REG - Hanatour Service Inc - Annual Financial Report
Annual Report
I. OUTLINE OF THE COMPANY
1. Purpose of the 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 and Internet Information Service
48) Franchisees
49) Restaurants
50) Shopping Center leasing and sublease on a deposit basis business
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 Import and agent business
56) Copyright and neighboring rights of copyright agent 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. Important Business
General travel business
3. History of the 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
Mar. 25, 2016
CEO changed - SangHwan Park and JinKook Kim
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.
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
Tae-Hwa
29, Insadong 5-gil, Jongno-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 Office
(Beomil-dong)
14, Jobang-ro, Dong-gu, Busan, Republic of Korea
Deokcheon Office
12, Gichal-ro, Buk-gu, Busan, Republic of Korea
Incheon
Sales Office
59, Bupyeong-daero, Bupyeong-gu, Incheon, Republic of Korea
Airport Office
47, Gonghang-ro 424beon-gil, Jung-gu, Incheon, Republic of Korea
Airport Office 2
66, Gonghang-ro 424beon-gil, Jung-gu, Incheon, Republic of Korea
Bupyeong Office
7, Sijang-ro 51beon-gil, Bupyeong-gu, Incheon, Republic of Korea
Airport Office 3
124, Yeongjong-daero, Jung-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
188, Guseong-ro, Dong-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
Guri Office
189, Gyeongchun-ro, Guri-si, Gyeonggi-do, Republic of Korea
Bundang Office
263, Seongnam-daero, 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
172, 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
218, Chungmu-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
380, Baengnyeon-daero, Mokpo-si, 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
888, Jinju-daero, Jinju-si, Gyeongsangnam-do, Republic of Korea
5. Status of Employees
(As of December 31, 2017)
(Unit: person)
Classification
Number of employees
Office & Operation
Etc.
Total
Men
1,126
39
1,165
Women
1,360
102
1,462
Total
2,486
141
2,627
6. Organization
CHAIRMAN & CEO - GLOBAL STRATEGIC PLANNING DIVISION
l
PRESIDENT & CEO
l
GLOBAL MANAGEMENT DIVISION , FINANCE DIVISION , GLOBAL GENERAL SALES DIVISION
l
AGENCY SALES DIVISION , OVERSEAS BUSINESS DIVISION
II. INFORMATION ON SHARES
1. Total Number of Stocks, Etc.
A. Total number of stocks
(As of December 31, 2017)
(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]
2. Matters on Dividends
A. Matters on dividend for three recent fiscal year
Classification
25th Term
24th Term
23rd Term
Face amount per stock (won)
500
500
500
(Consolidated) Current net income (million won)
12,965
8,036
31,740
(Separated) Current net income (million won)
26,013
9,496
28,705
(Consolidated) Net income per share (won)
1,172
727
2,877
Total amount of cash dividend (million won)
16,600
16,600
16,560
Total amount of stock dividend (million won)
-
-
-
Tendency of stock dividend (%)
128.0
206.6
52,2
Yield rate of cash dividend (%)
Common stock
1.5
1.3
1.7
Preferred stock
Yield rate of stock dividend (%)
Common stock
Preferred stock
Cash dividend per share (won)
Common stock
1,500
1,500
1,300
Preferred stock
-
-
Stock dividend per share
Common stock
-
-
Preferred stock
-
-
III. CONTENTS OF THE BUSINESS
1. Summary of the 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.
2017 has shown continued strong demand in outbound travel with golden weeks in May and October. However we also witnessed decrease of Chinese in and outbound demand due to THAAD conflict between Korea-China government, missile threats from North Korea, and IS terror threats in European countries. Hanatour managed to improve its profitability with better services and wider range of products to be provided.
Even in the situations with difficulties, Hanatour managed to send over 3.7 million package travelers YOY growth of 20.4% and total number of travelers including FIT travelers were 5.6 million with 14.0% of YOY Growth.
Regional volume split was as below: Japan 37.4%, Southeast Asia 32.8%, China 10.5%, Domestic 6.4%, Europe 6.0%, South Pacific 4.5%, and Americas 2.5% respectively. Each destinations' revenue contribution was Southeast Asia 36.8%, Japan 20.6%, Europe 17.0%, South Pacific 8.6%, China 8.6%, Americas 6.8%, and Domestic 1.8%. Showing that the short-haul destinations are still the most popular destination for Korean travelers.
