POSCO FUTURE M CO., LTD.
(FORMERLY, POSCO CHEMICAL CO., LTD.) and its Subsidiaries
Consolidated Financial Statements
December 31, 2023 and 2022
(With Independent Auditors' Report Thereon)
Table of Contents
Page | |
Independent Auditors' Report | 1 |
Consolidated Financial Statements | |
Consolidated Statements of Financial Position | 5 |
Consolidated Statements of Comprehensive Income (Loss) | 7 |
Consolidated Statements of Changes in Equity | 9 |
Consolidated Statements of Cash Flows | 11 |
Notes to the Consolidated Financial Statements | 13 |
Independent Auditors' Report on Internal Control over Financial Reporting for | |
Consolidation Purposes | 76 |
Report on the Operating Status of Internal Control over Financial Reporting for | |
Consolidation Purposes | 78 |
Independent Auditors' Report
Based on a report originally issued in Korean
To the Shareholders and Board of Directors of
POSCO FUTURE M CO., LTD. (FORMERLY, POSCO CHEMICAL CO., LTD.)
Opinion
We have audited the consolidated financial statements of POSCO FUTURE M CO., LTD. (FORMERLY, POSCO CHEMICAL CO., LTD.) and its subsidiaries ("the Group"), which comprise the consolidated statement of financial position as of December 31, 2023, the consolidated statements of comprehensive loss, changes in equity and cash flows for the year then ended, and notes, comprising of material accounting policy information and other explanatory information.
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of December 31, 2023, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Korean International Financial Reporting Standards ("K-IFRS").
We also have audited, in accordance with Korean Standards on Auditing (KSAs), the Group's Internal Control over Financial Reporting for Consolidation Purposes("ICFR") as of December 31, 2023 based on the criteria established in Conceptual Framework for Designing and Operating Internal Control over Financial Reporting issued by the Operating Committee of Internal Control over Financial Reporting in the Republic of Korea, and our report dated March 13, 2024 expressed an unmodified opinion on the effectiveness of the Group's internal control over financial reporting for consolidation purposes.
Basis for Opinion
We conducted our audit in accordance with KSAs. Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matter
Key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the consolidated financial statements as of and for the year ended December 31, 2023. This matter was addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.
Risk of adjustment to timing of export sales revenue recognition from energy materials business
Sales from energy material business account for a material portion of the Group's sales. A significant portion of the sales of energy material businesses are export sales. Revenue recognition for these sales transactions may vary depending on the "International Rules on the Interpretation of Trade Terms (incoterms)" and usually the delivery of the products to the destination takes a long period of time, we judged that there is a high possibility of inappropriate adjustments on the timing of revenue recognition due to fraud.
Considering the inherent risk associated with export sales of energy material business and the significance of sales amount, we determined that the appropriateness of the timing of export sales revenue recognition from energy material business as a key audit matter.
The primary procedures we performed to address this key audit matter included the following:
- Evaluation of the effectiveness of the design and operation of internal controls over the accuracy of revenue recognition cut-off related to the export sales of energy materials business
- Analysis of monthly sales trends for key customers to verify the cut-off accuracy of sales to those customers whose sales transaction volume increased significantly in the last month of current reporting period
- Checking the accuracy of the timing of revenue recognition through document inspection for unusual export sales transactions in the energy material business that occurred close to the end of the fiscal period
- Inspection of document to verify the appropriateness of timing of revenue recognition for samples selected from export sales transactions of energy material projects that occurred during a certain period before and after the end of the fiscal period
Other Matters
The consolidated financial statements of the Group as of and for the year ended December 31, 2022, were audited by another auditor who expressed an unmodified opinion on those statements on March 8, 2023.
The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.
Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with K-IFRS, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group's financial reporting process.
Auditors' Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with KSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with KSAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances.
- Evaluate the appropriateness of accounting policies used in the preparation of the consolidated financial statements and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
The engagement partner on the audit resulting in this independent auditors' report is Yang-Ki Jung.
Seoul, Korea
March 13, 2024
This report is effective as of March 13, 2024, the audit report date. Certain subsequent events or circumstances, which may occur between the audit report date and the time of reading this report, could have a material impact on the accompanying consolidated financial statements and notes thereto. Accordingly, the readers of the audit report should understand that the above audit report has not been updated to reflect the impact of such subsequent events or circumstances, if any.
POSCO FUTURE M CO., LTD. (FORMERLY, POSCO CHEMICAL CO., LTD.) AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF AND FOR THE YEARS ENDED
DECEMBER 31, 2023 AND 2022
The accompanying consolidated financial statements, including all footnote disclosures, were prepared by, and are the responsibility of, POSCO FUTURE M CO., LTD.
Kim, Jun Hyung
Chief Executive Officer
POSCO FUTURE M CO., LTD.
