Registered Number 01937350
ADT Finance Limited
Annual report and financial statements
for the year ended 30 September 2022
ADT Finance Limited
Annual report and financial statements for the year ended
30 September 2022
Contents
Page
Strategic report
1
Directors' report
2
Independent auditors' report to the members of ADT Finance Limited
5
Statement of comprehensive income
8
Statement of financial position
9
Statement of changes in equity
10
Notes to the financial statements
11
ADT Finance 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 had no other activity other than to provide finance and financial services to the group and the directors do not envisage that this will change in the foreseeable future.
Business review
The results for the period are given in the Statement of comprehensive income on page 8. This shows the company's total comprehensive income increased by £52.0 million to £35.4 million profit for the year (2021: £16.6 million loss). Profit for the year is primarily a result of the gains arising on the purchase of future income rights of £30.5 million.
The Statement of financial position shows that the net assets of the company increased by £35.4 million in the year as a result of the profit generated for the year described above.  At the year end, net assets were £376.8 million (2021: £341.4 million).
On 28 September 2022 the company entered into an agreement to purchase the future income rights assets including the benefit of the earnings and the assumption of the financial risks associated therewith during the period from 1 October 2022 to 30 September 2023 with various companies within the group for a total consideration of £177,917,654 which represents the fair value of the future income rights.
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.
Principal risks and uncertainties
The directors have assessed the principal risks and uncertainties for this company to be minimal due to group policy which requires risk management and operational policies and procedures to be implemented in all areas of business together with a robust supervision structure.
The primary potential risk to the business is the recovery of the amounts due from group undertakings and management continues to monitor their recoverability closely. The company itself has received assurances from another group company that the company will be able to draw additional funding via the treasury centre that is operated, if additional liquidity is required.
On behalf of the board
James Earnshaw
Director
Date: 12 October 2023
1
ADT Finance 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 22, 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 JCl's applications are largely unaffected and remain operational. To the extent 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 JCl's business operations (see note 13).
Dividends
The directors do not recommend payment of a dividend (2021: nil).
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 and liquidity risk. The company does not use derivative financial instruments.
Credit risk
The company is not exposed to any credit risk other than in respect of inter-company balances within the Johnson Controls International plc group. The company does not have an external customer base. 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.
The company entered into an agreement with various group undertakings to purchase future income rights (“transactions”). If the actual amount of sales made by the group undertakings during that period exceeds the projected future income by at least 5%, the company would pay the group undertakings a purchase price adjustment corresponding to 75% of the difference between the projected future income and the actual amount of sales made. If the amount of actual sales is less than the projected future income there will be no purchase price adjustment to the detriment of the group undertakings and the company will bear all the risk. The group undertakings will carry on and conduct its business in substantially the same manner and will do all things necessary or useful to preserve and keep in full force and effect its existence and to preserve at all times its rights in full under the agreements. In arriving at the fair value for each of the transactions, an asymmetric purchase price adjustment was calculated and applied to the purchase price for each group undertaking to take into account any volatility in sales.
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.
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
2
ADT Finance Limited
Directors' report (cont'd)
Liquidity and interest rate risk (cont'd)
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.
Directors
The following directors served during the year and up to the date of signing this report, unless otherwise stated:
M Ayre
(resigned 18th  August 2023)
J Earnshaw
(appointed 14th  August 2023)
P Schieser
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.
3
ADT Finance 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
James Earnshaw
Director
Date: 12 October 2023
4
Independent auditors' report to the members of ADT Finance Limited
Report on the audit of the financial statements
Opinion
In our opinion, ADT Finance 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.
5
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.
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.
6
Based on our understanding of the company and industry, we identified that the principal risks of non-compliance with laws and regulations related to taxation legislation, 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 override of controls with journal entries and management bias in accounting estimates. Audit procedures performed included:
Discussion with management around actual and potential litigation and claims;
Discussions with management, in respect of risk of fraud and any known or suspected instances of non-compliance with laws and regulation and fraud and reviewing board minutes;
Confirmation with those charged with governance in respect of risk of fraud and any known or suspected instances of non-compliance with 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;
Challenging assumptions and judgements made by management associated with accounting estimates; and
Implementing specific procedures to address risks associated with management override of controls, including examination of journal entries.
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
12 October 2023
2023-10-12
7
ADT Finance Limited
Statement of comprehensive income for the year ended 30 September 2022
2022
2021
Note
£'000
£'000
Other operating income / (expenses)
4,319
(4,645)
Operating profit / (loss)
4,319
(4,645)
Interest receivable and similar income
5
34,378
8,531
Interest payable and similar expenses
6
(3,284)
(20,483)
Profit / (loss) before taxation
7
35,413
(16,597)
Tax credit on profit / (loss)
8
Profit / (loss) for the financial year
35,413
(16,597)
Total comprehensive income / (expenses) for the year
35,413
(16,597)
All amounts relate to continuing operations.
