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Registered number: 04328069









SOUTHCO MANUFACTURING LIMITED









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
SOUTHCO MANUFACTURING LIMITED
 
 
COMPANY INFORMATION


Directors
Philip Kempson 
Rosalind Spinage 
Isobel Gillott (resigned 1 August 2024)
Daniel Bush 




Registered number
04328069



Registered office
Touchpoint
Wainwright Road

Worcester

WR4 9FA




Independent auditors
Grant Thornton UK LLP

17th Floor, 103 Colmore Row

Birmingham

B3 3AG




Bankers
Bank of America
2 King Edward Street

London

EC1A 1HQ





 
SOUTHCO MANUFACTURING LIMITED
 

CONTENTS



Page
Strategic Report
1 - 2
Directors' Report
3 - 5
Independent Auditors' Report
6 - 10
Statement of Comprehensive Income
11
Statement of Financial Position
12 - 13
Statement of Changes in Equity
14 - 15
Statement of Cash Flows
16 - 17
Notes to the Financial Statements
18 - 46


 
SOUTHCO MANUFACTURING LIMITED
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The Directors present their strategic report for the year ended 31 December 2023.

Business review
 
The Company is a wholly owned subsidiary of Touchpoint Inc. which is incorporated in the United States of America, and operates as part of the group's European division.
The Company's principal activities are the manufacturing, sale and distribution of access hardware equipment predominantly in the European marketplace. 
The Directors are not aware, at the date of this report, of any likely major changes to the Company's activities in the next year.
The Statement of financial position in these financial statements shows the Company's financial position at the year
ended 31 December 2023. 

Principal risks and uncertainties
 
Business risk
Competitive pressure throughout Europe is an ongoing risk for the Company, which could result in it losing sales
to its key competitors. The Company manages this risk by providing value added products and services to its
customers taking full advantage of its global footprint and ability to address the needs of customers anywhere in
the world. The Company continues to maintain strong relationships with its customers and positions itself as the
innovation partner of choice.
While the company is not immune to the cost increases and inflationary pressures seen globally, the company has a solid customer base and is well positioned to absorb cost pressures and mitigate these where possible. The company continues to display solid performance in the first half of 2024.
Foreign currency risk
The vast majority of sales are made in Euros and operating costs are denominated in Sterling. Strategic currency trades are performed at a group level and the strategy is therefore to achieve an overall balance in buying and selling currencies across the group.
Credit risk
The Company’s principal financial assets are cash, trade and other debtors, and investments.
The Company’s credit risk is primarily attributable to its trade debtors. The amounts presented in the statement
of financial position are net of allowances for doubtful debtors.
The credit risk on liquid funds is limited because the counterparties are banks with high credit-ratings assigned
by international credit-rating agencies.
The Company has no significant concentration of credit risk, with exposure spread over a large number of
counterparties and customers.
Liquidity risk
In order to maintain liquidity to ensure sufficient funds are available for ongoing operations and future
developments, the Company balances the long term external debt with short term borrowings from the ultimate
parent undertaking, Touchpoint Inc.
At 31 December 2023, the Company’s trade creditors represented 20 days (2022: 24 days) of purchases for the
year. The Company manages this risk by ensuring cash is collected daily and purchases are paid weekly.
 

Page 1

 
SOUTHCO MANUFACTURING LIMITED
 

STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Financial key performance indicators
 

The following key performance indicators are presented for the full year:



2023
2022

Gross Profit Margin
36%
39%

Operating Profit Margin
1%
8%

Debtor Days
42
45

Creditor Days
20
24

Return on Total Assets
0.6%
10%

Section 172(1) Statement
 

The Directors have acted in the way that they considered, in good faith, would be most likely to promote the success of the Company for the benefit of its member as a whole and this section forms our Section 172 disclosure, describing how, in doing so, the Directors considered the matters set out in section 172(1)(a) to (f) of the Companies Act 2006. The Directors also took into account the views and interests of a wider set of stakeholders, including customers, suppliers, employees and Regulators.
  
The Directors have acted in a way that they considered, in good faith, to be most likely to promote the success of the Company for the benefit of its member as a whole, and in doing so had regard, amongst other matters, to: 
• the likely consequences of any decision in the long term; 
• the need to foster the Company’s business relationships with suppliers, customers and others; 
• the impact of the Company’s operations on the community and the environment; 
• the impact of the Company’s operations on the Company’s employees;
• the desirability of the Company maintaining a reputation for high standards of business conduct.
In addition, the Company exists within the wider TouchPoint Inc. Group and relationships with other Group companies including the Company’s shareholder, Southco International Inc. are key to the Company’s success.
 


This report was approved by the board on 2 September 2024 and signed on its behalf.



Rosalind Spinage
Director

Page 2

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

The Directors present their report and the financial statements for the year ended 31 December 2023.

Directors' responsibilities statement

The Directors are responsible for preparing the Strategic Report, the Directors' 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 financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland'). 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 and profit or loss of the Company for that period.

 In preparing these financial statements, the Directors are required to:


select suitable accounting policies and then apply them consistently;

make judgements and accounting estimates that are reasonable and prudent;

state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;

prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors are responsible for 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 2006They 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.

Qualifying third party indemnity provisions

For the full period and up to the date of the directors’ report being approved, a qualifying third party indemnity provision was in force during the financial year for the benefit of one or more of the directors of the company in accordance with the provisions of the Companies Act of 2006.

Principal activity

The Company’s principal activities are the manufacturing, sale and distribution of access hardware equipment predominantly in the European marketplace.

Going Concern

Following a review of forecasts, statement of comprehensive income and statement of financial position, the board is satisfied the Company has considerable financial resources together with contracts with a number of customers across Europe in many varied industries.

In addition to this the Company has access to a group revolving credit facility managed by the parent company, TouchPoint Inc. In August 2022, the parent company amended and restated the credit facility to increase it to $400 million and extend its expiration date to August 2027. A guarantee from Touchpoint Inc is obtained to cover any shortfall in Southco's cash position in the succeeding months to December 2024.

As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully.
 

Page 3

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Future Development

The directors anticipate the business environment will remain competitive. They believe that the company is in a good financial position and that the risks that have been identified are being well managed. With careful focus on existing markets and customers and development of new products, the directors are confident in the company's ability to maintain and build on this position. As in 2023, the company continues to be committed to research and development of new markets and product lines where this fits with strategic goals.

Results and dividends

The profit for the year, after taxation, amounted to £550,000 (2022 - £9,217,000).

A dividend of £Nil was paid in the year (2022 £Nil).

