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Form 6-K POSCO HOLDINGS INC. For: Mar 29

March 29, 2022 6:39 AM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form 6-K

 

 

REPORT OF FOREIGN PRIVATE ISSUER

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

UNDER THE SECURITIES EXCHANGE ACT OF 1934

For the month of March, 2022

Commission File Number: 1-13368

 

 

POSCO HOLDINGS INC.

(Translation of registrant’s name into English)

 

 

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

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

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

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

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

 

 

 


POSCO is furnishing under cover of Form 6-K:

Exhibit 99.1: An English translated documents of POSCO’s Business Report for the year 2021.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

      POSCO HOLDINGS INC.
      (Registrant)
Date: March 29, 2022     By  

/s/ Chung, Kyung-Jin

      (Signature)
      Name: Chung, Kyung-Jin
      Title: Executive Vice President
Table of Contents

Exhibit 99.1

 

LOGO

BUSINESS REPORT

(From January 1, 2021 to December 31, 2021)

THIS IS AN ENGLISH TRANSLATION OF THE BUSINESS REPORT ORIGINALLY PREPARED IN THE KOREAN LANGUAGE (IN SUCH FORM AS REQUIRED BY THE KOREAN FINANCIAL SERVICES COMMISSION). THIS ENGLISH TRANSLATION IS NOT OFFICIAL AND IS PROVIDED FOR INFORMATION PURPOSES ONLY.

UNLESS EXPRESSLY STATED OTHERWISE, ALL INFORMATION CONTAINED HEREIN IS PRESENTED ON BOTH CONSOLIDATED AND NON-CONSOLIDATED BASIS IN ACCORDANCE WITH THE KOREAN-INTERNATIONAL FINANCIAL REPORTING STANDARDS (K-IFRS) WHICH DIFFER IN CERTAIN RESPECTS FROM GENERALLY ACCEPTED ACCOUNTING PRINCIPLES IN CERTAIN OTHER COUNTRIES, INCLUDING THE UNITED STATES. WE HAVE MADE NO ATTEMPT TO IDENTIFY OR QUANTIFY THE IMPACT OF THESE DIFFERENCES.


Table of Contents

BUSINESS REPORT

(From January 1, 2021 to December 31, 2021)

To:    Korean Financial Services Commission and Korea Exchange

 

/s/ Kim, Hag-Dong

Kim, Hag-Dong
Representative Director & Vice Chairman,
POSCO HOLDINGS INC. (Former POSCO)

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

Telephone: +82-54-220-0114

 

/s/ Chung, Kyung-Jin

Chung, Kyung-Jin
Executive Vice President
POSCO HOLDINGS INC. (Former POSCO)

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

Telephone: +82-54-220-0114

 

2


Table of Contents

TABLE OF CONTENTS

 

I.

 

Overview

     4  

II.

 

Business

     10  

III.

 

Financial Statements

     33  

IV.

 

Corporate Governance

     37  

 

LOGO

Independent auditors’ reports on both Consolidated and Separate financial statements were filed to the SEC respectively on March 16, 2022.

 

   

Report for consolidated financial statements :

File/Film Number    001-13368    22743735

 

   

Report for separate financial statements :

File/Film Number    001-13368    22743748

As of the date of submission of this business report is after the Vertical Spin-off whereas the report was prepared as of the end of FY 2021

 

3


Table of Contents

I. OVERVIEW

1. Scope of Business

 

A.

POSCO (the “Company” as of December 31, 2021)

The Company’s business scope is as follows :

 

Business
 

(1)   To manufacture, market, promote, sell and distribute iron, steel and rolled products;

 

(2)   To engage in harbor loading and unloading, transportation and warehousing businesses;

 

(3)   To engage in the management of professional athletic organizations;

 

(4)   To engage in the supply of gas and power generation as well as in the distribution business thereof and in the resources development business;

 

(5)   To engage in leasing of real estate and distribution businesses;

 

(6)   To engage in the supply of district heating business;

 

(7)   To engage in marine transportation, processing and sales of minerals within or outside of Korea;

 

(8)   To engage in educational service and other services related to business;

 

(9)   To engage in manufacture, process and sale of non-ferrous metal;

 

(10)  To engage in technology license sales and engineering business; and

 

(11)  To engage in all other conducts, activities or businesses which are related, directly or indirectly, to the attainment and continuation of the foregoing purposes

 

B.

POSCO Enterprise Group

 

(1)

Name of the Enterprise Group: POSCO (as of December 31, 2021)

 

(2)

Companies Belonging to the Enterprise Group

POSCO, POSCO CHEMICAL CO., LTD, POSCO INTERNATIONAL Corporation, POSCO COATED & COLOR STEEL Co., Ltd., POSCO ICT, POSCO M-TECH, Busan E&E Co., Ltd., SNNC, eNtoB Corporation, UITrans LRT Co. Ltd., POSCO O&M Co., Ltd., POSCO Humans, POSCO ENGINEERING & CONSTRUCTION., LTD., POSCO Research Institute, POSCO A&C, TANCHEON E&E, Pohang Scrap Recycling Distribution Center Co., Ltd., POSCO NIPPON STEEL RHF JOINT VENTURE CO., Ltd., POSCO-Terminal Co., Ltd., POSCO ENERGY CO., LTD., Gale International Korea, LLC, POSCO Venture Capital Co., Ltd., Pohang Special Welding Co., Ltd., POSCO MITSUBISHI CARBON TECHNOLOGY, Samcheok Blue Power Co.,Ltd. (By change of name from POSPower Co., Ltd), Songdo Posco family Housing, POSCO Group University, POSCO Research & Technology, Songdo Development PMC (Project Management Company) LLC., Korea Fuel-Cell, POSCO SPS, P&O Chemical Co., Ltd., POSCO LITHIUM SOLUTION Co., Ltd, POSCO HY Clean Metal Co., Ltd., NEH Co., Ltd.

 

4


Table of Contents
(3)

Related Laws and Regulations

The Korea Fair Trade Commission has designated POSCO as an Enterprise Group subject to the limitations on Cross Shareholding and Debt Guarantee for Affiliates under the Monopoly Regulation and Fair Trade Act (the “MRFTA”).

LOGO Details

 

  (a)

Prohibition on Cross Shareholdings (Article 9 (1) of the MRFTA)

 

  (b)

Prohibition on Debt Guarantees for Affiliated Corporations (Article 10-2 of the MRFTA)    

 

  (c)

Prohibition on Shareholding of Venture Capitals for Subsidiaries (Article 9 (3) of the MRFTA)

 

  (d)

Limitation of Voting Rights of Financial or Insurance Companies (Article 11 of the MRFTA)

 

  (e)

Resolution of the Board of Directors and Publication on Large-Scale Intra-Group Transaction (Article11-2 of the MRFTA)

 

  (f)

Disclosure of Important Facts such as Unlisted Shares (Article 11-3 of the MRFTA)

 

  (g)

Disclosure of a corporate group (Article 11-4 of the MRFTA)

 

  (h)

Report on Status of Shareholding (Article 13 of the MRFTA)

2. Business Organization

A. Highlights of the Company’s Business Organization

 

   

As of the date of submission of this business report (after the Vertical Spin-off), the name and location of the company is as follow whereas the report was prepared as of the end of FY 2021

 

(1)

Location of the Headquarters, Steel Works and Offices

 

     

Before the Vertical Spin-off

(FY2021)

  

After the Vertical Spin-off

(From March 2, 2022~)

Name    POSCO    POSCO Holdings Inc.
     
Location of the Headquarters    6261 Donghaean-ro (Goedong-dong), Nam-gu, Pohang-si, Gyeongsangbuk -do, Korea    POSCO Center, 440 Teheran-ro, Gangnam-gu, Seoul, Korea, 06194
   
Steel Works and Offices   

(a)   Pohang Steel Works: 6262 Donghaean-ro (Dongchon-dong), Nam-gu, Pohang-si, Gyeongsangbuk-do, Korea

 

(b)   Gwangyang Steel Works: 20-26 Pokposarang-gil (Geumho-dong), Gwangyang-si, Jeollanam-do, Korea

 

(c)   Overseas Offices: In order to support international businesses, the Company operates five overseas offices as follows:

 

United Arab Emirates(Dubai), Brazil(Rio de Janeiro), Argentina(Jujuy), European Union(Germany), and Australia(Perth).

 

5


Table of Contents
(2)

Major Changes in the Board of Directors (as of March 12, 2021)

 

  (a)

Inside Directors

 

   

Re-appointment :

Choi, Jeong-Woo (Representative Director & CEO), Kim, Hag-Dong (President), Chon, Jung-Son (Senior Executive Vice President), Jeong, Tak (Senior Executive Vice President)

 

   

Newly-appointed :

Chung, Chang-Hwa (Senior Executive Vice President)

 

  (b)

Outside Directors

 

   

Newly-appointment : Yoo, Young-Sook, Kwon, Tae-Kyun

 

  (c)

Audit Committee Member

 

   

New member : Kim, Sung-Jin (Outside director)

 

(3)

Changes of the Major Shareholders of POSCO

 

  (a)

Since January 30, 2007, National Pension Service holds the largest number of common shares of POSCO.

