TIDMHOYE
RNS Number : 1560I
Honye Financial Services Ltd
30 November 2022
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES
OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (596/2014/EU) AS THE
SAME HAS BEEN RETAINED IN UK LAW AS AMED BY THE MARKET ABUSE
(AMMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION IS NOW
CONSIDERED TO BE IN THE PUBLIC DOMAIN.
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN
PART, DIRECTLY OR INDIRECTLY IN, INTO OR FROM ANY JURISDICTION
WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OR
REGULATIONS OF SUCH JURISDICTION.
30 November 2022
Honye Financial Services Ltd
(the "Company" or "Honye")
Final Results for the year ended 31 July 2022
The Directors of Honye are pleased to announce the Company's
audited final results for the year ended 31 July 2022.
The Annual Report will be available on the Company's website:
www.honyefinance.com .
The Directors accept responsibility for this announcement.
Further information:
Honye Financial Services Ltd Shaun Carew-Wootton
shaun@rosellecapital.com
FINANCIAL AND OPERATIONAL SUMMARY
The loss for the year to 31 July 2022 was GBP294,632 (2021:
GBP813,088). This primarily reflects the day-to-day administrative
expenses and due diligence into prospective targets.
The loss per share was GBP0.012 (2021: GBP0.033).
At 31 July 2022, the Company had cash of GBP569k (2021: GBP1.13
million)., derived from the subscription and admission to the
Standard Listing segment of the London Stock Exchange in December
2018.
CHAIRMAN'S STATEMENT
Honye Financial Services Ltd ("Honye") was formed as a special
purpose company ("SPAC") to undertake one or more acquisitions of a
company or businesses in the financial services and in particular
the fintech sector principally in Europe and Asia.
As a result of the investigation of the many opportunities on 9
June 2021 the Company announced it had signed non-binding heads of
agreement with the shareholders of Zoyo Capital Limited ("Zoyo")
which set out the key terms for the proposed acquisition of the
entire issued share capital of Zoyo. Although the consideration
payable by Honye has not yet been determined, it is anticipated
that it will be satisfied entirely by the issue of new Honye shares
to the Zoyo shareholders.
The due diligence and negotiation of the various definitive
agreements has progressed well as has the preparation of the
prospectus required for the purposes of the reverse takeover.
However, there are still a number of steps necessary before being
able to complete the acquisition and apply for the suspension of
the trading in the Company's shares to be lifted.
All of this has been set against the backdrop of the last 21
months of COVID. We have all lived through extraordinary times and
no-one could have predicted in early 2020 how long the impact of
COVID would last and indeed still continues to affect the UK
economy and the rest of the world today.
We are about to enter another period of uncertainty as the
government support schemes, suspension of insolvency laws and
property eviction laws gradually come to an end. The impact on the
UK economy of these factors is hard to gauge when coupled with
supply chain disruption and labour shortages in some sectors.
However, in the short term these issues will not affect the
Company's day to day functioning due to Honye's cautious approach
to investment and identification of suitable acquisition candidates
its running costs are low and its asset is still cash in the
bank.
When (and we have to say "if") the acquisition of Zoyo is
completed your Board will be in a position to provide you with more
detail about the target and how the then prevailing market
conditions are likely to affect trading.
As ever we remain optimistic about a positive outcome to these
negotiations but will keep you informed of material
developments.
Shaun Carew-Wootton
Non-Executive Chairman
30 November 2022
DIRECTORS' REPORT
The Directors present this report on the Company, together with
the audited financial statements of the Company for the year from 1
August 2021 to 31 July 2022.
Principal activities
The Company was formed to undertake acquisitions in a company or
businesses principally in the financial services and fintech
sectors. In particular, the initial focus will be to acquire
companies which have the potential of growing in the Asian market.
Post-acquisition, the Company will generate returns for
shareholders through raising new capital through the enlarged
listed entity, and operational improvement, economics of scale, and
the subsequent performance of the acquired business.
Dividends
The Directors do not propose a dividend for the year ended 31
July 2022.
Post balance sheet events
There have been no material events that have occurred since the
year end that require further disclosure.
Directors
The Directors of the Company who have served during the year and
at the date of this report are:
Director Name Role Date of Appointment/ resignation
Xu, Wanbao Executive Director 18 July 2018
-------------------------- ---------------------------------
Gareth Maitland Independent Non-executive Resigned 28 April 2022
Edwards Director
-------------------------- ---------------------------------
Shaun Carew-Wootton Independent non-executive 7 December 2018
director
-------------------------- ---------------------------------
Yu Xing Liu Executive Director 7 April 2020
-------------------------- ---------------------------------
John Treacy Independent non-executive 19 May 2022
director
-------------------------- ---------------------------------
Donations
No political or charitable donations have been made in the
year.
Provision of information to auditors
Each of the persons who are Directors at the time when this
Directors' Report is approved has confirmed that:
-- so far as that Director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
-- each Director has taken all the steps that ought to have been
taken as a director in order to be aware of any relevant audit
information and to establish that the Company's auditor is aware of
that information.
Independent auditors
The Company's auditor is Shipleys LLP, 10 Orange Street,
Haymarket, London WC2H 7DQ .
