Envoy Bidco Limited
Annual Report and Financial Statements
For the period ended 31 December 2023
Company registration number 14953413 (England and Wales)
Envoy Bidco Limited
Company Information
Directors
M Wingham
(Appointed 11 August 2023)
H Hyldahn
(Appointed 11 August 2023)
J L Poulson
(Appointed 22 June 2023)
H A Mordhorst
(Appointed 22 June 2023)
K N Gregory
(Appointed 22 June 2023)
Company number
14953413
Registered office
Suite 1, 7th Floor
50 Broadway
London
United Kingdom
SW1H 0DB
Auditor
Moore Kingston Smith LLP
6th Floor
9 Appold Street
London
EC2A 2AP
Business address
Suite 1, 7th Floor
50 Broadway
London
United Kingdom
SW1H 0DB
Envoy Bidco Limited
Contents
Page
Strategic report
1 - 3
Directors' report
4 - 5
Independent auditor's report
6 - 9
Group statement of comprehensive income
10
Group statement of financial position
11 - 12
Parent company statement of financial position
13
Group statement of changes in equity
14
Parent company statement of changes in equity
15
Group statement of cash flows
16
Parent company statement of cash flows
17
Notes to the financial statements
18 - 42
Envoy Bidco Limited
Strategic Report
For the period ended 31 December 2023
Page 1

The directors present the strategic report for the period ended 31 December 2023.

Business Performance

Envoy Bidco Limited was incorporated on 22 June 2023 and subsequently acquired the whole of the issued share capital of ShipServ Limited on 11 August 2023. Envoy Bidco is 100% owned by Marcura Envoy Holding Limited, a Dubai based company.

 

The Marcura group is based in Dubai, with Marcura Envoy Holding Limited being 100% owned by Marcura Equities Limited, the main Holding company for all Marcura trading entities.

 

ShipServ operates through wholly owned subsidiaries in the Philippines, Denmark, the United Kingdom, Singapore, and the USA. Most of the operational headcount is based in Manila, with product development resources based mainly in the UK. All other offices are sales offices, supporting local markets.

 

The business continues to invest in new hires to support business growth plans with permanent headcount being 121 at the end of the year. We anticipate the headcount increasing by 10-20 heads in 2024 as we continue to invest in the business to accelerate product development and support initiatives that deliver value to customers. The cost base is well controlled, any investment will be carefully managed to ensure that the business continues to deliver profitable growth.

 

Whilst these financial statements only include the post-acquisition trading results of the ShipServ group, the underlying business continues to grow strongly, with 8,000+ vessels transacting on the platform in any given month, and the value of transactions processed via the platform, Gross Merchandisable Value (GMV), increasing by 9.1% year on year to $5.6bn.

 

Increased transaction volumes have helped to deliver year on year revenue growth of 8.9%. The focus of the business going forward is to provide added functionality and features to the platform.

 

Exceptional costs of $4,856k were incurred during the period, in relation to the acquisition of ShipServ Limited and its subsidiaries. Excluding these one-off costs, the Envoy Bidco Group made an operating profit of $582k and continues to trade profitably. The Marcura Group and the Board are focused on ensuring that sufficient investment is maintained in the ShipServ team, its services portfolio and its customers to support its growth agenda.

 

Employee numbers

Male

Female

Directors of the company

2

-

Directors of subsidiary companies not included in above

-

2

Total senior managers other than directors of the company

10

4

Other employees of the group     

62

41

Total employees

74

47

Envoy Bidco Limited
Strategic Report (Continued)
For the period ended 31 December 2023
Page 2
Key performance indicators

Whilst the annual budget is the main process for setting high level trading expectations for the year, there are a number of financial and operational KPIs that are used to track performance. Four key KPIs tracked by Management and the Board are:

 

 

We continue to see growth across these key KPIs.

 

As a technology business operating in a highly competitive market, it is essential that ShipServ continues to deliver a high quality, reliable service to its customers, whilst also looking to develop innovative additional services that serve our customer’s needs. The ability for organisations to use new technologies such as Artificial Intelligence (AI) to deliver efficiency gains is a significant opportunity for the business. As a leading maritime specialist technology company ShipServ consider themselves to be well positioned to make use of new technologies and to incorporate such technologies into future business plans.

Strategic Management

ShipServ is the leading e-procurement platform dedicated to the maritime economy. The size of ShipServ means that it is unique in the global reach that it can offer to its customers.

 

The business has historically been heavily dependent upon large ship owners and ship managers buyers and the transaction volume that they bring to the platform. The strategy for the business is to continue to strengthen the value proposition for both buyers and suppliers through a combination of value-added services and the provision of data insights, with the aim of driving product adoption and hence the value of transactions being traded on the platform.

 

Being part of the Marcura Group creates cross-selling opportunities for both ShipServ and Marcura, with both businesses leveraging off of the strong customer relationships that have been established over a number of years. Being part of a larger Group also provides the opportunity for ShipServ to consider future acquisitions more actively, where it makes sense to do so to accelerate the roll-out of new features and functionality to our customers.

Business Environment

The business is dependent upon the continued growth of International maritime trade. We continue to see strong year on year increases in the value of trade transacted via the ShipServ platform, however there is not guarantee that this growth will continue.

