Registered Number 01169587
Macron Safety Systems (UK) Limited
Annual report and financial statements
for the year ended 30 September 2022
Macron Safety Systems (UK) Limited
Annual report and financial statements for the year ended
30 September 2022
Contents
Page
Strategic report
1
Directors' report
8
Independent auditors' report to the members of Macron Safety Systems (UK) Limited
12
Statement of comprehensive income
15
Statement of financial position
16
Statement of changes in equity
17
Notes to the financial statements
18
Macron Safety Systems (UK) Limited
Strategic report
The directors present their Strategic report on the company, for the year ended 30 September 2022.
Principal activities of business
The company designs, manufactures, and markets fire protection and suppression products and systems. Its products include foam equipment, lay flat fire hoses, hose reels and cabinets, foam agents/foam making concentrates, foam equipment, and trailers and specialist firefighting apparatus, as well as dry riser equipment, including landing valves, inlet breechings, and dry riser boxes. The company also distributes positive pressure ventilators and other firefighting products.
Business review
The results for the year of the company are shown in the accompanying statement of comprehensive income. This shows the company's sales increased by £11.6 million to £67.6 million in 2022 (2021: £56 million) due to the end of lockdown, which meant that demand for the companies' products returned to pre-pandemic levels as the global construction industry rebounded from the effect of Covid-19. Gross profit percentage has increased compared with the prior year at 32.0% (2021: 26.8%) mainly due to additional volumes and price increases implemented during the year. Operating profit increased by £1.2 million to £ 9.9 million (2021: £8.7 million) mainly due to overall increase in production.
Profit before taxation increased by £1.3 million to £9.9 million (2021: £8.6 million).
The Statement of financial position shows that the net assets of the company increased by £9.9 million in the year. At the year end, net assets were £43.2 million (2021: £33.3 million).
Macron Safety Systems (UK) Limited operates as part of Johnson Controls International plc's (JCI) Building Technologies & Solutions division in Europe, Middle East and Africa division, and benefits from research and development conducted primarily in other JCI companies.
In 2022, as a result of the ongoing conflict between Russia and Ukraine, the company announced that it will not receive new contracts from Russian companies.
Future developments
The directors are not aware, at the date of this report, of any likely major changes in the company's activities in the next year.
Business environment and strategy
The market continues to be highly competitive in all areas of operation of the company. The company will continue to focus on providing excellent quality products, being responsive to our customer's lead time requirements, whilst striving to reduce product costs through modern manufacturing methods and increased capital expenditure. The fire protection products are generally sold with the purpose of protecting life and property and the company with the support of the parent company, Johnson Controls International plc's, product research and development facilities continues to invest in and market products that meet rigorous product approval standards.
Key performance indicators
The company's key performance indicators during the year were:
2022
2021
Turnover
£67.6m
£56.0m
Gross profit percentage
32.0%
26.8%
Operating profit
£9.9m
£8.7m
Total equity
£43.2m
£33.3m
1
Macron Safety Systems (UK) Limited
Strategic report (cont'd)
Principal risks and uncertainties
Any of the following could materially and adversely impact the results of operations of our business, delays or difficulties in new product development; the introduction of similar or superior technologies; financial instability or market declines of our major customers or component suppliers; a significant decline in the construction of new commercial buildings requiring interior control systems; changes in energy costs or governmental regulations that would decrease the incentive for customers to update or improve their interior control systems and increased energy efficiency legislation requirements.
The company requires risk management and operational policies and procedures to be implemented in all areas of the business. Furthermore, there is a robust supervision structure which allows management to account for the delivery of the company's contracts and to oversee relationships with its key stakeholders.
The directors consider cybersecurity threats and incidents range from individual attempts to gain unauthorised access to IT systems to advanced persistent threats, directed at the company, our products, customers and/or third party service providers. The potential consequences of a material cybersecurity incident include financial loss, reputational damage, litigation with third parties, theft of intellectual property, fines levied by the authority, diminution in the value of investment in research and development and increased protection and remediation costs. This could adversely affect competitiveness and results of operations of the business.
The company deploys measures to deter, prevent, detect, respond to and mitigate these threats, including identity and access controls, data protection, product software designs, continuous monitoring of IT networks and systems and maintenance of backup and protective systems.
The business is directly impacted by the effects of climate change. The directors recognise that timely adoption of comprehensive energy and climate legislation will reduce economic and regulatory uncertainty and allow the company to better manage both risks and opportunities related to climate change. These uncertainties include emission reduction requirements, energy price volatility, energy-intensive materials pricing, and the impact of building efficiency codes, standards and incentives.
The highest priority action put in place by the group as a whole is to improve energy efficiency in buildings and vehicles which represent the fastest, cleanest and most cost-effective way to reduce greenhouse gas emissions. Our products and services involve promoting energy efficiency and fire and security in buildings; and helping our customers find ways to improve their energy consumption. This encourages consumer behaviour changes to better appreciate the benefits of such products and services. In addition the company continues to support a variety of market-based approaches to regulating carbon emission.
The directors do not foresee any substantial impact on business operations from the ongoing conflict
between Russia and Ukraine. However, they will continue to monitor the situation and take appropriate action if required.
The company requires risk management and operational policies and procedures to be implemented in all areas of business.
Legal risk
In the normal course of business, the company is subject to various legal proceedings and claims, including product and general liability matters, environmental matters, patent infringement claims, employment disputes, disputes on agreements and other commercial disputes.
In an attempt to reduce this risk, company has insurance arrangements with its ultimate parent entity in order to limit the liability payable by the company.
2
Macron Safety Systems (UK) Limited
Strategic report (cont'd)
Streamlined energy and carbon reporting
Global energy consumption and greenhouse gas emissions for the year from 1 October 2021 to 30 September 2022 is as follows:
Current reporting year
Previous reporting
2021-2022
2020-2021
UK and Offshore
UK and Offshore
Energy consumption used to calculate emissions:
/kWh
1,348,959
1,151,856
Emissions from combustion of gas tCO2e (Scope 1)
108
104
Emissions from combustion of fuel for transport purposes
0
3
Emissions from business travel in rental cars or employee-owned vehicles where company is responsible for purchasing the fuel (Scope 3)
**
**
Emissions from purchased electricity (Scope 2)
161
155
Total gross CO2e based on above
17,799
8,022
Intensity ratio: tCO2e gross figure based from mandatory fields above
31.95
14.40
**Emissions from business travel in rental cars or employee-owned vehicles where the company is responsible for purchasing fuel are minimal (Scope 3).
