REG - Hanatour Service Inc - FY2022 Annual Financial Report
26/01/2024 07:00
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RNS Number : 0407B Hanatour Service Inc. 26 January 2024
Annual Report
I. OUTLINE OF THE COMPANY
1. Purpose of the Company
Purpose Remark
1. General Travel Business(Travel Agency)
2. Ticketing and Sales of Airline and Boat
3. Souvenir Sales
4. Issuing of Selling Offers
5. Real Estate Dealing and Lease
6. Optional Communication Business
7. Computer Programming and Supply
8. Telemarketing Business
9. Printing and Publishing Business
10. Issuing of Periodicals
11. Operating School to Train Travel Experts
12. Transportation Business(Chartered Buses)
13. Internet Business
(Install and Provide Contents, Internet Marketing)
14. E-commerce and Information Processing
15. Advertisement (Internet and Outdoor Advertisement)
16. Information and communication Related Business
17. Web Hosting and Homepage Establishment
18. Warehousing
19. Tourists Hotel & Lodging business
20. Operation and management of Tourists Hotels & Lodging
and other incidental facilities
21. Tourists Hotels & Lodging Management Business
22. Investment, Development, Operation and Asset Management
of the Domestic and Overseas Real Estate
23. Real Estate Agent Business
24. Management of Intellectual Property Rights and License
Business (Brand, Trademark Rights)
25. Intangible Assets Sales and Service (Knowledge, Information)
26. Production and Distribution
(Movies, Broadcasting, Videos and Other Cultural Products)
27. Production and Distribution of Digital Contents
28. Operating Performance Facilities
29. Planning Performance
30. Character business
31. Exhibition and Event Agency
32. Internet Broadcasting
33. Tourism Development and Incidental Business
(Marketing Counsel, Planning and Consulting)
34. Education service
35. Operation of Lifelong E-learning Education Facilities
36. Gift Certificate Sales
37. Wedding Consulting
38. Amusement Park Operation
39. Comprehensive Leisure Facilities and Operation Management
40. Tourist Attraction Development Business
41. Comprehensive Recreation Business
42. International Conference Planning Business
43. Camping Car Business
44. Bonded Goods and Tourism Product Sales Business
45. Accommodation Business
46. Accommodation reservation Service
47. Web Portal and Internet Information Service
48. Franchise Business
49. Restaurant Business
50. Shopping Center Leasing 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
Mar. 25, 2022 CEO changed - MiSun Song and KyungKen Yuk
Dec. 31, 2022 CEO changed - 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 June 29, 2022, the company issued 2,100,000 shares through rights offering.
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
Busan Sales Office 7, Chungjang-daero 9beon-gil, Jung-gu, Busan, Republic of Korea
Airport Office 271, Gonghang-ro, Jung-gu, Incheon, Republic of Korea
(Terminal1)
Airport Office 124, Yeongjong-daero, Jung-gu, Incheon, Republic of Korea
(Commodity Support)
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
Gangneung Slaes Office 2141, Gyeonggang-ro, 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, Hongsan-ro, Wansan-gu, Jeonju-si, Jeollabuk-do, Republic of Korea
Changwon 754, Changwon-daero, Seongsan-gu, Changwon-si, Gyeongsangnam-do,
Sales Office Republic of Korea
Eulji-ro IT Center 343, Samil-daero, Jung-gu, Seoul, Republic of Korea
Travel Desk 51, Sogong-ro, Jung-gu, Seoul, Republic of Korea
5. Status of Employees (As of December 31, 2022)
(Unit: person)