By order of the board
Wanbao Xu
Executive Director
30 November 2022
CORPORATE GOVERNANCE REPORT
Introduction
The Board recognises the importance and value for the Company
and its shareholders of good corporate governance. The Company
Statement on Corporate Governance is set out below.
Board
The Board is currently comprised of:
Shaun Carew-Wootton , Independent Non-Executive Chairman
Wanbao Xu, Executive Director
Yu Xing Liu, Executive Director
John Treacy, Independent Non-Executive Director
Mr Wanbao Xu is also considered as a main shareholder by virtue
of his indirect significant securities in the Company as at 31 July
2022.
The terms and conditions of appointment of the non-executive
directors are available for inspection at the Company's registered
office.
For the year ending 31 July 2022 there were six Board Meetings
and all directors were in attendance. There were 10 separate
committee meetings of the independent non-executive directors
during the year.
The executive directors work full time for the Company
committing such time as may be required to service the needs of the
Company. The non-executive Directors are contractually committed to
one day per month to fulfil their obligations to the Company but
would commit such other time as may be necessary to service the
needs of the Company.
The Company has no business or trade and so the skills required
for the directors to carry out their duties, at this stage, are
limited to corporate governance.
Shaun Carew-Wootton, the Non-Executive Chairman, Shaun has over
35 years' experience in business, involved in hospitality,
telecoms, aviation, property development and finance. Co Investor
in a number of business start-ups (Fintech, Telecom, Property and
App). A Board member and consultant to several enterprises with
global growth acceleration.
With a wealth of connections in the private equity and capital
markets in Europe and Asia. Shaun works with a small number of
Asian families to provide an independent family office solution for
their UK investments and trophy purchases.
In his capacity as Non-Executive Chairman, Shaun Carew-Wootton
has assumed responsibility for leading the Board effectively and
ensuring the Company has appropriate corporate governance in place
and that these standards are observed and applied in the Company.
When the Company makes an acquisition, the Board will review the
corporate governance to ensure it adapts to take account of the
newly acquired business.
Corporate Governance Statement
As a company with a Standard Listing the Company is not required
to comply with the provisions of the UK Corporate Governance Code.
Nevertheless, the directors are committed to maintaining high
standards of corporate governance and propose, so far as is
practicable given the Company's size and nature, to voluntarily
adopt and comply with the QCA Code (available on the QCA's website
(www.theqca.com)). However, at present, due to the size of the
Company, the directors acknowledge that adherence to certain other
provisions of the QCA Code may be delayed until such time as the
directors are able to fully adopt them. In particular, action will
be required in the following areas:
-- in keeping with the QCA Code provisions on board composition,
the Company has separated the roles of chairman and executive
director. As the Company grows, the Board will seek to appoint
additional independent directors, one of whom will be appointed as
senior independent director;
-- the Company is currently too small to have an audit
committee, a remuneration committee or a nominations committee
established and the appointments to such committees will be
revisited upon the completion of an Acquisition along with
incorporating terms of reference for them;
-- the QCA Code recommends that companies publish key
performance indicators which align with strategy and feedback
through regular meetings with shareholders and directors. The
Company will not comply with this provision until after such time
as it has made an Acquisition; and
-- given the Company's size, it has not yet developed a
corporate and social responsibility policy, an emissions and
environmental policy or diversity policy. One will be put in place
at the appropriate time.
In line with the QCA Code, the Company holds timely board
meetings as issues arise which require the attention of the Board.
The Board is responsible for the management of the business of the
Company, setting the strategic direction of the Company and
establishing the policies of the Company. It is the directors'
responsibility to oversee the financial position of the Company and
monitor the business and affairs of the Company, on behalf of the
Shareholders, to whom they are accountable. The primary duty of the
directors is to act in the best interests of the Company at all
times. The Board also addresses issues relating to internal control
and the Company's approach to risk management.
The Board as a whole will be responsible for sourcing
acquisitions and ensuring that opportunities are in conformity with
the Company's strategy. The Board will meet periodically to: (i)
discuss possible acquisition opportunities for the Company; (ii)
monitor the deal flow and acquisitions in progress; and (iii)
review the Company's strategy and ensure that it is up-to-date and
appropriate for the Company and its aims.
The directors are responsible for internal controls in the
Company and for reviewing effectiveness. Due to the size of the
Company, all key decisions are made by the Board. The directors
have reviewed the effectiveness of the Company's internal controls
during the year under review and consider that there have been no
material losses, contingencies or uncertainties due to weaknesses
in the controls.
Share Dealings
The Company has voluntarily adopted a dealing code and
procedures manual which complies with the Market Abuse Regulation
and will take all reasonable steps to ensure compliance by the
directors and any relevant individuals.
Annual General Meeting
Individual shareholders will be given the opportunity to put
questions to the Chairman and to other members of the Board that
may be present at the AGM.
The Company will ensure a quorum is present to allow the formal
business of the AGM to be transacted. Voting on all resolutions
will be taken by way of a poll whereby shareholder votes are
counted according to the number of shares held by each shareholder.
