Caseware UK (AP4) 2023.0.135 2023.0.135 2023-12-312023-12-312023-01-01falsefalseHolding company00false 08368439 2023-01-01 2023-12-31 08368439 2022-01-01 2022-12-31 08368439 2023-12-31 08368439 2022-12-31 08368439 2022-01-01 08368439 c:Director1 2023-01-01 2023-12-31 08368439 c:Director2 2023-01-01 2023-12-31 08368439 c:Director3 2023-01-01 2023-12-31 08368439 c:Director3 2023-12-31 08368439 c:Director4 2023-01-01 2023-12-31 08368439 c:RegisteredOffice 2023-01-01 2023-12-31 08368439 c:Agent1 2023-01-01 2023-12-31 08368439 d:CurrentFinancialInstruments 2023-12-31 08368439 d:CurrentFinancialInstruments 2022-12-31 08368439 d:CurrentFinancialInstruments d:WithinOneYear 2023-12-31 08368439 d:CurrentFinancialInstruments d:WithinOneYear 2022-12-31 08368439 d:UKTax 2023-01-01 2023-12-31 08368439 d:UKTax 2022-01-01 2022-12-31 08368439 d:ShareCapital 2023-12-31 08368439 d:ShareCapital 2022-12-31 08368439 d:ShareCapital 2022-01-01 08368439 d:RetainedEarningsAccumulatedLosses 2023-01-01 2023-12-31 08368439 d:RetainedEarningsAccumulatedLosses 2023-12-31 08368439 d:RetainedEarningsAccumulatedLosses 2022-01-01 2022-12-31 08368439 d:RetainedEarningsAccumulatedLosses 2022-12-31 08368439 d:RetainedEarningsAccumulatedLosses 2022-01-01 08368439 d:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2023-12-31 08368439 d:FinancialAssetsDesignatedFairValueThroughProfitOrLoss 2022-12-31 08368439 d:FinancialLiabilitiesFairValueThroughProfitOrLoss d:ListedExchangeTraded 2023-12-31 08368439 d:FinancialLiabilitiesFairValueThroughProfitOrLoss d:ListedExchangeTraded 2022-12-31 08368439 c:OrdinaryShareClass1 2023-01-01 2023-12-31 08368439 c:OrdinaryShareClass1 2023-12-31 08368439 c:OrdinaryShareClass1 2022-12-31 08368439 c:FRS102 2023-01-01 2023-12-31 08368439 c:Audited 2023-01-01 2023-12-31 08368439 c:FullAccounts 2023-01-01 2023-12-31 08368439 c:PrivateLimitedCompanyLtd 2023-01-01 2023-12-31 08368439 6 2023-01-01 2023-12-31 08368439 2023-01-01 2023-12-31 xbrli:shares iso4217:GBP xbrli:pure

Registered number: 08368439









SOUTHCO SEVERN LTD









ANNUAL REPORT AND FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2023

 
SOUTHCO SEVERN LTD
 
 
COMPANY INFORMATION


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




Registered number
08368439



Registered office
Touchpoint
Wainwright Road

Warndon

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 SEVERN LTD
 

CONTENTS



Page
Strategic Report
1
Directors' Report
2 - 3
Independent Auditors' Report
4 - 8
Statement of Comprehensive Income
9
Statement of Financial Position
10
Statement of Changes in Equity
11 - 12
Notes to the Financial Statements
13 - 20


 
SOUTHCO SEVERN LTD
 
 
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023

Introduction
 
The directors present their strategic report for the year end 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 activity is as a holding company. The company holds 99.99% of the share capital of Southco Brasil Componentes Industriais Ltda.
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.

Principal risks and uncertainties
 
The Company's investment is impacted by the performance of the Brazilian economy. Central to this has been  the devaluation of the Brazilian Real over the last 5 years.
The management team in the subsidiary company are actively involved in managing these risks. 
Liquidity risk:
The Company participates in group centralised treasury facilities.
Foreign currency risk:
Inter-company balances owed are in a currency different to sterling. This gives rise to the risk of currency fluctuatons. Howeve, 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 Directors make investment decisions and review company performance through a process of annual budget preparation, and monthly performance reviews. Group instructions direct policy in the areas of credit control and customer risk management. 