Directors

The Directors who served during the year and up to the date of this report were:

Philip Kempson 
Rosalind Spinage
Daniel Bush
 
Isobel Gillott (resigned 1 August 2024)


Employment policy

The Company is committed to eliminating discrimination amongst our workforce with the objective to create a working environment in which all individuals are able to make the best use of their skills, free from discrimination or harassment, where there is no unlawful discrimination and all decisions are based on merit. This also applies to applications for employment, and the Company is committed to giving full and fair consideration to opportunities for employment from disabled candidates. Equally, the Company is committed to training, career development and promotion of all individuals, and to make reasonable adjustments to accomodate those who are disabled or suffer some form of disablement while employed by the Company.

Greenhouse gas emissions, energy consumption and energy efficiency action

The Company's greenhouse gas emissions and energy consumption for the year are 634 tCO2e and 2,983 MWh (2022: 1,080 tCO2e and 5,309 MWh)  
Annual MWh per Average No. of FTE Employees  -- 10.68 MWh 
(2022: 17.70 MWh)
Annual tCO2e per Average No. of FTE Employees -- 2.26 tCO2e (2022: 3.60 tCO2e)

Energy consumption figures have been taken from suppliers' invoices based on actual consumption. Greenhouse gas emissions are based on actual fuel and energy consumption converted into carbon dioxide equivalents using the 2020  "UK Government Greenhouse Gas Conversion Factors for Company Reporting".

The company continues to explore energy efficiency improvement areas, including sourcing energy efficient replacement equipment where suitable. Additionally, reusable and/or recyclable packaging materials are used by the company and requested from suppliers.


Matters covered in the strategic report

Business review, principal risks and uncertainties facing the Company and key performance indicators have been included on Page 1 of the strategic report.

Page 4

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Disclosure of information to auditors

The Directors confirm that: 
 
so far as each director is aware, there is no relevant audit information of which the company’s auditor is unaware; and

the directors have taken all the steps that they ought to have taken as directors in order to make themselves aware of any relevant audit information and to establish that the company’s auditor is aware of that information.

Post balance sheet events

There have been no significant events affecting the Company since the year end.

Auditors

The auditorsGrant Thornton UK LLPwill be proposed for reappointment in accordance with section 485 of the Companies Act 2006.

This report was approved by the board on 2 September 2024 and signed on its behalf.
 





Rosalind Spinage
Director

Page 5

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOUTHCO MANUFACTURING LIMITED
 


Qualified Opinion

We have audited the financial statements of Southco Manufacturing Limited (the 'company') for the year ended 31 December 2023, which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard (FRS) 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (United Kingdom Generally Accepted Accounting Practice).

In our opinion, except for the effects of matter described in the basis for qualified opinion section of our report:

the financial statements give a true and fair view of the state of the company's affairs as at 31 December 2023 and of its profit for the year then ended;
the financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for qualified opinion

As explained in note 2.1 to the financial statements, the company has prepared individual accounts in accordance with section 394 of the Companies Act of 2006 and has not consolidated the financial information of its subsidiary undertakings, Southco Severn Limited, Southco Europe Limited, Southco Poland Sp zoo, Darshana Industries Private Limited and Southco Brasil Componentes Industrias Ltda, nor incorporated the results of its associates, Southco GmbH and Southco S.a.r.l. In our opinion, the company is required to prepare group accounts in accordance with section 399 of the Companies Act 2006 and to consolidate the financial information of its subsidiary undertakings in accordance with the requirements of FRS 102 section 9 'Consolidated and Separate Financial Statements' and to account for its associates in accordance with FRS 102 section 14 'Investments in Associates'. The effect on the financial statements of the failure to consolidate its subsidiary undertakings in accordance with FRS 102 section 9 and to account for its associates in accordance with FRS 102 section 14 has not been determined. In addition, the requirement of the company to prepare group financial statements and to consolidate the financial information of its subsidiary undertakings and to account for its associates is not reflected in the directors' report or the strategic report. In addition, were the company to have prepared group accounts, the strategic report and the directors’ report would also need to be amended. 

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 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 qualified opinion.

Conclusions relating to going concern

We are responsible for concluding on the appropriateness of the directors’ 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 company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify the auditor’s opinion. Our conclusions are based on the audit evidence obtained up to the date of our report. However, future events or conditions may cause the company to cease to continue as a going concern.
Page 6

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOUTHCO MANUFACTURING LIMITED
 


In our evaluation of the directors’ conclusions, we considered the inherent risks associated with the company's business model including effects arising from macro-economic uncertainties such as the cost of living crisis, we assessed and challenged the reasonableness of estimates made by the directors and the related disclosures and analysed how those risks might affect the company's financial resources or ability to continue operations over the going concern period.  

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 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 and financial statements, other than the financial statements and our auditor’s report thereon. The directors are responsible for the other information contained within the annual report and financial statements. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon.
 
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether there is 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.

As described in the basis for qualified opinion section of our report, our audit opinion is qualified for the failure of the company to prepare group financial statements and to consolidate the financial information of its subsidiary undertakings and to incorporate the results of its associates. This is not reflected in the directors’ report or the strategic report and accordingly we have concluded that the other information is materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

Except for the matter described in the basis for qualified opinion section of our report, in our opinion, based on the work undertaken in the course of the audit:

the information given in the strategic report and the directors’ report for the financial year 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.

Matter on which we are required to report under the Companies Act 2006

Except for the matter described in the basis for qualified opinion section of our report, in the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors’ report.
Page 7

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOUTHCO MANUFACTURING LIMITED
 


Matters on which we are required to report by exception

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, or returns adequate for our audit have not been received from branches not visited by us; or

the 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.

Responsibilities of directors

As explained more fully in the directors' responsibilities statement set out on page 3, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Auditor’s responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below: 

We identified UK-adopted international accounting standards, FRS 102, Companies Act 2006, Tax legislation, Employment Law, Health and Safety Act, Data Protection Act, Modern Slavery Act, Streamlined Energy and Carbon Reporting (SECR), UK Bribery Act and General Data Protection Regulation, as laws and regulations being of significance in the context of the entity:

We obtained an understanding of the legal and regulatory framework applicable to the entity and how the entity is complying with that framework through researching relevant laws and regulations within the industry in which the company operates in as well as including overarching company laws within their competitive environments;

We inquired with management to confirm whether there is any instances of noncompliance with laws and regulations. In addition to this, testing over a sample of legal and professional costs was completed to check that there were no indicators of potential additional liabilities;
Page 8

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOUTHCO MANUFACTURING LIMITED
 


We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur and the risk of management override of controls. Audit procedures performed by the engagement team included:

°Identifying and assessing the design and implementation of controls management has in place to prevent and detect fraud; 
°Identifying and testing journal entries, in particular journals with specific risk criteria; and
°Completion of audit procedures to conclude on the compliance of disclosures in the annual report and financial statements with applicable financial reporting requirements. 

