| 12. | Investments in Associates and Joint Ventures |
| (1) | Investments in associates and joint ventures accounted for using the equity method as of December 31, 2017 and 2016 are as follows: |
| (In millions of won) | ||||||||||||||||||
| December 31, 2017 | December 31, 2016 | |||||||||||||||||
|
Country |
Ownership (%) |
Carrying amount |
Ownership (%) |
Carrying amount |
||||||||||||||
|
Investments in associates: |
||||||||||||||||||
|
SK China Company Ltd.(*1) |
China | 27.3 | ￦ | 526,099 | 9.6 | ￦ | 46,354 | |||||||||||
|
Korea IT Fund(*2) |
Korea | 63.3 | 257,003 | 63.3 | 263,850 | |||||||||||||
|
KEB HanaCard Co., Ltd.(*3) |
Korea | 15.0 | 280,988 | 15.0 | 265,798 | |||||||||||||
|
NanoEnTek, Inc. |
Korea | 28.5 | 38,718 | 28.5 | 39,514 | |||||||||||||
|
SK Industrial Development China Co., Ltd.(*1) |
Hong Kong | — | — | 21.0 | 74,717 | |||||||||||||
|
SK Technology Innovation Company |
Cayman Islands | 49.0 | 42,511 | 49.0 | 47,488 | |||||||||||||
|
HappyNarae Co., Ltd.(*4) |
Korea | 45.0 | 21,873 | 42.5 | 17,236 | |||||||||||||
|
SK hynix Inc. |
Korea | 20.1 | 8,130,000 | 20.1 | 6,132,122 | |||||||||||||
|
SK MENA Investment B.V. |
Netherlands | 32.1 | 13,853 | 32.1 | 15,451 | |||||||||||||
|
SKY Property Mgmt. Ltd.(*1) |
Virgin Island | — | — | 33.0 | 263,225 | |||||||||||||
|
S.M. Culture & Contents Co., Ltd.(*5) |
Korea | 23.4 | 64,966 | — | — | |||||||||||||
|
Xian Tianlong Science and Technology Co., Ltd. |
China | 49.0 | 25,891 | 49.0 | 25,880 | |||||||||||||
|
Daehan Kanggun BcN Co., Ltd. and others |
— | — | 96,479 | — | 115,181 | |||||||||||||
|
|
|
|
|
|||||||||||||||
|
Sub-total |
9,498,381 | 7,306,816 | ||||||||||||||||
|
|
|
|
|
|||||||||||||||
|
Investments in joint ventures: |
||||||||||||||||||
|
Dogus Planet, Inc.(*6) |
Turkey | 50.0 | 13,991 | 50.0 | 20,081 | |||||||||||||
|
PT XL Planet Digital(*7) |
Indonesia | — | — | 50.0 | 27,512 | |||||||||||||
|
Finnq Co., Ltd.(*8) |
Korea | 49.0 | 16,474 | 49.0 | 24,174 | |||||||||||||
|
Celcom Planet and others |
— | — | 9,592 | — | 25,740 | |||||||||||||
|
|
|
|
|
|||||||||||||||
|
Sub-total |
40,057 | 97,507 | ||||||||||||||||
|
|
|
|
|
|||||||||||||||
|
Total |
￦ | 9,538,438 | ￦ | 7,404,323 | ||||||||||||||
|
|
|
|
|
|||||||||||||||
| (*1) |
During the year ended December 31, 2017, the Group contributed its shares in SKY Property Mgmt. Ltd. and SK Industrial Development China Co., Ltd., both equity method investees of the Group, to SK China Company Ltd., and participated in SK China Company Ltd.’s rights issue amounting to USD 100,000,000, which resulted in Group’s acquiring 8,101,884 and 2,107,037 shares of SK China Company Ltd., respectively. This investment in associates acquired through this contribution in kind transaction was measured at fair value. |
| (*2) | Investment in Korea IT Fund was classified as investment in associates as the Group does not have control over Korea IT Fund under the contractual agreement with other shareholders. |
| (*3) | This investment was classified as investments in associates as the Group can exercise significant influence through its right to appoint the members of board of directors even though the Group has less than 20% of equity interests. |
| (*4) | The Group acquired 40,000 shares of HappyNarae Co., Ltd. at ￦17,212 per share during the year ended December 31, 2017. |
| (*5) | During the year ended December 31, 2017, the Group subscribed to a third-party allocation of new shares of 22,033,898 by S.M. Culture & Contents Co., Ltd. at ￦65,341 million in cash. |
| (*6) | The investment is held by SK Planet Co., Ltd. |