Financial key performance indicators
 
The Directors do not apply KPI's to the performance of the Company, which is an investment holding company.
Other key performance indicators:
The Directors monitor the performance of the Company's investments and the wider group and make appropriate decisions based on the results.

Page 1

 
SOUTHCO SEVERN LTD
 
 
 
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 FRS 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 to 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.

Going concern

Following a review of forecasts, statement of comprehensive income and statement of financial position, the board is satisfied the Company has sufficient financial resources. 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 $400M and extend its expiration date to August 2027. A guarantee from Touchpoint Inc is obtained to cover any shortfall in the Company'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.

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.

Future Development

The Directors believe that the company will continue to maintain its function as a holding company and that the risks that have been identified are being well managed.

 

Page 2

 
SOUTHCO SEVERN LTD
 
 
 
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023

Directors

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

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

Disclosure of information to auditors

The directors confirm that: 
so far as the 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.

Small companies note

In preparing this report, the directors have taken advantage of the small companies exemptions provided by section 415A of the Companies Act 2006.

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





Daniel Bush
Director

Date: 2 September 2024

Page 3

 
SOUTHCO SEVERN LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOUTHCO SEVERN LTD
 


Opinion

We have audited the financial statements of  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 equit 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 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 the matter described in the basis for qualified opinion section of our report, the company’s financial statements:

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

Basis for qualified opinion

As more fully described 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 undertaking, Southco Brasil Componentes Industriais Ltda. In our opinion, the company is required to prepare group accounts in accordance with section 399 of the Companies Act of 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’.The effect on the financial statements of the failure to consolidate the in accordance with FRS 102 section 9 has not been determined.


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.

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
Page 4

 
SOUTHCO SEVERN LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOUTHCO SEVERN LTD
 

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, 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 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. 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.

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
Page 5

 
SOUTHCO SEVERN LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOUTHCO SEVERN LTD
 

certain disclosures of directors’ remuneration specified by law are not made;
we have not received all the information and explanations we require for our audit
the Directors were not entitled to prepare the financial statements in accordance with the small companies regime and take advantage of the small companies' exemptions in preparing the directors' report and from the requirement to prepare a strategic report

Responsibilities of directors

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

In preparing the financial statements, the directors are responsible for assessing the 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 obtained an understanding of the legal and regulatory frameworks applicable to the company and industry in which it operates through our general commercial and sector experience, discussions with management and review of board minutes. We determined that the following laws and regulations were most significant: FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’, the Companies Act 2006 and the relevant tax compliance regulations in the UK. In addition, we concluded that there are certain laws and regulations that may have an effect on the determination of the amounts and disclosures in the financial statements such as those relating to health and safety and employee matters;

We enquired of management concerning the company’s policies and procedures relating to:
- the identification, evaluation and compliance with laws and regulations
- the detection and response to the risks of fraud; and
- the establishment of internal controls to mitigate risks related to fraud or non-compliance with laws  
   and regulations;

We enquired of management and those charged with governance, whether they were aware of any instances of noncompliance with laws and regulations or whether they had any knowledge of actual, suspected or alleged fraud;

We assessed the susceptibility of the 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;

Page 6

 
SOUTHCO SEVERN LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOUTHCO SEVERN LTD
 

identifying and assessing the design and implementation of controls management has in place to prevent and detect fraud;

challenging assumptions and judgements made by management relating to its areas of significant estimation and judgement;

completion of audit procedures to conclude on the compliance of disclosures in the annual report 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 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 7

 
SOUTHCO SEVERN LTD
 
 
 
INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF SOUTHCO SEVERN LTD
 







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




02/09/2024
Page 8

 
SOUTHCO SEVERN LTD
 
 
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023

2023
2022
Note
£
£

  

Administrative expenses
  
(4,141)
(1,689)

Other operating income / (charges)
  
393,985
(1,354,883)

Operating profit/(loss)
 4 
389,844
(1,356,572)

Interest payable and similar expenses
 6 
(429,730)
(422,607)

Loss before tax
  
(39,886)
(1,779,179)

Tax on loss
 7 
-
89,542

Loss for the financial year
  
(39,886)
(1,689,637)

The notes on pages 13 to 20 form part of these financial statements. All amounts relate to continuing activities.

