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 AMENDED BY THE MARKET ABUSE
(AMENDMENT) (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.
2 April 2024
Honye Financial Services
Ltd
(the
"Company" or "Honye")
Final Results for the year ended
31 July 2023
The Directors of Honye are pleased to announce
the Company's audited final results for the year ended 31 July
2023. 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 2023 was
£297,677 (2022: £294,632). This primarily reflects the day-to-day
administrative expenses and due diligence into prospective
targets.
The loss per share was £0.012 (2022:
£0.012).
At 31 July 2023, the Company had cash of £303k
(2022: £569k)., 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. It
is anticipated that it will be satisfied entirely by the issue of
new Honye shares to the Zoyo shareholders.
Although we have experienced significant delay
due to the pandemic travel restrictions, 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. Honye continues its cautious approach to investment
and identification of suitable acquisition candidate(s), its
running costs are low, and its asset is still cash in the
bank.
Due to delays in the acquisition transaction,
the company has incurred significant expenses, resulting in a
depletion of its cash reserves. While the company made efforts to
keep operational overhead low, the majority of its expenditures
have been directed towards the acquisition process itself. In order
to ensure the continuation of the acquisition and cover operational
overhead, it became necessary for the company to raise further
capital.
The Company has successfully secured a £275k
loan from Tang Investment No 1 Ltd. ("Tang"). On receipt, this loan
will provide the necessary support for the remaining work involved
in the acquisition process and will help cover operational expenses
during this critical period. Tang is principally funded by a
consortium of private investors based in Southeast Asia. The
Company also expects Tang to make a material investment in the
fundraising to be carried out in connection with the
RTO.
We are confident that this additional capital
injection will enable us to complete the Reverse Takeover (RTO)
process and maintain operations for the upcoming 12
months.
Shaun Carew-Wootton
Non-Executive Chairman
1 April 2024
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 2022 to 31 July
2023.
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 2023.
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
|
|
Shaun Carew-Wootton
|
Independent non-executive
director
|
7 December 2018
|
|
Yu Xing Liu
|
Executive Director
|
7 April 2020
|
|
John Treacy
|
Independent non-executive
director
|
19 May 2022
|
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
1 April 2024
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 2023.
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 2023 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.
Climate risk
management
The Chairman and the Board oversees and has
ultimate responsibility for the Company's sustainability
initiatives, disclosures, and reporting. This includes, but is not
limited to, climate risks and opportunities. As a cash shell, the
Company is exempt from providing the disclosures required by the
Taskforce on Climate-related Financial Disclosures ("TCFD"),
however this section provides an overview of the Company's approach
to managing the very limited climate risks it currently
faces.
The executive management team have day-to-day
responsibility for assessing and managing climate-related risks and
opportunities. We are committed to minimising the Company's impact
on the environment. As it is presently constituted, the Company's
environmental impact is minimal and climate-related risks and
opportunities are extremely limited until it acquires another
business. At present, the Company has no operating investments and
only 2 full-time employees. These employees perform largely
information-based roles, and they all work from home as the Company
does not maintains business premises.
The only environmental impact currently is
from business travel, which has been extremely limited in the past
two years and is expected to continue to be lower than previously
because of the post-pandemic shift towards virtual tools. The
Company's overall environmental impact is therefore minimal. The
Company's approach is therefore to seek to maintain lean working
arrangements, use technology to minimise business travel and
encourage employees to recycle, minimise energy wastage, and do
their part to ensure that the Company acts responsibly. If the
Company continues to operate as it is presently constituted it is
therefore difficult to identify any climate related risks in the
short, medium, or long term that could significantly impact the
business. For this reason, the Company does not presently feel it
is appropriate or necessary to apply metrics or targets to assess
climate related risks beyond the Greenhouse gas reporting presented
below.
Clearly, the Company does not intend to
continue operating in its present form indefinitely, we intend to
make acquisitions that will profoundly change the scale and
climate-related risk profile of the business and the process for
identifying and managing them. It is not possible to reach any
sensible conclusions today about which risks the Company may be
exposed to in the future without knowing what businesses it will
acquire.
