36,947				44,277
90 ~ 120 days			11,494				18,917
120 days ~ 1 year			38,602				42,534
Over 1 year			56,217				52,825
			6,573,389				7,751,736
Less: allowance for doubtful accounts			(73,738	)			(71,985	)
		W	6,499,651				7,679,751

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.

(5) Aging analysis of other receivables as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Other receivables: (not overdue, not impaired)		W	1,691,635				1,887,620
Other receivables: (overdue, not impaired)			93,320				46,887
Less than 60 days			93,320				46,887
Other receivables: (impairment reviewed)			243,315				174,135
60 ~ 90 days			44,879				7,352
90 ~ 120 days			7,988				2,160
120 days ~ 1year			24,597				17,613
Over 1 year			165,851				147,010
			2,028,270				2,108,642
Less: allowance for doubtful accounts			(84,993	)			(87,661	)
Less: present value discount			(7,849	)			(8,341	)
		W	1,935,428				2,012,640

(6) Changes in the allowance for doubtful accounts for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Trade receivables				Other receivables				Trade receivables				Other receivables
Beginning balance		W	71,985				87,661				51,956				91,746
Bad debt expense			4,150				3,988				38,719				233
Write-off			(1,715	)			(1,255	)			(18,939	)			(928	)
Reversal			(183	)			—				—				(5,489	)
Others			(499	)			(5,401	)			249				2,099
Ending balance		W	73,738				84,993				71,985				87,661

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets

(1) Changes in available-for-sale financial assets for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Beginning balance				Acquisition				Disposal				Valuation				Impairment				Others				Ending balance
Listed:
Korea District Heating Corp.		W	154,183				—				—				(2,717	)			—				—				151,466
Ssangyong Motor Co., Ltd.			304				—				—				3				—				—				307
Sungjee Construction. Co., Ltd.			21				—				—				(9	)			—				—				12
Korea Line Corp.			—				—				—				—				—				—				—
Namkwang Engineering & Construction Co., Ltd.			—				—				—				—				—				—				—
Pumyang Construction Co., Ltd.			—				—				—				—				—				—				—
ELCOMTEC Co., Ltd.			74				—				—				7				—				—				81
PAN ocean Co., Ltd.			7				—				—				2				—				—				9
Borneo International Furniture Co., Ltd.			103				—				—				—				—				—				103
Dongbu Corporation			12				—				—				—				—				—				12
PT Adaro Energy Tbk			73,061				—				—				(2,417	)			—				—				70,644
Energy Fuels Inc.			3,385				—				—				985				—				(258	)			4,112
Baralaba Coal Company Limited			42				—				—				7				—				—				49
Denison Mines Corp.			36,504				—				—				6,097				—				(2,606	)			39,995
Fission 3.0			16				—				—				5				—				(1	)			20
Fission Uranium Corp.			459				—				—				139				—				(35	)			563
			268,171				—				—				2,102				—				(2,900	)			267,373
Unlisted:
K&C - Gyeongnam youth job creation Investment Fund			1,207				—				—				—				—				—				1,207
Korea investment – Korea EXIM Bank CERs Private Special Asset Investment Trust I			571				—				—				—				—				—				571
Troika Overseas Resource Development Private Equity Firm			1,553				—				—				—				—				—				1,553
IBK-AUCTUS Green Growth Private Equity firm			41				—				—				—				—				—				41
Global Dynasty Overseas Resource Development Private Equity Firm			2,233				9				—				—				—				—				2,242
Intellectual Discovery, Ltd.			1,375				—				—				—				—				—				1,375
Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1 (*1)			4,389				—				(16	)			—				—				—				4,373
Construction Guarantee			819				—				—				(8	)			—				—				811
Plant & Mechanical Contractors Financial Cooperative of Korea			36				—				—				—				—				—				36
Fire Guarantee			20				—				—				—				—				—				20
Korea Software Financial Cooperative			3,301				—				—				—				—				—				3,301
Engineering Financial Cooperative			60				—				—				—				—				—				60
Electric Contractors Financial Cooperative			152				50				—				—				—				—				202
Korea Specialty Contractor Financial Cooperative			417				—				—				—				—				—				417
Information & Communication Financial Cooperative			10				—				—				—				—				—				10
Korea Electric Engineers Association			40				—				—				—				—				—				40
Korea investment – Investment Pool for Public funds 10 (*1)			141,315				—				(62,921	)			548				—				321				79,263
Samsung investment – Investment Pool for Public funds 2 (*1)			211,920				—				(134,117	)			766				—				717				79,286
Samsung investment – Investment Pool for Public funds 1			53,212				—				—				287				—				—				53,499
Korea investment – Hanwha KT Mater Lease Private Special Investment Trust (*1)			30,568				—				—				236				—				—				30,804

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(1) Changes in available-for-sale financial assets for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won		March 31, 2017
		Beginning balance				Acquisition				Disposal				Valuation				Impairment				Others				Ending balance
Repo A1 ABCP 2		W	—				50,000				—				—				—				—				50,000
Royal-class Repo & Fixed Income 1			—				50,000				—				28				—				—				50,028
Hwan Young Steel Co., Ltd.			97				—				—				—				—				—				97
SAMBO AUTO. Co., Ltd.			38				—				—				—				—				—				38
Mobo Co., Ltd.			14				—				—				—				—				—				14
HANKOOK Silicon Co., Ltd.			1,495				—				—				—				—				—				1,495
Dae Kwang Semiconductor Co., Ltd.			6				—				—				—				—				—				6
Sanbon Department Store			3				—				—				—				—				—				3
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
DALIM Special Vehicle Co., Ltd.			10				—				—				—				—				—				10
ASA JEONJU Co., Ltd.			69				—				—				—				—				—				69
Moonkyung Silica Co., Ltd.			—				—				—				—				—				—				—
Sungkwang Timber Co., Ltd.			4				—				—				—				—				—				4
Yongbo Co., Ltd.			3				—				—				—				—				—				3
HJ Steel Co., Ltd.			2				—				—				—				—				—				2
KS Remicon Co., Ltd.			3				—				—				—				—				—				3
SIN-E Steel Co., Ltd.			33				—				—				—				—				—				33
Joongang Platec Co., Ltd.			35				—				—				—				—				—				35
Pyungsan SI Ltd.			9				—				—				—				—				—				9
Samgong Development Co., Ltd.			7				—				—				—				—				—				7
Joongang Development Co., Ltd.			8				—				—				—				—				—				8
AJS Co., Ltd.			32				—				—				—				—				—				32
SHIN-E B&P Co., Ltd.			10				—				—				—				—				—				10
MSE Co., Ltd.			9				—				—				—				—				—				9
Ilrim Nano Tec Co., Ltd.			15				—				—				—				—				—				15
Youngjin Hi-Tech Co., Ltd.			21				—				—				—				—				—				21
Dong Woo International Co., Ltd.			18				—				—				—				—				(18	)			—
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.			—				—				—				—				—				—				—
Seyang Inc.			27				—				—				—				—				—				27
Seungri Enterprise Co., Ltd.			3				—				—				—				—				—				3

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(1) Changes in available-for-sale financial assets for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won		March 31, 2017
		Beginning balance				Acquisition				Disposal				Valuation				Impairment				Others				Ending balance
Onggane Food Co., Ltd.		W	1				—				—				—				—				—				1
Shin-E P&C Co., Ltd.			1				—				—				—				—				—				1
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
Biwang Industry Co., Ltd			2				—				—				—				—				—				2
Huimun Co., Ltd.			4				—				—				—				—				—				4
Young Sung Co., Ltd.			27				—				—				—				—				—				27
Yuil Industrial Electronics Co., Ltd.			16				—				—				—				—				—				16
DN TEK Inc.			6				—				—				—				—				—				6
Daeyang F.M.S Corporation			23				—				—				—				—				—				23
Kwang Jin Structure Co., Ltd.			31				—				—				—				—				—				31
Woojin Industry Corporation			16				—				—				—				—				—				16
Kwang Sung Industry Co., Ltd.			7				—				—				—				—				—				7
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.			22				—				—				—				—				—				22
Kolmar Pharma Co., Ltd.			3				—				—				—				—				—				3
Morado Co., Ltd.			2				—				—				—				—				—				2
Myung Sung Tex Co., Ltd.			2				—				—				—				—				—				2
Kwang Sung Co., Ltd.			31				—				—				—				—				—				31
EverTechno. Co., Ltd.			7				—				—				—				—				—				7
Autowel Co., Ltd.			13				—				—				—				—				—				13
Woobang Constructon Co., Ltd.			8				—				—				—				—				—				8
Shin Pyung Co., Ltd.			3				—				—				—				—				—				3
JMC Heavy Industries Co., Ltd.			27				—				—				—				—				—				27
Najin Steel Co., Ltd.			5				—				—				—				—				—				5
Sinkwang Industry Co., Ltd.			5				—				—				—				—				—				5
Join Land Co., Ltd.			1				—				—				—				—				—				1
Crystal Co., Ltd.			2				—				—				—				—				—				2
Elephant & Friends Co., Ltd.			3				—				—				—				—				—				3
Mireco Co., Ltd.			11				—				—				—				—				—				11
L&K Industry Co., Ltd.			24				—				—				—				—				—				24
JO Tech Co., Ltd.			25				—				—				—				—				—				25
Kendae Printing Co., Ltd.			21				—				—				—				—				—				21
Dauning Co., Ltd.			6				—				—				—				—				—				6
Korea Trecision Co., Ltd.			5				—				—				—				—				—				5
Ace Track Co., Ltd.			59				—				—				—				—				—				59

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(1) Changes in available-for-sale financial assets for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won		March 31, 2017
		Beginning balance				Acquisition				Disposal				Valuation				Impairment				Others				Ending balance
Taebok Machinery Co., Ltd.		W	11				—				—				—				—				—				11
Yooah Industry Co., Ltd.			13				—				—				—				—				—				13
Yoo-A Construction Co., Ltd.			11				—				—				—				—				—				11
Dung Hwan Co., Ltd.			5				—				—				—				—				—				5
Hurim Biocell Co., Ltd.			5				—				—				—				—				—				5
P. J, Trading Co., Ltd.			—				—				—				—				—				—				—
Sunjin Power Tech Co., Ltd.			90				—				—				—				—				—				90
Smart Power Co., Ltd.			200				—				—				—				—				—				200
Haseung Industries Co., Ltd.			28				—				—				—				—				—				28
Beer Yeast Korea Inc.			7				—				—				—				—				—				7
Daeryung Corporation			10				—				—				—				—				—				10
Korea Bio Red Ginseng Co., Ltd.			10				—				—				—				—				—				10
HS Development Co., Ltd.			54				—				—				—				—				—				54
OCO Co., Ltd.			11				—				—				—				—				—				11
B CON Co., Ltd.			6				—				—				—				—				—				6
CheonIl Metal Co., Ltd.			4				—				—				—				—				—				4
Teakwang Tech Co., Ltd.			12				—				—				—				—				—				12
SsangMa Machine Co., Ltd.			1				—				—				—				—				—				1
SinJin Co., Ltd.			9				—				—				—				—				—				9
Ace Integration Co., Ltd			21				—				—				—				—				—				21
AceInti Agricultiral Co., Ltd.			1				—				—				—				—				1				2
KyungDong Co., Ltd.			1				—				—				—				—				—				1
ChunWon Development Co., Ltd.			39				—				—				—				—				—				39
WonIl Co., Ltd.			50				—				—				—				—				—				50
SungLim Industrial Co., Ltd.			1				—				—				—				—				—				1
DaeHa Co., Ltd.			11				—				—				—				—				—				11
Korea Minerals Co., Ltd.			135				—				—				—				—				—				135
HyoDong Development Co., Ltd.			24				—				—				—				—				—				24
Haspe Tech Co., Ltd.			20				—				—				—				—				—				20
JoHyun Co., Ltd.			18				—				—				—				—				—				18
KC Co., Ltd.			3				—				—				—				—				—				3
SeongJi Industrial Co., Ltd.			1				—				—				—				—				—				1
DongKwang SD, Inc.			—				—				—				—				—				13				13
Dong Yang Metal Co., Ltd.			—				—				—				—				—				14				14
Seyang Precision Ind.Co., Ltd.			—				—				—				—				—				41				41
Dooriwon Food System Co., Ltd.			—				—				—				—				—				1				1
ShinShin Co., Ltd			—				—				—				—				—				17				17
Kitorang Co., Ltd.			—				—				—				—				—				49				49
Sung Kwang Co., Ltd.			—				—				—				—				—				5				5
Areva nc Expansion			98,472				—				—				—				—				(9,961	)			88,511
Navanakorn Electric Co., Ltd.			18,509				—				—				—				—				(1,415	)			17,094
PT. Kedap Saayq			—				—				—				—				—				—				—
Set Holding			170,170				—				—				—				—				—				170,170
PT. Cirebon Energi Prasarana			2,709				—				—				—				—				(207	)			2,502
			746,561				100,059				(197,054	)			1,857				—				(10,422	)			641,001
		W	1,014,732				100,059				(197,054	)			3,959				—				(13,322	)			908,374

(*1) The Company recognized gain and loss on disposal of available-for-sale financial assets amounted to W494 million and W1,038 million, respectively, from the partial sales of Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1, Korea investment – Investment Pool for Public funds 10 and Samsung investment – Investment Pool for Public funds 2 for the three-month period ended March 31, 2017.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(1) Changes in available-for-sale financial assets for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won		December 31, 2016
		Beginning balance				Acquisition				Disposal				Valuation				Impairment				Others				Ending balance
Listed:
Korea District Heating Corp.		W	130,410				—				—				23,773				—				—				154,183
Kwanglim Co., Ltd. (*1)			262				—				(214	)			598				—				(646	)			—
Ssangyong Motor Co., Ltd.			299				—				—				5				—				—				304
Sungjee Construction. Co., Ltd.			5				—				—				16				—				—				21
Korea Line Corp.			—				—				—				—				—				—				—
Namkwang Engineering & Construction Co., Ltd.			1				—				—				(1	)			—				—				—
Pumyang Construction Co., Ltd.			—				—				—				—				—				—				—
ELCOMTEC Co., Ltd.			53				—				—				21				—				—				74
PAN ocean Co., Ltd.			6				—				—				1				—				—				7
Borneo International Furniture Co., Ltd.			103				—				—				—				—				—				103
TONGYANG Inc. (*1)			217				—				(44	)			25				—				(198	)			—
TONGYANG networks Inc. (*1)			6				—				(3	)			—				—				(3	)			—
Nexolon Co., Ltd. (*1)			3,196				—				(3,137	)			569				—				(628	)			—
Dongbu Corporation			—				—				—				—				—				12				12
PT Adaro Energy Tbk			21,012				—				—				52,049				—				—				73,061
Energy Fuels Inc.			5,926				—				—				(2,775	)			(3,273	)			3,507				3,385
Baralaba Coal Company Limited			42				—				—				—				—				—				42
Denison Mines Corp.			34,457				—				—				—				(5,849	)			7,896				36,504
Fission 3.0			30				—				—				(16	)			—				2				16
Fission Uranium Corp.			554				—				—				(126	)			—				31				459
			196,579				—				(3,398	)			74,139				(9,122	)			9,973				268,171
Unlisted:
K&C - Gyeongnam youth job creation Investment Fund			1,207				—				—				—				—				—				1,207
Korea investment – Korea EXIM Bank CERs Private Special Asset Investment Trust I			571				—				—				—				—				—				571
Troika Overseas Resource Development Private Equity Firm			1,553				—				—				—				—				—				1,553
IBK-AUCTUS Green Growth Private Equity firm (*1)			855				—				(814	)			—				—				—				41
Global Dynasty Overseas Resource Development Private Equity Firm			2,233				—				—				—				—				—				2,233
Intellectual Discovery, Ltd.			1,375				—				—				—				—				—				1,375
Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1 (*1)			1,069				3,685				(365	)			—				—				—				4,389
Construction Guarantee			805				—				—				14				—				—				819
Plant & Mechanical Contractors Financial Cooperative of Korea			36				—				—				—				—				—				36
Fire Guarantee			20				—				—				—				—				—				20
Korea Software Financial Cooperative			301				3,000				—				—				—				—				3,301
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
Korea investment – Investment Pool for Public funds 10			—				142,470				—				(1,155	)			—				—				141,315
Samsung investment – Investment Pool for Public funds 2			—				213,710				—				(1,790	)			—				—				211,920
Samsung investment – Investment Pool for Public funds 1			—				53,220				—				(8	)			—				—				53,212
Korea investment – Hanwha KT Mater Lease Private Special Investment Trust (*1)			—				31,200				(640	)			8				—				—				30,568

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(1) Changes in available-for-sale financial assets for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won		December 31, 2016
		Beginning balance				Acquisition				Disposal				Valuation				Impairment				Others				Ending balance
Hwan Young Steel Co., Ltd.		W	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.			93				—				—				—				(93	)			—				—
HANKOOK Silicon Co., Ltd.			7,513				—				—				—				(6,018	)			—				1,495
Kun Young Engineering & Construction Co., Ltd.			5				—				—				—				(3	)			(2	)			—
Pumyang Asset Management Co., Ltd.			3				—				—				—				(3	)			—				—
Dae Kwang Semiconductor Co., Ltd.			6				—				—				—				—				—				6
Sanbon Department Store			3				—				—				—				—				—				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
DALIM Special Vehicle Co., Ltd.			10				—				—				—				—				—				10
ASA JEONJU Co., Ltd.			69				—				—				—				—				—				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
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				—				—				—				(37	)			—				35
Pyungsan SI Ltd.			9				—				—				—				—				—				9
Samgong Development Co., Ltd.			7				—				—				—				—				—				7
Joongang Development Co., Ltd.			8				—				—				—				—				—				8
AJS Co., Ltd.			32				—				—				—				—				—				32
SHIN-E B&P 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.			21				—				—				—				—				—				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.			—				—				—				—				—				—				—
Seyang Inc.			27				—				—				—				—				—				27
Seungri Enterprise Co., Ltd.			3				—				—				—				—				—				3

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Notes to the Consolidated Interim Financial Statements, Continued

March 30, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(1) Changes in available-for-sale financial assets for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won		December 31, 2016
		Beginning balance				Acquisition				Disposal				Valuation				Impairment				Others				Ending balance
Onggane Food Co., Ltd.		W	1				—				—				—				—				—				1
Shin-E P&C Co., Ltd.			1				—				—				—				—				—				1
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				—				—				—				(68	)			51				—
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				—				—				—				(56	)			—				6
Daeyang F.M.S Corporation			3				—				—				—				—				20				23
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				—				—				—				—				1				22
Kolmar Pharma Co., Ltd.			52				—				—				—				(49	)			—				3
Morado Co., Ltd.			2				—				—				—				—				—				2
Myung Sung Tex Co., Ltd.			2				—				—				—				—				—				2
Kwang Sung Co., Ltd.			—				—				—				—				—				31				31
EverTechno. Co.,Ltd.			—				—				—				—				(140	)			147				7
Autowel Co.,Ltd.			—				—				—				—				—				13				13
Woobang Constructon Co., Ltd.			—				—				—				—				—				8				8
Shin Pyung Co., Ltd.			—				—				—				—				—				3				3
JMC Heavy Industries Co., Ltd.			—				—				—				—				—				27				27
Najin Steel Co., Ltd.			—				—				—				—				—				5				5
Kunyang Food Co., Ltd.			—				—				—				—				(1	)			1				—
Sinkwang Industry Co., Ltd.			—				—				—				—				—				5				5
Join Land Co., Ltd.			—				—				—				—				—				1				1
Crystal Co., Ltd.			—				—				—				—				—				2				2
Elephant & Friends Co., Ltd.			—				—				—				—				—				3				3
Mireco Co., Ltd.			—				—				—				—				—				11				11
L&K Industry Co., Ltd.			—				—				—				—				—				24				24
JO Tech Co., Ltd.			—				—				—				—				—				25				25
Samwoo EMC Co., Ltd.			—				—				—				—				(117	)			117				—
Kendae Printing Co., Ltd.			—				—				—				—				—				21				21
Golden Tech Co., Ltd.			—				—				—				—				(114	)			114				—
Dauning Co., Ltd.			—				—				—				—				—				6				6
Korea Trecision Co., Ltd.			—				—				—				—				—				5				5
Buhmwoo Chemical Corp.			—				—				—				—				(20	)			20				—
Ace Track Co., Ltd.			—				—				—				—				(160	)			219				59

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(1) Changes in available-for-sale financial assets for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won		December 31, 2016
		Beginning balance				Acquisition				Disposal				Valuation				Impairment				Others				Ending balance
Taebok Machinery Co., Ltd.		W	—				—				—				—				—				11				11
Yooah Industry Co., Ltd.			—				—				—				—				—				13				13
Yoo-A Construction Co., Ltd.			—				—				—				—				—				11				11
Dung Hwan Co., Ltd.			—				—				—				—				—				5				5
Dongjin Metal Co., Ltd.			—				—				—				—				(27	)			27				—
Hurim Biocell Co., Ltd.			—				—				—				—				—				5				5
P. J, Trading Co., LTd.			—				—				—				—				—				—				—
Sunjin Power Tech Co., Ltd.			—				—				—				—				(157	)			247				90
Smart Power Co., Ltd.			—				200				—				—				—				—				200
Sunjin Inprecision Co., Ltd.			—				—				—				—				(169	)			169				—
Haseung Industries Co., Ltd.			—				—				—				—				—				28				28
Beer Yeast Korea Inc.			—				—				—				—				—				7				7
Daeryung Corporation			—				—				—				—				—				10				10
Korea Bio Red Ginseng Co., Ltd.			—				—				—				—				—				10				10
ESGI Co.,Ltd.			—				—				—				—				(120	)			120				—
ENH Co.,Ltd.			—				—				—				—				(55	)			55				—
HS Development Co., Ltd.			—				—				—				—				—				54				54
OCO Co., Ltd.			—				—				—				—				—				11				11
B CON Co., Ltd.			—				—				—				—				—				6				6
Doosun Co., Ltd.			—				—				—				—				(62	)			62				—
CheonIl Metal Co., Ltd.			—				—				—				—				—				4				4
Teakwang Tech Co., Ltd.			—				—				—				—				—				12				12
SsangMa Machine Co., Ltd.			—				—				—				—				—				1				1
SinJin Co., Ltd.			—				—				—				—				—				9				9
Ace Integration Co., Ltd			—				—				—				—				—				21				21
AceInti Agricultiral Co., Ltd.			—				—				—				—				—				1				1
KyungDong Co., Ltd.			—				—				—				—				—				1				1
ChunWon Development Co., Ltd.			—				—				—				—				—				39				39
WonIl Co., Ltd.			—				—				—				—				—				50				50
SungLim Industrial Co., Ltd.			—				—				—				—				—				1				1
DaeHa Co., Ltd.			—				—				—				—				—				11				11
Korea Minerals Co., Ltd.			—				—				—				—				—				135				135
HyoDong Development Co., Ltd.			—				—				—				—				—				24				24
Haspe Tech Co., Ltd.			—				—				—				—				—				20				20
JoHyun Co., Ltd.			—				—				—				—				—				18				18
KC Co., Ltd.			—				—				—				—				—				3				3
SeongJi Industrial Co., Ltd.			—				—				—				—				—				1				1
SsangYong E&C Co., Ltd. (*1)			—				—				(9	)			—				—				9				—
Areva nc Expansion			170,118				—				—				—				(69,927	)			(1,719	)			98,472
Navanakorn Electric Co., Ltd.			17,951				—				—				—				—				558				18,509
PT. Kedap Saayq			—				—				—				—				—				—				—
Set Holding			179,585				—				—				(9,415	)			—				—				170,170
PT. Cirebon Energi Prasarana			635				1,999				—				—				—				75				2,709
			387,900				449,484				(1,828	)			(12,346	)			(77,581	)			932				746,561
		W	584,479				449,484				(5,226	)			61,793				(86,703	)			10,905				1,014,732

(*1) The Company recognized gain and loss on disposal of available-for-sale financial assets amounted to W1,482 million and W9 million, respectively, from the sales of shares of Kwanglim Co., Ltd., TONGYANG Inc., TONGYANG networks Inc., Nexolon Co., Ltd. and SsangYong E&C Co., Ltd. and from the partial sales of IBK-AUCTUS Green Growth Private Equity Firm, Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1 and Korea investment – Hanwha KT Mater Lease Private Special Investment Trust for the year ended December 31, 2016.

57

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(2) Available-for-sale financial assets as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Shares				Ownership				Acquisition cost				Book value				Fair value
Listed
Korea District Heating Corp.			2,264,068				19.55	%		W	173,201				151,466				151,466
Ssangyong Motor Co., Ltd.			38,568				0.03	%			428				307				307
Sungjee Construction. Co., Ltd.			10,530				0.01	%			49				12				12
Korea Line Corp.			18				0.00	%			1				—				—
Namkwang Engineering & Construction Co., Ltd.			46				0.00	%			15				—				—
Pumyang Construction Co., Ltd.			7				0.00	%			2				—				—
ELCOMTEC Co., Ltd.			32,875				0.04	%			217				81				81
PAN ocean Co., Ltd.			1,492				0.00	%			14				9				9
Borneo International Furniture Co., Ltd.			64,037				0.28	%			97				103				103
Dongbu Corporation (*6)			955				0.02	%			12				12				12
PT Adaro Energy Tbk			480,000,000				1.50	%			71,554				70,644				70,644
Energy Fuels Inc.			1,711,814				2.59	%			16,819				4,112				4,112
Baralaba Coal Company Limited			99,763				0.07	%			18,445				49				49
Denison Mines Corp.			58,284,000				10.78	%			84,134				39,995				39,995
Fission 3.0			300,000				0.15	%			—				20				20
Fission Uranium Corp.			800,000				0.17	%			785				563				563
											365,773				267,373				267,373
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			152				6.29	%			41				41				—
Global Dynasty Overseas Resource Development Private Equity Firm			2,242,437,289				7.46	%			2,242				2,242				—
Intellectual Discovery, Ltd.			1,000,000				8.81	%			5,000				1,375				—
Hanwha-KOSEP New Renewable Energy Private Special Assets Investment Trust 1			4,221,517,033				5.00	%			4,373				4,373				—
Construction Guarantee (*2)			571				0.02	%			601				811				811
Plant & Mechanical Contractors Financial Cooperative of Korea			50				0.01	%			36				36				—
Fire Guarantee			40				0.02	%			20				20				—
Korea Software Financial Cooperative			5,186				1.14	%			3,301				3,301				—
Engineering Financial Cooperative			486				0.05	%			60				60				—
Electric Contractors Financial Cooperative			955				0.03	%			202				202				—
Korea Specialty Contractor Financial Cooperative			476				0.01	%			417				417				—
Information & Communication Financial Cooperative			70				0.01	%			10				10				—
Korea Electric Engineers Association			400				0.24	%			40				40				—
Korea investment – Investment Pool for Public funds 10 (*5)			—				—				79,548				79,263				79,263
Samsung investment – Investment Pool for Public funds 2 (*5)			—				—				79,593				79,286				79,286
Samsung investment – Investment Pool for Public funds 1 (*5)			—				—				53,220				53,499				53,499
Korea investment – Hanwha KT Mater Lease Private Special Investment Trust (*5)			—				—				30,560				30,804				30,804
Repo A1 ABCP 2 (*5)			—				—				50,000				50,000				50,000
Royal-class Repo & Fixed Income 1 (*5)			—				—				50,000				50,028				50,028
Hwan Young Steel Co., Ltd.			10,916				0.14	%			1,092				97				—
SAMBO AUTO. Co., Ltd.			15,066				0.02	%			38				38				—
Mobo Co., Ltd.			504				0.00	%			14				14				—
HANKOOK Silicon Co., Ltd.			3,005,208				10.44	%			7,513				1,495				—

58

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(2) Available-for-sale financial assets as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won		March 31, 2017
		Shares				Ownership				Acquisition cost				Book value				Fair value
Dae Kwang Semiconductor Co., Ltd.			589				0.07	%		W	6				6				—
Sanbon Department Store			828				0.01	%			124				3				—
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				—
DALIM Special Vehicle Co., Ltd.			58				0.08	%			10				10				—
ASA JEONJU Co., Ltd.			34,846				1.34	%			697				69				—
Moonkyung Silica Co., Ltd.			42				0.56	%			—				—				—
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				—
KS Remicon Co., Ltd.			12				0.04	%			3				3				—
SIN-E Steel Co., Ltd.			109				0.08	%			33				33				—
Joongang Platec Co., Ltd.			3,591				0.75	%			72				35				—
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				—
SHIN-E B&P 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				—
Youngjin Hi-Tech Co., Ltd.			2,512				0.25	%			126				21				—
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	%			—				—				—
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				—
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				—
Biwang Industry Co., Ltd			406				0.04	%			2				2				—
Huimun Co., Ltd.			263				0.26	%			4				4				—
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				6				—
Daeyang F.M.S Corporation			593				0.40	%			23				23				—
Kwang Jin Structure Co., Ltd.			3,072				0.60	%			31				31				—

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(2) Available-for-sale financial assets as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won		March 31, 2017
		Shares				Ownership				Acquisition cost				Book value				Fair value
Woojin Industry Corporation			3				0.00	%		W	16				16				—
Kwang Sung Industry Co., Ltd.			325				0.35	%			7				7				—
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.			55				0.02	%			22				22				—
Kolmar Pharma Co., Ltd.			1,426				0.01	%			52				3				—
Morado Co., Ltd.			209				0.04	%			2				2				—
Myung Sung Tex Co., Ltd.			20				0.00	%			2				2				—
Kwang Sung Co., Ltd.			610				0.53	%			31				31				—
EverTechno. Co.,Ltd.			29,424				0.73	%			147				7				—
Autowel Co.,Ltd.			260				0.38	%			13				13				—
Woobang Construction Co., Ltd.			8				0.00	%			8				8				—
Shin Pyung Co., Ltd.			6				0.03	%			3				3				—
JMC Heavy Industries Co., Ltd.			2,724				0.10	%			27				27				—
Najin Steel Co., Ltd.			37				0.06	%			5				5				—
Sinkwang Industry Co., Ltd.			1,091				1.68	%			5				5				—
Join Land Co., Ltd.			33				0.00	%			1				1				—
Crystal Co., Ltd.			22				0.07	%			2				2				—
Elephant & Friends Co., Ltd.			563				0.61	%			3				3				—
Mireco Co., Ltd.			109				0.25	%			11				11				—
L&K Industry Co., Ltd.			1,615				0.60	%			24				24				—
JO Tech Co., Ltd.			1,263				0.62	%			25				25				—
Kendae Printing Co., Ltd.			422				0.60	%			21				21				—
Dauning Co., Ltd.			231				0.41	%			6				6				—
Korea Trecision Co., Ltd.			22				0.45	%			5				5				—
Ace Track Co., Ltd.			3,130				1.08	%			219				59				—
Taebok Machinery Co., Ltd.			109				1.08	%			11				11				—
Yooah Industry Co., Ltd.			130				0.02	%			13				13				—
Yoo-A Construction Co., Ltd.			105				0.20	%			11				11				—
Dung Hwan Co., Ltd.			531				0.02	%			5				5				—
Hurim Biocell Co., Ltd.			113				0.00	%			5				5				—
P. J, Trading Co., LTd.			12				0.04	%			—				—				—
Sunjin Power Tech Co., Ltd.			4,941				0.92	%			247				90				—
Smart Power Co., Ltd.			133,333				4.83	%			200				200				—
Haseung Industries Co., Ltd.			55				0.62	%			28				28				—
Beer Yeast Korea Inc.			1,388				0.43	%			7				7				—
Daeryung Corporation			207				0.19	%			10				10				—
Korea Bio Red Ginseng Co., Ltd.			194				0.09	%			10				10				—
ENH Co., Ltd.			1,086				0.19	%			54				54				—
OCO Co., Ltd.			123				0.37	%			11				11				—
B CON Co., Ltd.			96				1.16	%			6				6				—
Chunil Metal Co., Ltd.			11				0.15	%			4				4				—
Teakwang Tech Co., Ltd.			2,460				0.11	%			12				12				—
SsangMa Machine Co., Ltd.			4				0.05	%			1				1				—
SinJin Co., Ltd.			233				0.30	%			9				9				—
Ace Integration Co., Ltd			93				0.09	%			21				21				—
AceInti Agricultiral Co., Ltd.			4				0.00	%			2				2				—

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(2) Available-for-sale financial assets as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won		March 31, 2017
		Shares				Ownership				Acquisition cost				Book value				Fair value
KyungDong Co., Ltd.			130				0.01	%		W	1				1				—
ChunWon Development Co., Ltd.			193				0.19	%			39				39				—
WonIl Co., Ltd.			999				0.15	%			50				50				—
SungLim Industrial Co., Ltd.			29				0.03	%			1				1				—
DaeHa Co., Ltd.			141				0.54	%			11				11				—
Korea Minerals Co., Ltd.			191				0.05	%			135				135				—
HyoDong Development Co., Ltd.			119				0.15	%			24				24				—
Haspe Tech Co., Ltd.			652				0.55	%			20				20				—
JoHyun Co., Ltd.			350				1.56	%			18				18				—
KC Co., Ltd.			5,107				0.17	%			3				3				—
SeongJi Industrial Co., Ltd.			41				0.05	%			1				1				—
DongKwang SD, Inc.			524				0.23	%			13				13				—
Dong Yang Metal Co., Ltd.			2951				1.97	%			14				14				—
Seyang Precision Ind.Co., Ltd.			829				0.23	%			41				41				—
Dooriwon Food System Co., Ltd.			13				0.27	%			1				1				—
ShinShin Co., Ltd			339				1.12	%			17				17				—
Kitorang Co., Ltd.			165				0.24	%			49				49				—
Sung Kwang C0., Ltd.			23				0.37	%			5				5				—
Areva nc Expansion			1,077,124				13.49	%			288,443				88,511				88,512
Navanakorn Electric Co., Ltd. (*3)			8,885,600				26.93	%			17,216				17,094				—
PT. Kedap Saayq			671				10.00	%			18,540				—				—
Set Holding (*4)			1,100,220				2.50	%			229,255				170,170				170,170
PT. Cirebon Energi Prasarana			22,420				10.00	%			2,612				2,502				—
											943,680				641,001				602,373
										W	1,309,453				908,374				869,746

(*1) Investments in unlisted equity securities held by the Company for which a quoted market price does not exist in an active market and fair value cannot be measured reliably were measured at cost less impairment, if any.

(*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 three-month period ended March 31, 2017.

(*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 three-month period ended March 31, 2017.

(*5) As of March 31, 2017, the Company invested in W342,880 million as beneficiary securities exclusively for payment of decommissioning cost of nuclear power plants. The Company has measured the fair value of the beneficiary securities based on its net asset value.

(*6) The number of shares owned has changed due to the stock merge (9:7) during the three-month period ended March 31, 2017.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(2) Available-for-sale financial assets as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won		December 31, 2016
		Shares				Ownership				Acquisition cost				Book value				Fair value
Listed
Korea District Heating Corp.			2,264,068				19.55	%		W	173,201				154,183				154,183
Ssangyong Motor Co., Ltd.			38,568				0.03	%			428				304				304
Sungjee Construction. Co., Ltd.			10,530				0.01	%			49				21				21
Korea Line Corp.			18				0.00	%			1				—				—
Namkwang Engineering & Construction Co., Ltd.			46				0.00	%			15				—				—
Pumyang Construction Co., Ltd.			7				0.00	%			2				—				—
ELCOMTEC Co., Ltd.			32,875				0.04	%			217				74				74
PAN ocean Co., Ltd.			1,492				0.00	%			14				7				7
Borneo International Furniture Co., Ltd.			64,037				0.28	%			97				103				103
Dongbu Corporation			1,229				0.02	%			12				12				12
PT Adaro Energy Tbk			480,000,000				1.50	%			71,554				73,061				73,061
Energy Fuels Inc.			1,711,814				2.59	%			16,819				3,385				3,385
Baralaba Coal Company Limited (*6)			99,763				0.07	%			18,445				42				42
Denison Mines Corp.			58,284,000				10.93	%			84,134				36,504				36,504
Fission 3.0			300,000				0.17	%			—				16				16
Fission Uranium Corp.			800,000				0.17	%			785				459				459
											365,773				268,171				268,171
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			152				6.29	%			41				41				—
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			4,256,096,329				5.00	%			4,389				4,389				—
Construction Guarantee (*2)			571				0.02	%			601				819				819
Plant & Mechanical Contractors Financial Cooperative of Korea			50				0.01	%			36				36				—
Fire Guarantee			40				0.02	%			20				20				—
Korea Software Financial Cooperative			5,186				1.39	%			3,301				3,301				—
Engineering Financial Cooperative			486				0.05	%			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				0.24	%			40				40				—
Korea investment – Investment Pool for Public funds 10 (*5)			—				—				142,470				141,315				141,315
Samsung investment – Investment Pool for Public funds 2 (*5)			—				—				213,710				211,920				211,920
Samsung investment – Investment Pool for Public funds 1 (*5)			—				—				53,220				53,212				53,212
Korea investment – Hanwha KT Mater Lease Private Special Investment Trust (*5)			—				—				30,560				30,568				30,568
Hwan Young Steel Co., Ltd.			10,916				0.14	%			1,092				97				—
SAMBO AUTO. Co., Ltd.			15,066				0.02	%			38				38				—
Mobo Co., Ltd.			504				0.00	%			14				14				—
HANKOOK Silicon Co., Ltd.			3,005,208				10.44	%			7,513				1,495				—
Dae Kwang Semiconductor Co., Ltd.			589				0.07	%			6				6				—

62

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(2) Available-for-sale financial assets as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won		December 31, 2016
		Shares				Ownership				Acquisition cost				Book value				Fair value
Sanbon Department Store			828				0.01	%		W	124				3				—
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				—
DALIM Special Vehicle Co., Ltd.			58				0.08	%			10				10				—
ASA JEONJU Co., Ltd.			34,846				1.34	%			697				69				—
Moonkyung Silica Co., Ltd.			42				0.56	%			—				—				—
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				—
KS Remicon Co., Ltd.			12				0.04	%			3				3				—
SIN-E Steel Co., Ltd.			109				0.08	%			33				33				—
Joongang Platec Co., Ltd.			3,591				0.75	%			72				35				—
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				—
SHIN-E B&P 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				—
Youngjin Hi-Tech Co., Ltd.			2,512				0.25	%			126				21				—
Dong Woo International Co., Ltd.			90				0.37	%			18				18				—
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	%			—				—				—
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				—
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				—
Biwang Industry Co., Ltd			406				0.04	%			2				2				—
Huimun Co., Ltd.			263				0.26	%			4				4				—
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				6				—
Daeyang F.M.S Corporation			593				0.40	%			23				23				—
Kwang Jin Structure Co., Ltd.			3,072				0.60	%			31				31				—

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(2) Available-for-sale financial assets as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won		December 31, 2016
		Shares				Ownership				Acquisition cost				Book value				Fair value
Woojin Industry Corporation			3				0.00	%		W	16				16				—
Kwang Sung Industry Co., Ltd.			325				0.35	%			7				7				—
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.			55				0.02	%			22				22				—
Kolmar Pharma Co., Ltd.			1,426				0.01	%			52				3				—
Morado Co., Ltd.			209				0.04	%			2				2				—
Myung Sung Tex Co., Ltd.			20				0.00	%			2				2				—
Kwang Sung Co., Ltd.			610				0.53	%			31				31				—
EverTechno. Co., Ltd.			29,424				0.73	%			147				7				—
Autowel Co., Ltd.			260				0.38	%			13				13				—
Woobang Construction Co., Ltd.			8				0.00	%			8				8				—
Shin Pyung Co., Ltd.			6				0.03	%			3				3				—
JMC Heavy Industries Co., Ltd.			2,724				0.10	%			27				27				—
Najin Steel Co., Ltd.			37				0.06	%			5				5				—
Sinkwang Industry Co., Ltd.			1,091				1.68	%			5				5				—
Join Land Co., Ltd.			33				0.00	%			1				1				—
Crystal Co., Ltd.			22				0.07	%			2				2				—
Elephant & Friends Co., Ltd.			563				0.61	%			3				3				—
Mireco Co., Ltd.			109				0.25	%			11				11				—
L&K Industry Co., Ltd.			1,615				0.60	%			24				24				—
JO Tech Co., Ltd.			1,263				0.62	%			25				25				—
Kendae Printing Co., Ltd.			422				0.60	%			21				21				—
Dauning Co., Ltd.			231				0.41	%			6				6				—
Korea Trecision Co., Ltd.			22				0.45	%			5				5				—
Ace Track Co., Ltd.			3,130				1.08	%			219				59				—
Taebok Machinery Co., Ltd.			109				1.08	%			11				11				—
Yooah Industry Co., Ltd.			130				0.02	%			13				13				—
Yoo-A Construction Co., Ltd.			105				0.20	%			11				11				—
Dung Hwan Co., Ltd.			531				0.02	%			5				5				—
Hurim Biocell Co., Ltd.			113				0.00	%			5				5				—
P. J, Trading Co., LTd.			12				0.04	%			—				—				—
Sunjin Power Tech Co., Ltd.			4,941				0.92	%			247				90				—
Smart Power Co., Ltd.			133,333				5.55	%			200				200				—
Haseung Industries Co., Ltd.			55				0.62	%			28				28				—
Beer Yeast Korea Inc.			1,388				0.43	%			7				7				—
Daeryung Corporation			207				0.19	%			10				10				—
Korea Bio Red Ginseng Co., Ltd.			194				0.09	%			10				10				—
ENH Co., Ltd.			1,086				0.19	%			54				54				—
OCO Co., Ltd.			123				0.37	%			11				11				—
B CON Co., Ltd.			96				1.16	%			6				6				—
Chunil Metal Co., Ltd.			11				0.15	%			4				4				—
Teakwang Tech Co., Ltd.			2,460				0.11	%			12				12				—
SsangMa Machine Co., Ltd.			4				0.05	%			1				1				—
SinJin Co., Ltd.			233				0.30	%			9				9				—
Ace Integration Co., Ltd			93				0.09	%			21				21				—
AceInti Agricultiral Co., Ltd.			3				0.00	%			1				1				—

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

9. Available-for-sale Financial Assets, Continued

(2) Available-for-sale financial assets as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won		December 31, 2016
		Shares				Ownership				Acquisition cost				Book value				Fair value
KyungDong Co., Ltd.			130				0.01	%		W	1				1				—
ChunWon Development Co., Ltd.			193				0.19	%			39				39				—
WonIl Co., Ltd.			999				0.15	%			50				50				—
SungLim Industrial Co., Ltd.			29				0.03	%			1				1				—
DaeHa Co., Ltd.			141				0.54	%			11				11				—
Korea Minerals Co., Ltd.			191				0.05	%			135				135				—
HyoDong Development Co., Ltd.			119				0.15	%			24				24				—
Haspe Tech Co., Ltd.			652				0.55	%			20				20				—
JoHyun Co., Ltd.			350				1.56	%			18				18				—
KC Co., Ltd.			5,107				0.17	%			3				3				—
SeongJi Industrial Co., Ltd.			41				0.05	%			1				1				—
Areva nc Expansion			1,077,124				13.49	%			288,443				98,472				98,472
Navanakorn Electric Co., Ltd. (*3)			8,885,600				26.93	%			17,216				18,509				—
PT. Kedap Saayq			671				10.00	%			18,540				—				—
Set Holding (*4)			1,100,220				2.50	%			229,255				170,170				170,170
PT. Cirebon Energi Prasarana			22,420				10.00	%			2,612				2,709				—
											1,040,553				746,561				706,476
										W	1,406,326				1,014,732				974,647

(*1) Investments in unlisted equity securities held by the Company for which a quoted market price does not exist in an active market and fair value cannot be measured reliably were measured at cost less impairment, if any.