Page 9

 
SOUTHCO SEVERN LTD
REGISTERED NUMBER: 08368439

STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023

2023
2022
Note
£
£

Fixed assets
  

Investments
 8 
5,222,752
5,222,752

  
5,222,752
5,222,752

Current assets
  

Cash at bank and in hand
 9 
1,558
1,338

  
1,558
1,338

Creditors: amounts falling due within one year
 10 
(29,120,037)
(29,079,931)

Net current liabilities
  
 
 
(29,118,479)
 
 
(29,078,593)

Total assets less current liabilities
  
(23,895,727)
(23,855,841)

  

Net liabilities
  
(23,895,727)
(23,855,841)


Capital and reserves
  

Called up share capital 
 12 
2
2

Profit and loss account
 13 
(23,895,729)
(23,855,843)

  
(23,895,727)
(23,855,841)


The Company's financial statements have been prepared in accordance with the provisions applicable to companies subject to the small companies regime.

The financial statements were approved and authorised for issue by the board and were signed on its behalf by: 




Daniel Bush
Director

Date: 2 September 2024

The notes on pages 13 to 20 form part of these financial statements.

Page 10

 
SOUTHCO SEVERN LTD
 

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


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2023
2
(23,855,843)
(23,855,841)


Comprehensive income for the year

Loss for the year
-
(39,886)
(39,886)


At 31 December 2023
2
(23,895,729)
(23,895,727)


The notes on pages 13 to 20 form part of these financial statements.

Page 11

 
SOUTHCO SEVERN LTD
 

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


Called up share capital
Profit and loss account
Total equity

£
£
£

At 1 January 2022
2
(22,166,206)
(22,166,204)


Comprehensive income for the year

Loss for the year
-
(1,689,637)
(1,689,637)


At 31 December 2022
2
(23,855,843)
(23,855,841)


The notes on pages 13 to 20 form part of these financial statements.

Page 12

 
SOUTHCO SEVERN LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

1.


General information

Southco Severn Ltd is a private company limited by shares and is incorporated in England and Wales. Its
registered head office is located at Touchpoint, Wainwright Road, Worcester, Worcestershire, WR4 9FA. The principal activity of the Company is as a holding company.

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

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 undertaking Southco Brasil Componentes Industriais Ltda. 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', but has not done so. As such, the financial statements provide information about the Company only and not about its group.
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
  - the requirements of Section 7 Statement of Cash Flows; and
  - the requirements of Section 3 Financial Statement Preparation paragraph 3.17(d).

The following principal accounting policies have been applied:

  
2.2

Going concern

In forming their going concern assessment the Directors have obtained a letter of support from its immediate parent undertaking, Southco Manufacturing Limited, and from its ultimate parent company and ultimate controlling party, Touchpoint Inc, who have agreed to provide financial support to the Company for a period of 12 months from the approval of these financial statements. As a result of this the Directors have a reasonable expectation that Southco Severn Ltd 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.

 
2.3

Finance costs

Finance costs are charged to profit or loss 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.

Page 13

 
SOUTHCO SEVERN LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

 
2.4

Taxation

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.

 
2.5

Valuation of investments

Investments in subsidiaries are measured at cost less accumulated impairment.

Investments in unlisted Company shares, whose market value can be reliably determined, are remeasured to market value at each balance sheet date. Gains and losses on remeasurement are recognised in the Profit and Loss Account for the period. Where market value cannot be reliably determined, such investments are stated at historic cost less impairment.

Investments in listed company shares are remeasured to market value at each Statement of Financial Position date. Gains and losses on remeasurement are recognised in profit or loss for the period.

 
2.6

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.

Page 14

 
SOUTHCO SEVERN LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)

  
2.7

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'.

 
2.8

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.

