REG - Hanatour Service Inc - Annual Financial Report
Annual Report
Click on, or paste the following link into your web browser, to view the full announcement.
http://www.rns-pdf.londonstockexchange.com/rns/0411U_1-2021-3-31.pdf
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 and Sublease Business
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
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 Park and HuynSyuk Choi
Mar. 25, 2016
CEO changed - SangHwan Park and JinKook Kim
Mar. 26, 2020
CEO changed - JinKook Kim and MiSun Song
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
On February 28, 2020, the Group issued 2,323,000 shares through capital increase with consideration in third party allocations, and it's the largest shareholder (with a 16.67% stake rate) was changed to Harmonia 1 limited company.
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
Sindorim Office
661, Gyeongin-ro, Guro-gu, Seoul, Republic of Korea
Seolleung Office
325, Teheran-ro, Gangnam-gu, Seoul, Republic of Korea
Busan Sales Office
11, Jayupyeonghwa-ro, Busanjin-gu, Busan, Republic of Korea
Kimhae
Airport Office
108, Gonghangjinip-ro, Gangseo-gu, Busan, Republic of Korea
Incheon Sales 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
(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
Beomgye Office
180, Simin-daero, Dongan-gu, Anyang-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
Jeonju Sales Office
269, Paldal-ro, Wansan-gu, Jeonju-si, Jeollabuk-do, Republic of Korea
Mokpo
Sales Office
282, Hugwang-daero, Samhyang-eup, Muan-gun, Jeollanam-do, Republic of
Korea
Changwon
Sales Office
754, Changwon-daero, Seongsan-gu, Changwon-si, Gyeongsangnam-do,
Republic of Korea
5. Status of Employees (As of December 31, 2020)
(Unit: person)
Classification
Office & Operation
Men
1,001
Women
1,225
Total
2,226
6. Organization
II. INFORMATION ON SHARES
1. Total Number of Stocks, Etc.
A. Total number of stocks (As of December 31, 2020)
(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
13,939,185
13,939,185
-
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)
13,939,185
13,939,185
-
V. Treasury stocks
549,253
549,253
-
VI. Outstanding stocks (IV-V)
13,389,932
13,389,932
-
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
Feb. 28, 2020
Capital increase with consideration (Third-party allotment)
Common stock
2,323,000
500
55,500
-
(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
28th Term
27th Term
Face value per stock (won)
500
500
(Consolidated) Current net income (million won)
(172,012)
(8,027)
(Separated) Current net income (million won)
(99,210)
(34,655)
(Consolidated) Net income per share (won)
(13,210)
(752)
Total amount of cash dividend (million won)
-
11,067
Total amount of stock dividend (million won)
-
-
Dividend payout ratio (%)
-
-
Yield rate of cash dividend (%)
Common stock
-
2.0
Preferred stock
-
-
Yield rate of stock dividend (%)
Common stock
-
-
Preferred stock
-
-
Cash dividend per share (won)
Common stock
-
1,000
Preferred stock
-
-
Stock dividend per share
Common stock
-
-
Preferred stock
-
-
III. CONTENTS OF THE BUSINESS
1. Summary of the Business
Until 2019, Korea's outbound volume has continued to grow gradually, due to increased leisure time and national disposable income growth. However, the outbreak of COVID-19 restricted cross-country travel and Korea's outbound volume decreased significantly. (WHO declared COVID-19 a pandemic on March 11, 2020)
Hanatour tried to find new demand for safe travel, commercial travel, chartered flights for Korean residents, and domestic travel, but had to spend the worst year without making notable performance, owing to the aggressive spread of the virus, and strengthening quarantine of overseas immigrants.
As the result of these factors, Korea's outbound volume decreased 86.3%YOY, Hanatour's PKG volume was 0.24 million showing approximately 91.7% decrease over 2019 records, and Air Ticket volume was 0.4 million showing a significant decrease of 81.9% YOY. All in all, Hanatour's blended YOY volume growth in 2020 was -87.4% with approximately 0.6 million customers.
