Honye Financial Services Ltd
("Honye" or the "Company")
Final Results for the year ended 31 July 2019
The Directors of Honye are pleased to announce the Company's audited final results for the year ended 31 July 2019.
The Annual Report will be available on the Company's new corporate website: www.honyefinance.com
The Directors accept responsibility for this announcement.
Honye Financial Services Ltd
Email: [email protected]
Peterhouse Capital Limited (sole broker)
Lucy Williams/Heena Karani
Tel: 020 7469 0930
The Company's financial statements have been extracted, without material change, from the Company's Annual Report.
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. The Company raised gross proceeds of approximately £2.5 million (net proceeds of approximately £2 million) by way of a subscription from its founding director and other investors and its Ordinary Shares were admitted to trading on the Official List of the London Stock Exchange (by way of a Standard Listing) ("Admission") on 7 December 2018.
The Company has been actively searching for and analysing potential acquisitions but has not, so far, found one which satisfies our criteria. Honye will continue to explore other possibilities and as news of our area of focus has become more widely known, potential opportunities are being brought to the Company's attention.
The fintech sector has continued to grow since Honye's Admission and with it the number of potential acquisition targets, your Board are committed to identifying a suitable reverse candidate before the second anniversary of Admission later this year.
As the Corona Virus continues to infect a greater part of the UK population every day its impact on the wider economy is hard to predict, but it is clear it will be profound. Honye is well placed as it is holding cash, having failed so far to find a suitable target for acquisition or investment. We would hope that as the future becomes more settled over the next few months more opportunities will present themselves and that after prolonged periods of working from home the Fintech world will become even more deeply embedded in everyone's day to day lives than before. We are optimistic but will approach any prospective companies to invest in or acquire with renewed caution.
23 March 2020
STATEMENT OF COMPREHENSIVE LOSS
25 April 2018 to
31 July 2019
Loss before taxation
Total comprehensive loss attributable to equity holders of the Company for the period
Loss per share - basic and diluted (£ per share)
STATEMENT OF FINANCIAL POSITION
AS AT 31 JULY 2019
31 July 2019
Cash and cash equivalents
Total current assets
Equity and liabilities
Capital and reserves
Trade and other payables
Total current liabilities
Total equity and liabilities
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 JULY 2019
Issue of shares on incorporation on 25 April 2018
Issue of shares during the period
Total comprehensive loss for the financial period
Balance at 31 July 2019
STATEMENT OF CASH FLOWS
25 April 2018 to
31 July 2019
Cash flows from operating activities
Loss before taxation
Increase in payables
Net cash used in operations
Cash flows from financing activities
Proceeds from issue of ordinary shares on incorporation
Proceeds from issue of ordinary shares
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the period
Cash and cash equivalents at end of the period
The accompanying notes form an integral part of these financial statements.
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 seek acquisition opportunities.
3. RECENT ACCOUNTING PRONOUNCEMENTS
(a) New interpretations and revised standards effective for the period ended 31 July 2019
The Company has adopted the new interpretations and revised standards effective for the period ended 31 July 2019. New standards impacting the Company that will be adopted in the annual financial statements for the period ended 31 July 2019, and which have given rise to changes in the Company's accounting policies are:
• IFRS 16 Leases
Effective 1 January 2019, IFRS 16 has replaced IAS 17 Leases and IFRIC 4 Determining whether an Arrangement Contains a Lease.
IFRS 16 provides a single lessee accounting model, requiring the recognition of assets and liabilities for all leases, together with options to exclude leases where the lease term is 12 months or less, or where the underlying asset is of low value. IFRS 16 substantially carries forward the lessor accounting in IAS 17, with the distinction between operating leases and finance leases being retained. As the Company does not have significant leasing activities acting as a lessee or lessor, the Directors do not anticipate any significant impact from the adoption of these new standards.
