POSCO
Condensed Separate Interim Financial Statements
(Unaudited)
September 30, 2015
(With Independent Auditors’ Review Report Thereon)
Table of Contents
Page
Independent Auditors’ Review Report ................................................................................................ 1
Condensed Separate Interim Financial Statements
Condensed Separate Interim Statements of Financial Position............................................................... 3
Condensed Separate Interim Statements of Comprehensive Income...................................................... 5
Condensed Separate Interim Statements of Changes in Equity .............................................................. 6
Condensed Separate Interim Statements of Cash Flows ......................................................................... 7
Notes to the Condensed Separate 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, 2015, the condensed separate interim statements of comprehensive income for the
three-month and nine-month periods ended September 30, 2015, and 2014, the condensed separate
interim statements of changes in equity and cash flows for the nine-month periods ended September
30, 2015 and 2014, and notes, comprising a summary of significant accounting policies and other
explanatory information.
Management’s 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 Company’s 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.
Auditor’s 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 matters
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, 2014, 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, 2015, expressed an unqualified
opinion. The accompanying condensed separate statement of financial position of the Company as
of December 31, 2014, 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 13, 2015
This report is effective as of November 13, 2015, 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
POSCO
Condensed Separate Interim Statements of Financial Position
As of September 30, 2015 and December 31, 2014
(Unaudited)
(in millions of Won)
September 30,
2015
December 31,
2014
1,800,558
2,869,609
226,418
2,959,960
3,726,927
531,051
52,902
1,742,767
3,157,266
562,930
693,729
4,383,568
1,051,177
31,692
12,167,425
11,623,129
21,003
106,634
1,589,603
23,841
26,360
1,794,590
10
15,745,286
16,178,891
11
12
13
9
87,231
21,544,147
487,228
194,435
90,137
22,323,215
403,907
133,253
39,775,567
40,974,194
51,942,992
52,597,323
Notes
Assets
Cash and cash equivalents
Trade accounts and notes receivable, net
Other receivables, net
Other short-term financial assets
Inventories
Assets held for sale
Other current assets
20
W
4,14,20,31
5,20,31
6,14,20
7,28
8
9
Total current assets
Long-term trade accounts and notes receivable, net
Other receivables, net
Other long-term financial assets
Investments in subsidiaries, associates
and joint ventures
Investment property, net
Property, plant and equipment, net
Intangible assets, net
Other long-term assets
4,20
5,20
6,20
Total non-current assets
Total assets
W
See accompanying notes to the condensed separate interim financial statements.
3
POSCO
Condensed Separate Interim Statements of Financial Position, Continued
As of September 30, 2015 and December 31, 2014
(Unaudited)
September 30,
2015
December 31,
2014
671,774
777,401
2,405,081
1,236,290
836,381
34,454
236,530
20,949
58,483
1,032,496
9,236
304,362
47,759
108,508
4,263,652
3,516,052
3,674,337
5,300,927
34,502
85,816
157,427
997,996
24,435
16,802
88,807
50,574
86,158
1,047,666
31,474
234
Total non-current liabilities
4,991,315
6,605,840
Total liabilities
9,254,967
10,121,892
482,403
1,247,627
996,919
(43,300)
(1,534,320)
41,538,696
482,403
1,247,616
996,919
94,042
(1,534,457)
41,188,908
42,688,025
42,475,431
51,942,992
52,597,323
(in millions of Won)
Notes
Liabilities
Trade accounts and notes payable
Short-term borrow ings
and current installments of long-term borrow ings
Other payables
Other short-term financial liabilities
Current income tax liabilities
Provisions
Other current liabilities
20,31
W
4,14,20
15,20,31
16,20
17
19
Total current liabilities
Long-term borrow ings,
excluding current installments
Other payables
Other long-term financial liabilities
Defined benefit liabilities, net
Deferred tax liabilities
Long-term provisions
Other long-term liabilities
6,14,20
15,20
16,20
18
17,32
19
Shareholders' Equity
Share capital
Capital surplus
Hybrid bonds
Reserves
Treasury shares
Retained earnings
21
21
22
23
24
Total shareholder's equity
Total liabilities and shareholders' equity
W
See accompanying notes to the condensed separate interim financial statements.
4
POSCO
Condensed Separate Interim Statements of Comprehensive Income
For the three-month and nine-month periods ended September 30, 2015 and 2014
(Unaudited)
(in millions of Won,
except per share information)
For the three-month periods
ended September 30
2015
2014
Notes
Revenue
Cost of sales
Gross profit
Selling and administrative expenses
Administrative expenses
Selling expenses
31
7,28,31
W
22,073,769
(18,964,939)
1,118,921
1,113,172
3,262,762
3,108,830
637,860
634,968
130,888
(346,426)
107,189
(302,835)
597,116
(659,665)
702,658
(610,981)
28
364,972
(477,033)
7,411
(137,282)
438,109
(870,408)
18,725
(527,589)
29
310,261
35,950
309,451
(87,876)
1,372,227
(315,805)
1,300,838
(420,508)
346,211
221,575
1,056,422
880,330
Other non-operating income and expenses
Other non-operating income
Other non-operating expenses
27,31
18
(13,681)
6,20,23
Total comprehensive income
Basic and diluted earnings per share (in Won)
19,661,927
(16,399,165)
(230,177)
(248,027)
20,26
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
7,290,135
(6,176,963)
(218,689)
(262,372)
Finance income and costs
Finance income
Finance costs
Profit
Other comprehensive loss
Items that w ill not be reclassified
subsequently to profit or loss :
Remeasurements of defined benefit plans, net of tax
6,298,801
(5,179,880)
25,28,31
Operating profit
Profit before income tax
Tax benefit (expense)
For the nine-month periods
ended September 30
2015
2014
30
(654,469)
(741,218)
1,867,075
(679,972)
(710,833)
1,718,025
(41,674)
(34,104)
(70,842)
(165,721)
(50,477)
(137,342)
(362,569)
W
166,809
129,424
884,976
446,919
W
4,224
2,673
12,898
10,724
See accompanying notes to the condensed separate interim financial statements.
5
POSCO
Condensed Separate Interim Statements of Changes in Equity
For the nine-month periods ended September 30, 2015 and 2014
(Unaudited)
Share
capital
(in millions of Won)
Balance as of January 1, 2014
Comprehensive income :
Profit
Other comprehensive loss
Remeasurements of defined benefit
plans, net of tax
Net changes in unrealized fair value of
available-for-sale investments, net of tax
Transactions with owners of the Company,
recognized directly in equity :
Year-end dividends
Interim dividends
Interest of hybrid bonds
Disposal of treasury shares
Balance as of September 30, 2014
W
Balance as of January 1, 2015
Comprehensive income :
Profit
Other comprehensive loss
Remeasurements of defined benefit
plans, net of tax
Net changes in unrealized fair value of
available-for-sale investments, net of tax
Transactions with owners of the Company,
recognized directly in equity :
Year-end dividends
Interim dividends
Interest of hybrid bonds
Disposal of treasury shares
Balance as of September 30, 2015
Capital
surplus
Hybrid
bonds
Treasury
shares
Reserves
Retained
earnings
Total
482,403
1,233,040
996,919
403,939
(1,579,124)
40,774,285
42,311,462
-
-
-
-
-
880,330
880,330
-
-
-
-
-
(70,842)
(70,842)
-
-
-
(362,569)
-
-
(362,569)
W
482,403
50
1,233,090
996,919
41,370
138
(1,578,986)
(478,702)
(159,568)
(32,586)
40,912,917
(478,702)
(159,568)
(32,586)
188
42,087,713
W
482,403
1,247,616
996,919
94,042
(1,534,457)
41,188,908
42,475,431
-
-
-
-
-
1,056,422
1,056,422
-
-
-
-
-
(34,104)
(34,104)
-
-
-
(137,342)
-
-
(137,342)
482,403
11
1,247,627
996,919
(43,300)
137
(1,534,320)
(479,958)
(159,987)
(32,585)
41,538,696
(479,958)
(159,987)
(32,585)
148
42,688,025
W
See accompanying notes to the condensed separate interim financial statements.
6
POSCO
Condensed Separate Interim Statements of Cash Flows
For the nine-month periods ended September 30, 2015 and 2014
(Unaudited)
(in millions of Won)
Notes
Cash flows from operating activities
Profit
Adjustments for :
Costs for defined benefit plans
Depreciation
Amortization
Finance income
Finance costs
Loss on valuation of inventories
Gain on disposal of property, plant and equipment
Loss on disposal of property, plant and equipment
Impairment loss on property, plant and equipment
Impairment loss on investments
in subsidiaries, associates and joint ventures
Gain on disposal of assets held for sale
Loss on disposal of assets held for sale
Impairment loss on assets held for sale
Provision expense
Income tax expense
Others
September 30,
2015
September 30,
2014
1,056,422
880,330
90,511
1,539,392
52,025
(440,569)
528,686
12,990
(8,543)
57,201
68,720
86,368
1,532,130
56,033
(503,190)
429,511
19,840
(3,295)
38,140
30,334
260,833
140,106
(409,173)
20,133
95,737
2,045
315,805
3,115
14
92,906
420,508
38,937
792,428
48,919
59,051
(190,078)
493,850
(450,975)
67,201
(240,903)
136,338
(281,102)
W
Changes in operating assets and liabilities
33
Interest received
Interest paid
Dividends received
Income taxes paid
Net cash provided by operating activities
W
See accompanying notes to the condensed separate interim financial statements.
7
3,949,606
2,989,125
POSCO
Condensed Separate Interim Statements of Cash Flows, Continued
For the nine-month periods ended September 30, 2015 and 2014
(Unaudited)
(in millions of Won)
Notes
Cash flows from investing activities
Proceeds from disposal of short-term financial instruments
Proceeds from disposal of long-term financial instruments
Proceeds from disposal of available-for-sale investments
Decrease in short-term loans
Decrease in long-term loans
Proceeds from disposal of investments
in subsidiaries, associates and joint ventures
Proceeds from disposal of intangible assets
Proceeds from disposal of assets held for sale
Acquisition of short-term financial investments
Increase in short-term loans
Acquisition of available-for-sale investments
Increase in long-term loans
Acquisition of investment in subsidiaries,
associates and joint ventures
Acquisition of investment property
Acquisition of property, plant and equipment
Payment for disposal of property, plant and equipment
Acquisition of intangible assets
September 30,
2015
September 30,
2014
6,375,826
2
2,231
69,443
495
3,389,409
957
4,478
3,613
-
W
Net cash used in investing activities
Cash flows from financing activities
Proceeds from borrow ings
Increase in long-term financial liabilities
Repayment of borrow ings
Decrease in long-term financial liabilities
Payment of cash dividends
Payment of interest of hybrid bonds
Net cash used in financing activities
Effect of exchange rate changes on cash held
Net increase in cash and cash equivalents
Cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
W
See accompanying notes to the condensed separate interim financial statements.
8
3,147
1,275,597
(8,642,765)
(65,208)
(1,152)
(139)
1,627
1,291
(1,976,508)
(25,779)
(14,476)
(390,817)
(812,797)
(146)
(1,090,685)
(15,977)
(28,941)
(1,185,854)
(12,284)
(25,836)
(2,505,476)
(655,772)
21,067
3,086
(736,697)
(3,486)
(639,998)
(32,730)
1,402,395
1,544
(2,841,675)
(2,219)
(638,363)
(32,730)
(1,388,758)
(2,111,048)
2,419
-
57,791
222,305
1,742,767
1,394,315
1,800,558
1,616,620
POSCO
Notes to the Condensed Separate Interim Financial Statements
As of September 30, 2015
(Unaudited)
1. Reporting Entity
POSCO (the “Company”) is the largest steel producer in Korea which was incorporated on April 1,
1968, under the Commercial Code of the Republic of Korea 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 of its five overseas liaison offices.