 

Whilst the Directors are aware of the risks to the business relating to general economic conditions and the maritime industry in particular, the business has shown itself to be resilient to short-term downturns and continues to grow both revenue and profitability.

 

As a technology platform ShipServ does not have a direct risk of physical loss from disruption caused by events such as the wars currently being experienced in Gaza and Ukraine. As a global business, there is however the potential for ShipServ performance to be impacted by anything that causes a slowdown across the global maritime industry. Management continues to monitor trading levels and do not currently foresee any material risk to trading performance.

Envoy Bidco Limited
Strategic Report (Continued)
For the period ended 31 December 2023
Page 3

On behalf of the board

H Hyldahn
Director
24 June 2024
Envoy Bidco Limited
Directors' Report
For the period ended 31 December 2023
Page 4

The directors present their annual report and financial statements for the period ended 31 December 2023.

Principal activities

The principal activity of the Group during the year continued to be the provision of a procurement platform tailored to the maritime economy. ShipServ provides workflow automation that unlocks significant transaction efficiencies for both buyers and suppliers, supported by in-house marine procurement experts.

Results and dividends

The results for the period are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Directors

The directors who held office during the period and up to the date of signature of the financial statements were as follows:

M Wingham
(Appointed 11 August 2023)
H Hyldahn
(Appointed 11 August 2023)
J L Poulson
(Appointed 22 June 2023)
H A Mordhorst
(Appointed 22 June 2023)
K N Gregory
(Appointed 22 June 2023)
Auditor

Moore Kingston Smith LLP were appointed as auditor and will be deemed to be reappointed under section 487(2) of the Companies Act 2006.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the group and parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. Under company law 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, International Accounting Standard 1 requires that directors:

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. 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.

Envoy Bidco Limited
Directors' Report (Continued)
For the period ended 31 December 2023
Page 5
Statement of disclosure to auditor

Each director in office at the date of approval of this annual report confirms that:

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

Disclosure in the strategic report

The group has chosen, in accordance with the Companies Act 2006 s.414C(11) to set out in the Strategic Report information required by the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 Sch 7 to be contained in the Directors' Report. The matters covered are financial risk management and exposure and future developments.

On behalf of the board
H Hyldahn
Director
24 June 2024
Envoy Bidco Limited
Independent Auditor's Report
To the Members of Envoy Bidco Limited
Page 6
Opinion

We have audited the financial statements of Envoy Bidco Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the period ended 31 December 2023 which comprise the Group Statement of Comprehensive Income, the Group and Company Statement Of Financial Position, the Group and Company Statement of Changes in Equity, the Group and Company Statement of Cash Flows and the Group and Company notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards.

In our opinion:

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 are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating 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.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Envoy Bidco Limited
Independent Auditor's Report (Continued)
To the Members of Envoy Bidco Limited
Page 7

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 annual report. 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

 

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, 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 parent 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 parent company or to cease operations, or have no realistic alternative but to do so.

Envoy Bidco Limited
Independent Auditor's Report (Continued)
To the Members of Envoy Bidco Limited
Page 8
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.

 

As part of an audit in accordance with ISAs (UK) we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

 

 

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

 

Envoy Bidco Limited
Independent Auditor's Report (Continued)
To the Members of Envoy Bidco Limited
Page 9

Explanation as to what extent the audit was considered 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.

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed risks of material misstatement due to fraud, through designing and implementing appropriate responses to those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during the audit. However, the primary responsibility for the prevention and detection of fraud rests with both management and those charged with governance of the company.

Our approach was as follows:

 

 

There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, 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 or intentional misrepresentations, or through collusion.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. 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.

Katherine Edwards (Senior Statutory Auditor)
for and on behalf of Moore Kingston Smith LLP
25 June 2024
Chartered Accountants
Statutory Auditor
6th Floor
9 Appold Street
London
EC2A 2AP
Envoy Bidco Limited
Group Statement of Comprehensive Income
For the period ended 31 December 2023
Page 10
Period
ended
31 December
2023
Notes
$
Revenue
4
6,200,329
Cost of sales
(662,913)
Gross profit
5,537,416
Other operating income
3,010
Administrative expenses
(4,958,821)
Exceptional items
5
(4,856,676)
Operating loss
6
(4,275,071)
Investment revenues
10
23
Finance costs
11
(3,589,825)
Loss before taxation
(7,864,873)
Income tax expense
12
(61,613)
Loss and total comprehensive income for the period
(7,926,486)
Profit for the financial period is all attributable to the owners of the parent company.
Total comprehensive income for the period is all attributable to the owners of the parent company.
Envoy Bidco Limited
Group Statement Of Financial Position
As at 31 December 2023
Page 11
2023
Notes
$
ASSETS
Non-current assets
Goodwill
13
39,560,724
Intangible assets
13
33,030,222
Property, plant and equipment
14
112,376
Deferred tax asset
28
4,907,809
77,611,131
Current assets
Contract assets
17
200,781
Trade and other receivables
18
8,259,627
Cash and cash equivalents
2,235,346
10,695,754
Total assets
88,306,885
EQUITY
Called up share capital
30
1
Retained earnings
(7,926,486)
Equity attributable to owners of the parent company
(7,926,485)
LIABILITIES
Non-current liabilities
Borrowings
22
76,894,729
Deferred tax liabilities
28
8,540,000
Retirement benefit obligations
29
260,227
85,694,956
Current liabilities
Trade and other payables
26
5,782,906
Contract liabilities
17
4,657,004
Current tax liabilities
98,504
10,538,414
Total liabilities
96,233,370
Total equity and liabilities
88,306,885
Envoy Bidco Limited
Group Statement Of Financial Position (Continued)
As at 31 December 2023
Page 12
The financial statements were approved by the board of directors and authorised for issue on 24 June 2024 and are signed on its behalf by:
H  Hyldahn
Director
Company registration number 14953413 (England and Wales)
Envoy Bidco Limited
Company Statement Of Financial Position
As at 31 December 2023
31 December 2023
Page 13
2023
Notes
$
ASSETS
Non-current assets
Investments
15
75,050,549
Current assets
Trade and other receivables
19
4,385,223
Cash and cash equivalents
228,341
4,613,564
Total assets
79,664,113
EQUITY
Called up share capital
1
Retained earnings
(6,869,186)
Total equity
(6,869,185)
LIABILITIES
Non-current liabilities
Borrowings
76,894,729
Current liabilities
Trade and other payables
27
9,638,569
Total liabilities
86,533,298
Total equity and liabilities
79,664,113