Various external issues had influence over 2017. However, Hanatour Inc. has managed to 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 people>
Year
2017
2016
2015
Total
Departures
from
HANATOUR
Total
Departures
of Korea
Total
Departures
from
HANATOUR
Total
Departures
of Korea
Total
Departures
from
HANATOUR
Total
Departures
of Korea
5,634,020
24,837,011
4,930,452
20,844,236
3,734,603
17,885,645
Share rate
22.68%
23.65%
20.88%
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 16.4% in the last 5 years. According to UNWTO, the number of international tourists in 2017 was 1.3 billion and they are 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 over global. 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. 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
Travel Business
400,000
100.00
Hanatour Jeju Co.,Ltd.
Travel Business
618,830
77.35
Hanatour Youth
Travel Business
400,000
100.00
Hanatour ITC
Travel Business
24,400,000
100.00
Tour Marketing Korea Co.,Ltd
Travel Business
140,000
70.00
Web tour
Travel Business
8,777,380
77.67
Hana T & Media Co., Ltd
Publishing
510,000
51.00
Korea Travel Sevice INC
Travel Business
600,000
60.00
CJ Worldis INC
Travel Business
8,000,001
50.00
H&T Marketing
Advertising
240,000
80.00
Hana Shop
Retail Business
360,000
90.00
Tourtips.INC
Information Provision
10,000,000
100.00
Mark Hotel. Inc
Hotel Business
40,000,000
100.00
HANA FINANCE SERVICE
Finance Service
9,800,000
100.00
SM Duty Free
Duty Free Business
6,325,387
82.54
HANATOUR IMC
Asset Management
1,400,000
100.0
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
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 and Air .com
Director
General Management
HeeSeok Kweon
Vice Chairman, Director
Hanatour ITC
Chief Executive Officer and Director
General Management
Hotel and Air .com
Director
General Management
JinKook Kim
Chief Executive Officer and Director
Hanatour Youth
Non-executive Director
General Management
Web tour
Non-executive Director
General Management
Hanatour China
Director
General Management
Hotel and Air .com
Non-executive Director
General Management
Ⅴ.SUMMARY OF FINANCIAL DATA
1. Financial results
(In thousand won, except per share amounts)
Classification
25th Term
24th Term
23rd Term
Sales
444,648,863
385,789,633
360,011,774
Operating Expenses
(397,853,188)
(355,412,629)
(325,210,962)
Operating Income
46,795,675
30,377,004
34,800,812
Profit Before Tax
44,928,835
17,994,228
37,284,303
Income Tax Expense
(18,915,355)
(8,498,400)
(8,579,625)
Net Income
26,013,480
9,495,828
28,704,677
Net Income per Share(Won)
2,351
859
2,602
2. Financial position
(In thousand won)
Classification
25th Term
24th Term
23rd Term
Current Assets
275,168,093
213,958,212
177,000,273
Non-Current Assets
184,452,399
203,768,444
222,744,648
Total Assets
459,620,492
417,726,656
399,744,921
Current Liabilities
274,086,577
242,706,784
218,258,654
Long-term Liabilities
4,132,373
3,178,192
2,699,045
Total Liabilities
278,218,950
245,884,975
220,957,699
Capital Stock
5,808,093
5,808,093
5,808,093
Other Paid-in Capital
58,700,030
58,700,030
58,538,171
Elements of Other Shareholder's Equity
(815,269)
(962,048)
(937,690)
Retained Earnings
117,708,688
108,295,606
115,378,648
Total Shareholder's Equity
181,401,542
171,841,680
178,787,222
Total Liabilities and Shareholder's Equity
459,620,492
417,726,656
399,744,921
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
Ⅷ. LIST OF MAJOR SHAREHOLDERS
Shareholder
Number of shares
Percentage
Sanghwan Park and 23 people with a special relationship
1,708,909
14.71%
HANATOUR INC.
576,163
4.96%
Ⅸ. CURRENT STATUS OF INVESTMENTS
1. Domestic
Ownership Company
Ownership Ratio (%)
No. of Shares
Hanatour Business
HANATOUR Service Inc.
100.00
400,000
Hanatourist Service Inc.
HANATOUR Service Inc.
30.23
906,981
Hanatour Jeju Co.,Ltd.
HANATOUR Service Inc.
77.35
618,830
Hanatour Youth
HANATOUR Service Inc.
100.00
400,000
Hanatour ITC
HANATOUR Service Inc.
100.00
24,400,000
Tour Marketing Korea Co.,Ltd
HANATOUR Service Inc.
70.00
140,000
OK Tour Service Inc.
HANATOUR Service Inc.