As of September 30, 2015, the shares of the Company are listed on the Korea Exchange, while its
depository receipts are listed on the New York, Tokyo and London 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 Company’s 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, 2014. 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.
In preparing these condensed separate interim financial statements, the significant judgments made
by management in applying the Company’s 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
9
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
the year ended December 31, 2014.
(b) Measurement of fair value
The company’s 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 liability, either directly or indirectly.
 Level 3 – inputs for the assets or liability 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, 2015
(Unaudited)
3. Summary of Significant Accounting Policies
Except as described in K-IFRS No. 1034 “Interim Financial Reporting” and below, 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, 2014. The accounting policy for emission rights below is also expected to be applied
in the Company’s separate financial statements as of and for the year ending December 31, 2015.
Emission Rights
The Company accounts for greenhouse gases emission right and the relevant liability as below
pursuant to the Act on Allocation and Trading of Greenhouse Gas Emission which became effective
in Korea in 2015.
(a) Greenhouse Gases Emission Right
Greenhouse Gases Emission Right consists of emission allowances which are allocated from the
government free of charge or purchased from the market. The cost includes any directly
attributable costs incurred during the normal course of business.
Emission rights held for the purpose of performing the obligation are classified as intangible asset
and are initially measured at cost and subsequent to initial recognition, are carried at cost less
accumulated impairment losses. Emission rights held for short-swing profits are classified as
current asset and are measured at fair value with any changes in fair value recognized as profit or
loss in the respective reporting period.
The Company derecognizes an emission right asset when the emission allowance is unusable,
disposed or submitted to government in which the future economic benefits are no longer expected
to be probable.
(b) Emission liability
Emission liability is a present obligation of submitting emission rights to the government with
regard to emission of greenhouse gas. Emission liability is recognized when there is a high
possibility of outflows of resources in performing the obligation and the costs required to perform
the obligation are reliably estimable. Emission liability is an amount of estimated obligation for
emission rights to be submitted to the government for the performing period. The emission
liability is measured based on the expected quantity of emission for the performing period in
excess of emission allowance in possession, and the unit price for such emission rights in the
market as of the end of the reporting period.
4. Trade Accounts and Notes Receivable
11
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
Trade accounts and notes receivable as of September 30, 2015 and December 31, 2014 are as follows:
(in m illions of Won)
Current
Trade accounts and notes receivable
Less: Allow ance for doubtful accounts
September 30, 2015
W
W
Non-current
Trade accounts and notes receivable
Less: Present value discount
Less: Allow ance for doubtful accounts
W
W
December 31, 2014
2,879,943
(10,334)
2,869,609
3,166,238
(8,972)
3,157,266
31,129
(8,106)
(2,020)
21,003
32,247
(7,396)
(1,010)
23,841
Trade accounts and notes receivable sold to financial institutions, for which the derecognition
conditions were not met, amounted to W790 million as of September 30, 2015 were included in shortterm borrowings (Note 14).
5. Other Receivables
Other receivables as of September 30, 2015 and December 31, 2014 are as follows:
(in millions of Won)
Current
Short-term loans
Other accounts receivable
Others
Less: Allow ance for doubtful accounts
September 30, 2015
W
W
Non-current
Long-term loans
Long-term other accounts receivable
Others
W
W
December 31, 2014
18
226,659
10,297
(10,556)
226,418
4,748
564,765
3,950
(10,533)
562,930
24,172
79,468
2,994
106,634
21,229
2,334
2,797
26,360
6. Other Financial Assets
(a) Other financial assets as of September 30, 2015 and December 31, 2014 are as follows:
12
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(in millions of Won)
Current
Short term derivatives assets held for trading
Short-term financial instruments(* 1,2)
Cash deposits(* 3,4)
September 30, 2015
December 31, 2014
W
2,955,132
4,828
2,959,960
708
609,584
83,437
693,729
Non-current
Long-term derivatives assets held for trading(* 5) W
Available-for-sale securities (equity instruments)
Available-for-sale securities (others)
Cash deposits(* 6)
W
61,850
1,509,784
17,936
33
1,589,603
9,525
1,767,621
17,408
36
1,794,590
W
(*1) Short-term financial instruments amounting to W1,384 million are levied in relation to
pending litigations as of September 30, 2015 and December 31, 2014.
(*2) Short-term financial instruments amounting to W5,200 million are provided as collateral in
relation to long-term borrowings from National Forestry Cooperative Federation as of
December 31, 2014.
(*3) Deposits amounting to W4,828 million and W5,465 million as of September 30, 2015 and
December 31, 2014, respectively, are restricted in relation to government assigned project.
(*4) As of December 31, 2014, W77,972 million of deposits are provided as collateral for disposal
of investments in subsidiaries.
(*5) The Company assessed the values of its put option and earn-out consideration in relation to
the residual equity upon the Company’s disposal of SeAH Changwon Integrated Special
Steel (formerly, POSCO Specialty Steel Co., Ltd.). Accordingly, the Company has
recognized derivatives assets amounting to W47,404 million and W2,088 million,
respectively, as of September 30, 2015.
(*6) The Company is required to provide deposits to maintain checking accounts and accordingly
the withdrawal of these deposits is restricted.
(b) Available-for-sale equity securities as of September 30, 2015 and December 31, 2014 are as
follows:
13
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(in m illion s of Won )
Decem ber 31,
2014
Septem ber 30, 2015
Num ber of
shares
Ownership
(%)
Acquisition
cost
Net changes in fair
value of availablefor-sale investm ents
Fair
value
Accum ulated
im pairm ent loss
Book
value
Book
value
Marketable equity securities
Hana Financial group Inc.
Nippon Steel & Sum itom o Metal
Corporation
Hyundai Heavy Industries Co., Ltd.(* 1)
Shinhan Financial group Inc.
KB Financial group Inc.
Seoul Sem iconductor Co., Ltd.(* 1)
SAMWONSTEEL Co., Ltd.
Others (10 com panies)(* 1)
2,43 0,49 8
0.8 4
15 ,6 3 3
6 4,16 5
48 ,5 3 2
-
6 4,16 5
77,776
23 8 ,3 5 2,000
2.5 1
W
719 ,6 22
5 15 ,207
(204,415 )
-
5 15 ,207
6 5 9 ,9 26
-
16 9 ,8 5 5
1,477,000
1.9 4
3 43 ,5 06
142,5 3 1
(200,9 75 )
142,5 3 1
4,3 6 9 ,8 8 1
0.9 2
228 ,778
18 0,9 13
5 8 ,277
(106 ,142)
18 0,9 13
19 4,241
11,5 9 0,5 5 0
3 .00
5 3 6 ,5 16
408 ,5 6 7
12,170
(140,119 )
408 ,5 6 7
418 ,9 9 8
5 9 1,000
1.01
24,9 9 9
8 ,3 9 2
11,9 3 8
5 ,700,000
14.25
8 ,3 9 2
-
(16 ,6 07)
8 ,9 3 0
19 ,9 22
17,3 9 5
(6 ,403 )
19 ,9 22
9 2,110
6 2,25 6
10,5 27
(40,3 8 1)
6 2,25 6
6 4,143
1,9 70,09 4
1,401,9 5 3
(5 7,5 14)
(5 10,6 27)
1,401,9 5 3
1,6 20,3 9 0
23 ,5 13
Non-m arketable equity securities
Dongbu Metal Co., Ltd.(* 1,3)
Poongsan Special Metal Corp.(* 4)
Intellectual Discovery(* 4)
Tuwaurqi Steel Mill(* 2)
Others (37 com panies)(* 2,4)
3 ,000,000
10.00
9 8 ,242
-
(9 8 ,242)
3 15 ,79 0
5 .00
7,6 5 7
7,6 5 7
-
-
7,6 5 7
1,000,000
14.27
5 ,000
5 ,000
-
-
5 ,000
129 ,6 00,000
16 .18
17,015
-
(17,015 )
110,273
W
-
9 5 ,174
23 8 ,18 7
107,8 3 1
2,208 ,28 1
1,5 09 ,78 4
-
7,6 5 7
5 ,000
-
17,015
25 0
(15 ,3 49 )
25 0
(13 0,6 06 )
107,8 3 1
147,23 1
(6 41,23 3 )
1,5 09 ,78 4
1,76 7,6 21
(5 7,26 4)
9 5 ,174
17,29 5
100,26 4
(*1) During the nine-month period ended September 30, 2015, the Company recognized an
additional impairment loss of W27,324 million, W3,546 million, W2,859 million, W628
million and W17,295 million on securities of Hyundai Heavy Industries Co., Ltd., Seoul
Semiconductor Co., Ltd., PT. Krakatau Steel, Steel Flower Co., Ltd. and Dongbu Metal Co.,
Ltd, respectively, due to the continued prolonged decline in the fair value of the shares.
(*2) During the nine-month period ended September 30, 2015, the Company recognized W17,015
million and W6,554 million of impairment loss on securities of Tuwaurqi Steel Mill and
Troika Foreign Resource Development Fund, respectively, due to the significant decline in
the fair value of the shares.
(*3) Fair value is based on an analysis performed by an external professional evaluation agency.
(*4) These non-marketable equity securities are recorded at cost since its fair value cannot be
reliably measured.
14
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
7. Inventories
Inventories as of September 30, 2015 and December 31, 2014 are as follows:
(in m illions of Won)
Finished goods
Semi-finished goods
By-products
Raw materials
Fuel and materials
M aterials-in-transit
Others
September 30, 2015
W
December 31, 2014
842,796
1,001,436
10,576
772,537
535,866
576,157
549
3,739,917
(12,990)
3,726,927
Less: Allow ance for inventories valuation
W
901,524
1,207,143
21,439
822,273
510,508
944,966
582
4,408,435
(24,867)
4,383,568
The amount of losses on valuation of inventories recognized within cost of sales during the ninemonth period ended September 30, 2015 and the year ended December 31, 2014 were W12,990
million and W24,867 million, respectively.
8. Assets Held for Sale
Assets held for sale as of September 30, 2015 and December 31, 2014 are as follows:
(in millions of Won)
Available-for-sale securities(* 1)
Investments in subsidiaries(* 2,3,4,5,6)
Property, plant and equipment(* 7)
W
W
September 30, 2015
December 31, 2014
484,325
20,803
25,923
531,051
580,062
468,443
2,672
1,051,177
(*1) During the year ended December 31, 2014, the company determined to dispose of its equity
interests in Nacional Minerios S.A. in exchange for equity interests in the new entity as
Nacional Minerios S.A. (which was an available-for-sale investment of the Company)
entered into a merger agreement with another entity through share exchange. The merger
transaction was approved by the Company’s Board of Directors on December 12, 2014.
Accordingly, the Company classified its investment in Nacional Minerios S.A. as assets held
for sale. The Company recognized W95,737 million of impairment loss on assets held for
sale since fair value less costs to sell of Nacional Minerios S.A have decreased during the
nine-month period ended September 30, 2015.
(*2) The Company determined to dispose of 52.2% of its shares of SeAH Changwon Integrated
Special Steel (formerly, POSCO Specialty Steel Co., Ltd.) to SeAH Besteel Corp. and
classified the investment in subsidiaries of W454,943 million as assets held for sale during
15
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
the year ended December 31, 2014. Disposal of the asset held for sale was completed
during the nine-month period ended September 30, 2015 and the Company has recognized
W20,133 million of loss on disposal of the asset held for sale.
(*3) The Company determined to dispose of 29.4% of its shares of POSCO ENGINEERING &
CONSTRUCTION., LTD., a subsidiary of the Company, to special purpose company
established by PIF, Saudi Arabia National Fund and classified the investment in subsidiaries
of W496,402 million as assets held for sale. Disposal of the asset held for sale was
completed during the nine-month period ended September 30, 2015 and the Company has
recognized W346,221 million of gain on disposal of the asset held for sale.