As permitted by s408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s loss for the year was $6,869,186.

The financial statements were approved by the board of directors and authorised for issue on ......................... and are signed on its behalf by:
H  Hyldahn
Director
Company registration number 14953413 (England and Wales)
Envoy Bidco Limited
Group Statement of Changes in Equity
For the period ended 31 December 2023
Page 14
Share capital
Retained earnings
Total
Notes
$
$
$
Balance at 22 June 2023
-
-
-
Period ended 31 December 2023:
Loss and total comprehensive income for the period
-
(7,926,486)
(7,926,486)
Issue of share capital
30
1
-
1
Balance at 31 December 2023
1
(7,926,486)
(7,926,485)
Envoy Bidco Limited
Company Statement of Changes in Equity
For the period ended 31 December 2023
Page 15
Share capital
Retained earnings
Total
Notes
$
$
$
Balance at 22 June 2023
-
-
-
Period ended 31 December 2023:
Loss and total comprehensive income for the year
-
(6,869,186)
(6,869,186)
Transactions with owners in their capacity as owners:
Issue of share capital
1
-
1
Balance at 31 December 2023
1
(6,869,186)
(6,869,185)
Envoy Bidco Limited
Group Statement of Cash Flows
For the period ended 31 December 2023
Page 16
2023
Notes
$
$
Cash flows from operating activities
Cash absorbed by operations
36
(4,535,138)
Income taxes paid
(184,272)
Net cash outflow from operating activities
(4,719,410)
Investing activities
Purchase of property, plant and equipment
(5,338)
Purchase of subsidiaries, net of cash acquired
(69,934,659)
Interest received
23
Net cash used in investing activities
(69,939,974)
Financing activities
Proceeds from issue of shares
1
Proceeds from borrowings
76,894,729
Net cash generated from/(used in) financing activities
76,894,730
Net increase in cash and cash equivalents
2,235,346
Cash and cash equivalents at beginning of period
-
0
Cash and cash equivalents at end of period
2,235,346
Envoy Bidco Limited
Company Statement of Cash Flows
For the period ended 31 December 2023
Page 17
2023
Notes
$
$
Cash flows from operating activities
Cash absorbed by operations
37
(1,615,840)
Net cash outflow from operating activities
(1,615,840)
Investing activities
Purchase of subsidiaries
(75,050,549)
Net cash used in investing activities
(75,050,549)
Financing activities
Proceeds from issue of shares
1
Proceeds from borrowings
76,894,729
Net cash generated from/(used in) financing activities
76,894,730
Net increase in cash and cash equivalents
228,341
Cash and cash equivalents at beginning of period
-
0
Cash and cash equivalents at end of period
228,341
Envoy Bidco Limited
Notes to the Group Financial Statements
For the period ended 31 December 2023
Page 18
1
Accounting policies
Company information

Envoy Bidco Limited is a private company limited by shares incorporated in England and Wales. The registered office is Suite 1, 7th Floor, 50 Broadway, London, United Kingdom, SW1H 0DB. The company's principal activities and nature of its operations are disclosed in the directors' report.

 

The group consists of Envoy Bidco Limited and all of its subsidiaries.

1.1
Accounting convention

The financial statements have been prepared in accordance with United Kingdom adopted International Accounting Standards and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

The financial statements are prepared in US dollars, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest $.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Business combinations

The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.

 

Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Envoy Bidco Limited together with all entities controlled by the parent company (its subsidiaries).

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
Page 19
1.4
Going concern

The truegroup's subsidiary company, ShipServ Limited, continues to trade profitably and generate an operating cash flow surplus. Envoy Bidco Limited has loan interest obligations payable on the loan notes of $76,894,729 (see note 22) owed to a group company, Marcura Equities Limited, which is part of the group headed by Marcura Holdings Limited (Marcura). It is expected that the annual interest due will be around $9m. Interest is payable annually in arrears, either in cash or by issuing further loan notes to the value of the interest owed. The first interest repayment date is August 2024.