 

  (b)

For further reference, please refer to the public disclosures of changes in common shares of the largest shareholder on Financial Supervisory Service website (http://dart.fss.or.kr) with the filing dates given below:

January 30, 2007, July 27, 2007, January 29, 2008, July 25, 2008, January 21, 2009, March 2, 2009, July 22, 2009, October 9, 2009, January 26, 2010, July 20, 2010, January 28, 2011, July 22, 2011, January 31, 2012, August 1, 2012, February 1, 2013, August 1, 2013, January 14, 2014, January 23, 2014, July 29, 2014,January 23, 2015, August 5, 2015, January 6, 2016, January 26, 2016, March 15, 2016, April 12, 2016, July 4, 2016, July 5, 2016, July 21, 2016, October 7, 2016, October 11, 2016, January 10, 2017, April 10, 2017, July 12, 2017, October 13, 2017, January 10, 2018, April 11, 2018, July 9, 2018, October 10, 2018, January 9, 2019, April 9, 2019, July 9, 2019, October 8, 2019, January 8, 2020, February 10, 2020, March 11, 2020, April 7, 2020, May 8, 2020, June 3, 2020, July 7, 2020, August 6, 2020, September 7, 2020, and October 8, 2020, November 4, 2020, December 4, 2020, January 7, 2021, February 4, 2021, March 5, 2021, April 6, 2021, May 6, 2021, June 2, 2021, July 6, 2021, July 28, 2021, August 9, 2021, August 12, 2021, October 8, 2021

 

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Table of Contents

B. POSCO’s Merger, Acquisition and Handover of Businesses

 

(1)

March 2016 : Small scale merger of POSHIMETAL Co., Ltd into POSCO

 

(2)

May 2016 : Small scale merger of POSCO Green Gas Technology into POSCO

 

(3)

January 2019 : Small scale merger of POSCO Processing & Service Co., Ltd into POSCO

 

(4)

September 2019 : Small scale merger of By-Product Hydrogen Generation Business from POSCO ENERGY into POSCO after spin-off

 

(5)

March 2022 : Completion of Vertical Spin-off

 

Classification

  

Company Name

  

Business Unit

Surviving Company    POSCO Holdings Inc.    Development of future business portfolios and management of group’s businesses
New Company    POSCO    Production and sale of steel

C. Major Changes in Production Facilities

Refer to the ‘II. Business (5. Production and Facilities)’

3. Equity Capital

A. New Issuance of Registered Common Stock

[None]

4. Other Information Regarding Shares

A. Total Number of Shares

 

     (As of December 31, 2021)  
Authorized Shares    Issued Shares                  

200,000,000

     87,186,835              

 

  LOGO

Currency of the Republic of Korea is Korean Won (“KRW”).

 

  LOGO

Par Value: KRW 5,000 per share

 

7


Table of Contents

B. Treasury Stock Holding and Cancellation

 

                                      (As of December 31, 2021)  
Method of Purchase    Type   

Beginning

Balance

     Increased      Decreased      Cancelled     

Ending

Balance

 

Direct

          7,071,194        —          —          —          7,071,194  

Trust Contract

   Common Stock        4,100,169        4,879,969        4,490,069        —          4,490,069  

Total

          11,171,363        4,879,969        4,490,069        —          11,561,263  

 

*

The trust contract to engage in repurchases of treasury stocks was entered on April 10, 2020 and was terminated on April 12, 2021. Further details with regard to the issuance of exchangeable bonds and the decision to dispose treasury stocks are publicized on Financial Supervisory Service and Korea Exchange on August 13, 2021.

**

Aforementioned number of treasury stocks includes 2,980,162 treasury stocks which are subject to the exchange of exchangeable bonds issued by the company on September 1, 2021. The treasury stock subject to this exchange is finalized at the time the exchange right is exercised and is currently deposited with the Korea Securities Depository.

***

The company has disposed of 223,605 treasury stocks to the employee stock ownership association on February 25, 2022.

5. Voting Rights

 

     (As of December 31, 2021)
Classification    Number of Common Shares      Remarks

(1) Number of Issued Shares

     87,186,835      —  

(2) Shares without Voting Rights

     11,561,263     

Treasury stock and

trust holding

(3) Shares with Voting Rights

     75,625,572    —  

 

*

The above “(3) Shares with Voting Rights” is the number of shares based on holding voting rights as of December 31, 2021.

6. Earnings and Dividends

 

            (In millions of KRW)
      2021      2020      2019

(Consolidated) Profit*

     6,617,239      1,602,148      1,835,087

(Separate) Profit

     5,181,227      965,863      1,175,712

Earnings per Share (Consolidated, KRW)

     85,377      20,165      22,823

Cash Dividend Paid

     1,285,635      620,287      801,156

Pay-out Ratio (Consolidated, %)

     19.4        38.7      43.7

Dividend per Share (KRW)

     17,000      8,000      10,000

Dividend Yield (%)

     6.0        3.0      4.1

 

8


Table of Contents
*

(Consolidated) Profit : Profit attributable to owners of the controlling company

**

Earnings per Share is based on consolidated financial statement prepared in K-IFRS

***

The above Cash Dividend Paid, Dividend per Share and the related indexes include the year-end cash dividend, KRW 5,000/share, which will be approved at the 54th Ordinary General Meeting of Shareholders.

7. Stock Prices and Trading Volumes

The stock prices and trading volumes of POSCO for the last 6 months are as follows.

A. The Korean Stock Market

 

                          (KRW/share, In thousands of shares)  
     

July

2021

    

August

2021

    

September

2021

    

October

2021

    

November

2021

    

December

2021

 

Common share

   Highest Price      367,500      360,000      375,000      328,000      300,500      295,000
   Lowest Price      330,000      308,000      330,000      296,000      261,000      274,500
   Average Price      346,227      332,048      351,342      315,868      281,795      283,932

Trading volume

   Daily highest      838      886      651      791      755      1,158
   Daily lowest      198      263      238      244      220      159
   Monthly      9,709      9,340      8,096      7,259      8,417      9,557  
B. New York Stock Exchange                     
                          (USD/ADS*, In thousands of ADS*)  

 

  

July

2021

    

August

2021

    

September

2021

    

October

2021

    

November

2021

    

December

2021

 

American Depositary Share (ADS)

   Highest Price      79.8      77.2      79.2      69.5      63.5      61.8
   Lowest Price      71.4      65.7      69.0      63.3      55.2      57.5
   Average Price      75.4      71.4      74.3      67.0      59.6      60.0

Trading volume

   Daily highest      378.2      372.7      331.4      258.9      791.9      334.0  
   Daily lowest      85.3      109.2      132.3      78.8      112.8      98.8
   Monthly      3,126      4,003      4,028      3,546      5,176      4,080

 

*

ADS : American Depositary Share representing one-fourth of one share of Common Stock

 

9


Table of Contents

II. BUSINESS

1. Overview

A. Classification of Business

We classify our business into four segments:

Steel, Trading, Engineering & Construction, and Others.

B. Summary of Financial Status of Segment

 

                          (In millions of KRW)  
Segment    2021      2020      2019  
   Sales      Operating
Income (Loss)
     Sales      Operating
Income (Loss)
     Sales      Operating
Income (Loss)
 

Steel

     41,093,405      8,123,117      28,892,877        1,372,852        32,078,453        2,786,517  

Trading

     25,065,608      488,884      19,345,222        394,954        22,157,131        542,724  

Engineering & Construction

     6,398,366      424,085      6,576,170        385,048        6,944,629        338,865  

Others

     3,774,966      202,003      2,978,527        250,181        3,186,635        200,749  

Total

     76,332,345      9,238,089      57,792,796        2,403,035        64,366,848        3,868,855  

2. Business Status of Segments

A. Steel

(1) Summary of Business

There are 62 consolidated companies in the steel segment, including 2 domestic companies including POSCO and POSCO C&C, and 60 overseas companies including POSCO (Zhangjiagang) Stainless Co., Ltd. in China and overseas processing centers. POSCO produces steel materials such as hot rolled, cold rolled and stainless steel at Pohang Works and Gwangyang Works. POSCO C&C is a company specializing in manufacturing surface-treated steel products, POSCO (Zhangjiagang) Stainless Co., Ltd., is a stainless steel sheet manufacturer and seller, and there are other overseas processing centers that process and sell steel materials.

The steel industry is a fundamental industry that has taken pivotal roles in the national economic development since the 1970s by supplying basic steel materials to demanding industries such as automobiles, shipbuilding, home appliances, construction, etc. The steel industry is a capital and technology-intensive industry that requires enormous initial investments.

 

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World crude steel production has increased every year since 2017 due to China’s continued implementation of its economic stimulus policy. Though the global crude steel production has decreased in 2020 affected by COVID-19, it has increased by +4.6% year-on-year to 1.951 billion tons in 2021 due to the economic recovery. Korea’s crude steel production also increased by +5.2% year-on-year to 71 million tons. Global steel demand declined in the first half of 2020 affected by the spread of COVID-19. However, the steel demand showed a recovery mainly in China from the second half of 2020 as the demand industry recovered. In 2021, there was a difference depending on the pace of recovery by country and industry, but overall demand growth remained solid.

The Korean steel market is tariff-free, and especially within the Northeast Asian region, there is little difference in logistics costs among Korea, China and Japan, so it can be viewed as an open market. All iron ore and coking coal that are the main raw materials for steel manufacturing, are imported. In order to secure stable raw materials sourcing, the company is continuously increasing purchases through raw material development investments by acquiring shares of overseas raw materials companies. Environmental regulations for the steel industry are being strengthened. To protect the environment, POSCO has continuously invested in environmental facilities and has been actively responding to future environmental changes such as low-carbon and green growth by commercializing the world’s first eco-friendly steel manufacturing method, FINEX and so on.

In the steel industry, automobiles, shipbuilding, and construction are the main demand industries, and steel products are used as raw materials for these demand industries. In terms of sales, the proportion of domestic sale is 60% of total sales and export sales are around 40%, and by export region, the proportion of China, Southeast Asia, and Japan is high. POSCO maintains order based production and sales system, and to secure stable sales, the proportion of direct sales to customers in domestic sales is maintained at about 60%. Under holding company system, the company will focus on the following management activities: First, POSCO Holdings will strengthen its steel business‘s future steel competitiveness by creating an eco-friendly steel base. Second, POSCO Holdings will step up its efforts to make secondary battery material business as a global top-tier by supporting its quantitative growth and securing differentiated competitiveness. Third, the company will cultivate its hydrogen business abilities in line with the market growth and expand venture investment in order to discover the group’s future growth engines. Fourth, POSCO Holdings will shift the direction of the group businesses such as Energy/Construction/Agri-Bio to promote eco-friendly value and expand growth opportunities.

 

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(2) Market Share

 

                   (Millions of Tons, %)
      2021      2020      2019
Category    Production      Market share      Production      Market share      Production      Market share

Crude Steel Production

     70.6        100      67.1      100      71.4    100%  

POSCO

     38.3        54.2      35.9      53.5      38.0    53.2%  

Others

     32.3        45.8      31.2      46.5      33.4    46.7%  

 

LOGO

Source: World Steel Association (www.worldsteel.org)

B. Trading

(1) Market Share

 

            (Millions of US Dollars)
Category    2021      2020      Growth Rate

All Trading Companies in Korea

     644,438        512,498      25.74%  

POSCO International Corp.