(*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, 2016.

(*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, 2016.

(*5) As of December 31, 2016, the Company invested in W437,015 million as beneficiary securities exclusively for payment of decommissioning cost of nuclear power plants. The Company has measured the fair value of the beneficiary securities based on its net asset value.

(*6) The number of shares owned has changed due to the stock merge (500:1) during the year ended December 31, 2016.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

10. Held-to-maturity Investments

Held-to-maturity investments as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Beginning balance				Acquisition				Disposal				Others				Ending balance
Government bonds		W	3,244				1				(119	)			—				3,126
		W	3,244				1				(119	)			—				3,126
Current		W	114				—				(53	)			3				64
Non-current			3,130				1				(66	)			(3	)			3,062
In millions of won		December 31, 2016
		Beginning balance				Acquisition				Disposal				Others				Ending balance
Government bonds		W	3,623				149				(528	)			—				3,244
		W	3,623				149				(528	)			—				3,244
Current		W	380				—				(380	)			114				114
Non-current			3,243				149				(148	)			(114	)			3,130

11. Derivatives

(1) Derivatives as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Current				Non-current				Current				Non-current
Derivative assets
Currency forward		W	524				7,828				8,370				32,806
Currency swap			50,575				76,688				184,913				540,057
Interest rate swap			—				4,858				—				4,705
Others (*1)			—				10,523				—				10,523
		W	51,099				99,897				193,283				588,091
Derivative liabilities
Currency forward		W	4,209				1,669				1,153				34
Currency swap			35,783				169,527				—				56,612
Interest rate swap			3,169				68,602				2,098				78,789
		W	43,161				239,798				3,251				135,435

(*1) The Company has a put option to sell shares of DS POWER Co., Ltd, a related party of the Company, and the fair value of the option is recorded in ‘Others’ (refer to note 17).

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

11. Derivatives, Continued

(2) Currency forward contracts which are not designated as hedging instruments as of March 31, 2017 are as follows:

In millions of won and thousands of foreign currencies
Counterparty		Contract Date				Maturity date				Contract amounts
										Pay				Receive				Contract exchange rate
KEB Hana Bank			2014.04.10				2021.07.12			W	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
Bank of America			2014.04.29				2021.07.12				105,400			USD	100,000				1,054.00
KEB Hana Bank			2014.05.09				2021.07.12				104,600			USD	100,000				1,046.00
KEB Hana Bank			2017.03.15				2017.04.03				1,263			USD	1,100				1,147.92
Standard Chartered			2017.03.10				2017.04.12				5,781			USD	5,000				1,156.20
Nova Scotia			2017.03.14				2017.04.18				5,729			USD	5,000				1,145.70
Credit Suisse			2017.03.15				2017.04.19				11,446			USD	10,000				1,144.60
Mizuho Bank			2017.03.16				2017.04.20				11,323			USD	10,000				1,132.32
Standard Chartered			2017.03.20				2017.04.21				5,642			USD	5,000				1,128.34
Morgan Stanley			2017.03.20				2017.04.24				5,609			USD	5,000				1,121.76
Credit Suisse			2017.03.21				2017.04.25				5,594			USD	5,000				1,118.80
Mizuho Bank			2017.03.23				2017.04.26				11,198			USD	10,000				1,119.84
Morgan Stanley			2017.03.24				2017.04.27				11,222			USD	10,000				1,122.22
Credit Suisse			2017.03.27				2017.04.27				5,568			USD	5,000				1,113.63
Nova Scotia			2017.03.29				2017.04.28				11,120			USD	10,000				1,112.00
Standard Chartered			2017.03.31				2017.05.02				11,185			USD	10,000				1,118.54
BTMU			2017.03.30				2017.04.05				20,091			USD	18,000				1,116.19
BNP Paribas			2017.03.16				2017.04.20				13,577			USD	12,000				1,131.38
Citibank			2017.03.15				2017.05.17				5,722			USD	5,000				1,144.40
HSBC			2017.03.07				2017.04.17				12,625			USD	11,000				1,147.75
HSBC			2017.03.27				2017.04.28				5,565			USD	5,000				1,113.08
HSBC			2017.03.27				2017.04.28				7,758			USD	7,000				1,108.24
HSBC			2017.03.29				2017.04.17			USD	4,339				4,980				1,147.75
Nova Scotia			2017.02.24				2017.04.28				11,282			USD	10,000				1,128.23
Nova Scotia			2017.03.10				2017.04.14				1,154			USD	1,000				1,154.10
Credit Agricole			2017.02.10				2017.04.14				6,893			USD	6,000				1,148.75
Credit Agricole			2017.02.28				2017.05.04				5,650			USD	5,000				1,130.00
Credit Agricole			2017.03.27				2017.04.28				5,591			USD	5,000				1,118.10
Credit Agricole			2017.03.31				2017.05.04			USD	4,000				4,520				1,130.00
JP Morgan			2017.02.10				2017.04.14				8,047			USD	7,000				1,149.63
JP Morgan			2017.03.29				2017.04.28				5,558			USD	5,000				1,111.60
JP Morgan			2017.03.20				2017.05.23				5,573			USD	5,000				1,114.50
BTMU			2017.03.20				2017.05.22				11,239			USD	10,000				1,123.86
Shinhan Bank			2017.03.20				2017.04.05				4,506			USD	4,000				1,126.50
Standard Chartered			2017.03.27				2017.04.10				4,896			USD	4,400				1,112.70
Standard Chartered			2017.02.02				2017.11.15				3,436			USD	3,000				1,145.20
KEB Hana Bank			2016.09.07				2017.09.06				3,121			EUR	2,500				1,248.20
KEB Hana Bank			2016.08.26				2017.08.09				1,280			CNY	7,800				164.13
KEB Hana Bank			2016.09.07				2017.09.06				834			CNY	5,200				160.48
Nova Scotia			2017.03.27				2017.09.29				2,210			USD	2,000				1,104.90
Nova Scotia			2017.03.27				2017.09.29				2,212			USD	2,000				1,105.90
Nova Scotia			2017.03.27				2017.09.29				2,214			USD	2,000				1,106.90
Nova Scotia			2017.03.27				2017.09.29				2,216			USD	2,000				1,107.90
Nova Scotia			2017.03.21				2017.09.25				2,222			USD	2,000				1,111.00

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

11. Derivatives, Continued

(2) Currency forward contracts which are not designated as hedging instruments as of March 31, 2017 are as follows, continued:

In millions of won and thousands of foreign currencies
Counterparty		Contract Date				Maturity date				Contract amounts
										Pay				Receive				Contract exchange rate
Nova Scotia			2017.03.27				2017.09.29				2,220			USD	2,000				1,110.00
Nova Scotia			2017.03.21				2017.09.25				2,015			USD	1,812				1,112.00
Woori Bank			2017.03.27				2017.09.29				2,224			USD	2,000				1,111.90
BTMU			2017.03.20				2017.09.22				3,359			USD	3,000				1,119.60
Nomura			2017.03.23				2017.09.27				5,599			USD	5,000				1,119.70
Societe Generale			2017.03.20				2017.09.22				4,530			USD	4,042				1,120.70
Societe Generale			2017.03.20				2017.09.22				5,625			USD	5,000				1,125.00
Societe Generale			2017.03.02				2017.09.06				2,005			USD	1,782				1,125.00
BNP Paribas			2017.02.08				2017.08.10				436			USD	381				1,144.20
Societe Generale			2017.02.08				2017.08.10				899			USD	785				1,144.40
Societe Generale			2017.03.07				2017.09.11				290			USD	253				1,144.80
Nova Scotia			2017.03.13				2017.09.15				2,292			USD	2,000				1,145.90
Nova Scotia			2017.03.13				2017.09.15				2,290			USD	2,000				1,144.90
Nova Scotia			2017.03.13				2017.09.15				2,288			USD	2,000				1,143.90
Nova Scotia			2017.03.13				2017.09.15				2,284			USD	2,000				1,142.10
Nova Scotia			2017.03.07				2017.09.11			W	33,440			USD	3,000				1,146.60
Nova Scotia			2017.03.07				2017.09.11				3,443			USD	3,000				1,147.60
Nova Scotia			2017.03.07				2017.09.11				538			USD	468				1,148.60
Nova Scotia			2017.03.07				2017.09.11				3,449			USD	3,000				1,149.60
BTMU			2017.01.12				2017.07.17				5,714			USD	4,837				1,181.45
Nova Scotia			2017.01.12				2017.07.17				2,928			USD	2,478				1,181.63
BNP Paribas			2017.01.12				2017.07.17				3,578			USD	3,027				1,182.00
Nomura			2017.01.12				2017.07.17				1,720			USD	1,455				1,182.20
KEB Hana Bank			2015.08.26				2017.07.31			JPY	630,000				6,377				10.12
BNP Paribas			2015.02.12				2017.04.10			IDR	6,567,882			USD	486				13,525.00
BNP Paribas			2015.02.12				2017.05.10			IDR	6,567,882			USD	486				13,525.00
BNP Paribas			2015.02.12				2017.06.12			IDR	6,567,882			USD	486				13,525.00
BNP Paribas			2015.02.12				2017.07.10			IDR	6,567,882			USD	486				13,525.00
BNP Paribas			2015.02.12				2017.08.10			IDR	2,889,868			USD	214				13,525.00

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

11. Derivatives, Continued

(3) Currency swap contracts which are not designated as hedging instruments as of March 31, 2017 are as follows:

In millions of won and thousands of foreign currencies
Counterparty		Contract year				Contract amount								Contract interest rate								Contract exchange rate
						Pay				Receive				Pay				Receive
Deutsche Bank			2013~2018			W	110,412			JPY	10,00,000				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
Mizuho Bank			2014~2017				153,645			USD	150,000				2.35	%			3M Libor + 0.65	%			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
Citibank			2012~2022				112,930			USD	100,000				2.79	%			3.00	%			1,129.30
JP Morgan			2012~2022				112,930			USD	100,000				2.79	%			3.00	%			1,129.30
Bank of America			2012~2022				112,930			USD	100,000				2.79	%			3.00	%			1,129.30
Shinhan Bank			2016~2022				112,930			USD	100,000				2.79	%			3.00	%			1,129.30
HSBC			2012~2022				111,770			USD	100,000				2.89	%			3.00	%			1,117.70
KEB Hana Bank			2012~2022				111,770			USD	100,000				2.87	%			3.00	%			1,117.70
Standard Chartered			2012~2022				111,770			USD	100,000				2.89	%			3.00	%			1,117.70
Deutsche Bank			2012~2022				55,885			USD	50,000				2.79	%			3.00	%			1,117.70
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
Korea Development Bank			2016~2019				105,260			USD	100,000				2.48	%			2.38	%			1,052.60
Nomura			2015~2025				111,190			USD	100,000				2.60	%			3.25	%			1,111.90
Korea Development Bank			2015~2025				111,190			USD	100,000				2.62	%			3.25	%			1,111.90
Woori Bank			2015~2025				55,595			USD	50,000				2.62	%			3.25	%			1,111.90
KEB Hana Bank			2015~2025				55,595			USD	50,000				2.62	%			3.25	%			1,111.90

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

11. Derivatives, Continued

(4) Currency swap contracts which are designated as hedging instruments as of March 31, 2017 are as follows:

In millions of won and thousands of foreign currencies
Counterparty		Contract year		Contract amount								Contract interest rate								Contract exchange rate
				Pay				Receive				Pay				Receive
Citibank		2013~2018		W	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
JP Morgan		2014~2019			107,190			USD	100,000				3M Libor+3.25	%			2.75	%			1,071.90
Morgan Stanley		2014~2019			107,190			USD	100,000				3M Libor+3.25	%			2.75	%			1,071.90
Deutsche Bank		2014~2019			107,190			USD	100,000				3M Libor+3.25	%			2.75	%			1,071.90
Korea Development Bank		2016~2021			121,000			USD	100,000				2.15	%			2.50	%			1,210.00
Morgan Stanley		2016~2021			121,000			USD	100,000				3M Libor+2.10	%			2.50	%			1,210.00
BNP Paribas		2016~2021			121,000			USD	100,000				3M Libor+2.10	%			2.50	%			1,210.00
Morgan Stanley		2012~2017			142,500			USD	125,000				3.76	%			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
Morgan Stanley		2013~2019			59,172			CHF	50,000				3.40	%			1.63	%			1,183.43
Nomura		2013~2019			59,172			CHF	50,000				3.47	%			1.63	%			1,183.43
Morgan Stanley		2013~2018			107,360			USD	100,000				3.27	%			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
Morgan Stanley		2014~2019			104,490			USD	100,000				2.70	%			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
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
BNP Paribas		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
BNP Paribas		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
BNP Paribas		2014~2020			55,340			USD	50,000				2.21	%			2.50	%			1,106.80
HSBC		2014~2020			55,340			USD	50,000				2.21	%			2.50	%			1,106.80

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

11. Derivatives, Continued

(5) Interest rate swap contracts which are not designated as hedging instruments as of March 31, 2017 are as follows:

In millions of won										Contract interest rate per annum
Counterparty		Contract year				Contract amount				Pay				Receive
	Standard Chartered												2012~2017						W	160,000				3.57	%			3M CD+0.32	%
JP Morgan			2013~2018				150,000				3.58	%			3M CD+0.31	%
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	%
Export-Import Bank of Korea			2015~2031			USD	15,893				2.67	%			6M USD Libor
ING Bank			2015~2031			USD	7,861				2.67	%			6M USD Libor
BNP Paribas			2015~2031			USD	7,861				2.67	%			6M USD Libor

(*) 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.

(6) Interest rate swap contracts which are designated as hedging instruments as of March 31, 2017 are as follows:

In thousands of U.S. dollars

Contract interest rate per annum

Counterparty

Contract year

Contract amount

Pay

Receive

BNP Paribas

2009~2027

USD

94,790

4.16%

6M USD Libor

KFW

2009~2027

USD

94,790

4.16%

6M USD Libor

Credit Agricole

2016~2033

USD

99,694

3.98%~4.10%

6M USD Libor

SMBC

2016~2033

USD

130,369

4.05%~4.18%

6M USD Libor

(7) Gains and losses on valuation and transaction of derivatives for the three-month periods ended March 31, 2017 and 2016 are as follows and included in finance income and costs in the consolidated statements of comprehensive income (loss):

In millions of won		Net income effects of valuation gain (loss)								Net income effects of transaction gain (loss)								Accumulated other comprehensive income (loss) (*)
		March 31, 2017				March 31, 2016				March 31, 2017				March 31, 2016				March 31, 2017				March 31, 2016
Currency forward		W	(28,635	)			(10,575	)			(19,365	)			1,295				—				—
Currency swap			(676,861	)			(121,839	)			(20,249	)			2,478				(10,333	)			(22,254	)
Interest rate swap			2,021				4,997				—				(672	)			—				(17	)
		W	(703,475	)			(127,417)				(39,614	)			3,101				(10,333	)			(22,271	)

(*) For the three-month period ended March 31, 2017, the net loss on valuation of derivatives applying cash flow hedge accounting of W5,937 million, net of tax, is included in other comprehensive income or loss.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

12. Other Financial Assets

(1) Other financial assets as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Current				Non-current				Current				Non-current
Loans and receivables		W	246,324				735,145				198,133				683,353
Allowance for doubtful accounts			—				(4,185	)			—				(4,532	)
Present value discount			(1,114	)			(42,324	)			(1,001	)			(41,746	)
Long-term/short-term financial instruments			1,915,004				510,764				2,281,460				414,466
		W	2,160,214				1,199,400				2,478,592				1,051,541

(2) Loans and receivables as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Face value				Allowance for doubtful accounts				Present value discount				Book value
Short-term loans and receivables
Loans for tuition		W	33,006				—				(1,114	)			31,892
Loans for housing			12,470				—				—				12,470
Fisheries loan			352				—				—				352
Other loans			200,496				—				—				200,496
			246,324				—				(1,114	)			245,210
Long-term loans and receivables
Loans for tuition			416,552				—				(42,187	)			374,365
Loans for housing			129,526				—				—				129,526
Loans for related parties			134,367				(4,185	)			—				130,182
Fisheries loan			992				—				(137	)			855
Other loans			53,708				—				—				53,708
			735,145				(4,185	)			(42,324	)			688,636
		W	981,469				(4,185	)			(43,438	)			933,846

In millions of won		December 31, 2016
		Face value				Allowance for doubtful accounts				Present value discount				Book value
Short-term loans and receivables
Loans for tuition		W	29,028				—				(1,001	)			28,027
Loans for housing			12,556				—				—				12,556
Fisheries loan			352				—				—				352
Other loans			156,197				—				—				156,197
			198,133				—				(1,001	)			197,132
Long-term loans and receivables
Loans for tuition			404,200				—				(41,593	)			362,607
Loans for housing			125,850				—				—				125,850
Loans for related parties			91,249				(4,532	)			—				86,717
Fisheries loan			1,312				—				(153	)			1,159
Other loans			60,742				—				—				60,742
			683,353				(4,532	)			(41,746	)			637,075
		W	881,486				(4,532	)			(42,747	)			834,207

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

12. Other Financial Assets, Continued

(3) Changes in the allowance for doubtful accounts of loans and receivables for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Beginning balance		W	4,532				—
Bad debt expense			—				4,352
Other			(347	)			180
Ending balance		W	4,185				4,532

(4) Long-term and short-term financial instruments as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Current				Non-current				Current				Non-current
Time deposits		W	1,343,027				30,000				1,820,391				30,000
ABCP			385,000				203,600				351,800				132,600
CP			156,901				—				16,000				—
CD			—				—				60,443				—
RP			—				1,845				—				1,521
Others			30,076				275,319				32,826				250,345
		W	1,915,004				510,764				2,281,460				414,466

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

13. Inventories

Inventories as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Acquisition cost				Valuation allowance				Book value
Raw materials		W	3,378,557				(1,323	)			3,377,234
Merchandise			13,509				—				13,509
Work-in-progress			139,214				—				139,214
Finished goods			73,349				—				73,349
Supplies			1,343,535				(4,091	)			1,339,444
Inventories in transit			609,446				—				609,446
Other inventories			9,835				—				9,835
		W	5,567,445				(5,414	)			5,562,031

In millions of won		December 31, 2016
		Acquisition cost				Valuation allowance				Book value
Raw materials		W	3,182,711				(1,323	)			3,181,388
Merchandise			20				—				20
Work-in-progress			118,640				—				118,640
Finished goods			57,659				—				57,659
Supplies			1,289,160				(4,553	)			1,284,607
Inventories in transit			827,437				—				827,437
Other inventories			9,692				—				9,692
		W	5,485,319				(5,876	)			5,479,443

The reversal of the allowance for loss on inventory valuation due to increase in the net realizable value of inventory deducted from cost of sales was W667 million and W2,473 million for the three-month period ended March 31, 2017 and for the year ended December 31, 2016, respectively. The amounts of loss from inventory valuation included in other gains or losses for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 were W204 million and W2,683 million, respectively.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

14. Finance Lease Receivables

(1) Finance lease contracts

The Company entered into a power purchase agreement (“PPA”) with Jordan Electric Power Company to provide a 373MW level Qatrana gas combined power plant over a 25 year lease term, and accounts for the PPA as a finance lease. Also, the Company has fly-ash pipe conduit finance leases with an average lease term of 7 years. In addition, the Company entered into a PPA with the Comision Federal de Electricidad in Mexico to provide for 25 years of all electricity generated from the power plant after completion of its construction and collect rates consisting of fixed costs (to recover the capital) and variable costs during the contracted period.

(2) Finance lease receivables as of March 31, 2017 and December 31, 2016 are as follows and included in current and non-current trade and other receivables, net, in the consolidated statements of financial position:

In millions of won		March 31, 2017								December 31, 2016
		Minimum lease payments				Present value of minimum lease payments				Minimum lease payments				Present value of minimum lease payments
Less than 1 year		W	37,049				8,777				55,708				12,225
1 ~ 5 years			406,589				203,367				423,152				214,176
More than 5 years			1,533,924				681,723				1,690,492				746,473
		W	1,977,562				893,867				2,169,352				972,874

(3) There are no impaired finance lease receivables as of March 31, 2017 and December 31, 2016.

15. Non-Financial Assets

Non-financial assets as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Current				Non-current				Current				Non-current
Advance payment		W	122,378				59,733				93,279				71,238
Prepaid expenses			274,207				78,025				228,142				78,066
Others (*)			388,501				12,035				310,439				32,485
		W	785,086				149,793				631,860				181,789

(*) Details of others as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Current				Non-current				Current				Non-current
Tax refund receivables		W	44,468				2,021				30,959				2,188
Greenhouse gas emissions rights			182,492				—				145,105				—
Others			161,541				10,014				134,375				30,297
		W	388,501				12,035				310,439				32,485

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

16. Consolidated Subsidiaries

(1) Consolidated subsidiaries as of March 31, 2017 and December 31, 2016 are as follows:

Subsidiaries		Key operation activities		Location		Percentage of ownership (%)
						March 31, 2017				December 31, 2016
Korea Hydro & Nuclear Power Co., Ltd.		Power generation		KOREA			100.00	%			100.00	%
Korea South-East Power Co., Ltd.		Power generation		KOREA			100.00	%			100.00	%
Korea Midland Power Co., Ltd.		Power generation		KOREA			100.00	%			100.00	%
Korea Western Power Co., Ltd.		Power generation		KOREA			100.00	%			100.00	%
Korea Southern Power Co., Ltd.		Power generation		KOREA			100.00	%			100.00	%
Korea East-West Power Co., Ltd.		Power generation		KOREA			100.00	%			100.00	%
KEPCO Engineering & Construction Company, Inc. (*1)		Architectural engineering for utility plant and others		KOREA			65.77	%			65.77	%
KEPCO Plant Service & Engineering Co., Ltd.		Utility plant maintenance and others		KOREA			51.00	%			51.00	%
KEPCO Nuclear Fuel Co., Ltd.		Nuclear fuel		KOREA			96.36	%			96.36	%
KEPCO KDN Co., Ltd.		Electric power information technology and others		KOREA			100.00	%			100.00	%
Garolim Tidal Power Plant Co., Ltd. (*2)		Power generation		KOREA			49.00	%			49.00	%
KEPCO International HongKong Ltd.		Holding company		HONG KONG			100.00	%			100.00	%
KEPCO International Philippines Inc.		Holding company		PHILIPPINES			100.00	%			100.00	%
KEPCO Gansu International Ltd.		Holding company		HONG KONG			100.00	%			100.00	%
KEPCO Philippines Holdings Inc.		Holding company		PHILIPPINES			100.00	%			100.00	%
KEPCO Philippines Corporation		Operation of utility plant		PHILIPPINES			100.00	%			100.00	%
KEPCO Ilijan Corporation		Utility plant rehabilitation and operation		PHILIPPINES			51.00	%			51.00	%
KEPCO Lebanon SARL		Operation of utility plant		LEBANON			100.00	%			100.00	%
KEPCO Neimenggu International Ltd.		Holding company		HONG KONG			100.00	%			100.00	%
KEPCO Shanxi International Ltd.		Holding company		HONG KONG			100.00	%			100.00	%
KOMIPO Global Pte Ltd.		Holding company		SINGAPORE			100.00	%			100.00	%
KEPCO Canada Energy Ltd.		Resources development		CANADA			100.00	%			100.00	%
KEPCO Netherlands B.V.		Holding company		NETHERLANDS			100.00	%			100.00	%
KOREA Imouraren Uranium Investment Corp.		Resources development		FRANCE			100.00	%			100.00	%
KEPCO Australia Pty., Ltd.		Resources development		AUSTRALIA			100.00	%			100.00	%
KOSEP Australia Pty., Ltd.		Resources development		AUSTRALIA			100.00	%			100.00	%
KOMIPO Australia Pty., Ltd.		Resources development		AUSTRALIA			100.00	%			100.00	%
KOWEPO Australia Pty., Ltd.		Resources development		AUSTRALIA			100.00	%			100.00	%
KOSPO Australia Pty., Ltd.		Resources development		AUSTRALIA			100.00	%			100.00	%
KEPCO Middle East Holding Company		Holding company		BAHRAIN			100.00	%			100.00	%
Qatrana Electric Power Company		Construction and operation of utility plant		JORDAN			80.00	%			80.00	%
KHNP Canada Energy, Ltd.		Resources development		CANADA			100.00	%			100.00	%
KEPCO Bylong Australia Pty., Ltd.		Resources development		AUSTRALIA			100.00	%			100.00	%
Korea Waterbury Uranium Limited Partnership		Resources development		CANADA			79.64	%			79.64	%
Korea Electric Power Nigeria Ltd.		Operation of utility plant		NIGERIA			100.00	%			100.00	%
KEPCO Holdings de Mexico		Holding company		MEXICO			100.00	%			100.00	%
KST Electric Power Company		Construction and operation of utility plant		MEXICO			56.00	%			56.00	%
KEPCO Energy Service Company		Operation of utility plant		MEXICO			100.00	%			100.00	%
KEPCO Netherlands S3 B.V.		Holding company		NETHERLANDS			100.00	%			100.00	%
PT. KOMIPO Pembangkitan Jawa Bali		Operation of utility plant		INDONESIA			51.00	%			51.00	%
PT. Cirebon Power Service (*2)		Operation of utility plant		INDONESIA			27.50	%			27.50	%
KOWEPO International Corporation		Operation of utility plant		PHILIPPINES			99.99	%			99.99	%
KOSPO Jordan LLC		Operation of utility plant		JORDAN			100.00	%			100.00	%
EWP Philippines Corporation		Operation of utility plant		PHILIPPINES			100.00	%			100.00	%
EWP America Inc.		Holding company		USA			100.00	%			100.00	%
EWP Renewable Co.		Holding company		USA			100.00	%			100.00	%
DG Fairhaven Power, LLC		Power generation		USA			100.00	%			100.00	%
DG Whitefield, LLC		Power generation		USA			100.00	%			100.00	%
Springfield Power, LLC		Power generation		USA			100.00	%			100.00	%
KNF Canada Energy Limited		Resources development		USA			96.36	%			96.36	%
PT KEPCO Resource Indonesia		Holding company		INDONESIA			100.00	%			100.00	%
EWP Barbados 1 SRL		Holding company		BARBADOS			100.00	%			100.00	%
California Power Holdings, LLC		Power generation		USA			100.00	%			100.00	%

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

16. Consolidated Subsidiaries, Continued

(1) Consolidated subsidiaries as of March 31, 2017 and December 31, 2016 are as follows, Continued:

						Percentage of ownership (%)
Subsidiaries		Key operation activities		Location		March 31, 2017				December 31, 2016
Gyeonggi Green Energy Co., Ltd.		Power generation		KOREA			62.01	%			62.01	%
PT. Tanggamus Electric Power		Power generation		INDONESIA			52.50	%			52.50	%
Gyeongju Wind Power Co., Ltd.		Power generation		KOREA			70.00	%			70.00	%
KOMIPO America Inc.		Holding company		USA			100.00	%			100.00	%
EWPRC Biomass Holdings, LLC		Holding company		USA			100.00	%			100.00	%
KOSEP USA, INC.		Power generation		USA			100.00	%			100.00	%
PT. EWP Indonesia		Holding company		INDONESIA			99.96	%			99.95	%
KEPCO Netherlands J3 B.V.		Holding company		NETHERLANDS			100.00	%			100.00	%
Korea Offshore Wind Power Co., Ltd.		Operation of utility plant		KOREA			100.00	%			100.00	%
Global One Pioneer B.V.		Holding company		NETHERLANDS			100.00	%			100.00	%
Global Energy Pioneer B.V.		Holding company		NETHERLANDS			100.00	%			100.00	%
Mira Power Limited (*3)		Power generation		PAKISTAN			76.00	%			76.00	%
KOSEP Material Co., Ltd. (*4)		Power generation		KOREA			46.22	%			46.22	%
Commerce and Industry Energy Co., Ltd. (*5)		Power generation		KOREA			59.03	%			59.03	%
KEPCO Singapore Holdings Pte., Ltd.		Holding company		SINGAPORE			100.00	%			100.00	%
KOWEPO India Private Limited		Holding company		INDIA			100.00	%			100.00	%
KEPCO KPS Philippines Corp.		Utility plant maintenance and others		PHILIPPINES			51.00	%			51.00	%
KOSPO Chile SpA		Holding company		CHILE			100.00	%			100.00	%
PT. KOWEPO Sumsel Operation And Maintenance Services		Utility plant maintenance and others		INDONESIA			95.00	%			95.00	%
HeeMang Sunlight Power Co., Ltd.		Power generation		KOREA			100.00	%			100.00	%
Fujeij Wind Power Company		Operation of utility plant		JORDAN			100.00	%			100.00	%
KOSPO Youngnam Power Co., Ltd.		Operation of utility plant		KOREA			50.00	%			50.00	%
Global One Carbon Private Equity Investment Trust 2		Holding company		KOREA			96.67	%			96.67	%
Chitose Solar Power Plant LLC		Power generation		JAPAN			80.10	%			80.10	%
KEPCO Energy Solution Co. Ltd.		Energy service		KOREA			100.00	%			100.00	%
Solar School Plant Co., Ltd.		Power generation		KOREA			100.00	%			100.00	%
KOSPO Power Services Limitada		Utility plant maintenance and others		CHILE			65.00	%			65.00	%
Energy New Industry Specialized Investment Private Investment Trust		Holding company		KOREA			99.75	%			99.75	%
KOEN Bylong Pty., Ltd.		Resources development		AUSTRALIA			100.00	%			100.00	%
KOMIPO Bylong Pty., Ltd.		Resources development		AUSTRALIA			100.00	%			100.00	%
KOWEPO Bylong Pty., Ltd.		Resources development		AUSTRALIA			100.00	%			100.00	%
KOSPO Bylong Pty., Ltd.		Resources development		AUSTRALIA			100.00	%			100.00	%
EWP Bylong Pty., Ltd.		Resources development		AUSTRALIA			100.00	%			100.00	%
KOWEPO Lao International		Utility plant maintenance and others		LAOS			100.00	%			100.00	%
KEPCO US Inc.		Holding company		USA			100.00	%			—
KEPCO Alamosa LLC		Holding company		USA			50.10	%			—

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

(*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 annual 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 March 31, 2017.

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

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

16. Consolidated Subsidiaries, Continued

(2) Subsidiaries included in and excluded from consolidation for the three-month period ended March 31, 2017 are as follows:

<Subsidiaries included in consolidation during the three-month period ended March 31, 2017>

Subsidiary		Reason
KEPCO US Inc.		Newly established
KEPCO Alamosa LLC		Newly established

There are no subsidiaries excluded from consolidation during the three-month period ended March 31, 2017.

