SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15D-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of November, 2016
Commission File Number: 1-13368
POSCO
(Translation of registrants name into English)
POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, Korea, 135-777
(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 whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes ☐ No ☒
[If Yes is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2(b) : 82- .]
POSCO is furnishing under cover of Form 6-K:
Exhibit 99.1: An English-language translation of documents with respect to 3Q 2016 Quarterly Report.
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: November 29, 2016 | By | /s/ Noh, Min-Yong | ||||
(Signature)* | ||||||
Name: Noh, Min-Yong | ||||||
Title: Senior Vice President |
* Print the name and title under the signature of the signing officer.
Exhibit 99.1
QUARTERLY REPORT
(From January 1, 2016 to September 30, 2016)
THIS IS AN ENGLISH TRANSLATION OF THE INTERIM REPORT ORIGINALLY PREPARED IN THE KOREAN LANGUAGE (IN SUCH FORM AS REQUIRED BY THE KOREAN FINANCIAL SERVICES COMMISSION). THIS ENGLISH TRANSLATION IS NOT OFFICIAL AND IS PROVIDED FOR INFORMATION PURPOSES ONLY.
UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON BOTH CONSOLIDATED AND NONCONSOLIDATED BASIS IN ACCORDANCE WITH THE KOREAN-INTERNATIONAL FINANCIAL REPORTING STANDARDS (K-IFRS) WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. WE HAVE MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES.
QUARTERLY REPORT
(From January 1, 2016 to September 30, 2016)
To: | Korean Financial Services Commission and Korea Exchange |
/s/ Kim, Jin-Il |
Kim, Jin-Il |
President and Representative Director |
POSCO |
6261 Donghaean-ro (Goedong-dong), Pohang-si, Nam-gu, Gyungsangbuk-do, Korea |
Telephone: +82-54-220-0114 |
/s/ Noh, Min-Yong |
Noh, Min-Yong |
Senior Vice President |
POSCO |
6261 Donghaean-ro (Goedong-dong), Pohang-si, Nam-gu, Gyungsangbuk-do, Korea |
Telephone: +82-2-3457-0114 |
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I. | Overview | 4 | ||||
II. | Business | 10 | ||||
III. | Financial Statements | 34 | ||||
IV. | Corporate Governance and Company Affiliates | 38 |
Attachment: | Independent Auditors Review Report | |
(Consolidated and Separate) |
3
1. Scope of Business
A. POSCO (the Company)
Business |
(1) Production and sale of crude steel and stainless steel products |
(2) Port/harbor loading/unloading, warehousing and packaging |
(3) Management of professional athletic organizations |
(4) Power generation, renewable energy projects, liquefied natural gas logistics and exploration and other incidental businesses |
(5) Real property lease business |
(6) Public energy services and distribution system |
(7) Marine transportation of mineral resources; domestic and overseas processing and sales of mineral resources |
(8) Educational services and other incidental services |
(9) Production and sale of non-ferrous metals |
(10) Technology license sales and engineering business |
(11) Other businesses incidental or related, directly or indirectly, to the foregoing businesses |
B. POSCO Business Group
(1) | Name of the Business Group: POSCO |
(2) | Companies Belonging to the Business Group |
POSCO, POSCO COATED & COLOR STEEL Co., Ltd., POSCO Daewoo Corporation, POSCO ICT, POSCO CHEMTECH, POSCO M-TECH, POSCO ENGINEERING CO., Ltd., MegaAsset Co., Ltd., Busan E&E Co., Ltd., Suncheon Eco Trans Co., Ltd., SNNC, eNtoB Corporation, UITrans LRT Co. Ltd., POSMATE, POSCO Humans, POSCO ENGINEERING & CONSTRUCTION CO., LTD., POSCO Research Institute, POSCO A&C, Poscoene, POSCO TMC Co., Ltd., POSCO Processing&Service, Pohang Scrap Recycling Distribution Center Co., Ltd., POSCO NIPPON STEEL RHF JOINT VENTURE CO., Ltd., METAPOLIS Co., Ltd., POSCO-TERMINAL Co., Ltd., POSCO ENERGY CO., LTD., PSC Energy Global Co., Ltd., Gale International Korea, LLC, BLUE O&M Co., Ltd., POSCO Venture Capital Co., Ltd., POSCO ES MATERIALS, Pohang Special Welding Co., Ltd., Steel Processing and Fabricating Center Co., Ltd., POSCO MITSUBISHI CARBON TECHNOLOGY, POSPOWER CO., LTD., Songdo POSCO Family Housing, HOTEL LAONZENA CO., LTD., POSCO Group University, POSCO PLANTEC Co., Ltd., POSCO E&C Songdo International Building
4
(a) | Changes in Companies Belonging to the Business Group |
| Exclusion of the Business Group: PONUTech Co., Ltd. (February 16, 2016), |
POSHIMETAL Co., Ltd.(April 9, 2016),
Tamra Offshore Wind Power Co., Ltd. (May 3, 2016),
POSCO Green Gas Technology (May 17, 2016),
POSCO LED Co., Ltd. (May 19, 2016)
Mapo Hibroad Parking co., Ltd. (July 26, 2016)
POSCO AST (July 27, 2016)
| Inclusion of the Business Group: POSCO E&C Songdo International Building (August 1, 2016) |
| Name change from Daewoo International Corporation to POSCO Daewoo Corporation (March 14, 2016) |
(3) | Related Laws and Regulations |
The Korea Fair Trade Commission has designated POSCO as a company subject to the limitations on Cross Shareholding and Debt Guarantee for Affiliates under the Monopoly Regulation and Fair Trade Act (the MRFTA).
Details
(a) | Prohibition on Cross Shareholdings (Article 9 (1) of the MRFTA) |
(b) | Prohibition on Debt Guarantees for Affiliated Corporations (Article 10-2 of the MRFTA) |
(c) | Prohibition on Shareholding of Venture Capitals for Subsidiaries (Article 9 (3) of the MRFTA) |
(d) | Limitation of Voting Rights of Financial or Insurance Companies (Article 11 of the MRFTA) |
(e) | Resolution of the Board of Directors and Publication on Large-Scale Intra-Group Transaction (Article11-2 of the MRFTA) |
(f) | Disclosure of Important Facts such as Unlisted Shares (Article 11-3 of the MRFTA) |
(g) | Disclosure of a corporate group (Article 11-4 of the MRFTA) |
(h) | Report on Status of Shareholding (Article 13 of the MRFTA) |
2. Business Organization
A. Highlights of the Companys Business Organization
(1) | Location of the Headquarters: 6261 Donghaean-ro (Goedong-dong), Nam-gu, Pohang-si, Gyeongsangbuk -do, Korea |
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(2) | Steel Works and Offices |
(a) | Pohang Steel Works: 6262 Donghaean-ro (Dongchon-dong), Nam-gu, Pohang-si, Gyeongsangbuk -do, Korea |
(b) | Gwangyang Steel Works: 20-26 Pokposarang-gil (Kumho-dong), Gwangyang-si, Jeollanam -do, Korea |
(c) | Principal Executive Office: POSCO Center, 440 Teheran-ro (Daechi-dong), Gangnam-gu, Seoul, Korea |
(d) | Overseas Offices: For the purpose of supporting international business transactions, the Company operates five overseas offices as follows: |
United Arab Emirates (Dubai), European Union (Dusseldorf, Germany),
Brazil (Rio de Janeiro), Australia (Perth), Argentina, Iran (Teheran), and Russia (Moscow).
(3) | Major Changes in the Board of Directors (as of March 11, 2016) |
(a) | Inside Directors |
| New member : Choi, Jeong-Woo (1 year) |
(b) | Outside Directors |
| Reelected member: Lee, Myoung-Woo (3 years) |
(c) | Representative Directors |
| As of March 11, 2016: Kwon, Oh-Joon, and Kim, Jin-Il |
* | Ahn, Dong-Hyun, outside director, resigned on September 7, 2016. |
(4) | Changes of the Major Shareholders of POSCO |
(a) | National Pension Service holds the largest number of shares of POSCO. |
(b) | Date of Disclosure: January 30, 2007 |
(For further reference, please refer to the public disclosures regarding the change of the major shareholders on January 30, 2007, July 27, 2007, January 29, 2008, July 25, 2008, January 21, 2009, March 2, 2009, July 22, 2009, October 9, 2009, January 26, 2010, July 20, 2010, January 28, 2011, July 22, 2011, January 31, 2012, August 1, 2012, February 1, 2013, August 1, 2013, January 14, 2014, January 23, 2014, July 29, 2014,January 23, 2015, August 5, 2015, January 6, 2016, January 26, 2016, March 15, 2016, April 12, 2016, July 4, 2016, July 5, 2016, July 21, 2016, October 7, 2016, and October 11, 2016)
B. Merger, Acquisition and Handover of Businesses
(1) | Small scale merger of POSHIMETAL Co., Ltd into POSCO was completed on March 15, 2016 |
| Date of merger : March 1, 2016 |
(2) | Small scale merger of POSCO Green Gas Technology into POSCO was completed on May 16, 2016 |
| Date of merger : May 1, 2016 |
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The purpose of both mergers is to enhance the shareholders value by increasing operational efficiency and creating synergies between businesses.
POSCO holds a 100% stake in POSHIMETAL Co., Ltd. and a 100% stake in POSCO Green Gas Technology. For both small scale mergers, the merger ratio is 1:0 and POSCO does not issue new shares. On the completion of mergers, POSCO remains as a surviving company.
C. Major Changes in Production Facilities
Refer to the II. Business (5. Production and Facilities)
3. Equity Capital
A. New Issuance of Registered Common Stock
There was no new issuance of registered common stock in the last five years.
B. Convertible Bonds
[None]
C. Bonds with Warrant
[None]
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4. Other Information Regarding Shares
A. Total Number of Shares
(As of September 30, 2016) | ||||
Authorized Shares |
Outstanding Shares | |||
200,000,000 |
87,186,835 |
Currency of the Republic of Korea is Korean Won (KRW). |
Par Value: KRW 5,000 per share |
B. Treasury Stock Holding and Cancellation
(As of September 30, 2016) | ||||||||||||||||||||||
Method of Purchase |
Type | Beginning* | Increased | Decreased | Cancelled | Balance | ||||||||||||||||
Direct |
Registered Common |
7,191,187 | | 703 | | 7,190,484 | ||||||||||||||||
Special Money Trust |
| | | | | |||||||||||||||||
Total |
7,191,187 | | 703 | | 7,190,484 |
* | Beginning Balance: as of December 31, 2015 |
Board of Directors approved the Disposal of Treasury Stocks as Employee Award at the Meeting held on February 7, 2013, where the execution and responsibility of the disposal of the treasury stocks were delegated to the Executive Management Committee.
On January 19, 2016, the Executive Management Committee resolved its plan to dispose the treasury stocks and the actual disposal of 110 treasury stocks was completed on January 20, 2016.
On April 19, 2016, the Executive Management Committee resolved its plan to dispose the treasury stocks and the actual disposal of 433 treasury stocks was completed on April 20, 2016.
On July 19, 2016, the Executive Management Committee resolved its plan to dispose the treasury stocks and the actual disposal of 160 treasury stocks was completed on July 20, 2016.
Changes after September 30, 2016
On October 19, 2016, the Executive Management Committee resolved its plan to dispose the treasury stocks and the actual disposal of 1,314 treasury stocks was completed on October 20, 2016.
5. Voting Rights
(As of September 30, 2016) | ||||||||
Classification of Shares |
Number of Shares | Remarks | ||||||
(1) Number of Outstanding Shares |
87,186,835 | | ||||||
(2) Shares without Voting Rights * |
7,190,484 | *Treasury Stock 7,190,644shares | ||||||
(3) Shares with Voting Rights |
79,996,351 | |
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6. Earnings and Dividend
(In millions of KRW) | ||||||||||||
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | ||||||||||
(Consolidated) Net Profit |
1,197,014 | 180,647 | 626,099 | |||||||||
Earnings per Share (KRW) |
14,653 | 1,845 | 7,432 | |||||||||
Cash Dividend Paid |
179,992 | 639,961 | 639,527 | |||||||||
(Consolidated) Pay-out Ratio (%) |
15.0 | 345.3 | 102.1 | |||||||||
Dividend per Share (KRW) |
2,250 | 8,000 | 8,000 | |||||||||
Dividend Yield (%) |
1.0 | 4.5 | 2.8 |
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1. Overview
A. Classification of Business
We classify our business into four segments;
Steel, Trading, Engineering & Construction, and Others.
B. Segment Results
(In millions of KRW) | ||||||||||||||||||||||||
Category |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | |||||||||||||||||||||
Sales | Operating Income (Loss) |
Sales | Operating Income (Loss) |
Sales | Operating Income (Loss) |
|||||||||||||||||||
Steel |
19,547,893 | 2,308,592 | 28,292,824 | 1,875,891 | 31,841,748 | 2,267,825 | ||||||||||||||||||
Trading |
11,835,006 | 190,343 | 18,315,487 | 191,800 | 21,165,806 | 284,892 | ||||||||||||||||||
Engineering & Construction |
4,846,786 | (197,071 | ) | 8,515,780 | 265,891 | 8,119,207 | 446,214 | |||||||||||||||||
Others |
1,836,457 | 70,710 | 3,068,254 | 76,461 | 3,971,684 | 214,599 | ||||||||||||||||||
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Total |
38,066,142 | 2,372,575 | 58,192,345 | 2,410,043 | 65,098,445 | 3,213,530 | ||||||||||||||||||
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2. Current Situation
1) Steel
A. Domestic Market Share
(Millions of Tons, %) | ||||||||||||||||||||||||||||||||
Category |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | 2013 | ||||||||||||||||||||||||||||
Production | Market share | Production | Market share | Production | Market share | Production | Market share | |||||||||||||||||||||||||
Crude Steel Production |
50.9 | 100 | 69.7 | 100 | 71.5 | 100 | 66.1 | 100 | ||||||||||||||||||||||||
POSCO |
27.9 | 54.8 | 38.0 | 54.5 | 37.7 | 52.7 | 36.4 | 55.1 | ||||||||||||||||||||||||
Others |
23.0 | 45.2 | 31.7 | 45.5 | 33.8 | 47.3 | 29.7 | 44.9 |
Source: Korea Iron and Steel Association |
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B. Characteristics of the Steel Market
The steel industry supplies materials to major industries such as the automobile, shipbuilding and electronic appliance industries.
C. Summary and Prospect of New Businesses
1) | Establishment of Steelworks in India |
(a) | Company entered into a memorandum of understanding with the Orissa state government for the development of iron ore captive mines and for the development and construction of an integrated steelworks facility with an annual production capacity of 12 million tons. (June, 2005) |
(1-1) Development of Iron Ore Captive Mines
(a) | POSCO-India filed applications for mining exploration licenses for certain iron ore mines in the region of Khandadhar, Orissa (the Khandadhar Licenses). (September, 2005) |
(b) | Orissa State Government recommended the approval of the Khandadhar Licenses on behalf of POSCO-India to the Indian central government. (December, 2006) |
(c) | Indian central government denied the approval for the Khandadhar Licenses and remanded the matter to the Orissa State Government for further consideration. (July, 2007) |
(d) | Orissa State Government resubmitted its recommendation for the approval of the Khandadhar Licenses on behalf of POSCO-India to the Indian central government. (January, 2009) |
(e) | Orissa High Court set aside the Orissa State Governments recommendation to grant the approval of the Khandadhar Licenses to POSCO-India. (July, 2010) |
(f) | Orissa State Government filed a special leave petition with the Indian Supreme Court. (November, 2010) |
(g) | Indian Supreme Court ordered to nullify judgment of the Orissa High Court regarding the right to explore the iron ore mines in the region of Kandahar; and the Indian central government reinitiated the approval procedures for right to explore Kandahar. (May, 2013) |
(h) | The project was temporarily suspended because India Government announced an Administrative Order of the auction system for assignment of mine. (January, 2015) |
(1-2) Establishment of Steelworks
(a) | Indian central government granted the approval for the environmental impact assessment for the construction of a captive port. (May, 2007) |
(b) | Indian central government granted the approval for the environmental impact assessment for the construction of steel mills. (July, 2007) |
(c) | Indian Supreme Court granted the transformation of the forest land on the steel mill construction site. (August, 2008) |
(d) | Indian central government granted the final approval for the deforestation of steel mill construction sites. (December, 2009) |
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(e) | Final plans for the rehabilitation and resettlement of indigenous population were approved by the Rehabilitation and Peripheral Development Advisory Committee (constituted by the Orissa state government). (July, 2010) |
(f) | Forest Advisory Committee acting under the Ministry of Environment and Forest temporarily suspended activities at the construction site pending investigation into alleged violation of the Forest Regulation Act. (August, 2010) |
(g) | Ministry of Environment and Forest of the Indian central government granted a conditional approval on the construction of the steel mills and the port. (January, 2011) |
(h) | Ministry of Environment and Forest of the Indian central government granted the final approval on the construction of the steel mills and the port. (May, 2011) |
(i) | Company cleared the crop fields designated for the construction of its steel mill site within the state owned property. (May, 2011). |
(j) | An environmental organization filed a lawsuit to nullify the approval for the environmental impact assessment in the National Green Tribunal. (August, 2011) |
(k) | National Green Tribunal dismissed the lawsuit of nullifying the approval for the environmental impact assessment and ruled that the Ministry of Environment and Forest should reassess the conditions on which clearance was permitted for the project. (March, 2012) |
(l) | Procurement of the possessory right over 1,704 acres of the steel mill construction site. (March, 2013) |
(m) | Ministry of Environment and Forest of the Indian central government approved to gain environmental license for building the steel mill (January, 2014) |
(2) | Establishment of the Steelworks in Brazil |
(a) | Board of Directors resolved to invest a 20% interest in CSP Joint Venture established by POSCO, VALE S.A. and DONGKUK STEEL MILL CO., LTD. (May, 2011) |
(b) | CSP Joint Venture entered into an Engineering Procurement Construction contract with POSCO E&C. (December, 2011) |
(c) | Construction of a steelwork with an annual capacity of 3 million tons initiated. (September, 2012) |
(d) | Build 4 pillars sustaining the furnace (March, 2014) |
(e) | Receiving electrical power (July, 2015) |
(f) | Construction completed and production of slabs commenced (June, 2016) |
(3) | Establishment of a Continuous Galvanizing Line in Thailand |
(a) | Approval of the Board of Directors (November, 2013) |
(b) | Contract of the Site Sales (March, 2014) |
(c) | Acquisition of the Land Use Rights (June, 2014) |
(d) | Construction of a steelwork with an annual capacity of 0.45 million tons commenced (September, 2014) |
(e) | Electric generation work commenced (July, 2015) |
(f) | Test run of operation (December, 2015) |
(g) | Construction of Continuous Galvanizing Line completed (June, 2016) |
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(4) | Establishment of No.7 Continuous Galvanizing Line at Gwangyang Works |
(a) | Board of Directors resolved to construct a Continuous Galvanizing Line at Gwangyang Works (December, 2014) |
(b) | Construction of a steelwork with an annual capacity of 0.5 million tons commenced (September, 2015) |
(c) | Steel-frame work commenced (January, 2016) |
(d) | Electric generation work commenced (May, 2016) |
(5) | Increase capability of non-oriented electrical steel at Pohang Works |
(a) | Board of Directors resolved to increase capability of non-oriented electrical steel at Pohang Works (May, 2015) |
(b) | Construction of a steelwork with an annual capacity of 0.1 million tons commenced (March, 2016) |
(c) | Electric generation work commenced (September, 2016) |
(6) | Joint venture with Chongqing Iron and Steel (Group) Company Limited in China |
(a) | Board of Directors resolved to invest in JV with Chongqing Iron and Steel (January, 2016) |
(b) | Execution of JV Agreements (April, 2016) Construction of Steel mills for 1) cold rolled steel products and 2) plated steel products (June, 2016) |
2) Trading
A. Market Share
(Millions of Dollars) | ||||||||||||
Category | 2015 3Q | 2016 3Q | Growth rate | |||||||||
All Trading Companies in Korea |
396,740 | 363,126 | -8.5 | % | ||||||||
POSCO Daewoo |
5,019 | 4,358 | -13.2 | % |
Source: Korea International Trade Association |
B. Summary and Prospect of New Businesses
POSCO Daewoo Corporation (POSCO Daewoo) is playing a leading role in Korean export industry as the number one trading company based on its wide range of trading network worldwide including about 100 overseas trading subsidiaries, overseas branches and representative offices through intermediary trading and exporting various products including steel, non-ferrous metals, and chemical products. Moreover, POSCO Daewoo is making tangible progress in resource development through Myanmar gas field. POSCO Daewoo has newly entered into the food and forestry development business to secure the future food resources and green energy resources. POSCO Daewoo will aggressively drive this successful momentum of active investment and trading by establishing plantations for agro-resources such as rice, soybean, wheat and corn as well as oil palm and afforestation businesses.
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3) Engineering & Construction
A. Summary and Prospect of New Businesses
POSCO Engineering & Construction Co. Ltd. (POSCO Engineering & Construction), established in February 1982, is currently expanding its business areas to civil engineering, architectural works, energy, urban development and low carbon & green growth businesses. In reference to the number of the overseas contracts signed by POSCO Engineering & Construction in 2011, the business performance of the POSCO Engineering & Construction in the global market has been satisfactory.
POSCO ENGINEERING COMPANY CO., LTD. succeeded in the development of a management system for the global market and the Engineering, Procurement & Construction (EPC) business. POSCO ENGINEERING COMPANY CO., LTD. planed out its global sales strategy and stabilized its global network through its local agencies and localization strategies. Recently, POSCO ENGINEERING COMPANY CO., LTD. expanded its business markets to the countries located in Central and South America, Africa and Europe.
4) Others
A. POSCO ENERGY CO., LTD
POSCO ENERGY CO., LTD. (POSCO ENERGY) started its commercial operation in February, 1972 as the only privately-owned power plant in Korea. Since the early 90s, POSCO ENERGY continuously remodeled and built additional power plants meeting the increased demand of electricity in Korea. POSCO ENERGY started its fuel cell business in 2007 and continuously develops, manufactures and provides the operation and management services for fuel cell plants globally.
B. POSCO ICT
POSCO ICT is established in November, 1989 for the purpose of providing services in software development, data processing, and info-communications business. It has an expertise in IT and engineering, which was made in an effort to lead the trend of green growth and convergence. POSCO ICT has provided total solution to overseas existing steel mills and other solution systems through application of optimal information technology. Currently, POSCO ICT applies its developed ICT technology at Smart Factory by applying the industrial IoT and big data at industrial sites. Based on its key technologies, POSCO ICT has been putting efforts to enhance competitiveness of the industries, in areas such as smart factory, smart IT, energy, SOC (railroad/transportation), and environment. POSCO ICT will continue to support to strengthen the core business of POSCO Group and enhance its business competency globally.
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C. POSCO CHEMTECH
POSCO CHEMTECH, founded in 1963, specializes in manufacturing of refractories, lime used in steel manufacturing processes as well as a wide range of chemical and environmentally friendly products. POSCO CHEMTECH provides refractories to a wide range of industries including steel, cement, and glass companies. POSCO CHEMTECH is currently expanding its comprehensive chemical and carbon material business in the secondary cell, anode materials and needle coke graphites.
D. POSCO M-TECH
POSCO M-TECH started its operation in 1973 as a specialized supplier of steel supplementary materials, including aluminum deoxidizers and molybdenum and steel products packagings. POSCO M-TECH expanded its ferro/nonferrous alloy refining business through consigned operation and management of the magnesium plants, ferrosilicon plants, Fe power plants and FeMn plants. POSCO M-TECH makes its utmost efforts to stronghold its ground as a steel packaging and up-stream material-specialized company.
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3. Key Products
A. Sales of Key Products
(In hundred millions of KRW, %) | ||||||||||||
Business Area |
Item |
Specific Use |
Total Sales | Ratio | ||||||||
Steel |
Hot-rolled Product (HR) |
Steel pipe, Shipbuilding, etc |
49,935 | 15.9 | ||||||||
Cold-rolled Product (CR) |
Automobile, Home appliances, etc |
106,780 | 34.1 | |||||||||
Stainless Steel Products |
Western tableware, etc |
67,870 | 21.6 | |||||||||
By-Product |
Plates, Wire rods, etc |
89,292 | 28.4 | |||||||||
Gross Sum | 313,877 | 100.0 | ||||||||||
Deduction of Internal Trade | (118,398 | ) | | |||||||||
Sub Total | 195,479 | | ||||||||||
Trading |
Steel, Metal | 106,436 | 57.2 | |||||||||
Chemical, Strategic Item, Energy | 6,349 | 3.4 | ||||||||||
Others | 73,440 | 39.4 | ||||||||||
Gross Sum | 186,225 | 100.0 | ||||||||||
Deduction of Internal Trade | (67,875 | ) | | |||||||||
Sub Total | 118,350 | | ||||||||||
Engineering & Construction |
Domestic Construction | Architecture |
18,146 | 33.1 | ||||||||
Plant |
10,598 | 19.3 | ||||||||||
Civil Engineering |
5,141 | 9.4 | ||||||||||
Overseas Construction | 11,976 | 21.9 | ||||||||||
Owned Construction | 4,062 | 7.4 | ||||||||||
Others | 4,858 | 8.9 | ||||||||||
Gross Sum | 54,781 | 100.0 | ||||||||||
Deduction of Internal Trade | (6,314 | ) | | |||||||||
Sub Total | 48,467 | | ||||||||||
Others |
Electricity Sales, etc | 35,743 | 100.0 | |||||||||
Deduction of Internal Trade | (17,378 | ) | | |||||||||
Sub Total | 18,365 | | ||||||||||
Total Sum |
380,661 | |
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B. Price Fluctuation Trend of Key Products
(In thousands of KRW/ Tons, kWh) | ||||||||||||||||||
Business Area |
Products |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | 2013 | |||||||||||||
Steel |
Hot-rolled Product (HR) | 502 | 553 | 686 | 728 | |||||||||||||
Cold-rolled Product (CR) | 674 | 719 | 822 | 877 | ||||||||||||||
Others |
Electric Power | 86 | 105 | 142 | 156 | |||||||||||||
Lime | 111 | 117 | 112 | 119 |
Figures for the trading and engineering & construction businesses are not reflected on the table. |
[Steel]
(1) | Criteria for Calculation |
(a) | Subjects for Calculation: unit prices of the standard hot-rolled product and cold-rolled product |
(b) | Calculation Method and Unit: The average price of each product based on its total sales including the freight during the given period. |
(2) | Factors of Price Fluctuations |
Due to the weakened global demand in steel consumption and oversupply from China, domestic and overseas steel price has decreased since the end of 2011.
[Others]
(1) | Criteria for Calculation |
(a) | Electric Power = price of electric power/total amount of generated power |
(b) | Lime: average sales price including shipping cost |
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4. Major Raw Materials
A. Current Status of Major Raw Materials
(In hundred millions of KRW) | ||||||||||||||
Business Area |
Type of |
Item |
Specific Use |
Purchase Amount (Portion) |
Remarks | |||||||||
Steel |
Raw Materials | Materials for Iron-making, |
Iron Ore for Blast Furnaces |
49,681 (36.4%) | Iron Ore, Coal | |||||||||
Sub-materials | Sub-materials for Iron-making, Steelmaking |
49,105 (35.9%) |
|
Iron Material, Alloy Iron, Non-ferrous Metal, Limestone, etc. |
| |||||||||
Stainless Steel Materials | Key Materials for STS Production |
37,844 (27.7%) | |
Nickel, Ferrochrome, STS Scrap Iron, etc. |
| |||||||||
Engineering & Construction |
Raw Materials | Ready-mixed Concrete | Construction of Structure | 1,657 (21.5%) | ||||||||||
Steel Pile | Foundation of Structure | 48 (0.6%) | ||||||||||||
Steel Reinforcement |
Strengthening Concrete | 1,362 (17.7%) | ||||||||||||
Cable | Electricity Transfer | 64 (0.8%) | ||||||||||||
Others | Construction of Pipe and Structure etc. | 4,565 (59.3%) | ||||||||||||
Others |
Raw Materials | LNG | Material for Power Generation | 5,867 (47.8%) | ||||||||||
Limestone | Production of Lime | 846 (6.9%) | ||||||||||||
Others | Engineering business etc. | 5,571 (45.4%) |
18
B. Price Fluctuation Trend of Major Raw Materials
(In thousands of KRW) | ||||||||||||||
Business Area |
Category |
2016 3Q | 2015 | 2014 | ||||||||||
Steel |
Iron Ore(per ton) | 65 | 63 | 93 | ||||||||||
Coal(per ton) | 110 | 116 | 132 | |||||||||||
Scrap Iron(per ton) | 263 | 274 | 382 | |||||||||||
Nickel(per ton) | 10,632 | 13,392 | 17,769 | |||||||||||
Engineering & Construction |
Ready-mixed Concrete (per m3) | 61 | 59 | 59 | ||||||||||
Steel Pile (per m) | 39 | 39 | 67 | |||||||||||
Steel Reinforcement (per kg) | 1.0 | 1.0 | 1.0 | |||||||||||
Cable (per m) | 1.0 | 1.0 | 1.0 | |||||||||||
Others |
LNG (per ton) | 585 | 760 | 1,056 | ||||||||||
Lime (per ton) | 20 | 20 | 20 |
19
[Steel]
Key Factors in Price Fluctuations |
(1) | Iron Ore |
(In US Dollars/ Tons) | ||||||||||||||||||||||||||||||||||||||||||||||||
16 3Q | 16 2Q | 16 1Q | 15 4Q | 15 3Q | 15 2Q | 15 1Q | 14 4Q | 14 3Q | 14 2Q | 14 1Q | 13 4Q | |||||||||||||||||||||||||||||||||||||
Trend of International Benchmark Price (Free On Board, FOB) |
53 | 51 | 45 | 42 | 49 | 54 | 58 | 66 | 82 | 94 | 111 | 123 |
(2) | Coal |
(In US Dollars/ Tons) | ||||||||||||||||||||||||||||||||||||||||||||||||
16 3Q | 16 2Q | 16 1Q | 15 4Q | 15 3Q | 15 2Q | 15 1Q | 14 4Q | 14 3Q | 14 2Q | 14 1Q | 13 4Q | |||||||||||||||||||||||||||||||||||||
Trend of International Benchmark Price (FOB) |
92.5 | 84 | 81 | 89 | 93 | 109.5 | 117 | 119 | 120 | 120 | 143 | 152 |
(3) | Scrap Iron |
(In US Dollars/ Tons) | ||||||||||||||||||||||||||||||||||||||||||||||||
16 3Q | 16 2Q | 16 1Q | 15 4Q | 15 3Q | 15 2Q | 15 1Q | 14 4Q | 14 3Q | 14 2Q | 14 1Q | 13 4Q | |||||||||||||||||||||||||||||||||||||
Trend of Purchase Price (Cost and Freight, CFR) |
227 | 235 | 187 | 219 | 225 | 256 | 268 | 331 | 376 | 365 | 379 | 396 |
(4) | Nickel |
16 3Q | 16 2Q | 16 1Q | 15 4Q | 15 3Q | 15 2Q | 15 1Q | 14 4Q | 14 3Q | 14 2Q | 14 1Q | 13 4Q | |||||||||||||
Trend of London Metal Exchange ( LME) Cash Price |
USD 4.66/lb USD 10,265/ton |
USD 4.00/lb USD 8,823/ton |
USD 3.86/lb USD 8,499/ton |
USD 4.28/lb USD 9,437/ton |
USD 4.79/lb USD 10,561/ton |
USD 5.90/lb USD 13,008/ton |
USD 6.50/lb USD 14,338/ton |
USD 7.17/lb USD 15,799/ton |
USD 8.43/lb USD 18,576/ton |
USD 8.37/lb USD 18,463/ton |
USD 6.64/lb USD 14,645/ton |
USD 6.31/lb USD 13,904/ton |
20
[Engineering and Construction]
(1) | Criteria for Calculation |
Products |
Criteria for Calculation | |
Ready-mixed Concrete | Standard 25-210-15 | |
Steel Pile | SPS400 406.4x7.9T | |
Steel Reinforcement | High Tensile Deformed Bar SD40 D10 | |
Cable | TFR-CV, 0.6/1KV, 2.5SQ, 2core |
[Others]
(1) | Criteria for Calculation |
(a) | Electric Power: purchase price of electricity from Korea Gas Corporation |
* | Electricity price is affected by the raw material cost and foreign exchange rate. |
(b) | Lime: purchase price of lime and transportation fees |
21
5. Production and Facilities
A. Production Capacity
[Steel]
(Thousands of Tons)
Business Area |
Products | 2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | ||||||||||
Steel |
Crude Steel | 35,910 | 47,610 | 43,500 |
[Others]
(Electric Power-MW per year, Lime-Thousands of Tons per quarter)
Business Area |
Products | 2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | ||||||||||||
Power Generation |
Electric Power | Inchon | 3,412 | 3,412 | 2,992 | |||||||||||
Gwangyang | 284 | 284 | 284 | |||||||||||||
Pohang | 290 | 290 | 290 | |||||||||||||
Lime |
Lime | 1,644 | 2,190 | 2,190 |
B. Production Result and Capacity Utilization Rate
[Steel]
(1) | Production |
(Thousands of Tons) | ||||||||||||||
Products |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | |||||||||||
Crude Steel |
31,320 | 42,027 | 41,428 | |||||||||||
Products |
Hot-Rolled Products |
7,295 | 9,399 | 8,124 | ||||||||||
Plate | 4,780 | 6,471 | 6,433 | |||||||||||
Wire Rod | 2,096 | 2,771 | 2,750 | |||||||||||
Pickled-Oiled Steel Sheets |
2,254 | 2,816 | 2,785 | |||||||||||
Cold-Rolled Products |
6,646 | 9,219 | 8,934 | |||||||||||
Coated Steel | 4,836 | 6,170 | 6,164 | |||||||||||
Electrical Steel | 877 | 1,170 | 1,253 | |||||||||||
Stainless Steel | 1,913 | 2,401 | 2,453 | |||||||||||
Others | 3,223 | 3,775 | 4,005 | |||||||||||
Total | 33,920 | 44,192 | 42,901 |
The amount of products is the aggregate of the amount of products of POSCO and subsidiaries of POSCO, which may include interested party transactions. |
22
(2) | Capacity Utilization Rate for the third quarter of fiscal year of 2016 |
(Thousands of Tons) | ||||||||||||||
Company |
Capacity | Production | Utilization Rate | |||||||||||
Crude Steel Production |
POSCO | 31,735 | 27,872 | 87.8 | % | |||||||||
Zhangjiagang Pohang Stainless Steel | 825 | 875 | 106.1 | % | ||||||||||
PT.KRAKATAU POSCO | 2,250 | 2,181 | 96.9 | % | ||||||||||
POSCO SS-VINA | 825 | 392 | 47.5 | % | ||||||||||
Total | 35,910 | 31,320 | 87.2 | % |
Trade and engineering & construction businesses are not reflected on the table due to difficulties in measuring capacity, production and utilization rate of such businesses. |
[Others]
(1) | Production Result |
(Gwh, Thousands of Tons) | ||||||||||||||
Products |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | |||||||||||
Power Generation |
Electric Power | 10,807 | 15,754 | 15,442 | ||||||||||
Lime |
Lime | 1,862 | 2,437 | 2,383 |
(2) | Capacity Utilization Rate for the third quarter of fiscal year of 2016 |
(Electric Power-hr, Lime-Thousands of Tons) | ||||||||||||||||
Business Area |
Products |
Capacity | Production | Utilization Rate | ||||||||||||
Power Generation |
Electric Power | Inchon | 6,576 | 2,997 | 45.6 | % | ||||||||||
Gwangyang | 6,576 | 5,818 | 88.5 | % | ||||||||||||
Pohang | 6,576 | 6,041 | 91.9 | % | ||||||||||||
Lime |
Lime | 1,644 | 1,862 | 113.3 | % |
23
C. Production Facilities
[Land]
(In millions of KRW) | ||||||||||||||||||||
Business Area |
Beginning Book Balance |
Increased | Decreased | Depreciation | Ending Book Balance |
|||||||||||||||
Steel |
2,053,969 | 133,401 | (105,787 | ) | | 2,081,583 | ||||||||||||||
Trade |
63,526 | 4,711 | (40,686 | ) | | 27,551 | ||||||||||||||
Engineering & Construction |
40,862 | 13,967 | (14,586 | ) | | 40,243 | ||||||||||||||
Others |
414,450 | 1,875 | (4,385 | ) | | 411,940 |
[Building]
(In millions of KRW) | ||||||||||||||||||||
Business Area |
Beginning Book Balance |
Increased | Decreased | Depreciation | Ending Book Balance |
|||||||||||||||
Steel |
4,378,122 | 252,039 | (144,098 | ) | (243,457 | ) | 4,242,606 | |||||||||||||
Trade |
105,457 | 35 | (11,829 | ) | (8,833 | ) | 84,830 | |||||||||||||
Engineering & Construction |
94,682 | 320,038 | (266,275 | ) | (49,652 | ) | 98,793 | |||||||||||||
Others |
587,464 | 1,400 | (75,883 | ) | (19,773 | ) | 493,208 |
[Structures]
(In millions of KRW) | ||||||||||||||||||||
Business Area |
Beginning Book Balance |
Increased | Decreased | Depreciation | Ending Book Balance |
|||||||||||||||
Steel |
2,643,628 | 154,163 | (30,746 | ) | (146,438 | ) | 2,620,607 | |||||||||||||
Trade |
5,559 | | (266 | ) | (1,098 | ) | 4,195 | |||||||||||||
Engineering & Construction |
50,092 | 561 | (489 | ) | (1,325 | ) | 48,839 | |||||||||||||
Others |
250,134 | 2,821 | (10,845 | ) | (11,094 | ) | 231,016 |
[Machinery and Equipments]
(In millions of KRW) | ||||||||||||||||||||
Business Area |
Beginning Book Balance |
Increased | Decreased | Depreciation | Ending Book Balance |
|||||||||||||||
Steel |
18,052,181 | 1,316,216 | (411,104 | ) | (1,527,230 | ) | 17,430,063 | |||||||||||||
Trade |
307,865 | 14,109 | (3,155 | ) | (33,254 | ) | 285,565 | |||||||||||||
Engineering & Construction |
28,550 | 3,403 | (1,695 | ) | (5,200 | ) | 25,058 | |||||||||||||
Others |
2,705,147 | 41,151 | (189,213 | ) | (114,158 | ) | 2,442,927 |
24
[Vehicles]
(In millions of KRW) | ||||||||||||||||||||
Business Area | Beginning Book Balance |
Increased | Decreased | Depreciation | Ending Book Balance |
|||||||||||||||
Steel |
33,523 | 7,999 | (2,116 | ) | (9,625 | ) | 29,781 | |||||||||||||
Trade |
3,668 | 2,084 | (482 | ) | (1,078 | ) | 4,192 | |||||||||||||
Engineering & Construction |
9,681 | 1,081 | (528 | ) | (1,762 | ) | 8,472 | |||||||||||||
Others |
5,133 | 1,331 | (155 | ) | (1,530 | ) | 4,779 |
[Tools and Fixtures]
(In millions of KRW) | ||||||||||||||||||||
Business Area | Beginning Book Balance |
Increased | Decreased | Depreciation | Ending Book Balance |
|||||||||||||||
Steel |
59,289 | 13,055 | (3,019 | ) | (15,586 | ) | 53,739 | |||||||||||||
Trade |
1,513 | 296 | (68 | ) | (375 | ) | 1,366 | |||||||||||||
Engineering & Construction |
1,628 | 362 | (78 | ) | (544 | ) | 1,368 | |||||||||||||
Others |
11,048 | 1,881 | (382 | ) | (3,479 | ) | 9,069 |
[Equipment]
(In millions of KRW) | ||||||||||||||||||||
Business Area | Beginning Book Balance |
Increased | Decreased | Depreciation | Ending Book Balance |
|||||||||||||||
Steel |
86,771 | 14,657 | (3,887 | ) | (20,329 | ) | 77,212 | |||||||||||||
Trade |
16,003 | 2,314 | (186 | ) | (4,194 | ) | 13,937 | |||||||||||||
Engineering & Construction |
10,552 | 3,992 | (2,821 | ) | (5,049 | ) | 6,674 | |||||||||||||
Others |
34,773 | 4,060 | (1,480 | ) | (11,211 | ) | 26,142 |
[Financial Lease Assets]
(In millions of KRW) | ||||||||||||||||||||
Business Area | Beginning Book Balance |
Increased | Decreased | Depreciation | Ending Book Balance |
|||||||||||||||
Steel |
18,006 | 86,540 | (625 | ) | (10,655 | ) | 93,266 | |||||||||||||
Trade |
20,541 | 11 | (2,502 | ) | (1,240 | ) | 16,810 | |||||||||||||
Engineering & Construction |
1,782 | 69 | (273 | ) | (250 | ) | 1,328 | |||||||||||||
Others |
52,467 | | (1,734 | ) | (1,631 | ) | 49,102 |
[Assets under Construction]
(In millions of KRW) | ||||||||||||||||||||
Business Area | Beginning Book Balance |
Increased | Decreased | Depreciation | Ending Book Balance |
|||||||||||||||
Steel |
1,078,570 | 2,009,468 | (1,162,210 | ) | | 1,925,828 | ||||||||||||||
Trade |
225,694 | 122,817 | (34,573 | ) | | 313,938 | ||||||||||||||
Engineering & Construction |
25,549 | 11,626 | (14,192 | ) | | 22,983 | ||||||||||||||
Others |
1,044,976 | 84,095 | (1,047,939 | ) | | 81,132 |
25
(2) | Major Capital Expenditures |
(a) | Investments under Construction |
[Steel]
(In hundred millions of KRW) | ||||||||||||||||||
Company |
Date |
Project |
Total Investment |
Invested Amount |
Amount to Be Invested |
|||||||||||||
POSCO |
Expansion | December, 2014~June, 2017 | G)Installation of no.7 CGL | 2,554 | 1,347 | 1,207 | ||||||||||||
April, 2014 ~ December, 2016 | Establishment of SNG Plant | 11,940 | 11,226 | 714 | ||||||||||||||
October, 2014 ~ December, 2016 | G) Renovation of the Fifth Furnace, etc. | 5,087 | 4,459 | 628 | ||||||||||||||
July, 2008 ~ December, 2018 |
P, G) Expansion of the Capacity of the Raw Material Treatment Facilities, etc | 21,990 | 14,093 | 7,897 | ||||||||||||||
March, 2015 ~ December, 2017 |
P) Renovation of the Third Furnace, etc | 5,316 | 1,220 | 4,096 | ||||||||||||||
Chongqing POSCO CISL Automotive Steel Co., Ltd. |
Establishment | July, 2016 ~ August, 2018 |
Installation of no.1 CGL | 2,264 | 437 | 1,827 |
P stands for Pohang Steel Works. |
G stands for Gwangyang Steel Works. |
[Trade]
(In hundred millions of KRW) | ||||||||||||||||||
Company |
Date |
Project |
Total Investment |
Invested Amount |
Amount to Be Invested |
|||||||||||||
PT.BIO Inti Agrindo |
Expansion | December, 2014 ~ September, 2016 |
CPO Mill | 226 | 171 | 55 |
[Engineering&Construction]
(In hundred millions of KRW) | ||||||||||||||||||
Company |
Date |
Project |
Total Investment |
Invested Amount |
Amount to be Invested |
|||||||||||||
Hunchun POSCO Hyundai International Logistics Complex Development Co., Ltd. |
Expansion | July, 2012 ~ September, 2016 |
Land lease for construction of logistics complex | 430 | 284 | 146 | ||||||||||||
September, 2014 ~ December, 2015 | #2-1 Construction of logistics complex | 235 | 199 | 36 | ||||||||||||||
March, 2015 ~December, 2018 | #2-2 Construction of logistics complex | 245 | 49 | 196 |
26
[Others]
(In hundred millions of KRW) | ||||||||||||||||||
Company |
Date | Project |
Total Investment |
Invested Amount |
Amount to be Invested |
|||||||||||||
POSCO ICT |
Expansion | January, 2016~ December, 2016 |
Expansion of Smart Management Server For Smart Management Operation Efficiency |
196 | 63 | 133 | ||||||||||||
POSCO- TERMINAL Co., Ltd. |
Expansion | January, 2016~ December, 2017 |
Investment in Silo | 616 | 101 | 515 |
The investments over KRW 10 billion are listed on the table while equity investment is not reflected thereon. |
(b) | Future Investment Plans |
(In hundred millions of KRW) | ||||||||||||||||||
Business | Company |
Project |
Planned Investments | |||||||||||||||
2016 | 2017 | 2018 | ||||||||||||||||
Steel |
POSCO | Expansion, Renovation and Replacement of Existing Facilities | Renovation of Existing Facilities | 7,367 | 8,274 | 9,856 | ||||||||||||
Capacity Increase | 211 | 1,097 | 963 | |||||||||||||||
POSCO Thainox Public Company Limited | Expansion, Renovation and Replacement of Existing Facilities | Manufacture Process | 42 | 39 | 23 | |||||||||||||
POSCO SS VINA CO., LTD.. | Expansion, Renovation and Replacement of Existing Facilities | Renovation of Existing Facilities | 21 | 63 | 61 | |||||||||||||
E&C |
HUNCHUN POSCO HYUNDAI INTERNATIONAL LOGISTICS CO., LTD. | Expansion, Renovation and Replacement of Existing Facilities | Establishment of Facilities | | 98 | 98 | ||||||||||||
Others |
POSCO ICT | Expansion, Renovation and Replacement of Existing Facilities | Investment in Smart IT business | | 86 | 180 | ||||||||||||
Development of Facilities | | 146 | 4 | |||||||||||||||
Discover new business opportunities- | | 93 | 88 | |||||||||||||||
POSMATE | Expansion, Renovation and Replacement of Existing Facilities | Renovation of Existing Facilities | 65 | 71 | 98 | |||||||||||||
POSCO Energy | Expansion, Renovation and Replacement of Existing Facilities | Investment | 1,146 | 1,417 | 1,082 |
The investments over KRW 10 billion are listed on the table while equity investment is not reflected thereon. |
27
6. Product Sales
[Steel]
(In hundred millions of KRW) | ||||||||||||||
Items |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | |||||||||||
Domestic |
Hot-Rolled Products |
23,621 | 30,799 | 42,090 | ||||||||||
Cold-Rolled Products | 25,912 | 38,418 | 41,939 | |||||||||||
Stainless Steel | 16,734 | 22,365 | 27,024 | |||||||||||
Others | 51,563 | 79,113 | 102,892 | |||||||||||
Export |
Hot-Rolled Products |
26,314 | 41,505 | 37,133 | ||||||||||
Cold-Rolled Products | 80,868 | 100,565 | 104,078 | |||||||||||
Stainless Steel | 51,136 | 71,530 | 79,856 | |||||||||||
Others | 37,729 | 64,073 | 60,957 | |||||||||||
Total |
Gross Sum | 313,877 | 448,368 | 495,969 | ||||||||||
Internal Transaction | (118,398 | ) | (165,440 | ) | (177,552 | ) | ||||||||
Total | 195,479 | 282,928 | 318,417 |
[Trading]
(In hundred millions of KRW) | ||||||||||||||
Items |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | |||||||||||
Domestic |
Merchandise | 4,334 | 6,833 | 9,349 | ||||||||||
Product |
| | | |||||||||||
Others |
262 | 244 | 111 | |||||||||||
Export |
Merchandise | 54,207 | 81,379 | 88,947 | ||||||||||
Product |
81 | 57 | 223 | |||||||||||
Others |
352 | 606 | 596 | |||||||||||
Trades among Korea, China & Japan |
126,988 | 180,956 | 213,383 | |||||||||||
Gross Sum |
186,224 | 270,075 | 312,609 | |||||||||||
Internal Transaction |
(67,874 | ) | (86,920 | ) | (100,951 | ) | ||||||||
Total |
118,350 | 183,155 | 211,658 |
28
[Engineering & Construction]
(In hundred millions of KRW) | ||||||||||||||||
Items |
2016 3Q (January 1, 2016~ September 30, 2016) |
2015 | 2014 | |||||||||||||
Construction Contract Revenue |
Domestic | Architecture | 18,146 | 25,302 | 19,514 | |||||||||||
Plant | 10,598 | 15,381 | 24,785 | |||||||||||||
Civil Engineering | 5,141 | 8,653 | 7,378 | |||||||||||||
Overseas | 4,858 | 39,001 | 42,980 | |||||||||||||
Own Construction |
11,976 | 7,187 | 6,976 | |||||||||||||
Other Subsidiary company sales |
4,063 | 3,154 | 1,404 | |||||||||||||
Gross Sum |
54,782 | 98,678 | 103,037 | |||||||||||||
Internal Transaction |
(6,314 | ) | (13,521 | ) | (21,845 | ) | ||||||||||
Total |
48,468 | 85,157 | 81,192 |
[Others]
(In hundred millions of KRW) | ||||||||||||
Items |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | |||||||||
Electric Power |
18,364 | 30,683 | 39,717 |
7. Derivatives
We utilize derivatives contracts to hedge the exchange rate risk and interest rate risk, and we also possess other option contracts. As of September 30, 2016, we had derivatives assets of KRW 87,369 million and derivatives liabilities of KRW 137,874 million related to forward exchanges, currency swaps, interest rate swaps, and others. During the nine months ended September 30, 2016, we recognized KRW 3,081 million of net losses on derivatives transactions and KRW 82,908 million of net losses on valuation of derivatives related to the above-mentioned derivatives contracts.