     8,741        5,341      63.66%  

 

LOGO

Source: Korea International Trade Association

(2) Summary of Businesses

POSCO International and its consolidated subsidiaries engage in three major businesses: trading, energy and others. In addition, POSCO International maintains a global network of over 80 subsidiaries and branches in major overseas regions. In the case of the trading business, POSCO International has been actively developing and expanding new businesses in fields such as secondary battery material business, agro-commodities and LNG trading based on the know-how accumulated over a long period of time in the traditional trading business and through its vast overseas networks. In the energy business, POSCO International conducts businesses such as natural gas and crude oil development, LNG infrastructure, natural resources and power generation infrastructure.

In addition to trading and energy business, POSCO International is actively exploring new business opportunities by establishing task force teams of four industries(smart farm, eco-friendly materials, green mobility, hydrogen) that have great growth potential. Meanwhile, the company strengths business basis of those new industries and creates synergy effects by supporting marketing of small and medium-sized domestic companies with its abundant trade experiences and broad networks around the world.

C. Engineering & Construction

POSCO E&C engages in mainly 3 businesses: plant, infrastructure and construction industry.

Plant business mainly focused on constructing integrated steel mills but it will be more focusing on electric furnace and investment of hydrogen-based reduction ironmaking process in line with global eco-friendly trend. In infrastructure business, the investment of eco-friendly facilities, expressways and railroads is expected to increase followed by government’s green new deal policy and wide-area transportation 2030 policy. In the construction business, based on its know-how in the construction of skyscrapers and commercial complexes, POSCO E&C involves in a new city and private complex development projects.

 

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D. Others

(1) POSCO ENERGY

POSCO ENERGY started its commercial operation in February, 1972 as the only privately-owned power plant in Korea. Since the early 1990’s, POSCO ENERGY continuously remodeled and built additional power plants meeting the increased demand for electricity in Korea. POSCO ENERGY acquired the LNG terminal business from POSCO in 2019, providing an opportunity to expand the LNG value chain. The LNG terminal business operates stable business structure through businesses such as tank rental, small scale LNG business, and ship trial run. POSCO ENERGY plans to secure stable profit base through the expansion of the LNG terminal in the future and grow into a general energy company focused on gas and power.

POSCO Energy has established a new fuel cell business division since 2007 to carry out projects such as manufacturing fuel cell facilities, marketing, long-term O&M services, and operating direct fuel cell power plants. The company has divided this specific sector and established Korea Fuel Cell Co., Ltd in order to strengthen business specialty and improve management efficiency.

(2) POSCO ICT

Based on the competitiveness in ICT, POSCO ICT has expanded Smart Factory and provided IT solutions to POSCO and POSCO subsidiaries. POSCO ICT has expanded Smart Factory based on the world’s first continuous process platform “PosFrame” and next-generation production optimization system “MES 3.0”. POSCO ICT has been actively applying smart technology for strategic businesses in manufacturing, logistics, trade, and energy sectors, such as building MES at the POSCO CHEMICAL’s anode and cathode material factory, spreading the Smart Management of POSCO International, and spreading the Intelligent Power Plant of POSCO Energy in order to promote the digital transformation of POSCO subsidiaries and other businesses.

(3) POSCO CHEMICAL

POSCO CHEMICAL operates mainly 3 businesses: refractory, quicklime & chemical and energy material. In the refractory business, POSCO CHEMICAL produces and maintains refractories. In the quicklime & chemical business, POSCO CHEMICAL produces quicklime and chemical products such as coal tar and light oil. In the energy material business, POSCO CHEMICAL provides cathode and anode materials which are the main components for secondary cells: cathode, anode, electrolyte and separation membrane. Due to environment-friendly policy with less carbon emission worldwide, demands for Energy Storage System and Electric Vehicle are expected to grow continuously.

 

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The company’s cathode material production capacity is expected to increase from 61 thousand tons/year in 2021 to 106 thousand tons/year in 2025. Furthermore, the production capacity of anode materials is expected to increase significantly from 40 thousand tons/year in 2021 to 275 thousand tons/year in 2025.

(4) POSCO M-TECH

POSCO M-TECH is a specialized supplier of steel products packaging and steel supplementary materials such as aluminum deoxidizers. In the case of steel products packaging, POSCO M-TECH continuously develops packaging automated molding machines and applies environment-friendly packaging materials. In addition, aluminum deoxidizers engage in primarily 3 types : Pellet, Mini-Pellet and Ingot. POSCO M-TECH has expanded the sales of aluminum deoxidizers in overseas markets.

 

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3. Key Products

A. Sales of Key Products (The Year 2021)

 

              

(In hundred millions of KRW, %)

 

 
         
Business Area    Item    Specific Use    Total Sales     Ratio  

Steel

   Hot-rolled Product (HR)    Steel pipe, Shipbuilding, etc.      125,297       19.7 %
   Cold-rolled Product (CR)    Automobile , Home appliances, etc.      199,285       31.4 %
   Stainless Steel Products    Tableware, pipes, etc.      122,434       19.3 %
   Others    Plates, Wire rods, etc.      188,473       29.6 %
   Gross Sum      635,489       100.0
   Deduction of Internal Trade      (224,555        
   Sub Total      410,934          

Trading

   Steel, Metal      363,486       80.3 %
   Chemical, Strategic Item, Energy      40,887       9.0 %
   Others      48,531       10.7 %
   Gross Sum      452,904       100.0 %
   Deduction of Internal Trade      (202,248        
   Sub Total      250,656          

Engineering &

Construction

   Domestic Construction    Architecture      35,633       48.1 %
   Plant      13,272       17.9 %
   Civil Engineering      6,771       9.1 %
   Others      1,763       2.4 %
   Overseas Construction      8,097       10.9 %
   Owned Construction      7,736       10.4 %
   Others      853       1.2 %
   Gross Sum      74,125       100.0 %
   Deduction of Internal Trade      (10,141        
   Sub Total      63,984          

Others

   Electricity Sales, etc.      67,879          
   Deduction of Internal Trade      (30,129        
   Sub Total      37,750          

Total Sum

     763,323          

 

15


Table of Contents

B. Price Movement Trends of Key Products

 

     (In thousands of KRW/ Tons, KRW/kWh)

 

 
         
Business Area    Products    2021      2020      2019  

Steel

   Hot-rolled Product (HR)      970        622        695  
   Cold-rolled Product (CR)      1,035        759        800  
     

Others

   Electric Power      98        72        94  
   Refractory      913        965        1,073  
   Lime                  104                    106                    111  

 

LOGO

Trade and Engineering & Construction businesses are not reflected on the table above due to difficulties in measuring the price movement trend.

[Steel]

 

(1)

Criteria for Calculation

 

  (a)

Subjects for Calculation: Unit sales prices of the standard hot-rolled product and cold-rolled product

 

  (b)

Calculation Method and Unit: The average price of each product based on its total sales including the freight costs during the given period.

 

(2)

Factors of Price Changes

Since 2016, prices have continued to rise, but after a slight decline in 2019 as the domestic and overseas demand industry worsened, prices fell sharply due to COVID-19 in 2020.

In 2020, sales prices of major products fell year-on-year due to the contraction of the steel demand industry affected by COVID-19. In contrast, rapid recovery of the demand industry and tight steel supply condition influenced by Chinese government’s steel production control and export regulation policies pushed the steel products’ price up sharply in 2021.

[Others]

 

(1)

Criteria for Calculation

 

  (a)

Electric Power = Price of electric power / Total amount of power generated

 

  (b)

Refractory and lime: Average sales price including freight cost

 

16


Table of Contents

4. Major Raw Materials

A. Current Status of Major Raw Materials

 

                   

(In hundred millions of KRW)

 

Business Area    Type of Purchase    Item    Specific Use   

Purchase Amount

(Portion, %)

    Remarks
Steel    Raw Materials   

Materials for

Iron-making

  

Iron Ore for Blast

Furnaces

    

172,485

(60.9

 

  Iron Ore, Coal
   Sub-materials   

Sub-materials for

Iron-making,

Steelmaking

    

53,015

(18.7

 

 

Iron Material,

Alloy Iron,

Non-ferrous Metal,

Limestone, etc.

   Stainless Steel Materials   

Key Materials for

STS Production

    

57,610

(20.4

 

  Nickel, Ferrochrome, STS Scrap Iron, etc.
Engineering & Construction    Raw Materials    Ready-mixed Concrete    Construction of Structure     

1,783

(14.2


   
  

Steel

Reinforcement

   Strengthening Concrete     

2,202

(17.5

 

   
   Cable    Electricity Transfer     

207

(1.6


   
   Steel Pile    Foundation of Structure     

266

(2.1

 

   
   Others    Construction of Pipe and Structure etc.     

8,131

(64.6


   
Others    Raw Materials    LNG    Material for Power Generation     

12,788

(58.8


   
   Limestone    Production of Lime     

934

(4.3


   
   Others    Engineering business etc.     