 
2.9

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 Profit and Loss Account.
Page 15

 
SOUTHCO SEVERN LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

2.Accounting policies (continued)


2.9
Financial instruments (continued)


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.

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.


Judgments in applying accounting policies and key sources of estimation uncertainty

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.
Management considers the only significant estimate to be the evaluation of whether the Company's investments are impaired. At each reporting date investments are reviewed to determine whether there is any indication that those assets have suffered an impairment loss. If there is an indication of possible impairment, the recoverable amount of any affected asset is estimated and compared with its carrying amount. If estimated recoverable amount is lower, the carrying amount is reduced to its estimated recoverable amount, and an impairment loss is recognised immediately in profit or loss.


4.


Operating profit/(loss)

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

2023
2022
£
£

(Gain) / Loss on foreign exchange
(393,985)
1,354,883


5.


Auditors' remuneration

The audit fee in relation to services provided to Southco Severn Ltd amounting to £15,450 has been borne by its parent company Southco Manufacturing Limited. This includes expenses incurred in performing the audit.




Page 16

 
SOUTHCO SEVERN LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

6.


Interest payable and similar expenses

2023
2022
£
£


Loans from group undertakings
429,730
422,607

429,730
422,607


7.


Taxation


2023
2022
£
£

Corporation tax


Adjustments in respect of previous periods
-
(89,542)

-
(89,542)


Total current tax
-
(89,542)

Deferred tax

Total deferred tax
-
-


Taxation on profit/(loss) on ordinary activities
-
(89,542)

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 23.52% (2022 - 19%). The differences are explained below:

2023
2022
£
£


Loss on ordinary activities before tax
(39,886)
(1,779,179)


Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 23.52% (2022 - 19%)
(9,381)
(338,044)

Effects of:


Effects of group relief/ other reliefs
9,381
338,044

Adjustment from previous periods
-
(89,542)

Total tax charge for the year
-
(89,542)

Page 17

 
SOUTHCO SEVERN LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
 
7.Taxation (continued)


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.


8.


Fixed asset investments





Investments in subsidiary companies

£



Cost or valuation


At 1 January 2023
23,671,278



At 31 December 2023

23,671,278



Impairment


At 1 January 2023
18,448,526



At 31 December 2023

18,448,526



Net book value



At 31 December 2023
5,222,752



At 31 December 2022
5,222,752

Each year the value of the net investment in the Brazilian subsidiary is compared to its net assets revalued at the balance date. An impairment charge is then made to bring these two values into line.


9.


Cash and cash equivalents

2023
2022
£
£

Cash at bank and in hand
1,558
1,338

1,558
1,338


Page 18

 
SOUTHCO SEVERN LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

10.


Creditors: Amounts falling due within one year

2023
2022
£
£

Amounts owed to group undertakings
29,120,037
29,079,931

29,120,037
29,079,931



11.


Financial instruments

2023
2022
£
£

Financial assets


Cash and cash equivalents
1,558
1,338


Financial liabilities


Financial liabilities measured at amortised cost
29,120,037
29,079,932


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 liabilities measured at amortised cost comprise amounts owed to group undertakings.


12.


Share capital

2023
2022
£
£
Allotted, called up and fully paid



2 (2022 - 2) Ordinary shares of £1.00 each
2
2



13.


Reserves

Profit and loss account

Reserves represent current year profits and the accumulation of historic profits, net of dividends paid, of which there are nil for both 2023 and 2022.

Page 19

 
SOUTHCO SEVERN LTD
 
 
 
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023

14.


Related party transactions

Related party transactions in the current period consist only of amounts owed to the parent company. Amounts owed to Southco Manufacturing Limited at 31 December 2023 amounted to £29,120,037  (2022: £29,079,032). This amount includes a loan and associated interest, and it is at arms’ length. Amounts owed to group companies are repayable on demand.


15.


Post Balance Sheet events

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


16.


Controlling party

At 31 December 2023, the immediate parent company was Southco Manufacturing Limited, which is
incorporated in the United Kingdom.
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 subsidiary into the results of Southco Severn Limited. 

Page 20