| (*7) | PT XL Planet Digital was disposed during the year ended December 31, 2017. |
| (*8) | Investment in Finnq Co., Ltd. was classified as investment in joint venture as the Group has joint control pursuant to the agreement with the other shareholders. |
| (2) | The market price of investments in listed associates as of December 31, 2017 and 2016 are as follows: |
| (In millions of won, except for share data) | ||||||||||||||||||||||||
| December 31, 2017 | December 31, 2016 | |||||||||||||||||||||||
| Market value per share (in won) |
Number of shares |
Fair value | Market value per share (in won) |
Number of shares |
Fair value | |||||||||||||||||||
|
NanoEnTek, Inc. |
￦ | 5,950 | 6,960,445 | 41,415 | 5,020 | 6,960,445 | 34,941 | |||||||||||||||||
|
SK hynix Inc. |
76,500 | 146,100,000 | 11,176,650 | 44,700 | 146,100,000 | 6,530,670 | ||||||||||||||||||
|
S.M. Culture & Contents Co., Ltd. |
2,700 | 22,033,898 | 59,492 | — | — | — | ||||||||||||||||||
| (3) | The financial information of significant associates as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 are as follows: |
| (In millions of won) | ||||||||||||
| As of December 31, 2017 | ||||||||||||
| SK hynix Inc.(*) |
KEB HanaCard Co., Ltd. (*) |
SK China Company Ltd. (*) |
||||||||||
|
Current assets |
￦ | 17,310,444 | 7,339,492 | 729,872 | ||||||||
|
Non-current assets |
28,108,020 | 220,258 | 1,031,647 | |||||||||
|
Current liabilities |
8,116,133 | 1,181,746 | 81,161 | |||||||||
|
Non-current liabilities |
3,481,412 | 4,861,842 | 64,717 | |||||||||
| 2017 | ||||||||||||
|
Revenue |
30,109,434 | 1,519,607 | 69,420 | |||||||||
|
Profit for the year |
10,642,219 | 106,352 | 11,492 | |||||||||
|
Other comprehensive income (loss) |
(422,042 | ) | (984 | ) | 27,190 | |||||||
|
Total comprehensive income |
10,220,177 | 105,368 | 38,682 | |||||||||
| (*) | The financial information of SK hynix Inc., KEB HanaCard Co., Ltd., and SK China Company Ltd. are consolidated financial information. |
| (In millions of won) | ||||||||
| As of December 31, 2016 | ||||||||
| SK hynix Inc.(*) | KEB HanaCard Co., Ltd.(*) | |||||||
|
Current assets |
￦ | 9,838,982 | 6,868,387 | |||||
|
Non-current assets |
22,377,044 | 239,758 | ||||||
|
Current liabilities |
4,160,849 | 1,219,327 | ||||||
|
Non-current liabilities |
4,031,647 | 4,476,979 | ||||||
| 2016 | ||||||||
|
Revenue |
17,197,975 | 1,413,077 | ||||||
|
Profit for the year |
2,960,483 | 75,595 | ||||||
|
Other comprehensive income (loss) |
28,844 | (154 | ) | |||||
|
Total comprehensive income |
2,989,327 | 75,441 | ||||||
| (*) | The financial information of SK hynix Inc. and KEB HanaCard Co., Ltd. are consolidated financial information. |
| (In millions of won) | ||||||||
| SK hynix Inc. | KEB HanaCard Co., Ltd. | |||||||
| 2015 | ||||||||
|
Revenue |
￦ | 18,797,998 | 1,472,830 | |||||
|
Profit for the year |
4,323,595 | 10,119 | ||||||
|
Other comprehensive income (loss) |
40,215 | (547 | ) | |||||
|
Total comprehensive income |
4,363,810 | 9,572 | ||||||
| (4) | The condensed financial information of joint ventures as of December 31, 2017 and 2016 and for the years ended December 31, 2017, 2016 and 2015 are as follows: |
| (In millions of won) | ||||||||
| Dogus Planet, Inc. | Finnq Co., Ltd. | |||||||
| As of December 31, 2017 | ||||||||
|
Current assets |
￦ | 39,656 | 32,232 | |||||
|
Cash and cash equivalents |
25,818 | 4,590 | ||||||
|
Non-current assets |
21,159 | 15,610 | ||||||
|
Current liabilities |
32,622 | 5,685 | ||||||
|
Accounts payable, other payables and provision |
2,743 | 2,290 | ||||||
|
Non-current liabilities |
212 | 13,862 | ||||||
| 2017 | ||||||||
|