8,024

(36.9

 

   

 

17


Table of Contents

B. Price Movement Trends of Major Raw Materials

 

         

(In thousands of KRW)

 

 
Business Area    Category    2021      2020      2019  

Steel

   Iron Ore(per ton)      169        120        102  
   Coal(per ton)      257        147        207  
   Scrap Iron(per ton)      563        348        347  
   Nickel(per ton)                  21,130                    16,254                    16,148  
Engineering &
Construction
  

Ready-mixed Concrete

(per m3)

     68        65        63  
  

Steel Pile

(per m)

     272        102        136  
  

Steel Reinforcement

(per kg)

     1        1        1  
  

Cable

(per m)

     1        1        1  

Others

  

LNG

(per ton)

     702        484        668  
  

Lime

(per ton)

     19        19        20  

 

18


Table of Contents

[Steel]

 

LOGO

Price Movement Trend of Major Raw Materials

 

(1) Iron Ore

 

                                                                 

(In US Dollars/ Tons)

 

 
                         
      ’21.4Q      ’21.3Q      ’21.2Q      ’21.1Q      ’20.4Q      ’20.3Q      ’20.2Q      ’20.1Q      ’19.4Q      ’19.3Q      ’19.2Q      ’19.1Q  

Trend of International Benchmark Price (Free On Board, “FOB”)

     96        148        188        158        126        110        88        83        80        92        94        77  

 

(2) Coal

 

                                                                 

(In US Dollars/ Tons)

 

 
                         
      ’21.4Q      ’21.3Q      ’21.2Q      ’21.1Q      ’20.4Q      ’20.3Q      ’20.2Q      ’20.1Q      ’19.4Q      ’19.3Q      ’19.2Q      ’19.1Q  

Trend of International Benchmark Price (FOB)

     369        264        137        127        109        115        118        155        140        161        203        206  

 

(3) Scrap Iron

 

                                                                 

(In US Dollars/ Tons)

 

 
                         
      ’21.4Q      ’21.3Q      ’21.2Q      ’21.1Q      ’20.4Q      ’20.3Q      ’20.2Q      ’20.1Q      ’19.4Q      ’19.3Q      ’19.2Q      ’19.1Q  

Trend of Purchase Price (Cost and Freight, “CFR”)

     527        500        497        443        361        289        254        274        270        290        312        325  

(4) Nickel

 

     ’21.4Q   ’21.3Q   ’21.2Q   ’21.1Q   ’20.4Q   ’20.3Q   ’20.2Q   ’20.1Q   ’19.4Q   ’19.3Q   ’19.2Q   ’19.1Q

Trend of London Metal Exchange (“LME”) Cash Price

  USD

8.99 /lb

USD

19,821/ton 

  USD

8.68 /lb

USD

19,125/ton 

  USD

7.87 /lb

USD

17,359/ton 

  USD

7.97 /lb

USD

17,570/ton 

  USD

7.23 /lb

USD

15,930/ton

  USD

6.45 /lb

USD

14,210/ton 

  USD

5.54 /lb

USD

12,215/ton 

  USD

5.77 /lb

USD

12,723/ton 

  USD

7.01 /lb

USD

15,450/ton 

  USD

7.05 /lb

USD

15,540/ton 

  USD

5.56 /lb

USD

12,258/ton 

  USD

5.61 /lb

USD

12,369/ton 

 

LOGO

LME : London Metal Exchange

 

19


Table of Contents

[Engineering and Construction]

(1) Criteria for Calculation

 

Products    Criteria for Calculation
Ready-mixed Concrete    Standard 25-210-15
Steel Pile    SPIRAL, 609.6, 9T, STP275, KS F 4602
Steel Reinforcement    SD400 D10mm
Cable    TFR-3, 0.6/1KV, 2.5SQ, 2C

[Others]

 

(1)

Criteria for Calculation

<POSCO ENERGY>

LNG: The average price between LNG purchased from Korea Gas Corporation and LNG purchased directly from foreign suppliers

<POSCO CHEMICAL>

Refractory and lime: Purchase prices including freight costs

 

20


Table of Contents

5. Production and Facilities

A. Production Capacity

[Steel]

 

         

(Thousands of Tons)

 

 
Business Area    Products    2021      2020      2019  

Steel

   Crude Steel                  45,330                    45,330                47,534  

[Others]

 

(Electric Power: MW/year, Lime: Thousands of Tons/year)

 

 
Business Area    Products    2021      2020      2019  

Power Generation

   Electric Power    Incheon      3,412        3,412        3,412  
   Gwangyang      —          —          284  
   Pohang      —          —          290  

Lime

   Lime                  2,190                    2,196                    2,190  

B. Production Result and Capacity Utilization Rate

[Steel]

(1) Production

 

         

(Thousands of Tons)

 

 
Products    2021      2020      2019  

Crude Steel

     42,964        40,579      42,948

Products

   Hot-Rolled Steel      9,243        9,128      8,739
   Plate      6,832        7,009      7,191
   Wire Rod      2,688        2,666      2,756
   Pickled-Oiled Steel      2,880        2,432      2,967
   Cold-Rolled Products      7,898        6,795      7,416
   Coated Steel      7,446        6,316      6,526
   Electrical Steel      1,032        826      819
   Stainless Steel      4,099        3,900      3,850
   Others      3,106        4,691      5,761
     Total                  45,224                    43,763                  46,025

 

LOGO

The amount of products is the aggregate amount of POSCO’s production and production of POSCO subsidiaries, which may include interested parties’ transactions.

 

21


Table of Contents

(2) Capacity Utilization Rate

 

                

(Thousands of Tons, %)

 

 
      Company    Capacity                  Production                  Utilization Rate              

Crude Steel

Production

   POSCO      40,680      38,263      94.1
   PT.KRAKATAU POSCO      3,000      3,135      104.5
   POSCO YAMATO VINA STEEL JOINT STOCK COMPANY      550      577      104.9
   POSCO (Zhangjiagang) Stainless Steel Co., Ltd.      1,100      989      89.9
   Total      45,330      42,964      94.8

 

LOGO

POSCO YAMATO VINA STEEL JOINT STOCK COMPANY had production capacity of crude steel 1,100 thousand tons/year: section steel 550 thousand tons/year and reinforcing bar 550 thousand tons/year. However, after the exit of the reinforcing bar business in November 2019, the current crude steel production capacity is 550 thousand tons/year.

LOGO

Trade and Engineering & Construction businesses are not reflected on the table due to difficulties in measuring capacity, production and utilization rate of such businesses.

[Others]

(1) Production Result

 

                

(Gwh, Thousands of Tons)

 

 
Business Area    Products                2021                  2020                  2019              

Power Generation

   Electric Power                  13,493        13,998        15,928  

Lime

   Lime                  2,477        2,345        2,542  

(2) Capacity Utilization Rate

 

                       

(Hour, %)

 

 
Business Area    Products               

2021            

Capacity            

    

2020            

Production            

     Utilization Rate              

Power Generation

   Incheon Power Plant                  8,760        5,516        63.0

 

                

(Thousands of Tons, %)

 

 
Business Area    Products                Capacity                  Production                  Utilization Rate              

Lime

   Lime                  2,190        2,477        111.7  

 

22


Table of Contents

C. Production Facilities

(1) The current status of production facilities

[Land]

 

                     

(In millions of KRW)

 

 
Business Area   Beginning Book            
Balance             
    Increased                 Decreased                 Depreciation                 Ending Book            
Balance             
 

Steel

    2,013,822     —       (169,543     —       1,844,279

Trade

    50,688     133,032     —       —       183,720

Engineering & Construction

    25,579     65     —         —       25,644

Others

    499,998     149,074     —       —       649,072

[Buildings]

 

                     

(In millions of KRW)

 

 
Business Area   Beginning Book            
Balance             
    Increased                 Decreased                 Depreciation                 Ending Book            
Balance             
 

Steel

    3,258,592     268,388     (26,297     (292,941     3,207,742

Trade

    374,644     125,241     (7,724     (30,114     462,047

Engineering & Construction

    81,702     11,705     —       (2,251     91,156

Others

    446,462     21,599     —       (24,556     443,505

[Structures]

 

                     

(In millions of KRW)

 

 
Business Area   Beginning Book            
Balance             
    Increased                 Decreased                 Depreciation                 Ending Book        
Balance             
 

Steel

    2,433,141     310,184     (26,126     (206,931     2,510,268

Trade

    2,071     25,025     —       (1,783     25,313

Engineering & Construction

    4,456     539     (54     (427     4,514

Others

    585,558     36,375     (1,104     (29,129     591,700

[Machinery and Equipments]

 

                     

(In millions of KRW)

 

 
Business Area   Beginning Book            
Balance             
    Increased                 Decreased                 Depreciation                 Ending Book            
Balance             
 

Steel

    14,864,929     2,106,344     (564,358     (2,156,684     14,250,231

Trade

    266,848     149,068     —       (42,562     373,354

Engineering & Construction

    5,071     1,706     (36     (1,013     5,728

Others

    1,720,459     301,210     (70,208     (160,618     1,790,843

 

23


Table of Contents

[Vehicles]

 

                     

(In millions of KRW)

 

 
Business Area   Beginning Book            
Balance             
    Increased                 Decreased                 Depreciation                 Ending Book            
Balance             
 

Steel

    22,881     29,171     (10,682     (10,122     31,248

Trade

    5,469     4,491     (2,331     (1,692     5,937

Engineering & Construction

    1,133     1,767     (1,145     (364     1,391

Others

    7,673     4,239     (1,336     (3,122     7,454

[Tools and Fixtures]

 

                     

(In millions of KRW)

 

 
Business Area   Beginning Book            
Balance             
    Increased                 Decreased                 Depreciation                 Ending Book            
Balance             
 

Steel

    54,166     28,434     (19,441     (18,203     44,956

Trade

    1,363     35,304     (7,106     (7,870     21,691

Engineering & Construction

    1,027     936     (228     (447     1,288

Others

    3,745     15,940     (5,412     (4,413     9,860

[Equipment]

 

                     

(In millions of KRW)

 

 
Business Area   Beginning Book            
Balance             
    Increased                 Decreased                 Depreciation                 Ending Book            
Balance             
 

Steel

    66,145     92,561     (22,072     (28,543     108,091

Trade

    25,298     14,618     (7,583     (9,917     22,416

Engineering & Construction

    3,532     10,006     (8,205     (1,626     3,707

Others

    32,484     10,814     (3,634     (7,716     31,948

[Financial Lease Assets]

 

                     

(In millions of KRW)

 

 
Business Area   Beginning Book            
Balance             
    Increased                 Decreased                 Depreciation                 Ending Book            
Balance             
 

Steel

    490,290     179,727     (16,637     (43,716     609,664

Trade

    95,191     134,521     (93,075     (48,462     88,175

Engineering & Construction

    82,876     78,034     (48,889     (40,443     71,578

Others

    105,343     46,462     (12,107     (41,369     98,329

 

24


Table of Contents

[Biological Assets]

 

                     

(In millions of KRW)

 

 
Business Area   Beginning Book            
Balance             
    Increased                 Decreased                 Depreciation                 Ending Book            
Balance             
 

Steel

    —       —         —       —         —    

Trade

    149,965     42,374     (28,393     (9,264     154,682

Engineering & Construction

    —       —         —       —         —    

Others

    —       —         —       —         —    

[Assets under Construction]

 

                     

(In millions of KRW)

 

 
Business Area   Beginning Book            
Balance             
    Increased                 Decreased                 Depreciation                 Ending Book            
Balance             
 

Steel

    1,438,271     2,049,509     (2,211,860     (164,906     1,111,014

Trade

    58,150     68,397     (64,863     (25,650     36,034

Engineering & Construction

    2,043     515     (397     —       2,161

Others

    119,076     711,682     (154,800     —       675,958

 

25


Table of Contents

(2) New Facility Establishment, Purchase, Etc.

