The directors present the strategic report for the period ended 31 December 2023.
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 |
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:
Total value of transactions traded on the platform - Gross Merchandisable Value (GMV)
Revenue growth
Number of active vessels
Number of paying suppliers
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.
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.
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.
On behalf of the board
The directors present their annual report and financial statements for the period ended 31 December 2023.
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.
The directors who held office during the period and up to the date of signature of the financial statements were as follows:
Moore Kingston Smith LLP were appointed as auditor and will be deemed to be reappointed under section 487(2) of the Companies Act 2006.
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:
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and
make an assessment of the company's ability to continue as a going concern.
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.
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.
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.
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.
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:
the information given in the Strategic Report and the Directors' Report for the financial period for which the financial statements are prepared is consistent with the financial statements; and
the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
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:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or
certain disclosures of directors' remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
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.
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:
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the limited liability partnership’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the members.
Conclude on the appropriateness of the members’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the limited liability partnership’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the limited liability partnership to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
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.
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:
We obtained an understanding of the legal and regulatory requirements applicable to the company and considered that the most significant are the Companies Act 2006, UK adopted international accounting standards, and UK taxation legislation.
We obtained an understanding of how the company complies with these requirements by discussions with management and those charged with governance.
We assessed the risk of material misstatement of the financial statements, including the risk of material misstatement due to fraud and how it might occur, by holding discussions with management and those charged with governance.
We inquired of management and those charged with governance as to any known instances of non-compliance or suspected non-compliance with laws and regulations.
Based on this understanding, we designed specific appropriate audit procedures to identify instances of non-compliance with laws and regulations. This included making enquiries of management and those charged with governance and obtaining additional corroborative evidence as required.
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.
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.
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.
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 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.
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.
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.
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.
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.
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.
Amounts payable which comprise trade and other payables are carried at amortised cost.
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.
The tax expense represents the sum of the tax currently payable and deferred tax.
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.
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.
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.
IFRS 17 Insurance contracts
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
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):
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.
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.
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.
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.
The average monthly number of persons (including directors) employed by the group during the period was:
Their aggregate remuneration comprised:
The charge for the period can be reconciled to the loss per the income statement as follows:
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.
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%.
Details of the company's principal operating subsidiaries are included below.
Details of the company's subsidiaries at 31 December 2023 are as follows:
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.
No significant receivable balances are impaired at the reporting end date.
Financial assets and liabilities at amortised cost or FVPL.
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.
The directors consider that the carrying amounts of financial liabilities carried at amortised cost in the financial statements approximate to their fair values.
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.
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.
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.
The carrying amounts of the group's foreign currency denominated monetary assets and liabilities at the reporting date are as follows:
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.
The carrying amounts of financial instruments which expose the group to cash flow interest rate risk are as follows:
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.
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.
Movements in the fair value of net defined benefit liability:
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.
The company issued 1 ordinary share at par on acquisition.
The components of the group's equity can be described as follows:
Share capital - The amount for the nominal value of share issued.
Retained losses - The retained losses reserve contains the net gains and losses recognised on the statement of comprehensive income.
On 11 August 2023 the whole of the issued capital of Shipserv Limited was acquired, obtaining control of the group headed by Shipserv Limited.
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.
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.