Methodology
Macron Safety Systems (UK) Limited is required to report its global and UK energy use and carbon emissions in accordance with the Companies (Directors' report) and limited liability partnerships (energy and carbon report) regulations 2018. The data detailed in these tables represent emissions and energy use for which the company is responsible. To calculate the emissions, fuel and electricity emissions are calculated based on invoice data and estimation. For significant energy users (manufacturing), energy invoices are used to calculate energy use. For office spaces, an estimate utilizing floor space and energy density are used to calculate fuel and electricity consumption. Vehicle fleet energy and emissions are calculated based on fuel spend reports. Emissions are calculated based on: greenhouse gas reporting conversion factors 2022; Department for Business, Energy & Industrial Strategy and Department for Environment Food & Rural Affairs.
Energy efficiency
We are continuously seeking to improve operational efficiency. Johnson Controls group is committed to identifying and prioritising environmental elements arising from our business activities, products and services. The results of the energy assessments conducted in accordance with the Energy Savings Opportunity Scheme (ESOS) and internal energy hunts have been utilised to determine appropriate actions necessary to reduce the impact of our activities on the environment.
3
Macron Safety Systems (UK) Limited
Strategic report (cont'd)
Streamlined energy and carbon reporting (cont'd)
Energy efficiency  (cont'd)
To further reflect this mindset, in January 2021, we announced ambitious new sustainability commitments that outline our priority to make positive changes in reducing our company's environmental footprint. Building on our history of sustainability leadership, we committed to achieving net zero carbon emissions before 2040 and announced science-based targets for 2030. We set a goal to double our customers' emission reductions through implementation of our OpenBlue digitally enabled solutions. And we are elevating sustainability as a key performance metric for preferred suppliers while also launching a supplier
cohort training initiative to cut supplier emissions. Last year, we launched our OpenBlue digital platform for optimizing building sustainability that will be central to fulfilling these goals.
Environmental sustainability commitments:
• Set science-based targets consistent with the most ambitious 1.5°C Intergovernmental Panel on Climate Change scenario
• Reduce Johnson Controls absolute operational emissions by 55 percent and reduce absolute customers' emissions by 16 percent before 2030
• Achieve net-zero carbon emissions before 2040, in line with the United Nations Framework Convention on Climate Change Race to Zero and Business Ambition for 1.5°C criteria
• Invest 75 percent of new product development R&D in climate-related innovation to develop sustainable products and services
• Achieve 100 percent renewable electricity usage globally by 2040.
The Sustainability Leadership Committee provides regular updates to our Executive Committee and our board of directors. It is chaired by our Chief Sustainability Officer and its members are senior leaders from across our business, functions and regions. It is charged with ensuring we are leaders in all measures of sustainability, embedding sustainability into our culture and operations across the enterprise, building sustainability metrics into employee performance goals, and launching working groups under the Global Sustainability Council (GSC). The GSC and Global Sustainability Team play the roles of connector and coordinator, ensuring streamlined engagement across diverse business functions to deliver on the enterprise sustainability strategy. The GSC was established in 2009 to provide a structure for enterprise-wide sustainability management. The working groups are composed of small teams and are designed to address specific sustainability-related topics.
We have implemented an Energy Hunt Program across our manufacturing facilities. Energy Champions in each plant lead a cross-functional Energy Hunt team in continuous improvement activities that result in annual energy intensity improvements. This program drives culture change and helps our plants identify energy savings opportunities by evaluating measures that include HVAC temperature scheduling, lighting, supply and demand of compressed air, building envelope, and employee energy awareness and engagement.
Around a quarter of our greenhouse gas emissions come from our vehicle fleet. We have a specific vehicle emissions reduction workgroup at a JCI group level to analyse emissions data and ensure we achieve emissions reductions throughout our fleet. We annually analyse our transportation supply chain to improve cost structure and reduce energy use. Over time, we are systematically changing our fleet vehicles, utilising higher fuel economy and electric vehicles where appropriate. We also optimise our logistics and our packaging in order to decrease weight and increase load factors and to include the use of other higher miles per gallon vans and trucks, telematics, and implementing a policy which prohibits speeding and encourages fuel-efficient driving techniques.
4
Macron Safety Systems (UK) Limited
Strategic report (cont'd)
Streamlined energy and carbon reporting (cont'd)
Energy efficiency  (cont'd)
Since October 2020 electric vehicles (EV) have been offered to employees as a choice alongside internal combustion engine (ICE) vehicles throughout our company car scheme in the UK and the 6 other most EV ready countries in Europe. The policy was revised to incorporate EV's, advising drivers to consider their journey profiles and consider their home charging capabilities prior to deciding to take and EV as a company vehicle, with the range of manufacturers to choose from increased for EV's ensuring a wider choice for our drivers. The personal benefit in kind taxation benefits in the UK if taking an EV over an ICE car are considerable which when coupled with our policy changes have seen an EV take up rate of over 50% for renewal orders since October in the company car fleet in UK.
Section 172(1) Statement
Section 172 of the Companies Act 2006 requires a director of a company to act in the way he or she considers, in good faith, would most likely promote the success of the company for the benefit of its members as a whole. In doing this section 172 requires directors to have regard to, amongst other matters, the:
likely consequences of any decisions in the long-term;
interests of the company's employees;
need to foster the company's business relationships with suppliers, customers and others;
impact of the company's operations on the community and environment;
desirability of the company maintaining a reputation for high standards of business conduct; and
need to act fairly as between members of the company.
In discharging our section 172 duties, we have regard to the matters set out above. In addition, we also have regard to other factors which we consider relevant to the decision being made. Those factors, for example, include our relationship with our key stakeholders and society. By considering the company's purpose, vision and values together with its strategic priorities and having a process in place for decision making, we aim to make sure that our decisions are consistent and predictable.
Meetings are held periodically where the directors consider the company's activities and make decisions. As a part of those meetings, the directors receive information in a range of different formats to ensure that they have regard to section 172 matters when making relevant decisions.
