POSCO : 2018 Form 20-F

As filed with the Securities and Exchange Commission on April 30, 2019

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 20-F

(Mark One)

'REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR

ÈANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2018

OR

'TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR

'SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company report

For the transition period from		to
	Commission file number 1-13368

POSCO

(Exact name of Registrant as specified in its charter)

POSCO	The Republic of Korea
(Translation of Registrant's name into English)	(Jurisdiction of incorporation or organization)

POSCO Center, 440 Teheran-ro,Gangnam-gu

Seoul, Korea 06194

(Address of principal executive offices)

Lim, Sung-Su

POSCO Center, 440 Teheran-ro,Gangnam-gu

Seoul, Korea 06194

Telephone: [phone];E-mail: [e-mail]; Facsimile: [phone](Name, telephone, e-mailand/or facsimile number and address of company contact person)

Securities registered or to be registered pursuant to Section 12(b) of the Act.

	Title of Each Class		Name of Each Exchange on Which Registered
American Depositary Shares, each representing	New York Stock Exchange, Inc.
one-fourth of one share of common stock
Common Stock, par value Won 5,000 per share *	New York Stock Exchange, Inc. *

Securities registered or to be registered pursuant to Section 12(g) of the Act.

None

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

None

As of December 31, 2018, there were 80,001,132 shares of common stock, par value Won 5,000 per share, outstanding

(not including 7,185,703 shares of common stock held by the company as treasury shares)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes È	No '
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes '	No È

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes È No '

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter

period that the registrant was required to submit such files). Yes È

No '

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or an emerging growth company. See definition of "large accelerated filer," "accelerated filer" and "emerging growth company" in Rule

12b-2 of the Exchange Act. (Check one):

Large accelerated filer È

Accelerated filer '

Non-accelerated filer '

Emerging growth company '

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. '

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in

this filing. U.S. GAAP '	IFRS È	Other '
If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item
the registrant has elected to follow. Item 17 '	Item 18 '
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of
the Exchange Act). Yes '	No È

* Not for trading, but only in connection with the registration of the American Depositary Shares.

		TABLE OF CONTENTS
GLOSSARY	. . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	1
PART I . . .	. . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
ITEM 1.	IDENTITY OF DIRECTORS, SENIOR MANAGERS AND ADVISERS . . . . . . . . . . . . .	2
	Item 1.A.	Directors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
	Item 1.B.	Advisers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
	Item 1.C.	Auditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
ITEM 2.	OFFER STATISTICS AND EXPECTED TIMETABLE . . . . . . . . . . . . . . . . . . . . . . . . . .	2
	Item 2.A.	Offer Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
	Item 2.B.	Method and Expected Timetable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
ITEM 3.	KEY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
	Item 3.A.	Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
	Item 3.B.	Capitalization and Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
	Item 3.C.	Reasons for Offer and Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . . . .	4
	Item 3.D.	Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	4
ITEM 4.	INFORMATION ON THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
	Item 4.A.	History and Development of the Company . . . . . . . . . . . . . . . . . . . . . . . . .	21
	Item 4.B.	Business Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	21
	Item 4.C.	Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	35
	Item 4.D.	Property, Plants and Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	35
ITEM 4A.	UNRESOLVED STAFF COMMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	38
ITEM 5.	OPERATING AND FINANCIAL REVIEW AND PROSPECTS . . . . . . . . . . . . . . . . . . . .	38
	Item 5.A.	Operating Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	38
	Item 5.B.	Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	73
	Item 5.C.	Research and Development, Patents and Licenses, Etc. . . . . . . . . . . . . .	76
	Item 5.D.	Trend Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	76
	Item 5.E.	Off-balance Sheet Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	77
	Item 5.F.	Tabular Disclosure of Contractual Obligations . . . . . . . . . . . . . . . . . . . . . .	77
	Item 5.G.	Safe Harbor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	77
ITEM 6.	DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES . . . . . . . . . . . . . . . . . . . .	77
	Item 6.A.	Directors and Senior Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	77
	Item 6.B.	Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	80
	Item 6.C.	Board Practices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	81
	Item 6.D.	Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	82
	Item 6.E.	Share Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	83
ITEM 7.	MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS . . . . . . . . . . . .	84
	Item 7.A.	Major Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	84
	Item 7.B.	Related Party Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	84
	Item 7.C.	Interests of Experts and Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	84
ITEM 8.	FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	84
	Item 8.A.	Consolidated Statements and Other Financial Information . . . . . . . . . . . .	84
	Item 8.B.	Significant Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	86
ITEM 9.	THE OFFER AND LISTING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	86
	Item 9.A.	Offer and Listing Details . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	86
		i