(3) Summary of financial information of consolidated subsidiaries as of and for the three-month period ended March 31, 2017 and as of and for the year ended December 31, 2016 are as follows:

In millions of won
March 31, 2017
Subsidiaries		Total assets				Total liabilities				Sales				Profit (loss) for the period
Korea Hydro & Nuclear Power Co., Ltd.		W	52,449,647				27,009,579				2,668,468				567,762
Korea South-East Power Co., Ltd.			9,779,787				4,633,056				1,652,020				268,750
Korea Midland Power Co., Ltd.			9,365,031				5,568,729				1,218,320				198,767
Korea Western Power Co., Ltd.			9,723,777				5,665,184				1,235,581				186,382
Korea Southern Power Co., Ltd.			9,772,968				5,442,701				1,248,100				215,725
Korea East-West Power Co., Ltd.			8,840,785				4,211,132				1,435,082				239,490
KEPCO Engineering & Construction Company, Inc.			757,971				336,729				102,201				1,428
KEPCO Plant Service & Engineering Co., Ltd.			1,115,655				329,370				270,004				29,063
KEPCO Nuclear Fuel Co., Ltd.			738,985				374,967				38,124				631
KEPCO KDN Co., Ltd.			494,138				181,847				123,077				3,448
Garolim Tidal Power Plant Co., Ltd.			630				350				—				(6	)
KEPCO International HongKong Ltd.			161,038				1				—				1,214
KEPCO International Philippines Inc.			105,626				1,174				—				4,767
KEPCO Gansu International Ltd.			16,554				514				—				(4	)
KEPCO Philippines Holdings Inc.			114,286				14				—				239
KEPCO Philippines Corporation			7,435				3,017				—				87
KEPCO Ilijan Corporation			522,354				54,440				28,826				17,708
KEPCO Lebanon SARL			1,313				9,673				—				(17	)
KEPCO Neimenggu International Ltd.			172,259				—				—				(111	)
KEPCO Shanxi International Ltd.			507,192				203,584				—				(2,288	)
KOMIPO Global Pte Ltd.			206,326				930				—				(240	)
KEPCO Canada Energy Ltd.			182				24				—				(8	)
KEPCO Netherlands B.V.			118,215				49				—				(30	)
KOREA Imouraren Uranium Investment Corp.			151,509				716				—				527
KEPCO Australia Pty., Ltd.			494,319				1,729				6				(79	)
KOSEP Australia Pty., Ltd.			22,975				510				2,423				983
KOMIPO Australia Pty., Ltd.			23,209				10				2,423				983
KOWEPO Australia Pty., Ltd.			23,338				—				2,423				989
KOSPO Australia Pty., Ltd.			25,959				4,080				2,423				(1,804	)
KEPCO Middle East Holding Company			118,549				117,129				—				(2,198	)
Qatrana Electric Power Company			491,078				367,130				4,807				6,009
KHNP Canada Energy, Ltd.			58,611				43				—				(13	)
KEPCO Bylong Australia Pty., Ltd.			220,599				261,392				—				14,985
Korea Waterbury Uranium Limited Partnership			20,875				133				—				(12	)
Korea Electric Power Nigeria Ltd.			607				127				1,365				301
KEPCO Holdings de Mexico			245				25				—				(24	)
KST Electric Power Company			583,358				526,265				30,506				4,257
KEPCO Energy Service Company			1,713				775				1,436				417
KEPCO Netherlands S3 B.V.			51,863				43				—				530

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

16. Consolidated Subsidiaries, Continued

(3) Summary of financial information of consolidated subsidiaries as of and for the three-month period ended March 31, 2017 and as of and for the year ended December 31, 2016 are as follows, continued:

In millions of won
March 31, 2017
Subsidiaries		Total assets				Total liabilities				Sales				Profit (loss) for the period
PT. KOMIPO Pembangkitan Jawa Bali		W	15,762				5,394				4,619				1,832
PT. Cirebon Power Service			3,241				957				1,820				108
KOWEPO International Corporation			—				—				—				—
KOSPO Jordan LLC			10,770				721				1,723				68
EWP Philippines Corporation			1,793				874				—				(2	)
EWP America Inc. (*)			90,759				71,061				6,954				(3,083	)
KNF Canada Energy Limited			1,861				20				—				(10	)
PT KEPCO Resource Indonesia			776				17				—				(69	)
EWP Barbados 1 SRL			246,981				578				—				(604	)
Gyeonggi Green Energy Co., Ltd.			296,266				216,859				19,391				(640	)
PT. Tanggamus Electric Power			180,303				156,881				6,670				7,421
Gyeongju Wind Power Co., Ltd.			102,831				74,218				2,382				856
KOMIPO America Inc.			11,481				542				—				2,670
KOSEP USA, INC.			163				36,503				—				(458	)
PT. EWP Indonesia			515				28				—				(284	)
KEPCO Netherlands J3 B.V.			115,744				75				—				(23	)
Korea Offshore Wind Power Co., Ltd.			34,937				74				—				(915	)
Global One Pioneer B.V.			142				32				—				(22	)
Global Energy Pioneer B.V.			309				30				—				(20	)
Mira Power Limited			163,584				122,853				—				(299	)
KOSEP Material Co., Ltd.			1,631				1,531				796				(801	)
Commerce and Industry Energy Co., Ltd.			99,562				87,263				7,260				184
KEPCO Singapore Holdings Pte., Ltd.			2,699				4				—				(1	)
KOWEPO India Private Limited			850				—				—				(1	)
KEPCO KPS Philippines Corp.			7,733				1,248				3,687				406
KOSPO Chile SpA			128,903				48,711				—				869
PT. KOWEPO Sumsel Operation And Maintenance Services			1,621				850				1,949				296
HeeMang Sunlight Power Co., Ltd.			6,884				3,358				16				(185	)
Fujeij Wind Power Company			41,928				40,768				—				(345	)
KOSPO Youngnam Power Co.,Ltd.			315,749				237,207				—				(145	)
Global One Carbon Private Equity Investment Trust 2			2,993				—				—				3
Chitose Solar Power Plant LLC			81,231				66,635				—				3,552
KEPCO Energy Solution Co. Ltd.			300,604				313				—				590
Solar School Plant Co., Ltd.			200,602				352				4				241
KOSPO Power Services Limitada			4,979				2,840				1,345				(796	)
Energy New Industry Specialized Investment Private Investment Trust			502,791				1,471				—				77
KOEN Bylong Pty., Ltd.			6,003				—				—				—
KOMIPO Bylong Pty., Ltd.			6,003				—				—				—
KOWEPO Bylong Pty., Ltd.			6,003				—				—				—
KOSPO Bylong Pty., Ltd.			6,003				—				—				—
EWP Bylong Pty., Ltd.			6,003				—				—				—
KOWEPO Lao International			810				1,098				—				(364	)
KEPCO US Inc.			469				469				—				—
KEPCO Alamosa LLC			1				1				—				—

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

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

16. Consolidated Subsidiaries, Continued

(3) Summary of financial information of consolidated subsidiaries as of and for the three-month period ended March 31, 2017 and as of and for the year ended December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Subsidiaries		Total assets				Total liabilities				Sales				Profit (loss) for the period
Korea Hydro & Nuclear Power Co., Ltd.		W	52,782,915				27,366,938				11,168,579				2,454,810
Korea South-East Power Co., Ltd.			9,773,778				4,794,330				5,093,598				531,061
Korea Midland Power Co., Ltd.			9,066,666				5,416,336				3,719,981				400,696
Korea Western Power Co., Ltd.			9,810,714				5,866,916				4,169,712				401,936
Korea Southern Power Co., Ltd.			9,806,023				5,637,950				4,200,035				426,337
Korea East-West Power Co., Ltd.			8,967,951				4,488,911				4,210,898				467,603
KEPCO Engineering & Construction Company, Inc.			786,596				364,676				506,012				17,796
KEPCO Plant Service & Engineering Co., Ltd.			1,086,421				301,490				1,214,304				86,657
KEPCO Nuclear Fuel Co., Ltd.			713,230				346,012				309,911				33,115
KEPCO KDN Co., Ltd.			519,901				205,869				588,160				43,127
Garolim Tidal Power Plant Co., Ltd.			632				346				—				-24
KEPCO International HongKong Ltd.			173,138				41				—				4,532
KEPCO International Philippines Inc.			114,141				1,468				—				56,783
KEPCO Gansu International Ltd.			17,928				557				—				(18	)
KEPCO Philippines Holdings Inc.			125,100				27				—				13,517
KEPCO Philippines Corporation			13,704				8,949				—				(8,717	)
KEPCO Ilijan Corporation			558,030				58,449				116,667				51,552
KEPCO Lebanon SARL			1,458				10,312				—				810
KEPCO Neimenggu International Ltd.			186,636				—				—				7,082
KEPCO Shanxi International Ltd.			549,189				218,047				—				5,812
KOMIPO Global Pte Ltd.			223,082				1,095				—				36,764
KEPCO Canada Energy Ltd.			202				24				—				(27,216	)
KEPCO Netherlands B.V.			128,014				35				—				224
KOREA Imouraren Uranium Investment Corp.			154,302				764				—				(68,417	)
KEPCO Australia Pty., Ltd.			503,657				1,545				3,670				(19,006	)
KOSEP Australia Pty., Ltd.			25,174				521				5,357				4,028
KOMIPO Australia Pty., Ltd.			25,413				10				5,388				4,023
KOWEPO Australia Pty., Ltd.			25,550				10				5,357				4,012
KOSPO Australia Pty., Ltd.			25,625				10				5,357				4,033
KEPCO Middle East Holding Company			128,846				125,008				—				6,840
Qatrana Electric Power Company			546,123				417,800				18,866				19,601
KHNP Canada Energy, Ltd.			54,374				46				—				(6,304	)
KEPCO Bylong Australia Pty., Ltd.			220,721				277,358				—				(2,357	)
Korea Waterbury Uranium Limited Partnership			20,882				149				—				2,348
Korea Electric Power Nigeria Ltd.			696				493				9,794				35
KEPCO Holdings de Mexico			262				19				—				251
KST Electric Power Company			596,823				539,459				146,295				17,322
KEPCO Energy Service Company			1,309				310				5,337				580
KEPCO Netherlands S3 B.V.			55,609				54				—				3,731
PT. KOMIPO Pembangkitan Jawa Bali			16,246				4,549				21,632				8,989
PT. Cirebon Power Service			3,456				1,228				7,463				301
KOWEPO International Corporation			—				—				—				—
KOSPO Jordan LLC			11,524				687				7,321				317
EWP Philippines Corporation			1,966				955				—				(41	)
EWP America Inc. (*)			104,809				80,252				33,616				(8,704	)
KNF Canada Energy Limited			1,967				20				—				(46	)
PT KEPCO Resource Indonesia			913				18				—				(341	)
EWP Barbados 1 SRL			267,859				425				1,656				(902	)
Gyeonggi Green Energy Co., Ltd.			301,126				221,078				108,557				19,211
PT. Tanggamus Electric Power			184,861				167,641				40,903				2,041
Gyeongju Wind Power Co., Ltd.			76,569				49,293				6,413				1,269
KOMIPO America Inc.			11,518				2,432				—				(2,240	)
KOSEP USA, INC.			159				39,028				3,791				(72,817	)
PT. EWP Indonesia			2,154				50				—				1,088
KEPCO Netherlands J3 B.V.			125,337				68				—				12,433

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

16. Consolidated Subsidiaries, Continued

(3) Summary of financial information of consolidated subsidiaries as of and for the three-month period ended March 31, 2017 and as of and for the year ended December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Subsidiaries		Total assets				Total liabilities				Sales				Profit (loss) for the period
Korea Offshore Wind Power Co., Ltd.		W	37,826				2,048				—				(4,960	)
Global One Pioneer B.V.			161				22				—				(54	)
Global Energy Pioneer B.V.			338				22				—				(59	)
Mira Power Limited			178,141				133,730				—				(954	)
KOSEP Material Co., Ltd.			2,398				1,497				3,232				(901	)
Commerce and Industry Energy Co., Ltd.			99,432				87,316				28,375				(536	)
KEPCO Singapore Holdings Pte., Ltd.			2,568				13				—				(33	)
KOWEPO India Private Limited			879				—				—				1
KEPCO KPS Philippines Corp.			7,897				1,213				12,843				2,060
KOSPO Chile SpA			6,656				4,787				—				125
PT. KOWEPO Sumsel Operation and Maintenance Services			1,439				700				6,165				(96	)
HeeMang Sunlight Power Co., Ltd.			7,102				3,391				12				(308	)
Fujeij Wind Power Company			47,935				46,636				—				(873	)
KOSPO Youngnam Power Co.,Ltd.			284,368				205,680				—				(931	)
Global One Carbon Private Equity Investment Trust 2			3,002				—				—				9
Chitose Solar Power Plant LLC			49,728				38,806				—				(811	)
KEPCO Energy Solution Co. Ltd.			299,933				233				—				(300	)
Solar School Plant Co., Ltd.			200,268				259				1				9
KOSPO Power Services Limitada			4,385				1,262				7,300				2,963
Energy New Industry Specialized Investment Private Investment Trust			501,275				33				—				(7	)
KOEN Bylong Pty., Ltd.			6,135				—				—				—
KOMIPO Bylong Pty., Ltd.			6,135				—				—				—
KOWEPO Bylong Pty., Ltd.			6,135				—				—				—
KOSPO Bylong Pty., Ltd.			6,135				—				—				—
EWP Bylong Pty., Ltd.			6,135				—				—				—
KOWEPO Lao International			218				181				—				(108	)

(*) Financial information of EWP America Inc. includes that of six other subsidiaries, EWP Renewable Co., DG Fairhaven Power, LLC, DG Whitefield, LLC, Springfield Power, LLC, 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 W35 billion, change in the capacity of cogeneration units (except for the change due to performance improvement of equipment, maintenance) will require unanimous consent of all directors.
KOSPO Youngnam Power Co., Ltd.		Dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained. Shares cannot be wholly or partially transferred without prior written consent of financial institutions.

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March 31, 2017

(Unaudited)

16. Consolidated Subsidiaries, Continued

(5) Details of non-controlling interest prior to intra-group eliminations as of and for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won
March 31, 2017
Description		KEPCO Ilijan Corporation				KEPCO Plant Service & Engineering Co., Ltd.				KEPCO Engineering & Construction Company, Inc.				Others				Total
Percentage of ownership			49.00	%			49.00	%			33.92	%
Current assets		W	163,533				580,192				237,305				1,230,213				2,211,243
Non-current assets			358,821				535,463				520,666				2,383,712				3,798,662
Current liabilities			(18,263	)			(285,573	)			(227,728	)			(295,023	)			(826,587	)
Non-current liabilities			(36,177	)			(43,797	)			(109,001	)			(1,950,436	)			(2,139,411	)
Net assets			467,914				786,285				421,242				1,368,466				3,043,907
Book value of non-controlling interest			229,278				385,280				142,885				684,495				1,441,938
Sales			28,826				270,004				102,201				123,353				524,384
Profit for the period			17,708				29,063				1,428				22,923				71,122
Profit for the period attributable to non-controlling interest			8,677				14,241				484				8,069				31,471
Cash flows from operating activities			30,883				30,507				38,978				(1,842	)			98,526
Cash flows from investing activities			(139	)			(46,371	)			(2,948	)			(103,502	)			(152,960	)
Cash flows from financing activities before dividends to non-controlling interest			(5,298	)			—				(31,800	)			87,823				50,725
Dividends to non-controlling interest			(5,090	)			—				—				(4,060	)			(9,150	)
Effect of exchange rate fluctuation			(4,797	)			(2	)			(248	)			(14,995	)			(20,042	)
Net increase (decrease) of cash and cash equivalents			15,559				(15,866	)			3,982				(36,576	)			(32,901	)
In millions of won
December 31, 2016
Description		KEPCO Ilijan Corporation				KEPCO Plant Service & Engineering Co., Ltd.				KEPCO Engineering & Construction Company, Inc.				Others				Total
Percentage of ownership			49.00	%			49.00	%			33.92	%
Current assets		W	154,758				553,924				270,553				1,211,510				2,190,745
Non-current assets			403,272				532,497				516,043				2,379,882				3,831,694
Current liabilities			(19,256	)			(264,506	)			(286,444	)			(297,510	)			(867,716	)
Non-current liabilities			(39,193	)			(36,984	)			(78,232	)			(1,919,924	)			(2,074,333	)
Net assets			499,581				784,931				421,920				1,373,958				3,080,390
Book value of non-controlling interest			244,794				384,616				143,115				684,093				1,456,618
Sales			116,667				1,214,304				506,012				674,461				2,511,444
Profit for the period			51,552				86,657				17,796				102,170				258,175
Profit for the period attributable to non-controlling interest			25,260				42,462				6,036				26,709				100,467
Cash flows from operating activities			102,546				121,240				18,748				84,086				326,620
Cash flows from investing activities			(117	)			79,807				(7,556	)			(367,674	)			(295,540	)
Cash flows from financing activities before dividends to non-controlling interest			(56,863	)			(39,911	)			(1,634	)			877,863				779,455
Dividends to non-controlling interest			(55,705	)			(36,139	)			(2,539	)			(22,054	)			(116,437	)
Effect of exchange rate fluctuation			1,529				127				(854	)			7,216				8,018
Net increase (decrease) of cash and cash equivalents			(8,610	)			125,124				6,165				579,437				702,116

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March 31, 2017

(Unaudited)

16. Consolidated Subsidiaries, Continued

(6) Changes in goodwill

(i) Details of goodwill as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Acquisition cost		W	2,582				2,582
Accumulated impairment			—				—
Carrying book value		W	2,582				2,582

(ii) There are no changes in goodwill for the three-month period ended March 31, 2017 and for the year ended December 31, 2016.

(7) Disposals of subsidiaries

KEPCO Canada Uranium Investment Limited Partnership was dissolved and the Company liquidated DG Kings Plaza, LLC during the year ended December 31, 2016.

(i) The fair value of proceeds from disposal as of December 31, 2016 are as follows:

In millions of won		December 31, 2016
Cash received upon dissolution		W	898
Net assets transferred due to dissolution			34,148
		W	35,046

(ii) The carrying value of assets and liabilities of the subsidiary as at the date the Company lost its control during the year ended December 31, 2016 are as follows:

In millions of won		December 31, 2016
Current assets
Cash and cash equivalents		W	898
Current financial assets, net			81
Non-current assets
Available-for-sale financial assets			34,089
Current liabilities
Current financial liabilities			(22	)
		W	35,046

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March 31, 2017

(Unaudited)

16. Consolidated Subsidiaries, Continued

(7) Disposals of subsidiaries, continued

(iii) Gain from disposals of subsidiaries for the year ended December 31, 2016 is as follows:

In millions of won		December 31, 2016
Fair value of proceeds from disposal		W	35,046
Net assets disposed			(35,046	)
Non-controlling interests			—
Realization of unrealized gain			—
Other comprehensive income			—
Gain from disposals of subsidiaries		W	—

(iv) Net cashflow from sale of subsidiary for the year ended December 31, 2016 is as follows:

In millions of won		December 31, 2016
Consideration received in cash		W	898
Less: cash held by disposed subsidiary			(898	)
Net cash flow		W	—

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures

(1) Investments in associates and joint ventures as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won
March 31, 2017
Investees		Key operation activities		Location		Percentage of ownership				Acquisition cost				Book value
<Associates>
Korea Gas Corporation (*1)		Importing and wholesaling LNG		KOREA			20.47	%		W	94,500				2,011,020
Korea Electric Power Industrial Development Co., Ltd.		Electricity metering and others		KOREA			29.00	%			4,727				19,143
YTN Co., Ltd.		Broadcasting		KOREA			21.43	%			59,000				37,522
Cheongna Energy Co., Ltd.		Generating and distributing vapor and hot/cold water		KOREA			43.90	%			48,353				12,882
Gangwon Wind Power Co., Ltd. (*2)		Power generation		KOREA			15.00	%			5,725				12,634
Hyundai Green Power Co., Ltd.		Power generation		KOREA			29.00	%			88,885				113,066
Korea Power Exchange (*6)		Management of power market and others		KOREA			100.00	%			127,839				232,671
AMEC Partners Korea Ltd. (*3)		Resources development		KOREA			19.00	%			707				224
Hyundai Energy Co., Ltd. (*9)		Power generation		KOREA			30.66	%			71,070				330
Ecollite Co., Ltd.		Artificial light-weight aggregate		KOREA			36.10	%			1,516				—
Taebaek Wind Power Co., Ltd.		Power generation		KOREA			25.00	%			3,810				4,958
Taeback Guinemi Wind Power Co., Ltd.		Power generation		KOREA			25.00	%			3,420				3,114
Pyeongchang Wind Power Co., Ltd.		Power generation		KOREA			25.00	%			3,875				3,517
Daeryun Power Co., Ltd. (*3, 10)		Power generation		KOREA			13.13	%			25,477				29,573
Changjuk Wind Power Co., Ltd.		Power generation		KOREA			30.00	%			3,801				7,118
KNH Solar Co., Ltd.		Power generation		KOREA			27.00	%			1,296				1,986
SPC Power Corporation		Power generation		PHILIPPINES			38.00	%			20,635				50,814
Gemeng International Energy Co., Ltd.		Power generation		CHINA			34.00	%			413,153				652,165
PT. Cirebon Electric Power		Power generation		INDONESIA			27.50	%			40,365				89,356
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				—
PT Wampu Electric Power		Power generation		INDONESIA			46.00	%			21,292				20,979
PT. Bayan Resources TBK		Resources development		INDONESIA			20.00	%			615,860				402,667
S-Power Co., Ltd.		Power generation		KOREA			49.00	%			132,300				126,045
Pioneer Gas Power Limited (*8)		Power generation		INDIA			40.00	%			49,831				43,396
Eurasia Energy Holdings		Power generation and resources development		RUSSIA			40.00	%			461				—
Xe-Pian Xe-Namnoy Power Co., Ltd.		Power generation		LAOS			25.00	%			57,483				53,686
Hadong Mineral Fiber Co., Ltd. (*3)		Recycling fly ashes		RUSSIA			8.33	%			50				12
Green Biomass Co., Ltd. (*12)		Power generation		LAOS			14.00	%			714				6
PT. Mutiara Jawa		Manufacturing and operating floating coal terminal		INDONESIA			29.00	%			2,978				—
Samcheok Eco Materials Co., Ltd. (*3, 11)		Recycling fly ashes		KOREA			2.35	%			686				—
Noeul Green Energy Co., Ltd.		Power generation		KOREA			29.00	%			1,740				1,089
Naepo Green Energy Co., Ltd.		Power generation		KOREA			25.00	%			29,200				25,044
Goseong Green Energy Co., Ltd. (*2)		Power generation		KOREA			1.12	%			2,900				2,643
Gangneung Eco Power Co., Ltd. (*2)		Power generation		KOREA			1.61	%			2,900				2,627
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				179
DS POWER Co., Ltd. (*2)		Power generation		KOREA			14.44	%			17,900				7,780
Dongducheon Dream Power Co., Ltd.		Power generation		KOREA			33.61	%			61,535				49,581
Yeongwol Energy Station Co., Ltd. (*2)		Power generation		KOREA			10.00	%			1,400				—
Jinbhuvish Power Generation Pvt. Ltd. (*2)		Power generation		INDIA			5.16	%			9,000				—
SE Green Energy Co., Ltd.		Power generation		KOREA			47.76	%			3,821				3,514
Daegu Photovoltaic Co., Ltd.		Power generation		KOREA			29.00	%			1,230				1,824
Jeongam Wind Power Co., Ltd.		Power generation		KOREA			40.00	%			5,580				3,940
Korea Power Engineering Service Co., Ltd.		Construction and service		KOREA			29.00	%			290				2,766
Busan Green Energy Co., Ltd.		Power generation		KOREA			29.00	%			14,564				13,669
Jungbu Bio Energy Co., Ltd. (*2)		Power generation		KOREA			18.87	%			1,000				—
Korea Electric Vehicle Charging Service		Electric vehicle charge service		KOREA			28.00	%			1,596				985
Ulleungdo Natural Energy Co., Ltd.		Renewable power generation		KOREA			29.85	%			8,000				6,766
Korea Nuclear Partners Co., Ltd.		Electric material agency		KOREA			29.00	%			290				272

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(1) Investments in associates and joint ventures as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won
March 31, 2017
Investees		Key operation activities		Location				Percentage of ownership				Acquisition cost				Book value
Tamra Offshore Wind Power Co., Ltd.		Power generation			KOREA				27.00	%			8,910				8,565
Korea Electric Power Corporation Fund (*13)		Developing electric enterprises			KOREA				98.09	%			51,500				49,066
Energy Infra Asset Management Co., Ltd. (*3)		Asset management			KOREA				9.90	%			297				329
Daegu clean Energy Co., Ltd.		Renewable power generation			KOREA				28.00	%			140				122
YaksuESS Co.,Ltd		Installing ESS related equipment			KOREA				29.00	%			210				193
Nepal Water & Energy Development Company Private Limited (*14)		Construction and operating power plant			NEPAL				52.77	%			18,568				17,190
Gwangyang Green Energy Co., Ltd.		Power generation			KOREA				20.00	%		W	2,000				1,992
													2,144,638				4,129,020
<Joint ventures>
KEPCO-Uhde Inc. (*7)		Power generation			KOREA				52.80	%			11,355				286
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				27,045
Shuweihat Asia Power Investment B.V.		Holding company			NETHERLANDS				49.00	%			46,037				19,978
Shuweihat Asia Operation & Maintenance Company (*7)		Maintenance of utility plant			CAYMAN				55.00	%			30				640
Waterbury Lake Uranium L.P.		Resources development			CANADA				36.97	%			26,602				19,411
ASM-BG Investicii AD		Power generation			BULGARIA				50.00	%			16,101				20,356
RES Technology AD		Power generation			BULGARIA				50.00	%			15,595				12,593
KV Holdings, Inc.		Power generation			PHILIPPINES				40.00	%			2,103				1,722
KEPCO SPC Power Corporation (*7)		Construction and operation of utility plant			PHILIPPINES				75.20	%			94,579				240,540
Canada Korea Uranium Limited Partnership (*5)		Resources development			CANADA				12.50	%			5,404				—
Gansu Datang Yumen Wind Power Co., Ltd.		Power generation			CHINA				40.00	%			16,621				11,686
Datang Chifeng Renewable Power Co., Ltd.		Power generation			CHINA				40.00	%			121,928				158,648
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		Power generation			CHINA				40.00	%			10,858				10,408
Rabigh Electricity Company		Power generation			SAUDI ARABIA				40.00	%			109,743				90,307
Rabigh Operation & Maintenance Company		Maintenance of utility plant			SAUDI ARABIA				40.00	%			70				4,633
Jamaica Public Service Company Limited		Power generation			JAMAICA				40.00	%			301,910				230,380
KW Nuclear Components Co., Ltd.		Manufacturing			KOREA				45.00	%			833				6,909
Busan Shinho Solar Power Co., Ltd.		Power generation			KOREA				25.00	%			2,100				3,875
GS Donghae Electric Power Co., Ltd.		Power generation			KOREA				34.00	%			204,000				210,760
Global Trade Of Power System Co., Ltd.		Exporting products and technology of small or medium business by proxy			KOREA				29.00	%			290				470
Expressway Solar-light Power Generation Co., Ltd.		Power generation			KOREA				29.00	%			1,856				2,161
KODE NOVUS I LLC		Power generation			USA				50.00	%			19,213				—
KODE NOVUS II LLC		Power generation			USA				50.00	%			12,756				—
Daejung Offshore Wind Power Co., Ltd.		Power generation			KOREA				49.90	%			5,190				3,157
Amman Asia Electric Power Company (*7)		Power generation			JORDAN				60.00	%			111,476				148,110
KAPES, Inc. (*7)		R&D			KOREA				51.00	%			5,629				5,477
Dangjin Eco Power Co., Ltd.		Power generation			KOREA				34.00	%			56,100				53,061
Honam Wind Power Co., Ltd.		Power generation			KOREA				29.00	%			3,480				4,261
Chun-cheon Energy Co., Ltd.		Power generation			KOREA				29.90	%			52,700				50,217
Yeonggwangbaeksu Wind Power Co., Ltd. (*3)		Power generation			KOREA				15.00	%			3,000				2,857
Nghi Son 2 Power Ltd.		Power generation			VIETNAM				50.00	%			2,122				336
Kelar S.A (*7)		Power generation			CHILE				65.00	%			78,060				70,521
PT. Tanjung Power Indonesia		Power generation			INDONESIA				35.00	%			746				—
Incheon New Power Co., Ltd.		Power generation			KOREA				29.00	%			461				590
Seokmun Energy Co., Ltd.		Power generation			KOREA				29.00	%			15,370				16,029
Daehan Wind Power PSC		Power generation			JORDAN				50.00	%			285				—

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(1) Investments in associates and joint ventures as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won
March 31, 2017
Investees		Key operation activities		Location		Percentage of ownership				Acquisition cost				Book value
Barakah One Company (*16)		Power generation		UAE			18.00	%			118				109
Nawah Energy Company (*16)		Operation of utility plant		UAE			18.00	%			296				274
MOMENTUM		International thermonuclear experimental reactor construction management		FRANCE			33.33	%			1				165
Daegu Green Power Co., Ltd.(*15)		Power generation		KOREA			29.00	%			46,225				47,935
Yeonggwang Wind Power Co., Ltd.		Power generation		KOREA			41.00	%			15,375				15,290
Chester Solar IV SpA (*7)		Power generation		CHILE			81.82	%			1,675				1,675
											1,455,614				1,492,872
										W	3,600,252				5,621,892

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

(*9) As of March 31, 2017, 15.64% 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 Company’s percentage of ownership has decreased due to the acquisition 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%.

(*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.

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

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

(*15) The entity is reclassified from associates to joint ventures since the terms of the shareholders’ agreement had been amended.

(*16) The effective percentage of ownership is less than 20%, but the Company has joint control over the entity as decisions on the major activities require the unanimous consent of the parties that collectively control the entity.

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(1) Investments in associates and joint ventures as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Investees		Key operation activities		Location		Percentage of ownership				Acquisition cost				Book value
<Associates>
Korea Gas Corporation (*1)		Importing and wholesaling LNG		KOREA			20.47	%		W	94,500				1,933,877
Korea Electric Power Industrial Development Co., Ltd.		Electricity metering and others		KOREA			29.00	%			4,727				20,475
YTN Co., Ltd.		Broadcasting		KOREA			21.43	%			59,000				38,156
Cheongna Energy Co., Ltd.		Generating and distributing vapor and hot/cold water		KOREA			43.90	%			48,353				12,373
Gangwon Wind Power Co., Ltd. (*2)		Power generation		KOREA			15.00	%			5,725				13,069
Hyundai Green Power Co., Ltd.		Power generation		KOREA			29.00	%			88,885				115,998
Korea Power Exchange (*6)		Management of power market and others		KOREA			100.00	%			127,839				223,238
AMEC Partners Korea Ltd. (*3)		Resources development		KOREA			19.00	%			707				225
Hyundai Energy Co., Ltd. (*9)		Power generation		KOREA			30.66	%			71,070				1,031
Ecollite Co., Ltd.		Artificial light-weight aggregate		KOREA			36.10	%			1,516				—
Taebaek Wind Power Co., Ltd.		Power generation		KOREA			25.00	%			3,810				4,750
Taeback Guinemi Wind Power Co., Ltd.		Power generation		KOREA			25.00	%			3,420				3,131
Pyeongchang Wind Power Co., Ltd.		Power generation		KOREA			25.00	%			3,875				3,383
Daeryun Power Co., Ltd. (*3, 10)		Power generation		KOREA			13.13	%			25,477				29,873
Changjuk Wind Power Co., Ltd.		Power generation		KOREA			30.00	%			3,801				6,930
KNH Solar Co., Ltd.		Power generation		KOREA			27.00	%			1,296				2,073
SPC Power Corporation		Power generation		PHILIPPINES			38.00	%			20,635				56,818
Gemeng International Energy Co., Ltd.		Power generation		CHINA			34.00	%			413,153				680,065
PT. Cirebon Electric Power		Power generation		INDONESIA			27.50	%			40,365				96,658
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				—
PT Wampu Electric Power		Power generation		INDONESIA			46.00	%			21,292				23,188
PT. Bayan Resources TBK		Resources development		INDONESIA			20.00	%			615,860				402,667
S-Power Co., Ltd.		Power generation		KOREA			49.00	%			132,300				123,912
Pioneer Gas Power Limited (*8)		Power generation		INDIA			40.00	%			49,831				50,740
Eurasia Energy Holdings		Power generation and resources development		RUSSIA			40.00	%			461				—
Xe-Pian Xe-Namnoy Power Co., Ltd.		Power generation		LAOS			25.00	%			49,119				51,544
Hadong Mineral Fiber Co., Ltd. (*17)		Recycling fly ashes		KOREA			8.33	%			50				—
Green Biomass Co., Ltd. (*12)		Power generation		KOREA			14.00	%			714				47
PT. Mutiara Jawa		Manufacturing and operating floating coal terminal		INDONESIA			29.00	%			2,978				—
Samcheok Eco Materials Co., Ltd. (*3, 11)		Recycling fly ashes		KOREA			2.35	%			686				—
Noeul Green Energy Co., Ltd.		Power generation		KOREA			29.00	%			1,740				1,217
Naepo Green Energy Co., Ltd.		Power generation		KOREA			25.00	%			29,200				25,438
Goseong Green Energy Co., Ltd. (*2)		Power generation		KOREA			1.12	%			2,900				2,663
Gangneung Eco Power Co., Ltd. (*2)		Power generation		KOREA			1.61	%			2,900				2,646
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				181
DS POWER Co., Ltd. (*2)		Power generation		KOREA			14.44	%			17,900				7,190
Dongducheon Dream Power Co., Ltd.		Power generation		KOREA			33.61	%			61,535				46,876
KS Solar Co., Ltd. (*3)		Power generation		KOREA			19.00	%			637				604
Yeongwol Energy Station Co., Ltd. (*2)		Power generation		KOREA			10.00	%			1,400				—
Jinbhuvish Power Generation Pvt. Ltd. (*2)		Power generation		INDIA			5.16	%			9,000				—
SE Green Energy Co., Ltd.		Power generation support		KOREA			47.76	%			3,821				3,525
Daegu Photovoltaic Co., Ltd.		Power generation		KOREA			29.00	%			1,230				1,700
Jeongam Wind Power Co., Ltd.		Power generation		KOREA			40.00	%			5,580				4,000
Korea Power Engineering Service Co., Ltd.		Construction and service		KOREA			29.00	%			290				2,810
Busan Green Energy Co., Ltd.		Power generation		KOREA			29.00	%			14,564				13,803
Jungbu Bio Energy Co., Ltd.(*2)		Power generation		KOREA			18.87	%			1,000				—
Korea Electric Vehicle Charging Service		Electric vehicle charge service		KOREA			28.00	%			1,596				1,103
Ulleungdo Natural Energy Co., Ltd.		Renewable power generation		KOREA			29.85	%			8,000				6,894
Korea Nuclear Partners Co., Ltd.		Electric material agency		KOREA			29.00	%			290				248
Tamra Offshore Wind Power Co., Ltd.		Power generation		KOREA			27.00	%			8,910				7,015

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(1) Investments in associates and joint ventures as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Investees		Key operation activities		Location		Percentage of ownership				Acquisition cost				Book value
Korea Electric Power Corporation Fund (*13)		Developing electric enterprises		KOREA			98.09	%		W	51,500				50,856
Energy Infra Asset Management Co., Ltd. (*3)		Asset management		KOREA			9.90	%			297				259
Daegu clean Energy Co., Ltd.		Renewable power generation		KOREA			28.00	%			140				140
YaksuESS Co.,Ltd		Installing ESS related equipment		KOREA			29.00	%			210				196
Nepal Water & Energy Development Company Private Limited (*14)		Construction and operation of utility plant		NEPAL			52.77	%			18,568				18,667
											2,134,911				4,092,252
<Joint ventures>
KEPCO-Uhde Inc. (*7)		Power generation		KOREA			52.8	%			11,355				301
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				28,239
Shuweihat Asia Power Investment B.V.		Holding company		NETHERLANDS			49.00	%			46,037				—
Shuweihat Asia Operation & Maintenance Company (*7)		Maintenance of utility plant		CAYMAN			55.00	%			30				450
Waterbury Lake Uranium L.P.		Resources development		CANADA			36.97	%			26,602				21,314
ASM-BG Investicii AD		Power generation		BULGARIA			50.00	%			16,101				21,488
RES Technology AD		Power generation		BULGARIA			50.00	%			15,595				13,582
KV Holdings, Inc.		Power generation		PHILIPPINES			40.00	%			2,103				2,098
KEPCO SPC Power Corporation (*7)		Construction and operation of utility plant		PHILIPPINES			75.20	%			94,579				245,367
Canada Korea Uranium Limited Partnership (*5)		Resources development		CANADA			12.50	%			5,404				—
Gansu Datang Yumen Wind Power Co., Ltd.		Power generation		CHINA			40.00	%			16,621				12,821
Datang Chifeng Renewable Power Co., Ltd.		Power generation		CHINA			40.00	%			121,928				166,535
Datang KEPCO Chaoyang Renewable Power Co., Ltd.		Power generation		CHINA			40.00	%			10,858				10,843
Rabigh Electricity Company		Power generation		SAUDI ARABIA			40.00	%			109,743				97,802
Rabigh Operation & Maintenance Company		Maintenance of utility plant		SAUDI ARABIA			40.00	%			70				4,427
Jamaica Public Service Company Limited		Power generation		JAMAICA			40.00	%			301,910				249,453
KW Nuclear Components Co., Ltd.		Manufacturing		KOREA			45.00	%			833				7,133
Busan Shinho Solar Power Co., Ltd.		Power generation		KOREA			25.00	%			2,100				3,814
GS Donghae Electric Power Co., Ltd.		Power generation		KOREA			34.00	%			204,000				205,948
Global Trade Of Power System Co., Ltd.		Exporting products and technology of small or medium business by proxy		KOREA			29.00	%			290				477
Expressway Solar-light Power Generation Co., Ltd.		Power generation		KOREA			29.00	%			1,856				2,343
KODE NOVUS I LLC		Power generation		USA			50.00	%			19,213				—
KODE NOVUS II LLC		Power generation		USA			50.00	%			12,756				—
Daejung Offshore Wind Power Co., Ltd.		Power generation		KOREA			49.90	%			4,990				3,015
Amman Asia Electric Power Company (*7)		Power generation		JORDAN			60.00	%			111,476				153,857
KAPES, Inc. (*7)		R&D		KOREA			51.00	%			5,629				4,758
Dangjin Eco Power Co., Ltd.		Power generation		KOREA			34.00	%			56,100				53,253
Honam Wind Power Co., Ltd.		Power generation		KOREA			29.00	%			3,480				4,451
Chun-cheon Energy Co., Ltd.		Power generation		KOREA			29.90	%			52,700				50,592
Yeonggwangbaeksu Wind Power Co., Ltd. (*3)		Power generation		KOREA			15.00	%			3,000				2,689
Nghi Son 2 Power Ltd.		Power generation		VIETNAM			50.00	%			1,788				229
Kelar S.A (*7)		Power generation		CHILE			65.00	%			4,180				—
PT. Tanjung Power Indonesia		Power generation		INDONESIA			35.00	%			746				1,946
Incheon New Power Co., Ltd.		Power generation		KOREA			29.00	%			461				563
Seokmun Energy Co., Ltd.		Power generation		KOREA			29.00	%			580				391
Daehan Wind Power PSC		Power generation		JORDAN			50.00	%			285				16
Barakah One Company (*16)		Power generation		UAE			18.00	%			118				116
Nawah Energy Company (*16)		Operation of utility plant		UAE			18.00	%			296				290

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(1) Investments in associates and joint ventures as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Investees		Key operation activities		Location				Percentage of ownership				Acquisition cost				Book value
MOMENTUM		International thermonuclear experimental reactor construction management			FRANCE				33.33	%		W	1				67
Daegu Green Power Co., Ltd. (*15)		Power generation			KOREA				29.00	%			46,225				47,528
													1,349,360				1,418,196
												W	3,484,271				5,510,448

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

(*9) As of December 31, 2016, 15.64% 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 Company’s percentage of ownership has decreased due to the acquisition 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%.

(*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.

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

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

(*15) The entity is reclassified from associates to joint ventures since the terms of the shareholders’ agreement had been amended.

(*16) The effective percentage of ownership is less than 20%, but the Company has joint control over the entity as decisions on the major activities require the unanimous consent of the parties that collectively control the entity.

(*17) Although the percentage of ownership temporarily decreased to 8.33% from the difference in timing of capital payment by shareholders, the Company can excercise significant influence by virtue of its right to appoint a director to the board of directors of the entity based on the shareholders’ agreement. The percentage of ownership is 25.00% at the time of completion of capital payment.