(a) Investments under Construction

 

[Steel]

 

   (In hundred millions of KRW)

 

Company    Date    Project    Total
Investment
    

Invested

Amount

    

Amount
to Be

Invested

 

POSCO

   Expansion/ Establishment    October 2008
~ December 2026
  

P)  Establishment of #6 Coke plant

     17,121        7,236        9,885  
  

November 2021

~ December 2025

  

G)   Increased production capacity of electrical steel for eco-friendly vehicles in Gwangyang

     9,088        2        9,086  
  

Maintenance/

Improvement

   September 2015
~ October 2028
  

P)  Improvement of #2 Hot strip mill furnace

     11,579        3,259        8,320  
   August 2020
~ August 2022
  

G)   2nd renovation of #4 Furnace

     3,307        1,586        1,722  

POSCO SPS

  

Expansion/

Establishment

  

October 2020

~ January 2022

   Machinery, etc (HEV)      101        38        63  
  

February 2021

~ January 2022

   Cheonan factory      123        102        21  
  

June 2021

~ March 2022

   Machinery, etc.(Pohang)      152        3.0        149  

PT. KRAKATAU POSCO

  

Expansion/

Establishment

   July 2021
~ August 2022
   Establishment of SPM (Skin Pass Mill)      117      32      85

 

LOGO

P stands for Pohang Steel Works.

LOGO

G stands for Gwangyang Steel Works.

LOGO

Ongoing investments over KRW 10 billion as of December 31, 2020 are listed on the table.

 

[Others]

 

   (In hundred millions of KRW)

 

Company    Date    Project    Total
Investment
    

Invested

Amount

    

Amount

to Be
Invested

 

POSCO ICT

  

Establishment/

Expansion

  

January 2020

~ December 2021

   System improvement, IT facility purchase, etc.      194        14        180  
  

Establishment/

Expansion

  

January 2020

~ December 2021

  

Expansion of

SM server

     148        67        81  

POSCO CHEMICAL

  

Establishment/

Expansion

   July 2020
~ November 2022
   The 3rd stage of cathode material factory in Gwangyang      2,895        1,653        1,242  
  

Establishment/

Expansion

   November 2020
~ March 2024
   The 4th stage of cathode material factory in Gwangyang      2,758        869        1,889  
  

Establishment/

Expansion

   December 2021
~ August 2022
   The stage of cathode material factory in Pohang      272        240        32  
  

Establishment/

Expansion

   November 2019
~ December 2022
   The 2nd stage of production line up expansion in #2 anode material factory      1,651        1,225        426  
  

Establishment/

Expansion

   February 2020
~ May 2024
   Establishment of artificial graphite anode factory      2,177        1,142        1,035  
  

Establishment/

Expansion

   November 2019
~ December 2021
   Renovation of refractory factory for production increase      499        499        0  
  

Establishment/

Expansion

   October 2020
~ November 2022
   Facilities rationalization of refractory sintering plant in Pohang      327        21        306  

POSCO Energy

  

Establishment/

Expansion

   March 2020
~ December 2021
   Expansion of evaporator for Gwangyang LNG Terminal      360        304        56  
  

Establishment/

Expansion

   January 2021
~ June 2024
   Gwangyang LNG #6 Tank      1,437        341        1,096  

POSCO M-TECH

  

Establishment/

Expansion

   November 2021
~ June 2023
   Prevent safety risks and increase logistics/manpower management efficiency      113        0        113  

LOGO Ongoing investments over KRW 10 billion as of December 31, 2020 are listed on the table.

 

26


Table of Contents

6. Product Sales

 

[Steel]

 

   (In hundred millions of KRW)

 

Items    2021     2020     2019  

Domestic

   Hot-Rolled Products      70,117     39,663       42,605  
   Cold-Rolled Products      54,864     37,870       39,716  
   Stainless Steel      35,722     23,746       21,167  
   Others      94,737     63,111       77,026  

Export

   Hot-Rolled Products      55,180     37,368       41,064  
   Cold-Rolled Products      144,421     101,808       125,658  
   Stainless Steel      86,712     72,140       80,181  
   Others      93,736     66,877       70,667  

Total

   Gross Sum      635,489     442,583       498,084  
   Internal Transaction      (224,555     (153,654     (177,299
   Total                  410,934                 288,929                   320,785  

 

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[Trading]

 

   (In hundred millions of KRW)

 

Items    2021      2020      2019  

Domestic

   Merchandise      63,137      33,565        29,315  
   Product      8,757      2,028        5,120  
   Others      1,174      240        1,101  

Export

   Merchandise      137,741      75,922        69,347  
   Product      1,223      528        205  
   Others      207      1,191        638  

Trades among the 3 countries

     240,665      209,446        270,522  

Gross Sum

     452,904      322,920        376,248  

Internal Transaction

     (202,248      (129,468      (154,677

Total

                 250,656                  193,452                    221,571  

 

[Engineering & Construction]

 

   (In hundred millions of KRW)

 

Items    2021      2020      2019  

Domestic

   Building      35,633      42,761        44,681  
   Plant         13,272           12,887            10,953  
   Civil Engineering      6,771      6,177        6,098  
   Others      1,763      —          —    

Overseas

     8,097      7,089        7,190  

Own Construction

     7,736      4,866        5,712  

Other Subsidiary company sales

     853      2,320        2,246  

Gross Sum

     74,125      76,100        76,880  

Internal Transaction

     (10,141      (10,338      (7,434

Total

                  63,984                    65,762                      69,446  

 

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[Others]

 

    

(In hundred millions of KRW)

 

 
Items    2021      2020      2019  

Electric Power Sales

                 37,750                    29,785                    31,866  

7. Derivatives

We use forward exchange contracts to hedge against the exchange rate risk for foreign currency loans. As of December 31, 2021, we assessed the fair value of our currency swap contracts to be USD 0.5 billion(expiring August, 2023), USD 0.5 billion(expiring July, 2024) USD 0.5 billion(expiring November, 2022), USD 0.5 billion(expiring January, 2023), USD 0.44 billion(expiring January, 2025), and EUR 0.5 billion(expiring January, 2024).

The transaction gain of forward exchange contracts is KRW 16,300 million(expiring April, 2021). Also, we recognized KRW 261,963 million of valuation gain on currency swap contracts. The transaction gain of currency swap contracts is KRW 2,910 million.

8. Significant Contracts

 

Company   Contract   Date   Remarks

POSCO

  Small scale merger of POSCO Processing &Service   August 2018  

1)  Purpose: To increase operational efficiency

2)  Information: POSCO Processing & Service(POSCO P&S) is merged into POSCO

•   The merger ratio is 1 : 0.1456475 (POSCO : POSCO P&S)

•   POSCO will distribute its treasury shares to the shareholders of POSCO P&S, and new shares will not be issued.

3)  Conclusion of a contract: August 23, 2018

4)  Date of merger: January 1, 2019

5)  Registration of merger: February 1, 2019

  Small scale merger withBy-product Hydrogen Generation Business after spin-off from POSCO ENERGY   April 2019  

1)  Purpose: To increase operational efficiency

2)  Information: By-product Hydrogen Generation Business of POSCO ENERGY will be merged into POSCO

•   The merger ratio is 1 : 0.1145836 (POSCO : POSCO ENERGY)

3)  Conclusion of a contract: April 16, 2019

4)  Date of merger: September 1, 2019

5)  Registration of merger: September 9, 2019

  LNG Terminal Business Transfer Agreement   April 2019  

1)  Business transferee: POSCO ENERGY

2)  Conclusion of a contract: April 16, 2019

3)  Date of transfer: September 1, 2019

4)  Transfer amount : KRW 608,019 million

5)  Information: LNG Terminal Business of POSCO in Gwangyang will be transferred to POSCO ENERGY

 

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POSCO

International

Corporation

 

Investment on the 2nd stage development of

A-1 / A-3 block

in Myanmar gas field

  June 2018  

1)  Investment amount: KRW 511,709,005,500 (USD 473,235,000)

2)  Development period: August 1, 2017 ~ December 31, 2022

3)  Gas production schedule: By additionally developing Shwe gasfield and newly developing Shwe Phyu gasfield, production will start in 2021 from Shwe and 2022 from Shwe Phyu

4)  Other Information

•   Location: North-west offshore, Myanmar

•   This investment is the 2nd stage of development, which consists of 3 stages in Myanmar gas field development. The purpose of investment is to maintain current gas production level by completing more drilling and adding more production wells to current Shwe platform.

•   In July 2018, facility design and construction began, and production is scheduled to start in 2021 in Shwe and in 2022 in She Phyu. But the development period includes the duration of feasibility test and basic design from August 2017 to May 2018.

•   POSCO International Corporation : 51.0%

•   ONGC VIDESH(Oil and Natural Gas Corporation Videsh Limited) : 17.0%

•   MOGE(Myanmar Oil and Gas Enterprise): 15.0%

•   GAIL (India) Limited : 8.5%

•   KOGAS(Korea Gas Corporation): 8.5%

•   Investment size of USD 473,235 thousand, applying the exchange rate of 1USD=1,081.30 KRW, was disclosed on the date of the BOD resolution (May 31, 2018).

•   Detailed information and future timeline on this resource development investment is subject to change.

