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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.
20 May 2025
Honye Financial Services Ltd
(the "Company" or "Honye")
Final Results for the year ended 31 July 2024
The Directors of Honye are pleased to announce the Company's audited final results for the year ended 31 July 2024. The Annual Report will be available on the Company's website: www.honyefinance.com.
The Directors accept responsibility for this announcement.
Further information:
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Honye Financial Services Ltd |
Shaun Carew-Wootton shaun@rosellecapital.com |
FINANCIAL AND OPERATIONAL SUMMARY
The loss for the year to 31 July 2024 was £439,290 (2023: £297,677). This primarily reflects the day-to-day administrative expenses and due diligence into prospective targets.
The loss per share was £0.0178 (2023: £0.012).
At 31 July 2024, the Company had cash of £94k (2023: £303k), 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. Should the Acquisition complete, it would constitute a Reverse Take Over ("RTO") under the Listing Rules.
The RTO project has experienced a number of delays, primarily caused by the delays from several investors. However, the due diligence process, negotiations of the various definitive agreements, and the preparation of the prospectus required for the RTO have progressed well. There remain a number of steps to be completed before finalising the acquisition and applying for the suspension of trading in the Company's shares to be lifted. Honye continues to take a cautious and disciplined approach to investments and the identification of suitable acquisition candidates. Operating costs remain low, and the Company's primary asset continues to be cash held in the bank. Due to delays in the acquisition transaction, the Company has incurred significant expenses, which has resulted in a depletion of its cash reserves. While operational overheads have been kept to a minimum, the majority of expenditures have been directed towards progressing the acquisition itself. To ensure the continuation of the acquisition process and cover operational costs, it became necessary for the Company to raise additional capital. The Company has undertaken a series of financing initiatives.
In March 2024, the Company signed a £275,000 loan note with Tang Investment No. 1 Ltd ("Tang"), which was subsequently cancelled in April 2025. In addition, the Company entered into an investment agreement for £1.5 million with Mr. Abdullah Alnuwaysir ("AA"). This investment represented the first stage of the parties' intention to develop a long-term partnership, which included the Company assisting in procuring Zoyo, and granting AA a white-label licence to use Zoyo's technology. Under the original agreement, upon receipt of the investment funds, the Company intended to loan £500,000 to Zoyo. After signing the Investment Agreement, the Company, Zoyo, and AA worked closely to finalise the delivery of investment funds. As part of these discussions, AA and Zoyo entered into a White-Label License Agreement (the "License Agreement"). Subsequently, the parties agreed to amend the original Investment Agreement to reduce the total investment amount from £1.5 million to £1.0 million in Honye, reallocating the £500,000 reduction as a technology setup fee under the License Agreement. Upon receipt, the £1.0 million investment will provide critical working capital support to the Company.
In addition to the above, the Company issued a Convertible Loan Note Instrument of up to £1.5 million on 4 April 2025, to provide additional working capital, particularly to facilitate the completion of the RTO transaction with Zoyo Group. To date, the first tranche of £500,000 of Convertible Loan Notes has been subscribed to by Ms. Gu Qian, an ultra-high-net-worth individual based in Asia. This funding has provided essential support for the remaining work involved in the acquisition process and helped cover operational expenses during this critical period.
Furthermore, the Company has entered into a Subscription Agreement with Mr. Weng Jianxiong (the "Investor"). Under the terms of the Subscription Agreement, Mr. Weng has agreed to subscribe for £2.5 million upon the completion of the RTO. In addition, the Subscription Agreement allows for the Investor to subscribe for Convertible Loan Notes, with the Company having executed such notes on 4 April 2025. This has further strengthened the Company's financial position.
Mr. Weng's subscription of £2.5 million, together with the £500,000 subscription for Convertible Loan Notes, represents a significant milestone in the Company's RTO. This strategic investment provides a strong financial foundation for the successful completion of the transaction. We are confident that this additional capital injection will enable us to complete the final steps of the RTO process and maintain sufficient working capital for operations over the next 12 months.
We appreciate that the RTO has been delayed longer than anyone would have wanted, however we are all now optimistic that the transaction now has the momentum and support to see it across the line.
Shaun Carew-Wootton
Non-Executive Chairman
19 May 2025
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 2023 to 31 July 2024.
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 2024.