 

The directors have prepared cash flow forecasts which show that the group will be unlikely to have generated sufficient cashflow to satisfy the first interest payment due wholly in cash. The group is therefore reliant on the support of Marcura to enable it to meet its liabilities as they fall due. The directors have received confirmation that Marcura will provide financial support to the group headed by Envoy Bidco Limited on an ongoing basis as required and are confident that Marcura has sufficient resources to provide such support.

 

In light of this commitment, and having considered the trading performance of the group's subsidiary, ShipServ Limited, and Marcura, the directors have, at the time of approving the financial statements, a reasonable expectation that the group has adequate resources to continue in operational existence for at least 12 months from the date of approving the financial statements.

1.5
Revenue

Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of third parties. The company recognises revenue when it transfers control of a product or service to a customer.

 

The standard presents a model for the recognition of revenue from contracts with customers, which consists of the following five steps:

 

1. Identify the contract with the customer.

2. Identify separate performance obligations in the contract.

3. Determine the transaction price.

4. Allocate the transaction price to separate performance obligations.

5. Recognise revenue when the entity satisfies a performance obligation.

 

When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is recognised as interest income.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
Page 20

The Group engages in the provision of an e-procurement platform for shipping companies. Revenue

represents amounts receivable for i) term subscriptions, ii) advertising fees and iii) credits.

 

i) Term subscription income: relates to the use of the Company's e-procurement platform, from a basic

connection through to full integration. The Company recognises revenue over time because the

customer simultaneously receives and consumes the benefits of the services as the Company provides

the e-procurement platform and performs the agency service. Revenue from these arrangements is

recognised based on the price and terms specified in the agreement, net of discounts.

 

ii) Advertising fees: all customers are entitled to a basic company profile on the ShipServ website free of

charge. Income from advertising fee relates to enhanced profiles (premium profiles), banners and

spotlight features. The Company recognises the revenue over time because the customer

simultaneously receives and consumes the benefits of the enhanced advertising services. Revenue

from these arrangements is recognised based on the price and terms specific in the agreement, net of

discounts.

 

iii) Credits: can be pre-sold which allows customers to purchase credit to be used at a later date at a

discount or customers can purchase pay-per-use credits. For both, revenue is recognised when used at

a point in time.

 

The Group generates its intercompany revenue through the recharge of applicable costs incurred on behalf of the Group.

1.6
Dividend income
Dividend income is recognised on an accruals basis where the right to receive a payment is established.
1.7
Goodwill

Goodwill represents the difference between amounts paid on the cost of a business combination and the acquirer's interest in the fair value of the Groups' share of its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at historic cost less accumulated impairment losses.

 

The gain on a bargain purchase is recognised in profit or loss in the period of the acquisition.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not subsequently reversed.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
Page 21
1.8
Intangible assets other than goodwill

Intangible assets acquired separately from a business are recognised at cost and are subsequently measured at cost less accumulated amortisation and accumulated impairment losses.

 

Intangible assets acquired on business combinations are recognised separately from goodwill at the acquisition date where it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity and the fair value of the asset can be measured reliably; the intangible asset arises from contractual or other legal rights; and the intangible asset is separable from the entity.

 

Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

 

1.9
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Computer equipment and software
30% on cost

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

1.10
Non-current investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the group holds a long-term interest and has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.11
Impairment of tangible and intangible assets

At each reporting end date, the group reviews the carrying amounts of it's non-financial assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
Page 22

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.12
Fair value measurement
IFRS 13 establishes a single source of guidance for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS when fair value is required or permitted. The resulting calculations under IFRS 13 affected the principles that the company uses to assess the fair value, but the assessment of fair value under IFRS 13 has not materially changed the fair values recognised or disclosed. IFRS 13 mainly impacts the disclosures of the company. It requires specific disclosures about fair value measurements and disclosures of fair values, some of which replace existing disclosure requirements in other standards.
1.13
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, and other short-term liquid investments with original maturities of three months or less, and are shown net of bank overdrafts where the company has the right of offset.

1.14
Financial assets

All recognised financial assets are required to be measured at amortised cost or fair value on the basis of the Company’s business model for managing the financial assets and the contractual cash flow characteristics of the assets.

 

Amounts receivable which comprise trade and other receivables are carried at amortised cost less impairments.

Impairment of financial assets

A loss allowance is recognised on initial recognition of financial assets held at amortised cost, based on expected credit losses, and is remeasured annually with changes appearing in profit or loss. For assets with a maturity of 12 months or less, including trade receivables, the 12-month expected loss allowance is equal to the lifetime expected loss allowance.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
Page 23
1.15
Financial liabilities

Amounts payable which comprise trade and other payables are carried at amortised cost.

1.16
Equity instruments

Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.

1.17
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.18
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
1
Accounting policies
(Continued)
Page 24
1.19
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

The cost of providing benefits under defined benefit plans is determined separately for each plan using the projected unit credit method, and is based on actuarial advice.

