Hanatour Service Inc - Annual Financial Report

Hanatour Service

01/04/2019 09:26

RNS Number : 6402U

Hanatour Service Inc.

01 April 2019

 

Annual Report

 

 

I. OUTLINE OF THE COMPANY

1. Purpose of the Company

Purpose
Remark
1. General Travel Business(Travel Agency)
2. Ticketing and Sales of Airline and Boat
3. Souvenir Sales
4. Issuing of Selling Offers
5. Real Estate Dealing and Lease
6. Optional Communication Business
7. Computer Programming and Supply
8. Telemarketing Business
9. Printing and Publishing Business
10. Issuing of Periodicals
11. Operating School to Train Travel Experts
12.Transportation Business(Chartered Buses)
13. Internet Business
(Install and Provide Contents, Internet Marketing)
14. E-commerce and Information Processing
15. Advertisement (Internet and Outdoor Advertisement)
16. Information and communication Related Business
17. Web Hosting and Homepage Establishment
18. Warehousing
19. Tourists Hotel & Lodging business
20. Operation and management of Tourists Hotels & Lodging
and other incidental facilities
21. Tourists Hotels & Lodging Management Business
22. Investment, Development, Operation and Asset Management
of the Domestic and Overseas Real Estate
23. Real Estate Agent Business
24. Management of Intellectual Property Rights and License
Business (Brand, Trademark Rights)
25. Intangible Assets Sales and Service (Knowledge, Information)
26. Production and Distribution
(Movies, Broadcasting, Videos and Other Cultural Products)
27. Production and Distribution of Digital Contents
28. Operating Performance Facilities
29. Planning Performance
30. Character business
31. Exhibition and Event Agency
32. Internet Broadcasting
33. Tourism Development and Incidental Business
(Marketing Counsel, Planning and Consulting)
34. Education service
35. Operation of Lifelong E-learning Education Facilities
36. Gift Certificate Sales
37. Wedding Consulting
38. Amusement Park Operation
39. Comprehensive Leisure Facilities and Operation Management
40. Tourist Attraction Development Business
41. Comprehensive Recreation Business
42. International Conference Planning Business
43. Camping Car Business
44. Bonded Goods and Tourism Product Sales Business
45. Accommodation Business
46. Accommodation reservation Service
47. Web Portal and Internet Information Service
48. Franchise Business
49. Restaurant Business
50. Shopping Center Leasing andSubleaseBusiness
51. Ticket sales related to Culture, Arts and Sports Events
52. Database Development and Sales Related to Culture, Arts and
Sports
53. Investment of Cultural Projects
(Performances and Film Production)
54. Organization of Events and Sponsors
55. Importation and Agency Business of Performance Publication
Rights
56. Brokerage Agency Business for Copyrights and Neighboring
Copyrights of Performance
57. Membership Sales and Brokerage Arrangements
58. Overseas Studies Agency Business
59.Lifelong Education Facilities Operating
60. Financial Loan and Other Financial Service Business
61. Electronic Financial Business
62. Planning and Promotion of Performance, Concert, Exhibition
63. Credit Card Business
64. Real Estate Development Business
65. Insurance Agent Business
66.All Other Incidental Businesses
▶Newly Added on 22.03.2019 Shareholders Meeting

 

2. Important Business

General Travel Business(Travel Agency)

 

3. History of the Company

A. Changes after the establishment

Date
Important Changes
Oct. 25, 1993
Established Kookjin Travel Co., Ltd. (Capital: 350 million won)
55-4 Seosomun-dong, Jung-gu, Seoul
Dec. 01, 1995
Set the company policy in 'comprehensive wholesales' and launched 'Hana Tour', independent package brand, and commenced the agency sales
Nov. 28, 2000
Listed on KOSDAQ (commenced trading)
Nov. 10, 2006
Listed on LSE(London Stock Exchange)
Nov. 01, 2011
Listed on KOSPI
Jan. 01, 2012
CEO changed -SangHwan ParkandHuynSyuk Choi
Mar. 25, 2016
CEO changed - SangHwan Park and JinKook Kim

 

B. Change of trade name

Date
Changes
Mar. 6, 1996
Changed the name from Kookjin Travel Co., Ltd. to Hana Tour Co., Ltd.
** Purpose is to unify the brand name and company image

 

C. Change of location for head office

Date
Location
Oct. 25, 1993
55-4 Seosomun-dong, Jung-gu, Seoul
Mar. 22, 1996
10F Inju Building, Tour cost fees-1 Seorin-dong, Jongro-gu, Seoul
Oct. 01, 1997
11F Hanmi Building, 1 Gonpyeong-dong, Jongro-gu, Seoul
Jun. 15, 2005
1 Gongpyeong-dong, Jongro-gu, Seoul
Jul. 01. 2013
HanaTour Bldg. 41, Insadon 5-gil, Jongno-gu, Seoul

 

D. Merger, spin off (merger), comprehensive stock swap, transfer, important business assignment and others

The company has no fact of merger or business assignment since the company establishment to this date of submitting this report.

