Independent Auditors' Report

Based on a report originally issued in Korean

To the Shareholders and Board of Directors of   

Hanatour Service Inc.:

Opinion

We audited the consolidated financial statements of Hanatour Service Inc. and its subsidiaries (the "Group"), which comprise the consolidated statements of financial position as of December 31, 2022 and 2021, the consolidated statements of comprehensive income (loss), changes in equity and cash flows for the years then ended, and notes, comprising a summary of significant accounting policies and other explanatory information.

In our opinion, these consolidated financial statements fairly represent the financial position and performance of the group as of December 31, 2022, in accordance with Korean International Financial Reporting Standards. ("K-IFRS").

Basis for Opinion

We conducted our audits in accordance with Korean Standards on Auditing (KSAs).  Our responsibilities under those standards are further described in the Auditors' Responsibilities for the Audit of the Consolidated Financial Statements section of our report.  We are independent of the Group in accordance with the ethical requirements that are relevant to our audit of the consolidated financial statements in Republic of Korea, and we have fulfilled our other ethical responsibilities in accordance with these requirements.  We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

This section highlights matters that do not affect the audit opinion but require attention from users:

• Uncertainties Due to COVID-19

The travel and hotel industries, to which the consolidated company belongs, face uncertainties in future revenue generation and cash flows due to the widespread impact of COVID-19. This includes extensive booking cancellations and a decrease in new travel demand.

Items affected by COVID-19 mainly involve the occurrence of operating revenue, impairment assessment of cash-generating units, and the realizability of deferred tax assets. The consolidated company has reasonably estimated the impact of COVID-19 on its financial statements for the period ending December 31, 2022. However, predicting the ultimate impact of the ongoing COVID-19 spread on the company's financial position, performance, and cash flows is challenging as of the date of this audit report.

Key Audit Matters

Key audit matters are the most significant issues identified based on our professional judgment during the audit of the financial statements. These matters have been addressed in the context of our audit of the financial statements as a whole, and we do not provide a separate opinion on these matters.

• Evaluation of Realizability of Deferred Tax Assets of Hanatour Service Inc., the Parent Company

The parent company recognized deferred tax assets of 50,554 million Won, limited to the extent that sufficient taxable income is expected to be generated.

The evaluation of the realizability of deferred tax assets involves management's judgment regarding the estimation of future taxable income and the timing of loss carryforwards. Due to the high subjectivity in these estimates, we identified this evaluation as a key audit matter.

Our main audit procedures included assessing the design and operational effectiveness of internal controls related to the realizability of deferred tax assets, reviewing tax adjustments and corporate tax expenses with the help of tax experts, examining the reliability of the underlying data used in future taxable income estimates, reviewing the timing of realization of deductible temporary differences and tax carryforward losses, and recalculating the amount of deferred tax assets calculated by the company.

Other Matters

The consolidated financial statements for the period ending December 31, 2021, of the consolidated company were audited by KPMG Samjong Accounting Firm. In their audit report dated March 17, 2022, an unqualified opinion was expressed regarding these consolidated financial statements.

Responsibilities of Management and Governance for the Consolidated Financial Statements

Management is responsible for preparing and fairly presenting the consolidated financial statements in accordance with K-IFRS. They are also responsible for internal controls deemed necessary to ensure the preparation of consolidated financial statements free from material misstatements, whether due to fraud or error.

Management has the duty to assess the going concern status of the consolidated company and disclose related matters as applicable. They are responsible for using the going concern basis of accounting unless there is an intention to liquidate the company or cease operations.

The governing body is responsible for overseeing the financial reporting process of the consolidated company. Management is also accountable for establishing and maintaining effective internal controls for the preparation of consolidated financial statements that are free from significant misrepresentation.

Auditors' Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors' report that includes our opinion.  Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with KSAs will always detect a material misstatement when it exists.  Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with KSAs, we exercise professional judgment and maintain professional skepticism throughout the audit.  We also:

• Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's internal control.

• Evaluate the appropriateness of accounting policies used in the preparation of the consolidated financial statements and the reasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors' report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors' report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters.  We describe these matters in our auditors' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The director in charge of performing this audit is Lee Yong Woo.

Ernst & Young Han Young

Seoul, Korea

March 16, 2023

HANATOUR SERVICE INC. AND SUBSIDIARIES

Consolidated Statements of Financial Position

As of December 31, 2022 and 2021

HANATOUR SERVICE INC. AND SUBSIDIARIES

Consolidated Statements of Financial Position, Continued

As of December 31, 2022 and 2021

HANATOUR SERVICE INC. AND SUBSIDIARIES
Consolidated Statements of Comprehensive Income (Loss)

For the years ended December 31, 2022 and 2021

HANATOUR SERVICE INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Equity

For the years ended December 31, 2022 and 2021