LOGO    Disclosure date : May 31, 2018 (Decision on natural resources investment)

  Small scale merger with Steel segment after spinoff from POSCO Processing &Service   November 2016  

1)  Purpose: Expanding the company’s capabilities in steel trading business and enhancing global competitiveness of the company’s steel business

2)  Information: POSCO International merges with the steel segment and others of POSCO P&S at the merger ratio of 1: 0.4387662, after the spin off from POSCO P&S

3)  Conclusion of a contract: November 4, 2016

4)  Date of merger: March 1, 2017

5)  Registration of merger: March 2, 2017

  Split-off of Domestic steel processing businesses   October 2019  

1)  Purpose : To specialize in steel processing business by splitting-off business division

2)  Method : Split-off

3)  Resolution date of Board of Directors : October 25, 2019

4)  Shareholders’ meeting for approval : March 30, 2020

5)  Date of Split-off : March 31, 2020

6)  Registration date of Split-off : April 3, 2020

 

Investment on the 3rd stage development of

A-1 / A-3 block

in Myanmar gas field

  June 2020  

1)  Investment amount: KRW 365,786,302,000

2)  Development period: September 1, 2019 ~ December 31, 2024

3)  Schedule : Installation Completion of low-pressure gas compression platform and commenced operation in 2024

4)  Other Information

•   Location: North-west offshore, Myanmar

•   This investment is the 3rd stage of development, which consists of 3 stages in Myanmar gas field development. The purpose of investment is to maintain current gas production level stably by installing low-pressure gas compression platform.

•   In the first quarter of 2021, the design and production of the equipment for this work will be started, and it is planned to start operation in 2024. The “(2) Development period” above is the period including the basic design progress period, September 2019 to September 2020.

•   Participation rate of each company in gas production and offshore pipeline transportation business

•   POSCO International Corporation : 51.0%

•   ONGC VIDESH(Oil and Natural Gas Corporation Videsh Limited) : 17.0%

•   MOGE(Myanmar Oil and Gas Enterprise): 15.0%

•   GAIL (India) Limited : 8.5%

•   KOGAS(Korea Gas Corporation): 8.5%

•   Investment size of USD 315,170 thousand, applying the exchange rate of 1USD=1,160.60 KRW, which is the date of the BOD resolution.

•   Detailed information and future timeline on this resource development investment is subject to change.

LOGO    POSCO International disclosure date :

September 22, 2020 (Decision on natural resources investment)

  Decision to acquire shares of Senex Energy (Australia)   December 2021  

1)  Purpose : To specialize in steel processing business by splitting-off business division

2)  Method : Cash acquisition

3)  Resolution date of Board of Directors : December 10, 2021

4)  Acquisition amount (Expected) : KRW 371,971,889,470

5)  Number of shares acquired (Expected) : 92,819,070 Shares

6)  Expected date of acquisition : March 31, 2022

7)  equity structure (after acquisition of shares) :

•   POSCO International : 50.1%

•   Hancock Energy (Australia) : 49.9%

 

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POSCO ENGINEERING

&

CONSTRUCTION  

  Small scale merger with POSCO ENGINEERING CO., LTD.   November 2016  

1)  Purpose: Production and development of land gas field in eastern Australia

2)  Information: POSCO E&C merges with POSCO Engineering at the merger ratio of 1:0, and POSCO E&C will not be issuing new shares

3)  Conclusion of a contract: November 23, 2016

4)  Date of merger: February 1, 2017

5)  Registration of merger: February 14, 2017

POSCO O&M   Small scale merger with Blue O&M and MegaAsset  

February

2019

 

1)  Purpose: Enhancing foundation of growth by improving management efficiency and creating synergies among businesses

2)  Information: POSCO O&M merges with Blue O&M and MegaAsset

3)  Date of merger: February 1, 2019

4)  Registration of merger: February 11, 2019

POSCO ENERGY   Contract of Shares Transfer  

July

2018

 

1)  Contract Parties: Nonghyup Bank(The third agent of KIAMCO PowerEnergy Private Special Assets Investment Trust), Doosan Heavy Industries & Construction, POSCO E&C, Industrial Bank of Korea(The first agent of Multi Asset POSPower Samcheok coal-fired private investment trust)

2)  Signed Date: July, August, 2018

3)  Contract Amount : KRW 343,706 million

4)  Information: Contract of shares transfer for disposal of 68.5%(July) and 2.5%(August) POSPower shares

  Spin-off
By-product Hydrogen Generation Business for merger into POSCO
  April 2019  

1)  Contract counterpart: POSCO

2)  Conclusion of a contract: April 16, 2019

3)  Date of merger: September 1, 2019

4)  Merger payment : KRW 1,163,692 million (No issuance of new shares from POSCO)

5)  Information : POSCO merges with Hydrogen Generation Business of POSCO ENERGY at the merger ratio of 1:0.1145836

  LNG Terminal Business Transfer Agreement   April 2019  

1)  Business transferor: POSCO

2)  Conclusion of a contract: April 16, 2019

3)  Date of transfer: September 1, 2019

4)  Transfer amount : KRW 608,019 million

5)  Information: LNG Terminal Business of POSCO in Gwangyang will be transferred to POSCO ENERGY

  Merger   May 2020  

1)  Contract counterpart : PSC Energy Global Co., Ltd.

2)  Signed date : May 26, 2020

3)  Date of merger : August 1, 2020

4)  Merger ratio : 1.0000000 : 0.0000000

5)  Information : POSCO ENERGY merges PSC Energy Global Co., Ltd., a wholly owned subsidiary of POSCO ENERGY

POSCO

YAMATO VINA STEEL JOINT STOCK COMPANY (Former, SS VINA JOINT STOCK COMPANY

  Joint stock contract with YAMATO KOGYO CO., LTD. and SIAM YAMATO STEEL CO., LTD. to improve business structure   March 2020  

1)  Purpose: To improve business structure by collaborating with leading company in section steels

2)  Information: POSCO’s 100% share of POSCO SS VINA changes to 51% YAMATO KOGYO CO., LTD. takes 30% of shares and SIAM YAMATO STEEL CO., LTD. takes 19% of shares.

3)  Conclusion of a contract: March 18, 2020

4)  Registration of joint stock company : April 28, 2020

 

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9. Research and Development

A. Research and Development (“R&D”) Organization

 

Business Area    Company    Organization

Steel

   POSCO    Steel Production and Technology Strategy Office
   Environmental Planning Office
   Technical Research Laboratories
   Steel Product Research Lab
   Process and Engineering Research Lab
   Automotive Steel Research Lab
   Steel Solution Research Lab
   LiB Materials Business Office
   POSCO COATED & COLOR STEEL Co,. Ltd.    Production & Marketing Strategy Office
   POSCO (Zhangjiagang) Stainless Co., Ltd.    R&D Center
   POSCO MOBILITY SOLUTION    STS Business Office R&D Group
   Core Business Office Product Process Development Group
     Core Business Office Mold Research Group

Engineering &

Construction

   POSCO Engineering & Construction,. LTD.    R&D Center
   POSCO A&C    R&D Center

Others

   POSCO ENERGY CO., LTD.    Energy Business Development Office
   POSCO ICT    R&D Center
   POSCO CHEMICAL    R&D Center
   Energy Material R&D Center
   POSCO M-TECH    R&D Center (Pohang)

B. R&D Expenses in 2021 (In millions of KRW)

 

Category    Business Area  
   Steel     Trade     Engineering &
Construction
    Others     Total  

Selling and Administrative Cost

     84,583       —         3,868       35,174       123,628  

Manufacturing Cost

     342,209       —         3,042       207       345,457  

R&D Cost (Intangible Assets)

     (5,503     —         1       11,814       6,312  

Total*

     421,289       —         6,911       47,195       475,397  

Government Subsidy

                     536       —         536  

R&D/Sales Ratio (%)**

     1.03     0.00     0.11     1.25     0.62

 

*

Total is R&D expenditure before deducting government subsidy

**

Total R&D expenses/ current sales volume x 100

 

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Table of Contents

III. Financial Statements

1. Consolidated Financial Statements

A. Summary

(In millions of KRW)  

 

Account    2021             2020             2019          
      As of December 31, 2021             As of December 31, 2020             As of December 31, 2019          

[Total current assets]

     46,621,631     35,830,815     34,842,374

Cash and cash equivalents

     4,775,166     4,754,644     3,514,872

Other receivables, net

     2,104,609     1,494,239     1,581,517

Other short-term financial assets

     13,447,717     11,709,209     8,996,049

Trade accounts and notes receivable, net

     10,061,982     8,120,619     9,078,351

Inventories

     15,215,098     9,051,790     10,920,320

Other current assets

     1,017,059     700,314     751,265

[Total non-current assets]

     44,849,983     43,256,158     44,216,287

Other receivables, net

     1,415,143     1,195,962     1,140,878

Other long-term financial assets

     2,119,674     1,561,807     1,669,389

Investments in associates and joint ventures

     4,514,647     3,876,249     3,927,755

Property, plant and equipment, net

     29,596,698     29,400,141     29,925,973

Intangible assets, net

     4,166,309     4,449,432     4,908,473

Other non-current assets

     3,037,512     2,772,567     2,643,819

Total assets

     91,471,614     79,086,973     79,058,661

[Total current liabilities]

     21,083,623     16,854,968     16,323,690

[Total non-current liabilities]

     15,583,048     14,557,413     14,940,264

Total liabilities

     36,666,671     31,412,381     31,263,954

[Equity attributable to owners of the controlling company]

     50,427,355     44,331,350     44,471,873

Share capital

     482,403     482,403     482,403

Capital surplus

     1,387,960     1,310,547     1,376,251

Hybrid bonds

     199,384     199,384     199,384

Retained earnings

     51,532,888     46,111,457     45,080,118

Other equity attributable to owners of the controlling company

     (3,175,280     (3,772,441     (2,666,283

[Non-controlling Interests]

     4,377,588     3,343,242     3,322,834

Total equity

     54,804,943     47,674,592     47,794,707

 

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Table of Contents
     

From January 1, 2021        

to December 31, 2021        

    

From January 1, 2020        

to December 31, 2020        

    

From January 1, 2019        

to December 31, 2019        

 

Revenue

     76,332,345      57,792,796      64,366,848

Operating profit

     9,238,089      2,403,035      3,868,855

Profit

     7,195,890      1,788,152      1,982,637

[Profit attributable to owners of the controlling company]

     6,617,239      1,602,147      1,835,086

[Profit attributable to non-controlling interests]

     578,651      186,005      147,551

Total comprehensive Income

     8,013,489      1,570,204      2,129,105

[Total comprehensive income attributable to owners of the controlling company]

     7,384,572      1,415,132      1,997,731

[Total comprehensive income attributable to non-controlling interests]

     628,917      155,072      131,374

Earnings per share(KRW)

     87,330      20,165      22,823

Number of Consolidated Companies

     170        167        164  

B. The Standards Used for Reporting the Financial Statements

The Company prepared its financial statements in accordance with the Korean-International Financial Reporting Standards (the “K-IFRS”) and applied it to each Company’s final financial statements.