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POSCO FUTURE M CO., LTD. (FORMERLY, POSCO CHEMICAL CO., LTD.) AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2023 AND 2022
December 31, | December 31, | ||||||
Notes | 2023 | 2022 | |||||
ASSETS: | (Korean | won) | |||||
CURRENT ASSETS: | |||||||
Cash and cash equivalents | 4,6,7,8 | ₩ | 389,579,199,482 | ₩ | 281,380,444,158 | ||
Other financial assets | 4,6,8,10,11,38,39 | 263,412,024,345 | 543,581,894,767 | ||||
Trade receivables | 4,6,9,39 | 758,049,903,328 | 288,251,214,999 | ||||
Contract assets | 4,9,29,39 | 9,680,909,912 | 11,953,195,995 | ||||
Inventories | 13 | 916,674,470,483 | 870,133,665,539 | ||||
Other assets | 12 | 71,356,583,015 | 42,187,760,955 | ||||
Income taxes receivable | 23 | 3,128,320,264 | 30,295,537 | ||||
2,411,881,410,829 | 2,037,518,471,950 | ||||||
NON-CURRENT ASSETS: | |||||||
Property, plant and equipment | 14 | 3,359,487,997,645 | 2,097,998,557,447 | ||||
Right-of-use assets | 15 | 103,847,838,212 | 99,734,376,124 | ||||
Intangible assets | 16 | 40,880,147,843 | 30,937,938,871 | ||||
Investments in associates and | |||||||
joint ventures | 18 | 262,841,552,913 | 287,705,105,620 | ||||
Other financial assets | 4,6,10,11,38,39 | 49,257,106,080 | 34,375,942,268 | ||||
Investment property | 17 | 188,070,156 | 188,070,156 | ||||
Net Defined benefit assets | 22 | 27,388,587,772 | 31,155,257,910 | ||||
Other assets | 12 | 23,338,406,670 | 1,074,893,841 | ||||
Deferred tax assets | 23 | 55,482,179,751 | 16,787,526,002 | ||||
3,922,711,887,042 | 2,599,957,668,239 | ||||||
TOTAL ASSETS | |||||||
₩ | 6,334,593,297,871 | ₩ | 4,637,476,140,189 | ||||
LIABILITIES: | |||||||
CURRENT LIABILITIES: | |||||||
Trade payables | 4,6,39 | ₩ | 262,251,342,107 | ₩ | 288,697,331,268 | ||
Contract liabilities | 20,29,39 | 1,271,094,700 | 4,743,604,414 | ||||
Short-term borrowings | 4,6,21 | 352,139,820,122 | 202,826,829,068 | ||||
Current portion of long-term | |||||||
borrowings and debentures | 4,6,21 | 327,651,087,897 | 262,105,774,279 | ||||
Other financial liabilities | 4,6,19,38,39 | 424,393,605,558 | 162,576,173,394 | ||||
Lease liabilities | 4,6,15 | 16,787,717,635 | 18,075,727,222 | ||||
Other provisions | 24 | 5,798,873,151 | 3,917,731,426 | ||||
Other liabilities | 20 | 4,828,034,290 | 3,496,114,947 | ||||
Income taxes payable | 23 | 1,286,237,565 | 19,353,536,748 | ||||
1,396,407,813,025 | 965,792,822,766 |
(Continued)
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POSCO FUTURE M CO., LTD. (FORMERLY, POSCO CHEMICAL CO., LTD.) AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2023 AND 2022
December 31, | December 31, | ||||||
Notes | 2023 | 2022 | |||||
NON-CURRENT LIABILITIES: | (Korean | won) | |||||
Long-term borrowings and | |||||||
debentures | 4,6,21 | 2,218,104,479,318 | 926,410,899,757 | ||||
Net benefit defined liabilities | 22 | 406,999,499 | 424,740,953 | ||||
Other financial liabilities | 4,6,19,38,39 | 16,843,484,836 | 10,709,737,378 | ||||
Lease liabilities | 4,6,15 | 79,702,557,350 | 73,711,926,919 | ||||
Other provisions | 24 | 8,057,979,367 | 5,839,075,936 | ||||
Deferred tax liabilities | 23 | 3,603,994,393 | 3,942,297,639 | ||||
2,326,719,494,763 | 1,021,038,678,582 | ||||||
TOTAL LIABILITIES | |||||||
₩ | 3,723,127,307,788 | ₩ | 1,986,831,501,348 | ||||
SHAREHOLDERS' EQUITY: | |||||||
EQUITY ATTRIBUTABLE TO | |||||||
OWNERS OF THE PARENT: | |||||||
Common stock | 25 | ₩ | 38,731,610,000 | ₩ | 38,731,610,000 | ||
Additional paid-in capital | 26 | 1,457,400,615,954 | 1,454,531,893,625 | ||||
Capital adjustment | 27 | (127,633,910,076) | (16,819,535,254) | ||||
Accumulated other comprehensive | |||||||
income (loss) | 28 | (16,742,186,987) | (8,920,112,154) | ||||
Retained earnings | 28 | 998,453,747,373 | 1,003,497,787,834 | ||||
2,350,209,876,264 | 2,471,021,644,051 | ||||||
NON-CONTROLLING INTERESTS | 261,256,113,819 | 179,622,994,790 | |||||
TOTAL SHAREHOLDERS'EQUITY | |||||||
₩ | 2,611,465,990,083 | ₩ | 2,650,644,638,841 | ||||
TOTAL LIABILITIES AND | |||||||
SHAREHOLDERS' EQUITY | ₩ | 6,334,593,297,871 | ₩ | 4,637,476,140,189 |
(Concluded)
See notes to consolidated financial statements.
