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

Not applicable.

 

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 (Terminal1)	271, Gonghang-ro, Jung-gu, Incheon, Republic of Korea
Airport Office (Commodity Support)	124, Yeongjong-daero, Jung-gu, Incheon, Republic of Korea
Suwon Sales Office	46, Gwongwang-ro 180beon-gil, Paldal-gu, Suwon-si, Gyeonggi-do, Republic of Korea
Seongnam Sales Office	42, Jangmi-ro, Bundang-gu, Seongnam-si, Gyeonggi-do, Republic of Korea
Bucheon Sales Office	203, Buil-ro, Wonmi-gu, Bucheon-si, Gyeonggi-do, Republic of Korea
Daegu Sales Office	648, Gukchaebosang-ro, Jung-gu, Daegu, Republic of Korea
Daejeon Sales Office	69, Dunsanseo-ro, Seo-gu, Daejeon, Republic of Korea
Gwangju Sales Office	136, Geumnam-ro, Buk-gu, Gwangju, Republic of Korea
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
Suncheon Sales Office	15, Chunghyo-ro, Suncheon-si, Jeollanam-do, Republic of Korea
Changwon Sales Office	754, Changwon-daero, Seongsan-gu, Changwon-si, Gyeongsangnam-do, Republic of Korea
Travel Desk	51, Sogong-ro, Jung-gu, Seoul, Republic of Korea

 

5. Status of Employees (As of December 31, 2023)

(Unit: person)

Classification	Office & Operation
Men	616
Women	654
Total	1,270

 

6. Organization

II. INFORMATION ON SHARES

1. Total Number of Stocks, Etc.

A. Total number of stocks (As of December 31, 2023)

(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 (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		31st Term	30th Term	29th Term
Face value per stock (won)		500	500	500
(Consolidated) Current net income (million won)		47,029	(66,774)	(43,987)
(Separated) Current net income (million won)		30,819	(74,617)	(38,741)
(Consolidated) Net income per share (won)		3,036	(4,618)	(3,285)
Total amount of cash dividend (million won)		77,450	-	-
Total amount of stock dividend (million won)		-	-	-
Dividend payout ratio (%)		164.7	-	-
Yield rate of cash dividend (%)	Common stock	7.8	-
	Preferred stock	-	-
Yield rate of stock dividend (%)	Common stock	-	-
	Preferred stock	-	-
Cash dividend per share (won)	Common stock	5,000	-
	Preferred stock	-	-
Stock dividend per share	Common stock	-	-
	Preferred stock	-	-

 

III. CONTENTS OF THE BUSINESS

1. Summary of the Business

The COVID-19 pandemic, which began in 2020, imposed unprecedented challenges on the travel industry by restricting international movement over the past three years. Fortunately, with the increase in vaccination rates and the rapid decline in the spread of the virus, the World Health Organization (WHO) declared an end to the Public Health Emergency of International Concern in May 2023, three years and four months after the onset of the pandemic. In accordance with this, the government of South Korea declared an end to the pandemic and lifted all related restrictions. As countries worldwide relaxed their quarantine measures, the travel industry began to show signs of a robust recovery.

Throughout the COVID-19 period, Hanatour focused on strengthening its product and channel capabilities. We restructured our main product line around 'Hanapack 2.0,' shifting towards mid-to-high-priced packages to simultaneously enhance customer satisfaction and profitability. As a result, Hanapack 2.0 accounted for 57% of the company's total package sales last year, a significant increase from 8% before the pandemic. This segment has now firmly established itself as a major revenue source for the company. In terms of customer satisfaction, the Hanatour Customer Satisfaction Index (HCSI) showed a marked improvement, rising from the high 70s pre-pandemic to the mid-80s following the launch of 'Hanapack 2.0.'

Hanatour also invested significantly in strengthening its online channel capabilities, particularly focusing on its mobile app. The app's usability and functionality were comprehensively upgraded, and substantial efforts were made to enhance travel content useful for both package and FIT (Free Independent Traveler) customers. Consequently, our mobile app achieved a record high of over 550,000 Monthly Active Users (MAU) in September 2023, solidifying its dominant market position. The online sales ratio of package tours also increased significantly, from 19% before the pandemic to 39%, demonstrating improved profitability through strengthened online channel capabilities.

The recovery of the package travel market began in earnest in the second half of 2023, and this trend is expected to continue into 2024. In January of this year alone, the number of package tourists sent by Hanatour increased by 40% compared to the previous month, surpassing market expectations. During the pandemic, Hanatour streamlined its cost structure by divesting underperforming subsidiaries. The focus on mid-to-high-end packages through 'Hanapack 2.0' has enhanced both customer satisfaction and profitability. The strengthened online channels have laid the foundation for increased sales of package products and combined products targeting FIT customers. Based on these improvements and market recovery, the company anticipates achieving its highest-ever annual operating profit on a consolidated basis this year.

As South Korea's leading travel company, Hanatour will continue to drive innovation and growth in the travel industry. We appreciate your continued interest and support in our new journey this year.

 

2. Market Share Rate

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

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

 

<Market share rate based on the number of people>

Year	2023		2022		2021
	Total Departures from HANATOUR	Total Departures of Korea	Total Departures from HANATOUR	Total Departures of Korea	Total Departures from HANATOUR	Total Departures of Korea
	2,589,867	21,293,382	533,957	5,904,941	42,441	803,201
Share rate	12.16%		9.04%		5.28%

 

 

3. Characteristics of the market

There are four 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	20,400,000	100.00
Tour Marketing Korea Service Inc.	Travel Business	140,000	70.00
Web Tour Service Inc.	Travel Business	8,777,380	76.99
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	11,000,000	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 VIETNAM COMPANY LIMITED	Travel Business	-	85.00
PHILIPPINE HANATOUR INC.	Travel Business	218,797	99.99
HNT SG PTE. LTD.	Travel Business	-	-

 

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	31st Term	30th Term	29th Term
Sales	324,720,747	66,269,096	10,781,802
Operating Expenses	306,314,041	156,798,748	108,327,485
Operating Income	18,406,706	(90,529,652)	(97,545,683)
Profit Before Tax	31,237,113	(77,690,960)	(43,530,465)
Income Tax Expense	418,144	(3,074,173)	(4,789,718)
Net Income	30,818,969	(74,616,787)	(38,740,747)
Net Income per Share(Won)	1,990	(5,160)	(2,893)

 

2. Financial position

(In thousand won)

Classification	31st Term	30th Term	29th Term
Current Assets	367,002,425	202,531,190	86,185,310
Non-Current Assets	118,773,275	115,786,404	128,627,359
Total Assets	485,775,700	318,317,593	214,812,670
Current Liabilities	296,740,313	162,469,875	92,071,844
Long-term Liabilities	8,233,563	5,864,863	2,199,736
Total Liabilities	304,973,876	168,334,738	94,271,580
Capital Stock	8,019,593	8,019,593	6,969,593
Other Paid-in Capital	(20,526,418)	119,473,582	16,465,030
Elements of Other Shareholder's Equity	(9,097)	(9,097)	(9,097)
Retained Earnings	193,317,746	22,498,777	97,115,564
Total Shareholder's Equity	180,801,824	149,982,855	120,541,089
Total Liabilities and Shareholder's Equity	485,775,700	318,317,593	214,812,670

 

Ⅵ. RISK FACTORS

Refer to III - 1. Summary of the Business

 

Ⅶ. MANAGEMENT

Full-time / Part-time	Name	Position	Assigned Task
Full-time	SangHwan Park	Chairman, Director	General Management
Full-time	HeeSeok Kweon	Senior Vice Chairman, Director	General Management
Full-time	MiSun Song	Chief Executive Officer and Director	General Management
Full-time	ChangHo Ryu	Executive Director, 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 and 5 people with a special relationship	4,456,100	27.78%
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.	20,400,000	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
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
InterparkTriple Corp.	HANATOUR Service Inc.	60,876	0.50
Hani Tour Inc.	HANATOUR Service Inc.	19,078	9.54
SAM Consulting Co.,Ltd.	HANATOUR Service Inc.	1,667	7.41
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
WOONGJIN CO., LTD.	Hanatour Business Service Inc.	6,903	0.01
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	11,000,000	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 VIETNAM COMPANY LIMITED	HANATOUR Service Inc.	Vietnam	-	85.00
PHILIPPINE HANATOUR INC.	HANATOUR Service Inc.	Philippines	218,797	99.99
HNT SG PTE. LTD.	HANATOUR Service Inc.	Singapore	-	-
KC HOSPITALITY CO.,LTD	HANATOUR Service Inc.	Laos	57,600	10.00

 

Ⅹ. MAJOR CREDITORS

Not applicable.

 

XI. IMPORTANT EVENTS AFTER THE SETTLEMENT OF

ACCOUNTS PERIOD

(1) Hanatour Service (M) Sdn.Bhd. which is one of subsidiaries of the Group resolved to dissolve on February 16, 2024.

 

 

XII. OTHER IMPORTANT FACTS ABOUT THE BUSINESS

Not applicable.

 

 

HANATOUR SERVICE INC. AND ITS SUBSIDIARIES

Consolidated Statements of Financial Position

As of December 31, 2023 and 2022

(In thousands of won)		Notes		2023		2022
Assets
Cash and cash equivalents		4,23,35,39	W	118,664,728		92,497,218
Short-term financial instruments		23,35,39		145,600,341		88,602,428
Trade receivables		5,23,34,39		61,769,325		39,362,975
Other receivables		5,23,34,39		11,009,797		5,856,639
Finance lease receivables		6,23,39		873,674		570,354
Inventories		7		59,064,708		8,274,560
Advanced payments		8		36,807,411		25,212,457
Other current assets		8		3,165,293		2,996,919
Other financial assets		16,23,34,39		8,912,662		6,795,589
Current tax assets				1,089,719		371,080
Total current assets				446,957,658		270,540,219
Non-current financial assets at FVPL		9,23		3,606,339		3,012,260
Financial assets at FVOCI		10,23		1,192,983		1,189,200
Investments in associates and joint ventures		11,34		4,892		702,932
Long-term finance lease receivables		6,23,39		1,028,040
Long-term other receivables		5,23,34,39		3,869,520		4,125,824
Investment property, net		12,35		886,089		1,108,747
Property, plant and equipment, net		13,35		11,561,649		10,176,272
Right-of-use assets		15		92,509,393		76,601,501
Intangible assets		14		16,720,494		22,932,160
Other financial assets		16,23,34,35,39		11,301,479		12,723,619
Deferred tax assets		32		54,925,964		52,292,869
Other non-current assets		8		31,879		23,837
Total non-current assets				197,638,720		184,889,221
Total assets		37	W	644,596,378		455,429,440

 

(continued)

 

HANATOUR SERVICE INC. AND ITS SUBSIDIARIES

Consolidated Statements of Financial Position, Continued

As of December 31, 2023 and 2022

(In thousands of won)		Notes		2023		2022
Liabilities
Trade payables		23,39	W	80,874,678		41,976,540
Other payables		18,23,34,39		63,981,265		47,177,054
Income tax payables				671,633		362,065
Deposits received for travel				163,826,944		77,008,167
Advances received				17,935,127		22,423,174
Short-term borrowings		17,23,39		8,682,599		14,370,131
Current portion of long-term borrowings		17,23,39		1,803,197		2,086,092
Finance lease liabilities		19,23,39		16,810,476		13,914,120
Provisions		20		1,142,630		892,688
Other financial liabilities		18,23,39		2,467,894		2,084,106
Other current liabilities		21		11,881,663		10,464,511
Total current liabilities				370,078,106		232,758,647
Long-term other payables		18,23,39		-		142,878
Long-term borrowings		17,23,39		5,337,856		7,865,108
Long-term provisions		20		433,104		198,919
Long-term finance lease liabilities		19,23,39		104,502,824		105,785,176
Provision for long-term employee benefits		22		796,885		4,404,615
Long-term non-current financial liabilities		18,23,39		24,000		-
Other non-current liabilities		21		4,119,523		4,572,449
Total non-current liabilities				115,214,192		122,969,145
Total liabilities				485,292,298		355,727,793
Equity
Capital stock		24		8,019,593		8,019,593
Other contributed capital		24,27		(7,085,791)		132,914,209
Other components of equity		25		2,624,819		2,642,459
Retained earnings (deficit)		26		166,799,642		(20,268,959)
Equity attributable to the owners of the Parent Company				170,358,263		123,307,301
Non-controlling interests				(11,054,184)		(23,605,653)
Total equity				159,304,079		99,701,648
Total liabilities and equity			W	644,596,378		455,429,440

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

HANATOUR SERVICE INC. AND ITS SUBSIDIARIES
Consolidated Statements of Comprehensive Income or Loss