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(2) The fair value of associates which are actively traded on an open market and have a readily available market value as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won
Investees		March 31, 2017				Decembe 31, 2016
<Associates>
Korea Electric Power Industrial Development Co., Ltd.		W	42,307				45,474
Korea Gas Corporation			849,555				915,705
YTN Co., Ltd.			22,410				22,320
SPC Power Corporation			62,802				70,253
PT. Bayan Resources TBK			391,067				359,200

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(3) Changes in investments in associates and joint ventures for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won
March 31, 2017
Investees		Beginning balance				Acquisition				Disposal				Dividends received				Share of income (loss)				Other comprehensive income (loss)				Others				Ending balance
<Associates>
Korea Gas Corporation		W	1,933,877				—				—				—				106,973				(29,874	)			44				2,011,020
Korea Electric Power Industrial Development Co., Ltd.			20,475				—				—				(2,061	)			644				100				(15	)			19,143
YTN Co., Ltd.			38,156				—				—				(135	)			(1,261	)			750				12				37,522
Cheongna Energy Co., Ltd.			12,373				—				—				—				509				—				—				12,882
Gangwon Wind Power Co., Ltd.			13,069				—				—				(852	)			417				—				—				12,634
Hyundai Green Power Co., Ltd.			115,998				—				—				(8,888	)			5,956				—				—				113,066
Korea Power Exchange			223,238				—				—				—				9,433				—				—				232,671
AMEC Partners Korea Ltd.			225				—				—				—				(1	)			—				—				224
Hyundai Energy Co., Ltd.			1,031				—				—				—				(702	)			—				1				330
Ecollite Co., Ltd.			—				—				—				—				—				—				—				—
Taebaek Wind Power Co., Ltd.			4,750				—				—				—				208				—				—				4,958
Taeback Guinemi Wind Power Co., Ltd.			3,131				—				—				—				(17	)			—				—				3,114
Pyeongchang Wind Power Co., Ltd.			3,383				—				—				—				134				—				—				3,517
Daeryun Power Co., Ltd.			29,873				—				—				—				(300	)			—				—				29,573
Changjuk Wind Power Co., Ltd.			6,930				—				—				—				188				—				—				7,118
KNH Solar Co., Ltd.			2,073				—				—				—				(87	)			—				—				1,986
SPC Power Corporation			56,818				—				—				—				1,030				(7,027	)			(7	)			50,814
Gemeng International Energy Co., Ltd.			680,065				—				—				—				496				(28,396	)			—				652,165
PT. Cirebon Electric Power			96,658				—				—				—				(534	)			625				(7,393	)			89,356
KNOC Nigerian East Oil Co., Ltd.			—				—				—				—				—				884				(884	)			—
KNOC Nigerian West Oil Co., Ltd.			—				—				—				—				—				811				(811	)			—
PT Wampu Electric Power			23,188				—				—				—				(453	)			—				(1,756	)			20,979
PT. Bayan Resources TBK			402,667				—				—				—				—				—				—				402,667
S-Power Co., Ltd.			123,912				—				—				—				2,133				—				—				126,045
Pioneer Gas Power Limited			50,740				—				—				—				(6,459	)			(886	)			1				43,396
Eurasia Energy Holdings			—				—				—				—				—				—				—				—
Xe-Pian Xe-Namnoy Power Co., Ltd.			51,544				8,364				—				—				(1,427	)			(4,795	)			—				53,686
Hadong Mineral Fiber Co., Ltd.			—				—				—				—				(20	)			—				32				12
Green Biomass Co., Ltd.			47				—				—				—				(41	)			—				—				6
PT. Mutiara Jawa			—				—				—				—				—				—				—				—
Samcheok Eco Materials Co., Ltd.			—				—				—				—				—				—				—				—
Noeul Green Energy Co., Ltd.			1,217				—				—				—				(128	)			—				—				1,089
Naepo Green Energy Co., Ltd.			25,438				—				—				—				(394	)			—				—				25,044
Goseong Green Energy Co., Ltd.			2,663				—				—				—				(20	)			—				—				2,643
Gangneung Eco Power Co., Ltd.			2,646				—				—				—				(19	)			—				—				2,627
Shin Pyeongtaek Power Co., Ltd.			—				—				—				—				—				—				—				—
Heang Bok Do Si Photovoltaic Power Co., Ltd.			181				—				—				—				(2	)			—				—				179
DS POWER Co., Ltd.			7,190				—				—				—				578				—				12				7,780
Dongducheon Dream Power Co., Ltd.			46,876				—				—				—				2,705				—				—				49,581
KS Solar Co., Ltd.			604				—				(613	)			—				—				9				—				—
Yeongwol Energy Station Co., Ltd. (*1)			—				—				—				—				—				—				—				—
Jinbhuvish Power Generation Pvt. Ltd.			—				—				—				—				—				—				—				—
SE Green Energy Co., Ltd.			3,525				—				—				—				(11	)			—				—				3,514
Daegu Photovoltaic Co., Ltd.			1,700				—				—				—				124				—				—				1,824
Jeongam Wind Power Co., Ltd.			4,000				—				—				—				(60	)			—				—				3,940
Korea Power Engineering Service Co., Ltd.			2,810				—				—				—				(60	)			—				16				2,766
Busan Green Energy Co., Ltd.			13,803				—				—				—				(134	)			—				—				13,669
Jungbu Bio Energy Co., Ltd.			—				—				—				—				—				—				—				—
Korea Electric Vehicle Charging Service			1,103				—				—				—				(118	)			—				—				985
Ulleungdo Natural Energy Co., Ltd.			6,894				—				—				—				(128	)			—				—				6,766
Korea Nuclear Partners Co., Ltd.			248				—				—				—				24				—				—				272
Tamra Offshore Wind Power Co., Ltd.			7,015				—				—				—				1,550				—				—				8,565

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(3) Changes in investments in associates and joint ventures for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won
March 31, 2017
Investees		Beginning balance				Acquisition				Disposal				Dividends received				Share of income (loss)				Other comprehensive income (loss)				Others				Ending balance
Korea Electric Power Corporation Fund		W	50,856				—				—				—				(1,790	)			—				—				49,066
Energy Infra Asset Management Co., Ltd.			259				—				—				—				70				—				—				329
Daegu clean Energy Co., Ltd.			140				—				—				—				(18	)			—				—				122
YaksuESS Co.,Ltd			196				—				—				—				(3	)			—				—				193
Nepal Water & Energy Development Company Private Limited			18,667				—				—				—				(165	)			(1,312	)			—				17,190
Gwangyang Green Energy Co., Ltd.			—				2,000				—				—				(9	)			—				1				1,992
			4,092,252				10,364				(613	)			(11,936	)			118,811				(69,111	)			(10,747	)			4,129,020
<Joint ventures>
KEPCO-Uhde Inc.			301				—				—				—				(15	)			—				—				286
Eco Biomass Energy Sdn. Bhd.			—				—				—				—				—				—				—				—
Datang Chaoyang Renewable Power Co., Ltd.			28,239				—				—				—				618				(1,812	)			—				27,045
Shuweihat Asia Power Investment B.V.			—				—				—				(566	)			3,790				17,301				(547	)			19,978
Shuweihat Asia Operation & Maintenance Company			450				—				—				—				240				(50	)			—				640
Waterbury Lake Uranium L.P.			21,314				—				—				—				—				(1,343	)			(560	)			19,411
ASM-BG Investicii AD			21,488				—				—				—				118				(1,250	)			—				20,356
RES Technology AD			13,582				—				—				—				(220	)			(769	)			—				12,593
KV Holdings, Inc.			2,098				—				—				—				(210	)			(166	)			—				1,722
KEPCO SPC Power Corporation			245,367				—				—				—				17,423				(22,289	)			39				240,540
Canada Korea Uranium Limited partnership			—				—				—				—				—				—				—				—
Gansu Datang Yumen Wind Power Company Ltd.			12,821				—				—				—				(333	)			(802	)			—				11,686
Datang Chifeng Renewable Power Co., Ltd.			166,535				—				—				—				2,774				(10,661	)			—				158,648
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			10,843				—				—				—				262				(697	)			—				10,408
Rabigh Electricity Company			97,802				—				—				—				5,454				(12,949	)			—				90,307
Rabigh Operation & Maintenance Company			4,427				—				—				—				562				(356	)			—				4,633
Jamaica Public Service Company Limited			249,453				—				—				—				—				(19,073	)			—				230,380
KW Nuclear Components Co., Ltd.			7,133				—				—				(208	)			(16	)			—				—				6,909
Busan Shinho Solar Power Co., Ltd.			3,814				—				—				(63	)			124				—				—				3,875
GS Donghae Electric Power Co., Ltd.			205,948				—				—				—				4,802				—				10				210,760
Global Trade Of Power System Co., Ltd.			477				—				—				—				(7	)			—				—				470
Expressway Solar-light Power Generation Co., Ltd.			2,343				—				—				—				(182	)			—				—				2,161
KODE NOVUS I LLC			—				—				—				—				—				—				—				—
KODE NOVUS II LLC			—				—				—				—				—				—				—				—
Daejung Offshore Wind Power Co., Ltd.			3,015				200				—				—				(58	)			—				—				3,157
Amman Asia Electric Power Company			153,857				—				—				—				4,908				(10,655	)			—				148,110
KAPES, Inc.			4,758				—				—				—				719				—				—				5,477
Dangjin Eco Power Co., Ltd.			53,253				—				—				—				(192	)			—				—				53,061
Honam Wind Power Co., Ltd.			4,451				—				—				(487	)			297				—				—				4,261
Chun-cheon Energy Co., Ltd.			50,592				—				—				—				(375	)			—				—				50,217

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(3) Changes in investments in associates and joint ventures for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won
March 31, 2017
Investees		Beginning balance				Acquisition				Disposal				Dividends received				Share of income (loss)				Other comprehensive income (loss)				Others				Ending balance
Yeonggwangbaeksu Wind Power Co., Ltd.		W	2,689				—				—				—				168				—				—				2,857
Nghi Son 2 Power Ltd.			229				334				—				—				(218	)			(9	)			—				336
Kelar S.A			—				73,880				—				—				—				—				(3,359	)			70,521
PT. Tanjung Power Indonesia			1,946				—				—				—				(221	)			—				(1,725	)			—
Incheon New Power Co., Ltd.			563				—				—				—				27				—				—				590
Seokmun Energy Co., Ltd.			391				14,790				—				—				1,024				(176	)			—				16,029
Daehan Wind Power PSC			16				—				—				—				(19	)			1				2				—
Barakah One Company			116				—				—				—				—				—				(7	)			109
Nawah Energy Company			290				—				—				—				—				—				(16	)			274
MOMENTUM			67				—				—				—				105				(7	)			—				165
Daegu Green Power Co., Ltd.			47,528				—				—				—				407				—				—				47,935
Yeonggwang Wind Power Co., Ltd			—				15,375				—				—				(85	)			—				—				15,290
Chester Solar IV SpA			—				1,675				—				—				—				—				—				1,675
			1,418,196				106,254				—				(1,324	)			41,671				(65,762	)			(6,163	)			1,492,872
		W	5,510,448				116,618				(613	)			(13,260	)			160,482				(134,873	)			(16,910	)			5,621,892

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(3) Changes in investments in associates and joint ventures for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Investees		Beginning balance				Acquisition				Disposal				Dividends received				Share of income (loss)				Other comprehensive income (loss)				Others				Ending balance
<Associates>
Daegu Green Power Co., Ltd.		W	80,267				3,347				(34,422	)			—				(1,814	)			148				(47,526	)			—
Korea Gas Corporation			2,102,813				—				—				(3,213	)			(146,308	)			(14,551	)			(4,864	)			1,933,877
Korea Electric Power Industrial Development Co., Ltd.			18,994				—				—				(1,598	)			4,491				—				(1,412	)			20,475
YTN Co., Ltd.			38,365				—				—				—				(227	)			32				(14	)			38,156
Cheongna Energy Co., Ltd.			19,490				—				—				—				(7,117	)			—				—				12,373
Gangwon Wind Power Co., Ltd.			12,890				—				—				(1,136	)			1,270				45				—				13,069
Hyundai Green Power Co., Ltd.			113,664				—				—				(8,888	)			11,222				—				—				115,998
Korea Power Exchange			208,735				—				—				—				15,847				—				(1,344	)			223,238
AMEC Partners Korea Ltd.			230				—				—				—				(5	)			—				—				225
Hyundai Energy Co., Ltd.			6,990				—				—				—				(21,163	)			—				15,204				1,031
Ecollite Co., Ltd.			—				—				—				—				—				—				—				—
Taebaek Wind Power Co., Ltd.			4,956				—				—				—				(206	)			—				—				4,750
Taeback Guinemi Wind Power Co., Ltd.			2,587				570				—				—				(26	)			—				—				3,131
Pyeongchang Wind Power Co., Ltd.			3,402				—				—				—				(19	)			—				—				3,383
Daeryun Power Co., Ltd.			36,156				—				—				—				(6,282	)			(1	)			—				29,873
JinanJangsu Wind Power Co., Ltd.			77				—				(64	)			—				(13	)			—				—				—
Changjuk Wind Power Co., Ltd.			6,143				—				—				(190	)			977				—				—				6,930
KNH Solar Co., Ltd.			1,924				—				—				—				144				5				—				2,073
SPC Power Corporation			58,033				—				—				(7,151	)			6,416				(477	)			(3	)			56,818
Gemeng International Energy Co., Ltd.			728,396				—				—				(16,476	)			26,714				(58,493	)			(76	)			680,065
PT. Cirebon Electric Power			60,574				—				—				(1,242	)			31,511				2,568				3,247				96,658
KNOC Nigerian East Oil Co., Ltd.			—				—				—				—				(1,346	)			(398	)			1,744				—
KNOC Nigerian West Oil Co., Ltd.			—				—				—				—				(973	)			(356	)			1,329				—
Dolphin Property Limited			61				—				—				(35	)			—				(69	)			43				—
PT Wampu Electric Power			18,963				—				—				—				3,493				(3	)			735				23,188
PT. Bayan Resources TBK (*2)			525,066				—				—				—				(23,257	)			208				(99,350	)			402,667
S-Power Co., Ltd.			130,908				—				—				—				(7,006	)			—				10				123,912
Pioneer Gas Power Limited			51,187				—				—				—				(698	)			251				—				50,740
Eurasia Energy Holdings			—				—				—				—				—				—				—				—
Xe-Pian Xe-Namnoy Power Co., Ltd.			31,863				16,402				—				—				1,576				1,703				—				51,544
Busan Solar Co., Ltd.			925				—				(887	)			—				(38	)			—				—				—
Hadong Mineral Fiber Co., Ltd.			—				—				—				—				—				—				—				—
Green Biomass Co., Ltd.			—				—				—				—				(138	)			—				185				47
PT. Mutiara Jawa			—				—				—				—				—				—				—				—
Samcheok Eco Materials Co., Ltd.			—				—				—				—				—				—				—				—
Noeul Green Energy Co., Ltd.			295				1,340				—				—				(418	)			—				—				1,217
Naepo Green Energy Co., Ltd.			26,746				—				—				—				(1,308	)			—				—				25,438
Goseong Green Energy Co., Ltd.			2,670				—				—				—				71				—				(78	)			2,663
Gangneung Eco Power Co., Ltd.			2,688				—				—				—				56				—				(98	)			2,646
Shin Pyeongtaek Power Co., Ltd.			—				—				—				—				—				—				—				—
Heang Bok Do Si Photovoltaic Power Co., Ltd.			189				—				—				—				(10	)			—				2				181
DS POWER Co., Ltd.			10,960				—				—				—				(3,738	)			—				(32	)			7,190
Dongducheon Dream Power Co., Ltd.			55,667				—				—				—				(8,757	)			—				(34	)			46,876
KS Solar Co., Ltd.			618				—				—				—				(14	)			—				—				604
Yeongwol Energy Station Co., Ltd. (*1)			1,290				—				—				—				85				25				(1,400	)			—
Jinbhuvish Power Generation Pvt. Ltd. (*3)			8,350				—				—				—				(49	)			(198	)			(8,103	)			—
SE Green Energy Co., Ltd.			3,575				—				—				—				(50	)			—				—				3,525
Daegu Photovoltaic Co., Ltd.			1,886				—				—				(411	)			225				—				—				1,700
Jeongam Wind Power Co., Ltd.			702				3,900				—				—				(602	)			—				—				4,000
Korea Power Engineering Service Co., Ltd.			1,805				—				—				—				1,005				—				—				2,810
Busan Green Energy Co., Ltd.			14,512				—				—				—				(709	)			—				—				13,803
Jungbu Bio Energy Co., Ltd.			904				—				—				—				(904	)			—				—				—
Korea Electric Vehicle Charging Service			1,446				—				—				—				(343	)			—				—				1,103

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(3) Changes in investments in associates and joint ventures for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Investees		Beginning balance				Acquisition				Disposal				Dividends received				Share of income (loss)				Other comprehensive income (loss)				Others				Ending balance
Ulleungdo Natural Energy Co., Ltd.		W	7,417				—				—				—				(516	)			—				(7	)			6,894
Korea Nuclear Partners Co., Ltd.			289				—				—				—				(41	)			—				—				248
Tamra Offshore Wind Power Co., Ltd.			—				8,910				—				—				(1,895	)			—				—				7,015
Korea Electric Power Corporation Fund			—				51,500				—				—				(644	)			—				—				50,856
Energy Infra Asset Management Co., Ltd.			—				297				—				—				(38	)			—				—				259
Daegu clean Energy Co., Ltd.			—				140				—				—				—				—				—				140
YaksuESS Co.,Ltd			—				210				—				—				(14	)			—				—				196
Nepal Water & Energy Development Company Private Limited			—				—				—				—				—				—				18,667				18,667
			4,405,668				86,616				(35,373	)			(40,340	)			(131,583	)			(69,561	)			(123,175	)			4,092,252
<Joint ventures>
KEPCO-Uhde Inc. (*4)			8,549				—				—				—				(159	)			—				(8,089	)			301
Eco Biomass Energy Sdn. Bhd.			—				—				—				—				—				—				—				—
Datang Chaoyang Renewable Power Co., Ltd.			27,640				—				—				—				1,417				(818	)			—				28,239
Shuweihat Asia Power Investment B.V.			20,474				—				(14,154	)			(2,957	)			6,131				(9,494	)			—				—
Shuweihat Asia Operation & Maintenance Company			486				—				—				(931	)			941				(46	)			—				450
Waterbury Lake Uranium L.P.			20,299				—				—				—				—				1,138				(123	)			21,314
ASM-BG Investicii AD			20,203				—				—				—				1,508				(223	)			—				21,488
RES Technology AD			13,789				—				—				—				(68	)			(139	)			—				13,582
KV Holdings, Inc.			2,010				—				—				(302	)			429				(39	)			—				2,098
KEPCO SPC Power Corporation			208,524				—				—				(5,955	)			48,132				(5,308	)			(26	)			245,367
Canada Korea Uranium Limited Partnership			—				—				—				—				—				—				—				—
Gansu Datang Yumen Wind Power Co., Ltd.			16,107				—				—				—				(2,836	)			(450	)			—				12,821
Datang Chifeng Renewable Power Co., Ltd.			171,224				—				—				(7,384	)			7,455				(4,760	)			—				166,535
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			10,580				—				—				(440	)			1,002				(299	)			—				10,843
Rabigh Electricity Company			59,368				—				—				—				18,961				19,473				—				97,802
Rabigh Operation & Maintenance Company			3,586				—				—				(1,934	)			2,253				229				293				4,427
Jamaica Public Service Company Limited			241,918				—				—				—				—				7,535				—				249,453
KW Nuclear Components Co., Ltd.			4,985				—				—				(2,191	)			4,344				—				(5	)			7,133
Busan Shinho Solar Power Co., Ltd.			3,678				—				—				(185	)			321				—				—				3,814
GS Donghae Electric Power Co., Ltd.			200,379				—				—				—				5,575				—				(6	)			205,948
Global Trade Of Power System Co., Ltd.			426				—				—				—				51				—				—				477
Expressway Solar-light Power Generation Co., Ltd.			2,100				—				—				—				243				—				—				2,343
KODE NOVUS I LLC			—				—				—				—				—				—				—				—
KODE NOVUS II LLC			—				258				—				—				(260	)			—				2				—
Daejung Offshore Wind Power Co., Ltd.			3,352				—				—				—				(337	)			—				—				3,015
Amman Asia Electric Power Company			137,668				—				—				(12,684	)			17,811				11,062				—				153,857
KAPES, Inc.			4,501				—				—				—				311				—				(54	)			4,758
Dangjin Eco Power Co., Ltd.			48,281				5,100				—				—				(696	)			(26	)			594				53,253
Honam Wind Power Co., Ltd.			3,926				—				—				(104	)			629				—				—				4,451
Nepal Water & Energy Development Company Private Limited			17,765				—				—				—				359				543				(18,667	)			—
Chun-cheon Energy Co., Ltd.			31,976				19,832				—				—				(1,121	)			(95	)			—				50,592
Yeonggwangbaeksu Wind Power Co., Ltd.			2,668				—				—				—				16				—				5				2,689
Nghi Son 2 Power Ltd.			269				716				—				—				(740	)			(16	)			—				229

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(3) Changes in investments in associates and joint ventures for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Investees		Beginning balance				Acquisition				Disposal				Dividends received				Share of income (loss)				Other comprehensive income (loss)				Others				Ending balance
Kelar S.A		W	—				—				—				—				—				—				—				—
PT. Tanjung Power Indonesia			617				—				—				—				1,337				—				(8	)			1,946
Incheon New Power Co., Ltd.			514				—				—				—				41				8				—				563
Seokmun Energy Co., Ltd.			—				—				—				—				(197	)			793				(205	)			391
Daehan Wind Power PSC			—				285				—				—				(261	)			(8	)			—				16
Barakah One Company			—				118				—				—				—				—				(2	)			116
Nawah Energy Company			—				296				—				—				—				—				(6	)			290
MOMENTUM			—				1				—				—				65				—				1				67
Daegu Green Power Co., Ltd.			—				—				—				—				—				—				47,528				47,528
			1,287,862				26,606				(14,154	)			(35,067	)			112,657				19,060				21,232				1,418,196
		W	5,693,530				113,222				(49,527	)			(75,407	)			(18,926	)			(50,501	)			(101,943	)			5,510,448

(*1) ‘Others’ include W1,400 million of assets held-for-sale (note 41).

(*2) It was determined that there is objective evidence of impairment due to prolonged operating losses. As a result, the Company recognized an impairment loss of W99,338 million in impairment loss on investments in associates and joint ventures for the year ended December 31, 2016.

(*3) Due to discontinuation of operations during the year ended December 31, 2016, the Company recognized an impairment loss of W8,103 million in impairment loss on investments in associates and joint ventures for the year ended December 31, 2016.

(*4) It was determined that there is objective evidence of impairment due to prolonged operating losses. As a result, the Company recognized an impairment loss of W8,099 million in impairment loss on investments in associates and joint ventures for the year ended December 31, 2016.

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(4) Summary of financial information of associates and joint ventures as of and for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won
March 31, 2017
Investees		Total assets				Total liabilities				Sales				Profit (loss) for the period
<Associates>
Korea Gas Corporation			W  39,117,828				29,377,132				7,718,167				496,987
Korea Electric Power Industrial Development Co., Ltd.			143,147				77,137				74,398				6,527
YTN Co., Ltd.			306,468				131,252				24,925				(7,315	)
Cheongna Energy Co., Ltd.			472,836				449,053				22,226				1,156
Gangwon Wind Power Co., Ltd.			85,556				1,659				6,759				2,982
Hyundai Green Power Co., Ltd.			1,126,042				736,160				115,324				20,543
Korea Power Exchange			264,966				32,295				27,785				9,433
AMEC Partners Korea Ltd.			1,211				33				16				(7	)
Hyundai Energy Co., Ltd.			501,057				495,823				27,640				(1,539	)
Ecollite Co., Ltd.			2,130				326				—				(17	)
Taebaek Wind Power Co., Ltd.			43,788				23,954				2,329				871
Taeback Guinemi Wind Power Co., Ltd.			12,461				4				—				(40	)
Pyeongchang Wind Power Co., Ltd.			76,709				62,642				2,330				560
Daeryun Power Co., Ltd.			794,508				647,701				47,712				(1,041	)
Changjuk Wind Power Co., Ltd.			38,290				14,563				2,230				994
KNH Solar Co., Ltd.			25,047				17,692				542				(234	)
SPC Power Corporation			175,762				42,042				18,300				12,456
Gemeng International Energy Co., Ltd.			5,425,621				3,507,490				279,056				3,347
PT. Cirebon Electric Power			929,033				604,102				43,990				(81	)
KNOC Nigerian East Oil Co., Ltd.			251,689				326,102				—				(2,549	)
KNOC Nigerian West Oil Co., Ltd.			153,087				221,350				—				(2,322	)
PT Wampu Electric Power			199,608				154,007				4,573				1,353
PT. Bayan Resources TBK			886,174				690,379				233,784				71,895
S-Power Co., Ltd.			882,495				621,348				171,505				4,299
Pioneer Gas Power Limited			330,478				280,027				4,293				(937	)
Eurasia Energy Holdings			571				1,018				—				—
Xe-Pian Xe-Namnoy Power Co., Ltd.			802,530				572,676				—				(5,820	)
Hadong Mineral Fiber Co., Ltd.			521				378				—				(90	)
Green Biomass Co., Ltd.			9,073				9,029				588				(273	)
PT. Mutiara Jawa			25,418				31,416				2,638				163
Samcheok Eco Materials Co., Ltd.			23,718				176				—				(348	)
Noeul Green Energy Co., Ltd.			124,484				120,728				5,356				(440	)
Naepo Green Energy Co., Ltd.			101,737				1,560				2,448				(1,576	)
Goseong Green Energy Co., Ltd.			794,067				550,080				—				(1,754	)
Gangneung Eco Power Co., Ltd.			179,373				10,254				—				(709	)
Shin Pyeongtaek Power Co., Ltd.			75,599				81,925				—				(884	)
Heang Bok Do Si Photovoltaic Power Co., Ltd.			2,870				2,236				83				(7	)
DS POWER Co., Ltd.			726,671				614,403				111,384				3,817
Dongducheon Dream Power Co., Ltd.			1,664,395				1,413,443				269,561				7,781
Jinbhuvish Power Generation Pvt. Ltd.			67,982				14,039				—				—
SE Green Energy Co., Ltd.			7,357				—				—				(24	)
Daegu Photovoltaic Co., Ltd.			18,967				12,677				1,001				425
Jeongam Wind Power Co., Ltd.			36,042				26,192				—				(137	)
Korea Power Engineering Service Co., Ltd.			13,089				3,551				4,379				686
Busan Green Energy Co., Ltd.			155,450				108,315				—				(461	)
Jungbu Bio Energy Co., Ltd.			10,893				12,051				—				(453	)
Korea Electric Vehicle Charging Service			9,834				6,314				799				(421	)
Ulleungdo Natural Energy Co., Ltd.			24,646				1,976				—				(429	)
Korea Nuclear Partners Co., Ltd.			1,417				478				212				83
Tamra Offshore Wind Power Co., Ltd.			136,565				104,841				—				(170	)
Korea Electric Power Corporation Fund			50,208				190				92				(1,825	)
Energy Infra Asset Management Co., Ltd.			3,378				52				1,431				720
Daegu clean Energy Co., Ltd.			452				16				—				(64	)
YaksuESS Co., Ltd			7,260				6,599				—				(12	)
Nepal Water & Energy Development Company Private Limited			40,515				10,064				—				(186	)
Gwangyang Green Energy Co., Ltd.			9,892				25				372				(44	)

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(4) Summary of financial information of associates and joint ventures as of and for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won
March 31, 2017
Investees		Total assets				Total liabilities				Sales				Profit (loss) for the period
<Joint ventures>
KEPCO-Uhde Inc.		W	582				20				—				(30	)
Eco Biomass Energy Sdn. Bhd.			—				—				—				—
Datang Chaoyang Renewable Power Co., Ltd.			135,477				67,863				4,919				1,596
Shuweihat Asia Power Investment B.V.			42,057				—				—				643
Shuweihat Asia Operation & Maintenance Company			1,360				12				593				436
Waterbury Lake Uranium L.P.			53,350				848				—				—
ASM-BG Investicii AD			76,246				35,533				2,325				236
RES Technology AD			65,404				40,218				1,441				(383	)
KV Holdings, Inc.			4,306				1				—				—
KEPCO SPC Power Corporation			428,938				109,071				51,640				24,148
Canada Korea Uranium Limited Partnership			267				135				—				(59	)
Gansu Datang Yumen Wind Power Co., Ltd.			83,099				53,883				1,610				(837	)
Datang Chifeng Renewable Power Co., Ltd.			764,743				368,001				26,081				7,030
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			59,538				33,517				2,218				656
Rabigh Electricity Company			2,508,406				2,096,970				69,766				12,067
Rabigh Operation & Maintenance Company			20,652				9,070				6,298				1,485
Jamaica Public Service Company Limited			1,221,294				690,077				227,378				6,615
KW Nuclear Components Co., Ltd.			25,433				11,504				—				(36	)
Busan Shinho Solar Power Co., Ltd.			47,215				31,713				2,016				499
GS Donghae Electric Power Co., Ltd.			2,024,221				1,404,338				41,993				14,029
Global Trade Of Power System Co., Ltd.			2,515				895				557				(4	)
Expressway Solar-light Power Generation Co., Ltd.			19,084				11,633				332				(398	)
KODE NOVUS I LLC			4,723				108,816				(8	)			(240	)
KODE NOVUS II LLC			2,866				47,254				—				(984	)
Daejung Offshore Wind Power Co., Ltd.			6,363				37				—				(116	)
Amman Asia Electric Power Company			795,236				548,239				4,601				8,432
KAPES, Inc.			117,263				106,525				30,581				1,409
Dangjin Eco Power Co., Ltd.			149,692				1,330				—				(537	)
Honam Wind Power Co., Ltd.			39,891				25,310				2,113				1,023
Chun-cheon Energy Co., Ltd.			612,774				444,835				—				(1,125	)
Yeonggwangbaeksu Wind Power Co., Ltd.			99,891				80,885				3,835				1,115
Nghi Son 2 Power Ltd.			993				324				—				(427	)
Kelar S.A			578,181				535,538				23,700				8,350
PT. Tanjung Power Indonesia			256,648				257,842				70,999				(632	)
Incheon New Power Co., Ltd.			7,709				5,673				811				95
Seokmun Energy Co., Ltd.			257,999				202,728				12,396				3,794
Daehan Wind Power PSC			1,172				1,276				—				(142	)
Barakah One Company			15,808,573				15,807,966				—				—
Nawah Energy Company			1,519				—				—				—
MOMENTUM			4,610				4,116				1,855				289
Daegu Green Power Co., Ltd.			633,101				542,278				84,231				1,401
Yeonggwang Wind Power Co., Ltd.			51,512				14,782				—				(208	)
Chester Solar IV SpA			1				70				—				—

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(4) Summary of financial information of associates and joint ventures as of and for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Investees		Total assets				Total liabilities				Sales				Profit (loss) for the period
<Associates>
Korea Gas Corporation		W	39,927,836				30,541,350				21,108,116				(673,558	)
Korea Electric Power Industrial Development Co., Ltd.			144,346				73,742				304,067				17,187
YTN Co., Ltd.			304,536				126,324				130,690				2,051
Cheongna Energy Co., Ltd.			469,843				447,216				46,484				(16,127	)
Gangwon Wind Power Co., Ltd.			102,550				15,753				22,774				8,133
Hyundai Green Power Co., Ltd.			1,151,975				751,981				469,547				38,743
Korea Power Exchange			255,533				32,295				101,222				15,087
AMEC Partners Korea Ltd.			1,216				32				103				(25	)
Hyundai Energy Co., Ltd.			505,979				499,205				61,813				(45,800	)
Ecollite Co., Ltd.			2,157				336				—				(105	)
Taebaek Wind Power Co., Ltd.			43,162				24,162				5,741				(2,796	)
Taeback Guinemi Wind Power Co., Ltd.			12,523				1				—				(106	)
Pyeongchang Wind Power Co., Ltd.			75,440				61,909				3,997				(45	)
Daeryun Power Co., Ltd.			793,283				644,930				249,558				(32,291	)
Changjuk Wind Power Co., Ltd.			37,878				15,162				5,782				1,739
KNH Solar Co., Ltd.			25,878				18,199				4,006				638
SPC Power Corporation			191,562				42,042				73,674				42,617
Gemeng International Energy Co., Ltd.			5,822,879				3,821,905				1,233,972				66,370
PT. Cirebon Electric Power			988,975				637,491				265,813				114,653
KNOC Nigerian East Oil Co., Ltd.			272,964				358,211				—				(7,051	)
KNOC Nigerian West Oil Co., Ltd.			165,396				243,713				—				(6,562	)
PT Wampu Electric Power			222,004				171,595				19,260				7,550
PT. Bayan Resources TBK			945,436				845,963				593,441				402
S-Power Co., Ltd.			886,841				629,992				453,606				(14,885	)
Pioneer Gas Power Limited			345,791				276,978				14,353				396
Eurasia Energy Holdings			618				1,103				—				—
Xe-Pian Xe-Namnoy Power Co., Ltd.			772,699				543,472				—				6,458
Hadong Mineral Fiber Co., Ltd.			—				20				—				—
Green Biomass Co., Ltd.			9,336				9,001				2,892				(972	)
PT. Mutiara Jawa			28,104				34,671				7,175				(1,361	)
Samcheok Eco Materials Co., Ltd.			24,143				254				—				(1,945	)
Noeul Green Energy Co., Ltd.			115,062				110,866				203				(1,155	)
Naepo Green Energy Co., Ltd.			104,029				2,276				4,912				(5,230	)
Goseong Green Energy Co., Ltd.			356,546				110,753				—				(5,489	)
Gangneung Eco Power Co., Ltd.			176,805				6,503				—				(3,494	)
Shin Pyeongtaek Power Co., Ltd.			54,174				60,518				—				(3,291	)
Heang Bok Do Si Photovoltaic Power Co., Ltd.			2,937				2,297				427				(47	)
DS POWER Co., Ltd.			726,699				618,793				276,324				(10,031	)
Dongducheon Dream Power Co., Ltd.			1,670,945				1,427,773				946,379				(27,936	)
KS Solar Co., Ltd.			27,213				24,035				4,152				(79	)
Jinbhuvish Power Generation Pvt. Ltd.			70,273				14,513				—				(950	)
SE Green Energy Co., Ltd.			7,381				—				—				(103	)
Daegu Photovoltaic Co., Ltd.			18,909				13,047				3,317				739
Jeongam Wind Power Co., Ltd.			13,199				3,199				—				(1,496	)
Korea Power Engineering Service Co., Ltd.			13,401				3,713				27,394				3,463
Busan Green Energy Co., Ltd.			147,843				100,247				—				(2,444	)
Jungbu Bio Energy Co., Ltd.			11,340				12,037				—				(5,489	)
Korea Electric Vehicle Charging Service			10,545				6,604				5,177				(1,225	)
Ulleungdo Natural Energy Co., Ltd.			24,836				1,738				—				(1,730	)
Korea Nuclear Partners Co., Ltd.			1,363				507				372				(140	)
Tamra Offshore Wind Power Co., Ltd.			127,880				101,900				983				(6,307	)
Korea Electric Power Corporation Fund			51,970				128				3				(647	)
Energy Infra Asset Management Co., Ltd.			2,779				160				32				(381	)
Daegu clean Energy Co., Ltd.			500				—				—				—
YaksuESS Co., Ltd			6,474				5,801				—				(48	)
Nepal Water & Energy Development Company Private Limited			43,788				10,477				—				(703	)

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(4) Summary of financial information of associates and joint ventures as of and for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Investees		Total assets				Total liabilities				Sales				Profit (loss) for the period
<Joint ventures>
KEPCO-Uhde Inc.		W	624				33				—				(16,855	)
Eco Biomass Energy Sdn. Bhd.			—				—				—				—
Datang Chaoyang Renewable Power Co., Ltd.			142,684				72,086				18,628				3,462
Shuweihat Asia Power Investment B.V.			282				4				—				12,380
Shuweihat Asia Operation & Maintenance Company			1,016				13				2,388				1,723
Waterbury Lake Uranium L.P.			56,181				47				—				—
ASM-BG Investicii AD			79,898				36,921				12,604				3,105
RES Technology AD			68,553				41,389				7,798				(139	)
KV Holdings, Inc.			5,245				1				—				1,072
KEPCO SPC Power Corporation			448,069				121,783				165,046				63,689
Canada Korea Uranium Limited Partnership			285				144				—				(59	)
Gansu Datang Yumen Wind Power Co., Ltd.			89,517				57,464				4,263				(6,815	)
Datang Chifeng Renewable Power Co., Ltd.			813,804				397,344				99,795				19,042
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			62,600				35,493				8,742				2,505
Rabigh Electricity Company			2,691,654				2,258,772				278,431				37,791
Rabigh Operation & Maintenance Company			25,032				13,965				25,607				4,870
Jamaica Public Service Company Limited			1,291,008				659,296				827,298				25,324
KW Nuclear Components Co., Ltd.			26,417				11,990				26,481				9,452
Busan Shinho Solar Power Co., Ltd.			47,789				32,533				6,770				1,247
GS Donghae Electric Power Co., Ltd.			1,952,297				1,346,568				19,851				16,396
Global Trade Of Power System Co., Ltd.			1,661				18				2,667				205
Expressway Solar-light Power Generation Co., Ltd.			20,790				12,710				3,395				960
KODE NOVUS I LLC			14,286				104,252				2,362				(50,151	)
KODE NOVUS II LLC			3,236				50,267				810				(22,582	)
Daejung Offshore Wind Power Co., Ltd.			6,076				34				—				(675	)
Amman Asia Electric Power Company			881,164				624,590				13,631				29,684
KAPES, Inc.			145,576				136,247				31,852				456
Dangjin Eco Power Co., Ltd.			149,926				1,001				—				(2,023	)
Honam Wind Power Co., Ltd.			41,614				26,375				6,776				2,171
Chun-cheon Energy Co., Ltd.			548,306				379,113				—				(3,684	)
Yeonggwangbaeksu Wind Power Co., Ltd.			99,773				81,881				11,208				(26	)
Nghi Son 2 Power Ltd.			757				302				—				(1,481	)
Kelar S.A			617,803				712,124				—				(4,109	)
PT. Tanjung Power Indonesia			203,051				197,491				122,583				3,821
Incheon New Power Co., Ltd.			7,902				5,961				2,985				168
Seokmun Energy Co., Ltd.			235,905				234,556				—				(543	)
Daehan Wind Power PSC			750				714				—				(523	)
Barakah One Company			17,117,338				17,116,680				—				—
Nawah Energy Company			1,645				—				—				—
MOMENTUM			2,749				2,547				2,886				194
Daegu Green Power Co., Ltd.			636,438				547,017				265,621				(3,981	)