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POSCO FUTURE M CO., LTD. (FORMERLY, POSCO CHEMICAL CO., LTD.) AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
Notes | 2023 | 2022 | |||||
(Korean | won) | ||||||
SALES | 5,29,39 ₩ | 4,759,871,486,264 | ₩ | 3,301,915,805,063 | |||
COST OF SALES | 32,39 | 4,502,641,709,206 | 2,967,157,795,371 | ||||
GROSS PROFIT | 257,229,777,058 | 334,758,009,692 | |||||
General administrative expense | 30,32,39 | 197,707,172,296 | 156,949,012,419 | ||||
Selling and logistics expense | 30,33 | 23,640,418,763 | 11,937,327,330 | ||||
OPERATING INCOME | 35,882,185,999 | 165,871,669,943 | |||||
Other income | 31,39 | 9,937,503,103 | 4,774,826,974 | ||||
Other expense | 31,39 | 58,667,161,732 | 3,441,213,761 | ||||
Share of profit (loss) of associates and joint | (30,920,020,533) | 20,749,921,121 | |||||
ventures | 18 | ||||||
Financial income | 6,33 | 203,467,428,777 | 121,370,869,361 | ||||
Financial expense | 6,33 | 175,792,031,699 | 175,381,126,020 | ||||
INCOME (LOSS) | (16,092,096,085) | 133,944,947,618 | |||||
BEFORE INCOME TAX EXPENSE | |||||||
Income tax expense (income) | 23 | (20,527,316,038) | 12,016,380,494 | ||||
NET INCOME | ₩ | 4,435,219,953 | ₩ | 121,928,567,124 | |||
NET INCOME ATTRIBUTABLE TO: | |||||||
Owners of the Parent | 28,722,208,549 | 118,266,658,602 | |||||
Non-controlling interests | (24,286,988,596) | 3,661,908,522 |
(Continued)
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POSCO FUTURE M CO., LTD. (FORMERLY, POSCO CHEMICAL CO., LTD.) AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
FOR THE YEARS ENDED DECEMBER 31, 2023 AND 2022
Notes | 2023 | 2022 | |||||
(Korean | won) | ||||||
OTHER COMPREHENSIVE INCOME (LOSS): | ₩ | (20,192,299,665) | ₩ | (4,366,879,099) | |||
Items not to be reclassified subsequently to profit or | |||||||
loss: | |||||||
Remeasurement of defined benefit plan | (10,799,110,527) | 10,241,676,645 | |||||
Changes in retained earnings in equity method | 295,594,425 | 12,439,072 | |||||
Gain (loss) on currency translation for foreign | |||||||
operations | (1,866,708,730) | (6,445,238,307) | |||||
Gain on valuation of financial assets at FVTOCI | - | 605,570,000 | |||||
Items to be reclassified subsequently to profit or loss: | |||||||
Changes in equity in equity method | 18 | 267,936,226 | (2,937,228,837) | ||||
Gain (loss) on currency translation for foreign | |||||||
operations | (8,090,011,059) | (5,844,097,672) | |||||
COMPREHENSIVE INCOME (LOSS) | ₩ | (15,757,079,712) | ₩ | 117,561,688,025 | |||
COMPREHENSIVE INCOME (LOSS) | |||||||
ATTRIBUTABLE TO: | |||||||
Owners of the Parent | 10,356,040,206 | 120,339,139,797 | |||||
Non-controlling interests | (26,113,119,918) | (2,777,451,772) | |||||
NET EARNINGS PER SHARE: | |||||||
Basic and diluted earnings per share | 34 | ₩ | 371 | ₩ | 1,527 |
(Concluded)
See notes to consolidated financial statements.
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Posco Future M Co. Ltd. published this content on 28 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 28 June 2024 02:08:24 UTC.