 

The change in the net defined benefit liability arising from employee service during the year is recognised as an employee cost. The cost of plan introductions, benefit changes, settlements and curtailments are recognised as an expense in measuring profit or loss in the period in which they arise.

The net interest element is determined by multiplying the net defined benefit liability by the discount rate, taking into account any changes in the net defined benefit liability during the period as a result of contribution and benefit payments. The net interest is recognised in profit or loss as other finance revenue or cost.

 

Remeasurement changes comprise actuarial gains and losses, the effect of the asset ceiling and the return on the net defined benefit liability excluding amounts included in net interest. These are recognised immediately in other comprehensive income in the period in which they occur and are not reclassified to profit and loss in subsequent periods.

The net defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information, and in the case of quoted securities is the published bid price. The value of a net pension benefit asset is limited to the amount that may be recovered either through reduced contributions or agreed refunds from the scheme.

1.20
Foreign exchange
Transactions in foreign currencies are translated to the Group's functional currencies at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in the foreign currencies at the balance sheet date are retranslated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in the income statement. Non-monetary assets and liabilities are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of transaction.
1.21

Exceptional items

The company defines exceptional items as those items which, by their size or nature, are separately disclosed in order to give a full understanding of the company’s financial performance and aid comparability of the company’s results between periods.

2
Adoption of new and revised standards and changes in accounting policies

The company has applied the following amendments for the first time for the financial period commencing 1 January 2023. The amendments listed below did not have any impact on the amounts recognised in prior periods and are not expected to significantly affect the current or future periods.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
2
Adoption of new and revised standards and changes in accounting policies
(Continued)
Page 25
Standards which are in issue but not yet effective

At the date of authorisation of these financial statements, the following standards and interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

Amendments to IAS 1
Non-current liabilities with covenants and classification of liabilities as current or non-current
Amendment to IFRS 16
Lease liability in a sale and leaseback
Amendments to IAS 7 and IFRS 7
Supplier finance arrangements
IFRS S1 and IFRS S2
General requirements for disclosure of sustainability-related financial information and climate-related disclosures
Amendments to IAS 21
Lack of exchangeability
Amendments to IFRS 10 and IAS 28
Sale or contribution of assets between an investor and its associate or joint venture

The above amended standards are not expected to impact the company as they are either not relevant to the company's activities or require accounting which is consistent with the company's current accounting policies.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 26
3
Critical accounting estimates and judgements

In the application of the Group’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Critical judgements
Asset impairment

The Group reviews its non-current assets for impairment whenever events or changes in circumstances indicate that the carrying value may not be recoverable. In order to assess whether such assets may be impaired, the directors carry out a review of the underlying economic value of the assets in normal market conditions. This includes looking at the estimated cash flows attributable to the asset and applying appropriate sensitivities to consider the impact of any movements.

 

Any changes in the residual value and estimated lives of intangible fixed assets (including goodwill) and tangible fixed assets would result in adjustments to the current and future rate of amortisation and depreciation through profit or loss.

Deferred tax asset

One of the group's subsidiaries has substantial prior period taxable losses brought forward. The group reviews the company's historic performance and future forecasts to consider the ability to realise a deferred tax asset in respect of these assets. Following the restructuring of that company, no further significant exceptional costs are expected to be incurred and trading forecasts indicate that there will be future taxable profits against which the deferred tax asset can be offset hence the directors have made the decision to recognise the deferred tax asset.

4
Revenue
2023
$
Revenue analysed by class of business
Term subscriptions
3,668,929
Advertising fees
318,110
Transaction credits
2,213,290
6,200,329
Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
4
Revenue
(Continued)
Page 27
2023
$
Revenue analysed by geographical market
UK
211,261
Americas
1,037,094
APAC
2,146,608
EMEA
2,805,366
6,200,329
5
Exceptional items
2023
$
Expenditure
Restructuring costs
4,856,676

The exceptional items comprise of costs incurred in relation to the acquisition of Shipserv Limited and its subsidiaries. The costs represent corporate finance expenditure, advice on restructuring the group and one-off staff bonuses.

6
Operating profit
2023
Operating loss for the period is stated after charging/(crediting):
$
Exchange losses
28,259
Depreciation of property, plant and equipment
21,333
Amortisation of intangible assets (included within administrative expenses)
1,129,778
7
Auditor's remuneration
2023
Fees payable to the company's auditor and associates:
$
For audit services
Audit of the financial statements of the group and company
45,200
Audit of the financial statements of the company's subsidiaries
60,480
105,680
For other services
Tax services
12,100
Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 28
8
Employees

The average monthly number of persons (including directors) employed by the group during the period was:

2023
Number
Finance
7
Operations
104
Sales
10
Total
121

Their aggregate remuneration comprised:

2023
$
Wages and salaries
2,478,004
Social security costs
66,603
Pension costs
136,620
2,681,227
9
Directors' remuneration
2023
$
Remuneration for qualifying services
260,998
Company pension contributions to defined contribution schemes
17,783
278,781
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2.
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
$
Remuneration for qualifying services
187,987
Company pension contributions to defined contribution schemes
6,267
Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 29
10
Investment income
2023
$
Interest income
Financial instruments measured at amortised cost:
Bank deposits
23
11
Finance costs
2023
$
Other interest payable
3,589,825
12
Income tax expense
2023
$
Current tax
Foreign taxes and reliefs
106,825
106,825
Deferred tax
Benefit arising from a previously unrecognised tax loss, tax credit or temporary difference
(45,212)
Total tax charge
61,613