Classification Office & Operation
Men 579
Women 605
Total 1,184
6. Organization
II. INFORMATION ON SHARES
1. Total Number of Stocks, Etc.
A. Total number of stocks (As of December 31, 2022)
(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 16,039,185 16,039,185 -
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) 16,039,185 16,039,185 -
V. Treasury stocks 549,253 549,253 -
VI. Outstanding stocks (IV-V) 15,489,932 15,489,932 -
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 -
Jun. 29, 2022 Capital increase with consideration (Rights offering) Common stock 2,100,000 500 49,800 -
(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 Remark
(for capital decrease for consideration)
- - - - - - - -
C. Contents of scheduled change for capital
No applicable change
2. Matters on Dividends
A. Matters on dividend for three recent fiscal year
Classification 30(th) Term 29(th) Term
Face value per stock (won) 500 500
(Consolidated) Current net income (million won) (66,774) (43,987)
(Separated) Current net income (million won) (74,617) (38,741)
(Consolidated) Net income per share (won) (4,618) (3,285)
Total amount of cash dividend (million won) - -
Total amount of stock dividend (million won) - -
Dividend payout ratio (%) - -
Yield rate of cash dividend (%) Common stock - -
Preferred stock - -
Yield rate of stock dividend (%) Common stock - -
Preferred stock - -
Cash dividend per share (won) Common stock - -
Preferred stock - -
Stock dividend per share Common stock - -
Preferred stock - -
III. CONTENTS OF THE BUSINESS
1. Summary of the Business
In 2020, the COVID-19 pandemic posed unprecedented challenges, making the past
three years exceptionally tough. Hopes of its end in 2021 were dashed with the
emergence of the Omicron variant in 2022, along with subvariants, hindering
the travel industry's recovery.
Fortunately, from the latter half of 2022, the global trend of decreasing
COVID-19 cases led countries to ease entry and exit restrictions. In
September, the South Korean government's announcement of lifting pre-entry
COVID-19 tests and on-site quarantine measures marked a pivotal moment for the
travel industry's recovery. Tourism to Japan resumed in October, and with the
declaration of the end of the endemic situation in major Southeast Asian
countries, the South Korean travel industry entered a full-fledged recovery.
By December 2022, outbound travelers had recovered to nearly 60% compared to
December 2019, and our company experienced a rapid increase in customers,
reaching around 40% of the 2019 volume. In Q4 2022, we recorded the highest
sales since the pandemic, and operating losses hit a quarterly low. Annual
figures for 2022 showed a 186% increase in sales, with the lowest operating
and net losses since the pandemic, raising optimism for future recovery.
The recovery trend is accelerating in 2023, with profitability achieved in
January and February, marking the first monthly surplus since the pandemic.
Expectations for a surplus in Q1 are growing, and we anticipate achieving an
annual surplus for the first time since the pandemic.
This year is significant for HanaTour, not only for improved operating
performance but also for showcasing tangible results from efforts made during
the COVID-19 period. Initiatives like 'HanaPack 2.0,' enhanced customer
satisfaction, products for FIT customers, and a revamped mobile app
demonstrate our commitment to growth. Targeting both traditional and FIT
markets, we aim to create a new foundation for growth, leveraging our product
development and overseas network. We seek the support of our shareholders as
HanaTour embarks on this transformative journey.
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).
Year 2022 2021 2020
Total Total Total Total Total Total
Departures Departures Departures Departures Departures Departures
from of Korea from of Korea from of Korea
HANATOUR HANATOUR HANATOUR
533,957 5,904,941 42,441 803,201 646,444 3,688,606
Share rate 9.04% 5.28% 17.53%
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 is 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 must 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
Hana Tourist Inc. Travel Business 906,981 30.23
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
Mark Hotel Co., Ltd. Hotel Business 40,000,000 100.00
Hana Finance Service Inc. Finance Service 3,400,000 100.00
SM duty free Co., Ltd. Duty Free Business 12,325,387 90.13
Hanatour Europe Ltd. Travel Business 4,200 70.00
Hanatour Japan Co., Ltd. Travel Business 6,836,300 53.98
Hanatour CHINA Travel Business - 100.00
Hanatour HongKong Co., Ltd. Travel Business 5,000,000 100.00
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
HANATOUR VIETNAM COMPANY LIMITED Travel Business - 85.00
HANATOUR PHILIPPINES CORP. Travel Business 1,267,980 97.54
3. Concurrent status of the executive management
Not applicable.