Notice of the AGM will be sent to shareholders before the meeting,
which is planned to be on 18 March 2023 at 201 Bishopsgate,
Spitalfields, London EC2M 3AB. Details of proxy votes for and
against each resolution, together with the votes withheld are
announced to the London Stock Exchange and are published on the
Company's website as soon as practical after the meeting.
Shaun Carew-Wootton
Non-Executive Chairman
30 November 2022
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the financial
statements in accordance with applicable law and regulations.
Cayman Islands Company law requires the Directors to prepare
financial statements for each financial period. Under that law the
Directors have elected to prepare the financial statements in
accordance with International Financial Reporting Standards as
adopted by the United Kingdom ("IFRS"). The Directors must not
approve the financial statements unless they are satisfied that
they give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company for that
period.
In preparing these financial statements, the directors are
required to:
-- select suitable accounting policies and then apply them consistently;
-- make judgements and estimates that are reasonable and prudent;
-- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company will
continue in business
The Directors are responsible for causing to be kept proper
books of account with respect to:
-- all sums of money received and expensed by the Company and
the matters in respect of which the receipt and expenditure takes
place;
-- all sales and purchases of goods by the Company; and
-- the assets and liabilities of the Company.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
Shaun Carew-Wootton
Non-Executive Chairman
30 November 2022
Independent auditor's report to the members of Honye Financial
Services Ltd
Opinion on the financial statements
In our opinion the financial statements:
-- give a true and fair view of the state of the Company's
affairs as at 31 July 2022 and of the Company's loss for the year
then ended;
-- have been properly prepared in accordance with International
Financial Reporting Standards (IFRSs) as adopted by the United
Kingdom.
We have audited the financial statements of Honye Financial
Services Ltd (the 'Company') for the year ended 31 July 2022 which
comprise the Statement of Comprehensive Income, the Statement of
Financial Position, the Statement of Changes in Equity, the
Statement of Cash Flows and notes to the financial statements,
including a summary of significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the United Kingdom.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs
(UK)) and applicable law. Our responsibilities under those
standards are further described in the
Auditor's responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide
a basis for our opinion. Our audit opinion is consistent with the
additional report to the audit committee .
Independence
Following the recommendation of the Board, we were appointed to
audit the financial statements for the year ended 31 July 2022.
This is our first period of engagement covering the year to 31 July
2022. We remain independent of the Company in accordance with the
ethical requirements that are relevant to our audit of the
financial statements in the UK, including the Financial Reporting
Council's (FRC's) Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. The
non-audit services prohibited by that standard were not provided to
the Company.
Material uncertainty related to going concern
In auditing the financial statements, we have concluded that the
Directors' use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. We
considered going concern to be a key audit matter.
We draw your attention to note 4b of the financial statements,
which indicates that the Company is in the process of a Reverse
Take Over '(RTO'). Should the RTO not go ahead, the Company's
ability to meet its cashflow requirements could be difficult given
that the Company is non trading. As stated in Note 4b, these
conditions indicate that a material uncertainty exists that may
cast significant doubt on the Company's ability to continue as a
going concern. Our opinion is not modified in respect of this
matter.
Our evaluation of the Directors' assessment of the Company's
ability to continue to adopt the going concern basis of accounting
and in response to the key audit matter included:
-- In our evaluation of the Directors' conclusions, we
considered the inherent risks to the Company's business model and
analysed how those risks might affect the Company's financial
resources or ability to continue operations over the going concern
period. The risks that we considered most likely to affect the
Company's financial resources or ability to continue operations
over this period was the availability of capital to meet operating
costs and other financial commitments.
-- Obtained forecast used to support the going concern
assessment and challenged Directors' assumptions and judgements
applied in the forecast for consistency with our understanding of
the business, observations of historic trends and other
corroborative information. For example, we have obtained copies of
the legally binding agreements entered between the Company and
executive Directors and L&S Capital Limited for deferring and
waiving payments of the balances owing to them at year end
-- Performed retrospective and stress testing of the forecast
-- Considered the impact of the Covid 19 on the Company's operations and business activities
-- Reviewed the going concern disclosures included in the
financial statements and assessed whether the disclosures were
appropriate and sufficient in accordance with accounting standards
and applicable regulations.
Our responsibilities and the responsibilities of the Directors
with respect to going concern are described in the relevant
sections of this report.
Overview
99.7% of Company administrative expenses, 100%
Coverage of Company other income, 100% of Company liabilities
and 100% of Company total assets
2022
Completeness,
Key audit matters existence
and accuracy
of administrative
expenses
Going concern
------------------------------------------------------
Materiality GBP13,229 based on 5% of loss before tax
------------------------------------------------------
An overview of the scope of our audit
Our audit was scoped by obtaining an understanding of the
Company and its environment, including the Company's system of
internal control, and assessing the risks of material misstatement
in the financial statements. We also addressed the risk of
management override of internal controls, including assessing
whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
All our audit work was carried out in the UK by our audit
team.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest
effect on: the overall audit strategy, the allocation of resources
in the audit, and directing the efforts of the engagement team.
This matter was addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on this matter.
