Enhanced Investments - Financial Portal

Published: 2021-02-23 06:09:28 ET

<<< go to PKX company page

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 53^rd 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 53^rd Ordinary General Meeting of Shareholders

We hereby notify you that the 53^rd 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 53^rd 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 53^rd Fiscal Year Financial Statements.

•

Consolidated Financial Statements: See Appendix 1

•

Separate Financial Statements: See Appendix 2

The audit report from the independent auditors of 53^rd 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

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

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.

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

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

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

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			Non- controlling interests			Total
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

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			Non- controlling interests			Total
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

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

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

POSCO

Separate Financial Statements

December 31, 2020 and 2019

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

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.

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

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

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

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

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

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

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