29
8. Significant Contracts
Company |
Contract |
Date |
Remarks | |||
POSCO |
Cooperation Agreement with Roy Hill Co., Ltd. |
January, 2010 | The purpose of the Cooperation Agreement was to obtain 15% stake in Roy Hill Holdings Pty. Ltd. which was pursuing the development of Roy Hill iron ore mine in Western Australia. | |||
January, 2012 |
POSCO decided to acquire certain additional equity interest in Roy Hill Holdings Pty. Ltd. (2nd phase), which amounts to approximately KRW 1,779 billion. | |||||
March, 2012 |
POSCO entered into a contract in March 2012 to invest an additional A$ 1,495 million to increase its interest to 15% of the total outstanding and common stocks of Roy Hill Holdings Pty. Ltd. | |||||
April, 2012 |
POSCO entered into a contract to dispose its 2.5% interest in the total outstanding common stocks of Roy Hill Holdings Pty. Ltd. to China Steel Corporation for A$ 305 million. | |||||
Sales of shares in POSCO Specialty Steel Co., Ltd. | March, 2015 |
POSCO entered into a contract to sell its 52.3% interest in the total outstanding common stocks of POSCO Specialty Steel Co., Ltd. to SeAH Besteel Corp., Shinyoung Securities Co., Ltd., and Shinhan Investment Corp, which amounts to approximately KRW 418.5 billion. | ||||
Sales of shares in POSCO ENGINEERING & CONSTRUCTION | June, 2015 |
POSCO entered into a contract to sell its 38% interest in the total outstanding common stocks of POSCO Engineering & Construction Co., Ltd. to Public Investment Fund of the Ministry of Finance in Saudi Arabia(PIF) for the (i)sale of POSCOs common stock (10,802,850 shares) in POSCO E&C to PIF, and (ii)POSCO E&Cs issuance and sale of new shares of common stock (5,083,694 shares) to PIF
Sale of shares of POSCO E&C to PIF was completed (September 30). | ||||
Small scale merger with POSHIMETAL Co.,Ltd. | December, 2015 |
1) Purpose: Enhancing the shareholders value by :increasing operational efficiency and creating synergies between businesses
2) Information: POSCO holds a 100% stake in POSHIMETAL Co.,Ltd. The merger ratio is 1:0, and POSCO will not be issuing new shares
3) Conclusion of a contract: December 23, 2015
4) Date of merger: March 1, 2016
5) Registration of merger: March 15, 2016 | ||||
Small scale merger with POSCO GREEN GAS TECHNOLOGY | February, 2016 |
1) Purpose: Enhancing the shareholders value by :increasing operational efficiency and creating synergies between businesses
2) Information: POSCO holds a 100% stake in POSCO GREEN GAS TECHNOLOGY. The merger ratio is 1:0, and POSCO will not be issuing new shares
3) Conclusion of a contract: February 26, 2016
4) Date of merger: May 1, 2016
5) Registration of merger(expected): May 16, 2016 | ||||
Investment into the joint venture with Chongqing Iron and Steel (Group) Co. Ltd. in China | April, 2016 |
1) Purpose: JV investment to expand sales of automotive steel sheets in the southwest China
2) Information: POSCO and Chongqing Iron & Steel Co. signed an agrement to set up two steel mill joint ventures in Chongqing. POSCO will hold 10% stake in the investment of producing high-strength cold-rolled sheets and hold 51% stake in the investment of producing automotive steel sheets
3) Conclusion of a contract: April 6, 2016 |
30
DAEWOO INTERNATIONAL CORPORATION | Gas Sales and Purchase Agreement (GSPA) Regarding Shwe, Shwe Phyu and Mya gas field in Myanmar |
December, 2008 |
1) Contract Parties
Seller: POSCO Daewoo (51%), ONGC Videsh Limited (17%), Myanmar Oil and Gas Enterprise (15%), GAIL (India) Limited (8.5%) and Korea Gas Corporation (8.5%)
Buyer: China National United Oil Company (CNUOC)
2) Signed Date: December 24, 2008
3) Summary of the GSPA
Gas produced from Shwe and Shwe Phyu gas field in Block A-1 and Mya field in Block A-3 in Myanmar will be transported via the offshore and onshore gas pipelines to CNUOC in China.
Gas production period is expected to be approximately 30 years.
Gas sales price will be fluctuated and recalculated quarterly in accordance with the contractual base price, averaged oil price and consumer price.
4) Remarks
CNUOC is one of subsidiaries of China National Petroleum Corporation (CNPC) and CNPC guarantees CNUOCs contractual obligations under gas sales and purchase agreement.
Related Public Announcements: December 26, 2008; December 3, 2008; June 23, 2008; June 4, 2008; December 5, 2007; June 5, 2007; December 7, 2006; June 8, 2006; December 8, 2005; June 9, 2005; December 10, 2004; and June 11, 2004 | |||
Investment for Construction of Facilities (Offshore Gas Production Platform and Onshore Gas Pipelines, etc) |
August, 2009 |
1) Total Investment: KRW 2,095,727,800,000
2) Purpose of Investment: construction of new facilities for gas production, processing and transportation
3) Total Period of Investment: October 1, 2009 ~ September 30, 2014
4) Remarks
Location: the north-western offshore and onshore in Myanmar
Main facilities: offshore platform (gas production capacity: 64,000ft3/day), offshore pipeline (diameter: 32inch, length: 110km), onshore pipeline (diameter: 40 inch, length: 825km)
Date of Gas Supply: May 1, 2013; daily gas production rate during the plateau period: 50,000ft3/day
The aforementioned investment is for the phase 1 development; the phase 2 ~ 4 developments will commence consequently approximately 10 years after the completion of the phase 1 development.
Main business areas: Upstream offshore business (offshore platform, subsea system), Middle stream offshore business (gas pipeline, onshore gas terminal)
Participants: POSCO Daewoo (51%), ONGC Videsh Limited (17%), Myanmar Oil and Gas Enterprise (15%), GAIL (India) Limited (8.5%) and Korean Gas Corporation (8.5%) |
31
Sale of Daewoo Cement (Shandong) Company Limited |
July, 2011 |
1) Purpose of the Sale : sale of non-core business, divestiture and collection of long term debt
2) Other information
The sale price of all of the shares of Daewoo Cement (Shandong) Company Limited has not been determined; the separate disclosure regarding the sale price of Daewoo Cement (Shandong) Company Limited will be made when such information is available.
The sale price of all of the shares of Daewoo Cement (Shandong) Company Limited is KRW 37,422,000,000 as of December 27, 2000. At the end of March, 2012, the book value of all of the shares of Daewoo Cement (Shandong) Company Limited was KRW 41,600 million under the K-IFRS.
The official sale date of all of the shares of Daewoo Cement (Shandong) Company Limited has not been determined; actual sale date of all of the shares of Daewoo Cement (Shandong) Company Limited shall be set when the condition precedents of the share purchase agreement between Daewoo Cement (Shandong) Company Limited and a purchaser are satisfied.
Sale agreement can be nullified when condition precedents of the contract (i.e. government approvals, etc) are not satisfied.
| ||||
Sale of Kyobo Life Insurance Co., Ltd. stake |
August, 2012 |
1) Purpose of the sale was to strengthen financial structure and secure the core investment plan
2) Other information
The board of Directors resolved to sell the Kyobo Life Insurance Co., Ltd.s stake, which amounts to KRW 1,205,400 million on August 8, 2012. | ||||
Acquisition of NEATT (North East Asia Trade Tower) in Songdo, Incheon |
July, 2013 |
1) Building
Name: NEATT (North East Asia Trade Tower)
Location: Songdo, Incheon, Korea
2) Purchase Price: KRW 207,600,000,000 (2.8% of the total assets on consolidated basis as of the end of year 2012)
3) Closing Date: July 31, 2014 (tentative)
4) Miscellaneous
Building is expected to be purchased by Daewoo International (60%) and POSCO E&C (40%) | ||||
POSCO ENERGY | Agreement of stock acquisition | June, 2014 |
1) Contract Parties: TONGYANG Cement & Energy Corp., TONGYANG Leisure, and TONGYANG Inc.
2) Signed Date : June 25, 2014
3) Amount : KRW 431,093 million
4) Purpose : Agreement of stock acquisition in order to acquire 100% stake of TONGYANG Power | |||
Contract on Off-gas Power Plant | February, 2015 |
1) Contract Parties: Purchaser of electric power (Korea Electric Power Corp. etc.)
2) Signed Date : February 26, 2015
3) Information: Contract of adjusting difference of time-based electric power price between a purchaser of electric power and a power producer |
32
9. Research and Development
A. Research and Development (R&D) Organization
Business Area |
Company |
Organization | ||||
Steel | POSCO | POSCOs Relevant Departments |
Technical Research Laboratory | |||
Engineering Solution Center | ||||||
Pohang Research Laboratory | ||||||
Gwangyang Research Laboratory | ||||||
Steel Solution Center | ||||||
Steel Planning Department | ||||||
New Business Planning Department | ||||||
Environment, Energy, Social responsibility Department | ||||||
POSCO COATED & COLOR STEEL |
Product Research Group | |||||
Zhangjiagang Pohang Stainless Steel Co., Ltd. |
Product Development Group | |||||
POSCO Thainox Public Company Ltd. |
Product Testing Laboratory(LAB) Team | |||||
Engineering & Construction |
POSCO Engineering & Construction |
R&D Center | ||||
POSCO Engineering Company |
R&D Center | |||||
POSCO A&C |
R&D Center | |||||
Others |
POSCO ENERGY |
Technology Strategy Department, Fuel Cell Department | ||||
POSCO ICT |
R&D Center | |||||
POSCO CHEMTECH |
R&D Center, Cathode Material Research Department | |||||
POSCO M-TECH CO., LTD. |
R&D Center | |||||
PNR CO., Ltd. |
Quality Innovation Department |
B. R&D Expenses for the third quarter of fiscal year of 2016
(In millions of KRW) | ||||||||||||||||||||
Category |
Business Area | |||||||||||||||||||
Steel | Trade | Engineering & Construction |
Others | Total | ||||||||||||||||
Selling and Administrative Cost |
51,093 | 982 | 1,135 | 24,448 | 77,658 | |||||||||||||||
Manufacturing Cost |
229,530 | | 157 | 2,242 | 231,929 | |||||||||||||||
R&D Cost (Intangible Assets) |
50,063 | | 356 | (22,843 | ) | 27,576 | ||||||||||||||
Total |
330,686 | 982 | 1,648 | 3,847 | 337,163 | |||||||||||||||
R&D/Sales Ratio |
1.69 | % | 0.01 | % | 0.03 | % | 0.21 | % | 0.89 | % |
33
1. Consolidated Financial Statements
A. Summary of Fiscal Years 2014, 2015 and the Third Quarter of 2016
(In millions of KRW) | ||||||||||||
Account |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | |||||||||
[Current Assets] |
27,438,778 | 29,180,889 | 32,627,382 | |||||||||
Cash & Cash equivalents |
3,401,297 | 4,870,185 | 3,811,202 | |||||||||
Other Receivables, net |
1,490,450 | 1,679,879 | 1,956,216 | |||||||||
Other Short-term Financial Assets |
4,702,226 | 3,910,387 | 1,462,920 | |||||||||
Accounts Receivables, net |
8,655,473 | 9,595,935 | 11,786,055 | |||||||||
Inventories |
7,902,452 | 8,225,205 | 10,471,330 | |||||||||
Other Current Assets |
1,286,880 | 899,298 | 3,139,659 | |||||||||
[Non-current Assets] |
49,623,969 | 51,227,870 | 52,624,791 | |||||||||
Other Receivables, net |
768,919 | 863,258 | 1,144,160 | |||||||||
Other Long-term Financial Assets |
2,367,992 | 2,341,460 | 2,455,900 | |||||||||
Investments in Associates and Joint Ventures |
3,875,882 | 3,945,333 | 4,060,507 | |||||||||
Tangible Assets, net |
33,310,141 | 34,522,855 | 35,241,195 | |||||||||
Good Will & Other Intangible Assets, net |
6,200,707 | 6,405,754 | 6,884,989 | |||||||||
Other Non-current Assets |
3,100,328 | 3,149,210 | 2,838,040 | |||||||||
Total Assets |
77,062,747 | 80,408,759 | 85,252,173 | |||||||||
[Current Liabilities] |
16,944,913 | 20,130,926 | 21,877,009 | |||||||||
[Non-current Liabilities] |
14,904,805 | 15,207,611 | 18,083,799 | |||||||||
Total Liabilities |
31,849,718 | 35,338,537 | 39,960,808 | |||||||||
[Controlling Interest] |
41,671,329 | 41,235,350 | 41,587,368 | |||||||||
Capital Stock |
482,403 | 482,403 | 482,403 | |||||||||
Capital Surplus |
1,388,798 | 1,383,623 | 1,083,718 |
34
(In millions of KRW) | ||||||||||||
Account |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | |||||||||
Hybrid bond |
996,919 | 996,919 | 996,919 | |||||||||
Retained Earnings |
41,014,333 | 40,501,059 | 40,967,558 | |||||||||
Other Controlling Interest |
(2,211,124 | ) | (2,128,654 | ) | (1,943,230 | ) | ||||||
[Minority Interest] |
3,541,700 | 3,834,872 | 3,703,997 | |||||||||
Total Shareholders Equity |
45,213,029 | 45,070,222 | 45,291,365 | |||||||||
Total Sales |
38,066,142 | 58,192,345 | 65,098,445 | |||||||||
Operating Income |
2,372,575 | 2,410,043 | 3,213,530 | |||||||||
Consolidated Net Profit |
1,034,442 | (96,181 | ) | 556,659 | ||||||||
[Controlling Interest] |
1,197,014 | 180,647 | 626,099 | |||||||||
[Minority Interest] |
(162,571 | ) | (276,828 | ) | (69,440 | ) | ||||||
Consolidated Total Comprehensive Income |
840,402 | (258,311 | ) | 101,077 | ||||||||
[Controlling Interest] |
1,062,204 | 33,016 | 174,918 | |||||||||
[Minority Interest] |
(221,802 | ) | (291,327 | ) | (73,841 | ) | ||||||
Earning Per Share |
14,653 | 1,845 | 7,432 | |||||||||
Number of Consolidated Companies |
205 | 214 | 229 |
B. The Standards Used for Reporting the Financial Statements
The Company prepared its financial statements in accordance with the Korean-International Financial Reporting Standards (the K-IFRS) and applied it to each Companys final financial statements.
C. Consolidated Interim Financial Statements
Refer to the attached Condensed Consolidated Interim Financial Statements for the Condensed Consolidated Interim Statements of Financial Position as of September 30, 2016, Condensed Consolidated Interim Statements of Comprehensive Income (loss), Condensed Consolidated Interim Statements of Changes in Equity, Condensed Consolidated Interim Statements of Cash Flows for the nine-month period ended September 30, 2016, and Notes.
35
2. Separate Financial Statements
A. Summary of Fiscal Years 2014, 2015 and the Third Quarter of 2016
(In millions of KRW) | ||||||||||||
Account |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | |||||||||
[Current Assets] |
11,245,707 | 11,427,639 | 11,623,130 | |||||||||
Cash & Cash equivalents |
1,098,318 | 1,634,106 | 1,742,767 | |||||||||
Trade Accounts & Notes Receivable(net) |
2,690,465 | 2,740,104 | 3,157,266 | |||||||||
Other Receivables, net |
186,787 | 246,431 | 562,930 | |||||||||
Other Short-term Financial Assets |
3,882,612 | 3,326,012 | 693,729 | |||||||||
Inventories |
3,311,112 | 3,427,011 | 4,383,568 | |||||||||
Other Current Assets |
76,413 | 53,975 | 1,082,870 | |||||||||
[Non-current Assets] |
39,997,418 | 39,881,770 | 40,974,193 | |||||||||
Other Receivables, net |
95,312 | 93,757 | 26,360 | |||||||||
Other Long-term Financial Assets |
1,836,212 | 1,804,374 | 1,794,590 | |||||||||
Investments in Subsidiaries, Associates, and Joint Ventures |
15,050,249 | 15,737,287 | 16,178,891 | |||||||||
Tangible Assets, net |
22,284,871 | 21,514,149 | 22,323,215 | |||||||||
Good Will & Other Intangible Assets, net |
485,598 | 490,762 | 403,907 | |||||||||
Other Non-current Assets |
245,176 | 241,441 | 247,230 | |||||||||
Total Assets |
51,243,125 | 51,309,409 | 52,597,323 | |||||||||
[Current Liabilities] |
2,394,766 | 3,817,678 | 3,516,052 | |||||||||
[Non-current Liabilities] |
5,022,838 | 4,466,173 | 6,605,840 | |||||||||
Total Liabilities |
7,417,604 | 8,283,851 | 10,121,892 | |||||||||
[Capital Stock] |
482,403 | 482,403 | 482,403 | |||||||||
[Capital Surplus] |
1,156,276 | 1,247,581 | 1,247,616 | |||||||||
[Hybrid bond] |
996,919 | 996,919 | 996,919 | |||||||||
[Retained Earnings] |
42,527,764 | 41,862,570 | 41,188,908 | |||||||||
[Other Equity] |
(1,337,841 | ) | (1,563,915 | ) | (1,440,415 | ) |
36
(In millions of KRW) | ||||||||||||
Account |
2016 3Q (January 1, 2016 ~ September 30, 2016) |
2015 | 2014 | |||||||||
Total Shareholders Equity |
43,825,521 | 43,025,558 | 42,475,431 | |||||||||
Total Sales |
17,883,260 | 25,607,221 | 29,218,854 | |||||||||
Operating Income |
2,147,271 | 2,238,249 | 2,350,035 | |||||||||
Net Income |
1,335,416 | 1,318,271 | 1,138,958 | |||||||||
Earnings per share(KRW) |
16,383 | 16,067 | 13,858 |
B. The Standards Used for Reporting the Financial Statements
The company prepared its financial statements and its Certified Public Accountants audit opinions on financial statements in accordance with the Korean - International Financial Reporting Standards (the K-IFRS).
C. Separate Interim Financial Statements
Refer to the attached Condensed Separate Interim Financial Statements for the Condensed Separate Interim Statements of Financial Position as of September 30, 2016, Condensed Separate Interim Statements of Comprehensive Income (loss), Condensed Separate Interim Statements of Changes in Equity, Condensed Separate Interim Statements of Cash Flows for the nine-month period ended September 30, 2016, and Notes.
37
IV. CORPORATE GOVERNANCE AND COMPANY AFFILIATES
1. Overview of Corporate Governance
A. Board of Directors
(1) | Board of Directors |
Our board of directors has the ultimate responsibility for management of our business affairs. Under our Articles of Incorporation, the board shall consist of five directors who also act as the executive officers (the Inside Directors) and seven directors who are to be outside directors (the Outside Directors). Our shareholders elect both Inside Directors and Outside Directors at a general meeting of shareholders. Candidates for the Inside Directors are recommended to shareholders by the board of directors after the board reviews such candidates qualifications; candidates for the Outside Directors are recommended to the shareholders by a separate board committee consisted of three Outside Directors and one Inside Director (the Director Candidate Recommendation Committee) after the committee reviews such candidates qualifications. Any shareholder holding an aggregate of 0.5% or more of our outstanding shares with voting rights for at least six months may recommend candidates for Outside Directors to the Director Candidate Recommendation Committee.
Our board of directors maintains the following six special committees:
(a) | Director Candidate Recommendation Committee; |
(b) | Evaluation and Compensation Committee; |
(c) | Finance and Operation Committee; |
(d) | Executive Management Committee; |
(e) | Audit Committee; and |
(f) | Related Party Transaction Committee. |
38
Composition of the Special Committees under the Board of Directors and their Functions (as of November 11, 2016) |
Category |
Composition |
Directors |
Major Functions | |||
Director Candidate Recommendation Committee |
3 Outside Directors; 1 Inside Director |
Shin, Chae Chol (Chairman) Lee, Myung-Woo Kim, Joo-Hyun Choi, Jeong-Woo |
Reviews the qualifications of potential candidates for Directors
Proposes nominees for the Outside Directors
Advances the nomination process for the CEO among the Inside Directors and members of the special committees | |||
Evaluation and Compensation Committee |
4 Outside Directors | Sunwoo, Young (Chairman) Kim, Il-Sup Bahk, Byong-Won Kim, Joo-Hyun |
Executes management succession and development plans
Establishes evaluation procedures of directors
Reviews the retirement procedures and distribution of the allowance for directors | |||
Finance and Operation Committee | 3 Outside Directors; 2 Inside Directors |
Bahk, Byong-Won (Chairman) Shin, Chae Chol Lee, Myung-Woo Kim, Jin-Il Oh, In-Hwan |
Advances deliberation of new investments in other companies
Revises the internal regulations regarding the operation of the Board of Directors
Deliberates financial matters and donations from the range of KRW 100 million and KRW 1 billion | |||
Audit Committee | 3 Outside Directors | Kim, Il-Sup (Chairman) Sunwoo, Young Kim, Joo-Hyun |
Audits the accounting system and business operations
Examines the agenda for financial statements and other reports to be submitted by the Board of Directors at each general meeting of shareholders | |||
Related Party Transactions Committee | 3 Outside Directors | Kim, Il-Sup (Chairman) Sunwoo, Young Kim, Joo-Hyun |
Reviews matters related to the internal transactions under the MRFTA.-Holds preliminary review on internal transactions exceeding the amount of KRW 10 billion.
Holds a deliberation hearing on internal transactions exceeding KRW 3 billion but less than 10 billion. | |||
Executive Management Committee |
5 Inside Directors | Kwon, Oh-Joon (Chairman) Kim, Jin-Il Lee, Young-Hoon Oh, In-Hwan Choi, Jeong-Woo |
Oversees decisions with respect to our operational and management matters
Reviews managements proposal for new strategic initiatives
Reviews deliberation over critical internal matters related to the organization structure and development of personnel
Reviews and revises work and welfare policies |
(2) | Establishment and Composition of the Director Candidate Recommendation Committee |
(a) | Established the Director Candidate Recommendation Committee (March 17, 2000) |
(b) | Changed the name from the Director Candidate Recommendation Committee to the Director Candidate Recommendation and Evaluation Committee (March 15, 2002) |
(c) | Changed the name from the Director Candidate Recommendation and Evaluation Committee to the Director Candidate Recommendation Committee (March 12, 2004) |
39
(3) | List of Outside Directors (as of March 11, 2016) |
Name |
Experience |
Relation with |
Remarks | |||
Lee, Myoung-Woo | (Present) President and Representative Director, Dongwon Industry
Vice Chairman, Iriver
CEO, SONY Korea |
None | Chairman Board of Directors | |||
Shin, Chae-Chol | President and Representative Director, LG CNS
President and Representative Director, IBM Korea |
None | ||||
Kim, Il-Sup | (Present) President, Seoul School of Integrated Science and Technology
Chairman, Deloitte Anjin Accounting Corporation
Vice-Chairman, Samil PWC Accounting Corporation |
None | ||||
Sunwoo, Young |
(Present) Managing Partner, Rhi & Partners
Chief Public Prosecutor, Seoul Eastern District Prosecutors Office
Chief Public Prosecutor, Cheongju District Prosecutors Office |
None | ||||
Bahk, Byong-Won | (Present) Chairman , Korea Employers Federation
President, National Happiness Fund
Chairman, Korea Federation Bank |
None | ||||
Kim, Joo-Hyun |
(Present) Advisory, Hyundai Research Institute Chairman, Sub-Committee of Economy Presidential Committee, Unification Preparation
President&CEO and Head of Business Strategy Division, Hyundai Research Institute |
None | ||||
Ahn, Dong-Hyun | (Present) Professor, School of Economics, Seoul National University
Head of Quant Strategy, Royal Bank of Scotland |
None | Member of the Risk Management committee of the National Pension Services (Non-Executive Director) Resignation on September 7, 2016 |
(4) | List of Key Activities of the Board of Directors (January 1, 2016 ~ November 11, 2016) |
Session |
Date |
Agenda |
Approval | |||
2016-1 | January 28 | 1. Approval of the financial statements for the 48th fiscal year and the convocation schedule for the 48th general meeting of shareholders
2. Approval of the investment into the joint venture with Chongqing Iron and Steel (Group) Company Limited in China
3. Approval of merger with POSHIMETAL Co., Ltd.
4.Contribution to K SPORT |
All 4 Cases Approved | |||
2016-2 | February 19 | 1. Agenda for the 48th general meeting of shareholders
2. Plan for Small scale merger with POSCO GREEN GAS TECHNOLOGY
3. Recommendation of candidates for the Inside Director position |
All 3 Cases Approved | |||
2016-3 | March 11 | 1. Appointment of the chairman of the Board of Directors
2. Appointment of the special committee members
3. Approval of designation of Inside Directors
4. The completion of the small scale merger with POSHIMETAL Co.,Ltd. |
All 4Cases Approved |
40
Session |
Date |
Agenda |
Approval | |||
2016-4 | March 24 | 1. Approval of merger with POSCO GREEN GAS TECHNOLOGY
2. Plan for the 307th public bond issuance
3. Appointment of compliance officer |
All 3 Cases Approved | |||
2016-5 | May 13 | 1. The completion of the small scale merger with POSCO GREEN GAS TECHNOLOGY
2. FY 2016 Transaction Plans with affiliates
3. Contribution to POSCO Educational Foundation |
All 3 Cases Approved | |||
2016-6 | August 4 | 1. Construction of the fifth LNG storage tank
2. Declaration of second quarter dividend for the fiscal year of 2016 |
All 2 Cases Approved | |||
2016-7 | November 4 | 1. Plan for merger between POSCO Daewoo and the trading business unit from POSCO Processing & Service
2. Participation in a bidding process for the share subscription in Eramine SAS
3. Disposal of the investment purpose Available for Sale stocks
4. Money Market Trust Enrollment
5. Declaration of third quarter dividend for the fiscal year of 2016
6. Lease contract of Limestone Calcinations Facility between POSCO and POSCO Chemtech
7. Rearrangement of members of Special Committees |
All 7 Cases Approved |
Major Activities of the Outside Directors on the Board of Directors (January 1, 2016 ~ November 11, 2016) |
Session |
Date | Participation of the Outside Directors (the Number of total members) |
Remarks | |||||
2016-1 |
January 28 | 7 (7) | ||||||
2016-2 |
February 19 | 7 (7) | ||||||
2016-3 |
March 11 | 7 (7) | ||||||
2016-4 |
March 24 | 7 (7) | ||||||
2016-5 |
May 13 | 7 (7) | ||||||
2016-6 |
August 4 | 7 (7) | ||||||
2016-7 |
November 4 | 6 (6) | |
Ahn, Dong-Hyun resigned on September 7, 2016 |
|
(5) | Composition of the Special Committees and their Activities |
(a) | Major Activities of Director Candidate Recommendation Committee (January 1, 2016 ~ November 11, 2016) |
Date |
Agenda |
Approval | ||
January 28, 2016 | 1. Qualification Assessment and Recommendation of Outside Director Candidates | Approved | ||
February 19, 2016 | 1. Qualification Assessment of Inside Director Candidates | | ||
March 11, 2016 | 1. Appointment of Special Committee Members | | ||
March 24, 2016 | 1. Appointment of the chairman of Director Candidate Recommendation Committee | Approved | ||
November 4, 2016 | 1. Rearrangement of members of Special Committees | |
41
(b) | Major Activities of Evaluation and Compensation Committee (January 1, 2016 ~ November 11, 2016) |
Date |
Agenda |
Approval | ||
January 28, 2016 | 1. Evaluation of the management result for the fiscal year of 2015 | Approved |
(c) | Major Activities of Finance and Operation Committee (January 1, 2016 ~ November 11, 2016) |
Date |
Agenda |
Approval | ||
January 28, 2016 | 1. Contribution to K SPORT
2. Improvement of corporate governance structure
3. Plan for extension of payment guarantee for Zhangjiagang Pohang Stainless Steel Co., Ltd. |
-
-
Approved | ||
March 24, 2016 | 1. Plan for the 307th public bond issuance | - | ||
May 13, 2016 | 1. Plan for extension of payment guarantee for P-Mexico
2. Contribution to Korea Society
3. Investment in kind for Pohang city offshore structure construction |
Approved
Approved
Approved | ||
August 4, 2016 | 1. Construction of the fifth LNG storage tank | - | ||
November 4, 2016 | 1. Participation in a bidding process for the share subscription in Eramine SAS
2. Disposal of the investment purpose Available for Sale stocks
3. Money Market Trust Enrollment
4. Land donation for Kyeongbuk Science High School |
-
-
-
Approved |
(d) | Major Activities of Related Party Transaction Committee (January 1, 2016 ~ November 11, 2016) |
Date |
Agenda |
Approval | ||
January 27, 2016 | 1. Review of the operation of the Fair Trading Compliance Program | - | ||
May 13, 2016 | 1. Mid/long-term development plan for POSCO Educational Foundation
2. Contribution to POSCO Educational Foundation |
-
- | ||
August 1, 2016 | 1. Review of operation of the Fair Trading Compliance Program for the first half of 2016 | - | ||
November 3, 2016 | 1. Lease contract of Limestone Calcinations Facility between POSCO and POSCO Chemtech
2. Carbon emission trading with POSCO Chemtech |
-
Approved |
(e) | Major Activities of Executive Management Committee (January 1, 2016 ~ November 11, 2016) |
Session |
Date |
Agenda |
Approval | |||
2016-1 | January 19 | 1. The investment into the joint venture with Chongqing Iron and Steel (Group) Company Limited in China
2. Technology license sales to Chongching Iron and Steel Company
3. Increase capacity of P-America for P-AAPC
4. Establishment of Pilot Plant Laboratory at Songdo
5. Disposal of treasury stocks as Employee Award |
-
Apporved
Apporved
Approved
Approved | |||
2016-2 | February 2 | 1. R&C investment for establishment of PosLX Demo Plant | Approved | |||
2016-3 | March 15 | 1.Enhancement of HR facilities in Pohang Works | Approved | |||
2016-4 | April 19 | 1.Improvement of hot metal pretreatment station at Gwangyang Works
2. Replacement of old facilities in Pohang Works
3. Disposal of treasury stocks as Employee Award |
Apporved
Apporved
Approved | |||
2016-5 | May 17 | 1. Closure of the shareholders register for 2016 second quarter dividends | Approved | |||
2016-6 | June 21 | 1. Replacement of blast facilities for #3, #4 furnaces in Pohang Works
2. Improvement of sintering cooling and improvement of waste heat energy recevery for facilities #1~#4 in Gwangyang Works
3. Replacement of HCGL facilities in Gwangyang Works |
Apporved
Apporved
Approved |
42
Session |
Date |
Agenda |
Approval | |||
2016-7 | July 19 | 1. Replacement of facilities of the steel mill #1 in Gwangyang Works
2. Replacement of EIC facilities of the continuous casting facility #1 in Gwangyang Works
3. Disposal of treasury stocks as Employee Award |
Apporved
Apporved
Approved | |||
2016-8 | August 23 | 1. Injection of additional capital for CSP upstream joint investment business in Brazil
2. Closure of the shareholders register for 2016 third quarter dividends |
Apporved
Apporved | |||
2016-9 | September 20 | 1. Replacement of old facilities of the steel mill #2 in Gwangyang Works
2. Phase 1 Sale of production facility of automotive steel sheets |
Apporved
Apporved | |||
2016-10 | October 19 | 1. Plan for Technology license sales to PT.Krakatau Steel
2. Disposal of treasury stocks as Employee Award
3. Modification of investment plan for the site building for the facility expansion in Gwangyang |
Apporved
Apporved
Approved |
43
B. Audit Committee
Under the Korean laws and our Articles of Incorporation, we are required to have an audit committee (the Audit Committee). The Audit Committee may be composed of three or more directors; all members of the Audit Committee must be of Outside Directors. Members of the Audit Committee must also meet the applicable independent criteria set forth under the rules and regulations of the Financial Investment Services and Capital Markets Act. Members of the Audit Committee are elected by the shareholders at the general meeting of shareholders. Our current Audit Committee is composed of three Outside Directors.
The duties of the Audit Committee include:
| Engaging independent auditors; |
| Approving independent audit fees; |
| Approving audit and non-audit services; |
| Reviewing annual financial statements; |
| Reviewing audit results and reports, including management comments and recommendations; |
| Reviewing our system of controls and policies, including those covering conflicts of interest and business ethics; and |
| Examining improprieties or suspected improprieties. |
Moreover, in connection with the general meeting of shareholders, the Audit Committee examines the agenda, financial statements and other reports to be submitted by the Board of Directors at each general meeting of stockholders. Our internal and external auditors report directly to the Audit Committee. The committee holds its regular meetings at least once each quarter and more frequently if needed.
(1) | Composition of the Audit Committee (Auditors) |
Name |
Qualifications |
Remarks | ||
Kim, Il-Sup
Sunwoo, Young
Kim, Joo-Hyun |
Satisfies the requirements stipulated in the Articles of Incorporation | Chairman
|
(2) | Major Activities of the Audit Committee (Auditors) (January 1, 2016 ~ November 11, 2016) |
Session |
Date |
Agenda |
Approval | |||
2016-1 | January 27 | Deliberation Agenda
Assessment of the Audit Committee
Report Agenda
Assessment of the operations of the internal accounting control system for the fiscal year of 2015
Reporting the consolidated internal control system for the fiscal year of 2015
Review of operation regulations amendment
The result of internal audit for the fiscal year of 2015 and audit plans for the fiscal year of 2016 |
Approved |
44
Session |
Date |
Agenda |
Approval | |||
2016-2 | February 18 | Deliberation Agenda
Assessment of the operations of the internal accounting control system for the fiscal year of 2015
Internal audit result for the fiscal year of 2015 (Consolidated)
Report Agenda
External audit result for the fiscal year of 2015 (Consolidated) |
Approved
Approved | |||
2016-3 | March 24 | Deliberation Agenda
Approval of audit and non-audit services for POSCO and POSCOs subsidiaries |
Approved | |||
2016-4 | April 25 | Deliberation Agenda
Audit report of Form 20-F for the fiscal year 2015 |
Approved | |||
2016-5 | May 13 | Report Agenda
Internal audit result on the Consolidated Financial Statements for the first quarter of 2016
External auditors review result on the Consolidated Financial Statements for the first quarter of 2016 and Audit result of Form 20-F for the fiscal year 2015
The result of internal audit for the first quarter of 2016 and audit plans for the second quarter of 2016 |
||||
2016-6 | August 1 | Report Agenda
Internal audit result on the Consolidated Financial Statements for the first half of 2016
External auditors review result on the Consolidated Financial Statements for the first half of 2016
The result of internal audit for the second quarter of 2016 and audit plans for the third quarter of 2016
Plan for election of external auditors for POSCO Group in 2017
The result of prior approval of audit services of PT.KP and PT.KPCC
|
||||
2016-7 | November 3 | Report Agenda
Internal audit result on the Consolidated Financial Statements for the third quarter of 2016
External auditors review result on the Consolidated Financial Statements for the third quarter of 2016
The result of internal audit for the third quarter of 2016 and audit plans for the fourth quarter of 2016 |
C. Voting Rights by Shareholders
(1) | The Cumulative Voting System: The cumulative voting system was introduced at the thirty sixth general meeting of shareholders on March 12, 2004. |
(2) | Voting by Mail: The voting-by-mail system was introduced at the thirty sixth general meeting of shareholders on March 12, 2004. |
45
D. Compensation of Directors and Officers
(1) | Directors (including Outside Directors) and the Audit Committee members (Auditors) Salaries |
(In millions KRW)
Category |
Total Numbers |
Total Payment | Average Payment | Ceiling Amount Approved at the Shareholders Meeting |
Remarks | |||||||||||||||
Inside Director |
5 | 2,655 | 423 | 7,000 | - | |||||||||||||||
Outside Director |
3 | 146 | 49 | - | ||||||||||||||||
Members of the Audit Committee |
3 | 146 | 49 | - | ||||||||||||||||
Total |
11 | 2,947 | 219 | - |
Payment Period: January 1, 2016 ~ September 30, 2016 |
Outside Directors also serving as the members of the Audit Committee are excluded in the count for the Outside Director. |
(2) | Individual remuneration amount |
| Not Applicable |
(3) | List of Stock Options Presented to the Executives (As of September 30, 2016) |
| Exercise of the stock option ended on the final day of the stock options exercise period (April 28, 2012). |
46
POSCO
Condensed Separate Interim Financial Statements
(Unaudited)
September 30, 2016
(With Independent Auditors Review Report Thereon)
Page | ||||
1 | ||||
Condensed Separate Interim Financial Statements |
||||
3 | ||||
Condensed Separate Interim Statements of Comprehensive Income |
5 | |||
6 | ||||
7 | ||||
Notes to the Condensed Separate Interim Financial Statements |
9 |
Independent Auditors Review Report
Based on a report originally issued in Korean
The Board of Directors and Shareholders
POSCO:
Reviewed financial statements
We have reviewed the accompanying condensed separate interim financial statements of POSCO (the Company), which comprise the condensed separate interim statement of financial position as of September 30, 2016, the condensed separate interim statements of comprehensive income for the three-month and nine-month periods ended September 30, 2016, and 2015, the condensed separate interim statements of changes in equity and cash flows for the nine-month periods ended September 30, 2016 and 2015, and notes, comprising a summary of significant accounting policies and other explanatory information.
Managements responsibility
Management is responsible for the preparation and fair presentation of these condensed separate interim financial statements in accordance with Korean International Financial Reporting Standard (K-IFRS) No. 1034 Interim Financial Reporting. The Companys management is also responsible for the internal controls determined necessary to prepare condensed separate interim financial statements free of material misstatements due to error or fraud.
Auditors review responsibility
Our responsibility is to issue a report on the condensed separate interim financial statements based on our reviews.
We conducted our reviews in accordance with the Review Standards for Quarterly and Semiannual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial statements consists of making inquiries primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying condensed separate interim financial statements referred to above are not prepared, in all material respects, in accordance with K-IFRS No. 1034 Interim Financial Reporting.
Other matter
The procedures and practices utilized in the Republic of Korea to review such condensed separate interim financial statements may differ from those generally accepted and applied in other countries.
The separate statement of financial position of the Company as of December 31, 2015, and the related separate statements of comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this report, were audited by us in accordance with Korean Standards on Auditing and our report thereon, dated February 25, 2016, expressed an unqualified opinion. The accompanying condensed separate statement of financial position of the Company as of December 31, 2015, presented for comparative purposes, is consistent, in all material respect, with the audited separate financial statements from which it has been derived.
Seoul, Korea
November 14, 2016
This report is effective as of November 14, 2016, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying condensed separate interim financial statements. Accordingly, the readers of the review report should understand that the above review report has not been updated to reflect the impact of such subsequent events or circumstances, if any.
2
Condensed Separate Interim Statements of Financial Position
As of September 30, 2016 and December 31, 2015
(Unaudited)
September 30, | December 31, | |||||||||||
(in millions of Won) | Notes | 2016 | 2015 | |||||||||
Assets |
||||||||||||
Cash and cash equivalents |
20 | 1,634,106 | ||||||||||
Trade accounts and notes receivable, net |
4,14,20,31 | 2,690,465 | 2,740,104 | |||||||||
Other receivables, net |
5,20,31 | 186,787 | 246,431 | |||||||||
Other short-term financial assets |
6,20 | 3,882,612 | 3,326,012 | |||||||||
Inventories |
7,28 | 3,311,112 | 3,427,011 | |||||||||
Assets held for sale |
8 | 26,080 | 25,892 | |||||||||
Other current assets |
13 | 50,333 | 28,083 | |||||||||
|
|
|
|
|||||||||
Total current assets |
11,245,707 | 11,427,639 | ||||||||||
|
|
|
|
|||||||||
Long-term trade accounts and notes receivable, net |
4,20 | 23,817 | 19,895 | |||||||||
Other receivables, net |
5,20 | 95,312 | 93,757 | |||||||||
Other long-term financial assets |
6,20 | 1,836,212 | 1,804,374 | |||||||||
Investments in subsidiaries, associates and joint ventures |
9 | 15,050,249 | 15,737,287 | |||||||||
Investment property, net |
10 | 96,133 | 86,752 | |||||||||
Property, plant and equipment, net |
11 | 22,284,871 | 21,514,150 | |||||||||
Intangible assets, net |
12 | 485,598 | 490,762 | |||||||||
Other non-current assets |
13 | 125,226 | 134,793 | |||||||||
|
|
|
|
|||||||||
Total non-current assets |
39,997,418 | 39,881,770 | ||||||||||
|
|
|
|
|||||||||
Total assets |
51,309,409 | |||||||||||
|
|
|
|
See accompanying notes to the condensed separate interim financial statements.
3
POSCO
Condensed Separate Interim Statements of Financial Position, Continued
As of September 30, 2016 and December 31, 2015
(Unaudited)
September 30, | December 31, | |||||||||||
(in millions of Won) | Notes | 2016 | 2015 | |||||||||
Liabilities |
||||||||||||
Trade accounts and notes payable |
20,31 | 577,856 | ||||||||||
Short-term borrowings and current installments of long-term borrowings |
4,14,20 | 488,316 | 1,985,722 | |||||||||
Other payables |
15,20,31 | 849,523 | 946,735 | |||||||||
Other short-term financial liabilities |
16,20 | 15,554 | 25,676 | |||||||||
Current income tax liabilities |
235,767 | 227,569 | ||||||||||
Provisions |
17 | 16,929 | 22,840 | |||||||||
Other current liabilities |
19 | 32,943 | 31,281 | |||||||||
|
|
|
|
|||||||||
Total current liabilities |
2,394,766 | 3,817,679 | ||||||||||
|
|
|
|
|||||||||
Long-term borrowings, excluding current installments |
14,20 | 3,649,008 | 3,303,105 | |||||||||
Other payables |
15,20 | 116,647 | 37,656 | |||||||||
Other long-term financial liabilities |
16,20 | 108,630 | 81,496 | |||||||||
Defined benefit liabilities, net |
18 | 41,202 | 10,472 | |||||||||
Deferred tax liabilities |
1,039,131 | 994,867 | ||||||||||
Long-term provisions |
17,32 | 52,389 | 21,954 | |||||||||
Other non-current liabilities |
19 | 15,831 | 16,623 | |||||||||
|
|
|
|
|||||||||
Total non-current liabilities |
5,022,838 | 4,466,173 | ||||||||||
|
|
|
|
|||||||||
Total liabilities |
7,417,604 | 8,283,852 | ||||||||||
|
|
|
|
|||||||||
Equity |
||||||||||||
Share capital |
21 | 482,403 | 482,403 | |||||||||
Capital surplus |
21,34 | 1,156,277 | 1,247,581 | |||||||||
Hybrid bonds |
22 | 996,919 | 996,919 | |||||||||
Reserves |
23 | 195,906 | (30,018 | ) | ||||||||
Treasury shares |
24 | (1,533,748 | ) | (1,533,898 | ) | |||||||
Retained earnings |
42,527,764 | 41,862,570 | ||||||||||
|
|
|
|
|||||||||
Equity |
43,825,521 | 43,025,557 | ||||||||||
|
|
|
|
|||||||||
Total liabilities and equity |
51,309,409 | |||||||||||
|
|
|
|
See accompanying notes to the condensed separate interim financial statements.
4
Condensed Separate Interim Statements of Comprehensive Income
For the three-month and nine-month periods ended September 30, 2016 and 2015
(Unaudited)
For the three-month periods | For the nine-month periods | |||||||||||||||||||
(in millions of Won, except per share information) | ended September 30 | ended September 30 | ||||||||||||||||||
Notes | 2016 | 2015 | 2016 | 2015 | ||||||||||||||||
Revenue |
31 | 6,298,801 | 17,883,260 | 19,661,927 | ||||||||||||||||
Cost of sales |
7,28,31 | (4,816,309 | ) | (5,179,880 | ) | (14,432,730 | ) | (16,399,165 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
1,290,211 | 1,118,921 | 3,450,530 | 3,262,762 | ||||||||||||||||
Selling and administrative expenses |
25,28,31 | |||||||||||||||||||
Administrative expenses |
(216,542 | ) | (218,689 | ) | (640,929 | ) | (654,469 | ) | ||||||||||||
Selling expenses |
(221,247 | ) | (262,372 | ) | (662,330 | ) | (741,218 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Operating profit |
852,422 | 637,860 | 2,147,271 | 1,867,075 | ||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Finance income and costs |
20,26 | |||||||||||||||||||
Finance income |
176,007 | 130,888 | 545,256 | 597,116 | ||||||||||||||||
Finance costs |
(169,222 | ) | (346,426 | ) | (802,333 | ) | (659,665 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Other non-operating income and expenses |
27,31 | |||||||||||||||||||
Other non-operating income |
13,412 | 364,972 | 58,170 | 438,109 | ||||||||||||||||
Other non-operating expenses |
28 | (107,216 | ) | (477,033 | ) | (226,283 | ) | (870,408 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Profit before income tax |
765,403 | 310,261 | 1,722,081 | 1,372,227 | ||||||||||||||||
Income tax expense |
29 | (186,407 | ) | 35,950 | (386,665 | ) | (315,805 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Profit |
578,996 | 346,211 | 1,335,416 | 1,056,422 | ||||||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||
Items that will not be reclassified subsequently to profit or loss: |
||||||||||||||||||||
Remeasurements of defined benefit plans, net of tax |
18 | 11,113 | (13,681 | ) | (37,530 | ) | (34,104 | ) | ||||||||||||
Items that are or may be reclassified subsequently to profit or loss: |
||||||||||||||||||||
Net changes in unrealized fair value of available-for-sale investments, net of tax |
6,20,23 | 96,579 | (165,721 | ) | 225,924 | (137,342 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total comprehensive income |
166,809 | 1,523,810 | 884,976 | |||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Basic and diluted earnings per share (in Won) |
30 | 4,224 | 16,383 | 12,898 | ||||||||||||||||
|
|
|
|
|
|
|
|
See accompanying notes to the condensed separate interim financial statements.