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 30(th) Term 29(th) Term 28(th) Term
Sales 66,269,096 10,781,802 73,947,230
Operating Expenses 156,798,748 108,327,485 149,962,759
Operating Income (90,529,652) (97,545,683) (76,015,530)
Profit Before Tax (77,690,960) (43,530,465) (131,191,120)
Income Tax Expense (3,074,173) (4,789,718) (31,981,313)
Net Income (74,616,787) (38,740,747) (99,209,807)
Net Income per Share(Won) (5,160) (2,893) (7,619)
2. Financial position
(In thousand won)
Classification 30(th) Term 29(th) Term 28(th) Term
Current Assets 202,531,190 86,185,310 121,274,400
Non-Current Assets 115,786,404 128,627,359 226,035,622
Total Assets 318,317,593 214,812,670 347,310,022
Current Liabilities 162,469,875 92,071,844 95,992,675
Long-term Liabilities 5,864,863 2,199,736 92,035,510
Total Liabilities 168,334,738 94,271,580 188,028,185
Capital Stock 8,019,593 6,969,593 6,969,593
Other Paid-in Capital 119,473,582 16,465,030 186,465,030
Elements of Other Shareholder's Equity (9,097) (9,097) (9,097)
Retained Earnings 22,498,777 97,115,564 (34,143,689)
Total Shareholder's Equity 149,982,855 120,541,089 159,281,837
Total Liabilities 318,317,593 214,812,670 347,310,022
and Shareholder's Equity
Ⅵ. RISK FACTORS
Refer to III - 1. Summary of the Business
Ⅶ. MANAGEMENT
Full-time Name Position Assigned Task
/ Part-time
Full-time SangHwan Park Chairman, Director General Management
Full-time HeeSeok Kweon Senior Vice Chairman, Director General Management
Full-time MiSun Song Chief Executive Officer and Director General Management
Part-time HyeLeon Yoo Auditor, Outside Director Outside Director
Part-time InWhan Chang 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 4,457,202 27.79%
and 11 people with a special relationship
HANATOUR INC. 549,253 3.42%
Ⅸ. CURRENT STATUS OF INVESTMENTS
1. Domestic
Name of the Company Ownership Company No. of Shares Ownership Ratio (%)
Hanatour Business Service Inc. HANATOUR Service Inc. 400,000 100.00
Hana Tourist Inc. HANATOUR Service Inc. 906,981 30.23
Hanatour Jeju Service Inc. HANATOUR Service Inc. 618,830 77.35
Hanatour ITC Service Inc. HANATOUR Service Inc. 24,400,000 100.00
Tour Marketing Korea Service Inc. HANATOUR Service Inc. 140,000 70.00
OK Tour Service Inc. HANATOUR Service Inc. 9,784 48.92
Web Tour Service Inc. HANATOUR Service Inc. 8,777,380 76.99
Nextour Co., Ltd. Web Tour Service Inc. 40,000 100.00
Gyoyugyeohaeng Co., Ltd HANATOUR Service Inc. 398,000 19.90
Mark Hotel Co., Ltd. HANATOUR Service Inc. 40,000,000 100.00
Hana Finance Service Inc. HANATOUR Service Inc. 3,400,000 100.00
SM duty free Co., Ltd. HANATOUR Service Inc. 12,325,387 90.13
Interpark Corp. HANATOUR Service Inc. 60,876 0.50
K Culture Industry Co., Ltd. HANATOUR Service Inc. - 40.00
Hani Tour Inc. HANATOUR Service Inc. 19,078 9.54
SAM Consulting Co.,Ltd. HANATOUR Service Inc. 1,667 7.41
KC HOSPITALITY CO.,LTD HANATOUR Service Inc. 57,600 10.00
KBSJ Tourism Venture Union HANATOUR Service Inc. - 9.26
P&I Cultural Innovation Investment Union HANATOUR Service Inc. - 9.26
Silla Animal Inc. HANATOUR Service Inc. 11,310 11.87
Jeju Channel Inc. Hanatour Jeju Service Inc. 50,000 8.06
Dream Co., Ltd. HANATOUR Service Inc. 2,250 2.08
Hanatour Jeju Service Inc. 2,250 2.08
2. Overseas
Name of the Company Ownership Company Region No. of Shares Ownership Ratio (%)
Hanatour Europe Ltd. HANATOUR Service Inc. London 4,200 70.00
Hanatour Japan Co., Ltd. HANATOUR Service Inc. Japan 6,836,300 53.98
U.I Sightseeing Bus LLC HANATOUR JAPAN CO., LTD Japan 1,900 100.00
Hanatour CHINA HANATOUR Service Inc. China - 100.00
Hanatour HongKong Co., Ltd. HANATOUR Service Inc. Hong Kong 5,000,000 100.00
Hanatour Europe S.R.L HANATOUR Service Inc. Italy 5,250 50.00
Allegrox TM Hotel HANATOUR JAPAN CO., LTD Japan 396 100.00
Beijing Hana Information Technology Co., Ltd. HANATOUR Service Inc. China - 100.00
Hanatour Service (M) Sdn.Bhd. HANATOUR Service Inc. Malaysia 1,500,000 100.00