The company's key stakeholders are its workforce, customers, suppliers, the local communities in which it operates, regulators, Government agencies, and non-governmental organisations. The views of and the impact of the company's activities on those stakeholders are an important consideration for the directors when making relevant decisions. The size and spread of both the company's stakeholders and the company means that generally our stakeholder engagement takes place at an operational and JCI group level. We find that as well as being a more efficient and effective approach, this also helps us achieve a greater positive impact on environmental, social and other issues than by working alone as an individual company. For details of the engagement that takes place with the Group's stakeholders so as to encourage the directors to understand the issues to which they must have regard, please see pages 11 to 26 of the non-financial disclosure report 2022 within JCI Group's 2022 Annual Reporting which is publicly available on our website at Annual Meeting Materials | Johnson Controls Inc.
At a company level, there are quarterly calls for all senior staff across the business (‘all-hands calls') in which business development, corporate acquisitions, employee health & safety and other pertinent issues are discussed. Weekly emails are sent to all staff in respect of corporate development and performance but with a specific focus on sustainability. Periodic emails are also sent out to encourage staff to consider their own mental health, and access available resources should these be required.
5
Macron Safety Systems (UK) Limited
Strategic report (cont'd)
Section 172(1) Statement (cont'd)
The company continuously innovates to make its products more eco-friendly, liaising with customers to ensure their needs are met in a sustainable yet profitable way. The company undertakes pre-qualification questionnaires with its suppliers to ensure that high and sustainable standards are maintained throughout all lines of business.
We set out below some examples of how we have had regard to the matters set out in section 172(1)(a)-(f) when discharging our section 172 duty and the effect of that on decisions taken by us:
The company ensured that it was following the various targets that JCI Group had fixed in terms of sustainable development, and the company was notably incentivised to do so via the implementation of sustainable development factors (such as vehicle fuel consumption reduction, waste management, health & safety, sustainability evaluation of suppliers) in the calculation of the annual bonuses.
Audits of ISO 14001 Environmental Management System and ISO 50001 Energy Management system were undertaken on JCI Group.
Our environmental and energy systems provide assurance to company management and employees, as well as external stakeholders, that our environmental impacts are being measured and improved upon. We have been able to retain these certifications, notably thanks to everyone's co-operation and support.
The Macron Safety Systems (UK) Limited board considered and agreed upon the implementation of mental health and well-being programmes. The Board's decision-making process included discussions in relation to protecting the mental health of its workforce and reducing absence rates. The Board concluded that ongoing investment in the workforce would help deliver long-term success to the company.
Health and safety is critical to our success as a company. We are committed to a safe and healthy work environment for our employees, our customers and contractors, our visitors, and our communities. We launched a multi-part campaign to promote our vision of Zero Harm to people and the environment. We recognize that our leaders, employees, customers, and communities expect us to work safely and protect the environment. Our Zero Harm vision includes specific pillars around employee safety, health and wellness, and the environment. One example of action implementing this vision is our Distracted Driving Policy, which prohibits all employees and contractors from using any mobile device when driving while on company business. In 2020, in response to the COVID-19, we created additional Zero Harm processes, tools, and solutions to support our employees and sites through the pandemic.
Our environmental and energy systems provide assurance to company management and employees, as well as external stakeholders, that our environmental impacts are being measured and improved upon. We have been able to retain these certifications, notably thanks to everyone's co-operation and support.
On behalf of the board
J Shaw
Director
Date: 12 October 2023
6
Macron Safety Systems (UK) Limited
Directors' report
The directors present their report and the audited financial statements of the company for the year ended 30 September 2022.
Future developments
The future developments of the company are noted in the Strategic report.
Post balance sheet events
Subsequent to the year ended 30 September 2022, the company was informed by the parent entity, Johnson Controls International plc (“JCI”), that disruptions were experienced in portions of its internal information technology infrastructure and applications resulting from a cybersecurity incident. Promptly after detecting the issue, JCI began investigation with assistance from leading external cybersecurity experts and is also coordinating with its insurers. JCI continues to assess what information was impacted and is executing its incident management and protection plan, including implementing remediation measures to mitigate the impact of the incident, and will continue taking additional steps as appropriate. To date, many of JCI's application are largely unaffected and remain operational. To the extend possible, and in line with its business continuity plans, JCI implemented workarounds for certain operations to mitigate disruption and continue servicing its customers. However, the incident has caused, and is expected to continue to cause, disruption to parts of the JCI's business operations.
Dividends
The directors  do not recommend the payment of a dividend in respect of the financial year ended 30 September 2022 (2021: £75,000,000).
Going concern
The directors have considered the financial position, cash flow and liquidity position of the company and have prepared the financial statements on a going concern basis. Further details regarding the adoption of the going concern basis can be found in the accounting policies note in the financial statements.
The directors have received confirmation that the appropriate entity within the Johnson Controls group intends to support the company for at least one year after the financial statements are signed.
Financial risk management objectives and policies
The company's activities expose it to a number of financial risks including credit risk, interest rate risk, exchange rate risk, price risk and liquidity risk. The company does not use derivative financial instruments.
Credit risk
The company's principal financial assets are bank balances and cash, trade and other debtors. 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 debts. An allowance for impairment is made where there is an identified loss event which, based on previous experience, is evidence of a reduction in the recoverability of the cash flows.
The company has no significant concentration of credit risk, with exposure spread over a large number of counterparties and customers.
The company's policy is to use financial institutions authorised by Johnson Controls International plc who actively manage the global banking facilities. All cash held on deposit is pooled at a European level to mitigate risk.
Exchange rate risk
Potential exposure to currency exchange rate fluctuations is managed internally within the Group treasury function. The Group enter into forward exchange contracts on behalf of the company to the value of its future multi currency cash flows. Consequently exchange rate risk is not significant.
7
Macron Safety Systems (UK) Limited
Directors' report (cont'd)
Financial risk management objectives and policies (cont'd)
Price risk
The directors recognise the price risk associated with the Building Technologies & Solutions business is subject to market forces and will impact the prices for product and project management services. To help minimise this risk, prices for large contracts are set on a contract by contract basis. Prices on multi-year contracts are reviewed on an annual basis where possible.
Liquidity and interest rate risk
Cash balances held with external institutions form part of the Johnson Controls International plc group global cash pool arrangement which minimises any interest rate exposure. If funding is required then this is achieved by either an internal loan from a Johnson Controls International plc group company or through cash pooling arrangements. As a result interest rate risk is largely managed as there is no external funding requirement at year end.
All Group risk is closely managed by the corporate risk management team, which is controlled by the ultimate parent company Johnson Controls International plc.