(*4) The Company determined to dispose of the its shares of POSFINE Co., Ltd., a subsidiary of
the Company, to Hahn & Company PRIVATE EQUITY FUND No.1, and classified the
investment in subsidiaries of W13,500 million as assets held for sale during the year ended
December 31, 2014. Disposal of the assets held for sale was completed during the ninemonth period ended September 30, 2015 and the Company recognized W33,577 million of
gain on disposal of assets held for sale.
(*5) The Company determined to dispose of the its shares of Poreka Co., Ltd., a subsidiary of the
Company, to COMM.TOGETHER Co., LTD. and classified the accompanying investment in
the subsidiary amounting to W1,000 million as assets held for sale. Disposal of the asset
held for sale was completed during the nine-month period ended September 30, 2015 and the
Company has recognized W1,798 million of gain on disposal of the asset held for sale.
(*6) The Company determined to liquidate POSCO-Uruguay S.A, a subsidiary of the Company,
during the nine-month period ended September 30, 2015 and classified the investment in
subsidiaries of W20,803 million as assets held for sale.
(*7) The Company determined to make the investment in kind of 1 FINEX facilities according to
incorporating joint venture, and has signed in MOA with Mideast Integrated Steel Ltd. in
India. The Company has classified the related facilities of W25,892 million as assets held
for sale.
16
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
9. Other Assets
Other current assets and other long-term assets as of September 30, 2015 and December 31, 2014 are
as follows:
(in millions of Won)
Current
Advance payments
Prepaid expenses
Others
W
W
Non-current
Long-term prepaid expenses
Others(* 1)
W
W
September 30, 2015
December 31, 2014
9,584
42,868
450
52,902
9,828
21,864
31,692
6,317
188,118
194,435
6,344
126,909
133,253
(*1) As of September 30, 2015 and December 31, 2014, the Company recognized assets
amounting to W184,328 million and W123,110 million, respectively, in connection with the
additional income tax payment for prior years as a result of tax audits that were finalized in
2014 based on the Company’s best estimate of the tax amounts to be paid when the results of
the Company’s request for appeal and claim for rectification are finalized.
17
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
10. Investments in Subsidiaries, Associates and Joint ventures
(a) Details of subsidiaries and carrying values as of September 30, 2015 and December 31, 2014 are
as follows:
(in millions of Won)
Country
[Domestic]
Daew oo International Corporation
POSCO ENGINEERING &
CONSTRUCTION., LTD.
POSCO Green Gas Technology
POSCO ENERGY CO., LTD.
POSCO Processing&Service
Principal operations
September 30, 2015
Ownership
Book
(%)
value
Korea
Trading
60.31
3,371,481
3,371,481
Korea
Engineering and construction
60.11
1,014,314
1,510,716
Korea
Korea
Korea
Gas production and sales
Generation of electricity
Steel sales and service
Other structural metal
product manufacturing
100.00
89.02
96.01
682,600
658,176
624,678
682,600
658,176
624,678
-
-
341,293
-
-
173,899
56.87
108,421
108,421
95.00
103,780
103,780
60.00
57.30
100,535
73,374
100,535
72,804
65.38
70,990
70,990
48.85
53,651
66,067
69.90
45,273
40,000
70.00
30,148
30,148
162,944
7,100,365
134,196
8,089,784
POSCO PLANTEC Co., Ltd.(* 1)
Korea
SeAH Changw on Integrated Special Steel
(formerly, POSCO Specialty Steel Co.,
Ltd.)(* 2)
Korea
Manufacture and
sale of specialty steel
POSCO COATED & COLOR
STEEL Co., Ltd.
Korea
Coated steel manufacturing
POSCO Capital Co., Ltd.
Korea
POSCO CHEMTECH
POSMATE
Korea
Korea
POSCO ICT
Korea
POSCO M-TECH(* 3,4)
Korea
POSCO Family Strategy Fund
Korea
Busan E&E Co,. Ltd.(* 5)
Korea
Investment in
venture companies
Refractory manufacturing and sales
Business facility maintenance
Computer hardw are
and softw are distribution
Steel manufacturing and sales
Investment in
venture companies
Municipal solid w aste fuel
and pow er generation
Others (11 companies)
18
W
December 31,2014
Book
value
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
[Foreign]
PT. KRAKATAU POSCO
POSCO WA PTY LTD
POSCO Maharashtra
Steel Private Limited
POSCO AUSTRALIA PTY LTD
Zhangjiagang Pohang
Stainless Steel Co., Ltd.
POSCO Thainox
Public Company Limited(* 4)
POSCO SS-VINA
POSCO-China Holding Corp.
POSCO-India Private Limited
POSCO MEXICO S.A. DE C.V.
POSCO America Corporation
POSCO-VIETNAM Co., Ltd.
POSCO VST CO., LTD.
POSCO(Guangdong) Automotive
Steel Co., Ltd.
POSCO COATED STEEL
(THAILAND) CO., LTD.
POSCO ASSAN TST
STEEL INDUSTRY
POSCO Investment Co., Ltd.
POSCO JAPAN Co., Ltd.
Qingdao Pohang
Stainless Steel Co., Ltd.
POSCO(Suzhou) Automotive
Processing Center Co., Ltd.
POSCO Electrical Steel
India Private Limited
POSCO AFRICA
(PROPRIETARY) LIMITED
POSCO-Malaysia SDN. BHD.
POSCO China Dalian
Plate Processing Center Co., Ltd.
POSCO Asia Co., Ltd.
POSCO(Guangdong) Steel Co., Ltd.
POSCO-Uruguay S.A(* 6)
Indonesia
Australia
Steel manufacturing and sales
Mine development
70.00
100.00
813,431
620,284
855,110
611,248
India
Steel manufacturing and sales
Raw material sales
100.00
488,879
465,788
100.00
330,623
China
Stainless steel manufacturing
330,623
58.60
283,845
284,392
Thailand
Vietnam
China
India
Mexico
USA
Vietnam
Vietnam
Stainless steel manufacturing
84.93
277,468
329,756
Steel manufacturing and sales
Investment management
Steel manufacturing and sales
Plate steel manufacturing
Trading-steel
Steel manufacturing
Stainless steel manufacturing
100.00
100.00
99.99
84.84
99.45
100.00
95.65
241,426
240,430
184,815
180,069
167,285
160,572
144,573
240,430
184,815
182,110
167,285
156,778
145,049
China
Plate steel manufacturing
83.64
130,751
131,051
Thailand
Plate steel manufacturing
100.00
121,592
90,012
Turkey
Steel manufacturing and sales
60.00
92,800
95,213
Finance
Trading-steel
99.99
100.00
85,521
68,436
86,775
68,436
China
Stainless steel manufacturing
70.00
65,982
65,982
China
Steel manufacturing and sales
90.00
62,494
62,494
India
Electrical steel
manufacturing and sales
100.00
57,119
58,441
Trading
100.00
50,297
50,297
Steel manufacturing and sales
Heavy plate processing
and marketing
Steel transit trade
Plate steel sheet
manufacturing
Wood manufacturing
and sales
81.79
45,479
45,479
80.00
32,992
32,992
100.00
32,189
32,189
87.04
31,299
31,299
Australia
Hong Kong
Japan
South Africa
Malaysia
China
Hong Kong
China
Uruguay
98.11
Others (33 companies)
W
-
30,243
367,829
5,378,480
12,478,845
333,211
5,167,498
13,257,282
(*1) During the nine-month period ended September 30, 2015, there is objective evidence of
impairment due to the significant decline in the fair value of the accompanying share below its
cost. Recoverable amount was measured based on fair value less cost to sell, and the Company
recognized an impairment loss of W172,767 million as the carrying value was higher than its
recoverable amount. In September 2015, in order to improve its financial standing and
normalize operation, the associate reached a workout agreement with its Creditor Financial
Institutions Committee. As a result, the Company lost its control over POSCO PLANTEC Co.,
Ltd. and classified its shares as investment in associate as of September 30, 2015.
(*2) During the nine-month period ended September 30, 2015, the Company disposed of 52.2% of
shares of SeAH Changwon Integrated Special Steel Corp. (formerly, POSCO Specialty Steel
Co., Ltd.), which resulted in the Company’s loss of control, and the Company classified the
remaining investment as investment in an associate.
(*3) It was classified as an investment in a subsidiary as the Company has control over of more than
half of the voting rights by virtue of an agreement with Postech, which has 4.72% of ownership
19
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
in POSCO M-TECH.
(*4) As of September 30, 2015, there is objective evidence of impairment due to the prolonged
decline in the fair value of POSCO M-TECH and POSCO Thainox Public Company Limited
below their costs. Recoverable amount was determined based on fair value less cost to sell,
which was calculated by adding a 18% control premium and disposal cost to the stock price as
of September 30, 2015. As a result, the Company recognized an impairment loss of W12,416
million and W52,288 million, respectively, as carrying values were higher than their
recoverable amounts.
(*5) As of September 30, 2015, the investments in subsidiaries amounting to W30,148 million were
provided as collateral in relation to the loan agreements of Busan E&E Co,. Ltd.
(*6) The Company determined to liquidate POSCO-Uruguay S.A, a subsidiary of the Company,
during the nine-month period ended September 30, 2015. The Company recognized an
impairment loss of W9,441 million as the carrying value was higher than its recoverable
amount as of September 30, 2015 and classified the investment in subsidiaries as assets held for
sale.
20
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(b) Details of associates and carrying values as of September 30, 2015 and December 31, 2014 are as
follows:
(in millions of Won)
Country
[Domestic]
EQP POSCO Global 1st
Natural Resource Private Equity Fund
Principal operations
September 30, 2015
Ownership
Book
(%)
value
Korea
Mine investment
27.18
POSCO PLANTEC Co., Ltd.(* 1)
Korea
Other structural metal
product manufacturing
SeAH Changw on Integrated Special Steel
(formerly, POSCO Specialty Steel Co.,
Ltd.)(* 2,3,4)
Korea
SNNC
Korea
W
December 31, 2014
Book
value
169,106
169,106
60.84
168,526
-
Manufacture and
sale of specialty steel
19.94
159,978
-
STS material manufacturing
and sales
49.00
100,655
100,655
24,847
623,112
21,867
291,628
Others (5 companies)
[Foreign]
Nickel Mining Company SAS
7623704 Canada Inc.(* 2)
Zhongyue POSCO (Qinhuangdao)
Tinplate Industrial Co., Ltd
Others (6 companies)
New
Caledonia
Canada
China
Raw material manufacturing
and sales
49.00
189,197
189,197
Mine investment
10.40
124,341
124,341
Tinplate manufacturing
and sales
24.00
11,003
11,003
31,157
355,698
978,810
31,804
356,345
647,973
W
(*1) In September 2015, in order to improve its financial standing and normalize operation, the
associate reached a workout agreement with its Creditor Financial Institutions Committee. As a
result, the Company lost its control over POSCO PLANTEC Co., Ltd. and classified its shares as
investment in associate as of September 30, 2015.
(*2) As of September 30, 2015, it was classified as an associate in spite of its less than 20% of
ownership since it is determined to have significant influence over the investee when considering
its structure of the Board of Directors.
(*3) During the nine-month period ended September 30, 2015, POSCO Specialty Steel Co., Ltd.
changed its corporate name to SeAH Changwon Integrated Special Steel.
(*4) As of September 30, 2015, there is objective evidence of impairment including receipt of
dividend upon disposal contract of SeAH Changwon Integrated Special Steel. (formerly, POSCO
Specialty Steel Co., Ltd.), and, accordingly, the impairment test was performed. Recoverable
amount was determined based on value-in-use, which was calculated by applying 7.9% discount
rate and 1.0% growth rate. As a result, the Company recognized an impairment loss of
W13,921 million as the carrying value was higher than its recoverable amount as of September
30, 2015.