These audit procedures were designed to provide reasonable assurance that the financial statements were free from fraud or error. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error and detecting irregularities that result from fraud is inherently more difficult than detecting those that result from error, as fraud may involve collusion, deliberate concealment, forgery or intentional misrepresentations. Also, the further removed non-compliance with laws and regulations is from events and transactions reflected in the financial statements, the less likely we would become aware of it;

The engagement partner's assessment of the appropriateness of the collective competence and capabilities of the engagement team included consideration of the engagement team's:

°understanding of, and practical experience with, audit engagements of a similar nature and complexity, through appropriate training and participation
°knowledge of the industry in which the client operates,

We communicated relevant laws and regulations and potential fraud risks to all engagement team members, including internal specialists, and remained alert to any indications of fraud or non-compliance with laws and regulations throughout the audit.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with 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.
Page 9

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOUTHCO MANUFACTURING LIMITED
 







Sreekanth Gaddamanugu 
Senior Statutory Auditor
for and on behalf of Grant Thornton UK LLP
Statutory Auditor, Chartered Accountants
Birmingham




2 September 2024
Page 10

 
SOUTHCO MANUFACTURING LIMITED
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£000
£000

  

Turnover
 4 
106,767
111,024

Cost of sales
  
(68,259)
(67,438)

Gross profit
  
38,508
43,586

Administrative expenses
  
(37,782)
(37,752)

Other operating income
 5 
282
3,947

Operating profit
 6 
1,008
9,781

Income from fixed assets investments
  
1,391
-

Interest receivable and similar income
 11 
3,428
3,606

Interest payable and similar expenses
 12 
(4,484)
(2,997)

Profit before tax
  
1,343
10,390

Tax on profit
 13 
(793)
(1,173)

Profit for the financial year
  
550
9,217

Other comprehensive income for the year
  

Actuarial gains on defined benefit pension scheme
  
(1,614)
1,024

Movement of deferred tax relating to pension deficit
  
404
(256)

Other comprehensive income for the year
  
(1,210)
768

  

Total comprehensive income for the year
  
(660)
9,985

The notes on pages 18 to 46 form part of these financial statements. All amounts relate to continuing activities.

Page 11

 
SOUTHCO MANUFACTURING LIMITED
REGISTERED NUMBER: 04328069

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£000
£000

Fixed assets
  

Intangible assets
 14 
2,086
2,790

Tangible assets
 15 
4,650
4,597

Investments
 16 
30,151
30,162

  
36,887
37,549

Current assets
  

Stocks
 17 
5,675
5,514

Debtors: amounts falling due after more than one year
 18 
1,188
1,062

Debtors: amounts falling due within one year
 18 
108,221
147,098

Cash at bank and in hand
 19 
274
260

  
115,358
153,934

Creditors: amounts falling due within one year
 20 
(27,450)
(57,466)

Net current assets
  
 
 
87,908
 
 
96,468

Total assets less current liabilities
  
124,795
134,017

Creditors: amounts falling due after more than one year
 21 
(26,690)
(36,317)

Provisions for liabilities
  

Provision for restructuring
 26 
-
(135)

  
 
 
-
 
 
(135)

Pension liability
  
(5,152)
(3,952)

Net assets
  
92,953
93,613


Capital and reserves
  

Called up share capital 
 27 
15,000
15,000

Profit and loss account
 28 
77,953
78,613

  
92,953
93,613


Page 12

 
SOUTHCO MANUFACTURING LIMITED
REGISTERED NUMBER: 04328069
    
STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023

The financial statements were approved and authorised for issue by the board and were signed on its behalf on 2 September 2024.




Rosalind Spinage
Director

The notes on pages 18 to 46 form part of these financial statements.

Page 13

 
SOUTHCO MANUFACTURING LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023


Called up share capital
Profit and loss account
Total equity

£000
£000
£000

At 1 January 2023
15,000
78,613
93,613


Comprehensive income for the year

Profit for the year

-
550
550

Actuarial losses on pension scheme
-
(1,614)
(1,614)

Deferred tax movements
-
404
404


Other comprehensive income for the year
-
(1,210)
(1,210)


Total comprehensive income for the year
-
(660)
(660)


At 31 December 2023
15,000
77,953
92,953


The notes on pages 18 to 46 form part of these financial statements.

Page 14

 
SOUTHCO MANUFACTURING LIMITED
 

STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2022


Called up share capital
Profit and loss account
Total equity

£000
£000
£000

At 1 January 2022
15,000
68,628
83,628


Comprehensive income for the year

Profit for the year

-
9,217
9,217

Actuarial losses on pension scheme
-
1,024
1,024

Deferred tax movements
-
(256)
(256)


Other comprehensive income for the year
-
768
768


Total comprehensive income for the year
-
9,985
9,985


At 31 December 2022
15,000
78,613
93,613


The notes on pages 18 to 46 form part of these financial statements.

Page 15

 
SOUTHCO MANUFACTURING LIMITED
 

STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
£000
£000

Cash flows from operating activities

Profit for the financial year
550
9,217

Adjustments for:

Amortisation of intangible assets
704
704

Depreciation of tangible assets
590
738

Loss on disposal of tangible assets
-
(3,742)

Net interest on defined benefit liability
799
543

Bank interest paid
1,980
675

Interest paid
1,705
1,779

Interest received
(3,428)
(3,606)

Taxation charge
793
1,173

(Increase)/decrease in stocks
(161)
318

Decrease in debtors
1,476
887

Decrease/(increase) in amounts owed by groups
30,439
(21,495)

(Decrease)/increase in creditors
(686)
398

(Decrease)/increase in amounts owed to groups
(30,127)
17,181

Increase in provisions
578
1,693

Increase/(decrease) in net pension assets/liabs
401
(2,041)

Corporation tax received/(paid)
2,632
(760)

Foreign exchange
2,087
(1,797)

Pension contributions paid
(586)
(571)

Net cash generated from operating activities

9,746
1,294


Cash flows from investing activities

Purchase of tangible fixed assets
(695)
(968)

Sale of tangible fixed assets
50
5,476

Purchase of fixed asset investments
11
(27,659)

Interest received
2,234
2,105

Net cash from investing activities

1,600
(21,046)

Cash flows from financing activities

New secured loans
-
45,572

Repayment of loans
(9,627)
(25,051)

Interest paid
(1,747)
(1,764)

Net cash used in financing activities
(11,374)
18,757

Net (decrease) in cash and cash equivalents
(28)
(995)
Page 16

 
SOUTHCO MANUFACTURING LIMITED
 

STATEMENT OF CASH FLOWS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023


2023
2022

£000
£000


Cash and cash equivalents at beginning of year
18
1,013

Cash and cash equivalents at the end of year
(10)
18


Cash and cash equivalents at the end of year comprise:

Cash at bank and in hand
274
260

Bank overdrafts
(284)
(242)

(10)
18


The notes on pages 18 to 46 form part of these financial statements.

