6-K/A 1 d145671d6ka.htm FORM 6-K/A Form 6-K/A

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K/A

 

 

REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13a-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of February, 2021

Commission File Number: 1-13368

 

 

POSCO

(Translation of registrant’s name into English)

 

 

POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, Korea, 06194

(Address of principal executive office)

 

 

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):  ☐

Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.

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):  ☐

Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.

 

 

 


POSCO is furnishing under cover of Form 6-K:

 

Exhibit 99.1:    An English-language translated documents with respect to Notice of the 53rd Ordinary General Meeting of Shareholders


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.

 

  POSCO
  (Registrant)
Date: February 23, 2021   By  

/s/ Chung, Kyung-Jin

    (Signature)
    Name: Chung, Kyung—Jin
    Title: Senior Vice President


Exhibit 99.1

To Shareholders

Notice of the 53rd Ordinary General Meeting of Shareholders

We hereby notify you that the 53rd Ordinary General Meeting of Shareholders will be held pursuant to Article 362 of the Korean Commercial Act and Article 19 of the Company’s Articles of Incorporation as follows.

1. Date: March 12, 2021 at 9:00 am (KST)

2. Place: Art Hall, 4F West Wing, POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, Korea

3. List of Agenda Items

 

   

Agenda 1 : Approval of Financial Statements for the 53rd FY

(From January 1, 2020 to December 31, 2020)

(Year-end dividend per share : KRW 4,500)

[Description of the Proposal]

Pursuant to Article 449 of the Korean Commercial Act and Article 53 of the Company’s Articles of Incorporation, we request that the Ordinary General Meeting of Shareholders to approve the 53rd Fiscal Year Financial Statements.

 

   

Consolidated Financial Statements: See Appendix 1

 

   

Separate Financial Statements: See Appendix 2

 

The audit report from the independent auditors of 53rd FY Financial Statements, based on K-IFRS standards, will be uploaded at POSCO website (http://www.posco.co.kr) and will be disclosed at the SEC website (https://www.sec.gov) in early March, 2021.


   

Agenda 2: Partial Amendments of the Articles of Incorporation

[Description of the Proposal]

Pursuant to Article 433 of the Korean Commercial Act and Article 24 of the Company’s Articles of Incorporation, we request that the Ordinary General Meeting of Shareholders to approve partial amendments of the Articles of Incorporation.

 

Existing Article    Amendment

Article 29-2. Recommendation of Inside Director Candidate other than the CEO and the Representative Director

 

A candidate for Inside Director other than the CEO and the Representative Director shall be recommended by the Board of Directors after his qualification is approved by the Director Candidate Recommendation and Management Committee as prescribed in Paragraph (1) of Article 45.

  

Article 29-2. Recommendation of Inside Director Candidate other than the CEO and the Representative Director

 

A candidate for Inside Director other than the CEO and the Representative Director shall be recommended by the Board of Directors after his qualification is approved by the Director Candidate Recommendation Committee as prescribed in Paragraph (1) of Article 45.

   

Article 30. Recommendation of Candidate for Outside Directors

 

(1)   A candidate for Outside Director shall be recommended by the Director Candidate Recommendation and Management Committee as prescribed in Paragraph (1) of Article 45. Such candidates shall be among those qualified persons as prescribed in Article 31.

 

(2)   A shareholder holding voting shares of the Company may recommend a candidate for Outside Director to the Director Candidate Recommendation and Management Committee by the exercise of the shareholder proposal right under the applicable legislation.

 

(3)   The Director Candidate Recommendation and Management Committee shall determine the details regarding recommendation for, and evaluation on qualification of, candidates for Outside Director.

  

Article 30. Recommendation of Candidate for Outside Directors

 

(1)   A candidate for Outside Director shall be recommended by the Director Candidate Recommendation Committee as prescribed in Paragraph (1) of Article 45. Such candidates shall be among those qualified persons as prescribed in Article 31.

(2)   A shareholder holding voting shares of the Company may recommend a candidate for Outside Director to the Director Candidate Recommendation Committee by the exercise of the shareholder proposal right under the applicable legislation.

(3)   The Director Candidate Recommendation Committee shall determine the details regarding recommendation for, and evaluation on qualification of, candidates for Outside Director.


Article 45. Special Committees

 

(1)   The Company shall have special committees under the control of the Board of Directors as follows:

 

1.  (To be added)

 

2.  Director Candidate Recommendation and Management Committee;

 

3.  Evaluation and Compensation Committee;

 

4.  Finance and Related Party Transactions Committee;

 

5.  Executive Management Committee; and

6.  Audit Committee

  

Article 45. Special Committees

 

(1)   The Company shall have special committees under the control of the Board of Directors as follows:

 

1.  ESG Committee;

 

2.  Director Candidate Recommendation Committee;

 

3.  Evaluation and Compensation Committee;

 

4.  Finance Committee;

 

5.  Executive Management Committee; and

 

6.  Audit Committee


   

Agenda 3: Election of Inside Directors

[Description of the Proposal]

Pursuant to Article 382 of the Korean Commercial Act and Article 28, 29, 29-2 of the Company’s Articles of Incorporation, we request the Ordinary General Meeting of Shareholders to appoint one(1) Inside Director who becomes the Representative Director & CEO and other four(4) Inside Directors of the Company as follows.

 

   

Number of Inside Directors to be Elected: 5 Directors

 

   

One(1) Candidate for the Representative Director & CEO

 

Name/

Agenda

   Date of Birth    Professional Experience    Term
   Recommended by    Period    Details

Choi,

Jeong-Woo

(3-1)

   April 10, 1957   

July 2018 ~ Present

 

March 2018

 

2017

    

 

2016

    

 

2015

    

 

2014

    

 

2010

 

2008

  

Representative Director & CEO, POSCO

    

 

Representative Director & President, POSCO CHEMICAL

 

Representative Director & President, Head of Corporate Strategy & Finance Center, POSCO

 

Inside Director & Senior Executive Vice President,

Head of Corporate Strategy & Finance Center, POSCO

 

Senior Executive Vice President, Head of Value Management Department, POSCO

 

Representative Director & Senior Executive Vice President, Head of Planning and Finance, POSCO Daewoo Corporation

 

Head of Corporate Audit Office, POSCO

 

Senior Vice President, Head of Corporate Strategy

Department, POSCO E&C

   3 Years
   Board of Directors

 

   

Other Four(4) Inside Directors Candidates

 

Name/

Agenda

   Date of Birth    Professional Experience    Term
   Recommended by    Period    Details

Kim,

Hag-Dong

(3-2)