Environmental, health and safety matters
Johnson Controls International plc is a global market leader and therefore has adopted a uniform approach to managing Environmental, Health and Safety (“EHS”) matters by following the principles and guidance contained in both international standards ISO 14001 and OHSAS 18001. All parts of the corporation are expected to demonstrate that the requirements of these two key standards are covered in their country based EHS management system.
The organisation has clear management and functional lines with detailed responsibilities at all levels, which ensure hazards and risks are properly identified and controlled through effective management processes and performance related objectives and targets.
Employment policies
It is the policy of the company that there should be no unfair discrimination in considering applications for employment, based on equal opportunities for all, irrespective of sex, race, colour, disability or marital status.  The company gives full and fair consideration to applications for employment from disabled persons, having regard to their particular aptitudes and abilities. Appropriate arrangements are made for the continued employment and training, career development and promotion of disabled persons employed by the group.  If members of staff become disabled the company continues employment, either in the same or an alternative position, with appropriate retraining being given if necessary.
The company systematically provides employees with information on matters of concern to them, consulting them or their representatives regularly, so that their views can be taken into account when making decisions that are likely to affect their interests. Employee involvement in the company is encouraged, achieving a common awareness on the part of all employees of the financial and economic factors affecting the group. The company encourages the involvement of employees by means of an employee share purchase scheme, regular employee briefings, annual global employee survey and regular awareness days on different topics for company specific matters.
Directors
The following directors served during the year and up to the date of signing this report, unless otherwise stated:
J Shaw
(appointed 18 August 2023)
R Wade
M Ayre
(resigned 18 August 2023)
8
Macron Safety Systems (UK) Limited
Directors' report (cont'd)
Directors' indemnities
As permitted by the Articles of Association, the directors have the benefit of an indemnity which is a qualifying third party indemnity provision as defined by Section 234 of the Companies Act 2006. The indemnity was in force throughout the last financial year and is currently in force. The group also purchased and maintained throughout the financial year Directors' and Officers' liability insurance in respect of itself and its directors.
Statement of directors' responsibilities
The directors are responsible for preparing the Annual report and the financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have prepared the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard Applicable in the UK and Republic of Ireland” and applicable law).
Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that year. In preparing these financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
state whether applicable United Kingdom Accounting Standards, comprising FRS102 have been followed, subject to any material departures disclosed and explained in the financial statements;
make judgements and accounting estimates that are reasonable and prudent; and
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 safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006.
Employee engagement statement
The directors have described the action that has been taken during the financial year to (i) introduce, maintain and develop arrangements aimed at providing employee systematically with information on matters of concern to them as employees; (ii) consulting employees or their representatives on a regular basis so views of employees can be taken into account in decision making; (iii) encouraging the involvement of employees in the company's performance; and (iv) achieving a common awareness on the part of all employees of the financial and economic factors affecting the performance of the company, in the Section 172(1) statement in the Strategic Report.
Engagement with suppliers, customers and others in a business relationship with the company
The directors have regard to the need to foster the company's business relationship with suppliers, customers and others, and the effect of that regard, including on principal decisions taken by the company during the financial year.
9
Macron Safety Systems (UK) Limited
Directors' report (cont'd)
Directors' confirmations
In the case of each director in office at the date the Directors' report is approved:
so far as the director is aware, there is no relevant audit information of which the company's auditors are unaware; and
they have taken all the steps that they ought to have taken as a director in order to make themselves aware of any relevant audit information and to establish that the company's auditors are aware of that information.
Independent auditors
The auditors, PricewaterhouseCoopers, have indicated their willingness to continue in office and a resolution concerning their re-appointment will be proposed at the next Directors' Board Meeting.
On behalf of the Board
J Shaw
Director
Date: 12 October 2023
10
Independent auditors' report to the members of Macron Safety Systems (UK) Limited
Report on the audit of the financial statements
Opinion
In our opinion, Macron Safety Systems (UK) Limited's financial statements:
give a true and fair view of the state of the company's affairs as at 30 September 2022 and of its profit for the year then ended;
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland”, and applicable law); and
have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual report and financial statements (“Annual Report”), which comprise:
the statement of financial position as at 30 September 2022;
the statement of comprehensive income for the year then ended;
the statement of changes in equity for the year then ended; and
the notes to the financial statements, which include a description of the significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law. Our responsibilities under ISAs (UK) are further described in the Auditors' responsibilities for the audit of the financial statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Independence
We remained independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, which includes the FRC's Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
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.
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.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our auditors' report thereon. The directors are responsible for the other information. Our opinion on the financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent otherwise explicitly stated in this report, any form of assurance thereon.
11
In connection with our audit of the financial statements, 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 an apparent material inconsistency or material misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial statements or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report based on these responsibilities.
With respect to the Strategic report and Directors' report, we also considered whether the disclosures required by the UK Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain opinions and matters as described below.
Strategic report and Directors' report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and Directors' report for the year ended 30 September 2022 is consistent with the financial statements and has been prepared in accordance with applicable legal requirements.
In light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we did not identify any material misstatements in the Strategic report and Directors' report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the Statement of directors' responsibilities, the directors are responsible for the preparation of the financial statements in accordance with the applicable framework and for being satisfied that they give a true and fair view. The directors are also responsible for such internal control as they 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.
Auditors' 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 auditors' 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.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is selected.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to;
laws and regulations regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements, including United Kingdom Generally Accepted Accounting Practice, the Companies Act 2006 and taxation legislation; and
those laws and regulations which do not have a direct effect on the determination of material amounts and disclosures in the financial statements but where the consequences of non-compliance could have a material effect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation. We identified the following areas as those most likely to have such an effect: health and safety, data protection, employment law and certain aspects of company legislation. Auditing standards limit the required audit procedures to identify non-compliance with these laws and regulations to enquiry of the directors and other management and inspection of regulatory and legal correspondence, if any. Therefore, if a breach of operational regulations is not disclosed to us or evident from relevant correspondence, an audit will not detect that breach.
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and we considered the extent to which non-compliance might have a material effect on the financial statements. We also considered those laws and regulations that have a direct impact on the financial statements such as the Companies Act 2006. We evaluated management's incentives and opportunities for fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the principal risks were related to management bias in accounting estimates, transactions outside the normal course of business, and the posting of fraudulent journal entries.