Post balance sheet events
On 24 August 2024, the Company entered into an investment agreement with Mr Abdullah Alnuwaysir ("AA" ) who has agreed to invest £1,500,000 at a price of £0.405 per share. As part of the agreement, the Company assisted with procuring Zoyo Capital Limited ("Zoyo"), the Company's RTO target, granting the Investor a white-label license to use its technology. The License Agreement was signed between AA and ZOYO in August 2024. On 15 April 2025, The Company and AA agreed to amend the investment agreement to reduce the total investment amount from £1.5 million to £1.0 million, reallocating the £500,000 reduction as a technology setup fee under the License Agreement.
On 4 April 2025, the Company issued a Convertible Loan Note instrument of up to £1.5 million to provide additional working capital, particularly to facilitate the completion of the RTO. To date, the first tranche of £500,000 of Convertible Loan Notes has been subscribed to by Ms. Gu Qian.
On 9 April 2025, the Company has entered into a Subscription Agreement with Mr. Weng Jianxiong (the "Investor"). Under the terms of the Subscription Agreement, Mr. Weng has agreed to subscribe for £2.5 million upon the completion of the RTO. In addition, the Subscription Agreement allows for the Investor to subscribe for Convertible Loan Notes, with the Company having executed such notes on 4 April 2025. Mr. Weng's subscription of £2.5 million, together with a further £500,000 subscription for Convertible Loan Notes, represents a significant milestone in the Company's RTO of Zoyo Group.
Directors
The Directors of the Company who have served during the year and at the date of this report are:
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Director Name |
Role |
Date of Appointment/Resignation |
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Xu Wanbao |
Executive Director |
18 July 2018 |
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Shaun Carew-Wootton |
Independent non-Executive Director |
7 December 2018 |
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Liu Yu Xing |
Executive Director |
7 April 2020 |
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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 RPG Crouch Chapman LLP, 40 Gracechurch Street, London, EC3V 0BT.
By order of the board
By order of the board
Wanbao Xu
Executive Director
19 May 2025
CORPORATE GOVERNANCE REPORT
Introduction
The Board recognises the importance and value for the Company and its shareholders' 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 2024.
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 2024, throughout this financial year, the directors including the non-executive directors and the executive directors have convened frequently to support the Company's active financing efforts for the completion of the RTO.
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 maintain 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 inherit, 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 2024 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, which is planned to be in December 2025 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 practically after the meeting.
Shaun Carew-Wootton
Non-Executive Chairman
19 May 2025
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 maters 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
19 May 2025
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 2024 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 2024 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 2024. This is our first period of engagement covering the year to 31 July 2024. 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.
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 over the next 12 months is uncertain given that some of the funding raised to complete the RTO is contingent on the RTO completing. 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 sensitivity analysis on cash flow forecast to consider the available headroom under different reasonably possible scenarios.
· 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.
Our approach to the audit
The scope of our audit was the audit of the company for the year ended 31 July 2024. The 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.
Audit work to respond to the assessed risks was planned and performed directly by the engagement team which performed full scope audit procedures.
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.
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Key audit matter
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How the scope of our audit addressed the key audit matter
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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.
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Our work involved the following:
Obtained the list of expenses and agreed the total to the trial balance.
Selected a sample of expenses and: agreed the amount to supplier invoices. Obtained understanding of the nature of the expenses and evaluated whether the expense represented a genuine business cost of the Company in the period.
Agreed to the bank statements the payment of the invoices or traced to creditor/accrual listing for unpaid expenses. 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.
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2024 £ |
2023 £ |
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Materiality |
19,000 |
14,884 |
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Basis for determining materiality |
5% of loss before tax |
5% of loss before tax |
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Rationale or 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. |
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Performance materiality |
£14,000 at 75% of materiality |
£11,163 at 75% of materiality |
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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. |
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Reporting threshold
We agreed with the Board that we would report to them all individual audit differences in excess of £1,000.
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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 7 January 2025. 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.