   May 27, 1959   

January 2021

~Present

 

2019

    

 

2017

 

2015

 

2013

 

2010

  

Inside Director & President, Head of Steel Business Unit, POSCO

    

 

Inside Director & Senior Executive Vice President, Head of Steel Production & Technology Division, POSCO

 

Senior Executive Vice President, Head of Gwangyang Works, POSCO

 

Senior Executive Vice President, Head of Pohang Works, POSCO

 

Representative Director & Senior Executive Vice President, SNNC

 

Senior Vice President, Deputy Head of Gwangyang Works(Iron & Steel Making), POSCO

   1 Year
   Board of Directors


         

Chon,

Jung-Son

(3-3)

   August 26, 1962   

March 2020 ~ Present

    

 

2019

    

 

2018

    

 

2017

 

2016

    

 

2014

    

 

2012

  

Inside Director & Senior Executive Vice President, Head of Global & Infra Business Unit and Head of Corporate Strategy & Planning Division, POSCO

 

Inside Director & Senior Executive Vice President, Head of Corporate Strategy & Planning Division, POSCO

 

Inside Director & Senior Executive Vice President, Head of Corporate Strategy & Finance Center, POSCO

 

Representative Director & President, POSCO C&C

 

Executive Vice President, Head of POSCO Corporate Strategy Office, POSCO

 

Senior Vice President, Senior Corporate Advisor, Value Management Department, POSCO

 

Senior Vice President, Head of Raw Materials Procurement Department, POSCO

   1 Year
   Board of Directors
         

Jeong,

Tak

(3-4)

   April 5, 1959   

March 2019

~Present

 

2018

    

 

2016

    

 

2015

    

 

2013

    

 

2012

 

2010

  

Inside Director & Senior Executive Vice President, Head of Marketing Division, POSCO

 

Senior Executive Vice President, Head of Steel Business Division, POSCO

 

Executive Vice President, Head of Steel Business Strategy Department, POSCO

 

Executive Vice President, Head of Energy and Shipbuilding Materials Marketing Department, POSCO

 

Senior Vice President, Head of Energy and Shipbuilding Materials Marketing Department, POSCO

 

Senior Vice President, Overseas Marketing Department, POSCO

 

Senior Vice President, Head of Metal/HR Steel Business Division, Daewoo Corporation

   1 Year
   Board of Directors
         

Chung,

Chang-Hwa

(3-5)

   June 18, 1961   

January 2020
~Present

 

2017

    

 

July 2015

 

February 2015

 

2012

  

Senior Executive Vice President, Head of Management Support Division, POSCO

 

Senior Executive Vice President, Managing Director, POSCO-China (From January 2019)

 

Executive Vice President, Head of Public Relations Department, POSCO

 

Executive Vice President, Head of CR Center, POSCO E&C

 

Senior Vice President, Head of Communication Department, POSCO

   1 Year
   Board of Directors

 

*

All candidates have no relation with the largest shareholder and no transactions with POSCO in the past three years.

*

All candidates stated and signed that they do not have any legal issues to be qualified for directors.


   

Recommendation for candidates by the Board of Directors

 

Name/

Agenda

   Grounds

Choi,

Jeong-Woo

(3-1)

   The CEO Candidate Recommendation Committee which consists of outside directors, conducted qualification screening in independent and objective ways through several meetings with the current CEO. In a rapidly changing business circumstances, in order to enhance POSCO’s long-term value and improve competitiveness, the current CEO Choi, Jeong-Woo is recommended as the next CEO candidate.

Kim,

Hag-Dong

(3-2)

   As the Head of Steel Production & Technology Division, the candidate has devoted himself for the competitiveness of steel production and stable operation of steel mills. As of January 4, 2021, he has been positioned as the Head of Steel Business Unit and is expected to be the key person to stably manage steel business.

Chon,

Jung-Son

(3-3)

   As the Head of Global & Infra Business Unit and the Head of Corporate Strategy & Planning Division, the candidate has contributed himself to the establishment of POSCO Group business strategies and executions. Based on his knowledge and experience in the overall Group businesses, he is judged to be the right person to contribute for effective decision-makings on various business related matters.

Jeong,

Tak

(3-4)

   The candidate contributed to increase sales performance by establishing and implementing preemptive steel business strategies in the face of increasing uncertainty in the domestic and overseas markets and he is judged to be the right person to expand the steel business and improve profitability based on his expertise and extensive experience in the marketing fields.

Chung,

Chang-Hwa

(3-5)

  

The candidate has smoothly supported various projects promoted by the company based on his abundant experience and expertise in the field of public relations and external cooperation.

He is considered to be the right person to lead improvement of organizational culture and employee competency through innovation in work culture to support future growth strategies.


   

Agenda 4: Election of Outside Directors

[Description of the Proposal]

Pursuant to Article 382 of the Korean Commercial Act, Article 28 and 30 of the Company’s Articles of Incorporation, we request the Ordinary General Meeting of Shareholders to appoint Outside Directors of the Company as follows.

 

   

Number of Outside Directors to be Elected: 2 Directors

 

   

Candidates

 

Name    Date of Birth    Professional Experience    Term
   Recommended by    Period    Details

Yoo,

Young-Sook

(4-1)

   May 29, 1955   

March 1994 ~Present

 

January 2020 ~Present

 

2014

    

 

2014

 

2011~2013

 

2009

 

2007

 

1990

  

Principal Research Scientist, Korea Institute of Science and Technology(KIST)

 

Chairperson of the Board(non-permanent), Climate Change Center

    

 

Director(non-permanent), Research Institute of Industrial Science & Technology

 

Co-President, Climate Change Center

 

Minister, Ministry of Environment

 

Vice President, KIST

 

Head of Biological Science Research, KIST

 

Senior Research Scientist, KIST

   3 Years
   Director Candidate Recommendation and Management Committee
         

Kwon,

Tae-Kyun

(4-2)

   November 28, 1955   

2015~Present

 

2014~2020

 

2017~2019

 

2010

 

2009

 

2008

 

2007

 

2006

 

2001

 

1996

 

1992

  

Senior Advisor (non-permanent), Yulchon LLC.

 

Outside Director, SAMSUNG ELECTRO-MECHANICS CO., LTD.

 

Outside Director, MIRAE ASSET DAEWOO CO., LTD.