Audit procedures performed included:
consideration of fraud risk as part of our audit planning process;
identification of potential risk factors through consideration of the company's business strategies and risks. This includes meetings with management as well as the those charged with governance regarding their perspectives on fraud and compliance with applicable laws and regulations;
consideration of the overall control environment and the processes and controls in place in the company, including procedures to achieve compliance with relevant laws and regulations;
responding to the risk identified by designing appropriate audit procedures;
maintaining professional scepticism throughout the audit;
implementing specific procedures to address risks associated with the management override of controls, including close examination of journal entries and other adjustments, accounting estimates, identifying indicators of possible management bias and significant unusual transactions; and
incorporating unpredictability into our audit process.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion.
A further description of our responsibilities for the audit of the financial statements is located on the FRC's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors' report.
Use of this report
This report, including the opinions, has been prepared for and only for the company's members as a body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
we have not obtained all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been received from branches not visited by us; or
certain disclosures of directors' remuneration specified by law are not made; or
the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Barry O'Halloran (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers
Chartered Accountants and Statutory Auditors
Cork, Ireland
12 October  2023
12 October 2023
13
Macron Safety Systems (UK) Limited
Statement of comprehensive income for the year ended 30 September 2022
2022
2021
Note
£'000
£'000
Turnover
5
67,571
55,998
Cost of sales
(45,940)
(41,014)
Gross profit
21,631
14,984
Administrative expenses
(11,759)
(6,312)
Operating profit
6
9,872
8,672
Interest receivable and similar income
7
253
664
Interest payable and similar expenses
8
(263)
(692)
Profit before taxation
9,862
8,644
Tax credit on profit
9
31
879
Profit for the financial year
9,893
9,523
Total comprehensive income for the year
9,893
9,523
All amounts relate to continuing operations.
14
Macron Safety Systems (UK) Limited
Statement of financial position as at 30 September 2022
2022
2021
Note
£'000
£'000
Fixed assets
Tangible assets
11
1,324
1,769
1,324
1,769
Current assets
Inventories
12
18,689
13,046
Debtors - amounts falling due within one year
13
65,260
110,643
Cash at bank and in hand
590
838
84,539
124,527
Creditors - amounts falling due within one year
14
(41,440)
(91,763)
Net current assets
43,099
32,764
Total assets less current liabilities
44,423
34,533
Provisions for liabilities
15
(1,182)
(1,185)
Net assets
43,241
33,348
Capital and reserves
Called up share capital
17
500
500
Merger reserve
17
(2,495)
(2,495)
Retained earnings
17
45,236
35,343
Total equity
43,241
33,348
The notes on pages 17 to 32 are an integral part of these financial statements.
The financial statements on pages 14 to 32 were approved by the Board of directors on
12 October 2023
12 October 2023
and were signed on its behalf by:
J Shaw
Director
Macron Safety Systems (UK) Limited
Registered Number 01169587
15
Macron Safety Systems (UK) Limited
Statement of changes in equity for the year ended 30 September 2022
Called up share capital
Merger reserve
Retained earnings
Total equity
£'000
£'000
£'000
£'000
Balance as at 1 October 2020
500
(2,495)
100,820
98,825
Dividend paid (note 17)
(75,000)
(75,000)
Profit for the financial year
9,523
9,523
Balance as at 30 September 2021
500
(2,495)
35,343
33,348
Profit for the financial year
9,893
9,893
Balance as at 30 September 2022
500
(2,495)
45,236
43,241
Retained earnings represents accumulated comprehensive income for the current financial year and prior financial years.
16
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022
1    General information
Macron Safety Systems (UK) Limited is a private company limited by shares, domiciled and incorporated in the United Kingdom under the Companies Act 2006. The address of its registered office is Burlingham  House, Hewett Road, Gapton Hall Industrial Estate, Great Yarmouth, Norfolk, England, NR3I ONN.
The company designs, manufactures and markets fire protection and suppression products and systems.
2    Statement of compliance
These financial statements have been prepared in compliance with United Kingdom Accounting Standards, including Financial Reporting Standard 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (FRS 102) and in accordance with the Companies Act 2006.
3    Summary of significant accounting policies
The principal accounting policies, which have been applied in the preparation of these financial statements are set out below. These policies have been consistently applied to both the years/periods presented, unless otherwise stated. The company has applied FRS 102 in these financial statements.
Basis of preparation
These financial statements are prepared on the going concern basis, under the historical cost convention as modified by the recognition of certain financial assets and liabilities at fair value.
The company has significant net receivables due from group companies, which the directors expect to be able to liquidate as necessary to support the business in addition to cash generated from operations.  However, if the company needs additional liquidity, the directors have received assurances from another group company that the company will be able to draw additional funding via the treasury centre that is operated.
The directors have  received confirmation that the appropriate entity within the Johnson Controls group intends to support the company for at least one year after the financial statements are signed.
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the company's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant in these financial statements are disclosed in note 4.
17
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
3    Summary of significant accounting policies (cont'd)
Reduced disclosures
In accordance with FRS 102, the company has taken advantage of the exemptions from the following disclosure requirements on the basis that the information is provided in the consolidated financial statements of Johnson Controls International plc, which is registered in Cork, Ireland.  Johnson Controls International plc prepares consolidated financial statements which are publicly available and can be obtained from the address given in note 22.
Section 4 ‘Statement of Financial Position'
Reconciliation of the opening and closing number of shares;
Section 7 ‘Statement of Cash Flows'
Presentation of a Statement of Cash Flow and related notes and disclosures;
Section 11 ‘Basic Financial Instruments' & Section 12 ‘Other Financial Instrument Issues'
Carrying amounts, interest income/expense and net gains/losses for each category of financial instrument; basis of determining fair values; details of collateral, loan defaults or breaches, details of hedges, hedging fair value changes recognised in the statement of comprehensive income;
Section 26 ‘Share-based payments'
Disclosures are included in the consolidated financial statements of the group;
Section 33 ‘Related Party Disclosures'
Paragraphs 33.7 and 33.1A, Disclosure of compensation for key management personnel and related party transactions.
Group financial statements
The company is exempt from the requirement to prepare and deliver consolidated financial statements under the provisions of Section 401 of the Companies Act 2006 as it is a wholly owned subsidiary undertaking of Johnson Controls International plc, which is registered in Cork, Ireland and which itself prepares consolidated financial statements which are publicly available and can be obtained from the address given in note 22. Accordingly consolidated financial statements have not been prepared and the financial information presented for the current year is for the company as an individual undertaking.
Going concern
The financial statements have been prepared on the going concern basis, notwithstanding net assets of £43.2 million (2021: £33.3 million) which the directors believe to be appropriate for the following reason.  Johnson Controls International plc has provided the company with an undertaking that for at least 12 months from the date of approval of these financial statements, it will continue to make available such funds as are needed by the company to settle obligations as they fall due.