Page 17

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Southco Manufacturing Limited is a private company limited by shares and incorporated in England and
Wales. Its registered office is located at Touchpoint, Wainwright Road, Worcester, WR4 9FA.
The principal activity is the manufacturing, sale and distribution of access hardware equipment
predominantly in the European marketplace.

2.Accounting policies

 
2.1

Basis of preparation of financial statements

The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
 
The company has prepared individual accounts in accordance with section 394 of the Companies Act 2006 and has not consolidated the financial information of its subsidiary undertakings, Southco Severn Limited, Southco Europe Limited, Southco Poland Sp zoo and Southco Brasil Componentes Industrias Ltda, nor incorporated the results of its associates, Southco GmbH and Southco S.a.r.l. The company is required to prepare group accounts in accordance with section 399 of the Companies Act 2006 and to consolidate the financial information of its subsidiary undertakings in accordance with the requirements of FRS 102 section 9 'Consolidated and Separate Financial Statements' and to account for its associates in accordance with FRS 102 section 14 'Investments in Associates', but has not done so. As such, the financial statements provide information about the company only and not about its group.

The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).

The following principal accounting policies have been applied:

 
2.2

Going concern

After making enquiries, including the review of forecasts, statement of comprehensive income and statement of financial position, the board is satisfied the Company has considerable financial
resources together with contracts with a number of customers across Europe in many varied
industries. These forecasts extend to December 2024, and have considered reasonable deteriorations in revenue, as well as costs shocks.
In addition to this the Company has access to a group revolving credit facility managed by the parent company, TouchPoint Inc. As a consequence, the Directors believe that the Company is well placed to manage its business risks successfully. In August 2022, the parent company amended and restated the credit facility to increase it to $400M and extend its expiration date to August 2027. A guarantee from Touchpoint Inc is obtained to cover any shortfall in Southco's cash position in the succeeding months to December 2025. As of 31 December 2023, the Company was in compliance with all related financial covenants. As per company forecasts at date of signing, it is expected that all covenants will be complied with in the succeeding months to December 2025.
The Directors have a reasonable expectation that the Company has adequate resources to continue
in operational existence for the foreseeable future. Accordingly, they continue to adopt the going
concern basis in preparing the annual report and accounts.

Page 18

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.3

Foreign currency translation

Functional and presentation currency

The Company's functional and presentational currency is GBP.

Transactions and balances

Foreign currency transactions are translated into the functional currency using the spot exchange rates at the dates of the transactions.

At each period end foreign currency monetary items are translated using the closing rate. Non-monetary items measured at historical cost are translated using the exchange rate at the date of the transaction and non-monetary items measured at fair value are measured using the exchange rate when fair value was determined.

Foreign exchange gains and losses resulting from the settlement of transactions and from the translation at period-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income except when deferred in other comprehensive income as qualifying cash flow hedges.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the Statement of Comprehensive Income within 'finance income or costs'. All other foreign exchange gains and losses are presented in the Statement of Comprehensive Income within 'other operating income'.

Page 19

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Revenue

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Company and the revenue can be reliably measured. Revenue is measured as the fair value of the consideration received or receivable, excluding discounts, rebates, value added tax and other sales taxes. The following criteria must also be met before revenue is recognised:

Sale of goods

Revenue from the sale of goods is recognised when all of the following conditions are satisfied:
the Company has transferred the significant risks and rewards of ownership to the buyer, i.e. on despatch or delivery to the customer depending on incoterms;
the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold;
the amount of revenue can be measured reliably;
it is probable that the Company will receive the consideration due under the transaction; and
the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Revenue for sale of goods is recognised upon shipment, product being ready for delivery, or on delivery of the product to the customer, based on specific contract terms.

Tooling services policy

Revenue from tooling services is recognised when the molds are ready for use in the manufacturing process and are approved by the customer. 


 
2.5

Operating leases: the Company as lessee

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the lease term.

Benefits received and receivable as an incentive to sign an operating lease are recognised on a straight line basis over the lease term, unless another systematic basis is representative of the time pattern of the lessee's benefit from the use of the leased asset.

 
2.6

Interest income

Interest income is recognised in the Statement of Comprehensive Income using the effective interest method.

  
2.7

Other income

Other income is recognised in the Statement of Comprehensive Income in the year in which it is accrued.

Page 20

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.8

Finance costs

Finance costs are charged to the Statement of Comprehensive Income over the term of the debt using the effective interest method so that the amount charged is at a constant rate on the carrying amount. Issue costs are initially recognised as a reduction in the proceeds of the associated capital instrument.

 
2.9

Borrowing costs

All borrowing costs are recognised in the Statement of Comprehensive Income in the year in which they are incurred.

Page 21

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.10

Pensions

Defined contribution pension plan

The Company operates a defined contribution plan for its employees. A defined contribution plan is a pension plan under which the Company pays fixed contributions into a separate entity. Once the contributions have been paid the Company has no further payment obligations.

The contributions are recognised as an expense in the Statement of Comprehensive Income when they fall due. Amounts not paid are shown in accruals as a liability in the Statement of Financial Position. The assets of the plan are held separately from the Company in independently administered funds.

Defined benefit pension plan

The Company operates a defined benefit plan for certain employees. A defined benefit plan defines the pension benefit that the employee will receive on retirement, usually dependent upon several factors including but not limited to age, length of service and remuneration. A defined benefit plan is a pension plan that is not a defined contribution plan.

The liability recognised in the Statement of Financial Position in respect of the defined benefit plan is the present value of the defined benefit obligation at the end of the reporting date less the fair value of plan assets at the reporting date (if any) out of which the obligations are to be settled.

The defined benefit obligation is calculated using the projected unit credit method. Annually the company engages independent actuaries to calculate the obligation. The present value is determined by discounting the estimated future payments using market yields on high quality corporate bonds that are denominated in sterling and that have terms approximating to the estimated period of the future payments ('discount rate').