48.92
9,784
Web tour
HANATOUR Service Inc.
77.67
8,777,380
Hana T & Media Co., Ltd
HANATOUR Service Inc.
51.00
510,000
Korea Travel Sevice INC
HANATOUR Service Inc.
60.00
600,000
Namgang Travel Co., Ltd.
Hanatour Business
100.00
300,000
CJ Worldis INC
HANATOUR Service Inc.
50.00
8,000,001
H&T Marketing
HANATOUR Service Inc.
80.00
240,000
Hana Shop
HANATOUR Service Inc.
90.00
360,000
Nex Tour Co.,Ltd
Web tour
100.00
40,000
Hotel n Air.com INC.
HANATOUR Service Inc.
50.00
1,000,000
Hotelnfly, INC
HANATOUR Service Inc.
19.90
398,000
Tourtips.INC
HANATOUR Service 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
HANATOUR Service Inc.
15.15
1,000,000
Mark Hotel. Inc
HANATOUR Service Inc.
100.00
40,000,000
HANA FINANCE SERVICE
HANATOUR Service Inc.
100.00
9,800,000
Interbiz Tour
HANATOUR Service Inc.
20.00
115,600
SM Duty Free
HANATOUR Service Inc.
82.54
6,325,387
HANATOUR IMC
HANATOUR Service Inc.
100.00
1,400,000
World Shop
Hana Shop
100.00
10,000
Titikaka
Tourtips.INC
20.00
6,000
HanaTong Culture Business Company
HANATOUR Service Inc.
50.00
-
2. Overseas
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
UI Coach
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 EURPOE S.R.L
HANATOUR Service Inc.
Italy
50.00
5,250
ALLEGROX TM Management
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
ZHANGJIAJIE YOULAN CANYIN Co.,Ltd
HANATOUR CHINA
China
40.00
-
HANATOUR JAPAN SYSTEM VIETNAM
HANATOUR JAPN CO., LTD
Japan
100.00
-
BEIJING YITU INTERNATIONAL TRAVEL SERVICE CO., LTD
HANATOUR Service Inc.
China
20.00
-
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.:
We have audited the accompanying consolidated financial statements of Hanatour Service Inc. and its subsidiaries (the "Group"), which comprise the consolidated statements of financial position as of December 31, 2017, the consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended, and notes, comprising 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, 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 opinion on these consolidated financial statements based on our audit. We conducted our audit in accordance with Korean Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, we consider internal control relevant to the entity's preparation and fair presentation of the consolidated 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 consolidated 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 consolidated financial position of the Group as at December 31, 2017 and of its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with Korean International Financial Reporting Standards.
Other Matter
The procedures and practices utilized in the Republic of Korea to audit such consolidated financial statements may differ from those generally accepted and applied in other countries.
The accompanying consolidated statement of financial position of the Group as of December 31, 2016, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the year then ended were audited by other auditors, whose report thereon dated March 16, 2017, expressed an unqualified opinion.
KPMG Samjong Accounting Corp.
Seoul, Korea
March 13, 2018
This report is effective as of March 13, 2018, 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, 2017 and 2016
(In thousands of won)
2017
2016
Assets
Cash and cash equivalents
W
228,389,932
156,047,480
Short-term financial instruments
20,147,996
26,068,166
Trade receivables
92,726,630
80,388,918
Other receivables
9,881,311
19,048,243
Finance lease receivables
686,382
1,012,665
Inventories
14,551,264
24,348,212
Advance payments
50,595,275
31,006,430
Other current assets
7,535,239
7,599,271
Other financial assets
100,000
2,249
Current tax assets
41,845
134,313
Assets held for sale
5,619,637
-
Total current assets
430,275,511
345,655,947
Financial assets classified at fair value
through profit or loss
1,174,375
1,013,875
Available-for-sale financial assets
7,054,769
5,562,979
Investments in associates and joint ventures
11,156,922
11,784,439
Long-term finance lease receivables
149,898
850,833
Investment property, net
14,837,953
2,358,799
Property and equipment, net
82,554,749
91,758,218
Intangible assets
13,915,229
15,943,119
Long-term advance payments
2,000,000
-
Other financial assets
31,341,012
34,352,021
Deferred tax assets
7,681,591
8,047,965
Other non-current assets
2,587,710
2,921,448
Total non-current assets
174,454,208
174,593,696
604,729,719
520,249,643