21
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(c) Details of joint ventures and carrying values as of September 30, 2015 and December 31, 2014 are
as follows:
(in millions of Won)
September 30, 2015
Country
Roy Hill Holdings Pty Ltd(* 1)
CSP - Compania
Siderurgica do Pecem
POSCO-NPS Niobium LLC
KOBRASCO
Others (4 companies)
Australia
Brazil
USA
Brazil
Ownership
(%)
Principal operations
Mine development
Steel manufacturing
and sales
Mine development
Facilities lease
10.00
December 31, 2014
Book
value
W
Book
value
1,225,464
1,225,464
20.00
488,592
469,891
50.00
50.00
364,609
98,962
110,004
2,287,631
364,609
98,962
114,710
2,273,636
W
(*1) As of September 30, 2015 and December 31, 2014, the entire investment in the joint venture is
provided as collateral in relation to loan from project financing of the joint venture.
11. Investment Property, Net
Changes in the carrying value of investment property for the nine-month period ended September 30,
2015 and the year ended December 31, 2014 were as follows:
1) For the nine-month period ended September 30, 2015
(in m illions of Won)
Beginning
Land
Buildings
Structures
W
Acquisitions
36,020
50,112
4,005
90,137
W
Depreciation(* 1)
146
146
Transfer(* 2)
(1,788)
(124)
(1,912)
Ending
(463)
(631)
(46)
(1,140)
35,557
47,839
3,835
87,231
(*1) The useful life and depreciation method of investment property are identical to those of
property, plant and equipment.
(*2) Mainly includes assets transferred to property, plant and equipment in relation to change in
rental ratio and the purpose of use.
2) For the year ended December 31, 2014
(in m illions of Won)
Beginning
Land
Buildings
Structures
W
W
Acquisitions
36,020
52,682
4,177
92,879
Disposals
41
41
(18)
(18)
Depreciation(* 1)
(2,404)
(160)
(2,564)
Transfer(* 2)
Ending
(189)
(12)
(201)
(*1) The useful life and depreciation method of investment property are identical to those of
property, plant and equipment.
(*2) Mainly includes assets transferred to property, plant and equipment in relation to change in
rental ratio and the purpose of use.
12. Property, Plant and Equipment, Net
22
36,020
50,112
4,005
90,137
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
Changes in the carrying value of property, plant and equipment for the nine-month period ended
September 30, 2015 and the year ended December 31, 2014 were as follows:
1) For the nine-month period ended September 30, 2015
(in millions of Won)
Land
Buildings
Structures
Machinery and equipment
Vehicles
Tools
Furniture and fixtures
Finance lease assets
Construction-in-progress
Beginning
Acquisitions
Disposals
Depreciation
Impairment(* 1)
Others(* 2)
Ending
W
1,420,994
2,760,842
2,612,553
14,503,266
12,953
23,324
37,584
6,370
945,329
2,271
1,641
50,549
834
2,062
1,299
946,763
(3,869)
(2,640)
(1,978)
(24,185)
(9)
-
(182,238)
(144,516)
(1,185,402)
(4,494)
(8,451)
(11,901)
(478)
-
(7,926)
(499)
(59,700)
(18)
(577)
(4,410)
38,276
59,729
934,768
2,493
1,816
3,450
(1,181,728)
1,412,715
2,608,585
2,526,930
14,219,296
11,786
18,751
30,405
5,892
709,787
W
22,323,215
1,005,419
(32,681)
(1,537,480)
(68,720)
(145,606)
21,544,147
(*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 values for the nine-month period ended September 30,
2015.
(*2) Represents assets transferred from construction-in-progress to intangible assets and other
property, plant and equipment and assets transferred from property, plant and equipment to
investment property and assets held-for-sale.
2) For the year ended December 31, 2014
(in millions of Won)
Land
Buildings
Structures
Machinery and equipment
Vehicles
Tools
Furniture and fixtures
Finance lease assets
Construction-in-progress
Beginning
Acquisitions
Disposals
Depreciation
Impairment(* 1)
Others(* 2)
Ending
W
1,397,271
2,637,774
2,469,046
13,202,710
10,769
25,680
47,394
7,007
3,442,952
39
5,941
11,239
125,297
792
5,795
7,150
1,628,325
(392)
(1,912)
(1,750)
(29,430)
(8)
(54)
(5)
-
(249,792)
(194,088)
(1,574,903)
(7,884)
(15,996)
(21,929)
(637)
-
(3,681)
(8,072)
(18,543)
(38)
-
24,076
372,512
336,178
2,798,135
9,284
7,899
5,012
(4,125,948)
1,420,994
2,760,842
2,612,553
14,503,266
12,953
23,324
37,584
6,370
945,329
W
23,240,603
1,784,578
(33,551)
(2,065,229)
(30,334)
(572,852)
22,323,215
(*1) The Company has recognized an impairment loss since the recoverable amounts of FINEX 1
plant and STS 1 steelmaking plant were lower than their book value.
(*2) Represents assets transferred from construction-in-progress to investment in subsidiary
(W558,915 million) and other property, plant and equipment, from investment property, to
intangible assets, and to assets held-for-sale.
23
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
13. Intangible Assets, Net
Changes in the carrying value of intangible assets for the nine-month period ended September 30,
2015 and the year ended December 31, 2014 were as follows:
1) For the nine-month period ended September 30, 2015
(in millions of Won)
Beginning
Intellectual property rights
Membership(* 1)
Development expense
Port facilities usage rights
Construction-in-progress
Other intangible assets
Acquisitions
Disposals
Amortization
Transfer(* 2)
Ending
W
17,594
53,154
127,941
162,028
16,756
26,434
2,861
121
23,736
345
(3,276)
-
(2,074)
(35,866)
(8,049)
(6,036)
4,279
(266)
11,264
110,346
(14,904)
840
19,799
52,473
103,460
264,325
25,588
21,583
W
403,907
27,063
(3,276)
(52,025)
111,559
487,228
(*1) Economic useful life of membership is indefinite.
(*2) Represents assets transferred from construction-in-progress to intangible assets and assets
transferred from property, plant and equipment.
2) For the year ended December 31, 2014
Beginning
(in millions of Won)
Intellectual property rights
Membership(* 1)
Development expense
Port facilities usage rights
Construction-in-progress
Other intangible assets
W
W
13,812
48,877
29,468
172,209
153,719
20,698
438,783
Acquisitions
Disposals
5,896
381
16,414
13,577
36,268
(217)
(2,209)
(2,426)
Amortization
(2,261)
(48,766)
(12,018)
(11,067)
(74,112)
Impairment(* 2)
590
590
Transfer(* 3)
6,260
146,858
1,837
(153,377)
3,226
4,804
Ending
17,594
53,154
127,941
162,028
16,756
26,434
403,907
(*1) Economic useful life of membership is indefinite.
(*2) The Company reversed accumulated impairment loss up to the carrying value before
recognition of any impairment loss since recoverable amounts of some memberships
exceeded the carrying value.
(*3) Represents assets transferred from construction-in-progress to intangible assets and assets
transferred from property, plant and equipment.
24
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
14. Borrowings
(a) Borrowings as of September 30, 2015 and December 31, 2014 are as follows:
(in millions of Won)
Short-term borrowings
Short-term borrow ings
Current portion of long-term borrow ings
Current portion of loans from foreign financial institutions
Current portion of debentures
Less : Current portion of discount on debentures issued
September 30, 2015
W
W
Long-term borrowings
Long-term borrow ings
Loans from foreign financial institutions
Debentures
Less : Discount on debentures issued
W
W
December 31, 2014
21,593
225,764
420
2,158,350
(1,046)
2,405,081
236,553
418
1,000,000
(681)
1,236,290
255,914
210
3,433,848
(15,635)
3,674,337
447,437
627
4,871,627
(18,764)
5,300,927
(b) Short-term borrowings as of September 30, 2015 and December 31, 2014 are as follows:
(in millions of Won)
Associates borrow ings
September 30, 2015
December 31, 2014
20,803
-
790
-
21,593
-
W
Transfers of account receivables
that do not qualify for derecognition
W
(c) Current portion of long-term borrowings as of September 30, 2015 and December 31, 2014 are as
follows:
Borrow ings
Woori Bank and others
Borrow ings
Export-Import Bank
of Korea
Issuance
date
2006.10.31~
2011.04.28
2010.02.18~
2011.03.23
Loans from foreign
financial institutions
NATIXIS(* 1)
1986.03.31
2017.03.31
Domestic debentures 296
and others
Euro Bond 1st
2010.11.16~
2011.09.07
2006.08.10
2015.11.16~
2016.09.07
2016.08.10
(in millions of Won)
Debentures
Debentures
Lenders
Maturity
date
2017.03.15~
2024.06.15
2016.09.23~
2017.07.26
Annual
interest rate (%)
2.00
September 30, 2015
December 31, 2014
15,532
15,532
210,232
221,021
420
418
3.78~4.56
1,799,148
999,319
5.88
358,156
2,383,488
1,236,290
0.75~1.75
W
4.09~4.50
W
(*1) Korea Development Bank has provided guarantees to the Company for loans from foreign
financial institutions.
25
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(d) Long-term borrowings excluding current portion, as of September 30, 2015 and December 31,
2014 are as follows:
(in millions of Won)
Lenders
Borrow ings
Borrow ings
Borrow ings
Loans from foreign
financial institutions
Debentures
Debentures
Woori Bank and others
Korea National
Oil Corporation
Export-Import Bank
of Korea
Issuance
date
2006.10.31~
2011.04.28
2007.12.27~
2013.12.30
2010.07.26~
2013.07.03
Maturity
date
2017.03.15~
2024.06.15
2022.06.25~
2026.12.29
2017.07.26~
2018.03.23
NATIXIS(* 1)
1986.03.31
2017.03.31
Domestic debentures 304-1
and others
Samurai Bond 11
and others
2011.11.28~
2013.10.04
2010.10.28~
2013.12.11
2018.11.28~
2023.10.04
2016.10.20~
2021.12.22
Annual
interest rate (%)
0.75~1.75
September 30, 2015
December 31, 2014
40,405
55,662
3 year
Government bond
W
15,386
14,159
4.09~4.50
200,123
377,616
210
627
3.35~4.12
997,619
2,295,585
0.93~5.25
2,420,594
2,557,278
3,674,337
5,300,927
2.00
W
(*1) Korea Development Bank has provided guarantees to the Company for loans from foreign
financial institutions.
15. Other Payables
Other payables as of September 30, 2015 and December 31, 2014 are as follows:
(in millions of Won)
Current
Accounts payable
Accrued expenses
Dividend payable
Finance lease liabilities
Withholdings
September 30, 2015
December 31, 2014
461,205
354,861
9,325
1,356
9,634
836,381
627,337
386,014
9,523
1,218
8,404
1,032,496
494
23,600
3,287
7,121
34,502
54,131
22,767
4,006
7,903
88,807
W
W
Non-current
Long-term accounts payable
Long-term accrued expenses
Finance lease liabilities
Long-term w ithholdings
W
W
16. Other Financial Liabilities
26
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
Other financial liabilities as of September 30, 2015 and December 31, 2014 are as follows:
(in m illions of Won)
Current
Derivative liabilities(* 1)
Financial guarantee liabilities
September 30, 2015
December 31, 2014
W
15,616
18,838
34,454
9,236
9,236
W
85,816
50,574
W
Non-current
Financial guarantee liabilities
(*1) The Company assessed the values of call option of SeAH Besteel Corp. in relation to the residual
equity held by the Company upon the disposal of SeAH Changwon Integrated Special Steel
(formerly, POSCO Specialty Steel Co., Ltd.). Accordingly, the Company has recognized
derivative liabilities amounting to w15,616 million as of September 30, 2015.