For each of the two years in the period ended December 31, 2023

(In thousands of won, except earnings per share data)		Notes		2023		2022
Operating revenue		28,34,37	W	411,611,609		114,969,463
Operating expense		29,34,37		377,563,623		216,153,549
Bad debt expense				(4,149,653)		(1,500,026)
Other operating expense				381,713,276		217,653,575
Operating income		37		34,047,986		(101,184,086)
Financial income		30,31		7,826,709		3,158,458
Financial expense		30,31		2,863,292		2,847,390
Gain from investment in associates and joint ventures		30		92,335		355,249
Other income		30,34		21,880,866		43,045,885
Other expense		30,34		3,680,370		11,378,724
Income (loss) before income tax expenses				57,304,234		(68,850,608)
Income tax benefit of continuing operations		32		(1,529,561)		(4,083,086)
Income (Loss)			W	58,833,795		(64,572,425)
Income (loss) from continuing operations				58,833,795		(64,767,522)
Gain from discontinued operations		40		222,967		195,097
Other comprehensive income after income tax expense				781,731		2,757,022
Items that will never be reclassified to profit of loss:
Gain on valuation of financial assets at FVOCI				3,669		2,749
Items that are or may be reclassified subsequently to profit of loss:
Gain on foreign operations translation, net				778,062		2,754,273
Total comprehensive income (loss)			W	59,838,493		(61,815,403)
Net income (loss) attributable to:
Owners of the Parent Company				47,028,589		(66,773,945)
Non-controlling interests				12,028,173		2,201,520
			W	59,056,762		(64,572,425)
Comprehensive income (loss) attributable to:
Owners of the Parent Company				47,010,458		(66,053,865)
Non-controlling interests				12,828,035		4,238,462
			W	59,838,493		(61,815,403)
Earnings (losses) per share		33
Basic earnings (losses) per share attributable to:				3,036		(4,618)
Continuing operation (in won)				3,023		(4,630)
Discontinued operation (in won)				13		12
Diluted earnings (losses) per share attributable to:			W	3,036		(4,618)
Continuing operation (in won)				3,023		(4,630)
Discontinued operation (in won)				13		12

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

 

 

HANATOUR SERVICE INC. AND ITS SUBSIDIARIES

Consolidated Statements of Changes in Equity

For each of the two years in the period ended December 31, 2023

(In thousands of won)		Capital Stock		Other contributed capital		Other components of equity		Retained earnings (deficit)		Non-controlling interests		Total shareholders' equity
January 1, 2022	W	6,969,593		29,905,656		1,947,292		46,504,986		(27,571,400)		57,756,127
Net loss		-		-		-		(66,773,945)		2,201,520		(64,572,425)
Gain on foreign operations translation		-		-		718,621		-		2,035,652		2,754,273
Gain on valuation financial assets at FVOCI		-		-		1,458		-		1,291		2,749
Paid-in capital increase of the Parent company		1,050,000		103,008,553		-		-		-		104,058,553
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		2,642,458		(20,268,959)		(23,605,653)		99,701,648

 

 

January 1, 2023	W	8,019,593		132,914,209		2,642,458		(20,268,959)		(23,605,653)		99,701,648
Net income		-		-		-		47,028,589		12,028,173		59,056,762
Gain on foreign operations translation		-		-		(21,064)		-		799,126		778,062
Gain on valuation financial assets at FVOCI		-		-		2,933		-		736		3,669
Transfer of retained earnings		-		(140,000,000)		-		140,000,000		-		-
Dividends		-		-		-		-		(236,069)		(236,069)
Changes in scope of consolidation		-		-		492		40,012		(40,497)		7
December 31, 2023	W	8,019,593		(7,085,791)		2,624,819		166,799,642		(11,054,184)		159,304,079

 

 

 

The accompanying notes are an integral part of the consolidated financial statements.

 

 

 

 

HANATOUR SERVICE INC. AND ITS SUBSIDIARIES                                      

Consolidated Statements of Cash Flows

For each of the two years in the period ended December 31, 2023

(In thousands of won)	Note		2023		2022
Cash flows from operating activities
Net income (loss)		W	59,056,762		(64,572,425)
Additions of expenses not involving cash outflows and others	38		27,756,868		39,113,602
Deduction of incomes not involving cash inflows and others	38		(21,022,948)		(35,842,600)
Movements in operating assets and liabilities:
Increase in trade receivables			(20,663,371)		(29,287,967)
Decrease (increase) in other receivables			(3,415,555)		2,242,569
Increase in inventories			(51,509,240)		(6,699,621)
Increase in advanced payments			(9,865,813)		(12,171,934)
Increase in other current assets			(18,762)		(960,839)
Decrease (increase) in other non-current assets			(22,115)		167,560
Increase in trade payables			38,922,066		33,362,874
Increase in other payables			10,475,434		301,053
Increase in deposits received for travel			86,912,668		68,989,862
Decrease in advances received			(4,013,053)		(3,404,855)
Increase in other financial liabilities			63,557		7,868
Increase in other current liabilities			4,000,043		1,048,138
Decrease in provisions			(1,194,146)		(525,909)
Decrease in long-term other payables			-		(49,960)
Decrease in other long-term employee benefit			(151,500)		(179,055)
			115,310,895		(8,461,640)
Interest expense paid			(2,999,941)		(2,859,892)
Interest income received			6,025,564		1,608,360
Income taxes paid			(1,609,915)		(527,693)
Net cash provided by (used in) operating activities		W	116,726,602		(10,240,865)

 

 

(continued)

 

 

 

HANATOUR SERVICE INC. AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

For each of the two years in the period ended December 31, 2023

(In thousands of won)			2023		2022
Cash flows from investing activities
Cash inflows from investing activities:
Decrease in short-term financial instruments		W	176,743,468		39,696,173
Decrease in other receivables			670,150		159,233
Disposal of financial assets at FVPL			-		200,000
Disposal of financial assets at amortized cost			157,627		-
Disposal of investment in associates and joint venture			781,956		251,100
Disposal of property, plant and equipment			438,639		677,031
Disposal of intangible assets			-		488,022
Decrease in finance lease receivables			1,278,075		588,448
Decrease in other financial assets			4,386,632		5,997,337
Government grants			-		32,846
Cash outflows for investing activities:
Increase in short-term financial instruments			233,854,168		111,311,078
Increase in other receivables			2,163,032		10,802
Acquisition of property, plant and equipment			5,300,618		1,810,936
Acquisition of intangible assets			2,117,029		3,223,260
Increase in other financial assets			5,847,607		3,072,094
Net cash used in investing activities		W	(64,825,906)		(71,337,980)

 

 

(continued)

 

HANATOUR SERVICE INC. AND ITS SUBSIDIARIES

Consolidated Statements of Cash Flows, Continued

For each of the two years in the period ended December 31, 2023

(In thousands of won)	Note		2023		2022
Cash flows from financing activities
Cash inflows from financing activities:
Proceeds from short-term borrowings		W	28,657,977		40,488,800
Proceeds from long-term borrowings			-		15,923
Paid-in capital increase of subsidiaries			7		104,139,523
Proceeds from leasehold deposits received			420,149		296,200
Cash outflows for financing activities:
Repayment of short-term borrowings			33,860,020		41,521,004
Repayment of current portion of long-term borrowings			2,006,062		3,916,979
Repayment of long-term borrowings			450,846		-
Repayment of finance lease liabilities			17,511,380		28,930,991
Payment of dividends			276,840		352,519
Payment of leasehold deposits received			47,100		204,194
Net cash provided by (used in) financing activities	38		(25,074,115)		70,014,759
Net increase (decrease) in cash and cash equivalents			26,826,579		(11,564,086)
Cash and cash equivalents at the beginning of the year			92,497,218		105,686,896
Effect of exchange rate change			(659,070)		(1,625,592)
Cash and cash equivalents at the end of the year		W	118,664,728		92,497,218

 

The accompanying notes are an integral part of the consolidated financial statements.

 

Notes to the Consolidated Financial Statements

The 31^st period    from 2023.01.01 to 2023.12.31

The 30^th period   from 2022.01.01 to 2022.12.31

                    HANATOUR Service Inc. and its Subsidiaries

 

1. General Information :

(2) The Parent Company

HANATOUR Service Inc. (the "Parent Company") was established on November 1, 1993. The Parent Company is primarily engaged in operating travel agency activities, and its shares were listed on the KRX KOSDAQ market on November 24, 2000. They were listed on the London Stock Exchange on November 7, 2006, in the form of global depositary receipts ("GDRs"). As of November 1, 2011, the Parent Company transferred its listing from the KRX KOSDAQ market to the stock market opened by the Korea Exchange.

The Parent Company is domiciled in Korea at Insadong 5-gil, Jongno-gu, Seoul. As of December 31, 2023, the total paid-in capital is 8,020 million won. Harmonia 1, Inc. owns about 16.7% of the paid-in capital, major executives and employees own about 11.2%, while treasury stock is about 3.4% (* HANATOUR Service Inc. and its subsidiaries are collectively referred to as the "Group").

 

(3) Consolidated Subsidiaries
Consolidated subsidiaries as of December 31, 2023 and 2022 are as follows:

The Parent Company	Subsidiaries	Major business	Location	Controlling interest (%) 2023        2022		Closing Date
HANATOUR Service Inc.	Web Tour Service Inc.	Travel Agency	Korea	76.99	76.99	12.31
	Hanatour Jeju Service Inc.	Travel Agency	Korea	77.35	77.35	12.31
	Tour Marketing Korea Service Inc.	Travel Agency	Korea	70.00	70.00	12.31
	Hanatour ITC Service Inc.	Travel Agency	Korea	100.00	100.00	12.31
	Hanatour Business Service Inc.	Travel Agency	Korea	100.00	100.00	12.31
	HANATOUR EUROPE LTD	Travel Agency	U.K.	70.00	70.00	12.31
	HANATOUR JAPAN CO., LTD	Travel Agency	Japan	53.98	53.98	12.31
	HANATOUR CHINA	Travel Agency	China	100.00	100.00	12.31
	HANATOUR HONGKONG CO., LTD	Travel Agency	Hong Kong	100.00	100.00	12.31
	Mark Hotel Co., Ltd. (*1)	Hotel Business	Korea	-	100.00	12.31
	BEIJING HANA INFORMATIONTECHNOLOGY CO., LTD	Software Development	China	100.00	100.00	12.31
	HANA TOUR SERVICE (M) SDN.BHD. (*2)	Travel Agency	Malaysia	100.00	100.00	12.31
	Hana Finance Service Inc.	Loan Business	Korea	100.00	100.00	12.31
	SM duty free Co., Ltd. (*3)	Duty-free shop	Korea	90.13	90.13	12.31
	HANATOUR VIETNAM COMPANY LIMITED	Travel Agency	Vietnam	85.00	85.00	12.31
	HANATOUR PHILIPPINES CORP. (*1)	Travel Agency	Philippines	-	97.54	12.31
	HANATOUR EU GMBH (*1)	Travel Agency	Germany	-	100.00	12.31
	Hana Tourist Inc. (*4)	Travel Agency	Korea	30.23	30.23	12.31
	PHILIPPINE HANATOUR INC.(*5)	Travel Agency	Philippines	99.99	-	12.31
	HNT SG PTE. LTD. (*6)	Travel Agency	Singapore	100.00	-	12.31
Web Tour Service Inc.	Nextour Co., Ltd.	Travel Agency	Korea	76.99	76.99	12.31
HANA TOUR JAPAN CO., LTD	U.I Sightseeing Bus LLC	Transportation	Japan	53.98	53.98	12.31
	Allegrox TM Hotel	Accommodation Consignment Business	Japan	53.98	53.98	12.31
	HANATOUR JAPAN SYSTEM VIETNAM COMPANY LIMITED	Software Development and Maintenance	Vietnam	53.98	53.98	12.31

(*1) Liquidation was completed during the current period.

(*2) Liquidation was completed after the reporting period.

(*3) As of the end of the current period, the business is closed.

(*4) Although the Group owns less than half of the voting rights of Hana Tourist Inc., the Group has concluded that it controls the entity as it is deemed to have substantial control over Hana Tourist Inc.

(*5) Newly established during the current period.

(*6) The registration of incorporation was completed during the current period, but the capital has not been paid.