In addition to the matter described in the Material uncertainty
related to going concern section of our report, we have determined
the matters below to be the key audit matters to be communicated in
our report.
Key audit matter How the scope of our audit addressed
the key audit matter
Completeness, existence and
accuracy of administrative expenses
The Company has not started * Obtained the list of expenses and agreed the total to
earning any revenue and hence the trial balance
administrative expenses form
the most significant assessed
risk of misstatements.
-- Selected a sample of expenses and:
a) agreed the amount to supplier invoices.
Therefore, completeness, existence b) Obtained understanding of the nature
and accuracy of administrative of the expenses and evaluated whether
expenses is considered to be the expense represented a genuine business
a significant risk and key audit cost of the Company in the period.
matter. c) Agreed to the bank statements for
the payment of the invoices or traced
to creditor/accrual listing for unpaid
expenses.
d) Checked the name of the suppliers
for indication of related parties that
have not been identified by management.
-- Obtained the list of suppliers' invoices
received post year. For a sample of
invoices selected, obtained the business
rationale of the expenses and the period
the services cover to determine if the
invoices have been accounted for in
the correct accounting period
-- Selected a sample of cash movements
around year end, obtained an understanding
of business rationale of the transaction
and supporting documentation to ensure
expenses were accounted for in the correct
accounting period
-- For Directors' fees, we have obtained
the service agreements with each Director
and re-calculated the charge for the
year based on the agreed amount per
the agreements. We have obtained Directors'
remuneration confirmation from the Directors
in relation to fees received during
the year. We have also reviewed the
Directors' remuneration in relation
to the amount accrued as at 31 July
2021 which was waived during the year
and credited to the profit and loss
account as at 31 July 2022.
Key observations
From our procedures performed above,
we have not identified any material
misstatements relating to administrative
expenses.
------------------------------------------------------------------------
Our application of materiality
We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of
misstatements. We consider materiality to be the magnitude by which
misstatements, including omissions, could influence the economic
decisions of reasonable users that are taken on the basis of the
financial statements.
In order to reduce to an appropriately low level the probability
that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent
of testing needed. Importantly, misstatements below these levels
will not necessarily be evaluated as immaterial as we also take
account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality
for the financial statements as a whole and performance materiality
as follows:
2022
GBP
Materiality 13,229
---------------------------------------------------
Basis for determining 5% of loss before tax
materiality
---------------------------------------------------
Rationale for the benchmark The Company is still in its early stages of
applied development and incurring cost relating to
potential investments opportunities. In addition,
it has not earned any income and hence the
loss before tax i.e. the net total expenditure
incurred during the year has been considered
as the most appropriate measure as it is the
main factor of particular interest to the
users of the financial statements at this
stage.
-----------------------------------------------------
Performance materiality GBP9,922 at 75% of
materiality
---------------------------------------------------
Basis for determining On the basis of our risk assessments, together
performance materiality with our assessment of the overall control
environment, the complexity of the Company's
financial statements, and Directors' attitude
toward proposed adjustments, we set performance
materiality at 75% of materiality.
-----------------------------------------------------
Reporting threshold
We agreed with the Board that we would report to them all
individual audit differences in excess of GBP470.
Other information
The other information comprises the information included in the
annual report other than the financial statements and our auditor's
report thereon. The Directors are responsible for the other
information contained within the financial statements. Our opinion
on the financial statements does not cover the other information
and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing
so, consider whether the other
information is materially inconsistent with the financial
statements, or our knowledge obtained in the course of the audit,
or otherwise appears to be materially misstated. If we identify
such material inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise to a material
misstatement in the financial statements themselves. If, based on
the work we have performed, we conclude that there is a
material
misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Responsibilities of Directors
As explained more fully in the Statement of Directors'
responsibilities , the Directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the Directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Company's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Company or to cease
operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor's 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 ISAs (UK) 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 financial
statements.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which
our procedures are capable of detecting irregularities, including
fraud is detailed below.
We considered the nature of the Company's industry and its
control environment, and reviewed the company's documentation of
their policies and procedures relating to fraud and compliance with
laws and regulations. We also enquired of management about their
own identification and assessment of the risk of
irregularities.
We obtained an understanding of the legal and regulatory
framework and identified the key laws and regulations applicable to
Company and the industry in which it operates and considered the
risk of acts by the Company, which would be contrary to applicable
laws and regulations, including fraud. The most significant of
these for the Company's business is FCA Listing and DTR rules.
Our tests included, but are not limited to:
-- Enquiring of management and those charged with governance of
any non-compliance with Listing Rules;
-- Reading minutes of meetings of those charged with governance;
-- Considering the design and implementation of the controls in
monitoring compliance with laws and regulations.
We assess the susceptibility of the financial statements to
material misstatement including fraud and considered the key fraud
risk areas to be the completeness, existence and accuracy of
administration expenses and management override.
Our tests included, but were not limited to:
-- The procedures set out in the Key Audit Matters section above;
-- Testing journals, based on risk assessment criteria as well
as an unpredictable sample and evaluating whether there was
evidence of bias by management that represented a risk of material
misstatement due to fraud, and
-- evaluated the business rationale of any significant
transactions that are unusual or outside the normal course of
business.
Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising that
the risk of not detecting a material misstatement due to fraud is
higher than the risk of not detecting one resulting from error, as
fraud may involve deliberate concealment by, for example, forgery,
misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further
removed non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less
likely we are to become aware of it.
A further description of our responsibilities is available on
the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities . This description forms part of our auditor's report.
Use of our report
This report is made solely to the Company's members, as a body,
in accordance with the terms of the engagement letter dated 31
August 2022. Our audit work has been undertaken so that we might
state to the Company's members those matters we are required to
state to them in an auditor's report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company's
members as a body, for our audit work, for this report, or for the
opinions we have formed.
Benjamin Bidnell (Senior Statutory Auditor)
For and on behalf of Shipleys LLP
Chartered Accountants and statutory auditors
10 Orange Street
London
United Kingdom
WC2H 7DQ
Date: 30 November 2022
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEARED 31 JULY 2022
Year Ended Year Ended
Continuing operations Note 31/07/2022 31/07/2021
GBP GBP
Administrative expenses
* Professional fees (388,558) (578,233)
(97,667) (232,000)
(1,330) (2,855)
* Directorship fees
* Other expenses
------------ ----------------------
Total Administrative Expenses (487,555) (813,088)
Other Income 10 192,923 -
------------ ----------------------
Operating loss (294,632) (813,088)
Loss before taxation (294,632) (813,088)
------------ ----------------------
Taxation 11 - -
------------ ----------------------
Total comprehensive loss attributable
to equity holders of the Company
for the period (294,632) (813,088)
------------ ----------------------
Loss per share - basic and diluted
(pence per share) 12 1.2 3.3
STATEMENT OF FINANCIAL POSITION
FOR THE YEARED 31 JULY 2022
Note As at As at
31/07/2022 31/07/2021
GBP GBP
Assets
Current assets
Cash and cash equivalents 13 568,921 1,129,541
Other debtors 29,313 26 ,237
----------- -----------
Total current assets 598,234 1,155,778
----------- -----------
Total assets 598,234 1,155,778
=========== ===========
Equity and liabilities
Capital and reserves
attributable to owners
of the company
Ordinary shares 15 246,714 246,714
Share premium 2,252,892 2,252,892
Accumulated losses (2,213,300) (1,918,668)
----------- -----------
Total equity 286,306 580,938
----------- -----------
Current liabilities
Trade and other payables 14 311,928 574,840
Total current liabilities 311,928 574,840
----------- -----------
Total equity and liabilities 598,234 1,155,778
=========== ===========
These financial statements were authorised for
issue by the Board of Directors on 30 November
2022 and signed on behalf by:
Wanbao Xu
Executive Director
STATEMENT OF CHANGES IN EQUITY FOR THE
YEARED 31 JULY 2022
Note Share capital Share premium Accumulated
Losses Total
equity
GBP GBP GBP GBP
Balance as at 31 July
2020 246,714 2,252,892 (1,105,580) 1,394,026
Total comprehensive loss
for the year - - (813,088) (813,088)
=============== =============== =============== =============
Balance as at 31 July
2021 246,714 2,252,892 (1,918,668) 580,938
Total comprehensive loss
for the financial year - - (294,632) (294,632)
--------------- --------------- --------------- -------------
Balance as at 31 July
2022 15 246,714 2,252,892 (2,213,300) 286,306
=============== =============== =============== =============
STATEMENT OF CASH FLOWS FOR THE
YEARED 31 JULY 2022
Year Ended Year Ended 31/07/2021
31/07/2022 GBP
GBP
Cash flows from operating activities
Loss before taxation (294,632) (813,088)
Decrease in receivables 14,926 2,299
Increase/(decrease) in payables (297,241) 365,254
---------------------- ------------------------------
Net cash used in operating activities (594,947) (445,535)
---------------------- ------------------------------
Cash flows from financing activities
Director's loan 34,327 -
Net cash generated from financing activities - -
---------------------- ------------------------------
Net decrease in cash and cash equivalents (560,620) (445,535)
Cash and cash equivalents at beginning
of the period 1,129,541 1,575,076
---------------------- ------------------------------
Cash and cash equivalents at end of the
year 568,921 1,129,541
====================== ==============================
.
NOTES TO THE FINANCIAL STATEMENTS
1. GENERAL INFORMATION
The Company was incorporated and registered in the Cayman
Islands as a private company limited by shares on 25 April 2018
under the Companies Law (as revised) of The Cayman Islands, with
the name Honye Financial Services Limited, and registered number
336262.
The Company's registered office is located at Ogier Global
(Cayman) Limited, 89 Nexus Way, Camana Bay, Grand Cayman, KY1-9901,
Cayman Islands.
2. PRINCIPAL ACTIVITIES
The principal activity of the Company is to undertake
acquisitions in a company or businesses principally in the
financial services and fintech sectors. In particular, the initial
focus will be to acquire companies which have the potential of
growing in the Asian market. Post-acquisition, the Company will
generate returns for shareholders through raising new capital
through the enlarged listed entity, and operational improvement,
economics of scale, and the subsequent performance of the acquired
business .