 

4. Domestic Place of Business

Classification
Location
Main
 Business
Head Office
41, Insadong 5-gil, Jongno-gu, Seoul, Republic of Korea
General
 Travel
 Business
and
Ticketing
Central Office
39, Namdaemun-ro 9-gil, Jung-gu, Seoul, Republic of Korea
Sindorim Office
661, Gyeongin-ro, Guro-gu, Seoul, Republic of Korea
Seolleung Office
325, Teheran-ro, Gangnam-gu, Seoul, Republic of Korea
Nowon Office
460, Nohae-ro, Nowon-gu, Seoul, Republic of Korea
Yeonsinnae Office
874, Tongil-ro, Eunpyeong-gu, Seoul, Republic of Korea
Wangsimni Office
326, Wangsimni-ro, Seongdong-gu, Seoul, Republic of Korea
Gimpo International
Airport Office
70, Haneul-gil, Gangseo-gu, Seoul, Republic of Korea
Busan Sales Office
216, Jungang-daero, Dong-gu, Busan, Republic of Korea
Haeundae Office
60, Centum buk-daero, Haeundae-gu, Busan, Republic of Korea
Kimhae
Airport Office
108, Gonghangjinip-ro, Gangseo-gu, Busan, Republic of Korea
Busan Sales Office
(Beomil-dong)
14, Jobang-ro, Dong-gu, Busan, Republic of Korea
Deokcheon Office
12, Gichal-ro, Buk-gu, Busan, Republic of Korea
IncheonSales Office
59, Bupyeong-daero, Bupyeong-gu, Incheon, Republic of Korea
Airport Office
(Terminal1)
271, Gonghang-ro, Jung-gu, Incheon, Republic of Korea
Airport Office
(Terminal2)
446, Je2terminal-daero, Jung-gu, Incheon, Republic of Korea
Airport Office
(VIP Sending)
47, Gonghang-ro 424beon-gil, Jung-gu, Incheon, Republic of
Korea
Airport Office
(Commodity Support)
124, Yeongjong-daero, Jung-gu, Incheon, Republic of Korea
Bupyeong Office
7, Sijang-ro 51beon-gil, Bupyeong-gu, Incheon, Republic of Korea
Daegu Sales Office
648, Gukchaebosang-ro, Jung-gu, Daegu, Republic of Korea
Daejeon Sales Office
69, Dunsanseo-ro, Seo-gu, Daejeon, Republic of Korea
Gwangju Sales Office
136, Geumnam-ro, Buk-gu, Gwangju, Republic of Korea
Ulsan Sales Office
105, Gangbuk-ro, Jung-gu, Ulsan, Republic of Korea
Ilsan Office
1080, Jungang-ro, Ilsandong-gu, Goyang-si, Gyeonggi-do, Republic of Korea
Hwajeong Office
16, Hwajung-ro 104beon-gil, Deogyang-gu, Goyang-si, Gyeonggi-do, Republic of
Korea
Beomgye Office
180, Simin-daero, Dongan-gu, Anyang-si, Gyeonggi-do, Republic of Korea
Suwon Office
299, Hyowon-ro, Paldal-gu, Suwon-si, Gyeonggi-do, Republic of Korea
Bundang Office
42, Hwangsaeul-ro 360beon-gil, Bundang-gu, Seongnam-si, Gyeonggi-do,
Republic of Korea
Gangneung Slaes Office
317, Gangneung-daero, Gangneung-si, Gangwon-do, Republic of Korea
Chuncheon Slaes Office
110, Jungang-ro, Chuncheon-si, Gangwon-do, Republic of Korea
Wonju Sales Office
65, Neungnadong-gil, Wonju-si, Gangwon-do, Republic of Korea
Cheongju Sales Office
27, Biha-ro, Heungdeok-gu, Cheongju-si, Chungcheongbuk-do, Republic of
Korea
Cheonan Sales Office
48, Buldang 14-ro, Seobuk-gu, Cheonan-si, Chungcheongnam-do, Republic of
Korea
Jeonju Sales Office
269, Paldal-ro, Wansan-gu, Jeonju-si, Jeollabuk-do, Republic of Korea
Suncheon
Sales Office
34, Jangseonbaegi-gil, Suncheon-si, Jeollanam-do, Republic of Korea
Mokpo
Sales Office
282, Hugwang-daero, Samhyang-eup, Muan-gun, Jeollanam-do, Republic of
Korea
Pohang
Sales Office
3, Daei-ro 46beon-gil, Nam-gu, Pohang-si, Gyeongsangbuk-do, Republic of
Korea
Changwon
Sales Office
754, Changwon-daero, Seongsan-gu, Changwon-si, Gyeongsangnam-do,
Republic of Korea
Jinju Sales Office
12, Dongbu-ro 169beon-gil, Jinju-si, Gyeongsangnam-do, Republic of Korea

 

5. Status of Employees (As of December 31, 2018)                                                                        (Unit: person)

Classification
Number of employees
Office & Operation
Etc.
Total
Men
1,161
44
1,205
Women
1,418
113
1,531
Total
2,579
157
2,736

 

6. Organization 

 

President & CEO - Global Sales Marketing Dep. / CR Strategic Dep.

 

l

 

Senior Vice President - Future Business Strategic Dep.

l

 

Management Dep. - CEO - E-commerce

Business Planning Dep.          CS Innovation

Financial Dep.                         Product Planning & Marketing

IT Dep.                                    HanaTour Contact Center

                                  l

 

Global               Southeast               Europe               China               Japan               Young Nam               Sales Dep.

