REG - Hanatour Service Inc - 2015 Business Report <Origin Href="QuoteRef">039130.KS</Origin> - Part 1

Hanatour ServiceAnnouncement

01/04/2016 07:05

RNS Number : 8103T
Hanatour Service Inc.
01 April 2016
Annual Report
I. OUTLINE OF COMPANY
1. Purpose of Company
Purpose 
Remark
1) General travel business
2) Airline and ship ticket sales business 
3) Souvenir Sales
4) Issuing of Selling Offers
5) Real estate dealing and lease
6) Optional Communication Business
7) Computer programming and supply
8) Mail order
9) Printing and publishing business
10) Issuing of Periodicals
11) The transportation business
12) Institute for traveling specialist
13) Internet (contents and supply, marketing)
14) E-commerce and information processing
15) Advertisement (Internet advertisement)
16) Information and communication
17) Homepage and web-hosting
18) Warehousing
19) Tourists Hotel and Lodging business
20) Operation and management of Tourists Hotels &Lodging and other incidental facilities
21) Tourists Hotels & Lodging facilities related business management
22) Domestic/Overseas real estate Investment , Operation and Property Management 
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 Programs related cultural products & contents)
27) Digital Contents production and sales
28) Performing facilities Operation
29) Planning Performances
30) Character business
31) Exhibition and Events agent business
32) Internet Broadcasting
33) Tourism Development and Incidental Business(marketing counsel, planning and consulting)
34) Education service
35) Operation of E-learning lifelong Education facilities
36) Gift certificate sales
37) Wedding consulting
38) Amusement Park Operation
39) Comprehensive leisure facilities and operations management
40) Tourist Development Project
41) Comprehensive recreation
42) International Meeting Planning
43) Camping car
44) Bonded and tourism product vendors
45) Accommodation
46) Accommodation reservation Service
47) Portal andInternet Information Service
48) Franchisees
49) Restaurants
50) Shopping Center leasingand sublease on a deposit basisbusiness
51) Ticket sales related to Culture, Arts, Sports Events
52) Database Development and sales related to Culture, Arts, Sports
53) Investment of Cultural projects including Performances and film production, 
54) Organization of Events and Sponsors 
55) All rights reserved performance Importand agent business
56) Copyright and neighboring rights of copyrightagent business 57) Membership sales and brokerage arrangements
58) Study-Abroad agent business
59) Lifelong education facilities operating
60) Financing loan and other financial service business
61) Electronic financial business operator
62) Performance, Concert, Exhibition and etc. planning and promotion agency
63) Credit Card Business
64) Real Estate Development Business
65) All other incidental businesses
2. History of Company
A. Changes after the establishment
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
B. Change of trade name
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
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.
3. Total Number of Stocks, Etc.
A. Total number of stocks
(As of December 31, 2015)
(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. Capital deduction
-
-
2. Retirement of earning
-
-
3. Repayment of redeemed stocks
-
-
4. Others
-
-
IV. Total number of stocks issued (II-III)
11,616,185
11,616,185
V. Equity stocks
576,163
576,163
VI. Number of shares distributed (IV-V)
11,040,022
11,040,022
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
-
Face amount division
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
-
Common stock
3,600,000
500
-
Face amount division
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
Capital increase without consideration
Common stock
1,977,029
500
-
-
Jan. 25, 2006
Exercise stock options
Common stock
137,800
500
6,171
-
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]
4. Matters on Dividends
A. Matters on dividend for three recent fiscal year
Classification
23rd Term
22nd Term
21st Term
Face amount per stock (won)
500
500
500
Current net income (million won)
34,162
33,438
33,957
Net income per share (won)
2,877
2,978
2,989
Total amount of cash dividend (million won)
16,560
14,478
12,511
Total amount of stock dividend (million won)
-
-
-
Tendency of stock dividend (%)
52,2
43.3
36,8
Yield rate of cash dividend (%)
Common stock
1.3
1.7
1.7
Preferred stock
-
Yield rate of stock dividend (%)
Common stock
-
Preferred stock
-
Cash dividend per share (won)
Common stock
1,500
1,300
1,100
Preferred stock
-
-
-
Stock dividend per share
Common stock
-
-
-
Preferred stock
-
-
-
 
5. Status of Employees
(As of December 31, 2015)
 (Unit: persons)
Classification
No. of employees
Office & Operation
Etc
Total
Men
1,062 
35
1,097
Women
1,293
103
1,396
Total
2,355
138
2,493
6. Organization 
 CHAIRMAN & CEO - GLOBAL STRATEGIC PLANNING DIVISION
 l
 PRESIDENT & CEO
 l
 GLOBAL MANAGEMENTDIVISION , FINANCE DIVISION , GLOBAL GENERAL SALES DIVISION
 l
 AGENCY SALES DIVISION , OVERSEAS BUSINESS DIVISION
 
II. CONTENTS OF BUSINESS
1. Summary of Business
We, HANATOUR Service Inc. are the market-leading travel/leisure company in Korea with over 140,000 worldwide travel products selling through our website and approximately 8,000 retail travel agencies located across the country.