While it is not possible to know today what
climate related risks it will inherent, the Company is conscious
that such risks and opportunities will exist in any potential
acquisition and considers that the most important objective is to
ensure these are properly understood in the due diligence phase of
any transaction so appropriate decisions can be taken on risk
mitigation tools. The Company's Board have concluded that the most
appropriate way to address this is to ensure that climate-related
risk is specifically scoped in when undertaking due diligence on
acquisition targets.
Greenhouse
gas emissions
Considering the non-material environmental
impacts of the Company's business as described in this report,
management takes the view that greenhouse gas emissions are the
most important metric to track and against which future targets may
be set. We have compiled our greenhouse gas ("GHG") emissions in
accordance with the Companies Act 2006 (Strategic Report and
Directors' Report) Regulations 2013 ("SECR").
Calculations follow the GHG Protocol Corporate
Accounting and Reporting Standard (revised edition). The GHG
reporting period aligns with the financial statements and
boundaries are defined using the financial control approach. GHG
emissions are broken down into three categories; reporting is
required only on scope 1 and 2: Scope 1 emissions: Direct emissions
from sources owned or controlled by the Company. Scope 2 emissions:
Indirect emissions attributable to the Company due to its
consumption of purchased electricity. Scope 3 emissions: Other
indirect emissions associated with activities that support or
supply the Company's operations.
The Company has no Scope 1 emissions. The
Company's Scope 2 and Scope 3 emissions for the year to 31 July
2023 and comparative previous period are immaterial due to
homeworking arrangements and restrictions on travel which were
imposed in response to the COVID-19 pandemic. No further energy and
carbon information is disclosed as the Group is exempt on the
grounds of being a low energy user within the meaning of SECR. At
the present time, the Company does not consider it appropriate to
set emissions reduction targets, particularly given the low levels
of emissions already achieved.
The Company does not currently hold any
investments. When investments are held, the Company will keep under
review whether it would be appropriate to support investee
companies in tracking metrics and setting targets.
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. Details of proxy votes for and against each
resolution, together with the votes withheld will be announced to
the London Stock Exchange and published on the Company's website as
soon as practical after the meeting.
Shaun Carew-Wootton
Non-Executive Chairman
1 April 2024
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
1 April 2024
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 2023 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 2023. This is our first period of engagement
covering the year to 31 July 2023. 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.
•
Performed retrospective and stress testing of the
forecast.
•
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.
• We have
discussed with management and the Board the company's strategy to
secure short term financing to as is required.
Our responsibilities and the responsibilities
of the Directors with respect to going concern are described in the
relevant sections of this report.
Overview
|
Coverage
|
83% of Company administrative
expenses, 100% of Company liabilities and 100% of Company total
assets
|
|
Key audit matters
|
|
|
2023
|
|
|
Completeness, existence and
accuracy of administrative expenses
|
√
|
|
|
Going concern
|
√
|
|
|
|
Materiality
|
£14,844 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
earning any revenue and hence administrative expenses form the most
significant assessed risk of misstatements.
Therefore, completeness, existence
and accuracy of administrative expenses is considered to be a
significant risk and key audit matter.
|
· Obtained the list of expenses and agreed the total to the
trial balance
· Selected a sample of expenses and:
a) agreed the amount to supplier invoices.
b) Obtained understanding of the nature of the expenses and
evaluated whether the expense represented a genuine business cost
of the Company in the period.
c)
d) Agreed to the bank statements for the payment of the invoices
or traced to creditor/accrual listing for unpaid
expenses.
e) 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.
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:
|
|
2023
£
|
2022
£
|
|
Materiality
|
14,884
|
13,229
|
|
Basis for determining materiality
|
5% of loss before tax
|
5% of loss before tax
|
|
Rationale for the benchmark applied
|
The Company is still in its early
stages of 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
|
£11,163 at 75% of
materiality
|
£9,922 at 75% of
materiality
|
|
Basis for determining performance
materiality
|
On the basis of our risk
assessments, together 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
£744.