Paul Randall FCA ( Senior Statutory Auditor)
For and on behalf of RPG Crouch Chapman LLP, Statutory Auditors
40 Gracechurch Street
London
United Kingdom EC3V 0BT
Date: 16 May 2025
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STATEMENT OF CHANGES IN EQUITY FOR THE
YEAR ENDED 31 JULY 2024
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Note |
Share capital |
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Share premium |
|
Accumulated Losses |
Total equity |
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|
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£ |
|
£ |
|
£ |
£ |
|
Balance as at 31 July 2022 |
|
246,714 |
|
2,252,892 |
|
(2,213,300) |
286,306 |
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the year |
|
- |
|
- |
|
(297,677) |
(297,677) |
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Balance as at 31 July 2023 |
|
246,714
|
|
2,252,892
|
|
(2,510,977)
|
(11,371)
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the financial year |
|
- |
|
- |
|
(439,290) |
(439,290) |
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Balance as at 31 July 2024 |
14 |
246,714 |
|
2,252,892 |
|
(2,950,267) |
(450,661) |
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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 JULY 2024
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|
|||
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Year Ended 31/07/2024 £ |
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Year Ended
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|||
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Cash flows from operating activities |
|
|
|
|||
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Loss before taxation |
(439,290) |
|
(297,677) |
|||
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Decrease/(increase) in receivables |
31,729 |
|
(11,854) |
|||
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Increase in payables |
203,173 |
|
43,417 |
|||
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Net cash used in operating activities |
(204,388) |
|
(266,114) |
|||
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Cash flows from financing activities |
|
|
|
|||
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Director's loan |
(4,135) |
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- |
|||
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Net cash generated from financing activities |
(4,135) |
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- |
|||
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Net decrease in cash and cash equivalents |
(208,523) |
|
(266,114) |
|||
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Cash and cash equivalents at beginning of the period |
302,807 |
|
568,921 |
|||
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Cash and cash equivalents at end of the year |
94,284 |
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302,807 |
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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
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 following amendments are effective for the period beginning 1 August 2024:
Non-current liabilities with covenants (Amendments to IAS 1); and
Leases on sale and leaseback (Amendments to IFRS 16).
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 European Union 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 delays in fundraising, which consequently delayed the RTO, in the context of the Company's operations and the market in which it operates.
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.
The Company has experienced a number of delays in fundraising, which was necessary to secure sufficient working capital to complete the RTO. On 28 March 2024, the Company issued a loan note instrument for £275,000, which was subscribed by Tang Investment No. 1 Limited ("Tang"); however, this was subsequently cancelled in April 2025. The Company also entered into an Investment Agreement with Mr. Abdullah Alnuwaysir for £1,500,000 as pre-RTO funding. However, due to strategic cooperation details involving the Middle East region, the funds were not received yet. In April 2025, the Company and the investor mutually agreed to amend the Investment Agreement. Under the revised terms, the original £1,500,000 investment in the Company was reduced to £1,000,000, with the £500,000 reduction reallocated as a technology setup fee under a white-label license agreement arranged between the investor and the RTO target company, Zoyo.
4 April 2025, the Company issued a Convertible Loan Note ("CLN") for up to £1,500,000, of which £500,000 was subscribed by Ms. Gu Qian. The Company has received the full proceeds from this subscription. This funding has alleviated the Company's cash flow pressures and provided critical support for covering the remaining costs associated with the completion of the RTO. Furthermore, on 9 April 2025, the Company has entered into a Subscription Agreement with Mr. Weng Jianxiong (the "Investor"). Under the terms of the Subscription Agreement, Mr. Weng has agreed to subscribe for £2.5 million upon the completion of the RTO. In addition, the Subscription Agreement allows for the Investor to subscribe for Convertible Loan Notes, with the Company having executed such notes on 4 April 2025. This has provided additional assurance for the Company's funding needs.
Most of the funding in Mr Weng's subscription is contingent upon completion of the RTO. The timely completion of the RTO is critical to the Company's financial stability. Failure to finalize the transaction within the current financial year may result in funding constraints. However, if the company needs additional capital, it can draw a proportion of the cash from Mr Weng according to the CLN provision in his subscription agreement.
Directors have prepared cash flow forecasts that demonstrate funds available for the next 12 on the basis that the Directors and the consultant L&S Capital Limited have agreed to extend the fees repayment terms. If the currently proposed RTO does not happen, the Board recognizes 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 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
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The following remuneration was received by the Company's auditors: |
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Year ended 31/07/2024 |
Year ended 31/07/2023 |
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£ |
£ |
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Remuneration for the audit of the Company's financial statements |
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18,000 |
18,000 |
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Non-audit services |
- |
- |
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9. DIRECTORS' EMOLUMENTS
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Year Ended 31/07/2024 £
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|
|
Year Ended 31/07/2023 £ |
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|||||||
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Key management emoluments |
|
|
|
|
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|||||||
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Remuneration |
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211,000 |
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72,000 |
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The annual remuneration of the key management was as follows, with no other cash or non-cash benefits.