 

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Table of Contents

2. Separate Financial Statements

A. Summary

 

                

(In millions of KRW)

 

 
Account    2021             2020                     2019  
      As of December 31, 2021             As of December 31, 2020             As of December 31, 2019          

[Total current assets]

     25,918,880     19,579,954     18,216,066

Cash and Cash equivalents

     2,042,274     1,822,660     978,139

Trade accounts and notes receivable, net

     6,017,508     3,693,535     3,987,041

Other receivables, net

     545,341     279,555     321,352

Other short-term financial assets

     9,605,522     9,607,632     7,858,979

Inventories

     7,623,202     4,093,829     4,988,530

Other current assets

     85,033     82,743     82,025

[Total non-current assets]

     38,323,879     37,215,015     37,494,700

Other receivables, net

     274,253     84,037     56,468

Other long-term financial assets

     1,326,565     1,072,817     1,257,896

Investments in Subsidiaries, associates, and joint ventures

     16,002,640     14,883,152     15,069,857

Property, plant and equipment, net

     19,772,299     20,216,932     20,132,199

Intangible assets, net

     551,410     621,926     708,915

Other non-current assets

     396,712     336,151     269,365

Total assets

     64,242,759     56,794,969     55,710,766

[Total current liabilities]

     7,868,269     5,089,111     3,331,446

[Total non-current Liabilities]

     7,339,065     6,591,154     6,765,135

Total liabilities

     15,207,334     11,680,265     10,096,581

[Share capital]

     482,403     482,403     482,403

[Capital surplus]

     1,339,289     1,339,289     1,252,220

[Hybrid bonds]

     199,384     199,384     199,384

[Retained earnings]

     49,734,492     45,781,777     45,372,411

[Other equity]

     (2,720,143     (2,688,149     (1,692,233

Total equity

     49,035,425     45,114,704     45,614,185

 

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Table of Contents
Account    2021              2020              2019          
     

From January 1, 2021        

to December 31, 2021        

    

From January 1, 2020        

to December 31, 2020        

    

From January 1, 2019        

to December 31, 2019        

 

Revenue

     39,920,201      26,509,920      30,373,511

Operating profit

     6,649,600      1,135,197      2,586,359

Profit

     5,181,227      965,863      1,175,712

Earnings per share(KRW)

     68,360      12,123      14,592

B. The Standards Used for Reporting the Financial Statements

The company prepared its financial statements in accordance with the Korean - International Financial Reporting Standards (the “K-IFRS”).

 

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Table of Contents

IV. CORPORATE GOVERNANCE

1. Overview of Corporate Governance

A. Board of Directors (“BoD”)

(1) Board of Directors

The Board of Directors consists of five inside directors (Choi, Jeong-Woo, Kim, Hag-Dong, Chon, Jung-Son, Chung, Chang-Hwa and Jeong, Tak) and seven outside directors (Chang, Seung-Wha , Kim, Shin-Bae, Chung, Moon-Ki, Kim, Sung-Jin, Pahk, Heui-Jae Kim, Yoo, Young-Sook, and Kwon, Tae-Kyun).

The Board of Directors manages the following six Special Committees:

(a) ESG Committee

(b) Director Candidate Recommendation Committee

(c) Evaluation and Compensation Committee

(d) Finance Committee

(e) Audit Committee

(f) Executive Management Committee

 

LOGO

Composition of the Special Committees under the BoD and their Functions(as of March 10, 2022)

 

Category    Composition    Directors    Major Functions
ESG Committee   

3 Outside Directors,

1 Inside Director

  

Kim, Shin-Bae

(Chairman)

Chang, Seung-Wha

Yoo, Young-Sook

Kim, Hag-Dong

  

(1)   Review of low-carbon policies related to environment and climate change

 

(2)   Preliminary review on safety and health plans

 

(3)   Preliminary review of the operation of BoD and Special Committees

 

A. Development of agenda and establishment of operation standards for the BoD and Special Committees

 

B. Preliminary review of amendment or repeal of the Operational Regulations of the BoD

 

C. Preliminary review of establishment and operation of Special Committees within the BoD

 

(4)   Execution monitoring and report publication related to ESG

 

(5)   Deliberation and resolution on donations exceeding KRW 100 million and KRW 1 billion and less, as well as preliminary review on donations exceeding KRW 1 billion

 

(6)   Matters related with internal transactions in accordance with the Monopoly Regulation and Fair Trade Act

 

A. Review of issues and improvement measures in relation to internal transactions

 

B. Preliminary review of internal transactions (KRW 100 billion or more in transaction amount)

 

C. Deliberation and resolution on internal transactions (KRW 5 billion or more and less than KRW 100 billion in transaction amount)

 

(7)   Appointment of fair trade compliance officer

 

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Table of Contents

Director

Candidate Recommendation Committee

   3 Outside Directors   

Chung, Moon-Ki

(Chairman)

Kim, Sung-Jin

Kwon, Tae-Kyun

  

(1)   Qualification assessment of Outside Director candidates and candidate nomination at the general meeting of shareholders

 

(2)   Pre-screening and qualification assessment of Inside Director candidates

 

(3)   Preliminary review of appointing the Committees members

 

(4)   Preliminary review of appointing the Representative Directors among Inside Directors (excluding the CEO)

 

(5)   Operation of the Outside Director Candidate Recommendation Advisory Group

 

(6)   Other matters necessary to nominate Outside Director candidates

Evaluation and

Compensation

Committee

   4 Outside Directors   

Pahk, Heui-Jae

(Chairman)

Chung, Moon-Ki

Kim, Sung-Jin

Yoo, Young-Sook

  

(1)   Development of management succession and executive development plans

 

(2)   Establishment and execution of executive evaluation and compensation plans

 

(3)   Preliminary review on compensation and retirement allowance of Directors

Finance Committee   

3 Outside Directors;

1 Inside Director

  

Kwon, Tae-Kyun

(Chairman)

Kim, Shin-Bae

Chang, Seung-Wha

Chon, Jung-Son

  

(1)   Establishment of policies for company’s internal values and financial soundness

 

(2)   Preliminary review in case of filing in litigation or arbitration, or responding to reconciliation or mediation in the process of trial or taking any equivalent level of legal actions with the amount of KRW 100 billion or more

 

(3)   External Investments

 

A. Preliminary review of new external investments, capital increase and disposal of share in the invested entity executed by a non-steel business division (KRW 100 billion or more. Investment and capital increase include borrowings and liabilities that the company takes)

 

B. Approval of new external investments, capital increase and disposal of share in the invested entity executed by a non-steel business division (From KRW 10 billion to less than KRW 100 billion. Investment and capital increase includes borrowings and liabilities that the company takes)

 

(4)   Deliberation and resolution on bond issuance and important borrowings (including refinancing borrowings exceeding KRW 100 billion)

 

(5)   Preliminary review on bond issuance and important borrowings (new long-term borrowings exceeding KRW 100 billion)

 

(6)   Deliberation and resolution on offering non-current assets as collateral

 

(7)   Deliberation and resolution on takeover of debt such as collateral, guarantee, etc. from invested company (excluding the case involving steel investment)

 

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Audit Committee

   3 Outside Directors   

Kim, Sung-Jin

(Chairman)

Chung, Moon-Ki

Pahk, Heui-Jae

  

(1)   Setting the work scope of the committee

 

(2)   Matters that the BoD or Representative Directors delegated

 

(3)   Request for Extraordinary general meeting of shareholders

 

(4)   Consulting of external experts

 

(5)   Audit of the legitimacy of management’s business execution

 

(6)   Review soundness and validity of the company’s financial activities and the appropriateness of financial reporting

 

(7)   Review the validity of important accounting standards or changes in accounting estimates

 

(8)   Evaluation of the operation status of the internal accounting management system

 

(9)   Evaluation of the internal control system

 

(10)  Agreement on appointment or dismissal of internal audit department representative

 

(11)  Contract for appointment, remuneration and non-audit services of independent auditors

 

(12)  Evaluation of independent auditors’ audit activities

 

(13)  Report internal audit department’s annual audit plan and results

 

(14)  Report on the evaluation results of the company’s ethical compliance

 

(15)  An independent auditor reports on important facts of the company’s Directors’ misconduct or violation of laws or Articles of Incorporation

 

(16)  Report that independent auditors violation of the company’s accounting standards

 

(17)  Other matters deemed necessary by each committee member

 

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Table of Contents

Executive

Management Committee

   5 Inside Directors   

Choi, Jeong-Woo (Chairman)

Kim, Hag-Dong

Chon, Jung-Son

Kim, Hag-Dong

Chung, Chang-Hwa

Jeong, Tak

  

1. Business

 

(1)   Important matters in the corporate employee hierarchy, development of human resources and adjustment

 

(2)   Important changes in terms of working conditions and welfares

 

(3)   New establishment plan for chair-professor

 

(4)   Housing Policy Establishment (Housing fund support standard and plan for housing construction)

 

(5)   Decision on closure of shareholders’ registry

 

2. Finance

 

(1)   Preliminary review on in-house investment plan (New establishment or expansion investment of KRW 200 billion or more)

 

(2)   Approval of in-house investment plan

 

•   New establishment or expansion investment from KRW 10 billion to less than KRW 200 billion

 

•   Investment other than new establishment or expansion: KRW 10 billion or more.(In the case of ordinary investment, the investment amount is for KRW 5 billion or more)

 

(3)   Preliminary review on steel business division: New external investments, capital increase and disposal of shares in the invested entity (From KRW 100 billion or more, Investment and capital increase includes borrowings and liabilities that the company takes)

 

(4)   Approval on steel business division: New external investment, capital increase, and disposal of shares in the invested entity (From KRW 10 billion to less than KRW 100 billion, investment and capital increase to includes borrowings and liabilities that the company takes)

 

(5)   Acquisition or disposal of tangible· intangible fixed assets and important investment assets from KRW 10 billion to less than KRW 200 billion

 

(6)   Approval technology application and technology sales contract over USD 1 million

 

(7)   Acquisition of debt such as guarantee for invested company’s collateral involving steel investments

 

3.  Other matters that the Chairman deems necessary or are deemed necessary by each committee member

 

*

In order to strengthen the roles of the Board of Directors regarding ESG related matters, the Special Committees were reorganized including new establishment of the ESG Committee at the General Meeting of Shareholders held on March 12, 2021.