Our primary business consists of assembling outbound package tours for Korean travelers. The largest scale of operations in the market enables us to negotiate favorable rates with airline carriers, hotel operators and local transportation providers. We package air tickets, hotel rooms and land services and sell them to the end-user by distributing the products through our network of retail travel agents.
2015 had started its 1st quarter with recovered outbound demands and high performance growth rates, however external issues like MERS outbreak in June and the Paris Terrorists Attack in November has impacted the Summer and Winter peak seasons having negative impacts on outbound travel demands.
Even in the situations with difficulties, Hanatour managed to send 2.3 million package travelers YOY growth of 21.0% and 373K FIT travelers YOY growth of 25.5% to overseas destinations.
Regional volume split was as below: Southeast Asia 30.9%, Japan 28.2%, China 19.2%, Europe 7.6%, Domestic 6.9%, South Pacific 4.6%, and Americas 2.6% respectively. Each destinations' revenue contribution was Southeast Asia 32.5%, China 17.6%, Europe 17.1%, Japan 16.5%, South Pacific 8.3%, Americas 6.3%, and Domestic 1.7% showing that followed by 2014, 2015 continued on with its popularity of short haul destinations. Especially Japan, with its low currency value, has shown YOY volume growth of 71.6% driving overall volume growth from beginning of 2015.
Various external issues had influence over 2015. However Hanatour Inc. has managed to gain market share and show volume growth with continuous development of travel products and quality control over customer services.
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). 
<Market share rate based on the number of persons>
Year
2015
2014
2013
Persons
Total
Departures
of Korea
Total
Departures
from
HANATOUR
Total
Departures
of Korea
Total
Departures
from
HANATOUR
Total
Departures
of Korea
Total
Departures
from
HANATOUR
3,734,603
17,885,645
2,973,581
14,726,088
2,629,227
13,525,297
Share rate
20.88%
20.19%
19.44%
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.
Third, travel products are easily plagiarized. Travel products need to have special features since they are easily plagiarized in every way therefore it is more important in this industry to have own distinctive aspects as well as value.
Total number of outbound travelers have recorded CAGR of 6.1% in the last 5 years and KTO is expects the outbound travelers growth will be 5.1% per annum until 2020. Increase in personal income, longer leisure time, high supply of air seat capacity lead by LCCs and other possible growth factors will allow Korean outbound market to grow as we expect in the future.
4. Contents and prospect of new business and others
- None.
III. FINANCIAL DATA
Notice to Readers
This report is effective as of March 16, 2015, the auditor's report date. Certain subsequent events or circumstances may have occurred between the auditor's report date and the time the auditor's report is read. Such events or circumstances could significantly affect the financial statements and may result in modifications to the auditor's report. HANATOUR SERVICE INC. AND ITS SUBSIDIARIES
HANATOUR SERVICE INC. AND ITS SUBSIDIARIES
CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2015 AND 2014,
AND FOR THE YEARS ENDED 
DECEMBER 31, 2015 AND 2014
ATTACHMENT: INDEPENDENT AUDITORS' REPORT
HANATOUR SERVICE INC.