17. Provisions
(a) Provisions as of September 30, 2015 and December 31, 2014 are as follows:
(in millions of Won)
Provision for bonus payments(* 1)
Provision for restoration(* 2)
Provision for litigation(* 3)
September 30, 2015
Current
Non-current
W
W
4,195
16,754
20,949
24,024
411
24,435
December 31, 2014
Current
Non-current
8,423
39,336
47,759
31,063
411
31,474
(*1) Represents the provision for bonuses for executives.
(*2) Due to contamination of land near the Company's magnesium smelting plant located in
Gangneung, a provision has been recognized with a present value of estimated costs for
recovery. In order to compute the estimated costs, the Company has assumed that it would
use all of currently available technologies and materials to recover the land. In addition, the
Company has applied a discount rate of 2.62% to measure present value of these costs.
(*3) The Company has recognized provisions for a litigation in which the Company is more likely
than not to lose as of September 30, 2015.
(b) Changes in provisions for the nine-month period ended September 30, 2015 and the year ended
December 31, 2014 were as follows:
1) For the nine-month period ended September 30, 2015
27
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(in millions of Won)
Provision for bonus payments
Provision for restoration
Provision for litigation
Beginning
W
Increase
8,423
70,399
411
79,233
W
Utilization
10,157
2,045
12,202
(14,385)
(31,666)
(46,051)
Ending
4,195
40,778
411
45,384
2) For the year ended December 31, 2014
(in millions of Won)
Provision for bonus payments
Provision for restoration
Provision for litigation
Beginning
W
Increase
8,501
8,501
W
Utilization
10,643
89,433
411
100,487
(10,721)
(19,034)
(29,755)
Ending
8,423
70,399
411
79,233
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, 2015 and 2014 were as follows:
For the three-month periods
ended September 30
2015
2014
(in m illions of Won)
Expense related to post-employment benefit plans
under defined contribution plans
W
4,888
For the nine-month periods
ended September 30
2015
2014
4,433
15,406
13,783
(b) Defined benefit plans
1) The amounts recognized in relation to net defined benefit liabilities in the statements of financial
position as of September 30, 2015 and December 31, 2014 are as follows:
(in m illions of Won)
W
Present value of funded obligations
Fair value of plan assets
Net defined benefit liabilities
W
September 30, 2015
December 31, 2014
1,099,303
(941,876)
157,427
1,017,164
(931,006)
86,158
2) Changes in present value of defined benefit obligations for the nine-month period ended September
30, 2015 and the year ended December 31, 2014 were as follows:
28
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(in m illions of Won)
Defined benefit obligation at the beginning of period
Current service costs
Interest costs
Remeasurement
Transfer-in
Benefits paid
Defined benefit obligation at the end of period
September 30, 2015
December 31, 2014
1,017,164
90,201
22,307
39,044
283
(69,696)
1,099,303
905,918
113,688
32,595
47,604
1,959
(84,600)
1,017,164
W
W
3) Changes in the fair value of plan assets for the nine-month period ended September 30, 2015 and
the year ended December 31, 2014 were as follows:
(in m illions of Won)
Fair value of plan assets at the beginning of period
Interest on plan assets
Remeasurement of plan assets
Contributions to plan assets
Transfer-in
Benefits paid
Fair value of plan assets at the end of period
September 30, 2015
December 31, 2014
931,006
21,997
(5,949)
50,000
283
(55,461)
941,876
805,268
31,911
(8,417)
146,000
1,959
(45,715)
931,006
W
W
4) The amounts recognized in the statements of comprehensive income for the three-month and ninemonth periods ended September 30, 2015 and 2014 were as follows:
For the three-month periods
ended September 30
2015
2014
(in m illions of Won)
Current service costs
Net interest costs
W
28,528
104
28,632
W
29
27,769
171
27,940
For the nine-month periods
ended September 30
2015
2014
90,201
310
90,511
85,855
513
86,368
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
19. Other Liabilities
Other liabilities as of September 30, 2015 and December 31, 2014 are as follows:
(in millions of Won)
Current
Advances received
Withholdings
Unearned revenue
Non-current
Unearned revenue
September 30, 2015
W
December 31, 2014
6,246
50,237
2,000
88,880
18,417
1,211
58,483
108,508
16,802
234
W
20. Financial Instruments
(a) Classification of financial instruments
1) Financial assets as of September 30, 2015 and December 31, 2014 are as follows:
(in m illions of Won)
September 30, 2015
Financial assets at fair value through profit or loss
Derivatives assets held for trading
Available-for-sale financial assets
Loans and receivables
December 31, 2014
W
61,850
1,527,720
7,875,391
10,233
1,785,029
6,024,798
W
9,464,961
7,820,060
2) Financial liabilities as of September 30, 2015 and December 31, 2014 are as follows:
(in m illions of Won)
September 30, 2015
Financial liabilities at fair value through profit or loss
Derivatives liabilities held for trading
W
Financial liabilities measured at amortized cost
Trade accounts and notes payable
Borrow ings
Financial guarantee liabilities(* 1)
Others
W
December 31, 2014
15,616
-
671,774
6,079,418
104,654
846,060
777,401
6,537,217
59,810
1,036,487
7,701,906
8,410,915
7,717,522
8,410,915
(*1) Financial liabilities were recognized in connection with financial guarantee contracts as of
September 30, 2015. The details of the amount of guarantees provided are as follows:
30
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(in millions of Won)
Guarantee beneficiary
POSCO(Guangdong)
Automotive Steel Co., Ltd.
Zhangjiagang Pohang
Stainless Steel Co., Ltd.
POSCO Maharashtra
Steel Private Limited
POSCO ASSAN TST
STEEL INDUSTRY
POSCO Electrical Steel
India Private Limited
POSCO Investment Co., Ltd.
POSCO MEXICO S.A. DE
POSCO SS-VINA
POSCO-VIETNAM Co., Ltd.
POSCO VST Co., Ltd.
PT. KRAKATAU POSCO
POSCO COATED STEEL
(THAILAND) CO., LTD.
LLP POSUK Titanium
CSP - Compania
Siderurgica do Pecem
Financial institution
SMBC
BOA
MIZUHO
Credit Agricole
BTMU
Export-Import Bank of
DBS
HSBC
SCB
Citi
ING
KDB Bank
SMBC
KDB Bank
ING
HSBC
ING
SCB
HSBC
JP Morgan
MIZUHO
NAB
BOA
BTMU
ING
SMBC
SMBC
MIZUHO
BOA
HSBC
Export-Import Bank of
BOA
BTMU
DBS
Export-Import Bank of
ANZ
HSBC
MIZUHO
Export-Import Bank of
SMBC
BTMU
SCB
MIZUHO
Credit Suisse AG
HSBC
ANZ
BOA
CTBC
Guarantee limit
Foreign currency
Won equivalent
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
35,000,000
30,000,000
50,000,000
50,000,000
30,000,000
193,000,000
100,000,000
80,000,000
73,069,000
60,000,000
30,000,000
30,000,000
71,392,500
45,000,000
45,000,000
27,000,000
50,000,000
33,784,000
50,000,000
50,000,000
50,000,000
50,000,000
45,000,000
30,000,000
30,000,000
30,000,000
109,725,000
45,000,000
40,000,000
40,000,000
249,951,050
40,000,000
40,000,000
24,400,000
196,000,000
25,000,000
20,000,000
20,000,000
567,000,000
140,000,000
119,000,000
107,800,000
105,000,000
91,000,000
91,000,000
73,500,000
35,000,000
21,000,000
41,808
35,835
59,725
59,725
35,835
230,539
119,450
95,560
87,281
71,670
35,835
35,835
85,278
53,753
53,753
32,252
59,725
40,355
59,725
59,725
59,725
59,725
53,753
35,835
35,835
35,835
131,067
53,753
47,780
47,780
298,567
47,780
47,780
29,146
234,122
29,863
23,890
23,890
677,282
167,230
142,146
128,767
125,423
108,700
108,700
87,796
41,808
25,085
The Great & Co Co., Ltd.(SPC)
THB
5,501,000,000
KB Bank
Export-Import Bank of Korea
Santander
BNP
MIZUHO
HSBC
Credit Agricole
SOCIETE GENERALE
KfW
BNDES
USD
USD
USD
USD
USD
USD
USD
USD
USD
BRL
15,000,000
182,000,000
47,600,000
47,600,000
47,600,000
35,200,000
20,000,000
20,000,000
20,000,000
464,060,000
USD
BRL
THB
4,003,621,550
464,060,000
5,501,000,000
Korea
Korea
Korea
Korea
Guarantee amount
Foreign currency
Won equivalent
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
USD
35,000,000
30,000,000
50,000,000
50,000,000
30,000,000
187,800,000
100,000,000
68,000,000
57,069,000
48,000,000
18,000,000
30,000,000
57,114,000
36,000,000
36,000,000
21,600,000
50,000,000
33,784,000
50,000,000
50,000,000
50,000,000
50,000,000
29,500,000
14,500,000
14,500,000
14,500,000
109,725,000
45,000,000
40,000,000
40,000,000
249,951,050
40,000,000
40,000,000
24,400,000
196,000,000
15,625,000
12,500,000
12,500,000
524,391,304
129,652,174
108,652,174
100,252,174
95,869,565
83,086,957
83,086,957
68,934,783
31,956,522
19,173,913
41,808
35,835
59,725
59,725
35,835
224,327
119,450
81,226
68,169
57,336
21,501
35,835
68,223
43,002
43,002
25,801
59,725
40,355
59,725
59,725
59,725
59,725
35,238
17,320
17,320
17,320
131,067
53,753
47,780
47,780
298,567
47,780
47,780
29,146
234,122
18,664
14,931
14,931
626,385
154,870
129,785
119,751
114,516
99,247
99,247
82,343
38,172
22,903
180,323
THB
5,501,000,000
180,323
17,918
217,399
56,858
56,858
56,858
42,046
23,890
23,890
23,890
136,652
USD
USD
USD
USD
USD
USD
USD
USD
USD
BRL
15,000,000
161,460,798
42,332,179
42,332,179
42,332,179
31,081,521
17,860,946
17,860,946
17,860,946
274,129,418
17,918
192,865
50,566
50,566
50,566
37,127
21,335
21,335
21,335
80,723
4,782,334
136,652
180,323
USD
BRL
THB
3,670,246,267
274,129,418
5,501,000,000
4,384,111
80,723
180,323
3) Finance income and costs by category of financial instrument for the nine-month periods ended
September 30, 2015 and 2014 were as follows:
① September 30, 2015
31
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(in millions of Won)
Finance income and costs
Interest income
(expense)
Financial assets at fair value
through profit or loss
Available-for-sale financial assets
Dividend
income(* 1)
Gain and loss on
foreign currency
Impairment
loss
Gain and loss on
disposal
Others
(주1)
W 당분기말 현재
- 당사가 금융보증부채로
(438)다음과 같습니다- .
계상한- 금융보증계약은
Loans and receivables
Financial liabilities at
fair value through profit or loss
Financial liabilities
at amortized cost
W
Other
comprehensive
loss
Total
7,733
(419)
7,295
(31,985)
162,183
-
34
66,904
43,148
-
95,698
54
-
(75,221)
-
-
-
-
-
-
6,579
(183,653)
-
(299,250)
-
-
2,025
(480,878)
-
(116,715)
43,148
(203,552)
(384)
(75,221)
15,918
(336,806)
(137,342)
6,579
(137,342)
-
(*1) Financial income in the statement of comprehensive income includes the dividends from
subsidiaries, associates and joint ventures of W274,257 million for the nine-month period
ended September 30, 2015.