Functional and presentational currency
The company's functional and presentational currency is the pound sterling because the majority of its' economic flows are in pound sterling.
Warranty provision
The company offers warranties to its customers depending upon the specific product and terms of the customer purchase agreement. The purpose of this policy is to define the reserve requirement for warranty obligations incurred in connection with the sale of goods or services to third party customers Where such obligations are documented, a warranty provision shall be recorded on the books of the company.
18
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
3    Summary of significant accounting policies (cont'd)
Foreign currencies
Transactions in currencies other than the functional currency (foreign currencies) are initially recorded at the exchange rate prevailing on the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the reporting date. Non-monetary assets and liabilities denominated in foreign currencies are translated at the rate ruling at the date of the transaction or, if the asset or liability is measured at fair value, the rate when that fair value was determined.
All translation differences are taken to profit or loss, except to the extent that they relate to gains or losses on non-monetary items recognised in other comprehensive income, when the related translation gain or loss is also recognised in other comprehensive income.
Revenue recognition
Turnover represents the amount receivable for goods supplied, net of discounts and value added taxes. Turnover from the sale of goods is recognised in accordance with the shipping terms of the customer agreements, which is typically the date of dispatch.
Taxation
The tax charge represents the sum of the current tax charge and deferred tax charge.
Current tax
Current tax is the amount of income tax payable in respect of the taxable profits for the year or prior years at the standard effective rate of corporation tax in the UK.
Deferred tax
Taxable profits differ from comprehensive income in that, it excludes items of income or expense that are taxable or deductible in other periods. Tax deferred or accelerated as a result of timing differences between the treatment of certain items for taxation and for accounting purposes is provided in full with certain exceptions.  Unrelieved tax losses and other deferred tax assets are only recognised when it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits.
Deferred tax is measured at rates that are expected to apply in the periods which the timing differences are expected to reverse, based on tax rates and laws that have been enacted or substantively enacted by the date of the statement of financial position.  Deferred tax is measured on an undiscounted basis.
19
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
3    Summary of significant accounting policies (cont'd)
Tangible assets and depreciation
Tangible assets are stated at cost, which is the original purchase price plus incidental expenses, less accumulated depreciation. Depreciation is calculated to write off the cost, less estimated residual value of each asset evenly over its expected useful economic life, as follows:
Asset class
Amortisation method and rate
Short term leasehold improvements
straight-line 5 years to 10 years
Plant and machinery
straight-line 4 years to 10 years
Assets in the course of construction
Not subject to depreciation until brought into use
The assets' residual values and useful lives are reviewed, and adjusted, if appropriate, at the end of each reporting period. The effect of any change is accounted for prospectively.
Assets under construction are stated at cost and not depreciated until they are brought into service.
Operating leases
Leases that do not transfer all the risks and rewards of ownership are classified as operating leases.  There are no holiday periods on these operating leases. Payments under operating leases are charged to the Statement of comprehensive income on a straight line basis over the period of the lease.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined on the first-in, first-out method. Cost includes materials, direct labour and an attributable proportion of overheads based on normal levels of activity. Net realisable value is based on estimated selling price, less further costs expected to be incurred to completion and disposal. Provision is made for obsolete, slow moving or defective items where appropriate.
At the end of each reporting period inventories are assessed for impairment. If an item of inventory is impaired, it is reduced to its estimated selling price less costs to complete and sell and an impairment charge is recognised in the statement of comprehensive income. Where an impairment charge is reversed, up to the original impairment loss, a credit is recognised in the statement of comprehensive income.
Cash and cash equivalents
Cash and cash equivalents includes cash in hand, deposits held at call with banks and bank overdrafts.  Bank overdrafts are shown in creditors due within one year.
20
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
3    Summary of significant accounting policies (cont'd)
Financial instruments
Financial assets
Basic financial assets, including debtors, cash and bank balances and loans to fellow group companies are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.
Such assets are subsequently carried at amortised cost using the effective interest rate method and are assessed annually for objective evidence of impairment. Any impairment loss or reversal of an impairment loss is recognised in the Statement of comprehensive income.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred to another party, or (c) despite having retained some significant risks and rewards of ownership, the control of the asset has been transferred to another party who has the practical ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
Financial liabilities
Basic financial liabilities, including trade creditors and other payables, bank loans and loans from fellow group companies, are initially recognised at transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest. Such debt instruments are subsequently carried at amortised cost using the effective interest rate method.
Trade creditors are obligations to pay for goods and services that have been acquired in the ordinary course of business from suppliers. Trade creditors are classed as current liabilities if payment is due within one year or less.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual obligation is discharged, cancelled or expired.
Offsetting
Financial assets and liabilities are offset and the net amounts presented in the financial statements when there is a legally 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.
Dividends
Dividends to the company's shareholders are recognised as a liability in the financial statements in the period in which the dividends are approved by the shareholders. These amounts are recognised in the statement of changes in equity.
Share-based payments
Johnson Controls International plc has four equity-settled share-based incentive schemes to which the management and employees of its overseas subsidiaries, including this company, are eligible to participate in.
Johnson Controls International plc recharges back the cost incurred (being the intrinsic value at exercise) and the income tax due on the employee when the options are exercised. The expense is offset against the retained earnings reserve in the period to which it relates and the tax is offset against the tax incurred on the exercised options calculated through the payroll.
21
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
3    Summary of significant accounting policies (cont'd)
Employee benefits
The company provides a range of benefits to employees, including annual bonus arrangements, paid holiday arrangements, defined contribution pension plans. Short term benefits, including annual bonus, holiday pay and other similar non-monetary benefits, are recognised as an expense in the period in which the service is received.
Defined contribution pension plan
The company operates a defined contribution pension scheme for the benefit of its employees, the assets of which are held separately from those of the company in independently administered funds. The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in the statement of financial position.
Defined benefit pension plan
The company is a member of a group wide defined benefit scheme. As it is not possible to accurately allocate the assets and liabilities by member company, the company accounts for its contributions to this group wide scheme on a defined contribution basis. Details of the position of the group wide defined benefit scheme are disclosed in the financial statements of Tyco Holdings (U.K) Limited, which are publicly available.
Interest receivable and similar income
Interest income is recognised in the period to which it relates regardless of when it is received.