(b) Standards and interpretations in issue but not yet effective
There are a number of standards and interpretations which have been issued by the International Accounting Standards Board that are effective for periods beginning subsequent to 31 July 2019 that the Company has decided not to adopt early. The following amendments are effective for the period beginning 1 January 2020:
• IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors (Amendment - Definition of Material)
• IFRS 3 Business Combinations (Amendment - Definition of Business)
• Revised Conceptual Framework for Financial Reporting
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.
No comparative figures have been presented as the financial information covers the period from incorporation of the Company on 25 April 2018 to 31 July 2019.
A summary of the principal accounting policies of the Company are set out below.
b) Going concern
The Company meets its day-to-day working capital requirements through cash generated from the capital it has raised on admission to the London Stock Exchange and subsequently it has £1.8 million in cash as at 31 July 2019 which is sufficient for its present needs. The Company is likely to need to raise additional funds for planned acquisitions and this will likely be obtained through further transactions through the market.
Taking its cash position into account, the Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future and for a period of not less than 12 months from the date of signing the financial statements. Thus they continue to adopt the going concern basis of accounting in preparing the interim financial statements.
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.
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
The Company's financial liabilities include other payables and accruals. 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 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.
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.
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. DIRECTORS' EMOLUMENTS
7 December 2018 to 31 July 2019
The remuneration of the Directors was as follows, with no other cash or non-cash benefits.
The Company is incorporated in the Cayman Islands, and its activities are subject to taxation at a rate of 0%.
10. 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.
Period ended 31 July 2019
Loss attributable to ordinary shareholders (£)
Weighted average number of shares
11. CASH AND CASH EQUIVALENTS
As at 31 July 2019
Cash at bank
12. TRADE AND OTHER PAYABLES
As at 31 July 2019
13. SHARE CAPITAL
Ordinary shares of £0.01 each
Issued and fully paid
On Admission - 24,641,350 shares of £0.01 each
As at 31 July 2019
The Company was incorporated and registered in The Cayman Islands as a private company limited by shares on 25 April 2018. On incorporation, the Company had an authorised share capital of US$50,000 divided into 50,000 ordinary shares of a par value of US$1 each. This has been converted to Pounds Sterling (£) using the closing exchange rate £/US$ 1.39 on the date of incorporation on 25 April 2018.
Pursuant to special resolution passed on 29th November 2018, the Company resolved:
· to redenominate its share capital from US$ to GBP;
· to increase its authorised share capital to £10,000,000 divided into 1,000,000,000 Ordinary Shares (£0.01 each at Par value);
· a further 50,000 Ordinary Shares were issued for $50,000, the proceeds of which were used to buy back the 50,000 shares of US$1 each at Par value in connection with redenomination of share capital.
As at admission on 7 December 2018, £246,414 of Ordinary Shares in nominal value has been issued and fully paid (divided into 24,641,350 issued Ordinary Shares of £0.01 each at Par value).
All of the issued Ordinary Shares are in registered form and the Registrar is responsible for maintaining the Company's share register. There are no restrictions on the distribution of dividends and the repayment of capital.
The ISIN number of the Ordinary Shares is KYG4598W1024 and SEDOL number is BGR5JO2.
14. SUBSEQUENT EVENTS
There have been no material events that have occurred since the year end that require further disclosure.
15. CAPITAL MANAGEMENT
The Company actively manages the capital available to fund the Company, comprising equity and reserves. The Company's objectives when maintaining capital is to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders.
The capital structure of the Company as at 31 July 2019 consisted of Ordinary Shares and equity attributable to the shareholders of the Company, totalling £1,816,911 (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 debt.
16. RELATED PARTY TRANSACTIONS
The remuneration of the Directors, the key management personnel of the Company, is set out in note 8.
During the period, Mr Wanbao Xu, the Executive Director, paid a total of £114,135 of expenses on behalf of the company. This amount has been settled before 31 July 2019.
Fush Financial Investment Co Ltd, a company owned by Mr Wanbao Xu, is considered as a significant shareholder by holding 68.53% of the Ordinary shares as at 31 July 2019
17. ULTIMATE CONTROLLING PARTY
The ultimate controlling party of the Company is Mr Wanbao Xu.
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