5
Condensed Separate Interim Statements of Changes in Equity
For the nine-month periods ended September 30, 2016 and 2015
(Unaudited)
Share | Capital | Hybrid | Treasury | Retained | ||||||||||||||||||||||||
(in millions of Won) | capital | surplus | bonds | Reserves | shares | earnings | Total | |||||||||||||||||||||
Balance as of January 1, 2015 |
1,247,616 | 996,919 | 94,043 | (1,534,458 | ) | 41,188,908 | 42,475,431 | |||||||||||||||||||||
Comprehensive income: |
||||||||||||||||||||||||||||
Profit |
| | | | | 1,056,422 | 1,056,422 | |||||||||||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||||||
Remeasurements of defined benefit plans, net of tax |
| | | | | (34,104 | ) | (34,104 | ) | |||||||||||||||||||
Net changes in unrealized fair value of available-for-sale investments, net of tax |
| | | (137,342 | ) | | | (137,342 | ) | |||||||||||||||||||
Transactions with owners of the Company, recognized directly in equity: |
||||||||||||||||||||||||||||
Year-end dividends |
| | | | | (479,958 | ) | (479,958 | ) | |||||||||||||||||||
Interim dividends |
| | | | | (159,987 | ) | (159,987 | ) | |||||||||||||||||||
Interest of hybrid bonds |
| | | | | (32,585 | ) | (32,585 | ) | |||||||||||||||||||
Disposal of treasury shares |
| 11 | | | 137 | | 148 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of September 30, 2015 |
1,247,627 | 996,919 | (43,299 | ) | (1,534,321 | ) | 41,538,696 | 42,688,025 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of January 1, 2016 |
1,247,581 | 996,919 | (30,018 | ) | (1,533,898 | ) | 41,862,570 | 43,025,557 | ||||||||||||||||||||
Comprehensive income: |
||||||||||||||||||||||||||||
Profit |
| | | | | 1,335,416 | 1,335,416 | |||||||||||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||||||
Remeasurements of defined benefit plans, net of tax |
| | | | | (37,530 | ) | (37,530 | ) | |||||||||||||||||||
Net changes in unrealized fair value of available-for-sale investments, net of tax |
| | | 225,924 | | | 225,924 | |||||||||||||||||||||
Transactions with owners of the Company, recognized directly in equity: |
||||||||||||||||||||||||||||
Year-end dividends |
| | | | | (479,974 | ) | (479,974 | ) | |||||||||||||||||||
Interim dividends |
| | | | | (119,994 | ) | (119,994 | ) | |||||||||||||||||||
Business combination |
| (91,310 | ) | | | | | (91,310 | ) | |||||||||||||||||||
Interest of hybrid bonds |
| | | | | (32,724 | ) | (32,724 | ) | |||||||||||||||||||
Disposal of treasury shares |
| 6 | | | 150 | | 156 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Balance as of September 30, 2016 |
1,156,277 | 996,919 | 195,906 | (1,533,748 | ) | 42,527,764 | 43,825,521 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the condensed separate interim financial statements.
6
Condensed Separate Interim Statements of Cash Flows
For the nine-month periods ended September 30, 2016 and 2015
(Unaudited)
(in millions of Won) | Notes | September 30, 2016 | September 30, 2015 | |||||||||
Cash flows from operating activities |
||||||||||||
Profit |
1,056,422 | |||||||||||
Adjustments for: |
||||||||||||
Costs for defined benefit plans |
83,681 | 90,511 | ||||||||||
Depreciation |
1,540,520 | 1,539,392 | ||||||||||
Amortization |
58,443 | 52,025 | ||||||||||
Finance income |
(356,799 | ) | (440,569 | ) | ||||||||
Finance costs |
575,085 | 528,686 | ||||||||||
Loss on valuation of inventories |
2,418 | 12,990 | ||||||||||
Gain on disposal of property, plant and equipment |
(17,601 | ) | (8,543 | ) | ||||||||
Loss on disposal of property, plant and equipment |
69,774 | 57,201 | ||||||||||
Impairment loss on property, plant and equipment |
34,056 | 68,720 | ||||||||||
Impairment loss on investments in subsidiaries, associates and joint ventures |
75,347 | 260,833 | ||||||||||
Gain on disposal of assets held for sale |
(6,814 | ) | (409,173 | ) | ||||||||
Loss on disposal of assets held for sale |
| 20,133 | ||||||||||
Impairment of assets held for sale |
| 95,737 | ||||||||||
Contribution to provisions |
37,202 | 2,045 | ||||||||||
Income tax expense |
386,664 | 315,805 | ||||||||||
Others |
20,620 | 3,115 | ||||||||||
Changes in operating assets and liabilities |
33 | 273,506 | 792,428 | |||||||||
Interest received |
64,776 | 59,051 | ||||||||||
Interest paid |
(135,308 | ) | (190,078 | ) | ||||||||
Dividends received |
130,053 | 493,850 | ||||||||||
Income taxes paid |
(374,114 | ) | (450,975 | ) | ||||||||
|
|
|
|
|||||||||
Net cash provided by operating activities |
3,949,606 | |||||||||||
|
|
|
|
See accompanying notes to the condensed separate interim financial statements.
7
POSCO
Condensed Separate Interim Statements of Cash Flows, Continued
For the nine-month periods ended September 30, 2016 and 2015
(Unaudited)
(in millions of Won) | Notes | September 30, 2016 | September 30, 2015 | |||||||||
Cash flows from investing activities |
||||||||||||
Proceeds from disposal of short-term financial instruments |
6,375,826 | |||||||||||
Proceeds from disposal of long-term financial instruments |
| 2 | ||||||||||
Proceeds from disposal of available-for-sale financial assets |
4,214 | 2,231 | ||||||||||
Decrease in short-term loans |
| 69,443 | ||||||||||
Decrease in long-term loans |
| 495 | ||||||||||
Proceeds from disposal of investment in subsidiaries, associates and joint ventures |
1,690 | 3,613 | ||||||||||
Proceeds from disposal of intangible assets |
2,536 | 3,147 | ||||||||||
Proceeds from disposal of assets held for sale |
166,791 | 1,275,597 | ||||||||||
Proceeds from business combination |
24,250 | | ||||||||||
Acquisition of short-term financial investments |
(13,714,796 | ) | (8,642,765 | ) | ||||||||
Acquisition of available-for-sale financial assets |
| (1,152 | ) | |||||||||
Increase in short-term loans |
(23,630 | ) | (65,208 | ) | ||||||||
Increase in long-term loans |
(66 | ) | (139 | ) | ||||||||
Acquisition of investment in subsidiaries, associates and joint ventures |
(235,431 | ) | (390,817 | ) | ||||||||
Acquisition of investment property |
| (146 | ) | |||||||||
Acquisition of property, plant and equipment |
(1,387,937 | ) | (1,090,685 | ) | ||||||||
Payment for disposal of property, plant and equipment |
(14,485 | ) | (15,977 | ) | ||||||||
Acquisition of intangible assets |
(14,482 | ) | (28,941 | ) | ||||||||
|
|
|
|
|||||||||
Net cash used in investing activities |
(2,031,563 | ) | (2,505,476 | ) | ||||||||
|
|
|
|
|||||||||
Cash flows from financing activities |
||||||||||||
Proceeds from borrowings |
985,373 | 21,067 | ||||||||||
Increase in long-term financial liabilities |
3,554 | 3,086 | ||||||||||
Repayment of borrowings |
(2,642,762 | ) | (736,697 | ) | ||||||||
Decrease in long-term financial liabilities |
(5,233 | ) | (3,486 | ) | ||||||||
Payment of cash dividends |
(600,020 | ) | (639,998 | ) | ||||||||
Payment of interest of hybrid bonds |
(32,849 | ) | (32,730 | ) | ||||||||
|
|
|
|
|||||||||
Net cash used in financing activities |
(2,291,937 | ) | (1,388,758 | ) | ||||||||
|
|
|
|
|||||||||
Changes in cash due to foreign currency translation |
(9,213 | ) | 2,419 | |||||||||
Net increase (decrease) in cash and cash equivalents |
(535,788 | ) | 57,791 | |||||||||
Cash and cash equivalents at beginning of the period |
1,634,106 | 1,742,767 | ||||||||||
|
|
|
|
|||||||||
Cash and cash equivalents at end of the period |
1,800,558 | |||||||||||
|
|
|
|
See accompanying notes to the condensed separate interim financial statements.
8
Notes to the Condensed Separate Interim Financial Statements
As of September 30, 2016
(Unaudited)
1. Reporting Entity
POSCO (the Company) is the largest steel producer in Korea which was incorporated on April 1, 1968, to manufacture and sell steel rolled products and plates in the domestic and overseas markets.
The shares of the Company have been listed on the Korea Exchange since 1988. The Company owns and operates two steel plants (Pohang and Gwangyang) and one office in Korea, and it also operates internationally through seven of its overseas liaison offices.
As of September 30, 2016, the shares of the Company are listed on the Korea Exchange, while its depository receipts are listed on the New York Stock Exchanges.
2. Statement of Compliance
Statement of compliance
The condensed separate interim financial statements have been prepared in accordance with Korean International Financial Reporting Standards (K-IFRS), as prescribed in the Act on External Audit of Corporations.
These condensed separate interim financial statements have been prepared in accordance with K-IFRS No. 1034 Interim Financial Reporting as part of the period covered by the Companys K-IFRS annual financial statements. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the last annual separate financial statements as of and for the year ended December 31, 2015. These condensed separate interim financial statements do not include all of the disclosures required for full annual financial statements.
These condensed interim financial statements are separate interim financial statements in accordance with K-IFRS No. 1027 Separate Financial Statements presented by a parent, an investor in a subsidiary, an associate or a venture in a jointly controlled entity, in which the investments are accounted for on the basis of the direct equity interest rather than on the basis of the reported results and net assets of the investees.
Use of estimates and judgments
(a) | Judgments, assumptions and estimation uncertainties |
The preparation of the condensed interim financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
9
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
In preparing these condensed separate interim financial statements, the significant judgments made by management in applying the Companys accounting policies and the key sources of estimation uncertainty were the same as those that applied to the separate financial statements as of and for the year ended December 31, 2015.
(b) | Measurement of fair value |
The Companys accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the financial officer.
The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of K-IFRS including the level in the fair value hierarchy in which such valuation techniques should be classified.
The Company reports the significant valuation matters to the Audit Committee.
When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
| Level 1 unadjusted quoted prices in active markets for identical assets or liabilities. |
| Level 2 inputs other than quoted prices included in Level 1 that are observable for the assets or liabilities, either directly or indirectly. |
| Level 3 inputs for the assets or liabilities that are not based on observable market |
data.
If the inputs used to measure the fair value of an asset or a liability might be categorized in different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair value is included in note 20.
10
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
3. Summary of Significant Accounting Policies
Except as described in K-IFRS No. 1034 Interim Financial Reporting, the accounting policies applied by the Company in these condensed separate interim financial statements are the same as those applied by the Company in its separate financial statements as of and for the year ended December 31, 2015.
4. Trade Accounts and Notes Receivable
Trade accounts and notes receivable as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Trade accounts and notes receivable |
2,749,056 | |||||||
Less: Allowance for doubtful accounts |
(29,054 | ) | (8,952 | ) | ||||
|
|
|
|
|||||
2,740,104 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Trade accounts and notes receivable |
30,034 | |||||||
Less: Present value discount |
(10,216 | ) | (7,852 | ) | ||||
Less: Allowance for doubtful accounts |
(2,286 | ) | (2,287 | ) | ||||
|
|
|
|
|||||
19,895 | ||||||||
|
|
|
|
The trade accounts and notes receivable sold to financial institutions, for which the derecognition conditions were not met,
amounted to W23,900 million as of September 30, 2016. The fair value of trade accounts and notes receivable approximates the carrying amounts and trade accounts and notes receivable are included in short-term borrowings
from financial institutions. (Note 14)
5. Other Receivables
Other receivables as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Other accounts receivable |
233,415 | |||||||
Others |
15,119 | 13,341 | ||||||
Less: Allowance for doubtful accounts |
(4,438 | ) | (325 | ) | ||||
|
|
|
|
|||||
246,431 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Long-term loans |
24,293 | |||||||
Long-term other accounts receivable |
71,807 | 66,541 | ||||||
Others |
2,806 | 2,923 | ||||||
|
|
|
|
|||||
93,757 | ||||||||
|
|
|
|
11
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
6. Other Financial Assets
(a) | Other financial assets as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Short term derivatives assets held for trading |
12,591 | |||||||
Available-for-sale securities (bonds) |
15,000 | 15,000 | ||||||
Short-term financial instruments(*1) |
3,845,458 | 3,291,828 | ||||||
Cash deposits(*2) |
7,976 | 6,593 | ||||||
|
|
|
|
|||||
3,326,012 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Long-term derivatives assets held for trading |
78,292 | |||||||
Available-for-sale securities (equity instruments) |
1,814,028 | 1,723,082 | ||||||
Available-for-sale securities (others) |
6,289 | 2,967 | ||||||
Cash deposits(*3) |
33 | 33 | ||||||
|
|
|
|
|||||
1,804,374 | ||||||||
|
|
|
|
(*1) | Short-term financial instruments amounting to |
(*2) | Deposits amounting to |
(*3) | The Company is required to provide deposits to maintain checking accounts and accordingly the withdrawal of these deposits is restricted. |
12
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(b) | Available-for-sale equity securities as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 |
||||||||||||||||||||||||||||||
Number of shares |
Ownership (%) |
Acquisition cost |
Fair value |
Net changes in fair value of available- for-sale investments |
Accumulated impairment loss |
Book value |
Book value | |||||||||||||||||||||||||
Marketable equity securities |
||||||||||||||||||||||||||||||||
Hana Financial group Inc. |
2,430,498 | 0.82 | 67,689 | 52,056 | | 67,689 | 57,359 | |||||||||||||||||||||||||
Nippon Steel & Sumitomo Metal Corporation(*1) |
23,835,200 | 2.51 | 719,622 | 531,188 | 2,821 | (191,255 | ) | 531,188 | 559,740 | |||||||||||||||||||||||
Hyundai Heavy Industries Co., Ltd. |
1,477,000 | 1.94 | 343,506 | 203,826 | 74,145 | (213,825 | ) | 203,826 | 129,681 | |||||||||||||||||||||||
Shinhan Financial group Inc. |
4,369,881 | 0.92 | 228,778 | 175,451 | 52,815 | (106,142 | ) | 175,451 | 172,829 | |||||||||||||||||||||||
KB Financial group Inc.(*1) |
11,590,550 | 3.00 | 536,517 | 438,702 | 69,543 | (167,358 | ) | 438,702 | 384,227 | |||||||||||||||||||||||
Seoul Semiconductor Co., Ltd. |
591,000 | 1.01 | 24,999 | 8,658 | 266 | (16,607 | ) | 8,658 | 9,279 | |||||||||||||||||||||||
SAMWONSTEEL Co., Ltd. |
5,700,000 | 14.25 | 8,930 | 20,976 | 18,449 | (6,403 | ) | 20,976 | 20,748 | |||||||||||||||||||||||
Others (10 companies)(*1) |
92,109 | 83,738 | 33,278 | (41,649 | ) | 83,738 | 60,617 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
1,970,094 | 1,530,228 | 303,373 | (743,239 | ) | 1,530,228 | 1,394,480 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Non-marketable equity securities |
||||||||||||||||||||||||||||||||
Congonhas Minerios S.A.(*3) |
3,658,394 | 2.02 | 221,535 | 176,465 | (45,070 | ) | | 176,465 | 221,535 | |||||||||||||||||||||||
Poongsan Special Metal Corp.(*4) |
315,790 | 5.00 | 7,657 | 7,657 | | | 7,657 | 7,657 | ||||||||||||||||||||||||
Intellectual Discovery(*2) |
1,000,000 | 8.81 | 5,000 | 1,350 | | (3,650 | ) | 1,350 | 5,000 | |||||||||||||||||||||||
Others (40 companies)(*2,4) |
239,219 | 98,328 | 150 | (141,041 | ) | 98,328 | 94,410 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
473,411 | 283,800 | (44,920 | ) | (144,691 | ) | 283,800 | 328,602 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
1,814,028 | 258,453 | (887,930 | ) | 1,814,028 | 1,723,082 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | The Company has recognized |
13
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(*2) | The Company has recognized |
(*3) | Fair value is based on an analysis performed by an external professional evaluation agency. |
(*4) | Non-marketable equity securities whose fair values cannot be reliably measured are recorded at cost. |
7. Inventories
Inventories as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Finished goods |
717,320 | |||||||
Semi-finished goods |
833,002 | 964,062 | ||||||
By-products |
3,945 | 5,983 | ||||||
Raw materials |
569,657 | 656,117 | ||||||
Fuel and materials |
567,177 | 523,796 | ||||||
Materials-in-transit |
628,552 | 574,409 | ||||||
Others |
556 | 578 | ||||||
|
|
|
|
|||||
3,313,530 | 3,442,265 | |||||||
Less: Allowance for inventories valuation |
(2,418 | ) | (15,254 | ) | ||||
|
|
|
|
|||||
3,427,011 | ||||||||
|
|
|
|
The amount of loss on valuation of inventories recognized within cost of sales during the nine-month period ended
September 30, 2016 and the year ended December 31, 2015 were W2,418 million and W15,254 million, respectively.
14
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
8. Assets Held for Sale
Assets held for sale as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Property, plant and equipment(*1) |
25,892 |
(*1) | During the year ended December 31, 2015, the Company determined to exchange 1FINEX facilities with the shares of newly established company in India, and has signed in Memorandum of Agreement (MOA) with Uttam Galva
Steels Limited in India. The Company has classified the related facilities of |
9. Investments in Subsidiaries, Associates and Joint ventures
(a) | Details of subsidiaries and carrying amounts as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 |
||||||||||||||||
Country | Principal operations |
Ownership (%) | Book value | Book value | ||||||||||||||
[Domestic] |
||||||||||||||||||
POSCO DAEWOO Corporation (formerly, Daewoo International Corporation)(*1) |
Korea | Trading | 60.31 | 3,371,481 | ||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
Korea | Engineering and construction | 52.80 | 1,014,314 | 1,014,314 | |||||||||||||
POSCO POSCO GREEN GAS TECHNOLOGY(*2) |
Korea | Gas production and sales | | | 682,600 | |||||||||||||
POSCO ENERGY CO., LTD. |
Korea | Power generation | 89.02 | 658,176 | 658,176 | |||||||||||||
POSCO Processing&Service |
Korea | Steel sales and trading | 96.01 | 624,678 | 624,678 | |||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
Korea | Coated steel manufacturing and sales |
56.87 | 108,421 | 108,421 | |||||||||||||
POSCO Capital Co., Ltd. |
Korea | Investment in venture companies |
95.00 | 103,780 | 103,780 | |||||||||||||
POSCO CHEMTECH |
Korea | Refractory manufacturing and sales | 60.00 | 100,535 | 100,535 | |||||||||||||
POSMATE |
Korea | Business facility maintenance | 57.25 | 73,374 | 73,374 | |||||||||||||
POSCO ICT |
Korea | Computer hardware and software distribution |
65.38 | 70,990 | 70,990 | |||||||||||||
POSCO M-TECH(*3) |
Korea | Packing materials manufacturing and sales |
48.85 | 53,651 | 53,651 | |||||||||||||
POSCO Family Strategy Fund |
Korea | Investment in venture companies | 69.91 | 45,273 | 45,273 | |||||||||||||
Busan E&E Co,. Ltd.(*4) |
Korea | Municipal solid waste fuel and power generation |
70.00 | 30,148 | 30,148 | |||||||||||||
Others (9 companies) |
159,755 | 162,547 | ||||||||||||||||
|
|
|
|
|||||||||||||||
7,099,968 | ||||||||||||||||||
|
|
|
|
15
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(in millions of Won) | September 30, 2016 | December 31, 2015 |
||||||||||||||||
Country | Principal operations |
Ownership (%) | Book value | Book value | ||||||||||||||
[Foreign] |
||||||||||||||||||
PT. KRAKATAU POSCO |
Indonesia | Steel manufacturing and sales | 70.00 | 813,431 | ||||||||||||||
POSCO WA PTY LTD |
Australia | Iron ore sales and mine development |
100.00 | 625,868 | 623,258 | |||||||||||||
POSCO Maharashtra Steel Private Limited |
India | Steel manufacturing and sales | 100.00 | 617,590 | 536,860 | |||||||||||||
POSCO AUSTRALIA PTY LTD |
Australia | Iron ore sales and mine development |
100.00 | 330,623 | 330,623 | |||||||||||||
Zhangjiagang Pohang Stainless Steel Co., Ltd. |
China | Stainless steel manufacturing and sales |
58.60 | 283,845 | 283,845 | |||||||||||||
POSCO Thainox Public Company Limited(*5) |
Thailand | Stainless steel manufacturing and sales |
84.93 | 246,986 | 251,812 | |||||||||||||
POSCO SS VINA Co., Ltd. |
Vietnam | Steel manufacturing and sales | 100.00 | 241,426 | 241,426 | |||||||||||||
POSCO-China Holding Corp. |
China | Investment management | 100.00 | 240,430 | 240,430 | |||||||||||||
POSCO-India Private Limited |
India | Steel manufacturing and sales | 99.99 | 184,815 | 184,815 | |||||||||||||
POSCO MEXICO S.A. DE C.V.(*7) |
Mexico | Plate steel manufacturing and sales |
84.84 | 180,072 | 180,069 | |||||||||||||
POSCO America Corporation |
USA | Steel trading | 99.45 | 187,504 | 167,285 | |||||||||||||
POSCO-VIETNAM Co., Ltd. |
Vietnam | Steel manufacturing | 100.00 | 160,572 | 160,572 | |||||||||||||
POSCO VST CO., LTD. |
Vietnam | Stainless steel manufacturing and sales |
95.65 | 144,573 | 144,573 | |||||||||||||
POSCO(Guangdong) Automotive Steel Co., Ltd. |
China | Plate steel manufacturing and sales |
83.64 | 130,751 | 130,751 | |||||||||||||
POSCO COATED STEEL (THAILAND) CO., LTD. |
Thailand | Plate steel manufacturing and sales |
100.00 | 121,592 | 121,592 | |||||||||||||
POSCO Asia Co., Ltd.(*8) |
Hong Kong | Steel and raw material trading | 100.00 | 117,710 | 32,189 | |||||||||||||
POSCO ASSAN TST STEEL INDUSTRY |
Turkey | Steel manufacturing and sales | 60.00 | 92,800 | 92,800 | |||||||||||||
POSCO Investment Co., Ltd.(*8) |
Hong Kong | Finance | | | 85,521 | |||||||||||||
POSCO JAPAN Co., Ltd. |
Japan | Steel trading | 100.00 | 68,436 | 68,436 | |||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
China | Stainless steel manufacturing | 70.00 | 65,982 | 65,982 | |||||||||||||
POSCO(Suzhou) Automotive Processing Center Co., Ltd. |
China | Steel manufacturing and sales | 90.00 | 62,494 | 62,494 | |||||||||||||
POSCO Electrical Steel India Private Limited |
India | Electrical steel processing and sales |
100.00 | 57,119 | 57,119 | |||||||||||||
POSCO AFRICA (PROPRIETARY) LIMITED |
South Africa | Trading | 100.00 | 50,297 | 50,297 | |||||||||||||
POSCO-Malaysia SDN. BHD. |
Malaysia | Steel manufacturing and sales | 81.79 | 45,479 | 45,479 | |||||||||||||
POSCO China Dalian Plate Processing Center Co., Ltd.(*6) |
China | Heavy plate processing and sales | 80.00 | | 32,992 | |||||||||||||
POSCO(Guangdong) Coated Steel Co., Ltd. |
China | Plate steel sheet manufacturing and sales |
87.04 | 31,299 | 31,299 | |||||||||||||
Others (32 companies)(*6,7) |
390,215 | 366,124 | ||||||||||||||||
|
|
|
|
|||||||||||||||
5,491,909 | 5,402,074 | |||||||||||||||||
|
|
|
|
|||||||||||||||
12,502,042 | ||||||||||||||||||
|
|
|
|
(*1) | Daewoo International Corporation was renamed POSCO DAEWOO Corporation. |
(*2) | The Company merged with POSCO Green Gas Technology on the acquisition date of May 1, 2016. (Note 34) |
16
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(*3) | POSCO M-TECH was classified as an investment in a subsidiary as the Company has more than half of the voting rights by virtue of an agreement with Pohang University of Science and Technology, which has 4.72% of ownership in POSCO M-TECH. |
(*4) | As of September 30, 2016, and December 31, 2015 the investments in subsidiaries amounting to |
(*5) | As of September 30, 2016, there is objective evidence of impairment due to the prolonged decline in the fair value of POSCO Thainox Public Company Limited below its cost. Recoverable amount was determined based on
fair value less cost to sell, which was calculated by adding 10.9% of management premium and expected disposal cost on the stock price as of September 30, 2016. As a result, the Company recognized an impairment loss of |
(*6) | As of September 30, 2016, there is objective evidence of impairment due to the decision to cease operation of POSCO China Dalian Plate Processing Center Co., Ltd and POSCO-China Dalian Steel Fabricating Center. As
a result, the Company recognized an impairment loss of |
(*7) | During the period ended September 30, 2016, POSCO MEXICO S.A. DE C.V. merged with POSCO MEXICO HUMAN TECH S.A de C.V |
(*8) | During the period ended September 30, 2016, POSCO Asia Co., Ltd. merged with POSCO Investment Co., Ltd. |
(b) | Details of associates and carrying amounts as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 |
||||||||||||||||
Country | Principal operations |
Ownership (%) | Book value | Book value | ||||||||||||||
[Domestic] |
||||||||||||||||||
EQP POSCO Global NO1 Natural Resources PEF |
Korea | Mine investment |
27.40 | 169,106 | ||||||||||||||
SeAH Changwon Integrated Special Steel(*1) |
Korea | Specialty steel manufacturing and sales |
19.94 | | 159,978 | |||||||||||||
POSCO PLANTEC Co., Ltd.(*2) |
Korea | Other structural metal product manufacturing |
60.84 | 108,936 | 140,890 | |||||||||||||
SNNC |
Korea | STS material manufacturing and sales |
49.00 | 100,655 | 100,655 | |||||||||||||
Others (5 companies) |
26,932 | 23,746 | ||||||||||||||||
|
|
|
|
|||||||||||||||
405,839 | 594,375 | |||||||||||||||||
|
|
|
|
|||||||||||||||
[Foreign] |
||||||||||||||||||
Nickel Mining Company SAS |
New Caledonia | Raw material manufacturing and sales |
49.00 | 189,197 | 189,197 | |||||||||||||
7623704 Canada Inc.(*3) |
Canada | Mine investment |
10.40 | 124,341 | 124,341 | |||||||||||||
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd |
China | Tinplate manufacturing and sales |
24.00 | 11,003 | 11,003 | |||||||||||||
Others (5 companies) |
38,397 | 29,090 | ||||||||||||||||
|
|
|
|
|||||||||||||||
362,938 | 353,631 | |||||||||||||||||
|
|
|
|
|||||||||||||||
948,006 | ||||||||||||||||||
|
|
|
|
(*1) | During the period ended September 30, 2016, the Company disposed of its shares in SeAH Changwon Integrated Special Steel and recognized |
(*2) | During the nine-month period ended September 30, 2016, there was objective evidence of impairment due to the prolonged decline at fair value of POSCO PLANTEC Co., Ltd, and, accordingly, the impairment test was
performed. Recoverable amount was determined based on value-in-use, which was calculated by applying 7.4% discount rate. As a result, the Company recognized an impairment loss of |
(*3) | As of September 30, 2016, it was classified as an associate even though the Companys ownership percentage is less than 20% of ownership since the Company has significant influence over the investee when considering its structure of the Board of Directors and others. |
17
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(c) | Details of joint ventures and carrying amounts as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 |
||||||||||||||||
Country | Principal operations |
Ownership (%) | Book value | Book value | ||||||||||||||
Roy Hill Holdings Pty Ltd(*1) |
Australia | Mine development |
10.00 | 1,225,464 | ||||||||||||||
CSP - Compania Siderurgica do Pecem |
Brazil | Steel manufacturing and sales |
20.00 | 575,948 | 488,200 | |||||||||||||
POSCO-NPS Niobium LLC |
USA | Mine development |
50.00 | 364,609 | 364,609 | |||||||||||||
KOBRASCO |
Brazil | Facilities lease |
50.00 | 98,962 | 98,962 | |||||||||||||
Others (4 companies) |
110,004 | 110,004 | ||||||||||||||||
|
|
|
|
|||||||||||||||
2,287,239 | ||||||||||||||||||
|
|
|
|
(*1) | As of September 30, 2016 and December 31, 2015, the investments in joint ventures amounting to |
10. Investment Property, Net
Changes in the carrying amount of investment property for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows:
(a) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Beginning | Depreciation(*1) | Transfer(*2) | Ending | ||||||||||||
Land |
| 2,478 | 38,035 | |||||||||||||
Buildings |
47,399 | (2,145 | ) | 6,704 | 51,958 | |||||||||||
Structures |
3,796 | (184 | ) | 2,528 | 6,140 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
(2,329 | ) | 11,710 | 96,133 | |||||||||||||
|
|
|
|
|
|
|
|
(*1) | The useful life and depreciation method of investment property are identical to those of property, plant and equipment. |
(*2) | Mainly includes assets transferred from property, plant and equipment in relation to change in rental ratio and the purpose of use. |
(b) | For the year ended December 31, 2015 |
(in millions of Won) | Beginning | Acquisitions | Depreciation(*1) | Transfer(*2) | Ending | |||||||||||||||
Land |
| | (463 | ) | 35,557 | |||||||||||||||
Buildings |
50,112 | 346 | (2,382 | ) | (677 | ) | 47,399 | |||||||||||||
Structures |
4,005 | | (164 | ) | (45 | ) | 3,796 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
346 | (2,546 | ) | (1,185 | ) | 86,752 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(*1) | The useful life and depreciation method of investment property are identical to those of property, plant and equipment. |
(*2) | Mainly includes assets transferred from property, plant and equipment in relation to change in rental ratio and the purpose of use. |
18
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
11. Property, Plant and Equipment, Net
Changes in the carrying amount of property, plant and equipment for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows:
(a) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Beginning | Acquisitions | Business combination |
Disposals | Depreciation | Impairment(*1) | Others(*2) | Ending | ||||||||||||||||||||||||
Land |
52 | 10,273 | (206 | ) | | | 45,061 | 1,467,895 | ||||||||||||||||||||||||
Buildings |
2,566,168 | 869 | 70,641 | (1,761 | ) | (173,436 | ) | (351 | ) | 29,745 | 2,491,875 | |||||||||||||||||||||
Structures |
2,519,866 | 1,312 | 8,630 | (916 | ) | (141,971 | ) | (268 | ) | 94,573 | 2,481,226 | |||||||||||||||||||||
Machinery and equipment |
14,014,079 | 32,489 | 146,466 | (15,037 | ) | (1,199,703 | ) | (33,425 | ) | 790,450 | 13,735,319 | |||||||||||||||||||||
Vehicles |
11,623 | 1,984 | 39 | (11 | ) | (5,462 | ) | | 4,286 | 12,459 | ||||||||||||||||||||||
Tools |
23,720 | 917 | 289 | | (7,784 | ) | | 2,800 | 19,942 | |||||||||||||||||||||||
Furniture and fixtures |
31,820 | 2,303 | 237 | (21 | ) | (6,805 | ) | (12 | ) | 2,890 | 30,412 | |||||||||||||||||||||
Finance lease assets |
5,733 | 76,581 | | | (3,030 | ) | | | 79,284 | |||||||||||||||||||||||
Construction-in-progress |
928,426 | 1,025,155 | 1,031,906 | | | | (1,019,028 | ) | 1,966,459 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
1,141,662 | 1,268,481 | (17,952 | ) | (1,538,191 | ) | (34,056 | ) | (49,223 | ) | 22,284,871 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | The Company has recognized an impairment loss since recoverable amounts on production facilities of automotive steel and electric furnace of high mill (2nd) are less than their carrying amounts for the nine-month period ended September 30, 2016. |
(*2) | Includes assets transferred from construction-in-progress, reclassification of investment property, intangible assets, assets held-for-sale and others. |
(b) | For the year ended December 31, 2015 |
(in millions of Won) | Beginning | Acquisitions | Disposals | Depreciation | Impairment(*1) | Others(*2) | Ending | |||||||||||||||||||||
Land |
| (3,869 | ) | | | (4,410 | ) | 1,412,715 | ||||||||||||||||||||
Buildings |
2,760,842 | 3,350 | (4,544 | ) | (243,678 | ) | (7,926 | ) | 58,124 | 2,566,168 | ||||||||||||||||||
Structures |
2,612,553 | 4,339 | (2,826 | ) | (192,301 | ) | (473 | ) | 98,574 | 2,519,866 | ||||||||||||||||||
Machinery and equipment |
14,503,266 | 76,768 | (45,843 | ) | (1,593,413 | ) | (59,485 | ) | 1,132,786 | 14,014,079 | ||||||||||||||||||
Vehicles |
12,953 | 1,669 | | (6,302 | ) | | 3,303 | 11,623 | ||||||||||||||||||||
Tools |
23,324 | 6,824 | (15 | ) | (11,091 | ) | | 4,678 | 23,720 | |||||||||||||||||||
Furniture and fixtures |
37,584 | 3,934 | (23 | ) | (15,553 | ) | (18 | ) | 5,896 | 31,820 | ||||||||||||||||||
Finance lease assets |
6,370 | | | (637 | ) | | | 5,733 | ||||||||||||||||||||
Construction-in-progress |
945,329 | 1,436,840 | | | (2,772 | ) | (1,450,971 | ) | 928,426 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1,533,724 | (57,120 | ) | (2,062,975 | ) | (70,674 | ) | (152,020 | ) | 21,514,150 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | The Company has recognized an impairment loss since recoverable amounts on magnesium smelting plant in Gangneung and facilities which are related to the project for replacement deteriorated hot-rolling mill (1st and 2nd) in Pohang and electric furnace of high mill (1st) in Pohang are less than their carrying amounts for the year ended December 31, 2015. |
(*2) | Includes assets transferred from construction-in-progress, reclassification of investment property, intangible assets, assets held-for-sale and others. |
19
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
12. Intangible Assets, Net
Changes in the carrying amount of intangible assets for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows:
(a) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Beginning | Acquisitions | Business combination |
Disposals | Amortization | Impairment(*2) | Transfer(*3) | Ending | ||||||||||||||||||||||||
Intellectual property rights |
| | (752 | ) | (2,596 | ) | | 4,419 | 21,068 | |||||||||||||||||||||||
Membership(*1) |
52,058 | | | (2,108 | ) | | 407 | (1,669 | ) | 48,688 | ||||||||||||||||||||||
Development expense |
98,038 | 316 | 23,033 | | (39,615 | ) | | 26,706 | 108,478 | |||||||||||||||||||||||
Port facilities usage rights |
265,575 | | | | (11,482 | ) | | 7,033 | 261,126 | |||||||||||||||||||||||
Construction-in-progress |
31,951 | 19,802 | | | | | (30,947 | ) | 20,806 | |||||||||||||||||||||||
Other intangible assets |
23,143 | 2,671 | 235 | (488 | ) | (4,750 | ) | | 4,621 | 25,432 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
22,789 | 23,268 | (3,348 | ) | (58,443 | ) | 407 | 10,163 | 485,598 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Economic useful life of memberships is indefinite. |
(*2) | The Company has recognized an impairment loss on some membership since the recoverable amounts were less than carrying amounts. Also, the Company reversed the accumulated impairment loss up to the carrying amount before recognition of any impairment loss since recoverable amounts of some memberships exceeded the carrying amounts. |
(*3) | Includes assets transferred from construction-in-progress, reclassification of property, plant and equipment, and others. |
(b) | For the year ended December 31, 2015 |
(in millions of Won) | Beginning | Acquisitions | Disposals | Amortization | Impairment(*2) | Transfer(*3) | Ending | |||||||||||||||||||||
Intellectual property rights |
| (126 | ) | (2,829 | ) | | 5,358 | 19,997 | ||||||||||||||||||||
Membership(*1) |
53,154 | 2,861 | (3,680 | ) | | (11 | ) | (266 | ) | 52,058 | ||||||||||||||||||
Development expense |
127,941 | 1,172 | | (48,154 | ) | | 17,079 | 98,038 | ||||||||||||||||||||
Port facilities usage rights |
162,028 | | | (12,006 | ) | | 115,553 | 265,575 | ||||||||||||||||||||
Construction-in-progress |
16,756 | 36,863 | | | | (21,668 | ) | 31,951 | ||||||||||||||||||||
Other intangible assets |
26,434 | 2,422 | | (7,753 | ) | | 2,040 | 23,143 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
43,318 | (3,806 | ) | (70,742 | ) | (11 | ) | 118,096 | 490,762 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Economic useful life of membership is indefinite. |
(*2) | The Company has recognized an impairment loss on some membership since the recoverable amounts were less than carrying amounts. |
(*3) | Includes assets transferred from construction-in-progress, reclassification of property, plant and equipment, and others. |
20
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
13. Other Assets
Other assets as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Advance payments |
7,912 | |||||||
Prepaid expenses |
39,398 | 19,722 | ||||||
Others |
| 449 | ||||||
|
|
|
|
|||||
28,083 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Long-term prepaid expenses |
6,215 | |||||||
Others(*1) |
119,422 | 128,578 | ||||||
|
|
|
|
|||||
134,793 | ||||||||
|
|
|
|
(*1) | As of September 30, 2016 and December 31, 2015, the Company recognized tax assets amounting to |
14. Borrowings
(a) | Borrowings as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Short-term borrowings |
||||||||
Short-term borrowings |
| |||||||
Current portion of long-term borrowings |
32,361 | 126,579 | ||||||
Current portion of loans from foreign financial institutions |
193 | 401 | ||||||
Current portion of debentures |
231,908 | 1,859,610 | ||||||
Less: Current portion of discount on debentures issued |
(46 | ) | (868 | ) | ||||
|
|
|
|
|||||
1,985,722 | ||||||||
|
|
|
|
|||||
Long-term borrowings |
||||||||
Long-term borrowings |
141,868 | |||||||
Loans from foreign financial institutions |
| 200 | ||||||
Debentures |
3,630,844 | 3,175,406 | ||||||
Less: Discount on debentures issued |
(13,237 | ) | (14,369 | ) | ||||
|
|
|
|
|||||
3,303,105 | ||||||||
|
|
|
|
21
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(b) | Short-term borrowings as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | ||||||||||||||||||||||
Lenders |
Lenders |
Insurance date |
Maturity date |
Annual interest rate (%) |
September 30, 2016 | December 31, 2015 | ||||||||||||||||
Short-term borrowings |
Korea Development Bank | 2016.04.08 | 2017.04.10 | 2.00 | | |||||||||||||||||
Transfers of account receivables that do not qualify for derecognition |
| | | | 23,900 | | ||||||||||||||||
|
|
|||||||||||||||||||||
| ||||||||||||||||||||||
|
|
(c) | Current portion of long-term borrowings as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | Lenders |
Issuance date |
Maturity date |
Annual interest rate (%) |
September 30, 2016 | December 31, 2015 | ||||||||||||||||
Borrowings |
Woori Bank and others |
|
2006.10.31~ 2011.04.28 |
|
|
2017.03.15~ 2024.06.15 |
|
0.75 ~ 1.75 | 15,532 | |||||||||||||
Borrowings |
Export-Import Bank of Korea |
2010.02.18 | 2017.02.18 | 4.50 | 18,870 | 111,047 | ||||||||||||||||
Loans from foreign financial institutions(*1) |
NATIXIS |
1986.03.31 | 2017.03.31 | 2.00 | 193 | 401 | ||||||||||||||||
Debentures |
| | | | | 1,299,507 | ||||||||||||||||
Debentures |
Samurai Bond 12 and others |
|
2011.10.20~ 2013.12.11 |
|
|
2016.10.20~ 2016.12.08 |
|
0.93 ~ 2.03 | 231,862 | 559,235 | ||||||||||||
|
|
|
|
|||||||||||||||||||
1,985,722 | ||||||||||||||||||||||
|
|
|
|
(*1) | Korea Development Bank has provided guarantees to the Company for loans from foreign financial institutions. |
(d) | Long-term borrowings excluding current portion, as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | Lenders |
Issuance date |
Maturity date |
Annual interest rate (%) |
September 30, 2016 | December 31, 2015 | ||||||||||||||||
Borrowings |
Woori Bank and others |
|
2006.10.31~ 2011.04.28 |
|
|
2018.03.15~ 2024.06.15 |
|
0.75~1.75 | 36,522 | |||||||||||||
Borrowings |
Korea National Oil Corporation |
|
2007.12.27~ 2009.12.29 |
|
|
2022.06.25~ 2024.12.29 |
|
|
3 year Government bond |
|
4,487 | 105,346 | ||||||||||
Loans from foreign financial institutions |
|
| | | | 200 | ||||||||||||||||
Debentures |
Domestic debentures 304-1 and others |
|
2011.11.28~ 2016.05.03 |
|
|
2018.10.04~ 2023.10.04 |
|
1.76~4.12 | 1,496,785 | 997,745 | ||||||||||||
Debentures |
Samurai Bond 13 and others |
|
2010.10.28~ 2013.12.11 |
|
|
2018.12.10~ 2021.12.22 |
|
1.35~5.25 | 2,120,822 | 2,163,292 | ||||||||||||
|
|
|
|
|||||||||||||||||||
3,303,105 | ||||||||||||||||||||||
|
|
|
|
22
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
15. Other Payables
Other payables as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Accounts payable |
546,884 | |||||||
Accrued expenses |
379,933 | 380,383 | ||||||
Dividend payable |
9,704 | 9,882 | ||||||
Finance lease liabilities |
5,309 | 1,349 | ||||||
Withholdings |
8,746 | 8,237 | ||||||
|
|
|
|
|||||
946,735 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Long-term accounts payable |
| |||||||
Long-term accrued expenses |
33,628 | 26,250 | ||||||
Finance lease liabilities |
73,001 | 2,889 | ||||||
Long-term withholdings |
8,513 | 8,517 | ||||||
|
|
|
|
|||||
37,656 | ||||||||
|
|
|
|
16. Other Financial Liabilities
Other financial liabilities as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Derivative liabilities |
8,118 | |||||||
Financial guarantee liabilities |
15,554 | 17,558 | ||||||
|
|
|
|
|||||
25,676 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Derivative liabilities |
| |||||||
Financial guarantee liabilities |
69,614 | 81,496 | ||||||
|
|
|
|
|||||
81,496 | ||||||||
|
|
|
|
23
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
17. Provisions
(a) | Provisions as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||||||||||
Current | Non-current | Current | Non-current | |||||||||||||
Provision for bonus payments(*1) |
| 7,271 | | |||||||||||||
Provision for restoration(*2) |
15,863 | 49,926 | 15,569 | 21,543 | ||||||||||||
Provision for litigation(*3) |
| 2,463 | | 411 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
52,389 | 22,840 | 21,954 | ||||||||||||||
|
|
|
|
|
|
|
|
(*1) | Represents the provision for bonuses limited to 100% of annual salaries for executives. |
(*2) | Due to contamination of land near the Companys magnesium smelting plant located in Gangneung province and gas treatment plant located in Pohang work, the Company recognized present values of estimated costs for recovery as provisions for restoration as of September 30, 2016. In order to determine the estimated costs, the Company used the assumption that it would use all of technologies and materials available for now to recover the land. In addition, the Company has applied discount rates of 2.01% and 1.65% to assess present value of these costs for recovery of land in Gangneung province and Pohang work, respectively. |
(*3) | The Company has recognized provisions for certain litigations as of September 30, 2016. |
(b) | Changes in provisions for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows: |
1) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Beginning | Increase | Utilization | Ending | ||||||||||||
Provision for bonus payments |
5,375 | (11,580 | ) | 1,066 | ||||||||||||
Provision for restoration |
37,112 | 35,150 | (6,473 | ) | 65,789 | |||||||||||
Provision for litigation |
411 | 2,052 | | 2,463 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
42,577 | (18,053 | ) | 69,318 | |||||||||||||
|
|
|
|
|
|
|
|
2) | For the year ended December 31, 2015 |
(in millions of Won) | Beginning | Increase | Utilization | Ending | ||||||||||||
Provision for bonus payments |
13,233 | (14,385 | ) | 7,271 | ||||||||||||
Provision for restoration |
70,399 | 2,174 | (35,461 | ) | 37,112 | |||||||||||
Provision for litigation |
411 | | | 411 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
15,407 | (49,846 | ) | 44,794 | |||||||||||||
|
|
|
|
|
|
|
|
24
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
18. Employee Benefits
(a) | Defined contribution plans |
The expense related to post-employment benefit plans under defined contribution plans for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | For the three-month periods | For the nine-month periods | ||||||||||||||
ended September 30 | ended September 30 | |||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Expense related to post-employment benefit plans under defined contribution plans |
4,888 | 16,369 | 15,406 |
(b) | Defined benefit plans |
1) | The amount recognized in relation to net defined benefit liabilities in the statement of financial position as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Present value of funded obligations |
1,023,071 | |||||||
Fair value of plan assets |
(1,064,129 | ) | (1,012,599 | ) | ||||
|
|
|
|
|||||
Net defined benefit liabilities |
10,472 | |||||||
|
|
|
|
2) | Changes in present value of defined benefit obligations for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Defined benefit obligation at the beginning of period |
1,017,164 | |||||||
Current service costs |
85,274 | 118,770 | ||||||
Interest costs |
18,102 | 29,743 | ||||||
Remeasurement |
44,844 | (58,397 | ) | |||||
Transfer-in |
| 283 | ||||||
Business combination |
1,133 | | ||||||
Benefits paid |
(67,093 | ) | (84,492 | ) | ||||
|
|
|
|
|||||
Defined benefit obligation at the end of period |
1,023,071 | |||||||
|
|
|
|
25
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
3) | Changes in the fair value of plan assets for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Fair value of plan assets at the beginning of period |
931,006 | |||||||
Interest on plan assets |
19,695 | 29,330 | ||||||
Remeasurement of plan assets |
(4,668 | ) | (7,064 | ) | ||||
Contributions to plan assets |
95,049 | 128,000 | ||||||
Transfer-in |
| 283 | ||||||
Business combination |
244 | | ||||||
Benefits paid |
(58,790 | ) | (68,956 | ) | ||||
|
|
|
|
|||||
Fair value of plan assets at the end of period |
1,012,599 | |||||||
|
|
|
|
4) | The amounts recognized in the statements of comprehensive income for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows: |
For the three-month periods | For the nine-month periods | |||||||||||||||
(in millions of Won) | ended September 30 | ended September 30 | ||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Current service costs |
28,528 | 85,274 | 90,201 | |||||||||||||
Net interest costs |
(531 | ) | 104 | (1,593 | ) | 310 | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
28,632 | 83,681 | 90,511 | ||||||||||||||
|
|
|
|
|
|
|
|
19. Other Liabilities
Other liabilities as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Advances received |
8,811 | |||||||
Withholding |
25,334 | 20,847 | ||||||
Unearned revenue |
1,648 | 1,623 | ||||||
|
|
|
|
|||||
31,281 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Unearned revenue |
16,623 |
26
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
20. Financial Instruments
(a) | Classification of financial instruments |
1) | Financial assets as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Financial assets at fair value through profit or loss Derivatives assets |
90,883 | |||||||
Available-for-sale financial assets |
1,835,317 | 1,741,049 | ||||||
Loans and receivables |
7,888,118 | 7,954,222 | ||||||
|
|
|
|
|||||
9,786,154 | ||||||||
|
|
|
|
2) | Financial liabilities as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Financial liabilities at fair value through profit or loss Derivatives liabilities |