 

Ambassador, Korea to the United Arab Emirates

 

Chief Administrator, Public Procurement Service

 

Head of Trade and Investment Office, Ministry of Knowledge Economy

 

Deputy Minister for Free Economic Zone Planning, MOFE

 

Commissioner, Korea Financial Intelligence Unit, MOFE

 

Economic Councilor, OECD Representative

 

Finance and Economy Adviser, Office of the President

 

Country Officer, Asian Development Bank

   3 Years
   Director Candidate Recommendation and Management Committee

 

   

Candidates’ plan to fulfill duties as Outside Directors

 

Name    Working Plan

Yoo,

Young-Sook

(4-1)

  

To contribute to the decision-making of the Board of Directors, based on experience and expertise in the environment fields, on strengthening ESG such as climate change and low carbon economy, which are emerging as important corporate management agendas.

 

The candidate is well aware of environmental issues and trends in the international community, including participation of the United Nations Climate Change Conference every year since her days as the Minister in the Ministry of Environment. As the Chairperson of the Climate Change Center, the candidate is expected to contribute to the establishment of developmental and sound corporate policies by utilizing a wide range of domestic and international environment-related networks and information. The candidate intends to abide by the duties of Outside Directors with transparent and independent position, and to contribute to corporate social responsibility and sustainability management.

 


   

Kwon,

Tae-Kyun

(4-2)

  

The candidate intends to serve as a member of the Board of Directors based on his various experiences and expertise in finance and investment-related fields such as the Asian Development Bank and the Ministry of Finance and Economy.

 

After retiring from public office in 2013, the candidate has served as an advisory roles in the fields of domestic and foreign investment of companies, such as the visiting research fellow at Korea Institute for International Economic Policy and the invited research fellow at the Institute for Foreign Economic Policy, the advisory committee member of the Saemangeum Development Agency, the adjunct professor at the Korea Human Resource Development Institute for Health & Welfare, and the Chairman of the Professional Infrastructure Developers Association, and intends to contribute to the Board of Directors through constructive suggestions in the related fields.

 

As an Outside Director, the candidate, with transparent and independent position, intends to represent rights and interests of interested parties such as the company and shareholders in balanced ways, and intends to perform progressive role for soundness of the company and reasonable checks on the company’s businesses.

 

   

Recommendation for the candidate by the Board of Directors

 

Name    Grounds

Yoo,
Young-Sook

(4-1)

  

As an expert in the fields of environment, who served as the Minister at the Ministry of Environment, the candidate continues to carry out wide range of activities in the domestic and foreign environment fields, including the Chairperson of the Board at the Climate Change Center.

 

The candidate is expected to greatly contribute to the company’s management and the Board operations related to ESG, which is growing in importance in the future.

   

Kwon,

Tae-Kyun

(4-2)

  

As a financial expert who worked in the Asian Development Bank and financial departments of the public institutions, the candidate continues his wide range of activities in the related fields such as overseas expansion of companies and domestic investments of foreign companies by utilizing his financial expertise even after retirement from the public office.

 

The candidate also has high degree of understanding of corporate governance by serving as an outside director of other companies for many years, and is expected to greatly contribute to the company’s management and the Board operations.

 

*

The candidates have no relation with the largest shareholder and no transactions with POSCO for the past three years.

 

-

In the case of the candidate Kwon, Tae-Kyun, the company has transactions with Yulchon LLC. but has no transaction with the candidate.

 

-

POSCO and Yulchon LLC. had some spot-based transactions. However, the candidate Kwon, Tae-Kyun had his investment advisory roles mainly with middle eastern regions and he has not conducted any advisory roles to POSCO.

 

-

The company has sought legal advices from Yulchon LLC for reviewing legal, tax and financial risks related to the company’s businesses and retained the firm for lawsuit representations.

 

-

Candidate Kwon, Tae-Kyun does not hold a certificate to practice law, neither for tax/auditory services. While at Yulchon LLC, the candidate has been in a non-permanent position and has done advisory services regarding investments in the Middle East. As such, the candidate has not provided any advisory service to POSCO.

 

-

The contract between Yulchon LLC and candidate Kwon, Tae-Kyun will be terminated in May of 2021.

 

*

The candidates stated and signed that they do not have any legal issues to be qualified for outside directors.


   

Agenda 5: Election of an Outside Director to Become an Audit Committee Member

[Description of the Proposal]

Pursuant to Article 542-12 of the Korean Commercial Act and Article 48 of the Company’s Articles of Incorporation, we request the Ordinary General Meeting of Shareholders to appoint an Outside Director to become an Audit Committee Member of the Company as follows.

 

   

Candidate

 

Name   Date of Birth    Professional Experience    Term
  Recommended by    Period    Details

Kim,

Sung-Jin

  April 18, 1949   

March 2018

~March 2021

 

2011

    

 

2009

 

2006

 

2004

    

 

2003

    

 

2003

    

 

1998

    

    

 

1975

  

Outside Director, POSCO

    

 

Adjunct Professor, Department of Economics, Seoul National University

 

President, Hankyong National University

 

Minister, Ministry of Maritime Affairs and Fisheries

 

Administrator, Small and Medium Business Administration

 

Secretary to the President on Policy Planning and Industrial Policy

 

Director General, Social Budget Bureau at National Budget Administration

 

Director General, Finance & Economy Bureau and Industrial Policy Bureau at the Office of the Prime Minister

 

Deputy Director, Economic Planning Bureau and Budget Bureau

   3 Years
  Director Candidate
Recommendation and
Management
Committee

 

   

Candidate’s plan to fulfill duties as an Outside Director

 

Name    Working Plan
Kim, Sung-Jin   

Based on various experiences, such as the Minister at the Ministry of Maritime Affairs and Fisheries, and the Administrator of the Small and Medium Business Administration, and the President of Hankyong National University, the candidate will examine risks of management activities in legal and practical aspects, and will intend to provide constructive and concrete advice from the perspective of shareholders and interested parties of the company.

 

Based on experiences in the POSCO’s Board of Directors and the Special Committees such as Evaluation and Compensation Committee, and Finance and Related Party Transactions Committee over the past three years, the candidate intends to make suggestions for the company’s corporate governance to operate in reasonable manners.

 

As an Outside Director, the candidate, with transparent and independent position, will take progressive roles for internal soundness and reasonable checks of the company’s businesses.


   

Recommendation for the candidate by the Board of Directors

 

Name    Grounds
Kim, Sung-Jin    As an industrial policy expert who served as the Minister at the Ministry of Maritime Affairs and Fisheries after serving as an industrial policy secretary and the Administrator of the Small and Medium Business Administration, the candidate has contributed over the past three years to the areas of company policies, risk inspections, and the Board operations based on his abundant experience and knowledge in related fields. The candidate is recommended as an Outside Director as he is expected to continue to contribute to the operation and development of the Board of Directors.