 

 

(4) Abridged financial information of major subsidiaries as of December 31, 2023, and 2022 and for each of the two years in the period ended December 31, 2023 is as follows:

 

Name of the company (In thousands of Korean won)	Assets	Liabilities	Sales	Profit(Loss) for the year	Total comprehensive income (loss) for the year, net of tax
Web Tour Service Inc.	29,281,363	11,204,688	21,746,127	3,137,084	3,137,084
Hanatour Business Service Inc.	10,406,896	8,147,154	9,995,317	1,039,782	1,040,201
HANATOUR JAPAN CO., LTD	33,182,615	24,358,465	12,480,166	6,642,152	6,406,869
U.I Sightseeing Bus LLC	18,220,128	9,837,626	16,471,041	4,211,146	3,938,196
Allegrox TM Hotel	80,694,105	125,779,068	21,183,925	11,308,229	13,576,319

 

(5) Changes to Subsidiaries

Subsidiaries newly included in or excluded from the scope of consolidation for the year ended December 31, 2023 are as follows:

Reason	December 31, 2023	December 31, 2022
Inclusion due to the addition of controlling interest	PHILIPPINE HANATOUR INC.	-
	HNT SG PTE. LTD. (*)
Exclusion due to liquidation	Mark Hotel Co., Ltd. HANATOUR PHILIPPINES CORP. HANATOUR EU GMBH	HANATOUR PTE LTD HANA TOUR PTY. LTD. CAMLAO HANATOUR CO., LTD. HNT ITALIA - SOCIETA' A RESPONSABILITA' LIMITATA HANATOUR USA INC. VISION TOUR, INC.

(*) The registration of incorporation was completed during the current period, but the capital has not been paid.

 

(6) Abridged financial position of subsidiaries with material non-controlling interests for each of the two years in the period ended December 31, 2023 is as follows (before the elimination of intercompany transactions):

		December 31, 2023
(in thousands of Korean won)		Web Tour Service Inc.		HANATOUR JAPAN CO., LTD.		SM duty free Co., Ltd. (*)	U.I Sightseeing Bus LLC	Allegrox TM Hotel
Current Assets	24,437,823		23,640,908		24,175,013		10,541,284	5,760,270
Non-current Assets	4,843,540		9,541,707		-		7,678,844	74,933,835
Total Assets	29,281,363		33,182,615		24,175,013		18,220,128	80,694,105
Current Liabilities	11,050,524		17,226,215		71,929,661		5,840,562	13,791,923
Non-current Liabilities	154,164		7,132,250		-		3,997,064	111,987,145
Total Liabilities	11,204,688		24,358,465		71,929,661		9,837,626	125,779,068
Controlling interests	13,917,611		4,804,995		(43,040,513)		4,564,505	(24,550,014)
Non-controlling interests	4,159,064		4,019,155		(4,714,135)		3,817,997	(20,534,949)
Total Equity	18,076,675		8,824,150		(47,754,648)		8,382,502	(45,084,963)

(*) Business closed and scheduled to be liquidated.

	December 31, 2022
(in thousands of Korean won)	Web Tour Service Inc.	HANATOUR JAPAN CO., LTD.	SM duty free Co., Ltd. (*)	U.I Sightseeing Bus LLC	Allegrox TM Hotel
Current Assets	23,327,718	22,230,112	24,199,632	6,276,098	8,695,215
Non-current Assets	5,123,178	5,060,447	-	8,299,664	74,859,358
Total Assets	28,450,896	27,290,559	24,199,632	14,575,762	83,554,573
Current Liabilities	12,023,448	17,911,188	72,177,248	7,308,558	28,451,473
Non-current Liabilities	461,823	6,962,090	-	2,822,898	113,764,382
Total Liabilities	12,485,271	24,873,278	72,177,248	10,131,456	142,215,855
Controlling interests	12,292,269	1,316,276	(43,241,471)	2,420,048	(31,942,697)
Non-controlling interests	3,673,356	1,101,005	(4,736,145)	2,024,258	(26,718,585)
Total Equity	15,965,625	2,417,281	(47,977,616)	4,444,306	(58,661,282)

(*) Business closed and scheduled to be liquidated.

 

The above summary of financial position and non-controlling interests are the amounts after recognizing goodwill occurred at the time of business combination and after reflecting fair value adjustments, as well as consolidation adjustments consistent with the Parent Company's accounting standards, but before eliminating intercompany transactions.

 

 

(7) Abridged consolidated statements of comprehensive income of subsidiaries with material non-controlling interests for each of the two years in the period ended December 31, 2023 and 2022 are as follows (before the elimination of intercompany transactions):

(in thousands of Korean won)		December 31, 2023
Description (in thousands of Korean won)	Web Tour Service Inc.		HANATOUR JAPAN CO., LTD	SM duty free Co., Ltd. (*)	U.I Sightseeing Bus LLC	Allegrox TM Hotel
Sales	21,746,127		12,480,166	-	16,471,041	21,183,925
Operating profit (loss)	2,671,156		3,860,331	(26,726)	2,449,892	3,678,661
Profit for the year	3,137,084		6,642,152	222,968	4,211,146	11,308,229
Other comprehensive income (loss), net of tax	-		(235,283)	-	(272,950)	2,268,090
Total comprehensive income , net of tax	3,137,084		6,406,869	222,968	3,938,196	13,576,319
Profit for the year attributable to non-controlling interests	721,777		3,025,316	22,010	1,918,060	5,150,584
Total comprehensive income  attributable to non-controlling interests	721,777		2,918,151	22,010	1,793,739	6,183,636

(*) Business closed and scheduled to be liquidated.

 

 

		December 31, 2022
Description (in thousands of Korean won)	Web Tour Service Inc.		HANATOUR JAPAN CO., LTD	SM duty free Co., Ltd. (*)	U.I Sightseeing Bus LLC	Allegrox TM Hotel
Sales	16,659,345		2,000,688	-	3,107,369	15,251,388
Operating profit (loss)	1,544,357		(3,445,309)	(86,770)	(1,500,775)	(5,426,059)
Profit (Loss) for the year	1,555,088		(4,982,912)	195,097	(1,448,147)	12,221,390
Other comprehensive income (loss), net of tax	-		(432,553)	-	(428,215)	5,324,074
Total comprehensive income (loss), net of tax	1,555,088		(5,415,465)	195,097	(1,876,362)	17,545,464
Profit (Loss) for the year attributable to non-controlling interests	357,793		(2,269,578)	19,259	(659,591)	5,566,504
Total comprehensive income (loss) attributable to non-controlling interests	357,793		(2,466,594)	19,259	(854,631)	7,991,472

(*) Business closed and scheduled to be liquidated.

 

The above summary of management performance and non-controlling interests are the amounts after recognizing goodwill occurred at the time of business combination and after reflecting fair value adjustments, as well as consolidation adjustments consistent with the Parent Company's accounting standards, but before eliminating intercompany transactions.

 

(8) Abridged consolidated statements of cash flows of subsidiaries with material non-controlling interests for each of the two years in the period ended December 31, 2023 and 2022 are as follows (before the elimination of intercompany transactions):

		December 31, 2023
Description (in thousands of Korean won)		Web Tour Service Inc.		HANATOUR JAPAN CO., LTD		SM duty free Co., Ltd. (*)		U.I Sightseeing Bus LLC		Allegrox TM Hotel
Cash flows from operating activities	3,198,060		4,967,577		(20,499)		5,515,514		7,507,992
Cash flows from investing activities	(4,162,690)		(268,922)		-		(690,302)		397,121
Cash flows from financing activities	(1,402,465)		(4,975,332)		-		(3,179,136)		(9,920,695)
Net increase (decrease) in cash and cash equivalents	(2,367,095)		(276,677)		(20,499)		1,646,076		(2,015,582)
Cash and cash equivalents at the beginning of the year	3,163,634		8,279,208		29,499		1,578,092		5,809,784
Effects of exchange rate changes on cash and cash equivalents	(465)		(393,388)		60		(99,928)		(206,761)
Cash and cash equivalents at the end of the year	796,074		7,609,143		9,060		3,124,240		3,587,441

(*) Business closed and scheduled to be liquidated.

 

		December 31, 2022
Description (in thousands of Korean won)		Web Tour Service Inc.		HANATOUR JAPAN CO., LTD		SM duty free Co., Ltd. (*)		U.I Sightseeing Bus LLC		Allegrox TM Hotel
Cash flows from operating activities	4,370,842	(4,037,030)		(50,981)		(160,505)		4,828,008
Cash flows from investing activities	(1,852,992)	(10,608,927)		-		(738)		2,788,603
Cash flows from financing activities	(1,856,476)	(2,067,744)		-		1,231,823		(3,741,654)
Net increase (decrease) in cash and cash equivalents	661,374	(16,713,701)		(50,981)		1,070,580		3,874,957
Cash and cash equivalents at the beginning of the year	2,502,260	26,444,788		80,256		584,146		2,220,118
Effects of exchange rate changes on cash and cash equivalents	-	(1,451,879)		224		(76,634)		(285,291)
Cash and cash equivalents at the end of the year	3,163,634	8,279,208		29,499		1,578,092		5,809,784

(*) Business closed and scheduled to be liquidated.

 

The above summary of cash flows and non-controlling interests are the amounts after recognizing goodwill occurred at the time of business combination and after reflecting fair value adjustments, as well as consolidation adjustments consistent with the Parent Company's accounting standards, but before eliminating intercompany transactions.

 

2. SUMMARY OF MATERIAL ACCUNTING POLICIES :

(1) Basis of consolidated financial statements preparation

 

The Group prepares statutory consolidated financial statements in Korean in accordance with International Financial Reporting Standards ("IFRS"). The accompanying consolidated financial statements have been translated into English from Korean financial statements. In the event of any differences in interpreting the financial statements or the independent auditor's report thereon, Korean version, which is used for regulatory reporting purposes, shall prevail.

 

The principal accounting policies applied in the preparation of these consolidated financial statements are the same as those adopted in the preparation of the annual financial statements for the fiscal year ended December 31, 2022, except for the impact associated with the introduction of the Standard or Interpretation stated below.

 

The new and amended accounting standards effective beginning on or after January 1, 2023 do not have a material impact on the consolidated financial statements of the Group.

 

① New and amended standards and interpretations

 

The Group applied for the first time certain standards and amendments, which are effective for annual periods beginning on or after January 1, 2023. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective.

 

1) Definition of Accounting Estimates - Amendments to KIFRS 1008

 

The amendments to KIFRS 1008 clarify the distinction between changes in accounting estimates, changes in accounting policies and the correction of errors. They also clarify how entities use measurement techniques and inputs to develop accounting estimates. The amendments had no material impact on the Group's consolidated financial statements.

 

2) Disclosure of Accounting Policies - Amendments to KIFRS 1001

 

The amendments to KIFRS 1001 provide guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their 'significant' accounting policies with a requirement to disclose their 'material' accounting policies and adding guidance on how entities apply the concept of materiality in making decisions about accounting policy disclosures.

The amendments had no material impact on the Group's consolidated financial statements.

 

 

 

3) Deferred Tax related to Assets and Liabilities arising from a Single Transaction - Amendments to KIFRS 1012

 

The amendments to KIFRS 1012 Income Taxes narrow the scope of the initial recognition exception, so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences such as leases and decommissioning liabilities.

 

The amendments had no material impact on the Group's consolidated financial statements.

 

 

② Standards issued but not yet effective

 

The new and amended standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group's financial statements are disclosed below. The Group intends to adopt these new and amended standards and interpretations, if applicable, when they become effective.

 

1)    Amendments to KIFRS 1116 Lease Liability in a Sale and Leaseback

 

The amendments to KIFRS 1116 specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognise any amount of the gain or loss that relates to the right of use it retains.

The amendments are effective for annual reporting periods beginning on or after January 1, 2024 and must be applied retrospectively to sale and leaseback transactions entered into after the date of initial application of KIFRS 1116. Earlier application is permitted and that fact must be disclosed.

The amendments are not expected to have a material impact on the Group's consolidated financial statements.

 

2)    Amendments to KIFRS 1001 Classification of Liabilities as Current or Non-current

 

The amendments to paragraphs 69 to 76 of KIFRS 1001 specify the requirements for classifying liabilities as current or non-current. The amendments clarify:

• what is meant by a right to defer settlement;

• that a right to defer must exist at the end of the reporting period;

• that classification is unaffected by the likelihood that an entity will exercise its deferral right; and

• that only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact its classification.

In addition, a requirement has been introduced to require disclosure when a liability arising from a loan agreement is classified as non-current and the entity's right to defer settlement is contingent on compliance with future covenants within twelve months.

The amendments are effective for annual reporting periods beginning on or after January 1, 2024 and must be applied retrospectively. The Group is currently assessing the impact the amendments will have on current practice and whether existing loan agreements may require renegotiation. The amendments are not expected to have material impact on the Group's consolidated financial statements.

 

3)    Supplier Finance Arrangements - Amendments to KIFRS 1007 and KIFRS 1107

 

The amendments to KIFRS 1007 Statement of Cash Flows and KIFRS 1107 Financial Instruments: Disclosures clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity's liabilities, cash flows and exposure to liquidity risk.

The amendments will be effective for annual reporting periods beginning on or after January 1, 2024. Early adoption is permitted, but will need to be disclosed.

The amendments are not expected to have a material impact on the Group's financial statements.

 

 

③ The consolidated financial statements of the Group will be approved by the board of directors on March 5, 2024, and finally approved at regular shareholders' meeting dated March 29, 2024.