8,118 | |||||||
|
|
|
|
|||||
Financial liabilities measured at amortized cost |
||||||||
Trade accounts and notes payable |
755,734 | 577,856 | ||||||
Borrowings |
4,137,324 | 5,288,827 | ||||||
Financial guarantee liabilities(*1) |
85,168 | 99,054 | ||||||
Others |
860,121 | 978,648 | ||||||
|
|
|
|
|||||
5,838,347 | 6,944,385 | |||||||
|
|
|
|
|||||
6,952,503 | ||||||||
|
|
|
|
27
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(*1) | Financial liabilities were recognized in connection with financial guarantee contracts as of September 30, 2016. The details of the amount of guarantees provided are as follows: |
(in millions of Won) | Guarantee limit |
Guarantee amount |
||||||||||||||||||||
Guarantee beneficiary |
Financial institution |
Foreign currency |
Won equivalent | Foreign currency |
Won equivalent | |||||||||||||||||
POSCO(Guangdong) |
SMBC | USD | 35,000,000 | 38,371 | USD | 35,000,000 | 38,371 | |||||||||||||||
Automotive Steel Co., Ltd. |
BOA | USD | 30,000,000 | 32,889 | USD | 30,000,000 | 32,889 | |||||||||||||||
Zhangjiagang Pohang |
Korea Development Bank | CNY | 324,455,000 | 53,201 | CNY | 324,455,000 | 53,201 | |||||||||||||||
Stainless Steel Co., Ltd. |
Credit Agricole | CNY | 305,000,000 | 50,011 | CNY | 305,000,000 | 50,011 | |||||||||||||||
BTMU | CNY | 260,500,000 | 42,714 | CNY | 260,500,000 | 42,714 | ||||||||||||||||
SMBC | CNY | 195,000,000 | 31,974 | CNY | 195,000,000 | 31,974 | ||||||||||||||||
POSCO Maharashtra |
Export-Import Bank of Korea | USD | 193,000,000 | 211,586 | USD | 149,200,000 | 163,568 | |||||||||||||||
Steel Private Limited |
HSBC | USD | 110,000,000 | 120,593 | USD | 76,000,000 | 83,319 | |||||||||||||||
DBS | USD | 100,000,000 | 109,630 | USD | 80,000,000 | 87,704 | ||||||||||||||||
SCB | USD | 73,069,000 | 80,106 | USD | 42,455,200 | 46,544 | ||||||||||||||||
Citi | USD | 60,000,000 | 65,778 | USD | 36,000,000 | 39,467 | ||||||||||||||||
ING | USD | 30,000,000 | 32,889 | USD | 12,000,000 | 13,156 | ||||||||||||||||
POSCO ASSAN TST |
SMBC | USD | 62,527,500 | 68,549 | USD | 56,274,750 | 61,694 | |||||||||||||||
STEEL INDUSTRY |
ING | USD | 60,000,000 | 65,778 | USD | 54,000,000 | 59,200 | |||||||||||||||
BNP | USD | 24,000,000 | 26,311 | USD | 21,600,000 | 23,680 | ||||||||||||||||
POSCO Electrical Steel |
ING | USD | 50,000,000 | 54,815 | USD | 50,000,000 | 54,815 | |||||||||||||||
India Private Limited |
SCB | USD | 33,784,000 | 37,037 | USD | 33,784,000 | 37,037 | |||||||||||||||
POSCO Asia Co., Ltd. |
HSBC | USD | 50,000,000 | 54,815 | USD | 50,000,000 | 54,815 | |||||||||||||||
MIZUHO | USD | 50,000,000 | 54,815 | USD | 50,000,000 | 54,815 | ||||||||||||||||
NAB | USD | 50,000,000 | 54,815 | USD | 50,000,000 | 54,815 | ||||||||||||||||
POSCO MEXICO S.A. DE C.V |
SMBC | USD | 89,725,000 | 98,366 | USD | 60,114,323 | 65,903 | |||||||||||||||
Korea Development Bank | USD | 50,000,000 | 54,815 | USD | 20,226,916 | 22,175 | ||||||||||||||||
MIZUHO | USD | 45,000,000 | 49,334 | USD | 18,203,004 | 19,956 | ||||||||||||||||
BOA | USD | 70,000,000 | 76,741 | USD | 46,180,757 | 50,628 | ||||||||||||||||
CITI BANAMEX | USD | 40,000,000 | 43,852 | USD | 40,000,000 | 43,852 | ||||||||||||||||
BTMU | USD | 30,000,000 | 32,889 | USD | 30,000,000 | 32,889 | ||||||||||||||||
ING | USD | 20,000,000 | 21,926 | USD | 20,000,000 | 21,926 | ||||||||||||||||
POSCO SS VINA Co., Ltd. |
Export-Import Bank of Korea | USD | 249,951,050 | 274,021 | USD | 249,951,050 | 274,021 | |||||||||||||||
BOA | USD | 40,000,000 | 43,852 | USD | 40,000,000 | 43,852 | ||||||||||||||||
BTMU | USD | 40,000,000 | 43,852 | USD | 40,000,000 | 43,852 | ||||||||||||||||
DBS | USD | 24,400,000 | 26,750 | USD | 24,400,000 | 26,750 | ||||||||||||||||
POSCO-VIETNAM Co., Ltd. |
Export-Import Bank of Korea | USD | 196,000,000 | 214,875 | USD | 196,000,000 | 214,875 | |||||||||||||||
POSCO VST CO., LTD. |
ANZ | USD | 25,000,000 | 27,408 | USD | 9,375,000 | 10,278 | |||||||||||||||
HSBC | USD | 20,000,000 | 21,926 | USD | 7,500,000 | 8,222 | ||||||||||||||||
MIZUHO | USD | 20,000,000 | 21,926 | USD | 7,500,000 | 8,222 | ||||||||||||||||
PT. KRAKATAU POSCO |
Export-Import Bank of Korea | USD | 567,000,000 | 621,602 | USD | 515,176,565 | 564,788 | |||||||||||||||
SMBC | USD | 140,000,000 | 153,482 | USD | 127,393,609 | 139,662 | ||||||||||||||||
BTMU | USD | 119,000,000 | 130,460 | USD | 106,582,609 | 116,847 | ||||||||||||||||
SCB | USD | 107,800,000 | 118,181 | USD | 98,553,609 | 108,044 | ||||||||||||||||
MIZUHO | USD | 105,000,000 | 115,112 | USD | 94,043,478 | 103,100 | ||||||||||||||||
Credit Suisse AG | USD | 91,000,000 | 99,763 | USD | 81,504,348 | 89,353 | ||||||||||||||||
HSBC | USD | 91,000,000 | 99,763 | USD | 81,504,348 | 89,353 | ||||||||||||||||
ANZ | USD | 73,500,000 | 80,578 | USD | 67,832,738 | 74,365 | ||||||||||||||||
BOA | USD | 35,000,000 | 38,371 | USD | 31,347,826 | 34,367 | ||||||||||||||||
The Tokyo Star Bank, Ltd | USD | 21,000,000 | 23,022 | USD | 18,808,695 | 20,620 | ||||||||||||||||
POSCO COATED STEEL (THAILAND) CO., LTD. |
The Great & Co. | THB | 5,501,000,000 | 173,997 | THB | 5,501,000,000 | 173,997 | |||||||||||||||
LLP POSUK Titanium |
KB Bank | USD | 15,000,000 | 16,445 | USD | 15,000,000 | 16,445 | |||||||||||||||
CSP - Compania |
Export-Import Bank of Korea | USD | 182,000,000 | 199,527 | USD | 179,186,625 | 196,442 | |||||||||||||||
Siderurgica do Pecem |
Santander | USD | 47,600,000 | 52,184 | USD | 46,846,063 | 51,357 | |||||||||||||||
BNP | USD | 47,600,000 | 52,184 | USD | 46,846,063 | 51,357 | ||||||||||||||||
MIZUHO | USD | 47,600,000 | 52,184 | USD | 46,846,063 | 51,357 | ||||||||||||||||
Credit Agricole | USD | 20,000,000 | 21,926 | USD | 19,683,202 | 21,579 | ||||||||||||||||
SOCIETE GENERALE | USD | 20,000,000 | 21,926 | USD | 19,683,202 | 21,579 | ||||||||||||||||
KfW | USD | 20,000,000 | 21,926 | USD | 19,683,202 | 21,579 | ||||||||||||||||
BBVA Seoul | USD | 17,600,000 | 19,295 | USD | 17,321,260 | 18,989 | ||||||||||||||||
ING | USD | 17,600,000 | 19,295 | USD | 17,321,260 | 18,989 | ||||||||||||||||
BNDES | BRL | 464,060,000 | 156,124 | BRL | 348,349,782 | 117,195 | ||||||||||||||||
|
|
|
|
|
|
|||||||||||||||||
USD |
3,756,756,550 | 4,118,536 | USD | 3,286,929,765 | 3,603,462 | |||||||||||||||||
CNY |
1,084,955,000 | 177,900 | CNY | 1,084,955,000 | 177,900 | |||||||||||||||||
THB |
5,501,000,000 | 173,997 | THB | 5,501,000,000 | 173,997 | |||||||||||||||||
BRL |
464,060,000 | 156,124 | BRL | 348,349,782 | 117,195 | |||||||||||||||||
|
|
|
|
|
|
28
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
3) | Finance income and costs by category of financial instrument for the nine-month periods ended September 30, 2016 and 2015 were as follows: |
① | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Finance income and costs |
Other comprehensive |
||||||||||||||||||||||||||||||
Interest income (expense) |
Dividend income(*1) |
Gain and loss on foreign currency |
Gain and loss on disposal |
Impairment loss |
Others | Total | ||||||||||||||||||||||||||
Financial assets at fair value through profit or loss |
| | (16,917 | ) | | (60,843 | ) | (77,760 | ) | | ||||||||||||||||||||||
Available-for-sale financial assets |
225 | 26,574 | | 1,346 | (221,561 | ) | | (193,416 | ) | 225,924 | ||||||||||||||||||||||
Loans and receivables |
68,285 | | (105,585 | ) | | | (526 | ) | (37,826 | ) | | |||||||||||||||||||||
Financial liabilities at fair value through profit or loss |
| | | | | (30,898 | ) | (30,898 | ) | | ||||||||||||||||||||||
Financial liabilities at amortized cost |
(114,874 | ) | | 73,929 | | | 6,341 | (34,604 | ) | | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
26,574 | (31,656 | ) | (15,571 | ) | (221,561 | ) | (85,926 | ) | (374,504 | ) | 225,924 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Finance income in the statement of comprehensive income includes the dividends from subsidiaries, associates and joint ventures of |
② | For the nine-month period ended September 30, 2015 |
(in millions of Won) | Finance income and costs |
Other comprehensive |
||||||||||||||||||||||||||||||
Interest income (expense) |
Dividend income(*1) |
Gain and loss on foreign currency |
Gain and loss on disposal |
Impairment loss |
Others | Total | ||||||||||||||||||||||||||
Financial assets at fair value through profit or loss |
| | (438 | ) | | 7,733 | 7,295 | | ||||||||||||||||||||||||
Available-for-sale financial assets |
34 | 43,148 | | 54 | (75,221 | ) | | (31,985 | ) | (137,342 | ) | |||||||||||||||||||||
Loans and receivables |
66,904 | | 95,698 | | | (419 | ) | 162,183 | | |||||||||||||||||||||||
Financial liabilities at fair value through profit or loss |
| | | | | 6,579 | 6,579 | | ||||||||||||||||||||||||
Financial liabilities at amortized cost |
(183,653 | ) | | (299,250 | ) | | | 2,025 | (480,878 | ) | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
43,148 | (203,552 | ) | (384 | ) | (75,221 | ) | 15,918 | (336,806 | ) | (137,342 | ) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Finance income in the statement of comprehensive income includes the dividends from subsidiaries, associates and joint ventures of |
29
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
4) | Finance income and costs by category of financial instrument for the three-month periods ended September 30, 2016 and 2015 were as follows: |
① | For the three-month period ended September 30, 2016 |
(in millions of Won) | Finance income and costs |
Other comprehensive |
||||||||||||||||||||||||||||||
Interest income (expense) |
Dividend income(*1) |
Gain and loss on foreign currency |
Gain and loss on disposal |
Impairment loss |
Others | Total | ||||||||||||||||||||||||||
Financial assets at fair value through profit or loss |
| | (16,917 | ) | | (14,713 | ) | (31,630 | ) | | ||||||||||||||||||||||
Available-for-sale financial assets |
13 | 3,365 | | (825 | ) | (2,724 | ) | | (171 | ) | 96,579 | |||||||||||||||||||||
Loans and receivables |
24,832 | | (108,924 | ) | | | (213 | ) | (84,305 | ) | | |||||||||||||||||||||
Financial liabilities at fair value through profit or loss |
| | | | | (35,764 | ) | (35,764 | ) | | ||||||||||||||||||||||
Financial liabilities at amortized cost |
(35,136 | ) | | 184,448 | | | 1,244 | 150,556 | | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
3,365 | 75,524 | (17,742 | ) | (2,724 | ) | (49,446 | ) | (1,314 | ) | 96,579 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Finance income in the statement of comprehensive income includes the dividends from subsidiaries, associates and joint ventures of |
② | For the three-month period ended September 30, 2015 |
(in millions of Won) | Finance income and costs |
Other comprehensive |
||||||||||||||||||||||||||||||
Interest income (expense) |
Dividend income(*1) |
Gain and loss on foreign currency |
Gain and loss on disposal |
Impairment loss |
Others | Total | ||||||||||||||||||||||||||
Financial assets at fair value through profit or loss |
| | | | 2,786 | 2,786 | | |||||||||||||||||||||||||
Available-for-sale financial assets |
14 | 364 | | 71 | (23,265 | ) | | (22,816 | ) | (165,721 | ) | |||||||||||||||||||||
Loans and receivables |
25,010 | | 70,450 | | | (198 | ) | 95,262 | | |||||||||||||||||||||||
Financial liabilities at fair value through profit or loss |
| | | | | 1,093 | 1,093 | | ||||||||||||||||||||||||
Financial liabilities at amortized cost |
(61,204 | ) | | (241,604 | ) | | | 2,072 | (300,736 | ) | | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
364 | (171,154 | ) | 71 | (23,265 | ) | 5,753 | (224,411 | ) | (165,721 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Finance income in the statement of comprehensive income includes the dividends from subsidiaries, associates and joint ventures of |
30
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(b) | Fair value |
1) | Fair value and book value |
The carrying amount and the fair value of financial instruments as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||||||||||
Book value | Fair value | Book value | Fair value | |||||||||||||
Assets measured at fair value |
||||||||||||||||
Available-for-sale financial assets(*1) |
1,709,543 | 1,622,911 | 1,622,911 | |||||||||||||
Derivatives assets(*2) |
30,040 | 30,040 | 90,883 | 90,883 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
1,739,583 | 1,739,583 | 1,713,794 | 1,713,794 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Assets measured at amortized cost(*3) |
||||||||||||||||
Cash and cash equivalents |
1,098,318 | 1,098,318 | 1,634,106 | 1,634,106 | ||||||||||||
Trade accounts and note receivable, net |
2,714,282 | 2,714,282 | 2,759,999 | 2,759,999 | ||||||||||||
Loans and other receivables |
4,075,518 | 4,075,518 | 3,560,117 | 3,560,117 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
7,888,118 | 7,888,118 | 7,954,222 | 7,954,222 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities measured at fair value |
||||||||||||||||
Derivatives liabilities(*2) |
39,016 | 39,016 | 8,118 | 8,118 | ||||||||||||
Liabilities measured at amortized cost(*3) |
||||||||||||||||
Trade accounts and notes payable |
755,734 | 755,734 | 577,856 | 577,856 | ||||||||||||
Borrowings |
4,137,324 | 4,262,431 | 5,288,827 | 5,573,931 | ||||||||||||
Financial guarantee liabilities |
85,168 | 85,168 | 99,054 | 99,054 | ||||||||||||
Others |
860,121 | 860,121 | 978,648 | 978,648 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
5,963,454 | 6,944,385 | 7,229,489 | ||||||||||||||
|
|
|
|
|
|
|
|
(*1) | The fair value of available-for-sale financial assets publicly traded is measured at the closing bid price quoted at the end of the reporting period. Meanwhile, the fair value of unquoted available-for-sale financial assets is calculated using the valuation results from an external pricing service in which weighted average cost of capital of evaluated companies are used as a discount rates. Available-for-sale financial assets which are not measured at fair value are not included. |
(*2) | The fair value of derivatives is measured using valuation models such as Black-Scholes model and others in which the market yields on government bonds are used as discount rates. |
(*3) | The fair value of financial assets and liabilities measured at amortized cost is determined at the present value of estimated future cash flows discounted at the current market interest rate. The fair value is calculated for the disclosures in the notes. On the other hand, the Company has not performed fair value measurement for the financial assets and liabilities measured at amortized cost except borrowings since their carrying amounts approximate fair value. |
31
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | The fair value hierarchy |
The fair values of financial instruments by fair value hierarchy as of September 30, 2016 and December 31, 2015 are as follows:
① | September 30, 2016 |
(in millions of Won) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial assets |
||||||||||||||||
Available-for-sale financial assets |
| 179,315 | 1,709,543 | |||||||||||||
Derivatives assets |
| 14,178 | 15,862 | 30,040 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
14,178 | 195,177 | 1,739,583 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial liabilities |
||||||||||||||||
Derivatives liabilities |
39,016 | | 39,016 |
② | December 31, 2015 |
(in millions of Won) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial assets |
||||||||||||||||
Available-for-sale financial assets |
| 228,431 | 1,622,911 | |||||||||||||
Derivatives assets |
| 12,591 | 78,292 | 90,883 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
12,591 | 306,723 | 1,713,794 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial liabilities |
||||||||||||||||
Derivatives liabilities |
| 8,118 | 8,118 |
3) | Financial risk management |
The Company is exposed to credit risk, liquidity risk and market risk arising from financial assets and liabilities. The Companys financial risk management objectives and policies are consistent with those disclosed in the separate financial statements as of and for the year ended December 31, 2015.
32
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
21. Share Capital and Capital Surplus
(a) | Share capital as of September 30, 2016 and December 31, 2015 are as follows: |
(in Won, except share information) | September 30, 2016 | December 31, 2015 | ||||||
Authorized shares |
200,000,000 | 200,000,000 | ||||||
Par value |
5,000 | |||||||
Issued shares(*1) |
87,186,835 | 87,186,835 | ||||||
Shared capital(*2) |
482,403,125,000 |
(*1) | As of September 30, 2016, total shares of ADRs of 51,622,460, outstanding in overseas stock market, are equivalent to 12,905,615 shares of common stock. |
(*2) | As of September 30, 2016, the difference between the ending balance of common stock and the par value of issued common stock is |
(b) | Capital surplus as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Additional paid-in capital |
463,825 | |||||||
Gain on disposal of treasury shares |
783,762 | 783,756 | ||||||
Loss from merger |
(91,310 | ) | | |||||
|
|
|
|
|||||
1,247,581 | ||||||||
|
|
|
|
33
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
22. Hybrid Bonds
Hybrid bonds classified as equity as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | Date of issue | Date of maturity | Interest rate (%) | September 30, 2016 | December 31, 2015 | |||||||||||||||
Hybrid bond 1-1(*1) |
6/13/2013 | 6/13/2043 | 4.30 | 800,000 | ||||||||||||||||
Hybrid bond 1-2(*1) |
6/13/2013 | 6/13/2043 | 4.60 | 200,000 | 200,000 | |||||||||||||||
Issuance cost |
(3,081 | ) | (3,081 | ) | ||||||||||||||||
|
|
|
|
|||||||||||||||||
996,919 | ||||||||||||||||||||
|
|
|
|
(*1) | Details of hybrid bonds as of September 30, 2016 are as follows: |
(in millions of Won) | Hybrid bond 1-1 |
Hybrid bond 1-2 | ||
Issue price | 800,000 | 200,000 | ||
Maturity date | 30 years (The Company has a right to extend the maturity date) | 30 years (The Company has a right to extend the maturity date) | ||
Interest rate | Issue date ~ 2018-06-12 : 4.30% | Issue date ~ 2023-06-12 : 4.60% | ||
Reset every 5 years as follows; | Reset every 10 years as follows; | |||
After 5 years : return on government bond (5 years) + 1.30% |
After 10 years : return on government bond (10 years) + 1.40% | |||
After 10 years : additionally + 0.25% according to Step-up clauses |
After 10 years : additionally + 0.25% according to Step-up clauses | |||
After 25 years : additionally + 0.75% |
After 30 years : additionally + 0.75% | |||
Interest payments condition |
Quarterly (Optional deferral of interest payment is available to the Company) | Quarterly (Optional deferral of interest payment is available to the Company) | ||
Others | The Company can call the hybrid bond at year 5 and interest payment date afterwards | The Company can call the hybrid bond at year 10 and interest payment date afterwards |
The interest accumulated but not paid on the hybrid bonds as of September 30, 2016 amounts to W2,150
million.
23. Reserves
Reserves as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Accumulated changes in unrealized fair value of available-for-sale investments, net of tax |
(30,017 | ) |
24. Treasury Shares
As of September 30, 2016, the Company holds 7,190,484 shares of treasury stock for price stabilization and others in accordance with the Board of Directors resolution.
34
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
25. Selling and Administrative Expenses
(a) | Administrative expenses |
Administrative expenses for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Wages and salaries |
56,377 | 153,954 | 163,800 | |||||||||||||
Expenses related to post-employment benefits |
7,805 | 8,026 | 23,893 | 24,785 | ||||||||||||
Other employee benefits |
11,671 | 12,067 | 37,645 | 37,849 | ||||||||||||
Travel |
2,768 | 3,037 | 8,902 | 9,730 | ||||||||||||
Depreciation |
4,942 | 4,491 | 13,103 | 14,536 | ||||||||||||
Amortization |
14,533 | 13,235 | 41,408 | 39,377 | ||||||||||||
Rental |
13,943 | 17,224 | 43,597 | 51,859 | ||||||||||||
Repairs |
1,706 | 1,879 | 5,403 | 5,965 | ||||||||||||
Advertising |
24,841 | 17,472 | 56,163 | 53,488 | ||||||||||||
Research & development |
21,665 | 25,027 | 59,168 | 62,936 | ||||||||||||
Service fees |
44,264 | 42,067 | 119,300 | 132,221 | ||||||||||||
Supplies expense |
241 | 1,211 | 4,899 | 4,049 | ||||||||||||
Vehicles maintenance |
1,599 | 1,748 | 4,759 | 5,233 | ||||||||||||
Industry association fee |
3,719 | 955 | 7,033 | 6,160 | ||||||||||||
Training |
3,955 | 1,841 | 12,456 | 9,335 | ||||||||||||
Conference |
910 | 1,245 | 2,819 | 4,057 | ||||||||||||
Bad debt expenses |
1,166 | 3,677 | 21,835 | 2,468 | ||||||||||||
Others |
6,511 | 7,110 | 24,592 | 26,621 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
218,689 | 640,929 | 654,469 | ||||||||||||||
|
|
|
|
|
|
|
|
(b) | Selling expenses |
Selling expenses for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Freight and custody expenses |
239,025 | 587,264 | 676,925 | |||||||||||||
Operating expenses for distribution center |
2,428 | 2,446 | 7,236 | 7,860 | ||||||||||||
Sales commissions |
23,004 | 17,097 | 57,555 | 45,332 | ||||||||||||
Sales advertising |
1,184 | 374 | 2,187 | 1,549 | ||||||||||||
Sales promotion |
1,290 | 1,309 | 3,885 | 4,054 | ||||||||||||
Sample |
154 | 457 | 759 | 1,156 | ||||||||||||
Sales insurance premium |
1,534 | 1,664 | 3,444 | 4,342 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
262,372 | 662,330 | 741,218 | ||||||||||||||
|
|
|
|
|
|
|
|
35
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
26. Finance Income and Costs
Details of finance income and costs for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Finance income |
||||||||||||||||
Interest income |
25,024 | 68,510 | 66,938 | |||||||||||||
Dividend income |
11,464 | 9,237 | 144,001 | 317,405 | ||||||||||||
Gain on foreign currency transactions |
66,120 | 75,669 | 188,340 | 156,480 | ||||||||||||
Gain on foreign currency translations |
85,622 | 14,567 | 123,855 | 38,074 | ||||||||||||
Gain on valuation of derivatives |
(14,712 | ) | 4,230 | 10,575 | 15,925 | |||||||||||
Gain on derivative transactions |
117 | | 117 | 67 | ||||||||||||
Gain on disposals of available-for-sale investment |
| 71 | 2,171 | 136 | ||||||||||||
Financial guarantee income |
2,552 | 2,090 | 7,687 | 2,091 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
130,888 | 545,256 | 597,116 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Finance costs |
||||||||||||||||
Interest expenses |
61,204 | 114,874 | 183,653 | |||||||||||||
Loss on foreign currency transactions |
77,621 | 53,454 | 208,342 | 129,989 | ||||||||||||
Loss on foreign currency translations |
(1,403 | ) | 207,936 | 135,509 | 268,117 | |||||||||||
Loss on valuation of derivatives |
35,765 | 352 | 102,317 | 1,613 | ||||||||||||
Loss on derivative transactions |
17,034 | | 17,034 | 505 | ||||||||||||
Impairment loss on available-for-sale investment |
2,724 | 23,265 | 221,561 | 75,221 | ||||||||||||
Others |
2,346 | 215 | 2,696 | 567 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
346,426 | 802,333 | 659,665 | ||||||||||||||
|
|
|
|
|
|
|
|
36
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
27. Other Non-Operating Income and Expenses
Details of other non-operating income and expenses for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Other non-operating income |
||||||||||||||||
Gain on disposals of property, plant and equipment |
2,479 | 17,601 | 8,543 | |||||||||||||
Reversal of impairment loss on intangible assets |
| | 1,838 | | ||||||||||||
Gain on disposals of investment in subsidiaries, associates and joint ventures |
50 | | 50 | 2,046 | ||||||||||||
Gain on disposals of assets held for sale |
6,814 | 357,008 | 6,814 | 409,173 | ||||||||||||
Premium income |
3,888 | 2,138 | 5,863 | 8,887 | ||||||||||||
Gain on exemption of debt |
| | 9,665 | | ||||||||||||
Others |
1,339 | 3,347 | 16,339 | 9,460 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
364,972 | 58,170 | 438,109 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other non-operating expenses |
||||||||||||||||
Loss on disposals of property, plant and equipment |
12,964 | 69,774 | 57,201 | |||||||||||||
Impairment loss on property, plant and equipment |
34,056 | 22,284 | 34,056 | 68,720 | ||||||||||||
Donations |
4,641 | 10,120 | 19,842 | 30,770 | ||||||||||||
Idle tangible asset expenses |
852 | 1,216 | 2,753 | 5,951 | ||||||||||||
Impairment loss on of investment in subsidiaries, associates and joint ventures |
39,404 | 45,157 | 75,347 | 260,833 | ||||||||||||
Loss on disposals of assets held for sale |
| | | 20,133 | ||||||||||||
Impairment loss on assets held for sale |
| 83,741 | | 95,737 | ||||||||||||
Others(*1) |
14,135 | 301,551 | 24,511 | 331,063 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
477,033 | 226,283 | 870,408 | ||||||||||||||
|
|
|
|
|
|
|
|
(*1) | The Company paid |
37
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
28. Expenses by Nature
Expenses that are recorded by nature as cost of sales, selling and administrative expenses and other non-operating expenses in the statements of comprehensive income for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows (excluding finance costs and income tax expense):
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Changes in inventories(*1) |
64,425 | 126,941 | 263,422 | |||||||||||||
Raw materials and consumables used |
3,191,979 | 3,327,780 | 8,993,259 | 10,639,021 | ||||||||||||
Employee benefits expenses |
406,961 | 381,951 | 1,193,602 | 1,126,438 | ||||||||||||
Outsourced processing cost |
494,523 | 540,911 | 1,498,866 | 1,624,228 | ||||||||||||
Depreciation(*2) |
521,431 | 517,002 | 1,540,520 | 1,539,392 | ||||||||||||
Amortization |
21,332 | 18,020 | 58,443 | 52,025 | ||||||||||||
Electricity and water expenses |
175,229 | 197,139 | 564,143 | 688,251 | ||||||||||||
Service fees |
64,279 | 56,061 | 171,513 | 171,448 | ||||||||||||
Rental |
19,482 | 21,424 | 58,010 | 65,588 | ||||||||||||
Advertising |
24,841 | 17,472 | 56,163 | 53,488 | ||||||||||||
Freight and custody expenses |
191,653 | 239,025 | 587,264 | 676,925 | ||||||||||||
Sales commissions |
23,004 | 17,097 | 57,555 | 45,332 | ||||||||||||
Loss on disposals of property, plant and equipment |
14,128 | 12,964 | 69,774 | 57,201 | ||||||||||||
Impairment loss on property, plant and equipment |
34,056 | 22,284 | 34,056 | 68,720 | ||||||||||||
Impairment loss on investments in subsidiaries, associates and joint ventures |
39,404 | 45,157 | 75,347 | 260,833 | ||||||||||||
Loss on disposals of assets held for sale |
| | | 20,133 | ||||||||||||
Impairment loss on assets held for sale |
| 83,741 | | 95,737 | ||||||||||||
Contribution to provisions |
||||||||||||||||
(reversal of contribution to provisions) |
36,691 | (23 | ) | 37,202 | 2,045 | |||||||||||
Others |
292,644 | 575,544 | 839,614 | 1,215,033 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
6,137,974 | 15,962,272 | 18,665,260 | ||||||||||||||
|
|
|
|
|
|
|
|
(*1) | Changes in inventories are the changes in products, semi-finished products and by-products. |
(*2) | Includes depreciation of investment property. |
29. Income Taxes
The effective tax rate of the Company for the nine-month periods ended September 30, 2016 and 2015 was 22.5% and 23.0%, respectively.
38
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
30. Earnings per Share
Basic and diluted earnings per share for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in Won, except per share information) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Profit for the period |
346,211,467,208 | 1,335,416,347,414 | 1,056,421,687,190 | |||||||||||||
Interests of hybrid bonds, net of tax |
(8,330,108,492 | ) | (8,347,872,419 | ) | (24,804,509,930 | ) | (24,699,275,257 | ) | ||||||||
Weighted-average number of common shares outstanding(*1) |
79,996,318 | 79,993,620 | 79,996,052 | 79,993,350 | ||||||||||||
Basic and diluted earnings per share |
4,224 | 16,383 | 12,898 |
(*1) | The weighted-average number of common shares used to calculate basic and diluted earnings per share were as follows: |
(in share) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Total number of common shares issued |
87,186,835 | 87,186,835 | 87,186,835 | 87,186,835 | ||||||||||||
Weighted-average number of treasury shares |
(7,190,517 | ) | (7,193,215 | ) | (7,190,783 | ) | (7,193,485 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average number of common shares outstanding |
79,996,318 | 79,993,620 | 79,996,052 | 79,993,350 | ||||||||||||
|
|
|
|
|
|
|
|
Since there were no potential shares of common stock which had dilutive effects as of September 30, 2016 and 2015, diluted earnings per share is equal to basic earnings per share.
39
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
31. Related Party Transactions
(a) | Significant transactions with related companies for the nine-month periods ended September 30, 2016 and 2015 were as follows: |
1) For the nine-month period ended September 30, 2016
(in millions of Won) | Sales and others(*1) | Purchase and others(*2) | ||||||||||||||||||||||
Sales | Others | Purchase of material |
Purchase of fixed assets |
Outsourced processing cost |
Others | |||||||||||||||||||
Subsidiaries(*3) |
||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
16,642 | 8 | 180,712 | | 18,236 | |||||||||||||||||||
POSCO Processing&Service |
814,370 | 5,777 | 375,111 | | 10,503 | 1,333 | ||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
232,828 | 2,560 | | | 9,390 | 121 | ||||||||||||||||||
POSCO ICT(*4) |
987 | 523 | | 132,485 | 24,974 | 124,867 | ||||||||||||||||||
eNtoB Corporation |
| 5 | 186,764 | 4,924 | 80 | 13,231 | ||||||||||||||||||
POSCO CHEMTECH |
238,837 | 23,813 | 374,993 | 10,269 | 216,581 | 4,503 | ||||||||||||||||||
POSCO ENERGY CO., LTD. |
138,359 | 1,023 | | | | 22 | ||||||||||||||||||
POSCO TMC Co., Ltd. |
204,163 | | 2 | | 1,024 | 733 | ||||||||||||||||||
POSCO AST |
152,108 | 1 | | | 19,695 | 922 | ||||||||||||||||||
POSCO DAEWOO Corporation (formerly, Daewoo International Corporation)(*5) |
2,368,416 | 34,341 | 62,308 | | | 132 | ||||||||||||||||||
POSCO Thainox Public Company Limited |
175,429 | 2,915 | 6,891 | | | 176 | ||||||||||||||||||
POSCO America Corporation |
404,184 | | | | | 641 | ||||||||||||||||||
POSCO Canada Ltd. |
| | 83,005 | | | | ||||||||||||||||||
POSCO Asia Co., Ltd. |
1,304,048 | 221 | 307,166 | 102 | 735 | 1,657 | ||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
97,707 | | | | | 513 | ||||||||||||||||||
POSCO(Suzhou) Automotive Processing Center Co., Ltd. |
102,823 | | | | | | ||||||||||||||||||
POSCO JAPAN Co., Ltd. |
806,338 | | 16,672 | 2,406 | 322 | 2,017 | ||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
172,017 | | | | | | ||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
268,152 | 106 | | | | 57 | ||||||||||||||||||
Others |
720,889 | 10,201 | 156,233 | 41,955 | 159,168 | 82,790 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
8,229,765 | 98,128 | 1,569,153 | 372,853 | 442,472 | 251,951 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Associates and joint ventures(*3) |
||||||||||||||||||||||||
SeAH Changwon Integrated Special Steel(*6) |
28 | | 1,095 | | 627 | | ||||||||||||||||||
POSCO PLANTEC Co., Ltd.(*6) |
2,193 | 31 | 2,533 | 143,946 | 12,248 | 6,825 | ||||||||||||||||||
SNNC |
4,661 | 863 | 334,208 | | | | ||||||||||||||||||
POSCO-SAMSUNG-Slovakia Processing Center |
31,456 | | | | | | ||||||||||||||||||
KOBRASCO |
| 29,297 | | | | | ||||||||||||||||||
Others |
21,996 | 12,923 | 57,106 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
60,334 | 43,114 | 394,942 | 143,946 | 12,875 | 6,825 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
141,242 | 1,964,095 | 516,799 | 455,347 | 258,776 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures. |
(*2) | Purchases and others mainly consist of subsidiaries purchases of construction services and purchases of raw materials to manufacture steel products. |
(*3) | As of September 30, 2016, the Company provided guarantees to related parties. (Note 20) |
(*4) | Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System. |
(*5) | During the period ended September 30, 2016, Daewoo International Corporation was renamed POSCO DAEWOO Corporation. |
(*6) | During the year ended December 31, 2015, it was reclassified from a subsidiary to an associate. |
40
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | For the nine-month period ended September 30, 2015 |
(in millions of Won) | Sales and others | Purchase and others | ||||||||||||||||||||||
Sales | Others | Purchase of material |
Purchase of fixed assets |
Outsourced processing cost |
Others | |||||||||||||||||||
Subsidiaries |
||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
114 | 19 | 358,910 | 1,822 | 29,398 | |||||||||||||||||||
POSCO Processing&Service |
839,457 | | 338,817 | | | 1,829 | ||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
298,089 | | | | 7,510 | 56 | ||||||||||||||||||
POSCO ICT |
893 | 5 | | 180,537 | 22,249 | 131,964 | ||||||||||||||||||
eNtoB Corporation |
| | 203,061 | 5,118 | 94 | 15,004 | ||||||||||||||||||
POSCO CHEMTECH |
340,549 | 24,756 | 387,038 | 6,893 | 225,706 | 1,180 | ||||||||||||||||||
POSCO ENERGY CO., LTD. |
140,252 | 999 | | | | 13 | ||||||||||||||||||
POSCO TMC Co., Ltd. |
202,421 | | | | 1,058 | 1,017 | ||||||||||||||||||
POSCO AST |
283,513 | 3 | 4,115 | | 29,363 | 412 | ||||||||||||||||||
POSHIMETAL Co., Ltd. |
9,071 | 118 | 114,935 | | | 33 | ||||||||||||||||||
POSCO DAEWOO Corporation (formerly, Daewoo International Corporation) |
2,652,467 | 34,341 | 37,732 | | | 865 | ||||||||||||||||||
SeAH Changwon Integrated Special Steel |
2,811 | 176,904 | 8,239 | | 515 | 75 | ||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
4,280 | 33 | 2,544 | 116,912 | 15,135 | 13,649 | ||||||||||||||||||
POSCO Thainox Public Company Limited |
203,411 | 10 | 3,833 | | | 28 | ||||||||||||||||||
PT. KRAKATAU POSCO |
| | 115,557 | | | | ||||||||||||||||||
POSCO America Corporation |
496,793 | 7 | | | | 139 | ||||||||||||||||||
POSCO Canada Ltd. |
| | 95,936 | | | | ||||||||||||||||||
POSCO Asia Co., Ltd. |
1,365,277 | 873 | 202,537 | | 182 | 1,120 | ||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
97,498 | | | | | 46 | ||||||||||||||||||
POSCO JAPAN Co., Ltd. |
785,031 | 9,383 | 18,625 | 2,198 | 201 | 1,086 | ||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
201,101 | 189 | | | | 2 | ||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
302,720 | | | | | 31 | ||||||||||||||||||
Others |
667,261 | 11,960 | 182,468 | 73,807 | 161,069 | 78,332 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
8,896,022 | 259,695 | 1,715,456 | 744,375 | 464,904 | 276,279 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||
SeAH Changwon Integrated Special Steel |
3,547 | | 3,327 | | 268 | 1 | ||||||||||||||||||
SNNC |
1,934 | 412 | 326,679 | | | | ||||||||||||||||||
POSCO-SAMSUNG-Slovakia Processing Center |
19,187 | | | | | | ||||||||||||||||||
Others |
12,023 | 40,278 | 43,220 | | 1 | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
36,691 | 40,690 | 373,226 | | 269 | 1 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
300,385 | 2,088,682 | 744,375 | 465,173 | 276,280 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
41
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(b) | Significant transactions with related companies for the three-month periods ended September 30, 2016 and 2015 were as follows: |
1) | For the three-month period ended September 30, 2016 |
(in millions of Won) | Sales and others | Purchase and others | ||||||||||||||||||||||
Sales | Others | Purchase of material |
Purchase of fixed assets |
Outsourced processing cost |
Others | |||||||||||||||||||
Subsidiaries |
||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
13 | 8 | 27,381 | | 2,190 | |||||||||||||||||||
POSCO Processing&Service |
335,743 | | 123,031 | | 10,503 | 461 | ||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
79,499 | | | | 2,899 | 65 | ||||||||||||||||||
POSCO ICT |
301 | 231 | | 51,045 | 7,191 | 43,332 | ||||||||||||||||||
eNtoB Corporation |
| 5 | 64,335 | 760 | 24 | 4,308 | ||||||||||||||||||
POSCO CHEMTECH |
79,401 | 5,801 | 128,287 | 3,666 | 75,368 | 1,169 | ||||||||||||||||||
POSCO ENERGY CO., LTD. |
45,256 | 371 | | | | 22 | ||||||||||||||||||
POSCO TMC Co., Ltd. |
57,402 | | 1 | | | 56 | ||||||||||||||||||
POSCO DAEWOO Corporation |
807,385 | | 25,136 | | | | ||||||||||||||||||
POSCO Thainox Public Company Limited |
60,482 | 58 | 2,654 | | | 153 | ||||||||||||||||||
POSCO America Corporation |
118,816 | | | | | 641 | ||||||||||||||||||
POSCO Canada Ltd. |
| | 19,524 | | | | ||||||||||||||||||
POSCO Asia Co., Ltd. |
403,657 | 98 | 142,877 | 53 | 444 | 935 | ||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
36,783 | | | | | 94 | ||||||||||||||||||
POSCO(Suzhou) Automotive Processing Center Co., Ltd. |
38,436 | | | | | | ||||||||||||||||||
POSCO JAPAN Co., Ltd. |
291,532 | | 4,461 | 2,038 | 268 | 1,023 | ||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
60,836 | | | | | | ||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
75,568 | 106 | | | | | ||||||||||||||||||
Others |
302,261 | 383 | 48,557 | 10,770 | 54,331 | 31,954 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2,794,108 | 7,066 | 558,871 | 95,713 | 151,028 | 86,403 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||
SeAH Changwon Integrated Special Steel |
8 | | 208 | | 110 | | ||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
339 | 6 | 721 | 51,943 | 4,078 | 1,956 | ||||||||||||||||||
SNNC |
2,261 | 166 | 128,309 | | | | ||||||||||||||||||
POSCO-SAMSUNG-Slovakia Processing Center |
14,887 | | | | | | ||||||||||||||||||
Others |
3,769 | 8,313 | 28,808 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
21,264 | 8,485 | 158,046 | 51,943 | 4,188 | 1,956 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
15,551 | 716,917 | 147,656 | 155,216 | 88,359 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
42
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | For the three-month period ended September 30, 2015 |
(in millions of Won) | Sales and others | Purchase and others | ||||||||||||||||||||||
Sales | Others | Purchase of material |
Purchase of fixed assets |
Outsourced processing cost |
Others | |||||||||||||||||||
Subsidiaries |
||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
24 | | 67,549 | | 62 | |||||||||||||||||||
POSCO Processing&Service |
305,176 | | 91,934 | | | 197 | ||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
99,689 | | | | 1,812 | 2 | ||||||||||||||||||
POSCO ICT |
213 | 1 | | 96,025 | 7,580 | 43,535 | ||||||||||||||||||
eNtoB Corporation |
| | 56,609 | 2,722 | 41 | 4,540 | ||||||||||||||||||
POSCO CHEMTECH |
94,719 | 7,123 | 127,539 | 711 | 75,685 | 681 | ||||||||||||||||||
POSCO ENERGY CO., LTD. |
44,075 | 384 | | | | | ||||||||||||||||||
POSCO TMC Co., Ltd. |
79,405 | | | | 392 | 383 | ||||||||||||||||||
POSCO AST |
84,368 | | | | 10,092 | 303 | ||||||||||||||||||
POSHIMETAL Co., Ltd. |
2,554 | 43 | 32,811 | | | | ||||||||||||||||||
POSCO DAEWOO Corporation (formerly, Daewoo International Corporation) |
870,337 | | 10,983 | | | 96 | ||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
299 | 8 | 809 | 52,420 | 4,675 | 2,727 | ||||||||||||||||||
POSCO Thainox Public Company Limited |
63,593 | | 533 | | | 3 | ||||||||||||||||||
POSCO America Corporation |
160,721 | | | | | 54 | ||||||||||||||||||
POSCO Canada Ltd. |
| | 31,912 | | | | ||||||||||||||||||
POSCO Asia Co., Ltd. |
443,568 | 294 | 77,282 | | 87 | 883 | ||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
16,647 | | | | | | ||||||||||||||||||
POSCO JAPAN Co., Ltd. |
277,524 | | 6,691 | 524 | 201 | 567 | ||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
68,672 | 36 | | | | 2 | ||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
94,782 | | | | | 31 | ||||||||||||||||||
Others |
204,367 | 1,835 | 61,956 | 28,633 | 54,226 | 32,070 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2,911,809 | 9,748 | 499,059 | 248,584 | 154,791 | 86,136 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||
SeAH Changwon Integrated Special Steel |
1,894 | | 655 | | 39 | | ||||||||||||||||||
SNNC |
729 | 129 | 114,537 | | | | ||||||||||||||||||
POSCO-SAMSUNG-Slovakia Processing Center |
4,788 | | | | | | ||||||||||||||||||
Others |
2,787 | 8,879 | 14,925 | | 1 | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
10,198 | 9,008 | 130,117 | | 40 | | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
18,756 | 629,176 | 248,584 | 154,831 | 86,136 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
43
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(c) | The related account balances of significant transactions with related companies as of September 30, 2016 and December 31, 2015 are as follows: |
1) | September 30, 2016 |
(in millions of Won) | Receivables | Payables | ||||||||||||||||||||||||||
Trade accounts and notes receivable |
Others | Total | Trade accounts and notes payable |
Accounts payable |
Others | Total | ||||||||||||||||||||||
Subsidiaries |
||||||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
686 | 686 | | 5,192 | 482 | 5,674 | ||||||||||||||||||||||
POSCO Processing&Service |
127,741 | 46 | 127,787 | 7,176 | 2,149 | 4,024 | 13,349 | |||||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
42,508 | 80 | 42,588 | | 5 | 1,474 | 1,479 | |||||||||||||||||||||
POSCO ICT |
| 139 | 139 | 846 | 43,537 | 6,446 | 50,829 | |||||||||||||||||||||
eNtoB Corporation |
| | | 8,158 | 17,460 | 15 | 25,633 | |||||||||||||||||||||
POSCO CHEMTECH |
26,611 | 3,551 | 30,162 | 56,983 | 14,421 | 17,484 | 88,888 | |||||||||||||||||||||
POSCO ENERGY CO., LTD. |
17,147 | 622 | 17,769 | | | 1,945 | 1,945 | |||||||||||||||||||||
POSCO TMC Co., Ltd. |
58,785 | 8 | 58,793 | | 25 | 269 | 294 | |||||||||||||||||||||
POSCO DAEWOO Corporation (formerly, Daewoo International Corporation) |
130,534 | 17 | 130,551 | 6,628 | 14 | 49 | 6,691 | |||||||||||||||||||||
POSCO Thainox Public Company Limited |
60,482 | | 60,482 | | 153 | | 153 | |||||||||||||||||||||
POSCO America Corporation |
8,144 | | 8,144 | | 343 | | 343 | |||||||||||||||||||||
POSCO Asia Co., Ltd. |
279,986 | 9 | 279,995 | 19,985 | | 143 | 20,128 | |||||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
21,733 | | 21,733 | | 32 | | 32 | |||||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
73,730 | | 73,730 | | | | | |||||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
121,386 | 5 | 121,391 | | | | | |||||||||||||||||||||
Others |
305,209 | 2,497 | 307,706 | 7,088 | 22,180 | 24,320 | 53,588 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1,273,996 | 7,660 | 1,281,656 | 106,864 | 105,511 | 56,651 | 269,026 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
160 | 1 | 161 | 1,812 | 16,919 | 27 | 18,758 | |||||||||||||||||||||
SNNC |
214 | 32 | 246 | 28,222 | | 598 | 28,820 | |||||||||||||||||||||
KOBRASCO |
| 14,648 | 14,648 | | | | | |||||||||||||||||||||
Others |
738 | 3 | 741 | 400 | | | 400 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1,112 | 14,684 | 15,796 | 30,434 | 16,919 | 625 | 47,978 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
22,344 | 1,297,452 | 137,298 | 122,430 | 57,276 | 317,004 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
44
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | December 31, 2015 |
(in millions of Won) | Receivables | Payables | ||||||||||||||||||||||||||
Trade accounts and notes receivable |
Others | Total | Trade accounts and notes payable |
Accounts payable |
Others | Total | ||||||||||||||||||||||
Subsidiaries |
||||||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
30,368 | 30,876 | | 42,159 | 1,002 | 43,161 | ||||||||||||||||||||||
POSCO Processing&Service |
74,985 | 175 | 75,160 | 10,868 | 603 | | 11,471 | |||||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
43,669 | 66 | 43,735 | | | 1,262 | 1,262 | |||||||||||||||||||||
POSCO ICT |
| 6,832 | 6,832 | 1,060 | 94,865 | 5,880 | 101,805 | |||||||||||||||||||||
eNtoB Corporation |
| | | 8,683 | 14,209 | 12 | 22,904 | |||||||||||||||||||||
POSCO CHEMTECH |
32,670 | 4,500 | 37,170 | 54,636 | 11,398 | 18,062 | 84,096 | |||||||||||||||||||||
POSCO ENERGY CO., LTD. |
18,680 | 2,585 | 21,265 | | | | | |||||||||||||||||||||
POSCO TMC Co., Ltd. |
63,521 | 31 | 63,552 | | 180 | 195 | 375 | |||||||||||||||||||||
POSCO AST |
54,844 | 54 | 54,898 | | 1,915 | 3,294 | 5,209 | |||||||||||||||||||||
POSHIMETAL Co., Ltd. |
707 | 9 | 716 | | 10,148 | | 10,148 | |||||||||||||||||||||
POSCO DAEWOO Corporation (formerly, Daewoo International Corporation) |
144,970 | | 144,970 | | | | | |||||||||||||||||||||
POSCO Thainox Public Company Limited |
65,152 | 2 | 65,154 | 542 | | | 542 | |||||||||||||||||||||
POSCO America Corporation |
38,715 | | 38,715 | | | | | |||||||||||||||||||||
POSCO Asia Co., Ltd. |
299,608 | 235 | 299,843 | 21,198 | 69 | | 21,267 | |||||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
16,689 | | 16,689 | | | | | |||||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
94,588 | | 94,588 | | | | | |||||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
205,390 | 20 | 205,410 | | | | | |||||||||||||||||||||
Others |
172,019 | 5,035 | 177,054 | 18,208 | 45,476 | 23,985 | 87,669 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1,326,715 | 49,912 | 1,376,627 | 115,195 | 221,022 | 53,692 | 389,909 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||||||
SeAH Changwon Integrated Special Steel |
1,201 | | 1,201 | 161 | 15 | | 176 | |||||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
123 | 19 | 142 | 1,901 | 46,159 | | 48,060 | |||||||||||||||||||||
SNNC |
298 | 20 | 318 | 639 | 2 | | 641 | |||||||||||||||||||||
Others |
740 | 12,200 | 12,940 | | 145 | | 145 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2,362 | 12,239 | 14,601 | 2,701 | 46,321 | | 49,022 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
62,151 | 1,391,228 | 117,896 | 267,343 | 53,692 | 438,931 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
45
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(d) | For the nine-month periods ended September 30, 2016 and 2015 details of compensation to key management officers were as follows: |
(in millions of Won) | September 30, 2016 | September 30, 2015 | ||||||
Short-term benefits |
26,218 | |||||||
Long-term benefits |
8,893 | 8,683 | ||||||
Retirement benefits |
5,594 | 8,802 | ||||||
|
|
|
|
|||||
43,703 | ||||||||
|
|
|
|
Key management officers include directors (including non-standing directors), executive officials and fellow officials who have significant influence and responsibilities in the Companys business and operations.