Hanatour Janpan System Vietnam HANATOUR JAPN CO., LTD Vietnam - 100.00
HANATOUR EU GMBH HANATOUR Service Inc. Germany - 100.00
HANATOUR VIETNAM COMPANY LIMITED HANATOUR Service Inc. Vietnam - 85.00
HANATOUR PHILIPPINES CORP. HANATOUR Service Inc. Philippines 1,267,980 97.54
Ⅹ. MAJOR CREDITORS
Not applicable.
XI. IMPORTANT EVENTS AFTER THE SETTLEMENT OF
ACCOUNTS PERIOD
(1) HANATOUR EU GMBH which is one of subsidiaries of the Group resolved to
dissolve on January 18, 2023.
(2) Mark Hotel Co., Ltd. which is one of subsidiaries of the Group resolved
to dissolve on January 12, 2023.
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 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, 2022 and 2021, 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, these consolidated financial statements fairly represent the
financial position and performance of the group as of December 31, 2022, 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.
Emphasis of Matter
This section highlights matters that do not affect the audit opinion but
require attention from users:
• Uncertainties Due to COVID-19
The travel and hotel industries, to which the consolidated company belongs,
face uncertainties in future revenue generation and cash flows due to the
widespread impact of COVID-19. This includes extensive booking cancellations
and a decrease in new travel demand.
Items affected by COVID-19 mainly involve the occurrence of operating revenue,
impairment assessment of cash-generating units, and the realizability of
deferred tax assets. The consolidated company has reasonably estimated the
impact of COVID-19 on its financial statements for the period ending December
31, 2022. However, predicting the ultimate impact of the ongoing COVID-19
spread on the company's financial position, performance, and cash flows is
challenging as of the date of this audit report.
Key Audit Matters
Key audit matters are the most significant issues identified based on our
professional judgment during the audit of the financial statements. These
matters have been addressed in the context of our audit of the financial
statements as a whole, and we do not provide a separate opinion on these
matters.
• Evaluation of Realizability of Deferred Tax Assets of Hanatour Service
Inc., the Parent Company
The parent company recognized deferred tax assets of 50,554 million Won,
limited to the extent that sufficient taxable income is expected to be
generated.
The evaluation of the realizability of deferred tax assets involves
management's judgment regarding the estimation of future taxable income and
the timing of loss carryforwards. Due to the high subjectivity in these
estimates, we identified this evaluation as a key audit matter.
Our main audit procedures included assessing the design and operational
effectiveness of internal controls related to the realizability of deferred
tax assets, reviewing tax adjustments and corporate tax expenses with the help
of tax experts, examining the reliability of the underlying data used in
future taxable income estimates, reviewing the timing of realization of
deductible temporary differences and tax carryforward losses, and
recalculating the amount of deferred tax assets calculated by the company.
Other Matters
The consolidated financial statements for the period ending December 31, 2021,
of the consolidated company were audited by KPMG Samjong Accounting Firm. In
their audit report dated March 17, 2022, an unqualified opinion was expressed
regarding these consolidated financial statements.
Responsibilities of Management and Governance for the Consolidated Financial
Statements
Management is responsible for preparing and fairly presenting the consolidated
financial statements in accordance with K-IFRS. They are also responsible for
internal controls deemed necessary to ensure the preparation of consolidated
financial statements free from material misstatements, whether due to fraud or
error.