 

 

(2) Basis of consolidation

 

The consolidated financial statements incorporate the financial statements of the Parent Company and entities (including structured entities) controlled by the Parent Company (or its subsidiaries). Control is achieved when the Parent Company:

 

- has power over the investee;

- is exposed, or has rights, to variable returns from its involvement with the investee; and

- has the ability to use its power to affect its returns.

 

The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control listed above.

 

Even if the Group has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Group considers all relevant facts and circumstances in assessing whether or not the Group's voting rights in an investee are sufficient to give it power, including:

 

   - the size of the Group's holding of voting rights relative to the size and dispersion of holdings of the other vote holders;

- potential voting rights held by the Group, other vote holders or other parties;

- rights arising from other contractual arrangements; and

- any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous shareholders' meetings.

 

Income and expenses of subsidiaries acquired or disposed of during the period are included in the consolidated statements of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with those used by the Group. All intragroup transactions, balances, income and expenses are eliminated in full on consolidation. Non-controlling interests are presented in the consolidated statement of financial position within equity, separately from the equity of the owners of the Group. The carrying amount of non-controlling interests consists of the amount of those non-controlling interests at the initial recognition and the changes in shares of the non-controlling interests in equity since the date of the acquisition. Total comprehensive income is attributed to the owners of the Group and to the non-controlling interests even if the non-controlling interest has a deficit balance.

 

Changes in the Group's ownership interests in subsidiaries, without a loss of control, are accounted for as equity transactions. The carrying amounts of the Group's interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to owners of the Group.

 

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), liabilities of the subsidiary and any non-controlling interests. The amounts previously recognized in other comprehensive income and accumulated in equity are accounted for as if the Group had directly disposed of the relevant assets (i.e., reclassified to profit or loss or transferred directly to retained earnings as specified by applicable IFRS). The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under KIFRS 1109 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or a joint venture.

 

(3) Business combination and goodwill

 

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair values of the assets transferred by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in exchange for control of the acquiree. The consideration includes any asset or liability resulting from a contingent consideration arrangement and is measured at fair value.

 

On the acquisition date, identifiable acquired assets, assumed liabilities, and contingent liabilities are recognized at fair value, with the following exceptions:

 

-Deferred tax assets or liabilities and assets or liabilities related to employee benefit obligations are recognized and measured in accordance with KIFRS 1012 Income Tax and KIFRS 1019 Employee Benefits, respectively.

-Liabilities or equity instruments that arise from the acquirer's replacement of the acquiree's share-based payments with its own are measured in accordance with KIFRS 1102 Share-based Payment.

-Non-current assets (or disposal groups) classified as held for sale, in accordance with KIFRS 1105 Non-current Assets Held for Sale and Discontinued Operations, are measured according to KIFRS 1105.

 

Goodwill arising from a business combination is recognized as an asset at the time of obtaining control (the acquisition date). Goodwill is measured as the excess of the aggregate of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of the Group's previously held equity interest in the acquiree over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed exceeds the aggregate of the consideration transferred, the amount of any non-controlling interest in the acquiree, and the acquisition-date fair value of the Group's previously held equity interest in the acquiree, the excess is recognized immediately in profit or loss as a bargain purchase gain.

 

Goodwill is not amortized but tested for impairment at least annually. For purposes of impairment tests, goodwill is allocated to those cash-generating units ("CGU") of the Group expected to have synergies from the business combination. CGU that goodwill has been allocated to is tested for impairment every year or when an event occurs that indicates impairment.

 

If the recoverable amount of a CGU is less than its carrying amount, the impairment will first decrease the goodwill allocated to that CGU and the remaining impairment will be allocated among other assets relative to its carrying value. Impairment recognized for goodwill may not be reversed. When disposing of a subsidiary, related goodwill will be included in gain or loss from disposal.

 

On the acquisition date, the non-controlling interest that represents the current ownership stake in the acquiree and entitles its holders to a proportionate share of the entity's net assets in the event of liquidation can be measured using one of the two methods: 1) at fair value, or 2) at the proportionate share of the acquiree's identifiable net assets recognized. The choice of measurement basis is made on a transaction-by-transaction basis. All other components of non-controlling interest are measured at fair value on the acquisition date unless otherwise required by KIFRS.

 

The consideration transferred by the acquiring entity in a business combination includes assets and liabilities arising from contingent consideration arrangements, and such contingent consideration is measured at fair value at the acquisition date and included as part of the consideration. Subsequent changes in fair value are retroactively adjusted against goodwill if they meet the conditions of the measurement period adjustments. Measurement period adjustments refer to adjustments that arise from obtaining additional information about facts and circumstances that existed at the acquisition date during the 'measurement period' (which cannot exceed one year from the acquisition date).

 

Changes in the fair value of contingent consideration that do not meet the conditions for measurement period adjustments are accounted for according to the classification of the contingent consideration. Contingent consideration classified as equity is not remeasured at subsequent reporting dates and is accounted for within equity upon settlement. Other contingent considerations are remeasured to fair value at subsequent reporting dates, and the fair value changes are recognized in gain or loss.

 

 

Acquisition-related costs are recognized in profit or loss as incurred. When a business combination is achieved in stages, the Group's previously held equity interest in the acquiree is remeasured at its fair value at the acquisition date and the resulting gain or loss, if any, is recognized in profit or loss(or other comprehensive income, as appropriate). Prior to the acquisition date, the amount resulting from changes in the value of its equity interest in the acquiree that have previously been recognized in other comprehensive income is reclassified to profit or loss where such treatment would be appropriate if that interest were directly disposed of.

 

 

 

 

(4) Non-current assets held for sale and discontinued operations

 

1) Non-current assets held for sale

 

The Group classifies a non-current asset (or disposal group) as held for sale, if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets (or disposal groups) and its sale must be highly probable. The management must be committed to a plan to sell the asset (or disposal group), and the sale should be expected to satisfy sale completion requirements within one year from the date of classification.

 

When the Group commits to a plan to sell all or part of the investment in an associate or joint venture, the all or part of the investment in the associate or joint venture is classified as held for sale if the above requirements are met. The Group ceases to apply the equity method to its investment in the associate or joint venture in respect of the part classified as held for sale. Meanwhile, the equity method continues to be applied to the remaining interests in associates or joint ventures that are not classified as held for sale, but if the Group loses significant influence over the associates or joint ventures as a result of a sale, the equity method is discontinued at the date of the sale.

 

Non-current assets (or disposal group) classified as held for sale are measured at the lower of their carrying amount and fair value, less costs to sell. Property, plant and equipment and intangible assets are not depreciated or amortized once classified as held for sale. Assets and liabilities classified as held for sale are presented separately as current items in the consolidated statement of financial position.

 

2) Discontinued operation

 

A disposal group is a discontinued business if it meets any of the following conditions:

- it represents a separate major line of business or geographical area of operations;

- it is part of a single plan to dispose of a separate major line of business or geographical area of operations; or

- it is a subsidiary acquired exclusively with a view to resale.

 

Discontinued operations are excluded from the results of continuing operations and are presented as a single amount as profit or loss after tax from discontinued operations in the statement of other comprehensive income. Additional information related to discontinued operations are disclosed in Note 40.

 

(5) Investments in associates and joint ventures

 

An associate is an entity over which the Group has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.

 

A joint venture is a joint arrangement, whereby the parties that have joint control of the arrangement have rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the relevant activities require unanimous consent of the parties sharing control.

 

The investment in an associate or a joint venture is initially recognized at cost and accounted for using the equity method. Under the equity method, an investment in an associate or a joint venture is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the Group's share of the profit or loss and other comprehensive income of the associate or the joint venture.

 

When the Group's share of losses of an associate or a joint venture exceeds the Group's interest in that associate or joint venture (which includes any long-term interests that, in substance, form part of the Group's net investment in the associate or the joint venture), the Group discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the associate or the joint venture.

 

Investment in associate or joint venture is accounted for using the equity method from the date that the investee becomes the associate or joint venture. Any excess of the cost of acquisition over the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities of an associate or a joint venture recognized at the date of acquisition is recognized as goodwill, which is included within the carrying amount of the investment.

 

Any excess of the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss.

 

The requirements of KIFRS 1028 are applied to determine whether it is necessary to recognize any impairment loss with respect to the Group's investment in an associate or a joint venture. When there is any indication of impairment, the entire carrying amount of the investment (including goodwill) is tested for impairment in accordance with KIFRS 1036 as a single asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill that forms part of the carrying amount of the investment. Any reversal of that impairment loss is recognized in accordance with KIFRS 1036 to the extent that the recoverable amount of the investment subsequently increases.

 

Upon disposal of an associate or a joint venture that results in the Group losing significant influence over that associate or joint venture, any retained investment is measured at fair value at that date and the fair value is regarded as its fair value on initial recognition as a financial asset in accordance with KIFRS 1109. The difference between the previous carrying amount of the associate or joint venture attributable to the retained interest and its fair value is included in the determination of the gain or loss on disposal of the associate or joint venture. In addition, the Group accounts for all amounts previously recognized in other comprehensive income in relation to that associate or joint venture on the same basis it would be required if that associate or joint venture had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities, the Group reclassifies the gain or loss from equity to profit or loss (as reclassification adjustment) when it loses significant influence over that associate or joint venture. When the Group reduces its ownership interest in an associate or a joint venture, but the Group continues to use the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities. In addition, the Group applies KIFRS 1105 to a portion of investment in an associate or a joint venture that meets the criteria to be classified as held for sale.

 

The Group continues to use the equity method when an investment in an associate becomes an investment in a joint venture or an investment in a joint venture becomes an investment in an associate. There is no remeasurement to fair value upon such changes in ownership interests.

 

When the Group engages in transactions with its associates or joint ventures, the profits and losses resulting from the transactions with the associates and joint ventures are recognized in the consolidated financial statements of the Group only to the extent of the interests in the associates and joint ventures that are unrelated to the Group.

 

(6) Cash and cash equivalents

 

Cash and cash equivalents includes cash on hand, checks issued by others, and trading securities, deposits held at call with financial institutions, other short-term and highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash without significant transaction costs which are subject to an insignificant risk of changes in value.

 

(7) Financial Assets

 

All regular way purchases or sales of financial assets are recognized and derecognized on a trade-date basis.

Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace.

 

All recognized financial assets are measured subsequently in their entirety at either amortized cost or fair value, depending on the classification of the financial assets.

 

1) Classification of financial assets

 

Debt instruments that meet the following conditions are measured subsequently at amortized cost:

 

  - The financial asset is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows; and

  - The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

Debt instruments that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVOCI):

 

- The financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and

- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

 

By default, all other financial assets are measured subsequently at fair value through profit or loss (FVPL). Despite the foregoing, the Group may make the following irrevocable election / designation at initial recognition of a financial asset:

 

  - The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met; and

  - The Group may irrevocably designate a debt investment that meets the amortized cost or FVOCI criteria as measured at FVPL if doing so eliminates or significantly reduces an accounting mismatch.

A.  Amortized cost and effective interest rate method

 

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate, excluding financial assets that are credit-impaired at acquisition, is the rate that exactly discounts expected future cash receipts (including fees and points that are an integral part of the effective interest rate, transaction costs, and other premiums or discounts) over the expected life of the financial asset or, when appropriate, a shorter period to the gross carrying amount on initial recognition. For financial assets that are credit-impaired at acquisition, the credit-adjusted effective interest rate is calculated by discounting the expected cash flows, including expected credit losses, to the amortized cost on initial recognition.

 

The amortized cost of a financial asset is the amount at which the financial asset is measured at initial recognition minus the principal repayments, plus the cumulative amortization using the effective interest method of any difference between that initial amount and the maturity amount, adjusted for any loss allowance. The gross carrying amount of a financial asset is the amortized cost of a financial asset before adjusting for any loss allowance. Interest income is recognized using the effective interest method for debt instruments measured subsequently at amortized cost and at FVOCI.

 

For financial assets not credit-impaired at acquisition, interest income is calculated by applying the effective interest rate to the gross carrying amount of the financial asset (excluding financial assets that become credit-impaired subsequently). For financial assets that become credit-impaired subsequent to initial recognition, interest income is recognized by applying the effective interest rate to the amortized cost of the financial asset. If, in a subsequent reporting period, the credit risk on a credit-impaired financial instrument improves such that the financial asset is no longer considered impaired, interest income is recognized by applying the effective interest rate to the gross carrying amount of the financial asset.

 

For financial assets that are credit-impaired at acquisition, interest income is recognized by applying the credit-adjusted effective interest rate to the amortized cost of the financial asset from the point of initial recognition. Even if the credit risk on the financial asset improves subsequently and the asset is no longer considered impaired, the calculation of interest income is not changed to be based on the gross carrying amount.

Interest income is recognized in profit or loss and is presented under the line item 'Interest Income'.