32. Commitments and Contingencies
(a) | Commitments |
The Company entered into long-term contracts to purchase iron ore, coal, nickel and others. The contracts of iron ore and coal generally have terms of more than three years and the contracts of nickel have terms of more than one year. These contracts provide for periodic price adjustments based on the market price. As of September 30, 2016, 144 million tons of iron ore and 23 million tons of coal remained to be purchased under such long-term contracts.
The Company entered into an agreement with Tangguh Liquefied Natural Gas (LNG) Consortium in Indonesia to purchase 550 thousand tons of LNG annually for 20 years commencing in August 2005. The purchase price is subject to change, based on changes of the monthly standard oil price (JCC) and with a price ceiling.
As of September 30, 2016, the Company entered into commitments with Korea National Oil Corporation for long-term foreign currency borrowings, which are limited up to the amount of USD 6.49 million. The borrowings are related to the exploration of gas hydrates in Western Fergana-Chenavard. The repayment of the borrowings depends on the success of the project. The Company is not liable for the repayment of full or part of the money borrowed if the respective project fail. The Company has agreed to pay a certain portion of its profits under certain conditions, as defined by the borrowing agreements. As of September 30, 2016, the balances of the borrowing are USD 4.09 million.
46
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(b) | As of September 30, 2016, the Company has provided two blank checks to Korea Resources Corporation as collateral for long-term domestic borrowings, and has provided three blank promissory notes and three blank checks to Korea National Oil Corporation as collateral for long-term foreign currency borrowings. |
(c) | Litigation in progress |
The Company is involved in 36 litigations for alleged damages aggregating to W87.2 billion as of September 30, 2016 which arose in the ordinary course of business. The Company has recognized provisions for 2 of 36 litigations amounting to W2.5 billion by estimating the outcome of such litigations reasonably. Except 2 litigations, the Company has not recognized any provisions since the Company believes that it does not have a present obligation on other litigations as of September 30, 2016.
(d) | The Company has provided a supplemental funding agreement, as the largest shareholder, as requested from the creditors, including Norddeutsche Landesbank, for seamless funding to the construction of new power plant by POSCO ENERGY CO., LTD. |
33. Cash Flows from Operating Activities
Changes in operating assets and liabilities for the nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | September 30, 2016 | September 30, 2015 | ||||||
Trade accounts and notes receivable, net |
305,594 | |||||||
Other accounts receivable |
60,236 | 186,529 | ||||||
Inventories |
163,179 | 643,641 | ||||||
Prepaid expenses |
(18,324 | ) | (20,977 | ) | ||||
Other current assets |
130 | (206 | ) | |||||
Long-term guarantee deposits |
138 | (202 | ) | |||||
Other non-current assets |
(60 | ) | 401 | |||||
Trade accounts and notes payable |
181,776 | (107,093 | ) | |||||
Other accounts payable |
15,885 | (114,270 | ) | |||||
Accrued expenses |
(11,459 | ) | (39,682 | ) | ||||
Advances received |
(1,629 | ) | (10,305 | ) | ||||
Withholdings |
4,482 | 31,820 | ||||||
Unearned revenue |
(842 | ) | 17,357 | |||||
Other current liabilities |
(12,817 | ) | (35,944 | ) | ||||
Payment severance benefits |
(67,093 | ) | (69,696 | ) | ||||
Plan assets |
(36,259 | ) | 5,461 | |||||
|
|
|
|
|||||
792,428 | ||||||||
|
|
|
|
47
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
34. Business Combination
(a) | The Company merged with POSHIMETAL Co., Ltd. and POSCO GREEN GAS TECHNOLOGY during the nine-month period ended September 30, 2016. The purpose of the business combination is to enhance shareholders value by increasing competence of the Company and maximizing efficiency of integrated operations through the synergy gained from the merger. |
POS-HIMETAL Co., Ltd. |
POSCO Green Gas Technology |
|||||||
Decision date of Board of Directors |
2015.12.11 | 2016.02.19 | ||||||
Acquisition date |
2016.03.01 | 2016.05.01 |
(b) | Since the merger between the controlling company and its subsidiaries, the assets acquired and liabilities assumed through the merger are measured at book value in the consolidated financial statements of the Company. The difference between considerations transferred and the book value of net assets recognized is reflected in capital surplus. |
(in millions of Won) | POS-HIMETAL Co., Ltd. |
POSCO Green Gas Technology |
||||||
Transfer price |
||||||||
Book value of existing ownership interest |
682,600 | |||||||
|
|
|
|
|||||
Identifiable assets, acquired liabilities |
||||||||
Cash and cash equivalents |
316 | 23,934 | ||||||
Trade accounts and note receivable, net |
2,583 | | ||||||
Inventories |
35,113 | 9,227 | ||||||
Property, plant, equipment and intangible assets |
231,848 | 1,059,901 | ||||||
Other assets |
7,002 | 7,803 | ||||||
Trade accounts and note payable |
(1,685 | ) | | |||||
Borrowings |
(331,817 | ) | (202,544 | ) | ||||
Other payables |
(2,931 | ) | (226,602 | ) | ||||
Other liabilities |
(10,207 | ) | (7,685 | ) | ||||
|
|
|
|
|||||
Total identifiable net assets |
(69,778 | ) | 664,034 | |||||
|
|
|
|
|||||
Capital surplus arising from business combination |
||||||||
Decrease in capital surplus |
18,566 | |||||||
|
|
|
|
48
POSCO
and Subsidiaries
Condensed Consolidated Interim Financial Statements
(Unaudited)
September 30, 2016
(With Independent Auditors Review Report Thereon)
Page | ||||
1 | ||||
Condensed Consolidated Interim Financial Statements |
||||
Condensed Consolidated Interim Statements of Financial Position |
6 | |||
Condensed Consolidated Interim Statements of Comprehensive Income (Loss) |
8 | |||
Condensed Consolidated Interim Statements of Changes in Equity |
9 | |||
11 | ||||
Notes to the Condensed Consolidated Interim Financial Statements |
13 |
Independent Auditors Review Report
Based on a report originally issued in Korean
The Board of Directors and Shareholders
POSCO:
Reviewed financial statements
We have reviewed the accompanying condensed consolidated interim financial statements of POSCO and its subsidiaries (the Company), which comprise the condensed consolidated interim statement of financial position as of September 30, 2016, the condensed consolidated interim statements of comprehensive income (loss) for the three-month and nine-month periods ended September 30, 2016 and 2015, the condensed consolidated interim statements of changes in equity and cash flows for the nine-month periods ended September 30, 2016 and 2015 and notes, comprising a summary of significant accounting policies and other explanatory information.
Managements responsibility
Management is responsible for the preparation and fair presentation of these condensed consolidated interim financial statements in accordance with Korean International Financial Reporting Standard (K-IFRS) No. 1034 Interim Financial Reporting. The Companys management is also responsible for the internal controls determined necessary to prepare condensed consolidated interim financial statements free of material misstatements due to error or fraud.
Auditors review responsibility
Our responsibility is to issue a report on the condensed consolidated interim financial statements based on our reviews.
We conducted our reviews in accordance with the Review Standards for Quarterly and Semiannual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. A review of interim financial statements consists of making inquiries primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Korean Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Conclusion
Based on our reviews, nothing has come to our attention that causes us to believe that the accompanying condensed consolidated interim financial statements referred to above are not prepared, in all material respects, in accordance with K-IFRS No. 1034 Interim Financial Reporting.
Emphasis of matter
Without qualifying our opinion, users of this review report need to pay attention to the following key audit matters related to industry with production-to-order transactions.
Reviewing the financial statements on entities engaged in production-to-order transactions is a significant matter in our review of the condensed consolidated interim financial statements, which determination is based on auditors professional judgment and communications with those who charged with governance, in accordance with Practical Guide of Korean Standards on Auditing 2016-1. This matter is part of our review of the condensed consolidated interim financial statements as a whole, and we do not express an opinion or review conclusion on this matter.
In addition, as mentioned in Auditors Review Responsibility, section, our responsibility is to issue a report on these condensed interim financial statements based on our reviews in accordance with Review Standards for Quarterly and Semi-annual Financial Statements established by the Securities and Futures Commission of the Republic of Korea. We have inquired primarily of personnel responsible for financial and accounting matters, and applied analytical and other review procedures on the review matter in connection with production-to-order transactions.
(a) | Overview |
In relation to key audit matter related to industry with production-to-order transactions described in this review report, the following is commonly applied.
Certain subsidiaries including POSCO ENGINEERING & CONSTRUCTION., LTD. and POSCO ICT are engaged in industry with production-to-order transactions. Sales in relation to production-to-order transactions are approximately 12% of consolidated sales for the nine-month period ended September 30, 2016. As mentioned in note 26(a) to the condensed interim financial statements, when the outcome of a construction contract can be estimated reliably, the Company recognizes contract revenues and contract costs associated with the construction contract as revenue and expenses, respectively, based on the percentage-of-completion method at the end of the reporting period. The percentage-of-completion is calculated based on the ratio of contract costs incurred for work performed to date to estimated total contract costs. The gross amount due from customers for contract work is presented for all contracts in which costs incurred plus recognized profits (less recognized losses) exceeded progress billings. The gross amount due to customers for contract work is presented for all contracts in which progress billings exceed costs incurred plus recognized profits (less recognized losses).
(b) | Identification of significant risks and review procedures |
We identified the significant risks through discussion with auditors of certain subsidiaries in industry with production-to-order transactions and conducted reviews on their review procedures for those risks. The subsidiary auditors conducted review procedures based on their judgments. Our review procedures include the review of the subsidiary auditors review results, inquiries and application of analytical and other procedures on their review results. The identified significant risks and major review procedures for the Companys construction contracts are as follows:
2
1) | Revenues recognized by the input method |
We identified significant risks associated with revenues recognized by the input method. The variation of estimated amounts has significant impact on profit for the nine-month period ended September 30, 2016 and future profit because the uncertainty of estimated total contract revenues and costs is high for large-scale development constructions at initial stage, constructions with delays and possibility of being discontinued of construction.
The following review procedures were performed regarding revenues recognized by the input method.
| Inquiry of significant construction contracts and accounting policy for construction revenues |
| Analytical review and inquiries as to whether there is any circumstance of delay on construction progress |
| Review of information in the press which implied discontinued construction and make inquiries of the circumstance |
| Analytical review and inquiry of accounting treatment for certain projects which showed significant changes such as possibility of delay or discontinuance |
2) | Uncertainty of estimated total contract costs |
The changes in estimated total contract costs
were 258,444 million for the nine-month period ended September 30, 2016 (note 26(e)). We identified significant risks regarding uncertainty of estimated total contract costs based on the impact on profit or
loss for the nine-month period ended September 30, 2016. W
The following review procedures were performed regarding the impact of uncertainty of estimated total contract costs on the condensed consolidated interim financial statements.
| Inquiry of the reasonableness of estimated costs by major projects |
| Analytical review procedures regarding the impact of the significant change in estimated total contract costs on profit or loss for the period |
| Inquiry of the cause of change for major projects with significant changes in estimated total contract costs during the period |
| Analytical review procedures regarding major components of estimated total contract costs and inquiry of the changes in accounting policies |
| Inquiry of the probability that estimated total contact costs are increased due to delay and the estimated possible penalties related to the delay. |
| Review the significant difference between actual costs and estimated costs, and retrospective review the reasonableness of estimated procedures of total contact costs |
3) | Assessment of the percentage-of-completion |
The changes in estimated total contract costs were
258,444 million for the nine-month period ended September 30, 2016 (note 26(e)). We identified significant risks regarding assessment of the percentage-of-completion as uncertainty of estimated total contract
costs is increased. W
The following review procedures were performed regarding total contract costs and cumulative contract costs on assessment of the percentage-of-completion.
3
| Analytical review procedures regarding increase or decrease of the percentage-of-completion by projects |
| Inquiry of the cause for quarterly changes in percentage-of-completion for major projects |
| Inquiry of costs that do not reflect the progress of contracts and related accounting |
4) | Recoverability of due from customers for contract work |
As of September 30, 2016 and December
31, 2015, the amounts of due from customers for contract work are 958,548 million and W1,218,031 million, respectively, and it is approximately 11% and 13% of total trade accounts
and note receivable (note 26(c)) as of both reporting dates. We identified significant risks regarding the recoverability of due from customers for contract work as the amounts of due from customers for contract work are significant. W
The following review procedures were performed regarding the recoverability of due from customers for contract work.
| Analytical review procedures regarding the quarterly trends of the amount due from customers for contract work |
| Review of the remaining balance of due from customers for projects for which the contract work was completed or substantially completed. |
| Inquiry of the reason in increase in the amount due from customers for contract work |
| Inquiry of the conditions of billing, payment and delivery time by major projects |
| Inquiry of the recoverability considering the financial stability of ordering organization |
| Review allowance for doubtful accounts through reassessment of the recoverability of due from customers for contract work |
5) | Accounting for the variation of construction work |
The variation of construction contracts due to changes in estimated total contract costs had significant influence on profits or loss of the construction (note 26(e)). We identified significant risks regarding the accounting for the variation of construction works.
The following review procedures were performed regarding accounting of the variation of construction work and disclosures.
| Inquiry whether there is a consistent policy regarding the variation of contract amounts |
| Inquiry of the cause on significant changes in contract amounts for projects |
| Inquiry whether there is an approval by the ordering organization regarding the variation of contract amounts |
| Inquiry of impact on estimated total contract costs and the percentage-of-completion by the variation of construction work |
4
Other matter
The procedures and practices utilized in the Republic of Korea to review such condensed consolidated interim financial statements may differ from those generally accepted and applied in other countries.
The consolidated statement of financial position of the Company as of December 31, 2015, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, which are not accompanying this report, were audited by us in accordance with Korean Standards on Auditing and our report thereon, dated February 25, 2016, expressed an unqualified opinion. The accompanying condensed consolidated statement of financial position of the Company as of December 31, 2015, presented for comparative purposes, is consistent, in all material respects, with the audited consolidated financial statements from which it has been derived.
Seoul, Korea
November 14, 2016
This report is effective as of November 14, 2016, the review report date. Certain subsequent events or circumstances, which may occur between the review report date and the time of reading this report, could have a material impact on the accompanying condensed consolidated interim financial statements. Accordingly, the readers of the review report should understand that the above review report has not been updated to reflect the impact of such subsequent events or circumstances, if any. |
5
Condensed Consolidated Interim Statements of Financial Position
As of September 30, 2016 and December 31, 2015
(Unaudited)
September 30, | December 31, | |||||||||||
(in millions of Won) | Notes | 2016 | 2015 | |||||||||
Assets |
||||||||||||
Cash and cash equivalents |
21 | 4,870,185 | ||||||||||
Trade accounts and notes receivable, net |
4,21,26,33 | 8,655,473 | 9,595,935 | |||||||||
Other receivables, net |
5,21,33 | 1,490,450 | 1,679,879 | |||||||||
Other short-term financial assets |
6,21 | 4,702,226 | 3,910,387 | |||||||||
Inventories |
7 | 7,902,452 | 8,225,205 | |||||||||
Current income tax assets |
38,675 | 33,765 | ||||||||||
Assets held for sale |
8 | 344,862 | 57,281 | |||||||||
Other current assets |
14 | 903,343 | 808,252 | |||||||||
|
|
|
|
|||||||||
Total current assets |
27,438,778 | 29,180,889 | ||||||||||
|
|
|
|
|||||||||
Long-term trade accounts and notes receivable, net |
4,21 | 72,679 | 120,338 | |||||||||
Other receivables, net |
5,21 | 768,919 | 863,258 | |||||||||
Other long-term financial assets |
6,21 | 2,367,992 | 2,341,460 | |||||||||
Investments in associates and joint ventures |
9 | 3,875,882 | 3,945,333 | |||||||||
Investment property, net |
11 | 1,104,557 | 1,084,292 | |||||||||
Property, plant and equipment, net |
12 | 33,310,141 | 34,522,855 | |||||||||
Intangible assets, net |
13 | 6,200,707 | 6,405,754 | |||||||||
Deferred tax assets |
1,361,804 | 1,315,580 | ||||||||||
Other non-current assets |
14,19 | 561,288 | 629,000 | |||||||||
|
|
|
|
|||||||||
Total non-current assets |
49,623,969 | 51,227,870 | ||||||||||
|
|
|
|
|||||||||
Total assets |
80,408,759 | |||||||||||
|
|
|
|
See accompanying notes to the condensed consolidated interim financial statements.
6
POSCO and Subsidiaries
Condensed Consolidated Interim Statements of Financial Position, Continued
As of September 30, 2016 and December 31, 2015
(Unaudited)
September 30, | December 31, | |||||||||||
(in millions of Won) | Notes | 2016 | 2015 | |||||||||
Liabilities |
||||||||||||
Trade accounts and notes payable |
21,33 | 3,125,348 | ||||||||||
Short-term borrowings and current installments of long-term borrowings |
4,15,21 | 9,576,343 | 12,371,032 | |||||||||
Other payables |
16,21,33 | 1,833,345 | 2,129,093 | |||||||||
Other short-term financial liabilities |
17,21 | 105,866 | 202,117 | |||||||||
Current income tax liabilities |
293,751 | 377,962 | ||||||||||
Liabilities of disposal group held for sale |
8 | | 34,202 | |||||||||
Provisions |
18,34 | 149,737 | 102,320 | |||||||||
Other current liabilities |
20,26 | 2,041,300 | 1,788,852 | |||||||||
|
|
|
|
|||||||||
Total current liabilities |
16,944,913 | 20,130,926 | ||||||||||
|
|
|
|
|||||||||
Long-term trade accounts and notes payable |
21 | 40,695 | 11,098 | |||||||||
Long-term borrowings |
15,21 | 12,184,842 | 12,849,199 | |||||||||
Other payables |
16,21 | 212,932 | 134,470 | |||||||||
Other long-term financial liabilities |
17,21 | 120,416 | 54,696 | |||||||||
Defined benefit liabilities, net |
19 | 289,290 | 182,025 | |||||||||
Deferred tax liabilities |
1,682,293 | 1,676,658 | ||||||||||
Long-term provisions |
18,34 | 315,221 | 221,692 | |||||||||
Other non-current liabilities |
20 | 59,116 | 77,773 | |||||||||
|
|
|
|
|||||||||
Total non-current liabilities |
14,904,805 | 15,207,611 | ||||||||||
|
|
|
|
|||||||||
Total liabilities |
31,849,718 | 35,338,537 | ||||||||||
|
|
|
|
|||||||||
Equity |
||||||||||||
Share capital |
22 | 482,403 | 482,403 | |||||||||
Capital surplus |
22 | 1,388,798 | 1,383,623 | |||||||||
Hybrid bonds |
23 | 996,919 | 996,919 | |||||||||
Reserves |
24 | (677,376 | ) | (594,756 | ) | |||||||
Treasury shares |
25 | (1,533,748 | ) | (1,533,898 | ) | |||||||
Retained earnings |
41,014,333 | 40,501,059 | ||||||||||
|
|
|
|
|||||||||
Equity attributable to owners of the controlling company |
41,671,329 | 41,235,350 | ||||||||||
Non-controlling interests |
23 | 3,541,700 | 3,834,872 | |||||||||
|
|
|
|
|||||||||
Total equity |
45,213,029 | 45,070,222 | ||||||||||
|
|
|
|
|||||||||
Total liabilities and equity |
80,408,759 | |||||||||||
|
|
|
|
See accompanying notes to the condensed consolidated interim financial statements.
7
Condensed Consolidated Interim Statements of Comprehensive Income (Loss)
For the three-month and nine-month periods ended September 30, 2016 and 2015
(Unaudited)
For the three-month periods | For the nine-month periods | |||||||||||||||||
ended September 30 | ended September 30 | |||||||||||||||||
(in millions of Won, except per share information) | Notes | 2016 | 2015 | 2016 | 2015 | |||||||||||||
Revenue |
26,33,36 | 13,995,992 | 38,066,142 | 44,286,395 | ||||||||||||||
Cost of sales |
7,26,30,33 | (10,785,558 | ) | (12,397,755 | ) | (32,993,682 | ) | (39,197,778 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||||
Gross profit |
1,962,002 | 1,598,237 | 5,072,460 | 5,088,617 | ||||||||||||||
Selling and administrative expenses |
27,30 | |||||||||||||||||
Administrative expenses |
(561,799 | ) | (541,056 | ) | (1,585,197 | ) | (1,722,846 | ) | ||||||||||
Selling expenses |
(365,907 | ) | (405,269 | ) | (1,114,688 | ) | (1,296,274 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Operating profit |
1,034,296 | 651,912 | 2,372,575 | 2,069,497 | ||||||||||||||
Share of profit (loss) of equity-accounted investees, net |
9 | (71,134 | ) | (322,881 | ) | 90,622 | (361,932 | ) | ||||||||||
Finance income and costs |
21,28 | |||||||||||||||||
Finance income |
585,673 | 926,715 | 1,674,086 | 2,023,457 | ||||||||||||||
Finance costs |
(713,705 | ) | (1,542,268 | ) | (2,464,056 | ) | (3,020,475 | ) | ||||||||||
Other non-operating income and expenses |
29 | |||||||||||||||||
Other non-operating income |
31,277 | 128,645 | 156,795 | 441,016 | ||||||||||||||
Other non-operating expenses |
30 | (203,063 | ) | (617,789 | ) | (353,331 | ) | (1,019,615 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||||
Profit (loss) before income tax |
36 | 663,344 | (775,666 | ) | 1,476,691 | 131,948 | ||||||||||||
Tax benefit (expense) |
31,36 | (187,807 | ) | 117,425 | (442,249 | ) | (337,593 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Profit (loss) |
475,537 | (658,241 | ) | 1,034,442 | (205,645 | ) | ||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||
Items that will not be reclassified subsequently to profit or loss: |
||||||||||||||||||
Remeasurements of defined benefit pension plans |
19 | 14,057 | (18,055 | ) | (59,425 | ) | (41,491 | ) | ||||||||||
Items that are or may be reclassified subsequently to profit or loss: |
||||||||||||||||||
Capital adjustment arising from investments in |
(154,627 | ) | 42,061 | (96,515 | ) | (25,414 | ) | |||||||||||
Net changes in the unrealized fair value of available-for-sale investments |
21 | 89,272 | (169,320 | ) | 217,520 | (195,970 | ) | |||||||||||
Foreign currency translation differences |
(227,268 | ) | 118,240 | (255,620 | ) | 122,765 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Other comprehensive loss, net of tax |
(278,566 | ) | (27,074 | ) | (194,040 | ) | (140,110 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total comprehensive income (loss) |
(685,315 | ) | 840,402 | (345,755 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Profit (loss) attributable to: |
||||||||||||||||||
Owners of the controlling company |
(541,627 | ) | 1,197,014 | (4,864 | ) | |||||||||||||
Non-controlling interests |
(70,152 | ) | (116,614 | ) | (162,572 | ) | (200,781 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Profit (loss) |
(658,241 | ) | 1,034,442 | (205,645 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total comprehensive income (loss) attributable to: |
||||||||||||||||||
Owners of the controlling company |
(609,969 | ) | 1,062,204 | (180,784 | ) | |||||||||||||
Non-controlling interests |
(104,744 | ) | (75,346 | ) | (221,802 | ) | (164,971 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Total comprehensive income (loss) |
(685,315 | ) | 840,402 | (345,755 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||
Basic and diluted earnings (loss) per share (in Won) |
32 | 6,717 | (6,875 | ) | 14,653 | (370 | ) |
See accompanying notes to the condensed consolidated interim financial statements.
8
Condensed Consolidated Interim Statements of Changes in Equity
For the nine-month periods ended September 30, 2016 and 2015
(Unaudited)
Attributable to owners of the controlling company | Non- | |||||||||||||||||||||||||||||||||||
Share | Capital | Hybrid | Treasury | Retained | controlling | |||||||||||||||||||||||||||||||
(in millions of Won) | capital | surplus | bonds | Reserves | shares | earnings | Subtotal | interests | Total | |||||||||||||||||||||||||||
Balance as of January 1, 2015 |
1,083,718 | 996,919 | (408,773 | ) | (1,534,457 | ) | 40,967,558 | 41,587,368 | 3,703,996 | 45,291,364 | ||||||||||||||||||||||||||
Comprehensive income (loss): |
||||||||||||||||||||||||||||||||||||
Loss |
| | | | | (4,864 | ) | (4,864 | ) | (200,781 | ) | (205,645 | ) | |||||||||||||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||||||||||||||
Remeasurements of defined benefit pension plans, net of tax |
| | | | | (39,267 | ) | (39,267 | ) | (2,224 | ) | (41,491 | ) | |||||||||||||||||||||||
Capital adjustment arising from investments in equity-accounted investees, net of tax |
| | | (44,971 | ) | | | (44,971 | ) | 19,557 | (25,414 | ) | ||||||||||||||||||||||||
Net changes in the unrealized fair value of available-for-sale investments, net of tax |
| | | (193,956 | ) | | | (193,956 | ) | (2,014 | ) | (195,970 | ) | |||||||||||||||||||||||
Foreign currency translation differences, net of tax |
| | | 102,274 | | | 102,274 | 20,491 | 122,765 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total comprehensive loss |
| | | (136,653 | ) | | (44,131 | ) | (180,784 | ) | (164,971 | ) | (345,755 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Transactions with owners of the controlling company, recognized directly in equity: |
||||||||||||||||||||||||||||||||||||
Year-end dividends |
| | | | | (479,958 | ) | (479,958 | ) | (32,410 | ) | (512,368 | ) | |||||||||||||||||||||||
Interim dividends |
| | | | | (159,987 | ) | (159,987 | ) | (67,700 | ) | (227,687 | ) | |||||||||||||||||||||||
Changes in subsidiaries |
| | | | | | | (308,832 | ) | (308,832 | ) | |||||||||||||||||||||||||
Changes in ownership interests in subsidiaries |
| 307,909 | | | | | 307,909 | 841,724 | 1,149,633 | |||||||||||||||||||||||||||
Interest of hybrid bonds |
| | | | | (32,585 | ) | (32,585 | ) | (18,090 | ) | (50,675 | ) | |||||||||||||||||||||||
Disposal of treasury shares |
| 11 | | | 137 | | 148 | | 148 | |||||||||||||||||||||||||||
Others |
| 692 | | 1,891 | | (869 | ) | 1,714 | 1,443 | 3,157 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total transactions with owners of the controlling company |
| 308,612 | | 1,891 | 137 | (673,399 | ) | (362,759 | ) | 416,135 | 53,376 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance as of September 30, 2015 |
1,392,330 | 996,919 | (543,535 | ) | (1,534,320 | ) | 40,250,028 | 41,043,825 | 3,955,160 | 44,998,985 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the condensed consolidated interim financial statements.
9
POSCO and Subsidiaries
Condensed Consolidated Interim Statements of Changes in Equity, Continued
For the nine-month periods ended September 30, 2016 and 2015
(Unaudited)
Attributable to owners of the controlling company | Non- | |||||||||||||||||||||||||||||||||||
Share | Capital | Hybrid | Treasury | Retained | controlling | |||||||||||||||||||||||||||||||
(in millions of Won) | capital | surplus | bonds | Reserves | shares | earnings | Subtotal | interests | Total | |||||||||||||||||||||||||||
Balance as of January 1, 2016 |
1,383,623 | 996,919 | (594,756 | ) | (1,533,898 | ) | 40,501,059 | 41,235,350 | 3,834,872 | 45,070,222 | ||||||||||||||||||||||||||
Comprehensive income (loss): |
||||||||||||||||||||||||||||||||||||
Profit (loss) |
| | | | | 1,197,014 | 1,197,014 | (162,572 | ) | 1,034,442 | ||||||||||||||||||||||||||
Other comprehensive income (loss) |
||||||||||||||||||||||||||||||||||||
Remeasurements of defined benefit pension plans, net of tax |
| | | | | (51,006 | ) | (51,006 | ) | (8,419 | ) | (59,425 | ) | |||||||||||||||||||||||
Capital adjustment arising from investments in equity-accounted investees, net of tax |
| | | (80,192 | ) | | | (80,192 | ) | (16,323 | ) | (96,515 | ) | |||||||||||||||||||||||
Net changes in the unrealized fair value of available-for-sale investments, net of tax |
| | | 219,029 | | | 219,029 | (1,509 | ) | 217,520 | ||||||||||||||||||||||||||
Foreign currency translation differences, net of tax |
| | | (222,641 | ) | | | (222,641 | ) | (32,979 | ) | (255,620 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total comprehensive income (loss) |
| | | (83,804 | ) | | 1,146,008 | 1,062,204 | (221,802 | ) | 840,402 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Transactions with owners of the controlling company, recognized directly in equity: |
||||||||||||||||||||||||||||||||||||
Year-end dividends |
| | | | | (479,974 | ) | (479,974 | ) | (50,333 | ) | (530,307 | ) | |||||||||||||||||||||||
Interim dividends |
| | | | | (119,994 | ) | (119,994 | ) | | (119,994 | ) | ||||||||||||||||||||||||
Changes in subsidiaries |
| | | | | | | 6,898 | 6,898 | |||||||||||||||||||||||||||
Changes in ownership interests in subsidiaries |
| 5,019 | | | | | 5,019 | (5,982 | ) | (963 | ) | |||||||||||||||||||||||||
Interest of hybrid bonds |
| | | | | (32,724 | ) | (32,724 | ) | (18,156 | ) | (50,880 | ) | |||||||||||||||||||||||
Disposal of treasury shares |
| 6 | | | 150 | | 156 | | 156 | |||||||||||||||||||||||||||
Others |
| 150 | | 1,184 | | (42 | ) | 1,292 | (3,797 | ) | (2,505 | ) | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Total transactions with owners of the controlling company |
| 5,175 | | 1,184 | 150 | (632,734 | ) | (626,225 | ) | (71,370 | ) | (697,595 | ) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||
Balance as of September 30, 2016 |
1,388,798 | 996,919 | (677,376 | ) | (1,533,748 | ) | 41,014,333 | 41,671,329 | 3,541,700 | 45,213,029 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying notes to the condensed consolidated interim financial statements.
10
Condensed Consolidated Interim Statements of Cash Flows
For the nine-month periods ended September 30, 2016 and 2015
(Unaudited)
(in millions of Won) | Note | September 30, 2016 | September 30, 2015 | |||||||||
Cash flows from operating activities |
||||||||||||
Profit (loss) |
(205,645 | ) | ||||||||||
Adjustments for: |
||||||||||||
Depreciation |
2,142,737 | 2,095,456 | ||||||||||
Amortization |
276,615 | 283,427 | ||||||||||
Finance income |
(646,857 | ) | (1,009,846 | ) | ||||||||
Finance costs |
1,354,590 | 1,950,651 | ||||||||||
Income tax expense |
442,249 | 337,593 | ||||||||||
Impairment loss on property, plant and equipment |
74,026 | 128,200 | ||||||||||
Gain on disposal of property, plant and equipment |
(22,467 | ) | (19,312 | ) | ||||||||
Loss on disposal of property, plant and equipment |
61,073 | 70,918 | ||||||||||
Impairment loss of intangible assets |
14,660 | 114,074 | ||||||||||
Share of loss (profit) of equity-accounted investees |
(90,622 | ) | 361,932 | |||||||||
Impairment loss on assets held for sale |
24,759 | 132,244 | ||||||||||
Gain on disposal of assets held for sale |
(22,269 | ) | (227,009 | ) | ||||||||
Costs for defined benefit plans |
219,713 | 188,045 | ||||||||||
Bad debt expenses |
80,028 | 208,289 | ||||||||||
Loss on valuation of inventories |
128,621 | 123,745 | ||||||||||
Contribution to provisions |
152,143 | 53,936 | ||||||||||
Others, net |
2,847 | (22,527 | ) | |||||||||
|
|
|
|
|||||||||
4,191,846 | 4,769,816 | |||||||||||
|
|
|
|
|||||||||
Changes in operating assets and liabilities |
35 | 759,528 | 1,961,949 | |||||||||
Interest received |
152,563 | 139,737 | ||||||||||
Interest paid |
(472,339 | ) | (591,912 | ) | ||||||||
Dividends received |
107,380 | 94,655 | ||||||||||
Income taxes paid |
(579,842 | ) | (640,427 | ) | ||||||||
|
|
|
|
|||||||||
Net cash provided by operating activities |
5,528,173 | |||||||||||
|
|
|
|
See accompanying notes to the condensed consolidated interim financial statements.
11
POSCO and Subsidiaries
Condensed Consolidated Interim Statements of Cash Flows, Continued
For the nine-month periods ended September 30, 2016 and 2015
(Unaudited)
(in millions of Won) | Note | September 30, 2016 | September 30, 2015 | |||||||||
Cash flows from investing activities |
||||||||||||
Acquisitions of short-term financial instruments |
(9,981,223 | ) | ||||||||||
Proceeds from disposal of short-term financial instruments |
13,627,927 | 7,812,432 | ||||||||||
Increase in loans |
(720,280 | ) | (258,056 | ) | ||||||||
Collection of loans |
290,596 | 195,821 | ||||||||||
Acquisitions of available-for-sale investments |
(87,081 | ) | (65,334 | ) | ||||||||
Proceeds from disposal of available-for-sale investments |
24,208 | 169,280 | ||||||||||
Acquisitions of investment in associates and joint ventures |
(169,084 | ) | (62,794 | ) | ||||||||
Proceeds from disposal of investment in associates and joint ventures |
4,754 | 5,306 | ||||||||||
Acquisition of investment property |
(36,012 | ) | (64,265 | ) | ||||||||
Proceeds from disposal of investment property |
9,735 | 1,120 | ||||||||||
Acquisitions of property, plant and equipment |
(1,991,060 | ) | (2,021,288 | ) | ||||||||
Proceeds from disposal of property, plant and equipment |
36,020 | 62,941 | ||||||||||
Acquisitions of intangible assets |
(106,826 | ) | (250,838 | ) | ||||||||
Proceeds from disposal of intangible assets |
7,810 | 25,195 | ||||||||||
Proceeds from disposal of assets held for sale |
174,993 | 121,002 | ||||||||||
Cash paid in acquisition of business, net of cash acquired |
4,503 | | ||||||||||
Cash received from disposal of business, net of cash transferred |
17,021 | 436,257 | ||||||||||
Others, net |
31,080 | (29,604 | ) | |||||||||
|
|
|
|
|||||||||
Net cash used in investing activities |
(3,361,121 | ) | (3,904,048 | ) | ||||||||
|
|
|
|
|||||||||
Cash flows from financing activities |
||||||||||||
Proceeds from borrowings |
1,888,899 | 1,421,499 | ||||||||||
Repayment of borrowings |
(3,520,653 | ) | (2,008,296 | ) | ||||||||
Repayment of short-term borrowings, net |
(887,631 | ) | (225,555 | ) | ||||||||
Capital contribution from non-controlling interests and proceeds from disposal of subsidiary while maintaining control |
24,422 | 1,249,743 | ||||||||||
Payment of cash dividends |
(643,045 | ) | (821,293 | ) | ||||||||
Payment of interest of hybrid bonds |
(51,135 | ) | (50,824 | ) | ||||||||
Other, net |
(33,884 | ) | (27,379 | ) | ||||||||
|
|
|
|
|||||||||
Net cash used in financing activities |
(3,223,027 | ) | (462,105 | ) | ||||||||
|
|
|
|
|||||||||
Effect of exchange rate fluctuation on cash held |
(79,317 | ) | 59,331 | |||||||||
Net increase (decrease) in cash and cash equivalents |
(1,469,887 | ) | 1,221,351 | |||||||||
Cash and cash equivalents at beginning of the period |
8 | 4,871,184 | 4,022,136 | |||||||||
|
|
|
|
|||||||||
Cash and cash equivalents at end of the period |
5,243,487 | |||||||||||
|
|
|
|
See accompanying notes to the condensed consolidated interim financial statements.
12
Notes to the Condensed Consolidated Interim Financial Statements
As of September 30, 2016
(Unaudited)
1. General Information
General information about POSCO, its 39 domestic subsidiaries including POSCO ENGINEERING & CONSTRUCTION., LTD., 165 foreign subsidiaries including POSCO America Corporation (collectively, the Company) and its 103 associates and joint ventures are as follows:
(a) | The controlling company |
POSCO, the controlling company, was incorporated on April 1, 1968, to manufacture and sell steel rolled products and plates in the domestic and overseas markets.
The shares of POSCO have been listed on the Korea Exchange since 1988. POSCO owns and operates two steel plants (Pohang and Gwangyang) and one office in Korea and it also operates internationally through seven of its overseas liaison offices.
As of September 30, 2016, the shares of the POSCO are listed on the Korea Exchange, while its depository receipts are listed on the New York Stock Exchanges.
(b) | Consolidated subsidiaries included for the first time during the nine-month period ended September 30, 2016 were as follows: |
Company |
Date of inclusion | Ownership (%) | Reason | |||
Daewoo Minerals Canada Corporation |
March 2016 | 100.00 | New establishment | |||
POCA STEM Co., Ltd. |
June 2016 | 100.00 | Acquisition of control | |||
Chongqing POSCO CISL Automotive Steel Co., Ltd. |
July 2016 | 51.00 | New establishment | |||
Posco e&c Songdo International Building |
September 2016 | 100.00 | Transferred from associate to subsidiary |
(c) | Subsidiaries excluded from consolidation during the nine-month period ended September 30, 2016 were as follows: |
Company |
Date of exclusion |
Reason | ||
Tamra Offshore Wind Power Co., Ltd. |
January 2016 | Disposal | ||
POSCO Investment Co., Ltd. |
January 2016 | Merged into POSCO Asia Co., Ltd. | ||
Xenesys Inc. |
February 2016 | Disposal | ||
Posco LED Co., Ltd. |
March 2016 | Disposal | ||
POSHIMETAL Co., Ltd. |
March 2016 | Merged into POSCO Co., Ltd. | ||
PMM PIPE |
April 2016 | Merged into POSCO-JEPC Co., Ltd. | ||
POSCO GREEN GAS TECHNOLOGY |
May 2016 | Merged into POSCO Co., Ltd. | ||
Qingdao Pos-metal Co., Ltd. |
May 2016 | Disposal | ||
POSCO FOUNDATION |
June 2016 | Exclusion upon liquidation | ||
POSCO MEXICO HUMAN TECH S.A. de C.V. |
June 2016 | Merged into POSCO MEXICO S.A. DE C.V. | ||
POSCO AST |
July 2016 | Merged into POSCO Processing & Service | ||
KRAKATAU POS-CHEM DONG-SUH CHEMICAL |
September 2016 | Classified as an associate due to disposal of shares | ||
Dalian POSCO ICT-DONGFANG Engineering Co., Ltd. |
September 2016 | Merged into POSCO ICT-China |
13
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2. Statement of Compliance
Statement of compliance
The condensed consolidated interim financial statements have been prepared in accordance with Korean International Financial Reporting Standards (K-IFRS), as prescribed in the Act on External Audit of Corporations.
These condensed consolidated interim financial statements have been prepared in accordance with K-IFRS No. 1034 Interim Financial Reporting as part of the period covered by the Companys K-IFRS annual financial statements. Selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in financial position and performance of the Company since the last annual consolidated financial statements as of and for the year ended December 31, 2015. These condensed consolidated interim financial statements do not include all of the disclosures required for full annual financial statements.
Use of estimates and judgments
(a) | Judgments, assumptions and estimation uncertainties |
The preparation of the condensed interim financial statements in conformity with K-IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.
In preparing these condensed consolidated interim financial statements, the significant judgments made by management in applying the Companys accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements as of and for the year ended December 31, 2015.
(b) | Measurement of fair value |
The Companys accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Company has an established control framework with respect to the measurement of fair values. This includes a valuation team that has overall responsibility for overseeing all significant fair value measurements, including Level 3 fair values, and reports directly to the financial officer.
The valuation team regularly reviews significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation team assesses the evidence obtained from the third parties to support the conclusion that such valuations meet the requirements of K-IFRS including the level in the fair value hierarchy in which such valuation techniques should be classified.
14
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
The Company reports the significant valuation matters to the Audit Committee.
When measuring the fair value of an asset or a liability, the Company uses market observable data as far as possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows.
| Level 1 - unadjusted quoted prices in active markets for identical assets or liabilities. |
| Level 2 - inputs other than quoted prices included in Level 1 that are observable for the assets or liabilities, either directly or indirectly. |
| Level 3 - inputs for the assets or liabilities that are not based on observable market data. |
If the inputs used to measure the fair value of an asset or a liability might be categorized in different levels of the fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Company recognizes transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred.
Further information about the assumptions made in measuring fair value is included in note 21.
3. Summary of Significant Accounting Policies
Except as described in K-IFRS No. 1034 Interim Financial Reporting, the accounting policies applied by the Company in these condensed consolidated interim financial statements are the same as those applied by the Company in its consolidated financial statements as of and for the year ended December 31, 2015.