Regional volume split was as follows: Southeast Asia 57.0%, Europe 10.9%, China 10.4%, Japan 8.5%, Americas 6.6% South Pacific 6.6%. Each destinations' revenue contribution was Southeast Asia 47.9%, Europe 19.4%, Americas 15.7%, South Pacific 8.4%, China 4.7%, Japan 3.9%, The above Regional mix most likely represents the Korean outbound travel preference which prefer short haul destinations.
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 announced by Korea Tourism Organization (KNTO) and the "Total Departures from HANATOUR" is the figure which we report to Korean Association of Travel Agents (KATA).
<Market share rate based on the number of people>
Year
2020
2019
2018
Total
Departures
from
HANATOUR
Total
Departures
of Korea
Total
Departures
from
HANATOUR
Total
Departures
of Korea
Total
Departures
from
HANATOUR
Total
Departures
of Korea
646,444
3,688,606
5,143,867
26,920,415
5,878,013
26,928,389
Share rate
17.53%
19.11%
21.83%
3. Characteristics of the market
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.
Third, travel industry is easy to copy. Therefore, the company needs to find new elements that would differentiate the company among competitors.
Last, travel industry is volatile. Compared to other industries it is affected by political, diplomatic, various social issues, economic issue, diseases and other aspects as well.
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 Jeju Service Inc.
Travel Business
618,830
77.35
Hanatour ITC Service Inc.
Travel Business
24,400,000
100.00
Tour Marketing Korea Service Inc.
Travel Business
140,000
70.00
Web Tour Service Inc.
Travel Business
8,777,380
76.99
WorldisTour Co., Ltd.
Travel Business
8,000,001
50.00
Hana Shop Co., Ltd.
Retail Business
360,000
90.00
Mark Hotel Co., Ltd.
Hotel Business
40,000,000
100.00
Hana Finance Service Inc.
Finance Service
9,800,000
100.00
SM duty free Co., Ltd.
Duty Free Business
12,325,387
90.13
Hanatour USA Inc.
Travel Business
500,000
100.00
Hanatour Europe Ltd.
Travel Business
4,200
70.00
Hanatour PTE LTD.
Travel Business
2,142,000
100.00
Hanatour Japan Co., Ltd.
Travel Business
5,619,700
51.09
Hanatour CHINA
Travel Business
-
100.00
Hanatour PTY. Ltd.
Travel Business
600,000
100.00
Hanatour HongKong Co., Ltd.
Travel Business
5,000,000
100.00
Hanatour Taiwan Service Inc.
Travel Business
-
100.00
Beijing Hana Information Technology Co., Ltd.
Software Technical Development
-
100.00
Hanatour Service (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
1,267,980
97.54
HNT ITALIA-SOCIETA' A
RESPONSAVILITA' LIMITATA
Travel Business
-
51.00
HNT SAIPAN CORPORATION
Travel Business
-
60.00
3. Concurrent status of the executive management
Executive management
Concurrent Company
Name
Position
Company Name
Position
Assigned Task
SangHwan Park
Chairman
HANATOUR PTE LTD.
Director
General Management
JinKook Kim
Chief Executive Officer and Director
Hanatour China
Director
General Management
KyungKen Yuk
Vice President
Hanatour Business Service Inc.
Director
General Management
Web Tour Service Inc.
Director
General Management
SM duty free Co., Ltd.
Director
General Management
Hana Finance Service Inc.
Director
General Management
Hana Tourist Inc.
Director
General Management
CELINO INC
Director
General Management
Hanatour ITC Service Inc.