8
ADT Finance Limited
Statement of financial position as at 30 September 2022
2022
2021
Note
£'000
£'000
Current assets
Debtors - amount falling due within one year
10
43,393
391,992
Debtors - amount falling due after more than one year
10
177,918
16,989
Cash at bank and in hand
155,583
144,169
376,894
553,150
Creditors - amounts falling due within one year
11
(120)
(211,789)
Net current assets
376,774
341,361
Net assets
376,774
341,361
Capital and reserves
Called up share capital
12
300,000
300,000
Retained earnings
76,774
41,361
Total equity
376,774
341,361
The notes on pages 11 to 18 are an integral part of these financial statements.
The financial statements on pages 8 to 18 were approved by the Board of directors on
12 October 2023
12 October 2023
and were signed on its behalf by:
James Earnshaw
Director
ADT Finance Limited
Registered Number 01937350
9
ADT Finance Limited
Statement of changes in equity for the year ended 30 September 2022
Called up share capital
Retained earnings
Total equity
£'000
£'000
£'000
Balance as at 1 October 2020
300,000
57,958
357,958
Loss for the financial year and total comprehensive expense
(16,597)
(16,597)
Balance as at 30 September 2021
300,000
41,361
341,361
Profit for the financial year and total comprehensive income
35,413
35,413
Balance as at 30 September 2022
300,000
76,774
376,774
Retained earnings represents accumulated comprehensive income for the current financial year and prior financial years.
10
ADT Finance Limited
Notes to the financial statements for the year ended 30 September 2022
1    General information
ADT Finance 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 Security House, The Summit, Hanworth Road, Sunbury On Thames, Middlesex, England, TW16 5DB.
The company's principal activities are that of a finance company.
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 are therefore of the opinion that preparing the financial statements on the going concern basis is appropriate.
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.
Certain corresponding amounts have been revised so they are directly comparable with the amounts shown in respect of the current financial year.
11
ADT Finance 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 14.
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 33 ‘Related Party Disclosures'
Paragraphs 33.7 and 33.1A, Disclosure of compensation for key management personnel and related party transactions.
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.
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.
12
ADT Finance Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
3    Summary of significant accounting policies (cont'd)
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.
Cash and cash equivalents
Cash held as part of the global cash pooling arrangements is shown in amounts owed by group undertakings.
Financial instruments
Financial assets
Basic financial assets, including amounts owed by group undertakings and other receivables 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.Other financial assets, including amounts owed by group undertakings relating to the purchase of future income rights are initially recognised at transaction price. Such assets are subsequently measured and carried at fair value and the changes in fair value are recognised in the Statement of comprehensive income.
Financial liabilities
Basic financial liabilities, including amounts owed to group undertakings and other payables 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.
13
ADT Finance Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
3    Summary of significant accounting policies (cont'd)
Financial liabilities (cont'd)
Other creditors payable within one year that do not constitute a financing transaction are initially measured at the transaction price and subsequently measured at amortised cost, being the transaction price less any amounts settled.
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.
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.
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:
Fair value of receivables
For the amounts owed by group undertaking relating to the purchase of the future income rights, the purchase price was initially recorded at a transaction price which represents the present value of the future receipts discounted at a market rate of interest for a similar debt instrument. There is no active external market for these arrangements nor does any group company currently have any similar assets. Therefore, the fair value calculation was derived from discounted cash flow calculations in order to set the purchase price for each agreement. These calculations involve the use of estimates including projected future cash flows and other future events, discounted to present value using an appropriate effective interest rate. If estimated payments change as a result of underlying revenue on the relevant financial asset, the carrying value of the asset is recalculated based on the amended future cash flows and any adjustment is recognised in the Statement of comprehensive income.
Impairment of receivables
The company regularly reviews the financial health and business outlook for each respective undertaking
in order to assess the recoverability of the intercompany receivables. If the review indicates a risk to the
recoverability of the intercompany receivables, an impairment charge against the outstanding balance is
provided.