② September 30, 2014
(in millions of Won)
Finance income and costs
Interest income
(expense)
Financial assets at fair value
through profit or loss
W
Available-for-sale financial assets
Loans and receivables
Financial liabilities at
fair value through profit or loss
Financial liabilities
at amortized cost
W
Dividend
income(* 1)
Gain and loss on
foreign currency
Gain and loss on
disposal
Impairment
loss
Others
2,972
Total
Other
comprehensive
loss
-
-
-
-
-
290
65,041
36,149
-
22,558
198,717
-
(183,782)
-
(523)
2,972
-
51,374
87,076
(362,569)
-
-
-
-
(24,956)
-
(4,586)
(29,542)
-
(188,746)
-
101,996
(38,596)
-
(130)
(125,476)
-
(123,415)
36,149
124,554
135,165
(183,782)
(2,267)
(13,596)
(362,569)
(*1) Financial income in the statement of comprehensive income includes the dividends from
subsidiaries, associates and joint ventures of W105,273 million for the nine-month period
ended September 30, 2014.
32
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
4) Finance income and costs by category of financial instrument for the three-month periods ended
September 30, 2015 and 2014 were as follows:
① September 30, 2015
(in millions of Won)
Finance income and costs
Interest income
(expense)
Financial assets at fair value
through profit or loss
Available-for-sale financial assets
W
Loans and receivables
Financial liabilities at
fair value through profit or loss
Financial liabilities
at amortized cost
W
Dividend
income(* 1)
Gain and loss on
foreign currency
Gain and loss on
disposal
Impairment
loss
Others
(주1) 당분기말
- 현재 당사가 금융보증부채로
- 금융보증계약은- 다음과 같습니다
-.
계상한
Other
comprehensive
loss
Total
2,786
(198)
2,786
364
-
70,450
71
-
(23,265)
-
-
-
-
-
-
(61,204)
-
(241,604)
-
-
2,072
(300,736)
-
(36,180)
364
(171,154)
71
(23,265)
5,753
(224,411)
(165,721)
1,093
(22,816)
95,262
-
14
25,010
1,093
(165,721)
-
(*1) Financial income in the statement of comprehensive income includes the dividends from
subsidiaries, associates and joint ventures of W8,873 million for the three-month period
ended September 30, 2015.
② September 30, 2014
(in millions of Won)
Finance income and costs
Interest income
(expense)
Financial assets at fair value
through profit or loss
Available-for-sale financial assets
W
Loans and receivables
Financial liabilities at
fair value through profit or loss
Financial liabilities
at amortized cost
W
Dividend
income(* 1)
Gain and loss on
foreign currency
Gain and loss on
disposal
Impairment
loss
Others
Other
comprehensive
loss
Total
-
-
-
-
-
920
54
17,592
994
-
25,778
81,035
-
(179,209)
-
(73)
920
-
(97,126)
43,297
(50,477)
-
-
-
-
13,625
-
(18,106)
(4,481)
(63,395)
-
(65,557)
(20,965)
-
(39)
(149,956)
-
(45,749)
994
(39,779)
73,695
(179,209)
(17,298)
(207,346)
(50,477)
(*1) Financial income in the statement of comprehensive income includes the dividends from
subsidiaries, associates and joint ventures of W11,700 million for the three-month period
ended September 30, 2014.
33
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(b) Fair value
1) Fair value and book value
The carrying amount and the fair value of financial instruments as of September 30, 2015 and
December 31, 2014 are as follows:
(in m illions of Won)
Assets measured at fair value
Available-for-sale financial assets(* 1)
Derivatives assets held for trading(* 2)
September 30, 2015
Book value
Fair value
W
December 31, 2014
Book value
Fair value
1,408,849
61,850
1,408,849
61,850
1,648,567
10,233
1,648,567
10,233
1,470,699
1,470,699
1,658,800
1,658,800
1,800,558
2,890,612
3,184,221
1,800,558
2,890,612
3,184,221
1,742,767
3,181,107
1,100,924
1,742,767
3,181,107
1,100,924
7,875,391
7,875,391
6,024,798
6,024,798
Derivatives liabilities held for trading(* 2)
15,616
15,616
-
-
Liabilities measured at amortized cost(* 3)
Trade accounts and notes payable
Borrow ings
Financial guarantee liabilities
Others
671,774
6,079,418
104,654
846,060
671,774
6,552,437
104,654
846,060
777,401
6,537,217
59,810
1,036,487
777,401
6,918,972
59,810
1,036,487
7,701,906
8,174,925
8,410,915
8,792,670
Assets measured at amortized cost(* 3)
Cash and cash equivalents
Trade accounts and notes receivable, net
Loans and other receivables, net
Liabilities measured at fair value
W
(*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 rate. 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,
binominal lattice model and others in which the market yields on government bonds are used
as 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.
2) The fair value hierarchy
34
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
The fair values of financial instruments by fair value hierarchy as of September 30, 2015 and
December 31, 2014 are as follows:
① September 30, 2015
(in millions of Won)
Financial assets
Available-for-sale financial assets
Derivatives assets held for trading
Level 1
W
W
Financial liabilities
Derivatives liabilities held for trading W
Level 2
Level 3
Total
1,401,953
1,401,953
12,358
12,358
6,896
49,492
56,388
1,408,849
61,850
1,470,699
-
-
15,616
15,616
② December 31, 2014
(in millions of Won)
Financial assets
Available-for-sale financial assets
Derivatives assets held for trading
Level 1
W
W
3)
1,620,390
1,620,390
Level 2
10,233
10,233
Level 3
28,177
28,177
Financial risk management
The Company is exposed to credit risk, liquidity risk and market risk arising from financial assets
and liabilities. The Company’s 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,
2014.
35
Total
1,648,567
10,233
1,658,800
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
21. Share Capital and Capital Surplus
(a) Share capital as of September 30, 2015 and December 31, 2014 are as follows:
(Share, Won)
Authorized shares
Par value
Issued shares(* 1)
Shared capital(* 2)
September 30, 2015 December 31, 2014
200,000,000
5,000
87,186,835
482,403,125,000
W
W
200,000,000
5,000
87,186,835
482,403,125,000
(*1) As of September 30, 2015, total shares of ADRs of 53,990,108 are equivalent to 13,497,527 of
common stock.
(*2) As of September 30, 2015, the difference between the ending balance of common stock and
the par value of issued common stock is W46,469 million due to retirement of 9,293,790
treasury stocks.
(b) Capital surplus as of September 30, 2015 and December 31, 2014 are as follows:
(in m illions of Won)
Additional paid in capital
Gain on disposal of treasury shares
September 30, 2015 December 31, 2014
W
463,825
783,802
1,247,627
W
36
463,825
783,791
1,247,616
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
22. Hybrid Bonds
Hybrid bonds classified as equity as of September 30, 2015 and December 31, 2014 are as follows:
(in millions of Won)
Hybrid bond 1-1(* 1)
Hybrid bond 1-2(* 1)
Issuance cost
Date of issue
Date of maturity
Rate of
interest (%)
2013-06-13
2013-06-13
2043-06-13
2043-06-13
4.3
4.6
September 30, 2015
December 31, 2014
800,000
200,000
(3,081)
996,919
800,000
200,000
(3,081)
996,919
W
W
(*1) Details of hybrid bonds are as follows:
(in m illion s of Won )
Hybrid bond 1-1
Hybrid bond 1-2
Issue price
800,000
200,000
Maturity date
3 0 years (The Company has a right to extend the maturity date)
3 0 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 follow s;
· 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 follow s;
· After 10 years : return on government bond (10 years) + 1.4%
· After 10 years : additionally + 0.25% according to Step-up
clauses
· After 3 0 years : additionally + 0.75%
Quarterly
(Optional deferral of interest payment is available to the
Company)
Quarterly
(Optional deferral of interest payment is available to the
Company)
The Company can call the hybrid bond at year 5 and interest
payment date afterw ards
The Company can call the hybrid bond at year 10 and interest
payment date afterw ards
Interest payments
condition
Others
The interest accumulated but not paid on the hybrid bonds as of September 30, 2015 amounts to W2,156
million.
23. Reserves
Reserves as of September 30, 2015 and December 31, 2014 are as follows:
(in millions of Won)
Accumulated changes in the unrealized fair value
of available-for-sale investments, net of tax
W
September 30, 2015
December 31, 2014
(43,300)
94,042
24. Treasury Shares
As of September 30, 2015, the Company holds 7,193,167 shares of treasury stock for price
stabilization and others in accordance with the Board of Director’s resolution.
37
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
25. Selling and Administrative Expenses
(a) Administrative expenses
Administrative expenses for the three-month and nine-month periods ended September 30, 2015
and 2014 were as follows:
For the three-month periods
ended September 30
(in millions of Won)
2015
Wages and salaries
Expenses related to post-employment benefits
Other employee benefits
Travel
Depreciation
Amortization
Rental
Repairs
Advertising
Research & development
Service fees
Supplies expense
Vehicles maintenance
Industry association fee
Training
Conference
Bad debt expenses
Others
W
56,377
8,026
12,067
3,037
4,491
13,235
17,224
1,879
17,472
25,027
42,067
1,211
1,748
955
1,841
1,245
3,677
7,110
218,689
W
2014
54,579
5,281
15,379
3,409
5,927
13,254
16,670
1,972
17,818
25,073
41,435
1,231
1,749
873
2,536
1,264
14,866
6,861
230,177
For the nine-month periods
ended September 30
2015
163,800
24,785
37,849
9,730
14,536
39,377
51,859
5,965
53,488
62,936
132,221
4,049
5,233
6,160
9,335
4,057
2,468
26,621
654,469
2014
155,511
18,427
40,120
9,996
17,823
39,807
51,735
8,197
60,130
81,485
131,516
3,942
5,250
6,051
7,361
3,626
15,382
23,613
679,972
(b) Selling expenses
Selling expenses for the three-month and nine-month periods ended September 30, 2015 and 2014
were as follows:
For the three-month periods
ended September 30
(in millions of Won)
2015
Freight and custody expenses
Operating expenses for distribution center
Sales commissions
Sales advertising
Sales promotion
Sample
Sales insurance premium
W
239,025
2,446
17,097
374
1,309
457
1,664
262,372
W
38
2014
222,558
2,424
18,776
543
1,280
476
1,970
248,027
For the nine-month periods
ended September 30
2015
676,925
7,860
45,332
1,549
4,054
1,156
4,342
741,218
2014
641,339
7,317
51,377
1,313
3,531
1,246
4,710
710,833
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
26. Finance Income and Costs
Details of finance income and costs for the three-month and nine-month periods ended September 30,
2015 and 2014 were as follows:
For the three-month periods
ended September 30
2015
2014
(in millions of Won)
Finance income
Interest income
W
Dividend income
Gain on foreign currency transactions
Gain on foreign currency translations
Gain on valuation of derivatives
Gain on derivative transactions
Gain on disposals of available-for-sale investment
Gain on redemption of debentures
Gain on financial guarantee
W
Finance costs
Interest expenses
Loss on foreign currency transactions
Loss on foreign currency translations
Loss on valuation of derivatives
Loss on derivative transactions
Impairment loss on available-for-sale investment
Loss on redemption of debentures
Others
W
W
For the nine-month periods
ended September 30
2015
2014
25,024
9,237
75,669
14,567
4,230
71
2,090
130,888
17,646
12,694
48,378
(47,381)
(20,732)
15,549
81,035
107,189
66,938
317,405
156,480
38,074
15,925
67
137
2,090
597,116
65,331
141,422
199,468
71,597
2,972
21,651
198,717
1,500
702,658
61,204
53,454
207,936
352
23,265
215
346,426
63,395
41,488
(712)
(3,545)
1,924
179,209
20,965
111
302,835
183,653
129,989
268,117
1,613
505
75,221
567
659,665
188,746
134,209
12,302
4,586
46,607
183,782
40,096
653
610,981
39
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(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, 2015 and 2014 were as follows:
For the three-month periods
ended September 30
2015
2014
(in millions of Won)
Other non-operating income
Gain on disposals of property, plant and equipment
W
Gain on disposals of intangible assets
Gain on disposals of investment in subsidiaries, associates and joint ventures
Gain on disposals of assets held for sale
Premium income
Others
W
Other non-operating expenses
Loss on disposals of property, plant and equipment
W
Impairment loss on property, plant and equipment
Loss on disposals of intangible assets
Other bad debt expense
Donations
Idle tangible assets expenses
Impairment loss on investment in subsidiaries, associates and joint ventures
Loss on disposals of assets held for sale
Impairment loss on assets held for sale
Contribution to provisions (reversal of contribution to provisions)
Others(* 1, 2)
W
For the nine-month periods
ended September 30
2015
2014
2,479
136
357,008
2,138
3,211
364,972
336
289
825
5,961
7,411
8,543
518
2,046
409,173
8,887
8,942
438,109
3,295
289
1,284
13,857
18,725
12,964
22,284
175
26
10,120
1,216
45,157
83,741
(23)
301,373
477,033
8,371
30,334
97
53
5,756
4,793
52,058
23,454
12,366
137,282
57,201
68,720
647
32
30,770
5,951
260,833
20,133
95,737
2,045
328,339
870,408
38,140
30,334
134
25,757
34,542
5,266
140,106
14
92,906
160,390
527,589
(*1) The Company recorded litigation expense of W299,037 million in connection of its settlement
with Nippon Steel & Sumitomo Metal Corporation for a civil lawsuit regarding improperly
acquired trade secrets and patents during the three-month and nine-month periods ended
September 30, 2015 (Note 32).