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
28th Term
27th Term
26th Term
Sales
73,947,230
462,940,363
542,073,146
Operating Expenses
149,962,759
457,256,969
515,443,456
Operating Income
(76,015,530)
5,683,395
26,629,690
Profit Before Tax
(131,191,120)
(31,876,068)
21,249,687
Income Tax Expense
(31,981,313)
2,779,238
7,853,355
Net Income
(99,209,807)
(34,655,306)
13,396,332
Net Income per Share(Won)
(7,619)
(3,131)
1,210
2. Financial position
(In thousand won)
Classification
28th Term
27th Term
26th Term
Current Assets
121,274,400
163,151,889
265,598,584
Non-Current Assets
226,035,622
295,927,124
207,107,324
Total Assets
347,310,022
459,079,014
472,705,908
Current Liabilities
95,992,675
226,927,968
287,134,993
Long-term Liabilities
92,035,510
98,159,130
3,643,375
Total Liabilities
188,028,185
325,087,098
290,778,368
Capital Stock
6,969,593
5,808,093
5,808,093
Other Paid-in Capital
186,465,030
58,700,030
58,700,030
Elements of Other Shareholder's Equity
(9,097)
(9,097)
(9,097)
Retained Earnings
(34,143,689)
69,492,890
117,428,515
Total Shareholder's Equity
159,281,837
133,991,916
181,927,541
Total Liabilities
and Shareholder's Equity
347,310,022
459,079,014
472,705,908
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, Director
General Management
Full-time
HeeSeok Kweon
Senior Vice Chairman, Director
General Management
Full-time
JinKook Kim
Chief Executive Officer and Director
General Management
Full-time
MiSun Song
Chief Executive Officer and Director
General Management
Full-time
KyungKen Yuk
Vice President and Director
General Management
Part-time
JeongWoo Byun
Auditor, Outside Director
Outside Director
Part-time
KeunHo Cho
Auditor, Outside Director
Outside Director
Part-time
MoonHyun Kim
Auditor, Outside Director
Outside Director
Part-time
SangMan Han
Auditor, Outside Director
Outside Director
Part-time
InJun Song
Non-Executive Director
Non-Executive Director
Part-time
YoungHo Kim
Non-Executive Director
Non-Executive Director
Part-time
ChanWoo Park
Non-Executive Director
Non-Executive Director
Ⅷ. LIST OF MAJOR SHAREHOLDERS
Shareholder
Number of shares
Percentage
Harmonia 1 limited company
and 13 people with a special relationship
3,927,061
28.17%
HANATOUR INC.
549,253
3.94%
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 Jeju Service Inc.
HANATOUR Service Inc.
77.35
618,830
Hanatour ITC Service Inc.
HANATOUR Service Inc.
100.00
24,400,000
Tour Marketing Korea Service Inc.
HANATOUR Service Inc.
70.00
140,000
OK Tour Service Inc.
HANATOUR Service Inc.
48.92
9,784
Web Tour Service Inc.
HANATOUR Service Inc.
76.99
8,777,380
WorldisTour Co., Ltd.
HANATOUR Service Inc.
50.00
8,000,001
Hana Shop Co., Ltd.
HANATOUR Service Inc.
90.00
360,000
Nextour Co., Ltd.
Web Tour Service Inc.
100.00
40,000
Hotel&Air Co., Ltd.
HANATOUR Service Inc.
50.00
1,000,000
Gyoyugyeohaeng Co., Ltd
HANATOUR Service Inc.
19.90
398,000
Mark Hotel Co., Ltd.
HANATOUR Service Inc.
100.00
40,000,000
Hana Finance Service Inc.
HANATOUR Service Inc.
100.00
9,800,000
SM duty free Co., Ltd.
HANATOUR Service Inc.
90.13
12,325,387
Triple Corp.
HANATOUR Service Inc.
3.84
6,000
Hanatong Co., Ltd.
HANATOUR Service Inc.
50.00
-
CELINO INC
HANATOUR Service Inc.
50.00
300,000
K Culture Industry Co., Ltd.
HANATOUR Service Inc.
40.00
-
YDH LTD
HANATOUR Service Inc.