INDEPENDENT AUDITORS' REPORT
English Translation of Independent Auditors' Report Originally Issued in Korean on March 17, 2016
To the Shareholders and the Board of Directors of
Hanatour Service Inc.:
We have audited the accompanying consolidated financial statements of Hanatour Service Inc. (the "Company") and its subsidiaries, which comprise the consolidated statements of financial position as of December 31, 2015 and 2014 and the consolidated statements of comprehensive income, consolidated statements of changes in equity and consolidated statements of cash flows, all expressed in Korean won, for the years ended December 31, 2015 and 2014 and a summary of significant accounting policies and other explanatory information. 
Management's Responsibility for the Consolidated Financial statements
Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Korean International Financial Reporting Standards ("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.
Auditors' Responsibility
Our responsibility is to express an audit opinion on these financial statements based on our audits. We conducted our audits in accordance with Korean Auditing Standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement, whether due to fraud or error.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements 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 entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. 
Opinion
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company and its subsidiaries as of December 31, 2015 and 2014, and its financial performance and its cash flows for the years then ended in accordance with K-IFRS.
March 17, 2016
Notice to Readers
This report is effective as of March 17, 2016, the auditors' report date. Certain subsequent events or circumstances may have occurred between the auditors' report date and the time the auditors' report is read. Such events or circumstances could significantly affect the financial statements and may result in modifications to the auditors' report.
HANATOUR SERVICE INC. AND ITS SUBSIDIARIES (the "Group")
CONSOLIDATED FINANCIAL STATEMENTS 
AS OF DECEMBER 31, 2015 AND 2014,
AND FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
The accompanying consolidated financial statements, including all footnote disclosures, were prepared by, and are the responsibility of, the Group.
Park, Sang Hwan 
Choi, Hyun Syuk
CHIEF EXECUTIVE OFFICERS
HANATOUR SERVICE INC.
HANATOUR SERVICE INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
AS OF DECEMBER 31, 2015 AND 2014
ASSETS
December 31, 2015
December 31, 2014
(In thousands of Korean won)
CURRENT ASSETS:
 Cash and cash equivalents
146,485,490
113,930,509
 Short-term financial instruments
60,688,614
107,352,265
 Trade receivables
57,383,585
49,887,596
 Other receivables
23,225,142
17,742,158
 Finance lease receivables
1,170,671
40,215
 Inventories
9,305,415
1,020,045
 Advanced payments
34,070,557
21,396,505
 Other current assets
7,702,931
5,027,830
 Other financial assets
104,164
-
 Current tax assets
113,158
41,981
 Total current assets
340,249,727
316,439,104
NON-CURRENT ASSETS:
Financial assets classified at fair value through profit or loss ("FVTPL")
1,015,625
-
 Available for sale ("AFS") financial assets
7,917,997
8,284,209
 Investment in associates and joint ventures
21,165,917
21,756,714
 Long-term finance lease receivables
1,844,267
255,959
 Investment property
2,393,305
4,138,245
 Property and equipment
59,329,323
46,310,983
 Intangible assets
16,929,209
12,269,509
 Other financial assets
44,226,793
21,002,358
 Deferred tax assets
8,306,858
5,831,658
 Other non-current assets
975,059
1,103,248
 Total non-current assets