       Air & Hotel                 Asia                  America                                                                    Region

South Pacific

 

 

 

 

 

II. INFORMATION ON SHARES

1. Total Number of Stocks, Etc.

A. Total number of stocks (As of December 31, 2018)                                                                      (Unit: share)

Classification
Types of stocks
Remark
Common stock
Total
I. Total number of stocks to be issued
20,000,000
20,000,000
-
II. Total number of stocks issued to this point
11,616,185
11,616,185
-
III. Total number of stocks reduced to this point
-
-
-
1. Reduction of capital
-
-
-
2. Retirement of shares
-
-
-
3. Repayment of redeemed stocks
-
-
-
4. Others
-
-
-
IV. Total number of stocks issued (II-III)
11,616,185
11,616,185
-
V. Treasury stocks
549,253
549,253
-
VI. Outstanding stocks (IV-V)
11,066,932
11,066,932
-

 

B. Change of capital

(1) Status of capital increase                                                                                     (Unit: share, won)

Date of stock issuance
Type of issuance
Contents of issued stocks
Types
Quantity
Par value
Issuance amount per stock
Remark
Oct. 25, 1993
-
Common stock
35,000
10,000
10,000
Capital for incorporation
Jun. 12, 1996
Capital increase with consideration (shareholder allotment)
Common stock
21.500
10,000
10,000
-
Jul. 25, 1997
Capital increase with consideration (shareholder allotment)
Common stock
35,840
10,000
10,000
-
Oct.01, 1997
-
Common stock
184,680
5,000
-
1 to 2 shares
Dec. 02, 1999
Capital increase with consideration (shareholder allotment)
Common stock
115,320
5,000
5,000
-
Dec. 23, 1999
Capital increase with consideration (shareholder allotment)
Common stock
60,000
5,000
10,000
-
May, 05, 2000
Stock Split
Common stock
3,600,000
500
-
1 to 10 shares
Nov. 16, 2000
Capital increase with consideration (shareholder allotment)
Common stock
900,000
500
2,850
-
Aug. 26, 2003
Capital increase without consideration
Common stock
3,764,034
500
-
-
Oct. 27,2004
Capital increase with consideration (shareholder allotment)
Common stock
76,322
500
11,850
-
Oct. 27,2004
Bonus Issue
Common stock
1,977,029
500
-
-
Nov. 11, 2006
Capital increase
Common stock
1,161,000
500
55,711
DR

 

(2) Status of capital decrease                                                                                 (Unit: share, won)

Date of capital reduction
Type
Purpose
Contents of reduced stocks
Types
Quantity
Face value per stock
Amount of acquisition per stock
(for capital decrease for consideration)
Remark
-
-
-
-
-
-
-
-

 

C. Contents of scheduled change for capital

No applicable change

 

2. Matters on Dividends

A. Matters on dividend for three recent fiscal year

Classification
26th Term
25th Term
Face value per stock (won)
500
500
(Consolidated) Current net income (million won)
10,587
12,930
(Separated) Current net income (million won)
13,396
26,252
(Consolidated) Net income per share (won)
791
1,191
Total amount of cash dividend (million won)
14,387
16,600
Total amount of stock dividend (million won)
-
-
Dividend payout ratio (%)
107.4
63.2
Yield rate of cash dividend (%)
Common stock
1.9
1.5
Preferred stock
-
-
Yield rate of stock dividend (%)
Common stock
-
-
Preferred stock
-
-
Cash dividend per share (won)
Common stock
1,300
1,500
Preferred stock
-
-
Stock dividend per share
Common stock
-
-
Preferred stock
-
-

 

 

 

 

 

III. CONTENTS OF THE BUSINESS

1. Summary of the Business

Overall Korea outbound travel demand has decreased in 2018 due to internal issues like Pyeongchang Winter Olympic and local election. Plus, natural disasters occurring in major destination made our business environment even tougher.

The result was a weaker YoY growth of 8.4% in outbound travelers, which is lower than 2013-2018 CAGR of 14.8%. HanaTour endured more direct hit from the weakened demand and recorded a 1.2% YoY growth in Package volume with approximately 3.7 million customers. HanaTour's growth not matching the market's growth can be attributed to the factors in 2018 which had affected family oriented travelers and older travelers more, both of which are HanaTour's main target segment. Younger generation, however, maintained their growth momentum and have contributed to 2018 growth. Hanatour's stand-alone air ticket volume growth of 10.1% YoY in 2018 is reflection of a robust growth from the younger generation segment. All in all, HanaTour's blended YoY volume growth in 2018 was 4.3% with approximately 5.9 million customers.

Regional volume split was as follows: Japan 38.8%, Southeast Asia 34.9%, China 12.6%, Europe 7.2%, South Pacific 4.4% and Americas 2.2%. Each destinations' revenue contribution was Japan 19.4%, Southeast Asia 37.1%, China 11.8%, Europe 18.3%, South Pacific 7.4% and Americas 6.0%. The above Regional mix most likely represents the Korean outbound travel preference which prefer short haul destinations with Japan, Southeast Asia and China taking up approximately 86% of overall package volume.

 

 

2. Market Share Rate

The market share rate of the travel business is classified based on the calculation in which the "Total Departures from HANATOUR" is divided by the "Total Departures of Korea." (Crews are excluded from the total departing persons)

The "Total Departure of Korea" is announce by Korea Tourism Organization (KNTO) and the "Total Departures from HANATOUR" is the figure which we report to Korean Association of Travel Agents (KATA).