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(5) Financial information of associates and joint ventures reconciled to the Company’s investments in consolidated financial statements as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won
March 31, 2017
Investees		Net assets				Percentage of ownership (*)				Share in net assets				Investment differential				Intercompany transaction				Others				Book value
<Associates>
Korea Gas Corporation		W	9,740,696				21.57	%			2,101,068				—				—				(90,048	)			2,011,020
Korea Electric Power Industrial Development Co., Ltd.			66,010				29.00	%			19,143				—				—				—				19,143
YTN Co., Ltd.			175,216				21.43	%			37,549				—				(27	)			—				37,522
Cheongna Energy Co., Ltd.			23,783				43.90	%			10,441				2,584				(143	)			—				12,882
Gangwon Wind Power Co., Ltd.			83,897				15.00	%			12,585				—				—				49				12,634
Hyundai Green Power Co., Ltd.			389,882				29.00	%			113,066				—				—				—				113,066
Korea Power Exchange			232,671				100.00	%			232,671				—				—				—				232,671
AMEC Partners Korea Ltd.			1,178				19.00	%			224				—				—				—				224
Hyundai Energy Co., Ltd.			5,234				46.30	%			2,423				—				(1,068	)			(1,025	)			330
Ecollite Co., Ltd.			1,804				36.10	%			651				—				—				(651	)			—
Taebaek Wind Power Co., Ltd.			19,834				25.00	%			4,959				—				—				(1	)			4,958
Taeback Guinemi Wind Power Co., Ltd.			12,457				25.00	%			3,114				—				—				—				3,114
Pyeongchang Wind Power Co., Ltd.			14,067				25.00	%			3,517				—				—				—				3,517
Daeryun Power Co., Ltd.			146,807				19.45	%			28,554				1,014				—				5				29,573
Changjuk Wind Power Co., Ltd.			23,727				30.00	%			7,118				—				—				—				7,118
KNH Solar Co., Ltd.			7,355				27.00	%			1,986				—				—				—				1,986
SPC Power Corporation			133,720				38.00	%			50,814				—				—				—				50,814
Gemeng International Energy Co., Ltd.			1,918,131				34.00	%			652,165				—				—				—				652,165
PT. Cirebon Electric Power			324,931				27.50	%			89,356				—				—				—				89,356
KNOC Nigerian East Oil Co., Ltd.			(74,413	)			14.63	%			(10,887	)			—				—				10,887				—
KNOC Nigerian West Oil Co., Ltd.			(68,263	)			14.63	%			(9,987	)			—				—				9,987				—
PT Wampu Electric Power			45,601				46.00	%			20,976				—				—				3				20,979
PT. Bayan Resources TBK			195,795				20.00	%			39,159				482,109				—				(118,601	)			402,667
S-Power Co., Ltd.			261,147				49.00	%			127,962				—				(1,917	)			—				126,045
Pioneer Gas Power Limited			50,451				40.00	%			20,180				23,147				—				69				43,396
Eurasia Energy Holdings			(447	)			40.00	%			(179	)			—				—				179				—
Xe-Pian Xe-Namnoy Power Co., Ltd.			229,854				25.00	%			57,464				(2,774	)			(714	)			(290	)			53,686
Hadong Mineral Fiber Co., Ltd.			143				25.00	%			36				—				—				(24	)			12
Green Biomass Co., Ltd.			44				14.00	%			6				—				—				—				6
PT. Mutiara Jawa			(5,998	)			29.00	%			(1,739	)			70				—				1,669				—
Samcheok Eco Materials Co., Ltd.			23,542				2.35	%			553				—				—				(553	)			—
Noeul Green Energy Co., Ltd.			3,756				29.00	%			1,089				—				—				—				1,089
Naepo Green Energy Co., Ltd.			100,177				25.00	%			25,044				—				—				—				25,044
Goseong Green Energy Co., Ltd.			243,987				1.12	%			2,721				—				(79	)			1				2,643
Gangneung Eco Power Co., Ltd.			169,119				1.61	%			2,725				—				(98	)			—				2,627
Shin Pyeongtaek Power Co., Ltd.			(6,326	)			40.00	%			(2,530	)			—				(3,409	)			5,939				—
Heang Bok Do Si Photovoltaic Power Co., Ltd.			634				28.00	%			178				—				—				1				179
DS POWER Co., Ltd.			112,268				14.44	%			16,211				—				(7,240	)			(1,191	)			7,780
Dongducheon Dream Power Co., Ltd.			250,952				33.61	%			84,345				—				(4,678	)			(30,086	)			49,581
Jinbhuvish Power Generation Pvt. Ltd.			53,943				5.16	%			2,783				5,450				—				(8,233	)			—
SE Green Energy Co., Ltd.			7,357				47.76	%			3,514				—				—				—				3,514
Daegu Photovoltaic Co., Ltd.			6,290				29.00	%			1,824				—				—				—				1,824
Jeongam Wind Power Co., Ltd.			9,850				40.00	%			3,940				—				—				—				3,940
Korea Power Engineering Service Co., Ltd.			9,538				29.00	%			2,766				—				—				—				2,766
Busan Green Energy Co., Ltd.			47,135				29.00	%			13,669				—				—				—				13,669
Jungbu Bio Energy Co., Ltd.			(1,158	)			18.87	%			(218	)			—				—				218				—
Korea Electric Vehicle Charging Service			3,520				28.00	%			985				—				—				—				985
Ulleungdo Natural Energy Co., Ltd.			22,670				29.85	%			6,767				—				—				(1	)			6,766
Korea Nuclear Partners Co., Ltd.			939				29.00	%			272				—				—				—				272
Tamra Offshore Wind Power Co., Ltd.			31,724				27.00	%			8,565				—				—				—				8,565
Korea Electric Power Corporation Fund			50,018				98.09	%			49,063				—				—				3				49,066
Energy Infra Asset Management Co., Ltd.			3,326				9.90	%			329				—				—				—				329
Daegu clean Energy Co., Ltd.			436				28.00	%			122				—				—				—				122

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(5) Financial information of associates and joint ventures reconciled to the Company’s investments in consolidated financial statements as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won
March 31, 2017
Investees		Net assets				Percentage of ownership (*)				Share in net assets				Investment differential				Intercompany transaction				Others				Book value
YaksuESS Co., Ltd		W	661				29.00	%			192				—				—				1				193
Nepal Water & Energy Development Company Private Limited			30,451				52.77	%			16,069				972				—				149				17,190
Gwangyang Green Energy Co., Ltd.			9,867				20.00	%			1,973				—				—				19				1,992
<Joint ventures>
KEPCO-Uhde Inc.			562				50.85	%			286				—				—				—				286
Eco Biomass Energy Sdn. Bhd.			—				61.53	%			—				—				—				—				—
Datang Chaoyang Renewable Power Co., Ltd.			67,614				40.00	%			27,046				—				—				(1	)			27,045
Shuweihat Asia Power Investment B.V.			42,057				49.00	%			20,608				—				—				(630	)			19,978
Shuweihat Asia Operation & Maintenance Company			1,348				55.00	%			741				—				—				(101	)			640
Waterbury Lake Uranium L.P.			52,502				36.97	%			19,410				—				—				1				19,411
ASM-BG Investicii AD			40,713				50.00	%			20,357				—				—				(1	)			20,356
RES Technology AD			25,186				50.00	%			12,593				—				—				—				12,593
KV Holdings, Inc.			4,305				40.00	%			1,722				—				—				—				1,722
KEPCO SPC Power Corporation			319,867				75.20	%			240,540				—				—				—				240,540
Canada Korea Uranium Limited Partnership			132				12.50	%			17				—				—				(17	)			—
Gansu Datang Yumen Wind Power Co., Ltd.			29,216				40.00	%			11,686				—				—				—				11,686
Datang Chifeng Renewable Power Co., Ltd.			396,742				40.00	%			158,697				—				—				(49	)			158,648
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			26,021				40.00	%			10,408				—				—				—				10,408
Rabigh Electricity Company			411,436				40.00	%			164,574				—				(74,228	)			(39	)			90,307
Rabigh Operation & Maintenance Company			11,582				40.00	%			4,633				—				—				—				4,633
Jamaica Public Service Company Limited			531,217				40.00	%			212,487				(80,161	)			—				98,054				230,380
KW Nuclear Components Co., Ltd.			13,929				45.00	%			6,268				90				—				551				6,909
Busan Shinho Solar Power Co., Ltd.			15,502				25.00	%			3,876				—				—				(1	)			3,875
GS Donghae Electric Power Co., Ltd.			619,883				34.00	%			210,760				—				—				—				210,760
Global Trade Of Power System Co., Ltd.			1,620				29.00	%			470				—				—				—				470
Expressway Solar-light Power Generation Co., Ltd.			7,451				29.00	%			2,161				—				—				—				2,161
KODE NOVUS I LLC			(104,093	)			50.00	%			(52,047	)			4,732				—				47,315				—
KODE NOVUS II LLC			(44,388	)			50.00	%			(22,194	)			—				—				22,194				—
Daejung Offshore Wind Power Co., Ltd.			6,326				49.90	%			3,157				—				—				—				3,157
Amman Asia Electric Power Company			246,997				60.00	%			148,198				—				—				(88	)			148,110
KAPES, Inc.			10,738				51.00	%			5,476				—				—				1				5,477
Dangjin Eco Power Co., Ltd.			148,362				34.00	%			50,443				2,618				—				—				53,061
Honam Wind Power Co., Ltd.			14,581				29.00	%			4,228				32				—				1				4,261
Chun-cheon Energy Co., Ltd.			167,939				29.90	%			50,214				3				—				—				50,217
Yeonggwangbaeksu Wind Power Co., Ltd.			19,006				15.00	%			2,851				6				—				—				2,857
Nghi Son 2 Power Ltd.			669				50.00	%			335				—				—				1				336
Kelar S.A			42,643				65.00	%			27,718				2,424				—				40,379				70,521
PT. Tanjung Power Indonesia			(1,194	)			35.00	%			(418	)			—				—				418				—
Incheon New Power Co., Ltd.			2,036				29.00	%			590				—				—				—				590
Seokmun Energy Co., Ltd.			55,271				29.00	%			16,029				—				—				—				16,029
Daehan Wind Power PSC			(104	)			50.00	%			(52	)			—				—				52				—
Barakah One Company			607				18.00	%			109				—				—				—				109
Nawah Energy Company			1,519				18.00	%			273				—				—				1				274
MOMENTUM			494				33.33	%			165				—				—				—				165
Daegu Green Power Co., Ltd.			90,823				29.00	%			26,339				84				—				21,512				47,935
Yeonggwang Wind Power Co., Ltd.			36,730				41.00	%			15,059				230				—				1				15,290
Chester Solar IV SpA			(69	)			81.82	%			(56	)			—				—				1,731				1,675

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

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(5) Financial information of associates and joint ventures reconciled to the Company’s investments in consolidated financial statements as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Investees		Net assets				Percentage of ownership (*)				Share in net assets				Investment differential				Intercompany transaction				Others				Book value
<Associates>
Korea Gas Corporation		W	9,386,486				21.57	%			2,024,665				—				—				(90,788	)			1,933,877
Korea Electric Power Industrial Development Co., Ltd.			70,604				29.00	%			20,475				—				—				—				20,475
YTN Co., Ltd.			178,212				21.43	%			38,191				—				(30	)			(5	)			38,156
Cheongna Energy Co., Ltd.			22,627				43.90	%			9,933				2,584				(144	)			—				12,373
Gangwon Wind Power Co., Ltd.			86,797				15.00	%			13,020				—				—				49				13,069
Hyundai Green Power Co., Ltd.			399,994				29.00	%			115,998				—				—				—				115,998
Korea Power Exchange			223,238				100.00	%			223,238				—				—				—				223,238
AMEC Partners Korea Ltd.			1,184				19.00	%			225				—				—				—				225
Hyundai Energy Co., Ltd.			6,774				46.30	%			3,136				—				(1,079	)			(1,026	)			1,031
Ecollite Co., Ltd.			1,821				36.10	%			657				—				—				(657	)			—
Taebaek Wind Power Co., Ltd.			19,000				25.00	%			4,750				—				—				—				4,750
Taeback Guinemi Wind Power Co., Ltd.			12,522				25.00	%			3,131				—				—				—				3,131
Pyeongchang Wind Power Co., Ltd.			13,531				25.00	%			3,383				—				—				—				3,383
Daeryun Power Co., Ltd.			148,353				19.45	%			28,855				1,014				—				4				29,873
Changjuk Wind Power Co., Ltd.			22,716				30.00	%			6,815				—				—				115				6,930
KNH Solar Co., Ltd.			7,679				27.00	%			2,073				—				—				—				2,073
SPC Power Corporation			149,520				38.00	%			56,818				—				—				—				56,818
Gemeng International Energy Co., Ltd.			2,000,974				34.00	%			680,331				—				—				(266	)			680,065
PT. Cirebon Electric Power			351,484				27.50	%			96,658				—				—				—				96,658
KNOC Nigerian East Oil Co., Ltd.			(85,247	)			14.63	%			(12,472	)			—				—				12,472				—
KNOC Nigerian West Oil Co., Ltd.			(78,317	)			14.63	%			(11,458	)			—				—				11,458				—
PT Wampu Electric Power			50,409				46.00	%			23,188				—				—				—				23,188
PT. Bayan Resources TBK			99,473				20.00	%			19,895				482,109				—				(99,337	)			402,667
S-Power Co., Ltd.			256,849				49.00	%			125,856				—				(1,944	)			—				123,912
Pioneer Gas Power Limited			68,813				40.00	%			27,525				23,147				—				68				50,740
Eurasia Energy Holdings			(485	)			40.00	%			(194	)			—				—				194				—
Xe-Pian Xe-Namnoy Power Co., Ltd.			229,227				25.00	%			57,307				(4,802	)			(672	)			(289	)			51,544
Hadong Mineral Fiber Co., Ltd.			(20	)			25.00	%			(5	)			—				—				5				—
Green Biomass Co., Ltd.			335				14.00	%			47				—				—				—				47
PT. Mutiara Jawa			(6,567	)			29.00	%			(1,904	)			70				—				1,834				—
Samcheok Eco Materials Co., Ltd.			23,889				2.35	%			561				—				—				(561	)			—
Noeul Green Energy Co., Ltd.			4,196				29.00	%			1,217				—				—				—				1,217
Naepo Green Energy Co., Ltd.			101,753				25.00	%			25,438				—				—				—				25,438
Goseong Green Energy Co., Ltd.			245,793				1.12	%			2,742				—				(79	)			—				2,663
Gangneung Eco Power Co., Ltd.			170,302				1.61	%			2,744				—				(98	)			—				2,646
Shin Pyeongtaek Power Co., Ltd.			(6,344	)			40.00	%			(2,538	)			—				(3,380	)			5,918				—
Heang Bok Do Si Photovoltaic Power Co., Ltd.			640				28.00	%			179				—				—				2				181
DS POWER Co., Ltd.			107,906				14.44	%			15,582				—				(7,302	)			(1,090	)			7,190
Dongducheon Dream Power Co., Ltd.			243,172				33.61	%			81,730				—				(4,768	)			(30,086	)			46,876
KS Solar Co., Ltd.			3,178				19.00	%			604				—				—				—				604
Jinbhuvish Power Generation Pvt. Ltd.			55,760				5.16	%			2,877				—				—				(2,877	)			—
SE Green Energy Co., Ltd.			7,381				47.76	%			3,525				—				—				—				3,525
Daegu Photovoltaic Co., Ltd.			5,862				29.00	%			1,700				—				—				—				1,700
Jeongam Wind Power Co., Ltd.			10,000				40.00	%			4,000				—				—				—				4,000
Korea Power Engineering Service Co., Ltd.			9,688				29.00	%			2,810				—				—				—				2,810
Busan Green Energy Co., Ltd.			47,596				29.00	%			13,803				—				—				—				13,803
Jungbu Bio Energy Co., Ltd.			(697	)			18.87	%			(132	)			—				—				132				—
Korea Electric Vehicle Charging Service			3,941				28.00	%			1,103				—				—				—				1,103
Ulleungdo Natural Energy Co., Ltd.			23,098				29.85	%			6,895				—				—				(1	)			6,894
Korea Nuclear Partners Co., Ltd.			856				29.00	%			248				—				—				—				248
Tamra Offshore Wind Power Co., Ltd.			25,980				27.00	%			7,015				—				—				—				7,015
Korea Electric Power Corporation Fund			51,842				98.09	%			50,852				—				—				4				50,856
Energy Infra Asset Management Co., Ltd.			2,619				9.90	%			259				—				—				—				259
Daegu clean Energy Co., Ltd.			500				28.00	%			140				—				—				—				140

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(5) Financial information of associates and joint ventures reconciled to the Company’s investments in consolidated financial statements as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won
December 31, 2016
Investees		Net assets				Percentage of ownership (*)				Share in net assets				Investment differential				Intercompany transaction				Others				Book value
YaksuESS Co.,Ltd		W	673				29.00	%			195				—				—				1				196
Nepal Water & Energy Development Company Private Limited			33,311				52.77	%			17,578				972				—				117				18,667
<Joint ventures>
KEPCO-Uhde Inc.			591				50.85	%			301				—				—				—				301
Eco Biomass Energy Sdn. Bhd.			—				61.53	%			—				—				—				—				—
Datang Chaoyang Renewable Power Co., Ltd.			70,598				40.00	%			28,239				—				—				—				28,239
Shuweihat Asia Power Investment B.V.			278				49.00	%			136				—				—				(136	)			—
Shuweihat Asia Operation & Maintenance Company			1,003				55.00	%			552				—				—				(102	)			450
Waterbury Lake Uranium L.P.			56,134				36.97	%			20,753				—				—				561				21,314
ASM-BG Investicii AD			42,977				50.00	%			21,489				—				—				(1	)			21,488
RES Technology AD			27,164				50.00	%			13,582				—				—				—				13,582
KV Holdings, Inc.			5,244				40.00	%			2,098				—				—				—				2,098
KEPCO SPC Power Corporation			326,286				75.20	%			245,367				—				—				—				245,367
Canada Korea Uranium Limited Partnership			141				12.50	%			18				—				—				(18	)			—
Gansu Datang Yumen Wind Power Co., Ltd.			32,053				40.00	%			12,821				—				—				—				12,821
Datang Chifeng Renewable Power Co., Ltd.			416,460				40.00	%			166,584				—				—				(49	)			166,535
Datang KEPCO Chaoyang Renewable Power Co., Ltd.			27,107				40.00	%			10,843				—				—				—				10,843
Rabigh Electricity Company			432,882				40.00	%			173,153				—				(75,311	)			(40	)			97,802
Rabigh Operation & Maintenance Company			11,067				40.00	%			4,427				—				—				—				4,427
Jamaica Public Service Company Limited			631,712				40.00	%			252,685				(80,161	)			—				76,929				249,453
KW Nuclear Components Co., Ltd.			14,427				45.00	%			6,492				90				—				551				7,133
Busan Shinho Solar Power Co., Ltd.			15,256				25.00	%			3,814				—				—				—				3,814
GS Donghae Electric Power Co., Ltd.			605,729				34.00	%			205,948				—				—				—				205,948
Global Trade Of Power System Co., Ltd.			1,643				29.00	%			476				—				—				1				477
Expressway Solar-light Power Generation Co., Ltd.			8,080				29.00	%			2,343				—				—				—				2,343
KODE NOVUS I LLC			(89,966	)			50.00	%			(44,983	)			4,732				—				40,251				—
KODE NOVUS II LLC			(47,031	)			50.00	%			(23,516	)			—				—				23,516				—
Daejung Offshore Wind Power Co., Ltd.			6,042				49.90	%			3,015				—				—				—				3,015
Amman Asia Electric Power Company			256,574				60.00	%			153,944				—				—				(87	)			153,857
KAPES, Inc.			9,329				51.00	%			4,758				—				—				—				4,758
Dangjin Eco Power Co., Ltd.			148,925				34.00	%			50,635				2,618				—				—				53,253
Honam Wind Power Co., Ltd.			15,239				29.00	%			4,419				32				—				—				4,451
Chun-cheon Energy Co., Ltd.			169,193				29.90	%			50,589				3				—				—				50,592
Yeonggwangbaeksu Wind Power Co., Ltd.			17,892				15.00	%			2,684				5				—				—				2,689
Nghi Son 2 Power Ltd.			455				50.00	%			228				—				—				1				229
Kelar S.A			(94,321	)			65.00	%			(61,309	)			2,424				—				58,885				—
PT. Tanjung Power Indonesia			5,560				35.00	%			1,946				—				—				—				1,946
Incheon New Power Co., Ltd.			1,941				29.00	%			563				—				—				—				563
Seokmun Energy Co., Ltd.			1,349				29.00	%			391				—				—				—				391
Daehan Wind Power PSC			36				50.00	%			18				—				—				(2	)			16
Barakah One Company			658				18.00	%			118				—				—				(2	)			116
Nawah Energy Company			1,645				18.00	%			296				—				—				(6	)			290
MOMENTUM			202				33.33	%			67				—				—				—				67
Daegu Green Power Co., Ltd.			89,421				29.00	%			25,932				84				—				21,512				47,528

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

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(6) As of March 31, 2017 and December 31, 2016, unrecognized equity interest in investments in associates and joint ventures whose book value has been reduced to zero due to accumulated losses are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Unrecognized equity interest				Accumulated unrecognized equity interest				Unrecognized equity interest				Accumulated unrecognized equity interest
Shin Pyeongtaek Power Co., Ltd.		W	(7	)			2,530				1,211				2,537
Seokmun Energy Co., Ltd.			—				—				(205	)			—
Kelar S.A			(61,309	)			—				43,920				61,309
Hadong Mineral Fiber Co., Ltd.			(5	)			—				—				5
PT. Mutiara Jawa			(166	)			1,739				554				1,905
Eurasia Energy Holdings			(15	)			179				6				194
KODE NOVUS I LLC			7,063				52,046				22,194				44,983
KODE NOVUS II LLC			(1,321	)			22,194				12,340				23,515
Jungbu Bio Energy Co., Ltd.			87				219				132				132
PT. Tanjung Power Indonesia			418				418
Daehan Wind Power PSC			52				52

(7) As of March 31, 2017, shareholders’ agreements on investments in associates and joint ventures that may cause future economic resource or cash outflows are as follows:

(i) Gemeng International Energy Co., Ltd.

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

(ii) Hyundai Energy Co., Ltd.

The Company had placed guarantees for a fixed return on the investment to NH Power II Co., Ltd. and National Agricultural Cooperative Federation (“NACF”) and had obtained the rights to acquire the investment securities in return preferentially. In addition, NH Power II Co., Ltd. and NACF have a right, which can be exercised for 30 days starting from 2 months to 1 month prior to 17 years after the termination date of the contract to sell their shares to the 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 acquires those shares at fair value. The acquisition is to be made after the conditions of the acquisition are discussed among the parties involved, with consideration of various factors such as financial status and business situation.

(iv) Pyeongchang Wind Power Co., Ltd.

In 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 acquires those shares at fair value. The acquisition is to be made after the conditions of the acquisition are discussed among the parties involved, with the careful consideration of various factors such as financial status and business situation.

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March 31, 2017

(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(7) As of March 31, 2017, shareholders’ agreements on investments in associates and joint ventures that may cause future economic costs or cash outflows are as follows, continued:

(v) Jeongam Wind Power Co., Ltd.

In case non-controlling shareholders decide to dispose of their shares in Jeongam Wind Power Co., Ltd. after the construction of the power plant has been completed, the 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) DS Power Co., Ltd.

The Company has a put option to sell all shares and bonds of DS POWER Co., Ltd. to Daesung Industrial Co., Ltd. and Daesung Industrial Co., Ltd. has a call option to purchase all shares and bonds of DS POWER CO., Ltd. which the Company owned. With regard to the call option, Daesung Industrial Co., Ltd. or an authoritative party appointed by Daesung Industrial Co., Ltd. can purchase the shares.

(viii) Samcheok Eco Materials 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.

(ix) Hyundai Green Power Co., Ltd.

As of March 31, 2017, Hyundai Green Power Co., Ltd., an associate of the Company, which engages in the byproduct gas power generating business, entered into a project financing agreement with a limit of W919.2 billion with Korea Development Bank and others. At a certain period in the future, the Company has an appraisal right against the financial investors (Korea Development Bank and others) and also has an obligation to sell its shares when claimed by the financial investors. At a certain period in the future, the Company has an appraisal right against Hyundai Steel Company and a third party designated by Hyundai Steel Company (collectively, “Hyundai Steel Company”), the operating investor of Hyundai Green Power Co., Ltd., according to the conditions of the agreement and also has an obligation to sell its shares upon request from Hyundai Steel Company.

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(Unaudited)

17. Investments in Associates and Joint Ventures, Continued

(8) Significant restrictions on the Company’s abilities on 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.		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.
Taebaek Wind Power Co., Ltd.		Financial institutions can reject or defer an approval with regard to the request for fund executions on subordinated loans of shareholders in order to pay senior loans based on the loan agreement.
Pyeongchang Wind Power Co., Ltd.		Principals on subordinated loans or dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained.
Daegu Green Power Co., Ltd.		Principals on subordinated loans or dividends can only be paid when all conditions of the loan agreement are satisfied or prior written consent of financial institutions is obtained. Shares cannot be wholly or partially transferred without prior written consent of financial institutions is obtained.
KNH Solar Co., Ltd.		Principal and interest, dividends to shareholders cannot be paid without written consent of financial institutions.
DS Power Co., Ltd.		Shares cannot be wholly or partially transferred, except as permitted by the agreement.

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March 31, 2017

(Unaudited)

18. Property, Plant and Equipment

(1) Property, plant and equipment as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Acquisition cost				Government grants				Accumulated depreciation				Accumulated impairment losses (*)				Book value
Land		W	13,027,382				(21,973	)			—				—				13,005,409
Buildings			17,907,084				(60,416	)			(6,120,519	)			(853	)			11,725,296
Structures			63,604,800				(195,739	)			(20,466,878	)			(1,183	)			42,941,000
Machinery			68,596,637				(108,118	)			(25,487,228	)			(2,391	)			42,998,900
Ships			4,175				—				(3,669	)			—				506
Vehicles			275,476				(390	)			(182,523	)			—				92,563
Equipment			1,302,350				(645	)			(928,305	)			—				373,400
Tools			935,137				(356	)			(759,528	)			—				175,253
Construction-in-progress			29,151,878				(139,188	)			—				(38,108	)			28,974,582
Finance lease assets			2,390,686				—				(2,010,920	)			—				379,766
Asset retirement costs			7,094,585				—				(3,122,803	)			—				3,971,782
Others			10,579,035				—				(8,219,356	)			—				2,359,679
		W	214,869,225				(526,825	)			(67,301,729	)			(42,535	)			146,998,136

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

In millions of won		December 31, 2016
		Acquisition cost				Government grants				Accumulated depreciation				Accumulated impairment losses (*)				Book value
Land		W	12,969,741				(3,204	)			—				—				12,966,537
Buildings			17,722,326				(61,188	)			(5,936,849	)			(853	)			11,723,436
Structures			63,291,437				(197,641	)			(19,959,839	)			(1,183	)			43,132,774
Machinery			67,769,168				(111,064	)			(24,344,832	)			(2,391	)			43,310,881
Ships			4,175				—				(3,625	)			—				550
Vehicles			247,751				(107	)			(176,781	)			—				70,863
Equipment			1,270,660				(732	)			(894,265	)			—				375,663
Tools			921,115				(430	)			(742,083	)			—				178,602
Construction-in-progress			27,334,368				(135,807	)			—				(38,108	)			27,160,453
Finance lease assets			2,390,779				—				(1,984,426	)			—				406,353
Asset retirement costs			7,129,771				—				(3,064,359	)			—				4,065,412
Others			10,361,294				—				(8,009,762	)			—				2,351,532
		W	211,412,585				(510,173	)			(65,116,821	)			(42,535	)			145,743,056

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

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March 31, 2017

(Unaudited)

18. Property, Plant and Equipment, Continued

(2) Changes in property, plant and equipment for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Beginning balance				Acquisition				Disposal				Depreciation				Impairment				Others				Ending balance
Land		W	12,969,741				829				(4,886	)			—				—				61,698				13,027,382
(Government grants)			(3,204	)			—				—				—				—				(18,769	)			(21,973	)
Buildings			11,784,624				729				(2,438	)			(188,341	)			—				191,138				11,785,712
(Government grants)			(61,188	)			—				—				1,525				—				(753	)			(60,416	)
Structures			43,330,415				371				(125,392	)			(579,702	)			—				511,047				43,136,739
(Government grants)			(197,641	)			—				390				2,434				—				(922	)			(195,739	)
Machinery			43,421,945				49,954				(43,779	)			(1,168,479	)			—				847,377				43,107,018
(Government grants)			(111,064	)			—				103				3,130				—				(287	)			(108,118	)
Ships			550				—				—				(44	)			—				—				506
Vehicles			70,970				276				—				(10,265	)			—				31,972				92,953
(Government grants)			(107	)			—				—				16				—				(299	)			(390	)
Equipment			376,395				6,550				(106	)			(37,441	)			—				28,647				374,045
(Government grants)			(732	)			—				—				87				—				—				(645	)
Tools			179,032				3,520				—				(17,971	)			—				11,028				175,609
(Government grants)			(430	)			—				—				74				—				—				(356	)
Construction-in-progress			27,296,260				3,528,676				—				—				—				(1,711,166	)			29,113,770
(Government grants)			(135,807	)			(23,166	)			—				—				—				19,785				(139,188	)
Finance lease assets			406,353				—				(29,663	)			(26,940	)			—				30,016				379,766
Asset retirement costs			4,065,412				—				—				(140,323	)			—				46,693				3,971,782
Others			2,351,532				1,367				—				(207,190	)			—				213,970				2,359,679
		W	145,743,056				3,569,106				(205,771	)			(2,369,430	)			—				261,175				146,998,136

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March 31, 2017

(Unaudited)

18. Property, Plant and Equipment, Continued

(2) Changes in property, plant and equipment for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won		December 31, 2016
		Beginning balance				Acquisition				Disposal				Depreciation				Impairment				Others				Ending balance
Land		W	12,396,460				13,973				(52,569	)			—				—				611,877				12,969,741
(Government grants)			(3,147	)			—				14				—				—				(71	)			(3,204	)
Buildings			9,676,432				—				(9,020	)			(676,866	)			—				2,794,078				11,784,624
(Government grants)			(63,932	)			—				731				5,299				—				(3,286	)			(61,188	)
Structures			40,258,162				455				(524,310	)			(2,233,333	)			—				5,829,441				43,330,415
(Government grants)			(193,119	)			—				2,597				9,491				—				(16,610	)			(197,641	)
Machinery			36,864,749				193,017				(243,757	)			(4,353,596	)			—				10,961,532				43,421,945
(Government grants)			(108,935	)			(33	)			1,210				12,272				—				(15,578	)			(111,064	)
Ships			786				—				—				(281	)			—				45				550
Vehicles			60,472				2,493				(34	)			(27,615	)			—				35,654				70,970
(Government grants)			(29	)			(58	)			—				25				—				(45	)			(107	)
Equipment			310,571				67,134				(323	)			(128,084	)			—				127,097				376,395
(Government grants)			(1,026	)			—				—				452				—				(158	)			(732	)
Tools			160,630				27,856				(327	)			(69,842	)			—				60,715				179,032
(Government grants)			(691	)			—				—				295				—				(34	)			(430	)
Construction-in-progress			35,267,026				11,752,352				(94,443	)			—				—				(19,628,675	)			27,296,260
(Government grants)			(139,898	)			(28,434	)			—				—				—				32,525				(135,807	)
Finance lease assets			511,509				34				(31	)			(96,254	)			—				(8,905	)			406,353
Asset retirement costs			4,106,087				—				—				(509,310	)			—				468,635				4,065,412
Others			2,259,244				—				(9	)			(813,248	)			—				905,545				2,351,532
		W	141,361,351				12,028,789				(920,271	)			(8,880,595	)			—				2,153,782				145,743,056

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

19. Investment Properties

(1) Investment properties as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Acquisition cost				Government grants				Accumulated depreciation				Book value
Land		W	281,185				—				—				281,185
Buildings			40,765				(65	)			(16,549	)			24,151
		W	321,950				(65	)			(16,549	)			305,336
In millions of won		December 31, 2016
		Acquisition cost				Government grants				Accumulated depreciation				Book value
Land		W	336,421				—				—				336,421
Buildings			29,168				(64	)			(11,845	)			17,259
		W	365,589				(64	)			(11,845	)			353,680

(2) Changes in investment properties for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Beginning balance				Depreciation				Others				Ending balance
Land		W	336,421				—				(55,236	)			281,185
Buildings			17,323				(408	)			7,301				24,216
(Government grants)			(64	)			—				(1	)			(65	)
		W	353,680				(408	)			(47,936	)			305,336
In millions of won		December 31, 2016
		Beginning balance				Depreciation				Others				Ending balance
Land		W	253,960				—				82,461				336,421
Buildings			15,963				(679	)			2,039				17,323
(Government grants)			(13	)			1				(52	)			(64	)
		W	269,910				(678	)			84,448				353,680

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

19. Investment Properties, Continued

(3) Income and expenses related to investment properties for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Rental income		W	2,432				1,896
Operating and maintenance expenses related to rental income			(408	)			(198	)
		W	2,024				1,698

(4) Fair value of investment properties as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Book value				Fair value				Book value				Fair value
Land		W	281,185				312,628				336,421				374,042
Buildings			24,151				28,977				17,259				20,708
		W	305,336				341,605				353,680				394,750

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 K-IFRS transition date (January 1, 2010).

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

20. Construction Contracts

(1) Changes in total contract amount in which revenue is not yet recognized for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Beginning balance				Increase and decrease (*)				Recognized as revenue				Ending balance
Nuclear power plant construction in UAE and others		W	7,236,888				(462,461	)			(659,092	)			6,115,335

(*) For the three-month period ended March 31, 2017, the increased balance of contracts from new orders and other is W29,103 million and the decreased balance of contracts due to changes in scope of construction work is W491,564 million.

In millions of won		December 31, 2016
		Beginning balance				Increase and decrease (*)				Recognized as revenue				Ending balance
Nuclear power plant construction in UAE and others		W	12,308,839				(1,045,094	)			(4,026,857	)			7,236,888

(*) For the year ended December 31, 2016, the increased balance of contracts from new orders and other is W718,118 million and the decreased balance of contracts due to changes in scope of construction work is W1,763,212 million.

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March 31, 2017

(Unaudited)

20. Construction Contracts, Continued

(2) Accumulated earned revenue, expense and others related to the Company’s construction contracts as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won

March 31, 2017

Accumulated earned revenue

Accumulated expense

Accumulated profit

Unearned advance receipts

Nuclear power plant construction in UAE and others

W

15,686,589

14,570,128

1,116,461

—

In millions of won

December 31, 2016

Accumulated earned revenue

Accumulated expense

Accumulated profit

Unearned advance receipts

Nuclear power plant construction in UAE and others

W

15,314,737

14,396,890

917,847

—

(3) Gross amount due from customers recognized as assets and due to customers recognized as liabilities for contract work as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won

March 31, 2017

December 31, 2016

Assets (*1)

Liabilities (*2)

Assets (*1)

Liabilities (*2)

Nuclear power plant construction in UAE and others

W

58,613

694,699

44,930

651,985

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

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

(4) The contract between the Company and ENEC (purchaser) states that disclosure of information related to UAE nuclear power plant construction projects such as contract date, contractual completion date, completion progress, unbilled construction, impairment losses, etc. is not allowed without consent from the purchaser. ENEC did not agree to disclose such information. Accordingly, the Company did not disclose such information based on K-IFRS 1011 45.2(2) as it is probable that ENEC may file a lawsuit for breach of contract if the Company does so. Also, the Company has not disclosed such information in a registration statement, investment prospectus or annual report and reported to the audit committee that those items will not be disclosed in the notes to the financial statements.

(5) Changes in estimates of contract revenues and costs related to the Company’s construction services for the three-month period ended March 31, 2017 are as follows:

In millions of won		March 31, 2017
																		Assets								Receivables from construction contracts
		Expected loss on constructi- on contracts				Changes in estimates of contract revenue and costs				Amounts recognized in current profit or loss				Amounts recogniz- ed in future profit or loss				Gross				Allowance for doubtful accounts				Gross				Allowance for doubtful accounts				Changes in estimated total contract costs
Transmission and distribution		W	—				(472	)			(383	)			(89	)			24,760				—				—				—				1,490
Electric power generation (nuclear)			—				—				—				—				1,948				—				—				—				—
Plant maintenance & engineering service			—				(1,568	)			(1,003	)			(565	)			31,195				—				33,816				(8,273	)			6
Others			—				—				—				—				710				—				—				—				—
		W	—				(2,040	)			(1,386	)			(654	)			58,613				—				33,816				(8,273	)			1,496

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

21. Intangible Assets other than Goodwill

(1) Intangible assets as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Acquisition cost				Government grants				Accumulated amortization				Accumulated impairment losses				Book value
Software		W	474,712				(532	)			(376,304	)			—				97,876
Licenses and franchises			3,398				—				(3,398	)			—				—
Copyrights, patents rights and other industrial rights			35,790				—				(16,551	)			—				19,239
Mining rights			544,591				—				(11,577	)			—				533,014
Development expenditures			827,903				(4,429	)			(729,834	)			—				93,640
Intangible assets under development			122,795				(11,309	)			—				(3,941	)			107,545
Usage rights of donated assets and other			426,346				(19	)			(345,784	)			—				80,543
Leasehold rights			24,306				—				(18,849	)			—				5,457
Greenhouse gas emissions rights			6,283				—				—				—				6,283
Others			281,914				—				(90,255	)			(12,124	)			179,535
		W	2,748,038				(16,289	)			(1,592,552	)			(16,065	)			1,123,132

In millions of won		December 31, 2016
		Acquisition cost				Government grants				Accumulated amortization				Accumulated impairment losses				Book value
Software		W	458,382				(595	)			(365,161	)			—				92,626
Licenses and franchises			3,398				—				(3,398	)			—				—
Copyrights, patents rights and other industrial rights			35,756				—				(15,675	)			—				20,081
Mining rights			549,371				—				(10,511	)			—				538,860
Development expenditures			785,966				(5,152	)			(723,561	)			—				57,253
Intangible assets under development			119,474				(11,090	)			—				(3,941	)			104,443
Usage rights of donated assets and other			426,346				(21	)			(342,244	)			—				84,081
Leasehold rights			23,350				—				(18,718	)			—				4,632
Greenhouse gas emissions rights			6,283				—				—				—				6,283
Others			173,213				—				(88,527	)			(12,124	)			72,562
		W	2,581,539				(16,858	)			(1,567,795	)			(16,065	)			980,821

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March 31, 2017

(Unaudited)

21. Intangible Assets other than Goodwill, Continued

(2) Changes in intangible assets as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Beginning balance				Acquisition				Disposal				Amortization				Impairment				Others				Ending balance
Software		W	93,221				2,168				—				(10,645	)			—				13,664				98,408
(Government grants)			(595	)			—				—				63				—				—				(532	)
Licenses and franchises
Copyrights, patents rights and other industrial rights			20,081				1				—				(687	)			—				(156	)			19,239
Mining rights			538,860				6,961				(2,225	)			(439	)			—				(10,143	)			533,014
Development expenditures			62,405				—				—				(5,568	)			—				41,232				98,069
(Government grants)			(5,152	)			—				—				723				—				—				(4,429	)
Intangible assets under development			115,533				6,593				—				—				—				(3,272	)			118,854
(Government grants)			(11,090	)			—				—				—				—				(219	)			(11,309	)
Usage rights of donated assets and other			84,102				—				—				(3,528	)			—				(12	)			80,562
(Government grants)			(21	)			—				—				2				—				—				(19	)
Leasehold rights			4,632				—				—				(130	)			—				955				5,457
Greenhouse gas emissions rights			6,283				—				—				—				—				—				6,283
Others			72,562				652				(1	)			(13,814	)			—				120,136				179,535
(Government grants)			—				—				—				—				—				—				—
		W	980,821				16,375				(2,226	)			(34,023	)			—				162,185				1,123,132
In millions of won		December 31, 2016
		Beginning balance				Acquisition				Disposal				Amortization				Impairment				Others				Ending balance
Software		W	57,886				18,267				—				(32,378	)			—				49,446				93,221
(Government grants)			(699	)			—				—				249				—				(145	)			(595	)
Licenses and franchises
Copyrights, patents rights and other industrial rights			21,875				85				(39	)			(2,697	)			—				857				20,081
Mining rights			499,537				26,311				—				(899	)			—				13,911				538,860
Development expenditures			51,807				212				—				(21,993	)			—				32,379				62,405
(Government grants)			(6,835	)			—				—				2,771				—				(1,088	)			(5,152	)
Intangible assets under development			94,886				66,588				—				—				(3,945	)			(41,996	)			115,533
(Government grants)			(10,483	)			(1,597	)			—				—				—				990				(11,090	)
Usage rights of donated assets and other			48,591				—				—				(15,513	)			—				51,024				84,102
(Government grants)			(32	)			—				—				11				—				—				(21	)
Leasehold rights			745				—				—				(351	)			—				4,238				4,632
Greenhouse gas emissions rights			805				6,283				—				—				—				(805	)			6,283
Others			97,750				8,273				(550	)			(8,916	)			3				(23,998	)			72,562
(Government grants)			(1	)			—				—				1				—				—				—
		W	855,832				124,422				(589	)			(79,715	)			(3,942	)			84,813				980,821

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

21. Intangible Assets other than Goodwill, Continued

(3) Significant specific intangible assets as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won and thousands of Australian dollars
March 31, 2017
Type		Description		Currency		Amount				Remaining useful lives
Software		ERP system and others		KRW			419			8 months ~ 1 year and 8 months
		Electricity sales information system		KRW			34,680			5 years
		SCADA O/S (POWERON RELIANCE)		KRW			3,865			2 years and 10 months
Copyrights, patents rights and other industrial rights		Smart technology verification and standard design project conducting right		KRW			5,500			5 years and 6 months
Mining rights		Mining right of Bylong mine		AUD			401,225			—  (*)
Development expenditures		Development of maintenance system for utility plant		KRW			377			8 months
Intangible assets under		Contributions to ARP NRC DC		KRW			41,414			—
Usage rights of donated assets and others		Sejong Haengbogdosi sharing charge		KRW			43,221			9 years and 8 months
		Dangjin power plant load facility usage right		KRW			25,347			4 years