The fair value of plan assets is measured in accordance with the FRS 102 fair value hierarchy and in accordance with the Company's policy for similarly held assets. This includes the use of appropriate valuation techniques.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to other comprehensive income. These amounts together with the return on plan assets, less amounts included in net interest, are disclosed as 'Remeasurement of net defined benefit liability'.

The cost of the defined benefit plan, recognised in the Statement of Comprehensive Income as employee costs, except where included in the cost of an asset, comprises:

a) the increase in net pension benefit liability arising from employee service during the period; and

b) the cost of plan introductions, benefit changes, curtailments and settlements.

The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is recognised in the Statement of Comprehensive Income as a 'finance expense'.

Page 22

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.11

Current and deferred taxation

The tax expense for the year comprises current and deferred tax. Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.

The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the reporting date in the countries where the Company operates and generates income.

Deferred tax balances are recognised in respect of all timing differences that have originated but not reversed by the Statement of Financial Position date, except that:
The recognition of deferred tax assets is limited to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits; and
Any deferred tax balances are reversed if and when all conditions for retaining associated tax allowances have been met.

Deferred tax balances are not recognised in respect of permanent differences except in respect of business combinations, when deferred tax is recognised on the differences between the fair values of assets acquired and the future tax deductions available for them and the differences between the fair values of liabilities acquired and the amount that will be assessed for tax. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the reporting date.

 
2.12

Intangible assets

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 its identifiable assets and liabilities of the acquiree at the date of acquisition. Subsequent to initial recognition, goodwill is measured at cost less accumulated amortisation and accumulated impairment losses. Goodwill is amortised on a straight line basis to the Statement of Comprehensive Income over its useful economic life.

Other intangible assets

Intangible assets are initially recognised at cost. After recognition, under the cost model, intangible assets are measured at cost less any accumulated amortisation and any accumulated impairment losses.

All intangible assets are considered to have a finite useful life, set to be 10 years for Trademarks and Patents, and 20 years for Goodwill and Customer Lists.

 
2.13

Tangible fixed assets

Tangible fixed assets under the cost model are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Historical cost includes expenditure that is directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management.

Page 23

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.13
Tangible fixed assets (continued)

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimated useful lives, using the straight-line method.

Depreciation is provided on the following basis:

Freehold property
-
15 years
Plant and machinery
-
3 - 8 years
Motor vehicles
-
4 years
Fixtures and fittings
-
4 - 8 years
Computer equipment
-
3 years

The assets' residual values, useful lives and depreciation methods are reviewed, and adjusted prospectively if appropriate, or if there is an indication of a significant change since the last reporting date.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognised in profit or loss.

 
2.14

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

 
2.15

Stocks

Stocks are stated at the lower of cost and net realisable value, being the estimated selling price less costs to complete and sell. Cost is based on the cost of purchase on a first in, first out basis. Work in progress and finished goods include labour and attributable overheads.

At each reporting date, stocks are assessed for impairment. If stock is impaired, the carrying amount is reduced to its selling price less costs to complete and sell. The impairment loss is recognised immediately in profit or loss.

 
2.16

Debtors

Short term debtors are measured at transaction price, less any impairment. Loans receivable are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method, less any impairment.

 
2.17

Cash and cash equivalents

Cash is represented by cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours. Cash equivalents are highly liquid investments that mature in no more than three months from the date of acquisition and that are readily convertible to known amounts of cash with insignificant risk of change in value.

In the Statement of Cash Flows, cash and cash equivalents are shown net of bank overdrafts that are repayable on demand and form an integral part of the Company's cash management.

Page 24

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.18

Creditors

Short term creditors are measured at the transaction price. Other financial liabilities, including bank loans, are measured initially at fair value, net of transaction costs, and are measured subsequently at amortised cost using the effective interest method.

 
2.19

Provisions for liabilities

Provisions are made where an event has taken place that gives the Company a legal or constructive obligation that probably requires settlement by a transfer of economic benefit, and a reliable estimate can be made of the amount of the obligation.
Provisions are charged as an expense to profit or loss in the year that the Company becomes aware of the obligation, and are measured at the best estimate at the Statement of Financial Position date of the expenditure required to settle the obligation, taking into account relevant risks and uncertainties.
When payments are eventually made, they are charged to the provision carried in the Statement of Financial Position.

 
2.20

Financial instruments

The Company only enters into basic financial instrument transactions that result in the recognition of financial assets and liabilities like trade and other debtors and creditors, loans from banks and other third parties, loans to related parties and investments in ordinary shares.

Debt instruments (other than those wholly repayable or receivable within one year), including loans and other accounts receivable and payable, are initially measured at present value of the future cash flows and subsequently at amortised cost using the effective interest method. Debt instruments that are payable or receivable within one year, typically trade debtors and creditors, are measured, initially and subsequently, at the undiscounted amount of the cash or other consideration expected to be paid or received. However, if the arrangements of a short-term instrument constitute a financing transaction, like the payment of a trade debt deferred beyond normal business terms or in case of an out-right short-term loan that is not at market rate, the financial asset or liability is measured, initially at the present value of future cash flows discounted at a market rate of interest for a similar debt instrument and subsequently at amortised cost, unless it qualifies as a loan from a director in the case of a small company, or a public benefit entity concessionary loan.

Financial assets that are measured at cost and amortised cost are assessed at the end of each reporting period for objective evidence of impairment. If objective evidence of impairment is found, an impairment loss is recognised in the Statement of Comprehensive Income.

For financial assets measured at amortised cost, the impairment loss is measured as the difference between an asset's carrying amount and the present value of estimated cash flows discounted at the asset's original effective interest rate. If a financial asset has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract.

For financial assets measured at cost less impairment, the impairment loss is measured as the difference between an asset's carrying amount and best estimate of the recoverable amount, which is an approximation of the amount that the Company would receive for the asset if it were to be sold at the reporting date.

Page 25

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.20
Financial instruments (continued)

Financial assets and liabilities are offset and the net amount reported in the Statement of Financial Position when there is an enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

  





3.


Judgements in applying accounting policies and key sources of estimation uncertainty

Preparation of the financial statements requires management to make significant judgements and estimates. The areas where these judgements and estimates have been made include:
Defined benefit pension
The Company operates a defined benefit pension scheme for employees. The year end liability is based
on assumptions made by the actuary, which are reflected in the financial statements.


4.


Turnover

The whole of the turnover is attributable to the Company's principal activity.