 



Year
2018
2017
2016
Total
Departures
from
HANATOUR
Total
Departures
of Korea
Total
Departures
from
HANATOUR
Total
Departures
of Korea
Total
Departures
from
HANATOUR
Total
Departures
of Korea
5,878,013
26,928,389
5,634,020
24,837,011
4,930,452
20,844,236
Share rate
21.83%
22.68%
23.65%

 

 

3. Characteristics of the market

There are about 10,000 agents registered in Korea which account for 80% of the companies that are registered in the whole travel-related industry. The travel agents create about 50,000 jobs. In 1982, the travel business was converted from a license business to a registration business which resulted in increase of number of agents. Overseas traveling was completely liberalized in 1989 which brought explosive increase in number of travelers as well as agents. There are mom and pop agents focusing on network-customers, b2c agents focusing on newspaper advertising and walk-in marketing, and wholesale travel agents providing products to aforementioned agents.

 

There are three special characteristics that make travel industry distinctive.

 

First, Travel business has seasonality. The pricing and marketing strategies change in accordance to seasons. However, due to 5-work-day policy and more maturing society and corporate cultures, the gap between the demands of seasons are shrinking which demanding changes to the products and strategies of travel agents.

 

Second, travel industry has time limits and has no inventory. This is in-line with air transportation, and hotel business. Products have to be sold on each day or the inventories will disappear automatically. Therefore it is very important to have marketing strategy and diversified portfolio of products in order to get rid of all the inventories that the company possesses.

 

Total number of outbound travelers have recorded CAGR of 14.8% in the last 5 years. According to UNWTO, the number of international tourists in 2018 was 1.4 billion with 6% of YoY growth rate. With rapid economic growth, cheaper flight tickets, technical changes, new business models like mobile platform and visa waiver agreements, UNTWO is expecting a dramatic growth in the future: 1.8 billion in 2030. Tourism industry has been recognized as important industry which has a crucial impact globally. Increase in personal income, longer leisure time due to 52-working hour per week policy, high supply of air seat capacity led by LCCs and other possible growth factors will allow Korean outbound market to grow as we expect in the future.

 

 

4. New Business Development

   Not Applicable.

 

 

 

 

 

Ⅳ. Status of the Parent Company and Affiliated Companies

1. Status of the parent company

   Not applicable.

 

2. Status of affiliated companies                                                                   (Unit: Share, %)

Name of the Company
Business Contents
No. of Shares
Ownership Ratio (%)
Hanatour Business Service Inc.
Travel Business
400,000
100.00
Hanatour JejuServiceInc.
Travel Business
618,830
77.35
HanatourITCServiceInc.
Travel Business
24,400,000
100.00
Tour Marketing KoreaServiceInc.
Travel Business
140,000
70.00
Web TourService Inc.
Travel Business
8,777,380
76.99
Hana T&MediaInc.
Publishing
510,000
51.00
Korea TravelService Inc.
Travel Business
600,000
60.00
WorldisTour Co., Ltd.
Travel Business
8,000,001
50.00
H&T MarketingInc.
Advertising
240,000
80.00
Hana Shop Co., Ltd.
Retail Business
360,000
90.00
TourtipsInc.
Information Provision
10,000,000
100.00
Mark HotelCo., Ltd.
Hotel Business
40,000,000
100.00
Hana FinanceServiceInc.
Finance Service
9,800,000
100.00
SM duty free Co., Ltd.
Duty Free Business
12,325,387
90.13
HanaTour Investment ManagementCo., Ltd.
Asset Management
1,400,000
100.0
HanatourUSAInc.
Travel Business
500,000
100.00
Hanatour Europe Ltd.
Travel Business
4,200
70.00
HanatourPTE LTD.
Travel Business
2,142,000
100.00
HanatourJapanCo., Ltd.
Travel Business
5,619,700
51.09
Hanatour CHINA
Travel Business
-
100.00
Hanatour PTY.Ltd.
Travel Business
600,000
100.00
Hanatour HongKongCo., Ltd.
Travel Business
5,000,000
100.00
Hanatour TaiwanService Inc.
Travel Business
-
100.00
Beijing Hana Information TechnologyCo., Ltd.
Software Technical Development
-
100.00
HanatourService (M) Sdn.Bhd.
Travel Business
1,500,000
100.00
HANATOUR EU GMBH
Travel Business
-
100.00
CAMLAO HANATOUR CO., LTD.
Travel Business
300,000
100.00
HANATOUR VIETNAM COMPANY LIMITED
Travel Business
-
85.00
HANATOUR PHILIPPINES CORP.
Travel Business
200,000
83.99

 

3. Concurrent status of the executive management

Executive management
Concurrent Company
Name
Position
Company Name
Position
Assigned Task
SangHwan Park
Chairman, Chief Executive Officer and Director
HANATOUR PTE LTD.
Chief Executive Officer and Director
General Management
Hotel&Air
Co., Ltd.
Director
General Management
HeeSeok Kweon
Vice Chairman, Director
HanatourITCServiceInc.
Chief Executive Officer and Director
General Management
Hotel&Air
Co., Ltd.
Director
General Management
JinKook Kim
Chief Executive Officer and Director
Web TourService Inc.
Non-executive Director
General Management
Hanatour China
Director
General Management
Hotel&Air
Co., Ltd.
Director
General Management

 

 

 

 

 

Ⅴ.SUMMARY OF FINANCIAL DATA

* We've applied K-IFRS 1115 form 2018 and rewrote 2017 and 2016 Financial Results using K-IFRS 1115

 

1. Financial results                                                    (In thousand won, except per share amounts)

Classification
26th Term
25th Term
24rd Term
Sales
542,073,146
535,154,599
496,416,761
Operating Expenses
515,443,456
488,051,660
466,460,318
Operating Income
26,629,690
47,102,938
29,956,443
Profit Before Tax
21,249,687
45,236,097
17,573,667
Income Tax Expense
7,853,355
18,984,305
8,404,026
Net Income
13,396,332
26,251,793
9,169,641
Net Income per Share(Won)
1,210
2,372
829