3. RECENT ACCOUNTING PRONOUNCEMENTS
-- he amendments are effective for business combinations for
which the acquisition date is on or after the beginning of the
first annual reporting period beginning on or after 1 January
2020.
The new standards that have been adopted in the financial
statements for the year have not had significant effect on the
company.
There are a number of standards, amendments to standards, and
interpretations which have been issued by the IASB that are
effective in future accounting periods that the Company has decided
not to adopt early.
The following amendments are effective for the period beginning
1 August 2022:
-- Onerous Contracts - Cost of Fulfilling a Contract (Amendments
to IAS 37);
-- Property, Plant and Equipment: Proceeds before Intended Use
(Amendments to IAS 16);
-- Annual Improvements to IFRS Standards 2018-2020 (Amendments
to IFRS 1, IFRS 4, IFRS 7, IFRS 9, IFRS 16, IAS 39, and IAS 41);
and
-- References to Conceptual Framework (Amendments to IFRS
3).
The following amendments are effective for the period beginning
1 August 2023:
-- Disclosure of Accounting Policies (Amendments to IAS 1 and
IFRS Practice Statement 2);
-- Definition of Accounting Estimates (Amendments to IAS 8);
and
-- Deferred Tax Related to Assets and Liabilities arising from a
Single Transaction (Amendments to IAS 12).
The Directors do not believe these standards and interpretations
will have a material impact on the financial statements once
adopted.
4. SIGNIFICANT ACCOUNTING POLICIES
a) Basis of preparation
The financial information has been prepared in accordance with
International Financial Reporting Standards ("IFRS") as adopted by
the United Kingdom and prepared on a going concern basis, under the
historic cost convention.
The financial information is presented in Pounds Sterling (GBP),
which is the Company's functional currency. A summary of the
principal accounting policies of the Company are set out below.
The company has not prepared consolidated financial statements
on the basis that the non-trading investment subsidiary Honye
Trading Limited is immaterial to the results of the combined
group.
4. SIGNIFICANT ACCOUNTING POLICIES (Continued)
b) Going concern
The financial statements have been prepared on a going concern
basis. The Directors have considered the impact of the Covid-19
pandemic on the Company, in the context of its operations and the
market it operates in.
As the Company has no existing business and its management
operates remotely the practical impact of COVID -19 on the Company
has been minimal and it is able to continue to monitor the
acquisition opportunities without discernible disruption. At this
stage, the Directors do not envisage a long-term impact to the
Company resulting from the Covid-19 pandemic but will continue to
monitor the situation and continue to expand its search for
appropriate acquisition opportunities.
On 9 June 2021, the Company announced it had signed non-binding
heads of agreements for a potential acquisition which, if concluded
would constitute a Reverse Take Over ("RTO") under the Listing
Rules. The RTO transaction is progressing well but is not yet close
to a conclusion.
Taking account of the costs incurred in relation to the RTO
transaction and reviewing its cash requirements over the next
twelve months, the directors are concerned that, if the RTO and its
accompanying fundraise do not complete, there could be uncertainty
for the Company's future as a going concern. To ensure the
Company's financial survival the executive directors have agreed
vary their outstanding service fees payable to them as follows:
1. For Xu Wanbao:
a) notwithstanding any accruals made in respect of deferred
salary in the Company's accounts, to defer the payment to him of
any such accrued sums up to the date until the completion of
RTO;
b) that his salary shall be reduced to Nil from 1 Aug 2021 as
long as the Agreement is in existence
2. For Yu Xing Liu:
a) notwithstanding any accruals made in respect of deferred
salary in the Company's accounts, to defer the payment to him of
any such accrued sums up to the date until completion of RTO;
b) that his salary shall be reduced to Nil from 1 Aug 2021 as
long as the Agreement is in existence
3. For L&S Capital Limited:
a) to defer the payment of Fees owed to it up to 31 July 2021 in
the sum of GBP82,656 until 30 November 2023;
b) to defer the payment of Fees in respect of the period 1
August 2021 to 31 December 2021 until 30 November 2023;
c) that the Fees shall be reduced to GBP1,000 per calendar month
from 1 January 2022 until completion of an Acquisition (as defined
below); and
d) any sums owing in respect of Fees in respect of the period
from 1 January 2022 shall be deferred for payment until 30 November
2023.
On the basis that the above happens, this would ensure that the
Company will continue to be able to meet its liabilities as they
fall due from its existing cash resources, if the current RTO fails
to complete.
We are optimistic that the RTO transaction will be concluded
successfully in the next couple of months but in the event that the
RTO is not successful the Company will ensure it has adequate
financial resources before embarking on an alternative
acquisition.
The Board recognizes that unplanned for costs can arise and that
existing costs can rise unexpectedly. The Board has planned its
finances on the basis of current known projected costs. Should the
RTO not happen, as there is no trading income, the prospect of
unexpected costs and cost increases give rise to material
uncertainty that may cast significant doubt on the company's
ability to continue as a going concern and therefore that they may
be unable to realise their assets and discharge their liabilities
in the normal course of business. The financial statements do not
include adjustments that will result if the Company were unable to
continue as a going concern. Should such an eventuality arise the
Board will immediately explore the possibility of an urgent
fundraise with its brokers.