The charge for the period can be reconciled to the loss per the income statement as follows:

2023
$
Loss before taxation
(7,864,873)
Expected tax credit based on a corporation tax rate of 25.00%
(1,966,218)
Effect of expenses not deductible in determining taxable profit
1,042,313
Unutilised tax losses carried forward
882,571
Permanent capital allowances in excess of depreciation
(698)
Effect of overseas tax rates
(1,805)
Other tax adjustments as a result of acquisition
105,450
Taxation charge for the period
61,613
Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 30
13
Intangible assets
Goodwill
Customer Relations
Technology
Marketing
Total
$
$
$
$
$
Cost
Additions - internally generated
-
0
21,520,000
8,340,000
4,300,000
34,160,000
Additions - purchased
39,560,724
-
0
-
0
-
0
39,560,724
At 31 December 2023
39,560,724
21,520,000
8,340,000
4,300,000
73,720,724
Amortisation and impairment
Charge for the year
-
0
478,222
556,000
95,556
1,129,778
At 31 December 2023
-
0
478,222
556,000
95,556
1,129,778
Carrying amount
At 31 December 2023
39,560,724
21,041,778
7,784,000
4,204,444
72,590,946
Impairment tests for cash generating units

Goodwill is tested annually for impairment or more frequently if indications that the value of goodwill may have been impaired. The directors consider that there is one cash generating unit, being ShipServ Limited, as this is the entity which generates all customer revenue.

2023
$
Shipserv Limited
39,560,724
39,560,724

The goodwill recorded above was created on the 100% acquisition of ShipServ Limited, effective 11 August 2023.

 

The group tests whether goodwill has suffered any impairment on an annual basis. For the 2023 reporting period the recoverable amount of the cash generating unit was determined based on value-in-use calculations.

 

The calculations use cash flow projections for a 7 year period covering 2023 to 2030. Of these 7 years, the first 5 years are based upon financial forecasts approved by management. The remaining 2 years are based on the high level assumption that the group will be able to generate year on year incremental cashflow of +10%.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 31
14
Property, plant and equipment
Computer, equipment and software
$
Cost
At 22 June 2023
-
0
Additions
5,330
Business combinations
128,379
At 31 December 2023
133,709
Accumulated depreciation and impairment
At 22 June 2023
-
0
Charge for the period
21,333
At 31 December 2023
21,333
Carrying amount
At 31 December 2023
112,376
15
Investments - Company
Current
Non-current
2023
2023
$
$
Investments in subsidiaries
-
0
75,050,549
Fair value of financial assets carried at amortised cost
The directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.
Investment in subsidiary undertakings

Details of the company's principal operating subsidiaries are included below.

16
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Indirect
Shipserv Limited
United Kingdom
Ordinary shares
100.00
-
Shipserv America, Inc.
USA
Ordianry shares
-
100.00
Shipserv Singapore Pte Limited
Singapore
Ordianry shares
-
100.00
Shipserv CI Philippines Inc.
Philippines
Ordinary shares
-
100.00
Shipserv ApS
Denmark
Ordianry shares
-
100.00
Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 32
17
Contracts with customers
2023
Period end
$
Contracts in progress
Contract assets
200,781
Contract liabilities
(4,657,004)
Analysis of contract assets
2023
$
Subscription accrued revenue
135,100
Credits accrued revenue
65,681
200,781
Analysis of contract liabilities
2023
$
Subscription deferred revenue
3,713,701
Credits deferred revenue
943,303
4,657,004
18
Trade and other receivables
2023
$
Trade receivables
2,897,773
Provision for bad and doubtful debts
(262,818)
2,634,955
VAT recoverable
197,728
Amount owed by parent undertaking
4,937,735
Other receivables
153,856
Prepayments
335,353
8,259,627
Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 33
19
Trade and other receivables - Company
2023
$
VAT recoverable
179,172
Amount owed by parent undertaking
4,206,051
4,385,223
20
Credit risk

Cash deposits and financial transactions give rise to credit risk in the event that counter parties fail to perform under the contract. The Group regularly monitors the credit ratings of its counter parties and controls the amount of credit risk by adhering to limits set by the board. At 31 December 2023 there are no counterparties which represent more than five percent of trade receivables. As a consequence of these controls, the probability of material loss is considered to be at an acceptable level.

The carrying amount of financial assets recorded in the financial statements, which is net of impairment losses, represents the group's maximum exposure to credit risk.

The group does not hold any collateral or other credit enhancements to cover this credit risk.

21
Trade receivables - credit risk

No significant receivable balances are impaired at the reporting end date.

 

Financial assets and liabilities at amortised cost or FVPL.

Movement in the allowances for doubtful debts
2023
$
Additional allowance recognised
262,818
Balance at 31 December 2023
262,818
22
Borrowings - Group and Company
Non-current
2023
$
Borrowings held at amortised cost:
Other loans
76,894,729

The borrowing consists of $76,894,729 of unsecured redeemable loan notes held by group member Marcura Equities Ltd. Interest at a floating rate is payable in arrears on an annual basis. The first interest repayment date is 11 August 2024. Interest can be paid in cash or settled by the issuing of PIK Notes in principal amounts equal to the amount of interest due.