 

B.   Debt instruments classified as at FVOCI

 

Debt instruments are initially measured at fair value plus transaction costs. Subsequently, changes in the carrying amount of these debt instruments as a result of foreign exchange gains and losses, impairment gains or losses, and interest income calculated using the effective interest method are recognized in profit or loss. The amounts that are recognized in profit or loss are the same as the amounts that would have been recognized in profit or loss if these debt instruments had been measured at amortized cost. All other changes in the carrying amount of these debt instruments are recognized in other comprehensive income and accumulated in gain or loss on valuation.  When these debt instruments are derecognized, the cumulative gains or losses previously recognized in other comprehensive income are reclassified to profit or loss.

 

C.   Equity instruments designated as at FVOCI

 

On initial recognition, the Group may make an irrevocable election (on an instrument-by-instrument basis) to designate investments in equity instruments as at FVOCI. Designation at FVOCI is not permitted if the equity investment is held for trading or if it is contingent consideration recognized by an acquirer in a business combination.

 

A financial asset is classified as held for trading if:

-it has been acquired principally for the purpose of selling it in the near term;

-on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or

-it is a derivative that is not designated and effective as a hedging instrument.

Investments in equity instruments at FVOCI are initially measured at fair value plus transaction costs. Subsequently, they are measured at fair value with gains and losses arising from changes in fair value recognized in other comprehensive income and accumulated in gain or loss on valuation. The cumulative gain or loss will not be reclassified to profit or loss on disposal of the equity investments, instead, it is transferred to retained earnings.

 

If a dividend on an investment in an equity instrument does not clearly represent a recovery of the investment cost, that dividend is recognized in profit or loss in accordance with KIFRS 1109. Dividends are recognized in 'other financial income.'

 

D.  Financial assets measured at FVPL

 

Financial assets that do not meet the criteria for being measured at amortized cost or FVOCI are measured at FVPL. Gains or losses arising from changes in the fair value of FVPL, dividends and interest income from the financial assets are recognized in profit or loss

 

- If equity instruments that are not held for trading and are not contingent consideration in a business combination are not designated at FVOCI at initial recognition, those equity instruments are classified as at FVPL (see C above))

- Debt instruments that do not meet the requirements of amortized cost measurement items or FVOCI measurement items (see above a and c) are classified as FVPL. In addition, if the designation as at FVPL results in the removal or significant reduction of measurement or recognition inconsistencies ('account mismatches'), an entity may designate at FVPL on initial recognition a liability item that meets the requirements of amortized cost measurement items or FVOCI measurement items.

Financial assets measured at FVPL are measured at fair value at the end of each reporting period and gains or losses on changes in fair value less costs to sell are recognized in profit or loss, excluding those designated as hedging relationships. Net profit or loss recognized in profit or loss includes dividends obtained from financial assets and is accounted as 'finance income'. On the other hand, interest income from financial assets measured at FVPL is accounted for as 'other finance income'.

 

 

2) Impairment of financial assets

 

The Group recognizes a loss allowance for expected credit losses on investments in debt instruments that are measured at amortized cost or at FVOCI, lease receivables, trade receivables and contract assets, as well as on financial guarantee contracts. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

 

The Group always recognizes lifetime expected credit losses (ECL) for trade receivables, contract assets and lease receivables. The ECLs on these financial assets are estimated using a provision matrix based on the Group's historical credit loss experience and valuation of individual assets, adjusted for factors that are specific to the debtors, general economic conditions and an assessment of forecast on present and future conditions reflecting time value of money where appropriate.

 

For all other financial instruments, the Group recognizes lifetime ECLs when there has been a significant increase in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an amount equal to 12-month ECLs.

 

Lifetime ECL represents the expected credit losses that will result from all possible default events over the expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is expected to result from default events on a financial instrument that are possible within 12 months after the reporting date.

 

 

A.  A significant increase in credit risk

 

In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition, the Group compares the risk of a default occurring on the financial instrument at the reporting date with the risk of a default occurring on the financial instrument at the date of initial recognition. In making this assessment, the Group considers both appropriate and corroborating quantitative and qualitative information, including past experience and future outlook information that is readily available without undue cost or effort. The Group's future outlook information includes consideration of various external data on current and future economic information relating to the Group's core business and the future prospects of the industry in which the Group's borrower operates from the Group's financial analysts, government agencies, related think tanks and similar institutions.

 

In particular, the following information is taken into account when assessing whether credit risk has increased significantly since initial recognition:

 

- an actual or expected significant deterioration in the financial instrument's external (if available) or internal credit rating;

- significant deterioration in external market indicators of credit risk for a particular financial instrument. For example, credit spreads, significant increases in the price of credit default swaps for borrowers, or the length or extent to which the fair value of a financial asset falls below its amortised cost;

- actual or expected significant deterioration in the business performance of the borrower;

- significant increase in credit risk for other financial instruments of the same borrower; or

- changes that result in a significant deterioration in the borrower's ability to pay, such as actual or expected significant adverse changes in the borrower's regulatory, economic and technical environment.

 

Regardless of the outcome of such assessments, if there is a delinquency exceeding the contractual payment date and there is no reasonable and supportable information to the contrary, it is considered that the credit risk of the financial instrument has increased significantly since initial recognition.

 

Notwithstanding the above, if the Group determines that a financial instrument has a low credit risk at the end of the reporting period, it believes that the credit risk of that instrument has not increased significantly. If (1) the risk of default of a financial instrument is low, (2) the borrower has a strong ability to meet its contractual cash flow payment obligations in the short term, and (3) the borrower's ability to meet its contractual cash flow payment obligations may be weakened due to unfavorable changes in the economic and business environment but such possibility of ability weakening is not certain, the Group determines that the financial instrument has low credit risk.

 

In line with international practice, the Group considers financial assets with an internal credit rating of "normal" to have a low credit risk when no external credit rating is available. "Normal" means that the counterparty has a sound financial position and is not in arrears.

 

In the case of financial guarantees, the date on which the Group becomes a party to the irrevocable agreement is the initial recognition date for the purpose of assessing a financial instrument for impairment. In assessing whether there has been a significant increase in credit risk since the initial recognition of a financial guarantee contract, consideration is given to changes in the risk that a particular debtor will default.

 

The Group periodically reviews the effectiveness of the requirements used to determine whether credit risk has increased significantly and adapts those requirements to ensure that they are capable of determining whether credit risk has increased significantly before they are overdue.

 

B. Definitions of default

 

The Group believes that, based on past experience,  a financial asset that meets one of the following conditions is not recoverable. The following conditions are considered to constitute a default event for internal credit risk management purposes.

 

- if the debtor violates the terms of the performance obligation; or

- if the overdue days of financial assets are significantly exceeded

 

C. Credit-impaired financial assts

 

A financial asset is credit-impaired when one or more events that have a detrimental impact on the estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following observable data:

 

- significant financial difficulty of the issuer or the borrower;

- a breach of contract, such as a default or past due event as defined by the Group's internal policy (refer to B above);

- inevitable relaxation of borrowing conditions due to economic or contractual reasons related to the borrower's financial difficulties;

- increased likelihood of the borrower's bankruptcy or other financial restructuring; or

- disappearance of an active market for the financial asset due to financial difficulties.

 

D. Measurement and recognition of the expected credit losses

 

The measurement of ECLs is a function of the probability of default, loss given default (i.e. the magnitude of the loss if there is a default) and the exposure at default. The assessment of the probability of default and loss given default is based on historical data adjusted by forward-looking information as described above. The exposure to default on a financial asset represents the total carrying amount of the asset at the end of the reporting period, and the exposure to default on a financial guarantee contract includes the amount used until the end of the reporting period plus the amount expected to be used in the future until the date of default based on the Group's understanding of the debtor's specific future financial needs, other relevant forward-looking information, and past trends.

 

For financial assets, the ECLs are estimated as the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive, discounted at the original effective interest rate. For lease receivables, the cash flow for calculating expected credit losses is consistent with the cash flow used to measure the lease receivables in accordance with KIFRS 1116.

 

In the case of financial guarantee contracts, the Group is required to pay only for the default event of the debtor in accordance with the terms of the financial instrument to be guaranteed and the expected credit losses are determined by deducting the amount expected to be received from the guarantor, debtor, or other third parties.

 

If a loss allowance was measured for a financial instrument at an amount equal to lifetime expected credit losses in the previous period

but is no longer a requirement for lifetime expected credit losses, the loss allowance is measured at an amount equal to 12-month expected credit losses at the end of the current term (other than financial assets subject to the simplified method).

 

The Group recognizes an impairment gain or loss in profit or loss for all financial instruments with a corresponding adjustment to their carrying amount through a loss allowance account, except for investments in debt instruments that are measured at FVOCI, for which the loss allowance is recognized in other comprehensive income and accumulated in gains or losses, and does not reduce the carrying amount of the financial asset in the statement of financial position.

 

3) Derecognition of financial assets

 

The Group derecognizes a financial asset only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

 

4) Offset of financial instruments

 

Financial assets and liabilities are offset and the net amount reported in the statement of financial position where there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the assets and settle the liability simultaneously.

The legally enforceable right must not be contingent on future events and must be enforceable in the normal course of business and in the event of default, insolvency or bankruptcy of the Group or the counterparty.

 

(8) Inventories

 

The acquisition cost calculated by the first-in-first-out method and the individual method is the amount reported on the statement of financial position. The quantity and value are determined using the perpetual inventory system throughout the year, with physical inventory counts conducted at year-end to reconcile records. If the net realizable value of inventory at the end of the reporting period falls below the acquisition cost, the net realizable value is reported on the statement of financial position. The lower of cost or market method is applied on an item-by-item basis, with any inventory valuation losses recognized by reducing the inventory value and increasing the cost of goods sold.

 

(9) Investment Property

 

Investment properties are property held to earn rentals or for capital appreciation or both. Investment properties are measured initially at its cost and transaction costs are included in the initial measurement. After initial recognition, the book value of investment properties is presented at the cost less accumulated depreciation and accumulated impairment losses.

 

Subsequent costs are recognized as the carrying amount of the asset when, and only when it is probable that future economic benefits associated with the asset will flow to the Group, and the cost of the asset can be measured reliably, or recognized as a separate asset if appropriate. The carrying amount of what was replaced is derecognized. Routine maintenance and repairs are expensed as incurred.

 

Land is not depreciated, and other investment properties are depreciated using the straight-line method over the period from 8 to 10 years. The Group reviews the depreciation method, the estimated useful lives and residual values at the end of each annual reporting period. If expectations differ from previous estimates, the changes are accounted for as a change in accounting estimate.

 

 

Investment property is derecognized from the statement of financial position when it is disposed of, or when it is permanently withdrawn from use and no future economic benefits are expected from disposal. The gain or loss arising from the derecognition of investment property is determined by the difference between the net disposal proceeds and the carrying amount and is recognized in the profit or loss of the period in which the investment property is derecognized.

 

(10) Property, Plant and Equipment

 

Property, plant and equipment are valued at cost less accumulated depreciation and accumulated impairment losses. Property, plant and equipment is recognized if, and only if it is probable that future economic benefits associated with the asset will flow to the Group, and the cost of the asset can be measured reliably. After the initial recognition, property, plant and equipment is stated at cost less accumulated depreciation and accumulated impairment losses. The cost includes any cost directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management and the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. In addition, in case the recognition criteria are met, the subsequent costs will be added to the carrying amount of the asset or recognized as a separate asset, and the carrying amount of what was replaced is derecognized. For investment in kind, donation or other free-of-charge assets, fair value shall be their acquisition cost.

 

Subsequent costs are added to the asset's carrying amount or recognized as a separate asset only if it is likely that future economic benefits associated with the item will flow to the Group and the cost of the item can be reliably measured. The carrying amount of replaced part is removed, while all other repairs and maintenance expenses are recognized as profit or loss for the financial period incurred.

 

Land is not depreciated. Depreciation is computed using the straight-line method based on the estimated useful lives of the assets. The representative useful lives are as follows.

 

	Estimated useful lives (years)
Buildings	7-24
Equipment	3-10
Facilities	2-45
Vehicles	2-5

 

The Group reviews the depreciation method, the estimated useful lives and residual values of property, plant and equipment at the end of each annual reporting period. If expectations differ from previous estimates, the changes are accounted for as a change in accounting estimate.

 

(11) Intangible Assets

 

Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortization and accumulated impairment losses. Amortization is computed using the straight-line method based on the estimated useful lives of the assets.

 

A summary of the policies applied to the Group's intangible assets is as follows:

 

	Estimated useful lives (years)
Trademarks	5-10
Patents	5
Software	1-6
Membership	Contract period or Indefinite
Other intangible assets	Indefinite

 

The useful lives of intangible assets are assessed as either finite or indefinite.