 

*

The candidate has no relation with the largest shareholder and no transactions with POSCO for the past three years.

*

The candidate stated and signed that they do not have any legal issue to be qualified for director.

 

   

Agenda 6: Approval of the Ceiling Amount of Total Remuneration for Directors

[Description of the Proposal]

Pursuant to Article 388 of the Korean Commercial Act and Article 36 of the Company’s Articles of Incorporation, we request the Ordinary General Meeting of Shareholders to approve the ceiling amount of the total remuneration for Directors in the fiscal year 2021.

 

The ceiling amount (to be approved) of the total remuneration in the FY 2021: KRW 10.0 billion

 

The ceiling amount (approved) of the total remuneration in the FY 2020: KRW 10.0 billion


POSCO

and Subsidiaries

Consolidated Financial Statements

December 31, 2020 and 2019

 

1


Table of Contents

 

     Page  

Consolidated Financial Statements

  

Consolidated Statements of Financial Position

     3  

Consolidated Statements of Comprehensive Income

     5  

Consolidated Statements of Changes in Equity

     6  

Consolidated Statements of Cash Flows

     8  

 

LOGO

The following Consolidated Financial Statements based on K-IFRS are provided for reference of investors and are NOT finally reviewed by independent auditors. The following Consolidated Financial Statements do NOT contain Notes to the Consolidated Financial Statements.

The audited Consolidated Financial Statements will be provided to the POSCO homepage (http://www.posco.co.kr) and to the SEC (https://www.sec.gov) in early March, 2021.

 

2


POSCO and Subsidiaries

Consolidated Statements of Financial Position

As of December 31, 2020 and 2019

 

(in millions of Won)    Notes           December 31, 2020      December 31, 2019  

Assets

           

Cash and cash equivalents

   4,5,23    W        4,754,644        3,514,872  

Trade accounts and notes receivable, net

   6,17,23,29,37         8,120,619        9,078,351  

Other receivables, net

   7,23,37         1,494,239        1,581,517  

Other short-term financial assets

   8,23         11,709,209        8,996,049  

Inventories

   9         9,051,790        10,920,320  

Current income tax assets

   35         49,480        45,930  

Assets held for sale

   10         34,210        74,158  

Other current assets

   16         616,623        631,177  
        

 

 

    

 

 

 

Total current assets

           35,830,814        34,842,374  
        

 

 

    

 

 

 

Long-term trade accounts and notes receivable, net

   6,23         86,423        198,785  

Other receivables, net

   7,23,37         1,195,962        1,140,879  

Other long-term financial assets

   8,23         1,561,807        1,669,389  

Investments in associates and joint ventures

   11         3,876,249        3,927,755  

Investment property, net

   13         994,781        878,227  

Property, plant and equipment, net

   14,33         29,400,141        29,925,973  

Goodwill and other Intangible assets, net

   15,33         4,449,432        4,908,473  

Defined benefit assets, net

   21         86,149        4,280  

Deferred tax assets

   35         1,335,154        1,237,285  

Other non-current assets

   16         270,061        325,241  
        

 

 

    

 

 

 

Total non-current assets

           43,256,159        44,216,287  
        

 

 

    

 

 

 

Total assets

      W        79,086,973        79,058,661  
        

 

 

    

 

 

 

 

3


POSCO and Subsidiaries

Consolidated Statements of Financial Position, Continued

As of December 31, 2020 and 2019

 

(in millions of Won)    Notes             December 31, 2020     December 31, 2019  

Liabilities

          

Trade accounts and notes payable

     23,37      W        3,755,513       3,422,922  

Short-term borrowings and current installments of long-term borrowings

     4,17,23           8,677,529       8,548,212  

Other payables

     18,23           1,845,266       1,879,508  

Other short-term financial liabilities

     19,23,37           141,404       77,827  

Current income tax liabilities

     35           366,476       396,616  

Liabilities directly associated with the assets held for sale

           25       8  

Provisions

     20           443,273       360,495  

Other current liabilities

     22,29           1,625,482       1,638,102  
        

 

 

   

 

 

 

Total current liabilities

           16,854,968       16,323,690  
        

 

 

   

 

 

 

Long-term trade accounts and notes payable

     23,37           22,323       20,067  

Long-term borrowings, excluding current installments

     4,17,23           11,820,078       11,893,401  

Other payables

     18,23           558,924       585,129  

Other long-term financial liabilities

     19,23           133,588       31,494  

Defined benefit liabilities, net

     21           141,785       181,011  

Deferred tax liabilities

     35           1,320,726       1,691,498  

Long-term provisions

     20           522,969       458,154  

Other non-current liabilities

     22           37,020       79,510  
        

 

 

   

 

 

 

Total non-current liabilities

           14,557,413       14,940,264  
        

 

 

   

 

 

 

Total liabilities

           31,412,381       31,263,954  
        

 

 

   

 

 

 

Equity

          

Share capital

     24           482,403       482,403  

Capital surplus

     24           1,310,547       1,376,251  

Hybrid bonds

     25           199,384       199,384  

Reserves

     26           (1,380,918     (1,157,980

Treasury shares

     27           (2,391,523     (1,508,303

Retained earnings

           46,111,457       45,080,117  
        

 

 

   

 

 

 

Equity attributable to owners of the controlling company

           44,331,350       44,471,872  

Non-controlling interests

     25           3,343,242       3,322,835  
        

 

 

   

 

 

 

Total equity

           47,674,592       47,794,707  
        

 

 

   

 

 

 

Total liabilities and equity

      W        79,086,973       79,058,661  
        

 

 

   

 

 

 

 

4


POSCO and Subsidiaries

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

 

(in millions of Won, except per share information)    Notes           2020     2019  

Revenue

   28,29,37    W        57,792,796       64,366,848  

Cost of sales

   29,31,34,37         (53,072,390     (58,116,495
        

 

 

   

 

 

 

Gross profit

           4,720,406       6,250,353  

Selling and administrative expenses

   30,34        

Reversal of (impairment loss) on trade accounts and notes receivable

   23         (829     28,105  

Other administrative expenses

   31         (1,939,602     (2,041,286

Selling expenses

           (376,940     (368,318
        

 

 

   

 

 

 

Operating profit

           2,403,035       3,868,854  

Share of profit of equity-accounted investees, net

   11         133,297       273,741  

Finance income and costs

   23,32        

Finance income

           2,677,499       1,872,143  

Finance costs

           (2,892,402     (2,242,063

Other non-operating income and expenses

   33        

Impairment loss on other receivables

   23         (53,105     (80,323

Other non-operating income

           402,336       450,891  

Other non-operating expenses

   34         (645,574     (1,089,965
        

 