164,104,353
120,952,883
 Total assets
504,354,080
437,391,987
(Continued)
HANATOUR SERVICE INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (CONTINUED)
AS OF DECEMBER 31, 2015 AND 2014
LIABILITIES AND EQUITY
December 31, 2015
December 31, 2014
(In thousands of Korean won)
CURRENT LIABILITIES:
 Trade payables
75,471,166
75,825,634
 Other payables
29,728,126
21,371,303
 Income tax payable
10,189,301
6,231,268
 Deposits received for travel
96,002,967
82,970,308
 Advance receipts
21,028,667
19,951,351
 Short-term borrowings
19,226,920
13,325,713
 Current portion of long-term borrowings
2,392,078
1,485,989
 Finance lease liabilities
656,244
635,565
 Provision
2,297,827
1,993,855
 Other financial liabilities
2,743,830
4,536,979
 Other current liabilities
15,703,690
14,641,211
 Total current liabilities
275,440,816
242,969,176
NON-CURRENT LIABILITIES:
 Long-term other payables
2,871,608
2,056,718
 Long-term borrowings
6,679,283
1,737,289
Long-term finance lease liabilities
1,514,806
2,081,741
Provision for long-term employee benefits
560,557
548,296
 Total non-current liabilities
11,626,254
6,424,044
 Total liabilities
287,067,070
249,393,220 
EQUITY:
 Capital stock
5,808,093
5,808,093
 Other contributed capital
57,322,026
57,382,591
 Components of other capital
(1,155,344)
(1,542,404)
 Retained earnings
134,943,490
118,640,879
Equity attributable to the owners of the Parent  Company
196,918,265
180,289,159
 Non-controlling interests
20,368,745
7,709,608
 Total equity
217,287,010
187,998,767
 Total liabilities and equity
504,354,080
437,391,987
(Concluded)
HANATOUR SERVICE INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
2015
2014
(In thousands of Korean won,
except per share amounts)
OPERATING REVENUE
459,425,682
385,457,930
OPERATING EXPENSE
414,676,177
345,013,490
OPERATING INCOME
44,749,505
40,444,440
Financial income
3,721,286
4,344,607
Financial expense
405,422
271,631
Profit and loss from investment in 
associates and joint ventures
(472,756)
380,997
Other income
7,280,498
4,920,766
Other expense
7,927,013
3,604,016
INCOME BEFORE INCOME TAX EXPENSE
46,946,098
46,215,163
INCOME TAX EXPENSE
12,784,389
10,827,875
NET INCOME
34,161,709
35,387,288
(Continued)
HANATOUR SERVICE INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
2015
2014
(In thousands of Korean won, 
except per share amounts)
OTHER COMPREHENSIVE INCOME (LOSS) AFTER INCOME TAX EXPENSE
559,780
(890,447)
Items that will not be reclassified subsequently 
to profit or loss:
-
-
Items that may be reclassified subsequently to 
profit or loss:
559,780
(890,447)
Changes in valuation of equity-accounted investees, 
net
(25,846)
7,238
Gain (loss) on foreign operations translation, net
903,761
(347,940)
Loss on valuation of AFS
(318,135)
(549,745)
TOTAL COMPREHENSIVE INCOME
34,721,489
34,496,841
NET INCOME ATTRIBUTABLE TO:
 Owners of the Parent Company
31,740,498
33,437,531
 Non-controlling interests
2,421,211
1,949,757
34,161,709
35,387,288
COMPREHENSIVE INCOME ATTRIBUTABLE TO:
 Owners of the Parent Company
32,127,557
32,686,574
 Non-controlling interests
2,593,932
1,810,267
34,721,489
34,496,841
EARNINGS PER SHARE ATTRIBUTABLE TO THE 
OWNERS OF THE PARENT COMPANY:
Basic earnings per common share
2,877
2,978
Diluted earnings per common share
2,868
2,964
(Concluded)
HANATOUR SERVICE INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
Capital stock
Other
contributed 
capital
Components of  other capital
Retained
Earnings
Non-controlling
interests
Total
(In thousands of Korean won)
January 1, 2014
5,808,093 
82,372,554
(791,446)
98,776,490
6,461,431
192,627,122
Payment of cash dividend
-
-
-
(6,804,601)
- 
(6,804,601)