(*2) As a result of Korea National Tax Service’s periodic audit of tax payments and refunds of the
Company, the Company recognized additional tax payments amounting to W139,773 million,
primarily related to VAT, in the nine-month period ended September 30, 2014.
40
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(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 ninemonth period ended September 30, 2015 and 2014 were as follows (excluding finance costs and
income tax expense):
For the three-month periods
ended September 30
2015
2014
Changes in inventories(* 1)
W
64,425
63,833
Raw materials and consumables used
3,327,780
4,255,395
Wages and salaries including expenses related to post-employment benefits
381,951
385,482
Outsourced processing cost
540,911
535,396
Depreciation(* 2)
517,002
531,059
Amortization
18,020
18,570
Electricity and w ater expenses
197,139
231,428
Service fees
56,061
55,506
Rental
21,424
21,204
Advertising
17,472
17,818
Freight and custody expenses
239,025
222,558
Sales commissions
17,097
18,776
Loss on disposals of property, plant and equipment
12,964
8,371
Impairment loss on property, plant and equipment
22,284
30,334
Impairment loss on investments in subsidiaries, associates and joint ventures
45,157
52,058
Loss on disposals of assets held for sale
Impairment loss on assets held for sale
83,741
Contribution to provisions (reversal of contribution to provisions)
(23)
23,454
Other expenses
575,544
321,207
W
6,137,974
6,792,449
(in millions of Won)
For the nine-month periods
ended September 30
2015
2014
263,422
(86,802)
10,639,021
13,571,836
1,126,438
1,102,903
1,624,228
1,639,814
1,539,392
1,532,130
52,025
56,033
688,251
757,226
171,448
173,391
65,588
65,934
53,488
60,130
676,925
641,339
45,332
51,377
57,201
38,140
68,720
30,334
260,833
140,106
20,133
14
95,737
2,045
92,906
1,215,033
1,016,522
18,665,260
20,883,333
(*1) Changes in inventories are the changes in product, semi-finished products and by-product.
(*2) Includes depreciation of investment property.
29. Income Taxes
The effective tax rate of the Company for the nine-month periods ended September 30, 2015 and 2014
was 23.0% and 32.3%, respectively. The effective tax rate for the nine-month period ended
September 30, 2014 was higher than the statutory tax rate of 24% for the Company due to the effect of
additional income tax payment due to tax investigation and non-deductible expense primarily related
to additional VAT payment (Note 27).
41
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
30. Earnings per Share
Basic and diluted earnings per share for the three-month and nine-month periods ended September 30,
2015 and 2014 were as follows:
For the three-month periods
ended September 30
(in Won
except per share inform ation)
Profit for the period
Interests of hybrid bonds
Weighted-average number
of common shares outstanding(* 1)
Basic and diluted earnings per share
W
For the nine-month periods
ended September 30
2015
2014
2015
2014
346,211,467,208
(8,347,872,419)
221,575,392,443
(8,347,872,419)
1,056,421,687,190
(24,699,275,257)
880,329,830,672
(24,699,275,257)
79,993,620
79,784,263
79,993,350
79,784,063
4,224
2,673
12,898
10,724
(*1) The weighted-average number of common shares used to calculate basic and diluted earnings per
share are as follows:
For the three-month periods
ended September 30
(in share)
2015
Total number of common shares issued
Weighted-average number
of treasury shares
Weighted-average number
of common shares outstanding
W
87,186,835
(7,193,215)
W
79,993,620
2014
87,186,835
(7,402,572)
79,784,263
For the nine-month periods
ended September 30
2015
87,186,835
(7,193,485)
79,993,350
2014
87,186,835
(7,402,772)
79,784,063
Since there were no potential shares of common stock which had dilutive effects as of September 30,
2015, diluted earnings per share is equal to basic earnings per share.
42
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
31. Related Party Transactions
(a) Significant transactions with related companies for the nine-month periods ended September 30,
2015 and 2014 were as follows:
1) For the nine-month period ended September 30, 2015
(in millions of Won)
Sales and others(* 1)
Sales
Subsidiaries(* 3)
POSCO ENGINEERING & CONSTRUCTION., LTD. W
POSCO Processing&Service
POSCO COATED & COLOR STEEL Co., Ltd.
POSCO ICT(* 4)
eNtoB Corporation
POSCO CHEMTECH
POSCO ENERGY CO., LTD.
POSCO TMC Co., Ltd.
POSCO AST
POSHIMETAL Co., Ltd.
Daew oo International Corporation
SeAH Changw on Integrated Special Steel
(formerly, POSCO Specialty Steel Co., Ltd.)(* 5)
POSCO PLANTEC Co., Ltd.(* 5)
POSCO Thainox Public Company Limited
PT. KRAKATAU POSCO
POSCO America Corporation
POSCO Canada Ltd.
POSCO Asia Co., Ltd.
Qingdao Pohang Stainless Steel Co., Ltd.
POSCO JAPAN Co., Ltd.
POSCO MEXICO S.A. DE C.V.
POSCO Maharashtra Steel Private Limited
Others(* 6)
Associates and joint ventures(* 3)
SeAH Changw on Integrated Special Steel
(formerly, POSCO Specialty Steel Co., Ltd.)(* 5)
SNNC
POSCO-SAMSUNG-Slovakia Processing Center
Others(* 7,8)
W
Purchase of
material
Others
Purchase and others(* 2)
Purchase of
Outsourced
fixed assets
processing cost
358,910
180,537
5,118
6,893
-
1,822
7,510
22,249
94
225,706
1,058
29,363
-
Others
3,127
839,457
298,089
893
340,549
140,252
202,421
283,513
9,071
2,652,467
114
5
24,756
999
3
118
34,341
19
338,817
203,061
387,038
4,115
114,935
37,732
29,398
1,829
56
131,964
15,004
1,180
13
1,017
412
33
865
2,811
176,904
8,239
-
515
75
4,280
203,411
496,793
1,365,277
97,498
785,031
201,101
302,720
667,261
8,896,022
33
10
7
873
9,383
189
11,960
259,695
2,544
3,833
115,557
95,936
202,537
18,625
182,468
1,715,456
116,912
2,198
73,807
744,375
15,135
182
201
161,069
464,904
13,649
28
139
1,120
46
1,086
2
31
78,332
276,279
3,547
-
3,327
-
268
1
1,934
19,187
12,023
36,691
412
40,278
40,690
326,679
43,220
373,226
-
1
269
1
8,932,713
300,385
2,088,682
744,375
465,173
276,280
(*1) Sales and others are mainly consist of sales of steel products to subsidiaries, associates and
joint ventures. These are priced on an arm’s length basis.
(*2) Purchases and others are mainly consist of subsidiaries’ purchases of construction services and
purchases of raw materials to manufacture steel products. These are priced on an arm’s
length basis.
(*3) As of September 30, 2015, 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) They are reclassified from subsidiaries to associates (Note 10).
(*6) The Company borrowed USD 17.42 million from POSCO-Uruguay S.A, a subsidiary of the
Company, during the nine-month period ended September 30, 2015.
(*7) The Company lent USD 60 million to CSP, an associate of the Company, and the entire
amount of loan was collected during the nine-month period ended September 30, 2015.
(*8) The Company collected the loan of USD 3.85 million from LLP POSUK Titanium, an
associate of the Company, during the nine-month period ended September 30, 2015.
43
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
2) For the nine-month period ended September 30, 2014
(in millions of Won)
Sales and others
Sales
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION., LTD. W
POSCO Processing&Service
POSCO COATED & COLOR STEEL Co., Ltd.
POSCO ICT
eNtoB Corporation
POSCO CHEMTECH
POSCO M-TECH
POSCO ENERGY CO., LTD.
POSCO TMC Co., Ltd.
POSCO AST
POSHIMETAL Co., Ltd.
Daew oo International Corporation
POSCO America Corporation
POSCO Canada Ltd.
POSCO Asia Co., Ltd.
Qingdao Pohang Stainless Steel Co., Ltd.
POSCO JAPAN Co., Ltd.
POSCO MEXICO S.A. DE C.V.
POSCO Maharashtra Steel Private Limited
Others
Associates and joint ventures
SNNC
POSCO PLANTEC Co., Ltd.
Others
W
Others
Purchase of
material
Purchase and others
Purchase of
Outsourced
fixed assets
processing cost
Others
19,650
794,689
332,862
635
397,910
144
131,365
180,327
390,673
7,714
2,661,942
524,797
1,605,969
51,238
1,054,186
203,241
307,527
694,170
9,359,039
16,731
8,648
10
2,542
1
20,926
21
918
38
2
3,617
20,628
2
89
2
775
610
8,697
84,257
632,748
193,717
382,897
92,729
8,112
124,103
84,180
109,832
131,006
10,363
165,851
1,935,538
716,827
139,152
2,590
3,650
1,292
2,263
892
39,561
906,227
3,689
8,623
19,364
108
226,683
148,432
795
47,431
10,006
3
24,962
490,096
18,372
1,199
116
117,870
13,501
748
6,256
20
1,152
1,526
2,077
179
1,338
766
86,537
251,657
2,454
11,764
23,886
38,104
5,322
43
40,900
46,265
272,288
2,358
47,954
322,600
65,962
65,962
10,643
10,643
5
11,748
11,753
9,397,143
130,522
2,258,138
972,189
500,739
263,410
(b) Significant transactions with related companies for the three-month periods ended September 30,
2015 and 2014 were as follows:
44
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
1) For the three-month period ended September 30, 2015
(in millions of Won)
Sales and others
Sales
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION., LTD. W
POSCO Processing&Service
POSCO COATED & COLOR STEEL Co., Ltd.
POSCO ICT
eNtoB Corporation
POSCO CHEMTECH
POSCO ENERGY CO., LTD.
POSCO TMC Co., Ltd.
POSCO AST
POSHIMETAL Co., Ltd.
Daew oo International Corporation
POSCO PLANTEC Co., Ltd.
POSCO Thainox Public Company Limited
POSCO America Corporation
POSCO Canada Ltd.
POSCO Asia Co., Ltd.
Qingdao Pohang Stainless Steel Co., Ltd.
POSCO JAPAN Co., Ltd.
POSCO MEXICO S.A. DE C.V.
POSCO Maharashtra Steel Private Limited
Others(* 1)
Associates and joint ventures
SeAH Changw on Integrated Special Steel
(formerly, POSCO Specialty Steel Co., Ltd.)