Management has the duty to assess the going concern status of the consolidated
company and disclose related matters as applicable. They are responsible for
using the going concern basis of accounting unless there is an intention to
liquidate the company or cease operations.
The governing body is responsible for overseeing the financial reporting
process of the consolidated company. Management is also accountable for
establishing and maintaining effective internal controls for the preparation
of consolidated financial statements that are free from significant
misrepresentation.
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 director in charge of performing this audit is Lee Yong Woo.
Ernst & Young Han Young
Seoul, Korea
March 16, 2023
This audit report is valid as of the date of the report. Therefore, events or
circumstances that could significantly affect the attached company's
consolidated financial statements may occur between the date of this audit
report and the time when the report is accessed. As a result, this audit
report may be subject to revision based on such events or circumstances.
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Financial Position
As of December 31, 2022 and 2021
(In thousands of won) 2022 2021
Assets
Cash and cash equivalents W 92,497,218 105,686,896
Short-term financial instruments 88,602,428 17,109,692
Trade receivables 39,362,975 11,253,911
Other receivables 5,856,639 4,105,493
Finance lease receivables 570,354 449,764
Inventories 8,274,560 1,711,235
Advance payments 25,212,457 11,664,075
Other current assets 2,996,919 2,456,982
Other financial assets 6,795,589 11,437,194
Current tax assets 371,081 332,808
Assets held for sale - -
Current financial assets at FVTPL - -
Total current assets 270,540,219 166,208,050
Non-current financial assets at FVTPL 3,012,260 2,938,115
Financial assets at FVOCI 1,189,200 1,187,148
Investments in associates and joint ventures 702,932 946,873
Long-term finance lease receivables - -
Long-term other receivables 2,048,848 3,363,839
Investment property, net 1,108,747 1,396,521
Property and equipment, net 10,176,272 13,379,039
Right-of-use assets 76,601,501 140,108,105
Intangible assets 22,932,160 32,852,801
Other financial assets 14,800,596 20,293,002
Deferred tax assets 52,292,869 47,721,079
Other non-current assets 23,838 201,012
Total non-current assets 184,889,221 264,387,534
Total assets W 455,429,440 430,595,584
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Financial Position, Continued
As of December 31, 2022 and 2021
(In thousands of won) 2022 2021
Liabilities
Trade payables W 41,976,540 8,887,001
Other payables 47,177,054 57,384,884
Income tax payables 362,065 304,682
Deposits received for travel 77,008,167 8,068,636
Advances received 22,423,174 26,119,418
Short-term borrowings 14,370,131 16,563,494
Current portion of long-term borrowings 2,086,092 4,122,122
Finance lease liabilities 13,914,120 35,112,340
Provisions 892,688 1,023,018
Other financial liabilities 2,084,106 2,217,777
Other current liabilities 10,464,511 12,719,477
Total current liabilities 232,758,647 172,522,849
Long-term other payables 142,878 463,288
Long-term borrowings 7,865,108 10,527,204
Debentures - 102,385
Long-term provisions 198,919 181,744
Long-term finance lease liabilities 105,785,176 182,746,487
Provision for long-term employee benefits 4,404,615 1,023,381
Other financial liabilities - -
Other non-current liabilities 4,572,449 5,272,119
Total non-current liabilities 122,969,145 200,316,608
Total liabilities 355,727,793 372,839,457
Equity
Capital stock 8,019,593 6,969,593
Other contributed capital 132,914,209 29,905,656
Components of other capital 2,642,459 1,947,292
Retained earnings (20,268,959) 46,504,986
Equity attributable to the owners of 123,307,301 85,327,527
the Parent Company
Non-controlling interests (23,605,653) (27,571,400)
Total equity 99,701,648 57,756,127
Total liabilities and equity W 455,429,440 430,595,584
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)
For the years ended December 31, 2022 and 2021