Payment of interim cash  dividend
-
-
-
(6,768,541)
- 
(6,768,541)
Cash dividend of subsidiaries
-
-
-
-
(568,437)
(568,437)
Stock issuance expense of  subsidiaries
-
(43,200)
-
-
- 
(43,200)
Acquisition of treasury stock
-
(32,996,692)
-
-
- 
(32,996,692)
Exercised stock option rights
-
5,059,730
-
-
- 
5,059,730
Gain on disposal of treasury  stock
-
982,385
-
-
- 
982,385
Stock compensation expense
-
1,989,504
-
-
18,194
2,007,698
Net income
-
-
-
33,437,531
1,949,757
35,387,288
Loss on foreign business  translation
-
-
(208,451)
-
(139,489)
(347,940)
Changes in valuation of equity- accounted investees
-
-
7,238
-
- 
7,238
Loss on valuation of AFS  financial assets
-
-
(549,745)
-
- 
(549,745)
Additional acquisitions of  investments in subsidiaries
-
(4,065)
-
-
(935)
(5,000)
Others
-
22,375
-
-
(10,913)
11,462
December 31, 2014
5,808,093 
57,382,591
(1,542,404)
118,640,879
7,709,608
187,998,767
January 1, 2015
5,808,093 
57,382,591
(1,542,404)
118,640,879
7,709,608
187,998,767
Payment of cash dividend
- 
- 
- 
(7,709,871)
- 
(7,709,871)
Payment of interim cash  dividend
- 
- 
- 
(7,728,015)
- 
(7,728,015)
Cash dividend of subsidiaries
- 
- 
- 
- 
(655,207)
(655,207)
Stock issuance expense of  subsidiaries
- 
(793,069)
- 
- 
(131,561)
(924,630)
Exercised stock option rights
- 
(180,083)
- 
- 
(6,060)
(186,143)
Gain on disposal of treasury  stock
- 
114,307
- 
- 
- 
114,307
Stock compensation expense
- 
1,242,859
- 
- 
8,599
1,251,458
Net income
- 
- 
- 
31,740,498
2,421,211
34,161,709
Gain on foreign business  translation
- 
- 
731,041
- 
172,721
903,762
Changes in valuation of equity- accounted investees
- 
- 
(25,846)
- 
- 
(25,846)
Loss on valuation of AFS  financial assets
- 
- 
(318,135)
- 
- 
(318,135)
Paid-in capital increase of subsidiaries
- 
(391,261)
- 
- 
6,058,152
5,666,891
Changes in scope of  consolidation
- 
- 
- 
- 
4,737,964
4,737,964
Others
- 
(53,318)
- 
- 
53,318
- 
December 31, 2015
5,808,093
57,322,026
(1,155,344)
134,943,490
20,368,746
217,287,011
HANATOUR SERVICE INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
2015
2014
(In thousands of Korean won)
CASH FLOWS FROM OPERATING ACTIVITIES:
 Cash generated from operations:
Net income
34,161,709
35,387,288
Additions of expenses not involving cash outflows and  others
33,297,681
27,281,787
 Deduction of incomes not involving cash inflows and  others
(4,439,551)
(5,506,418)
 Movements in operating assets and liabilities:
 Decrease(increase) in trade receivables
(7,064,784)
10,420,094
 Decrease(Increase) in other receivables
(816,318)
797,186
 Increase in inventories
(8,233,323)
(631,927)
 Increase in advance payments
(15,232,187)
(2,341,081)
 Increase in other current assets
(2,565,407)
(1,914,568)
 Decrease in other non-current assets
71,870
70,063
 Increase(decrease) in trade payables
(3,136,731)
22,225,048
 Increase in other payables
9,347,976
6,078,719
 Increase in deposits received for travel
12,983,897
16,914,105
 Increase in advance receipts
726,079
3,347,692
 Increase in other financial liabilities
152,074
2,112,338
 Decrease in other current liabilities
(5,520,243)
(1,815,139)
 Decrease in provisions
(378,782)
(485,896)
 Decrease in long-term other payables
(10,897)
(56,442)
 Decrease in other long-term employee benefit
(34,857)
(57,365)
43,308,206
111,825,484
 Interest expense paid
(269,654)
(194,300)
 Interest income received
3,570,583
4,432,124
 Dividend income received
95,179
142,788
 Income taxes paid
(11,706,714)
(12,551,297)
34,997,600
103,654,799
(Continued)
HANATOUR SERVICE INC. AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
FOR THE YEARS ENDED DECEMBER 31, 2015 AND 2014
2015
2014
(In thousands of Korean won)