 

   

 

 

 

Profit before income tax

           2,025,086       3,053,278  

Income tax expense

   35         (236,934     (1,070,641
        

 

 

   

 

 

 

Profit

           1,788,152       1,982,637  

Other comprehensive income (loss)

          

Items that will not be reclassified subsequently to profit or loss:

          

Remeasurements of defined benefit plans

   21         36,575       (117,152

Net changes in fair value of equity investments at fair value through other comprehensive income

   23         (77,627     (10,541

Items that are or may be reclassified subsequently to profit or loss:

          

Capital adjustment arising from investments in equity-accounted investees

           (28,609     66,134  

Foreign currency translation differences

           (147,956     208,117  

Gains or losses on valuation of derivatives

   23         (331     (90
        

 

 

   

 

 

 

Other comprehensive income (loss), net of tax

           (217,948     146,468  
        

 

 

   

 

 

 

Total comprehensive income

      W        1,570,204       2,129,105  
        

 

 

   

 

 

 

Profit attributable to:

          

Owners of the controlling company

      W        1,602,148       1,835,087  

Non-controlling interests

           186,004       147,550  
        

 

 

   

 

 

 

Profit

      W        1,788,152       1,982,637  
        

 

 

   

 

 

 

Total comprehensive income attributable to:

          

Owners of the controlling company

      W        1,415,132       1,997,731  

Non-controlling interests

           155,072       131,374  
        

 

 

   

 

 

 

Total comprehensive income

      W        1,570,204       2,129,105  
        

 

 

   

 

 

 

Basic and diluted earnings per share (in Won)

   36         20,165       22,823  

 

5


POSCO and Subsidiaries

Consolidated Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

 

            Attributable to owners of the controlling company     Non-
controlling
interests
    Total  
(in millions of Won)           Share
capital
     Capital
surplus
    Hybrid
bonds
     Reserves     Treasury
shares
    Retained
earnings
    Subtotal  

Balance as of January 1, 2019

   W        482,403        1,410,551       199,384        (1,404,368     (1,532,728     44,216,018       43,371,260       3,388,291       46,759,551  

Comprehensive income:

                       

Profit

        —           —          —           —          —          1,835,087       1,835,087       147,550       1,982,637  

Other comprehensive income (loss)

                        —          —     

Remeasurements of defined benefit plans, net of tax

        —           —          —           —          —          (100,218     (100,218     (16,934     (117,152

Capital adjustment arising from investments in equity-accounted investees, net of tax

        —           —          —           58,308       —          —          58,308       7,826       66,134  

Net changes in fair value of equity investments at fair value through other comprehensive income, net of tax

        —           —          —           10,228       —          (20,769     (10,541     —          (10,541

Foreign currency translation differences, net of tax

        —           —          —           215,181       —          —          215,181       (7,064     208,117  

Gain or losses on valuation of derivatives, net of tax

        —           —          —           (86     —          —          (86     (4     (90
     

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income

        —           —          —           283,631       —          1,714,100       1,997,731       131,374       2,129,105  
     

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transactions with owners of the controlling company, recognized directly in equity:

                       

Year-end dividends

        —           —          —           —          —          (400,006     (400,006     (60,274     (460,280

Interim dividends

        —           —          —           —          —          (480,694     (480,694     —          (480,694

Changes in subsidiaries

        —           —          —           —          —          —          —          1,281       1,281  

Changes in ownership interests in subsidiaries

        —           (48,538     —           —          —          —          (48,538     (128,587     (177,125

Interest of hybrid bonds

        —           —          —           —          —          (9,200     (9,200     (7,294     (16,494

Disposal of treasury shares

        —           12,576       —           —          24,425       —          37,001       —          37,001  

Others

        —           1,662       —           (37,243     —          39,899       4,318       (1,956     2,362  
     

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total transactions with owners of the controlling company

        —           (34,300     —           (37,243     24,425       (850,001     (897,119     (196,830     (1,093,949
     

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2019

   W        482,403        1,376,251       199,384        (1,157,980     (1,508,303     45,080,117       44,471,872       3,322,835       47,794,707  
     

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

6


POSCO and Subsidiaries

Consolidated Statements of Changes in Equity, Continued

For the years ended December 31, 2020 and 2019

 

            Attributable to owners of the controlling company     Non-
controlling
interests
    Total  
(in millions of Won)           Share
capital
     Capital
surplus
    Hybrid
bonds
     Reserves     Treasury
shares
    Retained
earnings
    Subtotal  

Balance as of January 1, 2020

   W        482,403        1,376,251       199,384        (1,157,980     (1,508,303     45,080,117       44,471,872       3,322,835       47,794,707  

Comprehensive income:

                       

Profit

        —          —         —          —         —         1,602,147       1,602,147       186,005       1,788,152  

Other comprehensive income (loss)

                       

Remeasurements of defined benefit plans, net of tax

        —          —         —          —         —         44,704       44,704       (8,129     36,575  

Capital adjustment arising from investments in equity-accounted investees, net of tax

        —          —         —          (16,760     —         —         (16,760     (11,849     (28,609

Net changes in fair value of equity investments at fair value through other comprehensive income, net of tax

        —          —         —          (74,210     —         (3,417     (77,627     —         (77,627

Foreign currency translation differences, net of tax

        —          —         —          (137,071     —         —         (137,071     (10,885     (147,956

Gain or losses on valuation of derivatives, net of tax

        —          —         —          (261     —         —         (261     (70     (331
     

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total comprehensive income

        —          —         —          (228,302     —         1,643,434       1,415,132       155,072       1,570,204  
     

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Transactions with owners of the controlling company, recognized directly in equity:

                       

Year-end dividends

        —          —         —          —         —         (320,462     (320,462     (60,517     (380,979

Interim dividends

        —          —         —          —         —         (277,723     (277,723     —         (277,723

Changes in subsidiaries

        —          —         —          —         —         —         —         22,303       22,303  

Changes in ownership interests in subsidiaries

        —          (27,716     —          —         —         —         (27,716     162,674       134,958  

Repayment of redeemable convertible preferred shares

        —          (33,581     —          —         —         —         (33,581     (245,000     (278,581

Interest of hybrid bonds

        —          —         —          —         —         (9,225     (9,225     (7,354     (16,579

Acquisition of treasury shares

        —          —         —          —         (883,220     —         (883,220     —         (883,220

Others

        —          (4,407     —          5,364       —         (4,684     (3,727     (6,771     (10,498
     