SNNC
POSCO-SAMSUNG-Slovakia Processing Center
Others(* 2)
W
Purchase of
material
Others
1,100
305,176
99,689
213
94,719
44,075
79,405
84,368
2,554
870,337
299
63,593
160,721
443,568
16,647
277,524
68,672
94,782
204,367
2,911,809
24
1
7,123
384
43
8
294
36
1,835
9,748
Purchase and others
Purchase of
Outsourced
fixed assets
processing cost
Others
91,934
56,609
127,539
32,811
10,983
809
533
31,912
77,282
6,691
61,956
499,059
67,549
96,025
2,722
711
52,420
524
28,633
248,584
1,812
7,580
41
75,685
392
10,092
4,675
87
201
54,226
154,791
62
197
2
43,535
4,540
681
383
303
96
2,727
3
54
883
567
2
31
32,070
86,136
1,894
-
655
-
39
-
729
4,788
2,787
10,198
129
8,879
9,008
114,537
14,925
130,117
-
1
40
-
2,922,007
18,756
629,176
248,584
154,831
86,136
(*1) The Company borrowed USD 17.42 million from POSCO-Uruguay S.A, a subsidiary of the
Company, during the three-month period ended September 30, 2015.
(*2) The Company collected the loan of USD 60 million from CSP, an associate of the Company, during
the three-month period ended September 30, 2015.
45
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
2) For the three-month period ended September 30, 2014
Sales and others
(in millions of Won)
Sales
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION., LTD. W
POSCO Processing&Service
POSCO COATED & COLOR STEEL Co., Ltd.
POSCO ICT
eNtoB Corporation
POSCO CHEMTECH
POSCO M-TECH
POSCO ENERGY CO., LTD.
POSCO TMC Co., Ltd.
POSCO AST
POSHIMETAL Co., Ltd.
Daew oo International Corporation
POSCO America Corporation
POSCO Canada Ltd.
POSCO Asia Co., Ltd.
Qingdao Pohang Stainless Steel Co., Ltd.
POSCO JAPAN Co., Ltd.
POSCO MEXICO S.A. DE C.V.
POSCO Maharashtra Steel Private Limited
Others
Others
Purchase of
fixed assets
Outsourced
processing cost
Others
13,019
276,632
104,224
28
130,111
49
46,760
64,923
123,996
2,447
954,810
162,205
595,816
16,343
334,806
67,186
195,744
230,688
3,319,787
57
70
9
52
1
5,492
5
320
38
2
1,304
23
36
29
79
7,517
158,940
70,830
130,166
29,117
3,276
43,115
14,115
27,343
34,069
4,001
55,199
570,171
126,342
41,090
911
902
402
433
13,883
183,963
429
3,353
6,679
73
73,985
46,955
267
14,852
1,125
7,991
155,709
5,853
938
50
37,896
4,437
191
1,745
388
675
421
670
319
28,245
81,828
411
3,364
9,748
13,523
49
19
11,434
11,502
108,530
858
15,355
124,743
28,607
28,607
4,296
4,296
9,090
9,090
3,333,310
19,019
694,914
212,570
160,005
90,918
Associates and joint ventures
SNNC
POSCO PLANTEC Co., Ltd.
Others
W
Purchase and others
Purchase of
material
(c) The related account balances of significant transactions with related companies as of September 30,
2015 and December 31, 2014 are as follows:
1) September 30, 2015
(in millions of Won)
Receivables
Trade accounts
and
notes receivable
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION., LTD. W
POSCO Processing&Service
POSCO COATED & COLOR STEEL Co., Ltd.
POSCO ICT
eNtoB Corporation
POSCO CHEMTECH
POSCO ENERGY CO., LTD.
POSCO TMC Co., Ltd.
POSCO AST
POSHIMETAL Co., Ltd.
Daew oo International Corporation
POSCO Thainox Public Company Limited
POSCO America Corporation
POSCO Asia Co., Ltd.
Qingdao Pohang Stainless Steel Co., Ltd.
POSCO MEXICO S.A. DE C.V.
POSCO Maharashtra Steel Private Limited
Others(* 1)
Associates and joint ventures
SeAH Changw on Integrated Special Steel
(formerly, POSCO Specialty Steel Co., Ltd.)
SNNC
POSCO PLANTEC Co., Ltd.
Others
W
Payables
Others
64
85,326
72,065
31,285
17,718
78,048
59,635
172,299
63,593
58,786
198,449
6,703
85,777
285,965
142,439
1,358,152
Total
39,327
125
49
66
4,088
1,976
23
41
4,804
243
3,780
54,522
39,391
85,451
72,114
66
35,373
19,694
78,071
59,676
4,804
172,299
63,593
58,786
198,692
6,703
85,777
285,965
146,219
1,412,674
1,605
-
263
94
667
2,629
22
4
12,206
12,232
1,360,781
66,754
Trade accounts
and
notes payable
Accounts
payable
Others
4,215
1,076
7,501
55,481
4,414
13,176
85,863
7,161
237
5
34,810
11,642
11,930
20
1,711
9,403
95
95
2
29,692
106,803
109
897
2,088
13
20,094
1,945
203
3,803
1
45,949
75,102
1,605
-
-
-
-
285
98
12,873
14,861
27,651
1,213
28,864
10,692
10,692
6
6
27,651
11,911
39,562
1,427,535
114,727
117,495
75,108
307,330
(*1) Other payables include a loan of USD 17.42 million borrowed from POSCO-Uruguay S.A.
2) December 31, 2014
46
Total
7,270
4,452
902
37,974
19,156
87,505
1,945
223
5,514
9,404
95
4,509
2
88,817
267,768
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(in millions of Won)
Receivables
Trade accounts
and notes
receivable
Subsidiaries
POSCO ENGINEERING & CONSTRUCTION., LTD. W
POSCO Processing&Service
POSCO COATED & COLOR STEEL Co., Ltd.
POSCO ICT
eNtoB Corporation
POSCO CHEMTECH
POSCO ENERGY CO., LTD.
POSCO TMC Co., Ltd.
POSCO AST
POSHIMETAL Co., Ltd.
Daew oo International Corporation
SeAH Changw on Integrated Special Steel
(formerly, POSCO Specialty Steel Co., Ltd.)
POSCO America Corporation
POSCO Canada Ltd.
POSCO Asia Co., Ltd.
Qingdao Pohang Stainless Steel Co., Ltd.
POSCO JAPAN Co., Ltd.
POSCO MEXICO S.A. DE C.V.
POSCO Maharashtra Steel Private Limited
Others
Total
42
94,790
69,314
13
49,456
17,326
27,429
44,281
1,269
164,029
71,967
92
67
103
4,283
2,809
30
54
14
3,178
72,009
94,882
69,381
116
53,739
20,135
27,459
44,335
1,283
167,207
15,202
920
12,564
57,610
8
Accounts
payable
Others
Total
41,878
867
5
70,823
28,432
9,890
117
2,458
12,846
210
1,936
5,425
43
17,864
1,962
115
3,364
1
41,878
16,069
1,941
77,168
41,039
85,364
1,962
232
5,822
12,846
219
822
201,823
202,645
4,800
140
184
5,124
57,164
197,104
14,748
42,692
96,800
364,899
140,282
1,382,460
221
41
89
7,714
58,769
351,254
57,164
197,325
14,789
42,781
96,800
372,613
199,051
1,733,714
10,995
344
15,150
117,593
1,511
4,534
1,552
68,965
244,228
29,076
59,970
1,511
4,534
10,995
1,896
113,191
421,791
219
258
477
125
4,235
18
4,378
344
4,235
276
4,855
7,017
1,396
8,413
-
-
7,017
1,396
8,413
1,382,937
355,632
1,738,569
126,006
244,228
59,970
430,204
Associates and joint ventures
SNNC
LLP POSUK Titanium (* 1)
Others
W
Others
Payables
Trade accounts
and notes
payable
(*1) Other receivables include a loan of USD 3.85 million lent to associates of the Company.
(d) For the nine-month periods ended September 30, 2015 and 2014 details of compensation to key
management officers were as follows:
(in m illions of Won)
Short-term benefits
Long-term benefits
Retirement benefits
September 30, 2015 September 30, 2014
26,218
8,683
8,802
43,703
W
W
23,456
9,262
5,354
38,072
Key management officers include directors (including outside directors), and executive officials who
have significant influences and responsibilities in the Company’s business and operations.
47
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
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, 2015, 69 million tons of iron ore and 27 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, 2015, 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 24.50 million, USD 8.25 million and USD 6.49 million. The borrowings are related to the
exploration of gas hydrates in Aral Sea, Uzbekistan, the exploration of gas hydrates in NamanganChust and the exploration of gas hydrates in Western Fergana-Chenavard, respectively. The
repayment of the borrowings depends on the success of the projects. The Company is not liable
for the repayment of full or part of the money borrowed if the respective projects 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, 2015, the remaining balance of the borrowings
amount to USD 12.88 million.
(b) As of September 30, 2015, the Company has provided two blank checks to Korea Resources
Corporation as collateral for long-term domestic borrowings, and has provided six blank
promissory notes and three blank checks to Korea National Oil Corporation as collateral for longterm foreign currency borrowings.
48
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
(c) Litigation in progress
1) Civil lawsuits with Nippon Steel & Sumitomo Metal Corporation
In April 2012, Nippon Steel & Sumitomo Metal Corporation (“NSSMC”) filed a civil lawsuit in
the Tokyo District Court of Japan against POSCO and POSCO Japan Co., Ltd., a subsidiary of
POSCO, alleging violation of trade secrets and seeking prohibition on production and sales of
grain oriented electrical steel sheets and compensation from the Company of W982.8 billion.
Simultaneously, NSSMC filed a civil lawsuit in the New Jersey federal court, United States,
against POSCO and POSCO America Corporation, a subsidiary of POSCO, claiming infringement
of patent rights related to the production of grain oriented electrical steel sheets. In connection
with this, the Company has filed a lawsuit in Korea seeking confirmation of non-existence of debt.
On September 30, 2015, pursuant to the agreement between POSCO and NSSMC, the pending
lawsuit filed by NSSMC in Japan was withdrawn, along with all related lawsuits in Korea and the
United States of America, in the settlement amount of W299 billion from POSCO to strengthen the
strategic partnership between the two companies. On the same date, the Company paid W299
billion as the settlement to NSSMC, therefore all litigations were withdrawn and closed.
2) Other lawsuits and claims
The Company is involved in 37 litigations for alleged damages aggregating to W155.6 billion as of
September 30, 2015 which arose in the ordinary course of business. The Company has
recognized provisions for 1 of 37 litigations amounting to W0.4 billion by estimating the outcome
of such litigations reasonably. Except 1 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, 2015.
(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.
49
POSCO
Notes to the Condensed Separate Interim Financial Statements, Continued
As of September 30, 2015
(Unaudited)
33. Cash Flows from Operating Activities
Changes in operating assets and liabilities for the nine-month period ended September 30, 2015 and
2014 were as follows:
(in millions of Won)
September 30, 2015
Trade accounts and notes receivable, net
W
Other accounts receivable
Inventories
Prepaid expenses
Other short-term assets
Long-term guarantee deposits
Other long-term assets
Trade accounts payable and notes payable
Other accounts payable
Accrued expenses
Advances received
Withholdings
Unearned revenue
Other short-term liabilities
Derivatives liabilities
Payment of severance benefits
Plan assets
Other long-term liabilities
W
305,594
186,529
643,641
(20,977)
(206)
(202)
401
(107,093)
(114,270)
(39,682)
(10,305)
31,820
17,357
(35,944)
(69,696)
5,461
792,428
50
September 30, 2014
268,038
8,935
(222,399)
(21,391)
(1,056)
(254)
180,452
(143,016)
100,329
(12,341)
11,112
(307)
(3,532)
(6,611)
(64,450)
(41,590)
(3,000)
48,919