15
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
4. Trade Accounts and Notes Receivable
Trade accounts and notes receivable as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Trade accounts and notes receivable |
8,953,245 | |||||||
Finance lease receivables |
13,228 | 21,042 | ||||||
Due from customers for contract work |
958,548 | 1,218,031 | ||||||
Less: Allowance for doubtful accounts |
(443,602 | ) | (596,383 | ) | ||||
|
|
|
|
|||||
9,595,935 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Trade accounts and notes receivable |
126,200 | |||||||
Finance lease receivables |
13,928 | 22,758 | ||||||
Less: Allowance for doubtful accounts |
(32,367 | ) | (28,620 | ) | ||||
|
|
|
|
|||||
120,338 | ||||||||
|
|
|
|
The trade accounts and notes receivable sold to financial institutions, for which the derecognition conditions were not met,
amounted to 284,584 million as of September 30, 2016. The fair value of trade accounts and notes receivable approximates the carrying amounts and trade accounts and notes receivable are included in short-term
borrowings from financial institutions (Note 15). W
5. Other Receivables
Other receivables as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Loans |
405,281 | |||||||
Other accounts receivable |
1,065,616 | 1,255,075 | ||||||
Accrued income |
117,435 | 136,762 | ||||||
Deposits |
85,969 | 89,444 | ||||||
Others |
23,065 | 20,383 | ||||||
Less: Allowance for doubtful accounts |
(248,412 | ) | (227,066 | ) | ||||
|
|
|
|
|||||
1,679,879 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Loans |
725,968 | |||||||
Other accounts receivable |
113,771 | 142,290 | ||||||
Accrued income |
1,876 | 1,236 | ||||||
Deposits |
116,506 | 141,373 | ||||||
Less: Allowance for doubtful accounts |
(152,871 | ) | (147,609 | ) | ||||
|
|
|
|
|||||
863,258 | ||||||||
|
|
|
|
16
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
6. Other Financial Assets
Other financial assets as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Derivatives assets |
94,603 | |||||||
Available-for-sale securities (bonds) |
18,814 | 17,994 | ||||||
Current portion of held-to-maturity securities |
921 | 21,490 | ||||||
Short-term financial instruments(*1,2) |
4,628,942 | 3,776,300 | ||||||
|
|
|
|
|||||
3,910,387 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Derivatives assets |
93,886 | |||||||
Available-for-sale securities (equity instruments)(*3,4) |
2,175,716 | 2,095,206 | ||||||
Available-for-sale securities (bonds) |
48,761 | 36,914 | ||||||
Available-for-sale securities (others) |
66,717 | 59,630 | ||||||
Held-to-maturity securities |
2,098 | 1,889 | ||||||
Long-term financial instruments(*2) |
40,880 | 53,935 | ||||||
|
|
|
|
|||||
2,341,460 | ||||||||
|
|
|
|
(*1) | As of September 30, 2016 and December 31, 2015, |
(*2) | As of September 30, 2016 and December 31, 2015, financial instruments amounting to |
(*3) | During the nine-month period ended September 30, 2016, there were objective evidences of impairment for listed equity securities such as Nippon Steel & Sumitomo Metal Corporation and others due to the significant or
prolonged decline in the fair value of the shares and for non-listed equity securities such as Troika Foreign Resource Development Fund and others since its carrying amount significantly exceeded its fair value. As a result, an impairment loss
of |
(*4) | As of September 30, 2016 and December 31, 2015, |
17
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
7. Inventories
Inventories as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Finished goods |
1,381,018 | |||||||
Merchandise |
762,257 | 715,951 | ||||||
Semi-finished goods |
1,195,114 | 1,390,382 | ||||||
Raw materials |
1,670,986 | 1,868,773 | ||||||
Fuel and materials |
832,947 | 810,516 | ||||||
Construction inventories |
985,169 | 828,071 | ||||||
Materials-in-transit |
1,368,379 | 1,382,291 | ||||||
Others |
93,317 | 79,581 | ||||||
|
|
|
|
|||||
8,075,567 | 8,456,583 | |||||||
|
|
|
|
|||||
Less: Allowance for inventories valuation |
(173,115 | ) | (231,378 | ) | ||||
|
|
|
|
|||||
8,225,205 | ||||||||
|
|
|
|
The amounts of loss on valuation of inventories recognized within cost of sales during the nine-month period ended September
30, 2016 and the year ended December 31, 2015 were 128,621 million and W152,952 million, respectively. W
18
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
8. Assets Held for Sale
Details of assets held for sale and related liabilities as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||||||||||||||||||
The controlling company(*1) |
Subsidiaries (*2,3) |
Total | The controlling company(*1) |
Subsidiaries (*3,4) |
Total | |||||||||||||||||||
Assets |
||||||||||||||||||||||||
Cash and cash equivalents(*5) |
| | | 999 | 999 | |||||||||||||||||||
Trade accounts and notes receivable |
| | | | 7,724 | 7,724 | ||||||||||||||||||
Investment in associates |
| | | | 4,626 | 4,626 | ||||||||||||||||||
Property, plant and equipment |
26,080 | 318,782 | 344,862 | 25,892 | 10,383 | 36,275 | ||||||||||||||||||
Others |
| | | | 7,657 | 7,657 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
318,782 | 344,862 | 25,892 | 31,389 | 57,281 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Liabilities |
||||||||||||||||||||||||
Borrowings |
| | | 26,500 | 26,500 | |||||||||||||||||||
Others |
| | | | 7,702 | 7,702 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| | | 34,202 | 34,202 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | During the year ended December 31, 2015, the Company determined to exchange 1FINEX facilities with the shares of newly established company in India, and has signed in Memorandum of Association (MOA) with Uttam Galva
Steels Limited in India. The Company has classified the related facilities of |
(*2) | During the nine-month period ended September 30, 2016, Posco e&c Songdo International Building, a subsidiary of the Company, determined to dispose of the Songdo office building of POSCO ENGINEERING &
CONSTRUCTION., Ltd. and entered into a sales contract with Booyoung Housing Co., Ltd. on September 9, 2016. As a result, the Company classified them as assets held for sale and recognized |
(*3) | Besides the above, the controlling company and subsidiaries of the Company (POSCO Energy Co., Ltd., POSCO M-TECH, POSCO CHEMTECH, POSCO ICT, POSCO Humans and SANTOS CMI Guatemala S.A.) determined to dispose of certain tangible assets including land and disused facilities and classified them as assets held for sale. |
(*4) | During the year ended December 31, 2015, the Company determined to dispose of its shares in POSCO LED Co., Ltd., a subsidiary of the Company, to Armitron consortium, and reclassified related assets and liabilities as
assets held for sale. Disposal of the assets and liabilities held for sale was completed during the nine-month period ended September 30, 2016, and the Company recognized |
(*5) | Cash and cash equivalents classified as assets held for sale are included in the beginning balance of statement of cash flows for the nine-month period ended September 30, 2016. |
19
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
9. Investments in Associates and Joint Ventures
(a) | Details of investments in associates as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||||||||||||||
Company |
Number of shares | Ownership (%) | Acquisition cost | Book value | Book value | |||||||||||||||
[Domestic] |
||||||||||||||||||||
EQP POSCO Global NO1 Natural Resources PEF |
178,713,975,892 | 28.93 | 175,676 | |||||||||||||||||
SeAH Changwon Integrated Special Steel(*1,2) |
| | | | 165,754 | |||||||||||||||
POSCO PLANTEC CO., LTD(*2) |
133,711,880 | 73.94 | 217,282 | 103,788 | 171,218 | |||||||||||||||
SNNC |
18,130,000 | 49.00 | 90,650 | 102,628 | 111,326 | |||||||||||||||
QSONE Co., Ltd. |
200,000 | 50.00 | 84,395 | 84,550 | 83,919 | |||||||||||||||
Chuncheon Energy Corp. |
10,539,989 | 29.90 | 52,700 | 46,009 | 30,420 | |||||||||||||||
UITrans LRT Co., Ltd.(*3) |
7,252,281 | 38.19 | 36,261 | 45,141 | 40,903 | |||||||||||||||
Incheon-Gimpo Expressway Co., Ltd(*3) |
9,032,539 | 20.89 | 45,163 | 37,653 | 39,447 | |||||||||||||||
BLUE OCEAN Private Equity Fund |
333 | 27.52 | 33,300 | 35,278 | 35,437 | |||||||||||||||
KoFC POSCO HANHWA KB Shared |
15,300 | 12.50 | 15,300 | 15,604 | 14,829 | |||||||||||||||
Keystone-HYUNDAI SECURITIES |
13,800,000 | 40.45 | 13,800 | 13,261 | 13,015 | |||||||||||||||
Daesung Steel(*5) |
108,038 | 17.54 | 14,000 | 13,170 | 14,000 | |||||||||||||||
CHUNGJU ENTERPRISE CITY |
2,008,000 | 29.53 | 10,040 | 12,041 | 12,265 | |||||||||||||||
KONES, Corp. |
3,250,000 | 41.67 | 6,893 | 5,462 | 5,775 | |||||||||||||||
Others (33 companies)(*3) |
51,527 | 33,933 | ||||||||||||||||||
|
|
|
|
|||||||||||||||||
741,587 | 947,917 | |||||||||||||||||||
|
|
|
|
|||||||||||||||||
[Foreign] |
||||||||||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
135,219,000 | 25.04 | 150,779 | 199,571 | 222,269 | |||||||||||||||
AES-VCM Mong Duong Power Company Limited(*4) |
| 30.00 | 74,161 | 130,536 | 153,271 | |||||||||||||||
7623704 Canada Inc.(*5) |
114,452,000 | 10.40 | 124,341 | 124,848 | 134,034 | |||||||||||||||
Eureka Moly LLC |
| 20.00 | 240,123 | 81,286 | 87,878 | |||||||||||||||
AMCI (WA) PTY LTD. |
49 | 49.00 | 209,664 | 68,692 | 72,289 | |||||||||||||||
Nickel Mining Company SAS |
3,234,698 | 49.00 | 157,585 | 60,289 | 76,445 | |||||||||||||||
KOREA LNG LTD. |
2,400 | 20.00 | 135,205 | 51,584 | 53,548 | |||||||||||||||
NCR LLC |
| 29.41 | 32,348 | 33,342 | 35,447 | |||||||||||||||
PT. Batutua Tembaga Raya |
128,285 | 24.10 | 21,824 | 22,296 | 15,382 | |||||||||||||||
Zhongyue POSCO (Qinhuangdao) |
10,200,000 | 34.00 | 9,517 | 16,865 | 19,311 | |||||||||||||||
PT. Wampu Electric Power(*3) |
8,708,400 | 20.00 | 10,044 | 8,972 | 8,855 | |||||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
50 | 25.00 | 4,723 | 6,221 | 7,061 | |||||||||||||||
Others (26 companies)(*3) |
86,379 | 42,264 | ||||||||||||||||||
|
|
|
|
|||||||||||||||||
890,881 | 928,054 | |||||||||||||||||||
|
|
|
|
|||||||||||||||||
1,875,971 | ||||||||||||||||||||
|
|
|
|
(*1) | During the nine-month period ended September 30, 2016, the Company sold the security of SeAH Changwon Integrated Special Steel. |
(*2) | During the year ended December 31, 2015, it was reclassified from a subsidiary to an associate. |
(*3) | Investment in associates are provided as collateral related to associates borrowings amounting to |
(*4) | As of September 30, 2016, the security of PSC Energy Global Co., Ltd is provided as collateral related to associates borrowings. |
(*5) | As of September 30, 2016, it was classified as an associate even though the Companys ownership percentage is less than 20% of ownership percentage since the Company has significant influence over the investee when considering its structure of the Board of Directors and others. |
20
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(b) | Details of investments in joint ventures as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||||||||||||||
Company |
Number of shares | Ownership (%) | Acquisition cost | Book value | Book value | |||||||||||||||
[Domestic] |
||||||||||||||||||||
POSCO MITSUBISHI CARBON TECHNOLOGY |
11,568,000 | 60.00 | 104,970 | |||||||||||||||||
POSCO ES MATERIALS |
1,000,000 | 50.00 | 43,000 | 37,018 | 38,447 | |||||||||||||||
|
|
|
|
|||||||||||||||||
120,830 | 143,417 | |||||||||||||||||||
|
|
|
|
|||||||||||||||||
[Foreign] |
||||||||||||||||||||
Roy Hill Holdings Pty Ltd.(*1) |
13,117,972 | 12.50 | 1,528,672 | 1,157,876 | 1,153,434 | |||||||||||||||
POSCO-NPS Niobium LLC |
325,050,000 | 50.00 | 364,609 | 356,444 | 381,461 | |||||||||||||||
CSP-Compania Siderurgica do Pecem |
1,108,696,532 | 20.00 | 558,821 | 339,641 | 80,805 | |||||||||||||||
DMSA/AMSA(*2) |
| 4.00 | 290,236 | 67,126 | 105,964 | |||||||||||||||
BX STEEL POSCO Cold Rolled Sheet Co., Ltd |
| 25.00 | 61,961 | 92,459 | 100,908 | |||||||||||||||
KOBRASCO |
2,010,719,185 | 50.00 | 32,950 | 72,692 | 78,364 | |||||||||||||||
Others (11 companies) |
36,346 | 25,009 | ||||||||||||||||||
|
|
|
|
|||||||||||||||||
2,122,584 | 1,925,945 | |||||||||||||||||||
|
|
|
|
|||||||||||||||||
2,069,362 | ||||||||||||||||||||
|
|
|
|
(*1) | As of September 30, 2016 and December 31, 2015, investments in joint ventures amounting to |
(*2) | As of September 30, 2016 and December 31, 2015, investments in joint ventures amounting to |
21
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(c) | The movements of investments in associates and joint ventures for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows: |
1) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | ||||||||||||||||||||||||
Company |
December 31, 2015 Book value |
Acquisition | Dividend | Share of profits (losses) |
Other increase (decrease)(*1) |
September 30, 2016 Book value |
||||||||||||||||||
[Domestic] |
||||||||||||||||||||||||
EQP POSCO Global NO1 Natural Resources PEF |
222 | | (614 | ) | 191 | 175,475 | ||||||||||||||||||
SeAH Changwon Integrated Special Steel |
165,754 | | | 4,797 | (170,551 | ) | | |||||||||||||||||
POSCO PLANTEC CO., LTD |
171,218 | | | (67,108 | ) | (322 | ) | 103,788 | ||||||||||||||||
SNNC |
111,326 | | | (8,705 | ) | 7 | 102,628 | |||||||||||||||||
QSONE Co.,Ltd. |
83,919 | | | 631 | | 84,550 | ||||||||||||||||||
Chuncheon Energy Corp. |
30,420 | 19,832 | | (4,243 | ) | | 46,009 | |||||||||||||||||
UITrans LRT Co., Ltd. |
40,903 | 4,506 | | (224 | ) | (44 | ) | 45,141 | ||||||||||||||||
Incheon-Gimpo Expressway Co., Ltd |
39,447 | | | (2,223 | ) | 429 | 37,653 | |||||||||||||||||
BLUE OCEAN Private Equity Fund |
35,437 | | | 2,080 | (2,239 | ) | 35,278 | |||||||||||||||||
KoFC POSCO HANHWA KB Shared Growth NO. 2. Private Equity Fund |
14,829 | 1,875 | | 950 | (2,050 | ) | 15,604 | |||||||||||||||||
Keystone-HYUNDAI SECURITIES NO. 1. Private Equity Fund |
13,015 | | | 246 | | 13,261 | ||||||||||||||||||
Daesung Steel |
14,000 | | | (1,404 | ) | 574 | 13,170 | |||||||||||||||||
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co., Ltd. |
12,265 | | | (224 | ) | | 12,041 | |||||||||||||||||
KONES, Corp. |
5,775 | | | (313 | ) | | 5,462 | |||||||||||||||||
POSCO MITSUBISHI CARBON TECHNOLOGY |
104,970 | | | (21,158 | ) | | 83,812 | |||||||||||||||||
POSCO ES MATERIALS |
38,447 | | | (1,428 | ) | (1 | ) | 37,018 | ||||||||||||||||
Others (33 companies) |
33,933 | 17,686 | | 1,805 | (1,897 | ) | 51,527 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
1,091,334 | 44,121 | | (97,135 | ) | (175,903 | ) | 862,417 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
[Foreign] |
||||||||||||||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
222,269 | | (44,602 | ) | 35,512 | (13,608 | ) | 199,571 | ||||||||||||||||
AES-VCM Mong Duong Power Company Limited |
153,271 | | | 20,093 | (42,828 | ) | 130,536 | |||||||||||||||||
7623704 Canada Inc. |
134,034 | | (921 | ) | 410 | (8,675 | ) | 124,848 | ||||||||||||||||
Eureka Moly LLC |
87,878 | | | (14 | ) | (6,578 | ) | 81,286 | ||||||||||||||||
AMCI (WA) PTY LTD. |
72,289 | | | (2,305 | ) | (1,292 | ) | 68,692 | ||||||||||||||||
Nickel Mining Company SAS |
76,445 | | | (13,990 | ) | (2,166 | ) | 60,289 | ||||||||||||||||
KOREA LNG LTD. |
53,548 | | (1,327 | ) | 4,782 | (5,419 | ) | 51,584 | ||||||||||||||||
NCR LLC |
35,447 | | | (19 | ) | (2,086 | ) | 33,342 | ||||||||||||||||
PT. Batutua Tembaga Raya |
15,382 | 7,040 | | | (126 | ) | 22,296 | |||||||||||||||||
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd |
19,311 | | | (448 | ) | (1,998 | ) | 16,865 | ||||||||||||||||
PT. Wampu Electric Power |
8,855 | | | 677 | (560 | ) | 8,972 | |||||||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
7,061 | | | 222 | (1,062 | ) | 6,221 | |||||||||||||||||
Roy Hill Holdings Pty Ltd |
1,153,434 | | | 22,274 | (17,832 | ) | 1,157,876 | |||||||||||||||||
POSCO-NPS Niobium LLC |
381,461 | | (10,893 | ) | 10,884 | (25,008 | ) | 356,444 | ||||||||||||||||
CSP - Compania Siderurgica do Pecem |
80,805 | 88,930 | | 152,954 | 16,952 | 339,641 | ||||||||||||||||||
DMSA/AMSA |
105,964 | 24,624 | | (57,146 | ) | (6,316 | ) | 67,126 | ||||||||||||||||
BX STEEL POSCO Cold Rolled Sheet Co., Ltd. |
100,908 | | | 197 | (8,646 | ) | 92,459 | |||||||||||||||||
KOBRASCO |
78,364 | | (29,297 | ) | 13,310 | 10,315 | 72,692 | |||||||||||||||||
Others (37 companies) |
67,273 | 28,993 | (2,548 | ) | 364 | 28,643 | 122,725 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2,853,999 | 149,587 | (89,588 | ) | 187,757 | (88,290 | ) | 3,013,465 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
193,708 | (89,588 | ) | 90,622 | (264,193 | ) | 3,875,882 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Other increase or decrease represents the changes in investments in associates and joint ventures due to replacement of assets held for sale, disposal and change in capital adjustments arising from translations of financial statements of foreign investees and others. |
22
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | For the year ended December 31, 2015 |
(in millions of Won) | ||||||||||||||||||||||||
Company |
December 31, 2014 Book value |
Acquisition | Dividend | Share of profits (losses) |
Other increase (decrease)(*1) |
December 31, 2015 Book value |
||||||||||||||||||
[Domestic] |
||||||||||||||||||||||||
EQP POSCO Global NO1 Natural Resources PEF |
| | (1,223 | ) | | 175,676 | ||||||||||||||||||
SeAH Changwon Integrated Special Steel |
| 159,978 | | 6,464 | (688 | ) | 165,754 | |||||||||||||||||
POSCO PLANTEC CO., LTD |
| 217,282 | | (46,058 | ) | (6 | ) | 171,218 | ||||||||||||||||
SNNC |
131,671 | | | (20,566 | ) | 221 | 111,326 | |||||||||||||||||
QSONE Co.,Ltd. |
83,849 | | | 70 | | 83,919 | ||||||||||||||||||
Chuncheon Energy Corp. |
| 32,853 | | (2,433 | ) | | 30,420 | |||||||||||||||||
UITrans LRT Co., Ltd. |
30,098 | 9,777 | | 1,086 | (58 | ) | 40,903 | |||||||||||||||||
Incheon-Gimpo Expressway Co., Ltd |
43,045 | | | (3,910 | ) | 312 | 39,447 | |||||||||||||||||
BLUE OCEAN Private Equity Fund |
31,439 | | | 5,645 | (1,647 | ) | 35,437 | |||||||||||||||||
KoFC POSCO HANHWA KB Shared Growth NO. 2. Private Equity Fund |
12,268 | 3,725 | | 211 | (1,375 | ) | 14,829 | |||||||||||||||||
Keystone-HYUNDAI SECURITIES NO. 1. Private Equity Fund |
| 13,800 | | (451 | ) | (334 | ) | 13,015 | ||||||||||||||||
CHUNGJU ENTERPRISE CITY DEVELOPMENT Co., Ltd. |
19,801 | | | (7,536 | ) | | 12,265 | |||||||||||||||||
KONES, Corp. |
5,430 | | | 311 | 34 | 5,775 | ||||||||||||||||||
POSCO MITSUBISHI CARBON TECHNOLOGY |
112,837 | | | (7,841 | ) | (26 | ) | 104,970 | ||||||||||||||||
POSCO ES MATERIALS |
38,021 | | | 440 | (14 | ) | 38,447 | |||||||||||||||||
Others (31 companies) |
33,511 | 17,800 | | 2,877 | (6,255 | ) | 47,933 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
718,869 | 455,215 | | (72,914 | ) | (9,836 | ) | 1,091,334 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
[Foreign] |
||||||||||||||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
172,805 | | (18,602 | ) | 54,351 | 13,715 | 222,269 | |||||||||||||||||
AES-VCM Mong Duong Power Company Limited |
93,021 | 23,146 | | 29,561 | 7,543 | 153,271 | ||||||||||||||||||
7623704 Canada Inc. |
117,100 | | (1,775 | ) | 10,875 | 7,834 | 134,034 | |||||||||||||||||
Eureka Moly LLC |
228,004 | | | (147,270 | ) | 7,144 | 87,878 | |||||||||||||||||
AMCI (WA) PTY LTD. |
88,050 | | | (11,222 | ) | (4,539 | ) | 72,289 | ||||||||||||||||
Nickel Mining Company SAS |
107,408 | | | (25,562 | ) | (5,401 | ) | 76,445 | ||||||||||||||||
KOREA LNG LTD. |
72,089 | | (12,195 | ) | 12,362 | (18,708 | ) | 53,548 | ||||||||||||||||
NCR LLC |
32,598 | | | (62 | ) | 2,911 | 35,447 | |||||||||||||||||
PT. Batutua Tembaga Raya |
14,653 | | | | 729 | 15,382 | ||||||||||||||||||
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd |
21,032 | | (376 | ) | (1,787 | ) | 442 | 19,311 | ||||||||||||||||
PT. Wampu Electric Power |
7,611 | 1,015 | | (261 | ) | 490 | 8,855 | |||||||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
6,969 | | | (76 | ) | 168 | 7,061 | |||||||||||||||||
CAML RESOURCES PTY LTD. |
38,240 | | | (34,987 | ) | (3,253 | ) | | ||||||||||||||||
Roy Hill Holdings Pty Ltd |
1,268,678 | | | (61,589 | ) | (53,655 | ) | 1,153,434 | ||||||||||||||||
POSCO-NPS Niobium LLC |
357,874 | | (13,177 | ) | 12,967 | 23,797 | 381,461 | |||||||||||||||||
CSP - Compania Siderurgica do Pecem |
260,906 | | | (145,206 | ) | (34,895 | ) | 80,805 | ||||||||||||||||
DMSA/AMSA |
165,094 | 72,430 | | (137,723 | ) | 6,163 | 105,964 | |||||||||||||||||
BX STEEL POSCO Cold Rolled Sheet Co., Ltd. |
98,893 | | | 291 | 1,724 | 100,908 | ||||||||||||||||||
KOBRASCO |
99,787 | | (24,380 | ) | 31,124 | (28,167 | ) | 78,364 | ||||||||||||||||
Others (33 companies) |
90,826 | 2,839 | (5,506 | ) | (18,926 | ) | (1,960 | ) | 67,273 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
3,341,638 | 99,430 | (76,011 | ) | (433,140 | ) | (77,918 | ) | 2,853,999 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
554,645 | (76,011 | ) | (506,054 | ) | (87,754 | ) | 3,945,333 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Other increase or decrease represents the changes in investments in associates and joint ventures due to disposals and change in capital adjustments arising from translations of financial statements of foreign investees and others. |
23
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(d) | Summarized financial information of associates and joint ventures as of and for the nine-month period September 30, 2016 and the year ended December 31, 2015 are as follows: |
1) | September 30, 2016 |
(in millions of Won) | ||||||||||||||||||||
Company |
Assets | Liabilities | Equity | Sales | Net income (loss) | |||||||||||||||
[Domestic] |
||||||||||||||||||||
EQP POSCO Global NO1 Natural Resources PEF |
844 | 596,171 | | (2,082 | ) | |||||||||||||||
POSCO PLANTEC CO., LTD |
489,844 | 657,074 | (167,230 | ) | 239,132 | (32,712 | ) | |||||||||||||
SNNC |
727,559 | 498,676 | 228,883 | 371,465 | (12,768 | ) | ||||||||||||||
QSONE Co.,Ltd. |
246,563 | 77,463 | 169,100 | 11,404 | 1,262 | |||||||||||||||
Chuncheon Energy Corp. |
474,588 | 304,496 | 170,092 | | (2,849 | ) | ||||||||||||||
UITrans LRT Co., Ltd. |
359,308 | 271,954 | 87,354 | | (586 | ) | ||||||||||||||
Incheon-Gimpo Expressway Co., Ltd |
854,574 | 651,674 | 202,900 | | (1,391 | ) | ||||||||||||||
BLUE OCEAN Private Equity Fund |
335,557 | 200,452 | 135,105 | 331,375 | 7,557 | |||||||||||||||
KoFC POSCO HANHWA KB Shared |
125,608 | 773 | 124,835 | 9,232 | 7,600 | |||||||||||||||
Keystone-HYUNDAI SECURITIES |
87,526 | 50,711 | 36,815 | | 609 | |||||||||||||||
Daesung Steel |
163,784 | 120,084 | 43,700 | 35,916 | (8,004 | ) | ||||||||||||||
CHUNGJU ENTERPRISE CITY |
144,836 | 134,372 | 10,464 | 2,945 | (760 | ) | ||||||||||||||
KONES, Corp. |
2,016 | 1,339 | 677 | 2,556 | (751 | ) | ||||||||||||||
POSCO MITSUBISHI CARBON TECHNOLOGY |
457,172 | 318,444 | 138,728 | 29,327 | (35,272 | ) | ||||||||||||||
POSCO ES MATERIALS |
81,741 | 39,261 | 42,480 | 25,507 | (2,855 | ) | ||||||||||||||
[Foreign] |
||||||||||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
1,985,962 | 1,185,810 | 800,152 | 366,416 | 141,814 | |||||||||||||||
7623704 Canada Inc. |
1,212,794 | 176 | 1,212,618 | | 21,752 | |||||||||||||||
Nickel Mining Company SAS |
448,066 | 283,515 | 164,551 | 99,131 | (36,025 | ) | ||||||||||||||
KOREA LNG LTD. |
310,587 | 17,863 | 292,724 | 24,715 | 23,912 | |||||||||||||||
PT. Batutua Tembaga Raya |
367,133 | 349,823 | 17,310 | | | |||||||||||||||
Zhongyue POSCO (Qinhuangdao) |
80,204 | 24,793 | 55,411 | 86,655 | (1,295 | ) | ||||||||||||||
PT. Wampu Electric Power |
191,893 | 150,143 | 41,750 | 3,057 | 3,385 | |||||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
59,584 | 33,680 | 25,904 | 57,228 | 865 | |||||||||||||||
Roy Hill Holdings Pty Ltd. |
9,606,019 | 6,770,725 | 2,835,294 | | 178,190 | |||||||||||||||
POSCO-NPS Niobium LLC |
712,685 | | 712,685 | | 23,489 | |||||||||||||||
CSP - Compania Siderurgica do Pecem |
5,085,778 | 3,587,447 | 1,498,331 | 45,088 | 424,538 | |||||||||||||||
DMSA/AMSA |
5,956,140 | 4,311,340 | 1,644,800 | 388,306 | (438,451 | ) | ||||||||||||||
BX STEEL POSCO Cold Rolled Sheet Co., Ltd. |
617,720 | 275,501 | 342,219 | 688,695 | 786 | |||||||||||||||
KOBRASCO |
200,945 | 55,561 | 145,384 | 47,951 | 26,619 |
24
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | December 31, 2015 |
(in millions of Won) | ||||||||||||||||||||
Company |
Assets | Liabilities | Equity | Sales | Net income (loss) | |||||||||||||||
[Domestic] |
||||||||||||||||||||
EQP POSCO Global NO1 Natural Resources PEF |
1,043 | 606,923 | | (1,231 | ) | |||||||||||||||
SeAH Changwon Integrated Special Steel |
1,293,143 | 568,639 | 724,504 | 971,557 | 23,403 | |||||||||||||||
POSCO PLANTEC CO., LTD |
609,655 | 725,406 | (115,751 | ) | 457,180 | (330,819 | ) | |||||||||||||
SNNC |
793,480 | 551,830 | 241,650 | 509,044 | (57,156 | ) | ||||||||||||||
QSONE Co.,Ltd. |
249,482 | 81,644 | 167,838 | 15,068 | 140 | |||||||||||||||
Chuncheon Energy Corp. |
149,025 | 42,094 | 106,931 | | (2,389 | ) | ||||||||||||||
UITrans LRT Co., Ltd. |
343,744 | 267,543 | 76,201 | | (846 | ) | ||||||||||||||
Incheon-Gimpo Expressway Co., Ltd |
648,602 | 458,137 | 190,465 | | (1,567 | ) | ||||||||||||||
BLUE OCEAN Private Equity Fund |
380,000 | 244,316 | 135,684 | 492,065 | 24,422 | |||||||||||||||
KoFC POSCO HANHWA KB Shared |
119,747 | 1,112 | 118,635 | 5,012 | 1,804 | |||||||||||||||
Keystone-HYUNDAI SECURITIES |
68,315 | 31,626 | 36,689 | | (1,956 | ) | ||||||||||||||
CHUNGJU ENTERPRISE CITY |
154,695 | 137,471 | 17,224 | 21,518 | (30,023 | ) | ||||||||||||||
KONES, Corp. |
3,544 | 2,114 | 1,430 | 5,337 | 746 | |||||||||||||||
POSCO MITSUBISHI CARBON TECHNOLOGY |
489,393 | 315,392 | 174,001 | | (13,068 | ) | ||||||||||||||
POSCO ES MATERIALS |
84,719 | 39,381 | 45,338 | 29,214 | 880 | |||||||||||||||
[Foreign] |
||||||||||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
2,223,846 | 1,333,048 | 890,798 | 554,927 | 220,203 | |||||||||||||||
7623704 Canada Inc. |
1,300,951 | 7 | 1,300,944 | 76,114 | 118,007 | |||||||||||||||
Nickel Mining Company SAS |
445,685 | 238,695 | 206,990 | 155,980 | (45,748 | ) | ||||||||||||||
KOREA LNG LTD. |
257,773 | 36 | 257,737 | 63,574 | 61,806 | |||||||||||||||
PT. Batutua Tembaga Raya |
286,761 | 268,933 | 17,828 | | | |||||||||||||||
Zhongyue POSCO (Qinhuangdao) |
107,874 | 45,534 | 62,340 | 114,994 | (5,783 | ) | ||||||||||||||
PT. Wampu Electric Power |
201,383 | 160,159 | 41,224 | 17,473 | (1,304 | ) | ||||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
65,973 | 38,336 | 27,637 | 67,700 | (403 | ) | ||||||||||||||
CAML RESOURCES PTY LTD |
136,112 | 41,768 | 94,344 | 146,909 | (20,110 | ) | ||||||||||||||
Roy Hill Holdings Pty Ltd. |
9,295,492 | 6,584,536 | 2,710,956 | | (492,709 | ) | ||||||||||||||
POSCO-NPS Niobium LLC |
762,719 | | 762,719 | | 25,935 | |||||||||||||||
CSP - Compania Siderurgica do Pecem |
3,839,967 | 3,319,880 | 520,087 | | (721,937 | ) | ||||||||||||||
DMSA/AMSA |
6,415,380 | 4,812,244 | 1,603,136 | 737,604 | (3,308,836 | ) | ||||||||||||||
BX STEEL POSCO Cold Rolled Sheet Co., Ltd. |
703,408 | 327,391 | 376,017 | 936,590 | 1,162 | |||||||||||||||
KOBRASCO |
187,823 | 31,094 | 156,729 | 94,169 | 62,248 |
10. Joint Operations
Details of significant joint operations that the Company is participating in as a party to a joint arrangement as of September 30, 2016 are as follows:
Joint operations |
Operation |
Ownership (%) | Location | |||||
Myanmar A-1/A-3 mine |
Mine development | 51.00 | Myanmar | |||||
Offshore midstream |
Mine development | 51.00 | Myanmar | |||||
Greenhills mine |
Mine development | 20.00 | Canada | |||||
Arctos Anthracite coal project |
Mine development | 50.00 | Canada | |||||
Mt. Thorley J/V |
Mine development | 20.00 | Australia | |||||
POSMAC J/V |
Mine development | 20.00 | Australia | |||||
CD J/V |
Mine development | 5.00 | Australia | |||||
RUM J/V |
Mine development | 10.00 | Australia |
25
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
11. Investment Property, Net
Changes in the carrying amount of investment property for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows:
(a) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Beginning | Acquisitions | Disposals | Depreciation | Others(*1) | Ending | ||||||||||||||||||
Land |
23,797 | (6,765 | ) | | 32,622 | 396,533 | ||||||||||||||||||
Buildings |
696,526 | 7,542 | (2,835 | ) | (17,898 | ) | (19,806 | ) | 663,529 | |||||||||||||||
Structures |
1,819 | 1 | | (189 | ) | 407 | 2,038 | |||||||||||||||||
Construction-in-progress |
39,068 | 7,498 | | | (4,109 | ) | 42,457 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
38,838 | (9,600 | ) | (18,087 | ) | 9,114 | 1,104,557 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Includes reclassifications resulting from changing purpose of use, adjustments of foreign currency translation difference and others. |
(b) | For the year ended December 31, 2015 |
(in millions of Won) | Beginning | Acquisitions | Business combination |
Disposals | Depreciation(*1) | Others(*2) | Ending | |||||||||||||||||||||
Land |
2,665 | 5,964 | (433 | ) | (85 | ) | (76,744 | ) | 346,879 | |||||||||||||||||||
Buildings |
591,647 | 49,281 | 26,750 | (909 | ) | (25,391 | ) | 55,148 | 696,526 | |||||||||||||||||||
Structures |
2,060 | 40 | | | (173 | ) | (108 | ) | 1,819 | |||||||||||||||||||
Construction-in-progress |
46,373 | 9,492 | | | | (16,797 | ) | 39,068 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
61,478 | 32,714 | (1,342 | ) | (25,649 | ) | (38,501 | ) | 1,084,292 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Impairment loss on investment property amounting to |
(*2) | Includes reclassifications resulting from changing purpose of use, adjustments of foreign currency translation difference and others. |
26
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
12. Property, Plant and Equipment, Net
Changes in the carrying amount of property, plant and equipment for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows:
(a) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Beginning | Acquisitions | Business combination |
Disposals | Depreciation(*1) | Others(*2) | Ending | |||||||||||||||||||||
Land |
6,648 | 13,967 | (14,680 | ) | | (17,425 | ) | 2,561,317 | ||||||||||||||||||||
Buildings |
5,165,725 | 22,135 | 310,180 | (10,588 | ) | (271,993 | ) | (296,022 | ) | 4,919,437 | ||||||||||||||||||
Structures |
2,949,413 | 12,533 | | (799 | ) | (159,955 | ) | 103,465 | 2,904,657 | |||||||||||||||||||
Machinery and equipment |
21,093,743 | 123,124 | | (21,987 | ) | (1,679,842 | ) | 668,573 | 20,183,611 | |||||||||||||||||||
Vehicles |
52,005 | 7,736 | 63 | (1,682 | ) | (13,940 | ) | 3,042 | 47,224 | |||||||||||||||||||
Tools |
73,478 | 11,106 | | (685 | ) | (19,984 | ) | 1,626 | 65,541 | |||||||||||||||||||
Furniture and fixtures |
148,099 | 17,734 | 1,629 | (3,832 | ) | (39,186 | ) | (479 | ) | 123,965 | ||||||||||||||||||
Finance lease assets |
92,796 | 79,803 | | (27 | ) | (13,776 | ) | 1,710 | 160,506 | |||||||||||||||||||
Construction-in-progress |
2,374,789 | 1,462,391 | | (610 | ) | | (1,492,687 | ) | 2,343,883 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1,743,210 | 325,839 | (54,890 | ) | (2,198,676 | ) | (1,028,197 | ) | 33,310,141 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Impairment losses on property, plant and equipment amounting to |
(*2) | Includes assets transferred from construction-in-progress, reclassifications resulting from changing purpose of use, adjustments of foreign currency translation differences and others. |
(b) | For the year ended December 31, 2015 |
(in millions of Won) | Beginning | Acquisitions | Business combination |
Disposals | Depreciation(*1) | Others(*2) | Ending | |||||||||||||||||||||
Land |
47,858 | 12,520 | (30,222 | ) | (1,517 | ) | (257,120 | ) | 2,572,807 | |||||||||||||||||||
Buildings |
5,359,324 | 57,042 | 56,156 | (20,759 | ) | (349,774 | ) | 63,736 | 5,165,725 | |||||||||||||||||||
Structures |
3,030,163 | 23,149 | | (3,819 | ) | (213,550 | ) | 113,470 | 2,949,413 | |||||||||||||||||||
Machinery and equipment |
21,199,885 | 239,430 | 301 | (74,445 | ) | (2,244,183 | ) | 1,972,755 | 21,093,743 | |||||||||||||||||||
Vehicles |
56,695 | 9,735 | | (1,601 | ) | (18,221 | ) | 5,397 | 52,005 | |||||||||||||||||||
Tools |
64,069 | 25,230 | 1,714 | (1,169 | ) | (29,401 | ) | 13,035 | 73,478 | |||||||||||||||||||
Furniture and fixtures |
143,782 | 43,697 | 1,497 | (1,502 | ) | (63,754 | ) | 24,379 | 148,099 | |||||||||||||||||||
Finance lease assets |
80,081 | 598 | 157 | (98 | ) | (9,026 | ) | 21,084 | 92,796 | |||||||||||||||||||
Construction-in-progress |
2,505,908 | 2,245,729 | | (4,418 | ) | (17,846 | ) | (2,354,584 | ) | 2,374,789 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2,692,468 | 72,345 | (138,033 | ) | (2,947,272 | ) | (397,848 | ) | 34,522,855 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Impairment losses on property, plant and equipment amounting to |
(*2) | Includes assets transferred from construction-in-progress, reclassifications resulting from changing purpose of use, adjustments of foreign currency translation differences and others. |
27
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
13. Goodwill and Other Intangible Assets, Net
Changes in the carrying amount of goodwill and other intangible assets for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows:
(a) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Beginning | Acquisitions | Disposals | Amortization | Impairment loss |
Others(*2) | Ending | |||||||||||||||||||||
Goodwill |
| | | (860 | ) | (888 | ) | 1,460,206 | ||||||||||||||||||||
Intellectual property rights |
2,667,086 | 20,563 | (753 | ) | (146,629 | ) | (9,865 | ) | 20,817 | 2,551,219 | ||||||||||||||||||
Premium in rental(*1) |
127,949 | 1,418 | (7,237 | ) | (151 | ) | (1,437 | ) | (1,936 | ) | 118,606 | |||||||||||||||||
Development expense |
135,796 | 775 | | (43,552 | ) | | 26,518 | 119,537 | ||||||||||||||||||||
Port facilities usage rights |
264,801 | | | (11,450 | ) | | 7,033 | 260,384 | ||||||||||||||||||||
Exploratation and evaluation assets |
151,144 | 37,830 | | | | (27,724 | ) | 161,250 | ||||||||||||||||||||
Mining development assets |
| 12,634 | | | | (12,634 | ) | | ||||||||||||||||||||
Customer relationships |
559,809 | | | (33,869 | ) | | (1,950 | ) | 523,990 | |||||||||||||||||||
Power generation permit |
539,405 | | | | | | 539,405 | |||||||||||||||||||||
Other intangible assets |
497,810 | 39,166 | (978 | ) | (40,964 | ) | 108 | (29,032 | ) | 466,110 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
112,386 | (8,968 | ) | (276,615 | ) | (12,054 | ) | (19,796 | ) | 6,200,707 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Premium in rental includes memberships with indefinite useful lives. |
(*2) | Includes assets transferred from construction-in-progress, adjustments of foreign currency translation difference and others. |
(b) | For the year ended December 31, 2015 |
(in millions of Won) | Beginning | Acquisitions | Disposals | Amortization | Impairment loss |
Others(*2) | Ending | |||||||||||||||||||||
Goodwill |
| | | (99,052 | ) | (234,138 | ) | 1,461,954 | ||||||||||||||||||||
Intellectual property rights |
2,762,679 | 127,112 | (3,921 | ) | (192,660 | ) | (20,725 | ) | (5,399 | ) | 2,667,086 | |||||||||||||||||
Premium in rental(*1) |
130,942 | 13,530 | (10,594 | ) | (171 | ) | (2,413 | ) | (3,345 | ) | 127,949 | |||||||||||||||||
Development expense |
168,746 | 6,749 | (1,084 | ) | (53,740 | ) | (3,034 | ) | 18,159 | 135,796 | ||||||||||||||||||
Port facilities usage rights |
156,444 | | | (11,810 | ) | | 120,167 | 264,801 | ||||||||||||||||||||
Exploratation and evaluation assets |
92,459 | 61,427 | | | | (2,742 | ) | 151,144 | ||||||||||||||||||||
Customer relationships |
641,625 | | | (51,808 | ) | (28,402 | ) | (1,606 | ) | 559,809 | ||||||||||||||||||
Power generation permit |
539,405 | | | | | | 539,405 | |||||||||||||||||||||
Other intangible assets |
597,545 | 88,105 | (488 | ) | (71,394 | ) | (7,531 | ) | (108,427 | ) | 497,810 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
296,923 | (16,087 | ) | (381,583 | ) | (161,157 | ) | (217,331 | ) | 6,405,754 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Premium in rental includes memberships with indefinite useful lives. |
(*2) | Includes assets transferred from construction-in-progress, adjustments of foreign currency translation difference and others. |
28
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
14. Other Assets
Other assets as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Advance payment |
696,839 | |||||||
Prepaid expenses |
133,049 | 107,379 | ||||||
Others |
2,557 | 4,034 | ||||||
|
|
|
|
|||||
808,252 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Long-term advance payment |
3,467 | |||||||
Long-term prepaid expenses |
359,771 | 403,536 | ||||||
Net defined benefit assets |
1,475 | | ||||||
Others(*1) |
173,274 | 221,997 | ||||||
|
|
|
|
|||||
629,000 | ||||||||
|
|
|
|
(*1) | As of September 30, 2016 and December 31, 2015, the Company recognized tax assets amounting to |
29
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
15. Borrowings
(a) | Short-term borrowings and current portion of long-term borrowings as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | Bank |
Interest rate (%) | September 30, 2016 | December 31, 2015 | ||||||||||
Short-term borrowings |
||||||||||||||
Bank overdrafts |
Bank of America and others | 0.2~5.0 | 129,891 | |||||||||||
Short-term borrowings |
HSBC and others | 0.2~10.8 | 6,954,109 | 8,285,869 | ||||||||||
|
|
|
|
|||||||||||
7,051,963 | 8,415,760 | |||||||||||||
|
|
|
|
|||||||||||
Current portion of long-term liabilities |
||||||||||||||
Current portion of |
Export-Import Bank of |
0.5~8.5 | 1,391,650 | 1,318,276 | ||||||||||
Current portion of foreign loan(*1) |
NATIXIS |
2.0 | 193 | 401 | ||||||||||
Current portion of debentures |
Korea Development Bank |
0.9~5.9 | 1,132,711 | 2,637,614 | ||||||||||
Less: Current portion of discount on debentures issued |
(174 | ) | (1,019 | ) | ||||||||||
|
|
|
|
|||||||||||
2,524,380 | 3,955,272 | |||||||||||||
|
|
|
|
|||||||||||
12,371,032 | ||||||||||||||
|
|
|
|
(*1) | Korea Development Bank has provided guarantees related to the foreign loan. |
(b) | Long-term borrowings, excluding current portion as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | Bank |
Interest rate (%) | September 30, 2016 | December 31, 2015 | ||||||||||
Long-term borrowings |
Export-Import Bank of |
0.4~6.6 | 6,814,753 | |||||||||||
Less: Present value discount |
(61,420 | ) | (76,828 | ) | ||||||||||
Foreign loan |
| | | 200 | ||||||||||
Debentures |
Korea Development Bank |
1.2~6.3 | 6,231,021 | 6,134,132 | ||||||||||
Less: Discount on debentures issued |
(19,568 | ) | (23,058 | ) | ||||||||||
|
|
|
|
|||||||||||
12,849,199 | ||||||||||||||
|
|
|
|
(c) | Property, plant and equipment including investment property, trade accounts and notes receivable, financial assets, available-for-sale financial assets, inventories and other assets amounting to
|
30
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
16. Other Payables
Other payables as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Accounts payable |
983,408 | |||||||
Accrued expenses |
674,572 | 759,598 | ||||||
Dividend payable |
13,456 | 6,453 | ||||||
Finance lease liabilities |
20,104 | 26,876 | ||||||
Withholdings |
296,102 | 352,758 | ||||||
|
|
|
|
|||||
2,129,093 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Long-term accounts payable |
22,665 | |||||||
Long-term accrued expenses |
37,692 | 30,221 | ||||||
Finance lease liabilities |
96,577 | 14,409 | ||||||
Long-term withholdings |
72,579 | 67,175 | ||||||
|
|
|
|
|||||
134,470 | ||||||||
|
|
|
|
17. Other Financial Liabilities
Other financial liabilities as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Derivatives liabilities |
117,841 | |||||||
Financial guarantee liabilities |
49,934 | 84,276 | ||||||
|
|
|
|
|||||
202,117 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Derivatives liabilities |
37,661 | |||||||
Financial guarantee liabilities |
38,474 | 17,035 | ||||||
|
|
|
|
|||||
54,696 | ||||||||
|
|
|
|
31
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
18. Provisions
(a) | Provisions as of September 30, 2016 and December 31, 2015 are as follows: |
September 30, 2016 | December 31, 2015 | |||||||||||||||
(in millions of Won) | Current | Non-current | Current | Non-current | ||||||||||||