Total assets
W
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Financial Position, Continued
As of December 31, 2017 and 2016
(In thousands of won)
2017
2016
Liabilities
Trade payables
W
83,734,723
77,119,716
Other payables
43,816,431
35,792,263
Income tax payables
20,902,081
8,292,735
Deposits received for travel
127,080,765
113,274,612
Advances received
23,905,955
23,126,895
Short-term borrowings
10,469,350
3,410,430
Current portion of long-term borrowings
5,920,739
2,974,745
Finance lease liabilities
661,796
939,325
Provisions
2,117,816
2,130,865
Other financial liabilities
3,425,287
3,311,722
Other current liabilities
21,040,707
16,278,623
Liabilities held for sale
15,516
-
Total current liabilities
343,091,166
286,651,931
Long-term other payables
8,728,237
7,647,421
Long-term borrowings
5,173,068
7,973,961
Debentures
2,239,214
3,245,100
Long-term provisions
939,364
-
Long-term finance lease liabilities
993,743
1,683,522
Provision for long-term employee benefits
1,527,382
693,860
Other financial liabilities
204,453
-
Other non-current liabilities
366,828
277,500
Total non-current liabilities
20,172,289
21,521,364
Total liabilities
363,263,455
308,173,295
Equity
Capital stock
5,808,093
5,808,093
Other contributed capital
80,560,685
58,105,899
Components of other capital
(4,368,194)
(831,843)
Retained earnings
122,765,189
126,400,362
Equity attributable to the owners of
the Parent Company
204,765,773
189,482,511
Non-controlling interests
36,700,491
22,593,837
Total equity
241,466,264
212,076,348
Total liabilities and equity
W
604,729,719
520,249,643
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive IncomeFor the years ended December 31, 2017 and 2016
(In thousands of won, except earnings per share data)
2017
2016
Operating revenue
W
682,307,266
595,538,710
Operating expense
641,476,905
574,606,757
Operating income
40,830,361
20,931,953
Financial income
2,335,837
2,491,010
Financial expense
807,460
641,956
Loss from investment in associates and joint ventures
(1,537,398)
(202,936)
Other income
11,083,805
10,395,372
Other expense
13,881,866
9,027,552
Income before income taxes
38,023,279
23,945,891
Income taxes
25,309,072
16,418,440
Net income
W
12,714,207
7,527,451
Other comprehensive income after tax expense
Items that are or may be reclassified subsequently
to profit of loss:
Changes in valuation of equity-accounted investees, net
39,769
4,341
Gain (loss) on foreign operations translation, net
(4,759,419)
491,795
Gain (loss) on valuation of available-for-sale financial assets
143,629
(26,916)
Total items that are or may be reclassified
subsequently to profit of loss
(4,576,021)
469,220
Total comprehensive income
W
8,138,186
7,996,671
Net income attributable to:
Owners of the Parent Company
12,965,225
8,035,742
Non-controlling interests
(251,018)
(508,291)
W
12,714,207
7,527,451
Comprehensive income attributable to:
Owners of the Parent Company
9,428,874
8,359,244
Non-controlling interests
(1,290,688)
(362,573)
W
8,138,186
7,996,671
Earnings per share
Basic earnings per share (in won)
1,172
727
Diluted earnings per share (in won)
W
1,172
726
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the years ended December 31, 2017 and 2016
(In thousands of won)
Capital Stock
Other contributed capital
Components of other capital
Retained earnings
Non-controlling interests
Total shareholders' equity
January 1, 2016
W
5,808,093
57,322,026
(1,155,344)
134,943,490
20,368,746
217,287,011
Dividends
-
-
-
(8,832,018)
-
(8,832,018)
Interim dividends
-
-
-
(7,746,852)
-
(7,746,852)
Dividends of subsidiaries
-
-
-
-
(295,539)
(295,539)
Discount on stock issuance
-
-
-
-
(111,059)
(111,059)
Disposal of treasury stock
-
1,664,755
-
-
-
1,664,755
Exercised stock option rights
-
(1,983,268)
-
-
-
(1,983,268)
Gain on disposal of
treasury stock
-
245,732
-
-
-
245,732
Stock compensation expense
-
247,281
-
-
3,634
250,915
Net income
-
-
-
8,035,742
(508,291)
7,527,451
Gain on foreign operations
translation
-
-
346,076
-
145,719
491,795
Changes in valuation of
equity accounted investees
-
-
4,341
-
-
4,341
Loss on valuation of available
-for-sale financial assets
-
-
(26,916)
-
-
(26,916)
Paid-in capital increase of
subsidiaries
-
609,373
-
-
2,990,627
3,600,000
December 31, 2016
W
5,808,093
58,105,899
(831,843)
126,400,362
22,593,837
212,076,348
January 1, 2017
W
5,808,093
58,105,899
(831,843)
126,400,362
22,593,837
212,076,348