 

2. Financial position                                                                                      (In thousand won)

Classification
26th Term
25th Term
24rd Term
Current Assets
265,598,584
297,911,223
225,998,726
Non-Current Assets
207,107,324
183,373,200
202,758,195
Total Assets
472,705,908
481,284,424
428,756,921
Current Liabilities
287,134,993
292,020,444
250,245,297
Long-term Liabilities
3,643,375
4,132,373
3,178,192
Total Liabilities
290,778,368
296,152,817
253,423,489
Capital Stock
5,808,093
5,808,093
5,808,093
Other Paid-in Capital
58,700,030
58,700,030
58,700,030
Elements of Other Shareholder's Equity
(9,097)
(815,269)
-962,048
Retained Earnings
117,428,515
121,438,753
111,787,358
Total Shareholder's Equity
181,927,541
185,131,606
175,333,432
Total Liabilities
and Shareholder's Equity
472,705,908
481,284,424
428,756,921

 

 

 

 

 

Ⅵ. RISK FACTORS

Refer to III - 1. Summary of the Business

 

 

 

 

 

Ⅶ. MANAGEMENT

Full-time
/ Part-time
Name
Position
Assigned Task
Full-time
SangHwan Park
Chairman,
Chief Executive Officer and Director
General Management
Full-time
HeeSeok Kweon
Senior Vice Chairman, Director
General Management
Full-time
JinKook Kim
Chief Executive Officer and Director
General Management
Part-time
Han Seol Jung
Non-executive Director
General Management
Part-time
JeongWoo Byun
Auditor, Outside Director
Outside Director
Part-time
JangSuk Han
Auditor, Outside Director
Outside Director
Part-time
GunHo Cho
Auditor, Outside Director
Outside Director

* Han Seol Jung, Non-executive Director, resigned for personal reasons in August, 2018

 

 

 

 

 

Ⅷ. LIST OF MAJOR SHAREHOLDERS

Shareholder
Number of shares
Percentage
Sanghwan Park
and 25 people with a special relationship
1,723,592
14.84%
HANATOUR INC.
549,253
4.73%

 

 

 

 

 

Ⅸ. CURRENT STATUS OF INVESTMENTS

1. Domestic

Name of the Company
Ownership Company
Ownership Ratio (%)
No. of Shares
Hanatour Business Service Inc.
HANATOUR Service Inc.
100.00
400,000
Hana Tourist Inc.
HANATOUR Service Inc.
30.23
906,981
Hanatour JejuServiceInc.
HANATOUR Service Inc.
77.35
618,830
HanatourITCServiceInc.
HANATOUR Service Inc.
100.00
24,400,000
Tour Marketing KoreaServiceInc.
HANATOUR Service Inc.
70.00
140,000
OK Tour ServiceInc.
HANATOUR Service Inc.
48.92
9,784
Web TourService Inc.
HANATOUR Service Inc.
76.99
8,777,380
Hana T&MediaInc.
HANATOUR Service Inc.
51.00
510,000
Korea TravelService Inc.
HANATOUR Service Inc.
60.00
600,000
WorldisTour Co., Ltd.
HANATOUR Service Inc.
50.00
8,000,001
H&T MarketingInc.
HANATOUR Service Inc.
80.00
240,000
Hana Shop Co., Ltd.
HANATOUR Service Inc.
90.00
360,000
Nextour Co., Ltd.
WEBTOUR Co., Ltd.
100.00
40,000
Hotel&AirCo., Ltd.
HANATOUR Service Inc.
50.00
1,000,000
Hotelnfly, INC
HANATOUR Service Inc.
19.90
398,000
TourtipsInc.
HANATOUR Service Inc.
100.00
10,000,000
Center Mark Hotel Inc.
HANATOUR ITC INC.
50.00
1,000,000
JR No. 10 Management Real Estate Investment Trusts
HANATOUR Service Inc.
15.15
1,000,000
Mark HotelCo., Ltd.
HANATOUR Service Inc.
100.00
40,000,000
Hana FinanceServiceInc.
HANATOUR Service Inc.
100.00
9,800,000
SM duty free Co., Ltd.
HANATOUR Service Inc.
90.13
12,325,387
HanaTour Investment ManagementCo., Ltd.
HANATOUR Service Inc.
100.00
1,400,000
Worldshop
HANASHOP
100.00
10,000
Triple Corp.
TOURTIPS INC.
5.4
6,000
Mohajiplatform
TOURTIPS INC.
100.00
100,000
Hanatong Co., Ltd.
HANATOUR Service Inc.
50.00
-

 