4. SIGNIFICANT ACCOUNTING POLICIES (Continued)
c) Foreign currency translation
The financial statements of the Company are presented in the
currency of the primary environment in which the Company operates
(its functional currency).
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at year
end exchange rates of monetary assets and liabilities denominated
in foreign currencies are recognised in profit and loss.
d) Financial instruments
A financial asset or a financial liability is recognised only
when the Company becomes a party to the contractual provisions of
the instrument. Financial assets and financial liabilities are
initially measured at fair value.
Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities
(other than financial assets and financial liabilities at fair
value through profit or loss) are added to or deducted from the
fair value of the financial assets or financial liabilities, as
appropriate, on initial recognition. Transaction costs directly
attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised
immediately in profit or loss.
Financial assets
All financial assets are recognised and derecognised on a trade
date where the purchase or sale of a financial asset is under a
contract whose terms require delivery of the financial asset within
the timeframe established by the market concerned, and are
initially measured at fair value.
Financial assets are subsequently classified into the following
specified categories: Financial assets measured at fair value
through profit and loss (FVTPL), Financial assets measured at
amortised cost and Financial assets measured at fair value through
other comprehensive income. The Company's financial assets measured
at amortised cost comprise cash and cash equivalents in the
statement of financial position.
Financial liabilities
The Company's financial liabilities include trade and other
payables. Financial liabilities are recognised when the Company
becomes a party to the contractual provision of the instrument. All
financial liabilities are recognised initially at their fair value,
net of transaction costs, and subsequently measured at amortised
cost, using the effective interest method, unless
the effect of discounting would be insignificant, in which case
they are stated at cost. The Company derecognises financial
liabilities when, and only when, the Company's obligation are
discharged, cancelled or they expire.
e) Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on
call with banks and other short term (having original maturity
within 3 months) highly liquid investments that are readily
convertible into known amounts of cash, and which are subject to an
insignificant risk of changes in value.
f) Administrative expenses
Administrative expense includes professional fees, directorship
fees and other expenses, which are recognised on an accruals basis
as services are provided to the Company.
5. ACCOUNTING ESTIMATES AND JUDGEMENTS
Preparation of financial information in conformity with IFRS
requires management to make judgements, estimates and assumptions
that affect the application of accounting policies and the reported
amounts of assets, liabilities, income and expenses. The estimates
and associated assumptions are based on historical experience and
various other factors that are believed to be reasonable under the
circumstances, the results of which form the basis of making
judgements about carrying values of assets and liabilities that are
not readily apparent from other sources.
It is the Directors' view that there are no significant areas of
estimation, uncertainty and critical judgements in applying
accounting policies that have significant effect on the amount
recognised in the financial information for the period.
6. FINANCIAL RISK MANAGEMENT
a) Objectives and policies
The Company is exposed to a variety of financial risks: market
risk, credit risk and liquidity risk. The risk management policies
employed by the Company to manage these risks are discussed below.
The primary objectives of the financial risk management function
are to establish risk limits, and then ensure that exposure to risk
stays within these limits. The operational and legal risk
management functions are intended to ensure proper functioning of
internal policies and procedures to minimise operational and legal
risks.
b) Currency risk
Currency risk is not considered to be material to the Company as
majority of bank transactions were incurred in Pounds Sterling
(GBP).
c) Credit risk
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to the
Company. Concentrations of credit risk exist to the extent that the
Company's cash were all held with DBS bank. Per Standard &
Poor's - the Short Term Deposit Rating is A-1+.
e) Liquidity risk
Liquidity risk is the risk that the Company will encounter
difficulty in meeting the obligations associated with its financial
liabilities. The Company's approach to managing liquidity is to
ensure, as far as possible, that it will always have sufficient
liquidity to meet its liabilities when due, under both normal and
stressed conditions, without incurring unacceptable losses or
risking damage to the Company's reputation.
f) Interest rate risks
The Company has limited exposure to interest rate risk on its
cash positions. Such exposures are managed as efficiently as
possible, given that working capital needs to be maintained. The
effect of a 100 basis points increase/decrease in interest rates
would not have a material impact on pre-tax profits or equity.
7. SEGMENT REPORTING
IFRS 8 defines operating segments as those activities of an
entity about which separate financial information is available and
which are evaluated by the Board of Directors to assess performance
and determine the allocation of resources. The Board of Directors
are of the opinion that under IFRS 8 the Company has only one
operating segment and one geographic market in the UK. The Board of
Directors assess the performance of the operating segment using
financial information which is measured and presented in a manner
consistent with that in the Financial Statements. Segmental
reporting will be reviewed and considered in light of the
development of the Company's business over the next reporting
period. Honye Financial Services Limited has no activities at
present other than reviewing possible investment opportunities.