Provision for bonus payments |
| 42,602 | | |||||||||||||
Provision for construction warranties |
7,661 | 81,302 | 10,656 | 70,790 | ||||||||||||
Provision for legal contingencies and claims(*1) |
3,144 | 54,635 | | 52,610 | ||||||||||||
Provision for restoration(*2) |
15,863 | 59,703 | 15,569 | 26,357 | ||||||||||||
Others(*3,4,5) |
94,506 | 119,581 | 33,493 | 71,935 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
315,221 | 102,320 | 221,692 | ||||||||||||||
|
|
|
|
|
|
|
|
(*1) | The Company recognized probable outflow of resources amounting to |
(*2) | Due to contamination of land near the Companys magnesium smelting plant located in Gangneung province and gas treatment plant located in Pohang work, the Company recognized present values of estimated costs for recovery as provisions for restoration as of September 30, 2016. In order to determine the estimated costs, the Company used the assumption that it would use all of technologies and materials available for now to recover the land. In addition, the Company has applied discount rates of 2.01% and 1.65% to assess present value of these costs for recovery of land in Gangneung province and Pohang work, respectively. |
(*3) | As of September 30, 2016 and December 31, 2015, POSCO ENERGY CO., LTD., a subsidiary of the Company, recognized |
(*4) | POSCO Engineering CO., Ltd., a subsidiary of the Company, announced the restructuring plan on September 30, 2016 and recognized expected outflow of restructuring amounting to |
(*5) | As of September 30, 2016 and December 31, 2015, the amount includes a provision of |
(b) | Changes in provisions for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows: |
1) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Beginning | Increase | Utilization | Reversal | Others(*1) | Ending | ||||||||||||||||||
Provision for bonus payments |
29,154 | (41,643 | ) | (275 | ) | (1,275 | ) | 28,563 | ||||||||||||||||
Provision for construction warranties |
81,446 | 22,890 | (14,844 | ) | (1,885 | ) | 1,356 | 88,963 | ||||||||||||||||
Provision for legal contingencies and claims |
52,610 | 7,535 | | (188 | ) | (2,178 | ) | 57,779 | ||||||||||||||||
Provision for restoration |
41,926 | 40,749 | (6,473 | ) | | (636 | ) | 75,566 | ||||||||||||||||
Others |
105,428 | 135,838 | (24,261 | ) | (3,696 | ) | 778 | 214,087 | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
236,166 | (87,221 | ) | (6,044 | ) | (1,955 | ) | 464,958 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Includes adjustments of foreign currency translation differences and others. |
32
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | For the year ended December 31, 2015 |
(in millions of Won) | Beginning | Increase | Utilization | Reversal | Others(*1) | Ending | ||||||||||||||||||
Provision for bonus payments |
46,420 | (49,563 | ) | (1,493 | ) | (2,267 | ) | 42,602 | ||||||||||||||||
Provision for construction warranties |
80,348 | 33,698 | (21,166 | ) | (4,822 | ) | (6,612 | ) | 81,446 | |||||||||||||||
Provision for legal contingencies and claims |
50,424 | 15,998 | (2,467 | ) | (4,058 | ) | (7,287 | ) | 52,610 | |||||||||||||||
Provision for restoration |
74,798 | 2,293 | (35,461 | ) | | 296 | 41,926 | |||||||||||||||||
Others |
118,194 | 59,219 | (46,994 | ) | (15,425 | ) | (9,566 | ) | 105,428 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
157,628 | (155,651 | ) | (25,798 | ) | (25,436 | ) | 324,012 | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Includes adjustments of foreign currency translation differences and others. |
19. Employee Benefits
(a) | Defined contribution plans |
The expenses related to post-employment benefit plans under defined contribution plans for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Expense related to post-employment benefit plans |
5,983 | 24,425 | 19,009 |
(b) | Defined benefit plan |
1) | The amounts recognized in relation to defined benefit obligations in the statements of financial position as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Present value of funded obligations |
1,702,735 | |||||||
Fair value of plan assets(*1) |
(1,565,290 | ) | (1,532,090 | ) | ||||
Present value of non-funded obligations |
18,374 | 11,380 | ||||||
|
|
|
|
|||||
Net defined benefit liabilities |
182,025 | |||||||
|
|
|
|
(*1) | As of September 30, 2016, the Company recognized net defined benefit assets amounting to |
33
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | Changes in present value of defined benefit obligations for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Defined benefit obligation at the beginning of period |
1,718,243 | |||||||
Current service costs |
169,380 | 239,508 | ||||||
Interest costs |
29,373 | 47,039 | ||||||
Remeasurements |
75,161 | (63,364 | ) | |||||
Benefits paid |
(131,126 | ) | (157,983 | ) | ||||
Others |
(2,323 | ) | (69,328 | ) | ||||
|
|
|
|
|||||
Defined benefit obligation at the end of period |
1,714,115 | |||||||
|
|
|
|
3) | Changes in fair value of plan assets for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Fair value of plan assets at the beginning of period |
1,427,918 | |||||||
Interest on plan assets |
28,140 | 41,145 | ||||||
Remeasurement of plan assets |
(5,305 | ) | (8,515 | ) | ||||
Contributions to plan assets |
135,832 | 243,082 | ||||||
Benefits paid |
(116,015 | ) | (127,808 | ) | ||||
Others |
(9,452 | ) | (43,732 | ) | ||||
|
|
|
|
|||||
Fair value of plan assets at the end of period |
1,532,090 | |||||||
|
|
|
|
4) | The amounts recognized in condensed consolidated interim statements of comprehensive income for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows: |
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Current service costs |
58,700 | 169,380 | 183,179 | |||||||||||||
Net interest costs |
192 | 1,733 | 1,233 | 4,866 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
60,433 | 170,613 | 188,045 | ||||||||||||||
|
|
|
|
|
|
|
|
34
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
20. Other Liabilities
Other liabilities as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Current |
||||||||
Due to customers for contract work |
812,120 | |||||||
Advances received |
809,912 | 780,357 | ||||||
Unearned revenue |
10,208 | 11,684 | ||||||
Withholdings |
167,258 | 153,562 | ||||||
Others |
18,134 | 31,129 | ||||||
|
|
|
|
|||||
1,788,852 | ||||||||
|
|
|
|
|||||
Non-current |
||||||||
Unearned revenue |
20,212 | 20,838 | ||||||
Others |
38,904 | 56,935 | ||||||
|
|
|
|
|||||
77,773 | ||||||||
|
|
|
|
21. Financial Instruments
(a) | Classification of financial instruments |
1) Financial assets as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Financial assets at fair value through profit or loss |
||||||||
Derivatives assets |
188,489 | |||||||
Available-for-sale financial assets |
2,310,008 | 2,209,744 | ||||||
Held-to-maturity investments |
3,019 | 23,379 | ||||||
Loans and receivables |
18,428,862 | 20,601,109 | ||||||
|
|
|
|
|||||
23,022,721 | ||||||||
|
|
|
|
35
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | Financial liabilities as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Financial liabilities at fair value through profit or loss |
||||||||
Derivatives liabilities |
155,502 | |||||||
|
|
|
|
|||||
Financial liabilities measured at amortized cost |
||||||||
Trade accounts and notes payable |
2,985,266 | 3,136,446 | ||||||
Borrowings |
21,761,185 | 25,220,231 | ||||||
Financial guarantee liabilities |
88,408 | 101,311 | ||||||
Others |
1,843,189 | 2,197,463 | ||||||
|
|
|
|
|||||
26,678,048 | 30,655,451 | |||||||
|
|
|
|
|||||
30,810,953 | ||||||||
|
|
|
|
3) | Finance income and costs by category of financial instrument for the nine-month periods ended September 30, 2016 and 2015 were as follows: |
① | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Finance income and costs | |||||||||||||||||||||||||||||||
Interest income (expense) |
Gain and loss on valuation |
Gain and loss on foreign currency |
Gain and loss on disposal |
Impairment loss |
Others | Total | Other comprehensive income |
|||||||||||||||||||||||||
Financial assets at fair value through profit or loss |
16,037 | | 257,488 | | | 273,525 | | |||||||||||||||||||||||||
Available-for-sale financial assets |
383 | | | 7,787 | (229,923 | ) | 32,947 | (188,806 | ) | 217,520 | ||||||||||||||||||||||
Held-to-maturity financial assets |
229 | | | | | 29 | 258 | | ||||||||||||||||||||||||
Loans and receivables |
140,784 | | (428,779 | ) | (11,993 | ) | | (115 | ) | (300,103 | ) | | ||||||||||||||||||||
Financial liabilities at fair value through profit or loss |
| (98,945 | ) | | (260,569 | ) | | | (359,514 | ) | | |||||||||||||||||||||
Financial liabilities measured at amortized cost |
(512,999 | ) | | 311,821 | (61 | ) | | (14,091 | ) | (215,330 | ) | | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(82,908 | ) | (116,958 | ) | (7,348 | ) | (229,923 | ) | 18,770 | (789,970 | ) | 217,520 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
② | For the nine-month period ended September 30, 2015 |
(in millions of Won) | Finance income and costs | |||||||||||||||||||||||||||||||
Interest income (expense) |
Gain and loss on valuation |
Gain and loss on foreign currency |
Gain and loss on disposal |
Impairment loss |
Others | Total | Other comprehensive loss |
|||||||||||||||||||||||||
Financial assets at fair value through profit or loss |
111,468 | | 254,594 | | | 366,062 | | |||||||||||||||||||||||||
Available-for-sale financial assets |
1,902 | | | 80,868 | (93,874 | ) | 48,782 | 37,678 | (195,970 | ) | ||||||||||||||||||||||
Held-to-maturity financial assets |
347 | | | | | (698 | ) | (351 | ) | | ||||||||||||||||||||||
Loans and receivables |
158,697 | | 432,904 | (11,720 | ) | | (156 | ) | 579,725 | | ||||||||||||||||||||||
Financial liabilities at fair value through profit or loss |
| (128,580 | ) | | (218,009 | ) | | | (346,589 | ) | | |||||||||||||||||||||
Financial liabilities measured at amortized cost |
(629,007 | ) | | (899,339 | ) | | | (105,197 | ) | (1,633,543 | ) | | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(17,112 | ) | (466,435 | ) | 105,733 | (93,874 | ) | (57,269 | ) | (997,018 | ) | (195,970 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
4) | Finance income and costs by category of financial instrument for the three-month periods ended September 30, 2016 and 2015 were as follows: |
① | For the three-month period ended September 30, 2016 |
(in millions of Won) | Finance income and costs | |||||||||||||||||||||||||||||||
Interest income (expense) |
Gain and loss on valuation |
Gain and loss on foreign currency |
Gain and loss on disposal |
Impairment loss |
Others | Total | Other comprehensive income |
|||||||||||||||||||||||||
Financial assets at fair value through profit or loss |
(3,963 | ) | | 82,501 | | | 78,538 | | ||||||||||||||||||||||||
Available-for-sale financial assets |
55 | | | 6,578 | (4,249 | ) | 5,681 | 8,065 | 89,272 | |||||||||||||||||||||||
Held-to-maturity financial assets |
41 | | | | | 10 | 51 | | ||||||||||||||||||||||||
Loans and receivables |
48,637 | | (385,496 | ) | (4,677 | ) | | (28 | ) | (341,564 | ) | | ||||||||||||||||||||
Financial liabilities at fair value through profit or loss |
| (47,100 | ) | | (71,329 | ) | | | (118,429 | ) | | |||||||||||||||||||||
Financial liabilities measured at amortized cost |
(169,911 | ) | | 420,775 | | | (5,557 | ) | 245,307 | | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(51,063 | ) | 35,279 | 13,073 | (4,249 | ) | 106 | (128,032 | ) | 89,272 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
② | For the three-month period ended September 30, 2015 |
(in millions of Won) | Finance income and costs | |||||||||||||||||||||||||||||||
Interest income (expense) |
Gain and loss on valuation |
Gain and loss on foreign currency |
Gain and loss on disposal |
Impairment loss |
Others | Total | Other comprehensive loss |
|||||||||||||||||||||||||
Financial assets at fair value through profit or loss |
38,618 | | 111,618 | | | 150,236 | | |||||||||||||||||||||||||
Available-for-sale financial assets |
453 | | | 23,108 | (30,434 | ) | 1,775 | (5,098 | ) | (169,320 | ) | |||||||||||||||||||||
Held-to-maturity financial assets |
131 | | | | | (716 | ) | (585 | ) | | ||||||||||||||||||||||
Loans and receivables |
54,708 | | 334,168 | (3,543 | ) | | (72 | ) | 385,261 | | ||||||||||||||||||||||
Financial liabilities at fair value through profit or loss |
| (65,660 | ) | | (109,569 | ) | | | (175,229 | ) | | |||||||||||||||||||||
Financial liabilities measured at amortized cost |
(204,606 | ) | | (713,903 | ) | | | (51,629 | ) | (970,138 | ) | | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
(27,042 | ) | (379,735 | ) | 21,614 | (30,434 | ) | (50,642 | ) | (615,553 | ) | (169,320 | ) | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
37
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(b) | Fair value |
1) | Fair value and book value |
The carrying amount and the fair value of financial instruments as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||||||||||
Book value | Fair value | Book value | Fair value | |||||||||||||
Assets measured at fair value |
||||||||||||||||
Available-for-sale financial assets(*1) |
1,896,579 | 1,854,784 | 1,854,784 | |||||||||||||
Derivatives assets(*2) |
87,369 | 87,369 | 188,489 | 188,489 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
1,983,948 | 1,983,948 | 2,043,273 | 2,043,273 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Assets measured at amortized cost(*3) |
||||||||||||||||
Cash and cash equivalents |
3,401,297 | 3,401,297 | 4,870,185 | 4,870,185 | ||||||||||||
Trade accounts and notes receivable, net |
8,728,152 | 8,728,152 | 9,716,273 | 9,716,273 | ||||||||||||
Loans and other receivables, net |
6,299,413 | 6,299,413 | 6,014,651 | 6,014,651 | ||||||||||||
Held-to-maturity financial assets |
3,019 | 3,019 | 23,379 | 23,379 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
18,431,881 | 18,431,881 | 20,624,488 | 20,624,488 | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Liabilities measured at fair value |
||||||||||||||||
Derivatives liabilities(*2) |
137,874 | 137,874 | 155,502 | 155,502 | ||||||||||||
Liabilities measured at amortized cost(*3) |
||||||||||||||||
Trade accounts and notes payable |
2,985,266 | 2,985,266 | 3,136,446 | 3,136,446 | ||||||||||||
Borrowings |
21,761,185 | 22,195,937 | 25,220,231 | 25,413,577 | ||||||||||||
Financial guarantee liabilities |
88,408 | 88,408 | 101,311 | 101,311 | ||||||||||||
Others |
1,843,189 | 1,843,189 | 2,197,463 | 2,197,463 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
27,112,800 | 30,655,451 | 30,848,797 | ||||||||||||||
|
|
|
|
|
|
|
|
(*1) | The fair value of available-for-sale financial assets publicly traded is measured at the closing bid price quoted at the end of the reporting period. Meanwhile, the fair value of unquoted available-for-sale financial assets is calculated using the valuation results from an external pricing service in which weighted average cost of capital of evaluated companies are used as discount rates. Available-for-sale financial assets which are not measured at fair value are not included. |
(*2) | The fair value of derivatives is measured using valuation models such as Black-Scholes model and others in which the market yields on government bonds are used as a discount rate. |
(*3) | The fair value of financial assets and liabilities measured at amortized cost is determined at the present value of estimated future cash flows discounted at the current market interest rate. The fair value is calculated for the disclosures in the notes. On the other hand, the Company has not performed fair value measurement for the financial assets and liabilities measured at amortized cost except borrowings since their carrying amounts approximate fair value. |
38
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | The fair value hierarchy |
The fair values of financial instruments by fair value hierarchy as of September 30, 2016 and December 31, 2015 are as follows:
① | September 30, 2016 |
(in millions of Won) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial assets |
||||||||||||||||
Available-for-sale financial assets |
| 311,951 | 1,896,579 | |||||||||||||
Derivatives assets |
| 71,507 | 15,862 | 87,369 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
71,507 | 327,813 | 1,983,948 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial liabilities |
||||||||||||||||
Derivatives liabilities |
137,874 | | 137,874 |
② | December 31, 2015 |
(in millions of Won) | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
Financial assets |
||||||||||||||||
Available-for-sale financial assets |
| 396,233 | 1,854,784 | |||||||||||||
Derivatives assets |
| 110,197 | 78,292 | 188,489 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
110,197 | 474,525 | 2,043,273 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Financial liabilities |
||||||||||||||||
Derivatives liabilities |
147,384 | 8,118 | 155,502 |
(c) | Financial risk management |
The Company is exposed to credit risk, liquidity risk and market risk arising from financial assets and liabilities. The Companys financial risk management objectives and policies are consistent with those disclosed in the consolidated financial statements as of and for the year ended December 31, 2015.
39
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
22. Share Capital and Capital Surplus
(a) | Share capital as of September 30, 2016 and December 31, 2015 are as follows: |
(in Won, except share information) | September 30, 2016 | December 31, 2015 | ||||||
Authorized shares |
200,000,000 | 200,000,000 | ||||||
Par value |
5,000 | |||||||
Issued shares(*1) |
87,186,835 | 87,186,835 | ||||||
Shared capital(*2) |
482,403,125,000 |
(*1) | As of September 30, 2016, total shares of ADRs of 51,622,460, outstanding in overseas stock market, are equivalent to 12,905,615 shares of common stock. |
(*2) | As of September 30, 2016, the difference between the ending balance of common stock and the par value of issued common stock is |
(b) | Capital surplus as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Share premium |
463,825 | |||||||
Gain on disposal of treasury shares |
783,761 | 783,756 | ||||||
Other capital surplus |
141,212 | 136,042 | ||||||
|
|
|
|
|||||
1,383,623 | ||||||||
|
|
|
|
40
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
23. Hybrid Bonds
(a) | Hybrid bonds classified as equity as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | Date of issue | Date of maturity | Interest rate (%) | September 30, 2016 | December 31, 2015 | |||||||||||||||
Hybrid bond 1-1(*1) |
2013-06-13 | 2043-06-13 | 4.30 | 800,000 | ||||||||||||||||
Hybrid bond 1-2(*1) |
2013-06-13 | 2043-06-13 | 4.60 | 200,000 | 200,000 | |||||||||||||||
Issuance cost |
(3,081 | ) | (3,081 | ) | ||||||||||||||||
|
|
|
|
|||||||||||||||||
996,919 | ||||||||||||||||||||
|
|
|
|
(*1) | Details of hybrid bonds as of September 30, 2016 are as follows: |
(in millions of Won) | Hybrid bond 1-1 |
Hybrid bond 1-2 | ||
Issue price |
800,000 | 200,000 | ||
Maturity date |
30 years (The Company has a right to extend the maturity date) | 30 years (The Company has a right to extend the maturity date) | ||
Interest rate |
Issue date ~ 2018-06-12 : 4.3% Reset every 5 years as follows; After 5 years : return on government bond (5 years) + 1.3% After 10 years : additionally +0.25% according to Step-up clauses After 25 years : additionally +0.75% |
Issue date ~ 2023-06-12 : 4.6% Reset every 10 years as follows; After 10 years : return on government bond (10 years) + 1.4% After 10 years : additionally +0.25% according to Step-up clauses After 30 years : additionally +0.75% | ||
Interest payments condition |
Quarterly (Optional deferral of interest payment is available to the Company) |
Quarterly (Optional deferral of interest payment is available to the Company) | ||
Others |
The Company can call the hybrid bond at year 5 and interest payment date afterwards | The Company can call the hybrid bond at year 10 and interest payment date afterwards |
The interest accumulated but not paid on the hybrid bonds as of September 30, 2016 amounts to
2,150 million. W
41
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(b) | POSCO ENERGY Co., Ltd., a subsidiary of the Company, issued hybrid bonds which are classified as non-controlling interests in the consolidated financial statements. Hybrid bonds as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | Date of issue | Date of maturity | Interest rate (%) | September 30, 2016 | December 31, 2015 | |||||||||||||||
Hybrid bond 1-1(*1) |
2013-08-29 | 2043-08-29 | 4.66 | 165,000 | ||||||||||||||||
Hybrid bond 1-2(*1) |
2013-08-29 | 2043-08-29 | 4.72 | 165,000 | 165,000 | |||||||||||||||
Hybrid bond 1-3(*1) |
2013-08-29 | 2043-08-29 | 4.72 | 30,000 | 30,000 | |||||||||||||||
Hybrid bond 1-4(*1) |
2013-08-29 | 2043-08-29 | 5.21 | 140,000 | 140,000 | |||||||||||||||
Issuance cost |
(1,532 | ) | (1,532 | ) | ||||||||||||||||
|
|
|
|
|||||||||||||||||
498,468 | ||||||||||||||||||||
|
|
|
|
(*1) Details of hybrid bonds of POSCO ENERGY Co., Ltd. as of September 30, 2016 are as follows:
(in millions of Won) | Hybrid bond 1-1 |
Hybrid bond 1-2 and 1-3 |
Hybrid bond 1-4 | |||
Issue price | 165,000 | 195,000 | 140,000 | |||
Maturity date | 30 years (The Company has a right to extend the maturity date) | 30 years (The Company has a right to extend the maturity date) | 30 years (The Company has a right to extend the maturity date) | |||
Interest rate | Issue date ~ 2018-08-29 : 4.66% Reset every 5 years as follows; After 5 years : return on government bond (5 years) + 1.39% After 10 years : additionally +0.25% according to Step-up clauses After 30 years : additionally +0.75% |
Issue date ~ 2018-08-29 : 4.72% Reset every 5 years as follows; After 5 years : return on government bond (5 years) + 1.45% After 10 years : additionally +0.25% according to Step-up clauses After 30 years : additionally +0.75% |
Issue date ~ 2018-08-29 : 5.21% Reset every 5 years as follows; After 5 years : return on government bond (5 years) + 1.55% After 10 years : additionally +0.25% according to Step-up clauses After 30 years : additionally +0.75% | |||
Interest payments condition | Quarterly (Optional deferral of interest payment is available to the Company) |
Quarterly (Optional deferral of interest payment is available to the Company) |
Quarterly (Optional deferral of interest payment is available to the Company) | |||
Others | The Company can call the hybrid bond at year 5 and interest payment date afterwards | The Company can call the hybrid bond at year 5 and interest payment date afterwards | The Company can call the hybrid bond at year 5 and interest payment date afterwards |
The interest accumulated but not paid on the hybrid bonds as of September 30, 2016 amounts to
1,996 million. W
24. Reserves
Reserves as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Capital adjustment arising from investments in equity-accounted investees |
(426,360 | ) | ||||||
Net changes in unrealized fair value of available-for-sale investments |
180,745 | (38,294 | ) | |||||
Foreign currency translation differences |
(332,288 | ) | (109,646 | ) | ||||
Others |
(19,281 | ) | (20,456 | ) | ||||
|
|
|
|
|||||
(594,756 | ) | |||||||
|
|
|
|
42
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
25. Treasury Shares
As of September 30, 2016, the Company holds 7,190,484 shares of treasury stock for price stabilization and others in accordance with the Board of Directors resolution.
26. Construction Contract
(a) | When the outcome of a construction contract can be estimated reliably and it is probable that the contract will be profitable, contract revenue and contract cost are recognized over the period of the contract by reference to the percentage-of-completion. The percentage-of-completion is determined by calculating total contract costs incurred for work performed to date divided by latest estimated total contract costs. Variations in contract work, claims and incentive payments are included in contract revenue to the extent that may have been agreed with the customer and are capable of being reliably measured. |
When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognized only to the extent of contract costs incurred that are likely to be recoverable. Expected losses are recognized immediately as an expense when there is high probability that total contract costs exceed total contract revenues.
The gross amount due from customers for contract work is presented for all contracts in which costs incurred plus recognized profits (less recognized losses) exceed progress billings. If progress billings exceed costs incurred plus recognized profits (less recognized losses), then the gross amount due to customers for contract work is presented. The Company recognizes advances received regarding the amount received from the ordering organization before the construction is progressing. Also, the Company recognized trade accounts and notes receivable with respect to the amount charged to the ordering organization but has not yet received.
(b) Details of in-progress construction contracts as of September 30, 2016 and December 31, 2015 are as follows:
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||||||||||
Construction segment |
Others | Construction segment |
Others | |||||||||||||
Accumulated cost |
339,173 | 18,786,683 | 311,726 | |||||||||||||
Add: Accumulated profit |
1,683,560 | 46,565 | 1,374,548 | 34,939 | ||||||||||||
Less: Accumulated loss |
(874,322 | ) | (20,223 | ) | (430,957 | ) | (16,510 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Accumulated revenue |
22,289,534 | 365,515 | 19,730,274 | 330,155 | ||||||||||||
Less: Progress billings |
(22,359,223 | ) | (372,401 | ) | (19,265,173 | ) | (344,252 | ) | ||||||||
Others |
(6,615 | ) | 5,950 | (24,967 | ) | (20,126 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
(936 | ) | 440,134 | (34,223 | ) | ||||||||||||
|
|
|
|
|
|
|
|
43
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(c) | Details of due from customers for contract work and due to customers for contract work related to construction as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||||||||||
Construction segment |
Others | Construction segment |
Others | |||||||||||||
Due from customers for contract work |
898,960 | 59,588 | 1,157,617 | 60,414 | ||||||||||||
Due to customers for contract work |
(975,264 | ) | (60,524 | ) | (717,483 | ) | (94,637 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
(76,304 | ) | (936 | ) | 440,134 | (34,223 | ) | ||||||||||
|
|
|
|
|
|
|
|
(d) | Details of the provisions of construction loss, the allowance for due from customers and the accounts receivable of construction as of September 30, 2016 and December 31, 2015 are as follows: |
(in millions of Won) | September 30, 2016 | December 31, 2015 | ||||||
Construction segment |
55,101 | |||||||
Others |
1,599 | 1,380 | ||||||
|
|
|
|
|||||
56,481 | ||||||||
|
|
|
|
(e) | Due to the factors causing the variation of costs during the nine-month period ended September 30, 2016, the estimated total contract costs have changed. Details of changes in estimated total contract costs and the impact on profits or loss for the nine-month period ended September 30, 2016 and the future period are as follows: |
(in millions of Won) | Changes in estimated | Changes in profit (loss) of construction contract | ||||||||||||||
total contract costs | Net income (loss) | Future income (loss) | Total | |||||||||||||
Construction segment |
(469,549 | ) | 80,672 | (388,877 | ) | |||||||||||
Others |
8,840 | (208 | ) | 8,041 | 7,833 | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
(469,757 | ) | 88,713 | (381,044 | ) | ||||||||||||
|
|
|
|
|
|
|
|
The impact on profit or loss for the current period and the future period is determined based on total contract costs, which are estimated based on the circumstances present for the period from the start of the contract to the end of reporting period as of September 30, 2016, and the estimated contract revenue as of September 30, 2016. Therefore, the estimated contract costs and contract revenues may be changed in the future.
44
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(f) | Uncertainty of estimates |
1) | Total contract revenues |
Total contract revenues are measured based on contractual amount initially agreed. However, the contract revenues can be increased by additional contract work, claims and incentive payments in the course of construction, or decreased by the penalty when the completion of contract is delayed due to the Companys fault. Therefore, this measurement of contract revenues are affected by the uncertainty of the occurrence of future events.
2) | Total contract costs |
Construction revenues are recognized according to the percentage of completion, which is measured on the basis of the gross amount incurred to date. Total contract costs are estimated based on future estimates of material costs, labor costs, outsourcing cost and others. There are the uncertainty of future estimates due to various internal and external effect such as fluctuation of market, the risk of business partner and the experience of project performance and others. The significant assumptions including uncertainty of the estimate of total contract costs are as follows:
Method of significant assumption | ||
Material cost | Assumption based on recent purchasing price and quoted market price | |
Labor cost | Assumption based on standard monthly and daily labor cost | |
Outsourcing cost | Assumption based on the past experience rate of similar project and market price |
Management reviews the assumptions used in estimated contract costs each end of the reporting period and adjusts them, if necessary.
45
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
27. Selling and Administrative Expenses
(a) | Administrative expenses |
Administrative expenses for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Wages and salaries |
208,589 | 572,342 | 617,202 | |||||||||||||
Expenses related to post-employment benefits |
68,938 | 20,766 | 114,893 | 64,850 | ||||||||||||
Other employee benefits |
43,271 | 44,492 | 133,068 | 155,070 | ||||||||||||
Travel |
9,020 | 11,927 | 29,514 | 35,912 | ||||||||||||
Depreciation |
26,058 | 25,316 | 78,064 | 82,270 | ||||||||||||
Amortization |
35,570 | 41,556 | 102,771 | 124,266 | ||||||||||||
Communication |
2,315 | 2,358 | 7,733 | 9,313 | ||||||||||||
Electricity expenses |
1,825 | 1,765 | 5,899 | 7,403 | ||||||||||||
Taxes and public dues |
20,188 | 10,250 | 60,674 | 52,684 | ||||||||||||
Rental |
11,748 | 24,794 | 62,582 | 93,875 | ||||||||||||
Repairs |
2,003 | 2,293 | 7,521 | 8,942 | ||||||||||||
Entertainment |
3,248 | 3,725 | 9,962 | 11,714 | ||||||||||||
Advertising |
27,914 | 20,177 | 65,629 | 65,567 | ||||||||||||
Research & development |
26,869 | 32,906 | 77,658 | 88,536 | ||||||||||||
Service fees |
48,979 | 32,013 | 133,053 | 156,500 | ||||||||||||
Supplies |
1,912 | 1,816 | 5,866 | 7,935 | ||||||||||||
Vehicles maintenance |
2,617 | 2,031 | 7,759 | 8,234 | ||||||||||||
Industry association fee |
4,623 | 2,152 | 11,244 | 10,439 | ||||||||||||
Conference |
2,956 | 3,414 | 9,698 | 12,200 | ||||||||||||
Contribution to provisions |
4,530 | 3,318 | 9,433 | 9,745 | ||||||||||||
Bad debt expenses |
31,010 | 40,372 | 56,734 | 74,817 | ||||||||||||
Others |
7,094 | 5,026 | 23,100 | 25,372 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
541,056 | 1,585,197 | 1,722,846 | ||||||||||||||
|
|
|
|
|
|
|
|
b) | Selling expenses |
Selling expenses for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Freight and custody expenses |
362,199 | 975,808 | 1,166,832 | |||||||||||||
Operating expenses for distribution center |
2,598 | 2,594 | 7,703 | 8,295 | ||||||||||||
Sales commissions |
24,463 | 15,829 | 66,813 | 47,717 | ||||||||||||
Sales advertising |
1,271 | 417 | 2,271 | 1,539 | ||||||||||||
Sales promotion |
2,539 | 5,740 | 7,270 | 16,147 | ||||||||||||
Sample |
411 | 707 | 1,828 | 2,027 | ||||||||||||
Sales insurance premium |
7,501 | 7,097 | 21,891 | 22,873 | ||||||||||||
Contract cost |
10,652 | 7,012 | 21,875 | 21,874 | ||||||||||||
Others |
5,918 | 3,674 | 9,229 | 8,970 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
405,269 | 1,114,688 | 1,296,274 | ||||||||||||||
|
|
|
|
|
|
|
|
46
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
28. Finance Income and Costs
Details of finance income and costs for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Finance income |
||||||||||||||||
Interest income |
55,292 | 141,396 | 160,946 | |||||||||||||
Dividend income |
5,681 | 1,775 | 32,947 | 48,782 | ||||||||||||
Gain on foreign currency transactions |
252,043 | 350,549 | 765,488 | 755,144 | ||||||||||||
Gain on foreign currency translations |
191,394 | 339,103 | 369,976 | 578,411 | ||||||||||||
Gain on derivatives transactions |
84,713 | 112,768 | 261,724 | 258,456 | ||||||||||||
Gain on valuations of derivatives |
(5,026 | ) | 41,236 | 89,543 | 129,080 | |||||||||||
Gain on disposals of available-for-sale financial assets |
7,509 | 23,132 | 9,910 | 81,180 | ||||||||||||
Others |
626 | 2,860 | 3,102 | 11,458 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
926,715 | 1,674,086 | 2,023,457 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Finance costs |
||||||||||||||||
Interest expenses |
204,606 | 512,999 | 629,007 | |||||||||||||
Loss on foreign currency transactions |
284,755 | 397,872 | 823,046 | 819,932 | ||||||||||||
Loss on foreign currency translations |
123,403 | 671,515 | 429,376 | 980,058 | ||||||||||||
Loss on derivatives transactions |
73,541 | 110,728 | 264,805 | 221,882 | ||||||||||||
Loss on valuation of derivatives |
46,037 | 68,278 | 172,451 | 146,192 | ||||||||||||
Impairment loss on available-for-sale financial assets |
4,249 | 30,434 | 229,923 | 93,874 | ||||||||||||
Others |
11,809 | 58,835 | 31,456 | 129,530 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
1,542,268 | 2,464,056 | 3,020,475 | ||||||||||||||
|
|
|
|
|
|
|
|
47
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
29. Other Non-Operating Income and Expenses
Details of other non-operating income and expenses for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Other non-operating income |
||||||||||||||||
Gain on disposals of assets held for sale |
7,829 | 22,269 | 227,009 | |||||||||||||
Gain on disposals of investment in subsidiaries, associates and joint ventures |
2,219 | 72,678 | 8,592 | 79,114 | ||||||||||||
Gain on disposals of property, plant and equipment |
4,532 | 4,493 | 22,467 | 19,312 | ||||||||||||
Reversal of other bad debt expenses |
6,554 | (425 | ) | 12,653 | 20 | |||||||||||
Gain on insurance proceeds |
3,888 | 2,138 | 18,087 | 8,887 | ||||||||||||
Others |
13,999 | 41,932 | 72,727 | 106,674 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
128,645 | 156,795 | 441,016 | ||||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Other non-operating expenses |
||||||||||||||||
Impairment losses on assets held for sale |
108,827 | 24,759 | 132,244 | |||||||||||||
Loss on disposals of property, plant and equipment |
17,111 | 12,655 | 61,073 | 70,918 | ||||||||||||
Impairment loss on property, plant and equipment |
66,736 | 56,292 | 74,026 | 128,200 | ||||||||||||
Impairment loss on intangible assets |
12,135 | 73,141 | 14,660 | 114,074 | ||||||||||||
Contribution to provisions |
388 | (2,954 | ) | 20,033 | 3,645 | |||||||||||
Other bad debt expenses |
27,406 | 50,452 | 35,947 | 133,492 | ||||||||||||
Donations |
5,625 | 11,729 | 23,797 | 36,659 | ||||||||||||
Idle tangible assets expenses |
1,444 | 2,967 | 3,867 | 10,448 | ||||||||||||
Others(*1) |
53,784 | 304,680 | 95,169 | 389,935 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
617,789 | 353,331 | 1,019,615 | ||||||||||||||
|
|
|
|
|
|
|
|
(*1) | The Company paid |
30. Expenses by Nature
Expenses that are recorded by nature as cost of sales, selling and administrative expenses and other non-operating expenses in the statements of comprehensive income for the three-month and nine-month periods September 30, 2016 and 2015 were as follows (excluding finance costs and income tax expense):
(in millions of Won) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Raw material used, changes in inventories and others |
9,277,298 | 20,551,158 | 26,424,004 | |||||||||||||
Employee benefits expenses |
701,686 | 833,524 | 2,520,456 | 2,461,846 | ||||||||||||
Outsourced processing cost |
1,870,194 | 1,890,432 | 5,481,382 | 6,302,987 | ||||||||||||
Electricity expenses |
237,353 | 276,209 | 764,418 | 928,198 | ||||||||||||
Depreciation(*1) |
726,376 | 698,611 | 2,142,737 | 2,095,456 | ||||||||||||
Amortization |
92,170 | 96,930 | 276,615 | 283,427 | ||||||||||||
Freight and custody expenses |
310,554 | 362,199 | 975,808 | 1,166,832 | ||||||||||||
Sales commissions |
24,463 | 15,829 | 66,813 | 47,717 | ||||||||||||
Loss on disposals of property, plant and equipment |
17,111 | 12,655 | 61,073 | 70,918 | ||||||||||||
Impairment loss on property, plant and equipment |
66,736 | 56,292 | 74,026 | 128,200 | ||||||||||||
Impairment loss on intangible assets |
12,135 | 73,141 | 14,660 | 114,074 | ||||||||||||
Contribution to provisions |
55,043 | 26,777 | 152,143 | 53,936 | ||||||||||||
Donations |
5,625 | 11,729 | 23,797 | 36,659 | ||||||||||||
Others |
1,052,148 | 330,243 | 2,941,812 | 3,122,259 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
13,961,869 | 36,046,898 | 43,236,513 | ||||||||||||||
|
|
|
|
|
|
|
|
(*1) | Includes depreciation expense of investment property. |
48
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
31. Income Taxes
The effective tax rate of the Company for the nine-month periods ended September 30, 2016 and 2015 was 29.95% and 255.9%, respectively.
The effective tax rate for the nine-month period ended September 30, 2016 was higher than the statutory tax rate of 24% for the controlling company mainly due to the effect of deductible temporary difference in the Companys investment in subsidiaries and associates, for which no deferred tax assets are recognized due to the expectations on repatriation of the investments.
The effective tax rate for the nine-month period ended September 30, 2015 was higher than the statutory tax rate of 24% for the controlling company mainly due to the followings: 1) increase in deferred tax liabilities related to the controlling companys investment in POSCO ENGINEERING & CONSTRUCTION., LTD. as a result of changes in managements expectations on repatriation of the investment and 2) the effect of deductible temporary difference in the Companys investments in subsidiaries and associates, for which no deferred tax assets are recognized due to the expectations on repatriation of the investments.
32. Earnings per Share
Basic and diluted earnings per share for the three-month and nine-month periods ended September 30, 2016 and 2015 were as follows:
(in Won, except per share information) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Profit (loss) attributable to controlling interest |
(541,627,096,067 | ) | 1,197,013,746,434 | (4,863,510,568 | ) | |||||||||||
Interests of hybrid bonds |
(8,330,108,492 | ) | (8,347,872,419 | ) | (24,804,509,930 | ) | (24,699,275,257 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
537,358,621,639 | (549,974,968,486 | ) | 1,172,209,236,504 | (29,562,785,825 | ) | |||||||||||
Weighted-average number of common shares outstanding(*1) |
79,996,318 | 79,993,620 | 79,996,052 | 79,993,350 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Basic and diluted earnings(loss) per share |
(6,875 | ) | 14,653 | (370 | ) | |||||||||||
|
|
|
|
|
|
|
|
(*1) | The weighted-average number of common shares used to calculate basic and diluted earnings per share are as follows: |
(Share) | For the three-month periods ended September 30 |
For the nine-month periods ended September 30 |
||||||||||||||
2016 | 2015 | 2016 | 2015 | |||||||||||||
Total number of common shares issued |
87,186,835 | 87,186,835 | 87,186,835 | 87,186,835 | ||||||||||||
Weighted-average number of treasury shares |
(7,190,517 | ) | (7,193,215 | ) | (7,190,783 | ) | (7,193,485 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Weighted-average number of common shares outstanding |
79,996,318 | 79,993,620 | 79,996,052 | 79,993,350 | ||||||||||||
|
|
|
|
|
|
|
|
Since there were no potential shares of common stock which had dilutive effects as of September 30, 2016 and 2015, diluted earnings per share is equal to basic earnings per share.