2. Overseas

Name of the Company
Ownership Company
Region
Ownership Ratio (%)
No. of Shares
HanatourUSAInc.
HANATOUR Service Inc.
LA
100.00
500,000
Hanatour Europe Ltd.
HANATOUR Service Inc.
London
70.00
4,200
HanatourPTE LTD.
HANATOUR Service Inc.
Singapore
100.00
2,142,000
HanatourJapanCo., Ltd.
HANATOUR Service Inc.
Japan
51.09
5,619,700
U.I Sightseeing Bus LLC
HANATOUR JAPAN CO., LTD
Japan
100.00
1,900
Hanatour CHINA
HANATOUR Service Inc.
China
100.00
-
Hanatour PTY.Ltd.
HANATOUR Service Inc.
Australia
100.00
600,000
Hanatour HongKongCo., Ltd.
HANATOUR Service Inc.
Hong Kong
100.00
5,000,000
Hanatour TaiwanService Inc.
HANATOUR Service Inc.
Taiwan
100.00
-
Hanatour Europe s.r.l
HANATOUR Service Inc.
Italy
50.00
5,250
Allegrox TM Hotel
HANATOUR JAPAN CO., LTD
Japan
100.00
396
Star Shop&Line
HANATOUR JAPAN CO., LTD
Japan
100.00
1,800
Beijing Hana Information TechnologyCo., Ltd.
HANATOUR Service Inc.
China
100.00
-
HanatourService (M) Sdn.Bhd.
HANATOUR Service Inc.
Malaysia
100.00
1,500,000
Zhangjiajie Youlan Canyin Co.,Ltd
HANATOUR CHINA
China
40.00
-
Hanatour Janpan System Vietnam
HANATOUR JAPN CO., LTD
Vietnam
100.00
-
Beijing Yitu International TravelServiceCo., Ltd
HANATOUR Service Inc.
China
20.00
-
HANATOUR EU GMBH
HANATOUR Service Inc.
Germany
100.00
-
CAMLAO HANATOUR CO., LTD.
HANATOUR Service Inc.
Cambodia
100.00
300,000
HANATOUR VIETNAM COMPANY LIMITED
HANATOUR Service Inc.
Vietnam
85.00
-
HANATOUR PHILIPPINES CORP.
HANATOUR Service Inc.
Philippines
83.99
200,000

 

Ⅹ. MAJOR CREDITORS

Not applicable.

 

XI. IMPORTANT EVENTS AFTER THE SETTLEMENT OF

ACCOUNTS PERIOD

None.

 

XII. OTHER IMPORTANT FACTS ABOUT THE BUSINESS

None.

 

 

 

Independent Auditors' Report

 

Based on a report originally issued in Korean

 

 

The Board of Directors and Shareholders 

Hanatour Service Inc.:

 

Opinion

We have audited the consolidated financial statements of Hanatour Service Inc. and its subsidiaries (the "Group"), which comprise the consolidated statements of financial position as of December 31, 2018 and 2017, the consolidated statements of comprehensive income, changes in equity and cash flows for the years then ended, and notes, comprising a summary of significant accounting policies 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 at December 31, 2018 and 2017, and its consolidated financial performance and its consolidated cash flows for the years then ended in accordance with Korean International Financial Reporting Standards ("K-IFRS"). 

 

Basis for Opinion

We conducted our audits in accordance with Korean Standards on Auditing (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.

 

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, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

 

• 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.

 

The engagement partner on the audit resulting in this independent auditors' report is Hyun-Jin Chung.

 

 

 

 

KPMG Samjong Accounting Corp.

Seoul, Korea

March 12, 2019

 

 

This report is effective as of March 12, 2019, 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.

 

 

HANATOUR SERVICE INC. AND SUBSIDIARIES

Consolidated Statements of Financial Position

As of December 31, 2018 and 2017

 

 

(In thousands ofwon)
2018
2017
Assets
Cash and cash equivalents
W
157,699,693
228,389,932
Short-term financial instruments
127,966,881
20,147,996
Trade receivables
97,039,691
98,065,975
Other receivables
7,123,172
9,881,311
Finance lease receivables
44,282
686,382
Inventories
53,074,880
57,468,282
Advance payments
32,262,902
26,847,380
Other current assets
10,598,185
7,535,239
Other financial assets
-
100,000
Current tax assets
686,690
41,845
Assets heldfor sale
5,229,149
5,619,637
Current financial assets at FVTPL
5,985,926
-
Total current assets
497,711,451
454,783,979
Non-current financial assets at FVTPL
6,451,694
-
Financial assets at FVOCI
918,120
-
Financial assets classified at fair value
through profit or loss
-
1,174,375
Available-for-sale financial assets
-
7,054,769
Investments in associates and joint ventures
10,106,990
11,156,922
Long-term finance lease receivables
118,168
149,898
Investment property, net
22,095,166
14,837,953
Property and equipment, net
109,529,904
82,554,749
Intangible assets
22,086,411
13,915,229
Long-term advance payments
94,000
2,000,000
Other financial assets
36,953,155
31,341,012
Deferred tax assets
7,756,731
6,602,393
Other non-current assets
2,299,961
2,587,710
Total non-current assets
218,410,300
173,375,010
716,121,751
628,158,989
Total assets
W


 

 

 

HANATOUR SERVICE INC. AND SUBSIDIARIES

Consolidated Statements of Financial Position, Continued

As of December 31, 2018 and 2017

 

 