20.00
-
Hani Tour Inc.
HANATOUR Service Inc.
9.54
19,078
SAM Consulting Co.,Ltd.
HANATOUR Service Inc.
7.69
1,667
KC HOSPITALITY CO.,LTD
HANATOUR Service Inc.
10.00
57,600
Jeju Channel Inc.
Hanatour Jeju Service Inc.
8.06
50,000
Dream Co., Ltd.
HANATOUR Service Inc.
2.08
2,250
Hanatour Jeju Service Inc.
2.08
2,250
2. Overseas
Name of the Company
Ownership Company
Region
Ownership Ratio (%)
No. of Shares
Hanatour USA Inc.
HANATOUR Service Inc.
LA
100.00
500,000
Hanatour Europe Ltd.
HANATOUR Service Inc.
London
70.00
4,200
Hanatour PTE LTD.
HANATOUR Service Inc.
Singapore
100.00
2,142,000
Hanatour Japan Co., 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 HongKong Co., Ltd.
HANATOUR Service Inc.
Hong Kong
100.00
5,000,000
Hanatour Taiwan Service 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 Technology Co., Ltd.
HANATOUR Service Inc.
China
100.00
-
Hanatour Service (M) Sdn.Bhd.
HANATOUR Service Inc.
Malaysia
100.00
1,500,000
Hanatour Janpan System Vietnam
HANATOUR JAPN CO., LTD
Vietnam
100.00
-
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
97.54
1,267,980
VISION TOUR, INC.
Hanatour USA Inc.
LA
100.00
300,000
HANA Zhuhai Marketing & Network Co., Ltd
HANATOUR HONGKON CO., LTD.
Zhuhai
100.00
-
HNT ITALIA - SOCIETA' A
RESPONSABILITA' LIMITATA
HANATOUR Service Inc.
Roma
51.00
-
HNT Swiss GmbH
HANATOUR EUROPE LTD
Switzerland
100.00
-
HNT SAIPAN CORPORATION
HANATOUR Service Inc.
Saipan
60.00
-
BREAKER INC.
HANATOUR JAPAN
Japan
2.64
-
Ⅹ. MAJOR CREDITORS
Not applicable.
XI. IMPORTANT EVENTS AFTER THE SETTLEMENT OF
ACCOUNTS PERIOD
(1) WorldisTour Co., Ltd. which is one of subsidiaries of the Group resolved to dissolve on January 5, 2021.
(2) The parent company decided to reduce 170,000,000,000won of the capital reserve and convert it into retained earnings at the general meeting of shareholders on March 26, 2021.
XII. OTHER IMPORTANT FACTS ABOUT THE BUSINESS
None.
Independent Auditors' Report
Based on a report originally issued in Korean
To the Shareholders and Board of Directors of
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, 2020 and 2019, the consolidated statements of comprehensive income (loss), 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 of December 31, 2020 and 2019, 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.
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 Jung Wook Do.
KPMG Samjong Accounting Corp.