49
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
33. Related Party Transactions
(a) | Significant transactions between the controlling company and related parties for the nine-month periods ended September 30, 2016 and 2015 were as follows: |
1) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Sales and others(*1) | Purchase and others(*2) | ||||||||||||||||||||||
Sales | Others | Purchase of material |
Purchase of fixed assets |
Outsourced processing cost |
Others | |||||||||||||||||||
Subsidiaries(*3) |
||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
16,642 | 8 | 180,712 | | 18,236 | |||||||||||||||||||
POSCO Processing & Service |
814,370 | 5,777 | 375,111 | | 10,503 | 1,333 | ||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
232,828 | 2,560 | | | 9,390 | 121 | ||||||||||||||||||
POSCO ICT(*4) |
987 | 523 | | 132,485 | 24,974 | 124,867 | ||||||||||||||||||
eNtoB Corporation |
| 5 | 186,764 | 4,924 | 80 | 13,231 | ||||||||||||||||||
POSCO CHEMTECH |
238,837 | 23,813 | 374,993 | 10,269 | 216,581 | 4,503 | ||||||||||||||||||
POSCO Energy CO., LTD |
138,359 | 1,023 | | | | 22 | ||||||||||||||||||
POSCO TMC Co., Ltd. |
204,163 | | 2 | | 1,024 | 733 | ||||||||||||||||||
POSCO AST |
152,108 | 1 | | | 19,695 | 922 | ||||||||||||||||||
POSCO DAEWOO Corporation |
2,368,416 | 34,341 | 62,308 | | | 132 | ||||||||||||||||||
POSCO Thainox Public Company Limited |
175,429 | 2,915 | 6,891 | | | 176 | ||||||||||||||||||
POSCO America Corporation |
404,184 | | | | | 641 | ||||||||||||||||||
POSCO Canada Ltd. |
| | 83,005 | | | | ||||||||||||||||||
POSCO Asia Co., Ltd. |
1,304,048 | 221 | 307,166 | 102 | 735 | 1,657 | ||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
97,707 | | | | | 513 | ||||||||||||||||||
POSCO(Suzhou) Automotive |
102,823 | | | | | | ||||||||||||||||||
POSCO Japan Co., Ltd. |
806,338 | | 16,672 | 2,406 | 322 | 2,017 | ||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
172,017 | | | | | | ||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
268,152 | 106 | | | | 57 | ||||||||||||||||||
Others |
720,889 | 10,201 | 156,233 | 41,955 | 159,168 | 82,790 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
8,229,765 | 98,128 | 1,569,153 | 372,853 | 442,472 | 251,951 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Associates and joint ventures(*3) |
||||||||||||||||||||||||
SeAH Changwon Integrated Special Steel(*6) |
28 | | 1,095 | | 627 | | ||||||||||||||||||
POSCO PLANTEC Co., Ltd.(*6) |
2,193 | 31 | 2,533 | 143,946 | 12,248 | 6,825 | ||||||||||||||||||
SNNC |
4,661 | 863 | 334,208 | | | | ||||||||||||||||||
POSCO-SAMSUNG-Slovakia Processing Center |
31,456 | | | | | | ||||||||||||||||||
KOBRASCO |
| 29,297 | | | | | ||||||||||||||||||
Others |
21,996 | 12,923 | 57,106 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
60,334 | 43,114 | 394,942 | 143,946 | 12,875 | 6,825 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
141,242 | 1,964,095 | 516,799 | 455,347 | 258,776 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(*1) | Sales and others mainly consist of sales of steel products to subsidiaries, associates and joint ventures. |
(*2) | Purchases and others mainly consist of subsidiaries purchases of construction services and purchases of raw materials to manufacture steel products. |
(*3) | As of September 30, 2016, the Company provided guarantees to related parties. (Note 34) |
(*4) | Others (purchase) mainly consist of service fees related to maintenance and repair of ERP System. |
(*5) | During the period ended September 30, 2016, Daewoo International Corporation was renamed POSCO DAEWOO Corporation. |
(*6) | During the year ended December 31, 2015, it was reclassified from a subsidiary to an associate. |
50
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | For the nine-month period ended September 30, 2015 |
(in millions of Won) | Sales and others | Purchase and others | ||||||||||||||||||||||
Sales | Others | Purchase of material |
Purchase of fixed assets |
Outsourced processing cost |
Others | |||||||||||||||||||
Subsidiaries |
||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
114 | 19 | 358,910 | 1,822 | 29,398 | |||||||||||||||||||
POSCO Processing & Service |
839,457 | | 338,817 | | | 1,829 | ||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
298,089 | | | | 7,510 | 56 | ||||||||||||||||||
POSCO ICT |
893 | 5 | | 180,537 | 22,249 | 131,964 | ||||||||||||||||||
eNtoB Corporation |
| | 203,061 | 5,118 | 94 | 15,004 | ||||||||||||||||||
POSCO CHEMTECH |
340,549 | 24,756 | 387,038 | 6,893 | 225,706 | 1,180 | ||||||||||||||||||
POSCO Energy CO., LTD |
140,252 | 999 | | | | 13 | ||||||||||||||||||
POSCO TMC Co., Ltd. |
202,421 | | | | 1,058 | 1,017 | ||||||||||||||||||
POSCO AST Co., Ltd. |
283,513 | 3 | 4,115 | | 29,363 | 412 | ||||||||||||||||||
POS-HIMETAL Co., Ltd. |
9,071 | 118 | 114,935 | | | 33 | ||||||||||||||||||
POSCO DAEWOO Corporation |
2,652,467 | 34,341 | 37,732 | | | 865 | ||||||||||||||||||
SeAH Changwon Integrated Special Steel |
2,811 | 176,904 | 8,239 | | 515 | 75 | ||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
4,280 | 33 | 2,544 | 116,912 | 15,135 | 13,649 | ||||||||||||||||||
POSCO Thainox Public Company Limited |
203,411 | 10 | 3,833 | | | 28 | ||||||||||||||||||
PT. KRAKATAU POSCO |
| | 115,557 | | | | ||||||||||||||||||
POSCO America Corporation |
496,793 | 7 | | | | 139 | ||||||||||||||||||
POSCO Canada Ltd. |
| | 95,936 | | | | ||||||||||||||||||
POSCO Asia Co., Ltd. |
1,365,277 | 873 | 202,537 | | 182 | 1,120 | ||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
97,498 | | | | | 46 | ||||||||||||||||||
POSCO JAPAN Co., Ltd. |
785,031 | 9,383 | 18,625 | 2,198 | 201 | 1,086 | ||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
201,101 | 189 | | | | 2 | ||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
302,720 | | | | | 31 | ||||||||||||||||||
Others |
667,261 | 11,960 | 182,468 | 73,807 | 161,069 | 78,332 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
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|
|
|||||||||||||
8,896,022 | 259,695 | 1,715,456 | 744,375 | 464,904 | 276,279 | |||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
|||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||
SeAH Changwon Integrated Special Steel |
3,547 | | 3,327 | | 268 | 1 | ||||||||||||||||||
SNNC |
1,934 | 412 | 326,679 | | | | ||||||||||||||||||
POSCO-SAMSUNG-Slovakia Processing Center |
19,187 | | | | | | ||||||||||||||||||
Others |
12,023 | 40,278 | 43,220 | | 1 | | ||||||||||||||||||
|
|
|
|
|
|
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|
|
|
|
|
|||||||||||||
36,691 | 40,690 | 373,226 | | 269 | 1 | |||||||||||||||||||
|
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|
|
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|
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|
|
|
|||||||||||||
300,385 | 2,088,682 | 744,375 | 465,173 | 276,280 | ||||||||||||||||||||
|
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|
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|
|
51
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(b) | Significant transactions between the controlling company and related parties for the three-month periods ended September 30, 2016 and 2015 were as follows: |
1) | For the three-month period ended September 30, 2016 |
(in millions of Won) | Sales and others | Purchase and others | ||||||||||||||||||||||
Sales | Others | Purchase of material |
Purchase of fixed assets |
Outsourced processing cost |
Others | |||||||||||||||||||
Subsidiaries |
||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
13 | 8 | 27,381 | | 2,190 | |||||||||||||||||||
POSCO Processing & Service |
335,743 | | 123,031 | | 10,503 | 461 | ||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
79,499 | | | | 2,899 | 65 | ||||||||||||||||||
POSCO ICT |
301 | 231 | | 51,045 | 7,191 | 43,332 | ||||||||||||||||||
eNtoB Corporation |
| 5 | 64,335 | 760 | 24 | 4,308 | ||||||||||||||||||
POSCO CHEMTECH |
79,401 | 5,801 | 128,287 | 3,666 | 75,368 | 1,169 | ||||||||||||||||||
POSCO Energy CO., LTD |
45,256 | 371 | | | | 22 | ||||||||||||||||||
POSCO TMC Co., Ltd. |
57,402 | | 1 | | | 56 | ||||||||||||||||||
POSCO DAEWOO Corporation |
807,385 | | 25,136 | | | | ||||||||||||||||||
POSCO Thainox Public Company Limited |
60,482 | 58 | 2,654 | | | 153 | ||||||||||||||||||
POSCO America Corporation |
118,816 | | | | | 641 | ||||||||||||||||||
POSCO Canada Ltd. |
| | 19,524 | | | | ||||||||||||||||||
POSCO Asia Co., Ltd. |
403,657 | 98 | 142,877 | 53 | 444 | 935 | ||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
36,783 | | | | | 94 | ||||||||||||||||||
POSCO(Suzhou) Automotive Processing |
38,436 | | | | | | ||||||||||||||||||
POSCO Japan Co., Ltd. |
291,532 | | 4,461 | 2,038 | 268 | 1,023 | ||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
60,836 | | | | | | ||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
75,568 | 106 | | | | | ||||||||||||||||||
Others |
302,261 | 383 | 48,557 | 10,770 | 54,331 | 31,954 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2,794,108 | 7,066 | 558,871 | 95,713 | 151,028 | 86,403 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||
SeAH Changwon Integrated Special Steel |
8 | | 208 | | 110 | | ||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
339 | 6 | 721 | 51,943 | 4,078 | 1,956 | ||||||||||||||||||
SNNC |
2,261 | 166 | 128,309 | | | | ||||||||||||||||||
POSCO-SAMSUNG-Slovakia Processing Center |
14,887 | | | | | | ||||||||||||||||||
Others |
3,769 | 8,313 | 28,808 | | | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
21,264 | 8,485 | 158,046 | 51,943 | 4,188 | 1,956 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
15,551 | 716,917 | 147,656 | 155,216 | 88,359 | ||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
52
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | For the three-month period ended September 30, 2015 |
(in millions of Won) | Sales and others | Purchase and others | ||||||||||||||||||||||
Sales | Others | Purchase of material |
Purchase of fixed assets |
Outsourced processing cost |
Others | |||||||||||||||||||
Subsidiaries |
||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
24 | | 67,549 | | 62 | |||||||||||||||||||
POSCO Processing & Service |
305,176 | | 91,934 | | | 197 | ||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
99,689 | | | | 1,812 | 2 | ||||||||||||||||||
POSCO ICT |
213 | 1 | | 96,025 | 7,580 | 43,535 | ||||||||||||||||||
eNtoB Corporation |
| | 56,609 | 2,722 | 41 | 4,540 | ||||||||||||||||||
POSCO CHEMTECH |
94,719 | 7,123 | 127,539 | 711 | 75,685 | 681 | ||||||||||||||||||
POSCO Energy CO., LTD |
44,075 | 384 | | | | | ||||||||||||||||||
POSCO TMC Co., Ltd. |
79,405 | | | | 392 | 383 | ||||||||||||||||||
POSCO AST Co., Ltd. |
84,368 | | | | 10,092 | 303 | ||||||||||||||||||
POSHIMETAL Co., Ltd. |
2,554 | 43 | 32,811 | | | | ||||||||||||||||||
POSCO DAEWOO Corporation |
870,337 | | 10,983 | | | 96 | ||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
299 | 8 | 809 | 52,420 | 4,675 | 2,727 | ||||||||||||||||||
POSCO Thainox Public Company Limited |
63,593 | | 533 | | | 3 | ||||||||||||||||||
POSCO America Corporation |
160,721 | | | | | 54 | ||||||||||||||||||
POSCO Canada Ltd. |
| | 31,912 | | | | ||||||||||||||||||
POSCO Asia Co., Ltd. |
443,568 | 294 | 77,282 | | 87 | 883 | ||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
16,647 | | | | | | ||||||||||||||||||
POSCO JAPAN Co., Ltd. |
277,524 | | 6,691 | 524 | 201 | 567 | ||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
68,672 | 36 | | | | 2 | ||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
94,782 | | | | | 31 | ||||||||||||||||||
Others |
204,367 | 1,835 | 61,956 | 28,633 | 54,226 | 32,070 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
2,911,809 | 9,748 | 499,059 | 248,584 | 154,791 | 86,136 | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||
SeAH Changwon Integrated Special Steel |
1,894 | | 655 | | 39 | | ||||||||||||||||||
SNNC |
729 | 129 | 114,537 | | | | ||||||||||||||||||
POSCO-SAMSUNG-Slovakia Processing Center |
4,788 | | | | | | ||||||||||||||||||
Others |
2,787 | 8,879 | 14,925 | | 1 | | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
10,198 | 9,008 | 130,117 | | 40 | | |||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
18,756 | 629,176 | 248,584 | 154,831 | 86,136 | ||||||||||||||||||||
|
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|
|
|
|
|
|
|
|
|
53
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(c) | The related account balances of significant transactions between the controlling company and related parties as of September 30, 2016 and December 31, 2015 are as follows: |
1) | September 30, 2016 |
(in millions of Won) | Receivables | Payables | ||||||||||||||||||||||||||
Trade accounts and notes receivable |
Others | Total | Trade accounts and notes payable |
Accounts payable |
Others | Total | ||||||||||||||||||||||
Subsidiaries |
||||||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
686 | 686 | | 5,192 | 482 | 5,674 | ||||||||||||||||||||||
POSCO Processing & Service |
127,741 | 46 | 127,787 | 7,176 | 2,149 | 4,024 | 13,349 | |||||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
42,508 | 80 | 42,588 | | 5 | 1,474 | 1,479 | |||||||||||||||||||||
POSCO ICT |
| 139 | 139 | 846 | 43,537 | 6,446 | 50,829 | |||||||||||||||||||||
eNtoB Corporation |
| | | 8,158 | 17,460 | 15 | 25,633 | |||||||||||||||||||||
POSCO CHEMTECH |
26,611 | 3,551 | 30,162 | 56,983 | 14,421 | 17,484 | 88,888 | |||||||||||||||||||||
POSCO Energy CO., LTD |
17,147 | 622 | 17,769 | | | 1,945 | 1,945 | |||||||||||||||||||||
POSCO TMC Co., Ltd. |
58,785 | 8 | 58,793 | | 25 | 269 | 294 | |||||||||||||||||||||
POSCO DAEWOO Corporation (formerly, Daewoo International Corp.) |
130,534 | 17 | 130,551 | 6,628 | 14 | 49 | 6,691 | |||||||||||||||||||||
POSCO Thainox Public Company Limited |
60,482 | | 60,482 | | 153 | | 153 | |||||||||||||||||||||
POSCO America Corporation |
8,144 | | 8,144 | | 343 | | 343 | |||||||||||||||||||||
POSCO Asia Co., Ltd. |
279,986 | 9 | 279,995 | 19,985 | | 143 | 20,128 | |||||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
21,733 | | 21,733 | | 32 | | 32 | |||||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
73,730 | | 73,730 | | | | | |||||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
121,386 | 5 | 121,391 | | | | | |||||||||||||||||||||
Others |
305,209 | 2,497 | 307,706 | 7,088 | 22,180 | 24,320 | 53,588 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1,273,996 | 7,660 | 1,281,656 | 106,864 | 105,511 | 56,651 | 269,026 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
160 | 1 | 161 | 1,812 | 16,919 | 27 | 18,758 | |||||||||||||||||||||
SNNC |
214 | 32 | 246 | 28,222 | | 598 | 28,820 | |||||||||||||||||||||
KOBRASCO |
| 14,648 | 14,648 | | | | | |||||||||||||||||||||
Others |
738 | 3 | 741 | 400 | | | 400 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1,112 | 14,684 | 15,796 | 30,434 | 16,919 | 625 | 47,978 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
22,344 | 1,297,452 | 137,298 | 122,430 | 57,276 | 317,004 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | December 31, 2015 |
(in millions of Won) | Receivables | Payables | ||||||||||||||||||||||||||
Trade accounts and notes receivable |
Others | Total | Trade accounts and notes payable |
Accounts payable |
Others | Total | ||||||||||||||||||||||
Subsidiaries |
||||||||||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
30,368 | 30,876 | | 42,159 | 1,002 | 43,161 | ||||||||||||||||||||||
POSCO Processing & Service |
74,985 | 175 | 75,160 | 10,868 | 603 | | 11,471 | |||||||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
43,669 | 66 | 43,735 | | | 1,262 | 1,262 | |||||||||||||||||||||
POSCO ICT |
| 6,832 | 6,832 | 1,060 | 94,865 | 5,880 | 101,805 | |||||||||||||||||||||
eNtoB Corporation |
| | | 8,683 | 14,209 | 12 | 22,904 | |||||||||||||||||||||
POSCO CHEMTECH |
32,670 | 4,500 | 37,170 | 54,636 | 11,398 | 18,062 | 84,096 | |||||||||||||||||||||
POSCO Energy CO., LTD |
18,680 | 2,585 | 21,265 | | | | | |||||||||||||||||||||
POSCO TMC Co., Ltd. |
63,521 | 31 | 63,552 | | 180 | 195 | 375 | |||||||||||||||||||||
POSCO AST |
54,844 | 54 | 54,898 | | 1,915 | 3,294 | 5,209 | |||||||||||||||||||||
POSHIMETAL Co., Ltd. |
707 | 9 | 716 | | 10,148 | | 10,148 | |||||||||||||||||||||
POSCO DAEWOO Corporation (formerly, Daewoo International Corp.) |
144,970 | | 144,970 | | | | | |||||||||||||||||||||
POSCO Thainox Public Company Limited |
65,152 | 2 | 65,154 | 542 | | | 542 | |||||||||||||||||||||
POSCO America Corporation |
38,715 | | 38,715 | | | | | |||||||||||||||||||||
POSCO Asia Co., Ltd. |
299,608 | 235 | 299,843 | 21,198 | 69 | | 21,267 | |||||||||||||||||||||
Qingdao Pohang Stainless Steel Co., Ltd. |
16,689 | | 16,689 | | | | | |||||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
94,588 | | 94,588 | | | | | |||||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
205,390 | 20 | 205,410 | | | | | |||||||||||||||||||||
Others |
172,019 | 5,035 | 177,054 | 18,208 | 45,476 | 23,985 | 87,669 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
1,326,715 | 49,912 | 1,376,627 | 115,195 | 221,022 | 53,692 | 389,909 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||||||
SeAH Changwon Integrated Special Steel |
1,201 | | 1,201 | 161 | 15 | | 176 | |||||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
123 | 19 | 142 | 1,901 | 46,159 | | 48,060 | |||||||||||||||||||||
SNNC |
298 | 20 | 318 | 639 | 2 | | 641 | |||||||||||||||||||||
Others |
740 | 12,200 | 12,940 | | 145 | | 145 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
2,362 | 12,239 | 14,601 | 2,701 | 46,321 | | 49,022 | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
62,151 | 1,391,228 | 117,896 | 267,343 | 53,692 | 438,931 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
55
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(d) | Significant transactions between the Company, excluding the controlling company, and related companies for the nine-month periods ended September 30, 2016 and 2015 were as follows: |
1) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Sales and others | Purchase and others | ||||||||||||||
Sales | Others | Purchase of material |
Others | |||||||||||||
Associates and joint ventures |
||||||||||||||||
SeAH Changwon Integrated Special Steel |
| 22,035 | | |||||||||||||
POSCO PLANTEC Co., Ltd. |
14,850 | 5 | 1,606 | 1,608 | ||||||||||||
New Songdo International City Development, LLC |
179,475 | | | 14 | ||||||||||||
SNNC |
16,188 | | 20,068 | 8,765 | ||||||||||||
Posco e&c Songdo International Building |
4,245 | | | 16,219 | ||||||||||||
CHUNCHEON ENERGY CO., LTD |
240,765 | | | | ||||||||||||
VSC POSCO Steel Corporation |
33,405 | 48 | 513 | | ||||||||||||
USS-POSCO Industries |
286,879 | | 947 | | ||||||||||||
CSP - Compania Siderurgica do Pecem |
131,644 | | | | ||||||||||||
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd |
48,690 | | 46,067 | | ||||||||||||
BX STEEL POSCO Cold Rolled Sheet Co., Ltd. |
| | 20,122 | | ||||||||||||
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd |
10,171 | | | | ||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
22,024 | | 31 | | ||||||||||||
Zhangjiagang Pohang Refractories Co., Ltd. |
250 | 14 | 215 | 1,686 | ||||||||||||
Sebang Steel |
| | 19,684 | | ||||||||||||
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO INL TRADING CO., LTD. |
82,785 | | 3,535 | | ||||||||||||
DMSA/AMSA |
| | 55,665 | | ||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
| 66,086 | | | ||||||||||||
Others |
190,424 | 3,906 | 25,984 | 427 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
70,059 | 216,472 | 28,719 | ||||||||||||||
|
|
|
|
|
|
|
|
2) | For the nine-month period ended September 30, 2015 |
(in millions of Won) | Sales and others | Purchase and others | ||||||||||||||
Sales | Others | Purchase of material |
Others | |||||||||||||
Associates and joint ventures |
||||||||||||||||
SeAH Changwon Integrated Special Steel |
| 36,866 | 1,982 | |||||||||||||
New Songdo International City Development, LLC |
343,699 | | | 597 | ||||||||||||
SNNC |
21,706 | 41 | | 52,790 | ||||||||||||
Posco e&c Songdo International Building |
4,725 | | | 19,053 | ||||||||||||
VSC POSCO Steel Corporation |
17,684 | | 2,149 | 3 | ||||||||||||
USS-POSCO Industries |
279,014 | | 912 | | ||||||||||||
CSP - Compania Siderurgica do Pecem |
666,618 | | | | ||||||||||||
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd |
57,267 | | 53,693 | | ||||||||||||
BX STEEL POSCO Cold Rolled Sheet Co., Ltd. |
3 | | 16,895 | | ||||||||||||
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd |
6,762 | | | | ||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
20,947 | | | | ||||||||||||
Zhangjiagang Pohang Refractories Co., Ltd. |
715 | 12 | 16,470 | 1,368 | ||||||||||||
Sebang Steel |
| | 23,076 | | ||||||||||||
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO INL TRADING CO., LTD. |
167,658 | | 3,040 | 3,190 | ||||||||||||
DMSA/AMSA |
800 | 7,061 | | | ||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
| 21,854 | | | ||||||||||||
Others |
186,348 | 1,035 | 8,769 | 2,510 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
30,003 | 161,870 | 81,493 | ||||||||||||||
|
|
|
|
|
|
|
|
56
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(e) | Significant transactions between the Company, excluding the controlling company, and related companies for the three-month periods ended September 30, 2016 and 2015 were as follows: |
1) | For the three-month period ended September 30, 2016 |
(in millions of Won) | Sales and others | Purchase and others | ||||||||||||||
Sales | Others | Purchase of material |
Others | |||||||||||||
Associates and joint ventures |
||||||||||||||||
SeAH Changwon Integrated Special Steel |
| 1,403 | | |||||||||||||
POSCO PLANTEC Co., Ltd. |
8,506 | 5 | | | ||||||||||||
New Songdo International City Development, LLC |
51,142 | | | 6 | ||||||||||||
SNNC |
7,012 | | 1,700 | 3,682 | ||||||||||||
Posco e&c Songdo International Building |
1,423 | | | 3,372 | ||||||||||||
CHUNCHEON ENERGY CO., LTD |
44,586 | | | | ||||||||||||
VSC POSCO Steel Corporation |
10,380 | | | | ||||||||||||
USS-POSCO Industries |
119,903 | | 453 | | ||||||||||||
CSP - Compania Siderurgica do Pecem |
123,743 | | | | ||||||||||||
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd |
16,914 | | 11,067 | | ||||||||||||
BX STEEL POSCO Cold Rolled Sheet Co., Ltd. |
| | 2,479 | | ||||||||||||
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd |
4,015 | | | | ||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
8,282 | | 11 | | ||||||||||||
Zhangjiagang Pohang Refractories Co., Ltd. |
125 | | | 491 | ||||||||||||
Sebang Steel |
| | 6,590 | | ||||||||||||
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO INL TRADING CO., LTD. |
29,774 | | | | ||||||||||||
DMSA/AMSA |
| | 12,813 | | ||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
| 7,018 | | | ||||||||||||
Others |
72,724 | 1,032 | 12,919 | 5 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
8,055 | 49,435 | 7,556 | ||||||||||||||
|
|
|
|
|
|
|
|
2) | For the three-month period ended September 30, 2015 |
(in millions of Won) | Sales and others | Purchase and others | ||||||||||||||
Sales | Others | Purchase of material |
Others | |||||||||||||
Associates and joint ventures |
||||||||||||||||
SeAH Changwon Integrated Special Steel |
| 17,865 | | |||||||||||||
New Songdo International City Development, LLC |
95,687 | | | 512 | ||||||||||||
SNNC |
9,569 | 3 | | 335 | ||||||||||||
Posco e&c Songdo International Building |
1,604 | | | 6,269 | ||||||||||||
VSC POSCO Steel Corporation |
4,630 | | 78 | 1 | ||||||||||||
USS-POSCO Industries |
80,254 | | 476 | | ||||||||||||
CSP - Compania Siderurgica do Pecem |
194,441 | | | | ||||||||||||
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd |
12,768 | | 10,624 | | ||||||||||||
BX STEEL POSCO Cold Rolled Sheet Co., Ltd. |
3 | | 5,021 | | ||||||||||||
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd |
1,241 | | | | ||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
5,460 | | | | ||||||||||||
Zhangjiagang Pohang Refractories Co., Ltd. |
243 | 4 | 4,869 | 731 | ||||||||||||
Sebang Steel |
| | 7,013 | | ||||||||||||
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO INL TRADING CO., LTD. |
76,972 | | | 1 | ||||||||||||
DMSA/AMSA |
793 | 2,531 | | | ||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
| 7,257 | | | ||||||||||||
Others |
72,024 | 333 | 2,975 | 176 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
10,128 | 48,921 | 8,025 | ||||||||||||||
|
|
|
|
|
|
|
|
57
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(f) | The related account balances of significant transactions between the Company, excluding the controlling company, and related companies as of September 30, 2016 and December 31, 2015 are as follows: |
1) | September 30, 2016 |
(in millions of Won) | Receivables | Payables | ||||||||||||||||||||||||||
Trade accounts and notes receivable |
Loans | Others | Total | Trade accounts and notes payable |
Others | Total | ||||||||||||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
3,534 | | 3 | 3,537 | | 8,585 | 8,585 | |||||||||||||||||||||
New Songdo International City Development, LLC |
207,288 | | 5,725 | 213,013 | | | | |||||||||||||||||||||
CHUNCHEON ENERGY CO., LTD |
39,667 | | | 39,667 | | 7,118 | 7,118 | |||||||||||||||||||||
VSC POSCO Steel Corporation |
12,720 | | | 12,720 | | | | |||||||||||||||||||||
USS-POSCO Industries |
83,653 | | | 83,653 | 126 | | 126 | |||||||||||||||||||||
Nickel Mining Company SAS |
140 | 54,815 | 96 | 55,051 | | | | |||||||||||||||||||||
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD. |
59,372 | 54,815 | 643 | 114,830 | | 868 | 868 | |||||||||||||||||||||
CSP - Compania Siderurgica do Pecem |
421,769 | | 111,233 | 533,002 | | 210,395 | 210,395 | |||||||||||||||||||||
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd |
1,635 | 6,030 | 36 | 7,701 | 2,359 | | 2,359 | |||||||||||||||||||||
PT. Batutua Tembaga Raya |
| 34,451 | | 34,451 | 2,249 | | 2,249 | |||||||||||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
7,602 | 9,319 | 45 | 16,966 | 19 | | 19 | |||||||||||||||||||||
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO INL TRADING CO., LTD. |
51,352 | | | 51,352 | | | | |||||||||||||||||||||
DMSA/AMSA |
| 82,223 | | 82,223 | | | | |||||||||||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
| 254,668 | | 254,668 | | | | |||||||||||||||||||||
Others |
171,496 | 59,195 | 11,204 | 241,895 | 5,964 | 590 | 6,554 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
555,516 | 128,985 | 1,744,729 | 10,717 | 227,556 | 238,273 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
58
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
2) | December 31, 2015 |
(in millions of Won) | Receivables | Payables | ||||||||||||||||||||||||||
Trade accounts and notes receivable |
Loans | Others | Total | Trade accounts and notes payable |
Others | Total | ||||||||||||||||||||||
Associates and joint ventures |
||||||||||||||||||||||||||||
SeAH Changwon Integrated Special Steel |
| | 8,721 | 3,489 | 19 | 3,508 | ||||||||||||||||||||||
POSCO PLANTEC Co., Ltd. |
9,853 | | 6 | 9,859 | 6,263 | 8,908 | 15,171 | |||||||||||||||||||||
New Songdo International City Development, LLC |
168,646 | | 25,964 | 194,610 | | 14 | 14 | |||||||||||||||||||||
Posco e&c Songdo International Building |
5,821 | | | 5,821 | | | | |||||||||||||||||||||
VSC POSCO Steel Corporation |
17,283 | | | 17,283 | 34 | | 34 | |||||||||||||||||||||
USS-POSCO Industries |
170,170 | | | 170,170 | 9 | | 9 | |||||||||||||||||||||
Nickel Mining Company SAS |
2,353 | 17,580 | 67 | 20,000 | | | | |||||||||||||||||||||
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD. |
63,132 | 58,600 | 642 | 122,374 | | 3,982 | 3,982 | |||||||||||||||||||||
CSP - Compania Siderurgica do Pecem |
410,005 | | 118,112 | 528,117 | | 138,111 | 138,111 | |||||||||||||||||||||
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd |
9,455 | 10,782 | 6 | 20,243 | 3,999 | | 3,999 | |||||||||||||||||||||
PT. Batutua Tembaga Raya |
| 36,830 | | 36,830 | | | | |||||||||||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
8,961 | 11,720 | 48 | 20,729 | 4 | | 4 | |||||||||||||||||||||
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO INL TRADING CO., LTD. |
90,195 | | | 90,195 | 921 | | 921 | |||||||||||||||||||||
DMSA/AMSA |
| 99,854 | | 99,854 | | | | |||||||||||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
| 283,954 | | 283,954 | | | | |||||||||||||||||||||
Others |
192,621 | 52,034 | 13,648 | 258,303 | 12,591 | 21,181 | 33,772 | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
571,354 | 158,493 | 1,887,063 | 27,310 | 172,215 | 199,525 | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
59
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(g) | The details of significant financial transactions between the Company, excluding the controlling company, and related companies for the nine-month period ended September 30, 2016 and the year ended December 31, 2015 were as follows: |
1) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Beginning | Loan | Collection | Others(*3) | Ending | |||||||||||||||
Associates and joint ventures |
||||||||||||||||||||
MTAPOLIS Co.,Ltd. |
| | | 26,000 | ||||||||||||||||
Posco e&c Songdo International Building(*1) |
| 298,865 | | (298,865 | ) | | ||||||||||||||
DMSA/AMSA(*2) |
99,854 | 11,774 | | (29,405 | ) | 82,223 | ||||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
283,954 | | (11,594 | ) | (17,692 | ) | 254,668 | |||||||||||||
PT. Batutua Tembaga Raya |
36,830 | | | (2,379 | ) | 34,451 | ||||||||||||||
PT. Tanggamus Electric Power |
2,359 | | | (153 | ) | 2,206 | ||||||||||||||
PT. Wampu Electric Power |
4,454 | 1,123 | | (351 | ) | 5,226 | ||||||||||||||
PT. POSMI Steel Indonesia |
4,688 | | | (303 | ) | 4,385 | ||||||||||||||
Nickel Mining Company SAS |
17,580 | 40,646 | | (3,411 | ) | 54,815 | ||||||||||||||
POSK(Pinghu) Steel Processing Center Co., Ltd. |
5,743 | 5,690 | (11,381 | ) | (52 | ) | | |||||||||||||
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD. |
58,600 | | | (3,785 | ) | 54,815 | ||||||||||||||
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd |
10,782 | | (4,297 | ) | (455 | ) | 6,030 | |||||||||||||
KRAKATAU POS-CHEM DONG-SUH CHEMICAL |
| 6,968 | | (390 | ) | 6,578 | ||||||||||||||
Hamparan Mulya |
3,516 | | | (227 | ) | 3,289 | ||||||||||||||
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd |
5,274 | | | (341 | ) | 4,933 | ||||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
11,720 | | | (2,401 | ) | 9,319 | ||||||||||||||
Pos-SeAH Steel Wire (Thailand) Co., Ltd. |
| 6,968 | (1,742 | ) | 1,352 | 6,578 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
372,034 | (29,014 | ) | (358,858 | ) | 555,516 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(*1) | During the nine-month period ended September 30, 2016, it was classified as a subsidiary from an associates. |
(*2) | During the period ended September 30, 2016, loans amounting to |
(*3) | Includes adjustments of foreign currency translation differences and others. |
2) | For the year ended December 31, 2015 |
(in millions of Won) | Beginning | Loan | Collection | Others(*2) | Ending | |||||||||||||||
Associates and joint ventures |
||||||||||||||||||||
MTAPOLIS Co.,Ltd. |
| | | 26,000 | ||||||||||||||||
DMSA/AMSA(*1) |
140,544 | 21,653 | | (62,343 | ) | 99,854 | ||||||||||||||
South-East Asia Gas Pipeline Company Ltd. |
295,352 | | (29,885 | ) | 18,487 | 283,954 | ||||||||||||||
PT. Batutua Tembaga Raya |
34,342 | | | 2,488 | 36,830 | |||||||||||||||
PT. Tanggamus Electric Power |
1,733 | 493 | | 133 | 2,359 | |||||||||||||||
PT. Wampu Electric Power |
| 4,299 | | 155 | 4,454 | |||||||||||||||
VSC POSCO Steel Corporation |
2,024 | | (2,024 | ) | | | ||||||||||||||
PT. POSMI Steel Indonesia |
4,397 | | | 291 | 4,688 | |||||||||||||||
Nickel Mining Company SAS |
16,488 | | | 1,092 | 17,580 | |||||||||||||||
POSK(Pinghu) Steel Processing Center Co., Ltd. |
10,772 | | (5,543 | ) | 514 | 5,743 | ||||||||||||||
AN KHANH NEW CITY DEVELOPMENT J.V CO., LTD. |
54,960 | | | 3,640 | 58,600 | |||||||||||||||
Zhongyue POSCO (Qinhuangdao) Tinplate Industrial Co., Ltd |
11,212 | | (1,132 | ) | 702 | 10,782 | ||||||||||||||
Hamparan Mulya |
3,298 | | | 218 | 3,516 | |||||||||||||||
POS-SEAHSTEELWIRE(TIANJIN)CO.,Ltd |
4,946 | | | 328 | 5,274 | |||||||||||||||
POSCO SeAH Steel Wire(Nantong) Co., Ltd. |
10,992 | | | 728 | 11,720 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
26,445 | (38,584 | ) | (33,567 | ) | 571,354 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
(*1) | During the period ended December 31, 2015, loans amounting to |
(*2) | Includes adjustments of foreign currency translation differences and others. |
60
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(h) | For the nine-month periods ended September 30, 2016 and 2015, details of compensation to key management officers were as follows: |
(in millions of Won) | September 30, 2016 | September 30, 2015 | ||||||
Short-term benefits |
81,692 | |||||||
Retirement benefits |
13,371 | 17,289 | ||||||
Long-term benefits |
13,714 | 15,472 | ||||||
|
|
|
|
|||||
114,453 | ||||||||
|
|
|
|
Key management officers include directors (including non-standing directors), executive officials and fellow officials who have significant influence and responsibilities in the Companys business and operations.
34. Commitments and Contingencies
(a) | Details of guarantees |
Contingent liabilities on outstanding guarantees provided by the Company as of September 30, 2016, are as follows:
(in millions of Won) | Guarantee limit | Guarantee amount | ||||||||||||||||||||||||||
Guarantor |
Guarantee beneficiary |
Financial institution |
Foreign currency | Won equivalent | Foreign currency | Won equivalent | ||||||||||||||||||||||
[The Company] |
||||||||||||||||||||||||||||
POSCO |
POSCO ASSAN TST STEEL INDUSTRY |
SMBC and others |
USD | 146,527,500 | 160,638 | USD | 131,874,750 | 144,574 | ||||||||||||||||||||
POSCO COATED STEEL (THAILAND) CO., LTD. |
The Great & Co Co., Ltd.(SPC) |
THB | 5,501,000,000 | 173,997 | THB | 5,501,000,000 | 173,997 | |||||||||||||||||||||
POSCO Electrical Steel India Private Limited |
ING and others |
USD | 83,784,000 | 91,852 | USD | 83,784,000 | 91,852 | |||||||||||||||||||||
POSCO Asia Co., Ltd. |
HSBC and others |
USD | 150,000,000 | 164,445 | USD | 150,000,000 | 164,445 | |||||||||||||||||||||
POSCO Maharashtra Steel Private Limited |
Export-Import Bank of Korea and others |
USD | 566,069,000 | 620,582 | USD | 395,655,200 | 433,758 | |||||||||||||||||||||
POSCO MEXICO S.A. DE C.V. |
Korea Development Bank and others |
USD | 344,725,000 | 377,923 | USD | 234,725,000 | 257,329 | |||||||||||||||||||||
POSCO SS VINA Co., Ltd. |
Export-Import Bank of Korea and others |
USD | 354,351,050 | 388,475 | USD | 354,351,050 | 388,475 | |||||||||||||||||||||
POSCO VST CO., LTD. |
ANZ and others |
USD | 65,000,000 | 71,260 | USD | 24,375,000 | 26,722 | |||||||||||||||||||||
POSCO(Guangdong) Automotive Steel Co., Ltd. |
SMBC and others |
USD | 65,000,000 | 71,260 | USD | 65,000,000 | 71,260 | |||||||||||||||||||||
POSCO-VIETNAM Co., Ltd. |
Export-Import Bank of Korea |
USD | 196,000,000 | 214,875 | USD | 196,000,000 | 214,875 | |||||||||||||||||||||
PT. KRAKATAU POSCO |
Export-Import Bank of Korea and others |
USD | 1,350,300,000 | 1,480,334 | USD | 1,222,747,825 | 1,340,499 | |||||||||||||||||||||
Zhangjiagang Pohang Stainless Steel Co., Ltd. |
Korea Development Bank and others |
CNY | 1,084,955,000 | 177,900 | CNY | 1,084,955,000 | 177,900 | |||||||||||||||||||||
POSCO DAEWOO Corporation (formerly, Daewoo International Corporation) |
POSCO DAEWOO INDIA PVT., LTD. |
Shinhan Bank and others |
USD | 165,000,000 | 180,890 | USD | 144,137,710 | 158,017 | ||||||||||||||||||||
Daewoo Paper Manufacturing Co., Ltd. |
HSBC |
USD | 12,500,000 | 13,704 | USD | 12,500,000 | 13,704 | |||||||||||||||||||||
DAEWOO TEXTILE BUKHARA LLC |
Export-Import Bank of Korea |
USD | 10,000,000 | 10,963 | USD | 10,000,000 | 10,963 | |||||||||||||||||||||
POSCO ASSAN TST STEEL INDUSTRY |
ING and others |
USD | 14,652,750 | 16,064 | USD | 14,652,750 | 16,064 | |||||||||||||||||||||
PT.POSCO INDONESIA INTI |
Export-Import Bank of Korea and others |
USD | 90,000,000 | 98,668 | USD | 90,000,000 | 98,668 | |||||||||||||||||||||
Daewoo Power PNG Ltd. |
Export-Import Bank of Korea |
USD | 54,400,000 | 59,639 | USD | 36,000,000 | 39,467 |
61
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(in millions of Won) | Guarantee limit | Guarantee amount | ||||||||||||||||||||||
Guarantor |
Guarantee beneficiary |
Financial institution |
Foreign currency | Won equivalent | Foreign currency | Won equivalent | ||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
EPC EQUITIES LLP |
SG BANK SEOUL and others |
USD | 59,000,000 | 64,682 | USD | 59,000,000 | 64,682 | ||||||||||||||||
HONG KONG POSCO E&C (CHINA) INVESTMENT Co.,Ltd. |
Woori Bank and others |
USD | 147,000,000 | 161,156 | USD | 144,000,000 | 157,867 | |||||||||||||||||
POSCO E&C Vietnam Co., Ltd. |
Export-Import Bank of Korea |
USD | 16,500,000 | 18,088 | USD | 16,500,000 | 18,088 | |||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION DO BRAZIL LTDA. |
HSBC |
USD | 100,000,000 | 109,630 | USD | 100,000,000 | 109,630 | |||||||||||||||||
SANTOS CMI INC. USA |
Citi New York |
USD | 8,000,000 | 8,770 | USD | 8,000,000 | 8,770 | |||||||||||||||||
POSCO ICT |
SANTOSCMI S.A. |
Citi Ecuador |
USD | 3,000,000 | 3,289 | USD | 3,000,000 | 3,289 | ||||||||||||||||
PT.POSCO ICT INDONESIA |
POSCO Asia Co., Ltd. |
USD | 2,100,000 | 2,302 | USD | 2,100,000 | 2,302 | |||||||||||||||||
POSCO Engineering CO.,Ltd |
POSCO ENGINEERING (THAILAND) CO., LTD. |
HSBC |
USD | 16,000,000 | 17,541 | USD | 16,000,000 | 17,541 | ||||||||||||||||
PT PEN INDONESIA |
POSCO Asia Co., Ltd. |
USD | 5,000,000 | 5,481 | USD | 5,000,000 | 5,481 | |||||||||||||||||
POSCO M-TECH |
PT. POSCO MTECH INDONESIA |
POSCO Asia Co., Ltd. |
USD | 12,500,000 | 13,704 | USD | 12,500,000 | 13,704 | ||||||||||||||||
POSCO CHEMTECH |
PT.Krakatau Posco Chemtech Calcination |
Hana Bank |
USD | 33,600,000 | 36,836 | USD | 25,411,765 | 27,859 | ||||||||||||||||
POSCO Processing&Service |
POSCO Canada Ltd. |
Korea Development Bank |
USD | 8,427,038 | 9,239 | USD | 8,025,750 | 8,799 | ||||||||||||||||
POSCO Gulf SFC LLC |
Hana Bank and others |
USD | 33,000,000 | 36,178 | USD | 30,950,000 | 33,930 | |||||||||||||||||
Pos-Sea Pte Ltd |
Woori Bank and others |
USD | 20,000,000 | 21,926 | USD | 5,000,000 | 5,482 | |||||||||||||||||
DAEWOO TEXTILE BUKHARA LLC |
DAEWOO TEXTILE FERGANA LLC |
National Bank of Uzbekistan |
USD | 6,127,060 | 6,717 | USD | 6,127,060 | 6,717 | ||||||||||||||||
DAEWOO TEXTILE FERGANA LLC |
DAEWOO TEXTILE BUKHARA LLC |
Bukhara TEX |
USD | 2,165,942 | 2,375 | USD | 2,165,942 | 2,375 | ||||||||||||||||
POSCO E&C CHINA CO., Ltd. |
HONG KONG POSCO E&C (CHINA) INVESTMENT Co., Ltd. |
Woori Bank |
USD | 17,000,000 | 18,637 | USD | 17,000,000 | 18,637 | ||||||||||||||||
POSCO JAPAN Co., Ltd. |
POSCO-JWPC Co., Ltd. |
Higo Bank and others |
JPY | 669,400,000 | 7,254 | JPY | 669,400,000 | 7,254 | ||||||||||||||||
SANTOSCMI S.A. |
COMPANIADEAUTOMATIZACION & CONTROL, GENESYS S.A. |
Banco de Guayaquil |
USD | 300,000 | 329 | USD | 144,000 | 158 | ||||||||||||||||
POSCO COATED & COLOR STEEL Co., Ltd. |
Myanmar POSCO C&C Company, Limited. |
POSCO Asia Co., Ltd. and others |
USD | 13,986,947 | 15,334 | USD | 13,986,947 | 15,334 | ||||||||||||||||
POSCO ENERGY CO., LTD. |
PT. KRAKATAU POSCO ENERGY |
Export-Import Bank of Korea and others |
USD | 193,900,000 | 212,573 | USD | 161,642,558 | 177,209 |
62
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(in millions of Won) | Guarantee limit | Guarantee amount | ||||||||||||||||||||||||||
Guarantors |
Guarantee beneficiary |
Financial institution |
Foreign currency | Won equivalent | Foreign currency | Won equivalent | ||||||||||||||||||||||
[Associates and joint ventures] |
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POSCO |
CSP - Compania Siderurgica do Pecem |
Export-Import Bank of Korea and others |
USD | 420,000,000 | 460,447 | USD | 413,416,940 | 453,228 | ||||||||||||||||||||
BNDES |
BRL | 464,060,000 | 156,124 | BRL | 348,349,782 | 117,195 | ||||||||||||||||||||||
LLP POSUK Titanium |
Kookmin Bank |
USD | 15,000,000 | 16,445 | USD | 15,000,000 | 16,445 | |||||||||||||||||||||
POSCO DAEWOO Corporation (formerly, Daewoo International Corporation) |
GLOBAL KOMSCO Daewoo LLC |
ICBC and others |
USD | 10,325,000 | 11,319 | USD | 8,225,000 | 9,017 | ||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
New Songdo International City Development, LLC |
Others | KRW | 340,000 | 340,000 | KRW | 340,000 | 340,000 | ||||||||||||||||||||
POSCO ICT |
Incheon-Gimpo Expressway Co., Ltd |
Korea Development Bank |
KRW | 100,000 | 100,000 | KRW | 100,000 | 100,000 | ||||||||||||||||||||
UITrans LRT Co., Ltd. |
Kookmin Bank |
KRW | 76,000 | 76,000 | KRW | 76,000 | 76,000 | |||||||||||||||||||||
POSCO CHEMTECH |
PT.INDONESIA POS CHEMTECH CHOSUN Ref |
Hana Bank | USD | 4,500,000 | 4,933 | USD | 4,500,000 | 4,933 | ||||||||||||||||||||
KRAKATAU POS-CHEM DONG-SUH CHEMICAL |
Hana Bank | USD | 5,883,750 | 6,450 | USD | 3,032,479 | 3,325 | |||||||||||||||||||||
POSCO DAEWOO CHINA CO., LTD. |
SHANGHAI LANSHENG DAEWOO CORP. |
Bank of Communications |
CNY | 30,000,000 | 4,919 | CNY | 30,000,000 | 4,919 | ||||||||||||||||||||
SHANGHAI WAIGAOQIAO FREE TRADE ZONE LANSHENG DAEWOO INL TRADING CO., LTD. |
Bank of Communications | CNY | 50,000,000 | 8,198 | CNY | 50,000,000 | 8,198 | |||||||||||||||||||||
[Others] |
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POSCO DAEWOO Corporation (formerly, Daewoo International Corporation) |
Ambatovy Project Investments Ltd. and others |
Export-Import Bank of korea | USD | 87,272,727 | 95,677 | USD | 52,335,760 | 57,375 | ||||||||||||||||||||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
Ecocity CO. LTD and others THE GALE INVESTMENTS |
Others | KRW | 1,065,350 | 1,065,350 | KRW | 403,947 | 403,947 | ||||||||||||||||||||
COMPANY, L.L.C. | Woori Bank | USD | 50,000,000 | 54,815 | USD | 50,000,000 | 54,815 | |||||||||||||||||||||
POSCO ICT |
Hyochun CO., LTD |
Daegu Bank and others |
KRW | 39,575 | 39,575 | KRW | 39,575 | 39,575 | ||||||||||||||||||||
SMS Energy and others |
Hana Bank and others |
KRW | 123,880 | 123,880 | KRW | 105,289 | 105,289 | |||||||||||||||||||||
BLT Enterprise and others |
Kyobo Life Insurance Co., Ltd and others |
KRW | 1,163,585 | 1,163,585 | KRW | 1,163,585 | 1,163,585 | |||||||||||||||||||||
POSCO Engineering CO., Ltd |
SAMJIN SOLAR ENERGY and others |
Hana Bank and others |
KRW | 22,440 | 22,440 | KRW | 11,487 | 11,487 | ||||||||||||||||||||
POSCO AUSTRALIA PTY LTD |
Department of Trade and Investment (NSW Government) |
Woori Bank | AUD | 8,023,765 | 6,717 | AUD | 8,023,765 | 6,717 | ||||||||||||||||||||
PERPETUAL TRUSTEE COMPANY LIMITED CBA |
AUD | 253,571 | 212 | AUD | 253,571 | 212 | ||||||||||||||||||||||
POSCO(Suzhou) Automotive Processing Center Co., Ltd. |
POS INFRA AUTO | Korea Development Bank | USD | 405,000 | 444 | USD | 405,000 | 444 | ||||||||||||||||||||
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USD | 4,959,302,764 | 5,436,889 | USD | 4,349,272,486 | 4,768,108 | |||||||||||||||||||||||
KRW | 2,930,830 | 2,930,830 | KRW | 2,239,883 | 2,239,883 | |||||||||||||||||||||||
CNY | 1,164,955,000 | 191,017 | CNY | 1,164,955,000 | 191,017 | |||||||||||||||||||||||
THB | 5,501,000,000 | 173,997 | THB | 5,501,000,000 | 173,997 | |||||||||||||||||||||||
JPY | 669,400,000 | 7,254 | JPY | 669,400,000 | 7,254 | |||||||||||||||||||||||
AUD | 8,277,336 | 6,929 | AUD | 8,277,336 | 6,929 | |||||||||||||||||||||||
BRL | 464,060,000 | 156,124 | BRL | 348,349,782 | 117,195 | |||||||||||||||||||||||
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(b) | POSCO ENGINEERING & CONSTRUCTION., LTD. has provided completion guarantees for Samsung C&T Corporation amounting to |
63
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(c) | Other commitments |
Details of other commitments of the Company as of September 30, 2016, are as follows:
Company | Description | |
POSCO | POSCO entered into long-term contracts to purchase iron ore, coal, nickel and others. The contracts of iron ore and coal generally have terms of more than three years and the contracts of nickel have terms of more than one year. These contracts provide for periodic price adjustments based on the market price. As of September 30, 2016, 144 million tons of iron ore and 23 million tons of coal remained to be purchased under such long-term contracts. | |
POSCO entered into an agreement with Tangguh Liquefied Natural Gas (LNG) Consortium in Indonesia to purchase 550 thousand tons of LNG annually for 20 years commencing in August 2005. The purchase price is subject to change, based on changes of the monthly standard oil price (JCC) and with a price ceiling. | ||
As of September 30, 2016, POSCO entered into commitments with Korea National Oil Corporation for long-term foreign currency borrowings, which are limited up to the amount of USD 6.49 million. The borrowings are related to the exploration of gas hydrates in Western Fergana-Chenavard. The repayment of the borrowings depends on the success of the projects. POSCO is not liable for the repayment of full or part of the money borrowed if the respective projects fail. POSCO has agreed to pay a certain portion of its profits under certain conditions, as defined by the borrowing agreements. As of September 30, 2016, the ending balance of the borrowings amount to USD 4.09 million. | ||
POSCO has provided a supplemental funding agreement to POSCO ENERGY CO., LTD., as the largest shareholder, at the request of the creditors including Norddeutsche Landesbank, to guarantee successful funding for construction of new power plant. | ||
POSCO ENGINEERING & CONSTRUCTION., LTD. |
As of September 30, 2016, POSCO ENGINEERING & CONSTRUCTION., LTD. has comprehensive loan agreements of up to | |
POSCO ICT | As of September 30, 2016, in relation to contract enforcement, POSCO ICT was provided with |
64
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(d) | Litigation in progress |
The Company is involved in 251 lawsuits and claims for alleged damages
aggregating to 695.7 billion as defendant as of September 30, 2016, which arise from the ordinary course of business. The Company has recognized provisions amounting to W33.2
billion for 11 lawsuits based on its reliable estimate of outflow of resources. However, the Company has not recognized any provisions for other 240 lawsuits and claims since the Company believes that it does not have a present obligation as of
September 30, 2016. W
(e) | Other contingencies |
Company | Description | |
POSCO | POSCO has provided two blank checks to Korea Resources Corporation as collateral for long-term domestic borrowings, and has provided three blank promissory notes and three blank checks to Korea National Oil Corporation as collateral for long-term foreign currency borrowings. | |
POSCO DAEWOO Corporation (formerly, Daewoo International Corporation) |
As of September 30, 2016, POSCO DAEWOO Corporation has provided thirty-five blank promissory notes and sixteen blank checks to Korea National Oil Corporation as collateral for the guarantee on performance for contracts and others. | |
POSCO ENGINEERING & CONSTRUCTION., LTD. |
As of September 30, 2016, POSCO ENGINEERING & CONSTRUCTION., LTD. has provided thirty-six blank checks and eight blank promissory notes as collateral for agreements and outstanding loans. | |
POSCO ICT | As of September 30, 2016, POSCO ICT has provided two blank promissory notes and sixteen blank checks to financial institutions as collateral for the guarantee on performance for contracts and others. |
35. Cash Flows from Operating Activities
Adjustments for operating cash flows for the nine-month periods ended September 30, 2016 and 2015 were as follows:
(in millions of Won) | September 30, 2016 | September 30, 2015 | ||||||
Trade accounts and notes receivable |
1,520,615 | |||||||
Other receivables |
68,515 | 383,007 | ||||||
Inventories |
155,321 | 1,358,663 | ||||||
Other current assets |
(140,834 | ) | (30,652 | ) | ||||
Other non-current assets |
49,102 | (57,276 | ) | |||||
Trade accounts and notes payable |
(64,468 | ) | (881,205 | ) | ||||
Other payables |
25,817 | (274,247 | ) | |||||
Other current liabilities |
96,672 | 244,979 | ||||||
Provisions |
(71,709 | ) | (95,372 | ) | ||||
Payment of severance benefits |
(131,126 | ) | (131,489 | ) | ||||
Plan assets |
(19,817 | ) | 6,044 | |||||
Other non-current liabilities |
(8,896 | ) | (81,118 | ) | ||||
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65
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
36. Operating Segments
The Companys operating businesses are organized based on the nature of markets and customers. The Company has four reportable operating segments - steel, trading, construction and others. The steel segment includes production of steel products and revenue of such products. The trading segment consists of exporting and importing a wide range of steel products and raw materials that are both obtained from and supplied to POSCO, as well as between other suppliers and purchasers in Korea and overseas. The construction segment includes planning, designing and construction of industrial plants, civil engineering projects and commercial and residential buildings, both in Korea and overseas. Other segment includes power generation, liquefied natural gas production, network and system integration and logistics. The policies of classification and measurement on operating segments were the same as those that applied to the consolidated financial statements as of and for the year ended December 31, 2015.
Segment assets, liabilities and profit (loss) are measured based on separate financial statements in accordance with Korean International Financial Reporting Standard (K-IFRS) of the subsidiaries that organize reportable operating segments.
(a) | Information about reportable segments for the nine-month periods ended September 30, 2016 and 2015 were as follows: |
1) | For the nine-month period ended September 30, 2016 |
(in millions of Won) | Steel | Trading | Construction | Others | Total | |||||||||||||||
External revenues |
11,835,006 | 4,846,786 | 1,836,457 | 38,066,142 | ||||||||||||||||
Internal revenues |
11,839,844 | 6,787,444 | 631,367 | 1,737,818 | 20,996,473 | |||||||||||||||
Inter segment revenue |
6,677,921 | 3,780,595 | 505,251 | 1,669,174 | 12,632,941 | |||||||||||||||
Total revenues |
31,387,737 | 18,622,450 | 5,478,153 | 3,574,275 | 59,062,615 | |||||||||||||||
Segment profits (loss) |
1,146,896 | 122,818 | (382,656 | ) | 31,846 | 918,904 |
2) | For the nine-month period ended September 30, 2015 |
(in millions of Won) | Steel | Trading | Construction | Others | Total | |||||||||||||||
External revenues |
14,080,237 | 6,234,409 | 2,294,345 | 44,286,395 | ||||||||||||||||
Internal revenues |
12,768,532 | 6,534,252 | 1,069,493 | 2,049,713 | 22,421,990 | |||||||||||||||
Inter segment revenue |
6,977,831 | 3,371,581 | 876,647 | 1,978,672 | 13,204,731 | |||||||||||||||
Total revenues |
34,445,936 | 20,614,489 | 7,303,902 | 4,344,058 | 66,708,385 | |||||||||||||||
Segment profits (loss) |
91,586 | 163,785 | (287,923 | ) | (11,295 | ) | (43,847 | ) |
66
POSCO and Subsidiaries
Notes to the Condensed Consolidated Interim Financial Statements, Continued
As of September 30, 2016
(Unaudited)
(b) | Reconciliations of total segment profit or loss, to their respective consolidated financial statement line items for the nine-month periods ended September 30, 2016 and 2015 were as follows: |
(in millions of Won) | September 30, 2016 | September 30, 2015 | ||||||
Total profit (loss) for reportable segments |
(43,847 | ) | ||||||
Corporate fair value adjustments |
(102,052 | ) | (72,749 | ) | ||||
Elimination of inter-segment profits |
217,590 | (89,049 | ) | |||||
Income tax expense |
442,249 | 337,593 | ||||||
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Profit before income tax expense |
131,948 | |||||||
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