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

In millions of won and thousands of Australian dollars
December 31, 2016
Type		Description		Currency		Amount				Remaining useful lives
Software		ERP system and others		KRW			506			11 months~ 1 year and 11 months
		SCADA O/S (POWERON RELIANCE)		KRW			4,206			3 years and 1 month
Copyrights, patents rights and other industrial rights		Smart technology verification and standard design project conducting right		KRW			5,750			5 years and 9 months
Mining rights		Mining right of Bylong mine		AUD			401,225			—  (*)
Development expenditures		Development of maintenance system for utility plant		KRW			518			11 months
Intangible assets under development		Contributions to ARP NRC DC		KRW			41,190			—
Usage rights of donated assets and others		Sejong Haengbogdosi sharing charge		KRW			44,502			9 years and 11 months
		Dangjin power plant load facility usage right		KRW			26,759			4 years and 3 months
Others		Sillim electricity supply facility usage right		KRW			2,196			4 years and 11 months

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

(4) For the three-month period ended March 31, 2017 and for the year ended December 31, 2016, the Company recognized research and development expenses of W140,526 million and W124,784 million, respectively.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

22. Trade and Other Payables

Trade and other payables as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Current				Non-current				Current				Non-current
Trade payables		W	2,080,396				—				2,610,373				—
Other trade payables			1,407,484				3,045,736				1,498,582				3,033,780
Accrued expenses			1,107,489				1,969				1,152,933				2,161
Leasehold deposits received			1,425				1,308				1,426				1,008
Other deposits received			198,324				95,365				197,711				93,751
Finance lease liabilities			123,521				386,619				121,176				420,003
Dividends payable			1,294,105				—				3,204				—
Others (*)			—				7,472				6				7,472
		W	6,212,744				3,538,469				5,585,411				3,558,175

(*) Details of others as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Current				Non-current				Current				Non-current
Advance received from local governments		W	—				7,472				—				7,472
Others			—				—				6				—
		W	—				7,472				6				7,472

23. Borrowings and Debt Securities

(1) Borrowings and debt securities as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Current liabilities
Short-term borrowings		W	2,426,788				805,523
Current portion of long-term borrowings			311,403				310,977
Current portion of debt securities			6,673,820				7,825,310
Less : Current portion of discount on long-term borrowings			(878	)			(979	)
Less : Current portion of discount on debt securities			(1,840	)			(1,753	)
			9,409,293				8,939,078
Non-current liabilities
Long-term borrowings			1,841,452				1,799,750
Debt securities			41,821,740				43,012,960
Less : Discount on long-term borrowings			(23,850	)			(25,859	)
Less : Discount on debt securities			(79,175	)			(86,880	)
Add : Premium on debt securities			132				156
			43,560,299				44,700,127
		W	52,969,592				53,639,205

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

23. Borrowings and Debt Securities, Continued

(2) Repayment schedule of borrowings and debt securities as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won
March 31, 2017
Type		Borrowings				Debt securities
Less than 1 year		W	2,738,191				6,673,820
1~ 5 years			402,643				24,506,055
Over 5 years			1,438,809				17,315,685
		W	4,579,643				48,495,560

In millions of won
December 31, 2016
Type		Borrowings				Debt securities
Less than 1 year		W	1,116,500				7,825,310
1~ 5 years			295,162				24,462,410
Over 5 years			1,504,588				18,550,550
		W	2,916,250				50,838,270

(3) Short-term borrowings as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won and thousands of foreign currencies

March 31, 2017

Type

Creditor

Interest rate (%)

Maturity

Foreign currency

Local currency

Local short-term borrowings

KTB Investment and securities and others

1.30~1.58

2017.04.03~ 2017.08.28

—

W

2,152,000

Foreign short-term borrowings

SCNT and others

2.77~6.50

2017.06.30~ 2017.12.03

USD

6,663

7,437

Foreign short-term borrowings

Export-import Bank of Korea

3M Libor+0.54~0.63

2017.05.17~ 2017.12.18

AUD

305,769

260,934

Local bank overdraft

Woori Bank

Standard overdraft rate+1.12

2018.02.27

—

6,417

W

2,426,788

In millions of won and thousands of foreign currencies

December 31, 2016

Type

Creditor

Interest rate (%)

Maturity

Foreign currency

Local currency

Local short-term borrowings

Woori Investment Bank and others

1.54~2.51

2017.01.25~ 2017.09.13

—

W

436,800

Foreign short-term borrowings

SCNT and others

1.58~6.50

2017.03.30~ 2017.12.03

USD

35,086

42,401

Foreign short-term borrowings

Export-import Bank of Korea

3M Libor+0.54~0.63

2017.05.17~ 2017.12.18

AUD

311,174

271,360

Local bank overdraft

Nonghyup Bank

2.45

2017.01.05

—

37,000

Local bank overdraft

Woori Bank

Standard overdraft rate+1.12

2017.02.25

—

17,962

W

805,523

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

23. Borrowings and Debt Securities, Continued

(4) Long-term borrowings as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won and thousands of foreign currencies
March 31, 2017
Type				Interest rate (%)				Maturity				Foreign currency				Local currency
Local long-term borrowings
Korea Development Bank		Others			0.50				2018~2044				—			W	5,474
		Facility			2.45~4.60				2023~2028				—				66,292
		Facility			1yr KoFC bond rate +0.31				2018				—				100,000
		Operating funds			2.59~2.75				2018~2020				—				17,000
KEB Hana Bank		Commercial Paper			3M CD+0.14				2017				—				100,000
		Facility			4.60				2028				—				16,556
		Facility			3yr KTB rate-1.25				2017~2028				—				9,478
Korea Industrial Bank		PF Refinancing			CD+1.25				2030				—				22,500
Export-Import Bank of Korea		Project loans			1.50				2026				—				30,935
		Operating funds			2.21				2020								35,000
Korea Resources Corporation		Development of power resources			3yr KTB rate-2.25				2022~2025				—				13,487
		Facility			3yr KTB rate-2.25				2017~2024				—				3,702
		Project loans			—				2022~2025				—				3,733
		Others			KTB rate -2.25				2024~2025				—				11,900
Shinhan Bank and others		Collateral borrowing			2.22~2.32				2017~2019				—				60,000
		Facility			CB rate+1.10				2028				—				24,834
		Operating funds			2.70~2.86				2017~2018				—				25,000
		Others			4.10				2035								70,000
		Others			3yr KTB rate+1.10				2035								70,000
Kookmin Bank		Facility			MOR+0.62~0.79				2017~2023				—				45,000
Others		Facility			1.75~4.60				2026~2029				—				157,286
		Facility			CB rate +1.10~1.20				2022~2028				—				46,056
		PF Refinancing			4.10				2030				—				62,500
		Others			4.50~8.00				2022~2039				—				102,347
		Others			—				2028				—				7,250
																	1,106,330
Foreign long-term borrowings
Korea National Oil Corporation		Project loans			—				2021~2023			USD	8,744				9,759
Export-Import Bank of Korea and others		Direct loan and others			3M Libor+2.75~3.70				2027			JOD	178,892				281,271
		Commercial loan and others			3M Libor+1.50~2.50				2030~2033			USD	299,859				334,672
		PF Loan			6M Libor+2.50~2.70				2032			USD	122,983				137,261
SCNT and others		Shareholder’s loan			6.50~8.00				2023			USD	40,621				45,337
		Shareholder’s loan			8.00				2031			JOD	6,127				9,634
PT PJB and others		Shareholder’s loan			12.75				2019			IDR	16,971,472				1,422
Samsung Life Insurance and others		Syndicated Loan			3.10				2032			JPY	3,366,000				33,610
Woori Bank and others		Syndicated Loan			JPY 6M Libor+2.10				2032			JPY	2,244,000				22,407
SMBC and others		Equity Bridge Loan			1M Libor+0.90				2019			USD	36,495				40,732
IFC and others		Others			6M Libor+5.00				2031			PKR	11,711,745				124,730
Others		Others			—				2019			USD	5,097				5,690
																	1,046,525
																	2,152,855
Less : Discount of long-term borrowings																	(24,728	)
Less : Current portion of long-term borrowings																	(311,403	)
Add : Current portion of discount on long-term borrowings																	878
																W	1,817,602

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

23. Borrowings and Debt Securities, Continued

(4) Long-term borrowings as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won and thousands of foreign currencies
December 31, 2016
Type				Interest rate (%)				Maturity				Foreign currency				Local currency
Local long-term borrowings
Korea Development Bank		Others			0.50				2018~2044				—			W	5,663
		Facility			2.45~4.60				2023~2028				—				61,835
		Facility			1yr KoFC bond rate +0.31				2018				—				125,000
		Operating funds			2.75				2018				—				12,000
KEB Hana Bank		Commercial Paper			3M CD+0.14				2017				—				100,000
		Facility			4.60				2028				—				16,851
		Facility			3yr KTB rate-1.25				2017~2028				—				9,655
Korea Industrial Bank		PF Refinancing			CD+1.25				2030				—				22,500
Export-Import Bank of Korea		Project loans			1.50				2026				—				30,935
Korea Resources Corporation		Development of power resources			3yr KTB rate-2.25				2022~2025				—				14,039
		Facility			3yr KTB rate-2.25				2017~2024				—				3,842
		Project loans			—				2022~2025				—				3,733
		Others			KTB rate-2.25				2024~2025				—				12,131
Shinhan Bank and others		Collateral borrowing			2.22				2017				—				30,000
		Facility			CB rate+1.10				2028				—				25,276
		Operating funds			2.70~2.86				2017~2018				—				25,000
		Others			4.10				2035				—				55,000
		Others			3yr KTB rate+1.10				2035				—				55,000
Kookmin Bank		Facility			MOR+0.62~0.79				2017~2023				—				45,000
Others		Facility			1.75~4.60				2026~2029				—				146,472
		Facility			CB rate+1.10~1.20				2022~2028				—				34,951
		PF Refinancing			4.10				2030				—				62,500
		Others			8.00				2036				—				102,347
		Others			—				2028				—				7,250
																	1,006,980
Foreign long-term borrowings
Korea National Oil Corporation		Project loans			—				2021~2023			USD	8,744				10,567
Export-Import Bank of Korea and others		Direct loan and others			3M Libor+2.75~3.70				2027			JOD	178,892				305,332
		Commercial loan and others			3M Libor+1.50~2.50				2030~2033			USD	299,859				362,379
		PF Loan			6M Libor+2.50~2.70				2032			USD	119,647				144,594
SCNT and others		Shareholder’s loan			6.50~8.00				2023			USD	40,618				49,086
		Shareholder’s loan			8.00				2031			JOD	7,128				12,166
PT PJB		Shareholder’s loan			12.75				2019			IDR	16,705,505				1,500
Samsung Life Insurance and others		Syndicated Loan			3.10				2032			JPY	1,758,000				18,227
Woori Bank and others		Syndicated Loan			JPY 6M Libor+2.10				2032			JPY	1,172,000				12,151
SMBC and others		Equity Bridge Loan			1M Libor+0.90				2019			USD	37,978				45,897
IFC and others		Others			6M Libor+5.00				2031			PKR	11,706,160				134,972
Others		Others			—				2019			USD	5,691				6,876
																	1,103,747
																	2,110,727
Less : Discount of long-term borrowings																	(26,838	)
Less : Current portion of long-term borrowings																	(310,977	)
Add : Current portion of discount on long-term borrowings																	979
																W	1,773,891

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

23. Borrowings and Debt Securities, Continued

(5) Local debt securities as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won
		Issue date				Maturity				Interest rate (%)				March 31, 2017				December 31, 2016
Electricity Bonds (*1)			2009.12.03~ 2017.03.29				2017.04.07~ 2033.08.06				1.69~5.45			W	19,130,000				19,860,000
Electricity Bonds			2012.07.10~ 2013.06.25				2017.07.10~ 2018.06.25				3M CD +0.31~0.32				310,000				310,000
Corporate Bonds (*2)			2009.05.04~ 2017.03.29				2017.04.09~ 2040.12.10				1.36~5.84				19,202,708				19,552,708
															38,642,708				39,722,708
Less : Discount on local debt securities															(34,378	)			(34,667	)
Less : Current portion of local debt securities															(4,330,010	)			(5,650,010	)
Add : Current portion of discount on local debt securities															758				728
														W	34,279,078				34,038,759

(*1) Electricity Bonds 885 (W40,000 million) can be redeemed every April 28 after three years from its issue date, April 28, 2014.

(*2) Corporate Bonds of HeeMang Sunlight Power Co., Ltd (W2,697 million) can be redeemed every March 31 after five years from its issue date, March 31, 2016.

(6) Foreign debt securities as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won and thousands of foreign currencies
March 31, 2017
Type		Issue date		Maturity		Interest rate (%)		Foreign currency				Local currency
FY-96		1996.04.01~1996.12.06		2026.12.06~2096.04.01		6.00~8.37		USD	249,068			W	277,985
FY-97		1997.01.31~1997.08.04		2027.02.01~2027.08.01		6.75~7.00		USD	314,717				351,256
FY-04		2004.04.23		2034.04.23		5.13		USD	286,920				320,231
FY-08		2008.11.27		2018.11.27		4.19		JPY	20,000,000				199,704
FY-11		2011.07.13		2021.07.13		4.75		USD	500,000				558,050
FY-12		2012.05.10~2012.09.19		2017.05.10~2022.09.19		2.50~3.13		USD	1,750,000				1,953,175
FY-13		2013.02.05~2013.11.27		2018.02.05~2018.11.27		1.88~2.88		USD	1,900,000				2,120,590
FY-13		2013.09.26~2013.10.23		2019.03.26~2019.04.23		1.50~1.63		CHF	400,000				446,216
FY-13		2013.09.25		2020.09.25		5.75		AUD	325,000				277,345
FY-13		2013.02.20~2013.07.25		2018.02.20~2018.07.25		3M Libor+0.84~1.50		USD	500,000				558,050
FY-14		2014.02.11~2014.12.02		2019.02.11~2029.07.30		2.38~3.57		USD	1,500,000				1,674,150
FY-14		2014.05.22~2014.07.31		2017.05.22~2017.07.31		3M Libor+0.55~0.78		USD	400,000				446,440
FY-15		2015.06.15		2025.06.15		3.25		USD	300,000				334,830
FY-16		2016.01.21		2021.07.21		2.50		USD	300,000				334,830
													9,852,852
Less : Discount on foreign debt securities													(46,637	)
Add : Premium on foreign debt securities													132
Less : Current portion of foreign debt securities													(2,343,810	)
Add : Current portion of discount on foreign debt securities													1,082
												W	7,463,619

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

23. Borrowings and Debt Securities, Continued

(6) Foreign debt securities as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won and thousands of foreign currencies
December 31, 2016
Type		Issue date		Maturity		Interest rate (%)		Foreign currency				Local currency
FY-96		1996.04.01~1996.12.06		2026.12.06~2096.04.01		6.00~8.37		USD	249,068			W	300,999
FY-97		1997.01.31~1997.08.04		2027.02.01~2027.08.01		6.75~7.00		USD	314,717				380,335
FY-04		2004.04.23		2034.04.23		5.13		USD	286,920				346,743
FY-08		2008.11.27		2018.11.27		4.19		JPY	20,000,000				207,362
FY-11		2011.07.13~2011.07.29		2017.01.30~2021.07.13		3.63~4.75		USD	800,000				966,800
FY-12		2012.05.10~2012.09.19		2017.05.10~2022.09.19		2.50~3.13		USD	1,750,000				2,114,875
FY-13		2013.02.05~2013.11.27		2018.02.05~2018.11.27		1.88~2.88		USD	1,900,000				2,296,150
FY-13		2013.09.26~2013.10.23		2019.03.26~2019.04.23		1.50~1.63		CHF	400,000				472,532
FY-13		2013.09.25		2020.09.25		5.75		AUD	325,000				283,416
FY-13		2013.02.20~2013.07.25		2018.02.20~2018.07.25		3M Libor+0.84~1.50		USD	500,000				604,250
FY-14		2014.02.11~2014.12.02		2019.02.11~2029.07.30		2.38~3.57		USD	1,500,000				1,812,750
FY-14		2014.01.28~2014.07.31		2017.01.28~2017.07.31		3M Libor+0.55~1.05		USD	500,000				604,250
FY-15		2015.06.15		2025.06.15		3.25		USD	300,000				362,550
FY-16		2016.01.21		2021.07.21		2.50		USD	300,000				362,550
													11,115,562
Less : Discount on foreign debt securities													(53,966	)
Add : Premium on foreign debt securities													156
Less : Current portion of foreign debt securities													(2,175,300	)
Add : Current portion of discount on foreign debt securities													1,025
												W	8,887,477

(7) Changes in borrowings and debt securities for the three-month period ended March 31, 2017 are as follows:

In millions of won
Beginning balance		Cash flow				Effect of exchange rate fluctuations				Others				Ending balance
W          53,639,205			336,912				(1,016,229	)			9,704				52,969,592

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

24. Finance Lease Liabilities

(1) Lease contracts

The Company entered into 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 plant’s economic life.

(2) Finance lease liabilities as of March 31, 2017 and December 31, 2016 are as follows and are included in current and non-current trade and other payables, net, in the consolidated statements of financial position:

In millions of won		March 31, 2017								December 31, 2016
		Minimum lease payments				Present value of minimum lease payments				Minimum lease payments				Present value of minimum lease payments
Less than 1 year		W	175,268				123,521				175,512				121,176
1 ~ 5 years			371,270				280,729				404,029				306,282
More than 5 years			141,372				105,890				152,247				113,721
		W	687,910				510,140				731,788				541,179

(3) Current and non-current portion of finance lease liabilities as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Current finance lease liabilities		W	123,521				121,176
Non-current finance lease liabilities			386,619				420,003
		W	510,140				541,179

(4) Lease payments recognized as an expense as a lessee for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Minimum lease payment		W	42,153				46,691
Contingent rent payment			(5,275	)			(5,433	)

(5) The Company does not have any irrevocable operating lease contracts as of March 31, 2017 and December 31, 2016.

(6) Changes in finance lease liabilities for the three-month period ended March 31, 2017 are as follows:

In millions of won
Beginning balance		Cash flow		Acquisition of finance lease assets		Ending balance
W  541,179		(31,039)		—		510,140

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

25. Employment Benefits

(1) Employment benefit obligations as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Net defined benefit obligations		W	1,753,234				1,678,470
Other long-term employee benefit obligations			7,695				7,788
		W	1,760,929				1,686,258

(2) Principal assumptions on actuarial valuation as of March 31, 2017 and December 31, 2016 are as follows:

		March 31, 2017		December 31, 2016
Discount rate		2.53% ~ 2.78%		2.45% ~ 2.64%
Future salary and benefit levels		5.44%		5.23%
Weighted average duration		13.33 years		13.34 years

(3) Details of expense relating to defined benefit plans for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Current service cost		W	91,618				85,761
Interest cost			18,113				15,862
Expected return on plan assets			(7,597	)			(5,768	)
Loss from settlement			(457	)			(35	)
		W	101,677				95,820

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

In millions of won		March 31, 2017				March 31, 2016
Cost of sales		W	76,866				71,212
Selling and administrative expenses			13,714				13,399
Others (Construction-in-progress and others)			11,097				11,209
		W	101,677				95,820

In addition, for the three-month periods ended March 31, 2017 and 2016, employee benefit obligations expenses of W15,231 million and W13,962 million, respectively, is recognized as cost of sales, and W2,808 million and W2,674 million, respectively, is recognized as selling and administrative expenses, and W3,731 million and W3,338 million, respectively, are recognized as construction-in-progress and others, relates to the Company’s defined contribution plans.

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March 31, 2017

(Unaudited)

25. Employment Benefits, Continued

(4) Details of defined benefit obligations as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Present value of defined benefit obligation from funded plans		W	2,936,181				2,867,377
Fair value of plan assets			(1,182,947	)			(1,188,907	)
			1,753,234				1,678,470
Present value of defined benefit obligation from unfunded plans			—				—
Net liabilities incurred from defined benefit plans		W	1,753,234				1,678,470

(5) Changes in the present value of defined benefit obligations for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Beginning balance		W	2,867,377				2,426,414
Current service cost			91,618				378,930
Interest cost (*)			18,113				67,104
Remeasurement component			(5,115	)			120,993
Loss from settlement			(457	)			(707	)
Actual payments			(35,056	)			(125,233	)
Others			(299	)			(124	)
Ending balance		W	2,936,181				2,867,377

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

(6) Changes in the fair value of plan assets for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Beginning balance		W	1,188,907				930,632
Expected return			7,597				23,612
Remeasurement component			(1,766	)			(5,706	)
Contributions by the employers			—				312,125
Actual payments			(11,791	)			(71,756	)
Ending balance		W	1,182,947				1,188,907

In addition, loss on accumulated remeasurement component amounted to W200,692 million and W222,997 million has been recognized as other comprehensive income or loss for the three-month period ended March 31, 2017 and for the year ended December 31, 2016, respectively.

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March 31, 2017

(Unaudited)

25. Employment Benefits, Continued

(7) Details of the fair value of plan assets as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Equity instruments		W	87,483				86,054
Debt instruments			418,285				383,654
Bank deposit			292,915				305,670
Others			384,264				413,529
		W	1,182,947				1,188,907

For the three-month period ended March 31, 2017 and for the year ended December 31, 2016, actual returns on plan assets amounted to W5,831 million and W17,906 million, respectively.

(8) Remeasurement component recognized in other comprehensive income (loss) for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Actuarial gain from changes in financial assumptions		W	(42,135	)			(27,792	)
Experience adjustments			37,020				148,785
Expected return			1,766				5,706
		W	(3,349	)			126,699

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

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March 31, 2017

(Unaudited)

26. Provisions

(1) Provisions as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Current				Non-current				Current				Non-current
Employment benefits
Provisions for employment benefits		W	879,081				—				810,607				—
Litigation
Litigation provisions			84,872				32,810				79,359				118,878
Decommissioning cost
Nuclear plants			—				10,286,203				—				10,195,928
Spent fuel			—				1,374,560				—				1,374,225
Waste			2,566				1,475,118				2,566				1,476,936
PCBs			—				189,396				—				191,744
Other recovery provisions			—				514				—				507
Others
Power plant regional support program			207,027				—				152,851				—
Transmission regional support program			359,585				—				282,608				—
Provisions for tax			47				136				106				136
Provisions for financial guarantee			370				28,060				458				29,207
Provisions for RPS			458,971				—				417,404				—
Provisions for greenhouse gas emissions obligations			340,279				—				249,644				—
Others			31,809				8,902				4,385				39,590
		W	2,364,607				13,395,699				1,999,988				13,427,151

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March 31, 2017

(Unaudited)

26. Provisions, Continued

(2) Changes in provisions for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Beginning balance				Increase in provision				Payment				Reversal				Other				Ending balance
Employment benefits
Provisions for employment benefits		W	810,607				196,233				(127,759	)			—				—				879,081
Litigation
Litigation provisions			198,237				9,809				(89,362	)			(1,270	)			268				117,682
Decommissioning cost
Nuclear plants			10,195,928				90,519				(244	)			—				—				10,286,203
Spent fuel			1,374,225				102,036				(101,701	)			—				—				1,374,560
Waste			1,479,502				5,504				(7,322	)			—				—				1,477,684
PCBs			191,744				1,327				(3,675	)			—				—				189,396
Other recovery provisions			507				7				—				—				—				514
Others
Power plant regional support program			152,851				49,559				(6,138	)			—				10,755				207,027
Transmission regional support program			282,608				103,442				(26,465	)			—				—				359,585
Provisions for tax			242				—				(53	)			—				(6	)			183
Provisions for financial guarantee			29,665				1,668				—				(2,898	)			(5	)			28,430
Provisions for RPS			417,404				125,282				(38,174	)			(45,541	)			—				458,971
Provisions for greenhouse gas emissions obligations			249,644				91,935				—				(1,300	)			—				340,279
Others			43,975				108				(697	)			—				(2,675	)			40,711
		W	15,427,139				777,429				(401,590	)			(51,009	)			8,337				15,760,306
In millions of won		December 31, 2016
		Beginning balance				Increase in provision				Payment				Reversal				Other				Ending balance
Employment benefits
Provisions for employment benefits		W	718,365				1,047,342				(947,982	)			(7,108	)			(10	)			810,607
Litigation
Litigation provisions			167,965				124,931				(294,403	)			(20,736	)			220,480				198,237
Decommissioning cost
Nuclear plants			9,684,286				513,383				(1,741	)			—				—				10,195,928
Spent fuel			1,375,185				469,982				(470,942	)			—				—				1,374,225
Waste			1,502,140				49,092				(71,998	)			—				268				1,479,502
PCBs			182,400				30,675				(21,331	)			—				—				191,744
Other recovery provisions			862				—				—				(20	)			(335	)			507
Others
Power plant regional support program			129,655				50,252				(41,540	)			—				14,484				152,851
Transmission regional support program			228,785				253,664				(199,841	)			—				—				282,608
Provisions for tax			136				125				—				—				(19	)			242
Provisions for financial guarantee			4,288				29,741				—				(4,298	)			(66	)			29,665
Provisions for RPS			363,178				420,154				(309,975	)			(55,953	)			—				417,404
Provisions for greenhouse gas emissions obligations			78,829				298,618				(116,336	)			(11,467	)			—				249,644
Others			7,856				37,491				(2,699	)			(9	)			1,336				43,975
		W	14,443,930				3,325,450				(2,478,788	)			(99,591	)			236,138				15,427,139

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

27. Government Grants

(1) Government grants as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Land		W	(21,973	)			(3,204	)
Buildings			(60,416	)			(61,188	)
Structures			(195,739	)			(197,641	)
Machinery			(108,118	)			(111,064	)
Vehicles			(390	)			(107	)
Equipment			(645	)			(732	)
Tools			(356	)			(430	)
Construction-in-progress			(139,188	)			(135,807	)
Investment properties			(65	)			(64	)
Software			(532	)			(595	)
Development expenditures			(4,429	)			(5,152	)
Intangible assets under development			(11,309	)			(11,090	)
Usage rights of donated assets and other			(19	)			(21	)
Others			—				—
		W	(543,179	)			(527,095	)

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March 31, 2017

(Unaudited)

27. Government Grants, Continued

(2) Changes in government grants for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Beginning balance				Receipt				Acquisition				Offset the items of depreciation expense and others				Disposal				Others				Ending balance
Cash		W	—				(24,640	)			—				—				—				24,640				—
Land			(3,204	)			—				—				—				—				(18,769	)			(21,973	)
Buildings			(61,188	)			—				—				1,525				—				(753	)			(60,416	)
Structures			(197,641	)			—				—				2,434				390				(922	)			(195,739	)
Machinery			(111,064	)			—				—				3,130				103				(287	)			(108,118	)
Vehicles			(107	)			—				—				16				—				(299	)			(390	)
Equipment			(732	)			—				—				87				—				—				(645	)
Tools			(430	)			—				—				74				—				—				(356	)
Construction-in-progress			(135,807	)			—				19,785				—				—				(23,166	)			(139,188	)
Investment properties			(64	)			—				—				—				—				(1	)			(65	)
Software			(595	)			—				—				63				—				—				(532	)
Development expenditures			(5,152	)			—				—				723				—				—				(4,429	)
Intangible assets under development			(11,090	)			—				—				—				—				(219	)			(11,309	)
Usage rights of donated assets and other			(21	)			—				—				2				—				—				(19	)
Others			—				—				—				—				—				—				—
		W	(527,095	)			(24,640	)			19,785				8,054				493				(19,776	)			(543,179	)
In millions of won		December 31, 2016
		Beginning balance				Receipt				Acquisition				Offset the items of depreciation expense and others				Disposal				Others				Ending balance
Cash		W	—				(32,878	)			—				—				—				32,878				—
Land			(3,147	)			—				—				—				14				(71	)			(3,204	)
Buildings			(63,932	)			—				—				5,299				731				(3,286	)			(61,188	)
Structures			(193,119	)			—				—				9,491				2,597				(16,610	)			(197,641	)
Machinery			(108,935	)			—				—				12,272				1,210				(15,611	)			(111,064	)
Vehicles			(29	)			—				—				25				—				(103	)			(107	)
Equipment			(1,026	)			—				—				452				—				(158	)			(732	)
Tools			(691	)			—				—				295				—				(34	)			(430	)
Construction-in-progress			(139,898	)			—				32,525				—				—				(28,434	)			(135,807	)
Investment properties			(13	)			—				—				1				—				(52	)			(64	)
Software			(699	)			—				—				249				—				(145	)			(595	)
Development expenditures			(6,835	)			—				—				2,771				—				(1,088	)			(5,152	)
Intangible assets under development			(10,483	)			—				991				—				—				(1,598	)			(11,090	)
Usage rights of donated assets and other			(32	)			—				—				11				—				—				(21	)
Others			(1	)			—				—				1				—				—				—
		W	(528,840	)			(32,878	)			33,516				30,867				4,552				(34,312	)			(527,095	)

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

28. Deferred Revenues

Deferred revenue related to the Company’s construction contracts as of March 31, 2017 and December 31, 2016 are as follows which included in current and non-current non-financial liabilities in the consolidated statements of financial position:

In millions of won		March 31, 2017				December 31, 2016
Beginning balance		W	7,825,765				7,165,297
Increase during the current year / period			259,592				1,087,765
Recognized as revenue during the current year / period			(116,146	)			(427,297	)
Ending balance		W	7,969,211				7,825,765

29. Non-financial Liabilities

Non-financial liabilities as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Current				Non-current				Current				Non-current
Advance received		W	4,611,784				174,823				4,498,739				148,404
Unearned revenue			32,629				36,384				26,084				41,936
Deferred revenue			452,901				7,516,310				445,018				7,380,747
Withholdings			294,479				10,125				263,263				10,781
Others			1,116,507				12,271				1,135,106				9,737
		W	6,508,300				7,749,913				6,368,210				7,591,605

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

30. Contributed Capital

(1) Details of shares issued as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won except share information

March 31, 2017

Shares authorized

Shares issued

Par value per share

Owned by government (*)

Owned by others

Total

Common shares

1,200,000,000

641,964,077

W

5,000

1,640,385

1,569,435

3,209,820

(*) Korea Development Bank’s ownership of W1,056,176 million is included.

In millions of won except share information

December 31, 2016

Shares authorized

Shares issued

Par value per share

Owned by government (*)

Owned by others

Total

Common shares

1,200,000,000

641,964,077

W

5,000

1,640,385

1,569,435

3,209,820

(*) Korea Development Bank’s ownership of W1,056,176 million is included.

(2) Details in number of outstanding capital stock for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

Number of shares		March 31, 2017				December 31, 2016
Beginning balance			641,964,077				641,964,077
Ending balance			641,964,077				641,964,077

(3) Details of share premium as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Share premium		W	843,758				843,758

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March 31, 2017

(Unaudited)

31. Retained Earnings and Dividends Paid

(1) Details of retained earnings as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Legal reserve (*)		W	1,604,910				1,604,910
Voluntary reserves			34,833,844				31,847,275
Retained earnings before appropriations			16,330,858				19,721,686
Retained earnings		W	52,769,612				53,173,871

(*) 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 March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Reserve for investment on social overhead capital		W	5,277,449				5,277,449
Reserve for research and human development (*)			330,000				330,000
Reserve for business expansion			29,016,395				26,029,826
Reserve for equalizing dividends			210,000				210,000
		W	34,833,844				31,847,275

(*) The reserve for research and human development is appropriated by KEPCO to use as qualified tax credits to reduce corporate tax liabilities. The reserve is available for cash dividends for a certain period as defined by the Tax Incentive Control Law of Korea.

(3) Changes in retained earnings for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Beginning balance		W	53,173,871				48,187,241
Net profit for the period attributed to owner of the Company			866,913				7,048,581
Changes in equity method retained earnings			(1,895	)			(2,532	)
Remeasurement of defined benefit liability, net of tax			1,812				(69,330	)
Dividend paid			(1,271,089	)			(1,990,089	)
Ending balance		W	52,769,612				53,173,871

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March 31, 2017

(Unaudited)

31. Retained Earnings and Dividends Paid, Continued

(4) Dividends paid for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won

March 31, 2017

Number of shares issued

Number of treasury stocks

Number of shares eligible for dividends

Dividends paid per share (In won)

Dividends paid

Common shares

641,964,077

—

641,964,077

W

1,980

1,271,089

In millions of won

December 31, 2016

Number of shares issued

Number of treasury stocks

Number of shares eligible for dividends

Dividends paid per share (In won)

Dividends paid

Common shares

641,964,077

—

641,964,077

W

3,100

1,990,089

(5) Changes in retained earnings of investments in associates and joint ventures for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows :

In millions of won		March 31, 2017				December 31, 2016
Beginning balance		W	(4,943	)			(2,411	)
Changes			(1,895	)			(2,532	)
Ending balance		W	(6,838	)			(4,943	)

(6) Changes in remeasurement components related to defined benefit liability for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows :

In millions of won		March 31, 2017				December 31, 2016
Beginning balance		W	(222,997	)			(202,878	)
Changes			4,504				(119,316	)
Income tax effect			(2,692	)			49,986
Transfer to reserve for business expansion			20,493				49,211
Ending balance		W	(200,692	)			(222,997	)

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March 31, 2017

(Unaudited)

32. Hybrid Bonds

Bond-type hybrid securities classified as equity (non-controlling interest) as of March 31, 2017 are as follows:

In millions of won
Issuer		Hybrid bond				Issued date				Maturity				Yield (%)				Amount
Korea Western Power Co., Ltd.			1st bond-type hybrid bond				2012.10.18				2042.10.18				5yr government bond rate+1.20			W	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	)
																		W	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.

33. Other Components of Equity

(1) Other components of equity as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Other capital surplus		W	1,235,146				1,235,146
Accumulated other comprehensive loss			(234,952	)			(33,875	)
Other equity			13,294,973				13,294,973
		W	14,295,167				14,496,244

(2) Changes in other capital surplus for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017												December 31, 2016
		Gain on disposal of treasury stocks				Others				Subtotal				Gain on disposal of treasury stocks				Others				Subtotal
Beginning balance		W	387,524				847,622				1,235,146				387,524				809,864				1,197,388
Disposal of subsidiary			—				—				—				—				36,008				36,008
Issuance of share capital of subsidiary			—				—				—				—				1,750				1,750
Ending balance		W	387,524				847,622				1,235,146				387,524				847,622				1,235,146

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March 31, 2017

(Unaudited)

33. Other Components of Equity, Continued

(3) Changes in accumulated other comprehensive income (loss) for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017
		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 loss on valuation of derivatives				Total
Beginning balance		W	36,370				221,455				(223,056	)			(68,644	)			(33,875	)
Changes in the unrealized fair value of available-for-sale financial assets, net of tax			(1,172	)			—				—				—				(1,172	)
Shares in other comprehensive income of associates and joint ventures, net of tax			—				(103,577	)			—				—				(103,577	)
Foreign currency translation of foreign operations, net of tax			—				—				(90,391	)			—				(90,391	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—				—				—				(5,937	)			(5,937	)
Ending balance		W	35,198				117,878				(313,447	)			(74,581	)			(234,952	)
In millions of won		December 31, 2016
		Available-for-sale financial asset valuation reserve				Shares in other comprehensive Income (loss) of investments in associates and joint ventures				Reserve for overseas operations translation credit				Reserve for gain (loss) on valuation of derivatives				Total
Beginning balance		W	(24,905	)			276,373				(254,462	)			(95,719	)			(98,713	)
Changes in the unrealized fair value of available-for-sale financial assets, net of tax			61,275				—				—				—				61,275
Shares in other comprehensive loss of associates and joint ventures, net of tax			—				(54,918	)			—				—				(54,918	)
Foreign currency translation of foreign operations, net of tax			—				—				31,406				—				31,406
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			—				—				—				27,075				27,075
Ending balance		W	36,370				221,455				(223,056	)			(68,644	)			(33,875	)

(4) Details of other equity for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Statutory revaluation reserve		W	13,295,098				13,295,098
Changes in other equity			(125	)			(125	)
		W	13,294,973				13,294,973

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March 31, 2017

(Unaudited)

34. Sales

Details of sales for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017												March 31, 2016
		Domestic				Overseas				Total				Domestic				Overseas				Total
Sales of goods		W	14,202,229				97,237				14,299,466				14,416,220				85,714				14,501,934
Electricity			13,943,350				—				13,943,350				14,182,195				—				14,182,195
Heat supply			120,857				—				120,857				112,964				—				112,964
Others			138,022				97,237				235,259				121,061				85,714				206,775
Sales of service			39,999				31,906				71,905				40,788				62,842				103,630
Sales of construction services			16,978				642,114				659,092				26,337				955,508				981,845
Revenue related to transfer of assets from customers			116,146				—				116,146				97,918				—				97,918
		W	14,375,352				771,257				15,146,609				14,581,263				1,104,064				15,685,327

35. Selling and Administrative Expenses

Selling and administrative expenses for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Salaries		W	177,131				168,307
Retirement benefit expense			16,522				16,073
Welfare and benefit expense			26,529				23,677
Insurance expense			3,482				2,980
Depreciation			49,108				36,527
Amortization of intangible assets			10,060				8,983
Bad debt expense			3,967				5,038
Commission			143,499				135,487
Advertising expense			8,914				6,669
Training expense			1,297				896
Vehicle maintenance expense			2,298				2,119
Publishing expense			1,092				769
Business development expense			918				889
Rent expense			7,123				8,572
Telecommunication expense			6,322				6,599
Transportation expense			131				125
Taxes and dues			4,129				3,856
Expendable supplies expense			1,808				1,274
Water, light and heating expense			3,425				3,049
Repairs and maintenance expense			7,806				7,961
Ordinary development expense			40,078				35,170
Travel expense			4,380				4,348
Clothing expense			305				240
Survey and analysis expense			174				156
Membership fee			479				599
Others			32,005				28,494
		W	552,982				508,857

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March 31, 2017

(Unaudited)

36. Other Non-operating Income and Expense

(1) Other non-operating income for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won				March 31, 2017				March 31, 2016
Reversal of other provisions				W	1,210				4,537
Reversal of other allowance for bad debt					—				987
Gains on government grants					36				36
Gains on assets contributed					7				1,328
Gains on liabilities exempted					505				3
Compensation and reparations revenue					24,180				24,130
Revenue from research contracts					1,976				834
Rental income					46,425				54,184
Others					11,077				6,263
				W	85,416				92,302

(2) Other non-operating expense for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Accretion expenses of other provisions		W	6,746				49
Depreciation expenses on investment properties			408				198
Depreciation expenses on idle assets			1,664				1,670
Other bad debt expense			3,988				3,945
Donations			19,607				11,661
Others			4,021				3,179
		W	36,434				20,702

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March 31, 2017

(Unaudited)

37. Other Gains (Losses)

Composition of other gains (losses) for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Other gains
Gains on disposal of property, plant and equipment		W	11,029				18,598
Gains on disposal of intangible assets			463				—
Gains on foreign currency translation			18,117				8,791
Gains on foreign currency transaction			44,190				11,216
Gains on insurance proceeds			383				—
Others			107,594				49,412
Other losses
Losses on disposal of property, plant and equipment			(7,867	)			(4,260	)
Losses on disposal of intangible assets			—				(134	)
Losses on foreign currency translation			(15,157	)			(8,115	)
Losses on foreign currency transaction			(11,410	)			(19,935	)
Others			(18,330	)			(15,670	)
		W	129,012				39,903

38. Finance Income

(1) Finance Income for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Interest income		W	54,457				80,319
Dividends income			9,677				9,367
Gains on disposal of financial assets			494				1,480
Gains on valuation of derivatives			2,749				28,864
Gains on transaction of derivatives			7,864				13,955
Gains on foreign currency translation			799,717				213,346
Gains on foreign currency transaction			22,328				5,090
Other finance income			—				1
		W	897,286				352,422

(2) Interest income included in finance income for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Cash and cash equivalents		W	8,372				20,683
Held-to-maturity investments			29				25
Loans and receivables			5,545				6,938
Short-term financial instrument			6,234				19,051
Long-term financial instrument			788				2,561
Trade and other receivables			33,489				31,061
		W	54,457				80,319

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March 31, 2017

(Unaudited)

39. Finance Expenses

(1) Finance expenses for the for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Interest expense		W	440,954				458,235
Losses on sale of financial assets			1,038				—
Losses on valuation of derivatives			706,224				156,281
Losses on transaction of derivatives			47,478				10,854
Losses on foreign currency translation			101,858				66,543
Losses on foreign currency transaction			11,593				27,613
Other			311				109
		W	1,309,456				719,635

(2) Interest expense included in finance expenses for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Trade and other payables		W	13,449				16,403
Short-term borrowings			6,037				1,480
Long-term borrowings			23,520				22,570
Debt securities			428,366				499,298
Other financial liabilities			123,616				120,823
			594,988				660,574
Less: Capitalized borrowing costs			(154,034	)			(202,339	)
		W	440,954				458,235

Capitalization rates for the three-month periods ended March 31, 2017 and 2016 are 2.28%~3.58% and 2.25%~4.00% respectively.