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: 2 April 2024
|
STATEMENT OF
COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 JULY 2023
|
|
|
|
|
|
Continuing
operations
|
Note
|
Year Ended 31/07/2023
£
|
|
Year Ended
31/07/2022
£
|
|
|
Administrative expenses
- Professional
fees
- Directorship fees
- Other expenses
|
|
(218,497)
(72,000)
(7,180)
|
|
(388,558)
(97,667)
(1,330)
|
|
|
Total Administrative
Expenses
|
|
(297,677)
|
|
(487,555)
|
|
|
Other Income
|
|
-
|
|
192,923
|
|
|
Operating loss
|
|
(297,677)
|
|
(294,632)
|
|
|
|
|
|
|
|
|
|
Loss before taxation
|
|
(297,677)
|
|
(294,632)
|
|
|
Taxation
|
10
|
-
|
|
-
|
|
|
Total
comprehensive loss attributable to equity holders of the Company
for the period
|
|
(297,677)
|
|
(294,632)
|
|
|
Loss per share - basic and diluted
(pence per share)
|
11
|
(1.2)
|
|
(1.2)
|
|
|
|
|
|
|
|
|
|
|
|
|
STATEMENT
OF FINANCIAL POSITION
FOR THE YEAR ENDED 31 JULY 2023
|
|
|
|
|
Note
|
As
at
|
|
|
As
at
|
|
|
31/07/2023
|
31/07/2022
|
|
|
£
|
£
|
|
|
|
|
|
Assets
Current assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
12
|
302,807
|
|
|
568,921
|
|
Other debtors
|
|
41,167
|
|
|
29,313
|
|
Total current assets
|
|
343,974
|
|
|
598,234
|
|
Total assets
|
|
343,974
|
|
|
598,234
|
|
Equity and liabilities
|
|
|
|
|
|
|
Capital and reserves attributable to owners of the
company
|
|
|
|
|
|
|
Ordinary shares
|
14
|
246,714
|
|
|
246,714
|
|
Share premium
|
|
2,252,892
|
|
|
2,252,892
|
|
Accumulated
losses
|
15
|
(2,510,977)
|
|
|
(2,213,300)
|
|
Total equity
|
|
(11,371)
|
|
|
286,306
|
|
Current liabilities
|
|
|
|
|
|
|
Trade and other payables
|
13
|
355,345
|
|
|
311,928
|
|
Total current liabilities
|
|
355,345
|
|
|
311,928
|
|
Total equity and liabilities
|
|
343,974
|
|
|
598,234
|
|
These financial statements
were authorised for
issue by the Board of Directors on 1 April 2024 and signed on
behalf by:
Wanbao Xu
Executive Director
|
|
|
|
|
|
|
|
|
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 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 (£), 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.
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 enhance the financial stability
and ensure sufficient liquidity of the company, Our Chairman, Shaun
Wootton, has proactively sourced an unsecured loan of £275,000 with
a three-year term from Tang Investment No1 Limited. In addition,
the executive director, Liu Yu Xing (Terry), has consented to defer
the repayment of a director's loan, amounting to £34,326.43, until
after the completion of the Reverse Takeover (RTO). Furthermore,
the consultant L&S Capital Ltd has agreed to further deferred
the outstanding invoices of £100,163 to 31 December
2025.
This strategic initiative is to
secure the necessary funds to complete the final stages of our RTO
process and to ensure operations for the next 12 months.
While the Company has enough
capital resource to continue operating for the next 12 months, if
the currently proposed RTO does not happen, the Board recognises
that at the end of that 12-month period, if no other RTO is
identified and engaged with, it will need to consider its options.
Although all the prevailing circumstances at the time will first
need to be taken into account before any decision is made, the
obvious options are either a placing or open offer to raise more
cash to extend the company's liquidity runway or to call a
shareholders' meeting to approve the delisting of the Company from
the standard list and return whatever cash is left to the
shareholders.
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.
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 (£).