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total transactions with owners of the controlling company

        —          (65,704     —          5,364       (883,220     (612,094     (1,555,654     (134,665     (1,690,319
     

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2020

   W        482,403        1,310,547       199,384        (1,380,918     (2,391,523     46,111,457       44,331,350       3,343,242       47,674,592  
     

 

 

    

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

 

7


POSCO and Subsidiaries

Consolidated Statements of Cash Flows

For the years ended December 31, 2020 and 2019

 

(in millions of Won)    Notes             2020     2019  

Cash flows from operating activities

          

Profit

      W        1,788,152       1,982,637  

Adjustments for:

          

Depreciation

           3,156,181       3,029,868  

Amortization

           465,558       431,247  

Finance income

           (1,185,934     (855,382

Finance costs

           1,390,983       1,197,705  

Income tax expense

           236,934       1,070,641  

Impairment loss on property, plant and equipment

           27,040       442,700  

Gain on disposal of property, plant and equipment

           (15,548     (49,367

Loss on disposal of property, plant and equipment

           142,126       120,227  

Impairment loss on intangible assets

           197,776       191,021  

Gain on disposal of investments in subsidiaries, associates and joint ventures

           (88,836     (27,836

Loss on disposal of investments in subsidiaries, associates and joint ventures

           14,632       6,539  

Share of profit of equity-accounted investees

           (133,297     (273,741

Impairment loss on assets held for sale

           5,030       38,328  

Expenses related to post-employment benefit

           248,324       240,425  

Impairment loss on trade and other receivables

           53,934       52,218  

Loss on valuation of inventories

           54,014       96,201  

Increase to provisions

           184,984       76,538  

Others, net

           (21,076     (38,463
        

 

 

   

 

 

 
           4,732,825       5,748,869  
        

 

 

   

 

 

 

Changes in operating assets and liabilities

     39           2,803,586       (40,789

Interest received

           368,539       320,336  

Interest paid

           (624,399     (760,175

Dividends received

           267,923       266,774  

Income taxes paid

           (650,889     (1,512,997
        

 

 

   

 

 

 

Net cash provided by operating activities

      W        8,685,737       6,004,655  
        

 

 

   

 

 

 

 

8


POSCO and Subsidiaries

Consolidated Statements of Cash Flows, Continued

For the years ended December 31, 2020 and 2019

 

(in millions of Won)    Notes             2020     2019  

Cash flows from investing activities

          

Acquisitions of short-term financial instruments

      W        (43,307,727     (36,063,406

Proceeds from disposal of short-term financial instruments

           40,500,759       35,415,822  

Increase in loans

           (329,236     (450,638

Collection of loans

           138,270       398,838  

Acquisitions of securities

           (338,063     (296,827

Proceeds from disposal of securities

           448,125       62,492  

Acquisitions of investment in associates and joint ventures

           (141,785     (160,404

Proceeds from disposal of investment in associates and joint ventures

           18,401       16,458  

Acquisitions of investment property

           (976     (19,344

Proceeds from disposal of investment property

           250       12,057  

Acquisitions of property, plant and equipment

           (3,154,412     (2,519,219

Proceeds from disposal of property, plant and equipment

           (42,530     51,800  

Acquisitions of intangible assets

           (300,645     (299,587

Proceeds from disposal of intangible assets

           79,011       24,161  

Proceeds from disposal of assets held for sale

           37,680       67,246  

Collection of lease receivables

           61,567       56,889  

Payment for acquisition of business, net of cash acquired

           —         (37,345

Cash received from disposal of business, net of cash transferred

           77,488       45,360  

Others, net

           (5,442     12,788  
        

 

 

   

 

 

 

Net cash used in investing activities

           (6,259,265     (3,682,859
        

 

 

   

 

 

 

Cash flows from financing activities

     39          

Proceeds from borrowings

           4,410,387       5,646,977  

Repayment of borrowings

           (3,644,057     (3,746,845

Proceeds from (repayment of) short-term borrowings, net

           35,525       (2,194,727

Capital contribution from non-controlling interests

           176,062       29,475  

Payment of cash dividends

           (659,145     (946,218

Acquisition of treasury shares

           (883,219     —    

Payment of interest of hybrid bonds

           (16,539     (16,494

Repayment of lease liabilities

           (217,312     (167,427

Repayment of redeemable convertible preferred shares

           (278,581     —    

Others, net

           (13,989     (116,920
        

 

 

   

 

 

 

Net cash used in financing activities

           (1,090,868     (1,512,179
        

 

 

   

 

 

 

Effect of exchange rate fluctuation on cash held

           (95,272     61,764  
        

 

 

   

 

 

 

Net increase in cash and cash equivalents

           1,240,332       871,381  

Cash and cash equivalents at beginning of the period

     5           3,515,246       2,643,865  
        

 

 

   

 

 

 

Cash and cash equivalents at end of the period

     5,10      W        4,755,578       3,515,246  
        

 

 

   

 

 

 

 

9


POSCO

Separate Financial Statements

December 31, 2020 and 2019

 

1


Table of Contents

 

Separate Financial Statements   

Separate Statements of Financial Position

   3

Separate Statements of Comprehensive Income

   5

Separate Statements of Changes in Equity

   6

Separate Statements of Cash Flows

   7

Separate Statements of Appropriation of Retained Earnings

   9

 

LOGO

The following Separate Financial Statements, based on K-IFRS, are provided for reference of investors and are NOT finally reviewed by independent auditors. The following Separate Financial Statements do NOT contain Notes to the Separate Financial Statements.

The audited Separate Financial Statements will be provided to the POSCO homepage (http://www.posco.co.kr) and to the SEC (https://www.sec.gov) in early March, 2021.