(In thousands of won, except earnings per share data) 2022 2021
Operating revenue W 114,969,463 40,258,282
Operating expense 216,153,549 167,551,792
Bad debt expense (1,500,026) 1,907,047
Other operating expense 217,653,575 165,644,745
Operating income (101,184,086) (127,293,510)
Interest income by effective interest method 2,854,656 1,173,029
Other financial income 303,802 12,622
Financial expense 2,847,390 8,594,071
Loss from investment in associates and joint ventures 355,249 (99,510)
Other income 43,045,885 110,530,654
Other expense 10,749,533 47,730,324
Other bad debt expense 629,191 3,304,424
Income (loss) before income taxes (68,850,608) (75,305,534)
Income taxes of continuing operations (4,083,086) (4,768,524)
Net loss W (64,572,425) (70,446,260)
Net loss from continuing operations (64,767,522) (70,537,010)
Net loss from discontinued operations 195,097 90,750
Other comprehensive income after tax expense 2,757,022 740,869
Items that will never be reclassified to profit of loss:
Loss on valuation financial assets at FVOCI 2,749 (98,639)
Items that are or may be reclassified subsequently
to profit of loss:
Changes in valuation of equity-accounted investees, net - -
Gain on foreign operations translation, net 2,754,273 839,507
Total comprehensive income (loss) W -61,815,403 (69,705,391)
Net income (loss) attributable to:
Owners of the Parent Company (66,773,945) (43,987,430)
Non-controlling interests 2,201,520 (26,458,830)
W (64,572,425) (70,446,260)
Comprehensive income (loss) attributable to:
Owners of the Parent Company (66,053,865) (43,678,822)
Non-controlling interests 4,238,462 (26,026,569)
W (61,815,403) (69,705,391)
Earnings (losses) per share
Basic earnings (losses) per share attributable to (in won) : (4,618) (3,285)
Continuing operation (in won) (4,630) (3,288)
Discontinued operation (in won) 12 3
Diluted earnings (losses) per share attributable to (in won) : W (4,618) (3,285)
Continuing operation (in won) (4,630) (3,288)
Discontinued operation (in won) 12 3
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Changes in Equity
For the years ended December 31, 2022 and 2021
(In thousands of won) Capital Stock Other contributed capital Components of other capital Retained earnings Non-controlling interests Total shareholders' equity
January 1, 2021 W 6,969,593 205,366,093 2,210,944 (79,507,584) (9,725,055) 125,313,991
Net loss - - - (43,987,430) (26,458,830) (70,446,260)
Gain on foreign operations - - 384,299 - 455,208 839,507
translation
Gain on valuation financial - - 9,528 - - 9,528
assets at FVOCI
Loss on valuation financial - - (85,219) - (22,947) (108,166)
assets at FVOCI
Introduction of capital surplus - (170,000,000) - 170,000,000 - -
Acquisition of treasury stock - (534) - - (310) (844)
Acquisition of investing stock - - - - 2,317,404 2,317,404
Paid-in capital increase of - (5,522,994) - - 9,524,734 4,001,740
Subsidiaries
Changes in scope of consolidation - 63,091 (572,260) - (3,661,604) (4,170,773)
December 31, 2021 W 6,969,593 29,905,656 1,947,292 46,504,986 (27,571,400) 57,756,127
January 1, 2022 W 6,969,593 29,905,656 1,947,292 46,504,986 (27,571,399) 57,756,127
Net loss - - - (66,773,945) 2,201,520 (64,572,425)
Gain on foreign operations - - 718,621 - 2,035,652 2,754,273
translation
Gain on valuation financial - - 1,458 - 1,291 2,749
assets at FVOCI
Loss on valuation financial - - - - - -
assets at FVOCI
Introduction of capital surplus - - - - - -
Acquisition of treasury stock - - - - - -
Acquisition of investing stock - - - - 2,317,404 2,317,404
Paid-in capital increase of parent company 1,050,000 103,008,553 - - - 104,058,553
Paid-in capital increase of - - - - - -
Subsidiaries
Dividends of Subsidiaries (343,611) (343,611)
Changes in scope of consolidation - - (24,913) - 70,895 45,982
December 31, 2022 W 8,019,593 132,914,209 2,642,459 (20,268,959) (23,605,653) 99,701,648
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the years ended December 31, 2022 and 2021
(In thousands of won) 2022 2021
Cash flows from operating activities