Seoul, Korea
March 18, 2021
This report is effective as of March 18, 2021, 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, 2020 and 2019
(In thousands of won)
2020
2019
Assets
Cash and cash equivalents
W
101,851,025
110,846,773
Short-term financial instruments
18,114,794
105,607,931
Trade receivables
9,315,225
88,143,088
Other receivables
9,169,709
9,503,873
Finance lease receivables
2,137,718
1,911,235
Inventories
2,013,920
33,843,943
Advance payments
9,797,848
31,064,346
Other current assets
3,529,004
10,599,262
Other financial assets
5,123,578
8,877,273
Current tax assets
633,823
517,328
Assets held for sale
46,402,958
5,134,924
Current financial assets at FVTPL
236,154
2,181,987
Total current assets
208,325,756
408,231,963
Non-current financial assets at FVTPL
4,529,550
4,256,975
Financial assets at FVOCI
1,207,318
1,317,191
Investments in associates and joint ventures
3,099,867
6,168,614
Long-term finance lease receivables
1,336,082
1,926,002
Long-term other receivables
1,328,850
3,094,053
Investment property, net
8,498,609
25,708,777
Property and equipment, net
98,387,081
146,338,304
Right-of-use assets
263,965,044
323,826,602
Intangible assets
41,958,023
40,533,487
Long-term advance payments
-
4,000,000
Other financial assets
28,196,140
31,242,031
Deferred tax assets
42,376,646
10,769,354
Other non-current assets
51,949
142,505
Total non-current assets
494,935,159
599,323,895
Total assets
W
703,260,915
1,007,555,858
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Financial Position, Continued
As of December 31, 2020 and 2019
(In thousands of won)
2020
2019
Liabilities
Trade payables
W
7,021,596
66,698,743
Other payables
61,872,256
40,764,796
Income tax payables
448,134
3,784,025
Deposits received for travel
6,236,819
104,370,542
Advances received
26,524,195
22,300,072
Short-term borrowings
23,900,152
90,837,505
Current portion of long-term borrowings
6,816,375
3,389,707
Finance lease liabilities
22,784,004
47,131,157
Provisions
2,142,207
490,586
Other financial liabilities
2,325,020
3,774,508
Other current liabilities
13,191,064
23,960,522
Total current liabilities
173,261,822
407,502,163
Long-term other payables
6,376,512
8,287,017
Long-term borrowings
94,865,826
88,668,268
Debentures
311,242
1,363,052
Long-term provisions
433,008
1,856,401
Long-term finance lease liabilities
299,760,033
279,690,103
Provision for long-term employee benefits
2,316,695
1,945,053
Other financial liabilities
475,680
202,000
Other non-current liabilities
146,106
162,353
Total non-current liabilities
404,685,102
382,174,247
Total liabilities
577,946,924
789,676,410
Equity
Capital stock
6,969,593
5,808,093
Other contributed capital
205,366,093
77,487,067
Components of other capital
2,210,944
538,389
Retained earnings
(79,507,585)
96,937,522
Equity attributable to the owners of
the Parent Company
135,039,045
180,771,071
Non-controlling interests
(9,725,054)
37,108,377
Total equity
125,313,991
217,879,448
Total liabilities and equity
W
703,260,915
1,007,555,858
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)For the years ended December 31, 2020 and 2019
(In thousands of won, except earnings per share data)
2020
2019
Operating revenue
W
109,571,614
614,602,328
Operating expense
224,438,313
607,142,294
Bad debt expense
13,343,343
5,801,390
Other operating expense
211,094,970
601,340,904
Operating income
(114,866,699)
7,460,034
Interest income by effective interest method
1,875,972
2,981,725
Other financial income
391,404
888,325
Financial expense
9,064,506
8,719,195
Loss from investment in associates and joint ventures
(4,137,405)
(2,795,157)
Other income
11,708,098
15,704,787
Other expense
74,710,136
14,875,496
Other bad debt expense
718,002
-
Income (loss) before income taxes
(189,521,274)
645,023
Income taxes of continuing operations
(30,709,687)
6,223,690
Net loss
W
(218,571,040)