*

In order to strengthen independence of the Director Candidate Recommendation Committee, on August 13, 2021, the Board of Directors amended the Operational Regulation of Board of Directors so that the Director Candidate Recommendation Committee consists of only Outside Directors.

 

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Table of Contents

(2) List of Outside Directors (As of December 31, 2021)

 

Name    Experience  

Relation

with

Majority
Shareholder  

  Remarks
Chang, Seung-Wha   

•   Dean of Seoul National University School of Law (June 2018 ~ Present)

 

•   Professor of Law, Seoul National University (1995 ~ Present)

 

•   World Trade Organization(WTO) as the Appellate Body Member (May 2012 ~ September 2016)

 

•   Member, International Chamber of Commerce(ICC) Court of Arbitration (2000 ~ 2013)

 

•   LL.M and Doctorate in International Trade Law from Harvard Law School (1994)

  None  

Chairman of the

Board of Directors

Yoo, Young-Sook   

•   Chairperson of the Board(non-permanent), Climate Change Center(January 2020 ~Present)

 

•   Principal Research Scientist, Korea Institute of Science and Technology(KIST)(March 1994 ~May 2021)

 

•   Director(non-permanent), Research Institute of Industrial Science & Technology(2014)

 

•   Co-President, Climate Change Center(2014)

 

•   Minister, Ministry of Environment(2011~2013)

 

•   Vice President, KIST(2009)

 

•   Head of Biological Science Research, KIST(2007)

 

•   Senior Research Scientist, KIST(1990)

  None    
Kwon, Tae-Kyun   

•   Senior Adviser, Yulchon LLC.(2015~June. 2021)

 

•   Outside Director, SAMSUNG ELECTRO-MECHANICS CO., LTD.(2014~2020)

 

•   Outside Director, MIRAE ASSET DAEWOO CO., LTD.(2017~2019)

 

•   Ambassador, Korea to the United Arab Emirates(2010~2013)

 

•   Chief Administrator, Public Procurement Service(2009)

 

•   Head of Trade and Investment Office, Ministry of Knowledge Economy(2008)

 

•   Deputy Minister for Free Economic Zone Planning, MOFE(2007)

 

•   Commissioner, Korea Financial Intelligence Unit, MOFE(2006)

 

•   Economic Councilor, OECD Representative(2001)

 

•   Finance and Economy Adviser, Office of the President(1996)

 

•   Country Officer, Asian Development Bank(1992)

  None    
Kim, Shin-Bae   

•   Vice Chairman, SK Group (January 2010 ~ February 2013)

 

•   President, Korea IoT (Internet of Things) Association (March 2005 ~ March 2012)

 

•   President and CEO, SK Telecom (March 2004 ~ December 2008)

 

•   M.B.A., Wharton School, University of Pennsylvania (1985)

  None    
Chung, Moon-Ki   

•   Professor in Accounting, Sungkyunkwan University (2016~Present)

 

•   Partner and Chief Quality Officer, Samil PwC (1981~2012)

 

•   Committee Member, Accounting Review Committee of Financial Supervisory Service

 

•   Ph.D. in Accounting, Sungkyunkwan University

  None    
Kim, Sung-Jin   

•   Adjunct Professor at Department of Economics, Seoul National University (2011 ~ Present)

 

•   Minister of Maritime Affairs and Fisheries (2006 ~ 2007)

 

•   Administrator of the Small and Medium Business Administration (2004 ~ 2006)

 

•   Ph.D. in Economics Kansas State University (1991)

  None    
Pahk, Heui-Jae   

•   Professor in Mechanical & Aerospace Engineering, Seoul National University (March 1993 ~ Present)

 

•   Chairman of the Board, Korea Youth Foundation (May 2016 ~ Present)

 

•   Head of R&D Strategic Planning, Ministry of Trade, Industry and Energy (April 2013 ~ April 2016)

 

•   SNU Precision CEO (February 1998 ~ December 2016)

 

•   Ph.D in Mechanical Engineering, Seoul National University (1990)

  None    

 

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Table of Contents

(3) List of Key Activities of the Board of Directors (January 1, 2021 ~ March 10, 2022)

 

No.   Date    Agenda   Approval

2021-1

  January 20, 2021   

1. Approval of participation in POSCO CHEMICAL’s capital increase with consideration

 

  All 1 Case Approved

2021-2

  January 28, 2021   

•   Deliberation Agenda

 

1.  Approval of the 53rd financial statements and schedule for the general meeting of shareholders

 

•   Report Agenda

 

1.  Business performance of the fiscal year of 2020

 

2.  Report on internal control over financial reporting

 

3.  Assessment on the effectiveness of internal control over financial reporting

 

  All 1 Case Approved

2021-3

  February 18, 2021   

1.  Plans to strengthen roles of the Board of Directors in relation to ESG

 

2.  Recommendation of Inside Directors candidates (other than the candidate for the Representative Director & CEO)

 

3.  Agendas for the 53rd general meeting of shareholders

 

 

Correction Approval Approved

Approved

2021-4

  March 12, 2021   

1.  Appointment of the Chairman of the BoD

 

2.  Appointment of the Representative Director CEO

 

3.  Appointment of Representative Directors and Inside Directors

 

4.  Appointment of Special Committees members

 

  All 4 Cases Approved

2021-5

  April 9, 2021   

1.  Investment on commercial plant for hard rock lithium

  All 1 Case Approved

2021-6

  May 14, 2021   

•   Deliberation Agenda

 

1.  Resolution on the dividend for the 1st quarter of 2021

 

2.  POSCO health and safety plan for 2021

 

3.  Joint Venture company establishment with HBIS Group Co., Ltd.

 

4.  Equity investment in an Australian nickel production company

 

5.  Transaction Plans with affiliates for the fiscal year of 2021

 

•   Report Agenda

 

1.  Business performance of the 1st quarter of 2021

 

2.  Status of global steel growth strategy implementation

 

3.  The performance and assessment of Board of Directors for 2020

 

  All 5 Case Approved

2021-7

  August 13, 2021   

•   Deliberation Agenda

 

1.  Resolution on the dividend for the 2nd quarter of 2021

 

2.  Financing plan of 2021

 

3.  Financial contribution to the joint labor welfare fund with partner companies

 

4.  Amendment of the Operational Regulation of Board of Directors

 

•   Report Agenda

 

1.  Implementation status of the BoD resolved agendas

 

2.  Business performance of the 2nd quarter of 2021

 

3.  Group research center establishment plan

 

  All 4 Cases Approved

2021-8

  November 15, 2021   

•   Deliberation Agenda

 

1.  Resolution on the dividend for the 3rd quarter of 2021

 

2.  Increase production capacity of eco-friendly electrical steel of Gwangyang Steel Works

 

3.  Contributed acceptance of sculpture in Pohang Hwanho park

 

•   Report Agenda

 

1.  Business performance of the 3rd quarter of 2021

 

  All 3 Cases Approved

 

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Table of Contents

2021-9

  December 10, 2021   

•   Deliberation Agenda

 

1.  Approval of the vertical spin-off plan, convocation of an extraordinary general meeting of shareholders, and setting a reference date

 

2.  Mid-term business strategy and business plan for 2022

 

3.  POSCO Argentina’s capital increase and payment guarantee

 

4.  Year-end donation for the underprivileged

 

5.  Improvement of executive compensation system and performance evaluation

 

•   Report Agenda

 

1.  Implementation status of the BoD resolved agendas for the fiscal year of 2021

 

2.  Review of the compliance system observance

 

3.  Safety and Health activities for 2021 and future plans

 

 

All 5 Case

Approved

2022-1

  January 4, 2022   

1.  Amendment of articles of incorporation of new steel subsidiary related to vertical spin-off

 

 

All 1 Case

Approved

2022-2

  January 28, 2022   

•   Deliberation Agenda

 

1.  Approval of the 54th financial statements and schedule for the general meeting of shareholders

 

2.  Disposal of treasury stocks in accordance with employee stock ownership program implementation

 

•   Report Agenda

 

1.  Business performance of the fiscal year of 2021

 

2.  Report on internal control over financial reporting

 

3.  Assessment on the effectiveness of internal control over financial reporting

 

 

All 2 Cases

Approved

2022-3

  February 17, 2022   

•   Deliberation Agenda

 

1.  Recommendation of Inside Directors candidates and Non-Standing Director candidate

 

2.  Agendas for the 54th general meeting of shareholders

 

•   Report Agenda

 

1.  Amendment of the Operational Regulation of Board of Directors in accordance with conversion to a holding company

 

 

All 2 Cases

Approved

2022-4

  March 2, 2022   

1.  Approval of public notice replacing general shareholder’s meeting to report the completion of Spin-off and inaugural general meeting

 

2.  Approval of registration of relocation of Headquarters

 

All 2 Cases

Approved

 

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Table of Contents
LOGO

Major Activities of Outside Directors on the Board of Directors (January 1, 2021 ~ March 10, 2022)

 

No.    Date   

Participation of the Outside Directors

(the Number of total Outside Directors)

   Remarks

2021-1

   January 20, 2021    7 (7)    —  

2021-2

   January 28, 2021    7 (7)    —  

2021-3

   February 18, 2021    7 (7)    —  

2021-4

   March 12, 2021    7 (7)    —  

2021-5

   April 9, 2021    7 (7)    —  

2021-6

   May 14, 2021    7 (7)    —  

2021-7

   August 13, 2021    7(7)    —  

2021-8

   November 15, 2021    7(7)    —  

2021-9

   December 10, 2021    7(7)    —  

2022-1

   January 4, 2022