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Year Ended 31/07/2024 £ |
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Year Ended 31/07/2023 £ |
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Executive Directors |
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Wanbao Xu |
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- |
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- |
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Yu Xing Liu |
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- |
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- |
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Non-executive Directors |
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Shaun Carew-Wootton John Treacy |
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187,000 24,000 |
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48,000 24,000 |
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Total |
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211,000 |
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72,000 |
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Included within trade and other payables is £189,045 (2023: £41,667), 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.
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Year Ended 31/07/2024 £
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Year Ended 31/07/2023 £
|
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Loss attributable to ordinary shareholders (£) |
(439,290) |
(297,677) |
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Weighted average number of shares |
24,671,350 |
24,671,350 |
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Loss per share (expressed as pence per share) |
(1.8) |
(1.2) |
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|
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12. CASH AND CASH EQUIVALENTS
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31/07/2024 |
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31/07/2023 |
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£ |
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£ |
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Cash at bank |
94,284 |
|
302,807 |
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|
|
|
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13. TRADE AND OTHER PAYABLES
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31/07/2024 |
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31/07/2023 |
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£ |
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£ |
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Trade and other payables |
524,191 |
321,018 |
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Director's current account |
30,192 |
34,327 |
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Total |
554,383 |
355,345 |
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14. SHARE CAPITAL
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Number |
Nominal Value £ |
|
|
|
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|
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Authorised |
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|
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Ordinary shares of £0.01 each |
1,000,000,000 |
10,000,000 |
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Issued and fully paid |
24,671,350 |
246,714 |
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As at 31 July 2023 and 31 July 2024 |
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
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Accumulated Losses £ |
|
|
At 31 July 2023 |
(2,510,977) |
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Loss for the year |
(439,290) |
|
|
At 31 July 2024 |
(2,950,267) |
|
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.
16. SUBSEQUENT EVENTS
On 23 August 2024, the company announced that it has entered into an investment agreement with a professional financier and private investor based in Asia, Mr. Abdullah Alnuwaysir ("AA"). The Investor has agreed to invest £1,500,000 at a price of £0.405 per share (the "Investment Funds"), subscribing for 3,700,703 new ordinary shares (the "Investor Shares"). As part of this agreement, the Company agreed to assist in procuring its RTO target Zoyo, and granting AA an initial 12-month white-label licence to use Zoyo's technology. As a result, AA and Zoyo entered into a White-Label License Agreement. On 15 April 2025, the Company and AA agreed to amend the investment agreement and reduce the total investment amount from £1.5 million to £1.0 million, reallocating the £500,000 reduction as a technology setup fee under the License Agreement.
On 28 March 2024, the Company entered into a loan agreement with Tang Investment No 1 Limited (the "Tang"). The principal amount of the loan is £275,000 (the "Loan"). The Loan is unsecured with interest accruing on the principal at the rate of 6.25% per annum. The Loan is capable of repayment at the Company's option and has a maturity date of 5 April 2027.
Unfortunately, Tang has been unable to fund the Loan on the terms agreed and therefore, on 8 April 2025, the Company and Tang have mutually agreed to terminate this agreement. There is also no certainty that Tang will make a material investment in any equity fundraising to be carried out by the Company in connection with the RTO.
On 4 April 2025, the Company has issued a Convertible Loan Note instrument of up to £1.5 million which has a term of three years and interest at a rate of 6% per annum. To date, the first tranche of £500,000 of Convertible Loan Notes has been subscribed to by Ms. Gu Qian.
On 9 April 2025, the Company has entered into a Subscription Agreement with Mr. Weng Jianxiong (the "Investor"). Under the terms of the Subscription Agreement, Mr. Weng has agreed to subscribe for £2.5 million at £0.23 upon the completion of the RTO. In addition, the Subscription Agreement allows for the Investor to subscribe for Convertible Loan Notes, with the Company having executed such notes on 4 April 2025.
17. 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 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.
18. RELATED PARTY TRANSACTIONS
As at the balance sheet date the amount of £30,192 (2023: £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.
19. ULTIMATE CONTROLLING PARTY
There is no ultimate controlling party.