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
-
-
-
12,965,225
(251,018)
12,714,207
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)
122,765,189
36,700,491
241,466,264
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2017 and 2016
(In thousands of won)
2017
2016
Cash flows from operating activities
Net income
W
12,714,207
7,527,451
Additions of expenses not involving cash outflows and others
69,363,944
47,400,813
Deduction of incomes not involving cash inflows and others
(3,595,192)
(3,862,192)
Movements in operating assets and liabilities:
Increase in trade receivables
(17,368,423)
(23,503,304)
Decrease (increase) in other receivables
5,487,385
(1,615,371)
Decrease (increase) in inventories
6,964,005
(15,108,796)
Decrease (increase) in advance payments
(23,831,529)
5,241,184
Increase in other current assets
(376,388)
(1,761,471)
Decrease (increase) in other non-current assets
275,873
(9,940)
Increase in trade payables
9,134,122
1,742,703
Increase in other payables
7,702,953
12,893,929
Increase in deposits received for travel
13,629,548
17,271,797
Increase in advances received
1,201,571
2,347,053
Increase in other financial liabilities
314,941
570,132
Increase (decrease) in other current liabilities
764,916
(4,218,700)
Decrease in provisions
(1,369,391)
(1,020,811)
Decrease in long-term other payables
(74,173)
(20,243)
Decrease in other long-term employee benefit
(159,978)
(118,000)
80,778,391
43,756,234
Interest expense paid
(990,370)
(844,469)
Interest income received
2,371,320
3,043,962
Dividend income received
110,088
91,949
Income taxes paid
(16,027,938)
(18,545,895)
Net cash provided by operating activities
W
66,241,491
27,501,781
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
For the years ended December 31, 2017 and 2016
(In thousands of won)
2017
2016
Cash flows from investing activities
Cash inflows from investing activities:
Decrease in short-term financial instruments
W
25,805,582
58,948,372
Decrease in other receivables
14,477,960
20,048,764
Disposal of available-for-sale financial assets
200,000
2,738,080
Disposal of investment in associates and joint venture
3,000
638,297
Capital reduction of associates and joint venture
5,000,000
5,000,000
Disposal of property and equipment
404,953
803,976
Decrease in finance lease receivables
1,008,383
1,170,997
Decrease in other financial assets
4,108,494
14,995,029
Cash outflows for investing activities:
Increase in short-term financial instruments
27,460,454
24,272,291
Increase in other receivables
14,750,000
12,403,486
Acquisition of available-for-sale financial assets
1,500,000
270,011
Acquisition of investment in associates and joint venture
1,000,000
1,548,800
Acquisition of property and equipment
21,409,913
48,028,731
Acquisition of Investment property
81,579
-
Acquisition of intangible assets
3,767,518
4,054,650
Increase in other financial assets
2,804,705
7,068,681
Net cash provided by (used in) investing activities
W
(21,765,797)
6,696,865
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
For the years ended December 31, 2017 and 2016
(In thousands of won)
2017
2016
Cash flows from financing activities
Cash inflows from financing activities:
Proceeds from short-term borrowings
W
27,833,853
11,128,434
Proceeds from long-term borrowings
4,193,311
3,394,730
Proceeds from debentures
-
4,157,511
Paid-in capital increase of subsidiaries
18,597,109
3,488,941
Disposal of investments in subsidiaries
24,525,379
-
Exercised stock option rights
89,531
-
Cash outflows for financing activities:
Repayment of short-term borrowings
20,123,688
27,213,152
Repayment of current portion of long-term borrowings
2,961,862
2,897,903
Repayment of long-term borrowings
1,135,120
-
Repayment of finance lease liabilities
864,743
713,087
Acquisition of treasury stocks
45
-
Payment of stock issuance expense
207,765
-
Payment of dividends
17,066,562
16,874,408
Net cash provided by (used in) financing activities
32,879,398
(25,528,934)
Reclassification to assets and liabilities held for sale
(32,216)
-
Net increase in cash and cash equivalents
77,322,876
8,669,712
Cash and cash equivalents at beginning of year
156,047,480
146,485,490
Effect of exchange rate change
(4,980,424)
892,278
Cash and cash equivalents at end of year
W
228,389,932
156,047,480
This information is provided by RNSThe company news service from the London Stock ExchangeENDFR SSFSUDFASESL
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