 

The loan notes and any issued PIK notes are due for repayment in 2029.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 34
23
Fair value of financial liabilities

The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.

24
Liquidity risk

The following table details the remaining contractual maturity for the group's financial liabilities with agreed repayment periods. The contractual maturity is based on the earliest date on which the group may be required to pay.

Carrying value
Contractual cash flows
Under 1 year
1 – 5 years
5+ years
$
$
$
$
$
At 31 December 2023
Trade and other payables
5,782,906
-
5,782,906
-
-
Borrowings
76,894,729
-
-
-
76,894,729
82,677,635
-
5,782,906
-
76,894,729
Liquidity risk management

Responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Group's funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

25
Market risk
Market risk management

The Group is exposed primarily to the financial risks of changes in foreign currency exchange rates and interest rates.

 

Cash flow interest rate risk is the risk that future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair value interest rate risk is the risk that the value of a financial instrument will fluctuate due to changes in market interest rates.

 

Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to changes in foreign exchange rates. The Group is exposed to currency risk since it carries out international operations and owns subsidiaries in the United Kingdom, Denmark, Singapore, the Philippines and the U.S.A. which all operate using multiple currencies.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
25
Market risk
(Continued)
Page 35
Foreign exchange risk

The carrying amounts of the group's foreign currency denominated monetary assets and liabilities at the reporting date are as follows:

Assets
Liabilities
2023
2023
$
$
U.S. Dollar
8,819,404
9,708
Euros
861,961
1,564
Pounds Sterling
416,931
1,027,664
Danish Krone
170,832
67,697
10,269,128
1,106,633

As at 31 December 2023, had the exchange rate between the U.S. Dollar and the Euro or Pound Sterling increased or decreased by 5 per cent with all other variable held constant, the impact of the decrease or increase respectively in equity would be minimal for the Group.

Interest rate risk

The carrying amounts of financial instruments which expose the group to cash flow interest rate risk are as follows:

2023
$
Cash and cash equivalents
2,235,346
Loan notes
76,894,729
74,659,383

For the cash and cash equivalents, as at 31 December 2023, should yields have increased/decreased by 100 basis points with all other variables remaining constant, the impact on the decrease or increase respectively in net equity of the Group would be minimal.

 

The loan notes above are subject to a variable rate of interest. Every 1% movement in interest rates will result in increased or decreased amounts of interest payable of $0.7m per year. Management have considered the potential impact of interest rate movements when preparing these financial statements on a going concern basis.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 36
26
Trade and other payables
2023
$
Trade payables
112,564
Accruals
5,162,596
Social security and other taxation
449,750
Other payables
57,996
5,782,906

Current    

                                

Due to the short term nature of these payables the carrying value equates to the contractual amount due as the impact of discounting is not considered material.

27
Trade and other payables - Company
2023
$
Trade payables
15,503
Amounts owed to subsidiary undertakings
5,875,780
Accruals
3,747,286
9,638,569
28
Deferred taxation
2023
$
Deferred tax liabilities
8,540,000
Deferred tax assets
(4,907,809)
3,632,191
Deferred tax assets are expected to be recovered after more than one year, were acquired on the purchase of one of the Group's subsidiaries and represent available tax losses in that subsidiary.
Deferred tax liabilities arise as a result of the recognition of intangible assets as a result of the company's acquisition of ShipServ Limited in the period.
Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 37
29
Retirement benefit schemes
2023
Defined contribution schemes
$
Charge to profit or loss in respect of defined contribution schemes
125,998

The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

Defined benefit scheme

ShipServ Cl Philippines Inc, one of the group's subsidiaries, has an unfunded defined benefit plan for qualifying employees. Under the plan, qualifying employees are entitled to retirement benefits equal to 100% of the equivalent of 22.5 days of their final salary for every year of qualifying service on attainment of either the retirement age of 60 or 15 years of service, whichever is earlier.

 

The company has obtained an actuarial valuation at 31 December 2023.

 

The amounts presented in the financial statements are as follows:

2023
Key assumptions
%
Discount rate
7.60
Salary growth rate
3.00
2023

Movements in the fair value of net defined benefit liability:

$
Balance at acquisition
245,842
Accrual in the period
19,208
Provision for retirement benefits
14,855
Exchange differences
(19,678)
At 31 December 2023
260,227

Of the total expenses for the period, $nil is included in cost of sales, $14,385 in administrative expenses, $nil in investment income and $nil in finance costs.

30
Share capital
2023
2023
Ordinary share capital
Number
$
Issued and fully paid
Ordinary share capital of $1 each
1
1

The company issued 1 ordinary share at par on acquisition.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 38
31
Reserves

The components of the group's equity can be described as follows:

 

 

32
Acquisition of a business

On 11 August 2023 the whole of the issued capital of Shipserv Limited was acquired, obtaining control of the group headed by Shipserv Limited.