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March 31, 2017

(Unaudited)

40. Income Taxes

(1) Income tax expense for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Current income tax expense
Payment of income tax		W	397,435				1,063,284
Adjustment due to changes in estimates related to prior years			(78,424	)			40,548
Current income tax directly recognized in equity			31,268				57,630
			350,279				1,161,462
Deferred income tax expense
Generation and realization of temporary differences			228,080				190,085
Changes of unrecognized tax losses, tax credit and temporary differences for prior periods			31,520				(8,082	)
Changes in deferred tax on tax losses carryforwards			(120,350	)			—
Tax credit carryforwards			—				2,260
			139,250				184,263
Income tax expense		W	489,529				1,345,725

(2) Reconciliation between actual income tax expense and amount computed by applying the statutory tax rate of 24.2% to income before income taxes for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Income before income tax		W	1,389,560				3,508,558
Income tax expense computed at applicable tax rate of 24.2%			336,274				849,071
Adjustments
Effect of applying gradual tax rate			(1,040	)			(2,538	)
Effect of non-taxable income			(863	)			(4,614	)
Effect of non-deductible expenses			894				9,337
Effects of tax credits and deduction			(103,425	)			(18,290	)
Recognition (reversal) of unrecognized deferred tax asset, net			31,520				(8,082	)
Deferred income tax related to investments in subsidiaries and associates			297,808				486,209
Others, net			6,785				(5,916	)
			231,679				456,106
Adjustment in respect of prior years due to change in estimate			(78,424	)			40,548
Income tax expense		W	489,529				1,345,725
Effective tax rate			35.20	%			38.40	%

(3) Income tax directly adjusted to shareholders’ equity (except for accumulated other comprehensive income (loss)) for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Dividends of hybrid securities		W	1,334				1,313

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March 31, 2017

(Unaudited)

40. Income Taxes, Continued

(4) Income tax recognized as other comprehensive income (loss) for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017				March 31, 2016
Income tax recognized as other comprehensive income (loss)
Gain (loss) on valuation of available-for-sale financial assets		W	451				(8,938	)
Net change in the unrealized fair value of derivatives using cash flow hedge accounting, net of tax			4,396				9,468
Remeasurements of defined benefit obligations			(2,692	)			52,698
Investments in associates			8,130				1,767
Others			19,649				1,322
		W	29,934				56,317

(5) Changes in deferred income tax assets (liabilities) recognized in the statements of financial position for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017
		Beginning balance				Amounts recognized in profit or loss				Amount recognized in other comprehensive income (loss)				Amounts recognized directly in equity				Ending balance
Deferred income tax on temporary differences
Employee benefits		W	493,331				26,292				(2,692	)			—				516,931
Cash flow hedge			(53,583	)			93,227				4,396				—				44,040
Investments in associates or subsidiaries			(7,166,345	)			(287,784	)			8,130				—				(7,445,999	)
Property, plant and equipment			(5,527,318	)			(127,913	)			—				—				(5,655,231	)
Finance lease			(345,431	)			(18,612	)			—				—				(364,043	)
Intangible assets			8,987				46				—				—				9,033
Financial assets at fair value through profit or loss			(62	)			419				—				—				357
Available-for-sale financial assets			(68,347	)			(2,207	)			451				—				(70,103	)
Deferred revenue			213,859				(793	)			—				—				213,066
Provisions			3,583,371				59,713				—				—				3,643,084
Doubtful receivables			2,696				—				—				—				2,696
Other finance liabilities			30,249				19,454				—				1,334				51,037
Gains on foreign exchange translation			138,938				(92,640	)			—				—				46,298
Allowance for doubtful accounts			17,252				(13,361	)			—				—				3,891
Accrued income			(5,367	)			995				—				—				(4,372	)
Special deduction for property, plant and equipment			(194,309	)			74				—				—				(194,235	)
Reserve for research and human development			(12,883	)			1,842				—				—				(11,041	)
Others			695,870				50,384				19,649				—				765,903
			(8,189,092	)			(290,864	)			29,934				1,334				(8,448,688	)
Deferred income tax on unused tax losses and tax credit
Tax losses			—				120,346				—				—				120,346
Tax credit			35,703				—				—				—				35,703
			35,703				120,346				—				—				156,049
		W	(8,153,389)				(170,518	)			29,934				1,334				(8,292,639	)

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March 31, 2017

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40. Income Taxes, Continued

(5) Changes in deferred income tax assets (liabilities) recognized in the statements of financial position for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows, continued:

In millions of won		December 31, 2016
		Beginning balance				Amounts recognized in profit or loss				Amount recognized in other comprehensive income (loss)				Amounts recognized directly in equity				Ending balance
Deferred income tax on temporary differences
Employee benefits		W	407,342				36,003				49,986				—				493,331
Cash flow hedge			(29,013	)			(6,235	)			(18,335	)			—				(53,583	)
Investments in associates or subsidiaries			(6,449,998	)			(717,072	)			7,731				(7,006	)			(7,166,345	)
Property, plant and equipment			(5,495,786	)			(31,532	)			—				—				(5,527,318	)
Finance lease			(272,430	)			(73,001	)			—				—				(345,431	)
Intangible assets			9,420				(433	)			—				—				8,987
Financial assets at fair value through profit or loss			(4	)			(58	)			—				—				(62	)
Available-for-sale financial assets			(49,199	)			(11,005	)			(8,143	)			—				(68,347	)
Deferred revenue			215,361				(1,502	)			—				—				213,859
Provisions			3,372,423				210,948				—				—				3,583,371
Doubtful receivables			1,405				1,291				—				—				2,696
Other finance liabilities			26,298				(1,302	)			—				5,253				30,249
Gains or losses on foreign exchange translation			128,714				10,224				—				—				138,938
Allowance for doubtful accounts			18,976				(1,724	)			—				—				17,252
Accrued income			(11,231	)			5,864				—				—				(5,367	)
Special deduction for property, plant and equipment			(194,347	)			38				—				—				(194,309	)
Reserve for research and human development			(20,688	)			7,805				—				—				(12,883	)
Others			576,585				118,712				573				—				695,870
			(7,766,172	)			(452,979	)			31,812				(1,753	)			(8,189,092	)
Deferred income tax on unused tax losses and tax credit
Tax losses			(3	)			3				—				—				—
Tax credit			27,115				8,588				—				—				35,703
			27,112				8,591				—				—				35,703
		W	(7,739,060	)			(444,388	)			31,812				(1,753	)			(8,153,389	)

(6) Deferred income tax assets (liabilities) recognized in the statements of financial position as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Deferred income tax assets		W	790,712				795,131
Deferred income tax liabilities			(9,083,351	)			(8,948,520	)
		W	(8,292,639	)			(8,153,389	)

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March 31, 2017

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40. Income Taxes, Continued

(7) Details of deductible temporary differences, tax losses and unused tax credits not recognized in the deferred income tax assets as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Deductible temporary differences		W	426,425				426,718

41. Assets Held-for-Sale

Assets held-for-sale as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Land (*1)		W	2,765				2,907
Building (*1)			19,369				20,366
Investments in associates (*2, 3)			42,569				42,569
		W	64,703				65,842

(*1) 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.

(*2) 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.

(*3) Korea Hydro & Nuclear Power Co., Ltd., a subsidiary of the Company, reclassified its investments in Yeongwol Energy Station Co., Ltd. to assets held-for-sale according to the shareholders’ agreement. The reclassified amount is determined as using the lower amount of either the book value or fair value less costs to sell.

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March 31, 2017

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42. Expenses Classified by Nature

Expenses classified by nature for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017
		Selling and administrative expenses				Cost of sales				Total
Raw materials used		W	—				4,120,542				4,120,542
Salaries			177,131				792,201				969,332
Retirement benefit expense			16,522				92,097				108,619
Welfare and benefit expense			26,529				93,736				120,265
Insurance expense			3,482				19,590				23,072
Depreciation			49,108				2,318,658				2,367,766
Amortization of intangible assets			10,060				23,963				34,023
Bad debt expense			3,967				—				3,967
Commission			143,499				113,207				256,706
Advertising expense			8,914				1,477				10,391
Training expense			1,297				1,986				3,283
Vehicle maintenance expense			2,298				1,763				4,061
Publishing expense			1,092				709				1,801
Business development expense			918				1,324				2,242
Rent expense			7,123				31,079				38,202
Telecommunication expense			6,322				18,156				24,478
Transportation expense			131				3,204				3,335
Taxes and dues			4,129				86,066				90,195
Expendable supplies expense			1,808				7,414				9,222
Water, light and heating expense			3,425				9,557				12,982
Repairs and maintenance expense			7,806				407,791				415,597
Ordinary development expense			40,078				100,448				140,526
Travel expense			4,380				16,990				21,370
Clothing expense			305				196				501
Survey and analysis expense			174				285				459
Membership fee			479				1,920				2,399
Power purchase			—				3,824,272				3,824,272
Others			32,005				1,041,810				1,073,815
		W	552,982				13,130,441				13,683,423

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

42. Expenses Classified by Nature, Continued.

Expenses classified by nature for the three-month periods ended March 31, 2017 and 2016 are as follows, continued:

In millions of won		March 31, 2016
		Selling and administrative expenses				Cost of sales				Total
Raw materials used		W	—				3,422,209				3,422,209
Salaries			168,307				741,259				909,566
Retirement benefit expense			16,073				85,174				101,247
Welfare and benefit expense			23,677				82,301				105,978
Insurance expense			2,980				22,087				25,067
Depreciation			36,527				2,103,847				2,140,374
Amortization of intangible assets			8,983				11,113				20,096
Bad debt expense			5,038				—				5,038
Commission			135,487				100,069				235,556
Advertising expense			6,669				1,589				8,258
Training expense			896				2,259				3,155
Vehicle maintenance expense			2,119				1,597				3,716
Publishing expense			769				814				1,583
Business development expense			889				1,179				2,068
Rent expense			8,572				29,496				38,068
Telecommunication expense			6,599				20,219				26,818
Transportation expense			125				1,090				1,215
Taxes and dues			3,856				89,565				93,421
Expendable supplies expense			1,274				6,530				7,804
Water, light and heating expense			3,049				8,027				11,076
Repairs and maintenance expense			7,961				353,926				361,887
Ordinary development expense			35,170				89,614				124,784
Travel expense			4,348				15,630				19,978
Clothing expense			240				171				411
Survey and analysis expense			156				691				847
Membership fee			599				2,096				2,695
Power purchase			—				3,098,695				3,098,695
Others			28,494				1,279,876				1,308,370
		W	508,857				11,571,123				12,079,980

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

43. Earnings Per Share

(1) Basic earnings per share for the three-month periods ended March 31, 2017 and 2016 are as follows:

In won
Type		March 31, 2017				March 31, 2016
Basic earnings per share		W	1,350				3,326

(2) Net profit for the period and weighted average number of common shares used in the calculation of basic earnings per share for the three-month periods ended March 31, 2017 and 2016 are as follows

In millions of won except number of shares
Type		March 31, 2017				March 31, 2016
Controlling interest in net income		W	866,913				2,135,450
Profit used in the calculation of total basic earnings per share			866,913				2,135,450
Weighted average number of common shares			641,964,077				641,964,077

(3) Weighted average number of common shares used in the calculation of basic earnings per share for the three-month periods ended March 31, 2017 and 2016 are as follows:

In number of shares
Type		March 31, 2017				March 31, 2016
The number of common shares issued at beginning of the year			641,964,077				641,964,077
Weighted average number of common shares			641,964,077				641,964,077

(4) There are no potential dilutive instruments and diluted earnings per share are same as basic earnings per share for the three-month periods ended March 31, 2017 and 2016.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

44. 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 consistent with the prior year.

Details of the Company’s capital management accounts as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Total borrowings and debt securities		W	52,969,592				53,639,205
Cash and cash equivalents			3,187,640				3,051,353
Net borrowings and debt securities			49,781,952				50,587,852
Total shareholder’s equity			72,430,054				73,050,545
Debt to equity ratio			68.73	%			69.25	%

(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 consistent with 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 group of assets which individually are not material and (ii) incurred but not recognized losses that are assessed using statistical methods, judgment and past experience.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

44. Risk Management, Continued.

(2) Financial risk management, continued

Book values of the financial assets represent the maximum exposed amounts of the credit risk. Details of the Company’s level of maximum exposure to credit risk as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017				December 31, 2016
Cash and cash equivalents		W	3,187,640				3,051,353
Derivative assets (trading)			99,317				367,477
Available-for-sale financial assets			908,374				1,014,732
Held-to-maturity investments			3,126				3,244
Loans and receivables			933,846				834,207
Long-term/short-term financial instruments			2,425,768				2,695,926
Derivative assets (using hedge accounting)			51,679				413,897
Trade and other receivables			8,435,079				9,692,391
Financial guarantee contracts (*)			1,172,237				1,396,152

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

As of the reporting date, there are no financial assets and non-financial assets that were acquired through the exercise of the right of collateralized assets and reinforcement of credit arrangement.

(ii) Market risk

Market risk is the risk that the 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.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

44. Risk Management, Continued.

(2) Financial risk management, continued

(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 March 31, 2017 and December 31, 2016 are as follows:

In millions of won				March 31, 2017								December 31, 2016
Type		Accounts		1% Increase				1% Decrease				1% Increase				1% Decrease
Future salary increases		Increase (decrease) in defined benefit obligation		W	353,817				(312,989	)			344,874				(304,685	)
Discount rate		Increase (decrease) in defined benefit obligation			(314,595)				373,050				(305,031	)			371,689

Changes of employee benefits assuming a 1% increase and decrease movements in discount rate on plan asset for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are W2,972 million and W2,312 million, respectively.

② Provisions

Changes in provisions due to movements in underlying assumptions as of March 31, 2017 and December 31, 2016 are as follows:

Type		Accounts		March 31, 2017				December 31, 2016
PCBs		Inflation rate			1.29	%			1.29	%
		Discount rate			2.77	%			2.77	%
Nuclear plants		Inflation rate			1.40	%			1.40	%
		Discount rate			3.55	%			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 March 31, 2017 and December 31, 2016 are as follows:

In millions of won				March 31, 2017								December 31, 2016
Type		Accounts		0.1% Increase				0.1% Decrease				0.1% Increase				0.1% Decrease
Discount rate		PCBs		W	(775	)			780				(817	)			822
		Nuclear plants			(208,678)				214,487				(209,277	)			215,139
		Spent fuel			(52,365	)			54,400				(52,353	)			54,387
Inflation rate		PCBs			839				(835	)			834				(830	)
		Nuclear plants			242,219				(235,599	)			240,115				(233,553	)
		Spent fuel			55,186				(53,194	)			55,173				(53,182	)

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

44. Risk Management, Continued.

(2) Financial risk management, continued

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 March 31, 2017 and December 31, 2016 are as follows:

In thousands of foreign currencies		Assets								Liabilities
Type		March 31, 2017				December 31, 2016				March 31, 2017				December 31, 2016
AED			7,884				7,479				1,984				1,534
AUD			174				187				629,840				632,613
BDT			56,174				49,110				1,947				833
BWP			1,318				4,296				—				3,222
CAD			—				—				29				—
CHF			—				—				400,010				400,308
CNY			—				—				26,140				—
EUR			6,435				17,585				13,743				14,111
GBP			3				3				12				110
IDR			59,568				52,568				—				—
INR			1,046,934				1,059,092				130,710				161,631
IRR			—				—				6,500				—
JOD			1,505				1,746				5				5
JPY			743,707				520,746				21,015,258				20,442,504
KZT			12,157				12,157				—				—
MGA			4,551,513				3,408,579				81,786				150,430
PHP			325,040				415,818				116,736				136,700
PKR			180,448				274,090				2,846				5,051
SAR			1,194				1,149				—				—
USD			1,224,392				1,319,524				8,670,207				9,445,567
UYU			1,202				1,307				458				586
ZAR			369				386				3				75

A sensitivity analysis on the Company’s income for the period assuming a 10% increase and decrease in currency exchange rates as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
Type		10% Increase				10% Decrease				10% Increase				10% Decrease
Increase (decrease) of income before income tax		W	(947,990	)			947,990				(1,101,372	)			1,101,372
Increase (decrease) of shareholder’s equity (*)			(947,990	)			947,990				(1,101,372	)			1,101,372

(*) 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 March 31, 2017 and December 31, 2016.

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.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

44. Risk Management, Continued.

(2) Financial risk management, continued

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 March 31, 2017 and December 31, 2016 are as follows:

In millions of won
Type		March 31, 2017				December 31, 2016
Short-term borrowings		W	267,351				289,322
Long-term borrowings			1,395,280				1,459,969
Debt securities			1,314,490				1,518,500
		W	2,977,121				3,267,791

A sensitivity analysis on the Company’s long-term borrowings and debt securities assuming a 1% increase and decrease in interest rates, without consideration of hedge effect of related derivatives for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
Type		1% Increase				1% Decrease				1% Increase				1% Decrease
Increase (decrease) of profit before income tax		W	(29,771	)			29,771				(32,678	)			32,678
Increase (decrease) of shareholder’s equity (*)			(29,771	)			29,771				(32,678	)			32,678

(*) 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 three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won		March 31, 2017								March 31, 2016
Type		1% Increase				1% Decrease				1% Increase				1% Decrease
Increase (decrease) of profit before income tax		W	139,433				(139,433	)			141,822				(141,822	)
Increase (decrease) of shareholder’s equity (*)			139,433				(139,433	)			141,822				(141,822	)

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

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March 31, 2017

(Unaudited)

44. Risk Management, Continued.

(2) Financial risk management, continued

(iv) Liquidity risk

The Company has established an appropriate liquidity risk management framework for the management of the Company’s short, medium and long-term funding and liquidity management requirements. The Company manages liquidity risk by continuously monitoring forecasted and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

In addition, the Company has established credit lines on its trade financing and bank overdrafts, and through payment guarantees it has received, it maintains an adequate credit (borrowing) line. In addition, the Company has the ability to utilize excess cash or long-term borrowings for major construction investments.

The following table shows the details of maturities of non-derivative financial liabilities as of March 31, 2017 and December 31, 2016. This table, based on the undiscounted cash flows of the non-derivative financial liabilities including estimated interests, has been prepared based on the respective liabilities’ earliest maturity date.

In millions of won		March 31, 2017
Type		Less than 1 year				1~2 Years				2~5 Years				More than 5 years				Total
Borrowings and debt securities		W	11,055,521				8,986,852				20,178,691				22,986,691				63,207,755
Finance lease liabilities			175,268				152,828				218,442				141,372				687,910
Trade and other payables			6,089,223				309,973				665,728				2,176,149				9,241,073
Financial guarantee contracts (*)			111,591				33,171				805,368				222,107				1,172,237
		W	17,431,603				9,482,824				21,868,229				25,526,319				74,308,975
In millions of won		December 31, 2016
Type		Less than 1 year				1~2 Years				2~5 Years				More than 5 years				Total
Borrowings and debt securities		W	10,613,185				9,786,209				19,353,498				24,461,835				64,214,727
Finance lease liabilities			175,512				174,534				229,495				152,247				731,788
Trade and other payables			5,464,234				307,222				660,426				2,170,525				8,602,407
Financial guarantee contracts (*)			249,200				40,617				865,842				240,493				1,396,152
		W	16,502,131				10,308,582				21,109,261				27,025,100				74,945,074

(*) This represents the total guarantee amounts associated with the financial guarantee contracts. Financial guarantee liabilities which are recognized as of March 31, 2017 and December 31, 2016 are W28,430 million and W29,665 million, respectively.

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March 31, 2017

(Unaudited)

44. Risk Management, Continued.

(2) Financial risk management, continued

The expected maturities for non-derivative financial assets as of March 31, 2017 and December 31, 2016 in detail are as follows:

In millions of won		March 31, 2017
Type		Less than 1 year				1~5 Years				More than 5 years				Other (*)				Total
Cash and cash equivalents		W	3,187,640				—				—				—				3,187,640
Available-for-sale financial assets			—				—				—				908,374				908,374
Held-to-maturity investments			64				3,059				3				—				3,126
Loans and receivables			246,324				335,295				389,242				6,423				977,284
Long-term/short-term financial instruments			1,915,004				200,001				310,446				317				2,425,768
Trade and other receivables			6,649,378				907,493				816,325				69,732				8,442,928
		W	11,998,410				1,445,848				1,516,016				984,846				15,945,120
In millions of won		December 31, 2016
Type		Less than 1 year				1~5 Years				More than 5 years				Other (*)				Total
Cash and cash equivalents		W	3,051,353				—				—				—				3,051,353
Available-for-sale financial assets			—				—				—				1,014,732				1,014,732
Held-to-maturity investments			114				3,126				4				—				3,244
Loans and receivables			198,133				233,564				439,666				5,591				876,954
Long-term/short-term financial instruments			2,281,460				200,001				214,122				343				2,695,926
Trade and other receivables			7,790,953				915,679				919,901				74,199				9,700,732
		W	13,322,013				1,352,370				1,573,693				1,094,865				17,342,941

(*) The maturities cannot be presently determined.

Derivative liabilities classified by maturity periods which from reporting date to maturity date of contract as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
Type		Less than 1 year				1~2 Years				2~5 Years				More than 5 years				Total
Gross settlement
- Trading		W	(9,929	)			(29,970	)			(24,757	)			(15,612	)			(80,268	)
- Hedging			(37,588	)			(15,154	)			(74,940	)			(51,428	)			(179,110	)
		W	(47,517)				(45,124	)			(99,697	)			(67,040	)			(259,378	)
In millions of won		December 31, 2016
Type		Less than 1 year				1~2 Years				2~5 Years				More than 5 years				Total
Gross settlement
- Trading		W	(3,081	)			(24,044	)			—				(2,799	)			(29,924	)
- Hedging			(2,645	)			(2,645	)			(56,484	)			(56,575	)			(118,349	)
		W	(5,726)				(26,689	)			(56,484	)			(59,374	)			(148,273	)

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

44. Risk Management, Continued.

(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 March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
Type		Book value				Fair value				Book value				Fair value
Assets recognized at fair value
Available-for-sale financial assets (*1)		W	908,374				908,374				1,014,732				1,014,732
Derivative assets (trading)			99,317				99,317				367,477				367,477
Derivative assets (using hedge accounting)			51,679				51,679				413,897				413,897
Long-term financial instruments			510,764				510,764				414,466				414,466
Short-term financial instruments			1,915,004				1,915,004				2,281,460				2,281,460
			3,485,138				3,485,138				4,492,032				4,492,032
Assets carried at amortized cost
Held-to-maturity investments			3,126				3,126				3,244				3,244
Loans and receivables			933,846				933,846				834,207				834,207
Trade and other receivables			8,435,079				8,435,079				9,692,391				9,692,391
Cash and cash equivalents			3,187,640				3,187,640				3,051,353				3,051,353
			12,559,691				12,559,691				13,581,195				13,581,195
Liabilities recognized at fair value
Derivative liabilities (trading)			85,266				85,266				21,529				21,529
Derivative liabilities (using hedge accounting)			197,693				197,693				117,157				117,157
			282,959				282,959				138,686				138,686
Liabilities carried at amortized cost
Secured borrowings			964,912				964,912				744,565				744,565
Unsecured bond			48,414,677				51,867,857				50,749,793				54,455,659
Finance lease liabilities			510,140				510,140				541,179				541,179
Unsecured borrowings			3,583,586				3,587,782				2,089,885				2,099,574
Trade and other payables (*2)			9,241,073				9,241,073				8,602,407				8,602,407
Bank overdraft			6,417				6,417				54,962				54,962
		W	62,720,805				66,178,181				62,782,791				66,498,346

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

44. Risk Management, Continued.

(3) Fair value risk, continued

(*1) Book values of equity securities held by the Company that were measured at cost as of March 31, 2017 and December 31, 2016 are W38,629 million and W138,557 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.

(ii) Interest rates used for determining fair value

The interest rates used to discount estimated cash flows, when applicable, are based on the government yield curve at the reporting date plus an adequate credit spread.

The discount rate used for calculating fair value as of March 31, 2017 and December 31, 2016 are as follows:

Type		March 31, 2017		December 31, 2016
Derivatives		0.02% ~ 4.16%		0.02% ~ 4.16%
Borrowings and debt securities		0.02% ~ 4.38%		0.02% ~ 4.38%
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 March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017
Type		Level 1				Level 2				Level 3				Total
Financial assets at fair value
Available-for-sale financial assets		W	267,373				342,880				259,493				869,746
Derivative assets			—				140,473				10,523				150,996
		W	267,373				483,353				270,016				1,020,742
Financial liabilities at fair value
Derivative liabilities			—				282,959				—				282,959
In millions of won		December 31, 2016
Type		Level 1				Level 2				Level 3				Total
Financial assets at fair value
Available-for-sale financial assets		W	268,171				437,015				269,461				974,647
Derivative assets			—				770,851				10,523				781,374
		W	268,171				1,207,866				279,984				1,756,021
Financial liabilities at fair value
Derivative liabilities			—				138,686				—				138,686

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

44. Risk Management, Continued.

(3) Fair value risk, continued

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.

Changes of financial assets and liabilities which are classified as level 3 for the three-month period ended March 31, 2017 and for the year ended December 31, 2016 are as follows:

In millions of won

March 31, 2017

Beginning balance

Acquisition

Reclassified category

Valuation

Disposal

Foreign currency translation

Ending balance

Financial assets at fair value

Available-for-sale financial assets

Unlisted securities

W

269,461

—

—

(6

)

—

(9,962

)

259,493

In millions of won

December 31, 2016

Beginning balance

Acquisition

Reclassified category

Valuation

Disposal

Foreign currency translation

Ending balance

Financial assets at fair value

Available-for-sale financial assets

Unlisted securities

W

180,390

—

98,472

(9,401

)

—

—

269,461

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

45. 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 March 31, 2017 are as follows:

In millions of won
Type		Amounts
Less than 1 year		W	116,581
1~ 2 years			116,581
2~ 3 years			116,581
Over 3 years			252,594
		W	602,337

(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, water usage cost, variable O&M cost and special facilities cost during the concession period after building, rehabilitating, and operating the power plant for approximately 30 years (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 March 31, 2017 are as follows:

In millions of won
Type		Amounts
Less than 1 year		W	17,655
1~ 2 years			28,184
2~ 3 years			27,859
Over 3 years			621,944
		W	695,642

(iv) Accumulated contract costs and profits related to the Company’s contract in process as of March 31, 2017 were W125,250 million and W7,883 million, respectively. There are no amount due from customers and advance receipts in progress.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

46. Related Parties

(1) Related parties of the Company as of March 31, 2017 are as follows:

Type		Related party
Parent		Republic of Korea government
Subsidiaries (89 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 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, 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 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., Global One Carbon Private Equity Investment Trust 2., Chitose Solar Power Plant LLC., Solar School Plant Co., Ltd., KEPCO Energy Solution Co. Ltd., KOSPO Power Services Limitada, KOEN Bylong Pty., Ltd., KOWEPO Bylong Pty., Ltd., KOSPO Bylong Pty., Ltd., EWP Bylong Pty., Ltd., KOWEPO Lao International, KOMIPO Bylong Pty Ltd., Energy New Industry Specialized Investment Private Investment Trust., KEPCO US Inc., KEPCO Alamosa LLC
Associates (57 associates)		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., 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 Materials Co., Ltd., Gangwon Wind Power Co., Ltd., Gwangyang Green Energy 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., Taeback Guinemi Wind Power Co., Ltd., Pyeongchang Wind Power Co., Ltd., Daeryun Power Co., Ltd., Changjuk Wind Power Co., Ltd., KNH Solar Co., Ltd., S-Power Co., Ltd., Hadong Mineral Fiber Co., Ltd., Green Biomass Co., Ltd., SPC Power Corporation, Gemeng International Energy Co., Ltd., PT. Cirebon Electric Power, KNOC Nigerian East Oil Co., Ltd., KNOC Nigerian West Oil Co., Ltd., PT Wampu Electric Power, PT. Bayan Resources TBK, Nepal Water & Energy Development Company Private Limited, Pioneer Gas Power Limited, Eurasia Energy Holdings, Xe-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., Tamra Offshore Wind Power Co., Ltd., Korea Electric Power Corporation Fund, Energy Infra Asset Management Co., Ltd., Daegu clean Energy Co., Ltd., YaksuESS Co., Ltd
Joint ventures (43 joint ventures)		Daegu Green Power Co., Ltd., KEPCO SPC Power Corporation, Daejung Offshore Wind Power Co., Ltd., KAPES, Inc., Dangjin Eco Power Co., Ltd., Honam Wind Power Co., Ltd., Seokmun Energy Co., Ltd., Incheon New Power Co., Ltd., Chun-cheon Energy Co., Ltd., Yeonggwangbaeksu Wind Power Co., Ltd., KW Nuclear Components Co., Ltd., KEPCO-Uhde Inc., GS Donghae Electric Power Co., Ltd., Busan Shinho Solar Power Co., Ltd., Global Trade Of Power System Co., Ltd., Expressway Solar-light Power Generation Co., Ltd., Gansu Datang Yumen Wind Power Company Ltd., Datang Chifeng Renewable Power Co., Ltd., 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., KODE NOVUS I LLC, KODE NOVUS II LLC, Amman Asia Electric Power Company, Kelar S.A, PT. Tanjung Power Indonesia, Nghi Son 2 Power Ltd., Canada Korea Uranium Limited Partnership, Daehan Wind Power PSC, MOMENTUM, Barakah One Company, Nawah Energy Company, Yeonggwang Wind Power Co., Ltd., Chester Solar IV SpA
Others		Korea Development Bank

(2) Transactions between the Company and its subsidiaries are eliminated during the consolidation and are not disclosed in notes.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

46. Related Parties, Continued

(3) Related party transactions for the three-month periods ended March 31, 2017 and 2016 are as follows:

<Sales and Others>

In millions of won				Sales and others
Company name		Transaction type		March 31, 2017				March 31, 2016
<Associates>
Dongducheon Dream Power Co., Ltd.		Electricity sales		W	3,633				3,910
Korea Gas Corporation		Electricity sales			24,738				27,431
Daegu Photovoltaic Co., Ltd.		REC purchase			—				—
Jeongam Wind Power Co., Ltd.		Electricity sales			8				4
Korea Power Engineering Service Co., Ltd.		Service			—				8
Yeongwol Energy Station Co., Ltd.		Service			208				244
KS Solar Co., Ltd.		Electricity sales			5				5
Heang Bok Do Si Photovoltaic Power Co., Ltd.		Service			1				—
Korea Electric Power Industrial Development Co., Ltd.		Service			4,765				4,135
DS POWER Co., Ltd.		Service			848				15,688
Goseong Green Energy Co., Ltd.		Electricity sales			5				1
Gangneung Eco Power Co., Ltd.		Service			869				62
Shin Pyeongtaek Power Co., Ltd.		Electricity sales			73				69
Naepo Green Energy Co., Ltd.		Electricity sales			61				33
Noeul Green Energy Co., Ltd.		Electricity sales			7				—
Samcheok Eco Materials Co., Ltd.		Electricity sales			63				—
YTN Co., Ltd.		Electricity sales			619				453
Busan Green Energy Co., Ltd.		Service			40				117
Korea Electric Vehicle Charge Service		Electricity sales			207				8
Ulleungdo Natural Energy Co., Ltd.		Service			104				—
Tamra Offshore Wind Power Co., Ltd.,		Electricity sales			10				—
Cheongna Energy Co., Ltd.		Service			3,435				3,311
Gangwon Wind Power Co., Ltd.		Electricity sales			875				1,160
Hyundai Green Power Co., Ltd.		Design service			10,170				10,394
Korea Power Exchange		Service			865				1,386
Hyundai Energy Co., Ltd.		Service			5,670				5,916
Taebaek Wind Power Co., Ltd.		Service			186				212
Pyeongchang Wind Power Co., Ltd.		Design service			307				9
Daeryun Power Co., Ltd.		Electricity sales			478				448
Changjuk Wind Power Co., Ltd.		Electricity sales			169				193
KNH Solar Co., Ltd.		Electricity sales			5				5
S-Power Co., Ltd.		Service			1,494				1,183
Busan Solar Co., Ltd.		Electricity sales			—				4
Green Biomass Co., Ltd.		Electricity sales			—				1
PT. Bayan Resources TBK		Service			138				57
Nepal Water & Energy Development Company Private Limited		Service			107				—
Xe-Pian Xe-Namnoy Power Co., Ltd.		Service			167				201

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

46. Related Parties, Continued

(3) Related party transactions for the three-month periods ended March 31, 2017 and 2016 are as follows, continued:

In millions of won						Sales and others
Company name		Transaction type				March 31, 2017				March 31, 2016
<Joint ventures>
Daegu Green Power Co., Ltd.			Electricity sales			W	170				195
KEPCO SPC Power Corporation			Service				1,365				1,202
KAPES, Inc.			Commission				203				275
Dangjin Eco Power Co., Ltd.			Technical fee				201				447
Honam Wind Power Co., Ltd.			Electricity sales				501				119
Seokmun Energy Co., Ltd.			Technical fee				306				311
Incheon New Power Co., Ltd.			Construction revenue				144				129
Chun-cheon Energy Co., Ltd.			Service				1,357				873
Yeonggwangbaeksu Wind Power Co., Ltd.			Electricity sales				408				394
KW Nuclear Components Co., Ltd.			Service				243				2,665
KEPCO-Uhde Inc.			Service				8				—
GS Donghae Electric Power Co., Ltd.			Electricity sales				2,810				3,602
Busan Shinho Solar Power Co., Ltd.			Electricity sales				70				191
Datang Chifeng Renewable Power Co., Ltd.			Interest income				187				230
Rabigh Electricity Company			Service				31				54
Rabigh Operation & Maintenance Company			Service				12				—
Shuweihat Asia Power Investment B.V.			Dividend income				566				—
Shuweihat Asia Operation & Maintenance Company			Service				55				37
Jamaica Public Service Company Limited			Service				—				815
Amman Asia Electric Power Company			Service				3,501				2,396
Kelar S.A			Service				138				504
Barakah One Company			Service				1,680				—
<Others>
Korea Development Bank			Electricity sales				749				952
			Interest income				256				169

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

46. Related Parties, Continued

(3) Related party transactions for the three-month periods ended March 31, 2017 and 2016 are as follows, continued:

<Purchase and Others>

In millions of won						Purchase and others
Company name		Transaction type				March 31, 2017				March 31, 2016
<Associates>
Dongducheon Dream Power Co., Ltd.			Electricity purchase			W	81,705				300,955
Korea Gas Corporation			Purchase of power generation fuel				991,825				1,036,464
Daegu Photovoltaic Co., Ltd.			REC purchase				841				521
Korea Power Engineering Service Co., Ltd.			Service				203				224
Yeongwol Energy Station Co., Ltd.			REC purchase				6,895				7,738
KS Solar Co., Ltd.			REC purchase				900				767
Heang Bok Do Si Photovoltaic Power Co., Ltd.			Rental fee and others				83				71
Korea Electric Power Industrial Development Co., Ltd.			Electricity metering service fee				47,521				51,365
YTN Co., Ltd.			Advertisement fee				79				18
Ulleungdo Natural Energy Co., Ltd.			Electricity purchase				20				—
Cheongna Energy Co., Ltd.			Services				58				73
Gangwon Wind Power Co., Ltd.			Electricity purchase				6,759				6,853
Hyundai Green Power Co., Ltd.			Electricity purchase				108,479				115,770
Korea Power Exchange			Trading fees				25,152				24,262
Hyundai Energy Co., Ltd.			Electricity purchase				559				352
Taebaek Wind Power Co., Ltd.			REC purchase				1,949				2,088
Pyeongchang Wind Power Co., Ltd.			Services				683				—
Daeryun Power Co., Ltd.			Electricity purchase				44,815				65,438
Changjuk Wind Power Co., Ltd.			Electricity purchase				1,883				2,027
KNH Solar Co., Ltd.			Electricity purchase				542				614
S-Power Co., Ltd.			Services				161,884				146,213
Busan Solar Co., Ltd.			Electricity purchase				—				794
Green Biomass Co., Ltd.			Woodchip purchase				337				816
<Joint ventures>
Daegu Green Power Co., Ltd.			Electricity purchase				82,835				81,614
KAPES, Inc.			Service				23,050				30,181
Honam Wind Power Co., Ltd.			Electricity purchase				2,113				1,970
Yeonggwangbaeksu Wind Power Co., Ltd.			Electricity purchase				3,835				3,683
GS Donghae Electric Power Co., Ltd.			Service				41,970				—
Busan Shinho Solar Power Co., Ltd.			REC purchase				2,016				1,702
Global Trade Of Power System Co., Ltd.			Service				5				—
Expressway Solar-light Power Generation Co., Ltd.			Electricity purchase				614				586
Jamaica Public Service Company Limited			Service				24				35
<Others>
Korea Development Bank			Interest expense				1,713				2,164
			Provision of dividends				418,246				654,829

