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PKX Posco

Filed: 23 Feb 21, 6:09am

 

 

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