Analysis of turnover by country of destination:

2023
2022
£000
£000

United Kingdom
11,227
15,833

Rest of Europe
83,243
81,954

Rest of the world
12,297
13,237

106,767
111,024



5.


Other operating income

2023
2022
£000
£000

Royalty receivable
282
205

Profit on disposal of tangible assets
-
3,742

282
3,947


Page 26

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Operating profit

The operating profit is stated after charging/(crediting):

2023
2022
£000
£000

Foreign exchange loss / (gain)
1,451
(1,797)

Other operating lease rentals
572
582


7.


Auditors' remuneration

2023
2022
£000
£000


Fees payable to the Company's auditor and its associates for the audit of the Company's annual financial statements, including expenses
112
70





8.


Employees

Staff costs, including Directors' remuneration, were as follows:


2023
2022
£000
£000

Wages and salaries
13,754
14,944

Social security costs
1,788
1,852

Cost of defined contribution scheme
894
1,211

Other staff costs
193
199

16,629
18,206


The average monthly number of employees, including the Directors, during the year was as follows:


        2023
        2022
            No.
            No.







Manufacturing
170
190



Engineering
35
37



Selling
46
41



Administrative
31
31

282
299

Page 27

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

9.


Directors' remuneration

2023
2022
£000
£000

Directors' emoluments
653
710

Company contributions to defined contribution pension schemes
41
39

694
749


During the year retirement benefits were accruing to 3 Directors (2022 - 3) in respect of defined contribution pension schemes.

The highest paid Director received remuneration of £374,000 (2022 - £452,000)

The value of the Company's contributions paid to a defined contribution pension scheme in respect of the highest paid Director amounted to £27,000 (2022 - £25,000)

The total accrued pension provision of the highest paid Director at 31 December 2023 amounted to £NIL (2022 - £NIL).

The amount of the accrued lump sum in respect of the highest paid Director at 31 December 2023 amounted to £NIL (2022 - £NIL).


10.


Income from investments

2023
2022
£000
£000





Dividends received from inter-company investments
(1,391)
-

(1,391)
-



11.


Interest receivable

2023
2022
£000
£000


Interest receivable from group companies
3,428
3,606

3,428
3,606

Page 28

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

12.


Interest payable and similar expenses

2023
2022
£000
£000


Bank interest payable
1,980
675

Loans from group undertakings
1,705
1,779

Net interest on pension liability
799
543

4,484
2,997


13.


Taxation


2023
2022
£000
£000

Corporation tax


Current tax on profits for the year
-
157

Adjustments in respect of previous periods
89
491


Foreign tax relief/other relief
-
(157)


Foreign tax suffered
429
157

Total current tax
518
648

Deferred tax


Origination and reversal of timing differences
235
397

Adjustment in respect of previous periods
40
3

Effect of changes in tax rates
-
125

Total deferred tax
275
525


Taxation on profit on ordinary activities
793
1,173
Page 29

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
13.Taxation (continued)


Factors affecting tax charge for the year

The tax assessed for the year is lower than (2022 - lower than) the standard rate of corporation tax in the UK of 25% (2022 - 19%). The differences are explained below:

2023
2022
£000
£000


Profit on ordinary activities before tax
1,343
10,390


Profit on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
316
1,974

Effects of:


Expenses not deductible
227
(406)

Effects of group relief/ other reliefs
32
(949)

Capital allowances for year in excess of depreciation
(327)
(64)

Adjustment from previous periods
128
493

Tax rate changes
-
125

Effect of overseas tax rates
443
-

Share options
(26)
-

Total tax charge for the year
793
1,173


Factors that may affect future tax charges

At the time of signing of the Directors' report, there were no proposed future changes to the rate of Corporation Tax. The Company continues to monitor legislation to remain informed of future changes to tax rates.

Page 30

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Intangible assets




Goodwill

£000



Cost


At 1 January 2023
14,916



At 31 December 2023

14,916



Amortisation


At 1 January 2023
12,126


Charge for the year
704



At 31 December 2023

12,830



Net book value



At 31 December 2023
2,086



At 31 December 2022
2,790



Page 31

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

15.


Tangible fixed assets





Freehold property
Plant and machinery
Fixtures and fittings
Computer equipment
Other fixed assets
Total

£000
£000
£000
£000
£000
£000



Cost or valuation


At 1 January 2023
7,120
11,135
287
6,288
235
25,065


Additions
-
-
-
-
695
695


Disposals
-
(94)
-
-
-
(94)


Transfers between classes
163
556
21
1
(741)
-



At 31 December 2023

7,283
11,597
308
6,289
189
25,666



Depreciation


At 1 January 2023
3,744
10,212
285
6,229
-
20,470


Charge for the year on owned assets
209
351
3
27
-
590


Disposals
-
(44)
-
-
-
(44)



At 31 December 2023

3,953
10,519
288
6,256
-
21,016



Net book value



At 31 December 2023
3,330
1,078
20
33
189
4,650



At 31 December 2022
3,376
923
2
59
235
4,595




The net book value of land and buildings may be further analysed as follows:


2023
2022
£000
£000

Freehold
3,330
3,376


Page 32

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

16.


Fixed asset investments





Investments in subsidiary companies

£000



Cost or valuation


At 1 January 2023
30,162


Transfers intra group
(11)



At 31 December 2023
30,151





Subsidiary undertakings


The following were subsidiary undertakings of the Company:

Name

Class of shares

Holding

Southco GmbH
Ordinary
37.2%
Southco Severn Ltd
Ordinary
100%
Southco Brasil Compenentes Industriais Ltda
Ordinary
100%
Southco Europe Limited
Ordinary
100%
Southco Poland Sp zoo
Ordinary
100%
Southco S.A.R.L
Ordinary
37.2%
Darshana Industries PVT Limited
Ordinary
99.96%

The aggregate of the share capital and reserves as at 31 December 2023 and the profit or loss for the year ended on that date for the subsidiary undertakings were as follows:

Name
Aggregate of share capital and reserves
Profit/(Loss)
£000
£000

Southco GmbH
10,769
417

Southco Severn Ltd
(5,448)
(40)

Southco Brasil Compenentes Industriais Ltda
7,613
403

Southco Europe Limited
-
-

Southco Poland Sp zoo
-
-

Southco S.A.R.L
1,758
(5)

Darshana Industries PVT Limited
26,975
1,869

Page 33

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

17.