Related party transactions
The company discloses transactions with related parties which are not wholly owned within the same group. It does not disclose transactions with members of the same group that are wholly owned.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.
4    Critical accounting judgements and estimation uncertainty
Critical accounting estimates and assumptions
The company makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have significant risk of causing a material adjustment to the carrying value of assets and liabilities with the next financial year are addressed below:
Inventory provisioning
At the end of each reporting year inventories are assessed for impairment. The calculation involves the use of estimating future usage based on historical sales and also based on the aging of the items. If an item of inventory is impaired, it is reduced to its estimated selling price less costs to complete and sell and an impairment charge is recognised in the statement of comprehensive income. Where an impairment charge is reversed, up to the original impairment loss, a credit is recognised in the statement of comprehensive income. The inventory value of £18,689,000 (2021: £13,046,000) is stated net of a provision £895,000 (2021: £751,000).
22
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
5    Turnover
2022
2021
Turnover by destination
£'000
£'000
United Kingdom
4,894
5,385
Europe
14,884
23,911
Middle East
27,775
15,594
Africa
1,005
595
Rest of world
19,013
10,513
67,571
55,998
2022
2021
Turnover by category
£'000
£'000
Sale of goods
67,571
55,998
67,571
55,998
6    Operating profit
2022
2021
£'000
£'000
Operating profit is stated after charging/(crediting)
Staff costs
wages and salaries
2,662
2,833
social security costs
277
265
other pension costs (note 19)
139
137
Total staff costs charged to statement of comprehensive income
3,078
3,235
Depreciation of tangible assets (note 11)
507
543
Impairment of stock
895
751
Operating lease expense - buildings
341
345
Auditors' remuneration - for audit services
66
52
Foreign exchange loss/(gain)
1,889
(1,370)
23
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
7    Interest receivable and similar income
2022
2021
£'000
£'000
Interest receivable from group undertakings
253
664
253
664
8    Interest payable and similar expenses
2022
2021
£'000
£'000
Bank interest
263
231
Interest payable to group undertakings
461
263
692
9    Tax credit on profit
2022
2021
£'000
£'000
Current Tax
UK Corporation tax at 19% (2021:19%)
Total current tax
(861)
Deferred tax
Origination and reversal of timing differences
(22)
19
Adjustments in respect of prior periods
50
17
Impact of change in corporation tax rate on timing differences
(59)
(54)
Total deferred tax (note 16)
(31)
(18)
Total tax on profit
(31)
(879)
There is no tax charge for the current or prior financial year.
24
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
9    Tax credit on profit (cont'd)
Reconciliation of tax charge/(credit)
The tax assessed for the year is lower (2021: lower) than the standard rate of corporation tax in the United Kingdom of 19% (2021:19%). The differences are explained below:
2022
2021
£'000
£'000
Profit before taxation
9,862
8,643
Profit before taxation multiplied by the standard rate of corporation tax of 19% (2021: 19%)
1,874
1,642
Expenses not deductible for tax purposes
(40)
(15)
Group relief received for nil consideration
(1,856)
(1,608)
Adjustments in respect of prior periods
50
(844)
Impact of change in corporation tax rate on timing differences
(59)
(54)
Total tax credit for the year
(31)
(879)
The standard rate of UK corporation tax is to remain 19% until March 2023. The Finance Act 2021, which increases the UK corporate tax main rate from 19% to 25% from April 1, 2023 was substantively enacted in May 2021.
Temporary differences at the Statement of financial position date have been measured using the enacted deferred tax rate of 25% and reflected in these financial statements.
25
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
10    Directors and employees
2022
2021
Directors' emoluments
£'000
£'000
Remuneration
76
80
Company contributions to defined contribution pension schemes
5
5
81
85
2022
2021
Highest paid director
£'000
£'000
Remuneration including benefits in kind
76
80
Company contributions to defined contribution pension schemes
5
5
81
85
2022
2021
Share incentives
No
No
Received or entitled to receive shares under the long term
1
1
incentive schemes in the ultimate parent company
1
1
During the year the number of directors who were receiving benefits and share incentives was as above.
One director was remunerated by the company during the year (2021: one). The other director was remunerated by a fellow subsidiary undertaking in respect of services provided to a number of group companies as director. The directors are not able to apportion the emoluments attributable to services provided to each company (2021: same).
Staff numbers
The average monthly number of employees, including executive directors, during the year, analysed by category, was as follows:
2022
2021
Number
Number
Sales, office, staff and management
3
12
Administration and support
81
81
84
93
26
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
11    Tangible assets
Leasehold improvements
Plant and machinery
Assets under construction
Total
£'000
£'000
£'000
£'000
Cost
At 1 October 2021
1,417
6,251
103
7,771
Additions
62
62
Reclassification
87
(87)
At 30 September 2022
1,417
6,400
16
7,833
Accumulated
depreciation
At 1 October 2021
1,214
4,788
6,002
Charge for the year
64
443
507
At 30 September 2022
1,278
5,231
6,509
Net book value
At 30 September 2022
139
1,169
16
1,324
At 30 September 2021
203
1,463
103
1,769
12    Inventories
2022
2021
£'000
£'000
Finished goods and goods for resale
7,123
5,866
Raw material
11,566
7,180
18,689
13,046
In the opinion of the directors there is no material difference between the Statement of financial position value of stocks and their replacement cost. The inventory value of £18,689,000 (2021: £13,046,000) is stated net of a provision £895,000 (2021: £751,000) which has been recognised in the cost of sales.
27
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
13    Debtors - amounts falling due within one year
2022
2021
Amounts falling due within one year
£'000
£'000
Trade debtors
13,965
6,849
Amounts owed by group undertakings
49,764
102,668
Other debtors
984
326
Deferred tax asset (note 16)
275
243
VAT receivable
149
335
Prepayments
123
222
65,260
110,643
Amounts owed by group undertakings include a loan of  £6,832,309 (2021: £5,678,000) which bears interest of 2.93% and from 3rd of August 2022 4.49% (2021: 1.68%). This loan is unsecured and repayable on demand.
Also included within amounts owed by group undertakings is an amount of £32,167,000 (2021: £86,583,000) in respect of UK cash pooling arrangements, which attracted nil interest (2021: nil interest per annum). The amount is unsecured and repayable on demand.
All other amounts owed by group undertakings are unsecured, interest free, and repayable on demand.
Trade debtors are stated after provisions for impairment of £172,000 (2021: £166,000).