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

46. Related Parties, Continued

(4) Receivables and payables arising from related party transactions as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won				Receivables								Payables
Company name		Type		March 31, 2017				December 31, 2016				March 31, 2017				December 31, 2016
<Associates>
Dongducheon Dream Power Co., Ltd.		Trade receivables		W	2,148				1,073				—				—
		Trade payables			—				—				73,220				93,493
Korea Gas Corporation		Trade receivables			6,232				8,739				—				—
		Non-trade receivables and others			397				78				—				—
		Trade payables			—				—				293,577				399,563
		Non-trade payables and others			—				—				706				9,090
Daegu Photovoltaic Co., Ltd.		Trade payables			—				—				94				56
Jeongam Wind Power Co., Ltd.		Non-trade payables and others			—				—				7				4
Yeongwol Energy Station Co., Ltd.		Trade receivables			7,046				7,064				—				—
		Trade payables			—				—				1,491				229
KS Solar Co., Ltd.		Trade receivables			—				2				—				—
		Trade payables			—				—				—				53
Korea Electric Power Industrial Development Co., Ltd.		Trade receivables			580				362				—				—
		Non-trade receivables and others			217				47				—				—
		Non-trade payables and others			—				—				12,507				18,628
DS Power Co., Ltd.		Trade receivables			318				1,775				—				—
		Non-trade payables and others			—				—				1				—
Goseong Green Energy Co., Ltd.		Non-trade payables and others			—				—				5,500				3,900
Gangneung Eco Power Co., Ltd.		Trade receivables			1				1				—				—
		Non-trade receivables and others			3,080				2,137				—				—
Shin Pyeongtaek Power Co., Ltd.		Non-trade receivables and others			5				215				—				—
		Non-trade payables and others			—				—				202				—
Naepo Green Energy Co., Ltd.		Trade receivables			15				14				—				—
Noeul Green Energy Co., Ltd.		Trade receivables			3				18				—				—
Samcheok Eco Materials Co., Ltd.		Trade receivables			20				21				—				—
YTN Co., Ltd.		Trade receivables			81				165				—				—
		Non-trade payables and others			—				—				—				132
Busan Green Energy Co., Ltd.		Trade receivables			14				9				—				—
Korea Electric Vehicle Charge Service		Trade receivables			10				12				—				—
		Non-trade receivables and others			191				—				—				—
Ulleungdo Natural Energy Co., Ltd.		Non-trade receivables and others			115				111				—				—
Cheongna Energy Co., Ltd.		Trade receivables			134				165				—				—
		Non-trade payables and others			—				—				1				82
Gangwon Wind Power Co., Ltd.		Trade receivables			8				8				—				—
		Trade payables			—				—				1,236				2,031
Hyundai Green Power Co., Ltd.		Trade receivables			434				569				—				—
		Trade payables			—				—				33,629				31,507
Korea Power Exchange		Trade receivables			34				1,066				—				—
		Non-trade receivables and others			6,072				53				—				—
		Non-trade payables and others			—				—				1,187				1,235
Hyundai Energy Co., Ltd.		Trade receivables			72				72				—				—
		Non-trade receivables and others			74,180				68,798				—				—
		Trade payables			—				—				215				86
		Non-trade payables and others			—				—				555				—
Ecollite Co., Ltd.		Non-trade receivables and others			—				210				—				—
Taebaek Wind Power Co., Ltd.		Trade receivables			99				—				—				—
		Non-trade receivables and others			—				112				—				—
		Trade payables			—				—				217				386
		Non-trade payables and others			—				—				—				304
Pyeongchang Wind Power Co., Ltd.		Trade receivables			3				4				—				—
		Non-trade payables and others			—				—				—				255
Daeryun Power Co., Ltd.		Trade receivables			136				140				—				—
		Trade payables			—				—				16,376				21,646
Changjuk Wind Power Co., Ltd.		Trade receivables			92				—				—				—
		Non-trade receivables and others			—				100				—				—
		Trade payables			—				—				238				358
		Non-trade payables and others			—				—				—				334

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March 31, 2017

(Unaudited)

46. Related Parties, Continued

(4) Receivables and payables arising from related party transactions as of March 31, 2017 and December 31, 2016 are as follows, continued:

In millions of won				Receivables								Payables
Company name		Type		March 31, 2017				December 31, 2016				March 31, 2017				December 31, 2016
KNH Solar Co., Ltd.		Trade receivables		W	1				1				—				—
		Trade payables			—				—				10				—
		Non-trade payables and others			—				—				—				204
S-Power Co., Ltd.		Trade receivables			137				142				—				—
		Non-trade receivables and others			—				393				—				—
		Trade payables			—				—				49,196				51,844
		Non-trade payables and others			—				—				14				—
Green Biomass Co., Ltd.		Non-trade payables and others			—				—				106				113
SPC Power Corporation		Non-trade receivables and others			11				—				—				—
Nepal Water & Energy Development Company Private Limited		Non-trade receivables and others			970				889				—				—
Pioneer Gas Power Limited		Non-trade receivables and others			—				82				—				—
Xe-Pian Xe-Namnoy Power Co., Ltd.		Non-trade receivables and others			55				58				—				—
<Joint ventures>
Daegu Green Power Co., Ltd.		Trade receivables			58				52				—				—
		Non-trade receivables and others			2				1				—				—
		Trade payables			—				—				24,629				27,400
KEPCO SPC Power Corporation		Non-trade receivables and others			1,230				2,349				—				—
KAPES, Inc.		Non-trade receivables and others			156				235				—				—
		Non-trade payables and others			—				—				8,734				11,992
Dangjin Eco Power Co., Ltd.		Non-trade receivables and others			689				833				—				—
Honam Wind Power Co., Ltd.		Trade payables			—				—				241				424
		Non-trade payables and others			—				—				1,027				3,082
Seokmun Energy Co., Ltd.		Trade receivables			58				114				—				—
		Non-trade receivables and others			161				160				—				—
Incheon New Power Co., Ltd.		Trade receivables			126				128				—				—
Chun-cheon Energy Co., Ltd.		Trade receivables			190				—				—				—
		Non-trade receivables and others			199				255				—				—
Yeonggwangbaeksu Wind Power Co., Ltd.		Trade receivables			7				6				—				—
		Non-trade receivables and others			139				145				—				—
		Trade payables			—				—				498				761
		Non-trade payables and others			—				—				1,156				1,362
KEPCO-Uhde Inc.		Non-trade payables and others			—				—				2				4
GS Donghae Electric Power Co., Ltd.		Trade receivables			551				775				—				—
		Non-trade receivables and others			1,395				1,497				—				—
		Trade payables			—				—				33,552				—
		Non-trade payables and others			—				—				—				993
Busan Shinho Solar Power Co., Ltd.		Trade receivables			2				3				—				—
		Trade payables			—				—				208				129
		Non-trade payables and others			—				—				984				670
Datang Chifeng Renewable Power Co., Ltd.		Non-trade receivables and others			20				210				—				—
Rabigh Operation & Maintenance Company		Trade receivables			—				2,275				—				—
ASM-BG Investicii AD		Non-trade receivables and others			28				64				—				—
Jamaica Public Service Company Limited		Trade receivables			—				615				—				—
Amman Asia Electric Power Company		Trade receivables			1,693				2,509				—				—
<Others>
Korea Development Bank		Accrued interest income			399				672				—				—
		Non-trade receivables and others			107,417				217,481				—				—
		Non-trade payables and others			—				—				296				408
		Derivatives			9,556				25,306				14,474				3,278

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

46. Related Parties, Continued

(5) Loans and others arising from related party transactions as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won
Type		Company name		Beginning balance				Loans				Collection				Others				Ending balance
Associates		KNOC Nigerian East Oil Co., Ltd., KNOC Nigerian West Oil Co., Ltd.		W	29,282				24				—				(2,091	)			27,215
		(Allowance for doubtful accounts)			(18,191	)			—				—				1,105				(17,086	)
Associates		PT. Cirebon Electric Power			26,733				653				(1,270	)			(2,024	)			24,092
Associates		Xe-Pian Xe-Namnoy Power Co., Ltd.			1,413				—				—				—				1,413
Associates		PT Wampu Electric Power			14,022				221				—				(1,079	)			13,164
Associates		Jungbu Bio Energy Co., Ltd.			9,396				—				—				—				9,396
Associates		Hyundai Energy Co., Ltd.			2,465				—				—				—				2,465
Joint ventures		KEPCO SPC Power Corporation			27,795				—				—				(2,125	)			25,670
Joint ventures		Datang Chifeng Renewable Power Co., Ltd.			16,344				—				(3,903	)			(1,121	)			11,320
Joint ventures		Rabigh Electricity Company			2,641				—				—				(201	)			2,440
Joint ventures		KODE NOVUS II LLC			4,532				—				—				(347	)			4,185
		(Allowance for doubtful accounts)			(4,532	)			—				—				347				(4,185	)
Joint ventures		Kelar S.A			—				52,279				—				—				52,279
Joint ventures		Daehan Wind Power PSC			683				640				—				—				1,323
				W	112,583				53,817				(5,173	)			(7,536	)			153,691

(6) Borrowings arising from related party transactions as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won
Related parties		Type		Beginning balance				Borrowings				Repayment				Others				Ending balance
Korea Development Bank		Facility		W	207,993				21,424				(63,125	)			—				166,292
		Others			5,663				—				(189	)			—				5,474
		Operating funds			37,000				5,000				(25,000	)			—				17,000
		Syndicated Loan			6,075				5,616				—				(488	)			11,203

(7) Guarantees provided to associates or joint ventures as of March 31, 2017 are as follows:

In millions of won and thousands of foreign currencies
Primary guarantor		Secondary guarantor		Type of guarantees		Credit limit				Guarantee
Korea Electric Power Corporation		KEPCO SPC Power Corporation		Debt guarantees		USD	50,112			SMBC, Export-Import Bank of Korea and ADB
Korea Electric Power Corporation		Shuweihat Asia Operation & Maintenance Company		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			RABEC
Korea Electric Power Corporation		Nghi Son 2 Power Ltd.		Bidding guarantees		USD	10,000			SMBC Ho Chi Minh
Korea Electric Power Corporation		Barakah One Company		Debt guarantees		USD	900,000			Export-Import Bank of Korea and others
				Performance guarantees and others		USD	3,404,275
Korea Western Power Co., Ltd.		Cheongna Energy Co., Ltd.		Collateralized money invested		KRW	27,211			KEB Hana Bank and others
				Guarantees for supplemental funding and others (*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	50,228
				Impounding bonus guarantees		USD	5,000			SK E&C

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

46. Related Parties, Continued

(7) Guarantees provided to associates or joint ventures as of March 31, 2017 are as follows, continued:

In millions of won and thousands of foreign currencies
Primary guarantor		Secondary guarantor		Type of guarantees		Credit limit				Guarantee
Korea Western Power Co., Ltd.		Rabigh Operation & Maintenance Company		Performance guarantees and others		SAR	5,600			Saudi Arabia British Bank
Korea Western Power Co., Ltd.		Daegu Photovoltaic Co., Ltd.		Collateralized money invested		KRW	1,230			IBK
Korea Western Power Co., Ltd.		Dongducheon Dream Power Co., Ltd.		Collateralized money invested		KRW	111,134			Kookmin Bank and others
Korea Western Power Co., Ltd.		PT. Mutiara Jawa		Collateralized money invested		USD	2,610			Woori Bank
Korea Western Power Co., Ltd.		Heang Bok 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			Heungkuk Life Insurance Co., Ltd. and others
Korea East-West Power Co., Ltd.		Seokmun Energy Co., Ltd.		Collateralized money invested		KRW	15,370			KEB Hana Bank and others
Korea East-West Power Co., Ltd.		Chun-cheon Energy Co., Ltd.		Collateralized money invested		KRW	52,700			Kookmin Bank and others
				Guarantees for supplemental funding (*1)		KRW	60,270
Korea East-West Power Co., Ltd.		Honam Wind Power Co., Ltd.		Collateralized money invested		KRW	3,480			Shinhan Bank and others
Korea East-West Power Co., Ltd.		GS Donghae Electric Power Co., Ltd.		Collateralized money invested		KRW	204,000			Korea Development Bank and others
Korea East-West Power Co., Ltd.		Yeonggwangbaeksu Wind Power Co., Ltd.		Collateralized money invested		KRW	3,000			Hyundai Marine & Fire Insurance Co., Ltd. and others
Korea East-West Power Co., Ltd.		PT. Tanjung Power Indonesia		Debt guarantees		USD	46,983			The Bank of Tokyo-Mitsubishi and others
				Other guarantees		USD	3,150			PT Adaro Indonesia
EWP Barbados 1 SRL		Jamaica Public Service Company Limited		Performance guarantees		USD	7,500			Societe Generale
				Guarantees for supplemental funding and others (*1)		USD	92,000			JCSD Trustee Services Limited and others
Korea Southern Power Co., Ltd.		KNH Solar Co., Ltd.		Collateralized money invested		KRW	1,296			Shinhan Bank and Kyobo Life Insurance Co., Ltd.
				Performance guarantees and guarantees for supplemental funding and others (*1)			—
Korea Southern Power Co., Ltd.		Daeryun Power Co., Ltd.		Collateralized money invested		KRW	25,477			Korea Development Bank and others
				Guarantees for supplemental funding and others (*1)			—
Korea Southern Power Co., Ltd.		Changjuk Wind Power Co., Ltd.		Collateralized money invested		KRW	3,801			Shinhan Bank
				Guarantees for supplemental funding (*1)			—
Korea Southern Power Co., Ltd.		Daegu Green Power Co., Ltd.		Collateralized money invested		KRW	46,226			Shinhan Bank
Korea Southern Power Co., Ltd.		Kelar S.A		Performance guarantees		USD	68,250			KEB Hana Bank, SMBC, Mizuho Bank and others
				Debt guarantees		USD	26,000			BANCO SANTANDER-CHILE
Korea Southern Power Co., Ltd.		DS Power Co., Ltd.		Collateralized money invested		KRW	2,900			Korea Development Bank and others
				Guarantees for supplemental funding and others (*1)			—

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March 31, 2017

(Unaudited)

46. Related Parties, Continued

(7) Guarantees provided to associates or joint ventures as of March 31, 2017 are as follows, continued:

In millions of won and thousands of foreign currencies
Primary guarantor		Secondary guarantor		Type of guarantees		Credit limit				Guarantee
Korea Southern Power Co., Ltd.		Pyeongchang Wind Power Co., Ltd.		Collateralized money invested		KRW	3,875			Woori Bank and Shinhan Bank
				Performance guarantees and guarantees for supplemental funding and others (*1)			—
Korea Southern Power Co., Ltd.		Taebaek Wind Power Co., Ltd.		Guarantees for supplemental funding and others (*1)			—			Shinhan Bank
Korea Southern Power Co., Ltd.		Jeongam Wind Power Co., Ltd		Collateralized money invested		KRW	5,580			SK Securities Co., Ltd.
				Guarantees for supplemental funding and others (*1)			—
KEPCO Engineering & Construction Company, Inc.		DS Power Co., Ltd.		Collateralized money invested		KRW	15,000			Korea Development Bank and others
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 and others (*1)			—
Korea Midland Power Co., Ltd.		PT. Cirebon Electric Power		Debt guarantees		USD	9,900			Mizuho Bank
Korea Midland Power Co., Ltd.		PT Wampu Electric Power		Debt guarantees		USD	5,367			SMBC
Korea Midland Power Co., Ltd.		Gangwon Wind Power Co., Ltd.		Collateralized money invested		KRW	7,409			IBK and others
Korea Midland Power Co., Ltd.		YaksuESS Co.,Ltd		Collateralized money invested		KRW	210			Hanwha Life Insurance Co., Ltd.
				Guarantees for supplemental funding and others (*1)			—
Korea South-East Power Co., Ltd.		Hyundai Energy Co., Ltd.		Collateralized money invested		KRW	47,067			Korea Development Bank and others
				Performance guarantees and guarantees for supplemental funding and others (*1)		KRW	78,600
Korea South-East Power Co., Ltd.		RES Technology AD		Collateralized money invested		KRW	15,595			Korea Development Bank and others
				Debt guarantees		EUR	4,271
Korea South-East Power Co., Ltd.		ASM-BG Investicii AD		Collateralized money invested		KRW	16,101			Korea Development Bank and others
				Debt guarantees		EUR	4,175
Korea South-East Power Co., Ltd.		Express Solar-light Power Generation Co., Ltd.		Guarantees for supplemental funding and others (*1, 2)		KRW	2,500			Woori Bank
Korea South-East Power Co., Ltd.		S-Power Co., Ltd.		Collateralized money invested		KRW	132,300			Korea Development Bank and others
KOSEP USA, INC.		KODE NOVUS II LLC		Guarantees for supplemental funding and others (*1)		USD	3,750			Korea Development Bank
KOSEP USA, INC.		KODE NOVUS I LLC		Guarantees for supplemental funding and others (*1)			—			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.
Korea Hydro & Nuclear Power Co., Ltd.		Noeul Green Energy Co., Ltd.,		Collateralized money invested		KRW	1,740			KEB Hana Bank and others
Korea Hydro & Nuclear Power Co., Ltd.		Busan Green Energy Co., Ltd.		Collateralized money invested		KRW	14,564			Shinhan Bank and others
KEPCO Plant Service & Engineering Co., Ltd.		Incheon New Power Co., Ltd.		Collateralized money invested		KRW	6,800			Shinhan Bank
				Guarantees for supplemental funding and others (*1)			—

(*1) The Company guarantees to provide supplemental funding for business with respect to excessive business expenses or insufficient repayment of borrowings.

(*2) The Company has granted the right to Hana Financial Investment Co., Ltd., as an agent for the creditors to Express Solar-light Power Generation Co., Ltd. (“ESPG”), to the effect that in the event of acceleration of ESPG’s payment obligations under certain borrowings to such creditors, Hana Financial may demand the Company to dispose of shares in ESPG held by the Company and apply the resulting proceeds to repayment of ESPG’s obligations.

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

46. Related Parties, Continued

(8) As of March 31, 2017, there is no financial guarantee contract provided by related parties.

(9) Derivatives transactions with related parties as of March 31, 2017 are as follows:

(i) Currency Swap

In millions of won and thousands of U.S. dollars
Counterparty		Contract year				Contract Amount								Contract interest rate per annum								Contract exchange rate
						Pay				Receive				Pay (%)				Receive (%)
Korea Development Bank			2016~2019			W	105,260				USD 100,000				2.48	%			2.38	%		W	1,052.60
			2015~2025				111,190				USD 100,000				2.62	%			3.25	%			1,111.90
			2016~2021				121,000				USD 100,000				2.15	%			2.50	%			1,210.00

(ii) Interest Rate Swap

In millions of won

Contract year

Contract amount

Contract interest rate per annum

Counterparty

Pay (%)

Receive (%)

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 March 31, 2017 and 2016 are as follows:

In millions of won
Type		March 31, 2017				March 31, 2016
Salaries		W	205				174
Employee benefits			11				5
		W	216				179

47. Non-Cash Transactions

Significant non-cash investing and financing transactions for the three-month periods ended March 31, 2017 and 2016 are as follows:

In millions of won
Transactions		March 31, 2017				March 31, 2016
Transfer from construction-in-progress to other assets		W	1,759,250				1,634,384
Recognition of asset retirement cost and related provision for decommissioning costs			46,693				44,134
Transfer from provision for disposal of spent nuclear fuel to accrued expenses			101,701				101,273

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

48. Commitments for Expenditure

(1) The agreements for acquisition of property, plant and equipment as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
Contracts		Amounts				Balance				Amounts				Balance
Purchase of switch (25.8kV Eco) 11,395		W	40,227				15,489				40,226				28,072
Purchase of switch (25.8kV Eco) 12,450			50,526				50,526				—				—
Purchase of cable (PVC,1C,2000SQ) 153,000M and others (New Bupyung-Youngseo)			50,256				50,256				50,256				50,256
Purchase of cable (PVC, 1C, 2500SQ) 103,374M and others (Bukdangjin-Shintangjung)			42,500				42,500				42,500				42,500
Purchase of GIS (362KV 6300A 63KA) 23CB – YoungseoS/S			34,500				34,500				—				—
Purchase of GIS (362KV 6300A 63KA) 26CB – SingosungS/S			36,950				—				36,950				19,897
Purchase of GIS (362KV 6300A 63KA) 26CB – HwasungS/S			40,000				40,000				—				—
Purchase of GIS (362KV 6300A 63KA) 27CB – KwangyangS/S			37,476				20,820				37,476				27,760
Purchase of GIS (362KV 6300A 63KA) and 1 other 18CB – BukbusanS/S			34,000				13,204				34,000				20,766
Purchase of GIS (800KV 8000A 50KA) 10CB – SinjungbuS/S			63,730				63,730				63,730				63,730
Purchase of transformer (765/345/23kV 666.7MVA, 2TANK) 6 units – ShinjungbuS/S			37,500				37,500				37,500				37,500
Purchase of cable (TR CNCE-W/AL,1C,400SQ) 4,500,000M			71,986				24,271				71,986				50,593
Purchase of Concrete Poles (10M, 350KGF)			129,175				76,799				129,175				105,905
Construction of New Kori units (#3,4)			8,625,387				7,154,429				8,625,387				7,286,503
Construction of New Hanwool units (#1,2)			7,982,342				909,629				7,982,342				1,157,700
Construction of New Hanwool units (#3,4)			8,261,818				8,156,764				8,261,818				8,170,896
Construction of Yeosu thermal power units (#1)			174,291				1,139				174,291				1,139
Other 39 contracts			477,260				216,942				430,204				222,555
Purchase of main machine for construction of Seoul Combined units (#1,2)			360,500				300,663				360,500				300,663
Construction of Seoul Combined units (#1,2)			225,205				92,464				225,205				129,589
Electricity construction of New Boryeong units (#1,2)			371,624				29,291				354,740				26,878
Purchase of smoke eliminating machine for construction of New Boryeong units (#1,2)			121,093				1,879				121,093				2,023
Purchase of coal handling machine for construction of New Boryeong units (#1,2)			146,353				3,543				146,353				3,543
Service of designing New Boryeong units (#1,2)			126,038				19,042				126,038				24,333
Purchase of main machine for construction of New Boryeong units (#1,2)			851,132				8,130				851,132				10,746
Construction of New Boryeong units (#1,2)			287,904				13,972				288,438				17,828
Purchase of furnace for construction of New Seocheon thermal power plant			269,531				265,672				—				—
Purchase of turbine generator for construction of New Seocheon thermal power plant			104,402				83,522				—				—
Electricity construction of New Seocheon thermal power plant			196,279				196,279				—				—
Purchase of main machine for Jeju LNG combined			166,287				98,800				—				—
Purchase of coal handling machine for construction of Taean (#9,10) and IGCC units (conditional contract for installation)			193,375				17,860				192,945				38,218
Purchase of furnace for construction of Taean units (#9,10)			547,350				23,585				584,148				46,059
Service of designing Taean units (#9,10)			111,322				17,359				109,700				18,981
Purchase of desulfurization machine for construction of Taean units (#9,10)			92,086				—				92,086				1,017
Purchase of turbine generator for construction of Taean units (#9,10)			214,170				7,852				228,794				6,788
Purchase of combined generating machine for construction of Taean IGCC units			197,687				1,963				208,972				2,102
Purchase of oxygen plant for construction of Taean IGCC units			96,004				206				98,979				221
Service of designing Taean IGCC plant units			44,802				3,342				44,802				3,342
Construction of Samcheok units (#1,2)			460,440				15,483				457,943				15,851

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Notes to the Consolidated Interim Financial Statements, Continued

March 31, 2017

(Unaudited)

48. Commitments for Expenditure, Continued

(1) The agreements for acquisition of property, plant and equipment as of March 31, 2017 and December 31, 2016 are as follows, continued.

In millions of won		March 31, 2017								December 31, 2016
Contracts		Amounts				Balance				Amounts				Balance
Purchase of furnace for construction of Samcheok units (#1,2)		W	1,091,303				46,760				1,091,303				51,594
Purchase of coal handling machine for construction of Samcheok units (#1,2)			304,924				57,820				303,273				155
Service of designing Samcheok units (#1,2)			114,047				36,510				114,047				36,510
Purchase of main equipments			168,076				17,144				152,286				39,248
Lanscaping construction and other			63,013				38,203				—				—
Construction of yard for Andong natural gas power plant			41,961				—				41,961				2,600
Service of designing Dangjin units (#9,10)			122,426				—				122,426				6,125

(2) As of March 31, 2017, 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		2017 ~ 2030		34,719 Ton U3O8
Transformed		2017 ~ 2022		18,738 Ton U
Enrichment		2017 ~ 2029		34,879 Ton SWU
Molded		2017 ~ 2022		1,852 Ton U

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March 31, 2017

(Unaudited)

49. Contingencies and Commitments

(1) Ongoing litigations related with contingent liabilities and assets as of March 31, 2017 and December 31, 2016 are as follows:

In millions of won		March 31, 2017								December 31, 2016
		Number of cases				Claim amount				Number of cases				Claim amount
As the defendant			703			W	641,960				675			W	636,433
As the plaintiff			201				586,072				193				489,605

As of March 31, 2017, in addition to the litigations mentioned above, there are ongoing litigations of Korea Hydro & Nuclear Power Co., Ltd. (“KHNP”), a subsidiary of KEPCO, against KEPCO Engineering & Construction Company, Inc., a subsidiary of KEPCO, as a co-defendant (one case amounting to W62,744million).

A group of plaintiffs filed a lawsuit against NSSC regarding NSSC’s approval to continue operation of Wolsong Unit 1 nuclear power plant and the appeal was ongoing as of March 31, 2017. On April 17, 2017, the Company joined the litigation as a participant for the defendant.

The Company is the defendant against a number of claims. The followings 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 lawsuit for increase in contract bill (formerly, amounted to W1,000 million) against 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 W133,426 million in October 2014 and W204,040 million in November 2015, respectively, and submitted an application to demand extra contract payments due to the design changes. KHNP has paid W217,724 million of the claim amounts in full upon the first ruling in November 2016 and recognized the amount as addition to construction-in-progress accordingly. KHNP has made an appeal against the first ruling and the lawsuit is currently ongoing.

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 are entitled to retroactively demand certain wages based on the new ordinary wages that include regular bonuses as additional wages. However, the request may be limited to the extent of the principle of good faith.

The Company believes that the possibility of economic outflow is probable on the ongoing and the expected lawsuit. For this reason, the Company recognized W87,581 million of other provision in relation to the lawsuit as of March 31, 2017.

Except these significant claims, there are six arbitration cases pertaining to the Company as of March 31, 2017 and the significant arbitration cases are as follows:

① KEPCO and KEPCO KDN Co., Ltd., a subsidiary of KEPCO, have been accused of breach of contract in relation to ERP software, which is provided by SAP Korea Ltd. The litigation was filed in the International Chamber of Commerce International Court of Arbitration but the Company has not recognized any provision because the probability of economic benefit outflow is remote and the related amount cannot be reliably estimated.

② Hyundai Samsung Joint Venture (HSJV), one of the subcontractors of the Company, filed an arbitration against the Company at the London Court of International Arbitration (LCIA) in 2016 due to disagreements in UAE nuclear power plant construction project, but the Company has not recognized any losses because the probability of economic benefit outflow is remote and the related amount cannot be reasonably estimated.

③ in prior years, Hyundai E&C, GS Engineering & Construction Corp., and Hansol SeenTec Co., Ltd. filed on arbitration against the Company to the Korea Commercial Arbitration Board in relation to the request for additional construction costs but the Company has not recognized any provision because the probability of economic benefit outflow is remote and the related amount cannot be reliably estimated.

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March 31, 2017

(Unaudited)

49. Contingencies and Commitments, Continued

(1) Ongoing litigations related with contingent liabilities and assets as of March 31, 2017 and December 31, 2016 are as follows, continued:

④ In prior years, Halla Corporation filed on arbitration against the Company to the Korea Commercial Arbitration Board in relation to the request for additional construction costs and the Company filed on arbitration against Halla Corporation to the Korea Commercial Arbitration Board in relation to the request for a penalty payment for the delayed construction work. The Company has not recognized any losses because the probability of economic benefit outflow is remote and the related amount cannot be reasonably estimated.

(2) Guarantees of payments and commitments provided to other companies as of March 31, 2017 and December 31, 2016 are as follows:

① In order to secure its status as a shareholder of Navanakorn Electric Co., Ltd., the Company has signed a fund supplement contract. According to the contract, in case Navanakorn Electric Co., Ltd. does not have sufficient funds for its operation or repayment of borrowings, the Company bears a payment obligation in proportion to its ownership.

② The Company has outstanding borrowings with a limit of USD 275,600 thousand from its creditors such as International Finance Corporation. Regarding the borrowing contract, the Company has guaranteed capital contribution of USD 69,808 thousand and additional contribution up to USD 19,000 thousand for contingencies, if any. Moreover, for one of the electricity purchasers, Central Power Purchasing Agency Guarantee Ltd., the Company has provided performance guarantee up to USD 2,777 thousand, in case of construction delay or insufficient contract volume after commencement of the construction.

③ The Company has provided PT. Perusahaan Listrik Negara performance guarantee up to USD 917 thousand in proportion to its ownership in the electricity purchase contract with PT. Cirebon Energi Prasarana in relation to the second electirc power generation business in Cirebon, Indonesia. Also, in relation to the business, the Company has provided Limited Notice To Proceed 2 (“LNTP 2”) Offshore performance payment guarantee amounting to USD 2,784 thousand to Hyundai Engineering Co. Ltd., Toshiba Corporation and MHPS, and LNTP 2 Onshore performance payment guarantee amounting to USD 380 thousand to Hyundai E&C and Toshiba Asia Pacific Indonesia (TAPI) based on the interest owned by the Company to progress the construction.

④ The Company has provided the Export-Import Bank of Korea and SMBC guarantee of mutual investment of USD 401 thousand, which is equivalent to the ownership interest of PT Mega Power Mandiri, in order to guarantee the expenses related to hydroelectric power business of PT Wampu Electric Power, an associate of the Company.

⑤ The Company has provided the Export-Import Bank of Korea, BNP Paribas and ING Bank guarantee of mutual investment of USD 2,684 thousand, which is equivalent to the ownership interest of PT BS Energy and PT Nusantara Hydro Alam, in order to guarantee the expenses related to hydroelectric power business of Tanggamus, Indonesia.

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March 31, 2017

(Unaudited)

49. Contingencies and Commitments, Continued

(3) Credit lines provided by financial institutions as of March 31, 2017 are as follows:

In millions of won and thousands of foreign currencies
Commitments		Financial institutions		Currency		Limited amount
Commitments on bank-overdraft		Nonghyup Bank and others		KRW			1,635,240
Commitments on bank-daylight overdraft		Nonghyup Bank		KRW			280,000
Limit amount available for CP		Shinhan Bank and others		KRW			700,000
Limit amount available for card		KEB Hana Bank and others		KRW			46,333
		Banco de Oro		PHP			5,000
Loan limit		Kookmin Bank and others		KRW			1,182,282
		BNP Paribas and others		USD			2,048,650
Certification of payment on L/C		Shinhan Bank (*)		KRW			19,721
		Woori Bank and others		USD			1,024,621
Certification of performance guarantee on contract		Kookmin Bank and others		EUR			20,471
		KEB Hana Bank		INR			236,443
		Seoul Guarantee Insurance and others		KRW			100,814
		Bank of Kathmandu		NPR			32,633
		KEB Hana Bank and others		USD			635,903
Certification of bidding		SMBC and others		USD			18,660
Advance payment bond, Warranty bond, Retention bond and others		Bank of Kathmandu		NPR			7,176
		KEB Hana Bank		SAR			95,756
		HSBC and others		USD			3,594,363
Others		KEB Hana Bank		INR			157,830
		KEB Hana Bank and others		JPY			756,669
		Nonghyup Bank and others		KRW			276,250
		KEB Hana Bank		SAR			2,240
		KEB Hana Bank and others		USD			2,112,415
Inclusive credit		Shinhan Bank		INR			47,489
		KEB Hana Bank		KRW			258,000
		Shinhan Bank		USD			233,548
Trade finance		BNP Paribas and others		USD			800,000

(*) The Company was provided with a guarantee of W198 million from Daewoo Engineering & Construction Co. Ltd. for some of its commitments.

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March 31, 2017

(Unaudited)

49. Contingencies and Commitments, Continued

(4) As of March 31, 2017, blank check and assets provided as collaterals or pledges to financial institutions by the Company are follows:

In millions of won and thousands of foreign currencies

Guarantor

Guarantee

Type of guarantee

Currency

Amount

Description

Korea East-West Power Co., Ltd.

Korea Development Bank and others

Shareholdings of Gyeongju Wind Power Co., Ltd.

KRW

15,958

Collateral for borrowings

Korea Midland Power Co.,Ltd.

IBK and others

Shareholdings of Commerce and Industry Energy Co., Ltd.

KRW

13,605

Collateral for borrowings

Korea Southern Power Co., Ltd.

Shinhan Bank and others

Shareholdings of KOSPO Youngnam Power Co., Ltd.

KRW

40,000

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

Shareholdings of Gyeonggi Green Energy Co., Ltd.

KRW

47,000

Collateral for borrowings

Gyeonggi Green Energy Co., Ltd.

Korea Development Bank and others

Factory estate and others

KRW

327,080

Collateral for borrowings (*)

Commerce and Industry Energy Co., Ltd.

IBK and others

Land, buildings, structures and machinery and others

KRW

110,500

Collateral for borrowings

Cash and cash equivalents

KRW

9,759

Gyeongju Wind Power Co., Ltd.

SK Securities Co., Ltd. and others

Property, plant and equipment and others

KRW

77,778

Collateral for borrowings

Existing or expected trade receivables

KRW

4,454

Cash and cash equivalents

KRW

19,216

KOSPO Youngnam Power Co., Ltd.

Shinhan Bank and others

Bank deposit and insurance claim

KRW

396,120

Collateral for borrowings

Qatrana Electric Power Company

The Islamic Development Bank and others

Finance Lease receivable and property, plant and equipment and others

JOD

188,580

Collateral for borrowings

KST Electric Power Company

Scotiabank Inverlat, S.A

Finance Lease receivable and others

USD

332,850

Collateral for borrowings

(*) The Company was provided with shares of Gyeonggi Green Energy Co., Ltd., one of its subsidiaries, from the investors 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.

The Company has W1,197 million of project loans from Korea Resource Corporation as of March 31, 2017. The Company has provided a blank check as repayment guarantee.

(5) The Company temporarily suspended operations of the Gangneung hydroelectric generating plant, with a carrying amount of W93,222 million as of March 31, 2017, to improve the quality of water used in generating electricity. The expenses related to the suspension of operations of W60 million and depreciation on the utility plant of W1,664 million are recorded to other expenses for the three-month period ended March 31, 2017.

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March 31, 2017

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49. Contingencies and Commitments, Continued

(6) Due to the Korean government’s announcement of suspension of operation in the Gaeseong Industrial District, it is uncertain if the Company can exercise the property rights for the Company’s facility in the Gaeseong Industrial District as of March 31, 2017. The book value of facility is W19,499 million and the amount of trade receivables related to the companies residing in Gaeseong industrial complex is W1,680 million. The Company has entered into an insurance agreement covering up to W7,000 million with the Export-Import Bank of Korea related to Gaeseong industrial complex. The ultimate outcome of this event cannot be reasonably estimated.

50. Subsequent Events

(1) Subsequent to March 31, 2017, Korea Hydro & Nuclear Power Co., Ltd., Korea South-East Power Co., Ltd., Korea Western Power Co., Ltd. and Korea East-West Power Co., Ltd. issued non-guaranteed bonds and additional foreign currency short-term borrowings for funding facilities and operations as follows:

In millions of won and thousands of foreign currencies
Company Name		Type		Issued date				Maturity				Maturity				Amounts
Korea Hydro & Nuclear Power Co., Ltd.		Corporate bond #45-1 Corporate bond #45-2			2017.04.27 2017.04.27				2020.04.27 2027.04.27				1.93 2.44				140,000 50,000
		Corporate bond #45-3			2017.04.27				2037.04.27				2.60				110,000
Korea South-East Power Co., Ltd.		Foreign bond #5			2017.04.12				2020.04.13				2.38				USD 300,000
Korea Western Power Co., Ltd.		Short-term borrowings			2017.04.18				2017.05.24				1.39				140,000
					2017.04.20				2017.05.23				1.46				100,000
					2017.04.25				2017.06.29				1.48				100,000
					2017.05.08				2017.07.21				1.40				230,000
Korea East-West Power Co., Ltd.		#27-1 non-guaranteed bond			2017.04.28				2020.04.28				1.95				100,000
		#27-2 non-guaranteed bond			2017.04.28				2024.04.28				2.33				50,000
		#27-3 non-guaranteed bond			2017.04.28				2027.04.28				2.45				50,000

(2) The lawsuit filed to the Seoul Central District Court against KEPCO Plant Service & Engineering Co., Ltd. in relation to the ordinary wages was ruled on April 27, 2017 with a partial favor to the plaintiff. As of March 31, 2017, KEPCO Plant Service & Engineering Co., Ltd. recognized the provisions based on the best estimate of the expenditure required to fulfill its obligations related to the lawsuit and, currently, the effect of this ruling cannot be reasonably predicted.

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March 31, 2017

(Unaudited)

51. Adjusted Operating Profit

The operating profit in the Company’s consolidated interim statements of comprehensive income prepared in accordance with K-IFRS included in this report differs from that in its consolidated interim statements of comprehensive income prepared in accordance with IFRS as issued by IASB. The table below sets forth a reconciliation of the Company’s results from operating activities as presented in the Company’s consolidated interim statements of comprehensive income prepared in accordance with K-IFRS for each of the three-month periods ended March 31, 2017 and 2016 to the operating profit or loss as presented in the Company’s consolidated interim statements of comprehensive income prepared in accordance with IFRS as issued by IASB for each of the corresponding periods.

In millions of won		March 31, 2017				March 31, 2016
Operating profit on the consolidated interim statements of comprehensive income		W	1,463,186				3,605,347
Add
Other income
Reversal of other provisions			1,210				4,537
Reversal of other allowance for bad debt			—				987
Gains on government grants			36				36
Gains on assets contributed			7				1,328
Gains on liabilities exempted			505				3
Compensation and reparations revenue			24,180				24,130
Revenue from research contracts			1,976				834
Rental income			46,425				54,184
Others			11,077				6,263
Other gains
Gains on disposal of property, plant and equipment			11,029				18,598
Gains on disposal of intangible assets			463				—
Gains on foreign currency translation			18,117				8,791
Gains on foreign currency transaction			44,190				11,216
Gains on insurance proceeds			383				—
Others			107,594				49,412
Deduct
Other expenses
Accretion expenses of other provisions			(6,746	)			(49	)
Depreciation expenses on investment properties			(408	)			(198	)
Depreciation expenses on idle assets			(1,664	)			(1,670	)
Other bad debt expense			(3,988	)			(3,945	)
Donations			(19,607	)			(11,661	)
Others			(4,021	)			(3,179	)
Other losses
Losses on disposal of property, plant and equipment			(7,867	)			(4,260	)
Losses on disposal of intangible assets			—				(134	)
Losses on foreign currency translation			(15,157	)			(8,115	)
Losses on foreign currency transaction			(11,410	)			(19,935	)
Others			(18,330	)			(15,670	)
Adjusted operating profit		W	1,641,180				3,716,850

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