CASH FLOWS FROM INVESTING ACTIVITIES:
 Cash inflows from investing activities:
 Decrease in short-term financial instruments
125,077,303
96,289,244
 Decrease in other receivables 
5,456,889
9,085,258
 Disposal of investment in associates and joint venture
51
-
 Disposal of property and equipment
429,878
340,750
 Disposal of intangible assets
-
116,267
 Decrease in finance lease receivables
198,505
21,948
 Decrease in other financial assets
2,523,702
2,815,719
Net cash inflow due to business combination
4,585,882
-
138,272,210
108,669,186
 Cash outflows for investing activities:
 Increase in short-term financial instruments
77,989,964
105,859,334
 Increase in other receivables
11,016,189
12,718,439
 Acquisition of FVTPL
1,000,000
-
 Acquisition of AFS financial assets
250,000
3,450,000
 Acquisition of investment in associates and joint venture
-
1,202,291
 Acquisition of investment property
-
2,670,373
 Acquisition of property and equipment
16,413,808
10,316,656
 Acquisition of intangible assets
8,098,714
3,653,240
 Increase in other financial assets
24,448,819
8,341,018
(139,217,494)
(148,211,351)
(945,284)
(39,542,165)
CASH FLOWS FROM FINANCING ACTIVITIES:
 Cash inflows from financing activities:
 Proceeds from short-term borrowings
16,866,349
13,057,420
 Proceeds from long-term borrowings
7,083,021
2,517,970
Paid-in capital increase of subsidiaries
5,917,638
-
 Exercised stock option rights
52,446
6,333,900
29,919,454
21,909,290
 Cash outflows for financing activities:
 Repayment of short-term borrowings
12,257,904
5,373,449
 Repayment of current portion of long-term borrowings
1,634,956
343,925
 Repayment of finance lease liabilities
1,028,793
743,161
 Acquisition of treasury stock
-
32,996,692
 Payment of stock issuance expense
927,389
43,200
 Acquisition of investment in subsidiaries
337,895
5,000
 Payment of dividends
16,085,969
14,141,555
(32,272,906)
(53,646,982)
(2,353,452)
(31,737,692)
NET INCREASE IN CASH AND CASH 
 EQUIVALENTS
31,698,864
32,374,942
CASH AND CASH EQUIVALENTS, AT BEGINNING OF 
 YEAR
113,930,509
81,852,584
EFFECT OF EXCHANGE RATE CHANGE ON CASH 
AND  CASH EQUIVALENTS
856,117
(297,017)
CASH AND CASH EQUIVALENTS, AT END OF YEAR
146,485,490
113,930,509
(Concluded)
. MANAGEMENT 
The directors are elected at a shareholder's meeting by a majority vote of the shareholders present or represented, so long as such number represents at least one quarter of all issued and outstanding shares with voting rights.
Name
Position
Date elected as a director or executive officer
SangHwan Park
Chairman, Chief Executive Officer and Director
October 25, 1993(Officer and Director)
HeeSeok Kweon
Vice Chairman, Director
December 23, 1995(Director)
HuynSyuk Choi
President, Chief Executive Officer and Director
January 1, 2012(Officer)
October 25, 1993(Director)
Han Seol Jung
Outside Director
March 24, 2015
HuiYoung Choi
Outside Director
March 24, 2015
JangSuk Han
Outside Director
March 25, 2016
JeongWoo Byun
Outside Director
March 25, 2016
 Outside Director HuiYoung Choi resigned due to personal reasons(January 8, 2016).
. List of major shareholders 
Shareholder
Number of shares
Percentage
Sanghwan Park and 19 people with a special relationship
2,176,471
18.74%
HANATOUR INC.
576,163
4.96%
MORGAN STANLEY AND CO INTERNATIONAL PLC
224,643
1.93%
HANABANK (MERITZ ASSET MGMT)
211,763
1.82%
KB BANK (EASTSPRING ASSET MGMT-SAMSUNG LIFE VUL)
211,710
1.82%
STIC INVESTMENTS
200,000
1.72%
CITI BANK (EASTSPRING ASSET MGMT)
197,231
1.70%
NORGES BANK
189,668
1.63%
MACQUARIE FUND SOLUTIONS
172,269
1.48%
GOLDMAN SACHS INTERNATIONAL
118,903
1.02%
.. Status of Affiliated Companies and Others
Domestic
Namgang Travel Co., Ltd. 