 

2


POSCO

Separate Statements of Financial Position

As of December 31, 2020 and 2019

 

(in millions of Won)    Notes           December 31,
2020
     December 31,
2019
 

Assets

           

Cash and cash equivalents

   4,5,22    W        1,822,660        978,139  

Trade accounts and notes receivable, net

   6,22,36         3,693,535        3,987,041  

Other receivables, net

   7,22,36         279,555        321,352  

Other short-term financial assets

   8,22         9,607,632        7,858,979  

Inventories

   9,33         4,093,829        4,988,530  

Assets held for sale

   10         32,244        53,924  

Other current assets

   15         50,498        28,101  
        

 

 

    

 

 

 

Total current assets

           19,579,953        18,216,066  
        

 

 

    

 

 

 

Long-term trade accounts and notes receivable, net

   6,22         2,456        6,014  

Other receivables, net

   7,22         84,037        56,468  

Other long-term financial assets

   8,22         1,072,817        1,257,896  

Investments in subsidiaries, associates and joint ventures

   11,32         14,883,152        15,069,857  

Investment property, net

   12         149,617        158,077  

Property, plant and equipment, net

   13,32         20,216,932        20,132,199  

Intangible assets, net

   14         621,926        708,915  

Defined benefit assets, net

   20         76,501        —    

Other non-current assets

   15         107,578        105,274  
        

 

 

    

 

 

 

Total non-current assets

           37,215,016        37,494,700  
        

 

 

    

 

 

 

Total assets

      W        56,794,969        55,710,766  
        

 

 

    

 

 

 

 

3


POSCO

Separate Statements of Financial Position, Continued

As of December 31, 2020 and 2019

 

(in millions of Won)    Notes           December 31,
2020
    December 31,
2019
 

Liabilities

          

Trade accounts and notes payable

   22,36    W        1,258,470       667,551  

Short-term borrowings and current installments of long-term borrowings

   4,16,22,38         2,408,392       1,146,476  

Other payables

   17,22,36,38         1,127,323       1,113,003  

Other short-term financial liabilities

   18,22,38         12,788       10,969  

Current income tax liabilities

   34         137,858       237,293  

Provisions

   19         63,604       21,007  

Other current liabilities

   21         80,676       135,147  
        

 

 

   

 

 

 

Total current liabilities

           5,089,111       3,331,446  
        

 

 

   

 

 

 

Long-term borrowings, excluding current installments

   4,16,22,38         5,346,944       5,191,537  

Other payables

   17,22,38         220,612       222,802  

Other long-term financial liabilities

   18,22,38         122,154       46,925  

Defined benefit liabilities, net

   20         —         54,146  

Deferred tax liabilities

   34         848,317       1,190,553  

Long-term provisions

   19         52,602       53,942  

Other non-current liabilities

   21         525       5,230  
        

 

 

   

 

 

 

Total non-current liabilities

           6,591,154       6,765,135  
        

 

 

   

 

 

 

Total liabilities

           11,680,265       10,096,581  
        

 

 

   

 

 

 

Equity

          

Share capital

   23         482,403       482,403  

Capital surplus

   23         1,339,289       1,252,220  

Hybrid bonds

   24         199,384       199,384  

Reserves

   25         (296,626     (183,930

Treasury shares

   26         (2,391,523     (1,508,303

Retained earnings

   27         45,781,777       45,372,411  
        

 

 

   

 

 

 

Total equity

           45,114,704       45,614,185  
        

 

 

   

 

 

 

Total liabilities and equity

      W        56,794,969       55,710,766  
        

 

 

   

 

 

 

 

4


POSCO

Separate Statements of Comprehensive Income

For the years ended December 31, 2020 and 2019

 

(in millions of Won, except per share information)    Notes           2020     2019  

Revenue

   28,36    W        26,509,920       30,373,511  

Cost of sales

   9,20,30,33,36         (24,323,352     (26,700,874
        

 

 

   

 

 

 

Gross profit

           2,186,568       3,672,637  

Selling and administrative expenses

          

Reversal of (impairment loss) on trade accounts and notes receivable

   22,33         (4,372     4,535  

Other administrative expenses

   20,29,30,33         (807,626     (851,140

Selling expenses

   29,33         (239,373     (239,673
        

 

 

   

 

 

 

Operating profit

           1,135,197       2,586,359  
        

 

 

   

 

 

 

Finance income and costs

          

Finance income

   22,31         1,230,684       868,682  

Finance costs

   22,31         (820,201     (508,242
        

 

 

   

 

 

 

Other non-operating income and expenses

          

Reversal of (impairment loss) on other receivables

   22,33         487       (286

Other non-operating income

   32         146,548       238,210  

Other non-operating expenses

   32,33         (674,835     (1,353,474
        

 

 

   

 

 

 

Profit before income tax

           1,017,880       1,831,249  

Income tax expense

   34         (52,017     (655,537
        

 

 

   

 

 

 

Profit

           965,863       1,175,712  

Other comprehensive income (loss)

          

Items that will not be reclassified subsequently to profit or loss:

          

Remeasurements of defined benefit plans

   20         53,816       (80,554

Net changes in fair value of equity investments at fair value through other comprehensive income

   8,22,25         (115,599     14,955  
        

 

 

   

 

 

 

Total comprehensive income

      W        904,080       1,110,113  
        

 

 

   

 

 

 

Basic and diluted earnings per share (in Won)

   35    W        12,123       14,592  
        

 

 

   

 

 

 

 

5


POSCO

Separate Statements of Changes in Equity

For the years ended December 31, 2020 and 2019

 

(in millions of Won)           Share
capital
     Capital
surplus
     Hybrid
bonds
     Reserves     Treasury
shares
    Retained
earnings
    Total  

Balance as of January 1, 2019

   W        482,403        1,154,775        199,384        (207,191     (1,532,728     45,175,459       45,272,102  

Comprehensive income:

                    

Profit

        —          —          —          —         —         1,175,712       1,175,712  

Other comprehensive income (loss)

                    

Remeasurements of defined benefit plans, net of tax

        —          —          —          —         —         (80,554     (80,554

Net changes in fair value of equity investments

at fair value through other comprehensive income, net of tax

        —          —          —          23,261       —         (8,306     14,955  

Transactions with owners of the Company, recognized directly in equity:

                    

Year-end dividends

        —          —          —          —         —         (400,006     (400,006

Interim dividends

        —          —          —          —         —         (480,694     (480,694

Interest of hybrid bonds

        —          —          —          —         —         (9,200     (9,200

Disposal of treasury shares

        —          12,576        —          —         24,425       —         37,001  

Business combination

        —          84,869        —          —         —         —         84,869  
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2019

   W        482,403        1,252,220        199,384        (183,930     (1,508,303     45,372,411       45,614,185  
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of January 1, 2020

   W        482,403        1,252,220        199,384        (183,930     (1,508,303     45,372,411       45,614,185  

Comprehensive income:

                    

Profit

        —          —          —          —         —         965,863       965,863  

Other comprehensive income (loss)

                    

Remeasurements of defined benefit plans, net of tax

        —          —          —          —         —         53,816       53,816  

Net changes in fair value of equity investments

at fair value through other comprehensive income, net of tax

        —          —          —          (112,696     —         (2,903     (115,599

Transactions with owners of the Company, recognized directly in equity:

                    