Revenue |
82,791 | — | ||||||
|
Depreciation and amortization |
(6,152 | ) | (1,077 | ) | ||||
|
Interest income |
781 | 532 | ||||||
|
Interest expense |
(4 | ) | (276 | ) | ||||
|
Loss for the year |
(4,535 | ) | (15,699 | ) | ||||
|
Total comprehensive loss |
(4,535 | ) | (15,699 | ) | ||||
| (In millions of won) | ||||||||||||
| Dogus Planet, Inc. | PT XL Planet Digital |
Finnq Co., Ltd. | ||||||||||
| As of December 31, 2016 | ||||||||||||
|
Current assets |
￦ | 46,433 | 20,077 | 48,699 | ||||||||
|
Cash and cash equivalents |
45,839 | 14,985 | 48,408 | |||||||||
|
Non-current assets |
20,218 | 50,765 | 673 | |||||||||
|
Current liabilities |
26,417 | 14,513 | 138 | |||||||||
|
Accounts payable, other payables and provision |
1,971 | 10,306 | 15 | |||||||||
|
Non-current liabilities |
72 | 1,305 | 784 | |||||||||
| 2016 | ||||||||||||
|
Revenue |
53,864 | 9,492 | — | |||||||||
|
Depreciation and amortization |
(5,299 | ) | (940 | ) | (12 | ) | ||||||
|
Interest income |
394 | 267 | 182 | |||||||||
|
Interest expense |
(2,139 | ) | — | — | ||||||||
|
Income tax benefit |
— | 51 | — | |||||||||
|
Loss for the year |
(22,017 | ) | (49,438 | ) | (829 | ) | ||||||
|
Total comprehensive loss |
(22,017 | ) | (49,438 | ) | (829 | ) | ||||||
| (In millions of won) | ||||||||||||
| Dogus Planet, Inc. |
PT. Melon Indonesia |
PT XL Planet Digital |
||||||||||
| 2015 | ||||||||||||
|
Revenue |
￦ | 38,944 | 17,094 | 5,536 | ||||||||
|
Depreciation and amortization |
(5,318 | ) | (132 | ) | (2,746 | ) | ||||||
|
Interest income |
465 | 288 | 525 | |||||||||
|
Income tax benefit |
— | — | 7,025 | |||||||||
|
Profit (Loss) for the year |
(32,713 | ) | 1,853 | (21,381 | ) | |||||||
|
Total comprehensive income (loss) |
(32,713 | ) | 1,853 | (21,381 | ) | |||||||
| (5) | Reconciliations of financial information of significant associates to carrying amounts of investments in associates in the consolidated financial statements as of December 31, 2017 and 2016 are as follows: |
| (In millions of won) | ||||||||||||||||||||
| December 31, 2017 | ||||||||||||||||||||
| Net assets |
Ownership interests (%) |
Net assets attributable to the ownership interests |
Cost-book value differentials |
Carrying amount |
||||||||||||||||
|
Associates: |
||||||||||||||||||||
|
SK hynix Inc.(*1,2) |
￦ | 33,814,467 | 20.1 | 6,997,560 | 1,132,440 | 8,130,000 | ||||||||||||||
|
KEB HanaCard Co., Ltd. |
1,516,162 | 15.0 | 227,424 | 53,564 | 280,988 | |||||||||||||||
|
SK China Company Ltd.(*1) |
1,612,899 | 27.3 | 439,857 | 86,242 | 526,099 | |||||||||||||||
| (In millions of won) | ||||||||||||||||||||
| December 31, 2016 | ||||||||||||||||||||
| Net assets |
Ownership interests (%) |
Net assets attributable to the ownership interests |
Cost-book value differentials |
Carrying amount |
||||||||||||||||
|
Associates: |
||||||||||||||||||||
|
SK hynix Inc.(*1,2) |
￦ | 24,016,955 | 20.1 | 4,970,267 | 1,161,855 | 6,132,122 | ||||||||||||||
|
KEB HanaCard Co., Ltd. |
1,411,839 | 15.0 | 211,776 | 54,022 | 265,798 | |||||||||||||||
| (*1) | Net assets of these entities represent net assets excluding those attributable to their non-controlling interests. |
| (*2) | The ownership interest is based on the number of shares owned by the Parent Company as divided by the total shares issued by the investee company. The Group applied the equity method using the effective ownership interest of 20.69% which is based on the number of shares owned by the Parent Company and the total issued shares outstanding less investee’s treasury shares. |