Hana Tourist Co;,Ltd. (30.23%)
Hanatour Jeju Co.,Ltd. (77.35%)
Hanatour Youth (100%)
Hanauhak INC.(51%)
Hanatour ITC. (100%) 
Tour Marketing Korea Co., Ltd. (70%)
OK Tour Co., Ltd. (48.9%)
Web tour (83.82%)
Korea Travel Service INC (60%)
HANA T&MEDIA Co, Ltd (51%).
CJ Worldis INC (50%)
Hanatour Business (100%)
Nex Tour.Co., Ltd. 
H&T Marketing (80%)
Hana Shop (90%)
Hotel n Air.com, INC (50%)
Travel gonggong INC. (50%)
Center Mark Hotel Inc.
Tourtips.INC (99.8%)
Mark Hotel.Inc (100%)
Overseas
HANATOUR Europe S.R.L (50%)
HANATOUR USA INC. (100%)
HANATOUR Europe Ltd (70%)
ALLEGROX TM Management
HANATOUR Japan Co., Ltd (70%)
HANATOUR CHINA (100%)
HANATOUR PTY Ltd (100%)
UI Coach 
HANATOUR Hong Kong Co., Ltd (100%)
HANATOUR PTE Ltd. (100%)
HANATOUR Taiwan Service Inc. (100%)
HANATOURIST USA, INC
. Investment stocks 
Ownership Company
OwnershipRatio (%)
No. of Shares
Hanatour Business
100.00
400,000
Hanatourist Service Inc.
30.23
906,981
Hanatour Jeju Co.,Ltd.
77.35
618,830
Hanatour Youth
100.00
400,000
Hanatour ITC
100.00
24,400,000
Tour Marketing Korea Co.,Ltd
70.00
140,000
OK Tour Service Inc.
48.92
9,784
Web tour
77.67
8,777,380
Hana T & Media Co., Ltd
51.00
510,000
Hanauhak INC
51.00
714,000
Korea Travel Sevice INC
60.00
600,000
Namgang Travel Co., Ltd.
Hanatour Business
100.00
300,000
CJ Worldis INC
50.00
8,000,001
H&T Marketing
80.00
240,000
Hana Shop
90.00
360,000
Nex Tour Co.,Ltd
Web tour
100.00
40,000
Hotel n Air.com INC.
50.00
3,000,000
Travel gonggong INC.
50.00
100,000
Hotelnfly, INC
19.90
398,000
Tourtips.INC
100.00
10,000,000
Center Mark Hotel Inc.
Hanatour ITC
50.00
1,000,000
JR No. 10 Management Real Estate Investment Trusts
15.15
1,000,000
Mark Hotel. Inc
100.00
30,000,000
HANA FINANCE SERVICE
100.00
9,800,000
Interbiz Tour
20.00
115,600
KS Credit Information
16.66
133,333
SM Duty Free
86.61
12,650,000
HANATOUR IMC
100.0
1,400,000
World Shop
Hana Shop
100.00
10,000
HANATOUR USA INC
100.00
500,000
HANATOUR EUROPE LTD
70.00
4,200
HANATOUR PTE. LTD.
100.00
2,142,000
HANATOUR JAPAN CO., LTD
70.00
1,400
UI Coach
HANATOUR JAPAN CO., LTD
100.00
1,900
HANATOUR CHINA
100.00
-
HANATOUR PTY LTD
100.00
600,000
HANATOUR HONGKONG CO., LTD.
100.00
5,000,000
HANATOUR TAIWAN SERVICE INC.
100.00
-
HANA TOURIST USA. INC
HANATOUR USA INC
44.59
33,000
HANATOUR EURPOE S.R.L
50.00
5,250
ALLEGROX TM Management
HANATOUR JAPAN CO., LTD
100.00
396
STAR SHOP & LINE
HANATOUR JAPAN CO., LTD
100.00
1,800
BEIJING HANA INFORMATION TECHNOLOGY CO., LTD
100.00
-
HANATOUR SERVICE (M)SDN.BHD
100.00
1,500,000
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