	Item 9.B.	Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
	Item 9.C.	Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
	Item 9.D.	Selling Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
	Item 9.E.	Dilution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
	Item 9.F.	Expenses of the Issuer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
ITEM 10.	ADDITIONAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
	Item 10.A.	Share Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	87
	Item 10.B.	Memorandum and Articles of Association . . . . . . . . . . . . . . . . . . . . . . . .	87
	Item 10.C.	Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	92
	Item 10.D.	Exchange Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	92
	Item 10.E.	Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	97
	Item 10.F.	Dividends and Paying Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	102
	Item 10.G.	Statements by Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	102
	Item 10.H.	Documents on Display . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	103
	Item 10.I.	Subsidiary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	103
ITEM 11.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . . .	103
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES . . . . . . . . . .	105
	Item 12.A.	Debt Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	105
	Item 12.B.	Warrants and Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	105
	Item 12.C.	Other Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	105
	Item 12.D.	American Depositary Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	106
PART II . .	. . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	107
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES . . . . . . . . . . . . . . . .	107
ITEM 14.	MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND
	USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	107
ITEM 15. CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	107
ITEM 16.	[RESERVED] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	108
	Item 16.A.	Audit Committee Financial Expert . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	108
	Item 16.B.	Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	108
	Item 16.C.	Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . .	109
	Item 16.D.	Exemptions from the Listing Standards for Audit Committees . . . . . . . .	109
	Item 16.E.	Purchases of Equity Securities by the Issuer and Affiliated
		Purchasers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	110
	Item 16.F.	Change in Registrant's Certifying Accountant . . . . . . . . . . . . . . . . . . . . .	110
	Item 16.G.	Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	110
	Item 16.H.	Mine Safety Disclosure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	111
PART III . .	. . . . . . . . . . . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	112
ITEM 17.	FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	112
ITEM 18.	FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	112
ITEM 19.	EXHIBITS . .	. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	112

ii

	GLOSSARY
"ADR" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	American Depositary Receipt evidencing ADSs.
"ADR depositary" . . . . . . . . . . . . . . . . . . . . . .	Citibank, N.A.
"ADS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	American Depositary Share representing one-fourth of
	one share of Common Stock.
"Commercial Code" . . . . . . . . . . . . . . . . . . . .	Commercial Code of the Republic of Korea.
"common stock" . . . . . . . . . . . . . . . . . . . . . . .	Common stock, par value Won 5,000 per share, of
	POSCO.
"deposit agreement" . . . . . . . . . . . . . . . . . . . .	Deposit Agreement, dated as of July 19, 2013, among
	POSCO, the ADR Depositary and all holders and
	beneficial owners from time to time of ADRs issued
	thereunder.
"Dollars," "$" or "US$" . . . . . . . . . . . . . . . . . .	The currency of the United States of America.
"FSCMA" . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Financial Investment Services and Capital Markets Act
	of the Republic of Korea.
"Government" . . . . . . . . . . . . . . . . . . . . . . . . .	The government of the Republic of Korea.
"IASB" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	International Accounting Standards Board.
"IFRS" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	International Financial Reporting Standards.
"Yen" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	The currency of Japan.
"Korea" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	The Republic of Korea.
"Gwangyang Works" . . . . . . . . . . . . . . . . . . .	Gwangyang Steel Works.
"We" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	POSCO and its consolidated subsidiaries.
"Pohang Works" . . . . . . . . . . . . . . . . . . . . . . .	Pohang Steel Works.
"POSCO Group" . . . . . . . . . . . . . . . . . . . . . . .	POSCO and its consolidated subsidiaries.
"Renminbi" . . . . . . . . . . . . . . . . . . . . . . . . . . .	The currency of the People's Republic of China.
"Securities Act" . . . . . . . . . . . . . . . . . . . . . . . .	The United States Securities Act of 1933, as amended.
"Securities Exchange Act" . . . . . . . . . . . . . . .	The United States Securities Exchange Act of 1934, as
	amended.
"SEC" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	The United States Securities and Exchange
	Commission.
"tons" . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	Metric tons (1,000 kilograms), equal to 2,204.6 pounds.
"U.S. GAAP" . . . . . . . . . . . . . . . . . . . . . . . . . .	Generally accepted accounting principles in the United
	States of America.
"Won" or "Y" . . . . . . . . . . . . . . . . . . . . . . . . . .	The currency of the Republic of Korea.

Any discrepancies in any table between totals and the sums of the amounts listed are due to rounding.

1

PART I

Item 1. Identity of Directors, Senior Managers and Advisers

Item 1.A. Directors and Senior Management

Not applicable

Item 1.B. Advisers

Not applicable

Item 1.C. Auditor

Not applicable

Item 2. Offer Statistics and Expected Timetable

Not applicable

Item 2.A. Offer Statistics

Not applicable

Item 2.B. Method and Expected Timetable

Not applicable

Item 3. Key Information

Item 3.A. Selected Financial Data

The selected financial data presented below should be read in conjunction with our Consolidated Financial Statements and related notes thereto and "Item 5. Operating and Financial Review and Prospects" included elsewhere in this annual report. The selected financial data in Won as of December 31, 2017 and 2018 and for each of the years in the three-year period ended December 31, 2018 were derived from our Consolidated Financial Statements included elsewhere in this annual report. Our Consolidated Financial Statements are prepared in accordance with IFRS as issued by the IASB.

In addition to preparing financial statements in accordance with IFRS as issued by the IASB included in this annual report, we prepare financial statements in accordance with Korean International Financial Reporting Standards ("K-IFRS") as adopted by the Korean Accounting Standards Board (the "KASB"), which we are required to file with the Financial Services Commission and the Korea Exchange under the FSCMA. English translations of such financial statements are furnished to the SEC under Form 6-K.K-IFRS differs in certain respects from IFRS as issued by the IASB in the presentation of operating profit. Additionally, under K-IFRS, revenue from the development and sale of certain real estate is recognized using the percentage of completion method. However, under IFRS as issued by the IASB, revenue from the development and sale of real estate is recognized when an individual unit of residential real estate is delivered to the buyer. As a result, our consolidated statements of comprehensive income and our consolidated statements of financial position prepared in accordance with IFRS as issued by the IASB included in this annual report differ from our consolidated statements of comprehensive income and consolidated statements of financial position prepared in accordance with K-IFRS. See "Item 5.A. Operating Results - Explanatory Note Regarding Presentation of Certain Financial Information under K-IFRS."

2