 

Intangible assets with finite lives are amortized over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortization period and the amortization method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortization period or method, as appropriate, and are treated as changes in accounting estimates.

 

Intangible assets that are acquired in a business combination are recognized separately from goodwill are initially recognized at their fair value at the acquisition date. Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortization and accumulated impairment losses. Intangible assets with indefinite useful lives are not amortized, but are tested for impairment annually, either individually or at the CGU level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis. An intangible asset is derecognized upon disposal (i.e., at the date the recipient obtains control) or when no future economic benefits are expected from its use or disposal. Any gain or loss arising upon derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss.

 

(12) Impairment of property, plant and equipment, intangible assets and others

 

At the end of each reporting period, the Group reviews the carrying amounts of its property, plant and equipment and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Jointly-held assets are also allocated to individual cash-generating units or otherwise, they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis cannot be identified.

 

Intangible assets with indefinite useful lives or intangible assets not yet available for use are not amortized, but tested for impairment annually. Additionally, impairment tests are conducted whenever there are indications that an asset may be impaired.

 

The recoverable amount is measured as the higher of an individual asset's or cash-generating unit's fair value less costs to sell and its value in use. In measuring value in use, the present value of the estimated future cash flows is determined by discounting them at a pre-tax discount rate that reflects current market assessments of the time value of money and the specific risks of the asset that have not been adjusted for in the future cash flows.

 

If the recoverable amount of an individual asset (or cash-generating unit) is less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to the recoverable amount, and the amount of the reduction is recognized as an impairment loss. The impairment loss is recognized immediately in profit or loss. If an impairment loss is reversed, the carrying amount of the asset (or cash-generating unit) is increased to the recoverable amount. The reversal of an impairment loss is also recognized immediately in profit or loss.

 

 

(13) Financial Liabilities and Equity instruments

 

Debt instruments and equity instruments issued by the Group are recognized as financial liabilities or equity depending on the contract and the definitions of financial liability and equity instrument. When treasury shares are reacquired, such equity instruments are directly deducted from equity. Gains or losses on the purchase, sale, issuance, or cancellation of treasury shares are not recognized in profit or loss.

 

① Equity instruments

An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by the Group are recognized at the proceeds received, net of direct issue costs.

 

② Financial guarantees contracts liabilities 

A financial guarantee contract is a contract that the issuer must pay a certain amount of money to compensate for losses incurred by the holder due to the failure of a specific debtor to pay the due date on the original contract or modified terms of the debt instrument. Financial guarantee liabilities are measured initially at fair value and subsequently measured at the greater of the following, unless they are designated as at fair value through profit or loss or arising from the transfer of assets.

 

③ Financial liabilities measured at Amortized cost

Financial liabilities that are not (i) contingent consideration of an acquirer in a business combination, (ii) held for trading, or (iii) designated as at FVPL as of the date of initial recognition, are measured subsequently at amortized cost using the effective interest method.

 

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts the expected future cash payments or receipts (including fees and points that are an integral part of the effective interest rate, transaction costs, and other premiums or discounts) over the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount of the financial liability.

 

④  Derecognition of financial liabilities

The Group derecognizes financial liabilities when, and only when, the Group's obligations are discharged, cancelled or have expired. The difference between the carrying amount of the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

 

(14) Post-employment Benefit Plans

 

The Group operates a defined contribution pension plan. The retirement benefit obligation recognized in the consolidated statements of financial position represents the present value of the defined benefit obligation, less the fair value of plan assets. Defined benefit obligations are calculated annually by an actuary using the Projected Unit Credit Method.

 

Contributions to defined contribution retirement benefit plans are recognized as expenses when employees provide services eligible for payment but the contributions are not included in provisions for retirement benefit.

 

 

(15) Long-term Employee Benefits Liabilities

 

Other long-term employee benefits, which are not paid within 12 months from the end of the reporting period in which the employee provided the relevant service, discount future benefits earned in return for service provided in the current and past periods to present values. Liabilities are determined after discounting estimated future cash outflows by the interest rate of high-quality corporate bonds, with similar maturity as the expected other long-term employee benefits date. And service cost, net interest and remeasurement component are recognized as profit or loss. Also, these liabilities are evaluated annually by independent, qualified actuaries.

 

(16) Deposits Received for Travel and Advances Received

 

The Group records the full sum received from customers for travel products as deposits received until the Group fulfills its obligation to provide the corresponding services. Furthermore, the Group accounts for the funds received from customers for the provision of travel vouchers and the consideration received from affiliates in return for the points granted to the customer engaged in customer loyalty programs as advances received.

 

(17) Provisions and Contingent Liabilities

 

A provision is recognized when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The amount recognized as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. A provision is measured using the present value of the cash flows estimated to settle the present obligation.

 

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably.

 

Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the provisions are reversed.

 

(18) Revenue from Contracts with Customers

 

Revenue is recognized based on the consideration agreed upon in the customer contract. The Group records revenue when control over goods or services is transferred to the customer.

 

① Revenue from service provision

The Group is primarily engaged in the operations of travel arrangements and hotel services, providing services related to the sale of travel packages, airline tickets, and hotel rooms.

 

The Group is the principal and agent in customer relationships and recognizes net revenue for services when the Group acts as an agent.

 

In the case of revenue from hotel service provision, revenue is recognized when the customer checks in and stays. On the other hand, when providing food and beverages, etc., revenue is recognized when providing the service.

 

The Group operates customer loyalty program by providing customers with award credits as part of their sales transactions, and customers can use the award credits to obtain free or discounted travel products. The fair value of the award credits is estimated by taking into account the fair value of the consideration provided for the recovered award credits, the expected recovery rate, and the expected recovery time.

 

In sales transactions that grant award credits, the fair value of consideration that is received or will be received from customers is distributed by award credits and sales. The consideration allocated to the award credits is recognized as revenue when the award credits are recovered and the obligation to provide compensation is fulfilled.

 

② Revenue from sale of product

The Group recognizes revenue as a total amount only when it comes to proactive control of some airline tickets, hotels, tickets, etc.

 

The Group's bonded sales division provides goods through contracts with customers and recognizes them as revenue. The Group recognizes revenues when customers purchase goods and the control is transferred to customers.

 

 

(19) Financial Income

 

① Interest income

Interest income is recognized if it is probable that future economic benefits associated will flow in, and the amount can be measured reliably. Recognition of interest income is based on the principal amount and the effective interest rates over the period. The effective interest rate refers to the rate that aligns the present value of the anticipated future cash flows to be received over the expected maturity of the financial asset with the net book value.

 

② Dividend income

Dividend income is recognized upon establishment of the right to receive dividends.

 

(20) Borrowing Costs

 

Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets are capitalized to the cost of those assets, until they are ready for their intended use or sale. A qualifying asset is an asset that necessarily takes a substantial period of time to get ready for its intended use or sale. Investment income earned on the temporary investment of specific borrowings made for the acquisition of qualifying assets is deducted from the borrowing costs eligible for capitalization. All other borrowing costs are recognized in profit or loss in the period in which they are incurred.

 

(21) Share-based Payment Arrangement

 

The equity-settled share-based payment transaction given to employees and others provisioning similar services is measured by the fair value of the equity instrument on the date of grant.

 

The fair value of the equity-settled share-based payment transaction determined on the grant date is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the equity instrument to be vested. For each end of the reporting period, the Group adjusts the estimate of the number of equity instruments expected to be vested. The impact of the revision of the original estimates, if any, is recognized in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment in other component of equity.

 

Equity-settled, share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received except where that fair value cannot be estimated reliably; in which case, they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

 

For cash-settled, share-based payments, a liability is recognized for the goods or services acquired, measured initially at the fair value of the liability. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognized in profit or loss for the year.

 

(22) Foreign Currency Translation

 

1)    Functional and presentation currency

 

Items included in the financial statements of each of the Group's entities are measured using the currency of the primary economic environment in which each entity operates (the "functional currency"). The consolidated financial statements are presented in Korean won, which is the Parent Company's functional and presentation currency.

 

2)    Foreign currency transactions and translation at the end of the reporting period

 

Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.

Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss.

They are deferred in other comprehensive income if they relate to qualifying cash flow hedges and qualifying effective portion of net investment hedges, or are attributable to monetary part of the net investment in a foreign operation.

 

Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within finance costs. All other foreign exchange gains and losses are presented in the statement of profit or loss within 'other income or other expenses'.

 

Exchange differences arising on non-monetary financial assets and liabilities such as financial assets measured at fair value through other profit or loss and financial assets measured at fair value through other comprehensive income are recognized in profit or loss and included in OCI, respectively, as part of the fair value gain or loss.

 

(23) Income Tax Expense and Deferred Income Tax

 

Income tax expense is composed of current and deferred tax.

 

① Current income tax

The current tax is computed based on the taxable profit for the current year. The taxable profit differs from the profit before income tax as reported in the consolidated statements of income because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Group's current tax liability is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting period. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncertainty related to income taxes, if any.

 

② Deferred income tax

Deferred tax is recognized on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognized for all taxable temporary differences. Deferred tax assets shall be generally recognized for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilized. Such deferred tax assets and liabilities shall not be recognized if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

 

Deferred tax liabilities are recognized for taxable temporary differences associated with investments in subsidiaries and associates and interests in joint ventures, except when the Group is able to control the timing of the reversal of the temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognized to the extent that taxable profit will be available against which the temporary difference can be utilized and they are expected to be reversed in the foreseeable future.

 

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.

 

Deferred tax assets and liabilities are measured at the tax rates that are expected to be applied in the period in which the liability is settled or the asset is realized, based on tax rates and tax laws that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax assets and liabilities reflects the tax consequences that would follow from the manner in which the Group expects to recover or settle the carrying amount of its assets and liabilities at the end of the reporting period.

 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income tax levied by the same taxation authority. Also, they are offset when different taxable entities that intend either to settle current tax liabilities and assets on a net basis, or to realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

 

③ Recognition of current and deferred income tax

Current and deferred taxes are recognized in profit or loss, except when they relate to items that are recognized in other comprehensive income or directly in equity, or items arising from initial accounting treatments of a business combination.

 

(24) Fair Value

 

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these consolidated financial statements is determined on such a basis, except for leasing transactions that are within the scope of IFRS 16 Leases, and measurements that have some similarities to fair value, but are not fair value, such as net realisable value in KIFRS 1002 Inventories or value in use in KIFRS 1036 Impairment of Assets.

 

In addition, for financial reporting purposes, fair value measures are classified as Level 1, 2, or 3, based on the observable degree of the input used for fair value measurement and the significance of the input variables for the entire fair value measurement.

 

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date;

Level 2: inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and

Level 3: unobservable inputs for the asset or liability.

 

(25) Government grants

 

Government grants are recognized where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognized as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. When the grant relates to an asset, it is recognized as income in equal amounts over the expected useful life of the related asset.

 

 

 

3. Material judgments and Estimation:

1) Uncertainty in management's judgment assumptions and estimates

 

In the application of the Group's accounting policies, management is required to make judgments, estimates, and assumptions about the carrying amounts of assets and liabilities that cannot be identified from other sources. Actual results may be different from those estimations. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or both in the period of the revision and future periods if the revision affects both current and future periods. The main items in the consolidated financial statements on which the estimates and judgment have material impact are the investments in associates and joint ventures; financial instrument valuation and impairment; investment property; property, plant and equipment; intangible assets; right-of-use assets; deferred income; provisions; and deferred income tax.

 

2) Impairment assessment of cash-generating units including goodwill

 

The Group performs an impairment assessment by comparing the carrying amount of cash-generating units, including goodwill, and the recoverable amount at the end of each reporting period. As a result, the Group recognized an impairment loss reversal of KRW 8,152 million in the cash-generating unit during the current period.

 

 

4. Cash and Cash Equivalents :

Details of cash and cash equivalents as of December 31, 2023 and 2022 are as follows:

(in thousands of Korean won)	December 31, 2023	December 31, 2022
Cash on hand	224,294	162,777
Bank Deposits	118,440,434	92,334,441
Total	118,664,728	92,497,218

 

 

5. Trade and Other Receivables :

(1) Details of trade receivables and other receivables as of December 31, 2023 and 2022 are as follows.