Year-end dividends

        —          —          —          —         —         (320,462     (320,462

Interim dividends

        —          —          —          —         —         (277,723     (277,723

Interest of hybrid bonds

        —          —          —          —         —         (9,225     (9,225

Aquisition of treasury shares

        —          —          —          —         (883,220     —         (883,220

Others

        —          87,069        —          —         —         —         87,069  
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance as of December 31, 2020

   W        482,403        1,339,289        199,384        (296,626     (2,391,523     45,781,777       45,114,704  
     

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

 

6


POSCO

Separate Statements of Cash Flows

For the years ended December 31, 2020 and 2019

 

(in millions of Won)    Notes           2020     2019  

Cash flows from operating activities

          

Profit

      W        965,863       1,175,712  

Adjustments for :

          

Expenses related to post-employment benefit

           126,191       119,177  

Depreciation

           2,273,633       2,160,124  

Amortization

           106,926       77,190  

Impairment loss(revesal of) on trade and other receivables

           3,885       (4,248

Finance income

           (779,150     (598,303

Finance costs

           457,851       284,334  

Loss on valuation of inventories

           4,735       7,677  

Gain on disposal of property, plant and equipment

           (12,340     (25,583

Loss on disposal of property, plant and equipment

           181,454       114,874  

Impairment losses on property, plant and equipment

           27,846       222,036  

Gain on disposal of Intangible assets

           (197     (1,013

Gain on disposal of investments in subsidiaries,

associates and joint venture

           (24,334     (5,300

Impairment losses on investments in subsidiaries,

associates and joint venture

           360,894       865,769  

Gain on disposal of assets held for sale

           (22,734     (30,262

Loss on disposal of assets held for sale

           5,383       —    

Impairment loss on assets held for sale

           9,093       8,021  

Gain on disposal of emissions rights

           (24,566     (6,122

Gain on valuation of emissions rights

           —         (25,440

Increase to provisions

           73,037       (10,398

Cost of emissions

           9,972       —    

Income tax expense

           52,017       655,537  

Others

           (239     5,623  

Changes in operating assets and liabilities

   38         1,550,039       (438,041

Interest received

           197,306       147,683  

Interest paid

           (230,537     (160,950

Dividends received

           232,492       284,648  

Income taxes paid

           (386,850     (1,221,790
        

 

 

   

 

 

 

Net cash provided by(used in) operating activities

      W        5,157,670       3,600,955  
        

 

 

   

 

 

 

 

7


POSCO

Separate Statements of Cash Flows, Continued

For the years ended December 31, 2020 and 2019

 

 

(in millions of Won)    Notes             2020     2019  

Cash flows from investing activities

          

Decrease in deposits

      W        3,336,891       2,747,009  

Proceeds from disposal of short-term financial instruments

           36,302,634       32,210,156  

Collection of short-term loans

           2,709       62  

Proceeds from disposal of Current Portion of debt security

           360,109       54  

Proceeds from disposal of equity securities

           7,937       24,890  

Proceeds from disposal of other securities

           8,183       4,522  

Proceeds from disposal of investments in subsidiaries, associates and joint ventures

           24,247       14,278  

Proceeds from disposal of intangible assets

           1,047       5,587  

Proceeds from disposal of assets held for sale

           225,292       523,128  

Proceeds from disposal of emission rights

           66,143       12,693  

Cash inflow from business combination

           —         2,171  

Increase in deposits

           (3,380,247     (2,792,821

Acquisition of short-term financial investments

           (38,160,724     (32,670,040

Payment of long-term loans

           (21,923     (5,697

Acquisition of debt securities

           (220,110     (290,102

Acquisition of equity securities

           —         (11,144

Acquisition of other securities

           (20,795     (1,710

Acquisition of investment in subsidiaries, associates and joint ventures

           (236,226     (491,175

Acquisition of property, plant and equipment

           (2,450,816     (1,903,966

Payment for disposal of property, plant and equipment

           (102,354     (41,003

Acquisition of intangible assets

           (101,427     (132,661

Payment for acquisition of business, net of cash acquired

           —         (1,156,953
        

 

 

   

 

 

 

Net cash used in investing activities

      W        (4,359,430     (3,952,722
        

 

 

   

 

 

 

Cash flows from financing activities

          

Proceeds from borrowings

           3,566,518       2,950,068  

Increase in long-term financial liabilities

           537       3,287  

Proceeds from disposals of derivatives

           5,873       9,682  

Receipt of government grants

           954       3,273  

Repayment of borrowings

           (1,941,838     (959,404

Repayment of lease liabilities

           (63,684     (39,194

Decrease in long-term financial liabilities

           (974     (1,587

Payment of cash dividends

           (598,627     (881,169

Acquisition of treasury shares

           (883,220     —    

Payment of interest of hybrid bonds

           (9,225     (9,200
        

 

 

   

 

 

 

Net cash provided by financing activities

      W        76,314       1,075,756  
        

 

 

   

 

 

 

Effect of exchange rate fluctuation on cash held

           (30,033     (5,069

Net increase in cash and cash equivalents

           844,521       718,920  

Cash and cash equivalents at beginning of the period

     5           978,139       259,219  
        

 

 

   

 

 

 

Cash and cash equivalents at end of the period

     5      W        1,822,660       978,139  
        

 

 

   

 

 

 

 

8


POSCO

Separate Statements of Appropriation of Retained Earnings

As of December 31, 2020 and 2019

 

(in millions of Won)           2020     2019  

Retained earnings before appropriation

       

Unappropriated retained earnings carried over from prior year

   W        581,946       593,208  

Remeasurements of defined benefit plans

        53,816       (80,554

Loss on disposal of equity securities

        (2,902     (8,306

Interests of hybrid bonds

        (9,225     (9,200

Interim dividends

        (277,723     (480,694

(Dividends (ratio) per share
W3,500 (70%) in 2020
W6,000 (120%) in 2019)

       

Profit for the period

        965,863       1,175,712  
     

 

 

   

 

 

 
        1,311,775       1,190,166  

Transfer from discretionary reserve

       

Appropriated retained earnings for dividends

        —         412,243  
     

 

 

   

 

 

 
        —         412,243  

Appropriation of retained earnings

       

Dividends

        342,565       320,463  

(Dividends (ratio) per share
W4,500 (90%) in 2020
W4,000 (80%) in 2019)

       

Appropriated retained earnings for business expansion

        370,000       700,000  
     

 

 

   

 

 

 
        712,565       1,020,463  
     

 

 

   

 

 

 

Unappropriated retained earnings carried forward to subsequent year

   W        599,210       581,946  
     

 

 

   

 

 

 

 

9