14
ADT Finance Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
5    Interest receivable and similar income
2022
2021
£'000
£'000
Bank interest receivable
1,333
647
Interest receivable from intercompany loans
2,525
7,884
Gain on purchase of future income rights
30,520
34,378
8,531
6       Interest payable and similar expenses
2022
2021
£'000
£'000
Bank interest payable
1,967
2,350
Interest payable to group undertakings
1,317
8,080
Loss on purchase of future income rights
10,053
3,284
20,483
7    Profit / (loss) before taxation
Profit / (loss) before taxation is stated after charging / (crediting)
2022
2021
£'000
£'000
(Gain) / loss on purchase of future income rights (note 5/6)
(30,520)
10,053
(Reversal of impairment)/Impairment of amounts owed by group undertakings
(4,593)
4,593
15
ADT Finance Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
8    Tax credit on profit / (loss)
There is no tax credit for the current or prior financial year.
Reconciliation of tax credit
The tax assessed for the year is lower (2021: higher) 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 / (loss) before taxation
35,413
(16,597)
Profit / (loss) before taxation multiplied by the standard rate of corporation tax of 19% (2021: 19%)
6,728
(3,153)
Expenses not deductible for tax purposes
(873)
2,329
Group relief (received) / surrendered for nil consideration
(5,855)
824
Total tax credit for the year
The standard rate of UK corporation tax is to remain at 19% until 31 March 2023. The Finance Act 2021, which increases the UK corporation tax main rate from 19% to 25%  from 1 April 2023, was substantively enacted in May 2021. Temporary differences at the Statement of financial position have been measured using the enacted deferred tax rate of 25% and reflected in these financial statements.
9    Directors and employees
The directors received no remuneration (2021: £nil) in respect of their services to the company during the year as their services as directors of the company were incidental to the other services within the Johnson Controls International plc group of companies. Directors' remuneration costs are borne by other members of the Johnson Controls International plc group of companies.  It is not possible to determine an allocation to this company. The average monthly number of employees, excluding directors, is nil (2021: nil).
16
ADT Finance Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
10    Debtors
2022
2021
Amounts falling due within one year
£'000
£'000
Amounts owed by group undertakings
43,148
391,980
Other debtors
245
12
43,393
391,992
Amounts falling due after more than one year
£'000
£'000
Amounts owed by group undertakings
177,918
16,989
177,918
16,989
Amounts owed by group undertakings at 30 September 2022 includes a loan of £12,123,917 (2021: £nil) due to mature on 5 October 2022, which bears interest at a rate of 14.44% per annum.
Included in amounts owed by group undertakings at September 2021 was a loan of £186,583,000 due to mature on 31 January 2022, which carried interest at a rate of 1.09% per annum. On 31 January 2022, this loan was extended until 31 January 2023 at a fixed rate of 1.65% per annum thereafter. This loan was fully repaid in June 2022.
Included in amounts owed by group undertaking is an amount of £208,927,378 (2021: £204,595,000) which represent the amounts recoverable by the company from various companies within the group for the purchase of the future income rights at 30 September 2023.
The amounts represent the fair value of the future income rights. If the actual amount of sales made by the group undertakings during that period exceeds the projected future income by at least 5%, then the company would pay the group undertakings a purchase price adjustment corresponding to 75% of the difference between the projected future income and the actual amount of sales made. If the amount of sales is less than the projected future income there will be no purchase price adjustment to the detriment of the group undertakings and the company will bear all the risk. Within 90 calendar days after the end of each month during the sale period and/or after receipt of income, the group undertakings shall make one or more transfers aggregating the sum of payments it has collected in respect of the Future Income Rights during the relevant month.
All other amounts owed by group undertakings are unsecured, interest free, and repayable on demand.
17
ADT Finance Limited
Notes to the financial statements for the year ended 30 September 2022 (cont'd)
11    Creditors – amounts falling due within one year
2022
2021
£'000
£'000
Amounts owed to group undertakings
8
211,784
Other creditors
112
5
120
211,789
Amounts owed to group undertakings at 30 September 2021 includes one loan with a value of £210,258,000 due to mature on 31 January 2022, which beared interest at a fixed rate of 1.09% per annum. On 31 January 2022, this loan was extended until 31 January 2023 at a fixed rate of 1.65% per annum thereafter. On March 2022, this loan was repaid in full.
All other amounts owed to group undertakings are unsecured, interest free and are repayable on demand.
12    Called up share capital
30 September 2022
30 September 2021
Authorised, alloted and fully paid
No
£'000
No
£'000
Ordinary shares of £1 each
300,000,000
300,000
300,000,000
300,000
13    Post balance sheet events
Subsequent to the year ended 30 September 22, 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 JCl's applications are largely unaffected and remain operational. To the extent 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 JCl's business operations.
14    Ultimate parent undertaking and controlling party
The company's immediate parent undertaking is ADT (UK) 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
18
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