		December 31, 2023		December 31, 2022
Description	Accounts	Current	Non-current	Current	Non-current
Trade receivable (in thousands of Korean won)	Trade receivables	71,587,727	-	51,710,872	-
	Allowance for bad debts	(9,818,402)	-	(12,347,897)	-
	Total	61,769,325	-	39,362,975	-
Other receivables (in thousands of Korean won)	Non-trade receivables (*)	8,248,058	-	7,618,027	-
	Allowance for bad debts	(6,257,049)	-	(5,900,596)	-
	Subtotal	1,991,009	-	1,717,431	-
	Short-term Loan	944,512	-	1,605,853	-
	Allowance for bad debts	(944,512)	-	(1,533,168)	-
	Subtotal	-	-	72,685	-
	Long-term Loan	-	3,531,138	1,451,520	2,076,976
	Allowance for bad debts	-	(1,455,400)	(1,451,520)	-
	Subtotal	-	2,075,738	-	2,076,976
	Accrued Revenue	2,803,740	-	1,621,877	-
	Allowance for bad debts	-	-	(122,665)	-
	Subtotal	2,803,740	-	1,499,212	-
	Guaranteed Deposits	9,412,386	1,793,782	6,762,416	2,048,848
	Allowance for bad debts	(3,197,338)	-	(4,195,105)	-
	Subtotal	6,215,048	1,793,782	2,567,311	2,048,848
	Total	11,009,797	3,869,520	5,856,639	4,125,824

 

(*) The Group reclassifies the finance lease receivables that have reached the expiry date to non-trade receivables. The amount of reclassified finance lease receivables for each of the two years in the period ended December 31, 2023 are KRW 727,683 thousand and KRW 242,917 thousand, respectively, and the amount of reclassified allowance for bad debts are KRW 583,000 thousand and KRW 242,917 thousand, respectively.

 

 

(2) Changes in the allowance for bad debts for each of the two years in the period ended December 31, 2023 are as follows:

	December 31, 2023
(In thousands of Korean won)	Beginning Balance	Reversal (Amortisation)	Write-off	Transference	Foreign Exchange Difference	Ending Balance
Trade receivables	(12,347,897)	2,110,091	427,242	-	(7,838)	(9,818,402)
Short-term Loans	(1,533,168)	594,493	-	-	(5,837)	(944,512)
Current Portion of Long-term Loans	(1,451,520)	(8,843)	-	1,482,603	(22,240)	-
Long-term Loans	-	-	-	(1,482,603)	27,203	(1,455,400)
Non-trade Receivables (*1)	(5,900,596)	214,221	10,919	(583,000)	1,407	(6,257,049)
Accrued Revenue	(122,665)	44,836	79,708	-	(1,879)	-
Guaranteed Deposits	(4,195,105)	(2,233)	1,000,000	-	-	(3,197,338)
Total (*2)	(25,550,951)	2,952,565	1,517,869	(583,000)	(9,184)	(21,672,701)

(*1) Reclassified to allowance for non-trade receivables from allowance for finance lease receivables during the current year.

(*2) Includes the amount classified as profit and loss from discontinued operation.

 

	December 31, 2022
(In thousands of Korean won)	Beginning Balance	Reversal (Amortisation)	Write-off	Transference	Foreign Exchange Difference	Ending Balance
Trade receivables	(11,465,159)	(957,935)	109,765	-	(34,568)	(12,347,897)
Short-term Loans	(2,759,464)	(504,361)	1,325,852	-	404,805	(1,533,168)
Current Portion of Long-term Loans	-	103,030	-	(1,640,738)	86,188	(1,451,520)
Long-term Loans	(1,490,080)	(189,688)	-	1,640,738	39,030	-
Non-trade Receivables (*1)	(5,886,418)	204,325	25,821	(242,917)	(1,407)	(5,900,596)
Accrued Revenue	(211,208)	(38,173)	125,176	-	1,540	(122,665)
Guaranteed Deposits	(5,411,014)	856,296	359,613	-	-	(4,195,105)
Total (*2)	(27,223,343)	(526,506)	1,946,227	(242,917)	495,588	(25,550,951)

(*1) Reclassified to allowance for non-trade receivables from allowance for finance lease receivables during the current year.

(*2) Includes the amount classified as profit and loss from discontinued operation.

 

(3) The aging analysis details (based on the date of occurrence) of trade receivables subject to allowance for bad debts among trade receivables as of December 31, 2023 and 2022 are as follows.

Trade receivables (In thousands of Korean won)	December 31, 2023		December 31, 2022
	Book Value	Loss allowance	Book Value	Loss allowance
Up to 90 days	60,006,869	(289,736)	39,555,903	(906,894)
90 to 180 days	2,262,833	(348,925)	664,019	(174,444)
180 to 270 days	206,706	(102,202)	158,424	(117,278)
270 to 365 days	106,036	(76,628)	349,477	(177,975)
Over 365 days	9,005,283	(9,000,911)	10,983,049	(10,971,306)
Total	71,587,727	(9,818,402)	51,710,872	(12,347,897)

 

(4) The aging analysis details (based on the date of occurrence) of other receivables subject to allowance for bad debts as of December 31, 2023 and 2022 are as follows.

Other receivables (In thousands of Korean won)	December 31, 2023		December 31, 2022
	Book Value	Loss allowance	Book Value	Loss allowance
Up to 90 days	12,661,192	(229,888)	7,805,071	(187,655)
90 to 180 days	225,977	(133,954)	190,072	(130,917)
180 to 270 days	287,426	(170,453)	42,766	(29,028)
270 to 365 days	608,452	(462,772)	1,068,777	(1,047,492)
Over 365 days	12,950,569	(10,857,232)	12,001,855	(11,807,962)
Total	26,733,616	(11,854,299)	21,108,541	(13,203,054)

 

(5) Information on expected credit losses and credit risk exposure for trade receivables and other receivables and details of individual analysis receivables are as follows:

Category (In thousands of Korean won)	Weighted Average Default Rate (%)	Total Book Value	Loss Allowance
Up to 90 days	1.10	38,863,542	(428,673)
90 to 180 days	16.50	2,138,198	(352,711)
180 to 270 days	51.54	233,356	(120,278)
270 to 365 days	69.06	319,605	(220,728)
Over 365 days	100.00	9,199,947	(9,199,798)
Subtotal	-	50,754,648	(10,322,188)
Individual Analysis Receivables	-	47,566,695	(11,350,513)
Total	-	98,321,343	(21,672,701)

 

6. Finance Lease Receivables :

(1) Financial Lease Contracts

As of December 31, 2023, the Group provides offices on lease.

 

(2) Details of financial lease receivables as of December 31, 2023 and 2022 are as follows:

(In thousands of Korean won)	December 31, 2023	December 31, 2022
Up to 1 year	1,219,653	1,168,300
1 to 2 years	594,580	340,083
2 to 3 years	435,164	-
Total Lease Expense	2,249,397	1,508,383
Deduction: Unrealized Interest Income	(7,600)	(14,946)
Present Value of Minimum Lease Expense	2,241,797	1,493,437
Total of Net Lease Investment	2,241,797	1,493,437

 

(3) The classification of current portion details of financial lease receivables as of December 31, 2023 and 2022 are as follows:

(In thousands of Korean won)	December 31, 2023		December 31, 2022
	Current	Non-current		Current	Non-current
Finance lease receivables (*)	1,213,757	1,028,040		1,153,354	340,083
Allowance for bad debts	(340,083)	-		(583,000)	(340,083)
Total	873,674	1,028,040		570,354	-

(*) The Group reclassifies the finance lease receivables that have reached the expiry date to non-trade receivables. The amount of reclassified finance lease receivables during the current and previous years are KRW 727,683 thousand and KRW 242,917 thousand, respectively, and the amount of reclassified allowance for bad debts are KRW 583,000 thousand and KRW 242,917 thousand, respectively.

 

(4) The lease income recognized by the Group in relation to the lease contracts for each of the two years in the period ended December 31, 2023 is KRW 175,800 thousand and KRW 199,861 thousand, respectively.

 

 

7. Inventories :

(1) Details of inventories for each of the two years in the period ended December 31, 2023 are as follows.

(In thousands of Korean won)		December 31, 2023	December 31, 2022
Airline tickets and others		59,732,261	8,271,694
Valuation allowance for airline tickets and others		(785,525)	(81,687)
Storage goods		117,972	84,553
Total	59,064,708		8,274,560

 

(2) Changes in valuation allowance of inventories for each of the two years in the period ended December 31, 2023 and 2022 are as follows:

(In thousands of Korean won)                                                                                      December 31, 2023

Category	Beginning Balance	Valuation Loss	Ending Balance
Airline Tickets and Others	(81,687)	(703,838)	(785,525)

 

(In thousands of Korean won)                                                                                      December 31, 2022

Category	Beginning Balance	Valuation Loss	Write-off	Exchange Difference	Ending Balance
Airline Tickets and Others	(110,015)	(47,818)	78,324	(2,178)	(81,687)

 

 

8. Advanced Payments and Other Assets :

(1) Details of advanced payments as of December 31, 2023 and 2022 are as follows.

(In thousands of Korean won)	December 31, 2023	December 31, 2022
Advance Payments	37,504,922	27,777,503
Allowance for bad debts	(697,511)	(2,565,046)
Total	36,807,411	25,212,457

 

(2) Details of change in the allowance for loss of advanced payments are as follows:

(In thousands of Korean won)	December 31, 2023	December 31, 2022
Beginning Balance	(2,565,046)	(3,973,733)
Reversal of Bad Debt Expense	1,827,115	1,383,396
Write-off	41,281	40,666
Exchange Difference	(861)	(15,375)
Ending Balance	(697,511)	(2,565,046)

 

(3) Details of other current assets and other non-current assets as of December 31, 2023 and 2022 are as follows:

(In thousands of Korean won)	December 31, 2023		December 31, 2022
	Current	Non-current	Current	Non-current
Prepaid Expenses	3,002,896	31,879	2,697,663	23,838
Prepaid Value Added Tax	162,397	-	299,256	-
Total	3,165,293	31,879	2,996,919	23,838

 

 

9. Financial Assets Measured at Fair Value Through Profit or Loss :

Details of financial assets measured at FVPL as of December 31, 2023 and 2022 are as follows:

(In thousands of Korean won)	December 31, 2023	December 31, 2022
KBSJ Tourism Venture Union (*1)	2,836,006	2,195,185
P&I Cultural Innovation Investment Union (*2)	770,333	817,075
Silla Animal Inc. (*3)	-	-
Total	3,606,339	3,012,260

(*1)          Recognized valuation gain of KRW 640,821 thousand during the current year.

(*2)          Recognized valuation loss of KRW 46,742 thousand during the current year.

(*3)          According to Silla Animal Inc's rehabilitation application, loss was recognized for the total amount of investments in associates (amount after the conversion of investment proceeded before the previous year).

 

 

10. Financial Assets Measured at Fair Value Through Other Comprehensive Income :

 

Details of Financial assets at fair value through other comprehensive income(non-current) as of December 31, 2023 and 2022 are as follows.

(In thousands of Korean won)	Percentage of shareholding (%)	December 31, 2023	December 31, 2022
<Marketable Equity Securities>
Woongjin Co.,Ltd.	0.01	8,725	8,180
< Non-marketable Equity Securities >
EDUTOUR Inc.	19.90	27,980	27,980
Hani Tour Inc.	9.54	2,368	2,368
Jeju Channel Inc.	8.06	132,750	129,500
Interpark Corp. (*)	0.50	116,616	116,616
SAM Consulting So., Ltd.	7.41	100,020	100,020
KC HOSPITALITY CO., LTD	10.00	804,240	804,240
Others	-	284	296
Subtotal		1,184,258	1,181,020
Total		1,192,983	1,189,200

(*) During the previous year, Triple Corp., merged with Interpark Corp., and has been extinguished, and new shares from the merger were issued by Interpark Corp. Interpark Corp., changed its name of the company to InterparkTriple Corp., during the current year.

 

 

11. Investments In Associates :

(1) Details of investments in associates as of the current and previous years are as follows:

(In thousands of Korean won)	Nature of business	Location	End date of reporting period	December 31, 2023		December 31, 2022
				Ownership (%)	Book value	Ownership (%)	Book value
HANATOUR EUROPE S.R.L(*1)	Travel Agency	Italy	12.31	50.00	-	50.00	-
OK Tour Service Inc. (*2)	Travel Agency	Korea	12.31	48.92	4,892	48.92	4,892
Dream Co., Ltd (*3)	Theme Park	Korea	12.31	4.16	-	4.16	-
K Culture Industry Co., Ltd. (*4)	Service	Korea	12.31	-	-	40.00	698,040
Total					4,892		702,932

(*1) It is an associate that is closed as of December 31, 2023.
(*2) It is an associate remaining with the purpose of preventing the use of corporate names similar to the name of the corporate that was liquidated.(*3) Although the Group's shareholding is less than 20%, the entity was classified as an associate as it was concluded that the Group has significant influence as it can participate in the board of directors of the entity and exercise voting rights.
(*4) Liquidation was completed during the current year, and KRW 78,536 thousand was recognized as the gain on disposal of investments in associates, as KRW 781,956 thousand was retrieved by the distribution of remaining assets.