| (6) | Details of the changes in investments in associates and joint ventures accounted for using the equity method for the years ended December 31, 2017 and 2016 are as follows: |
| (In millions of won) | 2017 | |||||||||||||||||||||||||||
| Beginning balance |
Acquisition and disposition |
Share of profit (loss) |
Other compre- hensive income (loss) |
Impair- ment loss |
Other increase (decrease) |
Ending balance |
||||||||||||||||||||||
|
Investments in associates |
||||||||||||||||||||||||||||
|
SK China Company Ltd.(*1) |
￦ | 46,354 | 113,803 | 2,707 | (36,783 | ) | — | 400,018 | 526,099 | |||||||||||||||||||
|
Korea IT Fund(*2) |
263,850 | — | (8,815 | ) | 3,371 | — | (1,403 | ) | 257,003 | |||||||||||||||||||
|
KEB HanaCard Co., Ltd. |
265,798 | — | 15,494 | (304 | ) | — | — | 280,988 | ||||||||||||||||||||
|
NanoEnTek, Inc. |
39,514 | — | (733 | ) | (63 | ) | — | — | 38,718 | |||||||||||||||||||
|
SK Industrial Development China Co., Ltd.(*1) |
74,717 | — | 5,154 | (1,092 | ) | — | (78,779 | ) | — | |||||||||||||||||||
|
SK Technology Innovation Company |
47,488 | — | 433 | (5,410 | ) | — | — | 42,511 | ||||||||||||||||||||
|
HappyNarae Co., Ltd. |
17,236 | 688 | 3,929 | 20 | — | — | 21,873 | |||||||||||||||||||||
|
SK hynix Inc.(*2) |
6,132,122 | — | 2,175,887 | (90,349 | ) | — | (87,660 | ) | 8,130,000 | |||||||||||||||||||
|
SK MENA Investment B.V. |
15,451 | — | 131 | (1,729 | ) | — | — | 13,853 | ||||||||||||||||||||
|
SKY Property Mgmt. Ltd.(*1) |
263,225 | — | 2,362 | 1,141 | — | (266,728 | ) | — | ||||||||||||||||||||
|
S.M. Culture & Contents Co., Ltd. |
— | 65,341 | (375 | ) | — | — | — | 64,966 | ||||||||||||||||||||
|
Xian Tianlong Science and Technology Co., Ltd. |
25,880 | — | 11 | — | — | — | 25,891 | |||||||||||||||||||||
|
Daehan Kanggun BcN Co., Ltd. and others(*2) |
115,181 | (1,306 | ) | (6,924 | ) | (2,723 | ) | (1,311 | ) | (6,438 | ) | 96,479 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Sub-total |
7,306,816 | 178,526 | 2,189,261 | (133,921 | ) | (1,311 | ) | (40,990 | ) | 9,498,381 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Investments in joint ventures |
|
|||||||||||||||||||||||||||
|
Dogus Planet, Inc. |
20,081 | 2,162 | (2,267 | ) | (5,985 | ) | — | — | 13,991 | |||||||||||||||||||
|
PT XL Planet Digital(*3) |
27,512 | (18,864 | ) | (8,648 | ) | — | — | — | — | |||||||||||||||||||
|
Finnq Co., Ltd |
24,174 | — | (7,691 | ) | (9 | ) | — | — | 16,474 | |||||||||||||||||||
|
Celcom Planet and others |
25,740 | — | (6,228 | ) | (833 | ) | — | (9,087 | ) | 9,592 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Sub-total |
97,507 | (16,702 | ) | (24,834 | ) | (6,827 | ) | — | (9,087 | ) | 40,057 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Total |
￦ | 7,404,323 | 161,824 | 2,164,427 | (140,748 | ) | (1,311 | ) | (50,077 | ) | 9,538,438 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (*1) | Other increase (decrease) is due to merger of SK China Company Ltd., SK Industrial Development China Co., Ltd. and SKY Property Mgmt. Ltd. |
| (*2) | Dividends received from the associates are deducted from the carrying amount during the year ended December 31, 2017. |
| (*3) | During the year ended December 31, 2017, the Group disposed the shares of PT XL Planet Digital and recognized loss on disposal of ￦27,900 million. |
| (In millions of won) | ||||||||||||||||||||||||||||
| 2016 | ||||||||||||||||||||||||||||
| Beginning balance |
Acquisition and disposition |
Share of profit (loss) |
Other compre- hensive income (loss) |
Impair- ment loss |
Other increase (decrease) |
Ending balance |
||||||||||||||||||||||
|
Investments in associates |
||||||||||||||||||||||||||||
|