Net loss W (64,572,425) (70,446,260)
Additions of expenses not involving cash outflows and others 39,113,602 97,422,910
Deduction of incomes not involving cash inflows and others (35,842,600) (108,779,131)
Movements in operating assets and liabilities:
Decrease (increase) in trade receivables (29,287,969) (1,361,937)
Decrease in other receivables 2,242,569 2,725,948
Decrease in inventories (6,699,621) 2,494
Decrease (increase) in advance payments (12,171,934) (8,527,408)
Decrease in other current assets (960,839) 1,070,342
Increase in other non-current assets 167,560 (162,291)
Increase (decrease) in trade payables 33,362,874 1,540,475
Decrease in other payables 301,053 (17,153,030)
Increase (decrease) in deposits received for travel 68,989,862 1,830,804
Increase in advances received (3,404,855) 2,405
Decrease in other financial liabilities 7,868 (110,315)
Decrease in other current liabilities 1,048,138 (844,767)
Decrease in provisions (525,909) (595,758)
Decrease in long-term other payables (49,960) (312,711)
Decrease in other long-term employee benefit (179,055) (324,900)
(8,461,641) (104,023,130)
Interest expense paid (2,859,892) (4,338,649)
Interest income received 1,608,360 1,101,003
Dividend income received - -
Income taxes paid (527,693) (28,930)
Net cash provided by operating activities W (10,240,866) (107,289,706)
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
For the years ended December 31, 2022 and 2021
(In thousands of won) 2022 2021
Cash flows from investing activities
Cash inflows from investing activities:
Decrease in short-term financial instruments W 39,696,173 19,923,883
Decrease in other receivables 159,233 247,390
Disposal of financial assets at FVTPL 200,000 1,165,183
Disposal of investment in associates and joint venture 251,100 162,722
Disposal of financial assets at FVOCI - -
Disposal of property and equipment 677,031 308,437
Disposal of intangible assets 488,022 11,517
Disposal of intangible assets being acquired - -
Decrease in finance lease receivables 588,448 211,479
Decrease in other financial assets 5,997,337 11,332,739
Government Grants 32,846 -
Disposal of assets held for sale - 211,178,338
Cash outflows for investing activities:
Increase in short-term financial instruments 111,311,078 16,676,202
Increase in other receivables 9,523 403,294
Acquisition of financial assets at FVTPL - 250,000
Acquisition of financial assets at FVOCI - -
Acquisition of property and equipment 1,810,936 2,544,706
Acquisition of intangible assets 3,223,260 2,031,228
Increase in other financial assets 3,073,373 2,974,553
Net cash used in investing activities W (71,337,980) 219,661,705
HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows, Continued
For the years ended December 31, 2022 and 2021
(In thousands of won) 2022 2021
Cash flows from financing activities
Cash inflows from financing activities:
Proceeds from short-term borrowings W 40,488,800 55,724,965
Proceeds from long-term borrowings 15,923 1,281,219
Paid-in capital increase of parent company 104,058,553 -
Paid-in capital increase of subsidiaries 80,970 4,001,740
Proceeds from leasehold deposits received 296,200 110,457
Cash outflows for financing activities:
Repayment of short-term borrowings 41,521,004 62,722,484
Repayment of current portion of long-term borrowings 3,916,979 6,614,496
Repayment of long-term borrowings - 81,570,000
Repayment of finance lease liabilities 28,930,991 16,130,912
Payment of cost of stock issuing - 74,841
Acquisition of treasury stocks - 1,083
Payment of dividends 352,519 2,972,884
Payment of leasehold deposits received 204,194 419,879
Net cash provided by financing activities 70,014,760 (109,388,198)
Increase (decrease) in cash on changes in scope of consolidation - 641,277
Net decrease in cash and cash equivalents (11,564,086) 3,625,078
Cash and cash equivalents at beginning of year 105,686,896 101,851,025
Effect of exchange rate change (1,625,592) 210,794
Cash and cash equivalents at end of year W 92,497,218 105,686,896
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