14    Creditors – amounts falling due within one year
2022
2021
£'000
£'000
Bank overdrafts
20,996
81,237
Trade creditors
8,643
6,381
Amounts owed to group undertakings
5,351
2,058
Other creditors
89
179
Forward exchange contracts
1,834
168
Accruals
1,593
1,740
Customer deposits
2,934
41,440
91,763
All amounts owed to group undertakings are unsecured, interest free and are repayable on demand.
The Johnson Controls International plc group has a cash pooling arrangement with Bank Mendes Gans ("BMG") which manages the funding requirement for EMEA group companies. BMG balances are unsecured, repayable on demand and interest rates are set and calculated daily for each currency. Overdraft rates are equal to overnight base rates + 0.98% margin. The bank overdrafts form part of this cash pooling arrangement.
28
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
14    Creditors – amounts falling due within one year (cont'd)
The company entered into forward exchange currency contracts during the year to mitigate the exchange rate risk for the foreign currency transactions. As at the year end the company had agreements in place to buy AED 28,234 million in exchange for £5,859 million, $13,220 million in exchange for £11,017 million and EUR 0,150 million in exchange for £0,125 million (2021:buy AED 28,379 million in exchange for £5,892 million and $9,650 million in exchange for £7,013 million),and to sell EUR 3,7 million in exchange for £4,4 million (2021:sell $0,937 million in exchange for  £1,290 million).
15    Provisions for liabilities
Warranty provisions
2022
2021
£'000
£'000
At the beginning of the year
1,185
1,126
Charged to the Statement of comprehensive income
255
211
Utilised during the year
(258)
(152)
At the end of the year
1,182
1,185
Costs of warranty include the cost of labour, material and related overhead necessary to repair a product during the warranty period.
16    Deferred tax
The deferred tax asset recognised consists of:
2022
2021
£'000
£'000
Fixed asset timing differences
183
161
Short term timing differences
65
64
Research and development
27
19
Total deferred tax recognised
275
244
£'000
Asset recognised at 1 October, 2021
244
Amount charged to Statement of comprehensive income
31
Asset recognised at 30 September, 2022
275
There was no unprovided deferred tax at either year end.
29
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
17    Called up share capital
30 September 2022
30 September 2021
Allotted, called-up and fully paid
No
£'000
No
£'000
Ordinary shares of £1 each (£1.00 called up and fully paid)
480,000
480
480,000
480
Deferred shares of £1 each (£1 called up and fully paid)
20,000
20
20,000
20
500,000
500
500,000
500
The deferred ordinary shares and ordinary shares rank pari passu in all respects.
In the prior year, a dividend was declared payable the company's then immediate parent undertaking,
Tyco Fire Integrated Solutions (UK) Limited at a cost of £75,000,000. This was paid in
September 2021. Following in this Johnson Controls Building Efficiency UK Limited purchased the whole
of the share capital of Macron Safety Systems (UK) Ltd.
Merger reserve
The merger reserve of £2,495,000 relates to the company purchasing certain assets of L.P.G Tecnicas en Extincion de Incendios, S.L(Sociedad Unipersonal) for £3,000,000 in September 2015 as part of a wider group reorganisation.
Retained earnings
Retained earnings represents accumulated comprehensive income for the financial year and prior financial year.
18    Operating lease commitments
The company had the following future minimum lease payments under non-cancellable operating leases for each of the following years:
2022
2021
Payments due
£'000
£'000
Within one year
310
310
Within two to five years
319
625
629
935
Leases for land and buildings are subject to periodic rent review.
30
Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
19    Pension costs
Macron Safety Systems (UK) Limited participated in a number of pension schemes; a defined contribution scheme - Tyco UK Group Pension Scheme (‘Tyco UKGPS').
New employees joining the company are auto enrolled and offered membership of the Tyco UKGPS, which is a defined contribution scheme. The cost of contributions in the year was £139,000 (2021: £137,000).
Macron Safety Systems (UK) Limited is in a group where an intermediate parent company, Tyco Holdings (U.K) Limited, operates a legacy defined benefit pension plan. This scheme has no active members and the company is not a sponsoring employer. As it is not possible for the company to determine the assets and liabilities of a defined benefit pension plan to individual companies within the group; as permitted by FRS102, the company has accounted for this defined benefit plan as a defined contribution scheme.
Tyco Holdings (U.K) Limited is the sponsoring employer of the Tyco UK Holdings CARE Pension Scheme, a defined benefit plan providing career average revalued earnings benefits, which is now closed to new entrants. The CARE Scheme has been closed to future accrual since 30 April 2010. The assets are held in a separate trustee administered fund. The assets and liabilities of the Tyco UK Group Pension Scheme (ex-Glynwed) were transferred into the Tyco Holdings (U.K) Limited CARE Pension Scheme on 28 September 2015 and are now included within that scheme. The last funding valuation of the Scheme was carried out by a qualified actuary as at 30 September 2019.
20    Contingent liabilities
The company has given a guarantee of £200,000 to HM Revenue and Customs in relation to the duty deferment account. (2021: £200,000).
21    Post balance sheet events
Subsequent to the year ended 30 September 2022, the company was informed by the parent entity, Johnson Controls International plc (“JCI”), that disruptions were experienced in portions of its internal information technology infrastructure and applications resulting from a cybersecurity incident. Promptly after detecting the issue, JCI began investigation with assistance from leading external cybersecurity experts and is also coordinating with its insurers. JCI continues to assess what information was impacted and is executing its incident management and protection plan, including implementing remediation measures to mitigate the impact of the incident, and will continue taking additional steps as appropriate. To date, many of JCI's application are largely unaffected and remain operational. To the extend possible, and in line with its business continuity plans, JCI implemented workarounds for certain operations to mitigate disruption and continue servicing its customers. However, the incident has caused, and is expected to continue to cause, disruption to parts of the JCI's business operations.
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Macron Safety Systems (UK) Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
22    Ultimate parent undertaking and controlling party
The company's immediate parent undertaking is Tyco Holdings (U.K.) Limited, a company incorporated in the United Kingdom.
The ultimate parent undertaking and controlling party is Johnson Controls International plc, a company incorporated in Cork, Ireland.  Johnson Controls International plc is the parent undertaking of the smallest and largest group of undertakings to consolidate these financial statements for the year ended 30 September 2022. The consolidated financial statements of Johnson Controls International plc are available from:
Johnson Controls International plc
1 Albert Quay
Cork
Ireland
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