SK China Company Ltd. |
￦ | 43,814 | — | 2,257 | 283 | — | — | 46,354 | ||||||||||||||||||||
|
Korea IT Fund(*1) |
260,456 | — | 14,864 | (5,388 | ) | — | (6,082 | ) | 263,850 | |||||||||||||||||||
|
KEB HanaCard Co., Ltd. |
254,177 | — | 11,658 | (37 | ) | — | — | 265,798 | ||||||||||||||||||||
|
Candle Media Co., Ltd. |
20,144 | (18,860 | ) | (673 | ) | (611 | ) | — | — | — | ||||||||||||||||||
|
NanoEnTek, Inc. |
45,008 | — | (3,950 | ) | (1,544 | ) | — | — | 39,514 | |||||||||||||||||||
|
SK Industrial Development China Co., Ltd. |
86,324 | — | (6,298 | ) | (5,309 | ) | — | — | 74,717 | |||||||||||||||||||
|
SK Technology Innovation Company |
45,891 | — | 162 | 1,435 | — | — | 47,488 | |||||||||||||||||||||
|
HappyNarae Co., Ltd. |
17,095 | — | 240 | (99 | ) | — | — | 17,236 | ||||||||||||||||||||
|
SK hynix Inc.(*1) |
5,624,493 | — | 572,086 | 8,593 | — | (73,050 | ) | 6,132,122 | ||||||||||||||||||||
|
SK MENA Investment B.V. |
14,929 | — | 63 | 459 | — | — | 15,451 | |||||||||||||||||||||
|
SKY Property Mgmt. Ltd. |
251,166 | — | 16,066 | (4,007 | ) | — | — | 263,225 | ||||||||||||||||||||
|
Xian Tianlong Science and Technology Co., Ltd. |
25,767 | — | 113 | — | — | — | 25,880 | |||||||||||||||||||||
|
Daehan Kanggun BcN Co., Ltd. and others |
161,058 | (26,798 | ) | (13,179 | ) | 754 | (6,972 | ) | 318 | 115,181 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Sub-total |
6,850,322 | (45,658 | ) | 593,409 | (5,471 | ) | (6,972 | ) | (78,814 | ) | 7,306,816 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Investments in joint ventures |
||||||||||||||||||||||||||||
|
Dogus Planet, Inc. |
15,118 | 18,722 | (11,008 | ) | (2,751 | ) | — | — | 20,081 | |||||||||||||||||||
|
PT. Melon Indonesia(*2) |
4,339 | (3,488 | ) | 918 | (1,769 | ) | — | — | — | |||||||||||||||||||
|
PT XL Planet Digital |
23,108 | 29,123 | (24,719 | ) | — | — | — | 27,512 | ||||||||||||||||||||
|
Finnq Co., Ltd |
— | 24,580 | (406 | ) | — | — | — | 24,174 | ||||||||||||||||||||
|
Celcom Planet and others |
3,406 | 43,769 | (21,435 | ) | — | — | — | 25,740 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Sub-total |
45,971 | 112,706 | (56,650 | ) | (4,520 | ) | — | — | 97,507 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Total |
￦ | 6,896,293 | 67,048 | 536,759 | (9,991 | ) | (6,972 | ) | (78,814 | ) | 7,404,323 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
| (*1) | Dividends received from the associate are deducted from the carrying amount during the year ended December 31, 2016. |
| (*2) | During the year ended December 31, 2016, the Group disposed of all shares of PT. Melon Indonesia and recognized gain on disposal of ￦11,634 million. |
| (7) | The Group discontinued the application of equity method to the following investees due to their carrying amounts being reduced to zero. The details of cumulative unrecognized equity method losses as of December 31, 2017 are as follows: |
| (In millions of won) | ||||||||||||||||
| Unrecognized loss (profit) | Unrecognized change in equity | |||||||||||||||
| Year ended December 31, 2017 |
Cumulative loss |
Year ended December 31, 2017 |
Cumulative loss |
|||||||||||||
|
Wave City Development Co., Ltd. |
￦ | (1,190 | ) | 2,100 | — | — | ||||||||||
|
Daehan Kanggun BcN Co., Ltd. and others |
(5,475 | ) | 5,316 | — | 365 | |||||||||||
|
|
|
|
|
|
|
|
|
|||||||||
| ￦ | (6,665 | ) | 7,416 | — | 365 | |||||||||||
|
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|
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|
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|
|
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