8. AUDITORS' REMUNERATION
The following remuneration was received by the Company's
auditors:
Year ended Year ended
31/07/2022 31/07/2021
GBP GBP
Remuneration for the audit
of the Company's financial
statements 18,000 40,000
Non-audit services - 122,488
9. DIRECTORS' EMOLUMENTS
Year Ended Year Ended
31/07/2022 31/07/2021
GBP GBP
Key management emoluments
Remuneration 97,667 232,000
------------ -------------
The annual remuneration of the key management was as follows, with
no other cash or non-cash benefits.
Year Ended Year Ended
31/07/2022 31/07/2021
GBP GBP
Executive Directors
Wanbao Xu - 50,000
Yu Xing Liu - 87,500
Non-executive Directors
Gareth Edwards (resigned
on 28 April 2022) 45,000 52,500
Shaun Carew-Wootton 48,000 42,000
John Treacy (appointed 4,667 -
on 19 May 2022)
------------ ------------
Total 97,667 232,000
============ ============
Included within trade and other payables is GBP29,667 (2021:
GBP218,922), which relates to unpaid directors' remuneration.
10. OTHER INCOME
On 24 February 2022, the Directors, Mr Wanbao Xu and Mr Yu Xing
Liu, agreed to vary the terms of their service agreements and:
-- notwithstanding any accruals made in respect of deferred
salary in the Company's accounts, to waive the payment to them of
any such accrued sums up to the date hereof;
-- that their salaries shall be reduced to NIL per calendar
month from 1 August 2021 until completion of the Company completing
an acquisition.
As a result of Mr Wanbao Xu and Mr Yu Xing Liu waiving their
unpaid salaries, their accrued salaries as at 31 July 2021 amounted
to GBP192,923 was reversed and credited to the income statement in
the current year.
11. TAXATION
The Company is incorporated in the Cayman Islands, and its
activities are subject to taxation at a rate of 0%.
12. LOSS PER SHARE
The Company presents basic and diluted earnings per share
information for its ordinary shares. Basic earnings per share are
calculated by dividing the profit attributable to ordinary
shareholders of the Company by the weighted average number of
ordinary shares in issue during the reporting period. Diluted
earnings per share are determined by adjusting the profit
attributable to ordinary shareholders and the weighted average
number of ordinary shares outstanding for the effects of all
dilutive potential ordinary shares.
There is no difference between the basic and diluted earnings
per share, as the Company has no potential ordinary shares.
Year Ended 31/07/2022 Year Ended
GBP 31/07/2021
GBP
Loss attributable to ordinary shareholders
(GBP) (294,632) ( 813,088)
Weighted average number of shares 24,671,350 24,671,350
--------------------- ------------
Loss per share (expressed as pence per
share) (1.2) (3.3)
12. CASH AND CASH EQUIVALENTS
31/07/2022 31/07/2021
GBP GBP
Cash at bank 568,921 1,129,541
---------------- ----------
13. TRADE AND OTHER PAYABLES
31/07/2022 31/07/2021
GBP GBP
Trade and other payables 277,601 574,840
Director's current account 34,327 -
---------------- ----------
Total 311,928 574,840
================ ==========
14. SHARE CAPITAL
Number Nominal
Value
GBP
Authorised
Ordinary shares of GBP0.01 each 1,000,000,000 10,000,000
Issued and fully paid 24,671,350 246,714
As at 31 July 2021 and 31 July 2022 24,671,350 246,714
============== ===========
All of the issued Ordinary Shares are in registered form and the
Registrar is responsible for maintaining the Company's share
register. There are no restrictions on the distribution of
dividends and the repayment of capital.
The ISIN number of the Ordinary Shares is KYG4598W1024 and SEDOL
number is BGR5JO2.
14. SUBSEQUENT EVENTS
There have been no material events that have occurred since the
year end that require further disclosure.
15. CAPITAL MANAGEMENT
The Company actively manages the capital available to fund the
Company, comprising equity and reserves. The Company's objectives
when maintaining capital is to safeguard the entity's ability to
continue as a going concern, so that it can continue to provide
returns for shareholders.
The capital structure of the Company as at 31 July 2022
consisted of Ordinary Shares and equity attributable to the
shareholders of the Company, totalling GBP286,306 (2021:
GBP580,938) (disclosed in the statement of changes in equity).
The Company reviews the capital structure on an on-going basis.
As part of this review, the directors consider the cost of capital
and the risks associated with each class of capital. The Company
will balance its overall capital structure through the payment of
dividends, new share issues and the issue of new debt or the
repayment of existing liability.
16. RELATED PARTY TRANSACTIONS
As at the 31 July 2022, transaction with the directors mainly
arose business expenses paid on behalf of the
company, the amount of GBP34,327 (2021: GBPnil) was owed by the
company to the director.
In May 2022, the company paid GBP18,000 on behalf of Honye
Trading ltd, a UK subsidiary registered on 24(th) February 2022. Mr
S Carew-Wootton, the independent non-executive director of the
Company, is also a director of Honye Trading Ltd. Honye Trading Ltd
has not started trading during the year.
The remuneration of the Directors, the key management personnel
of the Company, is set out in note 9.
17. ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party.
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END
FR DBLFXLFLLFBX
(END) Dow Jones Newswires
November 30, 2022 13:12 ET (18:12 GMT)
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