(11,951,852)
Net loss from continuing operations
(158,811,587)
(5,578,667)
Net loss from discontinued operations
(59,759,453)
(6,373,185)
Other comprehensive income after tax expense
3,193,888
3,235,326
Items that will never be reclassified to profit of loss:
Loss on valuation financial assets at FVOCI
(70,117)
(426,975)
Items that are or may be reclassified subsequently
to profit of loss:
Changes in valuation of equity-accounted investees, net
-
12,937
Gain on foreign operations translation, net
3,264,005
3,649,364
Total comprehensive income (loss)
W
(215,377,152)
(8,716,526)
Net income (loss) attributable to:
Owners of the Parent Company
(172,012,334)
(8,027,404)
Non-controlling interests
(46,558,706)
(3,924,448)
W
(218,571,040)
(11,951,852)
Comprehensive income (loss) attributable to:
Owners of the Parent Company
(170,353,428)
(5,956,489)
Non-controlling interests
(45,023,724)
(2,760,037)
W
(215,377,152)
(8,716,526)
Earnings (losses) per share
Basic earnings (losses) per share attributable to (in won) :
(13,210)
(725)
Continuing operation (in won)
(9,232)
290
Discontinued operation (in won)
(3,978)
(1,015)
Diluted earnings (losses) per share attributable to (in won) :
W
(13,210)
(725)
Continuing operation (in won)
(9,232)
290
Discontinued operation (in won)
(3,978)
(1,015)
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the years ended December 31, 2020 and 2019
(In thousands of won)
Capital Stock
Other contributed capital
Components of other capital
Retained earnings
Non-controlling interests
Total shareholders' equity
January 1, 2019
W
5,808,093
77,349,083
(1,532,526)
118,245,244
40,010,312
239,880,206
Dividends
-
-
-
(6,640,159)
-
(6,640,159)
Interim dividends
-
-
-
(6,640,159)
-
(6,640,159)
Dividends of subsidiaries
-
-
-
-
(1,507,428)
(1,507,428)
Stock compensation expense
-
155,749
-
-
146,064
301,813
Net income
-
-
-
(8,027,404)
(3,924,448)
(11,951,852)
Gain on foreign operations
translation
-
-
2,225,621
-
1,423,743
3,649,364
Changes in valuation of
equity accounted investees
-
-
12,937
-
-
12,937
loss on valuation financial
assets at FVOCI
-
-
(167,643)
-
(259,332)
(426,975)
Acquisition of treasury stock
-
(416)
-
-
(534)
(950)
Paid-in capital increase of
subsidiaries
-
(17,349)
-
-
17,349
-
Changes in scope of consolidation
-
-
-
-
1,202,651
1,202,651
December 31, 2019
W
5,808,093
77,487,067
538,389
96,937,522
37,108,377
217,879,448
January 1, 2020
W
5,808,093
77,487,067
538,389
96,937,522
37,108,377
217,879,448
Dividends
-
-
-
(4,426,772)
-
(4,426,772)
Dividends of subsidiaries
-
-
-
-
(1,751,550)
(1,751,550)
Stock compensation expense
-
117,236
-
-
109,947
227,183
Net loss
-
-
-
(172,012,334)
(46,558,706)
(218,571,040)
Gain on foreign operations
translation
-
-
1,713,558
-
1,550,447
3,264,005
Loss on valuation financial
assets at FVOCI
-
-
(54,652)
-
(15,465)
(70,117)
Derecognition of financial
assets at FVOCI
-
-
-
(6,000)
-
(6,000)
Acquisition of treasury stock
-
(91)
-
-
-
(91)
Paid-in capital increase of
Parent company
1,161,500
127,765,000
-
-
-
128,926,500
Paid-in capital increase of
Subsidiaries
-
(3,119)
-
-
3,119
-
Changes in scope of consolidation
-
-
13,649
-
(171,224)
(157,575)
December 31, 2020
W
6,969,593
205,366,093
2,210,944
(79,507,584)
(9,725,055)
125,313,991
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2020 and 2019
(In thousands of won)
2020
2019
Cash flows from operating activities
Net loss
W
(218,571,040)
(11,951,852)
Additions of expenses not involving cash outflows and others
157,573,133
125,395,547
Deduction of incomes not involving cash inflows and others
(6,077,486)
(9,150,771)
Movements in operating assets and liabilities:
Decrease in trade receivables
72,070,031
7,011,917
Decrease in other receivables
2,726,123
667,325
Decrease in inventories
28,683,518
17,324,541
Decrease (increase) in advance payments
22,781,087
(2,650,065)