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+.
d) 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.
e) 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
31/07/2023
|
Year ended
31/07/2022
|
|
|
|
£
|
£
|
|
|
Remuneration for the audit of the
Company's financial statements
|
|
18,000
|
18,000
|
|
|
Non-audit services
|
-
|
|
|
|
|
|
|
|
|
9. DIRECTORS'
EMOLUMENTS
|
|
|
Year Ended 31/07/2023
£
|
|
|
Year Ended
31/07/2022
£
|
|
|
Key management emoluments
|
|
|
|
|
|
|
|
Remuneration
|
|
72,000
|
|
|
97,667
|
|
|
|
|
The annual remuneration of the key
management was as follows, with no other cash or non-cash
benefits.
|
|
|
|
|
|
Year Ended
31/07/2023
£
|
|
|
Year Ended 31/07/2022
£
|
|
|
Executive Directors
|
|
|
|
|
|
|
|
|
|
Wanbao Xu
|
|
|
|
-
|
|
|
-
|
|
|
Yu Xing Liu
|
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-executive Directors
|
|
|
|
|
|
|
|
|
|
Gareth Edwards (resigned on 28
April 2022)
|
|
|
|
-
|
|
|
45,000
|
|
|
Shaun Carew-Wootton
|
|
|
|
48,000
|
|
|
48,000
|
|
|
John Treacy (appointed on 19 May
2022)
|
|
|
|
24,000
|
|
|
4,667
|
|
|
Total
|
|
|
|
72,000
|
|
|
97,667
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Included within trade and other payables is
£41,667 (2022: £29,667), which relates to unpaid directors'
remuneration.
10. TAXATION
The Company is incorporated
in the Cayman Islands, and its activities are subject to taxation
at a rate of 0%.
11. 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 31/07/2023
£
|
Year Ended 31/07/2022
£
|
|
Loss attributable to ordinary
shareholders (£)
|
(297,677)
|
(294,632)
|
|
Weighted average number of
shares
|
24,671,350
|
24,671,350
|
|
Loss per share (expressed as pence per
share)
|
(1.2)
|
(1.2)
|
|
|
|
|
12. CASH AND CASH
EQUIVALENTS
|
|
31/07/2023
|
|
31/07/2022
|
|
|
£
|
|
£
|
|
Cash at bank
|
302,807
|
|
568,921
|
|
|
|
|
13. TRADE AND OTHER
PAYABLES
|
|
31/07/2023
|
|
31/07/2022
|
|
|
£
|
|
£
|
|
Trade and other
payables
|
321,018
|
|
277,601
|
|
Director's current
account
|
34,327
|
|
34,327
|
|
Total
|
355,345
|
|
311,928
|
14. SHARE
CAPITAL
|
|
|
Number
|
Nominal
Value
£
|
|
|
|
|
|
|
|
Authorised
|
|
|
|
|
Ordinary shares of £0.01
each
|
1,000,000,000
|
10,000,000
|
|
|
|
|
|
|
|
Issued and fully paid
|
24,671,350
|
246,714
|
|
|
|
|
|
|
|
As at 31 July 2022 and 31 July
2023
|
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.
15. RESERVES
|
|
|
Accummulated
Losses
£
|
|
|
|
|
|
|
|
|
|
|
At 31 July 2022
|
(2,213,300)
|
|
|
|
|
|
|
Loss for the year
|
(297,677)
|
|
|
|
|
|
|
At 31 July 2023
|
(2,510,977)
|
Share capital represents the nominal value of the issued share
capital.
Share premium represents the credited difference in price between
the par value, or face value of shares, and the total
value a company received for issued shares.
Accumulated losses represents accumulated comprehensive losses for
the period.
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 2023 consisted of Ordinary Shares and equity
attributable to the shareholders of the Company, totalling
£(11,371) (2022: £286,306) (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
During the year the directors paid
business expenses on behalf of the company totalling £nil (2022:
£34,327). As at the balance sheet date the amount of £34,327 (2022:
£34,327) was owed by the company to the director.
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.