(In thousands of won)
2018
2017
Liabilities
Trade payables
W
99,718,809
102,903,846
Other payables
52,496,300
43,816,431
Income tax payables
3,596,862
20,902,081
Deposits received for travel
133,950,763
127,080,765
Advances received
26,046,337
23,905,955
Short-term borrowings
69,617,239
10,469,350
Current portion of long-term borrowings
2,295,649
5,920,739
Finance lease liabilities
2,768,848
661,796
Provisions
404,754
2,117,816
Other financial liabilities
3,726,934
3,425,287
Other current liabilities
18,953,087
21,040,707
Liabilities held for sale
14,246
15,516
Total current liabilities
413,589,828
362,260,289
Long-term other payables
11,054,850
8,728,237
Long-term borrowings
10,381,719
5,173,068
Debentures
2,286,089
2,239,214
Long-term provisions
1,687,053
939,364
Long-term finance lease liabilities
35,071,512
993,743
Provision for long-term employee benefits
1,783,010
1,527,382
Other financial liabilities
62,453
204,453
Other non-current liabilities
325,031
366,828
Total non-current liabilities
62,651,717
20,172,289
Total liabilities
476,241,545
382,432,578
Equity
Capital stock
5,808,093
5,808,093
Other contributed capital
77,349,083
80,560,685
Components of other capital
(1,532,526)
(4,368,194)
Retained earnings
118,245,244
126,902,441
Equity attributable to the owners of
the Parent Company
199,869,894
208,903,025
Non-controlling interests
40,010,312
36,823,386
Total equity
239,880,206
245,726,411
Total liabilities and equity
W
716,121,751
628,158,989


 

 

 

HANATOUR SERVICE INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive Income

For the years ended December 31, 2018 and 2017

 

 

(In thousands of won, except earnings per share data)
2018
2017
Operating revenue
W
828,273,952
804,338,657
Operating expense
803,404,831
763,223,814
Bad debt expense
3,448,001
4,231,985
Other operating expense
799,956,830
758,991,829
Operating income
24,869,121
41,114,843
Financial income
3,811,396
2,335,837
Financial expense
1,468,200
807,460
Loss from investment in associates and joint ventures
(480,313)
(1,537,398)
Other income
10,055,784
11,083,805
Other expense
14,451,075
13,881,866
Income before income taxes
22,336,713
38,307,761
Income taxes
11,749,916
25,378,021
Net income
W
10,586,797
12,929,740
Other comprehensive income after tax expense
Items that will never be reclassified to profit of loss:
Loss on valuationfinancial assets at FVOCI
(198,442)
-
Items that are or may be reclassified subsequently
to profit of loss:
Changes in valuation of equity-accounted investees, net
(38,447)
39,769
Gain(loss) on foreign operations translation, net
4,002,589
(4,759,419)
Gain (loss) on valuation of available-for-sale financial assets
-
143,629
Total items that are or may be reclassified
subsequently to profit of loss
3,765,700
(4,576,021)
Total comprehensive income
W
14,352,497
8,353,719
Net income attributable to:
Owners of the Parent Company
8,749,373
13,184,170
Non-controlling interests
1,837,424
(254,430)
W
10,586,797
12,929,740
Comprehensive income attributable to:
Owners of the Parent Company
10,778,868
9,647,819
Non-controlling interests
3,573,629
(1,294,100)
W
14,352,497
8,353,719
Earnings per share
Basic earnings per share (in won)
791
1,191
Diluted earnings per share (in won)
W
791
1,191


 

 

 

 

 

 

 

 

HANATOUR SERVICE INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2018 and 2017

 

 

(In thousands of won)
Capital Stock
Other contributed capital
Components of other capital
Retained earnings
Non-controlling interests
Total shareholders' equity
January 1, 2017
W
5,808,093
58,105,899
(831,843)
126,400,362
22,593,837
212,076,348
Adjustment on initial application
-
-
-
3,918,307
126,307
4,044,614
Adjusted balance atJanuary 1, 2017
5,808,093
58,105,899
(831,843)
130,318,669
22,720,144
216,120,962
Dividends
-
-
-
(8,853,546)
-
(8,853,546)
Interim dividends
-
-
-
(7,746,852)
-
(7,746,852)
Dividends of subsidiaries
-
-
-
-
(466,192)
(466,192)
Discount on stock issuance
-
(74,571)
-
-
-
(74,571)
Exercised stock option rights
-
(37,856)
-
-
(10,881)
(48,737)
Stock compensation
expense
-
3,104
-
-
892
3,996
Net income
-
-
-
13,184,170
(254,430)
12,929,740
Loss on foreign operations
translation
-
-
(3,719,749)
-
(1,039,670)
(4,759,419)
Changes in valuation of
equity accounted investees
-
-
39,769
-
-
39,769
Gain on valuation of available
-for-sale financial assets
-
-
143,629
-
-
143,629
Acquisition of treasury stock
-
(37)
-
-
(8)
(45)
Paid-in capital increase of
subsidiaries
-
9,122,184
-
-
8,757,252
17,879,436
Disposal of investments
in subsidiaries
-
13,773,462
-
-
6,784,779
20,558,241
Change in scope of
consolidation
-
(331,500)
-
-
331,500
-
December 31, 2017
W
5,808,093
80,560,685
(4,368,194)
126,902,441
36,823,386
245,726,411


 

January 1, 2018
W
5,808,093
80,560,685
(4,368,194)
126,902,441
36,823,386
245,726,411
Adjustment on initial application
-
-
806,173
(806,173)
-
-
Adjusted balance atJanuary 1, 2018
5,808,093
80,560,685
(3,562,021)
126,096,268
36,823,386
245,726,411
Dividends
-
-
-
(8,853,545)
-
(8,853,545)
Interim dividends
-
-
-
(7,746,852)
-
(7,746,852)
Dividends of subsidiaries
-
-
-
-
(1,564,570)
(1,564,570)
Discount on stock issuance
-
-
-
-
(48,425)
(48,425)
Stock compensation expense
-
12,322
-
-
11,558
23,880
Net income
-
-
-
8,749,373
1,837,424
10,586,797
Gain on foreign operations
translation
-
-
2,221,597
-
1,780,992
4,002,589
Changes in valuation of
equity accounted investees
-
-
(38,447)
-
-
(38,447)
Loss on valuationfinancial assets at FVOCI
-
-
(153,655)
-
(44,787)
(198,442)
Acquisition of treasury stock
-
(783,223)
-
-
(1,285,957)
(2,069,180)
Paid-in capital increase of
subsidiaries
-
(2,331,223)
-
-
2,391,213
59,990
Others
-
(109,478)
-
-
109,478
-
December 31, 2018
W
5,808,093
77,349,083
(1,532,526)
118,245,244
40,010,312
239,880,206