Stocks

2023
2022
£000
£000

Raw materials and consumables
195
250

Work in progress (goods to be sold)
3,595
3,428

Finished goods and goods for resale
1,885
1,836

5,675
5,514


The carrying value of stocks are stated net of impairment losses / (gains) totalling £344,451 (2022 - £146,572.
Impairment losses / (gains) totalling £344,451 (2021 - £146,572) were recognised in the Statement of
Comprehensive Income.


18.


Debtors

2023
2022
£000
£000

Due after more than one year

Deferred tax asset
1,188
1,062

1,188
1,062


2023
2022
£000
£000

Due within one year

Trade debtors
12,239
13,715

Amounts owed by group undertakings
91,072
120,316

Other debtors
2,780
8,872

Prepayments and accrued income
312
613

Tax recoverable
1,818
3,582

108,221
147,098


A credit of £216,810 (2022: debit £85,302) was recognised in administration expenses against trade debtors during the year as a result of a decrease in the bad debt provision.
Amounts owed by group undertakings are unsecured, attract interest at 3.0% and are repayable on demand. 

Page 34

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

19.


Cash and cash equivalents

2023
2022
£000
£000

Cash at bank and in hand
274
260

Less: bank overdrafts
(284)
(242)

(10)
18



20.


Creditors: Amounts falling due within one year

2023
2022
£000
£000

Bank overdrafts
284
242

Trade creditors
3,789
4,475

Amounts owed to group undertakings
16,492
46,577

Accruals and deferred income
6,885
6,172

27,450
57,466


The bank overdraft is part of a facility available to the Touchpoint Inc. group and is secured by a floating charge over certain assets of that group.
Amounts owed to group undertakings are unsecured, attract interest at between 0 and 3% and are repayable on demand.
Accruals includes an amount of £2,849,444 payable in relation to the final of payment for the acquisition of Darshana Industries Pvt Ltd. Of this, £44,203 relates to an accrual for interest arising from the late payment.


21.


Creditors: Amounts falling due after more than one year

2023
2022
£000
£000

Loans
26,690
36,317

26,690
36,317


Secured loans
A bank loan bears interest at a variable rate which was linked to LIBOR in 2021, but has since moved to the Euro Short-Term Rate (ESTR).
The bank loan is part of a facility available to the Touchpoint Inc. group and is secured by a floating charge over certain assets of that group.

Page 35

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

22.


Loans


Analysis of the maturity of loans is given below:


2023
2022
£000
£000





Amounts falling due 1-2 years

Bank loan
26,690
36,317



26,690
36,317





23.
Analysis of net debt


At 1 January 2023
Cash flows
At 31 December 2023

£000
£000
£000

Cash at bank and in hand
260
14
274

Bank overdrafts
(242)
(42)
(284)

Debt due after 1 year
(36,317)
9,627
(26,690)

(36,299)
9,599
(26,700)

Page 36

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

24.


Financial instruments

2023
2022
£000
£000

Financial assets


Cash and cash equivalents
274
260

Financial assets measured at amortised cost
106,091
142,903

106,365
143,163


Financial liabilities


Financial liabilities measured at amortised cost
54,140
93,783


Cash and cash equivalents comprise cash in hand and deposits with financial institutions repayable without penalty on notice of not more than 24 hours.
Financial assets measured at amortised cost comprise trade debtors, other debtors, accrued income and amounts owed by group undertakings. 
Financial liabilities measured at amortised cost comprise bank loans and overdrafts, trade creditors, and amounts owed to group undertakings and accruals. 

Page 37

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

25.


Deferred taxation




2023
2022


£000

£000






At beginning of year
1,062
1,842


Credit to profit or loss
(275)
(524)


Credit to other comprehensive income
404
(256)



At end of year
1,191
1,062

The deferred tax asset is made up as follows:

2023
2022
£000
£000


Accelerated capital allowances
(251)
(159)

Other timing differences
1,425
1,219

R&D expenditure credit - step 2 amounts c/f
14
-

Other
2
2

1,190
1,062


26.


Provisions




Provision for restructuring

£000





At 1 January 2023
135


Utilised in year
(135)



At 31 December 2023
-



Page 38

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

27.


Share capital

2023
2022
£000
£000
Allotted, called up and fully paid



15,000,101 (2022 - 15,000,101) Ordinary shares of £1.00 each
15,000
15,000



28.


Reserves

Other reserves

Reserve represents fair value movements in the defined benefit pension liability.

Profit and loss account

Reserve represents current year profits and cumulative prior year profits, net of dividends paid.


29.


Capital commitments


At 31 December 2023 the Company had capital commitments as follows:

2023
2022
£000
£000


Non-cancellable purchase orders placed for capital equipment
684
-

684
-

Page 39

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

30.


Pension commitments

The Company operates a Defined Benefit Pension Scheme.

The Company's defined benefit pension scheme, the Southco UK Limited Pension scheme, was closed for new members and future accrual on 30 June 2007. A defined contribution scheme has been set up to replace this. For the defined contribution scheme, contributions are up to 10% for members who previously belonged to the defined benefit scheme and up to 5% for new members.
The Company contributed £585,617 (2022: £569,436) to the defined benefit scheme and £921,605 (2022: £1,249,738) to the defined contribution scheme during the year. The Company expects to contribute £603,775 to the defined benefit scheme during the year ending 31 December 2024.
FRS 102 section 28 requires disclosure of the assets and liabilities as at 31 December 2023 calculated in accordance with the requirements of FRS 102 section 28. A full actuarial valuation was carried out at 31 December 2020 and updated to 31 December 2023 by a qualified actuary. The assets of the scheme have been taken at market value and the liabilities have been calculated using widely accepted actuarial assumptions.



Reconciliation of present value of plan liabilities:


2023
2022
£000
£000

Reconciliation of present value of plan liabilities


At the beginning of the year
17,173
29,577

Interest cost
799
543

Actuarial losses / (gains)
1,053
(12,508)

Benefits paid
(367)
(439)

At the end of the year
18,658
17,173



Reconciliation of present value of plan assets:


2023
2022
£000
£000


At the beginning of the year
13,221
24,127

Interest income
626
448

Return on plan assets less interest
(561)
(11,484)

Contributions
587
569

Benefits paid
(367)
(439)

At the end of the year
13,506
13,221

Page 40

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
30.Pension commitments (continued)

2023
2022
£000
£000


Fair value of plan assets
13,506
13,221

Present value of plan liabilities
(18,658)
(17,173)

Net pension scheme liability
(5,152)
(3,952)


The amounts recognised in profit or loss are as follows:

2023
2022
£000
£000


Interest on obligation
799
543

Interest income on plan assets
(626)
(448)

Total
173
95



Reconciliation of fair value of plan liabilities were as follows:

2023
2022
£000
£000


Opening defined benefit obligation
17,173
29,577

Actuarial losses / (gains)
1,053
(12,508)

Interest cost
799
543

Benefits paid
(367)
(439)

Closing defined benefit obligation
18,658
17,173


Reconciliation of fair value of plan assets were as follows:

2023
2022
£000
£000


Opening fair value of scheme assets
13,221
24,127

Interest income
626
448

Return on plan assets less interest
(561)
(11,484)

Contributions
587
569

Benefits paid
(367)
(439)

13,506
13,221

Page 41

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
30.Pension commitments (continued)


The cumulative amount of actuarial gains and losses recognised in the Statement of Comprehensive Income was £11,151,963 (2022 - £12,765,963).