 

(2) Changes in investments in associates for each of the two years in the period ended December 31, 2023 are as follows:

	2023
(In thousands of Korean won)	Beginning Balance	Disposal	Equity Method Profit or Loss	Ending Balance
HANATOUR EUROPE S.R.L	-	-	-	-
OK Tour Service Inc.	4,892	-	-	4,892
Dream Co., Ltd	-	-	-	-
K Culture Industry Co., Ltd. (*)	698,040	(703,420)	5,380	-
Total	702,932	(703,420)	5,380	4,892

(*) It was liquidated during the current year, and KRW 78,536 thousand was recognized as the gain on disposal of investments in associates from the distribution of remaining assets.

	2022
(In thousands of Korean won)	Beginning Balance	Disposal	Equity Method Profit or Loss	Ending Balance
HANATOUR EUROPE S.R.L	-	-	-	-
OK Tour Service Inc.	4,892	-	-	4,892
Dream Co., Ltd	-	-	-	-
CELINO Inc. (*1)	239,534	(239,534)	-	-
K Culture Industry Co., Ltd.	626,683	-	71,357	698,040
Hotel & Air Co., Ltd. (*2)	75,764	(1,820)	(73,944)	-
Total	946,873	(241,354)	(2,587)	702,932

(*1) Disposed during the previous year, and KRW 10,466 thousand was recognized as the gain on disposal of due to the distribution of remaining assets.
(*2) Disposed during the previous year, and KRW 719 thousand was recognized as the loss on disposal of due to the distribution of remaining assets.

 

(3) Key financial information on significant associates as of December 31, 2023 and 2022 is as follows:

 

December 31, 2023

(In thousands of Korean won)	Dream Co., Ltd.
Current assets	2,205,020
Non-current assets	49,914,781
Total assets	52,119,801
Current liabilities	7,639,846
Non-current liabilities	31,814,534
Total liabilities	39,454,380
Net sales	9,171,306
Operating income (loss)	(682,086)
Net income (loss)	(2,458,696)
Total comprehensive income (loss)	(2,458,696)

 

 

	December 31, 2022
(In thousands of Korean won)	Dream Co., Ltd.	K Culture Industry Co., Ltd.
Current assets	2,113,756	1,944,027
Non-current assets	49,955,341	4,847
Total assets	52,069,097	1,948,874
Current liabilities	5,846,145	5,530,532
Non-current liabilities	31,097,979	-
Total liabilities	36,944,124	5,530,532
Net sales	9,571,570	-
Operating income (loss)	(1,196,064)	194,377
Net income (loss)	(3,017,439)	196,252
Total comprehensive income (loss)	(3,017,439)	196,252

 

(4) The main components of the abridged financial information of major associates for the current and previous years are as follows.

	December 31, 2023
(In thousands of Korean won)	Cash and cash equivalents	Current financial liabilities		Non-current financial liabilities	Fixed asset depreciation		Interest income		Interest expense
Dream Co., Ltd.	385,548	6,962,427		31,334,553	1,533,568		167		1,811,128
	December 31, 2022
(In thousands of Korean won)	Cash and cash equivalents	Current financial liabilities	Non-current financial liabilities		Fixed asset depreciation	Interest income		Interest expense
Dream Co., Ltd.	313,295	5,247,297	30,700,000		1,029,083	414		1,859,842
K Culture Industry Co., Ltd.	1,920,243	7,432	-		-	1,874		-

 

(5) Details of the adjustment from the net assets of significant associates to the carrying amount of investment assets in associates as of December 31, 2023 are as follows:

 

(In thousands of Korean won)		Dream Co., Ltd.
Net assets at the end of the year		12,665,421
(-) Accounting Policy Differences		(20,033,424)
Adjusted Net Asset		(7,368,003)
Group's Share Ratio		4.16%
Net Assets Share Amount		(306,509)
Discontinuation of Equity Method		306,509
Carrying amount at the end of the year	-

 

(6) Discontinuation of equity method

Unrecognized gains and losses and accumulated unrecognized changes in equity that were not recognized due to the discontinuation of the application of the equity method as of December 31, 2023 are as follows:

 

(In thousands of Korean won)	Unrecognized losses	Accumulated unrecognized losses
Dream Co., Ltd.	(102,317)	(306,509)

 

 

12. Investment Properties :

(1) Details of the book amount of investment properties as of December 31, 2023 and 2022 are as follows:

	December 31, 2023
(In thousands of Korean won)	Land	Buildings	Total
Acquisition cost	738,250	1,745,840	2,484,090
Accumulated depreciation	-	(1,598,001)	(1,598,001)
Net book value	738,250	147,839	886,089

 

	December 31, 2022
(In thousands of Korean won)	Land	Buildings	Total
Acquisition cost	771,027	1,823,351	2,594,378
Accumulated depreciation	-	(1,485,631)	(1,485,631)
Net book value	771,027	337,720	1,108,747

 

 

(2) Changes in investment properties as of December 31, 2023 and 2022 are as follows:

	December 31, 2023
(In thousands of Korean won)	Land	Buildings	Total
Beginning balance	771,027	337,720	1,108,747
Depreciation	-	(179,098)	(179,098)
Other differences	(32,777)	(10,783)	(43,560)
Ending balance	738,250	147,839	886,089

 

	December 31, 2022
(In thousands of Korean won)	Land	Buildings	Total
Beginning balance	833,361	563,160	1,396,521
Depreciation	-	(189,137)	(189,137)
Other differences	(62,334)	(36,303)	(98,637)
Ending balance	771,027	337,720	1,108,747

 

(3) Details recognized as profit or loss in relation to investment properties for each of the two years in the period ended December 31, 2023 are as follows:

(In thousands of Korean won)	December 31, 2023	December 31, 2022
Rental income	-	141,551
Operating expenses	-	(93,552)
Total	-	47,999

 

(4) The fair value of investment properties as of December 31, 2023 are as follows:

(In thousands of Korean won)	Book value	Fair value (*)
Land	738,250	3,239,539
Buildings	147,839	296,014

(*) The fair value of investment properties is classified as Level 3 (unobservable inputs to assets or liabilities) based on the inputs used in the valuation technique.

 

(5) Land and buildings are provided as collateral for the borrowings (refer to Note 35).

 

13. Property, plant and equipment :

(1) Details of property, plant and equipment as of December 31, 2023 and 2022 are as follows:

	December 31, 2023
(In thousands of Korean won)	Land	Buildings	Vehicles	Equipment	Structures	Total
Acquisitions	5,567,101	3,740,343	9,667,574	19,317,744	6,460,931	44,753,693
Depreciation	-	(3,082,520)	(9,299,403)	(15,129,891)	(4,214,626)	(31,726,440)
Accumulated Impairment losses	-	(256,781)	(117,928)	(754,289)	(336,606)	(1,465,604)
Book value	5,567,101	401,042	250,243	3,433,564	1,909,699	11,561,649

 

	December 31, 2022
(In thousands of Korean won)	Land	Buildings	Vehicles	Equipment	Structures	Total
Acquisitions	5,260,456	3,902,983	11,363,109	21,752,142	4,544,401	46,823,091
Accumulated depreciation	-	(2,865,255)	(11,049,374)	(17,169,933)	(4,044,965)	(35,129,527)
Accumulated Impairment losses	-	(268,181)	(118,359)	(810,071)	(320,681)	(1,517,292)
Book value	5,260,456	769,547	195,376	3,772,138	178,755	10,176,272

 

(2) Changes in book value of property, plant and equipment for each of the two years in the period ended December 31, 2023 are as follows:

	December 31, 2023
(In thousands of Korean won)	Land	Buildings	Vehicles	Equipment	Structures	Total
Beginning Balance	5,260,456	769,547	195,376	3,772,138	178,755	10,176,272
Acquisitions	540,514	-	535,840	1,874,355	2,144,715	5,095,424
Transference (*1)	-	-	8,646	-	-	8,646
Disposal	-	-	(290,565)	(26,651)	(1,958)	(319,174)
Depreciation	-	(344,807)	(194,908)	(2,168,054)	(355,860)	(3,063,629)
Impairment losses	-	-	-	(32,406)	(6,210)	(38,616)
Impairment loss reversal	-	-	-	48,371	4,420	52,791
Other differences (*2)	(233,869)	(23,698)	(4,146)	(34,189)	(54,163)	(350,065)
Ending Balance	5,567,101	401,042	250,243	3,433,564	1,909,699	11,561,649

(*1) During the current period, right-of-use assets were reclassified as property, plant and equipment.

(*2) Includes amounts such as foreign exchange differences.

 

 

	December 31, 2022
(In thousands of Korean won)	Land	Buildings	Vehicles	Equipment	Structures	Total
Beginning Balance	5,680,245	1,180,078	433,604	5,684,708	400,404	13,379,039
Acquisitions	-	-	23,940	1,524,255	39,441	1,587,636
Transference (*1)	4,468	27,156	-	-	-	31,624
Disposal	-	-	(64,716)	(393,919)	(20,704)	(479,339)
Depreciation	-	(362,643)	(210,490)	(2,945,623)	(221,715)	(3,740,471)
Impairment losses	-	-	(21,945)	(11,711)	-	(33,656)
Impairment loss reversal	-	-	36,002	2,162	50	38,214
Other differences (*2)	(424,257)	(75,044)	(1,019)	(87,734)	(18,721)	(606,775)
Ending Balance	5,260,456	769,547	195,376	3,772,138	178,755	10,176,272

(*1) The membership deposit of KRW 31,624,000 in the form of a public ownership system was transferred to KRW 27,156,000 and KRW 4,468,000 for buildings and land, respectively, during the current year.

(*2) Includes amounts such as foreign exchange differences.

 

(3) Among property, plant and equipment, land and buildings are provided as collateral for loans, and some vehicles are provided as collateral for the vehicle purchase price (refer to Note 35).

 

 

14. Intangible Assets :

(1) Details of the book values of intangible assets as of December 31, 2023 and 2022 are as follows:

(In thousands of Korean won)	December 31, 2023				December 31, 2022
	Acquisition cost	Accumulated amortization	Accumulated impairment losses	Book value		Acquisition cost	Accumulated amortization	Accumulated impairment losses	Book value
Goodwill	1,160,630	-	(775,495)	385,135		1,160,630	-	(775,495)	385,135
Industrial property rights	663,446	(521,286)	(10,521)	131,639		614,908	(493,651)	(10,989)	110,268
Patent	19,157	(12,274)	-	6,883		19,157	(9,694)	-	9,463
Software	56,150,169	(41,465,250)	(369,359)	14,315,560		59,378,622	(38,848,400)	(390,005)	20,140,217
Membership	1,355,047	(83,908)	(115,000)	1,156,139		1,357,073	(148,643)	(115,000)	1,093,430
Other intangible assets	1,547,002	-	(891,324)	655,678		1,523,697	-	(877,770)	645,927
Construction-in-progress	69,460	-	-	69,460		547,720	-	-	547,720
Total	60,964,911	(42,082,718)	(2,161,699)	16,720,494		64,601,807	(39,500,388)	(2,169,259)	22,932,160

 

(2) Changes in the book value of intangible assets for each of the two years in the period ended December 31, 2023 are as follows:

	December 31, 2023
(In thousands of Korean won)	Goodwill	Industrial property rights	Patent	Software	Membership	Other intangible assets	Construction-in-progress	Total
Beginning balance	385,135	110,268	9,463	20,140,217	1,093,430	645,927	547,720	22,932,160
Acquisitions	-	62,302	-	1,866,209	-	-	958,393	2,886,904
Disposal	-	(702)	-	(63,284)	-	-	-	(63,986)
Depreciation	-	(40,229)	(2,580)	(9,042,855)	(7,672)	-	-	(9,093,336)
Transference	-	-	-	1,436,055	-	-	(1,436,055)	-
Impairment loss reversal	-	-	-	1,247	72,407	-	-	73,654
Other differences	-	-	-	(22,029)	(2,026)	9,751	(598)	(14,902)
Ending balance	385,135	131,639	6,883	14,315,560	1,156,139	655,678	69,460	16,720,494

 

	December 31, 2022
(In thousands of Korean won)	Goodwill	Industrial property rights	Patent	Software	Membership	Other intangible assets	Construction-in-progress	Total
Beginning Balance	385,135	68,136	12,043	28,813,155	1,177,443	1,714,789	682,100	32,852,801
Acquisition	-	91,823	-	227,371	-	-	2,789,870	3,109,064
Disposal	-	(11,799)	-	(35,998)	-	(956,884)	-	(1,004,681)
Depreciation	-	(37,301)	(2,580)	(9,701,558)	(7,753)	-	-	(9,749,192)
Transference	-	-	-	2,924,250	-	-	(2,924,250)	-
Impairment loss	-	-	-	(2,050,011)	(72,407)	(247,470)	-	(2,369,888)
Impairment loss reversal	-	-	-	101	-	-	-	101
Other Differences	-	(591)	-	(37,093)	(3,853)	135,492	-	93,955
Ending Balance	385,135	110,268	9,463	20,140,217	1,093,430	645,927	547,720	22,932,160