Increase in long-term advance payments
-
(9,472,559)
Decrease (increase) in other current assets
6,201,879
(438,816)
Increase in other non-current assets
(21,345)
(508,765)
Decrease in trade payables
(59,455,334)
(32,701,319)
Decrease in other payables
(29,127,075)
(3,324,301)
Decrease in deposits received for travel
(89,194,333)
(29,632,734)
Increase (decrease) in advances received
4,237,517
(3,720,082)
Increase (decrease) in other financial liabilities
(433,003)
4,289,423
Decrease in other current liabilities
(11,924,107)
(7,376,238)
Decrease in provisions
(1,421,352)
(1,439,177)
Increase (decrease) in long-term other payables
(398,385)
2,711,288
Decrease in other long-term employee benefit
(29,340)
(155,500)
(122,379,512)
44,877,862
Interest expense paid
(8,658,314)
(10,926,055)
Interest income received
1,923,042
3,107,324
Dividend income received
553,872
512,010
Income taxes paid
(4,307,113)
(8,929,854)
Net cash provided by operating activities
W
(132,868,025)
28,641,287
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
For the years ended December 31, 2020 and 2019
(In thousands of won)
2020
2019
Cash flows from investing activities
Cash inflows from investing activities:
Decrease in short-term financial instruments
W
198,366,449
269,317,824
Decrease in other receivables
11,964
466,260
Disposal of financial assets at FVTPL
1,813,578
10,052,783
Disposal of investment in associates and joint venture
200,995
537,160
Disposal of financial assets at FVOCI
14,000
-
Capital reduction of associates and joint venture
-
5,201,270
Disposal of property and equipment
5,798,643
18,146,478
Disposal of intangible assets
-
5,489
Disposal of intangible assets being acquired
35,401
2,773
Decrease in finance lease receivables
1,272,889
2,213,198
Decrease in other financial assets
14,673,913
3,566,715
Disposal of assets held for sale
3,500,000
-
Cash outflows for investing activities:
Increase in short-term financial instruments
106,460,284
248,239,459
Increase in other receivables
1,477,276
6,305
Acquisition of financial assets at FVTPL
750,000
7,488,200
Acquisition of financial assets at FVOCI
221
804,240
Acquisition of investment in associates and joint venture
-
5,064,000
Acquisition of property and equipment
4,042,829
110,882,808
Acquisition of Investment property
-
6,924,548
Acquisition of intangible assets
16,971,962
28,512,859
Acquisition of prepaid lease assets.
-
3,498,000
Increase in other financial assets
8,951,556
10,818,123
Net cash used in investing activities
W
87,033,704
(112,728,592)
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
For the years ended December 31, 2020 and 2019
(In thousands of won)
2020
2019
Cash flows from financing activities
Cash inflows from financing activities:
Proceeds from short-term borrowings
W
107,240,149
216,929,251
Proceeds from long-term borrowings
12,708,305
80,576,671
Paid-in capital increase of parent company
128,926,500
-
Paid-in capital increase of subsidiaries
-
1,202,651
Cash outflows for financing activities:
Repayment of short-term borrowings
176,660,646
199,112,653
Repayment of current portion of long-term borrowings
2,300,535
2,677,044
Repayment of long-term borrowings
1,105,070
-
Repayment of finance lease liabilities
23,406,065
53,541,985
Payment of cost of stock issuing
6,338
-
Acquisition of treasury stocks
-
950
Payment of stock issuance expense
-
-
Payment of dividends
7,453,827
14,787,746
Net cash provided by financing activities
37,942,473
28,588,195
Increase (decrease) in cash on changes in scope of consolidation
(18,657)
7,125,967
Net decrease in cash and cash equivalents
(7,910,505)
(48,373,143)
Cash and cash equivalents at beginning of year
110,846,773
157,699,693
Effect of exchange rate change
(1,085,243)
1,520,223
Cash and cash equivalents at end of year
W
101,851,025
110,846,773
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