Book Value
Adjustments
Fair Value
Net assets of business acquired
$
$
$
Intangible assets
-
34,160,000
34,160,000
Property, plant and equipment
128,371
-
128,371
Trade and other receivables
2,736,286
-
2,736,286
Cash and cash equivalents
10,107,963
-
10,107,963
Trade and other payables
(7,797,220)
-
(7,797,220)
Provisions
(165,560)
-
(165,560)
Deferred tax
4,859,985
(8,540,000)
(3,680,015)
Total identifiable net assets
9,869,825
25,620,000
35,489,825
Non-controlling interests
-
Goodwill
39,560,724
Total consideration
75,050,549
The consideration was satisfied by:
$
Loan notes
75,050,549
Net cash outflow arising on acquisition
$
Cash consideration
75,050,549
Less: Cash and cash equivalents acquired
(10,107,963)
64,942,586
Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
32
Acquisition of a business
(Continued)
Page 39
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
$
Revenue
6,200,329
Loss after tax
(4,923,557)
Had the group been in existence for the year, the revenue and loss for the year for the reporting period would be:
$
Revenue
18,633,239
Loss after tax
(8,063,193)

The goodwill arising on acquisition of the business is attributable to the anticipated profitability of the business and the future operating synergies from the combination. The goodwill is not expected to be deductible for income tax purposes.

 

Under the agreement for the acquisition, contingent consideration of $344,348 was payable should a further condition be met on or before 31 January 2024. At the balance sheet date. the directors considered the likelihood of the contingent consideration being payable to be unlikely and therefore no such amount has been included in the Group's financial statements for the period ended 31 December 2023.

 

Subsequent to the period end, the condition was not met and hence no further consideration is payable.

33
Capital risk management

The group is not subject to any externally imposed capital requirements.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 40
34
Related party transactions

Group:

 

Envoy Bidco recharges included only operational costs. No costs in relation to the sale of ShipServ were re-charged to Shipserv Limited.

 

All subsidiary recharges occurred post acquisition in August 2023.

 

Envoy Bidco group has been charged $3,779,048 from Marcura group for interest and operational charges incurred on behalf of the group. As at 31 December 2023, $4,937,737 was owed by Marcura to the group. $3,589,825 was charged in respect annual interest charges arising on the loan notes.

 

Envoy Bidco group has been charged $189,223 by Marcura group for data and network charges incurred on behalf of the group. As at 31 December 2023, $18k was due to be paid to Marcura in respect of December charges.

 

Envoy Bidco group and company has outstanding loan notes from its parent company totalling $76,894,729. Please see note 22 for further details.

 

Company:

 

Envoy Bidco recharges included only operational costs. Envoy Bidco recharged $481,297 to Shipserv Limited during the period. No costs in relation to the purchase of ShipServ were re-charged to Shipserv Limited.

 

Envoy Bidco group has been charged $3,779,048 from Marcura group for interest and operational charges incurred on behalf of the group. As at 31 December 2023, $4,206,051 was owed by Marcura to Envoy Bidco.

 

$3,589,825 was charged in respect annual interest charges arising on the loan notes.

Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 41
35
Controlling party

The immediate parent company is is Marcura Envoy Holdings Limited, a company incorporated in UAE. The ultimate parent entity is Phides Holding Limited, a company incorporated in UAE.

 

The smallest entity preparing consolidated accounts is Marcura Envoy Holdings Limited. These accounts are available from Suite 63A, 15/F Gate Building Dubai International Financial Centre.

 

The largest entity preparing consolidated accounts is Phides Holding Limited. These accounts are available from Suite 63A, 15/F Gate Building Dubai International Financial Centre.

 

The ultimate controlling party is Christian Siemers Haunso by virtue of his 100% holding in Phides Holding Limited.

36
Cash absorbed by operations
2023
$
Loss for the period before income tax
(7,864,873)
Adjustments for:
Finance costs
3,589,825
Investment income
(23)
Amortisation and impairment of intangible assets
1,129,778
Depreciation and impairment of property, plant and equipment
21,333
Pension scheme non-cash movement
14,885
Increase in provisions
13,195
Movements in working capital:
Increase in trade and other receivables
(798,860)
Decrease in trade and other payables
(759,857)
Increase in contract liabilities
119,459
Cash absorbed by operations
(4,535,138)
Envoy Bidco Limited
Notes to the Group Financial Statements (Continued)
For the period ended 31 December 2023
Page 42
37
Cash absorbed by operations - Company
2023
$
Loss for the year after tax
(6,869,186)
Adjustments for:
Finance costs
3,589,825
Movements in working capital:
Increase in trade and other receivables
(4,385,223)
Increase in trade and other payables
6,048,744
Cash absorbed by operations
(1,615,840)
38
Analysis of changes in net debt
22 June 2023
Cash flows
31 December 2023
$
$
$
Cash at bank and in hand
-
2,235,346
2,235,346
Borrowings excluding overdrafts
-
(76,894,729)
(76,894,729)
-
(74,659,383)
(74,659,383)
38
Analysis of changes in net debt - Company
22 June 2023
Cash flows
31 December 2023
$
$
$
Cash at bank and in hand
-
228,341
228,341
Borrowings excluding overdrafts
-
(76,894,729)
(76,894,729)
-
(76,666,388)
(76,666,388)
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