Principal actuarial assumptions at the Statement of Financial Position date (expressed as weighted averages):

2023
2022
%
%
Discount rate


4.45

4.70
 
Future pension increases


2.0 - 3.0

2.1 - 3.1
 
Inflation assumption RPI


3.25

3.35
 
Inflation assumption CPI


2.6

2.7
 
Mortality rates



 
- for a male aged 65 now


22.0

21.9
 
- at 65 for a male aged 45 now


23.0

22.9
 
- for a female aged 65 now


24.5

24.5
 
- at 65 for a female member aged 45 now


25.6

25.6
 


Assumed healthcare cost trend rates have a significant effect on the amounts recognised in profit or loss. A one percentage point change in assumed healthcare cost trend rates would have the following effects:



Amounts for the current and previous four periods are as follows:


Defined benefit pension schemes

2023
2022
2021
2020
2019
£000
£000
£000
£000
£000
Defined benefit obligation

(18,658)

(17,173)

(29,577)
 
(30,984)
 
(24,338)

Related deferred tax asset

(1,288)

(988)

(1,363)
 
(1,577)
 
-

Scheme assets

13,506

13,221

24,127
 
22,682
 
19,429

Surplus
(6,440)

(4,940)

(6,813)
 
(9,879)
 
(4,909)




Page 42

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

31.


Commitments under operating leases

At 31 December 2023 the Company had future minimum lease payments due under non-cancellable operating leases for each of the following periods:

2023
2022
£000
£000

Land and buildings


Not later than 1 year
298
298

Later than 1 year and not later than 5 years
1,191
1,191

Later than 5 years
447
744


1,936
2,233

Other operating leases


Not later than 1 years
173
172

Later than 1 year and not later than 5 years
328
292

Not later than 5 years
1
-


502
464

Page 43

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

32.


Related party transactions

During the year, Southco Manufacturing Limited undertook a number of transactions with related parties,
which are all members of the group of companies headed by Touchpoint Inc. There were also direct
recharges of expenses incurred for the benefit of other companies in the Touchpoint Inc. group of
companies, which are not included in the table below. Related party transactions are at arms’ length.


2023
2022
£000
£000

Southco Asia Limited
936
1,460
Southco India Pvt Ltd
110
239
Southco Japan Ltd
144
105
Southco Severn Ltd
15,093
15,195
Southco Inc.
45,604
39,615
Southco Fasteners Pty Ltd
13
146
Southco Korea Ltd
54
156
Southco Brasil Componentes Industriais Ltda
787
1,044
Supply Point Systems Ltd
513
998
TouchPoint Medical Inc
6
7
Soar TPI (Holdings) Ltd
49,914
46,295
Touchpoint Investments UK Ltd
5,738
5,658
TouchPoint Medical Nordic AS
-
664
Supply Point Systems Srl
-
10
TouchPoint Medical NV - Romania
634
912
Southco Shanghai Co Ltd
39
358
ITD GmbH
5,928
7,550
TouchPoint Medical NV
2,865
2,644
Ethilog
1,299
1,013
Amounts owed by group undertakings
129,677
124,069

Page 44

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

33.


Related party transactions (cont)

2023
2022
£000
£000

Amounts owed to group undertakings


Southco Shenzhen
893
1,132

Southco GmbH
9,096
8,842

Southco Sarl
1,780
1,586

Southco Srl
579
977

Southco Manufacturing & Technology (Shanghai) Co Ltd
2,167
1,764

Pacoma Systems BV
2,019
2,254

TouchPoint Polska Sp zoo
30,701
31,126

Vanas Engineering NV
2,447
531

Morse Watchmans (UK) Ltd
181
-

Parity Computers Limited
1,311
402

51,174
48,614


34.


Related party transactions (cont)

2023
2022
£000
£000

Sales to group undertakings


Southco Inc
6,684
7,484

Southco Fasteners Pty Ltd
261
252

Southco Asia Ltd
1,378
1,279

Southco Manufacturing & Technology (Shanghai) Co Ltd
132
261

Southco India Pvt Ltd
430
423

Southco Japan Ltd
288
549

Southco Korea Ltd
1,256
494

Southco Shanghai Co Ltd
633
1,173

Southco Shenzhen
35
82

ITD GmbH
7
8

Southco Brasil Componentes Industriais Ltda
222
253

Supply Point Systems Ltd
54
41

Touch Point Polska Sp zoo
4,785
4,679

TouchPoint Medical (Belgium)
1
2


 
16,166
 
16,980

Page 45

 
SOUTHCO MANUFACTURING LIMITED
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

35.


Related party transactions (cont)

2023
2022
£000
£000

Purchases from group undertakings


Southco Inc
4,350
4,933

Southco Fasteners Pty Ltd
2
5

Southco Asia Ltd
23
46

Southco Manufacturing & Technology (Shanghai) Co Ltd
303
299

Southco India Pvt Ltd
65
46

Southco Shanghai Co Ltd
25
2

Southco Shenzhen
1,242
1,553

Southco Brasil Componentes Industriais Ltda
3
9

Southco Japan
2
-

Southco Korea Ltd
4
8

Touch Point Polska Sp zoo
54,452
50,308


 
60,471
 
57,209


36.


Post balance sheet events

There have been no significant events affecting the Company since the year end.


37.


Controlling party

At 31 December 2023, the immediate parent Company was Southco International Inc, which is
incorporated in the United States of America.
The Company's ultimate parent company and ultimate controlling party is Touchpoint Inc., incorporated in
the United States of America. The largest group of which the Company is a member, and for which
consolidated financial statements are prepared is headed by Touchpoint Inc. The accounts of Touchpoint
Inc. are not publicly available. The Directors have made the decision not to consolidate the results of the
Company's subsidiaries into the results of Southco Manufacturing Limited.

Page 46