 

 

HANATOUR SERVICE INC. AND SUBSIDIARIES                                                 

Consolidated Statements of Cash Flows

For the years ended December 31, 2018 and 2017

 

 

(In thousands of won)
2018
2017
Cash flows from operating activities
Net income
W
10,586,797
12,929,740
Additions of expenses not involving cash outflows and others
57,970,118
69,432,894
Deduction of incomes not involving cash inflows and others
(5,503,101)
(3,595,192)
Movements in operating assets and liabilities:
Increase in trade receivables
(3,405,726)
(17,652,905)
Decrease(increase) in other receivables
(1,056,388)
5,487,385
Decrease(increase) in inventories
4,707,602
(1,109,968)
Increase in advance payments
(7,054,711)
(8,219,043)
Decreasein long-term advance payments
1,906,000
-
Increase in other current assets
(2,686,544)
(376,387)
Decrease(increase) in other non-current assets
(8,020)
275,873
Increase (decrease) in trade payables
(4,121,028)
1,595,609
Increase (decrease) in other payables
(1,196,702)
7,702,953
Increase in deposits received for travel
6,840,330
13,629,548
Increase in advances received
2,094,463
1,201,571
Increase (decrease) in other financial liabilities
(144,272)
314,941
Increase(decrease) in other current liabilities
(9,040,406)
764,916
Decrease in provisions
(1,476,967)
(1,369,391)
Increase (decrease) in long-term other payables
556,418
(74,173)
Decrease in other long-term employee benefit
(110,000)
(159,978)
48,857,863
80,778,393
Interest expense paid
(1,249,047)
(990,370)
Interest income received
3,417,042
2,371,320
Dividend income received
119,158
110,088
Income taxes paid
(30,929,031)
(16,027,938)
Net cash provided by operating activities
W
20,215,985
66,241,493


 

 

 

HANATOUR SERVICE INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

For the years ended December 31, 2018 and 2017 

 

 

(In thousands of won)
2018
2017
Cash flows from investing activities
Cash inflows from investing activities:
Decrease in short-term financial instruments
W
88,807,714
25,805,582
Decrease in other receivables
61,067
14,477,960
Disposal offinancial assets at FVTPL
9,426,373
-
Disposal of available-for-sale financial assets
-
200,000
Disposal of investment in associates and joint venture
1,313,240
3,000
Capital reduction of associates and joint venture
-
5,000,000
Disposal of property and equipment
803,047
404,953
Disposal of intangible assets
22,871
-
Decrease in finance lease receivables
686,050
1,008,383
Decrease in other financial assets
2,209,249
4,108,493
Cash outflows for investing activities:
Increase in short-term financial instruments
195,048,977
27,460,454
Increase in other receivables
449,276
14,750,000
Acquisition offinancial assets at FVTPL
10,684,600
-
Acquisition offinancial assets at FVOCI
598,155
-
Acquisition of available-for-sale financial assets
-
1,500,000
Acquisition of investment in associates and joint venture
69,766
1,000,000
Acquisition of property and equipment
12,882,813
21,409,913
Acquisition of Investment property
222,081
81,579
Acquisition of intangible assets
6,602,327
3,767,518
Acquisition of investmentsubsidiaries
50,000
-
Increase in other financial assets
7,711,283
2,804,705
Net cash provided by (used in) investing activities
W
(130,989,667)
(21,765,798)

 

 

HANATOUR SERVICE INC. AND SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

For the years ended December 31, 2018 and 2017 

 

 

(In thousands of won)
2018
2017
Cash flows from financing activities
Cash inflows from financing activities:
Proceeds from short-term borrowings
W
82,541,533
27,833,853
Proceeds from long-term borrowings
6,672,390
4,193,311
Proceeds from debentures
944,170
-
Paid-in capital increase of subsidiaries
59,990
18,597,109
Disposal of investments in subsidiaries
-
24,525,378
Exercised stock option rights
-
89,531
Cash outflows for financing activities:
Repayment of short-term borrowings
24,735,331
20,123,688
Repayment of current portion of long-term borrowings
6,537,275
2,961,862
Repayment of long-term borrowings
192,719
1,135,120
Repayment of finance lease liabilities
1,660,047
864,743
Acquisition of treasury stocks
2,034,645
45
Payment of stock issuance expense
48,425
207,765
Payment of dividends
18,151,302
17,066,562
Net cash provided by (used in) financing activities
36,858,339
32,879,397
Reclassification to assets and liabilities held for sale
255,165
(32,216)
Net increase in cash and cash equivalents
(73,660,178)
77,322,876
Cash and cash equivalents at beginning of year
228,389,932
156,047,480
Effect of exchange rate change
2,969,939
(4,980,424)
Cash and cash equivalents at end of year
W
157,699,693
228,389,932


 

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FR LIFEDSRILIIA